20230601Direct Jeppsen.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

OF IDAHO POWER COMPANY FOR
AUTHORITY TO INCREASE ITS RATES AND CHARGES FOR ELECTRIC SERVICE
IN THE STATE OF IDAHO AND FOR ASSOCIATED REGULATORY ACCOUNTING TREATMENT.
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CASE NO. IPC-E-23-11

IDAHO POWER COMPANY DIRECT TESTIMONY
OF
PAULA JEPPSEN
JEPPSEN, DI 1
Idaho Power Company
Q. Please state your name, business address, and 1
present occupation. 2
A. My name is Paula Jeppsen, and my business 3
address is 1221 West Idaho Street, Boise, Idaho. I am 4
employed by Idaho Power Company (“Idaho Power” or 5
“Company”) as the Forecasting and Planning Director within 6
the Finance department. 7
Q. Please describe your educational background. 8
A. I graduated in 1999 from Boise State 9
University, receiving a Bachelor of Arts degree in Finance. 10
In 2010, I earned a Master of Business Administration 11
degree from Colorado State University. In 2021, I attended 12
the Energy Executive Course through the University of 13
Idaho. 14
Q. Please describe your work experience with 15
Idaho Power. 16
A. In 2007, I was hired as a Financial Analyst in 17
the Finance department. In 2010, I was promoted to Finance 18
Team Leader. My primary responsibilities included leading a 19
team of financial analysts, supporting and facilitating 20
budgeting, advising on proper accounting treatment, and 21
preparing and reviewing financial analyses. In 2016, I was 22
promoted to Business Unit Finance Director; in 2019, my 23
duties were broadened, and my title was changed to 24
Financial Accounting and Reporting Director. In these 25
JEPPSEN, DI 2
Idaho Power Company
roles, I provided oversight and direction to the Business 1
Unit Finance Support teams, Property Accounting department, 2
Financial Accounting and Reporting department, and 3
Financial Planning and Analysis department. In 2022 my role 4
changed slightly, and my title changed to Forecasting and 5
Planning Director. In this role I continued to be 6
responsible for overseeing the Business Unit Finance 7
Support teams and Financial Planning and Analysis 8
department. I also added oversight of the Load Research and 9
Forecasting team when I moved into this role. 10
Q. What is the purpose of your testimony in this 11
proceeding? 12
A. The purpose of my testimony is two-fold. 13
First, I will present the Company’s historical actual 14
audited financial information for the 12-month period ended 15
December 31, 2022. Second, my testimony will discuss the 16
quantification of certain adjustments to operating expenses 17
and rate base consistent with previous Idaho Public 18
Utilities Commission (“Commission”) directives regarding 19
regulatory treatment that result in an adjusted historical 20
actual 12-month period ended December 2022 (“2022 Base”). 21
Finally, I will discuss the quantification of certain 22
adjustments to operating expenses and rate base associated 23
with the Boardman Power Plant (“Boardman”), the Jim Bridger 24
Power Plant (“Bridger”), the North Valmy Generating Station 25
JEPPSEN, DI 3
Idaho Power Company
(“Valmy) and Idaho Power’s Wildfire Mitigation Plan 1
(“WMP”). 2
Q. Please describe the manner in which the 2022 3
financial data is presented. 4
A. Actual 2022 financial data is presented using 5
the account names from the Commission-approved Uniform 6
System of Accounts (“USA”). This data has been fully 7
audited and was filed with the U.S. Securities and Exchange 8
Commission and the Federal Energy Regulatory Commission 9
(“FERC”) in the Company’s Form 10-K and FERC Form 1, 10
respectively. The components of the 2022 financial data 11
include the following items: (1) other operating revenues; 12
(2) other revenues and expenses;(3) operation and 13
maintenance (“O&M”) expenses;(4) property insurance 14
expenses;(5) regulatory commission expenses;(6) 15
depreciation and amortization expense;(7) electric 16
plant/regulatory assets - amortizations, adjustments, 17
gains, and losses;(8) regulatory debits and credits;(9) 18
taxes other than income taxes;(10) Idaho Energy Resources 19
Company’s (“IERCo”) statement of income and rate base 20
components;(11) allowance for funds used during 21
construction (“AFUDC”) related to the Hells Canyon 22
relicensing;(12) electric plant in service and related 23
items;(13) materials and supplies;(14) other deferred 24
programs;(15) Plant Held for Future Use;(16) accumulated 25
JEPPSEN, DI 4
Idaho Power Company
deferred income taxes;(17) customer advances for 1
construction; and (18) certain deductions from O&M 2
expenses. 3
Q. Please describe the rationale for quantifying 4
adjustments to the 2022 actual financial data (“2022 5
Actuals”). 6
A. Several of the adjustments to 2022 Actuals 7
that I have quantified are in conformance with prior 8
Commission orders and thus have become, in the opinion of 9
the Company, standard regulatory adjustments. The 10
adjustments that are not the result of prior orders are the 11
adjustments to Plant Held for Future Use, adjustments to 12
remove Bridger coal-related expenses, Valmy expenses, 13
Transmission of Electricity by Others (“Third Party 14
Transmission”) expenses that are included in normalized net 15
power supply expenses (“NPSE”), Oregon COVID-related 16
expenses, regulatory expenses and intervenor funding, an 17
adjustment to include WMP-related expenses that were 18
deferred in 2022 and a few other minor adjustments to O&M 19
expenses. I will discuss the rationale for these 20
adjustments later in my testimony. 21
The Company has made adjustments to remove expenses as 22
previously directed by the Commission. These adjustments 23
include the removal of certain general advertising 24
expenses, specific memberships and contributions, certain 25
JEPPSEN, DI 5
Idaho Power Company
management expenses, and other exclusions that, although 1
justified for business purposes, may be viewed as more 2
appropriately funded by shareholders than customers and are 3
therefore not recoverable through the Company’s rates. 4
The following have also been removed from 2022 5
Actuals:(1) all 2022 incentive compensation; (2) the 6
financial impacts of both the Idaho and Oregon Energy 7
Efficiency Rider revenues and expenses; (3) Bridger coal-8
related expenses; (4) Valmy expenses; (5) Boardman, Bridger 9
coal-related and Valmy plant, depreciation expense and 10
accumulated depreciation; (6) Third Party Transmission 11
actual 2022 expense that is included in normalized NPSE, 12
and, finally, (7) certain Oregon COVID-related expenses, 13
regulatory expenses, and intervenor funding amounts. 14
Q. How has the Company treated prepayments in 15
this case? 16
A. Prepayments have been removed in their 17
entirety, consistent with previous Commission orders. This 18
adjustment is reflected in Company Witness Ms. Kelley Noe’s 19
Exhibit No. 34. 20
Q. Please describe the Company’s proposed 21
adjustment to Plant Held for Future Use. 22
A. The Company is proposing Plant Held for Future 23
Use as of December 31, 2022, be included in rate base but 24
adjusted to remove structures and specific properties for 25
JEPPSEN, DI 6
Idaho Power Company
which the future use is uncertain (e.g., subject to being 1
divided for partial use or removed due to the possible 2
change in need for the property). The rationale for 3
inclusion of Plant Held for Future Use and the adjustments 4
will be discussed in more detail later in my testimony. 5
Q. Are you sponsoring exhibits that contain the 6
2022 Actuals and 2022 adjustments by the components you 7
have just identified? 8
A. Yes. I am sponsoring Exhibit Nos. 22 through 9
24 which detail 2022 Actuals and the 2022 adjustments by 10
component categories. The additional adjustments to get 11
from the 2022 Base to the 2023 Test Year, which are also 12
contained in my exhibits, are addressed in the Direct 13
Testimony of Company Witness Mr. Matthew Larkin. 14
Q. Please describe Exhibit No. 22. 15
A. Exhibit No. 22 is a compilation of the 16
Company’s supporting schedules for the adjusted historical 17
actual data for the 12-month period ended December 31, 18
2022. 19
Q. Please describe pages 1 through 13 of Exhibit 20
No. 22. 21
A. Page 1 of Exhibit No. 22 reflects the detail 22
for Other Operating Revenues, Accounts 451, 454, and 456. 23
Page 2 reflects the detail of Other Revenues and Expenses, 24
Accounts 415 and 416. Pages 3 through 6 reflect the O&M 25
JEPPSEN, DI 7
Idaho Power Company
expenses by USA account. Page 7 reflects the detail of 1
Property Insurance Expense, Account 924. Page 8 reflects 2
the detail of Regulatory Commission Expenses, Account 928. 3
Page 9 includes Depreciation and Amortization Expense, 4
Accounts 403 and 404. Page 10, Electric Plant/Regulatory 5
Assets – Amortizations, Adjustments, Gains, and Losses, 6
Account 406, presents the Asset Exchange acquisition 7
adjustment amortization. Page 11 reflects Regulatory Debits 8
and Credits, Accounts 407.3 and 407.4, respectively. Page 9
12 shows the detail of Taxes Other Than Income Taxes. 10
Q. Please explain the adjustment you have made 11
on page 1 of Exhibit No. 22, Other Operating Revenues, to 12
arrive at the 2022 Base. 13
A. The adjustment on line 21, column 4 to the 14
2022 Actuals removes the impact of the Energy Efficiency 15
Rider revenues as directed in Commission Order No. 30189. 16
Q. Please describe the adjustments quantified 17
on Pages 3 through 6 of Exhibit No. 22, O&M expenses. 18
A. Pages 3 through 6 include the standard 19
regulatory adjustments that I will discuss in more detail 20
later in my testimony. Pages 3 through 6 also include 21
adjustments related to Bridger, Valmy, Third Party 22
Transmission expenses, Oregon COVID-related expenses, 23
Oregon regulatory expenses and Oregon intervenor funding, 24
WMP-related expenses, and a couple of other minor 25
JEPPSEN, DI 8
Idaho Power Company
adjustments to O&M expenses. I will discuss each of these 1
adjustments individually. 2
Q. Please describe the Company-proposed 3
adjustment to O&M expenses related to Bridger. 4
A. On June 1, 2022, the Commission authorized 5
the Company to establish a balancing account, with the 6
necessary regulatory accounting, to track the incremental 7
costs and benefits associated with the Company’s cessation 8
of coal-fired operations at Bridger as part of the Bridger 9
coal-related levelized revenue requirement mechanism.1 In 10
this case the Company proposes to include as part of the 11
Bridger coal-related levelized revenue requirement, all 12
coal-related non-fuel O&M expenses, as compared to the 13
previous methodology that included only the variances 14
between actual coal-related non-fuel O&M expenses and coal-15
related non-fuel O&M expenses included in 2011 base rates 16
as part of the mechanism. 17
The Company’s update to the Bridger related levelized 18
revenue requirement reflects cost recovery at current 19
levels, with the exception of collection related to 20
previously deferred revenue requirement amounts. It also 21
allows for the presentment of Bridger coal-related non-fuel 22

1 In the Matter of Idaho Power Company’s Application for Authority to Increase Its Rates for Electric Service to Recover Costs Associated
with the Jim Bridger Power Plant, Case No. IPC-E-21-17 Order No. 35423(June 1, 2022).
