20080331_2200.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER RED FO RD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:WELDON STUTZMAN
DEPUTY ATTORNEY GENERAL
DATE:MARCH 20, 2008
SUBJECT:CASE NO. IPC-08-
IDAHO POWER'S APPLICATION FOR AUTHORITY TO INCREASE
THE ENERGY EFFICIENCY RIDER
On March 2008, Idaho Power Company filed an Application asking the
Commission to approve an increase to its Energy Efficiency Rider from 1.5% to 2.5% of base
revenues effective June 1 , 2008. The rider is a charge on customers' bills to fund demand-side
management (DSM) programs implemented by the Company. The Commission initially
approved a rider in May 2002, and targeted an amount for collection at .5% of overall class
revenue. The charge for residential customers was 30 per month, and for irrigation customers
it was capped at $15 per meter per month. At that rate, the energy rider provided approximately
$2.6 million annually for DSM programs.
In May 2005 , the Commission approved the Company s request to increase the rider
to 1.5% of base revenue applied uniformly to all customer classes. The Commission put a
monthly cap on the residential customer charge at $1.75 and a cap of $50 per meter per month
for irrigation customers.
THE CURRENT APPLICATION
The Application states that Idaho Power has been expanding its DSM programs and
other energy efficiency initiatives since 2002, and anticipates that its DSM programs and
initiatives will cost approximately $50 million for the years 2008-2010. The current Energy
Efficiency Rider collects approximately $8.8 million per year. Idaho Power proposes to increase
the rider from 1.5% to 2.5% of base revenue beginning June 1 , 2008 to support expected
DECISION MEMORANDUM
program expenditures. At that level, the Company projects a deficit of approximately $4.
million in its DSM expenditures at the end of 2010. Accordingly, the Company also plans to
request in its next general rate case authorization to include approximately $3.5 million in labor
and administrative expenses related to its planned DSM programs in its regular operations and
maintenance expenses. If approved, the Company would use this $3.5 million increase in base
rates to pay for labor, contributions to the Northwest Energy Efficiency Alliance, and DSM
departmental costs not directly related to specific DSM programs. The Company also proposes
to remove the current rate caps for residential and irrigation customers. Finally, the Company
requests in its Application to approve revised language in the Energy Efficiency Rider tariff
expanding the scope of rider funded activities.
Idaho Power requests that its Application be processed by Modified Procedure. Staff
recommends that the Commission process Idaho Power s Application in Case No. IPC-08-
by Modified Procedure. Staff believes that this Application can be processed by June 1 , 2008.
COMMISSION DECISION
Does the Commission desire to process this by Modified Procedure? Does the
Commission wish to set a comment deadline between May 12-16?
Welclm \:;bWeldon Stutzman
Deputy Attorney General
bls/M:IPC-O8-03 ws
DECISION MEMORANDUM