20080627Drake direct.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC SERVICE.
CASE NO. IPC-O8-
IDAHO POWER COMPANY
DIRECT TESTIMONY
THERESA DRAKE
Please state your name and business address.
My name is Theresa Drake.My business
address 1221 West Idaho Street,Boise,Idaho.
capacity?
By whom are you employed and in what
I am employed by Idaho Power Company as
Manager of Customer Relations and Energy Efficiency.
Please describe your educational background.
In May of 1990, I received a Bachelor of
science degree in Marketing with emphasis in Finance from
Jacksonville State Uni versi ty in Jacksonville, Alabama.
have attended numerous seminars and conferences on pricing
issues, regulatory issues, marketing research, and energy
efficiency.
Please describe your business experience
with Idaho Power.
I joined Idaho Power in January 1997 as a
Pricing Analyst.In July 2001 , my position evolved into a
senior Pricing Analyst and included preparing cost-of-
service studies, development of the Company's tariffs, and
performance of duties as a regulatory liaison for customer
related issues.In February 2004, I became Manager of
Customer Relations and Research (now referenced as Customer
Relations and Energy Efficiency) .In that capacity, I
DRAKE, DI
Idaho Power Company
manage staff members and activities associated with
customer satisfaction , process improvement, and energy
efficiency.
What is the scope of your testimony in this
proceeding?
My testimony will address the Company'
energy efficiency efforts and customer relations
activities.
ENERGY EFFICIENCY
Please define energy efficiency as
referenced by the Company.
Energy efficiency refers to the Company
activities involved with energy efficiency, demand
response, and small scale renewable programs and
initiatives.
Why does the Company use the term H energy
efficiencyH instead of Demand-side Management?
The Company intentionally refers to all the
above-mentioned activities as "energy efficiencyH because
our research shows this term is generally understood by our
We incorporate energy efficiency terminologycus tomers .
into our customer education efforts and program
participation recruitment.When the Company is referring
to a specific type of demand response , it is specific to
DRAKE , 01
Idaho Power Company
characterize management of electrical demand as
appropriate.
Will you be sponsoring any exhibits as part
of your testimony?
I am including three exhibits as partYes.
of my testimony.Exhibit No. II , titled Energy Efficiency
Programs Summary provides an outline of current programs
offered by the Company.Exhibit No. 12 is titled Energy
Efficiency and Demand Response Programs, Sectors, and
Operational Type.Exhibit No. 13 is a graph depicting the
energy. savings achieved by the ten largest
utilities/program administrators in 2007 compared with
2006.
Please describe Idaho Power s objectives in
promoting and implementing energy efficiency and demand
response programs.
The Company s two main obj ecti ves for energy
efficiency and demand response are:(1) to acquire all
cost-effective resources in order to efficiently meet the
Company's electrical system's needs and to provide
customers with programs and (2) information to help them
manage their energy and demand use and lower their bills.
Has the Company made progress in promoting
and implementing energy efficiency and demand response
DRAKE, DI
Idaho Power Company
programs?
The Company s most recent Demand-Side
Management 2007 Annual Report was filed with the Idaho
Public Utilities Commission ("IPUC") on March 14,2008.
This report specifically describes progress made by the
Company in providing energy efficiency and demand response
As noted in the report, energy savings fromprograms.
energy efficiency activities increased on a system-wide
basis by 29 percent and expenditures on related activities
increased by 36 percent as compared to 2006.Overall
energy efficiency activities in 2007 resulted in a 57 MW
peak reduction and 91 145 MWh in energy savings.Since
2002 , the Company has substantially increased the amount of
dollars spent on energy efficiency.For example , in 2002,
energy efficiency program expenses were about $1.94 million
while in 2007 the Company spent approximately $15.
million.
Is the Company s goal or philosophy to
pursue all cost-effective energy efficiency and demand
response?
Yes.The Company is in the process of
pursuing all cost-effective energy efficiency and demand
response through various programs as determined feasible
through the Integrated Resource Planning ("IRpU ) process.
DRAKE, DI
Idaho Power Company
The programs offered by the Company and the resulting
energy savings have increased dramatically in recent years.
Are there other indicators of the Company
increasing commitment to energy efficiency?
