20100827IPC to Staff 1-5.pdf

REeE r"~esIDA~POR~
An IDACORP Company
LISA D. NORDSTROM
Lead Counsel
InordstromØiidahopower.com
August 27, 2010
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-10-09
IN THE MATTER OF IDAHO POWER COMPANY'S APPLICATION FOR
AN ORDER DESIGNA TlNG THE ENERGY EFFICIENCY RIDER FUNDS
SPENT BY THE COMPANY DURING 2008-2009 AS PRUDENTLY
INCURRED EXPENSES
Dear Ms. Jewell:
Enclosed for filng please find an original and three (3) copies of Idaho Power
Company's Response to the First Production Request of the Commission Staff to Idaho
Power Company in the above matter.
Very truly yours,£-lJe,~
Lisa D. Nordstrom
LDN:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise. ID 83707
LISA D. NORDSTROM (ISB No. 5733)
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
InordstromCâidahopower.com
dwalkerCâidahopower.com
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
RECE
211nAUG 21 Pt1li: 01
tDß\~lOi iTill"~::~v .. i 1\..-.;
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR AN
ORDER DESIGNATING THE ENERGY
EFFICIENCY RIDER FUNDS SPENT BY
THE COMPANY DURING 2008-2009 AS
PRUDENTLY INCURRED EXPENSES.
)
) CASE NO. IPC-E-10-09
)
) IDAHO POWER COMPANY'S
) RESPONSE TO THE FIRST
) PRODUCTION REQUEST OF THE
) COMMISSION STAFF TO IDAHO
) POWER COMPANY
)
COMES NOW, Idaho Power Company ("Idaho Powet' or "Company"), ,and in
response to the First Production Request of the Commission Staff to Idaho Power
Company dated August 9, 2010, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1
REQUEST NO.1: Given the Company's close contact with Commercial and
Industrial customers in its service terrtory, why did the Company choose to outsource
the administration and implementation of the FLEX PEAK MANAGEMENT program?
Please explain.
RESPONSE TO REQUEST NO.1: Idaho Power considered whether it would be
better to create and implement this program in-house or to work with a third-party
aggregator. The Company recognized the benefit of contracting with a third-part
aggregator, which would combine the Company's customer relationships and program
experience with a third part's commercial and industrial demand-reduction expertise.
To penetrate the medium to large commercial industry and to achieve moderate
demand savings on an individual customer basis is resource intensive in both personnel
and technology. Demand response aggregators have refined their marketing messages
and have created audits and processes which maximize individual demand reduction
potentiaL. In addition, they are able to utilze experience and internal softare
developed over several years to establish a portolio of individual customer participants
that maximizes reliability of overall reduction commitments.
Idaho Power succeeded in recruiting customers quickly by leveraging the
customer representatives' existing relationships with customers along with the
aggregatots existing knowledge and infrastructure. Idaho Power believes that working
with EnerNOC and its turnkey program allowed the program to begin earlier and with
faster ramp-up than if it had been created internally.
One of the key factors for Idaho Power was the reliabilty of meeting load
reduction targets. If EnerNOC does not meet its contracted demand reduction
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2
obligation for any given event or any event hour, EnerNOC pays a penalty to Idaho
Power, thus enhancing the reliabilty of its commitments.
EnerNOC also provides additional benefits to customers beyond receiving an
incentive check. EnerNOC provides customers with on-site audits to identify reduction
potentiaL. EnerNOC provides expertise to establish a mutually acceptable reduction
plan and, when warranted, it provides individual coaching during events to help
customers achieve their reduction. EnerNOC customer service representatives are
available twenty-four hours a day, 365 days per year to answer customers' questions.
In addition, customers have year-round access to near real-time energy monitoring
softare, which gives insight into their energy usage patterns and allows the potential to
save energy through learning to manage their energy systems. Providing this level of
service requires very personalized service, and equipment installation and monitoring
behind Idaho Power's meter.
