20180315Aschenbrenner Direct.pdf

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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICAT]ON
OF IDAHO POWER COMPANY FOR A
DETERMINATION OE 2OI7 DEMAND-
SIDE MANAGEMENT EXPENSES AS
PRUDENTLY INCURRED.
CASE NO. IPC-E-18-03
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
CONNIE ASCHENBRENNER
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O. Please state your name and business address.
A. My name is Connie Aschenbrenner. My business
address is 722L West Idaho Street, Boise, Idaho 83102.
a. By whom are you employed and in what capacity?
A. I am employed by Idaho Power Company ("Idaho
Power" or "Company") as the Manager of Rate Design in the
Regulatory Affairs Department.
O. Please describe your educationa1 background.
A. In May of
Busi-ness Administration
2006, I received a Bachelor of
degree in Finance from Boise State
University
a Master of
in Boise, ldaho. In December of 20It, I earned
Business Administration deqree from Boise State
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University. In addition,
utility ratemaking course
Traininq for the ELectric
through New Mexico State
Util-ities.
I have attended the electric
PracticaL RegulatoryThe Basics:
' Industry, a
University's
course offered
Center for Public
10AU Please describe your work experience with
L9 Idaho Power.
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A. In 2012, I was hired as a Regulatory Analyst
in the Company's Regulatory Affairs Department. My primary
responsibil-ities incl-uded support of the Company's
Commercial- and Industrj-aI customer classes' rate design and
general support of tariff rufes and regulations. In 2075,
I assumed responsibilities associated with Residential and
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ASCHENBRENNER, D]
Idaho Power Company
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1 Smal-l General Service rate design, ds wel-l- as regulatory
2 acLritles associated with demand-sj-de management (*DSM") .
3 In 2016, I was promoted to a Senior Regulatory Analyst and
4 my responsi-bil-ities expanded to include the development of
5 complex cost-rel-ated studies. In 2011 , I was promoted to
6 my current position of Manager of Rate Design. I am
7 currently responsible for the management of the rate design
8 strategies of the Company as wel-l- as oversight of all
9 tariff administration.
10 O. What is the purpose of your testimony in this
11 case?
72 A. The purpose of my testimony is to present the
13 Company's request for a determination that $44,145,316 of
14 DSM expenses incurred for the acquisition of demand-side
15 resources in 20L1 were prudently incurred. This amount
16 includes $37,162,0021 funded in 2071 by the Idaho Energy
77 Efficiency Rider ("Rider") and $6,983,314 of demand
1B response
rates and
program incentive payments funded through base
the Power Cost79tracked annually through
/ \\ Daa // \\ rvrr /.20 Adjustment
1 Incl,uded in the $31,1,62,002 funded by the Rlder in 2011 is
$1,860, 901 of incremental- DSM labor expenses incurred between 2017 and
2016 which was deemed prudent under Order No. 33908 as part of Case No.
IPC-E-17-03. The 2017 DSM expenses funded by the Idaho Rj-der, excluding
the one-time coll-ection of prevj-ous1y incurred Iabor-rel-ated expenses,are $35,301,101.
ASCHENBRENNER, D]
Idaho Power Company
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1 The 20L7 Rider-funded DSM expenses for which Idaho
2 Power is seeking a prudence determination is an 11 percent
3 increase over the 201,6 Rider-funded DSM expenses2 reviewed
4 in last year's prudence case (Case No. IPC-E-17-03) . This
5 increase in expenses resulted in a 15 percent increase in
6 system-wide energy savings over 2076 energy savings when
7 considering Idaho Power's energy efficiency programs al-one.
I When the Northwest Energy Efficiency Alliance (*NEEA")
9 estimated savings are included, the 2011 energy savings
10 increase by 72 fercent over 2076 l-evel-s. The 20L'7 energy
11 savings represents the second largest annual incremental-
12 energy savings achievement since the establishment of the
13 ]daho Rider in 2002.
L4 My testimony wil-l- (1) provide a review of 2077 DSM
15 program performance, (2) dj-scuss 2071 DSM expenses and
16 adjustments, (3) provide an overview of cost-effectiveness,
L1 (4) review eval-uation efforts, (5) describe opportunities
18 for stakehol-der input, and (6) provide updates to the Idaho
19 Public Utllities Commission ("Commission") on compliance
20 with Order No. 33736 in Case No. IPC-E-16-33 and Order No.
21 33908 in Case No. IPC-E-17-03.
2 Excl-uded from the $37,327,862 funded by the Rider in 2016 was
$541 ,494 in incrementaf fabor expense for 2016, deemed prudent under Order
No. 33908 as part of Case No. IPC-E-17-03. Includlng the 201,6 incremental
fabor expense deemed prudent yields total 2016 DSM expenses funded by the
Idaho Rider of $31,869,356 for utilizatj-on j-n comparison with 2017 Rider-
funded DSM expenses.
ASCHENBRENNER, DI
Idaho Power Company
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I. 2OL7 DSM PROGRA!,I PEFG'ORMANCE
O. Pl-ease provide an overview of ldaho Power's
DSM efforts in 2011.
A.
energy savings
efficiency portfolio was
2.50 benefit /cosL ratio
In 20I'7, Idaho Power achieved \2 percent more
than in 2016. Idaho Power's energy
cost-effectj-ve, resulting in a
when evaluated from a Total
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Resource Cost ("TRC") test perspecti-ve, a 2.75 benefit/cost
ratio when eval-uated from a Utility Cost ("UC") test
perspective, and 3.67 benefit/cost ratio when evaluated
from a Participant Cost Test (*PCT") perspective.
ln 20L7, on a system-wide basis, Idaho Power offered
a portfolio of energy efficiency programs and demand
response programs avail-able to all customer segments,
participated in market transformatj-on efforts through NEEA,
and offered several educationaf and behavioral initiatlves
77 includlng 1j-qht emitting diode (*LED")tight bulbs, Energy-
and other activities.18 Savings Kits, the Smart-saver Pledge,
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of Idaho Power's 2011 DSM activities is provided
bel-ow.
