20040220Robinette Direct.pdf

Brad M. Purdy
Attorney at Law
Bar No. 3472
2019 N. 17th St.
Boise, ID. 83702
[phone]
FAX: [phone]
bmpurdy~hotmail.com
Attorney for Petitioner
Community Action Partnership
Association ofIdaho and
AARP .
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U I III j It=S cCJr-n"USSION
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
10 IN THE MATTER OF THE APPLICATION OF
11 IDAHO POWER COMPANY FOR AUTHORITY)
TO INCREASE ITS INTERIM AND BASE
12 RATES AND CHARGES FOR ELECTRIC SERVICE
CASE NO. IPC-O3-
COMMUNITY ACTION PARTNERSHIP ASSOCIATION OF IDAHO
DIRECT TESTIMONY OF
KEN ROBINETTE
DIRECT TESTIMONY OF KEN ROBINETTE
Please state your name and business address.
My name is Ken Robinette. I am the Executive Director of the South
Central Community Action Partnership (SCCAP) located at 550 Washington St. So.
Twin Falls, Idaho. SCCAP is a private non-profit organization that provides services to
low-income elderly, disabled and families of the 8 magic valley counties of Idaho.
SCCAP is 1 of 5 community action agencies along with the Idaho Migrant Council and
Canyon County Office on Aging in Idaho that have been working to alleviate the effects
of poverty since 1967. The Executive Directors of these 7 organizations represent the
Board of Director s of the Community Action Partnership of Idaho (CAPAI).
On whose behalf are you testifying?
The Community Action Partnership Association of Idaho (CAPAI) board of
directors asked me to present the views of an expert on , and advocate for, low-income
customers of Idaho Power in this proceeding. Whereas, I am the chairman of the CAP
Energy Committee and have served as the lead for statewide, regional , and national
low-income weatherization policy and program design, my testimony will reflect CAPAI'
view that low- income people are an important part of Idaho Power s customer base,
and that these customers may be uniquely impacted by the proposed rate increase.
What is your relevant experience to this case before the Commission?
As the Executive Director of SCCAP for the past 3 years, I am responsible
for the administration of the federal Community Service Block Grant (CSBG), the Low
Income Home Energy Assistance Program (LiHEAP), and the Department of Energy
Weatherization Assistance Program (WAP) in the local counties of Blaine, Camas
Cassia , Gooding, Jerome, Lincoln, Minidoka, and Twin Falls, Previously I worked as the
Energy Director for SCCAP 's weatherization program for 22 years. I have served on
the State of Idaho s Governor s Weatherization Advisory Council for the past 8 years. In
DIRECT TESTIMONY OF KEN ROBINETTE
1997 I was appointed to the Consumer and Public Purposes Subcommittee of the
Governor s Council on Hydroelectric and River Resources. I am also the chair of the
CAPAI Energy Committee. I currently serve on Idaho Power s Energy Efficiency
Advisory Group (EEAG) as the low-income residential representative. I have also
represented Idaho as a board member for the regional U.S. Department of Energy
Technical Peer Exchange for the past 10 years.
Please summarize your testimony?
My testimony will establish:
1) That the existing program design and funding levels of the Idaho Power Low
Income Weatherization program (LlWA) are inadequate to address the needs of Idaho
Power s low income residential customers
2) Program design an~ funding level recommendations that will meet the need of
these households
3) The testimony will conclude with specific recommendations for the
Commission to adopt.
What are the different types of funding sources and programs for low-
income weatherization that are available in the Idaho Power service area?
There are 3 major funding sources for low-income weatherization that
Community Action Agencies have available in the Idaho Power service territory.
1. The United States Department of Energy Low-Income Weatherization
Assistance Program known as DOE WAP. This funding has been provided to all states
since 1978. The regulations and requirements listed under 10 CFR Part 440 of DOE
are the standards for which the state has adopted as its requirements for the
weatherization programs in the state.
DIRECT TESTIMONY OF KEN ROBINETTE
2. The Low-Income Home Energy Assistance Program (LiHEAP), which is a
block grant from the Federal Department of Health and Human Services and has
funded states since 1980. The State of Idaho Department of Health and Welfare
(IDHW) has jurisdiction over these 2 programs. With LlHEAP , Idaho has the option,
and has chosen to take the maximum of 15 % of this block grant that is primarily
targeted for energy assistance towards home heating of low-income households to go
into the low-income weatherization programs.
3. The Idaho Power Low-Income Weatherization Assistance Program (LlWA).
This program started in April 1989 and is currently designed to "piggyback" and provide
additional leveraging of funds on the above-mentioned federal programs. It is only this
program that the Commission has control over.
What is the history of the current low-income weatherization program
funded by Idaho Power?
