20121116Snake River ALliance Comments.pdf

Comments of the Snake River Alliance WE Cl
In the Matter of the Commission's Inquiry Into the Cost-Effectiveness and.) çj fLo L• 28
Income Weatherization Programs and Energy Conservation Prog for Ek rams ctric Utilities
Case No. GNR-E-12-01 )
Submitted by
Ken Miller, Clean Energy Program Director, Snake River Alliance
Nov. 16, 2012
The Snake River Alliance ("Alliance") appreciates this opportunity to provide comments relating
to the Commission's inquiry into low-income weatherization programs and certain energy
conservation programs offered by Idaho's three regulated electric utilities. We are also
commenting on the Commission Staff Report in Case No. GNR-E-12-01, which was prepared
after a Commisison-directed workshop on these issues. These comments are in response to
Commission Order No. 32673 in the above-referenced case.
The Alliance has long advocated energy efficiency in the portfolios of all regulated electric
utilities in Idaho - Idaho Power, Avista Utilities, and Rocky Mountain Power. As the Commission
knows, the Alliance has also long supported robust energy efficiency program development and
support through tariff riders and other mechanisms available to Idaho utilities through
Commission orders. Alliance Clean Energy Program Director Ken Miller, who prepared these
comments, participated in Case No. GNR-U-08-01, the Commission's Inquiry About Energy
Affordability Issues and Workshops, in 2008-2009.
The Alliance commends the Commission's decision to open this inquiry. Like other clean energy
and low-income advocates, we have been frustrated with the lack of interest in the issues
explored in GNR-E-12-01 and GNR-U-08-01 at the Idaho Legislature, and it is dismaying that
some of the issues raised four years ago in GNR-U-08-01 remain before the Commission in this
docket. Some of the issues aired in the workshop in this docket are beyond the reach of the
Legislature and are in the Commission's domain. Others may require legislative attention, and
in such cases we urge the Commission to more assertively raise these issues before the
Legislature when appropriate.
Cost Effectiveness Questions and Concerns
It is clearer now than before the workshop in this case that there are fundamental issues
regarding the calculation of "cost effective" for purposes of inclusion in these programs that
must be explored in more detail. Staffs comments at P. 1 portend some of these concerns:
"Staff is primarily concerned about the cost-effectiveness of utility-funded low income
weatherization programs in Idaho. Two of the three utilities" programs are not cost-
effective without non-energy benefits, and the third program's cost-effectiveness is in
doubt. Despite these concerns, Staff is reluctant to recommend cutting established
programs that help low income customers control their energy bills. This is especially
true because the Low Income Home Energy Assistance Program (LIHEAP) recipient list
shows that the need for these programs far outpaces their funding. Of the three
weatherization programs, only Idaho Power's program claims to be cost effective
without non-energy benefits. But Staff doubts Idaho Power's program is as cost effective
as it appears..."
It is clear from the workshop in this case and from staff's comments that low-income
weatherization and energy efficiency programs pose unique challenges in determine whether
they are cost effective. For instance, a disproportionate percentage of low-income electricity
customers might live in very inefficient modular or mobile homes, which for various reasons are
not "cost-effective" to upgrade. That such weatherization or conservation improvements might
not survive a cost effectiveness test does not reduce the urgent needs facing this vulnerable
group of utility customers.
"Non-Energy Benefits" Must be Further Analyzed
Staff recommends at P. 3 that more utility programs might pass cost effectiveness tests if given
greater scrutiny by the respective utilities:
"Besides improving implementation, Staff believes all three utilities could modify their
low income cost-effectiveness calculations to improve accuracy and more completely
assess program cost-effectiveness. Staff's recommended modifications will decrease
some programs' reported cost-effectiveness and likely increase other programs' reported
cost-effectiveness. A complete list of Staff's recommendations is included below.
One of the main issues discussed during the recent rate cases and the workshop was
determining afunding methodology to assess the level of low income weatherization
funding. Staff recommends that a combination of factors be considered forfunding
decisions. Most importantly, Staff believes that in order for a utility's funding to be
increased, it must be shown that the program is cost-effective. No program should
receive afunding increase if it is not cost effective according to the criteria outlined in
this report..."
