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HomeMy WebLinkAbout20220315Thompson Direct and Exhibits.pdf BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR A DETERMINATION OF 2021 DEMAND- SIDE MANAGEMENT EXPENSES AS PRUDENTLY INCURRED. ) ) ) ) ) ) CASE NO. IPC-E-22-08 IDAHO POWER COMPANY DIRECT TESTIMONY OF ROBERT Z. THOMPSON THOMPSON, DI 2 Idaho Power Company Q. Please state your name and business address. 1 A. My name is Robert Z. Thompson. I go by my 2 middle name, and therefore, Zack Thompson is my preferred 3 name. My business address is 1221 West Idaho Street, Boise, 4 Idaho 83702. 5 Q. By whom are you employed, and in what 6 capacity? 7 A. I am employed by Idaho Power Company (“Idaho 8 Power” or “Company”) as a Regulatory Analyst in the 9 Regulatory Affairs Department. 10 Q. Please describe your educational background. 11 A. In May of 2008, I received a Bachelor of Arts 12 degree in Business, Organizations, and Society with a minor 13 in Economics from Franklin & Marshall College in Lancaster, 14 Pennsylvania. In May of 2014, I received a Master of 15 Business Administration degree with a specialization in 16 Finance from Louisiana State University in Baton Rouge, 17 Louisiana. I have also attended “The Basics: Practical 18 Regulatory Training for the Electric Industry,” an electric 19 utility ratemaking course offered through the New Mexico 20 State University’s Center for Public Utilities. 21 Q. Please describe your work experience with 22 Idaho Power. 23 A. In 2020, I was hired as a Regulatory Analyst 24 in the Company’s Regulatory Affairs Department. My primary 25 THOMPSON, DI 3 Idaho Power Company responsibilities include supporting activities associated 1 with demand-side management (“DSM”). 2 Q. What is the purpose of your testimony in this 3 case? 4 A. The purpose of my testimony is to present the 5 Company’s request for a determination that $35,055,318 of 6 DSM expenses for the acquisition of demand-side resources 7 in 2021 was prudently incurred. This amount includes 8 $27,922,340 funded in 2021 by the Idaho Energy Efficiency 9 Rider (“Rider”) and $7,132,978 of demand response program 10 incentive payments funded through base rates and tracked 11 annually through the Power Cost Adjustment (“PCA”). 12 My testimony will (1) provide a review of 2021 DSM 13 program performance (2) discuss 2021 DSM expenses and 14 adjustments, (3) provide an overview of the cost-15 effectiveness results for 2021, (4) review program 16 evaluation efforts, and (5) describe the input stakeholders 17 provided during the year. 18 I. 2021 DSM PROGRAM PERFORMANCE 19 Q. What is Idaho Power’s focus when evaluating 20 program performance? 21 A. Idaho Power takes its responsibility of 22 prudently managing customer-funded DSM activities 23 seriously, and the Company believes it is important to 24 provide its customers with the maximum value from these 25 THOMPSON, DI 4 Idaho Power Company activities. The Company’s actions in 2021, and the content 1 of the Demand-Side Management 2021 Annual Report (“DSM 2021 2 Annual Report”), Attachment 1 to the Application filed in 3 this proceeding, provide evidence supporting the 4 conscientious work Idaho Power employees made toward using 5 customers’ funds wisely to support DSM activities. 6 Q. Please provide an overview of Idaho Power’s 7 DSM activities in 2021. 8 A. On a system-wide basis, Idaho Power offered a 9 broad portfolio of energy efficiency and demand response 10 programs available to all customer segments, and the 11 Company also participated in market transformation efforts 12 through the Northwest Energy Efficiency Alliance (“NEEA”). 13 In addition, the Company offered several educational and 14 behavioral initiatives including the Residential Energy 15 Efficiency Education Initiative, seasonal contests, the 16 School Cohort, and the continuation of the Water and 17 Wastewater Cohort. 18 Idaho Power continued to take necessary measures to 19 respond to the COVID-19 pandemic by modifying DSM activity 20 to prioritize the safety of customers, contractors, and 21 Idaho Power staff, while balancing opportunities to 22 maintain program performance. The Company leveraged its 23 Energy Efficiency Advisory Group (“EEAG”) to solicit input 24 and feedback on ways to adjust programs impacted by the 25 THOMPSON, DI 5 Idaho Power Company pandemic (and the resulting supply chain issues) to 1 identify opportunities to increase program effectiveness, 2 delivery, and marketing. 3 A summary of Idaho Power’s 2021 DSM programs is 4 provided in Table 1 below. 5 Table 1. 2021 DSM Programs by Sector, Operational Type, 6 and Location 7 Program by Sector Operational Type State Residential A/C Cool Credit ............................................................. Demand Response ID/OR Easy Savings: Low-Income Energy Efficiency Education Energy Efficiency ID Educational Distributions ............................................... Energy Efficiency ID/OR Energy House Calls ...................................................... Energy Efficiency ID/OR Heating & Cooling Efficiency Program .......................... Energy Efficiency ID/OR Home Energy Audit Program ........................................ Energy Efficiency ID Home Energy Report Program ...................................... Energy Efficiency ID Multifamily Energy Savings Program ............................ Energy Efficiency ID/OR Oregon Residential Weatherization............................... Energy Efficiency OR Rebate Advantage ........................................................ Energy Efficiency ID/OR Residential New Construction Program ........................ Energy Efficiency ID Shade Tree Project ....................................................... Energy Efficiency ID Weatherization Assistance for Qualified Customers ..... Energy Efficiency ID/OR Weatherization Solutions for Eligible Customers........... Energy Efficiency ID Commercial/Industrial Commercial and Industrial Energy Efficiency Program Custom Projects ....................................................... Energy Efficiency ID/OR Green Motors—Industrial ......................................... Energy Efficiency ID/OR New Construction ..................................................... Energy Efficiency ID/OR Retrofits .................................................................... Energy Efficiency ID/OR Commercial Energy-Saving Kits.................................... Energy Efficiency ID/OR Flex Peak Program ....................................................... Demand Response ID/OR Oregon Commercial Audits ........................................... Energy Efficiency OR Small Business Direct Install ......................................... Energy Efficiency ID/OR Irrigation Irrigation Efficiency Rewards ......................................... Energy Efficiency ID/OR Green Motors—Irrigation .......................................... Energy Efficiency ID/OR Irrigation Peak Rewards ................................................ Demand Response ID/OR All Sectors Northwest Energy Efficiency Alliance ............................ Market Transformation ID/OR 8 THOMPSON, DI 6 Idaho Power Company Table 1 illustrates the broad availability of 1 programs offered by Idaho Power to its customers in energy 2 efficiency, demand response, and education. Idaho Power’s 3 energy efficiency portfolio was cost-effective, resulting 4 in a 2.17 benefit/cost ratio when evaluated from a Utility 5 Cost Test (“UCT”) perspective, a 2.18 benefit/cost ratio 6 when evaluated from a Total Resource Cost (“TRC”) test 7 perspective, and a 2.73 benefit/cost ratio when evaluated 8 from a Participant Cost Test (“PCT”) perspective. 9 The DSM 2021 Annual Report provides details for each 10 program, which include: a program description, 2021 11 performance results, program activities, cost-effectiveness 12 ratios, marketing activities, customer satisfaction, and 13 evaluation results if applicable. In addition, the DSM 2021 14 Annual Report provides a description of Idaho Power’s DSM 15 strategies for 2022. 16 Energy Efficiency 17 Q. What level of incremental annual energy 18 efficiency savings was achieved in 2021? 19 A. On a system-wide basis, Idaho Power achieved 20 143,971 megawatt-hours (“MWh”) of incremental annual energy 21 efficiency savings in 2021. This value includes 126,102 MWh 22 from Idaho Power’s energy efficiency programs and an 23 THOMPSON, DI 7 Idaho Power Company estimated 17,870 MWh1 of energy efficiency market 1 transformation savings through NEEA initiatives. Chart 1 2 below shows the incremental annual energy efficiency 3 savings in MWh from 2002 to the current year. Also shown in 4 this chart are the total energy efficiency expenses for 5 each year in millions of dollars. 6 Chart 1. Incremental Annual Energy Efficiency Savings 7 (MWh)and Energy Efficiency Expenses ($ millions) 2002-2021 8 9 Note: 2021 NEEA market-transformation savings are estimated. 10 Q. In 2021, did Idaho Power meet the energy 11 efficiency targets included in its 2021 Integrated Resource 12 Plan (“IRP”)? 13 A. Yes. In 2021, Idaho Power achieved 16.4 14 average megawatt-hours (“aMW”) of incremental energy 15 1 Because Idaho Power will not receive final 2021 savings from NEEA until the second quarter 2022, the NEEA-attributable savings is an estimate provided to Idaho Power by NEEA. THOMPSON, DI 8 Idaho Power Company efficiency savings, including NEEA estimated energy 1 savings, which exceeded the economic technical achievable 2 potential included in the 2021 IRP of 15.4 aMW. The 2021 3 savings represent enough energy to power approximately 4 12,600 average homes in Idaho Power’s service area for one 5 year. 6 Q. Does the Company engage in customer education 7 and outreach activities for which it cannot quantify or 8 report savings? 9 A. Yes. The Company engages in significant 10 educational awareness activities and marketing efforts that 11 are likely to result in energy savings experienced by 12 customers but are not quantified or claimed as part of 13 Idaho Power’s annual savings. These efforts are designed to 14 reach all customer segments and are more fully explained 15 throughout the DSM 2021 Annual Report. In 2021, this 16 included activity such as: holding virtual technical 17 trainings and workshops with customers, producing the 18 Energy@Work newsletters, participating in the Idaho 19 Irrigation Equipment Association Winter Show, hosting or 20 participating in vendor workshops promoting irrigation 21 system efficiency, participating in agricultural shows, 22 publishing residential energy efficiency guides which 23 showcased behavioral changes to save energy, attending 24 THOMPSON, DI 9 Idaho Power Company other outreach activities such as home shows, sponsoring 1 virtual webinars, and supporting the Integrated Design Lab. 2 Q. How did 2021 Savings compare to 2020? 3 A. Overall portfolio savings decreased year-over- 4 year compared to 2020 with the main driver being the 5 Commercial & Industrial (“C&I”) Custom Projects option. 6 These projects can vary greatly in size, scale, and 7 completion, which can cause swings in overall portfolio 8 savings performance annually. The variability of program 9 performance is highlighted by the fact that the number of 10 custom projects completed in 2021 declined 20 percent (135 11 as compared to 169 in 2020), but the savings declined 43 12 percent. As seen in Chart 2 below, the savings from the 13 Custom Projects option has accounted for a large portion of 14 the overall portfolio savings (not including NEEA savings), 15 averaging approximately 38 percent over the last five 16 years. For 2021, the savings from Custom Projects is more 17 in-line with the savings from program years 2017 and 2018. 18 // 19 // 20 THOMPSON, DI 10 Idaho Power Company Chart 2. 2017 – 2021 Annual DSM Savings: Custom Projects, 1 Rest of Portfolio, and Total Portfolio. 2 3 4 Over the last three years, the Custom Projects 5 option has accounted for 38 percent, 52 percent, and 43 6 percent of total portfolio savings in 2019, 2020, and 2021 7 respectively. This results in the portfolio having greater 8 sensitivity to the performance of the Custom Projects 9 option. Chart 3 below shows how the change in savings of 10 the Custom Projects option and the Rest of the Portfolio 11 impact the total portfolio savings. 12 // 13 // 14 // 15 // 16 // 17 //18 THOMPSON, DI 11 Idaho Power Company Chart 3. Savings Percentage Change: Custom Projects, Rest 1 of Portfolio, and Total Portfolio. 2 3 4 With the decline in Custom Project’s savings in 5 2021, the overall portfolio savings is pulled down as well, 6 which is represented by the inflection point in 2021 in 7 Chart 3. Whereas in previous years, Custom Projects has 8 offset lower or negative savings growth from the Rest of 9 the Portfolio. For example, in 2020, the Rest of the 10 Portfolio saw a 24 percent decrease as compared to 2019. 11 Custom Projects saw a year-over-year increase of 33 12 percent, and therefore, the overall portfolio saw only a 13 slight 2 percent decrease. The C&I Custom Projects option 14 is not the only driver in the 2021 savings decrease, but it 15 is a major contributing factor. 16 Q. Did the ongoing COVID-19 pandemic impact the 17 Company’s DSM activity in 2021? 18 A. Yes. Programs continued to experience impacts 19 as well as some activity still being suspended through 20 THOMPSON, DI 12 Idaho Power Company large portions of the year that included person-to-person 1 interactions such as installers in customer homes, in-2 person trade shows, in-person vendor trainings, and 3 contractors working at business sites. These actions were 4 necessary, prudent, and continued to be in the best 5 interest of customers, employees, and contractors’ safety. 6 The Company also made operational adjustments to several 7 programs to provide program offerings while maintaining 8 appropriate safety protocols. The Tables on Page 6 of the 9 DSM 2021 Annual Report summarize the status of the 10 individual programs and how they were affected by COVID-19 11 during 2021. 12 The pandemic’s impact on the nation’s supply chain 13 also slowed work in the Company’s C&I and Irrigation 14 programs. Customers experienced labor and material 15 constraints, as well as overall increases in costs, making 16 it more difficult and expensive to complete projects 17 timely. Therefore, even if the pandemic did not directly 18 affect the Company’s ability to perform on-site work in a 19 given program during 2021, it continued to have an impact 20 on each of the Company’s DSM programs in some way. 21 Demand Response 22 Q. What level of demand reduction capacity was 23 available from Idaho Power’s demand response programs in 24 2021? 