JEPPSEN, DI 9
Idaho Power Company
O&M expenses to align with the presentment of Bridger coal-1
related plant-related investments in the Bridger levelized 2
revenue requirement. To avoid double counting Bridger coal-3
related non-fuel O&M expenses, an adjustment was made to 4
remove actual 2022 Bridger O&M (“Bridger O&M Adjustment”). 5
The Bridger coal-related levelized revenue requirement 6
mechanism will be discussed more fully in Mr. Larkin’s 7
testimony. 8
Q. How was the Bridger O&M Adjustment 9
calculated? 10
A. The Bridger O&M Adjustment, a reduction of 11
$30,338,732, consists of the removal of 2022 actual O&M 12
totaling $30,474,476, partially offset by $135,744 related 13
to a negative entry recorded in 2022 to Account 557.007. 14
The 2022 reduction to actual O&M was calculated using the 15
sum of non-fuel O&M charged to Bridger-related accounts in 16
2022 including 500.001, 502.001, 506.001, 507.001, 510.001, 17
512.001, 513.001, 514.001, and 557.007. Table 1 below 18
presents the amounts charged to each account:19
JEPPSEN, DI 10
Idaho Power Company
TABLE 1 1
2022 Bridger O&M Accounts 2
Table 1 2022 Bridger O&M Accounts O&M $s

Subtotal Idaho Bridger Allocated 30,474,476
557.007 (135,744)
Total Bridger O&M Adjustment $ 30,338,732
3
The Idaho jurisdictional allocation was computed using 4
the allocation factors approved in the Company’s last 5
general rate case.2 The subtotal, including the allocated 6
2022 Bridger O&M expense, results in a reduction of 7
$30,474,476. These adjustments are included on page 3, 8
lines 1 through 14, column 5. The negative amount of 9
$135,744 was added back to zero out the 557.007 account. 10
This adjustment is on page 4, line 12, column 5. The 11
557.007 account is specific to Idaho, so the jurisdictional 12
allocation factor was not applied to this account. 13

2 In the Matter of the Application of Idaho Power Company for Authority
to Increase Its Rates and Charges for Electric Service in Idaho, Case No. IPC-E-11-08, Order No. 32426 (Dec. 30, 2011).
JEPPSEN, DI 11
Idaho Power Company
Q. Please describe the Company’s proposed 1
adjustment to O&M expenses related to Valmy. 2
A. On May 31, 2017, the Commission authorized the 3
Company to establish a balancing account, with the 4
necessary regulatory accounting, to track the incremental 5
costs and benefits associated with the accelerated Valmy 6
end-of-life as part of the Valmy levelized revenue 7
requirement mechanism.3 In this case, like the proposed 8
change to the Bridger coal-related levelized revenue 9
requirement, the Company proposes to include as part of the 10
Valmy levelized revenue requirement all non-fuel in O&M 11
expenses, as compared to the previous methodology, that 12
included only the variances between actual non-fuel O&M 13
expenses and the non-fuel O&M expense included in 2011 base 14
rates as part of the mechanism. This modification does not 15
reflect an increase in overall collection, but rather an 16
update to the base from which variances are tracked. It 17
also allows for the presentment of Valmy non-fuel O&M 18
expenses to align with the presentment of Valmy plant-19
related investments in the Valmy levelized revenue 20
requirement. To avoid double counting non-fuel O&M 21
expenses, an adjustment was made to remove actual 2022 22

3 In the Matter of the Application of Idaho Power Company for Authority to Increase Its Rates for Electric Service to Recover Costs Associated
with the North Valmy Plant, Case No. IPC-E-16-24 Order No. 33771 (May 31, 2017).
