20150324IPC to Staff 1-10.pdf

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Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-15-03 - New Schedule 82 - Flex Peak Program
ldaho Power Company's Response to the First Production Request of the
Commission Staff
Dear Ms. Jewell:
Enclosed for filing in the above matter please find an original and three (3) copiesof ldaho Power Company's Response to the First Production Request of the
Commission Staff to ldaho Power Company.
Also, enclosed are four (4) copies each of the confidential attachments
containing information responsive to Staffs production requests. Please handle the
confidential information in accordance with the Protective Agreement executed in this
matter.
lf you have any questions about the enclosed documents, please do not hesitate
to contact me.
Very truly yours,
O<,*ilL*/,*,,*
Lisa D. Nordstrom
LDN/KKI
Enclosures
March 24,2015
LISA D. NORDSTROM (lSB No. 5733)
Idaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I nord strom @ ida hopower. com
Attorney for ldaho Power Company
l. 't\ -],
BEFORE THE IDAHO PUBL]C UTILITIES COMMISSION
rN THE MATTER OF |DAHO POWER )
coMPANY',S APPLICATION FOR ) CASE NO. IPC-E-15-03
APPROVAL OF NEW TARIFF SCHEDULE )
82, A COMMERCTAL AND INDUSTRIAL ) IDAHO POWER COMPANY'S
DEMAND RESPONSE PROGRAM (FLEX ) RESPONSE TO THE FIRST
PEAK PROGRAM).) PRODUCTTON REQUEST OF THE
) coMMlssroN STAFF To IDAHO
) POWER COMPANY
)
COMES NOW, ldaho Power Company ("ldaho Powed' or "Compatry"), and in
response to the First Production Request of the Commission Staff to ldaho Power
Company dated March 10,2015, 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 provide a detailed cost comparison between
EnerNOC's Flex Peak Management program and the Company's Flex Peak Program
showing how the Company expects to save $600,000 - $900,000 annually by managing
the commercia! and industrial (ClP) demand-response program itself. Please indicate if
this cost savings comes from reduced incentive payments to participants, elimination of
coaching expense, removal of participant monitoring equipment, or from some other
category. Please provide a detailed explanation of all cost differences.
RESPONSE TO REQUEST NO. 1: Please see the confidential attachment for
ldaho Power's comparison of running the program internally as compared to the
proposal from EnerNOC, lnc. ("EnerNOC").
The ldaho Power analysis is based on the EnerNOC proposal and the
Company's estimate of its costs to administer the program. EnerNOC's costs are based
on the information provided on page 24 of the EnerNOC proposal provided in the
Company's response to the ldaho Public Utilities Commission Staffs Request No. 6.
The cost savings does not come from reduced incentive payments to
participants. EnerNOC has stated publically in 2009 that participating customers
received between $25 and $35 per kilowatt ("kWh")/year depending on the number of
event hours called. ldaho Power plans to pay between $29.25 and $36.93 per kW/year.
ldaho Power does not know what EnerNOC's costs were for coaching or monitoring
equipment.
As shown in the estimate of ldaho Powe/s costs, customer incentives are the
major expense of the program and the estimate for administration costs is higher than
the EnerNOC proposa! due to increased workload for the Company to promote and
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2
administer the program. However, at this time, the Company does not anticipate any
increase in staffing and that the current staff will absorb the increased work load. The
contract services listed under ldaho Powe/s proposal are for software changes to
calculate and pay customer incentives.
The confidential information will only be provided to those parties that have
executed the Protective Agreement in this matter.
The response to this Request is sponsored by Quentin Nesbitt, Energy Efficiency
Program Leader, ldaho Power Company, and Pete Pengilly, Customer Research &
Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3
REQUEST NO. 2: Without hiring additional staff, how does the Company plan to
ensure that participant attrition rates do not cause the Flex Peak program to fall under
35MW? As part of the response, please explain how the Company will train new
participants to provide accurate and reliable demand reduction under the revised
program.
