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A T TOR N E Y SAT LAW 2ßn ¡òi" - '-l n Il. ...
Tel: [phone] Fax: [phone]
P.O. Box 7118 Boise, ID 83707 - sis N. 27th St. Boise, ID 83702
March 4,2011
Ms. Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
RE: IPC-E-IO-27
Dear Ms. Jewell:
We are enclosing for fiing in the above-referenced docket an original and nine (l0)
copies, as well as an electronic copy on a disc, of the INDUSTRIAL CUSTOMERS OF
IDAHO POWER'S DIRECT TESTIMONY OF DR. DON READING.
An additional copy is enclosed for you to stap for our records.~~
~rYM.Adams
Richardson & O'Lear PLLC
encL.
Peter J. Richardson (lSB # 3195)
Gregory M. Adams (lSB # 7454)
Richardson & O'Lear, PLLC
515 N. 27th Street
P.O. Box 7218
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter(irichardsonandoleary.com
greg(irichardsonandoleary.com
Attorneys for the Industrial Customers of Idaho Power
BEFORE THE IDAHO
PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S REQUEST TO MODIFY
RECOVERY OF INCENTIVES PAID TO
SECURE DEMAND-SIDE RESOURCES
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lOll HAR-4
PH 4: 48
CASE NO. IPC-E-10-27
INDUSTRIAL CUSTOMERS OF IDAHO POWER
DIRECT TESTIMONY OF DR. DON READING
March 4, 2011
1
2
Q.Would you please state your name, address, and occupation?
A.My name is Don Reading. I am a regulatory and utilties economist employed
3 with Ben Johnson Associates, in Boise, Idaho. The Industrial Customers of Idaho Power (lCIP)
4 have retained my consulting service for Idaho Power's request to modify recovery incentives
5 paid to secure demand-side resources.
6 Q.Have you prepared an exhibit that describes your qualifications in regulatory
7 and utilty economics?
8
9
10
A.Yes. I am sponsoring Exhibit 201, which contains my curiculum vitae.
Q.Have other exhibits been prepared in support of this testimony?
A.Yes. I am also sponsoring Exhbits 202 through 210, which are documents
11 produced by Idaho Power in discovery and in the integrated resource planing (lRP) process. I
12 will explain the relevance of each in my testimony below.
13
14 A.
Q.What is your purpose in this hearing?
My testimony wil set forth the position of the ICIP with regard to the Company's
15 application in this docket, and with regard to the settlement stipulation signed by the other parties
16 to this docket. I wil first provide by way of background an overview of the Company's
17 Application and the settlement stipulation, and then I will provide the ICIP's position in
18 opposition to the Application and the settlement stipulation.
19 BACKGROUND
20 1.The Company's Application
21 Q.Could you please describe the Company's request to modify recovery of
22 incentives paid to secure demand side resources?
23 A.Idaho Power's Application, filed October 22,2010, requests the Commission
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Industrial Customers of Idaho Power
1 accept the Company's new demand-side resource business modeL.
2 The Company requests the Commission: (l) move the Company's three demand response
3 program incentive payments into the Power Cost Adjustment (PCA) on a prospective basis
4 beginning June 1, 2011; (2) establish a regulatory asset for its Custom Effciency program
5 incentive costs beginnng Januar 1,2011; and (3) change the caring charge on the Energy
6 Effciency Rider (EE Rider) from the customer deposit rate (curently 1.00%) to the Company's
7 authorized overall rate ofretum (curently 8.18%).
8 Q.Could you explain in more detail the request to recover demand response
9 incentives through the PCA?
10 A.Idaho Power has three demand response programs: (1) the A/C Cool Credit
11 Program, which is aimed at providing sumer peak reduction by cycling participating residential
12 customers' air-conditioning units, (2) the Agricultural Irrigation Peak Rewards Program, which
13 switches off paricipating customers' irrigation pumps during times when the Company needs
14 additional system peak resources, and (3) the FlexPeak Management Program, which is aimed at
15 reducing commercial and industrial load durng times of system peak.
16 The incentive payments for these three demand response programs are forecasted to be
17 $14.96 millon for the 201112012 PCA year, and $16.05 milion for the 2012/2013 PCA year. I
18 am sponsoring Exhibit 202, which is the Company's attachments to its Response to the ICIP's
19 Production Request No. 28(d), and provides these estimates. The Irrigation Peak Rewards
20 Program accounts for about three-quarers of the demand response program costs. It is important
21 to note the Company is proposing to leave the program costs of these three demand response
22 programs to be collected through the EE Rider, and shift the incentive payments to the PCA.
23 The incentive payments are the majority of total program costs.
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Industrial Customers of Idaho Power
1 Q.How wil the Company account for these demand response incentive
2 payments in the future?
3 A.After this one year transfer of these demand response program expenses, the
4 Company requests that it be allowed in futue fiings to place the normal or base level of
5 expenses related to demand response incentives into base rates. Going forward, as par of the
6 PCA case, the forecasted level of Idaho incentive payment expenses will be compared to the
7 normal level included in base rates to determine the level of demand response cost recovery to be
8 included in the PCA forecast. As proposed by the Company, any deviations between actual
9 demand response incentive costs and forecasted costs will be included in the following year's
10 PCA true-up.
11 Q.Could you please summarie Idaho Power's proposal to capitalize the
12 Custom Efficiency Program?
13 A.The Company is proposing to capitalize direct incentive payments associated with
14 the Custom Efficiency program to enable the Company to ear a retur on a portion of its
15 demand side resource activities. The Company proposes to star booking incentive payments to a
16 regulatory asset account beginning Januar 1,2011. The balance in the account would be
17 included in the Company's revenue requirement at the time of a futue rate case and would be
18 amortized over four years with a caring charge equal to the curently authorized rate of retur.
19 Q.Could you please summarize Idaho Power's proposal to change the Energy
20 Efficiency Rider Carrying Charge?
21 A.Idaho Power is curently authorized to collect fuds for its demand side programs
22 though the EE Rider, which is set at 4.75% of base rates. If the Company spends more money
23 than it has collected though rates, it rus a negative balance in its EE Rider Account. Idaho
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Industrial Customers of Idaho Power
1 Power is allowed to charge the interest rate for customer deposits on the negative balance, which
2 is curently a 1.00% interest charge.
3 Due to the large size of the negative balance of the EE Rider Account, Idaho Power
4 proposes in this filing to increase the caring charge from the a rate equal to the interest rate on
5 customer deposits (1.00%) to the Commission's authorized rate of retu, which is curently set
6 at 8.18%. The Company states in its Application that changing the curent caring charge is
7 paricularly important should the Commission decide against par or all of its other proposals.
8 2.The Settlement Stipulation
9 Q.Did some of the parties enter into a settlement in this case?
10 A.Yes. Idaho Power, Commission Staff, Idaho Conservation League, Nortwest
11 Energy Coalition, Snake River Allance, and the Community Action Parership Association of
12 Idaho entered into a settlement stipulation. The ICIP did not enter into the settlement stipulation.
13 Q.Could you explain the general terms of the settlement?
14 A.Under the. proposed settlement, first, the settlement paries agreed to shift
15 recovery for the incentive programs for the three demand response programs (A/C Cool Credits,
16 Irrgation Load Control, and FlexPeak) from the EE Rider to the PCA. To keep customer classes
17 revenue neutral until the next general rate case, the settlement calls for an interim per kilowatt-
18 hour (kWh) taiff rate that recovers 100 % ofDSM costs shifted to the PCA for each customer
19 class in order to recover the same amount from each class as would have been recovered though
20 a percentage charge against base rates. However, the settlement contains no agreement as to
21 how demand response incentive amounts will be allocated to each customer class in an Idaho
22 Power general rate case once the Company places the incentive costs in base rates.
23 Second, the settlement allows the Company to capitaize the incentive payments of the
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Industrial Customers of Idaho Power
1 Custom Efficiency program as a regulatory asset beginning Januar 1,2011. The settlement
2 allows the Company to implement a carng charge equa to the curent Commission authorized
3 rate of retur of 8.18 % until the Commission includes the regulatory asset in rates as part of the
4 next general rate case. Once in rates, the asset would ear the curent Commission approved
5 authorized rate of retur, and the settlement calls for the asset to be amortized over a seven-year
6 period.
7 Third, the settlng paries agreed that the EE Rider carying charge will remain at the
8 customer deposit rate (1.00%).
9 ICIP'S GENERA POSITION
10 Q.Please summarize the ICIP's position in this case?
11 A.The ICIP is opposed to Idaho Power's Application and recommends the
12 Commission reject the Company's proposal in tota. The ICIP is opposed to the settlement
13 because the ICIP does not believe the settlement goes far enough in addressing the ICIP's
14 concerns with the Company's Application. The ICIP does not believe that a compelling case has
15 been made to warrant implementing the proposed changes, which would have the same effect as
16 increasing the EE Rider from 4.75% to 6.6%. Additionally, the ICIP is concerned with the
17 dramatic policy shift to incentivize demand side activities implemented in the settlement, and is
18 concerned about the precedent that would be set by the settlement without addressing all of the
19 relevant issues.
20 Q.Does the Application or the settlement stipulation call for an increase in the
21 EE Rider from the current 4.75% ?
22 A.An underlying intent ofIdaho Power's filing appears to be to find a method of
23 increasing the EE Rider without asking for an increase in the percentage rate on the EE Rider.
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Industrial Customers of Idaho Power
1 The Company stated:
2 The Rider percentage would have to increase from the curent 4.75 percent to
3 approximately 6.6 percent in Januar 2011 for the balance to be zero by the end of
4 2012. To tae the Rider balance to zero in one year, by the end of2011, the Rider
5 percent would have to increase from the curent 4.75 percent to approximately 7.5
6 percent.