25 THOMPSON, DI 13 Idaho Power Company A. The total available capacity of Idaho Power’s 1 three demand response programs was approximately 384 2 megawatts (“MW”). This value represents the total demand 3 response capacity calculated using the total enrolled MW 4 from participants with an expected maximum realization rate 5 for those participants in all three demand response 6 programs. The programs provided actual non-coincident 7 demand reduction of 313 MW during the 2021 program season. 8 The Company’s Load Serving Operations Group utilized the 9 flexibility of the four irrigation participant groups 10 individually in 2021 based on system need while taking into 11 consideration customer impacts. Therefore, the 313 MW of 12 reduction was lower compared to previous years because the 13 irrigation program was not fully utilized for any single 14 demand response event. Chart 4 below reflects the annual 15 available peak demand reduction capacity and actual load 16 reduction in MW since 2004 and the associated annual 17 expenses in millions of dollars. 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 THOMPSON, DI 14 Idaho Power Company Chart 4. Peak Demand Reduction Capacity (MW) and Demand 1 Response Expenses ($ millions) 2004-2021 2 3 4 II. 2021 DSM EXPENSES AND ADJUSTMENTS 5 Q. What amount of DSM expenses is the Company 6 requesting the Commission find were prudently incurred? 7 A. In the delivery of energy efficiency, demand 8 response, and market transformation programs, Idaho Power 9 expended $27,922,340 of Rider funds and $7,132,978 of 10 demand response program incentives, for a total of 11 $35,055,318 spent on demand-side resource acquisition in 12 2021. Idaho Power requests that the 2021 Rider-funded DSM 13 expenses, and the 2021 demand response program incentives 14 recovered through base rates and the PCA, be reviewed 15 together for a prudence determination. Exhibit No. 1 to my 16 testimony, 2021 Idaho DSM Expenses and Adjustments for 17 THOMPSON, DI 15 Idaho Power Company Prudence Filing, shows a breakout of these expenses by 1 program, customer sector, and funding source. 2 This year’s Rider-funded DSM expenses decreased 3 $12,554,703, or 31 percent, compared to the DSM expenses 4 reviewed in last year’s prudence case, Case No. IPC-E-21-5 04. As described more fully above, the decrease in 2021 6 expenses was primarily driven by a decrease in large 7 projects participating in the C&I Program Custom Projects 8 option. This resulted in the Custom Projects option having 9 $9,566,883 less in expenses as compared to 2020 and 10 coupled with the decrease in expenses associated with the 11 programs impacted by COVID-19, overall DSM activity 12 expenses were less year-over-year. The Custom Projects 13 option has consistently had variable annual performance 14 fluctuations in both savings and expenses due to the length 15 of time projects take to complete, the unpredictable nature 16 of the project pipeline, and the varying sizes of projects. 17 Q. Please compare the dollar amounts in Exhibit 18 No. 1 to your testimony with Appendix 2, 2021 DSM expenses 19 by funding source (dollars), of the DSM 2021 Annual Report. 20 A. For clarity and ease of understanding, Exhibit 21 No. 1 ties to Appendix 2, which is found on page 178 of the 22 DSM 2021 Annual Report. The first column of Appendix 2 23 labeled “Idaho Rider” and the first column of Exhibit No. 1 24 labeled “Rider Expenses” match at the row labeled “Total 25 THOMPSON, DI 16 Idaho Power Company Expenses” in Exhibit No. 1 and “Grand Total” in Appendix 2 1 in the amount of $27,943,096. All values in Exhibit No. 1 2 represent DSM expenses for the Idaho service area only. 3 Three prior year-end and three current year-end accounting 4 adjustments were necessary to accurately arrive at the 5 total 2021 expenses for purposes of the prudence 6 determination. These six adjustments are listed in Exhibit 7 No. 1 under the Adjustments section as 2020 Audit 8 Adjustment, 2020 Green Power, and 2020 SBDI: Small Business 9 Direct Install (“SBDI”), 2021 Residential New Construction, 10 2021 Commercial & Industrial, and 2021 SBDI: Small Business 11 Direct Install. 12 Q. Please describe the prior year-end accounting 13 adjustments included in Exhibit No. 1. 14 A. In 2021, Idaho Power made three adjustments 15 associated with the 2020 prudence request in IPC-E-21-04. 16 The first adjustment of $2,159 was discovered when the 17 Company was preparing the response to the first audit 18 request of the Commission Staff. In preparation of the 19 response, the Company identified an instance where 100 20 percent of an invoice had been charged to the Idaho Rider 21 instead of the appropriate allocation of 95 percent. To 22 correct for the misallocation, $2,159 was transferred to 23 the Oregon Rider in 2021, and therefore, $2,159 needs to be 24 added back to avoid understating the 2021 prudence request. 25 THOMPSON, DI 17 Idaho Power Company The second adjustment reversed a credit of $57 that 1 was incorrectly applied to the Idaho Rider during 2020 2 instead of the Company’s Green Power program, which is a 3 non-Rider funded program. Therefore, $57 needs to be 4 subtracted from the 2021 prudence request because it was 5 already deemed prudent by the Commission in the 2020 6 request. 7 During 2020, Idaho activity for the SBDI Program 8 totaling $15,910 was charged to the Oregon Energy 9 Efficiency Rider and should have been charged to the Idaho 10 Rider. Idaho Power made a correcting accounting entry in 11 2021 to move the charges from the Oregon Rider to the Idaho 12 Rider. The reversing entry is excluded from the 2021 DSM 13 expenses as it was already deemed prudent by the Commission 14 in the 2020 prudence filing. 15 Q. Please describe the current year-end 16 accounting adjustments included in Exhibit No. 1. 17 A. During preparation of the 2021 prudence 18 filing, three accounting adjustments to the Rider for 2021 19 were identified, and the corrections were made after the 20 2021 year-end financial books were closed. The first 21 adjustment adds $1,356 of expenses associated with Idaho 22 activity for the Residential New Construction Program that 23 were incorrectly charged to the Oregon Energy Efficiency 24 Rider in 2021. 25 THOMPSON, DI 18 Idaho Power Company The second adjustment reduces $1,044 of expenses 1 associated with the Commercial & Industrial program that 2 should have been charged to the Oregon Rider instead of the 3 Idaho Rider. 4 The final adjustment of $7,260 (2021 SBDI) was 5 correcting a duplicate transaction. The $7,260 of Idaho 6 SBDI expenses had originally been charged to the Oregon 7 Rider. When this was discovered in 2021, the Company 8 transferred the amount to the Idaho Rider, but the 9 transaction was duplicated adding the amount twice. The 10 duplicate transaction was identified and reversed in 2022, 11 and therefore, $7,260 needs to be removed from the 2021 12 prudence request. 13 Q. What amount of Rider-funded employee DSM-14 related labor expense did the Company incur in 2021? 15 A. The 2021 total Rider-funded DSM employee labor 16 expense incurred by the Company related to managing the DSM 17 program portfolio and pursuing energy efficiency 18 educational and awareness campaigns was $3,205,211. 19 Q. What amount of 2021 DSM-related labor is the 20 Company requesting be funded through the Rider? 