20100301Amendment.pdf

BARTON L KLINE
Lead Counsel
eslDA~POR~
An 10ACORP Company
February 26, 2010
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case NO.IPC-E-09-02
EnerNOC
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Idaho Power
Company's Petition for Approval of AmendmenUo Agreementwith EnerNOC in the above
matter.
Also, enclosed in a separate envelope are an original and seven (7) copies of the
confidential documents referenced in the Petition. Please handle the confidential
information in accordance with the Protective Agreement in place in this matter. The
confidential documents have been also been provided to those parties that have executed
the Protective Agreement.
Very truly yours,
ßM/&.
Barton L. Kline
BLK:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, 10 83702
R. r.C"r'I\1"\1_ ,-Jt.",l ;;
BARTON L. KLINE (ISB No. 1526)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: 208-388-6936
bklineCâidahopower.com
InordstromCâidahopower.com
2010 fEB 26 PM 4: I ì
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
APPROVAL OF AN AGREEMENT TO
IMPLEMENT A COMMERCIAL DEMAND
RESPONSE PROGRAM.
)
) CASE NO. IPC-E-09-02
)
) PETITION FOR APPROVAL OF
) AMENDMENT TO AGREEMENT WITH
) ENERNOC
)
COMES NOW, Idaho Power Company ("Idaho Powet' or "Company"), in
accordance with RP 052, hereby requests that the Idaho Public Utilties Commission
("Commission") issue its Order approving an Amendment to the February 23, 2009,
Agreement between Idaho Power and EnerNOC, Inc. ("EnerNOC") under which Idaho
Power provides a commercial demand response program for its commercial and
industrial customers. Idaho Power has identified this demand response program as its
FlexPeak Management Program ("FlexPeak" or "Program").
This Petition is based on the following:
PETITION FOR APPROVAL OF AMENDMENT TO AGREEMENT WITH ENERNOC - 1
I. BACKGROUND
1. On March 2, 2009, the Company filed an Application with the Commission
seeking approval of an Agreement with EnerNOC to implement a voluntary demand
response program for commercial and industrial customers.
2. In Order No. 30805 issued on May 15, 2009, the Commission approved
the EnerNOC Agreement and authorized the Company to implement the voluntary
demand response program for its commercial industrial customers.
3. FlexPeak is a voluntary demand response program targeted to Idaho
Power's industrial and large commercial customers that are capable of reducing their
electrical energy loads for short periods during summer peak days. The FlexPeak
Program objective is to reduce the demand on Idaho Powets system during peak times
through customers' voluntary electrical use reduction. EnerNOC is responsible for
developing and implementing all marketing plans, securing all participants, installng
and maintaining all equipment behind Idaho Powets meter to reduce demand, tracking
participation, and reporting results to Idaho Power. Idaho Power initiates demand
response events by notifying EnerNOC, who then supplies the requested load reduction
to the Idaho Power system.
4. During 2009, the first customers enrolled in the Program in May and
EnerNOC committed to an initial reduction amount of 0.30 megawatts by the second
week in June. The target reduction for the season was 2 megawatts. By the end of the
season, EnerNOC had enrolled 22 participants across 33 facilty sites and had
committed to a maximum weekly reduction of 15.2 megawatts. In July, participants
PETITION FOR APPROVAL OF AMENDMENT TO AGREEMENT WITH ENERNOC - 2
achieved an actual reduction of 17.1 megawatts, surpassing the Program target
reduction by more than 8 times.
5. Contemporaneous with this Petition, Idaho Power has filed with the
Commission a preliminary report of the performance of the FlexPeak Management
Program during 2009. For the Commission's convenience, a copy of that preliminary
report is enclosed with this Petition as Attachment NO.1.
6. The FlexPeak preliminary report shows that the FlexPeak Management
Program was successful in achieving its goal of acquiring peak demand reduction at
critical times during the Company's summer peak load period.
