20121207Reply Comments.pdf

KARL T. KLEIN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
P0 BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5156
ZDJ2 DEC -7 PM 3:15
IDAHO PUBLIC Ur" JTr_,S COi4$i.SsoN
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
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 )
ELECTRIC UTILITIES. )
)
CASE NO. GNR-E-12-01
REPLY COMMENTS OF
THE COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission files these reply comments on the
cost-effectiveness and funding of low-income weatherization programs and energy conservation
programs for electric utilities.
BACKGROUND
Idaho Power Company, Avista Utilities, and Rocky Mountain Power Company offer low-
income weatherization programs and energy conservation education programs. In recent rate
cases, questions surfaced about how to best determine each utility's appropriate level of program
funding. In particular, concerns arose about how such programs are to be accurately assessed for
cost-effectiveness and overall customer need. The Commission thus initiated this generic case
and directed Staff to convene a public workshop. See Notice of Public Workshop issued
February 15, 2012. At the workshop, "utilities, interested persons, and Commission Staff [were]
to explore in greater detail issues related to the funding, implementation, and evaluation of utility
STAFF COMMENTS 1 DECEMBER 7, 2012
low-income weatherization and energy conservation education programs. Following the
workshop, Commission Staff shall prepare and submit a report of its findings and
recommendations." Id. The "Commission then will schedule further proceedings and hearings
as needed." Id.
The workshop occurred, and Staff filed its report on October 23, 2012 (the "Report").
Staff's Report contains 56 pages of analysis and recommendations regarding the three electric
utilities' low-income weatherization and energy conservation education programs.
On November 2, 2012, the Commission issued a Notice of Modified Procedure that set
deadlines for interested persons to comment on Staffs Report, for Staff to reply to such
comments, and for intervenor funding requests. See Order No. 32673. Avista, Idaho Power,
Rocky Mountain Power, the Snake River Alliance (SRA), the Idaho Conservation League (ICL),
and the Community Action Partnership Association of Idaho (CAPAI) filed written comments.
Staff replies to those comments as follows.
STAFF REPLY
Staff appreciates the level of participation and responsiveness displayed by parties in this
proceeding. Many groups traveled significant distance to attend the two-day workshop and all
groups spent considerable time answering Staffs informal questions both before and after the
workshop. All parties also provided feedback on the draft report, which greatly improved the
final report. Although differences remain on some issues, many long-standing questions have
been answered and resolved. Staff takes this opportunity to respond to some, but not all, of the
remaining concerns. Silence on a particular issue in these reply comments should not be
interpreted as agreement; rather, Staffs position has already been presented in the Staff Report.
A. Reply to Idaho Power
Idaho Power's comments suggest that: (1) low-income weatherization funding levels
should be primarily based on qualified-customers' need for weatherization, as derived from
adjusted LIHEAP participant data; and (2) some of Staffs proposed methods for increasing cost-
effectiveness are inconsistent with how cost-effectiveness tests are applied to other programs and
are not supported by standard practices in the industry. Staff addresses each concern below.
STAFF COMMENTS 2 DECEMBER 7, 2012
1.Idaho Power's concerns about determining funding based on need.
In Recommendation 16, Staff suggests that low-income weatherization funding should be
based on five factors. Of these five factors, Idaho Power believes that funding levels should be
based primarily on: (a) qualified customers' need for weatherization, as derived from the
adjusted LIHEAP participant list; and (b) the CAPs' ability to spend the prior year's budget.
As stated in the Report, Staff does not believe that the LIHEAP data are sufficiently
robust to constitute the primary funding mechanism for low-income weatherization programs.
Idaho Power believes that the LIHEAP data should be adjusted to: (1) exclude previously
weatherized homes; (2) include only homes with auditor-verified electric heat with the potential
to install qualifying measures; and (3) exclude homes with disconnected accounts or accounts
where the original applicant has since moved. Theoretically, this is a good plan. But the first two
conditions cannot be verified without sending an auditor to each home, which generally happens
during the final weatherization review process. Since it can takes years for a LIHEAP
participant to reach the top of the weatherization list, it would waste resources to physically audit
each LIHEAP participant's home every year or during each funding review to verify the exact
need for weatherization as proposed by Idaho Power.