RESPONSE TO REQUEST NO. 2: The Company cannot ensure or guarantee
that participation may not fall under the 35 megawatts ("MW") due to attrition; however,
the Company is committed to the goal of achieving 35 MW by promoting the program to
additional participants as needed. The Company plans to utilize its Major Account
Representatives and Customer Representatives currently employed with ldaho Power
who regularly meet with customers for a variety of reasons including promoting energy
efficiency programs. These meetings will provide an opportunity to promote the Flex
Peak Program and to discuss program details and equipment use or processes that the
customer could alter during events. These Company representatives already serve as
field resources to customers and are well versed in energy efficiency measures and
typical power consuming processes within various customer facilities. For customers
that have more technical or complicated operations within their facility, the Company
also has engineering expertise on staff that is familiar with customer equipment and
processes to assist in finding opportunities to reduce load. The incentive structure itself
should motivate the customer to meet or exceed their nominated amount of load
reduction.
The response to this Request is sponsored by Quentin Nesbitt, Energy Efficiency
Program Leader, ldaho Power Company and Pete Pengilly, Customer Research &
Analysis Leader, 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: ln response to the lndustria! Customers of Idaho Powefs
(lClP's) Production No. 7, the Company states that g out of 25 Flex Peak participants
surveyed commented on the need for and usage of EnerNOC's technology/software for
real time data. Please explain how the Company will assure that customers can
continue to participate effectively without the EnerNOC technology software?
RESPONSE TO REQUEST NO. 3: ldaho Power objects to Staff's
characterization of its response to lClP's Production Request No. 7; ldaho Power
merely provided the informal customer survey responses and did not state "that 9 out of
25 Flex Peak participants surveyed commented on the need for and usage of
EnerNOC's technology/software for real ti me data. "
Under the Company managed Flex Peak Program, the use of real time energy
monitoring is not necessary for participation in demand reduction events or calculation
of a facilities' kW reduction during an event. The Company currently has metering
technology in place to accurately measure the hourly reductions made by participants
during an event. lf past or new participants feel it is necessary to have access to real
time data, the Company can provide pulse output data via the Company's meter that
could allow the participants to access their real time usage. !f a facility considerably
underperforms during events and needs assistance analyzing their event performances,
the Company is willing to provide the participants with post-event usage to identify
trends or other opportunities for reduction.
The response to this Request is sponsored by Quentin Nesbitt, Energy Efficiency
Program Leader, ldaho Power Company and Pete Pengilly, Customer Research &
Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5
REQUEST NO. 4: Page 5 of Mr. Nesbitt's testimony states that there are:
"several small differences" in the services provided by EnerNOC compared to what the
Company will provide. Please identify and explain these differences.
RESPONSE TO REQUEST NO. 4: ldaho Power objects to Staffs
characterization of Mr. Nesbitt's testimony. The "several small differences" mentioned
on page five of Mr. Nesbitt's testimony referred not to services offered, but rather to how
the two programs would differ from one another. These differences are defined in the
proposed Schedule 82, FIex Peak Program, ("proposed Schedule 82") filed in this case
and are listed below for reference:
1. The addition of a 15 hour per week cap on program events referenced in
the proposed Schedule 82, on page 4 under "Program Events."
2. The payment structure for both fixed capacity and variable energy
payments referenced in the proposed Schedule 82 on page 5 under "lncentive
Structure."
3. The baseline calculation defined in the proposed Schedule 82 on page 3
under "Definitions-Origina! Baseline kW."
4. The addition of the Nominated kW incentive adjustment defined in the
proposed Schedule 82 on page 3 under "Definitions-Nominated kW lncentive
Adjustment."
