20201125Application.pdf

Avista Corp.
l41l East Mission P.O.Box 3727
Spokane, Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
RECEIVED
202LNovember 25, PM 2:25
IDAHO PUBLIC
UTILITIES COMMISSION
November 25,2020
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331W. ChindenBlvd.
Bldg. 8, Suite 201-A
Boise,Idaho 83714
AVU-E-20-13
Re: Avista Corporation Application for Determination of 2018-2019 Electric Energy Efficiency
Expenses as Prudently Incurred
Dear Ms. Noriyuki:
Enclosed for filing with the Commission is the Application of Avista Corporation, dba
Avista Utilities (Avista or "the Company'), requesting a determination of prudence for the
Company's electric energy efficiency expenditures from January 1, 2018 through December 31,
2019. Also included in this filing are Exhibit Nos. l-4 in support of the Application, containing
Avista's 2018 Annual Conservation Report, 2Ol9 Annual Conservation Report, 2019 Idaho
Research and Development Report, and the Company's third-party Impact Evaluation Reports of
its electric energy efficiency programs for 2018-2019.
If you have any questions regarding this filing, please contact Dan Johnson, Director ofEnergy
Effi ciency, at (509) 49 5 -2807 or dan j ohnson@ avistacorp. com.
Sincerely,
lolsnarr* &il&dd
Shawn Bonfield
Sr. Manager of Regulatory Policy & Strategy
Avista Utilities
509-495-2782
shawn. bonfield@ avistacorp.com
Enclosures
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DAVID J. MEYER
VICE PRESIDENT AND CHIEF COI.TNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
I411 E. MISSION AVENUE
P.O. BOX3727
SPOKANE, WASHINGTON 99220-37 27
PHONE: (509) 49s-4316
IN THE MATTER OF THE APPLICATION OF
AVISTA CORPORATION FOR A
DETERMINATION OF 20 I 8-20 1 9 ELECTRIC
ENERGY EFFICIENCY EXPENSES AS
PRUDENTLY INCURRED
David J. Meyer, Esq.
Vice President and Chief Counsel for
Regulatory and Governmental Affairs
Avista Corporation
P.O.Box3727
Application of Avista Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE No. AW-E-2}-ts
APPLICATION OF
AVISTA CORPORATION
18 I. INTRODUCTION
19 In accordance with IDAPA 31.01.01 (Rules of Procedure, or Rp), Rp 052 and Rp
20 20I, et seq., Avista Corporation, doing business as Avista Utilities (hereinafter Avista or
2I Company), hereby respectfully requests that the Idaho public Utilities Commission
22 (Commission) issue an order designating Avista's electric energy efficiency expenditures
23 from January l, 2018 through December 31, 2019, in the amount of $15,309 ,g62, as
24 prudently incurred.
25 The Company requests that this filing be processed under the Commission,s
26 Modified Procedure rules through the use of written comments.
27 communications in reference to this Application should be addressed to:
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Shawn J. Bonfield
Senior Manager, Regulatory policy & Strategy
Avista Corporation
P.O.Box3727
14l I E. Mission Avenue, MSC-27
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1411 E. Mission Avenue, MSC-7
Spokane, WA 99220-3727
Phone: [phone]
david.meyer@avi stacorP'com
Spokane, WA 99220-3727
Phone: [phone]
shawn.bonfi eld@ avistacorp.com
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The Company has included the following attachments in support of this filing,
which are also referenced below:
a) Exhibit No. I - Idaho 2018 and 2019 Electric Impact Evaluations
b) ExhibitNo. 2 - Avista 2018 Idaho Annual Conservation Report
c) ExhibitNo. 3 - Avista 2019Idaho Annual Conservation Report
d) ExhibitNo. 4 - Avista 2019Idaho Research and Development Report
11 II. BACKGROUND
lZ Avista has continuously offered energy efficiency services since 1978. Through
13 these offerings, the Company seeks to provide customers with programs and information
14 that may help them manage their energy use and to utilize cost-effective energy efficiency
15 resources to meet the energy and demand needs of the Company's electrical System'
16 These efforts are funded through Avista's Electric and Natural Gas Energy Efficiency
17 Rider Adjustments (Schedule 91 and Schedule 191, respectively), or tariffriders'
1g The company's Energy Efficiency Programs (Programs) consist of options for
19 residential, non-residential and low-income customer segments. These Progtams are
ZO offered through traditional prescriptive channels along with site-specific projects and
2l upstream buy-down programs. Each Program in the Company's electric Energy
ZZ Effrciency portfolio (Portfolio) is designed to meet cost-effectiveness requirements and
23 is evaluated by a third-party evaluator'
Application of Avista Corporation 2
I III. ELECTRIC PROGRAM EXPENDITURES
2 The Company requests Commission determination that the expenditures incurred
3 during the 2018-19 Program years, totaling $15,309,862 for Idaho,s electric Energy
4 Efficiency Programs, were prudent and in the public interest. of the total amount spent,
5 $ 10,02 I ,973, ot 650/o, of total expenditures were paid out to customers in direct incentives. l
6 This percentage does not include additional benefits such as technical analyses provided to
7 customers by the company's Energy Efficiency engineering staff or regional market
8 transformation efforts through the Northwest Energy Efficiency Alliance (NEEA).
9 The Company reports the Schedule 9l balance on a monthly basis to Commission
10 Staff and its Energy Efficiency Advisory Group (Advisory Group). As a result ofthe high
ll level of conservation achieved during the 2016-17 program years, Avista,s Electric
12 Energy Efficiency Program in Idaho had an underfunded balance of $9,574,630 at
13 December 31,2017 . This underfunding was addressed by an increase to Schedule 9l rates
14 effective october 1,2017 , approved by the Commission in order No. 33g97 of Case No.
15 AVU-E-I7-06. The new rates have, as projected, covered all Energy Efficiency program
16 costs incurred since, as well as amortized the largerunderfunded tariff riderbalances over
17 a 36-month period. During 2018, the Programs incurred costs in the amount of
18 $7,736,789, while tariff Schedule 9l collections totaled $10,177,172, resulting in an
19 underfundedbalance of $7,134,247 atDecembe,r3l,2018. Theunderfundedbalancewas
20 only further decreased tfl 2olg, with collections again outpacing program expenditures,
2l totaling $10,332,033 and$7,573,073, respectively.
| $4,878,494 in incentives were paid to customers in 20lg and$5,143,479 in 2019
Application of Avista Corporation J
1 The following Table No. 1 illustrates the balances for the 2018 and 2019 Program
2 years on a monthlY basis.
i Table No. I
Feb 2018
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Accounting Period I Beginning
Jan 2018
$8,94?,6q9
Mar 2018 $8,73-1,a16!
Apr 2018 s8
Program
Expenlitu-res
${95,605 ($1,127,555) $8,942,680
(sq54,!s2) $8,',133,464
($908,106)$8,4,!/,571
($811,483-)$8,45q,071
Tarilf Collections Ending BalanceBelance r
$644,9',36
$6;67,!67
$805,031
2018 ,$8,456?974 $440,661 ($694,153-)$8,202,582
Jul 2018
A9g2018
Sep 2018
Oct 2.018
Nov 2018
Dec 2018
Jun 2018 $:8,202!|p-2
$8_,111,481
$ry36J08
$7,J84,530
$61767,897
$6738,480
$6,999262
$7,13412:47
$7,217,791
$530-33f
$319,304
$611,198_
$1,066,9_2,5
$1,1!,1,409
$1,096,697lan20l9 l
Apr 2019
May 2019
Jun 2019
Jul 2019
Aug 2019
Sep 2019
Oct 2019
Nov 2019
Dec 2019
($1,019,152)
($998,139)
($998,652)
(s839,628)
($733,894)
($739,31 1)
($767,086)
($833,616)
($812,553)
($739,603)
($846,666)
($1,003,733)
$637 AZ7 (v29,s?7)$8,113,481
E401,879 I
($7p2,0s3)$7,736,308
($882,11.r)
($935,937)
($642,rzs)$6,738,480
($806,!43) i t!,999,262
$7,134,247
$7,211,791
s6,493,274
$6,201,385
$6,142,119
$5,840,61q
$5,887,517
$5,572,524
$5,26.3?173
s4,979,367
s4,808,651
($976,4:24)
s6,493,274
$6,142,119
$5,84q,616
$5,887,517
$5,572,524
y279,622
$706,763
$780,362
$432,392
$786,212
$452,093
$528,746
$568,888
$626,778
$790,256
$5,263,173 ,
$4,979,367 '
$4,808,651 88 764
29 IV.ENERGY EFFICIENCY SAVINGS AI{D COST EFFECTIVENESS
30 FromJanuary 1, 2018 throughDecember 3l,2}lg,the company achieved 55,036
31 MWh of savings, excluding NEEA savings of 8,817 MWh, on a gross basis' Table No' 2
32 details the electric savings by residential, non-residential and low-income sectors' which
33makeuptheCompany,selectricEnergyEfficiencyPortfolio.
Application of Avista Corporation 4
1 Table No.2
Program
Sector
2018-'19 Gross Verified
Residential I 769
Non-Residential 39,641
Low-Income 626
Total Portfolio 55 ,036
Avista judges the effectiveness of its electric Portfolio based upon a number of
metrics, including analyses utilizing four specific metrics to evaluate the cost-
effectiveness of a given program from both the company,s and from customers,
perspectives: the utility cost Test (ucr),2 the Total Resource cost (TRC), the
Participant Cost Test (PCT), and the Ratepayer Impact Test (RIM). The most commonly
applied metrics to provide insight into the net value to all customers are the UCT, which
is a benefit-to-cost test from the utility perspective that includes incentives and excludes
net costs and non-energy benefits (NEBs), and the TRC, which represents the customer
perspective by including all measure costs and NEBs, excluding incentives. For 201g,
the overall Program Portfolio achieved a UCT ratio of 2.663 and a TRC ratio of 2.07
based on gross reported savings. For 2019, the overall Program Portfolio achieved a UCT
ratio of 2.39 and a TRC ratio of 1.95 based on gross verified savings. The cost-
effectiveness metrics are included in Table No. 3 below:
Tah No.3
Cost-Effectiveness Test 2018 2019
Cost Test 2.66 2.39
Total Resource Cost (TRC)2.07 1.95
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2 AIso known as the Program Administer Cost (pAC) test.
' See Exhibit No. 2 - Avista 2018 Idatro Annual Conservation Report; Page l2,Table 9 contains thecorrect UCT for the electric Portfolio cost-effectiveness results, Z.OO. the associated paragraph states,incorrectly, a 1.99 UCT for 2018.
Application of Avista Corporation 5
1 V. ENERGY EFFICIENCY TARGETS
2 The Company's energy efficiency targets are established in the process of
3 developing the electric Integrated Resource Plan (IRP). The targets derived through the
4 resource planning efforts provide a starting point for program planning which is
5 accomplished through the annual business planning process where program offerings are
6 optimized for the Company's service territory based on current economic and market
7 conditions.
8 The results of Avista's Energy Efficiency Programs exceeded the 2018 and 2019
9 IRp targets established as part of this IRP process, as shown in TableNo. 4 below. Idaho
10 Energy Efficiency savings for 2018 were 29,805 MWh, which surpassed the electric
11 savings target of 18,594 MWh by l6O%.For 2019, the Company accomplished 144% of
12 its 17,481 MWh target, reporting annual energy savings of 25,231MWh. This represents
13 153%ofthe Company's two-year IRP target of 36,075 MWh forthis period, not including
14 8,817 first-yearMWhacquiredthroughNEEA. Avista's tdaho 2018 and20l9 Electric
15 Impact Evaluations have been included as Exhibit No. I to support these figures.
16 Table No.4
t7 Time Period of
Reported Savings
Local Evaluated
MWh Savings
IRP Target Percent
Achieved
2018 29,805 18,594 t60%
201,9 25,231 17,481 t44%
20t8-2019 55,036 36,075 l53o/o
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20 Vt. PROGRAM EVALUATION
ln addition to the cost-effectiveness analyses conducted for each Program, Avista
also contracts with independent, third-party consultants to provide progrcm Evaluation,
Measurement, and Verification (EM&$ activities. These EM&V activities are used to
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Application of Avista Corporation 6
1 validate and report verified energy savings related to its energy-efficiency measures and
2 progftlms, as well as provide viable recommendations to improve program performance,
3 enact changes to programs, and decide whether and when to phase out measures.
4 For both the 2018 and 2019 Program years, Cadmus was retained by Avista to
5 perform an impact and process evaluation on Avista's electric Energy Efficiency
6 Programs. The primary goal of the impact evaluation is to provide an accurate sunmary
7 of the gross electric and demand savings attributable to Avista's Portfolio. The main
8 purpose of a process evaluation is to identi$ any improvements needed at the portfolio
9 level to increase program effectiveness and efficiency.
10 As part of its 2018-19 evaluations, Cadmus concluded that Avista's Idaho electric
I I Programs achieved 55,036 MWh in 2018-2019 cost-effectively and that Avista's 2018-
12 2019 programs addressed all impact and process evaluation needs in accordance with
13 industry and regulatory standards.a
14 VII. RESEARCII AI\D DEVELOPMENT PROJECTS
15 On August 30,2013 Avista applied for an Order authorizing the Company to
16 accumulate and account for customer revenues that would provide funding for selected
17 electric energy efficiency research and development (R&D) projects, proposed and
18 implemented by the state of ldaho's four-year Universities. On October 31,2013, Order
19 No. 32918 was granted to Avista in this matteq Case No. AVU-E-13-08. Avista now
20 recovers up to $300,000 per year of revenue from the Company's Schedule 9l Energy
a See Exhibit No. l, Cadmus' Impact Evaluation of Idaho Electric 2018-2019 Energy Efficiency
Programs
Application of Avista Corporation 7
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Efficiency Ridertariff to fund R&D. Please see ExhibitNo. 4 for a copy of the Company's
R&D report dated March3l,2020.
YIII. REOUEST FOR RELIEF
As described in greater detail above, Avista respectfully requests that the
Commission issue an Order designating Avista's 2018 and 2019 total electric Energy
Efficiency expenditures of $15,309,862 as prudently incurred, with this Application
being processed under Modified Procedure through the use of written comments.
Dated at Spokane, Washington this 25ft day of Novcmbq- 2020.
AVISTA CORPORATION
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David J. Meyer
Vice President and Chief Counsel for
Regulatory and Governmental Affairs
8Application of Avista Corporation