20190315Goralski Direct.pdf

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BEFORE THE IDAHO PUBL]C UTILITIES COMMISS]ON
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY EOR A
DETERMINATION OE 2O1B DEMAND_
SIDE MANAGEMENT EXPENSES AS
PRUDENTLY INCURRED.
CASE NO. IPC_E_L9_I1-
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
PAWEL P. GORALSKI
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O. Pl-ease state your name and business address.
A. My name is Pawel- P. Goral-ski. My business
address is L227 West Idaho Street, Boise, Idaho 83102.
O. By whom are you employed and in what capacity?
A. f am employed by Idaho Power Company ("Idaho
Power" or "Company") as a Regulatory Analyst in the
Regulatory Affairs Department.
O. Pl-ease describe your educational- background.
A. In May of 2001 , I received a Bachelor of
Administration degree 1n Finance from Boise State
Unlversity in Boise, Idaho. I have also attended "The
Basics: Practical Regulatory Training for the Electric
Industry, " an efectric util-ity ratemaking course offered
through the New Mexico State University's Center for Publ-ic
Utilities, "Electric Utility Fundamental-s and Insights, " an
electric utility course offered by Western Energy
Institute, and "Electric Utility System Operatioos," an
electric utility course offered through Professional-
Training Systems, Inc.
0. Please describe your work experience with
Idaho Power.
A fn 20L1, I was hired
Regulatory Affairs
as a Regulatory Analyst
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j-n the Company's
responsibilities
cost-of-service
include supporting
activities, supporting activities
Department. My primary
the Company's class
GORALSKI, DT
Idaho Power Company
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associated with demand-side management (*DSM"), and I have
been the Company's witness supporting its annual Fixed Cost
Adjustment ("FCA") calcul-ation and corresponding rates.
O. What is the purpose of your testimony 1n this
case ?
A. The purpose of my testimony is to present the
Company's request for a determination that $40,'172,164 of
DSM expenses incurred for the acquisltion of demand-side
resources in 201,8 were prudently incurred. This amount
includes $33,560,433 funded in 20IB by the Idaho Energy
Efficiency Rider ("Rider") and $1 ,751,730 of demand
response program incentive payments funded through base
rates and tracked annually through the Power Cost
Ad;ustment ("PCA").
The 20LB Rider-funded DSM expenses for which Idaho
Power is seeking a prudence determination is a 5 percent
decrease from the 20L1 Rlder-funded DSM expensesl reviewed
in last year's prudence
Prudence Case") . This
case, Case No. IPC-E-18-03 (*2017
decrease in 2018 expenses
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by a 5.6 percent decrease in system-wide energy
from 2017 energy savings when considering Idaho
was driven
savings
Power's
1 Included in the $37,162,002 funded by the Rj-der in 2AL1 is
$1,860,901 of j-ncrementaf DSM labor expenses incurred between 2ALL and
2076 which were deemed prudent in Order No. 33908 as part of Case No.
IPC-E-17-03. The 2017 DSM expenses funded by the Idaho Rj-der, excluding
the one-time coflection of previously incurred labor-related expenses,
are $35,301,101.
GORALSKI, DI
Idaho Power Company
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1 energy effici-ency programs alone. When the Northwest
2 Energy Efficiency Afl-iance (*NEEA") estj-mated savings are
3 included, the 2078 energy savings experienced a decrease of
4 4.6 percent from 2011 levels. Wh1le down s11ght1y from the
5 prior year's savings, the 20LB energy savings represent the
6 fourth largest annual lncremental energy savings
7 achievement since the estab]ishment of the Idaho Rider in
B 2002.
9 My testimony wiII (1) provide a review of 20LB DSM
10 program performance, (2) discuss 2078 DSM expenses and
11 adjustments, (3) provide an overview of cost-effectiveness,
72 (4) review eval-uation efforts, and (5) describe
13 opportunities for stakeholder input.
14 I. 2018 DSM PROGRAI,I PEPJ'ORMAIiICE
15 Please provide an overview of Idaho Power's
L6 DSM efforts in 2078.
71 fn 2018, oD a system-wide basls, Idaho Power
1B offered portfol-io of energy efficiency programs and
T9 demand response programs avail-able to all customer
segments, participated in market transformation efforts
through NEEA, and offered several educational and
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2L
22 behavioral initiatives lncfuding the
Efficiency Education Initiative, the
Energy Reports, and other activities.
Residential Energy
23 School Cohort, Home
25 Power's 2018 DSM activities is provided
summary of Idaho
in Table 1 below.
GORALSKI, DI
Idaho Power Company
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1 Table 1.
2 Loe,ation,
2OLB DSM Prograns by Sector, Operational. T1pe,
and Annualized Energ'y Savings/Denand Reduction*
Program by Sector OperationalType State
Savings/Demand
Reduction
Residential
A/C CoolCredit
Easy Savings: Low-lncome Energy Efficiency
Education
Educational Distributions
Energy Efficient Lighting
Energy House Calls
Fridge and Freezer Recycling Program **
Heating & Cooling Efficiency Program
Home Energy Audit Program
Home Energy Report Pilot Program
Multifamily Energy Savings Program
Oregon Residential Weatherization
Rebate Advantage
Residential New Construction Pilot Program
Shade Tree Pro.lect
Simple Steps, Smart Savings*
Weatherization Assistance for Qualified
Customers
Weatherization Solutions for Eligible
Customers
Commercial/lndustrial
Commercial and lndustrial Efficiency Program
Custom Projects
New Construction
Retrofits
Commercial Energy-Savings Kit
Flex Peak Program
Green Motors-lndustrial
Oregon Commercial Audits
lrrigation
Green Motors-l rrigation
I rrigation Efficiency Rewards
lrrigation Peak Rewards
AllSectors
Northwest Energy Efficiency Alliance
Demand Response
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efflciency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Demand Response
Energy Efficiency
Energy Efficiency
Energy Efficiency
Energy Efficiency
Demand Response
Market Transformation
30 MWh
16,052 MWh
18,857 MWh
374 MWh
74 MWh
1,556 MWh
211MWh
3,282 MWh
656 MWh
O MWh
285 MWh
777 MWh
36 MWh
241 MWh
ID
ID/OR
ID
ID/OR
ID/OR
ID/OR
29 MW"
650 MWh
ID/OR
ID/OR
ID/OR
ID/OR
ID/OR
ID
ID
ID/OR
OR
ID/OR
ID/OR
ID
ID/OR
ID/OR
572 MWh
ID/OR
ID/OR
ID/OR
ID/OR
ID/OR
ID/OR
OR
46,964 MWh
13,378 MWh
34,911 MWh
442 MWh
33 MW*
64 MWh
nla
68 MWh
18,934 MWh
297 MW"
ID/OR 24,966 MWh
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*This value represents the realized, non-coincident load reduction from
each program.
