20100316Application.pdf

LISA D. NORDSTROM
Lead Counsel
Inordstrom(ãidahopower.com
e:1DA~POR~
An IDACORP Company
March 15,2010
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-10-09
IN THE MA ITER OF THE APPLICA TlON OF IDAHO POWER
COMPANY FOR A PRUDENCY DETERMINATION OF ENERGY
EFFICIENCY RIDER FUNDS SPENT IN 2008-2009
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Idaho Power
Company's Application in the above matter. Please note that Idaho Power Company
has filed its Demand-Side Management 2009 Annual Report as Attachment No. 3tothis
Application. The Company intends this filing to satisfy the reporting requirement set
forth in Order No. 29419 (Case No. IPC-E-03-19).
Very truly yours,;f~j¿'~~
Lisa D. Nordstrom
LDN:csb
Enclosures
cc: Pete Pengilly (w/o encls.)
Theresa Drake (w/o encls.)
Darlene Nemnich (w/o encls.)
P&RS Files (w/encls.)
Legal Files (w/encls.)
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, 10 83702
LISA D. NORDSTROM (ISB No. 5733)
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
Inordstromtãidahopower.com
dwalkertãidahopower.com
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
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BEFORE THE IDAHO PUBLIC UTILITI S COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR A ) CAS NO. IPC-E-10-09
PRUDENCY DETERMINATION OF )
ENERGY EFFICIENCY RIDER FUNDS )
SPENT IN 2008-2009. )
)
Idaho Power Company ("Idaho Powet' or "the C mpany"), in accordance with RP
052 and RP 201, et seq., hereby respectfully make Application to the Idaho Public
Utilties Commission (the "Commission") for an 0 der designating Idaho Powets
expenditure of $50,701,740 in Energy Efficiency Rider ("Ridet') funds in 2008 and 2009
as prudently incurred expenses.
In support of this Application, Idaho Power repr sents as follows:
i. INTRODUCTION
1. Idaho Power considers energy efficienc and demand response to be an
important and necessary part of a balanced approach 0 meeting the electricity needs of
APPLICATION - 1
its customers. Because energy effciency provides both economic and operational
benefis, the pursuit of all cost-effective demand-side resources is a primary objective
for Idaho Power even as new supply-side resources are added to the Company's
resource portolio. Idaho Power accomplishes this objective with input and consultation
with its Energy Efficiency Advisory Group ("EEAG"). Formed in May 2002 with twelve
members representing customers, state agencies, and other stakeholders, Idaho Power
relies on the EEAG for a broad range of recommendations, including input on new
program proposals, modifcations to existing programs, and overall expenditures of
Rider funds.
2. Since the Rider was instituted in 2002, Idaho Power has implemented
andlor managed a broad array of cost-effective demand-side management ("DSM")
programs and energy efficiency initiatives. These programs benefi customers two-fold
with opportunities to lower individual energy consumption and by reducing upward
pressure on the Company's collective rates by minimizing the need to generate
additional power or buy power from the wholesale market. Idaho Powets quarterly
customer relationship survey in 2009 indicated that the percentage of customers who
have a positive perception of Idaho Powets energy effciency efforts has steadily
grown, with a 44 percent increase in positive customer perception from 2003 to 2009.
3. Idaho Power is also recognized nationally for its positive performance in
DSM program performance. The American Council for an Energy-Effcient Economy
("ACEEE") annually publishes a scorecard that ranks individual states in terms of
commitment to energy efficiency. In 2008, the ACEEE identified Idaho as the "most
improved" state in the nation, having moved up twelve spots, compared to the 2007
APPLICATION - 2
scorecard. Also, on Sunday, January 24, 2010, the New York Times ran a substantial
story about Idaho Powets innovative electric service concepts, programs, and results.
The article titled 'Why Is Idaho Power Paying Its Customers?" focused primarily on the
demand response programs and recognized Idaho Powets accomplishments in
regulatory strategy, resource planning, energy efficiency, and sustainabilty. The Times
story saluted Idaho Power as "vanguard" and acknowledged the Company's efforts as
"especially striking given the push for energy effciency is generally associated with
coastal states like California and Massachusetts, not with a state whose electric rates
are among the lowest in the country." The story was also publicized by the San
Francisco Chronicle and the Idaho Statesman.
II. 2008 AND 2009 DSM RESULTS
4. In the last two years, Idaho Powets energy efficiency and demand
response programs continued to increase in number and customer participation. Idaho
Power currently offers their Idaho customers sixteen energy effciency programs, three
demand response programs, several educational initiatives, and offers savings to
customers through market transformation efforts.
