20090413Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
ISB NO. 6864
RE~:Et\/
2009 APR 13 ~M 10: 30
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
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. )
)
CASE NO. IPC-E-09-02
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of
record, Neil Price, Deputy Attorney General, in response to the Notice of Application and Notice
of Modified Procedure issued in Order No. 30755 submit the following comments.
BACKGROUND
The Idaho Public Utilties Commission ("I PUC") received an Application from Idaho
Power Company ("Idaho Power" or "Company") on March 2, 2009 seeking approval of an
agreement with EnerNOC ("EnerNOC") to implement a voluntary demand response program
("Program") for its commercial and industrial customers. The term of this agreement began on
Februar 23, 2009 and extends five yearsfr~m that date. However, the agreement is contingent
upon Commission approval without material change or condition. The anticipated total cost of
STAFF COMMENTS 1 APRIL 13, 2009
the Program is approximately $12.2 milion over the life of the contract, varing from
approximately $315,000 in the first year of the Program to approximately $3.5 milion in its final
year. Idaho Power estimates that 85 percent of Program costs will result from Capacity Payments
to EnerNOC, 6 percent from Energy Payments to EnerNOC, and 9 percent from Idaho Power
administrative costs. The Program was reviewed with Idaho Power's Energy Efficiency
Advisory Group ("EEAG") at its October 2008 meeting and presented in Februar 2008 to a
meeting of the Industrial Customers.
PROPOSAL
Through a competitive Request for Proposals (RFP) process, Idaho Power selected
EnerNOC for a five-year contractual term to implement the voluntary commercial and industrial
Program. EnerNOC is a company that Idaho Power says has successfully implemented similar
programs for other utilities throughout the country. EnerNOC is responsible for developing and
implementing all marketing plans, securing all paricipants, installng and maintaining all
equipment downstream of the meter used to reduce demand, tracking paricipation, and reporting
results to Idaho Power. EnerNOC wil target Idaho Power's commercial and industrial
customers that are wiling and able to contractually agree to reduce their electrical energy loads
when they are called upon to do so for short periods (two to four hours) during summer peak
load. EnerNOC will determine what number of customers to taget within each customer class
(Primary, Secondar, and Transmission) that wil provide Idaho Power with the contracted
amount of demand reduction. The Program is available to Schedule 9, Schedule 19, and Special
Contract customers with at least 200 kW of average summer biling demand. EnerNOC wil
make incentive payments to Program paricipants based on the reduction in demand each
customer commits to provide to the Idaho Power system. In exchange for EnerNOC faciltating
Idaho Power's request for load reduction on a firm basis during the summer peak months, Idaho
Power will pay a capacity payment at a predetermined price to EnerNOC for the anual number
of specified megawatts. The capacity payment is not dependent on the number of events or the
number of total event hours called. However, the variable energy payment to EnerNOC is based
on the number of events called per season and the length of the event periods.
Depending on existing customer metering, EnerNOC wil notify Idaho Power when
customers sign up for the program but do not have a pulse initiated meter device. Once Idaho
STAFF COMMENTS 2 APRIL 13, 2009
Power receives this notice, it wil install the data pulse equipment that is necessar for Idaho
Power and EnerNOC to monitor customers load. The data pulse equipment installation requires
two key components, one of which is the pulse output board which may not need to be installed
depending on whether the customer has already requested the device from Idaho Power. The
other is the weatherization box that houses the contacts for connection to the EnerNOC
equipment. The pulse output board wil transmit a signal to EnerNOC, allowing the Company
and its customers to access a password protected web-based EnerNOC portal which displays
real-time and historical information on energy use and demand reductions.
The cost of the pulse output board is expected to be about $50 dollars and the cost of the
weatherization box is expected to be about $13 dollars. The customers paricipating in the
program wil all need the weatherization box, however since several of the large industrial
customers have already requested the pulse output board device for managing their internal real
time usage through the portal, this device may not be necessary. Idaho Power estimates that
about 20% of program participants wil need pulse initiated devices installed for the 2009
sumer. As the program matures it is estimated that no more than 50%-60% of program
participants wil need pulse initiated devices by the final year. Since most of the labor is travel
time, Idaho Power anticipates the labor costs to be about the same regardless of whether it is
installng the pulse-output board and the weatherization box, or just the weatherization box.
