20031024Final Order 29362.pdf

Office of the Secretary
Service Date
October 24, 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE INVESTIGATION
OF TIME-OF -USE PRICING FOR IDAHO
POWER RESIDENTIAL CUSTOMERS.
CASE NO. IPC-O2-
ORDER NO. 29362
Due to extremely low water conditions and large purchased power costs, Idaho
Power s residential rates increased approximately 39% over base rates between May 2001 and
2003. Over the last two years the Commission heard from many frustrated residential customers
who did not have the information and options necessary to make informed choices relative to
their use of energy. To address these concerns and investigate ways to reduce peak load for the
benefit of all ratepayers, the Commission instigated this docket to evaluate the viability of
residential time-of-use (TaU) metering.
Before the Commission can consider implementing TaU rate designs in the future
Idaho Power must first install the necessary metering infrastructure. Although automated meter
reading allows the meter to be read remotely and thus reduces operating costs, the most
beneficial rate designs (i., critical peak TOU ) require advanced meter reading (AMR).
discussed below, advanced meter reading also has significant benefits beyond those offered by
traditional remote meter reading.
Based upon the evidence in the record and in furtherance of the public interest, the
Commission directs Idaho Power to collaboratively develop and submit a Phase One AMR
Implementation Plan to replace current residential meters with advanced meters in selected
service areas. The Plan shall be filed within 60 days of the service date of this Order. The
Commission also directs Idaho Power to complete Phase One AMR installation by December 31
2004 and file an AMR Phase One implementation status report no later than the end of 2005.
1 Critical Peak TaU rates usually entail higher customer rates during periods of peak consumption or load. Higher
peak rates provide an incentive for customers to lower their monthly bill by reducing electric consumption during
periods of peak usage (i., heavy load hours during the months of July and August).
ORDER NO. 29362
- -
PROCEDURAL BACKGROUND
In Case Nos. IPC-02-2 and -, the Commission directed Idaho Power and the
Energy Efficiency Advisory Group (EEAG) to "evaluate and report to the Commission on the
viability of a Time-of-Use residential metering program by September 12, 2002.Order No.
29026 at 22. In compliance with this Order, Idaho Power submitted its "Report on Residential
Time-of-Use Pricing" (Report) on September 12, 2002.
On February 21 , 2003 , the Commission declined to authorize residential TaU rates
for Idaho Power customers. Order No. 29196. However, the Commission directed Idaho Power
to begin replacing its existing manual read metering equipment as soon as possible with an AMR
system. AMR allows the meter to be read remotely and thus reduces operational costs.
Anticipating the replacement process could be complete by the end of 2004, the Commission
ordered Idaho Power to submit an implementation plan no later than March 20 2003. Id.
On March 12 , 2003, Idaho Power filed three petitions in this docket: 1) a Petition to
Stay that portion of Order No. 29196 requiring the Company to submit the Advanced Meter
Implementation Plan by the March 20 deadline; 2) a Petition for Confirmation that Order No.
29196 is or is not a final Order; and 3) a Petition for Reconsideration. The Commission granted
the Company s Petition for Stay and denied the Petition for Reconsideration of AMR issues as
premature in Order Nos. 29210 and 29226, respectively. However, the Commission clarified
and amended the interlocutory portions of Order No. 29196 so that a more complete record could
be established on AMR issues.
To allow for further collaborative proceedings, the Commission stayed the
Company s Advanced Meter Implementation Plan filing requirement until: (1) a multi-party
implementation plan is endorsed by interested parties, (2) the Company unilaterally files its
Implementation Plan, or (3) the Commission issues an Order revoking the Stay and sets a new
filing date. Idaho Power updated and filed its AMR analysis on May 9, 2003 in anticipation of
the advanced meter public workshop. The purpose of the workshop was to allow interested
parties to offer comments on Idaho Power s AMR analysis, proposed timeline to install the
system, and possible methods to recover the cost of the meters and their installation.
ORDER NO. 29362
PUBLIC WORKSHOP AND UPDATED AMR ANALYSIS
The advanced meter public workshop held on May 19, 2003 was attended by
representatives of Idaho Power, Commission Staff, USCL Corporation, Distribution Control
Systems Inc. (DSCI), Energy Strategies Group (ESG), Advocates for the West, Avista
Corporation, ITRON, Landis+Gyr, Resource Associates International (RAI), and Pat Clifford.