7 Direct Testimony of Darlene Nemich, at p. 16.
8 The Company then goes on to indicate that the proposal in the Application would reduce
9 the EE Rider negative balance to zero in two years. The requested modifications would hence
10 result an effective increase in the EE Rider to 6.6%.
11 Q.Could you explain how the settlement results in an effective increase in the
12 EE Rider?
13 A.The end effect of accepting the proposal to recover incentive payments for certin
14 programs through other rate recovery mechanisms, without a corresponding decrease in the EE
15 Rider percentage, is to effectively increase the amount charged to ratepayers while maintaining
16 the appearance of keeping the EE Rider at its curent 4.75%. The proposal simply masks
17 increased conservation expenditues, and thereby would authorize substantial additional rate
18 recovery for demand side programs from that currently authorized for Idaho Power.
19 Q.What is the justifcation for this increase in demand side expense recovery?
20 A.The justification appears to be that the Company has ru up a substantial negative
21 balance in its EE Rider account, and wants to recover those expenditures. The proposal in the
22 Company's Application and the settlement stipulation would theoretically eliminate the curent
23 negative balance within two years.
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Industrial Customers of Idaho Power
1 Q.Do you believe that is an adequate reason to increase demand side expense
2 recovery at this time?
3 A.No. There is no compilng reason the negative balance needs to be removed
4 within a two-year period. The management and accounting of Idaho Power's conservation
5 programs are under the Company's exclusive control the unauthorized accumulation of a large
6 negative balance is no reason to allow the Company to move some of these conservation costs
7 and receive a retur on them. To allow the Company to simply increase its rate recovery
8 whenever it spends more than it has been authorized to collect would give the Company no
9 incentive to prudently manage its demand side programs.
10 Q.Do any other Idaho electric utilties recover an amount equivalent to 6.6% of
11 base rates for their demand side programs?
12 A.No. Last year, Rocky Mountain Power asked the Commission to increase its
13 customer efficiency services rate (Schedule No. 191) from 3.72% to 5.85%. The Commission
14 allowed less than half the proposed increase and stated, in Order No. 32023, at page 5:
15 The Commission finds it reasonable to authorize an increase in the Company's
16 DSM Tariff rider from 3.72% to 4.72% for all customer classes (except special
17 contracts) effective July 1,2010. The unecovered balance of the requested DSM
18 expenses shall be booked to the DSM deferral account pending the Commission's
19 examination of DSM issues in the rate case.
20 Less than year later, in the general rate case (PAC-E-10-07), the Commission effectively reduced
21 Rocky Mountain Power's EE Rider to 3.4% of base rates by treating the program costs of the
22 Irrigation Load Control Program as a system cost and by moving recovery of the program costs
23 from the rider to base rates in Order No. 32196, at page 26. In other words, in the Rocky
Dr. Reading, DI 7
Industrial Customers of Idaho Power
1 Mountan Power case, the Commission moved the irrgation demand response program out of the
2 EE Rider and into base rates, and issued a corresponding reduction in the EE Rider percentage.
3 I understad that, for Avista, the Commission has only authorized an EE Rider of3.98%
4 of base rates in Case No. AVU-E-09-06 through Avista's Schedule 91.
5 The Commission has thus shown a reluctance to increase the EE Rider for Idaho utilities
6 above the 5% leveL. By accepting Idaho Power's proposal in this case it will maintan the
7 appearance of putting a ceiling the EE Rider amount; however, ratepayers will be in reality be
8 paying for conservation programs well above the curent 4.75% level, and above any percentage
9 previously authorized by the Commission.
10 Q.What is the history of Idaho Power's EE Rider?
11 A.Funding of Demand Side Management (DSM) programs with the Energy
12 Effciency Tariff Rider was initiated by Order No. 29026 and made effective on May 16,2002.
13 The Rider surcharge was initially set at 0.5% of each customer class's base revenues. The
14 Commission authorized increases to 1.5% of base rates in May 2005, and to 2.5% of base rates in
15 May 2008, in Order Nos. 29784 and 30560, respectively. In May 2009, the Commission
16 approved a fuer increase in the EE Rider to 4.75% of base rates in Order No. 30814.
17 Q.What is the most recent Commission comment on the EE Rider level?
18 A.When the Company requested approval of a substantial increase in fuding to the
19 Nortwest Energy Effciency Allance (NEEA) last year, in Order No. 31080 the Commission
20 stated:
21 The Commission has encouraged Idaho Power to increase its fuding of DSM and
22 energy efficiency programs in the past several years, and recently approved an
23 increase in the Energy Efficiency Rider to 4.75% of sales revenues to support
Dr. Reading, DI 8
Industrial Customers of Idaho Power
1 those programs. The Rider fuds are provided by customers and are not unlimited.
2 The Commission expects Rider fuds to be used judiciously to ensure customers
3 receive tagible benefits from their payments to support energy efficiency
4 programs. We recognze that some ofNEEA's programs result in actual benefits
5 to customers, especially over time, but that the actual benefit may be difficult to
6 quantify in the short-term. Nonetheless, when Idaho Power in the future requests a
7 Commission determination that its use of Rider funds was prudent, it must
8 demonstrate a suffcient benefit to customers resulted from the Company's
9 participation in NEEA. The Commission's approval of the Company's continued
10 paricipation in NEEA, and the use of Rider fuds to pay for that paricipation, is
11 not a determination of prudency.
12 Q.How much money does Idaho Power collect through the EE Rider annually
13 at the 4.75% level?
14 A.According to the Company's Response to Commission Staffs Production
15 Request No.3 in this case, the Company will collect $36,376,070 in 2011 and $37,103,591 in
16 2012 through the EE Rider. Unlike Table 2 in Exhbit NO.1 of Darlene Nemnich's testimony,
17 these projections incorporate the load growth forecast contained in the Company's 2009
18 Integrated Resource Plan.
19 Q.How much would the Company collect from ratepayers under the proposal
20 in this case?
21 A.The Company would not reduce the EE Rider percentage, and therefore it would
22 stil collect approximately $36 milion though it in 2011. In addition, I am sponsoring Exhibit
23 No. 203, which is the Company's Response to the ICIP's Production Request Nos. 15 and 22,
Dr. Reading, DI 9
Industrial Customers of Idaho Power
1 wherein, the Company stated that the projected demand response expense that will be recovered
2 through the PCA is $14.9 milion in 2011. Thus, by the Company's figues, it would collect at
3 least $50.9 milion for demand side resources in 2011.
4 Q.Besides increasing recovery to over $50 milion in 2011 and 2012, are there
5 other ways for the Company address the problems it appears to have with running up a
6 negative balance in EE Rider account?
7 A.I believe that the Company could scale back some of the programs that are not
8 cost-effective and/or do not provide a direct benefit to Idaho customers. The easiest and best
9 way to determine which programs are not cost-effective is to conduct third-par evaluations of
10 the programs. In its Application in Case No. IPC-E-10-09, at paragraph 11(c), the Company
11 stated that it only uses third-pary evaluators when appropriate for the specific studies or
12 evaluations. Some paries to that case, including the ICIP, suggested that Idaho Power should
13 conduct more frequent third-pary evaluations to better manage the demand side portfolio. In
14 that case, in Order No. 32113, on page 9, the Commission stated, "Idaho Power should seek to
15 employ independent evaluators for all of its DSM programs and tae affrmative steps toward
16 achieving measurable improvements in its documentation, verification and record-keeping
17 processes for these programs." The ICIP agrees, and believes that doing so will help the
18 Company identify unsuccessful programs and keep overall expenditues within a reasonable
19 level, thereby reducing the negative balance in the EE Rider account.
20 Q.Are there any specific programs that you think the Commission should
21 require the Company to scale back?
22 A.Yes. The ICIP has identified a few such programs in recent demand side resource
23 dockets.
Dr. Reading, D I 10
Industrial Customers of Idaho Power
1 For example, the ICIP is concerned that the increased fuding directed to NEEA does not
2 provide a direct benefit to Idaho customers. Those fuds are pooled outside of the state and the
3 benefits to Idaho customers of many of the programs are difficult to identify. Idaho Power
4 requested increased fuding for its paricipation in NEEA last year in Case No. IPC-E-10-04.
5 According to Staffs Comments in that case, on page 3, the Company's contribution to NEEA in
6 2009 was $1.9 milion, but with the increased fuding for the 2010-2014 time period, the
7 Company's fuding beginning in 2010 was to be $3.3 milion per year. Although the
8 Commission approved Idaho Power's continued paricipation in NEEA last year, Idaho Power's
9 fuding obligation includes an early termination clause in the event of Commission order
10 disapproving of the continued, increased fuding for NEEA. In light of the Commission's
11 statements in the NEEA order quoted above and the impact on Idaho customers of the effective
12 6.6% EE Rider amount requested in this case, the Commission may want to reconsider whether
13 continued increased fuding of NEE A is waranted at this time.
14 Q.Are there any other examples of programs that may need to be scaled back,
15 at least temporarily?
16 A.In the ICIP's Comments in Case No. IPC-E-1O-09, the ICIP highlighted a few
17 programs with cost-effectiveness problems. One program that appears to be achieving less than
18 a cost-effective result is the A/C Cool Credits program. That is a peak reduction program on
19 which ratepayers spent almost $3 milion in 2008 and over $3.4 milion in 2009. As explained in
20 detail in those Comments, the Company has only calculated the cost-effectiveness ofthis
21 program based on a 20-year model that uses financial and DSM alternative cost assumptions
22 from the 2006 Integrated Resource Plan. Even when calculated over 20 years into the future, this
23 program achieves only a total resource cost benefit (TRC) ratio of 1.09. The A/C Cool Credits
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Industrial Customers of Idaho Power
1 program's initial expectations, set fort in Order No. 29702, at page 3, was for a positive benefit-
2 cost ratio of 1.42 over a 30-year period. The program appears to be achieving far less peak
3 reduction savings per dollar spent than the other demand response programs.
