20201118Comments.pdf

MATT HUNTER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10655
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BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORITY TO REVISE THE ENERGY
EFFICIENCY RIDER, TARIFF SCHEDULE 91
CASE NO. IPC-8.20-33
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission comments as follows on Idaho Power
Company' s Application.
BACKGROUND
On August 2l,2020,Idaho Power Company ("Company") applied to the Commission for
approval to increase the collection percentage of the Energy Efficiency Rider ("Rider"), tariff
Schedule 91. The Rider was created by the Commission in OrderNo. 29026 to fund demand-side
management ("DSM") programs and is set as a percentage of the Company's base rate revenues.
The Company proposes the Rider percentage be increased from 2.75 percentto 3.1 percent. The
Company explains that this percentage change is intended to closely match the Company's request
in Case No. IPC-E-20-32 "to remove the revenue requirement associated with the Boardman coal-
fired plant scheduled to cease operations at the end of 2020." Application at 3. The Company
also requests a minor housekeeping edit in Schedule 91 be approved to remove reference to an
expired tariff schedule from its applicability.
STAFF COMMENTS NOVEMBER 18, 2O2O
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If the Company's Application is approved as filed, the Company's current billed revenue
would increase by $3.7 million (0.31 percent). The Company notes that the average residential
customer using 950 kilowatts per month would see approximately a $0.29 increase in their
monthly bill. If the Company's concurrent Application in Case No. IPC-E -20-32 is also approved
as filed, the combined impact of the two cases would be a net decrease of $314,922 in billed
revenue, a 0.03 percent reduction. The combined impact of Commission approval of the
Applications in this case and Case No. IPC-E-20-32 would be a $0.02 decrease in the average
residential customer' s monthly bill.
Previous Changes to Schedule 91
The Schedule No. 91 rate was established in 2002 at0.5 percent. On June 1, 2005, the
ratewasincreasedto 1.5percent. OnJune 1,2008,therateincreased to2.5 percent. In2009,the
rate was increased again to 4.75 percent. In 2011, the rate was decreased to 4 percent, and $10
million was transferred from the Power Cost Adjustment (PCA) balance to the Rider balance.
Since that date, $41 million has been transferred in reverse, from the Rider balance to the PCA,
with $10 million transferred in2074, $4 million in both 2015 and 2016, and $13 million 2017.
Also in 2017, the Rider was reduced to a 3.75 percent rate and the annual transfers to the PCA
were eliminated. On June 1,2019, the rate was decreased to its current 2.75 percent.
STAFF ANALYSIS
Staff has reviewed the Application and Company forecasts and supports the Company's
request to increase the Schedule No. 9l Energy Efficiency Rider rate from 2.75 percent to 3.1
percent of base rate revenues. The proposed increase will mitigate the growing under-collected
balance in the Company's 2020-2021forecasts of the Rider account activity while allowing the
Company time to update a longer-term analysis of energy savings targets in the 2021lntegrated
Resource Plan ("IRP"). By implementing the 0.31 percentl increase in billed revenue to coincide
with the proposed decrease in Case No. IPC-E-20-32, the impact to customers will be offset. A
future rate increase will likely be necessary to fund additional energy efficiency savings identified
in the 2021 IRP.
I The customer impact is best calculated using the increase in billed revenues.
STAFF COMMENTS NOVEMBER 18,20202
The Company's updated Rider forecast shows the currently authorized rate in Schedule
No. 91 would result in revenues of $32.6 million in202L The Company's current low and high
forecasts for energy efficiency expenses in2021are $33.2 million and $38.8 million, respectively.
As of July 2020, the rider balance was underfunded by $9.1 million. Application, Attachment 1.
The Commission last approved a Rider rate change in Case No. IPC-E-19-06. At that
time, the Company said that it projected it would not need to adjust its rate until at least2)2l.
Since that time, the Company's DSM expenses significantly exceeded forecasts, with Commercial
and Industrial Custom Projects in particular outpacing projections. Application at 4. The
Commission reviews these expenses in annual DSM prudency cases. The Commission deemed
almost all of the Company's 2019 DSM expenses as prudent in Case No. IPC-E-20-15 and will
consider its2020 expenses in aprudency case in202l.