Further, at the workshop, CAPAI and the CAP agencies confirmed that 10% or less of the
participants on the LIHEAP list are found upon audit to not qualify for weatherization. Since
annual funding is unlikely to equal the need for weatherization, and the percentage of non-
qualifying homes is probably similar between utilities, Staff believes it would be imprudent to
physically verify those conditions years before weatherization, especially since those homes will
have to be re-verified immediately before weatherization. Although Staff believes that
confirming these conditions requires undue expense, Staff continues to welcome all suggestions
on how LIHEAP-participant data might be made to more accurately indicate the need for
weatherization.
2.Idaho Power's concerns about determining program cost-effectiveness.
Idaho Power's second concern is that some of Staffs cost-effectiveness
recommendations "create inconsistencies in the cost-effectiveness tests as applied to other
STAFF COMMENTS 3 DECEMBER 7, 2012
programs and that they are not supported by standard practices in the industry." Idaho Power
makes four points.
First, Idaho Power questions Staff's recommendation that a utility use a 10% adder when
calculating a program's cost-effectiveness. In this regard, Staff reminds Idaho Power that using
the adder is optional and that utilities may include or exclude the adder as they see fit. If Idaho
Power believes including the adder would make its cost-effectiveness calculations inconsistent,
then the Company need not include the adder in those calculations.
Second, Idaho Power questions Staffs recommendation that utilities claim 100% of the
energy savings for each project for which they provide funding. "Idaho Power believes that in
order to be internally consistent and align with industry standards, a utility should not claim
greater benefits for a project than can be allocated based upon the costs it contributed to the
project (e.g., if a utility funds 70% of a project and 30% is federally funded, the utility should not
be able to claim 100% of the savings)."2
Staff has repeatedly expressed that no other Idaho Power DSM program claims less than
100% of the savings it generates. As described in Staffs Report, if Idaho Power pays a
residential customer $50 to buy an Energy Star clothes washer and the customer pays the
washer's remaining cost, the Company claims 100% of the savings. This is consistent with
industry standards, and adopting Staffs recommendation to apply this methodology to Idaho
Power's low-income program would align it with how the Company calculates cost-effectiveness
for its other programs.
While Idaho Power does not include the energy savings generated by federal money as a
benefit in the Total Resource Cost test (TRC) for its low-income program, it does include those
costs in the TRC.3 Staff knows of no other cost-effectiveness calculation at Idaho Power or any
other utility which includes 100% of the costs, but less than 100% of the energy savings. If
Idaho Power believes that energy savings generated by federal contributions should be treated
differently than energy savings generated by utility contributions, Staff welcomes that
discussion.
Third, Idaho Power objects that Staffs recommendation for quantifying non-energy
benefits deviates from industry standards. Staffs Report states: "The list of non-energy benefits
'Idaho Power comments, page 2.
2 Idaho Power comments, page 4.
STAFF COMMENTS 4 DECEMBER 7, 2012
that are quantified and monetized by utilities across the country is long, diverse, and undefined.
Since [Staffs] proposed method likely underestimates the value of the health, safety, and repair
measures and provides a transparent one-to-one ratio of benefits to investments, Staff is
comfortable recommending its use... .' Staff observes that Idaho Power uses internal program-
manager estimates—a much less rigorous method than proposed by Staff—to estimate that its
irrigation efficiency program produces generous non-energy benefits.
Idaho Power asks that Staff clarify how its recommendation for quantifying non-energy
benefits would apply. In sum, Staff recommends that this quantification of non-energy benefits
be restricted to Idaho Power's two low-income weatherization programs since these are the only
programs for which the Weatherization Assistance Program (WAP) guidelines specify finding
for health, safety, and repair measures. Consistent with industry practices, Staff recommends
that these non-energy benefits only be included in the TRC.
Fourth, Idaho Power disagrees with Staffs recommendation to include payment-related
non-energy benefits in cost-effectiveness calculations when possible. In this regard, Staff
reminds the Company that this recommendation is optional for precisely the reasons stated by the
Company.
B. Reply to Rocky Mountain Power
Staff thanks Rocky Mountain Power for the correction to footnote 19 in the Staff Report.
In Recommendation 12, Staff proposes: "... utilities vary the independent contractors
hired to evaluate [low-income] programs." In response to this recommendation, the Company
writes: "If utilities are required to rotate evaluators, without consideration of cost, the
evaluations may result in higher overall costs and lower benefit to cost ratio for the portfolio
raising risks associated with prudency."5 Staff has two replies to this point. First, Staff never
supported ignoring cost as a consideration. Consistent with what a member of the Regional
Technical Forum's (RTF) Policy Advisory Committee (PAC) recently observed, more evaluators
than evaluation work exist in the Northwest. Competition between evaluators is likely to contain
the costs of evaluations. Second, besides the beneficial effects of competition, Staff believes that
Rocky Mountain Power's recent practice of including evaluation costs at the portfolio level
Staff Report, page 23.