Idaho Power s presentation discussed the criteria it used for choosing AMR
technology and the costs associated with different technologies. The Company proposed
implementing powerline AMR technology over a four-year period (2004-2007) at a cost of $86.
million. Under this scenario, Idaho Power predicted that AMR expenses would exceed those of
the "manual read" system until 2010 and that ratepayers would break even in 21 years. In short
Idaho Power stated that AMR was not a prudent investment at this time. However, the Company
intended to continue monitoring developments and conducting periodic assessments to determine
the appropriate time for deployment. Over time, the Company predicted that AMR would
become more cost-effective as employee costs increase and AMR costs decrease.
Participants asked the Company numerous questions on issues that included the
incremental costs of advanced metering options, load projections, implementation schedules
equipment life, salvage value of old meters and customer benefits. Because Staff had technical
questions requiring complex Company analysis, the participants agreed that any parties with
additional questions could submit them to Idaho Power for a written response. Staff asked and
the Company answered several rounds of questions after the workshop.
COMMENTS
Following the public workshop, the Commission established comment deadlines in
Order No. 29291. In particular, the Commission sought responses to the following questions:
1. Should the Commission direct the Company to implement AMR on its
system?
2. How can advanced metering technology enable Idaho Power Company
and ratepayers to make the most of future "smart grid" transmission and
distribution technology?
3. As part of a wise investment, what features or technology should the
Company employ?
4. Under what time frame should the Company implement AMR?
ORDER NO. 29362
- -
5. How should the Company recover the costs associated with AMR?
As of September 15, 2003, the Commission had received comments from 16
individuals and 5 organizations, including Idaho Power and Staff.
Individual Comments Of the 16 individual comments, 14 were from Idaho Power
customers. The comments can be broken down as follows: five were in favor of AMR, seven
were opposed to AMR, two were undecided, and two believed AMR could be beneficial if
implementation were delayed three to five years.
Those customers supporting AMR implementation cited its accuracy and cost-saving
potential. Two comments noted that AMR would eliminate the need for meter readers to
trudge" through their yards. One supporter noted that after 10 years of AMR analysis, Idaho
Power should develop TaU rates and subsequent rate/service fee adjustments for inclusion in
their fall 2003 general rate case filing. Although a Twin Falls resident generally supported
AMR, he wrote that Idaho Power s unique service territory would require a mix of technologies
and implementation timelines and that the Company should not be ordered to implement system
wide.
Opponents of AMR implementation, two of which were not Idaho Power customers
cited a number of concerns and opposed increasing rates to pay for such a venture. Commenters
questioned the cost-effectiveness of AMR, potential obsolescence of AMR technology, lost
meter reading jobs, and meter security. One customer believed that additional trials were needed
at a minimum. Another was concerned that the service life of a meter may be less than the AMR
equipment's break-even point. An Idaho City customer noted that AMR may lead to TOU-
pricing, which would not work for residential and small business customers who do not have the
opportunity to shift their power usage to different times of the day.
Two customers did not indicate their preference regarding AMR implementation.
One Emmett commenter noted
, "
if AMR is better, it should be cheaper to read." A Boise resident
indicated that the Company must show that AMR contributes to efficiency improvements within
the Company Account Management Processes that will translate into reduced rates and/or
increased profit. Moreover, the deployment timeframe should occur at a rate that does not
negatively impact ratepayers or shareholders.
Rather than require immediate implementation, two other customers recommended
the Commission order Idaho Power to implement AMR in three to five years.These
ORDER NO. 29362
commenters believed that implementation would become more feasible as costs decrease and the
technology becomes more familiar.
USCL Corporation Comments USCL Corporation, a Sacramento, California
manufacturer of electronic utility meters and AMR systems, filed joint comments with Mr.
Patrick Clifford, an Idaho Power ratepayer. Their comments noted that the cost figures presented
by Idaho Power at the May 19 workshop may have been inaccurate because they were based on
older technology. Furthermore, they believe the deployment cost figures "may be overstated and
the payback period for ROI recovery unduly prolonged." USCL Comments at 1-2. To allow
TaU implementation now or in the future, USCL argued that AMR meters should be able to
support TaU rates with up to 96 daily records of IS-minute interval data stored for 35 days.
