20101124ICIP 1-15 to IPC.pdf

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ATTORNEYS AT LAW
Tel: [phone] Fax: [phone]
P.O. Box 7118 Boise. ID 83707 - sis N. 27th St. Boise, ID 83702
iaw NOV 23 PH l,: 50
November 23,2010
Ms. Jean Jewell
Commission Secretar
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
RE: IPC-E-IO-27
Dear Ms. Jewell:
We are enclosing for fiing in the above-referenced docket an original and three (3)
copies of the INDUSTRIAL CUSTOMERS OF IDAHO POWER'S FIRST
PRODUCTION REQUEST.
An additional copy is enclosed for you to stamp for our records.
~
e ryM. Adams
chardson & O'Lear PLLC
encL.
..,~~
Peter J. Richardson (ISB # 3195)
Gregory M. Adams (ISB # 7454)
Richardson & O'Lear, PLLC
515 N. 27th Street
P.O. Box 7218
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter(frichardsonandolear.com
greg(frichardsonando1eary.com
I"L""El~"'r¡ ....i- 'l__V'..n~-,"
ZOlU NOV 23 PH l,: 50
IDf\t,-~OljTILrriEfi
Attorneys for the Industrial Customers of Idaho Power
BEFORE THE IDAHO
PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S REQUEST TO MODIFY
RECOVERY OF INCENTIVES PAID TO
SECURE DEMAND-SIDE
RESOURCES
)
) CASE NO. IPC-E-1O-27
)
) FIRST PRODUCTION REQUEST
) OF THE INDUSTRIAL CUSTOMERS
) OF IDAHO POWER
Pursuant to Rule 225 of the Rules of Procedure of the Idaho Public Utilities Commission
(the "Commission"), the Industrial Customers of Idaho Power ("ICIP") hereby requests that
Idaho Power Company ("Idaho Power") provide responses to the following with supporting
documents, where applicable, no later than December 14,2010.
This production request is to be considered as continuing, and the Idaho Power is
requested to provide by way of supplementar responses additional documents that it or any
person acting on its behalf may later obtain that will augment the responses or documents
produced.
Page 1 - FIRST PRODUCTION REQUEST OF THE INDUSTRIAL
CUSTOMERS OF IDAHO POWER - IPC- E-l 0-27
"'..""
Please provide one physical copy and one electronic copy, if available, of your answer to
Mr. Adams at the address noted above. Please provide an additional electronic copy, or if
unavailable a physical copy, to Dr. Don Reading at: 6070 Hil Road, Boise, Idaho 83703, Tel:
[phone]; Fax: [phone]; dreading~mindspring.com.
For each item, please indicate the name of the person(s) preparing the answers, along
with the job title of such person(s) and the witness at hearing who can sponsor the answer.
Some of the following requests may include disclosures deemed by Idaho Power to be
confidentiaL. Counsel for the Industrial Customers of Idaho Power contacted counsel for Idaho
Power regarding a confidentiality agreement prior to sending these Requests for Production.
Counsel and the expert witness of the Industrial Customers of Idaho Power are prepared to sign
any such agreement to obtain the materials relevant to this proceeding, and expect that executing
such a confidentiality agreement will not delay Idaho Power's responses to these Requests for
Production.
Page 2 - FIRST PRODUCTION REQUEST OF THE INDUSTRIL
CUSTOMERS OF IDAHO POWER - IPC- E-l 0-27
. r ..
REQUEST FOR PRODUCTION NO.1
Reference Direct Testimony of Darlene Nemnich, p. 7, lines 3-7. For the FlexPeak program,
please provide a breakdown specifying, on an anual basis, the Company's incentive costs paid
to customers and the Company's incentive costs paid for the demand-aggregator contractor for
the Flex Peak program. Please provide a copy of the contract with the demand-aggregator for
Flex Peak program.
REQUEST FOR PRODUCTION NO.2
Reference Direct Testimony of Darlene Nemnch, p. 10, lines 6-13. Is the Company proposing
the incentive payments to be included in the PCA would not be subject to the 95/5 sharing?
Because the Company also proposes to include these incentive payments in future base rates,
please explain how the Company proposes to account for them in the PCA process.
REQUEST FOR PRODUCTION NO.3
Reference Direct Testimony of Darlene Nemnch, p. 11, lines 13-19. Please provide a
justification for the 4-year amortization period.
REQUEST FOR PRODUCTION NO.4
Please explain why the Custom Efficiency program was selected relative to similar programs
such as Easy Upgrade to be moved from the EE Rider to recovery as a regulatory asset? Does the
Company plan, should the proposals in this filing be approved, to move other programs to either
a regulatory asset or to the PCA? If so, please explain fully.
