20140729Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 6864
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
i.r ts .1 r_ r ! ,.' l"i
l-'t-i.-,'r-l I '-''
?0i\ JllL 29 PF',l ?: 3l
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER'S )
APPLICATION FOR A DETERMTNATTON OF ) CASE NO. IPC-E-14-04
2013 DEMAND SIDE MANAGEMENT (DSM) )
EXPENSES AS PRUDENTLY INCURRED )) covrMENTs oF THE) cotvtMISSIoN srAFF
)
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attomey of record, Neil Price, Deputy Attorney General, and in response to the Notice of
Application, Notice of Modified Procedure, and Notice of Intervention Deadline in Order No.
33032 issued on April 30,2014, submits the following comments.
BACKGROUND
On March 17,2014,Idaho Power Company ("Idaho Power" or "Company") submitted its
Demand-Side Management 2013 Annual Report (DSM 2013 Annual Report) and makes
Application to the Idaho Public Utilities Commission (Commission) for an Order designating
Idaho Power's expenditures of $21,748,331 in Idaho Energy Efficiency Rider (Rider) funds and
$4,203,155 of demand response (DR) program incentives included in the 2014 Power Cost
Adjustment (PCA), for a total of $25,951,486, as prudently incurred demand-side management
STAFF COMMENTS JULY 29,2014
(DSM) expenses. In support of its request, Idaho Power included a copy of its 2013 DSM
Annual Report and Supplements I ard2.
Idaho Power offered 18 energy efficiency programs in 2013, one active demand response
program, several educational initiatives, and savings to customers through market transformation
programs. Idaho Power estimated that annual energy savings from its energy efficiency
activities totaled 107 ,284 megawatt-hours (MWh), including 18,346 MWh (preliminary
estimate) stemming from the Company's participation with Northwest Energy Efficiency
Alliance (NEEA) in2013.
Overall, the Company's energy savings are down this year. The DSM 2013 Annual
Report states that this reduction in energy savings in20l3 is due, in part, to Idaho Power and the
region's increased evaluation, measurement, and verification activities. Idaho Power's
expenditures on DSM-related activities decreased in2013,largely due to the suspension of two
demand response programs. In20l3, the Company's total system-wide expenditures on DSM-
related activities totaled $26,841,379. The 526,84t,379 of system-wide, DSM-related expenses
in20l3 includes expenditures for customers in Oregon and other operations and maintenance
expenses that are not before the Commission as part of this prudence request.
Idaho Power seeks a determination that a total of $25,951,486 expenditures were
prudently incurred in20l3 ($21,748,331 in Rider expenses and $4,203,155 in DR program
expenses included in the 2014 PCA). The Company requests that the Commission accept
Custom Ef fi ciency Transfer Adj ustments, Adj ustments for Rider-Funded Labor-Rel ated
Expenses, Adjustments for A./C Cool Credit Switch Expenses, Prior Year-End Adjustments, and
Current Year-End Adjustments.
The 2013 DSM Annual Report calculates cost-effectiveness from the Rate Impact
Measure (RIM), the Participant Cost Test (PCT), the Utility Cost Test (UCT), and the Total
Resource Cost Test (TRC) perspectives at the program level, except for those programs with no
customer costs, in which case the PCT is not applicable. This includes DR and low-income
weatherization programs, which are evaluated from the UCT and TRC perspectives.
Two programs had benefit/cost ratios less than 1.0 for the TRC but greater than 1.0 for
the UCT, two programs had benefit/cost ratios less than 1.0 for both the TRC and UCT, and one
program had a benefit/cost ratio of less than 1.0 for the PCT. 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 evaluated from a five-year life-cycle perspective; cost/benefit
STAFF COMMENTS JULY 29,2014
analyses were not performed on the A/C Cool Credit and Inigation Peak Rewards programs
because they were suspended in20l3.
In 2013, independent third-party consultants conducted process evaluations on six
programs and an impact evaluation on one program. In addition, Idaho Power conducted its
annual internal analysis and reports for the FlexPeak Management and the Irrigation Peak
Rewards programs. Copies of these reports can be found in the DSM 2013 Annual Report,
Supplement 2.
STAFF ANALYSIS
Staff reviewed the Company's Application and accompanying testimony and exhibits.