Finally, USCL's comments noted that any communicating meter installed by Idaho Power
should be able to communicate to a customer display of real-time pricing information. This
optional device should be voluntarily purchased by the customer and supported by a wireless
communication methodology.
Landis+Gvr Inc. Comments Landis+Gyr, a Swiss meter and AMR system
manufacturer with North American operations based in Lafayette, Indiana, stated that AMR
should be implemented if it makes economic sense and provides value to Idaho Power
customers. Given the power price fluctuations experience in the last few years, Landis+Gyr
noted that many believe that 2-way AMR systems can be justified solely based on their demand
response benefits during critical peak periods. "Smart grid" systems can easily analyze many
types of information (load usage, outages, peak usage, etc.) in real-time over secured Internet
connections at nearly all endpoints on the distribution system. Smart grid systems can also make
faster decisions during critical periods.
Due to the diverse geography ofldaho Power s service territory, Landis+Gyr believes
it makes sense to implement a radio frequency solution in more densely populated urban areas
and a Power Line Carrier (PLC) solution like the Company s proposed DCSI technology in rural
areas. Landis+Gyr Comments at 1. Although Idaho Power s four-year deployment plan targets
high-cost meter-reading areas first, Landis+Gyr noted that initial deployments in urban areas
would provide the most impact from a demand response prospective. Id. at 2. The pending
federal energy bill will allow accelerated depreciation of the AMR meters from 15 years to 3
years. A monthly charge could also be added to customer bills to offset AMR system costs and
ORDER NO. 29362
additional revenues generated by monthly fees from the sale of optional enhanced services (e.
home monitoring/security).
DRAM Comments The Demand Response and Advanced Metering Coalition
(DRAM) is a policy organization comprised of utilities, public interest groups, metering and
communications companies and demand response providers. Members of the DRAM Coalition
include Landis+Gyr, SchlumbergerSema, eMeter, and DCSI/TW ACS - the latter being the
manufacturer of the Company s proposed PLC technology. The Coalition agreed that the
Company has correctly determined the appropriate technology for its advanced metering system.
DRAM contends that when all of the benefits are considered against correct, appropriate and up-
to-date costs, advanced metering is a prudent and proper investment by Idaho utilities on behalf
of their customers. If the Commission allows the Company to implement an advanced metering
system in the remote areas, DRAM is confident that the Company can achieve a much better
payback than 21 years. DRAM Comments at 12.
DRAM noted that many of the non-billing and customer services capabilities that an
advanced metering system provides are functions that help create a "smart grid.These
functions include an outage management system, meter information collection for long-term
planning and daily operations decision-making, improved distribution system planning and
optimized improvements, load control capabilities to create a full demand response program, and
collection of voltage data to ensure property distribution system operation.
DRAM stated that AMR investment costs should be recovered, subject to cost
verification, as a prudent and appropriate investment in a utility s core infrastructure that will
provide both future and current benefits to the utility and its customers. DRAM believes Idaho
Power is in the best position to make a specific cost recovery recommendation and refrained
from doing so. Based on the number of units expected to be deployed in the first year and the
specific characteristics of that part of the Company s service territory, DRAM thought the cost
indicated in the May 9 2003 AMR Report for the first year may be high. Id. at 8.
DRAM also found the Company s assessment and quantification of advanced
metering benefits in the Report to be insufficient because the Company only included cost
savings from the meter reading function. By comparing a cost for an advanced metering system
that is not "plain vanilla" to the sole benefit that comes with a "plain vanilla " i., basic
automated meter reading, DRAM noted that the 2003 AMR Report may have created an apples
ORDER NO. 29362
to oranges situation. DRAM believes the Commission should review and discuss both the cost
and benefit data with the Company to remedy this situation before making a decision.
With regard to the potential risk of obsolescence, DRAM stated that the key with a
metering system is to choose a technology that provides the immediate functionality desired but
which also allows additional functionality to be employed or added later. It should be a platform
that can accommodate future technology developments and not require complete replacement to
meet future requirements. DRAM could not discern from the Company s Report what increased
functionality is necessary before the Company believes it can begin deployment. Id. at 11.