ASCHENBRENNER, DI
Idaho Power Company
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Table 1. 2Ot7 DSM Programs by Sector, Operational T1pe,
Location, and Annualized Energy Savings/De'nand Reduction*
Program by Sector Operational Type State
Savings/Demand
Reduction
Residential
A/C Cool Credit
Easy Savings
Educational Distributions
Energy Efficient Lighting
Energy House Calls
Fridge and Freezer Recycling Program
Heating & Cooling Efficiency Program
Home Energy Audit
Home lmprovement Program
Multifamily Energy Savings Program
Oregon Residential Weatherization
Rebate Advantage
Residential New Construction Program
(ENERGY STAR@ Homes Northwest)
Shade Tree Project
Simple Steps, Smart Savings*
Weatherization Assistance for Qualified
Customers
Weatherization Solutions for Eligible Customers
Com mercial/l ndustrial
Commercial and lndustrial Efficiency Program
Custom Projects
New Construction
Retrofits
Flex Peak Program
Green Motors-l ndustrial
Oregon Commercial Audits
Irrigation
Green Motors-lrrigation
lrrigation Efficiency Rewards
lrrigation Peak Rewards
All Sectors
Northwest Energy Efficiency Alliance
Demand Response
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efflciency
Energy Efficiency
Energy Efficiency
Other Programs and
Activities
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Demand Response
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Demand Response
29 MW*
280 MWh
21,187 MWh
37,765 MWh
429 MWh
499 MWh
1,139 MWh
175 MWh
416 MWh
618 MWh
2 MWh
214 MWh
ID/OR
ID
ID/OR
ID/OR
ID/OR
ID/OR
ID/OR
ID
ID
ID/OR
OR
ID/OR
ID/OR
ID
ID/OR
ID/OR
ID
ID/OR
ID/OR
ID/OR
ID/OR
ID/OR
OR
ID/OR
ID/OR
ID/OR
608 MWh
nla
900 MWh
670 MWh
605 MWh
44,756 MWh
17,354 MWh
23,162 MWh
36 MW-
144 MWh
nla
64 MWh
16,824 MWh
318 MW*
Market Transformation lD/OR 23,652 MWh
3 *This value represents the realized, non-coincident load reduction from each program.
4 Tabl-e 1 il-l-ustrates the broad avail-ability of
5 programs offered by Idaho Power to its customers in energy
6 efficiency, demand response, and education. The Demand-
ASCHENBRENNER, DI
Idaho Power Company
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Sjde Management 2017 AnnuaL Report (*DSM 2077 Annua1
Report"), Attachment 1 to the Application filed in this
proceeding, provides detail-s for each program, including a
description of each program, 20L7 performance and
activities, cost-effectiveness, customer satisfaction, and
eval-uation resul-ts when applicable. In addition, the DSM
20!1 Annuaf Report provides a description of Idaho Power's
DSM strategies for 2018.
0. What l-evel- of incremental annual energy
efficiency savings was achieved in 2017?
A. On a system-wide basis, Idaho Power achieved
L97,471 megawatt-hours ("MWh") of j-ncremental annual energy
efficiency savings in 2077. This val-ue includes 761,8L9
MWh from Idaho Power's energy efficiency programs and an
estj-mated 23,652 MWh3 of energy efficiency market
transformation savj-ngs through NEEA initiatives. Chart 1
below shows the incremental annual energy efficiency
savings in MWh from 2002 to the current year. Al-so shown
in this chart are the total- energy efficiency expenses for
each year in mill- j-ons of dol-l-ars.
3 Because Idaho Power wil-l- not receive final- 201-7 savings from NEEA
until- May 2018, the NEEA-attributabfe savings 1s an estlmate provided to
Idaho Power by NEEA.
ASCHENBRENNER, D]
Idaho Power Company
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250,000
200,000
r Market Transformation (N EEA) (MWtt)
ldaho Power Program Savings (MV\rh)
-lf
expenses (no DR)
$4s
$,10
$3s
$30
$2s
$20
$15
$10
$s
$0
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50.000
03 2@2 2W3 2@4 2@5 2006 2007 2@8 2m,9 2010 2011 2012 2013 2014 2015 2016 2017
4 Note: 2017 NEEA market-transformation savings are estimated.
5 Q. To which program does the Company attribute
6 most of the increased energy savings in 2011?
1 A. Many of Idaho Power's programs saw an increase
8 in energy savings in 20L1; however, the residential- Energy
9 Efficient Lighting program experienced an increase over
10 20L6 savj-ngs by 79 percent. This program accounts for 23
11 percent of Idaho Power's 2077 energy efficiency program
72 savings in the aggregate. The program also experienced a
13 22 percent increase in participation tn 201,7 as compared to
L4 2016.
15 O. What measure constituted most of the energy
76 savj-ngs in this program?
I7 A. LED lights account for 98 percent of the
18 savings attributed to the Energy Efficient Lighting
ASCHENBRENNER, DI
Idaho Power Company
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Chart 1. Incremental. Annual Energy Efficiency Savings
(M[th) and Energ'y Efficiency E:q>enses ($ niJ.Iions) 2OO2-2OL7
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program. Deemed savings val-ues by the Regional Technical
commonly sol-d LED bul-bsForum ("RTF") for
within the program
the two most
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i-ncreased by approximately 18 and 31
further improved LED lightingpercent, respectively, which
energy savings in 2071.
O.Does the Company expect savings from lighting
measures to be sustainable over the long term?
A. No. Energy savings from lighting is projected
to decrease over the next two years until- 2020 as the 2020
Phase II code implementation approaches under the Energy
Independence and Security Act of 2007 (*EISA"). EISA Phase
II requires that most light bulbs be 60 to 10 percent more
effj-cient; thus, while the energy savings from energy
efficlent 1j-ghting will be real-ized in customer usage and
accounted for in the Company's foad forecast, it will no
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longer count towards
of lighting code in
savings assumptions
energy savings as it
If the preliminary
becomes part
2020 energy
2071 bulb
DSM
2020.
19 sales, energy savings from bulbs
applied to the
would decline by over 93
20 percent.
2\ O. What is fdaho Power doing to prepare for the
22 reduction in savings as the lighting code is updated to a
23 new standard?
24 A. To keep growth in the program portfolio, Idaho
25 Power relies on its Program Planning Group (*PPG") , NEEA's
ASCHENBRENNER, DI
Idaho Power Company
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1 Regional Emerging Technol-ogy Advisory Committee (*RETAC"),
2 Lhe Company's Energy Efficiency Advisory Group (*EEAG") ,
3 and E Source, a regional research organization, resources
4 to fill the pipeline with ideas for offerings or new
5 measures to include in the Company's existing energy
6 efficiency programs. Idaho Power also strives for
7 continuous program improvement to make it easier for its
I customers to participate in programs.
9 Additionally, in recent years, Idaho Power has
10 expanded its DSM portfol-io to include behavioral- and cohort
11 programs. Although cost-effective, these programs are
L2 generally more expensive to administer and market and often
13 have 1ower savings and shorter measure l-ives than
L4 traditional- DSM programs, resulting in a higher cost for
15 incremental- savings acquj-red by these programs.
L6 O. In 20L1, did Idaho Power meet the energy
tl efficiency targets included in its 2017 fntegrated Resource
18 Pl-an (*IRP")?
l-9 A. Yes. Chart 2 below shows the annua]
20 incremental energy efficiency savings compared with the IRP
2l targets for 2002 through 201,7 shown in average megawatt*
22 hours ("aMW").
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ASCHENBRENNER, DI
Idaho Power Company
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Chart 2. Annual IncrementaL Energ'y Efficiency Savings
(al{w) with IRP Targets (2002'2OL7l
-tlPC
SaMngs
-lftP
Targets
3 2@2 2fi3 2@4 2@5 2W6 2@7 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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 potential study to estimate
8 the amount of cost-effective achievable energy effi-ciency
9 to be included in the IRP for planni-ng purposes. Idaho
10 Power considers the achievabJ-e potential- as a reasonable
11 planning estimate but does not consider the achievabl-e
72 potential- as a ceiling that l-imits the acquisition of
13 energy efficj-ency; rather, the Company pursues all- cost-
1,4 effective energy efficiency.
