20100219Anderson Direct.pdf

BEFORE THE R,i:CC!"\L..,.' ;¡,,,,¡ i
ioin FEB i 9 PH 2= 36
IDAHO PUBLIC UTILITIES COMMJ~~l~i:';,I;;i"i
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR A ) CASE NO. IPC-E-09-09
PRUDENCY DETERMINATION OF )
ENERGY EFFICIENCY RIDER FUNDS )
SPENT IN 2002-2007. )
DIRECT TESTIMONY OF LYNN ANDERSON
IDAHO PUBLIC UTILITIES COMMISSION
FEBRUARY 19, 2010
1 Q.Please state your name and business address for the
2 record.
3 A.My name is Lynn Anderson and my business address is
4 472 West Washington Street, Boise, Idaho.
5 Q.By whom are you employed and in what capacity?
6 A.I am employed by the Idaho Public Utilities
7 Commission as a Staff economist.
8 Q.What are your duties with the Commission?
9 A.Currently, some of my primary duties are evaluating
10 energy efficiency policy, opportunities, barriers, efforts
11 and cost-effectiveness, the results of which are used to make
12 recommendations to the Commission and other entities.
13 Q.Would you please outline your academic and
14 professional background?
15 A.I have a Bachelor of Science degree in government
16 and a Bachelor of Arts degree in sociology, both from Idaho
17 State University where I also studied economics and
18 architecture. I studied engineering at graduate and
19 undergraduate levels at Northwestern Uni versi ty and Brigham
20 Young University, respectively, and graduate-level public
21 administration and quantitative analysis at Boise State
22 University.
23 I have attended many training seminars and
24 conferences regarding utility regulation, forecasting,
25 planning, operations, marketing and program evaluation,
CASE NO. IPC-E-09-0902/19/10
ANDERSON, L. (Di) 1
STAFF
1 including Lawrence Berkeley Laboratory's Advanced Integrated
2 Resource Planning seminar in 1994, the Northwest Public Power
3 Association's Troubleshooting Residential Energy Use course
4 in 2001, and the International Energy Program Evaluation
5 conferences in 2003, 2005, 2007 and 2009.
6 I began my employment with the Commission in 1980
7 as a utility rate analyst. In 1983, I was appointed to the
8 telecommunications section supervisor position and in 1992, I
9 was appointed to my present position as an economist. In
10 that capacity, I have been a Staff representative to the
11 Northwest Energy Efficiency Alliance's Board of Directors and
12 Cost-Effectiveness Committee, Avista Utilities' External
13 Energy Efficiency Board, Idaho Power's Energy Efficiency
14 Advisory Group, the Northwest Power and Conservation
15 Council's Demand Response Initiative, the Energy Efficiency
16 and Conservation Task Force of the Idaho Strategic Energy
17 Alliance, and work groups under the National Action Plan for
18 Energy Efficiency, including Evaluation, Measurement and
19 Verification (EM&V).
20 Since 1999, I have served the Commission as a
21 policy strategist for electricity and telecommunications
22 issues on an as-needed basis.
23 From 1975 to 1980, I was employed by the Idaho
24 Transportation Department where I performed benefit/cost
25 analyses of highway safety improvements and other statistical
CASE NO. IPC-E-09-0902/19/10
ANDERSON, L. (Di) 2
STAFF
1 analyses.
2 Q.What is the purpose of your testimony?
3 A.The purpose of my testimony is to support Idaho
4 Power's request for the Commission to determine that the
5 Company's remaining $14,657,971 expenditures on energy
6 efficiency programs and efforts from 2002 through 2007 were
7 prudently incurred.
8 Q.Was the above amount the entire amount that Idaho
9 Power spent on energy efficiency from 2002 through 2007?
10 A.No, the total amount Idaho Power spent promoting
11 energy efficiency during those six years was about $42
12 million, comprised of Energy Efficiency Rider (Rider) funds
13 and other funding sources such as the $1.3 million annual
14 amount for low- income weatherization that is included in base
15 rates. Of the total $42 million, approximately $29 million
16 was from the Rider. In Case No. IPC-E-08-10, the Company and
17 Staff stipulated that all but $14,657,971 of Rider-funded
18 program expenses should be found to be prudently incurred.
