20160315Aschenbrenner Direct.pdf

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BEEORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF TDAHO POWER COMPANY EOR A
DETERMINATION OE 2015 DEMAND-
SIDE MANAGEMENT EXPENSES AS
PRUDENTLY INCURRED.
CASE NO. IPC-E-16-03
rDAHO POWER COMPANY
DIRECT TESTIMONY
OE
CONNIE ASCHENBRENNER
1 Q. Please state your name and business address.
2 A. My name is Connie Aschenbrenner. My business
3 address is 7221, West Idaho Street, Boise, Idaho 83702.
4 Q. By whom are you employed and in what capacity?
5 A. I am employed by fdaho Power Company ("Idaho
6 Power" or "Company") as a Senior Regulatory Analyst.
7 Q. P1ease describe your educational background.
8 A. In May of 2006, I received a Bachelor of
9 Administration degree in Finance from Boise State
10 University in Boise, Idaho. In December of 20II, I earned
11 a Master of Busi-ness Administration degree from Boise State
12 University. In addj-tion, I have attended the electric
13 utility ratemaking course offered through New Mexico State
L4 University's Center for Public Utilities.
15 O. Please describe your work experience wj-th
16 fdaho Power.
77 A. In 20L2, I was hired as a Regulatory Analyst
18 in the Company's Regulatory Affairs Department. My primary
19 responsibil-ities included support of the Company's
20 Commercial and fndustrial (*C&I") customer class's rate
2t design. In 2075, I assumed responsibilities assocj-ated
22 with Residential and SmaII General Service rate design as
23 well as activities associated with demand-side management
24 ("DSM") activities. My duties as a Regulatory Analyst
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ASCHENBRENNER, D] 1
Idaho Power Company
1 incl-ude analysis of the impact on customers of rate design
2 changes and the admj-nistration of the Company's tariffs in
3 ldaho and Oregon.
4 O. What is the purpose of your testj-mony in this
5 case?
6 A. The purpose of my testimony is to present the
7 Company's request for a determinatj-on that $35r196,964 of
I DSM expenses incurred in 2015 for the acquisition of
9 demand-sj-de resources were prudently incurred. This amount
10 includes $28,495,701 funded by the Idaho Energy Efficiency
11 Rider ("Rider") and $6,107,263 of demand response program
72 incentive payments funded through base rates and tracked
13 annually through the Power Cost Adjustment ("PCA"). The
14 2075 Idaho DSM expenses for which Idaho Power is seeking a
15 prudence determination is a 5 percent increase over the
LG 2074 Idaho DSM expenses in last year's prudence case (Case
L7 No. IPC-E-15-06). This increase in expenses is accompanied
18 by an 18 percent increase in system-wide energy savings
79 over 2074 energy savj-ngs when considering Idaho Power's
20 efficiency programs alone. When the Northwest Energy
2L Efficiency Alliance (*NEEA") estimated savings are
22 incl-uded, the 20L5 energy savings increase over 20L4 is 12
23 percent.
24 My testimony will (1) provlde a review of 201,5 DSM
25 program performance, (2) discuss 20L5 DSM expenses and
ASCHENBRENNER, DI
Idaho Power Company
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adjustments, (3) provide an overvj-ew of cost-effectiveness,
(4) review evaluation efforts, and (5) describe stakehol-der
input.
I. 2OL5 DSM PROGRJAI{ PERI.ORIIAIICE
a. Pl-ease provide an overview of Idaho Power's
DSM efforts in 2015.
A.In 20L5, Idaho Power achj-eved 12 percent more
energy savings than in 2014 and implemented its new
internal-ly-managed C&I demand response program at a reduced
administrative cost to customers. Idaho Power's energy
efficiency portfolio was cost-effective, resulting j-n a
2.32 benefit/cost ratio when evaluated from a Total
Resource Cost ("TRC") test perspective and a 3.57
benefit/cost ratio when evaluated from a Utility Cost
(*UC") test perspective.
In 2015, on a system-wide basis, Idaho Power offered
customers a fuII portfolio of energy efficiency programs
and demand response programs to a1l- customer segments,
participated in market transformation efforts through NEEA,
and offered several- ongoing educational initiatives and
other activities. A summary of Idaho Power's 201,5 DSM
activities is provided in Table 1 beIow.
ASCHENBRENNER, DI
Idaho Power Company
Table 1. 2015 DSM Progra.ms by Sector, Operational. t1pe,
Location, and Annualized Energy Savings/Deuand Reduction.
