20120525IPC to Staff 7-25.pdf

IDAHO PAER®
RE CE V F, An IDACORP Company
2Lfl2I4A.Y:.25 PM t 24
JULIA A. HILTON
KI T- Corporate Counsel TtL J M1tSSK jhiIton(äidahopower.com
May 25, 2012
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. [PC-E-1 2-15
2011 Demand-Side Management Expenses - Response to the Idaho Public
Utilities Commission Staffs Second Production Request
Dear Ms. Jewell:
Enclosed for filing please find an original and three (3) copies of Idaho Power
Company's Response to the Second 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 Second 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 :csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
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: [phone]
Facsimile: [phone]
jhiItonidahopower.com
Inordstromidahopower.com
RECEIVED
212 ?IAY 25 PM : 2
C--, r.J.L.L.
UTILITIE:s COMMtSSIQN
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
RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO
POWER COMPANY
COMES NOW, Idaho Power Company ("Idaho Power' or "Company"), and in
response to the Second Production Request of the Commission Staff to Idaho Power
Company dated May 9, 2012, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -1
REQUEST NO. 7: According to the 2011 DSM Annual Report, the Company did
not cycle some A/C units as part of the A/C Cool Credit program due to the paging and
advanced metering infrastructure (AMI) system upgrade issues. Please provide the
total number and total percentage of the NC Cool Credit customers that were not
cycled during 2011.
RESPONSE TO REQUEST NO. 7: Because the switches only have one-way
communication, the Company cannot know exact numbers and percentages of A/C
Cool Credit customers that were not cycled in 2011. The Company estimates that
11,000 or 30 percent of A/C Cool Credit customers did not receive the cycling signal in
2011, though some of those paging switches received the signal intermittently
throughout the summer.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -2
REQUEST NO. 8: How does IPC propose to continue the A/C Cool Credit
program on Mountain Home Air Force Base (MHAFB) for the 2012 summer season?
Please explain the Company's decision, the cost of the proposed solution, and the
effect on cost-effectiveness.
RESPONSE TO REQUEST NO. 8: The Company does not know if it can
continue to offer the A/C Cool Credit program on MHAFB. Idaho Power is working with
the paging company to provide paging services to MHAFB. The paging company
conducted a study at the MHAFB to see where equipment could be installed to pick up
the paging signal and to broadcast it to the devices, and to verify that the location could
provide good coverage. The paging company found a location and the MHAFB agreed
to the location contingent on a signed contract with the Air Force. Contract negotiations
are currently underway which would allow the paging company to install equipment on
the base. If contract negotiations are completed soon, Idaho Power will be able to
continue cycling the A/C Cool Credit switches on the MHAFB.
Idaho Power included a cost estimate of $16,230 for installing paging equipment
on MHAFB in its cost-effectiveness analysis for the Company's Demand-Side
Management 2011 Annual Report ("2011 DSM Annual Report"). The impact on the
cost-effectiveness was not material.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -3
REQUEST NO. 9: Please explain how the Company will test AMI-compatible
switches prior to the A/C Cool Credit cycling season.
RESPONSE TO REQUEST NO. 9: Because of the program rules contained in
the tariff for A/C Cool Credit, the Company cannot run a test event prior to June 1.
However, the Company has taken several measures to increase A/C Cool Credit
program reliability. Idaho Power is committed to upgrade all NC Cool Credit switches
to AMI compatible switches. The majority of this conversion will be completed prior to
the 2012 cycling season, but will continue throughout the year based on switch
availability. Furthermore, the entire system will be converted prior June 1, 2013. Those
participants with paging switches that the Company believes are not receiving the signal
will be replaced first. This will provide the ability to send and receive test signals to all
AMI switches prior to the curtailment season. The Company has also moved the
dispatch software used to call events from a test environment into the production
environment, which will enable all the AMI switches to be dispatched. For the 2012
cycling season, Idaho Power will query and analyze the hourly AMI meter data for all
participants. This will help the Company to determine which participants, if any, are not
receiving the cycling signal.
