20190409Comments - Redacted.pdf

KARL T. KLEIN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720.007 4
[phone]
IDAHO BARNO.5156
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Street Address for Express Mail
472 W. WASHINGTON
BOISE, IDAHO 83102.5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR
AUTHORITY TO REVISE THE ENERGY
EFFICIENCY RIDER, TARIFF SCHEDULE 9I.
REDACTED COMMENTS OF
THE COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission comments as follows on Idaho Power
Company' s Application.
BACKGROUND
On February l2,20I9,Idaho Power Company (the Company) applied to the Commission
for an order authorizing the Company to revise its Energy Efficiency Rider, Tariff Schedule 91.
If approved, the Company's proposed changes would decrease the collection rate from 3.75
percent to2.75 percent, effective June 1,2019.
The Energy Efficiency Rider appears on customers' monthly bills as a line item for
Energy Efficiency Services. The Company uses the Rider balancing account to collect funds to
pay for its energy efficiency programs, but these accounts do not impact the amount of demand-
side management (DSM) the Company will pursue. Schedule 91 is a recovery mechanism
associated with this balancing account so the Company can be reimbursed for prudently incurred
DSM expenditures. The Rider currently collects about $40 million per year, and at the end of
2018, the Rider account had a surplus balance of about $5.3 million. The Company notes that,
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CASE NO. IPC.E.19.O6
1STAFF COMMENTS APRIL 9,2019
without the adjustment, the Rider account balance would increase to about $l 1.6 million by the
end of2019.
The Company states that if the proposed change is approved, the price Idaho customers
pay for electric service would reflect about a $10.4 million decrease in annual revenue collection,
which would be a0.90Yo decrease from current billed revenue. For a typical residential customer
who uses 950 kilowatt-hours per month, the change would lower a monthly bill by 83 cents.
Previous Changes to Schedule 91
The Schedule No. 91 rate was established in 2002 at 0.5%. On June 1,2005, the rate was
increased to l.Syo. On June l, 2008, the rate increased further to2.5Yo. In2009,the rate was
increased againto 4.75Yo. In2011, the rate was decreased to 4.\Yo and $10 million was
transferred from the Power Cost Adjustment (PCA) balance to the Rider balance. Since that
date, $41 million has been transferred from the Rider balance to the PCA, with $10 million
transferred in20l4, $4 million in 2015 and2016, and $13 million 2017. Also in 2017, the Rider
was reduced to its current 3.75% rate and the annual transfers to the PCA were eliminated. At
that time, the Company stated that the 3.75% Rider rate would provide adequate funding until at
least 2020.
STAFF REVIEW
Staff has reviewed the Application and Company forecast and supports the Company's
request to decrease the Schedule No. 9l Energy Efficiency Rider rate from 3.75% to 2.75Yo.
Staff anticipates the new rate will align revenue for efficiency programs with the Company's
DSM expenditures.
The Company's updated forecast shows the currently authorized rate in Schedule No. 91
would result in revenues of about $39 million in20l9. The Company's current forecast for
energy efficiency expenses in 2019 is That surplus revenue would increase the
$5.3 million Rider balance from the beginning of 2019 to by the end ofthe year.
The Company projects that a 2.75% rate for Schedule No. 91, effective June l, 2019,
would decrease the Rider balance to by the end of 2019 and remain stable until the
end of 2021, when the Rider balance would be about $I. According to the Company's
forecast, decreasing the Rider below I would cause a deficit balance by the end of 2021,
2STAFF COMMENTS APRIL 9,2019
Allocation Between Schedules
Staff reviewed Attachment 3 of the Company's Application, which showed the effects of
the proposed adjustment to customer class schedules. Staff determined that the Company
properly applied the proposed new rate to each customer class.
Customer Impacts
Staff investigated the trend in previous changes to Schedule No. 91, the cost allocation
between schedules, and any customer impacts from the proposed changes. The proposed
decrease to2.75o/o in Schedule No. 91 rates would lower costs by about $10 per year for a
residential customer using 950 KWh per month. Application at 4.
The Company expects its DSM expenses to decrease in the next 3 years from a projected
in 2019 to in202l. This decrease is largely due to a reduction in the
size of current energy efficient lighting programs as new federal code requirements for higher
efficiency light bulbs will be enacted in2020. Lighting programs arc alarge part of the
Company's DSM programs, and Staff recognizes energy efficiency programs throughout the
country will be affected by upcoming changes.
Decreasing the Energy Efficiency Rider rate does not signal a loss of support for DSM
programs. As previously stated, the Rider balancing account enables the Company to recover its
prudently incurred DSM costs without impacting the level of DSM or number of programs the
Company will pursue. Staff continues to encourage the Company to pursue all available cost-
effective DSM, even if costs exceed projected expenses. Based on its forecasts, the Company
would still have a significant surplus Rider balance even if the proposed rate decrease went into
effect, which would allow it to continue to pursue DSM programs, even if expenses exceed
projections. If the reduction in the tariff Rider percentage is approved, expenses and revenue
will be properly aligned in20l9-2021.
RECOMMENDATION
Staff recommends that the Commission approve the Company's Application to decrease
Schedule No. 9l Energy Eff,rciency rates to 2.75yo, effective June 1, 2019.
JSTAFF COMMENTS APRIL 9,2019
4*t'LRespectfully submitted this
Technical Staff: Brad Iverson-Long
Cassie Koemer
I:\umisc/comments\ipce I 9.6kkblck comments
day of April2019.
Karl
Deputy General
4STAFF COMMENTS APRIL 9,2079
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 9th DAY OF APRIL 2019, SERVED
THE FOREGOING REDACTED COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-19.06, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
LISA D NORDSTROM
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-mail: [e-mail]
dockets@idahopower. com
PETER J RICHARDSON
RICHARDSON ADAMS PLLC
515 N 27TH STREET
BOISE TD 83702
E-MAIL: [e-mail]
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
7IO N 6TH ST
BOISE ID 83702
E-MAIL: botto(Eidahoconservation.org
CONNIE ASCHENBRENNER
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: [e-mail]
DR DON READING
6070 HILL ROAD
BOISE ID 83703
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE