20140729Comments.pdf

Benjamin J. Otto (ISB No. 8292)
710 N 6th Street
Boise,ID 83701
Ph: [phone] x12
Fax [phone]
botto@idahoconservation. org
Attorney for the Idaho Conservation League
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINATION
OF 2OI3 DEMAND-SIDE
MANAGEMENT ("DSM") EXPENSES
AS PRUDENTLY INCURRED.
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
The Idaho Conservation League (ICL) recommends the Commission find prudent Idaho
Power's 2013 Demand Side Management (DSM) expenses. The 2013 DSM report shows that
most programs past the Total Resource Cost test that weighs the benefits of efficiency against the
avoided costs of energy and capacity. All programs passed the more appropriate Utility Cost Test.
While the Company did acquire cost-effective savings, ICL recommends the Commission find
imprudent Idaho Power's administration of many programs in 2013, specifically marketing,
internal workflows, and acquired savings compared to prior years and identified potential.
Prudent management includes both wisely spending customer's money and effectively
administering programs.
ICL's comments cover five main topics: the calculation of the avoided costs used to
compare efficiency benefits; the appropriate cost and benefit tesq a review of residential
programs; a review of commercial and industrial program; and a review of Idaho Power's market
transformation activities.
CASE NO. IPC-E-T4-04
COMMENTS
OF THE
IDAHO CONSERVATION LEAGUE
Jdy,29 2014
I. The Avoided Costs Likely Undervalue Energy Efficiency
To determine the prudence of a utility investment in energy efficiency the Commission
must ensure the benefits outweigh the costs. The 2013 DSM Report contains detailed accounting
of most of the benefits of energy efficiency. However, the report does not provide a detailed
accounting ofthe avoided costs. In fact, the avoided costs for energy efficiency have never been
explicitly reviewed and approved by the Commission. These costs are developed through Idaho
Power's Integrated Resource Plan.t Upon reviewing the IRP the Commission stated
"our acceptance of the Company's 2013 IRP should not be interpreted as an endorsement
of any particular element of the plan . . . [and] we acknowledge only the Company's
ongoing planning process, not the conclusions or results reached through that process."2
Before approving $25,951,4863 of spending the Commission should ensure this
investment is balanced by an accurate and robust accounting of avoided costs. ICL submits the
avoided costs for energy efficiency are artificially low because the methodology does not include
all relevant avoided costs. The method does account for avoided capacity and energy. For
capacity costs, Idaho Power uses the levelized fixed cost of a new simple cycle combustion turbine
decremented by the Effective Load Carrying Capacity.n For energy, Idaho Power uses the
AURORA model and the Company's preferred mix of IRP resources to forecast the "forward
marginal electricity price" in five categories: s
. Summer ON-Peak-Average of Idaho Power variable energF and operating costs of a I70
MW SCCT, which is the marginal resource for peak hour load deficits during
summertime heavy load hours
t ldaho Power 2013 DSM Report Supplement I at 3.
'Order No. 32980 at 16, IPC-E-13-15.
' Idaho Power Application at 1.
'Idaho Power 2013 IRP AppendixC at75.
s Id.
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Summer Mid Peak-Average of heavy load prices from fune to August (excluding the
Summer On-Peak hours)
Summer Off-Peak-Average of light load prices from fune to August
Non-Summer Mid-Peak-Average of heavy load prices in fanuary through May and
September through December
Non-Summer Off-Peak-Average of light load prices in |anuary through May and
September through December
This method may or may not result in accurate avoided capacity and energy costs. The
point is the Commission and other stakeholders have never formally vetted this methodology nor
approved the resulting avoided costs. One simple issue is whether the Summer On-Peak time
should extend from the current 8:00 pm to 9:00 pm. In 2011 Idaho Power sought and received
approval to apply these changes to the Irrigation Peak Rewards program so that "Idaho Power
will be able to reduce loads across the entire peak period.'6 ICL submits the definition of peak
hours should remain consistent across all DSM programs.