Additionally, the Company has contracted with a third-party to develop a
readiness plan to be used each year prior to the curtailment season. This plan will be
provided to Idaho Power prior to June 1, 2012, and will specify processes and
procedures that will ensure system readiness prior to each curtailment season.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -4
REQUEST NO. 10: Please quantify and explain the customer incentive structure
used in the FlexPeak Management Program and include the number of participants in
each incentive category.
RESPONSE TO REQUEST NO. 10: The incentives paid to participants in the
FlexPeak Management program are made by EnerNOC, Inc., based on agreements
with each participant. Idaho Power does not know the amount of these incentives. At
the end of the 2011 cycling season, there were 103 service locations participating in the
program.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -5
REQUEST NO. 11: Page 11 of the Annual Report states that "purchased
services include payments made to third-party contractors who help deliver Idaho
Power's programs." How much of the $4,888 listed as Purchased Services in FlexPeak
Management (Supplement 1: Cost-Effectiveness, pg. 8) were payments made to
EnerNOC?
RESPONSE TO REQUEST NO. 11: None of the $4,888 listed under Purchased
Services under the FlexPeak Management program was paid to EnerNOC.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -6
REQUEST NO. 12: Has the Northwest Energy Efficiency Alliance (NEEA)
provided support to Idaho small to medium sized businesses to promote Continuous
Energy Improvement (CEI) during the past two years? If so, please provide the number
of businesses and describe the Company's participation in the program, if any.
RESPONSE TO REQUEST NO. 12: Yes, NEEA has an initiative in the industrial
sector that is focused on creating strategies to engage small to medium sized
manufacturing business ("SMB") in strategic energy management practices. A key
strategy is to expand the deployment of NEEA's GEl concepts into the SMB market.
This is being accomplished by leveraging manufacturing extension partnerships. In
Idaho, TechHelp is the manufacturing extension partner.
In November of 2010, NEEA held a two-day training session for TechHelp at
Boise State University on this initiative. Idaho Power had an Energy Efficiency Engineer
attend the two-day training session and provided information on Idaho Power's
commercial and industrial energy efficiency programs. Idaho Power is aware of two
customers in its service territory that formally engaged in the SMB initiative through
TechHelp.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -7
REQUEST NO. 13: Irrigation Efficiency claims a net-to-gross (NTG) value of
100% because "Deemed savings from the RTF already accounts for net realized
energy savings" (pg. 115, Supplement 1: Cost-Effectiveness). However, the [Regional
Technical Forum (RTF)] only provides deemed savings for measures in the Menu
Incentive Option. Please explain why the Company claims 100% NTG for the Custom
Incentive Option in which savings are calculated by IPC staff.
RESPONSE TO REQUEST NO. 13: Please see the attached Excel file showing
the cost-effectiveness of the Irrigation Efficiency Rewards Program. The Excel file is
organized as follows:
Tab I - Irrigation Efficiency Program. This tab mirrors the cost-
effectiveness page from Supplement 1: Cost-Effectiveness ("Supplement 1") of the
Company's 2011 DSM Annual Report. This program cost-effectiveness was also
provided as Attachment 4 in the Company's response to the Idaho Public Utilities
Commission Staff's ("Staff') Production Request No. No. 6.
Tab 2 - Irrigation Eff (Menu & Custom). This tab shows the break
out of the menu and custom incentive options. A NTG is applied to the custom
incentive option and the cost-effectiveness ratios have been recalculated.
Tab 3 - IRP DSM Alt. Costs. Financial inputs for cost-
effectiveness analysis from the 2011 Integrated Resource Plan are provided in this
worksheet.
The Company has not applied a NTG value to the custom incentive option but
will do so going forward. The Company has recalculated the cost-effectiveness of the
program by applying the NTG of 75 percent (the realization rate used by the RTF) on
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -8
the savings and the costs associated with the custom incentive option. As a result, the
Utility Cost test ratio decreases from 4.71 to 4.22, the Ratepayer Impact Measure test
ratio decreases from 1.59 to 1.53, and the Participant Cost Test ("PCT") ratio decreases
from 1.33 to 1.18. The Total Resource Cost ("TRC") test ratio increases from 1.63 to
1.90.
