20100325Comments.pdf

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WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
"IHl' !,JII!l 2.. pi; 3' IIluin î1,.;¡\ .) n ' .
Street Address for Express Mail:
472 WWASHINGTON
BOISE ID 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR AUTHORITY )
TO CONVERT SCHEDULE 54 - FIXED COST )
ADJUSTMENT - FROM A PILOT SCHEDULE )
TO AN ONGOING PERMANENT SCHEDULE. )
)
CASE NO. IPC-E-09-28
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilties Commission, by and through its
Attorney of record, Weldon B. Stutzman, Deputy Attorney General, and in response to the
Notice of Modified Procedure issued in Order No. 31010 on February 23,2010, submits the
following comments.
BACKGROUND
On October 1,2009, Idaho Power Company (IPC, Company) filed an Application
requesting an Order authorizing the Company to convert its current Schedule 54 - Fixed Cost
Adjustment (FCA, Pilot) - from a pilot schedule to an ongoing, permanent schedule. In Order
No. 30267 issued March 12,2007, the Commission approved implementation ofa three-year
FCA pilot program for residential service and small general service customers. The FCA
mechanism allows Idaho Power to separate collection of fixed costs from volumetric energy
sales. A surcharge or customer credit is applied when fixed-cost recovery per customer varies
STAFF COMMENTS 1 MARCH 25, 2010
from a Commission-established base. During the first two years of the pilot program, the FCA
true-up resulted in a refund in one year and a surcharge in the next.
Because utilties recover a large portion of their fixed costs through sales of kilowatt-
hours of energy, the Company contends that traditional rate design discourages utilities from
reducing their sales volume caused by investing in energy efficiency programs. Idaho Power
alleges the purose of the FCA pilot program "was to test the FCA mechanism to determine its
effcacy in removing the unintended rate design disincentive for the Company to aggressively
pursue DSM programs." Application, p. 4. Idaho Power asserts that so far during the three-year
pilot program the Company has made "strong progress in improving and enhancing its efforts to
promote energy efficiency and demand-side management activities." Application, p. 3. The
Company credits this effort "in no small par to removal of the disincentive provided by the FCA
mechanism during the term of the FCA pilot." ¡d.
The Company's Application requests that the FCA continue to be applicable only to
residential and small general service customer classes. During the first two years of the pilot
program, the FCA balances for both classes were combined and the same FCA rate adjustment
applied to both classes. Idaho Power requests, if the FCA is made permanent, that the FCA
balances and annual rate adjustment amounts for each class remain separate so that each class is
assigned its own fixed-cost adjustment rate.
ST AFF ANALYSIS
Staff does not advocate termination of the FCA, but believes it is premature to convert
the FCA from a pilot schedule to a permanent schedule. The following comments detail Staffs
assessment of the pilot period, describe Staff s concerns in promoting the Pilot to permanent
program status, and presents Staffs recommendations for continuing the FCA in a pilot status
for an additional two years.
Observations from the FCA Pilot Program
Staff originally supported the FCA pilot mechanism recognizing that DSM reduces
recovery of prudently incurred fixed costs approved for recovery by the Commission. Just as
fixed costs are primarily recovered through the energy rate, reduction in energy consumption due
to DSM reduces that recovery. Staff agreed that this creates a financial disincentive for the
Company to pursue DSM resources that are deemed to be more cost effective than available
supply side alternatives. Therefore, the "decoupling" mechanism was put in place to separate the
STAFF COMMENTS 2 MARCH 25, 2010
collection of fixed costs from volumetric energy sales. The FCA works as follows: if the
average energy use per customer increases, the Company collects more fixed costs per customer
than authorized by the Commission and customers receive a credit; if the average energy use per
customer decreases, the Company collects less fixed costs per customer than authorized by the
Commission and customers receive a surcharge through the FCA.
