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HomeMy WebLinkAbout20121221Drake Direct Testimony.pdfV LIMP 0EC21 P11 3:32 ruITI BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER COMPANY'S REQUEST TO TEMPORARILY SUSPEND THE A/C COOL CREDIT AND IRRIGATION PEAK REWARDS DEMAND RESPONSE PROGRAMS. CASE NO. IPC-E-12-29 IDAHO POWER COMPANY DIRECT TESTIMONY OF THERESA DRAKE 1 Q. Please state your name and business address. 2 A. My name is Theresa Drake. My business address 3 is 1221 West Idaho Street, Boise, Idaho 83702. 4 Q. By whom are you employed and in what capacity? 5 A. I am employed by Idaho Power Company ("Idaho 6 Power" or "Company") as Manager of Customer Relations and 7 Energy Efficiency. 8 Q. Please describe your educational background. 9 A. In May of 1990, I received a Bachelor of 10 Science Degree in Marketing with emphasis in Finance from 11 Jacksonville State University in Jacksonville, Alabama. I 12 have attended numerous seminars and conferences on pricing 13 issues, regulatory issues, marketing research, customer 14 satisfaction issues, and demand-side management ("DSM"). 15 Q. Please describe your business experience with 16 Idaho Power. 17 A. I joined Idaho Power in January 1997 as a 18 Pricing Analyst. In July 2001, my position evolved into a 19 Senior Pricing Analyst and included preparing cost-of- 20 service studies, development of the Company's tariffs, and 21 performance of duties as a regulatory liaison for customer- 22 related issues. In February 2004, I became Manager of 23 Customer Relations and Research (now referenced as Customer 24 Relations and Energy Efficiency). In that capacity, I 25 manage staff members and activities associated with DRAKE, DI 1 Idaho Power Company 1 customer satisfaction, process improvement, energy 2 efficiency, and demand response. 3 Q. What is the scope of your testimony in this 4 proceeding? 5 A. My testimony will expand on the information 6 discussed in the testimony of Mr. Mark Stokes, Manager of 7 Power Supply Planning, and what actions the Company is 8 proposing with regard to Idaho Power's demand response 9 programs. My testimony will also describe the Company's 10 investigation into short-term options for its programs and 11 explain the Company's proposed approach to responding to 12 the near-term 2013 Integrated Resource Plan ("IRP") load 13 and resource balance results as it relates to Idaho Power's 14 demand response programs. 15 Q. Please provide a brief overview of the 16 information provided by Mr. Stokes regarding peak-hour 17 resource need identified in the development of the load and 18 resource balance as part of the 2013 IRP process. 19 A. As discussed in the testimony of Mr. Stokes, 20 the load and resource balance that was updated as part of 21 the 2013 IRP process indicates there are no near-term peak- 22 hour deficits, and therefore, there is no near-term need 23 for any peak-hour supply-side or demand response resources. 24 The first capacity deficiency in the IRP analysis occurs in 25 July 2016, when the results indicate a less than 100 DRAKE, DI 2 Idaho Power Company 1 megawatt ("MW") deficiency. The deficiencies grow at a 2 relatively slow rate through the 20-year planning period, 3 resulting in a deficiency of approximately 400 MW in the 4 summer of 2022. 5 Q. When did you learn of the peak-hour resource 6 deficits identified in the load and resource balance 7 analysis? 8 A. The IRP team has been working on this analysis 9 throughout the fall; however, it was finalized just prior 10 to the Integrated Resource Planning Advisory Council 11 "IRPAC" portfolio design workshop held on November 30, 12 2012. This is when we were assured that these deficiencies 13 were the final values that would be used to develop the 14 2013 IRP. 15 Q. The Idaho Public Utilities Commission 16 ("Commission") has directed Idaho Power to pursue all cost- 17 effective DSN programs, as recently stated in Commission 18 Order No. 32245. Based on the results of the current load 19 and resource balance, does the Company still support this 20 business rationale? 