20210315Application.pdf

MRG
McDOWELL RACKNER GIBSON PC
419 SW I Ith Ave, Suite 400 I Portland, OR 97205
March 15, 2021
VIA ELECTRONIC FILING AND HAND DELIVERY
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
Boise, Idaho 83720-0074
Re: Case No. IPC-E-21-04
2020 Demand-Side Management Expenses
Idaho Power Company's Application and Testimony
Dear Ms. Noriyuki:
ADAM LOWNEY
Diect (flJ3) 595-3926
a:[e-mail]
Enclosed for electronic filing, pursuant to Order No. 34781, in the above matter
please find Idaho Power Company's Application, Testimony of Pawel P. Goralski, and
the 2020 Demand-Side Management report, as well as Supplements. The DSM Annual
Report, including Supplements are being hand-delivered today.
If you have any questions about the enclosed documents, please do not hesitate
to contact me.
Sincerely,
~
Adam Lowney
Enclosures
main: 503 595 39221 fax: [phone] www.mrg-law.com
419 SW I }'h Ave, Suite 400 I Portland, Oregon 97205-2605
APPLICATION - 1
ADAM LOWNEY (ISB No.10456) McDowell Rackner Gibson PC 419 SW 11th Avenue, Suite 400
Portland, OR 97205 Telephone: [phone] Facsimile: [phone] [e-mail]
LISA D. NORDSTROM (ISB No. 5733) Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70
Boise, Idaho 83707 Telephone: [phone] Facsimile: [phone] [e-mail]
Attorneys for Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

OF IDAHO POWER COMPANY FOR A DETERMINATION OF 2020 DEMAND-SIDE
MANAGEMENT EXPENSES AS
PRUDENTLY INCURRED.
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)
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CASE NO. IPC-E-21-04
APPLICATION
In accordance with RP 052 and RP 201, et. seq., Idaho Power Company (“Idaho
Power” or “Company”) submits its Demand-Side Management 2020 Annual Report
(“DSM 2020 Annual Report”) and makes Application to the Idaho Public Utilities
Commission (“Commission”) for an order designating Idaho Power’s expenditures of
$40,477,043 in Idaho Energy Efficiency Rider (“Rider”) funds and $6,533,734 of demand
response program incentives funded through base rates and tracked annually through
APPLICATION - 2
the Power Cost Adjustment (“PCA”) mechanism, for a total of $47,010,777, as prudently
incurred demand-side management (“DSM”) expenses.
In support of this Application, Idaho Power represents as follows:
I. INTRODUCTION
1. The Commission has “consistently stated that cost-effective DSM programs
are in the public interest and has admonished electric utilities operating in the state of
Idaho to develop and implement DSM programs in order to promote energy efficiency.”
Case No. IPC-E-10-09, Order No. 32113 at 8, citing Order Nos. 29784 and 29952. To
further the Commission’s objective, Idaho Power informs its customers of a wide range
of opportunities to participate in DSM activities and provides information that allows them
to use electricity wisely. Through DSM programs, Idaho Power seeks to provide
customers with programs and knowledge to help them manage their energy use and to
utilize cost-effective DSM resources to meet the Company’s electrical system’s energy
and demand needs.
2. Idaho Power continues to offer a broad portfolio of DSM solutions,
consisting of energy efficiency programs and demand response programs. Due to the
robust nature of these programs, the 2020 energy savings represent Idaho Power’s
second-highest annual incremental energy savings since the establishment of the Idaho
Rider in 2002. DSM 2020 Annual Report at 1. The savings from Idaho Power’s energy
efficiency programs alone, excluding Northwest Energy Efficiency Alliance (“NEEA”)
savings, was 180,818 megawatt-hours (“MWh”). DSM 2020 Annual Report at 1. Idaho
Power also saved an additional 15,991 MWh1 of energy-efficient market transformation

1 Because Idaho Power will not receive a final 2020 savings report form NEEA until Q2 2021, the number provided in this Application is an estimate provided to the Company from NEEA.
APPLICATION - 3
savings through NEEA initiatives. Direct Testimony of Pawel P. Goralski (“Goralski
Testimony”) at 6. From its demand response programs, Idaho Power achieved a total
demand reduction of 336 megawatts (“MW”) from an available capacity of 366 MW.
Goralski Testimony at 12. Even though these numbers represent a slight decrease from
the all-time energy savings achieved in 2019, the Company’s actions, as detailed in the
DSM 2020 Annual Report, demonstrate the conscientious work Idaho Power undertook
to expend funds wisely to further DSM activities.