Program by Sector OperationalType State Savinqs
Residential
A/C CoolCredit
Easy Savings
Education Distributions
Energy Efficient Lighting
Energy House Calls
ENERGY STAR@ Homes Northwest
Heating & Cooling Efficiency Program
Home Energy Audit Program
Home lmprovement Program
Oregon Residential Weatherization
Rebate Advantage
Residential Energy Efficiency Education lnitiative
See ya later, refrigerator@
Shade Tree Project
Simple Steps, Smart Savingsru/Home Products
Weatherization Assistance for Qualified Customers
Weatherization Solutions for Eligible Customers
Commercial/lndustrial
Building Efficiency
Commercial Education lnitiative
Custom Efficiency
Easy Upgrades
Flex Peak Program
Oregon Commercial Audits
lrrigation
lrrigation Efficiency Rewards
lrrigation Peak Rewards
AllSectors
Demand Response
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Other Programs & Activities
Energy Efficiency
Other Programs & Activities
Energy Efiiciency
Energy Efficiency
Energy Efficiency
Energy Efflciency
Demand Response
ID/OR
ID
ID
ID/OR
ID/OR
ID/OR
ID/OR
ID
ID
OR
ID/OR
ID/OR
ID/OR
ID
ID/OR
ID/OR
ID
36 MW*
625 tW /h
1,669 MWh
15,876 MWh
755 MWh
821 MWh
1,502 MWh
136 MWh
304 MWh
12 MWh
359 MWh
nla
720 MWh
nla
771 MWh
550 MWh
433 MWh
Energy Efficiency ID/OR 23,232MWh
Other Programs & Activities ID/OR nla
Energy Efficiency ID/OR 55,247 MWh
Energy Efficiency ID/OR 23,595 MWh
Demand Response ID/OR 26 MW*
Energy Efficiency OR nla
lD/oR 14,027 MWh
tD/oR 305 MW*
Northwest Energv Efficiencv Alliance Market Transformation ID/OR 21,900 MWh
*This value represents the realized, non-coincident load reduction from each program.
Table 1 illustrates the broad availability of
programs offered by Idaho Power to its customers 1n energy
efficiency, demand response, and education. The Demand-
Side Management 2075 Annual- Report (*DSM 201,5 Annua1
ASCHENBRENNER, DI
Idaho Power Company
1 Repoxt"), Attachment 1 to the Application fil-ed in this
2 proceeding, provides detail-s for each program, including a
3 description of each program, 20L5 performance and
4 activities, cost-effectiveness, customer satisfaction, and
5 evaluation resul-ts. In addition, the DSM 2015 Annual
6 Report provides Idaho Power's DSM strategies for 2016.
O. What 1evel of incremental annual energy
8 efficiency savi-ngs was achieved in 2015?
A. On a system-wide basis, Idaho Power achieved
10 162,533 megawatt-hours ("MWh") of incremental annual energy
11 efficiency savings tn 2015. This value includes 140,633
72 MWh from Idaho Power's energy efficiency programs and an
13 estimated 21,,900 MWh of energy efficiency market
1,4 transformat j-on savings through NEEA initiatives. Because
15 Idaho Power will- not receive final 2075 savings from NEEA
76 until June 20L6, the NEEA-attributable savings is an
17 estimate provided to Idaho Power by NEEA. Table 2 bel-ow
18 shows the incremental annua1 energy efficiency savings in
79 MWh from 2002 to the current year. Also shown in this
20 table are the total energy efficiency expenses for each
2L year in mill-ions of dollars.
22 //
23 //
24 //
25 //
ASCHENBRENNER, DI 5
Idaho Power Company
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Table 2. Increnental. Annual. Energy
(!lhlh) and Energy Efficiency E:q>enses ($
EfficiencY Savings
millions) 2OO2-20L5
$35
$o E'
c
szs E
otootr$20 tx
uJ
srs p
o(,
Ero E
oo$5 ,i
$0
250,000
200,000
1 50,000
100,000
50,000
0
r lvlsft s[ lransf o rmation (NEEA) (MVvh)
rflsfte Power Program Savings (MWtr)
-Eneqry
Ef f iciency Expenses
E
==o.Dtr
6o
IoE
UJ
3
4
5
6
7
U
9
1_0
11
!2
13
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2002 2003 2004 2005 2006 2007 2008 2009 2010 20',t1 2012 2013 2014 2015
Note: 2015 NEEA market-transfomation savings are estimated.
O. What l-evel of demand reduction capacity was
available from Idaho Power's demand response programs in
2075?
A. The total avail-abl-e capacity of Tdaho Power's
three demand response programs was 385 megawatts (*MW").
The programs operated in 20L5 and provided actual- demand
reduction of 361 MW. This value represents the realized,
non-coincident load reduction from all- three programs.
Tabl-e 3 below shows the annual available peak demand
reduction capacity and actual ]oad reduction in MW since
2004 and the associated annual expenses in mill-ions of
dol-Iars. This tabl-e shows that, in 2073, the Irrigation
Peak Rewards program and the A/C Cool Credit program were
temporarily suspended. As a resul-t of the settlement
ASCHENBRENNER, DI
Idaho Power Company
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achieved with stakeholders through demand response
workshops in 2013, the Company successfully restructured
these programs in 20L4 at a fower cost per MW of demand
reduction capacity than in prior years. Durinq 2015, the
Company further l-owered the cost per MW of demand reduction
capacity, which was largely a result of the movement from a
third-party managed C&I program to a Company managed
program.
