20160714Comments.pdf

Peter J. Richardson ISB # 3195
Gregory M. Adams ISB #7454
RICHARDSON ADAMS, PLLC
515 N.27th Street
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter@richardsonadams. com
gre g@ richardsonadams. com
Attorneys for the Industrial Customers of Idaho Power
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR DETERMINATION OF
20 I 5 DEMAND-SIDE MANAGEMENT
("DSM") EXPENDITURE AS
PRUDENTLY INCURRED
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-16.03
COMMENTS OF THE TNDUSTRIAL
CUSTOMERS OF IDAHO POWER
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 (o'Commission") on April 19,2016, and hereby provides the following comments
on Idaho Power Company's ("[daho Power" or the "Company") application for approval of
prudently incurred 2015 demand-side management ("DSM") expenditures. On March 75,2016,
Idaho Power filed its Application for an order designating $35,196,964 in demand-side
management expenses, including $28,495,701 in ldaho Energy Efficiency Rider ("Rider")
expenses and $6,701 ,263 in demand response program expenses as prudently incurred. If the
Commission finds the DSM expenses are prudently incurred, it should allow the Company to
COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
IPC-E-16-03
PAGE I
recover the expenditures in customer's rates. On the other hand, any imprudently incurred
expenses should be disallowed and those costs borne by the utility's shareholders.
COMMERICAL AND INDUSTRIAL ENERGY EFFTCIENCY PROGRAMS
Members of the ICIP have participated in and encouraged Idaho Power's energy
efficiency ("EE") and peak load reduction ("FlexPeak") programs in the past. The ICIP supports
and encourages continuance of the programs going forward. The Commercial and Industrial
(C/I) conservation progrtrms are not only important to ICIP members, but are also important to
the energy and demand reduction efforts of the Company as a whole on behalf of all of its
ratepayers.
For the Commercial and Industrial classes combined, (Schedules7,9, and 19) energy
efficiency progftrm expenditures totaled $15,525,949 which purchased a total energy savings in
the amount of 102,073,910 kwh.l Therefore, although the ClI classes represents only 42%o of
total EE expenditures, they actually contributed 63%o of the energy savings. The energy savings
for the Commercial and lndustrial sector increased from the 2014 level of 78,939,605 kWh, or
29Yoin20l5.2 Among the C/I EE programs, in terms of energy savings, the Custom Efficiency
progftrm was by far the most successful. It had the largest energy savings in 2015 \Ntth 55,247
MWh. The two other major EE programs - Easy Upgrades (23,595) and Building Effrciency
(23,232)- saved an equivalent amount.3
There are three Cost/Benefits (C/B) tests employed by tdaho Power (UC, TRC, PCT) that
measure the MWh savings to determine the cost effectiveness in the Company's DSM portfolio.
' Idaho Power 2015 DSM Annual Report, Table 2, p., I l.2 Idaho Power 2014 DSM Annual Report, Table 2, p., 12.
' Idaho Power 2015 DSM Annual Report, Table l, p., 10.
COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
IPC-E-16-03
PAGE 2
Of those measures, the C/I sector ranked highest on the UC test at 7 .63, which is actually I .6
points higher than the next customer class-Irrigation Efficiency. The Commercial and Industrial
classes' ratios on the other two C/B test are above 3.5.
A C/B test that is equal to one or greater is considered cost effective. Programs that have
C/B ratios less than one are slated for elimination or revamping in an attempt to increase the cost
effectiveness of the progrirm. Superficially at least, a very high C/B ratio such as the C/I class
for Building Efficiency UC test of 7 .63 would appear to be an unqualified success. However,
while being very cost effective for the utility, a high cost benefit ratio is a symptom that there are
significant conservation kWh being "left on the table". It is an indication the program can be
expanded and more cost effective energy can be saved. This conclusion is critically important in
light of the fact that this Commission has stated in numerous orders that tdaho Power should
pursue all cost effective conservation.
We have consistently directed the Company to pursue all costeffective DSM programs in an
effort to benefit all ldaho Power customers by delaying the need to build new, costly generating
facilities.a
Given the high cost benefit ratios for the Commercial and Industrial class the energy efficiency
program offered by Idaho Power to the ICIP members, as well as other business customers, has
been shown to the most effective in terms of the amount of electric power saved in a cost
effective manner. The ICIP appreciates Idaho Power's efforts with these programs and
encourages the Company to not only continue but expand, as the Idaho Commission has directed,
these types of cost effective energy conservation programs.
o ldaho Public Utilities Commission, Order No. 32953, IPC-E-13-08, p. 10.
COMMENTS OF THE TNDUSTRIAL CUSTOMERS OF IDAHO POWER
IPC-E-16-03
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THE DSM RIDER PROJECTED SURPLUS
According to the testimony of Company witness Connie Aschenbrenner, the adjusted
Energy Efficiency Rider (EE Rider) balance, as of December 31, 2}l5,is a positive $6,554,074.s
This balance is the result of 2016 collections, with interest, of $39.0 million, expenditures of
$28.5 million, and less the Commission authorized transfer of $4.0 million to the 201512016
PCA.
