20080509Comments.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
Street Address for Express Mail:
472 W WASHINGTON
BOISE ID 83702-5983
Attorney for the Commission Staff
BEJ?ORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR AUTHORITY) CASE NO. IPC-E-08-4
TO IMPLEMENT FIXED-COST ADJUSTMENT )
(FCA) RATES FOR ELECTRIC SERVICE )
FROM JUNE 1,2008 THROUGH MAY 31, 2009.) COMMENTS OF THE
) COMMISSION STAFF
)
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Weldon B. Stutzman, Deputy Attorney General, and in response to the
Notice of Application and Notice of Modified Procedure issued in Order No. 30521 on April 2,
2008, submits the following comments.
BACKGROUND
On March 14, 2008, Idaho Power Company filed an Application requesting authority to
implement fixed cost adjustment (FCA) rates for electric service from June 1, 2008 through May
31,2009. In Case No. IPC-E-04-15, Order No. 30267 issued March 12,2007, the Commission
approved a stipulation to implement a three-year FCA pilot program for residential and small
general service customers. The Company is nearing the end of the first year of the pilot program
approved by the Commission.
STAFF COMMENTS 1 MAY 9, 2008
The FCA is a mechanism to separate Idaho Power's fixed costs from its energy sales, and
establish a rate to allow the Company to recover its fixed costs separate from energy sales. The
rationale for an FCA is that traditional rate design discourages energy conservation programs;
that is, utilties that recover fixed costs through energy sales have a disincentive to reduce their
sales volume by encouraging energy efficiency and demand-side management programs.
The FCA implemented last year for the pilot program works the same for residential and
small general service customers. For each class, the average number of customers in the last
general rate case is multiplied by a fixed-cost-per-customer rate that was determined through the
Company's revenue requirement in that rate case. This produces an authorized fixed-cost
recovery amount, which is then compared to the amount of fixed costs actually recovered by the
Company in the FCA year. The difference between the authorized fixed-cost recovery amount
and the actual amount collected by the Company for each customer class is the fixed-cost
adjustment (FCA) amount. Essentially, if average energy sales per customer increase, customers
wil get a refud of the excess fixed costs (FC) paid, or alternatively, if average energy sales per
customer decrease, customers will be charged an additional amount to recover the FC losses.
THE APPLICATION
According to the Company's Application, the rate of growth in energy sales exceeded the
rate of growth and number of customers for the residential class during 2007; that is, the average
energy use per residential customer increased. The Company thus collected more for its fixed
costs (approximately $3.5 millon more) than as established in the residential FCA formula. The
FCA, as calculated by the Company, results in a credit balance for residential customers for the
additional fixed costs recovered during the year. The residential credit results in a 1.17% rate
decrease.
The small general service class, however, saw a decrease in per-customer energy use
during 2007, which means the Company under-collected its fixed costs. For the small general
service class, Idaho Power proposes an FCA to recover a portion of the $1,187,033 the Company
under-collected for its fixed costs. Recovery of the full amount would result in a 7.3% increase
in the FCA for the small general service customers. Because the stipulation approved by the
Commission to implement the pilot program calls for a 3% cap on any increase in the FCA, the
Company proposes a 3% increase in the FCA for the small general service class.
STAFF COMMENTS 2 MAY 9, 2008
STAFF REVIEW
2007 Fixed Cost Adjustment (FCA) Calculation
Staff has reviewed the Company's FCA filing and recommends that the Commission
accept the Company's proposed total FCA net deferral balance of approximately $2.4 millon,
and distribute the credit to residential and small commercial customers on an equal, per energy
basis of 0.045676 t/kWh. For reasons expressed below, Staffs recommendation deviates from
the Company's proposal to issue a credit of 0.070830 t/kWh for residential customers, and a
surcharge of 0.255804 t/kWh for small commercial customers.
From a mechanical standpoint, the pilot program is working as intended. Usage per
residential customer has increased since the 2005 test year, resulting in over collection of
authorized fixed costs for this class, which equates to a credit for the 2008 FCA year for the
residential class. Usage per commercial customer has declined since the 2005 test year, resulting
in under collection of fixed costs for this class, which equates to a surcharge for the 2008 FCA
year for the commercial class. Though Staff is satisfied that the mechanism generally fuctions
as anticipated, the fixed cost assumptions and application of the methodology used by the
Company prevent Staff from fully endorsing the positions supported in Company witness
Youngblood's testimony. Because the Commission did not approve a cost of service study in the
2005 general rate case, no level of fixed costs were authorized on a class specific basis. While
Staff believes the pilot should continue, its comments wil focus on the mechanism's lack of
transparency regarding authorized fixed costs per customer class, the need to address that issue
by interested paries and the Commission prior to next year's filing, and the Company's DSM
efforts in 2007.
