FERC threatened to revoke Idaho Power’s market-based rate authority in its home balancing authority area, citing the utility’s failure of a key market power test. 

The company, which provides electricity in a 24,000-square-mile territory in southern Idaho and eastern Oregon, submitted an updated market power analysis in October 2023, noting that it had increased its generation capacity in the Idaho Power BAA by 100 MW (ER10-2126-008). 

Although the company passed the pivotal supplier indicative screen for its BAA, it failed the wholesale market share indicative screen in three seasons, FERC said. 

The commission said the failures establish “a rebuttable presumption of horizontal market power” and required it to open a proceeding under Section 206 of the Federal Power Act to determine whether the utility’s market-based rate authority in its home region remains just and reasonable. 

FERC’s Feb. 27 order to show cause (EL24-62) does not threaten Idaho Power’s ability to charge market-based rates outside its home territory. The company said it passed the pivotal supplier and wholesale market share indicative screens in the Avista Corp., Bonneville Power Administration, Nevada Power Co., NorthWestern Corp., PacifiCorp-East and PacifiCorp-West balancing authority areas, as well as CAISO’s Western Energy Imbalance Market. 

Idaho Power told FERC it increased its generation by 100 MW:  

• • In June 2023, it began taking delivery of the entire output of the 40-MW Black Mesa Solar facility under a long-term firm power purchase agreement that runs until 2043; 
  • in June 2023, it downgraded the capacity rating at its Langley Gulch Power Plant by 20 MW; and 
  • in July 2023, it energized its standalone 80-MW Hemingway battery energy storage system. 

FERC gave the utility 60 days to respond to its order by either challenging the commission’s threat to revoke its MBRA, proposing mitigation to eliminate its market power or accepting cost-based rates. 

The commission said it already is examining a delivered price test analysis Idaho Power submitted to prove it lacked market power. It said the company can submit additional evidence that it lacks market power, such as historical sales and transmission data. 

The company can continue charging market-based rates in the BAA — but will be liable for potential refunds — while the commission evaluates the delivered price test.