The increase to the TRC is directly related to how the NTG is applied in the
formula for the TRC. Idaho Power follows the California's Standard Practice Manual's
approach to calculating the TRC ratio. In 2007, the California Public Utilities
Commission issued a clarification memo explaining the use of the NTG and its intent to
remove the free-rider cost from the TRC formula. Because the majority of the customer
costs associated with this program come from the custom incentive option and the
majority of the savings is derived from the menu option, this results in a disproportional
reduction of both the TRC and the energy savings benefits resulting in an increase to
the TRC.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -9
REQUEST NO. 14: Page 97 of the Demand Side Management (DSM) 2011
Annual Report reads "Payments [under the Menu Incentive Option of Irrigation
Efficiency Rewards] are calculated on a predetermined average kWh savings per
measure. In some cases, energy savings estimated in the Menu Incentive Option are
adjusted downward to reflect how the components are actually being used. I No
changes occurred to the assumptions that drive the cost-effectiveness of the measures
that are part of the program." If the reduced energy savings are not used to calculate
incentive payments and are also not used to change assumptions for cost-
effectiveness calculations, please explain how the reduced energy savings are used.
RESPONSE TO REQUEST NO. 14: The annual energy savings reported for
Irrigation Efficiency Rewards Program are the summation of savings from the custom
incentive option and menu incentive option. The savings reported from the menu
incentive option are based on the deemed measure savings, and each project is
reviewed individually. For some projects, the reported savings has been adjusted
downward from the deemed savings as indicated on page 97 of the Company's 2011
DSM Annual Report. The total savings reported is used in the overall program cost-
effectiveness analysis as shown in Appendix 4, page 115 of Supplement 1.
The sentence, "no changes occurred to the assumptions that drive the cost-
effectiveness of the measures that are part of the program" references assumptions that
drive the measure cost-effectiveness analysis on pages 116-117 (menu incentive
option) and 118-122 (green motors) of Supplement 1. These assumptions (with the
exception of the administrative $/kilowatt-hour ("kWh")) are unchanged from 2010 and
come from the RTF. Due to the prescriptive nature of the menu incentive option, the
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -10
measure cost-effectiveness analysis is based on deemed values. These values are the
typical savings and costs that a customer may experience when he/she implements a
measure; however, the actual savings or costs may vary for individual projects.
On a case-by-case basis, energy savings reported for a specific menu incentive
option project may be adjusted downward; therefore, the savings may differ from the
deemed values listed on pages 116-117 of the 2011 DSM Annual Report. The
adjustments made during the individual review of the projects do not impact the
measure cost-effectiveness because, as a prescriptive program, the measure analysis
is performed on deemed values. However, depending on the magnitude of these
adjustments, it may impact the program cost-effectiveness shown on page 115 of
Supplement I by lowering the cost-effectiveness ratios. Without these adjustments, the
savings reported for the program would have been higher than what was reported.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -11
REQUEST NO. 15: The RTF website reports that savings estimates for
Irrigation Hardware, which are cited in the Company's Irrigation Efficiency Rewards
program, are "out of compliance" as of February 1, 2011. However, the Company
states the measures are "currently under review" (DSM 2011 Annual Report, pg. 98).
Why does the Company use savings estimates that are out of compliance?
RESPONSE TO REQUEST NO. 15: Idaho Power uses the best available
information for reporting program and measure savings and costs. For the Irrigation
Efficiency Rewards Program, no "non-compliance" values were available; therefore, the
deemed values from the RTF, while out of compliance, were the best information the
Company has available for reporting and analysis. The Company was involved in the
review performed by the RTF to assess the irrigation hardware measures and has since
moved forward with its own research plan to update the input assumptions for these
measures.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -12
REQUEST NO. 16: Please provide a spreadsheet that includes the project
name, project application date, measure/project installation date, invoice date and
amount, date and amount of incentive payment, and name of incentive recipient for all
Easy Upgrades projects.
RESPONSE TO REQUEST NO. 16: The confidential Excel file provided on the
confidential CD contains project information for all Easy Upgrades projects paid in 2011.
