20150414notice_of_application_order_no_33273.pdf

Office of the Secretary
Service Date
April 14,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO.IPC-E-15-06
OF IDAHO POWER COMPANY FOR A )
DETERMINATION OF 2014 DEMAND-SIDE )NOTICE OF APPLICATION
MANAGEMENT EXPENDITURES AS )
PRUDENTLY INCURRED )NOTICE OF
)INTERVENTION DEADLINE
)
)NOTICE OF
)MODIFIED PROCEDURE
)
_______________________________
)ORDER NO.33273
On March 13,2015,Idaho Power Company applied to the Commission for an Order
establishing that,in 2014,the Company prudently incurred $33,495,385 in demand-side
management (DSM)expenses,including $25,554,688 in Idaho Energy Efficiency Rider
expenses and $7,940,697 in demand response program expenses.A utility incurs DSM expenses
by developing and operating programs that are designed to reduce or shift customers’energy
consumption and improve their efficient use of energy.In general,the Commission will allow
the utility an opportunity to recover its DSM expenses through rates if the Commission finds that
the expenses were prudently incurred.If,however,the Commission finds any of the DSM
expenses were not prudently incurred,then it will not allow the utility to recover those expenses
through rates,and the disallowed expenses will be borne by the utility’s shareholders and not by
customers.
With this Order,the Commission summarizes the Application,directs that it be
processed under the Commission’s Rules of Modified Procedure and sets deadlines for interested
persons to intervene as parties in the case or to otherwise file written comments.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the Company says its 2014 DSM efforts
included Northwest Energy Efficiency Alliance (NEEA)market transformation activities,18
energy efficiency programs (16 in Idaho,2 in Oregon),3 demand response programs,and several
educational initiatives.The Company states these efforts increased the Company’s annual
energy savings by 33%and exceeded the savings target specified in the Company’s Integrated
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Resource Plan.The Company says its DSM efforts saved 138,670 megawatt hours (MWh),
including 118,670 MWh from energy-efficiency programs and 20,000 MWh from market
transformation initiatives.
YOU ARE FURTHER NOTIFIED that the Company primarily attributes these
energy savings to industrial sector DSM activities and,to a lesser extent,residential sector DSM
activities.The Company reports it enrolled enough participants in its demand response programs
to provide 390 MW of load shedding capacity,and that the programs ultimately reduced demand
by 378 MW and saved customers about $6.5 million.
YOU ARE FURTHER NOTIFIED that the Company funds its Idaho energy-
efficiency programs through the Idaho Energy Efficiency Rider,base rates,and the annual Power
Cost Adjustment (PCA).It funds its Idaho demand response programs through base rates and
the PCA.With this Application,the Company asks the Commission to find that the Company
prudently incurred $33,495,385 in expenses to develop and run its DSM programs in 2014.The
Company states these expenses include $25,554,688 in Idaho Energy Efficiency Rider expenses
and $7,940,697 in demand response program incentive payments.The Company states it
calculated these expenses after adjusting some of the amounts set forth in the DSM Report.
Specifically,the Company maintains it excluded the following expenses from its prudency
request:(1)$338,707 in Rider-funded labor-related expenses;(2)$248 in Home Energy Audit
program labor expenses;and (3)$1,153 in Energy House Calls Program incentives that were
charged against the Idaho Energy Efficiency Rider when they should have been charged against
the Oregon Rider.The Company also notes that it helped create a new market transformation
plan for NEEA that should save 145 average MW from 2015 to 2019 while costing the
Company’s customers $3 million less than they paid under NEEA’s prior plan.The Company
asks the Commission to reflect these adjustments in its records.
YOU ARE FURTHER NOTIFIED that the Company’s Application describes the
Company’s evaluation of its DSM programs and whether they were cost-effective in 2014.The
DSM Report discusses the cost-effectiveness of the Company’s DSM programs and energy
savings measures.
YOU ARE FURTHER NOTIFIED that the Company says it used the following
benefit/cost tests to determine the cost-effectiveness of its energy efficiency programs and
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measures:(1)the total resource cost test (“TRC”);(2)the utility cost test (“UCT”);(3)the
participant cost test (“PCT”);and (4)the ratepayer impact measure test (“RIM”).’The Company
reports that in 2014 its overall energy efficiency portfolio was cost-effective from a TRC and
UCT perspective.Of the Company’s 16 Idaho energy efficiency programs,11 programs passed
the TRC and UCT,2 programs failed the TRC but passed the UCT,and 3 programs failed both
the TRC and UCT.Further,all energy efficiency programs with customer costs passed the PCT.
In contrast to its assessment of the energy efficiency programs,when assessing the cost-
effectiveness of its demand response programs the Company did not calculate a benefit/cost
ratio.Rather,the Company determined the cost-effectiveness of its demand response programs
based on the $16.7 million demand response portfolio value specified in Commission Order No.
32923,and estimated that the programs would have remained cost-effective if fully dispatched.
YOU ARE FURTHER NOTIFIED that the Company says independent,third-party
consultants provide impact and process evaluations to verify that program specifications are met,
recommend improvements,and validate program-related energy savings.In 2014,impact
evaluations were completed on five programs and process evaluations were completed on three
programs.
YOU ARE FURTHER NOTIFIED that the Company’s Application describes the
input that various stakeholders,including the Company’s Energy Efficiency Advisory Group,
had in developing the Company’s DSM activities.The Company notes that stakeholder input in
2014 led the Company to increase the incentive paid under its commercial and industrial DSM
programs and to change its commercial/industrial lighting measures.The Company,with input
from the EEAG,also implemented or will implement two new energy efficiency programs and
offerings.
