20041214Comments.pdf

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WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AUTHORITY
TO IMPLEMENT AN IRRIGATION PEAK CLIPPING PROGRAM.
CASE NO. IPC-O4-
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Weldon B. Stutzman, Deputy Attorney General, and in response to the
Notice of Application and Notice of Modified Procedure issued in Order No. 29644 on
November 30 2004, submits the following comments.
BACKGROUND
On November 1 2003, Idaho Power Company filed an Application to implement a Pilot
Irrigation Peak Clipping Program ("Peak Clipping" or "Program ). In February 2004, the
Commission approved the Pilot Program, allowing interruption of electric power to agricultural
irrigation customers in specific areas between the hours of 4 p.m. and 8 p., two or three days
per week during the summer months. The Pilot Program expired on October 1 , 2004. Based on
the success of the Pilot Program, Idaho Power requests authorization to implement the Irrigation
Peak Clipping Program throughout its service territory. The Program would permit the
Company s irrigation customers to voluntarily allow the Company to interrupt power to all
STAFF COMMENTS DECEMBER 14, 2004
specified equipment behind a customer s metered service on a regular basis. In exchange
participating customers would receive a monthly monetary incentive paid on the basis of the
kilowatt reduction as measured by the customer s monthly billing demand; i.e. they receive a
Demand Credit.
The purpose of the proposed Program is to interrupt power to selected irrigation pumps
during peak weekday hours ("Interruption ) in the summer months in order to produce a
decrease in the Company s system summer peak demand. The Company s 2004 Integrated
Resource Plan (IRP) identified the Irrigation Peak Clipping Program as a cost-effective capacity
resource and included the Program in its final diversified resource portfolio. The IRP states that
the Program will provide approximately 30 MW of capacity during the summer peak. The
Company plans to operate the Program during the calendar months of June, July, and August.
The Company will install a timer or timers on the customer s electrical panel(s) in order to
interrupt service to all irrigation pumps at that Metered Service Point. The timers will be
programmed to interrupt electrical service to the irrigation pump(s) on one, two or three
regularly scheduled weekdays per week for a four-hour period between 4 p.m. and 8 p.m. These
are the hours in which the daily summer peak demand normally occurs. Participants will receive
a Demand Credit for each month they successfully participate in the Program.
Discussion
In 2004, the Pilot Program achieved an enrollment of 58 customers, 148 service points
and the total demand reduction associated with the Program averaged 4 345kW from 4 - 8 pm
over the course of the summer. The $313 263 Program had a benefit cost ratio of 1.04.
This Program is fundamentally a load shifting or load shaping program. By reducing
system peak, the Company can avoid purchasing more costly peaking resources. The success of
the Program is, in part, dependent upon irrigators having sufficient capacity in their systems to
interrupt during peak periods and make up for the lost water application during off peak periods.
The Company found that "the Program does not result in a net effect on energy consumption for
participating customers." Therefore, it appears that many irrigators have the operational
flexibility or additional capacity in their system to participate in the Program and materially
reduce peak loads.
Although the Pilot Program was shown to be cost effective and demonstrated irrigator
ability to adapt to interruption, the Company is concerned about Program expansion and methods
STAFF COMMENTS DECEMBER 14 2004
used by irrigators to accommodate interruption. In its Application Idaho Power states the
Company does not wish to create an incentive for irrigators to oversize their systems in order to
better manage a multi-hour load reduction. Over-sizing irrigation systems to compensate for the
reduction of water applied during the load reduction period would result in a higher peak
demand on the irrigator s system during all other periods and would negate the benefits of the
Program.(Emphasis added). Staff does not necessarily share the Company s concern. We
believe that reducing demand during peak periods and increasing demand during all other
periods does not negate the benefit of the Program, it creates the benefit of the Program.
Obviously, it is not the intent of the Program to create higher demand in peak periods. However
Staff believes it is neither practical nor necessary to monitor the reasons irrigators are able to
participate in this load shifting program. Whether they have additional capacity in their system
make changes in their crop or system operation or even accept decreased crop yield, these should
all be decisions left to the irrigator. Staff continues to believe that the important issues in
developing this program are creating program flexibility through multiple interruptions and
optimizing a Demand Credit that is cost effective to the Company and maximizes irrigator
participation.
During the Pilot Program, 40% of the Program interruptions occurred on irrigation
systems owned by customers who selected the option for multiple days of interruption (Options 2
and 3). This large response to the multiple options occurred in spite of the minimal incremental
incentive that was offered for multiple days of interruption. Irrigators being interrupted one day
were paid $ 1. 75/kW; however, they were offered only an additional 13 cents to interrupt a
second day and an additional 12 cents to interrupt a third day. The second and third days are as
valuable to the Company as the first day, and cost very little to acquire because most of the
Program costs are independent of the number of interruptions that are programmed into the
timer. Multiple interruptions greatly increase the capacity and cost effectiveness of the Program
and should be encouraged with a proper incentive.
The amount of the Demand Credit proposed by the Company seems reasonable when
compared with what is being offered by PacifiCorp in its irrigation load control program
however Staff would like to see a more detailed analysis of the Demand Credit calculation in
future reports. Staff believes that the derivation of the credit and other Program reporting should
continue until the Program is well established. Staff recommends that the Company file a report
on this Program no later than December 1 2005. The report should include the number of
STAFF COMMENTS DECEMBER 14 2004
customers, 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 (realization rate). This information should be
provided by geographic region and by interruption option. The report should also provide a
detailed cost breakdown, with a cost effectiveness analysis, an assessment of customer
satisfaction and any recommended changes in the Program. The report should provide sufficient
detail to facilitate a meaningful evaluation of the various interruption options on a monthly basis.
CONCLUSIONS
Staff supports the goal of the Peak Clipping Program, which is to decrease the system
summer peak load. Staff believes the Program is consistent with the objectives of the IRP and
believes that cost effective programs that reduce system peak should be aggressively pursued.
Staff agrees with the Company that the Pilot Program was successful in cost effectively reducing
peak demand. Staff also believes that the Company s proposed changes will improve the
effectiveness of the Program. Staff is pleased that the Company is offering the Program system
wide with the option for multiple interruptions within the week, which were recommendations of
the Staff last year.
The Company also proposes to increase the amount of the Demand Credit and reduce the
horsepower (HP) eligibility requirement from 150 HP to 100 HP. Staff also supports both of
these proposed changes.
While Staff is supportive of the Program and the proposed changes, we believe the
Company should continue to explore the possibility for added Program flexibility along with
further increases in the Demand Credit for multiple interruptions.
RECOMMENDATIONS
Staff recommends that the Commission approve the proposed changes in this
Program for the 2005 irrigation season.
Staff recommends that the Company continue to explore Program options and
increasing the Demand Credit for multiple interruptions in order to increase
Program participation.
STAFF COMMENTS DECEMBER 14, 2004
Staff also recommends that the Company continue to file a report on the results of
the Program by December 1 2005.
Respectfully submitted this
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day of December 2004.
Weldon B. Stutzman
Deputy Attorney General
Technical Staff: Dave Schunke
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STAFF COMMENTS DECEMBER 14, 2004
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 14TH DAY OF DECEMBER 2004
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF IN CASE
NO. IPC-04-, BY MAILING A COpy THEREOF POSTAGE PREPAID, TO THE
FOLLOWING:
MONICA MOEN
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
TIM OTHY TATUM
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
CERTIFICATE OF SERVICE