Idaho Power and PacifiCorp expect to close a proposed transaction at the end of this year for the exchange of certain transmission assets in four Western states, an Idaho Power spokesperson told TransmissionHub on April 17.
The companies, in an October 2014 joint purchase and sale agreement, agreed to exchange transmission assets and ownership interests in jointly owned assets, and an undetermined amount of cash that will balance the value of those 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.
Last December, Idaho Power and PacifiCorp jointly filed applications for approval of the transaction with FERC and state regulators in Idaho and Oregon, the spokesperson said. She also said that PacifiCorp, last December, filed applications solo in California, Washington and Wyoming. PacifiCorp filed a notification of the transaction with state regulators in Utah, per Utah rules.
The transmission facilities that are part of the transaction are located in southwestern Wyoming, southern Idaho, eastern Oregon, and southeastern Washington.
The Idaho Public Utilities Commission (IPUC) is accepting comments on the application through April 22, according to a Feb. 18 IPUC order. The IPUC, in that order, said that reply comments from Idaho Power and PacifiCorp are due on May 11.
In their application to state regulators, 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 would reallocate their respective ownership interests and operational responsibilities as well as make their relationship more transparent and consistent with current regulatory requirements.
According to their application, Idaho Power, in addition to certain other facilities, agreed to convey to PacifiCorp all or part of its ownership interests in the following bulk power transmission lines:
· 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, in addition to certain other facilities, agreed to convey to Idaho Power all or part of its ownership interest in the following bulk power transmission lines:
· 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 Feb. 10 comments to FERC, the Northwest and Intermountain Power Producers Coalition (NIPPC) claimed that the transaction would cause cross-subsidization between retail customers and transmission customers. NIPPC said that the cross-subsidization would result from the transition to open access transmission tariff rates that will lead to higher transmission revenues, which serve as a revenue credit to the companies’ retail customers.
The companies, in Feb. 18 reply comments, said that the transaction qualifies for FERC cross subsidization safe harbors and will not have an adverse impact on transmission rates.
“Any time a transmission provider purchases or sells transmission facilities, its transmission rates will necessarily need to be adjusted to reflect the addition or removal of the affected transmission facilities,” the companies said. “In [this case], transmission rates will be adjusted pursuant to each [of the companies’] transmission formula rates and FERC policy.”
Idaho Power is a unit of IDACORP and PacifiCorp is a unit of Berkshire Hathaway.