20201130Comments.pdf

DAYN HARDIE
DEPUTY ATTORNEY GENERAL 3:00IDAHOPUBLICUTILITIESCOMMISSION
PO BOX 83720
BOISE,IDAHO 83720-0074
[phone]
IDAHO BAR NO.9917
Street Address for Express Mail:
11331 W CHINDEN BLVD,BLDG 8,SUITE 201-A
BOISE,ID 83714
Attorneyfor the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )COMPANY'S APPLICATION FOR A )CASE NO.IPC-E-20-15DETERMINATIONOF2019DEMAND-SIDE )MANAGEMENT EXPENSES AS )PRUDENTLY INCURRED )STAFF'S COMMENTS
)RESPONDING TO THE
)COMPANY'S PETITION FOR
)CLARIFICATION AND/OR
)RECONSIDERATION
STAFF OF the Idaho Public Utilities Commission,by and through its Attorney
of record,Dayn Hardie,Deputy Attorney General,submits the followingcomments.
BACKGROUND
On March 13,2020,Idaho Power Company ("Company")applied to the
Commission for an order finding that the Company's demand-side management ("DSM")
expenses for 2019 were prudentlyincurred.The Company requests the Commission find
the Company prudently incurred $45,079,479 in deferred costs for 19 DSM programs,
which included $38,083,244 in Idaho Energy EfficiencyRider expenses and $6,996,236
in Demand Response program incentives.
On April 6,2020,the Commission issued a Notice of Application and Notice of
Intervention Deadline.Order No.34620.Boise City,Idaho Conservation League,
STAFF COMMENTS 1 NOVEMBER 30,2020
Industrial Customers of Idaho Power,and Idaho IrrigationPumpers Association all
intervened in this matter.
On August 27,2020,Staff filed comments recommending disallowance of
$51,165 in labor expenses and supporting the rest of the Company's Application.
On October 30,2020,the Commission issued its final Order No.34827,
disallowing $51,165 in labor expenses.
On November 20,2020,the Company filed a "Petition for Clarification and/or
Reconsideration"concerning the method for evaluation of the 2%labor cap previously
ordered by the Commission and establishment of a new baseline necessary to comply
with the Order.
Commission Staff now files these comments supporting the Commission's
position in Order No.34827 and offering additional analysis on the methods it used when
recommending disallowance in its August 27,2020 comments.
STAFF ANALYSIS
In Case No.IPC-E-17-03,the Commission found it "reasonable to include actual
wage increases up to a 2%cap in the DSM Rider."See Order No.33908.The
Commission did not order a specific method for applying the cap,nor did it determine a
specific base year for which the cap applied.
In Case No.IPC-E-18-03,the Company incurred $3,296,704 in Rider-funded
labor expense-an increase of 6.44%over the previous year.However,the Company
applied the 2%cap to the average labor expense per full-time equivalent employee
("FTE").In Order No.34141,the Commission found the Company's labor expenses
prudent,but specifically stated that "we will consider the methodology for calculating the
2%cap in the next general rate case."
In the current case,the Company's total labor expense per FTE for 2019 was a
3.6%increase over 2018.In Order No.34827,the Commission found it "reasonable to
disallow the amount above the cap -$51,165-of the Company's 2019 DSM total labor
expenses."The Commission stated the disallowance was consistent with its decisions in
Case Nos.IPC-E-17-03 and IPC-E-18-03.
STAFF COMMENTS 2 NOVEMBER 30,2020
In the Company's Petition for Clarification and/or Reconsideration,it now claims
that the cap on Rider-funded labor expenses is a cumulative cap based on a 2016 test year
escalated annually by 2%.There is not a single reference in any Commission order,any
Application by the Company requesting prudency determination of DSM expenses,or
testimony provided by the Company that presents total labor expenses compared to a
2016 base year.
Staff has consistently applied the annual 2%cap to the previous year's average
labor expense per FTE,as evidenced in its comments in IPC-E-19-11:
In 2018,the Company incurred $3,262,501 in Rider-funded labor expense:
a 1%decrease in total DSM labor expense charged to the Tariff Rider.
However,on a full-time equivalent basis,the average increase was 1.3%,
indicating that employees charged less of their time to the Tariff Rider.TheCompany's labor expense is below the 2%cap established by the
Commission and Staff recommends it be approved.
In IPC-E-19-11,Staff clearly applied the 2%cap to the previous year's average
labor increase per FTE,and the method was accepted by the Commission.Staff has
never compared labor expenses to a base year other than the previous year.
Based on the record in this case,and the records of each case since the 2%cap
was established in IPC-E-17-03,the method applied by Staff has been consistent.The
Commission's decision in this case regarding the disallowance of $51,165 should stand.
The Company's Petition for Reconsideration should be denied but Clarification would be
appropriate.
STAFF RECOMMENDATIONS
The Commission should clarify that the proper method for applying the 2%cap
established in IPC-E-17-03 is based on the previous year's average labor increase.This
eliminates the ability to manipulate the 2%cap by shifting lower-cost employees'time to
the DSM rider.Staff agrees the proper labor expense calculation for DSM should be
examined in detail in the Company's next general rate case.Until then,Staff believes the
best method for applying the 2%cap is based on average labor.
STAFF COMMENTS 3 NOVEMBER 30,2020
Respectfully submitted this day of November 2020.
Dayn Hardi
Deputy Attorney General
Technical Staff:Donn English
i:umisc/comments/ipce20.15dhde responseto reconsideration
STAFF COMMENTS 4 NOVEMBER 30,2020
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 30th DAY OF NOVEMBER 2020,SERVED THE FOREGOING STAFF'S COMMENTS RESPONDING TO THECOMPANY'S PETITION FOR CLARIFICATION AND/OR RECONSIDERATION,IN CASE NO.IPC-E-20-15,BY E-MAILING A COPY THEREOF,TO THE
FOLLOWING:
LISA D NORDSTROM CONNIE ASCHENBRENNERIDAHOPOWERCOMPANYIDAHOPOWERCOMPANY
PO BOX 70 PO BOX 70
BOISE ID 83707-0070 BOISE ID 83707-0070
E-mail:[e-mail] E-mail:[e-mail]
[e-mail]
ERIC L OLSEN ANTHONY YANKEL
ECHO HAWK &OLSEN PLLC 12700 LAKE AVE,UNIT 2505
505 PERSHING AVE,SUITE 100 LAKEWOOD OH 44107
PO BOX 6119 E-mail:tony yankel.net
POCATELLO ID 83205
E-mail:elo echohawk.com
PETER J RICHARDSON DR DON READING
RICHARDSON ADAMS PLLC 6070 HILL ROAD
515 N 27TH STREET BOISE ID 83703
PO BOX 7218 E-mail:[e-mail]
BOISE ID 83702
E-mail:[e-mail]
BENJAMIN J OTTO ABIGAIL R GERMAINE
IDAHO CONSERVATION LEAGUE DEPUTY CITY ATTORNEY
710 N 67"STREET BOISE CITY ATTORNEY'S OFFICEBOISEID83702105NCAPITALBLVD
E-mail:[e-mail] PO BOX 500
BOISE ID 83701-0500
E-mail:[e-mail]
SECRETAR /
CERTIFICATE OF SERVICE