20220217Reply Comments.pdf

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February 17,2022
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 West Chinden Blvd., Building 8
Suite 201-A
Boise, ldaho 83714
Case No. !PC-E-21-32
ln the Matter of ldaho Power Company's Application forApproval to Modify
lts Demand Response Programs
Dear Ms. Noriyuki:
Attached for electronic filing, pursuant to Order No. 35058, is ldaho Power
Company's Reply Comments in the above entitled matter.
lf you have any questions about the attached document, please do not hesitate to
contact me.
Very truly yours,
LISA D. NORDSTROM
Lead Counsel
I [e-mail]
LDN:sg
Attachment
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Lisa D. Nordstrom
X*!.7(^*t.--,
Re:
LISA D. NORDSTROM (!SB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
!N THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
APPROVAL TO MODIFY lTS DEMAND
RESPONSE PROGRAMS.
CASE NO. !PC-E-21-32
IDAHO POWER COMPANY'S
REPLY COMMENTS
ldaho Power Company ("ldaho Powefl or "Company") respectfully submits the
following Reply Comments pursuant to Order No. 35266 in response to Comments from
the ldaho Public Utilities Commission ("Commission") Staff, the City of Boise City ("Boise
City), the ldaho Conservation League ("lCL"), the ldaho !rrigation Pumpers Association,
!nc. ("llPA"), and the King Hill lrrigation District (.King Hill") filed by February 10, 2022.
I. IDAHO POWER'S REPLY
The Company appreciates the comments from Staff, Boise City, lCL, and llPA
supporting the approval of its filing to modiff its demand response ('DR") programs. The
Company also agrees with Staffs recommendation to utilize a "continuous improvement
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IDAHO POWER COMPANY'S REPLY COMMENTS- 1
approach" in evaluating how DR programs can cost-effectively meet future system
needs. ln these reply comments, the Company seeks to provide clarification on a few
key issues or concerns identified by parties.
A. The Assumptions Used bv ldaho Power to Model Existinq DR Capacitv and
Future DR Potential in lts 2021 lnteqrated Resource Plan ("lRP") Are
Reasonable.
ln its comments, ICL stated that ldaho Power "recognized that DR is valuable
and cost-effective up to at Ieast 584 MW of capacity, yet it opted not to increase its DR
capacity beyond a "conservative estimate" of 300 MW.'1 lCL went on to suggest that
ldaho Power is foregoing2S4 MW of DR potential and stated, "the assumptions in this
filing and the IRP have set an artificially low starting point for DR expansion."2 ln
drawing its conclusion, ICL incorrectly conflates two distinct assumptions: (1) how the
nameplate capacity from the Company's exrbfrng DR programs was modeled, and (2)
how future potential DR capacity was modeled. At issue in this case, is a proposa! to
modifu ldaho Power's existing DR programs with the goal of maximizing the
effectiveness of those peak capacity resources. ldaho Power estimates that with such
modifications, its existing DR programs can be relied upon to provide approximately 300
MW of load reduction during future summer peak load periods. The referenced 300 MW
estimate is not a cap, but rather an estimate of achievable load reduction from these
existing programs that can be relied upon for planning purposes. lf higher levels of cost-
effective load reduction are achievable through the existing DR programs, ldaho Power
wil! pursue those opportunities. Apart from the proposa! under review in this case, ldaho
Power will separately assess the potential for new or expanded DR resources that, if
1 ICL Comments at 1.
2 ld. al3.
IDAHO POWER COMPANY'S REPLY COMMENTS.2
identified as cost-effective and achievable, would be presented for Commission
approval as part of a future separate proceeding.
Existinq DR Proqrams: !n recent years, the Company has enrolled approximately
380 MW of nameplate capacity in its existing DR programs and as such, previous lRPs
have included 380 MW of nameplate DR capacity. However, based on feedback
received through customer surveys conducted in preparation of this case, the Company
believes there could be an initial decrease in participation when the proposed program
parameters are implemented.3 Therefore, when determining how much capacity would
be included as a committed resource in the 2021 lRP, the Company took that customer
feedback into consideration, ultimately deciding 300 MW could be reasonably relied
upon for planning purposes. The Company hopes to retain and obtain additional cost-
effective DR capacity by removing the marketing restrictions imposed by the 2013
Settlement Agreement.
Future DR Potentia!: For purposes of establishing the DR potential in the
Company's service area, ldaho Power relied on a recent assessment compiled by the
Northwest Power and Conservation Council ("NWPCC") to estimate approximately 584
MW of DR potential in its service area.a The 584 MW includes DR potential associated
with the Company's existing programs, as well as additional DR potential. However, in
its comments, ICL incorrectly assumes that the 584 MW of potentialwas "valuable and
cost effective."s The 584 MW was simply reflective of an estimated technical potential in
3 Specifically, the Company is proposing to extend the hours of availably from 1:00-9:00pm to 3:00-
11:00pm, which is expected to impact the ability of some customers to participate, as explained more fully
on pages 9-19 in Company \Mtness Nesbitt's Direct Filed Testimony,
4 ldaho Power's Response to lClP's Request No. 1 - Attachment 4 - NWPCC Model (Exhibit 1
Workpaper); Exhibit 1 to Ellsworth Direct Testimony.
s lCL Comments at'1.
