20100914Comments.pdf

°Er.r:il. _.-
Benjamin J. Otto
ISB No. 8292
710 N 6th Street
PO Box 844
Boise,ID 83701
Ph: [phone] x 12
Fax: [phone]
botto~idahoconservation.org
iOlD SEP '3 PM 4: 58
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UT\LlTiES
Attorney for Idaho Conservation League
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE )
APPLICATION OF IDAHO POWER )
COMPANY FORA PRUDENCY )
DETERMINATION OF ENERGY )
EFFICIENCY RIDER FUNDS SPENT IN )2008-2009 )
CASE NO. IPC-E-1O-09
COMMENTS OF IDAHO
CONSERVATION LEAGUE
COMES NOW the Idaho Conservation League ("ICL"), through its attorney of
record Benjamin Otto, pursuant to the Notice of Modified Procedure fied July 28,2010,
with the following comments regarding Idaho Power's request to determine as prudent
the $50.7 milion spent on energy effciency programs during 2008 and 2009.
ICL, the PUC Staff, and this Commission have oft repeated the mantra that energy
effciency continues to be the least cost resource available for Idaho Power. In this case
we step back and review actual spending and energy savings in an attempt to uncover any
truth behind this mantra. Thankflly, after reviewing Idaho Power's DSM reports for
2008 and 2009, we find our belief to be well founded - albeit with some naggng details.
Appendix 4 of the Company's 2009 DSM report reveals that ev~ry program in the
portfolio reduced energy consumption at a levelized cost below the marginal cost of
electricity. Simply put, spending money to help customers reduce their energy demand
ICL COMMENTS 1 September 13,2010
proves less expensive than generating or purchasing the power to meet that demand. In
fact, some programs appear to be so cost effective that ICL encourages the Company to
redouble their efforts to increase customer participation. The naggng details arise upon
closer inspection of individual programs, measures within programs, the allocation of
spending to DSM revenue intake, and the continued imbalance between energy effciency
rider revenue and program spending.
Industrial and Commercial Programs
Both the Custom Effciency and Easy Upgrades, according to the utilty cost test,
return approximately six times the benefits as the costs. i While these results are
encouraging, ICL agrees with the Comments of the Staff fied in this case that using a Net
to Gross ratio of 100% for the Custom Effciency is unlikely to be accurate.2 While this
unrealistic factor in the UTC formula is not sufficient to deem and of the Company's
spending as imprudent, the Commission should expect a more refined calculation in
future cases. Likewise, while Staffs Attachment B reveals that the Industrial class
accounts for $6.1 milion in expenses while returning only $3.7 in DSM revenue, the high
cost to benefit ration may justify this cross subsidization.3 However, because class cross
subsidization is occurring ICL encourages the Commission to consider whether this result
is in fact just.
Irrigation Programs
...""y
i DSM 2009 Annual Report Supplement 1, at 43 (Custom Effciency VCT ratio of 6.37%) and 45 (eay
upgrades VCT ration of 6.24%).
2 Comments of Staff at 6, IPC-E-1O-09 (September 13, 2010).3 ¡d. at Attchment B.
ICL¿COMMENTS 2 September 13,2010
Like the Industrial class, the Irrigation class accounts for more in DSM
expenditures than they contribute in revenue. While the spread in the Industrial class is
4%, in the Irrigation class it is 22%, more than a 2: 1 ration between expenses and
revenue.4 Admittedly, much of the Irrigation class expense is attributable to the peak
shaving capacity of this class. ICL acknowledges that limiting summer time peak is a
critical part of mitigating future electrical rate increases and infrastructure development.
However, this one program accounts for almost one third of the entire DSM budget. The
size, characteristics, and value of this resource most closely resemble a supply side
resource. Because of this, ICL submits that it might be more prudent for the Commission
to consider shifting the cost of this program into the PCA mechanism.