Tab1e 3. Peak Denand Reduction Capacity (lfiY) and Demand
Response E:rpenses ($ niJ.lions) 200{-2015
-Available
Capacity
IActual Load Reduction
-
Demand response o(penselt
$15.00
$10.00
$5.00
$0.00200/. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
O. In 2075, did Idaho Power meet the energy
efficiency targets included in its Integrated Resource Plan
(*rRP")?
A. Yes. Table 4 below shows the annual
incremental energy efficiency savings compared with the IRP
targets for 2002 through 20L5 shown j-n average megawatt-
hours ("aMW"). The Company's savings each year surpassed
its annual IRP target 13 out of the last 14 years.
ASCHENBRENNER, DT
Idaho Power Company
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450
I +oo3
3. 3s0
o6e 3(x)o
E 250
E;,*Eu 150EG
E'*tsor
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=oontxUIoo
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fabJ.e 4. Annua1 Increnental Energy Efficiency Savings
(alfiI) rittr IRP Targets (2O02-2OL5,
3 2OO2 2003 2W 2005 2m6 2OO7 2008 2009 2O1O 2011 2012 2013 2014 2015
4 Q. How are the energy efficiency targets included
5 in the IRP established?
6 A. Idaho Power contracts with a third-party to
7 conduct an energy efficiency potentj-al study to estimate
8 the amount of achievable energy efficiency to be included
9 in the IRP for planning purposes. Idaho Power considers
10 the achievable potential as a reasonable planning estimate
11 but does not consider the achievable potential as a ceiling
L2 that would limit the acquisition of energy efficiency;
13 rather, the Company pursues all cost-effective energy
t4 efficiency.
15 Table 5 below shows the cumulative energy efficiency
16 savings in aMW compared with the IRP targets for 2002
L7 through 2015.
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ASCHENBRENNER, D]
Idaho Power Company
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E15oootr'E 10
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G,Es
Table 5. Annual CunuJ.ative Energy Efficiency Savings
(aMIY) with IRP rargrets (2002-2OL5,
200
180
160
1q
't20
100
80
60
4
20
0
2002 2003 20u 2005 2006 2@7 2008 2009 2010 2o',t't 20',t2 2013 2014 2015
II. 2OL5 DSM EXPENSES AIID ADi'USIA{ENTS
O. What is Idaho Power's focus when spending
customer funds for the acquisitlon of DSM resources?
A.Idaho Power takes its responsibility of
prudently managing customer funds seriously and the Company
bel-ieves it is important to get the maximum value for its
customers. The Company's actions in 2015, and the content
of the DSM 2015 Annual Report, provide evidence supporting
the conscientious work Idaho Power employees and leaders
made toward using customers' funds wisely to support DSM
activities.
A. What amount of 20L5 DSM expenses is the
Company requesting the Idaho Public Utllities Commission
("Commission") find were prudently j-ncurred?
A. fn the delivery of energy efficiency, demand
response, and market transformation programs, ds well as
ASCHENBRENNER, DI
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-lRP
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education and administrative costs, Idaho Power expended
$28,495,70L of Rider funds and $6,10L,263 of demand
response program incentives for a total- of $35,196,964
spent on demand-side resoprce acquisition in 2075. To
arrive at an amount for prudence determination, these
numbers do not include certain DSM labor expenses from 2075
and prior years as described later in my testimony.
fdaho Power requests that the 20L5 Rider-funded DSM
expenses and the 2015 demand response program incentives
recovered through base rates and the PCA be reviewed
together for a prudence determination. With this filing,
Idaho Power requests the Commlssion issue an order finding
that these funds were prudently incurred. Exhibit No. 1 to
my testimony, 201-5 ldaho DSI4 Expenses and Adjustments for
Prudence FiTing, shows a breakout of these expenses by
program, customer sector, and by funding source.
o.Please compare the dollar amounts in Exhibit
No. 1 with Appendix 2 of the DSM 2015 Annual Report.
A.Eor clarity and ease of understanding, Exhiblt
No. 1 ties to Appendix 2, 2015 DSM expenses by funding
source (doLLars) , which j-s found on page 156 of the DSM
2015 Annual Report. The first column of Appendix 2 l-abeled
"Idaho Rider" and the first column of Exhibit No. 1 l-abeled
"Rider Expenses" match at the row label-ed "Total- Expenses"
in Exhibit No. l and "Grand Tota1" in Appendix 2 in the
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amount of $28,494,548. A11 values in Exhibit No. 1
represent DSM expenses for the Idaho servj-ce area onJ-y. A
prior year-end adjustment to this total- was needed to
accurately arrive at the total 2075 expenses for purposes
of the prudence determination. To aid in explaining the
adjustment, in my Exhibit No. L, I have added a section at
the bottom of the table titl-ed *Adjustments."
Additionally, the column at the far right of Exhibit
No. 1 l-abel-ed 'DSM Labor Transferred to O&M" i-s incl-uded
for informational purposes on1y. The amounts in this
column have already been returned to the Rlder and Idaho
Power is not asking for a prudence determination of these
amounts.
O. In this filing, did Idaho Power inc1ude the
increases in 2017 through 20L5 DSM labor expenses for a
prudence determination?
A. No. In Order Nos. 32667, 32690, and 32953,
the Commission decl-ined to decide the prudence of the
j-ncreases in 20LL and 2012 DSM l-abor expenses for Rider-
funded empJ-oyees, whil-e at the same time offering the
Company another opportunity to provide sufficient evidence
at a future time, preferably revisiting this issue in the
next general rate case. Order No. 32953 at 8. Because of
the Commj-ssion's decisions in these three orders, Idaho
Power is not asking for a prudence determination in this
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filing for the increase in DSM labor expenses that occurred
from 2077 through 20L5.
o.Please quantify the increase in 20!5 DSM labor
expenses based upon 2070 labor rates that has been excluded
from the Company's request for determination of prudence.
A.Please refer to Table 6 below where the
increase in 2015 DSM labor expenses based upon 20L0 labor
rates has been quantified. The j-ncrease in DSM labor
expenses based upon 2070 labor rates included in 20L5 DSM
expenses, but excluded from the Company's request for
determination of prudence, is $441,856. This amount was
calculated using the same methodol-ogy that was previously
accepted by the Commission for use in 201,1 through 2074.
Tab1e 6
0. Tn 2075, how did Idaho Power account for the
increase in DSM labor expenses?
A. On a quarterly basis, Idaho Power records an
entry to move the estimated j-ncrease in DSM labor expenses
ASCHENBRENNER, DI 72
Idaho Power Company
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Co].umn
2010
2OLL
20L2
20L3
20L4
2015
Total
1
Total
Labor
$2,577,080
$2,631,729
$2,886, 988
$2 ,'l 67 , 445
$2 ,7 20 , 954
$2,957 ,91-2
2010 $/ETE
$96,520
$96,520
$96,520
s96,520
$96,520
4
Column 2
times
Column 3
$2,548 ,1-28
$2,7L3,1,77
$2, 498, 013
$2,382,241
5
Column 1
Minus
Col-umn 4
$ 8 9,601
$ 173,811
$ 269,432
$ 338,707
$ 441,856
$1,3]-3,407
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ETE
26 .10
26.40
28.7L
25.88
24.68
26 .07 $96,520 $2,516,056
1 from the Rider bal-ancing account to operatj-ons and
2 maj-ntenance expense (*O&M") , FERC Account 908. At the end
3 of the year, this amount is trued-up to the actual amount
4 and an entry is made to the labor task of each program work
5 order that had labor charged to the Rider in 20L5, with a
6 corresponding entry to an O&M task for each of the affected
7 program work orders. The 20L5 accounting entries credited
8 these amounts to the Rider bal-ancing account and charged
9 them to O&M, EERC Account 908.
10 In Exhibit No. 1, under the column on the far right
11 l-abeled "DSM Labor Transferred to O&M, " the l-abor amounts
12 are shown for each program. These amounts represent the
13 20L5 DSM labor expenses above 20L0 funding leve1s for
1,4 Rider-funded employees, which totals $441,856. While these
15 labor costs have not been funded by the Rider, it is
1,6 important to note they are included in total- program costs
t7 for the purpose of determining cost-effectiveness.
18 O. What is the cumul-ative amount of DSM labor
79 expense increases that the Company has not received a
20 prudence determination on since 20L0?
2l A. The cumulative amount of DSM labor expense
22 increases that the Commi-ssion has not issued a prudence
23 determination on since 201,0 j-s $1,3L3,407.
24 O. What is the significance of this amount?
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ASCHENBRENNER, DI 13
Idaho Power Company
1 A. Because of prior Commission decisions, the
2 Company is not able to recover these amounts through the
3 Rj-der; rather, is required to expense these amounts
4 annual1y, which negatively impacts earnings. Idaho Power
5 continues to believe these amounts represent labor costs
6 necessary to acquire DSM savings and the amounts should be
7 fully recoverable.
8 Q. Please describe the prior year-end accounting
9 adjustment included in Exhibit No. l.
10 A. Tn 20!4, two incentive payments j-n the Energy
11 House Calls program were charged to the Idaho Rider when
1,2 they should have been charged to the Oregon Rider. In l-ast
13 year's prudence filing, Case No. IPC-E-15-06, Tdaho Power
74 proposed an adjustment of $1,153 that decreased the amount
15 of 2074 expenses requested for prudence determination.
