20080519NWEC-RNP Comments.pdf

Jean Jewell
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Suzanne Leta Liou (suzanne~rnp.orgi
Thursday, May 15, 20082:01 PM
Jean Jewell
Nancy Hirsh; Inordstrom~idahopower.com; bkline~idahopower.comComments to IPC-E-08-03 Id h .
IPCo EE rider ¡ncr 20#D5C84.pdf; ATT121530.txt a 0 PU~lic Utilties CommissionOttice of the Secretary
RECEIVEDFollow up
Flagged MAY i 5 2008
Hi Jean,Boise, Idaho
Enclosed are joint comments on behalf of the Northwest Energy Coalition and Renewable
Northwest Project regarding Idaho Power Co.' s revised energy efficiency rider request.
Unfortunately our comments do not include an electronic signature for me; we have been having
technical difficulties with our scanner.
Best,
Suzanne
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May 15,2008
Jean Jewell
Commission Secretary
Idaho Public Utilties Commission
472 West Washington
Boise, ID 83702
Re: Docket IPC-E-08-3 Idaho Power Company application for authority to revise the
energy effciency tariff schedule 91
Dear Ms. Jewell:
Please accept these comments on behalf of the NW Energy Coalition and the Renewable
Nortwest Project. Both organizations have previously paricipated in Commission proceedings.
The NW Energy Coalition has been a member ofIdaho Power's Energy Effciency Advisory
Group since its inception. We urge the Commission to approve Idaho Power's increase in the
taiff rider and expansion of the rider scope to include small-scale renewable resources. We have
a number of suggestions, most significant is to limit the amount of rider fuds for small-scale
renewable energy projects until the Company develops a comprehensive strategy for supporting
net-metered renewables.
Increase the Rider to Support Expanded Effciency Programs
Over the past five years, Idaho Power has ramped up its effciency and demand
management programs to captue untapped energy savings and peak load reductions. With the
results of its 2004 DSM resource assessment laid out in front of it, the Company began to
internalize the significant need to scale up its DSM activities. The December 2004 rider increase
filing that proposed an increase from .5% to 1.5% also included a recommendation to increase
the rider to 2.7% in 2007. Even then the Company projected program budgets requiring more
investments. The Company has worked diligently to respond to the energy and peak savings
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opportities and now has a track record in program development and delivery of energy
savings.
The Coalition has been a consistent voice on the EEAG callng for the Company to
expand its program offerings, broaden its marketing efforts and increase participation
expectations for all its customer classes. The Coalition believes that all of the Company
programs are cost-effective and should be ramped up even further, than proposed in this fiing, to
continue expanding the market for effciency programs and services. The anual savings and
peak load reductions achieved in 2007 are just beginning to reach the minimum level of deliver
of energy savings that regional and Company analysis shows is possible.
· According to the Northwest Power and Conservation Council, Idaho Power's
general share (based upon load) of the 2500 aMW of efficiency potential in the
region through 2025,is approximately 12 aMW of cost-effective efficiency each
year.
· The 2004 DSM assessment provided a cost-effective high and accelerated path for
both energy and capacity savings. Both of these targets exceed current levels of
acquisition. Idaho Power selected the "moderate scenario" to set its goals.
As part of the preparations for development of the 2009 Integrated Resource Plan the
Company wil update its comprehensive DSM assessment. All indications are that the level of
energy savings opportities are as great or greater given advances in technology, integrated
building design and high power price forecasts.
It is clear to us that the fuds raised by the 2.5% tariff rider wil quickly be insuffcient to
achieve all the cost-effective opportities. In fact, the program budgets referenced in the
Company's fiing in this docket do not account for additional programs curently being discussed
in the EEAG nor the addition of small-scale renewable energy projects. Mr. Tatum's testimony
indicates that the proposed increase in the rider wil just barely cover projected expenses in 2010
if the PUC allows collection of labor and administrative expenses in base rates. We
recommend that the Commission consider the requested 2.5% rider as a minimum level
necessary for fulfillng the Company's objectives.
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Expansion of Rider Mission to Support Small-Scale Renewable Energy Projects
We support inclusion of small-scale renewable energy investments as part of the scope of
the DSM rider as they can reduce load, paricularly during peak demand periods, in a similar
maner as the AC Cool and irrigation load control programs. Idaho Power's service territory is
ripe for deployment of customer-side of the meter renewable energy technologies. As our
society acts to constrain carbon emissions, innovations are expected to rise and small-scale
renewable energy costs are expected to decrease significantly within the next five years. It is the
right time for Idaho Power to get in this game in a serious way. That said we have thee
concerns:
1) The Company should acquire all cost effective energy savings -- which will likely require
a fuding level greater than that proposed in this docket.
