20081128Ottens Revised Direct.pdf

Brad M. Purdy
Attorney at Law
2019 N. 17th St.
Boise, Idaho 83702
[phone]
Cell: [phone]
Fax: [phone]
RECErVED
lOUBNOY 28 PH I: 19
IOAH.O p' It"' 'r'. . . U.:;l_hJ
UTILITIES COMMISSION
November 28, 2008
Ms. Jean Jewell
Commission Secretar
Idaho Public Utilities Commission
472 W. Washigton St.
Boise, ID 83702
RE: Cas No. IPC-E-08-10 - Revised testimony of Teri Ottens on behalf of CAP AI
Dear Ms. Jewell:
Enclosed, pleae find an original and seven copies of the Revised Direct Testimony ofTeri
Ottens. The existing testimony contains two formatting errors. The "Q" on line 1 of page 5
should be an "A" and the "A" appearg on line 15, page 6 should be deleted. These changes do
not alter the pagination of the previously fied testimony nor are they substantive. I have also
provided an electronic version for the court repoiter. Than you for your cooperation in ths
matter.
cc: all paries
I., ~.
REef:n\;..1'
Z008 NOV 28 PH I: 19
Brad M. Purdy
1 Attorney at Law
BarNo. 34722 2019 N. 17th St.
3 Boise,ID. 83702
[phone]
4 FAX: [phone]
bmpurdyCfhotmail.com
5 Attorney for Petitioner
Communty Action Parership
6 Association of Idaho
IDAHO PUBL G
UTIL.IT. Il:f;: .cn~nl (;C¡n..i. li-'h.J Vh..l..i '....i.,~..l:'4
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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IN THE MATTER OF THE APPLICATION OF9 OF IDAHO POWER COMPANY FOR AUTHORITY
TO INCREASE ITS RATES AN CHAGES10 FOR ELECTRIC SERVICD TO ELECTRIC
11 CUSTOMERS IN THE STATE OF IDAHO
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) CASE NO. IPC-E-08-10
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COMMUTY ACTION PARTNERSIDP ASSOCIATION OF IDAHO
DIRECT TESTIMONY OF
TERIOTTENS
(Revised)
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DIRECT TESTIMONY OF TERI OTTENS 1
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I. INTRODUCTION
Please state your nae and business address.
My nae is Teri Ottens. I am the Policy Director of the Communty Action Parership
Association ofIdao headquaered at 5400 W. Franin, Suite G, Boise, Idaho, 83705.
On whose behalf are you testifying in ths proceeding?
The Communty Action Parership Association of Idao ("CAP AI") Board of Directors
asked me to present the views of an expert on, and advocate for, low income customers 0
IDAHO POWER CAPAI's paricipation in ths proceeding reflects our organzation's
view that low income people are an importt par ofIdaho Power's customer base, and
that these customers will be adversely impacted by the proposed changes to the
Company's electrc service schedules.
Please describe CAP AI's organzation and the fuctions it performs, relevant to its
involvement in ths case.
CAPAI is an association of Idao's six Communty Action Parerships, the Communty
Council of Idaho and the Canyon County Organization on Aging, Weatherization and
Human Services, all dedicated to promoting self-suffciency though removing the causes
and conditions of povert in Idaho's communties.
What are the Communty Action Parerships?
Communty Action Parerships ("CAPs") are private, nonprofit organzations that fight
povert. Each CAP has a designated service area. Combining all CAPS, every county in
Idaho is served. CAPS design their varous programs to meet the unque needs of
communties located withn their respective service areas. Not every CAP provides all of
the followig services, but all work with people to promote and support incrased self-
suffciency. Progrs provided by CAPS include: employment preparation and dispatch,
education assistace child care, emergency food, senior independence and support,
DI.CT TESTIMONY OF TERI OTTENS 2
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clothg, home weatheriation, energy assistace, afordable housing, health care access,
and much more.
Have you testified before this Commission in other proceedings?
Yes, I have testified on behalf of CAP AI in numerous cases involving PacifiCorp, Idaho
Power Company, AVISTA, and United Water.
II. SUMMAY
Please sumarze your testimony in ths case?
First, CAP AI is concerned that there are a considerable number of customers sitting on
the margin of becoming low-income, or at the margin of being able to even pay their
utilty bils. A rate increase of 15%, especially those who rely on electrc space heating,
could prove devastating. Along these lines, CAP AI proposes an adjustment to Idao
Power's proposed first tier block rate for residential customers.
Second, CAPAI proposes an increase in fuding to Idao Power's low-income
weatherization program.
Third, CAP AI proposes that Idaho Power implement an energy efficiency
education program to low-income customers as described herein.
Four, CAPAI recommends that Idaho Power provide monthly arearage reports.
