20070711final_order_no_30365.pdf

Office ofthe Secretary
Service Date
July 11, 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION FOR
AUTHORITY TO IMPLEMENT LOAD
MANAGEMENT PILOT PROGRAMS IN
THE SANDPOINT AND MOSCOW AREAS
ORDER NO. 30365
CASE NO. A VU-07-
On June 2007 Avista Corporation dba Avista Utilities (Avista; Company) filed an
Application in Case No. A VU-07-04 requesting authority to offer residential and commercial
demand response programs in portions of Sandpoint and Moscow for a two-year period. Internet
protocol thermostats, direct control units and related technology will be installed to reduce
energy usage at peak times of the year and gain experience with customer acceptance, program
design, operational components and cost effectiveness. A vista requests that the Commission
approve the proposed electric Schedule 96 (Energy Load Management Programs - Pilot) tariff
and related tariff changes for an effective date of July 15 2007. The Commission in this Order
approves the Company s Application and authorizes implementation of the proposed load
management pilot programs.
As reflected in its Application, the Company would call a minimum of four "events
during the year to test the technology, impacts on load and customer acceptance. These events
will be performed at times of critical peak demand periods. Duration of the events will typically
be four hours but can be extended to a six-hour time frame depending on power price market
conditions. This pilot includes presentation of information to selected customers through the use
of a web portal. Other customer features will be examined to test customer responsiveness. The
costs of this pilot are anticipated to be approximately $123 000. Based on the assumed
incremental costs of power during callable events of $150 000, this program is expected to be
cost effective.
Customers who are on Schedules 1 11 and 21 are eligible to participate. Qualifying
participants must be homeowners or business owners occupying the premises for at least one
year on a full-time basis. This will allow a comparison of energy consumption with previous
summer/winter usage. The targeted participants are all-electric load. Customers can have an
ORDER NO. 30365
alternate non-electric backup heat source. An alternate heat source will be required if demand
response units are to be installed on baseboard heat electric load.
Participating customers will be assessed no incremental costs. The "incentive" for a
customer to participate is the upgraded equipment and associated features. Customers opting for
a programmable controllable thermostat (PCT) will receive a thorough inspection of their HV
system and a state of the art PCT. Participating customers with demand response switches will
also receive an audit on all equipment controlled via the switch plus a $10 per month credit for
the months of July, August, December, January and February.
This program will examine some ofthe following directly controllable appliances:
Air conditioning
Complete HV AC system (electric heat pump with air conditioning)
Water heater
Pool pump
Electric forced air heating system
Electric baseboard heating system
Irrigation pump (if any)
Due to A vista system capacity issues and seasonal spot power prices, air conditioning
load will be given priority in customer selection. However, the Company intends to explore the
effects of demand responses on both winter and summer peaks. Therefore, customers with a
HV AC system (for heating and air conditioning) will be given equal priority. Additionally, in
order to gain knowledge and experience with a variety of demand response technologies, the
Company will install demand response equipment in the above listed applications.
Measurement & evaluation (M&E) is integral to defining benefits of a pilot program
and identifying areas for improvement or modification. Avista s M&E will examine four
components: (1) kilowatt savings, (2) technology, (3) customer acceptance, and (4) interactions
of peak demand on the Company s distribution system.
On June 6, 2007, the Commission issued Notices of Application and Modified
Proc~dure in Case No. A VU-07-04. The deadline for filing written comments was June 27
2007. Comments were filed by Commission Staff and two of the Company s residential
customers. Both customers support the Company s Application. Commission Staff recommends
that the Application be approved with a requirement of periodic updates to the Company
ORDER NO. 30365
External Energy Efficiency (EEE) Advisory Board and a final report to the Commission
following the end of the pilot.
The proposed pilot effort, Staff contends, is limited in scope, yet is designed to obtain
considerable information for a relatively modest investment. The proposal, Staff states, appears
to have been designed to minimize the duplication of efforts previously conducted by other
utilities, to focus on verifying the results of other utility programs and their applicability to
Avista s service area and system, and to examine new issues and technologies. The Application
identifies a broad range of objectives for the measurement and evaluation of this pilot program.
In addition to measuring peak kilowatt reductions, Staff encourages the Company to measure
kilowatt hours (kWh) as well as to examine whether energy use is reduced or shifted to other
times.
Staff notes that on June 21 , 2007, A vista filed additional comments clarifying that
a pilot program
, "
the program includes flexibility to allow for modifications based upon market
conditions and/or findings.The comments include the example of expanding the program
beyond two feeders initially identified by the Company for the program, should it be necessary to
achieve the desired level of participation or to reduce interactive effects of similar equipment.
Staff agrees that such flexibility should be included in the implementation of pilot programs.
Staff believes that failure to adjust to a change in market conditions or program findings during
the pilot period would be unreasonable.
Staff notes that A vista indicates it plans to book the expenditures for load
management devices used in the pilot as expenses to be funded by Schedule 91, the Company
Demand Side Management (DSM) tariff rider rather than capitalization and amortization of its
investment. Staff finds funding through the DSM tariff rider to be a reasonable approach for a
pilot program of this duration and for the limited number and types of devices to be purchased
for use in the proposed pilot.
Commission Findings
The Commission has reviewed the filings of record in Case No. A VU-07-
including the comments and recommendations of customers and Commission Staff. The
Commission continues to find it reasonable to process the Company s Application pursuant to
Modified Procedure, i.e., by written submission rather than by hearing. IDAP A 31.01.01.204.
ORDER NO. 30365
A vista Corporation requests Commission authority to implement load management
pilot programs in the Sandpoint and Moscow areas. The duration of the proposed pilot programs
is two years. The cost of the pilot programs is anticipated to be $123 000. The Commission
commends A vista for its continued efforts in developing cost effective Demand Side
Management (DSM) programs and measures and treating DSM as a part of its overall resource
portfolio. The proposed pilot programs, we find, should benefit all customers, both participants
and non-participants. Acquisition of cost effective DSM will result in lower customer bills, will
defer the need for new supply resources and will reduce the Company s high-cost peak power
needs.
The Commission finds it reasonable to approve the proposed demand response pilot
program for an effective date of July 15, 2007. The Commission further finds it reasonable to
require periodic updates to the Company s EEE Advisory Board and a final report to the
Commission following conclusion of the pilot programs.
CONCLUSIONS OF LAW
The Commission has jurisdiction over Avista Corporation dba Avista Utilities, an
electric utility, and the issues presented in Case No. A VU-07-04 pursuant to the authority
granted in Title 61 , Idaho Code, and the Commission s Rules of Procedure, ID AP A 31.01.01.000
et seq.
ORDER
In consideration of the foregoing and as more particularly described and qualified
above, IT IS HEREBY ORDERED and the Commission does hereby approve the two-year
residential and commercial demand response pilot programs proposed by the Company in Case
No. A VU-07-04 for an effective date of July 15, 2007. Reference Avista s electric Schedule
, Energy Load Management Programs - Pilot.
IT IS FURTHER ORDERED and the Company is directed to file a summary report
with the Commission at the conclusion of the load management pilot programs.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 30365
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of July 2007.
ATTEST:
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Je~n D. Jewell,
C6inmission Secretary
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ORDER NO. 30365
MARSHA H. SMITH, COMMISSIONER
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MACK FORI?,'COMMISSIONER
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