20060925IPC to ICIP 46.pdf

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An IDACORP Company
IDAHO POWER COMPANY
O. BOX 70
BOISE. IDAHO 83707
RECEIVED Monica B. Moen
Attorney II
200& SEP 22 PH~:
IDAHO FUGUe
UTILITlES coNn/!lSSIOi'
September 22 2006
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise, Idaho 83720-0074
Re:Case No. IPC-06-
Idaho Power Company s Response to the (Confidential) Third
Production Request of the Industrial Customers of Idaho Power
Dear Ms. Jewell:
Please find enclosed for filing an original and two (2) copies of Idaho Power
Company s Response to the Third Production Request of the Industrial Customers of Idaho
Power, Request No. 46 regarding the above-referenced matter.
I would appreciate it if you would return a stamped copy of this transmittal letter
to me in the enclosed self-addressed stamped envelope.
Very truly yours
Jf~ e-
Monica B. Moen
MBM:sh
Enclosures
Telephone [phone] Fax [phone], E-mail MMoen&Jidahopower.com
BARTON L. KLINE ISB #1526
MONICA B. MOEN ISB #5734
Idaho Power Company
P. O. Box 70
Boise , Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
RECEIVED
200& SEP 22 PH 4: 55
IDAHO !)UbUC
UTILITIES COh~MI8SiON
Attorney for Idaho Power Company
Street Address for Express Mail
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A
CERTIFICATE OF PUBLIC CONVENIENCE)
AND NECESSITY FOR THE RATE BASING
OF THE EV ANDER ANDREWS POWERPLANT.
CASE NO. IPC-06-
IDAHO POWER COMPANY'
RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF
IDAHO POWER
COMES NOW , Idaho Power Company ("Idaho Power" or "the Company
and, in response to the Third Production Request of the Industrial Customers of Idaho
Power to Idaho Power Company dated August 15 , 2006, herewith submits the following
information.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER Page
REQUEST FOR PRODUCTION NO. 46: Please describe any efforts Idaho
Power has made to look into the use of emergency generators (i.e. emergency back-up
generation installed throughout the region in commercial or industrial facilities) to meet or
reduce peak loads. Please provide any relevant analyses , documentation , and
correspondence.
RESPONSE TO REQUEST NO. 46:
During the energy crisis in 2001 , Idaho Power made customer inquiries
regarding the installation of back-up generators installed in our service territory.
However, no documentation of these inquiries has been retained.
During this same time period , Idaho Power implemented the Energy Buy
Back program (Schedule 22) that allowed commercial and industrial customers an
opportunity to voluntarily reduce their electric loads in exchange for payment from the
Company. Schedule 22 was available to customers who were able to reduce their
electric load by at least 1 000 kW at one metering point. Eligible customers who were
known to have back-up generation were targeted for program participation. The
program expired in March 2002. A copy of the Program Performance Report filed with
the Commission in May 2002 is attached hereto as "Response to Request No. 46.
The response to this request was prepared by Maggie Brilz, Manager
Rate Design , Idaho Power Company, in consultation with Monica Moen , Attorney II
Idaho Power Company
DATED at Boise , Idaho , this 22nd day of September 2006.
~().
MONICA B. MOEN
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
Page 2
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 22nd day of September 2006, I served a true and
correct copy of the within and foregoing IDAHO POWER COMPANY'S RESPONSE TO
THE THIRD PRODUCTION REQUEST OF INDUSTRIAL CUSTOMERS OF IDAHO
POWER upon the following named parties by the method indicated below, and addressed to the
following:
Commission Staff -1L Hand Delivered
Donovan Walker US. Mail
Deputy Attorney General Overnight Mail
Idaho Public Utilities Commission FAX
472 W. Washington (83702)Email Donovan.walker(gJpuc.idaho.gov
O. Box 83720
Boise, Idaho 83720-0074
Industrial Customers of Idaho Power Hand Delivered
Peter 1. Richardson, Esq.US. Mail
Richardson & O'Leary Overnight Mail
515 N. 27th Street FAX
O. Box 7218 Email peter(gJrichardsonandoleary.com
Boise, Idaho 83702
Don Reading Hand Delivered
Ben Johnson Associates US. Mail
6070 Hill Road Overnight Mail
Boise, Idaho 83702 FAX
Email dreading(gJrnindspring.com
~~ (p.
