20130220notice_of_proposed_settlement_order_no_32747.pdf

Office of the Secretdry
Serv~ce Date
February 20, 201 3
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 IRRlGATION ) NOTICE OF
PEAK REWARDS DEMAND RESPONSE ) PROPOSED SETTLEMENT
PROGRAMS )
) NOTICEOF
) COMMENT PERIOD
)
) ORDER NO. 32747
On December 21, 2012, Idaho Power Company filed an Application seeking
Commission authorization to "temporarily suspend" its A/C Cool Credit and Irrigation Peak
Rewards demand response programs for 2013. The A/C Cool program allows the utility to
periodically "cycle" the central air conditioning units of participating residential customers
during the summer months of June, July, and August. See tariff Sch. 81. The Peak Rewards
program allows the utility to turnoff the irrigation pumps of participating irrigation customers for
a limited number of hours during the three summer months. See tariff Sch. 23. These two
voluntary programs are designed to reduce loads during summertime peak-hour demand.
Customers participating in these two programs are compensated with billing credits for the three
summer months.
On January 10, 2013, the Commission issued a Notice of Intervention and Notice of
Preliearing Conference. Timely Petitions to Intervene were filed by the Idaho Irrigation Pumpers
Association, Inc. (the "Irrigators"); Idaho Conservation League (ICL); and Snake River Alliance
(SRA). The Commission granted these Petitions to Intervene. See Order Nos. 32725, 32718,
3271 3. On January 29, 201 3, the Commission convened a prehearing conference in this matter.
On February 14, 2013, the Company, intervenors and Commission Staff (the
"Parties") filed a proposed settlement. The Parties agreed to suspend the two programs for 2013
and urged the Commission to schedule further workshops to discuss future changes to the
programs for years 2014 and beyond. In this Notice, the Commission seeks public comment on
the proposed settlement.
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ORDER NO. 32747
BACKGROUND
A. The Application
In its Application, the Company reported that its 201 3 Integrated Resource Plan (IRP)
shows that the peak-hour projected loads for the summer months does not exceed the Company's
generation resources. More specifically, the Company maintained that its new IRP does not
show "a peak-hour deficit until July 201 6 and therefore [there is] no need [to employ] peak-hour
[load reduction] resources like" the AIC Cool and Peak Rewards programs in 2013. Application
at 2-3. Consequently, the Company requested that it be allowed to temporarily suspend these
two demand response programs for the 2013 season (including the billing credits)' while the
Company works with stakeholders to re-assess the programs prior to the 2014 summer season.
Id. at 5.
The Company envisions using a collaborative approach with interested stakeholders
to develop and review changes to the two programs during calendar year 2013. "However,
should the Commission deny the Company's request to suspend the two programs . . ., the
Company stands ready to operate the programs in the summer of 2013." Application at 6. If the
Commission approves the temporary suspensions, the Company would adjust its tariff Schedule
23 (Peak Rewards) and Schedule 81 (AIC Cool) to show that the customer incentive payments
would be reduced to zero, no new program participants would be accepted in 2013, and that
Idaho Power would not initiate any load control events for either program in 2013. Id. at 6-7.
B. Projected Costs and Savings
The Company included prefiled direct testimony in support of its Application. Idaho
Power witness Theresa Drake stated that in 2012 the Company spent approximately $5.5 million
on the AIC Cool program and approximately $12.3 million on the Irrigation program. Drake at
13, 19. She asserted that temporary suspension of the AIC Cool program would allow the
Company to save approximately $749,000 in payments to participating customers. Drake at 16.
Temporary suspension of the Peak Rewards program would save about $10.9 million in 2013.
The Company does not anticipate removing any of the customer load control devices but
recognized that customers may elect to no longer participate in the program. The Company
I In the AIC Cool program, customers receive a monthly billing credit of $7.00 for each of the three summer months.
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calculated that 15% of customers may elect to have their devices removed which would result in
removal costs to the Company.