21 A. The Company is requesting $3,205,211 in 2021 22 DSM labor expense be collected through the Rider. This 23 amount is appropriately recovered through the Rider as it 24 is lower than the Commission’s authorized labor cost cap 25 THOMPSON, DI 19 Idaho Power Company detailed in Order Nos. 34874 and 35270. The 2021 DSM labor 1 expense was $28,722 under the cap as detailed in Table 2 2 below. 3 Table 2. Labor Expense Calculation 2020 Total Actual Labor Expense $ 3,408,382 2020 FTEs* ÷ 25.09 2020 Actual Average Wage per FTE $ 135,848 2% Cap x 1.02 2021 Maximum Average Wage per FTE $ 138,565 2021 FTEs* x 23.34 2021 Maximum Allowed Labor Expense* $ 3,233,933 2021 Total Actual Labor Expense - $ 3,205,211 Amount Under Maximum Allowed Labor Expense $ 28,722 *25.09 and 23.34 are rounded values. 4 5 Q. What was the year-end 2021 balance of the 6 Rider? 7 A. The Rider account balance on December 31, 8 2021, had a negative, or under-collected, balance of 9 $6,937,705. Table 3 below shows the January 2021 beginning 10 balance, funding plus accrued interest, expenses, and the 11 ending balance as of December 31, 2021. 12 Table 3. Idaho Energy Efficiency Rider (January-December 13 2021) 14 Idaho Energy Efficiency Rider 2021 Beginning Balance $ (12,230,374) 2021 Funding plus Accrued Interest as of 12/31/21 33,235,765 Total 2021 Funds 21,005,391 2021 Expenses as of 12/31/21 (27,943,096) Ending Balance as of 12/31/21 $ (6,937,705) 15 THOMPSON, DI 20 Idaho Power Company III. 2021 COST-EFFECTIVENESS OVERVIEW 1 Q. What is Idaho Power’s overall goal when it 2 comes to DSM cost-effectiveness tests? 3 A. Idaho Power strives to ensure that DSM funds 4 collected from customers are utilized to support the 5 pursuit of cost-effective energy efficiency and demand 6 response programs, with the limited exception of certain 7 policy considerations. This goal is achieved by applying a 8 multi-step process. Prior to the actual implementation of 9 energy efficiency or demand response programs, Idaho Power 10 performs a preliminary cost-effectiveness analysis to 11 assess whether a potential program design or measure will 12 be cost-effective from the perspective of customers as well 13 as the Company. Idaho Power measures cost-effectiveness 14 under three tests: the UCT, the TRC test, and the PCT. A 15 review of each test allows for an economic assessment of 16 the life-cycle costs and benefits of a DSM investment from 17 the perspective of DSM program participants, Idaho Power, 18 and non-participating customers. 19 Idaho Power also reviews the cost-effectiveness 20 results for each program and measure on an annual basis to 21 determine whether a program should continue or be modified 22 so it remains cost-effective on an ongoing basis. If a 23 measure or program is identified as non-cost-effective, 24 Idaho Power seeks EEAG input before making its 25 THOMPSON, DI 21 Idaho Power Company determination on modifying, continuing, or discontinuing an 1 offering. 2 The cost-effectiveness test methodologies and 3 assumptions are described in more detail in the first pages 4 of Supplement 1: Cost-Effectiveness (“Supplement 1”), 5 included in Attachment 1 to the Application in this 6 proceeding. 7 Q. Does Idaho Power believe its application of 8 the standard economic tests is consistent with Commission 9 directives? 10 A. Yes. Idaho Power believes its application of 11 the three economic tests is consistent with prior 12 Commission directives, as described in Order No. 33365:2 13 We thus find it reasonable for the Company to 14 continue screening potential programs using 15 each test as a guideline, and to advise us on 16 how the Company's programs fare under each 17 test. When the Company ultimately seeks to 18 recover its prudent investment in such 19 programs, however we believe the Company may 20 (but need not exclusively) emphasize the UCT-21 and that test's focus on Company-controlled 22 benefits and costs-to argue whether the 23 programs were cost-effective. As always, the 24 Company ultimately must persuade us that its 25 program investments were prudent under the 26 totality of the circumstances. 27 // 28 // 29 2 In the Matter of the Application of Idaho Power Company for a Determination of 2014 Demand-Side Management Expenditures as Prudently Incurred, Case No. IPC-E-15-06, Order No. 33365, p. 9-10. THOMPSON, DI 22 Idaho Power Company Because Idaho Power must ultimately demonstrate to 1 the Commission that its program investments were prudent 2 under "the totality of the circumstances", the Company 3 continues to evaluate performance from the three 4 perspectives. 5 Q. Has the Commission also issued a determination 6 for the proper economic test perspective to be utilized in 7 evaluating energy efficiency resources in the IRP? 8 A. Yes. In Order No. 34469 issued in Case No. 9 IPC-E-19-11, the Commission ordered “that Idaho Power use 10 the UCT perspective for integrated resource planning.” 11 A. 2021 Cost-Effectiveness Results 12 Q. What were the results of the 2021 cost-13 effectiveness analyses? 14 A. Exhibit No. 2 to my testimony, 2021 Cost-15 Effectiveness Summary by Program, Sector, and Portfolio, 16 shows the results of the UCT, TRC test, and PCT for every 17 energy efficiency program aggregated by sector and for the 18 overall portfolio. As shown in Table 4, the overall DSM 19 Portfolio achieved benefit/cost ratios greater than 1.0 for 20 each of the three cost-effectiveness tests. All three of 21 the program sectors achieved benefit/cost ratios greater 22 than 1.0 from the UCT and PCT perspectives with the 23 Residential Sector having a TRC less than 1.0. 24 // 25 THOMPSON, DI 23 Idaho Power Company Table 4. 2021 Benefit/Cost by Sector & Portfolio 1 Sector Utility Cost Test (UCT) Total Resource Cost (TRC) Test Participant Cost Test (PCT) Residential* 1.02 0.74 2.61 Commercial/Industrial 2.74 1.46 1.76 Irrigation 3.33 4.49 4.58 Portfolio* 2.17 2.18 2.73 *Does not include Weatherization Assistance for Qualified Customers (“WAQC”) program3 2 Q. Did the Company quantify the Residential 3 Sector and DSM Portfolio cost-effectiveness, including the 4 costs and benefits of WAQC? 5 A. Yes. Table 5 below shows the cost-6 effectiveness of the Residential Sector and the Overall DSM 7 Portfolio with and without the WAQC program included. 8 Table 5. Residential and Portfolio Cost-Effectiveness with 9 and without WAQC 10 Sector WAQC Not Included WAQC Included UCT TRC PCT UCT TRC PCT Residential 1.02 0.74 2.61 0.80 0.63 2.41 Portfolio 2.17 2.18 2.73 2.08 2.13 2.72 11 For 2021, Idaho Power calculated the Residential 12 Sector and Overall Portfolio cost-effectiveness with and 13 without the benefits and costs associated with the WAQC 14 program, which is funded through base rates and not the 15 3 Presenting the cost-effectiveness of the Residential Sector and Overall DSM Portfolio with and without the WAQC removes the cost burden of the program. This remains consistent with how Avista and Rocky Mountain Power present their sector and portfolio cost-effectiveness results. See Avista 2018 Idaho Annual Conservation Report, Page 13 Table 11 and Rocky Mountain Power 2020 Idaho Energy Efficiency and Peak Reduction Annual Report, Page 16 Table 10. THOMPSON, DI 24 Idaho Power Company Idaho Energy Efficiency Rider. As described in more detail 1 later in my testimony, WAQC is a weatherization program for 2 customers with limited income. While the program provides 3 real savings to customers that would otherwise be unable to 4 afford to weatherize their homes, it remains non-cost-5 effective from an economic perspective despite offering 6 health and safety benefits to customers in need. 7 Q. What assumptions were utilized to calculate 8 the sector and portfolio cost-effectiveness for 2021? 