7. During the operation of the FlexPeak Program during the summer of 2009,
it also became apparent to Idaho Power and EnerNOC that there were some areas of
the February 23, 2009, Agreement between the two parties ("Agreement") that needed
additional clarification in order to accurately reflect the parties' mutual understanding of
their respective obligations under the Agreement. As a result of these discussions,
Idaho Power and EnerNOC have agreed to amend the Agreement. Because EnerNOC
has represented to the Company that both the original Agreement and the amendment
to the Agreement contain information that is valuable, proprietary information, the
amendment is being provided to the Commission under separate cover in accordance
with the Commission's rules on the handling of confidential information. Idaho Power
has executed and transmitted to the Commission Staff and the Industrial Customers of
Idaho Power the standard protective agreement, which, after execution, wil enable
them to review the amendment. Idaho Power wil also include with the amendment, an
explanation of the amendments. Because this explanation document discusses
PETITION FOR APPROVAL OF AMENDMENT TO AGREEMENT WITH ENERNOC - 3
confidential information, it is also being supplied in a separate envelope consistent with
the Commission's rules on submittal of confidential information.
II. MODIFIED PROCEDURE
8. Idaho Power believes that a hearing is not necessary to consider the
amendment presented herein and respectfully requests that this Petition be processed
under modified procedure, Le., by written submissions rather than by hearing. RP 201,
et seq. If, however, the Commission determines that a technical hearing is required, the
Company stands ready to present its testimony in support of the Application in such
hearing.
II. COMMUNICATIONS AND SERVICE OF PLEADINGS
9. Communication and service of pleadings with reference to this Petition
should be sent to the following:
Barton L. Kline
Lisa D. Nordstrom
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
bklineCâidahopower.com
InordstromCâidahopower.com
Darlene Nemnich
Senior Pricing Analyst
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
dnemnichCâidahopower.com
IV. REQUEST FOR RELIEF
10. Idaho Power respectfully requests that the Commission issue its Order (1)
authorizing that this matter be processed by modified procedure and (2) approving the
amendment between Idaho Power and EnerNOC without change or condition.
Respectfully submitted this 26th day of February 2010.
~~BARON
Attorney for Idaho Power Company
PETITION FOR APPROVAL OF AMENDMENT TO AGREEMENT WITH ENERNOC - 4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 26th day of February 2010 I served a true and
correct copy of the PETITION FOR APPROVAL OF AMENDMENT TO AGREEMENT
WITH ENERNOC upon the following named parties by the method indicated below, and
addressed to the following:
Commission Staff
Neil Price
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
.- Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
.- Email Neil.priceCâpuc.idaho.gov
Industrial Customers of Idaho Power
Peter J. Richardson, Esq.
RICHARDSON & O'LEARY PLLC
515 North 27th Street
P.O. Box 7218
Boise, Idaho 83702
Hand Delivered
.- U.S. Mail
_ Overnight Mail
FAX
.- Email peterCârichardsonandolearv.com
~~
PETITION FOR APPROVAL OF AMENDMENT TO AGREEMENT WITH ENERNOC - 5
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-09-02
IDAHO POWER COMPANY
ATTACHMENT NO.1
IDAPCe
AnIPOl CøP!V
:+.i~c-- Ë - 0 Cf -0'2
FlexPeak Management
2009 Preliminary Report
February 24, 2010
Idaho Power
Table of Contents
Program Summar ........... ............... .... .... ......... ...... ....... ... ....... .... ........ ........ ...... ... ................................ ..3
2009 Demand Reduction Event Results................................................................................................4
Marketing and Public Relations.............................................................................................................4
Customer Recruitment ...........................................................................................................................5
Metering.................................................................................................................................................6
Event Intiation...................................................................................................................... .................7
Event Monitorig....................................................................................................................... ............7
Customer Satisfaction. ........... ............................................ .................. ..... .... ............ ............ ... ..............9
Payment Reconciliation .......................................................................................................................1 0
Cost-Effectiveness ...............................................................................................................................11
Conclusion................................................... ........ ............................................................................... .12
FlexPeak Management 2009 Preliminary Report Page 2
Idaho Power
Program Summary
FlexPeak Management is a voluntary demand response program targeting Idaho Power's industral and
large commercial customers that are capable of reducing their electrical energy loads for short periods
during summer peak days. The program became available to the company's Idaho customers in May
2009. The program objective is to reduce the demand on Idaho Power's system durg peak times
through customers' voluntar electrical use reduction. The program is active June 1 to August 3l,
between the hours of2:00 p.m. to 8:00 p.m. on non-holiday weekdays. Customers receive notification of
a demand reduction event two hours prior to the star of the event, and events wil last anywhere
between two to four hours, with a maximum of 60 hours per season.
