20250128Staff Comments.pdf

RECEIVED
Tuesday, January 28, 2025 3:29:38 PM
IDAHO PUBLIC
UTILITIES COMMISSION
DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9917
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN )
POWER'S APPLICATION FOR A ) CASE NO. PAC-E-24-10
PRUDENCY DETERMINATION OF ITS )
DEMAND SIDE MANAGEMENT EXPENSES )
INCURRED IN 2022 AND 2023 ) COMMENTS OF THE
COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Dayn Hardie, Deputy Attorney General,
submits the following comments.
BACKGROUND
On August 19, 2024, Rocky Mountain Power, a division of PacifiCorp ("Company")
applied for an order designating $9,102,982 in 2022 and 2023 Demand Side Management
("DSM") expenditures as prudently incurred. The Company funds its DSM programs through
Schedule 191-Customer Energy Efficiency Service Rate Adjustment("Schedule 191"or"Tariff
Rider"). Schedule 191 funds four energy efficiency programs and two load management
programs.' The Company requested its Application be processed by Modified Procedure.
'This Application excludes the Irrigation Load Control program because those expenditures are not recovered through
Schedule 191.
STAFF COMMENTS 1 JANUARY 28, 2025

STAFF ANALYSIS
DSM portfolio
In its Application, the Company presents that its DSM programs were cost-effective in
2022 and 2023 with Utility Cost Test ("UCT") ratios of 1.31 and 1.43, respectively. To support
these results, the Company provided the 2022 and 2023 Idaho Energy Efficiency and Peak
Reduction Annual Reports detailing the Company's portfolios performance, expenses, savings,
and program management. Additionally, the Company included third-party cost-effectiveness
evaluation memos. Staff reviewed the Company's Application, annual reports, program
evaluations, and discovery responses. Staff believes that, in general, the Company's DSM
programs are well managed and cost-effective. Staff recommends that the Commission
designate $9,043,899 of 2022 and 2023 DSM expenditures as prudently incurred.
The comments below detail Staff s analysis of the Company's DSM portfolio, program
financials, cost-effectiveness analyses,program offerings, and on-going projects. The absence of
any discussion on additional points should not be construed as Staff s support or endorsement for
the Company's position without a full evaluation in the future.
Rider Balance and Expenses
Staff audited the Company's Tariff Rider expenses, which included sampling and
reviewing 110 transactions across all the Company's incentives, marketing campaign,program
administration, and labor expenses. Staff believes that most of the Company's DSM expenses
were well documented, and that internal controls appeared to be in place to prevent improper
payment of incentives and to properly record DSM Program expenses. However, Staff
discovered two expenses that were improperly recorded to the Idaho jurisdiction that should have
been assigned to Utah.
Staff identified two expenses that were improperly recorded to the Idaho jurisdiction in
2022 and 2023. The expenses were from Resource Innovations and Evergreen Consulting
Group. In total, $59,083 was charged to the Idaho Tariff Rider that should be assigned to Utah.
Staff recommends the Company review its expenses annually before the books are closed and
search for expenses that are commonly booked to an incorrect service territory. After accounting
STAFF COMMENTS 2 JANUARY 28, 2025

for these two incorrectly booked expenses, Staff recommends that the Commission authorize
$9,043,899 as prudently incurred expenses for 2022 and 2023.
See Table No. I below for a summary of the Company's Tariff Rider revenues and
expenses.
Table No. 1: Customer Efficiency Services Tariff Rider Balance
Beginning Balance, as of January 1, 2022—(Overfunded) (524,625)
Tariff Rider Revenue 2022 (5,165,493)
Tariff Rider Expenses 2022 4,214,323
Carrying Charge 2022 (9,983)
Adjustment, Evergreen Consulting Group 58,283
Ending Balance, as of December 31, 2022—(Overfunded) (1,427,495)
Tariff Rider Revenue 2023 (5,604,868)
Tariff Rider Expenses 2023 4,776,667
Carrying Charge 2023 (41,060)
Adjustment, Resource Innovations 800
Ending Balance, as of December 31, 2023 —(Overfunded) (2,293,933)
On January 1, 2022, the Tariff Rider was overfunded by $524,625. On July 8, 2022, the
Company applied for authority to increase Schedule 191 in Case No. PAC-E-22-10. The
Commission issued Order No. 35546 approving the Company's application in fall 2022. In that
Order, the Commission authorized the Company to increase Schedule 191 from 2.25%to 2.5%.
Although the balance was overfunded by $255,450, increasing the rate to 2.5%was expected to
allow the Company to meet the anticipated increased DSM expenses and return the overfunded
Tariff Rider balance to zero by December 31, 2024. As of December 31, 2023, the Tariff Rider
balance was overfunded by approximately $2.3 million. Staff will continue to monitor the
balance of the Tariff Rider.
STAFF COMMENTS 3 JANUARY 28, 2025