**Although the Fridge and Freezer Recycling program was discontinued in
201,1 , Idaho Power did have a few pickups in 2018.
GORALSKI, DI
Idaho Power Company
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1 Tabl-e 1 illustrates the broad avai1abi1lty of
2 programs offered by Idaho Power to its customers in energy
3 efficiency, demand response, and education. Idaho Power's
4 energy efficiency portfolio was cost-effective, resulting
5 in a 2.26 benefit/cost ratio when evaluated from a Totaf
6 Resource Cost (*TRC") test perspecti-ve, a 3.04 benefit/cost.
7 ratio when evaluated from a Utility Cost Test (*UCT")
8 perspective, and 2.85 benefit/cost ratio when eval-uated
9 from a Participant Cost Test ("PCT") perspective.
10 The Demand-Side Management 2018 AnnuaL Report (*DSM
11 20LB Annual- Report"), Attachment 1 to the Application filed
L2 in this proceeding, provides details for each program,
13 including a description of each program, 20LB performance
74 and activities, cost-effectiveness, customer satisfaction,
15 and evaluation resul-ts when applicable. In addition, the
L6 DSM 201,8 Annual Report provides a description of Idaho
t'7 Power's DSM strategles for 20L9.
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efficiency
A.
savings
Ona
What level of incremental annual energy
was achieved in 2018?
system-wj-de basj-s, Idaho Power achieved
incremental annuaf energy183,378 megawatt-hours (*MWh") of
efficiency savings in 20L8. This val-ue includes L58,472
and an23 MWh from Idaho Power's energy efficiency programs
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GORALSK], DI
Idaho Power Company
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estimated 24,966 MWh2 of energy efficiency market
transformation savings through NEEA initiatives. Chart 1
below shows the incremental- annual- energy efficiency
savings in MWh from 2002 to
in this chart are the total
the current year.
energy efficiency
AIso shown
200,000
150,000
100,000
50,000
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=oC'.;
tgg,
E')
0,
IIJ
expenses for
each year in millions of dollars.
Chart 1. Increnental Annual Energy Efficiency Savings
MWh)and Energy Efficiency E:qrenses ($ millions) 2OO2-2OLa
250,000 $45
r Market Transfornntion (NEEA) (MWh)
-
1613ft6 Power Program Savings (MU\lh)
-
EE expenses (no DR)
2002 2003 2004 2005 2m6 2(x)7 2008 2009 2010 2011 2012 2013 20',t4 2015 2016 2017 2018
Note: 2018 NEEA market-transformation savi-ngs are estimated.
O. Did any programs experience large reductions
in savings from the prior year?
A. Yes. The Residential Energy Efficient
percent decrease in 20lB
$,00
$35 E.
€$30 =o(,
$2s 2t
smfi
o
$15 .3
1!
$10 e
oc$5 r.rJ
$00
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Lighting program experienced a 50
as compared to 20L1. As explained in the 2071 Prudence
2 Because Idaho Power wil-l- not receive final- 2018 savings from NEEA
until- May 2019, the NEEA-attributable savings is an estimate provided to
ldaho Power by NEEA.
GORALSKI, DI
Idaho Power Company
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Caser3 the Company anticipated savings associated with
residential lighting woul-d decrease during 20LB and 2019 as
implementation of the 2020 Phase II code required by the
Energy Independence and Security Act of 2007 (*EISA")
approaches.
O. Does the Company expect savings from lighting
measures to continue to decline in 2019?
A. Yes. The 2020 EISA Phase II code
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lmplementation requires
percent more efficient
into law in 2001. Thus,
that most light bul-bs be 60
than they were when EISA was
while this
to 10
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72 energy efficient lighting wiII be
energy savings from
real-1zed in grid savings
savings wil-I no longer
savings but wil-l be
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count in energy
accounted for in
efficiency program
the Company's load forecast once j-t
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becomes part of lighting code in 2020.
O. Considering the reduction 1n savings and the
decreased energy efficiency in the potential study, how
wil-1 the Company achieve Idaho Power's Integrated Resource
Plan (*IRP") targets?
A. Idaho Power relies on its Program Planning
Group, NEEA's Regional Emerging Technofogy Advisory
Committee, the Company's Energy Efficiency Advisory Group
(*EEAG"), and E Source, a regional research organizat:-on,
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3 Case No. IPC-E-18-03, Aschenbrenner DI at 8.
GORALSKI, DI
Idaho Power Company
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to explore new potential offerings or new measures to
incl-ude in the Company's energy efficiency portfolio.
Idaho Power also strives for continuous program improvement
to make it easier for customers to participate in programs.
O. In 2078, did Idaho Power meet the energy
efficiency targets included in its 2017 IRP) ?
A. Yes. Chart 2 below shows the annual
incremental- energy efficiency savings, in average megawatt-
hours ("aMW"), compared with the IRP targets for 2002
through 20L8.
Chart 2. AnnuaJ. Incremental Energy Efficiency Savings
(alfiO with IRP Targets (2O02'2OL8!
-
-lPC Savings
-
IRP Targets
2@2 2003 2@4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
*NEEA codes and standards savings were removed because they are not
incfuded j-n IRP targets.
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(EF
tgoo,'t
tE.h
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L6 How are the energy efficiency targets incfuded
L7 in the IRP establ-ished?
