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HomeMy WebLinkAbout20130403Direct D. Nemich.pdf21AFR-3 P1 t50 IEHO 3L!C UiLIt C BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR A DETERMINATION OF 2012 DEMAND- SIDE MANAGEMENT ("DSM") EXPENSES AS PRUDENTLY INCURRED. CASE NO. IPC-E-13-08 IDAHO POWER COMPANY DIRECT TESTIMONY OF DARLENE NEMNICH 1 Q. Please state your name and business address. 2 A. My name is Darlene Nemnich. My business 3 address is 1221 West Idaho Street, Boise, Idaho 83702. 4 Q. By whom are you employed and in what capacity? 5 A. I am employed by Idaho Power Company ("Idaho 6 Power" or "Company") as a Senior Regulatory Analyst. 7 Q. Please describe your educational background. 8 A. In May of 1979, I received a Bachelor of Arts 9 degree in Business Administration with emphases in Finance 10 and Economics from the College of Idaho in Caldwell, Idaho. 11 In addition, I have attended the electric utility 12 ratemaking course offered through New Mexico State 13 University's Center for Public Utilities, the Edison 14 Electric Institute's Electric Rate Advanced Course as well 15 as various other ratemaking courses. 16 Q. Please describe your work experience with 17 Idaho Power. 18 A. In 1982, I was hired as an analyst in the 19 Resource Planning Department. My primary duties were the 20 calculation of avoided costs for cogeneration and small 21 power production contracts and the calculation of costs of 22 future generation resource options. In 1989, I moved to 23 the Energy Services Department where I performed economic, 24 financial, and statistical analyses to determine the cost- 25 effectiveness of demand-side management ("DSM") programs. NEMNICH, DI 1 Idaho Power Company 1 In 2000, I was promoted to Energy Efficiency Coordinator. 2 In that capacity, I coordinated the Company's effort to 3 grow customer programs and education in energy efficiency 4 promotion. I was responsible for complying with regulatory 5 and financial requirements in the area of energy 6 efficiency. In 2003, I was promoted to Energy Efficiency 7 Leader where I managed the Company's DSM effort, including 8 strategic planning, design and development of programs, 9 regulatory compliance, and overall management of the 10 department. In 2006, I left the Company to pursue personal 11 opportunities. In 2008, I returned to the Company to my 12 current position as a Senior Regulatory Analyst in the 13 Regulatory Affairs Department. My duties as Senior 14 Regulatory Analyst include the development of alternative 15 pricing structures, analysis of the impact on customers of 16 rate design changes, and the administration of the 17 Company's tariffs. 18 Q. What is the purpose of your testimony in this 19 matter? 20 A. The purpose of my testimony is to present the 21 Company's request for a determination of $46,356,160 of DSM 22 expenses incurred in 2012 acquiring demand-side resources 23 as prudently incurred. This amount includes $25,857,603 24 funded by the Idaho Energy Efficiency Rider ("Rider"), 25 $6,019,109 of Custom Efficiency program incentive payments NEMNICH, DI 2 Idaho Power Company 1 funded by the Company and placed in a regulatory asset 2 account, and $14,479,447 of demand response program 3 incentive payments that will be included in the April 15, 4 2013, Power Cost Adjustment ("PCA") filing. I will 5 describe these components in more detail later in my 6 testimony. My testimony will provide a background of 7 recent Idaho Power DSM prudence and funding cases, review 8 2012 DSM program performance, discuss 2012 DSM expenses and 9 adjustments, review cost-effectiveness and evaluation, and 10 summarize how this filing satisfies the Memorandum of 11 Understanding for Prudency Determination of DSM 12 Expenditures filed in Case No. IPC-E-09--09 ("DSM MOU"). 13 I. BACKGROUND 14 Q. Please provide a brief history of recent cases 15 where the Idaho Public Utilities Commission ("Commission") 16 has determined that the Company's DSM expenses have been 17 prudently incurred. 18 A. This is Idaho Power's fifth request for a 19 determination of prudence related to Rider expenses since 20 the Rider was established in 2002. The first filing for a 21 determination of prudence occurred in June 2008 as part of 22 the 2008 general rate case, Case No. IPC-E-08-10. Idaho 23 Power requested that the Commission find that its 2002-2007 24 DSM expenditures of $29 million were prudently incurred. 25 The Commission issued Order Nos. 30740 and 31039 finding NEMNICH, DI 3 Idaho Power Company 1 the $29 million in DSM expenditures prudent. As part of 2 Case No. IPC-E-09-09, Commission Staff ("Staff"), Idaho 3 Power, and other investor-owned utilities operating in 4 Idaho worked together to establish an agreed-upon set of 5 terms for future reporting and evaluating of DSM 6 expenditures and programs. In January 2010, the Staff, 7 Idaho Power, Avista Corporation, and Rocky Mountain Power 8 signed the DSM MOU. This DSM MOU provides a set of 9 guidelines for evaluation and reporting of DSM performance 10 with the purpose of facilitating an objective and 11 transparent Staff and Commission assessment of the 12 utilities' DSM efforts. 13 In March 2010, concurrent with the filing of the 14 Demand-Side Management 2009 Annual Report, Idaho Power 15 filed its second request for a determination of prudence 16 related to Rider-funded efforts when it filed Case No. IPC- 17 E-10-09 for the 2008 and 2009 DSM expenditures of $50.7 18 million. Idaho Power provided two supplements to the DSM 19 2009 Annual Report in an effort to satisfy the guidelines 20 set forth in the DSM MOU. These were Supplement 1: Cost- 21 Effectiveness and Supplement 2: Evaluation. On November 22 16, 2010, the Commission issued Order No. 32113 finding 23 that the 2008 and 2009 DSM expenditures were prudently 24 incurred. 25 NEMNICH, DI 4 Idaho Power Company 1 On March 15, 2011, Idaho Power filed its third 2 request for a determination of prudence related to Rider- 3 funded efforts in Case No. IPC-E-11-05 for the 2010 DSM 4 expenditures of $42.5 million. This amount, which was 5 later modified to $41.9 million due to an accounting 6 adjustment, was found to be prudently incurred by the 7 Commission in Order No. 32331 on August 18, 2011. 