20190315Aschenbrenner Direct.pdf

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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
]N THE MATTER OF THE APPLICATION
OF ]DAHO POWER COMPANY EOR A
DETERM]NATION OF 2O1B DEMAND-
SIDE MANAGEMENT EXPENSES AS
PRUDENTLY INCURRED.
]DAHO POWER COMPANY
DIRECT TESTIMONY
OF
CONNIE G. ASCHENBRENNER
CASE NO. ]PC-E-19-11
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O. Please state your name and business address.
A. My name j-s Conni-e G. Aschenbrenner. My
business address is 722L West ldaho Street, Boj-se, Idaho
831 02 .
O. By whom are you employed and in what capacity?
A. I am employed by Idaho Power Company ("Idaho
Power" or "Company") as the Rate Design Senior Manager in
the Regulatory Affairs Department.
0. Pl-ease describe your educational- background.
A. In May of 2006, T received a Bachel-or of
Business Administration degree in Finance from Boise State
University
a Master of
IN Boise, Idaho. In December of 20L7, I earned
Business Administration degree from Boise State
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Unj-versity. In addition,
utility ratemaking course
Training for the ELectric
through New Mexico State
Utilities.
I have attended the electric
The Bas-zcs.'
Industry, a
Univers j-ty's
PracticaL Requlatory
course offered
Center for PubIlc
19 Please describe your work experience with
20 Idaho Power.
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A. In 20L2, I was hired as a Regulatory Analyst
in the Company's Regulatory Affairs Department. My primary
respons j-bil-ities included support of the Company's
Commercial- and Industrial- customer class's rate design and
general support of tariff rul-es and regulations. In 2015,
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ASCHENBRENNER, DIRECT
Idaho Power Company
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1 I assumed responsibilities associated with Residential- and
2 Small General Servlce rate design, ds well- as activities
3 associated wlth demand-side management (*DSM"). In 20L6, I
4 was promoted to a Senior Regulatory Analyst and my
5 responsibilities expanded to incfude the development of
6 complex cost-related studies. In 201-1 , I was promoted to
7 Rate Design Manager for Idaho Power and in 20L9 f was
8 promoted to my current role of Rate Design Senior Manager.
9 I am currently responsible for the management of the rate
10 design strategies of the Company, as well- as oversight of
11 all- tariff administratj-on. In my current role, I am one of
72 the Company representatives at its Energy Efficiency
13 Advisory Group ("EEAG") meetings.
74 O. What is the Company's request in this case?
15 A. First, the Company is requesting $40,712,164
76 of expenses lncurred during 2078 for the acquisition of
Ll cost-effective demand-slde resources be considered by the
18 Idaho Public Utilities Commission ("Commission") as
19 prudently incurred. Second, the Company requests the
20 Commissj-on find that ldaho Power complied with Order No.
21 34\41 issued in the 2011 DSM prudence determination, Case
22 No. IPC-E-18-03 (*2017 Prudence Case"). Third, the Company
23 requests the Commission determine that the inclusion of a1l-
24 cost-effective DSM resources in the Company's long-term
25 resource planning process, from a total resource cost
ASCHENBRENNER, D]RECT
Idaho Power Company
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perspective, will
outcome and best
lead to the most economic planning
serve the public lnterest.
How is the Company's case organized?
Mr. Pawel Goralski will present the Company's
prudencerequest for the Commission to issue a
determination that $40,172,164 of DSM expenses incurred for
the acquisitj-on of cost-effectj-ve DSM resources in 2078
were prudently j-ncurred.
My testimony will- provide the Commission with an
overview of the Company's efforts to reach a compromise on
each of the issues identified by parties in the 20L1
Prudence Case, in compliance with Order No. 34L4L. My
overview details each area where parties were able to reach
a resolution, or at least ident.ified a path toward
resolution, and one speclfic area where alignment was not
reached. I w1l-f provide the Commission with a general
overview of the process used by Idaho Power to identify,
analyze, implement, and eval-uate cost-effective energy
efficiency programs ('EE Program Life-Cycle"). I wiIl
specifically describe the process the Company uses to
i-dentify DSM-resources in the Company's fntegrated Resource
PIan ("fRP") and will- discuss why the Company believes
continuing to rely on the total- resource cost (*TRC")
perspective j-n evaluating supply-si-de and demand-side
resources for long-term planning 1s most appropriate and in
ASCHENBRENNER, DIRECT
Idaho Power Company
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1 the best interest of customers. I wil-l- also describe the
2 process the Company uses to determine what measures and
3 programs the Company will offer to its customers in the
4 overall- DSM portfol-io and how the Company rel-ies on each of
5 the cost-effectiveness tests when eval-uating program
6 performance and seeking a Commission prudence
7 determination.
I Final1y, Company consultant Mr. Thomas Eckman will-
9 provide a detai1ed review of the industry recognized
10 economic tests used to assess energy efficiency and the
11 intended use of each test. Mr. Eckman wil-I present a
12 recommendation that the Commission rely on the TRC test as
13 the primary cost-effectiveness test to use for resource
74 planning and wil-l-
15 consequences that
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provide examples of unintended
occur when a utility instead relies on
test (*UCT") perspective for resourcecost
L1 Mr. Eckman wiII also provide an endorsement of
1B secondary tests in program planning and
t9 evaluation.
I. COMPLfAI{CE WITH ORDER NO. 34L4I
27 O. Pl-ease summarize the intent of this section of
your testimony.
A. In the 2017 Prudence Case, the Commission
ordered the Company to address with EEAG severaf issues and
recommendations presented by Commission Staff ("Staff") and
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the utility
planning.
the use of
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ASCHENBRENNER, D]RECT
Idaho Power Company
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the Idaho Conservation League (*ICL") in their respective
comments. The Commission further ordered that in this
current case, the Company, Staff, and ICL would each report
on how the EEAG addressed and considered each of the
recommendations. l The purpose of this section of my
testimony is to describe how the Company has complied with
the Commission directive issued in Order No. 34141.
O How did the
directive in
Company compJ-y with the
Commission's Order No. 34747?
A After the issuance of Order No.10
11 Company held two
12 the issues raised
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14 six issues3 were
EEAG meetlngs
by partles.
to facil-itate
The fi-rst six
34147, the
discussion of
issues2 were
October 30, 2018, meetlng and the remaining
discussed during the January 23, 2019,
1 Order No. 34141 at 6
2 fn order of discussion: (1) Not over-emphasize the resu-Its ofits Empowered Communj-ty surveys when designing programs for aIl of i-ts
customers; (2) Consider rncluding attic insulatj-on in the multifamj-J-y
housing program; (3) Consider expanding cohort group partnerships withmunicipalities and school districts; (4) Explore smaff business program
design options; (5) Consider a more frequent evaluation schedule andfollow the industry norm of two to three years for both impact andprocess evaluations for each program; and (6) Explore opportunities to
engage customers in energy effj-ciency when they slgn up for My Account.
3 In order of discussion: (7) Consider tailoring its marketing
efforts to achieve the micro-targeting proposed by the Company'sevaluator; (8) Rigorously examlne the potential- for expanded demand
response in its 2019 IRP,' (9) Consider applying the UCT, not the TRC,
as the best measure of the costs and benefits of efficiency programs asa resource,' (10) Reconsider the June 2017 discontinuation of the Home
Improvement Program (both Staff and ICL recommended thj-s action but forpurposes of reporting, the Company has combined as a single issue),.(11) Work with the EEAG and other experts to devise strategies andtactics that l-ead to energy savings; and (72) Ensure that Energy
Independence Security Act ('EISA")program savi-ngs remaj-n heatthy beyond
2020.