REQUEST FOR PRODUCTION NO.5
Reference Direct Testimony of Darlene Nemnich, p. 13, line 22, to p. 14, line 4. Has the
Company conducted any analysis of the life of any (or all) of the Custom Efficiency program
equipment stated to be analogous to "physical plant" (i.e. lighting, Green Rewind, etc.)? If so,
please provide the studies that were conducted. Please explain why the amortization period for
each of these components should not be their expected life rather than a 4-year period.
REQUEST FOR PRODUCTION NO.6
Reference Direct Testimony of Darlene Nemnich, p. 7, lines 3-7. For the A/C Cool Credits
program, please provide a breakdown specifying, on an anual basis, the (a) Company's
incentive costs paid to customers, and (b) other program expenses.
Page 3 - FIRST PRODUCTION REQUEST OF THE INDUSTRIL
CUSTOMERS OF IDAHO POWER - IPC- E-l 0-27
REQUEST FOR PRODUCTION NO.7
Please provide the following regarding the A/C/ Cool Credits program:
(a) TRC ratio calculations and work papers for this program for individual years 2008,
2009, and 2010.
(b) Ifitem (a) is unavailable, please explain why.
(c) Reference the Idaho Power Demand Response Analysis Report, 2009 AIC Cool Credit
Program, prepared by Paragon Consulting Services, at p. 1 (included in the 2009 DSM
Annual Report, Supplement 2: Evaluations) (stating that over 50% ofthe paricipants were
"free riders" and concluding the average demand reduction per curtailment "was well below
the expected demand reduction. .. found in other utilty studies.") Does Idaho Power
believe that this program has a free rider problem? Please explain the steps Idaho Power has
taken to improve the demand reduction per curailment in this program in response to the
Paragon Consulting Services report.
(d) Reference Order No. 29702, at p. 3, noting at the time of initial authorization of the A/C
Cool Credits program that "the Company performed a benefit-cost analysis that showed a
positive benefit-cost ratio of 1.42 over a 30-year period." Is this program performing consistent
with the prediction of a 1.42 benefit-cost ratio? Please explain and provide supporting evidence.
REQUEST FOR PRODUCTION NO.8
Reference Application at ~ 4. Does Idaho Power believe that the requested relief will place DSR
on a "equal footing" with supply side resources? Please explain how Idaho Power's profit
incentive associated with building a new gas peakng plant compares to Idaho Power's profit
incentive associated with its DSR programs as they would exist with the requested relief in this
case. Please provide supporting evidence or calculations.
REQUEST FOR PRODUCTION NO.9
Reference Application at ~ 19 (stating that Idaho Power would need to increase the EE rider from
4.75 % of base rates to 6.6 % of base rates to eliminate the negative balance on the EE Rider
account by 2012, which negative balance would be $29,677,151 ifno action is taken.)
(a) In Order No. 29784, p. 6, the Commission stated: "We deny the Company's proposal to
authorize an increase in the Rider to 2.4% in June 2007 at this time. As stated above, increasing
the Rider to 1. 5% wil provide the Company with ample fuding to pursue its plans for
implementing programs through at least June 1, 2006." Please reference the subsequent
Commission order authorizing the Company to maintain a negative balance in the EE rider
Page 4 - FIRST PRODUCTION REQUEST OF THE INDUSTRIL
CUSTOMERS OF IDAHO POWER- IPC-E-IO-27
"
account to fud DSM programs. Does the Company understad the Commission's orders to
pursue all cost effective DSM as a directive to spend in excess of the amount collected from the
EE rider?
(b) In Order No. 30814, p. 2, the Commission noted, "If the Rider is increased as the
Company proposes (to 4.75%) Idaho Power projects the deficit in the Rider account will be $1.2
milion at the end of201 1." Please explain how the Company now projects the rider deficit
would be over $29 milion by the end of2012 in light of its prior projection.
(c) Does Idaho Power admit it has mismanaged its expenditures to ru up a negative balance
on the EE rider account? If not, please explain how the negative balance is the result of properly
managed DSM programs.
(d) Please provide an estimate of the percentage of base rates Idaho Power will collect for
total energy effciency and DSR activities in 2011 if the Commission were to grant Idaho
Power's requested relief in this case. Please provide the estimate in a dollar amount and as a
percentage of base rates in 201 1. Ifthe percentage amount exceeds 4.75%, does Idaho Power
admit that this filing requests an increase in overall payment from customers for energy
effciency and/or DSR?
REQUEST FOR PRODUCTION NO. 10
Reference Application at ~ 18. Please explain the basis for the request to ear the Company's
authorized rate of retu on its negative EE rider account balance. Please explain how the
negative balance is associated with regulatory assets for which the Company would otherwise be
entitled to ear a retur.