8 Finally, on March 15, 2012, Idaho Power filed Case 9 No. IPC-E-12-15 requesting an order that the Company had 10 prudently incurred $42.6 million in DSM expenditures in 11 2011. On October 22, 2012, the Commission found that the 12 Company prudently incurred $42.5 million in DSM 13 expenditures in 2011. (Order No. 32667 and Reconsideration 14 Order No. 32690.) In these orders, the Commission denied 15 recovery of $82,855.50 of A/C Cool Credit program expenses 16 and declined to decide the reasonableness of the Company's 17 increase in Rider-funded labor-related expenses of $89,601 18 included in the 2011 DSM expenses until Idaho Power 19 provides evidence by which to better assess the 20 reasonableness of these expenses. 21 Q. Please review recent regulatory activity that 22 has impacted Idaho Power's funding of DSM resources. 23 A. The Commission issued Order No. 32245 on May 24 17, 2011, authorizing Idaho Power to account for Custom 25 Efficiency program incentive payments as a regulatory NEMNICH, DI 5 Idaho Power Company 1 asset. On December 30, 2011, as part of the 2011 general 2 rate case Order No. 32426, the Commission approved Idaho 3 Power's request to move a base level amount of demand 4 response program incentive payments from the Rider into 5 base rates and be tracked as part of the PCA mechanism. / / 6 The 2013 PCA filing, which will be filed April 15, 2013, 7 will be the first time that the PCA will include an 8 adjustment reflecting a true-up to actual demand response 9 incentive amounts. 10 Idaho Power requests that the 2012 Rider-funded DSM 11 expenses, the 2012 Custom Efficiency program incentive 12 payments, and the 2012 demand response program incentive 13 payments be reviewed for prudence together. 14 II. 2012 DSM PROGR AM PERFORMANCE 15 Q. Please provide an overview of Idaho Power's 16 DSN efforts in 2012. 17 A. 2012 marks the ten-year anniversary of DSM 18 funding through the Rider. In 2012, on a system-wide 19 basis, Idaho Power offered customers 17 energy efficiency 20 programs, three demand response programs, participated in 21 market transformation programs through the Northwest Energy 22 Efficiency Alliance ("NEEA"), and offered several ongoing 23 education initiatives. These are listed in Table 1 below: 24 25 NEMNICH, DI 6 Idaho Power Company 1 Table 1. DSM Program and Activity List Program by Sector Operational Type State Savings Residential A/C Cool Credit.................................................................. Demand Response ID/OR 44.9 MW Ductless Heat Pump Pilot................................................ Energy Efficiency ID/OR 445 MWh Energy Efficient Lighting.................................................. Energy Efficiency ID/OR 16,709 MWh Energy House Calls ......................................................... Energy Efficiency ID/OR 1,192 MWh ENERGY STAR® Homes Northwest................................ Energy Efficiency ID/OR 537 MWh Heating & Cooling Efficiency Program............................. Energy Efficiency ID/OR 689 MWh Home Improvement Program........................................... Energy Efficiency ID 457 MWh Home Products Program ................................................. Energy Efficiency ID/OR 887 MWh Oregon Residential Weatherization ................................. Energy Efficiency OR 12 MWh Rebate Advantage........................................................... Energy Efficiency ID/OR 187 MWh Residential Energy Efficiency Education Initiative ........... Other Programs and Activities ID/OR n/a See ya later, refrigerator® ................................................ Energy Efficiency ID/OR 1,576 MWh Weatherization Assistance for Qualified Customers Energy Efficiency ID/OR 648 MWh Weatherization Solutions for Eligible Customers............. Energy Efficiency ID 258 MWh Commercial/Industrial Building Efficiency............................................................ Energy Efficiency ID/OR 20,450 MWh Commercial Education Initiative....................................... Other Programs and Activities ID/OR n/a Easy Upgrades................................................................ Energy Efficiency ID/OR 41,569 MWh FlexPeak Management.................................................... Demand Response ID/OR 52.8 MW Oregon Commercial Audits.............................................. Energy Efficiency OR n/a Custom Efficiency............................................................ Energy Efficiency ID/OR 54,253 MWh Irrigation Irrigation Efficiency Rewards ........................................... Energy Efficiency ID/OR 12,617 MWh Irrigation Peak Rewards .................................................. Demand Response ID/OR 339.9 MW All Sectors Northwest Energy Efficiency Alliance .............................. Market Transformation ID/OR 17,741 MWh 2 Table 1 illustrates the broad availability of 3 programs offered by Idaho Power to its customers in energy 4 efficiency, demand response, and education. 5 Q. What level of incremental annual energy 6 savings was achieved in 2012 with these programs? 7 A. On a system-wide basis, Idaho Power achieved 8 170,228 megawatt-hours ("MWh") in incremental annual energy 9 efficiency savings in 2012. This value includes NEEA NEMNICH, DI 7 Idaho Power Company 12 13 14 15 16 g 150,000 U) 100,000 'U 250,000 - 200,000 50,000 n 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1 savings. Idaho Power's demand response programs provided a 2 total demand reduction capacity of 438 megawatts ("MW") in 3 2012. The A/c cool credit program and the FlexPeak 4 Management program were used in 2012. Although there was 5 demand reduction capacity available from the Irrigation 6 Peak Rewards program, there was no operational or economic 7 need to dispatch the program in 2012. 8 Table 2 shows the annual incremental energy 9 efficiency savings in MWh since 2002 and Table 3 shows the 10 annual peak demand reduction capacity in MW since 2004. 11 Table 2: Idaho Power Energy Efficiency Savings NEMNIcH, DI 8 Idaho Power company 1 Table 3: Idaho Power Demand Response Capacity 500 450 400 p350 J 300 250 • 200 150 1 100 50 0 2 2004 2005 2006 2007 2008 2009 2010 2011 2012 3 Table 2 shows a slight reduction in energy savings 4 in 2012 as compared to 2011. Customer participation 5 remained strong in most of the programs during the year. 6 The reduced energy savings in 2012 were due in part to 7 Idaho Power's and the region's increased evaluation, 8 measurement, and verification activities that generally 9 adjusted energy saving estimates downward. 