HomeMy WebLinkAbout20240215Bi-Annual Report.pdf
1407 W. North Temple, Suite 330
Salt Lake City, Utah 84116
February 15, 2024
VIA ELECTRONIC DELIVERY
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
Thursday, February 15, 2024 11:07:40 AM
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 December 31, 2023, plant
balance of the Lower Klamath Project. The report covers the period of July 1, 2023, through
December 31, 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
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.
disconnected from the electrical grid and no longer benefitting customers with generation
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 is effective with respect to each facility in the Lower Klamath Project until generation
from the facility ceases.
During this reporting period, the Renewal Corporation continued dam removal activities,
with its removal contractor completing removal of the Copco No. 2 diversion dam, intake structure,
woodstave flowline, and penstocks in October 2023. The removal contractor also proceeded with
pre-drawdown construction work to develop an outlet tunnel for Copco No. 1 dam and to improve
the existing Iron Gate dam low-level outlet tunnel so that it can support reservoir drawdown flows.
Other work to construct new bridges to support construction equipment was also undertaken.
Although generation from the Copco No. 2 development ceased on May 22, 2023, generation from
the remaining three developments continued throughout the remainder of 2023 with cessation of
generation planned for January 2024.
III. CAPITAL EXPENDITURES
The Lower Klamath Project’s net book value, electric plant in-service less accumulated
depreciation reserve balances as of December 31, 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
3 FERC Docket No. AC23-26-000 dated May 5, 2023.
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
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 – December 31, 2023
Description Total Idaho
Electric Plant In-Service $ - $ -
Accumulated Depreciation $ - $ -
Net Book Value $ - $ -
Annual Depreciation Expense $ - $ -
Regulatory Asset $ 4,730,495 $ 267,630
Amortization Expense January to
December 2023 $ 1,218,154 $ 68,918
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 throughout 2023. These amounts netted to
$117,017, include final costs and other adjustments such as return of materials and were recorded
in the regulatory asset where the associated investments are now reflected. (See Table 2 for project
detail).
Table 2. Lower Klamath Project Residual Capital Additions Reflected in Regulatory Assets
from January to December 2023
Project Project Description
Amount ($)
Settled to
Regulatory Asset
HKCA/2016/C/007 Iron Gate Hatchery Replace Recirc System $ (824)
HKCA/2021/C/002 Copco 1 Station Service Breakers Replace $ (27,782)
HKCA/2021/C/011 IGH Supplemental Water Supply Pump $ 3,815
HKCA/2021/C/019 Copco 2 Roadway Bridge Refurbishmen $ 4,934
HKCA/2021/C/022 Copco 1 Tailrace Level Senso $ 19,099
HKCA/2022/C/008 Copco 1 Common PLC Cabinet Components $ 1,256
HKCA/2022/C/018 Iron Gate Hatchery Housing Upgrades $ (4,086)
HKCA/2022/C/019 Iron Gate Hatchery Facility Upgrades $ (26,225)
HKOR/2020/C/008 Copco 2 Refurbish Wood Stave flowline $ 465
HKOR/2020/C/010 JC Boyle Replace Controls $ 57
HKOR/2021/C/006 JC Boyle Traveling Screen Rebuild $ 755
HKOR/2021/C/009 JC Boyle Road Refurbishment $ (6,070)
HKOR/2022/C/002 JC Boyle Augmentation Valve Replacement $ 3,449
HKOR/2022/C/003 JC Boyle Canal Road Stabilization $ 3,965
HKOR/2022/C/005 JC Boyle Flume Remediation $ 146,021
HPOR/2020/C/001 Elec / Instrument / Comm 2020 $ 950
HPOR/2020/C/002 Facilities 2020 $ (2,133)
HPOR/2021/C/002/016 Facilities 2021 $ (628)
Total $ 117,017
Any informal inquiries related to this report may be directed to Mark Alder, Idaho
Regulatory Manager at mark.alder@pacifiCorp.com or by phone at (801) 220-2313.
Very truly yours,
Joelle Steward
Senior Vice President, Regulation and Customer & Community Solutions