In pursuit of energy efficiency andYes.
demand response programs, the Company's Customer Relations
and Energy Efficiency Department ("CR&EE") has grown
significantly since the beginning of 2006.In January
2006, the CR&EE department consisted of approximately 10
employees.The CR&EE department now cons is ts of 29
employees, including two leaders with backgrounds in
regulatory affairs, energy efficiency, customer analysis,
program operation! and marketing.The department staff
provides a diverse background of skill sets.Employees
include engineers; employees with Leadership in Energy and
Environmental Design certification; certified energy
managers; analysts with advanced degrees in economics,
business, and marketing; and marketing and advertising
professionals.The addition of new staff has had a direct
affect on increased energy efficiency savings and
education.The department also has coordinators for each
market segment: residential, commercial, industrial, and
irrigation and customer satisfaction research.
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Idaho Power Company
The Company actively participates in m~rket
transformation efforts as a method of achieving energy
savings.These efforts aid national and regional
organizations , such as the Northwest Energy Efficiency
Alliance ("NEEA"
) ,
to improve the design of products,
services, and methods to be more energy efficient.
Appliance standards and building code improvements are
other means of market transformation the Company has
supported.
Other areas of pursuit by the Company include
residential and commercial education initiatives for energy
efficiency and the Local Energy Efficiency Funds ("LEEFU
The purpose of these funds is to provide modest funding for
short-term projects and activities that do not fit within
other categories of energy efficiency programs but still
further energy efficiency efforts.For example, in 2007
funds were distributed to the Idaho Office of Energy
Resources for the installation and monitoring of a cold
climate heat pump at an Energy StarOO home in McCall , Idaho
to test the heat pump s effectiveness in a cold climate.
How does the Company determine if programs
are cost-effective?
Program cost-effectiveness is determined by
the Total Resource Cost test and the Utility Cost test as
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Idaho Power Company
defined by the Electric Power Research Institute End Use
Technical Assessment Guide and the California Standard
Practice Manual.For each test , if the benefit/cost ratio
is greater than "" the program is considered cost-
effective.
How does Idaho Power determine which energy
efficiency or demand response programs to offer?
Since 2004, program planning has been part
of the IRP process.This process occurs every two years
and is used to identify energy and demand needs to reliably
serve all retail customers in the Company's service
terri tory.If energy efficiency and demand response
programs are determined to be cost-effective, they are
evaluated on an equal basis with supply-side resources to
meet the identified demand and energy needs.The
evaluation verifies if the program s costs and energy
savings potential warrants inclusion in the Company
preferred resource portfolio.
Does the Company implement new energy
efficiency and demand response programs during the time
period between each IRP?
The Company may implement new programs
during the time period between each IRP if the new program
is determined to be cost-effective , will provide energy
DRAKE, DI
Idaho Power Company
savings or demand reduction that will contribute to the IRP
resource stack, and if market potential for energy
efficiency exists.One tool the Company will utilize to
guide program growth is an updated energy efficiency market
potential study.This assessment will be used to determine
where additional energy efficiency and demand response
opportunities exist and will provide a basis for program
expansion and new program development.
Are programs offered to customers in each
customer class or market sector?
Yes.
Please describe the energy efficiency and
demand response programs available to each sector of
customers.
Programs available to residential customers
include one demand response program , eight energy
efficiency programs, and an educational initiative program.
The commercial and industrial sectors have three programs
available.The Company also provides a Commercial
education program for this sector.Two programs are
offered to the irrigation sector:a demand response
program and an energy efficiency program designed to
encourage replacement or improvement of inefficient systems
and components. Exhibit No. 12 lists Idaho Power's energy
DRAKE, DI
Idaho Power Company
efficiency and demand response programs and Exhibit No. 11
provides an overview of each program offered by the
Company.
Are there any additional programs identified
for the residential marketplace?
At the May 13 th Energy EfficiencyYes.
Advisory Group meeting ("EEAGn a Home Weatherization
Pilot was discussed that will be launched this summer.
This pilot will target customers who have income within
151-250 percent of federal poverty level and may not be
investing in energy efficiency and to offer established
home weatherization improvements.
Does the Company administer other energy
efficiency programs that have not been previously
mentioned?
The Company offers two small- scaleYes.
renewable programs including the Green Power program and
Net Metering.Green Power is a voluntary program for
customers who wish to support certified green energy from
renewable reSOurces. Net Metering provides an option for
customers to offset all or part of their electricity usage
by operating their own small-scale renewable power
This ~rogram provides customers thegenerators.
opportunity to sell their excess generation to the Company.
DRAKE, DI
Idaho Power Company
How many participants does Idaho Power have
in the Green Power Program?
As of May 2008 the Company had 2 538
residential customers and 112 commercial customers
participating in the Green Power program.
How many net metering customers does Idaho
Power have?
As of May 2008 the Company had approximately
48 residential customers and 12 non-residential customers
participating in the net metering program.