During the 2007 FCA period, sales per residential customers increased while sales per
small commercial customers declined. This produced a first year credit to residential customers
of nearly $3.5 milion, representing a 1.2% decrease in residential rates. Conversely, small
commercial customers faced a 7.3% increase due to an under collection of nearly $1.2 milion in
fixed cost. However, the fixed cost allocation for the residential and small commercial classes
the Company used to establish proposed FCA rates for the 2007/2008 period was not based on a
Commission-approved cost of service study as required by the FCA Stipulation. Instead, it was
based on a Commission-approved revenue requirement from a settled 2005 rate case and a
Company-proposed cost of service modeL. Staff noted that without a Commission-approved cost
of service model, there is "no confirmation of what the Commission deems to be 'authorized'
fixed costs." See Case No. IPC-E-08-04, Staff Comments, p. 5. Staff recommended that the
FCA deferral balances for the two customer classes be merged and a single blended FCA credit
be returned to each customer class. The Company and Commission agreed, and the result was a
0.045676 ~/kWh reduction in residential and small commercial rates. See Order No. 30556.
The second year of the FCA Pilot saw a decrease in per-customer usage for both the
residential and small commercial classes. This alone led to an under-recovery of authorized
fixed costs. In addition, a general rate increase led to a higher fixed cost per customer (FCC) and
fixed cost per energy (FCE), fuher increasing the lost fixed cost recovery associated with
reduced energy sales. For the most par, the issues raised in the first year concerning the
variables used to set FCA rates had been adequately addressed. The result in the second year
was a net under-recovery of $2.7 milion in fixed costs. All paries supported instituting a
blended FCA surcharge to be applied evenly to both affected customer classes. Staff believed
a blended rate was appropriate because while the effect on residential customer bils would be
negligible, the impact to small commercial would be quite large.! See Case No. IPC-E-09-06,
p.5. IPC and Staff also noted that a blended rate was consistent with the Commission's Order
i Without the 3% cap, small commercial customers would have seen a surcharge of 10.3%.
STAFF COMMENTS 3 MARCH 25, 2010
the prior year. In Order No. 30827, the Commission approved a surcharge of 0.0529 ~/kWh for
all residential and small commercial customers.
The Company fied its FCA rates for the final year of the Pilot on March 16,2010. See
Case No. IPC-E-I0-07. The Company contends that use per customer continued to decline for
both the residential and small commercial classes relative to the 2008 test year. Residential
customers in paricular may face a doubling of the surcharge currently in place. The Company's
application indicates that for the third consecutive year the small commercial class has a deferral
balance that exceeds the 3% cap put in place by the Commission. IPC advocates blending the
deferral balances, as in the prior two years, resulting in a i .85% increase to rates for each class.
Staff has not completed its review of the Company fiing, nor has the Commission issued a final
Order in the Case.
From a purely mechanical stadpoint, the FCA has worked as intended - i.e., when sales
per customer have declined, the FCA has resulted in a customer surcharge and when sales per
customer have increased, a credit was returned. Given the significant departure from traditional
ratemaking methodology, the pilot program has provided an opportunity to both Staff and the
Company to further understand the merits and mechanics of decoupling mechanisms.
Staff also acknowledges that Idaho Power has increased its demand-side management
(DSM) expenditures and savings in recent years. In particular, comparing the Company's 2006
and 2009 DSM Annual Reports reveals that Idaho Power increased the anual amount it spent on
Idaho energy effciency and demand response programs by 193% (from $11.5 milion to $33.7
milion). In those same years, the Company's estimated first-year anual energy savings from all
of its energy effciency programs increased by 111% (from 71,600 megawatt-hours (MWh) to
148,700 MWh), and its estimated peak load reductions from its demand response programs
increased by 483% (from 37 megawatts (MW) to 218 MW).
Reflected in the above DSM expenditures and energy savings is the Company's
continued support of, and participation in, the Northwest Energy Effciency Allance's (NEEA)
regional efforts to transform energy efficiency markets and otherwise improve energy efficiency
through strengthening building code and appliance standard requirements and compliances.
