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HomeMy WebLinkAbout20130205IPC to Staff 11-13,16,17,22,25.pdfA6.1" IDAW 99POWER0 L FEB LISA D. NORDSTROM - An IDACORP Company Lead Counsel Inordstrom(äd j ahopower.com uTtLtT:s February 5, 2013 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilities Commission 472 West Washington Street Boise, Idaho 83702 Re: Case No. IPC-E-12-29 Temporary Suspension of Demand Response Programs - Idaho Power Company's Responses to the Commission Staffs First Production Request Nos. 11, 12, 13, 16, 17, 22, and 25 Dear Ms. Jewell: Enclosed for filing in the above matter are an original and three (3) copies of Idaho Power Company's Responses to the Commission Staff's First Production Request Nos. 11, 12, 13, 16, 17, 22, and 25. In addition, enclosed are four (4) copies of a disk containing data responsive to Staff's Production Request No. 17. Very truly yours, Lisa D. Nordstro LDN :evp Enclosures 1221 W. Idaho St. (83702) P.O. Box 70 Boise, ID 83707 rf fl LISA D. NORDSTROM (ISB No. 5733) JULIA A. HILTON (ISB No. 7740) Idaho Power Company 1221 West Idaho Street (83702) iuO P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-5825 Facsimile: (208) 388-6936 Inordstrom(idahopower.com ihiItonidahopower.com Attorneys for Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AUTHORITY TO TEMPORARILY SUSPEND ITS A/C COOL CREDIT AND IRRIGATION PEAK REWARDS DEMAND RESPONSE PROGRAMS. CASE NO. IPC-E-12-29 IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. 11, 12, 13, 16, 17, 22, AND 25 COMES NOW, Idaho Power Company ("Idaho Power' or "Company"), and in response to the First Production Request Nos. 11, 12, 13, 16, 17, 22, and 25 of the Commission Staff to Idaho Power Company dated January 31, 2013, herewith submits the following information: IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. 11, 12, 13, 16, 17, 22, AND 25-1 REQUEST NO. 11: Please provide a detailed cost breakdown of the $600,000 to $900,000 in program related expenses for 2013 referenced on page 19 of Theresa Drake's testimony. Please include a specific reference for the vendor contracts. RESPONSE TO REQUEST NO. 11: The cost estimates in Ms. Drake's testimony were preliminary. These estimates were made prior to negotiations with Irrigation Peak Reward's third-party contractor. The current total estimate is $500,000. This estimate assumes no incentive payments and includes payment of $403,000 to the third-party contractor for website maintenance and telecommunication costs, and $20,000 for minimal field maintenance on the devices. According to the contractor, on- going website maintenance is necessary to ensure that the website is available when the program is reactivated. The cost estimate also includes Idaho Power labor expenses of $68,000 and an additional $9,000 for mailing, and staff expenses related to irrigation workshops. Please also see the Company's Response to Staff's Production Request No. 13. The response to this Request was prepared under the direction of Theresa Drake, Customer Relations and Energy Efficiency Manager, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. II, 12, 13, 16, 17, 22, AND 25-2 REQUEST NO. 12: Would the Company maximize hours and events of IPR curtailment if there were no variable payment component? Why or why not? RESPONSE TO REQUEST NO. 12: Idaho Power objects to this Request for Production on the grounds that the Request calls for speculation and requests a statement of opinion proscribed by RP 225.01(a). Notwithstanding the foregoing objection, the Company would not maximize the hours and events of the Irrigation Peak Rewards program if there was not a variable incentive. The Irrigation Peak Rewards Program, like all of Idaho Powers demand response programs, is designed to reduce summer peak loads during periods of extremely high demand and minimize or delay the need to build new supply-side resources. (2011 Integrated Resource Plan ("IRP"), page 41.) Because of planning criteria used in the IRP planning process, the value derived from demand response programs is the availability of the capacity to serve load that could not otherwise be served. The programs are cost-effective based on the capacity need as shown in the IRP. The number of dispatch events does not determine the value for cost- effectiveness. In the past when the program did not have a variable incentive, the Company did not maximize the hours and events for the Irrigation Peak Rewards program. Since the dispatch option has been available, out of the available sixty hours per year, the Irrigation Peak Rewards program, excluding the timer option, was dispatched twenty- seven hours in 2009 and twelve hours in 2010. If the Irrigation Peak Rewards program was overused without justification it would cause customer dissatisfaction, encourage opt-outs, and decrease participation, all of IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. 