20190423Reply Comments.pdf

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An TDACORP Company
LISA D. NORDSTROM
Lead Counsel
I [e-mail]
April 23, 2019
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho 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
ldaho Power Company's Reply Comments
Dear Ms. Hanian:
Enclosed for filing in the above matter please find an original and seven (7) copies
of ldaho Power Company's Reply Comments.
Very truly yours,
Lisa D. Nordstrom
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LDN:kkt
Enclosures
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I n ord strom @ id a hopowe r. com
Attorney for ldaho Power Company
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHOR]TY TO REVISE THE ENERGY
EFFFICIENCY RIDER, TARIFF
SCHEDULE 91.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. !PC-E-19-06
IDAHO POWER COMPANY'S
REPLY COMMENTS
ldaho Power Company ("!daho Power" or "Company") respectfully submits the
following Reply Comments in response to comments filed by the ldaho Public Utilities
Commission ("Commission") Staff ("Staff'), the ldaho Conservation League ("!CL"), the
lndustrial Customers of ldaho Power ("lClP'), the City of Boise ("the City"), and the
Northwest Energy Coalition ("NWEC") on April 9, 2019.
ldaho Power appreciates the comments provided in this case and its Reply
Comments will respond to (1) the parties' recommended level of funding for the Energy
Efficiency Rider ("Rider"), (2) the appropriateness of avoided cost inputs relied upon by
the Company to determine cost-effectiveness for evaluating program performance, and
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IDAHO POWER COMPANY'S REPLY COMMENTS - 1
(3) the City's request that the Commission direct ldaho Power to evaluate the utility cost
test ("UCT") methodology for assessing energy efficiency programs.
I. LEVEL OF RIDER FUNDING
Both Staff and lCL recommend the Commission approve the Company's request
to reduce the Rider funding from 3.75 to 2.75 percent of base rate revenues. lClP
supports a reduction to the Rider but suggests that the Commission should consider that
future decreases in Demand-Side Management ("DSM") alternate costs will lead to
energy efficiency programs that will no longer be cost-effective and asks the Commission
to "take the more conservative (and ratepayer centric) approach to setting rates by
reducing ldaho Power's Energy Efficiency Rider to2.5o/o."1 Finally, NWEC recommended
the Commission leave the Rider collection at 3.75 percent and rely on the Company's
Power Cost Adjustment to return customer money, if needed; however, in the alternative,
NWEC recommended the Commission could reduce the Rider by 0.25 percent, resulting
in a change to the Rider collection from 3.75 percent to 3.50 percent.
ln its Application, ldaho Power stated "the proposed Rider reduction will not
diminish ldaho Power's pursuit of all cost-effective energy efficiency."z The Company
appreciates and affirms Staffs statement in its comments that "decreasing the Energy
Efficiency Rider rate does not signal a loss of support for DSM programs"s and ICL's
statement that it "fully supports" ldaho Power's commitment "and notes this aligns with
prior Commission orders."r Based on the NWEC's comments and recommendation, the
1 lClP's Comments at 8.
2 ldaho Power's Application at 4
3 Staffs Comments at 3.
a ICL's Comments at 1.
IDAHO POWER COMPANY'S REPLY COMMENTS - 2
Company believes that the NWEC may misconstrue the relationship between Rider
funding levels and ldaho Power's pursuit of cost-effective energy efficiency. On page 1
of their Comments, NWEC states that "a proposed decrease in collection and spending
necessarily equals a decrease in energy efficiency targets and acquisition." However,
the Company does not modify its energy efficiency targets or efforts based on the level
of funding, rather it forecasts energy efficiency savings and necessary funding based on
the economic and achievable savings identified in the Company's third-party 2019
Potential Study.
Based on the information contained within the Company's current forecast of
funding and expenditures, ldaho Power believes 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.
II. DSM ALTERNATE COSTS RELIED UPON TO MEASURE COST.
EFFECTIVENESS FOR PROGRAM EVALUATION
ln its comments, lClP expressed disagreements with the rationale relied upon by
the Company for utilizing DSM alternate costs from the most recently acknowledged
lntegrated Resource Plan ("lRP") as a basis for DSM program year planning and
measurement of program performance in that year. While the Company believes it is
most appropriate to address concerns regarding measurement of cost-effectiveness in its
recently filed request for a determination of its 2018 DSM expenses as prudently incurred
(Case No. IPC-E-19-11), the Company will summarize for the Commission's
consideration the basis for the current practice.