9 A. Idaho Power relies on research conducted by 10 third parties to obtain savings and cost assumptions for 11 various measures. The Company fixes savings assumptions 12 when budgets and goals are established for the next 13 calendar year unless codes and standards change, or program 14 updates necessitate a need to use updated savings. The 15 remaining inputs are obtained from the IRP planning 16 process. Because the 2019 Second Amended IRP was not 17 acknowledged at the time 2021 DSM program planning 18 occurred, Idaho Power used the avoided costs from the 19 acknowledged 2017 IRP. 20 To calculate the sector cost-effectiveness, Idaho 21 Power includes the benefits and costs associated with 22 programs that produce quantifiable energy savings. The 23 portfolio cost-effectiveness is the sum of all energy 24 THOMPSON, DI 25 Idaho Power Company efficiency activities, including those that do not have 1 savings associated with them, such as overhead expenses. 2 Q. What are the results of specific program cost-3 effectiveness? 4 A. On an individual program basis, 10 of the 16 5 energy efficiency programs offered in Idaho for which the 6 Company calculates cost-effectiveness had benefit/cost 7 ratios greater than 1.0 under the UCT. 8 The PCT ratios cannot be calculated for programs 9 that do not have a direct customer cost, and the PCT is 10 shown as “N/A” in Exhibit No. 2 for those programs. The 11 details of these calculations are found in Supplement 1 of 12 the DSM 2021 Annual Report. 13 Q. Did Idaho Power calculate cost-effectiveness 14 for each measure within each energy efficiency program it 15 offers? 16 A. Yes. In 2021, Idaho Power evaluated the 17 benefits and costs of 272 measures. The results of these 18 calculations, along with measure assumption details and 19 source documentation, can be found in Supplement 1 to the 20 DSM 2021 Annual Report. 21 Q. How did Idaho Power address any individual 22 measures that are not cost-effective based on one or more 23 tests? 24 THOMPSON, DI 26 Idaho Power Company A. The cost and benefit values used in the 1 various analyses are based on markets, technologies, 2 economic inputs, savings estimates, and cost estimates, 3 which can change over time. When a measure is identified as 4 non-cost-effective at a specific point in time, Idaho Power 5 first evaluates whether the inputs used in the calculations 6 are still applicable. Then the Company determines if the 7 measure parameters should be modified or if the measure 8 should be eliminated altogether. For additional detail on 9 measure analysis, please refer to Supplement 1 to the DSM 10 2021 Annual Report. 11 B. Non-Cost-Effective Programs 12 1. Income Qualified Weatherization 13 Q. What were the cost-effectiveness results for 14 the WAQC and Weatherization Solutions for Eligible 15 Customers (“Solutions”) programs? 16 A. As shown in Exhibit No. 2, the WAQC and 17 Solutions programs had a UCT of 0.19 and 0.15, 18 respectively. 19 Q. Does the Company expect the cost-effectiveness 20 of the WAQC and Solutions programs to improve to greater 21 than 1.0? 22 A. No. The WAQC and Solutions programs provide 23 real and substantial per home savings, but due to the costs 24 of comprehensive whole-house weatherization, it is 25 THOMPSON, DI 27 Idaho Power Company difficult for the value of the savings to outweigh the 1 costs. The weatherization services provided through the 2 WAQC program are consistent with the Idaho State 3 Weatherization Assistance Program (“WAP”) guidelines, and 4 both the WAQC and Solutions programs are offered at no 5 charge to the participant. In 2021, 161 homes in Idaho were 6 weatherized through the WAQC program. 7 For the Solutions program, the Company has continued 8 a participation requirement that was introduced in 2016 9 requiring landlords to fund at least 10 percent of the 10 project. In 2021, the Company held the average cost per 11 home constant from the 2014 level for the weatherization 12 contractors, which helped reduce the cost of the program. 13 The Company continues to support the whole-house philosophy 14 by allowing a $6,000 annual maximum average per-home cost. 15 In 2021, 7 homes in Idaho were weatherized through the 16 Solutions program after in-home work resumed in October 17 2021. Typically, more homes are weatherized when the 18 program is fully operational for an entire year with 129 19 and 141 homes being weatherized in 2019 and 2018 20 respectively. Of the 7 homes that were weatherized in 2021, 21 4 were single-family homes, and 3 were manufactured homes. 22 Q. Does Idaho Power plan to continue offering the 23 WAQC and Solutions programs in the future? 24 THOMPSON, DI 28 Idaho Power Company A. Yes. While the Company has identified that the 1 programs are not cost-effective under the UCT, unless the 2 Commission directs otherwise, Idaho Power will continue to 3 offer them to the Company’s limited-income customers on an 4 ongoing basis. The Company will also continue to consult 5 the EEAG and weatherization managers who oversee the 6 weatherization work to look for ways to improve the cost-7 effectiveness of these programs. 8 2. Programs Impacted by COVID-19 9 Q. Did ongoing impacts from COVID-19 result in 10 certain programs not being cost-effective? 11 A. Yes. As previously discussed in my testimony, 12 due to safety concerns, in-home activity for some programs 13 continued to be suspended for large portions of the year, 14 meaning programs that rely on direct install measures or 15 in-home work to achieve savings had reduced opportunities 16 for participation. Due to this limitation, Energy House 17 Calls had a UCT ratio of 0.43 in 2021 and the Multifamily 18 Energy Savings Program did not have any program 19 participation throughout the year. 20 Q. What are Idaho Power’s plans concerning the 21 Energy House Calls Program? 22 A. The Company has identified that the likelihood 23 of the Energy House Calls program becoming cost-effective 24 is low due to the contractor costs staying relatively 25 THOMPSON, DI 29 Idaho Power Company constant, while the value of the savings is expected to 1 decline as savings assumptions and avoided costs are 2 updated. As a result, the Company collaborated with EEAG 3 during 2021 on several ideas and ultimately decided on 4 ending the Energy House Calls program and incorporating the 5 cost-effective duct sealing measure for manufactured homes 6 into the Heating & Cooling Efficiency program. The Company 7 intends to make this change by the end of June 2022 but 8 will work through the remaining customers on the waitlist 9 before ending the program. 10 Q. What are Idaho Power’s plans concerning the 11 Multifamily Energy Savings Program? 12 A. The Multifamily Energy Savings program did not 13 see any participation once in-home work resumed in December 14 2021. Additionally, the program is facing an expected 15 decline in Regional Technical Forum (“RTF”) savings, which 16 coupled with lower DSM avoided costs, means the program may 17 not achieve cost-effectiveness going forward. After 18 consultation with EEAG, the Company intends to convene a 19 group of external and internal subject matter experts to 20 discuss the issues facing the program, which will include 21 seeking to identify whether cost-effectiveness can be 22 improved or in the alternative, if the Company should 23 consider ending the program. The Company expects to decide 24 on the continuation of the program by August 2022. 25 THOMPSON, DI 30 Idaho Power Company 3. Home Energy Reports 1 Q. What were the cost-effectiveness results for 2 the Home Energy Reports program? 3 A. As shown in Exhibit No. 2, the Home Energy 4 Report program achieved a UCT of 0.57 and a TRC of 0.62. 5 The Company also calculated a life cycle cost-effectiveness 6 for the program that results in a UCT of 0.87 and a TRC of 7 0.96. The main drivers contributing to the lower cost-8 effectiveness ratios are the relatively short measure life 9 of the reports and the realized savings coming in lower 10 than what was initially expected/contracted. 11 Q. What are the Company’s plans regarding 12 continuation of the Home Energy Reports program? 13 A. The Company plans to conduct an impact 14 evaluation in 2022, and the evaluation may help inform the 15 Company about any needed changes to the program in the 16 future. Additionally, the RTF has been reviewing how to 17 appropriately calculate cost-effectiveness for behavioral-18 type programs, and the Company will continue to stay 19 engaged with the RTF and monitor for any updates in 20 guidance to ensure all savings associated with the program 21 are captured and reported. The Company also intends to 22 discuss the program with EEAG and potentially decide on the 23 program’s future by the end of 2022. All stakeholder input 24 THOMPSON, DI 31 Idaho Power Company and cost-effectiveness assumptions will be considered and 1 evaluated in the Company’s decision-making process. 2 4. Small Business Direct Install (“SBDI”) 3 Q. What were the cost-effectiveness results for 4 the SBDI program? 5 A. As shown in Exhibit No. 2, the SBDI program 6 achieved a UCT of 0.99 and a TRC of 1.54. The program was 7 just slightly under 1.0 from the UCT prospective, and this 8 was primarily driven by the evaluation costs the program 9 absorbed this year associated with the 2020 process 10 evaluation that was completed in 2021. If the evaluation 11 costs are removed, the UCT and TRC ratios for the program 12 would be 1.00 and 1.55 respectively. The Company plans to 13 expand the offering to the Capital and Canyon regions of 14 its service area in 2022, which may improve cost-15 effectiveness. Idaho Power will continue to monitor the 16 SBDI program’s cost-effectiveness and will consult with 17 EEAG prior to making any future program decisions. 18 C. Demand Response Cost-Effectiveness 19 Q. Does Idaho Power evaluate cost-effectiveness 20 for its three demand response programs? 21 A. Yes, however, benefit/cost ratios are not 22 calculated for the three demand response programs. Instead, 23 the methodology used to determine the cost-effectiveness of 24 the demand response programs compares the annual cost of 25 THOMPSON, DI 32 Idaho Power Company operating Idaho Power’s demand response portfolio to the 1 levelized annual cost of a single 170 MW deferred resource 2 over a 20-year life.4 In 2021, the system-wide cost of 3 operating the three demand response programs was 4 approximately $8.3 million ($7.5 million of incentives and 5 $0.8 million of other costs). The amounts attributable to 6 the Idaho-only jurisdiction were $7.9 million ($7.1 million 7 of incentives and $0.8 million of other costs). Idaho Power 8 estimated that if the three programs were dispatched for 9 the full 60 hours allowed, the total costs would have been 10 approximately $11.1 million on a system-wide basis. 11 Using the Second Amended 2019 IRP, acknowledged by 12 the Commission in Order No. 34959, Case No. IPC-E-19-19, 13 the maximum annual cost of running all three demand 14 response programs for the maximum allowable hours of 60 15 hours should be no more than $19.6 million, leading Idaho 16 Power to conclude that its three demand response programs 17 were cost-effective in 2021. 18 // 19 // 20 // 21 //22 4 Demand response valuation methodology was reached by settlement agreement and approved in Commission Order No. 32923 as part of Case No. IPC-E-13-14. THOMPSON, DI 33 Idaho Power Company IV. EVALUATION ACTIVITY OVERVIEW 1 Q. What is the Company’s approach to DSM program 2 evaluation? 3 A. To ensure the ongoing cost-effectiveness of 4 programs through validation of energy savings and demand 5 reduction, and to guide the efficient management of its 6 programs, the Company relies on evaluations by third-party 7 contractors chosen through a competitive bidding process. 8 Idaho Power uses industry-standard protocols, internal 9 analyses, and regional and national studies to inform its 10 internal and external evaluation efforts. The Company has 11 generally conducted impact evaluations every three years, 12 and process evaluations for relatively new programs, or 13 when a program has significant changes. Supplement 2: 14 Evaluation (“Supplement 2”) to the DSM 2021 Annual Report 15 provides additional information regarding how Idaho Power 16 evaluates its programs. 17 Q. How does Idaho Power utilize the evaluations 18 described above? 19 A. Idaho Power uses the results of its 20 evaluations to inform decisions related to program 21 improvement, to compare processes to industry best 22 practices, and to benchmark and validate reported program 23 savings. 24 Q. What evaluation activities took place in 2021? 25 THOMPSON, DI 34 Idaho Power Company A. In addition to the annual cost-effectiveness 1 analyses that the Company conducts for each program, Idaho 2 Power contracted with several third-party evaluators to 3 conduct impact and process evaluations in 2021. Evaluations 4 conducted by these evaluators were on the following 5 programs: 6  Impact and process evaluations on Heating & 7 Cooling Efficiency and C&I Custom Projects 8 programs. 9  Impact evaluations on the three demand response 10 programs: A/C Cool Credit, Flex Peak, and 11 Irrigation Peak Rewards. 12  Process evaluations on Small Business Direct 13 Install and Home Energy Reports. 14  Additionally, Idaho Power completed internal 15 analyses of the Irrigation Peak Rewards, Flex 16 Peak, and A/C Cool Credit demand response 17 programs. 18 Two of the impact evaluations that were conducted in 19 2021 analyzed reported savings from the 2020 program year 20 (Heating & Cooling Efficiency and C&I Custom Projects). 21 Realization rates were as follows: 22  Heating & Cooling Efficiency: 96.8 percent. 23  C&I Custom Projects: 99.8 percent. 24 THOMPSON, DI 35 Idaho Power Company The three impact evaluations on the Company’s demand 1 response programs analyzed the data from the 2021 season. 2 For the Irrigation Peak Rewards and Flex Peak programs, the 3 third-party evaluator determined that Idaho Power’s 4 calculations were appropriate, applied correctly, and the 5 evaluator’s results were within approximately 1% of Idaho 6 Power’s calculations. For the A/C Cool Credit program, 7 Idaho Power asked the evaluator for a specific 8 recommendation on calculation methodology, which the 9 Company used to report 2021 load reductions. 