10 Table 3 shows a demand reduction capacity increase 11 for the year. 12 The Demand-Side Management 2012 Annual Report ("DSM 13 2012 Annual Report"), Attachment No. 1 to the Application, 14 provides details for each program, including a description 15 of each program, 2012 performance and activities, cost- 16 effectiveness, customer satisfaction, and evaluation NEMNICH, DI 9 Idaho Power Company 1 results. In addition, the DSM 2012 Annual Report provides 2 Idaho Power's DSM strategies for 2013. 3 Q. Please describe the opportunities for external 4 parties to provide input and guidance to Idaho Power's DSM 5 efforts. 6 A. In 2002, Idaho Power created the Energy 7 Efficiency Advisory Group ("EEAG") to provide a forum to 8 gather ideas and suggestions from customers and special 9 interest representatives on formulating and implementing 10 DSM programs. Members include customer representatives 11 from residential, irrigation, commercial, and industrial 12 sectors, as well as representatives for senior citizens, 13 limited-income individuals, environmental organizations, 14 state agencies, the Idaho Public Utilities Commission, and 15 Idaho Power. 16 Q. Has Idaho Power changed the way in which it 17 operates the EEAG? 18 A. Yes. In response to concerns raised by Staff 19 in Case No. IPC-E-12-15 and Commission recommendations in 20 Order No. 32667, Idaho Power implemented a number of 21 changes. To expand the participation in EEAG, Idaho Power 22 engaged members and attendees in an interactive session in 23 the July 19, 2012, meeting to explore how to increase the 24 effectiveness of the group. Suggestions from the EEAG 25 included providing more opportunity during the meetings for NEMNICH, DI 10 Idaho Power Company 1 questions and interaction, utilizing guest speakers, 2 teleconferences and webinars where appropriate, and 3 providing for the opportunity for members to suggest agenda 4 items. In addition, the Company has increased the number 5 of in-person meetings from three to four per year and will 6 continue to address recommendations received. In 2012, the 7 EEAG had three all-day, in-person meetings on February 22, 8 July 19, and November 6. Additionally, a webinar was held 9 on December 5 and a conference call was held on December 10 14. Idaho Power will continue to address the Commission's 11 recommendations concerning the EEAG from Commission Order 12 No. 32667. 13 III. 2012 DSM EXPENSES AND ADJUSTMENTS 14 Q. What amount of 2012 DSM expenses is the 15 Company requesting the Commission find were prudently 16 incurred? 17 A. In the delivery of energy efficiency, demand 18 response, and market transformation programs as well as 19 education and administrative costs, Idaho Power spent 20 $25,857,603 of Rider funds, $6,019,109 of Custom Efficiency 21 program incentive payments, and $14,479,447 of demand 22 response program incentive payments for a total of 23 $46,356,160 spent on demand-side resource acquisition in 24 2012. With this filing, Idaho Power requests the 25 Commission issue an order finding that these funds were NEMNICH, DI 11 Idaho Power Company 1 prudently incurred. Exhibit No. 3 to my testimony, 2012 2 Idaho DSM Expenses and Adjustments for Prudence Filing, 3 shows a breakout of these expenses by program and customer 4 sector and by funding account. Sixty-two percent of the 5 total amount was spent on incentives, 23 percent on 6 purchased services, seven percent on labor/administration, 7 and eight percent on materials, equipment, and other 8 expenses. 9 Q. Please compare the dollar amounts in Exhibit 10 No. 3 with Appendix 2, page 142 in Attachment No. 1 to the 11 Application, DSM 2012 Annual Report. 12 A. The first column of Appendix 2 labeled "Idaho 13 Rider" and the first column of Exhibit No. 3 labeled "Rider 14 Expenses" match at the row labeled Total Expenses. The 15 other columns in Exhibit No. 3 detail the Custom Efficiency 16 program incentive payments and the demand response program 17 incentive payments. 18 A few adjustments to these totals are needed to 19 accurately arrive at the total 2012 expenses for purposes 20 of the prudence determination. To aid in explaining the 21 adjustments, I have added a section at the bottom of 22 Exhibit No. 3 titled Adjustments. 23 Q. What adjustments should be made to the 2012 24 DSM expenses? 25 NEMNICH, DI 12 Idaho Power Company 1 A. In Order No. 32667, and Reconsideration Order 2 No. 32690, the Commission denied a prudence determination 3 of $82,856 in 2011 A/c cool credit program expenses. 4 However, the Rider accounting adjustment was not reflected 5 on the Company's books until 2012. This is explained in 6 footnote (a) which reduces the 2012 A/C Cool Credit program 7 expenses by $82,856. Because the Commission already 8 reflected the adjustment in its prudence determination of 9 2011 expenses, it is appropriate to add this quantity to 10 the amount for the 2012 prudence determination. This is 11 the first adjustment shown at the bottom of Exhibit No. 3 12 in the row labeled Adjustment for 2011 A/c cool credit 13 program exclusion. This adjustment is further explained in 14 footnote (c) 15 The second adjustment area reflects accounting 16 corrections identified after the 2012 year-end financial 17 closing. They are reflected here for prudence 18 determination purposes and will be corrected in the 19 accounting books in 2013. The largest of these is 20 identified in the row labeled Energy House calls program 21 accounting correction under the Year-end accounting 22 adjustments section in Exhibit No. 3. In 2012, in an 23 effort to streamline the Energy House Calls program, Idaho 24 Power brought the direct processing of payments to the duct 25 sealing contractors in-house through the DSM database and NEMNICH, DI 13 Idaho Power Company 1 incentive processing system. The DSM database was 2 originally designed to pay one incentive per customer per 3 project. However, the Energy House Calls program is unique 4 in that the system aggregates all of the individual 5 customer invoices into one payment to the contractor. 