20081006IPC to Staff 89-109.pdf

LISA D. NORDSTROM
Senior Counsel
1SIDA~POR~
An IDACORP Company
t"'O
\01\\,0
Ui\l\1\€.S C
October 3,2008
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-08-10
General Rate Case
Dear Ms. Jewell:
Enclosed for filing please find an original and three (3) copies of Idaho Power
Company's Response to the Sixth Production Request of the Commission Staff.
In addition, also enclosed are four copies of a CD containing the Company's
responses to production requests in which electronic/excel files were requested and also
for ease of production of the information.
Upon receipt of this filing, I would appreciate it if you would return a stamped copy of
this letter for my file in the enclosed stamped, self-addressed envelope.
Very truly yours,~~¡(.~~
Lisa D. Nordstrom
Senior Counsel for Idaho Power Company
LDN:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise. ID 83702
.¡i,. "'I),,,,¡,-,,,,,
BARTON L. KLINE, ISB #1526
LISA D. NORDSTROM, ISB #5733
DONOVAN E. WALKER, ISB #5921
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
bkline((idahopower.com
Inordstrom(âidahopower.com
dwalker((idahopower.com
REceIVED
zn08 OCT -3 PH~: 50
IDAHO PUBLIC ¡
UTILITIES COMMISSION
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MA TIER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR AUTHORITY TO
INCREASE ITS RATES AND
CHARGES FOR ELECTRIC
SERVICE.
)
) CASE NO. IPC-E-08-10
)
) IDAHO POWER COMPANY'S
) RESPONSE TO THE SIXTH
) PRODUCTION REQUEST OF THE
) COMMISSION STAFF TO IDAHO
) POWER COMPANY
COMES NOW, Idaho Power Company ("Idaho Power" or "the Company"), and in
response to the Sixth Production Request of the Commission Staff to Idaho Power
Company dated September 19, 2008, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1
REQUEST NO. 89: For each Idaho-funded demand-side management (DSM)
program included in Appendix 4 of Idaho Power's Demand-Side Management 2007
Annual Report, please provide a breakdown of annual and 5-year total costs, including
incentive payments to participants, direct program administrative costs, direct program
evaluation costs, and allocated indirect administrative and evaluation costs with a
description of how such allocations were made.
RESPONSE TO REQUEST NO. 89: The response for this Request requires
additional time and review and wil be made available as soon as possible.
This response to this Request was prepared by Barton L. Kline, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2
REQUEST NO. 90: For each Idaho-funded demand-side management (DSM)
program included in Appendix 4 of Idaho Power's Demand-Side Management 2007
Annual Report, please provide the pre-implementation estimated evaluation budget, the
amount spent on evaluations through 2007, and the amount spent for evaluations in
2008 to-date.
RESPONSE TO REQUEST NO. 90: The response for this Request requires
additional time and review and will be made available as soon as possible.
This response to this Request was prepared by Barton L. Kline, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3
REQUEST NO. 91: Please provide copies of any post-implementation
evaluations of all Idaho-funded DSM programs completed by or for Idaho Power from
2003 through 2008. Include evaluations of program processes, direct energy and peak
demand impacts, and educational and/or market transformation effects.
RESPONSE TO REQUEST NO. 91: Please see the file entitled "2003-2008
Evaluation Study List.xls" on the enclosed CD which lists the post-implementation
studies from 2003 through 2008. Also, the CD contains all studies that are available in
electronic format. Due to limited copies, voluminous nature, or unavailabilty in
electronic format, all other evaluations, surveys, etc., wil be made available for
examination at the Company's corporate offces. Please contact Doug Jones at 388-
2615 or Camila Victoria at 388-5821 to arrange a time to review the requested
information.
The response to this Request was prepared under the direction of Theresa
Drake, Customer Relations and Energy Effciency Manager, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 4
REQUEST NO. 92: Please describe how post-implementation evaluations have
been used by Idaho Power to improve its DSM programs and/or to improve its overall
resource planning. Include supporting discussion notes, letters and memorandums, all
whether on paper or electronically distributed.
RESPONSE TO REQUEST NO. 92: The response for this Request requires
additional time and review and wil be made available as soon as possible.
This response to this Request was prepared by Barton L. Kline, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5
REQUEST NO. 93: Please provide a reasonably detailed description and cost
summary of each post-implementation evaluation of DSM programs. Include in the
descriptions the names and affliations of the primary evaluators and the process(es) by
which the evaluators were chosen.
RESPONSE TO REQUEST NO. 93: Please see the Excel file provided in Idaho
Power's response to Staffs production request No. 91. This file lists each post-
implementation study of demand side management ("DSM") programs including: study
title, primary evaluator, process by which the evaluators were chosen, and cost
summary.
The response to this Request was prepared under the direction of Theresa
Drake, Customer Relations and Energy Effciency Manager, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 6
REQUEST NO. 94: Please describe any post-implementation DSM program
evaluations that are not yet completed, but are currently in progress.
RESPONSE TO REQUEST NO. 94: Idaho Power is currently participating in
several regional evaluations of current energy effciency and demand response
programs. In order to enhance Idaho Power's evaluation capabilities, in 2007 the
Company hired a full-time Energy Effciency Evaluator. Part of the duties associated
with this position has been to initiate a systematic review and evaluation of each
demand side management program Idaho Power offers.
In the residential sector, current projects include participation in the development
of the final evaluation plan for the Northwest Energy Effciency Allance ("NEEA")
Energy Star Homes Northwest impact evaluation. This evaluation wil provide Idaho
Power with a statistically valid sample of Energy Star qualified homes in Idaho Power's
service territory and the energy savings impacts of the Energy Star Homes program.
This study wil include a lighting hours of use component that wil assist Idaho Power in
evaluating lighting impacts in other residential sector programs. Idaho Power recently
completed a pilot for the attic insulation program. Idaho Power has funded a review of
simulated energy savings with Ecotope, Inc., based on the results of the pilot. A biling
analysis using the Princeton Scorekeeping Method ("PRISM") approach wil be
completed by Idaho Power once post-implementation data is available. Idaho Power is
currently conducting an internal review of the Energy House Calls program and the
Rebate Advantage program. These evaluations wil include a biling analysis approach
using the PRISM softare.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 7
In the commercial and industrial sector, Idaho Power has funded an over-sample
of commercial buildings, as part of the 2008 Northwest Commercial Building Stock
Assessment performed by The Cadmus Group. An over-sample wil provide Idaho
Power with additional resources to evaluate programs and plan program activities for
commercial customers. On-going activities in this sector aimed at improving program
performance, include engineering analyses for each project in the Custom Effciency
program for industrial customers. The NEEA has begun a compressed air study that
includes Idaho Power's participation. A regional evaluation managed by the Northwest
Power and Conservation Council is underway that wil estimate the energy savings
potential in the industrial sector.
The irrigation sector post-implementation evaluation plan includes an annual
analysis and report on the Irrigation Peak Reward's program performance. The
Irrgation Peak Rewards Report provides an overview of peak demand reduction,
program costs, and program participation. This year's report wil be filed with the
Commission by December 1, 2008.
Idaho Power conducts on-going review of DSM program cost-effectiveness for all
program offerings. Each program's cost-effectiveness analysis is completed at a fixed
point in time, and is based on Idaho Power's best knowledge of energy savings
potential, electricity peak demand reduction, market potential, building code
requirements, and other assumptions. As factors change, or new data is obtained,
these studies are revised and updated.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 8
The response to this Request was prepared under the direction of Theresa
Drake, Customer Relations and Energy Effciency Manager, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 9
REQUEST NO. 95: Please describe any post-implementation DSM program
evaluations that are currently in a planning stage.
