20110316Application.pdf

JASON B. WILLIAMS
Corporate Counsel
jwilliams(âidahopower.com
esIDA~POR~
An IDACORP Company
March 15, 2011
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-11-05
IN THE MATTER OF THE APPLICA TlON OF IDAHO POWER
COMPANY FOR A PRUDENCY DETERMINATION OF ENERGY
EFFICIENCY RIDER FUNDS SPENT IN 2010
Dear Ms. Jewell:
Enclosed for filng please find an original and seven (7) copies of Idaho Power
Company's Application in the above matter. Please note that Idaho Power Company
has filed its Demand-Side Management 2010 Annual Report as Attachment No.1 to this
Application. The Company intends this filing to satisfy the reporting requirement set
forth in Order No. 29419 (Case No. IPC-E-03-19).
In addition, enclosed are nine (9) copies of the testimony of Darlene Nemnich
filed in support of the Application. One copy of Ms. Nemnich's testimony has been
designated as the "Reporter's Copy." In addition, a disk containing a Word version of
Mr. Nemnich's testimony is enclosed for the Reporter. "
Very truly yours,~¿ø~--
~on ~. Wiliams
JBW:csb
Enclosures
cc: Pete Pengily (w/o encls.)
Theresa Drake (w/o encls.)
Darlene Nemnich (w/o encls.)
P&RS Files (w/encls.)
Legal Files (w/encls.)
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
JASON B. WILLIAMS
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
jwilliamsCâidahopower.com
InordstromCâidahopower.com
r:(""
lUI! MAr;i I C""oii J P'Ifi 4: 45
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 MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR A ) CASE NO. IPC-E-11-05
PRUDENCY DETERMINATION OF )
ENERGY EFFICIENCY RIDER FUNDS ) APPLICATIONSPENT IN 2010. )
)
Idaho Power Company ("Idaho Powet' or "Company"), in accordance with RP
052 and RP 201, et seq., hereby respectfully submits its Demand-Side Management
2010 Annual Report ("DSM 2010 Annual Report") in compliance with Order No. 29419
and makes Application to the Idaho Public Utilties Commission ("Commission") for an
Order designating Idaho Power's expenditure of $42,479,692 in Energy Efficiency Rider
("Ridet') funds in 2010 as prudently incurred expenses.
In support of this Application, Idaho Power represents as follows:
I. INTRODUCTION
1. The Commission has "consistently stated that cost-effective DSM
programs are in the public interest and has admonished electric utilities operating in the
APPLICATION - 1
State of Idaho to develop and implement DSM programs in order to promote energy
efficiency." Case No. IPC-E-10-09, Order No. 32113 at 8, citing Order Nos. 29784 and
29952. Consistent with this Commission objective, Idaho Power has implemented
andlor manages a wide range of opportunities for all of its customer classes to
participate in demand-side management ("DSM") and energy efficiency programs, to be
informed about energy use, and to use electricity wisely. Idaho Power's two main
objectives for its DSM programs are (1) to achieve all prudent cost-effective energy
efficiency and demand response resources to meet its electrical system's energy and
demand needs and (2) to provide customers with programs and information to help
them manage their energy usage. To assist with the development and implementation
of DSM and energy efficiency programs, Idaho Power receives input and consultation
from its Energy Efficiency Advisory Group ("EEAG"). Formed in May 2002 and currently
with 14 members representing customers, state agencies, and other stakeholders, the
EEAG provides a broad range of recommendations, including input on new program
proposals, modifications to existing programs, and overall expenditures of Rider funds.
In addition to the EEAG, Idaho Power has enhanced its relationships with trade alles,
trade organizations, and regional groups involved in DSM and energy efficiency
activities.
2. Since the Rider was implemented in 2002, the Company has
progressively increased the breadth of its DSM and energy effciency activity as well as
the level of funding for cost-effective DSM and energy efficiency programs. Between
2002 and 2007, the Commission found that the Company had prudently incurred cost-
effective DSM-related Rider expenses of $29 milion. Order Nos. 30740 and 31039. In
APPLICATION - 2
2008 and 2009, the Commission found that the Company had prudently incurred cost-
effective DSM-related Rider expenses of $50.7 millon. Order No. 32113.
3. As a result of Idaho Powets increased DSM and energy efficiency activity
over the last eight years, Idaho Powets quarterly customer relationship survey in 2010
indicated that the percentage of customers who have a positive perception of
Idaho Powets energy efficiency efforts has steadily grown from 39 percent in 2003 to
57 percent in 2010, a positive increase of 46 percent. In addition, in May 2010, Idaho
Power received the Demand Response Program Achievement Award from the Peak
Load Management Allance ("PLMA") for its FlexPeak Management DSM program.
DSM 2010 Annual Report at 68. PLMA is a non-profit group of organizations with a
business interest in electrical load that is dedicated to creating a community of expertise
on DSM and its role in creating energy effciency markets. Id.
II. 2010 DSM RESULTS
4. In 2010, Idaho Power continued to expand its DSM programs in order to
increase participation and energy savings. Idaho Power currently offers its Idaho
customers sixteen energy efficiency programs, three demand response programs,
several educational initiatives, and offers savings to customers through market
transformation programs. Overall, annual energy savings from Idaho Powets energy
efficiency activities totaled 187,626 megawatt-hours, an increase of 31 percent over the
energy savings achieved in 2009. DSM 2010 Annual Report at 1. As a result of Idaho
Powets demand response programs, demand reduction increased by 54 percent over
2009 levels, with a total load reduction of 336 megawatts ("MW") in 2010, compared to
a reduction of 218 MW in 2009 and 61 MW in 2008. Id.
APPLICATION - 3
5. To achieve these results, total expenditures on DSM-related activities
increased to $45.8 millon, compared to expenses of approximately $35 millon in 2009
and $21 milion in 2008. Id. Of the $45.8 milion of 2010 DSM-related expenses,
approximately $42.5 milion were Rider expenses, compared to Rider expenses of
approximately $31.8 millon in 2009 and $18.8 milion in 2008. Id. A summary of
program expenditures funded by the Rider in 2010 is provided in Exhibit No. 1 to the
Direct Testimony of Darlene Nemnich ("Nemnich Testimony") that accompanies this
Application.
6. Results show that all of Idaho Power's energy efficiency and DSM
programs are providing cost-effective resources to customers and the Company. In
2010, all energy efficiency programs produced savings at a benefit/cost ratio greater
than 1.0 when evaluated at a total resource cost perspective, a utilty cost perspective,
and a participant cost perspective.
II. THE DSM 2010 ANNUAL REPORT
7. In support of its Application requesting the Commission to accept the
Company's 2010 DSM expenditures funded by the Rider as prudently incurred, Idaho
Power presents its DSM 2010 Annual Report as Attachment NO.1 to this Application.
8. The DSM 2010 Annual Report is being submitted pursuant to the DSM
reporting obligation set forth in Order No. 29419 and in accordance with certain agreed-
upon guidelines set forth in the Memorandum of Understanding for Prudency
Determination of DSM Expenditures ("DSM MOU") submitted as part of the Stipulation
in Order No. 31039. In sum, Idaho Powets DSM 2010 Annual Report contains the
following:
APPLICATION - 4
a. Template. Idaho Power built upon the format used in its previous
DSM annual reports to enhance its DSM 2010 Annual Report. In addition to the main
document, there are two supplements which Idaho Power began submitting when it
submitted its DSM 2009 annual report: Supplement 1: Cost-Effectiveness and
Supplement 2: Evaluation.
b. Table of Contents. The DSM 2010 Annual Report, Supplement 1:
Cost-Effectiveness ("Supplement 1") and Supplement 2: Evaluation ("Supplement 2")
each have a detailed table of contents showing where specific program information can
be found as well as the location of the cost-effectiveness analyses and the evaluation
table.
c. Introduction Section. This section can be found on pages 3
through 16 of the DSM 2010 Annual Report. It provides an initial overview of program
process evaluations, impact evaluations, and updated assumptions used to calculate
program cost-effectiveness.
d. Cost-Effective Section. Supplement 1 provides detailed cost-
effectiveness information by program and energy savings measure as well as detailed
financial information separated by expense category and jurisdiction. In addition to the
three benefit/cost analyses uses in previous DSM annual reports (Le., the total resource
cost perspective, the utilty cost perspective, and the participant cost perspective),
Supplement 1 contains a new cost-effectiveness test, the ratepayer impact measure
("RIM"). The RIM test measures the impact to customer bils or rates due to changes in
utility revenues and operating costs caused by an energy efficiency program.
e. Evaluation Section. Supplement 2 contains Idaho Powets
evaluation plans, copies of completed program evaluation reports, research reports, and
APPLICATION - 5
reports done by Idaho Power or third parties. Supplement 2 also has a compact disc
containing market progress evaluation reports provided by the Northwest Energy
Efficiency Allance.
