20191121Petition for Clarification.pdf

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LISA D. NORDSTROM
Lead Counsel
I [e-mail]
November 21,2019
Diane Hanian, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Re Case No. IPC-E-19-1 1
2018 Demand-Side Management Expenses - ldaho Power Company's
Petition for Clarification of Order No. 34469
Dear Ms. Hanian:
Enclosed for filing in the above matter are an original and seven (7) copies of ldaho
Power Company's Petition for Clarification of Order No. 34469.
Very truly yours,
X";0Zt^U,r.---
Lisa D. Nordstrom
LDN:kkt
Enclosures
PO. Sor 70 (83707)
l22l W ldaho St.
Eoir€. lD 83702
VIA HAND DELIVERY
l:ri:l\/l-:l)
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A
DETERMINATION OF 2018 DEMAND-
SIDE MANAGEMENT EXPENDITURES
AS PRUDENTLY INCURRED
l) ) |3'i 2l Pl{2:ll
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. tPC-E-19-11
IDAHO POWER COMPANY'S
PETITION FOR CLARIFICATION OF
ORDER NO, 34469
ldaho Power Company ("ldaho Power" or "Company") endeavors to keep the costs
of energy acquisition as low as possible. While it may be implied from final Order No.
34469 ("Order"),1 ldaho Power petitions for clarification that the ldaho Public Utilities
Commission ("Commission") intends for ldaho Power to apply the Utility Cost Test
('UCT') perspective only when evaluating demand-side management ('DSM") resources
in integrated resource planning to ensure that it fully understands the Commission's
direction. RP 33, 325, and ldaho Code $ 61-626. To the extent that the Commission
believes the requested clarification goes beyond the scope of a clarification, then ldaho
Power respectfully requests reconsideration of the issue identified herein, See RP 325.
1 Order No. 34469, Case No. IPC-E-19-11 (October31,2019)
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO, 34469 - 1
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
lnordstrom@idahopower. com
I. BACKGROUND
On March 15, 2019, ldaho Power filed its Application with the Commission asking
for approval of an order designating ldaho Power's expenditures of $33,560,433 in ldaho
Energy Efficiency Rider ("Ride/') funds and $7,151,730 of demand response program
incentives funded through base rates and tracked annually through the Power Cost
Adjustment ('PCA) mechanism, for a total of $40,712,164, as prudently incurred DSM
expenses.2 The Company also requested the Commission find that the inclusion of all
cosfeffective DSM resources in the Company's long-term resource planning process,
from a Total Resource Cost ("TRC") perspective, will lead to the most economic planning
outcome and best serve the public interest.3
On August 20,2019, Commission Staff, the ldaho Conservation League ("lCL"),
and the City of Boise filed Comments in the case. On September 17 ,2019, ldaho Power
filed its Reply Comments, reiterating the Company's belief that the TRC test remains the
appropriate cost-effectiveness test to evaluate energy efficiency as a supply-side
resource.a
On October 31, 2019, the Commission issued its final Order No.34469 which
approved ldaho Power's 2018 DSM expenditures ol $40,712,164 as prudently incurred
and denied the Company's request to use the TRC perspective as the primary
perspective for integrated resource planning, ordering that ldaho Power "use the UCT
perspective for integ rated resource planning. "5
2 Application at 14.
3ld.
4 Reply Comments at I
5 Order No. 34469 at 9.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO, 34469 - 2
II. REQUESTED CLARIFICATION
ldaho Power's Application requested "the Commission find that the inclusion of all-
cost effective DSM measures in the Company's long-term resource planning process,
from a total resource cost perspective, will lead to the most economic planning outcome
and best serve the public interest,''6 On page 9 of Order No. 34469, the Commission
directed ldaho Power to "use the UCT perspective for integrated resource planning."
While it could be implied from the procedural context in which the issue was framed, ldaho
Power seeks clarification from the Commission that the change in cost-effectiveness test
is intended to apply to energy-efficiency resources in the resource planning context, not
all supply-side resources.
A. The Parties Briefed Cost-Effectiveness in the Context of Energy Efficiency.
ldaho Power requested the Commission determine that the Company should
continue to rely on the TRC test perspective when evaluating the amount of energy
efficiency included in resource planning,T and in Comments from lCL, City of Boise, and
Staff, rationale was offered as to the appropriate cost-effectiveness test within the scope
of evaluating energy efficiency resources. ICL agreed "with Mr. Eckman's testimony that
utilities should use a primary test of cost effectiveness to identify conservation as a
resource . . . ."8 and further highlighted that "[o]ther parts of the utility planning process
also work to develop achievable goals for cost-effective energy conservation."e The City
6 Application at 14
7 Aschenbrenner Dl at 27 ("[A]nd (3) the Company should continue to rely on the TRC test
perspective when evaluating the amount of energy efficiency included in long{erm resource planning.");
Application at 14 ("The Company also requests the Commission find that the inclusion of all cost-effective
DSM resources in the Company's long-term resource planning process, from a total resource cost
perspective, will lead to the most economic planning outcome and best service the public interest.").
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO, 34469 - 3
I ICL'S Comments at 6.
of Boise identified an interest in ensuring an increase in energy efficiency that would
qualify for funding under DSM programs,lo and for the Commission to instruct ldaho
Power to review methodology used to evaluate energy efficiency effectiveness.ll Staff,
in their Comments, highlighted where resource cost perspectives are applied to energy
efficiency programs, the first being in the integrated resource planning process to
determine how much energy efficiency a utility should include as a resource.l2 Finally,
Staff notes that Commission Order No. 34141 directed the Company to work with the
Energy Efficiency Advisory Group ("EEAG") on a range of issues, including a discussion
about the impacts of using the UCT rather than TRC,13 raising the issue to be evaluated
by a group of stakeholders who provide input and direction on the Company's energy-
efficiency related matters.