3. Idaho Power also modified many of its DSM initiatives in response to the
COVID-19 pandemic to prioritize the safety of customers, contractors, and Company staff
while balancing opportunities to improve program performance. To supplement its efforts,
Idaho Power also solicited input from its Energy Efficiency Advisory Group (“EEAG”) on
ways to adjust DSM programs impacted by COVID-19 and identify opportunities for
increased effectiveness in program delivery and marketing. These efforts to balance the
safety of the Company’s customers, contractors, and employees while continuing to
achieve nearly record levels of DSM efficiency savings demonstrate the thoughtful and
diligent work of Idaho Power’s employees during these difficult times.
II. CONTENTS OF THE DSM 2020 ANNUAL REPORT
4. Idaho Power’s DSM 2020 Annual Report is included as Attachment 1 to this
Application. The DSM 2020 Annual Report satisfies the DSM reporting obligation set
forth in Commission Order No. 29419 in Case No. IPC-E-03-19.
5. The DSM 2020 Annual Report consists of the main document (with
appendices) and two supplements. The main report provides information on DSM
program descriptions, program performance, expenditures, and marketing efforts.
APPLICATION - 4
Supplement 1: Cost-Effectiveness (“Supplement 1”) to the DSM 2020 Annual Report
shows the results of the cost-effectiveness tests that Idaho Power has calculated for each
program and includes a table that reports expenses by funding source and cost category.
Supplement 2: Evaluation (“Supplement 2”) to the DSM 2020 Annual Report contains
copies of Idaho Power’s 2020 program evaluations, customer surveys and reports,
evaluations conducted by the Company’s third-party contractors, Idaho Power’s
evaluation plans, general energy efficiency research, and demand response research.
Each of these evaluations reflects Idaho Power’s continued commitment to its review and
independent third-party program evaluation. Finally, the DSM 2020 Annual Report
contains a description of the Company’s DSM strategies for 2021.
III. 2020 DSM PROGRAM PERFORMANCE
6. In 2020, Idaho Power offered its customers a broad portfolio of energy
efficiency programs and demand response programs, participated in market
transformation efforts through NEEA, and offered several educational initiatives and other
activities. As explained in more detail in the Goralski Testimony filed contemporaneously
with this Application, Idaho Power’s annual energy savings combined with NEEA
estimated annual energy savings resulted in an incremental energy efficiency savings of
22 average megawatt-hours (“aMW”), exceeding the economic technical achievable
potential included in Idaho Power’s 2017 Integrated Resource Plan (“IRP”). Goralski
Testimony at 7.
7. On a system-wide basis, Idaho Power’s 196,809 MWh of incremental
annual energy efficiency savings in 2020, including the estimated NEEA market
transformation savings, were comprised of 37,302 MWh from the residential sector,
130,633 MWh from the commercial and industrial sector, 12,884 MWh from the irrigation
APPLICATION - 5
sector, and an estimated 15,991 MWh of energy efficiency market transformation savings
through NEEA initiatives. DSM 2020 Annual Report at 9, Table 4. Three programs, in
particular, had increased savings in 2020 compared to 2019. First, the Commercial and
Industrial Custom Projects Option increased by 33 percent due to the completion of
several large, long-term projects. Goralski Testimony at 8. Second, the Home Energy
Report Program increased its savings by 23 percent after the successful permanent
program rollout following the pilot program in 2019. Goralski Testimony at 8. Lastly, the
Irrigation Efficiency Rewards program represented a 28 percent increase in savings from
2019. Goralski Testimony at 8.
8. Idaho Power successfully operated all three of its demand response
programs in 2020. From an enrolled capacity of 366 MW, the total actual demand
reduction from the Company’s demand response programs was 336 MW during the 2020
program season. DSM 2020 Annual Report at 1; Goralski Testimony at 12. This value
represents the maximum realized, non-coincident load reduction from all three programs.
9. Table 3 on page 8 of the DSM 2020 Annual Report contains a list of Idaho
Power’s DSM programs by sector, operational type, and location. The table illustrates
the broad suite of programs that Idaho Power offers to its customers in energy efficiency,
demand response, and education. Idaho Power’s energy efficiency portfolio was also
cost-effective, resulting in a 2.71 benefit/cost ratio when evaluated from a Utility Cost Test
(“UCT”) perspective, a 2.08 benefit/cost ratio when evaluated from a Total Resource Cost
(“TRC”) test perspective, and 2.45 benefit/cost ratio when evaluated from a Participant
Cost Test (“PCT”) perspective. Goralski Testimony at 5–6.