Idaho Power has estimated its total labor time to take no longer than about 4 hours at an
estimated cost of $237 dollars regardless of whether the pulse output board is being installed or
both the pulse output board and weatherization box. EnerNOC will reimburse Idaho Power for
all the costs associated with the pulse initiated metering device and installation. However if
material and labor costs are estimated to be more than $300 dollars per site, Idaho Power wil
notify EnerNOC in advance for their approval prior to any work being completed.
Idaho Power wil have the abilty between the hours of2:00 p.m. and 8:00 p.m. of any
non-holiday weekday between June 1 and August 31 of each program year/season, to initiate a
"program event", for which EnerNOC wil reduce customer energy use by the agreed upon
amount. The agreement allows Idaho Power to require demand reduction up to sixty hours per
season with up to twenty events per season. Idaho Power's dispatchers and response specialists
will work together to determine the "qualifying factors" and parameters for callng a demand
response event. Idaho Power wil ensure that each of its three demand response programs
STAFF COMMENTS 3 APRIL 13, 2009
(commercial, irrigation, and residential AC) are being called in order of timing and duration that
provides the most benefit from each program, as well as to the Company and its customers. As
designed, the Program puts the responsibility for successfully acquiring energy savings on
EnerNOC, similar to Idaho Power making arangements to purchase peak day power on the
market from a third party. EnerNOC guarantees the delivery of a certain amount of demand
reduction to Idaho Power and wil pay liquidated damages under the terms of the five-year
agreement if committed levels of performance are not achieved. The targets for demand
reduction for each year of the contract term are 2 MW in 2009,30 MW in 2010,40 MW in 2011,
50 MW in 2012, and 50 MW in 2013. However, the 2 MW target demand reduction for 2009
assumes a Program implementation by April 2009.
Idaho Power plans to conduct interim individual post-event evaluations, as well as long-
term full impact and process evaluations once the Program has reached maturity. For individual
events, Idaho Power's energy effciency analysts and evaluators wil reconcile individual event
data with reported results from EnerNOC using 15 minute interval data for the duration of each
Program event and for each individual customer to ensure each event is performing as reported.
In addition to internal evaluations, Idaho Power plans to utilize a third-part to conduct impact
and process evaluations regarding Program delivery, customer satisfaction, trued-up Program
savings, and overall Program success following the summer immediately following the first
summer of full Program maturity, expected to be in 2011. Idaho Power is committed to the full
five-year contract term, therefore if at any time the Program is found to be unsuccessful and/or
not cost effective, Idaho Power and EnerNOC must work together to make any Program changes
necessary for Program success through the remaining length of the five-year contract.
SUMMARY
Idaho Power appears to have reasonably evaluated the benefits and costs of this Program.
In paricular, the Company's Application and responses to production requests include the:
1) programs projected cost effectiveness between .51 in the first year to 1.12 in the final year;
2) reasoning for the selection of EnerNOC in the RFP process; 3) rationale for negotiating the
number of events and event durations specified in the contract; 4) plan for managing the
contractual number of events and event durations and how other demand response programs wil
STAFF COMMENTS 4 APRIL 13, 2009
be integrated; 5) approximation of 'snapback'
I; 6) anticipated maximum number of additional
meters and costs of meters for 2009; and 7) description of how it will conduct post
implementation evaluations and confirm demand savings. As with all the demand side
management programs, Staff wil fully review the prudency of the Program after the Company
has implemented and at least preliminarily evaluated this Program.
RECOMMENDATIONS
Staff recommends that the Commission approve the agreement between Idaho Power and
EnerNOC to implement a commercial demand response program.
Respectfully submitted this \~day of April 2008.
ì'- ~ ~.tJX..,.~
Neil Price
Deputy Attorney General
Technical Staff: Matt Elam
Lynn Anderson
i:umisc:commentsipce09. I npmela,doc
i Shifted energy following a demand response event due to the catch up effect of cooling loads or industral
processes.
STAFF COMMENTS 5 APRIL 13,2009
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HA VE THIS 13TH DAY OF APRIL 2009,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC-E-09-2, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
BARTON L KLINE
LISA D NORDSTROM
IDAHO POWER COMPANY
POBOX 70
BOISE ID 83707-0070
E-MAIL: bkline(fidahopower.com
lnordstrom(fidahopower. com
JOHN R GALE
VICE PRESIDENT, REG. AFFAIRS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: rgale(fidahopower.com
~SECRETAR
CERTIFICATE OF SERVICE