20190212Application.pdf

An IOACORP Company
LISA D. NORDSTROM
Lead Counsel
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February 12,2019
VIA HAND DELIVERY
Diane Hanian, Secretary
!daho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re Case No. IPC-E-19-06
ln the Matter of the Application of ldaho Power Company for Authority to
Revise the Energy Efficiency Rider, Tariff Schedule 91
Idaho Power Company's Application
Dear Ms. Hanian:
Enclosed for filing in the above matter please find an original and seven (7) copies
of ldaho Power Company's Application. lf you have any questions about the enclosed
documents, please do not hesitate to contact me.
Attachments 1 and 6 to the Application are confidential. Please handle the
confidential information in accordance with the ProtectiveAgreementto be executed in this
matter.
Very truly yours,
SEffi*.
7(^/J**
Lisa D. Nordstrom
LDN:kkt
Enclosures
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 W. ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I n ord strom @ id a h opower. com
ilrarr\/Ft"l! -L\-/i-ll Lu
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Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILIT!ES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO REVISE THE ENERGY
EFFICIENCY RIDER, TARIFF
SCHEDULE 91.
CASE NO. IPC-E-19-06
APPLICATION
ldaho Power Company ("ldaho Power" or "Company"), in accordance with ldaho
Code S 61-503 and RP 052, hereby respectfully makes application to the ldaho Public
Utilities Commission ("Commission") for an order approving a decrease to the collection
percentage of the Energy Efficiency Rider ("Rider"), Tariff Schedule 91 , from 3.75 percent
lo 2.75 percent of base rate revenues effective June 1,2019.
ln support of this Application, ldaho Power represents as follows:
I. BACKGROUND
1. The Commission issued Order No. 29026 on May 13,2002, authorizing the
creation of the Energy Efficiency Rider as a means to fund demand-side management
("DSM") programs.
APPLICATION - 1
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2. Past Rider Percentaqe Chanoes. Since the inception of the Rider, ldaho
Power has monitored the level of collection through the rate mechanism with a goal of
matching the level of funding with the level of energy efficiency expenditures over time.
Consistent with that goal, the Commission has authorized changes to the Rider
percentage over the years. The Company has also been authorized, in limited cases, to
collect additional funding through the Company's annual Power Cost Adjustment ("PCA")
to fund the Rider, as well as refund surplus Rider funds to customers through the PCA.
This history is reflected on the following chart:
3. Current Rider Fundinq Percentaqe and Collection. The Rider is currently
set at 3.75 percent of base revenues as authorized by Order No. 33736. lt currently
collects approximately $40 million per year to fund ldaho Power's DSM programs and
other energy efficiency initiatives. At the end of 2018, the Rider balancing account had a
collected surplus balance of approximately $5.3 million and, without adjustment, the Rider
APPLICATION - 2
rPC-E-02-02
lPc-E-02-03 29026 May 2OO2 First Rider set at 0.5%
IPC-E-04-29 29784 May 2005
rPc-E-08-03 30560 May 2008 Second Rider increase to 2.5o/o
tPc-E-09-05 30814 May 2009 Third Rider increase to 4.75o/o
tPc-E-10-27 32217 May 2011 $10 Million to Rider from PCA to decrease Rider
deficit
lPc-E-11-08 32426 May 2011
Rate case authorized recovery of Demand
Response incentives through PCA and reduced
Rider to 4.0o/o
lPc-E-14-05 33049 May 2014 $20 Million to PCA from Rider*
lPc-E-15-14 33306 May 2015 $4 Million to PCA from Rider
rPc-E-16-08 33526 May 2016 $4 Million to PCA from Rider
tPc-E-16-33 33736 March2017
$13 Million to PCA from Rider; annual $4 Million
Rider funds transfer to PCA eliminated; reduced
Rider to 3.75o/o
"lncludes $4 million transfer to maintain revenue neutrality and $16 million in surplus Rider funds
Case No.Order No.Date Action Authorized
First Rider increase to 1.5o/o
balancing account is projected to have a collected balance of approximately $11.6 million
at the end of 2019.
