20051220_1415.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DAVE SCHUNKE AND BRYAN LANSPERY
DATE:DECEMBER 16, 2005
RE:PACIFICORP'S TARIFF ADVICE 05-05 IRRIGATION LOAD CONTROL
PROGRAM SCHEDULE 72.
On December 5 2005 , PacifiCorp (dba Utah Power & Light Company; Company) filed
Tariff Advice No. 05-05 requesting revisions to Schedule 72, the Irrigation Load Control Service
Credit. The proposed changes in the Credit rates and a change in the conditions are consistent
with a Stipulation between the Company and the Idaho Irrigation Pumpers Association (lIP A),
which was filed October 17, 2005. Also included in this filing is the Final Program Report for
2005.
In Case No. PAC-05-, the Commission issued Order No. 29833 stating that the
Company and representatives of the Idaho Irrigation Pumpers Association (lIP A) shall meet to
discuss the method of calculation and amount of credit awarded for participation in the Program.
The Company issued a letter on October 3, 2005 infonning the Commission that a meeting had
occurred and the parties had reached agreement on the terms and value ofthe Program s credit
offerings. On October 12 2005 , the Company submitted a Stipulation on the proposed rates for
the 2006 season. The Stipulation included a revised credit schedule along with the methodology
used to detennine the value of the credit. Revised Sheet No. 72.5 describes the various credits
associated with the different options provided to irrigators. The Company seeks an effective date
for the new credits of January 4 2006.
Staff has reviewed the changes in credits agreed to by lIP A and the Company and finds
them to be reasonable in this case. The new rates represent an overall increase in credits of
DECISION MEMORANDUM DECEMBER 16, 2005
nearly 31 %. The largest increase is in the month of September. Staff finds that although little
infonnation was provided to assess. the cost effectiveness of the credit amount, the methodology
used to derive the credits based on the avoided cost during the summer peak period to be
reasonable. In light of Staff analysis of the credit calculation methodology and mutual
agreement by the Company and lIP A, Staff recommends that the Commission approve the new
rates.
The Company has also requested a revision to Sheet No. 72.2 in which the allowable
days for load control are reduced. Currently the Load Control period is from Monday through
Saturday and the Company proposes to reduce the period to Monday through Thursday. The
Company contends that the modification in language in the program description would more
accurately portray the options currently given to irrigators. While this is true, Staff contends that
this change could curtail opportunities to beneficially expand the program.
Currently, there are no options for irrigators to have their service interrupted on Fridays
(or the weekend). Yet according to the Company s Report for the 2005 Irrigation Load Control
Program ("Report"), Fridays have a higher load curve than those days covered under the control
period (Monday-Thursday) with little supporting infonnation. Staff believes that Friday may
present an opportunity to further reduce peak electrical demand. The Company has agreed to
explore the value of expanding the Load Control Program to Friday for the 2007irrigation
season. In the interim, Staff believes the load control period described in Tariff Sheet No. 72.
should remain Monday through Saturday.
The final component of the filing is the Company s Report for the 2005 Irrigation Load
Control Program. The Report has been filed in accordance with Commission Order Nos. 29209
and 29416. The Report opens by stating the requirements of the Report as laid out by the
Commission, then follows by addressing each in turn.
In 2005 23.7% of total available customers participated in the Program (489 participants
up from 340 in 2004), with the Company s cost at $1 224 783.56. Of this total, nearly 70% was
participation credits for nearly 400 MW under contract. Scheduled interruptions occur Mondays
through Thursdays, and result in a daily peak load reduction in the range of 45MW to 54 MW for
the months of June, July and August. Peak load reduction falls significantly for September into a
range of37 MW to 42 MW.
DECISION MEMORANDUM DECEMBER 16, 2005
The next largest component of costs was in field expenses (26.6%) resulting from a high
number of timer malfunctions. The Company has addressed this issue and is awaiting the results
from the clock manufacturer before taking recourse. Timer malfunctions can cause frustration
on the part of the irrigator and may deter some customers from future enrollment in the Program.
Staff feels that proper functioning equipment is a vital part in the success in the Program, and
that the Company is taking the necessary steps to ensure that the problem is minimized.
At the request of the Staff lIP , and the Commission, the Company conducted a study to
assess the level of "load shifting" versus "load avoidance" for participants. The Report notes
that results from testing show no statistically significant evidence that participants are reducing,
or avoiding, electrical usage but rather shifting usage to other periods; therefore no additional
studies are necessary. The Staff has no way to replicate or validate this statement as no
supporting infonnation was provided. In future reports Staff would like to see additional
documentation in order to hone and enhance the Program.
The Report closes with Program Enhancements under Consideration. It has been noted
by Staff and the Company that these enhancements are meant to encourage enrollment into the
Program and are not proposals for change in the near future. The enhancements under
consideration are 1) install time-of-use meters rather than timers; 2) tenninate the Program at the
end of August rather than mid-September; 3) change the naming scheme of the interruption
options; and 4) adjust the interruption offerings and dispatch options provided to irrigators.
Though Staffis highly supportive of the Program and its continued success, there is some
hesitation in supporting all of these "enhancements" under consideration.
First, iftime-of-use meters are instituted in lieu of timers, two main issues arise. One is
that the irrigators are in control of when the interruption actually occurs and must remember to
initiate the interruption at their scheduled time. This may prove to be inconvenient for the
irrigator and should they miss their scheduled time, result in lower credits awarded and
frustration on their part. Additionally, time-of-use meters undennine the reliability of the
interruption in service, virtually eliminating any load-planning benefit the Program currently
offers. Staff suggests that any promotion of time-of-use meters be an additional option to
DECISION MEMORANDUM DECEMBER 16, 2005
irrigators above the current options, not a replacement, and irrigators choosing the time-of-use
meters receive a lower credit amount.
Staff also does not support the early tennination date of the Program. The Company
contends that this may enhance participation of irrigators who find their water needs in
September are non-interruptible. Yet as the Program currently stands, there is minimal penalty
to the irrigator for early discontinuance, and does not appear to be a major deterrent for
participation. Should the Company wish to increase participation through the month of August
it would be opportunistic to pursue different avenues to achieve this, i.e. additional interruption
options. Staff recognizes that maintaining September in the Program still generates value to both
parties, and would not support shortening the Program unless documentation was provided
proving otherwise.
Staff fully supports additional dispatch options implemented to increase participation.
The goal of such modifications would be to attract groups of irrigators that have traditionally not
participated in the past, namely surface water irrigators. Inclusion ofthis group of irrigators
presents its own unique challenges, which have been preliminarily addressed through discussion
between the Company and several canal companies. Staff will continue to monitor the progress
of the discussions and will provide assistance to facilitate any beneficial changes if and when
necessary.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the proposed increases in the Load
Control Service Credit. Both the Company and Idaho Irrigation Pumpers Association have
agreed to the new rates in Stipulation, and Staff finds the rates to be reasonable in this case.
Staff recommends that PacifiCorp s proposed change to the language in Schedule 72
Sheet No. 72.2 be denied. The Monday through Saturday language has not posed any difficulty
in the Program over the previous three years, and only serves to limit future opportunities to
expand the Program to include Fridays should the Company and Irrigators consign to it.
Staff also recommends that the Commission accept the Final 2005 Irrigation Load
Control Program Report, as it adheres to the reporting requirements set forth by the Commission
in Orders Nos. 29209 and 29416. Staff has recommended to the Company that future Final
DECISION MEMORANDUM DECEMBER 16, 2005
Reports of this nature be more explicit in its valuation methods of the benefits of the Program.
This would expedite the assessment of the Program and its impact on the parties involved as well
as the overall customers of the Company. While Staff is not supportive of all of the Program
enhancements under consideration, Staff recognizes that these options are in the preliminary
stage of consideration.
f2L
Dave Schunk
i:udmemos/ta Pac 05 05
DECISION MEMORANDUM DECEMBER 16, 2005