Staff also audited the 2013 DSM expenditures and reviewed the Company's internal processes of
paying incentives to customers. Based on Stafls review, Staff supports the Company's DSM
programs and expenditures. However, Staff s support comes with increasing concerns about the
Company's compliance with the Commission's directive to pursue all cost-effective energy
efficiency. These concerns will be discussed in greater detail in the comments below. Staff
recommends that the Commission rule that the Company prudently incurred $25,951,486 in20l3
DSM-related expenses. This amount consists of $21,748,331 in Rider expenses and $4,203,155
in Demand Response (DR) program expenses that have been included for recovery in the 2014
Power Cost Adjustment (PCA).
Staff has calculated the appropriate Rider balance as of December 31, 2013 as follows:
2013 Beginning Balance
2013 Funding plus Accrued Interest
Total 2013 Funds
2013 Booked Expenses and Activity
2013 Ending Balance
$ 4,040,622
37.tt3.246
41,153,868
(.34.468.123),
l_6i85J4s
The Company's 2013 DSM Rider-funded expenditures are different than the reported
Booked Expenses. The Booked Expenses reflect various accounting entries that occurred during
2013. It is necessary to account for those amounts to accurately determine the total 2013 DSM-
Rider funded expenditures. Though the Booked Expenses are used to determine the Rider
account's appropriate ending balance, they do not always reflect the actual amount of
expenditures for which the Company seeks a prudency determination. The following table
STAFF COMMENTS JULY 29,2014
illustrates the 2013 Rider-funded expenditures that Staff recommends the Commission deem
prudently incurred:
34,468,123
(13,037,494)
263,412
32,090
17,ll3
4,000
839
248
$21-748J3_l
Booked Expenses and Activity S
20 | | -20 12 Custom Effi ciency Payments I
2}ll-2012 Labor Increases Transferred from Rider2
2Ol2 NC Switch Installation3
Prior Year Accounting Adjustmentsa
Energy House Calls Accounting Correction
Energy Star Homes Northwest Correction
Other Miscellaneous Accounting Corrections
2013 Home Energy Audit Corrections
Actual Expenditures to be Deemed Prudent in20l3
Staff believes the approximately $22 million in expenditures charged to the Rider account
were prudently incurred, but what may not be prudent is the decision to not spend customer
funds in the pursuit of cost-effective DSM. In the Company's last DSM prudency frling (Case
No. IPC-E-I3-08), Staff noted that the Company's commitment to DSM seemed to be waning.
The Company's request to suspend its demand response programs, intent to withdraw from
NEEA, failure to analyze the impact of a40Yo fall in avoided costs on its cost-effective energy
savings, and refusal to participate in partnership funding of an Idaho-based energy efficiency
' On June 7,2Ol3,the Company transferred Sl4,2OO,l74 in Custom Energy Efficiency Program payments from the
regulatory asset account to the DSM Rider. The $13,037,494 represented on this line is the amount spent in 201 I
and 2012 which has already been deemed prudent in prior cases. The difference of $966,3 l9 is program expenses
incurred from January 1 - May 31,2013 which have yet to be deemed prudent. A prudency determination on the
2013 amount is requested in this case.
' In Order Nos. 32667, 32690, and 32953 the Commission declined to decide the prudence of incremental Rider-
funded labor increase in 201 | and20l2. Because the 2011 and20l2labor increases were removed from the Rider
account in 2013, it is necessary to add these amounts back in to determine the actual amount of Rider expenses in
20 I 3 . The Company is not seeking a prudency determination of the 20 I 3 Rider-funded labor increases. The 2013
Rider-funded labor increases have been removed from the Company's 2013 Booked Expenses and Activities.
3 Last year, in Case No. IPC-E-13-08, the Company withheld requesting a prudency determination on 481 A/C
switches that were installed after the A/C Cool Credit program was temporary suspended. The program has been
redesigned and is no longer suspended as per Order No. 32923 . Those 481 switches will now be in use for the
Summer of 2014 and provide value to the program. Because this amount was removed in the previous prudency
filing, it is necessary to add it back in to the current hling for prudency determination.
n The Prior Year Accounting Corrections totaling $21,952 were adjustments from 2012 that were not discovered and
corrected until 20 I 3. Because the corrections occurred in 20 13, it is necessary to add these amounts back to the
Booked Expenses to determine the proper amount of actual expenditures to be deemed prudent.
