20081201Report for 2008.pdf

SCOTT D. SPARKS
Senior Pricing Analyst
RECEIVE
esIDA""PO~
An IDACORP company
December 1, 2008
Ms. Jean D. Jewell
Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, Idaho 83720-0074
Subject: 2008 Irrigation Peak Rewards Program Report
Case No. IPC-E-06-22
Dear Ms. Jewell:
Enclosed are eight (8) copies of Idaho Power Company's Irrigation Peak Rewards
Program Report for 2008. This annual report is in compliance with Order No. 30194. If
you have any questions regarding this filing, please feel free to contact me at 388-2742
or Pete Pengilly at 388-2281.
Sincerely,søf
Scott D. Sparks
cc: Ric Gale
Greg Said
Mike Youngblood
Pete Pengily
P&RS/Legal Files
............................................
--11l~POR"
An IDACQRP company
Irrigation Peak Rewards
Program Report
December 1, 2008
REeE D
2008 DEC -I PH 12: 05
IDAHO PUBLiC
UTILITIES COMMISSION
............................................
Table of Contents
EXECUTIVE SUMMARY .................................................................................................................2
Summary of Results ......................................................................................................................3
Conclusions....................................................................................................................................4
REVIEW OF PARTICIPATION, OPERATIONS, AND LOAD REDUCTION ..................................5
Map 1.
Table 1.
Table 2.
Table 3.
Table 4.
Table 5.
Table 6.
Table 7.
Table8.
Graph 1.
Graph 2.
Graph 3.
Graph 4.
List of Maps
Idaho Power service territory and regions .............................................................. 5
List of Tables
Service points by area ............................................................................................... 6
Interruption option distribution by service point....................................................7
Equipment problem resolution ................................................................................. 8
Realization rates by period........................................................................................9
Enrolled load by area ............................................................................................... 10
Average MW reduction utilizing realization rates by period ................................ 11
Program costs .......................................................................................................... 14
Benefit-cost model input ......................................................................................... 15
List of Graphs
Participant distribution in each area ........................................................................ 6
Average metered demand (kW)...............................................................................12
Average metered demand (kW) 2nd half of June ...................................................12
Demand impact on Company system load ............................................................ 13
2008 Irrigation Peak Rewards Report Page 1
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EXECUTIVE SUMMARY
The Irrigation Peak Rewards Program (the Program) is a voluntary demand
response program available to Idaho Power's agricultural irrigation customers
since 2004. The Program is designed to reduce peak load by turning off
participating irrigation pumps during peak demand hours through the irrigation
season in return for a financial incentive. Through this Program, the Company
has been successful in reducing load during the summer afternoon hours when
overall costs to provide energy are typically higher.
On September 18, 2006, Idaho Power (the Company) filed with the Idaho Public
Utilities Commission (the Commission) a request for authorization to implement
certain changes to the Program to improve participation. The first proposed
change was to increase the demand credits offered to participating customers.
Second, the Company proposed to allow more customers to participate by
decreasing the pump horsepower (hp) limit from 100 hp to 75. On November 30,
2006 the Commission approved the proposed changes through Order No. 30194
and subsequently, the Company implemented the changes during the 2007
irrigation season. The Commission's Order No. 30194 directed the Company to
file a report annually on December 1 for three years. This report provides the
Commission with the 2008 operational results of the Irrigation Peak Rewards
Program, and is filed in compliance with Order No. 30194. The operational
results presented in this document represent a review of the Program's
performance in 2008 on a system-wide basis.
The 2004 Integrated Resource Plan (IRP) set an initial load reduction target for
the Program of 30 MW. The 2006 changes to the Program were estimated to
achieve an additional 4.5 MW load reduction for a total of 34.5 MW at the
generation level, which is adjusted for line losses. At the customer level this
equates to an overall load reduction of 30.5 MW, which removes line losses. The
peak reduction numbers reported throughout the remainder of this document are
for Idaho Power's service territory in Idaho and Oregon and are presented at the
customer leveL.
