20171103Compliance Filing.pdf

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November 3,2017
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Case No. IPC-E-15-03
2017 Annual Compliance Filing - Flex Peak Program End-of-Season Report
Dear Ms. Hanian:
ln Order No. 33292, the ldaho Public Utilities Commission ("Commission") ordered ldaho
Power Company to file a Flex Peak Program end-of-season report within 80 days after the end of
the season. Therefore, enclosed for filing are an original and seven (7) copies of the Flex Peak
Program end-of-season report containing the information requested by the Commission in the
order.
lf you have any questions regarding this filing, please contact Zach Hanis at (208) 388-
2305 or zharris@idahopower. com.
Very truly yours,
RECEIVED
?0l1HOV -3 Pl{ h: 30
Lisa D. Nordstrom
An loAcoRP companv
P.O. Box 70 (83707)
1221 W. ldaho St.
Boise, lD 83702
LDN:kkt
Enclosures
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 3'd day of November 2017 I served a true and
correct copy the 2017 FLEX PEAK PROGRAM END-OF-SEASON REPORT upon the
following named parties by the method indicated below, and addressed to the following:
Commission Staff
Karl T. Klein
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
lndustrial Customerc of ldaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North 6th Street (83702)
P.O. Box 844
Boise, ldaho 83701
Hand Delivered
_U.S. Mail
_Overnight Mail
FAXX Email kal.klein@-p uc.idaho.qov
_Hand Delivered
U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
g reg@ richardsonadams. com
_Hand Delivered
U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand Delivered
U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
Ki Executive Assistant
CERTIFICATE OF SERVICE - 1
An IDACORP Company
2017 FIex Peak Program
End-of-Season An n ual Report
November 3,2017
Table of Contents
Table of Contents.....
List of Tables
List of Figures
lntroduction....
Background...
.. il
..1
.,1
.,2
..3
..3
..4
..8
..8
14
15
16
16
17
Program Details
Program lncentives
Program Results
Participation .........
Operations..............
Load Reduction Analysis...
Program Costs
Benefit-Cost Analysis ........
Customer Satisfaction Results
Program Activities for 2018.....
Conclusion.......
Flex Peak Program Report Page i
ldaho Power
List of Tables
Table 1.
Table 2.
Table 3.
Table 4.
2017 I ncentive Structure.
Realization Rate per Event - 2017.
Realization Rate per Participant for Each Event - 2017.
Annual Program Costs - 2017.
3
...9
.11
.15
List of Figures
Figure {.
Figure 2.
Figure 3.
Figure 4.
Figure 5.
Figure 6.
ldaho Power Service Area .......
2017 Site Participation by Region Based on Nomination............
2017 Site Participation by Business Type Based on Nomination
Range of Nominated Load Reduction (kW)..... .
Average Versus Max Reduction Achieved per Event.......
Average Realization Rate by Each Nomination Size Class.........
5
6
7
9
10
14
Page ii Flex Peak Program Report
ldaho Power Company
lntroduction
The Flex Peak Program ("Program") has been operated by ldaho Power Company
("ldaho Power" or "Company") since 2015. The Program is a voluntary demand response
("DR') program available to large commercial and industrial customers that can reduce
their electrical energy loads for short periods during summer peak days. By reducing
demand on extreme system load days, the Program reduces the amount of generation
and transmission resources required to serve customers. This Program, along with ldaho
Power's other DR programs, lrrigation Peak Rewards and the ResidentialAir Conditioner
Cycling Program, have helped delay the need to build supply-side resources.
The results presented in this report are from the 2017 Program season, the Company's
third year of operating the Program. ln its third year, the Program maintained similar load
reduction and realization rates as the prior year (2016). There were five new sites added
and overall participation resulted in the highest hourly load reduction for the season of 36
megawatts ("MW"). The average realization rate for the three load reduction events that
occurred in the 2017 Program season was 81 percent. Enrollment in the Program
increased for the 2017 Program season and 99.3 percent of previously participating sites
re-enrolled in the Program. The total Program costs through October 1, 2017, were
$635,453. The cost of having this resource available was $17.65 per kilowatt ('kW")
based on the maximum demand reduction of 36 MW achieved on June 26,2017.
