20240206Reply Comments.pdf

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

February 6, 2024

VIA ELECTRONIC DELIVERY Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd Building 8 Suite 201A Boise, ID 83714
RE: CASE NO. PAC-E-23-22 IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER FOR AUTHORITY TO REVISE ELECTRIC SERVICE REGULATION NO. 3 – ELECTRIC SERVICE AGREEMENTS Attention: Commission Secretary
Pursuant to Commission Order No. 36003 providing Notice of Modified Procedure and establishing the procedural schedule please find Rocky Mountain Power’s Reply Comments in the above referenced matter.
Informal inquiries may be directed to Mark Alder, Idaho Regulatory Manager at [phone]. Very truly yours, Joelle Steward Senior Vice President, Regulation and Customer & Community Solutions
RECEIVED
Tuesday, February 6, 2024 1:17PM
IDAHO PUBLIC
UTILITIES COMMISSION

Reply Comments of Rocky Mountain Power Page 1
Joe Dallas (ISB# 10330)
PacifiCorp, Senior Attorney
825 NE Multnomah Street, Suite 2000
Portland, OR 97232
Email: [e-mail]

Attorney for Rocky Mountain Power

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER FOR
AUTHORITY TO REVISE ELECTRIC
SERVICE REGULATION NO. 3 –
ELECTRIC SERVICE AGREEMENTS
) CASE NO. PAC-E-23-22
)
) REPLY COMMENTS OF
) ROCKY MOUNTAIN POWER

Pursuant to Rule 202.01(d) of the Rules of Procedure of the Idaho Public Utilities
Commission (“Commission”) and the Commission’s November 22, 2023, Notice of Application
and of Modified Procedure, Rocky Mountain Power a division of PacifiCorp (“Rocky Mountain
Power” or the “Company”) hereby submits reply comments in the above-referenced case.
I. BACKGROUND
1. On October 24, 2023, the Company filed an application (“Application”) requesting
authority to update Rocky Mountain Power Electric Service Regulation No. 3—Electric Service
Agreements (“Rule 3”). The proposed amendment would: (1) limit damages arising out of the
Company’s provision of electric services to actual damages; (2) exclude a-typical damages
(including special, noneconomic, punitive, incidental, indirect, or consequential); (3) only apply
prospectively, and for actions arising out of the provision of electric service; and (4) would not
apply where state law otherwise disallows the limitation.

Reply Comments of Rocky Mountain Power Page 2
2. On November 22, 2023, the Commission issued Order No. 36003 establishing a
modified procedure with written comments due January 23, 2024, and Company reply comments
due February 6, 2024.
3. On January 22, 2024 and January 23, 2024 Commission Staff (“Staff”), P4
Production, L.L.C, an affiliate of Bayer Corporation (“Bayer”), and Sierra Club (collectively
“Intervenors”) filed comments in response to the Company’s Tariff Advice filing recommending
the Commission deny the Company’s proposed changes to Rule 3. The comments submitted
largely contend that the Commission does not possess the legal authority to approve the proposed
tariff that seeks to impose a cap on liability and argue PacifiCorp’s proposal is not aligned with the
public interest. The sections below respond to the comments submitted by the Intervenors:
II. REPLY COMMENTS
A. The Commission has the authority to limit utility liability to economic damages
arising from the provisions of electric service.

4. Contrary to the legal representation made by some of the Intervenors, the
Commission possesses the authority to approve limitations of liability arising out of provisions of
electric service.1 In fact, the Commission has regularly exercised that authority to approve electric
utility tariffs that include liability limitations. These liability limitations apply to general electric
service and to various specialized retail customer offerings from Idaho utilities. For example:
 Rocky Mountain Power: “Company does not guarantee constant or uninterrupted
delivery of Electric Service and shall have no liability to its Customers or any other
persons for any interruption … in Electric Service or for any loss or damage caused

1 The comments submitted by both Staff and Bayer take the general position that limitations of liability for an
electric utility is inconsistent with Idaho law. Staff Comments at 6-7 (January 23, 2023); Bayer Comments at 2-5
(January 22, 2023). On the other hand, Sierra Club acknowledges that public service commissions have historically
imposed limitations on utility liability but provides other arguments against the Company’s proposal. Sierra Club
Comments at 3 (“To be sure, public utility commissions, including this Commission, have, at times, limited a
utility’s exposure to liability.”).

Reply Comments of Rocky Mountain Power Page 3
thereby if such interruption … results from the following [lists various circumstances
in which no liability attaches]”.2

 Idaho Power Company: “Customer voluntarily agrees to release the Company … from
all liability, loss, claims or actions for injury, death, expenses (including, but not limited
to, reasonable attorney’s fees and court costs) or damage to person or property resulting
from the Company’s installation, maintenance and removing of the lighting fixture
located on a Customer-owned support.”3

 Avista: “Electric service is inherently subject to interruption, suspension, curtailment,
and fluctuation. The Company will endeavor at all times to provide a regular and
uninterrupted supply of service, but in case the supply of service shall be interrupted or
irregular or defective or fail from causes beyond its control, the Company will not be
liable therefor.”4

