20130108Avista Additional Comments.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
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:&i UTILITIES COMM.ISSC
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January 4, 2013
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
Statehouse Mail
W. 472 Washington Street
Boise, Idaho 83720
Re: GNR-E-12-01 - Avista Utilities Additional Comments
Dear Ms. Jewell:
Attached for filing with the Commission is an original and seven copies of additional comments of
Avista Utilities to the Commission Staff Report on Cost-Effectiveness of Funding Low Income
Weatherization Programs and Energy Conservation Programs for Electric Utilities.
Please direct any questions on this matter to Bruce Folsom at [phone] or myself at (509) 495-
4975.
Sincerely,
Lin a Gervais
Manager, Regulatory Policy
State and Federal Regulation
Avista Utilities
509-495-4975
[e-mail]
RE CE! V F
Linda Gervais
Manager, Regulatory Policy
Avista Corporation
1411 East Mission Ave.
Spokane, WA 99202
Phone: [phone]
[e-mail]
2013 1 JAN -8 PM 12: 59
iD;:lO PUBLi
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION'S )
INQUIRY INTO THE COST-EFFECTIVENESS )
AND FUNDING OF LOW INCOME )
WEATHERIZATION PROGRAMS AND )
ENERGY CONSERVATION PROGRAMS FOR )
AVISTA ELECTRIC UTILITIES )
)
CASE NO. GNR-E-12-01
ADDITIONAL COMMENTS OF
CORPORATION
Avista Corporation ("Avista" or "Company") hereby submits additional comments
regarding the "Inquiry into the Cost-Effectiveness and Funding of Low-Income Weatherization
and Energy Conservation Programs for Electric Utilities Report" filed December 7, 2012. Avista
submits these comments outside of the Commission-prescribed deadlines and does so to
highlight issues that have been further discussed with and supported by Commission Staff since
filing their reply comments on 12/07/2012. This included an opportunity to share with
Commission Staff that the previously reported 2011 summary total resource cost (TRC) for low-
income electric would move from 0.44 to 0.82 due to using the new protocols that quantify non-
energy benefits, intended to depict 2011 results if calculated consistent with recommendations
from the Staff Report'. Secondly, reviewing the components of the 2013 DSM Business Plan
suggests a path towards a TRC of 1.0 without capping project costs. In other words, by applying
Includes the known and quantifiable non-energy benefits associated with Health and Human Safety and the value
of standard efficient equipment that would have been installed, at a minimum, with Avista finding, rather than
replacing a measure on burnout with a high efficiency improvement.
AVISTA CORPORATION COMMENTS IN GNR-E-12-01 Page 1
Staff's recommendations, the 2013 low-income weatherization programs anticipate fewer lower-
savings measures, thus providing a portfolio with higher per-customer savings. Finally, an
opportunity exists to focus on fuel conversion measures, previously not leveraged by the
Community Action Partnership of Lewiston (CAP).
Avista described in its current 2013 DSM Business Plan that unit energy savings (UIES)
estimates have undergone the rigor of impact analysis and were rolled up to cost and savings for
sub-TRC measures evaluations. Thus, the current Business Plan suggests a strategy to manage
the low-income TRC towards 1.0 without capping project funding and without unduly limiting
I the measure list. By reducing installations of lower value measures (e.g., those with smaller UES
estimates), the low-income portfolio's TRC will increase. At the same time, some options
remain for installations of appropriate measures in case-specific circumstances. While this is still
a challenging goal, it is in the context of a TRC gap that is much less than known at the time of
the initial Staff Report2. Efforts are also underway to both identify cost-effective electric to
natural gas conversion opportunities through utility data-mining, as well as encouraging the
Lewiston CAP to more actively pursue these more highly cost-effective measures. By actively
pursuing fuel conversions, the TRCs for the low-income portfolio will increase. Avista is
currently working to identify all-electric, single-family structures of low-income customers in
close proximity to existing natural gas mains. The current Business Plan and contract
negotiations with the Lewiston CAP agency have further refined Avista's approved measure list,
removing measures with a poor TRC. The Lewiston CAP agency has been a great partner in
delivering services to low income qualified customers, however it has also been challenged by
uncertain and changing funding at the Federal level. While the proposed 85% project cap may
need to be considered in the future, it could provide a unique challenge to implementation under
2 TRC 0.44 verses 0.82
AVISTA CORPORATION COMMENTS IN GNR-E-12-01 Page 2
the current Business Plan and could hinder the distribution of low-income weatherization
funding that, if managed as described above, could result in cost-effective programs. With Avista
being a dual-fuel utility, Lewiston CAP may struggle to find the 15% matching funds for
example, fuel conversions because such funding is not immediately available (to Avista' s
understanding) from state or Federal sources; and customers may likely not have sufficient
budgets for these improvements. The agency is also adapting to personnel changes due to
retirements and ARRA funding ending, as well as the change in the availability of natural gas
measures.
The Company plans to proceed in 2013 to implement the current changes in the Business
Plan and Agency contracts, as necessary, to include: noted reduction of eligible measures for
installation; an emphasis on conversions, as well as, reviewing protocols to capture non-energy
benefits as described in the Staff Report with the goal of improving the TRC from the current
0.82.
Avista reiterates its appreciation for the Commission Staffs leadership in this process and
their commitment to improving the cost-effectiveness of our Idaho low-income weatherization
programs. We appreciate Commission Staff's time and effort to further discuss these comments
since filing their reply comments on December 7, 2012. It should be noted that even without an
85% cap, Avista has completed a 2013 DSM Business Plan that includes a cost-effective low
income portfolio. This plan includes additional analysis using new protocols to quantify non-
energy benefits that results in the previously reported 2011 summary total resource cost (TRC)
for low-income electric and natural gas moving from 0.44 to 0.82. (NEBs include the known
and quantifiable non-energy benefits associated with Health and Human Safety and the value of
standard efficient equipment that would have been installed, at a minimum, rather than replacing
AVISTA CORPORATION COMMENTS IN GNR-E-12-01 Page 3
a measure on burnout with a high efficiency improvement.) Based on the 2011 TRC of 0.82 and
adjustments made in the delivery and approved measures list for the Lewiston CAP, Avista has
confidence in a much improved TRC in 2013 based on a business plan TRC goal of 1.0 without
capping project costs.
In summary, Commission Staff, in its report had suggested that the Company fund up to
100% of each measure, but not more than 85% of each weatherization project. However, since
fuel conversions are shown to be extremely cost-effective and fuel conversions are not on the list
of approved federal measures, and are therefore not eligible for a 15% federal funding match (the
main source of CAP matching funds). And, since fuel conversions are much most expensive
than other weatherization measures, the Company will undoubtedly exceed the 85% cap on any
project that includes fuel conversions Therefore, it is the Commission Staff and Avista's view
that the 85% cap would prevent fuel conversions and will hinder the Company's ability to
improve the cost-effectiveness of its low-income program. Avista respectfully requests the
Commission not order a hard cap of 85% on total project costs in light of the above.
Respectfully submitted this 4th day of January 2013.
AVISTA CORPORATION
ffNbA GERVAIS
Manager, Regulatory Policy
AVISTA CORPORATION COMMENTS IN GNR-E-12-01 Page 4