20140729Comments.pdf

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Peter J. Richardson ISB No. 3195
Gregory M. Adams ISB No.7454 iiili,.;Li l:ii"'.,,..:
Richardson Adams, pLLC tilill"l'l::S {l{}i.,;riiiSsilil
515 N. 27m Street
P.O. Box 7218
Boise,Idaho 83702
Telephone: [phone] Tel
Fax: [phone]Fax
[e-mail]
Attorneys for the Industrial Customers of ldaho Power
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
TN THE MATTER OF THE APPLICATION OF )IDAHO POWER COMPANY FOR A ) CaSe NO. IpC-E-14-04
DETERMINATTON OF 2013 DEMAND-SIDE )MANAGEMENT (.:ry_]q) EXPENSES AS ) conauENrs oF rHE TNDUSTRTALPRUDENTLY TNCURRED ) cuStoMERS OF rDAHO POWER
COMES NOW, The Industrial Customers of ldaho Power, ("ICIP") and pursuant to Rule
203 of the Rules of Procedure of the Idaho Public Utilities Commission (the "Commission") and
the Commission's Notice of Application and Notice of Modified Procedure issued on April 30,
2014, and provides the following Comments.
Idaho power Company ("ldaho Power" or the'oCompany') seeks approval for
designating ldaho Power's expenditures of $21,748,331 of Idaho Energy Efficiency Rider
("Rider") funds and $4,203,155 of demand response ("DR") program incentives included in the
2014 Power Cost Adjustment ("PCA"), for a total of $25,951,486, as prudently incurred
demand-side management ("DSM") espenses. These expenses are pursuant to reporting
requirements included in Commission Order No. 29419 and in accordance with agreed upon
guidelines set forth in the Memorandum of Understanding for Prudency Determination of DSM
Expenditures (ooMOU").
Idaho Power DSM Prosrams and Expenditures
Chart One below depicts the Company's conservation expenses and savings since 2002.
CHART ONEI
250,000
200,000
150.000
3
=100,000
50,000
Soo
5so
5+o
Sgo
Szo
Sro
SO
I
6co
E
N(nsfln(oN6(')Ot-.tNanOOOOOOOOFIFIF{Fioooooooooooo(\r\(\(!NNN(\(\(\N(\
ITotal Expenditures (millions) +-Total Energy Savings (MWh)
As can be seen in the above Chart One, both DSM savings and expenditures have
precipitously since 2010. Expenses have fallen by 4l% or $19 million, and MWh
fallen by 45% or 86,000 MWh. While total expenses and savings have fallen, the
for savings has actually increased by six percentage points since 2010.
I Source: Idaho Power, DSM 2013 Annual Report, pages 5 - 6; Fig. l-4.
fallen
savings have
cost per MWh
ICIP Comments- IPC-E-14-04
CHART TWO2
200,000
150,000
100,000
50,000 I
l
Srso
Ssoo
Szso
S2oo 5ESrso ;
Sroo
Sso
So
I
i
I
I
(\lmstlnloF@o)OF{(\tnOOOC)OOOOFIFiF{!-{oooooooooooo(\ (\ (n (\ N N N (\ N (\ C\,t N
ITotal Energy Savings (MWh) {-Cost of Energy Savings (S/MWh)
Chart Two, above, indicates that although the Company's programs have matured over the years,
they are losing some of their effectiveness. This pattem of declining effectiveness may be
unsurprising in light of technical improvements and market transformation. Nevertheless, this
declining effectiveness requires the Company to critically examine all of their programs with an
eye toward phasing out the less cost effective ones.
Commercial and Industrial Proerams Provide Hisher Savines at the Lowest Cost per KWh
Table One below shows that for 2013,ldaho Power's commercial and industrial
programs provided three times the savings as the residential and irrigation sectors, and did so at
lower costs per KWh.
2 Source: tdaho Power, DSM 2013 Annual Report pages 5 - 6; Fig. I -4.
ICIP Comments- IPC-E-14-04
TABLE ONE3
Residential
c&r
lrrigation
MWh
Savings
18,859
59,2M
20,529
Expenditures
s5,670,345
s9,756,956
53,886,068
Costs /
MWh
s3oo.67
s164.6s
s189.30
The MWh savings for the commercial and industrial programs exceeded what the Company
considered their'achievable potential.'
CHART THREE
Commercial & lndustrial DSM Programs
2013 IRP Target Achievable ReportedSavings
Potential
The ICIP appreciates ldaho Power's efforts in providing cost effective programs for the
commercial and industrial classes. As the Company looks to improve the overall cost
effectiveness of its energy efficiency and conservation programs these two classes should be
targeted for additional efforts to build on what are obviously successful programs.
