20120314Comments.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
RECEIVED
2011 MAR '4 PH 2: 58
IDP,H" p.: "'1! 1(':f".,. V . "LJ c~~~,.l..,
UTILITIES COr,lMISSION
Street Address for Express Mail:
472 W WASHINGTON
BOISE ID 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR APPROVAL ) CASE NO. IPC-E-12-05
OF MODIFICATIONS TO SCHEDULES 1,4, )
AND 5 IMPLEMENTING A TIME VARIANT )PRICING PLAN. ) COMMENTS OF THE
) COMMISSION STAFF
)
)
COMES NOW the Staff of the Idaho Public Utilties Commission, by and through
its Attorney of record, Weldon B. Stutzman, Deputy Attorney General, and in response to the
Notice of Application and Notice of Modified Procedure issued in Order No. 32466 on February
22, 2012, submits the following comments.
BACKGROUND
On January 19,2012, Idaho Power Company fied a tariff advice proposing numerous
modifications to tariffs: Schedule 1 Residential Service, Schedule 4 Residential Service Energy
Watch Program, Schedule 5 Residential Service Time-of-Day Program, and the Schedule Index.
The changes are proposed in order to implement a Time Variant Pricing (TVP) plan. Idaho
Power enclosed its 2012 TVP Rollout Plan with its proposed tariff changes. According to the
Company's plan, the goal ofa TVP structure is "to offer customers a choice of pricing plans
STAFF COMMENTS 1 MARCH 14,2012
while providing them with better tools to manage their energy usage, to provide the Company
with the opportunity to further study the effects of a time variant rate on customers' usage, and to
help shape the Company's future communication efforts." TVP Plan, p. 1. During a pilot
implementation, the Company wil invite residential customers who have advanced metering
infrastructure (AMI or advanced meters) installed and sufficient usage history to participate.
The Plan affects two residential time-varant pricing tariffs already in effect: Schedule 5,
Time-of-Day pilot and Schedule 4, Energy Watch pilot. The Company proposes to begin a
limited offering of the Schedule 5 Time-of-Day rates during 2012 "in order to be able to limit the
number of paricipants until Idaho Power's new customer biling and information system is in
place and in order to study TVP impacts on customer usage as well as Company costs and
revenues." TVP Plan, p. 1-2. Schedule 5 wil be capped at 1,200 customers in the greater Boise
area during 2012, and the Company plans to expand the program in 2013. The Time-of-Day
plan uses peak and off-peak pricing in the summer and non-summer months, and is designed to
send price signals to customers that more closely reflect the cost of service. The Time-of-Day
structure "also provides customers the opportunity to tae control of when they use energy and
possibly lower their bil by shifting usage to lower cost time periods." TVP Plan, p. 2.
Idaho Power is proposing to suspend the curent Schedule 4 Energy Watch pilot tariff for
approximately one year. The Company asserts that suspending the Energy Watch tariff and
offering only the Time-of-Day Schedule during the first year allows a less confusing phase in of
the Plan. TVP plan, p. 3. Idaho Power states that delaying the Energy Watch plan will enable
the Company "to evaluate proper integration of a critical peak pricing program with other
options provided for the Company's residential customers (i.e., how Energy Watch and the
Company's residential demand response program (AIC Cool Credit) can best work together)."
Id
Due to the proposed modifications to the Time Variant Plan, the Company has proposed
numerous minor changes to the Schedule Index. The term "Standard Plan" has been added to
Schedule 1 to delineate it from the Company's other residential options. Additionally, several
alterations to the Schedule Index have been added to reflect past Commission orders.
Staff recommended that the filing be suspended and the tariff advice be treated as an
application and processed under Modified Procedure with a 21-day comment period. IDAP A
31.01.01.134.02. Some of the proposed modifications are relatively minor, but some proposed
alterations to the Time Variant Program are substantive and warant fuher review.
STAFF COMMENTS 2 MARCH 14,2012
Furthermore, the Company is proposing major modifications to the Energy Watch and Time-of-
Use programs, particularly relating to selecting participant criteria. Proceeding by modified
procedure allows interested parties an opportunity to provide comment and the Company an
opportunity to provide additional information for the programs' considerable programmatic
modifications.
STAFF REVIEW
Staffhas reviewed the 2012 TVP Rollout Plan and the proposed modifications to Idaho
Power's Time Variant pilot tariff schedules. The Company states that the Plan wil "provide the
Company with the opportunity to fuher study the effects of a time variant rate on customers'
usage, and to help shape the Company's future communication efforts" and it wil also "provide
an opportunity to evaluate the impact of this new rate offering on Company revenues and costs."
p. 1. Furhermore, Time-of-Day is "designed to send price signals to customers that more
closely reflect the costs of serving those customers." p. 2.
Staff finds the Plan is consistent with Commission Order No. 30292: "time-of-use pricing
pilots are important programs with potential benefits to both customers and the Company" and
that "these programs wil continue to be operated with the expectation that time-variant pricing
wil be implemented system wide."
Schedule 5: Time-or-Day
The Company proposes several tariff modifications to Schedule 5 including:
· Expansion of program from the Emmett Valley to all residential customers,
· Caps program paricipation to 1 ,200 metered service points,
· Paricipants wil be placed on the Schedule within seven business days of the
request rather than at the next scheduled meter reading,
· Paricipant cancellation applicable at the most recent meter read date,
· Incorporates six specific holidays to the off-peak pricing for the summer and non-
summer seasons,
· Adds the term "PLAN" to the end of the title,
· Renames summer on-peak to "peak", and
· Renames non-summer mid-peak to "peak."
STAFF COMMENTS 3 MARCH 14,2012
Staff believes most of the tariff modifications are minor changes and do not materially
affect customers. Staff wil focus its comments on the expansion of the program, including
limited enrollment for 2012.
Accompanying the proposed taiff changes is a 2012 Time Variant Rollout Plan. The
voluntar Time-of-Day plan tagets customers with a higher usage pattern (considered average or
above average usage) in the greater Boise metro area that have 12 months of AMI data. With a
1,200 paricipant cap during the rollout period, the Company states that no Schedule 1 customer
wil be denied from Schedule 5 except net metering and rental customers. The Company
concedes their current customer biling and information system is the primar impediment to
expanding the Time-of-Day rate structure beyond 1,200 paricipants for 2012. However, a new
biling system is scheduled to be online at the end of the year that wil presumably provide the
means to expand paricipation going forward. Previously, 76 Emmett valley customers were
enrolled on Schedule 5. Staff believes that given the curent situation, the 1,200 paricipant cap
is sufficient for the Company to analyze the program.
The Company included in its TVP plan an analysis of possible revenue impacts to the
Company for new Schedule 5 customers. By comparing Schedule 1 and 5 rates to a 250
randomly selected test group, and assuming no change in energy usage, the annual biled amount
for an average customer would be $24.43 lower by switching to Schedule 5. The largest anual
biled savings within the test group is $651.25. The results demonstrated that 97% of the test
group wil see 9% (+/-) annual bil impact with no change in usage.
The Company and Staff recognize that, absent a mandatory program, customers whose
bils decrease with Time-of-Day rates are more likely to voluntarily enrolL. Under this scenario,
the Company estimates a decrease in revenue of a range of $1.03 to $651.25 ($1,200 to $781,500
for 1,200 paricipants). An Energy Use Advising Tool wil be made available on Idaho Power's
website to help customers determine the bil impacts from switching to Schedule 5 based on
historical usage data. Staff is concerned that if paricipants are mainly those who financially
benefit from the rate structure without adjusting consumptive behavior ("structural winners"), the
result would be revenue erosion from the residential class with no discernible system benefits.
The Company states that it wil conduct a comprehensive financial and usage analysis to
create a true-up mechanism. p.9. Staff recommends a full evaluation report be submitted to the
Commission prior to the Company revising or expanding its residential time variant pricing
tarffs. The evaluation should address the goals stated in the rollout plan and a customer surey
STAFF COMMENTS 4 MARCH 14,2012
including, but not limited to, behavioral data (i.e. changes in customer consumption and
consumption patterns), any increases in customer-initiated energy efficiency measures, Company
performance, and financial impacts. The analysis must be mindful that the voluntar program
targets a specific demographic, and thus the results may not be representative of the Company's
residential sector as a whole.
Schedule 4: Energy Watch
The Company proposes several taff modifications to Schedule 4 including:
· Suspension of the program, and
· Adds the term "PLAN" to the end of the title.
The Company proposes to suspend Schedule 4, Energy Watch Program for
approximately one year. The Company states that the suspension of Schedule 4 wil lessen the
confusion for customers while rollng out an expanded Time-of-Day pilot program. p.2.
Staff believes the temporary suspension of Schedule 4 is unfortunate. Schedule 4 has
been a successful resource for peak load reduction, even with relatively small paricipation (45 in
the Emmett Valley in 2011). As stated in the Company's 2009 Time Variant anual report (the
last anual report fied) for the Emmett Valley, "customers substantially reduced their load
during the Energy Watch events" (p. 4) and that customers are "clearly...reducing their usage
during Energy Watch events" (p. 6). The report concluded "Energy Watch program paricipants
appear to reduce load during the Energy Watch events while it appears that Time-of-Day
program paricipants do not engage in load shifting" (p. 11) i .
The Energy Watch program clearly sends strong pricing signals to decrease consumption
during critical peak events. While Staff views the Energy Watch program suspension as
unfortunate, Staff recognizes that there is value in customers becoming more comfortable with a
new rate design before adding an additional layer of complexity. Staff expects that the Company
wil reinstate the program in 2013.
1 During 2009, the Time Variant program consisted of 49 Energy Watch paricipants and 79 Time-of-Day
paricipants. The number of paricipating customers in 201 1 for Energy Watch declined to 45 customers and 76 for
Time-of-Day. Based on data provided by Idaho Power (see Attachment A), Schedule 4 customers shifted between
one-third to one-half of their demand off peak.
STAFF COMMENTS 5 MARCH 14,2012
STAFF RECOMMENDATION
Staff recommends the Commission approve the Company's Application to implement its
2012 TVP Rollout Plan. The 2012 TVP Rollout Plan wil expand Schedule 5, Time-of-Day
Program to 1,200 paricipants and temporarily suspend Schedule 4, Energy Watch. Staff
recommends a full evaluation be performed and submitted to the Commission for approval prior
to the Company revising its residential time varant pricing programs.
Finally, Staff recommends approval of the updated schedule index.
Respectfully submitted this \ t #-day of March 2012.
~~Weldon B. Stut
Deputy Attorney General
Technical Staff: Nikki Karavich
Bryan Lanspery
Daniel Klein
i:umisc:commentslipce i 2. 5wsnkbldk comments. doc
STAFF COMMENTS 6 MARCH 14,2012
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 14TH DAY OF MARCH 2012,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-12-05, BY E-MAILING AND MAILING A COPY THEREOF,
POSTAGE PREPAID, TO THE FOLLOWING:
LISA D NORDSTROM
IDAHO POWER COMPANY
P.O. BOX 70
BOISE IDAHO 83707
E-MAIL: Inordstrom(ßidahopower.com
GREGORYWSAID
IDAHO POWER COMPANY
P.O. BOX 70
BOISE IDAHO 83707
E-MAIL: gsaid(ßidahopower.com
SECRETARY
CERTIFICATE OF SERVICE