Staff Attachment NO.1 details the Company's fixed cost recovery for the first year of the
pilot program. The Attchment shows that the Company collected approximately 2.3% more in
fixed costs than what it considers the appropriate level of fixed costs for the residential class.
Conversely, the Company undercollected nearly 13% of its proposed fixed costs from small
commercial customers. Accounting for interest and using forecasted energy sales for 2008, the
Company proposes a refund of 0.070830 t/kWh for residential customers, and a surcharge of
0.255804 t/kWh for the small commercial class, implementing the 3% cap on the 7.3% increase
the Company contends is waranted for fixed cost recovery.
STAFF COMMENTS 3 MAY 9, 2008
The FCA was promoted as a "simple system of periodic adjustments" when presented to
the Commission in Case No. IPC-E-04-15. (Cavanagh, p. 5) The Company's filing of the first
year pilot results demonstrate that a simple methodology on the surface can become complicated
by the underlying details. In theory, there are five bits of information needed to calculate the
FCA:
1. customer counts for the test year;
2. normalized energy for the test year;
3. the average customer count during the FCA year;
4. weather normalized energy during the FCA year; and
5. the allowed fixed costs for the test year
As Idaho Power's Application makes clear, the key components of the formula would be
established in a general rate case. The Application explains that for each customer class, "the
actual number of customers is multiplied by the fixed cost per customer rate (FCC), which is
established as a part of determining the Company's allowed revenue requirement in a general
rate case." To determine what the Company actually recovered for fixed costs, "the Company
taes weather-normalized sales for each class and multiplies that sales figure by the fixed cost
per energy rate (FCE) as established in the Company's general rate case." Application p. 3
(italics added). The Stipulation establishing the FCA does not address determination of these
key components if not completed in a rate case.
Section III, 7a-c of the Stipulation, approved by the Commission in Order No. 30267,
outlines the methodology used to determine the allowed fixed costs to be recovered, stating:
a. Any differences between Schedule 1 and 7 class (fixed cost components of the)
revenue requirements and corresponding fixed cost per customer approved by the
Commission in Case No. IPC-E-05-28 (2005 general rate case) must be reconciled
with the fixed cost per customer and fixed cost per energy utilized in the approved
FCA mechanism.
b. To determine the actual number of customers determined by class on a monthly basis,
the Company wil utilize the same customer count methodology used in the
Company's 2005 rate case filing.
c. The methodology used to weather-normalize actual monthly energy used in the FCA
wil be the same weather normalization methodology used in the Company's filing in
the 2005 rate case.
STAFF COMMENTS 4 MAY 9, 2008
With respect to subparagraph (b), Staff received the residential and small commercial
customer counts used to calculate the fixed costs recovered in the 2007 calendar year, along with
the weather normalized and actual sales for each class (items 3 and 4). Comparisons between the
Company's FERC Form NO.1 filing and Production Response 4 show discrepancies in these
totals for the residential class (there is no separate line for small commercial, so a comparison
could not be made). This may be due to the monthly tracking of the FCA, though the
Company's monthly filings that accompany the monthly PCA filing do not provide adequate
information for continual auditing of the mechanism. Staff recommends that the Company
provide customer counts and weather normalized energy in the monthly FCA report to faciltate
better tracking of program details throughout the year.
With respect to subparagraph (a), Staff has reviewed the test year customer counts and
base revenues to verify the allowed fixed costs per customer class. Staff can confirm the
customer counts and normalized energy (items 1 and 2) used in calculating the fixed cost per
customer (FCC), but confirming the actual fixed costs assigned to each customer class is
problematic. The 2005 rate case was settled by the paries, and no cost of service (COS) model
was approved by the Commission, only a revenue requirement for each rate class was approved.