15 Chart 3 bel-ow shows the cumulative energy efficj-ency
16 savings in aMW compared with the IRP targets for 2002
71 through 2011.
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ASCHENBRENNER, DI 1O
Idaho Power Company
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20
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Chart 3. Annua1 CumuJ.ative Energy Efficiency Savings (a!,lt{)
with IRP Targets (2OO2-2OL7\
rrlPC Savings olQP Targets
2002 2003 2W4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
O. What level of demand reduction capacity was
available from Idaho Power's demand response programs in
2011 ?
A. The total- avail-abl-e capacity of Idaho Power's
three demand response programs was approximately 394
megawatts ("MW"). The programs provided actual- demand
reduction of 383 MW during the 20L1 program season. This
value represents the maximum real-ized, non-coincident l-oad
reduction f rom all- three programs. Chart 4 bel-ow ref l-ects
the annua1 avail-able peak demand reduction capacity and
actua] load reductlon in MW since 2004 and the associated
annual- expenses j-n mil-l-ions of doll-ars.
2fi
2@
150
100
50
t
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ASCHENBRENNER, DI
Idaho Power Company
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Chart 4. Peak Denrand Reduction Capacity (MIf) and Demand
Response E:<trrenses ($ nilJ.ions) 2OO4-2OL1
oc.9
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toall,co
Eoo5Goo.
500
450
400
350
300
250
200
150
100
50
0
Available capacity
rActual load reduction
-Ps63nd
response expenses
$25.00
$20.00
$15.00
$10.00
$s.00
$0.00
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
II. 2OL7 DSM EXPENSES A}ID ADWSTT{ENTS
O. What is Idaho Power's focus when evaluating
the acquisition of DSM resources?
A. Idaho Power takes its responsibility of
prudently managj-ng customer funds serj-ously and the Company
bel-ieves it is important to get the maximum value for its
customers. The Company's actions in 20\1, and the content
of the DSM 2017 Annual Report, provide evidence supporting
the conscientlous work Idaho Power employees and leaders
made toward using customers' funds wisely to support DSM
activities.
O. What amount of DSM expenses is the Company
requesting the Commissj-on find were prudently incurred?
ASCHENBRENNER, DI L2
Idaho Power Company
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response,
education
In the delivery of energy efficiency, demand
and market transformation programs, ds
Idaho Power
well as
and administrative costs,expended
$37,162,002 of Rider funds and $6,983,314 of demand
response
spent on
program incentives, for a total of $44,L45,376
demand-side resource acquisition in 2071.
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Idaho Power requests that the 2011 Rider-funded DSM
expenses, and the 2077 demand response program incentives
recovered through base raLes and the PCA, be reviewed
together for a prudence determination. With this filing,
Idaho Power requests the Commissj-on issue an order finding
that these funds were prudently incurred. Exhibit No. 1 to
my testimony, 201-7 ldaho DSM Expenses and Adjustments for
Prudence FiTing, shows a breakout of these expenses by
program, customer sector, and funding source.
O. Pl-ease compare the dol-lar amounts in Exhibit
No. 1 with Appendix 2, 2077 DSM expenses by funding source
(dol-l-ars) , of the DSM 2017 Annual- Report.
A. For clarity and ease of understanding, Exhibit
No. 1 ties to Appendix 2, which is found on page 170 of the
DSM 2017 Annual- Report. The first co1umn of Appendix 2
label-ed "Idaho Rider" and the first column of Exhibit No. 1
Iabeled "Rider Expenses" match at the row label-ed "Total-
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24 Expenses" in Exhibit No. 1 and "Grand Total" 1n Appendix 2
25 in the amount of $37,086,084. AII va]ues in Exhibit No. 1
ASCHENBRENNER, D] 13
Idaho Power Company
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represent DSM expenses for the Idaho service area on1y.
Six accounting adjustments to this total- were needed to
accurately arrive at the total- 2077 expenses for purposes
of the prudence determinatj,on. To ald in explaining the
adjustments, in my Exhibit No. l, I have added a section at
the bottom of the tabl-e titled *Adjustments."
O. Please
adj ustments inc1uded
determination.
describe the prlor year-end accounting
in Exhibit No. 1 for the 2011 prudence
A. There were five accounting adjustments
incl-uded in the 20L6 DSM prudence request that are incl-uded
as reversing adjustments for 2017. These are shown in
Exhibit No. 1. Descriptions of the adjustments are as
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15 o A reduction of $56,571 related
1,6 Weatherization Sol-utions for Eligible Customers
77 In 2076, this amount was charged to the Oregon
18 Efficiency Rider but shoul-d have
Rider. The adjustment was made79 durlng 2071; however, the
20 Commission already issued
amount in Order No. 33908.
from the 20L1 expenses to
amount.
a prudence determination on this
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to the
program.
Energy
to the Idahobeen recorded
The amount has been removed
avoid double counting of this
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24 a An increase of $22,022 related to the
25 Fridge and Ereezer Recycling Program. In 201,6, thj-s amount
ASCHENBRENNER, DI
Idaho Power Company
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was charged twice to the program's Rider expenses, but
should have only been charged once. The adjustment was
made during 2017; however, this amount must be added back
to the Rider to avoid understating the program's 2071
expenses.
o An increase of $4,266 rel-ated to the
Residential-Energy
amount
Efficiency Education Initiative. In
2076, this was charged to the Rider but should have
been charged
expense. The
to non-Rider operations and maintenance
adjustment was made durlng 2071; however,
11 this amount must be added back to the Rider to avoid
L2 understating the initiative's 207'l expenses.
13 o An increase of $16,705 for vehlcl-e expense
14 incorrectly charged to Commercial/Industrial Overheads. In
15 20L6, a vehicle charge was incorrectly calcul-ated and was
L6 overstated by $16,705. The adjustment was made during
L7 20L1 1 however, this amount must be added back to the Rider
18 to avoid understating the 2071 expenses.
79 o An increase of $192 related to Rotary Cl-ub
dues. The Company had
in 2016; however, after
20 and Boise Metro Chamber of Commerce
2t
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charged these expenses to
receiving Commission Order
adj ustment in 201,1 . Thi s
the Company made an
be added back to the
Rlder expenses.
ASCHENBRENNER, DI 15
Idaho Power Company
the Rider
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No. 33908,
amount must
24 Rider to avoid understating the 2017
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reversing
order toexpenses
i-ncurred
O
entries ?