5. The Commission’s tariff approvals are consistent with its rulings on liability
limitations. Contrary to the claim of Bayer,5 the Commission held that Idaho Code § 61-702 “does
not expressly or impliedly prohibit the use of limitations of liability,” 6 and that “Idaho and regional
case law is clear that exemptions from liability are disfavored but limitations of liability should be
considered with regard to the facts and circumstances of each case.”7 The Commission went on to
conclude that Idaho Power’s “language regarding limitations of liability just and reasonable.”8 The
Commission also noted that “[c]ourts are virtually unanimous that provisions limiting a public
utility’s liability are valid so long as they do not purport to grant immunity for gross negligence.”9
6. The Commission’s rulings and tariff approvals are consistent with the treatment of
utility liability limitations by the Idaho courts. Idaho courts have adopted a “general rule” that

2 Rocky Mountain Power, Electric Service Regulation No. 4, I.P.U.C. No. 1, Sheet No. 4R.3 (effective Dec. 13,
2019). Idaho Power Company includes a similar liability limitation for service interruption at. See, Idaho Power
Company, I.P.U.C. No. 30, Tariff No. 101, Sheet No. J-1 (effective Jan. 1, 2024).
3 Idaho Power Company, I.P.U.C. No. 30, Tariff No. 101, Sheet 15-1 (effective Jan. 1, 2024) (Tariff for dawn to
dusk customer lighting).
4 Avista Corporation, I.P.U.C. No. 28, Sheet No. 70-I (effective June 15, 2025).
5 Bayer Comments at 4 (January 22, 2023) (“The proposed liability limitation violates Idaho Code § 61-702.”).
6 See In the Matter of Application of Idaho Power Co. for Approval of a Special Contract with J.R. Simplot Co.,
Case No. IPC-E-13-23; Order No. 33071 at 7-8 (July 7, 2014).
7 Id., at 8.
8 Id.
9 Id., at 4, quoting, Garrison v. Pacific Northwest Bell, 45 Or. App. 523, 531, 608 P.2d 1206, 1214 (1980).

Reply Comments of Rocky Mountain Power Page 4
agreements exempting a party from liability for negligence are enforceable.10 However, an
exception to this rule arises when a “public duty is involved.”11 The courts further recognize that
utilities are “obvious examples of parties owing a public duty.” 12 The Commission has interpreted
this “general rule” to conclude that completely exempting a public utility from liability for
negligent conduct is contrary to public policy.13 Nevertheless, the Commission may approve
“provisions in the tariffs of regulated utilities limiting their liability.”14 The Commission has
determined “that this authority should be exercised in a limited manner,” consistent with a review
of each proposed tariff.15 16
7. It is clear that the Commission possesses the discretion to approve proposed tariffs
that include limitations on liability, provided that such limitations do not: (1) entirely exempt the
utility from negligent conduct; (2) limit liability for intentional or gross negligence; and (3) that
the proposed tariff is in the public interest and necessary for continued service.17
8. In line with these parameters, the Commission has considered proposed tariff
language from a telecommunications utility aimed at limiting the utility’s liability for

10 Jesse v. Lindsley, 149 Idaho 70, 75 (2008) (“The general rule sustaining agreements exempting a party from
liability for negligence is subject to two exceptions: (1) one party is at an obvious disadvantage in bargaining power;
or (2) a public duty is involved (public utility companies, common carriers).”) (internal quotations omitted).
11 Lee v. Sun Valley Co., 107 Idaho 976, 978 (1984).
12 Id.
13 See In the Matter of Application of Idaho Power Co. for Approval of a Special Contract with J.R. Simplot Co.,
Case No. IPC-E-13-23; Order No. 33038 at 11 (May 19, 2014) (“Idaho Power cannot abrogate its general duty to
exercise reasonable care in operating its system to avoid unreasonable risks of harm to its customers.”).
14 In the Matter of Advice Letter No. 89-05 of Contel of the W. Inc., Case No. CON-T-89-2, Order No. 22812, (1989)
at 1 (Oct. 1, 1989) (emphasis added).
15 Id. at 5–6 (“This limitation of authority, however, must follow our conscious exercise of discretion in a formal
case proceeding or rulemaking in which we have had an opportunity to review the factual underpinnings for the
claim that liability should be limited.”)
16 Id. (“First, the primary incentive that public utilities receive for the provision of utility service is their return on
invested capital. Ordinarily, no further special incentives in the way of limitations of liability are appropriate.
Second, however, there may be unusual factual circumstances that would justify this Commission exercising its
authority to limit a utility's liability for the provision of a given service in order to encourage a service that we find
to be in the public interest and that may not be otherwise provided”); see also id. at 1 (stating that liability
limitations should be approved only when “there is a substantial likelihood that the service would not be provided in
the absence of limitations of liability”).
17 See Supra footnotes 16 & Error! Bookmark not defined..

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“consequential, incidental, or indirect damages for any cause of action, whether in contract or
tort.”18 However, the utility failed to provide justification that the proposed limitation was in the
public interest and necessary for service.19 As a result, the Commission rejected the proposed tariff
language on this evidentiary basis without examining its substantive merits. Significantly, the
Commission’s dismissal of the tariff language was without prejudice, indicating that utilities could
request approval for such limitations in their tariffs if they can demonstrate that the liability
limitation is both in the public interest and necessary.20
9. Staff and Bayer’s comments reveal an overly narrow interpretation of past
precedents, which if endorsed by the Commission, would inappropriately limit its authority, cast
doubt on the currently approved tariffs of regulated utilities that limit liability, and stand in direct
opposition to several preceding decisions by the Commission. Generally speaking, these comments
confuse the courts’ prohibition on completely exempting a utility from negligence, with the
Commission’s discretionary authority to approve reasonable limitations on liability that are
necessary to continued electric service operation and serve the public interest. For example, Bayer
asserts that the Idaho Supreme Court in Rawlings v. Layne & Bowler Pump Co. established that “a
public utility is prohibited from limiting its liability . . . .”21 However, a closer examination of the