10. Idaho Power also implemented many additional changes to its DSM activity
due to the COVID-19 pandemic. The Company suspended activities that included
APPLICATION - 6
person-to-person interactions, such as customer home installations, in-person trade
shows, in-person vendor trainings, and onsite contractor work. These modifications were
necessary and prudent to protect the health and wellbeing of Idaho Power’s customers,
contractors, and employees. The Company did suspend some in-person activity for some
programs, such as the newly implemented Small Business Direct Install program.
However, once Idaho Power implemented appropriate safety protocols, the program
resumed and achieved a savings of 780 MWh in its first year. Goralski Testimony at 9.
IV. 2020 DSM EXPENSES AND ADJUSTMENTS
11. Funding for the Idaho DSM programs in 2019 came from several sources.
The Idaho Rider funds are collected directly from customers on their monthly bills at 2.75
percent of their base rate revenues. Additionally, the Idaho demand response program
incentives are included in base rates and tracked annually through the PCA. Energy
efficiency and demand response-related expenses not funded through the Rider are
included in Idaho Power’s ongoing operations and maintenance (“O&M”) costs.
12. In 2020, the Company’s total system-wide expenditures on DSM-related
activities totaled $50,556,303. DSM 2020 Annual Report at 9, Table 4. This figure
includes expenditures for Oregon and other O&M expenses that are not before the
Commission as part of this prudence request. In this filing, Idaho Power seeks a
determination that a total of $47,010,777 were prudently incurred in 2020 ($40,477,043
in Rider expenses and $6,533,734 in demand response program incentives). A summary
of the 2020 program expenditures by program, customer sector, and funding source for
which the Company is seeking a prudence determination is provided as Exhibit No. 1 to
the Goralski Testimony.
13. Idaho Power identified one prior year-end and two current year-end
APPLICATION - 7
accounting adjustments that were necessary to accurately account for DSM expenses in
2020. Goralski Testimony at 15. Idaho Power has included each of these adjustments
in Exhibit No. 1 to the Goralski Testimony. The prior year-end accounting adjustment
involved a credit of $51,166 in Company labor expenses back to the Idaho Energy
Efficiency Rider account per Commission Order No. 34827 in Case No. IPC-E-20-15.
Goralski Testimony at 15. To accurately reflect 2020 DSM spending, an adjustment was
necessary to add $51,166 back to the 2020 expenses to reflect the costs incurred related
to the Company’s 2020 DSM efforts. The first current year-end adjustment reverses a
credit of $57 that the Company incorrectly applied to the Rider during 2020 instead of its
non-Rider funded Green Power Program. Goralski Testimony at 15. The second current
year-end adjustment adds $15,910 of expenses related to the Small Business Direct
Install program that Idaho Power incorrectly charged to the Oregon Energy Efficiency
Rider account in 2020. Goralski Testimony at 15.
14. In its last DSM prudence evaluation of Idaho Power, the Commission stated
that Idaho Power “shall apply the 2% cap to actual average wages per [full-time employee]
going forward. The baseline for the 2% cap shall be the prior year’s actual average wages
per [full-time employee].” Case No. IPC-E-20-15, Order No. 34874 at 5. Idaho Power’s
Rider-funded DSM employee labor expense in 2020 totaled $3,408,382. Goralski
Testimony at 16. While Idaho Power believes it was necessary to spend this amount to
support the pursuit of energy efficiency in the Company’s Idaho service area, using the
Commission’s formula results in $105,369 being in excess of the maximum allowed labor
expense. Goralski Testimony at 17, Table 2. Accordingly, only $3,303,013 in DSM labor
expenses are included in the Company’s prudence request.
APPLICATION - 8
V. DSM PROGRAM COST-EFFECTIVENESS AND EVALUATIONS
15. The DSM 2020 Annual Report and accompanying Goralski Testimony
provides a sufficient basis for the Commission to determine whether Idaho Power’s DSM
expenses were prudently incurred.
