20140317D. Nemnich DI.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY EOR A
DETERMINATION OF 2O].3 DEMAND-
SIDE MANAGEMENT (*DSM") EXPENSES
AS PRUDENTLY INCURRED.
CASE NO. IPC-E-14_04
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
DARLENE NEMNICH
1
2
3
4
5
6
7
I
9
10
11
t2
13
L4
15
16
77
18
19
20
21,
22
23
24
25
O. Please state your name and busj-ness address.
A. My name is Darlene Nemni-ch. My business
address is 1227 West Idaho Street, Boise, Idaho 83102.
O. By whom are you employed and in what capacity?
A. I am employed by Idaho Power Company ("Idaho
Power" or "Company") as a Senior Regulatory Analyst.
O. Pl-ease describe your educational background.
A. In May of L979, T received a Bachelor of Arts
degree in Business Administration with emphases in Einance
and Economics from the CoIIege of Idaho in Ca1dwel1, fdaho.
In addition, I have attended the electric utility
ratemaking course offered through New Mexico State
University's Center for Public Utilities, the Edison
Electric Institute's E1ectric Rate Advanced Course, ds weII
as varj-ous other ratemaking courses.
o.Pl-ease describe your work experJ-ence with
Idaho Power.
A. In 1982, T was hired as an analyst in the
Resource Planning Department. My primary duties were the
calculation of avoided costs for cogeneration and sma1l
power production contracts and the calculation of costs of
future generation resource options. In 1989, I moved to
the Energy Services Department where I performed economic,
financial, and statisti-cal- anal-yses to determine the cost-
effectiveness of demand-side management ("DSM") programs.
NEMNICH, D] 1
Idaho Power Company
1
2
3
4
5
6
1
U
9
10
11
72
13
74
15
16
L7
18
19
20
2L
22
23
24
25
In 2000, I was promoted to Energy Efficiency Coordinator.
In that capacity, I coordinated the Company's efforts to
grow customer programs and promote education j-n energy
efficiency. I was responsible for complying with
regulatory and financial requirements in the area of energy
efficiency. In 2003, I was promoted to Energy Efficiency
Leader where I managed the Company's DSM efforts, including
strategic planning, design and development of programs,
regulatory compliance, and overall management of the
department. In 2006, I l-eft the Company to pursue personal
opportunities. In 2008, I returned to the Company to my
current positlon as a Senior Regulatory Analyst in the
Regulatory Affairs Department. My duties as Senior
Regulatory Analyst include the development of al-ternative
pricing structures, analysis of the impact on customers of
rate design changes, and the administration of the
Company's tariffs.
O. What is the purpose of your testimony in this
matter?
A. The purpose of my testimony is to present the
Company's request for a determination that $25,957,486 of
DSM expenses incurred in 201,3 for the acquisition of
demand-side resources were prudently incurred. This amount
incl-udes $27,1 48,331 funded by the Idaho Energy Efficiency
Rider ("Rider") and $4,203,155 of demand response program
NEMNICH, Df 2
fdaho Power Company
1
2
3
4
5
6
7
8
9
10
11
t2
13
74
15
t6
L1
18
19
20
2L
22
23
24
25
incentive payments that will be included in the April 15,
2014, Power Cost Adjustment ("PCA") filing. My testimony
will provide a background of recent ldaho Power DSM
prudence and funding cases, review 20L3 DSM program
performance, discuss 2073 DSM expenses and adjustments,
revj-ew cost-effectiveness and evaluation, and summarLze how
this filing satisfies the Memorandum of Understanding for
Prudency Determination of DSM Expenditures filed in Case
No. IPC-E-09-09 (*DSM MOU").
I. BACKGROT'IID
o.Please provide a brief history of cases since
2002 after the Rider was established where the Idaho Public
Util-ities Commj-ssj-on ("Commission") has made a prudence
determinat j-on regardj-ng the Company' s DSM expenses.
A.This is Tdaho Power's sixth request for a
determination of prudence related to DSM expenses since the
Rider was established in 2002. The first fiJ-ing for a
determination of prudence occurred j-n June 2008 as part of
the 2008 general rate case, Case No. IPC-E-O8-10. Idaho
Power requested that the Commj-ssion find that its 2002-2007
DSM expenditures of $29 million were prudently j-ncurred.
The Commj-ssion issued Order Nos. 30740 and 31039 finding
the $29 million in DSM expenditures prudent. As part of
Case No. IPC-E-O9-09, Commission Staff ("Staff"), Idaho
Power, and other investor-owned util-ities operating in
NEMN]CH, DI 3
Idaho Power Company
1
2
3
4
5
6
'7
8
9
10
11
1,2
13
t4
15
!6
t7
18
t9
20
2t
22
23
24
25
26
27
28
29
30
31
32
Idaho worked together to establish an agreed-upon set of
terms for future eval-uati-on and reporting of DSM
expenditures and programs. fn January 2070, the Staff,
Idaho Power, Avista Corporation, and Rocky Mountain Power
signed the DSM MOU. The DSM MOU provides a set of
guidelines for eval-uatj-on and reporting of DSM performance
with the purpose of facil-itating an ob3ective and
transparent assessment of the utilities' DSM efforts. The
DSM MOU statesr oD page 6, item 10:
A showing by the utility that it made
a good faith effort to reasonably
perf orm within these guj-delines will-
constitute prima facie evidence that
the utility's DSM expenses were
prudently incurred for cost recovery
purposes. By its performing withln
these guidelines, assuming there is no
evidence of imprudent actions or
expenses, the utility can reasonably
expect that in the ordinary course of
business Staf f will support ful-1 cost
recovery of its DSM program expenses.
In March 2070, concurrent with the filing of the
Demand-Side Management 2009 Annual- Report (*DSM 2009 Annual
Report"), Idaho Power fil-ed its second request for a
determination of prudence rel-ated to Rider-funded efforts
when it fil-ed Case No. IPC-E-I0-09 for the 2008 and 2009
DSM expenditures of $50.7 mil-l-ion. Idaho Power provided
two supplements to the DSM 2009 Annua1 Report in order to
satisfy the guidelines set forth in the DSM MOU. These
were SuppTement 1: Cost-Effectiveness and SuppTement 2:
NEMN]CH, DI 4
Idaho Power Company
! EvaTuation. On November 76, 2070, the Commission issued
2 Order No. 32113 finding that the 2008 and 2009 DSM
3 expenditures were prudently incurred.
4 On March 15, 2071, Idaho Power filed its third
5 request for a determination of prudence related to Rider-
6 funded efforts in Case No. IPC-E-11-05 for the 2070 DSM
7 expenditures of $42.5 mil-l-ion. This amount, which was
I later modified to $41.9 mil-l-ion due to an accounting
9 adjustment, was found to be prudently incurred by the
10 Commission in Order No. 32331 on August 18, 20LL.
11 On March 15, 2012, Idaho Power filed its fourth
L2 request for a determination of prudence rel-ated to Rider-
13 funded efforts in Case No. IPC-E-12-15 requesting an order
L4 finding that the Company had prudently incurred $42.6
15 mi11ion in DSM expenditures in 2011. On October 22, 20L2,
1,6 the Commission found that the Company prudently incurred
71 $42.5 million in DSM expenditures in 20LL. (Order No.
18 32667 and Reconsideration Order No. 32690.) In these
t9 Orders, the Commission denied recovery of $82,855.50 of A/C
20 CooI Credit program expenses and declined to decide the
2L reasonableness of the Company's increase in Rider-funded
22 labor related expenses of $89,601 included in the 2077 DSM
23 expenses until- Idaho Power provides evidence by which to
24 better assess the reasonabl-eness of these expenses.
25
NEMNICH, DI 5
Idaho Power Company
1
2
3
4
5
6
7
8
9
10
11
L2
13
t4
15
16
71
18
79
20
2L
22
23
24
25
Fina11y, on April 3, 2013, Idaho Power filed Case
No. IPC-E-13-08 requesting an order finding that the
Company had prudently incurred $46.4 mil1ion in DSM
expenditures in 2073. In Order No. 32953, issued on
December 20, 20\3, the Commission found that the Company
prudently j-ncurred $46.7 million in DSM expenditures in
201,1,. fn this Order, the Commission decllned to decide the
reasonableness of the Company's increase in Rider-funded
l-abor related expenses of $89,601 included in the 2011- DSM
expenses and $173,811- included in the 2072 DSM expenses.
o.Please revj-ew recent regulatory orders
regarding treatment of Custom Efficiency program incentive
palrments.
