20230815Bi-Annual Report.pdf

1407 W. North Temple, Suite 330
Salt Lake City, Utah 84116

August 15, 2023

VIA ELECTRONIC DELIVERY

Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
1131 W. Chinden Blvd
Building 8 Suite 201A
Boise, ID 83714

Re: CASE NO. PAC-E-21-01
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
FOR APPROVAL OF THE TRANSFER OF THE LOWER KLAMATH
HYDROELECTRIC PROJECT GENERATING FACILITIES

I. BACKGROUND
On January 14, 2021, PacifiCorp, (the “Company”), filed an application with the Idaho
Public Utilities Commission, (“Commission”), requesting an order approving the Property
Transfer Agreement, (“Transfer Agreement”), between the Company and the Klamath River
Renewal Corporation, (“Renewal Corporation”), with a determination that the property disposition
is in the public interest. The Transfer Agreement provided for the transfer of four hydroelectric
dams; J.C. Boyle, Copco No. 1, Copco No. 2, and Iron Gate, (collectively the “Lower Klamath
Project”), as well as approximately 8,000 acres of real and personal property associated with the
dams from PacifiCorp to the Renewal Corporation.
On July 8, 2021, the Commission issued Order No. 35097; approving the Transfer
Agreement, authorizing the Company to create a regulatory asset for any remaining plant balances
after the transfer, and requiring PacifiCorp to file bi-annual reports with the Commission on the
RECEIVED
Tuesday, August 15, 2023 3:33:54 PM
IDAHO PUBLIC
UTILITIES COMMISSION
status of the license transfer with the Federal Energy Regulatory Commission, (“FERC”), and any
additional capital investments on the Lower Klamath Project.
Pursuant to Order No. 35097 PacifiCorp hereby submits its semi-annual status report on
the license transfer, along with additional capital investments, and the June 30, 2023, plant balance
of the Lower Klamath Project. The report covers the period of January 1, 2023, through June 30,
2023.
II. BI-ANNUAL REPORT
As previously reported, on June 17, 2021, FERC issued an order1 approving PacifiCorp’s
application to transfer the license for the Lower Klamath Project, FERC Project No. 14803, to the
Renewal Corporation, the State of Oregon, and the State of California (the “Co-Licensees”).
Transfer of the license was to be effective upon transfer of the title of the properties under the
Lower Klamath Project to the Co-Licensees and the acceptance by the Co-Licensees of a FERC
license surrender order for the project.
FERC approved the license surrender application at its regular meeting on November 17,
2022, and issued the license surrender order2 on the same date. Following FERC’s action, the
Co-Licensees formally accepted the FERC surrender order and executed the necessary steps with
PacifiCorp to complete transfer of the project license and real property, which was effective on
December 1, 2022.
PacifiCorp is obligated under the terms of the Klamath Hydroelectric Settlement
Agreement to continue to operate and maintain the Lower Klamath Project in compliance with the
existing FERC license and other regulatory requirements until the Lower Klamath Project is
disconnected from the electrical grid and no longer benefitting customers with generation

