20220210Comments.pdf

..-.:lr:r
':'.:r i 'r tr-?l n, r.).. it i.lla-'ut-Benjamin J. Otto (lSB No. 8292)
Emma E. Sperry
710 N. 6s Street
Boise, ID 83701
Ph: [phone] x ll2
[e-mail]
esperry@idahocon servation.org
Attorneys for the Idaho Conservation League
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
:i i-. :,.!!-rij
IN THE MATTER OF IDAHO
POWER COMPAIYY'S
APPLICATION FOR APPROVAL TO
MODIFY ITS DEMAND RESPONSE
PROGRAM
CASE NO. IPC.E-2I.32
IDAHO CONSERVATION LEAGUE
COMMENTS
The Idaho Conservation League submits the following formal comments regarding Idaho
Power's proposed demand response @R) programs. ICL submits these comments pursuant to
Rule 203 of the Commission's Rules of Procedurel and pursuant to the Notice of Modified
Procedure2 issued in this case by the Commission on December 21,2021.
ICL appreciates the steps that Idaho Power has taken to ensure that their DR programs
better meet ongoing capacity needs. However, we are concerned that Idaho Power has not
proposed any expansion of its DR capacity and we urge the Company to develop expanded DR
programs that provide benefits to a larger set of customers.
I. Demand Response is a Valuable but Underutilized Resource for ldaho Power.
In its filing, Idaho Power recognized that DR is valuable and cost-effective up to at least
584 MW of capacity, yet it opted not to increase its DR capacity beyond a "conservative
estimate" of 300 MW.3 Based solely on these numbers, Idaho Power is foregoing 284 MW of
' IDAPA 3 I .01 .01 .203
2 Notice of Modified Procedure: Order No. 35266, Case No. IPC-E-21-32,1-2 (Dec. 21,2021).
3 Direct Testimony of Jared Ellsworth, Case No. IPC-E-21-32,23 -24 (Oct.l,202l).
IPC-E-21-32 I February 10,2022
ICL COMMENT
clean power capacity that would help the Company cover energy needs during peak hours,
provide direct benefits to customers, and realize environmental benefits which would push the
Company closer to its own clean energy goals.
ln addition, because Idaho Power's modeling for DR did not fully capture that amount of
solar that will come on line in the 2O-year planning period, 584 MW of cost effective potential
DR capacity may be an underestimate. As Mr. Ellsworth's testimony notes, the more solar that
enters the system, the more valuable DR becomes because DR can provide capacity in times
where solar is not producing power. In their DR modeling, the Company modeled the
effectiveness of DR in scenarios with l) no additional solar (the current IPC solar capacity);2)
120 MW of additional solar; and 3) 520 MW of additional solar.a Because the Company intends
to introduce 1,405 MW of solar before 2040,5 520 MW of additional solar is not reflective of the
Company's ZD-year plan. Yet, Idaho Power uses the results from the DR modeling to predict DR
potential for the entire Z}-year planning period.6 As a result, it is likely that more than 584 MW
of DR is cost effective for the Company during the full 20-year planning period.
Given that Idaho 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 the2020-2040 planning
period,T ICL assumes that more DR was not selected in the IRP because, although it is cost
effective, it is not as low cost as other supply-side nesources. While we recognize the importance
of keeping resource costs low in order to provide customers with reasonable rates, ldaho Power
4 Direct Testimony of Jared Ellsworth, supra at 6-9. (The 520 MW of additional solar number comes from the model
on page 9. The Company modeled 836 MW of solar in its final scenario. With a current solar capacity of 316 MW,
this is an additional 520 MW capacrty of solar (836 - 316 : 520))
5 Idaho Power, 2 0 2 I Integrated Resource P lan, I 52 (Dec. 2021).
6 Idaho Powern suprq at 69. (IPC allowed the.IRP model to select from 584 MW of DR capacity, 284 MW more than
the 300 MW ofDRthat is anticipated to result from the DR programs proposed in this proceeding)
7 Id. at63.
tPc-E-zt-32
ICL COMMENT
2 February 10,2022
overlooks several DR benefits that would make DR appear more attractive than other supply-side
resources.
l. DR can provide transmission and distribution deferral benefits to the Company.s In its
analysis, Idaho Power only examined the capacity and peak energy savings benefits.