Rocky Mountain Power comments, page 3.
STAFF COMMENTS 5 DECEMBER 7, 2012
instead of the program level will mitigate the cost-effectiveness consequences of rotating
evaluators.
Rocky Mountain Power suggests that CAPAI provide an annual report to share relevant
low-income weatherization program information with utilities and Staff. Staff is interested in
exploring this recommendation further.
C. Reply to Avista
In Recommendation 15, Staff proposes that: "...Avista pay no more than 85% of the cost
per project and up to 100% of the cost per measure. This adjustment will increase the cost-
effectiveness of Avista's program and facilitate cost-effectiveness comparisons between the three
utilities." In response to this recommendation, Avista' s states, "Restricting the proportion of the
utility incentive to no more than 85% of the total cost will not necessarily have a direct impact on
TRC cost-effectiveness, since all incremental costs would be included within that calculation
regardless of whether the customer or utility funds the measure... •,,6 Staff notes that Avista
considers federal money to be an importation of funds from outside the ratepayer population and,
consequently, not an item to be included as a cost in the TRC. Thus, reducing the proportion of
utility funding per project will improve the TRC.
Staff understands that Avista' s treatment of reduced arrearages and bad debt as transfer
payments means those amounts will cancel out from the TRC calculation.
D. Reply to Idaho Conservation League
The ICL's concerns with Staff's report focus on two issues: non-energy benefits and
Staff's proposed funding guidelines.
Regarding non-energy benefits, the ICL writes that "Utilities deserve a clear standard to
meet when incorporating non-energy benefits."7 Staff has provided a clear standard by
recommending a dollar-for-dollar valuation of cost versus benefit for health, safety, and repair
measures. Staff continues to welcome discussion of any alternate methods for estimating non-
energy benefits.
6 Avista comments, page 2.
ICL comments, page 1.
STAFF COMMENTS 6 DECEMBER 7, 2012
In Recommendation 16.5, Staff proposes 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." ICL argues that Staff's proposed standard is too strict. ICL believes that this
standard should be relaxed if the funds are allocated to projects that will be completed in the next
year or if the unspent funds are minimal. Staff notes that if the adjusted LIHEAP data show a
lengthy waiting list for weatherization, then a significant amount of unspent funds from the
previous year could arguably be allocated to projects in the following year. Staff may be able to
support a funding increase if unspent funds in the prior year are minimal.
E. Reply to Snake River Alliance
In Recommendation 7, Staff proposes that cost-effectiveness analyses include
quantifiable, payment-related non-energy benefits but exclude "economic non-energy benefits
and non-energy benefits that accrue to program participants because [such benefits] have not yet
been rigorously quantified. These include increased property values, extended lives of
weatherized dwellings, health impacts, takeback, and increased comfort." SRA requests that
non-energy benefits be further analyzed, and it questions Staff's recommendation that cost-
effectiveness analyses exclude these other kinds of economic non-energy benefits. SRA states:
"...to the extent staff continues to be uncomfortable considering such benefits, we recommend
that the Commission direct Staff to more fully explore [non-energy benefits] if it will help
resolve any misgivings. We hope that the Commission does not consider this a resolved
issue...."
Staff has invested considerable time over the past year investigating and soliciting
feedback on non-energy benefits, and has recommended a mechanism for including non-energy
benefits in its Report. But Staff is uncomfortable including all non-energy benefits as they have
been quantified thus far. Staff's Report demonstrates, however, that this is not a closed issue and
that Staff will "continue to evaluate the merits of these benefits for future inclusion."8
In Recommendation 11, Staff recommends against "constructing a specific cost-
effectiveness test for low income programs." SRA asks that Staff "more fully explain" its
recommendation. In sum, low-income specific tests are often predicated on extremely generous
and weakly quantified non-energy benefits. Since Staff has not found sufficient evidence to
8 Staff Report, page 21.
STAFF COMMENTS 7 DECEMBER 7, 2012
include many non-energy benefits as they are currently quantified, Staff cannot support a specific
test that unduly emphasizes them. As stated in the Report, Staff remains open to discussions
with SRA or any other party that can demonstrate rigorous quantification and monetization of
non-energy benefits.