While Idaho Power believes these programmatic differences to be different than
the arrangements EnerNOC and its participating customers agreed to, the Company did
not have visibility into the individual participant contracts and cannot speak to those
details.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 6
The response to this Request is sponsored by Quentin Nesbitt, Energy Efficiency
Program Leader, ldaho Power Company and Pete Pengilly, Customer Research &
Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY. T
REQUEST NO. 5: Page 3 of Mr. Nesbitt's testimony reads: "The Program will be
promoted to past C&! demand response program participants...." Does this mean that
the Company wil! not market the program to customers who have not previously
participated? lf so, how does the Company plan to attract new participants to the
program if the previous participants are not sufficient to meet the 35 MW target? Please
fully explain.
RESPONSE TO REQUEST NO. 5: As per the Demand Response Settlement
Agreement, the Company wi!! provide past participants the opportunity to participate
first. lf ldaho Power believes it needs additional participants to achieve the 35 MW
target, the Company wil! promote the program utilizing its Major Account
Representatives and Customer Representatives as described in the Company's
response to Staffs Production Request No. 2. The Customer Representatives will
market to customers that have either shown interest during prior visits or they will
identify the largest customers who are not participating or customers that the Company
believes may have loads that are conducive to program participation.
The response to this Request is sponsored by Quentin Nesbitt, Energy Efficiency
Program Leader, ldaho Power Company and Pete Pengilly, Customer Research &
Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 8
REQUEST NO. 6: Page 12 of Ms. White's testimony reads: "ldaho Power
compared the [RFP] proposals received to a Company-operated program that served as
a benchmark." Please provide the two proposals and the documents describing the
Company-operated program that served as a benchmark. All three sets of documents
should include detailed operational and cost information.
RESPONSE TO REQUEST NO. 6: Please see confidential Attachments 1 and
2. The Company's documents describing the Company-operated program are
contained in the Company's confidential attachment provided in response to Staffs
Request No. 1 and the proposed tariff Schedule 82.
The confidential information will only be provided to those parties that have
executed the Protective Agreement in this matter.
The response to this Request is sponsored by Quentin Nesbitt, Energy Efficiency
Program Leader, ldaho Power Company and Pete Pengilly, Customer Research &
Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 9
REQUEST NO. 7: Did the Company consider whether smaller participants
(eligible under the Flex Peak program) would be able to provide accurate and reliable
demand reduction without the "coaching services" that EnerNOC previously provided?
See Nesbitt, page 5. Please explain why or why not.
RESPONSE TO REQUEST NO. 7: Yes. The Company believes that smaller
customers can effectively reduce their demand during events without coaching.
Historically the program had some smaller customers that participated and knew what
equipment to turn off to reduce their demand with or without the use of coaching. Some
facilities may underperform regardless of size until they become more familiar with the
program incentive structure. lf customers are unsure about what equipment use or
processes to alter during an event to reduce their demand, the Company has resources
as described in the Company's response to Staffs Production Request No. 2, to assist
customers in identifying possible opportunities to reduce load.
The response to this Request is sponsored by Quentin Nesbitt, Energy Efficiency
Program Leader, Idaho Power Company and Pete Pengilly, Customer Research &
Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1O
REQUEST NO. 8: Did the Company ask any potential smaller customers
(eligible under the Flex Peak program) if they would be likely to participate in the
program without equipment that allows them to monitor their load reduction, or access
to a website where they can view their real-time load data? Please explain why or why
not.
RESPONSE TO REQUEST NO. 8: The Company did not seek input from
customers that were not previously enrolled in the program; however, the Company did
have severa! smaller customers that provided feedback via the informal survey. The
Company believes that if a customer has not participated in the program previously,
they would be unfamiliar with the current program and unable to provide accurate
feedback based on any proposed changes to the program. There have been smaller
participants in the program that know what equipment to turn off or processes to alter in
order to reduce their demand without the use of real time data and the Company
believes other participants are capable of doing the same.
The response to this Request is sponsored by Quentin Nesbitt, Energy Efficiency
Program Leader, ldaho Power Company and Pete Pengilly, Customer Research &
Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY. 11
REQUEST NO. 9: Please provide specific examples detailing the Company's
opportunities to use the Flex Peak program to "cross-market energy efficiency
programs." See Nesbit, page 7.