Clearly, Idaho Power has dramatically increased its DSM efforts during the three years
that the FCA pilot has existed, but it is not at all clear how much, ifany, of the DSM increase can
STAFF COMMENTS 4 MARCH 25, 2010
be attributed to the FCA's existence. Given that elimination ofIdaho Power's financial
disincentives for investing in residential energy efficiency is the FCA' s primar purpose, a
logical consequence of the FCA would be for the Company's energy effciency efforts to have
increased disproportionately more for those customers than for customer classes not affected by
the FCA. In actuality, however, neither the Company's residential energy effciency program
expenses nor their reported energy savings increased as much as those for all other customer
classes. For residential customers, Idaho Power increased its Idaho energy efficiency expenses
110% (from $2.7 milion in 2006 to $5.6 milion in 2009), while non-residential energy
efficiency expenses increased 168% (from $4.7 milion to $12.6 milion). For the same years,
the estimated first-year energy savings from residential programs increased by about 130% (from
11,300 MWh to 26,000 MWh), while the estimated energy savings from non-residential
programs increased 188% (from 36,903 first-year MWh to 106,453 MWh).
Unfortunately, DSM expenses and savings estimates for Schedule 7's small commercial
customers (the secondar FCA target) are not distinguishable from other commercial and
industrial customer classes. DSM data specific to Schedule 7 customers should be separately
identified given that customer class' FCA involvement.
Staff previously noted in 2008 in comments fied in IPC-E-08-04 (p. 8), "...there is no
analysis provided to demonstrate or suggest that these additional (DSM) efforts would not have
occured in the absence of the FCA mechanism." It is stil true today that there is no evidence
that the FCA caused Idaho Power to increase its DSM efforts specifically for residential and
small commercial customers beyond that which it would have in the absence of the FCA. There
are many factors causing increasingly aggressive DSM to remain the Company's most cost-
effective resource and there is no evidence that the FCA is the most important of those factors.
As stated by the Company in its March 19,2010, Reply Comments in IPC-E-09-09 (pp.3A):
"Idaho Power wants to administer energy efficiency because...it is an integral and increasingly
important par of the Company's resource planing..."
FCA goes beyond DSM
Decoupling mechanisms are widely regarded as a means to remove the financial
disincentive toward Company-sponsored DSM programs, not as a guarantee of fixed cost
recovery between rate cases. However, the current FCA formula does not differentiate between
the weather normalized variation in energy use per customer associated with the Company's
energy efficiency programs and other economic factors. As an example of the potential
STAFF COMMENTS 5 MARCH 25, 2010
magnitude of this difference, in the Company's 2008 Anual DSM report, the Company's
estimated residential program savings was 21,777,729 kWh.2 Yet, the 2008 FCA reimbursed the
Company for a decline in energy of 156,131,477 kWh. Therefore the Company is collecting lost
fixed revenue for reductions in energy use due to factors other than its DSM programs.
Similarly, when 2007 energy usage increased, the Company had to pay customers $2,400,558,
thus penalizing IPC for factors that did not have anything to do with its energy efficiency
programs. While these potential problems were identified before the FCA was implemented, the
magnitude of the problem was not.
Recently the Company and Staff came to terms on a measurement and evaluation plan for
demand-side programs. See Case No. IPC-E-09-09. Commission Staff and Idaho utilties
developed a Memorandum of Understanding (MOU), agreeing on the contents of a more
comprehensive utility annual DSM report that would demonstrate a commitment to, and
accomplishment of, objective and transparent evaluation ofDSM efforts. As recognized in the
MOU, "planing, implementing and evaluating DSM programs is not an exact science," but the
Commission Staff and the industry are making efforts to improve the application of judgment
and experience to faciltate continual program improvement. The MOU defined the process of
conducting and reporting evaluation, measurement and verification (EM& V) of DSM programs.
