20111007English Direct.pdf

BEFORE THE Rc. C i: IVr' nc: J_1 tl ,-,.=
2mt OCT -1 AM \0: 22
IDAHO PUBLIC UTILITIES COMMISSI~P u
UTILI i it:,..
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-11-08
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC SERVICE )IN IDAHO. )
)
)
)
)
DIRECT TESTIMONY OF DONN ENGLISH
IDAHO PUBLIC UTILITIES COMMISSION
OCTOBER 7, 2011
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2 the record.
Q.Please state your name and business address for
A.My name is Donn English. My business address is
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4 472 W. Washington, Boise, Idaho 83702.
Q.By whom are you employed and in what capacity?
6 A.I am employed by the Idaho Public Utilities
7 Commission as a senior auditor in the Utilities Division.
8 Q.What is your educational and experience
9 background?
10 A.I graduated from Boise State University in 1998
11 with a BBA degree in Accounting. Following my graduation,
12 I accepted a position as a Trust Accountant with a pension
13 administration, actuarial and consulting firm in Boise. As
14 a Trust Accountant, my primary duties were to audit the
15 day-to-day financial transactions of numerous qualified
16 retirement plans. In 1999, I was promoted to Pension
17 Administrator. As a Pension Administrator, my
18 responsibilities included calculating pension and profit
19 sharing contributions, performing required non-
20 discrimination testing and filing the annual returns (Form
21 5500 and attachments). In May of 2001, I became a
22 designated member of the American Society of Pension
23 Professionals and Actuaries (ASPPA). I was the first
24 person in Idaho to receive the Qualified 401 (k)
25 Administrator certification and I am one of approximately
CASE NO. IPC-E-11-810/07/11 ENGLISH, D. (Di)
STAFF
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1 ten people in Idaho who have earned the Qualified Pension
2 Administrator certification. In 2001, I was promoted to a
3 Pension Consultant, a position I held until 2003 when I
4 joined the Commission Staff.
5 With the ASPPA, I served on the Education and
6 Examination Committee for two years. On this committee I
7 was responsible for writing and reviewing exam questions
8 and study materials for the PA-l and PA- 2 exams
9 (Introduction to Pension Administration Courses), DC-l,
10 DC-2 and DC-3 exams (Administrative Issues of Defined
11 Contribution Plans - Basic Concepts, Compliance Concepts
12 and Advanced Concepts) and the DB exam (Administrative
13 Issues of Defined Benefit Plans). I have also regularly
14 attended conferences and training seminars throughout the
15 country on numerous pension issues.
16 While with the Commission, I have audited a
17 number of utilities including electric, water and gas
18 companies and provided comments and testimony in several
19 cases that dealt with general rates, accounting issues,
20 pension issues and other regulatory issues. In 2004, I
21 attended the 46th Annual Regulatory Studies Program at the
22 Institute of Public Utilities at Michigan State University
23 sponsored by the National Association of Regulatory Utility
24 Commissioners (NARUC). Since then I have regularly
25 attended NARUC conferences and meetings, primarily the
CASE NO. IPC-E-11-810/07/11 ENGLISH, D. (Di)
STAFF
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1 meetings of the Subcommittee of Accounting and Finance.
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Q.What is the purpose of your testimony in this
proceeding?
A. The purpose of my testimony in this case is to
present Staff's recommendation regarding the level of the
Schedule 91 Energy Efficiency Rider (Energy Efficiency
Rider, DSM Rider) .
Q. Are you sponsoring any Exhibits with your
testimony?
A. Yes, I am sponsoring Exhibit No. 103.
Q. What does Staff propose in regard to the Energy
Efficiency Rider?
A. Staff proposes reducing the DSM Rider rate from
its current level of 4.75% of billed revenue to 4.0% of
billed revenue.
Q. Does Staff propose reducing revenue available for
DSM programs?
A. Absolutely not. Staff's proposal actually
provides an additional $16.6 million in DSM Rider revenue
over 2010 levels. This is a 92% increase in available DSM
funds after moving the incentive payments for Demand
Response programs and incentives paid under the Custom
Efficiency program from DSM Rider funding into base rates.
In 2010, Idaho Power collected approximately
$34.6 million in DSM Rider revenue. A 4.0% DSM Rider based
CASE NO. IPC-E-11-8
10/07/11 ENGLISH, D. (Di)
STAFF
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1 on 2011 weather normalized loads yields $34.8 million.
2 However, Section 6 (a) of the Stipulation proposes that
3 $11.3 million of incentive payments associated with the
4 Company's Demand Response programs be moved from DSM Rider
5 funding and placed into Net Power Supply Expense.
6 Additionally, in Order No. 32245, the Commission
7 allowed Idaho Power to begin accounting for incentives paid
8 through the Custom Efficiency program as a regulatory asset
9 beginning January 1, 2011. This effectively makes
10 available another $5.1 million (based on 2010 levels) in
11 DSM Rider revenue. Exhibit No. 103 shows how Staff's
12 proposed 4.0% DSM Rider and the removal of the previously
13 discussed incentive payments will result in an additional
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14 $16.6 million in DSM Rider revenue over 2010 levels.
Q.What level of DSM Rider funding would be
16 necessary to provide the same level of revenue collected
17 for DSM programs in 2010, after removing incentive payments
18 for Demand Response programs and incentive payments made
19 under the Custom Efficiency program?
20 A.The Company would have to generate approximately
21 $18.2 million to maintain the same level of funding for its
22 remaining programs funded through the DSM Rider as in 2010,
23 which would be approximately 2.1% of normalized revenues
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24 instead of the 4.0% proposed by Staff.
Q.Why shouldn't the DSM Rider be decreased further
CASE NO. IPC-E-11-810/07/11 ENGLISH, D. (Di)
STAFF
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1 to account for the DSM programs that will no longer be
2 funded by the DSM Rider?
3 A.While a lower DSM Rider could be argued as
4 reasonable, it could falsely signal that Staff and the
5 Commission do not support Idaho Power's DSM efforts. Also,
6 Idaho Power is currently carrying an underfunded deferral
7 balance over $8 million. This deferral balance is from DSM
8 Rider expenditures that the Commission has already deemed
9 prudent. The deferral balance is, therefore, recoverable
10 from ratepayers. Idaho Power should be allowed to recover
11 the deferral balance and remove this regulatory asset from
12 its books.
13 Also, Idaho Power has routinely spent more on DSM
14 programs than it has collected through the DSM Rider. In
15 2010, DSM Rider funded expenses were $42.4 million ($26
16 million after removing incentives for Demand Response and
17 Custom Efficiency programs). Staff's proposal provides
18 approximately $34.8 million in DSM Rider revenue. When
19 combined with the other programs moved into base rates,
20 total DSM funding would be approximately $51.2 million. A
21 4.0% DSM Rider provides enough revenue to sufficiently fund
22 the current level of expenses and recover the deferral
23 balance.
24 Furthermore, Idaho Power's 2010 Demand-Side
25 Management Annual Report states that the Company plans to
CASE NO. IPC-E-11-810/07/11 ENGLISH, D. (Di)
STAFF
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1 increase participation, energy savings, and demand
2 reduction above existing energy efficiency and Demand
3 Response programs. Additionally, the Company will add
4 measures (as identified in the 2011 IRP) to its existing
5 programs and continue to expand its efforts in energy
6 efficiency education. Though the Commission has ordered
7 the Company as recently as May 17 of this year (Order
8 No. 32245) to pursue all cost-effective DSM - even beyond
9 Energy Efficiency Rider revenues - Staff understands the
10 need to provide the Company with a consistent revenue
11 stream to better match the expenses charged to the Energy
12 Efficiency Rider account.
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Q.Do you have any additional comments?
A.I would like to reaffirm Staff's support of Idaho
15 Power's DSM program activities and its pursuit of all cost-
16 effective DSM. A DSM Rider of 4.0% of base revenues will
17 supply sufficient funding to eliminate the balance in the
18 DSM Rider account in less than one year, and provide ample
19 revenue for expansion of DSM programs. As programs expand,
20 the DSM Rider rate can be reevaluated. Finally, reducing
21 the DSM Rider from 4.75% to 4.0% provides additional rate
22 relief to almost all customers.
23 Q.Does this conclude your testimony in this
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24 proceeding?
A.Yes, it does.