In November 2008, Idaho Power selected EnerNOC, Inc. through a competitive Request for Proposal
(RFP) process, to implement the program. Idaho Power entered into a five-year agreement with
EnerNOC in Februar 2009, pending the Idaho Public Utilities Commission (IPUC) approval. In May
2009, the IPUC approved the contract in Order No. 30805 and requested that Idaho Power submit a
preliminar report.
EnerNOC is responsible for developing and implementing all marketing plan, securng all paricipants,
installng and maintainng all equipment behind Idaho Power's meter used to reduce demand, tracking
paricipation, and reporting results to Idaho Power. Idaho Power initiates demand response events by
notifyig EnerNOC, who then supplies the requested load reduction to the Idaho Power system.
EnerNOC meets with prospective customers to identify their potential to reduce electrcal energy load
durng active program hours without negative impact to their business operations. Customers enroll in
the program by entering into a contract with EnerNOC. EnerNOC then .installs energy monitorig
equipment at the customer site, simulates a demand response event to ensure customer satisfaction and
performance, and offcially enrolls the facility in the program.
Contractually, EnerNOC has agreed to a target anual demand reduction amount for the five year
contract lengt. Each week, EnerNOC commts a demand reduction level in megawatts (MWs) to Idaho
Power that EnerNOC is obligated to meet in a demand reduction event. When Idaho Power anticipates
the need for capacity, it schedules the date and time of the event and notifies EnerNOC.
Idaho Power has access to an EnerNOC web site that shows near real-time energy usage data of the
aggregated load, and can continually monitor the success of the demand reduction event. Customers can
also continuously monitor their demand reduction performance using their individual near real-time
energy usage data available to them through the EnerNOC web site.
FlexPeak Management 2009 Preliminary Report Page 3
Idaho Power
2009 Demand Reduction Event Results
Durg 2009, the first customers enrolled in the program in May and EnerNOC commtted their initial
reduction amount of 0.30 MW to Idaho Power by the second week of June. The target reduction for the
season was 2 MW. By the end of the season, EnerNOC had enrolled 22 participants across 33 facility
sites and had committed to a maximum weekly reduction of 15.2 MW. In July, paricipants achieved an
actual reduction of 17.1 MW, surassing the program target reduction by more than eight times.
Idaho Power initiated eight demand response events in July. In each case EnerNOC exceeded the
committed MW reduction by the percentages shown in the table below.
FlexPeak 2009
Demand Reduction Percent Performances
173%
l!
~
1st 2nd 3rd 4th 5th 6th 7th 8th
Event
il Committed Capacity (MW) II Avg Actual Reduction IMW)
Marketing and Public Relations
EnerNOC was responsible for the development of all marketing collateraL. Idaho Power worked with
EnerNOC to co-brand marketing materials, and reviewed and edited materials such as a "Frequently
Asked Questions" Sheet and press releases. Idaho Power continues to work with EnerNOC on the
development of a Utility Case Study, which wil discuss the program development and rapid ramp-up
process.
FlexPeak Management 2009 Preliminary Report Page 4
Idaho Power
Customer Recruitment
EnerNOC began the recruitment process by engaging customers with a demand of 500 kW and above.
Idaho Power Customer Representatives contacted most of these customers prior to contact from
EnerNOC in order to inform them of the program. EnerNOC employees reached out to customers first
by phone, and then set up on-site meetings to determine a customer's potential for demand reduction.
Idaho Power Customer Representatives often attended the on-site meetings.
EnerNOC worked with each paricipant to develop a demand reduction plan that could be implemented
at the site without negatively impacting the parcipant's business. Customers then were invited to sign
a contract with EnerNOC to enroll in the program.
A breakdown of MW reduction commtted by customer segment for 2009 is shown below.