Background
ln 2015, the Company requested approval to implementthe Flex Peak Program as an
ldaho Power operated program. The ldaho Public Utilities Commission ("lPUC") approved
the Company's request in Order No. 33292, and the Public Utility Commission of Oregon
("OPUC") accepted the proposal from Advice No. 15-03. Prior to 2015, a similar DR
program for commercial and industrial customers was operated by a third-party vendor.
As part of Advice No. 15-03, the OPUC adopted Staff's recommendation that the
Company file an annual end-of-season report with information regarding the Program.
The Company was also directed by the IPUC in Order No. 33292 to file an annual end-
of-season report detailing the results of the Program. ln compliance with the reporting
requirements, the annual end-of-season report includes the following:
. Number of participating customerso Number of participating siteso MW of demand response under contracto MW of demand response realized and incented per dispatcho Percent of nominated MW achieved in each dispatch event by participanto Cost analysis of the Programo Number of events calledo Total load dropped for each event. Event durationo Total capacity payments made
Flex Peak Program Report Page 1
ldaho Power Company
o Total energy payments made. Number of customers who failed to meet their loado Number of Program applications denied due to Program subscription limit. Benefits identified with each dispatch of the resource. Assessment of whether the trigger or dispatch price is properly set to utilize the
asset most often. Participantattritiono lssues the utility has identified meeting requests to participate in the Program. Changes in baseline methodology taken or anticipated. lmprovements ldaho Power and the Program might benefit from
Program Details
The Program pays participants a financial incentive for reducing load within their facility
and is active June 15 to August 15, between the hours of 2 p.m. and 8 p.m. on non-holiday
weekdays.
Customers with the ability to nominate or provide load reduction of at least 20 kW are
eligible to enroll in the Program. The 20 kW threshold allows a broad range of customers
the ability to participate in the Program. Participants receive notification of a load
reduction event ("event") two hours prior to the start of the event, and events last between
two to four hours.
The parameters of the Program are in Schedule 761 in Oregon and ScheduleS22 in ldaho,
and include the following:
a
a
A minimum of three load reduction events will occur each Program season
Events can occur any weekday, excluding July 4, between the hours of 2 p.m. and
8 p.m.
Events can occur up to fourhours per day and up to 15 hours per week, but no
more than 60 hours per program season.
a ldaho Power will provide notification to participants two hours prior to the initiation
of an event.
lf prior notice of a load reduction event has been sent, ldaho Power can choose to
cancel the event and notify participants of cancellation 30 minutes prior to the start
of the event.
I ldaho Power Company, P.U.C. ORE. No. E-27, Schedule 76
2 ldaho Power Company, l.P.U.C. No. 29, Tariff No. 101, Schedule 82
a
o
Page2 Flex Peak Program Report
ldaho Power Company
Program lncentives
The Program includes both a fixed and variable incentive payment. The fixed incentive
is calculated by multiplying the actual kW reduction by $3.25 for weeks when an event is
called or the weekly nominated kW amount by $3.25 for weeks when an event is not
called. The variable energy incentive is calculated by multiplying the kW reduction by the
event duration hours to achieve the total kilowatt-hour ("kWh") reduction during an event.
The variable incentive payment is $0.16 per kWh and is implemented for events that occur
after the first three events.
The Program also includes an incentive adjustment of $2.00 when participants do not
achieve their nominated amount during load reduction events. This adjustment amount
is used for the first three events. After the third event, the adjustment is reduced to $0.25
per kW. lncentives are calculated using ldaho Power's interval metering billing data and
participants received the incentive checks within 30 days of the end of the Program
season. Participants were mailed their incentive checks or had their ldaho Power account
credited by September 15 in 2017 . The incentive structure offered for the 2017 season
is listed in Table 1.
Table 1.