Note that actual reported savings are higher than the Company's estimate of achievable
potential savings, and both reported and achievable savings are significantly below the 2013 IRP
Target. Achievable potential MWh savings for ldaho Power's programs were developed by
3 Nemnich, Exhibit No. l; Staff DR Nos. 9, 10.
ICIP Comments- IPC-E-14-04
Io,00
-9,
==
100,000 r-""
80,000 i
60,000 I
40,000 :
20,000 i
EnerNOC.a The estimates of achievable potential take into account market maturity, customer
preferences for energy-efficient technologies and expected program participation. EnerNOC
looked at Idaho Power's past DSM savings over the last five years and incorporated ramp rates
taken from the Power and Conservation Council's (NWPCC) sixth plan. The Company's 2013
Target estimates were developed by Idaho Power.
Actual commercial and industrial savings were only six percent higher than EnerNOC's
estimate of achievable savings; however the 2013 Target was nearly 60% higher than reported
savings. Going forward the Companty should re-evaluate its IRP Target and achievable savings
to better align with what the programs are actually saving.
EPA's Section llld Rule's Impact on Idaho
On June 2,2014, the Environmental Protection Agency ("EPA") proposed the Clean
Power Plan to cut carbon emissions from existing power plants. EPA's proposed new rules
pursuant to Section I I ld of the Clean Air Acts specifically target greenhouse gas emissions from
existing electric power plants. The proposed emission reduction goals in EPA's analysis are
based on the Energy Information Agency's (EIA) 2012 electric power profile for each state. The
carbon dioxide (CO2) emissions from each states' power plants form the basis for the targeted
reductions. This approach has led to significantly different carbon generation footprints among
the various states that must be mitigated.
For example, of the 49 affected states (Vermont has no fossil-fueled power plants), Idaho
has the lowest carbon footprint at339 pounds of CO2 per net MWh. The final goal for Idaho is
to reduce the 339 figure down to228 pounds of CO2 per MWh. Idaho's relatively low carbon
footprint is due largely to the fact that there are no coal-fired power plants in Idaho. The only
a Idaho Power Energy Efficiency Potential Study, EnerNOC Utility Solutions, Jan.2013.
s 42 u.s.c. $ 741l.
ICIP Comments- IPC-E-14-04
fossil-fueled power plants covered by the new EPA rules are the Rathdrum plant in North ldaho
and the Langley Gulch plant in Southern ldaho.
There will obviously be changes to the proposed rules, but it is reasonable to assume the
contours of the EPA plan will largely be intact at the end of the day. Two of the four ' building
blocks' contained in EPA's proposed rule to meet the 2030 targets applicable to ldaho include
adding generation from renewable sources and increasing demand-side energy efficiency.
The starting point for EPA's calculation of Idaho's carbon intensity is 858 lbs of CO2
per MWh.6 This base number of 858 was then reduced to account for the output of renewable
energy, which according to the EPA accounts for 160/o of ldaho's generation, thus dropping the
858 pounds per MWh to 339 pounds per MWh.
EPA's energy efficiency targets are based on each state's retail sales. Idaho Power's
retail sales make up approximately one-half of the state's total. This means that ldaho Power's
conservation programs will play a significant role in the state's ability to meet EPA's final
targets. In order for ldaho to meet the eventual targets will that will be implemented, it will be
important for Idaho Power to be implementing programs that increase DSM savings and reverse
the precipitous decline Idaho Power has experienced since 2010.
In addition, EPA is encouraging states to examine a regional approach under which states
could trade or sell savings credits. For example, the state with the highest emissions in the
nation is Montana with2,246 pounds of CO2 per MWh. Idaho has the lowest emissions per
MWh in the nation. If Idaho exceeds its target emissions goal, it could sell those credits in a
move to help keep our electric rates lower than they otherwise would be.
6 EPA used 2012 data to calculate this number. Langley Gulch only operated for half of that
year. It is unknown at this time whether EPA will adjust the data to assume a full year's of
operation at Langley. It is does so, then obviously these figure s will also have to be adjusted.
6ICIP Comments- IPC-E-14-04
Conclusion
The ICIP appreciates the opportunity to comment on Idaho Power's request for a
prudency determination. The ICIP respectfully requests that the Commission require ldaho
Power to take corrective measures to reverse the downward trend in energy efficiency
achievement.
Dated this 29m day of July 2014.
RICHARDSO
By
Attorneys for the [ndustrial
Customers of Idaho Power
ICIP Comments- IPC-E-14-04
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 29th day of July,2014, a true and correct copy of the within
and foregoing COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER in
Docket No. IPC-E-14-04 was served by the method indicated to:
Julia Hilton [electronic delivery]
Corporate Counsel
Idaho Power Company
l22l West ldaho Street
Boise, Idaho 837 07 -0070
j hilton @idahopower.com
Jean Jewell [hand delivery]
Commission Secretary
Idaho Public Utilities Commission
472West Washington
Boise,ldaho 83702
Ben Otto [electronic delivery
Idaho Conservation League
710 N. 6tr Street
Boise,ldaho 83702
botto@ idahoconservation.org
Administrative Assistant
ICIP Comments- IPC-E- 14-04