RESPONSE TO REQUEST NO. 95: As stated in Idaho Power's response to
Staffs production request No. 94, Idaho Power reviews each energy effciency and
demand response program for cost-effectiveness as programs mature, changes in
building codes occur, market characteristics change, assumptions or costs change, and
as evaluation results become available. Idaho Power continually reviews the
assumptions used to develop each program to ensure that programs remain cost-
effective on an on-going basis. Along with cost-effectiveness analysis, Idaho Power
continually evaluates the performance and customer satisfaction of its energy effciency
and demand response programs. These evaluations seek to: improve program
delivery and data collection processes, verify energy savings and peak load reduction
impacts, and identify educational opportunities. For studies relating to market
transformation, Idaho Power relies on assessments conducted by the Northwest Energy
Effciency Allance and the Regional Technical Forum.
Currently, specific programs that are planned for post-implementation evaluation,
in the residential sector, include the Home Products program, the Attic Insulation pilot,
and AlC Cool Credit. The Home Products pilot program wil be evaluated to more
accurately assess on-going participation assumptions, market penetration rates, and
first-year results. The Attic Insulation pilot is planned for review to identify if the energy
savings assumptions are accurate and to analyze the impact of the program on
participating customers' bils. AlC Cool Credit wil also be studied to re-evaluate the
demand reduction impacts of the program by installng data loggers on a sample of the
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 10
program's participants. Another study planned for 2009 by Idaho Power is a residential
end-use survey and a residential customer behavior survey. These analyses wil be
used by Idaho Power for program planning purposes by providing an overview of Idaho
Power's customer base and the associated electric end-uses.
In the commercial and industrial sector, Idaho Power plans to evaluate the Easy
Upgrades program by reviewing the assumptions for each measure. Within this sector,
Idaho Power is finalizing a contract with the Idaho Integrated Design Laboratory ("IDL")
to provide a variety of evaluation functions for the Commercial programs. These include
a post-occupancy survey of Building Effciency and Easy Upgrades program
participants. IDL wil perform a Measurement and Verification study of selected
measures in the Building Effciency program. Idaho Power plans to continue conducting
engineering studies on all projects completed in the Custom Effciency program for the
industrial sector.
The irrigation Peak Rewards program wil be reviewed this year in the .annual
report due to the IPUC on December 1, 2008. Idaho Power plans to include in its
review of this program major program changes proposed for 2009. The results of this
evaluation wil be presented in the 2009 Irrigation Peak Rewards report.
The response to this Request was prepared under the direction of Theresa
Drake, Customer Relations and Energy Effciency Manager, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 11
REQUEST NO. 96: Please provide post-implementation benefit/cost (B/C) ratio
estimates for each Idaho-funded DSM program listed in Appendix 4 of Idaho Power's
Demand-Side Management 2007 Annual Report. Include B/C ratios from all
perspectives considered, e.g. societal, total resource, utility, participant, and non-
participant. Provide complete descriptions of, and bases for, all assumptions (e.g. net-
to-gross savings ratios), values (e.g. demand, energy and non-energy savings) and
calculations used in estimating the B/C ratios and the actual calculations on executable
Excel spreadsheets.
RESPONSE TO REQUEST NO. 96:The spreadsheet, UC _ TRC_
ProgramAnalysis.xls, on the enclosed CD calculates the utility cost ratio ("UC") and total
resource cost ratio ("TRC") for Idaho Power's energy effciency and demand response
programs, funded by the Idaho Energy Effciency Rider or Idaho Power's base rates,
and included in Appendix 4 of Idaho Power's Demand-Side Management 2007 Annual
Report. These B/C ratios are calculated based on the years ranging from 2003-2007,
depending on the year each program began reporting energy or demand savings. Pilot
programs were not included in this analysis. The final UC and TRC ratios are based on
cumulative costs and savings of the programs, calculated from a net present value of
quantified benefits and costs. Analysis of energy effciency programs are reported
separately from demand response programs, due to the difference in how the benefits
of these programs are valued and how they are evaluated. The spreadsheet also
includes a summary of energy effciency and demand response programs B/C ratios.
Individual program savings calculations and benefit values are also included in the
spreadsheet.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 12
Inputs and Assumptions
Inputs, including DSM alternative costs and financial metrics, are reported in the
Technical Appendix of the 2006 Idaho Power Integrated Resource Plan ("I RP")
(http://ww.idahopower.com/energycenter/irp/2006/2006IRPFinal.htm ) and the Technical
Appendix of the 2004 IRP (http://ww.idahopower.com/energycenter/irp/2004). Other inputs
including measure life, reported savings, and reported costs are calculated based on
numerous regional data sources, national and regional evaluation, and Idaho Power
program evaluations. For assumptions pertaining to individual energy effciency or
demand response programs, see the "Assumptions and Notes" tab.
Savings
Reported savings are calculated from a variety of sources. For many programs,
individual measure savings are obtained from regional sources, including the Northwest
Power and Conservation Councils' Regional Technical Forum, the Database for Energy
Effcient Resources database, the California Measurement Advisory Council,
Consortium for Energy Effciency, and reports from other northwest regional utilities.
Savings are reported with the most accurate information available, and are adjusted as
necessary when the Company receives more updated data from in-house or regional
evaluations and analyses. Net to gross ratios are generally included in the energy
savings estimates. Custom programs like Custom Effciency calculate savings on a per
project basis based on engineering studies by Company staff or third-party engineering
firms.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 13
Value of Energy Savings
The reported dollar value of the energy savings equals the net present value of
the DSM alternative costs of energy saved over the measure life of the program.
Transmission and distribution losses are included in the energy benefit of the B/C ratios.
These energy benefits are included in numerator of the B/C ratios. DSM alternative
costs were not available prior to the publishing of the 2004 IRP. In the spreadsheet
analysis the alternative costs for 2002 and 2003 were calculated based those provided
in the Technical Appendix of the 2004IRP.
Total Utilty and Total Resource Costs
Total utility costs include all incentives paid, program overhead, labor, and
increased supply costs in the event of load shifting during demand response events.
Utility costs account for the denominator in the UC ratio. Total resource costs include
the incremental cost to the participant, and all utilty costs excluding incentives paid.
These costs accounted for in the denominator in the TRC ratio.
Energy Effciency Program Details
The spreadsheet analysis provides a detailed breakdown of individual program
costs and savings by year. As can be seen in the summary sheet, all of Idaho Power's
effciency programs except Heating and Cooling Effciency are shown to be cost
effective, both from a utility and total resource perspective.
In 2007, the Heating and Cooling Effciency program reported small savings.
This was the program's first year and it was stil ramping up its efforts in building a
strong contractor base, providing contractors training, and marketing the program. The
Heating and Cooling Effciency program is expected to become increasingly cost
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 14
effective as front end costs decrease and substantial savings begin to accrue through
the program's many effciency offerings. Once fully operational, the summer peak
savings and long measure life of the Heating and Cooling program will bring great
value.
Demand Response Program Details
The spreadsheet analysis also provides a detailed breakdown of both demand
response programs offered by Idaho Power. Because demand response programs are
different than energy effciency programs, savings are not calculated or summed in the
same manner as energy effciency savings. For this reason, a year by year B/C ratio is
shown for each program.
AlC Cool Credit is still considered to be in the ramp-up phase of program
implementation because of heavy up front costs while the program installs all necessary
equipment and invests in marketing and recruitment efforts. For this reason, the long-
term cost effectiveness of the AlC Cool Credit program must be considered.