The confidential CD will be provided to those parties that have executed the Protective
Agreement in this matter. Idaho Power does not store its program information in the
manner that Staff has requested it be provided; however, the data provided is as close
as possible to the information requested by Staff. Special accounting entries are
excluded from the list of projects so the value of the incentives will not sum to the exact
amount that is reported in Idaho Power's 2011 DSM Annual Report. The confidential
Excel file contains two separate worksheets. One tab is labeled "Menu Lighting and
Non-Lighting" and the other is labeled "Lighting Tool." Projects in the "Menu Lighting
and Non-Lighting" tab correspond to projects for which it was not necessary to use the
lighting tool or were non-lighting measure projects.
Participants in the Easy Upgrades program submit a pre-approval application for
projects that contain a variable frequency drive, non-standard lighting measures, or
when the incentive is $1,000 or greater. The absence of a pre-approval date in the data
can be caused by a number of reasons. Nineteen out of 1,722 projects in the Easy
Upgrades noted on the confidential Excel file do not have pre-approval dates when it
appears that they should. Sometimes a project begins with an estimated incentive
under $1,000 and the scope of the project expands during the retrofit process and the
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -13
incentive ends up exceeding the $1,000 threshold. Some new contractors do not
realize that pre-approval is needed for some projects and not others. Idaho Power's
clarification on the definition of "pre-approval" began in January 2011; therefore, some
of the projects that crossed the calendar year did not have pre-approval dates or the
contractors were unaware of the new program parameters until later in 2011. As the
program specialist continues contractor training and legacy projects are completed, the
pre-approval process continues to become more routine and the data more complete.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -14
REQUEST NO. 17: Please provide the list of lighting measures that were
expanded under the Easy Upgrades program in 2011, as referenced on page 78 of the
DSM 2011 Annual Report.
RESPONSE TO REQUEST NO. 17: The reference to Easy Upgrades expanded
lighting measures in the Custom Efficiency's "2011 Activities" section of Idaho Power's
2011 DSM Annual Report refers to the ability to accept non-standard (custom) lighting
measures under the Easy Upgrades program in 2011.
Generally, for a project to qualify under Custom Efficiency, it must achieve
annual energy savings of 100,000 kWh or greater. However, if a project contains
measures not offered under the Easy Upgrades program, the threshold is lowered to
20,000 kWh. Based on feedback from Idaho Power's customers and trade allies, a non-
standard lighting option was added to Easy Upgrades in 2011. This addition allowed
program engineers in the Custom Efficiency program to focus on larger, more complex
projects. Currently, lighting projects with annual energy savings of 100,000 kWh or
greater can be completed under either the Easy Upgrades or the Custom Efficiency
programs.
Easy Upgrades still offers incentives for a prescriptive list of standard lighting
options. As stated on page 84 of the 2011 DSM Annual Report, participants in the Easy
Upgrade program are required to complete a lighting tool for all lighting project
submissions. In addition, a participant is able to submit information for lighting projects
that do not fall under the Easy Upgrade's standard lighting list. The lighting tool
calculates the cost-effectiveness of the non-standard lighting project. If it passes, and
meets all other program criteria, the program will provide an incentive of $0.12 per kWh
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -15
of first year savings not to exceed 70 percent of the project cost in alignment with the
Custom Efficiency program.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -16
REQUEST NO. 18: Please indicate if the kWh threshold for qualifying projects
changed for either Easy Upgrades or Custom Efficiency between 2010 and 2011. If so,
please indicate the change for each and reason for the change.
RESPONSE TO REQUEST NO. 18: Please see the Company's response to
Staffs Production Request No. 17.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -17
REQUEST NO. 19: Please provide copies of all pre-approval applications,
lighting tool calculations, and signed and dated memorandums of understanding
(MOUs) (including Terms and Conditions) for all Idaho Office of Energy Resources
(OER) projects.
