20040402Final Order No 29462.pdf

Office of the Secretary
Service Date
April 2, 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR AUTHORITY
TO IMPLEMENT AN IRRIGATION PEAK CLIPPING PILOT PROGRAM.
CASE NO. IPC-O4-
ORDER NO. 29462
On February 5, 2004, Idaho Power Company (Idaho Power; Company), filed an
Application, pursuant to Commission Rule of Procedure 52, for authority to institute its proposed
Irrigation Peak Clipping Pilot Program ("Pilot Program" or "Program ) and proposed Tariff
Schedule 23. Idaho Power proposed that Tariff Schedule 23 become effective on March 6 2004.
On February 18, 2004, the Commission issued a Notice of Application and Notice of Modified
Procedure and suspended the effective date ofthe proposed Program and Tariff Schedule 23 until
April 5, 2004, or until the Commission issues an Order approving, modifying or rejecting them.
Order No. 29340. On February 27 2004 and March 10 2004, respectively, the Idaho Irrigation
Pumpers Association ("Irrigators ) and the Commission Staff filed written comments. On
March 17, 2004, Idaho Power filed reply comments.
After reviewing the record in this case the Commission grants Idaho Power
Application and approves the implementation of its Program and tariff with the modifications
and reporting requirements detailed below.
THE PROGRAM
Idaho Power s 2002 Integrated Resource Plan ("IRP") identified peak resource
deficiencies facing the Company s system in upcoming years. To help remedy some of these
anticipated shortfalls the Company indicated it would target demand-side measures to acquire
peak-hour demand reductions. In its Application the Company stated its irrigation summer load
is a major portion of its summer peak demand. Idaho Power believes the Irrigation Peak
Clipping Pilot Program could reduce peak-hour demand by attempting to manage capacity
instead of energy.
Idaho Power contends this Pilot Program will provide the Company the means to test
the viability of decreasing its system summer peak with the use of electronic timer switches
Timer ) to turn off power to selected irrigation equipment during peak weekday hours.
ORDER NO. 29462
Through the Pilot Program the Company states it will also gain operating/managing experience
in running the Program. The Company also contends the Pilot Program will allow it to assess
customer participation, volunteerism, satisfaction and retention as well as to monitor any
unintended consequences from operation of the Program.
The Company stated that to participate in the Program a customer must have a
Metered Service Point or Points that take electric service from Idaho Power under Tariff
Schedule 24 and serve a water pumping or delivery system used to irrigate agricultural crops or
pasturage. In addition, each metered service point a customer wishes to enroll in Idaho Power
Program must provide electric service to irrigation pumps with at least 150 cumulative
horsepower. After determining that a customer s Metered Service Point or Points meet this
criteria the Company will target those irrigators who can commit to turning off power behind
Metered Service Points for four hours per week during the calendar months of June, July and
August 2004. Idaho Power determined that four hours of power interruption per week was
reasonable based on input from various customers and taking into consideration the hot, dry
climate of the Company s service territory. The Company represented this interruption period
would not necessitate a change in the type of crop planted, altering the crop yield, or require a
redesign of irrigation systems.
The Company will require customers who are selected to participate in the Program
to enter into a Uniform Irrigation Peak Clipping Service Application Agreement ("Agreement"
with the Company. By entering into the Agreement, the customer would agree, with prior
notice, to grant the Company or its representative permission to enter the customer s property to
install a Timer or Timers on the electrical panel servicing the irrigation equipment that is
associated with the Metered Service Point enrolled in the Program. Idaho Power also states the
customer must also allow the Company or its representative reasonable access to the Timer
following its installation.
Idaho Power stated it will enroll not more than 200 Metered Service Points for the
Pilot ! The Company s goal is to enroll the customers with these point or points and install all
Timers by June 1 2004. The Company may enroll customers in the Program after June 1 2004
I Initially, it was unclear whether Idaho Power intended to accept 200 customers or 200 metered service points into
the Program. The Company s Reply Comments clarified that it intended to accept not more than 200 metered
service points into the Program.
ORDER NO. 29462
to achieve desired participation levels, but no later than July 1 , 2004. The Company will make
this Program available to up to 50 Metered Service Points in each of four areas in the Company
service territory. These are the KunalMelba/Nampa area, the Mountain Home/BruneauiGrand
View area, the Rupert/Paul area and the American Falls area of Idaho Power s service territory.
The Company contends it may choose to accept metered points for participation based on
demand, location, and size ofpump(s) or other factors aimed at creating a diverse participation in
the Program. Idaho Power also states it may choose to solicit participants to fill any vacancies
caused by attrition in order to maintain participation objectives. Finally, Idaho Power stated that
if its Program were approved as filed it would retain the sole right to select and reject the
participants for the Program.