Accordingly, DRAM recommended the Commission s Order No. 29210 staying
Order No. 29126 be lifted and, as previously directed, the Company should file a four-year
implementation plan for deployment beginning April 2004. Id. at 12. The deployment should be
in several phases with the first phase comprised of the Company s rural and operationally
isolated residential ratepayers.
Staff Comments Staff continues to believe that AMR is an option that should not be
easily dismissed or unnecessarily delayed given the future capacity deficit forecasted by Idaho
Power. Idaho Power s transmission constraints limit the Company s options in meeting peak
demand to either constructing additional peaking generation or reducing peak demand.
Staff concurred with the Company in its selection of power line carrier as the most
appropriate AMR technology, at least in a significant portion of its service territory. Staff
Comments at 7. PLC is well suited for rural mountainous service areas and utilizes facilities
well understood by the Company. Staff noted that a number of investor-owned utilities have
installed AMR systems without any increase in rates and 38% of public cooperatives have
implemented some type of AMR, including Kootenai Electric here in Idaho.Kootenai is
installing the same PLC technology that Idaho Power is considering and expects to see a
reduction in its costs of serving 18 000 customers almost immediately after completing
installation of the AMR system. Id. at 8.
In speaking to other utilities, Staff also found that the business case for AMR was not
usually made on the basis of meter reading cost alone. Although each utility weighed the value
of the various features differently, it was the combined benefit of multiple functions (including
load management) that made AMR's business case work. While these functions stop short of
what is often envisioned with a "smart grid" (controlling customer appliances and even customer
ORDER NO. 29362
generation), AMR technology provides the basis for building smart grid capability. It also offers
a variety of functions including automated meter reading, theft detection, accuracy improvement
improved outage monitoring, flexible billing schedules, account aggregation, improved customer
service, and capability for TaU or critical peak pricing. It is Staffs understanding that the AMR
system Idaho Power evaluated in its analysis also has these capabilities.
Additionally, Staff noted that the federal government allows significant tax benefits
for certain kinds of equipment installed before January 1 , 2005. These benefits include an
accelerated depreciation allowance equal to 50% of the purchase price that can be taken the first
year. This accelerated depreciation allows the Company to write the asset off faster and gain the
tax benefit sooner.
When explaining its recommendation, Staff agreed that, based on savings from meter
reading alone, system wide AMR implementation to all customers is not initially cost-effective.
The Company s analysis assumes that AMR is implemented system wide using a single AMR
technology and that the benefits are limited to savings achieved by eliminating costs associated
with manual meter reading. In that scenario, the AMR system would have a higher revenue
requirement than standard meters for the first 6 years and would not reach a break -even point for
21 years. Consequently, AMR installation would require a $9 million rate increase (or about
5% for a four-year period), essentially reflecting the time required to amortize the old meters.
Id. at 6. When reviewing the Company s analysis, Staff changed a number of assumptions that
when taken together reduced the break-even point from 21 years to 15 years. As projected by the
TOU study, a substantial savings of $12 million annually could also be realized through AMR
critical-peak TOU pricing thereby avoiding the need for new generation resources. Id. at 7.
Staff noted that the Company s updated analysis did not include benefits provided by other AMR
functions.
Therefore, Staff recommended an initial limited roll out of PLC automated meter
reading units in the most cost-effective areas followed by an opportunity for the Company to
evaluate, monitor, and re-assess implementation of the selected AMR technology to the rest of
the system. Staff supported the Company s selection of Emmett, Salmon, Hailey, McCall and
Mountain Home as the most cost-effective areas. Staff recommended that the Company submit a
plan detailing the initial implementation, including: 1) the area to be metered, 2) the technology
and its capability, and 3) the schedule for completing the first phase. The Company s plan
ORDER NO. 29362
should also include details of how the monitoring and assessment would be accomplished, the
time frame for that assessment, and when a decision might be made regarding implementation to
the remaining system. Id. at 9.
Idaho Power Revlv Comments Idaho Power reiterated that AMR cannot be justified
based solely on reduced meter reading costs. The Company recognized that other capabilities
enabled by AMR, such as outage and theft detection, demand response, and load control, have
the potential to provide a benefit to both customers and the Company if they result in improved
systems or processes and reduced costs. However, Idaho Power noted that it currently has
systems or processes in place to address most if not all of the identified operational capabilities.