ASCHENBRENNER, D]RECT
Idaho Power Company
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1 meeting. To assist the Commission in its review of how the
2 Company addressed each specific issue, I directed the
3 preparation of a report attached to my testimony as Exhibit
4 No. 1 Report in Compliance with Commission Order No.
5 34141" ("Compliance Report"). In the remainder of my
6 testimony, I wilI refer to the issues/recommendations
7 identified by parties by the number associated wlth the
B issue in the Company's Compliance Report.
9 In addition to discussing the items with the EEAG,
10 the Company addressed two resource planning-specific
11 recommendations (demand response and energy efficiency
L2 modeling) with the Integrated Resource Plan Advisory
13 Council- ("IRPAC") in meetings held on December 13, 20L8,
14 and January 10, 2079. The Company afso met directly with
15 Staff, ICL, and the Sierra Club on December 19, 20L8, and
16 with Staff and ICL on January 4,2079, to address how the
l1 Company establishes the level of energy efflciency included
18 1n the IRP, which included a discussion of the cost-
19 effectj-veness tests used in resource planning. I wiII
20 provide summaries of those discussions in the sections that
2I follow.
22 Because the Commission specifically directed the
addressed and considered the23Company to report on
i- s sue s , the Company' s Compliance Report is limited to
25 reporting on EEAG's consideration and feedback on each of
ASCHENBRENNER, DIRECT
Idaho Power Company
how EEAG
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the issues.4
Company also
the resource
As I describe later in my testimony, the
attempted to reach resoluti-on by addressing
planning-specific topics directly with the
IRPAC.
O. How did EEAG specifically address and consider
each of the concerns or recommendations raised by parties
in their comments?
A As outlined in the Compliance
Company used the following process, on each
to facllltate discussj-on with the EEAG: (1)
to allevlate the concern
Report, the
of the topj-cs,
introduced the
issue , (2)described Idaho Power's exlsting process and
the Company's posj-tion or a recommendationpresented
lntended raised, and (3) lnitiated
from the EEAG. Thea discussion to solicit feedback
Compliance Report provides a summary of this process for
each of the issues and includes the status of each issue.
O. Did this process result in the resoluti-on of
the issues raised by parties 1n the 20L1 Prudence Case?
A. In the Company's opinion, generally yes. Some
of the issues were quickly resolved or cl-arified - examples
of these include Issue Nos. L,2,3, and 7 (Empowered
Community surveys, attic lnsulation, cohorts, and micro-
a In its Compliance Report, the Company incl-uded a summary of a
discussion it had with Staff after the January 23, 2019, EEAG meeting
rel-ated to lssue No. 5 where Staff cfarified j-ts specific concerns
raised j-n the 2017 Prudence Case that were not fulJ-y understood by the
Company during the EEAG meetings.
ASCHENBRENNER, DIRECT
Idaho Power Company
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1 targeting marketing).s The EEAG determined that other
2 topics wiII require additj-onal discussion and consideration
3 at future meetings examples of these include Issue Nos.
4 5, 6, 17, and L2 (evaluatlon schedule, My Account, energy
5 savings strategies, EISA savings).4 On Issue Nos. 4 and 10
6 (small- business options, Home Improvement Program), the
7 Company committed to taking feedback received at the
8 meetings into consideration and developing recommendations
9 to bring back to the EEAG at a future meeting.T
10 Overall, oD each of the topics lj-sted, the EEAG made
11 several- recommendations for the Company's consideration and
72 the Company has agreed to modify its approach based on that
13 feedback. A11 the issues l-isted above are examples of the
L4 types of issues addressed by EEAG on an ongoing basis and
15 the approach used aligns with the Company's commitment
76 stated in the 20L1 Prudence Case:
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While the Company and parties may notfu11y agree 1n al-1 aspects of program
management, Idaho Power is committed tocontinuing to work with the EEAG tolmprove program implementati-on,
marketing, and pursult of new energyefficlency opportunities. e
Compliance Report al 2-4, and 9.
Compliance Report at 6-8, and 14.
Compliance Report at 5 and 1,2-73.
Idaho Power Company's Reply Comments at 11.
ASCHENBRENNER, DIRECT
Idaho Power Company
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Whil-e the Company may have addressed the immediate
concern or reconrmendation in the EEAG meetings referenced,
it is not the Company's position that those topics are
necessarily resolved in perpetuity. Eor the most part,
EEAG concluded that program and marketing speciflc
recommendations as addressed in party comments may need to
be revisited in the future and the Company committed to
continue to address the topics.
O. How did the Company address the last two
issues, Issue Nos. 8 and 9 (demand response and UCT)?
A. Issue No. 8 was raised by Staff, recommending
the Company "rigorously examine the potentj-a1 for expanded
demand response 1n its 201,9 IRP."e Because this issue is
specifically related to long-term resource plannJ-ng, the
Company initially discussed this issue with the IRPAC and
summarized the status of those discussions and invi-ted
additional- feedback from EEAG. In the following sections I
18 will address how the Company planned
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and what modifications have
for demand response in
been contemplated inpast IRPs
the 2079 IRP, based on feedback received from the IRPAC.
27 The last issue, Issue No. 9 (UCT) was raised by ICL
22 and was summarized by the Commission as recommending the
23 Company be dj-rected to "apply the UCT, not the TRC, as the
e Case No. 1PC-E-18-03, Staff's Comments at 7
ASCHENBRENNER, DIRECT
Idaho Power Company
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1 best measure of the costs and benefits of energy efficiency
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programs as a resource."ro This topic has been raised at
IRPAC meetings and has been discussed with Staff and ICL in
discussions outside of the IRPAC, dS I mentioned before.
The Company believes it is not in the best interest of its
customers, or the long-term resource-planning process, to
change how it determines cost-effectiveness of energy
B effici-ency for resource planning. The remalnder of my
9 testimony will focus on the EE Program Life-Cyc1e at ldaho
10 Power, including discussion regarding how DSM measures are
11 included in the IRP. I will also differentiate between the
72 approprlate test for resource planning, and reliance on
13 secondary tests to assess program continuation or cost-
14 effectiveness.
15 o Do you believe the Company complied wlth the
76 Commission's order to "address these issues, and others
71 that stakehol-ders may ralse, dt the next round of EEAG
18 meet ings 2 ",,
79 Yes.
20 II. ENERGY EFFICIENCY PROGRAM LIFE-CYCLE
27 O Please provide an overview of the EE Program
22 Life-Cycle at Idaho Power.
10 Case No. IPC-E-18-03, Order No. 34141 at 6
11 Commission order No. 34L4L at 6.
ASCHENBRENNER, DIRECT
Idaho Power Company
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A. The amount of economj-c (al-so referred to as
cost-effective) and achievabl-e energy efficlency available,
as weIl as identifj-ed supply-side resources necessary to
meet future customer demands is developed in the IRP. As
depicted in Figure No. L, the Company relies on the IRPAC
as the advisory body that provides input to inform
resource-planning decisions .
Figure No. 1: Long-ter:rr Resource PJ.anning.
