20050218Decision Memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:DONOVAN E. WALKER
DATE:FEBRUARY 14, 2005
SUBJECT:APPLICATION OF IDAHO POWER TO INSTITUTE TIME-VARIANT
PRICING PILOT PROGRAMS FOR AMR CUSTOMERS - CASE NO.
IPC-05-
On February 2, 2005 , Idaho Power Company filed an Application seeking authority
to institute time-variant pricing programs for customers participating in the Advanced Meter
Reading (AMR) Phase I Implementation Project. The Company requests that its Application be
processed by Modified Procedure. In its Application the Company requests that the proposed
Schedule 4 and Schedule 5 be approved effective March 4, 2005 and remain effective until April
, 2006. However, the Company subsequently agreed and consented to an extension of the
March 4, 2005 effective date and agrees with Commission Staff s proposed procedural schedule
set forth below.
THE APPLICATION
Idaho Power proposes two pilot programs for customers currently participating in the
AMR Phase I Implementation Project in the vicinity of the cities of Emmett and Letha, Idaho
(Emmett Valley). The two proposed programs are: (1) Energy Watch Pilot Program, proposed
Schedule 4; and (2) Time-of-Day Pilot Program, proposed Schedule 5. The Company proposes
that both programs be offered to customers on an optional, voluntary basis.
The Application states that, consistent with its prior commitment to investigate and
file with the Commission time-of-use pricing programs that utilize the capability of the AMR
technology, the Company has designed two new residential pricing programs that utilize the
hourly energy consumption data made possible by the AMR implementation. The goal of the
pilot programs is to provide information to evaluate the impacts and benefits of time-variant
DECISION MEMORANDUM
pricing, to residential customers.Customers participating in the voluntary programs may
experience reduced electric bills, while the Company may experience reduced power cost
expenses by providing energy to customers during less expensive time periods. The Application
also states that the programs will enable the Company to measure customer interest in and
satisfaction with the programs, as well as implement and test electronic data transfer, billing, and
metering systems that are necessary to successfully offer programs which rely on hourly meter
readings.
The Company proposes that cumulative enrollment in the two programs be limited to
300 metered service points, consisting of approximately 150 customers for each pilot program.
Service under the two pilot programs would be available starting June 1 , 2005, and continue
through April 1 , 2006. The Application also proposes that interested customers be required to
notify the Company of their desire to participate by May 15 , 2005 , and that selection for the
programs be on a first-come, first-served basis. Under both programs the energy rates for non-
summer months would be the same as those customers on Schedule 1 service, while the summer
rates would differ for those in the pilot programs.
Energy Watch Pilot Program -Proposed Schedule
Under this program customers would pay a substantially increased flat rate for energy
consumption during a designated Energy Watch Period. Energy Watch Periods will be
determined by the Company. Program participants will be notified of the declared Energy
Watch Period by 4:00 p.m. the day ahead by telephone and, where available, bye-mail. Energy
Watch Periods can occur on any weekday from June 15 through August 15 , and will be for the
hours of 5:00 p.m. to 9:00 p.m. The Company proposes that the Energy Watch Periods will
occur no more than 10 days from June 15 to August 15, for a total of 40 hours.
Current rates under Schedule 1 for residential customers are 5.0863 cents/kWh for
the first 300 kWh and 5.7253 cents/kWh for all kWh over 300 kWh during the summer. The
non-summer rate for Schedule 1 is 5.0863 cents/kWh for all kWh. Under the Energy Watch
Pilot Program the proposed base energy rate for all hours other than the Energy Watch Periods is
0863 cents/kWh. During Energy Watch Periods the proposed base energy rate is
cents/kWh. The over-300 kWh pricing block will be eliminated. Customers participating in the
Energy Watch Pilot Program would continue to pay the monthly service charge of$3.30.
DECISION MEMORANDUM
Time-oj-Day Pilot Program Proposed Schedule
Under this program customers would be given the opportunity to reduce their electric
bills by shifting their summer usage, based upon three different price categories, from "on-peak"
periods, when the cost to provide energy is highest, to the "off-peak" periods, when the cost to
provide energy is the lowest. During the non-summer season, the pricing would be the same as
that under Schedule
The three time-of-day periods for the summer season are defined and priced as
follows:
Time-of-Day Period Definition Energy Rate
On-Peak 1 :00 p.m. to 9:00 p., Monday through Friday 6.4781 ~ per kWh
Mid-Peak 7:00 a.m. to 1 :00 p., Monday through Friday 8090 ~ per kWh
Off-Peak 9:00 p.m. to 7:00 a.m. on all day, and all hours 9725 ~ per kWh
on Saturday, Sunday, and the Fourth of July
The summer and non-summer seasons are defined the same as under Schedule 1 , with the
summer season beginning June 1 and ending August 31. Customers participating in the Time-of-
Day Pilot Program will continue to pay the monthly service charge of $3.30.
STAFF RECOMMENDATION
Staff recommends that this Application be processed by Modified Procedure with
comments due on March 11 , 2005.
COMMISSION DECISION
Does the Commission wish to process this case by Modified Procedure as
recommended by Staff?
Donovan E. Walker
M:IPCEO502 dw
DECISION MEMORANDUM