4 Its past performance has been less than stellar. I am sponsoring Exhibit No. 204, which
5 contains the Company's attachment to its Response to the ICIP's Production Request No. 7(a).
6 The table provided in Exhibit 204 demonstrates this program has achieved well below a 1.0 TRC
7 value for each year for which the Company has actual figues, including TRC values of 0.09 in
8 2004,0.24 in 2005,0.34 in 2006,0.33 in 2007,0.56 in 2008,0.73 in 2009. I am also sponsoring
9 Exhibit No. 205, which is the Company's Response to the ICIP's Production Request No. 17,
10 wherein it stated that the program is not now expected to achieve a cumulative TRC value of
11 over 1.0 until 2017, or year 15 of the program. The Company indicates that the delay in
12 achieving cost-effectiveness is attibutable to a delay in obtaining the Company's tageted level
13 of paricipants.
14 Additionally, a thrd-pary evaluation of the program by Paragon Consulting identified a
15 serious free rider problem. The report concluded that 52% of the paricipating customers were
16 free riders. In other words, the program did not reduce peak whatsoever for over half of its
17 paricipants. The Paragon report also concluded that the average demand reduction per
18 curlment in 2009 was well below the expected demand reduction found in other utility studies.
19 The Company's 2009 DSM Report, at page 22, discussed plans to expand the program to reach
20 40,000 total paricipants, but perhaps the goal should be to reduce paricipation to include only
21 those customers whose paricipation would reduce their peak energy use. Exhibit 205 shows the
22 Company plans to spend approximately $2.5 milion on the program in 2011, and $2 milion
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Industral Customers of Idao Power
1 anually in years aferwards. It appears that this program could achieve similar benefits to those
2 it curently achieves with less expenditure.
3 This is just one of the Company's many programs, and perhaps more third-part
4 evaluations would allow the Company to better identify how it could achieve more with the $36
5 milion per year it is curently authorized to collect.
6 Q.Has the Commission approved all spending that resulted in the negative
7 balance in the EE Rider Account as prudently spent?
8 A.It does not appear that the Commission has ever directly approved the prudency
9 of the Company's expenditure on demand side programs in excess of the amount that it is
10 authorized to recover through the EE Rider. In the most recent prudency case, Case No. IPC-E-
11 10-09, regarding prudency of the Company's 2008-2009 EE Rider expenditues, Commission
12 Staff noted, on page 4 of its Comments, that Idaho Power had accrued a negative balance of
13 $3.94 milion in 2008, and an additional $9.72 milion in 2009. Those were amounts spent over
14 and above the $50.7 milion amount collected through the EE Rider in 2008 and 2009, and
15 approved as prudently incured expenditure by the Commission's Order No. 32113, at page 9.
16 Thus, the Commission has not even approved the prudency of the amounts constituting the
17 negative balance in the EE Rider account in 2008 and 2009. The ICIP submits that authorizing
18 additional recovery mechanisms through the PCA or rate base to account for this over-spending,
19 and to even incentivize the Company's demand side activities, may be putting the car before the
20 horse.
21 Q.What is the purpose of incentivizing an electric utility to pursue demand side
22 resource programs?
23 A.In the direct testimony of John R. Gale, on page 7, filed in this docket he states, "I
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Industrial Customers of Idaho Power
1 firmly believe that demand-side resources should be treated the same as supply-side resources,
2 which is a recurng theme throughout my testimony." The theory is that the three demand
3 response programs are analogous to variable energy resources accounted for through the PCA
4 because they address peak, and that earing a return on the Custom Effciency program is
5 justified because the incentive payments for that program result in "utility plant-like"
6 infrastrcture investments at customers' facilties. The Company seems to assert that it is
7 attempting to put demand side resources on "equal footing" with supply side resources to provide
8 it with an incentive to more effectively ru its programs, and apparently help it overcome its
9 obvious disincentive to unsell electricity and avoid building futue, costly plants which it can rate
1 0 base at a substatial profit.
11 Q.Do you believe that this theory holds true?
12 A.No. The proposals advocated by the Company in this docket do not accomplish
13 the goal of putting demand side resources on equal footing with supply side resources. In
14 essence, the Company is saying the "business rationale" of making a profit by putting a demand
15 side resource in rate base will put a demand side resource on "equal footing" with a rate-based
16 plant because the Company is also allowed to make a profit on the demand side resource. As
17 discussed later in these Comments, there are significant differences, such as the much shorter,
18 four-year amortization period (or seven-year period in the stipulation) proposed for the Custom
19 Efficiency regulatory asset, that treat supply-side and demand-side resources differently.
20 Additionally, the Company's profit motives for the rate-based plant dwarf those of the rate-based
21 demand side resource. In fact, even the Company stated, in its Response to the ICIP's Production
22 Request No.8, which I am sponsoring as Exhibit No. 206:
23 The Company does not believe that the requested relief would put demand-side
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Industrial Customers of Idaho Power
1 resources on an equal footing with a supply-side resource; however, it does
2 believe it would provide a similar business rationale for pursuing either demand-
3 side resources or supply-side resources.
4 Creating a profit incentive for a demand-side resource does not put that demand side resource on
5 equal footing with a rate-based supply side resource. The ICIP discussed this very well-
6 established economic principle in its discussion of the Averich-Johnson effect in Comments in
7 Case No. IPC-E-09-09, and I would refer the Commission to that discussion. In short, the
8 Company has every incentive, and even a fiduciary obligation to its shareholders, to increase its
9 profits, and the best way to do that is to build plants and put them in rate base. Effective demand
10 side programs will prevent the need for new plants, and make it difficult to justify additional
11 plants in the Company's public planing processes and proceedings before the Commission.
12 Q.Has the Company adequately incorporated demand side program
13 achievements into its integrated resource planning processes?
14 A.The Company appears to use reduced projections for demand side program
15 achievement in its IRP process when looking at the need for futue plants. The benefit of the
16 substatial amount of demand side resource expenditues should be avoided supply side costs
17 that would otherwse be necessar for generation and transmission resources sufficient to meet
18 larger load requirements by customers. Peak demand savings, in particular, should reduce the
19 Company's need to build new peakng facilities such as gas-fired combustion generating plants
20 and transmission lines. Thus, in theory, rates will be lower, and resources wil be conserved,
21 because the utilty wil not build and rate base new generating plant.
22 The Company uses its IRP to determine which cost effective resources it should acquire
23 to meet load. However, the Company is placing limits on the level of demand side resources it
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Industrial Customers of Idaho Power
1 plans to include in the 2011 IRP. In the Company's presentation, titled "Demand Side
2 Management Demand Response," presented at the IRP Advisory Council Meeting on November
3 18, 2010, the Company used an "operational" limit for demand response programs of 330 MW
4 for 2011, and only 351 MW through 2020. I am sponsoring Exhibit No. 207, which is slide 22
5 of ths presentation. The projections in Exhibit 207 are at odds with the Company's Response to
6 the ICIP's Production Request No. 22(c), in Exhibit 203 at page 5, in this case, wherein it
7 justified the expenditure on its demand response programs - the incentive payments of which it
8 proposes to collect through the PCA -- by stating it expects to achieve 376 MW of peak
9 reduction with the three demand response programs in 2011. That is obviously higher than the
10 330 MW demand response operational limit curently being used in the IRP for 2011, and is
11 even higher than the operational limit of 351 MW set for nine years from now in 2020. I would
12 note also that the IRP document provides even lower demand response "targets" than the IRP
13 operational limits.
14 Q.How do you reconcile that inconsistency?
15 A.I am sponsoring Exhbit 208, which is the Company's Response to the ICIP's
16 Production Request No. 27. In that response, the Company attempted to reconcile the
17 inconsistency between its lower projection for peak savingsjn the IRP process from the higher
18 peak savings projection in this case where it states that it treats demand side resources the same
19 as supply side resources. Idaho Power's response was:
20 Case No. IPC-E-10-27 was filed on October 22,2010, reflecting the demand
21 response megawatt ("MW") reductions contained on the 2011 budgets prior to the
22 completion of the demand response analysis for the 2011 Integrated Resource
23 Plan. The MW reduction from demand response and the associated investments in
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Industrial Customers of Idaho Power
1 this docket are forecasts. Ultimately, actual expenses will be included in
2 determining the Power Cost Adjustment ("PCA") anually. In addition, the
3 Company relies on the integrated resource planng process regarding load and
4 peak growth projections.
5 Obviously, this response does not resolve the conflct. If demand side programs are to be truly
6 put on "equal footing" with supply side resources, the projected benefits ofthe programs used to
7 justify increased payment for the demand side programs through customer rates should be
8 consistent with the projected demand reductions included in the IRP process from which the
9 Company determines the need for supply side resources. That the Company is not curently
1 0 using the same accounting of the benefits of these programs in the IRP process as it uses in this
11 case serves to demonstrate that the Company is acting on its inherent incentive to build new plant
12 rather than allow its demand response programs to reduce the need for new plant. It is difficult
13 for a ratepayer group to overlook this discrepancy, and the Commission should be concerned.
14 SPECIFIC COMMENTS ON THE THREE PROPOSALS
15 1.Recovering Demand Response Incentives in the PCA
16 Q.Do you have any comments specific to the Company's request to recover
17 demand response incentive payments through the PCA?
