20070131ICIP comments.pdf

Peter 1. Richardson
Mark R. Thompson
Richardson & O'Leary PLLC
515 N. 27th Street
Boise, Idaho 83702
[phone]
Of attorneys for the Industrial Customers of Idaho Power
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
COMMENTS OF THE
INDUSTRIAL CUSTOMERS
OF IDAHO POWER
IN THE MA TTER OF THE
APPLICATION OF IDAHO POWER
CONW ANY TO INWLEMENT A
DEMAND SIDE MANAGEMENT
INCENTIVE PILOT PROGRAM
CASE NO. IPC-06-
Introduction
In accordance with the Commission s Notice of Modified Procedure and
Comment/Protest Deadline issued in the above-captioned proceeding, the
Industrial Customers of Idaho Power (ICIP) respectfully submit these comments
on Idaho Power Company s application to the Commission, in which the company
requests authority to implement a demand-side management incentive pilot
program ("DSM Incentive Program ). For the reasons set forth below, ICIP
believes the Commission should deny the application.
II.Customers Should Not Be Required to Pay Idaho Power to Induce
it to Undertake Cost-Effective Conservation Activities
From Idaho Power s application, and from meetings with Idaho Power on
this topic, ICIP understands that the amount of money that may be at issue under
the proposed pilot DSM Incentive Program is relatively small. Despite the modest
dollar amount, however, the principle at issue in this proceeding is quite
significant and troubling to ICIP. The clear premise of Idaho Power s proposal is
that the company must be paid more in order to meet or exceed the conservation
goals outlined in its application. ICIP does not believe that customers should be
required to pay over and above their cost-based rates in order for the company to
follow this Commission s direction that it achieve cost-effective conservation.
Although Idaho Power s application for the DSM Incentive Program is in a
separate docket from its application to implement a decoupling pilot program
(Case No. IPC-04-15), the two are related. ICIP agreed to not actively oppose
Idaho Power s seeking of a decoupling mechanism. The purpose of the
decoupling mechanism is to remove disincentives that may be keeping Idaho
Power from achieving conservation that it otherwise would, absent those
disincentives. The DSM Incentive Program would go further by affirmatively
adding financial incentives for Idaho Power to achieve conservation.
Thus, in addition to having disincentives to achieving conservation
removed, the company is asking its customers to provide it with a financial
incentive to achieve increased conservation targets. ICIP believes that if the
company cannot or will not make every effort to achieve cost-effective
conservation without incentive payments from its customers, the Commission
should assign that task to a third-party provider of conservation. Third party
COMMENTS OF ICIP
conservation providers are commonly used toward achieving increased
conservation in regulated utilities' service territories.
III.A DSM Incentive Program Should Not Be Implemented During the
Decoupling Pilot Program
As stated above, although filed in separate dockets, Idaho Power
application in this proceeding and its application to implement a decoupling
mechanism are related. They both seek to create a context in which it is hoped
that Idaho Power will achieve more cost-effective conservation. Additionally,
both programs are proposed to be implemented on a pilot, or temporary basis.
Presumably, at least one reason the programs are proposed to be
implemented on a pilot basis is because the outcomes of the program are unknown
at this time. That is, unintended or unanticipated consequences will undoubtedly
occur under these programs. Additionally, a temporary pilot gives the company,
the Commission, and Idaho Power s customers an opportunity to evaluate the
performance of the programs at the end of the pilot period, given new information
that will be available in the future regarding each programs ' performance.
ICIP urges the Commission not to adopt a pilot DSM Incentive Program
that will run concurrent with the decoupling program. Doing so will combine the
risks that would be associated with each pilot program individually, and may
confound and contaminate the information derived from the decoupling pilot
proposal. In sum, it is difficult to understand how either pilot program could be
COMMENTS OF ICIP
separately and objectively evaluated at the end ofthe pilot period if both have the
same end goal and were tested during the same period.
IV.Conclusion
For all of the reasons above, ICIP respectfully requests that the
Commission deny Idaho Power s application to implement the DSM Incentive
Program proposed in its application.
Respectfully submitted this 31 st day of January, 2007.
(J d-().
Peter J. Richardson
Richardson & O'Leary PLLC
515 N. 27th Street
Boise, Idaho 83702
Of Attorneys for Industrial Customers of Idaho Power
COMMENTS OF ICIP
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 31 st day of January, 2007 , a true and correct
copy of the within and foregoing COMMENTS OF THE INDUSTRIAL
CUSTOMERS OF IDAHO POWER, was Hand Delivered to the following parties:
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 West Washington
Boise, Idaho 83702
i i ewell~puc.state.id. us
( ) U.S. Mail, Postage Prepaid
(X) Hand Delivered
( )
Overnight Mail
( )
Facsimile
( )
Electronic Mail
Barton Kline
Monica Moen
Idaho Power Company
PO Box 70
Boise, Idaho 83707-0070
( ) U.S. Mail, Postage Prepaid
(X) Hand Delivered
( )
Overnight Mail
( )
Facsimile
( )
Electronic Mail
John R. Gale
Vice President Regulatory Affairs
Idaho Power Company
PO Box 70
Boise, Idaho 83707-0070
( ) U.S. Mail, Postage Prepaid
(X) Hand Delivered
( )
Overnight Mail
( )
Facsimile
( )
Electronic Mail
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Nina M. Curtis