FlexPeak 2009
Committed MW Reduction by Customer Segment
Primary/Secondary
School
1%
Water & Wastewater
Treatment Faclity
2%
CompostingRecyding
aste Removal
2%
College/universty
Other Ught Industial 4%
4%
FlexPeak Management 2009 Preliminary Report Page 5
Idaho Power
Metering
Once customers enrolled in the program by signg a contract with EnerNOC, EnerNOC submitted
requests to Idaho Power to enable the customers' electrc meters to transmit KYZ-pulse outputs. Some
customer's meters were already enabled for pulse outputs. For each customer not receiving pulse
outputs, Idaho Power meterig techncians enabled the meters to transmit these outputs, and EnerNOC
reimbursed Idaho Power for the associated costs. EnerNOC then intalled monitoring equipment to
obtain and transmit the pulse output to their servers. By using EnerNOC's proprietar softare,
PowerTrak, customers could then monitor their near real-time energy use on a continual basis. Below
are examples of information paricipants can access at all times though the EnerNOC web site using
their unque login and password. In these examples the reduction in energy use occurs on a Satuday
and Sunday.
FlexPeak Management 2009 Preliminary Report Page 6
Idaho Power
Event Initiation
Idaho Power's Power Supply group monitored system demand forecasts and evaluated up to date
conditions in order to determine when demand reduction events would be initiated to reduce an expected
peak on the system. Idaho Power sent e-mails to EnerNOC to intiate each event, and EnernOC in
tu, notified customers two hours prior to the event. In 2009, all of the demand reduction was achieved
manually by the paricipants at their sites, with EnerNOC retaining no automatic control of the reduction
processes.
Idaho Power initiated a test event on July 7, 2009 in order to test the dispatch process and monitoring
capabilties. To the paricipants, ths event was treated as a normal demand reduction event. The next
seven events in July were initiated in response to system demand needs.
Event Monitoring
EnerNOC submitted weekly reduction commitments to Idaho Power by the Friday proceeding the event
week. Durig each event, paricipants had access to near real-time electrc use data, which displayed
their baselines and reduction commitments through EnerNOC's web site. Below is an example of what
a customer might see during a demand reduction event.
FlexPeak Management 2009 Preliminary Report Page 7
Idaho Power
During each event Idaho Power had access to aggregate performance as shown below. The graph
displays the current near real-time event performance, as well as the average performance thoughout
the event.
FlexPeak Management 2009 Preliminary Report Page 8
Idaho Power
Customer Satisfaction
EnerNOC conducted a post-event customer satisfaction surey after the July 7th test event, and while
only a few customers were enrolled in the program at that time, results were positive. Six customers
were enrolled across 10 sites for this event. Of the 19 contacts made, 4 responded to the survey, for a
response rate of21 %. On a scale of 1 to 10, 10 being the most prepared, the average level of
preparedness was 8.5. On a scale of 1 to 10, 10 being the most satisfied, the average level of overall
satisfaction was 8.5. On a scale of 1 to 10, 10 being the most likely to recommend, all four customers
were at a 10. Results are shown below.
Post-Event Survey Results
July 7, 2009 Event
10
7
il Overall Satisfction
il likely to Recommend
Ii Level of preparation
9
8
6
5
3
2
1
o
Customer "A"Customer "8"Customer "C"Customer "0"
Three of the four customers said the level of diffculty in the reduction plan was about what they
expected, and the fourh said it was easier than expected. One general comment was submitted,
requesting more advanced notice.
EnerNOC plans to conduct a 2009 post-season surey with the first quarer of 2010. Results of the
survey wil be made available to Idaho Power.
All 22 customers who enrolled and paricipated in the 2009 season are enrolled to paricipate in 2010.
FlexPeak Management 2009 Preliminary Report Page 9
Idaho Power
Payment Reconcilation
EnerNOC invoiced Idaho Power on a monthy basis. Invoices consist of both a capacity payment
component, based on the amount of reduction available durig active program times, and an energy
payment component, based on measured reductions durng each event. In June and August, there were
no demand reduction events, so charges were based on a simple capacity payment calculation using
EnerNOC weekly reduction commtments. Durig the month of July, in which eight demand reduction
events were called, biled amounts had an energy component and a capacity component which were both
based on actual paricipant reductions.