f. Program Specific Section. The DSM 2010 Annual Report contains
the following information for each program or initiative: (1) a table listing the summary
of the program participation; (2) performance and costs; (3) a description of the
program; (4) 2010 activities; (5) a cost-effectiveness discussion, which includes whether
a new analysis was conducted and new assumptions used; (6) a section on customer
satisfaction and evaluations providing an overview of process, impact, and market effect
evaluations that were conducted; and (7) a section describing strategies for
implementation of each initiative for 2011. This section also refers to studies included in
Supplement 2.
g. Expenses Without Direct Energy Savings. In the section titled
"Other Programs and Activities," the DSM 2010 Annual Report describes education
initiatives and other non-energy saving DSM efforts. These efforts support the
Company's overall DSM and energy effciency agenda. Other programs and activity
expenses are shown in Appendices 2-4 and Exhibit NO.1 to the Nemnich Testimony.
iv. EVOLUTION OF THE 2010 REPORT
9. The DSM 2010 Annual Report and accompanying Nemnich Testimony
provide a sufficient basis for the Commission to determine the prudency of Idaho
Powets DSM and energy efficiency expenses. Idaho Power has also attempted to
address the Commission Staffs expectations for cost-effectiveness tests, methods, and
evaluations as indicated in Attachment No. 1 to the DSM MOU, including:
APPLICATION - 6
a. Cost-Effectiveness Measurements. In the DSM 2010 Annual
Report, Idaho Power calculates cost-effectiveness from the participant, utilty, and the
total resource perspectives at the program level, except for those programs with no
customer costs. This includes demand response programs which are evaluated at the
utility and total resource cost perspectives. Idaho Power also evaluates cost-
effectiveness from the utilty and the total resource cost perspectives for each measure
within a program, where the measures are not interactive. The DSM 2010 Annual
Report also includes a new RIM test, which addresses DSM from a ratepayer impact
perspective. Supplement 1 includes detailed results of the cost-effectiveness
measurements.
b. Net-to-Gross Adjustments. For the DSM 2010 Annual Report,
Idaho Power used these ratios as an input to cost-effectiveness calculations where
available and appropriate. For a detailed discussion, see pages 2-3 of Supplement 1.
c. Program Evaluations. Independent, third-party consultants are
used to provide impact and process evaluations to verify that program specifications are
met, provide viable recommendations for program improvement, and validate energy
savings achieved through Idaho Power's programs. In 2010, process evaluations were
completed by third-party consultants on nine programs, including the Heating & Cooling
Efficiency, Energy House Calls, Home Improvement Program, Residential Energy
Efficiency Education Initiative, Easy Upgrades, Building Effciency, Custom Effciency,
Commercial Energy Efficiency Education Initiative, and Irrigation Effciency. Copies of
these reports can be found in Supplement 2.
APPLICATION - 7
V. MODIFIED PROCEDURE
10. Idaho Power avers that a technical hearing is not necessary to consider
the issues presented herein and respectully requests that this Application be processed
under Modified Procedure; i.e., by written submissions rather than by hearing. RP 201
et seq. Idaho Power has, however, contemporaneously filed the Nemnich Testimony in
support of this Application. The Company stands ready to present the testimony in
support of this Application in a technical hearing if the Commission determines such a
hearing is required.
VI. COMMUNICATIONS AND SERVICE OF PLEADINGS
11. Communications and service of pleadings with reference to this
Application should be sent to the following:
Jason B. Wiliams
Lisa D. Nordstrom
Idaho Power Company
P.O. Box 70
Boise, ID 83707
jwilliams((idahopower.com
Inordstrom((idahopower.com
Darlene Nemnich
Greg Said
Idaho Power Company
P.O. Box 70
Boise, ID 83707
dnemnich((idahopower.com
gsaid((idahopower.com
VII. REQUEST FOR RELIEF
12. As described in greater detail above, Idaho Power Company respectfully
requests that the Commission issue an order designating Idaho Power's expenditure of
$42,479,692 in Energy Effciency Rider funds in 2010 as prudently incurred expenses.
DATED at Boise, Idaho, this 15th day of March 2011."
"
~~-~SO B. WILLIAMS
orney for Idaho Power Company
==
APPLICATION - 8
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-11-05
,
IDAHO POWER COMPANY
ATTACHMENT NO.1
DEMAND-SIDE MANAGEMENT
2010 ANNUAL REPORT
.~