The Program enrollment for 2008 was 897 service points across five geographic
regions of the Company's Idaho and Oregon service territories. Within these five
regions, there were 3,955 eligible metered service points with at least 100
cumulative hp. Another 949 service points were eligible with pumps ranging from
75-99 cumulative hp, with 75 hp being the minimum amount eligible under the
Program. Approximately 1,340 customers operated the 4,904 eligible service
points
The Program utilizes pre-programmed, electronic, time-activated switches to turn
off pumps of participating irrigation customers during pre-determined intervals in
exchange for a financial incentive. Customers can choose to participate one, two,
or three weekdays per week during the months of June, July, and August. The
2008 Irrigation Peak Rewards Report Page 2
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following are the interruption options (reported in Mountain Standard Time)
available to customers with the corresponding incentive amounts:
. One weekday per week, 4 p.m. to 8 p.m.
. Two weekdays per week, 4 p.m. to 8 p.m.
. Three weekdays per week, 4 p.m. to 8 p.m.
$2.01 per kW Demand
$3.36 per kW Demand
$4.36 per kW Demand
The monthly incentive amount credited to customers was calculated for each
metered service point by multiplying the monthly billing demand for the months of
June, July, and August by the corresponding incentive amount based on the
interruption option selected by the customer.
Throughout 2008, the Company continued to share Program information and
progress with the Energy Efficiency Advisory Group (EEAG) members through
Program updates. Members of EEAG represent a cross-section of customer
interests including residential, industrial, commercial and agriculturaL. In 2008,
EEAG membership also included Company representation, Commission Staff
members (Staff) and a representative from the Idaho Irrigation Pumpers
Association (IIPA).
In the spring of 2008 Idaho Power convened a workshop with the IIPA and Staff
to discuss ideas to improve the Program. The outcome of this workshop resulted
in a proposal that was presented to the EEAG and is currently before the
Commission seeking approval for significant changes to the Program. Among the
proposed changes are increased incentives offered to Program participants. It is
anticipated by the Company that the proposed changes wil provide increased
peak demand reduction through the Program. If the proposal is approved by the
Commission, the results of the proposed changes wil be presented in the 2009
Irrigation Peak Rewards Report to be submitted by December 1, 2009.
Summary of Results
The following items summarize the key results of the Program on a system-wide
basis:
Q In 2008 the Program achieved a maximl.m peak load reduction of 34.5
MW.
Q Two hundred sixty (260) customers, or 19.4% of the 1,340 eligible
customers, chose to participate in the Program.
Q Eight hundred ninety-seven (897), or 18.3%, of the 4,904 eligible metered
service points were enrolled in the Program.
2008 Irrigation Peak Rewards Report Page 3
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Q Of the 897 enrolled service points, seventy-three (73) were pumps with
75-99 hp. All other enrolled pumps were 100 hp or greater.
Q The Program achieved a total billing demand enrollment of 164,733 kW.
Q The Program produces substantial and measurable impacts on peak
demand. The total load reduction from 4-8 p.m. associated with the
Program averaged 27.8 MW in June, 29.6 MW in July, and 21.1 MW in
August.
Q The Program costs as of October 31,2008 were $1,420,307.
Q The Program results show a 30-year average benefit cost (B/C) ratio of
1.09.
Conclusions
Q The Company plans to continue the Program because it is a cost-effective
way to reduce customer demand at the optimal time of day. However, the
company has recently filed with the Commission to add a dispatchable
option to this Program.
Q In 2008, continued participation of eligible service points enrolled in the
Program helped the Company to achieve its 2004 Integrated Resource
Plan (IRP) targets for peak load reduction.
Q The Program achieved a maximum peak load reduction that occurred
during the last two weeks in June of 34.5 MW at the customer leveL. The
average peak reduction in July was 29.6 MW. The Program had a target
load reduction of 30.5 MW at the customer leveL.
2008 Irrigation Peak Rewards Report Page 4
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REVIEW OF PARTICIPATION, OPERATIONS, AND LOAD REDUCTION
1. Participation
Informational letters were mailed in February of 2008 to eligible customers. The
letters were the primary method of marketing the Program. Each customer letter
included a Program explanation, the Program's incentive structure, a listing of the
customer's eligible service points, and a Program application. In addition, follow
up telephone calls were made in March 2008 to all prior Program participants
that had not yet sent in their application. Significant effort, including customer
visits, was made to enroll as many customers as possible.