II. PROPOSAL FOR RIDER PERCENTAGE DECREASE
4. Rider Balance Forecast. Based on a recently completed forecast of Rider
balances for 2019 through 2021, the Company has confirmed that the current Rider
collection level of 3.75 percent is likely to result in the further accumulation of surplus
Rider funding balances over that period. ldaho Power's modeled recommended Rider
percentage and resulting annual Rider balances are provided as ConfidentialAttachment
No. 1 . A description of the assumptions used in the model is provided as Attachment No.
2.
5. Percentaqe Decrease Proposal. Based on the information contained in the
forecast, ldaho Power believes that a 2.75 percent Rider collection will adequately
mitigate the accumulation of surplus Rider balances while still providing adequate funding
for the recovery of all prudently incurred costs related to the pursuit of all cost-effective
energy efficiency. ldaho Power proposes to decrease the collection percentage of the
Rider from 3.75 percent to 2.75 percent of base rate revenues effective June 1,2019.
6. The proposed one percent Rider reduction is supported by the Company's
2019-2021forecast of energy efficiency savings based on the economic and achievable
savings as identified in the 2019 Potential Study. The 2019 Potential Study informs, in
consultation with the lntegrated Resource Plan Advisory Committee ("lRPAC"), the
energy efficiency targets in the lntegrated Resource Plan ("lRP"). Projected 2019-2021
Rider balances provide adequate funding should the finaltargets included in the IRP drive
APPLICATION - 3
additional program expenditures. The proposed Rider reduction will not diminish ldaho
Power's pursuit of all cost-effective energy efficiency.
7 . Timinq. ldaho Power proposes the date of the Rider percentage change to
be effective June 1, 2019, to coincide with ldaho Power's annual PCA, Fixed Cost
Adjustment, the commencement of seasonal rates, and other rate changes that may
occur on that date. The Company believes this timing is preferred to help minimize
customer confusion and provide transparency of the combined bill impact to customers.
BI illed Revenue and Customer Rate lmpact.The proposed decrease in the
Rider percentage from 3.75 percent of base rate revenues to 2.75 percent of base rate
revenues represents a $10.4 million, or 0.90 percent, decrease from current billed
revenue. The percentage change in billed revenue associated with the Rider percentage
change is found in Attachment No. 3. This proposed decrease results in an approximate
$0.83 decrease to the monthly bill of a typica! customer using 950 kilowatts per month.
9. Proposed Tariffs. The proposed Rider tariff (clean version), Schedule 91,
is attached hereto as Attachment No. 4 to this application. The Schedule 91 tariff in
legislative format is attached hereto as Attachment No. 5.
III. STAKEHOLDER ENGAGEMENT
10. Stakeholder Consultation. During the January 23, 2019, Energy Efficiency
Advisory Group ('EEAG') meeting, the Company announced it was evaluating the level
of current and forecast expenditures, was developing a near-term plan to address the
trend of funding exceeding expenditures, and invited interested members of EEAG to
participate in a Company-led webinar where it would share its recommended path
APPLICATION - 4
fonruard. Subsequently, the Company contacted intervening parties in Case Nos. IPC-E-
16-03 and IPC-E-16-33 inviting them to participate in the webinar as well.
11. On February 6, 2019, the Company held a webinar attended by
Commission Staff, the City of Boise, the ldaho Conservation League, the Northwest
Energy Coalition, the lndustrial Customers of ldaho Power, the Office of Energy and
Mineral Resources, and Simplot. At that meeting, the Company presented its
recommendation to seek Commission approval to reduce the Rider collection from 3.75
percent to 2.75 percent to better align the near-term level of funding with the level of
energy efficiency expenditures, effective June 1,2019.
12. Stakeholder Feedback. Generally, stakeholders were in alignment with the
Company recommending an adjustment to the Rider collection percentage to a level
where funding better matches expenditures. One webinar participant inquired about how
different energy efficiency targets set in the 2019 IRP may influence the Company's level
of requested funding. Two other participants inquired about whether the Company
considered reducing the percentage by less than the recommended one percent, and
what the resulting 2021 forecasted balances may be under alternate scenarios.
13. The Company discussed basing its forecast of expenditures on the
economic and achievable savings identified in the 2019 Potential Study as being a
reasonable assumption at this time for several reasons. First, the final targets of energy
efficiency included in the 2019 IRP are ultimately informed by 2019 Potential Study and
will be determined in the IRP process in consultation with the IRPAC. Second, the
Company believes its projected 2019-2021 ending Rider balances, assuming the
APPLICATION - 5
recommended one percent reduction is approved, provides adequate funding should the
finaltargets included in the IRP drive additional program expenditures.
