20090130Idaho Power Response.pdf

LISA D. NORDSTROM
Senior Counsel
esIDA~POR(I
An IDACORP Company
January 30, 2009
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0Q74
c._,
Re: Case No; GNR-E-08-04
IN THE MA ITER OF THE COMMISSION'S CONSIDERATION OF FOUR
AMENDMENTS TO SECTION 111 OF THE PUBLIC UTILITY
REGULA TORY POLICIES ACT OF 1978 (PURPA) CONTAINED IN THE
ENERGY INDEPENDENCE AND SECURITY ACT OF 2007
Dear Ms. Jewell:
Enclosed please find for filing an original and seven (7) copies of Idaho Power
Company's Response in the above matter.
In addition, I would appreciate it if you would return a stamped copy ofthis letter for
Idaho Power's file in the enclosed stamped, self-addressed envelope.
Very truly yours,
~~ ;O.71o-~
Lisa D. Nordstrom .
LDN:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, ID 83702
LISA D. NORDSTROM, ISB No. 5733
BARTON L. KLINE, ISB No. 1526
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: 208-338-6936
Inordstrom(âidahopower.com
bkline(âidahopower.com
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2009 JAN 30 PM 4: 45
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE )
COMMISSION'S CONSIDERATION OF ) CASE NO. GNR-E-08-04
FOUR AMENDMENTS TO SECTION )
111 OF THE PUBLIC UTILITY ) IDAHO POWER COMPANY'S
REGULATORY POLICIES ACT OF ) RESPONSE
1978 (PURPA) CONTAINED IN THE )
ENERGY INDEPENDENCE AND )
SECURITY ACT OF 2007. )
)
COMES NOW, Idaho Power Company ("Idaho Power" or "the Company"), and in
response to the directives contained in Order No. 30705 issued December 16, 2008,
submits the following Response detailing its consideration or implementation of the four
federal standards added to the Public Utility Regulatory Policies Act of 1978 ("PURPA")
by the Energy Independence and Security Act of 2007 ("EISA").
IDAHO POWER COMPANY'S RESPONSE - 1
I. INTEGRATED RESOURCE PLANNING
Idaho Power presently files an integrated resource plan ("IRP") with the Idaho
PUC and the Oregon PUC every two years pursuant to Idaho PUC Order No. 22299
and Oregon PUC Order No. 89-507, respectively. On page 20 of Order No. 22299, the
Idaho Commission ordered Idaho electric utilities to "give balanced consideration to
demand-side and supply-side resources when formulating resource plans and when
procuring resources." In acknowledging Idaho Power's 2002 IRP in Order No. 29189,
the Idaho Commission further clarified:
Believing many DSM programs involving conservation,
effciency improvements and/or load shaping may
sometimes be the least cost resource, we expect that the
Company wil have seriously exhausted and signed up all
available cost-effective DSM prior to building a utilty-owned
supply-side resource or going out for a request for proposals
for third part or contract supply-side resources. (Order No.
29189 at 21).
Idaho Power considers all resource types, including supply-side resources,
demand-side resources, and transmission interconnections, in its integrated resource
planning process. Idaho Power supports the Commissions' Orders and has
implemented energy effciency and demand-side measures in every integrated resource
plan since the Commissions' Orders were published in the late 1980s. In response to
the Idaho Commission's guidance in Order No. 29189, Idaho Power has also provided a
side-by-side comparison of demand-side and supply-side resources since the 2004
Integrated Resource Plan.
Idaho Power filed its most recent integrated resource plan in 2006, which stated
on page 24 that the two primary objectives of its DSM programs are to: (1) acquire all
cost-effective resources in order to more effciently meet the electrical system needs
IDAHO POWER COMPANY'S RESPONSE - 2
and (2) provide Idaho Power customers with programs and information to help them
manage their energy use and lower their bils. The Company also filed an update to the
2006 Integrated Resource Plan in June 2008. Idaho Power discussed demand..side
actions, including energy effciency programs and demand-reduction measures on
pages 17 through 22 of the 2008 Integrated Resource Plan Update. The Company is
presently preparing its 2009 Integrated Resource Plan for filing with the Idaho
Commission in June 2009 pursuant Order No. 30317.
Idaho Power also includes energy effciency and demand response programs in
regional electrical plans within its service territory. These plans include the Treasure
Valley Electrical Plan, the Wood River Valley Electrical Plan, the Magic Valley Electrical
Plan (not yet published), and Eastern Idaho Electrical Plan (not yet published).
II. RATE DESIGN MODIFICATION TO PROMOTE
ENERGY EFFICIENCY INVESTMENTS
Idaho Power is beginning its third year of two pilot programs as approved by the
Idaho Commission in Order Nos. 30556 and 30268. The Fixed Cost Adjustment
("FCA") is a three-year pilot program which wil annually adjust rates up or down to
recover the difference between the fixed costs authorized by the Idaho Public Utilities
Commission in Idaho Power's most recent general rate case and the fixed costs the
utility actually recovers from customers through energy sales during the previous year.
The Performance-Based DSM Incentive is a mechanism designed to reward the
Company for performance above its DSM program goals and impose a penalty for
performance below agreed-upon levels.
Idaho Power has consistently advocated for the principle that rate spread among
the customer classes and component pricing within the customer classes should be
IDAHO POWER COMPANY'S RESPONSE - 3
primarily cost-based. In the Company's last several general rate cases, this objective
has been met by the implementation of seasonal rates for all metered service
schedules, tiered summer rates for Residential and Small Commercial customers, and
two-tiered blocked rates for Large General Service Customers taking secondary
service. The Company is committed to providing customers cost-based price signals
which encourage the effcient use of energy. In the Company's most recent general
rate case, the cost-based rate proposals were designed to encourage increased energy
effciency among the Company's Residential, Large General Service, and Irrigation
customer groups.
Idaho Power's Rate Schedule 91, the Energy Effciency Rider (''Ridet'), collects
2.5% of customers' base power rates to offset the costs of offering energy effciency
and demand response programs. The 2.5% level of Rider funding was approved in
2008 and it is estimated that Idaho Power will collect approximately $17 million per year
through this funding mechanism. Currently, Idaho Power has collected less funding
through the Rider than it has invested. At year end 2008, Idaho Power's Rider account
had a negative balance of $3.9 milion. In Case No. IPC-E-08-23, Idaho Power
proposed funding the incentive portion of the Irrigation Peak Rewards demand response
program through the Power Cost Adjustment ("PCA") mechanism. Although the
program revisions were approved on January 14, 2009, by Order No. 30717,a
determination of how to fund the program is stil outstanding.
Idaho Power offers two demand response programs: the AlC Cool Credit
Program and the Irrigation Peak Rewards Program. The AlC Cool Credit Program is an
air conditioner cycling program that has been available to the Company's residential
IDAHO POWER COMPANY'S RESPONSE - 4
customers since 2003. The Irrigation Peak Rewards Program is a timer-based direct
load control program that has been available to the Company's agricultural irrigation
customers since 2004. In 2008, these two demand response programs had the
potential to reduce the Company's system peak demand by approximately 61
megawatts (line losses included). Idaho Power has an active customer education
program through which it promotes the financial and environmental benefits associated
with making home energy effciency improvements. The Company also informs
homeowners about federal and state incentives when applicable. Idaho Power does not
operate a program that promotes home energy audits. However, upon request, a
Company representative wil conduct a home walk-through with a focus on providing
energy savings tips. Idaho Power also offers a home self-evaluation energy usage tool
that is available through its website.
II. CONSIDERATION OF SMART GRID INVESTMENTS
In the summer of 2008, Idaho Power created an internal committee to investigate
Smart Grid investments specific to its system. The committee is composed of
managers from distribution maintenance and reliability, energy effciency, pricing and
regulatory, metering, planning, grid operations, regional operations, and information
technology. Idaho Power's Smart Grid committee is presently evaluating:
1. Existing infrastructure, including transmission and distribution
facilties along with communications infrastructure;
2. Viable technologies for the service territory, including consideration
of urban versus rural capabilities;
IDAHO POWER COMPANY'S RESPONSE - 5
3. Adding the valuation of the cost-effectiveness, security, and
societal benefit to the present comparison of reliability improvement, system
performance enhancement, and project cost;
4. Rate and rate making impacts, including rate recovery of Smart
Grid components and the accelerated depreciation of replaced assets; and
5. Operational and planning changes, including circuit configuration
and operation to provide self-healing capability.
With regard to rate recovery, on August 4, 2008, Idaho Power applied for a
Certificate of Public Convenience and Necessity in Case No. IPC-E-08-16 to install
Advanced Metering Infrastructure ("AMI") technology throughout its service territory.
The Company did not request a rate increase in conjunction with its Application;
however, the Company did request that, in the ordinary course of events, it would be
allowed to rate base the prudent capital costs of deploying AMI as it is placed in service,
to accelerate the depreciation of the existing metering infrastructure replaced by AMI
over the three-year deployment, and to include the operation and maintenance benefits
in the accounting methodology. As described in greater detail in the Application, the
total capital cost for the project wil be approximately $70.9 millon plus certain additional
costs.
iv. SMART GRID INFORMATION
Idaho Power is currently in the process of implementing AMI throughout its
service territory. Implementation wil be complete the fourth quarter of 2011. The
advanced capability meters being deployed by Idaho Power Company will measure the
usage information specified in this standard. This includes kilowatt-hour energy usage
IDAHO POWER COMPANY'S RESPONSE - 6
(kWh) and demand (kW). Idaho Power's AMI system wil collect hourly interval data,
daily, for all retail customers. The system wil validate, edit, and estimate the data as
necessary to ensure high quality billng data.
Although the Company does not provide information on wholesale electricity
prices, Idaho Power makes its time-based electricity retail prices available to its
customers via the Company's service schedules posted on its website
(idahopower.com). Time-based prices are also provided on the biling statement for
those customers taking service under a time-variant service schedule.
Usage information for both kilowatt-hours and kilowatts, as applicable, is included
on customers' billng statements. Usage information is also available to customers
electronically through registered accounts accessed via the Company's website.
Residential and commercial customers who currently have AMI installed have electronic
access to hourly and daily usage information via the Company's website. As AMI is
implemented throughout Idaho Power's service territory, this electronic access wil be
ayailable to all customers. Idaho Power does not provide day-ahead price projections
because no services currently offered rely on this information for biling or customer
decision making purposes.
Idaho Power includes written information on the sources of electricity to its
customers annually as part of its Power Cost Adjustment customer notice. This "fuel
mix disclosure" complies with action item E-18 recommended in the 2007 Idaho Energy
Plan. Although this notice does not include information on greenhouse gas emissions,
Idaho Power is tracking the carbon dioxide ("C02") emissions of its generating
IDAHO POWER COMPANY'S RESPONSE-7
resources and is planning to make this information available on the Idaho Power
website.
Customers who have AMI installed are able to access their own information at
any time through the Company's website. Information that is available includes hourly
and daily usage as well as usage by time block for those customers who take service
under a time-of-use service schedule.
V. CONCLUSION
Idaho Power has considered the issues identified by the four new federal
standards and has already implemented them or is currently in the process of doing so.
The Company believes the Commission could find that utilty efforts relating to
integrated resource planning, energy effciency rate design, and Smart Grid technology
and investments meet the intent of the standards such that no further action is required
in this docket.
DATED at Boise, Idaho, this 30th day of January 2009.
IDAHO POWER COMPANY'S RESPONSE - 8
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 30th day of January 2009 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Kristine A. Sasser
Deputy Attorney General
Idaho Public Utilties Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
Avista Corporation
Kelly Norwood
Avista Corporation
1411 East Mission Avenue
P.O. Box 3727
Spokane, Washington 99220
Rocky Mountain Power
J. Ted Weston
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Wal-Mart
Scott H. DeBroff, Esq.
RHOADS & SINON, LLP
One South Market Square
P.O. Box 1146
Harrisburg, Pennsylvania 17108-1146
Alicia R. Petersen, Esq.
RHOADS & SINON, LLP
One South Market Square
P.O. Box 1146
Harrisburg, Pennsylvania 17108-1146
IDAHO POWER COMPANY'S RESPONSE - 9
.lHand Delivered
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FAX
~ Email kris.sasser((lpuc.idaho.gov
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-l Email kelly.norwood(âavistacorp.com
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-l Email ted.weston(âpacifcorp.com
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a:"/J, ~~USA D. ?4STROM