One of the key measurement and verification issues of determining energy efficiency
savings is defining the baseline, or the energy use absent the utility measure or program. The
baseline is an integral par of determining program effectiveness, since energy savings is defined
as the difference between energy consumption after implementation and what would have
occured durng the same period had the efficiency measures not been installed. Baseline energy
use can change for a number of reasons, including: (1) building code changes; (2) federal
weatherization programs, tax incentives and appliance rebates; (3) federal marketing programs
(e.g., - similar to an energy version of the "buckle-up" ad campaign); (4) technological changes;
(5) substitutions between gas and electric equipment; (6) rate design changes; (7) shifts in the
economy; and (8) other behavioral changes. It is the Company's responsibilty to begin isolating
the impact of these changes on residential and small general service consumption by conducting
price elasticity, economic, load-research, and end-use market research studies.
2 Staff notes this is the first-year annualized savings, thus substantially overstating savings that occurred in 2008, but
does not include any cumulative savings associated with programs operated in prior years subsequent to the test year
of the last rate case. Given the Company's prior DSM efforts, Staff believes the residential DSM savings mismatch
is not material enough to affect Staffs position.
STAFF COMMENTS 6 MARCH 25, 2010
An example of the information Staff believes useful in evaluating the causes of reduced
per-customer consumption outside ofDSM can be found in Avista Utilties 2009 Electric IRP.
In the document, A vista reviewed price and income elasticity of demand studies3 to factor into its
long-term load forecasts. Along with the expected consumer response to higher prices, Avista
acknowledged two additional impacts that affect electricity demand. The first is affordabilty.
As incomes rise, a consumer's abilty to pay for goods and services increases. The second
impact is the amount and number of customers using equipment within their homes and
businesses. As incomes rise, consumers are more likely to purchase more electricity-consuming
equipment, live in larger dwellngs and use electrical equipment more often, but often are less
likely to live in residences with electric space and water heating.
Given the harsh local economic conditions of relatively high unemployment (9.1 % Boise
Metro) and declining wages (-2.6% Idaho), combined with the actual level of documented DSM
savings during the pilot period, it is evident that the decoupling mechanism has tracked the
effects of price elasticity of demand from rate increases (and rate design alterations) along with
income elasticity from atypical economic conditions consumers have recently faced. Staff
believes both of these conditions have contributed to reduced energy consumption in the Idaho
Power service territory, which consequently is captured through the FCA. Again, Staffhas
always been aware of the potential for the mechanism to track and reimburse the Company for
non-DSM related reductions in energy consumption, and quantifying the magnitude of such
reductions continues to be very difficult.4
Staffis aware of the Company's efforts to make identification ofits DSM and energy
effciency savings more accurate. Idaho Power is currently developing a new process to track
program savings and expenses by rate schedule that wil be implemented in 2010. Once this new
process is implemented, the Company should be able to conduct market research on the key
factors influencing intra-class variations in energy use and savings. This information could be
useful in fuher analyzing the FCA mechanism at the end of an extended Pilot Program.
3 Price elasticity is a measure of
the responsiveness of buyers to changing prices, while income elasticity measures
the responsiveness of buyers to changes in income levels.4 Staff notes that in its most recent effort at modeling residential per-customer usage, weather explained the majority
of sales variation, leaving little room for generalized socioeconomic and DSM variables to provide insight into the
impact of the FCA. Staff draws two conclusions: Company-sponsored DSM programs marginally contribute to the
variation in residential customer sales; and more granular data is necessary to adequately address use per-customer
modeling.
STAFF COMMENTS 7 MARCH 25, 2010
Unresolved Issues
In its support of the Stipulation creating the FCA pilot program, Staff noted several
concerns it had regarding the evaluation of the mechanism. See Case No. IPC-E-04-15, Lobb
Direct, p. 6. Several of these issues have not been resolved during the initial pilot stage,
paricularly the impact new customers have on the collection of fixed costs and how the
Company's DSM efforts would be different had the Commission not approved the FCA Pilot. In
addition, with more than two years of experience with the Pilot Staff has discovered additional
challenges associated with the FCA that were unseen during its development.