RESPONSE TO REQUEST NO. 19: Please note that no Idaho Energy
Efficiency Rider funds were spent or transferred for OER projects in 2011. However,
some pre-approved OER projects will be processed in 2012. Idaho Power will make the
requested information available for Staff's review at Idaho Power's corporate
headquarters. Please contact Doug Jones (388-2615) or Camilla Victoria (388-5821) to
schedule an on-site review.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -18
REQUEST NO. 20: Please provide copies of all invoices which OER submitted
to IPC for administrative payments and a list of all administrative payments which were
made to OER.
RESPONSE TO REQUEST NO. 20: In this case, Idaho Power is requesting a
prudence determination of 2011 expenses. OER did not submit any invoices for
administrative payments for 2011. Thus, no administrative payments were made to
OERin 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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -19
REQUEST NO. 21: Page 112 of Supplement 1: Cost-Effectiveness cites "IPC
DSM" Potential Study by Nexant, Inc. 2009" as the source for the NTG percentage.
Please explain how Nexant calculated this figure and how it incorporates the effects of
federally funded projects.
RESPONSE TO REQUEST NO. 21: Nexant did not calculate the NTG
percentages sourced in Supplement 1. As mentioned on page 2-3 of the Demand-Side
Management Potential Study - Volume 1, Nexant used NTG ratio values recommended
by the California Public Utilities Commission. Additionally, Nexant added the following
footnote on page 2-3:
1 1n 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 2011.
Federal funds, such as tax credits, are not incorporated into NTG; they are
accounted for in the PCT and the TRC test as a benefit. See pages 6.1 and 6.6 of the
National Action Plan for Energy Efficiency's Understanding Cost-Effectiveness of
Energy Efficiency Programs dated November 2008. The document can be viewed via
the following link: www.epa.gov/clean[gy/documents/suca/cost-effectiveness.pd .
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -20
REQUEST NO. 22: Please explain why Supplement Cost-Effectiveness does
not include measure-level cost-effectiveness information for Weatherization Assistance
for Qualified Customers (WAQC). Also, please provide a table with detailed cost-
effectiveness information for each measure in WAQC as was provided for all other
programs.
RESPONSE TO REQUEST NO. 22: Please note that the WAQC is not funded
by the Idaho Energy Efficiency Rider and the Company is not requesting a prudence
determination of WAQC funding in this case.
The detailed measure cost-effectiveness analysis for WAQC requested by Staff
has not been conducted; however, Idaho Power files the Weatherization Assistance for
Qualified Customer Annual Report with the Commission on April 1 of each year. The
report is available via the following link:
httD :/Iwww. idahopower.com/AboutUs/RatesRepulatory/Reports/default.cfm?state=id.
Contained in this report is Table 3, "2011 WAQC review of measure installed" (pages 7-
8). This table contains the levelized cost ($/kWh) for each measure installed. In
addition, this report contains the costs of the measures installed over the average life of
the measure.
As stated on pages 5 and 6 of Supplement I of the 2011 DSM Annual Report,
the program was not analyzed at the measure level due to the multiple interactive
measures and is instead analyzed at a project level. This can occur when the
installation of an energy efficiency measure (e.g., ceiling insulation) has a secondary
effect on another end use (e.g., furnace replacement). As a result, there may be a
decrease or increase to energy consumption in the secondary end use. The homes
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -21
weatherized under the WAQC program may have multiple weathenzation measures
installed. Each home is unique with a different combination of weatherization
measures; therefore, each project must be reviewed and savings assessed individually.
Idaho Power only funds a portion of the measures for each weatherization project and
only reports the energy savings associated with those measures. The inputs associated
with the cost-effectiveness for each project is determined using an energy-savings audit
program known as the Energy Audit 4 ("EA4"). The measures are entered into the EA4,
which computes the savings-to-investment ratio ("SIR") of a project. Idaho Power then
uses the outputs from the EA4 to calculate the cost-effectiveness of the program as
described in the Company's response to Staff Production Request No. 6.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -22
REQUEST NO. 23: Page 65 of the DSM 2011 Annual Report reads, "Actual
savings and measure costs submitted by contractors are used in place of deemed
measures to asses cost-effectiveness [for Weatherization Solution for Eligible
Customers (WSEC)]. The actual average annual savings estimates are considered
more accurate than a deemed savings because of the number of inputs applied in the
[Energy Audit 4 (EA4)] data analysis." Do the "actual savings" refer to the savings
estimates of the EA4 tool? If not, please explain the source of the "actual savings."
