20130522Comments.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03 l 8
IDAHO BAR NO. 3283
Street Address for Express Mail:
472W WASHINGTON
BOISE ID 83702-5918
Attorney for the Commission Staff
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AN
ACCOUNTING ORDER AUTHORIZING
COLLECTION OF CAPITALIZED CUSTOM
EFFICIENCY INCENTIVE PAYMENTS.
CASE NO. IPC-E.13-1I
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through
its Attorney of record, Weldon B. Stutzman, Deputy Attorney General, and in response to the
Notice of Application and Notice of Modified Procedure issued in Order No. 32799 on May I ,
2013, submits the following comments.
BACKGROUND
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. Idaho Power seeks
recovery of incentive payments made between January l,20ll through June l, 2013, plus accrued
canying charges, and also requests authorization to collect future incentive payments through the
Rider made after June 1,2013.
STAFF COMMENTS MAY 22,2013
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 I 7 ,2011, the Commission issued Order No. 32245 authorizing the
Company to record Custom Efficiency incentive payments made since January 1,2011 in a
regulatory asset account with an amortization period to be determined later by the Commission.
Later, in Case No. IPC-E-72-15, the Commission determined that $7,018,385 of 201I Custom
Effrciency incentive payments recorded in the regulatory asset account were prudently incurred, but
declined to specify a interest rate until the Company filed for recovery in a general rate proceeding.
In yet another 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 is requesting an accounting order
authorizing modification to the regulatory accounting treatment for the Custom Efficiency incentive
payments, effectively returning collection of these expenditures to the Rider. 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." P. 9.
STAFF REVIEW
Staff supports the Company's requested accounting treatment of the Custom Efficiency
program. The proposal retroactively and prospectively restores recovery of incentive payments to
the Rider account in lieu of the unrecovered regulatory asset account.
In Case No. IPC-E-10-27, the Commission authorized the regulatory asset account, but
required the Company to delay recovery until the amortization period could be determined in a
general rate proceeding. Idaho Power now requests a return to Rider account treatment to provide
expedited recovery of the expenses. The Company proposes to transfer a projected regulatory asset
balance of $ 14,706 ,829 to the Rider account effective June I ,2013. This amount includes
payments made between January l,20ll and June 1,2013 with an accrued carrying charge equal
to l%o, the current customer deposit rate. For Custom Efficiency incentive payments made after
June I ,2013, the Company requests 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."
Application, p. 5.
STAFF COMMENTS MAY 22,2013
RAMIFICATIONS TO THE RIDER BALANCE
Currently, the Rider is a regulatory liability with a projected balance of $8,481,610 by
June I ,2013. (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.) With the proposed accounting treatment, the
Rider would reflect a regulatory asset balance of $6,35 3,057 by the end of June 2013, However, the
Company forecasts the Rider will return to a regulatory liability of $ I ,l4l ,102 by August 2014,
growing to $13,708,946by the end of December 2015. The forecast includes expenses cunently
funded through the Rider.
The Company does not request modification to the Rider funding level. Staff believes this
position is reasonable. The Rider balance understandably fluctuates over time. With the proposed
accounting treatment, the Rider vacillates from a (current) regulatory liability to a regulatory asset
for about one year before it likely returns to a regulatory liability.
Staff support of the proposed accounting treatment does not imply a prudency determination
of the 2012 Custom Efficiency incentive expenditures. As with all demand-side management
(DSM) programs, Staff will review the Company's 2012 DSM expenses during the annual DSM
prudency determination l.
STAFF RECOMMENDATION
Staff recommends the Commission approve the Company's accounting request and
authorize transfer of the Custom Efficiency regulatory asset account to the Rider account with a l%
accrued carrying charge. Staff also recommends the collection of future incentive payments be
returned to the Rider effective June I ,2013.
Weldon B. Stutzman
Deputy Attorney General
I
Respectfully submitted this 'D/1r' day of May 2013.
Technical Staff: Nikki Karpavich
Umisc/comments/ipcel3. I lwsnk comments
I Case No. IPC-E-13-08.
STAFF COMMENTS MAY 22,2013
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 22ND DAY OF MAY 2013,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-I3.II, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
LISA D NORDSTROM
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOrSE ID 83707-0070
E-MAIL: [e-mail]
dockets@idahopower. com
MATT LARKIN
GREGORY W SAID
IDAHO POWER COMPANY
PO BOX 70
BOISE rD 83707-0070
E-MAIL: [e-mail]
[e-mail]
CERTIFICATE OF SERVICE