Residential Programs
ICL acknowledges that the residential class presents the most complicated and
administratively diffcult class to make energy effciency gains. Each home contributes a
small portion of demand reduction. However, cumulatively this class presents a large
body of potential savings. Moreover, by increasing efforts to make individual homes
more effcient, thereby reducing individual utilty bils, ICL submits that public
acceptance for DSM spending will improve. ICL encourages Idaho Power to increase
their marketing and education efforts in order to increase their gains in this customer
class.
Upon reviewing the 2008 and 2009 DSM reports, it is clear that Idaho Power
should be working with Intermountain Gas to implement energy conservation incentives.
4/d.
ICL COMMENTS 3 September 13,2010
Many of the residential class programs focus on building envelope and heating both home
and water. Currently Idaho Power is the only utilty in their servce area providing
incentives these. This spending would be more effective, and therefore more prudently
incurred, ifIntermountain Gas also contributed. ICL acknowledges this issue is outside
of the realm of the present case, but the matter is important enough to raise for the
Commission, and the Company's consideration.
Enhanced Commitment
As part of the Fixed Cost Adjustment Mechanism process, Idaho Power promised
to show an enhanced commitment to pursuing all cost effective DSM opportunities.s
One area the Company's own analysis shows to be cost effective is purs':ing legislative
Appliance standards.6 According to Idaho Power's own analysis, pursuing appliance
standards would be a prudent and cost effective Demand Side Management Measure.
While the present case asks whether Idaho Power's previous DSM spending was prudent,
ICL submits the Commission could take this opportunity to comment upon the
Company's missed cost effective and prudent opportunity.
Conclusion.
5 IPC-E-04-15, Stipulation at 5. (Order approving original FCA pilot wherein Idao Power stated: "The
Company wil promote the adoption of energy codes to achieve improved levels of effciency in new
commercial and residential construction and appliance standards in Idaho consistentWith the Model
Conservation Stadards released by the Nortwest Power and Conservation Council or that exced the
2003 IECC and ASHRAE 90.
codes" )6 See 2009 DSM Annual Report at 116-117; 2009 IRP at 43 - 44 (December 2009).
ICL COMMENTS 4 September 13,2010
After reviewing Idaho Power's Application, Annual DSM Reports, the Production
Requests and Responses in this case ICL believes the Company has made a good faith
effort to meet the guidelines and expectations outlined in the MOU For Prudency
Determination ofDSM Expenditures. In considering this Application, ICL respectfully
requests the Commission consider our above comments.
DATED this 13th day of September 2010.
Respeß; submitt,?f
BenjmOtto
Idaho Conservation League
ICL COMMENTS 5 September 13,2010
CERTIFICATE OF SERVICE
I hereby certify that on this 13th day of September, 2010, true and correct copies
of the foregoing PETITION TO INTERVENE were delivered to the follòwing persons via
the method of servce noted:
Hand delivery:
greg~richardsonandoleary .com
Jean Jewell
Commission Secretary (Original and
seven copies provided)
Idaho Public Utilties Commission
427 W. Washington St.
Boise, ID 83702-5983
Electronic Mail:
Lisa D. Nordstrom
Donovan E. Walker
Darlene Nemnich
Greg Said
Idaho Power Company
P.O. Box 70
Boise, ID 83707
lnordstrom~idahopower.com
dwalker~idahopower.com
dnemnich~idhaopower.com
gsaid~idahopower.com á~iEric L. Olsen
Racine, Olson, NYE, Budge & Bailey
Chartered
201 East Center
P.O. Box 1391
Pocatello, ID 83204
Benjamin J. Otto
Anthony Yankel
29814 Lake Road
Bay Vilage, Ohio 44140
Fax: [phone]
tony~ankei.net
Peter J. Richardson
Greg M. Adams
515 N. 27th St.
PO Box 7218
Boise, ID 83702
Peter~richardsonandoleary.com
ICL COMMENTS 6 September 13,2010