20231226Final_Order_No_36037.pdf

ORDER NO. 36037 1

Service Date
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On October 13, 2023, Idaho Power Company (“Company”) made a compliance filing
(“Filing”) requesting the Commission issue an order accepting its updated “load forecast, natural
gas price forecast, and contracts used as inputs to calculate its Incremental Cost Integrated
Resource Plan (“ICIRP”) avoided cost methodology.” Filing at 1. The Company must update these
inputs by October 15 of each year. See Order Nos. 32697 and 32802. ICIRP avoided cost rates are
available to QFs that are above the resource-specific project eligibility cap for published avoided
cost rates under Idaho’s implementation of the Public Utility Regulatory Policies Act of 1978
(“PURPA”).
On November 8, 2023, the Commission issued a Notice of Filing and Notice of
Modified Procedure establishing public comment and Company reply deadlines. Order No. 35990.
Staff filed the only comments.
Having reviewed the record, the Commission issues this Order approving the
Company’s annual update.
BACKGROUND
Pursuant to the PURPA and the Federal Energy Regulatory Commission’s (“FERC”)
implementing regulations, this Commission has approved the IRP Method to calculate avoided
cost rates for qualifying facilities (“QFs”) that are above the resource-specific project eligibility
cap. QFs that are below the applicable project eligibility cap are eligible to receive published
avoided cost rates calculated using the surrogate avoided resource (“SAR Method”). See Order
No. 32697 at 7-8. The avoided cost rate is the purchase price paid to QFs for the energy, or the
energy and capacity, that the QF provides to the utility. 18 C.F.R. § 292.101(b)(6)(defining
“avoided cost”). To ensure that avoided costs most accurately reflect the utility’s marginal cost of
IN THE MATTER OF IDAHO POWER COMPANY’S ANNUAL COMPLIANCE FILING TO UPDATE THE LOAD AND GAS FORECASTS IN THE INCREMENTAL COST INTEGRATED RESOURCE PLAN AVOIDED
COST MODEL
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IPC-E-23-25 ORDER NO. 36037
ORDER NO. 36037 2

energy or capacity, the Commission has directed utilities to “update fuel price forecasts and load
forecasts annually – between IRP filings,” and to update the Commission about its “long-term
contract commitments because of [their] potential effect . . . on a utility’s load and resource
balance.” Order No. 32697 at 22.
THE FILING
The Company’s most recent load forecast from September 2023 indicates lower
customer loads over the next 20 years than last year’s forecast, which was approved in Order No.
35644. According to the Company, this decrease is due to different ramp schedules and total peak
requirements in expected energy service agreements and adjustments to commercial, industrial,
and irrigation load. Using the most recent S & P Platts long-term natural gas forecast, the Company
expects five percent lower gas prices compared to the Company’s last update. More specifically,
prices were generally lower during the first half of the forecast period and higher thereafter. The
Company also represented that it currently has five non-PURPA contracts and 129 contracts with
online PURPA QFs.
The Company also updated its peak and premium peak hours for 2024 using the method
directed by the Commission in Order No. 34913. Peak hours in 2023 are as follows: July 1:00 p.m.
to 10:00 p.m.; and August 3:00 p.m. to 8:00 p.m. Premium peak hours in 2024 are as follows: July
5:00 p.m. to 10:00 p.m.; and August 5:00 p.m. to 8:00 p.m.
STAFF COMMENTS
After reviewing the Filing, Commission Staff (“Staff”) recommended approval of the
Company’s proposed load and natural gas forecasts. Staff also recommended use of the proposed
Peak Hours and Premium Peak Hours to calculate capacity payments for energy storage QFs using
ICIRP avoided cost rates. Additionally, Staff recommended use of the proposed Peak Hours to
calculate to capacity payments for energy storage QFs using Surrogate Avoided Resource (“SAR”)
based rates. Staff’s rationale for each of these recommendations is discussed more fully below.
1. Load Forecast
Despite acknowledging that the Company did not use the load forecast from its 2023
Integrated Resource Plan (“IRP”) in this case, Staff believed the Company’s proposed load
forecast is reasonable. In support of this conclusion, Staff noted that the Company provided
reasonable justifications for the decrease between this year’s load forecast and the forecast
submitted in Case No. IPC-E-22-26. Specifically, the Company indicated that not only had large
ORDER NO. 36037 3