A
The
l_n
entries are included in the 20L'l DSM
accurately represent
2077 DSM efforts.
the amount
related to
$89,304 of
operations
Were there any current-year accounting
Yes. During 2011, the Company classlfied
Rider-funded fabor to non-Rider funded
and maintenance (*O&M") . The initial-
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cl-assification was based on an i-ncorrect determination that
the 20!7 Rlder-funded labor had exceeded the 2 percent
annual l-abor cost growth cap (authorized by the Commission
in Order No. 33908). Upon preparation of this filing,
Idaho Power determined the total amount of Rider-funded
l-abor in 2017 was in fact below the 2 percent annual labor
cap. Thus, the Company made an accounting adjustment in
2018 to reverse the $89,304 that had been initially
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18 adjustment is llsted on Exhj-bit No. 1 under the Adjustments
19 section as '2017 Labor Correction. " The quantification of
20 the 20L1 aflowed Rider-funded labor expense is described in
27 Section VI.
22 o What was the year-end 2011 bal-ance of the
23 Rider?
24 A The Rider account balance at December 31,
25 2071, was a positive $407,603. Table 2 below shows the
ASCHENBRENNER, DI 76
Idaho Power Company
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January 2071 beginning balance; the
items, expenses, transfers; and the
December 31, 2071.
funding and interest
ending ba1ance as of
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Tab].e 2 Idaho Energ'y Efficiency Rider
( January-Deceml.er 2OL7 |
ldaho Energy Efficiency Rider
2017 Beginning Balance
2017 Funding plus Accrued lnterest as ol 12-31-17
Total2O17 Funds
2017 Eryenses as of 12-31-'17
Rider Transfer to PCA (IPUC Order 33736)
Endinq Balance as of 12-31-2017
$10,730,151
39,763,536
50,493,687
(37,086,084)
(13,000,000)
$407,603
rTI. 2OL7 COST-EFFECTIVENESS O\ZERVIEW
O. What is ldaho Power's overall goal when it
comes to DSM cost-effectiveness tests?
A. Prior to the actual implementation of energy
efficlency or demand response programs, Idaho Power
performs a preliminary cost-effectiveness analysis to
assess whether a potential program desj-gn or measure will
be cost-effective from the perspective of Idaho Power and
its customers. Idaho Power's goal i-s to have a1J- programs
achieve benefit/cost ratios of 1.0 or greater for the TRC
test, the UC test, and the PCT at the program and measure
level- where appropriate. Idaho Power reviews the cost-
effectiveness results for each program and measure on an
annual basis to determine whether the program should
continue or be modified in some way to ensure it remains
22 cost-effective on an ongoing basis. If a measure or
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Idaho Power Company
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program j-s found to not be cost-effective from each of the
with the EEAG to get inputthree tests, Idaho Power works
before making its determination
discontinuing an offering. If
on continuing
the measure or program found
the threeto not be cost-effective from one or more of
tests is indeed offered, the Company wil-l- explain why the
measure or program was implemented or continued when it
seeks a prudence determj-natj-on for the incentives and
expenses associated with that program. The Company
befieves this approach aligns with past Commission orders.
O. Generally, what perspective does each test
recognize the program or measure benefits and costs from?
A. Tabl-e 3 briefly describes what benefits and
costs are incl-uded j-n each respective ratio.
Table 3. Benefit/Cost Ratios Defined
or
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Total Resource Cost Test (TRC)
Benefits and costs from the
perspective of al-I utility
customers (participants and
non-participants ) j-n theutility service area.
Utility Cost Test (UCT)
Benefits and costs
the perspective ofutility.
only from
the
Participant Cost Test (PCT)
Benefits and costs from the
perspective of the averageparticipating customer
instal-l-ing the measure.
76 The cost-effectiveness test methodologies and
71 assumptions are described in more detail in the flrst pages
1B of Supplement 1: Cost-Ef fecti\,/eness ("Supplement 7") ,
ASCHENBRENNER, DI 1B
Idaho Power Company
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included in Attachment 1 to the Application in this
proceeding.
O.
test.
A.
important and
other. That
Please describe how Idaho Power weighs each
The Company believes al-l the tests are
shoul-d be considered in relation to each
is, a review of each test allows for an
10
economic assessment of the life-cycle costs and benefits of
a DSM investment from the perspective of Idaho Power, DSM
program participants, and non-participating customers. For
example, while the UC test j-ncl-udes a review of the costs
and benefits related to a program or measure flowing to the
uti-lity, the TRC ratio considers the lmpact to all the
utility's customers, including those participating in a
measure or program. Considering both of these tests gives
Idaho Power the ability to conduct a fair comparison
between demand-side resources and supply-side resources.
The third test, the PCT ratio, informs Idaho Power as to
whether a program or measure j-s cost-effectj-ve from the
participating customer's perspective; that is, whether the
instal-led measure will pay back over its lifetime. In
other words, the PCT provides an indication of how
economically attractive a program or measure may be to a
prospective participant .
ASCHENBRENNER, DI 79
Idaho Power Company
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It is through the review and consideration of each
of these economic tests that the Company, and the
Commission, can be assured that each party involved in a
DSM transaction is not being asked to fund an investment
that is not cost-effectlve.
O. Has the Commission supported the use of all
three test in the past?
A. Yes. Idaho Power believes its application of
the three economic tests is consistent with the
We thus flnd it reasonable for the
Company to continue screeningpotential programs usJ-ng each test as
a guideline, and to advj-se us on how
the Company's programs fare under
each test. When the Company
ultlmately seeks to recover its
prudent investment in such programs,
howeverr we be1ieve the Company may(but need not exclusively) emphasize
the UCT-and that test's focus onCompany-controlled benefits and
costs-to argue whether the programs
were cost-effective. As always, the
Company ultimateJ-y must persuade us
that its program investments wereprudent under the totality of the
circumstances.
Because Idaho Power must ultimately demonstrate to
the Commj-ssion that its program investments were prudent
under "the totality of the circumstancesr " the Company
ASCHENBRENNER, D] 20
Idaho Power Company
10 Commission's directive, as descrj-bed in Order No. 33365 at
11 9-10:
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remains comrnitted to evafuating program performance under
al-l- three metrics.
A. 2OL7 Cost-Effectiveness Results.
O. Have any key inputs in determining cost-
effectiveness changed for the 20t1 program year as compared
to the 2016 program year?
A. Yes. Assumptions used to quantify the
benefits associated with energy savings have been updated.
fn measuring cost-effectiveness for the 201,7 program year,
the Company used the 20L5 fRP's DSM Alternate Costs, which
11 declined from the 2013 IRP's DSM Alternate Costs that were
L2 used in determining 20L6
shows the DSM Al-ternate13 Costs from the 20LL, 20L3, and 2015
74 IRPs. The continued decline in the 2075 IRP's DSM
15 Alternate Costs reduces the value of future energy savings
from DSM measures, whi-ch impacts the overall cost-
effectiveness of the programs within the portfol-io.
Chart 5. DSM AJ.ternative Costs Assumptions
2OLL, 2OL3, and 2015
so.200
t6
t1
so. r80
so. 160
so. r40
so. I 20
5().1m
So.o80
90.o60
so.orto
so.o20
so.ooo
10
18
19
3
oUo
Co
=oa.cEoz
cost-effectiveness. Chart 5 below
ASCHENBRENNER, DI 2T
Idaho Power Company
20 -2011 -2013 -2015
l- Q. What were the results of the 2077 cost-
2 effectj-veness analyses?
3 A. Exhibit No. 2 to my testimony, 20L7 Cost-
4 Effectiveness Summary by Proqram, Sector, and Portfolio,
5 shows the resul-ts of the TRC test, UC test, and PCT for
6 every energy efficiency program, aggregated by sector and
7 for the portfolio. As shown in Tabl-e 4 be1ow, all tests
8 achieved benefit/cost ratios over 1.0 by such sector and
9 portfol-io. These resul-ts are al-so included in Exhibit No.