19 It is important to note that Staff did not suggest in that
20 case that the remaining funds were imprudently spent, but
21 rather that the Company had not yet provided evidence of
22 sufficient, formal and transparent evaluations of the
23 programs that were funded by that amount.
24 Q.Why are formal evaluations of energy efficiency
25 programs so important?
CASE NO. IPC-E-09-0902/19/10
ANDERSON, L. (Di) 3
STAFF
1 A.Unlike energy demand and consumption, energy
2 efficiency program results cannot generally be metered -
3 instead their impacts can only be estimated through a
4 combination of engineering measurements, verification of
5 installations and assumptions, and overall program
6 evaluation. Evaluation results should be used to both refine
7 prior estimates of program cost-effectiveness from several
8 perspectives and to find ways to further improve programs.
9 Programs that are not properly evaluated will suffer from
10 unreliable cost-effectiveness estimates and will not likely
11 be improved to their optimum performance levels.
12 Q.Has the Company since provided sufficient evidence
13 of evaluations of its programs for 2002 through 2007?
14 A.Not entirely. However, in recognition that there
15 was an apparent disconnect between what Staff viewed as
16 sufficient evaluations and what Idaho Power and other
17 utilities viewed as sufficient, Staff convened a workshop to
18 fully vet the issues of evaluations and cost-effectiveness
19 expectations. With utility input, the Staff hired a
20 nationally-respected energy efficiency program evaluation
21 expert to facilitate the workshop. Several representatives
22 from the Staff and each utility, i. e. Idaho Power, Avista
23 Utilities, and Rocky Mountain Power, participated in that
24 October 5, 2009 workshop. The end result was an agreement by
25 each of the utilities to formally evaluate all of their
CASE NO. IPC-E-09-0902/19/10 ANDERSON, L. (Di) 4
STAFF
1 programs on regular, multi-year cycles and to report the
2 results of those evaluations in their annual demand-side
3 management (DSM) reports that are filed with the Commission.
4 In exchange for the utility commitments, Staff agreed that if
5 the evaluation and reporting commitments are fulfilled and if
6 there is no evidence of DSM imprudence, then, when requested
7 by the utilities, Staff would recommend that DSM expenditures
8 be found prudent by the Commission. Staff also agreed that
9 it would recommend that Idaho Power's remaining $14,657,971
10 of Rider-funded expenses from 2002 through 2007 be found
11 prudent in the present case before the Commission. Details
12 of the agreements are described in the Memorandum of
13 Understanding for Prudency Determina tion of DSM Expendi tures
14 that was attached to the Stipulation filed in this case.
15 Is such a prudency finding by the Commission in theQ.
16 public interest?
17 I believe it is. To reiterate, the Staff did notA.
18 suggest that any of the prior expenditures by Idaho Power
19 were imprudent, but only that some programs had not yet been
20 sufficiently evaluated and that the Company's then stated
21 plans for future evaluations did not resolve all of our
22 concerns. As a result of the prior described workshop, the
23 Staff's major concerns in the past should be resolved as
24 evidenced by future evaluations, the results of which will be
25 regularly listed and described in, and attached to, Idaho
CASE NO. IPC-E-09-0902/19/10 ANDERSON, L. (Di) 5
STAFF
2
1 Power's DSM annual reports.
Does this conclude your direct testimony?
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A.Yes, it does.
CASE NO. IPC-E-09-0902/19/10 ANDERSON, L. (Di) 6
STAFF
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 19TH DAY OF FEBRUARY 2010,
SERVED THE FOREGOING DIRECT TESTIMONY OF LYNN ANDERSON, IN
CASE NO. IPC-E-09-09, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
LISA D NORDSTROM
BARTON L KLINE
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: lnordstrom(iidahopower.com
bkline(iidahopower .com
DARLENE NEMNICH
JOHN R GALE
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: dnemnich(iidahopower.com
rgale(iidahopower .com
J?F
SECRETAR
CERTIFICATE OF SERVICE