Fixed-Capacity Payment Rate*Variable Energy Payment Rate**
$3.25 per Weekly Effective kW Reduction $0.16 per kWh (Actual kW x Hours of Event)
Adjustment for first three events
$2.00 per kW not achieved up to nomination
Adjustment after first three events
$0.25 per kW not achieved up to nomination
*To be prorated for partialweeks **Does not apply to first three Program events
Program Results
The results presented throughout this report are at the generation level and system losses
have been considered. ldaho Power called three load reduction events in2017. The first
event occurred on June 26, the second on July 14, and the third on August 2. The
maximum realization rate during the season was 98 percent and the average for all three
events combined was 81 percent. The realization rate is the percentage of load reduction
achieved versus the amount of load reduction committed for an event. The highest hourly
load reduction achieved was during the June 26 event at 36 MW.
Participants had a committed load reduction of 35.1 MW in the first week of the Program.
This weekly commitment, or "nomination", was comprised of 65 customers participating
in the Program totaling 141 sites. Out of the total number of sites, 136 sites participated
in the 2016 season, and five sites were newly added in 2017. The committed load
reduction at the end of the season was 35.8 MW and was the peak committed load
reduction for the season.
Flex Peak Program Report Page 3
ldaho Power Company
The first event was called on Monday, June 26. Participants were notified at 2 p.m. for a
four-hour event from 4-8 p.m. The total nomination for this event was 35.1 MW. The
average load reduction was 34.4 MW. The highest hourly load reduction was 36 MW
during hour three. The realization rate for this event was 98 percent.
The second event was called on Friday, July 14. Participants were notified at 2 p.m. for
a four-hour event from 4-8 p.m. The total nomination for this event was 35.4 MW. The
average load reduction was 26.4 MW. The highest hourly load reduction was 28.4 MW
during hour one. The realization rate for this event was 75 percent. The lower realization
rate for this event was primarily due to some larger sites that ran reduced shifts on Fridays
as well as a lower participation overall due to the timing with the weekend.
The third event was called on Wednesday, August 2. Participants were notified at 2 p.m.
for a four-hour event from 4-8 p.m. The total nomination for this event was 35.8 MW. The
average load reduction was 25.1 MW. The highest hourly load reduction was 25.5 MW
during hour two. The realization rate for this event was 70 percent. The lower realization
rate for this event was primarily due to some larger sites that underperformed or had
reduced participation due to operational needs of the sites and one larger customer with
seven sites that did not participate at all due to operational constraints for this specific
customer.
Participation
The number of sites enrolled in the Program for 2017 was 141 from 65 customers, with
five new sites enrolling for the Program season. The average number of sites enrolled
per participating customer was 2.2. The Program did not experience significant attrition
and re-enrollment in the Program was high as 136 of the 137 sites participating from the
prior season re-enrolled. One site did not re-enroll from the 2016 season because the
site believed the Program would not fit its business operations for the 2017 season due
to major renovation at the site location and an expansion of their business which would
greatly affect their summertime operation.
!n response to Program participant requests, ldaho Power utilized a new auto-enrollment
option for the 2017 season. Existing participants were re-enrolled in the Program
automatically and mailed a confirmation packet based on the prior year's enrollment
information. Participants notified the Company in writing if they no longer wanted to
participate. This new auto-enrollment implementation was successful and many
customers voiced positive feedback regarding the change.
While ldaho Power did not actively market the Program, the Company has continued to
strive to increase the number and size diversity (in terms of nominated load reduction) of
sites enrolled. Since the effort was placed on recruiting more diversity in the Program,
the number of sites ranging from 50-200 kW has grown substantially the last two seasons
from 32 in 2015 to 69 in 2017 .
Page 4 Flex Peak Program Report
ldaho Power Company
Pursuant to the Settlement Agreement approved in IPUC Case No. IPC-E-13-143 and
OPUC UM 1653+ ("Settlement"), ldaho Power did not actively market the Program prior
to the 2017 season as enrolled capacity was maintained at approximately 35 MW, which
was the amount agreed upon in the 2013 Settlement. The Company did not deny any
Program applications in 2017.
Figure 1 represents ldaho Power's service area divided into five regional areas
Western, Canyon, Capital, Southern, and Eastern.
Figure 1.
