20130612final_order_no_32826.pdf

Office of the Secretary
Service Date
June 12,2013
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR AN )CASE NO.IPC-E-13-1i
ACCOUNTING ORDER AUTHORIZING )
COLLECTION OF CAPITALIZED CUSTOM )
EFFICIENCY INCENTIVE PAYMENTS )ORDER NO.32826
__________________________________________________________________________________
)
On April 15,2013,Idaho Power Company filed an Application requesting an
accounting order authorizing the Company to recover through its Energy Efficiency Rider
(Rider)the regulatory asset associated with Custom Efficiency incentive payments.Specifically,
the Company seeks recovery of incentive payments made between January 1,2011 and June 1,
2013,plus accrued carrying charges.In addition,Idaho Power requested authority to collect
Custom Efficiency incentive payments made after June 1,2013,through the Rider.
The Custom Efficiency Program provides financial incentives to commercial and
industrial customers to implement energy efficient audits,projects and upgrades,and also
provides technical training and education.On May 17,2011,the Commission issued Order No.
32245 authorizing the Company to record Custom Efficiency incentive payments made after
January 1,2011,in a regulatory asset account with an amortization period to be determined later
by the Commission.In Case No.IPC-E-12-15,the Commission subsequently determined that
$7,018,385 of 2011 Custom Efficiency incentive payments recorded in the regulatory asset
account were prudently incurred,but declined to specify an interest rate for the account until the
Company filed for recovery in a general rate proceeding.In a separate case,the Company
sought recovery of the incentive payments in the regulatory asset account outside of a general
rate case,but the Commission denied the Company’s request in Case No.IPC-E-12-24.See
Order No.32766.The Company now requests modification to the regulatory accounting
treatment for the Custom Efficiency incentive payments,effectively returning collection of these
expenditures to the Rider.
On May 1,2013,the Commission issued a Notice of Application and Notice of
Modified Procedure establishing a comment period on the Company’s Application.Written
comments were filed by Staff and the Idaho Conservation League (ICL).
ORDER NO.32826 1
Staff supports the Company’s requested accounting treatment for the incentive
payments made through the Custom Efficiency Program,restoring recovery of these payments to
the Rider account in place of the unrecovered regulatory asset account.Idaho Power projected a
regulatory asset balance of $14706.829 to transfer to the Rider account effective June 1.2013,
which includes payments made between January 1,2011 and June 1,2013,with an accrued
carrying charge equal to 1%,the current customer deposit rate.For incentive payments made
after June 1,2013,the Company proposes to fund these amounts from the Rider in the same
manner as other Rider-funded energy efficiency expenditures “until such time that the issue of
capitalized investment in DSR [demand-side resources]can be fully addressed in a future general
rate case.”Staff Comments p.2.Staff noted that this approach creates noticeable shifts in the
Rider balance during the next 18 months.The Rider account currently is a regulatory liability
with a projected balance of $8,481,610 by June 1,2013.’With the proposed accounting
treatment,the Rider would reflect a regulatory asset balance of $6,353,057 by the end of June
2013.The Company forecasts the Rider will return to a regulatory liability of $1,141,102 by
August 2014,growing to $13,708,946 by the end of December 2015.
ICL also supports the Company’s Application.ICL noted that returning recovery of
the Custom Efficiency payments to the Rider will result in an underfunding of the Rider until
August 2014.Accordingly,‘ICL urges the Commission to increase the energy efficiency rider
concurrently with approving this application to a level sufficient to bring the account to balance
within one year.”
Based on the record presented,the Commission has determined to approve Idaho
Power’s Application to recover Custom Efficiency Program incentive payments through the
Energy Efficiency Rider,The Company’s proposal was filed after unsuccessful attempts to
recover the amount accumulated in the regulatory asset account outside a general rate
proceeding.Allowing recovery through the Rider will enable the Company to recover the
incentive payments more quickly,without affecting the Commission’s ability to scrutinize the
prudency of those payments.The Company’s request is consistent with a statement in Order
No.32766 that “the Company may propose to recover program expenditures through its Energy
Efficiency Rider,and thus obtain speedy recovery of these expenditures.”Order No.32766 p.9.
For the Rider,regulatory liability means the Company has collected funds in excess of its DSM expenses a
regulatory asset means the Company has provided money to fund DSM programs above the funds collected from
customers.
ORDER NO.32826 2
The Company did not request modification to the Rider funding level,and we note
that with the approved accounting treatment,the Rider changes from a regulatory liability to a
regulatory asset for about one year before it likely returns to a regulatory liability.Fluctuations
in the Rider account are not unusual,and the relatively short time the Rider revenues will be
inadequate to recover ongoing program expenses will not detrimentally affect Rider-funded
programs.
The Commission finds it fair,just and reasonable to allow Idaho Power to recover
Custom Efficiency incentive payments in the Energy Efficiency Rider.Approval of the
proposed accounting treatment,however,does not imply a prudency determination of the 2012
custom efficiency’incentive expenditures.As with all demand-side management (DSM)
programs.the Commission will review the Company’s 2012 DSM expenses during the annual
DSM prudency determination.See Case No.IPC-E-13-08.
ORDER
IT IS HEREBY ORDERED that Idaho Power’s Application for authority to recover
custom efficiency incentive payments through the Energy Efficiency Rider is approved.
Specifically.the Company is authorized to transfer to the Rider account the regulatory account
balance of $14,706,829.representing incentive payments made between January 1.2011 and
June 1,2013,plus a carrying charge of 1%.
IT IS FURTHER ORDERED that Idaho Power is authorized to place incentive
payments made after June 1,2013,in the Energy Efficiency Rider.
THiS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §6 1-626.
ORDER NO.32826 3
DONE by Order of the Idaho Public Utilities Commission at Boise.Idaho this /Z
day of June 2013.
PAL KJELLAN ER,PRESIDENT
MACK A.REDFOICOMMISSIONER
MARSHA H.SMITH,COMMISSIONER
ATTEST:
/1 I\/1 4IA;6LA._
Jén D.Jewellii
Commission Secretary
his/C):IPC-E-13-Il ws2
ORDER NO.32826 4