20230630Supplemental Application.pdf

LISA NORDSTROM
Lead Counsel
[e-mail]

June 30, 2023

Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714

Re: Case No. IPC-E-23-10
In the Matter of the Application of Idaho Power Company for a Determination
of 2022 Demand-Side Management Expenses as Prudently Incurred

Dear Ms. Noriyuki:

Attached for electronic filing is Idaho Power Company’s Supplemental Application and
the Direct Testimony of Theresa Drake in support of the Supplemental Application in the
above-entitled matter.

In addition, two (2) copies of the Supplemental Application and Direct Testimony will
be hand delivered to the Commission. A Word version of the testimony will also be sent
in a separate email for the convenience of the Reporter.

If you have any questions about the attached documents, please do not hesitate to
contact me.

Sincerely,

Lisa Nordstrom
LN:cd
Enclosures
RECEIVED
2023 JUNE 30, 2023 3:08PM
IDAHO PUBLIC
UTILITIES COMMISSION
SUPPLEMENTAL APPLICATION - 1
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]

Attorneys for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A
DETERMINATION OF 2022 DEMAND-SIDE
MANAGEMENT EXPENSES AS
PRUDENTLY INCURRED.
)
)
)
)
)
)

CASE NO. IPC-E-23-10

SUPPLEMENTAL APPLICATION

Idaho Power Company (“Idaho Power” or “Company”) hereby respectfully submits
to the Idaho Public Utilities Commission (“Commission”) this Supplement to the
Company’s Application pursuant to Procedural Rule 52 seeking an order (1) designating
Idaho Power’s 2022 DSM expenses of $39,896,437 as prudently incurred, (2) finding the
Company complied with the directives outlined in Order No. 35270, and (3)
acknowledging continued participation in NEEA through the current funding cycle is likely
to result in cost-effective energy savings for Idaho Power’s customers.
In support of this Supplemental Application Idaho Power represents as follows:
I. INTRODUCTION
1. Idaho Power considers energy efficiency and demand response to be an
important and necessary part of a balanced approach to meeting system energy needs,
SUPPLEMENTAL APPLICATION - 2
and it endeavors to provide customers with programs and knowledge through its DSM
programs to help them use electricity wisely. As part of its efforts in this regard, the
Company participates in regional market transformation through the Northwest Energy
Efficiency Alliance (“NEEA”), a collaborative approach aimed at identifying and removing
market barriers to energy efficiency to drive permanent change throughout the supply
chain.
2. Energy savings are achieved through NEEA’s market transformation
programs, codes and standards work, and investment in tools, training, resources, data
and research to support greater efficiency. Because market transformation work takes
time (typically viewed on a 20-year cycle1), benefits may not be seen immediately, and as
a result, NEEA operates on a five-year funding cycle though it reports estimated savings
due to NEEA regional market transformation, allocated to utility stakeholders, on an
annual basis.
3. In evaluating the prudency of the Company’s 2020 DSM expenses, the
Commission noted Staff’s concerns with NEEA claimed energy savings and agreed that
in order to support the continued funding of NEEA, an independent Evaluation,
Measurement, and Verification (“EM&V”) should be conducted to: (1) clarify the savings
NEEA claims; (2) the allocation of those savings to its member utilities; and (3) the cost-
effectiveness of those savings to the member utilities based on the utilities' DSM avoided
cost.2

1 See “NEEA Fundamentals of Market Transformation” at 4 (identifying NEEA’s standard cost-
effectiveness time frame as 20 years). Available at: https://neea.org/img/documents/NEEA-
Fundamentals-of-Market-Transformation.pdf. Accessed Jun. 27, 2023.
2 In the Matter of Idaho Power Company’s Application for a Determination of 2020 Demand-Side
Management Expenses as Prudently Incurred, Case No. IPC-E-21-04, Order No. 35270 at 6 and 9 (Dec.
27, 2021).
SUPPLEMENTAL APPLICATION - 3
4. Thereafter, the Company undertook efforts to fulfill the Commission’s
directive in collaboration with Avista Corporation (“Avista”), which had been similarly
instructed, to conduct a single EM&V to examine NEEA claimed savings for efficiency
purposes. The companies hired ADM Associates Inc. (“Evaluator”) to complete the
independent EM&V on behalf of both utilities.
5. In its Application filed on March 15, 2023, the Company advised that the
EM&V report was forthcoming but not yet complete and would therefore be supplemented
by the end of June 2023.3 Accordingly, the Company is providing this Supplemental
Application along with the Direct Testimony of Theresa Drake (“Drake Testimony”) and
exhibits thereto including the NEEA EM&V Report (Exhibit No. 1), Idaho Power’s Net
Market Effect NEEA Savings 1997 – 2022 (Exhibit No. 2), and the NEEA EM&V Report
Addendum (Exhibit No. 3). As summarized herein, while the evaluation found NEEA
savings to be overall cost effective, it identified several concerns regarding NEEA’s
reported energy savings and provided recommendations to address its findings, which
will guide the Company as it considers its continued participation in the next funding cycle.
II. THE INDEPENDENT EVALUATION, MEASUREMENT, AND VERIFICATION