The Cornpany also reported that it anticipates spending approximately $650,000 on
the A/C Cool program in 2013 for customer service inquiries, maintenance on the devices,
customer service for program participants, and maintaining access to the data bases. Id. at 14.
Additionally, the Company will be responsible for "software and license fees for the AM1
switches." Id. Likewise, the Company estimated it will spend between $600,000 and $900,000
on the Irrigation program to keep the load control devices operational. Drake at 19.
C. The Prehearing Conference
The Commission convened its prehearing conference on January 29, 2013. Idaho
Power, the three intervenors, and Commission Staff attended and participated in the conference.
The purpose of the prehearing conference was for the Parties to advise the Commission on the
appropriate manner to process this case. Order No. 32713 at 4. Despite the Irrigators' initial
request that the Commission schedule a technical hearing to consider the proposed suspensions,
all the Parties agreed at the prehearing conference that this Application could be processed
without a technical hearing. The Parties further agreed that a settlement workshop be held on
February 6, 2013, to discuss the short-term suspension issues (for 2013) and establish a schedule
to address the longer term issues (2014 and beyond) of the two demand reduction programs. In
addition, Idaho Power agreed that the Commission's suspension decision could be made no later
than April 1, 20 13.
THE SETTLEMENT WORKSHOP AND PROPOSED STIPULATION
The settlement workshop was held on February 6, 2013, and attended by all the
Parties and several members of the public. The purpose of the settlement workshop was to allow
the participants to discuss Idaho Power's request to suspend the two demand response programs
for 201 3. Based upon the settlement discussions, the Parties agreed to suspend the two programs
and the "incentive" payments for this year (Phase I), and schedule additional workshops to
discuss further changes to the Company's demand response programs in 2014 and beyond (Phase
11). On February 14, 2013, Idaho Power filed the proposed "Settlement Stipulation" on behalf of
all the Parties. The Parties agreed that the proposed settlement represents a compromise of their
respective positions. They assert that the settlement is reasonable and in the public interest and
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ORDER NO. 32747
urged the Commission to adopt the Settlement Stipulation without condition or modification.
The general terms of the proposed settlement are set out below.
A. A/C Cool Program
The Parties agree that it is reasonable to award residential customers who participated
in the A/C Cool Credit program a "continuity" payment of $1 .OO per month for the three months
of the suspended program. The purpose of the continuity payment is to encourage customers to
remain in the A/C Cool program this year and while the Parties conduct additional workshops to
discuss the program for 2014 and beyond. As initially proposed by Idaho Power, no new
customers will be entered into the program. In addition, the Company will not cycle the central
air conditioning units of participating customers during 2013. In other words, there will be no
dispatching events. Finally, the Parties agree that customers who wish to discontinue their
participation in the program may do so but the Company will assess a reconnection charge of
$85 for customers who discontinue and subsequently want to re-enter the program before
January 1, 201 5.2 Stip. at 77 6-8.
B. Irrigation Peak Rewards Program
The Parties agree that irrigation customers who voluntarily remain in the Peak
Rewards program will also receive a "continuity" payment based upon which of the four Peak
Reward options is applicable. Option 1 and 2 participants will receive a continuity payment
equal to $4.54/kW/season or $2.27/kW/month of 2013 participant billing demand. Option 3
participants will receive a continuity payment equal to $4.45/kW/season based upon the lesser of
the nominated demand for 2012 program season and the 2013 participant billing demand, or
$2.27/kW/month of the lesser nominated demand for the 2012 program season and the 2013
participant billing demand. Finally, participants in the Timer Interruption Option under the one-
day, two-day, or three-day component will receive continuity payments of $l.O7/kW/season,
$1.88/kWlseason, or $2.65/kW/season of 2013 billing demand, respectively.' Stip. at 7 1 1.
To be eligible for a continuity payment, Peak Rewards customers must have a
metered service point enrolled in the program during the 2012 season and the same customer
2 The exception to the re-entry charge would be where a customer moves from one residence to another. Stipulation
at 7 8.
