20041220Notice of Application Order No 29663.pdf

Office of the Secretary
Service Date
December 20, 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AUTHORITY
TO IMPLEMENT A RESIDENTIAL AIR
CONDITIONER CYCLING PROGRAM.
CASE NO. IPC-O4-
NOTICE OF APPLICATION
NOTICE OF MODIFIED
PROCEDURE
ORDER NO. 29663
On November 15 , 2004, Idaho Power Company filed an Application for authority to
implement an expanded residential air conditioner cycling program ("AC Program
Program ). In essence, Idaho Power seeks authority to modify and expand its two-year "pilot"
AC cycling program that expired October 24, 2004. The Company states that it does not believe
that a formal hearing is necessary and requests that its Application be processed under Modified
Procedure. In this Notice the Commission solicits public comments regarding the proposed AC
Program.
BACKGROUND
In March 2003 , the Commission authorized Idaho Power to implement a pilot AC
Program for residential customers in Boise and Meridian. The purpose of the pilot program was
to allow Idaho Power to evaluate the costs and benefits of reducing summer peak loads by
cycling residential air conditioners. Under the optional pilot, Idaho Power experimented with
ways of reducing summer peak load by directly controlling volunteers residential air
conditioners and by controlling intelligent programmable thermostats installed in some
volunteers' homes. Participants were given monthly monetary incentive in exchange for
voluntarily allowing the Company to "cycle" their central air conditioners. Reducing summer
peaking loads would potentially reduce Idaho Power s overall capacity costs and could result in
savings to all customers.
In its present Application, the Company indicates that the results of the pilot program
demonstrated "observable load reductions" during the months of June, July and August. The
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29663
results of the pilot program showed that for days when ambient air temperatures reach at least
degrees, the average load reduction per participating customer was 1.11 kW. Based upon
average daily temperatures since 1950, the Company determined that the Treasure Valley
experienced an average of more than 20 days each summer when the ambient air temperature
reaches at least 95 degrees Fahrenheit. During the pilot program, Idaho Power paid customers
who voluntarily participated $10 per month for the three-month period.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the Company now wishes to permanently
implement a voluntary AC Cycling Program for residential customers who reside in Ada
Canyon County and in the Emmett area. The City of Emmett was included because the
Company has installed advanced meter reading (AMR) capabilities. By including Emmett in the
program, the Company will be able to evaluate economies of scope that may occur by coupling
the AC Program with AMR capabilities. Application at 4. The Program would be a dispatchable
direct load control program to manage capacity, not energy.
YOU ARE FURTHER NOTIFIED that the Company proposes to limit participation
in the Program to residential customers who meet certain criteria including, but not limited to:
energy usage, residential location, size of home, and the presence of fully functional central air
conditioners that are in compliance with the National Electric Code. Customers who are renting
or leasing their homes must provide the Company written proof of expressed permission of the
owner of the central air conditioning system prior to acceptance into the program. Id. at 5.
YOU ARE FURTHER NOTIFIED that the Company proposes to install direct load
control switches which will enable it to cycle participants' central air conditioners. When
conditions are met, the Company will send a signal to its load device to initiate a "cycling
event." As proposed by the Company, a cycling event may be up to four hours per day for any
weekday during the three-month season. A cycling event may occur over a continuous four-hour
period or may be segmented throughout the day at the Company s discretion in order to optimize
available resources. Cycling events may occur up to 40 hours each month and will not exceed a
total of 120 hours during the three-month season. Mass memory meters or end-use meters will
be installed on some participants' residences or air conditioning units for program evaluation
purposes. Id.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29663
YOU ARE FURTHER NOTIFIED that in exchange for allowing the Company to
cycle the central air conditioner, participating residential customers will receive a monthly
monetary incentive of $7.00 per month that will be included as a credit on the customers
monthly bill beginning with their July bill and ending with their September bill. In order to
receive the incentive payment for the initial month, eligible customers must begin participating
in the program no later than the 20th day of the month in order to receive an incentive payment
for that initial month.