The response to this Request was prepared under the direction of Theresa
Drake, Customer Relations and Energy Effciency Manager, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 15
REQUEST NO. 97: Describe all sensitivity analyses conducted by or for Idaho
Power of any non-firm variables and assumptions used in estimating DSM program B/C
ratios.
RESPONSE TO REQUEST NO. 97: Idaho Power has developed most of its
DSM programs through the Integrated Resource Plan ("IRP") process and input from
the Energy Effciency Advisor Group ("EEAG"), the exceptions being older programs or
programs developed through third parties such, as the Northwest Energy Effciency
Allance ("NEEA") or the Bonnevile Power Administration ("BPA"). In the IRP process
of program development, Idaho Power creates cost-effectiveness models for its
programs. To provide inputs into these models, Idaho Power uses estimates from
various sources including, but not limited to, regional databases and studies and third-
part analyses. Information is obtained from sources such as the Northwest Power and
Conservation Council, the Regional Technical Forum ("RTF"), the Northwest Energy
Effciency Allance ("NEEA"), E-Source, the Database for Energy-Effciency Resources
("DEER"), the Energy Trust of Oregon and other regional utilities. These inputs include
the participant costs, utility costs, energy savings, participation estimates, measure life,
and financial inputs. Financial inputs are obtained from the IRP process to determine
discount rates, inflation rates, and escalation rates. The Company then uses sensitivity
analysis on many of these inputs to determine incentive levels that maintain cost-
effectiveness and estimate customer participation, program ramp-up, and weighted
participation in various measures associated with the programs.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 16
In 2003, NEEA contracted with Summit Blue Consulting, LLC, to complete an
analysis which subsequently created the following report, "FINDINGS AND REPORT
RETROSPECTIVE ASSESSMENT OF THE NORTHWEST ENERGY EFFICIENCY
ALLIANCE Final Report. "In section 2.5, Summit Blue describes the sensitivity analysis
they completed.This report is on the enclosed CD, or available at
http://ww.nwallance.org/research/documents/120.pdf.
The response to this Request was prepared under the direction of Theresa
Drake, Customer Relations and Energy Effciency Manager, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 17
REQUEST NO. 98: To the extent that assumptions and variable values of post-
implementation B/C ratios differ from those used in pre-implementation DSM "potential"
studies, please describe and explain those differences.
RESPONSE TO REQUEST NO. 98: Idaho Power uses the Total Resource Cost
("TRC") test and the Utility Cost ("UC") test to develop benefit cost (UB/C") ratios to
determine cost-effectiveness of DSM programs. See Idaho Power's response to Staffs
production request No. 99. The Electric Power Research Institute, End Use Technical
Assessment Guide, identifies the inputs for the TRC test and the UC test. The inputs
for the TRC are:
TRCTest
Benefits Costs
Avoided Supply Costs Increased Supply Costs
Avoided Participant Costs (net)Participant Costs (net)
Tax Credits Utility Costs
UC Test
Benefits Costs
Avoided Supply Costs Increased Supply Costs
Participant Charges Incentives
Utilty Costs
Post -implementation SIC Ratios
Post-implementation B/C ratios generally differ from those used in pre-
implementation DSM "potential" studies because post-implementation B/C ratio
calculations are based on more actual data with fewer estimates and assumptions.
Post-implementation B/C ratio analyses are dynamic, changing as new information and
data is available.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 18
The supply costs used in post-implementation B/C ratio calculations are obtained
from the IRP process and published in Technical Appendix of Idaho Power's most
recent IRP http://w.idahopower.com/energycenter/irp/2006/2006IRPFinal.htm. The
financial inputs such as discount rate and inflation rate are also published in the most
recent IRP Technical Appendix. The participant costs and charges are usually based
on actual participant data. The utility costs, incentives, and tax credits (when used) are
from 'actual data. The assumptions used in the post-implementation calculations vary
from program to program, but include the load shape of the energy savings, the level of
energy or demand savings, the life of the measures included in programs, and the net to
/gross ratios. Usually, the net to gross ratios are accounted for in the energy or demand
savings estimates. The pre-implementation assumptions are based on regional
databases or studies, third-part analyses, or Idaho Power analysis. The regional
databases or studies and third-part analyses information are obtained from sources
such as the Northwest Power and Conservation Council, the Regional Technical Forum,
the Northwest Energy Effciency Allance, E-Source, the Database on Energy-Effciency
Resources, the Energy Trust of Oregon or other regional utilities. Post-implementation
assumptions are verified whenever possible and practical by third-part evaluations,
updated regional evaluations, or Idaho Power evaluations.
Pre-implementation DSM "potential" studies
It is important to remember that pre-implementation potential studies are based
on a 'snap shot' in time. All of the estimates and assumptions are based on the
knowledge of the utility and/or the consultant(s) at some base time period identified for
the study. Pre-implementation studies rely on estimates and assumptions. These
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 19
estimates and assumptions are usually based on regional data, previous studies by
consultants, programs at other utilities, information from equipment suppliers and trade
alles. Supply costs are often based on Idaho Power published supply costs (when
available) but are often escalated over time to account for future supply costs.
Participant costs are estimated based on regional data or information from trade alles
or regional energy effciency groups. Participation rates, market penetration rates,
incentives, and utility costs are estimated. The financial inputs to the calculations are
supplied by Idaho Power but they may be adjusted over time to reflect changes in
economic conditions. The load shape of the energy savings, the level of energy or
demand savings, the life of the measures included in programs, and the net to gross
ratios are estimated based the same information as cited above without the follow-up
verification.
The response to this Request was prepared under the direction of Theresa
Drake, Customer Relations and Energy Effciency Manager, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 20
REQUEST NO. 99: On page 7, line 1, of Theresa Drake's pre-filed testimony is
a reference to Idaho Power's use of the Electric Power Research Institute End Use
Technical Assessment Guide and the California Standard Practice Manual, both of
which recognize the value that each of the five standard tests (Le. societal, total
resource, utility, participant, and non-participant) can lend to optimizing and balancing
DSM planning and program design. To the extent that Idaho Power does not consider
B/C ratios from any of those five standard tests, please explain why not.
RESPONSE TO REQUEST NO. 99: Idaho Power utilizes the Total Resource
Cost ("TRC") and the Utility Cost ("UC") tests in assessing the cost-effectiveness of its
DSM programs. Idaho Power has developed most of its DSM programs through the
Integrated Resource Planning ("IRP") process with input from Effciency Advisory Group
("EEAG"), the exceptions being older programs or programs developed through third
parties such as Northwest Energy Effciency Allance ("NEEA") or the Bonnevile Power
Administration ("BPA"). In the IRP process, Idaho Power assesses energy effciency
and demand response programs on an equal basis with supply-side resources. The
Electric Power Research Institute End Use Technical Assessment Guide and the
California Standard Practice Manual both identify the TRC test and the UC test as being
similar to supply-side tests. See the Electric Power Research Institute End Use
Technical Assessment Guide Volume 4, page 1-16 and page 122 and the California
Standard Practice Manual, July 2002, page 21 and 24.
The TRC is a measure of the total net resource expenditures of a DSM program,
from the point of view of the utility and its ratepayers as a whole, and the UC is a
measure of the change in total costs to the utility that is caused by a DSM program.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 21
Thus, they evaluate a DSM program from the point of view of a utility's total costs. For
these reasons, Idaho Power believes these are the most appropriate test to use for
evaluating DSM programs.
The use of the TRC and the UC are also consistent with IPUC Order No. 28894
in which the Commission ordered the Energy Effciency Advisor Group:
To screen the cost-effectiveness of potential DSM projects,
the advisory group shall use the following tests: total
resource cost, utility cost and participant cost. However,
these tests are merely guidelines that should not used to
exclude projects that may be desirable as good public policy.