L6 In Order No. 33365, the Commission approved that
L1 adjustment. This correction occurred j-n 20L5 and was
18 returned to the Rider account via an accounting entry. In
L9 order to arrive at the actual total program expenses for
20 20L5, this amount is added back to this year's prudence
2L request to avoid understating actual 20!5 program expenses.
22 This is shown in the Adjustments section of Exhibit No. 1
23 under "Prior Year-end Accounting Adjustment, Energy House
24 Calls Program Correction."
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O. P1ease summarize the impact of the adjustment
described above to the Idaho Rider.
A.As shown in Exhibit No. 1, this adjustment
increases the total Rider-funded expenses to $28,495,70L.
The demand response program incentive payment amount had no
adjustment and remains at $6,707,263. The post-adjustment
total of these two amounts is $35,196,964.
o.Did Idaho Power transfer Rider funds to
customers through a credit r or reduction, in the 201,5/201,6
PCA?
A. Yes. On April 15, 2075, Idaho Power filed its
annual PCA in Case No. IPC-E-15-1,4. As part of this case,
the Company requested the Commissj-on approve the continued
application of an annual PCA credit related to the Rider in
the amount of $3,910,036 in order to maj-ntain the revenue
neutrality associated with the June 20L4 update to the
normalized 1evel of net power supply expenses included in
base rates and approved by Order No. 33000. The Commission
approved this transfer in Order No. 33306. This transfer
had no impact on energy efficiency activitj-es in 2075.
O.
Rider?
V[hat was the year-end 20LS balance of the
A.
20L5, was a
January 2075
The Rider account
positive $6, 554 ,07 4.
beginning balance;
bal-ance at December 31,
Tabl-e 7 bel-ow shows the
the accounting adjustment
ASCHENBRENNER, DI 15
Idaho Power Company
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described above; the funding
and transfers; and the ending
20]-5.
items, expenses,
of December 31,
and interest
bal-ance as
Ta.ble 7
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rII. 2015 COST-EFEECTI\IEIIESS O\IERVIEIT
O. What is Idaho Power's overall goal when it
comes to DSM cost-effectiveness tests?
A.Idaho Power's goal is to have all programs
achieve benefit/cost ratios of 1.0 or greater for the TRC
and the UC tests, and the Participant Cost Test ("PCT") at
the program and measure leve1 where appropriate. Idaho
Power reviews the cost-effectiveness results for each
program and measure on an annual basls to determine whether
the program should continue or be modified in some way to
ensure its ongoing cost-effectlveness. If a particular
measure or program 1s pursued even though it w111 not be
cost-effective from each of the three tests, Idaho Power
works with the Energy Efflciency Advisory Group (*EEAG") to
ASCHENBRENNER, DI 16
Idaho Power Company
Idaho Energy Efficienc'1z Rider (ilanuary-Deceuber 2015)
fdaho Energy Efficiency Rider
201,5 Beginning Balance
2075 Accounting Adjustment
2075 Funding plus Accrued Interest
Eota]. 2015 Ftrrrds
201,5 Expenses (Exhibit No. 1)
Transfer to PCA (Commission Order No. 33306)
Ba].ance as of December 31, 2OLS $
(182 ,23L)
1,153
39,800,889
39,019,811
(28 , 495 ,10L)
(3,970,036)
6,554,O74
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get advice and seek alignment on the continued offering.
If the measure or program is indeed offered, the Company
will explain why the measure or program was J-mplemented or
continued when it seeks recovery of the incentives and
expenses associated with that program.
The Company believes this approach aligns both with
past Commission orders as well as the expectations outlined
in the DSM Memorandum of Understandlng signed by Idaho
Power, Avista Corporation, Rocky Mountain Power, and
Commission Staff and presented to the Commission in Case
No. IPC-E-09-09.
The cost-effectiveness test methodologies and
assumptions are described j-n more detail j-n the first pages
of Supplement 1-: Cost-Effectiveness ("Supplement t') that
is included in Attachment 1 to the Applicatj-on in this
proceeding.
O. Does the Company place emphasls on partlcular
cost-effectiveness tests?
A.Yes. The Company believes all- the tests are
i-mportant and should be considered in relation to each
other. However, because of the need to compare demand-side
resources to supply-side resources, Idaho Power has
generally placed emphasis on the TRC and UC tests. In the
2015 prudence request, the Company continues to emphasize
both of these tests.
ASCHENBRENNER, DI T1
Idaho Power Company
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Some parties in Idaho Power's 2074 DSM prudence
request (Case No. IPC-E-15-06) argued that the Company
should focus on the UC test as "a better measure of cost
effectiveness than the TRC" and that the Commission shoul-d
"determj-ne prudence based prlmarily on the Utility Cost
Test results for each program." Staff's Comments at 10;
ICL's Comments at 3, respectively. In its Reply Comments,
the Company clarified that it "believes each test provides
value and that including all tests when evaluating program
performance is best practice." Idaho Power's Reply Comments
at 5. The Company further asked for specific guidance from
the Commission "in its order in this matter so that Idaho
Power is aware that this is the Commission's intent going
forward. " Id. The Commissi-on stated:
We thus f ind it reasonabl-e for the
Company to contj-nue screening potential
programs using each test as a
guideline, and to advise us on how the
Company's programs fare under each
test.When the Company ultimately
seeks to recover its prudent investment
in such programs, however, we believe
the Company may (but need not
Order No.
o.
exclusively) emphasize the UCT-and that
test's focus on Company-controlled
benefits and costs-to argue whether the
programs were cost-effective.