Without an approved COS study or specified fixed cost assignment by customer class, there is no
way to accurately set allowed fixed costs (item 5) on a class specific basis. The Company's
filing makes it apparent that it over collected on what it regards as authorized fixed costs. These
fixed costs included costs associated with other rate schedules that are collected through both
residential and small commercial revenues. Unless an approved COS study is used, there is no
confirmation of what the Commission deems to be 'authorized' fixed costs.
The Company provided in this Application its 2005 cost of service study, adjusted
according to the Commission-approved class revenue requirement. Company Exhibit NO.2
details its calculation of fixed costs, reflecting the approved base revenues and its own notion of
fixed costs by customer class. The Exhibit shows revenues of $266,728,029 and $16,039,937 for
the residential and small commercial classes, respectively, that were approved by the
Commission. For both Schedule 1 and 7, these revenues differ from the Company's proposed
COS study, reflecting a level of costs shifted from other rate schedules. Based on the COS study
utilzed by the Company, roughly 53.4% of residential revenues cover fixed costs (less fixed
STAFF COMMENTS 5 MAY 9, 2008
customer charges), and nearly 57% for the small commercial class. i Using the customer counts
from 2005, this resulted in a FCC for CY2007 of$395.82 for residential customers, and $293.88
for small commerciaL.
It is important to reiterate that the Company's assignment of recoverable fixed costs for
Schedules 1 and 7 is based on a COS study that was never approved by the Commission. While
Staff does not fault the Company for its attempt to estimate fixed cost responsibilty for the two
customer classes (absent a commission approved amount), Staff does question the validity of the
deferred fixed cost accrual and the spread of the deferral balances to the two customer classes.
Staff is prepared to support the Company's overall calculation of $2.4 milion for the first year of
the pilot program, but recommends that the balance be spread on an equal per kWh basis to both
classes. Staff also recommends that prior to the end of pilot year two, interested paries work to
establish an acceptable method of assigning fixed cost responsibilty to Schedules 1 and 7 absent
specific assignment approved by the Commission.
Given the unapproved COS study used to determine fixed cost per customer class, Staff
recommends that the FCA deferral balance be distributed evenly on an energy basis between the
residential and small commercial classes. Staff believes this is a reasonable approach
considering the Company is not hared by equally distributing the refund to both classes of
customers. It may even be beneficial to do so, as the Company need not postpone collection of
the $699,506 of fixed costs that would be deferred due to the 3% discretionary cap. In the last
column of Staff Attachment No.1, Staff applied the Company's forecasted energy sales for 2008
to the deferral amount, and recommends that the Company issue a credit to all its residential and
small commercial customers of 0.045676 t/kWh ($2,400,557.73 divided by 5,255,673,173
kWh).
2008 FCC and FCE
Staff reviewed the Company's proposed FCC and fixed cost per energy (FCE). Based
upon the approved revenues from the 2007 general rate case, the Company proposes to increase
the residential FCC by 8.1 % to $428.85 and the small commercial FCC by 0.3% to $294.79.
i Per Company witness Youngblood's Exhibit 2, $7,775,396 ofthe residential recoverable fixed costs are attibuted
to Schedules 19 and 24, and $503,041 of small commercial recoverable fixed costs are attbuted to Schedules 19
and 24. The fact that a lower percentage of fixed costs are recovered through energy charges for these rate classes
lowers the percent of effective rate covering fixed charges for residential and small commerciaL.
STAFF COMMENTS 6 MAY 9, 2008
Company witness Youngblood states that the ratio of fixed costs to base revenues used in the
unapproved 2005 COS study were utilzed to ascertin the new FCC levels.2 This is essentially
the same methodology used by the Company to assign class specific fixed costs for the first year
of the pilot program. Staffhas already expressed its concern regarding this methodology, and
has recommended a process to make improvements.
Staff does not propose an alternative FCC at this time, but will continue working with the
Company to determine more appropriate levels for the 2008 FCA year. In the interim, Staff
recommends that the Company defer at the levels presented in its filing. Should discussions
between paries determine that the FCCs for 2008 need adjustment, the Company can incorporate
the new calculation in its 2009 FCA filing.
Finally, the Company proposes an effective date for the new FCC rates retroactively to
January 1, 2008. Staff opposes this effective date, and recommends the Commission approve an
effective date of March 1, 2008, to coincide with the effective date for the rate increase approved
in the 2007 general rate case. Staff believes the FCC rates should reflect the revenue
requirement approved by the Commission at the time those rates are applied.