Besides expressing concerns about non-energy benefits, SRA characterizes Staff
Recommendation 16—that funding not be increased if all of the prior year's funds are not
expended—as "overbroad" and states the recommendation may "overlook certain extraordinary
circumstances beyond a particular CAP's control."9 To clarify, this recommendation is not a
judgment on any CAP's performance; it merely is one of five indicators of whether or not the
need for weatherization justifies a funding increase.
In Recommendation 17, Staff proposes "that a funding 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." SRA objects to waiting until 2014 to review a funding increase for Avista. Staff
notes that Avista' s program is much more cost-ineffective than the other utilities' low-income
programs.
F. Reply to CAPAI
Despite the tenor and length of CAPAI's comments, Staff recognizes that CAPAI
supports many of Staff's recommendations. Staff particularly appreciates CAPAI's support on
reducing the percentage of funding per project for Avista's program, as suggested in
Recommendation 15. Staff will respond to some, but not all, of the concerns raised by CAPAI
and reiterates that Staff's silence on an issue does not imply agreement.
CAPAI's concerns about Recommendation 4.
In Recommendation 4, Staff proposes that "Idaho Power develop a method to include
indirect overhead administrative costs in its low income program cost-effectiveness in a manner
than approximates how these expenses are assigned to supply-side resources. This adjustment
may decrease the cost-effectiveness of Idaho Power's program." Responding to this
recommendation, CAPAI suggests two caveats ("but-for" and "incremental costs test") for when
SRA comments, page 4.
STAFF COMMENTS 8 DECEMBER 7, 2012
indirect administrative overhead costs should be applied to the cost-effectiveness calculations of
low-income programs.10 CAPAI's definitions of those terms actually describe direct
administrative overhead costs, which are already included in the cost-effectiveness analysis.
Apart from the details of cost-effectiveness, CAPAI expresses concern with Staff's
treatment of non-energy benefits and Staff's recommended funding guidelines. CAPAI writes,
"By excluding the identified 'ancillary non-energy benefits' in effect, Staff is assigning a $0
value to these non-energy benefits, a result that everyone, including Staff, concedes is in error."
CAPAI is mistaken that Staff has assigned a $0 value to all ancillary non-energy benefits. By
assigning a dollar-for-dollar value for the non-energy benefits produced by health, safety, and
repair measures as suggested in Recommendation 8, Staff's proposed methodology captures
some, but not all, non-energy benefits produced by low-income programs.
CAPA! claims that Staff's analysis of non-energy benefits is flawed because Staff does
not reference the seminal 2002 Oakridge National Laboratory (ORNL) study on non-energy
benefits. 12 In fact, Staff's Report references this study on page 26, and page 17 of CAPAI's
comments acknowledges Staff's reference. As CAPAI points out, that study is a literature
review of low-income no! n-energy benefits; the study does not discuss, even in broad terms, how
the non-energy benefits were estimated. Since Staff found considerable problems with a recent,
Idaho-specific study of non-energy benefits conducted by Cadmus for Rocky Mountain Power,
Staff cannot blindly accept what the 2002 ORNL authors themselves describe as a "very broad"3
range of non-energy benefit values compiled with national data generated at least twelve years
ago. CAPAI even quotes the 2002 ORNL study as saying that two studies on PG&E, a
California utility, were "especially useful"14 to the 2002 ORNL meta-analysis.
CAPAI claims no one believes that low-income programs do not produce non-energy
benefits. It attempts to support this claim by listing the point estimates provided by the 2002
ORNL. See CAPAI's Comments at 18. But CAPAI ignores—and its chart omits—the range
estimates of benefits published on page 23 of the 2002 ORNL report, two of which include a
zero value as a possibility for those categories of non-energy benefits.
10 CAPA! comments, page 11.
"CAPAI comments, page 16.
12 CAPAI comments, page 16.
13 2002 ORNL, page 2.
14 CAPAI comments, page 17.
STAFF COMMENTS 9 DECEMBER 7, 2012
Recognizing that Staff cannot accept the entirety of the 2002 ONRL summary, CAPAI
recommends including a non-energy "multiplier of 25 - 30%,15 which is supported by the NW
Energy Coalition and which CAPAI believes is a 50% discount of the 2002 ONRL summary.