RESPONSE TO REQUEST NO. 9: The Company has Major Account
Representatives and Customer Representatives that engage with customers on a
regular basis as described in the Company's response to Staffs Request No. 2. These
representatives will be able to promote the Flex Peak Program while also marketing
Idaho Powefs portfolio of energy efficiency programs. ln many cases, Company
representatives have established long-standing relationships with the facility personnel
and promoting the Flex Peak Program is another opportunity for the Company to
engage with customers.
The response to this Request is sponsored by Quentin Nesbitt, Energy Efficiency
Program Leader, ldaho Power Company and Pete Pengilly, Customer Research &
Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REOUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 12
REQUEST NO. 10: Page 8 of Mr. Nesbitt's testimony says that under the Flex
Peak Management program, EnerNOC assumed the risk ("downward financial
adjustment") for under-performance by participants. Mr. Nesbitt further explains that
this risk shifts to participants in the Company-managed Flex Peak program. ln
response to lClP Production No. 7, the Company appears to say that it did not ask past
participants in the Flex Peak Management program if this change would affect their
future participation in the Flex Peak program. Please explain why the Company did not
ask past participants this question. Did the Company ask this question of potential,
smaller participants that are eligible under the Flex Peak program? Please explain why
or why not.
RESPONSE TO REQUEST NO. 10: The Company did not ask past participants
about their thoughts on the downward financial adjustment during the informal survey
conducted in fall 2014 because at that time the incentive structure was not known or
developed. The Company did not ask potential smaller participants about the
downward financial adjustment for the same reasons stated in the Company's response
to Staffs Production Request No. I regarding their unfamiliarly with program
requirements.
The Company believes that the downward financial adjustment is essential under
the ldaho Power program incentive design to ensure that ldaho Power and its
customers are not paying for load reduction that is not achieved. This downward
financial adjustment is similar to the incentive structure of the lrrigation Peak Rewards
program. The downward adjustment gives a participant an incentive to perform to the
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 13
nominated demand during events. ldaho Power believes this helps ensure the intent of
the program is achieved and supports the prudence of incentive payments.
lf participants perform during the season to their nominated levels, they will get
paid accordingly. lf they underperform, they wil! get paid less. Under the proposed
incentive structure, participants will have more accountability for their load reduction
while at the same time they will never be put in a position where the downward financial
adjustment would exceed their total annual incentive payment.
The response to this Request is sponsored by Quentin Nesbitt, Energy Efficiency
Program Leader, ldaho Power Company and Pete Pengilly, Customer Research &
Analysis Leader, ldaho Power Company.
DATED at Boise, tdaho, this 24h day of March 2015.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 14
Attorney for ldaho Power Company
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 24h day of March 2015 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 upon
the following named parties by the method indicated below, and addressed to the
following:
Commission Staff
Karl Klein
Deputy Attomey General
ldaho Public Utilities Commission
472 W est Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
lndustria! Customerc of ldaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
X Hand Delivered
U.S. Mail
Overnight Mail
FAXX Email karl. klein@puc. idaho.qov
Hand Delivered
U.S. Mail
Overnight Mail
FAX
Email [e-mail]
[e-mail]
Hand DeliveredX U.S. Mail
_Overnight Mail
FAXX Email [e-mail]
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 15
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-I5-03
RESPONSE TO STAFF'S REQUEST NO. 1
THIS ATTAGHMENT IS
CONFIDENTIAL
AND WI LL BE PROVIDED
TO THOSE PARTIES THAT
HAVE SIGNED THE
PROTECTIVE
AGREEMENT
IN THIS MATTER
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-15-03
RESPONSE TO STAFF'S REQUEST NO.6
THESE ATTAGHMENTS
ARE CONFIDENTIAL
AND WILL BE PROVIDED
TO THOSE PARTIES THAT
HAVE SIGNED THE
PROTEGTIVE
AGREEMENT
IN THIS MATTER