10 2.
11 Table 4. 2OL1 Benefit/Cost Table (by Sector & Portfo].io)
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On an
ref l-ect that,
benefits, 17
in Idaho for
effectiveness
both the TRC
that do not have
\\N/A/' on Exhibit
are in Supplement
individual- program basis, these results
using 20L7 DSM program year costs and
of the 16 energy efficiency programs offered
which the Company calculates cost-
had benefit/cost ratios greater than 1.0 for
and UC tests.
The PCT ratios are not calculated for those programs
these are shown asa direct customer cost;
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20 No. 2. The detall-s of these cal-cul-ations
1 of the DSM 2017 Annual Report.
ASCHENBRENNER, D] 22
Idaho Power Company
Sector
Tota1
Resource Cost
(TRC) Test
Uti1ity Cost
(UC) Test
Participant
Cost Test
(PCr)
Residenti-al-3.64 2.69 1 .18
Comme rcia I / I ndus t rl a l-1.81 3.42 1.87
I rrigation 3. 6s 4 .18 3.33
Portfolio 2.s0 2.15 3.67
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The following five programs did not pass at l-east
one of the tests
o The Weatherization Assistance for Qualified
Customers ("WAQC") and Weatherization Solutions for
Eligible Customers ("Solutj-ons") programs had benefit/cost
ratios less than 1.0 for both the TRC test and UC test;
o Eridge and Freezer Recycling Program had a
benefit/cost ratio of less than 1.0 for the UC test but
greater than 1.0 for the TRC test;
10 o Heating & Cooling Efficiency Program had a
11 benefit/cost ratio of greater than 1.0 for UC test and PCT,
72 but l-ess than 1.0 for TRC test; and
13 o Home Improvement Program had a benefit cost
74 ratj-o of greater than 1.0 for UC test, but less than 1.0
15 for TRC test and PCT.
16 O. Did Idaho Power calcul-ate cost-effectiveness
77 for each measure within each energy efficiency program it
1B offers?
1,9 A. Yes. In 2077, fdaho Power evaluated the
20 benefits and costs of 268 measures from both the TRC and
2! the UC perspective. The resul-ts of these calculations
22 along with measure assumption detail-s and source
23 documentation can be found in Supplement l- to the DSM 2017
24 Annual- Report.
25
ASCHENBRENNER, DI 23
Idaho Power Company
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O How dld ldaho Power address any individuaf
measures that are not cost-effective based on one or more
tests ?
A The cost and benefit val-ues used in the
various analyses are based on markets,technol-ogies,
cost estimates,economic inputs, savings estimates,
which can change over time. When a
and
measure is determined
not to be cost-effective at a specific point in time, Idaho
the inputs used in the
and then determines if
Power first evaluates whether
10 cal-culations are stiII correct
11 measure parameters should be modified or whether the
measure should be eliminated. The measures that are nott2
13 cost-effective from a TRC or UC test perspective wil-l-
additional- non-energy74 either be discontinued, analyzed for
15 beneflts, modified to increase potential per unit savings,
the specific16 or monitored to examine their impact on
l1 program's overall cost-effectiveness. For additlonaf
18 detall on measure analysis refer to Supplement 1 to the DSM
79 2011 Annual Report.
ZU U Does Idaho Power consider cost-effectiveness
27 for its three demand response programs?
22 A Yes. However, benefit/cost ratios are not
23 ca]culated for the three demand response programs.
determine the cost-24 Instead, the methodology used to
25 effectiveness of the demand response programs compares the
ASCHENBRENNER, DI 24
Idaho Power Company
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annual- cost of operating Idaho Power's demand response
portfolio to the levelized annual- cost of a 170 MW deferred
resource over a 2O-year l-ife.a In 20!1, the system-wide
cost of operating the three demand response programs was
approximately $8.8 million ($7.4 mil-l-ion of incentives and
$1.4 mil-l-ion of other costs). The amounts attributable to
10 for the full- 60 hours aIIowed, the
other costs) . Idaho
programs were dispatched
total- costs woul-d have
approximately
the 2071 IRP,
$11.1 mi1lion on a system-wide basis.
the maximum annual cost of running all
demand response programs for the maximum allowable
of 60 hours should be no more than $19.8 million,
is an increase of approxi-mately $1.3 million from the
the Idaho-on1y jurisdiction were
of incentives and $1.3 m1l1ion of
Power estimated that if the three
$8.3 million ($7.0 mill-ion
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been
Using
three
hours
which
t6 maximum val-ue of $18.5 million calculated from the 2075
L] IRP.
18 B. I{AQC and Solutions Programs
19 O. What were the cost-effectiveness resul-ts for
20 the WAQC and Solutions programs?
2L A. As shown in Exhibit No. 2, the WAQC and
22 Solutions programs, both of which are offered to l-imited-
23 income customers, did not achieve the l-.0 benefit/cost
a Demand response valuation methodology concfuded by settl-ement
agreement as approved in Commission Order No. 32923 as part of Case No.
rPC-E-13-14.
ASCHENBRENNER, DI 25
Idaho Power Company
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1 ratio threshol-d in 20L1 under the TRC and UC tests. The
PCT is not calculated for these programs because the
programs impose no direct costs on the participants.
program continue to not beO. Why does
cost-effective and how
ir?
the WAQC
does ldaho Power attempt to improve
A. The WAQC program provides real- and substantial-
per home savings, but due to the costs of comprehensive
whole-house weatherization, 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 Weatherization Assistance Program
(*WAP") guidelines and are offered at no charge to the
participant. This program is designed for l-imited-income
customers and Idaho Power believes there are other benefits
to this program that are difficult to quantify, such as
health and safety measures.
This program is offered in coordination with the
state WAP under U.S. Department of Energy guidelines;
changes to this program must be made by the state WAP.
Idaho Power continues to work with its
weatherization managers, stakeholders, and vendors to
streamline operations and adjust offerings to make this
program more cost-effective.
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ASCHENBRENNER, DI 26
fdaho Power Company
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The WAQC program's cost-effectiveness decreased 1n
20L1 compared to 2076 results.
to the incl-usion of lower DSM
The decrease is largely due
a1ternative costs coupled
with the results of
of the savings for
updated l-oad shapes that attribute most
the program to non-suflrmer months.
does the Solutlons program continue to not
Power attempt to
O. why
be cost-effective
improve it?
and how does ldaho
10
A. Similar to the WAQC program, the Solutions
program provides real and substantial- per-home savings, but
due to the costs of comprehensive whole-house
weatherization, it i-s difficult for the val-ue of the
savings to outweigh the costs. Like the WAQC program, the
Solutions program is offered to customers who may not have
the income to participate in other residential energy
efficiency programs. fdaho Power bel-ieves there are
unquantifiable non-energy benefits to program participants,
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18 such as increased safety and comfort. Idaho Power
79 continues to work with its program stakehol-ders and vendors
20 to streaml-ine operatj-ons and adjust offerings to make this
2l program more cost-effective. The Company has continued a
22 program introduced in 20L6 requiring 1andlords to fund at
23 l-east 10 percent of the project and for 20L1 the Company
24 held the average cost per home constant from the 2014 l-evel-
25 for the weatherization contractors, actions which helped to
ASCHENBRENNER, D] 21
Idaho Power Company
1 keep the cost of the program down. The Company continues
2 to support the whole-house philosophy by allowing a $6,000
3 annual- maximum average per-home cost. In 2071 , 794 homes
4 and two nonprofit buildings in Idaho were weatherized
5 through the program. In 2018, the Company will- expand
6 marketing for Sol-utions to regional publications,
7 especially those with a focus on seniors and l-ow-income
8 individuals. The Company wil-l- al-so consider the addition
9 of social media channels to target specific regions to
10 maintain program awareness.