Since health and safety measures can be 15% of a weatherization program's budget and Staff has
supported using a 10% adder, Staff has in effect supported a 25% non-energy benefits adder as
recommended by CAPAI. This also contradicts CAPAI's assertion that Staff has recommended
a zero value for non-energy benefits.
Staff is especially troubled that CAPAI supports including all the 2002 ORNL non-
energy benefits, in addition to both of Staff's proposed dollar-for-dollar treatments of health,
safety, and repair measures as non-energy benefits. Since the Staff and 2002 ORNL categories
of non-energy benefits overlap, CAPAI is recommending double-counting non-energy benefits.
In support of the 2002 ORNL summary, CAPAI claims that "the discount rate applied by
ORNL was 3.2%, the same as that recommended in the Staff Report (Staff Report, at 19)."
CAPAI is incorrect in arguing that Staff's Report recommended a 3.2% discount rate. First,
CAPAI actually references Staff's draft report, not the final Staff Report.'6 Second, the final
Staff Report does not recommend any particular value as the appropriate discount rate; rather,
the recommendation was limited to support for a modified discount rate. 17
2. CAPAI's comments about Recommendation 12.
While CAPAI agrees with Staff on Recommendation 12 stating: "... using a variety of
contractors makes sense...", CAPAI then criticizes Staff by stating: "...in advancing this
recommendation, Staff, itself, should abide by the implications of its own recommendations (i.e.,
that similar findings by multiple evaluators leads to a more robust and trustworthy conclusion)
when it comes to the existence and quantifiability of non-energy benefits." 8
Staff's support for using multiple vendors to evaluate utility DSM programs should not
be confused with Staff's criticism of CAPAI's using the 2002 ORNL report to support further
increases in non-energy benefits. CAPAI overlooks a critical difference between
15 CAPAI comments, page 19.
16 As agreed at the workshop, Staff circulated its draft report to obtain feedback from workshop participants in an
effort to ensure that all participants positions were known and could be adequately considered by Staff before
finalizing the Report. Page 19 of the draft report included the cited discount rates, but page 19 of the final Staff
Report filed in this case does not reference discount rates.
17 Staff Report, pages 25-27.
18CAPAI comments, page 25.
STAFF COMMENTS 10 DECEMBER 7, 2012
Recommendation 12 and the 2002 ORNL study. If Recommendation 12 is adopted, multiple
evaluators will have a chance to examine the same program, albeit in different years. Similar
evaluation results from more than one evaluator about the same program are generally accepted
to demonstrate robust findings. But the 2002 ORNL study is a compilation of many studies
about different programs, and CAPAI has not demonstrated that any individual study's findings
about a particular program were replicated by a second evaluator. Thus, CAPAI's suggestion
does not correctly extrapolate the value of replicated program findings implicit in
Recommendation 12.
Relating to the broader concept of cost-effectiveness calculations, CAPAI recommends
using a hybrid approach recently endorsed in a Synapse Energy Economics report. 19 In fact,
Staff's low-income recommendations are a hybrid approach as described by Synapse and
endorsed by CAPAI; Staff's recommendations combine the more readily quantifiable non-energy
benefits (such as health, safety, and repair measures) with a 10% adder (for hard to measure non-
energy benefits).20 Staff agrees with CAPAI's quote of Synapse which states: "Additionally, this
[hybrid] method affords regulators flexibility in determining the most appropriate [non-energy
benefit] policy for their state. Finally, it allows consideration of all [non-energy benefits]
believed to be most significant, with the choice of methodology used to determine each [non-
energy benefit] being made on the basis of available resources."2' 22
3. CAPAI's comments about Recommendation 16.
CAPAI provides mixed comments about Recommendation 16. Staff appreciates
CAPAI' s support of Staff funding-level Recommendations 16.3, 16.4, and 16.5. Staff
recognizes, however, that some of CAPAI's strongest concerns are about funding
Recommendations 16.1 and 16.2. In particular, CAPAI disagrees with Recommendation 16. 1,
which states: "Funding could be increased if the list of not-previously weatherized homes
waiting for weatherization (as indicated by the LIHEAP data) has increased significantly since
the last review." CAPAI writes: "If low-income programs are not going to be funded to the
19 Synapse Energy Economics, Best Practices in Energy Efficiency Program Screening, July 2012.
20 Synapse Energy Economics, page 38.
21 Synapse Energy Economics, page 38.
22 CAPAI comments, page 24.
STAFF COMMENTS 11 DECEMBER 7, 2012
levels of need, then need is inappropriate to use as a funding mechanism."23 Staff believes that a
better case for increasing funding for a cost-effective program can be made if need is
demonstrated to be increasing.