18 In the Matter of Tariff Advice Amendments Submitted by Idaho Rural Exchange Carriers, Albion Tel. and Rural
Tel. Co. Regarding the Carriers’ Y2K Liability and Gen. Liability Limitations, Case No. GNR-T99-23, Order No.
28247 at 3 (Dec. 30, 1999).
19 Id. at *6 (“Without addressing the merits of the proposed tariff provisions to limit liability, we find that the tariff
advices do not address” the standard adopted in Order No. 28247.).
20 Id. at 7 (“Although the Commission has declined to approve the three tariff advices, we do so without prejudice. If
the Companies believe that such liability limitations are necessary, reasonable and satisfy the conditions mentioned
above, the parties may submit appropriate Applications to the Commission.”); see also In re Investigation upon the
Comm’n’s Own Motion of the Qual. of Serv. of Utah Power & Light Co. and Upon the Use of Exculpatory
Provisions in its Tariffs in Civil Action, Case No. UPL-E-89-9, Order No. 23287 (Sept. 1, 1990) (ordering an electric
utility to revise its tariffs to remove liability limitations after the utility conceded that it could not satisfy the standard
identified in Order No. 28247).
21 Bayer Comments at 3 (January 22, 2024) (emphasis added).

Reply Comments of Rocky Mountain Power Page 6
case reveals that the Court actually stated: “we hold that express agreements exempting one of the
parties from negligence are to be sustained except where . . . a public duty is involved . . . .”22
10. The Company broadly concurs with the Intervenors that it cannot absolve itself
from liability for any conduct that may be deemed negligent by a jury, nor can it impose limitations
on liability for intentional or grossly negligent conduct—and the Company is not attempting to do
so in this proceeding.23 Under the Company’s proposal, Rocky Mountain Power would remain
accountable for actual economic damages stemming from actions arising out of provisions of
electric services, while proposing a reasonable limitation on additional a-typical damages, that is
necessary for continued low-cost and dependable service in Idaho.24 Indeed, this proposed
limitation is much narrower than similar provisions approved by the Commission, including Idaho
Power’s Rule J(1) that provides the circumstances where that utility would have “no liability to its
Customers or any other persons for interruption, suspensions, curtailments, or fluctuation in
service.”25
11. Based on the foregoing, the Company submits that the Commission has the
authority to limit utility liability to economic damages arising from the provision of electric
service. Section B of these comments will discuss how such limitation is consistent with tariffs
approved by other jurisdictions. Thereafter, Section C of these comments will address why the

22 Rawlings v. Layne & Bowler Pump Co., 93 Idaho 496, 500, 465 P.2d 107, 111 (1970) (emphasis added).
23 While the proposed tariff language does not expressly exclude instances of willful or grossly negligent conduct, it
does contain a clause that states, “This provision shall not be binding where state law disallows limitations of
liability.” Hence, the proposed language inherently excludes application to situations where state law prohibits
limiting liability, which includes cases of willful or gross negligence.
24 Bayer submitted comments that the Company’s proposed tariff language lacks clarity around the term “actual
economic damages.” Bayer Comments at 8 (January 22, 2024). The Company disagrees and reiterates that actual
economic damages exclude special, noneconomic, punitive, incidental, indirect, or consequential damages.
Furthermore for the purposes of the comments, the term “a-typical” damages is a reference to special, noneconomic,
punitive, incidental, indirect, or consequential damages.
25 See https://docs.idahopower.com/pdfs/aboutus/ratesregulatory/tariffs/34.pdf

Reply Comments of Rocky Mountain Power Page 7
proposed tariff language in the Application is necessary for continued low-cost service in Idaho,
in the public interest, and should be approved by the Commission.
B. The Application is consistent with other state utility commission precedent.

12. Contrary to the comments submitted by Staff and Bayer, limitation on liabilities for
electric utilities are prevalent in other jurisdictions. As Sierra Club accurately put it in its
comments, “[t]o be sure, public utility commissions, including this Commission, have, at times,
limited a utility’s exposure to liability.”26 In fact, over a century of experience supports utility
limitations on liability.27 Courts have historically interpreted these limitations in accordance with
the Filed Rate Doctrine, which provides that filed tariffs govern a utility’s relationship with its
customers and have the full force and effect of law until suspended or set aside.28 The public policy
justifications supporting tariffed liability limitations are well summarized in a Texas Supreme
Court decision:
[A] tariff’s limitations on liability for economic damages is reasonable because a
utility: (1) must provide nondiscriminatory service to all customers within its area;
(2) must maintain uniform rates and reduce costs; (3) cannot accurately estimate its
exposure to damages or efficiently insure against risks; (4) cannot increase rates for
all customers based on losses one specific class of customers incurs; and (5) must
comply with PUC regulations.29
13. Thus, liability limitations serve as a quid quo pro for economic regulation: “in
return for serving the public interest through a fixed rate of return and reliability standards,” courts

26 Sierra Club Comments, at 3.
27 See, e.g., Western Union Tel. Co. v. Esteve Bros. & Co., 256 U.S. 566, 571 (1921) (when included in a telegraph
company’s tariff, “[t]he limitation of liability was an inherent part of the rate. The company could no more depart
from it than it could depart form the amount charged for the service rendered.”).
28 See, e.g., Keogh v. Chicago & N.R. Co., 260 U.S. 156, 163 (1922) (“The rights as defined by the tariff cannot be
varied or enlarged by either contract or tort of the carrier.”).
29 Southwestern Elec. Power Co. v. Grant, 73 S.W.2d 211, 217 (2002).

