20181102Compliance Filing.pdf

3Effi*.RICEIVEI)
Lisa D. Nordstrom
Lead Counsel
An IDACORP Company
P.O. Box 70 (83707)
1221 W. ldaho 5t.
Boise, lD 83702
r 1' ! . r^! rii.l;t,;-.;*? PP'l lqr 38
Lisa D. Nordstrom
Lead Counsel
[e-mail]
LDN:kkt
Enclosures
cc. Service List
J
lr,-,tr^.,{. t,;I, i , lti-.,,ir.rl:lSi,3f{
November 2,2018
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Case No. IPC-E-15-03
2018 Annual Compliance Filing - Flex Peak Program End-of-Season Report
Dear Ms. Hanian
!n 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 reporting containing the information requested by the Commission in the
order.
lf you have any questions regarding this flling, please contact Regulatory Analyst Paul
Goralski at [phone] or [e-mail].
Sincerely,
RE
KD-C7,*u**)
An TDACORP Company
2018 Flex Peak Program
End-of-Season Annual Report
November 2,2018
Table of Contents
Table of Contents .............
List of Tables
List of Figures
Executive Summary
Background .............
Program Details
Program lncentives
Program Results....
Participation ........
Operations.........
Load Reduction Analysis..
Program Costs
Benefit-Cost Analysis
Customer Satisfaction Results.........
Program Activities for 2019..............
Conclusion..............
................ii
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................ 1
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................3
................3
................4
................8
................8
..............13
',''',........14
..............15
.............. 1 5
.............. 16
2018 Flex Peak Program Report Page i
i
ldaho Power
Table 1.
Table 2.
Table 3.
Table 4.
Figure 1.
Figure 2.
Figure 3.
Figure 4.
Figure 5.
Figure 6.
List of Tables
2018 lncentive Structure.
Realization Rate per Event - 2018.
Realization Rate per Participant for Each Event - 2018. ..
Annual Program Costs - 2018.
ldaho Power Service Area .......
2018 Site Participation by Region Based on Nomination ............
2018 Site Participation by Business Type Based on Nomination
Range of Nominated Load Reduction (kW)
Average Versus Max Reduction Achieved per Event
..............3
..............9
............ 1 1
............15
.5
.6
.7
.9
10
14
Page ii 2018 Flex Peak Program Report
List of Figures
Average Realization Rate by Each Nomination Size Class.......
ldaho Power Company
Executive Summary
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 2018 Program season, the Company's
fourth year of operating the Program. ln its fourth year, the Program maintained similar
load reduction and realization rates as the prior year (2017). There were five new sites
added and overall participation resulted in the highest hourly load reduction forthe season
of 33 megawatts ("MW"). The average realization rate for the three load reduction events
thatoccurred in the 2018 Program season was 89 percent. Enrollment in the Program
virtually stayed the same for the 2018 Program season and 96 percent of previously
participating sites re-enrolled in the Program. The total Program costs through October
1,2018, were $417,819. The cost of having this resource available was $12.66 per
kilowatt ("kW") based on the maximum demand reduction of 33 MW achieved on July 31,
2018.
Background
ln 2015, the Company requested approval to implement the Flex Peak Program as an
ldaho Power operated program. The ldaho Public Utilities Commission ("IPUC")
approved the Company's request in Order No. 33292,1 and the Public Utility Commission
of Oregon ("OPUC") accepted the proposal from Advice No. 15-03.2 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 customers. Number of participating sites
1 ln the Matter of ldaho Power's Company's Application for Approvalof New Tariff Schedule 82, A
Commercialand lndustrialDemand-Response Program (Flex Peak Program), Case No. IPC-E-15-03,
Order No. 33292 (May 7, 2015).
2 Schedule 76, Flex Peak Program, Docket No. ADV 7/Advice No. 15-03 (approved April 28,
2015).
2018 Flex Peak Program Report Page 1
ldaho Power Company
. MW of demand response under contracto MW of demand response realized and incented per dispatch. Percent of nominated MW achieved in each dispatch event by participant. Cost analysis of the Program. Number of events calledo Total load dropped for each event. Event durationo Total capacity payments madeo 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 resourceo Assessment of whether the trigger or dispatch price is properly set to utilize the
asset most ofteno 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 optional Program are set forth in Schedule 763 in Oregon and
Schedule 824 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 perweek, but no
more than 60 hours per program season.