The advisory group is not required to use the non-participant
("no losers") test.
Idaho Power acknowledges many of the inputs for the other cost-effectiveness
test as important and uses the same or similar information in the design of its programs.
The diffculty with the other tests is calculating or quantifying the inputs and interpreting
their results. The Electric Power Research Institute End Use Technical Assessment
Guide and the California Standard Practice Manual also indicate that all of these test
(i.e., societal, total resource, utility, participant, and nonparticipant) results are only as
good as the inputs that are used to calculate them. The Electric Power Research
Institute End Use Technical Assessment Guide points out that ". . . these tests are
based on quantifiable information. With the exception of the attempt to measure
externalities for the societal test, all components are quantifiable" (pages 1-10).
Many of the societal impacts of Idaho Power's DSM programs are examined
through the process of presenting these programs to the EEAG. As noted in
Commission Order No. 28894: "However, these tests are merely guidelines that should
not used to exclude projects that may be desirable as good public policy."
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 22
In reference to the Participant Test, the California Standard Practice Manual
indicates: "None of the Participant Test results (discounted payback, net present value,
or benefit-cost ratio) accurately capture the complexities and diversity of customer
decision-making processes for demand-side management investments. Until or unless
more is known about customer attitudes and behavior, interpretations of Participant Test
results continue to require considerable judgment." Idaho Power assesses the impact
on participants in a multi-dimensional way. The Company presents programs through
the EEAG, conducts customer research, considers bil impact of programs, and modifies
programs through time, based on customer feedback.
Concerning the Ratepayer Impact Measure (previously known as the "non-
participant" cost test), the California Standard Practice Manual indicates: "Results of
the RIM test are probably less certain that those of other tests because the test is
sensitive to the differences between long-term projections of marginal costs and long-
term projections of rates, two cost streams that are diffcult to quantify with certainty"
(page 15).
The response to this Request was prepared under the direction of Theresa
Drake, Customer Relations and Energy Effciency Manager, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 23
REQUEST NO. 100: On page 7, lines 3 and 4, of Theresa Drake's pre-filed
testimony is the statement that "...if the benefit/cost ratio is greater than "1," the program
is considered cost-effective. Is a B/C ratio greater than 1.0 Idaho Power's sole criterion
for determining the success of a DSM program? Or does the Company also evaluate
program success based on possible alternative demand-side costs? If so, please
provide documented examples of the use of such.
RESPONSE TO REQUEST NO. 100: As a point of clarification, in Theresa
Drake's pre-filed testimony on page 7 when discussing the B/C ratios of the energy
effciency and demand response programs, Ms. Drake neither states nor implies that
the B/C ratios are criteria for determining the success of a program, merely the cost-
effectiveness.
Idaho Power measures the success of its energy effciency and demand
response programs in a number of ways. The screening criteria for DSM program are
described in Appendix D - Technical Appendix for the 2006 Integrated Resource Plan
on page 62 at http://w.idahopower.com/energycenter/irp/2006/2006IRPFinal.htm.:
. Programs wil be cost-effective. From a total resource
perspective, estimated program benefits must be greater than
estimated program costs.
. Programs wil be customer-focused. From the participants'
perspective, programs wil offer real benefits and value to
customers. The Idaho Public Utilities Commission stated in
Order No. 29026, "It is our hope that the programs created by the
DSM rider wil empower customers to exercise control over their
energy consumption and reduce their bils."
. Programs wil be equitably distributed. From the customers'
perspective, programs wil be selected to benefit all groups of
customers. Over time, programs wil be offered to customers in
all sectors and in all regions of the company's service territory.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 24
. Programs wil be as close to earnings-~eutral as possible.
From the utility's perspective, programs wil be selected to
minimize the negative impact on shareowners.
Similarly, in the Technical Appendix for the 2004 Integrated Resource Plan
(http://ww.idahopower.com/energycenter/irp/2004/2004IRPFinal.htm). the screening
criteria for DSM programs are also stated.
In the Demand-Side Management 2007 Annual Report at
http://w.idahopower.com/aboutuslregulatoryinfo/reportPdf.asp?id=44&.pdf, page 3,
Idaho Power states:
Idaho Power's two main objectives for DSM programs are to:
1) Acquire cost-effective resources in order to more effciently
meet the electrical system's needs, and
2) Provide Idaho Power's customers with programs and
information to help them manage their energy and demand
use and lower their bils.
Idaho Power achieves these objectives through. the development and
implementation of programs with specific energy, economic, and customer satisfaction
objectives.
The response to this Request was prepared under the direction of Theresa
Drake, Customer Relations and Energy Effciency Manager, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 25
REQUEST NO. 101: On page 12 of Theresa Drake's pre-filed testimony is the
statement that "NEEA estimated that 28,601 megawatt-hours were saved in the
Company's service territory in 2007." Please provide the assumptions and calculations
NEEA used to estimate that savings number and any Idaho Power analyses of the
veracity of that megawatt-hour savings number and the value of such savings.
RESPONSE TO REQUEST NO. 101: The 28,601 megawatt-hours cited in Ms
Drake's testimony was a preliminary number as noted in footnote 3 on page 56 of the
Demand-Side Management 2007 Annual Report. On June 20, 2008, Idaho Power
received an email from Christine Jerko, Senior Planning Analyst for Northwest Energy
Effciency Allance ("NEEA"), with an attached spreadsheet showing Idaho Power's
2007 reported savings. The final 2007 reported saving is 29,177 megawatt-hours. On
September 22, 2008, the Company was provided further explanation from NEEA which
is provided in the attached e-mail and supporting power point documents. These
additional documents and presentations describe NEEA's assumptions and calculation
used to obtain regional savings estimates for 2007. Idaho Power's "funder" share is
6.42 percent. This number is used to divide regional savings to obtain Idaho Power's
share of NEEA's 2007 share of regional savings. Hard copies of the e-mails are
attached and electronic versions of the spreadsheet and PowerPoints are included on
the enclosed CD.
Idaho Power has done very little analysis to determine the veracity of the
megawatt-hour savings number and the value for such savings. Through the Energy
Effciency Advisory Group ("EEAG"), Idaho Power has presented the value of being a
member of NEEA. See page 33 of Demand Side Management Annual Report, March
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 26
2005, as filed with the Commission on March 15, 2005. In June of 2008, Idaho Power
conducted a preliminary analysis of savings and cost-effectiveness of NEEA, which is
titled "An Inquiry into Savings and Cost Effectiveness of the Northwest Energy
Effciency Allance, Preliminary Analysis," which is included on the enclosed hereto.
The response to this Request was prepared under the direction of Theresa
Drake, Customer Relations and Energy Effciency Manager, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 27
REQUEST NO. 102: In response to Production Request No.1, the Company
provided a spreadsheet that indicates that in July of 2007, Idaho Power's Customer
Service Center attained a 67.94% service leveL. Please provide the reason or reasons
for the service level to fall below the goal of answering 80% of calls within 30 seconds.
RESPONSE TO REQUEST NO. 102: In July of 2007, Idaho Power's Customer
Service Center had six open Customer Service Representative positions, which
represents approximately 11 percent of our total Customer Service Representative staff.
While the open positions were the result of normal attrition within the Customer Service
Center, having six open positions at the same time is not typicaL. These positions were
filled in June, and training completed in late July. The decrease in service level during
July can be attributed to having these six open positions.
The response to this Request was prepared by Maggie Brilz, Manager, Customer
Service, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 28
REQUEST NO. 103: Please explain why Schedule 25, the Irrigation Time-Of-
Use Pilot Program, was discontinued. Include any pertinent filings to and by the
Commission.
RESPONSE TO REQUEST NO. 103: The goal of time-of-use pricing is to
reduce overall costs to the Company and its customers by shifting usage from higher-
cost time periods to lower-cost time periods. The Pilot Program's pricing structure was
only modestly successful in shifting participants' loads to lower-cost time periods. At the
same time, the reduction in overall power supply costs were even more modest.
Also, by not continuing the Pilot Program's time-of-use offering past its expiration
on September 30, 2007, it avoided additional investment in costly standard time-of-use
meters which would become obsolete upon any authorization of an AMI system. An
AMI system enables a much more effcient means for offering time-based pricing than
does a standard meter reading system.
Attached hereto is a copy of the Company's "Irrigation Service Time-of-Use Pilot
Program - Final Report" dated February 4, 2003.
The response to this Request was prepared by Jeannette Bowman, Senior
Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 29
REQUEST NO. 104: Please explain how the proposed declining block rates
during the summer for Schedule 24 adhere to the principles of cost-based pricing and
promotion of energy effciency. Provide any supporting documentation the Company
may have.
RESPONSE TO REQUEST NO.1 04: The load-factor pricing structure proposed
for Schedule 24 is markedly distinguishable from standard declining block rates. In
standard declining block rates, there is no recognition of effciency; there is only a lower
rate for each escalating block of energy. Higher-use energy customers have
increasingly lower rates for their last kWh of energy.
In contrast, the focus of load-factor pricing is to recognize effciency. The load-
factor pricing mechanism divides energy sales into two groups: one energy rate for all
kilowatt-hours up to a certain load-factor threshold and a second energy rate for all
kilowatt-hours above that leveL.
Being a large-use or small-use customer does not determine whether or not one
benefits from load-factor pricing. The only determiner is the degree of effciency. The
higher the ratio between kWh energy and kW demand, the customer is deemed more
effcient. The more effcient the customer can become, the higher the benefits of load-
factor pricing. Therefore, the right-sizing of equipment and minimizing peak demands
has benefits to both the Company and its agricultural irrigation customers.
The response to this Request was prepared by Jeannette Bowman,
Senior Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 30
REQUEST NO. 105: Please explain why proposed off-season energy rates for
Schedule 24 are 32-36% higher than on-season rates. What are the drivers for the off-
season rate and the differential?
RESPONSE TO REQUEST NO. 105: The primary reasons why the Company's
proposed energy rates are higher in the out-of-season are because there are no kW
demand charges and only minimal service charges assessed during that time period.
The preponderance of the Company's revenue requirement for the out-of-season
months are all attained through the energy charge.
Ms. Bowman's workpapers in the Company's general rate case filing ilustrate
how each cost component, in both the in-season and out-of-season, was moved
approximately 7 percent closer to cost-of-service.
The response to this Request was prepared by Jeannette Bowman, Senior
Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 31
REQUEST NO.1 06: Why has the Company decided not to propose tiered rates
for Schedule 24 in off-season months while proposing such for virtually all other
customer classes?
RESPONSE TO REQUEST NO. 106: The agricultural irrigation customer class
has unique characteristics that set it in stark contrast with all the other customer classes
for which the Company is proposing off-season tiered rates. First of all, only 17 percent
of Schedule 24 energy usage is utilized in the out-of-season months. This is vastly
dissimilar from all the other customer classes which have a majority of their energy
utilized during the non-summer months. Secondly, usage during this period is primarily
for moving and/or testing equipment either at the beginning or the end of the customer's
irrigation year. For these reasons, a tiered rate design in the out-of-season months wil
not provide a meaningful price signal nor encourage smaller usage among these
customers.
The response to this Request was prepared by Jeannette Bowman, Senior
Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 32
REQUEST NO. 107: Why did the Company decide to leave the first block of
energy at 0-300 kWh for Schedule 7 customers instead of raising it to 0-600 kWh as it
did for the residential classes? Please provide any supporting documentation.
RESPONSE TO REQUEST NO. 107: Idaho Power examined whether to
increase the Schedule 7 first block from 300 to 600 kWh but could find no justification.
First of all, the average monthly usage for customers on Schedule 7 is just over 500
kWhs (Nemnich testimony page 8) as compared to Schedule 1 average monthly usage
of 1,065 kWhs (Waites testimony page 10). Offering the first block over the average
would not provide a broad energy effciency message to most customers - which is the
primary purpose of this block rate. Secondly, part of the justification for moving the first
Schedule 1 block rate to 600 kWhs is to set it at 60 percent of average monthly usage
and set a baseline load usage. For Schedule 7, the block rate at 300 kWhs is currently
at 60 percent of the average monthly usage of just over 500 kWhs. Schedule 1 is a
more homogeneous class of customers as compared to Schedule 7 which makes
setting a typical baseline for Schedule 7 customers less meaningfuL. The characteristics
of customers on Schedule 7 are quite variable; some customers only operate for a few
months of the year (Christmas tree lots, for example) and some are more flat year
around (a cattle feedlot, for example) so setting a baseline based on basic electric
usage is problematic. And, finally, the Schedule 7 bil frequency analysis for 2007,
provided in response to IPUC Staff Request No. 42, shows a logical separation at 300
kWh usage and below, where almost 50 percent of the bils and 38 percent of the kWhs
occur below this block. These customer usage patterns support maintaining the first
block at 300 kWhs.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 33
The response to this Request was prepared by Darlene Nemnich, Senior Pricing
Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 34
REQUEST NO. 108: How did the Company determine the rate differentials for
on-Ioff-/mid-peak prices for Schedule 5? Does the Company believe these rates
accurately reflect the cost to serve during the time periods? Does the Company truly
believe the 'relationships between the on-, Mid-, and Off -Peak periods' (Waites, p. 17)
have not changed since the advent of the program (since the differentials did not
change in the last general rate case)? Why or why not?
RESPONSE TO REQUEST NO. 108: Please see Idaho Power's response to
Staffs production request No. 40 for the history of how the rate differentials for the on-,
mid-, and off-peak rates were set and how they've evolved since initially implemented.
In Order No. 30037, the Commission approved a rate differential of 36 percent between
the on- and mid-peak and 85 percent between the on- and off-peak rates. Ms. Waites
was directed to leave the differentials between the on-, mid-, and off-peak rates the
same when designing residential rates proposed in this proceeding.
The Company currently has approximately 80 customers participating in the
Time-of-Day program, which accounts for approximately $80,000 of current revenues.
The Company did not perform any analyses to determine whether the proposed time
block rates are accurately reflecting the actual cost to serve Schedule 5 customers
during theses specific time periods. As mentioned in Ms. Waites' testimony, the
proposal does not make any changes to the summer rate design; the proposal simply
increases each of the summer Energy Charges 6.31 percent, which is equal to the
overall percentage increase for the residential class. Likewise, no analyses were
performed to determine whether the relationship between the on-, mid-, and off-peak
periods has changed.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 35
The response to this Request was prepared by Courtney Waites, Pricing Analyst,
Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power
Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 36
REQUEST NO.1 09: Many of the Excel work files for rate design have links to a
worksheet entitled "Charges by Component", with a link address of '1:\Mary M\2008
General Rate Case\Worksheets base to new base\(Charges by Component.xls)'.
Please provide this workbook, in executable format, and any other workbooks that are
linked to it.
RESPONSE TO REQUEST NO. 109: The requested file '1:\Mary M\2008
General Rate Case\Worksheets base to new base\(Charges by Component.xls)' is
provided on the enclosed CD. All linked files have been previously provided.