Map 1 portrays Idaho Power's service territory divided into five regional areas
("region"). The regions are titled Western, Canyon, Capital, Southern, and
Eastern. These regions will be used throughout this report referring to Program
information.
Map 1. Idaho Power service territory and regions.
2008 Irrigation Peak Rewards Report Page 5
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Graph 1 represents the distribution of Program participants by area.
Graph 1. Distribution of Participants.
Program Participation by Area
Western
3%
Eastern
53%Southern
34%
Table1 lists the total number of eligible service points and the participation levels
by area.
Table 1. Service points by area.
ELIGIBLE SERVICE ENROLLED
IDAHO POWER SERVICE POINTS PECENTAGE
REGION POINTS ENROLLED BY AREA
Western 217 26 12.0%
Canyon 340 23 6.8%
Capital 512 64 12.5%
Twin Falls 1,222 134 11.0%
Southern
Mini-Cassia 1,035 171 16.5%
Eastern 1,578 479 30.4%
TOTAL SERVICE 4,904 897 18.3POINTS
2008 Irrigation Peak Rewards Report Page 6
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Table 2 compares how the participating service points were distributed across
the Company's service territory, along with the interruption options for each area.
Table 2. Interruption option distribution by service point.
INTERRUPT INTERRUPT INTERRUPT
OPTION 1 OPTION 2 OPTION 3
IDAHO POWER 1 2 3
REGION DayslWeek Daysleek Daysleek TOTAL
Western 6 6 14 26
Canyon 14 0 9 23
Capital 38 8 18 64
Twin Falls 31 49 54 134
Southern
Mini-Cassia 138 13 20 171
Eastern 255 119 105 479
TOTAL SERVICE POINTS 482 195 220 897
2. Program Opt-out
During the 2008 irrigation season, twelve (12) service points were removed from
Program participation after June 1 due to various unforeseen circumstances by
customers. Under the Program, if a service point is taken out of the Program
after June 1, the participant is assessed a fee of $100. This resulted in a total of
$1,200 which was credited to the Energy Efficiency Rider funding account to
offset the initial Program costs.
3. Interruption Failures
Electronic timers manufactured by Grasslin Controls Corp. (Model GMX-891-0-
24) were used to interrupt power to the customers' pumps during the interruption
period. The timers were installed in the pump motor control circuit to prevent the
pump from running during the interruption period. In order to meet the load
reduction targets of the Program, the Company tries to minimize interruption
failures. However, there were a small number of interruption failures discovered
in 2008. In most cases the failures were corrected quickly with little or no impact
to Program performance.
Most of the electronic timers operated without incident with less than 3% percent
of participants requesting a follow-up visit. The timer issues requiring a follow-up
2008 I rrigation Peak Rewards Report Page 7
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visit are detailed in Table 3. Table 3 lists the types of problems resolved by either
Company personnel or contracted electricians.
Table 3. Known equipment problem resolutions.
ISSUE QUANTITY
Replaced faulty time clock*45
Electrician troubleshooting calls 50
TOTAL 95
*Replaced during re-programming in the spring.
While each of the known timer related problems detailed in Table 3 were
resolved in a timely manner, a review of the Company's load research meter data
revealed that there were some failures that went undetected for the entire
irrigation season. Fifty-four (54) load research meters are distributed among the
897 participating service points in order to study the usage patterns of the
customers and the load impact of the Program. The data showed that the energy
demand that failed to be included in scheduled interruptions increased from 2007
by about 16%. The interruption failures are evident in the load reduction graphs
provided in this report. Upon further investigation, it was found that these failures
were due to various mechanical problems. The Company continues to address
this issue through monitoring of load research data along with an increased
number of site visits for electronic timer inspections.