Reply Comments at 3.
Due to the effectiveness of its current operations, the Company believes minimal
potential exists for AMR to provide operational savings other than in the actual meter reading
function. Because the savings in meter reading O&M costs provided by an AMR system would
account for only about 50% of the total cost of AMR installation, Idaho Power believes
significant benefits from demand response, load management, and time-of-use pricing programs
would be necessary in order to fully support the significant cost of implementing an AMR
system. Id. at 4.
The Company also responded to Staff and DRAM's comments regarding Kootenai
Electric s expected cost savings from installing PLC technology. Through discussions with
Kootenai Electric, it is Idaho Power s understanding that the average overall meter reading cost
for Kootenai is currently 20% higher than Idaho Power s current average cost. In addition
Kootenai was in the third year of a ten-year project to change out its entire existing meter
population due to performance issues when it decided to implement AMR. If the Company
average cost to read a meter were higher and if it were planning to replace its existing meters
with or without the installation of AMR, Idaho Power believes the business case for
implementing AMR on Idaho Power s system would change dramatically. Id. at 4-
The Company acknowledged that other utilities, as suggested by the comments of
Landis+Gyr, have chosen to offer their customers optional enhanced services such as home
monitoring or home security services as a means of recouping their investment in an AMR
system. While these services may have the potential to help justify an investment in AMR, the
Company stated that it has no appetite at this time to diversify into the home monitoring or home
ORDER NO. 29362
security business, nor does it desire to have its customers make a substantial investment in the
hope that it can sell the ability to provide these advanced services to others. Id. at 5-
The Company believes that in time both automated and advanced meter reading may
become the common standard for most utilities. Beginning this September, all new residential
meters Idaho Power purchases will be able to be retrofitted with PLC AMR by inserting a
module into the meter (Idaho Power does not plan to purchase the AMR module at this time). Id.
at 6. Although the initial purchase price of these meters is slightly higher than the price of the
current residential meters, these new meters will not need to be replaced in order to implement
AMR assuming the technology is still compatible.As the Company s current stock of
commercial meters is eliminated and where prices are comparable to current meters, the
Company will begin to purchase commercial meters that could be retrofitted with PLC AMR by
inserting an AMR module. The Company anticipates the installation of AMR-compatib1e meters
for new commercial customer installations could begin as early as late fall. Id. This purchase
strategy will ultimately lower the total cost of implementing AMR in the future.
Based on the Company s analysis of its entire service territory and various operating
areas, it does not appear to be cost-effective from a financial perspective to implement AMR at
this time. Id. at 6-7. The best-case alternative scenario analyzed, and referred to by Staff in its
comments, identified a consolidated area consisting of five separate operating areas. Even under
this best-case scenario, the revenue requirement would be higher than under the existing
condition for the first 9 years following implementation and not until year 28 would a total
payback occur. Id. at 7.
Idaho Power recognized, however, that the Commission may wish the Company to
move forward with AMR implementation for purposes of public policy. Should the Commission
desire Idaho Power to move forward with AMR implementation at this time, the Company
suggested a limited implementation in which various features enabled by AMR technology could
be fully tested and evaluated. If the Commission so desires, the Company suggests an AMR
implementation in the Emmett operating area. Id. Idaho Power believes its geographic location
number of customers, and similarity to the Company as a whole make Emmett a model area for
evaluating the advanced features of an AMR system. Should the Commission direct Idaho
Power to proceed with AMR implementation in the Emmett area, the Company would need
approximately six months lead time for equipment acquisition and at least two months for "plain
ORDER NO. 29362
vanilla" equipment installation. Id. at 8. The Company also suggested that the hourly usage of
each customer in the Emmett area for the summer of 2004 be collected for use as a baseline to
evaluate the impact of any demand response load management or TaU pricing options
subsequently implemented.
Based on the Company s current analysis, the initial cost to implement the "plain
vanilla AMR system capable of capturing and storing hourly usage data in the Emmett
operating area is approximately $1.8 million for the metering, transformer, and station
equipment, and $1.5 million for the software and equipment needed to interface hourly data into
our customer billing system. Id. The Company anticipates $125 000 in meter reading O&M
savings in the first full year after AMR implementation in the Emmett area. Id. at 8-9. The
Company believes an implementation in which enhanced AMR features could be fully tested
would provide useful data in determining whether these features, which will increase the total
cost of the AMR installation, offer enough value to support an economic business case for AMR.
