20111116English Rebuttal.pdf

BEFORE THE
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.L:—I
IDAHO PUBLIC UTILITIES COMMISSION
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.)
)
)
)
_______________________________________________________________
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REBUTTAL TESTIMONY OF DONN ENGLISH
IDAHO PUBLIC UTILITIES COMMISSION
NOVEMBER 16,2011
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2 the record.
Q.Please state your name and business address for
A.My name is Donn English and my business address
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4 is 472 W. Washington Street, Boise, Idaho.
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Q.By whom are you employed and in what capacity?
A.I am employed by the Idaho Public Utilities
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7 Commission as a senior auditor.
Q.Are you the same Donn English that previously
9 submitted testimony in this proceeding?
10 A.Yes. I submitted direct testimony presenting
11 Staff's recommendation to set the Energy Efficiency Tariff
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12 Rider ("Tariff Rider") rate at 4.0% of revenues.
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Q.What is the purpose of your rebuttal testimony?
A.The purpose of my rebuttal testimony is to
15 correct or clarify statements made by other witnesses
16 filing testimony in this case regarding the appropriate
17 level of the Tariff Rider.
lS Q.Is there specific testimony filed in this case
19 that you will be refuting?
20 A.Yes, I will refute testimony provided by the
21 Conservation Parties' witness, Nancy Hirsh, and clarify
22 calculations made by Industrial Customers of Idaho Power
23 witness, Dr. Don Reading. Finally, I will reiterate my
24 pre-filed direct testimony and illustrate how a 4.0% Tariff
25 Rider will sufficiently fund DSM programs going forward.
CASE NO. IPC-E-11-S11/16/11 ENGLISH, D (Reb) 1
STAFF
1 Q.What specific arguments from Nancy Hirsh do you
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2 disagree with?
A.On page 4, line lS of Ms. Hirsh's direct
4 testimony, Ms. Hirsh states that the Conservation Parties
5 "believe that as electric rates increase so must the
6 funding for energy efficiency." Ms. Hirsh seemingly
7 implies, incorrectly, that funding for energy efficiency
S has not kept up with recent general rate increases. As my
9 Exhibit No. 103 illustrates, Staff's proposed funding level
10 for Demand Side Management (DSM) programs funded through
11 the Energy Efficiency Tariff Rider is an increase of 92%
12 over 2010 tariff rider revenue levels. Furthermore, as
13 discussed later in my rebuttal testimony, a 4.0% Tariff
14 Rider would generate an extra $9.3 million over 2010
15 expense levels.
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Q.On pages 13-14 of Ms. Hirsh's direct testimony,
Ms. Hirsh states that:
Reducing the rider level will have a negligible
impact to each individual ratepayer, but a sizeable
impact to Idaho Power's overall energy efficiency
budget. Assuming the growth in sales from actual
2011 to the 2012 forecast used in this rate case,
maintaining a 4.75% rider will generate an additional
$1,597,640 for Idaho Power's energy efficiencyprograms. When spread across all customers,
maintaining a 4.75% rider has a negligible impact
of less than $3.36 per customer annually in 2012.
Do you agree with Ms. Hirsh's statement?
A.No. I am unable to duplicate Ms. Hirsh's math.
CASE NO. IPC-E-11-S11/16/11 ENGLISH, D (Reb) 2
STAFF
1 However, if one calculates the revenue generated by a 4.75%
2 Tariff Rider on the stipulated weather normalized revenue
3 of $870,005,052, one finds that such a Tariff Rider would
4 generate approximately $41.3 million. A 4.0% Tariff Rider
5 would generate $34.8 million, saving customers
6 approximately $6.5 million while increasing the funding
7 available for DSM programs. The average annual impact per
8 customer of the 0.75% difference is $13.72 instead of the
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9 $3.36 claimed by Ms. Hirsh.
Q.Are there any other points of clarification you
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11 would like to make to Ms. Hirsh's testimony?