3 ln the Matter of the Continuation of ldaho Power Company's A/C Cool Credit, lrrigation Peak
Rewards, and FlexPeak Demand Response Programs for 2014 and Beyond, Case No. IPC-E-13-14,
Order No. 32923.
a ln the Matter of ldaho Power Company, Staff Evaluation of the Demand Response Programs,
UM 1653, Order No. 13-482.
STERN
ON
STE
a
Challis.
a
E
CA
6
i61
6
t'*'ea
aAflmon
a LU
@
Fells
'John oay
ta
Bumsa
C
Smihlierda
Flex Peak Program Report Page 5
@THERN
ldaho Power Company
Figure 2 represents the enrolled capacity (total nominations) that were enrolled in 2017
and the distribution by ldaho Power's regional service areas.
Figure 2.
2OL7 Site Participation By Region Based On
Nomination
Canyon
Western
Page 6 Flex Peak Program Report
8%
37%
Capital
22%
Eastern
t2%
Southern
2t%
ldaho Power Company
Figure 3 represents the enrolled capacity in 2017 and the diversity based on business
type.
Figure 3.
2OL7 Site Participation By Business Type Based
On Nomination
Agriculture
5o/o Commercial Property
8%Other
2%
Education
3o/o
Light lndustrial
6%
Government
4%
Flex Peak Program Report Page 7
Food Processing
t8%
Refrigerated
Warehouse
LL%
Asphalt, Concrete,
Gravel
30Yo
Water &
Wastewater
Treatment
Facility
\
L3/o
ldaho Power Company
Operations
lnterval metering data provides ldaho Power the ability to view all participants' load after
events. This metering data was used to calculate the reduction achieved per site during
load reduction events. Using this data, ldaho Power provided participants post-event
usage reports that showed hourly baseline, actual usage, and reduction during an event.
The data assisted participants in refining their nomination for future events. This data
also provides information useful in determining which participating sites may have
opportunity to provide more reduction or change their reduction strategy if nomination
amounts were not achieved.
Load Reduction Analysis
An evaluation of the potential load reduction impacts in 2017 were conducted internally
by ldaho Power. The goal of the review performed by ldaho Power was to calculate the
load reduction in MW for the Program. The analysis also verified load reduction per site
and per event.
The baseline methodology used in 2017 is the same methodology utilized in prior
seasons. The baseline that load reductions are measured against during load reduction
events is calculated using a 1O-day period. The baseline is the average kW of the highest
energy usage days during the event availability time (2-8 p.m.) from the highest three
days out of the last 10 non-event weekdays. lndividual baselines are calculated for each
facility site. Once the original baseline is calculated, there is an adjustment included in
the methodology called the Day-of-Adjustment ("DOA") that is used to arrive at the
adjusted baseline.
Adjustments address situations where load is lower or higher than it has historically been
and the baseline does not accurately reflect the load behavior immediately prior to the
event. The DOA is applied to each site's original baseline by accounting for the difference
between the average baseline kW and the average curtailment day kW during hours 2-3
prior to the start of the event. The DOA is calculated as a flat kW and is applied to all
baseline hours and capped at +/- 20 percent of the original baseline kW. The DOA is
symmetrical, having either an upward or downward adjustment to the baseline, and is
applied to the original baseline kW for each facility site for each hour during the Program
event. The Company does not expect or anticipate any changes to the baseline
methodology for the upcoming season.
Page 8 Flex Peak Program Report
ldaho Power Company
As Figure 4 below depicts, the most commonly nominated load reduction was in the 0-50
kW range, accounting for approximately 40 percent of the sites.
Figure 4.
Table 2 shows the Program realization rates for 2017 based on average load reduction
per event.
Table 2.
