20021203Jeffrey Brooks Comments.pdf

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Advanced Energy Strategies, Inc.
Jeffrey C. Brooks [phone]
1027 Cayman Drive
Meridian, ID 83642
200Z DEC -
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UTILITIES COl'Jt'lISSION
BEFORE THE IDAHO PUBLIC UTILITIES.c;aMMiSSION
In the Matter of the Filing by Idaho Power
Company of its 2002 Electric Integrated
Resource Plan (IRP)
Case No, IPC-02-
Recommendation for the Commission to Deny
Acceptance and Acknowledgement of Idaho
Power s 2002 IRP, and Rebuttal of Reply
Comments of Idaho Power Company
After conducting a careful review of Idaho Power Company s Reply Comments the
following rebuttal comments are offered to this Commission to provide alternative perspectives
and a recommendation to deny acknowledgement of Idaho Power Company s 2002 Integrated
Resource Plan (IRP). My comments will parallel the issues as raised in Idaho Power s Reply
Comments so the two documents will track as each issue of contention is discussed.
1. GARNET POWER PURCHASE AGREEMENT
It is encouraging that Idaho Power Company (the Company) wants to move
expeditiously" to pursue "other alternatives" (pg.2 pi) to the Gamet PP A as proposed in the
2002 IRP , and that some of those alternatives may indeed be "less expensive" (pg3 pI).
Simultaneously however, it is discouraging to read Idaho Power s Reply Comments and witness
their continued efforts which strive to misconstrue, misinterpret, and misinform; to apply faulty,
inconsistent and self-serving logic, while placing blame on this Commission (i., the recent
history ofDSM in the late 1990', electric utility deregulation, and Idaho Power s successful
IPUC Applications to discontinue traditional DSM activities-pg4 p3) as an excuse for Idaho
Power s lack of initiative regarding meaningful DSM and energy rates designed to influence
peak energy demands.
2. CONSERVATION
On pages 4 and 5 of their Reply Comments Idaho Power goes to some length describing
the Commission s caution that Idaho Power be realistic about the benefits and costs ofDSM or
conservation. Idaho Power then reiterates a portion of Order No. 22636 and uses the
Commission s words as an excuse for not pursuing conservation, DSM or Load Management
activities. I submit that this is not only a misinterpretation of the Commissions Order but a
somewhat blatant and dismal failure to accurately interpret the Commission s words and respond
appropriately. The Company seizes upon the phrase "estimated future conservation shall not be
considered as a resource" as its excuse for not pursuing DSM. Unfortunately, the Company fails
to read, hear, or understand the next sentence of Order 22636 which they provide in their Reply
Comments; "Utilities are expected to contract only for reasonably confirmable conservation
resources." So, in summary it appears that in Order 22636 the Commission was indeed
cautioning the utilities against undertaking poorly designed conservation expenditures with
undocumented and therefore unreliable results, and very explicitly ordering the utilities to
contract only for reasonably confirmable conservation resources...that can then be
used to defer or replace future planned resources.
It is a mystery how Idaho Power can readily understand the first four sentences of their
reiteration of Order No. 22636, while remaining completely silent about the two following
sentences that provide direct and explicit guidance to proceed by "contracting only for
reasonably reliable conservation resources." Has Idaho Power contracted for reasonably reliable
and verifiable energy savings and peak demand reductions? Where can one of these contracts be
found and how do I, or other customers and energy professionals, get them so we may contract to
provide verifiable conservation resources? How would a third party Energy Services Company
(ESCo) approach Idaho Power Company and/or one oftheir large commerciallindustrial
customers to propose and contract for DSM projects? The answer, of course, is that they
wouldn't or couldn t because Idaho Power has not set up a DSM contracting mechanism to
record and accrue conservation and DSM resources for participation by the general public
despite the Commission s direct order to do so.