IDAHO POWER COMPANY'S REPLY COMMENTS- 3
ldaho Power's service area, which was used to establish an Effective Load Carrying
Capability ('ELCC') that could be used to help set a cost-effectiveness threshold for
programs and was also used as a modeling constraint in the IRP analysis.
!CL's statement that "ldaho Power does not have immediate plans to expand its
DR capacity beyond 300 MW and that it only plans to expand DR by 100 MW during the
2020-2040 planning period"6 is misleading. ln the2021lRP, a maximum of
approximately 280 additional MW of DR (584 MW minus the 300 MW of existing
rounded to the nearest 10 MW was available for selection in the AURORA model when
analyzing the future load and resource balance. The additional DR capacity was divided
into 20 MW bundles and available for selection up to the 280 MW threshold, and
ultimately, 100 MW of additional DR potentialwas selected.T The AURORA model is
configured to optimize the Company's resources by selecting the most cost-effective
resources to meet the required operational and system needs. To the extent additiona!
bundles were not selected, it is because DR's operating characteristics didn't align with
the need, there was a less costly resource available, or a combination of those factors.
This was further tested in a sensitivity analysis where an additional 60 MW of DR was
added to the system beyond the amount selected in the preferred portfolio. The result
was an increase to the overal! portfolio cost.
Finally, lCL made recommendations related to expanding the Company's current
DR portfolio as well as potentially developing new programs.s ldaho Power believes it is
most appropriate that specific potential programs be informed by an ldaho Power
a ld. at2.
7 ldaho Power's 2021 lntegrated Resource Plan a|152.I ICL Comments at 4-7.
IDAHO POWER COMPANY'S REPLY COMMENTS- 4
specific DR potential study (which the Company expects to complete by the fall of 2022)
and future IRP analyses. As recommended by Staff,s the Company will provide the
Commission and parties with the completed potential study and commits to reviewing
the results with interested parties and the Company's Energy Efficiency Advisory Group
('EEAG") prior to recommending any new or modified programs. The Company believes
the approach outlined by Staff aligns with its plans and commits to include the potential
study in the following year's annual Demand-Side Management ("DSM') Report, as well
as the Company's 2023 lRP, where parties and the Commission will have an
opportunity to review.
B. ldaho Power Acknowledqes the Potential Customer lmpacts of the
Prooosed DR Events and ls Committed to Gontinued Collaboration to
Minimize Neqative lmpacts.
The Company appreciates the comments from IIPA and Boise City regarding
working with current, past, and potential irrigation customers to understand how to make
the lrrigation Peak Rewards program more attractive. ldaho Power also takes seriously
llPA's commentlo on the burdens the proposed program can have on customers, as
wellas King Hill's public commentll recommending imposing certain program
!imitations.
ln weighing program design, it is important to recognize that ldaho Power's
ELCC analysis informed the parameter changes and that restricting the availability of
the DR programs decreases the overall effectiveness (and related cost-effectiveness) of
the programs. However, the Company will continue to work with irrigation customers to
e Staff Comments at 6.
10 llPA Comments at 1-2.
11 Comments of John Hafen on behalf of King Hill lrrigation District at 1 (Dec 15,2021)
IDAHO POWER COMPANY'S REPLY COMMENTS.5
understand barriers to customer participation and willwork to minimize curtailments
while maintaining the effectiveness of the program to meet system needs. Of note, the
Company's Load Serving Operations group works with the DR program specialists to
help inform when DR events are called and evaluating customer impacts are an
important part of that process. ldaho Power also believes its proposed incentive
structure compensates customers for their participation and agrees with llPA's
statement that trhile the proposed modifications will increase the burden of the
program on participants, this burden appears to be appropriately offset by increased
incentive payments and is warranted given the evolving nature of Idaho Power's system
demand needs."l2 Ultimately, the Company understands that not all customers may be
able to participate, as each customer will have to weigh whether participation in the
program makes economic and business sense for their operations.
Finally, Staff recommends the Company conduct one of the minimum events (if
available) during the2022 season between August 15 to September 15 and between
9:00 p.m. and 11:00 p.m.13 While it is difficult to predict what the operational needs
during the upcoming DR program season will be, ldaho Power believes running an
event during the expanded availability will provide valuable insight as to whether, and to
what extent, demand reduction is impacted by an event called later in the day or later in
the season. The Company will endeavor to run an event in the stated window if one of
the three minimum events is available; after the three minimum events, and absent an
operational need dictating additionalevents, it is important to consider the incremental
cost and potential impact on program participation of running additionalevents.