1B Idaho Power contracts with a third party to
19 conduct an energy efficiency potential study to estimate
GORALSKI, Df
Idaho Power Company
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Power consi-ders the achievable
not
the amount of cost-effectlve achievable energy effj-ciency
to be included in the IRP for planning purposes. Idaho
potential as a reasonable
consider the achievableplanning estimate but does
potentlal- as a ceiling that
energy efficiency; rather,
effective energy efficiency.
Chart 3 below shows the cumul-atj-ve energy
savings in aMW compared with the IRP targets for
10 through 2078.
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Chart 3, Annua1with IRP Targets
l-imits the acquisition of
the Company pursues al-l- cost-
efficiency
2002
Cumulative Energ'y Efficiency Savings (a!{W)
(2OO2-2OL8l
-
-lPC Savings
-lRP
Targets
2002 2@3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20',t5 2016 2017 2018
*NEEA codes and standards savings were removed because they are notincluded i-n IRP targets.
76 O. What l-evel- of demand reductlon capacity was
tl availabl-e from Idaho Power's demand response programs in
18 20tB?
GORALSKI, Df
Idaho Power Company
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250
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150
100
50
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A. The total- availabl-e capacity of Idaho Power's
three demand response programs was approximately 382
megawatts ("MW"). This value represents the total demand
response capacity cal-cul-ated by applying a maximum
real-ization rate to the total enrol-l-ed MW in all- three
demand response programs. The programs provided actual
demand reduction of 359 MW during the 20L8 program season.
Chart 4 below reflects the annuaf avail-able peak demand
reduction capacity and actual load reductj-on in MW since
2004 and the associated annual expenses in millions of
dol-l-ars.
Chart 4. Feak Denand Reduction Capacity (MW) and Demand
Response E:rpenses ($ niJ.lions) 2OO4-2OLB
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500
450
400
350
300
250
2W
150
100
50
0
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=6oo
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CL
UJq)
tn
oo-oot
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==
=o6
6o
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EooI6oo-
rActual load reduction
rAvailable capacity
-Demand
response expenses
$2s.00
$20.00
s15.00
$10.00
$5.00
$0.00
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20'.t6 2017 2018
II. 2OL8 DSM EXPENSES ATiID ADiTSTMENTS
0. What is Idaho Power's focus when evaluatj-ng
the acquisition of DSM resources?
GORALSKT, Dr 10
Idaho Power Company
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A Idaho Power takes its responsibility of
prudently managing customer
believes it is lmportant to
funds serj-ousIy and the Company
get the maximum value for its
customers. The Company's actions in 2078, and
of the DSM 2018 Annual Report, provide evidence
the content
the conscientious work Idaho Power
made toward using customers' funds
activities.
through base
for a prudence
27 Idaho Power
supporting
feadersemployees
wisely to
and
support DSM
o What amount of DSM expenses is the Company
10 requesting the Commission find were prudently incurred?
11 A. In the delivery of energy efficiency, demand
72 response, and market transformation programs, as wefl as
13 education and administrative costs, Idaho Power expended
74 $33,560,433 of Rlder funds and $7,157,730 of demand
15 response program i-ncentives, for a total of $40,'712,764
76 spent on demand-side resource acquisition in 2078.
tl Idaho Power requests that the 20lB Rider-funded DSM
1B expenses,
recovered
together
and the 20LB demand response program incentives
19 rates and the PCA, be reviewed
determination. With this20
22 that these
requests
funds were
23 my testimony, 2018 Idaho
24 Prudence Filing, shows a
25 program, customer sector,
the Commission issue an order
fi I ing,
finding
No. 2 toprudently incurred. Exhibit
DSM Expenses and Adjustments for
breakout of these expenses by
and funding source.
GORALSKT, Dr 11
Idaho Power Company
1 Q. Please compare the dollar amounts in Exhibj-t
2 No. 2 with Appendix 2, 2018 DSM expenses by fundinq source
3 (dolLars), of the DSM 2018 Annua1 Report.
4 A. For clarj-ty and ease of understanding, Exhj-bit
5 No. 2 ties to Appendix 2, which is found on page L7 4 of the
6 DSM 20lB Annual Report. The first col-umn of Appendix 2
7 labeled "Idaho Rider" and the first col-umn of Exhibit No. 2
B labeled "Rider Expenses" match at the row labeled "Total
9 Expenses" in Exhibit No. 2 and "Grand Total-" in Appendix 2
10 in the amount of $33,663,001. A11 values in Exhibit No. 2
11 represent DSM expenses for the Idaho service area on1y.
12 Two accounting adjustments, one prior year and one current
13 year, to this total were needed to accurately arrive at the
L4 total- 2078 expenses for purposes of the prudence
15 determination. These adjustments are listed on Exhibit No.
76 2 under the Adjustments section as "Reversal of 2077 Labor
1,1 Correction" and "Multifamily Energy Savings Program. "
18 O. Please describe the prior year-end accounting
19 adjustment included in Exhibit No. 2 for the 2018 prudence
20 determination.
21 A. One accounting adjustment included in the 2011
22 DSM prudence request is a reversing adjustment for 2078.
23 In 2071, the Company classified $89,304 of Rider-funded
24 labor to non-Rider funded operations and maintenance
25 ("O&M") based on an lncorrect determination that 2071
GORALSKT, Df 72
Idaho Power Company
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Rider-funded labor exceeded
Iabor expense per fulI-time
increases. Upon preparation
February 2078, Idaho Power
Rider-funded labor tn 2077
the 2 percent cap on average
annuafequivalent
of the 2011
("FTE")
Prudence
determined the total
filing in
amount of
the 2 percent annual
incl-ude that amount inIabor cap and made
the 2071 Prudence
an adjustment
filing. Thus,
was below
to
accounting adjustment in 201-8
had been initially classified
2011. This labor expense was
i-ncurred in Order No. 34L47.
The reversing entry j-s
the Company made an
reverse the $89,304 that
non-Rider funded OeM in
to
AS
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excluded from 20lB DSM
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expenses to accurately represent the amount incurred
rel-ated to 20L8 DSM ef forts.
O. Please describe the current year-end
accounting adjustment incl-uded in Exhibit No. 2 for the
20lB prudence determination.