18 A.As proposed by Idaho Power, shifting the incentive payments for a one-year
19 period for the three demand response programs from the EE Rider to the PCA wil shift $1.6
20 milion in program costs from some customer classes onto other customer classes. Schedules 9
21 and 19 along with special contract customers would pay an additional $1.6 milion for the
22 201111012 PCA year while the other classes will pay less than if the program costs continued to
23 be recovered through the EE Rider. The residential class alone would pay $1.45 milion less.
Dr. Reading, D I 17
Industral Customers of Idaho Power
1 Exhbit No. 202 provides the detailed calculations of this disproportionate effect.
2 The reason for this reallocation is that the EE Rider is calculated as a percentage of
3 overall base rates (i.e. demand as well as energy charges), while the PCA is based on an all
4 energy, or kilowatt-hour (kWh) basis. For high load factor customers whose energy use does not
5 var substatially from peak to non-peak times, allocation on an energy or kWh basis results in a
6 disproportionate rate impact. These demand response programs are directed at reducing peak
7 demand, and thus should be allocated on demand and not charged 100% to energy on a kWh
8 basis.
9 In order to mitigate this shift among customer classes, the settlement stipulation
10 addresses this in paragraph 6, by evening out the rate allocation impact in 2011 alone. If the
11 Commission allows any demand response program incentive costs to be shifted to the PCA, the
12 ICIP urges the Commission to institute this rate allocation mitigation called for in the stipulation.
13 Q.Does the rate case moratorium currently in effect touch on this issue of
14 changing the allocation of cost recovery for demand side programs?
15 A.The terms of the stipulation in Case No. IPC-E-09-30 call for a moratorium on
16 rate changes to tae effect prior to Januar 1,2012, with a few exceptions. The exceptions allow
17 the Company to increase the EE Rider and to file its PCA, but they do not expressly provide that
18 the Company may change the methodology by which the Company recovers costs through either
19 mechanism. Altering the cost-allocation among customer classes for recovery of demand side
20 expenditures, as proposed in the Company's Application, is different in kind from simply filing
21 for an increase in recovery under the existing mechanisms. Thus, the Company's proposal does
22 not appear to be allowed under the stipulation in Case No. IPC-E-09-30. That is another reason
23 for the Commission to implement the mitigation of the cost-allocation if it allows demand
Dr. Reading, D I 18
Industrial Customers of Idaho Power
1 response costs to be recovered through the PCA.
2 Q.Wil there be any other impacts of the shift of recovery of these demand
3 response costs to the PCA?
4 A.Yes. Following the 201112012 PCA year, the expected amount of the incentive
5 payments for the three demand response programs wil be included in the base rates, and only the
6 difference in actual expenditures will be accounted for through the PCA. There has been no
7 consensus as to how the Company will allocate these demand response incentive payments in the
8 cost of service study in Idaho Power's next general rate case. The maner in which these
9 incentive payments are treated in a cost of service study can have a significant rate impact on
10 rates for a given class of customers. Before the ICIP could endorse this shift of costs, a
11 determination on whether these costs would be assigned, for example, system-wide or assigned
12 to the customer class receiving the incentives would need to answered. This question is a major
13 policy question that the settlement stipulation expressly declines to address. The Commission
14 should reject the stipulation for this failure alone. Without knowing the long-term effect on each
15 customer class of the proposed shift to the PCA, the Commission canot understad how this
16 proposal wil impact customers.
17 Q.How would the ICIP propose that the costs be allocated in a general rate
18 case's cost of service study?
19 A.If accounted for through base rates, the ICIP would recommend the demand
20 response costs should be allocated on a system-wide basis just as the Company accounts for
21 other supply side resources. The ICIP's recommendation to treat these demand response
22 resources as system-wide resources is consistent with the Commission's recent order in the
23 Rocky Mountain Power general rate case allocating that utility's irrgation demand response
Dr. Reading, DI 19
Industrial Customers of Idaho Power
1 program as a system-wide resource, in Order No. 32196, at p. 26. In addition, because these are
2 programs aimed at reducing system demand, they should be considered demand-related in the
3 cost of service study. To treat them any differently would not put them on "equal footing" with
4 the Company's demand related supply side resources.
5 2.Capitalizing Custom Efficiency Incentive Payments
6 Q.Do you have any comments specific to the Company's proposal to capitalize
7 the Custom Efficiency Incentive Payments?
8 A.Yes. The ICIP is very supportive of the Custom Effciency program, and I would
9 point out that it has been one of the most cost-effective programs in the Company's demand side
10 resource portfolio. The ICIP would not necessarly be opposed to some forms of capitalizing the
11 incentive payments associated with this program, but we canot support the proposal in the
12 Company's Application or the slightly modified proposal in the settlement stipulation.
13 In support of rate-basing the Custom Efficiency incentive payments, Mr. Gale in his
14 direct testimony, on page 21, stated, "This action wil keep the demand response assets on par
15 with the supply-side assets and can adjust over time as the Commission sets the retu to reflect
16 changing circumstances." However, the Company's proposal and the slightly modified proposal
17 in the settlement stipulation will not place this program on par with supply side assets.
18 Q.Could you explain why the proposed method of rate-basing the Custom
19 Effciency incentive payments wil not place that program on par with supply side assets?
20 A.The vast majority of supply side resources have lives. Utilties' customers are, for
21 example, paying the capital costs of a natural gas fired plant over its expected 35-year life. It is a
22 basic tenet of ratemaking that the life of the rate-based asset should match the depreciation
23 schedule or amortization period used to calculate rates.
Dr. Reading, DI 20
Industrial Customers òf Idaho Power
1 However, the proposal to rate base the Custom Efficiency incentive payments
2 intentionally accelerates the recovery of the capital costs of the equipment purchased. Many of
3 the Custom Efficiency incentive payments go to physical equipment, electric motors for
4 example, that have fairly long service lives. If the Company trly believes these demand side
5 resources should be treated the same as supply side resources, then a four-year amortization
6 period is far too short, and so too is the seven-year amortization period in the stipulation.
7 Q.Is there precedent supportng such a short amortization period?
8 A.I am only aware of one precedent, but it required a longer amortization period.
9 Before the Company fuded its demand side programs through the EE Rider, it was authorized to
10 capitalize its expenditures on demand side resources. In Case No. IPC-E-97-12, the Company
11 proposed a five-year amortization for its rate-based conservation expenditures, which was also
12 supported by Staff. Other paries, including the ICIP, advocated for a recovery period of twenty-
13 four years, to more closely match the actu life of the asset. The Commission authorized an
14 amortization period of twelve years. In addition to reasoning that the expenditures were for
15 items not owned by the Company, the Commission notably stated, on page 4, of Order No.
16 27660, "We also find significant the changes that are sweeping through the electric industr and
17 the unpredictability that has resulted." At that time, the deregulation craze was sweeping through
18 the electric industr, and the potential for stranded assets the utility would never recover through
19 rates was a concern, thus providing additional justification for accelerating recovery of the
20 demand side assets.
21 Regulatory stability and predictabilty are much more certin today in 1998. There is no
22 reason, given today's regulatory certainty, that the amortization period should be any less than
23 in 1998. Should the Commission approve moving Custom Efficiency payments into rate base,
Dr. Reading, DI 21
Industrial Customers of Idaho Power
1 the ICIP recommends a twelve-year amortization period for capitalizing these incentive
2 payments.
3 Q.Does accelerating the recovery of the asset have an impact on ratepayers?
4 A.Yes. Accelerating recovery results in higher rates in the near term. Thus, under
5 the Company's proposal or the proposal in the settlement stipulation, the rate recovery for the
6 incentive payments will require ratepayers to fully fud the program over the next few years
7 rather than spreading them out over a longer period as would be tre of a supply side resource.
8 Q.Do you have any other concerns with the Company's proposal to capitalize
9 the Custom Efficiency program?
10 A.Yes. I have the same cost of service concerns with moving recovery of the
11 Custom Effciency incentive payments from the EE Rider into rate base that I mentioned above
12 for the shift of the three demand response programs into base rates. I am sponsoring the
13 Company's Response to the ICIP's Production Request No. 29 as Exhbit 209, in which the
14 Company stated it has no plans for how the costs should be allocated in a cost of service study.
15 Likewise, the settlement stipulation fails to address this issue. Leaving open the question of how
16 these costs wil be allocated in a general rate case is a failure to fully address the impact of the
17 Company's proposal in this case. The method of allocating these costs could impact the
18 Commission's determination of whether it makes sense to capitalize them at all. The ICIP urges
19 the Commission to reject the proposal for its failure to address the whole issue.
20 3.The Request to Earn the Authorized Rate of Return on the EE Rider Account.
21 Q.Do you have any comments specific to the Company's request to earn its
22 authoried rate of return on the negative balance in the EE Rider Account?
23 A.Yes. According to Exhibit NO.1 of Ms. Nemnch's direct testimony, the 2010 EE
Dr. Reading, DI 22
Industrial Customers of Idaho Power
1 Rider account balance is a negative $17 milion. The Company forecasts it to be negative $22.3
2 milion in 2011, and negative $29.7 milion in 2012. The curently allowed retu on that
3 balance is the interest rate charged on customer deposits of 1.00 %. The Company is proposing
4 to use its authorized rate of return of 8.18 %. I see no reason the carring change should be
5 changed from its curent level of 1.00 %. The size of the balance should not be a surrise to
6 Idaho Power and the Company allowed it to accrue with full knowledge of 1.00% caring
7 charge. The management and accounting of Idaho Power's conservation programs are under the
8 Company's control. The accumulation of a large negative balance is no reason to now allow an
9 eight-fold increase in the caring charge. To allow the Company to ear a retur on the
10 negative balance, without restricting the Company to a maximum amount it may spend, would
11 only incentivize it to overspend on programs regardless of their cost-effectiveness.