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and state commissions have found that tariffed liability limitations serve the public interest by
keeping “the cost of service low.”30
14. To that end, state courts have generally held that “rules promulgated by public
utilities which absolve them from liability for simple negligence in the delivery of their services
will be upheld.”31 In decisions both issued in 1999, the Kansas and Texas Supreme Courts
identified multiple state precedents consistent with this view of liability limitations, including
Arizona, California, Delaware, the District of Columbia, Florida, Georgia, Illinois, Kansas,
Louisiana, Massachusetts, Minnesota, Missouri, Montana, Nevada, New York, Oregon,
Pennsylvania, South Carolina, Texas, and Washington.32
15. Due to the catastrophic damages caused by increasingly severe and more frequent
natural disasters in recent years, these tariff provisions have taken on more importance. As
wildfires in the West and hurricanes in the Gulf and East Coast regions have increased in number
and severity, states have found liability limitations a key tool in preserving utility financial stability.
Like the development of utility wildfire mitigation plans, and approval of securitization financing
of infrastructure hardening for utilities at high risk of natural disasters, use of liability limitations
have been upheld by courts and expanded by some legislatures.
16. For example, Florida has been impacted by frequent hurricanes over the past two
decades that have resulted in billions of dollars in damage caused in part by utility outages. These

30 John L. Rudy, Limitation of Liability Clauses in Public Utility Tariffs: Is the Rationale for State-Sponsored
Indemnity Still Valid?, 52 Buff. L. Rev. 1379. 1394 (2004) (discussing the New York Public Service Commission
decision In Re Liab. Clauses in Rate Schedules of Gas and Elec. Corps., 26 P.U.R. (N.S.) 373 (1938)).
31 Danisco Ingredients v. Kansas City Power & Light Co., 267 Kan. 760, 769 (1999); Id. at 771 (“A public utility’s
liability exposure has a direct effect on its rates, and this court, as well as the majority of jurisdictions addressing the
question … has concluded that it is reasonable to allow some limitation of liability such as that for ordinary
negligence in connection with the delivery of the services.”).
32 Id. at 769-70; Houston Lighting & Power Co. v. Auchan United States, 995 S.W.2d 668, 672 (Tex. 1999). The
Company’s Advice Letter in Docket No. UE 428 cites additional consistent precedent from state courts in
PacifiCorp service territory. See Pacific Power Advice No. 23-018 – Rule 4 – Application for Electrical Service,
Docket No. UE 428, at 2 (Oct. 24, 2023).

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hurricanes “prompted a comprehensive re-evaluation of utility rules and practices in Florida,
including both the engineering and economic aspects of hurricane preparation and response.”33
These efforts included revising cost recovery standards (in both rate cases as well as through
authorized surcharges), convening of multi-stakeholder workshops to revise storm-hardening rules
and procedures, requiring Florida utilities to file forward-looking storm protection and system
hardening plans, and authorizing the issuance of storm recovery bonds to finance the massive
reconstruction costs caused by successive major storms.34
17. In addition to these efforts, in 2023, the Florida Legislature passed a new statutory
cap on utility liability, which provides that utilities are “not liable for damages based in whole or
in part on changes in the reliability, continuity, or quality of utility services which arise in any way
out of an emergency or disaster, including, but not limited to, a state of emergency . . .”.35 This
statute also vests the Florida Public Service Commission, rather than the state courts, with
exclusive jurisdiction over resolving damages issues going forward, which allows the agency to
rely on its expertise and discretion to strike a reasonable balance on appropriate tariff conditions.36
Similarly, New York City was impacted by Superstorm Sandy and Tropical Storm Isaias in the past
dozen years, resulting in billions of dollars in damages caused in part by utility outages. The
primary utility impacted by the storm, Consolidated Edison Company (“ConEd”), had limitations
of liability that excluded all damages arising from ConEd’s actions, even if based on utility

33 Id. at 19.
34 See, e.g., Id. at 19-21 (discussing § 366.96 Fla. Statutes (2023) (utility storm protection plans and cost recovery), §
366.97 Florida Statutes (2023) (redundant poles and pole attachment rules), § 366.8260 Fla. Statutes (2023) (Storm
recovery financing)).
35 2023 Fla. Laws Ch. 304 § 10(1) (codified at Fl. Code Ann.§ 366.98(1)).
36 Id. (“Consistent with the commission’s jurisdiction over public utility rates and service, issues relating to the
sufficiency of a public utility’s disaster preparedness and response shall be resolved by the commission.”).