11, 12, 13, 16, 17, 22, AND 25-3 which would affect the amount and reliability of demand reduction going forward. However, with or without a variable incentive, the Company would not hesitate to use the program to its maximum if needed, to serve load that could not otherwise be served. The variable incentive does, however, give a clearer signal to the Company when it should dispatch the Irrigation Peak Rewards program based on economics, because the variable incentive alone is significantly higher than normal market prices or the cost to dispatch Company-owned generation resources. The response to this Request was prepared under the direction of Theresa Drake, Customer Relations and Energy Efficiency Manager, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. II, 12, 13, 16, 17, 22, AND 25-4 REQUEST NO. 13: Ms. Drake asserts that the Company would incur $600,000- $900,000 related to keeping load control devices operational in 2013, for website maintenance, telecommunication costs, and minimal maintenance on the devices. Why does the Company believe it needs to continue to provide these services? RESPONSE TO REQUEST NO. 13: Idaho Power believes that incurring the referenced communication and other maintenance costs represent the lowest cost option for ensuring that the programs can be efficiently and effectively reactivated after a one-year suspension. As noted in the Company's response to Staffs Production Request No. 11, a current estimate of communication and other maintenance costs has been revised downward to approximately $500,000. In Case No. IPC-E-12-29 Idaho Power filed only for a one-year suspension of this program, not a discontinuation of the program. If the program was to become active within a few years or even the next year, the communication and maintenance would be necessary to revive the program. If the devices are turned off to avoid communication and maintenance fees, the Company would incur significant reactivation fees to turn service back on to each end point of the system and these costs would be passed on to Idaho Power and its customers. It should also be noted that during negotiations with the Company's third-party contractor, the contractor suggested that it was skeptical about whether it would keep the platform and service available if Idaho Power were to completely discontinue its contract. The response to this Request was prepared under the direction of Theresa Drake, Customer Relations and Energy Efficiency Manager, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. II, 12, 13, 16, 17,22, AND 25-5 REQUEST NO. 16: On pg. 4 of Ms. Drake's testimony, she claims that the Company investigated various short-term options for its demand response programs. Please provide all alternatives the Company investigated that are not included in the current application. RESPONSE TO REQUEST NO. 16: Prior to reaching the decision to recommend a temporary suspension of the two demand response programs in 2013, the Company considered a number of alternative options. Each idea that was considered involved decreasing the cost of the current programs in the near term. In addition to the alternatives presented in Ms. Drake's testimony, the Company considered modifying the incentive structures with the possibility of retention incentives of various types and levels, negotiating with vendors for alternatives and changes to their contracts, and redesigning demand response programs so they could be activated in years where a need is forecast and suspended or altered in years where no need is anticipated. The Company ultimately decided that the best course of action was the proposal presented in this filing which would maintain the programs' infrastructure while allowing for a collaborative process to evaluate potential modifications to these programs for the future. The response to this Request was prepared under the direction of Theresa Drake, Customer Relations and Energy Efficiency Manager, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. 11, 12, 13, 16, 17, 22, AND 25-6 REQUEST NO. 17: Please provide the data supporting the statement on page 6 of Ms. Drake's testimony that recent heavy load market energy prices led the Company to conclude that an energy only variation of DR would be approximately three percent of the capacity-based alternative cost value. Please provide the corresponding work papers in an executable excel file. RESPONSE TO REQUEST NO. 17: Please see the attached excel file. The response to this Request was prepared under the direction of Theresa Drake, Customer Relations and Energy Efficiency Manager, Idaho Power Company, in Consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. 