21 A. Yes. The Company continues to support the 22 business rationale for pursuing all cost-effective DSM 23 programs. However, the Company identifies its DSM programs 24 in two distinct categories, energy efficiency and demand 25 response, with each category having a distinctly different DRAKE, DI 3 Idaho Power Company 1 economic valuation. The economic benefits or "alternative 2 cost" associated with energy efficiency is based on the 3 Company's forecast portfolio of energy costs. The 4 alternative cost for demand response programs is based on 5 the capacity costs of a simple-cycle turbine adjusted based 6 on their availability; in other words, the demand response 7 programs are evaluated on a capacity basis, not energy. 8 During times when the Company does not have any capacity 9 needs, the Company must consider the least cost operational 10 strategy for its demand response programs and whether the 11 programs will continue to be cost-effective in the future. 12 I. PROGRAM RESEARCH 13 Q. Based on the information provided by Mr. 14 Stokes, did the Company investigate any short-term options 15 for its demand response programs? 16 A. Yes. The Company investigated options for all 17 three of its demand response programs: FlexPeak Management 18 ("FlexPeak"), A/C Cool Credit, and Irrigation Peak Rewards. 19 I will describe the assessment of FlexPeak later in my 20 testimony. For the A/C Cool Credit and Irrigation Peak 21 Rewards programs, Idaho Power worked with its third-party 22 contractors to investigate near-term options considering 23 existing and future contracts. 24 25 DRAKE, DI 4 Idaho Power Company 1 1 Q. Does Idaho Power have a proposed option for 2 the A/C Cool Credit and Irrigation Peak Rewards programs to 3 account for the lack of near-term capacity deficits? 4 A. Yes. The Company proposes to suspend the A/C 5 Cool Credit and Irrigation Peak Rewards program for the 6 2013 summer season. Rather than suspending these two 7 programs until Idaho Power is near-term capacity deficient, 8 the Company proposes to temporarily suspend the two 9 programs for the 2013 summer season and work 10 collaboratively with stakeholders to re-evaluate the 11 programs, ultimately proposing program changes to be 12 effective prior to the 2014 summer season. However, should 13 the Commission deny the Company's request to suspend the 14 two programs through an order issued by March 1, 2013, the 15 Company stands ready to operate the programs in the summer 16 of 2013. If a Commission order denying the Company's 17 proposal is issued after March 1, 2013, it will become 18 increasingly more difficult with each day to administer the 19 programs in 2013 because of the operational and 20 administrative challenges that exist in preparation for a 21 program season. 22 Q. Idaho Power is requesting a temporary 23 suspension of two demand response programs in 2013. Given 24 that the Company has operational equipment in the field, 25 did Idaho Power consider an option that utilized the DRAKE, DI 5 Idaho Power Company 1 equipment in a different manner rather than temporarily 2 suspending the programs? 3 A. Yes. The Company considered an option to 4 use demand response as a way to offset high market energy 5 purchases by offering an energy-based incentive even when 6 the Company is expected to lack near-term capacity 7 deficits. Idaho Power estimates that the alternative cost 8 value of the demand response programs based on an energy- 9 only valuation using recent heavy load market energy prices 10 would be approximately three percent of the capacity-based 11 alternative cost value. With a corresponding reduction to 12 the incentive structure of the programs, it is very likely 13 that the Company would use the programs more often than in 14 recent years, with customers receiving a small fraction of 15 the current incentive payment. The Company believes that a 16 change to the programs of this magnitude would result in 17 extreme customer dissatisfaction and ultimately the loss of 18 a large number of program participants. 19 Q. Did the Company consider working with 20 stakeholders on a program redesign prior to filing its 21 request to temporarily suspend the programs for the 2013 22 season? 23 A. Yes. However, a number of concerns arose when 24 the Company began considering options, specifically its 25 contractual obligations with third-party vendors and the DRAKE, DI 6 Idaho Power Company 1 Company's desire to allow time for stakeholders to have an 2 opportunity to be involved in the discussions. When each 3 of these factors was considered in combination with the 4 time constraints associated with the start of the next 5 program season and a regulatory process that would allow 6 adequate time for Commission review, it became clear that 7 the Company must propose to temporarily suspend the 8 programs for the 2013 season and commit to work with 9 customers and other stakeholders on program changes that 10 could be reviewed and implemented by 2014. 11 Q. Please describe the proposed process for 12 stakeholder input into the potential changes for the A/C 13 Cool Credit and Irrigation Peak Rewards programs. 14 A. The Company will begin the collaborative 15 approach by holding workshop(s) to inform stakeholders 16 about the process for identifying resource needs. As Mr. 17 Stokes described in his testimony, resource need is 18 determined during the IRP process. In fact, a number of 19 stakeholders are already aware of the lack of near-term 20 deficits identified in the 2013 load and resource balance 21 because they are members of the IRPAC and participated in 22 the portfolio design workshop. In addition, during a 23 recent webinar and subsequent teleconference with the 24 Energy Efficiency Advisory Group ("EEAG"), which includes 25 representatives from a cross-section of customer segments DRAKE, DI 7 Idaho Power Company 1 including residential, industrial, commercial, irrigation, 2 senior-citizen, limited-income, and environmental 3 interests, as well as members of the Commission Staff, the 4 Company described the process for determining the load and 5 resource balance, the results that indicate the Company is 6 not forecasting a capacity deficit until 2016, and the need 7 for an evaluation of the demand response programs. 8 However, Idaho Power is aware that there may be additional 9 stakeholders interested in working with the Company to 10 better understand this process and will coordinate 11 discussions as necessary. 12 Q. What feedback did the IRPAC and EEAG have when 13 presented with the results of the load and resource 14 balance? 15 A. Generally, the results were understood and 16 participants appreciated the Company's desire for future 17 assessment of the programs, carefully considering the funds 18 that would be spent on programs that are not needed during 19 the 2013 season if the Company did nothing. 20 Q. What feedback did the EEAG have when presented 21 with the Company's proposed program suspension approach? 22 A. With regard to the idea of a temporary 23 suspension as outlined in this testimony, several of the 24 attending EEAG members voiced support for our approach. 25 DRAKE, DI 8 Idaho Power Company 1 Q. What results does the Company anticipate by 2 using this collaborative approach? 3 A. Idaho Power expects this collaborative 4 approach will enable the Company to file a request for 5 approval of the changes made to the programs with enough 6 time for Commission review prior to the 2014 summer season. 7 Q. Are there other considerations the Company 8 must make in changing its demand response programs in the 9 longer term? 10 A. Yes. Idaho Power's primary concern and 11 objective is that all programs are cost-effective. 12 Dramatic changes in the purpose of a program can change 13 cost-effectiveness assumptions and inputs. For example, 14 the current programs are designed to avoid or delay the 15 acquisition of supply-side resources; as such, the 16 alternative cost used for cost-effective comparison is the 17 adjusted capacity cost of a simple-cycle combustion 18 turbine. A change to the purpose of the programs will 19 likely result in a change to the economic value of the 20 programs. 21 II. 2013 SUMMER SEASON 22 Q. Please describe each of the Company's demand 23 response programs. 24 A. Idaho Power currently has three demand 25 response programs available to its customers based on the DRAKE, DI 9 Idaho Power Company 1 type or class of service taken: FlexPeak for commercial 2 and industrial service customers, A/c cool credit for 3 residential service customers, and Irrigation Peak Rewards 4 for agricultural irrigation service customers. 5 The FlexPeak program is a voluntary demand response 6 program that targets commercial and industrial customers 7 with at least 200 kilowatts of average summer billing 8 demand who are willing to reduce their loads for two to 9 four hours during summer weekdays (between 2:00 p.m. and 10 8:00 p.m.). It allows for up to 60 hours per season with 11 up to 20 events per season. Idaho Power pays a third-party 12 contractor capacity payments to make load reductions 13 available on a firm basis during summer peak months and 14 also pays energy payments for delivery of those load 15 reductions when Idaho Power dispatches more than two demand 16 response events per week. Participating customers sign a 17 contract directly with the third-party contractor that 18 specifies the incentives they will receive. 19 A/c cool credit is a voluntary demand response 20 program for residential customers. Using communication 21 hardware and software, Idaho Power cycles participants' 22 central air conditioners or heat pumps off and on via a 23 direct-load control device installed on or near the air 24 conditioner unit. Under the program, Idaho Power may cycle 25 participants' air conditioners for up to 40 hours each DRAKE, DI 10 Idaho Power company 1 month in June, July, and August. In return, participants 2 receive a $7.00 per-month credit on their Idaho Power bill 3 during July, August, and September. 4 The Irrigation Peak Rewards program is a voluntary 5 load control program currently available to all 6 agricultural irrigation customers served under rate 7 Schedule 24. Load control events happen by Idaho Power 8 turning off irrigation pumps through the use of an electric 9 switch connected to customers' electrical panels. Switches 10 are controlled either with pre-programmed electronic timers 11 via cell phone or via power-line carrier communications 12 using Idaho Power's Advanced Metering Infrastructure 13 ("AMI") system. Irrigation service locations with greater - 14 than 1,000 cumulative horsepower can manually turn off 15 selected pumps. In exchange for allowing the Company to 16 turn their pumps off, participating customers receive a 17 monthly monetary incentive during the program season. Load 18 reductions can occur Monday through Saturday for up to four 19 hours per day, for up to 15 hours per week, and for up to 20 60 hours per season. The Irrigation Peak Rewards program 21 operates during the Company's typical peak load season of 22 June 15 through August 15. 23 FlexPeak Management 24 Q. Please describe Idaho Power's contractual 25 relationship with the vendor that administers FlexPeak and DRAKE, DI 11 Idaho Power Company 1 how that factored into the Company's decision-making 2 process. 3 A. Idaho Power has contracted to make load 4 reductions available for five years and the amounts paid to 5 the third-party contractor under the agreement are based on 6 the value to Idaho Power of enrolled capacity. The 7 agreement commenced on February 23, 2009, and expires 8 February 2014. 9 Because Idaho Power is under contract to make 10 payments based on enrolled capacity, a temporary suspension 11 of FlexPeak for the 2013 season is not feasible. However, 12 Idaho Power has begun conversations with the third-party 13 contractor to discuss the possibility of contract 14 modifications to potentially reduce the cost of this 15 program for the remainder of the contract term. 16 Q. How much has Idaho Power spent year-to-date on 17 FlexPeak in 2012? 18 A. Idaho Power has spent approximately $2.9 19 million from January 1, 2012, through November 30, 2012, on 20 FlexPeak. 21 Q. What is the Company's proposal for FlexPeak 22 during the 2013 season? 23 A. Idaho Power will continue to work with the 24 third-party contractor looking for ways to reduce vendor 25 expenses during the final season of the contract while DRAKE, DI 12 Idaho Power Company 1 maintaining their contractual agreements with Idaho Power 2 customers. 3 A/C Cool Credit 4 Q. What is the Company's proposal for A/C Cool 5 Credit during the 2013 season? 6 A. The Company is proposing that tariff Schedule 7 81 be temporarily suspended for 2013. Under the temporary 8 suspension, the Company is requesting that the customer 9 incentive payments be reduced to zero, no new program 10 participants be accepted in 2013, and Idaho Power not call 11 any load control events in 2013. The proposed changes for 12 2013 are reflected in the tariffs included with the 13 Company's Application as Attachment 1. 14 Q. How much has Idaho Power spent year-to-date on 15 the A/C Cool Credit program in 2012? 16 A. Idaho Power has spent approximately $5.5 17 million from January 1, 2012, through November 30, 2012, on 18 the A/C Cool Credit program. 19 Q. Does Idaho Power anticipate any costs 20 associated with the A/C Cool Credit program to be incurred 21 in 2013 if the Commission approves the temporary suspension 22 for the 2013 summer season? 23 A. Yes. In 2013, Idaho Power still expects to 24 incur costs related to the A/C Cool Credit program for 25 contracted services. The Company's current contract with DRAKE, DI 13 Idaho Power Company 1 the A/c cool credit program vendor provides for the 2 installation and removal of load control devices, 3 maintenance on the devices, customer service for program 4 participants, and data base access for all customer service 5 inquiries of program participants. The contract will 6 expire on July 15, 2013. Anticipated expenses for 2013 7 following the contract expiration include payments to the 8 third-party contractor for the removal of switches for 9 customers who request device removal, customer service 10 inquiries, and continued access to the vendor's participant 11 database. Additionally, the company will be responsible 12 for software and license fees for the AMI switches. The 13 company anticipates spending approximately $650,000 on this 14 program in 2013, which includes the above described 15 expenses. 16 Q. Please explain the company's estimate of costs 17 related to the removal of load control devices in 2013? 18 A. To be clear, the company is not proposing any 19 removal of devices. However, the company will need to 20 respond to customer service requests for removal on an ad 21 hoc basis. In order to estimate the total cost of device 22 removal in 2013, the company anticipates 15 percent of the 23 program participants will request to have their devices 24 removed. Each device costs approximately $85 to remove; 25 DRAKE, DI 14 Idaho Power company 1 therefore the projection of total removal costs in 2013 is 2 approximately $425,000. 3 Q. How did the Company estimate the program drop- 4 out rate in the cost estimate above? 5 A. To estimate the drop-out rate, Idaho Power 6 looked at the average rate of customers who drop out of the 7 program, which is 14 percent. Expecting the drop-out rate 8 might be slightly higher for a temporarily suspended 9 program but not materially different from current trends; 10 the Company estimated a total drop-out rate of 15 percent. 11 Q. You mentioned the current contract with the 12 A/C Cool Credit program vendor expires July 15, 2013. Has 13 the Company attempted to re-negotiate this contract for the 14 2013 program season or make contract modifications for the 15 2013 program season? 16 A. Yes. Idaho Power has begun discussions with 17 the vendor on possible contract revisions that will retain 18 their services under a limited scope contract and would 19 only include cost provisions associated with customer 20 services, such as device removal, customer inquiries, and 21 database maintenance. 22 Q. Is there an alternative if the modification of 23 the contract is not feasible after July 15, 2013? 24 A. Yes. If Idaho Power is not able to negotiate 25 a limited scope contract with the vendor, the Company will DRAKE, DI 15 Idaho Power Company 1 obtain the services of a qualified Heating, Ventilation and 2 Air Conditioning ("HVAC") contractor to remove devices at 3 the customer's request. The existing customer service and 4 database maintenance would be transferred to the Company 5 and would remain a cost of the program. 6 Q. Why does the Company feel a temporary rJ suspension is in the best interest of customers? 8 A. Idaho Power is committed to making prudent, 9 thoughtful decisions on how it manages programs and 10 utilizes customer funds. To that end, the Company believes 11 it is prudent to avoid the expenses associated with the 12 program. In 2012, the Company anticipates spending 13 approximately $749,000 in customer incentive payments 14 related to the A/C Cool Credit program. Because demand 15 response incentive payments are an expense recovered 16 through the Company's base rates and Power Cost Adjustment 17 ("PCA") mechanism, a temporary suspension of the program 18 that includes no incentive payments to customers will 19 result in a direct customer benefit recognized in the 2013- 20 2014 PCA. 21 Q. In the Company's request for a prudence review 22 of its 2011 DSM expenditures (Case No. IPC-E-12-15), Idaho 23 Power indicated that it was currently replacing load 24 control devices of current A/C Cool Credit program 25 DRAKE, DI 16 Idaho Power Company II participants. Please describe the current status of the 2 switch replacements. 3 A. There were several issues with the paging 4 switches used to cycle participants' air conditioners 5 during the 2011 season, resulting in payments of incentives 6 when cycling did not actually occur. To remedy those 7 problems, and as part of the Company's current contract, 8 the vendor began replacing approximately 23,500 paging 9 switches with ANT compatible switches at an approximate 10 cost of $5 million. To date, there are approximately 8,000 11 switches remaining to be replaced. 12 Q. How much of the approximately $5 million has 13 the Company spent to date on the switch replacements? 14 A. As of December 7, 2012, the Company has spent 15 approximately $4.5 million. 16 Q. Taking into consideration the Company's 17 proposal to temporarily suspend the A/C Cool Credit 18 program, what is the Company's recommendation for the 19 remaining switch replacements? 20 A. Idaho Power has determined that the best 21 business decision for the Company and its customers is to 22 halt the changing out of the remaining switches, pending 23 the outcome of this filing. 24 25 DRAKE, DI 17 Idaho Power Company 1 Q. Are there contractual issues with the vendor 2 the Company must contend with in order to halt the 3 remaining switch replacements? 4 A. Yes. The contract with the A/C Cool Credit 5 vendor requires the Company to provide a 15-day written 6 notice of termination of the contract. On December 14, 7 2012, the Company sent a 15-day notice of intent to 8 terminate the portion of the contract pertaining to the 9 remaining switch replacements and directed the vendor to 10 immediately discontinue work under the contract. 11 Irrigation Peak Rewards 12 Q. What is the Company's proposal for Irrigation 13 Peak Rewards during the 2013 season? 14 A. The Company is proposing that tariff Schedule 15 23 be temporarily suspended for 2013. Under the temporary 16 suspension, the Company is requesting that the customer 17 incentive payments be reduced to zero, contracts with 18 existing participants will not be renewed after their March 19 15, 2013, expiration, no new program participants will be 20 accepted in 2013, and Idaho Power will not dispatch any 21 load control in 2013. The proposed changes for 2013 are 22 reflected in the tariffs included with the Company's 23 Application as Attachment 1. 24 Q. How much has Idaho Power spent on the 25 Irrigation Peak Rewards program in 2012? DRAKE, DI 18 Idaho Power Company 1 A. Idaho Power has spent approximately $12.3 2 million from January 1, 2012, through November 30, 2012, on 3 the Irrigation Peak Rewards program, of which approximately 4 $11.0 million was for customer incentive payments and $1.3 5 million for other expenses. 6 Q. Does Idaho Power anticipate any costs 7 associated with the Irrigation Peak Rewards program during 8 the temporary suspension in 2013? 9 A. Yes. Idaho Power is currently under contract 10 with a third-party vendor for the purchase, installation, 11 and maintenance of equipment on program participants' pump 12 panels. In addition, the contract allows Idaho Power to 13 dispatch events on a customized vendor website while also 14 providing the customer access to a platform that allows for 15 pump management and pump specific operational information. 16 The contract will expire on December 31, 2012. 17 Considering the proposal to temporarily suspend the 18 Irrigation Peak Rewards program in 2013, the Company is in 19 discussions with its current vendor to determine options 20 for the 2013 season. The Company would spend approximately 21 $600,000 to $900,000 in program related expenses for 2013 22 to keep load control devices operational. Idaho Power is 23 exploring other alternatives with its vendor to lower this 24 cost. The primary expense in maintaining the current 25 infrastructure of the program would be an annual per device DRAKE, DI 19 Idaho Power Company 1 service fee to provide minimal maintenance to about 3,000 2 devices, website maintenance, and telecommunication costs. 3 This maintenance fee includes maintaining the customized 4 vendor website and providing customers access to the web- 5 based platform described above. The Company also expects 6 to incur costs associated with a minimal level of 7 maintenance on devices, as well as expenses associated with 8 the removal of devices the Company is anticipating 9 receiving from a small number of participants. 10 Q. Please explain the Company's estimate of costs 11 related to the removal of load control devices attached to 12 participant's electrical panel(s). 13 A. To estimate the total cost of device removal 14 in 2013, we estimate that very few customers will request 15 removal of devices, especially if future program 16 participation is based on having a device. Idaho Power 17 only estimates less than 1 percent of customers will 18 request devices be removed. This results in an estimate of 19 removal costs for 2013 of approximately $12,000. 20 Q. How did the Company determine the estimate of 21 load control device removals in the cost estimate above? 22 A. Since 2009, there have been approximately 15 23 percent of the initial devices that have not participated 24 in the past four years. Each year there are approximately 25 10 percent of the devices that are not re-enrolled in the DRAKE, DI 20 Idaho Power Company 1 following season. Despite receiving no incentive, 2 customers have continued to allow these devices to remain 3 attached to their pump panels with the anticipation of 4 enrolling them some time in the future. Each year there 5 have been no more than five devices that have been 6 requested removed. With the anticipation of the program 7 coming out of suspension, the Company believes customers 8 will continue to allow the devices to remain on their pump 9 panels for future enrollment. Therefore, an estimate of 1 10 percent which would include up to 30 devices is a 11 reasonable estimate. 12 Q. Why does the Company feel a temporary 13 suspension is in the best interest of customers? 14 A. As stated earlier, Idaho Power is committed to 15 making prudent, thoughtful decisions on how it manages 16 programs and utilizes customer funds. To that end, the 17 Company believes it is prudent to avoid the expenses 18 associated with the program. In 2012, the Company 19 anticipates spending approximately $11 million in customer 20 incentive payments related to the Irrigation Peak Rewards 21 program. Similar to A/C Cool Credit customer incentive 22 payments, Irrigation Peak Rewards incentive payments are an 23 expense recovered through base rates and the PCA. The 24 temporary suspension of Irrigation Peak Rewards with no 25 DRAKE, DI 21 Idaho Power Company 1 incentive payments will result in a direct customer benefit 2 recognized in the 2013-2014 PCA. 3 III. CUSTOMER COMMUNICATION 4 Q. How does the Company plan to communicate the 5 program changes to participating customers? 6 A. Due to the complexity in explaining the 7 process for determining resource need and the subsequent 8 approach to dealing with the lack of near-term capacity 9 deficits, while also recognizing the level of program 10 participant engagement, the Company felt the most effective 11 approach for informing customers would be to mail a letter 12 directly to all program participants. The letter would 13 also provide an opportunity to notify participants of the 14 Company's intent to collaboratively involve stakeholders in 15 discussing program changes for the future and to allow 16 irrigation customers to better plan for the 2013 17 agricultural season. 18 Q. How many program participants will receive the 19 letter? 20 A. The Company will mail a letter to 21 approximately 35,000 A/C Cool Credit participants and a 22 letter to approximately 600 Irrigation Peak Rewards 23 participants. The letters are included as Attachment 2 to 24 the Application. 25 Q. Does this conclude your testimony? DRAKE, DI 22 Idaho Power Company 1 A. Yes. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 DRAKE, DI 23 Idaho Power Company 1 ATTESTATION OF TESTIMONY 2 3 STATE OF IDAHO 4 ss. 5 County of Ada 6 7 8 I, Theresa Drake, having been duly sworn to testify 9 truthfully, and based upon my personal knowledge, state the 10 following: 11 I am employed by Idaho Power Company as the Manager 12 of Customer Relations and Energy Efficiency and am 13 competent to be a witness in this proceeding. 14 I declare under penalty of perjury of the laws of 15 the state of Idaho that the foregoing pre-filed testimony 16 and exhibits are true and correct to the best of my 17 information and belief. 18 DATED this 21st day of December, 2012. 19 20 21 Theresa Drake 22 23 SUBSCRIBED AND SWORN to before me this 21st day of 24 December, 2012. 25 % %1A S'Soll Sill.,... 26 27 28 29 30 US LIC Idaho Residing a c—f-&a 1 My commission expires: 31 DRAKE, DI 24 Idaho Power Company