20110107Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: WELDON STUTZMAN
DEPUTY ATTORNEY GENERAL

DATE: JANUARY 4, 2011

SUBJECT: IDAHO POWER’S APPLICATION REQUESTING APPROVAL OF
REVISIONS TO ITS IRRIGATION PEAK REWARDS PROGRAM, CASE
NO. IPC-E-10-46

On December 10, 2010, Idaho Power Company filed an Application requesting
approval of changes to its Irrigation Peak Rewards Program (Schedule 23). The program is a
voluntary load control program available to agricultural irrigation customers, and is used to
decrease the Company’s system summer peak by turning off specified irrigation pumps during
June 15 through August 15. Under the program, the Company turns off specified irrigation
pumps any Monday through Saturday between the hours of 1:00 p.m. and 8:00 p.m. The
Company uses either dispatchable or timer-based load control devices to turn off selected pumps
for a limited number of hours. In exchange for allowing the Company to interrupt electric
service, participating customers receive a monthly monetary payment in the form of a bill credit
for usage that occurs during June, July and August.
Based on a Company review conducted during 2010, Idaho Power is proposing a
number of changes to the Irrigation Peak Rewards Program. First, the Company proposes to
extend the interruptible period from 8:00 p.m. to 9:00 p.m. on a voluntary basis. Customers who
accept an extended interruption period will receive a higher payment for interruptions. Second,
the Company proposes to change the incentive payment structure from a fixed incentive payment
to a combination of a fixed and variable incentive payment. The proposed structure pays
participants a portion simply for participating, and an incentive portion based on how much the
Company uses the program. For dispatchable options 1, 2 and 3, participating customers would
DECISION MEMORANDUM 2
be paid a fixed demand credit of $5.00 per kilowatt and an energy credit of $0.0038 per billed
kilowatt hour. The standard variable energy credit would be $.035 per kWh, and would increase
to $0.40 during the 8:00 to 9:00 p.m. hour for participants willing to reduce demand in that hour.
Third, the Company proposes to allow one program test event per irrigation season
that is not subject to a variable payment. Fourth, Idaho Power proposes to change a participant’s
fixed incentive payment under dispatchable option 3, which currently bases load reduction on the
maximum demand in the 24 hours prior to an event. Idaho Power proposes to calculate the
program load reduction based on an average demand between 10:00 p.m. and 11:00 a.m. prior to
an event, as measured in kW over the load profile metering intervals during each load control
event initiated during a billing period. Finally, Idaho Power proposes a $1.00 per kW opt out
penalty for all dispatchable interruption options. Currently, the program includes an opt out
penalty of $0.005 per monthly billed kWh per opt out occurrence for customers selecting the
dispatchable interruption options 1 and 2.
The Application states that the proposed program modifications reflect a collaborative
process between Idaho Power and the Idaho Irrigation Pumpers Association, the Commission
Staff, the Energy Efficiency Advisory Group, and the Integrated Resource Plan Advisory
Council. The Company states that the program as revised would more closely align the program
incentives with the Company’s need for demand response.
Idaho Power requests that its proposal to modify the Irrigation Peak Rewards
Program be processed by Modified Procedure. Staff recommends that the Commission issue a
Notice of Application and Notice of Modified Procedure to process the Company’s Application.
COMMISSION DECISION
Should the Commission issue a Notice of Application and Notice Modified
Procedure, providing for a 28-day comment period and 7-day reply comment period, to process
Idaho Power’s Application?

Weldon B. Stutzman
Deputy Attorney General

bls/M:IPC-E-10-46_ws