Moreover, the current avoided cost methodology excludes other commonly accepted and
measurable costs.T Reducing energy demands can avoid environmental compliance costs like
chemicals for pollution controls and operations and maintenance expenses at coal plants. To the
extent Idaho Power relies on market purchases, reducing customer demands can suppress
wholesale market prices. Reducing customer energy demands can avoid transmission and
distribution costs, and even enable increased revenues from providing transmission services to
5 Idaho Power Application at 4, Order No 322200 at 9- 10, IPC-E- 10-46
7 Synapse Energy Economics, Best Practices in Energy Eficiency Program Sreening at 4,22-26. Regulatory Assistance
Project, Recognizingthe FullValue of Energy Eficiency (September 2013). Energy and Environmental Economics,
Methodologlt and Forecast of Long Term Avoided Costs for the Evaluation of California Energy Eficiency Programs, at 23
- 24 (October 2004)(providing an overview of California PUC inclusion of avoided energy, capacity, transmission,
distribution, and environmental compliance cost in overall avoided cost methodology) (available at:
https://ethree.com/CPUC/E3-Avoided-Costs-Final.pdf)
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others or increased off-system sales. DSM programs, by reducing customer demands, avoid a
larger set of costs than just energy and capacity. The current methodology does not include many
ofthese costs.
To accurately measure the prudence of DSM programs the Commission must have an
accurate accounting of these avoided costs. For purposes of the present docket, ICL submits the
Commission should review 2013 DSM spending understanding the current method undervalues
energF efficienry. Going forward ICL recommends the Commission initiate a process to fully and
accurately calculate the avoided costs for DSM programs.
II. Testing for Cost-Effective Energy Efficiency
There are four8 commonly accepted tests of whether a utility sponsored efficiency
program is cost-effective. These tests complement each other as each one measures the costs and
benefits from a unique perspective. The total resource cost test (TRC) "reflects the total benefits
and costs to all customers (participants and non-participants) in the [utility] service territory."e
The utility cost test (UCT) "calculates the costs and benefits of the program from the perspective
of . . . the utility implementing the program."lo The participant cost test (PCT) "assesses the costs
and benefits from the perspective of the customer installing the measure."" And the ratepayer
impact measure (RIM) test "examines the potential impact of the energy efficienry program has
on rates overall."r2 A cost/benefit ratio greater than 1.0 under each of these tests means the
program is prudent for the utility and ratepayers, whether participants or not.
t Some commentators describe a fifth, the Societal Cost Test, but this test is really an expanded version of the Totd
Resource Cost Test.
e National Action Plan for Energy Effici etcy, (Jnderstanding Cost-Effectiveness of Energy Effrciency Programs: Best
Practices, Technical Methods, and Emerginglssues for Policy-Makersat3-7 (November 2008).
'0 Id, at 3-6 (NAPEE calls this test the Program Administrator Cost test in recognition that some DSM programs are
run by third parties, not just utilities.).tt Id,at3-5.
t2 NAPEE at 3-6.
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Idaho has chosen to focus on the first three of these tests. The Staffand Idaho's investor
owned utilities entered into the Memorandum of Understandingfor Prudency Determination of
DSM Expenditures.ts The Staff, in Attachment 1 of the MOU, expects "that all programs and
individual measures should have the goal of cost-effectiveness from the total resource, utility, and
participant perspective."ln While cost-effectiveness from every perspective is a laudable goal,
when determining the prudence of utility decisions ICL recommends the Commission primarily
focus on one test - the Utility Cost Test.
When considering the prudence of a utility investment the Commission should focus on
whether, from the utility perspective, the benefits outweigh the costs. The UCT test factors in the
costs (incentives and administration) and benefits (avoided energy and capacity) controlled by
the utility. Since these are the costs and benefits the utility can accurately measure, and that
remain constant regardless of the individual participant, this is the correct perspective on which
to judge the utility's decision to invest in the program. This is particularly important in Idaho
because current methodologies do not consider the non-energy benefits that accrue to
participants in efficiency programs. According to Synapse Energy Economics, a leading expert in
the field,
If regulators choose to not account for [non-energy benefits], the [UCT] test is the best
test to use in screening energy efficiency programs. This test is relatively transparent, is
limited to the impacts on revenue requirements, and ensures that utility customers on
average will experience lower utility costs as a result of the efficiency programs. If the
t3 Memorandum of Understandingfor Prudency Determination of DSM Expenditures, Order No. 31039, IPC-E-09-09
(April 14,2010).
