20090114final_order_no_30717.pdf

Office ofthe Secretary
Service Date
January 14 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITION FOR APPROVAL
OF CHANGES TO THE IRRIGATION PEAK
REWARDS PROGRAM.
IDAHO POWER COMPANY'S PROPOSAL
TO RECOVER THE ANNUAL COST OF THEPROGRAM IN THE PCA.
CASE NO. IPC-08-
ORDER NO. 30717
On November 7, 2008, Idaho Power Company filed a Petition requesting
authorization to modify its Irrigation Peak Rewards Program consistent with the terms of
Settlement Stipulation signed by the Company, the Idaho Irrigation Pumpers Association, Inc.
(Irrigators) and Commission Staff. The Stipulation provides for a dispatchable interruption
option to be added to the Program, allowing Idaho Power to dispatch service interruptions
remotely to specified irrigation pumps between the hours of 2 p.m. and 8 p.m. any weekday
during the irrigation season. The Stipulation also maintains the existing timer program as an
option. Under this option, a timer-based load control device is set to interrupt specified irrigation
pumps on a designated weekday or days selected by the customer. The Stipulation also calls for
installation fees depending upon the size of the irrigation system associated with a participating
metered service point. The proposed changes broaden the availability of the program, giving the
majority of irrigation customers the opportunity to participate.
The Company filed direct testimony of a witness to support approval of the
Stipulation. Another Company witness filed testimony recommending recovery of peak reward
program expenses in the Company s Power Cost Adjustment (PCA) mechanism. This proposal
is not part of the Stipulation. On November 10 2008, the Irrigators filed testimony in support of
the Stipulation.
At its Decision Meeting on November 24 , 2008 , the Commission determined to issue
a Notice of Application and Notice of Modified Procedure to process Idaho Power Company
Petition, establishing a 45-day comment period. On November 25 , 2008 , before the
Commission s Notice of Application and Notice of Modified Procedure was issued, Idaho Power
filed a Motion to Bifurcate and Shorten Time. In its Motion, the Company requested that the
ORDER NO. 30716
Commission issue a Notice of Modified Procedure with a 14-day comment period to process
review of the Stipulation for the specific program changes. The Company requested that its
proposal to recover program costs in the PCA be processed by a separate notice, beginning with
a 14-day period for interested parties to intervene. Idaho Power suggested that, after the
intervention period, the parties discuss an additional procedure to consider the cost recovery
issues and present those issues to the Commission.
The Commission granted Idaho Power s Motion to separate consideration of the
Stipulation from the Company s proposal to recover Peak Rewards Program costs through the
PCA. On December 3 , 2008, the Commission issued two different notices. A Notice of
Application and Notice of Modified Procedure informed interested parties of the Stipulation and
the proposed changes to the Peak Rewards Program, and invited written comments to be filed
within 14 days. The second notice, containing a Notice of Application and Notice of
Intervention Deadline, invited interested parties to intervene and participate in the process to
determine recovery of the program costs by Idaho Power.
The time period for filing written comments on the Stipulation and proposed changes
to the Peak Rewards Program closed on December 17, 2008. The only comments filed were
from the Idaho Farm Bureau Federation, urging approval ofthe program changes. The record on
Idaho Power s Petition for approval of the Stipulation thus consists of the Petition and
Stipulation, the written testimony filed by Idaho Power and the Irrigators, and the Farm Bureau
comments. The Commission has reviewed the record and in this Order approves the Stipulation
and the proposed changes to the Peak Rewards Program. Recovery of program costs is not yet
before the Commission, and so is not part of this Order.
The agreement for settling Idaho Power s 2007 general rate case provided that
interested parties would meet to review the existing Irrigation Peak Rewards Program and
discuss possible modifications. See Order No. 30508, p. 8. Accordingly, Idaho Power hosted a
workshop to explore possible changes to the program. Representatives from the Company,
Irrigators, and Commission Staff attended the workshop. Subsequent discussions were
conducted by telephone conference calls, all of which resulted in the Stipulation filed by Idaho
Power in this case.