A.Yes. On page 20, line 17, Ms. Hirsh incorrectly
13 implies that the Commission has directed Idaho Power to
14 acquire all cost-effective energy efficiency. In
15 actuality, in Order No. 32245, the Commission directed
16 Idaho Power to continue to pursue all cost-effective energy
17 efficiency. I believe that Idaho Power has made a good
18 faith effort at pursuing all cost-effective energy
19 efficiency.
20 Q.Did other witnesses file testimony in this case
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21 that you believe needs correction or clarification?
A.Yes. Industrial Customers of Idaho Power
23 witness, Dr. Don Reading, states in his direct testimony on
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24 page 31, lines 13-17 that:
CASE NO. IPC-E-11-811/16/11 ENGLISH, D (Reb) 3
STAFF
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1 If the EE Rider is left at 4.75%, and the demand
response programs are moved to base rates,
customers would be effectively paying the
equivalent of a 6.1% EE Rider. A dollar for
dollar reduction in the rider from removing the
$11.3 million demand response incentive programs
would equal an EE Rider of approximately 3.8%.
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5 Dr. Reading's statement is technically correct. However,
6 it fails to consider the $5.2 million of incentive payments
7 made through the custom efficiency program that the
8 Commission allowed Idaho Power to account for as a
9 regulatory asset in Order No. 32245. The equivalent Energy
10 Efficiency Tariff Rider, after accounting for the $11.3
11 million demand response incentives and the $5.2 million
12 custom efficiency incentives, would be 6.7%. A dollar for
13 dollar reduction of the $16.5 million incentive payments
14 would result in a 2.9% Tariff Rider.
15 Q.How much did Idaho Power spend on DSM programs
16 through the Idaho Tariff Rider in 2010?
A.The Idaho Power Demand-Side Management 2010
18 Annual Report indicates that Idaho Power expensed
19 $42,479,692 through the Idaho Tariff Rider in 2010.
20 However, the Company inadvertently charged $526,781 of that
21 amount to the Idaho Tariff Rider when that amount should
22 have been directly assigned to the Oregon jurisdiction.
23 Accordingly, in Order No. 32331, the Commission declared
24 that the Company only had prudently incurred $41,952,911 in
25 Tariff Rider expense.
CASE NO. IPC-E-11-8
11/16/11 ENGLISH, D (Reb) 4
STAFF
1 Q.In your direct testimony, you recommended the
2 Commission adjust the Tariff Rider funding level from 4.75%
3 of revenues to 4.0% of revenues. Does the 4.0% Tariff
4 Rider level provide Idaho Power with sufficient funding to
5 continue with the same level of DSM expenses?
6 A.Yes, it would actually provide an extra $9.3
7 million over 2010 expense levels. Section 6 (a) of the
8 Stipulation filed in this case sets an $11,252,265 base
9 level of demand response incentive payments as Net Power
10 Supply Expenses to be included in base rates. The Tariff
11 Rider has historically funded these incentive payments.
12 Additionally, in Order No. 32245 the Commission allowed
13 Idaho Power to begin accounting for incentive payments made
14 through the Custom Efficiency program as a regulatory asset
15 effective January 1, 2011. During 2010, the Tariff Rider
16 funded Idaho Power's $5,193,650 in incentive payments under
17 the Custom Efficiency program. In total, the proposed
18 funding changes discussed above would remove approximately
19 $16.5 million of DSM incentive payments from the Idaho
20 Tariff Rider and place the funding for the incentive
21 payments into base rates. The table below illustrates the
22 available funding for DSM programs if the Idaho Tariff
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23 Rider level were to be set at 4.0%:
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CASE NO. IPC-E-11-811/16/11 ENGLISH, D (Reb) 5
STAFF
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Weather Normalized Revenues $870,005,052
4.0%Proposed DSM Tariff Rider
DSM Tariff Rider Revenue $34,800,202
$16,445,915
$51,246,117
Incentive Payments in Base Rates
Total Funds Available for DSM
6 Additionally, the Company's Weatherization Assistance for
7 Qualified Customers program administered through the local
8 CAP agencies is also funded through base rates, which
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9 increases the total amount available for DSM programs.
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11 2011?
Q.Have you reviewed the DSM expense levels for
A.Yes. Financial information through September 30,
13 2011 was provided to members of the Company's Energy
14 Efficiency Advisory Group at an October 14, 2011 meeting.
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Q.How do the 2011 DSM expenses compare to 2010?
A.Through September 30, 2011 the Company spent
17 approximately $36.1 million on its DSM programs, which is
18 about 2% greater than what it spent during the same time
19 period the previous year. It appears that 2011 proj ected
20 expenses through December 31, 2011 will be roughly
21 equivalent to 2010 levels. Additionally, through September
22 30, 2011 the Company has collected $28.8 million through
23 the Idaho Tariff Rider while expensing $29.2 million, which
24 shows that the Company is currently expensing approximately
25 the same amount that it is currently collecting through the
CASE NO. IPC-E-11-811/16/11 ENGLISH, D (Reb) 6
STAFF
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1 Tariff Rider.
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3 account?
Q.Is there currently a balance in the Tariff Rider
A.Yes, as of September 30, 2011 the Tariff Rider
5 account had a negative balance of $8,013,786. This balance
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6 had accumulated over previous years.
Q.Is there anything you would like to add to your
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8 rebuttal testimony?
A.I would just like to restate Staff's original
10 position that setting the Tariff Rider level at 4.0%
11 provides the Company with sufficient funding to recover the
12 negative balance in the Tariff Rider account while
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13 continuing to expand the Company's DSM programs.
Q.Does this conclude your rebuttal testimony in
15 this proceeding?
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A.Yes, it does.
CASE NO. IPC-E-11-811/16/11 ENGLISH, D (Reb) 7
STAFF
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 16TH DAY OF NOVEMBER 2011,
SERVED THE FOREGOING REBUTTAL TESTIMONY OF DONN ENGLISH, IN
CASE NO. IPC-E-ll-08, BY E-MAILING AND MAILING A COPY THEREOF,
POST AGE PREP AID, 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
dwalker(fidahopower .com
jwiliams(fidahopower .com
PETER J RICHARDSON
GREGORY MADAMS
RICHARDSON & O'LEARY
PO BOX 7218
BOISE ID 83702
E-MAIL: peter(frichardsonandoleary.com
greg(frichardsonandoleary.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: Arhur.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(fyane1.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(fhollandhar.com
fschmidt(fhollandhar.com
Inbuchanan(fhollandhar.com
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
710 N 6TH ST
BOISE ID 83702
E-MAIL: botto(fidahoconservation.org
E-MAIL ONLY:
JOHN R HAMMOND JR
BATT FISHER PUSCH
& ALDERMAN LLP
E-MAIL: jrh(fbattfisher.com
KEVIN HIGGINS
ENERGY STRATEGIES
215 S. STATE ST SUITE 200
SALT LAKE CITY UT 84111
E-MAIL: khigginS(fenergystrat.com
ELECTRONICI CDI PAPER SERVICE
MARY V YORK
HOLLAND & HART LLP
101 S. CAPITAL BLVD., SUITE 1400
BOISE,ID 83702
E-MAIL: myork(fhollandhart.com
BRAD M PURDY
ATTORNEY AT LAW
2019 N 17TH STREET
BOISE ID 83702
E-MAIL: bmpurdy(fhotmai1.com
KEN MILLER
SNAKE RIVER ALLIANCE
BOX 1731
BOISE ID 83701
E-MAIL: kmiler(fsnakeriverallance.org
CERTIFICATE OF SERVICE
NANCY HIRSH
POLICY DIRECTOR
NW ENERGY COALITION
811 1 ST AVE., SUITE 305
SEATTLE WA 98104
E-MAIL: nancylfnwenergy.org
SCOTT PAUL CEO
HOKU MATERIALS INC
ONE HOKU WAY
POCATELLO ID 83204
E-MAIL: spau1.ihokucorp.com
DEAN J MILLER
McDEVITT & MILLER LLP
PO BOX 2564
BOISE ID 83701
E-MAIL: joe.imcdevitt-miler.com
heatherlfmcdevitt- miler .com
~lLSECRETAR
CERTIFICATE OF SERVICE