customers Micron and Meta reduced their load forecasts, but the load forecast was also adjusted
downward to gradually transition between actual and forecasted load.
Staff also compared the Company’s proposed energy load forecast to that submitted in
the 2023 IRP. While the load forecast proposed in this case uses the 50th percentile load, the 2023
IRP uses the 70th percentile load. Although the ICIRP methodology should use inputs established
in the IRP planning process, see Order No. 32697 at 22, Staff believed using the 50th percentile
load is appropriate to determine IRP-based avoided cost rates because that load represents the
expected normal load and the cost of energy likely avoided.
2. Natural Gas Forecast
After comparing the proposed Henry Hub forecast, the Company’s natural gas forecast
from last year, and Rocky Mountain Power’s Henry Hub forecast, Staff believed the Company’s
proposed natural gas forecast is reasonable. Although this year’s Henry Hub forecast for the next
two years is lower than last year’s, Staff reasoned that the decrease stems significantly from the
reduced impact of the Russia/Ukraine War on European markets. Staff further noted that the
similarity between the Company’s proposed Henry Hub forecast and Rocky Mountain Power’s
over the next few years reinforces its reasonableness conclusion.
3. Contract Updates
Although the IRP model incorporates contract updates continuously, the annual load
and gas update is an opportunity for Commission review and supervision of contract updates. Staff
believed that the six new contracts provided since the last annual load and gas update (Lowline #2,
Bypass, Dietrich Drop, Pleasant Valley Solar, Franklin Solar, and Kuna Battery Energy Storage
System) are reasonable.
4. Peak and Premium Peak Hours
After reviewing the method used to update the Company’s Peak and Premium Peak
Hours for 2024, Staff determined that it was same method used in last year’s annual filing.
Accordingly, Staff recommended approval of the proposed Peak Hours and Premium Peak Hours
for use in calculating capacity payments for energy storage QFs under IRP-based avoided cost
rates. Staff also recommended approval of the Peak Hours for use in calculating capacity payments
for energy storage QFs under SAR-based rates.
Staff noted that, although Commission approval of the Company’s filing would change
the timeframe of Peak Hours, the total number of annual Peak Hours (which currently stands at
ORDER NO. 36037 4

434 hours) would be unaffected. Accordingly, although the hours for which QFs will receive
capacity payments for generation will change, the avoided cost of capacity for energy storage will
not.
DISCUSSION AND FINDINGS
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, -502
and -503. The Commission is empowered to investigate rates, charges, rules, regulations, practices,
and contracts of public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provision of the law, and to fix the same by order. Idaho
Code §§ 61-502 and -503. Additionally, the Commission has authority under PURPA and FERC
regulations to set avoided costs, to order electric utilities to enter fixed-term obligations for
purchase of energy from QFs, and to implement FERC rules. The Commission may enter any final
order consistent with its authority under Title 61, Idaho Code, and PURPA.
Under this authority, we have reviewed the record, including the Filing and Staff’s
comments. We find that the Filing complies with our directives in Order Nos. 32697 and 32802.
The load growth and natural gas price forecasts are reasonable as filed given the information
available at this time. The Commission further finds that all contract changes as filed are
reasonable.
Although the Company requested to adjust the timeframe of Peak Hours and Premium
Peak Hours from the currently approved hours, the total number of annual Peak Hours requested
(434 hours) did not change from last year. We note that the Company used the same method to
determine these hours as last year. We observed in previous cases that no material problems have
arisen from relying on this method. See Order No. 35644 at 5. Accordingly, we find the Company’s
proposal to adjust which hours are consider Peak Hours or Premium Peak Hours reasonable.
O R D E R
IT IS HEREBY ORDERED that the Company’s annual updates to its energy load and
natural gas price forecasts are reasonable and approved, effective as of January 1, 2024.
IT IS FURTHER ORDERED that the Commission approves the proposed Peak Hours
and Premium Peak Hours used to calculated and pay capacity payments for energy storage QFs
using the ICIRP avoided cost rates, as filed.
ORDER NO. 36037 5

IT IS FURTHER ORDERED that the Commission approves the Peak Hours and
Premium Peak Hours used to calculate and pay capacity payments for energy storage QFs using
SAR-based avoided cost rates, as filed.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order about any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 26th day
of December 2023.

ERIC ANDERSON, PRESIDENT
JOHN R. HAMMOND JR., COMMISSIONER
EDWARD LODGE, COMMISSIONER ATTEST:
Monica Berrios-Sanchez Interim Commission Secretary
I:\Legal\ELECTRIC\IPC-E-23-25_ICIRP\orders\IPCE2325_final_at.docx