20100126Motion to Approve Stipulation.pdf

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LISA D. NORDSTROM
Senior Counsel
Inordstromtmidahopower.com
An IDACORP Company
January 25, 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-09-09
IN THE MA ITER OF THE APPLICATION OF IDAHO POWER COMPANY
FOR A PRUDENCY DETERMINA TlON OF ENERGY EFFICIENCY RIDER
FUNDS SPENT IN 2002-2007
Dear Ms. Jewell:
Enclosed please find for filing an original and seven (7) copies each of Idaho
Power's Motion to Approve Stipulation and Stipulation in the above matter.
In addition, enclosed are an original and eight (8) copies of the testimony of John R.
Gale that is being submitted in support of Idaho Power's enclosed filing. Onecopyofthe
testimony has been designated as the "Reporter's Copy." In addition, a disk containing a
Word version of the aforementioned testimony has been provided for the Reporter and has
been marked accordingly.
Very truly yours,~iJ.rt~
Lisa D. Nordstrom
LDN:csb
Enclosures
LISA D. NORDSTROM (ISB No. 5733)
BARTON L. KLINE (ISB No. 1526)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
Inordstrom(ãidahopower.com
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2ßiß JAN 25 PH 4: 42
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 THE APPLICATION
OF IDAHO POWER COMPANY FOR
A PRUDENCY DETERMINATION OF
ENERGY EFFICIENCY RIDER FUNDS
SPENT IN 2002-2007.
) CASE NO. IPC-E-09-09
)
) IDAHO POWER COMPANY'S MOTION
) TO APPROVE STIPULATION
)
)
COMES NOW, Idaho Power Company ("Idaho Powet' or the "Company) and
hereby moves the Idaho Public Utility Commission ("Commission") pursuant to RP 56
and 256 to: (1) approve the enclosed Stipulation; (2) confirm that the $14,657,971 in
Energy Efficiency Rider expenditures that Idaho Power made on behalf of customers
between 2002 and 2007 were prudent and approved for ratemaking purposes; and (3)
provide feedback regarding the DSM evaluations and prudency determinations
discussed in the Memorandum of Understanding for Prudency Determination of DSM
Expenditures ("DSM MOU") attached as Attachment No. 1 to the Stipulation. This
Motion is based on the following:
IDAHO POWER COMPANY'S MOTION TO APPROVE STIPULATION - 1
1. On February 18, 2009, Idaho Power and the Commission Staff filed a
Stipulation in Case No. IPC-E-08-10 regarding the prudency of a portion of the
$28,961,716 in Energy Efficiency Rider ("Ridet') funds Idaho Power spent during 2002
through 2007. Per the terms of that Stipulation, Idaho Power subsequently filed an
Application on April 1, 2009, requesting that the Commission find the $14,657,971
unresolved balance of Rider funds spent during 2002-2007 to be prudent expenditures.
2. The Commission Staff maintains that to receive the requested expense
recovery, Idaho Power must demonstrate appropriate levels of objective and
transparent evaluation of their Demand-Side Management ("DSM") efforts through
annual documentation. To that end, the Commission Staff hosted a DSM Evaluation
Workshop on October 5, 2009, where process and impact evaluation and cost-
effectiveness reporting were discussed. As a result of the workshop and several follow-
up discussions, Idaho Power and Staff have reached a settlement agreement. A copy
of the settlement stipulation ("Stipulation") has been filed contemporaneously with this
Motion.
I. TERMS OF THE STIPULATION
3. Idaho Power and Staff have agreed upon the contents of a more
comprehensive utility annual DSM report that would demonstrate a commitment to, and
accomplishment of, objective and transparent evaluation of DSM efforts. Those agreed-
upon principles ("guidelines") are set forth in the DSM MOU attached as Attachment No.
1 to the Stipulation.
4. Because the DSM MOU guidelines address Staffs DSM documentation
and evaluation concerns going forward, and based on its review of the Company's
IDAHO POWER COMPANY'S MOTION TO APPROVE STIPULATION - 2
DSM-related expenditures, the Commission Staff agrees that the $14,657,971
unresolved balance of Rider funds spent during 2002-2007 are prudent expenditures
and should be approved for ratemaking purposes.
5. The Parties agree that the Stipulation represents a fair, just, and
reasonable compromise of contested issues and that acceptance of the Stipulation by
the Commission would be in the public interest. Therefore, the Parties recommend that
the Commission approve the Stipulation and all of its terms and conditions without
material change or condition.