The overall demand reduction was determed by totaling the demand reduction of each paricipating
facility. The demand reduction of each parcipating facility was determined by subtracting their actual
use from a calculated baseline. The baseline in a demand reduction program is used to measure
response and establish appropriate compensation for program participants. It estimates what would have
happened on an event day, absent the demand reduction event, which then allows Idaho Power to
determine how much load was reduced as a result of the program. Specifically, a baseline is calculated
by selecting the three highest load days of the preceding ten non-event business days. A "day-of-
adjustment" is then applied to the baseline to shift or scale the baseline based on electrcity usage in the
hours prior to an event so that electrcity usage predicted by the baseline most closely matches actual
electrcity usage on the day of an event (absent any demand reduction progr response). These
adjustments are used to account for the impact that temperatue has on a paricipant's expected load.
Without ths adjustment, the baseline could underestimate expected electricity usage on the event day.
EnerNOC provided customer baseline and reduction data to Idaho Power with the July invoice, and
Idaho Power worked in parallel, using the actual five minute interval data received from EnerNOC to
determine baselines and reductions independently. Where there were discrepancies, the two companes
worked together to determne the cause and correct any mistakes. Discrepancies were due to a
misinterpretation of the day-of-adjustment calculation and a misunderstanding as to whether or not past
event days would be included in the baseline. At the end of the reconcilation process, both companes
agreed upon the individual reductions and composite reductions for each event.
FlexPeak Management 2009 Preliminary Report Page 10
Idaho Power
Cost..Effectiveness
In the intial cost-effectiveness analysis, Idaho Power estimated that the commercial demand response
program would be cost-effective, both from the Utility Cost (UC) and Total Resource Cost (TRC)
perspectives, beginng in year two (2010). Year one of the program was viewed as a ramp up year. It
was projected that the TRC benefit-cost (b/c) ratio in year one would fall below 1.0, but that building the
program foundation would contrbute to a cost-effective program in ensuing years.
EnerNOC's initial goal was to achieve 2 MW of demand reduction, and the cost-effectiveness analysis
indicated that under normal circumstances the program must reach 15 MW for the value in demand
savings to be greater than program costs and for the program to be cost-effective.
However, after determing actual expenses and MW demand reductions achieved in 2009, the program
was cost-effective in its first year. Lower expenses and higher demand reduction contrbuted to the
program's cost-effectiveness in year one. Following are some of the reasons:
. Program adminstration costs were one-thd of what was originally projected.
· Despite the late star, EnerNOC experienced a higher paricipation rate than what was origially
expected. Ths resulted in higher demand reductions than were assumed in the original cost-
effectiveness analysis.
. Most notably, the assumption in the cost-effectiveness analysis was that EnerNOC would
achieve the exact MW demand reduction they committed to provide to Idaho Power. In
actuality, EnerNOC achieved a much greater reduction than the committed MW reduction.
The actual TRC b/c ratio in 2009 was 1.60, and not the 0.5l originally predicted, as shown below.
2009Fl P kM C Effexeaanaf!ement ost ectiveness
MW Reduction TRC Ratio
Projected 2 0.51
Actual l1.l 1.60
The actual cost of the program in 2009 was $528,681. In the remaining years of the contract, the
program is expected to be cost-effective with a projected contract life b/c ratio of 1.11 from the TRC
perspective.
FlexPeak Management 2009 Preliminary Report Page 11
Idaho Power
Conclusion
Given the speed with which FlexPeak Management was implemented and given demand reduction
results that far exceeded expectations, Idaho Power considers 2009 to be an extremely successful year.
Not only was the company able to offer customers a quality program with multiple benefits, but
FlexPeak Management's contribution to Idaho Power's system peak reduction was more than eight
times the original forecast capacity of the program. Going forward, Idaho Power wil continue to
evaluate the best use of the program in order to meet the program objectives. Results wil be reported
anually in the Demand Side Management Anual Report.
FlexPeak Management 2009 Preliminary Report Page 12