JEPPSEN, DI 12
Idaho Power Company
Valmy O&M (“Valmy O&M Adjustment”). 1
Q. How was the Valmy O&M Adjustment calculated? 2
A. The Valmy O&M Adjustment, a reduction of 3
$10,614,592, was calculated using the sum of O&M charged to 4
Valmy-related accounts in 2022 including 500.003, 502.003, 5
505.003, 506.003, 511.003, 512.003, 513.003, and 514.003. 6
Table 2 below presents the amounts charged to each account: 7
TABLE 2 8
2022 Valmy O&M Accounts 9
Table 2 2022 Valmy O&M Accounts O&M $s
10
The Idaho jurisdictional allocation was 11
computed using the allocation factors approved in the 12
Company’s last general rate case. The Idaho jurisdictional 13
allocated 2022 Valmy O&M expense results in a reduction to 14
O&M of $10,614,592, which is included on page 3, lines 1 15
through 14, column 5. 16
JEPPSEN, DI 13
Idaho Power Company
Q. Please describe the adjustment related to 1
Third Party Transmission expense, Account 565. 2
A. The test year third Party Transmission expense 3
is included in normalized NPSE that is more fully discussed 4
in the Direct Testimony of Company Witness Ms. Jessica 5
Brady. Therefore, an adjustment was made to remove actual 6
2022 Third Party Transmission expenses of $11,322,964 from 7
O&M. This adjustment is shown on page 5, line 6, column 5, 8
Account 565. 9
Q. Please describe the adjustment related to the 10
WMP-related expenses. 11
A. On June 17, 2021, the Commission authorized 12
Idaho Power to defer its Idaho-jurisdictional incremental 13
O&M expenses, incremental insurance expenses, and 14
depreciation expenses for its capital expenditures related 15
to its WMP for recovery in a future rate proceeding.4 16
Incremental O&M and insurance expenses are measured from a 17
2019 base. In 2022, Idaho Power deferred $21,003,203 of 18
Idaho jurisdictional WMP-related expenses. In this case, 19
the Company proposes to continue to defer certain 20
incremental WMP-related expenses. This request is discussed 21

4 In the Matter of Idaho Power Company’s Application for an Accounting Order Authorizing the Deferral of Incremental Wildfire Mitigation and
Insurance Costs, Case No. IPC-E-21-02, Order No. 35077 (June 17, 2021); In the Matter of Idaho Power Company’s Application for Review of the Company’s Current Wildfire Mitigation Plan and Authorization to Defer
Newly Identified Incremental Wildfire Mitigation Costs, Case No. IPC-E-22-27, Order No. 35717 (Mar. 23, 2023).
JEPPSEN, DI 14
Idaho Power Company
more fully in Mr. Tatum’s testimony. 1
To set a new 2022 base year that will be used to track 2
incremental WMP-related expenses going forward, an 3
adjustment was made to add the amounts deferred in 2022 to 4
O&M, thus resetting 2022 actual WMP-related O&M to what it 5
would have been absent the deferrals (“WMP O&M 6
Adjustment”). 7
Q. How was the WMP O&M Adjustment calculated? 8
A. The WMP O&M Adjustment, an increase of 9
$20,229,304, was calculated by identifying the amounts by 10
O&M account that were deferred in 2022, with certain 11
adjustments for labor, depreciation, and amortization 12
expense to avoid double counting of test year amounts. 13
Table 3 below presents the amounts adjusted to each account 14
in detail: 15
//16
JEPPSEN, DI 15
Idaho Power Company
TABLE 3 1
2022 WMP O&M Accounts 2
Table 3 2022 WMP O&M

Net Adjustment
571.000 $ 930,096 $ (124,562) .) $ 805,534
580.000 3,922 3,922
583.000 105,035 105,035
584.000 4,282 4,282
593.000 13,204,749 (502,437) .) 12,702,312
594.000 18,123 18,123
596.000 3,043 3,043
924.000 1,277,597 1,277,597
925.000 5,309,456 5,309,456
403.290 141,418 (141,418) .) (0)
404.290 5,482 (5,482) .) (0)
$ 21,003,203 $ (773,899) $ 20,229,304

1.) Remove 2022 actual labor included in O&M labor forecast.