12 I therefore urge the Commission to reject the Company's request, and retain the curent
13 1.00 % caring charge for the EE Rider account, regardless of how it resolves the other issues.
14 CONCLUDING COMMENTS
15 Q.Do you have any concluding comments?
16 A.Regarding the cumulative impact of the Company's proposed modifications in
17 this case, Mr. Gale stated, on page 24 of his direct testimony, "The positive results include the
18 DSR business model would be fully implemented, DSR would be treated as a resource in the
19 same maner as the supply-side resources, and there would be the potential to lower the Rider
20 percentage in the future."
21 As shown above, the Company's proposal does not in reality put supply side and demand
22 side resources on an "equal footing." The end result of the Company's Application is aimed at
23 makng a profit from demand side programs while giving customers the appearance of keeping
Dr. Reading, DI 23
Industrial Customers of Idaho Power
1 the EE Rider percentage lower than the amount actually collected for these programs. I
2 recommend the Commission should reject Idaho Power's Application in total, and, ifnot, the
3 Company's requested alterations to the demand side recovery should be modified in the maner
4 described in my testimony.
5 Q.Does this conclude your testimony?
6 A.Yes.
Dr. Reading, DI 24
Industrial Customers of Idaho Power
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 4th day of March, 2011, I caused a tre and
correct copy of the foregoing DIRECT TESTIMONY OF DR. DON READING ON
BEHALF OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER to be served by the
method indicated below, and addressed to the following:
Jean Jewell
Idaho Public Utilties Commission
472 West Washington Street (83702)
Post Offce Box 83720
Boise, Idaho 83720-0074
( ) U.S. Mail, Postage Prepaid
(x) Hand Delivered
( ) Overnight Mail
( ) Facsimile
( ) Electronic Mail
Lisa Nordstrom
Donovan Walker
Idaho Power Company
PO Box 70
Boise, Idaho 83707
(x) U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
( ) Electronic Mail
John R. Gale
Darlene Nemnich
Idaho Power Company
POBox 70
Boise, ID 83707
(x) U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
( ) Electronic Mail
Eric L Olsen
Idaho Irrgation Pumpers Assoc. Inc
Racine, Olsen, Nye, Budge & Bailey
P.O. Box 1391
Pocatello, ID 83704
(x) U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnght Mail
( ) Facsimile
( ) Electronic Mail
Nancy Hirsch
NW Energy Coalition
811_1st Ave Ste 305
Seattle W A 98104
(x) U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
( ) Electronic Mail
CERTIFICATE OF SERVICE - 1
Benjamin J Otto
Idaho Conservation League
710 N 6th Street
Boise, ID 83702
Ken Miler
Snake Rive Alliance
350 N 9th #B61O
Boise, ID 83702
Brad Purdy
Community Action Parnership Association
Of Idaho
2019 N. 17th Street
Boise, ID 83702
Anthony Yanel
29814 Lake Rd
Bay Vilage, OH 44140
CERTIFICATE OF SERVICE - 2
(x) U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnght Mail
( ) Facsimile
( ) Electronic Mail
(x) U.S. Mail, Postage Prepaid
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( ) Facsimile
( ) Electronic Mail
(x) U.S. Mail, Postage Prepaid
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(x) U.S. Mail, Postage Prepaid
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( ) Electronic Mail
~
M.Adams
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-I0-27
INDUSTRIAL CUSTOMERS OF IDAHO POWER
READING,DI
TESTIMONY
EXHIBIT NO. 201
Dr. Don Reading's Curriculum Vitae
Pres e n t p 0 s iti 0 n
Educ atio n
Honors and
awards
Professional
and business
h is to ry
Exp e rie n ce
Don C. Reading
Don C. Reading
Vice President and Consulting Economist
B.S., Economics - Utah State University
M.S., Economics - University of Oregon
Ph.D., Economics - Utah State University
Omicron Delta Epsilon, NSF Fellowship
Ben Johnson Associates, Inc.:
1989 Vice President
1986 ---- Con sulting Econ omist
Idaho Public Utilities Commission:
1981-86 Economist/Director of Policy and Administration
Teaching:
1980-81 Associate Professor, University ofHawaü-Hilo
1970-80 Associate and Assistant Professor, Id aho State University
1968-70 Assistant Professor, Middle Te nnessee S tate University
Dr. Reading provides expert testimony concerning economic and regulatory issues.
He has testified on more than 35 occasions before utity reguatory commissions in
Alaska, California, Colorado, the District of Columbia, Hawaii, Idaho, Nevada,
North Dakota, Texas, Utah, Wyoming, and Washington.
Dr. Reading has more than 30 years experience in the field of economics. He has
participated in the development of indices reflecting economic trends, GNP growth
rates, foreign exchange maikets, the money supply, stock market levels, and
inflation. He has analyzed such pub lic policy issues as the minimum wage, fe deral
spending and taxation, and import/ export balances. Dr. Reading is one of four
economists providing yearly forecasts of statewide personal income to the State of
Idaho fo r purposes 0 f establishing state per sonal incom e tax rates.
In the field of telecommunications, Dr. Reading has provided expert testimony on
the issues of marginal cost, price elasticity, and measured service. Dr. Reading
prepared a state-specific snidy of the price elasticity of demand for bcal telephone
service in Idaho and recently conducted research for, and directed the preparation
of, a report to the Idaho legislature regarding the stanis of telecommunications
competition in that state.
Exhibit No. 201
IPC-E-10-27
Reading, ICIP
Page 1
Don C. Reading
Dr. Readings areas of expertise in the field of electric power include demand
forecasting, long-range planning, price elasticity, marginal and average cost pricing,
production-simulation modeling, and econometric modeling. Among his recent
cases was an electric rate design analysis for the Industrial Customers of Idaho
Power. Dr. Reading is currently a consultant to the Idaho Legislature's Committee
on Electric Restructuring.
Since 1999 Dr. Reading has been affliated with the Climate Impact Group (CIG) at
the University of Washing ron. His wolk with the CIG has involved an analysis of
the impact of Global Warming on the hydo facilties on the Snake River. It also
includes an investigation into water markets in the Northwest and Florida. In
addition he has analyzed the economics of snowmaking ror ski area's impacted by
Global Warming.
Among Dr. Readings recent projects are a FERC hydropower relicensing study (for
the Skokomish Indian Tribe) and an analysis ofN orthern States Power's North
Dakota rate design proposals affecting large industrial customers (for J .R. Simplot
Company). Dr. Reading has also performed analysis for the Idaho Governor's
Offce 0 f the imp a ct on the Northwest Po wer Grid of various plans to increase
salmon runs in the Columbia River Basin.
Dr. Reading has prepated econometric forecasts for the Southeast Idaho Council of
Governments and the Revenue Projection Committee of the Idaho State Legislature.
He has also been a me mber of several Northwest Power Planning Council Statistical
Advisory Committees and was vice chairman of the Governor's Economic Research
Council in Idaho
While at Idaho State University, Dr. Reading performed demographic studies using a
cohort/ survival model and several economic impact studies using input/ output
analysis. He has also provided expert testimony in cases concerning loss of income
resulting from wrongful death, injury, or employment discrimination. He is
currently a adjunct professor of economics at Boise State University (Idaho
economic history, urban/regional economics and labor economic.)
Dr. Readi g has re cently com pleted a pub lic inter est wa ter righ ts transfer case. He is
currently a member of the Boise City Public Works Commission.
Exhibit No. 201
IPC-E-I0-27
Reading, ICIP
Page 2
Don C. Reading
Pub Ii ca lion s "Energizing Idaho", Idaho Issues Online, Boise State University, Fall 2006.
ww.boisestate.edu/ history /issuesonline/ fall2006 _issues/ind ex.html
The Economic Impact of 1Ìe 2001 Sahnon Season In Idaho, Idaho Fish and
Wildlife Foundation, April 2003.
The Economic Impact of a Restored Salmon Fishery in Idaho, Idaho Fish and
Wildlife Foundation, ApriL 1999.
The Economic Impact ofSteelhead Fishing and the Return of Salmon Fishing in
Idaho, Idaho Fish and Wildlife Foundation, September, 1997.
"Cost Savings from Nuclear Resources Reform: An Econometric Model" (with E.
Ray Can terbery and Ben Johnson) Southern Economic Journal, Spring 1996.
A Visitor Analysis for a Birds of Prey Public Attraction, Peregrine Fund, Inc.,
November, 1988.
Investigation of a Capitalization Rate for Idaho Hydro electric Projects, Id aho State
Tax Commission, June, 1988.
"Post-PURPA Views," In Proceedings of the NARUC Biennial Regulatory
Conference, 1983.
An Input-Output Analysis of 1Ìe Impact from Proposed Mining in 1Ìe Challs Area
(with R. Davies). Public Policy Research Center, Idaho State University, February
1980.
Phosphate and Southeast: AS ocio Economic A nalysis (with J. Eyre, et al). Government
Research Institute of Idaho State University and the Southeast Idaho Council of
Governments, August 1975.
Estimating General Fund Revenues of the State of Idaho (with S. Ghazanfar and D. Holley).
Center for Business and Economic Research, Boise State University, June 1975.
"A Note on the Distribution of Federal Expenditures: An Interstate Comparison,
1933-1939 and 1961-1965." In The American Economist,
VoL. XVII, NO.2 (Fall 1974), pp. 125-128.