A.On May 11, 2011, the Commissj-on issued Order
No. 32245 authorizing Idaho Power to account for Custom
Efficiency program incentive payments as a regulatory asset
beginning January L, 20LI. On October 31, 20L2, Idaho
Power filed Case No. IPC-E-I2-24 requesting authority to
begin recovery of that regulatory asset plus the Company's
authorized rate of return over a four-year amortization
period. The Commission denied Idaho Power's request 1n
Order No. 32766 stating the Commission's opinion that a
general rate case is the appropri-ate proceeding to address
recovery of this regulatory asset. On April 15, 201,3,
Idaho Power filed an application wlth the Commission in
NEMNICH, DI 6
Idaho Power Company
1
2
3
4
5
6
1
8
9
10
11
72
13
74
15
t6
77
18
79
20
2L
22
23
24
25
Case No. IPC-E-13-11 for authorization to revert recovery
of the accumulated Custom Efficiency program incentive
palrments through May 31, 20L3, and future program incentive
payments back through the Rider. The Commission approved
this request in Order No. 32826 and in June 2013, Idaho
Power made an accounting entry to move $74,200,174 out of
the regulatory asset account and back into the Rider
account.
II. 2OL3 DSM PROGRJAM PERFORIIATICE
O. P1ease provide an overview of Idaho Power's
DSM efforts in 2013.
A. In 20L3, on a system-wide basis, Idaho Power
offered customers 1B energy effj-ciency programs or pilots
and one demand response program, participated in market
transformation programs through the Northwest Energy
Efficiency Alliance ("NEEA"), and offered several ongoing
education initiatives and studies. Per Commission Order
No. 32116, two of Idaho Power's demand response programs
(A/C Cool- Credit and Irrigation Peak Rewards) were
temporarily suspended. This suspension was due to a lack
of need as identified in the Company's 2013 Integrated
Resource PIan (*IRP") . A summary of Idaho Power's 2013 DSM
activities is provided in Table 1 below.
NEMNICH, D] 1
Idaho Power Company
1
2
TalrJ.e 1. 2OL3 DSM, Sectors, Progrlns, Operational T1pe,
and Energy Savings/Oenand Reduction
Program by Sector Operational Tlpe
Savings/Demand
State Reduction
Residential
A/C Cool Credit
Ductfess Heat Pump Pilot
Energy Efficient Lighting
Energy House Ca1ls
ENERGY STAR3 Homes Northwest ....
Heating & Cooling Effj-ciency
Program
Home Energy Audit
Home Improvement Program
Home Products Program. . .
Oregon Residentlaf
We athe ri z ation
Rebate Advantage
Residential Economizer .
Residential Energy Efflciency
Educati-on rnitiative
See ya fater, refrigeratortt.....
Shade Tree Project ..
Weatherlzation Assistance for
Qualified Customers
Weatherizatlon Sofutions for
Elj-gib1e Customers
Commercial / Indus trial
Building Efficiency
Commercial Education lnitiative.
Custom Efficiency
Easy Upgrades.
FfexPeak Management ....
Oregon Commercial Audj-ts
Irrigation
Irrigation Efficlency Rewards .. .
Irrigation Peak Rewards ...
A11 Sectors
Northwest Energy Efficiency
Al- f iance
Demand Response
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficj-ency
Energy Efficiency
Other Programs and
Activi-ties
Energy Efficj-ency
Energy Efficiency
Energy Efficj-ency
Energy Effici-ency
Other Programs and
Activities
Other Programs and
Activi-ties
Energy Efficiency
Other Programs andActivities
Enerqy Efficiency
Energy Efficiency
Energy Efficiency
Other Programs and
Activities
Energy Efficiency
Energy Efficiency
Demand Response
Other Programs andActivities
Energy Efficiency
Demand Response
Market
Transformation
I D/OR
] D/OR
1 D/OR
I D/OR
I D/OR
I D/OR
ID
]D
I D/OR
OR
I D/OR
ID
I D,/OR
I D/OR
1D
I D/OR
ID
I D/OR
I D/OR
I D/OR
I D/OR
IDlOR
OR
I D/OR
IDlOR
] D/OR
suspended
589 MV{h
9,996 MWh
837 MWh
365 MWh
1,004 MWh
n/a
616 MWh
886 MWh
15 MWh
270 MWh
^/a
n/a
1-, 442 ywh
n/a
682 MWh
303 Mhrh
10,989 MWh
n/a
21,370 MWh
27,062 Wtth
48 MW
n/a
18,511 MWh
suspended
18, 346 MWh
NEMNICH, DI B
Idaho Power Company
1 Table 1 illustrates the broad availability of programs
2 offered by Idaho Power to its customers in energy
3 efficiency, demand response, and education. The Demand-
4 Side Management 2013 Annual Report (*DSM 2073 Annual
5 ReporL"), Attachment 1 to the Application fil-ed in thls
6 proceedlng, provides details for each progru., including a
7 description of each program, 20L3 performance and
8 activities, cost-effectiveness, customer satisfaction, and
9 evaluation resul-ts. In addition, the DSM 2013 Annual
10 Report provides Idaho Power's DSM strategies for 2014.
11 O. What level of incremental- annual- energy
1,2 efficiency savings was achieved in 20L3 with energy
13 efficiency programs?
74 A. On a system-wide basis, Idaho Power achj-eved
15 1,01,284 megawatt-hours ("MWh") of incremental annual energy
1,6 efficiency savings in 201-3. This val-ue includes energy
77 effj-ciency market transformation savings through NEEA
18 initiatives. Table 2 below shows the incremental annual
19 energy efficiency savJ-ngs in MWh from 2002 to the current
20 year.
2t
22
23
24
25
NEMNICH, DI 9
Idaho Power Company
2
3
4
5
6
7
I
9
10
11
t2
13
l4
15
16
TalrJ.e 2. Annual Energy Savings , 2OO2-2OL3 (MfNh)
250,000 I Market Transformation (NEEA) (MWh)
: ldaho Power Program Savings (MWh)
200,000
150,000
100,000
50,000
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Note: 2013 NEEA market-transformation savj-ngs are preliminary.
O. Why is the incremental- annual- energy savings
for 201,3 fower than the incremental annual energy savings
for 2012?
A. There are severa] reasons for this reduction.
In 2073 there were some large industrial- projects in the
Custom Efficiency program that were being worked on but
were not completed durj-ng the year. Idaho Power does not
count the energy efficiency savi-ngs for a project until it
is complete. Alsor ds buildings and appliances become more
effj-cient and building codes become more strict, there is a
general movement to lower savings estimates by the Regional
Technical Eorum (*RTF") on a regional basis. Idaho Power
utilizes deemed savings estimates from the RTF for many of
NEMNTCH, Dr 10
Idaho Power Company
t_
2
3
4
5
6
7
I
9
10
11
its programs. Eor a more detailed discussion on this
please refer to page 10 of the DSM 201-3 Annual Report.
O. What level- of demand reduction capacity
availabl-e from Idaho Power's demand response programs
2073?
topic
was
in
A.Idaho Power's single demand response program
operating in 2013 (FlexPeak Management program) provided a
peak demand reduction capacity of 48 megawatts ("MW").
Table 3 below shows the annual peak demand reduction
capacity in MW s j-nce 2004.
TaIrIe 3. Peak Demand Reduction Capacity, 2OO4-2OL3 (MW)
*fn 2013,
suspended.
500
450
e 4oo
E 3so
GCLI 3oo
E€ zso
E 2oo
l,E rso
Eoo 100I6oo- 50
o
214
ii il
2006 2007 2008 2009
hree demand response prog
43. _I200d. 2005
,o of the t
t2
13t4
15
76
L7
18
t9
o.
l-ower than
A.