Based on its updated forecasts presented in this case, the Company will continue to have
an underfunded Rider balance, meaning DSM expenses exceed revenues collected from the Rider.
The Company said it will consider fuither change to the Rider rate in 2021, after its latest long-
term forecast of energy efficiency expenses is completed as part of its 2021 Integrated Resource
Plan. See Response to Production Request No. 1.
The Rider balancing account enables the Company to recover its prudently incurred DSM
costs without affecting the level of DSM or number of programs the Company will pursue. The
Company does not modify its energy efficiency targets or efforts based on the level of DSM
funding, rather it forecasts energy efficiency savings and necessary funding based on the
economic and achievable savings identified through third-party Conservation Potential
Assessments. Consistent with prior Commission orders, the Company should continue to pursue
all available cost-effective DSM, even as costs exceed projected expenses.
Allocation Between Schedules
Staff reviewed Attachment 3 of the Company's Application, which showed the effects of
the proposed rate increase to different customer classes. Staff determined that the Company
properly applied the proposed new rate to each customer class.
Customer Impacts
Staff investigated the trend in previous changes to Schedule No. 9l , the cost allocation
between schedules, and customer impacts from the proposed changes. The proposed increase to
STAFF COMMENTS 3 NOVEMBER 18,2020
3.1 percent in Schedule No. 91 rates would raise costs by about $3.50 per year for a residential
customer using 950 kwh per month. Application at 5. Combined with the rate reduction
proposed in Case No. IPC-E-20-32, filed concurrently with the Commission, customers would see
a yearly decrease in rates of approximately $0.25 . Id. at 6_
Schedule 91 Administrative Modification
Schedule 91 references expired tariff Schedule 39, Street Lighting Service Supplemental
or Variable Energy ("Schedule 39"). Schedule 39 expired on May 11,2071, and subsequent
updates to Schedule 9l overlooked removing references to Schedule 39. Staff supports the
Company's request in this case to remove outdated references to Schedule 39 in Schedule 91.
CUSTOMER NOTICE AND PRESS RELEASE
The Company's included its press release and customer notice with its Application. Each
document addresses two cases: this case and the Company's Application to decrease customer
rates to reflect cessation of Boardman Power Plant operations, Case No. IPC-E-20-32. Staff
reviewed the documents and determined both meet the requirements of Rule 125 of the
Commission's Rules of Procedure. IDAPA 31.01.01.125. The notice was included in bills mailed
to customers beginning September 4 and ending October 2,2020, providing customers with a
reasonable opportunity to file timely comments with the Commission by the November 18,2020
deadline. As of November 17,2020, no customer comments were filed.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the Company's Application to increase
Schedule No. 91 Energy Efficiency rates to 3.1 percent, effective January l,202L Additionally,
Staff recommends the Commission approve the Company's request to remove references to
expired Schedule 39.
STAFF COMMENTS NOVEMBER 18,20204
Respectfully submitted this I 3lt
day of November 2020
Matt Hunter
Deputy Attorney General
Technical Staff: Brad lverson-Long
Rachelle Farnsworth
Curtis Thaden
i:umisc/comments/ipce20.33mhbl comments
5STAFF COMMENTS NOVEMBER 18, 2O2O
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 18TH DAY OF NoVEMBER 2020,SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-20-33, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
LISA D NORDSTROM
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: lnordstrom(4)idahopower.com
d o c ke ts (li d ah opower. com
CONNIE ASCHENBRENNER
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
PETER J RICHARDSON
RICHARDSON ADMS PLLC
5I5 N 27TH STREET
BOISE ID 83702
E-MAIL : peter:4)r:ichardsor:adams.com
DR DON READING
6070 HILL ROAD
BOISE ID 83707
E-MAIL: dreadin [e-mail]
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
710 N 6TH STREET
BOISE ID 83702
E-MAIL: botto(iidah<iconser:vation.org
SECRETAR
CERTIFICATE OF SERVICE