COMMISSION DISCUSSION AND FINDINGS
In Order No. 29196 as modified by Order No. 29226, we stated that AMR should be
implemented as soon as possible and encouraged the Company to work collaboratively with
interested parties to develop an advanced meter implementation plan that will best benefit Idaho
Power ratepayers. In directing the Company to develop the plan, we cited annual savings in
meter reading costs as well as benefits associated with TaU pricing, improved meter reading
accuracy, improved outage monitoring, improved theft detection, increased opportunities for
improved billing, and new service development. Order No. 29196 at 10. In Order No. 29291
we sought comments from the parties regarding whether the Company should be directed to
implement AMR on its system in light of Idaho Power s updated analysis showing AMR is not
financially cost-effective. We also requested comments on how to make the most of the "smart
grid" technology, what AMR features should be employed, under what time frame AMR should
be implemented and on how AMR costs should be recovered. Order No. 29291 at 2-
While Staff did not necessarily agree with the Company s updated AMR analysis, it
concedes the difficulty in justifying AMR based on reduced meter reading costs alone. Staff also
acknowledged concerns regarding the rapid change in AMR technology and the potential risk of
technological obsolescence. Finally, Staff recognized the uncertainties associated with
functional costs and benefits of AMR. Staffs solution to these concerns is a limited phased-
ORDER NO. 29362
implementation of PLC AMR technology in five service areas (Emmett, Salmon, Hailey, McCall
and Mountain Home) and re-evaluation before further implementation. Although their
comments did not specify areas for limited AMR implementation, DRAM also recognized that
metering deployments often occur over a period of years and such an approach makes sense in
this case.DRAM Comments at 4.
The Company stated that AMR does not appear to be financially cost-effective on
either a full or limited implementation basis. However, it does intend to purchase PLC AMR
capable meters for all new residential meters starting in September 2003. The Company also
intends to purchase, if the price is right PLC AMR capable meters for new commercial
customers. Finally, in recognition that the Commission may wish to move forward with AMR
implementation from a policy perspective, the Company suggests using the Emmett operating
area for a trial demonstration.
After careful evaluation of all comments filed in this case, we continue to find that
AMR technology can empower customers to make informed decisions regarding their energy
consumption and should be implemented as soon as possible. DRAM correctly noted that absent
AMR, meter reading costs will be unnecessarily high and customers will still receive only
minimal data about their consumption without the ability to manage their usage according to
time-varying prices. Moreover, Idaho Power will be unable to optimize its operations and
performance without the enhanced data and functionality AMR could provide. In short, the
potential benefits of advanced metering available to ratepayers and the Company are too great to
delay AMR implementation indefinitely. However, we also recognize that significant questions
and uncertainty remain regarding the proper technology, installation costs, functionality and
actual cost savings that may be realistically achieved.
Consequently, we find the phased-in implementation with evaluation approach
proposed by Staff to be reasonable. We also find merit in some attributes of the Company
suggested Emmett AMR implementation such as the proposed implementation timelines
acquisition of baseline data, and evaluation of advanced metering opportunities. To that end, we
wish to continue the collaborative approach established in Order No. 29196 and direct the parties
to develop a specific Phase One Implementation Plan that will achieve AMR installation in
selected service areas by the end of 2004.
ORDER NO. 29362
To guide the parties in developing the Phase One AMR Implementation Plan, the
Commission wishes to make clear that we do not believe AMR implementation in the Emmett
area alone is sufficient to adequately resolve the uncertainties previously identified by the
parties. Weare also concerned that such a small implementation area may make it difficult to
identify statistical abnormalities or emerging consumption trends. On the other hand, we believe
that installation in all five of the areas proposed by Staff is not necessary for the demonstration.
Instead, we suggest a combination of two or three service areas that will incorporate a larger
more diverse customer group and geographic scope.
