20170110_5177.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM: BRANDON KARPEN
DEPUTY ATTORNEY GENERAL
DATE: JANUARY 6, 2017
SUBJECT: APPLICATION OF IDAHO POWER FOR AUTHORITY TO REVISE
TARIFF SCHEDULE 91 - THE ENERGY EFFICIENCY
RIDER; CASE NO. IPC-E-16-33
On December 22, 2016, Idaho Power filed an Application requesting that the
Commission approve: (1) a decrease of 0.25% to the collection percentage of the Energy
Efficiency Rider (from 4% to 3.75% of base rate revenue), effective March 1, 2017; and (2) a
$13 million refund of previously-collected Rider funds to be included in the 2017/2018 Power
Cost Adjustment (PCA) mechanism, effective June 1, 2017; and (3) the elimination of the annual
transfer of $4 million of Rider funds through the PCA. The Company asks the Commission to
process the Application by Modified Procedure.
BACKGROUND
In 2002, the Commission authorized the creation of the Rider as a means to fund
demand-side management (DSM) programs. See Order No. 29026. The goal of this program is
to match the level of funding with the level of energy efficiency expenditures over time. To that
end, the Commission has allowed changes to the Rider percentage over the years—collecting
additional funding through the PCA to fund the Rider, or refunding surplus Rider funds through
the PCA. Since 2012, the Company has experienced a mismatch in funding levels compared to
expenditures. In other words, it has been collecting more through the Rider than it has spent on
DSM programs.
In Case No. IPC-E-16-03, the Company’s 2015 DSM prudency request, the
Commission directed the Company “to work with Staff and other stakeholders in adjusting the
DECISION MEMORANDUM 2
Rider,” and “submit a proposal for revising its Rider percentage to this Commission no later than
Friday, December 30, 2016.” See Order No. 33583.
THE APPLICATION
Currently, the Rider collects about $40 million per year. Application at 3. The
Company projected a Rider surplus balance of approximately $9 million at the end of 2016. Id.
The Company further projects that leaving the Rider collection level at 4% would likely result in
further growth in Rider surplus through 2020. Id. at 5.
Following a collaborative effort that included Staff, Industrial Customers of Idaho
Power, and the Idaho Conservation League, the Company now proposes the following changes:
(1) Decrease the collection percentage of the Rider from 4% to 3.75%;

(2) Include a $13 million refund of previously-collected Rider funds in the
2017/2018 PCA, effective June 1, 2017; and

(3) Eliminate the annual transfer of $4 million of Rider funds through the
PCA.

Id. at 5. The Company forecasts that 3.75% “will adequately mitigate the further accumulation
of surplus Rider balances.” Id. 6. Additionally, it projects that 3.75% will adequately fund DSM
programs through 2020. Id. The Company agreed to a March 1, 2017, effective date for this
change.
The Company further agreed to a refund of $13 million of surplus Rider funds, and
requests an effective June 1, 2017. Id. The Company provides several reasons it prefers
providing customers with the refund on June 1, 2016, rather than an earlier date for reasons
including offsetting possible rate increases, mixed messaging, and various accounting issues.
The Company also requests a June 1, 2017, effective date for ending the annual $4 million
transfer of Rider funds through the PCA mechanism.
STAFF RECOMMENDATION
Staff concurs in the Company’s proposal to process this case by Modified Procedure.
Staff further recommends that the Commission set a 21-day intervention deadline and that once
the deadline has passed, that the parties determine and recommend a comment schedule.

DECISION MEMORANDUM 3
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application, set a deadline for
intervention, and direct the parties to develop a schedule?

M:IPC-E-16-33_bk