Perhaps the foremost concern when considering the validity of a fixed cost recovery
mechanism is whether it results in a measurable change in utilty practices. Idaho Power has
stated in its Application, its 2009 DSM Report and its 2009 Integrated Resource Plan that the
FCA has been a significant factor in improving its efforts toward energy effciency and DSM,
but Staff has not been able to fully attribute expansion of Company DSM programs to the FCA.
While it is possible that the FCA has played a part, Staff believes in this current environment that
there are a number of factors that make the Company's commitment to DSM in its own best
interest. Such factors may include: (l) the Company's share of escalating power supply costs,
tracked through the power cost adjustment mechanism (PCA); (2) an interest in demonstrating
that it has been pursuing all options in order to support its recent acquisitions of (or intent to
acquire) additional supply-side resources; and (3) pressure both internally and externally to
reduce its reliance on fossil-fuel based resources could all have resulted in expanded DSM
programs.
In support of the Stipulation, Staff expressed concerns about the fixed costs associated
with new customers. Changing household demographics, as noted above, may cause dramatic
shifts in per-customer usage patterns over time, which have no direct tie to the DSM efforts of
the Company. There have been proposals around the nation to capture "trends" in new customer
usage in-between general rate cases to prevent predictable windfalls or losses to the utilty
(commonly known as a K-factor). Staff previously evaluated whether such a mechanism should
be made a par of the FCA Pilot, and concluded that such a mechanism would add complexity to
the program without substantially increasing accuracy. Staff therefore agreed in the Stipulation
to add new customers at the average fixed cost per customer previously approved by the
Commission.
STAFF COMMENTS 8 MARCH 25, 2010
While Staff does not intend to propose a K-factor adjustment to the FCA, it does believe
that the issue of cost to serve new customers deserves to be reevaluated. The authorized fixed
costs are based on results from the most recently approved cost of service model which include
generation, transmission, distribution and customer costs. Generation and transmission
investments are uneven, and tend to be the impetus for rate case proceedings. These fixed
investments are not made as individual customers are added, and therefore are potentially over
collected in the current FCA mechanism. What remains are the distribution and customer costs,
which make up over half of the FCC once customer charges are accounted for. Staff believes
that the FCC and FCE can be established in the same maner currently in practice, using the
most recently approved (or agreed upon) cost of service methodology. As customers are added,
a second allowed FCC and FCE would be based on the distribution and customer costs within the
same cost of service study. Staff believes that this methodology may more accurately reflect the
fixed costs associated with new customers in between rate cases. Continuation of the FCA pilot
would allow fuher refinement of new customer fixed costs.
Staff is also concerned that the load growth adjustment rate (LGAR) built into the PCA
may have the unintended consequence of overcompensating the utilty for lost fixed costs during
periods of declining sales. Both the FCA and the LGAR in the PCA may be reimbursing the
Company for the same lost fixed generation revenue.s Conversely, this phenomenon does not
appear to occur when sales increase and use per customer either increases or decreases. This is
one area that needs to be further investigated before the FCA is made permanent.
A further complication with the FCA is the impact the newly-instituted tiered rate
structure has on collection of fixed costs. As a result of Commission Order No. 30722, IPC has
instituted year-roundJ-tiered rate structures for residential customers6 and 2-tiered structures for
small commercial customers. Prior to the upcoming 2009 FCA filing, the Company's 2-tiered
summer rate structure had such a de minimus affect on the collection of authorized fixed costs
that Staff and the Company did not factor it into the collection process. With the new rate
structure, Staff foresees the 2009 FCA fiing to be more complicated with regard to assessing the
level of fixed costs actually collected. For example, neither party has indicated whether the
5 To be more precise, theFCA recoups a portion of generation costs associated with the two affected customer
classes, and any portion of generation costs shifted from other customer classes as a result of deviation from cost of
service.6 This only applies in the non-summer months for a small number of customers taking service under Schedules 4 and
5, and does not apply to schedule 3 customers who are charged a flat energy rate.