* Eased on average rcduction
Range of Nominated Load Reduction (kW)
60
55
50
-45
.E ,o
t4 gs
o30
P
=25fo209ts
L0
5
0
55
50
r20t7
.20t6
0-50 51-200 201-500
Nominated amount
501+
Curtailment
Event
Event
Timeframe
Nominated
Demand
Reduction
Average
Demand
Reduction
(MW)
Max Demand
Reduction
(Mw)
Realization
Rate*
June 26 4-8 pm 35.1 34.4 36 98o/o
July 14 4-8 pm 35.4 26.4 28.4 75o/o
August 2 4-8 pm 35.8 25.1 25.5 70o/o
Average 35.4 28.6 30 81o/o
Flex Peak Program Report Page 9
ldaho Power Company
Figure 5 below shows both the average and peak demand reduction achieved during
each of the three curtailment events. The maximum demand reduction achieved ranged
from a low of 25.5 MW for the August 2 event to a high of 36 MW for the June 26 event.
The August 2 event's 25.5 MW reduction achieved a realization rate of 70 percent, while
the June 26 event's 36 MW reduction achieved a realization rate of 98 percent.
Combined, the three events had an average realization rate of 81 percent.
The realization rate analysis shows that maximum load reduction was achieved in the first
third of the Program season during the first event, which correlates with ldaho Power's
overall summer system peak of late June/early July.
Figure 5.
Average Versus Max Reduction Achieved Per
Event40
35
g'o
Er.
vt
820
=(u 1qoo '-oEro
r Average Demand
Reduction
I Max Demand
Reduction
5
0
June 26th July 14th
Event Date
August 2nd
Page 10 Flex Peak Program Report
ldaho Power Company
Table 3 shows the realization rate for each participant in the Program for 2017
Table 3
Participant
Number
June 26 Event
Realization
August 2 Event
Realization
Season
Realization
1 1060/o 34o/o 71o/o 71o/o
2 66%760/o 80o/o 74o/o
3 113o/o 260/o 29o/o 560/o
4 560/o 9Oo/o 101o/o 82o/o
5 7Oo/o 39o/o 24o/o 45o/o
6 460/o 88o/o 77o/o 70o/o
7 141o/o 143o/o 118o/o 134o/o
8 215o/o 1260/o 147o/o 1630/o
9 2o/o 84o/o 139o/o 75o/o
10 1o/o 4o/o 20o/o 9o/o
11 460/o 48o/o 54o/o 5Oo/o
12 64o/o 51o/o 53o/o 560/o
13 97o/o 630/o 2o/o 54o/o
'14 44o/o 97o/o 117o/o 860/o
15 27o/o 3o/o 3Qo/o 20o/o
16 0o/o 49o/o 35o/o 28o/o
17 131o/o 41o/o 42o/o 71o/o
t8 260/o 79o/o 113o/o 73o/o
19 179o/o 143o/o 154o/o 159o/o
20 179o/o 121o/o 148o/o 149o/o
21 61o/o 113o/o 4Oo/o 71o/o
22 154%104o/o 15o/o 91o/o
Flex Peak Program Report Page 11
July t4 Event
Realization
ldaho Power Company
24 2o/o 4o/o 1Oo/o 5o/o
25 17o/o 4Oo/o 192o/o 83o/o
26 195o/o o%89o/o 95o/o
27 24o/o 43%4o/o11 60%
28 1O9o/o 40o/o 28o/o 59o/o
29 14Qo/o 3o/o11 135o/o 129o/o
30 187o/o 98o/o 41o/o 109o/o
31 560/o 5o/o 160/o 25o/o
32 147o/o 14Oo/o 123o/o 137o/o
33 209o/o 7o/o 193o/o 1360/o
34 154o/o 122o/o 123o/o 133o/o
35 760/o 112o/o 5o/o11 101o/o
36 489o/o 0o/o Oo/o 1630/o
37 1o/o 35%92o/o o/o11
38 97o/o 67o/o 82o/o 82o/o
39 172o/o 1860/o 61o/o 140o/o
40 152o/o 71o/o 90o/o 1O4o/o
41 2o/o 0o/o 60/o15o/o
42 154o/o 0o/o Oo/o 51o/o
43 3o/o11 71o/o 22o/o 690/o
44 58o/o 7o/o 88o/o 51o/o
45 167o/o 173o/o 1860/o 175o/o
46 o/o11 260/o 44o/o 27o/o
47 273o/o 125%131o/o 1760/o
23 15o/o 630/o 0o/o 260/o
Flex Peak Program ReportPage 12
ldaho Power Company
49 65%53o/o 9o/o 42o/o
50 24o/o 2oo/o 29o/o 24o/o
51 65o/o 0o/o 25o/o 3Oo/o
52 760/o 79o/o 30o/o 620/o
53 102o/o 82o/o 89o/o 91o/o
54 4o/o 199o/o 67o/o 90o/o
55 82%1260/o 97o/o 101o/o
1630/o56 14o/o 0o/o 59o/o
