20100503Joint Reply Comments.pdf

LISA D. NORDSTROM
Lead Counsel
Inordstromtmidahopower.com
esIDA~POR~
An IDACORP Company
May 3,2010
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-10-04
NEEA Funding
Dear Ms. Jewell:
Enclosed for filing are an original and seven (7) copies of the Joint Reply Comments
of Idaho Power Company and NEAA in the above matter.
Very truly yours,
rJ~l)'1~
Lisa D. Nordstrom
LDN:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, ID 83702
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]
Inordstromtãidahopower.com
bklinetãidahopower.com
CLAIRE FULENWIDER
Executive Director
Northwest Energy Efficiency Allance
529 SW Third Avenue, Suite 600
Portland, Oregon 97204
CFulenwidertãnwallance.org
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
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\c.)Attorneys for Idaho Power Company
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT )
APPLICATION OF IDAHO POWER ) CASE NO. IPC-E-10-04
COMPANY FOR AUTHORITY TO FUND )
ITS CONTINUED PARTICIPATION IN THE ) JOINT REPLY COMMENTS OF
NORTHWEST ENERGY EFFICENCY ) IDAHO POWER COMPANY AND
ALLIANCE FOR THE PERIOD 2010-2014. ) NEEA
)
Idaho Power Company ("Idaho Powet' or "Company") hereby replies to the
Comments filed by the Staff of the Idaho Public Utilties Commission ("Staff"), the Idaho
Conservation League ("ICL"), Snake River Allance ("SRA"), and the Industrial
Customers of Idaho Power ("ICIP").
I. COMMISSION APPROVAL REQUESTED
As set out in the first line of the Application filed in this case, Idaho Power has
requested the Commission approve two actions: (1) its continued participation in the
Northwest Energy Effciency Allance ("NEEA") for the period 2010-1014 and (2) that the
Company fund its participation from the Energy Efficiency Rider ("Ridet'). This is
JOINT REPLY COMMENTS OF IDAHO POWER COMPANY AND NEEA - 1
consistent with past Idaho Power applications that sought Commission approval of the
concepts underlying proposed large DSM programs (e.g., the Irrigation Peak Rewards
Program and the Commercial Flex Peak Program).
Idaho Power is committed to pursuing all cost-effective energy efficiency, and
NEEA qualifies as such. However, Idaho Power is also sensitive to the idea that the
Commission may presently prefer the Company fund other DSM activities in lieu of
NEEA. Should the Commission approve its proposed NEEA participation, Idaho Power
anticipates that the Commission's examination of its management of Rider funds wil
occur when the Company files its annual DSM report and seeks a prudency review of
the associated expenditures.
Idaho Power recognizes that the Commission has the authority to determine the
amount of energy efficiency funded by electric utilties and the manner in which it is
recovered in customer rates. In fact, the Commission is currently considering in Case
No. PAC-E-10-03 whether or not to increase Rocky Mountain Power's Customer
Effciency Services rate from 3.72 to 5.85 percent of retail revenues. As of March 31,
2010, Idaho Power's Energy Efficiency Rider account has a contra balance of
$7,121,637. Although there are many variables that could affect the forecast of 2010
year-end balance, it is presently forecasted at approximately $17 millon. If the
Commission authorizes the Company to pay for NEEA participation with Rider funds,
the Rider account wil have a deficit contra balance of approximately $20 millon by
December 31,2010.
DSM activities play an important role in Idaho Power's portolio of integrated
resources, and funding of those activities is constantly examined by the Company. The
JOINT REPLY COMMENTS OF IDAHO POWER COMPANY AND NEEA - 2
Company does not believe that the pool of DSM funds is limited only to the Rider.
Because demand-side management is a cost-effective resource that can replace
supply-side generation, DSM expenditures could be appropriately recovered in various
ways and need not be limited to a Rider percentage if the Commission wishes to fund
them on a larger scale.
II. BENEFITS OF NEEA PARTICIPATION
The Company wil not repeat benefits of NEEA participation in these Reply
Comments as they are detailed in the Application and its attachments. Market
transformation is the area in which NEEA truly excels. Idaho Power does not have the"
necessary regional marketing influence to impact significant change for its customers.
However, it can be diffcult to tie the benefits of market transformation back to Idaho
Power customers in a quantifiable manner.
