Loading...
HomeMy WebLinkAbout20120106IPC to Staff 1-28.pdfLISA D. NORDSTROM (ISB No. 5733) DONOVAN E. WALKER (ISB No. 5921) JASON B. WILLIAMS (ISB No. 8718) Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-5825 Facsimile: (208) 388-6936 InordstromCãidahopower.com dwalkerCãidahopower.com jwilliamsCãidahopower.com Attorneys for Idaho Power Company ;'~: (~F: i 2012 JfiN -5 PM 4: 46 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MA TIER OF THE APPLICATION ) OF IDAHO POWER COMPANY FOR ) AUTHORITY TO CONVERT SCHEDULE ) 54 - FIXED COST ADJUSTMENT - ) FROM A PILOT SCHEDULE TO AN ) ONGOING PERMANENT SCHEDULE. ) ) ) ) CASE NO. IPC-E-11-19 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 December 16, 2011, 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: Please quantify the amount of lost sales related to the Company's residential and small commercial DSM efforts for each year of the FCA pilot program. Provide all workpapers used in the calculation, with formulas intact. RESPONSE TO REQUEST NO.1: Each year on or before March 15, Idaho Power files its annual Demand-Side Management ("DSM") Annual Report with the Idaho Public Utilities Commission ("Commission") in compliance with Commission Order Nos. 29026 and 29419. The estimated annual energy savings from each DSM program is included in this report. A summary of the programs, expenditures, and estimated savings is provided in the Demand-Side Management 2010 Annual Report, Revised Appendix 4, provided on the non-confidential CD. The tables below are derived from Revised Appendix 4 and show energy savings by kilowatt-hour ("kWh") for the residential sector, commercial sector, Local Energy Efficiency Funds, and Northwest Energy Effciency Allance ("NEEA"). Residential Programs Year kWh 2007 12,44,682 2008 21,777,729 2009 25,979,920 2010 42,850,839 Local Energy Effciency Funds Year kWh 2007 9,000 2008 115,931 2009 10,340 Commercial Programs Year kWh 2007 8,000,888 2008 32,785,606 2009 41,459,875 2010 46,892,926 NEEA Year kWh 2007 28,601,410 2008 21,024,279 2009 10,702,998 2010 15,334,073 It would be a difficult, extremely labor intensive, and manual process to report estimated energy savings by individual rate schedule from Idaho Powets DSM initiatives for several reasons. Prior to the development of the Company's new DSM IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2 data storage system in 2011, Idaho Power did not track program participation by rate schedule. The new DSM data storage system is integrated with the Company's customer information system, which enables participation in some programs to be tracked by rate schedule. Prior to the development of the new data repository, the Company tracked participation in most programs by customer sector - residential, commercial, industrial, irrigation, and other initiatives. Residential is predominately one rate schedule so tracking it by rate schedule and by sector is straightforward. However, Idaho Powets three main commercial programs, Easy Upgrades, Building Efficiency, and Holiday Lighting, allow participation by customers served under the small commercial, large commercial, and industrial rate schedules. The savings estimate for NEEA and Local Energy Efficiency Funds can include savings for projects or initiatives in which customers served under several rate schedules participate. Additionally, with the exception of NEEA funded initiatives, Idaho Power only records and reports energy savings for programs where the participant is directly incentivized to buy and/or install energy efficient products or devices. Thus, it would be difficult to calculate the exact amount of energy saved through all of Idaho Powets energy efficiency initiatives. For example, the Company is involved is several initiatives where savings are not measurable or reported, such as its customer outreach and education initiatives. The response to this Request was prepared by Pete Pengily, Customer Research & Analysis Leader, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3 REQUEST NO.2: Please identify all other sources beyond DSM contributing to lost sales for residential and small commercial for each year of the FCA pilot program. Provide all workpapers used in the calculation, with formulas intact. RESPONSE TO REQUEST NO.2: Idaho Power has not identified or quantified the individual or aggregate effect that these other sources may have had on changes in energy sales. It is difficult to identify all other sources beyond DSM which contribute to changes in energy sales, both increases and decreases for the residential and small commercial classes. Some of the sources which would have an impact include building code changes, federal weatherization programs, tax incentives and appliance rebates, federal marketing programs, technological changes, substitutions between gas and electric equipment, rate design changes consistent with energy efficiency, shifts in the economy, customer education and information, and other behavioral changes. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate 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.3: Would the Company support a modification of the FCA methodology to isolate only lost sales attributed to the Company's DSM efforts in the residential and small commercial classes only? Please explain. RESPONSE TO REQUEST NO.3: No, the Company would not be in support of a modification of the Fixed Cost Adjustment ("FCA") methodology to isolate only lost energy sales attributed to the Company's DSM efforts in the residential and small commercial classes. The original intent of the FCA methodology was to remove the financial disincentive for the utilty to invest in DSM activities. There are a number of efforts supported by the Company in its enhanced commitment to DSM that would be difficult to determine the amount of lost energy sales. The Company stil believes that alternative methodologies would be more costly and would result in less than an accurate determination of the energy saved or gained. The current methodology allows the Company to only recover the level of fixed costs previously approved by the Commission, no more and no less. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5 REQUEST NO.4: Please provide all available information to verify that the Company has fulfilled its obligations specified in Commission Order No. 30267 to: a) "promote the adoption of energy codes to achieve improved levels of efficiency in new commercial and residential construction and appliance standards in Idaho" b) "promote and support appropriate energy code training programs and advocate the enforcement of energy codes" c) "identify ways to support energy code implementation and enforcement in all jurisdictions in Idaho Powets service territory" Evidence may include, but need not be limited to, workpapers, e-mails, internal and external meeting minutes, and presentation materials. RESPONSE TO REQUEST NO.4: In Idaho Powets 2007 through 2010 DSM Annual Reports, the Company included a section specifically addressing the Company's enhanced commitment to energy efficiency and DSM. This section of each report provides evidence verifying the Company has fulfiled its obligations set forth in Order No. 30627. A copy of this section from each of the 2007 through 2010 reports is provided on the non-confidential CD. This information has not been compiled for 2011. The information for 2011 wil be included in Idaho Powets Demand-Side Management 2011 Annual Report, which wil be filed with the Commission on or before March 15, 2012. The response to this Request was prepared by Pete Pengily, Customer Research & Analysis Leader, Idaho Power Company, in consultation with Jason B. Willams, Corporate 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.5: To the extent not covered in its response to the previous question, please identify any changes since the inception of the FCA to: a) energy codes in new commercial and residential construction and appliance standards in Idaho b) enforcement of energy codes in Idaho c) energy code implementation and enforcement in all jurisdictions in Idaho Power's service territory RESPONSE TO REQUEST NO.5: Please see the Company's response to Staffs Production Request No.4 above. The response to this Request was prepared by Pete Pengily, Customer Research & Analysis Leader, Idaho Power Company, in consultation with Jason B. Williams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 7 REQUEST NO.6: Please provide a table showing the following information for each DSM program by year of the FCA pilot: a) DSM program b) Applicable participant rate schedules c) Estimated expenditures d) Estimated savings RESPONSE TO REQUEST NO.6: a) Each year on or before March 15, Idaho Power files its annual Demand- Side Management Annual Report with the Commission in compliance with Commission Order Nos. 29026 and 29419. A complete description of each DSM program, expenditures, and estimated savings is included in this report. A summary of the programs, expenditures, and estimated savings is included in the attachment provided by the Company in its response to Staffs Production Request No. 1 above. b) The Company does not track DSM program information by rate schedule. c) Please see the Company's response to Staff's Production Request No. 6(a) above. d) Please see the Company's response to Staffs Production Request No. 6(a) above. The response to this Request was prepared by Pete Pengily, Customer Research & Analysis Leader, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 8 REQUEST NO.7: What percentage of homes in Idaho Power's service territory use electricity as the primary source for space heating? Please provide this data for the past five years. RESPONSE TO REQUEST NO.7: Idaho Power does not track the primary heating source of customers' homes. Tracking the heating source is difficult since customers can change their heating source without the Company's knowledge. In 2010, Idaho Power contracted with Market Strategies International ("MSI" to conduct a residential end-use survey. The results of this survey were included in Idaho Powets Demand-Side Management 2010 Annual Report, Supplement 2: Evaluation. On page 27 of MSl's report, the survey indicates that, system wide, 31 percent of Idaho Powets customers responded as having electricity as their primary heat source. Idaho Powets Demand-Side Management 2010 Annual Report, Supplement 2: Evaluation was filed with the Commission on March 15, 2010, and can be found via the following link: http://ww.idahopower.com/EnergyEfficiency/reports.cfm. The response to this Request was prepared by Pete Pengily, Customer Research & Analysis Leader, Idaho Power Company, in consultation with Jason B. Willams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 9 REQUEST NO.8: In the past five years, what percentage of new home construction within Idaho Powets service territory use electricity as the primary source for space heating? RESPONSE TO REQUEST NO.8: Please see the Company's response to Staff's Production Request No. 7 above. Based on Idaho Power's 2010 end-use study referenced in the Company's response to Staff's Production Request No.7, the chart below shows primary heating source by age of home for Idaho Powets service area. The chart indicates that there is a greater penetration of natural gas heating in more recently built homes. The overall percentage of electrically heated homes does not exactly match the percentage cited in the Company's response to Staffs Production Request No. 7 because the number of respondents per question varies. The cross-tab chart below is based on the number of respondents in the study addressing the age of their homes. Reported Age of Home Primary Heat Source Natural Total Electricity Gas Other Base: (Excluding 1512 435 881 196 (Don't know/No answer))28.8%58.3%13.0% Before 1960 294 66 163 65 22.4%55.4%22.1% 1960-1979 381 143 188 50 37.5%49.3%13.1% 1980-1989 171 62 88 21 36.3%51.5%12.3% 1990-1999 307 90 187 30 29.3%60.9%9.8% 2000-2006 285 57 203 25 20.0%71.2%8.8% 2007-2010 74 18 52 4 24.3%70.3%5.4% IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 10 The response to this Request was prepared by Pete Pengily, Customer Research & Analysis Leader, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 11 REQUEST NO.9: Does Idaho Power believe that new home construction wil rely more on electric space heating or natural gas space heating going forward? Please explain. RESPONSE TO REQUEST NO.9: Idaho Power does not know what the penetration of electric space heating will be in the future. The response to this Request was prepared by Pete Pengily, Customer Research & Analysis Leader, Idaho Power Company, in consultation with Jason B. Willams, Corporate 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. 10: If the Commission decided to terminate the FCA, how would the Company change its approach to acquiring all available cost-effective DSM? RESPONSE TO REQUEST NO. 10: Idaho Power is on the record in many public forums and in numerous filngs with the Commission as being committed to pursuing all cost-effective energy efficiency resources and the Company's actions since 2002 demonstrate this commitment. Severing the link between energy sales and the recovery of fixed costs allows Idaho Power to pursue both programmatic and non- programmatic DSM initiatives without running the risk of financially harming its shareholders. The Company's commitment to pursue all cost-effective energy efficiency is premised, in part, by the belief that it would not be financially harmed in its pursuit of these resources. If the FCA was eliminated and not replaced with a mechanism that addresses the financial harm, the Company would need to evaluate its future DSM activities. The response to this Request was prepared by Pete Pengily, Customer Research & Analysis Leader, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -13 REQUEST NO. 11: Please explain how reimbursing the Company for lost sales (or refunding ratepayers for excess sales) unrelated to DSM activities is in the ratepayers' interests. RESPONSE TO REQUEST NO. 11: The current FCA mechanism does not distinguish between variations in average use per customer, up or down, regardless of the source or reason for the change. It allows the Company to recover only the level of fixed costs that were previously authorized by the Commission, no more and no less. The simplicity of the current FCA mechanism is a benefit to customers in that it allows the Company to actively pursue less expensive DSM resources without the additional costs and scrutiny of accurately determining the costs directly associated with the DSM resource acquisition. In addition, as stated in testimony (Michael J. Youngblood Direct Testimony, pp. 6-10, 15-16), the reciprocal nature ofthe FCA true-up mechanism allows customers to benefit even when loads are increasing by refunding to customers the fixed costs recovered by the Company which were above the authorized level of recovery. Prior to the current FCA mechanism, the Company was allowed to keep the additional revenue and customers' bills were not reduced. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 14 REQUEST NO. 12: Please explain how the Company identifies the number of meters installed for new construction. RESPONSE TO REQUEST NO. 12: The Company does not identify the number of meters installed for new construction for purposes of the FCA. Instead, the FCA uses actual year-end customer count figures for purposes of determining the FCA. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -15 REQUEST NO. 13: Please provide FCA results for each year of the FCA pilot program assuming each rate class (excluding lighting schedules) were subject to the FCA. In this analysis, include the FCC and FCE for each year, the FCA adjustment rate per class and percentage of class revenues, assuming no blended rate. Please provide all workpapers with the response, with formulas intact. RESPONSE TO REQUEST NO. 13: The FCA has not been calculated for any of the other classes other than Schedule 1, Residential Service, and Schedule 7, Small General Service. The determination of an appropriate FCA mechanism for classes other than residential and small general service, including the determination of an appropriate fixed cost per customer ("FCC") and fixed cost per energy rate ("FCE") by class, would need to take into consideration that these other classes have various other billng components in addition to the service charge through which fixed costs are recovered, including a demand charge, a basic load capacity charge, on-peak demand charge, etc. The residential and small general service classes only recover fixed costs through the service charge and energy charge; therefore, the FCE and FCC rates are only reflective of the fixed costs being recovered through a portion of the volumetric rate, or energy charge. The complexities of determining an appropriate methodology for recovery of fixed costs for other rate classes has not been determined. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 16 REQUEST NO. 14: Please provide the cost of service results used to calculate fixed costs for this filing. Identify the line items that constitute fixed costs. RESPONSE TO REQUEST NO. 14: Please see the Excel file provided on the non-confidential CD. The first tab, "Unit Cost," clearly identifies the cost-of-service results determined from the settlement of Case No. IPC-E-11-08, which then are used in the FCC and FCE determination. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Willams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 17 REQUEST NO. 15: In reference to Request No. 14, please indicate which items included in the fixed cost calculation are incurred by the Company when it adds a new customer in an existing residence or building. Please provide a brief explanation of the items and why those items are necessary to serve these types of new customers. RESPONSE TO REQUEST NO. 15: The fixed costs identified in the Company's response to Staff's Production Request No. 14 include all of the fixed costs allocated to a particular class and are the costs which are recovered through the base rates approved by the Commission in Order No. 32426, Case No. IPC-E-11-08. Costs incurred by the Company to serve its customers may be "lumpy" in nature, whether it is the addition of a new generation resource, an upgraded transmission line, or a new distribution substation. However, all customers of a particular class pay the same base rates, regardless if they are an existing customer or a new customer. Therefore, the costs recovered to serve a specific customer is an average of the costs incurred to serve all of the customers of that particular class, regardless if it is a customer in an existing residence or building or a customer in a newly constructed residence or building. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Willams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 18 REQUEST NO. 16: In reference to Request No. 14, please indicate which items included in the fixed cost calculation are incurred by the Company when it adds customers in newly constructed residences or buildings. Please provide a brief explanation of the items and why those items are necessary to serve these types of new customers. RESPONSE TO REQUEST NO. 16: Please see the Company's response to Staffs Production Request No. 15 above. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Willams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 19 REQUEST NO. 17: Given the success the Company believes the FCA has achieved, does the Company support expanding the FCA to all customer classes? Please explain why or why not. RESPONSE TO REQUEST NO. 17: The FCA true-up mechanism has enabled the Company to recover its authorized level of fixed costs for the residential and small general service classes. The Company wil continue to seek timely recovery of prudently incurred costs to serve its customers. There are a number of additional complexities to consider when proposing an FCA true-up mechanism for the other customer classes. (Please see the Company's response to Staffs Production Request No. 13). The Company may support expanding the FCA to other customer classes. However, at this time, the Company has not completed a review of expanding the FCA and expansion is not part of the Company's request in this case. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 20 REQUEST NO. 18: Please provide all financial analyses referenGed on page 10 of Mr. Youngblood's testimony regarding equity analysts' views on decoupling for Idaho Power. RESPONSE TO REQUEST NO. 18: Please see the financial analyses provided on the non-confidential CD which reference the Company's FCA mechanism. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 21 REQUEST NO. 19: For each year of the pilot FCA program, please provide the inputs for calculating the FCC and FCE (total fixed costs, customer counts, energy sales). Identify the program years in which the FCC and FCE rates changed due to Commission Orders, and in which month the change went into effect. Please provide all workpapers in executable format with this response. RESPONSE TO REQUEST NO. 19: The inputs used to calculate the FCC and FCE for each year of the FCA are included in the following Excel files provided on the non-confidential CD: FCC,.FCE 2007 - used January 1, 2007, through May 31, 2008; FCC-FCE 2008 - used June 1, 2008, through January 31, 2009; FCC-FCE 2009 - used February 1, 2009, through March 31, 2009; and FCC-FCE Current - used April 1 ,2009, through December 31,2011. The first year of the FCA, the FCC and FCE were established based upon the Company's approved cost-of-service model from the most recent general rate case, Case No. IPC-E-05-28. Since the establishment of those initial rates, the FCC and FCE rates have changed due to Commission orders on three separate occasions: June 1, 2008 (Order Nos. 30556, 30559, and 30563), February 1, 2009 (Order No. 30722), and April 1 ,2009 (Order No. 30754). The FCC and FCE rates approved in Order No. 30754 have been in effect since April 1 ,2009. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 22 REQUEST NO. 20: For each year of the pilot FCA program, please provide the inputs for calculating the FCA deferral balance (such as monthly customer counts and energy sales). Identify and explain any end of the year adjustments. Please provide all workpapers in executable format with this response. RESPONSE TO REQUEST NO. 20: The inputs for calculating the FCA deferral balance for each year of the FCA are included in the Excel files provided on the non- confidential CD. These files include monthly customer counts and energy sales and the deferral balance, which is calculated to comply with Generally Accepted Accounting Principles. However, it is important to note that the FCA is determined based upon annual customer counts and energy sales. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 23 REQUEST NO. 21: For each year of the pilot FCA program, please provide the baseline and +/- adjustment cap levels. Please provide all workpapers in executable format with this response. RESPONSE TO REQUEST NO. 21: Following clarification with Commission Staff, please see the Company's response to Staff's Production Request No. 20 above. The response to this Request was prepared by Michael Youngblood, Manager of Rate Design, Idaho Power Company, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 24 FOR MR. CAVANAGH REQUEST NO. 22: Given his support of the mechanism, does Mr. Cavanagh believe Idaho Power should expand the FCA to include all customer classes? Why or why not? RESPONSE TO REQUEST NO. 22: Mr. Cavanagh would support an expansion of the FCA to include all customer classes but feels that the current coverage is preferable to no mechanism at alL. It is his understanding that the Company is not requesting an expansion of the mechanism in this proceeding. The response to this Request was prepared by Ralph Cavanagh, Energy Program Co-Director, Natural Resources Defense Council, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 25 REQUEST NO. 23: To the extent not answered in the previous response, what benefits, both to the customer and the Company, does Mr. Cavanagh see in limiting the FCA to Idaho Power's residential and small commercial classes, should it be made permanent? RESPONSE TO REQUEST NO. 23: Mr. Cavanagh's testimony addresses the benefits of the requested extension to those classes. In addition, please see the Company's response to Staffs Production Request to No. 22 above. The response to this Request was prepared by Ralph Cavanagh, Energy Program Co-Director, Natural Resources Defense Council, in consultation with Jason B. Willams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 26 REQUEST NO. 24: Please list all other jurisdictions that Mr. Cavanagh has served as an expert witness regarding decoupling mechanisms. Please note the date of the proceeding and the party that Mr. Cavanagh represented. RESPONSE TO REQUEST NO. 24: Other than Idaho, Mr. Cavanagh has testified as an expert witness regarding decoupling mechanisms in the following jurisdictions (specifying also the parties and years): Oregon, Portland General Electric, 2009; Washington, Natural Resources Defense Council ("NRDC"), 2002, 2004, 2006, and 2011 ; Montana, NRDC, 2010; New Mexico, PNM, 2010; Arizona, NRDC, 2011; Utah, Questar Gas, 2007; Utah, NRDC, 2010; Wisconsin, Allant, 2005; and Illnois, NRDC, 2010. The response to this Request was prepared by Ralph Cavanagh, Energy Program Co-Director, Natural Resources Defense Council, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 27 REQUEST NO. 25: Of the jurisdictions listed in the response to Request No. 24, what jurisdictions have instituted a pilot or permanent decoupling mechanism? RESPONSE TO REQUEST NO. 25: Oregon, Utah, Wisconsin, and Arizona have adopted decoupling mechanisms; they are not formally styled "pilots" but the state regulatory commissions in each jurisdiction review them regularly. Decoupling proposals are now pending in Washington for Avista Corp. ("Avista") and Puget Sound Energy, and in Arizona for Arizona Public Service. Montana adopted a decoupling mechanism in late 2010 and then vacated the order in 