HomeMy WebLinkAbout20110705PAC to Monsanto Attach 2-89-1.pdfMulti-State Process (MSP)
Class 1 Demand-Side Management Programs
June 6, 2011
Overview
At the request of Idaho Public Utilities Commission staff, Terri Carlock, the MSP Standing
Committee, and other MSP participants have met to consider a proposal to modify the treatment
of the Idaho irrigation load control program and/or Class 1 demand-side management (DSM)
programs in general, in the 2010 Protocol. In addition, a recent Idaho general rate case order
deviated from the Revised Protocol and implemented system-wide allocation of the Idaho
irrigation load control program for setting rates in Idaho.
The Revised Protocol and 2010 Protocol treat all classes of DSM programs as State Resources
(ie., for the purposes of inter-jurisdictional allocation, the costs and reduction in allocation
factors are assigned to the state in which the program resides).
The purpose of these MSP discussions is to determine whether the Idaho irrigation load control
program, and/or Class 1 DSM programs in general, should continue to be treated as State
Resources or should be changed to System Resources.
Class 1 DSM Programs
The Company currently has three Class 1 DSM programs for which capacity savings occur as a
result of active Company control. These programs are (1) the Idaho irrigation load control
program, (2) the Utah irrigation load control program, and (3) the Utah air conditioning load
control program (Cool Keeper). Attachment 1 provides a summary table of these programs. The
number of Class 1 DSM programs is predicted to grow, as the Company has identified additional
programs in its latest integrated resource plan (IRP).
(1) Idaho Irrigation Load Control Program (Idaho Schedules 72 and 72A) – a voluntary load
control program available to agricultural irrigation customers receiving service under the
Company’s Idaho Schedule 10. Participants agree to allow for the curtailment of their
electricity usage in exchange for the receipt of credits on their bill.
In 2003, PacifiCorp implemented an optional Idaho load control program. Load control
devices were mechanical timers that automatically curtailed load at pre-scheduled
intervals. No buy-through or opt-out provisions were in place. In 2007, the Company
introduced a dispatchable option under which irrigation load was controlled remotely via
cellular or radio frequency control devices. Dispatch events could be called by the
Company, with the number of events and the event duration limited by tariff.
Participants also had the ability to opt-out of a limited number of events per year. In
1
ID PAC-E-11-12
Monsanto 2.89 Attachment Monsanto 2.89 -1
Attach Monsanto 2.89 -1.pdf Page 1 of 7
2007, the dispatchable option was offered as a pilot program with limited participation.
The table below provides the participating load since the pilot in 2007:
Season
(June 1 to August 31)
Participating Load
(MW)*
2007 65
2008 203
2009 254
2010 283
Source: PacifiCorp Application in Idaho Case No. PAC-E-11-06 dated January 20, 2011 and Cadmus
Impacts of Rocky Mountain Power’s Idaho Irrigation Load Control Program dated March 24, 2011
* Sum of participating customers average two year billing demand for June, July and August
During 2008 and 2009, the Company began to notice voltage excursions1 during dispatch
events. In 2010, the Company began to phase in and out of dispatch events to try to
minimize these excursions. While the phasing approach addressed the issue at the time
of curtailment and when the loads were restored, the Company was still unable to take the
entire participating load off during the peak time due to the magnitude of participating
loads on some circuits. A review during these years determined the voltage excursions to
be caused by two factors, both factors having to do with the Idaho irrigation program size
and corresponding magnitude of load loss during program dispatch events. The
Company concluded that the Idaho irrigation program had grown beyond the size that the
transmission and distribution systems could effectively manage in its Idaho service
territory, and realized that program modifications were required. In January 2011, the
Company filed an application to modify the Idaho irrigation program.2
The Company, Idaho staff and the Idaho Irrigation Pumpers Association reached a
compromise of the positions and executed a stipulation on April 6, 2011, which was
adopted by the Idaho commission on April 27, 2011. The stipulated agreement included:
• modifications to the graduated rate schedule and load control service credit for 2011
and 2012;
• a commitment by PacifiCorp to invest a minimum of $1.3m in capital improvements
to reduce the constraints on identified substations and circuits, prior to the 2012
irrigation season3;
• language changes to Schedule 72A for the 2011 and 2012 program season, with
commission approval required for the language changes in tariff years after 2012;
• a revised opt-out penalty;
1 Voltage excursions – a rapid increase or reduction in voltage resulting from changes in the load. Example, a rapid
reduction in irrigation load at the time a control event is implemented can result in a rapid increase in voltage to
unacceptable levels. Likewise, a rapid increase in load once the control event is over can result in a reduction in
voltage to unacceptable levels.
