20191021Richins Direct.pdf

RECEIVED
2019 OCT 2l Pl'l L: 26
i l'L 5L I\,' 'i lrri:! :3f,{i,llSSlOi!
BEEORE THE IDAHO PUBL]C UTILITIES COMM]SS]ON
IN THE MATTER OF THE APPLICATION
OE IDAHO POWER COMPANY FOR
AUTHORITY TO EUND ITS CONTINUED
PARTICIPATION IN THE NORTHWEST
ENERGY EFFICIENCY ALLIANCE
THROUGH THE ENERGY EFFICIENCY
RrDER EOR 2020-2024.
CASE NO. ] PC-E- 19-3 4
IDAHO POWER COMPANY
DIRECT TESTIMONY
OE
ADAM J. RICHINS
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O Please state your name, business address, and
with Idaho Power Company ("Idaho Power" or
name is Adam !1. Richins.My bus ines s
Idaho 83702.
President and
present position
"Company").
A. My
address is L22t West Idaho Street, Boi s e,
as Senior Vice
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am employed by Idaho Power
Chi-ef Operatlng Officer.
0.Please describe your educational background.
A. I have two Bachelor of Science degrees, one in
mathematics from the University of Puget Sound and a second
in civil engineering from Cofumbia University, In 2005, I
completed my Juris Doctorate degree from the Unj-versity of
Washington. Ej-na11y, I graduated from Harvard Business
School's Advanced Management Program in 2016.
O. Pl-ease describe your work experj-ence with
Idaho Power.
A. I began my employment with Idaho Power in 2011
as Senior Counsel in the Legaf Department acting as primary
counsel in areas of contractingr and procurement, litigation
and claims (non-public utifity commission), environmental
compliance, safety, and security. lo 2014, I accepted a
position as the General- Manager of Engineering and
Construction with responsj-bility over a business unit that
p1ans, designs, constructs, and maintains the Company's new
and existing transmissj-on systems, distribution facilities,
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Idaho Power Company
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1 and substations. Tn 20L1 , I was promoted to Vice President
2 of Customer Operations and Business Development, assuming
3 responsibility over a 600-ernployee business unit that
4 incfudes Idaho Power's customer operations, busj-ness
5 development. customer .re.Iations, and energy efficiency.
6 And in October 20t9, I was promoted to Senior Vice
7 President and Chief Operating Officer, adding oversight for
8 Power Supply, Transm.ission and Distribution Engineer.ing
9 Construction, Information Technology, and Enterprise
l-0 Integration to Customer Operations and Business Deve.Iopment
11 to my existing responsibilities.
1,2 O. What is the purpose of your testimony in this
l- 3 case ?
L4 A. The purpose of my testimony is to describe
15 Idaho Power's invo]vement with the Northwest Energy
16 Efficiency Al]iance ('NEEA") and how the Company negotiated
1,"1 an agreement to participate in the upcominq 2020-2024
18 funding cycle ("2020-2024 cyc1e"). I present Idaho Power's
19 request for authority to use the Idaho Energy Efficiency
20 Rider ("Rider") to fund the Company's continued
2L participation j-n NEEA.
22 I. IDNIO POWER' S IIN'OLVEMENT YIITH NEET
WhAt iS NEEA?
24 NEEA is a non-profit organization whose
25 ongoing purpose is to maximize energy efficiency in the
RICHINS, DI
Idaho Power Company
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1 Northwest via the acceferation and adoption of energy
2 efficient products, services, and practices through market
3 transformation. NEEATs definition of market Lransformati-on
4 is the strateglc process of intervening in a market to
5 create lasting change in energy efficiency. NEEA is funded
6 by Northwest utifities, the Energy Trust of Oregon ("ETO"),
7 and the Bonnevil-Ie Power Admlnlstration ("BPA"). This
8 strategic alliance is buil-t around recognition that greater
9 market transformation can be achieved across Washington,
10 Oregon, Montana, and Idaho by working in concert rather
1l than by working as individual states or organizations.
72 Establ-lshed rn L991 , fdaho Power has funded NEEA since the
13 organization's inception.