A. Upon preparation of the 20LB prudence filing,
Idaho Power dj-scovered an incorrect accounting entry was
20 made in 2078 for the MuIti-family
totaling $13,264
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Energy Savings Program.
j-n program expenses wereOregon activity
charged to the22 Tdaho Energy Efficiency Rider and shoul-d
23 have been charged to the Oregon Energy Efficiency Rider.
24 This entry was identified
had closed and is made as
after the 2078 accounting books
an adjusting entry in 2019. The
GORALSKT, Dr 13
Tdaho Power Company
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correct j-ng
accounting
o.
Rider?
A.
2OIB,
TabIe
funding
balance
had a positiver or
2 below shows the
col-fected balance
December 31,
of $5,258,957.
entry is included in the "Current year-end
adjustment" section of Exhibit No. 2.
What was the year-end 201-8 balance of the
The Rider account bal-ance at
January 20L8 beginning balance, the
and the ending
Tab1e 2
2018)
Idaho Energ'y Efficiency Rider (ilanuary-December
ldaho Energy Efficiency Rider
2018 Beginning Balance
2018 Funding plus Accrued lnterest as of 12-31-18
Total 2018 Funds
2018 Expenses as of 12-31-18
Ending Balance as of 12-31-2018
$407,603
38,514,355
38,921,958
(33,663,001)
$5,258,957
O. Has the Company taken action to address the
increasing Rider balance?
A. Yes, the Company filed Case No. IPC-E-19-06 on
Eebruary 72, 20L9, seeking Commission approval to decrease
the Rider coll-ection percentage from 3.75 percent of base
rates to 2.75 percent of base rates. This proposed
reduction in Rider collection percentage better aligns the
near-term level- of funding with the forecast level of
energy effj-ciency expenditures related to the pursuit of
al-l- cost-effective energy efficiency.
GORALSKT, Dr 74
Idaho Power Company
plus interest items, expenses,
as of December 3L, 2018.
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III. 2OL8 COST-EFEECTI\/ENESS OVERVIEW
n What is fdaho Power's overall- goal when it
comes to DSM cost-effectiveness tests?
A. As addressed further in Ms. Connie
Aschenbrenner's direct testimony, prior to the actual
implementation of energy efficiency or demand response
programs, Idaho Power performs a preliminary cost-
effect iveness
program desj-gn
perspective of
Power's goal is to have all
analysis to assess whether a potential
or measure will be cost-effective from
Idaho Power
the
10 and its customers. Idaho
energy efficiency programs
of 1.0 or greater for the TRC
at the program and measure level
achieve benefit/cost ratios
test, the UCT, and the PCT
where appropriate.
Idaho Power reviews the cost-effectiveness results
for each program and measure on an annual basis to
determine whether the program should continue or be
18 modified in some way to ensure
If a measure
it remains cost-effective on
79 an ongolng basis.
be cost-effective
or program is found to not
from each of the three tests, Idaho Power
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determination on modj-fylng,
input before maklng its
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conti-nuing, or
If the measure or program found
from one or more of the three tests is indeed
the Company will explaln why the measure or
discontinuing an
to not be cost-offering.
effectlve
offered,
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Idaho Power Company
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program was implemented or continued when it seeks a
prudence determination for the incentives and expenses
associated with that program. Because Idaho Power must
ul-timately demonstrate to the Commisslon that its program
investments were prudent under "the totality of the
circumstances,"o Line Company remains committed to evaluating
program performance under all three metrics and believes
this approach aligns wlth past
The cost-effecti-veness
Commission orders.
test methodologies and
10 assumptions are described in more detai] in the flrst pages
11 of SuppJement 1: Cost-Effectiveness ("Supplement 1"),
12 included 1n Attachment 1 to the Application in this
13 proceeding.
L4 A. 2OLB Cost-Effectiveness Results.
15 O. What were the results of the 20L8 cost-
effectiveness analyses?
A. Exhibit No. 3 to my testj-mony, 2018 Cost-
Effectiveness Summary by Program, Sector, and Portfolio,
shows the results of the TRC test, UCT, and PCT for every
energy efflciency program, aggregated by sector and for the
portfolio. As shown in Table 3 below, aII tests achieved
benefit/cost ratios over 1.0 by sector and portfol-io.
These results are also inc]uded in Exhibit No. 3.
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a Case No. IPC-E-15-06, Order No. 33365 page 10.
GORALSKI, DI 16
Idaho Power Company
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1 Tab1e 3. 2OLg Benefit/Cost Table (by Sector t PortfoJ.io)
2 On an individual- program basis, these results
3 reflect that, using 2078 DSM program year costs and
4 benefits, 72 of the L6 energy efficiency programs offered
5 in Idaho for which the Company cal-cul-ates cost-
6 effectiveness had benefit/cost ratios greater than 1.0 for
7 both the TRC test and UCT.
8 The PCT ratios cannot be calcul-ated for those
9 programs that do not have a direct customer cost; these are
10 shown as *N/A" on Exhibit No. 3. The detail-s of these
11 cal-culations are in Supplement 1 of the DSM 2018 Annual
12 Report.
13 The following four programs did not pass at l-east
L4 one of the tests:
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a The Weatherizatlon Assistance for
Customers ("WAQC") program had a
ratio of less than 1.0 for both
QuaIi fied
benefit/cost
the TRC test and
a
UCT;
The Weatherization Solutions for Eligible
Customers ("Solutions") program had a
GORALSKT, Dr L]
Idaho Power Company
Sector
Tota].
Resource Cost
(TRC) Test
Utility Cost
Test (UCT)
Participant
Cost Test
(PCr)
Residentlaf 3.16 2 .37 10.03
Comme rci- a l- / I ndus t ri a I L.81 3.75 L.16
I rrigation 3. 04 4 .60 2 .13
Port folio 2.26 3. 04 2.85
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benefit/cost ratio of less than 1.0 for both the TRC
test and UCT;
a The Heating & Cooling Efficiency Program had a
benefit/cost ratio of greater than 1.0 for the
UCT and PCT, but less than 1.0 for TRC test; and
The Shade Tree Project had a benefit/cost ratio
of less than 1. 0 for both the TRC test and UCT.
Did Idaho Power cal-culate cost-effectiveness
a
O
for each measure within each energy efficiency program it
10 offers?