Cool Credit
Why is
in 201,2?
As per
program
the demand reduction capacity for 2073
Commission Order No. 32776, the A/C
and the Irrigation Peak Rewards program
NEMNICH, DI 11
Idaho Power Company
I
2
3
4
5
6
7
8
9
10
11
72
13
L4
15
L6
L7
18
19
20
2L
22
23
24
25
were temporarily suspended during the summer of 201,3 whil-e
Idaho Power worked with stakeholders to determine the
future design of the programs. Therefore, flo peak demand
reduction capacity was available from those programs. The
stakeholder workshop process resulted in program designs
that better aligned with the current and future resource
needs identified in the 20L3 IRP and a1l- three demand
response programs being operat j-ona1 in 201,4.
o.Please describe the opportunities for externa1
parties to provide input and guldance to Idaho Power's DSM
efforts.
A.In 2002, Idaho Power created the Energy
Effj-ciency Advisory Group ("EEAG") to provide a forum to
gather ideas and suggestions from customers and special
interest representatives on formulating and implementing
DSM programs. Members incl-ude customer representatives
from residential, irrigation, commercial, and industrial
sectors, os wel-l as representatives for senior citizens,
Iimited-income individuals, environmental organizations,
state agencies, the Idaho PubIic Utilities Commission, the
Public Utility Commission of Oregon, and Idaho Power. In
20L3, the EEAG met four times. During these meetings,
Idaho Power discussed and requested recommendations on a
broad range of DSM issues. The minutes from the 201,3 EEAG
NEMNICH, DI L2
Idaho Power Company
1
2
3
4
5
6
'7
8
9
10
11
t2
13
t4
15
L6
77
18
t9
20
27
22
23
24
25
meetings are
( "Supplement
included in SuppTement 2: Eval-uations
2") to the DSM 2013 Annual- Report.
Please describe the on-going effort Idahoo.
Power has
A.
taken to improve the operation of the EEAG.
In response to concerns raj-sed by Staff in
Case No. IPC-E-L2-75, and Commission direction in Order
Nos. 32667 and 32953, Idaho Power has, in the l-ast two
years, implemented a number of changes designed to j-mprove
the way the EEAG operates and to increase opportunj-ties for
members and other meeting attendees to provide advice to
Idaho Power. Idaho Power engaged EEAG members and meeting
attendees in an interactive session in the July 19, 2012,
EEAG meeting to explore how best to improve how the EEAG
operates. The input received centered around two general
areas: how to improve the structure of the meetings and
how to improve the content of the meetings. Idaho Power
and the EEAG have made several changes to the way the EEAG
operates and the Company bel-ieves that these changes are
producing resul-ts. The EEAG members have recognized that
Idaho Power is providing more information on current and
future issues. For a more detailed discussion on this
improvement process as well as the history, purpose, and
value of the EEAG please see Report on the Energy
Efficiency Advisory Group, filed February 18, 2014, in
compliance to Order No. 32953 in Case No. IPC-E-13-08.
NEMNTCH, Dr 13
ldaho Power Company
1
2
3
4
5
6
7
o
9
10
11
L2
13
74
15
t6
t1
18
19
20
2L
22
23
24
25
The EEAG provides val-ue to Idaho Power by imparting
guidance and advi-ce, and bringing different perspectives to
the Company regardj-ng j-ts energy efficiency and demand
response efforts. Idaho Power appreciates the time and
effort that its EEAG members contribute to its DSM efforts.
O.Were there additional opportunlties for
external parties to provide input and guidance to Idaho
Power's DSM efforts during 2013?
A.Yes. In the sunrmer of 2073, Idaho Power
hosted a series of five pubJ-ic workshops to determine
strategies for the continuation of Idaho Power's three
demand response programs for 2014 and beyond.
Approximately 60 individuals from 21 organizations and two
individual customers participated in the workshops,
including staff members from both the Idaho Commission and
the Oregon Commissi-on. These workshops were col-Iaborative
in nature and resulted
Commission approved in
the guidelines for the
the future.
O. What amount of 20L3
Company requesting the Commi-ssion
incurred?
in a settlement agreement that the
Order No. 32923, which sets forth
continuation of these programs into
III. 2OL3 DSM EXPENSES AI{D ADdTST!,IENTS
DSM expenses is the
find were prudently
NEMNICH, DI L4
Idaho Power Company
1
2
3
4
5
6
7
I
9
10
1t-
12
13
t4
15
16
t1
18
t9
20
2L
22
23
24
25
A.In the delivery of energy efficiency, demand
response, and market transformation programs as wel-I as
education and administrative costs, Idaho Power expended
$27,148,331 of Rlder funds and $4,203,155 of demand
response program incentive and continuity payments for a
total of $25,95Lt486 spent on demand-side resource
acquisition in 201,3. To arrive at an amount for prudence
determj-nation, these numbers incl-ude adjustments from
current and prior years as described l-ater in my testimony.
Idaho Power requests that the 2073 Rider-funded DSM
expenses and the 2073 demand response program incentive and
continuity payments recovered through the PCA be reviewed
together for a prudence determination. With this filing,
Idaho Power requests the Commission issue an order finding
that these funds were prudently incurred. Exhibit No. L,
2073 ldaho DSM Expenses and Adjustments for Prudence
FiTing, shows a breakout of these expenses by program and
customer sector and by funding source. Eor clarity and
ease of understanding in the development of Exhibit No. 7,
I started with Appendix
source (dol-fars) , which
2013 Annual- Report.
20L3 DSM expenses by funding
found on page 742 of the DSM
O. Please compare the dollar amounts in Exhibit
No. 1 with Appendix 2 of the DSM 2013 Annual- Report.
NEMNICH, DI 15
fdaho Power Company
2.
is
1 A. The first col-umn of Appendtx 2 labeled "fdaho
2 Rider" and the first column of Exhibit No. 1 labeled "Rider
3 Expenses" match at the row 1abeled "Grand Total" in the
4 amount of $34,468,1-23. The other columns in Exhibit No. 1
5 detail the demand response program incentive and continuity
6 payments and the Total Expenses. AlI values in Exhibit No.
1 7 represent DSM charges for the Idaho service area on1y.
8 Adjustments to these totals are needed to accurately arrive
9 at the total- 2013 expenses for purposes of the prudence
10 determination. There are five categories of adjustments:
11 (1) transfer of 2077 and 20!2 Custom Efficiency program
L2 incentive amounts, (2) Rider-funded l-abor related expense
13 increases, (3) 20L2 A/C Cool Credit program switch prudence
14 request, (4) prior year-end accounting adjustments, and (5)
15 current year-end accounting adjustment. To further aid in
16 explaining the adjustments, in my Exhibit No. l, I have
77 broken out the amounts in the row titl-ed "Special
18 Accounting Entries" and added a section at the bottom of
19 the tab1e titled *Adiustments."
20 O. Pl-ease explain the detailing of the row titled
2t "Special Accounting Entries."
22 A. In Appendix 2, the Special Accounting Entries
23 row of the Idaho Rider co]umn totals $13,838,1,99. Eor
24 clarity, I have broken this number into three different
25 expense categories in my Exhibit No. 1. f have done this
NEMNICH, DI L6
Idaho Power Company
1
2
3
4
5
6
7
B
9
10
11
72
13
14
15
t6
L7
18
19
20
21
22
23
24
25
in order to detail the transfer of Custom Efficiency
incentives and removal of Rider-funded labor increases.
o.Pl-ease discuss the flrst category of
adjustments - the transfer of Custom Efficiency incentives.
A.As a result of Order No. 32826 in Case No.