III. RECOMMNDATIONS
Why has CAP AI intervened in ths paricular proceeding?
CAP AI is concerned that the combined proposed increases in fees and rates will add to
the already unwieldy energy cost burden that low income familes in Idao face,
paricularly in these uncertin economic times. This is of signficant importce to low-
income Idao customers and those who must provide services to them.
Can you provide povert statistics for Idaho?
DIRCT TESTIMONY OF TERI OTTENS
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1 A:According to the Idaho Deparent of Commerce, 12.6% of the State's population, when
2 using the 2006 Census data falls with federal povert guidelines and an additional
3 12.4% fall withn the state gudelines set at 150% of povert levels. The 2006 Census
4 reveals that those living in povert are categorized as 8.7% elderly, 15.1% children, 9.8%
5 all other famlies, 28.5% single mothers and 26.4% all others.
6 Q:How does ths translate to energy "affordabilty?"
7 A:According to the U.S. Deparent of Energy, the "afordabilty burden" for total home
8 energy is set nationwide at 6% of gross household income and the burden for home
9 heating is set at 2% of gross household income. In Idaho, there was a gap in the
10 2006/2007 heating season of over $123 milion between what Idahoans can aford to pay
11 (based on federal stadads) for energy and what they actuly paid. Whle ths gap
12 increased by $26.7 million from the previous year, the LIHEAP fuding only increased
13 by $1.8 millon.Curently, the LIHEAP program sends approximately $12.2 millon
14 (for energy assistace, weatherization and admstration) to Idaho.
15 Q:How do these increases proposed by Idao Power directly impact its low-income
16 customers?
17 A.Due to Idao Power's lack of low income data tracking CAPAI canot precisely answer
18 ths question. However we believe that ths rate increase, coming on top of past recent
19 increases and the recent cost of living increases in food and fuel will have a signficant
20 impact upon our customers. Already, without ths increase, the CAP's serving Idaho
21 Power's terrtory have seen an approximate 25% increase in calls for assistace and man
22 of these are from "new" clients, or those never seen before askig for assistce. The
23 additional burden caused by an over 15% increase in utilty rates will only increase the
24 needs of those in povert or on the edge.
25 Q.What does CAP AI feel could assist ths customer base?
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CAP AI is most concerned about the level of the rate increase proposed by Idao
Power and the proposed tier structue for the residential class. The proposed rate increas
of over 15% will present a deepening burden on low income famlies and cause a rate
shock for even those living on the margin of povert. We know tht low income
customers have a higher energy burden and that they are the group of customers most
likely to be disconnected due to non-payment, paricularly after the witer months when
their burden is highest, and that the impact of increased fees will be signficant upon ths
customer group.
We also have concerns about the proposed tier levels. By Idaho Power's own
testimony an average monthly residential customer's energy use is 1,065 kWh (in 2007).
According to Company witness Courey Waites, the U.S. Deparents of Housing and
Urban Development estimates that the "baseline" level of electrcity usage (only lighting
and basic, home applicances) nationwide rages from 700-850 kWh per month, not
including space heating or air conditionig. Witness Waites believes that even ths is too
low and estimates, by relying upon average sprig and fall usage, a baseline load for
Idaho Power's customers is 806-838 kWh/mo. Testimony of Courtney Waites, pp. 10-11.
As a result, witness Waites proposes increasing the existing first tier from 300 to 600
kWh. Whle CAP AI commends Idaho Power for recognzing the disparty between
actul baseline usage, not even including heating or air conditionig, and the amount
included in the tier, a movement to only 60% of actul baseline load is not adequate to
recognze those whose usage of electrcity is at a bar minimum and fails to send the
proper incentive to those who are slightly above baseline usage to reduce their
consumption to fall entirely or almost entirely with the cheaper first tier, thereby which
would promote energy conseration.
DIRECT TESTIMONY OF TERI OTTENS 5
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1 Instead, the Company proposes a rate tier at 600 kWh which indicates that no
2 matter how much one conserves, they will not likely come in under ths tier, paricularly
3 if they rely upon electrc heat and/or air conditionig. If the purose of the tier was to
4 promote conservation, it should be set at a higher level so as to be attinable. In addition,
5 while the Census does not correlate age of housing with income of tenants, through the
6 CAP's extensive statewide experience, we find that low income famlies are most likely
7 to be located in housing tht is aging because this housing is the least expensive to rent or
8 buy. Aging housing equates with less energy effcient constrction and in some cases, no
9 energy effciency measures at alL. Whle a low income famly might be interested in
10 conservation measures and, in fact, may even be trying to implement such measures, the
11 likelihood of success without extensive resources is smalL. The conclusion is that these
12 famlies will, in most cases, be unable to stay under the tier level proposed by the
13 Company to avail themselves of the best rates. If the level is set at an uneasonably low
14 level then low income famlies generally will not benefit from ths proposal.