YOU ARE FURTHER NOTIFIED that the Company proposes that each participant
will be permitted to temporarily "opt out" of the program for one day each month after providing
Idaho Power with advance notice. There would be no penalty for terminating program
participation at any time.
YOU ARE FURTHER NOTIFIED that the Company anticipates fully implementing
this program within five years. During the first five years of the program, the Company
estimates that annual program costs will average approximately $2.2 million per year. Once
fully implemented, the Company anticipates that the annual program costs will be approximately
$1.5 million per year. The higher initial costs are attributable to the Company purchasing the
direct load control switches and installing these switches and memory meters. Once fully
implemented, the Company anticipates that the annual costs will be apportioned as follows:
administration and promotion - 16%; capital equipment and installation - 30%; and monthly
incentives paid to customers - 54%. Id. at 6. To defray its costs of the program, the Company
intends to use monies collected under its Energy Efficiency Rider (Schedule 91) to finance the
AC Program.
YOU ARE FURTHER NOTIFIED that the proposed AC Program was recently
reviewed by the Company s Energy Efficiency Advisory Group. The Company maintains that
the Advisory Group generally supported implementation of the program.
YOU ARE FURTHER NOTIFIED that the Company asserts that the AC Program
will be cost effective. The Company states that it performed a benefit-cost ratio analysis that
resulted in a benefit-cost ratio of 1.07 by the tenth year of operation and a ratio of 1.42 over a 30-
year period. Based upon these benefit-cost ratios, the Company anticipates that the AC Program
benefits are expected to exceed program costs by the tenth year of operation.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29663
YOU ARE FURTHER NOTIFIED that the Application included a proposed tariff
Schedule 81 which contains the elements of the AC Program.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the
Application and has preliminarily determined that the public interest may not require a hearing to
consider the issues presented in this case. Consequently, the Commission intends to process this
Application under Modified Procedure, IDAPA 31.01.01.201 to 204. The Commission notes
that Modified Procedure and written comments have proven to be an effective means for
obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission no
later than Fridav" Januarv 21" 2005 The comment must contain a statement of reasons
supporting the comment. Persons desiring a hearing must specifically request a hearing in their
written comments. Written comments concerning this application may be mailed to the
Commission and the Applicant at the addresses reflected below:
COMMISSION SECRETARY
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
MONICA MOEN
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: mmoen(fYidahopower.com
Street Address for Express Mail:
472 W WASHINGTON ST
BOISE, ID 83702-5983
TIM OTHY TATUM
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: ttatum(fYidahopower.com
These comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.state.id.. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document. Electronic comments must also be sent to the Applicant at the e-mail addresses listed
above.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29663
YOU ARE FURTHER NOTIFIED that Idaho Power Company may file reply
comments with the Commission no later than Friday" January 28" 2005.
YOU ARE FURTHER NOTIFIED that the Application together with the proposed
tariff Schedule 81 has been filed with the Commission and is available for public inspection
during regular business hours at the Commission offices. The Application may also be reviewed
on line at www.puc.state.id.by clicking on "File Room" and then "Electric Cases.
YOU ARE FURTHER NOTIFIED that the Commission has jurisdiction over this
matter and Idaho Power, an electric utility, pursuant to the authority and power granted under
Title 61 of the Idaho Code and specifically Idaho Code ~ 61-336. The Commission may enter
any final Order consistent with its authority.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAP A 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that persons desiring to submit written comments
regarding this Application must do so no later than January 21 , 2005.
IT IS FURTHER ORDERED that Idaho Power Company may submit reply
comments no later than January 28 2005.
NOTICE OF APPLICATION
N OTI CE OF MODIFIED PROCEDURE
ORDER NO. 29663
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this /7P-
day of December 2004.
ATTEST:
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NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29663
...
Commissioner Smith Out of the Office
MARSHA H. SMITH, COMMISSIONER