20020426Conservation Groups Comments.pdf

William M.Eddie (ISB#5800)
LAND AND WATER FUND OF THE ROCKIES 26 yP.O.Box 1612
Boise,ID 83701
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Express Mail:
1320 W.Franklin St.
Boise,ID 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )IDAHO POWER COMPANY FOR AN ENERGY COST )FINANCING ORDER AND AUTHORITY TO )CASE NOS.IPC-E-02-2INSTITUTEANENERGYCOSTBONDCHARGE)IPC-E-02-3
IN THE MATTER OF THE APPLICATIONOF )IDAHO POWER COMPANY FOR AUTHORITY TO )IMPLEMENT A POWER COST ADJUSTMENT RATE )
THORUGHMAY 15,2003 )
COMMENTS OF IDAHO RIVERS UNITED,IDAHO RURAL COUNCIL,NW ENERGYCOALITION,AND MARY MCGOWN
Intervenors Idaho Rivers United,et al.,("Conservation Groups")appreciate the
opportunity to provide these comments to the Commission.The Conservation Groups strongly
support the designation of a tariff rider as a funding mechanism for demand-side management
("DSM")programs.However,becauseresearch has not been conducted to accurately determine
the quantity of cost-effective DSM opportunities in Idaho Power's service territory,we believe
that a tariff rider should include flexibilityand monitoring requirements so that ratepayers might
take full advantage of all such opportunitiesas DSM programs progress in coming years.The
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ConservationGroups further support the continued use of an inverted tiered rate structure to send
appropriateprice signals to Idaho Power customers.
DSM Tariff Rider
The ConservationGroups believe that a steady stream of funding for a long-term,
evolvingsuite of DSM programs is strongly in the ratepayers'interests.We agree with the
Commission that "[c]ost-effective DSM resources are generally also least-cost resources and
they are of significant value to the Company,to its shareholders,to its customers and to the
general community."Order No.28992 at 8.Because these cost-effective DSM resources are of
such value,any DSM tariff rider should be structured to best ensure that all cost-effective DSM
resources are exploited for ratepayers'benefit.
Unfortunately,insufficientinformation exists to accurately estimate (1)the total amount
of cost-effective DSM resources available in Idaho Power's service territory,and (2)the cost to
implement those resources.The Conservation Groups believe such an analysis must uÌtimately
form the basis for a reasonable funding level for DSM programs.For this reason,we believe the
Commission should establish a DSM tariffrider that provides adequate funds to support an initial
launch of new DSM programs for Idaho Power,but also preserves flexibilityto increase the level
of DSM fundingbased on full cost-effective DSM resource potential,and ongoing monitoring of
program implementation.
Specifically,the ConservationGroups propose the followingstructure for a DSM tariff
rider and related DSM program elements:
a.The Commission should approve a DSM tariff rider for Idaho Power to
provide funding for an initial suite of DSM programs,as well as in-depth DSM planning
through the Energy EfficiencyAdvisory Group.The Conservation Groups believe that
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Idaho Power's and Commission Staff's proposed DSM funding level of 0.5%of revenues
is too low to fund all cost-effective DSM opportunities.We note that in 2001 the
Commission approved an increased DSM funding level for Avista from 1%to 1.95%of
revenues,including Avista's contributions to the Northwest Energy Efficiency Alliance
(NEEA).Order No.28750.According to Idaho Power's "Compliance Filing"in IPC-E-
01-13 (July31,2001),the Cornpany currentlyspends slightly less than 0.5%of revenues
on existing conservation measures,includingcontributions to NEEA.We believe a DSM
tariff rider for Idaho Power should be set at a level of 1.5%of revenues.
b.The Commission should direct Idaho Power to initiate a comprehensive
study to evaluate cost-effective DSM opportunities in its service territory,which
identifies:(1).cost-effective DSM opportunities in each customer class;(2)estimated
costs to fully implement those opportunities;and (3)opportunities for reductions in peak
loads as well as reductions in total energy consumption.As noted in Idaho Power's
Response to the First Production Request of Conservation Groupe in this matter,there are
several ongoing efforts which will inform an evaluation of cost-effective DSM
opportunities in Idaho Power's service territory.
c.The Commission should approve such DSM tariff rider subject to later
review based on the actual estimated amount of cost-effective DSM potential in Idaho
Power's service territory,and the estimated cost to implement those DSM resources.The
Commission should require IdahoPower to provide regular reporting on DSM program
implementation,costs,customer response,and new DSM opportunities
The Conservation Groups support the continueduse of the Energy Efficiency Advisory
Group,as created in Order No.28894,to assist Idaho Power in planning an evolving suite of
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DSM programs that is responsive to ratepayer needs.The Conservation Groups,through
representation by NW Energy Coalition,intend to play an active role in the Energy Efficiency
Advisory Group.NW Energy Coalition has commissioned an ongoing (and nearly complete)
report on the total potential for implementation of cost-effective DSM resources in the
Northwest,including Idaho.This report will be of immediate benefit to the Energy Efficiency
Advisory Group,and further will be an excellent starting point for a specific evaluation of the
total amount of cost-effective DSM in Idaho Power's service territory.
Tiered Rate Structure
The Conservation Groups support the continued implementation of a tiered rate structure
for residential customers.We recognize that this rate structure has received negative feedback
from some customer sectors,particularlythose utilizing electric space heat.However,we
believe tiered rates were imposed last year withoutsufficient DSM programs in place,which
would give customers a positive means to become more efficient in their energy uses.
Tiered rates send an appropriateprice signal and encourage customers to conserve and
improve efficiency.Such price signals are a critical component to achieving energy savings.
DSM programs,which provide customers with the means to conserve energy,are likely to meet
with better success -and therefore provide more long-term benefits to ratepayers --if customers
have strong incentives to conserve.
We support the Commission's efforts in recent DSM-related orders to target those
customers utilizing electric space heat for increased DSM program attention.'R,e.g.,Order
No.28894.We believe the relativelymodest investments thus far could be boosted through a
I With the increased use of natural gas-fired electric production facilities in the Northwest,and our longrelianceoncoal,customers using electric space heating suffer a series of systemic inefficiencies:heat fromburnednaturalgasandcoalturnsturbines,which produce electricity,which is transmitted over longdistances,and then turned back into heat.
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Iarger suite of DSM programs,and more complete implementation of existing programs,thus
providing more shelter for these customers from the highest block of rates.
In conclusion,the Conservation Groups appreciate the Commission's careful attention to
these DSM and rate structure issues.We request the Commission institute a DSM tariff rider at
a level of 1.5%of revenues,and maintain a tiered rate structure for residential customers.
Dated:April 26,2002 Respectfully sub,mitted,
William M.Eddie
Land and Water Fund of the Rockies
On behalf of:
Idaho Rivers United
Idaho Rural Council
NW Energy Coalition
Mary McGown
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CERTIFICATE OF SERVICE
I hereby certify that on this 26th day April 2002,true and correct copies of theforegoingCOMMENTSweredeliveredtothefollowingpersonsviahanddelivery:
Commission Secretary
Idaho Public Utilities Commission
427 W.Washington St.
Boise,ID 83702-5983
Larry D.Ripley
John R.Gale
Idaho Power Company
P.O.Box 70
Boise,ID 83707-0070
Peter Richardson
Richardson &O'Leary
P.O.Box 1849 6 7
Eagle,ID 83616 ,,
William M.Eddie
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