The URL can be used to link to this page

Home My WebLink About20120521IPC to Staff 2-6.pdfI POIIO llVER RECEIVEtD An IDACORP Company [4:55 JULIA A. HILTON DAHL Corporate Counsel UTlLTES 0CM ihiItonidahopower.com May 21, 2012 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilities Commission 472 West Washington Street Boise, Idaho 83702 Re: Case No. IPC-E-12-15 2011 Demand-Side Management Expenses - Second Response to the Idaho Public Utilities Commission Staffs ("Staff') Production Request No. I Dear Ms. Jewell: Enclosed for filing please find an original and three (3) copies of Idaho Power Company's Second Response to the First Production Request of the Commission Staff to Idaho Power Company in the above matter. Also enclosed are four (4) copies each of non-confidential and confidential disks containing information responsive to Staffs First Production Request. Please handle the enclosed confidential information in accordance with the Protective Agreement executed in this matter. Very truly yours, Julia A. Hilton JAH:kkt Enclosures JULIA A. HILTON (ISB No. 7740) LISA D. NORDSTROM (ISB No. 5733) Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-6117 Facsimile: (208) 388-6936 ihiItoncidahopower.com Inordstromidahopower.com RE CE V;: 2UI2 MAY 2 1 PH 14 :55 IDAHO PUBLI ¶JTLtTIES COMMISSION BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR A DETERMINATION OF 2011 DEMAND- SIDE MANAGEMENT EXPENDITURES AS PRUDENTLY INCURRED CASE NO. IPC-E-12-15 IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY COMES NOW, Idaho Power Company ("Idaho Power" or "Company"), and in response to the First Production Request of the Commission Staff to Idaho Power Company dated April 30, 2012, herewith submits the following information: IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -1 REQUEST NO. 2: Please provide the total amount of wages for Idaho Power Company employees included in the DSM tariff rider for the years 2005-2011. RESPONSE TO REQUEST NO. 2: Please see the table below: Year Labor Total 2005 $434,301 2006 $736,519 2007 $1,399,692 2008 $1,965,698 2009 $2,293,136 2010 $2,577,080 2011 $2,637,729 Grand Total $12,044,155 The labor totals in the above table include direct labor expenses and labor loadings paid out of the Idaho Energy Efficiency Rider ("Rider') for 2005-2011. The response to this Request was prepared by Pete Pengilly, Customer Research and Analysis Leader, Customer Operations, Idaho Power Company, in consultation with Julia A. Hilton, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -2 REQUEST NO. 3: Please provide the number of Idaho Power full time employees or full time equivalents paid from the DSM rider funds for the years 2005- 2011. RESPONSE TO REQUEST NO. 3: Please see the table below: Year Total Hrs FTE Hrs Total FTE Equivalents 2005 2006 2007 2008 2009 2010 2011 10,634 17,302 32,706 46,501 49,129 51,097 50,505 1,912 5.6 1,912 9.0 1,912 17.1 1,912 24.3 1,912 25.7 1,912 26.7 1,912 26.4 Grand Total 257,875 The above table is an estimation of the actual number of full-time employees ("FTE") paid out of the Rider. The column labeled Total Hrs is the number of hours actually worked and charged to the Rider. The column labeled FTE Hrs is the total number of working hours in a year, 2080, minus the number of hours for 11 paid holidays and 80 hours of vacation per employee. It does not account for employees who may not have been employed for the entire year. The column labeled Total FTE Equivalents is Total Hrs divided by the FTE Hrs. The response to this Request was prepared by Pete Pengilly, Customer Research and Analysis Leader, Customer Operations, Idaho Power Company, in consultation with Julia A. Hilton, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -3 REQUEST NO. 4: Please provide all DSM evaluation expenses for 2011, including date, vendor, and amount. RESPONSE TO REQUEST NO. 4: Please see the confidential Excel file on the confidential CD containing a detailed query from the Company's general ledger for the 2011 expenses to Account 254201, Other Regulatory Liability - Idaho Energy Efficiency Rider. The confidential CD will only be provided to those parties that have executed the Protective Agreement in this proceeding. Please note that the expenses provided in the Company's response to this Request will not match the amount specified on page 11 of the 2011 Demand-Side Management Annual Report of $379,000, which includes both Idaho and Oregon expenses. Vendor names and amounts paid have been included. This vendor information is confidential, proprietary, and/or has commercial value. Idaho Power requests references to granular data be excluded from any Idaho Public Utilities Commission Staff's ("Staff') reports and/or analysis. The spreadsheet is organized as follows: Tab I - 2011 Evaluation Expenses. This tab contains the detail of all evaluation payments made from the Rider account. Please note columns A through C ("Query Data Classification") identify the program type, task category, and program name for each charge in the "IPC General Ledger Query Data" listing. Columns D through H ("IPC General Ledger Query Data) contain Db2 date, vendor, amount, description, and detailed description, as listed in the Idaho Power general ledger. Columns I through N ("IPC General Ledger Accounting String") identify the accounting string for each charge, as listed in the Idaho Power general ledger. IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -4 Tab 2 - 2011 WO Table. Each program charge is assigned to a specific work order (tab 1, column M) and work order task (tab 1, column N). This table lists the program name (tab 1, column C) associated with each work order number and the task category (tab 1, column B) associated with each work order task in the query listing. Tab 3 - Cost Element Definitions. The Company uses detailed cost elements (DCE) to