IPC-E-11-13, Idaho Power transferred $L4,200,174 of Custom
Efficiency incentive payments from a regulatory asset
account to the Rider account. This transfer is shown in
Exhibit No. 1, under Special Accounting Entries, the row
titled "Transfer of Custom Efflciency Regulatory Asset
Account." However, most of this amount had already been
deemed prudently incurred in Order Nos. 32667 ($7,018,385
f or 20lt ) and 32953 ($ 6, 01,9 , 709 f or 201,2) . Theref ore, even
though these dollars were transferred into the Rider
account in 201,3 they are removed from this prudence
request. This is shown in Exhibit No. 1 in the first
rows under Adjustments. The $14,200,714 also included
$966,31-9 of Custom Efficiency incentive payments for
program activity from January 1 through May 31, 2013,
accrued carrying charges. These amounts are included
the total amount for which Idaho Power is requesting a
prudence determination.
two
and
in
o.In this filing, did fdaho Power include the
increases j-n 20ll-2013 Rider-funded labor related expense
for a prudence determination?
NEMNICH, DI t7
Idaho Power Company
1
2
3
4
5
6
"t
I
9
10
11
72
13
L4
15
16
71
18
L9
20
2L
22
23
24
25
A.No. In Order Nos. 32661, 32690, and 32953,
the Commission decl-ined to decide the prudence of the
in.crease in 20Ll and 201,2 Rider-funded labor related
expenses, while at the same time offering the Company
another opportunity to provj-de sufficient evidence at a
future time, preferably revisiting this issue in the next
general rate case. Order 32953 at 8. Because of the
Commission's decisj-ons in these three Orders, Idaho Power
is not asking for a prudence determination in this filing
for the increase in Rider-funded labor related expenses
that occurred in 20LL, 20L2, and 2013.
O. Please quantj-fy the increase in 2073 Rider-
funded labor rel-ated expenses based upon 20L0 labor rates.
A. The increase in Rider-funded labor related
expenses based upon 20L0 labor rates included in the 20L3
DSM expenses is $269,432.
O. Pl-ease explain the methodology used by Idaho
Power to arrive at this amount.
A. Please refer to Tabl-e 4 below where the
increase in 2013 Rider-funded labor related expenses based
upon 2070 labor rates has been quantified. Idaho Power is
using the same methodology to quantify the increase in 20L3
Rider-funded labor related expenses that was previously
adopted by the Commission for use in 2011 and 20L2. The
total- annual Rider-funded labor related expense is shown in
NEMNICH, DI 18
Idaho Power Company
1
2
3
4
q
6
7
8
9
10
11
72
13
L4
15
16
t1
1-8
L9
20
21
22
23
24
25
column 1 and an estimate of the total number of Rider-
funded full-time equivalent employees ("ETE") is shown in
col-umn 2 for each year from 20L0 to 201,3. These estimated
ETE values are based on total- hours charged to the Rider,
divided by a full-time employee equivalent of 7,912 hours
per year. Annual ETE numbers vary due to a number of
reasons, including unfilled positions or number of hours
charged to the Rider by employees. In order to calculate
the average labor expense per FTE for 201,0, column 1 is
divided by column 2 and the resul-t is shown in cofumn 3.
This average l-abor expense per FTE of $96,520 is used as
the basis for this analysis because it was the average
labor expense per FTE from 2070 when al-l- Rider-funded labor
costs were l-ast deemed prudent by the Commission. Column 4
shows the 2017 through 2013 "deemed prudent" total- l-abor
expense calcul-ated by multiplying the yearly FTE va1ues in
column 2 by the 2070 average labor expense per FTE value of
$96,520. In col-umn 5, the actual total l-abor expenses in
column 1 is compared to the "deemed prudent" total- Iabor
expense in column 4, resulting in the cal-culation of the
change in Rider-funded l-abor rel-ated expenses for 20!\,
2012, and 2013.
NEMNTCH, Dr 19
Idaho Power Company
2
3
4
5
6
7
I
9
10
11
T2
13
74
15
16
77
18
L9
Tab1e 4
o.Please describe the second category of
adjustments - the Rider-funded labor increase related
adjustments on Exhibit No. 1.
A. In Exhibit No. l- under Special Accounting
Entri-es in the row l-abeled "Removal- of 20ll-20L3 Rider-
funded Labor Increases, " the Company excluded all- the
Rider-funded l-abor related increases from the Rider account
for the three years 2071-20L3. The total cumul-ative three-
year removal of labor j-ncreases was $532,844. The
cal-cul-ation of this number is shown above in Tabl-e 4. This
accounting adjustment removed the 20LL-20L3 increase in
Rider-funded labor related expenses from the amount for
prudence determination in this filing. However, a second
accounting adjustment is needed concerning the increase in
labor amounts. Because the 20lL and 201,2 increases in
Rider-funded labor related expenses were already removed
from the Rider account in 20L3 (as per Order No. 32953) , it
is necessary to add these amounts back in to determine the
NEMNICH, DI 20
Idaho Power Company
Co].umn
2010
2OLL
20L2
20L3
TotaI
1
Total-
Labor
$2,51 7, 080
$2,631,729
$2,885,988
$2 ,'l 61 , 445
3
2070 $/rru
$96,520
$96,520
$96,520
$96,520
4
Column 2
times
2070 $/me
$2,548,728
$2,7L3,777
$2, 498, 013
5
Column 1
minus
Column 4
$89,601
$ 17 3, 811
$269,432
$532,844
2
FTE
26.10
26.40
28 .1,1,
25 .88
I
2
3
4
5
6
1
B
9
10
11
t2
13
L4
15
1,6
L7
18
t9
20
2t
22
23
24
25
actual amount of Rider expenses in 20\3. I show this
second adjustment in Exhibit No. 1 under Adjustments i-n the
row labeled *2011 & 2072 Rider-funded Labor Increases
Transferred from Rider in 2013.' The 2071 ($89,601) and
201,2 ($173,811) amounts, for a total of $263,472, are added
back into this prudence request to avoid a doubl-e removal
of these amounts.
O. Please explain the third category of
adjustments - the 2012 A/C Cool Credit program switch
prudence request.
A.In December 2072, when the Company petitioned
the Commission to temporarily suspend the A/C Cool- Credit
program, the Company issued a letter to the switch
installation vendor to halt the instal-lation of swi-tches.
There were 481 switches that were installed at a cost of
$32,090 after the Company j-ssued the l-etter to halt the
instal-l-ation. Last year, in Case No. IPC-E-13-08, Idaho
Power did not request a prudence determination on this
amount and proposed to set asi-de this amount for future
prudence review. The A/C Cool Credit program has been
redesigned and is no longer suspended as per Order No.
32923 and wiII be operational this summer. The 481
switches (the cost of which had been removed from last
year's prudence request) will now provide value to the
program and should be deemed a prudent expense. Therefore,
NEMNICH, DI 27
Idaho Power Company
1
2
3
4
5
6
1
I
9
10
t_1
L2
13
74
15
76
71
18
19
20
2L
22
23
24
25
26
27
the $32,090 is added into the amount for a prudence
determination as shown i-n the row label-ed "2012 A/C Cool-
Credit Program Switch Install-ation Expense" under the
Adjustments section of Exhibit No. 1.
O.
adjustments -
Please describe the fourth category of
prior year-end accounting adjustments.
In last year's prudence filing, Case No. IPC-A.
E-13-08, Idaho Power proposed certain adjustments of 2012
expenses that reduced the amount requested for a prudence
determination. In Order No. 32953, the Commission approved
a prudence amount that incl-uded those specific adjustments.
These Rider expenses occurred in 2072 but were removed from
the Rider account via an accounting entry made in 20L3. In
order to arrive at actua1 total program expenses for 207
these amounts are added back into this prudence request
avoi-d a double removal of these amounts.
These items are shown in the Adjustments section of
Exhibit No. 1 in the row labeled "Prior Year-end Accounting
Adjustments. " They include:
3,
to
Total- $27,952
The explanation of these corrections is detailed in pages
12-1,8 of my direct testimony in last year's prudence
filing, Case No. IPC-E-13-08.
. Energy House Cal-1s Correction
o ENERGY STAR'Homes Adjustment
o Misc. Accounting Corrections
$17, 113
$ 4, ooo
$ 839
NEMNICH, DI 22
Idaho Power Company
1
2
3
4
5
6
7
I
9
10
11
t2
13
t4
15
1,6
77
18
t9
20
2L
22
23
24
25
0. Please explain the fifth and last category of
adjustments - current year-end accounting adjustment.
A. I found a smal-l- accounting error that occurred
in 2013 that should be included as an adjustment in this
filing.
0. Please describe the accounting error.
A. The Home Energy Audit program currently
operates only in Idaho. A l-abor charge of $248 for the
Home Energy Audit program was initially allocated to DSM
expenses in the Oregon jurisdiction. Upon further review,
it was determined that this charge shoul-d have been charged
to the Idaho jurlsdiction. This adjustment moves $248 into
the Idaho Rider account and increases the total- amount of
the prudence determj-nation request. This is shown in the
Adjustment section of Exhibit No. I under "Current Year-end
Accounting Adjustment, Home Energy Audit Program
Correction. "
O. Please summarize the impact of al-I the
adjustments described above to the two different funding
accounts.
A. As shown in Exhlbit No. 1, these adjustments
bring the total Rider-funded expenses to i2\,748,331. The
demand response program incentive payment amount had no
adjustment and remains at $4,203,155. The total- of these
two amounts j-s $25,957, 486.
NEMNTCH, Dr 23
Idaho Power Company
I
2
3
4
5
6
7
8
9
10
11
L2
13
L4
l_5
L6
T7
18
19
20
2t
22
23
24
25
IV. 2013 PROGRAI{ COST.EFFECTI\IEIIESS OVERVIEW
0. hlhat is Idaho Power's overal-l- goal when it
comes to DSM cost-effectiveness tests?
A.Idaho Power's goal is to have all programs
achieve benefit/cost ratios of 1.0 or greater for the total
resource cost test (*TRC"), utility cost test (*UCT"), and
the participant cost test (*PCT"). Each of the tests
provides information about the I-mpacts of DSM programs from
distinct perspectj-ves. The TRC looks at benefits and costs
from the perspective of all utility customers (participants
and non-participants) in the utility service area, the UCT
cal-culates costs and benefits from Idaho Power's
perspective, and the PCT looks at the average participating
customer's costs and benefits. Because of the value in
comparing demand-side resources to supply-side resources,
Idaho Power has placed emphasis on the TRC and UCT. Idaho
Power reviews the cost-effectiveness resul-ts for each
program on an annual basis to determine whether the program
should continue or be modified in some way to ensure its
ongoing cost-effectiveness. The cost-effective test
methodol-ogies and assumptions are described in more detail
in the first pages of SuppTement 1: Cost-Effectiveness
("Supplement L") that is contained in Attachment No. 1 to
the Application in this proceeding.
NEMNTCH, Dr 24
Idaho Power Company
1
2
3
4
5
6
1
I
9
10
11
72
13
L4
15
L6
L1
18
t9
20
27
22
23
24
25
a. What were the results of the 2013 cost-
effectlve analyses?
A.Exhibit No. 2, 2013 Cost-Effectirzeness Summary
by Program, shows the resul-ts of the UCT, TRC, and PCT for
every energy efficiency and demand response program offered
in the Idaho jurisdictlon. These results show that, using
2073 DSM costs and benefits, of the 15 energy efficiency
programs for which the Company claims savings, eleven
programs had benefit/cost ratios greater than 1.0 for both
the TRC and UCT. Two programs had benefit/cost ratios less
than 1.0 for both the TRC and UCT. And two other programs
had benefit/cost ratios less than 1.0 for the TRC but
greater than 1.0 for the UCT. One program did not pass the
DTT rF
As shown in Exhibit No. 2, two of the demand
response programs, A/C Cool- Credit and Irrigation Peak
Rewards, were suspended in 2073, resultj-ng in no
benefit/cost analyses being performed. Idaho Powerr ds
authorized in Order No. 32716, provided contj-nuity payments
to participants and incurred costs to maintaj-n program
infrastructure. The cost-effectiveness calculation for the
FlexPeak Management program shows benefit/cost ratios
greater than 1.0 from the TRC and the UCT perspective when
eva1uated from a fj-ve-year Iife cycle perspective. For
prudence determination purposes, Idaho Power has
NEMNICH, DI 25
Idaho Power Company
1
2
3
4
5
6
1
8
9
10
11
72
13
L4
15
76
t7
18
19
20
2t
22
23
24
25
historically focused on the one-year benefit/cost ratios
for energy efficiency programs and the longer term
benefj-t/cost ratios for demand response programs.
For energy efficlency programs, Idaho Power al-so
provides calculations of the TRC and UCT using costs and
benefits for the program life - from the inception of the
program to the current year. For demand response programs,
Idaho Power also provides benefit/cost cal-culations
reflecting one-year costs and benefits. These calculations
are shown in the program description sections and in
Appendix 4 of the DSM 2013 Annual- Report. The details of
these cal-cul-ations are in Supplement 1. The PCT is not
calcul-ated for any demand response program or where there
are no direct customer costs, and this is reflected as
\\N/A" in Exhibit No. 2.
O. Which programs did not have a benefit/cost
ratio greater than 1.0 in 2013 for neither the TRC nor the
UCT perspective?
A.As shown in Exhibit No. 2, for the second year
in a row, the two programs targeted to limited-income
customers, Vfleatherization Assistance for Qualified
Customers ("WAQC") and Weatherizatlon Solutions for
Eligib1e Customers ("Solutions"), had benefit/cost ratios
below 1.0 for both the UCT and the TRC using 201-3 data.
NEMNICH, DI 26
Idaho Power Company
1
2
3
4
5
6
7
I
9
10
11
72
13
74
15
16
t1
18
19
20
27
22
23
24
25
The PCT is not calcul-ated for these programs because
they impose no direct costs on the participants.
O. Please explain why the WAQC and Sol-utions
programs did not achieve the targeted resul-ts.
A.As was reported in the DSM 2012 Annual Report,
Idaho Power, in early 2073, completed an impact evaluati-on
on these two programs that reported a realization rate for
the WAQC program of 29 percent and a realizatj-on rate for
the Solutions program of 19 percent. Idaho Power has
adjusted the 2072 and 2013 kilowatt-hour ("kwh") savings
values in the cost-effectiveness calculations of the WAQC
and Solutions programs to reflect these realization rates
in the average annual energy savings from the impact
eval-uations. When Idaho Power adjusted the kwh savings to
reflect the impact evaluation findj-ngs, both programs had
benefit/cost rati-os under 1.0 for the TRC and the UCT.
o.What activities has Idaho Power undertaken in
the l-ast year to j-mprove the cost-effectiveness of the WAQC
and Solutions programs?
A.For the 20L3 analyses (as in the 2072
analyses), Idaho Power included in the cost-effective
calculations most of the changes recommended in Commission
Order No. 32788 issued in Case No. GNR-E-12-01, Cost-
effectiveness and Funding of Low Income Weatherization
Programs.
NEMNICH, DI 27
Idaho Power Company
1 After gathering the information from the impact
2 evaluation that was completed in early 2013, Idaho Power
3 al-so administered a process evaluation by Johnson
4 Consulting Group to l-ook at the implementation procedures
5 of both WAQC and So1utlons and obtain reconrmendations for
6 improvements. A literature revj-ew of limited-income non-
7 energy benefits and cost-effectiveness policies used in
8 other jurisdictions was a part of the process evaluation.
9 A full- report of this evaluation is included in Supplement
10 2. In August 201,3, and again in October 20L3, Idaho Power
11 invited the Communi-ty Action Partnership agencies that
72 implement the WAQC program along with contractors that
13 implement the Solutions program to meet and review the
74 program eval-uations and to braj-nstorm ways to make the
15 program more cost-effective. In addition, Idaho Power
L6 participated in a statewide utility partnership meeting
1,7 sponsored by Community Action Partnership Association of
18 Idaho where many of these same ideas to increase cost-
19 effectiveness were discussed.
20 As a result of the formal evaluations completed and
2l the input from the program implementers, Idaho Power has
22 compiled a list of areas of program improvement to pursue
23 with the goal of making the two l-imited-j-ncome programs
24 more cost-ef fecti-ve.
25
NEMNICH, DI 28
Idaho Power Company
1
2
3
4
5
6
'7
8
9
10
11
72
13
14
15
L6
71
18
T9
20
21,
22
23
24
25
Eirst, Idaho Power has begun working to modify the
audit tool, called the EAAt used in the Solutions program.
These modifications are necessary because it is important
to have an audit tool that more accurately estimates
savings for each of the measures in order to know which
measures need to be modified. The first specific model
change was the alignment of measure lives with the
corresponding RTF values for weatherization and heating,
ventilating, and air conditioning measures. Euture
modifications include changing the way the audit tool
models efficiency measures and changing the way the audit
tool- calculates some cost categories and other parameters.
Idaho Power plans to conduct another billing
analysis after these changes are in place to determj-ne
improvement in the accuracy of the model to predict energy
savings. Once it is determined how best to modify the EA4
audit tool to incorporate the desired changes, the EA5
audit tool (which is very similar to the EA4 audit tool and
is used for the WAQC program) could be modified if the
Idaho State Weatherization Assistance program
admj-nistrators agree.
In addition, Idaho Power wil-f work with Staff and
other stakehol-ders to examine if the cost-effective
cal-cul-ation used for l-imited-income programs needs further
NEMNICH, DI 29
Idaho Power Company
1
2
3
4
5
6
7
8
9
10
11
L2
l_3
74
15
16
77
18
19
20
21
22
23
24
25
modification.
benefits.
This includes eval-uating non-energy
O. Has there been an improvement in the
benefit /cosL ratios of the WAQC and Sol-utions programs in
the last year?
A. Yes. Both the TRC and UCT rati-os for the
Solutions program improved slightIy. The TRC improved from
0.41 in 20L2 to 0.53 in 20L3 and the UCT improved from 0.43
to 0.46. Eor the WAQC program, the TRC improved from 0.71
in 2072 to 0.14 in 2073 and the UCT improved from 0.84 in
20L2 to 0.95 in 2013.
O. How is Idaho Power approaching the issue that
the VIAQC and Solutions programs have not been cost-
ef f ecti-ve?
A. Idaho Power continues to work diligently with
program partners, stakehol-ders, and vendors with these
programs to find ways to streaml-ine operations, adjust
offerings, and develop more accurate tool-s in an effort to
make these programs more cost-effective. Because these
programs target limited-income customers, Idaho Power
belj-eves there are other benefits to these programs that
are difficul-t to quantify. Un1ess the Commission directs
otherwj-se, Idaho Power wilI continue its efforts to improve
these programs while at the same time offering them to the
Company's customers on an on-going basis.
NEMNICH, DI 30
Idaho Power Company
1
2
3
4
5
6
1
I
9
10
11
72
13
1,4
15
16
L7
18
1,9
20
2L
22
23
24
25
O. Which programs did not have a benefit/cost
ratio greater than 1.0 in 201-3 from the perspective of the
TRC or the PCT?
A. As shown in Exhibit No. 2, the Ductl-ess Heat
Pump Pil-ot (*DHP") program had a benefit/cost bel-ow 1.0 for
the TRC and the PCT using 2073 data. The ENERGY STAR@ Homes
Northwest program had a benefit/cost ratio bel-ow 1.0 for
the TRC.
O. Pl-ease explain why the DHP pilot program did
not meet the TRC or the PCT and discuss Idaho Power's
response to this result.
A.Idaho Power operates this program through the
regional Northwest DHP pilot project. The RTF j-s stil-l
evaluating the DHP measures to establish appropriate energy
savings. In the fall of 2013, the RTF approved annual--
savings estimates for DHP installed under the pilot
parameters. These savings were given a sunset date of
March 31, 20L4, because the RTF only approved savings that
did not consider the impact of supplemental fuel use such
as wood burning stoves. The pilot billing analysis showed
that there were l-ower savings in col-der cl-imates for
customers that reported large amounts of wood heat prior to
the installation of the DHP. The resul-ting billing
analysis of wood burning customers shows minimal savings or
even increased use of electricity from the pre-instal-l-ation
NEMNICH, DI 31
Idaho Power Company
1
2
3
4
5
6
1
I
9
10
11_
12
13
t4
15
t6
!1
18
L9
20
2T
22
23
24
25
period. As a consequence of the supplemental fuel issue,
DHPs installed in Idaho Power's colder climate zones have
l-ower energy savings than prevj-ous1y estimated. Savings in
the other climate zones were higher and DHPs were cost-
effective. The combination of the savings from different
climate zones and the impact of wood burning use decreased
overall per unit savings, which caused the overal-l program
TRC benefit/cost ratio to fa1l bel-ow 1.0. The i-ssues
discussed above also lowered the PCT to under 1.0.
Depending on the results of the RTF final- review, Idaho
Power wil1, in consultation with the EEAG, explore makj-ng
program changes to improve the cost-effectiveness, both of
the TRC and of the PCT, of this program.
O. Please explaj-n why the ENERGY STAR@ Homes
Northwest program did not meet the TRC test and explain
Idaho Power's response to this result.
A. Tn 2013, Idaho Power certified 267 homes in
the ENERGY STAR@ Homes Northwest program. Only seven of
these homes were stand alone, single-family homes and 260
were townhomes. The RTE estimates of kwh savings for
townhomes is less than single-family homes but the
incentive and fixed costs borne by the program are the
same. The hiqh ratio of townhomes to total homes in Idaho
Power's program in 2073 caused this program's cost-
effectiveness to dip to a TRC of 0. 95. The RTF unit energy
NEMNICH, DI 32
Idaho Power Company
1
2
3
4
5
6
7
8
9
10
11
72
13
74
15
16
77
18
19
20
2T
22
23
24
25
savings for this program wil-l- sunset at the end of April
2014. Idaho Power will-, in consultation with the EEAG,
evaluate program changes after the RTE reviews the energy
savings assumptions for Energy Star@ Homes Northwest in
order to improve the cost-effectiveness of this program.
o.Concerning al-1 of its programs, did Idaho
Power l-ook at program cost-effectiveness from the Ratepayer
Impact Measure ("RIM") perspective as requested by the
Staff in Attachment No. 1 of the DSM MOU?
A.Yes. The RIM test measures the impact on
customers' biIls or rates due to changes 1n utility
revenues and operating costs caused by an energy efficiency
program. According to the National Action Plan for Energy
Efficiency's Understanding Cost-Effectrveness of Energy
Efficiency Programs: Best Practicest Technical- Methods,
and Emerqing fssues for PoLicy-Makers, this test is
typically a secondary test used to evaluate relative
impacts on rates. It should be noted that while Staff, in
Attachment No. 1 to the DSM MOU, stated an expectation that
programs should pass the TRC, UCT, and PCT (and if not to
provide an explanation), there was no stated expectation
that programs must pass the RIM test.
o.What were the resul-ts when Idaho Power
NEMNICH, DI 33
Idaho Power Company
calculated the RIM tests on its programs?
A. When Idaho Power made these cal-culations,
2 programs had a range of benefit/cost ratios for the RIM
3 test with the lowest at 0.35 and the highest at 1.81.
4 Results for each program calculation can be found in
5 Suppl-ement I of the 2073 DSM Annual- Report.
O. Did Idaho Power calculate cost-effectiveness
7 tests for each measure within each program?
A. Yes. In 20L3, Idaho Power eval-uated the
9 benefits and costs of 455 measures from both the TRC and
10 the UCT perspective. Of the total number of measures
1l- anal-yzed, 18 did not pass the TRC. Four additional
tZ measures failed the UCT but passed the TRC. It should be
13 noted that Idaho Power does not perform cost-effectiveness
L4 cal-culations by measure in programs where there is
15 significant interaction between measures.
76 The results of these cal-culations along with measure
Ll assumption detail-s and source documentation can be found in
l-8 Supplement 1 to the DSM 2013 Annual Report.
79 O. How did Idaho Power address the measures that
20 are not cost-effective based on one or more tests?
2t A. The cost and benefit values used in the
22 various analyses are based on markets, technologies,
23 economic inputs, savings estimates, and cost estimates,
24 which can change over time. When a measure is determined
25 not to be cost-effective at a specific point in time, Idaho
NEMNICH, DI 34
Idaho Power Company
1
2
3
4
5
6
7
8
9
10
11
72
13
t4
15
t6
77
18
1,9
20
2L
22
23
24
25
Power first evaluates whether the inputs used in the
cal-cul-ations are still- correct, and then determj-nes if
measure parameters should be modified or whether the
measure should be el-iminated. As mentioned above, 18
individual measures in various programs are not cost-
effective from a TRC perspective and four individual
measures fail- the UCT but pass the TRC. These measures
will either be discontinued, analyzed for additional non-
energy benefits, modified to increase potential per unit
savings, or monitored to examine their impact on the
specific program's overal-1 cost-effectiveness. For
additional- detail- on measure analysis refer to Supplement
1.
V. EVAIUATION ACTIVITI OVERVIEW
o.Please discuss the Company's approach to
program evaluation.
A. In order to ensure the ongoing cost-
effectiveness of programs through val-idation of energy
savings and demand reduction, and to guide the efficj-ent
management of its programs, the Company relies on
evaluations by third-party contractors chosen through a
competitive bidding process, internal analyses, and
regional and nati-onal studies. Idaho Power uses j-ndustry-
standard protocols for its internal and external evaluation
efforts. Process and impact evaluations are typically on a
NEMNTCH, Dr 35
Idaho Power Company
1
2
3
4
5
6
1
8
9
10
11
L2
13
t4
15
16
L1
18
19
20
2L
22
23
24
25
three-year cycle for each program; however, the timing of
specific program evaluatj-ons is based on considerations
regarding program needs. The Company actively participates
1n regional groups that eva1uate new technologies and
advancements. The DSM MOU provides further direction on
how Idaho Power plans, evaluates, and reports its DSM
activities.
O.Please provide an overview of the eval-uation
activities that took place j-n 2013.
A.1n addition to the annual cost-effective
analyses that the Company conducts for each program, in
20L3, Idaho Power completed six process evaluations on the
foll-owing programs: Energy Efficient Lighting, ENERGY STAR@
Homes Northwest, Heatj-ng and Cool-ing Efficiency Program,
Weatherizatj-on Assj-stance for Qualifj-ed Customers,
Weatherization Solutj-ons for Eligible Customers, and Easy
Upgrades. Idaho Power completed one impact evaluation on
the Irrigation Efficiency Rewards program. A11 these
evaluations were conducted by third-party contractors. In
addition, Idaho Power conducted its annual internal review
on the FlexPeak Management and the Irrigation Peak Rewards
programs. The final- reports for these evaluations and
studies, and the market effects evaluations conducted by
NEEA, are included in Supplement 2 of the DSM 20L3 Annual
Report.
NEMNICH, DI 36
Idaho Power Company
1
2
3
4
5
6
7
8
9
10
11
72
13
74
15
76
77
18
19
20
2t
22
23
24
25
There were four "Other" research projects l-isted in
last year's 20L3 evaluation plan that were not completed in
2073. Two of these research projects were planned for the
WAQC and Solutions programs in 2013 and were to evaluate
the EA software audit tool. This work is continuing into
20L4. There was also a process eval-uation schedul-ed for the
El-exPeak Management program in 20L3. Idaho Power chose not
to complete this evaluation based on the fact that it was
the last year of a five-year contract with EnerNOC, fnc.,
and that the operation of the FlexPeak Management program
was uncertain for 2014 and beyond. The other two
evaluations listed in l-ast year's 2013 evaluation plan for
the Custom Efficiency and Building Efficiency programs were
for the development of Technical Reference Manuals ("TRM").
The development of these TRMs is still underway.
Has Idaho Power been able to evaluate customer
satisfaction with the program offerings?
A.Yes. Since 2003, Idaho Power has incl-uded
three questions specific to customer satisfaction with the
Company's energy efficiency efforts in its quarterly
customer satisfaction survey conducted by a third-party
proprietary research vendor. From 2003 to 2073, customers'
positive perceptions of Idaho Power's energy efficiency
efforts have increased from 39 percent to 57 percent. Of
those surveyed who participated in at least one program, 97
NEMNTCH, Dr 31
Idaho Power Company
o.
1
2
3
4
5
6
7
I
9
10
11
12
13
74
15
L6
t'7
18
1_9
20
2L
22
23
24
25
percent are "very" or "somewhat" satisfied with the
program. The Company al-so implements surveys as needed for
individual programs to gather information on suggestions
for improvement or satisfaction of energy efficiency
services offered.
O. Does Idaho Power have a DSM program eval-uation
plan for 2074?
A.Yes. The 2070-20t.4 DSM Program Evaluation
Pl-an is attached as Exhibit No. 3 and is also included in
Supplement 2. The emphasis in 201,3 was on conducting
process evaluations. In 2014, Idaho Power's evaluation
plan includes four impact evaluations, three process
evaluations, and two addj-tional research projects. This
plan is intended to be used as a guide and may change based
on need, timlng, or other factors.
VI. SATISFACTION OF DSM MOU GUIDELIIIES
O. Does Idaho Power bel-ieve that this filing
satj-sfies the reporting obligation for DSM activity as set
forth in the DSM MOU?
A.Yes. Idaho Power has followed the template,
table of contents, highlights, and program specific
sections as recommended in the DSM MOU. Thls information
can be found in the main document of the DSM 2013 Annua]
Report. In Supplement L, Idaho Power has provided the
cost-effectiveness detail- for programs and measures and
NEMNTCH, Dr 38
Idaho Power Company
1
2
3
4
5
6
7
I
9
10
1t_
72
13
74
15
16
L7
18
19
20
27
22
23
24
25
o.
A.
Supplement 2 supplies the eval-uatj-on information requested
in the DSM MOU.
VII. CONCLUSION
o.Do you believe that the j-nformation contaj-ned
in this testj-mony and attached documents supports a
prudence determinatj-on for 2073 DSM expenses?
A.Yes. Based on the testimony set forth above
and in the attached exhibits, Idaho Power respectively
requests that the Commission determines that $25,951-,486 of
DSM expenses incurred in 2073 for the acquisition of
demand-side resources were prudently incurred.
Does this conclude your testimony?
Yes, it does.
NEMNTCH, DI 39
Idaho Power Company
1
2
3
4
5
6
1
8
9
10
11
12
13
L4
15
t6
L7
18
T9
20
2L
22
23
24
25
26
2'7
28
29
30
31
STATE OF IDAHO
County of Ada
ATTESTATIOI{ OF TESTIMONY
ss.
It Darlene Nemnich, having been duly sworn to
testify truthfully, and based upon my personal knowledge,
state the followlng:
I am employed by Idaho Power Company as a Senior
Regulatory Analyst in the Regulatory Affairs Department and
am competent to be a witness in this proceeding.
I decl-are under penalty of perjury of the l-aws of
the state of Idaho that the foregolng pre-fi1ed testimony
and exhibits are true and correct to the best of my
information and belief .
DArED this l]! day of March 2O!4
SUBSCRIBED
March 201-4.