11 0.Does Idaho Power plan to contj-nue to offer the
L2 WAQC and Sol-utions programs 1n the future?
13 A. Yes. While the Company has identified that
74 the programs are stil-l not cost-effective under the TRC or
15 UCT tests, unless the Commission directs otherwise, Idaho
16 Power wil-1 continue its efforts to improve the cost-
l7 effectiveness of these programs while at the same time
18 offering them to the Company's l-imited-income customers on
19 an ongoing basis.
20 C. Fridge and Free4qr Recycling ProgEt!!.
2t
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0. Pl-ease provide an overview of the Fridge and
Freezer Recycling Program.
A. Started in 2009, the program achieved energy
savings by removing and recyclj-ng qualified refrigerator
and stand-al-one freezer units from residential homes. fn
ASCHENBRENNER, DI 28
Idaho Power Company
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20L1, the program was identified to no longer be cost-
effective due to a lower participation rate and the mix of
recycled appliances, including fewer older appliances that
generate higher savings. The Company worked closely with
the EEAG to develop a plan to end the program, which
included notifying customers in advance of the December 31,
20L7, end date.
O. What were the cost-effectiveness results for
10
the Fridge and Freezer
A. As shown
11 benefit/cost ratio of
13
24
Recycling Program in
in Exhibit No. 2, the
0.50 under the UC test
20!1 ?
program had a
and 7.74 for
12 the TRC test.
74
O. At the August 20!1 EEAG meeting, fdaho Power
projected UC and TRC woul-d be less than 1.0 for the year.
What caused the TRC ratio to be greater than 1.0 in 20L'l?
A. The program's hlgher than anticipated TRC test
for 20L1 was largely due to the Company's increased efforts
toward the end of 2011 to increase the program's
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there were 899
207'7, and December 31,
20 2071). In that time,enrol-Iments, which
2l accounted for 44 percent of participation. Those units
recycled in the second hal-f of 2011 incl-uded a greater
percentage mix of older appliances than the Company's
recent experiences, resulting in an improved final year TRC
ratio as savings are greatest from ol-der appliances.
22
Z5
ASCHENBRENNER, DI 29
Idaho Power Company
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Idaho Power
RTE and anticipates
effective in future
has reviewed updated savings from the
a similar program woul-d not be cost-
years.
10
D. Heating & CooJ-ing Efficiency Program.
O. What were the cost-effectiveness resufts for
the Heating & Cooling Efficiency Program in 2011?
A. The Heating & Cooling Efficiency Program had a
benefit/cosL ratio of 1.48 under the UC test, 0.85 for the
TRC test, and L.47 for the PCT.
O. Has Idaho Power worked with the EEAG to
11 address the cost-effectiveness of the program?
12 A. Yes. Beglnning Ln 20L6, Idaho Power has
13 worked wlth the EEAG to identify ways to improve the
L4 program's overall- cost-effectiveness. Some of the ideas
15 considered have included re-assigning non-program Iabor,
76 reducing marketing spend whil-e improving other tactics, and
1,7 reducing the stipend to participatlng contractors.
18 Effective January L, 20L8, the program has reduced the
19 contractor stipend from $150 to $50 and has added heat pump
20 water heaters to the offerings. The inclusion of the heat
2l pump water heater may increase the potential energy savings
22 in the program without significantly increasing
23 administrative costs, which may improve the program's
24 overall- cost-effectiveness.
25
ASCHENBRENNER, DI 3O
Idaho Power Company
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O. Does the Company plan to continue offering the
Heating & Cool-ing Efficlency Program?
A. Yes. In evaluating whether to continue
offering an existing program, the Company considers all
three cost-effectiveness tests, ds wel-l- as other factors.
Whil-e this program does not pass the TRC test, when
considering the recent changes implemented in the program,
the Company be1ieves it is reasonabl-e that the cost-
effectiveness, from the perspective of the TRC, will
improve during 2018. Retaining measures which have high
energy savings can potentially increase program savings and
spread the fixed adminlstrative costs. With a TRC test of
0.85, additional non-energy benefits would further improve
the program' s overal-l- cost-ef f ectiveness. The Company
plans to continue to monitor
EEAG to seek opportunities to
cost-effectiveness.
this program and work with the
improve the program's overal-f
18 E. Home Improvement Progr€rm.
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a. What were the cost-effectiveness results for
the Home Improvement Program in 2077?
A. The Home Improvement Program had a
benefit/cost ratlo of 2.54 under the UC test, 0.41 for the
TRC test, and 0.70 for the PCT.
O. Did the Company discontinue the program in
ASCHENBRENNER, D] 31
Idaho Power Company
25 2071?
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A. Yes. As explained in Case No. IPC-E-11-03,
the program was discontinued on June 30, 201,1. After two
consecutive years with a benefit/cost ratio below 1.0 for
both the TRC test and PCT, the continued decl-ine in DSM
al-ternative costs resufted 1n 207'l projected cost-
effectiveness to decline further below 1.0 for those tests,
despite the measures 4S-year life. Erom a magnitude
perspective, the program comprlsed approximately 1 percent
of the residential sector's performance and l-ess than 0.5
percent of the total portfolio savings.
a. How did the Company communj-cate the closure of
the program to its customers?
A The Company discontinued the Home Improvement
from theJune 30, 2011. Customers had
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Program on
day the job was started to submit their
90 days
i-ncentive
16 appllcations and those customers whose j obs were started on
71 or before June 30, 20L1,
1B Participating contractors
19 direct mail April through
20 closure of the program.
with a notification the27 program was being discontinued and
22 the Customer Service Center was al-so aware of these
23 details. The Company processed
j-ncentives after the April 2017
qualified for an incentive.
were notified by e-mail- and
June of 2077 of the impending
The Company website was updated
251 applications for
announcement, and did
ASCHENBRENNER, DI 32
fdaho Power Company
25
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3
4
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8
Y
not receive any additional- applications after the program
ended.
IV. EVALUATION ACTIVITY OVERVIE}T
10
O. What is the Company's approach to DSM program
eval-uation?
A. To ensure the ongoing cost-effectiveness of
programs through validation of energy savings and demand
reduction, and to guide the efficient management of its
programs, the Company rel-ies on evaluations by third-party
contractors chosen through a competitive bidding process.
