20200923INT to Staff 1-8.pdf

RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 1
Preston N. Carter, ISB No. 8462
Givens Pursley LLP
601 W. Bannock St.
Boise, Idaho 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY’S APPLICATION FOR
AUTHORITY TO IMPLEMENT A
COMMERCIAL ENERGY EFFICIENCY
PROGRAM AND FUNDING MECHANISM
)
)
)
)
)
)
)
CASE NO. INT-G-20-04
RESPONSE OF INTERMOUNTAIN
GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE
COMMISSION STAFF
Intermountain Gas Company, in response to the First Production Request of the Idaho
Public Utilities Commission Staff to Intermountain Gas Company dated September 2, 2020,
submits the information below. Confidential information is noted in the responses. The requested
confidential documents will be provided via the Company’s Sharepoint site under the terms of the
Protective Agreement.
REQUEST NO. 1: In its Application, the Company stated that the Conservation
Potential Assessment found commercial retrofit cost-effectiveness is low and that commercial
equipment can provide savings. Application at 5. Please provide workpapers, with formulas
intact, for all calculations used to determine cost effectiveness of both the commercial retrofit
and commercial equipment programs.
RESPONSE TO REQUEST NO. 1:
Conclusions about both the savings potential and cost effectiveness for the commercial
retrofit and equipment program were provided by Dunsky and are outlined on Page 31 of the
Conservation Potential Assessment (“CPA”) Final Report (see Exhibit No. 4 of Intermountain’s
IRP filing INT-G-19-07). An excerpt of these findings summarizing cost-effectiveness and
budgets by scenario is provided here:
RECEIVED
2020 September23 PM4:21
IDAHO PUBLIC
UTILITIES COMMISSION
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 2
While Dunsky found both programs are cost-effective under all three scenarios, (low,
base and max), Dunsky further cautions that “the commercial retrofit cost-effectiveness results
are low under all scenarios” and “careful consideration should be given to the design of this
initiative to ensure cost-effectiveness of the program.” A commercial retrofit program focuses
on measures considered to be upgrades, such as improving the building envelope, adding
advanced control equipment, or whole building initiatives. These types of initiatives often
require retro fitting entire HVAC systems and HVAC commissioning. Commissioning is a multi-
step process based on a custom checklist which can include verifying installed equipment,
witnessing the equipment in operation, and documenting proper operation including start up, shut
down and sequence of operation, before HVAC equipment is tested, adjusted and balanced. On
the other hand, the commercial equipment program focuses on the replacement of equipment
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 3
when it reaches the end of its life and are typically prescriptive incentives. Dunsky further
concluded the commercial equipment program “can provide robust savings at a low unit cost.”
Due to the highly customized nature of retrofit measures, and the time and expertise
required to design and verify these measures, the Company focused on prescriptive measures, or
a commercial equipment program, for the initial commercial offering. Limiting the initial
program to an equipment offering will allow the Company to better understand the energy
efficiency needs of commercial customers and more fully explore the resources required to
support a retrofit, or custom-type, commercial program offering.
The initial calculation of the cost effectiveness of the two program types was done within
the Dunsky CPA model. That model is described in greater detail in Appendix B of the
Conservation Potential Assessment Final Report.
Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathy Wold, 208-377-6128
Location: 555 S Cole Rd, Boise, ID 83707
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 4
REQUEST NO. 2: Please provide workpapers, with formulas intact, for all calculations
used in Exhibit No. 1. Please provide the source for the Annual Therms Savings for each
measure listed in column d.
RESPONSE TO REQUEST NO. 2:
The source for the Annual Therm Savings for each measure in Column (d) of Exhibit No.
1, is the commercial measure characterization used in the Conservation Potential Assessment
provided by Dunsky. The complete commercial measure characterization is provided in file
CONFIDENTIAL PR#2_Annual Therm Savings. Therm savings are listed for eight different
segments of the commercial market. In cases where the therm savings are different for each
segment, a simple average of the therm savings was calculated. In the case of the high efficiency
boiler, where therm saving varies greatly by sector, a weighted average was calculated. These
calculations can be found on the “kBtuh calculation” tab in the PR#2_Commercial UCT
Estimates file. Calculations for the Energy Savings Kit are explained in greater detail in the
response to Production Request No. 7 below.
Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathy Wold, 208-377-6128
Location: 555 S Cole Rd, Boise, ID 83707
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 5
REQUEST NO. 3: Please provide the projected budget for the “total residential and
commercial program administration” expense, as mentioned on page 8 of the Application, and
the rationale for assigning 20 percent of that expense to the commercial program.
RESPONSE TO REQUEST NO. 3:
The projected budget for the total residential and commercial program administration is
provided in the excel file PR#3 Total Admin_Expense Split Rationale. Administration expenses
by program are provided on the tab “2021 Res & Com Plan.”
The rationale behind assigning 20% of the total program expense to the commercial
program was based on the therm saving potential identified in the CPA, as shown on the tab
labeled “Expense Split Rationale.” The calculated split of potential therm savings between the
program year 1 commercial equipment program and the third year of the residential program is
12/88. Several considerations warranted instead starting with an 20/80 split for forecasting
purposes:
Conservative estimates were used for the forecasted measures installed for the initial
commercial program,
The customer response to the initial residential program far surpassed initial projected
performance estimates,
Potential changes to the residential program to incent higher efficiency may initially
impact customer participation and residential therm savings, reducing the proportion of
residential therm savings
Intermountain estimates that once both programs are fully developed the split will be
closer to 30/70 or 40/60. The Company used the 20/80 split for initial planning purposes for the
commercial program, but will ultimately assign administration costs based on actual therm
savings attributed to each program for prudency determination.
Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathy Wold, 208-377-6128
Location: 555 S Cole Rd, Boise, ID 83707
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 6
REQUEST NO. 4: Does the Company expect current economic conditions affecting
commercial customers to have any effect on the “Forecasted Measures Installed” shown in
Exhibit No. 1? Please explain any effects for each measure.
RESPONSE TO REQUEST NO. 4:
The forecasted measures installed shown in Exhibit No. 1 were taken from the measures
identified in the CPA that contributed to the therm saving potential for program year 1. It is
difficult to know how current economic conditions may affect this forecast.
The CPA identified the following commercial sectors: education, food services,
healthcare, lodging, manufacturing, office and other. Based on the current economic conditions,
the food service and lodging sectors would seem to be the most likely, if any, to be negatively
impacted. COVID-19 has had significant impacts on lodging (hotels), and food service
(restaurants), which might negatively impact the already conservative forecast for high efficiency
boilers (15 units), and food service related equipment: fryers (39 units), griddles (2 units) and
steamers (2 units).
On the other hand, challenging economic times have also been known to bring cost-
saving measures to the forefront, and participation in the program may exceed the forecast. There
are signs the economy is already starting to rebound from the initial economic impact of
COVID-19 as more and more businesses have been quick to pivot and adapt their business
models to the new normal. If the residential program is any indication, customer participation
far exceeded forecasts for the first year of the program. While commercial customer energy
efficiency needs and solutions are uniquely different from the residential customers, the
Company will strive to replicate the outreach and education strategies to raise awareness and
participation in the commercial program.
Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathy Wold, 208-377-6128
Location: 555 S Cole Rd, Boise, ID 83707
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 7
REQUEST NO. 5: Please provide the file “IGC-CPA-AppF.xlsx” referenced in
Appendix F of the July 2019 Conservation Potential Assessment Final Report provided by
Dunsky Energy Consulting.
RESPONSE TO REQUEST NO. 5:
Please see file CONFIDENTIAL PR#5_2018 CPA Appendix F UCT. The shorthand
worksheet headers are defined as the following:
PAC = Program Administrator Cost Test which is a synonym of Utility Cost Test
Sc1 = Scenario 1. There are 3 different scenarios provided (1 = low scenario, 2 = base
scenario and 3 = max scenario).
UCT results were only provided for the first year as they do not materially change over
time.
Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathy Wold, 208-377-6128
Location: 555 S Cole Rd, Boise, ID 83707
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 8
REQUEST NO. 6: Please explain the Company’s plan for Evaluating, Measuring, and
Verifying (EM&V) the actual savings of each measure listed in Exhibit No. 1. Please explain
how the Company will use the results of their EM&V to evaluate and adjust incentive levels for
each of these measures.