" Mou at 9.
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[UCT] test is used, regulators must recognize that important benefits are being ignored,
particularly low-income benefits and other fuel savings.'5
Often policymakers focus on the Total Resource Cost test. But this test layers on top of
the UCT the incremental costs and benefits to the program participant--something the utility has
little control over and that have unique values to each participant. For example, consider a
hypothetical program offering a $200 incentive for purchasing an efificient refrigerator. The
participant must pay the incremental cost beyond $200. Some participants pay cash; others need
financing. For those financing, the interest rate and repayment term create a unique incremental
participant cost. The benefits side is even more unique, as the TRC should include non-utility
incentives and non-energy benefits. Individuals may receive unique incentives from the product
seller or through tax laws. Also, individual participants may greatly value, or not, the non-energy
benefits. A utility has no accurate way to measure these unique costs and benefits that drive
individual decisions to participate. More importantly, this case considers whether Idaho Power
made a prudent decision to offer efficiency programs, and whether Idaho Power prudently
administered those programs. This case does not consider whether a customer made a prudent
decision to participate in the program.
Because it uses the most accurate benefits and costs, and measures from the perspective of
the utility whether those benefits outweigh the costs, ICL recommends the Commission
determine prudence based primarily on the Utility Cost Test results for each program. The results
" synapse Energy Economics, Best Practices in Energy Eficiency Program Screeningat 7, (Iuly 23,Z}L2)(available at:
http://www.raponline.org/documentldownload/id/6149). The bracketed terms are due to Synapse's use of "other
program impacts" to describe non-energy benefits and calling the Utility Cost Test the Program Administrator Cost
test.
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of the other cost-effectiveness tests help inform whether Idaho Power prudently designed and
administered the efficiency program.'u
III. Review of Idaho Power Residential Efficienry Programs
In 2013 Idaho Power's suite of residential efficiency programs delivered cost-effective
savings. For this reason, ICL recommends the Commission find prudent Idaho Power's spending.
However, while those savings Idaho Power acquired were cost-effective, the 2013 Demand Side
Management Report documents a28o/o declinetT in residential energy savings from20l2 to 2013.
Changes in deemed savings by the Regional Technical Forum account for a portion of this
decline. But the process evaluation reports and nonparticipant survey conducted in 2013 raise
significant questions about Idaho Power's administration of these programs in 2013.
For example, the non-participant survey reveals that 600lo of Idaho Power's residential
customers are not aware the Company offers efficiency programs.'8 This survey also reveals
customers desire these programs as 73o/o of residential customers rank efficiency as highly
important.re Further, a process evaluation of three residential programs critiqued Idaho Power's
marketing efforts and recommended relatively simple improvements like coordinating marketing
with retailers and other service providers.2o The evaluator interviewed Idaho Power customer
representatives and concluded they "do not appear to use a structured or systematic approach to
marketing" and "most marketing appears to be ad hoc and spontaneous."2r Overall the evaluator
states their "findings indicate a disconnect between the stated marketing strategy for these
16 For example, a program with a high utility cost test ratio and low total resource cost ratio means the utility could
offer a higher incentive for customers while maintaining a cost-effective program.
" Data from Idaho Power 2013 DSM Report Appendix 4 showing residential programs, excluding Oregon
Residential Weatherization, saving 23,585,379 kwh in 2012 and dropping to 16,990,367 kwh in 2013.
'8 HANSA GSR, Energy Eficiency Non-participant Surveyat 14, (April20l3). Filed in Idaho Power 2013 DSM Report
Supplement 2.
te Id.
20 TRC Energy Services, Idaho Power Residential Programs Process Evaluation, (December 2013). Filed in Idaho Power
2013 DSM Report Supplement 2.
2r ldaho Power Residentinl Programs Process Evaluation at ll3.
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programs, and the actual effects of marketing.'22 Throughout the report, the evaluator notes the
customer representatives are knowledgeable and the Company has developed marketing
materials for each program. For these reasons ICL submits the problem is a lack of management
direction to ensure a coherent, effective, and overarching customer engagement strategy.
Because of these lackluster customer engagement results,ICL recommends the
Commission find imprudent Idaho Power's 2013 marketing and administration of these
programs. To resolve this issue ICL recommends the Commission order Idaho Power to engage
the Energy Efficiency Advisory Group (EEAG) immediately in an effort to overhaul customer
engagement efforts and submit a detailed marketing plan to be implemented in 2015. A very
simple part of this plan could be TRC Energy Services'recommendation to create a portfolio
wide "brand" for the Company's efEciency offerings "to increase customer awareness and to
improve customers' image of the organization."23
The remainder of this section discusses the cost-effectiveness results and some
administration issues for most residential programs.
A. Ductless Heat Pump Pilot
Now in it's fourth year, this pilot program continues to deliver cost-effective savings and
is the only residential program focused on improving electric heating systems, a notoriously
inefficient use of electricity. The cost-effectiveness results for this program show a utility benefit
ratio of 2.51, while the total resource ratio is 0.71.24 As explained above, the appropriate focus for
determining the prudenry of offering the program is the Utility Cost Test result. When the
benefits outweigh the costs by more than 2 to l, the takeaway is that Idaho Power could increase
22 Id at ll9.
" Idat12.
'n Idaho Power 201i DSM Report, Supplement I at 15.
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the incentive offering while maintain a cost-effective program. Increased incentives are one way
to entice greater participation and thus energy savings.
The ductless heat pump program is a Northwest Energy Efficiency Alliance initiative in
which Idaho Power participates. This structure makes it difficult to review the marketing and
administration of the program. Idaho Power's 2013 efforts leading to higher participation and
savings appear reasonable.
B. Energy Efficiency Lighting
This program is shockingly cost-effective; so much so ICL submits it is imprudent to not
expand customer participation substantially. The results for this program show a utility benefit
ratio of 4.79, a total resource benefit ratio of 2.61, and a participant cost ratio of 2.96.2s This
program delivers the vast majority of residential savings. And while participation increased,
overall savings dropped by nearly half.'6 ICL recommends the Commission direct Idaho Power to
use the results of the cost-effectiveness tests to increase customer incentives as one part of a
strategF to increase energy savings.
Administration of this program is a joint effort by Idaho Power, Bonneville Power and
Fluid Strategies designed to incent retailers to stock and promote efficient lighting. The process
review of this program reports that Idaho Power's requirement for a program specialist to
preform a line-by-line review of invoices "seems onerous and cumbersome."T The evaluator
recommends streamlining this process to enable more time spent on recruiting and supporting
retailers. Shifting Idaho Power efforts and spending in this direction is important because the
evaluator notes marketing efforts are constrained by conflicts with retailer signage policies, and
25 Idaho Power 2013 DSM Report, Supplement 1 at 17. While the Ratepayer Impact Measure result is less than one, this
test is not covered by the DSM MOU. Further, a RIM score less than one is not necessarily a bad thing since, while
rates might increase, customer bills can decline due to reduced consumption. The proper policy is to focus on
reducing ratepayer bills, not utility rates, since the bill is where ratepayers feel the pain.
'u ldaho Power 2013 DSM Report at 34.2'TRC Energy Services Idaho Power Residential Programs Process Evaluation at3l.
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lack of engagement with grocery and independently owned hardware stores.28 Prudent
administration of this program should include actively and quickly resolving conflicts with
retailers and expanding this cost-effective program to all places customers purchase light bulbs.
C. Energy House Calls
This program provides free duct sealing and efficiency measures to electrically heated
manufactured and mobile homes." This is another highly cost-effective program, with utility and
total resource ratios of 3.95.30 When benefits outweigh the costs by nearly 4 to 1, the prudent
utility decision is to increase the customer incentives, or expand the offering to additional
housing types that may incur slightly higher costs. Unfortunately, despite a 38o/o decline in
participation from 2012 to z}l3,Idaho Power's 2013 activities retained the same marketing
efforts and did not include enhancing the financial incentives or expanding the offering to other
housing stock.3r Idaho Power implemented the current marketing strategy of direct mailings,
door hangers, program brochures, and customer service representatives in 2}ll.32 Since then,
participation has steady declined from a high point in 2010 of 1,602 homes to just 4l l homes in
2013.33 Despite declining results in a known cost-effective program, Idaho Power has not
improved marketing strategies since then. And, although Idaho Power's Energy Efficienry
Potential Study results, delivered in fanuary of 2013, show duct sealing is cost-effective for
existing and new single family and mobile homes, the Company has not expanded the program
to additional housing types.3a For these reasons ICL recommends the Commission find Idaho
Power's 2013 administration imprudent; the Company maintained a failing marketing strategy
and did not act on known information to expand this cost-effective program.
