20100913Comments.pdf

LAW OFFICES OF
RACINE OLSON NYE BUDGE Be BAILEY
CHARTEREDW. MARCUS W. NYE
RANDAL.L. C. BUDGE
JOHN A. BAIL.EY, JR.
JOHN R. GOODEL.L.
JOHN B. INGEL.STROM
DANIEL. C. GREEN
BRENT O. ROCHE
KIRK B. HADL.EY
FRED J. L.EWIS
ERIC L.. OL.SEN
CONRAD J. AIKEN
RICHARD A. HEARN, M.D.
L.ANE V. ERICKSON
FREDERICK J. HAHN, III
DAVID E. AL.EXANDER
PATRICK N. GEORGE
SCOTT J. SMITH
JOSHUA D. JOHNSON
STEPHEN J. MUHONEN
CANDICE M. MCHUGH
CAROL. TIPPI VOL.YN
BRENT L.. WHITING
JONATHON S. BYINGTON
DAVE BAGL.EY
THOMAS J. BUDGE
JONATHAN M. VOL.YN
MARK A. SHAFFER
JASON E. FLAIG
Jean D. Jewell, Secretar
Idaho Public Utilities Commission
PO Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-IO-09
Dear Ms. Jewell:
201 EAST CENTER STREET
POST OFFICE BOX 1391
POCATEL.L.O, IDAHO 83204-1391
TEL.EPHONE [phone]
FACSIMIL.E [phone]
ww.racinelaw.net
SENDER'S E-MAIL.ADDREss:elo(gracinelaw.net
September 13, 2010
BOISE OFFICE
101 SOUTH CAPITOL
BOULEVARD, SUITE 208
BOISEi IDAHO 83702
TEL.EPHONE: (208) 385-00'1
FACSIMILE: (208) 433-0'67
IDAHO FALLS OFFICE
477 SHOUP AVENUE
SUITE 107
POST OFFICE BOX 50698IDAHO FALLS, 1083405
TELEPHONE: (208) 528'6'0'
FACSIMILE: [phone]
AL.L OFFICES TOLL. FREE
[phone]
LOUIS F. RACINE (1917.2005)
WIL.LIAM O. OLSON, OF COUNSEL
~~ø~-0."(.
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Enclosed for fiing in the captioned matter, please find the original and seven (7) copies of
Idaho Irrigation Pumpers Association, Inc. 's Comments in the above matter.
ELO:elo
Enclosures
cc: Servce List
Sincerely,
ERIC L. OLSEN
li
Eric L. Olsen ISB# 4811
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
P.O. Box 1391; 201 E. Center
Pocatello, Idaho 83204-1391
Telephone: [phone]
Fax: [phone]
zmo SEP 13 PM 3: 56
Attorneys for Idaho Irrgation Pumpers Association, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR AN
ORDER DESIGNATING THE ENERGY
EFFICIENCY RIDER FUNDS SPENT BY
THE COMPANY DURING 2008-2009 AS
PRUDENTLY INCURRD
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CASE NO. IPC-E-1O-09
IDAHO IRRGATION PUMPERS ASSOCIATION, INC.'S COMMENTS
IDAHO IRIGATION PUMPERS ASSOCIATION, INC. ("lIP A"), by and through its
attorneys, hereby respectfully submits the following comments with regard to Idaho Power
Company's ("Idaho Power") application for an order designating that the monies that have been
spent during 2008-2009 on its demand side management, i.e. energy effciency and demand
response programs, were prudent.
COMMENTS
The IIP A would like to complement Idaho Power for the efforts it has made over the last
10 years or so in the development of the vared programs that we have today and the overall
energy and demand reductions that have been brought about because oftheseprogrars.
The purose of this case is to evaluate the prudency of the varous energy efficiency and demand
response programs operated by Idaho Power. During the last couple of years the Commission
Staffhas placed an increased emphasis upon a more rigorous documentation of the costs and
Idao Irrgation Pumpers Association, Inc. 's Comments - 1
benefits of these programs. This is how it should be and the IIP A applauds the Commission
Staffs efforts. Yes, it is important that these programs save energy and reduce peak load, but
they must do so in a cost-effective maner.
As a foundation for this more rigorous review of energy efficiency and demand response
program costs, a Memorandum of Understanding ("MOU") was entered into on December 21,
2009 between the Staff and Idaho Power as well as Avista Utilities and PacifCorp (d/b/a Rocky
Mountain Power). A stipulation between the Commission Staff and Idaho Power (based upon
that MOU) was filed with the Commission on Janua 25,2010 and called for a more rigorous
analysis of the costs and benefits ofthese programs to be filed in the Company's next demand
side management report and all futue reports.
The stipulation recognzed that the time was short for makng such wholesale (but
needed) changes in the information that was to be filed in the next report. The diffcultly in
implementing the rigorous calculations/review that was dictated by the stipulation can be seen
from many of the responses that Idaho Power provided to the Staff regarding reviews that the
Staff would have liked to have seen for various programs operated in 2009. From the IIPA's
perspective, the timing of that stipulation was late enough such that it would be hard to see how
it would have a meaningful impact upon Idaho Power's demand side management report for
2009 that would be fied in 2010. However, the IIP A does not believe that the lack of rigor in
the 2009 DSM report should be considered grounds for a finding of impudence. The next
demand side management report for 2010 should have had adequate time and notice to allow
Idaho Power to fully analyze most, if not all, of its energy efficiency and demand response
programs in a more rigorous maner and report on those findings.