Idaho Power's Demand Side Management (DSM) Efforts
The anual results of the fixed cost adjustment (FCA) mechanism are not isolated to, or
otherwise necessarily the direct result of, Idaho Power's demand side management (DSM) costs,
efforts or achievement. Nevertheless, the impetus for the FCA pilot is to test not only whether
the mechanism is conceptually sound, workable and reasonably understandable and transparent,
but, more importantly, to test whether it results in increased and improved DSM by the
Company.
The Application, page 3, paragraph 5, states "As par of its enhanced efforts to promote
energy efficiency and demand side management, Idaho Power Company actively pursued
numerous additional opportunities throughout 2007." These efforts are listed on page 7 of Mr.
Youngblood's testimony and on pages 47-50 of the Company's 2007 DSM Anual Report, the
2 Staff
believes that a large portion of the 2007 rate increase is due to higher (variable) energy costs, which would
alter the Fixed Cost percentage of base revenues. A further discrepancy between the 2007 and 2008 FCC rates
arises due to the Company's inconsistency in including fixed costs from other classes recovered in base revenues of
residential and small commercial customers. For 2007, the Company included additional fixed costs at a lower
percentage than the 57.1 % and 62.4% used in calculating the 2008 rates, reflecting a lower percentage of fixed costs
recovered through energy charges for Schedules i 9 and 24.
STAFF COMMENTS 7 MAY 9, 2008
entirety of which was included as Exhibit NO.1 to Mr. Youngblood's testimony. Mr.
Youngblood states that the Idaho Power's enhanced DSM efforts included:
. A broader availability of efficiency and load management programs
. Expansion of DSM programs beyond peak shaving/load shifting programs
. Building Code improvement activity
. Pursuit of appliance code standards
. Expanded third-party verification programs.
Pages 47-50 of Idaho Power's 2007 Demand Side Management Anual Report provide
more description of these efforts, but there is no analysis provided to demonstrate or suggest that
these additional efforts would not have occured in the absence of the FCA mechanism. In fact,
in response to Staffs Production Request No. 12, Idaho Power said that its "...new programs
initiated in 2007 were planned prior to the implementation of the FCA..." i.e. through its 2006
integrated resource plan (IRP) process.
Furthermore, as shown in Staff Attachment No.2, the Company's total DSM
expenditures and kWh savings both increased at much higher rates from 2004 to 2005 and from
2005 to 2006 than they did from 2006 to 2007. Somewhat ironically, the one area that did
increase more from 2006 to 2007 than it did in the prior year was the peak demand savings from
the two load control programs. It is perhaps noteworthy that the Company's DSM overhead
costs, while probably stil within reasonable limits, are accelerating much faster than overall
DSM costs and benefits. Increased overhead costs are indicative of the rapid expansion of the
Company's DSM employee roster from 2006 to 2007.
Staff also reminds the Commission that in Case No. IPC-E-04-09 fied in December
2004, the Company requested that the then approximate 0.5% DSM tariff rider be increased to
1.5% in 2005 and to 2.4% in 2006. Clearly, based on the testimonies of Ms. Maggie Brilz and
Mr. Tim Tatu in that case and on the Company's actual DSM performance since then, Idaho
Power was planing to accelerate its DSM offerings and efforts even without having an FCA
mechanism.
It is not Staffs intent to disparage Idaho Power's DSM efforts in these comments, but
only to demonstrate that it is not at all clear that the first year of the three-year FCA pilot has
resulted in the Company expanding or improving its DSM efforts beyond what it would have
done without the FCA's removal of a DSM disincentive.
STAFF COMMENTS 8 MAY 9, 2008
Following are brief analyses of the five bullet point efforts listed above and in Mr.
Youngblood's testimony.
Broader Availabilty of Effciency and Load Management Programs
Idaho Power continued to focus its residential DSM efforts on energy efficiency in
mobile homes, new home construction, low income weatherization and Energy Sta lighting
programs. DSM efforts in the commercial sector focused on commercial building efficiency,
customer specific efficiency and one new program called Easy Upgrades. Additional detail on
each DSM program is provided in Staff Attachment NO.3 and Appendix 4 ofIdaho Power's
2007 DSM anual report. Staff Attachment NO.2 shows how the Company expanded and
broadened its total DSM effort in 2007. Not surrisingly the 2007 rates of increases in total
program costs and energy savings were lower than they had been in prior years, while the actual
program costs and energy savings increases were larger than in the past. As programs matue it
is reasonable to expect previously high growth rates to soften.
