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Home My WebLink About20081016IPC to Staff 89, 100.pdfRECEIVED 1SIDA~POR~ BARTON L. KLINE Lead Counsel An IDACORP Company October 15, 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 Third Supplemental Response to the Sixth Production Request of the Commission Staff. In addition, also enclosed are four copies of a CD containing the Company's response to production in which an electronic file has been provided. 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,!t~j/~ti Barton L. Kline Lead Counsel for Idaho Power Company BLK:csb Enclosures P.O. Box 70 (83707) 1221 W. Idaho St. Boise, ID 83702 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: (208) 388-2682 Facsimile: (208) 388-6936 bkline((idahopower.com Inordstrom((idahopower.com dwalker((idahopower.com Attorneys for Idaho Power Company Street Address for Express Mail: 1221 West Idaho Street Boise, Idaho 83702 RECE rii.J' 2008 OCT I 5 PH 5: 0 I 10' At/V.. p. .UH'1 ,"It :; 1;1 ¡ '. . 1 'w tl~. ~,,,,r UTILITIES COMM SSiON BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER 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 ) THIRD SUPPLEMENTAL RESPONSE TO ) THE SIXTH PRODUCTION REQUEST OF ) THE COMMISSION STAFF TO IDAHO ) POWER COMPANY ) COMES NOW, Idaho Power Company ("Idaho Powet' or "the Company"), and in supplemental 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 THIRD SUPPLEMENTAL RESPONSE TO THE SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1 SUPPLEMENTAL REQUEST NO. 89: In IPC-E-08-10, Idaho Power's Second Supplemental response to staffs P.R. 89 included a CD containing much of the DSM program cost breakout requested. Included in the cost breakout for NEEA are "Incentives" totaling $4.7 millon (99% of total NEEA costs). Please define "Incentives" and explain how the "Incentive" amounts were determined. Also, the total NEEA costs shown for 2005-2007 are less than Idaho Power's total NEEA obligation, with the approximate $1.6 millon excluded obligations presumably satisfied by Idaho Power's positive account balance with NEEA. How should those costs be distributed amongst the five listed categories? SUPPLEMENTAL RESPONSE TO REQUEST NO. 89: The Northwest Energy Effciency Allance ("NEEA") expenses labeled "Incentives" are the direct payments made to NEEA as part of Idaho Power's contractual funding agreement. The payments are recorded as "Incentives" since Idaho Power reports energy savings associated for its share of NEEA's regional market transformation savings. It is unknown how NEEA distributes those payments amongst the five listed categories. As stated in the 2007 Demand-Side Management Annual Report on page 40: "In 2005, IPC began the first year of the 2005-2009 contract and funding agreement with NEEA. Per this agreement, IPC committed to fund $1,300,000 annually in support of NEEA's implementation of market transformation programs in Idaho Power's service area." Due to a true-up of the 2000-2004 agreement, a credit of $2,115,153 was given to Idaho Power and is being applied to each invoice of the 2005-2009 agreement. The credit is held at NEEA and the remaining credit wil be applied each quarter through the IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2 end of 2009. As a result of this credit and interest on the current funds held, Idaho Power pays approximately $230,000 each quarter to NEEA. The payment of each invoice is allocated 95%/5% between the Idaho and Oregon Energy Effciency Riders. For a breakdown of Idaho Powets NEEA payments and credits, please see the Excel file on the attached CD. In this spreadsheet, the quarterly obligations, credit, and balance paid is broken out as well as the Idaho allocation of these expenses. Please note that the "Idaho Quarterly Balance Paid (Running total of the year)" wil match the "Incentives" total listed in the Company's response to Staffs Request No. 89 with the exception of 2007. As noted in the 2007 Annual Report on page 53 footnote (b), "The first quarter invoice for the IPC 2008 contractual obligation to NEEA was processed in December 2007 with the amount scheduled to be amortized over the first quarter." The interest credit of $14,781.00 was immediately recognized in 2007. In preparation of the supplemental response to Staffs Request No. 89, it was discovered that the Idaho Power NEEA expenses reported for 2003 and 2004 included Oregon's allocation of expense. The actual Idaho allocations are included in the table below: NEEA 2003 Labor 12,819 12,819 Materials Purchase Services 70 70 Incentives 4,032 4,032 1,217,590 1,217,590 Other Ex enses 2003 Total 1,234,511 1,234,511 IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3 Idaho Program Year Expense Type Rider IPC Total 2004 Labor -6,658 6,658 Materials --- Purchase Services --- Other Expenses -4,572 4,572 Incentives -1,188,774 1,188,774 2004 Total -1,200,004 1,200,004 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 THIRD SUPPLEMENTAL RESPONSE TO THE SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 4 SUPPLEMENTAL REQUEST NO. 100: In IPC-E-08-10, Idaho Power's response to P.R. 16 included "Workfle" job descriptions for Energy Effciency Program Leader and for Customer Research & Analysis Leader, both of which include the following sentence: "Pursues overall DSM objectives ... to acquire, in the most cost- effective manner, demand-side resources that wil keep Idaho Power production costs as low as possible." Idaho Power's response to P.R. 100 did not answer one of the questions asked, i.e. "does the Company evaluate program success based on possible alternative demand-side costs?" In other words, does Idaho Power evaluate whether it has achieved the most cost-effective DSM alternative? If so, as asked in P.R. 100, please provide documented examples. SUPPLEMENTAL RESPONSE TO REQUEST NO. 100: Idaho Power does evaluate programs based on possible alternative demand-side