16. To calculate cost-effectiveness, the DSM 2020 Annual Report uses
benefit/cost methodologies used in previous DSM annual reports, including the UCT, the
TRC test, and the PCT. A review of each test allows for an economic assessment of the
lifecycle costs and benefits of a DSM investment from the perspective of Idaho Power,
DSM program participants, and non-participating customers. Goralski Testimony at 18–
19. Idaho Power calculates cost-effectiveness from the TRC test, UCT, and PCT
perspectives at the program level except for those programs with no customer costs, in
which case the PCT is not applicable. If a program is not cost-effective under any one of
these tests, Idaho Power seeks EEAG input before making a determination to modify,
continue, or discontinue the program. Goralski Testimony at 19. Cost-effective test
methodologies are described in more detail in Supplement 1 to the DSM 2020 Annual
Report.
17. While the Commission continues to assess the prudence of DSM
investments under “the totality of the circumstances,” the Commission also believes that
public utilities may “emphasize the UCT—and that test’s focus on Company-controlled
benefits and costs—to argue whether programs were cost-effective.” Case No. IPC-E-
15-06, Order No. 33365 at 9–10. Thus, the Company continues to conduct all three
benefit/cost methodologies while using the UCT perspective as its primary test for
evaluating program cost-effectiveness in Idaho and energy efficiency resources in the
APPLICATION - 9
IRP planning cycle.2 Goralski Testimony at 20–23. Idaho Power continues to engage
EEAG in reviewing benefit/cost analyses for current and potential programs, and the
Company has incorporated EEAG’s feedback to develop its ongoing DSM programs.
18. Supplement 1 to the DSM 2020 Annual Report includes detailed results of
the cost-effectiveness tests by program and by measure. As shown in Supplement 1, all
three program sectors and the overall DSM portfolio achieved benefit/cost ratios greater
than 1.0 from the perspective of all three cost-effectiveness tests. Idaho Power’s cost-
effectiveness test results for 2020 energy efficiency programs are summarized as follows:
a. Portfolio Basis. On a portfolio basis, Idaho Power’s energy efficiency
programs are cost-effective, passing the UCT, TRC test, and PCT with ratios of 2.71,
2.08, and 2.45, respectively. Goralski Testimony at 21, Table 4. The Company’s energy
efficiency programs’ customer sector-level portfolios were also cost-effective from a UCT,
TRC test, and PCT perspective. Goralski Testimony at 21, Table 4.
b. Program Basis. On an individual program basis, in 2020, 11 of the
16 energy efficiency programs offered in Idaho for which the Company calculates cost-
effectiveness had benefit/cost ratios greater than 1.0 under the UCT. Goralski Testimony
at 21. Two programs that scored less than 1.0 under the UCT were the Company’s
Weatherization Assistance for Qualified Customers (“WAQC”) and Weatherization
Solutions for Eligible Customers (“Solutions”). While these programs are not cost-
effective under the UCT, Idaho Power will continue to offer these programs because it
believes that WAQC and Solutions provide benefits to the Company’s limited-income
customers that Idaho Power cannot quantify through the economic tests. Goralski

2 In final Order No. 34469, the Commission directed Idaho Power to use the UCT perspective for DSM programs in the IRP context. Case No. IPC-E-19-11, Order Nos. 34469 at 9 and 34503 at 4.
APPLICATION - 10
Testimony at 24–25. Idaho Power will also continue to work with EEAG and
weatherization managers to improve the effectiveness of these programs. Two of the
other programs with a UCT less than 1.0—the Energy House Calls and Multifamily Energy
Savings Programs—experienced significant reductions in participation due to the COVID-
19 pandemic because these programs require contractors to enter customers’ homes.
Even though the overall participation level resulted in low cost-effectiveness scores for
2020, the Company is confident that both programs can be cost-effective with a typical
year’s participation. Goralski Testimony at 26. Finally, Idaho Power has discontinued the
Simple Steps, Smart SavingsTM program, which had a UCT score under 1.0. Goralski
Testimony at 26-27. This program was discontinued by the program’s administrator, the
Bonneville Power Administration (“BPA”), in September 2020.
c. Measures Basis. In 2020, Idaho Power evaluated the benefits and
costs of 281 measures. Goralski Testimony at 21. The results of these calculations,
along with measure assumption details and source determination, can be found in
Supplement 1 to the DSM 2020 Annual Report. DSM 2020 Annual Report, Supplement
1.
