20130819_4149.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:NIKM KARPAVICH
DATE:AUGUST 16,2013
SUBJECT:AVISTA TARIFF ADVICE NO.13-04-E;
MODIFICATION TO SCHEDULE 90,ELECTRIC ENERGY EFFICIENCY
On June 26,2013,Avista (“the Company”)filed modifications to its Electric Energy
Efficiency Programs,Schedules 90A,90B and 90C.The Company re-filed its request on
June 28,2013.On July 15,2013,the Company filed a substitute revision to Schedule 90B.
On July 31,2013,the Company filed to withdraw Schedule 90A and file a substitute sheet for
Schedule 90C.The purpose of the filing is to update and clarify certain incentive levels that
accelerate cost-effective projects.
BACKGROUND
Schedule 90 describes energy efficiency services offered to residential,commercial,
industrial,and retail electric distribution customers.Schedule 90B defines incentive parameters
for electric efficiency and fuel-conversion measures that have lives of 10 years or greater with a
simple payback of less than 13 years.This schedule primarily addresses site-specific,or custom,
projects.The filing:
I.Adds lighting measures that have a life of 40,000 hours or greater with a simple payback of
6-13 years.Incentives will be capped at 50%of the incremental project cost.The current
tariff precludes incenting some of these long-lived lighting measures,such as LEDs (light
emitting diode).The Company believes this update will capture significant savings as the
lighting industry continues to transform.
DECISION MEMORANDUM 1 AUGUST 16,2013
2.Increases the incentive cap from 50%to 70%of the incremental project cost for the
following projects:
a)Lighting projects with a simple payback less than 3 years,
b)Non-lighting projects with a simple payback less than 5 years,and
c)Lighting projects with measure life of 40,000 hours or greater with a simple payback of
less than 5 years.
The proposal to Schedule 90C adds section 4.1.4 to formally define prescriptive programs
and cap such measures up to 100%of the incremental project cost.Prescriptive programs offer
smaller efficiency measures that are pre-calculated at a fixed incentive amount.Staff notes that
prescriptive incentives can expedite and provide consistency to DSM offerings.
STAFF ANALYSIS AND RECOMMENDATION
The update to Schedule 90 is intended to increase cost-effective energy savings by
incenting projects with long measure lives and shorter paybacks,particularly in the transforming
lighting sector.Staff acknowledges the Company has previously discussed most of the tariff
revisions in their DSM Advisory Committee with little resistance from its members.Staff
recognizes the proposed changes are intended to advance cost-effective energy savings,but
reminds the Company all expenditures are subject to a DSM prudency review.Staff recommends
the Commission accept the Company’s proposal subject to one modification.Staff recommends
the Company retain original language contained in Schedule 90B that clarifies energy simple
payment is calculated prior to the application of an incentive.Staff believes this is an important
distinction that could inappropriately alter the incentive level.The Company is in agreement with
Staffs proposal.
COMMISSION DECISION
Does the Commission wish to accept Avista’s modifications to Schedules 90B and 90C,
Energy Efficiency Services,effective August 22,2013?
l4V —Nikki Karpa ich
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DECISION MEMORANDUM 2 AUGUST 16,2013