IRP lnputs:. Load Forecast. Gas Forecast. EE PotentialStudy. Supply-side Resource
Cost Assumptions. DR Availability
IRP Resource
Portfolio EE Targets
IRPAC
Program Design
&
lmplementation
EEAG
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Energy Efflclency program implementation and
marketj-ng occurs outsj-de of the IRP and is prlmarily J-ed by
Idaho Power's Customer Rel-ations and Energy Efflclency
("CR&EE") group, with input from several- sources including
the Company's EEAG, regional forums, and industry
associ-ations. As depicted in Figure No. 2, the Company
rel-ies on the EEAG as the advisory body that provides input
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ASCHENBRENNER, DIRECT
Idaho Power Company
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1 Figrure No. 2: Prog'ra'n Implenentation, Marketing, and
2 Evaluation.
Program lmplementation &
Modifications:
' EEAG lnput
' Regional Technical Forum (RTF)
' Third-PartyResources. Regional Utility Benchmarks
Post-year Results:
' Actual Savings
' Cost Effectiveness
' Evaluations &
Modifications from
Evaluations
Commission
Prudence Review
and Determination
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Energy Efficiency Advisory Group Evaluation of Program Performance
Lastly, the Company performs an annual
retrospective evaluatlon of program performance and cost-
effectlveness. This lnforms the Company of any adjustments
that may be needed. Ultimately, the Company must
demonstrate to the Commission that ldaho Power's actions
resul-ted in the prudent use of customer funds to acquire
energy efficiency.
III. DEMATiID.SIDE MA}IAGEMENT IN THE INTEGRATED RESOI'RCE PI.A}I
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O. What is the purpose of the IRP?
A. Idaho Power's IRP exami-nes the demand for
energy over the next 20 years and ldentifies the l-east-
cost, least-risk way to meet that demand for the Company's
customers.
O. What are the goals of the IRP?
A. Idaho Power's IRP has four primary goals: (1)
identify sufficient resources to reliably serve customer
demand over the 2)-year planning period, (2) ensure the
selected resource portfolio ba1ances cost, risk, and
ASCHENBRENNER, D]RECT
Idaho Power Company
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environmental concerns, (3) give equal and bal-anced
treatment to supply-side resources, demand-side measures,
and transmission resources, and (4) invol-ve the public in
the planning process in a meaningful way.
O. Are demand-side measures considered as a
resource wi-thin the IRP?
A.
demand-side
identifying
fdaho Power
In the 2011
Yes. As indicated by the third goal above,
Power whenmeasures are considered by
resources to meet customer
Idaho
10 often refers to DSM as a resource of
demands.In fact,
choice.
11 IRP,
12 demand response
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energy efficlency savings
was included in the IRP as
and existing
a committed
resource. Energy efficiency resources were the flrst
sel-ected resources - no supply-slde generation resource was
considered as part of Idaho Power's plan until all future
cost-effectlve, achievable energy efficj-ency potential- was
accounted for and credited against future loads. AIso, in
the 20L1 IRP each Boardman to Hemingway Transmission Line
Project ("B2H") alternative portfolio included an
additional- 50 megawatts ('MW") of demand response split in
25 MW increments in 2027 and 2026.
A. Energy Efficiency in the Integrated Resource P].an
23 O. How was the amount of energy efficiency
24 included in the 2071 IRP identified and mode]ed?
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ASCHENBRENNER, DIRECT
Idaho Power Company
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A. The planning case
as a resource was determined by
who identifies current and known
level of energy effi-ciency
a third-party consultant,
future efficient
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technol-ogies and measures and then identifies the total
potential in the Company's service area independent of
existing or planned programs already in the Company's
energy efficiency portfolio. The result of the study is
often referred to as "the potential studyr " and the amount
of energy efficiency identified in the potential study is
decremented from the Company's J-ong-term load forecast.
A11 energy efficiency ldentified by the potential study and
included in the IRP forecast has been screened for cost-
effectiveness. 12
O. What f eedback has t.he Company received
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1,6 A. In the 20!1 IRP, Commission Staff recommended
11 the Company adopt an al-ternative approach to modeling the
1B energy efflciency potential.t: While the Company believes
19 its previously utilized method for lncluding energy
20 efficiency potential- in 1ts IRP was reasonable, it
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12 Cost-effectiveness analyses of DSM forecasts for the 2017 lRP
are presented in more detail in Appendix C - Technical Appendix of the
IRP
(https z / / docs. idahopower. com/pd f s /About Us / PlanninqEorFuture /irplAppendi
xC Tech.pdf ).
13 Case No. IPC-E-17-11, Staff's Comments at 9-10.
ASCHENBRENNER, DIRECT
Idaho Power Company
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discussed alternate modeling approaches with the IRPAC and
preparation for the 2019 IRP.Staff, separately in
The Company first presented its plan for modeling
energy efficiency in
IRPAC meeting. After
the 2079 IRP at the December 13, 20L8,
that meetlng, the
Cl-ub on December
Company met with
Staff, ICL, and Sierra 79, 2018, and again
wi-th Staff and ICL on
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the Company's
potential in
IRP. Parties
plan for
January 4,
including
the portfolios to be
were interested in the
2019, to further discuss
energy efficiency
considered in the 2019
Company pursuing
of energy efficiency11 whether it could identify "bund1es"
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size. These
on levelized cost
bundles could then
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14 be modeled as resource options within
("AURORA"), the Company' s
the AURORA electrlc
tool for modeling
subsequent dispatch
hori-zon. This method
process used for
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1B was intended to more closeJ-y mirror the
19 supply-side resources model-ed in AURORA.
20 0. Does Idaho Power anticipate any changes to how
2I it will sel-ect energy efficiency in its 20L9 IRP?
22 A. Yes. For the 2019 IRP the Company is
23 attempting a new methodology for the inclusion of
24 additional energy efflciency in the IRP modeling. Idaho
25 Power contracted with its third-party potential study
ASCHENBRENNER, D]RECT
Idaho Power Company
1 contractor to create 11 bundles of energy efficiency as
2 mentioned above. The Company has determined that the amount
3 of energy efficiency in the seven Iowest cost bundles were
4 roughly equival-ent to the energy efficiency included
5 (decremented) from the Company's long-term load forecast.
6 However, based on feedback received from the IRPAC, as well
7 as additional- feedback received through discussions with
8 Staff and ICL, in the 2079 IRP the Company has included the
9 remaining four higher-cost bundles as additional selections
10 of energy efficiency for AURORA to select. The four
11 additional bundl-es of energy efficiency are incl-uded as
12 resource options for AURORA to evaluate in the IRP's long-
13 term capacity expansion modeling.
14 B. Denand Response in the Integrated Resource PJ.an
15 O. How did the Company evaluate the need for
L6 demand response in its 2071 IRP?
77 A. For the 2017 IRP, the Company focused on
18 analyzing the potential for its demand response programs to
19 expand with the IRP's assumed growth in customers. The
20 Company's analysis indicated that demand response programs
2L had potential to expand by about 5 MW per year, or 25 MW
22 over the course of a five-year period. In the 20L1 IRP
23 each B2H alternative portfol-io included an additional 50 MW
24 of demand response split in 25 MW increments in 202L and
25 2026. The achievement of this additional- 50 MW was
ASCHENBRENNER, DIRECT
Tdaho Power Company
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reasonable and consistent wlth the role of demand response
as a cost-effective capacity resource available to shift
peak loadlng for a finite number of hours.
O. What feedback has the Company received
regarding how it has model-ed demand response in the IRP?
A. While Commission Staff acknowledged the
Company's responsiveness to its suggestions regarding
demand response fil-ed in the Company's 2071 IRP Case,14 in
the Company's 2071 Prudence Case Commission Staff indicated
10 concern that "demand response has
alongside, supply-side
been considered after,
options for future
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capacity deflcits"ls which l-ed Staff to recommend that the
Company: "rigorously examine the potential for expended
demand response in its 2019 fRP." Issue No. B.
The Company presented its recommendation for
modeling demand response in the 201,9 fRP at the January 10,
20L9 IRPAC meeting. The Company's recommendation was to
include among the sel-ectabl-e resource options additional
demand response resource equal to 5 MW per year.
Subsequently, the Company presented an abbreviated
version of the presentation provided to the IRPAC to the
1a Case No. IPC-E-17-11, Staff's Comments at 12.
1s Staff's Comments at 7.