5 lClP's Comments at 4
IDAHO POWER COMPANY'S REPLY COMMENTS - 3
The current practice of relying on the DSM alternate costs from the most recently
acknowledged IRP has been utilized by ldaho Power since 2014 and has been discussed
with and supported by members of the Company's Energy Efficiency Advisory Group
('EEAG"). Specifically, in regard to the 2018 program year (a program year matches the
calendar year, but its budget is developed in August-September of the preceding year),
in the November 1,2017, EEAG meeting, the Company gave a presentation titled Future
EE Measure Savings and IRP Avoided Cosfs which contained the assumptions for DSM
alternate costs and other inputs for the 2017,2018, and 2019 program years.6
ldaho Power believes that its policy of using the best available information at the
time of budgeting and program planning complies with utility standards, is consistent with
third-party evaluator recommendations, has been presented to EEAG, and has been
published in multiple reports and filings to both the ldaho and Oregon Commissions.
While ldaho Power is not supportive of a change to the current practice, should the
Commission determine the Company should rely on information available from its most
recently filed lRP for DSM program planning instead of the current practice of relying on
the most recently acknowledsed lRP, the Company suggests parties to Case No. IPC-E-
19-1 t have an opportunity to present information for the Commission's consideration prior
to a change being implemented.
III. COST.EFFECTIVENESS TESTS FOR ASSESSING
ENERGY EFFICIENC
ln its comments, the City asks the Commission to instruct ldaho Power to consider
relying on the UCT and suggests:
By using the UTC (sic) methodology, there would likely be an
increase in energy efficiency programs that would qualify for
funding, thereby increasing the need forfunding of the Energy
6 See Attachment 1 for presentation slide titled "Program and Measure Cost-Effectiveness
Assumptions."
IDAHO POWER COMPANY'S REPLY COMMENTS - 4
Efficiency Rider. This aligns well with the City's goals on
increasing energy efficiency as part of the 100o/o clean energy
goal by 2035.?
The City argues that including customer costs in the determination of cost-
effectiveness is "not within the purview of lPC" and "has no material impact on IPC from
an energy efficiency investment standpoint."a ldaho Power disagrees with the City for
several reasons. First, the Company disagrees with the suggestion that it is "not within
the purview of ldaho Power" to evaluate the total cost of acquiring energy services within
the Company's service area. ldaho Power is obligated to engage in least cost resource
plannings to offer electric service at just and reasonable rates.10 Relying on the UCT test
results to inform DSM resource acquisition targets may lead to the pursuit of uneconomic
outcomes and higher overall energy costs for ldaho Power's customers. Second, it is
entirely inappropriate to adopt resource planning changes that may increase costs for all
ldaho Power customers simply to further a goal set by the City on behalf of its own
residents. ldaho Power supports the pursuit of clean energy over time; however, such
pursuit should be carried out cost-effectively.
Notwithstanding the previous statements, the Company believes the appropriate
case for evaluation of cost-effectiveness tests for DSM programs is the Company's 2018
DSM Prudence case, !PC-E-19-11. The Company has asked the Commission to address
the issue of cost-effectiveness for long-term resource planning in Case No. IPC-E-19-1 1.
ln that case, the Company has presented evidence refuting the City's claim that by
changing the measurement, additional cost-effective energy savings will be realized by
z The City's Comments at 2.
I /d. at 3.
s Order No. 22299.
10 ldaho Code $ 61-502.
IDAHO POWER COMPANY'S REPLY COMMENTS - 5
ldaho Power's customers.ll The Company suggests all parties to Case No. IPC-E-19-1 1
have an opportunity to present information for the Commission's consideration prior to a
change being implemented.
IV. CONCLUSION
ldaho Power appreciates the opportunity to respond to comments filed in this case
and respectfully requests that the Commission issue an order approving its Application
with the modified Rider percentage change lo 2.75 percent of base rates with an effective
date of June 1 ,2019.
DATED at Boise, ldaho, this 23'd day of April, 2019.
NORD
Attorney for ldaho Company
11 Case No. IPC-E-19-11, EckmanDlatlS-22
IDAHO POWER COMPANY'S REPLY COMMENTS - 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 23rd day of April 2019, I served a true and correct
copy of IDAHO POWER COMPANY'S REPLY COMMENTS upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Karl T. Klein
Deputy Attorney General
ldaho Public Utilities Commission
47 2 \N est Wash ington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
lndustrial Customens of ldaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North 6th Street
Boise, ldaho 83702
City of Boise City
Abigail R. Germaine
Deputy City Attorney
Boise City Attorney's Office
150 North Capitol Boulevard
P.O. Box 500
Boise, ldaho 83701-0050
IDAHO POWER COMPANY'S REPLY COMMENTS - 7
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utive AssT
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
cAsE NO. IPC-E-I9-06
IDAHO POWER COMPANY
ATTACHMENT 1
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