57 137o/o 29o/o 129o/o 98o/o
58 77o/o 67o/o 15o/o 53o/o
59 94o/o 91o/o 1O1o/o 960/o
60 660/o 82o/o 79o/o 760/o
61 247o/o 83o/o 60/o11 148o/o
760/o62 19o/o 0o/o 32o/o
63 80o/o 44o/o 18o/o 47o/o
54 690/o 94o/o 83o/o 82o/o
65 72o/o 7Qo/o 2o/o 48o/o
48 770o/o 0o/o Oo/o 257o/o
Broken out across four size classes, the sites with the smallest nominated load reduction,
0-50 kW, achieved the highest average realization rate across the three events at 116
percent. The 0-50 kW group had the largest portion of sites enrolled in the Program,
totaling 56 sites that accounted for 40 percent of total enrolled sites. The second smallest
size class, 51-200 kW, had 50 sites enrolled and achieved the lowest average realization
rate at 74 percent. The 201-500 kW group had 26 sites enrolled and achieved a
realization rate of 79 percent. The largest size class, 501+ kW, had nine sites enrolled
and achieved a realization rate of 89 percent. ldaho Power will continue to work with all
customer segments to help refine nominations to align closer with realistic reduction
opportunities which will increase the overall program realization rate.
Flex Peak Program Report Page 13
ldaho Power Company
Figure 6 below represents the realization rate achieved by each nomination group,
averaged across all three events. To calculate the results, each site's average load
reduction (across three events) was divided by its average nomination across the three
events and then grouped by size.
Figure 6
Program Costs
Program costs totaled $635,453 through October 1,2017. lncentive payments were the
largest expenditure comprising approximately 89 percent of total costs. The incentive
payments were fixed-capacity payments resulting from the three events called during the
2017 Program season. The fixed capacity payments totalwas $564,954 and the variable
energy payments total was $0. Variable energy payments were not made during the
season because the variable energy payment is implemented starting with the fourth
event. Preliminarily, the total Program costs for 2017 are estimated to be $17.65 per kW
based on the maximum demand reduction of 36 MW, or $22.22 per kW, based on average
load reduction for the season of 28.6 MW.
Average Realization Rate By Each Nomination
Size Class
oP(!
0c
C
.9Po
.NEoE,
L40%
L20%
L00%
80%
60%
40%
20%
o%
89%
79%
0-s0 51-200 201-500 501+
Range of Nominated Load Reduction (kW)
III
Page 14 Flex Peak Program Report
ldaho Power Company
Table 4 below displays the 2017 year-to-date ("YTD") Program costs by expense
category.
Table 4.
Expense Gategory 2017 YTD Program
Costs
Materials & Equipment
Contract Services
Marketing & Administration
lncentive payments
Tota!
$785
$11,018
$58,696
$564,954
$635,453
Benefit-Gost Analysis
The Benefit-Cost analysis for the Program is based on a 20-year model that uses financial
and demand-side management alternate cost assumptions from the 2015 lntegrated
Resource P/an ("lRP"). The Settlement, as approved in IPUC Order No. 32923 and
OPUC Order No.13-482, established a new method for valuing DR and defined the
annual cost of operating ldaho Power's three DR programs for the maximum allowable
60 hours as no more than $16.7 million. This amount was reevaluated in the 2015 IRP,
as agreed upon in the Settlement, to be $18.5 million.