15 One of the programs tht help low income customers to reduce their utilty bil is Idaho
16 Power's highy successful weatherization program. Ths program allows the CAP's to
1 7 provide energy efficiency measures to a home, not only reducing the electric bil but
18 providing a long ter solution by continuig to reduce electrc costs in the futue. We
19 believe that increasing ths program fuding to allow for weatherization of more low
20 income homes would be highy desirble (curently only 10% of the homes receiving a
21 LIHEAP benefit are weatherized). Since the last major increase implemented by Idaho
22 Power in 2004, with a few exceptions, the fuds curently being offered by Idaho Power
23 have been exhausted by our agencies. In the agencies where they have not been
24 exhausted there have been extenuating circumstaces. These have included:
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DIRECT TESTIMONY OF TERI OTTENS
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1) In the fit year of the program, agencies had to ramp up their sta and
application process to meet the new revenue levels. This took some agencies more time
th other to get up to speed.
2) Because other fuding resources are time specific (in that they must be spent
in specific time periods) and the Idao Power fuding is more flexible, agencies have
purosely and strategically cared over fuds from one year to another to make up for
anticipated fuding gaps. Ths has enabled them to keep crews workig year round.
However, with an anticipated increase in federal fuding, CAP AI proposes that
Idaho Power increase its weatherization fuding through phased progr over thee
years, to accommodate the growth capabilties of each agency.
Why should this Commssion approve an increased level of weatherition fuding for
Idaho Power.
The answer to that is several-fold. First, low-income weatherization has proven to be a
cost effective resource for Idaho Power. Ths addresses resource needs for the Company,
while having the added benefit of assisting low-income customers. Weatherization
constitues a tre resource acquired at a favorable price. Curently, there are literally
thousands of households tht otherwse quaify and could benefit for and from the
progr but for whom there are insuffcient fuds to provide them the opportty of
giving to, and benefitting from, the program. Thus, there is a signficant back log of
eligible residences to be weatherized and inadequate fuding to accomplish ths.
Thus, while CAPAI believes that Idao Power's low-income weatherization
program is quite successfu and constitutes a cost effective conservation program there
remains a considerable amount of relatively low-cost energy to be tapped by the program.
What amount of increase and level of low-income weatherization fuding do you propose
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I propose a three-year phase in to the followig anual, tota amount of fuding:
2010 - $1.5 millon
2011 - $1.75 millon
2012 - $2.05 millon
5 Q: Wil the foregoing increase in low-income weatherization fuding eliminate the backlog:
6 A: No. It will certy contrbute toward the problem, but will fall well short of eliminating7 it.
8 Q: IS there another program tht Idao Power could implement that would benefit the
9 Company's low-income customers?
10 A: Yes. A second program that has been tied to weatherization is the provision of energy
11 effciency education. Curently only those homes quaifying for weatherization
12 assistace curently receive such education. The expansion of energy efficiency
13 education to more low income homes receiving LIHEAP would help those homes to
14 reduce their energy burden, thereby reducing their individua bil amounts. Curently
15 only 10% of homes receiving LIHEAP receive this education. Consequently we believe
16 that the company could assist in fuding a low income energy consrvation education
17 program in the amount of $25,000 anually for each agency in its service terrtory, for a
18 total of $125,000.00 anually, to brig ths education directly to those most in need.
19 Whle we commend the education programs Idaho Power already has in place, we also
20 recognze that a household in trouble may not tae time to read a bil stuer on
21 conservation. In addition, without resources, or help in finding resources, to implement
22 conservation measures the curent program has minimum impact on the low income
23 familes it serves. CAP AI believes education to be a highly effective mechansm for
24 reducing energy demand, thereby providing system-wide benefit to all ratepayers.
25 Q: Has any other electrc utilty implemented a program ofthe natue described above?
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Yes. As par of the settlement in the most recent AVISTA rate case (AVU-E-08-01),
A VISTA agreed to implement a conservation education program as I describe above.
AVISTA agreed to fud the program in the amount of $25,000.00.
Why are you proposing a greater amount of fuding for Idaho Power?
The conservation inormation that will be provided to customers under ths program tae
place in person and are administered by the CAP agencies. There is only one CAP
agency in AVISTA's service terrtory. There are five CAP agencies operating in Idao
Power's service area. Furermore, Idaho Power has roughly 4-5 times as many Idaho
customers as A VISTA. My proposal for Idaho Power, therefore, is relatively equal with
that agreed to by AVISTA.