2.) Remove depreciation & amortization expense included in
The Idaho-jurisdictional WMP O&M Adjustment results in 3
an increase to O&M of $20,229,304, which is included on 4
page 5, lines 13, 18, 21, 22, 32, 33, and 35, column 5 and 5
page 6, lines 20 and 21, column 5. 6
Q. Please describe the adjustment for Oregon 7
COVID-related expenses. 8
A. There are two adjustments for Oregon COVID-9
related expenses. The first adjustment removes $354,610 of 10
JEPPSEN, DI 16
Idaho Power Company
amortization expense recorded to Account 904.002 in 2022 1
for the deferred incremental costs and savings through 2
December 31, 2021, related to the COVID-19 Arrearage 3
Management Program that is being collected in Oregon rates 4
pursuant to Public Utility Commission of Oregon (“OPUC”) 5
Order No. 22-192. The second adjustment is related to a 6
reserve recorded in 2021 for COVID-19 Arrearage Management 7
Program costs. After the OPUC authorized collection of the 8
deferred 2021 COVID-19 Arrearage Management Program costs 9
on May 31, 2022, the reserve was reversed, resulting in a 10
negative $552,743 being recorded to Account 904.003. Idaho 11
Power made an adjustment to add this amount back, 12
effectively zeroing out the recording of the reserve in 13
2021 and the reversal of the reserve in 2022. The net of 14
these two adjustments is $198,133 which can be seen on page 15
6, line 4, column 5, Account 904. 16
Q. Please describe the adjustments for Oregon 17
regulatory expenses and intervenor funding. 18
A. An adjustment was made to remove $28,878 in 19
amortization expense for deferred Oregon annual regulatory 20
expenses and $36,197 in amortization expense for the Oregon 21
Citizens’ Utility Board (“CUB”) intervenor funding being 22
collected in Oregon rates pursuant to OPUC Order Nos. 21-23
166 and 22-192. These amounts were recorded to Account 24
928.303 in 2022. The total adjustment is $65,075, which can 25
JEPPSEN, DI 17
Idaho Power Company
be seen on page 6, line 27, column 5, Account 928. 1
Q. Were there any other adjustments to O&M on 2
page 3 through 6 of Exhibit No. 22? 3
A. Yes. In addition to the standard regulatory 4
adjustments there were two other adjustments to O&M. The 5
first was a $124,942 adjustment to Account 537 Hydraulic 6
Expenses related to an Idaho Department of Fish and Game 7
invoice that was under accrued at year-end 2022. This 8
adjustment is included on page 3, line 18, column 5, 9
Account 537. The second was a $9,801 adjustment to Account 10
536 Water Leases to correct for an error that occurred at 11
the beginning of 2022. This adjustment zeroes out this 12
account as there were no water leases in 2022 and none 13
expected in 2023. This adjustment can be seen on page 3, 14
line 17, column 5, Account 536. 15
Q. Please describe the adjustment quantified on 16
page 7 of Exhibit No. 22, Property Insurance. 17
A. The amount included on line 6 of page 7 18
represents the adjustment to Account 924 for deferred WMP-19
related property insurance as seen in Table 3 above. 20
Q. Please describe the adjustment quantified on 21
page 8 of Exhibit No. 22, Regulatory Commission Expenses. 22
A. The amount included on line 14 of page 8 23
represents the adjustment to Account 928.303 for Oregon 24
annual regulatory expenses and Oregon CUB intervenor 25
JEPPSEN, DI 18
Idaho Power Company
funding described in this testimony above. 1
Q. Please describe the adjustments quantified on 2
page 9 of Exhibit No. 22, Depreciation and Amortization 3
Expense. 4
A. The amount on line 2, column 4 of page 9 5
removes Bridger coal-related and Valmy depreciation 6
expense. The adjustment for 2022 Bridger coal-related 7
electric plant depreciation expense is $5,100,316. The 8
adjustment for 2022 Valmy electric plant depreciation 9
expense is $19,484,573. The sum of these two adjustments is 10
a $24,584,889 reduction to depreciation expense. 11
Q. Please describe the adjustments quantified on 12
page 11 of Exhibit No. 22, Regulatory Debits and Credits. 13
A. On June 25, 2020, the Commission authorized 14
the Company to record expenses associated with cloud 15
computing arrangements to a regulatory asset. Further, the 16
Commission directed that amortization begins when the asset 17
is placed in service and becomes used and useful.5 Idaho 18
Power has recorded a regulatory asset for the Idaho-only 19
portion of prepaid licensing costs for the Zycus 20
procurement tool cloud computing agreement. The amount on 21
line 3, column 4 of page 11 reduces cloud computing 22
amortization by $173,640 to only the amount associated with 23

5 In the Matter of Idaho Power Company’s Application for an Accounting Order for Costs Associated with Cloud Computing Arrangements, Case No.
IPC-E-20-11, Order No. 34707, pg. 3 (June 25, 2020).