"New Deal Activity and the States, 1933-1939." In Journal of Economic History, VoL.
XXXIII, December 1973, pp. 792-810.
Exhibit No. 201
IPC-E-10-27
Reading, ICIP
Page 3
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-IO-27
INDUSTRIAL CUSTOMERS OF IDAHO POWER
READING,DI
TESTIMONY
EXHIBIT NO. 202
Attachment to Idaho Power's Response to ICIP Production Request
No. 28(d)
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BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-I0-27
INDUSTRIAL CUSTOMERS OF IDAHO POWER
READING,DI
TESTIMONY
EXHIBIT NO. 203
Idaho Power's Response to ICIP Production Request Nos. 15 and 22
__I NO. 11: Re.Oi Tes ofDa Nemnlt, p.8.. Ii".
13-15.
(8) If th CopanyWi11 pay fo thestimatet$1 a.7 :millio in DSR prm.
C0fr PC l' in2Q11,wi th Compny ftleto reuc th EE ri reve by
th âm
(b) If th ensw'to (8) is "no, .p.. ~in ho th reue to r'veth
$13.7 milli in DSRprorn GXn8' through. th PCiS nc aneu$ to'sn
inc In th EErf by $13.7 mllfn in2011.
(c) Plse prvie th fOlong es for th prje$1.a., .mHIi
expendit:
,Ale Col Crit Fl Pek IrI",k
Rewrdses ;
ltureC$)
pØ'reuctiøil',
es"* CMW)~:pe ..
reUC
/....:;.
RETOBEQUI NO- 15:
Ca) Givn th Copany$ curr prf1 us in this filing and aS$umin
th ~ .ad.ldeho Pös prpols while keeing. th Rider fundin ie
at 4.75 pe,th Rier bafat is ex to apprch zero someme in.th middle
of th yer 2012. Th Rier ls8 bang acUlaii kl8lry Woufd remairi ci. to
ze. Th Cony wi monit th aduacy of th Rier fu an a peiC ba
and if an adju to th fuing lel nes to be made, th CoílnY willflle en
appriiquestwith Comis.
(b) Kis ana.
'OAPO.ER COANSREE TO THE FIRST .. Exhibit No. 203
PRIO REEST OF TH INTR CUTOMERS OF IDAH PO - 24 IPC-E-IO-27
Reading, ICIP
Page 1
(e)
Pf"ic.. ,~'... ,.. .. ....~.-.:..
.11".',q'
$1,210,801.
43
Ifilg ,.....
$11,744,53
28
....NCCOCl
.$79,00
.....
-
pe..$16,82 ii,158 $41,20
on th -êS exitre ($r ro (ro on) abve, IdahO Po has
Pl'vi th in l'. Hove, in prpang this Rèns, th
Comp iden an unn (-)oth Fl Pea 2011 esma
exit. Amore acra esma fo 2011 1$ $2.421,60. relt ina lI of
$5.318. Th re in a tol edma innt value Of $14~9&.131 lns Of
$13,753,3$ 8$ ~ In thApie an teny.
Th dolljrs pe.tltt (-MW) calcla in rothr'.Of thtable.åb,.18
()a pøn Of th. dolars pe MN ne to Qf a dem i'n$Øpl'.
Eiød fr th NO .Co Cr¡itat Irrn Pe Ré pro are Idahø
Po labo, thtd. ~. ~, and rnl (eqUi) purcØ$.
Ex. frh ~k èl areldøh Pows labor and overhs. Th
èXsefo . Idaho Pø-mna dend rø prrams are tr lo.
th are fOr su~e reurc. Howver, wi a pencoonth
exns are fl or lin base on th amontot demand reudn.
Th røseto thi Reue wa prere by Pet Penil, ..~
Resrc anAn~ Lea, Idaho Po Compa. in oonsuitWi Li$ D.
Nostm, Lea Coun, Idaho Por Copany.
IDA POER COANS RES TO THE FIRST . . . Exhibit No. 203
PRREESOF THE INDIA CUSTOMER OF IDA PO-2;PC-E-1Ò-27
Reading, I CIP
Page 2
DA1EDatBo.ldah.. thiS 14th day of De 2010., ~ . " ' -i'. - -.' ; ~
~.Ji.~LI$AD. NQ~ .""Att før Idah Powè'Co
IDAPOERCOPAN$flETØTHEFIRST , ... Exhibit No. 203
PR REQUEST OF THE IN CUTOMER QF1()AHO PO -26 IPC-E-10-27
Reading, ICIP
Page 3
BlWi'TNQ.2l Refnce iøaoo Powr's ResPOrl to IOlf ReqUètNo.
15(e).
(a)Dø Idaho Powr admit th the klnt err I"l1th itlifi
aeltyrel1$t revery th $14.9 milliön (not $13.7millin) in OSR PftR
expns through th PCA?
(b) Do Idaho Po. admit that this is analOus to an incse in the EE
rier by $14.9 miUion in 2011?
(e). Please provie the$I figures including all ~dollars perMW need to
ofrthdemand rense prm" for eschof the thre prorams.
(d) IUhe. dat reuest in (e) is unavailabl, plase explain why, and plese
exPi.. bo Idaho POWr can acoratety te cost-eectivnessof th prorams wihout
co. dalâ. that iOCíØrates all dollars nee to ofer th prorams.
(e) OOesldahoPowr expe that the incrse funding of the FIe)(. pøak
prorøm of $2.421 ,603 Will re$ult in a greater MW.. reuction than proviedil1 tti
teh$Ø? Ifso,pJeaseprovie an updatfK$/fi figure. Please exPlain hOw the MW
reuctn isdElrived,and.pI"Vide suppòrtng work påpersor documents.
(1) Pleas explain ho thMWrëuetion Was derived fot' the AlC · Cool
Cråit$ and the Irrgation Peak Rewards programs, and providesuppcrtingiwork papers
or documents.
RESPONSE TO.REQYESTNO.22:
(a) As a point ofclaricatin.the Company is not asking mrthe recovery. of
ånyexpnses in this fllil1Q. Idaho Powr is proPQsing a new metho Qf l'vørng
dema rePQns øxpnses. The 2011 forest expenses of $14.9 milliønfOt démand
IDAHO POERCOMANV'S RESPOSE to THESlSc;OND . .. Exhibit No. 203
PRODUCTION REQVESTOF THE INDVSTRIAL CUSTQMERSOF IDAHO POWER.. 15 IPC-E-IO-27
Reading, ICIP
Page 4
rense are used fordemonsttiVé purpse. This lel of CO teVè for dernri
rese is currtl budgeted to the Idaho Rier.
(b) Th difrence .betwn.wh th Company isproPOSingandinano
th Ri by $14.9 milion in 2011 is primari a mattr of th meth and liming öfcost
teV$fQr demand response prram incs. .lf the Company's .proposal is
approve, the2011 forest deman response inetive would be reve frm
June Of 2011 through May 2012. In the 2011..12 peA yer, thforeamount wold
be tr-up Wih the adual e~ntes and any over (undet) recovery would reuc (or
Inerease) raes beinning June 2012. Under the currnt cost tecoverymethOd, th
Idaho Riders negve balElnc would inprese with actal dema rePOnse prram
in as they are inêOrr in 2011. Recvery Of th Rider defJCwould cöntl"
beyo 2011.
(e) The expenses. and megawatt (-MW") reducton in the table be.IOWare
forest for2011.
Ale COOL lrñlatP..kCreitFlexPeåkR....Tot)Estlmatec:lE)Cpenditre .($)2011 $1.825.64 $2.~.231 $13.596.167ESrnPekReduction (MW) 2011 48 43 285TotlExplnditreeaReduction($JW)$38,034 $5,P05 $47.708
(d) Oatafor Request No. 22(p) waprovlded above.
(e) No. As staed ¡nthe Company's Respnse to fCIP's Proucion Request
No.1s(c), -However, in Plßparing this Response, the Company identliean
undere$timation (*)of the Flex Peak 2011esmaed e~nditure, A mOlß8CCUrøte
estimae 10r2011 is $2.421,603, resulting in a$/M of $56,316." Note. there \NS f1
IDAH POER COMPANY'S RESPONSE TO THE SECOND Exhibit No. 203
PRODUCTION REQUEST OF THE INDUSTRAL CUSTOMERS OF IDAHO POWER ..16IPC_E_l 0-27
Reading,ICIP
PageS
change in funding level of th Flex Peak Plram, the CQp,ny identff ~n undr
e$lmaln only.
As stted in th Applictin fot IPC-E..9-02,uldaho Powr and EnerNOC have
agreed upon Ûlrgets for each yer; 2009 through 2013. The taryetsfot demand
reuc for thse yers are 2 MV, 30 MW, 4OMW, 50 MW, and 50 Ml, rtpewly:'
TheMW reuctn in the table above aligns wi this filing and the agreement between
Idaho.Por and EnerNOC.
Th MW reducton for FlexPeak Management. isderivedJrom Intrvl meer data
at. th.. partiçints .site. Plse. se FlexPeak ManagrnntOemand Respse
PrarnRepo,pages 6 lhrot.h 8, filed Wih the Commission on Fel)ry26, 2010.
andineluded in the Demand-Sídè Managl1nt2009 Annual RepoJ$upplél'nt2:
Evaluati. Fqr yauroovenienç,ac;py of the rert isattçh. In addition, an
éløçu'(.nlcoopy 1$. al$O avellable at:
hlt://W.puc.idabo.góvllnterntloases/eleclJPClIPCE09021copanyJ201 0030 1.FLEXPEAK%2
OPROGBAMo/ô20REPORT.POF.