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negligence, which were consistently enforced for several decades.37 Only actions against utilities
for gross negligence are recoverable in that state.38
18. After a New York court dismissed several lawsuits for failure to prove ConEd was
grossly negligent (and finding that simple negligence claims were barred by tariff),39 the New York
legislature and utility commission adopted additional caps on utility liability, and also established
additional protections for customers. For example, ConEd liability is now limited to $15 million
for each instance where electricity supply is interrupted by the utility’s negligence or other events
beyond the utility’s control (and individual customer recovery “will be adjusted downward on a
pro rata basis to the extent required to hold payments to a total of $15,000,000.”), while also
requiring ConEd to specifically reimburse customers for certain damages (a credit for loss of
electricity generally, and specific amounts for loss of foods, perishable medicine, etc.).40
Additionally, the New York commission embarked on material grid hardening proceedings and
addressed cost recovery for infrastructure storm damage in specific utility rate proceedings.41
19. Texas has also experienced winter storms causing tremendous electric outages and
economic impacts in the last decade. In 2021, Winter Storm Uri caused millions of outages, several
hundred deaths, and direct and indirect losses to the Texas economy of $80 to $130 billion.42 After

37 See, e.g., Lee v. ConEd, 413 N.Y.S.2d 826 (1978) (“Once accepted by the Commission, the tariff schedule
(including the limitation of liability provision) takes on the force and effect of law and governs every aspect of the
utility’s rates and practices; neither party can depart from the measure of compensation or standard of liability
contained therein.”).
38 Food Pageant v. ConEd, 54 N.Y.2d 167 (1981).
39 Borah, Goldstein, Altschuler, Nahins & Goidel, P.C. v. Trumbull Ins. Co. & ConEd., 2016 N.Y.Misc. LEXIS
5093 (Sup Ct, NY County 2016).
40 Con.Ed. PSC Electricity Tariff Rule 21.1 Continuity of Supply; “PSC Approves New Rules for Customer Credits
and Reimbursements,” (Jul. 14, 2022) (available here: https://dps.ny.gov/system/files/documents/2022/10/psc-
approves-new-rules-for-customer-credits-and-reimbursements.pdf).
41 Lawrence Berkeley National Laboratory, “Case Studies of the Economic Impacts of Power Interruptions and
Damage to Electricity System Infrastructure from Extreme Events,” at 35—39 (November 25, 2020) (available here:
https://eta-publications.lbl.gov/sites/default/files/impacts_case_studies_final_30nov2020.pdf).
42 See, e.g., FERC-NERC-Regional Entity Staff Report, The February 2021 Cold Weather Outages in Texas and the
South Central United States, at 11-12 (Nov. 2023) (available here: https://www.ferc.gov/media/february-2021-cold-
weather-outages-texas-and-south-central-united-states-ferc-nerc-and).

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Uri, the Texas Legislature passed laws and the Texas utility commission implemented regulations
aimed at preventing a recurrence of the winter storm outages.43 The new laws addressed issues
such as generator winterization requirements, changes in market design, and securitization to
finance payment of energy costs incurred during Uri. These authorities complement the state’s
judicial opinions that uphold utility limitations of liability in a variety of circumstances,44 and
reflect the Texas Supreme Court’s decision that “one need only consider a power outage in the
commercial district of a major Texas city to realize the potential liability of an electric utility. . . .
Absent a limitation of liability, the risk of staggering loss could be borne by ordinary utility
customers.”45
20. Focusing on the West specifically, two sister-state utility commissions have upheld
similar tariff provisions that limit damages to economic damages (or no liability whatsoever). For
example, Washington courts have concluded that “Virtually all jurisdictions have enforced such
limitations and disclaimers of liability, whether contained in a filed tariff or a private contract,
unless the company’s negligence is willful or gross.”46 “Limitation of liability provisions are an
inherent part of the ratemaking process.”47 And where Washington statutes vest the responsibility
to approve liability limitations with that state commission, once a tariff becomes effective,
limitations are “part of the law” and are “binding upon the customer whether he actually knows of

43 For a high-level description of the 2021 legislative and PUC actions, see Texas Comptroller of Public Accounts,
Fiscal Notes: Winter Storm Uri 2021, at 11-13 (Oct. 2021), available at:
https://comptroller.texas.gov/economy/fiscal-notes/2021/oct/winter-storm-impact.php.
44 See, e.g., CenterPoint Energy Res. Corp. v. Ramirez, 640 S.W.3d 205 (Tex. 2022); Southwestern Elec. Power Co.
v. Grant, 73 S.W.3d 211, 217 (Tex. 2002).
45 Houston Lighting & Power Co. v. Auchan United States, 995 S.W.2d 668, at 674 (Tex. 1999).
46 Allen v. Gen. Tel. Co., 20 Wn. App. 144, 148 (1978) (applying a telephone utility tariff where the company “shall
not be liable to the Advertiser for damages resulting from failure to include any time of advertising specified in [the
agreement] . . .”).
47 National Union Ins. Co. of Pittsburgh, Pa, v. Puget Sound Power, 972 P.2d 481 (1999) (citing Lee v.
Consolidated Edison Co., 98 Misc.2d 304, 413 N.Y.S.2d 826, 828 (N.Y.Sup.App.1978)).

Reply Comments of Rocky Mountain Power Page 12
the limitation or not.”48 This is because without the commission exercising its authority to review
and approve reasonable customer and utility protections, a utility “would have to raise its rates
commensurate to its increased liability risk.”49 Washington has applied limitations of liability to
limit damages to economic damages, or no damages at all,50 and Oregon Courts have adopted this
same reasoning.51
21. Similarly, the California Supreme Court recently upheld state commission
determinations on liability limitations in a decision that preempted a customer’s ability to recover
civil damages against utilities resulting from public safety power shutoff events. The Court was
asked whether a statute that holds utilities liable for “all loss, damages, or injury” caused by utility
acts or omissions would nonetheless be preempted by another statute that “bars actions that would
interfere with the California Public Utilities Commission [CPUC] in the performance of its official
duties.”52 The Court concluded that yes—even though the plaintiffs were “seeking billions of
dollars in alleged damages resulting directly from power shutoffs”—the suit should be preempted
as a matter of law because it would “hinder or frustrate the PUC’s carefully designed
implementation calculus” regarding utility wildfire mitigation plans and tariff provisions regarding