To effectuate the Program the Company will install a Timer or Timers, at its own
expense, on the customer s electrical panel(s) that services one or more irrigation pumps. Idaho
Power will program the Timers to interrupt electrical service to the irrigation pump(s) on one
regularly scheduled weekday per week for a four-hour period between 4 p.m. and 8 p.m. The
Company stated approximately one-fifth of the total load reduction capacity enrolled in the
Program would be scheduled for turn off each weekday during the months of June, July and
August of the 2004 irrigation season. The Company stated it retains the sole right to select the
load reduction weekday for each Metered Service Point or Point(s) accepted for participation in
the Program. The Company stated it will also install mass memory meters on a sample of the
participants ' Metered Service Points for Program monitoring and evaluation purposes. The
Company proposes that it have the sole discretion to choose these Points selected for monitoring
and evaluation.
In exchange for allowing the scheduled interruption, participating customers would
receive a monthly, monetary incentive ("Load Control Service Credit" or "Credit") paid on the
basis of the number of kilowatts of load reduction, as measured by the Billing Demand, at the
customer s Metered Service Point2 The Credit will be calculated by multiplying $1.75 by the
Billing Demand for the Metered Service Point that is enrolled in the Program. The Credit will be
included on the customer s monthly bill for the months of June, July and August only.
2 The Company stated in its Application that because of the water requirements of the crops grown in southern
Idaho, it fully expects that, in almost all situations, the energy consumption curtailed during the four-hour period of
interruption will be consumed either prior to or following the interruption resulting in no overall energy
consumption reduction.
ORDER NO. 29462
Idaho Power stated the Program is an optional, supplemental service that will be
piloted during the 2004 irrigation season and will expire on October 1 , 2004, unless extended by
the Company.
The Company indicated that the Energy Efficiency Advisory Group ("EEAG") has
concurred with Idaho Power s proposal to use Energy Efficiency Rider funds, collected under
Idaho Power Schedule 91 , to finance the Program. The costs of the Program will be
approximately $294 750 for one-year.
Idaho Power stated that it would include the results of the Program in the annual
report to the Commission detailing the EEAG activities. The Company said this report will
include its response to EEAG recommendations, the associated program costs, the DSM
accounting numbers and customer response data.
COMMENTS
1. Staff Comments
Staff supported Idaho Power s stated purpose for the Program and believed it is
consistent with the objectives of its IRP and the Commission s recent Order concerning Idaho
Power s Bennett Mountain Plant. See Order No. 29410 at p. 10. However, Staff stated it was
not clear why a pilot is necessary to achieve the goals of reducing summer system peak
deficiencies. Staff pointed out that a similar program, PacifiCorp s Irrigation Load Control
Credit Rider Program - Schedule 72 (PAC-03-3 and PAC-03-14), was implemented in the
summer of 2003 and was available to all irrigation customers the first year it was offered. That
program has been well received and considered a success by PacifiCorp, the Commission and
most customers. Staff also stated it is not clear why participation should be limited in order to
assess customer participation, volunteerism, satisfaction, retention or to monitor any unintended
consequences from the Program. Staff contended these and other issues could be evaluated more
thoroughly in a larger, voluntary program. Accordingly, Staff believes the Program should be
made available to the maximum number of irrigators possible this year and to all irrigation
customers for the 2005 irrigation season.
Staff believed the amount and frequency of interruption is also an appropriate issue to
be evaluated in the Program. Staff contended it is premature to limit the irrigator s options to a
single four-hour interruption because there are too many variables, including type of crop, soil
type, climate and irrigation system design to have a one size fits all approach. Thus, Staff
ORDER NO. 29462
recommended that the Company offer irrigators different interruption options. Staff believed
this could be done with little or no added cost.
Staff believed the incentive/credit amount Idaho Power proposes to pay irrigators for
interruptions in service is reasonable.
If the Commission approves the implementation of the Program, Staff recommended
that Idaho Power file a report with the Commission on the operation of the Pilot Program and its
results no later than December 1, 2004. In general, Staff contended the report should provide
sufficient detail to facilitate a meaningful evaluation of the Program. Staff asserted the report
should include the number of customers and the number of sites participating, amount of load
under control, amount of load reduction achieved, the number of times and the amount of load
that failed to be interrupted when scheduled and the reason for the failure. The report should
also provide a detailed cost breakdown, with a cost effective analysis, an assessment of customer
satisfaction and any recommended changes in the Program.
2. Irrigators ' Comments
The Irrigators supported the stated goal of Idaho Power s Program and stated they
looked forward to the opportunity to review and evaluate its operation. The Irrigators also
expect that the Program could be modified after the 2004 season as may be appropriate and
instituted as a permanent tool designed to be cost effective to the Company and also priced
appropriately to create an incentive for participation by irrigation customers. The Irrigators also
urged the Commission to promptly approve and implement the Program and Tariff Schedule 23.