Idaho Irgation Pumpers Association, Inc.' s Comments - 2
It should come as no surprise that the IIPA has a strong interest in Idaho Power's Peak
Rewards program, where Irgation customers are interpted on a designated day or at the
Company's option in order to reduce sumer peak loads. The Irrgation Peak Rewards program
not only helps all Idaho Power customers by significantly lowering the system peak, and thus the
need for peakng facilties, but it also gives the Irrgators an opportity to control their own
costs. Irrgators' crops need a certain amount of water to get profitable yields. But if Irrgators'
crops can be watered in a fashion that reduces the costs to the system and to the Irgators, then
the LIP A supports such programs. Especially, during these tough economic times, the savings
that Irrgators have received from paricipating in the Peak Rewards Program has allowed them
to make ends meet.
The IIP A believes that the Peak Rewards Program is the best and most cost effective
demand response program operated by Idaho Power (and Rocky Mountain Power as well). This
belief is confirmed by the data provided in Idaho Power's "Supplement 1: Cost-Effectiveness"
to its "Demand-Side Management 2009 Anual Report". At page 5 of that Supplement, the
Residential Cool Credit Program is listed as only having a benefit/cost ratio of 1.09 under both
the Utility Cost Test and the Total Resource Cost Test. On page 7 of that Supplement, the
Commercial/Industral FlexPeak Management is listed as having a slightly better ratio of 1.11
under both of these tests. By contrast, on page 9 of the Supplement, the Irrgation Peak Rewards
program is listed as having a much better benefit/cost ratio of 1.50 under both the Utilty Cost
Test and the Total Resource Cost Test.
Although Idaho Power's data demonstrates that the cost effectiveness of the Irrgation
Peak Rewards program is quite a bit better than either the Residential Cool Credit program or the
Commercial/Industral FlexPeak Management program, these ratios for the Idaho Power Peak
Idaho Irrgation Pumpers Association, Inc.' s Comments - 3
Rewards program are not in agreement with those supplied by Rocky Mountain Power for its
very similar programproduct. In Rocky Mountain Power's November 14, 2009 report to the
Commission entitled "Schedule 72 & 72A Idaho Irrgation Load Control Programs: 2009 Credit
Rider Initiative Final Report" at page 7, the benefit/cost ratio for PacifiCorp's Irrgation Load
Control program under the Utility Cost Test is similar at 1,52, but the Total Resource Cost ratio
is 2.72-eonsiderably higher. The IIP A does not contend that one ratio is "more correct" than
the other, but the fact that the Commission Staffhas an MOU with all of the major utilties in
Idaho to produce rigorous and meaningful values for the costs and benefits of these programs,
means that the ratios for similar programs should eventually become similar. The IIP A believes
that a uniform and rigorous benefit/cost test of all demand response programs wil put the
Irrgation Load Control program in a much better light than that which is even listed in Idaho
Power's 2009 report.
The IIP A believes that more detail needs to be provided by all utilities for all programs
and that these details and calculations should be similar such that comparsons between utilties
and programs can be readily made. It is hoped that virtally all of the same types of data and
methodology wil be used for calculating the costs and benefits of similar programs. It is in no
one's best interest to continue programs where the costs exceed the benefits. If such programs
exist on the Idaho Power system, the IIP A would suggest that at this time they either be modified
or abandoned. The IIPA is not as much interested in a disallowance of what may be termed
"imprudent costs" as simply an elimination or change of the program so as to discontinue the
waste of resources that may have been spent with good intentions, but where circumstances did
not work out.
Idaho Irrgation Pumpers Association, Inc.' s Comments - 4
CONCLUSION
In sumary the IIP A wish to commend Idaho Power for its efforts in its many DSM
programs and especially the Irgation Peak Rewards program. The MOU that was signed less
than a year ago wil greatly help bring rigor to the review of the benefit/cost ratios of these
varous programs and help direct future expenditures. Because the 2009 report came out shortly
after the MOU was signed, the lIP A has no basis for recommending a finding of imprudence
with respect to the 2008-2009 demand side management costs that are the subject of this case.
h L'~i' d f b 2 0DATED t is _., ay 0 Septem er, 01 .
i
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
By ~ERICL.O SE ~.~
Idaho Irrgation Pumpers
Association, Inc.
Idaho Irrgation Pumpers Association, Inc.' s Comments - 5
CERTIFICATE OF SERVICE
1A
I HEREBY CERTIFY that on this /3 day of September, 2010, I served a tre,
correct and complete copy of the foregoing document to each of the following, via U.S.
Mail or private courier, e-mail or hand delivery, as indicated below:
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
P.O. Box 83720
472 W. Washington Street
Boise, Idaho 83720-0074
j j ewell§puc.state.id. us
U.S. Mail/Postage Prepaid
E-mail
Facsimile
Overnight Mail
X Hand Delivered
Lisa D. Nordstrom
Donavan E. Walker
Idaho Power Company
P.O. Box 70
Boise, ID 83707-0070
InordstromØJidahopower .com
dwalkerØJidahopower.com
X U.S. Mail/Postage Prepaid
X E-mail
Facsimile
Overnight Mail
Hand Delivered
Darlene Nernich
Greg W. Said .
Director State Regulation
Idaho Power Company
P.O. Box 70
Boise,ID 83707-0071
dnernchØJidahopower.com
gsaidØJidahopower.com
X U.S. Mail/Postage Prepaid
X E-mail
Facsimile
Overght Mail
Hand Delivered
Benj amin J. Otto
Idaho Conservation League
710 N. 6th St./P.O. Box 844
Boise, ID 83702
dreadingØJmindspring.com
X U.S. Mail/Postage Prepaid
X E-mail
Facsimile
Overnight Mail
Hand Delivered
&n~ERICL.~ ~~
Idaho Irrgation Pumpers Association, Inc.' s Comments - 6