20150408Comments.pdf

Peter J. Richardson ISB # 3195
Gregory M. Adams ISB # 7454
RICHARDSON ADAMS, PLLC
515 N. 27th Street
Boise,Idaho 83702
Telephone: [phone] I
Fax: [phone]
peter@richardsonadams. com
gre g@richardsonadams. com
Attorneys for the Industrial Customers of Idaho Power
IN THE MATTER OF TDAHO POWER
COMPANY'S APPLICATION FOR
APPROVAL OF NEW TARIFF
SCHEDULE 82, A COMMERCIAL AND
INDUSTzuAL DEMAND RESPONSE
PROGRAM (FLEXPEAK PROGRAM)
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CASE NO. IPC.E.15.O3
COMMENTS OF THE INDUSTRIAL
CUSTOMERS OF IDAHO POWER
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
COMES NOW, the Industrial Customers of Idaho Power ("ICIP") pursuant to that
Notice Application and Notice of Modified Procedure issued by the Idaho Public Utilities
Commission ("Commission") on March 4,2015, and hereby provides the following comments
on Idaho Power Company's ("[daho Power" or the "Company") proposed Tariff Schedule 82.
On February 4,2015, Idaho Power filed its Application with the Commission seeking approval
of proposed Tariff Schedule 82 Flex Peak Program ("FPP"), as a replacement for the EnerNOC
administered FlexPeak Management Program ("FMP").
Like the FMP, Idaho Power's proposed FPP will be a voluntary demand response
program for commercial and industrial ("C&1") customers who are willing to reduce their
electric loads for a short time on peak days in the summer. However, Idaho Power's FPP will be
PUBLIC COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
rPC-E-15-03
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managed intemally rather than through a contract with a third-party provider as has been done
since the inception of the program six years ago.
ICIP SUPPORT
In the past, the ICIP has been critical of the lack of transparency regarding the
relationship between the third-party provider (EnerNOC) and the C&I customer. The ICIP was
also concemed with the possible disparate treatment of participants in the program in that each
individual customer negotiated its own 'deal' and there was no guarantee of uniformity and non-
discriminatory treatment among the participants. The Company's application addresses and
resolves those concerns. Managing the proposed FPP through a filed tariff that details the
mechanics of the program and pre-sets the payments to participants certainly provides
transparency and helps insure all customers know the parameters of the program and are being
treated equally.
COMMENTS
The ICIP offers these comments in order to aid the Company in designing and
implementing a C&I demand reduction program that is cost effective and attractive to those C&[
customers who choose to participate.
The Company is planning to pay between 529.25 and $36.93 per kWyr to participants.r
The low end of the range, $29.25 will be the amount for the three required events when no
variable payments would be made.2 The upper end of the range would only occur if there were
more than three events. These payments are slightly higher than the payments under the FMP
offered by EnerNOC and they should therefore be sufficient to attract participation in the new
' Staffs First Production Request, Response No. l, p. 2.
'The season is 9 weeks times $3.25 equals $29.25.
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FPP program administered by Idaho Power. However, it should be noted that the exact payment
made by EnerNOC to any individual participant is not known. It is therefore possible that the
payment offered by Idaho Power could be less than the amount paid by EnerNOC. There is thus
a risk that some existing participants could be discouraged from participating in light of possibly
lower incentive payments under the new progftrm. There is also the possibility that some
participants will be paid more for their participation. We will only know if these possibilities are
offsetting after Idaho Power has had some history with operating the new progftrm.
The Company explains that the risk of not attaining the actual nominated kW reduction is
mitigated by the fact that there is a reduction in payments to participants who do not achieve
their target reduction. Company witness Quentin Nesbitt states in his direct testimony:
Q. How does this compare with the risk that exists under o third-party aggregator
model?
A. The risk is the same; however, from the utility's perspective, under a third-party
administrator model, the downwardfinancial adjustment is made to the third party rather
than directly to the participant, as will be the case with the Company-managed program.
In either case, the utility ond its customers are protectedfinanciallyfrom the risk of
actual load reduction dffiringfrom nominated levels.
And,
Q. How will the Company ensure that it is not payingfor load reduction that was not
achieved?
A. The incentive calculations proposed in Schedule 82 ensure that a participont is only
paidfor demand reduction achieved based on actual meter data. If a participant does not
meet its Nominated kW during a given hour within a Program event, the participant will
be subject to a Nominated kW Incentive Adjustment, which reduces the amount of
incentive payments that can be received, but in no event would result in the participant
owing money to the Company.3
3 Direct Testimony of Quentin Nesbitt, IPC-E-15-03, pgs. 8, 9.
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The ICIP agrees with the Company that participants should not end up owing Idaho Power
money for not meeting the nominated level of kW reduction, and agrees that participants should
only receive payments for a fairly calculated amount of demand reduction.
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This is a fair way of calculating a participant's performance and the ICIP urges ldaho Power to
continue this practice going forward with its new FPP. The method proposed by Idaho Power
may tend to discourage participation.
In order to determine whether a customer has achieved its nominated kW reduction there
must be a yardstick against which to measure actual reductions. Understanding that customer
usage can be dynamic over time, it is important to accommodate the fact that a yardstick that is
not flexible will be less accurate than one that accommodates the dynamism inherent in each
customer's unique load. Idaho Power proposes a relatively rigid yardstick when compared to the
yardstick used by EnerNOC in the old FMP. Both programs' initial determination of the
yardstick (called the "baseline) is
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preferred because it is not uncommon for food processing plants to be down for an entire week in
the mid-surlmer in between crop seasons. In addition, the old EnerNOC program achieved more
granularity in its baseline calculation
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Idaho Power is not going to offer to provide real time data to participants in its new FPP.
Certainly this is one area of savings as compared to the program offered by EnerNOC. However,
real time data is a tool that is useful to some participants in the program. The ICIP urges the
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Company to consider offering real time data to those participants who request it. Just offering
pulse data may not be sufficient for customers who do not have the capability of reading that
data. The lack of real time data could create a disincentive to robust participation in the
progftrm.
The ICIP appreciates some of the changes in the administration of the new program. For
example, making payments thirty days after the end of the Season is one such change that
provides an incentive for more participation. In addition, continuing to allow aggregation of
multiple sites owned by the same customer is a valued feature of both programs. On the other
hand, the lack of active coaching may prove to be problematic for smaller C&I customers, we
will want to monitor the mix of participants as we move forward to insure that more than just the
sophisticated large customers are able to meaningfully participate.
Some of the ICIP members expressed concern regarding Idaho Power calling an event
and then subsequently cancelling the event just before the event is to start. These members
observed that it can take as much as two hours to prepare for the start of an event and another
hour to two to get back to 'normal' after the event. Thus, we suggest that if an event is canceled
within two hours of the scheduled start time that the incentive payment is made for the first hour
ofthat event.
CONCLUSION
The ICIP recommends the Commission approve Idaho Power's application in this docket
with the changes noted herein.
RESPECTFULLY SUBMITTED this 8th day of April 2015.
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Nina Curtis
Administrative Assistant
PUBLIC COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
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RICHABDSONADAMS. PLLC,, /odQ,M
Peter J. Richardson on behalf of
the Industrial Customers of Idaho Power
CERTIFICATE OF SERVICE
I hereby certify that on the 8th day of April 2015, copies of the foregoing Comments of
the Industrial Customers of Idaho Power were hand delivered to:
Lisa Nordstrom
Idaho Power Company
l22l West Idaho
Boise,Idaho 83702