(f)For an explanation of how thaload reduction for the AlCCool Creit
proram is .estmated,. please se the Company's Response to (CIP's Prouctn
R.eque$t No. t(ç). In addlti.on, a.çhe is acopyot an April 9, 2007, analysis entited
Løa Reductiøn Anly$isof the 200. Air Ccnditonfng Col Crit Prl1m.
For.an eXpIt;ni:tlOl" of hoW thlOadJ'uctiontor the ln1tionPeakRéWros
prøl'll is ~$Ümated, plese see pages 10 thro1i9h 19 of the åtthed Irrgetri PØåk
Rellrds PrQt;m Repor,fied With the IPUC on December 1. 20. Anelecttol"ic
copy isal$ âvailable on Idaho Pöwets website at:
http://WW.idaih9ROwer.co/pdfslEnegyEffiCíeriçy/Report2000lnigathPeakRewards. pdf.
IDAHO PØERØQMPANY'$ R,E$PQSE TOTHSsecoNO .. .. .. . Exhibit No. 203
PRODUCTION RECllJEST OF THE INDUSTRIA CUTOMERS OF IDAHO PQER"17 IPC-E-l0-27
Reading, ICIP
Page 6
The re$poslo thiS Reque was prere pyPetePeiigilly, Cuome
Resrc & Analy Leaer, Idaho pow COmpany, in consltatin wi Usa o.
NørdSlm,Lea Counsl, Idaho Powr Compy.
IDAHO POERÇQMPANY'$ RE$PONse rQ THE SECOD . . . ... .. ... Exhibit No. 203
PRODUCTI REQUESTOF THEINQUSTRlA CUSTOMERS OF lDAHOPOER ~ 18IPC-E-IO-27
Reading, ICIP
Page 7
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-IO-27
INDUSTRIAL CUSTOMERS OF IDAHO POWER
READING,DI
TESTIMONY
EXHIBIT NO. 204
Attachment to Idaho Power's Response to ICIP Production Request
No.7(a)
OiNo.IP-ElOFl~__1Q
..to (t 'I.U/Ilc.-.
~.....Up
...di..... .....
AI Nß.,....(A\liJ~NiGf_fp_)
leRt.....1€ Wi......SO~tI....._(~..SI..SOl.1A
SM Urt.r. __..........T_CI(2...PYT....(2Ø_NPTø ~Oi..(2Ye
.. Oi(2v.,$l/Y
-_.An~~
3/
4Oæ
15
U2
Q.
o. .1Iiofi
$ 31.U8$ J4G51.S 587..
P81of2 Exhibit No. 204
IPC-E-10-27
Reading, ICIP
Page 1
Ca No. lPC1OFi Pi Re la
IitO No.7.12 .....
An II CO.
2,580,732,50,01,1,2,022,,~2,14~I 2, .
2,;.672,,525
2A13,1
2,4845
1.4
1.91..
1.64
UO
1.5
1.5
1A
1A
U8
134
1.01.
..Ca $ 5U
1 2010 SO,62 3,89,312 $2218 $3,211,63 $2,80,734 1.42201150,62 3,18,312 $25,91 $3,215,263 $2,5,0 1.29320250623,18,3 $32,19 $3,21,11 $uo 1.4 20 SO,6 3,1,312 $34,61 $3,23,9 $1,!l66 1.6452050623,112 $35'1SO $3,2466 $2,1.606205O43,1,312 S 35,2 $3,210 $2,2l 1.7 20 5O 3,89,3 $34,.$3,2,311 $2,14,67 1.l 207 504 3,1l,112 $36,3 $3,2._$2,2 1A,20 so,6 3,1,312 $37,4 $3,22740 $4215i6 1.10 20 50,6 Ull,lU $18,Ø $3,227,4 $2.5 1.
11 2Ø SO,62 $,1l,312 $39,9 $3,22,_$2A13'1 U4122050,&24 3,1l,312 $41,18 $3,23_S 2,Q6 1.3
13 20 SO,&24 3,18,312 $41,15 $3,23,6 $2,ai3 L21420SO,624 3,.,312 S ",77li $:J,2,C $2,681;65 1.315205043,189,312 $4S,O $l,Z$7 $2,71"717 i.W16205O1Z43,18UU $45,61 S 3,34,9 $2,79,29 1.6
17 20 50,62 3,Ul,312 $46..$3,35,61 $2,8840 1.21820SO,614 3,189,12 $47,15 $3~A6 $i.10 1.19 20 50,624 3,1,312 $47..$3,36,360 $3,G7,16 i.20 2Q 62 3 18 12 3Ui 33.
~.Co 41.1
Pi2of2 Exhibit No. 204
IPC-E-10-27
Reading, ICIP
Page 2
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-10-27
INDUSTRIAL CUSTOMERS OF IDAHO POWER
READING,DI
TESTIMONY
EXHIBIT NO. 205
Idaho Power's Response to ICIP Production Request No. 17
~QUEST NO. 17: Reference Idaho Powet,Response to ICIP Requæt No.
7(a) and th attme thereto.
(a) Why does the Cömpany evaluate the cost..eetvenes$ of ..tl Ale Co
Credit prram haleon projeced data for th 2()year life cye onhe prgram when
itposssact1 data frm which it has prvided cost-.ectiveness of th proram
fo the years 2008 and 2009, and wil son havesimilardalafor2010?
(b) Bale on the table provied, the proram has.achieved weii belQwa 1.0
me value for each yer for wh th Company has actl figUre, iricludil'9 TRG
valuÐ$of 0.09 in 200, 0.24 in 2005, 0.34 in 20, 0.33 in 2007, 0.56 in 2000, 0.73 in
20Ø, but th Copany prjes it will achieve 1.0 TRe value in fuure yeal".BasedÖf
th Compåny.s projeon, in what year will the program'scuulatW TRC be 1.0?
Plea.. exPairiwhy this program should not nee to prove cost..efvesoner or be
disentinue.
(c) Please provide the l,pdated calculation for201() ori th boks have
be cJleandfinancial recits reported.
(d) Please reile the sternrit in the rense th lfexPn$$s forldali
Power demnd reponse programs are front loaded," wih the data in the chartprovideq
in response tolCIP Request No.6, Which show the cost for this progrm have
esclated each year since 2008.
(e) OoesldahoPower posses data demonstting that th Ale Cool crits
progrm(Xst are frt loaded? If so, please provide such data and explain. If not,
please exptain th$ basis to use a 2Oyearlevelized cost benefi analysis.
IDAHO poER COMPANY'S R.ESPOSE TO THE steONO Exhibit No. 205
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IQAHOPOWER - 4 IPC-E-10-27
Reading, ICIP
Page 1
(f) Whati$ th amortiztion period for the Ale Cool Creits proram'? Given
the c:~nes ofth Ale COl Creit proram is detemiine.base on th :20..
yer life ofthept~m. plesf3sxpl$in Why a 20-year arnrtizionperiwouldnol be
appropltf3.
BUSE TO REQUESTtiQ. 17:
(a) As stated in the Companys Response to tCIP'sProducn RequestNo.
7:
To be consistent With the IRP, and since demand respnse
pro.rams are inhEreiiy ciiferent frm energy efficiency
prorams, . the BIC ratios for Ale Col Creit and IlTtiori
Peak Rewards are calculated over a 2o-yearprgral'life. . . .
(b) Please seethe COmpany's Response tQ ICIP's ProuctonReqlJ~ NO.7.
Based onth tableptovied. the net present value ("NPV")of benefis excesthNPV
of co$l t;y 2017.,ór year 15 oftheprogram.
As stted in the Commissio's Order No. 29702 approving the AlC Cool Creit
Proram:
Th Company anticip8tes that there will be 40,000 partcipant
in th AC Program witin fie vel' . . .. The higher initial
costs are attributble to th Company's purchase and
instaltanof the dire load contl devices.
IDAHO POER COMPANY'S RESPONSe TO THE SECOND Exhibit No. 205
PROUCTION R.EQUESt OF THE lNDUSTRlACUSTOMERS OF IDAHO POR - 5 IPC-E-10-27
Reading, ICIP
Page 2
A$$ltedin the Copay's Respns to ICIP's Prductn Reque$ Nct 7(d),th
Compenyanticøates achieving its goal for 40,000 particnt In 2011~
Ol'er NO.. 29702 furtr'-:
.. . St8ffopine tttthis demand..side proram ofers a betteralterntive of shøpingor reucng custmer Ioadth~n
purcng aSlpply~slde generan reurc.
As sta in the Companys Response to ICIP's Productn Reques No.7:
As stted in the Company's AppliçliOn. it is the Company's
goal to. keep the trtment of demand..side re90Urc assets on
par Wi supply-side a$S. The léveliZé cost of.a sUpply~
side f'sourc is viewed based on a life-cle analyss, as is
the Ale Cool Creit proram.
As stte in Demand Respose 209 Annual Repo, Supplêrnnt 1: Co8t~
EffctiVne8$, page 2:
To be consistent withlRP ,and since demand reponse
proms . aré inherét) difernt frm 8neigy .efenc
prorams, .thB/C. ras for. AlC Cool. Credit and IrratiPeakiRewlÔs are calculated .over a 2()yer proram life. . . .
It seèlclear that the Company, Commlssi6nSta, and the CommÎSÎ(n's
expetio. are tht the A1CCool Creit program WOuld not be côst'"ece on an
annual basis because of th Initl cost to start this program. Th expeations are that
this proram will becost-effecton a life-cycle basis, as Is a supply..sideresourc.