3 ldaho Power Company, P.U.C. ORE. No. E-27, Schedule 76.
a ldaho Power Company, |.P.U.C. No. 29, Tariff No. 101, Schedule 82
a
Page2 2018 Flex Peak Program Report
ldaho Power Company
a ldaho Power will provide notification to participants two hours prior to the initiation
of an event.
If 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.
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 2018. The incentive structure offered for the 2018 season
is listed in Table 1.
Table 1.
o
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 in 2018. The first
event occurred on July 16, the second on July 25, and the third on July 31. The maximum
realization rate during the season was 108 percent and the average for all three events
combined was 89 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 July 31 event at 33 MW.
2018 Flex Peak Program Report Page 3
Participants had a committed load reduction of 29.4 MW in the first week of the Program.
This weekly commitment, or "nomination", was comprised of customers participating in
the Program totaling 140 sites. Out of the total number of sites, 135 sites participated in
the 2017 season, and five sites were newly added in 2018. The committed load reduction
at the end of the season was 29.6 MW and was the peak committed load reduction for
the season.
The first event was called on Monday, July 16. Participants were notified at 2 p.m. for a
four-hour event from 4-8 p.m. The total nomination for this event was 29.4 MW. The
average load reduction was 26 MW. The highest hourly load reduction was 27 MW during
hour two. The realization rate for this event was 88 percent.
The second event was called on Wednesday, July 25. Participants were notified at 2 p.m.
for a four-hour event from 4-8 p.m. The total nomination for this event was 29.3 MW. The
average load reduction was 21 MW. The highest hourly load reduction was 22MW during
hour one. The realization rate for this event was 72 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.
The third event was called on Tuesday, July 31. Participants were notified at 2 p.m. for
a four-hour event from 4-8 p.m. The total nomination for this event was 29.5 MW. The
average load reduction was 32 MW. The highest hourly load reduction was 33 MW during
hour one. The realization rate for this event was 108 percent.
Enrollment specific to the Oregon service territory included six participants totaling nine
sites enrolled. These nine sites had a nominated capacity of 5.6 MW and achieved a
maximum reduction during the season of 6.3 MW during hour four on the July 16 event.
Participation
The number of sites enrolled in the Program tor 2018 was 140 sites from 65 participants,
with five new sites enrolling for the Program season. The average number of sites
enrolled per participating customer was 2.1. The Program did not experience significant
attrition and re-enrollment in the Program was high as 135 of the 141 sites participating
from the prior season re-enrolled. Four sites did not re-enroll from the 2017 season
because the vendor supporting the site's demand response control platform no longer
offered that service. The remaining two sites did not enroll as one business closed and
the other site reduced its operating hours significantly such that it no longer was a good
program candidate.
This past season ldaho Power continued the auto-enrollment option with good success.
Existing participants were re-enrolled in the Program automatically and mailed a
confirmation packet early in March based on the prior year's enrollment information.
Participants notified the Company in writing if they no longer wanted to participate as well
as to change their nomination amount or update/change contact information regarding
personnelfor event notification. The auto-enrollment implementation was successful and
the Company will continue to utilize this process in the future.
Page 4 2018 Flex Peak Program Report
ldaho Power Company
ldaho Power Company
While ldaho Power did not actively market the Program, the Company has worked to
maintain the number and size diversity (in terms of nominated load reduction) of sites
enrolled. The breakout of nomination groups among the sites has stayed very consistent
from the 2017 season with the largest quantity of sites falling within the 0-50 kW segment
followed by 51-200 kW.
Pursuant to the Settlement Agreement approved in IPUC Case No. IPC-E-13-145 and
OPUC Docket No. UM 16536 ("Settlement"), ldaho Power did not actively market the
Program prior to the 2018 season as enrolled capacity was maintained at approximately
35 MW, which was the amount agreed upon in the 2013 Settlement. However, the
Program did have reduced capacity for the 2018 season as one single large customer
reduced its nomination significantly a week prior to the season starting. The Company
did not deny any Program applications in 2018.