2 Idaho Case No. PAC-E-11-06. 3 Current analysis indicates that all of the $1.3m will be used for distribution capital investments. Under the Revised
Protocol and 2010 Protocol, distribution investment costs are directly assigned to the state where the investments
are located, except as set forth in Appendix B to the Revised Protocol and 2010 Protocol.
2
ID PAC-E-11-12
Monsanto 2.89 Attachment Monsanto 2.89 -1
Attach Monsanto 2.89 -1.pdf Page 2 of 7
• a provision for selected irrigators to manually operate pumps during control events;
• a 2011 and 2012 participating load targeted reduction of 18% to 232 MW; and
• restrictions for new participants or additional load from existing participants.
PacifiCorp has a regulatory and contractual commitment to run the Idaho program
through the 2012 irrigation season. The Company is currently planning on issuing a
request for information (RFI) for technology for the irrigation load control system prior
to the third quarter of 2011, and a request for proposals (RFP) for the operation of the
program beginning in 2013 will by the end of the first quarter of 2012. Between now and
the RFP, the Company will look at applicability of the irrigation program in the
northwest, conditioned on the cost effectiveness of the revised operations.
(2) Utah Irrigation Load Control Program (Utah Schedules 96 and 96A) – a voluntary load
control program, since 2007, available to agricultural irrigation customers receiving
service under the Company’s Utah Schedule 10. Participants agree to allow for the
curtailment of their electricity usage in exchange for the receipt of participation credits.
The Idaho and Utah irrigation programs are alike in all respects, except with regard to the size of
participating loads and as a result, the total actual kW-yr savings in the program season. The
table below provides a comparison of the Idaho and Utah programs for the 2010 program season:
Idaho Irrigation Load Control
Program
Utah Irrigation Load Control
Program
Units 2,316 602
MW-yr (at site)* 283 49
MW-yr (at generation)* 308 52
Source: 2010 Idaho Energy Efficiency and Peak Reduction Annual Report, page 6 and 2010 Utah Energy
Efficiency and Peak Reduction Annual Report, page 6
* Sum of participating customers average two year billing demand for June, July and August
(3) Utah Cool Keeper (Utah Schedule 114)) – offered to residential, mobile home/house
trailer, and specific distribution 46,000 volt non-residential customers located in the
“Wasatch Front”, receiving retail electric service on Utah Schedules 1, 2, 3, 6, 6A, 6B, 8,
9, 9A, 23 and 25. Participants agree to allow for the cycling of their air conditioning
units at 50% of its natural duty cycle or default setting in exchange for incentive
compensation. The third party vendor is paid based on the performance of the system.
3
ID PAC-E-11-12
Monsanto 2.89 Attachment Monsanto 2.89 -1
Attach Monsanto 2.89 -1.pdf Page 3 of 7
The table below provides the annual total participation numbers for the Cool Keeper
program since 2003:
Calendar Year *
Participating Units
2003 2,929
2004 30,771
2005 48,061
2006 66,768
2007 73,703
2008 78,714
2009 91,534
2010 101,175
* Totals are calendar year-end net number of units (digital control units/T-Stats)
PacifiCorp is currently planning to issue an RFI for technologies for the air conditioning
program near the end of 2011, with an RFP to follow in 2012. The current contract for
the operation of the Cool Keeper program expires at the end of the 2013 control season.