The development of a demand response program Is similar to. th buildlngof a
$uppl-side resourc. Once the AlC Cot Credit prngram is fully develope (or clseto
h.Vif1~i40.00partlcipant), it wil be COst-effeciVe. This is very simifarto a suply-side
resourc, by the fact that a suØply:.ide resourc is not cost~effec until it Is built and
running. ThebEJnefi of a dèmandrespose proram is that it can be.. utUiedas a
resourc whileit is being "built."
IDAHPOWEftCOMPANS RESPONSE TO THE SECOND E h'b' N 205
PRODUCTION ReQUEST OF THE INOUSTRIL CUSTOMERS OF IDAHO POWER .6 x i it o.IPC-E-IO-27
Reading, ICIP
Page 3
(C) Røsutt of $N2010 demand-sie managemnt (*'OSM") acvies. enøy
savings. detnarìsavi. and investents will be reported follong the clng of th
201Q bøksand publiç diec;osure tt.Reelts of theOSMacrvtiswiU not be
finalzed ..ntth l1an..lde Mønagment 201t) Annual Repo is filed wi .the
COmmiS$iOn on MarC 15.1 2011.
(d) Plese se the gtaph bew of th utilit t'$t data prvledil' th
CotnfJnys Resnse to ICIPs Proucion Request No.6.
Idaho Power Ale Cpol Credit - Total CQ$t data 2002-2022403SO300250200150100SO
o
;......,..,.~.,'...~;,.~"",.~"'.~_...,_..,~....,.""_.-,~
..~~_--.~-...-_.:-._,._...'--,........-,._--_._'-,.......,~~..--~_.
~g ig ~S! 8 ~. :: c: ~ ~ ~ ~ t¡ ..~ ~re ;; i:a~ølaaN2&RRaiRøRgRli
..TotalCost
Thèabove chart demonstras that the Ale Cool Creit proram costs increase
in the earlier yers. The data provied in the COmpany's Response to ICIP's
Production Request No.6 show an incase in expenses for the first seven years.of
th protani. a prjeed døcrease in years eight through ten, and beyond year ten, th
expen$e are è~late atthtee percnt through yer twnt.
(Ø) $ee the Copany's Response tolCIP'sProucton Reque$t No.17(d).
(I) AS$téted in Ms. NemnlCh's l$stimony, the Company currnt in.c1ude$
andrevers au cost$for the AlC COl Credit program through the Rier.. Mor
IDAHO POER COMPANY'S RESPOSE TO THE SECND Exhibit No. 205
PRODUCION REQUEST.OFTHE INDUSTRIAL CUSTOMERS OFIDAH POWER-7 IPC-E-10-27
Reading, ICIP
Page 4
sp1Ç11yl th..co ioClé th variable irnt paymnt ofwhioh th Compaii
is PJrt to reve thf'Ug th peA.
Th copany exp AlC CoIOreit incentie paymnts throgh. th Rier
accunt in th peOd in Which th paymens are made, similar to the trtment offu
expSé fOr a supply-side rft.ro. Th Copany then matches th ret.es
re wi those expse. Tecnicfty, the currnt year incent payint
expe are not conSiere an amortzan expnse and th payimsdo not
reprent. th sysematic expnsing of a longive asset. In addition. th exlSin
trtmen. of matchin reues. wi expenes within the Rier coniíesWih General
A.pt Accunting Prncipi.
Finatry, thebØnefderi frm AlC Col Creditlnctive paymenI$ocr
durlngthe same period in whic the pavmntsare made. Thefore, a long'"ive asst
Wla 2o-year ahirtiiatin PEodwouldnot bØappropriate
iiiClt.ing AlO .. Col Oredit incentie paymnts in the Powr Cost Adju$lnt
epCN) Willaffórd comparablerevery and timin as in the Rider balancl1gaecul't
Th reponSêtø thiS REluest \fsprepare by Pete Pengilly, Customer
Resrc & Analys Leader, .ldahO Power Company, in consulttion Wih Lisa o.
Nordstrom, Lead Counsei, Idaho Power COmpany.
IOAH PQERÇ(l.ÄNY'S RESPONE .TO THE SECOND. .. .. Exhibit No. 205
PROPUCnoNREQUeSTOF THEINDUSTRIAI CUSTOMERS OF IDAHO POWER -8 IPC-E-10-27
Reading, ICIP
PageS
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-IO-27
INDUSTRIAL CUSTOMERS OF IDAHO POWER
READING,DI
TESTIMONY
EXHIBIT NO. 206
Idaho Power's Response to ICIP Production Request No.8
"QUT NO.I=Refno ApiC at t 4. Do Idaho Pobeve tht
th re re Wi pl DSR on a Uequal fo.. wi sup si. rero?
Pl exn ho Idho. Por's pr in asswllh .builin'.ne ga
pe plnt co to Idah Por's pr. inc as wi It .DSR
prms as th wold ex WI th re re in th case. PJø provi
suPlev or ca. ,.
'BlIPE IO'UQNO. 8: Th Compny does. nobevetnfth
re ~. WO. pu dend-se 1'. on an equal fong wi a ...$UJY
sid11ur; hor, it do beieve it would prvi a Sirn. bUne rafo
pwuineir d~t'ûrtor suly reuræ.
Cr.a ..pr ..ir. for 8 del" rel'" corn~ to wh is
all fcrsu~ f'. .
Th .rt to this Rest:wa prepare by Ric Gale, seior VI Pr
ofCOra Rensbili, Idho Por Compa, in co wi Usa D.
Nom, Lead Couns. id Po COmpny.
IDA POÇOAlSRE TO THE FI . ... Exhibit No. 206
PRODCTN REQUEST OF THE INDTRIA CUSTOER OF IDA POR-taPC-E-IO-27
Reading, ICIP
Page 1
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-I0-27
INDUSTRIAL CUSTOMERS OF IDAHO POWER
READING,DI
TESTIMONY
EXHIBIT NO. 207
Idaho Power's November 18,2010 IRP Advisory Council
Presentation, Slide 22
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-IO-27
INDUSTRIAL CUSTOMERS OF IDAHO POWER
READING,DI
TESTIMONY
EXHIBIT NO. 208
Idaho Power's Response to ICIP Production Request No. 27
gAyesTtß.il: Refnc th Compnys Resnselo ICIP's Request No.
15 and 22 (stng the esmat 2011 Peak fothS Deand Resns proms (AIC
CoIC..it Flex Pea. Irrtin Peak Rewnts)Is 376 MW (285+4+48=376)); and
Powr POi Prentatkm titled: IIDemand Side Manaen Demand Respons,"
Pre at th IRPAC Meng Nowmbr18, 2010, avilabl as slid ~ at:
tiitw.ktahOmir.eømlpdAboytUsllanningForFutrerp20111201011181RPAC
MeerigPrenaOSlidea Web.Pd (discng an "oprtnal. Ilrnitthrough2020 of
351 MW (33 MW for 2011) for th Copanys Demand Resns proral1.
Plseexp.lain wh the 376 MW for 2011 provied in thÏ$ca exce$ th
estlmat.optionallimit.proviedlnth IRPAC meting. Wil the Compan rely upn
the prjensinthÎ$ docet in fu analyss rerding 10êldand pek gro
ØlJensuøe in it IRp.pro?
ßESfOETO REQUST NO. 27: Case No. IppE..1o-27 was filed on
Ocbè22, 2010, reflecng th deland response mett ("MW") reuct$
cont on th 2011 budgets prr to th copletn of th demnd re analyis
for thi2011 Intte RèSurc Plan.
Th Wf reucion fr deand respose and the assed invessin.tlls
do are fo. Ultmately. actal expns will be incuded in detrmining the
Powr Co Adjustent ("PC")annually. In additon. the Company relie on th
integté reiirc planning proce rerding load and peakgro proj$ns.
Th re to thi$ Réques was prepare by M. Mark .Stokes, Manager; Powr
Supply Planning. and Pee Penglly, Custmer Resrch & Analyis Leader, Idaho
Powr Company, in consultn wi Lisa D. Nordstm. Lead Counse, Idaho Powr
Company.
IDA POERCOANS RESPOSE TO THE THIRD
PRODUCTION REQUEST OF THE INOSTRlA CUSTOMERS OF IDAHO POR.. 2
Exhibit No. 208
IPC-E-IO-27
Reading, I CIP
Page 1
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-IO-27
INDUSTRIAL CUSTOMERS OF IDAHO POWER
READING,DI
TESTIMONY
EXHIBIT NO. 209
Idaho Power's Response to ICIP Production Request No. 29
l§ilT NO.2I:R"'ncDir Tesmony of Darlen Nenl,. pt 8
and 9 ($l th Compay prøø. to ..eo DSR inc paym throh th
PeA). Ho do. th. Compny propo toincude the DSR incntve paymts¡n it
co-o-ésty i.n 8 rate ca? WoUith DS inc cost be diæ
8$l"ed to thcur cl tht reve th inCé paymts ()raSS as a
symreuro?WOUthy be cosire enrg reate or deman A!?
Pl exlain, anes thimpa on a cost of se sty and reng ra
allotin.
MINNIe TQREQUST NO. 29: Idaho Power doe no haw a eumm
prØQ1 rearding how to includ ~nd-se reurc inæ payment in 8 cost..
. Qf~Sêstyina fuure rateGa.
Th response to thiS Reqst wa prepare by Timoy E. tatm, Manar of
.Co ofSeM, Idaho Por Company, in consulttin wi Lisa D. Nordstm, Lea
Counse, Idah Power Company.
IDAH poER COl4ÄNS AESPoETO THE THIRD
PROTION REQUEST OF THE INDUSTIA CUSTOMER OF IDAHO POWER - 6 Exhibit No. 209
IPC-E-lO-27
Reading, ICIP
Page 1