20070517Comments.pdf

DONALD L. HOWELL, II
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3366
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT
APPLICATION OF COMMUNITY ACTION
PARTNERSHIP ASSOCIATION OF IDAHO,
INC. AND IDAHO POWER COMPANY FOR
AUTHORITY TO CONTINUE THE PRESENT
FUNDING LEVEL FOR WEATHERIZATION
ASSIST ANCE AS AUTHORIZED BY ORDER
NO. 29505
CASE NO. IPC-07-
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of Record
Donald L. Howell, II, Deputy Attorney General, submits the following comments in response to
Order No. 30310 issued on April 26, 2007.
BACKGROUND
On April 9, 2007, Idaho Power and the Community Action Partnership Association of Idaho
(CAP AI) filed a Joint Application seeking Commission authorization for Idaho Power to continue
its Weatherization Assistance Program previously authorized in the Company s 2004 rate case.
Order No. 29505. CAP AI represents the Community Action agencies that administer
weatherization programs for electric utilities in Idaho. In the rate case Order, the Commission set
Idaho Power s weatherization funding level at $1.2 million and required CAP AI to file an
STAFF COMMENTS MAY 17 2007
application with the Commission if it desired to extend the funding beyond June 1 , 2007. Order No.
29505 at 33.
1. The 2004 Rate Case Order.
The Commission directed Idaho Power to book the weatherization funds "in a separate
balancing sub-account" and "(a)ny unpaid funds shall carryover and be available next year." Order
No. 29505 at 32. The payment to the Community Action Partnership (CAP) agencies for
administrative costs was to increase, with a suggestion of$125 per home as appropriate. The
Commission also directed the Company to seek the advice of its Energy Efficiency Advisory Group
(EEAG) and negotiate with the CAP agencies about several unresolved issues. The Company was
required to file a report with the Commission providing the details of the negotiation process and
explanations of the low income weatherization assistance (LIW A) program changes. The Order
directed Idaho Power to file an annual report of progress and activities in the LIW A program for
each year and a three-year review ofthe program in early 2007.
2. Structural Changes to the Program.
The Company successfully completed negotiations with the CAP agencies on changes to the
LIW A program and submitted a report describing the changes on October 1 , 2004. The structural
changes to the program included:(1) the funding of all DOE allowed conservation measures, provided the Saving to
Investment Ratio (SIR) for each measure and the entire project (excluding
administrative fees) is 1.0 or greater;
the cap on the cost of health and safety measures installed to protect the
effectiveness of the weatherization measures was raised from 10% to 15% of the
annual cost of the total project;
each project to include a minimum DOE contribution of 15% of the cost, and the
annual average LIW A contribution limited to no more than $2000 per project.
Previously, the Company only paid 50% of job costs requiring that the remaining
costs be covered by other funding sources;
the cost cap per project was to be updated annually, and
CAP agencies to be paid administrative fees equal to 10% of the cost of each
project, rather than the previous flat rate of $75 per job.
(2)
(3)
(4)
(5)
In addition to these changes above, the contracts with each agency were to include
provisions for carry-over of unused allocations of funds from year to year, up until June 2007.
STAFF COMMENTS MAY 17 2007
Finally, a portion of the funding made available to each agency was to be made available to the
weatherization of buildings occupied by non-profit agencies.
3. Program Results.
Contracts with the CAP agencies with the additional funding and revised program details
were effective on August 1 , 2004. A total of 290 homes were weatherized in 2004, increasing to
565 in 2005. There were 4 non-profit agency buildings weatherized in 2004 and 5 in 2005. Total
expenditures in 2004 were $495 665, with slightly more than $300 000 carried over to 2005.
Expenditures in 2005 increased to nearly $1.3 million, reducing the amount carried over to just over
$215 000. The projects completed in 2004-2005 were estimated to save over 3 million kWh.
The total number of homes weatherized in 2006 was 538, with 2 non-profit buildings. Total
cost for conservation measures was $1 221 865 , and $122 186 paid for CAP administration. Total
savings from the buildings weatherized in 2006 was estimated to be nearly 3 million kWh.
Further modifications to the program were again mutually agreed upon in 2005, and the
average total project cost was changed to align with the limits included in the State ofIdaho
Weatherization Program. For the first nine months of2006, the cap per residential project was
304, but the cap was raised to $2 826. For the first nine months, the actual average project cost
was $2 193. For projects completed after the cap was raised, the average project cost was $2 278
for a total year average of $2 205. The average CAP agency administrative payment was
$220/proj ect.