Figure 1 represents ldaho Power's service area divided into three regional areas with two
sub areas: Canyon (Canyon West), Capital, and Southern (South East).
Figure 1.
?
)
atJmn
3 ou!h. t rlrR.qlon
I MOilTANA
^r--v\r/- -r
IDAHO
&.
OREGON
a.tr@
aIxlr ,alt!
South-East
&dhota
toardoaalffitcm tar3
"qp
III
aI
,
Region
NEVADA UTAH
s ln the Matter of the Continuation of ldaho Power Company's NC Cool Credit, lrrigation Peak
Rewards, and FlexPeak Demand Response Programs for 2014 and Beyond, Case No. IPC-E-13-14,
Order No. 32923 (Nov. 12, 2013).
6 ln the Mafter of ldaho Power Company, Staff Evaluation of the Demand Response Programs,
UM 1653, Order No. 13-482 (Dec. 19,2013).
2018 Flex Peak Program Report Page 5
aI \
tf
a[((aa
aCx$CaDrron-Westneilon
&r:O r B*lcttc
vrbo t
aftrwfi
'C*rxllt - OEolqfle9)r CapitalRegion
ar*qrt.5 Lm
ldaho Power Company
Figure 2 represents the enrolled capacity (total nominations) that were enrolled in 2018
and the distribution by ldaho Power's regional service areas.
Figure 2.
2018 Participation by Region (and sub areas)
based on Nomination
Page 6 2018 Flex Peak Program Report
/
"l
Southern
260/o
South-East
14o/o
Canyon
1"0%
Canyon-West
23%
Capital
27%
ldaho Power Company
Figure 3 represents the enrolled capacity in 2018 and the diversity based on business
type.
Figure 3.
2OL8 Participation by Customer Segment based
on Nomination
Agricultu re
6%Commercial Property
Other
.3%
Education
4%
Government
5%
2018 Flex Peak Program Report Page 7
9%
Food Processing
2t%
Light lndustrial
7%Refrigerated
WarehouseAsphalt, Concrete,
Gravel
L4%
t5%Water &
Treatment
t6%
ldaho Power Company
Operations
lnterval metering data provides ldaho Power the ability to view all participants' load after
events, and 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 assists 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 2018 was 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 2018 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.
Page 8 2018 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 39 percent of the sites.
Figure 4.
Table 2 shows the Program realization rates for 2018 based on average load reduction
per event.
Table 2
on average rcduction
Range of Nominated Load Reduction (kW)
60
55
50
o45
.E oo
U)gsrtso30
?2s
Bro9rs
10
5
0
54
50
25 .2018
s2017
9
0-s0 51-200 201-500
Nominated amount
501+
I
Curtailment
Event
Event
Timeframe
Nominated
Demand
Reduction
Average
Demand
Reduction
(MW)
Max Demand
Reduction
(Mw)
Realization
Rate*
July 16 4-8 pm 29.4 26 27 88o/o
29.3 21 22 72%July 25 4-8 pm
29.5 33 1O8o/oJuly 31 4-8 pm 32
Average 29.4 26.3 27.3 89o/o
2018 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 22 MW for the July 25 event to a high of 33 MW for the July 31 event. The
July 25 event's 22 MW reduction achieved a realization rate of 72 percent, while the July
31 event's 33 MW reduction achieved a realization rate of 108 percent. Combined, the
three events had an average realization rate of 89 percent.
The realization rate analysis shows that maximum load reduction was achieved in the
middle to late portion of the Program season during the third event.
Figure 5.
Average & Maximum Reduction per Event
32
26 27
2t
July 16th July 25th
IAverage Demand Reduction I Maximum Demand Reduction
July 31st
35
30
75
20
15
10
33
5
0
Page 10 2018 Flex Peak Program Report
ldaho Power Company
Table 3 shows the realization rate for each participant in the Program for 2018
Table 3.