STAFF COMMENTS 9 MARCH 25, 2010
stated fixed cost per energy (FCE) is a percentage of the commodity rate or if it is a fixed cents-
per-kWh value. Should it be the former, the highest tier represents the greatest exposure to under
collecting approved fixed costs as the rate contains a greater portion of the approved fixed costs.
Should it be the latter, the risk of under collection is appreciably less than the other scenario.
Staff believes that extending the pilot allows further analysis of rate design impacts on fixed cost
recovery.
Finally, Staff believes that the option to allow a single FCA rate for both residential and
commercial classes should be maintained and the Company's request to remove the option
should be denied. In both the 2007 and 2008 FCA fiings, Staff supported a blended FCA rate on
a number of grounds, most notably that the underlying cost of service methodology is an inexact
science, and based on an unapproved modeL. These concerns have not changed. Also, blending
the rates has prevented the Company from deferring a significant amount of unrecovered fixed
costs associated with the small commercial customers. This not only benefits the Company from
a cash flow perspective, but has prevented the deferral balance from a "snowball effect", in
which the balance grows anually to a point where collection of the full amount becomes nearly
impossible.
Public Understanding of the FCA
Although the Commission has not received any comments from the general public
specific to this case, the Commission's Consumer Assistance Staff has received complaints and
questions from customers about the FCA. Some customers believe that the FCA penalizes them
for saving energy; the less energy customers use, the greater the amount the Company is allowed
to recover through the FCA for lost revenue. If the customer does not participate in any of the
Company's DSM programs, the customer does not receive a cash incentive or bil credit yet pays
for the DSM programs through the Energy Efficiency Services Rider and pays for the lost
revenue associated with DSM program participants' energy savings. Often the customer does
not understad that the FCA is intended to recover only a portion of the Company's fixed cost
associated with a decline in energy sales that can be attributed to its DSM programs. Instead, the
customer thinks the FCA simply compensates the Company for declining revenue or provides
the Company with a profit that it would otherwse not realize when revenue declines. Although
these opinions are based on a misunderstanding of how the FCA works, they are nevertheless
commonly-held opinions. Unfortunately, this can easily discourage people from conserving
energy and erode public support for DSM programs.
STAFF COMMENTS 10 MARCH 25, 2010
Most customers do not understand ratemaking principles, and is it unreasonable to expect
them to recognize the complexities of varous rate adjustment mechanisms such as the FCA. It is
important that the benefits of the FCA not be expressed in vague terms or phrases that are easily
misinterpreted by customers or conveyed using concepts that are meaningless to customers. If
the Commission agrees that the FCA should be continued, the Company should improve its
communication with customers so that they can more fully understand the justification for the
FCA and how both customers and the Company benefit from the FCA and DSM programs. Staff
recommends that the Commission direct the Staff and Company to work together to improve
communication with customers.
Staff also recommends that the FCA be moved from the Energy Efficiency Services line
item on customer bils and be combined with the PCA to form a new line item entitled "Annual
Adjustment Mechanisms" or a similar term. From a practical perspective, both the FCA and
PCA adjust annually (and concurently). The Energy Efficiency tariff rider, which is currently
combined with the FCA in a line item, changes far less frequently. The transparency of
customers' bils has become an issue as energy rates have increased, the residential rate design
has changed, and the cap on the amount that residential customers pay under the Energy
Effciency tariff rider was eliminated. The amount that actually appears on bils under the
Energy Efficiency Services line item is higher than the tariff rider itself due to the addition of the
FCA. The fact that the Energy Effciency tariff rider is 4.5% of base rate charges and the FCA is
a fixed charge per kWh increases the complexity of the calculation for customers trying to verify
that their bil is correct, if in fact they are aware of the FCA "adder" to this line item. Staff
believes that this is a simple step that wil improve customers' understanding of the components
that make up the overall bilL.
