20110826Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

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

FROM: KARL KLEIN
DEPUTY ATTORNEY GENERAL

DATE: AUGUST 25, 2011

SUBJECT: IDAHO POWER’S APPLICATION FOR APPROVAL OF OER ENERGY
EFFICIENCY INCENTIVE AGREEMENT, CASE NO. IPC-E-11-16

On August 10, 2011, Idaho Power Company applied to the Commission under Idaho
Code §§ 61-501, 61-502, and 61-503 for an Order approving the Company’s July 21, 2011 Energy
Efficiency Incentive Agreement with the Idaho Office of Energy Resources (“OER”). The
Company attached a copy of the Agreement to the Application. The Company states the Agreement
will facilitate the parties’ ability to promote cost-effective energy efficiency measures in public
schools. Application at 1-2. The Company asks the Commission to process the matter under
Modified Procedure.
THE APPLICATION
Idaho Power and OER entered the Agreement effective July 21, 2011. See Application at
1. The parties acknowledge, however, that if “it is determined that [the] Agreement requires the
express approval/acknowledgment of the Idaho Public Utilities Commission (“IPUC”), [the]
Agreement shall not become finally effective until the” IPUC unconditionally approves it.
Agreement, § 6.
By way of background, Idaho Power offers energy efficiency programs that involve
incentive payments to customers. Application at 2. OER, on the other hand, currently implements a
federally funded, K-12 Energy Efficiency Project for public schools. Id. at 2. OER has about $9.6
million in federal funds available for the project over the next 12 months. Id. at 2; Agreement § 1.
The parties have entered the Agreement to enable Idaho Power to place its incentive
payments for qualifying, OER-funded school projects into a dedicated fund for future use on
DECISION MEMORANDUM 2
additional school projects identified by OER. Application at 2-3; Agreement §§ 2-4. The parties
believe this arrangement will maximize the use of available dollars and allow OER’s energy
efficiency initiatives to benefit Idaho Power’s public school customers when federal funds are no
longer available. Application at 2; Agreement § 2.
Under the Agreement, OER will invest federal funds into energy efficiency projects for
Idaho Power’s public school customers. Application at 2. OER then will attempt to qualify the
projects for Idaho Power’s energy efficiency programs. Id.
Whenever an OER-funded project qualifies for an Idaho Power energy efficiency
program, Idaho Power will deposit a corresponding energy efficiency incentive payment into a
dedicated fund held by Idaho Power. Application at 3. The accumulating deposits will be limited
to paying for additional energy efficiency measures for Idaho Power customers identified by the
OER’s K-12 Energy Efficiency Project. Id.
The parties intend that qualification for and payment of Idaho Power incentives under
the Agreement, as well as the directed re-investment of incentive money into additional energy
efficiency measures, will be “as close to identical as possible” to the qualifications for and
payments from Idaho Power’s other customer-related incentive and energy efficiency programs. Id.
The Agreement requires the parties to keep records so the parties and regulatory
agencies will be able to audit the prudency of OER’s initial investment, IPC’s incentive payments,
and OER’s subsequent use and reinvestment of the incentive funds. Agreement § 5.
Idaho Power asks the Commission to handle this matter under Modified Procedure, RP
201 et seq.
STAFF RECOMMENDATION
Staff recommends that the case be processed through Modified Procedure, with
comments due by September 20, 2011.
COMMISSION DECISION
Does the Commission wish to process this case through Modified Procedure, with
comments due by September 20, 2011?
M:IPCE1116_kk