20191010Avista to Staff 33.pdf

AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATTON
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AW-G-18-08
IPUC Staff
Production Request
Staff - 33
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
frTCEIVED
09t27120t9
N/A 1il19 0CI l0 At{ il: 29Ryan Finesilver
Energy !f&ci6rrcJ^:i *,i, i i",, ^,,[phone] '1"r'ir'rr'ri rt 'i
REQUEST:
Please answer the following questions related to Table 1 reflecting data from the Company's
Conservation Report shown below:
a. Please explain why 2017 savings in Table 1 were 155% of the Company's natural
gas IRP target. If some programs were more popular than anticipated by the
Company-such as the fuel efficiency progrcm, please explain why the Company
did not forecast this level of uptake during the planning process; and
b. Please explain why the UCT for natural gas savings increased between 2016 and
2017 (1.45 to 2.35). Staff previously understood that the Company manages its
DSM portfolio toward a 1.0 UCT to maximize the amount of cost-effective
savings, but this appears to be moving in the opposite direction. Please explain this
change.
Table l. Gas
Metric 2016 2017
Enerpry Savings 189,297 therms 305,508 therms
IRP Target 114,000 therms 197,640 therms
Expenditures $r,029,227 $ 1,135,471
Utility Cost Test t.45 2.35
Total Resource Cost Test 0.49 0.62
RESPONSE:
In response to part a, Avista's Energy Efficiency progftm operates with the goal of pursing all
cost-effective conservation, and does not modifl, the program to decrease the customer
participation in any program. For 2017, the Company did not make attempts to halt the throughput
on program savings after it had surpassed its IRP target of 197,640 therms.
Avista included in its 2017 Annual Conservation Plan (ACP) 219,272 therms of conservation
savings projected in 2077, which was higher than its IRP target of 197 ,640 therms. Please see the
gaph below that illustrates the 2014-2019 business plan target, the IRP target, and the actual
savings that occurred in each year. Note that Avista had suspended its Natural Gas DSM program
during 2014-2015.
ldaho Natural Gas Annual Conservation Targets
to Actual Savings
5m,000
450,0m
400,0@
350,0m
300,0m
250,0m
2@,0m
150,0m
1m,om
50 mo
20L4 2015
I'l
2016
illlr ll
r Business Han Target
r nP Target 456,0@
r Adual
- 232,737
228,0@ 114,00
- 229,94t
zorT
219,272
197,&m
305,58
2018
252,7t2
246.,44
247,756
As shown in the gaph above, the 2017 business plan target of 219,272 therms approximates the
229,941 actual therms achieved in 2016.
In response to part b, Avista does not manage its program towards a 1.0 UCT. Since the UCT ratio
is calculated as the avoided costs divided by the program costs (incentive cost, 3'o purty costs, and
non-incentive utility costs), the ability for the utility to lower its UCT ratio would most likely
occur by increasing the incentive value for its measures. Moreover, with the prior policy around
incentive setting, which placed a cap on the amount of incentive offered to customers, the
Company was unable to lower its UCT ratio to 1.0 in some casesl.
The reason for the increase in the UTC ratio is that the amount of avoided costs derived from
Energy Efficiency programs increased from $1,125,121 in20l6 to $2,105,243 in20l7 which is a
$980,122 increase. Of the increased amount, $815,521 was attributed to Residential HVAC
progftrms. While the overall program saw an increase in avoided cost, the non-incentive utility
costs and incentive costs did not increase at the same rate, thus creating a larger UCT ratio.
I Tariff Schedule 190 contained two restrictions on the level of incentive offered to customers for participating in
Energy Efficiency programs. I ) Incentive levels could not exceed $3 per Therm and 2) the amount of the incentive was
not to exceed 70o/o of the customer incremental costs.
2019
321,t20
320,830