12 llPA Comments at 1
13 Staff Comments at 8.
IDAHO POWER COMPANY'S REPLY COMMENTS- 6
C. ldaho Power Commits to Biannuallv Update the Gost-Effectiveness Inputs.
Complete Reqular Proqram Evaluations. and Present This lnformation to
the Commission in a Timelv and Transparent Fashion.
The Company agrees with Staffs comments and recommendations on the
revised cost-effectiveness methodologyla and will repeat the analyses in future lRPs.
ldaho Power also agrees with Staffs recommendation that the Company conduct an
impact evaluation as soon as sufficient program event data is available to conduct a
meaningful evaluation for the DR program.ls
The Company commits to utilizing the DSM annual report and its annual
prudence request to present the cost-effectiveness results and impact evaluation
recommendations. ln the ordinary course of business, the Company conducts intemal
impact evaluations on the DR programs every year and third-party impact evaluations
typically occur every five years. The results of third-pafi evaluations are incorporated
into the Company's annual internal impact evaluations going forward, and the results of
both the internal and third-party impact evaluations are reported in the DSM annua!
report. The Company proposes working with its EEAG to determine a future evaluation
plan of the DR programs, which would include consideration of the timing, frequency,
and cost of third-party evaluations.
D. ldaho Power lntends to Market the DR Proqrams to All Qualified
Customers.
The Company appreciates the comments filed by Boise City, lCL, llPA, and Staff
in support of the Company's recommendation to lift the marketing constraints of the
current programs. While the Company appreciates Boise City and ICL's remarks related
la ld. at 4-5.
15 ld. at7.
IDAHO POWER COMPANY'S REPLY COMMENTS- 7
to targeted marketing strategies,t0 the Company's proposed approach is to actively and
broadly market each of the programs as soon as its Application is approved in
anticipation of this yea/s DR program season. The Company also commits to
discussing its ongoing marketing strategies with its EEAG and willseek input as it
develops future DR marketing campaigns.
[. coNcLUStoN
Idaho Power is appreciative of the parties' exhaustive review of its proposa! in
this matter and the collective recommendation of a!! intervenors that the Commission
approve the Company's request. Because ldaho Power will need lead time to finalize
program marketing materials, engage with customers on modified program parameters,
conduct program workshops, and enroll customers in preparation for the 2022 DR
season, a Commission order received by March 1,2022 would position the Company to
logistically meet the necessary timeframes for a successful program rollout.
ldaho Power respectfully requests the Commission issue an order authorizing
ldaho Power to: (1) modiff its DR programs, (2) implement the associated revised tariff
schedules, and (3) establish a revised cost-effectiveness methodology to evaluate DR
that supersedes the Settlement Agreement approved by Commission Order No. 32923
in its entirety.
Respectfully submitted this 17th day of February 2022.
X*!(^l-t,.*,
LISA NORSTROM
Attorney for Idaho Power Company
18 Boise City Comments at 2-3; ICL Comments at 7-8.
IDAHO POWER COMPANY'S REPLY COMMENTS- 8
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 17th day of February 2022,1 served a true and
correct copy of ldaho Power Company's Reply Comments upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staft
Riley Newton
Deputy Attorney General
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No.8,
Suite 201-A(83714)
PO Box 83720
Boise, lD 83720-0074
ldaho lrrigation Pumpers Association, lnc.
Eric L. Olsen
Echo Hawk & Olsen, PLLC
505 Pershing Ave., Ste. 100
P.O. Box 6119
Pocatello, ldaho 83205
Lance Kaufman
Aegis Insight
4801 W. Yale Ave.
Denver, CO 80219
ldaho Conseryation League
Benjamin J. Otto
Emma E. Sperry
ldaho Conservation League
710 N. 6th Street
Boise, ldaho 83702
lndustrial Customers of ldaho Power
Peter J. Richardson
Richardson Adams, PLLC
515 N.27th Street
P.O. Box 7218
Boise, ldaho 83702
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IDAHO POWER COMPANY'S REPLY COMMENTS - 9
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
Micron Technology, Inc.
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart LLP
555 17th Street, Suite 3200
Denver, CO 80202
Jim Swier
Micron Technology, lnc.
8000 South FederalWay
Boise, lD 83707
Boise City
Ed Jewel!
Deputy City Attomey
Boise City Attorney's Office
150 N. Capitol Blvd. P.O. Box 500
Boise, !D 83701-0500
King Hill lrrigation District
c/o John Hafen
75E 1st Ave
Glenns Ferry, lD 83623
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Stacy Gust, Regulatory Administrative
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IDAHO POWER COMPANY'S REPLY COMMENTS - 10