11 A. Yes. In 20L8, Idaho Power eval-uated the
72 benefits and costs of 279 measures from both the TRC test
13 and the UCT perspective. The results of these calcu1ations
74 along with measure assumption details and source
15 documentation can be found in Supplement 1t.o the DSM 201-8
16 Annua1 Report.
71 O. How did Idaho Power address any individual
18 measures that are not cost-effective based on one or more
19 tests?
20 A. The cost and benefit val-ues used in the
21, various analyses are based on markets,technologies,
cost estimates,22 economic inputs, savings estimates, and
23 which can change over time. When a measure is determined
24 not to be cost-effectlve at a specific point in time, Idaho
25 Power first eval-uates whether the inputs used in the
GORALSKI, DI 18
Idaho Power Company
1 cal-culati-ons are still correct and then determines if
2 measure parameters shoul-d be modified or whether the
3 measure should be eliminated. The measures that are not
4 cost-effective from a TRC test or UCT perspective will
5 either be discontinued, analyzed for additional non-energy
6 benefits, modifled to i-ncrease potential per-unit savings,
7 or monitored to examine their impact on the specific
8 program' s overal,l- cost-ef f ectiveness. For additlonal
9 detail on measure analysi-s refer to Supplement 1 to the DSM
10 20LA Annual Report.
11 O. Does Idaho Power consj-der cost-effectj-veness
72 for its three demand response programs?
13 A. Yes,
calculated for the
however, benefit/cost ratios are not
I4 three demand response programs.
determine the cost-
76 effectiveness of the demand response programs compares the
71 annual cost of operating ldaho Power's demand response
of a 170 MW deferred18 portfol-io to the l-evel-ized annual cost
79 resource over a 2)-year l-ife. s In 2078, the
cost of operating the three demand response
approximately $8.2 mlllion ($7.4 million of
system-wlde
20
22 $0.8 miffion of other costs). The amounts attributabl-e to
23 the Idaho-only jurisdiction were $7.9 mil-l-ion ($1 .2 milf ion
s Demand response val-uation methodology was reached by settlement
agreement and approved in Commi-ssion Order No. 32923 as part of Case No.
rPC-E-13-14.
15 Instead, the methodology used to
27
programs was
incentives and
GORALSKI, DI
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Power estj-mated that if the three programs were dispatched
would havefor the fuII 50 hours allowed, the total costs
approximately
the 2071 IRP,
$11.3 million on a system-wide basis.
the maximum annual cost of running all-
demand response programs for the maximum aIIowabIe
of 60 hours should be no more than $19. B milIion,
three demand
20L8.
been
Using
three
hours
leading Idaho Power to conclude that its
response programs were cost-effective in
B. 9ilAQC and Solutions Programs.10
11 O. What were the cost-effectiveness resul-ts for
72 the WAQC and Solutions programs?
13 A. As shown in Exhiblt No. 3, the WAQC and
14 Solutions programs, both of which are offered to limited-
15 income customers, did not achieve the 1.0 beneflt/cost
76 ratio threshold in 20!8 under the TRC test and UCT,'
Ll however, the WAQC program's cost-effectiveness j-ncreased
18 slightly in 201-8 compared to 20L7 results. The PCT is not
79 cal-culated for these programs because the programs impose
20 no direct costs on the participants.
27 O. Why does the WAQC program continue to not be
22 cost-effective and how does Idaho Power attempt to improve
23 ir?
24 A. The WAQC program provides real- and substantial
25 per home savings, but due to the costs of comprehensive
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whofe-house weatherizaLton, it is dlfficul-t for the value
of the savings to outweigh the costs. The weatherizatj-on
services provided through the WAQC program are consistent
with the Idaho State Weatherization Assistance Program
("WAP") guidelines and are offered at no charge to the
participant. This program is designed for limited-income
customers and Idaho Power believes there are other benefits
to this program that are difficult to quantify, such as
health and safety measures. In 2078, L93 homes in Idaho
were weatherized through the WAQC program.
This program is offered in coordination with the
state WAP under U.S. Department of Energy guidelines;
changes to this program must be made by the state WAP.
Idaho Power continues to work with its
weatherization managers, stakeholders, and vendors to
streamline operations and adjust offerings to make this
program more cost-effective.
O. Why does the Sol-utj-ons program continue to not
be cost-effecti-ve and how does Idaho Power attempt to
improve it?
A. Similar to the WAQC program, the Solutions
program provides real and substantial per-home savings, but
due to the costs of comprehensive whole-house
weatherization, it
savings to outweigh
is difficult for the value of the
the costs. Like the WAQC program, the
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Solutions program is offered to customers who may not have
the income to partj-cipate in other residential- energy
efficiency programs. Idaho Power bel-ieves there are
unquantifiable non-energy benefits to program participants,
such as increased safety and comfort. Idaho Power
continues to work with its program stakehol-ders and vendors
to streamline operations and adjust offerings to make this
program more cost-effective.
The Company has cont.inued a particj-pation
10 requirement for the Sofutions introduced in 2016,
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requiring landlords to
project. In 2078, the
home constant from the
fund at
program
Ieast 10 percent of the
average cost perCompany held the
20L4 level for the weatherization
74 contractors, which helped to keep the cost of the program
15 down. The Company conti-nues to support the whole-house
76 philosophy by allowing a
home cost. fn 2018, 147
through the program.
0. Does Idaho
annual maximum average per-
in Idaho were weatherized
plan to conti-nue to offer the
the future?
$6, ooo
homes
Power
20 WAQC and Solutions programs in
2t A Yes. While the Company has identified that
22 the
UCT,
wi 1I
not cost-effective under the TRC test or
LJ Commission directs otherwise, Idaho Power
)A continue its efforts to improve the cost-effectlveness
GORALSKT, Dr 22
Idaho Power Company
programs are
unless the
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of these programs while at the same time offering them to
the Company's Iimited-income customers on an ongoing basis.
C. Heating & CooJ.ing Efficiency Program.
a. What were the cost-effectiveness results for
the Heating & Cooling Efficiency Program in 20LB?