In your opinion, will ths program have system-wide benefits? Yes. Like any other cost-
effective conservation program, such as Idaho Power's low-income weatherization
program, the implementation of the proposed conservation education program will
constitute a cost effective energy resource.
Are there other measures that the Company can tae to assist low-income customers?
CAP AI also recognzes that while it is unealistic for Idaho Power to track low income
customers (other than LlHEAP recipients) due to privacy issues that there are curent
tools to assist in recogning trends, we propose that a monthy arearge report be
compiled and provided to all interested paries so that CAP AI can stay on top of these
trends without waiting for a rate case to obta this inormation. PacifiCorp curently
provides this information. In addition, a fuer condition of an ararage study, simlar
to that provided by PacifiCorp is that Idao Power would attempt to identify past trends,
possible causes and solutions regarding the problem of arearages
IV. CONCLUSION
Does that conclude your testimony?
DIRECT TESTIMONY OF TERI OTTENS
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1 A:Yes it does.
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DIRCT TESTIMONY OF TERI OTTENS 10
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RECEIVED
208ft NOV 28 PM 2: 28CERTIFICATE OF SERVICE _ til ¡P.! lC1 \0 I '"''"..1.. ""I,.V';
I HEREBY CERTIFY that on the 28th day of November, 2008~T!khked t~~V~~~e~ ~~~2 foregoing COMMUITY ACTION PARTNRSHIP ASSOCIATION OF IDAHO'S REVISED
3 DIRCT TESTIMONY OF TERI OTTENS via emaiL. Hard copy via U.S. Mail will follow.
4 Weldon Stutzan
Deputy Attorney General
5 Idaho Public Utilties Commission
472 W. Washigton St.
6 Boise,ID 83702
weldon. stutzmanCfpuc.idaho. gov
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BARTON L. KLINE, ISB #1526
LISA D. NORDSTROM, ISB #5733
9 DONOVAN E. WALKER, ISB #5921
Idaho Power Company
10 P.O. Box 70
Boise, Idao 83707
11 Telephone: [phone]
Facsimile: [phone]
12 bkline(fidaopower.com
Inordstrom(fidaopower.com
13 dwalkerCfidahopower.com
14 Jobn'R. Gale
15 Vice President, Reguatory Affairs
ldab Power Company
16 P.O. Box 70
Boise, Idaho 83707
17 rgaleCfidahopower .com
18 Industral Customers of Idaho Power
c/o Peter J. Richardson
19 Richardson & O'Lear
515 N. 27th St
20 P.O. Box 7218
21 Boise, Idaho 83702
Telephone: [phone]
22 Fax: [phone]
peterCfrichardsonandolear.com
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Dr. Don Reading
24 6070 Hil Road
Boise, Idaho 83703
25 [phone] Tel
DIRCT TESTIMONY OF TERI OTTENS 1
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[phone] Fax
1 dreadingCfmindspring.com
2 Randall C. Budge
3 Eric L. Olsen
Racine, Olson, Nye, Budge &
4 Bailey, Charered
P.O. Box 1391; 201 E. Center
5 Pocatello, Idaho 83204-1391
Telephone: [phone]
6 Fax: [phone]
rcbCfracinelaw.net
7 eloCfracinelaw.net
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9 Anthony Yanel
29814 Lae Road
10 Bay Vilage, Ohio 44140
Fax: [phone]
11 tonyCfyanel.net
12 Michael L. Kur, Esq.
Kur J. Boehm, Esq.
13 BOEHM, KUTZ & LOWRY
36 East Seventh Street, Suite 1510
14 Cincinnti, Ohio 45202
15 Telephone: [phone] Facsimile: 513-421-2764
E-mail: mkurzCfBKLlawf.com
16 kboehm~BKLlawf.com
17 Kevin Higgis
Energy Strategies, LLC
18 Parkside Towers
215 South State Street, Suite 200
19 Salt Lake City, Uta 841 11
E-mail: khgginsCfenergystrat.com
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21 Conley E. Ward
Givens Pursley, LLP
22 601 W. Banock St.
P.O. Box 2720
23 Boise,ID 83701-2720
cewCfgivenspursley.com
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Denns Peseau, PhD
25 Utilty Resoures, Inc.
DIRECT TESTIMONY OF TERI OTTENS 2
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1500 Libert St. SE, Suite 250
Salem, OR 97302
dennytempCfyahoo.com
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3 Arur Bruder
Offce of General Counsel
U.S. Deparent of Energy
1000 Independence Ave., SW
Washigton DC, 20585
Arur .BruderCfhg.doe. gov
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Ken Miler
Snake River Allance
P.O. Box 1731
Boise,ID 83701
kmilerCfsnakeriveralliance.org
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j2C~_~Brad M. PudY ~~
DIRECT TESTIMONY OF TERI OTTENS