After it was determined that an aggregator may have the expertise, knowledge,
and access to equipment and softare that the Company did not possess, the Request
for Proposal was created with the intent of receiving costs that would allow Idaho Power
to conduct a formal benefit/cost analysis. The Company was able to verify that
contracting with an aggregator was in fact cost-effective from both a utilty and total
resource cost perspective. The Company then reviewed the costs and benefits of using
an aggregator and determined that the avoided risk of guaranteed MW reduction, quick
program ramp-up, and added benefits to customers of a turnkey program approach was
the preferred option.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3
By hiring EnerNOC to offer this program, Idaho Power maintains good relations
with their commercial and industrial customers by providing them with a good, well-run
program that they find valuable.
The response to this Request was prepared by Pete Pengily, Customer
Research and Analysis Leader, Idaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 4
REQUEST NO.2: Please explain the methodology used by your consultant,
Nexant, Inc., to determine Net to Gross (NTG) ratio estimates for each program
implemented in 2008 and 2009.
RESPONSE TO REQUEST NO.2: As a point of clarification, Nexant, Inc., did
not apply net-to-gross ("NTG") ratios to each program Idaho Power implemented in
2008 and 2009; however, Nexant, Inc., did apply NTG ratios at the measure leveL.
The consultant identified energy efficiency potential at the measure level as
shown in the Demand Side Management Potential Study as filed with the Idaho Public
Utilties Commission in the Demand-Side Management 2009 Report, Supplement II,
Evaluation. As found in the Demand Side Management, Potential Study, Volume i, on
pages 2-2 and 2-3 under the Measure Definition section, Nexants methodology for
applying NTG factors is:
To take free ridership into account, the formula is multiplied
by a net-to-gross ratio that accounts for the share of the
savings due to free ridership. Net-to-gross ratio values were
derived from the values recommended by the California
Public Utilties Commission.1
1 In general, California's net-to-gross ratios tend to be
lower than in other parts . of the country-an effect
attributable to many years of aggressive program
implementation and market conditioning, and an increased
level of consumer awareness due to high energy prices
(relative to other geographic areas) and historical events
such as California's energy crisis in 2001. To the extent that
IPC realizes higher net-to-gross ratios, it may also achieve
higher net program savings than estimated in this analysis.
In addition, the methodology is also discussed in Section 3.2.3 on pages 3-7,
which states:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5
Each bundle of measures was then screened using the TRC
and UC tests as described in Section 2. Net to Gross Ratio
values used for the UC test were derived from the values
recommended by the California Public Utilties Commission
and are shown in Table 3-3.
Table 3-3 DEER database Net-to-Gross ratios
Program Area/Program
Appliance early retirement
and replacement
Residential Audits
Refrigerator Recycling /
Freezer Recycling
Residential Contractor
Program
Emerging Technologies
All other residential
programs
Net-to-Gross Ratios
0.80
0.72
0.35/0.54
0.89
0.83
0.80
The methodology by which Nexant applied the NTG factors in the residential and
commercial sectors was to discount the Net Present Value ("NPV") of the avoided cost
for each measure by the NTG ratio in the numerator of the Utilty Cost Test. In the
industrial sector, the achievable potential was determined by various incentive levels
and was presented as high, medium, and low cases. NTG factors were not directly
applied in the industrial model, since free ridership could vary based on the incentive
level(s) and would be assumed to be a factor of incentive structure.
The response to this Request was prepared by Pete Pengily, Customer
Research and Analysis Leader, Idaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 6
REQUEST NO.3: Please provide a spreadsheet containing the following
information for each customer and each measure incented under the CUSTOM
EFFICIENCY and REBATE ADVANTAGE programs for 2008 and 2009 program years:
. Customer Name
. Contact name
. Customer address and phone number
. Measure(s) implemented
. Energy savings
. Demand reduction
. Method of energy savings and demand reduction calculation
. Incentive amount
. Customer investment
. Measure Implementation date
. Incentive date
. Installation verification date
RESPONSE TO REQUEST NO.3: Idaho Power does not store program data in
the exact manner that Staff has requested. The Company has provided as much of the
information as possible in electronic form and has provided explanations when data
definitions may vary from what Staff has requested.