In 1989 Idaho Power determined it should participate with the State of
Idaho s Low-income Weatherization Program (WAP) funded by the U.S. Department of
Energy (DOE) and administered by the Idaho Department of Health and Welfare
(lDHW) to provide a full range of eligible energy conservation measures to low-income
families in Idaho Power s service territory. .
Idaho Power proposed to participate in the WAP for a period of 5 years by
providing annual grants of $320 000 to the 8 Idaho non-profit weatherization agencies t
weatherize electrically heated homes. An additional $75 would be paid for
administrative expenses on each home weatherized with Idaho Power grant funds.
Idaho Power also proposed to increase its funding to $500,000 annually after 2 years of
operation if determined by the Idaho Public Utilities Commission (IPUC) after their
DIRECT TESTIMONY OF KEN ROBINETTE
review of the program. Idaho Power estimated that the funding provided would assist
in weatherizing 560 homes per year with approved conservation measures.
In April of 1989, the Community Action Agencies contracted with Idaho Power to
provide weatherization to low-income electrically heated homes in its service territory,
commonly known as the "LlWA contract." This began a partnership that has continued
through 2004 to provide energy conservation to Idaho s low-income residents. In the
first five years, from April 1 , 1989 to December 31 , 1994, Idaho community action
weatherization programs had completed 1785 electrically heated homes (357 homes
pre year) using Idaho Power funding. The total investment from Idaho Power including
administration fees for that same period was $1,440,457. The average annual
investment was $288 091 and provided an average cost of $807 per home that
accounted for an average of 4076 KWH's saved per home. (see Exhibit 806)
Through the14 years of partnership with Idaho Power, the Community Action
Weatherization programs continued to provide cost effective energy conservation.to
eligible households with Idaho Power funds. However, during the journey the Agencies
faced funding cuts from DOE and Idaho Power making it more difficult to provide
service to our growing population of low-income residents. In 1998 IDHW had to
downsize its state weatherization programs from 9 agencies to 6 due to federal funding
19 cuts. IDHW also had to restructure the counties for 2 agencies so continued services
would be provided to all 44 counties of the state.
During that same time the weatherization programs were experiencing barriers in
successfully completing the contracts for Idaho Power and met with IDHW and Idaho
Power officials in October of 1998 to address the issues that agencies were having.
. 24 Those barriers included contracts delivered late to agencies from Idaho Power
agencies not turning in small cost homes, and the fact that the program design did not
DIRECT TESTIMONY OF KEN ROBINETTE
allow for an actual 50% of payment for job completion depending on measures installed.
Also discussed was the administration fee of $75 that was still being applied since1989
and was not meeting the projected administration cost of the agencies at which time
was determined to be $146 per project.
The October 1998 meeting ended with no changes as it was reported that the
contracts for 1999 had already been decided and were being prepared. (see Exhibit
807). In October 1999, the community action agencies met again with Idaho Power staff
to discuss the weatherization needs in Idaho Power s service territory and its current
program design, barriers and program changes that would improve the program
effectiveness. This meeting proved to be effective for some new program design
changes and added clarification of contract language. However, for contract year 2000
CAPAl's agencies experienced our greatest LlWA contract reduction to date. Several
agencies were faced with as much as 50% reduction while others received a slight
increase. This was due to the population shift in the Idaho Power service territory.
In addition to the shift of funding, agencies also had to adhere to new changes in
the contract required by Idaho Power. The majority of the changes were positive. One
change, however, had negative consequences. Under this change, community action
agencies where required to achieve a 1.1 or greater Savings to Investment Ratio (SIR)
instead of the allowed DOE requirement of 1.0 SIR.
In response to our continued request for additional funding, Idaho Power
increased our 2001 contracts by $100 000 for a total of $297 534. In 2002, however,
we once again had our contracts cut by more than 20% and , if not for some added
funding provided to Idaho Power from the Bonneville Power Administration , our
agencies would have seen a 50% cut in our total contract amounts. From 2002 to 2004
DIRECT TESTIMONY OF KEN ROBINETTE
our LlWA contracts have maintained the same level of funding of $247 534, which is still
well below the original $320 000 and far short of the proposed $500 000.
What improvements are needed to make LlWA a more effective program?
Increase the base funding from the current 2004 level of $247 532.
(Idaho only) to $1.2 million. This is the approximate equivalent of weatherizing 440 units
(State average cost per unit of $2730) at full funding (not the 50% match). Even at this
level of funding, it would take 12.5 years to meet the number of low-income households
present todav in the Idaho Power service area that are in need of weatherization.
These numbers represent actual low-income households that received an Energy
Assistance benefit in the contract year 2002/2003 for electrically heated homes (9592
less 4107 homes previously weatherized with Idaho Power funds leaves 5485 still
eligible to be weatherized as of last year). This does not include additional homes being
added to the already lengthy waiting list that the community action agencies now have.
