20250612Reply Comments.pdf

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RECEIVED
June 12, 2025
MEGAN GOICOECHEA ALLEN IDAHO PUBLIC
Corporate Counsel UTILITIES COMMISSION
mgoicoecheaal IenCu)idahopower.com
June 12, 2025
VIA ELECTRONIC FILING
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
RE: Case No. IPC-E-25-09
In the Matter of Idaho Power Company's Application for Modification to
the Company's Residential Demand Response Program, Schedule 81
Dear Commission Secretary:
Attached for electronic filing is Idaho Power Company's Reply Comments in the above-
entitled matter.
If you have any questions about the attached documents, please do not hesitate to contact
me.
Very truly yours,
?I
Megan Goicoechea Allen
MGA:sg
Enclosures

MEGAN GOICOECHEA ALLEN (ISB No. 7623)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
mgoicoecheaallen(a)idahopower.com
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY'S APPLICATION FOR ) CASE NO. IPC-E-25-09
MODIFICATION TO THE COMPANY'S )
RESIDENTIAL DEMAND RESPONSE ) IDAHO POWER COMPANY'S
PROGRAM, SCHEDULE 81 ) REPLY COMMENTS
COMES NOW, Idaho Power Company ("Idaho Power" or "Company") in
accordance with Rule 203 of the Rules of Procedure of the Idaho Public Utilities
Commission ("Commission") and Notice of Application Order No. 36540, issued April 11,
2025, respectfully submits its Reply Comments in the above-referenced case as follows.
I. REPLY COMMENTS
Pursuant to the Commission's scheduling order, comments were submitted by
Commission Staff("Staff") as well as a public comment from the City of Boise City ("Boise
City"). The Company appreciates Staff's thorough review and assessment of, and Boise
City's support for, the Company's request to modify the Air Conditioning ("AC") Cool
Credit ("ACCC") program to add a Bring Your Own Thermostat ("BYOT") option to its
IDAHO POWER COMPANY'S REPLY COMMENTS - 1

residential demand response ("DR") program.' Having reviewed the Company's
Application, Staff recommends that the Commission issue an order approving the
Company's Application with certain modifications.2 More specifically, Staff's Comments
recommend that the Commission approve the Company's proposed modifications to the
ACCC program subject to adjustments related to reporting and evaluating cost-
effectiveness (recommendations 1 and 2); addressing risk of "immediate unenrollment"
behavior (recommendation 3); and considerations for future continuation of the BYOT
option (recommendation 4).
The Company appreciates the opportunity to offer these Reply Comments to
respond to Staff's recommendations, address the concerns noted by Staff, and provide
additional clarity regarding its proposal. The Company also notes that it met with Staff on
June 4, 2025, to discuss and clarify its Application and proposal in this case.
A. Attrition Rates
In its comments, Staff expressed concern that the estimated attrition rates are not
consistent with the observed rates. In the Company's June 4 meeting with Staff, it clarified
that the attrition rates in its Application and analysis are the actual attrition rates it has
observed. The two percent opt out rate and eight percent move out rate3 come from the
Company's data on the existing ACCC program. The 10 percent total attrition rate is
different than the net attrition rate of 5.8 percent4 because the net attrition rate includes
the number of new participants annually.
Staff Comments at 2 (May 29, 2025) and Boise City Comments at 1 (Apr. 14, 2025).
2 Staff Comments at 8.
3 Idaho Power Application, Attachment 2 at 2 (Mar. 12, 2025).
4 Id., at 3.
IDAHO POWER COMPANY'S REPLY COMMENTS -2

B. Cost-Effectiveness Reporting (recommendations 1 and 2)
Staff's recommendations 1 and 2 are based on a misunderstanding of the
Company's proposed cost-effectiveness reporting. Because the Company is not
proposing to spread the costs of enrollment incentives over three years to evaluate cost
effectiveness for the BYOT option, Staff's first two recommendations are inapplicable and,
as such, the Company recommends they not be adopted by the Commission.
In its cost-effectiveness modeling for the BYOT option, the Company explained in
its Application that it performed an analysis, spreading the initial aggregator fee over the
first three years and the enrollment incentives over three years from when they are paid
to customers, in order to provide a more complete assessment of the program's value
when comparing against the existing cost-effectiveness framework. The objective of this
illustrative exercise was to thoroughly evaluate the cost-effectiveness of the new program
option; however, it is not the Company's intent to use this method to determine cost-
effectiveness of its proposed BYOT offering. While the Company noted in its Application
that it will report cost-effectiveness results at the overall ACCC program Ievel,5 it also
currently plans to provide, for informational purposes only, separate cost-effectiveness
metrics for the AC Cycling and BYOT options using actual annual costs. The Company
acknowledges that its proposal in this regard may not have been clear insofar as Staff
recommended that the Commission deny the Company's proposal to spread enrollment
incentive expenses across three years for cost-effectiveness calculations and instead
allow it to spread expenses for cost-effectiveness calculations for only the first four years
of the program.
5 Id., at 10-11.
IDAHO POWER COMPANY'S REPLY COMMENTS - 3

