20120315ICL Comments.pdf

RECEIVEDBenjamin Otto (ISB No. 8292)
710 N 6th Street
Boise,ID 83701
Ph: [phone] x 12
Fax: [phone]
bottocPidaoconservation.org
2012HAR 15 AM 9: 30
Attorney for Idao Conservtion Leage
BEFORE lH IDAHO PUBI1C UTITIS COMMISSION
IN lH MAlTR OF THE
APPI1CATION OF IDAHO POWER
COMPAN FOR APPROVAL OF
MODIFICATIONS TO SCHEDULES 1,4,
AND 5 IMPLEMENTIG A TIME
VARIANT PRICING PIAN
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CASE NO. IPC-E-12-05
COMMENTS OF lH IDAHO
CONSERVATION LEAGE
The Idaho Conservation League (ICL) support Time Varant Pricing (TV) and encourges
Idao Power to expand this offerng to all c1Jtomers. These comments discuss four issues: (1)
the plan for Schedule 4, Energy Watch, (2) the design of both TVP schedules, (3) the customer
solicitation plan, and (4) applying TV to electrc vehicles. ICL taes no position on Idao
Power's predictions of financial and usage impacts because the numbers appear speculative at
this point. On this issue, we encourage the Commission to monitor a seemingly inherent
disincentive to enroll customers who might reduce their bils without changing their energy use.
Other than this comment, overall ICL support the Company's expansion of Time Varant
Pricing and offers the following to assist in this effort.
Schedule 4, Energy Watch
Idaho Power proposes to roll out Schedule 5, Time of Use rates, in 2012 and delay
Schedule 4, Energy Watch, until 2013. We agree that providing a single option for customers to
consider when switching rates wil reduce confuion and could accelerate adoption. However,
the TVP plan states that durng the delay Idao Power wil "evaluate the value of the Energy
Watch plan in comparson to other demand response resources."i In the most recent general rate
case Idaho Power stated their intent to exclude customers paricipating in the AlC Cool Credit
i Time Varant Pricing (lVP) Plan at 3.
ICL Comments
IPC-E-12-05
I March 15,2012
Time Variant Pricing Rate Designs
In the most recent general rate case, Idao Power proposed and ICL supported, changes
to the design of the TVP schedules. The most importt change was instituting year round time
of use rates. This design is much simpler to understand while stil providing price signals to
effect customer energy use. This change is paricularly importt for Schedule 4, Energy Watch,
where customers used to pay a flat rate per kilowatt durng the summer. Sending customers
price signals to spur shifting of consumption and reducing demand meets the Commissions
directive to "diligently and vigorously purue all avaiable, cost effective DSM, conservation, and
pricing options that could potentialy diplace or defer the need for additional future peakg
gen eration.))3
The strength of price signals wi determine if cusomers respond. ICL is concerned that
Idao Power is sending mixed messages about their goals for Schedule 5, Time of Use. In the
most recent rate case, Idao Power stated that Schedule 5 was designed to reflect cost of servce,
not reduce or shit load.4 However, the 1V Plan fied in the present case states this schedule
"provides customers the opportunity to . . . lower their bil whie shiing usge.''5 These
statements are not contradictory. Instead, the issue is that providig an opportunity is fine, but
strong signals wi spur cusomers to take advatage of the opportunity. To address this issue ICL
encourges Idao Power and other paries to reconsider the rate diferential in Schedule 5 to
provide a stronger price signal.
Customer Solicitation Plan
We acknowledge Idaho Power's need to limit paricipation until the new biling system is
operational. However, based on decades of experience in public engagement ICL believes a
direct mail campaign is unlikely to elicit sufficient customer enrollment to achieve the
2 Nemnich Direct at 25 - 26, IPC-E-II-08.
3 Order 30201 at 12, IPC-E-06-09, Evander Andrews CPCN (December 15, 2006).
4 Nemnich Direct at 11 - 12, IPC-E-11-08.
5 1V Plan at 2.
ICL Comments
IPC-E-12-05
2 March 15,2012
Company's own goals. These goals include studying the effects oftime variant rates on
customer's usage and evaluating the impact of these rates on Company revenues and costs.6
Good studies require a meaningful sample size, While 1,200 paricipants is meaningful our
concern is the Company's plan wil not reach this taget.
Idao Power plans to limit their solicitation of customers to direct mail and expects a 2 -
3 % response rate.7 This response rate is highly unlikely. Over decades of experience, ICL has
rarely surassed a 1 % rate, which is considered a solid response in the direct mail industr.
Instead of simply sending more letters, ICLencourages Idaho Power to consider other means of
solicitation. For instace, advertizig on the Company's website and facebook page can reach
thousands of eyes with minimal cost and effort. Another idea is to find customers who
paricipated in the pilot progrm and produce "Success Stories" similar to those produced for
DSM programs. These success stories could then become bil inserts, posters, bilboards, or
other tyes of advertising. Often finding a compellng messenger is just as importt as the
message. To reach the 1,200 paricipant taget ICL encourges the Company to cast a wide net.
One reason to use a direct mail campaign may be Idao Power's desire to only solicit
from a "sample population."s However, the advantages of limiting solicitations to a "sample
population" are unclear. ICL acknowledges the need to have 12 months of usage data justifies
limiting paricipants based on the AM meter installations. We also recognize that enrollng
renters could impose a workload burden until the biling system update is complete. But if
another reason is to "help predict the overall acceptace of this rate introduction" within the
entire residential class, then circumscribing the sample group does not make sense.9 Instead,
casting a wide net to see which tyes of customers respond wil better indicate futue response.
Respecting the limits acknowledged above while casting a wide net can be very simple.
Consider the following sample message: "Do you own a home in the Treasure Valley? If so, we
have a new rate plan that might help you save money. Lear more at ww.idaopower.com...
The Company could use this simple message in a varety of media chanels including radio
spots, web postings, and print ads. Idaho Power could even use their "GetPluggedI" website to
solicit customers. Using a varety of solicitation methods wil help meet Idaho Power's goals of
61V Plan at 1.
71V Plan at 4, 5.
8 ¡d.
91V Plan at 5.
ICL Comments
IPC-E-12-05
3 March 15,2012
"identifying customer response to different communication messages" and "help predict the
overall acceptance of this rate intrduction."io Over the next year, ICL encourges Idao Power
to consider a varety of customer solicitation tools
Applying Time Variant Pricing to Electric Vehicles
Electrc vehicles could contrbute significant new loads to Idao Power's system. ICL
commends Idao Power for thing proactively on this issue. The potential impact is so great
the ICL encourges the Company to actively promote the TV rates to electrc vehicle
purchasers. To accomplish this the Company should engage sales people at car dealerships to
ensure they are strong advocates for the TV options. When a customer choose to purchase an
electrc vehicle, they are likely to be highly conscious of potential impacts to their electrc bilL.
This heightened awareness presents an excellent opportity to transition customers to aTVP
plan. Engaging car sales people as advocates creates .a motivated messenger who has direct
contact with a customer uniquely inclined to consider a TV plan.
Conclusion
Time Varant Pricing complements the Company's curent residential tiered rate
strctue. This varety of rate designs gives customers options to control their energy bils. ICL
encourges Idao Power to cast a wide net to solicit customers and stads ready, willng, and
able to assist in this effort.
DATED this 14th day of March 2012.
Respectfully submitted,~ ~l.lsI ~ v
Benjamin J. Otto
Idao Conservtion League
I01V Plan at 5, 6.
ICL Comments
IPC-E-12-05
4 March 15,2012