2011 on motion from multiple parties, including NRDC (the Montana Public Service Commission had made significant changes in a proposed settlement, including severe constraints on the scope of the decoupling mechanism). The response to this Request was prepared by Ralph Cavanagh, Energy Program Co-Director, Natural Resources Defense Council, in consultation with Jason B. Wiliams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 28 REQUEST NO. 26: Please provide all similarities and differences to Idaho Powets current FCA program and the decoupling mechanisms listed in response to Request No. 25. RESPONSE TO REQUEST NO. 26: Mr. Cavanagh has not undertaken such an analysis but notes that the PDF provided on the non-confidential CD from The Electricity Journal includes a helpful comparison of all decoupling mechanisms adopted prior to 2010, including Idaho Powets. The response to this Request was prepared by Ralph Cavanagh, Energy Program Co-Director, Natural Resources Defense Council, in consultation with Jason B. Willams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 29 REQUEST NO. 27: If not answered in the previous response, is Mr. Cavanagh aware of any jurisdiction listed in response to Request No. 25 that explicitly adjusted a utilty's rate of return due to instituting a decoupling mechanism? RESPONSE TO REQUEST NO. 27: In the Portland General Electric decoupling proceeding, the Public Utilty Commission of Oregon adjusted the company's return on equity ("ROE") downward by 10 basis points as part of its decision to approve the proposaL. In the Montana proceeding, the Montana Public Service Commission initially reduced NorthWestern Energy's ROE by 25 basis points but later vacated the order on a motion from multiple parties, including NRDC and NorthWestern Energy. The response to this Request was prepared by Ralph Cavanagh, Energy Program Co-Director, Natural Resources Defense Council, in consultation with Jason B. Willams, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 30 REQUEST NO. 28: Of the jurisdictions listed in response to Request No. 24, what jurisdictions decided against implementing a decoupling mechanism? To the extent possible, please explain why a decoupling mechanism was not approved. RESPONSE TO REQUEST NO. 28:The Washington Utilties and Transportation Commission ("WUTC") decided against adopting a decoupling mechanism for PacifiCorp in 2006, principally on the ground that the record was insufficient to resolve multi-state cost allocation issues (the WUTC signaled an intent to revisit decoupling in 2010 and proceedings are now pending for Puget Sound Energy and Avista, in both of which Mr. Cavanagh is a witness). The Utah Public Service Commission approved decoupling for Questar Gas but decided against adopting a joint NRDC/staff proposal for PacifiCorp in 2010, principally on the ground that the proposal was untimely. The New Mexico Public Regulation Commission deferred action on PNM's decoupling proposal as part of a settlement. In Ilinois, the Illnois Commerce Commission opted to pursue the objectives of decoupling by moving toward straight fixed-variable rate design rather than the true-up approach used in Idaho and recommended by Mr. Cavanagh. The response to this Request was prepared by Ralph Cavanagh, Energy Program Co-Director, Natural Resources Defense Council, in consultation with Jason B. Willams, Corporate Counsel, Idaho Power Company. DATED at Boise, Idaho, this 6th day of January 2012. ) IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 31 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 6th day of January 2012 I served a true and correct copy of 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 Weldon Stutzman Deputy Attorney General Idaho Public Utilities Commission 472 West Washington (83702) P.O. Box 83720 Boise, Idaho 83720-0074 NW Energy Coalition Nancy Hirsh, Policy Director NW Energy Coalition 811 First Avenue, Suite 305 Seattle, Washington 98104 Idaho Conservation League Benjamin J. Otto Idaho Conservation League 710 North Sixth Street Boise, Idaho 83702 Carl B. Linvill, Ph.D. Director of Integrated Planning and Analysis Aspen Environmental Group 2764 North Green Valley Parkway, Suite 266 Henderson, Nevada 89014-2120 Micron Technology, Inc. Thorvald A. Nelson Frederick J. Schmidt Brian T. Hansen MaryV. York HOLLAND & HART, LLP 6380 South Fiddlers Green Circle, Suite 500 Greenwood Vilage, Colorado 80111 -l Hand Delivered U.S. Mail _ Overnight Mail FAX -l Email weldon.stutzmanØ2puc.idaho.gov Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email nancyØ2nwenergy.org Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email bottoØ2idahoconservation.org Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email clinvillØ2aspeneg.com Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email tnelsonØ2hollandhart.com fschmidt((hollandhart.com bhansen((hollandhart.com myork((holland hart. com I nbuchanan((holland hart. com IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 32 Richard E. Malmgren Senior Assistant General Counsel Micron Technology, Inc. 800 South Federal Way Boise, Idaho 83716 Hand Delivered -2 U.S. Mail _ Overnight Mail FAX -2 Email remalmgrencæmicron.com.~ d~iams IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 33