48 Allen, 20 Wn. App. at 151 (string-citing Cole v. Pacific Tel. & Tel. Co., 112 Cal.App.2d 416, 246 P.2d 686
(1952), aff’d Hall v. Pacific Tel. & Tel., 20 Cal.App.3d 953, 98 Cal.Rptr. 128 (1971); Wheeler Stuckey, Inc. v.
Southwestern Bell Tel. Co., 279 F.Supp. 712 (W.D.Okl.1967); Warner v. Southwestern Bell Tel. Co., 428 S.W.2d
596 (Mo.1968)).
49 Id.
50 Citoli v. City of Seattle, 61 P.3d 1165 (2002).
51 Boardmaster Corp., 198 P.3d at 461 (“The Washington Court of Appeals’ reasoning in Citoli is compelling, and
we adopt it here. As in Citoli, the applicable tariff in this case, Rule 14, limits Pacific Power's liability for
suspending electrical service if such suspension is solely attributed to causes beyond Pacific Power’s reasonable
control, including ‘governmental authority.’ In discontinuing service to BoardMaster’s property, Pacific Power
acted—as plaintiffs’ complaint alleges—pursuant to Jackson County’s June 13, 2003, directive. That order from
Jackson County constituted ‘governmental authority’ and, as such, was beyond Pacific Power’s ‘reasonable
control.’”).
52 Gantner v. PG&E Corporation, 538 P.3d 676, 677 (Cal. 2023).

Reply Comments of Rocky Mountain Power Page 13
public safety power shutoff events.53 “To hold otherwise,” the Court noted, “would be to invite
interference with a ‘broad and continuing supervisory or regulatory program’ of the PUC.”54
22. The Company represents that these examples, which similarly disclaim a-typical
damages (or any liability at all), provide adequate persuasive authority from other jurisdictions to
support the Company’s proposal.
C. The Commission should approve the proposed tariff language as necessary for
continued low-cost electric service in Idaho and in the public interest.

23. Contrary to the comments presented in opposition, the proposed tariff is crafted
with the intent to reasonably reinforce the financial stability of the Company, thereby ensuring
continued low-cost electric service in Idaho. To appreciate the necessity of the proposed language,
the Commission must consider the challenging environment that electric utilities currently face
regarding uncapped liability and the consequential financial impact on their customers. For
instance, utilities in the Western U.S., such as Pacific Gas and Electric (“PG&E”), Xcel Energy,
and PacifiCorp, have been subjected to significant financial pressures stemming from lawsuits that
associated with catastrophic wildfires.
24. PG&E’s legal battles have been particularly acute, with the 2018 Camp Fire serving
as a stark example. The fire, one of the deadliest and most destructive in California's history, was
found to be caused by PG&E’s electrical transmission lines. The aftermath saw the utility engulfed
in a myriad of lawsuits culminating in a settlement of approximately $13.5 billion and a Chapter
11 bankruptcy declaration to manage the liabilities and facilitate the compensation to the

53 Id. at 683 (cleaned up).
54 Id. (citing Hartwell Corp. v. Superior Court, 27 Cal.4th 256, 266 (2002)); Id. at 678 (citing San Diego Gas &
Electric Co. v. Superior Court, 13 Cal.4th 893, 918 (1996) (same).

Reply Comments of Rocky Mountain Power Page 14
plaintiffs.55 Xcel Energy, while seemingly having a lesser degree of potential liability compared to
PG&E, has also faced lawsuits related to wildfires.56
25. PacifiCorp has also been subject to significant financial pressures due to recent jury
verdicts related to devastating wildfires in Oregon. For example, an Oregon jury ruled that the
Company must compensate 17 plaintiffs with a payment exceeding $90 million. Of this amount,
the actual economic losses were approximately $4.5 million, contrasted by a staggering $85.5
million assigned to a-typical damages.57 This means that the a-typical damages were almost
nineteen times the economic losses. In a separate case, a different Oregon state jury recently
ordered the Company to pay $62 million to nine plaintiffs, with economic losses at approximately
$6.3 million, and a-typical damages surging to $56 million—nearly nine times the economic
losses.58
26. Following the initial $90 million judgment, S&P Global Ratings (“S&P”)
responded by lowering the Company's credit rating from ‘A’ to ‘BBB+’ with a “negative
outlook.”59 This downgrade was influenced, in part, by the substantial $85.5 million awarded in a-
typical damages. S&P Global explicitly cited these damages as a factor in their decision to
downgrade the Company’s creditworthiness. Additionally, in November 2023, Moody’s Investors

55See e.g., Richard Gonzales, PG&E Announces 13.5 Billion Settlement of Claims Linked to California Wildfires,
National Public Radio, (December 7, 2019), available at: https://www.npr.org/2019/12/07/785775074/pg-e-
announces-13-5-billion-settlement-of-claims-linked-to-california-wildfires
56 See e.g., Judith Kohler, No Criminal Charges for Xcel Energy in Marshall Fire, But Civil Liability Another
Matter, Denver Post (June 8, 2023), available at: https://www.denverpost.com/2023/06/08/xcel-energy-marshall-
fire-investigation
57 Sloan Millman & Gabe Grosberg, PacifiCorp Downgraded to BBB+, Outlook Revised to Negative; Berkshire
Hathaway Energy Co. Outlook Also Negative, S&P Global Ratings (June 20, 2023), available at:
https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3009376
58 Clark Mindock, Berkshire’s PacifiCorp Ordered to Pay At Least $62 Million to Homeowners for 2020 Oregon
Wildfire Damage, Reuters (January 23, 2024), available at: https://www.reuters.com/world/us/berkshires-pacificorp-
ordered-pay-least-62-million-homeowners-2020-oregon-2024-01-23/
59 Supra footnote 57 The recent $62 million lawsuit also further underscore the ongoing credit risks that the Company
faces in the future.

