20150729Reply Comments.pdf

LISA D.NORDSTROM (ISB No.5733)EEC.
Idaho Power Company
1221 West Idaho Street (83702)2B JUL 29
P.O.Box7O
Boise,Idaho 83707 I c .....‘Telephone:[phone]
Facsimile:[phone]
lnordstrom(idahopower.com
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR A )CASE NO.IPC-E-1 5-06
DETERMINATION OF 2014 DEMAND-)
SIDE MANAGEMENT (“DSM”)EXPENSES )IDAHO POWER COMPANY’S
AS PRUDENTLY INCURRED.)REPLY COMMENTS
)
Idaho Power Company (“Idaho Power”or “Company”)respectfully submits the
following Reply Comments in response to comments filed by the Idaho Public Utilities
Commission (“Commission”)Staff (“Staff’),the Idaho Conservation League (“ICL”),and
the Industrial Customer’s of Idaho Power (“ICIP”).Idaho Power appreciates the
thoughtful comments provided in this case and notes that both Staff and ICL
recommend that the Commission find that the Company’s 2014 DSM-related
expenditures were prudently incurred.In these Reply Comments,the Company merely
wishes to clarify or respond to a few of the issues raised in comments.
IDAHO POWER COMPANY’S REPLY COMMENTS -1
A.The Idaho Energy Efficiency Rider (“Rider”)Ending Balance.
Idaho Power would like to clarify that the correct 2014 Rider ending balance is
($782,231)and not ($781,078)as indicated on page 4 of Staffs comments.The
difference between the two is an accounting adjustment of $1,153 related to 2014
activity that was recorded in 2015.The explanation of this adjustment is in Exhibit No.I
of the Direct Testimony of Darlene Nemnich (“Nemnich Testimony”).This 2015
accounting adjustment will be reflected in the 2015 Rider ending balance.The 2014
Rider ending balance is shown on page 167 of Idaho Power’s Demand-Side
Management 2014 Annual Report (“DSM 2014 Annual Report”)and on page 18 of the
Nemnich Testimony as “Balance as of December 31,2014”is ($782,231).While this
confusion may have been caused by the addition of a row titled “Adjusted Balance as of
December 31,2014”as ($781,078)in the Nemnich Testimony,page 18,the Company
believes the ending balance of ($782,231)is the appropriate number to use as the
starting point for next year’s DSM expense review.
B.The Ability to Achieve Energy Efficiency Resource Targets is Not Entirely
within the Company’s Control.
On page 5 of Staff’s Comments,Staff stated that the increase in energy
efficiency savings in 2014 “demonstrates that the Company’s ability to achieve energy
efficiency resource targets is largely within its control and is not determined by outside
factors.”While the Company appreciates Staff’s recognition of the contributions the
Company made to achieve these targets,and agrees the Company directly influences
energy efficiency achievement,it is important to recognize that many other factors that
also directly influence energy efficiency achievement are not within the Company’s
IDAHO POWER COMPANY’S REPLY COMMENTS -2
control.It would be erroneous to attribute annual increases or decreases in energy
efficiency savings solely to the Company’s actions.
Many of the more complex projects in the Commercial/Industrial sectors have
substantial savings associated with them and can take years to complete.The timing of
these projects might have to do with capital budget processes or other internal factors
that are unique to each business and not within Idaho Power’s control.Other factors,
such as changes in codes and standards,successful market transformation,or the state
of the local and national economy can also dramatically influence customers’energy
efficiency project decisions,which directly affect program savings,applicability,or cost-
effectiveness.As discussed more thoroughly on pages 7-10 of the Company’s Reply
Comments filed in Case No.IPC-E-14-04,these factors are not within Idaho Power’s
direct control.
C.The Company Has Not Imposed New Documentation Requirements on
Participants.
Staff commented on pages 7-8 that Idaho Power’s documentation is overly
burdensome and referenced page 119 in Idaho Power’s DSM 2014 Annual Report to
demonstrate that the Company has implemented new documentation requirements.
Idaho Power is confused by these assertions as page 119 is in the Easy Upgrades
program section;in 2014 there were no new documentation requirements for this
program,nor was there any reference to new documentation requirements in this
section.In fact,this page of the report describes how the Company continued
contracting with a third party to provide trade ally training and support,which includes
paperwork submittal by the trade ally contractor.The DSM 2014 Annual Report states
IDAHO POWER COMPANY’S REPLY COMMENTS -3
on page 119 that Idaho Power focused on steps “to increase the accuracy and
thoroughness of incoming paperwork to the program,”not to add to it.