3 On a monthly basis, the Timer Options for one-day, two-day, and three-day would receive a continuity payment of
$0.54/kW/month, $0.94/kWlmonth, or $1.33/kW/month of 2013 billing demand, respectively.
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must have the same meter service point active between June 15 and August 15, 2013. Id. Peak
Rewards customers that remove their load control devices or switches may be restricted from re-
entering the program in the future. Id. at 7 12. Like the AIC Cool program, irrigators
participating in the Peak Rewards program will not have their service interrupted during 2013.
During the suspension period, no new irrigation customers will be accepted into the Peak
Rewards program.
C. Post-201 3 Programs (Phase 11)
The Parties agree that changes to AIC Cool, Peak Rewards and possibly the Flex
peak4 programs for 2014 and beyond should be evaluated in Phase I1 of this case. Consequently,
the Parties request that the Commission schedule a prehearing conference to set workshops and a
procedural schedule so that the Parties and other interested persons may evaluate changes to the
demand response programs in advance of the June 2014 season. Stip. at t/ 14. The Parties also
agree that continuity payments made in 2013 should not be viewed as a precedent for future
continuity payments. Id. at 77 9, 1 1.
The Parties stand ready to support the Settlement Stipulation. If the Stipulation is
challenged by any person not a party to the Stipulation, the Parties reserve the right to file
testimony, cross-examine witnesses, and put on such case as they deem appropriate. Id. at t/ 16.
Finally, the Parties request that the Commission issue its Order accepting and approving the
Settlement Stipulation no later than April 1,2013. Id. at 4.
REQUEST FOR COMMENTS
YOU ARE HEREBY NOTIFIED that the Commission invites the Parties and other
interested customers to provide written comments in support or opposition to the proposed
Settlement Stipulation no later than March 11, 2013. Written comments concerning the
Settlement Stipulation should be mailed to the Commission at:
The Flex Peak program allows Idaho Power's contractor (EnerNoc) to reduce the load of participating industrial
and large commercial customers for short periods of the summer peak days. See Order No. 30805.
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ORDER NO. 32747
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83 720-0074
Street Address for Express Mail:
472 W. Washington Street
Boise, ID 83702-591 8
All comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission's home page located at mw.~uc.idaho.r,~ov. Click the "Comments and Questions"
icon and complete the comment form using the case number as it appears on the front of this
document.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the initial Application, supporting testimony
and the proposed Settlement Stipulation (with revised schedules) are available for public
inspection during regular business hours at the Commission offices. The documents are also
available on the Commission's web site at www.~uc.idaho.nov by clicking on "File Room" and
then "Electric Cases.'"
YOU ARE FURTHER NOTIFIED that Rule 276 provides that the Commission is not
bound by the Parties' Settlement Stipulation. IDAPA 3 1.0 1.0 1.276. The Commission will
"independently review any settlement proposed to it to determine whether the settlement is just,
fair and reasonable, in the public interest or otherwise in accordance with law or regulatory
policy." Id. The Commission may accept, reject, or modify settlement provisions. Moreover,
proponents of settlements carry the burden of showing that the settlement is reasonable and in
the public interest. Rule 275. When a settlement calls for Commission action, the Commission
will prescribe an appropriate procedure to examine a proposed settlement. Rule 274.
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ORDER NO. 32747
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code and the
Commission's Rules of Procedure, IDAPA 3 1.0 1.0 1.000 et seq.
O R D E R
IT IS HEREBY ORDERED that parties and persons wishing to comment in support
or opposition to the proposed Settlement Stipulation must file written comments with the
Commission no later than March 1 l,20 13.
IT IS FURTHER ORDERED that the parties in this case shall serve their comments
on the other parties via electronic mail.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this / 7 2%
day of February 20 13.
Out of t h e O f f i c e on t h i s D a t e
MARSHA H. SMITH, COMMISSIONER
ATTEST:
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ORDER NO. 32747