11, 12,13,16,17,22, AND 25-7 REQUEST NO. 22: Has the Company performed an analysis to determine the effect of program suspension on future customer participation? RESPONSE TO REQUEST NO. 22: No. However, given discussions with irrigation customers at agricultural shows and Idaho Power's staff experience, the Company believes that if the incentive structure has the potential of paying participants a similar incentive to the current program, based on a supply-side resource capacity cost, significant participation from the irrigation customers could be obtained at any time in the future. The response to this Request was prepared under the direction of Theresa Drake, Customer Relations and Energy Efficiency Manager, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. 11, 12, 13, 16, 17, 22, AND 25-8 REQUEST NO. 25: Ms. Drake claims that the A/C Cool Credit program has an average drop-out rate of 14% (p. 15). Over how many years was 14% average calculated? Please provide the dropout rate for each year. Did the Company collect any information as to why customers dropped out? If so, please provide the information. RESPONSE TO REQUEST NO. 25: In 2012 Idaho Power contracted with PECI to conduct a process evaluation for the A/C Cool Credit program. Below is Table 5 from the PECI A/C Cool Credit Process Evaluation report. Table 5 below shows reported churn for the program, both total churn of the program (moves etc.) and customers estimated leaving the program because they are dissatisfied with their participation in the program. Year Total Ended (not including TOO Rate) Moved (not including TOD Rate) Appear Unhappy (Total Ended minus moved) Total Partici pants Total % Churn % Dissatisfied Churn* 2012 YTD 3,577 2,703 874 35,400 10.10% 2.32% 2011 4,048 3,596 452 37,728 10.70% 1.30% 2010 3,644 3,258 386 34,640 10.50% 1.20% 2009 3,141 2,672 469 32,151 9.80% 2.00% 2008 2,688 1,514 1,174 23,505 11.40% 8.57% 2007 1,117 627 490 13,692 8.20% 9.13% 2006 1388 1226 1162 15,369 7.20% 3.00% * calculated as the number of customers that appear dissatisfied, divided by the previous year total participants. In the process of preparing the response to this production request Idaho Power discovered that the Company misinterpreted the table above in estimating the total percent of dropouts at 14 percent. In fact, the correct estimate of the percent of dropouts should be the average of the column labeled "Total % Chum" which is 9.7 IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. 11, 12, 13, 16, 17, 22, AND 25-9 percent. The table uses seven years of data, the seventh year being 2012 year to date, which was not a complete year of data when the report was written. The majority of the dropouts are participants that move. Historically, the average rate of dropping out due to dissatisfaction is 3.93 percent. The average rate of participants who dropout due to moving is 5.77 percent. When participants are unhappy with the program and dropout, comments can be recorded by the programs third-party contractor, Honeywell Utilities Solutions. The data from Honeywell is not in a format that can be queried and summarized; however, the overwhelming reason for participant dropout is discomfort caused by indoor temperature gain during program dispatch. The response to this Request was prepared under the direction of Theresa Drake, Customer Relations and Energy Efficiency Manager, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. DATED at Boise, Idaho, this 5th day of February 2013. 6L-- 'C ZL:/~ LISA D. NORDS11OM Attorney for Idaho Power Company IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. 11, 12, 13, 16, 17, 22, AND 25-10 CERTIFICATE OF MAILING I HEREBY CERTIFY that on the 5th day of February 2013 I served a true and correct copy of the within and foregoing IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. 11, 12, 13, 16, 17, 22, AND 25 upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Donald L. Howell, II Deputy Attorney General Idaho Public Utilities Commission 472 West Washington (83702) P.O. Box 83720 Boise, Idaho 83720-0074 Idaho Irrigation Pumpers Association, Inc. Eric L. Olsen RACINE, OLSON, NYE, BUDGE & BAILEY, CHARTERED 201 East Center P.O. Box 1391 Pocatello, Idaho 83204-1391 Anthony Yankel 29814 Lake Road Bay Village, Ohio 44140 Idaho Conservation League Benjamin J. Otto Idaho Conservation League 710 North Sixth Street Boise, Idaho 83702 Hand Delivered U.S. Mail Overnight Mail FAX _Hand Delivered U.S. Mail _Overnight Mail FAX X Email eIoracineIaw.net _Hand Delivered U.S. Mail _Overnight Mail FAX X Email tony(ãyankeI.net Hand Delivered U.S. Mail Overnight Mail FAX X Email bottocidahoconservation.orq X Email don. howeIl(puc.idaho.ciov IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. II, 12, 13, 16, 17, 22, AND 25- 11 Snake River Alliance Ken Miller, Clean Energy Program Director Snake River Alliance P.O. Box 1731 Boise, Idaho 83701 Hand Delivered U.S. Mail Overnight Mail FAX X Email kmiller(snakeriveralliance.om Elizab'fh -PaynteOLegal Assistant IDAHO POWER COMPANY'S RESPONSES TO THE COMMISSION STAFF'S FIRST PRODUCTION REQUEST NOS. 11, 12, 13, 16, 17, 22, AND 25-12