20240905INT to Staff 1_3_6-9.pdf

INTERMOUNTAIN GAS COMPANY’S RESPONSES TO STAFF’S FIRST PRODUCTION REQUEST PAGE 1 OF 2
18531880.1)
Preston N. Carter, ISB No. 8462
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY’S APPLICATION TO
REVISE RATE SCHEDULE EEC-RS-
RESIDENTIAL ENERGY EFFICIENCY
CHARGE AND EEC-GS COMMERCIAL
ENERGY EFFICIENCY CHARGE
Case No. INT-G-24-03
INTERMOUNTAIN GAS COMPANY’S
RESPONSES TO FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF
Intermountain Gas Company (“Intermountain” or “Company”), in response to the First
Production Request of the Commission Staff to Intermountain Gas Company dated August 22,
2024, submits the following responses. Responsive documents are available for download using
the link provided in the accompanying email. Confidential responses and documents are subject
to the protective agreement in this case, and are available for download using a password-
protected link that will be provided separately by email. The password will be provided in a third
email.
DATED: September 5, 2024.
By:_____________________________
Preston N. Carter
Givens Pursley LLP
Attorneys for Intermountain Gas Company.
RECEIVED
THURSDAY, SEPTEMBER 5, 2024
IDAHO PUBLIC
UTILITIES COMMISSION

INTERMOUNTAIN GAS COMPANY’S RESPONSES TO STAFF’S FIRST PRODUCTION REQUEST PAGE 2 OF 2
18531880.1)

CERTIFICATE OF SERVICE

I HEREBY CERTIFY THAT on September 5, 2024, I caused a true and correct copy of
the foregoing to be served upon the following parties as indicated below:

Monica Barrios-Sanchez
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, Idaho 83720-0074
[e-mail]