28 Id at 46.
2e Idaho Power 2013 DSM Report at 38.
'o Idaho Power 2013 DSM Report Supplement I atzl.
" Idaho Power 2013 DSM Report at 39.
" Idaho Power 201I DSM Report at 35.
3' Idaho Power 201 I DSM Report at 35, 2Ol3 DSM Report at 38.
3n ENERnoc Utility Soluti ons, Idaho Power Energr Efficiency Potential Study at Table B- 15 -16, 19 - 22.
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D. ENERGY STARHomes Northwest
This program incents builders to construct new homes that go beyond the baseline
building code standards. Constructing efficient housing stock is critically important, as
retrofitting homes is both more expensive and harder to elicit customer participation. As the
housing market in the Treasure Valley regains momentum, this program is becoming even more
important. The program is cost-effective for Idaho Power with a utility benefit ratio of 1.61.35
And while the total resource result is 0.95, this could tip beyond 1.0 by adding simple non-energy
benefits such as savings in water or gas due to efficient appliances, as Idaho Power currently does
for the Home Products program.'u Regardless, because the appropriate focus is on the results of
the utility cost test,ICL recommends the Commission find prudent Idaho Power's offering of the
program.
As for administering the program, ICL submits that Idaho Power fell short in 2013.
Increasing participation in this program is important due to an almost 35o/o drop in participation
and32o/o drop in savings from2012 while the local housing market begins to rebound. The 2013
DSM Report summarizes a process evaluation conducted by TRC Energy Services.3T The full
evaluation notes several shortcomings in Idaho Power's administration of the program during
2013. For instance, the evaluator noted Idaho Power's website "has outdated contractor
information" and noted "limited direct communication between builders and Idaho Power."38
The evaluation also notes builders question the value of meeting ENERGYSTAR standards." As
the experts in energy consumption and the value of efficiency, Idaho Power is uniquely suited to
educate builders and buyers on the value of efficient housing stock. This could begin with simply
35 Idaho Power 2013 DSM Supplement I at 25.
'u Idaho Power 2013 DSM Report Supplement I at 47.
" Idaho Power 2013 DSM Report at 42 - 44; Supplement 2.
" TRC Energy Services ldaho Power Residential Programs Process Evaluation at 17.
3e Id at lB.
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using the participant benefit ratio of 1.4640 to prove to builders and buyers ENERGYSTAR homes
are a good deal. An important part of prudently administering a program is providing timely and
accurate support to customers and trade allies.
E. Heating and Cooling Efficienry Program
This highly cost-effective program saw a large increase in participation and energy savings
in 2013.4I The cost-effectiveness results of 3.87 for the utility, 2.54for participants, and 1.93 for
the total resource align to show Idaho Power could increase incentives levels or expand the
program to additional participants.42ICL applauds Idaho Power for doing so for customers
replacing electric resistance heat with air-source heat pumps.n'Idaho Power also explains how
reinstating a federal tax credit encouraged program growth.s However,ICL notes the Idaho state
tax code provides a deduction only for fluid to air heat pumps.nt An important part of prudently
administering efEciency programs is to ensure other state incentives and programs align with
Idaho Power offerings.
F. Home Improvement Program
This program incents improved insulation and windows in electrically heated homes and
provided the third largest share of portfolio savings. Cost-effectiveness results here indicate
another opportunity to adjust incentive levels or expand offerings to additional housing stock in
order to increase program participation. The utility benefit ratio of 3.58 and total resource
benefit ratio of 1.18 indicate that Idaho Power can prudently increase the incentive levels while
maintaining a cost-effective program.* Increasing incentives will reduce the utility benefit ratio
4Idaho Power 2013 DSM Supplementat25.n' Idaho Power 2013 DSM Report at 45.
n' Idaho Power 2013 DSM Report Supplement I at 27 .n'Idaho Power 2013 DSM Report at 46.* Id.