' A labor charge of $248 for the Home Energy Audit Program was initially charged to the Oregon Rider. Upon
review it was determined that it should have been charged to the Idaho Rider. This adjustment adds back the S248
to the Booked Expenses to determine the actual expenditures to be deemed prudent.
STAFF COMMENTS JULY 29,2014
research and development effort led to Staff s conclusion that the Company was not actively
pursuing all cost-effective DSM (See Staff Comments, Page 8). With the dramatic reduction in
energy savings reported in the Company's 2013 Demand Side Management Report, Staff s
perceptions have been confirmed.
The 2013 DSM Report shows that the Company's non-NEEA energy efficiency
acquisitions declined for the third straight year with 2013 seeing the steepest decline yet. The
Company's energy savings peaked in 2010 at about 172,000 MWh and have been declining ever
since, with about 163,000 MWh in 2011 and 152,000 MWh in20l2. In 2013, the Company
acquired only 89,000 MWh of energy efficiency, which is approximately half the amount
achieved just three years earlier and a 42Yo deuease from 2,012.
The Company defended the energy savings reduction in its 2013 DSM Annual Report by
asserting that five main factors contributed to the 2013 decline. The decline "was due, in part, to
new lower deemed-savings amounts approved by the Regional Technical Forum (RTF) and
Idaho Power continuing to offer some programs only to customers with electrically heated
homes, . . . the natural ebb and flow of projects" in the industrial sector, "some trade allies report
that the improved economy decreases the amount of retrofit projects . . . turning their attention to
new construction projects," and that "overall reduced savings in20l3 may be caused, in part, by
Idaho Power's and the region's increased evaluation, measurement, and verification (EM&V)
activities." (DSM 2013 Annual Report, page 10). Staff does not believe these factors fully
explain the decline in program performance.
First, Staff has reviewed the RTF changes to savings estimates and analyzed the effect on
Idaho Power's programs. During the2012-2013 program years, the RTF changes affected six
programs offered by Idaho Power. Residential energy savings decreased by about 8,600 MWh
due to revised RTF savings estimates. However, this decrease was partially offset by an increase
in savings estimates of about 5,000 MWh for the irrigation sector and smaller increase of 19
MWh for the Green Motors program for industrial projects. Overall, the net decrease in energy
savings attributed to changes made by the RTF is just over 3,000 MWh. This is only 5Yo of the
total 63,500 MWh decrease experienced in 2013.
Second, Idaho Power states that offering some programs only to customers with
electrically heated homes has also contributed to reduced savings. However, Idaho Power
instituted this restriction of its own volition in 201l-so while the restriction has contributed to
an ongoing reduction in savings, the 28o/o decrease in residential savings decrease between 2012
STAFF COMMENTS JULY 29,2014
and 2013 is not the direct result of this change. The Company may remove this self-imposed
restriction at any time and quantiff the value of natural gas savings as a non-electric benefit for
inclusion in cost-effectiveness tests. Unlike some non-electric benefits, natural gas savings can
be as rigorously quantif,red as electric savings. Staff notes that this change would allow access to
a large amount of untapped electric energy savings.
Third, if the "natural ebb and flow" of industrial projects through Idaho Power's
programs were a primary cause of the decline, Staff would expect to see savings variations of
this magnitude in the past. However, Idaho Power's energy savings have been on a steady-and
now severe-slide since 2010.
Fourth, Idaho Power claims that an improving economy decreases commercial savings as
trade allies focus on new construction rather than retrofits. But Idaho Power offers a program for
new construction projects-Building Efficiency- in order to capture these savings. Building
Effrciency posted significantly above-average savings in20l2,but20l3 savings were back in
line with the recessionary years of 2009 and 2010.
Fifth, more stringent EM&V could not be the cause of the single-year decline because all
but one of Idaho Power's evaluations conducted in 2013 were process evaluations-which
examine program management-rather than impact evaluations which veriff energy savings.
Lastly, the factors cited by Idaho Power as reasons for the dramatic reduction in savings
are regional, rather than utility-specific, but other utilities have not seen similar decreases in
savings. Rocky Mountain Power recently filed an Application requesting a prudency
determination for DSM Rider funds spent in Idaho for the years 2010-201f .6 Though Staff has
yet to fully investigate the information provided in that filing, Rocky Mountain Power reports an
increase of 60Yo in energy efficiency acquisitions in 2013 over 2012. Avista saw an increase of
27oh for the same time period. The following graph illustrates the annual percentage change in
acquired energy efficiency savings for each of Idaho's three large investor owned utilities.
6 Case No. PAC-E-14-07
STAFF COMMENTS 6 JULY 29,2014
Annual Percentage Change in Energy
Efficiency Savings
r ldaho Power m Avista r Rocky Mountain
20LO 20Lt 20L2 20t3
While all three utilities experienced a decrease in energy savings in20l1, Idaho Power is
the only one that failed to rebound. While the Company would like to point to factors beyond its
control to justiff the decrease in energy savings, Staff believes the Company's reluctance to
effectively market and drive demand for its existing programs, adapt its program delivery to the
changing DSM landscape, and implement new programs that have been proven to be cost-
effective for other utilities are the main reasons behind such a dramatic decrease.
MARKETING
Staff believes a central cause in the Company's declining savings can be attributed to
ineffective marketing of its DSM programs. Clearly, participation in Company-sponsored
programs requires customers to be aware that the progftlm exists. The effectiveness of Idaho
Power's marketing was revealed in the 2013 J.D. Power and Associates Customer Satisfaction
Study which concluded that after l0 years of energy efficiency programs 50 percent of all
residential customers and 45 percent of all business customers were not aware that Idaho Power
offers any energy efficiency programs (DSM 2013 Annual Report, page 18-19).
-4L%
STAFF COMMENTS JULY 29,2014
The 2013 HANSA GCRNon-Participant Survey analyzednon-participants (customers
who had not participated in DSM programs) at the sector level and concluded thatTlo/o of
commercial, 600 of residential, and 45Yo of trigation customers were not aware that Idaho
Power offers energy efficiency incentives (HANSA, page 9). While the vast majority of
customers from all sectors believe energy efficiency programs are highly important, the survey
found that "unfamiliarity is the top barrier to participation across audiences." (HANSA, page 9).
Several third party evaluations demonstrated that the low customer awareness is likely
related to uncoordinated and insufficient marketing practices. TRC Energy Services conducted a
process evaluation and found that the Company's largest residential program-Energy Efficient
Lighting, which had a 40 percent decline in savings last year-suffers because "Customer Reps
reported that they have reduced the amount of in-store interaction they have with customers in
recent years for this program. Their reason for this is that they understand that the 3'd party
implementer has taken over the primary responsibility of program marketing. The Program
Specialist reports that this is not a new development, and that marketing was always conducted
by the 3'd party implementer." (TRC, page 34). Idaho Power's customer representatives do not
seem to be sufficiently educated on programs to effectively promote them.
In a separate evaluation for the commercial energy efficiency program, Easy Upgrades-
which experience d a 49 percent decline in savings-Opinion Dynamics concluded that the
program "is marketed through a relatively limited set of activities" and it is "difficult to track
effectiveness of [Easy Upgrades] marketing tactics because there is no Easy Upgrades hotline,
and website traffic is not regularly reviewed. Finally, all program marketing is general across
the Commercial and Industrial (C&D market sector and is not targeted based on business type"
(p. l4).
Staff notes the Company relies heavily upon traditional marketing methods which include
bill inserts and newsletters, having only recently expanded into social media and online
advertisements, and did not advertise through high-viewership methods such as TV or billboards,
and offered few radio spots. Idaho Power may claim that that its practices align with its
customers' preferences: the non-participant survey found that the majority of respondents in all
customer classes prefer to learn about programs through bill inserts or other mailings (HANSA,
page 11). However, Idaho Power has used those methods to advertise its programs for many
years, with the result being that about 61% of non-participants have no idea that Idaho Power
offers efficiency programs. Instead of relying on customer-preference based marketing
STAFF COMMENTS JULY 29,2014
techniques that are losing effectiveness, Idaho Power should independently, or with the help of
external experts, determine and fully fund effective marketing techniques to drive demand for
programs.
Staff also determined that the Company is not investing sufficiently in its marketing
effort when compared to national averages. The Company historically spends 2 to 3 percent of
its overall DSM budget on marketing, whereas the national averages are 4 to 8 percent. Opinion
Dynamics found that the Easy Upgrades marketing budget is inconsistent with national averages
as well. While national averages for marketing commercial programs are 3 to 10 percent of total
program expenses, Easy Upgrades marketing investment ranges from 1 to 1.5 percent.
Opinion Dynamics observed that "Contractors are critical to the success of the Easy
Upgrades program", but the "program does not have outreach staff dedicated to working with
contractors," and "the current staff are not able to conduct as much outreach as they would like
due to time constraints and the difficulty of covering a large geographic area." (Opinion
Dynamics, page 2). They recommended that a "prudent use of marketing funds would be to
boost contractor outreach." (/d ) With approximately $20 million in annual tariff rider
surpluses,T Staff believes the Company has sufficient resources to generate uptake for this cost-
effective resource (UCT 4.71).
In addition to ineffective marketing practices and insufficient budgets, Staff discovered
counterproductive marketing materials during its review. Staff has attached the second page of
the Company's 2013 Spring Commercial newsletter as an example. At the top of the page, the
Company recommends energy efficiency lighting as a cost-saving measure for businesses.
Directly below that ad, the Company promotes itself as having the lowest commercial rates in the
nation. A commercial customer reading the advertisement might question the value of investing
in energy efficiency when it already enjoys the "lowest electric rates in the nation." Staff
believes that the conflicting ad placement undermines the message to invest in energy efficiency.
PROGRAM ADAPTATION AND IMPLEMENTATION
In addition to ineffective marketing, Idaho Power has failed to sufficiently adapt its
program delivery and expand its program offerings to succeed in the changing DSM landscape.
Idaho Power correctly points out that increasing baseline effrciencies from federal standards and
7 Case No. IPC-E- l4-05, Application , page 9 .
STAFF COMMENTS JULY 29,2014
code requirements make acquiring cost-effective energy efficiency more difficult than in past
years. Contrary to the ever-evolving delivery strategies and program offerings of Avista and
Rocky Mountain Power,Idaho Power's programs remain largely unchanged.
For example, Avista generated significant energy savings in its commercial lighting
program by simultaneously increasing incentives and establishing a deadline on its Tl2 to T8
lamp incentive program. With the window of opportunity closing, commercial customers
flooded the program and Avista successfully transformed the lighting market in its service
territory. Meanwhile, Idaho Power's commercial lighting program-Easy Upgrades-has not
appreciably altered its delivery methods or incentives, and savings have plummeted. In addition
to its commercial lighting effort, Avista also direct-mailed each of its residential customers a
package of eight free CFLs. The initiative was very well received by customers and generated
an enornous amount of cost-effective energy savings.
Rocky Mountain Power has also developed innovative approaches to program delivery,
even in its rural Idaho service territory. The Company has extended its refrigerator recycling
program to include residential-sized appliances used in commercial break rooms and is currently
working to consolidate all of its business programs into one over-arching program to reduce
complexity for customers and thereby increase participation.
Most notably, both Avista and Rocky Mountain have either already or are in the process
of implementing behavior-based residential energy efficiency programs. These programs are
unique in that do they not require any proactive effort or capital investment from the customer.
High-use residential customers selected for participation are periodically mailed home energy
reports which compare their electrical consumption to a representative sample population. In
response to this clear, comparative information about their energy use, many utilities have found
that customers in aggregate reduce their energy consumption between I and 3 percent.
Idaho Power has consistently refused to implement behavior-based programs despite the
success of these programs in generating cost-effective energy savings from the challenging
residential and multi-family customer segments. Instead, the Company has repeatedly asserted
to the EEAG that its online bill payment system, which compares some customer-specific
consumption data to average Idaho Power customers, is the equivalent of a behavioral efficiency
program even though it has not been shown to produce any energy savings.
STAFF COMMENTS 10 JULY 29,2014
FINANCIAL IMPACT TO CUSTOMERS
As evidenced by declining energy savings and stagnant programs, the Company's
commitment to the Commission's directive to pursue all cost-effective demand-side management
is more questionable today than ever before. Customers are harmed when the Company does not
acquire the least cost resource. After comparing the Company's energy savings to the 2013
Integrated Resource Plan (IRP) target, Staff discovered savings achieved only 73o/o of the target
for the past year. Staff calculated the financial impact to customers of not acquiring 36,368
MWhs of additional energy savings identified in the 2013 IRP. Depending on the characteristics
of the measures acquired, customers could have saved approximately $474,000 to $2,164,000 in
2013 if Idaho Power had met its IRP target.8
Staff also compared the Company's 2013 IRP target to the achievable energy efficiency
potential savings identified for that year in its Conservation Potential Assessment (CPA).e
Generally, CPA results guide the target acquisition for energy savings included in IRPs, but
Idaho Power's IRP targets are nearly 60 percent greater than what was identified in the CPA.
The Company has not explained why it increased the achievable CPA estimates for the IRP, but
Staff shares the Company's implicit concern that the CPA significantly understated Idaho
Power's achievable potential.
Achievable potential is estimated as a subset of economic (cost-effective) potential based
on a utility's past program performance, also known as market adoption rates or ramp rates.
Idaho Power's achievable potential as a percentage of economic potential is very low compared
to other regional and national utilities. The EEAG has questioned the Company about the gap
between the economic and achievable potential, but no solid evidence has been presented to
justiff why Idaho Power's achievable potential drastically deviates from the rest of the region.
8 Staff subtracted the Company's reported savings from the IRP target (per the Company's response to Production
Request No. l0), and then multiplied the savings difference by the Company's avoided energy rates, both for Non-
Summer Off-Peak and Summer On-Peak. Staff then subtracted the Company's 2013 levelized utility cost of
portfolio implementation (per 2013 DSM Annual Report, Appendix 3 at 143) from both Non-Summer Off-Peak and
Summer On-Peak.
e Conservation Potential Assessments generally identifo three types ofenergy efficiency potential: technical,
economic, and achievable potential. Technical potential "assumes that customers adopt all feasible measures
regardless of cost." Economic potential "represents the adoption of all cost-effective energy efficiency measures."
Achievable potential "establishes a realistic target for energy... savings that a utility can hope to achieve through its
programs" and takes into account "past DSM achievements and program history... as well as the Northwest Power
and Conservation Council ramp rates". (EnerNoc Utility Solutions, Idaho Power Energy Efficiency Potential Study,
February 2013, pages v- vi.)
llSTAFF COMMENTS JULY 29,2014
In addition to being very low, the CPA assessment of achievable potential also appears
very subjective. In response to discovery, Idaho Power stated that EnerNoc (now AEG) "does
not have any work papers to support the process" of developing market adoption rates for Idaho
Power's service territory. This process is critical to determining how much achievable potential
is derived from economic, or cost-effective, potential. Staff believes this is an area that deserves
significant attention in order for the Company to develop program delivery strategies and
offerings to overcome the barriers to acquiring all cost-effective energy efficiency.
In the CPA, the total economic potential for 2013 was about 270,000 MWhs, but only
85,500 MWhs was identified as achievable. The opportunity costl0 of the Company not
achieving the full economic potential identified in the CPA could have saved customers
anywhere from$;2,235,1561o $10,212,708 in 201.3.tt In the future, if Staffbelieves the
Company fails to pursue and reasonably acquire economic potential, Staff will quantiff and
propose an adjustment that compensates customers for that failure. In the 2013 IRP Application,
Idaho Power said "the growing population in its service area will require the Company to add
physical resources to meet energy demands to use in combination with demand-side measures."
(2013IRP, Application at p.3). Cost-effective energy efficiency is the least cost alternative to
adding resources, particularly when population is expected to grow in the service area.
Staff believes it is unreasonable for the Company to forgo investing in energy efficiency
that is economic but not considered achievable due to factors within the Company's control
particularly when the failure to acquire cost-effective DSM results in acquisition of more costly
supply-side resources.
CONCLUSION AND RECOMMENDATION
Staff recommends that the Commission find that the Company prudently incurred DSM-
related expenditures of $25,951,486. This amount consists of $21 ,748,331 in Rider expenses,
and $4,203,155 of demand response program incentive payments included in the annual PCA.
'o The te.m opportunity cost refers to value of the best forgone alternative, particularly in situations when long term
choices need to be made between several mutually exclusive alternatives. For example, the opportunity cost of
investing in production instead of some alternative like energy efficiency, is called the oppornrnity cost of capital.rr Staff subtracted the Company's reported savings from the savings identified as being economical in the CPA (per
the Company's response to Production Request No. l0). Staffthen multiplied the savings difference by the
Company's avoided energy rates, both for Non-Summer Off-Peak and Summer On-Peak. Staff then subtracted the
Company's 2013 Ievelized utility cost of portfolio implementation (per 2013 DSM Annual Report, Appendix 3 at
143) from both Non-Summer Off-Peak and Summer On-Peak.
STAFF COMMENTS t2 JULY 29,2014
Staff also recommends that the Commission find that the appropriate Rider balance as of
December 31,2013 is $6,685,745, and direct that the Company accrue carrying charges on this
balance as ofthat date.
Given the rapidly decreasing energy savings, the third-party critique of the Company's
marketing activities, and Staff s concerns about program delivery and offerings, Staff further
recommends that the Commission direct Idaho Power to provide the EEAG with a DSM action
plan explaining how the Company will increase its acquisition of cost-effective energy efficiency
over the next year. The plan should include, but not be limited to, pilot programs and program
delivery adaptations designed to address difficult to serve customer populations, independent
third-party evaluation recommendations that will be adopted, new strategies to increase
marketing effectiveness (including customer representative training, contractor outreach, and
trade ally partnerships), as well as projections for program budgets, marketing budgets, energy
savings acquisitions, and cost-effectivenes s ratio s.
Respecttully submitted this Vq$Xr*of July 2014.
Technical Staff: Stacey Donohue
Donn English
Nikki Karpavich
Matt Elam
i :/umisc/comments/ipce I 4.4npdesdnk comments.doc
Deputy Attorney General
STAFF COMMENTS 13 JULY 29,2014
T12 Lamps Are So Yesterday
To improrc lighdng energy efficiency, nerv
nadonal standards for the manufacrure of
Iinear flusescent lamps became effecdrre
on fuly 14, Z)12. ManyTl2 linear lluorcsent
lamps did not meet the nor rcquirements
and can no longerbemanufacturedor
irnported forsale ln the Unlted Srrtes
lf you harn Tl2 lamps in your commercial
building don't wait to stan savlng more
energy and oqerienclng bener-quality
lighting. Upgra& nou, to the more efficlent
TEorTS ffxture* EffidentTS technolory
provides better fight quatity, requlres
less malntenance and gives off less heat,
redwing air.condidoning load In addidon,
ldaho Pourer has energy effidency pmgrams
thatoffer cash lnccntirc to qualiSlng
prolects that make the upgrade this year,
the combinadon of reduced energy use
and cash incentives for qudi$lng prorects,
makes for an atuacfirc retum on )our
lnvestrnentwhen upgrading to more
efficient lighdng systems
Wlry wait to rnake the wltdr from Tl2 to
TS lighdngf Take thissep to reduce your
operadng costs, increase liglrt quality and
receive acash lncentive from ldaho Powet
To check eligibility requhments and
arailable incendrres, talk rvith pur ldaho
Power customer representadvg lour
elecrical confactor or visit us online.
Medium Commercial
Electric Service
Monthly rost for 40 kW and 14.[fi) kWh, as ol tdy 1, 201 2
,ourcer [dison Eh(rk lnstitute,
Typical Bills and Aveo0e Rahs ltepoils
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 29th DAY OF JULY 2O!4, SERVED
THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC.E-14-04, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
JULIA HILTON
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
dockets@i dahopower. com
PETER J RICHARDSON
RICHARDSON ADAMS PLLC
5I5 N 27TH ST
BOISE ID 83702
E-MAIL : [e-mail]
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
7IO N 6TH STREET
BOISE ID 83702
E-MAIL: [e-mail]
DARLENE NEMNICH
TAMI WHITE
IDAHO POWER COMPANY
PO BOX 70
BOrSE ID 83707-0070
E-MAIL : [e-mail]
twhite@idahopower. com
DR DON READING
6070 HILL ROAD
BOISE ID 83703
E-MAIL : [e-mail]
CERTIFICATE OF SERVICE