A. The Heat.ing & Cooling Efficiency Program had a
benefit/cosL ratj-o of 1.65 under the UCT, 0.83 for the TRC
test, and 1.50 for the PCT.
a. Has Idaho Power worked with the EEAG to
10 address the cost-effectj-veness of the program?
11 A. Yes. Beginning in 2076, Idaho Power has
12 worked with the EEAG to identify ways to improve the
13 program's
offering a
pump water
overall cost-effectiveness. The
cash incentive to customers who
Company began
install-ed a heat74
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heater on January L, 20L8.
Supporting, retaining, and expanding Idaho Power's
contractor network was the focus of a growth strategy for
the program in 2078, with the goal that participation
growth yields higher annual kilowatt-hour savings over
whlch to spread administrative costs. Throughout the year,
the Company held meetings with several prospective
contractors and 16 contractors were added to the program.
Idaho Power afso provided 22 one-on-one training sessions
with contractors in 20L8.
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0. Does the Company plan to continue offering the
Heating & Cool-ing Efficlency Program?
A. Yes. In eval-uating whether to contj-nue
offering an existing program, the Company considers aII
three cost-effectiveness tests, dS well as other factors.
While this program does
of the TRC test without
r_mproves
DHPs f al-1
not pass the
ductless heat
TRC test, calculation
pumps (*DHP")
the value to 0.96. The two primary reasons that
transformation work provided by NEEA, have not
prices down, and the lower net savings real-lzed
climates by DHPs. The Company believes retaining
such as electronically commutated motors, which
energy savings can potentially increase program
spread the fixed administrative costs over more
below 1.0 TRC test cost-effectiveness are that
10 market transformation efforts in the region, speclfically
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the market
yet driven
in colder
measures,
have high
savings and
savings.
The Company plans to continue to monitor thj-s
program and work wlth the EEAG to seek opportunities to
improve the program's overal-l- cost-ef fectiveness. Because
the performance of the program is substantially dependent
on the contractors' abilities to promote and leverage the
measures offered, Idaho Power's primary goal in 20L9 will
be to continue to develop current contractors' skillset in
meeting program requirements and their product knowledge in
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the program while seeking opportuni-ties to add new
contractors. Additlonally, Idaho Power will- continue its
requests of NEEA to address costs and other market barriers
for offerlngs in the Heating & Cool-ing Effj-ci-ency Program.
D. Shade Tre_e lEciee!.
10
O. What were the cost-effectiveness results for
the Shade Tree Project in 20LB?
A. The Shade Tree Project had a benefit /cosL
ratio of 0.71 under the UCT, and 0.80 for the TRC test.
O. What were preliminary esti-mates of program
cost-effectiveness at program inception and what year did
Idaho Power first begin calculating savings and cost-
effectlveness for the Shade Tree Project?
A. When Idaho Power began the Shade Tree Project
in 2013, the ini-tial analysis showed that the project wou1d
be cost-effective from the UCT and TRC test perspective
based on preliminary assumptions and the then-current DSM
alternative costs. The Company's intent was to begin
claimlng savings when the orlginal planted trees were five
years old. Since the Shade Tree Project began 1n 2073,
20L8 was the first year Idaho Power claimed savings and
calculated cost-effectiveness for the Shade Tree Project.
O. Why is the Shade Tree Project shown to not be
cost-ef f ecti-ve?
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Idaho Power Company
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A. In 2018, Idaho Power's third-party consultant,
DNV GL, created a new savings model to adlust the savj-ngs
from the enrolfment calculator using the data from Idaho
Power's 20L5-20I1 audit of the project based on where the
trees were actually planted and tree mortality, which
lowered savings. Additionally, in modeling savings, DNV GL
assumed a measure life of 20 years.
O. Is the Company exploring ways to improve the
cost-effectiveness of the Shade Tree Project?
A. Yes, despite these adjustments which lowered
the clalmable savJ-ngs for the tree, the Company believes
the Project still has the potential to become cost-
effective. While the measure life is assumed to be 20
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life.
the savlngs may continue beyond the 20-year measure
15 If energy savings were to stay constant beyond year
76 20, it can be assumed that the program would be cost-
effective from both the UCT and TRC perspective if the
program l-ife was revised to 30 years. Gj-ven that tree
specj-es in the program have lifespans from 50, up to 500
years for a northern red oak, the Company is currently
examining measure life assumptions with its third-party
consul-tant.
O. Does the Company plan to continue offering the
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Idaho Power Company
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A. Yes, the Company will continue to offer the
Shade Tree Project in 2019.
IV. EVAIUATION ACTIVITY O\IERVIETI
10
O. What is the Company's approach to DSM program
evaluation?
A. To ensure the ongoing cost-effectiveness of
programs through validation of energy savings and demand
reduction, and to guide the efficient management of its
programs, the Company reli-es on eval-uations by third-party
contractors chosen through a competitive bidding process.
Idaho Power uses industry-standard protocols, internal
analyses, and regi-ona1 and national studies to inform its
internal and external eval-uation efforts. The Company has
generally conducted impact evaluations every three years,
and process evaluations for relatively new programs, or
when a program has significant changes . SuppTement 2:
EvaLuations ("Supplement 2") to the DSM 2018 Annual Report
provides additional information regarding how Idaho Power
evaluates its programs.
O. How does Idaho Power utllize the eva]uations
described above?
A. Idaho Power uses the resul-ts of its
evaluations to inform decisj-ons related to program
improvement, to compare processes to industry best
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Idaho Power Company
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practices, and to benchmark and validate reported program
savrngs.
What evaluation activities took place in 20lB?
In addition to the annual cost-effectiveness
analyses that the Company conducts for each program, in
Tetra Tech MA to conduct2018, Idaho Power contracted with
three program impact eval-uations
evaluation, DNV GL to conduct one
O
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and one
savings
program process
determination
10
analysis, Resource Action Programs to conduct two program
summary analyses, and Aclara to conduct one program sunrmary
analysis. Impact eval-uations were performed for Energy
Efficlent Lighting, Multifamily Energy Savings Program, and
the Custom option of the Commercial and Industrial Energy
Efficiency Program. A process evaluation was performed for
the Multifamj-1y Energy Savings Program. Program summary
analyses were performed for the Energy-Savings Kit Program,
the Energy
proj ect. A
the Shade
Wise Program, and the
savings determination
Tree Project.