Reply Comments of Rocky Mountain Power Page 15
Service (“Moody’s”) downgraded PacifiCorp’s senior unsecured issuer rating to Baa1 from A3.60
In December 2023, Moody’s noted that wildfire risk was a significant risk for the Company and
has a substantial impact on its credit quality.61 These downgrades have real world impacts on the
Company’s ability to raise capital for investment: many institutional investors have are not
permitted to purchase non-investment grade (i.e., rated below Baa3/BBB-) securities, or in some
cases even securities rated below a single A rating. As detailed in the Application, the Company
will encounter increased borrowing costs due to this credit rating downgrade, which will constrain
its financial flexibility and affect its capacity to invest economically in crucial infrastructure
enhancements, renewable energy projects, and other endeavors necessary to fulfill its legal and
regulatory commitments.62
27. In the context of this proceeding, the reservations expressed by S&P demand close
attention. Their issuance of a “negative outlook” is based on the potential for further credit rating
downgrades if the Company is subjected to more adverse legal judgments in the future. S&P’s
warning clearly demonstrates the significant impact that substantial, uncapped legal awards can
have on the Company’s fiscal stability. Notably, as explained above, PacifiCorp has recently been
subject to another multi-million jury verdict, an event that could further affect its creditworthiness.
Both S&P Global’s assessment of PacifiCorp as a company and their broad sector analysis63,
underscore the critical importance of maintaining a robust credit rating. A strong credit rating is
imperative for the Company’s ongoing financial viability and is integral to its ability to continue
providing services at reasonable rates for its customers in Idaho.

60 Moody’s Rating Action: Moody’s downgrades PacifiCorp to Baa1, outlook stable, p. 1.
61 Moody’s Investors Services, Credit Opinion, PacifiCorp, Update following a downgrade to Baa1, December 4,
2023, p.1.
62 Application at 5 (October 24, 2023).
63 A Storm Is Brewing: Extreme Weather Events Pressure North American Utilities' Credit Quality, S&P Global
Ratings (November 9, 2023), available at: A Storm Is Brewing: Extreme Weather Events Pressure North American
Utilities' Credit Quality | S&P Global Ratings (spglobal.com).

Reply Comments of Rocky Mountain Power Page 16
28. In the face of these considerable financial and operational challenges, the Company
has embarked on a detailed response designed to bolster its infrastructure and heighten the safety
measures it already had in place. These actions are critically important for reducing the risk of
wildfires. Contrary to the claims made by the Sierra Club and Bayer, PacifiCorp has been
proactive, carrying out in-depth assessments and enhancements of its wildfire prevention tactics,
with special attention to vegetation management and the modernization of infrastructure.64 The
Company has refocused its capital plan in the next three years on wildfire mitigation expenses to
reduce the risk of wildfire events, and on investment in the ongoing safety and reliability of the
service. Furthermore, while historically PacifiCorp has paid dividends to its parent company,
Berkshire Hathaway Energy (“BHE”), to manage the common equity component of the capital
structure, in sustained periods of capital investment, PacifiCorp is able to retain earnings to help
finance investments and forego dividend payments to BHE. BHE has pledged that it will not
require a dividend from PacifiCorp over the next five years, which will allow PacifiCorp to retain
earnings to help finance wildfire settlements and capital investments.
29. Despite these strategic and preventive initiatives, PacifiCorp is still vulnerable to
financial strains linked to the provision of affordable electricity in Idaho. This vulnerability is due,
in large part, to the lack of limitations on liability for a-typical damages. While Staff and Bayer
argue that there is no need for such limitations, citing that Idaho law caps noneconomic damage
awards at $250,000,65 it is important to clarify that this cap is solely applicable to personal injury
claims and does not apply to other types of legal actions that could be filed against the Company.

64 Sierria Club Comments at 5 (“For instance, if RMP knows that its potential liability for wildfire is severely
limited, will the utility maintain or increase its vigilance in monitoring wildfire conditions and altering operations as
necessary?”); Bayer Comments at 9 (“Exempting the Company from liability for it own negligence would incentive
the Company to take great risks . . . .”).
65 Staff’s Comments at 3 (January 23, 2023); Bayer Comments at 8.