Program Management
Wattsmart Homes
In 2023, the Company reports that its Wattsmart Homes program was not cost-effective
with a UCT ratio of 0.68. This program was cost-effective in 2022 with a UCT of 1.32. The
Company states that the program saw a significant reduction in savings from the engine block
heater controls measure due to low realization rates in a recent evaluation. 2023 Annual Report
at 6. In response to Production Request No. 11, the Company described several actions taken to
diversify the HVAC and Whole Building measure offerings and improve cost-effectiveness.
These actions include increasing incentives for HVAC measures, simplifying the tiers for dual
fuel heat pumps, adding new trade allies, and implementing additional marketing efforts. Staff
will review results of program changes in next filing.
Wattsmart Homes Whole Building Evaluation
In March 2024, a third-party evaluator("Evaluator") completed an impact evaluation of
the Company's Whole Building measure category ("Evaluation") as part the 2021 and 2022
program year Wattsmart Homes evaluation. From its review of the Evaluation, Staff is
concerned with the method used to determine evaluated savings.
The Evaluation states that the Evaluator reviewed supporting documentation to verify
that each home met the measure qualifications as documented in the Measure Library and that
the provided documentation supported the claimed measure selection. In this context, supporting
documentation is defined as outputs from Ekotrope, a RESNET accredited Home Energy Rating
System("HERS")rating software used to estimate savings through a simulated energy model.
Additionally, the Company's Measure Library is informed by REM/Rate, another RESNET
accredited HERS rating software. Staff believes that this method compared the results of one
energy simulation to another and therefore has not provided meaningful evaluation of the
program's impact on the Company's system.
While necessary for the Company to forecast the energy savings of a new energy efficient
home, a simulation does not necessarily represent the actual energy savings impact on the
Company's system. In response to Production Request No. 13, the Company referenced the RTF
as a data source for the program's measure library. Staff believes this refers to the Standard
Savings Estimation Protocol: New Homes ("Protocol")which is a guideline for using simulated
STAFF COMMENTS 4 JANUARY 28, 2025

energy models to estimate savings for new construction projects. This Protocol notes that
savings estimates from the REM/Rate model may significantly differ from actual savings.
Protocol at 31. Further, the Protocol recommends one or more program evaluations to validate
program savings estimates with "the highest degree of rigor that is practical." Protocol at 36 and
37. Staff believes that the 2022 impact evaluation does not provide validation of program
savings estimates with a high degree of rigor as recommended by the Protocol.
Staff recommends that the Company conduct a follow-up impact evaluation of the Whole
Building measure category using billing data to quantify the energy savings impacts to the
Company's system. The Company should include data from prior program years if necessary to
build a sufficient data set to conduct a meaningful evaluation. Finally, the evaluation should
consider any changes to building codes, modeling practices, or program operations in the
selected evaluation period.
Wattsmart Homes Non-AHRI matching Dual fuel heat pump tier
In its response to Production Request No. 11, the Company describes that it added a dual
fuel heat pump tier to incentivize equipment that does not have matching Air-conditioning,
Heating, and Refrigeration Institute ("AHRI") equipment pairs. Matching equipment is certified
by the AHRI to operate efficiently when paired with other AHRI-matching equipment. The
removal of this requirement may lead to slightly lower savings due to the equipment not
operating as efficiently. The Company remains confident in the efficiency of the individual
systems. During the Flexible tariff process used to implement this change, Staff discovered that
savings for the tier are supported using a REM/Rate building energy simulation. Due to Staff s
concerns with simulation-based savings (detailed in the Whole Building evaluation section
above) and because of the increased uncertainty from the tiers lack of AHRI matching
certifications, Staff recommends that the Company consider conducting a billing analysis to
evaluate the impact of the measure on the Company's system when sufficient data is available
and as savings from the tier justify the expense.
Home Energy Reports
On December 4, 2024, a third-party evaluator completed an impact evaluation of the
Company's 2022 and 2023 Home Energy Reports ("HERs")program. One of the HERs
evaluations primary recommendations is consistent with a previous evaluation to create and
STAFF COMMENTS 5 JANUARY 28, 2025