" Idaho code 63 -3022c(3).* Idaho Power 2013 DSM Report Supplement 2 at3l.
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and increase the total resource benefit ratio. Meanwhile a participant benefit ratio of 1.43
provides solid evidence to support improved marketing to increase participation.
As for administering the program, the 2013 DSM report shows that since 2012, savings
increased by almost 350lo while participation declined by more than 56o/o.a' However, compared
to the first year of the program in 2010, savings are 85o/o lower and participation plummeted by
90o/o.a8 Based on these results Idaho Power does not appear to be prudently administering this
cost-effective program. Prudent administration requires maintaining effective marketing
techniques or, understanding and explaining the causes of the precipitous drop in participation.
G. Home Products Program
This program incents the purchase of ENERGYSTAR appliances and returned a rare
result of being more cost-effective for customers than for ldaho Power, with a utility benefit ratio
of 1.69, total resource benefit ratio of 2.24, and participant ratio of 3.42.ne This unusual result
comes from the non-energybenefits added to the later two tests from savings of gas, water, and
detergent.so While ICL maintains the Utility Cost Test, which excludes non-energy benefits, is the
appropriate test for determining utilitf prudence, this program is a good example of properly
calculating the Total Resource Cost test.
2013 saw a l7o/o decline in participation, but a negligible drop in energy savings.s'
According to the 2013 DSM report, marketing occurs primarily through retail outlets, similar to
the energy efficient lighting program. While the Home Products Program was not part of the
residential process evaluation, ICL submits many of the marketing challenges and
recommendations maybe transferable. For example, the process evaluation of the lighting
n'Idaho Power 2013 DSM Report at 51.
n8 Idaho Power 2010 DSM Report at 44 (showin93,537 participants and 3,986,199 kwh); 2013 DSM Report at 51
(showing 365 participants and 616,044 kwh).
" Idaho Power 2013 DSM Report at 47.
so Id.
5' Idaho Power 2013 DSM Report at 54.
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program notes that signage policies of retailers inhibit effective marketing.s'It is not clear from
the 2013 DSM Report whether this conflict with retailers is limited to the lighting program or
extends to the Home Products program. The DSM report documents what appears to be a
cumbersome process for customers to claim rebates; requiring after purchase submission of
receipts.s3 Prudent administration of DSM programs should continually strive to make the
process for customers as simple as possible.
H. Rebate Advantage
This is a very small, but highly cost-effective program to incent the purchase of
ENERGYSTAR qualified manufactured homes. The cost-effectiveness results of 5.39 for the
utility and 3.80 for the total resource benefits indicate Idaho Power could substantially increase
the marketing cost of the program while maintaining a cost-effective program.tn With a
participant benefit ratio of 6.38, ICL submits the best use of utility efficienry dollars is to increase
education and marketing to drive customer participation. This result shows that the incentive is
relatively meaningless when compared to the value of the participant's energy savings. And, with
results like these, Idaho Power should be expected to entice more than four of the 13
manufactured home retailers to advertise the program." While participation and savings did
increase in2013, prudently administering this extremely cost-effective program should result in
far higher participation levels. One simple action could be to provide specific training, marketing
support, and an incentive paid to salespeople for each home sold.
I. See ya later, refrigerator
t' Idaho Power Residential Programs Process Evaluation at34.
" Idaho Power 2013 DSM Report at 55.
tn Idaho Power 2013 DSM Report Supplement 1 at 51.tt Idaho Power 2013 DSM Report at 61.
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This program to remove extraneous refrigerators continues to be cost-efflective and
delivers the second most energy savings in the residential portfolio. With a utility and total
resource benefit ratio of 1.23, there dos not appear to be much room to alter incentives or
increase marketing.tu However, Idaho Power's Energy Efficiency Potential Study shows a large
potential to continue the program, with 85olo of the existing housing stock untapped.t'ICL
recommends Idaho Power continue to explore ways to reduce program overhead while
expanding participation.
IV. Review of Commercial and Industrial Programs
Idaho Power's three programs covering this highly diverse sector continue to be the most
cost-effective programs in the Company's portfolio for the utility, participants, and non-
participating customers alike.ss More importantly, these programs pass the stringent Ratepayer
Impact Measure that factors in forgone utility revenues. Passing the RIM test indicates that
investment in these programs will keep rates low today, and into the future, for all utility
customers. Accordingly, under investment in these programs will cause rates to increase
unnecessarily.