The four tests examine a program’s cost-effectiveness from different perspectives.In summary,the TRC
compares program administrator costs and customer costs to utility resource savings,and assesses whether the total
cost of energy in a utility’s service territory will decrease.The UCT compares program administrator costs to
supply-side resource costs,and assesses whether utility bills will increase.The PCT compares the costs and benefits
of the customer installing the measure,and assesses whether program participants will benefit over the measure’s
life.The RIM measures the impact to customer bills or rates due to changes in utility revenues and operating costs
caused by an energy efficiency program.Under these tests,a program or measure is deemed cost-effective if it has a
benefit/cost ratio above 1.0.
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YOU ARE FURTHER NOTIFIED that in the Company’s last prudence filing,Case
No.IPC-E-14-04,Staff and other parties questioned the Company’s declining DSM marketing
efforts and declining DSM expenditures.After noting that the Company had defended its
actions,the Commission directed the parties to further explore these issues in the context of the
Company’s next Integrated Resource Plan filing.See Errata to Order No.33161.In the present
Application,the Company says it has responded to the Commission’s direction by organizing an
Energy Efficiency Advisory Committee to discuss these issues,and by investigating the extent to
which transmission and distribution benefits result from energy efficiency measures and
programs.The Company expects to discuss its preliminary findings at the June 2015 Integrated
Resource Plan Advisory Committee meeting.The Company also says it will continue evaluating
program delivery issues,and that Staff,customers,and others will be able to use the Energy
Efficiency Advisory Committee as a forum at which Staff,customers,and other stakeholders can
advise the Company about formulating,implementing,and evaluating energy efficiency
programs and demand response programs.
YOU ARE FURTHER NOTIFIED that the Application and supporting workpapers,
testimonies and exhibits have been filed with the Commission and are available for public
inspection during regular business hours at the Commission offices.The Application and
testimonies are also available on the Commission’s web site at icjdaho.gov.Click on the
“File Room”tab at the top of the page,scroll down to “Open Electric Cases,”and then click on
the case number as shown on the front of this document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commissions jurisdiction under Title 61 of the Idaho Code,including Idaho
Code §61-501 and -503.The Commission may enter any final Order consistent with its
authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission’s Rules of Procedure,IDAPA 3 1.01.01.000 ci seq.
NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this case for
the purpose of presenting evidence or cross-examining witnesses must file a Petition to Intervene
with the Commission,pursuant to Rule 72 and 73 of the Commission’s Rules of Procedure
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(IDAPA 31.01.01.000 el seq.),no later than 14 days after the date of service of this Order.
Persons desiring to present their views without parties rights of participation and cross-
examination are not required to intervene and may present their comments without prior
notification to the Commission or to other parties,as discussed below.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has detemiined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission’s Rules
of Procedure,IDAPA 31.01.01.201 through .204.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission by
Thursday,May 7,2015,The comment must contain a statement of reasons supporting the
comment.Persons desiring a hearing must specifically request a hearing in their written
comments.Written comments concerning this Application shall be mailed to the Commission
and Idaho Power at the addresses reflected below:
Commission Secretary Lisa D.Nordstrom
Idaho Public Utilities Commission Idaho Power Company
P0 Box 83720 P0 Box 70
Boise,Idaho 83 720-0074 Boise,ID 83 707-0070
Email:
Street Address for Express Mail:dockets(idahopower.com
472 W.Washington Street Zachary L.Harris
Boise,ID 83702-5918 Idaho Power Company
P0 Box 70
Boise,ID 83707-0070
E-mail:zharris(á)idahopower.com
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at www.puc.idaho.gov.Click the “Case Comment or Question
Form”under the “Consumers”tab,and complete the comment form using the case number as it
appears on the front of this document.These comments must also be sent to Idaho Power at the
e-mail addresses listed above.
NOTICE OF APPLICATION
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ORDER NO.33273
YOU ARE FURTHER NOTIFIED that the Company shall file reply comments,if
any,by Thursday,May 14,2015.
YOU ARE FURTHER NOTIFIED that if no Titten comments or protests are
received within the time limit set,the Commission will consider this matter on its merits and
enter its Order without a formal hearing.If written comments are received within the time limit
set,the Commission will consider them and,in its discretion,may set the same for formal
hearing.
ORDER
IT IS HEREBY ORDERED that this Application be processed under Modified
Procedure,Rules 201-204,IDAPA 31.01.0l.201-.204.
IT IS FURTHER ORDERED that persons desiring to intervene in this case for the
purpose of presenting evidence or cross-examining witnesses must file a Petition to Intervene
with the Commission,pursuant to Rules 72 and 73,IDAPA 31.01.01.72-73,no later than 14 days
after the date of service of this Order.
IT IS FURTHER ORDERED that persons interested in submitting written comments
must do so by May 7,2015.The Company may file a reply no later than May 14,2015.
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ORDER NO.33273 6
PAUL KJELLAND R,PRESIDENT
JJ
,COONERKRTINERAPER
an D.Jewell
bmmission Secretary
O:IPC-E-1 5-O6kk
NOTICE OF APPLICATION
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ORDER NO.33273
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of April 2015.
ATTEST:
MACK A.REDFORD,CIMISIONER
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