14 O. Other than providing funding, how has the
l-5 Company supported NEEA's regional efforts?
1"6 A. Idaho Power participates in a11 of NEEA's
77 committees and workgroups, inc-Iuding representation on the
18 Board of Directors.
19 fdaho Power representatives participate j-n the
20 Regional Portfofio Advisory Committee, Cost-Effectiveness
2l and Eval-uation Advisory Committee, Resj-dential Advisory
22 Committee, Commercial Advisory Committeef Regional Emerging
23 Technologies Advisory Committee, Idaho Energy Code
24 Coflaborative, Ductless Heat Pump Workgroup. Heat Pump
25 Water Heater Workgroup, and the Northwest Regional
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Idaho Power Company
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Strategic Market Pl-an for Consumer Products Group. The
Company al-so participates in NEEA's initiatives incfuding
the Res.idential Buj-l-dlng Stock Assessment, Commercial-
Building Stock Assessment, Commercial- Code Enhancement,
Strategic Energy Management, Commerciaf lighting - Reduced
Wattage Lamp Repfacement, Top-Tier Trade AIIy and Lumj,naire
LeveL Lighting Controls.
Theresa Drake, Idaho Power Customer Relations &
Energy Efficiency Senior Manager in the Customer Operations
11 NEEA Board
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Deve.J-opment Department, currently
of Directors, and the Company has
Board of Directors since NEEA's
serves on the
been a member
lnception in12 of the NEEA
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O. What do Idaho Power's customers receive from
the Company's partj-cipation in NEEA?
A. Historically, NEEA has prov.l-ded pooled
resources, market research, and program design in the
participating states, providing a greater Iikel-ihood that
market change within Idaho Power's service area wiff be
rooted in a regional market, at a scafe to which
manufacturers are more likely to respond and sustain
efforts. The Company's partj-cipation in NEEA has enabled
it to infl-uence the direction of NEEA's activities to bring
direct benefit to Idaho Power customers.
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Idaho Power Company
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Prom 1,997-2018, NEEA has defivered 1,740 average-
megawatts ("aMW") of total regional energy savings, 582 aMW
of which are Net Market Effects energy savings. Net Market
Effects are the savings assoc.iated with market change and
not counted as locaJ,Iy j-ncented savings or basel-ine
savings .
Since Idaho Power first began participating in NEEA
in L991 , Idaho Power's af l-ocated portlon of cumulative NEEA
savings from 1997 throuqh 2018 was 311,521 megar^ratt-hours
or 42.41 aMW. See Attachment 1 to the Appl-ication for
savings al-locat ion by year.
II . EVALUAEIOT{ OE 2O2O-2O24 PARTICIPATIOT{
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L4 2024 cycle?
15 A. NEEA has two strategic goals in the 2020-2024
Strategic Pl-an: (1) transformation - sustain a portfol-io
of inj-tiatives and support functions that enable more cost-
effective efficiency to occur sooner, in larger amounts
and/or at a fower cost than otherwj-se expected, and (2)
operations - continuousl-y improve organizational culture
and performance efficacy, ensure accountability and
transparency, and strive for innovation in service to the
benefit of all stakehofders.
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RICHINS, DI
Idaho Power Company
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NEEA pursuing
10 the 2020-2024 cycle
1I A. NEEA
What initiatives and ma.rket developments is
in the 2a2A-2024 cycfe to meet the
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transformation strategic goal- ?
A. As shown in the Cycle 6 Portfofio found in
Exhibit No. I to my testimony, the initiatives in market
development are Heat Pump Hot Water Heaters, Retaif Product
Portfolio, Super-Efficj-ent Dryers, Luminaire Level Lighting
Controls, and Codes and Standards.
O. What is NEEA'S overal-l- business plan to meet
transformation goal?
out ] ines
12 strategies which include the
five key transformation
following key obj ectives:
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a Eaerging Technology
o Track and assess nevr measures identified inthe Northi./est Power and Conservation Council
(*NWPCC") power pJ-ans and by Regional
Technical Eorum process.
o Scanning, tracking, and assessing new
technologies not captured in the NWPCC 7th
Power PIan.