In 2006, Idaho Power also implemented a new database for storing program information that
allowed evaluation of savings and costs by measure, as well as per job and for the total program.
Total estimated savings from the program is more than 6 million kWh. The average Saving to
Investment Ratio per home, including the cost of health and safety measures, is approximately 2.
with a median value also over 2.0. When the Company s internal administrative costs are included
the Company reports a levelized cost value ofless than $0.037/kWh on a utility cost basis.
STAFF ANALYSIS
Staff believes that Idaho Power has successfully implemented the program changes
identified in Commission Order No. 29505. Both the Company and the CAP agencies were diligent
in their negotiation of the disputed items referred for negotiation. Staff believes the resolution of
these issues to be consistent with the directions expressed by the Commission in Order No. 29505
STAFF COMMENTS MAY 17 2007
and commends the Company and the CAP agencies for their efforts in resolving these issues. Staff
finds the continued modification of the average per project cap to be evidence of the willingness of
both parties to continue to work together to resolve issues and improve program operation.
Not unexpectedly, the Company and the CAP agencies experienced some difficulty in
ramping up to the increased program activity levels, and the carryover of unused funds was
designed to address that issue. Staff finds the reduction in the amount of funds carried over from
year-to-year to be a reasonable and in compliance with the program levels envisioned in Order No.
29505. Although the parties asked to continue the program at a fixed level, Staff believes the same
procedures for booking program expenditures and carryover of funds is still appropriate. Because
the $1.2 million for program costs is specifically built into current rates and is not funded through
the Company s conservation tariff rider, it is important to be able to track these expenditures
separately. Some variation in annual program activity is to be expected, and allowing for carryover
helps ensure that the amount the Company receives from ratepayers specifically for this program
actually gets spent on the program.
Staff finds the Company s analysis of savings and levelized costs to be reasonable. We note
that the levelized cost identified by the Company is well within the range considered by Staff to be
appropriate for demand side programs. Staff also notes that the Company has continued to consult
with the EEAG on the operation and direction of the program, seeking guidance on issues as
appropriate.
The Company s latest Integrated Resource Plan (IRP) includes a significant contribution
from conservation resources, and will require aggressive efforts by the Company to meet the
targeted levels. While Staff supports continuation of the program at the existing funding levels
Staff would consider supporting increased funding levels if the Company seeks to increase activity
in the W AQC program in order to meet overall demand side resource targets.
Similarly, Staff expects the Company and CAP AI to continue to work together to modify the
program to meet changing needs or conditions. Staff also notes that this program has proven to be
an effective vehicle for reaching limited income customers, and that it may be appropriate to
consider using this program as a vehicle for delivering other demand side management efforts, such
as the promotion of efficient appliances. The Company now includes compact fluorescent lights
(CFL) and refrigerator replacement in its program.
Unlike Rocky Mountain Power and A vista, Idaho Power does not include the details of this
program in its tariff. Staff has found that including the details of such programs in the tariff is an
STAFF COMMENTS MAY 17 2007
appropriate and effective means for the Company, CAPs, and customers to obtain information about
the program elements. Moreover, the Commission s tariff advice procedures provides an efficient
method for making minor modifications to program design. Staff recommends that Idaho Power
include the program elements in a separate tariff.
STAFF RECOMMENDATION
Staff recommends the Commission approve the parties request to continue operation of the
W AQC program at the existing annual funding level of $1.2 million and as currently structured.
Staff believes this level of resource commitment is appropriate for the foreseeable future and
therefore recommends that the program be continued until directed otherwise. Staff also
recommends the Company continue to book and track payments to CAP agencies in a separate
balancing sub-account, and that CAP agencies continue to carryover unused amounts from year-to-
year. Staff finds the requirement for a separate annual report for the W AQC program to be
appropriate and recommends the continuation of this requirement. Finally, Staff recommends that
the Company be directed to file tariffs detailing its low-income weatherization program.
Respectfully submitted this 7~ayofMaY2007.
Donald L. Ho I, II
Deputy Attorney General
Technical Staff:Bev Barker
Nancy Hylton
Chris Hecht
Wayne Hart
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STAFF COMMENTS MAY 17 2007
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 17TH DAY OF MAY 2007
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-07-, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
BARTON L KLINE
MONICA B MOEN
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
RIC GALE
VP - REGULATORY AFFAIRS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
BRAD M PURDY
ATTORNEY AT LAW
2019 N 17TH STREET
BOISE ID 83702
00 en/'--
SECRETARY
CERTIFICATE OF SERVICE