ASCHENBRENNER, D]RECT
Idaho Power Company
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EEAG at the January 23, 2019, meeting.l0 fdaho Power
informed the EEAG that it woul-d continue to examine the
need for addltional demand response in the context of the
2079 IRP and committed to report back to the EEAG when that
analysis was complete.
O. Does Idaho Power anticipate any changes to how
it will determine the amount of demand response included in
its 2019 IRP?
Yes. Based in part
the
on feedback received fromA
10 the f RPAC,lr for
demand response
the 2079 IRP,Company plans to make
11 resources availabl-e for selection in AURORA
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with a maximum of 50 MW of new capacity available for
selection.
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15 C. Cost-effectiveness in Resource Planning
16 O. Are there different measurements of cost-
l1 effectiveness util-ized for screening energy efficiency
18 potential in a utility's planning process?
79 A. Yes, there are several- tests available and
20 refied upon to differing degrees for measuring cost-
2I effectiveness for long-term resource plannlng. Most
22 jurisdictj-ons, l-ike Idaho Power, rely on the TRC test
23 perspective, while a small number of jurisdictions rely on
16 Compliance Report at 10.
1i IRPAC discussed DR modeling at its January 10, 2019, meeting.
ASCHENBRENNER, DIRECT
Idaho Power Company
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1 one of two other perspectives.te Mr. Eckman's direct
2 testimony presents additional detail- and support for these
3 statements.
4 Q. Why does Idaho Power rely on the TRC test for
5 resource planning?
6 A. The Company's primary focus in its IRP is to
7 select resources that wil-l- resul-t in l-ower overall energy
B costs across its system while ensuring continued
9 refiability. As noted in Mr. Eckman's testimony, the TRC
10 test is one of two testsle that are designed to ascertain
11 whether an investment is economically justified when all
L2 its costs and benefits are inc1uded - that is, an
13 investment must be cost-effective for the jurisdiction as a
L4 whole, which inc1udes the participatlng customer.
15 O. What would be the consequence of using the UCT
16 as the primary test perspective in long-term resource
Ll plannlng?
18 A. As also stated by Mr. Eckman, by ignoring what
19 participating customers spend to procure savings there is a
20 risk of over-allocating money to the purchasing of electric
2L
18 Eckman DI at 9-10
1e Eckman DI aL 72l. The "TRC test shoul-d be used for utiJ-ity
resource planning, unless a jurj-sdiction's energy poJ-icy goals dictatethe consi-deratlon of broader societal goals, such as the environmental
impacts of CO2 emissions or economic devel-opment and job creation. In
those cases, a more inclusive test, such as the SCT would be
appropriate. "
ASCHENBRENNER, DIRECT
ldaho Power Company
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energy services in a uti-1ity's jurisdiction2o said another
wdy, relying on an lncomplete measurement of the cost to
procure energy efficiency will result in uneconomic
resource acquisition and higher overall costs for Idaho
Power customers.
The Company agrees with each of the reasons
articul-ated by Mr. Eckman for why a utility should rely on
the TRC test for resource planning versus relying on the
UCT. It (1) avoids potential double-counting the val-ue of
energy savings, (2) directs j-nvestment toward measures that
optimize benefits for the utiJ-ity and its customers, (3)
avoids promoting measures that may impose non-electricity
costs on others, (4) al-l-ows consideration of measures with
quantifiable non-electricity benefits, and (5) reduces
Iikel-ihood of overestimating achievable cost-effective
energy efficiency potentia1.21
IV. PROGRAII IMPLEMENTATTON AND !{ARKETING
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18 O. Does the potential study developed in the IRP
79 determine what programs will- be offered by Idaho Power?
20 A. No. The primary purpose of the potential
27 study is to determine the long-term resource potential- for
22 inclusion in the IRP. While it is not specifically
20 Eckman DI at 14.
21 Eckman DI at 13-18.
ASCHENBRENNER, DIRECT
Idaho Power Company
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designed as a program planning tool, Idaho Power does use
the study to set its energy efficiency targets and as a
guide to identify possible new measures that 1t might be
ASCHENBRENNER, D]RECT
Idaho Power Company
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able to incorporate into its portfofio.
O Is Idaho Power limited by the targets set in
the IRP?
No. Idaho Power pursues aII cost-effective
B energy efficiency, regardless of targets established in the
9 IRP. The targets outlined in the IRP are simply lntended
10 to represent the amount of energy efficiency that can
11 reasonably be relied upon to meet future customer demands,
72 but as demonstrated by the annual incremental energy
13 efficiency savings compared with the IRP targets for 2002
L4 through 20L8 in Mr. Goralski's testimony, those targets
15 have not fimited the Company's efforts to pursue additional-
L6 cost-effective energy efficiency through program
L1 i-mplementation.22
18 O. How does Idaho Power determine what energy
L9 efficiency measures and programs will be offered within its
20 service area?
2L A. As previously depicted in Eigure No. 2, Idaho
22 Power's CR&EE group is primarily responsible for program
23 planning and marketing necessary to develop a robust
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1 portfol-io of energy efficiency measures available for Idaho
2 Power's residential, commerclal and industrial-, and
3 j-rrigation customers. CR&EE staff rely on several sources
4 to develop programs, including input from the EEAG,
5 regional sources like the Regional Technical Forum, peer
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utilities, and nati-ona1 sources incJ-uding E-Source and
nati-onaI conferences.
Throughout the process from program lmplementation
and marketing through eval-uation of prior year expenditures
10 the Company relies on input from the EEAG as one
11 important consideration before implementing new, removing,
72 or modifyi-ng measures or programs.
13 A. Cost-Effectiveness in Program Implementatio4
74 How does the Company use cost-effectiveness
15 for program implementation?
76 A When establishing a new program, the Company
71 eval-uates the cost-effectiveness of that program from three
18 primary perspectives: the TRC test, the UCT, and the
19 Participant Cost Test (*PCT") perspective. Figure No. 3
summarizes each of the primary cost-effectiveness20
2l perspectives that Idaho Power considers when designing and
22 implementing programs for its customers.
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Idaho Power Company
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1 Figure No. 3: Cost-Effectiveness Perspective Summary
O. Will the Company implement a new program if it
is not cost-effective from each of the perspectlves?
A. No.
O. Please explain.
A. For the same reasons the Company rel-ies on the
TRC test to make resource planning decisions, the Company
bel-ieves it is prudent to consider al-I the tests prior to
deciding on offering a new program. The Company believes
that this process ensures a DSM portfolio that j-s not onJ-y
good for the utility (as evidenced by the UCT perspective),
but one that 1s good for al-l- customers, both participating
and non-participating (as evidenced by the TRC test and PCT
perspectives). The Company bel-ieves it is in the best
interest of its customers to reconrmend offerings that will
enabl-e customers to recover their costs of investing in
energy efficiency products or measures.
O. Does the Company believe this is consistent
with past Commission orders 1n Idaho Power dockets?
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ASCHENBRENNER, DIRECT
Idaho Power Company
Test
Utility Cost
Tota! Resource
Cost
Participant
Cost
The utility system
The utility system
plus participating
customers
Customers who
participate in an
efficiency program
Question Answered
Will utility system costs
be reduced?
Will utility system costs
plus program
participants' costs be
reduced?
Will program
participants' costs be
reduced?
lncludes the costs and benefits
experienced by the utility system
lncludes the costs and benefits
experienced by the utility system,
plus costs and benefits to program
participants
lncludes the costs and benefits
experienced by the customers in
the program
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A Yes. f n Order No. 33365, the Commi-ssion
stated:
The TRC, UCT, and PCT evaluate EE
programs from different perspectives. We
believe each perspective can help inform
the Commisslon, the utility, and
stakeholders about a particular
program's effectiveness. We thus find it
reasonable for the Company to continue
screening potenti-a1 programs using each
test as a guideline, and to advise us on
how the Company's programs fare under
each test.23
B. Post-implqe
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15 for Prudence Determinations
76 O. How does the Company rely on the results of
11 the cost-effectiveness tests when seeking a prudence
18 determination from the Commi-ssion?
L9 A. The cost-effectiveness results of a program or
20 measure are key factors the Company presents to the
2L Commission in its request for a prudence determination.
22 The Company presents to the Commissi-on program cost-
23 effectiveness from the TRC test, UCT, Ratepayer Impact
24 Measure test, and the PCT perspectives.
25 O. Is the Company's position that a test must
26 pass aIl cost-effectiveness tests to continue offering?
21 A. No. While the Company endeavors to offer its
28 customers a portfolio of programs that is cost-effective
29 from al-I perspectives, there have been situations where the
23 Case No. IPC-E-15-06, Order No. 33365 at 9.
ASCHENBRENNER, DIRECT
Idaho Power Company
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Company has
that may not
Mr. Goralski
this current
asked for a prudence determinatj-on on programs
pass one or multiple cost-effectiveness tests.
describes four i-nstances of this occurring in
case the Company is asking for a prudence
on (1) the Weatherization Assistance for
10
determi-nation
Qual-ified Customers ("WAQC") program, (2) the
Weatherization Solutions for Eligible Customers
("Solutions") program, (3) the Heating and Cooling
Efficiency program, and (4) the Shade Tree Project. The
WAQC and Solutions programs and the Shade Tree Project
fail-ed both the TRC test and the UCT for the 2078 program
year. The Heating and CooJ-ing C Efficiency program fails
the TRC test, but it does pass both the UCT and the PCT.
O. Why is it appropriate to rely on one test
so1e1y for long-term resource planning, but make decisions
to continue a program based on different criterj-a?
A. As discussed before, the focus of identifying
the amount of energy efficlency to include in the IRP that
results 1n a least-cost, l-east-risk plan for utility
planning purposes is distinctly different from when a
utiJ-j-ty must make determinations on program contj-nuation
based on current performance. By relying on weighing the
results of multiple tests when making decj-sions regarding
program continuation, the Company can assure that the
offerings are what is in the best interest of customers.
ASCHENBRENNER, D]RECT
Idaho Power Company
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dockets ?
stated:
Does the Company believe its practice is
in Idaho Powerconsj-stent with past Commissj-on orders
Yes. fn Order No. 33365, the Commission
When the Company ultimately seeks torecover its prudent investment in such
programs, however, we believe the Company
may (but need not exclusively) emphasizethe UCT and that test's focus on
Company-control-led benefits and coststo argue whether the programs were cost-effective. As always, the Company
uJ.timate1y must persuade us that its
progir€rm investments rrere prudent underthe tota1ity of the circumstances.24
I Have there been instances where
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79 has discontinued a measure or program because
the Company
of cost-
20 effectiveness?
22
A. Yes. A recent example of this was with the
Home Improvement Program, which the Company decided to end
in mid-2017 due to ongoing deterioration of the cost-
effectiveness of the program from the TRC test and the PCT.
In that case, the Company determined after a third
consecutive year of the program not passing either the TRC
or the PCT, it was in the best interest of customers, both
participating and non-participating, to end the program.
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24 Case No. 1PC-E-15-06, Order No. 33365 at 10 (emphasis added).
ASCHENBRENNER, DIRECT
Idaho Power Company
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V. CONCLUSION
Please summarize the Company's request in thiso.
proceeding.
A.
Commission
10
Idaho Power respectfuJ-Iy requests the
determine that (1) $40,772,164 of DSM expenses
incurred for the acquisition of demand-side resources were
prudently incurred, (2 ) the Company satisfied the
Commission's directives issued in Order No. 34L4L, and (3)
the Company should continue to rely on the TRC test
perspective when evaluating the amount of energy efficiency
included in long-term resource planning.
O. Does this concl-ude your testimony?
A. Yes, it does.
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ASCHENBRENNER, DIRECT
Idaho Power Company
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ATTESTATION OF TESTIMONY
STATE OE IDAHO
SS.
County of Ada
l, Connie G. Aschenbrenner, havi-ng been duly sworn
to testify truthfully, and based upon my personal
knowledge, state the following:
I am employed by Idaho Power Company as the Senior
Manager of Rate Design in the Regulatory Affairs Department
and am competent to be a wj-tness j-n this proceeding.
I decl-are under penalty of perjury of the laws of
the state of Idaho that the foregoing pre-filed testimony
and exhibits are true and correct to the best of my
information and belief .
DATED this 15th day of March 2079.
nrl\-{-z\\i
Connie G. Aschenbrenner
SUBSCRIBED AND SWORN to before me this 15th day of
March 2019.
o
No a ry Publ
Residing at
My commission expires:L2/20/2020
ASCHENBRENNER, DIRECT
Idaho Power Company
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n\.( /u,l,--,
for Idaho
oise Idaho
KIMBERLY K. TOWELL
coMMlssloN #16958
NOTARY PUBLIC
STATE OF IDAHO
1a
Oil^-,
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E -19-11
IDAHO POWER COMPANY
ASCHENBRENNER, DI
TESTIMONY
EXHIBIT NO. 1
EXHIBIT NO. 1
REPORT IN COMPLIANCE WITH COMMISSION ORDER NO. 34141
BACKGROUND
On March 15, 2018, ldaho Power Company ("ldaho Powe/' or "Company") filed its
Application for Determination of 2017 Demand-Side Management Expenses as Prudently
lncurred, Case No. IPC-E-18-03, with the ldaho Public Utility Commission ("Commission")
seeking a prudence determination on $44.1million of demand-side management ('DSM')
expenses. On July 19,2018, Commission Staff, and the ldaho Conservation League
('lCL') (collectively "the Parties") filed comments. ln comments, the Parties both
recommended the Commission find the Company's $44.1 million of 2017 DSM expenses
prudent but made several recommendations regarding different elements of the
Company's overall DSM programs.
On September 1 1 , 2018, the Commission issued Order No. 34141 , where it determined
$44.1 million had been prudently incurred. ln its Order, the Commission also stated on
page 6.
We find that Staff and ICL's recommendations - and the
Company's replies are appropriate for the EEAG's
consideration. We reiterate that the EEAG plays a valuable
role in designing effective DSM measures. For this reason,
we direct the Company to address these issues, and others
that stakeholders may raise, at the next round of EEAG
meetings. We further order that, in the 2018 DSM Report and
comments, the Company, Staff, and ICL each report on how
the EEAG addressed and considered each of the above-listed
recommendations.
ldaho Power convened the Energy Efficiency Advisory Group ("EEAG') on both October
30, 2018, and January 23,2019, dedicating most of these meetings to discussion of the
issues identified in Order No. 34141. The first six issues were discussed in the October
30, 2018, meeting, with the remaining six being discussed during the January 23, 2019,
meeting.
REPORT FORMAT
The order set forth 13 recommendations, but for purposes of reporting, the one
recommendation that was made by both Staff and ICL has been combined as a single
issue/recommendation resulting in discussion of 12 recommendations. The report is
organized as follows for each recommendation:
RECOMMENDATION:
A. ldaho Power's Presentation (of the issue and its position to the EEAG)
B. EEAG's Discussion (and consideration of the issue)
C. Resolution.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 1 of 14
PARTY RECOMMENDATIONS
RECOMMENDATION NO. 1: Not over-emphasize the resulfs of its empowered
community surueys when designing programs for all of its customers.l
A. ldaho Power's Presentation
At the October 30, 2018, EEAG meeting, ldaho Power presented the background and
function of the Empowered Community, an online panel made up of residential
customers. ldaho Power established this community because it is a low-cost
opportunity to receive feedback from customers quickly. lt is not the sole source of
customer feedback and is not intended to replace ldaho Power's regular surveys but
used as an overall company resource. Some surveys are used for energy efficiency
topics and some are used for other Company issues.