4. CAPAI'S comments about Recommendation 13.
CAPAI strongly opposes Recommendation 13, in which Staff continues to support the
long-standing policy of allowing unspent tariff rider-funded low-income weatherization funds to
be used for other DSM programs. Staff bases its recommendation on the source of the funds,
and not, as CAPAI suggests, on the use of the funds or any details of cost-effectiveness.
Since Avista and Rocky Mountain Power's programs are funded by tariff riders
specifically collected from customers for energy efficiency, it makes sense for any remaining
portion of the low-income budgets to continue to be used for that broader purpose.
Low-income weatherization program funding already receives preferential treatment in
that the Commission has ordered the utilities to provide a minimum amount of funding each
year. No other DSM program enjoys that protection. Further, the Staff Report reads that
unspent program funds "are applied to either low income weatherization programs in future
years or other programs in the current year." After the program year has ended, the remaining
funding can still be used for low-income weatherization, but it is no longer directly protected.
Staff reminds CAPAI of CAPAI and the CAPs' position at the workshop that since need exceeds
available funding and the deluge of ARRA 24 funding has passed, they do not anticipate that
unspent funds will become a significant problem.
CAPAI also complains: "What Staff has not done.., is explain IlLhj program funding
collected in a particular time period must be matched with expenditures to exactly the same
period."25 CAPAI ignores that there is no requirement for collections to exactly match
expenditures. In fact, utilities may fund more than the Commission-ordered amount of low-
income weatherization at their discretion, as Idaho Power has done since 2008 with its
Weatherization Solutions for Eligible Customers (WSEC) program. 26
23 CAPAI comments, page 30.
24 The American Recovery and Reinvestment Act of 2009.
CAPAI comments, page 27.
26 Idaho Power's 2011 funding for this program was over $700,000.
STAFF COMMENTS 12 DECEMBER 7, 2012
Staff doubts that this policy, which has been in effect for many years, would encourage
CAPs to "find ways"27 to spend their program budgets by the end of the year as indicated by
CAPAI. Before payment is issued, all CAP invoices are reviewed by utilities, which are
subjected to prudency reviews before recovery. Any inappropriate expenditure in response to
this policy would jeopardize the programs' standing with utilities and regulators. CAPAI did not
raise any concern about this issue at the workshop or when the draft report was distributed.
5. CAPAI's comments about Recommendation 17.
Staff Recommendation 17 proposes that program funding levels be maintained 28 until
spring 2013 for Idaho Power and Rocky Mountain Power, and until spring 2014 for Avista.
CAPAI responds to this recommendation by citing the draft report nine times 29 and making
several claims that either are addressed in the final Report or elsewhere in these reply comments.
Rather than respond to these claims again, Staff prefers to address three of CAPAI's suggestions
that could have been previously addressed in more detail had they been presented in either of the
meetings Staff initiated with CAPAI, the two-day workshop, in response to the draft report, or
any time before the final Report was published.
First, CAPAI suggests that the Commission should "approve a level-service budget for
low income weatherization rather than the level-funding budget proposed by Staff. 00 While
Staff does not necessarily oppose this idea, it is likely that maintaining a level-service budget
(i.e., a set number of homes weatherized per year, rather than a set funding amount) would
increase the total annual funding required for each program. Since the cost-effectiveness of
these programs is still unresolved, Staff cannot support this suggestion now. However, it may be
beneficial to include the average cost of weatherizing each home as an additional consideration
when establishing funding levels for cost-effective programs in the future.
27 CAPAI comments, page 28.
28 CAPAI believes that if funding reviews for these programs are delayed until submission of the utilities' DSM
reports, the Recommendations should include specific deadlines by which those reports should be submitted. Order
No. 29419 establishes a March 15 annual filing date for Idaho Power's DSM report and that Order No. 29976
establishes a May 1 filing date for Rocky Mountain Power's DSM report. Avista is bound by the 2009 DSM MOU
to file an annual DSM report and files it in the spring as well.