19. For 2020, Idaho Power determined the cost-effectiveness of its demand
response programs based on the levelized annual cost of a 170 MW deferred resource
over a 20-year lifespan that was established in the settlement reached in Case No. IPC-
E-13-14 and subsequently approved in Commission Order No. 32923. While benefit/cost
ratios are not currently calculated for the three demand response programs, in 2020, the
system-wide cost of operating the three demand response programs was approximately
$7.7 million ($6.9 million of incentives and $0.8 million of other costs). Goralski Testimony
APPLICATION - 11
at 27. The amounts attributable to the Idaho-only jurisdiction were $7.3 million ($6.5
million of incentives and $0.8 million of other costs). Goralski Testimony at 27. Idaho
Power estimates that if the three programs were dispatched for the full 60 hours allowed,
the total costs would have been approximately $10.9 million on a system-wide basis.
Goralski Testimony at 27–28. The 2020 total program costs are less than the value of
demand, calculated in the 2017 IRP to be $19.6 million. Goralski Testimony at 28.
20. Program Evaluations. In addition to the annual cost-effectiveness analysis
the Company conducts for each program, the results of which are included in Supplement
1 to the DSM 2020 Annual Report, Idaho Power solicits and contracts with independent
third-party consultants to provide program evaluations. Idaho Power uses the results of
these evaluations to improve its DSM programs, compare Company processes to industry
best practices, and benchmark reported program savings. In 2020, these independent,
third-party consultants conducted three program impact evaluations, three program
process evaluations, five program summary analyses, and one joint billing analysis.
Goralski Testimony at 29–30. Idaho Power also administered surveys on several
programs to measure program satisfaction. The Commission can find copies of these
reports and the Company’s program evaluation plan for 2021-22 in Supplement 2.
VI. STAKEHOLDER INPUT
20. Idaho Power relies on input from EEAG to provide a customer and public
interest review of energy efficiency and demand response programs and expenses.
EEAG provides input on enhancing existing DSM programs and on implementing new
DSM programs. Currently, EEAG consists of members representing a cross-section of
APPLICATION - 12
customers from the residential, industrial, commercial, and irrigation sectors, as well as
representatives for low-income individuals, environmental organizations, state agencies,
public utility commissions, and Idaho Power.
21. Normally, EEAG holds quarterly in-person meetings at Idaho Power’s
corporate offices and through webinars as needed. Due to COVID-19, however, all but
one EEAG meeting was held virtually. The Company found the transition to virtual
meetings was successful in maintaining member participation. This continued
effectiveness of EEAG meetings underscores the group’s flexibility and commitment to
work collectively and identify program enhancements. Specifically, Idaho Power worked
with EEAG on developing, designing, and promoting several projects related to COVID-
19, the WAQC and Solutions programs, Educational Distributions, and the potential to
implement a new cost-effective Simple Steps, Smart Savings™ program after the BPA
sunset the program in September 2020.
22. Idaho Power also worked with Commission Staff (“Staff”) in response to
Staff’s concerns and recommendations issued in the Company’s previous DSM prudence
filing, Case No. IPC-E-20-15. Based on discussions with Staff in January 2021, Idaho
Power plans to adjust its Effective Load-Carrying Capacity as part of its annual demand
response program cost-effectiveness determination.
VII. MODIFIED PROCEDURE
26. Idaho Power believes that a technical hearing is not necessary to consider
the issues presented herein and respectfully requests that this Application be processed
under Modified Procedure, i.e., by written submissions rather than by hearing. RP 201,
et. seq. Idaho Power has, however, contemporaneously filed the Goralski Testimony in
APPLICATION - 13
support of this Application. The Company stands ready to present the testimony
supporting this Application in a technical hearing if the Commission determines such a
hearing is required.
VIII.COMMUNICATIONS AND SERVICE OF PLEADINGS
27.Communications and service of pleadings with reference to this
Application should be sent to the following:
ldaho Power Company 1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707 [e-mail] [e-mail]
ldaho Power Company 1221 West ldaho Street (83702)
P.O. Box 70
Boise, Idaho 83707 [e-mail]
McDowell Rackner Gibson PC 419 SW 11th Ave., Suite 400
Portland, OR 97205 [e-mail]
IX.REQUEST FOR RELIEF
28.As described in greater detail above, Idaho Power respectfully requests that
the Commission issue an order designating Idaho Power’s DSM expenses of
$47,010,777 as prudently incurred.
Respectfully submitted this 15th day of March 2021.
ADAM LOWNEY
LISA D. NORDSTROM Attorneys for Idaho Power Company
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-21-04
IDAHO POWER COMPANY
___________________________
ATTACHMENT 1
DEMAND-SIDE MANAGEMENT
2020 ANNUAL REPORT