STAFF RECOMMENDATIONS
Staff continues to maintain that DSM can be the most cost effective resource for meeting
Company load. All customers benefit when the Company acquires DSM energy savings at costs
that are lower than alternative supply side resources. Staff also believes there is a financial
disincentive for the Company to aggressively pursue cost effective DSM when doing so reduces
recovery of prudently incurred Commission approved fixed costs.
Staff recognized the short comings of the current FCA mechanism when it was first
implemented. Broad recovery of lost fixed revenue beyond the effect of Company DSM, cost
STAFF COMMENTS 11 MARCH 25, 2010
recovery of fixed costs that have not been approved by the Commission for new customers and
the diffculty of assigning fixed cost responsibility to various customer classes are stil problems
today. New problems are potential double recovery of fixed costs through the PCA LGAR and
the effect of tiered rates. While Staff does not support making the FCA mechanism permanent at
this time, it does support continuation of the mechanism on a pilot basis. Staff recommends that
the FCA be continued as a pilot program for two more years to allow time to address a number
of the unresolved issues. Continuance of the Pilot affords both the Company and Staff an
opportunity to better understand the factors that affect energy consumption per customer, which
may provide a more defensible rationale for either maintaining or eliminating the FCA. During
an extended pilot period, Staff recommends that the option to blend the credits or surcharges for
the two affected customer classes remain.
Staff believes the public would be well served by Company efforts to improve awareness
of what the FCA is, how the FCA affects Idaho Power's investment in DSM, and why DSM is a
valuable resource for all customers. Staff recommends that the Commission direct the Company
to educate its customers on the benefits of the FCA and DSM programs in order to mitigate the
negative misconceptions many customers have. Staff also believes that the FCA should be
moved out of the Energy Effciency Services line item on customer bils and combined with the
PCA to create an annual adjustment line item. Doing so may help improve customers'
understanding of the biling components.
Staff fuher recommends that distinguishing between existing customers and customers
added between general rate case proceedings be investigated to more accurately identify fixed
costs for new customers. Staff believes limiting cost recovery to distribution and customer costs
incured to serve new customers may be both more equitable and relatively simple to administer.
Staff believes the current methods of monthly reporting for the curent FCA mechanism
are sufficient, and recommends that monthly FCA reports continue to be submitted concurently
with the monthly PCA reports.
STAFF COMMENTS 12 MARCH 25, 2010
Respectfully submitted thisi5~ day of March 2010.
J)~
Weldon B. Stutzman
Deputy Attorney General
Technical Staff: Bryan Lanspery
Matt Elam
Lynn Anderson
Bev Barker
i: umisc: commentsipce09 .28wsblme. doc
STAFF COMMENTS 13 MARCH 25, 2010
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 25TH DAY OF MARCH 2010,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC-E-09-28, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
BARTON L KLINE
DONOV AN WALKER
IDAHO POWER COMPANY
POBOX 70
BOISE ID 83707-0070
E-MAIL: bkline(iidahopower.com
dwalker(iidahopower .com
SCOTT D SPARKS
JOHNRGALE
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: ssparks(iidahopower.com
rgale(iidahopower .com
BRAD M PURDY
ATTORNEY AT LAW
2019 N 17TH STREET
BOISE ID 83702
E-MAIL: bmpurdy(ihotmail.com
KEN MILLER
CLEAN ENERGY PROGRAM DIRECTOR
SNAKE RIVER ALLIANCE
BOX 1731
BOISE ID 83701
E-MAIL: kmiler(isnakeriveralliance.org
BETSY BRIDGE
ID CONSERVA nON LEAGUE
PO BOX 844
710 N SIXTH STREET
BOISE ID 83701
E-MAIL: bbridge(iidahoconservation.org
~~.~
SECRETARY
CERTIFICATE OF SERVICE