Cost Allocations of Class 1 DSM Programs
Idaho Irrigation Load Control Program - program costs were historically recovered from Idaho
customers, both through base rates (customer incentives) and the system benefit charge (other
program costs). In past general rate cases, program costs were situs assigned to Idaho, and Idaho
jurisdictional load was reduced by program participation. In Idaho Case No. PAC-E-10-07
Order No. 32196, the Idaho commission found that the costs of the irrigation load control
program should be treated as system costs. Attachment 2 provides a comparison of situs and
system treatment of this program for calendar year 2011.
Utah Irrigation Load Control and Cool Keeper Programs – all program costs are recovered
through the system benefit charge, and Utah jurisdictional load is reduced by program
participation. Attachment 3 provides a comparison of situs and system treatment of these
programs for calendar year 2010.
Cost Effectiveness of Class 1 DSM Programs
Cost effectiveness calculations on Class 1 DSM programs are prepared using 4 standard utility
industry tests.
• Total Resource Cost Test (TRC): This test examines program benefits and costs from the
Company’s perspective and its customers’ perspectives, combined. On the benefit side, it
includes avoided energy costs, capacity costs, and line losses. On the cost side, it includes
costs incurred by both the utility and participants.
4
ID PAC-E-11-12
Monsanto 2.89 Attachment Monsanto 2.89 -1
Attach Monsanto 2.89 -1.pdf Page 4 of 7
• Participant Cost Test (PCT): This test compares just the portion of the resource cost paid
directly by participants to the savings realized by the participant. For the PCT, bill savings
are the realized benefit of the Class 1 program rather than the avoided supply-side costs.
• Utility Cost Test (UCT): This test examines program benefits and costs purely from the
Company’s perspective, benefits are avoided energy and capacity costs and line losses. The
avoided costs are based on calculations as defined by the Company’s integrated resource
planning department. Costs include any program administration, implementation, or
incentive costs associated with funding the program.
• Ratepayer Impact (RIM): All customers (participants and nonparticipants) may experience an
increase in rates to recover lost revenues. This test includes all Rocky Mountain Power
program costs as well as lost revenues. As benefits, this test includes all avoided energy
costs, capacity costs, and line losses.
2010 Benefit/Cost Categories and Values (Idaho Schedule 72 and 72A combined)
Cost Categories Cost Values Benefit Category Benefit Value
Program Management and Administration Costs $4,283,393 $/kW-yr avoided $73.09/kW
Incentives $8,100,681
Total $12,384,074 Total kW* 170,126
Source: 2010 Idaho Energy Efficiency and Peak Reduction Annual Report, Appendix 1 – Cost Effectiveness, page 5
* Average kW Dispatched during irrigation season (at Generation)
2010 Benefit/Cost Categories and Values (Utah Schedule 96 and 96A combined)
Cost Categories Cost Values Benefit Category Benefit Value
Administrative support $1,191,541 $/kW-yr avoided $73.09/kW
Participation credits $1,321,171
Total $2,512,712 Total kW* 49,100
Source: 2010 Utah Energy Efficiency and Peak Reduction Annual Report, Appendix 1 – Cost Effectiveness, page 7
* Sum of participants average billing demand for June, July and August for the preceding two years. Note an impact
evaluation has not been completed for this program.
2010 Benefit/Cost Categories and Values (Utah Schedule 114 combined)
Cost effectiveness analysis of the Cool Keeper program was conducted on a program lifecycle
basis for program years 2003 to 2013 in order to remove the cost differences from year to year
associated with the contractual payment schedule under the pay for performance contract with
the program delivery vendor where the cost of the program varies by program year. Looking at
the program from an overall contract period perspective is consistent with the method used to
evaluate the program when initially approved.
The $/kW-year value used for program benefit determination was $100.62/kW-year in 2010
dollars. This value was determined based on a 10 year discounted 110 MW decrement to the
2008 IRP preferred portfolio. The value includes $23/kW-year associated with deferral of
5
ID PAC-E-11-12
Monsanto 2.89 Attachment Monsanto 2.89 -1
Attach Monsanto 2.89 -1.pdf Page 5 of 7
transmission and distribution infrastructure, consistent with the 2008 IRP findings and
assumptions.
