20110210ICL Comments.pdf

Benjamin Otto
ISB No. 8292
710 N 6th Street
PO Box 844
Boise, ID 83701
Ph: [phone] x 12
Fax: [phone]
botto~idahoconservation.org
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Attorney for Idao Conservtion League
BEFORE TH IDAHO PUBliC UTIliTIS COMMISSION
IN THE MA ITER OF THE )
APPLIACTION OF IDHAO POWER )
COMPANY REQUESTING APPROVAL )CASE NO. IPC-E-1O-46OF REVISIONS TO THE IRRGA nON )
PEAK REWARDS PROGRAM,)
SCHEDULE 23 )
)
COMES NOW, the Idaho Conservation League ("ICL") with the following comments. ICL
believes this application represents the correct response to Idhao Power's matung irrgation
load control program. We urge the Commission to approve this request.
BACKGROUN
Idaho Power's irrigation load control program is a highly successful resource to address
the Company's primar constraint, meeting system peak demands. Since 2004, progr
paricipation has quickly grown both in the number of sites and the total megawatts. Now with
1,512 sites and 160 MW, much of which is remotely dispatchable by Idaho Power, the program
is more matue. And like anyting, as this program matues it is importt to continually update
the details in order to maximize its value.
Curently the irrgation load control program pays paricipants a fixed incentive whether
they actually curil loads or not. While this is appropriate when tring to encourage
ICL's Comments 1 Februar 9, 2011
paricipation, it is not appropriate for long-term operation of the resource. Just like any supply
side resource the irrgation load control program has two values - the value of the abilty to
curil irrgation loads when necessar and the value of actually curilng load. Par of the
Company's application addresses these dual values and appropriately modifies the program to
maximize its overall value Idaho Power and its ratepayers.
Last year Idaho Power made another change that helped maximize the value to ratepayers
- moving from timer based curailment system to a mostly dispatchable system. While all of the
comments from program paricipants thus far argue that any change could reduce paricipation,
the events of 2009 tell a different story. Despite makng this major change paricipation
increased. ICL encourages the Commission to ignore the vague assertions of a few paricipants
and look to the actual events on the ground. Despite previous changes to the progrm, irgators
continue to find the progrm attactive.
THE PROPOSED CHAGES
In this application Idao Power requests five changes, all of which ICL believes are
appropriate and in the best interest of ratepayers.
1. Extending the eligible time for interrption by one additional hour will allow the
Company to more precisely match system peak. Because this change requires attcting a
certin number paricipants to alter their growing operations, ICL support the small bonus
incentive proposed for this extended hour. As a caveat, ICL expects that, like the progrm
generally, as the extended operation becomes matue the bonus incentive wil no longer be
necessar.
ICL's Comments 2 Febru 9,2011
2. Changing the incentive strctue from a 100% fixed payment to a fixed/varable
payment appropriately addresses the dual value of this matue program. The abilty to curil
irrgation loads when necessar is a valuable resource for Idaho Power and ratepayers. It is
appropriate to pay a certin amount to irrgators for them to essentially stad by. It is also
appropriate to pay a certin amount to irrgators when Idao Power actually curils their loads.
What is inappropriate is the curent incentive that pays irrgators the same value regardless of the
actual utilzation of the program. Splitting the curent fixed payment to a fixed/varable scheme
minimizes costs to ratepayers while maximizing the value to Idaho Power. It minimizes costs by
ensurng ratepayers pay the full incentive only durng actul curilments. It maximizes value by
incentivizing paricipants to actully curil and thereby receive the payment. While ICL does
not have the technical expertise to determine if the specific moneta amounts the Company
proposes are appropriate, we do know the Company is proposing the proper incentive strctue.
3. Testing the operation of the load control program once a year is a prudent and effective
strategy to ensure reliabilty. Because this test should not occur when the curilment value is
large, i.e. when demand is peakng, it is appropriate to not provide the varable incentive
payment. Instead, the testing event should be considered par of the stadby value captued in
the fixed incentive portion.
4. Modifying Dispatchable Option 3 to ensure Idaho Power only pays for curilments
that actually occur is critical to ensure a cost effective, sustainable program. Because under
Option 3 paricipants get to nominate a portion of the load that is subject to curilment, Idao
Power must have the abilty to accurtely track whether the paricipant actully delivers what
they propose to.
ICL's Comments 3 Februar 9,2011
5. Opt-out penalties are importt to ensure the amount ofload curilment Idaho Power
expects to have available actually comes to frition. Because the penalty provision must be clear
and simple for the paricipants, ICt supports the goal of simplifyng the calculation. The penalty
wil only work to ensure paricipant performance if individuals are able to quickly determine the
cost of the penalty wil outweigh the benefit of opting out. Furer, applying an opt-out penalty
to Option 3 is critical to ensure the resource is there when Idaho Power needs it. Similar to our
comments regarding the incentive levels, ICL does not have the experise to deterine if the
specific moneta amounts are suffcient. And because it is likely very hard to set the proper
penalty level, ICL submits the Commission could retain the discretion to review the results of
2011 and adjust the penalty as necessar.
CONCLUSION
The irrgation load control program has matued since 2004. While the previous
incentive strctue properly encouraged initial paricipation, now that the program is more
matue the proper incentive strctue should focus on maximizing the value to Idaho Power's
ratepayers. ICL believes Idao Power's proposed revisions does just that.
WHEREFORE, ICL respectfuly requests the Commission consider these comments.
DATED this Sth day of Febru 2011.
Respectfuly submitted,~ ¿: e:
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Benjamin J. Otto
Idao Conservtion League
ICL's Comments 4 Febru 9, 2011
CERTIFICATE OF SERVICE
I hereby certif that on this 8th day of Febru, 2011 true and correct copies of the
foregoing COMMENTS OF IDAHO CONSERVATIONìEAGUE were delivered to the
followig persons via the method of servce noted:
Hand delivery
Jean Jewell
Commission Secretar (Origial and seven copies provided)
Idao Public Utilties Commission
427 W. Washigton St.
Boise, ID 83702-5983
Electronic Mai:
Lisa D. Nordstrom
Donovan E. Waler
Idao Power Company
1221 West Idao Street
Boise, Idao 83707-0070
lnordstrom~idaopower.com
dwale~idaopower.com
GregW. Said
Scott Sparks
Idao Power Company
P.O. Box 70
Boise, Idao 83707
gsd~idaopower.com
ssparks~idaopower.com
Eric L. Olsen
Racine, Olson, Nye, Budge &
Baiey, Charered
P.O. Box 1391; 201 E. Center
Pocatello, Idao 83204-1391
Telephone: [phone]
Fax: [phone]
E-mai: elo~racinelaw.net
Anthony Yankel
29814 Lae Road
Bay Vilage, Ohio 44140
Fax: [phone]
E-mai: ton~kei.net á~
Benjamin J. Otto
Idao Conservtion League