further define each expense. The Company's cost element definitions can be seen on this tab. The response to this Request was prepared by Pete Pengilly, Customer Research and Analysis Leader, Customer Operations, Idaho Power Company, in consultation with Julia A. Hilton, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -5 REQUEST NO. 5: Please describe the process used in selecting a vendor for program evaluation. RESPONSE TO REQUEST NO. 5: Vendors are selected to conduct evaluations through a competitive Request for Proposals ("RFP") process managed by the Company's Strategic Sourcing professionals. This process includes sending the RFP directly to over thirty known evaluation vendors, posting the RFP to the Association of Energy Services Professionals website, and posting it to the Idaho Power website. Attached to the RFP is a Notice of Intent to Bid ("NOITB") form that potential vendors are asked to return to Idaho Power by a published date along with any clarifying questions. The NOITB forms are used to assure that respondents are part of the pool of known respondents and receive answers to these questions, along with any changes to the RFP before the due date. Also attached to the RFP is a list of data security questions and a copy of the Company's Professional Services Agreement ("PSA"). Respondents are required to provide answers to data security questions and any exceptions to the PSA as part of their response to the RFP. Once responses to the RFP are received, the Strategic Sourcing professionals send the applications to the Energy Efficiency Evaluator ("EEE") who forwards the responses to individuals on the selection committee for individual scoring. This internal committee usually consists of five persons from various areas of responsibility at Idaho Power. A weighted scoring technique is used along with scoring categories, including experience of the firm, experience of the individuals identified on the evaluation team, evaluation methodology, comprehensive description of evaluations, tasks and deliverables, and project budget. The EEE also reads and scores each proposal as a IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -6 control mechanism, but this score is not included in the selection decision. The accumulated scores from the selection committee are then averaged and each vendor is ranked based on these averages. These scores and associated ranking is then distributed back to the selection committee members for review and comment. A second selection committee meeting is then held to discuss the scores and rankings in detail, and if necessary, a short list is developed which may include two or more vendors. When a short list is developed, a Strategic Sourcing professional contacts these vendors and establishes appointments for conference calls with the selection committee. A list of clarifying questions is also sent to short list vendors so they may prepare for this conference call. After the conference calls have been completed, another selection committee meeting is held to come to a majority decision and select the final vendor. This decision is made by taking into consideration all scoring, the conference call interview, final budget, data security capabilities, exceptions to the PSA, and other pertinent factors, depending on the type of evaluation being conducted. The response to this Request was prepared by Pete Pengilly, Customer Research and Analysis Leader, Customer Operations, Idaho Power Company, in consultation with Julia A. Hilton, Corporate Counsel, Idaho Power Company. IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -7 REQUEST NO. 6: Please provide the cost effectiveness work papers and calculations for each DSM program in Excel format with all formulas intact. RESPONSE TO REQUEST NO. 6: Please see the confidential Attachment I - FlexPeak Management Excel file, DR FPM Cost-Effectiveness (FlexPeak Management), provided on the confidential CD which contains EnerNOC information that is confidential, proprietary, and/or has commercial value. The confidential CD will only be provided to those parties that have executed the Protective Agreement in this proceeding. Idaho Power requests references to granular data be excluded from any Staff reports and/or analysis. Please also see Attachment 2 - DR ACCC Cost-Effectiveness (AC Cool Credit), Attachment 3 - DR IPR Cost-Effectiveness (Irrigation Peak Rewards), and Attachment 4 - EE Program Cost-Effectiveness (All energy efficiency programs) used to create the program cost-effectiveness pages for Idaho Power's 2011 Demand-Side Management Annual Report: Supplement 1 ("Supplement 1"). The workbooks are arranged as follows: Attachment 2 and 3 tabs: Summary - A summary of the program life cost-effectiveness based on the assumptions provided on each tab. This summary sheet appears in Supplement 1. Inputs - Unique program assumptions which include, but are not limited to, program life, number of events, participation levels, and incentive. . BC Ratios - Combines results from the Program —Benefits and Program—Cost tabs and calculates annual and program life cost-effectiveness. IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -8 Program —Benefits - Combines historical and forecasted performance and applies alternative costs from the IRP_DSM_Alt._Costs tab. Program —Costs - Combines historical and forecasted expenses. Participants - Combines historical and forecasted participation levels, demand reduction, shifted energy costs, number of events, and number of event hours. IRP_DSM_Alt._Costs - Financial inputs for cost-effectiveness analysis from the 2011 Integrated Resource Plan. Attachment 4 tabs: Programs - Each program appears in its own tab which mirrors the program cost-effectiveness page from Supplement 1. Each tab also calculates the energy benefits by applying the alternative costs from the