33365 at 9-10.
What were the resul-ts of the 20L5 cost-
analyses ?
ASCHENBRENNER, D] 18
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A. Exhibit No. 2 to my testimony, 2015 Cost-
Effectiveness Summary by Programt Sector, and PortfoTio,
shows the results of the TRC, UC, and PCT for every energy
efficiency program, by sector and for the portfolio. From
a sector and portfolio basis, the results are positive. As
shown in Table 8 be1ow, aII tests achieved benefit /cost
ratios over 1.0. These results are also included in
Exhibit No. 2.
Tab].e 8
On a program basis, these results show that, usJ-ng
2015 DSM costs and benefits, of the 16 energy efficiency
programs offered in fdaho for which the Company calculates
cost-effectiveness, 13 programs had benefit/cost ratios
greater than 1.0 for both the TRC and UC tests. Two
programs had benefit/cost ratios l-ess than 1.0 for both the
TRC and UC, and one program had a benefit/cost ratio of
less than 1.0 for the TRC but greater than 1.0 for the UC.
All programs for which the PCT is calculated passed the
PCT. PCT ratios are not cal-cul-ated for those programs that
do not have a direct customer cost; these are shown as N/A
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2OLS Benefit/Cost Table
Sector Total Resource
Cost (TRC)
Utility Cost
(UC)
Participant
Cost (PCT)
Residential 2 -11 2.37 3.82
CommercialIndustrial
2 -L3 4 .48 7.92
Irri-qation 3.84 6. 00 3.59
Portfolio 2.32 3.57 2.67
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on Exhibit No. 2. The details of these calculations are in
Supplement 1 of the DSM 2015 Annual- Report.
0. Does Idaho Power cal-culate cost-effectiveness
for its three demand response programs?
A.Yes. However, benefiL/cost ratios are
currently not calculated for the three demand response
programs. Instead, the methodology used to determine the
cost-effectiveness of the demand response programs was last
updated in 2074 and was not changed during 201,5. As part
of the public workshops in conjunction with Case No.
IPC-E-13-14, Idaho Power and other stakeholders agreed on
a methodology for valuing demand response. The settlement
agreement, as approved in Commission Order No. 32923,
defined the annual cost of operatlng Idaho Power's demand
response portfolio must be no greater than $16.7 million.
This $16.7 million val-ue is the l-evel-ized annual cost of a
170 MW deferred resource over a 2)-year 1ife. In 201-5, the
system-wide cost of operating the three demand response
programs was approximately $9 million ($7 million of
incentives and $2 mill-ion of other costs). The amounts
attributabl-e to the Idaho-only jurisdictj-on were $8.5
mill-ion ($6.2 million of incentives and $1.8 mil-l-ion of
other costs). It is estimated that if the three programs
were dispatched for the ful-l- 60 hours allowed, the total
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costs would have been approximately $12.4 mil-l-ion on a
system-wide basis.
O. Which programs did not have a benefit/cost
ratio greater than 1.0 in 2015 for both the TRC and the UC
perspectives ?
A.As shown in Exhibit No. 2, two programs did
not achieve the 1.0 benefit/cost rati-o threshold in 201,5
under the TRC and UC tests-the Weatherization Assistance
for Qualified Customers ("WAQC") program and Weatherization
Solutions for Eligible Customers ("Solutions") program,
both of which are offered to limited-income customers. The
PCT is not calculated for these programs because the
programs impose no dlrect costs on the participants.
O. Please explain why the WAQC program was not
cost-effective in 2015 and what actions the Company has
taken to address cost-effectiveness.
A.The WAQC program provides real and substantlal
per home savj-ngs, but due to the costs of comprehensive
whole-house weatherlzation, it is difficult for the val-ue
of the savings to outweigh the costs. The weatherization
services provided through the WAQC program are consistent
with the Idaho State Weatherizatj-on Assistance Program
("WAP") guidel-lnes and are offered at no charge to the
participant. Because this program is designed for limited-
income customers, fdaho Power bel-j-eves there are other
ASCHENBRENNER, DI 27
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1 benefits to thls program that are difficult to quantify.
2 Because this program is offered in coordination with the
3 state WAP under U.S. Department of Energy guidelines,
4 changes to this program must be made by the state WAP.
5 fdaho Power contj-nues to work diligently in partnership
6 with its program partners, stakeholders, and vendors to
7 streamllne operations, adjust offerings, and develop more
8 accurate tools to make this program more cost-effective.