JEPPSEN, DI 19
Idaho Power Company
the Zycus procurement tool that is currently used and 1
useful which is $201,265. 2
Q. Please describe the adjustments quantified on 3
page 12 of Exhibit No. 22, Taxes Other Than Income Taxes, 4
to arrive at the adjusted 2022 Base. 5
A. The amounts included on lines 1, 2, 20 and 21 6
of page 12, column 4 in Exhibit No. 22 are eliminated by 7
the state and federal payroll loading reversal on line 25, 8
column 4. These amounts represent federal unemployment, 9
Social Security, and state unemployment taxes, 10
respectively. The state and federal payroll loading 11
reversal effectively removes these amounts from Taxes Other 12
Than Income Taxes and spreads them over all accounts that 13
receive labor charges. Therefore, the adjustments in column 14
4, page 12 eliminate these expenses in their entirety in 15
order to demonstrate that these amounts are not double 16
counted when determining the Company’s revenue requirement. 17
The amounts included on lines 8 and 9 of Exhibit No. 22 18
represent the removal of property taxes related to Bridger 19
and Valmy, respectively. 20
Q. Please describe pages 13 and 14 of Exhibit No. 21
22. 22
A. Page 13 of Exhibit No. 22 reflects the net 23
earnings of IERCo that are added to operating income for 24
ratemaking purposes and page 14 reflects AFUDC related to 25
JEPPSEN, DI 20
Idaho Power Company
the Hells Canyon relicensing that is currently being 1
collected from customers. 2
Q. How does the Company treat IERCo’s earnings 3
and investment for ratemaking purposes? 4
A. The primary purpose of IERCo is to mine the 5
coal that fuels the Bridger plant in Wyoming. Consistent 6
with prior Commission orders, the Company treats IERCo’s 7
coal operations as a part of its utility operations and, 8
accordingly, adds the current year IERCo earnings to 9
electric operating income and the investment in IERCo to 10
the net electric rate base. Accordingly, the interest 11
expense net of tax (line 13, page 13 of Exhibit No. 22) on 12
notes payable to Idaho Power has been added back to IERCo’s 13
Net Income from Operations. Additionally, the notes payable 14
(column 3, page 23 of Exhibit No. 22) to Idaho Power have 15
been added to IERCo’s rate base in determining the 16
Company’s net investment in IERCo to be included in total 17
system rate base. 18
Q. Please describe the adjustments to IERCo’s net 19
earnings and rate base in this proceeding. 20
A. Adjustments were made to increase IERCo’s rate 21
base for notes payable to Idaho Power in the amount of 22
$5,101,864 (column 3, line 14, page 23 of Exhibit No. 22) 23
and the associated interest expense adjustment net of 24
income tax of $77,939 (column 3, line 13, page 13 of 25
JEPPSEN, DI 21
Idaho Power Company
Exhibit No. 22) in order for IERCo’s rate base and earnings 1
to reflect only the cash required to fund IERCo operations 2
for the year 2022. If IERCo were to use these funds to make 3
a distribution of earnings to the Company, or if the 4
Company were to actually fold IERCo into its own 5
operations, the result would be the same as presented 6
herein. 7
Q. Please describe the data contained on pages 15 8
through 23 of Exhibit No. 22 9
A. Pages 15 through 23 of Exhibit No. 22 reflect 10
the development of all components applicable to the 11
combined system rate base of the Company for 2022 as 12
directed by Mr. Larkin. Page 15 reflects the balance by 13
month and the thirteen-month average of Electric Plant in 14
Service, Account 101. Page 16 reflects the balance by month 15
and the thirteen-month average of Accumulated Provision for 16
Depreciation, Account 108. Page 17 reflects the balance by 17
month and the thirteen-month average of Accumulated 18
Provision for Amortization, Account 111. Page 18 reflects 19
the balance by month and the thirteen-month average of 20
Materials and Supplies, Accounts 154 and 163. Page 19 of 21
Exhibit No. 22 reflects the balance of the Company’s Other 22
Deferred Programs. For these programs, the Company has 23
included the December 31, 2022, ending balance in rate 24
base, consistent with previous orders. Page 20 reflects the 25
JEPPSEN, DI 22
Idaho Power Company
year-end balance of Plant Held for Future Use, Account 105. 1
Page 21 reflects the balance at the end of 2022 and the 2
average balance for Accumulated Deferred Income Taxes, 3
Accounts 190, 282, and 283. Page 22 reflects the balance by 4
month and the thirteen-month average balance of Customer 5
Advances for Construction, Account 252. Page 23 reflects 6
the balance by month and thirteen-month average of the rate 7
base components for IERCo, consistent with prior Commission 8
orders. 9
Q. Please describe the adjustment on page 15 of 10
Exhibit No. 22. 11
A. The adjustment in column 4, page 15 is to 12
remove the Electric Plant in Service associated with 13
Bridger coal-related plant and Valmy plant using the 14
respective average plant balance of the thirteen-month 15
period between December 2021 and December 2022. 16
Additionally, Idaho Power removed Electric Plant in Service 17
for Boardman using the average of the thirteen-month period 18
between December 2021 and December 2022. The only remaining 19
Boardman asset in Idaho Power’s Electric Plant in Service 20
accounts as of December 31, 2022, is land. There is no 21
associated depreciation expense or accumulated depreciation 22
because land does not depreciate. 23
On February 15, 2012, the Commission authorized the 24
Company’s request to establish regulatory accounting, a 25
JEPPSEN, DI 23
Idaho Power Company
cost recovery plan, and a balancing account to track the 1
costs and benefits associated with the early shut-down of 2
Boardman.6 Boardman ceased operations on October 15, 2020, 3
and the Company is currently in the process of 4
decommissioning the plant. 5
Using the thirteen-month average of the period between 6
December 2021 and December 2022, the adjustment for Bridger 7
coal-related Electric Plant in Service results in a 8
reduction of $479,890,777 to total Electric Plant in 9
Service. Using the same period average for Valmy plant, the 10
adjustment results in a reduction of $257,496,723 to total 11
Electric Plant in Service. The Boardman adjustment results 12
in a reduction in Electric Plant in Service of $106,610 13
associated with land owned in fee. The sum of the thirteen-14
month average adjustments to Total Electric Plant in 15
Service, $737,494,110 is presented on line 14, Column 4, 16
page 15. 17
Q. Please describe the adjustment on page 16, 18
Accumulated Provision for Depreciation of Exhibit No. 22. 19
A. The adjustment in column 4, page 16 is to 20
remove the accumulated depreciation related to Bridger 21
coal-related plant and Valmy plant, using a thirteen-month 22
average of December 2021 through December 2022. The 23

6 In the Matter of Idaho Power Company’s Request for Acceptance of Its Regulatory Plan Regarding the Early Shutdown of the Boardman Power
Plant, Case No. IPC-E-11-18, Order No. 32457 (Feb. 15, 2012).
