20190408notice_of_application_order_no_34301.pdf

Office of the Secretary
Service Date
April 8,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )CASE NO.IPC-E-19-11
COMPANY'S APPLICATION FOR A )
DETERMINATION OF 2018 DEMAND-)NOTICE OF APPLICATION
SIDE MANAGEMENT EXPENSES AS )PRUDENTLY INCURRED )NOTICE OF
)INTERVENTION DEADLINE
)ORDER NO.34301
On March 15,2019,Idaho Power Company (the Company)applied for a Commission
order finding that the utility's demand-side management (DSM)expenses for the year 2018 were
prudentlyincurred.The Company seeks to recover $40,712,164 in deferred costs for its DSM
programs,which includes $33,560,433in Idaho Energy EfficiencyRider expenses,and $7,151,730
in demand response program incentives."DSM"generally refers to utility activities and programs
that encourage customers (i.e.,on the "demand-side"as opposed to the "generation side")to use
less overall energy or use less energy during peak usage hours.The Commission will allow the
utility an opportunityto recover its DSM expenses through rates if the Commission finds the
Company prudently incurred them.However,if the Commission finds the Company did not
prudentlyincur DSM expenses,then it will not allow the Company to recover them through rates
and the disallowed expenses will be borne by the utility's shareholders and not by customers.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the Company states its 2018 DSM efforts
included Northwest Energy Efficiency Alliance (NEEA)market transformation activities,energy
efficiency programs,demand response programs,and several educational initiatives.Application
at 2.The Company states these efforts resulted in energy savings that exceeded the savings target
specified in the Company's IntegratedResource Plan.Id.The Company states it achieved 183,378
megawatt hours (MWh)of incremental annual energy efficiency savings on a system-wide basis
in 2018.Id.at 4.The Company noted its energy efficiency programs saved 158,412 MWh,
comprising 43,651 MWh from the residential sector,95,759 MWh from the commercial/industrial
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sector,and 19,002 MWh from the irrigation sector.Id Additionally,the Company achieved 24,966
MWh of energy efficiency market transformation savings through NEEA initiatives.Id.
YOU ARE FURTHER NOTIFIED that the Company funds its Idaho programs through
the Idaho Energy EfficiencyRider,base rates,and the annual Power Cost Adjustment(PCA).Id
at 7.It funds its Idaho demand response incentive payments through base rates and the PCA.Id
With this Application,the Company asks the Commission to find that the Company prudently
incurred $40,712,164 in expenses to develop and run its DSM programs in 2018.Id The
Company states these expenses include $33,560,433 in Idaho Energy Efficiency Rider expenses
and $7,151,730 in demand response program incentive payments.Id In 2017,the Company made
an accounting adjustment of $89,304 relating to labor expenses that were part of the Rider expense.
Id.This accounting adjustment was reversed in 2018.Id Upon preparation of its Application and
supporting materials,the Company discovered an incorrect accounting entry was made in 2018 for
the MultifamilyEnergy Saving Program.Id.at 8.The correction is reflected in the "Current year-
end accounting adjustment"section of Exhibit No.2.Id
YOU ARE FURTHER NOTIFIED that the Company's Application describes the
Company's evaluation of its DSM programs and whether they were cost-effective in 2018.Id at
8.The DSM Report discusses the cost-effectiveness of the Company's DSM programs and energy
savings measures.Id In support of its Application,the Company submitted the prefiled testimony
of Pawel Goralski,Regulatory Analyst,an annual DSM Report,the results of its cost-effectiveness
analysis,and the third-partyprogram evaluation reports.Id
YOU ARE FURTHER NOTIFIED that the Company explains it used the following
benefit/cost tests to determine the cost-effectiveness of its energy efficiency programs and
measures:(1)the total resource cost test (TRC);(2)the utility cost test (UCT);and (3)the
participant cost test (PCT).'Id The Company reports that in 2018 its overall energy efficiency
portfolio was cost-effective,passing the TRC,UCT,and PCT,with ratios of 2.26,3.04,and 2.85
I The three tests examine a program's cost-effectiveness from differentperspectives.In summary,the TRC
compares program administrator costs and customer costs to utility resource savings.It demonstrates the full
incremental cost of the measure to both participants and the utility in the service territory as a whole.The UCT
compares program administrator costs to supply-side resource costs,assessing costs and benefits to the utility and its
ratepayers.The PCT compares the costs and benefits of the customer installing the measure,and assesses whether
program participants will benefit over the measure's life.
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respectively.Id.Of the Company's 16 Idaho energy efficiencyprograms,12 programs passed the
TRC and UCT.Goralski Direct Testimony at 17.Further,all energy efficiency programs with
customer costs passed the PCT.Id.Althoughthey are not cost-effective,Idaho Power intends to
continue to work towards greater cost-effectiveness for the Weatherization Assistance for
Qualified Customers Program,Weatherization Solutions for Eligible Customers Program,and the
Heating and Cooling EfficiencyProgram,because they offer benefits that are difficult to quantify.
Id.;Application at 9.
YOU ARE FURTHER NOTIFIED that when assessing the cost-effectiveness of its
demand response programs the Company did not calculate a benefit/cost ratio.Application at 10.
Rather,the Company determinedthe cost-effectiveness of its demand response programs based on
the $16.7 million demand response portfolio value specified in Commission Order No.32923,and
estimated that the programs would have cost approximately 11.3 million on a system-wide basis
and are less than the value of the demand,calculated to be $19.8 million.Id.
YOU ARE FURTHER NOTIFIED that the Company states independent,third-party
consultants provide impact and process evaluations to verify that program specifications are met,
recommend improvements,and validate program-related energy savings.Id.In 2018,three
program evaluations,one program process evaluation,one savings determination analysis,and
three program summary analyses were completed.Id.
YOU ARE FURTHER NOTIFIED that the Application and supporting workpapers,
testimonies and exhibits have been filed with the Commission and are available for public
inspection during regular business hours at the Commission offices.The Application and
testimonies are also available on the Commission's web site at «·.Click on the
"File Room"tab at the top of the page,scroll down to "Open Electric Cases,"and then click on
the case number as shown on the front of this document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code.The Commission may
enter any final order consistent with its authorityunder Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure,IDAPA 31.01.01.000 et seq.
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NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this matter to
obtain parties'rights of participation must file a Petition to Intervene with the Commission
pursuant to this Commission's Rules of Procedure 72 and 73,IDAPA 31.01.01.072 and .073.
Persons who wish to intervene as a party must file a Petition to Intervene no later than 21
days after the date of service of this Order.Persons desiring to present their views without
parties'rights of participation are not required to intervene and may present their comments
without prior notification to the Commission or the parties.
YOU ARE FURTHER NOTIFIED that after the intervention deadline runs,the
Commission Secretary shall issue a Notice of Parties.Staff then will informally confer with the
parties about appropriate scheduling for this case.
ORDER
IT IS HEREBY ORDERED that persons desiring to intervene in this case for the
purpose of obtaining parties'rights of participation must file a Petition to Intervene with the
Commission,pursuant to Rules 72 and 73,IDAPA 31.01.01.72-73,no later than 21 days after the
service date of this Order.
IT IS FURTHER ORDERED that after the Commission Secretary issues a Notice of
Parties,Staff will informally confer with the parties about an appropriate schedule.
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ORDER NO.34301 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of April 2019.
PAUL KJELLA I R/PRESIDENT
KRIFTINE RAPER,COMMISSIONER
ERIC A ERSO ,COMMISSIONER
Diane M.Hanian
Commission Secretary
IPCEl911 Nie of App_Int_mb
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