2001216_sw.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
JEAN JEWELL
RON LAW
LOUANN WESTERFIELD
TONYA CLARK
DON HOWELL
DAVE SCHUNKE
RANDY LOBB
TERRI CARLOCK
MIKE FUSS
WORKING FILE
FROM:
DATE:
FEBRUARY 16, 2001 RE: CASE NO. IPC-E-01-04 (Idaho Power)
TARIFF SCHEDULE 22—ENERGY BUY BACK TEMPORARY PROGRAM

On February 12, 2001, Idaho Power Company (Idaho Power; Company) filed an Application with the Idaho Public Utilities Commission (Commission) for approval of Tariff Schedule 22, an Energy Buy Back Temporary Program (Program) applicable to the Company’s industrial customers, large commercial customers, and any customer capable of reducing electrical load by 1000 KW.
Current projections of below normal stream flows in the Snake River and its tributaries, coupled with the volatile wholesale energy market in the western United States, Idaho Power states, has created a situation where the Company believes that it is cost effective to acquire reductions in consumption of electrical energy in order to avoid the purchase of high cost power from the wholesale market.
The proposed Program encourages customers to voluntarily reduce electric load in exchange for credit against the customer’s Idaho Power account for the curtailed energy. The goal will be to make this credit, called the Exchange Credit, economically beneficial to both the customer, the Company, and the Company’s other customers as well. Benefits to the Company and other customers will result from reduced system demand as well as reduced costs.
The set of hours that a customer is given the opportunity to exchange electrical load for Exchange Credit is called an Exchange Event. An Exchange Event will typically be initiated during peak load hours when the Company anticipates high electricity costs. Customers will receive notice the day of, the day ahead, or two days ahead of the Exchange Event. Exchange Events will be for a minimum of two hours. The price for kilowatt hour that the Company offers the customer is called the Bid Price. The Bid Price will vary hour to hour and the customer may commit to load reductions for specific hours. The minimum time limit for an Exchange Event will be two consecutive hours for both the customer and the Company. There can be multiple Exchange Events in one day. Load reduction by customer will be a voluntary decision by the customer for a set number of hours in exchange for an agreed upon monetary consideration that will vary hourly and between Exchange Events.
In order to participate, a customer must satisfy certain conditions. The customer may be required to demonstrate to the satisfaction of the Company that the customer is able to reduce its electrical load by at least 1000 KW. The customer must have a meter provided by the Company which is capable of recording interval usage data for intervals no greater than 60 minutes. Customers are required to pay for costs associated with any load monitoring and communications equipment necessary to participate in the Program. Other conditions are set forth in the Application and the Company’s tariff. A secured internet site will allow participating customers and the Company to communicate with one another.
The Energy Buy Back Temporary Program will expire March 14, 2002, unless extended by the Company. This program will not affect the calculation of Demand, Customer, Basic, or Facilities charges associated with a customer’s normal rate schedule. The Company will ask that each customer remain on this schedule for a minimum of one year or until the termination date, whichever is sooner. If a customer voluntarily terminates the agreement, the customer will be responsible for reimbursing the Company for setup costs associated with enrolling the customer in the Program.
Commencement of the Program is dependent upon Idaho Power being assured that it will be entitled to recover through retail sales the payments that the Company will make to the customers participating in the program and that the Company will also be entitled to recover through retail sales its lost revenues resulting from the implementation of the Program. The Company’s ultimate implementation of the Program is conditioned upon the receipt of an appropriate accounting and ratemaking Order which would authorize utilization of the Power Cost Adjustment rate mechanism or similar type of mechanism to recover the Company’s costs.
Idaho Power requests that its tariff be effective March 14, 2001, and that its Application be processed pursuant to Modified Procedure, i.e., by written comment rather than by evidentiary hearing.
Commission Decision
Staff recommends that the Company’s Application be initially processed under Modified Procedure. Although the Company has specifically requested that its proposed effective date not be suspended, Staff sees no reason to shorten the standard 21-day comment period. The Company has been contacted and apprised that a short suspension might be necessary. If the Commission approves Modified Procedure, the comment deadline would be March 14. The matter would be on the Commission’s decision agenda for March 20. Does the Commission find Modified Procedure appropriate? If so, Staff recommends that the proposed effective date of March 14 be suspended for two weeks or until such earlier time as the Commission might issue its Order.

vld/M:IPC-E-01-04_sw

DECISION MEMORANDUM 3