2. DR provides direct benefits to customers that Idaho Power did not capture in their
analysis. For example, customers value the ability to control their electricity usage and
their bill amount. Customers also value the ability to positively impact the environment
by reducing their use of electricity.e
3. Even if DR programs are slightly more costly than other supply-side resources such as
purchasing power from the wholesale market or manufacturing power in out-of-state gas
plants, DR programs keep Idaho dollars in Idaho. Idaho Power customers who participate
in DR programs or who pay for them indirectly through their power bills can be confident
that their money is spent for the benefit of other Idahoans rather than out-of-state actors.
ICL recognizes that Idaho Power is planning to undertake a more thorough analysis of its
DR programs in the coming year.l0 We worry, however, that the assumptions in this filing and
the IRP have set an artificially low starting point for DR expansion. In future years, as the full
value of DR becomes more apparent, the Company will be forced to scramble to design and
implement new DR programs. In the meantime, the Company may invest in resources that are
E Ryan Hledik, et al., The National Potential for Load Flexibility: Value qnd Marl@t Potential Through 2030, Brattle
Group, 12, https://www.brattle.com/wp-content/uploadsi202 l/05/16639_national potentialfor load_flexibility_-
fi nal.pdf (last visited F eb. 9, 2021).
e Omar I. Asensio & Magali A. Delmas, Nonprice Incentives and Energt Conservation, I 12 Proc. of the Nat'l Acad.
ofSci. 6, E5l0 (2015). (In this paper, the authors found that messages about the environmental and health benefits
of decreased electricity usage were more effective than messages about monetary savings at incentivizing
participants to reduce their use ofappliances)
ro Idaho Power, supra at69.
IPC-E-21-32 3 February 10,2022
ICL COMMENT
more costly and less environmentally sound in the long term. Additionally, DR programs take
time to implement and may have unexpected participation pattems. Idaho Power should revisit
its assumptions about the value provided by DR and begin planning now for how it will expand
its DR to accommodate future capacity needs.
IL Idaho Power Should Expand its Demand Response Capacity by Offering a Larger
Selection of DR Programs and Increasing its Marketing of DR Programs.
Expanded Programs
Idaho Power should expand its DR programs in order to realize the full potential that DR
can provide as well as to provide benefits to a larger number of customers. These new DR
programs should prioritize the delivery of benefits to low-income customers who may struggle
with high electric bills and who have not been a focus of Idaho Power's previous demand
response programs. The following programs are not an exhaustive list of DR programs that Idaho
Power should analyze in their upcoming DR study, but rather are programs that have a
particularly high potential to provide significant financial and environmental benefits to a large
number and variety of customers.
l. Water Heater Program
Idaho Power should implement a smart water heater demand response program in which
the utility installs technology that allows it to remotely control water heater energy use. This
progrcm can be implemented in both single-family homes and multifamily housing. Idaho Power
should cover the cost of the water heater retrofit at least for low-income customers, if not for all
customers. ln the multifamily housing version of the program, Idaho Power should provide
property managers with incentives to purchase compatible water heaters if they do not already
[PC-E-2I-32
ICL COMMENT
4 February 10,2022
have one and then provide free or low-cost retrofits to the water heater.ll Idaho Power should
also encourage property managers to pass on the electricity savings to their residents in the form
of lower rent/utility bills or property upgrades.
As Mr. Ellsworth points out in Exhibit I of his testimony, there is an enorrnous capacity
potential for a water heater DR program12 which means that the up-front costs of the program
will quickly be recovered via capacity benefits. This program will also provide significant
savings to residential customers, particularly low-income customers, and will not have a large
impact on customer comfort.
2. Electric Vehicle Peak Pricing Program
As electric vehicles (EVs) become increasingly common, utilities across the country are
designing time of use pricing programs specifically for EV charging. Most of these programs ask
customers to voluntarily shift their EV charging to non-peak hours, but some utilities have
invested in technology that remotely controls EV chargers and automatically adjusts power usage
during peak hours.13 While Idaho Power encourages EV users to enroll in its Time Of Day
pricing program, the program is not tailored to EV customers and their charging needs and will
not result in as much savings as a remote control EV program.
Although an EV demand response program that remotely controls EV charging may be
more costly to Idaho Power than other types of DR program,la robust EV demand response and
rr See Application for Defened Accounting of Costs Associated with the PGE Demand Response Water Heater
Pilot, Docket No. UM 1827(3) (Pub. Utilities Comm. of Ore.), 3-4 (Apr. 18,2017). (The Portland General Electric
water heater program provides incentives to property managers to buy compatible water heaters for the DR program
and then provides the necessary retrofits for the utility to have control over water heater energy usage. The progrcm
also gives coupon books to residents living in participating buildings.)