Email
U.S. Mail
Fax
Hand Delivery

Preston N. Carter

INTERMOUNTAIN GAS COMPANY
CASE INT-G-24-03
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Kathy Wold/ Lori Blattner
REQUEST NO. 1:
Please provide all previous forecasts used to determine the EEC-RS and EEC-GS rates
since inception. Please describe the factors that the Company adjusted when updating the
forecasts.
RESPONSE NO. 1:
The forecasts used have been provided in previous cases. Please see the included files
labeled with the case numbers in parentheses:
INT-G-24-03 PR 1_EE Program Forecast 2017 (INT-G-17-03)
INT-G-24-03 PR 1_EE Program Forecast 2019 (INT-G-19-05)
INT-G-24-03 PR 1_INT_G_19_05 ECC
o This file was used to inform the INT-G-19-05 filing but was not filed as part of
the case.
CONFIDENTIAL - INT-G-24-03 PR 1_EE Program Forecast 2022-2024 (INT-G-22-05)
The first update to the forecast took place in 2019 when the Company filed to increase
the EEC-RS due to the amount of uptake that the Residential Program experienced exceeding the
Company’s initial numbers. The forecast was “based on actual expenses through the end of June
2019 and adjusted for continued Program growth”, it also included “the plan to further expand
the Residential Program based on a recently completed Conservation Potential Assessment.”
The Company had also seen a significant increase in the number of builders that were
applying for the ENERGY STAR Whole Home rebate that was offered, including a builder that
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intended to have 100% ENERGY STAR Whole Home certification of their homes. Those two
factors caused the Company to significantly increase the forecast related to the ENERGY STAR
Whole Home rebate to accommodate the expected growth at the time.
At the time of the filing, the EEC-RS balance was also under-collected in the amount of
$1,097,907 and this deficit was included as part of the calculation to update the rate.
The second update to the forecast took place in 2022 as the rider balance had resulted in
an over-collected amount of $4,893,882. This over-collected amount was identified as having
two primary causes: “1) therm sales were higher than the forecast used to calculate the current
EEC-RS, and 2) the entire, then-current, under-collected balance of $1,097,907 was included in
the determination of the EEC-RS rate rather than amortizing the balance over time.” It was also
identified that the Program changes that took place in April 2021 impacted the previous forecast
due to the changed rebates and amounts. Additional factors the Company took into consideration
with the forecast at that time were: expected expenses for ongoing Evaluation, Measurement &
Verification (EM&V) and Conservation Potential Assessment (CPA) expenses, revised rebate
offerings and changes in participation levels being impacted by higher energy performance
requirements, and potential federal standard changes.
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INTERMOUNTAIN GAS COMPANY
CASE INT-G-24-03
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Kathy Wold/ Lori Blattner
REQUEST NO. 3:
Please explain if the Company included any forecasted expenses for programs or
measures that are not currently approved by the Commission.
RESPONSE NO. 3:
Yes, the Company included forecasted expenses for the Residential Program that are not
currently approved by the Commission.
For the Residential Program, based on preliminary EM&V results (final results were not
available at the time of this filing), the Company forecasted reductions in the total amount of
rebate dollars paid out in 2025 and 2026 due to anticipated potential Program changes:
reduced incentive for smart thermostats and therefore reduced participation
reduced incentive or retirement of storage water heater rebate
increased incentive for the combination boiler rebate
reduced incentive for boiler rebate
reduced incentive or potential retirement of 95% AFUE furnace rebate
retiring Tier II tankless water heater rebate
Based on the EM&V results presented to the Energy Efficiency Stakeholder Committee (EESC)
on August 27th, the Company will determine actual Residential Program updates in coordination
with the EESC.
The forecasted expenses for the Commercial Program that are not currently approved by
the Commission include measures for the light commercial sector and a custom commercial
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offering. The light commercial sector offering would address customers that are on the
commercial rate but do not use the high-capacity equipment that is currently offered. The
planned addition of commercial incentives to address light commercial sector would include the
following measures: furnace, combination boiler and smart thermostats. The Commercial
Program currently offers incentives for space heating and commercial kitchen equipment. The
Company will also explore adding energy saving measures for commercial water heating.
The Company also forecast expenses for a commercial custom program. The custom
program is explained in further detail in the Company’s Response to Production Request No. 9.
The Company has discussed with the EESC adding both a light commercial offering and a
custom commercial offering in previous EESC meetings. The Company is working to finalize all
Program changes and intends to file the proposed additions later this year.
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INTERMOUNTAIN GAS COMPANY
CASE INT-G-24-03
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Kathy Wold/ Lori Blattner
REQUEST NO. 6:
In its Application, the Company describes the effects that 2021 program changes have
had on participation and expenditures. Application at 4. Please describe what changes, trends,
and information from the 2022 and 2023 program years the Company used to inform its forecast
for the 2024-2026 program years.
RESPONSE NO. 6:
The forecast was performed shortly after the second quarter of 2024 was closed, taking a
point in time forecast, before EM&V results were received from the study currently in process.
The Company used the following information from the 2022 and 2023 program years to
inform the forecast for the 2024 2026 program years.
For 2024 the Company used actual rebate counts and incentive expenses from January
2024 through July 2024 to forecast the remainder of 2024 as well as 2025 and 2026.
Codes and Standards – The Company reviewed proposed changes to building code and
federal equipment standards to ensure Program requirements are above-code and no
change in equipment standards would render equipment incentives obsolete.
Equipment Availability - Supply chain shortages affected the availability of 97% AFUE
furnaces, limiting homes that would have qualified for the Tier I offering. Trends in 2024
indicate that this shortage is beginning to resolve.
The rebate counts for 2024 are forecasted to increase anywhere from 18-40 percent over
2023 counts, depending on the measure. Top performing measures like the furnace are
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forecast to increase 18%; while the tankless water heater, which has demonstrated a faster
adoption rate, is projected to increase 40 percent over 2023. These increases in
participation were applied to 2025 and 2026 projections, with the exception of the Whole
Home Tier I incentive which, while showing an increase over 2023, is still small in terms
of the number of rebates offered.
Historical participation:
o Whole Home Tier I – As mentioned above, the supply shortage of 97% AFUE
furnaces appears to have eased to some degree. Even so, the Company still sees