The Company continues to strive toward only requiring documentation that is
necessary to:(1)demonstrate proof of purchase and equipment specifications,(2)
have documentation available for auditing and evaluation purposes,(3)support internal
quality control purposes,and (4)demonstrate prudent use of customer funds.
D.The Company Continues to Investigate,Rather than Move Forward,on
Some New Programs.
On page 9 of its Comments,Staff states that in response to discovery,“the
Company confirmed that it is moving forward”with several new energy efficiency
programs or measures.Idaho Power believes that this statement could be
misinterpreted to imply that Idaho Power is moving forward with implementing and
offering these new ideas to customers,and would like to clarify the Company’s
intentions.In response to Staffs discovery requests,Idaho Power provided a list of the
new ideas that had been submitted to the Program Planning Group for consideration
and investigation.The Company is committed to moving forward with investigating
and/or analyzing these ideas;however,some may be viable and some may not.
Regardless of the outcome of its due diligence efforts,the Company intends to keep the
Energy Efficiency Advisory Group (“EEAG”)informed of progress on the items.
E.Idaho Power Disagrees that the Company andlor Commission Should
Focus on the Utility Cost Test as a Better Measure of Cost-Effectiveness.
On page 10 of Staff’s Comments,Staff suggests that the Utility Cost Test (“UCT”)
(sometimes called the Program Administrator Cost Test)is a better measure of cost
IDAHO POWER COMPANY’S REPLY COMMENTS -4
effectiveness than the Total Resource Cost (“TRC”)test.ICL also recommends that the
focus should be on the UCT results to determine prudency.ICL’s Comments,page 2.
In Case No.IPC-E-01-13,Commission Order No.28894 states:
To screen the cost-effectiveness of potential DSM projects,
the advisory group shall use the following tests:total
resource cost,utility cost and participant cost.However,
these tests are merely guidelines that should not used to
exclude projects that may be desirable as good public policy.
Order No.28894,page 7.
Idaho Power believes each test provides value and that including all tests when
evaluating program performance is best practice.1 Additionally,Idaho Power offers very
similar programs in both of its jurisdictions to optimize program administration and
minimize customer confusion.The Public Utility Commission of Oregon directed
program administrators to use the TRC in determining the cost-effectiveness of energy
efficiency measures and programs.Public Utility Commission of Oregon Order No.94-
590,page 14.
Despite the foregoing,Staff and ICL both advocate that the UCT is a better
measure of cost-effectiveness.If the Commission believes the above language from
Order No.28894 should be clarified to give greater weight to the UCT,Idaho Power
requests the Commission do so in its order in this matter so that Idaho Power is aware
that this is the Commission’s intent going forward.For instance,the Commission could
clarify its language from Order No.28894 to read as follows:
1”Best Practices in Energy Efficiency Program Screen:How to Ensure that the Value of Energy
Efficiency is Properly Accounted For”-July 2012,page 14;“California Standard Practice Manual,
Economic Analysis of Demand-Side Programs and Projects”-October 2001,page 6;and “Understanding
Cost-Effectiveness of Energy Efficiency Programs:Best Practices,Technical Methods,and Emerging
Issues for Policy-Makers.National Action Plan for Energy Efficiency”-November 2008,page ES-2.
IDAHO POWER COMPANY’S REPLY COMMENTS -5
To screen the cost-effectiveness of potential DSM projects,
the utility shall use the following tests:total resource cost,
utility cost,and participant cost,with more emphasis placed
on the utility cost test;however,these tests should not
exclude projects or programs that may be desirable as good
public policy.
F.Idaho Power has Complied with the Errata to Order No.33161.
In the errata to Order No.33161 (Case No.IPC-E-14-04),the Commission found
that issues identified in comments warranted “a more in depth review”and directed the
parties to do so “in the context of the Company’s next Integrated Resource Plan filing.”
Staff noted on page 11 of its Comments in this case that “because the ‘issues raised by
Staff and other parties’were largely related to concerns about program delivery,it is not
clear how excluding program delivery from the Integrated Resource Plan discussion
complies with the Commission’s order.”
