20081110Yankel Direct.pdf

LAW OFFICES OF
W. MARCUS W. NYE
RANDALL C. BUDGE
JOHN A. BAILEY, JR.
JOHN R. GOODELL
JOHN B. INGELSTROM
DANIEL C. GREEN
BRENT O. ROCHE
KIRK B. HADLEY
FRED J. LEWIS
ERIC L. OLSEN
CONRAD J. AIKEN
RICHARD A. HEARN, M.D.
DAVID E. ALEXANDER
LANE V. ERICKSON
PATRICK N. GEORGE
SCOTT J. SMITH
STEPHEN J. MUHONEN
BRENT L. WHITING
JUSTIN R. ELLIS
JOSHUA D. JOHNSON
JONATHON S. BYINGTON
DAVE BAGLEY
CAROL TIPPI VOLYN
THOMAS J. BUDGE
CANDICE M. MCHUGH
JONATHAN M. VOLYN
MARK A. SHAFFER
RACINE OLSON NYE BUDGE & BAILEY
CHARTERED
201 EAST CENTER STREET
POST OFFICE BOX 1391
POCATELLO, IDAHO 83204.1391
TELEPHONE [phone]
FACSIMILE [phone]
ww.racinelaw.net
SENDER'S E-MAIL ADDRESS:elo\9racinelaw.net
November 10, 2008
Jean Jewell, Secretar
Idaho Public Utilities Commission
P.O. Box 83720
Boise, Idaho 83720-0074
Re: IPC-E-08-23
Dear Jean:
BOISE OFFICE
101 SOUTH CAPITOL
BOULEVARD. SUITE 208
BOISE, IDAHO 83702
TELEPHONE: [phone]
FACSIMILE: [phone]
IDAHO FALLS OFFICE
477 SHOUP AVENUE
SUITE 203A
IDAHO FALLS, 10 83402TELEPHONE: [phone]
FACSIMILE: [phone]
COEUR D'ALENE OFFICE
250 NORTHWEST
BOULEVARD. SUITE IOSA
COEUR D'ALENE, 1083814TELEPHONE: [phone]
ALL OFFICES TOLL FREE
(877) 232-6'0'
LOUIS F. RACINE (1917-2005)
eL1AM D. lNON. OF COUNSEL-\ $- øøc- --\0 arñ?i ..(J'o -0-0 00c:3:cn :=~.:, ."~~ ..Ui(~ -:(fÕ:z
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Enclosed for filing you wil find the original and nine copies of the Direct Testimony of
Anthony Yanel filed in support of the Stipulation filed by Idaho Power Company. We are also
submitting a searchable CD with the testimony.
Sincerely,
ERIC L. OLSEN
ELO:nj
Enclosures
cc: Donovan Walker, Idaho Power (via mail and e-mail)
Scott Woodbur, Commission Staff (via mail and e-mail)
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20ue NOV 10 AM II: 13
IDbLU').urn. nr."BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION/TIES
IN THE MATTER OF IDAHO POWER )
COMPANY'S PETITION FOR APPROVAL )
OF CHAGES TO THE IRRGATION PEAK )REWARS PROGRA )
)
CASE NO. IPC-E-08-23.
IDAHO IRRGATION PUMPERS ASSOCIATION, INC.
DIRCT TESTIMONY
OF
ANTHONY J. YANKEL
NOVEMBER 7, 2008
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I. INTRODUCTION
PLEASE STATE YOUR NAM, ADDRESS, AN EMPLOYMNT.
I am Anthony J. YaneL. I am President of Yane i and Associates, Inc. My
address is 29814 Lake Road, Bay Vilage, Ohio, 44140.
WOULD YOU BRIEFLY DESCRIBE YOUR EDUCATIONAL
BACKGROUN AND PROFESSIONAL EXPERIENCE?
I received a Bachelor of Science Degree in Electrcal Engineering from Caregie
Institute of Technology in 1969 and a Master of Science Degree in Chemical
Engineerig from the University of Idaho in 1972. From 1969 through 1972, I
was employed by the Air Correction Division of Universal Oil Products as a
product design engineer. My chief responsibilties were in the areas of design,
star-up, and repai of new and existing product lines for coal-fired power plants.