AND SWORN to before me this day of
Notary Public for Idaho
Residing at:
NEMNICH, DI 40
Idaho Power Company
13-^
Darlene Nemnich
My commission
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-14-04
IDAHO POWER COMPANY
NEMNICH, DI
TESTIMONY
EXHIBIT NO. 1
ldaho Power Company
2013 ldaho DSM Expenses and Adjustments for Prudence Filing
Expenses RiderExpenses
Demand Response
Program lncentives
Recorded in PCA Total Expenses
EnGtgy Efficiency/Demand Respnse
Residential
A/C Cool Credit
Ductless Heat Pump Pilot
Energy Efficient Lighting
Energy House Calls
ENERGY STAR@ Homes
Heating & Cooling Efficiency Program
Home Energy Audit Program
Home lmprovoment Program
Home Pmducts Program
Rebate Advantage
See ya later, refrigeratoro
Weatherization Solutions for Eligible Customers
Commercial/lndustrial
Building Efficiency
Custom Efficiency
Easy Upgrades
FlexPeak Management
lnigation
lnigation Efficiency Rewards
lniqation Peak Rewards
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
537,163 $
230,761 $1,331,113 $
164,173 $344,217 $317,973 $
88,491 $
299,032 $
391,348 $
s8,674 $
571,304 $
1,239,132 $
1,ll8g,195
2,402,903
3,258,427
108,842
2,277,059
407.496
0$o$0$
2,497,589 $
1,489,195
2,402,903
3,258,427
2,606,432
96,964 $ 634,1280 $ 230,7610 $ 1,331 ,1 130 $ 164,1730 $ 344,2170 $ 317,9730 $ 88,4910 $ 299,0320 $ 391,3la0 $ s8,6740 $ 571,3040 $ 1,239,132
$
$
$
$
$
$
$
s
0 $ 2,277,059't.608.602 s 2.016.098
Eneruv EfficiencvlDemend Resmnse Totel S 15.517.306 S 4203155 S '0720aA2Market Transformation
Northwest Enerov Efficiencv Alliance S 3.147.405 S a 147 AO5
Residential Economizer Pilot
Residential Energy Efficiency Education lnitiative
Commercial Energy Efficiency Education lnitiative
Enerqv Effciencv Direci Proaram Overhead
$
$
$
$
$
$
$
$
74,901
395,668
63,451
361,910
74,901
395,668
63,451
361.910
Other Prcs/aims and Actiyities Total $895.929 3 89s.929
lndirect Program Exponses
Commercial/lndustrial/lnigation Overhead
Energy Efficiency Accounting and Analysis
Energy Efficiency Advisory Group
Residential Overhead
S pecial Accou nti ng Entrie s
Special Accounting Entries
Transfur of Custom Efficiency Regulatory Asset Account (")
Removal of 2011-2O13 Flider-firnde.d Labor lnceass
0$0$0$0$
0$0$
$
$
$
$
$
$s
$
$
$
$
$
$
s
136,811
802,258
5,390
124,825
1 70,869
't4,200,174
(5?? AAA\
136,81 1
802,258
5,390
124,825
1 70,869
14,200,174
la?? Ant\
lndirecl Proonm Exoerrses lofe, $11.907.183 S 11.907.,.83
Grand Total $y,468.123 $4.203.155 t 38.671.278
Adiustments
201 1 Custom Efficiency lncentives Transfened to Rider in 201 3, but Deemed Prudent-Oder No
2012 Custom Efficiency lncentives Transfened to Rider in 2013, but Deemed Prudent-Order No
2011 &2012 Rider-funded Labor lncreases Transfened from Rider in 2013
2012 NC Cool Credit Program Switch lnstallation Expense
Prior Year+nd Accounting Adjustmentso)
Energy House Calls Program Accounting ConEction
Adjustment for ENERGY STAR@Homes Northwest lncentives
Other Miscellaneous Accounting Corections
Cunent Year-€nd Accounting Adjustment(o)
Home Energy Audit Program Conection
32667 $
32953 $
(7,018,38s)
(6,019,109)
263,412
32,090
17,113
4,000
839
28
$
$
$
$
$
$
$
$
$
$
$
$
(7,018,38s)
(6,019,109)
263,412
32,090
17,113
4,000
839
24
2013 Prudence Filino Total 3 21.71A.?31 3 t1.203.t55 3 25.951-486
of 1oy'o ffrannumthatwrcawuedinthelS2SlTRegulatdyAssta@untasof tuby31,2013.
(b) The* ffi awunttg wclions @taining to 201 2 that w fficted in 201 3 and slpuld be ad(hd back in to retect blal axrynfis in 201 3.
(c)Thiswsanawnlingfficdonnadein20llbutpqlainitploml3*MyaNslaukl&addedbacktoreflecttolalexpen*sin2013. AnldahorclatadawnseresiwdlydtilgedbtlpOregon
Ereryy Efrcbncy Ridor.
Exhibit No. 1
Case No. IPC-E-14-04
D. Nemnich, IPC
Page 1 of 1
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-14-04
IDAHO POWER GOMPANY
NEMNICH, DI
TESTIMONY
EXHIBIT NO.2
ldaho Power Company
2013 Cost-Effectiveness Summary by Program
Notes: For each energy efficiency program, this table shows UCT, TRC, and PCT using actual annual 2013 information for
each program. For demand response programs, this table shows UCT and TRC using five-year life-cycle information for
FlexPeak Management and N/A for A/C Cool Credit and lrrigation Peak Rewards programs due to their temporary
suspension in 2013. The PCT was not calculated for demand response programs or for programs where there are no
participant costs.
2013 Benefit/Cost Tests
Program Utiliw Cost (UCT)
Total Resource Cost
ITRCI
Participant Cost
(PCTI
A/C Cool Credit N/A N/A N/A
FlexPeak Manasement L.43 1.43 N/A
rrisation Peak Rewards N/A N/A N/A
Ductless Heat Pumo Pilot 2.51 o.7t 0.81
Energv Efficient Lishtins 4.79 2.67 2.96
Energv House Calls 3.95 3.9s N/A
ENERGY STAR o Homes Northwest 1.61 0.9s L,46
Heating & Cooline Efficiencv Prosram 3.87 1.93 2.54
Home lmorovement Prosram 3.58 1.18 L.43
Home Products Prosram 1.69 2.24 3.42
Rebate Advantage s.39 3.80 6.38
iee ya later, refrigerator @ 7.23 L.23 N/A
Weatherization Assistance for Qualified Customers 0.95 0.74 N/A
Weatherization Sol utions for Elieible Customers 0.46 0.s3 N/A
Building Efficiencv 5.48 3.26 2.94
Custom Efficiency 5.51 2.s6 1.58
Easy Upgrades 4.7L 2.61 2.42
lrrigation EfficiencV 6.35 7.72 t.77
Exhibit No.2
Case No. IPC-E-14-04
D. Nemnich, IPC
Page 1 of 1
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-14-04
IDAHO POWER COMPANY
NEMNICH, DI
TESTIMONY
EXHIBIT NO.3
oN
oEo \
Ut
E.!uoLa
.EE.P,i3!tr
t!(,
o
E
Eot
tn
Et!
!!
eacotPlUt!,tr
v,
ElEEttoLcoUIEoov,ocEgl!
Eo6
o
o
d
\\
oq
E \
nlona
@
o \
o
o \
oq
E
.{ol{
o
o \
o
o
d
6q
E
C'N
o
o \
o
o
d
oo
E
\\\
ooN
oGo \
o
o
d
\\\\
6e
E
,n
E.Euo
4
(!Ecop
vl!,E
oii
ct
Ef
CL
(!
(U-
o
IJfo
UIc
=ulJ
Co'o
ul
ul
6JcU
!EUo
fo-
UI
oc
o3Etoz
o
Eot
IG,
FtJl
(,c,IJz
E(!
qIo
o-
qrco'o
U
ul
.gEoU
OU
h(tr
(!oT
E(oL!(oL
CL
Pco
E0)
oo
E
o)
EoT
E(!
OIo
L
(,
fT'o(L
(u
EoT
ohl.!
c(o
!
o(!!(u
d
a
o(!
o)EO
o
o
(o
(o
(uo
o
E(!
Ec
coE(ou
=!lr,l
Ico
U(E
IJ
bI
ocul
6
c(UE'aod
(J
.ooLo-
c,(u
F(uT'(o-c
.:!f
uaL
OJcul
0,)
EoT
o
Eo
q
f(J
!(,
=(o
fo
o
oIc(!v.9
cor:(oN
o)EP(o
0)
=
o
EoP
=U
c,
=.EU
o
co
lEUIco
iEN
L(UT
(!o
=
Uc(l)'oiE
ul!Ic€'=
Uco'o
IJ
Eo
lat
o)1'l!
bIof
(o
T'
(g
3o)G,
uc
C'0iE
lrt
Co.F(!u
.=!(,
U
Eo(J(J
co)
Ec,bI(!c(!
-ta(!oCLx6.)
!
(o3od.
-v(o
OJ(L
co
(!
an
trg
o.co
.P>(Ec=(E=o.gE rrJOE(Jh
ooo
_9 O-ELo>f8E' q,
F{oNIoF{oN
Exhibit No. 3
Case No. IPC-E-14-04
D. Nemnich, IPC
Page 1 of 1