9 Q. Please explain why the Sol-utions program was
10 not cost-effective in 2015 and what actions the Company has
11 taken to address cost-effectiveness.
72 A. Similar to the WAQC program, the Solutions
13 program provides real and substantial per home savings, but
L4 due to the costs of comprehensive whole-house
15 weatherization, it is dj-fficult for the value of the
L6 savings to outweigh the costs. Idaho Power continues to
71 work diligently in partnership with its program partners,
18 stakeholders, and vendors to streaml-ine operations, adjust
19 offerings, and develop more accurate tools to make this
20 program more cost-effective. Eor instance, in 2075,
2L landl-ords who participated in the program were required to
22 fund at least 10 percent of the project and the Company
23 hel-d the average cost per home constant from 2014 level for
24 the weatherization contractors, actions which helped to
25 keep the cost of the program down.
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Tn 2016, the Company plans to explore the inclusion
of potential- new energy savings measures with the
weatherization contractors.
O. Does Idaho Power plan to continue to offer the
WAQC and Sol-utions programs in the future?
A. Yes. Unl-ess the Commission directs otherwise,
Idaho Power will contj-nue its efforts to improve the cost-
effectiveness of these programs while at the same time
offering them to the Company's limited-income customers on
an ongoing basis.
O. Which other program did not have a
benefit/cost ratio greater than 1.0 in 201-5 from the
perspective of the TRC?
A.As shown j-n Exhibit No. 2, the Home
Improvement Program had a benefit/cost ratio below 1.0 from
the TRC perspective in 20L5. However, it did have a
benefit/cost ratio wel-l- above 1.0 from the UC perspective.
o.Why did the Home fmprovement Program not meet
the TRC test threshold of 1.0 and how is the Company
pJ-anning to address the cost-effectiveness of the program
in 20L6?
A.The Regional Technical Forum reduced savings
for sJ-ng1e-family home weatherization measures in October
of 20L4 and revised those savings in the spring of 2015.
As a result of the reduction in savings, four of the six
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individual measures offered in the Home Improvement Program
are no longer cost-effective from the TRC perspective.
Because fdaho Power incorporated the revised savings for
all 201,5 projects, the average savings per project was just
under 50 percent of the average savings for 20L4 projects.
In 2076, the Company will evaluaLe the non-cost-
effective measures and the j-mpact on the program's cost-
effectiveness to determi-ne if these measures shoul-d be
modified or removed from the program. Idaho Power will
present possible program and/or measure modifications to
EEAG in order to seek input prior to making any changes to
the program.
O. Did fdaho Power calculate cost-effectiveness
for each measure within each program?
A. Yes. In 2015, Idaho Power eval-uated the
benefits and costs of 270 measures from both the TRC and
the UC perspective. The resul-ts of these calculations
along with measure assumption details and source
documentation can be found in Supplement 1 to the DSM 2015
Annual- Report.
O. How did Idaho Power address any individual
measures that are not cost-effective based on one or more
tests ?
A. The cost and benefit values used in the
various analyses are based on markets, technologies,
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economic inputs, savings estimates, and cost estimates,
whj-ch can change over time. When a measure is determined
not to be cost-effective at a specific point in time, Idaho
Power first evaluates whether the inputs used in the
calcul-ations are still correct and then determines if
measure parameters shoul-d be modlfied or whether the
measure shou]d be eliminated. The measures that are not
cost-effective from a TRC or UC test perspective will- be
discontinued, analyzed for additional non-energy benefits,
modified to increase potential per unit savings r ox
monitored to examine their impact on the specific program's
overall cost-effectiveness. For additional detail- on
measure analysis refer to Supplement 1.
IV. E\IATUATION ACTIVITY OVERVTETT
o.What is the Company's approach to DSM program
evaluation?
A. In order to ensure the ongoing cost-
effectiveness of programs through validation of energy
savings and demand reduction, and to guide the efficient
management of j-ts programs, the Company relies on
evaluatj-ons by third-party contractors chosen through a
competitive bidding process, internal analyses, and
regional and national- studj-es. Idaho Power uses industry-
standard protocols for j-ts internal and external evaluation
efforts. Process and impact evaluations are typically on a
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three-year cycle for each program; however, the timing of
specific program eval-uations is based on considerations
regarding program needs. The Company actively participates
in regional groups that eval-uate new technologies and
advancements . SuppTement 2: EvaTuations ("Supplement 2")
to the DSM 2015 Annual Report provides additional
information regarding how Idaho Power p1ans, evaluates, and
reports its DSM activities.
o.How does ldaho Power utilize the evaluations
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o.
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A.Idaho Power uses the results of its
evaluations to inform decisj-ons rel-ated to program
improvement, to compare processes to industry best
practices, and to validate reported program savings.
What evaluation activities took place in 2015?