14. Alternate Collection Percentaoes. While the Company believes the
recommended one percent best aligns anticipated funding with expected program
expenditures, in light of the feedback received during the webinar, the Company has
included Confidential Attachment No. 6, which models two alternate Rider collection
percentages of 2.85 and 3.0 percent. Under both additional scenarios the level of Rider
funding exceeds the levelof expenditures and would result in growth of the Rider balance.
IV. MODIFIED PROCEDURE
15. ldaho Power believes that a hearing is not necessary to consider the issues
presented herein and respectfully requests that this Application be processed under
Modified Procedure; i.e., by written submissions rather than by hearing. RP 201, ef seg.
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
16. ln conformance with RP 125, this Application will be brought to the attention
of ldaho Power's customers by means of a press release to media in the Company's
service area and a customer notice distributed in customers' bills, both of which
accompany this filing. The customer notice will be distributed over the course of the
Company's billing cycles, with the last notice being sent on March 21,2019. ldaho Power
will also provide its Application for public inspection at its offices throughout the state of
ldaho. ldaho Power asserts that this notice satisfies the Rules of Procedure of this
Commission; however, the Company will, in the alternative, bring the Application to the
attention of its affected customers through any other means directed by this Commission.
APPLICATION - 6
17. Communications and service of pleadings with reference to this Application
should be sent to the following:
Lisa D. Nordstrom
Idaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
I n ord strom @ id a hopowe r. com
dockets@ idahopower. com
Connie Aschenbrenner
Idaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
casch en b ren ne r@ ida hopower. com
VI. REQUEST FOR RELIEF
18. For the reasons set forth above, ldaho Power Company respectfully
requests that the Commission issue an order authorizing a decrease in the Energy
Efficiency Rider Tariff from 3.75 percent to 2.75 percent of base rate revenues effective
June 1 ,2019.
Respectfully submitted this 12th day of February 2019.
SA D. NOR M
Attorney for ldaho Power Company
APPLICATION - 7
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-I9-06
IDAHO POWER COMPANY
CONFIDENTIAL
ATTACHMENT 1
Recommended Rider Percentage
and Resulting Rider Balances
ATTACHMENT 1
IS CONFIDENTIAL AND
WILL BE PROVI DED TO
THOSE PARTIES THAT
EXECUTE THE
PROTECTIVE AGREEMENT
IN THIS MATTER
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-I9-06
IDAHO POWER COMPANY
ATTAGHMENT 2
Assumptions
Assumption
Years Modeled 2019 throush 2021
Rider Percentage 2.75o/o
Rider Percentage
lmplementation Date June 1,2019
2019 Beginning Rider
Balance Based on 2018 December actual balance
Rider Funding Based on a September 2018 forecast of ldaho Power base rate revenues
tor 2019-2021. Forecast revenues do not include the potential impact of
June 1 ,2019, rate changes.
Carrying Charqes Two percent of average annual beginning and ending balances.
Energy Efficiency kWh
Savings
Based on cost-effective achievable energy efficiency savings as identified
in the 2019 Potential Study.
Energy Efficiency
Program Expenses 2019 ldaho Energy Efficiency program budget divided by the 2019
estimated kWh savings converted to $/kWh. Escalated at2.2o/o and
applied to the energy efficiency potential savings in ldaho for 2020-2021.
Labor - Average 2% escalation from 2019 budgets.
lncentives - 74o/o of Energy Efficiency expenses based on historical actual
percentages.
Other Expenses - $/kwh multiplied by the estimated energy savings in
ldaho less incentives and labor.
Demand Response
Expenses
Labor - Average 2o/o escalalion from 2019 Budget.
lncentives - Not included in ldaho Rider forecast (collected through base
rates and the PCA).
Other Expenses - Escalated al2.2o/o from 2019 budgets.
lndirect Program
Expenses
Labor - Average 2o/o escalation from 2019 Budget.
Other Expenses - lndirect Program expenses excluding Labor were
budgeted at approximately 21% of Program lncentives based on the 2019
budgets.