Reply Comments of Rocky Mountain Power Page 17
The complexity of today’s electrical grid can result in disruptions that could give rise to various
causes of action not attributable to simple human error or negligence. This complexity presents
jurors with the challenging task of navigating intricate technical details and specialized knowledge
in order to justly assign fault and evaluate damages.
30. By establishing a limitation on liability to strictly economic damages, in the context
of the Company’s provision of electric services, the Company is protected against a material threat
to its financial stability that may arise from disproportionate legal awards for a-typical damages.66
This safeguard ensures that while plaintiffs are entitled to recover their tangible, measurable losses
as determined by a jury, the Company is concurrently shielded from the uncertainty of speculative
damages. This reasonable limitation is likely to favorably influence the Company’s credit rating
by making it more attractive to lenders and investors. It is important to note that S&P’s “negative
outlook” was attributed almost exclusively to the ongoing risk posed by future unlimited liabilities,
and that S&P indicated that a limitation on liability could lead to a revision of its outlook to
“stable.”67
31. Commission approval of the proposed tariff language can potentially stabilize or
even enhance the Company’s credit outlook, which is critical for maintaining investor confidence
and securing the capital necessary for ongoing operations and future developments in Idaho. It
would result in more favorable interest rates for borrowed capital, empowering the Company to
more economically invest in essential infrastructure upgrades and safety enhancements without

66 Staff provides comments that Idaho law caps noneconomic damage awards at $250,000. However, it is crucial to
recognize that this limitation is applicable exclusively to personal injury claims and does not extend to other types of
claims that may be brought against the Company. Staff’s Comments at 3 (January 23, 2023).
67 Sloan Millman & Gabe Grosberg, PacifiCorp Downgraded to BBB+, Outlook Revised to Negative; Berkshire
Hathaway Energy Co. Outlook Also Negative, S&P Global Ratings (June 20, 2023), available at:
https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3009376 (“We could affirm our
ratings on PacifiCorp and revise the outlook to stable if its wildfire liabilities remain limited….”).

Reply Comments of Rocky Mountain Power Page 18
having to significantly raise customer rates to offset higher borrowing expenses. Indeed, this
approach would allow the Company to redirect additional funds towards sustained wildfire
mitigation efforts—funds that might otherwise be required to cover substantial a-typical damage
judgments. Customers ultimately reap the rewards of these investments through better safety
measures and the assurances of stable rates, which are at risk of being compromised if the
Company remains exposed to unbounded liability. This approach not only secures the Company’s
financial integrity but also protects consumers from unforeseen rate fluctuations, thus supporting
the ongoing delivery affordable and reliable utility services in Idaho well into the future.
32.PacifiCorp expects to spend approximately $ in capital expenditures
from through with significant investments in wildfire mitigation efforts as well as new
energy projects, related transmission, increased reliability, improved power delivery, and safe
operations. These investments are needed to meet customer needs for cost-effective and reliable
service. However, PacifiCorp has adjusted its capital investment plan reducing the planned
expenditures in through by nearly $ when compared to
. This capital spending will require PacifiCorp to raise
funds by issuing new long-term debt in the debt capital markets. In the interim, the Company has
maintained access to capital, however the costs of that capital have increased, reflecting the risk
associated with the ongoing liability and operational risk. PacifiCorp spent a significant amount of
time talking with its investors in the December 2023 and early January 2024 timeframe leading up
to its January 2024 long-term debt offering to provide them a detailed update on our plans to
mitigate any further liability risk. Although PacifiCorp was able to access the debt capital markets,
some traditional investors in PacifiCorp debt decided not to participate.
REDACTED

Reply Comments of Rocky Mountain Power Page 19
33. Implementing reasonable limitations on liability is essential for all businesses,
particularly for electric companies and their customers, who depend on this indispensable and
affordable service in their everyday life. The Texas Supreme Court has provided a perspective that
aligns with this view, emphasizing the importance of such limitations for the ongoing financial
viability of utilities and for keeping electricity rates affordable for consumers. The Court has
cautioned: “Absent a limitation of liability, the risk of staggering loss could be borne by ordinary
utility customers.”68 This statement highlights the critical role that liability caps play in protecting
customers from the potential for dramatic increases in electricity rates due to the financial impact
of large, uncapped liabilities on utility companies.
34. Accordingly, the Commission should approve the proposed tariff language as
necessary and in the public interest because it provides a necessary safeguard for the financial
stability of the Company and ensures the continued provision of affordable and reliable electricity
to consumers in Idaho. By limiting a-typical damages arising from the provision of electric service,
the Company is protected from future disproportionate legal awards that can lead to insolvency
and the necessity to raise customer rates to cover associated costs. A more predictable liability
landscape not only would improve the Company’s credit rating, leading to lower borrowing costs
and enabling continued investment in infrastructure and reliability measures, but also attracts
investment for the future electric service in Idaho. This, in turn, fosters a more robust and reliable
grid for consumers. Approval of the proposed tariff language is a reasonable step towards
balancing the interests of individual plaintiffs seeking reasonable compensation and the broader
public’s interest in secure, reasonably priced and reliable utility services.

68 Houston Lighting & Power Co. v. Auchan United States, 995 S.W.2d 668, at 674 (Tex. 1999).

Reply Comments of Rocky Mountain Power Page 20
III. CONFIDENTIAL INFORMATION
35. This filing, specifically the capital investment details, contains confidential
information including trade secret and other Company confidential information exempt from
public review under Idaho Code §§ 74-104–109 and Idaho Public Utilities Commission’s Rule of
Procedure 67.
IV. REQUEST FOR RELIEF
36. The Company respectfully requests the Commission approve the Company’s
proposed Rule 3 changes.

DATED this 6th day of February 2024.

Respectfully submitted,

ROCKY MOUNTAIN POWER

__________________________

Joe Dallas (ISB# 10330)
PacifiCorp, Senior Attorney
825 NE Multnomah Street, Suite 2000
Portland, OR 97232
Email: [e-mail]

Attorney for Rocky Mountain Power