The response to this Request was prepared by Jeannette Bowman, Pricing
Analyst II, Idaho Power Company in consultation with Barton L. Kline, Lead Counsel,
Idaho Power Company.
DATED at Boise, Idaho, this 3rd day of October 2008.
~~(l1k~
LISA D. NORDST M
Attorney for Idaho Power Company
BARTON L. KLINE
Attorney for Idaho Power Company
DONOVAN E. WALKER
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 37
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 3rd day of October 2008 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH
PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER
COMPANY upon the following named parties by the method indicated below, and
addressed to the following:
Commission Staff
Weldon B. Stutzman
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
Neil Price
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
Industrial Customers of Idaho Power
Peter J. Richardson, Esq.
RICHARDSON & O'LEARY PLLC
515 North 27th Street
P.O. Box 7218
Boise, Idaho 83702
Dr. Don Reading
Ben Johnson Associates
6070 Hil Road
Boise, Idaho 83703
Idaho Irrigation Pumpers
Association, Inc.
Randall C. Budge
Eric L. Olsen
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
P.O. Box 1391
201 East Center
Pocatello, Idaho 83204-1391
-2 Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email Weldon.stutzmancapuc.idaho.gov
-2 Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email Neil.pricecapuc.idaho.gov
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email petercarichardsonandoleary.com
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email dreadingcamindspring.com
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email rcbcaracinelaw.net
elocaracinelaw.net
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 38
Anthony Yankel
Yankel & Associates, Inc.
29814 Lake Road
Bay Vilage, Ohio 44140
Kroger Co. I Fred Meyer and Smiths
Michael L. Kurt
Kurt J. Boehm
BOEHM, KURTZ & LOWRY
36 East Seventh Street, Suite 1510
Cincinnati, Ohio 45202
The Kroger Co.
Attn: Corporate Energy Manager (G09)
1014 Vine Street
Cincinnati, Ohio 45202
Kevin Higgins
Energy Strategies, LLC
Parkside Towers
215 South State Street, Suite 200
Salt Lake City, Utah 84111
Micron Technology
Conley Ward
Michael C. Creamer
GIVENS PURSLEY, LLP
601 West Bannock Street
P.O. Box 2720
Boise, Idaho 83701-2720
Dennis E. Peseau, Ph.D.
Utility Resources, Inc.
1500 Libert Street SE, Suite 250
Salem, Oregon 97302
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email tony(âyankel.net
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email mkurt(âBKLlawfrm.com
kboehm((BKLlawfrm.com
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
Email
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email khiggins(âenergystrat.com
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email cew(âgivenspursley.com
mcc((givenspursley.com
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email dennvtemp(âyahoo.com
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 39
Departent of Energy
Lot R. Cooke
Arthur Perr Bruder
Offce of the General Counsel
United States Department of Energy
1000 Independence Avenue SW
Washington, DC 20585
Routing Symbol GC-76
Dwight D. Etheridge
Exeter Associates, Inc.
5565 Sterrett Place, Suite 310
Columbia, MD 21044
Hand Delivered
U.S. Mail
-. Overnight Mail
FAX
-. Email Lot.Cookecæhg.doe.gov
Arthur.Brudercæhg.doe.gov
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email detheridgeceexeterassociates.com
Community Action Partership
Association Of Idaho
Brad M. Purdy
Attorney at Law
2019 North 17th Street
Boise, Idaho 83702
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email bmpurdy~hotmail.com
Snake River Allance
Ken Miler
Snake River Allance
P.O. Box 1731
Boise, Idaho 83701
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email kmiler((snakeriverallance.org
éi~lJ,~~iš NordstrÒ"
IDAHO POWER COMPANY'S RESPONSE TO THE SIXTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 40
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-10
IDAHO POWER COMPANY
RESPONSE TO STAFF'S
PRODUCTION REQUEST NO. 101
Page 1 of 1
Pengily, Pete
From: Christine Jerko (CJerko(§nwallance.org)
Sent: Friday, June 20,20085:51 PM
To: Pengilly, Pete
Subject: Idaho Power share of 2007 NEEA savings
Attachments: Final 2007 Annual Savings_ldahoPwr.xls
Attached is a spreadsheet showing Idaho Power's funder share of NEEA's 2007 reported savings by program. We
present Regional savings disaggregated into Baseline savings, Local Incentive savings, and Net Market Effects Savings.
Baseline savings are those estimated to have occurred in the absense of utilty programs, conservation partner programs,
and NEEA activities. Local incentives are savings that resulted from utilty or conservation partner activities, such as
rebate programs. Net Market Effects are calculated as Regional savings minus Baseline and minus Local Incentives.
Please, let me know if you have any questions.
Christine
.(..~ NORTHWEST
=__ ENERGY EFFICIENCY
,., ALLIANCE
Christine Jerko
Senior Planning Analyst
Northwest Energy Effciency Allance
529 SW Third Avenue, Suite 600, Portland, OR 97204
503-827-8416 ext. 256 www.nwallance.org
10/3/2008
IPUC Staff Data Request Page 1 of 2
Pengily, Pete
From: Christine Jerko (CJerko(§nwaliance.org)
Sent: Monday, September 22,2008 1 :48 PM
To: Pengily, Pete
Subject: RE: IPUC Staff Data Request
Attachments: MatrixesResidential2007 Assum&Savings_051608v3.ppt;
MatrixesComm Ind2007 Assum_053008_ v2.ppt
Hi Pete,
I've attached the power point presentations of assumption matrices which I presented to the CE committee showing the
major assumptions/assumption changes for 2008. There is no one overall word documentation on 2008 assumption
changes. Also, there are the LTMT reports which evaluate (on an ongoing basis) are projects which are no longer funded.
The MPERs evaluate our currently funded projects. We don't not have every project evaluated every year as it is too
costly, but I could send the most recent, if you would like. Additionally, i have more lengthly project/model documentation
for each modeL. Let me know if you need more than the power point.
Thanks,
Christine
From: Pengily, Pete (mailto:PPengilIY(Qidahopower.com)
Sent: Monday, September 22,200811:53 AM
To: Christine Jerko
Cc: Karen Horkitz; Jeff Harris
Subject: ¡PUC Staff Data Request
Christine,
As part of our current rate case in front of the Idaho Commission we have received this production request. Would it be
possible for you to provide some explanation for: Please provide the assumptions and calculations NEEA
used to estimate that savings number
Brief is good...it doesn't have to be a long explanation.... I thought that perhaps you already have an written explanation
of your method/assumptions etc. Any help would be greatly appreciated. These are due on October 3rd and our internal
deadline is next Monday Sept. 29th.
Feel free to call if we need to discuss this further.
REQUEST NO. 101:
On page 12 of Theresa Drake s pre-filed testimony is the statement
that "NEEA estimated that 28 601 megawatt-hours were saved in the Company s service territory
in 2007." Please provide the assumptions and calculations NEEA used to estimate that savings
number and any Idaho Power analyses of the veracity of that megawatt-hour savings number and
the value of such savings.
Pete Pengilly
Idaho Power Company
208-388-2281
ppengilly (§ idahopower.com
- - - - - - - - - - - - -- - ~ - - - -- - - - - - - - - - - - - - - ~ - -- - - - - - - - - - - - - - - - ~ - - - - - - - - - - - - - -- - - - - -- --
10/3/2008
IPUC Staff Data Request Page 2of2
This transmission may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you
are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, or use of the information contained
herein (including any reliance thereon) is STRICTLY PROHIITED. If you received this transmission in error, please immediately
contact the sender and destroy the material in its entirety, whether in electronic or hard copy format. Thank you.