Expansion of DSM programs beyond peak shaving/oad shifting programs
Idaho Power clearly achieved this goal in 2007, even though the savings from its peak
demand load control programs grew at a slightly higher rate than the energy savings from its
other programs.
Building Code Activities
In 2007, the Idaho Legislature adopted the 2006 International Energy Conservation Code
(IECC) effective January 1, 2008, which Idaho Power said it supported though the Idaho
Building Code Coalition. It seems probable that the Legislatue would have updated Idaho's
building code to the 2006 IECC standard regardless of whatever level of support Idaho Power
may have given to it.
The Stipulation in Case No. IPC-E-04-15 (Stipulation), paragraph 8.b, said that Idaho
Power would "...promote and support appropriate energy code training programs and advocate
the enforcement of energy codes." In this Application, the Company did not mention any
activities in support of improvements to code training and enforcement.
STAFF COMMENTS 9 MAY 9, 2008
Appliance Standards
The Stipulation, paragraph 8, said, "As a part of this commitment, the 2008 Integrated
Resource Plan wil include an evaluation of the costs and potential for energy savings that would
occur if the appliance and equipment efficiency standards adopted by the State of Oregon were
applicable in the State ofIdaho." Idaho Power contracted to have this study completed, and its
2007 DSM Annual Report said that it will be incorporated into the 2009 IRP.
Third-Part Verification Activities
The third-pary verifications listed by Idaho Power in its 2007 DSM Anual Report
(p.49-50) are not the types of third-pary program process evaluation and results verification that
the Staff envisioned when it signed the Stipulation in Case No. IPC-E-04-15. For example,
while the Staff agrees that the Regional Technical Foru (RTF) is a good source for deemed
savings data bases and that the consulting contractors listed probably provide the services
specified by their contracts, neither the RTF nor the listed job-specific contractors verify whether
Idaho Power's overall application of RTF data bases is reasonable, given the many necessar
assumptions and unavoidable unowns in those data bases. Nor do they evaluate the overall
reasonableness of the Company's procedures used to plan and administer DSM programs or the
Company's overall DSM cost-effectiveness.
DSM Activities and Actual Average kWh Usage Changes
Schedule 7' s small commercial customers' average, weather-normalized electricity usage
per customer decreased by nearly 13% from 2005 to 2007.3 Although Idaho Power does not
track all DSM programs by rate schedule, the information that is available suggests that DSM
programs reduced average usage for small commercial customers over this two-year period by
significantly less than one percent. Idaho Power said in response to Staff Production Request 14
that it "has not conducted any analysis of the reduction..." Informally, representatives of the
Company told Staff that they do not know why the average usage declined, but they cautioned
against interpreting this decline as establishing a new trend. Plausible but unverifiable
3 The number of customers also decreased during this period because some with higher usage were moved to
Schedule 9, but Idaho Power adjusted Sch. Ts average usage in the FCA calculations so that the FCA was not
affected by this shift. Also, because the FCA is based on per customer usage, any other change in the number of
customers would not affect the FCA, unless the increasing or decreasing customers' average usage differed from
that of the base customers.
STAFF COMMENTS 10 MAY 9, 2008
explanations for the large decrease in average, weather-normalized kWh usage are a downtu in
the economy, energy price changes, general awareness of the importance of energy issues,
telecommuting, an increase in the relative number of very small businesses, a less-than-perfect
weather normalization method, etc.
Residential customers' average, weather-normalized electricity usage per customer
increased by 2.3% from 2005 to 2007.4 The Company's response to Staff Production Request
No. 15, said "...Idaho Power has only conducted a preliminary analysis of the Ada and Canyon
County Assessors' data bases to determine average house size and residential central air
conditioner penetration..." Staff is aware that average residential usage per customer has been
declining for years primarily as the result of high growth of mostly gas-heated homes, which has
diluted the historically high percentage of all-electric homes. It is plausible that the slowed
housing growth in 2007 (thus slowed dilution of all-electric homes) coupled with more and
larger televisions and other electronics, more air conditioning, more telecommuting, more home
dining due to the economy, etc. have all contributed to the per customer increase in average,
weather-normalized residential electricity usage. Staff estimates that Idaho Power's residential
DSM efforts that occurred in 2005 (but for the savings that did not accrue in calendar year 2005),
in 2006 and in 2007 reduced per customer usage by less than 1 % in calendar year 2007 and that
this achievement is being overshadowed by other factors.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the Company's FCA filing with certain
modifications. First, Staff recommends that the net deferral balance of negative $2,400,557 be
distributed to both customer classes on an energy basis during the 2008-2009 FCA year. Based
on the forecasted energy usage provided by the Company, the result is a rate reduction of
0.040821 t/kWh.