We tend to agree, up to a point. While we believe various "non-energy benefits" should be
considered for all energy efficiency investments for purposes of determining cost-effectiveness,
these benefits are all the more tangible when analyzing program benefits to low-income
consumers. The benefits can vary, but they might include such non-energy benefits as job
creation, reductions in bill arrearage, greenhouse gas reductions, and social justice concerns.
Whether these kinds of benefits are considered "social programs" or "low income programs" or
"energy programs" (and whether utilities bear any responsibility for helping to deliver such
benefits) can and should be explored in future proceedings, but they must be explored. For
instance, utility support of LIHEAP programs are known to benefit all customers in different
ways, including some that have little to do with energy savings. We have also seen cases where
some low-income programs are considered "social programs" but funded nonetheless in good
economic times, but where utilities have trimmed those programs during more difficult times.
Staff addresses some of these issues in its Recommendation 7 on non-energy benefits "such as
reductions in utilities' arrearages and bad debt, as well as collection, disconnection, and
reconnection expenses that may accrue when low-income customers' bills are reduced through
weatherization..." However, we question staff's recommendation that other "economic non-
energy benefits" be excluded in cost-effectiveness analyses. We see significant value in such
benefits as extending the lives of weatherized structures and helping to safeguard the health
and safety of building occupants and such measures as lead and mold remediation, and to the
extent staff continues to be uncomfortable considering such benefits, we recommend that the
Commission direct staff to more fully explore them if it will help resolve any misgivings. We
hope that the Commission does not consider this a resolved issue, as it continues to be a
pressing issue for low-income weatherization and conservation program providers.
An effective and holistic "whole-house" weatherization and efficiency improvements have the
potential to extend a home's life for an additional 20 to 30 years, and we believe that is not an
insignificant consideration in evaluating these programs. We appreciate staff's inclusion and
description in Appendix 3 of various non-energy (societal, economic, etc.) benefits that might
be considered by the Commission in future proceedings.
These are issues that are not confined to regulated investor-owned utilities, some of which do
not want to participate in so-called "social welfare" programs such as low-income energy
assistance. We have seen similar arguments made by state policy makers resistant to such
fundamental policy shifts, including one recommended with futility by this Commission in Case
No. GNR-U-08-01 in 2009:
"The Commission supports legislation that would allow utilities to propose for
Commission consideration programs, policies, and rates for the benefit of low-income
residential customers. The legislation should allow the utilities flexibility in the programs
to be proposed, recognizing that each utility has differing circumstances and unique
service areas. Details regarding the appropriate rate mechanism to support such
programs can be discussed through future cases as they come before the Commission.
The proposal of such programs should be voluntary on the part of the utility. The
Commission urges all utilities to support such legislation, even if some do not intend to
propose programs." (Order No. 30724, Pp. 2-3)
That same order, also on P. 3, reminded us that: "Greater energy efficiency is the key to bill
reduction. Weatherization and conservation are crucial elements of energy efficiency efforts."
In fact, there are many valuable lessons to be learned from the Commission's 2008-2009 case
that translate well here - chief among them is the need for the Commission and the regulated
utilities to commit to pursuing and seeking implementation of the recommendations so that
those recommendations do not languish unfulfilled.
Staff Recommendations
While we agree with many of staff's recommendations, such as one recommending that
conservation education (Con-Ed) programs not be subject to the same standard cost-
effectiveness tests as other efficiency programs, we have reservations about some that strike
us as overbroad - even if intended as general guidelines. For instance, Item No. 5 on P. 3
suggests that "Funding should not be increased if a utility's CAP agencies have been unable
to spend all of the available utility funding in the previous year." Such recommendations
may overlook certain extraordinary circumstances beyond a particular CAP agency's
control. We believe Idaho's community action partnerships have proven to be exemplary
stewards of ratepayer and other dollars, including but not limited to their heroic efforts to
accommodate the deluge of non-utility "stimulus" weatherization dollars in recent years
despite a limited capacity to do so.