The three impact eval-uations that were conducted in
2078 analyzed reported savings from the 20L1 program year.
Realization rates were as follows:
o Energy Efficient Lighting realizati-on very
close to 100 percent;
GORALSKI, DI 28
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analysis was completed on
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o Multifamily Energy Savings Program - realization
rate of 84 percent due to a transcription error
applied to the savings used in 2017, corrected in
20L8; and
o Custom option of the Commercial and Industrial
Energy Efficiency Program - real-ization of l-00.4
percent.
For the savings determination analysis in 2018, DNV
GL was retained to estimate savings for the Shade Tree
Project for trees planted during the program years 2013
through 20L8.
Idaho Power conducted internal analyses of the 2018
CooI Credlt,
Peak programs.
13 demand response events related to A/C
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Irrigation Peak Rewards, and
The final reports for
the EIex
these evaluations and studies,
76 surveys, and the market effects evaluations conducted by
20L8 Annual71 NEEA are incfuded ln Supplement 2 Lo the DSM
O Does Idaho Power have a DSM program evaluation
20 plan for 2079?
2t Yes. Exhibit No. 4, Customer ReLations and
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23
Energy Efficiency 2010-2020 Program EvaLuation
attached, and is afso incl-uded in Supplement 2
24 20IB Annual Report.
includes third-party
In 2079, Idaho Power's evaluation plan
combination impact and process
GORALSKT, Dr 29
Idaho Power Company
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Pfan, is
to the DSM
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evaluations for the Energy House
Construction Pilot Program, and
Calls, and Residential New
impact evaluations of the
of the Commercial- and
This plan is
change based on
New Construction and Retrofit portion
Industrial Energy Efficiency Program.
intended to be used as a gulde and may
need, timing, or other factors.
10
V. STAIGHOLDER INPUT
O. What is the EEAG?
A. In 2002, Idaho Power formed the EEAG to
provide input on enhancing existing DSM programs,
recommending new energy efficiency measures, and
implementing energy efflciency programs. Members lncl-ude
customer representatives from residential, irrigation,
commercial, and industria1 sectors, and technical experts,
as wel-I as representatives for limited-income indivlduals,
environmental organizations, state agencies, county and
city governments, the Commission, the Public Utility
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79 O. What is the structure of EEAG meetings?
20 A. The EEAG meets quarterly and Idaho Power
2L provides webinars as needed. During EEAG meetings, Idaho
22 Power discusses new energy efficiency program ideas and new
23 measure proposals, marketing methods, and specific measure
24 detaifs including cost-effectiveness, provides the status
25 of energy efficiency expenses and the Idaho and Oregon
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Rider funding, gives updates of ongoing programs and
projects, and supplies general informatj-on on DSM issues
and other important issues occurring in the region. The
Company invites experts to speak on evaluations, research,
and other topics of interest.
0. Did Idaho Power solicit guidance from the EEAG
duri-ng the 2018 program year?
A. Yes. In 2018, the Company held four in-person
EEAG meetings. During these meetings, Idaho Power
discussed and requested recommendations on a broad range of
DSM issues and requested feedback on new program ideas and
new measure proposals, marketing methods, and speciflc
measure detail-s.
As explained in greater detail in the DSM 201-8
Annual- Report, Idaho Power worked with the EEAG on several
topics, including deveJ-opment, desi-gn, promotion, or input
on the followlng:
o Residential- Energy-Saving Kits ("ESKs"). The
deemed savings that had been previously applied
to the Giveaway ESKs were no longer being
supported by the Regional Technical- Forum
("RTF"), and the new deemed savings did not apply
to the Giveaway ESKs as designed. Idaho Power
presented options on how to manage the giveaways
moving forward, including changing the kits to
GORALSKT, Dr 31
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match the savings that were supported by the RTE
or keeping the ESKs as-is and continuing to apply
the previous savings. The EEAG agreed the Company
shoul-d continue to distribute Giveaway ESKs to
customers who call about their high bills and at
various events, while continuing to apply the
prevj-ous deemed savings.
Slmple Steps, Smart Savings. After aB
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presentation by the Company
j-ncremental price difference
high efficiency showerheads,
the Company consider market
deciding whether to continue
Based on the EEAG's feedback
identifying
available,
continue to
part of the
offer high efflclency
program.
SchooI Cohort. The Company,
on the lack of
between standard and
the EEAG suggested
indicators before
offering incentives.
from market research
the Company
showerheads as
after presenti-ng
for the second year,
its continuatlon, and
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inefficient showerheads are still
the group recommended
a
ways
as ked
to improve this program
the EEAG for input on
the consensus of the group was Idaho Power should
continue this effort for the second year.
o A/C CooI Credlt. The EEAG was in favor of Idaho
Power moving forward with a new testing protocol-
GORALSKT, Dr 32
Idaho Power Company
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for non-communicating switches which would result
in participant removal from the program as a l-ast
resort.
vr. coNclusroN
O. Do you believe that the information contaj-ned
in this testimony and attached exhiblts supports a prudence
determinatlon for 2078 DSM expenses?
A. Yes. The DSM 20L8 Annual Report details Idaho
Power's DSM offerings in program specific sections. Based
on the DSM 2018 Annual Report, the testimony set forth
above, and the attached exhibits, Idaho Power respectfully
requests the Commission determine that $40,772,164 of DSM
expenses incurred for the acquisition of demand-side
resources were prudently incurred.
O. Does this conclude your testimony?
A. Yes, it does.
GORALSKI, DI 33
Idaho Power Company
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ATTESTATION OF TESTIMONY
STATE OF IDAHO
SS.
County of Ada
I, Pawel P. Goral-ski, having been duly sworn to
testify truthfully, and based upon my personal knowledge,
state the following:
I am employed by Idaho Power Company as a Regulatory
Analyst in the Regulatory Affairs Department and am
competent to be a wj-tness in this proceeding.
I declare under penalty of perjury of the l-aws of
the state of Idaho that the foregoing pre-filed testimony
and exhj-bits are true and correct to the best of my
information and belief.