Staff also recommends that the Company meet with Staff and other interested paries to
address the appropriate levels of fixed costs per customer class for the 2008 FCA year, and to
improve transparency of the pilot program through enhanced reporting during the year. Furher,
Staff recommends that the Commission direct the Company to explicitly address the FCC
4 The number of residential customers increased by 6.6% over this two-year period, but because the FCA is based on
per customer usage, it is not affected by customer growth unless the average usage of new customers differs
significantly from the average usage of existing customers.
STAFF COMMENTS 11 MAY 9, 2008
amounts in the next general rate case. Staff encourages the Commission to set the FCC level in
its final order of the next general rate case so as to avoid furher calculation uncertainties.
Idaho Power's DSM program effort clearly increased in 2007, but at a slower rate than it
had in previous years. The Company presented no significant evidence to demonstrate that
removal of DSM disincentives through the FCA mechanism, after just one year of a three-year
pilot, has had a material impact on the DSM activities of Idaho Power. While Staff believes the
growth in residential electric consumption was somewhat impacted by the Company's residential
DSM programs, it does not appear that the Company's commercial DSM programs significantly
contributed to the reduction in per customer electrical consumption in the commercial class.
Nevertheless, Staff recommends the pilot be continued to fuher evaluate longer-term effects.
Respectfully submitted this ~day of May 2008.
~~,
i.
1
Weldon B. Stutzman
Deputy Attorney General
Technical Staff: Bryan Lanspery
Lynn Anderson
i: umisc: commentsipce08.4. wsbll a. doc
STAFF COMMENTS 12 MAY 9, 2008
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Attachment NO.2
Case No. IPC-E-08-4
Staff Comments
L. Anderson, Staff
5/09/08
ATTACHMENT NO. 3
This attachment provides a brief description of the recent histories of each of Idaho
Power's curent, major DSM programs based on information in its DSM Anual Reports. (All
references to energy savings are first-year, anual kilowatt-hour (kWh) unless otherwise stated):
i
Demand Response Programs
Residential Air Conditioning Cycling - the number of paricipants more than doubled from
2005 to 2006 and again from 2006 to 2007. The peak kilowatt (KW) savings increased by 105%
and 91 %, respectively, for those years, while Idaho Power's costs increased by 64% and 96%,
respectively. Economies of scale seem to be diminishing.
Irrigation Peak Rewards - The number of paricipants and Idaho Power's costs have slowly
increased from 2005 to 2007, while the peak KW savings have decreased slightly.
Residential Effciency Programs
Appliance Program - Curently this program consists of a consultat's study for which Idaho
Power paid less than $10,000 in 2007. The study is intended to be incorporated into the 2009
integrated resource plan (IRP).
Energy House Calls - This program consists primarily of sealing ducts in mobile homes and
was originally funded by the Bonnevile Power Administration (BPA) but it is now fuded by
Idaho Power's DSM rider. Paricipation dropped by nearly half in 2005 from the prior year and
has slowly declined each year since then, as have the costs and the savings.
Energy Star Homes - This program is the subject Idaho Power's pilot incentive mechanism
(Case No. IPC-E-06-32) ruing concurently with the FCA pilot. As such, Idaho Power not
only has no disincentive to promoting Energy Star Homes, it also has an economic incentive to
promote them.
The number of new Energy Star homes and the total energy savings dropped by about
30% from 2006 to 2007, which is not unexpected given the general housing decline. The
estimated percentage of Energy Star homes compared to total new homes increased from 3.9% in
i Annual kWh are additive for the life of each measure, except for some degradation. First year kWh are not
degraded, but for static programs only about 50% wil be saved in the calendar year listed. If programs are growing,
then less than 50% of kWh savings wil occur in the listed year.