6 Because of this aggregation, starting in late 2011 all 7 payments to one of the contractors in the Energy House 8 Calls program was charged to the Idaho Rider even though 9 some of the jobs that the contractors completed were in 10 Oregon. This resulted in $17,113 being charged to the 11 Idaho Rider in 2012 when it should have been charged to the 12 Oregon Rider. I have subtracted this amount from the 2012 13 Total Expenses. This adjustment does not impact the cost- 14 effectiveness of the Energy House Calls program. In 15 addition to the 2012 charges, in 2011, there were $3,512 of 16 Energy House Calls program charges to that same contractor 17 that were incorrectly charged to the Idaho Rider. I 18 request that the Commission reflect this adjustment in 19 their records as necessary. 20 In addition, there were a few smaller adjustments 21 detected after 2012 accounting books closed. These amounts 22 were either applied to the wrong program work order task or 23 applied to the wrong jurisdiction and are also shown in the 24 Year-end accounting adjustment section in the row labeled 25 Other miscellaneous accounting corrections. They reduce NEMNICH, DI 14 Idaho Power Company 1 the Rider Expenses amount by $839 and the Custom Efficiency 2 program incentives by $113. 3 Q. In your review of 2012 DSM program activity, 4 did you find any other specific amounts that should be 5 adjusted? 6 A. Yes. I found two items I believe should be 7 adjusted from the total amount of DSM expenses that Idaho 8 Power includes in this filing. 9 Q. Please describe the first one. 10 A. When the decision was made to file for 11 authority to temporarily suspend the A/C Cool Credit 12 program, the Company notified its third-party vendor to 13 cease replacement of existing paging switches with AMI 14 switches. On December 14, 2012, the Company gave its 15 installation contractor a 15-day notice of termination for 16 the portion of the contract pertaining to the remaining 17 switch replacements and directed the vendor to immediately 18 discontinue switch replacements under the contract. The 19 intent of this letter was that all remaining switch 20 replacements should have been halted. In error, the 21 Company paid for the replacement of switches following the 22 date of the letter. I recommend that the expenses incurred 23 to replace switches after December 14, 2012, be removed 24 from amounts to be considered for a prudence determination 25 at this time. NEMNICH, DI 15 Idaho Power Company 1 Q. How many switches were replaced subsequent to 2 December 14, 2012? 3 A. From the 14th of December until the end of in 2012, 481 switches were replaced. 5 Q. What did the Company do? 6 A. Upon discovery of this issue, the Company 7 determined that the correct action was to point out the 8 issue in this prudence review and to exclude those costs 9 from the amount the Company is requesting a prudence 10 determination on at this time. 11 Q. What amount is Idaho Power excluding from this 12 prudence filing relating to this issue? 13 A. Idaho Power is excluding the installation cost 14 paid to its vendor for the switches replaced from December 15 through the end of the year. The costs were $32,090 16 and are reflected in Exhibit No. 3 on the line labeled 17 Adjustment for A/c Cool credit program switch installation. 18 Q. How is the Company proposing to account for 19 this amount? 20 A. Idaho Power is excluding this amount from the 21 expenses it is requesting the Commission find as prudently 22 incurred in this filing. However, because the installation 23 of these switches still has value to the A/C Cool Credit 24 program, Idaho Power proposes to set aside this amount for 25 a future prudence review if or when the A/C Cool Credit NEMNICH, DI 16 Idaho Power Company 1 program resumes operation. At the time the program resumes 2 operation, these installed switches will be useful and 3 Idaho Power will ask for a prudence determination. This is 4 similar in concept to plant held for future use. 5 Q. What is the second item you found where you 6 are recommending a specific adjustment to the 2012 DSM 7 expenses for prudence determination? 8 A. While reviewing 2012 ENERGY STAR ® Homes 9 Northwest program ("ENERGY STAR") incentive payments, 10 Idaho Power identified 10 incentives, out of a total of 11 410, that were inadvertently paid to customers who 12 submitted applications for ENERGY STAR gas heated homes. 13 Since non-electrically heated ENERGY STAR homes with 14 building permits dated after December 31, 2010, were 15 excluded from this program in 2011, these 10 incentives 16 should not have been paid. It should be noted that there 17 are kilowatt-hour ("kWh") savings from these homes, 18 primarily from more efficient cooling systems, but at this 19 time they are still not cost-effective. The costs and 20 savings of these 10 homes are included in the cost- 21 effectiveness analysis and the program remains cost- 22 effective. The Company determined that the correct action 23 was to report this issue in this prudence review and to 24 exclude those costs from the amount the Company is 25 requesting for prudence determination. NEMNICH, DI 17 Idaho Power Company 1 Q. What is the amount that Idaho Power is 2 excluding from this prudence filing related to this issue? 3 A. Idaho Power is excluding the 10 incentive 4 amounts. The incentives were $400 per home, so the total 5 amount paid in error is $4,000. This value is reflected in 6 Exhibit No. 3 on the line labeled Adjustment for ENERGY STAR® Homes Northwest incentives. 8 Q. Are there any other prudence issues to be 9 considered? 10 A. Yes. In Order No. 32667, the Commission 11 declined to decide the prudence of the increase in 2011 12 Rider-funded labor-related expenses included in the 2011 13 DSM expenses until the Company provides evidence by which 14 to better assess the reasonableness of the expenses. 15 Company witness Mr. Timothy Tatum has sponsored testimony 16 in this case that provides information to determine the 17 prudence of the increase in 2011 and 2012 labor costs 18 charged to the Rider. Mr. Tatum has asked me to quantify 19 the increase in Rider-funded labor-related expenses 20 included in the 2011 and 2012 DSM prudence requests. 21 Q. Please explain your calculation. 