It also does not include homes that are heated with other fuel sources such as natural
gas.
How does LlWA benefit the low-income customers it serves as well as
other Idaho Power ratepayers?
The DOE regularly conducts evaluations of the Weatherization Assistance
Program in order to verify energy savings and maximize service to the low-income
weatherization clients. These evaluations are conducted by DOE', Oak Ridge National
Laboratory (ORNL). The evaluations are critical to establish the efficacy of energy
efficiency measures for establishing cost-benefit ratios for the program as a whole. In
terms of energy savings, weatherization clients save $1.83 for every dollar of
investment. With these kinds of savings to low-income customers it is easy to see that
DIRECT TESTIMONY OF KEN ROBINETTE
the savings from having their residence weatherized can make an impact on their ability
to stay current with their utility bills.
Due to the very nature, low-income households are usually faced with having to
reside in the older housing stock and many times in homes that are sub-standard
because of affordability. The majority of these older homes are the most energy
inefficient housing stock due to the lack of proper insulation throughout the building
envelope, which includes: attic, walls, floors, heating ducts, windows and doors. When
the utility bills start building up and become unmanageable, then too often these
households fall into arrears, which can lead to termination of service.
When low-income households fall off the system because they are unable to pay
their fair share of Idaho Power s distribution cost then all remaining ratepayers are left to
pick up the difference. Therefore, supporting programs such as LlWA helps low-income
customers keep their utility bill affordable by having an energy efficient residence, which
at the same time keeps other ratepayers from paying additional cost for distribution, as
the energy saved in each residence will continue into perpetuity.
In addition to the energy savings from conservation measures installed, there are
also many non-energy benefits of low-income weatherization. In a recent analysis from
ORNL, it was documented that benefits to utility ratepayers, the economy, and the
environment are in addition to the energy benefits that reduce the energy bills of low-
income customers by increasing the energy efficiency of their homes. They concluded
that for every dollar invested , there are non-energy benefits worth $1.88. With an
established $1.83 for every dollar invested for energy savings and when added to the
$1.88 for non-energy related benefits the total return for every dollar invested in low-
income weatherization is $3.71.
DIRECT TESTIMONY OF KEN ROBINETTE
The utility ratepayers benefits include lower bad debt write-offs, reduced carrying
cost on arrearages, fewer late notices and customer calls, fewer shut-offs and
reconnections for delinquency, and reduced collection cost as well as the cost of
administration of payment programs. Lastly, by improving the energy efficiency of low-
income residences it also improves other aspects of the resident's lives such as health
and safety. There are many relatively unique issues and problems that low-income
people face on a daily basis. Low-income status is often correlated with circumstances
such as: low education, unemployment, poor health and language and cultural barriers.
A more energy efficient residence can also lead to greater health benefits, especially to
children and elderly who are most susceptible to the ill effects of the winter cold and
summer heat. Better health for children will result in greater attendance at school , and
for the elderly, improved efficiency can lead to lower medical cost and nursing care.
While we understand that it is not the role of the IPUC to consider and
differentiate between classes of residential customers, however we believe all
consideration should be given towards the overall benefits of providing assistance
through the LlWA program.
Program design and funding level recommendations that will meet the
need of these households
Allow Idaho Community Action Programs that receive DOE funding to
have the flexibility to submit payment request that LlWA funds up to the full cost for
work completed as determined by the EA4 energy audit, which is the approved DOE
computerized energy audit utilized by community action agencies. (see Exhibit 808).
This method allows weatherization agencies to maximize their leveraging of federal and
private funds. CAPAI would like to IPUC to grant our request of 1.2 million annually.
This will assist in weatherizing approximately 440 low-income households annually.
DIRECT TESTIMONY OF KEN ROBINETTE
Increase the administration costto $150 per unit to meet the current fiscal requirements
and auditing standards. Even at this rate of funding it would take over 12.5 years to
reach all the eligible households todav.who use electricity for it's primary heating
source. When compared to the Comprehensive Review of the Northwest Energy
System, sponsored by each of the Governors of the four Northwest State s who asked
each utility to spend 3 percent (14% of that, was to be spent for low-income
weatherization) of their gross operating revenue then Idaho Power s suggested level of
spending according to 2002 revenues of $812 683,191 would be $3,414 028.
VI.RECOMMENDATIONS TO THE COMMISSION
Do you have any recommendations to make to the Commission regarding
proceeding?this
Yes. They are listed below.
. Fund electric low-income weatherization and efficiency retrofits from ratepayer funds
at 1.2 million dollars annually
. Approve the program design recommendations as stated above effective within
three months of the Commission s final Order in this matter.
DOES THAT CONCLUDE YOUR TESTIMONY?
Yes, it does. I thank the Commission for the opportunity to submit this testimony.
DIRECT TESTIMONY OF KEN ROBINETTE