costs. However, as stated in the Response to Staffs Request No. 100, it is only one of several considerations used to measure the success of energy effciency or demand response programs. Idaho Power also considers whether these programs have a customer focus, if they are equitably distributed between customer groups, and if they are earnings neutral. Idaho Power does not evaluate energy effciency or demand response programs exclusively based on which is the most cost effective. As stated in the Response to Staffs Request No. 100, Idaho Power has published its criteria for evaluating or offering DSM programs in numerous publications including Integrated Resource Plans ("IRP") and Demand-Side Management ("DSM") Annual Reports. Idaho Power offers energy effciency and/or demand response programs to all customer sectors. By offering comprehensive energy effciency and demand response IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5 programs to all customer sectors, Idaho Power believes it is consistent with Commission Order No. 28722 in which the Commission states that it agrees that "basic fairness demands that all rate classes be afforded the opportunity to enjoy the benefits of guided conservation and effciency improvements." The Commission has also supported increasing costs of programs, thus decreasing the cost effectiveness, in order to maintain customer satisfaction. For example, in IPUC Order No. 29207 under Commission Discussion and Findings, the order states: Both the NW Energy Coalition and Staff recommended that the Commission increase the monetary incentive offered to customers who participate in the Program. Given the limited number of participants and the potential customer inconvenience that may result by volunteering for the Program, the Commission finds that it is reasonable to raise the monetary incentive for those who participate from $5 to $10 per month. We believe that doing so wil result in a more enthusiastic customer response while only marginally increasing Program costs. Through the Energy Effciency Advisor Group ("EEAG") process Idaho Power solicits input on development of DSM programs as well as the on-going transformation of these programs. The EEAG considers the costs and benefis of these programs and the effects of customer satisfaction and acceptance. For example, in the most recent EEAG meeting, a proposed new energy effciency program was presented with two different options for deployment. Pre-implementation analysis showed that both programs were cost effective. The EEAG, as a group, supported the option that was least cost-effective because of issues surrounding documented energy savings and customer service and acceptance. IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 6 During the IRP planning process, Idaho Power compares program costs and benefits between programs and with supply-side resources. As shown in the 2004 IRP in Figures 13 and 14 on page 50, the DSM resources are compared on a levelized cost basis to each other as well as supply-side resources. In the 2006 IRP, in Figure 5-1 on page 46 and Figure 5-2 on page 47, DSM resources are compared along with supply- side resources on a levelized cost basis. 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. DATED at Boise, Idaho, this 15th day of 000 ~ BARTON L. KLINE Attorney for Idaho Power Company LISA D. NORDSTROM Attorney for Idaho Power Company DONOVAN E. WALKER Attorney for Idaho Power Company IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 7 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 15th day of October 2008 I served a true and correct copy of IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL 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 Attomey General Idaho Public Utilities Commission 472 West Washington P.O. Box 83720 Boise, Idaho 83720-0074 Neil Price Deputy Attorney General Idaho Public Utilties 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 2th 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 EricL Olsen RACINE, OLSON, NYE, BUDGE & BAILEY, CHARTERED P.O. Box 1391 201 East Center Pocatello, Idaho 83204-1391 -l Hand Delivered U.S. Mail _ Overnight Mail FAX -l Email Weldon.stutzman((puc.idaho.gov -l Hand Delivered U.S. Mail _ Overnight Mail FAX -l Email Neil.price((puc.idaho.gov Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email peter((richardsonandoleary.com Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email dreading((mindspring.com Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email rcb((racinelaw.net elo((racinelaw. net IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 8 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 -l U.S. Mail _ Overnight Mail FAX -l Email tony((yankel.net Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email mkurt((BKLlawfirm.com kboehm((BKLlawfirm .com Hand Delivered -l U.S. Mail _ Overnight Mail FAX Email Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email khiggins((energystrat.com Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email cew((givenspursley.com mcc((givenspursley.com Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email dennvtemp((yahoo.com IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 9 Department 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 Community Action Partnership Association Of Idaho Brad M. Purdy Attorney at Law 2019 North 1 th Street Boise, Idaho 83702 Snake River Allance Ken Miler Snake River Allance P.O. Box 1731 Boise, Idaho 83701 Hand Delivered U.S. Mail -l Overnight Mail FAX -l Email Lot.Cooke((hg.doe.gov Arthur. Bruder((hg .doe.gov Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email detheridge((exeterassociates.com Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email bmpurdy((hotmail.com Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email kmiler((snakeriverallance.org Jl~ Barton L. Kline IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 10