Does the Company participate in or offer
efficiency-related activities other than the programs you
mentioned?
The Company sponsors and participatesYes.
in many organizations and community events that are
directly related to energy efficiency efforts.For
example , the Company is an active participant in the
Northwest Power and Conservation Council's ("NWPCC"
Regional Technical Forum, NEEA , Better Bricks, and the
consortium for Energy Efficiency.Company staff
participates in many trade shows and community events such
as the Idaho Green Expo, home and garden shows,
agricultural shows, and has spoken to many civic and
communi ty groups as well as employers at their employee
DRAKE , DI
Idaho Power Company
meetings.
The Company is actively participating in several
regional studies to identify and promote emerging
technologies that may further enhance opportunities for new
program deployment.Some examples include: a study managed
by NEEA to determine efficient ways to design and operate
distribution feeders through voltage regulators, a regional
study to evaluate the energy savings potential of ductless
heat pumps, and regional efforts to measure the impacts of
light-emitting diode ("LED") lighting.
Is there opportunity for public input to the
Company s energy efficiency planning process?
Idaho Power relies on the input of theYes.
EEAG to provide customer and public interest guidance on
energy efficiency program design and implementation
strategies.The EEAG consists of 12 members spanning a
cross-section of the public including residential,
industrial, commercial, irrigation , the elderly, and low
income customers; state agencies, including regulatory
commissions environmental and technical interests; and
representatives from Idaho Power.The EEAG meets several
times a year and has been instrumental in the development
of Idaho Power's programs and studies since 2002.
DRAKE , DI
Idaho Power Company
Are Idaho Power's energy efficiency programs
proving to be successful?
Yes.Each program offered has provided
benefits to the Company and to customers.Most programs
provide monetary incentives for participants, while others
target educational efforts and long- term energy saving
opportunities. Increased participation in the Company
programs benefits all customers by using resources wisely
and avoiding or delaying development of supply- side
resources.
From an energy savings perspective, the Company
programs and initiatives saved 91,145 megawatt-hours and
provided 57 megawatts of peak reduction across the
Company s electrical system in 2007.Each sector
contributed to the energy savings total.In 2007 , the
residential sector realized energy savings of 12 441
megawatt-hours, commercial and industrial sectors saved
790 megawatt-hours, and the irrigation sector provided
12,304 megawatt-hours of energy savings.Other programs
and activities, including LEEF, resulted in nine megawatt-
hours savings.Additional energy savings were obtained
through market transformation partnership activities with
NEEA. NEEA estimated that 28,601 megawatt-hours were saved
in the Company s service territory in 2007.
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Idaho Power Company
The Company is reviewing and evaluating several
programs to ensure they are achieving levels of success
consistent with program planning.Programs are changed as
it is deemed necessary.
How do Idaho Power s recent energy
efficiency activities compare with other regional utilities
efforts?
As depicted in Exhibit No. 13 , according to
the NWPCC, Idaho Power ranks third among the 10 largest
northwest utilities or program administrators in annual
savings of average megawatts from 2006 to 2007.
Do Idaho Power's energy efficiency
activities contribute to customer satisfaction?
Results of the Company s Customer
Satisfaction Survey s have shown steady improvement over
recent years as the percentage of customers who have a
positive perception of the Company s energy conservation
efforts has continued to increase.As depicted in Exhibit
No. 14 , customers' positive perception of the Company
conservation efforts increased from 39 percent in early
2003 to 50 percent in late 2007.This represents a 28
percent increase in positive customer perception.
DRAKE, DI
Idaho Power Company
CUSTOMER RELATIONS
Please describe Idaho Power's continuing
practice of surveying its customers about their levels of
satisfaction.
Idaho Power has contracted with Burke , Inc.,
to conduct quarterly customer relationship surveys since
1995.These Burke surveys represent Idaho Power s primary
customer relationship research.In addi tion to the Burke
surveys, Idaho Power acquires the resul ts of the annual
J. D. Power and Associates Electric Utility Residential
customer Satisfaction Study.The J.D. Power and Associates
study is used primarily as a benchmark to other electric
utilities.As its name implies, the J.D. Power and
Associates study is for residential customers only as the
number of Idaho Power commercial customers is not
sufficiently voluminous at this point in time to qualify
for a subscription to the J. D. Power s commercial customer
study.Idaho Power also utilizes focus groups for
project-specific qualitative research when the situation is
appropriate.Examples of situations when the Company used
focus groups in the past include getting a general sense of
customer opinion prior to developing a comprehensive survey
and getting qualitative feedback from customers on Idaho
Power's website experience.