Under the Peak Rewards Program as it exists, the Company installs timers on a
customer s electrical panel controlling irrigation pumps at the metered service point. The timers
ORDER NO. 30716
are set to interrupt specified irrigation pumps on a designated weekday or days as selected by the
customer. Service is interrupted during the hours of 4 p.m. to 8 p.m. on one, two, or three
regularly scheduled weekdays for each week during the program season.
The Stipulation provides for a new dispatchable interruption option to be added to the
program. Under this option, Idaho Power will dispatch service interruptions remotely to
specified irrigation pumps any weekday during the program season between the hours of 2 p.
and 8 p.m. Service interruptions may last up to 4 hours per day but will not exceed 15 hours per
calendar week or 60 hours per program season. The Company is obligated to provide customers
with notice of pending service interruption by 4 p.m. on the day prior to each service
interruption. First-year participation in the dispatchable interruption option is limited to 1 000
metered service points.
The Stipulation also provides for changes to the incentive fees paid to participating
irrigators. Participating customers will receive a financial incentive in the form of a bill credit
applied to the monthly bills of June and July for each metered service point emolled in the
program. For the dispatchable interruption, customers receive a demand credit of $4.65 per
program kW, and an energy credit of $.031 per program kWh. For the timer interruption option
customers receive a demand credit of $3.15 per program kW for one weekday interruption, and
$4.65 per kW for two or three day interruptions. Energy credits are paid only for two weekday
interruptions ($.002 per program kWh) and three weekday interruptions ($.007 per program
kWh). The Stipulation also allows Idaho Power to charge installation fees depending upon the
size of the irrigation system associated with the participating metered service point.
The testimony in support of the Stipulation demonstrates that the program changes
broaden the availability of the program so that more irrigation customers will have the
opportunity to participate. The current program is available only to customers with irrigation
pumps having a cumulative horsepower rating of 75 or greater. The program as modified will
allow all pump sizes to participate. The changes also reduce the number of weeks over which
the program is available, from the three summer months of June through August to a six-week
period, June 15 through July 31. The time period was shortened because the value of the load
reduction capability of the program is its ability to reduce loads when the demand on the
electrical system is at or near the annual system peak. Idaho Power s witness testified that
currently there is a near zero probability that Idaho Power s electrical system will experience a
ORDER NO. 30716
annual system peak demand outside of the time period of June 15 through July 31." Tatum
Direct, p. 15. Thus, the program season was revised to align with the June 15 through July 31
period.
Idaho Power completed a cost-benefit analysis of the program and estimated a total
benefit/cost ratio of 1.27 for the first year of the program. The Company s analysis estimated a
load reduction of 128 MW and a shifted energy amount of 5 152 800 kWh for the first year of
the program. Using a demand-side management alternative cost of $64.92 per kW per year, and
the 128 MW estimated load reduction, the Company estimated the program will provide an
avoided cost benefit of approximately $8.5 million in its first year.
Based on the record in this case, the Commission approves the Stipulation and the
proposed changes to Idaho Power s Irrigation Peak Rewards Program.By increasing the
availability of the program to more irrigation customers, and creating different interruptible
service options, the program should enhance Idaho Power s ability to reduce load demand during
the summer peak period. The program changes are supported by all who participated in the
workshops, including the irrigation customers who filed testimony in support of the program
changes. On this record, the Commission finds the program changes to be fair and reasonable
and we approve the program changes as set forth in the Stipulation.
ORDER
IT IS HEREBY ORDERED that the Petition of Idaho Power Company for approval
of changes to the Irrigation Peak Rewards Program is approved. The Commission approves the
Stipulation filed with the Company s Petition setting forth the changes to the Peak Rewards
Program.
THIS IS A FINAL ORDER EXCEPT FOR THE ISSUE OF PROGRAM COST
RECOVERY. Any person interested in this Order may petition for reconsideration within
twenty-one (21) days of the service date of this Order. Within seven (7) days after any person
has petitioned for reconsideration, any other person may cross-petition for reconsideration. See
Idaho Code 9 61-626.
ORDER NO. 30716
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this If
'fh
day of January 2009.
ARSHA H. SMITH, COMMISSIONER
121 11 . KEMPTO , C MISSIONER
ATTEST:
~fJ f'~Je D. Jewell
Co mission Secretary
bls/O:IPC-08-23 - ws3 _Program Changes
ORDER NO. 30716