CASE NO. IPC-E-11-810/07/11 ENGLISH, D. (Di)
STAFF
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Exhibit No. 103
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D. English, Staff
10/07/11
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 7TH DAY OF OCTOBER 2011,
SERVED THE FOREGOING DIRECT TESTIMONY OF DONN ENGLISH, IN CASE
NO. IPC-E-II-08, BY E-MAILING AND MAILING A COPY THEREOF, POSTAGE
PREPAID, TO THE FOLLOWING:
LISA D NORDSTROM
DONOV AN E WALKER
JASON B WILLIAMS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: Inordstrom(fidahopower.com
dwalkercmidahopower.com
j wiliams(fidahopower .com
PETER J RICHARDSON
GREGORY MADAMS
RICHARDSON & O'LEARY
PO BOX 7218
BOISE ID 83702
E-MAIL: peter(frichardsonandoleary.com
gregcmrichardsonandoleary.com
ERIC L OLSEN
RACINE OLSON NYE ET AL
PO BOX 1391
POCATELLO ID 83204
E-MAIL: elo(fracinelaw.net
ARTHUR PERRY BRUDER
ATTORNEY -ADVISOR
US DEPT OF ENERGY
1000 INDEPENDENCE AVE SW
WASHINGTON DC 20585
E-MAIL: Arthur.bruder(fhg.doe.gov
GREGORY W SAID
VP REGULATORY AFFAIRS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: gsaid(fidahopower.com
DR DON READING
6070 HILL ROAD
BOISE ID 83703
E-MAIL: dreading(fmindspring.com
ANTHONY Y ANKEL
29814 LAKE ROAD
BAY VILLAGE OH 44140
E-MAIL: tony(fyanel.net
DWIGHT ETHERIDGE
EXETER ASSOCIATES
10480 LITTLE PATUZENT PKWY
STE 300
COLUMBIA MD 21044
E-MAIL: detheridge(fexeterassociates.com
CERTIFICATE OF SERVICE
E-MAIL ONLY:
STEVE A PORTER
US DEPT OF ENERGY
E-MAIL: steven.porter(fhg.doe.gov
KURT JBOEHM
BOEHM KURTZ & LOWERY
36 E SEVENTH ST STE 1510
CINCINATI OH 45202
E-MAIL: kboehm(fbkllawfrm.com
E-MAIL ONLY:
RICHARD E MALMGREN
SR ASST GENERAL COUNSEL
MICRON TECHNOLOGY INC
E-MAIL: remalmgren(fmicron.com
E-MAIL ONLY:
THORV ALD A NELSON
MARK A DAVIDSON
FRED SCHMIDT
HOLLAND & HART LLP
E-MAIL: tnelson(fhollandhar.com
madavidson(fhollandhart.com
fschmidt(fhollandhar.com
Inbuchanan(fhollandhar.com
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
710 N 6TH ST
BOISE ID 83702
E-MAIL: botto(ßidahoconservation.org
E-MAIL ONLY:
JOHN R HAMMOND JR
BATT FISHER PUSCH
& ALDERMAN LLP
E-MAIL: jrh(ßbattfisher.com
KEVIN HIGGINS
ENERGY STRATEGIES
215 S. STATE ST SUITE 200
SALT LAKE CITY UT 84111
E-MAIL: khiggins(ßenergystrat.com
ELECTRONIC/ CD/ PAPER SERVICE
MARY V YORK
HOLLAND & HART LLP
101 S. CAPITAL BLVD., SUITE 1400
BOISE, ID 83702
E-MAIL: myork(ßhollandhar.com
BRAD MPURDY
ATTORNEY AT LAW
2019N 17TH STREET
BOISE ID 83702
E-MAIL: bmpurdy(fhotmail.com
KEN MILLER
SNAKE RIVER ALLIANCE
BOX 1731
BOISE ID 83701
E-MAIL: kmiler(ßsnakeriverallance.org
CERTIFICATE OF SERVICE
NANCY HIRSH
POLICY DIRECTOR
NW ENERGY COALITION
811 1 ST AVE., SUITE 305
SEATTLE WA 98104
E-MAIL: nancy(ßnwenergy.org
SCOTT PAUL CEO
HOKU MATERIALS INC
ONE HOKU WAY
POCATELLO ID 83204
E-MAIL: spaul(ßhokucorp.com
DEAN J MILLER
McDEVITT & MILLER LLP
PO BOX 2564
BOISE ID 83701
E-MAIL: joe(ßmcdevitt-miler.com
heather(ßmcdevitt-miler .com
~,~~SECRETARY
CERTIFICATE OF SERVICE