Monica B. Moen
CERTIFICATE OF SERVICE , Page
IDAHO POWER COMPANY
CASE NO. IPC-O6-
THIRD PRODUCTION REQUEST
OF INDUSTRIAL CUSTOMERS
RESPONSE TO
REQUEST NO. 46
An IDACORP Company
Idaho Power Energy Exchange
Schedule 22
Program Performance Report
May 2002
Background
On February 12, 2001, Idaho Power Company ("Company ) filed an
application (Case No. IPC-E-01-04) with the Idaho Public Utilities Commission ("IPUC")
requesting approval of Tariff Schedule 22, Energy Buy Back Temporary Program
Energy Exchange ). The IPUC approved Schedule 22 in Order No. 28707 dated April
, 2001.
The Energy Exchange was a voluntary load reduction program for commercial
industrial or large irrigation customers. Through this program , Idaho Power Company
would credit a customer s account for reducing electrical load during specific hours. The
goal of this program was to reduce Idaho Power s system peak(s) and to reduce the
amount of high priced wholesale power the Company purchased. The Energy Exchange
was intended to benefit the Company and the participating customers, as well as all
Idaho Power customers.
The Energy Exchange was modeled after similar successful programs at other
utilities in the Northwest and across the country. Through the Idaho Power Energy
Exchange, an interactive website, Idaho Power would declare an Exchange Event. An
Exchange Event was a set of hours during which Idaho Power would ask participants to
reduce their electric load during specific hours on specific days in exchange for a credit
on their bill. Hourly prices would be approximately one-half of wholesale market prices.
Exchange Events would be announced for the day of, day ahead, or two days ahead of
an Event. Participating customers could then specify through the Idaho Power Energy
Exchange which hours and days that they wished to reduce their load. Idaho Power
could then accept or reject the offer of load reduction. Exchange Events were
guaranteed to be a minimum of two consecutive hours and if they participated
customers would commit to a load reduction for at least two consecutive hours.
Participating customers were required to be able to reduce their electrical load by
000 kW at each meter point, have Internet access, and have interval meters.
Participants were encouraged to keep their load reduction within 15% of the amount
they committed to reduce. The Tariff stipulated that Idaho Power would credit
customers for up to 115% of the committed reduction but penalize them for reducing
their load by less than 85% of the committed reduction.
May 2002
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Results
Idaho Power has chosen not to request an extension of Tariff Schedule 22. A
series of events in the western wholesale energy market, a lack of participation, and the
costs of continuing the Idaho Power Energy Exchange have made this program
economically impractical to continue.
To facilitate the Energy Exchange Idaho Power contracted with a third party
service provider, Apogee Interactive, to design and administer the Idaho Power Energy
Exchange website. Idaho Power and Apogee Interactive finalized a services agreement
on June 11 , 2001. The Idaho Power Energy Exchange became active on June 15, 2001.
On June 19, 2001 the Federal Energy Regulatory Commission (FERC) approved
the west-wide mitigation plan for wholesale electric markets. In this plan FERC capped
western wholesale electric prices at a level based on the market clearing prices in
California during stage 1 emergencies. This price cap was and still is approximately $91
per megawatt hour. In the Energy Exchange, Idaho Power anticipated offering
customers hourly bid prices equal to approximately one-half of wholesale market price
during Exchange Events. Within this bid price framework, the western price cap of $91
per megawatt hour resulted in a maximum bid price of about $45 per megawatt hour.
This price was too low to make it economically feasible for participating customers to
reduce their load. While the approval of the western price caps lowered western
wholesale electric prices, overall energy conservation in the Northwest and other load
reduction programs reduced demand for wholesale power. These events helped make
the Idaho Power Energy Exchange unnecessary as a price and load reduction tool.
To market the Energy Exchange, Idaho Power s delivery service representatives
identified the 35 eligible customers most likely to participate and solicited their
participation in this optional program. Representatives from Idaho Power gave formal
Energy Exchange presentations to three special contract customers and several large
power users. The goal for the Company was to have ten meter points active in the
Idaho Power Energy Exchange.
Two companies signed agreements to participate in the Idaho Power Energy
Exchange. Between these two customers, there were three service points in Idaho and
two in Oregon. These five service points had the combined potential of providing a
maximum of approximately 13 MW of load reduction. The level of reduction is an
approximation based on historic hourly load levels and the customer reduction
projections.
While marketing this program, Idaho Power found that unlike some of the other
utilities that had initiated successful energy exchanges, the characteristics of Idaho
Power s customer base make voluntary load reduction for short periods of a few hours
per day difficult and usually not economically viable. Many of Idaho Power's large power
users are food processors. These companies have spoilage issues, cold storage capacity
limitations, inflexible shipping and delivery schedules, and maintenance schedules that
prohibit them from participation in this type of program. The Company found that most
May 2002
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