REQUEST FOR PRODUCTION NO. 11
Reference Direct Testimony of John R. Gale, p. 21, lines 8-12. Does Idaho law allow Idaho
Power to ear "the authorized rate of retu on equity plus 5 percent" for conservation and
demand-side resources? If so, please cite the law. If not, please explain how is ths testimony
regarding Nevada's law is relevant.
REQUEST FOR PRODUCTION NO. 12
Reference Direct Testimony of John R. Gale, p. 19, lines 4-21.
(a) Please explain how the Company curently fuds the custom effciency program.
(b) Please explain how the custom effciency program wil be fuded in the future.
Page 5 - FIRST PRODUCTION REQUEST OF THE INDUSTRI
CUSTOMERS OF IDAHO POWER - IPC-E-l 0-27
(c) Wil the revenue source be the EE rider, the PCA, or base rates? If the source will be
different in future years, please explain why.
(d) What is the revenue source for most of the Company's "regulatory assets," base rates, the
PCA, the EE rider, or some other source? Please explain.
REQUEST FOR PRODUCTION NO. 13
Reference Direct Testimony of John R. Gale, p. 20, lines 8-13, and p. 23, lines 3-8.
(a) If Company is requesting that custom efficiency program expenditures be recovered as a
regulatory asset for which it will ear its authorized rate of retu effective for expenditures after
Januar 1,2011, how wil such treatment be consistent with the agreement not to request a
general rate change prior to Januar 1,2012 per the stipulation in Case No. IPC-E-09-30?
(b) Please identify some other expense in the PCA or the EE Rider for which the Company
eared its authorized rate of retur at the time of the stipulation in Case No. IPC-E-09-30.
(c) How will the Company request recovery of the custom efficiency program expenditues
after January 1, 2012? Wil the Company place the program expenditues in rate base? Ifnot,
please identify other regulatory assets which the company does not place in rate base. Please
explain.
REQUEST FOR PRODUCTION NO. 14
Reference Direct Testimony of Darlene Nemnch, p. 9, lines 3-10, stating that the Company
intends "to establish a base level of demand response incentive cost recovery in base rates just
like other power supply costs" . . . "but not at this time."
(a) Why is the Company not requesting a base level ofDSR at this time?
(b) Does the Company believe that labeling the requested DSR expenses as a PCA expense,
rather than a base rate input, changes the character of the expenses in such a way as to make the
increase in cost recovery from ratepayers consistent with the stipulation in Case No. IPC-E-09-
30? Please explain.
REQUEST FOR PRODUCTION NO. 15
Reference Direct Testimony of Darlene Nemnch, p. 8, lines 13-15.
Page 6 - FIRST PRODUCTION REQUEST OF THE INDUSTRIL
CUSTOMERS OF IDAHO POWER - IPC-E-l 0-27
.,, ...
(a) If the Company will pay for the estimated $13.7 milion in DSR program costs from PCA
rates in 2011, wil the Company fie to reduce the EE rider recovery by that amount?
(b) Ifthe answer to (a) is "no," please explain how the request to recover the $13.7 milion in
DSR program expenses through the PCA is not analogous to an increase in the EE rider by $13.7
milion in 2011.
(c) Please provide the following estimates for this projected $13.7 milion expenditure:
A/C Cool Credits Flex Peak Irrgation Peak
Rewards
estimated expenditure
($)
peak reduction
estimate (MW)
expenditue/ peak
reduction
($/MW)
Than you for your prompt attention to ths First Request for Production.
i~
RICHARSON & O'LEARY, PLLC
Page 7 - FIRST PRODUCTION REQUEST OF THE INUSTRI
CUSTOMERS OF IDAHO POWER - IPC-E-l 0-27
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..
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 23rd day of November, 2010, I caused a true
and correct copy of the foregoing FIRST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POWER to be served by the method indicated
below, and addressed to the following:
Jean Jewell
Idaho Public Utilities Commission
472 West Washington Street (83702)
Post Office Box 83720
Boise, Idaho 83720-0074
( ) U.S. Mail, Postage Prepaid
(x ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
( ) Electronic Mail
Lisa Nordstrom
Donovan Walker
Idaho Power Company
PO Box 70
Boise, Idaho 83707
(x) U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnght Mail
( ) Facsimile
(x) Electronic Mail
John R. Gale
Darlene Nemnich
Idaho Power Company
PO Box 70
Boise, ID 83707
(x) U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnght Mail
( ) Facsimile
( ) Electronic Mail
Page 8 - FIRST PRODUCTION REQUEST OF THE INDUSTRIL
CUSTOMERS OF IDAHO POWER - IPC-E-l 0-27