While we find merit in the overall homogeneity of the Phase One customer group to
the Company service territory as a whole, we are also interested in areas with higher customer
growth.The Company s plan to acquire AMR capable meters for new residential and
commercial customers makes sense and we expect the Company to pursue this strategy
regardless of the Phase One AMR configuration.In addition, we believe that a diverse
geographic area will provide valuable insight into operational cost savings, opportunities for
outage detection, and the testing ofPLC technology with enhanced features.
Other specific aspects of the Company s proposal that should be incorporated in the
first phase of AMR implementation include: installation of critical peak TaU-capable
equipment, collection and evaluation of baseline consumption data, and the identification and
installation of equipment to fully test enhanced AMR features. These enhanced features should
include outage and theft detection, demand response, and load control options. This approach is
consistent with Staff s belief that the limited implementation would allow the Company to test
and integrate PLC technology, evaluate costs and benefits of various functions including TOU
pricing, and develop a business case for full implementation. Thus, Phase One of the AMR
Implementation Plan will be larger and measure significantly more than the PLC technology
tested in the 1998 Idaho City pilot program.
Finally, we are frustrated with what appears to be the shifting position of the
Company with respect to AMR implementation. Although the Company expressed its intent to
seek budget approval for the capital necessary to begin AMR implementation in 2004 in its reply
comments filed January 17, 2003 , Idaho Power now states that AMR is not financially cost-
effective and should not be implemented at this time at any level. Given this change in position
we are concerned about the Company s ability and willingness to efficiently implement Phase
ORDER NO. 29362
One of an AMR program and fairly evaluate the results. Any plan that is ultimately developed
and implemented must provide meaningful information on all aspects of AMR technology
including installation costs, operational savings, and functional benefits in order to shape future
strategies. To the extent the Company makes a sincere effort to efficiently and effectively install
and evaluate this technology, the Commission will allow the Company to fully recover all
reasonably incurred project costs.
In Order No. 29210 issued March 19, 2003 , the Commission stayed a directive
requmng Idaho Power to file an advanced metering implementation plan pending further
proceedings. Having concluded that the Company should implement the first phase of AMR
installation, it is appropriate to lift the stay. Consistent with our findings above, the Commission
modifies the directive in Order No. 29196 to conform to the filing directives in this Order. Idaho
Code g 61-624.
In light of the foregoing discussion and findings, the Commission directs Idaho
Power to collaboratively develop and submit a Phase One AMR Implementation Plan to replace
current residential meters with advanced meters in selected service areas within 60 days of the
service date of this Order. The Commission also directs Idaho Power to complete Phase One
AMR installation by December 31 , 2004 and file an AMR Phase One implementation status
report no later than the end of2005. Upon review of the status report detailing costs and benefits
resulting from this limited AMR installation, the Commission will determine if the benefits of
AMR justify its implementation beyond the areas covered in Phase One.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Idaho Power Company,
an electric utility, and the issues presented in this case pursuant to Title 61 of the Idaho Code
specifically Idaho Code gg 61-302, 61-336, 61-501 , 61-503 and 61-624.
ORDER
IT IS HEREBY ORDERED that Idaho Power Company collaboratively develop and
submit a Phase One AMR Implementation Plan to replace current residential meters with
advanced meters in selected service areas within 60 days of the service date of this Order as
described in detail above.
ORDER NO. 29362
IT IS FURTHER ORDERED that Idaho Power complete Phase One AMR
installation by December 31 , 2004 and file an AMR Phase One implementation status report by
the end of2005.
IT IS FURTHER ORDERED that the stay of Order No. 29196 that required Idaho
Power Company to file an advanced metering implementation plan is lifted and modified by the
filing and content requirements set forth in this Order.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) or in interlocutory Orders previously issued in this Case No. IPC-02-
may petition for reconsideration within twenty-one days of the service date of this Order with
regard to any matter decided in this Order or in interlocutory Orders previously issued in this
Case No. IPC-02-12. Within seven days after any person has petitioned for reconsideration
any other person may cross-petition for reconsideration. See Idaho Code g 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this ;J.."fI'-
day of October 2003.
G1I~
PAUL KJELL ER, PRESIDENT
-Lf ~A~-L
MARSHA H. SMITH, COMMISSIONER
ATTEST:
Commission Secretary
O:IPCE0212 InS
ORDER NO. 29362