20191218Comments.pdf

JOHN R. HAMMOND, JR.
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOTSE, rDAHO 83720-007 4
[phone]
IDAHO BARNO.5470
IN THE MATTEROF IDAHO POWER
COMPANY'S APPLICATION TO FUND ITS
CONTINUED PARTICIPATION IN THE
NORTHWEST ENER(;Y EFFICIENCY
ALLIANCE THROUGH THE ENERGY
EFFICIENCY RIDER F OR 2O20.2024
RECEIVED
1Cl9 OEC lB PH 3: lr I
Street Address for Express Mail:
I I33I W CHINDEN BLVD, BLDG 8, SUITE 201.A
BOISE, ID 837I4
Attorney tbr the Commission Stafl
BEFORE THE IDAHO PUBLIC UTILITIf,S COMMISSION
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CASE NO. IPC-E.I9-34
CO}INIENTS oF THE,
CO}TNIISSION STAFF
The Staff of the Idaho Public Utilities Commission, submits the following comments
regarding the above referenced case.
BACKGROUND
On October 21,2019, Idaho Power Company ("ldaho Power" or "Company") filed an
Application seeking Commission authorization for the Company's continued participation in the
Northwest Energy Efficiency Alliance ('NEEA") for 2020-2024 and confirmation that its
participation be funded by the ldaho Energy Efficiency Rider ("Rider"), The Company requests
the Application be processed by Modified Procedure. Application at 7 .
In its Application, Idaho Power characterizes NEEA as a non-profit organization whose
purpose is to maximize energy efficiency in the Northwest via the acceleration and adoption of
energy-efficient products, services, and practices through market transformation. Id. at 1-2.
STAFF COMMENI'S DECEMBER I8,2019
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Idaho Power states NEEA is funded by Northwest utilities including Idaho Power, the Energy
Trust of Oregon and the Bonneville Power Administration. 1d. at 2.
Idaho Power represents it began participating in NEEA in 1997. ld. The Company asserts
from 1997-2018 NEEA has delivered 1,740 average megawatts ("aMW") of total regional energy
savings,582 aMW of which are Net Market Effects energy savings. 1d.l Idaho Power represents
that during this period the Company's allocated portion of NEEA's savings was 371,527
megawatt-hours or 42.41 aMW. /d. Besides these savings, Idaho Power asserts by participating
in NEEA it can leverage its market transformation investment by building on NEEA's pooled
resources, suppliers, market research and program design in Washington, Oregon, Montana and
Idaho. Id. Idaho Power also asserts its participation inNEEA enables it to inlluence the direction
of NEEA's activities to bring direct benelit to its customers. Id
Idaho Power asserts NEEA's 2020-2024 Strategic and Business Plans ("Plan") have two
strategic goals in the 2020-2024 period:
(1) transformation - sustain a portfolio ofinitiatives and support functions that
enable more cost-effective elficiency to occur sooner, in larger amounts
and/or at a lower cost than otherwise expected, and (2) operations -
continuously improve organizational culture and performance efficacy,
ensure accountability and transparency, and stdve for innovation in service
to the benefit ofall stakeholders.
Z/. at 3. Idaho Power also states that related to its transformation goal, NEEA is pursuing
market developmcnt initiatives for Heat Pump Hot Water Heaters, Retail Product Portfolio,
Super-Efficient Dryers, Luminaire Level Lighting Controls, and Codes and Standards. /d.
The Company states NEEA's Plan intends to deliver 360-500 aMW of total regional
energy savings by utilizing approximately $159.4 million invested by regional stakeholders. 1d.
at 4. Based on its customer counts and energy sales relative to the region, Idaho Power states its
funding share is approximately 9.2 percent or $ 14.7 million during 2020-2024. ld.
The Company states that since 2002 the Commission has authorized Idaho Power to
recover the costs for Demand-Side Management programs and NEEA participation from the
Rider. ,1d. at 3.
I ldaho Power states Net Market Effects are savings associated with market change and not counted as locally
incented savings or baseline savings. ,ad at footnote 2.
)STAFF COMMENTS DECBMBER I8,2019
Idaho Power asserts it must demonstrate its customers benet-rted from its participation in
NEEA before it can receive a Commission determination that it prudently used its Rider funds.
Id. at4. The Company alleges it has evaluated the anticipated cost-effectiveness of NEEA's Plan
and the Company's continued participation in NEEA. 1zl. As a result, Idaho Power asserts it has
negotiated safeguards in ils 2020-2024 Funding Agreement with NEEA to ensurc the use of Rider
funds for 2020-2024 is a prudent application of customers' funds. 1d at 4-5; see a/so Attachment
3 to the Application.