Idaho Power interpreted the Commission’s directive as requiring it to consult with
its stakeholders --some of whom advise Idaho Power in both the Integrated Resource
Plan Advisory Committee (“IRPAC”)and EEAG contexts.Given that the errata was
issued relatively late in the preparation of the 2015 Integrated Resource Plan (“IRP”),
Idaho Power quickly organized an Energy Efficiency Working Group inviting members of
the IRPAC,public participants in the IRP process,and EEAG.As reported on pages
47-48 of the 2015 IRP filed in Case No.IPC-E-15-19,the Energy Efficiency Working
Group held two public meetings in December 2014 during which it focused on the
treatment of energy efficiency in the resource planning process.Idaho Power
recommended that EEAG’s more specific expertise should continue to be utilized to
provide advice and recommendations to the Company on formulating,implementing,
and evaluating energy efficiency and demand response programs and activities.Idaho
IDAHO POWER COMPANY’S REPLY COMMENTS -6
Power committed to continuing to discuss the program delivery issues identified by
working group participants,by Staff,and by some intervenors in comments filed in Case
No.IPC-E-14-04.By consulting with IRPAC and EEAG participants as it developed its
2015 IRP filing,Idaho Power complied with the spirit of the directive and arguably the
letter of it as well.
G.Idaho Power has Updated the IRPAC on the Progress of its Investigation of
the Value of Deferred Transmission and Distribution for DSM Cost-
Effectiveness Calculations.
In the Energy Efficiency Working Group sessions,Idaho Power committed to
investigate the extent to which transmission and/or distribution benefits result from
energy efficiency measures and programs,as well as the approximate value of such
benefits.Idaho Power has not completed this investigation and Staff correctly notes
that the Company did not present the results of its analysis at the June 2015 IRPAC
meeting.Contrary to Staff’s assertion,however,Idaho Power did present a status
update of its investigation at the May 7,2015,IRPAC meeting.At this meeting,Idaho
Power indicated the study of transmission and distribution investment deferment is
ongoing.Actions to be taken as part of the ongoing study include a review of
transmission and distribution investments related to growth,an evaluation of the
effectiveness of energy efficiency measures and programs in deferring transmission and
distribution investment,and an estimate of the deferral value for those cases with the
potential for transmission and/or distribution investment deferment.
H.The Rider Account Balance Does Not Suggest There Are Systematic
Problems in Management of Funds.
Idaho Power disagrees with ICIP’s contention that there are systematic problems
in management of the Rider funds.ICIP’s Comments,page 3.Since Idaho Power’s
IDAHO POWER COMPANY’S REPLY COMMENTS -7
Rider began in 2002,the Rider balance has been surplus in some years and deficit in
some years.The balance in the Rider account has never influenced Idaho Power’s
pursuit of cost-effective energy efficiency nor indicates any mismanagement of
customer funds.
CONCLUSION
Idaho Power appreciates this opportunity to respond to comments filed in this
case and respectfully requests that the Commission issue an order designating Idaho
Power’s expenditure of $33,495,385 of Rider funds and demand response incentives in
2014 as prudently incurred expenses.Additionally,if the Commission believes the
language from Order No.28894 should be clarified to put more emphasis on the UCT,
Idaho Power requests the Commission do so in its order.
DATED at Boise,Idaho,this 29th day of July 2015.
L A .NORDSTRO
Attorney for Idaho Power Company
IDAHO POWER COMPANY’S REPLY COMMENTS -8
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 29th day of July 2015 I served a true and correct
copy of IDAHO POWER COMPANY’S REPLY COMMENTS upon the following named
parties by the method indicated below,and addressed to the following:
Commission Staff
____Hand
Delivered
Karl Klein X U.S.Mail
Deputy Attorney General
____Overnight
Mail
Idaho Public Utilities Commission
____FAX
472 West Washington (83702)X Email karl.kleinpuc.idaho.ciov
P.O.Box 83720
Boise,Idaho 83720-0074
Industrial Customers of Idaho Power
____Hand
Delivered
PeterJ.Richardson X U.S.Mail
RICHARDSON ADAMS,PLLC
___Overnight
Mail
515 North 27th Street (83702)
____FAX
P.O.Box 7218 X Email peter(drichardsonadams.com
Boise,Idaho 83707
Dr.Don Reading
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Delivered
6070 Hill Road X U.S.Mail
Boise,Idaho 83703
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Mail
___FAX
X Email dreadinq(ämindsprinq.com
Idaho Conservation League
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Delivered
Benjamin J.Otto X U.S.Mail
Idaho Conservation League
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Mail
710 North 6th Street
____FAX
Boise,Idaho 83702 X Email botto(idahoconservation.orc
Snake River Alliance
____Hand
Delivered
Ken Millet,Clean Energy Program Director X U.S.Malt
Snake River Alliance
____Overnight
Mail
P.O.Box1731
___FAX
Boise,Idaho 83701 X Email kmiller(äsnakeriveraIliance.orc
Kirmberly TowØ)Executive As’sistant
IDAHO POWER COMPANY’S REPLY COMMENTS -9