20131030SRA Comments.pdf

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Comments of the Snake River Alliance C
In the Matter of the Continuation of Idaho Power Company’s A/C CQ.ol Credit,Irrigation
Peak Rewards,and Flex Peak Demand Response Programs for 2014 and Beyohd
SSubmittedby
Ken Miller,Clean Energy Program Director,Snake River Alliance
October 30,2013
The Snake River Alliance appreciates the opportunity to comment in this docket regarding the
Continuation of Idaho Power Company’s A/C Cool Credit,Irrigation Peak Rewards,and flex
Peak Demand Response [DR]Programs for 2014 and Beyond.
The Alliance recommends that the Idaho Public Utilities Commission approves the Settlement
Agreement,and hopes that in so doing,the Commission makes clear its ongoing expectation that
demand response (“DR”)programs remain an important component in Idaho Power’s long-term
plans to meet its approaching capacity requirements.
The Alliance is pleased to have been a party to the Settlement Agreement in this case and we
support Commission approval of the agreement as being in the best interest of Idaho Power
customers.We congratulate not just the parties in this docket,but all stakeholders who
participated in what evolved into a rigorous series of daylong workshops,reflecting the
commitment of all stakeholders to a successful outcome.In our view,the workshops and other
meetings associated with this agreement reflect a spirit of cooperation not always seen in utility
cases,and we commend all participants for their willingness to seek agreement and for their
commitment of time needed to reach this Settlement.We were particularly pleased with the
extent to which Idaho Power DSM staff and Idaho PUC and Oregon PUC staff participated in
working with parties to reach this agreement,and we believe Commission approval of the
Settlement will bring long-term savings to Idaho Power customers who will benefit from
programs that reduce energy demand while at the same time reducing the need for additional
supply side resources.
Resumption of these important DR programs not only resumes the benefits that they deliver;it
also allows for continued adjustments to the programs over time to ensure that they are providing
the maximum potential demand response while at the same time providing opportunities to Idaho
Power customers who want to “do their share”to reduce the need for new generation.This
agreement also provides Idaho Power with additional flexibility to dispatch its DR programs
with a reduced lead time,making them even more valuable.
The Snake River Alliance also participated in Case No.IPC-E-12-29,the precursor to this case.
While we were disappointed in the resolution of IPC-E-1 2-29,we participated in the discussions
that resulted in the creation ofthis case and concur that,given the circumstances confronting the
Commission in both cases,this is a good outcome.As a party to IPC-E-12-29,we suggested that
the Flex Peak demand response program be added to the present case so all demand response
programs could be considered as Idaho Power and its stakeholders decide how to move forward
and reconstitute all of its DR programs.
The importance of Idaho Power’s DR programs cannot be overstated.The Alliance is a strong
believer in the value of electric utility demand-side management programs,and in this case we
strongly supported maintaining a robust demand response regime that can benefit utilities and
their customers in helping to avoid or defer the need for new peaking resources.We were
disappointed that Idaho Power determined the best course of action for the 2013 DR season was
to suspend both the A/C Cool Credit and Irrigation Peak Rewards programs,particularly given
that the reason for the suspension ofthese clean energy programs was the introduction of a
330MW natural gas combined-cycle turbine that rendered the DR programs unnecessary —at
least in the opinion of Idaho Power.While the debate over the necessity of the Langley Gulch
plant is long past,we continue to question the wisdom of shutting down a demand response
regime capable of producing 438 MW of peak reduction capacity (Idaho Power IRP at P.40)in
favor of a natural gas resource.In fact,according to information provided during the course of
the development of Idaho Power’s 2013 IRP,significant DR resource potential is not being used,
and from all appearances the reason those resources are not being used for the immediate future
is the arrival of a new thermal supply-side resource.
Langley Gulch may well have future utility,particularly as a firming resource to help integrate
additional clean energy resources,but since it went on-line in 2012,it has had the effect of
supplanting proven DR programs,essentially adding to Idaho Power’s greenhouse gas emissions
while emission-free resources sat idle.During its experience of consecutive peak power demands
in July 2013,Idaho Power issued a news release that said in part:“Idaho Power’s newest
generation resource,the Langley Gulch Power Plant,helped satisfy the record electricity demand
during the triple-digit heat...”It is worth asking whether Langley Gulch would have been given
such credit had Idaho Power’s DR programs been available to dispatch.It is a bit of a stretch to
tell customers that a $400 million gas plant helped save the day by meeting peak loads,when DR
programs presumably could have done the same thing for considerably less had they been
available.We suggest that the Commission ensure that,in the event DR programs are presumed
to be unnecessary at certain times in future years,that they nonetheless be available to be called
upon if necessary.That is,after all,what DR programs are designed for.
But the summer of 2013 is behind the company and its customers and it is now most important to
look forward to how these programs will be implemented in 2014.
If IPC-E-13-14 workshop participants agreed on one thing,it is that DR programs should be
available to all customer classes,and that the programs must not be interrupted from year to year
in the future.We may never know how many DR customers will not return to their programs
once those programs resume in the summer of 2014,but workshop participants agreed there will
certainly be some attrition because many customers do not see the point in voluntarily
participating in a program that was administrated in an erratic fashion as in this case,active one
year and dormant the next.Workshop participants agreed that continuity in these programs is
important,and that is one reason the Alliance supported the negligible incentives paid to
customers in 2013 —in hopes of reducing the number of A/C Cool Credit participants who might
permanently abandon the program.
The Alliance also believes that the Commission should take note of the significant investments
Idaho Power customers have made in the infrastructure required to support the shuttered DR
programs.The physical assets —including those required to cycle the devices required for
cycling —remain deployed across Idaho Power’s service territory despite the fact they are not
being used.To continue to let them remain idle would be a tremendous waste of utility customer
investments.
The Alliance would have preferred that the duration of Idaho Power’s DR programs had not been
reduced from three months to two,as is proposed in the Settlement Agreement.We also would
have preferred that the incentive payments remained where they were.The programs were
deemed cost-effective before Idaho Power decided to suspend them,so trying to reduce Idaho
Power’s costs by cutting costs of its carbon-free DSM programs while simultaneously pouring
customer dollars into its carbon-emitting generators in the face of an unknown regulatory climate
strikes us as an upside-down use of utility assets and customer dollars.It also sends a confused
message to Idaho Power’s customers.And while we agreed to conditions that appear to reduce
the recruitment of new participants into the A/C Cool Credit program,we encourage the
Commission in its order to ensure that such limitations are not memorialized for an undetermined
amount of time.We would be concerned if all residential customers are not allowed to
participate in a program that appears to be popular and has the potential for such positive demand
response results.
It is notable that Idaho Power’s 2013 Integrated Resource Plan anticipates relying on DR
programs for a large proportion of its projected load growth through 2032.For that to occur,
Idaho Power must redouble its efforts to expand its DR programs rather than restricting them
whenever it adds a thermal resource to its supply-side fleet.The Alliance believes it was the
sense of most workshop participants that Idaho Power’s DR program continues to expand rather
than be stifled due to an excess of supply-side resources.Inasmuch as Idaho Power expects
capacity deficits by or around 2016,it is important to not only maintain these proven DR
programs,but also to ensure others will be in place in order to meet capacity deficits as projected
in the 2013 IRP.
Again,the Alliance appreciates the opportunity to submit these comments as the Commission
deliberates case No.IPC-E-13-14,and we appreciate the opportunity to participate in this docket
as a party with our other stakeholders.We believe this process proved effective and constructive,
and we hope that it can be replicated in future cases in which the Commission determines
stakeholders can attempt to resolve their differences.
Respectfully submitted,
-c-
Ken Miller
Clean Energy Program Director
Snake River Alliance
P.O.Box 1731
Boise,ID 83701
[phone] (o)
[phone] (c)
[e-mail]
www.snakeriveralliance.org