= = = = = = = = = = = = = == = = == = = = = = = = == = = = = = = = == = = = = == = = = = = = = = = = = = = = ==== = = = = = = = = == = = == = = =
"EMF ..idahopower. com)." made the previous annotations.
10/312008
BEFORE THE
.
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-10
IDAHO POWER COMPANY
RESPONSE TO STAFF'S
PRODUCTION REQUEST NO.1 03
~IDA.~POR
An IDACORP Company
IDAHO POWER COMPANY
P.O. BOX 70
BOISE, IDAHO 83707
MAGGIE BRILZ [phone]
FAX [phone]
mbrilz~ idahoower.comDirector, Pricing
February 4, 2003
Ms. Jean D. Jewell, Secretary
Idaho.Public Utilties Commission
P. O. Box 83720
Boise,ID 83720-0074
RE: Final Report regarding the
Irrigation Service Time-of-Use Pilot Program
Per Order No. 28706
Dear Ms. Jewell:
The Commission's Order No. 28706 approving the Company's Irrigation
Service Time-of-Use Pilot Program directed Idaho Power to report to the commission
regarding the operation of the program and its results. Enclosed are seven copies of the
Company's final report on the two-year Pilot Program. If you have any questions, please
feel free to contact me.
Sincerely,
.7n~-Ó+
Maggie Brilz
MB:mb
Enclosure
c: Ric Gale
)
)
)
Øi=R
An IDACORP company
IRRIGATION SERVICE
TIME-OF-USE PilOT PROGRAM
Final Report
February 4, 2003
) Background
On February 21, 2001 Idaho Power Company filed with the Idaho Public Utilties
Commission a request to implement a Time-of-Use Pilot Program to allow irrigation customers
to take electric service at time-of-use energy rates under Schedule 25, Irrigation Service
Optional Time-of-Use Pilot Program. The Pilot Program was one of several steps taken by the
Company during the Western Energy Crisis which targeted load reduction.. The purpose of the
Pilot Program was to provide Idaho Power, the customers of Idaho Power, and the
Commission with the information necessary to evaluate the impacts and benefits of time-of-use
(TaU) pricing of electric service for irrigation customers.
The major provisions of the Pilot Program, which was approved by the Commission in
Order No. 28706, are:
. The irrigation season is defined by fixed dates rather than by meter reading dates and is
the time period June 1 through September 30.
Three time-of-use periods are defined during the irrigation season. They are:
)
Mid-Peak
On-Peak
Off-Peak
9:00 am - 1 :00 pm
1 :00 pm - 9:00 pm
9:00 pm - 9:00 am
These time periods are utilzed throughout each day of the irrigation season, including
weekends and holidays.
. The base energy rates for the three time-of-use periods are:
Mid-Peak
On-Peak
Off-Peak
2.8416 cents/kWh
4.9728 cents/kWh
1.4208 cents/kWh
The base energy rate for usage outside of the irrigation season is the same as the out-
of-season base energy rate for the Company's standard irrigation service, Schedule 24.
The in-season mid-peak base energy rate is the same energy rate as for in-season
energy use under the Company's standard irrigation service, Schedule 24.
. Enrollment in the Pilot Program is limited to 300 metered service points.
. The Pilot Program is not available to new participants after October 1 ,2002. However,
customers enrolled in the Program on that date may voluntarily continue to receive
irrigation service under Schedule 25 for their enrolled metered service points until
October 1,2007.
)
1
Two-Year Pilot Participation Results
The two-year data gathering period for the Pilot Program has concluded and the
Company is reporting to the Commission its information regarding the Program and its results.
The Company has reviewed the usage information available for the Pilot Program participants
for the 2001 and 2002 irrigation seasons. In addition, the Company has reviewed the market
price data for the months of June through September for 2001 and 2002, in order determine
what, if any, impact on purchase power expenses the Pilot Program may have had.
Number of Participants
During the 2001 irrigation season, 180 metered service points were enrolled in the Pilot
Program. In August 2001 a letter was sent to each participant explaining that all metered
service points currently enrolled in the Pilot Program would automatically continue to be
enrolled for the 2002 irrigation season unless the customer specifically requested a service
point be removed from the Pilot Program. Of those original 180 metered service points, 21
chose to be removed from the Pilot Program.
Customers that chose to remove service points from the Pilot Program did so for a
variety of reasons. However, the primary reasons claimed were because (1) of changes in
crops for which irrigating around the time-of-use blocks was not compatible, or (2) the benefits
associated with bil impacts of the time-of-use pricing did not warrant the necessary operational
changes.
One of the reasons given by the participants for beginning or continuing participation in
the Pilot Program was the speculation there could be a wet spring accompanied by a cool
summer that would allow taking advantage of scheduling irrigation usage around the most
advantageous time-of-use blocks. The Company is aware of approximately 11 participants
who made capital investments that improved their utilzation of a time-of-use option. However,
it is not clear how many of those investments would still have been made even without the
Program's inducements. Stil others felt they could benefit from TOU rates in a year they
would only be irrigating a portion of the land and thereby would not have to operate a pump as
they normally would.
During the 2002 irrigation season, 228 metered service points were enrolled in the Pilot
Program: 159 carried forward from 2001 plus 69 new enrollments.
Purchase Power Cosæ
Market energy prices in irrigation year 2000 were extremely high. These high prices
continued into the winter of 2000 - 2001. There were some instances when the average MWh
monthly Mid-Columbia price was over $280. The Pilot Program, which was designed during
this period of high market prices, was intended to reduce costs to both the Company and its
customers. The large variance between on-peak and off-peak market prices during 2000 and
early 2001 enabled the Company to cost justify a 50% discount from the standard irrigation
rate to encourage customers to shift energy usage to off-peak time periods. In contrast to the
2
)market prices of 2000 and early 2001, the market prices during the 2001 and 2002 irrigation
seasons were not as high nor were the variances between on-peak and off-peak prices as
great.
Irrigation Irrigation Irrigation Summer 2003-2007
Year 2000 Year 2001 Year 2002 Forward Mid-C
Average Price (per MWh):
On-Peak 171.0 52.4 17.7 42.4
Mid-Peak 122.6 44.2 17.2 41.1
Off-Peak 84.2 38.2 12.5 29.9
24-Hr Average 119.5 43.9 15.0 35.9
On/Off Differential 86.8 14.2 5.2 12.5
Looking ahead, the summer 2003-2007 Mid-Columbia forward prices have an estimated
on-peak and off-peak average MWh price of $42.42 and $29.93, respectively. Therefore, the
summer 2003-2007 average prices and differential between average on-peak and off-peak
prices are expected to remain relatively low.
Load Shifting
The typical energy usage pattern for all irrigation customers in 1999 and 2000 during
the time-of-use time periods established for the Pilot Program was:
On-Peak
Mid-Peak
Off-Peak
34%
17%
49%
Even though the Company has no specific time-of-use information on the Pilot Program
participants prior to their participation in the Pilot Program, it is assumed their usage was
typical of the irrigation class as a whole. If this assumption is correct, Pilot Program
participants did shift their energy usage from the on-peak to the off-peak period during the
2001 and 2002 irrigation seasons. The shift in usage from the on-peak to the off-peak period,
however, was less during the second year of the Pilot Program than during the first year of the'
Pilot Program.