DRAKE, DI
Idaho Power Company
Idaho Power also conducts a transactional study for
new construction proj ects.These surveys are conducted by
Idaho Power personnel by making a follow-up phone call to a
random selection of customers requiring line construction
work by the Company.Surveys are tracked in a data base
for reporting and trending purposes.
Please describe the Company s customer
satisfaction performance results in recent years.
Based on the Burke surveys, Idaho Power
customers ' satisfaction has steadily improved and the
Company is experiencing levels of customer satisfaction at
significantly higher levels than when we began measuring in
Results of the 2007 J.D. Power and Associates1995.
Residential study reflected very consistent performance by
Idaho Power with regard to residential customer
satisfaction at a time that many other utili ties
represented in the study demonstrated much more turbulent
results.
Please describe the Burke survey methodology
and the resulting information made available to the
Company.
Idaho Power provides a data file of randomly
selected accounts to Burke , Inc., each quarter from four
customer segments - residential , small and medium business,
DRAKE, DI
Idaho Power Company
large commercial and industrial, and irrigation.Annually,
Burke surveys 400 residential customers 200 small and
medium business customers 200 irrigation customers and
approximately 100 large commercial and industrial
These customer sample numbers are large enoughcustomers.
to supply statistically valid results.Surveys are
conducted by telephone and an average survey takes
approximately 15 minutes.
On a quarterly basis, Idaho Power receives results
from Burke based on these customer interviews.Quarterly
results include an overall index score, the Customer
Relationship Index ("CRIU
) ,
as well as more detailed
information in the form of average response data collected
for numerous questions in six general categories:Company
Image, Quality of Service, Cost & Pricing, Responsiveness
to Customers, Communication and Billing and Payment.
What is Idaho Power's primary way of
measuring its success in providing customer satisfaction?
Idaho Power's primary measure for customer
satisfaction is the CRI derived by Burke from quarterly
The CRI is comprised of five keycustomer surveys.
questions where customers, representing all customer
segments, rate Idaho Power on each question on a scale of
zero to four points.The five questions relate to overall
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Idaho Power Company
satisfaction, overall quality overall value , likelihood to
recommend Idaho Power and perception of Idaho Power'
caring attitude.For each customer a total score is
computed for all five questions , ranging between zero and
20 points.Each customer s individual score is divided by
20 to determine a percentage for that customer.All
individual customer data are accumulated to establish the
overall CRI, which can range from a low of zero to a
maximum of 100 percent.The CRI is the best single
satisfaction measure available to Idaho Power because it
depicts the customers' overall attitudes toward the
Company.The CRI is based on research that is conducted at
various points in time throughout the year.This
eliminates the potential for any one event or circumstance
to have a significant influence on the overall customer
satisfaction levels.It is a statistically reliable
measurement of customer opinions and it provides a
historical
over time.
trend that allows us to track our performance
Would you please describe the Company
customer satisfaction performance?
Idaho Power achieved a CRI of 82.95 percent
for the 12 months ending first quarter of 2008.This
reflects a substantial improvement in the CRI from the
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Idaho Power Company
80.75 percent from third quarter of 2005 as reported in
preparation for the Company s last general rate case.Not
only has the Company improved its overall customer
satisfaction level since 2005, improvements have been made
in every individual customer segment.The residential CRI
has improved from 77.70 percent to 81.05 percent, small and
medium business CRI has increased from 80.70 percent to
82.65 percent , large commercial and industrial from 89.
percent to 90. 3S percent and irrigation from 76. 3S percent
to 78.80 percent on a 12-month rolling . average basis.
Please refer to Exhibit No. lS for a detailed
representation of these results.
How does Idaho Power utilize the information
derived from these surveys and how are survey results
communicated with Idaho Power employees?
There are several ways the research results
are utilized and communicated in the company.First is
through the regional staff that has direct contact with
Idaho Power has four field positions titledcus tomers .
Customer Relations Advisors that work closely with Regional
leadership and employee groups.The Customer Relations
Advisors responsibilities are twofold.The first is to
follow-up with any individual customers that are identified
as having an actionable situation that needs to be
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Idaho Power Company
addressed.These are customers that have either requested
a follow-up on a particular issue from Idaho Power or have
responded to questions in such a way that dissatisfaction
wi th an aspect of service is apparent.The Customer
Relations Advisors also communicate survey results and
improvement opportunities to employees in their regions
through team meetings.Second , the Company utilizes Market
Segment Coordinators representing each of the customer
segments as "championsu of their respected customer
segments.These posi tiOllS communicate customers' desires
in process improvements and other ways to meet their needs
throughout the Company.Finally, Idaho Power publishes
survey results and improvement opportunity information
identified in both the Burke surveys and the J. D. Power and
Associates' study through internal publications to all
acti ve employees.In addition , Idaho Power sponsors an
informational meeting about the results of the J. D. Power
and Associates' study every year with Company leadership
and representatives from J. D. Power and Associates.Idaho
Power has also incorporated the CRI as the measurement for
customer satisfaction in determining annual employee
incentive payments.