From 1973 though 1977, I was employed by the Bureau of Air Quality for the
Idaho Deparent of Health & Welfare, Division of Environment. As Chief
Engineer of the Bureau, my responsibilties covered a wide range of investigative
fuctions. From 1978 though June 1979, I was employed as the Director of the
Idaho Electrical Consumers Offce. In that capacity, I was responsible for all
organzational and techncal aspects of advocating a varety of positions before
varous governenta bodies that represented the interests of the consumers in the
State of Idao. From July 1979 though October 1980, I was a parer in the firm
of Yane i, Eddy, and Associates. Since that time, I have been in business for
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myself. I am a registered Professional Engineer in the states of Ohio and Idaho. I
have presented testimony before the Federal Energy Regulatory Commission
("FERC"), as well as the State Public Utility Commissions ofIdao, Montaa,
Ohio, Pennsylvana, Uta, and West Virgina.
II. BACKGROUND
ON WHOSE BEHAF AR YOU TESTIFYING IN THIS CASE?
I am testifying on behalf of the Idaho Irgation Pumpers Association ("IIPA").
WHAT is THE PURPOSE OF YOUR TESTIMONY IN TilS CASE?
I will support the appropriateness of the Stipulation offered in ths case from the
perspective of the Idaho Irrigation Pumpers Association.
HAS THERE BEEN A GREAT DEAL OF EFFORT PUT INTO THE
DEVELOPMENT OF THE PROPOSED CHANGES TO THE
IRRGATION PEAK REWARS PROGRAM AND THE STIPULATION
PROPOSED IN THIS CASE?
Yes. There have been active discussions between Idaho Power, the IIPA, and
occasionaly the Commission Staff since the conclusion ofIdaho Power's 2007
general rate case.
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WH HAS THERE BEEN SO MUCH EFFORT TO DEVELOP THE
CHAGES THAT ARE PROPOSED IN TIDS CASE?
The proposed changes to the Irgation Peak Rewards program are substantial,
compared to the program that exists today. The Peak Rewards program that is
presently in place is based upon the use of timers that automatically interrpt
Irrigation pumps on specific days of the week and at predetermined times for
these interrptions. The interrptions take place on each of these specified day
and times over the entire June though August timeframé. These interrptions are
unelated to the need for interrptions or the level of load on the system. In other
words the interrptions tae place in order to reduce the broad sumer peak, but
are not tageted at the actual system peak. As such, the interrptions must be
evenly distrbuted throughout the week in a maner that best reflects the general
expectation of system peak load occurg. Because it is necessar to use ths
pre-aranged schedule under timer-based interrptions, some interrptions will
occur durng system peak times, but it is just as likely that the a similar level of
interrptions will occur at times when peak conditions are not being encountered.
The program changes that are contemplated in the Stipulation in ths case
are substantial. The benefits to the Company, all of its customers, and the
Irrgators is reflective of the substatial changes that are being proposed to the
Irgation Peak Rewards program. Being added to the program are interrptions
at the "Company's Option". Although interrptions that come at the "Company's
Option" can be far more focused and effective for the Company than the simple
predetermned interrptions that occur using timers, the impact of not having a
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predetermined schedule is very diffcult for the Irigators that need to water crops
in a maner that is far more dictated by natue than by a utilty's price schedule.
Thus, what has been worked out between the Company, IIP A, and the
Commission Sta is a set of terms, conditions, and prices that produce what is
perceived at this time to be the best set of operating parameters for the Company,
the Irrigators, and for ratepayers in general.
A "COMPAN OPTION" IRRGATION INTERRUPTIBLE PROGRA
WAS PUT IN PLACE TilS YEAR ON THE PACIFICORP SYSTEM IN
IDAHO. IS THIS PROGRAM MODELED AFTER THAT PROGRA?
Only to a limited extent. Both utilties wil now have a "Company Option"
program for interrpting Irrigation load during peak sumer times. Because of
ths, there are many similarties between the two programs. However, the faring
in the PacifiCorp service area is different than that which prevails in the Idaho
Power service area. For this reason, the programs are similar, but certainly not
the same.
