20090514final_order_no_30806.pdf

Office ofthe Secretary
Service Date
May 14 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AUTHORITY TO IMPLEMENT
MODIFICATIONS TO THE PERFORMANCE-
BASED DEMAND-SIDE MANAGEMENT INCENTIVE PILOT PROGRAM
CASE NO. IPC-09-
ORDER NO. 30806
In December 2006, Idaho Power Company filed an application requesting authority to
implement a Perfomiance-Based Demand-Side Management Incentive Pilot program to enable
the Company to retain a portion of the financial benefits resulting from its programs that
encourage customers to conserve energy. In March 2007, the Commission issued Order No.
30268 approving a pilot program to be operational during a three-year period ending December
2009. Under the pilot program, the Company would receive an incentive payment if the market
share of homes constructed under the ENERGY STARCID program exceeded certain levels.
Conversely, the Company could be subject to a penalty if the percentage of new homes that were
built to ENERGY STARCID standards failed to reach specified levels.
On March 11 , 2009, Idaho Power Company filed an Application requesting the
Commission issue an Order to (1) authorize the Company to implement a number of
modifications to the metrics used under the Demand-Side Management (DSM) pilot program to
determine incentive eligibility, (2) approve the Company s determination of its ENERGY
STARCID Homes Northwest market share achievement for 2007 and 2008, (3) authorize the
Company to discontinue the pilot program effective January 1 , 2009, and (4) initiate workshop
proceedings to investigate potential benefits of a properly designed DSM incentive mechanism.
On April 10, 2009, the Commission issued a Notice of Application and Notice of
Modified Procedure establishing a period for interested parties to file written comments
regarding Idaho Power s Application. The Commission Staff filed comments supporting the
Company s Application to approve program modifications and results for 2007 and 2008 , and to
discontinue the pilot program as of January 1 , 2009. Staff did not recommend new workshops to
investigate a performance incentive mechanism for Idaho Power s DSM programs.
Idaho Power s Application describes some of the significant problems in developing
standards to determine whether the Company would earn an incentive payment or would be
ORDER NO. 30806
subject to a penalty. Staffs comments reflect that, after considerable analyses and discussions
Staff and the Company agreed to revised market share determination methodologies, with the
result that the Company neither earned an incentive payment nor incurred a penalty in 2007 and
2008. The Application requests that the metrics used to determine incentive eligibility be
formally approved by the Commission and that we also approve Idaho Power s determination of
its market share of ENERGY STARCID homes for 2007 and 2008. Approval of the modifications
to the metrics affirms the results for 2007 and 2008.
The Commission finds, based on the record in this case, that it is appropriate
approve the changes to the program metrics and the results for 2007 and 2008. It is clear from
the Application and Staffs comments that devising reasonably objective standards to establish
incentives for the DSM programs presents significant challenges. After considerable effort and
two years of the pilot program for only the ENERGY STARCID related program, Idaho Power
achieved neither a payment nor a penalty, and now recommends the pilot be discontinued with
one year left in the program. Given the continuing difficulties in administering this pilot
program, the Commission finds it appropriate to terminate the program effective January 1
2009, with no incentive payments or penalties for 2007 and 2008.
Finally, the Application requests the Commission open a new docket to further
explore development of a DSM performance incentive mechanism. The Commission will not
formally direct new workshops "to investigate the potential benefits of a properly designed
portfolio-based DSM incentive mechanism applied to Idaho Power " as requested in the
Application. However, Idaho Power may continue discussions with Staff and other interested
parties to evaluate the potential for creating an appropriate program.
ORDER
IT IS HEREBY ORDERED that the Application of Idaho Power Company to (1)
authorize the Company to implement a number of modifications to the metrics used under the
Demand-Side Management (DSM) pilot program to determine incentive eligibility, (2) approve
the Company s determination of its ENERGY STARCID Homes Northwest market share
achievement for 2007 and 2008, and (3) authorize the Company to discontinue the pilot program
effective January 1 , 2009, is approved. The pilot program is terminated effective January 1
2009, with no incentive payments or penalties for Idaho Power for 2007 and 2008.
ORDER NO. 30806
THIS IS A FINAL ORDER. 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 ~ 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 1'1 I'll
day of May 2009.
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. KEMPTO , SIDENT
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ARSHA H. SMITH, COMMISSIONER
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MACK A. REDFORD, COMMISSIONER
ATTEST:
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Je .' D. Jewell
mission Secretary
bls/O:1PC-O9-04 ws2
ORDER NO. 30806