5. Program performance in energy savings and demand reduction made
significant advances in the last two years. Overall, annual energy savings from
Idaho Powets energy effciency activities increased by 62 percent from 2007 to 2009,
posting 140 Gigawatt hour ("GWh") savings in 2008 and an additional 148 GWh savings
in 2009. Demand reduction for Idaho Powets demand response programs more than
quadrupled from 2007 to 2009. Idaho Powets DSM programs reduced load by 48
APPLICATION - 3
megawatts ("MW") in 2007, 61 MW in 2008, and 218 MW in 2009. This reduction is
larger than the capacity of any of Idaho Power's peaker plants near Mountain Home.
6. To achieve these results, total expenditures on DSM-related activities
almost doubled from the 2007 total expenditure level of $15.7 milion. Approximately
$21 millon was invested in DSM resources in 2008, $18.8 millon of which was from the
Idaho Rider. In 2009, $35 millon was spent on DSM-related activities, $31.8 milion of
which was funded by the Idaho Rider. A summary of program expenditures funded by
the Rider in 2008 and 2009 is provided in Attachment NO.1.
7. Results show these programs are providing a cost-effective resource to
customers and the Company. In 2009, all energy effciency programs but one produced
savings at a benefit/cost ratio greater than 1.0 when evaluated at a total resource cost
perspective, a utilty cost perspective and a participant cost perspective. The one
exception is the small Holiday Lighting program, which although cost-effective from a
participant cost and utilty cost perspective, was not cost-effective from the total
resource perspective. The incremental costs of LED bulbs lowered the benefit/cost ratio
from the total resource cost perspective to be under 1.0.
II. THE DSM 2008 AND 2009 ANNUAL REPORTS
8. In support of its Application requesting the Commission accept the
Company's 2008 and 2009 DSM expenditures funded by the Rider as prudently
incurred, Idaho Power presents its DSM 2008 and 2009 Annual Reports. Idaho Power
originally filed its Demand-Side Management 2008 Annual Report with the Commission
on March 13, 2009, to comply with Order No. 29419 issued in Case No. IPC-E-03-19.
APPLICATION - 4
For the Commission's convenience, Idaho Power has included the Demand-Side
Management 2008 Annual Report as Attachment NO.2 to this Application.
9. Idaho Power and the Commission Staff subsequently agreed upon the
contents of a more comprehensive utilty annual DSM report to faciltate an objective
and transparent Staff evaluation of Idaho Powets DSM efforts. Those agreed-upon
principles ("guidelines") were set forth in the Memorandum of Understanding for
Prudency Determination of DSM Expenditures ("DSM MOU"). The DSM MOU was filed
with the Commission on January 25, 2010, as part of the Stipulation filed in Case No.
IPC-E-09-09. The DSM MOU can be found in Supplement 2 to the Demand-Side
Management 2009 Annual Report included as Attachment NO.3.
10. The Demand-side Management 2009 Annual Report, included as
Attachment No. 3 to this Application, is intended to satisfy the DSM reporting obligation
set forth in Order No. 29419. As agreed to in the DSM MOU, Idaho Powets DSM 2009
Annual Report now contains the following:
a. Template. Idaho Power built upon the format used in its previous
DSM Annual Reports to enhance its DSM Annual Report in 2009. In addition to the
main document, there are two new Supplements, Supplement 1, Cost-Effectiveness,
and Supplement 2, Evaluation.
b. Table of Contents. The Demand-Side Management 2009 Annual
Report, Supplement 1 and Supplement 2 each have a detailed Table of Contents
showing where specific program information can be found as well as the location of the
cost-effectiveness analyses and the evaluation table.
APPLICATION - 5
c. Introduction Section. This highlights section can be found on pages
3 through 16 of the Demand-Side Management 2009 Annual Report. It provides an
overview of program process evaluations, impact evaluations, and updated
assumptions used to calculate program cost-effectiveness.
d. Cost-Effective Section. Supplement 1, Cost-Effectiveness,
provides information on Idaho Powets overall approach to calculating cost-
effectiveness, a discussion on the relationship between Idaho Powets DSM plan and
the Northwest Power and Conservation Council's 6th Power Plan, and provides a list of
data inputs, assumptions, and sources for each individual programslmeasures used for
the basis of cost-effective estimates.
e. Evaluation Section. Supplement 2, Evaluation, includes an
overview of Idaho Powets approach to their evaluation efforts, the DSM MOU, a three-
year Evaluation Plan, minutes of Energy Effciency Advisory Group meetings held in
2009, a list of Market Effects evaluations conducted in 2008 and 2009 by the Northwest
Energy Efficiency Allance ("NEEA"), and a list of research studies and evaluations
conducted by Idaho Power in 2008 and 2009. The remainder of Supplement 2 contains
a complete copy of each of the Idaho Power research studies and evaluations.