applications that meet all criteria except for that of the 97% AFUE furnace.
o Whole Home Tier II - The Company received fewer qualifying applications for
this offering in 2022 and 2023 than the previously offered Energy Star Whole
Home rebate in 2020 and 2021 (that offering’s highest redeemed years.)
o Boilers – Performance for this rebate has been historically low. The Company is
seeing similar performance to 2023 as of the end of second quarter 2024. Because
of this, no significant uptake of the offering was forecast.
o Combi Boilers – Performance for this rebate has been historically low, with
performance at the end of second quarter 2024 matching second quarter 2023’s
performance. Because of this, no significant uptake of the offering was forecast.
o Storage Water Heater – Performance for this rebate has been historically low.
2024 has underperformed as of the end of second quarter, when compared to the
number of redeemed rebates at the end of second quarter 2022 and 2023, half as
many rebates have been issued. This steep decline in performance led to the lower
forecasted numbers for this offering.
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o Tankless Water Heater Tier II - Performance for this rebate has underperformed
as of the end of second quarter 2024, when compared to the number of rebates at
the end of second quarter 2022 and 2023, with about a third as many rebates
issued compared to 2022 and half as many issued compared to 2023. This decline
in performance led to lower forecasted numbers for this offering.
o Tankless Water Heater Tier I – Performance for this rebate has continued to grow
over 2022 and 2023. At the end of second quarter 2024, this rebate has nearly
matched the total performance for Program Year 2022 and exceeded the
performance of Program Year 2023 through second quarter.
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INTERMOUNTAIN GAS COMPANY
CASE INT-G-24-03
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Kathy Wold/ Lori Blattner
REQUEST NO. 7:
Please explain the “Potential program changes” adjustment present in the 2025 and 2026
forecast years and how the Company estimated these values.
RESPONSE NO. 7:
Please see the Company’s Response to Production Request No. 3 and No. 9 for a
discussion of “Potential program changes”.
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INTERMOUNTAIN GAS COMPANY
CASE INT-G-24-03
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Kathy Wold/ Lori Blattner
REQUEST NO. 8:
In its Application, the Company states that additional commercial measures included in
the forecast are expected to have a dramatic impact on future expenses. Application at 5. Please
provide a list of these additional measures, their estimated cost, their estimated launch date,
participation ramp up, and the source for each of these metrics.
RESPONSE NO. 8:
There are three categories of commercial incentive opportunities that are expected to
have an impact on future expenses, light commercial, commercial water heating and custom
commercial.
The light commercial sector consists of smaller commercial businesses that are on the
commercial rate but do not use the high-capacity equipment included in the current offering.
Customer inquiries and feedback from the Energy Services Representatives indicate there is
interest in energy saving opportunities for these customers and measures for light commercial
were identified in the 2023 conservation potential assessment (CPA). Potential measures would
include furnace, combination boiler, and smart thermostats.
The current commercial offering includes incentives for space heating and commercial
kitchen equipment. The Company will explore adding water heating savings opportunities also
identified in the CPA. The Company will use EM&V and the development of a commercial
TRM to inform program design.
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The third category that is expected to have an impact on commercial expenses is a
custom commercial program. Plans and efforts to date to develop a custom program are outlined
in the Company’s Response to Production Request No. 9.
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INTERMOUNTAIN GAS COMPANY
CASE INT-G-24-03
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Kathy Wold/ Lori Blattner
REQUEST NO. 9:
In its Application, the Company states that commercial custom projects included in the
forecast are expected to have a dramatic impact on future expenses. Application at 5. Please
provide a description of the efforts the Company has made in pursuit of custom projects, the
results of those efforts to date, a timeline detailing next steps, and a count of customers engaged
in active discussion with the Company on future custom projects.
RESPONSE NO. 9:
The following list describes the efforts the Company has made in pursuit of custom
commercial projects:
Thorough participation with organizations like American Institute of Architects Idaho
and American Society of Heating Refrigerating and Air-Conditioning Engineers the
Company has had conversations with vendors who complete custom projects for Idaho
Power. These vendors communicated that they see opportunities for gas savings that
could be done at the same time as electric projects, if Intermountain had a custom
program. Currently, they do not pursue or promote these gas saving opportunities since
there are only incentives for electric projects.
The Company has had conversations with a 3rd party provider who could work with
commercial customers directly on gas projects or they could work with the contractor of
the customer’s choosing to verify savings of custom projects. They have recommended
outreach strategies to jumpstart the custom program which include energy reviews or
audits and building operator training. They recommend starting with a limited number of
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projects with detailed project reporting to gain the confidence and support of the EESC in
this new Program offering.
The Company has developed a survey for commercial customers with multiple goals: to
raise awareness about the Commercial Energy Efficiency Program, to connect with the
building operators and facility mangers (rather than the administrative contacts), learn
about the gas equipment at the facility and ask about any upcoming projects in order to
promote high-efficient options during the time of projects. The Company is also offering
a $10 incentive for completed surveys. The Company has started mailing postcards to a
limited number of commercial customers. In September, the commercial survey
opportunity will be promoted in an email to all the commercial customers who are
subscribed to energy efficiency emails, approximately 8,000 commercial customers.
Depending on the response to these efforts, the Company plans to also include the
commercial survey opportunity as a bill insert to all commercial customers. The
Company has opted for a tiered outreach approach in order to best manage the potential
response, as well as include a pathway to a broader approach in the event of a slow or
low response rate.
Next steps will include:
Design the incentive structure for custom projects.
Reviewing the custom option with the EESC and securing Commission approval of
custom incentive design and offering.
Identifying customers who are interested in learning more about energy efficiency or
customers who are planning replacement/or build projects to promote energy efficient
options.
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Securing a 3rd party vendor to work directly with customers or contractors to design
custom projects and to verify the therm savings of projects.