22 A. In Table 4 below, I have quantified the 23 Company's understanding of Staff's calculation of the 24 Rider-funded labor-related expense increase that the 25 Commission excluded from the 2011 prudence determination NEMNICH, DI 18 Idaho Power Company 1 and I have replicated that calculation to quantify the 2 increase in Rider-funded labor-related expense amounts from 3 2010 to 2012. The total annual Rider-funded labor-related 4 expense is shown in column 1 and an estimate of the total 5 number of Rider-funded full-time equivalent employees 6 ("FTE") is shown in column 2 for each year from 2010 to 7 2012. These estimated FTE values are based on total hours 8 charged to the Rider, divided by a full-time equivalent 9 1,912 hours per year. Annual FTE numbers vary due to a 10 number of reasons including unfilled or back-filled 11 positions or number of actual vacation hours taken by 12 employees. In order to calculate the average labor expense 13 per FTE for 2010, column 1 is divided by column 2 and the 14 result is shown in column 3. This average labor expense 15 per FTE of $96,520 is used as the basis for this analysis 16 because it was the average labor expense per FTE from 2010 17 when all Rider-funded labor costs were last deemed prudent. 18 Column 4 shows the 2011 and 2012 "deemed prudent" total 19 labor expense calculated by multiplying the yearly FTE 20 values in column 2 by the 2010 average labor expense per 21 FTE value of $96,520. In column 5, the actual total labor 22 expenses in column 1 is compared to the "deemed prudent" 23 total labor expense in column 4, resulting in the 24 calculation of the increase in Rider-funded labor-related 25 expenses for 2011 and 2012. NEMNICH, DI 19 Idaho Power Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Table 4 Column 1 2 3 4 5 Column 2 Column 1 Total times minus Labor FTE 2010 $/FTE 2010 $/FTE Column 4 2010 $2,577,080 26.70 $96,520 2011 $2,637,729 26.40 $96,520 $2,548,128 $89,601 2012 $2,886,988 28.11 $96,520 $2,713,177 $173,811 Q. Did Idaho Power include the increase in 2011 Rider-funded labor-related expenses in this filing? A. Yes. The Company included $89,601 of 2011 Rider-funded labor expenses in the adjustment section of Exhibit No. 3 in the row labeled Adjustment for 2011 Rider- funded labor increase. This amount was not included in the amount the Commission deemed prudent in the IPC-E--12-15 2011 DSM prudence case. The Commission declined to decide the reasonableness of the Company's increase in Rider- funded labor-related expenses included in the 2011 DSM expenses until Idaho Power provides evidence by which to better assess the reasonableness of these expenses. The Company seeks to include this amount in the 2012 DSM expense prudence request and Mr. Tatum's testimony provides the evidence showing the reasonableness of these expenses. Q. Please summarize the impact of the adjustments described above to the three different funding accounts. NEMNICH, DI 20 Idaho Power Company 1 A. As shown in Exhibit No. 3, these adjustments 2 bring the total Rider-funded expenses to $25,857,603 and 3 the Custom Efficiency program incentive payment amount to 4 $6,019,109. The demand response program incentive payment 5 amount had no adjustment and remains at $14,479,447. The 6 total of these three amounts is $46,356,160. 7 IV. 2012 PROGRAM COST-EFFECTIVENESS OVERVIEW 8 Q. What is Idaho Power's overall goal when it 9 comes to DSM cost-effectiveness tests? 10 A. Idaho Power's goal is to have all programs 11 achieve benefit/cost ratios of 1.0 or greater for the total 12 resource cost test ("TRC"), utility cost test ("UCT"), and 13 the participant cost test ("PCT"). Each of the tests 14 provides information about the impacts of DSM programs from 15 distinct perspectives. The TRC looks at benefits and costs 16 from the perspective of all utility customers (participants 17 and non-participants) in the utility service area, the UCT 18 calculates costs and benefits from Idaho Power's 19 perspective, and the PCT looks at the average participating 20 customer's costs and benefits. Because of the value in 21 comparing demand-side resources to supply-side resources, 22 Idaho Power has placed emphasis on the TRC and UCT. Idaho 23 Power reviews the cost-effectiveness results for each 24 program on an annual basis to determine whether the program 25 should continue or be modified in some way to ensure its NEMNICH, DI 21 Idaho Power Company 1 ongoing cost-effectiveness. The cost-effective test 2 methodologies and assumptions are described in more detail 3 in the first pages of Supplement 1: Cost-Effectiveness 4 ("Supplement 1") that is contained in Attachment No. 1 to 5 the Application. 6 Q. What were the results of the 2012 cost- 7 effective analyses? 8 A. Exhibit No. 4, 2012 Cost-Effectiveness Summary 9 by Program, shows the results of the TRC, UCT, and PCT for 10 every energy efficiency and demand response program offered 11 in Idaho. These results show that of the 15 energy 12 efficiency programs for which the Company claims savings, 13 all but two programs had benefit/cost ratios greater than 14 1.0 for the TRC and the UCT using 2012 DSM costs and 15 benefits. The cost-effectiveness calculations for the 16 three demand response programs shown in Exhibit No. 4 17 represent 20-year life cycle calculations for A/C Cool 18 Credit and Irrigation Peak Rewards and 10-year life cycle 19 calculations for FlexPeak Management. All three of Idaho 20 Power's demand response programs have benefit/cost ratios 21 greater than 1.0 from the TRC and the UCT perspective when 22 evaluated from this long-term perspective. For prudence 23 determination purposes, Idaho Power has historically 24 focused on the one-year benefit/cost ratios for energy 25 NEMNICH, DI 22 Idaho Power Company 1 efficiency programs and the longer-term benefit/cost ratios 2 for demand response programs. 3 For energy efficiency programs, Idaho Power also 4 provides calculations of the TRC and UCT using costs and 5 benefits from the inception of the program to the current 6 year. For demand response programs, Idaho Power provides 7 benefit/cost calculations reflecting one year costs and 8 benefits. These calculations are shown in the program 9 description sections and in Appendix 4 of the DSM 2012 10 Annual Report. The details of these calculations are in 11 Supplement 1. The POT is not calculated for any demand 12 response program or where there are no direct customer 13 costs, and this is reflected as "N/A" in Exhibit No. 4. 