Source: 2010 Utah Energy Efficiency and Peak Reduction Annual Report, Appendix 1 – Cost Effectiveness, page 10
2010 Cost Effectiveness Analysis (Idaho Schedule 72 and 72A combined)
Benefits Costs Net Benefits Benefit / Cost Ratio
Total Resource Cost Test (TRC) $12,434,509 $4,283,393 $8,151,116 2.90
Utility Cost Test (UCT) $12,434,509 $12,384,074 $50,435 1.00
Rate Impact (RIM) $12,434,509 $12,384,074 $50,435 1.00
Participant Cost Test (PCT) $8,100,681 $0 $8,100,681 N/A
Source: 2010 Idaho Energy Efficiency and Peak Reduction Annual Report, Appendix 1 – Cost Effectiveness, page 5
2010 Cost Effectiveness Analysis (Utah Schedule 96 and 96A combined)
Benefits Costs Net Benefits Benefit / Cost
Ratio
Total Resource Cost Test (TRC) $3,806,852 $1,191,541 $2,615,311 3.19
Utility Cost Test (UCT) $3,806,852 $2,512,712 $1,294,140 1.52
Rate Impact (RIM) $3,806,852 $2,512,712 $1,294,140 1.52
Participant Cost Test (PCT) $1,321,171 $0 $1,321,171 N/A
Source: 2010 Utah Energy Efficiency and Peak Reduction Annual Report, Appendix 1 – Cost Effectiveness, page 7
2010 Cost Effectiveness Analysis (Utah Schedule 114 combined)
Benefits Costs Net Benefits Benefit / Cost Ratio
Total Resource Cost Test (TRC) $98,377,991 $49,528,235 $48,849,756 1.99
Utility Cost Test (UCT) $98,377,991 $66,022,018 $32,355,974 1.49
Rate Impact (RIM) $98,377,991 $66,022,018 $32,355,974 1.49
Participant Cost Test (PCT) $16,498,783 $0.00 $16,493,783 N/A
Source: 2010 Utah Energy Efficiency and Peak Reduction Annual Report, Appendix 1 – Cost Effectiveness, page 10
Forecast Benefit/Cost Analysis of Class 1 DSM
The Company’s 2011 integrated resource plan (IRP) published in March 2011 included base
assumptions for load control programs from calendar year 2011 through 2020. Attachment 4
provides the load management resource targets from the 2011 IRP for the Idaho irrigation, Utah
irrigation and Utah Cool Keeper Class 1 DSM programs. Budgeting, avoided cost studies and
prospective cost/benefit studies supporting the 2011 IRP assumptions is currently in progress,
and can be shared with MSP participants when the analysis has been completed.
6
ID PAC-E-11-12
Monsanto 2.89 Attachment Monsanto 2.89 -1
Attach Monsanto 2.89 -1.pdf Page 6 of 7
7
Integrated Resource Planning of Class 1 DSM Programs
From an IRP perspective, all resources provide system benefits subject to locational
considerations such as resource siting, transmission constraints, and load characteristics.
Physical System Operations of Class 1 DSM Programs
From an operations perspective, the Class 1 DSM programs allow the Company to control
demand and manage the system summer peak to mitigate peak load. Specifically the programs
reduce the PACE load overall, and the PACEU load.
2010 Protocol Proposed Modification
Attachment 5 provides proposed changes to the 2010 Protocol and Defined Terms for modifying
the allocation treatment of Class 1 DSM programs, as suggested by Terri Carlock.
Additional Information
For more information on the Company’s DSM programs, visit PacifiCorp’s website at
http://www.pacificorp.com/es/dsm.html. The following publications referenced in this document
are available at the website link and include:
Idaho
http://www.rockymountainpower.net/bus/rr.html and select “Idaho” for tariff schedules
2010 Annual Energy Efficiency and Peak Reduction Report
Case No. PAC-E-11-06 - http://www.puc.idaho.gov/internet/cases/summary/PACE1106.html
Utah
http://www.rockymountainpower.net/bus/rr.html and select “Utah” for tariff schedules
2010 Annual Energy Efficiency and Peak Reduction Report
ID PAC-E-11-12
Monsanto 2.89 Attachment Monsanto 2.89 -1
Attach Monsanto 2.89 -1.pdf Page 7 of 7