Idaho Power also articulates their great fondness for the newly founded Energy
Efficiency Advisory Group (EEAG). On one hand the notion of an EEAG sounds like a
reasonable committee approach. On the other hand I am skeptical that the EEAG process will
provide any substantial DSM resources that might threaten to deliver reasonably reliable DSM or
the specter of lost revenues. My skepticism springs from personal experience with Idaho Power
and observation of the "collaborative" process that the Company proposed in the early years of
their hydro relicensing efforts. This process remained collaborative until those on the committee
disagreed with the Company at which time the collaborative process promptly failed and the
Company stated that it was not compelled to follow the recommendations of the committee.
In its formation of the Energy Efficiency Advisory Group the Company disregarded the
applications of two energy professionals with roughly 20 years experience each,. Yet according
to page 21 of IPUC Order No. 29026 , the EEAG members-whoever they are, and whatever
their credentials, experience, or background-are charged with having an expert understanding
of all facets of the DSM marketplace-to sufficiently design and evaluate DSM: "We believe the
Energy Efficiency Advisory Group will be a valuable resource in recommending and evaluating
potential conservation programs for Idaho Power." I too believe the EEAG could be valuable
but I am again skeptical they will be allowed to do so. It usually takes degreed energy
professionals several years to absorb and understand the intricacies of energy use and appropriate
technology applications. It is doubtful that Idaho Power was able to recruit sufficient expertise
for the EEAG to be successful. It is my view that Idaho Power has embarked upon the EEAG
process as a delay tactic that preys upon the good intentions of both EEAG members and this
Commission at the expense of ratepayers, in order to preserve shareholder profits associated with
the status quo. Idaho Power could not be clearer about their stance on this issue; on page 8 of
their Reply Comments the Company they state
, "
Idaho Power Company does not support using
conservation estimates or targets in the IRP to defer or eliminate planned future resource
acquisitions." They then go on to endorse the EEAG scheme as if a committee composed of
ordinary folks will somehow provide the answers to our region s energy situation that have thus
far eluded the Company.
The Company asks this Commission to blindly and faithfully walk down the primrose
path with them, and believe their most earnest pleadings that they really do want effective DSM
they just have not been able to figure out what to do, but not to worry, the newly formed EEAG
will solve all problems if it is given a chance. Idaho Power has already been given every chance
and they taken every opportunity to do as little as possible to benefit ratepayers while concerning
themselves with shareholder returns and how best to shield profits from regulatory oversight.
3. END-USE RESEARCH
Idaho Power is in error here and perhaps they are playing dumb. Not a single commenter
said the IRP should provide end-use research or studies. Rather, end-use studies and load
research should have been conducted at some point (perhaps in the Conservation Plan or another
report) to provide a basis for evaluating DSM potential within an Integrated Resource Planning
framework alongside other resource options. To say that the term "end-use" is not mentioned in
Idaho PUC Order 22299 and therefore is not required in the IRP is indicative of the Company
desire that no meaningful DSM actions be undertaken that might provide public benefit and
endanger private profits. Anyone with a smattering of common sense can readily understand that
in order for DSM to become a reasonably reliable resource, one first must ascertain the
magnitude and character of the potential that exists so that targets worth pursuit can be
determined, strategies designed, budgets and implementation plans developed and resources
acquired. Ifthe first step---customer load research-is not taken, then the follow-up steps will
not be forthcoming and no demand-side resource will accrue. No, IPUC Order 22299 may not
specifically call for end-use studies, but the term Integrated Resource Plan surely implies that
reasonable prudence will be employed to realistically investigate potential resource options and
the Commission and Idaho Power ratepayers rely upon Idaho Power as a Corporate citizen and
regulated monopoly to carry out its duties in a responsible and knowledgeable manner without
resorting to word games as an excuse for dereliction of responsibilities.
Finally, Idaho Power does confess that end-use studies are not needed because they know
that air conditioners are to blame for the summer peak load condition and the Company "believes
it will be more productive to focus immediate attention and programs on the major loads known
to contribute to the summer peak, air conditioning and irrigation load, where there is the greatest
likelihood to reduce summer peak demand" (pg 9 p3). Okay fine. If Idaho Power knows this
and has known it for some time, why haven t they developed and rolled out some strategy to
address summertime AC load? Is the fact that air-conditioning load makes up the summer peak
load the reason why Idaho Power has embarked upon a Compact Fluorescent Light bulb (CFB)
program? Perhaps an end-use study would have redirected the Company s efforts towards air
conditioning as a solution rather that CFB's-although it is true that the energy savings from
CFB's will not raise the much dreaded specter oflost revenues, nor will they save much energy,
and certainly no on-peak energy, in residential applications. The CFB program just rolled out by
the Company is yet another diversionary tactic, much the same as the Energy Efficiency
Advisory Group, whereby the Company wishes to look proactive on conservation and DSM
while doing little of significance.