1 14Oo/o 77o/o 172o/o 130o/o
2 17o/o 7Oo/o 9o/o 32o/o
3 74o/o 74o/o 98%82o/o
25o/o 0o/o 44o/o 23o/o4
5 13o/o 0o/o 11o/o 8o/o
6 101o/o 52o/o 87o/o 80o/o
7 557o/o 150o/o 5o/o 237o/o
132%150o/o 1460/o 142o/oI
120o/o 113o/o91060/o 114o/o
10 1960/o 1680/o 140o/o 1680/o
11 Oo/o Qo/o 0o/o Oo/o
12 45o/o 40o/o 44o/o 43o/o
130o/o 121o/o 121o/o13113o/o
14 139o/o 1260/o 69%111o/o
15 103o/o 97o/o 1O1o/o
16 28o/o Oo/o 0o/o 9o/o
54o/o 41o/o 3Oo/o 42o/o17
2160/o 18Oo/o183Oo/o 293o/o
19 104o/o 139o/o 141o/o 128o/o
20 127o/o 204o/o 182o/o 171o/o
137o/o 88o/o 107o/o 111o/o21
760/o 680/o2265o/o 640/o
23 97o/o lQOo/o 112o/o 1O3o/o
24 Oo/o 45o/o 11o/o 19o/o
59o/o 38o/o 75o/o 57o/o25
83o/o 42o/o 760/o26101o/o
27 74o/o 90o/o 97o/o 87o/o
28 15o/o 38o/o 8%20o/o
29 18o/o Oo/o 860/o 35o/o
30 455o/o 132o/o 123o/o 237o/o
8o/o 1$Qo/o 180o/o 122o/o31
14Oo/o 109o/o 121o/o32114o/o
33 Qo/o 55o/o 16%24o/o
34 124o/o 45o/o 129o/o 1O0o/o
35 639%1832o/o 1134o/o
14%20o/o 76%37%36
2018 Flex Peak Program Report Page 11
Participant
Number
July 16 Event
Realization
July 23 Event
Realization
July 31 Event
Realization
2018 Season
Realization
102o/o
932o/o
ldaho Power Company
38 8Oo/o 180o/o 9o/o 89o/o
39 209o/o 171o/o 8640/o 415o/o
40 18o/o 0o/o 0o/o 60/o
41 31o/o 77o/o 0o/o 360/o
42 119o/o 44o/o 57o/o 74o/o
43 153o/o 42o/o 73o/o 89o/o
44 124%130o/o 15o/o 90%
45 25o/o 4Oo/o 44o/o 360/o
46 2o/o 55o/o 14o/o 23o/o
47 119o/o 23o/o 1560/o
48 50Yo 67o/o 97o/o 71o/o
49 0o/o 0o/o Oo/o 0o/o
50 4o/o 19o/o 0o/o 8o/o
51 8o/o 22o/o 38%o 23o/o
52 102o/o 112o/o 111o/o 108o/o
53 360/o 3o/o 35o/o 25o/o
54 61o/o 70o/o 65o/o64o/o
55 64o/o 0o/o 58o/o 41o/o
56 2060/o 43o/o o%83o/o
57 59o/o 74o/o 57o/o 630/o
58 17o/o 3o/o Oo/o 7o/o
59 119o/o 89o/o 960/o 101o/o
60 630/o 123o/o 124o/o 1O4o/o
61 144o/o 960/o 130o/o149o/o
62 11o/o Oo/o 67o/o 260/o
63 2o/o Oo/o 12o/o 4o/o
64 94o/o 103o/o 117o/o 105%
65 74o/o 97o/o 91o/o 87o/o
37 74o/o 47o/o 78o/o 660/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 112
percent. The 0-50 kW group had the largest portion of sites enrolled in the Program,
totaling 54 sites that accounted for 39 percent of total enrolled sites. The second smallest
size class, 51-200 kW, had 52 sites enrolled and achieved the lowest average realization
rate at 65 percent. The 201-500 kW group had 25 sites enrolled and achieved a
realization rate of 100 percent. The largest size class, 501+ kW, had nine sites enrolled
and achieved a realization rate of 109 percent.
ldaho Power will continue to work with all customer segments to help refine nominations
to align closerwith realistic reduction opportunities which will increase the overall program
realization rate.
Page 12 2018 Flex Peak Program Report
3260/o
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 $417,819 through October 1,2018. 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 2018 Program season. The fixed capacity payments total was $371 ,496
and the variable energy payment totalwas $0. Variable energy payments were not made
during the season because the variable energy payment is implemented starting with the
fourth event.