RESPONSE TO REQUEST NO. 6:
Once the commercial program has enough history to evaluate, the Company will follow
the same EM&V process applied to the residential program: determine a schedule for EM&V
and select a qualified independent 3rd party through an RFP process to conduct a thorough
impact and process evaluation. This study will verify savings attributed to the program, by
measure (impact evaluation), and will examine the effectiveness of program delivery from
outreach to rebate processing and overall customer satisfaction (process evaluation). The
Company will take into consideration the findings of the EM&V study to improve program
delivery effectiveness, or process improvements, that may provide a more complete picture of
the effectiveness of the program (for example incorporating additional data collection points or
alternative outreach methods). The Company will also use the findings of the EM&V to make
necessary adjustments to the program offering, and to shape the goals of the next CPA study,
from which program savings potential, as well as measure and incentive levels are derived for
program design. The following diagram best illustrates the continuous feedback loop the
Company will use for continuous program improvement.
While an important part of the process improvement loop, full-scale, independent 3rd
party EM&V evaluations can be costly. As a program cost saving measure, the Company will
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 9
develop EM&V-like review processes to evaluate program performance during the interim years
between full-scale evaluations conducted by a 3rd party.
Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathy Wold, 208-377-6128
Location: 555 S Cole Rd, Boise, ID 83707
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 10
REQUEST NO. 7: For the Energy Savings Kit (“Kit”), please provide the following:
a. The source used to determine the savings of each item in the Kit;
b. Workpapers showing how the UCT was determined;
c. The criteria that the Company will use for determining who will receive
the Kits; and
d. Specifications for Kit contents, packaging, and cost requirements.
RESPONSE TO REQUEST NO. 7:
a.The source for the savings for each item in the kit is the 2018 CPA Commercial Measure
Characterization provided in file CONFIDENTIAL PR#2_Annual Therm Savings. The
total savings for the kits was determined by summing the savings of all measures
included in the kit:
i.1 – pre-rinse spray valve (29 therms)
ii.2 – kitchen aerators, swivel, dual spray (low flow faucet aerator = 6 therms each,
12 therms total)
iii.2 – dual thread pressure compensating bath aerators (low flow faucet aerator = 6
therms each, 12 therms total)
iv.29+12+12 = 53 therms/kit
b.The workpapers for determining the UCT for the kits are provided in PR#2_Commercial
UCT Estimates and is based on delivering 350 kits.
c.The energy savings kits will be provided to the Company’s commercial customers on the
GS-1 rate. The kits are complementary and will require an application to allow the
Company to verify commercial customers and track distribution of energy saving kits. At
this time the Company plans to partner with HVAC companies to distribute the kits to
Intermountain’s commercial customers which will expand outreach and promotion of this
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 11
new program, but also provide an opportunity for on-site installation assistance when
HVAC contractors personally deliver these kits.
d.The Company is working with AM Conservation on the savings kits. Please see file
CONFIDENTIAL PR#7_Intermountain Gas Kit Quote, for kit contents, packaging and
cost requirements provided by AM conservation. The total cost estimate for the energy
saving kits used for UCT estimates was $100/kit to accommodate the kit itself,
packaging, and shipping costs from AM Conservation to the Company, as well as
distribution costs from the Company to customers or HVAC contractors.
Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Kathy Wold, 208-377-6128
Location: 555 S Cole Rd, Boise, ID 83707
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 12
REQUEST NO. 8: Please explain if, and how, the Company will use a separate
balancing account for the proposed Commercial Energy Efficiency Program. If not part of the
proposal, please explain why not.
RESPONSE TO REQUEST NO. 8:
The Company will track all revenues and expenses separately from the Residential
Energy Efficiency Program through the use of work orders and sub-account codes. Any
difference between revenues and expenses will be recorded to either a regulatory asset or
liability. The Company will use sub-account codes to keep these balances separate from the
balances related to the Residential Energy Efficiency Program.
Record Holder: Lori Blattner, 208-377-6015
Sponsor/Preparer: Jacob Darrington, 208-377-6041
Location: 555 S Cole Rd, Boise, ID 83707
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 13
DATED: September 23, 2020
GIVENS PURSLEY LLP
Preston N. Carter
Attorneys for Intermountain Gas Company
RESPONSE OF INTERMOUNTAIN GAS COMPANY TO FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF –PAGE 14
CERTIFICATE OF SERVICE
I certify that on September 23, 2020, a true and correct copy of INTERMOUNTAIN
GAS COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF was served upon all parties of record in this proceeding via electronic
mail as indicated below:
Commission Staff Via Electronic Mail
Jan Noriyuki, Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg. 8, Suite 201-A
Boise, ID 83714
[e-mail]
John R. Hammond
Deputy Attorney General
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg. 8, Suite 201-A
Boise, ID 83714
[e-mail]
Lori A. Blattner