For the record please note that I have had compact fluorescent lamps in my home for the
past fifteen years and they can provide significant energy savings in commercial applications
where they replace lamps that have long daily bum hours. Generally, however, CFB's do not
provide an impact on residential energy use because their operating characteristics (slow start
warm up time for full illumination, and color rendition) are not conducive to in-home use and
most homes do not require lighting during the summer on-peak time period.
4. PLANNING CRITERIA
My only comment in this regard is to consider Idaho Power statement on page
paragraph 1 , line 7: "It is easy to criticize the Company for not being prepared for the market
price spikes that occurred in 2000. . ." I suppose is easy to criticize the Company in this regard.
On the one hand IdaCorp was able to get its trading operation out from under regulatory
oversight in time to take full advantage of the price spikes of 2000 so that shareholders and
executives might benefit, but unfortunately the Company could do nothing to help rate payers
during the same time period other than to spend millions for diesel generators to be sited in
residential neighborhoods that never generated a kWh, and simultaneously ask for record
breaking PCA rate adjustments to cover both the cost of purchased power and purchased diesel
generators. Yes, I suppose it is easy to criticize the Company.
ALTERNATIVE RATE STRUCTURES
Time-of-Use rates in residential applications is yet another diversionary tactic of the
Company. It is simply ludicrous to think that the average residential customer will be able to
respond to TOU price signals. Shall people not cook food during on peak periods? Perhaps they
can wait till midnight to do laundry as well. Does Idaho Power have a study that indicates
residential customers are the prime customer segment for application of time-of-use rates?
Typically, only large commercial and industrial customers have the economies of scale
and flexibility in technology adoption necessary to make time-of-use rates useful for effecting
load-shifting techniques. For Idaho Power to boast of their residential TOU study is to simply
waste time, paper, and ratepayer funds. Further, to assert that Case No. IPC-02-12 is the only
proper forum to discuss TOU pricing is tantamount to saying.
. .
we do not want an integrated
resource plan, rather, we want to limit our discussion to only those items that best serve our
fiduciary interests, whether or not they may provide a viable role in developing an integrated
resource plan.
It is interesting to note that in the Company s Reply Comments in section 6. LOAD
FORECASTING on page 14 the Company states: "Electricity demand varies inversely with
electricity prices. . ." yet they maintain that the IRP is not the proper forum to discuss time-of-use
pricing options. Even more telling is the final sentence of section 6: "What has become evident
is the fact that a significant permanent rate increase would slow the rate of sales growth
dramatically." So, if time-of use rates made on-peak energy costs permanently high and also
made off-peak energy costs permanently low, could we not deduce from the Company
statements that we would see a load shift occur in response to TOU price signals? Yes, I
suppose the Company is correct, the IRP is no place to discuss time-of-use rates unless of course
re interested in resource acquisition.
CONCLUSION and RECOMMENDATION
It is apparent that Idaho Power Company is not truly interested in developing an IRP that
best serves the interests of ratepayers. Half truths, misinterpretations, misapplication of
strategies and technologies, failure to do comprehensive base case research, and a desire to limit
discussion of the options available to address our energy situation all smack of a Company that is
less than inspired or committed to acting responsibly on behalf of their captive customers. For
these reasons and others discussed previously, I urge this Commission to reject Idaho Power
2002 Integrated Resource Plan on the grounds that it fails to meet its basic objective of providing
an objective and complete, side-by-side analysis of all resource options facing us in today energy
marketplace, and admonish Idaho Power Company for failing to fully meet their responsibility as
a regulated monopoly, cloaked in the public interest, to act as responsible stewards on behalf of
the rate paying public.