20090508ICL-SRA Comments.pdf

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May 7, 2009
Idao Public Utilties Commission
PO Box 83720
Boise, ID 83720-0074
2009 ~i.&Y -7 P~1 2: 46
RE: Idao Conservation League and Snake Rive Alance Comments on Idao Power's
Application for Authority to Implement Fixed Cost Adjustment (((FCA") Rates for
Electric Service from June 1, 2009, though May 31, 2010, Ca No. IPC-E-09-06.
The Honorable Commissioners:
Thank you for the opportunity to comment on Idao Power's ("Company") application
for the authority to implement Fixed Cost Adjustment ("FCA") rates. The Idao
Conservtion League ("ICL") and Snake Rive Allance ("SRA") ure the Idaho Public
Utilty Commissioners ("Commission") to grt Idao Power the authority to implement
FCA rates for electric servce from June 1,2009 through May 31,2010. For thirt-four
year, ICL has been Idaho's voice for clean water, clean ai, and widernessvaues that are
the foundation to Idaho's extraordiar quaity of life. The Idao Conservtion League
works to protect these vaues thrug citizen action, public education, and professional
advocacy. As Idao's larest state-based conservtion orgiztion we represent over 9,500
members, many of whom have a deep personal interest in protecting our clea ai, clean
water, and quaity of life. The The Snake River Allance is an Idao-basd non -profit
organization, established in 1979 to addres Idaoans' concerns about nuclear saety issues.
In early 2007, the Aliance expanded the scope of its mission by launchg its Clean
Energy Progr. The Allance's energ initiative includes advocacy for renewable energ
resources in Idaho; as well as expanded conservtion and demand-side management
progrs offered by Idao's reguated utilties and the Bonneve Power Administration;
and development of loca, state, regional, and national initiatives to advace sustaiable
energ policies.
Energ effciency is the fastest, cheapest, and cleanest solution to Idao's growig energy
needs. Historicay, electric utilty rate design in Idao has created a financial baer for
utilties to implement aggessive efficiency progrs becaus utilties recover their fixed
costs through each kiowatt-hour sold Therefore, efficiency progrs could prevent
utilties from recouping their fixed costs by reducing their saes volume and discourge
them from of(erig energ-savig measures. In order to end the detrimental connection
between Idao Power's financial health and increass in its retai energ saes, the
Commission in IPC-E-04-15 in 2007 approved the implementation of a thre-year Fixed
Cost Adjustment pilot program in Order No. 30267. The FCA alows Ida Power to
separate collection of its fixed costs from its energy sales. Under the FCA, rates are
adjusted annuay up or down to recover the difference between the fixed costs authoried
by the Commission in Idao Power's most recent genera rate ca and the fixed coss that
the Company actuay received throug energy saes durg the previous year. Th
mechanism protects the Compay from financial har when its energ saes decreas.
As Commissioners are aware, the Idao Energ Plan of 2007 identifes energ efficiency
and conservtion as the preferred electrica energ resource in Idao: ((... The Committee
establishes conservation, energ effciency and demand response as the highest-priority
resource for Idao, and local renewable resources as the second-highest priority.. .."
In addition, in response to a request from Gov. Butch Otter, the Commission joined
Office of Energ Resources Director Paul Kjellander in a March 2 letter affirming the
Commission's commitment to energy effciency, includig the promotion of decoupling
mechanisms: "The Idao PUC has already taken significant steps through its decoupling
mechanism for electric utiltlies to reduce the perceived disincentives asociated with
utilty-based energ effciency progrs. Idao Power Company's Fixed Cost Adjustment,
curently in the pilot phas, allows both timely cost recovery and a timely earing
opportunity." Followig on that letter and in response to requiements for Idao to
receive federal stimulus funds under the America Recovery and Renewal Act, Gov. Otter
on March 19 wrote U.S. Energy Secretary Steven Chu to asure DOE that, "I have wrtten
to our Public Utilty Commission and requested that they continue their successful
decoupling efforts and consider additional actions to promote energ effciency,
consistent with the Federa statutory languge contained in H.R. 1 and their obligations to
maitain just and reasonable rates, whie protecting the public."
In the Commission's own words, "(p)romotion of cost-effective energ effciency and
demand-side management (DSM), we find, is an integr par of leas-cost electric servce.
. . Makg the company indifferent to reduced energ consumption and demand is but
one half of the quid pro quo agreed to by the stipulating paries. In retur for the FCA, the
Company is expected to demonstrate an enhanced commitment to energ efficiency and
DSM. Evidence of enhanced commitment wi include, but not be liited to, . . . efforts
to improve and enforce state buidig codes and appliance effciency standads, as well as
expansions and improvements to its load efficiency, load management and DSM
programs. "1
ICL and SRA believe approva of the request before it in this docket is consisent with state
energy policy as ariculated by the 2007 Idaho Energ Plan, the governor, and the
Commission. We also believe that a successful completion of this Fixed Cost Adjustment
pilot project should result in a permanent decoupling mechanism for Idao Power and
also Commission diection that Avista and Rocky Mountai Power initiate similar
progrs to comport with Idao's policy supporting electric decoupling.
ICL and SRA commend Idao Power on its increase in efficiency and DSM progrs. The
Company has exceeded its energ efficiency goals and expectations, which demonstrates
the great potential for efficiency and DSM progrs. ICL and SRA support the
Company's abilty to recover its fixed costs, but the Compay ca do more. . We sugest
the Commision solicit information from the Company to demonstrate how it ha
encourged improvements in buiding codes and appliance standads, as recommended in
the Idao Energ Plan. In addition, we believe a combined effort by the Commission,
Idao's reguated utilties, and other stakeholders ca lead to effective appliance efficiency
standards - which are long overdue - as well as stronger buidig codes. As the Commision
is aware in its work with the Northwest Power and Conservtion Council as it preares its
Sixth Power Plan, utilties in Idao and al of the Northwest ca and should seize new
opportunities to capture all cost-effective energ effciency opprtunities.
If Idao Power and other reguated utilties are to achieve greenhous gareduction
1 Idaho Public Utiities Commission, Ca No. IPC-E-06-32, Order No. 30267, pp. 13-14.
requiements that are certai to come in the near future, they are obligated to not only
incorporate new renewable energ resources but also to redouble the conservtion and
effciency efforts that the Fixed Cost Adjustment mechanism promotes.Thank you for the
opportunity to comment on Idao Power's application to implement FCA rates. The
need to reduce greenhous ga emissions, impendig federa reguation, and rising fuel
costs make efficiency and DSM programs even more crucial to providig the least-cost
electric servce. Please grt the Company the authority to implement FCA rates for
electric servce but also requie a renewed commitment to effciency progrs, DSM, and
a sustaiable energy policy. If you have questions about our interes in this matter, pleas
contact Betsy Bridge at 208-345-6933 ex. 12 or Ken Miler at [phone].
Sincerely,n...~
:t~~Jl /
Idao Conservtion League
Ken Miler
Snake River Allance