2001 2002
Usage % Shift Usage % Shift
On-Peak 23.0%(11%)27.6%(7%)
Mid-Peak 17.4%0%15.8%(1%)
Off-Peak 59.6%11%56.6%8%
The 2001 irrigation time-of-use total energy usage was 28,295,648 kWh. The 2002
irrigation time-of-use total energy usage was 70,569,448 kWh. If the previous years' usage
ratios for the time-of-use periods were applied to the total actual 2001 and 2002 participant
usage, it would indicate the following energy shifting tendency:
)
3
)2001 2002
kWh Allocated kWh Allocated
By Typical Actual TOU By Typical Actual TOU
Usage Ratios kWh Usage Ratios kWh
On Peak 9,620,520 6,517,456 23,993,612 19,479,929
Mid-Peak 4,810,260 4,912,744 11,996,806 11,124,807
Off-Peak 13,864,868 16,865,448 34,579,030 39,964,712
Total 28,295,648 28,295,648 70,569,448 70,569,448
Purchase Power Cost Savings
For the 2001 irrigation year, purchase power costs for participating Pilot Program
customers are estimated to be $1,272,092 based on hourly market energy prices1 for June
through September 2001. If the Pilot Program participants had maintained their typical usage
pattern, the purchase power costs would have been approximately $1,320,781, again based
on the hourly market energy prices for 2001. Therefore shifting energy usage from higher-cost
to lower-cost time periods reduced purchase power costs during the 2001 irrigation season by
approximately $48,689.
)
For the 2002 irrigation year, purchase power costs for participating Pilot Program
customers are estimated to be $965,917 based on hourly market energy prices for June
through September 2002. If the Pilot Program participants had maintained their typical usage
pattern, the purchase power costs would have been approximately $991,878. Therefore
shifting energy usage from higher-cost to lower-cost time periods reduced purchase power
costs during the 2002 irrigation season by approximately $25,962.
Purchased Power Costs
Typical Usage Pattern
Time-of-Use Usage Pattern
Reduced Purchased Power Costs
2001
$1,320,781
1,272,092
$ 48,689
2002
$991,878
965,917
$ 25,962
Pilot Program Energy Charges
In 2001, the energy charges for Pilot Program participants during the June through
September in-season period were $703,325. If the Pilot Program customers had been
charged the same flat rate as other non-participating irrigation consumers during this same
time period, energy charges would have been $804,049. Shifting energy from the on-peak
period to the off-peak period resulted in reduced billngs to Pilot Program participants totaling
$100,724. Correspondingly, the Company's revenues were also decreased $100,724.
)
1 Hourly prices were established by using actual Idaho Power Company hourly real-time transaction price data
supplemented by Mid C hourly or hlh (heavy load hours)/lIh (light load hours) data for hours during which Idaho
Power transactions did not take place. The price for each hour of the month was indexed to the monthly average
and then the average index for each of the twenty-four hours was computed. A monthly average price in dollars
per MWh, weighted by hours of peak and off-peak, was calculated. This single monthly price was then multiplied
by the ratio for each hour creating an hourly price curve for each month.
4
In 2002, the energy charges for Pilot Program participants during the June through
September in-season period were $1,852,639. If the Pilot Program customers had been
charged the same flat rate as other non-participating irrigation consumers during this same
time period, energy charges would have been $2,005,301. Shifting energy from the on-peak
period to the off-peak period resulted in reduced bilings to Pilot Program participants totaling
$152,662. Correspondingly, the Company's revenues were also decreased $152,662.
Energy Charges
Flat I rrigation Rates
Time-of-Use Rates
Reduced Energy Bills
2001
$804,049
703,325
$100,724
2002
$2,005,301
1,852,639
$ 152,662
TOU Pilot Program Benefits / (Losses)
The real benefit from time-of-use programs is the reduction in purchase power costs
that result when usage is shifted from a higher-price to a lower-price time period. Sustained
cost reductions will lead to a reduced revenue requirement and, correspondingly, the cost
savings wil flow through to the Company's customers. The Commission also anticipated
these fundamental TOU benefits when it authorized the Pilot Program in Order No. 28706
which stated, "Creating a time of use service offering results in customers paying for usage at
rates that more closely match the cost of providing service."
However, as the data above ilustrates, there is a mismatch under the current Program
structure between the customers' bil reductions and the corresponding reduction in purchase
power costs. The Pilot Program reduced purchase power costs in 2001 and 2002 by
approximately $48,689 and $25,962, respectively. Therefore it is apparent the customers' bill
reductions in 2001 and 2002 of $100,724 and $152,662 is clearly linked to the rate design, not
the actual cost savings.
Under the current time-of-use rate structure, reduced customer bils have exceeded
reduced costs each year. Because of this mismatch, the Company's revenue requirement was
not reduced; it became greater.
Individual Customer Impacts
In order to benefit from the Pilot Program, it is necessary for a Customer with a typical
irrigation load pattern to shift usage from a higher-price time period to a lower-price time
period. Unless a Customer's original usage pattern was already skewed to lower-price time
periods and maintained throughout their participation in the Pilot, simply enrollng in the Pilot
Program would not guarantee benefits.
Comparing the energy charges the Customers would have paid if they had been biled
the Company's regular (non-TOU) irrigation rates, the impacts on the self-selected, voluntary
Pilot Program participants were as follows:
Negative (TOU kWh Bils Larger)
No Impact
Positive (TOU kWh Bils Smaller)
2001
34 18.9%
1 0.5%
145 80.6%
2002
66 28.9%
2 0.9%
160 70.2%
5
\
)Among those Customers receiving a positive energy charge benefit, the range of the
energy benefits are further subdivided as follows:
2001 2002
Less than $100 32 17.8%59 25.9%
$101 - $500 62 34.4%53 23.2%
$501 - $1000 30 16.7%23 10.1%
Above $1000 21 11.7%25 11.0%
The above analysis is a comparison of the benefits/losses related to TOU energy
charges, exclusively. Only two participants appear to have increased their kW demand in
order to take advantage of TOU energy pricing. However, if any increased demands or the
TOU metering charges were included in the analysis, the financial benefits to Pilot Program
participants would be smaller.
Summary
The goal of time-of-use pricing is to reduce overall costs to Idaho Power Company and
its customers by shifting usage from higher-cost time periods to lower-cost time periods. While
the Company's Irrigation Time-of-Use Pilot Program was successful in shifting some load to
lower-cost time periods, the reduction in overall power supply costs was modest.
The current rate design results in reduced customer bills which exceed reduced
purchased power costs. Without fundamental changes to the rate design, the principal results
of the time-of-use program are:
. Only time-of-use participants have the potential to benefit
. The Company's revenue requirement is increasing since the bil reductions to
customers are greater than the reduction in power supply costs
. Future bils to all customers (both participating and non-participating) wil
increase
In order to align the reduced bil benefits to customers with the reduction in power
supply costs such that the Company's overall revenue requirement does not increase, the
Company intends to file with the Commission a revision to the pricing under Schedule 25. The
proposed pricing wil be consistent with expected market prices and wil strive to match
expected cost reductions with customer bil reduction benefits.
In its Reply Comments in Case No. IPC-E-02-12 (the investigation of time-of-use pricing
for Idaho Power residential customers), the Company clearly stated its intent to pursue the
implementation of an automated meter reading (AMR) system in the near future. Utilization of
6
an AMR system enables a much more efficient means for offering time-based pricing than
does a standard meter. reading system. The Company believes it is reasonable to limit
participation in time-of-use pricing for irrigation service to those customers who were enrolled
in the Pilot Program as of October 1, 2002 and who choose to continue their participation.
Information obtained from customers who choose to continue their participation in time-of-use
pricing, particularly with prices that match customer benefits with cost reductions, wil be
valuable in assessing further steps related to time-of-use pricing. In addition, limiting
participation to those metered service points operated by current Pilot Program customers wil
avoid additional investment in standard time-of-use meters.
7