12 See Direct Testimony of Jared Ellsworth, Exhibit No. l, Case No. IPC-E-21-32 (Oct. 1,2021). (A water heater
DR program could provide up to 103. I MW of DR capacity, 22.5o/o of the total MW capacity for tdaho Power DR
based on the NWPP calculations)
t3 See, e.g.,CPS Energy, FlexEV Reward.s, https:/iwww.charsinsrewards.com/cpsenerey/ (last visited Feb.9,2022).
14 Ellsworth, Exhibit l, supra. (lists Residential EV demand response program as "High Cost")
IPC-E-21-32 5 February 10,2022
ICL COMMENT
incentive programs will increase EV usage among Idaho Power's customers. More EVs will
ultimately increase customer electricity usage and provide financial benefit to the Company.
More EVs will also provide environmental and financial benefits to ratepayers. ICL urges the
Company to conduct a full analysis of these potential benefits of EV programs in its upcoming
DR study.
3. Expand AC Program to Multifamily and Small Commercial
Idaho Power's current AC Switch demand response program should be expanded to
encourage multifamily customer participation and permit small commercial customer
participation.
During the January 31,2022 technical workshop for this proceeding, Mr. Nesbiff stated
that multifamily implementation of the AC program is challenging due to the high turnover rate
of tenant participation. Idaho Power can overcome this challenge by encouraging property
owners to require tenants in the lease to keep their AC switch installed and developing marketing
that informs new tenants about the benefits of remaining in the AC program.
Mr. Nesbitt also identified challenges associated with implementing a small commercial
AC switch program including that the Commission denied a similar program in 2009.Is In that
order, the Commission was concerned that the small commercial program would not be cost
effective and that there was not sufficient funding from the Energy Efficiency Rider to pay for
the up-front costs of the program. Given that it has been l3 years since that order was issued,
Idaho Power should revisit its analysis of a small commercial AC program and determine ways
to make this program cost effective. Idaho Power has since studied the exact energy savings that
result from the AC Switch program and can apply those leamings to the study of a new small
15 Order 30852, Case No. IPC-E-09-12, 5 (July 1,2009).
[PC-E-21-32 6
ICL COMMENT
February 10,2022
commercial program.16 In addition, Idaho Power is no longer as constrained by the Energy
Efficiency Rider in selecting its DR programs. Rather, the Company can select DR resources that
are cost effective and beneficial to ratepayers.lT
4. New Construction Programs
Finally, Idaho Power should expand its current New Construction energy efficiency
incentive program to include demand response upgrades. This program would provide incentives
to builders who include DR-enabling technology in new construction such as water heater and
AC switches and smart thermostats. The program would also automatically enroll the new
homeowners in the DR programs and provide information to the customer about the benefits of
remaining enrolled in the DR programs.
Marketing
Idaho Power's residential DR programs are only effective if customers are aware that
they exist and if enrolling is easy. After the 201 3 Demand Response settlement agreement, Idaho
Power stopped marketing DR programs to new customers in all rate classes.ls Although the
application in this current proceeding proposes to remove the limitation on marketing in
Schedule 23 (the irrigator DR program), it is unclear whether Idaho Power also offrcially plans to
lift the ban on marketing to residential and commercial customers.le As Mr. Nesbiu remarked
during the January 31,2022 technical workshop, Idaho Power's marketing ban for residential
DR program has meant that approximately 59,000 new Idaho Power customers did not learn
16 See Idaho Power, 2020 Annual Report: Demand Side Managemerl, Supplement 2: Evaluation, 335 (Mar. 15,
2021). (NC Cool Credit 2020 Demand Response Analysis) (Filed in IPC-E-21-04)
r7 See Order 34871, Case No. IPC-E-20-33 (December 17,2020). (increasing the rider level to address underfunding
of energy efiiciency progrilms and encouraging the Company to continue to pursue all cost effective demand side
management programs)
r8 Motion to Approve Settlement Agreement, Attachment 2, Case No. IPC-E- 13 -14, 5-7 (Oct. 2,2013).
re Application, Case No. IPC-E-21-32,13 (Oct. 1,2021).
IPC-E-21-32 7 February 10,2022
ICL COMMENT
about the program.2o Indeed, participation in the AC Cool Credit program has actually decreased
since 2013.2r ICL fully supports lifting the ban on marketing for residential and commercial
customers.