Idaho Power uses industry-standard protocols, internal-
analyses, and regional and national- studies to j-nform its
lnternal and external evaluati-on efforts. Process and
impact evaluations are typically conducted on a three- or
four-year cycle for each program; however, the tlming of
specific program eval-uations is based on considerations
regarding program needs . SuppTement 2: EvaLuations
("Supplement 2") to the DSM 2017 Annual Report provj-des
additional- j-nformation regarding how ldaho Power eval-uates
its programs.
O. How does fdaho Power utilize the evaluations
described above?
A. Idaho Power uses the resul-ts of its
evaluatlons to inform decisions related to program
i-mprovement, to compare processes to industry best
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Idaho Power Company
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practices, and to
savings.
O. What
benchmark and validate reported program
evafuation activities took place in 2071?
the annual- cost-effectivenessAIn addition to
analyses that the Company conducts for each program, in
2071, the Company contracted
and process eval-uation on the
Program, an i-mpact evaluation
Weatherization Assistance
to perform impact
Cooling Efficiency
with DNV GL
Heating
of the Home Energy Audlt
the Commercial andprogram, and a process eva.l-uation of
Industrlal Energy Efficiency Program. Idaho Power
conducted internal- impact analyses on the A/C Cool- Credit,
Irrigation Peak Rewards, and Fl-ex Peak demand response
programs.
The DNV GL process and impact evaluation on the
Heating & Cooling Efficiency Program indicated that the
program is wel-l- operated. The total reported savings for
the program were 1,113,514 kj-lowatt-hours (*kWh"). The
total verifj-ed savings are 1,126,591, kV{h, for a realization
rate of 1.01.
Idaho Power al-so adminlstered surveys on severaf
programs in 2071 to measure program satisfaction.
Participant surveys were conducted for the Drying Rack
Proj ect,
pledge,
Home Energy Audit, Shade
ASCHENBRENNER, DI 34
Idaho Power Company
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Tree Project, Smart-saver
for Qualified Customers,
EIigibJ-e Customers.25 and Weatherization Solutions for
1 The Company decided to postpone the market
2 saturatj-on analysis of the Energy House Cal-l-s program
3 because 20L7 participation remained steady. The Company
4 also postponed the billing analysis for the WAQC and
5 Solutions programs until 2018. This analysis will be based
5 on 20L5 and 201-6 projects to provide a sufficient sample
'7 size to differentiate savi-ngs between weatherizatj-on
I projects with and without heating system replacement.
9 The final- reports for these eval-uations and studies,
10 surveys, and the market effects eval-uations conducted by
11 NEEA are included in Supplement 2 Lo the DSM 2017 Annual-
72 Report.
13 O. Does Idaho Power have a DSM program evaluation
L4 plan for 20lB?
1-5 A. Yes. Exhibit No. 3, Customer Rel.a tions and
1,6 Energy Efficiency 2013-2018 Program EvaLuation Pl-an, is
77 attached, and is al-so incl-uded in Supplement 2 to the DSM
18 2011 Annual Report. In 2078, Idaho Power's evaluation plan
79 includes third-party combination impact and process
20 evaluation for the Multifamily Energy Savings Program, a
27 savings analysis for the Shade Tree Project, and an impact
22 evaluation of the custom portion of the Commercial- and
23 Industrial- Energy Efficiency Program. This plan is
24 intended to be used as a guide and may change based on
25 need, timing, or other factors.
ASCHENBRENNER, DI 35
Idaho Power Company
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V. STAIGHOLDER INPUT
11
O. What is the EEAG?
A. In 2002, Idaho Power formed the EEAG to
provide input on enhancj-ng existing DSM programs,
recommending new energy efficiency measures, and
implementing energy efficiency programs. Members incl-ude
customer representatives from residential, irrigation,
commercial, and industrial sectors, and technical experts,
as wel-1 as representatives for l-imited-j-ncome individuals,
environmental organizatj-ons, state agencies, the
Commlssion, the PubIic Utility Commission of Oregon, and
72 Idaho Power.
74
O. What is the structure of EEAG meetings?
A. During EEAG meetings, Idaho Power dj-scusses
new energy efficiency program ideas and new measure
proposals, marketing methods, and specific measure detail-s
including cost-effectiveness; provides the status of energy
efficiency expenses and the Idaho and Oregon Rider fundlng;
gives updates of ongoing programs and projects; and
supplies general information on DSM issues and other
important issues occurring in the regj-on. The Company
invites experts to speak on eval-uations, research, and
other topics of interest.
O. Did Idaho Power solicit guidance from the EEAG
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ASCHENBRENNER, DI 36
Idaho Power Company
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25 during the 2011 program year?
1 A. Yes. In 2011, the Company hel-d four in-person
2 EEAG meetings. During these meetings, Idaho Power
3 discussed and requested recommendations on a broad range of
4 DSM issues and requested feedback on new program ideas and
5 new measure proposals, marketing methods, and specific
6 measure detail-s.
'l As explained in greater detail- in the DSM 2017
8 Annual- Report, Idaho Power worked with the EEAG on several
9 topJ-cs, incl-uding development, design, promotion, or input
10 on the following:
11 o Commercial Energy-Savi-ngs Kits. Designed
t2 energy savings kits specific to
retail, and office kits) .
o Heat Pump Water
business type (restaurant,
13
74 Promotional
to pJ-ace on
at time of
15 clings lncluded in the Energy-Savings Kits
16 existing water heaters reminding customers
11 repJ-acement of the heat pump water heater option.
1B o Thermostati-c Shower Valves ("TSVs") .
Heaters.
1,9 2076, the Company distributed TSVs to EEAG members,
20 to their support of the TSVs in Energy-Savings Kits
2L 20L7.
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In
leading
for
a Eridge and Freezer Recycling. The EEAG
supported an end-of-year program discontinuation to al-l-ow
sufficient time for customer notification and time to
ASCHENBRENNER, DI 37
Idaho Power Company
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. Smart Saver Pledge. Updated pledge month
to October to coincide with Energy Awareness Month.
o Energy Ef f iciency Guj-de.Targeted first-
time home buyer market with winter issue.
O. Did the Company solicit any guidance from the
EEAG during the February 2078 meeting concerning program
activities for the upcoming year?
A. Yes. Idaho Power discussed with the EEAG that
the A/C Cool- Credit program has a small number of cycling
switches that are not consj-stently communicating through
the Company's Power Line Carrier (*PLC") system. Out of
over 28,000 participants, the Company estimates less than 1
percent are non-communicating switches. Idaho Power
brought the topic up at the February EEAG meeting and
committed to foll-owing up at the May meeting, prior to the
201,8 program season, with a plan to address the non-
communicatlng switches .
O. Pl-ease describe the Company's thoughts for
2018 EEAG discussion.
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20 based on the February
Prlor to the May 2078A
25 May 2078 EEAG meeting, the Company plans
Company will investigate the causes
and explore the possibility to test
in addition to testing in its meter
EEAG meeting, the
of non-communication
switches in the field
test facility. At the
to share its
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preferred plan for the 201.8 program season and solj-cit
feedback on that plan prior to implementation. That plan
will balance the Company's desire to retain the
participation in the A/C Cool- Credit program with ensuring
demand reductj-on is achieved in exchange for incentives
paid to program participants.