Empowered Community participation is reviewed annually, and members who have
not been active participants are given one last chance to participate to remain part of
the pool and removed if they choose to not participate. Empowered Community
members also have the option to opt out of a survey when they receive it.
The Company provided examples of the types of questions asked in a survey for
energy efficiency.
ldaho Power does not believe it has over-emphasized the information gathered
through the Empowered Community but acknowledged it could improve
communicating with the EEAG about how it uses the feedback received from the
Empowered Communi$.
B. EEAG's Discussion
During the EEAG discussion, members asked ldaho Power several questions about
the composition of the panel, how it is used, if it is used solely to make energy
efficiency program decisions, or if was a source of information for the Company to
make "no-go" decisions on program design or marketing. Some members did not
think the Company had over-emphasized the results of the Empowered Community.
One EEAG member suggested that ldaho Power consult Boise State University PhD
students to figure out how to motivate customer responsiveness to surveys. Another
member believed the Company should be more clear in the future on how it uses the
Empowered Community and what other data sources it uses to make program design
decisions.
C. Resolution
To limit future misunderstandings, ldaho Power and the EEAG agreed that the
Company should provide more information to the EEAG about what sources of
information it uses to recommend program design, design changes, or marketing.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 2 oi 14
1 Case No. IPC-E-18-03, Staff's Comments at 14
RECOMMENDATION NO. 2:
program.2
lnclude attic insulation in the multifamily housing
A. ldaho Power's Presentation
At the October 30, 2018, EEAG meeting, ldaho Power discussed the current offerings
and qualifications for the Multifamily Energy Savings Program. After reviewing the
recommendation made by lCL, the Company evaluated adding windows, wall
insulation, attic insulation, and floor insulation to the program. Two new measure
additions combined with existing measures passed cost-effectiveness with certain
conditions: attic insulation and floor insulation.
While there may not be significant participation for the attic insulation measure
because multifamily buildings with an attic and little or no attic insulation are not
common, ldaho Power recommended adding attic insulation to the program. ldaho
Power did not recommend adding floor insulation because the installation of floor
insulation requires a more invasive test (drilling holes in floors) and chances of a
building meeting the criteria to qualify are limited.
B. EEAG's Discussion
The EEAG had several questions about the costs, qualifications, and why attic
insulation was not initially included in the program as a cost-effective measure. The
Company explained that it initially believed including a measure for attic insulation
may have caused participant confusion because all other measures in the program
are available to all participants as direct install; attic installation would only be available
under limited conditions and would have been difficult to market when the program
was a pilot. One EEAG member asked which combinations passed the Utili$ Cost
Test ("UCT") for cost-effectiveness. ldaho Power explained that because this program
was a direct install program, the UCT and the Total Resource Cost ('TRC') test results
were about the same. One member also suggested the Company consider adding
door sweeps and weather stripping (if determined cost-effective) as measures to this
program.
C. Resolution
The EEAG agreed with ldaho Power's recommendation to add attic insulation as a
measure to the Multifamily Energy Savings Program, and that change was
implemented immediately following the meeting. ln response to a suggestion
presented at the meeting, ldaho Power is also investigating the viability and cost-
effectiveness of adding door sweeps and weather stripping to the program; if found to
be cost-effective, ldaho Power will add those measures to the program in 2019.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 3 of 14
2 Case No. IPC-E-18-03, ICL's Comments at 3.
RECOMMENDATIOTV TVO. 3: Expand cohort group partnerships with municipalities
and school districts.s
A. Idaho Power's Presentation
At the October 30,2018, EEAG meeting, ldaho Power explained the cohort programs
available to commercial and industrial ('C&l') customers across its service area and
how ldaho Power has continued or expanded each of the cohorts. The cohort program
groups participants by similar types of facilities for non-competing customers who all
have kilowatt savings potential. Generally, there are three cohort programs available
for customers: Continuous Energy lmprovement Cohort for Schools, Wastewater
Energy Efficiency Cohort, and Municipal Water Supply Optimization Cohort
('MWSOC',).
B. EEAG's Discussion
There was discussion regarding the cost of cohort programs to the Company, how to
determine cost-effectiveness, and several EEAG members commented on the
success of the cohort model. There were questions about the Company's plans for
future marketing of its existing water cohort and suggestions regarding the expansion
of the cohort model into other industries such as data centers or correctional facilities.
The Company explained that there is not yet an established industry standard for
determining cost-effectiveness of the cohort programs, and that ldaho Power is
presently engaged with other utilities and the Regional Technical Forum ("RTF") to
establish protocol around how to determine cost-effectiveness. The existing 17
participants in the MWSOC comprise most large cities in ldaho, and one EEAG
member stated that they believe ldaho Power had engaged the largest water suppliers
that serve most people in the Company's service area. Several EEAG members
stated that they believe the cohort model is a good program model that provides great
customer service. ldaho Power shared that one of the reasons its cohort programs
have been successful is that they have engaged non-competitive, primarily municipal,
organizations to engage in peer-to-peer learning and sharing.
C. Resolution
ln general, the EEAG encouraged ldaho Power to continue with the cohort model,
providing they are cost-effective. ldaho Power will continue to seek opportunities to
engage additional cohort participants, and work alongside other utilities and the RTF
to refine cost-effectiveness evaluation.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 4 of 14
3 ICL's Comments at 4.
RECOMMENDATION NO.4: Explore small business program design options.4
A. ldaho Power's Presentation
At the October 30, 2018, EEAG meeting, ldaho Power discussed the existing C&l
program that small business customers participate in, the C&l Efficiency program
which offers efficiency incentives for New Construction, Retrofits, and Custom projects
for all sizes of business customers. The Company explained basic details of the
current C&l program and showed current program participation by customer size. ln
addition to the current C&l program, ldaho Power also recently launched Energy-
savings Kits for Businesses, which were designed with its smallest commercial
customers in mind.
ldaho Power also stated the Company is initiating a request for proposal ("RFP") for
a small business direct install program to be made by January 30, 2019. This will
enable the Company to determine cost-effectiveness and potential program structure
of a new small business program.
B. EEAG's Discussion
The EEAG discussed and had questions regarding the RFP and when the responses
would be due, the differences of a building owner versus building tenant, and the
challenges to market to each type of customer. The Company stated that it expects
responses to the RFP in March and that there are several third-party contractors that
conduct direct install programs. The Company also described current and historical
methods it has marketed to small businesses including the use of Customer Solutions
Advisors to directly call small business customers to encourage energy efficiency.
There was discussion about "split incentives," when the tenant does not own the
building and may be reluctant to invest in energy efficiency and the fact that a direct
install program would lessen this barrier.
C. Resolution
ldaho Power believes a small business direct install program is worth exploring and
has initiated an RFP to determine the costs of providing such a program. EEAG
members expressed support that ldaho Power is looking into whether it can provide a
direct install program for small business customers.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 5 of 14
a Staff's Comments at 11
RECOMMENDATION NO. 5: Consider a more frequent evaluation schedule and
follow the industry norm of two to three years for both impact and process
evaluations for each program.s
A. ldaho Power's Presentation
B. EEAG's Discussion
The EEAG had questions regarding the Company's current contracting process
(annual submittal of RFPs and issuance of a single-year contract), and some
members felt that there may be some economies of scale gained by issuing multi-year
contracts. There was also discussion concerning how evaluations currently impact
program cost-effectiveness and whether modifications to that should be considered.