1
Attachment NO.3
Case No. IPC-E-08-4
Staff Comments
L. Anderson, Staff
5/09/08 Page 1 of 3
2006 to 5.0% in 2007. Idaho Power's costs increased by about 1 % from 2006 to 2007. Much of
the marketing for this program is performed through the Northwest Energy Efficiency Allance
(NEEA).
Rebate Advantage - This program to encourage purchases of energy efficient mobile homes was
originally fuded by BP A. Paricipants increased by 20% from 2006 to 2007 after being nearly
unchanged for the prior three years. The utility cost of the program and the kWh savings both
increased by about two-thirds in 2007.
Energy Star Lighting (CFLs) - Historically, Idaho Power's CFL promotions have been
leveraged and timed with promotions by NEEA and BP A. In 2007, paricipation increased by
23%, down from a 308% increase in the prior year. Idaho Power's costs increased by 86% in
2007, while its kWh savings increased by 14 percent.
Low-Income Weatherization - The number of homes weatherized by the community action
parnership (CAP) agencies in Idaho Power's service area have been decreasing since 2005,
while the total anual energy savings have increased slightly. Idaho Power does not control how
many homes the CAP agencies weatherize each year.
Heating and Cooling Effciency - This program had some startup costs in 2006, but most of its
$0.5 milion costs were incurred in 2007. To date it has produced very little verifiable energy
savings, but it has resulted in the training of over 200 heating, ventilation and air conditioning
(HV AC) technicians. Energy savings are expected to occur as those trained implement the
techniques learned.
Commercial/ndustrial Programs
Commercial Building Effciency - The number of paricipants has been up and down again
since 2005 for this new construction/major addition program, but Idaho Power's program costs
have been steadily climbing as have the energy savings, but not enough to have had any
significant impact on the overall average usage per commercial customer.
Easy Upgrades - This program was officially launched early in 2007 after being included in the
2006 IRP as a cost-effective resource. Most of the actual activity occurred in the latter half of
2007. The 5,184 MWh anual savings were much more than the savings actually occuring in
2007 and likely less than 2% of the savings have benefitted Schedule 7's small commercial
2
Attachment No. 3
Case No. IPC-E-08-4
Staff Comments
L. Anderson, Staff
5/09/08 Page 2 of 3
customers. This program does not explain why Schedule 1's average electricity usage per
customer declined in 2007.
Custom Effciency - As a result of the 2006 IRP, this program grew from an expansion of the
former Industrial Effciency program that was originally identified in the 2004 IRP. In 2007, 49
large commercial and industrial customers paricipated, Idaho Power spent $3.2 milion, and
29,789 anual MWh savings were estimated from this program. From 2006 to 2007
paricipation increased by 23%, Idaho Power's costs increased by 95% and energy savings
increased by 55 percent. But, from 2005 to 2006 paricipation and energy savings had increased
at higher rates, while the costs increased at a lower rate.
¡
Irrigation Efficiency Program
Irrigation Effciency - This program has existed since 2003, but was relatively small until 2006
when it was expanded by more than 15-fold. Although the number of participants increased 46%
from 2006 to 2007, Idaho Power's costs and the annual energy savings both decreased by 28
percent.
Regional Market Transformation
Idaho Power has a five-year contract with the Northwest Energy Effciency Allance (NEEA) for
$1.3 milion anually in exchange for its paricipation in and benefit from NEEA's regional
energy efficiency market transformation activities. This contract rus from 2004 through 2009
and the monetar obligation is fuded from its Idaho DSM rider, carrover from past
contributions, and from its Oregon service area. In addition to the 28,601 MWh that NEEA
attributed to Idaho Power proportionately to its fuding level in 2007, some of Idaho Power's
own DSM activities rely upon research, testing, marketing and demonstration programs
performed or administered by NEEA.
3
Attachment NO.3
Case No. IPC-E-08-4
Staff Comments
L. Anderson, Staff
5/09/08 Page 3 of 3
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 9TH DAY OF MAY 2008,
SERVED THE FOREGOING COMMENTS OF THE COMMISSIN STAFF, IN CASE
NO. IPC-E-08-04, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
LISA D NORDSTROM
BARTON L KLINE
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: InordstromaYidahopower.com
bklineaYidahopower .com
MICHAEL J YOUNGBLOOD
JOHNRGALE
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: myoungbloodaYidahopower.com
rgaleaYidahopower .com
1 .ko
CERTIFICATE OF SERVICE