20110425Petition for Clarification.pdf

esIDA~POR(I
An IDACORP Company
RECE
LISA D. NORDSTROM
Lead Counsel
InordstromCâidahopower.com
April 22, 2011
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-10-27
IN THE MATTER OF AN INVESTIGATION OF APPROPRIATE COST
RECOVERY MECHANISMS FOR IDAHO POWER'S ENERGY EFFICIENCY
PROGRAMS
Dear Ms. Jewell:
Enclosed for filng please find an original and seven (7) copies of Idaho Power
Company's Petition for Clarification of Order No. 32217 in the above matter.
Very truly yours,
el f).Cr ~~
Lisa D. Nordstrom
LDN:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise. ID 83707
LISA D. NORDSTROM (ISB No. 5733)
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
InordstromCâidahopower.com
dwalkerCâidahopower.com
RECEIVED
20U APR 22 PM 4= 46
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MAnER OF AN INVESTIGATION
OF APPROPRIATE COST RECOVERY
MECHANISMS FOR IDAHO POWER'S
ENERGY EFFICIENCY PROGRAMS.
)
) CASE NO. IPC-E-10-27
)
) IDAHO POWER COMPANY'S
) PETITION FOR CLARIFICATION
) OF ORDER NO. 32217
)
Idaho Power Company ("Idaho Powet' or "Company"), pursuant to RP 33, 325,
331, et seq., and Idaho Code § 61-626, respectfully petitions the Idaho Public Utilties
Commission ("Commission") for clarification of Order No. 32217, dated April 1, 2011,
issued in Case No. IPC-E-10-27 ("the Orden. RP 325 provides that the Commission
may clarify any order on its own motion, and that any person may petition to clarify any
order. This Petition for Clarification is based on the following grounds:
i.
THE COMPANY SEEKS CLARIFICATION OF THE COMMISSION'S INTENT
REGARDING IDAHO POWER'S PURSUIT OF ALL COST-EFFECTIVE
DSM - EVEN IN EXCESS OF ENERGY EFFICIENCY RIDER REVENUES.
The Commission "Discussion" section of Order No. 32217 states that "Idaho
Power has properly responded to the Commission's directive to pursue all cost-effective
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32217 - 1
DSM programs, and the results have been significant and measureable." Order No.
32217 at 5. The Company appreciates the Commission's recognition of its efforts to
build a balanced portolio in which demand-side management ("DSM") plays a
significant role.
The Commission indicated that it "shares the parties' concern over the amount of
the Energy Efficiency Rider deferral balance." Id. The Order further states:
The gain in energy conservation programs has not come
without cost. The Commission increased Idaho Power's
Energy Efficiency Rider to 2.5% of customer base rates in
2008 and to 4.75% in 2009. Order Nos. 30560 and 30814.
Accordingly, Rider funds have increased to an expected $38
millon in 2011. As different programs are implemented and
evaluated, and become familar to customers, DSM program
expenditures have also increased. In recent years
expenditures have outpaced Rider funds. Idaho Power
anticipates total DSM expenditures for 2011 to be
approximately $43.4 milion, adding approximately $5.4
millon to the Rider deferral balance. Lobb Direct, p. 6.
Id.
The Company is concerned that this portion of the Order, in conjunction with the
fact that no additional source of funding was adopted, suggests that Idaho Power
should limit its cost-effective DSM expenditures to the level of revenue collected by the
Rider until these funding issues are resolved in a general rate case proceeding. Such
an interpretation is consistent with the advocacy of the Industrial Customers of Idaho
Power ("ICIP"), which argued that the Company could "address the problems it appears
to have with running up a negative balance in the EE rider account" by "scal(ing) back
programs" that are purportedly "not cost-effective and/or do not provide a direct benefi
to Idaho customers." Testimony of Dr. Reading at 10, II. 5-8.
Pending issuance of an order addressing DSM funding that resolves the negative
Rider balance, the Company respectfully requests the Commission clarify that Idaho
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32217 - 2
Power continue to pursue all cost-effective DSM - even in excess of Energy Efficiency
Rider ("Ridet') revenues.
II.
THE COMPANY SEEKS CLARIFICATION OF THE COMMISSION'S POSITION
WITH REGARD TO INCLUSION OF IDAHO POWER'S DEMAND
RESPONSE INCENTIVES IN POWER SUPPLY EXPENSES GENERALLY.
The Commission's Order rejecting the Stipulation submitted in this case indicated
that "the funding adjustments proposed by Idaho Power in this case ultimately may be
appropriate to ensure DSM programs are adequately funded and that the Company
recovers approved expenditures in a timely manner." Order No. 32217 at 5. The
Commission went on to state:
The specific proposals, however, raise issues and concerns
that are more properly vetted in a rate case. Expenditures
that are expected to be included in rate base, or that are
included in the PCA after determining a normalized cost for
customer base rates, present issues of concern for all
customers. As recognized by the parties that signed the
Stipulation, including costs for recovery in the PCA affects
cost allocations among customer classes. These and other
issues are best considered in a general rate proceeding.
Accordingly, the Commission wil not approve the Stipulation
in this case, and anticipates reviewing proposals to adjust
DSM cost recovery in Idaho Powets next rate case.
Id.
Idaho Power agrees that the allocation of costs between classes is a complicated
matter best suited for a general rate case, and agreed to this approach when it signed
the Stipulation. However, the Company also values collaborative dockets outside of
general rate cases to address diffcult policy issues that can get lost in the context of
general ratemaking.