We agree with concerns raised by staff in Recommendation 2 dealing with the possible lack
of motivations by certain landlords to implement some energy efficiency (weatherization)
measures if they are not responsible for the utility bill. Staffs recommendation for changes
in utility accounting for these measures may well expand the cost-effectiveness of the
investments and encourage greater spending on weatherization to benefit low-income
customers.
Regarding Recommendation 6 dealing with the possibility of Idaho Power adopting a
"conservation adder" similar to those use elsewhere, we lack the needed information to
determine how such an adder would be implemented. But we are nonetheless intrigued by
the idea so long as it has the potential to increase the cost-effectiveness of some of Idaho
Power's low-income conservation programs that might not otherwise pass cost-
effectiveness tests.
We recommend that the Commission ask staff to more fully explain its Recommendation 11
("Staff does not recommend constructing a specific cost effectiveness test for low income
programs"). It is unclear to us why such a test should be removed from consideration or further
analysis at this point. On this point, we agree with the arguments put forward by NW Energy
Coalition - and disagree with staff's position —that developing and implementing a low-income
cost effectiveness test should be more closely studied. We see no reason to take this idea off
the table at this time.
One of our leading concerns about low-income weatherization programs sponsored by our
utilities is that funding levels continue to be inadequate. Consequently, we question staff's
Recommendation 17:
"Staff recommends continued funding for Idaho Power, A vista, and Rocky Mountain
Power's low income weatherization programs at current levels. Staff believes that
funding increases requests for Idaho Power and Rocky Mountain Power could be
considered after both companies publish their annual DSM reports in spring 2013.
Staff recommends that afunding increase request for Avista be delayed until at least
spring 2014 to allow time to implement the more extensive program modifications
and determine if those modifications succeed and persist in improving cost-
effectiveness."
We see no reason why weatherization funding levels should not be revisited at the time of each
utility's general rate case, if such case is processed prior to a utility's annual DSM report. In the
case of Rocky Mountain Power and Idaho Power, it is likely the DSM reports will be filed prior to
review of their next rate case. We do not agree with delaying a funding increase for Avista until
2014: Analysis of whether these program modifications can occur prior to 2014.
In addition, as staff notes on P. 8:
"The CAPs also deliver weatherization services through the federally-funded
Weatherization Assistance Program (WAP) under a contract administered by the Idaho
Department of Health and Welfare. With one exception, the CAPs also manage LIHEAP."
While true, it is important to acknowledge that CAP funding levels under WAP and LIHEAP
continue to be under severe pressure. While utilities have for the most part been reliable
supporters of LIHEAP, the same cannot be said for WAP, partly due to the confusion referenced
above as to whether the program is a social program, or low-income program or energy
program. We urge the Commission to resist assuming that funding levels for both of these
programs are adequate for Idaho's CAPs to fully perform their functions, and that the
Commission inquire of the CAPS about current and anticipated funding levels.
Utility Cost Effectiveness Tests
We defer to our CAP partners and other low-income advocates to more thoroughly analyze the
staff report's assessments of the various cost effectiveness tests employed by the Commission
and by the regulated utilities.
Conclusion
The Alliance believes this is a critical time for low-income weatherization and energy
conservation programs targeted to out utilities' most vulnerable customers - customers least
able to adapt to the kinds of repeated rate increases we are witnessing for all electric utilities in
recent years.
We believe staff has well captured much of the information shared at the Commission's
workshop, and we appreciate the detail and thoroughness reflected in staffs comments. They
can serve as an excellent beginning point for the Commission to delve into some of these
difficult issues in much more detail. We also urge the Commission to take to heart the
comments that will be filed by Idaho's low-income advocates, as they are the ones who most
closely deal with our utilities' low-income customers and who best understand the enormous
challenges confronting these customers as they attempt to pay their bills and as they struggle
to provide a comfortable environment for their households.
As always, the Alliance is grateful to the Commission for the opportunity to provide its
comments in Case No. GNR-E-12-01 and hopes to participate future discussions as appropriate
on the issues raised by this docket.
Respectfully submitted,
Ken Miller
Clean Energy Program Director
Snake River Alliance
P.O. Box 1731
Boise, ID 83701
[phone] (0)
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[e-mail]
www.snakeriveralliance.org
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