DATED thj-s 15th day of March 20L9.
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?o-.r G,rr)oL-,
Pawel P. Goral-ski
SUBSCRIBED AND SWORN to before me this 15th day of
March 20L9.
No ary Pub for Idaho
ise IdahoResiding at Bo
My commission expires:72/20/2020
GORALSKT, Dr 34
Idaho Power Company
KIMBERLY K. TOWELL
coMMtSStON #16958
NOTARY PUBLIC
STATE OF IDAHO
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E -19-11
IDAHO POWER GOMPANY
GORALSKI, DI
TESTIMONY
EXHIBIT NO.2
ldaho Power Company
2018 ldaho DSM Expenses and Adjustments for Prudence Filing
Expenses Rider Expenses
Demand Response
Program lncentives
inclulded in Base Rates
and Trued Up in the
PCA Total Expenses
En erg y Ef f i c i e n c y/ Dem and Respmse
Residential
A,/C Cool Credit
Edu€lional Distributions
Energy Efiic.ient Lighting
Energy House Calls
Fridge and Freezer Recycling Program
Heating & Cooling Efticiency Program
Home Energy Aldit
Multifamily Energy Savings Program
Rebate Advantage
Residential Nil Construction
Shade Tree Project
Simple Steps, Smart Savings n
Weatherization Solutions for Eligible Customers
Commercial/lndustrial
Commercial Education lnitiative
Custom Projecls
Flex Peak Program
New Construction
Retrofils
lrrigation
I rigation Efficiency Remrds
lrigation Peak ReMrds
$433,659 $
3,307,782
2,U3,127
1$,712
33,172
565,780
264,39
205,131
105,770
400,91 0
1 62,995
86,721
998,233
144,436
8,400,495
58.727
2,004,058
5,732,650
2,681,664
230,953
374,285 S
310,270
6,467 ,175
807,944
3,W,782
2,3/,3,127
146,712
33,172
565,780
2U,394
205,131
'105,770
400,910
1 62,995
86,721
998,233
144.436
8,400,495
368,997
2,004,058
5,732,650
2,681,664
6,698,1 28
Energy EfficiencylDemand Respmse Total $28,307,370 $7,151,730 $i5,159,101
Market Tnnsformation
Northrest Ener0y Efiiciency Alliance 2,375,157 2,375,157
Ma*etTnnsfomation Total $2,375,157 $2,i75,157
Other Programs and Actiynieg
Commercial/lndustrial Energy Efficiency Overhead
Energy Efficiency Direct Program Overhead
Home lmprcvemenl Program
Residential Energy Efficiency Education lnitiatiw
Residential Energy Efiiciency Overhead
444,787
225.437
2.926
163,255
'1,M2,132
444.787
225.437
2,926
163.255
't,u2,132
Other Prqglrams and Activities fobl $1,878,538 S s 1,E78,53E
lndirect Prognm Expenses
Energy Efficiency Ac@unting & Analysis
Energy Efiiciency Advisory Group
S @cial A6ou nti ng E nties
Special Accounting Entries
987.281
16,837
97.820
987,281
16,837
97.820
lnclirect Prognm ExFrses fora, $1,101,937 S s 1,101,937
Total Expenses 33,663,001 $I 7,151,730 $40,814,732
Adjustments
Prior year-end accounting adiustment:
RewEal of 20't7 Labor Coreclion(")
Curent year-end ac@unting adjustmenl:
Multifamily Energy Savings Program(b)
(89,304)
( 1 3,264)
(89,304)
(13,264)
2018 Prudence Filing Tota!33,560,433 s 7,151,730 s 40,712,164
Exhibit No. 2
Case No. IPC-E-19-11
P. Goralski, IPC
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(a ) T his e x Fn * Btucls a co@ction in the la bot @lc ulation fot 20 1 7. The @ redion w as m& in 20 1 I
(b) This exFnse was chatged to the ldaho dder in 2018, and should have b@n charged to the Oegon dder. Tha corection was mde in 2019.
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E -19-11
IDAHO POWER COMPANY
GORALSKI, DI
TESTIMONY
EXHIBIT NO.3
2018 Cost-Effectiveness Summary by Program, Sector, and Portfolio
2018 Benefit/Cost Tests
Program/Sector
Total Resource Cost
(rRcl
Utility Cost Test
(ucrl
Participant Cost
(PfiI
Educational Distributions 4.51-2.68 N/A
Energy Efficient Lighting 6.64 4.67 13.05
Energy House Calls 1.74 7.37 N/A
Heatine & Coolins Efficiencv Program 0.83 1.65 1.50
Multifamily Energv Savings Program 3.00 1.60
Rebate Advantage 1.08 1.93 2.09
Residential New Construction 7.23 2.51 7.97
Shade Tree Proiect 0.80 0.77 N/A
Simple Steps, Smart Savings 4.68 7.M 8.54
Weatherization Assistance for Qualified Customers 0.52 0.43 N/A
Weatherization Solutions for Eligible Customers 0.51 0.37 N/A
Residential Enersy Efficiency Sector 3.16 2.t7 10.03
Custom Projects 2.32 3.85 1..92
New Construction 7.79 3.97 1.88
Retrofits 7.45 3.s8 1.55
Commercial Enersv-Savinss Kits 2.50 1.56 N/A
CommerciaUlndustrial Energy Efficiency Sector +L.a7 3.75 L,76
I rrigation Efficiency 3.03 4.57 2.73
lrrigation Energy Efficiency Sector rt 3.04 4.50 2.73
Enersy Efficiency Portfolio 2.26 3.04 2.85
a Commercial/lndustrial Energy Efficiency Sector cost-effectiveness ratios include savings and participant costs from Green Motors Rewinds.
t1 lrrigation Energy Efficiency Sector cost-effectiveness ratios include savings and participant costs from Green Motors Rewinds.
Exhibit No. 3
Case No. IPC-E-19-11
P. Goralski, IPC
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BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E -19-11
IDAHO POWER GOMPANY
GORALSKI, DI
TESTIMONY
EXHIBIT NO.4
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Case No. IPC-E-19-11
P. Goralski, IPC
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