maintain a control group of 10,000 customers to be used in future billing analysis. This
recommendation represents a reversal of a 2020 deemed savings method that created issues for
future evaluations of the HERs program. Staff believes that the control group method proposed
by the third-party evaluator balances the need for a control group to inform evaluations while
offering the program to as many customers as possible.
Demand Response ("DR")
Wattsmart Battery
In 2022 the Company launched its Wattsmart Battery DR program. The Company
reports that the program passes its cost-effectiveness test using a 20-year net present value.
However, in its response to Production Request No. 14, the Company states that in the first year,
the program is expected to be cost-effective based on annual costs and benefits in 2026. Due to
the high upfront cost of a new DR program and the ramp up of participation, it is common for
new programs to reach cost-effectiveness sometime after implementation. Staff is encouraged
by the program's increase in participation in 2022 and 2023.
Staff believes the Company's reporting on the Wattsmart Battery DR pilot meets most of
the requirements outlined in the Attachment A to Staff s comments in Case No. PAC-E-21-16.
However, the reporting does not include comparative analysis of exports and consumption usage
between solar with batteries and solar without batteries and performance of operations by grid
management practice (i.e., load shifting, frequency reserves,backup power, etc.) Staff
recommends that in its subsequent reports on the pilot, the Company separately report the
benefits of each grid management function and include analysis comparing exports of
consumption between standalone solar systems and solar with battery systems.
Wattsmart Business
In 2021 the Company applied to start a commercial and industrial DR program. The
program was launched on April 1, 2023. It is common for new programs to take time to become
cost-effective as they market to and enroll new participants. Staff will review the performance of
the C&I program as it develops.
STAFF COMMENTS 6 JANUARY 28, 2025

STAFF RECOMMENDATION
Based on its review, Staff recommends the following:
1. The Commission issue an order designating $9,043,899 of the Company's 2022 and
2023 DSM expenses as prudently incurred; and
2. The Commission direct the Company to conduct a follow-up impact evaluation of the
Whole Building measure category using billing data to quantify the energy saving
impacts to the Company's system.
Respectfully submitted this 28th day of January 2025.
�bayn Hardle
Deputy Attorney General
Technical Staff: Jason Talford
Laura Conilogue
L•\Utility\UMISC\COMMENTS\PAC-E-24-10 Comments.docx
STAFF COMMENTS 7 JANUARY 28, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS DAY OF JANUARY 2025,
SERVED THE FOREGOING COMMENTS OF TH COMMISSION STAFF , IN
CASE NO. PAC-E-24-10, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:
MARK ALDER JOE DALLAS
MICHAEL SNOW ROCKY MOUNTAIN POWER
ROCKY MOUNTAIN POWER 825 NE MULTNOMAH ST
1407 WEST NORTH TEMPLE STE 330 STE 2000
SALT LAKE CITY UT 84116 PORTLAND OR 97232
E-MAIL: mark.alder@,pacificorp.com E-MAIL: joseph.dallas@,pacificorp.com
michael.snow@,pacificorp.com
DATA REQUEST RESPONSE CENTER
E-MAIL ONLY:
datarequest@,pacificop2.co
a x 0- r2lz�
PATRICIA JORD , SECRETARY
CERTIFICATE OF SERVICE