20100602final_order_no_31098.pdf

Office of the Secretary
Service Date
June 2, 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
APPROVAL OF ITS AGREEMENT WITH
ENERNOC TO IMPLEMENT AND
OPERATE A VOLUNTARY COMMERCIAL
DEMAND RESPONSE PROGRAM
ORDER NO. 31098
CASE NO. IPC-09-
On March 2, 2009, Idaho Power Company ("Idaho Power" or "Company ) filed an
Application with the Commission seeking approval of an Agreement with EnerNOC
EnerNOC") to implement a voluntary demand response program for its commercial and
industrial customers ("Program
On May 15, 2009, the Commission approved the Agreement between Idaho Power
and EnerNOc. See Order No. 30805.
On February 26, 2010, the Company filed a Petition requesting the Commission
approve an Amendment to the February 23 , 2009, Agreement between Idaho Power and
EnerNOc.
THE PETITION
In Order No. 30805, the Commission approved the EnerNOC Agreement and
authorized the Company to implement the voluntary demand response program for its
commercial industrial customers.
In the Petition, the demand response program is referred to as the "FlexPeak
Management Program." It is a voluntary 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 objective of the program is to reduce the demand on Idaho
Power s system during peak times through customers' voluntary electrical use reduction. Under
the terms of the Agreement, EnerNOC is responsible for developing and implementing all
marketing plans, securing all participants, installing and maintaining all equipment behind Idaho
Power s 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.
ORDER NO. 31098
In this Petition, the Company requested four amendments to the original language of
the Agreement with EnerNOC. The proposed amendments include, primarily:
(1) Clarifying the conditions under which Idaho Power shall be charged
energy payments" during demand reduction events;
(2) Adjusting the calculation ofthe "Day-of-Load Adjustment"
(3) Decreasing the penalty EnerNOC incurs for failing to commit to a demand
reduction; and
(4) The addition of a non-solicitation clause.
STAFF REVIEW AND RECOMMENDATION
Staff reviewed the Company s Petition to amend its Agreement with EnerNOC and
stated that it understands why there are changes following the first season of implementation.
Staff noted that the Third Amendment was initiated because the original contract significantly
inflates a capacity penalty EnerNOC must pay for falling short of its nominated reduction to
Idaho Power. However, Staff acknowledged that EnerNOC and Idaho Power are two
sophisticated parties whose intent regarding potential penalties may not have been specifically
achieved within the terms of the original Agreement. Aside from reviewing the changes outlined
in the Company s Petition, Staff also noted the original Agreement did not adjust the Facility
Baseline Usage downward when calculating the "Day-of-Load Adjustment" program savings.
This may have caused those savings to be slightly overstated.
According to the Company, a preliminary evaluation of the program revealed results
which have exceeded original expectations. Staff will review the results of the program when
the Company completes a full program impact evaluation in 20 II.
After a thorough review of the Company s proposal , Staff recommended that Idaho
Power s Petition to amend its Agreement with EnerNOC be approved. Nevertheless, Staff
stressed that its recommendation should not be interpreted as an opinion or judgment regarding
the ultimate prudency or savings of the program.
COMMISSION DECISION AND FINDINGS
The Commission has reviewed and considered Idaho Power s Petition to amend its
Agreement with EnerNOC and Staffs comments. The Commission has reviewed Idaho Power
ORDER NO. 31098
preliminary program report and is encouraged by the initial results revealing significant
voluntary load reductions from Idaho Power s industrial customers.
We find the amendments to the Agreement between Idaho Power and EnerNOC
approved by the Commission in Order No. 30805, to be reasonable. The Commission notes that
the proposed amendments were mutually agreed upon and resulted from voluntary negotiations
between the parties.
Idaho Power s Application for approval of the amendments to its Agreement with
EnerNOC does not include a request for a determination as to the overall prudency of the
FlexPeak Management Program. Thus, the Commission will consider the prudency of the
program in another context.The Commission s decision in this case to permit certain
amendments to the parties' original Agreement should not be interpreted as an endorsement of
the specific expenditures or the overall prudency of the program.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Idaho Power, an electric
utility, and the issues presented in this matter pursuant to its authority under Title 61 of the Idaho
Code, and the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that Idaho Power Company s Petition for Approval of
Amendment to Agreement with EnerNOC is granted.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) may petition for reconsideration within twenty-one (21) days of the
service date of this Order with regard to any matter decided in this Order. Within seven (7) days
after any person has petitioned for reconsideration any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 31098
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this .;LA
day of June 2010.
ell ~~D. KEMPTON, RESIDENT
~'"
MARSHA H. SMITH, COMMISSIONER
ATTEST:
~JI ~YJ!
D. Jewel
Commission Secretary
O:IPC-09-np3
ORDER NO. 31098