Like a general rate case, all interested parties had an opportunity to intervene
and participate in this docket. In Order No. 32121, the Commission established an
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32217 - 3
intervention deadline; numerous customer and stakeholder groups subsequently
participated in the scheduling conference and settlement negotiations. All settlement
participants supported recovery of Idaho Powets demand response incentive payments
with its power supply expenses with the exception of the ICIP, who opposed any
increased funding for energy efficiency because "4.75 percent should be adequate at
this time." Oral Argument Tr. at 36, II. 13-14.
As evidenced by the Notice of Intent filed with the Commission on March 31,
2011, Idaho Power is presently evaluating whether to file a general rate case this year.
Before Idaho Power makes this proposal again in a general rate case, the Company
respectfully requests the Commission clarify its Order to reflect that the Commission is
not philosophically opposed to the inclusion of Idaho Powets demand response
incentives in power supply expenses. Although few other alternatives exist to fund DSM
short of increasing the Rider percentage, Idaho Power does not wish to delay resolution
of the large negative Rider deferral balance any further by proposing this specific
funding adjustment again in a general rate case if the Commission would rather not
pursue it.
II.
THE COMPANY SEEKS CLARIFICATION OF THE COMMISSION'S
INTENT WITH REGARD TO TREATING THE CUSTOM EFFICIENCY
PROGRAM AS A REGULATORY ASSET.
Commission Order No. 32217 is silent with regard to the Stipulation's proposed
treatment of the Custom Effciency program incentives as a regulatory asset with a
seven-year amortization period.
The participants in this case supported the concept of capitalizing energy
efficiency investments to earn the Company's authorized rate of return, a concept which
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32217 - 4
has been approved by the Commission in the past and would treat demand-side
resource investments similar to supply-side resources. The sole point of disagreement
between the parties was with regard to the length of the amortization period. Idaho
Power initially proposed four years. Application at 8. Commission Staff, the Idaho
Conservation League, NW Energy Coalition, Snake River Allance, Community Action
Partnership Association of Idaho, and Idaho Power ultimately agreed to a seven-year
amortization period as part of settlement negotiations. Stipulation at 4,11 8. The ICIP
recommended a twelve-year amortization. Oral Argument Tr. at 30, II. 3-13. As with
any regulatory asset, the length of the amortization period must be ultimately
determined by the Commission as a matter of policy.
Commission approval of Custom Effciency incentive payments as a regulatory
asset would have no impact on current cost allocation. This type of accounting would
begin treating demand-side investments similar to supply-side resources - a goal
supported by all participants in this case - and strengthen the energy efficiency
business modeL. Consequently, Idaho Power requests the Commission clarify Order
No. 32217 to allow Idaho Power to account for incentives paid through the Custom
Efficiency program as a regulatory asset beginning January 1, 2011, with an
amortization period to be determined by the Commission, based upon the information
submitted by the parties in this case.
IV.
CONCLUSION
With its Order, the Commission has reiterated that Idaho Power pursue all cost-
effective DSM yet has declined to address how such investments wil be funded,
recovered, and incentivized going forward. The ICIP has stated that Idaho Power has
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32217 - 5
overspent on DSM. Testimony of Dr. Reading at 7, II. 4-9. The Commission has neither
affirmed nor denied the ICIP's claim. The parties, other than the ICIP, have presented a
DSM regulatory model that the Commission has rejected suggesting that it instead be
revisited in a general rate case proceeding. Idaho Power is confused by these mixed
messages.
To guide Idaho Powets actions until its next general rate case, the Company
respectfully requests clarification of the Commission's intent, support, or lack of support
regarding:
(1 )Idaho Powets pursuit of all cost-effective DSM - even in excess ofi
Rider revenues;
(2) The concept of inclusion of Idaho Power's demand response
incentives in power supply expenses generally; and
(3) The concept of treating Idaho Powets Custom Efficiency program
as a regulatory asset.
If the Commission believes an evidentiary hearing would be helpful in providing the
clarification requested herein, Idaho Power has no objection to the Commission
scheduling one based on the testimony already filed in this docket.
Respectfully submitted this 22nd day of April 2011.
¿LJ2*~
LISA D. NORD TROM
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32217 - 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 22nd day of April 2011 I served a true and
correct copy of IDAHO POWER' COMPANY'S PETITION FOR CLARIFICATION OF
ORDER NO. -32217 upon the following named parties by the method indicated below,
and addressed to the following:
Commission Staff
Weldon B. Stutzman
Deputy Attorney General
Idaho Public Utilties Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
Industrial Customers of Idaho
Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON & O'LEARY, PLLC
515 North 27th Street
P.O. Box 7218
Boise, Idaho 83702
Dr. Don Reading
Ben Johnson Associates
6070 Hil Road
Boise, Idaho 83703
Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North Sixth Street
P.O. Box 844
Boise, Idaho 83701
NW Energy Coalition
Nancy Hirsh
NW Energy Coalition
811 1 st Avenue, Suite 305
Seattle, Washington 98104
Snake River Allance
Ken Miler
Snake River Allance
350 North 9th Street #B610
P.O. Box 1731
Boise, Idaho 83701
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IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32217 - 7
Idaho Irrgation Pumpers
Association, Inc.
Eric L. Olsen
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
201 East Center
P.O. Box 1391
Pocatello, Idaho 83204-1391
Anthony Yankel
Yankel & Associates, Inc.
29814 Lake Road
Bay Vilage, Ohio 44140
Community Action Partnership
Association of Idaho
Brad M. Purdy
2019 North 1 ih Street
Boise, Idaho 83702
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£¡¿:t~Lisa D. Nordstro
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32217 - 8