III. SUPPORT FOR THE STIMUATION
WHT BENEFITS WIL THE STIPULATION BRIG TO THE SYSTEM
AND THE IRRGATORS?
Although the present timer-based interrptions offer a quantifiable benefit to the
system, the Company Option interrptions will do far more. The present timer-
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based interrption program is only yielding approximately 40 MW of actul
anua system peak reduction. In 2007 it took a tota of 182 MW of biling
demand enrollment in order to accomplish the 40 MW of system peak reduction.
If 182 MW of biling demand could have been interrpted at the time of the
system peak, it would have produced a system benefit of 206 MW of reduction
(182 MW ofload times losses at 1.13).
It is worthy of note that the introduction of the Company Option
interrptions on the PacifiCorp system not only greatly increased the flexibilty of
the program and interrptions schedule, but brought a tremendous response of
additional Irrgation load to the program. When there was only a timer-based
program in the PacifiCorp servce area, only 100 MW of Irgation load
paricipated. When the Company Option was included in the PacifiCorp program,
215 MW of Irgation load (out of a possible load of approximately 255 MW)
joined the program. Although the same percentage increase in program
paricipation is not expected in the Idaho Power service area, the fact that
Irrgators are estimated to contribute 655 MW to the anual system peak, there is
a lot of room for additional load reductions to be offered than the 40 MW that has
been realized previously. From the IIPA's perspective, it would not be unealistic
to anticipate 325 MW of possible system peak reduction in the Idaho Power
service area.
HAS THE COMPAN CALCULATED A POSITIVE COSTIBENEFIT
RATIO FOR THE NEW PROGRA?
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Yes~ it has. The Company has calculated a costienefit ratio of 1.27 for the fist
year of operation of the Company Option program.
SHOULD THE COMMSSION MERELY JUGE THIS PROGRA BY
ITS FIRST YEAR COSTIBENEFIT RATIO?
No. Over 25% ofthe first year costs ofthe program are associated with
equipment installation, administration, promotion, and evaluation. There will
obviously be a reduction of many of these costs afer the first year when this
equipment has already been installed and the program is simply "on-going".
Removing 25% of the costs of the program, while keeping the benefits the same,
wil greatly increase this costienefit ratio. Although it is important for the
Commission to realize that the Company Option program will be costieneficial
during its first year, it is also important to realize that this ratio will be
substantially increased in the future.
WILL THE COMPANY OPTION PROGRAM BE BENEFIAL TO THE
IRRGATORS?
Generally speakng, yes. The program calls for credits to be paid to the Irgators
for their paricipation in the progr. The credits represent an increase over the
credits that are being paid today. However, one must recognize that there are also
costs to the Irgators when they undergo interrptions, especially those that take
place at the Company's Option, with no more than a days notice before the
interrption. Like the Company, each Irgator will have to do his own
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cost!enefit analysis regarding his paricular situation and the credits being
offered. It is anticipated that the credits being offered will exceed the costs
encountered by many Irrgators and thus, induce greater paricipation. However,
the costs of paricipation to some Irgators will not be outweighed by the credits
(benefits) provided, and these customers will not paricipate in the program.
DO YOU HAVE ANY CONCLUDING REMARS REGARING THE
PROPOSED COMPANY OPTION PROGRAM AN THE PROPOSED
STIPULATION?
Yes. The program as offered and the Stipulation as wrtten go a long way to
being of great benefit to the Company, the Irrgators, and the other system
customers. The program should be approved by the Commission as soon as
possible in order to get all of the elements in place for next year's Irrgation
Season. The IIP A expects to continue to work with the Company on the
promotion and refinement of the Irrgation Peak Rewards program in the futue.
The program as outlined in the Stipulation is a major step forward for all
customers of Idaho Power and we hope to implement it for the 2009 Irrgation
Season and thus, the 2009 sumer peak period.
DOES THIS CONCLUDE YOUR TESTIMONY AT TilS TIME?
Yes.
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