4. Load Reduction Achieved
The Program load reduction impacts were determined by utilizing information and
conclusions from the impact evaluation conducted in 2004 by Summit Blue
Consulting, LLC. The evaluation utilized load research meter data for both
Program participants and non-participants. This information was used in a
regression analysis to develop a statistical kW load modeL. The model
considered weather conditions, time of day, day of week, and month in
determining realization rates for six 2-week periods during the course of the
irrigation season. The Company has utilized these realization rates since the
2005 season.
The realization rate is defined as the likelihood an irrigation service point is
operating during the interrupt period, and provides a clear picture of Program
impacts. The realization rate can be characterized as simply the percentage of
monthly billng demand that is expected to result in an actual load reduction on
the system during a given interruption period. The realization rate is highest at
the end of June and the beginning of July when most irrigation pumps are
operating nearly 24 hours-a-day, 7 days-a-week. The realization rate is lower
later in the irrigation season when irrigation pumps are turned off due to crop
maturity.
2008 Irrigation Peak Rewards Report Page 8
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Table 4 shows the Program evaluation results from the Summit Blue impact
analysis for each of the six 2-week time periods. The highest realization rate
occurred during the second half of June, with a realization rate of 64%. The
lowest realization rate occurred during the second half of August, with a
realization rate of 32%. The average total realization rate is 50%. These
realization rates were used to calculate the Program load reduction for this year.
The Company verified the realization rates prepared by Summit Blue through
past and current analyses, including analysis of the 2008 load research data.
Based on these analyses, Idaho Power believes the realization rates from the
Summit Blue study continue to be a reliable and accurate means to estimate the
Program's load reduction. Idaho Power does not propose any changes to the
realization rates at this time, but will continue to review the realization rates in the
future.
Table 4. Realization rates by period.
Idaho Power
PERIOD Realization Rate
1 st half of June 41%
2nd half of June 64%
1 st half of July 60%
2nd half of July 53%
1 st half of August 49%
2nd half of August 32%
AVERAGE 50%
The Company attempts to distribute the enrolled kW evenly throughout each
weekday. However, due to service point size variability, enrollment requests by
customers, and enrollment opt-outs, etc., the load cannot be exactly balanced.
The peak billng demand data for the months of June, July, and August 2008
were used to estimate the amount of load enrolled in the Program. The total
billng demand enrolled in the Program was 164,733 kW. Table 5 shows how the
enrolled load was distributed by region.
2008 Irrigation Peak Rewards Report Page 9
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Table 5. Enrolled load by area.
ENROLLED BILLING DEMAND BY REGION (KW*)
IDAHO POWER REGION 1 2 3 TOTALDaysIeekDayslWeekDayslWeek
Western 967 702 977 2,646
Canyon 1,924 0 882 2,806
Capital 16,991 1,193 2,929 21,113
Twin Falls 6,956 8,213 8,615 23,784
Southern
Mini-Cassia 29,476 2,877 3,717 36,070
Eastern 44,555 18,489 15,271 78,315
TOTAL SERVICE POINTS 100,869 31,474 32,390 164,733
*It is important to note that this billing demand level would be achieved only if 100% of the pumps
enrolled in the Program were all running at the scheduled interruption time.
2008 Irrigation Peak Rewards Report Page 10
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Table 6 shows the average MW reduction by day for each two week period
achieved utilizing the realization rates.
Table 6. Average MW reduction utiizing realization rates by period.
Realization
Rate MON TUE WED THUR FRI Averaae
%(MW)(MW)(MW)(MW)(MW). (MW)
1 st half of June 41 20.45 22.60 22.19 22.33 21.78 21.87
2nd half of June 64 31.32 35.15 34.35 34.55 33.71 33.82
1 st half of July 60 29.13 32.90 31.96 32.39 31.20 31.52
2nd half of July 53 25.44 29.06 27.94 28.61 27.27 27.66
1 st half of August 49 23.52 26.87 25.83 26.45 25.22 25.58
2nd half of August 32 15.36 17.55 16.87 17.27 16.47 16.70
As reported earlier, the Company has a sample of 54 load research meters
installed on participating service points. These meters are distributed in a manner
similar to participation rates for each area. This data was collected and analyzed
and is shown in the following graphs.