Accordingly, in its June 4 meeting with Staff, the Company clarified that it is not
proposing to spread the costs of enrollment incentives across three years for cost-
effectiveness modeling. Rather, consistent with its standard practice, the Company plans
to report on cost-effectiveness at the ACCC program level using actual year costs. As
noted in its Application, the Company anticipates that the ACCC program with the addition
of the BYOT option will be cost effective in all years.6 Idaho Power further discussed with
Staff that it will collect data and monitor the AC Cycling option and the BYOT option at
the individual offering level, recognizing the importance of having such granular
information to monitor each option's efficacy.
C. Participant Unenrollment (recommendation 3)
Under the Company's proposal, new ACCC participants who enroll in the BYOT
option will receive a $50 enrollment incentive. The enrollment incentive includes the first
year of participation incentives. Customers who leave the BYOT option and later re-enroll
in BYOT are not eligible for an additional enrollment incentive, nor are customers who
leave the AC Cycling option within 12 months of applying to participate in the BYOT
option. Staff raised concerns that the Company's proposed "incentive structure presents
a significant risk of `dine and dash' behavior from customers,"' and as a result, Staff
recommended that the Commission direct the Company to require participants who
unenroll from BYOT before participating in one full DR season to return a pro-rated portion
of the enrollment incentive.$ Alternatively, Staff recommends that the Commission direct
the Company to closely monitor the occurrences of this type of customer behavior, report
on this metric in its annual report, and file a case with the Commission if the rate of
6 Id., at 10.
Staff Comments at 5.
8 Id., at 9
IDAHO POWER COMPANY'S REPLY COMMENTS -4

unenrollment before any participation exceed 20 percent of new enrollments in a year.9
Based on feedback from other peer utilities who have offerings similar to the BYOT option
and from third-party vendors of similar offerings, the Company does not anticipate a
significant number of customers signing up for the BYOT option to receive the enrollment
incentive and then subsequently leaving the program before any system benefits are
realized. While peer utilities and vendors have expressed that they do not often see this
in practice, in the event that this scenario does occur, the Company does not believe it
practicable to require participants who unenroll before participating in a full DR season to
return a portion of the enrollment incentive. However, to the extent the Commission
shares Staff's concerns over the potential for customers exhibiting "dine and dash"
behavior, the Company is supportive of Staff's alternative recommendation to monitor
unenrollment before participation, report on this, and file a case if the rate exceeds 20
percent.
D. Continuation of the Program (recommendation 4)
Staff recommends the Commission require the Company to file an application to
continue the BYOT option prior to contract expiration.10 The Company is supportive of this
recommendation and will additionally include data and analysis specific to the BYOT
option, as well as at the ACCC program level, alongside any such application for
continuance of the BYOT option.
E. Program Implementation
In its Application, the Company advised that if its proposed modifications were
approved, it intended to implement the updates for the 2025 DR season and that a
91d., at 6.
10 Id., at 9.
IDAHO POWER COMPANY'S REPLY COMMENTS - 5

Commission order received by July 15, 2025, along with a revised Schedule 81 effective
coincident with a Commission order, would enable the Company to implement the
proposed changes for the 2025 DR season and acquire benefits in the first year for the
BYOT option." The Company's request in this regard was based on representations by
the Company's contracted BYOT third-party aggregator("aggregator") regarding its ability
to fully implement and bring participants online in the BYOT option during the 2025 DR
season. However, the Company recently learned that the anticipated timing may no
longer be achievable; more specifically, on June 9, 2025, the aggregator advised the
Company that full implementation of the BYOT option and customer enrollment may
extend beyond the 2025 DR season, regardless of whether a Commission Order is
received by July 15, 2025. While the Company is disappointed by the potential delay,
which will in turn impact when the Company achieves benefits for the BYOT option, it
continues to anticipate that the ACCC program, with the addition of the BYOT option, will
be cost effective in all years. However, because BYOT-specific benefits are now unlikely
to be realized until the 2026 DR season given the change in circumstances, the Company
is in the process of reevaluating its marketing strategies for the BYOT option in an effort
to shift program enrollment so that the bulk of initial incentive payments may more likely
occur ahead of the 2026 DR season to better align the costs and benefits of the program.
II. CONCLUSION
Idaho Power appreciates the comments received from Staff and Boise City as well
as Staff's willingness to meet to discuss the case. Idaho Power respectfully requests that
the Commission issue an Order: (1) approving the Company's proposed updates to its
ACCC program and the associated modifications to Schedule 81; (2) directing the
"Idaho Power Application at 12.
IDAHO POWER COMPANY'S REPLY COMMENTS - 6

Company to file an application to continue BYOT prior to current vendor contract
expiration; and (3) if determined necessary by the Commission, directing the Company
to monitor unenrollment before participation, report on this metric in its annual report, and
file a case with the Commission if the rate exceeds 20 percent of new enrollments in a
year.
Respectfully submitted this 12th day of June 2025.
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MEGAN GOICOECHEA ALLEN
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S REPLY COMMENTS - 7

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 12th day of June 2025, 1 served a true and correct
copy of Idaho Power Company's Reply Comments upon the following named parties by
the method indicated below, and addressed to the following:
Commission Staff Hand Delivered
Chris Burdin U.S. Mail
Deputy Attorney General Overnight Mail
Idaho Public Utilities Commission FAX
11331 W. Chinden Blvd., Bldg No. 8 FTP Site
Suite 201-A (83714) X Email chris.burdin(a)puc.idaho.gov
PO Box 83720
Boise, ID 83720-0074
Stacy Gust
Regulatory Administrative Assistant
IDAHO POWER COMPANY'S REPLY COMMENTS - 8