3. Idaho Power Reply Comments
First, Idaho Power stated it only intends to accept up to 200 Metered Service Points
into the Program instead of200 customers as stated in the Company s Application and proposed
tariff. The Company stated it would submit a corrected Tariff Schedule 23 to reflect this.
Second, the Company stated it is offering this Program as a pilot because it is prudent
to do so in order to gain experience in operating and managing a new program as well as testing
new equipment and technology that may be used in a fully developed program. The Company
stated that using this method generally translates into higher customer satisfaction, enhanced
customer participation and an increase in peak load reduction.
Third, although Staff recommended expanding the number of hours of interruption
the Company contends through the pilot program it will still be able to assess the efficacy of this
ORDER NO. 29462
issue and many others. The Company stated it would survey participants to determine their
satisfaction with the Program and to judge whether an increase in hours of load reduction would
be possible. The Company also stated it would survey some non-participating irrigation
customers to determine if the number of hours of load reduction in the Program was a factor in
their decision not to participate.
Fourth, despite Staffs recommendation that the Company allow irrigation customers
the option of providing multiple interruptions within a week, Idaho Power believes that giving
the option of only one interruption per week will allow most irrigators an opportunity to
participate in the Program without reducing crop production or encouraging the modification of
their irrigation systems. However, should the Commission determine the Company should
increase the amount of load interruptions per Metered Service Point per week Idaho Power
recommended offering Program participants the following three options:
(a) Four hours one day per week at $1.75 per kW of Billing Demand;
(b) Four hours two days per week at $1.88 per kW of Billing Demand; or
(c) Four hours three days per week at $2.00 per kW of Billing Demand.
Fifth, the Company stated that the decision to develop any direct load control
program should be made through the IRP process. The Company contended that if the 2004 IRP
analysis shows this Program is a cost effective resource and ifthe results of the Program indicate
it is a viable demand response program, the Company suggested the appropriate process for
determining its scope beyond 2004 should be through the EEAG.
Finally, the Company stated that it would be able to file a report regarding the
operation and results of the Program with the Commission, as requested by Staff, by December
, 2004.
COMMISSION DECISION
Idaho Power Company is an electric corporation subject to the Commission
regulation under Title 61 of the Idaho Public Utilities Law.Idaho Code 9 61-101 et seq.
Public Utilities Laws ). In addition, the Commission has jurisdiction over this matter because
the method under which Idaho Power presently provides electric service would change for those
irrigation customers who might participate in the Program under Tariff Schedule 23. See Idaho
Code 99 61-302, 61-303 and 61-307.
ORDER NO. 29462
Conservation and demand-side management (DSM) programs are powerful tools
Idahoans can use to manage their energy consumption and mitigate the impact of potential rate
increases. In recognition of this, the Commission directed Idaho Power to file a comprehensive
conservation and DSM program in 2001. Order No. 28722 at 21.The Commission also
directed Idaho Power to form the EEAG to recommend DSM measures, enhance existing DSM
programs, prioritize implementation of appropriate programs and evaluate each program
effectiveness. Order No. 28894 at 7. The Commission believes this Application and Program
are submitted as part of the Company s efforts to develop DSM and conservation programs in
consultation with the EEAG and in compliance with our directives.
The Commission has reviewed and considered Idaho Power s Application and the
analyses and recommendations made by Staff and the Company in their written comments.
Based on this record we agree with the parties that Idaho Power s proposed Pilot Program is a
resource which could help address the Company s concerns that its existing resources are likely
insufficient to meet expected peak energy requirements on its system in 2004 and going forward.
See generally Order No. 29189, (Case No. IPC-02-8). In addition, the Commission finds that
if the Program is successful it could decrease Idaho Power s overall energy costs which would in
turn result in a potential savings to all of the Company s customers. Thus, the Commission finds
that it is in the public interest to approve the operation of this Program for the 2004 irrigation
season.
Although the Commission has some evidence that programs of this type are effective
we find that in this case allowing Idaho Power to operate this Program as a pilot during the 2004
irrigation season is the reasonable course to take. This pilot will provide the Company, its
customers and the Commission with valuable information about the efficacy of using this type of
Program and technology to address the deficiencies facing Idaho Power s system because of
summer peak demand. By operating the Pilot Program, the Commission also finds the Company
will gain experience in operating and managing a Program of this type. Through this experience
the Company and interested parties can further the development and implementation of this
Program more fully if it proves to be a good resource. The Commission also finds that using this
3 Order No. 28722 required the Company to file a "comprehensive DSM program by August 1 , 2001 that details
program structure, potential conservation measures to pursue and funding options that include a tariffrider." Order
No. 28722 at 21.