In addition to lifting the ban on marketing, Idaho Power should increase marketing efforts
to low-income customers. Low-income customers are the most likely to receive substantial
benefit from a DR program that provides a credit to offset some of their monthly electricity bill,
yet they are also more likely than wealthier customers to face barriers to participation in these
programs. For example, low-income customers may be unable to take the time necessary to leam
about and enroll in the program and they may worry that the program comes with hidden fees
and up-front costs. Targeted marketing combined with strategies like default enrollment can help
low income customers benefit from the energy savings DR programs provide.
Finally, Idaho Power should invest resources in studying effective and innovative
marketing and enrollment strategies for the various DR programs that we described above as
well as any other DR programs that the Company is considering implementing. Marketing plays
a huge role in ensuring that individuals participate fully in a program and a poor marketing
strategy can make a DR program appear less cost effective than it would be otherwise. ICL
suggests that Idaho Power review science-backed research as well as work closely with customer
groups during the design phase of its DR marketing strategies.
2oldaho Power, 202 I Integrated Resource Plan, Appendix A, 46-47 (Dec. 2021). (IPC gained around 59,000
customers between 2014 and2020)
2r There were29,642 customers enrolled in the program in20l4,but only 22,536 enrolled in2020. See Idaho Power,
2020 Annual Report: Demand Side Management,30 (Mar. 15,2021); Idaho Power, 2014 Annual Report: Demand-
Side Management, 35 (Mar. 1 5, 201 5).
IPC-E-21-32 8 February 10,2022
ICL COMMENT
III. ICL Supports Idaho Power's Demand Response Filing, but Requests that the
Company Review its Anticipated Demand Response Capacity and PIan for Robust
Future Demand Response Programs and Marketing.
Overall, ICL supports Idaho Power's shift to using the ELCC methodology as well as its
changes to the DR programs as long as those changes continue to result in full demand response
participation from all customer classes.22 ICL also supports Idaho Power's lift on any marketing
bans for its DR programs.
ICL requests that Idaho Power revisit its calculations for determining DR capacity over
the 20-year planning period and ensure that its models accurately reflect the full amount of solar
that will come online during that time. ICL also requests that Idaho Power account for the full
benefits of DR, such as benefits related to deferring transmission and distribution line costs,
direct benefits to customers from lowered bills, and the positive environmental impact of DR.
Finally, ICL requests that Idaho Power plan for a robust suite of demand response programs that
benefits a wide array of customers, including low income customers, and that is accompanied by
high quality marketing strategies.
Respectfully submiued this lOth day of February 2022,
t;lEmusE-Speru
Emma E. Sperry
(Assisted by Benjamin Otto)
22 Given that other intervenors in this proceeding are more closely representing the interests of irrigators, ICL's
comments do not address concerns about the changes to the irrigator DR program. It is critical, however, that any
changes to the irrigator DR program do not drastically reduce irrigator participation and lower DR capacity. We
support other intervenors' comments to the extent that they make this argument.
IPC-E-21-32 9 February 10,2022
ICL COMMENT
CERTIHCATE OF SERYICE
I hereby certify that on this lOth day of February,2022,I delivered true and
corect copies of the foregoing COMMENTS to the following persons via the method of service
noted:
/s/ BenjaminJ. Otto
Electronic mail only (See Order 35058):
Micron
Jim Sweir
Micron Technology, Inc
[e-mail]
Idaho Public Utilities Commission
Jan Noriyuki, Secretary
secretary@puc. idaho. gov
Idaho Power
Lisa D. Nordstrom
Connie Aschenbrenner
[e-mail]
[e-mail]
[e-mail]
Idaho lrrigation Pumpers Association
Eric L. Olsen
Echo Hawk & Olsen, PLLC
[e-mail]
Lance Kaufman
AEGIS Insight
lance @ae gisins i ght. com
Industrial Customers of ldaho Power
Peter J. Richardson
Richardson, Adams, PLLC
[e-mail]
Dr. Don Reading
[e-mail]
tPc-E-zr-32
ICL COMMENT
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart, LLP
darueschhoff@ho I landhart. com
[e-mail]
awj ensen@ho I landhart.com
[e-mail]
gl garganoamari@hol landhart.com
City of Boise
Ed Jewell
Deputy City Attomey
Boise City Attorney's Office
ej ewell @cityofboise.com
boi [e-mail]
l0 February 10,2022