II. FEEDBACK ON DSM EVALUATION AND PRUDENCY
6. Much like an Integrated Resource Plan, the DSM MOU underlying the
agreement reached in the Stipulation reflects how Idaho Power intends to manage,
plan, evaluate, and report its DSM activities to the Commission. Like the Integrated
Resource Plan, the acquisition of DSM resources is not cast in stone but wil respond to
changing conditions. Because DSM expenditures have become such a large
component of utility operations, Commission feedback on and acceptance of the
guidelines set out in the DSM MOU is very important. Idaho Power needs this approval
to be confident that it knows what is expected. Although the DSM MOU recognizes that
the Commission is not bound by its terms, Idaho Power respectfully requests that the
Commission issue an Order that explicitly accepts the DSM MOU's stated guidelines
governing the evaluation and prudency of DSM expenditures.
a. Evaluation. The DSM MOU sets forth the expected format and
contents of Idaho Powets annual DSM reports, including evaluations of specific
IDAHO POWER COMPANY'S MOTION TO APPROVE STIPULATION - 3
programs. Under the DSM MOU guidelines, each program-specific section wil contain
the following:
i. A Process Evaluation description that includes program
implementation modifications, formal process evaluations, total process evaluation cost
information, and completed or planned process changes.
ii. An Impact and Cost-effectiveness Evaluation description
containing primary assumptions and source used in both the initial and post-
implementation determination of cost-effectiveness. Idaho Power will also explain any
changes from initial determination (or last evaluation) used for current cost-
effectiveness evaluation, the planned cycle for reassessment of cost-effectiveness
assumption, impact evaluations, total impact evaluation cost, and changes in program
due to evaluation results.
iii. Market Effects Evaluations that have been planned or
completed by or for Idaho Power, including those planned or completed by the
Northwest Energy Efficiency Alliance that are pertinent to any programs for which Idaho
Power is claiming electricity savings or other impacts.
Idaho Power and the Commission Staff are cognizant that DSM programs
should be evaluated to ensure their effectiveness, but also that the Company should not
spend so much money on evaluations that it impairs program cost-effectiveness. If the
Commission prefers a different level of evaluation than those identified in the DSM
MOU, it would be of tremendous value to Idaho Power to know that preference before
conducting future DSM evaluations.
IDAHO POWER COMPANY'S MOTION TO APPROVE STIPULATION - 4
b. Prudency. Idaho Power invests milions of dollars annually in DSM
programs and education on behalf of its customers, and spent more than $31 millon on
DSM programs in 2009 alone. Idaho Power does not make any profit on DSM
expenditures. Consequently, the Company seeks reassurance that it wil receive dollar-
for-dollar recovery of these investments if there is no evidence of imprudent utility
actions or expenses.
7. Because planning, implementing, and evaluating DSM programs is not a
precise science, the DSM MOU encourages Idaho Power to continually review its DSM
programs and make appropriate program improvements. Idaho Power and the
Commission Staff agree that Staffs review of utilty DSM expenses for prudency shall
take into consideration the Company's compliance with the planning, evaluation, and
reporting guidelines listed in the DSM MOU. A showing by Idaho Power that it made a
good faith effort to reasonably perform within these guidelines wil constitute prima facie
evidence that Idaho Powets DSM expenses were prudently incurred for cost recovery
purposes. If Idaho Power performs within the guidelines of the DSM MOU, and
assuming there is no evidence of imprudent actions or expenses, Idaho Power needs to
know that it can reasonably expect that, in the ordinary course of business, Staff wil
support full cost recovery of its DSM program expenses. If the Commission envisions a
different standard to evaluate the prudency of DSM program expenditures, Idaho Power
would greatly appreciate guidance making clear what actions it must take to ensure
dollar-for-dollar recovery of DSM expenditures.
8. Recognizing that the Company's 2008 DSM report has already been filed,
Staff agrees that the Idaho Power need not amend those reports but instead wil
IDAHO POWER COMPANY'S MOTION TO APPROVE STIPULATION - 5
combine evaluation reporting for 2008 with 2009 in their 2009 report to be filed in 2010.
Because it is not possible to comply exactly with the requirements retroactively, the
Company agrees to include as many components as possible in the 2010 Annual DSM
Report. Staff agrees to provide reasonable and necessary leeway for the
implementation of the guidelines described in the DSM MOU for the 2010 DSM reports.
II. CONCLUSION
For these reasons, Idaho Power requests that the Commission issue an order to:
(1) approve the enclosed Stipulation; (2) confirm that $14,657,971 in Energy Efficiency
Rider expenditures that Idaho Power made on behalf of customers between 2002 and
2007 were prudent and approved for ratemaking purposes; and (3) provide feedback
regarding the program evaluations and prudency determinations discussed in the DSM
MOU attached as Attachment No. 1 to the Stipulation.~
Respectfully submitted this -i day of January 2010.
xl lJ ~~lohnLISA D. NORDS OM
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S MOTION TO APPROVE STIPULATION - 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on or about this Z9%ay of January 2010 I served a
true and correct copy of the within and foregoing IDAHO POWER COMPANY'S
MOTION TO APPROVE STIPULATION upon the following named parties by the
method indicated below, and addressed to the following:
Commission Staff
Weldon B. Stutzman
Deputy Attomey General
Idaho Public Utilties Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
-2 Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
~ Email Weldon.stutzman(Çpuc.idaho.gov
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IDAHO POWER COMPANY'S MOTION TO APPROVE STIPULATION - 7