20070627Comments.pdf

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BARNO. 1895
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
VISTA CORPORATION FOR AUTHORITY
TO IMPLEMENNT LOAD MANAGEMENT
PILOT PROGRAMS IN THE SAND POINT ANDMOSCOW AREAS.
CASE NO. A VU-O7-
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of
Application, Notice of Modified Procedure and Notice of Co mmentl Protest Deadline issued on
June 6, 2007, submits the following comments.
BACKGROUND
On June 1 2007, Avista Corporation dba Avista Utilities (Avista; Company) filed an
Application in Case No. A VU-07-4 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. The cost of this pilot is anticipated to be
approximately $123 000. Based on an assumed $150 000 incremental cost of power during
STAFF COMMENTS JUNE 27 2007
callable events, this program is expected to be cost effective. Although the Application cautions
that actual future market conditions are subject to many variables, the Company expects that the
value from the pilot will exceed the pilot's relatively low cost.
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 may 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 (Internet) portal. Other customer features will also be examined to test customer
responsIveness.
Customers who are on Schedules 1 , 11 and 21 are eligible for participation. Qualifying
participants must be homeowners or business owners who have occupied their 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
although they may have an alternate non-electric back-up heat source. An alternate heat source
will be required if demand response units are to be installed on baseboard electric heat.
Participating customers will be assessed no incremental costs. The "incentive" for a
customer to participate is to receive upgraded equipment and the associated features or a bill
credit. Customers opting in for a programmable, controllable thermostat (PCT) will receive a
thorough inspection of their HV AC systems and state of the art PCTs. Alternatively,
participating customers with demand response switches will also receive an audit on all
equipment controlled via the switch plus a $10 a month credit for the months July, August
December, January and February.
This program will examine some of the 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)
STAFF COMMENTS JUNE 27, 2007
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
HV AC systems (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. A vista s M&E will examine four
components: (1) kilowatt hour savings reductions, (2) technology, (3) customer acceptance, and
(4) an evaluation of reductions in peak demand on the Company s distribution system.
A vista requests that the Commission approve the proposed Schedule 96 tariff and related
tariff changes for an effective date of July 15 , 2007.
STAFF REVIEW
Staff has reviewed Avista s proposal and discussed elements of the pilot program design
and M&E intentions with Company staff. Staff appreciates the opportunity to participate in
development of the demand response pilot program prior to the Company s filing.
Staff believes the potential benefits of demand response efforts merit Avista s attention
and finds the proposed pilot to be an appropriate means of exploring demand response issues.
As indicated in the Application, this will essentially be A vista s first effort in the demand
response area, and the Company has had the luxury of being able to review the efforts of other
utilities in designing these initial steps. The proposed pilot effort is limited in scope, yet is
designed to obtain considerable information for a relatively modest investment. The proposed
pilot appears to have been designed to minimize the duplication of efforts previously conducted
by other utilities, and focuses on verifying the results of other utility programs and their
applicability to Avista s service area and system, and to examine new issues and technology.
The Application identifies a broad range of objectives for the measurement and evaluation of this
pilot program. In addition to measuring peak kW reductions, Staff encourages the Company to
measure kWh as well to examine whether energy use is reduced or shifted to other times.
On June 21 , 2007, Avista filed additional comments, clarifying that as a pilot program
the program includes flexibility to allow for modifications based upon market conditions and
lor findings." The comments include the example of expanding the program beyond the two
STAFF COMMENTS JUNE 27 2007
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 changing market conditions or program findings during the pilot period
would be unreasonable.
In conversations with Staff, 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
DSM tariff rider. The Company further indicates that this is simply due to the short, two-year
duration and research nature of the pilot, and does not expect it to establish any precedent. If the
Company was to implement a wide scale program, it would expect to capitalize the investment
for such devices and amortize these costs over the expected lifetime of the devices. 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.
The Company has submitted a proposed tariff revision, a new Schedule 96, which
contains the terms and conditions for participation in the pilot program. Staff has reviewed the
proposed new section and finds that it accurately and sufficiently reflects the proposed pilot
program.
Although the Company s Application does not specifically address reporting to the
Commission the results of this pilot, Staff expects that periodic updates on the pilot will be
reported to the Company s External Energy Efficiency (Triple E) advisory board. Furthermore
Staff recommends a final report be submitted formally to the Commission following the end of
the pilot.
STAFF RECOMMENDATION
Staff recommends the Commission approve A vista s proposed demand response pilot
program and the addition of a new Schedule 96 to the Company s electricity tariff, contingent
upon reporting as described above.
STAFF COMMENTS JUNE 27, 2007
"fl...Dated at Boise, Idaho , this d7 day of June 2007.
Sco ooabury
Deputy Attorney General
Technical Staff: Wayne Hart
Lynn Anderson
i :/umisc/comments/avueO7 .4swwhla
STAFF COMMENTS JUNE 27, 2007
CERTIFICA TE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 27TH DAY OF JUNE 2007
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF IN CASE
NO. AVU-07-, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL
A VISTA CORPORATION
PO BOX 3727
SPOKANE W A 99220
KELLY NORWOOD
VICE PRESIDENT - STATE & FED. REG.
A VISTA UTILITIES
PO BOX 3727
SPOKANE W A 99220
SECRETARY
CERTIFICATE OF SERVICE