Order No. 34469 notes ''all three of the commonly used perspectives - the TRC,
the UCT, and the PCT - provide insight helpful to utilities, customers, and regulators
during the lifecycle of an energy efficiency program."la Further, the Order notes that the
only way a utility can determine how much energy efficiency should be included as a
resource in integrated resource planning is by focusing on a single perspective.l5
Based on the context of arguments made by the Company, Staff, lCL, and the City
of Boise in this case, the issue before the Commission was the appropriate cost-
e d at 8 (emphasis added).
1o City of Boise's Comments at 1
11 ld.al7.
12 Staff s Comments at 5.
13 /d. at 8.
11 Order No. 34469 at 8.
1s d. at 8.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO, 34469.4
effectiveness test to apply to the evaluation of energy efficiency resources in resource
planning. ln considering customer costs, the Commission also focused on energy-
efficiency acquisition, noting the Commission "has no statutory duty to ensure that
voluntary participants in the Company's energy efficiency programs are making a cost-
effective decision by participating."l6
B. Customers May Overpay for Certain Supply-Side Resources Evaluated with
the UCT.
The Company understands Order No. 34469 requires it to use the UCT
perspective to evaluate energy efficiency resources for resource planning purposes;
ldaho Power will implement it as directed. However, the Commission's directive that
"ldaho Power use the UCT perspective for integrated resource planning" could be
construed for broader application absent the context provided in this case.
Use of the UCT will have negative cost impacts if applied to customer-owned
distributed generation resources. For example, if the UCT perspective was applied to
customer-owned generation those resources would inappropriately be selected as
preferred resources because they appear to be a "no-cost" resource to the Company.lT
However, these resources are not "free" resources to ldaho Power's system and its
customers. Because the Company's retail energy rates contain a component that
recovers the fixed costs of service, reductions in sales volumes resulting from incremental
customer-owned generation shifts fixed costs to other customers. This cost shift is not
accounted for with the UCT
16 /d.
17 Reply Comments at 4
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO, 34469 - 5
The Public Service Commission of Utah orderedls use of the UCT mid-way through
Rocky Mountain Power's pilot Solar Photovoltaic lncentive Program, which resulted in
Utah customers' uneconomic funding of up to $50 million in incentives for customer-
owned rooftop solar photovoltaic systems over a five-year period.le A third-party program
cost-effectiveness evaluator reported a TRC ratio of 0.25 - a ratio of less than 1.0
evidences that costs were shifted to non-participants.20 Because the UCT perspective
does not consider the total impact to customer rates, Rocky Mountain Power's Utah
customers overpaid for rooftop solar on its system.
The Company believes clarification is important to help ensure that customer-
owned resources continue to be evaluated by the current methodology in resource
planning, which aligns with, and supports, the Commission's desire to keep costs incurred
by the utility to provide service low for ldaho Power's customers.2l
ilr. coNcLUSroN
The Company has heard and understands the Commission's directive to use the
UCT perspective to evaluate energy-efficiency resources and is committed to
implementing the change in ldaho.22 Changes to the cost-effectiveness test for energy
18 State of Utah Public Service Commission, Docket No. 09-035-27, Order at I (October 7, 2009)i
see a/so, Reply Comments at 5S.
1e State of Utah Public Service Commission, Docket No: 11-035-104, Report and Order at 3
(octobe|l, 2012).
20 State of Utah Public Service Commission, Docket No: 07-035-T14, Annual Report for the Solar
Photovoltaic lncentive Program for the year 2012, Exhibit A at 4, Table 2. Resu/ts for Standard Economic
Tests (without free-idership).
22 ln Oregon, all program administrators (including ldaho Power) must comply with Public Utility
Commission of oregon ('OPUC") Order No. 94-590, requiring that measures and programs pass both the
UCT and TRC test or that utilities file with the OPUC for a cost-effectiveness exception.
IDAHO POWER COIVIPANY'S PETITION FOR CLARIFICATION OF ORDER NO. 34469 - 6
21 Order No. 34469 at 8.
efficiency will be carried out over the 2020 program year to synchronize with the
Company's annual planning cycle. The Company will also start the process for
implementing the UCT as the primary perspective as it moves into the next lntegrated
Resource Plan planning cycle, with a new DSM Potential Study based on the UCT
perspective, which the Company will initiate in the first quarter of 2O2O. This timeline
provides an opportunity for the Company to engage EEAG in the review of the impacts to
current and potential programs.
While it could be implied from the procedural context in which the issue was
framed, the Company wishes to ensure that a common understanding exists. ldaho
Power respectfully requests the Commission clarify that Order No. 34469 applies to only
the economic evaluation of DSM resources in integrated resource planning.
Respectfully submitted this 21st day of November 2019.
LISA D. NORDS M
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO, 34469 - 7
I HEREBY CERTIFY that on this 21"tday of November 2019 I served a true and
correct copy of IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF
ORDER NO. 34469 upon the following named parties by the method indicated below,
and addressed to the following:
Commission Staff
Matt Hunter
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-0074
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North Sixth Street
Boise, ldaho 83702
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_U.S. Mail
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City of Boise
Abigail R. Germaine
Deputy City Attorney
Boise City Attorney's Office
150 North Capitol Boulevard
P O. Box 500
Boise, ldaho 83701-0500
_Hand Delivered_ U.S. Mail
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o
Ki yT Executive istant
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION OF ORDER NO, 34469.8
CERTIFICATE OF SERVICE
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