Custom Effciency
Included on the enclosed disk is a spreadsheet with a list of the projects for
which incentives were paid from the Idaho Energy Efficiency Rider through the Custom
Efficiency Program in 2008 and 2009. Contained in the spreadsheet are the following
fields:
.Project Number.Customer City.Customer State.Customer Zip.Project Description.Measure Type.Energy savings kWhlyr.Demand reduction akW
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 7
. Demand reduction Peak kW
. Demand reduction Of-peak kW
. Incentive amount
. Customer investment
. Incentive date
The requested fields not included in the spreadsheet are:
. Customer Name
. Contact name
. Customer address and phone number
. Method of energy savings and demand reduction calculation
. Measure Implementation date
. Installation verification date
Idaho Power considers specific customer information confidentiaL. Idaho Power
maintains a hard copy file for every custom project. These files contain specific
customer information, project descriptions, applications, information on methods of
determining energy savings, and demand reduction, photographs, and other project
specific information. These files are available for Staff to audit at Idaho Powets
headquarters upon signing a protective agreement. Please contact Doug Jones at 388-
2615 or Camila Victoria at 388-5821 to arrange an on-site audit.
Since each of the projects under Customer Effciency is unique, the method(s) of
verifying savings vary from project to project. Energy and demand savings are
estimated by a third-party engineering firm or the customer and are reviewed by Idaho
Power engineers. For large projects, savings are often verified by end-use metering
andlor bil analysis. The measure implementation date, as requested by Staff, may vary
from a few days to a month prior to incentive payment and these dates are not
electronically stored. The implementation date is always prior to the incentive payment
date. The tracking of the installation date varies from project to project. For all large
projects, Idaho Power engineers make on-site visits to confirm that the measure(s) were
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 8
implemented as planned. For smaller projects, it is not cost-effective for Idaho Power
engineers to visit all sites for verification purposes. Rather, Idaho Power uses a
combination of engineer site visits, site visits by other Idaho Power field personnel, and,
in some cases, invoices and pictures taken of the installation by the customer.
Rebate Advantage
Included on the enclosed disk is a spreadsheet with a list of the projects for
. which incentives were paid from the Idaho Energy Efficiency Rider through the Rebate
Advantage Program in 2008 and 2009. Contained in the spreadsheet are the following
fields:
. Project Number
. Project Description
. Measure Type
. Energy savings kWhlyr
. Incentive amount
. Customer investment
. Measure Implementation Date
. Incentive date
The requested fields not included in the spreadsheet are:
. Customer Name
. Contact name
. Customer address and phone number
. Method of energy savings and demand reduction calculation
. Installation verification date
Idaho Power considers specific customer information confidentiaL. The redacted
information is available for Staff to audit at Idaho Powets headquarters upon signing a
protective agreement. Please contact Doug Jones at 388-2615 or Camila Victoria at
388-5821 to arrange an on-site audit.
Because there is only one measure under the Rebate Advantage program that is
paying an incentive for energy savings when a customer purchases an ENERGY
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 9
STAR~ manufactured home, the Project Description field contains the name of the
manufacturer and the Measure Type field contains the serial number of the home.
The installation verification date in this program is recorded as the date when the
program manager verifies via Idaho Powets Customer Information System ("CIS+")
andlor a customer phone call that either a new account has been set up or the customer
verifies that the home is set up under an existing accunt.
As shown in Idaho Powets Demand-Side-Management 2009 Report,
Supplement 1, Cost-Effectiveness, page 32, the savings are determined by heating and
cooling type, heating zone location, and cooling zone location. These savings are
deemed by the Regional Technical Forum (ii RTF") and contained in the RTF
spreadsheet EStarMHF07v1_1.xls. Idaho Power has continued to follow and participate
in regional efforts to develop and market energy effcient manufactured housing with the
Northwest Energy Efficient Manufactured Home ("NEEM") program.
The response to this Request was prepared by Pete Pengily, Customer
Research & Analysis Leader, Idaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 10
REQUEST NO.4: Please explain if incentives have been paid, or wil be paid, to
customers who are participating in the AlC COOL CREDIT program but are not able to
receive a curtailment signaL.