14 Q. Which programs did not have a benefit/cost 15 ratio greater than 1.0 in 2012 from the perspective of the 16 TRC and the UCT? 17 A. As shown in Exhibit No. 4, the two programs 18 targeted to limited income customers, Weatherization 19 Assistance for Qualified Customers ("WAQC"), and 20 Weatherization Solutions for Eligible Customers 21 ("Solutions") had benefit/cost ratios below 1.0 for both 22 the UCT and the TRC. The POT is not calculated for these 23 programs because they impose no direct costs on the 24 participants. 25 NEMNICH, DI 23 Idaho Power Company 1 Q. Please describe the reasons why the WAQC and 2 Solutions programs did not achieve the targeted results. 3 A. Idaho Power, through a third-party consultant, 4 just completed an impact evaluation on these two programs. 5 These evaluations reported a realization rate for the WAQC 6 program of 29 percent and a realization rate for the 7 Solutions program of 19 percent. Although there has not 8 been time to fully evaluate all aspects of the report, 9 Idaho Power adjusted the 2012 kWh savings values in the 10 cost-effectiveness calculations of both the WAQC and 11 Solutions programs to reflect the average annual energy 12 savings from the impact evaluations, when Idaho Power 13 adjusted the kWh savings to reflect the impact evaluation 14 findings, both programs had benefit/cost ratios under 1.0 15 for the TRC and the UCT. 16 Idaho Power operated the programs in 2012 with the 17 assumption that the programs were cost-effective. It was 18 only after receiving the impact evaluation findings in 19 February 2013 that the Company retroactively modified 20 reported program savings for 2012. 21 Q. Is the cost-effectiveness of utility low 22 income weatherization programs in Idaho the subject of 23 scrutiny in Commission Case No. GNR-E-12-01? 24 A. Yes. 25 Q. Please explain. NEMNICH, DI 24 Idaho Power Company 1 A. In 2012, the Commission initiated a generic 2 case to explore issues related to cost-effectiveness and 3 funding of low income weatherization and energy 4 conservation programs for electric utilities. In this 5 case, Staff submitted a low income report on October 23, 6 2012, that stated both Avista and Rocky Mountain Power's 7 low income weatherization programs had TRC and UCT ratios 8 under 1.0. Both of those programs had been recently 9 evaluated. Staff, in their report, also recommended 10 several modifications to the cost-effectiveness methodology hi in order that all low income weatherization programs are 12 evaluated in a similar manner, to improve accuracy, and to 13 more completely assess the programs. 14 Q. Did Idaho Power incorporate Staff's 15 recommended modifications to the cost-effectiveness 16 analyses for the WAQC and Solutions programs? 17 A. Yes. The TRC and UCT results shown in Exhibit 18 No. 4 for the WAQC and Solutions programs include Staff's 19 proposed modifications with two exceptions. First, Idaho 20 Power did not include any estimate of reduction of 21 arrearages due to these programs. Idaho Power does not 22 believe that it can accurately quantify a reduction in 23 arrearages that could reasonably be attributable to these 24 programs. Second, Idaho Power did not amortize evaluation 25 costs over a three-year period as recommended by Staff. NEMNICH, DI 25 Idaho Power Company 1 Q. What does Idaho Power plan to do to improve 2 the cost-effectiveness of the WAQC program? 3 A. Because the audit program used in the WAQC 4 program to estimate savings per home appears to be 5 overestimating the savings, Idaho Power will issue a 6 request for proposal to conduct research and analyses on 7 this model to assess the differences between the audit 8 results and impact evaluations. In addition, a process 9 evaluation is planned for WAQC in 2013. Idaho Power will 10 continue to work with parties in the GNR-E-12-01 case to 11 evaluate ways to improve program cost-effectiveness. 12 Q. What does Idaho Power plan to do to improve 13 the cost-effectiveness of the Solutions program? 14 A. Similar to the research on the WAQC program, 15 Idaho Power plans to conduct research and analysis on the 16 audit model used in the Solutions program. Idaho Power 17 will require the contractor to determine per measure 18 savings for this program and compare them to deemed savings 19 for weatherization measures from the Regional Technical 20 Forum and other sources. Again, similar to the WAQC 21 program, a process evaluation is planned in 2013 on the 22 Solutions program. Early in 2013, Idaho Power also plans 23 to work with the contractors implementing the program to 24 look at near-term options in an effort to make the program 25 more cost-effective. And while the Solutions program is NEMNICH, DI 26 Idaho Power Company 1 different from the WAQC program in that it is Rider-funded 2 and not part of the Department of Energy Weatherization 3 Program, the participants targeted for this program are 4 also limited-income (i.e., between 175 percent and 250 5 percent of the federal poverty level) . Therefore, the 6 findings of GNR-E-12-01 will also help determine future 7 modifications to this program. 8 Q. Concerning all of its programs, did Idaho 9 Power look at program cost-effectiveness from the Ratepayer 10 Impact Measure ("RIM") perspective as requested by the 11 Staff in Attachment No. 1 of the DSM MOU? 12 A. Yes. The RIM test measures the impact on 13 customers' bills or rates due to changes in utility 14 revenues and operating costs caused by an energy efficiency 15 program. According to the National Action Plan for Energy 16 Efficiency's Understanding Cost-Effectiveness of Energy 17 Efficiency Programs: Best Practices, Technical Methods, 18 and Emerging Issues for Policy-Makers, this test is 19 typically a secondary test used to evaluate relative 20 impacts on rates. It should be noted that while Staff, in 21 Attachment No. 1 to the DSM MOU, stated an expectation that 22 programs should pass the TOU, UCT, and PCT (and if not to 23 provide an explanation), there was no stated expectation 24 that programs must pass the RIM test. 25 NEMNICH, DI 27 Idaho Power Company 1 Q. What were the results when Idaho Power 2 calculated the RIM tests on its programs? 3 A When Idaho Power made these calculations, 4 programs had a range of benefit/cost ratios for the RIM 5 test with the lowest at 0.33 and the highest at 1.97. 6 Results for each program calculation can be found in 7 Supplement 1 of the 2012 DSM Annual Report. 8 Q. Did Idaho Power calculate cost-effectiveness 9 tests for each measure within each program? 10 A. Yes. In 2012, Idaho Power evaluated the 11 benefits and costs of 410 measures from both the TRC and 12 the UCT perspective. Of the total number of measures 13 analyzed, 52 did not pass either one or both of the tests. 14 It should be noted that Idaho Power does not perform cost- 15 effectiveness calculations by measure in programs where 16 there is significant interaction between measures. 17 The results of these calculations along with measure 18 assumption details and source documentation can be found in 19 Supplement 1 to the DSM 2012 Annual Report. 20 Q. How did Idaho Power address the measures that 21 are not cost-effective based on one or more tests? 22 A. The cost and benefit values used in the 23 various analyses are based on markets, technologies, 24 economic inputs, savings estimates, and cost estimates 25 which can change over time. When a measure is determined NEMNICH, DI 28 Idaho Power Company 1 not to be cost-effective at a specific point in time, Idaho 2 Power first evaluates whether the inputs used in the 3 calculations are still correct, and then determines if 4 measure parameters should be modified or whether the 5 measure should be eliminated. For those 52 measures that 6 were not cost-effective in 2012, 40 were removed from 7 program offerings in 2012. Eleven measures will be 8 reviewed and possibly modified in 2013. One measure will 9 be removed in 2013. 10 V. EVALUATION ACTIVITY OVERVIEW 11 Q. Please discuss the Company's approach to 12 program evaluation. 13 A. In order to ensure the ongoing cost- 14 effectiveness of programs through validation of energy 15 savings and demand reduction, and to guide the efficient 16 management of its programs, the Company relies on 17 evaluations by third-party contractors chosen through a 18 competitive bidding process, internal analyses, and 19 regional and national studies. Idaho Power uses industry- 20 standard protocols for its internal and external evaluation 21 efforts. Process and impact evaluations are typically on a 22 three-year cycle for each program; however, the timing of 23 specific program evaluations is based on considerations 24 regarding program needs. The Company actively participates 25 in regional groups that evaluate new technologies and NEMNICH, DI 29 Idaho Power Company 1 advancements. The DSM MOU provides further direction on 2 how Idaho Power plans, evaluates, and reports its DSM 3 activities. 4 Q. Please provide an overview of the evaluation 5 activities that took place in 2012. 6 A. In addition to the annual cost-effective 7 analyses that the Company conducts for each program, in 8 2012, Idaho Power completed six impact evaluations on the 9 following programs: Heating and Cooling Efficiency 10 Program, See ya later refrigerator ®, Weatherization 11 Assistance for Qualified Customers, Weatherization 12 Solutions for Eligible Customers, Building Efficiency, and 13 Easy Upgrades. All of these impact evaluations were 14 conducted by third-party contractors. In addition, Idaho 15 Power conducted its annual internal review on the Flex Peak 16 Management and the Irrigation Peak Rewards programs. These 17 two analyses have been listed as impact evaluations in 18 previous years. Idaho Power completed one process 19 evaluation on the A/C Cool Credit program in 2012. 20 Finally, third-party consultants conducted research on 21 measure savings estimates for the Irrigation Efficiency 22 Rewards program. The A/C Cool Credit program was studied 23 to determine cycling strategies and kilowatt reductions at 24 different ambient temperatures. This overall evaluation 25 effort accomplishes the plan set out in last year's DSM NEMNICH, DI 30 Idaho Power Company 1 2011 Annual Report. The final reports for these 2 evaluations and studies, the market effects evaluations 3 conducted by NEEA, along with findings for a 20-year all- 4 sector energy efficiency potential study are included in 5 Supplement 2: Evaluation ("Supplement 2") of the DSM 2012 6 Annual Report. 7 Q. Has Idaho Power been able to evaluate customer 8 satisfaction with the program offerings? 9 A. Yes. Since 2003, Idaho Power has included 10 three questions specific to customer satisfaction with the 11 Company's energy efficiency efforts in its quarterly 12 customer satisfaction survey conducted by a third-party 13 proprietary research vendor. From 2003 to 2012, customers' 14 positive perceptions of Idaho Power's energy efficiency 15 efforts have increased from 39 percent to 60 percent, an 16 overall increase of 54 percent. Of those surveyed who 17 participated in at least one program, 90 percent are "very" 18 or "somewhat" satisfied with the program. The Company also 19 implements surveys as needed for individual programs to 20 gather information on suggestions for improvement or 21 satisfaction of energy efficiency services offered. 22 Q. Does Idaho Power have a DSM program evaluation 23 plan for 2013? 24 A. Yes. The DSM 2010-2013 Program Evaluation 25 Plan is attached as Exhibit No. 5 and is also included in NEMNICH, DI 31 Idaho Power Company 1 Supplement 2. The emphasis in 2012 was on conducting 2 impact evaluations. Impact evaluations assist in the 3 determination of energy and demand impacts that can be 4 attributed to a program. These impact evaluations are 5 essential to ensure estimated program savings are realized 6 by the Company and its customers. In 2013, Idaho Power's 7 evaluation plan includes one impact evaluation, seven 8 process evaluations, and several other additional research 9 projects. This plan is intended to be used as a guide and 10 may change based on need, timing, or other factors. 11 VI. SATISFACTION OF DSM MOU GUIDELINES 12 Q. Does this filing satisfy the reporting 13 obligation for DSM activity as set forth in the DSM MOU? 14 A. Yes. Idaho Power has followed the template, 15 table of contents, highlights, and program specific 16 sections as recommended in the DSM MOU. This information 17 can be found in the main document of the DSM 2012 Annual 18 Report. In Supplement 1, Idaho Power has provided the 19 cost-effectiveness detail for programs and measures and 20 Supplement 2 supplies the evaluation in ion requested , c 21 in the DSM MOU. :e 4 ' 22 Q. Does this conclude 23 A. Yes, it does. 24 25 NEMNICH, DI 32 Idaho Power Company 1 ATTESTATION OF TESTIMONY 2 STATE OF IDAHO 3 ) ss. 4 County of Ada 5 I, Darlene Nemnich, having been duly sworn to 6 testify truthfully, and based upon my personal knowledge, 7 state the following: 8 I am employed by Idaho Power Company as a Regulatory 9 Analyst in the Regulatory Affairs Department and am 10 competent to be a witness in this proceeding. 11 I declare under penalty of perjury of the laws of 12 the state of Idaho that the foregoing pre-filed testimony 13 and exhibits are true and correct to the best of my 14 information and belief. 15 DATED this 3 day of April, 2013. 18 Darlene Nemnich 19 SUBSCRIBED AND SWORN to before me this day of 20 April, 2013. 22 , ** - 23 j 41 140t4 NO N t ry Pubic )for Idaho 24 : f Residing atL-k1L, .41w 25 My commission expires: 26 ".• Op j 27 MellsO NEMNICH, DI 33 Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-13-08 IDAHO POWER COMPANY NEMNICH, DI TESTIMONY EXHIBIT NO. 3 Idaho Power Company 2012 Idaho DSM Expenses and Adjustments for Prudence Filing Custom Efficiency Program Incentives Demand Response Recorded In Regulatory Program Incentives Expenses Rider Expenses Asset Recorded in PCA Total Expenses Energy EfflciencyiDemand Response Residential NC Cool Credi $ 4,804,566 $ 0 $ 747,763 $ 5,552,328 Ductless Heat Pump Pilot $ 153,017 $ 0 $ 0 $ 153,017 Energy Efficient Lighting $ 1,110,329 $ 0 $ 0 $ 1,110,329 Energy House Calls $ 272.666 $ 0 $ 0 $ 272,666 ENERGY STAR®Homes $ 450,727 $ 0 $ 0 $ 450,727 Healing & Cooling Efficiency Program $ 175,483 $ 0 $ 0 $ 175,483 Home Improvement Program $ 385,091 $ 0 $ 0 $ 385,091 Home Products Program $ 640,098 $ 0 $ 0 $ 640,098 Rebate Advantage $ 34,926 $ 0 $ 0 $ 34,926 SeeYaLaterRefrigerator $ 596,167 $ 0 $ 0 $ 596,167 Weatherization Solutions for Eligible Customers $ 1,048,461 $ 0 $ 0 $ 1.048,461 Commerclalllndustrial Building Efficiency $ 1,579,121 $ 0 $ 0 $ 1,579,121 Comprehensive Lightng $ 64,094 $ 0 $ 0 $ 64,094 Easy Upgrades $ 5,150,422 $ 0 $ 0 $ 5,150,422 FlexPeak Management $ 98,973 $ 0 $ 2,760,360 $ 2.859,333 Custom Efficiency $ 923,050 $ 6.053,368 $ 0 $ 6,976,417 Irrigation Irrigation Efficiency Rewards $ 1,978,729 $ 0 $ 0 $ 1.978.729 lrnpation Peak Rewards $ 1,309,107 $ 0 $ 10.971.325 $ 12.280.432 Enemy Efflclency,Vemand Response Total $ 29775.027 $ 6,053,368 $ 14.479,447 $ 41,307,842 Market Transformation NorthwestEneroy Efficiency Alliance 3,210,768 $ 0 $ 0 $ 3,210,768 Market Transformation Total $ 3,210.768 $ 0 $ 0 $ 3.210,768 Other Programs and Activities Residential Economizer Pilot $ 93,593 $ 0 $ 0 $ 93,593 Residential Energy Efficiency Education Initiative $ 165,919 $ 0 $ 0 $ 165,919 Commercial Energy Efficiency Education Initiative 70,099 $ 0 $ 0 $ 70.099 Energy Efficiency Direct Program Overhead $ 271,622 $ 0 $ 0 $ 271,622 Local Enemy Efficiency Fonda - $ 0 $ 0 $ Other Programs and Activities Total $ 601,233 $ 0 $ 0 $ 601.233 Indirect Program Expenses Residential Overhead $ 172,819 $ 0 $ 0 $ 172,819 Commerciablndusttialltrrigation Overhead $ 171,673 $ 0 $ 0 $ 171,673 Energy Efficiency Accounting and Analysis $ 898,944 $ I) $ 0 $ 898,944 Energy Efficiency Advisory Group $ 2,710 $ 0 $ 0 $ 2,710 Special Accounting Entries(b) (93,985) $ (34,146) $ 0 $ (128,131) Indirect Program Expenses Total $ 1,152,161 $ (34,146) $ 0 $ 1.118.015 Total Expenses $ 25,739,188 $ 6,019,222 $ 14,479,441 $ 46,237,857 Adjustments Adjustment for 2oll NC Cool Credit program exclusion 11 $ 82,856 $ 82,856 Year-end accounting adjustments:tn $ Energy House Calls program accounting correction $ (17,113) $ (17,113) Other miscellaneous accounting corrections $ (839) $ (113) $ (951) Adjustment for NC Cool Credit program switch installation $ (32,090) $ (32,090) Adjustment for ENERGY STARteHomes Northwest incentives $ (4,000) $ (4,000) Adjustment for 2011 RIder-funded labor increase 89,601 89,601 2012 Prudence Filing Total$ 25.8571603 $ 6.019.109 $ 14.479,447 $ 46.356.160 (e)A/C Cool Credit Program amount of $4,804,506 includes deduction of ($82,850) fora,ll,aooen deemed impudent par IPUC Onter No. 32667. In order to anire at actual program expenoeo for 2012, thin amount is added back. See footnote (c). (b)Special Accounting Entries include program incentives accrued for year-end, but not paid to customers until 2013. Associated energy savings militia recorded in 2013. (c)This adjustment adds back in the 2011 disallowance for A/C Cool Credit program incentives that mare deemed imprudent 102012 per IPUC Order No. 32067. (d)Them are accounting conecti000 identified after 2012 year and that will be corrected in 2013. Exhibit No. 3 Case No. IPC-E-13-08 D. Nemnich, IPC Page 1of 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-13-08 IDAHO POWER COMPANY NEMNICH, DI TESTIMONY EXHIBIT NO. 4 Idaho Power Company 2012 Cost-Effectiveness Summary by Program 2012 Benefit/Cost Tests Program Utility Cost (UCT) Total Resource Cost (TRC) Participant Cost (PCT) A/C Cool Credit 1.33 1.33 N/A FlexPeak Management 1.22 1.22 N/A Irrigation Peak Rewards 1.79 1.72 N/A Ductless Heat Pump Pilot 3.76 1.14 1.06 Energy Efficient Lighting 5.60 2.62 3.30 Energy House Calls 4.08 4.08 _N/A ENERGY STAR® Homes Northwest 1.73 1.05 1.49 Heating & Cooling Efficiency Program 5.11 1.61 1.48 Home Improvement Program 2.39 1.27 1.55 Home Products Program 1.18 1.06 2.05 Rebate Advantage 6.13 3.51 5.26 See ya later, refrigerator ® 1.60 1.60 N/A Weatherization Assistance for Qualified Customers 0.84 0.71 N/A Weatherization Solutions for Eligible Customers 0.43 0.47 N/A Building Efficiency 9.08 2.10 1.40 Custom Efficiency 4.66 2.97 1.79 Easy Upgrades 5.43 3.47 2.94 Irrigation Efficiency 3.98 1.64 1.31 Notes: For each energy efficiency program, this table shows UCT, TRC, and PCT using actual annual 2012 information for each program. For demand response programs, this table shows UCT and TRC using 20-year life-cycle information for A/C Cool Credit and Irrigation Peak Rewards and 10-year life-cycle information for FlexPeak Management. The PCT was not calculated on demand response programs or on programs where there are no participant costs. Exhibit No. 4 Case No. IPC-E-13-08 D. Nemnich, IPC Page 1 of 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-13-08 IDAHO POWER COMPANY NEMNICH, DI TESTIMONY EXHIBIT NO. 5 Idaho Power Company 2010-2013 DSM Program Evaluation Plan com Q)• n)x ( ZU) CD CD _.3 z o 0 Z -I, • -U I 0 () 0 Energy Efficient Lighting_ Energy House Calls - - ENE RGY STARS Homes Northwest Home IrVro~ Program Horne Products Rebate Advantage See ya later, refrigerator @ - - — "'ustom Efficiency Ir4 1 i i -