STAFF ANALYSIS
Staff recommends that the Commission authorize Idaho Power's continued participation
in NEEA for the 2020 - 2024 funding cycle and that its participation be funded by the Idaho
Energy Efficiency Rider. Idaho Power's Funding Agreement with NEEA is approximately $2.9
million annually for five years, which is about 7 percent ofldaho Power's annual demand-side
management expenses. Staff believes that NEEA slill appears to provide cost-efflective energy
efficiency through market transformation for customers in Idaho Power's service territory.
Staffunderstands that the main value ofNEEA is its leverage as a regional organization
with large retailers, manufacturers, and federal agencies that an individual utility or its contractor
would not have. Intemational retailers and manuf'acturers, such as Walmart and A.O. Smith, are
very unlikely to change stocking or production practices based on an incentive in a single utility's
service territory. But because NEEA can o(fer financial incentives across a four-state market, and
sometimes in coordination with California as well, retailers and manufacturers are willing to
respond to these incentives to stock and produce more etilcient appliances. As a result of these
"upstream" incentives, customers throughout the region find and buy higher efliciency appliance
options at their local retailers without local utilities incurring the much greater expense of
engaging and incenting individual customers.
This dynamic is also true ofNEEA's work with federal agencies on efficiency standards.
The participation, feedback, and formal comments ofNEEA on federal standards almost certainly
has a higher impact on the outcome ofthose proceedings because NEEA is a regional voice
speaking on behalfof 13 million customers, rather than a single utility speaking for its fraction of
those customers.
STAF-F COMMENTS DECEMBER I8.20193
The Company stated that NEEA's energy savings generated by codes and standards has
significantly increased over the years and now constitutes 83 percent of NEEA's reported savings,
Staffnotes that enacting efficiency in codes and standards is a positive long-term outcome ol
utility programs - it means that the efficient technology is so well-understood and available that it
becomes the minimum requirement, which means that utilities no longer need to offer financial
incentives in order to acquire those savings.
Staff acknowledges that while regional coordination on market transformation can have
significant benefits for customers, aligning the pref'erences and practices of a disparate group of
funders can be challenging. In particular, Staff recognizes that it can be difficult to allocate costs
and benefits in market translbrmation across funders with the same precision that is possible with
local utility programs. This is not ideal, but Staff believes that in addition to providing leverage
with national and intemational entities, pooling regional resources also provides risk mitigation
for critical work in emerging technologies that generally provides benefits that exceed costs and
would not otherwise be achieved.
Although NEEA's market transformation work has many benefits, it is important that it
remain cost-eff'ective. Staff appreciates the additional cost-effectiveness analysis on NEEA
savings conducted by the Company, particularly using Idaho Power-specific avoided costs to
determine the value ofeach initiative. However, Staff reiterates the Company's explanation that
its analysis only included the costs and benefits olenergy efficient appliances (for example, water
heaters) sold in a single year, and therefore did not include the costs and benefits ofenergy
efficient appliances forecasted to be sold in all twenty years ofthe program lil'e. The savings
generated by appliances sold in future years as a result of market transformation are a critical
aspect of the value that distinguishes NEEA's work fiom local utility efficiency programs.
Staff will continue to monitor the cost-effectiveness of NEEA's initiatives in Idaho
Po*'er's service teritory, and is therefore not opposed to the Company conducting independent
evaluation, verification, and measurement of NEEA's initiatives as it does for its local programs
and described in the Funding Agreement.
Staffnotes that the Funding Agreement includes several provisions not included in
previous NEEA Funding Agreements that release Idaho Power from its funding obligations if
circumstances change. Staffbelieves these are reasonable provisions that provide a safeguard lor
customer funds.
4STAFF (]OMMENTS DECEMBER 18.20I9
STAFF RECOMMENDATION
Staff recommends the Commission authorize Idaho Power's continued participation in
NEEA for the 2020 - 2024 funding cycle and that its participation be funded by the Idaho Energy
Efficiency Rider.
Respectfully submitted this day of December 2019
Jo Hammond, Jr.
Attomev General
Technical Staff: Stacey Donohue
i:umisc:commenls/ipcol9.34jhsd comments
5STAFF COMMENTS DECEMBER 18,20I9
CERTIFTCATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS ISTII DAY OII DECEMBER 2019,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC.E.I9.34, BY MAILING A COPY THEREOF, POST'AGE PREPAID, TO THE
FOLLOWING:
LISA D NORDSTROM
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOISE, ID 83701-0070
E-mail : lnordstrom(Z)idahopower.com
doc ketsiziti dahopower. corn
THERESA DRAKE
IDAHO POWER COMPANY
PO BOX 70
BOISE rD 83707-00'70
E-mail : ldrake(a)idahopower.conr
.L ll"e.*
SECRETARY,,l
.'P'1'1Y16ATE OF SERVICE