RESPONSE TO REQUEST NO.4: Idaho Power is not aware of any AlC Cool
Credit participants that received an incentive during the 2008-2009 time period who did
not receive a curtailment signaL. While it is possible that the signal may not have been
received by a device, the instances are rare and the Company is not aware of any
specific instances when it may have occurred. Currently, Idaho Power is only installng
switches where the Advanced Metering Infrastructure system is available.
The program is designed so that a customer does not receive an incentive until a
switch has been installed at their residence. After Honeywell, the installation contractor,
installs the device, the Company is notified and the customets information is updated in
CIS+. Once it has been updated, the customer receives a $7.00 credit on hislher next
bil during the cycling season (June-August).
Honeywell is committed to randomly perform Quality Assurance ("QA") on five
percent of switch installations in the field to assure that a switch has been installed, that
the installation was done correctly, and that the serial numbers on the switch were
recorded accurately. In 2009, Honeywell conducted QA on about 6.5 percent of the
switch installations. Honeywell inspected 615 installations out of a total of 9,479 installs
in 2009. Honeywell also provides quality checks by phone on five percent of the
installations. In addition, Honeywell reports to Idaho Power on the number of checks of
each type that were performed each week in its weekly Production Plan.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 11
In 2007, two mitigation projects occurred, one regarding the radio signal and
another regarding an installer whose work did not match what was reported. The
incidences are described on page 12 of the Demand-Side Management 2007 Annual
Report. In each case, a mitigation plan was quickly enforced and the Company was
fully reimbursed for the incentives that were paid out to customers in error. The
reimbursement was credited to the Energy Efficiency Rider account.
In 2010, the radio paging companies servicing the Pocatello and Twin Falls areas
discontinued servicing these areas and, as a result, the program participants are now
unable to have their AlC loads curtailed. This situation was described at the May 26,
2010, Energy Effciency Advisory Group meeting. The mitigation plan wil be fully
described in the Company's Demand-Side Management 2010 Annual Report.
The response to this Request was prepared by Pete Pengily, Customer
Research & Analysis Leader, Idaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 12
REQUEST NO.5: Are the Company's customer satisfaction results based on
survey offerings to all customers or just those customers who have participated in the
Company's DSM programs? Please explain.
RESPONSE TO REQUEST NO.5: Idaho Power assumes Staff is referring to
the "Company's customer satisfaction results. . . ." on pages 13 and 14 of Idaho
Powets Demand-Side Management 2009 Annual Report. The results of the
Company's quarterly customer relationship survey as described on page 13 are based
on a quarterly survey of a representative sample of all of Idaho Powets customers, not
just customers who have participated in the Company's Demand-Side Management
programs.
The response to this Request was prepared by Pete Pengily, Customer
Research & Analysis Leader, Idaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, Idaho Power Company.
DATED at Boise, Idaho, this 2¡th day of August 2010.
.k f) 'l~Jo~LISA D. NORDST OM
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -13
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 2¡th day of August 2010 I served a true and
correct copy of the foregoing IDAHO POWER COMPANY'S RESPONSE TO THE
FIRST 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
Neil Price
Deputy Attomey General
Idaho Public Utilties Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
-. Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-. Email NeiI.PriceCâpuc.idaho.gov
Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North Sixth Street
P.O. Box 844
Boise, Idaho 83702
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email bottoCâidahoconservation.org
Idaho Irrigation Pumpers
Association, Inc.
Eric L. Olsen
RACINE, OLSON, NYE, BUDGE
& BAILEY, CHARTERED
201 East Center
P.O. Box 1391
Pocatello, Idaho 83204-1391
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email elocaracinelaw.net
Anthony Yankel
Yankel & Associates, Inc.
29814 Lake Road
Bay Vilage, Ohio 44140
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email tonycayankel.net
Industrial Customers of Idaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON & O'LEARY, PLLC
515 North 27th Street
P.O. Box 7218
Boise, Idaho 83702
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email petercarichardsonandoleary.com
gregcarichardsonandoleary.com
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 14
Dr. Don Reading
Ben Johnson Associates, Inc.
6070 Hil Road
Boise, Idaho 83703
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email dreadingcamindspring.com
;;Q?lkhLisa D. Nordstro
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -15