20150108final_order_no_33210.pdf

Office of the Secretary
Service Date
January 8,2O5
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY’S APPLICATION FOR )CASE NO.IPC-E-14-38
AUTHORITY TO FUND ITS CONTINUED )
PARTICIPATION IN THE NORTHWEST )
ENERGY EFFICIENCY ALLIACE )
THROUGH THE ENERGY EFFICIENCY )ORDER NO.33210
RIDER FOR 2015-2019 )
On October 29,2014.Idaho Power Company filed an Application requesting
authorization to continue its participation in the Northwest Energy Efficiency Alliance (NEEA)
for 2015-2019.NEEA is a non-profit organization that encourages energy efficiency in the
Northwest through market transformation by promoting energy efficient products,services,and
practices,and by working in concert with the regional utilities through which NEEA is funded.
Application at 1-2.Idaho Power requests that its participation in NEEA continue to be funded
by the Energy Efficiency Tariff Rider (Schedule 91),a mechanism initiated in 2002 for
recovering the costs of Idaho Power’s demand-side management (DSM)programs.See Order
No.29026.
On November 26,2014,the Commission issued a Notice of Application and Notice
of Modified Procedure.Order No.33185.The Industrial Customers of Idaho Power and Snake
River Alliance filed written comments,as did the Commission Staff.Idaho Power advised Staff
it did not intend to file a reply.
BACKGROUND
The Commission first approved Idaho Power’s participation in NEEA in 1997,and
required the Company to defer recovery of its expenditures.Order No.27045.The Commission
later found that participation in NEEA was prudent,and authorized Idaho Power to establish a
reserve of accumulated revenue sharing balances to reimburse it for deferred NEEA expenditures
from 1997-1999.Order No.27877.In 2000,the Commission approved Idaho Power’s
continued participation in NEEA for 2000-2004,allowing Idaho Power to recover its
participation costs through revenue sharing funds.Order No.28333.In 2002,the Commission
authorized the Company to recover the costs for DSM programs and NEEA participation from
the Energy Efficiency Tariff Rider.Order No.29026.
ORDERNO.33210
The Commission increased Idaho Power’s Energy Efficiency Rider in 2005 so the
Company could expand its energy efficiency programs and continue participation in NEEA for
2005-2009.Order No.29784.In 2009,the Commission approved a stipulation between Idaho
Power and Commission Staff,finding the $4 million Idaho Power paid to NEEA during 2002-
2007 was prudently incurred.Order No.30740.In 2010,the Commission again approved Idaho
Power’s request for continued participation in NEEA for 2010-2014.Order No.31080.In that
Order,the Commission noted that —as recognized by Idaho Power —“The Commission’s
approval of the Company’s continued participation in NEEA,and the use of Rider funds to pay
for that participation,is not a determination of prudency.”Id.at 7.Rather,“when Idaho Power
in the future requests a Commission determination that its use of Rider funds was prudent,it
must demonstrate a sufficient benefit to customers resulted from the Company’s participation in
NEEA.”Id.
THE APPLICATION
Idaho Power’s current Application describes the main components of NEEA’s
business plan for 2015-2019.The Company identifies the NEEA activities that it believes will
benefit its customers most,including:(1)activities of the University of Idaho Integrated Design
Lab;(2)Top Tier Trade Ally Advanced Training;(3)commercial lighting initiatives,(4)
residential retail product portfolio;and (5)residential new construction.Application at 6.Idaho
Power’s Application points out that the Company and NEEA have negotiated a Regional Energy
Efficiency Initiative Agreement to help ensure that the Company’s energy efficiency
expenditures are prudent —that is,that they are reasonable and effective.Id.at 6-7.The
Company attached the Agreement to its Application.Application,Attachment 3.
Idaho Power has committed to fund NEEA based on a quarterly estimate of expenses
up to the five-year total direct funding amount of $13,450,835.Application at 9.This amount is
8.97%of NEEA’s $145-169 million budget for 2015-2019.Section 2 of the Agreement
obligates NEEA to deliver 145 average megawatts (aMW)of energy savings,of which at least
8.97%must be developed in Idaho Power’s service area and reported by zip code.Id.at 7-8.
THE COMMENTS
A.Staff Comments
Staff reviewed the Company’s Application,direct testimony,and Agreement with
NEEA.Staff also reviewed prior NEEA accomplishments,NEEA’s current proposal,and Idaho
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Power’s explanation why it opted out of participating in selected NEEA programs and activities.
Staff was concerned that Idaho Power’s decisions to opt out of programs and activities could
affect its ability to obtain additional cost-effective energy savings.However,NEEA does
provide cost-effective energy savings,consistent with prior Commission Orders directing Idaho
Power “to pursue all cost-effective DSM programs.”See Order No.32953 at 10.Accordingly,
Staff recommended the Commission approve Idaho Power’s Application to authorize its
continued participation in NEEA for 2015-2019,funded through the Energy Efficiency Rider,
but subject to prudency review.
In its comments,Staff highlighted NEEA’s successes in promoting energy efficiency
practices in the Northwest.Staff Comments at 3.Staff summarized the terms of Idaho Power’s
Regional Energy Efficiency Initiative Agreement with NEEA.Id.at 7-8.Staff noted that the
Company’s total investment in NEEA for the 2015-2019 funding cycle decreased from $16.5
million to $13.5 million.Id.at 7.Idaho Power’s investment represents about 8.96%of NEEA’s
total budget.Id.at 7.
Staff also summarized NEEA’s 2015-2019 business plan,which identifies four core
strategic markets,and four optional programs.See id.at 4-5.The four optional programs are:
(1)Top Tier Trade Ally Advance Training (TTTA),(2)Commercial Real Estate and Existing
Building Renewal (CRE/EBR),(3)Industrial Technical Training,and (4)Marketing and
Stakeholder Relations.Id.Of these four programs,Idaho Power opted to fund only the TTTA.
Id.at 5.Funding the other three programs would have committed the Company to an additional
$1,679,320 over the five-year cycle.Id.The four optional programs are described below.
1.TTTA.This program targets commercial lighting contractors,training resources,
and utility programs to accelerate market adoption of advanced lighting practices.Id.at 4.
Idaho Power elected to fund this program.
2.CRE/EBR.The focus of this program is to engage and leverage strategic
partnerships between property owners and managers that will advance energy efficiency.Idaho
Power has opted out of this program because it believes this program focuses on large
commercial office buildings that are not as prevalent in Idaho.Id.at 5.Staff acknowledged it is
difficult to convince building owners to invest in energy efficiency projects because energy bills
are often paid by office building tenants.Id.
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ORDER NO.33210
Staff noted that the CRE/EBR program was successful in its 2013 local
implementation of the national program “Kilowatt Crackdown”—a competition between
commercial office buildings to save the most energy.Id.Despite the program’s success in
encouraging energy efficiency awareness and behavioral change,Staff recognized that NEEA is
not offering Kilowatt Crackdown in its 2015-2019 business plan.Id.at 6.Staff encouraged
Idaho Power to implement a similar program that would extend beyond the usual direct incentive
offerings.Id.
3.Industrial Technical Training.Through this program,NEEA contracts with a third
party to offer webinars and in-person industrial technical trainings in Idaho Power’s service
territory.Id.Idaho Power opted out of the program,stating that it can offer similar training at a
lower cost,but acknowledged it does not plan to offer webinars.Id.Staff believes it is
appropriate for the Company to offer lower cost trainings than would be offered (through third-
party contractors)with NEEA,provided that such trainings are equally cost-effective.Id.
However,because webinars can be a cost-effective and convenient way to reach customers,Staff
expressed concern that webinars will not be offered by Idaho Power.Id.Staff indicated it will
revisit the Company’s Industrial Technical Education programs in Idaho Power’s next DSM
prudency review.Id.
4.Marketing and Stakeholder Support.Staff has been critical of Idaho Power’s
DSM marketing practices,most recently in the Company’s 2013 DSM Prudency review.See
Staff Comments at 7 citing Staff Comments in Case No.IPC-E-14-04.After reviewing third-
party evaluations,Staff stated in that prior case that “the lower customer awareness is likely
related to uncoordinated and insufficient marketing practices.”Id.Here,Staff reported that
Idaho Power’s decision to opt out of NEEA’s Marketing and Stakeholder Support “leaves Idaho
Power responsible for creating all marketing,such as website development,press releases,
consumer awareness campaigns,point of purchase design and development,and product display
programs for NEEA’s downstream programs.”Staff Comments at 7.Staff expressed concern
that these “are the same type of marketing tasks that Staff believes the Company needs to
improve upon.”Id.Staff suggested that Idaho Power could “use NEEA funding savings
(approximately $800,000 over 5 years)to bolster marketing and customer awareness of all Idaho
Power energy efficiency offerings.”Id.
