20191010Avista to Staff 41.pdf

AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATTON
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
TDAHO
AW-E-18-12
IPUC Staff
Production Request
Staff - 41
DATE PREPARED: 09127 l20lWITNESS: N/A
RTCEIVES
i}ig OCT t0 AH il: I rr
9
L
RESPONDER: RyanFinesilver", ,, :- r,,r;,1DEPARTMENT: Energy Efficiency: .,i ;i,-: 1 1., i1{g J f, i ITELEPHONE: (s09) 495-4873
REQUEST:
Please answer the following questions related to Table I reflecting data from the Company's
Conservation Report shown below:
a. Please explain why 2017 electric savings in Table 1 were 377% of the IRP target.
If some programs were more popular than anticipated by the Company-such as
the LED lighting program, please explain why the Company did not forecast this
level of uptake during the planning process; and
b. Please explain why the UCT for electric savings almost doubled between 2016 and
2017 (2.80 to 4.33). Staff previously understood that the Company manages its
DSM portfolio toward a 1.0 UCT to maximize the amount of cost-effective
savings, but this appears to be moving in the opposite direction. Please explain this
change.
Table 1. Electric
Metric 2016 2017
Energy Savings 38,149 MWh 42,223 MWh
IRP Tarset tl,2l3 Mwh 11,186 MWh
Expenditures 511,743,724 $10,975,480
Utility Cost Test 2.80 4.33
Total Resource Cost Test 2.17 2.69
RESPONSE:
In response to part a, Avista's Energy Efficiency program operates with the goal of pursing all
cost-effective conservation, and does not modifu the program to decrease the customer
participation in any program. For 2017, the Company did not make attempts to halt the throughput
on program savings after it had surpassed its [RP target of l l,l86 MWh.
Avista's IRP process forecasts the amount of conservation savings available over a 25 year
timeline; for the purposes of target setting, the Company includes the forecasted conservation in
each year's program plan. While this methodology identifies the amount of savings that are likely
to occur in a given year, conservation efforts, market conditions, and trade ally communication has
the potential to expedite those savings. It is the opinion of Avista that its energy efficiency efforts
pulled forward a significant amount of savings from future years, and the impact ofthose efforts is
seen in its 2016 and2017 conservation achievements.
Avista included in its 2017 Anrnal Conservation Plan (ACP) 19,395 MWh of conservation
savings projected in 2017, which was higher than its IRP target of 11,186 MWh. Please see the
graph below that illustrates the 2014-2019 business plan target, the IRP target, and the actual
savings that occurred in each year.
ldaho Electric Annual Conservation Targets to
Actual Savings
45,@0
40,m
35,m0
30,000
25,m0
20,000
15,000
10,m0
5,000 llllll hl
r Business Han Target
: IRP Target
r Actual
2014
16,635
16,2t4
15,744
2015
20,214
15,666
t4,789
2016
20,t57
1 1,21 3
38,149
2017
19,395
11,185
42,223
h
2018
2t,67
11370
29,805
2019
27,224
t7,41
During the2017 planning process, which occurred in the 4ft quarter of 20l6,the Company did not
believe the high level of throughput from non-residential lighting would continue throughout
2017. However, the Company did see the trend continue in2017. During 2018, the Company did
eventually see a downturn in throughput from the non-residential lighting programs.
In response to part b, Avista does not manage its program towards a 1.0 UCT. Since the UCT ratio
is calculated as the avoided costs divided by the program costs (incentive cost, 3'd party costs, and
non-incentive utility costs), the ability for the utility to lower its UCT ratio would most likely
occur by increasing the incentive value for its measures. Moreover, with the prior policy around
incentive setting, which placed a cap on the amount of incentive offered to customers, the
Company was unable to lower its UCT ratio to 1.0 in some casesl.
The reason for the increase in the UTC ratio is that the amount of avoided costs derived from
Energy Efficiency programs increased from $32,3 18,445 in20l6 to $40,736,366 in2017, which is
an$8,417,921 increase. Of the increased amount, $6,369,959 was attributed to Interior Lighting
progftrms. While the overall program saw an increase in avoided cost, the non-incentive utility
costs and incentive costs did not increase at the same rate, thus creating a larger UCT ratio.
I Tariff Schedule 90 contained two restrictions on the level of incentive offered to customers for participating in
Energy Efficiency programs. 1) Incentive levels could not exceed $0.20 per kWh, and 2) the amount of the incentive
was not to exceed 70Yo of the customer incremental costs.