Supplement 2 also contains a CD which holds more than 2,000 pages of the 2008 and
2009 Market Effects Evaluations conducted by NEEA.
f. Program Specific Section. The Demand-Side Management 2009
Annual Report contains the following information for each program or initiative: (1) a
table listing the summary of the program participation, (2) performance and costs for
2009 and 2008, (3) a description of the program, (4) 2009 activities, (5) a cost-
APPLICATION - 6
effectiveness discussion, which includes whether a new analysis was conducted and
new assumptions used, and (6) a section on customer satisfaction and evaluations
providing an overview of process, impact, and market effect evaluations that were
conducted. This section also refers to studies included in Supplement 2.
g. Expenses Without Direct Energy Savings. In the section titled
"Other Programs and Activities," the Demand-Side Management 2009 Annual Report
describes education initiatives and other non-energy saving DSM efforts. These efforts
support the Company's overall DSM agenda. Other programs and activity expenses
are shown in Appendices 2-4 of the Demand-Side Management 2009 Annual Report
and Attachment NO.1.
IV. EVOLUTION OF THE 2009 REPORT
11 . Idaho Power believes that the Demand-Side Management 2008 Annual
Report and the enhanced Demand-Side Management 2009 Annual Report provide a
sufficient basis for the Commission to determine the prudency of these expenses.
Idaho Power has also attempted to address Staffs expectations for cost-effectiveness
tests, methods, and evaluations as indicated in Attachment No. 1 to the MOU.
However, because the MOU was finalized in December of 2009, it was not possible to
meet all of Staffs expectations for this first report of 2008 and 2009 activities. However,
Idaho Power worked to address the following areas:
a. Cost-Effectiveness Measurements. In the Demand-Side
Management 2008 Annual Report, Idaho Power calculated cost-effectiveness from the
utilty and total resource perspectives at the program level across the life of the
programs. In its 2009 Report, Idaho Power calculates cost-effectiveness from the
APPLICATION - 7
participant, utilty, and total resource perspectives at the program level, except for those
programs with no customer costs. This includes demand response programs which are
evaluated at the utilty and total resource cost perspectives. Idaho Power also
evaluates cost-effectiveness from the utilty and the total resource cost perspectives for
each measure within a program, where the measures are not interactive. In future DSM
annual reports, Idaho Power wil also include the Rate Payer Impact cost-effective test
as specified in the MOU.
b. Net-to-Gross Adjustments. For this 2009 Report, Idaho Power
used these ratios as an input to cost-effectiveness calculations where available and
appropriate. For a detailed discussion, see pages 1-4 of Supplement 1: Cost-
Effectiveness.
c. Program Evaluations. Idaho Power uses third-party evaluators
when appropriate for the specific study or evaluation being planned. For example, the
list of studies and evaluations completed by Idaho Power in 2008 and 2009 found in
Supplement 2 shows sixteen impact evaluations or studies. Of these sixteen, twelve
were conducted by third parties. In terms of reporting overall evaluation costs, for the
2008 and 2009 time periods, Idaho Power did not track internal evaluation costs
separately from other indirect overhead expenses. Going forward, Idaho Power wil
report the total cost of evaluating its programs and wil provide the names of primary
outside evaluators and the titles of internal evaluators for each evaluation listed.
V. MODIFIED PROCEDURE
12. Idaho Power believes that a technical hearing is not necessary to consider
the issues presented herein and respectully requests that this Application be processed
APPLICATION - 8
under Modified Procedure, i.e., by written submissions rather than by hearing. RP 201
et seq. If, however, the Commission determines that a technical hearing is required, the
Company stands ready to present its testimony and support the Application in such
hearing.