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ORDER NO.33210
In sum,with reservations noted,Staff recommended the Commission authorize Idaho
Power to fund NEEA through the Idaho Energy Efficiency Rider for the 2015-2019 funding
cycle.
B.Snake River Alliance Comments
The Snake River Alliance (SRA)stated,“NEEA is deservedly recognized for helping to
secure significant energy savings since 1997.”SRA Comments at 2.SRA applauded Idaho
Power’s successful negotiation of its Agreement with NEEA,but expressed concern that Idaho
Power “initially balk[ed]at continuing to fund NEEA,”before seeking approval to continue
funding NEEA.Id.Thus,SRA quoted approvingly from Idaho Power’s witness Warren Kline,
who acknowledged in his direct testimony that “Idaho Power can better leverage its market
transformation investment by building on NEEA’s pooled resources suppliers,market research,
and program design in the four-state area.”Id.(quoting Kline Direct at 4).SRA concluded,
“We are grateful that Idaho Power was able to reconsider its earlier decision to withdraw its
NEEA funding upon the end of the 2010-2014 funding cycle ...and we recommend that the
Commission approve Idaho Power’s application.”Id.at 3.
C.Comments of the Industrial Customers ofIdaho Power
In its comments,the Industrial Customers of Idaho Power (ICIP)addressed Idaho
Power’s decision not to fund the Industrial Technical Training program.ICIP Comments at 2-3.
ICIP stated that technical training has been a valued element of Idaho Power’s conservation
portfolio,and ICIP “applauds the Company’s intention to continue the program.”Id.at 3.More
specifically,ICIP “supports the Company leaving NEEA for this program and providing the
training itself rather than relying on NEEA.”Id.ICIP believes Idaho Power “has a unique
knowledge of the industrial customers in its service territory and will be able to tailor the classes
and webinars to better address its customers’specific needs.”Id.In ICIP’s opinion,NEEA’s
25-participant limit was too restrictive;ICIP thus approved of Idaho Power’s “decision to
remove the attendance cap.”Id.at 3-4.In sum,ICIP supports approval of Idaho Power’s
application.
DECISION AND FINDINGS
The Commission has reviewed the Application,attachments,and the comments of
Staff,SRA,and ICIP.Based upon our review,we have determined it is appropriate to approve
Idaho Power’s continued participation in NEEA as requested.We specifically find:
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ORDERNO.33210
1.The Commission has encouraged Idaho Power to fund cost-effective DSM and
energy efficiency programs,and Idaho Power’s continued participation in NEEA is consistent
with our prior Orders to this effect.See Order Nos.32953,31080,29784.
2.Although we are approving Idaho Power’s Application,we agree with Staff that
the Company’s marketing practices have suffered from general insufficiency and lack of
coordination.We therefore share Staff’s concern about Idaho Power opting out of NEEA’s
Marketing and Stakeholder Support.In approving the Company’s continued participation in
NEEA,the Commission expects that Idaho Power will bolster its marketing and customer
awareness efforts by using NEEA funding savings.
3.Consistent with prior Orders,our approval of Idaho Power’s continued
participation in NEEA,and the use of Rider funds to pay for that participation,is not a
determination of prudency.Order No.31080 at 7.For a future determination that its use of
Rider funds was prudent,Idaho Power must demonstrate that customers received a sufficient
benefit from the Company’s participation in NEEA.
4.If Idaho Power later concludes NEEA is not a cost-effective resource,or if it
decides to decrease or discontinue funding NEEA,the Company shall notify the Commission as
soon as possible.
ORDER
IT IS HEREBY ORDERED that Idaho Power’s request to continue its participation in
NEEA for 2015-2019,funded through the Energy Efficiency Rider,is approved as requested in
the Application,conditioned upon a subsequent prudency review.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §6 1-626.
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ORDER NO.33210
DONE by Order of the Idaho Public Utilities Commission at Boise.Idaho this
day of January 2015.
Lz JL
ATTEST:
4’
Jn D.JeweHU
Commission Secretary
MARSHA H.SMITH,COMMISSIONER
0:I PC-E-I 4-38dh2
7
PAUL PRESIDENT
MACK A.REDFORD,
ORDERNO.33210