ORDER NO. 29462
method to evaluate the Program may in turn lead to higher customer satisfaction, participation
and a greater peak load reduction if it is ultimately implemented more broadly. Accordingly, the
Commission finds that it is reasonable to allow Idaho Power to operate this Program as a pilot
during the 2004 irrigation season.
The Commission also finds that the Company s proposal to enroll not more than 200
Metered Service Points in its Program for the 2004 irrigation season is reasonable. In addition
the Commission finds merit in Idaho Power s plan to equally divide the 200 Metered Service
Points between four of the Company s service territories: the Kuna/Melba/Nampa area; the
Mountain Home/BruneauiGrand View area; the Rupert/Paul area; and the American Falls area.
Allowing the Company to select participants at its sole discretion from each of these areas along
with choosing Metered Service Points based on demand, location, size of pump(s) or other
factors will provide Idaho Power with the flexibility to choose a suitable pool of participants for
this Pilot Program.
The Commission also finds the Company s proposed eligibility requirements to
participate in the Program to be practical and reasonable. Thus, only those irrigation customers
who take service under Schedule 24 for their Metered Service Point or Points that serve a water
pumping or delivery system used to irrigate agricultural crops or pasturage are eligible to be
enrolled in the Program. In addition, the Commission finds that a Metered Service Point must
provide electric service to irrigation pumps with at least 150 cumulative horsepower to be
eligible to be selected to participate in the Pilot Program. Furthermore, the Commission finds
reasonable Idaho Power s requirement that each customer selected to participate enter into the
Uniform Irrigation Peak Clipping Service Application Agreement. Finally, the Commission
finds that Idaho Power s proposal to not enroll participants any later than July 2004 to be
logical and reasonable.
Based upon the Company s representations the Commission finds a four hour
interruption of power to Metered Service Points of participating customers during the weekdays
between 4:00 p.m. to 8:00 p.m. for June, July and August 2004 is reasonable for purposes of this
Pilot Program. The Commission believes the four-hour interruption period will provide
4 Because the irrigation season for Idaho Power s Schedule 24 customers begins early in the year, the Commission
encourages the Company to file its requests to implement DSM programs involving irrigation customers adequately
in advance of the start of the season.
ORDER NO. 29462
sufficient data to evaluate whether this period of time should remain the same or be modified in
the future.
Based on the comments of Staff and Idaho Power s reply comments the Commission
directs Idaho Power to provide participants the option of electing to have service to their Metered
Service Points interrupted more than once per week. Accordingly, Idaho Power shall provide the
customers whose Metered Service Points are selected to participate the following three options
for participation:
(a) Four hours one day per week at $1.75 per kW of Billing Demand;
(b) Four hours two days per week at $1.88 per kW of Billing Demand; or
(c) Four hours three days per week at $2.00 per kW of Billing Demand.
Idaho Power is directed to amend its Tariff Schedule 23 to reflect these options. Under these
three options Idaho Power would still retain the sole right to select the day or days per week each
participant's service will be interrupted.
Finally, Idaho Power is ordered to file a report with the Commission on or before
December 1, 2004 regarding this Program. The report should include the number of customers
participating, the number of metered service points participating, the amount of load under
control, the amount of load reduction achieved, the number of times and the amount of load that
failed to be interrupted when scheduled and the reason for the failure. The Commission also
finds that the report shall provide a detailed cost breakdown, a cost-effective analysis, an
assessment of customer satisfaction and any recommended changes that should be made to the
Program should it be offered to customers in the future. The Commission also expects that this
report will contain sufficient information to determine whether the costs of this Program were
reasonably and prudently incurred and to allow for a meaningful evaluation of the Program.
ORDER
IT IS HEREBY ORDERED that Idaho Power Company s Application seeking
authority to institute the Irrigation Peak Clipping Pilot Program is granted. In addition, the
Company s request to implement the associated Tariff Schedule 23 is granted.
IT IS FURTHER ORDERED that Idaho Power shall modify its Program and tariff to
include the three interruption options described above.
ORDER NO. 29462
IT IS FURTHER ORDERED that within the eligibility requirements for the
Program, the Company is given the discretion to select the participants for the Program and on
what days during the week their power to their Metered Service Point or Points and irrigation
pumps shall be interrupted.
IT IS FURTHER ORDERED that Idaho Power shall file a report on this Program
including the information discussed above on or before December 1, 2004.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 9 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ~,.."J.
day of April 2004.
PAUL KJELLANDER, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
~ ~
~~~NER
ATTEST:
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ORDER NO. 29462