Does the Company have programs for serving
customers with "special needs
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Idaho Power Company
Since 2004, the Company has employed a
program manager specifically focused on more sensitive
groups of residential customers such as low income and
senior citizens.This position manages the Weatherization
Assistance for Qualified Customers program that, in
conjunction with the Community Action partnership agencies,
provides a no-fee weatherization of electrically heated
homes for low income-qualified residents.Today, the state
guidelines for low income are lS 0 percent of the federal
poverty level which is approximately an annual income of
$30 900 for a family of four.This program , historically
referred to as Low Income Weatherization Assistance or
LIWA, in 2007 served 397 homes and six non-profit buildings
in Idaho, saving approximately 3,300 megawatt-hours of
AS mentioned in the testimony above , this positionenergy.
has recently developed a Home Weatherization pilot program
aimed at customers with financial needs who may not be
investing in energy efficiency.This program will launch
this summer and is expected to focus on customers who are
just above the low income limit (151 percent to 250 percent
of federal poverty level) served by the Weatherization
Assistance program.In addition to home weatherization,
the program manager coordinates annual symposiums to bring
together local energy assistance offices and utilities for
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Idaho Power Company
process sharing and improvement opportunities.This
position also coordinates the company s partnership with
the Salvation Army through the Project Share program.
2006, the Company entered into a unique project to expand
its reach for proj ect Share donations by partnering with a
local coffee company and promoting specialty coffee and
lemonade.with each sale , a donation is made to Salvation
Army's proj ect Share.The program manager is also actively
involved in administering the Gatekeeper program which
utilizes Company field staff to support and assist
vulnerable elderly people who need help but may be unable
to get it for themselves.Other activities include
participating in the annual Fort Hall Indian Reservation
Energy Fair, Governor's Conference on Aging, and serves on
the Policy Advisory Council to Department of Health and
Human Services for Idaho s weatherization program.
What comes from this involvement in the
various outreach acti vi ties and committees?
By taking an active role in our communi ties
and with those activities targeting customers with special
needs, the Company is better able to serve special needs
customers by understanding their needs and how best to
serve them.This participation enables the Company to
bring those ideas and understandings into our planning
DRAKE , DI
Idaho Power Company
process and ultimately serve those customers better.
How else is Idaho Power involved with the
communities it serves?
Idaho Power continues to work with our
communi ties and to encourage employee participation in
local acti vi ties.Idaho Power has five Community Relations
Representatives ("CRRs ) and five Community Education
Representatives ("CERsH ) dedicated to working with the
communities and schools to educate the public on energy
usage, electrical safety, hydroelectric relicensing, and
rate-related issues, to plan and manage growth , and to
assist local economic development efforts with
consideration to energy planning.
In addition , Idaho Power contributes annually (over
$184,000 contributed in 2007 alone) to community, civic,
health, educational , and other non-profit organizations.
These contributions are made on behalf of our shareholders
and are not part of our current rate request.
The Company's employees are among the most giving in
the region in both time and contributions.In 2007, Idaho
Power employees donated over $214,000 to charitable
organizations and individuals in need.Idaho Power
employees, families, and friends have a maj Or impact on the
local community through volunteering and they have set the
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Idaho Power Company
standard for several events.Idaho Power volunteers
consistently raise the most money per employee for Idaho
Public TV and have had the highest employee participation
rate for years.Company employees are very active
participants in the American Heart Association Heart Walk,
in Rake Up Boise and Paint the Town, and in the Idaho Food
Bank's "Take a Turkey to Work Day, Idaho Power employees
also participate in numerous ci vie and community
organizations, Chamber of Commerce events , scouting troops,
and fund raisers.
Why do you highlight Idaho Power'
increasing levels of customer satisfaction and its
employees ' extensive community involvement?
Idaho Power's vision is to be regarded as an
exceptional utility.Focusing on customer satisfaction and
demonstrating our commitment to the communities we serve
enables the Company to accomplish its v1sion.
Does this conclude your testimony?
Yes.
DRAKE , DI
Idaho Power Company