10 The final reports for these evaluations, and the 11 market effects evaluations conducted by NEEA, are included 12 in Supplement 2 to the DSM 2021 Annual Report. 13 Q. Does Idaho Power have a DSM program evaluation 14 plan for 2022-2023? 15 A. Yes. The evaluation plan is included as 16 Exhibit No. 3 to my testimony and is also included in 17 Supplement 2 to the DSM 2021 Annual Report. In 2022, Idaho 18 Power’s evaluation plan includes the following third-party 19 evaluations: 20  Impact and process evaluations for C&I 21 Commercial Energy Saving Kits, C&I New 22 Construction, and C&I Retrofits. 23  Impact evaluation for Home Energy Reports. 24 THOMPSON, DI 36 Idaho Power Company Q. Is the Company conducting an independent 1 Evaluation, Measurement, and Verification (“EM&V”) of NEEA 2 savings and cost-effectiveness? 3 A. Yes. In Order No. 35270, the Commission 4 ordered the Company to conduct an independent EM&V, 5 stating:5 6 The Commission notes Staff’s concern with NEEA 7 claimed energy savings and directs the Company 8 to conduct an independent EM&V to clarify the 9 NEEA claimed savings. We agree it is 10 concerning for NEEA to claim savings from 11 electrical codes in jurisdictions outside of 12 Idaho. We direct the Company to verify the 13 accuracy of these claimed savings through an 14 independent EM&V. If the savings from 15 interjurisdictional codes and standards 16 cannot be verified, then the method for 17 claiming NEEA savings should be adjusted to 18 remove non-Idaho electrical code savings. If 19 NEEA is no longer cost-effective after an 20 independent EM&V is conducted, the Company 21 should reexamine its continued participation. 22 To the extent possible, the Company may work 23 with other Idaho regulated electric utilities 24 that are conducting a similar EM&V to examine 25 NEEA claimed savings. 26 27 In compliance with the Commission’s Order, the 28 Company is currently working with Avista Corporation on a 29 Request for Proposal to hire a third-party that will 30 conduct the EM&V of NEEA savings and cost-effectiveness. 31 The Company expects the evaluation to be completed by the 32 end of 2022. Results will be reported in the 2022 DSM 33 5 Case No. IPC-E-21-04, Order No. 35270 at 9. THOMPSON, DI 37 Idaho Power Company Annual Report or sooner if the Company determines its 1 participation in NEEA may no longer be cost-effective. 2 V. STAKEHOLDER INPUT 3 Q. What is the EEAG? 4 A. In 2002, Idaho Power formed the EEAG to 5 provide input on enhancing existing DSM programs, 6 recommending new energy efficiency measures, and 7 implementing energy efficiency programs. Members include 8 customer representatives from residential, irrigation, 9 commercial, and industrial sectors, and technical experts, 10 as well as representatives for limited-income individuals, 11 environmental organizations, state agencies, county and 12 city governments, the Commission, the Public Utility 13 Commission of Oregon, and Idaho Power. 14 Q. What is the structure of EEAG meetings? 15 A. The EEAG generally meets quarterly in-person 16 at Idaho Power’s corporate offices and through webinars as 17 needed. Due to COVID-19 safety protocols, all EEAG meetings 18 were held virtually in 2021, and the Company believes the 19 member participation and input remains strong in the 20 virtual format. 21 The agenda during EEAG meetings is varied, but 22 typically includes: new energy efficiency program ideas, 23 new measure proposals, marketing methods, specific measure 24 details including cost-effectiveness, the status of energy 25 THOMPSON, DI 38 Idaho Power Company efficiency expenses, Idaho and Oregon Rider funding, 1 program and project updates, and general information on DSM 2 issues. When appropriate, the Company invites experts to 3 speak on evaluations, research, and other topics of 4 interest to enhance EEAG’s understanding. 5 Q. How did Idaho Power solicit guidance from the 6 EEAG during the 2021 program year? 7 A. In 2021, the Company held four virtual EEAG 8 meetings and one special webinar, and during these 9 meetings, Idaho Power discussed and requested 10 recommendations on a broad range of DSM issues. As 11 explained in greater detail in the DSM 2021 Annual Report, 12 the list below includes some of the topics Idaho Power 13 worked with the EEAG on for development, design, promotion, 14 or input: 15  Welcome Kit Configuration: The Welcome Kits in 16 the Educational Distributions program were 17 discussed with EEAG, and a new configuration was 18 determined through the collaborative process that 19 improved cost-effectiveness of the kits going 20 forward. 21  Demand Response Filing: Feedback was solicited, 22 and initial proposals were discussed at EEAG 23 before the Company filed its case requesting to 24 modify the three demand response programs (IPC-E-25 THOMPSON, DI 39 Idaho Power Company 21-32). EEAG feedback played a welcomed and 1 critical role in the Company’s proposal. 2  COVID-19 Impacts: The Company provided status 3 updates on affected programs throughout the year. 4 The Company shared how it was making activity 5 modifications and EEAG members provided feedback 6 on offerings effected by the pandemic. 7  WAQC Carryover Funds: Idaho Power presented 8 several ideas on how to use the WAQC carryover 9 funds accrued in Idaho and solicited feedback on 10 those options. As a result of those discussions, 11 Idaho Power expects to submit a filing with the 12 Commission seeking tariff modifications as early 13 as Q2 2022. 14 VI. CONCLUSION 15 Q. How would you summarize the 2021 DSM program 16 performance compared to previous years? 17 A. Despite several challenges in 2021, the 18 Company managed to achieve a significant amount of savings 19 beneficial to customers. The residual impacts of COVID-19, 20 the resulting supply chain issues, higher labor and 21 material costs, the maturity of the residential lighting 22 market, and the C&I Custom Projects option having a savings 23 year comparable to 2017 and 2018 as opposed to the record 24 setting years of 2019 and 2020, all played roles in the 25 THOMPSON, DI 40 Idaho Power Company portfolio’s performance. Idaho Power’s future plans for DSM 1 programs, as well as current activities the Company is 2 engaged in for 2022 and beyond, are more fully explained on 3 pages 16-18 of the DSM 2021 Annual Report. The Company has 4 shown the ability to collaborate and adapt in unprecedented 5 times to pursue cost-effective energy efficiency. Idaho 6 Power remains committed to continuing its track record of 7 success going forward. 8 Q. Do you believe that the information contained 9 in this testimony and attached exhibits supports a prudence 10 determination for 2021 DSM expenses? 11 A. Yes. The DSM 2021 Annual Report details Idaho 12 Power’s DSM offerings in program specific sections. Based 13 on the DSM 2021 Annual Report, the testimony set forth 14 above, and the attached exhibits, Idaho Power respectfully 15 requests the Commission determine that $35,055,318 was 16 prudently incurred for the acquisition of demand-side 17 resources in 2021. 18 Q. Does this conclude your testimony? 