RESPONSE TO REQUEST NO. 23: Yes.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -23
REQUEST NO. 24: Please explain how Non-Electric Benefits in the Irrigation
Efficiency Program increased by 300% from 2010 to 2011, while electric savings
increased by 35% and the program budget increased by 7%.
RESPONSE TO REQUEST NO. 24: The non-electric benefits reported in 2011
were significantly higher than in past years primarily due to Idaho Power's improved
estimates of non-electric benefits. These benefits are attributed to labor savings, yield
improvements, and operation and maintenance savings. In 2011, Idaho Power
improved its tracking of non-electric benefits with the implementation of a new more
comprehensive database. Non-electric benefits for the custom incentive option were
tracked for each project during the program specialist's technical review of the project.
In addition, the Company changed how it reported the total project costs in the
custom incentive option of its Irrigation Efficiency Rewards Program. In 2011, the
Company reported total project costs and all associated non-electric benefits rather than
estimating only the costs associated with energy efficiency. As a result, both the total
resource costs and the total non-electric benefits increased.
Finally, as stated on page 3 of the Supplement I of the 2011 DSM Annual
Report, Idaho Power changed the discount rate used to calculate the Net Present Value
("NPV") of participant costs and benefits. The Company believes that using a real
discount rate is more appropriate for customer cost and benefits than using the
Company's Weighted Average Cost of Capital (WACC) because the time value of
money is from the perspective of the customer and not the utility. While Supplement 1
referenced using the real discount rate for participant bill savings, the use of it for the
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -24
non-electric benefits is appropriate because it is still a customer benefit. Using a lower
discount increases the NPV of the benefit and cost.
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 RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -25
REQUEST NO. 25: Please explain why the Irrigation Efficiency Rewards impact
evaluation scheduled for late 2011 - early 2012 was eliminated and not rescheduled.
RESPONSE TO REQUEST NO. 25: The Irrigation Efficiency Rewards Program
impact evaluation originally scheduled for late 2011 to early 2012 has not been
eliminated. As stated in the 2011 DSM Annual Report Supplement 2: Evaluation
Summary, although the evaluation plan is used for scheduling evaluations, the
implementation of specific evaluations will be based on considerations regarding
program needs. In anticipation of the results of the Rocky Mountain Power ("RMP")
evaluation, Idaho Power had initially identified an impact evaluation of the Irrigation
Efficiency Rewards Program for late 2011 to early 2012. When RMP's final report of the
evaluation was released in March 2011, it was evident that the evaluation was focused
on the program's performance and did not provide additional research to update the
deemed savings values for the hardware measures.
As a result, Idaho Power changed the scope of work of its planned impact
evaluation to a research project. On December 27, 2011, the Company contracted with
University of Idaho to conduct a research project for the program. The deliverables
from this project will include research quantifying water savings and corresponding
energy savings resulting from measures associated with the Irrigation Efficiency
Rewards Program menu option. The research will be conducted during the 2012
growing season with associated data and final report due December 1, 2012. This
research is required prior to an impact evaluation of this program.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -26
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 25th day of May 2012.
UIA A. fIL'roN
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -27
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 25 th day of May 2012 I served a true and correct
copy of IDAHO POWER COMPANY'S RESPONSE TO THE SECOND 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
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email karl.kleinpuc.idaho.qov
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email Detercrichardsonandoleary.com
greqrichardsonandoleary.com
Dr. Don Reading Hand Delivered
Ben Johnson Associates, Inc. U.S. Mail
6070 Hill Road Overnight Mail
Boise, Idaho 83703 FAX
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
X Email dreadinci(mindsprinq.com
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email boftoidahoconservation.orq
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email kmilIersnakeriveraIIiance.orq
DNLa-1
Christa Bearry, Legal Assis ant -
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -28