20130416Petition for Clarification.pdf

90 IDAHO PIVER
LISA D. NORDSTROM
Lead Counsel
lnordstrom(idahopower.com
RE C1
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-uThE OMlSStU
An IDACORP Company
April 16, 2013
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-12-29
Temporary Suspension of Demand Response Programs - Idaho Power
Company's Petition for Clarification of Order No. 32776
Dear Ms. Jewell:
Enclosed for filing in the above matter are an original and seven (7) copies of Idaho
Power Company's Petition for Clarification of Order No. 32776.
Very truly yours,
Lisa D. Nordstrom
LDN:evp
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
LISA D. NORDSTROM (ISB No. 5733)
JULIA A. HILTON (ISB No. 7740)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
Inordstromcidahopower.com
ihiItonidahopower.com
20I3APR 1$ PM 14: 114
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-12-29
AUTHORITY TO TEMPORARILY )
SUSPEND ITS A/C COOL CREDIT AND ) IDAHO POWER COMPANY'S
IRRIGATION PEAK REWARDS ) PETITION FOR CLARIFICATION OF
DEMAND RESPONSE PROGRAMS. ) ORDER NO. 32776
COMES NOW, Idaho Power Company ("Idaho Power' or "Company"), by and
through its undersigned counsel, and hereby petitions the Idaho Public Utilities
Commission ("Commission") to clarify, pursuant to RP 325, that: (1) Idaho Power has
considered whether the Residential Air Conditioner Cycling ("A/C Cool Credit") and
Irrigation Peak Rewards demand response programs could be utilized to respond to
system emergencies during the summer of 2013 and (2) that it is in the interest of its
customers to fully suspend these programs for 2013 until modifications can be
evaluated and potentially made for operation of the Company's demand response
programs in 2014 and beyond. This Petition is based on the following:
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32776-1
I. BACKGROUND
1.On December 21, 2012, Idaho Power filed an Application for an order
authorizing it to temporarily suspend the A/C Cool Credit and Irrigation Peak Rewards
demand response programs for 2013. The A/C Cool credit program allows Idaho Power
under tariff Schedule 81 to periodically "cycle" the central air conditioning units of
participating residential customers during the summer months of June, July, and August
in exchange for the customer receiving an incentive for participation in the form of a bill
credit in July, August, and September. Under the Irrigation Peak Rewards program,
Idaho Power can turn off the irrigation pumps of participating irrigation customers for a
limited number of hours during the three summer months of the program in exchange
for the customer receiving an incentive for participation in the form of a bill credit in July,
August, and September. Based upon the peak-hour capacity planning criteria of 90th
percentile water conditions and 95th percentile weather conditions used in its load and
resource balance prepared for the 2013 Integrated Resource Plan ("IRP"), the Company
identified no need for peak-hour resources like demand response programs until July
2016. Suspending all incentive payments under the two programs had the potential to
save customers nearly $12 million of direct incentive expenses, which would be
recognized in the 2013-2014 Power Cost Adjustment providing a direct customer
benefit.
2.On January 10, 2013, the Commission issued a Notice of Application and
Intervention Deadline. Order No. 32713. The Commission granted the timely Petitions
to Intervene filed by the Idaho Irrigation Pumpers Association, Inc., Idaho Conservation
League, and Snake River Alliance. Order Nos. 32725, 32718, and 32713.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32776-2
3. Following a prehearing conference in this matter on January 29, 2013, the
Company, Intervenors, and Commission Staff (hereinafter referred to as the "Parties")
filed a proposed settlement stipulation on February 14, 2013. The Parties agreed to
suspend the two programs for 2013 and asked the Commission to schedule workshops
to discuss and evaluate further changes to all of the Company's demand response
programs for the 2014 program seasons and beyond. On February 20, 2013, the
Commission issued a Notice of Proposed Settlement and requested public comments
on the proposed settlement stipulation. Order No. 32747.
4.On April 2, 2013, the Commission issued an order approving the Parties'
proposed settlement stipulation and directed Idaho Power to file conforming tariffs within
14 days. Order No. 32776 at 8. It was also ordered that the Commission will open a
new docket for the purpose of assessing the A/C Cool Credit and Irrigation Peak
Rewards programs for 2014 and beyond, and that Staff counsel will convene an
informal scheduling conference for the new docket.' Id.
5.As required by Order No. 32776, Idaho Power filed conforming tariffs for
Schedule 23, Irrigation Peak Rewards, and Schedule 81, Residential Air Conditioner
Cycling Program, on April 16, 2013.
II. PETITION FOR CLARIFICATION
6.On page 8 of Order No. 32776, the Commission directed the Company "to
consider whether these programs might be utilized to respond to system emergencies in
2013 and in the future." The Company wishes to clarify that it evaluated the role of
1 Idaho Power believes that the new docket will allow stakeholders to discuss the operation of all
three of Idaho Power's demand response programs—NC Cool Credit, Irrigation Peak Rewards, and
FlexPeak Management.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32776-3
demand response programs in responding to system emergencies prior to reaching
agreement with Parties as to the terms of the proposed settlement stipulation.