Effective Portfolio Execution
o Implement initiatives that de]iver sustained
market change resulting in energy sav.ings,
capacity savings, and avoided carbon
emissions.o fncrease market channel leverage for funders
and the region.
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Codes
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aad Standards
Influence development of building energy
codes in each of the four states in region.
Continue to advance equipment efflciency
standards and improve test rating methods
and procedures.
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Idaho Power Company
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I See Pengilly DI, p. 32 rd.1 rd.
lrtarket Intelligence
o Provide research and marketthat lends vafue to program
planning needs for internal
pa rtners .
Convene and Collabolate
o Ensure aLI alliance stakeholder viewpoints
inform alliance work.
intel l igence
and business
and external
Eor more detail on the objectives and deliverables
L2 of the 2020-2024 Strategic PJ-an, please see Attachment 2 to
13 the Application, NEEA 2020-2024 Strategj-c and Business
L4 Pl-an.
15 O. How does the NEEA 2015-20).9 funding cycle
16 compare to the 2020-2024 cyc]-e with respect to totaf
71 el-ectric budget, energy savings, and Idaho Power funding
18 portion.
19 A. See Table 1 for the comparison of the 2015-
20 2019 NEEA funding cycJ-e to the 2020-2024 cycle.
2l TabJ.e 1 - NEEA Eunding Cycle CoE;>esison
2015-2019 Fundins Cycle 2O2O-2O24 FundinE Cycle
NEEA Electric Budget
ldaho Power Funding
ldaho Power Electric Funding Share
$168,?4L,447t'l
S 13,4s0,83s
8.0%
s1s9,3s0,000
S14,710,808
9.2%
5-Year Savinss Forecast(b)
Net Market Effectsl (aMW)
Co-Created2 (aMW)
Total Regiona 13 (aMW)
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70-100
115-152
360-500
(") 2015-2019 budget includes core and optional initiative bud8et, core budBet was S155,353,649.
rb) Because energy savings are evaluated over a zo-year program life forecast 2075-2019 and 2020-2024
cycle electric savlngs reflect savings to occur during the funding cycle period from NEEA efforts during
and preceding the funding cycles.
for the five ways NEEA leports savings.
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ldaho Power Company
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0 why
to other
does Idaho Power's funding portion
relative funders increase for the 2020-2024 cycle?
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A. Each utility's funding portion j-s cal-cufated
based on the utility's share of the regional customer
counts and energy sales. Two utilities who were projected
to contribute approximately $3 milfion in the 2A15-20L9
funding cycle are not funders of the 2020-2024 cyc1e, and
in the five years since the fast funding cycle, Idaho
Power's custome.r counts and energy safes have increased
more than all but one of the remainj-ng funders.
O, How does Idaho Power ensure this is among the
least cost market transformation options for customers?
A, Eor afl other programs, the Company foffows a
competitive procurement process through solj-citing for bids
through a Request for Proposal. Idaho Power has not
previously engaged in a competitive procurement process for
market transformation as historical-ly, to the best of the
Company's knovrledge no other providers existed. However,
with markets developing in this arena national-ly, we
befieve there may be other vendor opportunities in the near
future. If a competitive bidding process identifies a more
cost-effective vendor during ldaho Power's funding of the
2020-2024 cyc1e, the Company would have the option to end
NEEA funding with 365 days' notlce through the Termination
for Convenience cfause 1n the 2A2A-2024 Eunding Agreement,
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Idaho Power Company
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O. How are NEEA savings for fdaho Power customers
det e rmined ?
A. NEEA al-locates savings to each respective
funding organization based on the organization's funding
portion.
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Ehe 2020-2024
current cycle?
A.
Does NEEA indicate that el,ectric savings for
cyc.le are forecast to be slightly below the
Yes, a dip in Co-Created Savings is forecasted
10 due to previous investments phasing out and new initiatives
11 phasing in at a sl-ower rate. NEEA projects savings to
72 increase again after 2025 due to expected implementation of
L3 a federaf standard on electric water heaters that mandates
14 heat pump fevels of performance.a
15 O. During ldaho Power's evaluati-on of fundlng the
16 2020-2024 cycfe, did the Company identify any concerns
L7 regarding current NEEA reported energy savings?