ln 2017, the preliminary cost estimate of operating all three of ldaho Power's DR programs
was $8.5 million through October 1,2017. lt is estimated that if the three programs were
dispatched for the full 60 hours, the total costs would have been approximately
$12.4 million, which is below the total annual costs agreed upon in the Settlement as
revised in the 20151RP.
ldaho Power's cost-effectiveness evaluation for DR programs is updated annually. A
more comprehensive cost-benefit analysis will be included in the Company's Demand-
Side Management 2017 Annual Report when all the data will be available.
ldaho Power believes the purpose of demand response is to minimize or delay the need
to build new supply-side peaking generation resources and to reduce load during extreme
system peaks. The benefits of having the Program available, and with each load
reduction event, provide ldaho Power a supply side resource to mitigate any system peak
deficits. DR helps fulfill the current system capacity need and prolongs the need to build
new generation resources.
The Company believes by calling at least three events per season the Program will be
more effective in providing consistent and reliable reduction. Having a minimum of three
events allows the Company to test processes and software and helps customers fine tune
their curtailment plan. The Company did not call more than three load reduction events
Flex Peak Program Report Page 15
ldaho Power Company
during the 2017 Program season because ldaho Power's generation resources were
sufficient to satisfy system load. However, in all three events the Program provided a
resource to assist in balancing the wind forecast when that forecast did not always align
with ldaho Power's peak load, as well as potentially avoiding additional market purchases.
Based on market prices for each of the days in 2017 the Program was dispatched, ldaho
Power estimates the Program saved a total of $27,000 worth of energy purchases.
The variable energy price for utilizing the Program after the third event is $0.16/kWh and
could be considered the dispatch price for calling load reduction events beginning with
the fourth event. The price of $0.16/kwh is typically higher than the energy market price.
The Company believes the variable energy price is appropriate because having a
dispatch price below $0.16/kwh could cause the Company to call events more frequently
resulting in reduced participant performance and event fatigue. The Company also
believes that a lower dispatch price to trigger more load reduction events could send the
wrong signal regarding the purpose of the Program and DR.
Gustomer Satisfaction Results
ldaho Power did not conduct a post-season survey this year as there were not significant
changes made to the Program from the last two seasons. The prior two year's surveys
were favorable and the Company believes conducting a survey every 2-3 years will
reduce survey fatigue considering this customer segment also participates in the quarterly
Customer Satisfaction Research Suruey conducted by Burke, lnc.
Program Activities for 2018
The primary improvement ldaho Power and the Program could benefit from is a more
consistent and firm load reduction when events are called. The Company will continue
to communicate the value proposition with enrolled customers and the importance of
active participation when events are called. Recruitment efforts for the 2018 season will
begin the first quarter of 2018 to encourage participation. ldaho Power will meet with
existing participants during the off-season to discuss past-season performance and
upcoming season details.
The Program will be jointly marketed along with ldaho Power's applicable energy
efficiency programs as needed. The Company will utilize its Customer Representatives
to retain the currently enrolled sites and encourage new sites to participate.
For the upcoming season, ldaho Power plans to focus on retaining currently enrolled
customers. While ldaho Power does not plan to actively market the Program, it will enroll
new customers that show interest and are a good fit for the Program.
Page 16 Flex Peak Program Report
ldaho Power Company
Conclusion
The Program currently contributes approximately 10 percent of the Company's overall
DR portfolio and can be relied on to provide dispatchable load reduction to the electrical
grid. When analyzing the Program at the generation level, industrial and commercial
customers have made noteworthy contributions to ldaho Power's DR programs. The
Program had a total of 141 sites reducing peak demand by 36 MW. The Program retained
99.3 percent of past enrolled sites (136 of 137) from the prior season and added five
additional sites in 2017. Load reduction event results showed maximum reductions of 36,
28.4, and 25.5 MW, respectively, for the three events, with an average of 30 MW. The
events achieved realization rates of 98 percent, 75 percent, and 70 percent, respectively,
averaging 81 percent for the season. The total Program costs for 2017 through October
1st were $635,453. The cost of having this resource available was $22.22 per kW based
on average reduction (28.6 MW) for the season.
Flex Peak Program Report Page 17