19 A. Yes, it does. 20 // 21 // 22 // 23 // 24 // 25 THOMPSON, DI 41 Idaho Power Company ATTESTATION OF TESTIMONY 1 2 STATE OF IDAHO ) 3 ) ss. 4 County of Ada ) 5 6 I, Robert Z. Thompson, having been duly sworn to 7 testify truthfully, and based upon my personal knowledge, 8 state the following: 9 I am employed by Idaho Power Company as a Regulatory 10 Analyst in the Regulatory Affairs Department and am 11 competent to be a witness in this proceeding. 12 I declare under penalty of perjury of the laws of 13 the state of Idaho that the foregoing pre-filed testimony 14 and exhibits are true and correct to the best of my 15 information and belief. 16 DATED this 15th day of March 2022. 17 18 19 Robert Z. Thompson 20 21 SUBSCRIBED AND SWORN to before me this 15th day of 22 March 2022. 23 24 25 Notary Public for Idaho 26 Residing at Ada County Idaho 27 My commission expires: 11/02/2024 28 29 30 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-22-08 IDAHO POWER COMPANY THOMPSON, DI TESTIMONY EXHIBIT NO. 1 Expenses Rider Expenses Demand Response Program Incentives Recorded in PCA Total Expenses Energy Efficiency/Demand Response Residential A/C Cool Credit 420,376$ 306,247$ 726,623$ Easy Savings: Low-Income Energy Efficiency Education - - - Educational Distributions 433,963 - 433,963 Energy Efficient Lighting 41,438 - 41,438 Energy House Calls 17,375 - 17,375 Heating & Cooling Efficiency Program 600,636 - 600,636 Home Energy Reports 970,197 - 970,197 Home Energy Audit 70,448 - 70,448 Multifamily Energy Savings Program 65,525 - 65,525 Rebate Advantage 164,243 - 164,243 Residential New Construction 246,245 - 246,245 Shade Tree Project 184,680 - 184,680 Weatherization Solutions for Eligible Customers 54,793 - 54,793 Commercial/Industrial Custom Projects 7,966,164 - 7,966,164 New Construction 2,673,925 - 2,673,925 Retrofits 3,735,093 - 3,735,093 Commercial Energy-Saving Kits 71,501 - 71,501 FlexPeak Program 101,236 225,617 326,852 Small Business Direct Install 1,052,943 - 1,052,943 Irrigation Irrigation Efficiency 2,350,620 - 2,350,620 Irrigation Peak Rewards 239,101 6,601,114 6,840,215 Energy Efficiency/Demand Response Total 21,460,500$ 7,132,978$ 28,593,478$ Market Transformation NEEA 2,828,794 - 2,828,794 Market Transformation Total 2,828,794$ -$ 2,828,794$ Other Programs and Activities Commercial/Industrial Energy Efficiency Overhead 742,155 - 742,155 Energy Efficiency Direct Program Overhead 279,095 - 279,095 Residential Energy Efficiency Education Initiative 470,432 - 470,432 Residential Energy Efficiency Overhead 1,091,701 - 1,091,701 Other Programs and Activities Total 2,583,383$ -$ 2,583,383$ Indirect Program Expenses Energy Efficiency Accounting & Analysis 1,043,916 - 1,043,916 Energy Efficiency Advisory Group 10,479 - 10,479 Special Accounting Entries Special Accounting Entries 16,024 - 16,024 Indirect Program Expenses Total 1,070,419$ -$ 1,070,419$ Total Expenses 27,943,096$ 7,132,978$ 35,076,074$ Adjustments Prior year-end accounting adjustments: 2020 Audit Adjustment (a)2,159 2,159 2020 Green Power (b)(57) (57) 2020 SBDI: Small Business Direct Install (c)(15,910) (15,910) Current year-end accounting adjustments: 2021 Residential New Construction (d)1,356 1,356 2021 Commercial & Industrial (e)(1,044) (1,044) 2021 SBDI: Small Business Direct Install (f)(7,260) (7,260) 2021 Prudence Filing Total 27,922,340$ 7,132,978$ 35,055,318$ (b) Credit to the Idaho Rider that should have been applied to Green Power, a non-rider program. The correction was made in 2021. (c) Idaho Rider expense initially charged to the Oregon Rider. The correction was made in 2021.(d) 2021 Idaho Rider expense initially charged to the Oregon Rider. The correction was made in 2022. (e) 2021 Oregon Rider expense that was initially charged to the Idaho Rider. The correction was made in 2022.(f) Duplicate 2021 Idaho Rider transaction. The correction was made in 2022. (a) Oregon Rider expense initially charged to the Idaho Rider in 2020. The correction was made in 2021. Idaho Power Company 2021 Idaho DSM Expenses and Adjustments for Prudence Filing Exhibit No. 1 Case No. IPC-E-22-08 R.Z. Thompson, IPC Page 1 of 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-22-08 IDAHO POWER COMPANY THOMPSON, DI TESTIMONY EXHIBIT NO. 2 Program/Sector Utility Cost Test (UCT) Total Resource Cost (TRC) Participant Cost (PCT) Educational Distributions 2.39 3.10 N/A Energy House Calls 0.43 0.50 N/A Heating & Cooling Efficiency Program 1.14 0.36 0.84 Home Energy Reports1 0.57 0.62 N/A Multifamily Energy Savings Program N/A N/A N/A Rebate Advantage 1.13 0.66 1.97 Residential New Construction 1.64 0.99 2.13 Shade Tree Project 1.07 1.21 N/A Weatherization Assistance for Qualified Customers 0.19 0.31 N/A Weatherization Solutions for Eligible Customers 0.15 0.28 N/A Residential Energy Efficiency Sector2 1.02 0.74 2.61 Commercial Energy-Savings Kits 1.64 2.00 N/A Custom Projects 2.98 1.32 1.35 New Construction 2.98 2.70 3.72 Retrofits 2.53 1.27 1.70 Small Business Direct Install 0.99 1.54 N/A Commercial/Industrial Energy Efficiency Sector3 2.74 1.46 1.76 Irrigation Efficiency 3.32 4.49 4.58 Irrigation Energy Efficiency Sector4 3.33 4.49 4.58 Energy Efficiency Portfolio5 2.17 2.18 2.73 1 Cost-effectiveness based on 2021 savings and expenses. Cost-effectiveness ratios are also calculated for the program life-cycle and are 0.87 and 0.96 for the UCT and TRC respectively. 2 Residential Sector cost-effectiveness excludes WAQC benefits and costs. If included, the UCT, TRC, and PCT are 0.80, 0.63, and 2.41 respectively. 3 Commercial/Industrial Energy Efficiency Sector cost-effectiveness ratios include savings and participant costs from Green Motors Rewinds. 4 Irrigation Energy Efficiency Sector cost-effectiveness ratios include savings and participant costs from Green Motors Rewinds. 5 Portfolio cost-effectiveness excludes WAQC benefits and costs. If included, the UCT, TRC, and PCT are 2.08, 2.13, and 2.72 respectively. 2021 Cost-Effectiveness Summary by Program, Sector, and Portfolio 2021 Benefit/Cost Tests Exhibit No. 2 Case No. IPC-E-22-08 R.Z. Thompson, IPC Page 1 of 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-22-08 IDAHO POWER COMPANY THOMPSON, DI TESTIMONY EXHIBIT NO. 3 2023 2022 2021 2020 2019 2018 2017 2016 2015 1 2014 2013 2012 2011 2010 Educational Distributions I/P Energy House Calls I/P I P Heating & Cooling Efficiency Program I/P I/P P I P Home Energy Audit I/P I P Home Energy Reports I P Multifamily Energy Savings Program I/P I/P Rebate Advantage I I/P I Residential New Construction Pilot Program I I/P Shade Tree Project I O P Weatherization Assistance for Qualified Customers O O O P I Weatherization Solutions for Eligible Customers O O O P I Commercial Energy-Saving Kits I/P Custom Projects I/P I P I/P I P New Construction I/P I P I I P Retrofits I/P I P I P I P Small Business Direct-Install I P Irrigation Efficiency Rewards I I/P I/P P/O I/P P A/C Cool Credit O O I O I O O I I I O P O Flex Peak Program O O I/O O O O O I/O I/O P/O O Irrigation Peak Rewards O O I/O O O O O O I/O O O O 1 Energy efficiency programs evaluated in 2015 have since been eliminated or combined into another program. Evaluation Type: I = Impact, P = Process, O = Other Program not yet in existence Residential Energy Efficiency Programs Commercial/Industrial Energy Efficiency Programs Demand-Response Programs Irrigation Energy Efficiency Programs Customer Relations and Energy Efficiency 2022-2023 Program Evaluation Plan Exhibit No. 3 Case No. IPC-E-22-08 R.Z. Thompson, IPC Page 1 of 1