In addition to the annual cost-effectiveness
anal-yses that the Company conducts for each program, in
2075, Idaho Power completed three combination impact and
process evaluations on the following programs: Home
Improvement Program, Ductless Heat Pump Pilot, and See ya
Iater, refrigerator@. Additionally, Idaho Power conducted
impact evaluations on the A/C CooI Credit, Irrigation Peak
Rewards and Flex Peak programs. AlI of these evaluations
were conducted by third-party contractors.
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Idaho Power also administered surveys on several
programs in 2015 to measure program satisfaction.
Participant surveys were conducted for Easy Upgrades, Home
Energy Audit, Shade Tree Project, Weatherization Assj-stance
for Qualified Customers, and Weatherization Solutions for
Eligible Customers.
The final reports for these evaluations and studi-es,
surveys, and the market effects evaluations conducted by
NEEA are included in Supplement 2 to the DSM 2015 Annual
Report.
0. Does Idaho Power have a DSM program evaluation
plan for 2016?
A.Yes. The 2072-2076 DSM Program Evaluati-on
Pl-an is attached as Exhibit No. 3 and is al-so included in
Supplement 2. In 2076, Idaho Power's evafuation plan
inc1udes five impact evaluations and three process
eval-uati-ons. This plan j-s intended to be used as a guide
and may change based on need, timing, or other factors.
V. STAIGHOI.DER TNPUT
O. What opportunities exist generally for
external parties to provide input and gui-dance to Idaho
Power's DSM efforts?
A.In 2002, Idaho Power
provide input on enhancing existing
recommending new energy efficiency
formed the EEAG to
DSM programs,
measures, and
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implementing energy efficiency programs. Members include
customer representatives from residenti-a1, irrigation,
commercial, and industrial sectors, techni-ca1 experts, ds
wel-l- as representatj-ves for senior citizens, Iimited-lncome
indivj-duals, environmental organizations, state agencies,
the Idaho Public Util-ities Commission, the Public Utility
Commission of Oregon, and Idaho Power. In 2075, Idaho
Power contracted with a professional facilitator to improve
the efficiency of EEAG meetings. The Company held four in-
person EEAG meetings and one conference call-. During these
meetings, Idaho Power discussed and requested
recoflrmendations on a broad range of DSM issues.
ln 20L4, the Company organized an Energy Efficiency
Working Group and j-nvited members of the fntegrated
Resource Pl-an Advj-sory Committee (*IRPAC"), EEAG, and other
interested partj-es to attend. The Company held two public
workshops during 2014 with the Energy Efficiency Working
Group and reported to the Commission on those activlties in
Case No. IPC-E-15-06. In that case, the Company advj-sed
the Commission that it was investigating the potenti-al-
benefits of energy efficiency programs deferring the need
for Transmission and Dlstribution ("T&D") investment and
indicated that a discussion of preliminary findings was
anticipated to be reported at the June 20\5 IRPAC meeting.
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O. Is the Company continuing its investigation
into potential T&D benefits of energy efficiency?
A. Yes. A member of Idaho Power's T&D planning
group presented preliminary findings at the May J, 2015,
IRPAC meeting in conjunction with a discussion about asset
replacement deferment. The Company is continuing its
investigation of energy efficiency related T&D benefits
during 20L6 and will present results to the Energy
Efficiency Working Group of IRPAC as part of the 20L7
planning cycIe.
VI. CONCLUSION
O. Do you believe that the information contained
in this testimony and attached exhibits supports a prudence
determination for 201-5 DSM expenses?
A.Yes. The DSM 2015 Annual Report details Idaho
Power's DSM offerings in program specific sections. Based
on the 20L5 DSM Annual Report, the testimony set forth
above, in the attached exhibits, Idaho Power respectfully
requests the Commission determine that $35,196,964 of DSM
expenses incurred in 2015 for the acquisition of demand-
side resources were prudently incurred.
o.
A.
Does this conclude your testimony?
Yes, it does.
ASCHENBRENNER, DI 29
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STATE OF IDAHO
County of Ada
)) ss.
)
ATTESTATION OF TESTIMONY
Notdry PubLic for Idaho
Residing at:
My commission expj-res :02 04 / 2021
ASCHENBRENNER, DI 3O
Idaho Power Company
1-1 Regulatory Analyst in the Regulatory Affairs Department and
72 am competent to be a wj-tness in this proceedJ-ng.
13 I declare under penalty of perjury of the l-aws of
1,4 the state of Idaho that the foregoing pre-filed testimony
15 and exhibits are true and correct to the best of my
L6 i-nformation and belief .
I, Connie Aschenbrenner, having been duly sworn to
testify truthfuJ-1y, and based upon my personal knowledge,
state the following:
I am employed by Idaho Power Company as a Senior
DATED this 15th day of March 2016.
SUBSCRIBED AND SWORN to before me this 15th day of
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23 March 2016.
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Connie Asc enbrenner