20070406Decision memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DONOVAN E. WALKER
DATE:APRIL 6, 2007
SUBJECT:IDAHO POWER'S APPLICATION TO IMPLEMENT TIME-VARIANT
PRICING PROGRAMS, CASE NO. IPC-07-
On February 2007 Idaho Power Company filed an Application seeking authority
to implement two time-variant energy pricing programs for customers in the Emmett and Letha
Idaho vicinities (Emmett Valley). On March 15, 2007, the Commission issued a Notice of
Application and Modified Procedure establishing a comment deadline of AprilS, 2007. The
only comments received were those of Commission Staff, recommending approval of the
Application.
THE APPLICATION
The two time-variant pricing programs, Energy Watch and Time-of-Day, were
previously approved as pilot programs in March 2005 , and authorized to continue through April
, 2007. See Order No. 30037, Case No. IPC-06-05. The two pilot programs were available
to customers in the Emmett Valley who had AMR metering installed. Under both pilot
programs , the pricing for energy consumption during the months of June, July, and August
included a time-variant component. For all other months, the pricing was identical to that for
standard Residential Service under Schedule 1. The Company states that it wishes to continue
offering these programs to customers in the Emmett Valley, allowing continued evaluation and
refinement of the programs and internal systems required to run them.
The Company states that it filed reports with the Commission detailing the results of
the pilot programs' operation. A report for the first year of operation was filed on March 29
2006 , and a report for the second year of operation was filed on February 28 , 2007. The
Company requests that the Commission take administrative notice of those filings in this
DECISION MEMORANDUM
proceeding. The analysis from those reports shows that: overall, the participants in the pilots
were satisfied with the programs; on average, customers benefited (saved money) by
participating in the programs; on average, the participants reduced household energy demand;
and customer retention in the programs was relatively high. The Company states that based upon
the results of the pilot programs, including the high level of customer satisfaction, that it is
proposing to maintain the same program design and pricing going forward as that implemented
for the pilots during the summer of 2006.
THE PROGRAMS
Under the Energy Watch Program, Schedule 4, 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 m. the day ahead by telephone and, where available, by
email. Energy Watch Periods can occur on any weekday from June 15 through August 15, and
will be for the hours of 5:00 m. to 9:00 m. The Company proposes that the Energy Watch
Periods will occur on no more than 10 days from June 15 to August 15, for a total of 40 hours.
The base energy rate for the Energy Watch Program would be equal to the first block Energy
Charge under Schedule 1 , currently 5.4251~ per kWh. During Energy Watch Periods the
proposed base energy rate is 20 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 $4.00.
Under the Time-Of-Day Program, Schedule 5 , 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 1 , currently 5.4251~ per kWh. 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 , Monday through Friday 3279~ per kWh
Mid-Peak 7:00 m. to 1 :00 p., Monday through Friday 6.l060~ per kWh
Off-Peak 9:00 m. to 7:00 m. on all day, and all hours 5145~ per kWh
on Saturday, Sunday, and the Fourth of July
DECISION MEMORANDUM
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 $4.00.
STAFF RECOMMENDATION
Staff reviewed the Company s Application as well as the Year Two Final Report on
the Pilot Programs in Case No. IPC-06-05. Staff agreed with the Company that additional
questions and issues remain, particularly with the integration of the AMR meter data into the
Company s billing procedures and operations, that could benefit from continued operation of the
pilot programs prior to a more widespread implementation.Staff recommended that the
Commission grant the Company s Application to continue both programs, and that the Company
be directed to file annual progress reports on the programs by the end of January each year.
COMMISSION DECISION
Does the Commission wish to grant the Company s request to implement/continue
the two time-variant energy pricing programs for customers in the Emmett Valley area?
If so, does the Commission wish to direct the Company to file annual progress
reports regarding the programs?
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Donovan E. Walker
DECISION MEMORANDUM