1 PacifiCorp, Order Approving Transfer of License, 175 FERC ¶ 61,236 (2021), Issued June 17, 2021, Project Nos.
2082-062, 14803-000, 14803-004, FERC Accession #: 20210617-3060.
2 PacifiCorp, Order Modifying and Approving Surrender of License and Removal of Project Facilities, 181 FERC ¶
61,122 (2022), Issued November 17, 2022, Project Nos. 2082-063, 14803-001, FERC Accession #: 20221117-3021.
produced from the facilities. This operation and maintenance obligation is formalized in an
amended and restated Operational and Maintenance Agreement between PacifiCorp and the
Co-licensees that went into effect on December 1, 2022, concurrent with the transfer of the license.
This contract will remain in place with respect to each facility until generation from the facility in
Lower Klamath Project ceases.
During this reporting period, the Renewal Corporation began dam removal activities, with
its removal contractor mobilizing to the project site in March 2023 to begin improving access roads
and bridges, to establishing office areas, temporary worker accommodations, and laydown areas.
PacifiCorp ceased hydroelectric generation at the Copco No. 2 development on May 22, 2023, and
transferred operational control of the Copco No. 2 diversion dam to the Renewal Corporation on
June 1, 2023. Removal of the Copco No. 2 diversion dam was substantially complete by the end
of June 2023. At this time, PacifiCorp anticipates that generation from the remaining Lower
Klamath Project facilities will cease at the end of 2023.
III. CAPITAL EXPENDITURES
The Lower Klamath Project’s net book value, electric plant in-service less accumulated
depreciation reserve balances as of June 30, 2023, along with the annual depreciation expense and
regulatory asset balance are summarized in Table 1. While amortization of the legacy regulatory
asset was completed, a new regulatory asset balance was established in 2023 as a result of the
FERC’s reply to the Company’s proposed accounting entries associated with the disposition of the
Lower Klamath Project assets.3 Originally, the Company retained the net book value of the Lower
Klamath Project assets in the plant accounts due to its continuing to operate and benefit from the
output of the facilities with the intent to transfer the net book value to a regulatory asset upon
cessation of operations. However, the FERC did not accept this accounting and directed the

3 FERC Docket No. AC23-26-000 dated May 5, 2023.
Company to transfer the net book value directly to a regulatory asset. As a result, the Company
transferred the net book value to a regulatory asset in 2023 upon receiving the FERC’s reply.
Table 1. Lower Klamath Project Net Book Value – June 30, 2023
Description Total Idaho
Electric Plant In-Service $ - $ -
Accumulated Depreciation $ - $ -
Net Book Value $ - $ -
Annual Depreciation Expense $ - $ -
Regulatory Asset $ 5,177,820 $ 292,938
Amortization Expense January to June 2023 $ 629,350 $ 35,606

While the Company is generally no longer incurring capital expenditures to support the
continued operation of the Lower Klamath Project, residual amounts associated with those
investments placed into service in 2022 were incurred between January 1, 2023, through June 30,
2023. These amounts netted to $(24,463), include final costs and other adjustments such as return
of materials and were recorded in the regulatory asset where the associated investments are now
reflected. (See Table 2 for project detail).
Table 2. Lower Klamath Project Residual Capital Additions Reflected in Regulatory Assets
from January to June 2023
Project Project Description
Amount ($)
Settled to
Regulatory Asset
HKCA/2016/C/007 Iron Gate Hatchery Replace Recirc System $ (824)
HKCA/2021/C/011 IGH Supplemental Water Supply Pump $ 3,815
HKCA/2022/C/018 Iron Gate Hatchery Housing Upgrades $ (4,086)
HKCA/2022/C/019 Iron Gate Hatchery Facility Upgrades $ (26,225)
HPOR/2020/C/001 Elec / Instrument / Comm 2020 $ 950
HPOR/2020/C/002 Facilities 2020 $ (2,133)
HKCA/2021/C/002 Copco 1 Station Service Breakers Replace $ (19,735)
HKCA/2021/C/022 Copco 1 Tailrace Level Sensor $ 19,099
HKCA/2022/C/008
Copco 1 Common PLC Cabinet
Components

$ 1,256
HKCA/2021/C/019 Copco 2 Roadway Bridge Refurbishment $ 4,934
HKOR/2020/C/008 Copco 2 Refurbish Wood Stave flowline $ 465
HPOR/2021/C/002/016 Facilities 2021 $ (628)
HKOR/2021/C/006 JC Boyle Traveling Screen Rebuild $ 755
HKOR/2021/C/009 JC Boyle Road Refurbishment $ (6,070)
HKOR/2022/C/003 JC Boyle Canal Road Stabilization $ 3,965
Total $ (24,463)

Any informal inquiries related to this report may be directed to Mark Alder, Idaho
Regulatory Manager at [e-mail] or by phone at [phone].

Very truly yours,

Joelle R. Steward
Senior Vice President, Regulation and Customer & Community Solutions