2008 Irrigation Peak Rewards Report Page 11
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Graph 2 displays the average hourly kW for all days in June, July, and August
and shows the average load reduction per participating metered service point
within the load research sample. The graphed data represents all interrupt days
in 2008.
Graph 2. Average metered demand (kW).
TOTAL LOAD RESEACH DATA FOR 2008
200
175
¡- 150
C
'C 125
Ii
l 100
cil 7550
--~-~rt i -- Average Interrpt Dayl
25 t~
o
o 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Time of Day (Hour)
Graph 3 displays the average hourly kW for all days in the second half of June
and shows the average load reduction per participating metered service point
within the load research sample. The graphed data represents all interrupt days
in the second half of June 2008.
Graph 3. Average metered demand (kW) second half of June.
SECOND HALF OF JLl 20
LOAD RERCH DATA
200
175 ~-. _-.~.." -- -'"-... ..~ ..f¡- 150
..
;- 125
li
~ 100
Gl
r 75c 50
1__ Average Interrupt Day I
25 \..
o
o 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Time of Day (Hour)
Another way to view program impact is to look at total system firm load data. The
system firm load during the summer months has the greatest electrical demand
of the year. The highest peak load historically occurs in late June or July between
4-8 PM.
2008 Irrigation Peak Rewards Report Page 12
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Graph 4 represents demand response impact to the entire Company system firm
load on various days in July 2008. The reduction in system firm load as a result
of the Program occurs at 4 PM for the corresponding days and is approximately
30-40 MW for each day. However, July 3rd includes system load impacts from the
AlC Cool Credit program. The AlC Cool Credit program was initiated at 3:00 pm
on July 3rd. The line representing July 9th also includes impacts from the AlC Cool
Credit program. The AlC Cool Credit program was utilized beginning at 4:00 pm
on July 9th.
Graph 4. Demand response impact on Company system firm load.
Program Il1acts on System Load
3,200
3,100
3,000
¡-2,900e2,BOO'C1I0 2,700-I
E 2,600
ll;:2,500II
2,400
2,300
-~~-/~~-//"/Á///L,~,
~~ ""'-~"" "''-"l\,\.\\\ "\.,
-1-Jul-OB
-3-Jul-OB
--9-Jul-OB
2,200
~ ~ a,~ a,~ a,~ a,~ a,~ a,~ a,~ a,~ a,~ a,~ a,~ a,~ ~
"t;~ ",,~ ,,~~ "ç;r; rfç;r; n¡ç;r; ",ç;r; t,ç;r; ~;?r; ",ç;r; qjç;r; a,ç;r; "t;~ ",,~ ,,~~
Time
2008 Irrigation Peak Rewards Report Page 13
.,...........................................
COST EFFECTIVENESS
1. Program Costs
Table 7 displays the annual Program costs as of October 31, 2008. Program
costs remain consistent on a year to year basis. However, the administration
costs for 2008 include additional time spent on the proposed Program re-design
for 2009.
Table 7. Program costs.
ITEM PROGRAM COSTS
Electronic timers $20,064.20
Contracted electricians $67,318.42
Incentive payments $1,241,494.75
Marketing and $91,479.51Administration
TOTAL $1,420,307.20
2008 Irrigation Peak Rewards Report Page 14
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2. Benefit-Cost Analysis
The 2008 Peak Rewards Program results were applied to the cost-effectiveness
model that was used when the Program was developed. Table 8 summarizes the
inputs that were used in the cost effectiveness modeL. In 2008, the Program
results yielded a 30-year average benefit-cost ratio of 1.09.
Table 8. Benefit-cost model inputs
DESCRIPTION INPUT
Number of metered service points 897
Overall Program realization rate 50%
Average service point, billng kW (peak
month)184
Enrolled peak, kW 164,733
Average July peak reduction (MW)29.6
Participant distribution by area
Western 3%
Canyon 3%
Capital 7%
Southern 34%
Eastern 53%
Service point interruption option
1 day per week 54%
2 days per week 22%
3 days per week 24%
Actual Program Cost (as of Oct. 31,2008)$1,420,307.20
2008 Irrigation Peak Rewards Report Page 15