Suggestions for consideration included. amortizing evaluation expenses over multiple
years and determining the cost-effectiveness of a program with and without the cost
of the evaluation included. The EEAG also discussed industry standards for
evaluation frequency, and several members suggested that ldaho Power could
provide a forward-looking schedule for program evaluations.
C. Resolution
Based on feedback obtained at the October 30, 2018, EEAG meeting, ldaho Power
presented a proposal to the EEAG at the January 23,2019, meeting recommending
that it would develop a multi-year evaluation plan and proposed to contract with an
evaluation company for two years. Many EEAG members were appreciative and
encouraged a multi-year contract. A few EEAG members felt that the Company
should continue with a one-year contract.
The EEAG and ldaho Power aligned that the Company would continue with its
schedule of evaluations using industry standards as rationale for conducting
evaluations and would publish annually a two-year forward-looking plan for program
evaluation in the DSM Annual Report, Supplement 2. Evaluations. The Company also
committed to annually presenting the multi-year forward-looking plan to the EEAG to
solicit feedback on that plan. The Company determined it will continue to issue one-
year contracts with evaluators.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 6 of 14
5 Staff's Comments at 12
At the October 30, 2018, EEAG meeting, ldaho Power presented its current evaluation
strategy and goals, historic record of evaluations (dating back to 2010), a detailed
description of its 2017 evaluation activities, and its preliminary evaluation plan for
2019. The Company explained the primary types of evaluations it relies on, the timing
and schedule of those evaluations, and its method of contracting for evaluations. The
Company also stated it has generally conducted impact evaluations every three years
and process evaluations for relatively new programs or when a program has
significant changes.
The Company had an additional discussion with Staff via conference call regarding
this topic on February 27,2019, after Staff informed the Company that it had not fully
addressed Staffs concerns as presented in Staff's Comments in Case No. IPC-E-18-
03. During the call, the Company and Staff discussed in more detail the Company's
process for determining the frequency of impact evaluations. ln part, the Company
discussed that it uses available industry guidelines to determine the frequency and
rigor of impact evaluations. Programs that are large portfolio contributors and/or have
savings estimates that are more complex or more uncertain, are evaluated more often
and with more rigor. Programs that are small portfolio contributors and/or savings
have a high certainty, such as deemed savings from the RTF, and are evaluated less
often. The Company also clarified that by recommending the fonryard-looking multi-
year plan, it intended to use that as a discussion point with the EEAG so members,
including Staff, could provide feedback to help inform the timing of evaluations moving
forward. The Company committed to remaining open to future conversations
regarding the Company's evaluation methods and timing.
Exhibit No. 1
Case No. IPC-E-19-1 1
C. Aschenbrenner, IPC
Page 7 of 14
RECOMMENDATION NO. 6: Explore opportunities fo engage customers in energy
efficiency when they sign up for My Account.o
A. ldaho Power's Presentation
At the October 30, 2018, EEAG meeting, ldaho Power walked the EEAG through the
four-step process a customer takes when registering for My Account. The final step
in the registration process (asking if the customer wanted to receive information about
Company news and energy efficiency) was added to the process in 2017.
ldaho Power stated this additional step in the My Account sign up process is an
improvement to engage customers in energy efficiency when registering for My
account.
B. EEAG's Discussion
The EEAG asked questions about the Company's use of pop-ups, how-to videos, and
customized energy saving tips for customers. ldaho Power replied that currently, pop-
ups are related to high bill alerts but soon they will include energy efficiency
information. Some EEAG members expressed dislike or distrust of pop-ups on
websites. ldaho Power shared that the Company had received similar feedback of
customers disliking pop-ups, and committed that it will continue to consider customer
preferences when determining what notification methods are pursued. The Company
also shared that it had created a small social media series with a customer
representative sharing few examples of do-it-yourself energy efficiency tips.
C. Resolution
There was general agreement that a topic such as this will be one of ongoing
discussion between ldaho Power and the EEAG. Marketing tactics and
communication strategies will continue to evolve, and ldaho Power committed to
continuing to bring ideas and recommendations to the EEAG for consideration.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 8 of 14
6 Staff's Comments at 13.
RECOMMENDATION NO.7: Consider tailoring its marketing efforts to achieve the
micro-targeting proposed by the Company's evaluator.T
A. Idaho Power's Presentation
At the January 23, 2019, EEAG meeting, the Company explained the concept of
micro-targeting and discussed several examples of the Company's use of micro-
targeting in its marketing. Microtargeting is a marketing strategy that uses consumer
data and demographics to identify the interests of specific individuals, or very small
groups of like-minded individuals, and influence their thoughts or actions. An
important goal of a micro{argeting initiative is to know the target audience so wellthat
messages get delivered through the target's preferred communication channel.
ln a 2016 process evaluation of the Rebate Advantage program, the evaluator
recommended ldaho Power consider using micro-targeting in that program's
marketing to promote that program to manufactured home buyers who bypass dealers
and purchase online. Subsequent to receiving that recommendation, ldaho Power
conducted research about Rebate Advantage program participants and found that in
general, program participants have a lower overall adoption of technology, are more
likely to consume radio marketing, and are typically more rural than the average ldaho
Power customer. ldaho Power posed a question to the EEAG for consideration:
Should the Company accept the evaluator's proposal to micro-target, consider more
traditional methods better aligned with participant demographics, or conduct a hybrid
of the two methods?
B. EEAG's Discussion
The EEAG had several questions concerning the demographic data, how many
manufactured homes were purchased through the program, and which websites
customers use to purchase manufactured homes. ldaho Power shared that in 2018,
73 and 34 homes qualified for the program in ldaho and Oregon, respectively, and
that the Company did not have data to confirm which websites were used when
purchasing a manufactured home online. The EEAG had several suggestions related
to marketing the Rebate Advantage program, such as putting ads on the
manufactured home websites and using a hybrid approach with both geofencing and
search and display ads.
C. Resolution
Based on the feedback received from the EEAG, the Company will use a hybrid of
traditional methods and micro-targeting marketing methods for the Rebate Advantage
program in the future.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 9 of 14
7 Staff's Comments at 13
RECOMMENDATION NO. 8: Rigorously examine the potential for expanded
demand response in its 20191RP.8
A. Idaho Power's Presentation
ldaho Power believes that identifying the need for any supply-side or demand-side
resource, including consideration of expanding demand response ("DR"), is an
important topic that should be considered in the context of developing the Company's
lntegrated Resource Plan ("lRP"), with input from the members of the IRP Advisory
Committee ("IRPAC';.s
Notwithstanding, on January 23, 2019, the Company presented to the EEAG an
abbreviated presentation of the information that was presented at the January 10,
2019 meeting with the IRPAC. ldaho Power reviewed the Company's DR programs,
the purpose and benefits of DR, how ldaho Power ranks nationally in DR in relation to
peak load, and how the potential need for additional DR is evaluated. ldaho Power
discussed the analysis completed to date forthe 2019 lRP, and the analysis it still
plans to complete as part of the 2019 IRP process.
B. EEAG's Discussion
The EEAG asked several questions about the ditference between a customer's
individual demand and its relationship to the system demand. There were comments
regarding how DR can help system demand but does not lower (instead shifts to a
later time) a customer's monthly peak demand. Parties asked questions about how
electricity market prices compare to the cost of DR; the Company clarified that the two
are not closely related, with market prices being substantially less than what the
Company pays for DR. Another member voiced concern about the amount of
customer's funds that were used to fund ldaho Power's DR programs each year. One
member commented that ldaho Power should optimize dispatch times for the Flex
Peak and A/C Cool Credit programs in the same way the Company has for lrrigation
Peak Rewards. While optimization of dispatch is available for the lrrigation Peak
Rewards program due to the amount of capacity in the program, the other two
programs are smaller, less than 25 percent of the capacity of the lrrigation Peak
Rewards, and would be more difficult to split into four groups which overlap in the
same hour.
