20230601Exhibits 19-21 - Buckham DI Testimony.pdf

BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-23-11
IDAHO POWER COMPANY
BUCKHAM, DI
TESTIMONY
EXHIBIT NO. 19
Greg Miller
Marsh USA Inc.
1301 Fifth Avenue
Suite 1900 Seattle, WA 98101
[phone]
[e-mail]
www.marsh.com

Jeff Pleimann
Insurance & Risk Administrator
Idaho Power
1221 West Idaho St.
Boise, ID 83702
December 21st, 2020
Subject: Wildfire / Excess Liability and Property Premiums
Dear Jeff,
This letter summarizes information regarding insurance premiums paid by Idaho Power for coverage
for liability related to wildfire currently, as well as information on what Idaho Power should expect to
pay in the future assuming maintenance of existing levels of coverage.
ALLOCATION OF CURRENT PREMIUMS TO WILDFIRES
Coverage for Idaho Power’s liability for wildfire is provided within your excess liability insurance tower,
with three separate insurers. Generally, insurers are reluctant to attribute how much of a policy is
related to a specific risk. With regard to wildfire risk, however, it is understood that a significant portion
of Idaho Power’s excess liability policies are related to wildfires. Additionally, the latest excess liability
policy was purchased expressly to cover Idaho Power’s exposure to wildfire-related risk. As a result,
the full premium in this layer is due to wildfire liability risk, since Idaho Power would not have
purchased this layer but for the desire for additional protection for wildfire-related risk.
FUTURE PREMIUM INCREASE EXPECTATIONS
The mutual insurance company that provides Idaho Power’s primary excess liability policy, has
advised all policyholders that they should expect excess liability premiums for 2021 to increase, on
average, at least 15% over 2020 levels. In addition, they have advised that utilities in wildfire prone
areas will be charged a “wildfire load” in addition to their base premium. The load varies depending
on the relative exposure. For Idaho Power, we have been informed that the load will be up to $1
million beginning in 2021, with the potential to increase annually thereafter.
The insurance company that provides Idaho Power’s second layer of excess liability coverage has not
formally advised policyholders of anticipated increases for 2021. For most renewals in 2020 from the
insurance company, the premiums are increasing between 10 and 15%. We anticipate the same
range will apply in 2021 for most utilities, including Idaho Power.
Exhibit No. 19
Case No. IPC-E-23-11
B. Buckham, IPC
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Page 2
December 21st, 2020
Jeff Pleimann
Idacorp

For the third layer of excess liability coverage, this is placed in the commercial market and is therefore
subject to general market conditions. For 2020, the commercial market for excess liability for electric
utilities has seen rate increases generally falling between 20% and 50%. We anticipate Idaho Power
will be at the higher end of this range.
For 2022 and beyond, we anticipate the liability insurance market to temper and annual rate of
premium growth should decrease in magnitude after the significant recent and near-term adjustments;
however we do not have significant clarity to future market conditions and future increases could
continue to be notable. Our expectation is subject to change based on wildfire losses in the western
U.S.
With regard to insurance premiums in general, losses from natural disasters, including wildfires
(whether natural or human-caused), and the various causes of losses across numerous forms of
coverage, are a concern to underwriters and have contributed to the general hardening of the
insurance market and associated sizeable increases in premiums.
Please let me know if you have any questions.
Sincerely,

Greg Miller
Managing Director
Exhibit No. 19
Case No. IPC-E-23-11
B. Buckham, IPC
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BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-23-11
IDAHO POWER COMPANY
BUCKHAM, DI
TESTIMONY
EXHIBIT NO. 20
Exhibit No. 20
Case No. IPC-E-23-11
B. Buckham, IPC
Page 1 of 7
Exhibit No. 20
Case No. IPC-E-23-11
B. Buckham, IPC
Page 2 of 7
Exhibit No. 20
Case No. IPC-E-23-11
B. Buckham, IPC
Page 3 of 7
Exhibit No. 20
Case No. IPC-E-23-11
B. Buckham, IPC
Page 4 of 7
Exhibit No. 20
Case No. IPC-E-23-11
B. Buckham, IPC
Page 5 of 7
Exhibit No. 20
Case No. IPC-E-23-11
B. Buckham, IPC
Page 6 of 7
Exhibit No. 20
Case No. IPC-E-23-11
B. Buckham, IPC
Page 7 of 7
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-23-11
IDAHO POWER COMPANY
BUCKHAM, DI
TESTIMONY
EXHIBIT NO. 21
IDAHO POWER COMPANY
PRO FORMA COST OF CAPITAL
SUMMARIZED
December 31, 2023 Capitalization
(1) (2) (3) (4) (5)
Capitalization Structure
No Amount Percent
1 Long-term Debt 2,601,100 49.0% 4.895% 2.399%
2 Common Equity 2,707,000 51.0% 10.400% * 5.304%
3 Total Capitalization $5,308,100 100.000% 7.702%
Note:
* Requested Rate of Return
(000's)
Embedded
Cost
Weighted
Cost
Exhibit No. 21
Case No. IPC-E-23-11
B. Buckham, IPC
Page 1 of 2
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
Line Coupon Settlement Maturity Discount/ Issuance Net Yield To Effective
No. Class and Series Rate Date Date Issued Outstanding Price (Premium) Costs Proceeds Maturity Cost
First Mortgage Bonds:
1 6.00% Series due 2032 6.00%11/15/2002 11/15/2032 100,000 100,000 98.706 1,294.0 441.2 98,264.8 6.127% 6,127.1
2 5.5% Series due 2033 5.50%5/13/2003 4/1/2033 70,000 70,000 99.198 561.4 3,810.2 65,628.4 5.949% 4,164.3
3 5.5% Series due 2034 5.50%3/26/2004 3/15/2034 50,000 50,000 98.483 758.5 149.4 49,092.1 5.626% 2,813.0
4 5.875% Series due 2034 5.875%8/16/2004 8/15/2034 55,000 55,000 97.890 1,160.5 173.3 53,666.2 6.051% 3,328.2
5 5.30% Series due 2035 5.30%8/26/2005 8/15/2035 60,000 60,000 98.569 858.6 3,399.7 55,741.7 5.802% 3,481.3
6 6.30% Series due 2037 6.30%6/22/2007 6/15/2037 140,000 140,000 99.051 1,328.6 450.0 138,221.4 6.396% 8,953.9
7 6.25% Series due 2037 6.25%10/18/2007 10/15/2037 100,000 100,000 98.982 1,018.0 477.5 98,504.5 6.362% 6,362.3
8 4.85% Series due 2040 4.85%8/30/2010 8/15/2040 100,000 100,000 99.080 920.0 534.9 98,545.1 4.943% 4,943.4
9 4.30% Series due 2042 4.30%4/13/2012 4/1/2042 75,000 75,000 99.184 612.0 1,397.8 72,990.2 4.463% 3,347.2
10 4.00% Series due 2043 4.00%4/8/2013 4/1/2043 75,000 75,000 98.991 756.8 179.2 74,064.0 4.072% 3,054.3
11 3.65% Series due 2045 3.65%3/6/2015 3/1/2045 250,000 250,000 98.564 3,590.0 19,137.5 227,272.5 4.185% 10,462.3
12 4.05% Series due 2046 4.05%3/10/2016 3/1/2046 120,000 120,000 98.992 1,209.6 14,689.4 104,101.0 4.898% 5,877.1
13 4.20% Series due 2048 4.20%3/16/2018 3/1/2048 220,000 220,000 98.880 2,464.0 5,532.0 212,004.0 4.420% 9,723.8
14 4.20% Series due 2048 4.20%4/3/2020 3/1/2048 230,000 230,000 113.013 -29,929.9 621.1 259,308.8 3.482% 8,009.4
15 1.90% Series due 2030 1.90%6/22/2020 7/15/2030 80,000 80,000 98.940 848.0 3,925.3 75,226.7 2.577% 2,061.4
16 4.99% Series due 2032 4.99%12/22/2022 12/22/2032 23,000 23,000 99.500 115.0 85.0 22,800.0 5.102% 1,173.5
17 5.06% Series due 2042 5.06%12/22/2022 12/22/2042 25,000 25,000 99.500 125.0 93.0 24,782.0 5.130% 1,282.6
18 5.06% Series due 2043 5.06%3/8/2023 3/8/2043 60,000 60,000 99.500 300.0 222.0 59,478.0 5.130% 3,078.0
19 5.20% Series due 2053 5.20%3/8/2023 3/8/2053 62,000 62,000 99.500 310.0 229.0 61,461.0 5.258% 3,259.9
20 5.50% Series due 2053 5.50%3/14/2023 3/15/2053 400,000 400,000 98.182 7,272.0 1,480.0 391,248.0 5.652% 22,609.0
21 5.60% Series due 2053 5.60%10/16/2023 10/15/2053 140,000 140,000 99.000 1,400.0 520.0 138,080.0 5.696% 7,974.2
22
23 Total First Mortgage Bonds 2,435,000 2,435,000 (3,027.9)57,547.5 2,380,480.4 5.014% 122,086.2
24
25 Pollution Control Revenue Bonds:
26 1.45%8/21/2019 12/1/2024 49,800 49,800 99.200 398.4 4,352.9 45,048.7 3.442% 1,714.1
27 Sweetwater 1.70% Series 2006, due 2026 1.70%8/21/2019 7/15/2026 116,300 116,300 99.200 930.4 8,612.9 106,756.7 3.027% 3,519.8
28
29 Total Pollution Control Revenue Bonds 166,100 166,100 1,329 12,966 151,805 3.151% 5,234
30
31
32 TOTAL DEBT CAPITAL 2,601,100 2,601,100 (1,699)70,513 2,532,286 4.895% 127,320
IDAHO POWER COMPANY
PRO FORMA COST OF LONG-TERM DEBT
As of 12/31/2023
(000's)
Principal Amount
Exhibit No. 21
Case No. IPC-E-23-11
B. Buckham, IPC
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