Preliminarily,T the total Program costs for 2018 are estimated to be $12.66 per kW based
on the maximum demand reduction of 33 MW, or $15.89 per kW, based on average load
reduction for the season of 26.3 MW.
7 Final Program costs for 2018 will be available after the close of the Company's 2018 financial
reporting year, December 31 ,2018.
Average Realization Rate
by Each Nomination Size Class
172%109%
oPoEc
.9+,o
.N
(EoG
720%
100%
80%
60%
40%
20%
0%
0-50 51-200 201-500 501+
Range of Nominated Load Reduction (kW)
t00%
65%III
2018 Flex Peak Program Report Page 13
ldaho Power Company
Table4 below displays the 2018 year-to-date ("YTD") Program costs by expense
category.
Table 4.
Expense Gategory 2018 YTD Program
Costs
Materials & Equipment
Marketing & Administration
lncentive payments
Total $417,819
Benefit-Cost Analysis
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 Idaho 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 Benefit-Cost analysis for the Program is based on a 2O-year model that uses financial
and demand-side management alternate cost assumptions from the most recently
acknowledged lntegrated Resource Plan ("lRP") available during budgeting for the
upcoming Program year, the 2015 lntegrated Resource Plan. 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.
The annual value calculation is updated with each IRP based on changes that include,
but are not limited to, need, capital cost, or financial assumptions. This amount was re-
evaluated in the 2015 IRP to be $18.5 million. Under the 2017 !RP, this value is $19.8
million.
ln2018, the preliminary cost estimate of operating allthree of ldaho Power's DR programs
was $7.9 million through October 1,2018. lt is estimated that if the three programs were
dispatched for the full 60 hours, the total costs would have been approximately
$11.1 million, which is below the total annual costs agreed upon in the Settlement as
revised in both the 2015 and 2017 lRP.
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
$1,001
$45,322
$371,496
Page 14 2018 Flex Peak Program Report
ldaho Power Company
during the 2018 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 Load Serving Operators balancing the forecast when it did not align
with actual peak !oad, as well as potentially avoid additional market purchases. Based
on market prices for each of the days in 2018 the Program was dispatched, ldaho Power
estimates the Program saved a total of $20,000 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.
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 2018 Annual Report when all the final 2018 financial data will be
available.
Customer 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 three seasons. The prior two surveys
conducted in 2015 and 2016 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. The Company plans to conduct a post season survey after the 2019 season to re-
evaluate customer satisfaction with the Program offering.
Program Activities for 2019
The primary improvement ldaho Power and the Program could benefit from is a larger
enrolled nominated capacity and more consistent load reduction when events are called.
The Company will continue to communicate the value proposition with enrolled
participants and the importance of active participation when events are called.
Recruitment efforts for the 2019 season will begin the fourth 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 Specialist
has already started meeting with new potential candidates for the 2019 season.
The Program will be jointly marketed along with ldaho Power's applicable energy
efficiency programs as needed. The Company will utilize its field representatives to retain
the currently enrolled sites and encourage new sites to participate.
2018 Flex Peak Program Report Page 15
ldaho Power Company
Both the nomination and achieved reduction amounts decreased in2018 due to one large
customer that reduced its nominated amount in the Program by 65 percent due to market
conditions. This specific customer reduced its enrolled nomination amount on June 5,
2018, after the auto-enrollment had been sent out in early March. This allowed the
Company only 10 days to seek out new candidates to make up the 5 MW reduction.
For the upcoming season, ldaho Power plans to focus on retaining currently enrolled
participants and will actively market the Program. The Company is not seeking to expand
the capacity of the FlexPeak Program, but recognizes there is attrition over time and many
participants may reduce their nomination based on operational and business needs so it
is important to consistently have at least 37-40 MW of nominated capacity available. This
level of nominated capacity will allow events to achieve 35 MW of load reduction
considering the typical realization rate of nominated capacity ranging from 85-95 percent.
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 cost
of having this resource available was $15.89 per kW based on average reduction (26.3
MW) for the season.
Page 16 2018 Flex Peak Program Report