IRP_DSM_Alt._Costs tab and program load shape. Some tabs may include additional calculations. . IRP_DSM_Alt_Costs - Financial inputs for cost-effectiveness analysis from the 2011 Integrated Resource Plan. In developing the energy efficiency program cost-effectiveness pages for Supplement 1, one workbook is created and is linked to other workbooks that provide some of the data for Supplement 1, including the calculation of the avoided costs. These links are used to ensure consistency in the program inputs across all documents. In preparing the response to this Request, the information on each of the workbooks has been consolidated into one workbook (EE Program Cost-Effectiveness) to ensure that the calculations in the worksheets function properly without links to other worksheets. IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -9 During the preparation of the response to this Request several minor errors were discovered. None of the discrepancies materially changed the cost-effectiveness of any program. For the programs with discrepancies described below between Supplement I and DR FPM Cost-Effectiveness and EE Program Cost-Effectiveness the spreadsheet labels and the cells are highlighted in yellow. Home Improvement Program. Program benefits are understated in Supplement I which slightly increases the Utility Cost ("UC") ratio from 2.64 to 2.66, the Total Resource Cost ("TRC") ratio from 0.76 to 0.77, and the Ratepayer Impact Measure ("RIM") ratio from 0.97 to 0.98. In order to calculate the cost-effectiveness of a program, a dollar value must be calculated for the annual energy savings to determine the program's benefit in the benefit-cost ratio. The program benefit is the net present value ("NPV") of the annual program savings multiplied by the Company's DSM alternative costs over the life of the program. The DSM alternative costs can be found in the 2011 Integrated Resource Plan, Appendix C - Technical Appendix. Because the DSM alternative costs are only projected through 2030 in the IRP, the remaining years are escalated using the IRP financial escalator of three percent. In the original calculation for Supplement 1, the program's 45th year of benefits, 2055, was inadvertently not included in the calculation of the benefits. Irrigation Efficiency Rewards. Program benefits are understated in Supplement I which results in a slight increase to the TRC ratio from 1.55 to 1.63 and the Participant Cost Test ("PCT") ratio from 1.24 to 1.33. IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -10 Non-electric benefits for the program are calculated based on estimates of the annual yield benefit, labor and maintenance savings, and water savings for custom and menu projects. Because these savings persist over the life of the program, the NPV of the non-electric benefits are included in the calculations for the TRC and PCT ratios. The 8th year of benefits was inadvertently not included in the calculation of benefits for this program. Additionally, in the process of creating the publishable version of Supplement 1, the information from the Excel workbook is manually entered into the final Word document. While transferring the information from Excel to Word, and during the review process, several last minute corrections were made to the Word document. As a result, some of the changes were not incorporated into the final, printed version of Supplement 1. There is no impact to the cost-effectiveness ratios as these were correctly updated in the executable Excel files prior to the final printing of Supplement 1. These differences can be seen in FlexPeak Management, Energy House Calls, Rebate Advantage, and Custom Efficiency. Finally, while reviewing the Measure Equipment and Installation Costs listed in the Weatherization Assistance for Qualified Customers (WAQC) program, Idaho Power realized the TRCs were overstated based on the way that the UC dollars were entered into the workbook, because the dollars contributed by Idaho Power were reflected as a program administrative cost rather than a program incentive. After adjusting these inputs, the TRC ratio increased from 1.29 to 1.96. IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -11 The response to this Request was prepared by Pete Pengilly, Customer Research and Analysis Leader, Customer Operations, Idaho Power Company, in consultation with Julia A. Hilton, Corporate Counsel, Idaho Power Company. DATED at Boise, Idaho, this 21st day of May 2012. 4UL7I'AA. HI1TON A'tt'orney for Idaho Power Company IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -12 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 21st day of May 2012 I served a true and correct copy of IDAHO POWER COMPANY'S SECOND 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 Karl Klein Deputy Attorney General Idaho Public Utilities Commission 472 West Washington (83702) P.O. Box 83720 Boise, Idaho 83720-0074 Industrial Customers of Idaho Power Peter J. Richardson Gregory M. Adams RICHARDSON & O'LEARY, PLLC 515 North 27th Street (83702) P.O. Box 7218 Boise, Idaho 83707 Dr. Don Reading Ben Johnson Associates, Inc. 6070 Hill Road Boise, Idaho 83703 Idaho Conservation League Benjamin J. Otto Idaho Conservation League 710 North Sixth Street Boise, Idaho 83702 Snake River Alliance Ken Miller Snake River Alliance P.O. Box 1731 Boise, Idaho 83701 Hand Delivered U.S. Mail Overnight Mail FAX X Email karl.kleincøuc.idaho.ciov Hand Delivered U.S. Mail Overnight Mail FAX X Email Pete r(ärichardsonandolearv.com Qreg(nchardsonandoIearv.com Hand Delivered U.S. Mail Overnight Mail FAX X Email dreadinqmindsDnnc1.com Hand Delivered U.S. Mail Overnight Mail FAX X Email bottoidahoconservation.orci Hand Delivered U.S. Mail Overnight Mail FAX X Email kmillercsnakeriveralliance.ori Christa Bearry, Legal As IDAHO POWER COMPANY'S SECOND RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -13