20090128Avista Comments.pdf

A vista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
RECE t)
ißß9 J~N 28 PM 2: 08
~~~'V'STA.
Corp.
Januar 27,2009
Jean Jewell, Secretary
Idaho Public Utilties Commission
Statehouse Mail
472 W. Washington Street
Boise, il 83720-0074
RE: Avista Comments in Case No. GNR-E-08-04
Dear Ms. Jewell:
A vista hereby submits for filing an original and seven copies of its comments regarding the
Commission's Consideration of Four Amendments to Section 111 of the Public Utility Regulatory
Policies Act of 1978 (PUR A) Contained in the Energy Independence and Security Act of 2007.
Avista's comments are responsive to the questions, italicized below, contained in the Commission's
December 16,2008 Notice of Inquiry and Notice of Modified Procedure in Order No. 30705.
1. Integrated Resource Planning - "We direct each utility to comment on what steps, if any, it has
taken to implement energy effciency into its integrated resource planning. "
Avista's resource acquisition policies fundamentally pursue all cost-effective electric and natural gas
effciency resources that can be realistically achieved or facilitated by utility intervention. General
numerical goals are established within the integrated resource planning (IR) process and are the basis
for implementation at a more detailed level within the business plan.
The Company's IR analysis is an interactive process in which DSM resources are evaluated along
side regional resources. Consequently, local and regional resources are "stacked" within our resource
planning software (resulting in a 20-year stream of avoided costs based on the last generating unit
turned on/off) as well as thirty end-use demand-side management load shapes. Then DSM
applications and technologies that are cost-effective are accepted; non-cost-effective ones are rejected
and the band extending between cost-effective and non-cost-effective measures are tested and selected
against the other available resources.
This entire process begins with the consideration of all commercially available applications or
technologies that have energy savings. For the 2009 electric IR, the Company evaluated nearly 2,500
non-residential measures and almost 800 residential measures. Once the measures are identified,
characteristics such as energy savings, incremental cost, non-energy benefits, etc are developed and
preliminary cost-effectiveness is completed. The "red" (non-cost-effective) measures are eliminated at
this point and not evaluated further. At this point, market characteristics are assessed and past program
results are considered in order to develop technical and economic potential for the "green" (cost-
effective) and "yellow" measures. "Green" measures are specified as "must take" while "yellow"
measures are evaluated with the resources planning software and linear programing model in order to
determine which "yellow" measures pass or faiL. The "yellow" passing measures coupled with the
"green" must-takes results in the revised annual DSM acquisition goal. This completes the IR
process. However, much more analysis and review is done of all the "yellow" and "green" measures
throughout the business planning process that follows.
The DSM implementation team reviews the previous business plan as well as further evaluates the
"green" and "yellow" (both the passing and failing measures) by providing additional analysis and
market assessment. This in-depth process results in a revised business plan where some measures that
might have failed in the IR process are included and/or passing measures from the IR process may
not be included in the final business plan after further consideration. This business planing process
results in a new DSM acquisition goal greater than or equal to the IR goal, an operating budget for the
upcoming year as well as outlines of new programs to be initiated and existing programs to be
continued, improved and terminated. Updates to the avoided costs generally occur upon the
completion of the biennial Integrated Resource Plan.
2. Rate Design Modifications to Promote Energy Efficiency Investments - "We direct each utility
to comment on what steps, if any, it has considered and/or implemented regarding this standard. "
With regard to removing throughput incentives, Avista supports decoupling and presently has a natural
gas decoupling pilot mechanism in Washington that began Januar 1, 2007. The Company's current
rate structures (electric and gas) provide recovery of the majority of its fixed costs on a (sales)
volumetric basis, therefore, energy efficiency and conservation objectives are directly at odds with the
recovery of the fixed costs of providing service. The Washington natural gas pilot allows the
Company to defer unrecovered (residential and small commercial) fixed costs each month and to
surcharge customers to recover the deferred costs if the company meets pre-determined energy-
efficiency goals and does not exceed its authorized rate of return. A vista is examining the feasibility of
proposing both electrc and natural gas decoupling mechanisms in Idaho.
The Company has a two-block inverted residential electric rate structure in Idaho to further encourage
energy effciency and provide a pricing signal regarding the higher cost of new generating
resources. The Company is proposing to increase the present rate inversion (price difference between
the blocks) in a general rate filing and wil continue to examine the feasibility of further inverting
residential rates in the future. A vista does not have inverted rate structures for its other customer
classes, however, it has been significantly increasing (peak) demand charges for commercial and
industral customers in an effort to improve load factor( s) and reduce peak demand. The Company is
also considering a time-of-use rate structure for our largest industrial and institutional (Schedule 25)
customers. Schedule 25 customers have existing metering that would allow for the implementation of
a time-of-use rate structure.
Avista is presently conducting a two-year electrc demand response pilot program in two selected areas
of its Idaho service terrtory. The program consists of utility installation and operation of load-use
controls on large appliances, on a voluntary basis, for residential and commercial customers.
A vista has received supportive regulation for energy efficiency investments and programs in Idaho and
Washington. These two jurisdictions were the first public utility commissions in the United States to
approve a "system benefit charge" to fund energy efficiency. In 1995, the Idaho Public Utilities
Commission approved the Company's Demand-Side Management (DSM) Tariff Rider which is a
surcharge on customers' bils (electric and natural gas) to fund energy effciency programs for all
customer classes on a sustained basis. The Company recently increased customer incentives and
implemented a comprehensive customer outreach effort to support new and existing programs. Part of
the outreach effort developed into the "Every Little Bit" (ELB) campaign and website
(www.everylittebit.com).This multi-media campaign provides information to customers regarding
program availability, incentives and low-cost / no-cost efficiency measures. Additionally, the
Company has had an on-line home energy audit available on its website for several years.
3. Consideration of Smart Grid Investments - "We direct each utilty to comment on what steps, if
any, it has considered and/or implemented regarding smart grid investments. "
In 2005, Avista began deployment of Advanced Meter Reading (AMR) in its Idaho service terrtory
(Case Nos. AVU-E-04-0l, AVU-G-04-01, AVU-E-08-01, AVU-G-08-01). Avista has substantially
completed the meter installations and is in the process of completing network optimization in 2009 to
finalize the network portion of the installation. As the Company progressed with its deployment of
AMR in our Idaho service terrtory, there have been many advances in the AM industry. A vista
continues to work on ways to leverage the data from our AMR systems to provide data for analysis of
Demand Response programs and engineering analysis. Avista's TWACS AMR system is also
currently being utilized as part of a pilot project for Remote Disconnects and Reconnects (Case No.
A VU-E-07-09). Avista wil continue to evaluate ways to enhance and leverage the curent AM
systems in our Idaho service terrtory as they apply to the Smar Grid.
4. Smart Grid Information - "We direct each utilty to comment on what steps, if any, it has
considered to document and provide information consistent with this standard. "
Avista is currently evaluating Meter Data Management Systems (MDMS) that would provide the
foundation for any future developments that may allow customers to access their interval data.
Presently, Avista does not have any Time of Use (TOU) rates or the necessary components in our
customer biling systems that would support this type of rate strcture. While the Company does not
have any specific plans to implement systems that could provide interval data to its customers, we
continue to monitor these type of rate structures and the impact of providing customers access to their
interval data. It should be noted that the AM infrastructure that we have put in place in our Idaho
Service territory is capable of providing the interval data requested by this standard.
Thank you for the opportunity to comment on this inquiry, and we look forward to paricipating in the
upcoming workshop. Please direct any questions on this matter to Linda Gervais at 509.495.4975 or
Patrick Ehrbar at 509.495.8620.
Sincerely
2:rwo¿1' r.
Vice President, State & Federal Regulation
cc: Service List
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that 1 have served Avista Corporation dba Avista utilities' comments in
Case No. GNR-E-08-04 by mailng a copy thereof, postage prepaid to the following:
Jean D Jewell, Secretary
Idaho Public Utilities Commission
472 W. Washington Street
Boise, ID 83720-5983
Alicia R. Petersen
Rhoads & Sinon LLP
P.O. Box 1146
Harrisburg, PA 17108-1146
apetersen(grhoads-sinon. com
Scott H. DeBroff
Rhoads & Sinon LLP
P.O. Box 1146
Harrisburg, PA 17108-1146
sdebroff(grhads-sinon. com
Dated at Spokane, Washington this 27th day of January 2009.
v:~~Patty Olsn s
Rates Coordinator