C. Resolution
The EEAG and ldaho Power aligned that the Company will rely on the IRP modeling
to determine if the Company needs additional DR in the 20-year planning period. The
Company committed to continue examining additional DR in the context of the 2019
IRP and committed to report back to the EEAG when that analysis is complete.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 10 of 14
I Staff's Comments at 7.
e Several EEAG members are also on the IRPAC.
RECOMMENDATION NO. 9: Apply the UCT, not the IRC, as fhe besf measure of
the cosfs and benefits of efficiency programs as a resource.lo
A. Idaho Power's Presentation
ldaho Power believes that identifying the need for any supply-side or demand-side
resource, including consideration of determining the amount of cost-effective energy
efficiency that can reasonably be relied upon, is an important topic that should be
considered in the context of developing the Company's lRP, with input from the
members of the IRPAC.
Notwithstanding, on January 23,2019, the Company discussed the issue with the
EEAG. The Company first provided the EEAG with an overview of cost-effectiveness
tests used for evaluating energy efficiency, describing what cost and benefit elements
were included in the UCT, the TRC test, and the Participant Cost Test ("PCT"). The
Company also displayed a diagram outlining the processes at ldaho Power where
cost-effectiveness of energy efficiency are considered: (1) to determine the amount of
economic and achievable cost-effective energy efficiency to the be included as a
resource in the Company's !RP (with inputfrom the IRPAC), and (2) to inform decision-
making as it relates to energy efficiency program administration and evaluation (with
input from the EEAG).
The Company informed the EEAG that discussions with the IRPAC on the issue were
not yet resolved and were ongoing. Generally, certain members of the IRPAC believe
the Company should rely on the UCT for planning purposes because those are the
costs that are ultimately included in rates paid for by the Company's customers. The
Company discussed its position, that for long-term resource planning purposes, the
Company should focus on obtaining the lowest cost resource when considering the
cost to all customers (which includes the participating customer costs). The Company
believes that relying on the TRC provides for an equal comparison between supply-
side and demand-side resources.
B. EEAG's Discussion
The EEAG asked several questions concerning the relationship between the IRP
planning and DSM administration and evaluation, the attributes of the cost-
effectiveness tests, why ldaho Power supports the TRC for resource planning, and
how the Company utilizes the other tests in making program continuation decisions.
C. Resolution
The Company committed to continuing the conversation with several key members of
the IRPAC and committed to reporting back to the EEAG the results of those
discussions.
10 Order No. 34141 at 6.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page11of14
RECOMMENDATION NO. 10: Reconsider the June 2017 discontinuation of the
Home lmprovement Programrr lboth Staff and ICL recommended this action butfor
purposes of reporting, the Company has combined as a single rbsue).
A. ldaho Power's Presentation
At the January 23,2019, EEAG meeting, the Company provided an overview of the
Home lmprovement Program, which was offered in some form from 2OOB to 2017
before being discontinued in 2017. The Home lmprovement Program included
incentives for attic insulation, floor insulation, and window replacement - the Company
showed how the program passed both the UCT and the TRC from 2008 until 2014,
when it initially did not pass the TRC; the TRC ratio continued to decline from 2015
until the program was discontinued in 2017, with a TRC ratio of 0.41 in the final year.
A TRC ratio of less than 1 indicates that the program is not cost-effective from the
TRC perspective.
The Company discussed how it reconsidered the discontinuation of the program and
shared results of the cost-effectiveness tests with the latest inputs (2017 IRP DSM
alternate costs), which resulted in a UCT of 1.67 and a TRC of 0.29. The Company
also presented the results of an analysis of some specific combinations of measures,
weather zones, and unique preconditions, to find a small number of measures that
may be cost-effective if reimplemented. The Company shared, however, that
managing a program with so few projects would cause the program to not be cost-
effective due to program administrative expense being spread across fewer savings.
The Company discussed how it relies on the results from all primary cost-effectiveness
tests (TRC, UCT, and PCT) and weighs other factors - including whether cost-
effectiveness is expected to increase, as well as benchmarking programs that other
utilities may offer - before making decisions about program continuation or
modification. While this has been ldaho Power's practice, these oversight decisions
and activities have not been documented in a manner that is clearly understood by
the EEAG or others external to ldaho Power. ldaho Power discussed its desire to
establish a framework that could be relied upon in the future and asked for feedback
from the EEAG on what factors should be considered for inclusion. ldaho Power
recommended that the Company bring a proposal outlining a clear set of criteria for
discontinuing programs to the next EEAG meeting for input and discussion.
B. EEAG's Discussion
The parties discussed the program options, cost-effectiveness, and whether ldaho
Power's presentation added any clarity to why the program had been discontinued in
its discussion at the current meeting. Most EEAG members felt that the Company
had provided more detail and background than previously provided as to why it
discontinued the Home lmprovement Program.
11 Staff's Comments at 11, ICL's Comments at 2
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 12 of 14
C. Resolution
The EEAG was supportive of the Company's plan to bring a proposal for discussion
at the May 2019 EEAG meeting. The proposal should give better visibility to cost-
effectiveness parameters and other factors that guide ldaho Power's decision-making
regarding program continuation decisions and will provide the Company's
recommended threshold of each cost-effectiveness test.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 13 of 14
RECOMMENDATION NO. 11: Work with the EEAG and other experts to devise
sfrafegies and tactics that lead to energy savings.l2
RECOMMENDATION NO. 12: Ensure that Energy lndependence Security Act
program savlngs remain healthy beyond 2020.13
A. ldaho Power's Presentation
Because these two topics are closely related, the Company combined the discussion
of both at the January 23, 2019, EEAG meeting. ldaho Power did not make a
presentation on these subjects, rather addressed them with the EEAG in a discussion
format. The Company did explain to the group that the Energy lndependence Security
Act ("EISA") was federal law that, along with other directives, requires more stringent
minimum energy efficiency standards for many types of lighting with the final
standards taking effect on January 1,2O2O. These standards will dramatically reduce
the potential programmatic energy savings for utility programs, especially in the
residential sector.
B. EEAG's Discussion
ldaho Power commented that although the EISA would reduce programmatic savings
for ldaho Power and other energy efficiency program administrators, the savings from
lighting standards would still be realized on the grid without utilities' intervention.
One member expressed an interest in ensuring there would still be opportunities for
residential customers to participate in energy efficiency programs after January 1,
2020. There was discussion around the constraints for various energy efficiency
programs and how the Company may address some of those constraints. One
member suggested that ldaho Power partner with other utilities to offer combined
energy savings. Another member suggested that ldaho Power work with the Energy
Trust of Oregon to garner ideas for potential savings after EISA takes effect. Some
members suggested online or mobile tools might attract younger people to be
interested in energy efficiency and that behavioral program savings might be the next
step in attaining energy savings for utilities. One member suggested that ldaho Power
should "think out of the box" on new ideas to provide energy savings opportunities for
its customers.
C. Resolution
ldaho Power committed to continuing to bring ideas to the EEAG for further discussion
- this would include addressing questions about existing barriers and possible
methods to move beyond these barriers. ldaho Power also requested that the EEAG
continue to bring ideas to the Company for consideration.
12 ICL's Comments at 4.
13 Staff's Comments at 12.
Exhibit No. 1
Case No. IPC-E-19-11
C. Aschenbrenner, IPC
Page 14 of 14