20020328Decision Memo.doc

DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RON LAW
GENE FADNESS
BILL EASTLAKE
LOU ANN WESTERFIELD
RANDY LOBB
DON HOWELL
LYNN ANDERSON
BEV BARKER
DAN GRAVES
TONYA CLARK
WORKING FILE

FROM: LISA NORDSTROM

DATE: MARCH 28, 2002

RE: IN THE MATTER OF THE INVESTIGATION OF IDAHO POWER COMPANY’S DEMAND-SIDE MAMAGEMENT PROGRAMS AND FUNDING, CASE NO. IPC-E-01-13.

On November 21, 2001, the Commission: 1) directed implementation of limited demand-side management (DSM) programs for the 2001-2002 winter heating season; 2) ordered the organization of an Idaho Power DSM Advisory Group; and 3) postponed consideration of a DSM surcharge until the Company’s Power Cost Adjustment (PCA) application is filed in the spring of 2002. Order No. 28894 at 1. More specifically, the Commission stated: “In order to properly consider a future funding mechanism, the Commission orders Idaho Power to form the Energy Efficiency Advisory Group and establish a plan for implementing long-term DSM programs.” Id. at 7. The ordering language likewise required the Company to “develop the advisory group . . . in preparation of the Commission’s further consideration of funding mechanisms next spring.” Id. at 9.

INTERVENORS’ MOTION TO ENFORCE ORDER
On March 14, 2002, the Land and Water Fund of the Rockies filed a Motion on behalf of Idaho Rivers United, Idaho Rural Council, NW Energy Coalition, and Mary McGown (Intervenors) to enforce Order No. 28894 with respect to the Order’s provisions requiring formation of an Energy Efficiency Advisory Group. According to the Motion, the Company “has not ‘formed’ or otherwise convened the advisory group” to date. Motion at 1. The Intervenors requested that the Commission grant the Motion and “take such action as necessary to ensure Idaho Power Company’s compliance with the Order.” Id.
The Intervenors stated that they are concerned that Idaho Power is “ignoring the Commission’s clear direction” and that “the Company’s recalcitrance should not be excused.” Id. at 2. Although Idaho Power had cited concerns about expending resources on DSM planning before a tariff rider funding mechanism was in place, the Intervenors stated that the Company “is simply delaying implementation of cost-effective DSM opportunities that are available, and should be fully exploited to the benefit of ratepayers as soon as possible.” Id. The Intervenors noted that they would consider a voluntary withdrawal of this Motion to avoid formal proceedings if an informal resolution could be achieved with the assistance of Staff and the Company. Id.
IDAHO POWER’S RESPONSE
Idaho Power Company filed a response to the Intervenors’ Motion on March 28, 2002. While sympathizing with the Intervenors as to the “uncertainty surrounding the long-term DSM programs in the Idaho Power service territory,” Idaho Power objects to the Intervenors’ description of the Company as being “recalcitrant.” Response at 1. Idaho Power acknowledged the dilemma facing the Commission in that the creation and funding of DSM programs would require a rate increase that is “not without controversy among Idaho Power’s customers.” Id. at 1-2.
The response explained the Company “understood it was to be prepared to move forward once the Commission had resolved the funding issue required to implement DSM programs.” Id. at 2. However, the Company “is reluctant to form the Energy Efficiency Advisory Group until after the Commission has provided necessary guidance as to the funding of the group and the DSM programs that would be created by Idaho Power.” Id. Idaho Power believes that resolution of the funding issues must occur before the DSM programs are implemented. Id. Consequently, the Company has formulated the charter for the Energy Efficiency Advisory Group but has not selected the individuals that would be members of the group. Id. at 2-3. Idaho Power stated “there is little, if anything, the Advisory Group can accomplish until the level of revenue that will be available for the DSM program is known to Idaho Power.” Id. at 3. However, the Company is ready to implement that Advisory Group once the Commission has resolved the funding issue. Id.
Although the Intervenors’ Motion stated that “the advisory group could prove very useful to inform the Commission’s consideration of a DSM tariff rider . . .,” Idaho Power did not envision the Advisory Group would report to or provide information to the Commission that would affect DSM funding deliberations. Id. Rather, the Company envisioned the Advisory Group as being created to benefit Idaho Power and customers in designing and operating DSM programs in a non-adversarial manner. Id.
Finally, the Company stated that it is certainly willing to meet with the Intervenors and Staff, but it is difficult for Idaho Power to envision what can be accomplished at such a meeting until the funding issue has been resolved. Id.
COMMISSION DECISION
1. How does the Commission wish to respond to the Intervenors’ Motion to Enforce Order?
■ Schedule the Motion for oral argument?
■ Find Idaho Power in contempt of Order No. 28894?
■ Direct Idaho Power to take specific action by a date certain?
■ Clarify the language in the Order to specify what, if any, actions the Company should take until the DSM program is funded?
2. If the Advisory Group is to meet prior to authorization of a DSM tariff rider, does the Commission wish to provide general guidance to the Advisory Group and Idaho Power regarding the amount of revenue or types of programs they should plan for?

Lisa D. Nordstrom
M:IPCE0113_ln
DECISION MEMORANDUM 1