JEPPSEN, DI 24
Idaho Power Company
adjustment to accumulated depreciation attributable to 1
Bridger coal-related plant results in a reduction of 2
$281,445,851. The adjustment to accumulated depreciation 3
related to Valmy plant results in a reduction of 4
$202,576,957. The sum of the thirteen-month average 5
adjustments to Total Accumulated Depreciation, a reduction 6
of $484,022,808 is presented on row 14, column 4, page 16. 7
Q. Please describe the adjustment on page 18, 8
Materials and Supplies of Exhibit No. 22. 9
A. The adjustment in column 4, page 18 of 10
$967,717 is to remove the Boardman inventory balance, using 11
a thirteen-month average of December 2021 through December 12
2022. 13
Q. Please describe in more detail Other Deferred 14
Programs on page 19 of Exhibit No. 22. 15
A. Previous Commission-approved programs included 16
on page 19 of Exhibit No. 22 are the American Falls bond 17
refinancing costs (Commission Order No. 25880), the Idaho 18
Siemens Long-Term Program (“LTP”) (Order No. 33420), Cloud 19
Computing (Order No. 34707), and Wildfire Mitigation (Order 20
No. 35077). The American Falls bond refinancing is being 21
amortized over the life of the American Falls bond and will 22
be fully amortized in 2025. 23
Also included on Exhibit No. 22 is the CUB 2021-2025 24
Fund Grant (OPUC Order No. 20-493), the Oregon Siemens LTP 25
JEPPSEN, DI 25
Idaho Power Company
(OPUC Order No. 15-387), the Statement of Financial 1
Accounting Standards 87 capitalized pension costs (OPUC 2
Order No. 10-064), Oregon regulatory liabilities associated 3
with Reconnect Fees for Remote Meters (OPUC ADV 16-09) and 4
the Jim Bridger Plant End-of-Life Depreciation (OPUC Order 5
No. 12-296). 6
Q. Please describe in more detail Plant Held for 7
Future Use, Account 105, on page 20 of Exhibit No. 22. 8
A. Consistent with treatment approved in the 2011 9
Idaho general rate case, Case No. IPC-E-11-08, the Company 10
has included portions of Plant Held for Future Use in rate 11
base. Idaho Code § 61-502A allows the Commission to set 12
rates for utilities that include a rate of return on 13
property held for future use if the Commission makes an 14
explicit finding that such a return is in the public 15
interest. In preparing this case, the Company performed a 16
review and identified those parcels of land included in 17
Account 105, Plant Held for Future Use, that are 18
anticipated to be used in their entirety for operating 19
property in the future. As a result of this review, the 20
year-end 2022 Actuals balance of $7,129,775 (page 20, 21
column 3, line 34) has been reduced by $501,610 (page 20, 22
column 4, line 34) by those properties or facilities for 23
which the use is uncertain, may be split, or for structures 24
that will be razed prior to the start of construction to 25
JEPPSEN, DI 26
Idaho Power Company
arrive at an adjusted 2022 Base of $6,628,165 (page 20, 1
column 5, line 34). 2
Q. Please describe Exhibit No. 23. 3
A. Exhibit No. 23 reflects the detailed support 4
of deductions from the O&M expenses of the Company for 5
general advertising expenses, certain memberships and 6
contributions, certain senior management expenses, and 7
miscellaneous other expenses. This screening process is 8
consistent with previous Idaho general rate case filings. 9
Q. Please describe in more detail pages 2 through 10
9 of Exhibit No. 23. 11
A. The Company has put processes in place to 12
review and screen its accounting records to identify 13
memberships and contributions in an effort to properly 14
identify, account for, and share the costs of each. All 15
contributions, and either 33 percent or 100 percent of 16
certain memberships, have been removed. This screening 17
process is consistent with previous Idaho general rate case 18
filings. 19
Additionally, officer expenses have been reviewed and 20
adjusted by (1) removing 100 percent of all charges to the 21
Arid Club and Oregon jurisdiction direct charges, (2) 22
removing one-third of Edison Electric Institute expenses, 23
and (3) allocating the balance of expense account charges 24
of officers between Idaho Power and IDACORP on the basis of 25
JEPPSEN, DI 27
Idaho Power Company
how their payroll is charged. Six officers had no further 1
allocation based on payroll because they either incurred no 2
expenses, their management responsibilities are solely 3
incurred on behalf of Idaho Power, or their expenses are 4
reviewed monthly for proper allocation between IDACORP and 5