VI. COMPLIAI{CE WITH COMMISSION ORDERS ISSUED IN 2017
A. ORDER NO. 33736.
a. On page 5 of Order No. 33736 in Case No.
IPC-E-16-33, the Commission directed Idaho Power to (1)
reduce the Energy Efficiency Rider percentage from 4.00
percent to 3.75 percent, effective April 1, 20L7; (2)
refund $13 mill-ion of previously collected Rider funds with
the 20L1 /2018 PCA mechanism, effective June 7, 20L7; and
(3) el-iminate the annual- transfer of $a million of Rider
funds through the PCA. Did the Company comply with that
directive?
A. Yes. Taking each directive in turn, (1) a
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decrease in the
to 3.75 percent
April 7, 20L1;
22 Efficiency
previously
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Rider collection percentage from 4 percent
of base rate revenues went into effect on
(2) as outlined on Appendix 7, Idaho Energy
201,7) , $13 million ofRider (January-December
collected Rider funds were transferred to the
PCA; and (3) the annual transfer of $a mi]lion of
the PCA was el-i-minated.
ASCHENBRENNER, DI 39
Idaho Power Company
25 Rlder funds through
1 B. Order No. 33908.
1. DSM Labor Elqpe4Ee.
O. In Case No. IPC-E-L1-03, did the Commission
issue a prudence determination on past Rider-funded Iabor
expenses associated with DSM activities?
Yes. As part of its Application in Case No.
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A.
IPC-E_L1 _03,
$1,860,907 1n
the Company sought a prudence determination on
i-ncremental Rider-funded l-abor expenses above
20tt and 2016.the 201,0 baseline that
In Order No. 33908, the
appropriate to deem the
expenses of $1,860,901
were incurred between
10 Commission found it reasonable and
11 Company's incremental DSM l-abor
from 20II through 2016 as prudent.72
13 Order No. 32953 at 6.
14 O. Did the Commission provide guj-dance on how the
15 Company shoul-d account for future Rider-funded employee
1,6 Iabor increases?
t7 A. Yes. On page 6 of Order No. 33908, the
18 Commission found it reasonable to include actual- wage
L9 increases up to an annuaf 2 percent cap. The Commissj-on
20 also indicated that DSM-related labor woul-d no longer be
27 examj-ned in DSM cases, rather the base amount and annual
22 cap would be reset in general rate cases.
23 O. Did the 2011 Rider-funded labor expense exceed
24 the 2 percent cap?
25 A. No.
ASCHENBRENNER, DI 40
Idaho Power Company
1 Q. Please describe the methodology used to
2 determine the allowed 2011 Rider-funded labor expense.
3 A. As shown in Table 5, the Company used the same
4 methodology previously adopted by the Commission in prior
5 cases,s but reset the base year to 20L6. The Company first
6 established the 2076 number of fu]l--time equivalent
7 employees ("FTE" or "FTEs") (shown in column 2) 6 and then
8 determined the 20\6 Basel-ine $/rrg of $122,150 by dividing
9 col-umn 1 by col-umn 2. Next, the Company capped the allowed
10 increase per FTE at the Commission-authorized 2 percent to
11 establ-ish the 2071 al-Iowed labor per FTE of $724,593
72 (column 4). The Company compared actual 20L1 l-abor expense
13 of $3,296,'104 (column 1) to the cafculated Maximum Al-l-owed
14 Labor Expense (col-umn 5 : column 2 x column 4) to determine
15 whether the cap was exceeded.
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Tab1e 5 Annua]. Lal.or E:q>ense Compliance
with Order No. 33908
5 Case Nos. IPC-E-12-15, IPC-E-13-08, IPC-E-14-04, IPC-E-15-06,
IPC-E-16-03, and IPC-E-17-03.
6 Rider-funded employees charged a total of 50,510.23 hours during
20L6. The previously adopted methodology assumed 7972 "standard" hours
to divide into the totaf hours to determine the number of FTEs. Becausethere were 21 pay periods during 2076 instead of the typi-cal 26 payperiods, the Company used 1992 (1972 + 80) to determine the number of
FTEs in the year.
ASCHENBRENNER, DI 4I
Idaho Power Company
Col-umn 1 2 3 4 5 6
Year
TotaI
Labor FTEs
2076
Baseline
$/rrr
$/FTE plus
Annual- 2%
fncrease
Maximum
Affowed
Labor
Expense
Amount
in Excess
of 22 Cap
2076
2071
$3,097,309
$3,296,704
25.36
26 .82
$122 , \50
$124,593 $3,341,600 $
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2. EEAG Stakeholder Input Deferred Investment
Stream.
I In Order No. 33908, the Commission directed
the Company to address with the EEAG
or 2)-year deferred investment
whether it should use
stream when quantifying
and distribution
a 1-
the value of deferred transmission
10
investments. Did the Company address this matter with the
EEAG?
A. Yes. The Company presented this issue to the
EEAG at its February 8, 2018, meeting and committed that it
wil-l- util-ize a 2)-year analysis in the 2079 IRP.
Additionally, in that meeting, a representative from the
Northwest Power and Conservation Councll- ("Counci1") al-so
provided an update on work being done regionally to move
closer to a regionally-adopted methodology around valuing
benefits of energy efficiency on deferred transmission and
distrlbution. In the faI1 of 2011, approximately 10
util-ities, including fdaho Power, participated in a meeting
with the Council on this topic. Idaho Power will- continue
its work with the Council- and other utilities in 20LB and
commits to fol-l-owing up with the EEAG as it final-izes its
methodology and assumptions.
ASCHENBRENNER, DI 42
Idaho Power Company
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VII. CONCLUSION
O. Do you beli-eve that the information contained
in this testimony and attached exhibits supports a prudence
determination for 20L1 DSM expenses?
A. Yes. The DSM 2017 Annual Report detai1s Idaho
Power's DSM offerings in program specific sections. Based
on the 2071 DSM Annual Report, the testimony set forth
above, and the attached exhibits, Idaho Power respectfully
requests the Commission determine that $44,745,316 of DSM
expenses incurred for the acquisition of demand-side
resources were prudently incurred.
O. Does this conclude your testimony?
A. Yes, it does.
ASCHENBRENNER, DI 43
fdaho Power Company
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ATTESTATION OF TESTIMONY
STATE OF IDAHO
qe
County of Ada
I, Connie Aschenbrenner, having been duly sworn to
testify truthfully, and based upon my personal knowledge,
state the following:
I am employed by Idaho Power Company as the Manager
of Rate Design in the Regulatory Affairs Department and am
competent to be a witness 1n this proceeding.
I declare under penalty of perjury of the laws of
the state of Idaho that the foregoing pre-fil-ed testi-mony
and exhibits are true and correct to the best of my
information and belief.
DATED this 15th day of March 2018.
Connie Aschenbrenner
SUBSCRIBED AND SWORN to before me this 15th day of
March 2018.
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S
Notary Public for Idaho
Resj-ding at Boise Idaho
My commission expires:02/04
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trotAtry
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