Vi. COMMUNCIATIONS AND SERVICE OF PLEADINGS
13. Communications and service of pleadings with reference to this
Application should be sent to the following:
Lisa D. Nordstrom
Donovan E. Walker
Idaho Power Company
P.O. Box 70
Boise, ID 83707
Inordstrom~idahopower.com
dwalker((idahopower.com
Darlene Nemnich
Greg Said
Idaho Power Company
P.O. Box 70
Boise, ID 83707
dnemnich((idahopower.com
gsaid((idahopower.com
VII. REQUEST FOR RELIEF
14. As described in greater detail above, Idaho Power Company respectfully
requests that the Commission issue an order designating Idaho Power's expenditure of
$50,701,740 in Energy Effciency Rider funds in 2008-2009 as prudently incurred
expenses.
Respectfully submitted this 15th day of March 2010.
~Q~~
ïS D.NORDSli OM
Attorney for Idaho ower Company
APPLICATION - 9
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-10-09
IDAHO POWER COMPANY
ATTACHMENT NO.1
SUMMARY OF PROGRAM EXPENDITURES
Idaho Power Company
Idaho Energy Effciency Rider Expenditures (Dollars)
Sector/Program 2008 2009 Total Program
Energy EffciencylDemand Response
Residential
AlC Cool Credit...... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .....$2,922,985 $3,305,814 $6,228,799
Ductless Heat Pump Pilot(a)... ... ... ...... ... ...... ...... .......0 192,264 $192,264
Energy Effcient Lighting... ... ... ... ... ... ... ... '" ... ... ... ... ...1,011,850 1,190,065 $2,201,915
Energy House Calls ...............................................448,992 479,174 $928,166
ENERGY STAR~ Homes... ............ .........................294,579 348,829 $643,408
Heating & Cooling Effciency Program... ... ...... ...... ... ...466,094 458,216 $924,310
Home Improvement Program(b)... ... ... ... ... ... ... ... ... ... ....123,454 321,140 $44,594
Home Products Program... ... ... ... ... ... ... ... ... ... ... ... ... ...245,219 498,980 $744,199
Rebate Advantage... ...... ...... ... ... ......... ...... ..............79,547 43,954 $123,501
See Ya Later Refrigerator(a)... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0 297,587 $297,587
Weatherization Solutions for Eligible Customers(C)... ......51,670 160,459 $212,129
Commercial/Industrial
Building Effciency .................................................1,006,025 1,300,466 $2,306,491
Easy Upgrades...... ...... ...... ............ ......... ...... .........2,922,340 3,213,388 $6,135,728
FlexPeak Management(a)... ... ... ... ... ... ... ... ... ... ... ... ... ...0 528,681 $528,681
Holiday Lighting... ......... ......... ......... ... ...... ...... ........28,782 33,673 $62,455
Custom Effciency... ...... ......... ......... ......... ...... ........3,948,617 5,816,305 $9,764,922
Irrigation
Irrigation Effciency Rewards......... .................. ..........1,878,960 2,112,391 $3,991,351
Irrigation Peak Rewards ..........................................1,373,855 9,131,929 $10,505,784
Energy Effciency/Demand Response Total 16,802,969 29,433,315 $46,236,284
Market Transformation
Northwest Energy Effciency Allance (NEEA) .............894,913 919,850 $1,814,763
Consumer Electronics Initiative(a)..............................0 160,762 $160,762
Market Transformation Total 894,913 1,080,612 1,975,525
Other Programs and Activities
Residential
Residential Energy Effciency Education Initiative..........142,969 183,143 $326,112
Commercial
Commercial Education Initiative ................................69,059 114,516 $183,575
Other
Energy Effciency Direct Program Overhead...... ...... .....135,788 146,007 $281,795
Local Energy Effciency Funds...... ... ... ... ... ... ... ... ... ... .22,714 5,622 $28,336
Other Programs and Activities Total 370,530 449,288 $819,818
Indirect Program Expenses
Residential Overhead(d)...... ... ... ... ... ... ... ... ... ... ... ... ... ....0 112,984 $112,984
Commercial/Industrial/Irrigation Overhead(e)............ ... ...0 139,101 $139,101
Energy Effciency Accounting and Analysis... ... ... ... ... ...792,480 600,870 $1,393,350
Energy Effciency Advisory Group... ............ ... ... ... ... ...2,148 3,434 $5,582
Special Accounting Entries......................................17,236 1,860 $19,096
Indirect Program Expenses Total 811,864 858,249 $1,670,113
Grand Total $18,880,276 $31,821,464 $50,701,740
New program in 2009
(b) Attic Insulation Pilot in 2008
(el Home Weatherization Pilot in 2008
(d) Reorganization/Previously recorded under Energy Effciency Accounting and Analysis in 2008
(e) Reorganization/Commerical Leader added in 2009