In the Company's last general rate case the ICIP recommended that the Commission
lower the Company's EE Rider down to 3.8%o from the then current level of 4.75olo due to
projected DSM expenditures of $7.5 million less than expected fund collections.6 The
Commission did reduce the EE Rider collection percentage to 4.0Yo which has remained constant
to the present.T Since that time, EE Rider collections have continued to exceed DSM
expenditures. In just the last three Power Cost Adjustment (PCA) years there have been transfers
of $20 million, $4 million, and $4 million, respectively, for a total of $28 million from the EE
Rider account.s e l0 Therefore, along with the PCA transfers of $28 million over the past three
PCA cycles, along with the $6.5 million current surplus there has been $34.5 million more
collected from ratepayers for DSM programs than has been spent in any attempt to save energy.
The ICIP addressed the fact that the surplus in the account was becoming an ongoing
pattern and stated its willingness to work with the parties to pursue additional cost effective
s Aschenbrenner, DI Table 7, p. 16.
6 Don Reading, Direct Testimony, IPC-E-l I -08, p. 31.
' Idaho Public Utilities Commission, Order No.32426,IPC-E-l l-08, p. 20,21.t Idaho Public Utilities Commission, Order No. 33049, IPC-E-14-05, p. 5.
' Idaho Public Utilities Commission, Order No. 33306, IPC-E-15-14, p. 4.
'o Idaho Public Utilities Commission, Order No. 33526, IPC-E-16-08, p. 3.
COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
rPC-E-16-03
PAGE 4
programs in the DSM prudence case last year.l' The Company, in its Reply Comments, stated it
would be "erroneous to attribute annual increases or decreases in energy efficiency savings
solely to the Company's actions", and that the Commercial and lndustrial sectors have
"substantial savings associated with them and can take years to complete".12 Idaho Power
commented further the balance in the fuder account does not indicate "mismanagement of
customer funds".13 The ICIP notes that the Company does not have sole control over the energy
savings of the Commercial and Industrial classes, or any other customer class for that matter.
The ICIP does not imply that the ongoing surpluses in the Rider account means the Company is
mismanaging its conservation programs, only that surplus funds, for whatever reason, are clearly
not being used for their intended purpose.
What the Company has been doing, in taking tens of millions from the Rider and
transferring those funds to the PCA, is using customers' conservation contributions to support its
supply side resources. The ICIP recommends that it is time to either (or both) reduce the EE
Rider percentage and/or use the excess millions of dollars to ramp up the Company's most cost
effective programs. Given the totals of the approximately $10 million, the $6 million positive
balance plus the $4 million to the PCA, the EE Rider percentage could be reduced to 3Yo while
still maintaining existing program levels. The ICIP proposes a moderate approach and suggests
the Commission 'split the difference' by reducing the EE Rider percentage to 3.5%o, along with
the elimination of any Rider fund dollars being transferred to the PCA in the future. The ICIP
also urges that if there is again a surplus in the Rider account next year that the level of
" ICIP Comments, IPC-E-15-06, p. 3.
'' Idaho Power Company's Reply Comments, IPC-E-15-06, p. 3.
13 Id. p. 8.
COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
IPC-E-16-03
PAGE 5
percentage collected, along with program expenditures, be reexamined.
The ongoing and consistent pattem of surplus Rider balances, along with high C/B ratios,
means there is ample room to expand these, or additional, programs along with some reduction
in the collection percentage.
The Idaho Commission in its Order in last year's DSM prudence case stated,
No one asked us to reduce the Rider in this case. While we appreciate ICIP's comments, t4)e
decline to associate a surplus with mismanagement of Rider funds. However, we encourage the
Company, Staffand other stakeholders to continue to monitor the Rider balance and to apprise
us of any positive or negative trends.ta
This year there is another Rider account surplus which is a "negative trend" from the ratepayer's
perspective.ls The ICIP, therefore, once again encourages the Company to acquire cost effective
opportunities with the funds it has in the rider account AND reduce the percentage being
collected. The ICIP is willing to work with the Company, the Commission Staff, and other stake
holders to pursue additional cost effective DSM programs.
RESPECTFULLY SUBMITTED this l4th day of July 2016.
RICHARDSON ADAMS, PLLC
By
the Industrial Customers of Idaho Power
'o ldaho Public Utilities Commission, Order No. 33365, IPC-E-15-06, p. 5.ls The industrial customers of Idaho Power, at least, would rather have the use of their money rather than having it
sit idle in Idaho Power's bank accounts.
COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
rPC-E-r6-03
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CERTIFICATE OF SERVICE
I hereby certify that on the 14th day of July 2016, copies of the foregoing Comments of
the Industrial Customers of Idaho Power were hand delivered to:
Lisa Nordstrom
Idaho Power Company
1221 West Idaho
Boise,Idaho 83707
lnordstrom@ idahopower. com
dockets@ idahopower.com
Connie Aschenbrenner
Idaho Power Company
P.O. Box 70
Boise,Idaho 83707
caschenbrenner@ idahop ower. com
Brandon Karpen
Deputy Attomey General
Idaho Public Utilities Commission
47 2 W est Washingto n (837 02)
P.O. Box 83702
Boise, Idaho 83720-007 4
brandon [e-mail]. gov
Benjamin J. Otto
Idaho Conservation League
710 North 6th Street
Boise, Idaho 83702
botto@ idahoconservation.org
Kandi Walters
AdminiStrative Assistant
COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
IPC-E-16-03
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