As noted in the SRAs Comments, Idaho Power has questioned both the content
and value of NEEA activities in recent years. The Company has been cautious and
thoughtful in its evaluation of whether the benefits described in the Application justif the
cost associated with participation in NEEA. Idaho Power engaged in extensive
negotiations with NEEA to allow for active management by the Company and an
opportunity to stop funding the Allance if Idaho Power determines that would best serve
its customers. Based on NEEA's past performance and the value its proposed services
offer to Idaho Power customers and the region, Idaho Power is now comfortable with
the terms of NEEA participation as embodied in the Agreement, and believes NEEA wil
fulfil the terms as promised.
JOINT REPLY COMMENTS OF IDAHO POWER COMPANY AND NEEA - 3
II. THIRD-PARTY EVALUATION
Comments by the ICL, SRA, and ICIP discussed the need for independent
monitoring and evaluations to ensure that customers receive value for their energy
efficiency dollars. To be clear, NEEA programs are evaluated by independent third
parties on a regular schedule. These program evaluations are publicly available on
NEEA's website (http://ww.nwallance.org/research/evaluationreports.aspx).ln
addition, those that pertain to Idaho Power in 2008 and 2009 were filed by the Company
in Supplement 2: Evaluations of its Demand-Side Management 2009 Annual Report in
Case No. IPC-E-10-09.
Verification of certain direct benefits to Idaho Power customers is more diffcult to
assess. NEEA is currently working with its funders to explore and analyze more
granular methods of assigning energy savings to geographic areas. NEEA may be able
to assign some saving to the zip code level, other savings to cities or counties, but,
ultimately, some savings may have to be allocated to the funder's geographic areas, as
has been done in previous funding cycles.
Idaho Power would also note that it does not agree with ICIP's characterization of
energy efficiency program results in its Comments. ICIP refers to how these programs
wil not reduce demand on Idaho Power's electrical system, yet the programs cited are
designed to focus on energy efficiency with less emphasis on demand reduction. Idaho
Power primarily achieves demand savings though its demand response programs. Two
of the programs cited, Custom Efficiency and Energy Star( Homes, are determined to
be cost-effective from a utility cost perspective based on the value of the electric
savings. The third program cited, Consumer Electronics Initiative, is a market
JOINT REPLY COMMENTS OF IDAHO POWER COMPANY AND NEEA - 4
transformation program aimed at changing the price and availabilty of more energy
effcient products from less effcient models currently available. This is the type of
program that would be difficult for Idaho Power to offer in the absence of NEEA.
iv. CONCLUSION
Idaho Power believes its participation in NEEA wil provide customers with cost-
effective energy effciency benefits and market transformation services that Idaho Power
cannot presently provide on its own. NEEA programs are thoroughly reviewed by
independent third-party evaluators, the results of which have and wil be made available
to the Commission and the public. However, the Company acknowledges that not all
benefits can be quantified as benefitting Idaho Power customers directly. If the
Commission is not comfortable with this and wishes the Company to fund other cost-
effective DSM activities in lieu of NEEA, Idaho Power will do as the Commission directs.
DATED at Boise, Idaho, this 3rd day of May 2010.
£dtl~
LISA D. NORD ROM
Attorney for Idaho Power Company
JOINT REPLY COMMENTS OF IDAHO POWER COMPANY AND NEEA - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 3rd day of May 2010 I served a true and correct
copy of the foregoing JOINT REPLY COMMENTS OF IDAHO POWER COMPANY AND
NEEA upon the following named parties by the method indicated below, and addressed
to the following:
Commission Staff
Weldon B. Stutzman
Deputy Attorney General
Idaho Public Utilties Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
-- Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-- Email Weldon.stutzmantãpuc.idaho.gov
Snake River Allance
Ken Miler
Snake River Allance
P.O. Box 1731
Boise, Idaho 83701
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email kmilertãsnakeriverallance.org
Industrial Customers of Idaho Power
Peter J. Richardson
Gregory M. Adams
Richardson & O'Leary, PLLC
515 North 2ih Street
Boise, Idaho 83702
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email petertãrichardsonandolearv.com
gregtãrichardsonandoleary.com
Dr. Don Reading
6070 Hil Road
Boise, Idaho 83703
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email dreadingtãmindspring.com
Idaho Conservation League
Ben Oto
Idaho Conservation League
710 North Sixth Street
P.O. Box 844
Boise, Idaho 83701
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email bottotãidahoconservation.org
£Æ'!~
Lisa D. Nordst m
JOINT REPLY COMMENTS OF IDAHO POWER COMPANY AND NEEA - 6