Given the budget levels presented in this filing and the proposed rider fuding, we are
concerned that the Company may choose to back off, however slightly, from its efficiency
implementation efforts in order to create a presence with customers interested in small-scale
renewable energy projects. We acknowledge that this is not a stated objective of the Company
and they have been clear that their goal is to acquire all cost-effective energy savings. Yet, there
is only so much money available in the budget and collected by the rider. Not all identified goals
can be achieved with this constraint.
The cost-effectiveness of small-scale renewable energy systems (PV for example) wil be
significantly enhanced if the home on which it is installed is an energy-efficient home. We
recommend that individual small-scale renewable energy projects be linked to implementation of
energy effciency measures in that home or small business.
2) The Company should prepare a plan for support of small-scale renewable energy
projects.
We have no doubts that the Company and its customers wil see benefits from a strong
program that encourages installation of small-scale renewable energy projects. We also believe
that the Company should have a strategy and plan for use of ratepayer funds on these tyes of
resources. A resource assessment for these tyes of projects is appropriate and waranted. We
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strongly support an initial program for small-scale renewable energy projects, but believe that
rider fuds should be limited until the Company develops a small-scale resource strategy with an
accompanying budget to capture this importt resource. One option is for the limit to star at
$500,000 and go up to $700,000 in 2010 or until such time as the strategy and budget are
complete and any increase in the rider is proposed.
3) The scope language needs to be more focused on small-scale projects.
The applicabilty language in Schedule 91 (Tatum Exhibit 5) should be wrtten more
narrowly to focus use of rider fuds for "small scale renewable energy projects" rather than
"renewable energy options." The later language could be constred as allowing rider fuds to
support supply side resources. It is our understanding that the Company does not intend to use
rider fuds in this manner. Given this, we hope they would agree to a more focused description
of the scope of the rider.
Other Issues
The Company is proposing to use only the utility cost test to determine cost-effectiveness
for the renewable energy projects it considers. In general, the Coalition supports use ofthe total
resource cost test over use of the utility cost test, yet, in this particular application it makes sense
given the potential peak savings benefits that would come from a solar PV program for example.
However, the customer contrbution to the PV system could make the TRC drop below one.
The PUC should clarify that the utilty cost test is to be used as the sole cost effectiveness tool
for the small-scale renewable energy project only. All other energy effciency and demand
response programs (excluding low income weatherization) wil use both the utility cost test and
the total resource cost test.
We have no concerns with the transfer of labor and administrative costs into the
operations and maintenance cost center for consideration in the next general rate case. In fact,
we believe that this type of action is consistent with our principles around decoupling. Since the
rider is a percentage of base revenue it could decline if the DSM staff do an outstanding job.
Company staff should be secure in their employment and have no disincentive to pursue the
Company's goal of acquiring all cost-effective energy savings. In addition, moving labor and
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administratiy¡e costs to base rates frees up more rider fuds to be used for direct support of
energy efficiency and load management programs and incentives.
Removal of the rate cap for residential customers wil have no appreciable impact on the
amount paid each month into the rider. In fact, since the tariff is figued on a per kWh basis
those using more energy contrbute a proportionately more fuds into the rider in support of
energy efficiency programs. Since the Company is offering an expanding number of programs
to all customer segments and classes there is no rationale for maintaining the caps.
We have no concerns with the consolidation of the DSM tariff rider and fixed cost
adjustment line items on the bil. However, we note that the fixed cost adjustment mechanism is
a pilot program. It may make more sense to wait on the merging of these two line items until
after the pilot period. That said, both are small relative to other charges on the bil and the
modest changes from year to year due to the fixed cost adjustment are capped.
In conclusion, we applaud the Company's efforts at ramping up its energy effciency
efforts. The Coalition and RNP wil always push the Company to increase the pace of cost
effective energy savings acquisition and to do more to reduce peak power demand; this filing
continues to support the path the Company is on and increases their capacity to serve their
customers. Than you for the opportnity to support the Idaho Power proposed increase of the
effciency rider. We are happy to answer any questions you may have.
Sincerely,
~~
Nancy Hirsh
Policy Director
NW Energy Coalition
nancyØlnwenergy.org
206-621-0094
Suze Leta Liou
Senior Policy Advocate
Renewable Northwest Project
suzanneßYrnp.org
503-223-4544
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