Market Transformation Five year contract with the Northwest Energy Efficiency Alliance ends
June 2020. Assume contract renewal based on preliminary funding
estimate.
ldaho Energy Efficiency Rider ("Rider") Modeling Assumptions
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-I9-06
IDAHO POWER COMPANY
ATTACHMENT 3
Rate Impact
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BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-I9-06
IDAHO POWER COMPANY
ATTACHMENT 4
PROPOSED TARIFF
(clean format)
ldaho Power Company
l.P.U.C. No. 29. Tariff No. 101
Eighth Revised Sheet No. 91-1
Cancels
Seventh Revised Sheet No. 91-1
SCHEDULE 91
ENERGY EFFICIENCY RIDER
APPLICABILITY
This schedule is applicable to all retail Customers served under the Company's schedules and
special contracts. This Energy Efficiency Rider is designed to fund the Company's expenditures for the
analysis and implementation of energy conservation and demand response programs.
MONTHLY CHARGE
The Monthly Charge is equal to the applicable Energy Efficiency Rider percentage times the
sum of the monthly billed charges for the base rate components.
Schedule Enerqv Efficiencv Rider
Schedule 1
Schedule 3
Schedule 4
Schedule 5
Schedule 6
Schedule 7
Schedule 8
Schedule 9
Schedule 15
Schedule 19
Schedule 24
Schedule 39
Schedule 40
Schedule 41
Schedule 42
Schedule 26
Schedule 29
Schedule 30
Schedule 32
2.75o/o
2.75o/o
2.75o/o
2.75o/o
2.750/o
2.75o/o
2.75o/o
2.75o/o
2.750/o
2.75o/o
2.75o/o
2.75o/o
2.75o/o
2.75o/o
2.75o/o
2.75o/o
2.75o/o
2.75o/o
2.75o/o
IDAHO
lssued per Order No. _
Effective - June 1, 2019
lssued by IDAHO POWER COMPANY
Timothy E. Tatum, Vice President, Regulatory Affairs
1221 West ldaho Street, Boise, ldaho
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-I9-06
IDAHO POWER COMPANY
ATTAGHMENT 5
PROPOSED TARIFF
(legislative format)
ldaho Power Company SeventhEiqhth Revised Sheet No. 91-1
Cancels
|.P.U.C. No. 29, Tariff No. 101Sil*hSeventh Revised Sheet No. 91-1
SCHEDULE 91
ENERGY EFFICIENCY RIDER
APPLICABILITY
This schedule is applicable to all retail Customers served under the Company's schedules and
special contracts. This Energy Efficiency Rider is designed to fund the Company's expenditures for the
analysis and implementation of energy conservation and demand response programs.
MONTHLY CHARGE
The Monthly Charge is equal to the applicable Energy Efficiency Rider percentage times the
sum of the monthly billed charges for the base rate components.
Schedule Enerov Efficiencv Rider
Schedule 1
Schedule 3
Schedule 4
Schedule 5
Schedule 6
Schedule 7
Schedule 8
Schedule 9
Schedule 15
Schedule 19
Schedule 24
Schedule 39
Schedule 40
Schedule 41
Schedule 42
Schedule 26
Schedule 29
Schedule 30
Schedule 32
3/.75o/o
3/.75o/o
3/.75Yo
3/.75o/o
3/.7SYo
32-.75o/o
3/.75o/o
32.75o/o
3/.7SYo
3/.75%o
3/.75o/o
32.75o/o
3/.75Yo
32-.75Yo
3/.7SYo
32-.75o/o
32-.75o/o
3/.7SYo
32.75o/o
IDAHO
lssued per Order No. 34046_
Effective - June 1, 20189
lssued by IDAHO POWER COMPANY
Timothy E. Tatum, Vice President, Regulatory Affairs
1221 West ldaho Street, Boise, ldaho
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-I9-06
IDAHO POWER COMPANY
CONFIDENTIAL
ATTACHMENT 6
Alternate Rider Scenarios
ATTACHMENT 6
IS GONFIDENTIAL AND
WILL BE PROVIDED TO
THOSE PARTIES THAT
EXECUTE THE
PROTECTIVE AGREEMENT
IN THIS MATTER