18 A. Yes, as described in more detail in Mr.
L9 Pengilly's testimony, when evaluating the feasibility of
20 participating in the 2020-2024 cycle, the Company
2l identified potential concerns regarding the amount of
22 savings attributed to codes and standards, allocation
23 methodology of savings to Idaho Power customers, and cost-
24 effectiveness impacts of decl-ining avoided costs.
Application. Attachrnent 2, p. 23.
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Idaho Power Company
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O. Has the Company negotiated provisions in the
NEEA contract for Idaho Power to cease NEEA funding if j-t
is no longer reasonable for the Company to cont j-nue
participating in the 2020-2024 cycle?
A. Yes, the 2020-2024 Eundj-ng Agreement, inc]uded
as Attachment 3 to the Application, contains provisions
that a1low the Company to terminate NEEA funding if issues
.related to cost-effect ivenes s impacting regufatory approval
occur, as well as general provision to terminate for cause
or convenience with 365 days' written notj-ce to NEEA.
O. Did the Company identify any opportunities for
Idaho Power to validate customer benefits from funding
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A. Yes, the Company believes soJ-iciting a third-
pa.rty eval-uation of NEEA savings similar to how it performs
impact eval-uations on its own Demand-Side Management
("DSM") programs every 2-3 years to assess program
effectlveness in achieving its c.Ialmed savj-ngs would be
beneflciaf.
III . CONTINI'ED PARTICIPATIOI{ A}ID EI'NDTNG RECOMMEIIDATION
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2L O. Does Idaho Power befieve it is in the best
22 interest of its customers to move forward with funding NEEA
23 as proposed?
24 A. Yes, the Company j,s committed to the pursuit
25 of aI1 cost-effectj-ve energy efficiency and Idaho Power
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Idaho Power Company
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1 believes energy savings are occurring for its customers
2 based on NEEA's efforts in the Northwest region. The
3 Company believes using energy efficiency Rider funds for
Lhe 2020-2024 cycle is a prudent application of customer
5 funds, and the newly negotiated safeguards included j.n the
6 contract help ensure the Company can termj-nate funding for
7 the remainder of the funding cycle if its participation is
8 no longer reasonabl-e.
9 Q. If :Lhe 2020-2024 Funding Agreement is approved
10 by the Comnission, how does Idaho Power propose to account
11 for and recover the cost of its participation?
72 A. Idaho Power proposes to continue funding NEEA
13 expenses through the Rider. The Company wilf document NEEA
L4 funding amounts and annual savings resulting from its
15 participation in NEEA in the DSM annual report fil-ed wlth
16 the Comrnission on or before March 15th of each year.
77 O. Does this concfude your testimony?
18 A. Yes, it does.
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RICHINS, D]
Idaho Power Company
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ATTESTATION OF TESTI}IONY
STATE OF I DAHO
County of Ada
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I, Adam J. Rj-chins, having been duly sworn to
testify truthfully, and based upon my personal knowledge,
state the following:
I am employed by Idaho Power Company as Senior Vice
President and Chief Operating Officer and am competent to
be a witness in this proceeding.
I declare under penalty of perjury of the .Iaws of
the state of Idaho that the foregoing pre-fi1ed testimony
and exhibits are true and correct to the best of my
rnformation and beflef .
DATED this 21s: day of October 2019.
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19 Adam Richlns
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2l SUBSCRIBED AND SWORN to before me this 21st day of
22 October 2019.
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---"1'-lo,,*{
No ary Pu 1C-
{3
for Idaho
o)seResiding lda
My commiss j-on expires:D20
RICHINS, DI 12
Idaho Power Company
KIMBERLY K, TOWELL
coMMtssloN #16958
NOTARY PUBLIC
STATE OF IDAHO
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. !PC-E-19-34
IDAHO POWER COMPANY
RIGHINS, DI
TESTIMONY
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