Unfortunately, in 2013 Idaho Power barely reached the level of achievable efficiency
potential in the sector identified in the Company's potential study and only 630/o of the
Integrated Resource Plan target.t' ICL acknowledges "there will be annual variability in achieved
energy savings from year to year in this sector."60 But the 2013 savings of 53,421 mwh were
between 43o/o and 550/o below prior years. Between 2009 and 2012, Idaho Power maintained a
56 Idaho Power 2013 DSM Report Supplement 1 at 55.
57 Energy Efficiency Potential Study Appendices at B-53 - 8-64 (Showing the measure titled "Refrigerator - Remove
Second Unit" with a 3olo base saturation, 85olo applicability and a cost effectiveness ratio of 1.35 for exiting single
family homes, 1.18 for existing multi family homes, 1.24 for existing mobile homes, and 1.24 for existing low-income
homes).
s8 Idaho Power Response to StaffProduction Requests 9 and 10.t' Idaho Power Energy Efficiency Potential Study at 5-l l.
6o Idaho Power 2013 DSM Report at 78.
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comparatively constant annual level with 93,153 mwh, 118,224 mwh, I 1 8,2 16 mwh, and 116,27 I
mwh in each of those years.ut These results indicate a precipitous drop in 2013 that did not seem
to occur in prior years.
Similar to the residential programs, a survey of non-participants and process review of
one program reveal some issues with Idaho Power's administration of the Commercial and
Industrial programs. HansaGCR's non-participant survey of commercial customers reveals 71olo
are not aware Idaho Power offers efficiency programs, while 900/o see efficienry as important.62
Combined with the large drop in savings in 2013, this survey result indicates Idaho Power has
likely acquired all the "low hanging fruit" type customers. Importantly,Idaho Power received
these survey results in April of 2013, providing amble opportunity to revamp outreach efforts
during this program year.
The process evaluation of the Easy Upgrades provides a more detailed insight into Idaho
Power's administration of this program during 2013. The evaluator notes "programs similar to
Easy Upgrades typically spend about 3 - l0o/o of their budgets on marketing.nu'Meanwhile Idaho
Power spent only a fraction of this amount, $50,000 compared to a target budget of $159,000 to
$530,000.64 Beyond budgets, the evaluator describes several problems with the tasks and workflow.
For example, while partnering with contractors is an effective way to reach customers, the "Easy
Upgrades program does not have outreach staffdedicated to working with contractors."65 The
evaluator also describes flaws in the workflow, with program staffnot having access to project
applications or potential leads. Most glaringly, the evaluator notes, "much of the information
transfer between staffis done through paper files and'sticky notes"'leading to confusion for
u' Sum of annual savings for the Building Efficiency, Easy Upgrades, and Custom Efficiency programs in 2OO9,2OlO,
201l, and 2012. Nl data available in Idaho Power 2013 DSM Report Appendix 4.
62 HANSA GCR ldaho Power Non-Participant Survey at 9.u' Opinion Dynamics, Easy [Jpgrades Program Process Evaluation at 1. Filed in Idaho Power 2013 DSM Report,
Supplement 2.
64 Id.
6s Id at2.
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customers and inhibiting "making accurate forecasts and adjusting tactics to meet goals."66 This is
particularly unfortunate because Easy Upgrades is highly cost-effective with a utility benefit ratio
of 4.71and total resource benefit ratio of 2.61. Idaho Power could invest substantially more in
administration while maintain a cost-effective program. Because of the lack of marketing support
and cumbersome program management, the Commission should find Idaho Power's
administration of this program imprudent.
The other two programs in this sector, Building Efficiency and Custom Efficiency, are
also highly cost-effective programs. These results indicate Idaho Power could substantially
increase the marketing and administration cost while maintaining cost-effective programs. Doing
so could assist the Company in meeting the energy savings targets they self-imposed in the 2013
IRP. ICL recommends the Commission encourage ldaho Power to invest more resources in
growing program participation and energy savings.