Idaho Power, thus not requiring further allocation. 6
Lastly, the Company has reviewed all expense account 7
charges to O&M in an effort to identify and exclude charges 8
from regulatory recovery based on prior concerns expressed 9
in other filings based on the nature of the business 10
establishment. While many of these expense account charges 11
are legitimate business expenses, out of an abundance of 12
caution, they were removed. 13
Q. Please describe Exhibit No. 24. 14
A. Exhibit No. 24 was developed to identify and 15
include or exclude specific rate base, revenue, and expense 16
adjustments which have not been provided for elsewhere. 17
These and/or similar adjustments have been made in previous 18
general rate cases. 19
Q. Please describe the adjustments you have 20
included in Exhibit No. 24. 21
A. Lines 1 through 3 reflect the Electric Plant 22
Acquisition Adjustment associated with the exchange of 23
certain transmission assets with PacifiCorp approved by 24
Commission Order No. 33313. 25
JEPPSEN, DI 28
Idaho Power Company
Line 4 reflects the unamortized portion of the 1
regulatory asset associated with the Cloud Computing Zycus 2
procurement tool authorized by Commission Order No. 34707. 3
Line 5 reflects the unamortized portion of certain 4
deferred Wildfire Mitigation expenses approved by 5
Commission Order No. 35077 for which the Company will 6
request amortization in this case. 7
Lines 6 and 7 reflect the unamortized portions of the 8
Idaho and Oregon Siemens LTPs, respectively (Commission 9
Order No. 33420 and OPUC Order No. 15-387). 10
Line 8 reflects increases due to forecasted pension 11
expense amortization that is discussed in Company Witness 12
Mr. Timothy Tatum’s testimony. 13
Lines 9, 10, 11 and 12 remove the income statement 14
impact of the Idaho and Oregon Energy Efficiency Riders 15
accounting affecting Other Electric Revenues, Account 456, 16
and Customer Assistance Expenses, Account 908, in 17
accordance with Commission Order No. 30189. While the 18
purpose of these entries is to demonstrate that the Energy 19
Efficiency Rider revenues and expenses have been excluded 20
from the revenue requirement, leaving these amounts in the 21
income statement would have had no impact to the revenue 22
requirement because they are a net zero adjustment. 23
Line 13 shows the Idaho Energy Efficiency Rider funded 24
labor to be included in O&M. 25
JEPPSEN, DI 29
Idaho Power Company
Lines 14 through 17 reflect one year of amortization 1
for the Cloud Computing, Wildfire Mitigation, Idaho Siemens 2
LTP and Oregon Siemens LTP regulatory assets described in 3
this testimony above. 4
Line 18 removes all 2022 incentives included in 5
Administrative and General Salaries, Account 920. 2023 Test 6
Year incentive expense for which the Company seeks recovery 7
is addressed in Mr. Larkin’s testimony. 8
Line 19 shows one year of amortization for the Asset 9
Exchange Acquisition Adjustment described above. 10
Lines 20 through 50 include the 2023 projected Idaho 11
intervenor funding amortization. 12
Lines 51 and 52 remove the 2022 amortization of Oregon 13
CUB intervenor funding and Oregon annual regulatory 14
expenses that are being recovered in Oregon rates. 15
Q. Are all the data and associated adjustments 16
made to your exhibits and supporting schedules calculated 17
on a total system basis? 18
A. Yes, except for the Bridger, Valmy, and WMP 19
adjustments to O&M that are presented on an Idaho-allocated 20
basis. 21
Q. Does this conclude your direct testimony in 22
this case? 23
A. Yes, it does. 24
25
JEPPSEN, DI 30
Idaho Power Company
DECLARATION OF PAULA JEPPSEN 1
I, Paula Jeppsen, declare under penalty of perjury 2
under the laws of the state of Idaho: 3
1. My name is Paula Jeppsen. I am employed by 4
Idaho Power Company as Forecasting and Planning Director. 5
2. On behalf of Idaho Power, I present this 6
pre-filed direct testimony and Exhibit Nos. 22 through 24 7
in this matter. 8
3. To the best of my knowledge, my pre-filed 9
direct testimony and exhibits are true and accurate. 10
I hereby declare that the above statement is true to 11
the best of my knowledge and belief, and that I understand 12
it is made for use as evidence before the Idaho Public 13
Utilities Commission and is subject to penalty for perjury. 14
SIGNED this 1st day of June 2023, at Boise, Idaho. 15
16 Signed: ___________________ 17 PAULA JEPPSEN 18
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