20191213final_order_no_34503.pdf

Office of the Secretary
Service Date
December 13,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )OF IDAHO POWER COMPANY FOR A )CASE NO.IPC-E-19-11
DETERMINATION OF 2018 DEMAND-SIDE )MANAGEMENT EXPENSES AS )PRUDENTLYINCURRED )
)ORDER NO.34503
On November 21,2019,Idaho Power Company filed a Petition for Clarification in
which it asked the Commission to clarify "that the change in cost-effectiveness test [in Order No.
34469]is intended to apply to energy efficiency resources in the resource planning context,not all
supply-side resources."On November 27,2019,Commission Staff filed a Cross-Petition,and
Idaho Conservation League (ICL)filed an Answer to the Petition for Clarification.
After reviewing the record and Order No.34469,we grant the Company's Petition.
BACKGROUND
On March 15,2019,Idaho Power applied for a Commission order finding that the
utility's demand-side management (DSM)expenses for the year 2018 were prudently incurred.
The Company sought to recover $40,712,164 in deferred costs for its DSM programs,which
includes $33,560,433 in Idaho Energy Efficiency Rider expenses,and $7,151,730 in demand
response program incentives.The Company also asked the Commission to find that including "all
cost-effective 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."Application at 2.ICL and City of Boise (Boise City)intervened in the case.
Order Nos.34306 and 34328.
Staff,ICL,and Boise City filed comments,all opposing the use of the TRC as the
primary cost efficiency perspective for integrated resource planning,and recommending the
Commission adopt the utility cost test (UCT)as the most appropriate test for integrated resource
planning.
IdahoPower filed reply comments,reiterating its request that the Commission find that
the Company "should continue to rely on the TRC test perspective when evaluating the amount of
ORDER NO.34503 1
energy efficiency included in long-term resource planning."Company Reply Comments at 10
(emphasis added).
On October 31,2019,the Commission issued Order No.34469.While noting that "all
three of the commonly used perspectives...provide an insight helpful to utilities,customers,and
regulators during the lifecycleof an energy efficiencyprogram,"the Commission found that "there
must be a single perspective during the integrated resource planning stage of a program's
lifecycle."The Commission concluded:
We find that the UCT perspective is the appropriate perspective for
integrated resource planning because it includes only those costs and benefits that
the utility incurs to provide service.By contrast,the TRC includes voluntary
participant costs and benefits that will not be incurred by the utility or impact rates.
While the Companycorrectly points out that it is this Commission's "desire to keep
costs low for Idaho customers,"we have no statutory duty to ensure that voluntary
participants in the Company's energy efficiency programs are making a cost-
effective decision by participating.Indeed,the public should have the freedom to
participate in energy efficiencyprograms that,while perhaps not cost effective for
the voluntaryparticipants,are cost effective for the utility's ratepayers as a whole.
Therefore,we deny the Company's request to use the TRC perspective as
the primary perspective for integrated resource planning.The UCT perspective will
lead to the most economic planning outcome and will best serve ratepayers.
Order No.34469 at 8-9.The Commission ordered that Idaho Power use the UCT perspective for
integrated resource planning.
THE COMPANY'S PETITION FOR CLARIFICATION
Idaho Power petitioned the Commission for clarification under Procedural Rule 325,
IDAPA 31.01.01.3251.Specifically,the Company requested the Commission clarify "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."Petition for Clarification at 3.
The Company noted the written comments from Commission Staff,ICL,and Boise
City argued from the perspective of energy efficiencyresources.The Company also pointed out
the Commission's rationale for its Order was from an energy efficiency program perspective.
I IDAPA 31.01.01.325 states:
Any person may petition to clarify any order,whether interlocutory or final.Petitions forclarificationfromfinalordersdonotsuspendortollthetimetopetitionforreconsiderationorappeal
a final order.A petition for clarification may be combined with a petition for reconsideration or
stated in the alternative as a petition for clarificationand/or reconsideration.The Commission may
clarify any order on its own motion.
ORDER NO.34503 2
Idaho Power concluded that,"[b]ased on the context of arguments made by the Company,Staff,
ICL,and [Boise City]in this case,the issue before the Commission was the appropriate cost-
effectiveness test to apply to the evaluation of energy efficiencyresources in resource planning."
Id.at 5.
If the Commission's directive to "use the UCT perspective for integrated resource
planning"applies to supply-side resources,Idaho Power argued (as it did in its reply comments)
that certain supply-side resources that appear to be "no cost"would in fact shift costs to ratepayers.
Id.at 5;see Company Reply Comments at 2-6.Thus,Idaho Power seeks to clarify that Order No.
34469 does not apply to supply-side resources.
STAFF'S CROSS-PETITION FOR CLARIFICATION
Staff's Cross-Petition requested that the Commission "clarify that Order No.34469
applies only to DSM resources for integrated resource planning."Staff Cross-Petition at 3.Staff
noted that all of the parties,except for Idaho Power in its reply comments,argued in the context
of DSM.Staff therefore believes this is not the appropriatecase to decide what cost-effectiveness
perspective should be used for evaluating supply-side resources as part of integrated resource
planning,and that Idaho Power should file a new proceeding if it wishes to know the answer to
this question.
ICL'S ANSWER TO PETITION FOR CLARIFICATION
ICL's Answer to Idaho Power's Petition for Clarification was substantively similar to
Staff's filing,but did not ask the Commission to clarify Order No.34469.ICL stated that "the
entire docket [in this case]was about energy conservationprograms and not generation resources,"
and noted ICL "never argued to apply the [UCT]to generationresources because doing so would
have been outside the scope of this docket..."ICL Answer at 1.ICL pointed out that,because the
Company only considers generation resources it owns or contracts with for utility planning,the
costs to the utility are already clear for generation resources.ICL's conclusion:"Commission
Order 34469 speaks for itself."Id.at 2.
DISCUSSION AND FINDINGS
After reviewing Idaho Power's Petition for Clarification and the record in this case,we
grant the Petition.While we believe our final order was clear when read in the context of the case,
we understand Idaho Power's desire to ensure a common understandingbetween the parties.As
ORDER NO.34503 3
all parties acknowledge,this case has been about DSM programs from the beginning.211 WOuld be
outside the scope of this case for us to decide what cost-effectiveness test should be used for the
Company's supply-side resources in the integrated resource planning context.We clarify that our
directive in Order No.34469-"that Idaho Power use the UCT perspective for integratedresource
planning"-appliesto DSM programs in the integrated resource planning context,not to supply-
side resources.
ORDER
IT IS HEREBY ORDERED that Idaho Power's Petition for Clarification is granted.
The Commission's directive in Order No.34469-"that Idaho Power use the UCT perspective for
integrated resource planning"--applies to DSM programs in the integrated resource planning
context,not to supply-side resources.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order with regard to any
matter decided in this Order.Within seven (7)days after any person has petitioned for
reconsideration,any other person may cross-petition for reconsideration.See Idaho Code §61-
626.
2 As noted by Staff and ICL,only Idaho Power argued in the context of supply-side resources,and that within the
Company's Reply Comments.We wonder whether this Order on Clarification would have been necessary had the
Company not introduced new arguments in its Reply Comments.
ORDER NO.34503 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of December 2019.
PA KJELI A I R,PRESIDENT
KR TINE RAPER COMMISSIONER
ERIC ANDERSON,COMMISSIONER
ATTES :
Diane M.Ha ian
Commission Secretary
I:\Legal\ELECTRICilPC-E-19-11\ORDERS\IPCE1911_Clarification_midocx
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