V. Market Transformation
Idaho Power's primary efforts to transform the marketplace for energy efficiency occur
through the Company's participation in the Northwest Energy EfficiencyAlliance (NEEA). In
2013 Idaho Power reports they paid $3.1 million into NEEA for the Idaho jurisdiction and
received 18,347 MWh of energy savings in return.67 The Company states this was a cost-effective
program and ICL has no reason to doubt this. Therefore,ICL recommends the Commission
deem prudent Idaho Power's 2013 investment in NEEA.
However, ICL has serious concerns about Idaho Power's management of the relationship
with NEEA in 2013. Since 2012, the Company has attempted to withdraw from this cost-effective
and unique program to deliver energF savings.68 On FebruaryT,the Energy EfficienryAdvisory
66 Id at 33.u' Idaho Power 2013 DSM Report at 116-117
68 See Order 32953 at9 - I 1.
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ICL Comments
l7 July,29 2014
Group members asked Idaho Power how they planned to replace NEEA activities if the Company
were to withdraw; Idaho Power did not respond.6e On May 23,the EEAG asked for an
explanation of what portions of NEEA effiorts the Company values and those they do not; Idaho
Power did not respond.'o Finally, in September the Company explained they were frustrated with
NEEA's marketing and were exploring a new funding model that allowed a more piecemeal
approach." However, in November the Company refused to describe to the EEAG where Idaho
Power sees value and does not.T2More importantly, Idaho Power stated that, while they would
like a different funding model, the Company did not provide NEEA with anything beyond "high
level options."'3In Order No 32953, the Commission expressed concern the Company does not
"proactively and collaboratively involve the EEAG in the DSM-related decisions" including
specifically decisions regarding NEEA.74 The EEAG meeting minutes described above show that
Idaho Power did not work collaboratively with the EEAG on this issue, and appears to have not
worked collaboratively with NEEA on this issue in 2013. For this reason, ICL recommends the
Commission find imprudent Idaho Power's administration of their relationship with NEEA.
VI. Conclusion
Idaho Power's 2013 DSM investments resulted in cost-effective energy savings. Because it
accurately measures the costs and benefits under the control of the utility, ICL recommends the
Commission base this determination on the Utility Cost Test results. ICL also recommends the
Commission review these results understanding that the avoided costs are artificially low.
However ICL recommends the Commission deem imprudent the Company's administration of
most of the DSM programs, particularly in regards to marketing effiorts and internal workflow
u'EEAG meeting minutes for February 7,20L3 at 8, filed in Idaho Power 2013 DSM Report Supplement 2.
'0 EEAG meeting minutes for May 23 2013 at 3.
" EEAG Meeting Minutes for September 18, 2013 at 9.
" EEAG Meeting minutes for November 14,2013 at2.
73 Id.
'n Order No. 32953 at I l.
IPC-E-14-04
ICL Comments
18 Jnly,29 2014
processes. While this docket focuses on 2013 actions,ICL recommends the Commission provide
forward looking guidance to explicitly review avoided cost calculations and prudently administer
the Company's relationship with NEEA.
Respectfully submitted this 29ft day of |uly 2014,b" d**
Benjamin I. Otto
Idaho Conservation League
IPC-E-14-04
ICL Comments
19 July,29 2014
CERTIFICATE OF SERVICE
I hereby ceftiry that on this 29s day of |uly, 2Ol4,I delivered true and correct
copies of the foregoing COMMENTS OF THE IDAHO CONSERVATION LEAGUE to
the following persons via the method of service noted:
Hand delivery:
Iean Jewell
Commission Secretary (Original and seven copies provided)
Idaho Public Utilities Commission
42TW.Washington St.
Boise, ID 83702-5983
Electronic Mail:
Idaho Power
Iulia A. Hilton
Darlene Nemnich
Tami White
Regulatory Dockets
Idaho Power Company
P.O. Box 70
Boise,Idaho 83707
[e-mail]
twhite@idahopower. com
[e-mail]
[e-mail]
Industrial Customers of ldaho Power
Peter f. Richardson
Richardson Adams, PLLC
515 N.27th St
Boise, ID 83702
[e-mail]
Don Reading
6070 Hill Road
Boise,ID 83703
dreadin g@mindspring. com
rPC-E-14-04
Certificate of Service
Benjamin I. Otto
July 29,2014