7.Idaho Power believes that demand response programs play a limited role
in responding to system emergencies. Demand response programs are designed to
minimize or delay the need to build new supply-side resources by reducing peak loads
for short periods of time when the utility is experiencing very high loads and has
inadequate resources to serve them. The Company evaluates future capacity shortfalls
through its IRP process, and plans for resources accordingly to mitigate any shortfalls.
Idaho Power presently has adequate capacity on its system to meet peak-hour needs
even under extreme weather and water conditions, and although water conditions have
worsened since filing its proposal to suspend the A/C Cool Credit and Irrigation Peak
Rewards programs in December 2012, the fundamental load and resource risk profile
has not changed. Idaho Power has a load curtailment system in place for system
emergencies.
8.The Company evaluated the use of the A/C Cool Credit and Irrigation
Peak Rewards programs for emergency response purposes prior to filing its proposal to
suspend the programs and concluded that the costs to use the programs for
emergencies would essentially be the same as keeping the programs fully operational.
The Company did not believe that it was a prudent use of customer money to pay for
insurance against an extreme condition where the programs could be used to prevent
an outage or load curtailment under system emergency conditions. Rather, the
Company filed to suspend the programs and place them in 'maintenance' mode for the
2013 program seasons.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32776-4
9. This very issue was also discussed with Parties during the January 29,
2013, settlement discussions and Parties agreed that a full suspension of the programs
for 2013 was the best approach because it would not be appropriate for the Company to
have a 'free call' on capacity. Concerns were also raised with regard to the customer
confusion and potential dissatisfaction that would arise from expectations for program
suspension, but then finding that the programs could still be used for emergencies.
Parties agreed that the communication required to change customer expectations would
be difficult and might result in higher drop-out rates, potentially eroding future
participation.
10.The approved settlement stipulation was reached by the Parties with the
understanding that the use of the A/C Cool Credit and Irrigation Peak Rewards
programs for emergencies or otherwise would not occur in 2013. To modify the terms
of the settlement stipulation, Idaho Power believes it would be required to revisit this
issue with Parties. Sufficient time does not exist to revisit this issue and still have all of
the components of the programs contracted for, tested and in place for the 2013
program seasons.
11.Idaho Power would also like to point out that the temporary suspension
will not apply to the Company's commercial and industrial FlexPeak Management
demand response program, which can provide Idaho Power's system with
approximately 35 mega-watts ("MW") of demand reduction capacity in the summer of
2013.2
2 On March 7, 2013, Idaho Power filed a petition with the Commission for approval of an
amendment to the contract with its third-party contractor EnerNoc, Inc., that, if approved, would reduce
the weekly MWs of demand reduction capacity obligations from an average of 35 MW per week to a
range of 20 MW to 35 MW per week. Case No. IPC-E-13-04.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32776-5
12. Idaho Power has fully evaluated its system's need for demand response
programs in 2013, both before it filed its Application and during settlement discussions
with Parties. The Company ultimately filed tariffs that were a reflection of the
Settlement Stipulation filed on February 14, 2013, stating that "Idaho Power will not
initiate any load control events in 2013" effective April 1, 2013. The Company believes
that the $10.1 million customer benefit that will be recognized in the 2013-2014 Power
Cost Adjustment by suspending full incentive payments and making continuity
payments as approved in Order No. 32776 has greater value to customers than the
limited system emergency benefit offered by the A/C Cool Credit and Irrigation Peak
Rewards demand response programs.
III CONCLUSION
NOW, THEREFORE, Idaho Power respectfully requests the Commission
acknowledge that Idaho Power has considered whether the A/C Cool Credit and
Irrigation Peak Rewards programs could be utilized to respond to system emergencies
and that it is in the customers' interest to fully suspend them for 2013 as reflected in the
Settlement Stipulation that was approved by the Commission in this case until
modifications can be evaluated and potentially made for program operation in 2014 and
beyond.
Respectfully submitted this 16th day of April 2013.
LISA D. NORDSTRPM
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32776-6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 16th day of April 2013 I served a true and
correct copy of IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF
ORDER NO. 32776 upon the following named parties by the method indicated below,
and addressed to the following:
Commission Staff
Donald L. Howell, II
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
Idaho Irrigation Pumpers Association, Inc.
Eric L. Olsen
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
201 East Center
P.O. Box 1391
Pocatello, Idaho 83204-1391
Anthony Yankel
29814 Lake Road
Bay Village, Ohio 44140
Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North Sixth Street
Boise, Idaho 83702
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X Email elo(racinelaw.net
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X Email bottocidahoconservation.orq
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32776-7
Snake River Alliance
Ken Miller, Clean Energy Program Director
Snake River Alliance
P.O. Box 1731
Boise, Idaho 83701
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X Email kmiIlersnakeriveralliance.orq
Elizabdth Paynter, L'gal Assistant
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 32776-8