Idaho, Oregon regulators OK Idaho Power, PacifiCorp transmission swap

Regulators in Oregon and Idaho have approved a proposed transaction between Idaho Power and PacifiCorp for the exchange of certain transmission assets in four Western states.

The companies, in an October 2014 joint purchase and sale agreement (JPSA), agreed to exchange transmission assets and ownership interests in jointly owned assets. In addition, the companies agreed to replace about 1,600 MW of transmission services provided for under certain legacy agreements with asset ownership and purchases of point-to-point transmission services. Furthermore, they agreed to consolidate and modernize their ownership and operational provisions of various legacy agreements into a single agreement.

The transmission facilities that are part of the transaction are located in southwestern Wyoming, southern Idaho, eastern Oregon and southeastern Washington.

The Oregon Public Utility Commission, at a June 9 public meeting, adopted a staff recommendation to approve the companies’ application for the asset exchange.

In a written order of its decision, the PUC determined that the companies’ JPSA and joint ownership and operating agreement did not contain any unusual or restrictive terms or conditions, and the transaction is fair, reasonable, and in the public interest.

According to the order, the value of each of the companies’ respective assets is about $43 million.

In a June 5 order, the Idaho Public Utilities Commission approved the proposed transaction, with conditions. The IPUC determined that the proposed transaction is consistent with the public interest, and the cost of and rates for supplying service will not be increased due to the transaction.

“We find that the increased operational flexibility resulting from the transaction will ensure more efficient management of system upgrades, facilitate service of expected load growth, and ultimately, improve reliability for customers,” the IPUC said in the order.

The IPUC determined that it was “appropriate and reasonable” to impose conditions regarding financial benefits resulting from the asset exchange.

In its order, the IPUC directed the companies to allocate the financial benefits of the exchange to customers, adding that a base level of third-party transmission revenues must first be established through a general rate case before changing the allocation method. In addition, the IPUC directed Idaho Power to establish a regulatory deferral account for transmission revenues resulting from the transaction and its resulting change in open access transmission tariff rates.

The IPUC further directed PacifiCorp to establish a regulatory account deferring reduced wheeling expenses so the IPUC can identify the proper regulatory treatment of those expenses in a future rate case. Wheeling charges are the costs associated with moving power over transmission lines.

According to the companies’ application to the IPUC, Idaho Power agreed to convey to PacifiCorp all or part of its ownership interests in the following bulk power transmission lines, in addition to certain other facilities:

·      345-kV Bridger to Goshen transmission line

·      345-kV Kinport to Midpoint transmission line

·      345-kV Borah to Adelaide to Midpoint #1 and #2 transmission lines

·      161-kV Goshen to Jefferson to Big Grassy transmission line

PacifiCorp agreed to convey to Idaho Power all or part of its ownership interest in the following bulk power transmission lines, in addition to certain other facilities:

·      500-kV Hemingway to Summer Lake transmission line

·      500-kV Midpoint to Hemingway transmission line

·      345-kV Bridger to Populus #1 and #2 transmission lines

·      345-kV Populus to Kinport transmission line

·      345-kV Populus to Borah #1 transmission line

·      345-kV Goshen to Kinport transmission line

·      230-kV Walla Walla to Hurricane transmission line

·      161-kV Antelope to Goshen transmission line

·      138-kV American Falls to Malad transmission line

·      138-kV Antelope to Scoville transmission line

In their application, the companies said that the current regulatory landscape, the companies’ load growth, and investments in system upgrades make the allocation of ownership and operational responsibility under legacy agreements for transmission assets associated with the Jim Bridger power plant in Wyoming inefficient with regard to each company’s load-service and regulatory obligations. The companies said that the transaction will reallocate their respective ownership interests and operational responsibilities as well as make their relationship more transparent and consistent with current regulatory requirements.

As TransmissionHub reported, Idaho Power and PacifiCorp last December jointly filed applications for approval of the transaction with FERC and state regulators in Idaho and Oregon. PacifiCorp last December filed applications with regulators in California, Washington and Wyoming. PacifiCorp filed a notification of the transaction with regulators in Utah, per Utah rules.

The cases before FERC and state regulators in California, Washington and Wyoming are pending.

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