29 CAPAI continuously cites Staffs draft report as if it states Staffs recommendations as filed in this case. Staff
circulated the draft report to workshop participants as a courtesy in order to obtain their feedback. Staff carefully
considered that feedback in preparing the final Report, and Staff's recommendations are reflected in the final
Report, not the draft. The Commission should ignore CAPAI's suggestions to the contrary.
30 CAPAI comments, page 33.
STAFF COMMENTS 13 DECEMBER 7, 2012
Second, CAPAI suggests that "Stakeholders (including CAPAI) should be willing to
accept the findings of the Department of Energy's WAP [Weatherization Assistance Program]
evaluation whether that evaluation finds the presence or absence of non-energy benefits. No
draft report has been released and no insights can be provided at this time of what the results of
that National Evaluation might report."3 ' While Staff looks forward to a national evaluation of
low-income programs, Staff cannot support the findings of any evaluation before the findings are
published, much less without any indication about the focus, goals, timetable, and methods of the
study.
Third, CAPAI suggests that Rocky Mountain Power's Con-Ed program be expanded to
include technical assistance to public housing authorities to promote energy efficiency in low-
income public and assisted housing developments. CAPAI's suggestion stems from CAPAI's
opposition to Staff's recommendation to decrease Con-Ed funding for Rocky Mountain Power
from $50,000 to $25,000 annually. 32 Unfortunately, CAPAI's suggestion comes too late for
Staff to conduct a thorough analysis that could be applied to this case. Staff would have
preferred for CAPAI to have offered its suggestion at any time during the previous year so that a
detailed program plan could have been developed and reviewed. One reason for the proposed
reduction in funding is CAPAI's recent difficulty in developing and delivering Con-Ed programs
on time. 33 Accordingly, Staff does not support including a new program at this point without
further consideration.
Before concluding this reply, Staff takes issue with CAPAI' s allegation that, "It was
apparent that Staff had already formulated specific positions on numerous issues" by the time of
the workshop and/or draft report. 34 CAPAI ignores that Staff made many significant changes to
its initial approach and position during the entire process, which other parties characterized as
"collaborative"35 and "thorough. ,36 In addition to incorporating suggestions from other parties,
two major changes, one of which affected the funding methodology, were based on feedback
from CAPAI's executive director at the workshop.
' CAPAI comments, page 34.
32 Recommendation 18, Staff Report, page 44.
See Staff Report, page 42 (noting CAPAI's two-year delay in developing the original Con-Ed program for Rocky
Mountain Power).
" CAPAI comments, page 7.
Idaho Power comments, page 2.
36 ICL comments, page 1. Avista comments, page 1.
STAFF COMMENTS 14 DECEMBER 7, 2012
STAFF RECOMMENDATION
Staff recommends that the Commission accept Staff's Report, order Avista to pay no
more than 85% of the cost per low income weatherization project and up to 100% of the cost per
measure, and order the amount of funding for Rocky Mountain Power's Conservation Education
program to be $25,000 with the clear specification that this amount should be funded annually.
Respectfully submitted this day of December 2012.
Al
Karl T. Klein
Deputy Attorney General
Technical Staff: Stacey Donohue
i:umisc/comments/gnre 12.1 kksd reply comments
STAFF COMMENTS 15 DECEMBER 7, 2012
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 7TH DAY OF DECEMBER 2012,
SERVED THE FOREGOING REPLY COMMENTS OF THE COMMISSION STAFF,
IN CASE NO. GNR-E-12-01, BY MAILING A COPY THEREOF, POSTAGE
PREPAID, TO THE FOLLOWING:
DAVID J MEYER
VP & CHIEF COUNSEL
AVISTA CORPORATION
P0 BOX 3727
SPOKANE WA 99220-3727
E-MAIL: [e-mail]
LISA D NORDSTROM
DONOVAN E WALKER
IDAHO POWER COMPANY
P0 BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
[e-mail]
TED WESTON
ID REG AFFAIRS MGR
ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
E-MAIL: [e-mail]
KELLY NOR WOOD
VP - STATE & FED REG
AVISTA CORPORATION
P0 BOX 3727
SPOKANE WA 99220-3727
E-MAIL: [e-mail]
GREGORY W SAID
VP REGULATORY AFFAIRS
IDAHO POWER COMPANY
P0 BOX 70
BOISE ID 83707-0070
E-MAIL: gsaid(idahopower.com
DANIEL E SOLANDER
ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
E-MAIL: [e-mail]
SECRE VARY
CERTIFICATE OF SERVICE