6. As directed by the Commission, an Evaluator was retained for the purpose
of validating the savings NEEA claims, verifying the allocation of savings to Idaho Power
and Avista, and determining the cost-effectiveness of the savings for the companies
based on the utilities’ DSM avoided cost.
7. NEEA’s approach to reporting and allocating energy efficiency savings
differs for each of its main reporting category as follows:

3 Application at 6 and 16.
SUPPLEMENTAL APPLICATION - 4
Voluntary Measure Activities
 Tracks total regional sales of the measure to calculate overall energy
savings, then subtracts the baseline estimate of sales that would have
occurred in absence of the initiatives.
 Removes any applicable energy savings generated by local utility-run
programs.
 Allocates the regional net market effect energy savings to Idaho Power
based on the funder share allocation methodology.
Federal or State Energy-Saving Product Standards
 Engages a third-party evaluator to calculate energy savings, assess the
overall impact of the standard as well as NEEA’s role in its enactment.
 Allocates the net market effect energy savings to Idaho Power using the
funder share methodology.
Building Codes
 Conducts a third-party review to quantify the energy impacts compared to
the previous code and claims these energy savings on all new construction
for a 10-year period after the code goes into effect.
 Assigns saving based on an estimate of the code impact within each
funder’s respective region, a methodology known as service territory
allocation.
8. As more fully described in the Drake Testimony and exhibits, while the
evaluation found NEEA savings to be cost effective overall, it identified some concerns
regarding NEEA’s reported energy savings. In reviewing how NEEA accounts for energy
savings related to its activities, the EM&V made a number of findings on various issues
SUPPLEMENTAL APPLICATION - 5
including, but not limited to, concerns over the use of the funder share methodology to
allocate savings stemming from voluntary measures and federal or state energy-saving
product standards; the method and role of formal influence evaluations in determining
savings for product standards and building codes; and data reporting practices. The
EM&V also noted in its findings areas of divergence between the priorities and
approaches of the NEEA, which develops programs to benefit a broader constituency and
prioritizes cost-effective savings in terms of regional benefits, and its individual member
utilities, that are beholden to their respective ratepayers and regulatory commissions. See
Drake Testimony, Exhibit 1.
9. In relation to the findings of the EM&V dated April 6, 2023, the Evaluator
made a number of recommendations for improvement, which ranged from changing to a
service territory savings allocation methodology, completing influence evaluations to
verify savings associated with federal standards, completing evaluations for code updates
to quantify NEEA’s influence, updating how annual savings and costs are reported, and
other updates to how savings are accounted for and reported.4 Idaho Power sent a copy
of the final report to NEEA in April 2023.
10. Upon reviewing the final EM&V report, NEEA provided responses to certain
conclusions and recommendations as well as raised several questions regarding the
findings in the report in a letter to Idaho Power and Avista sent in May 2023. Shortly
thereafter, the companies, NEEA, and the Evaluator met to discuss the issues in more
detail. As a result of that meeting, the Evaluator compiled a list of items requiring further
follow-up with NEEA, and NEEA responded by providing additional information in late
May and early June 2023. After reviewing the additional information, the Evaluator issued

4 See Drake Testimony, Exhibit 1 at 16-20 (listing of all of the Evaluator’s findings and recommendations)
and Exhibit 3 at 12-16 (table listing revised findings and recommendations).
SUPPLEMENTAL APPLICATION - 6
an addendum to the EM&V report dated June 15, 2023, which recharacterizes some of
the language from the initial report and revised certain findings and recommendations
resulting from the evaluation. See Drake Testimony, Exhibit 3.
11. Idaho Power appreciates the efforts of the Evaluator in the evaluation of the
Idaho-specific NEEA impacts. The Company is committed to the pursuit of tangible,
transparent, and cost-effective energy savings for its customers and has initiated plans
to address the Evaluator’s recommendations. For example, the Company will explore
methods or alternatives in calculating code savings in the near term and has been working
with NEEA to address the issues moving forward. NEEA has reviewed the EM&V, offered
feedback, has initially verbally agreed to implement some of the recommendations as
soon as practicable, such as switching to service-territory allocated energy savings and
providing more detailed estimates of expenditures, and to further evaluate other
recommendations, some of which may require coordination with other NEEA members
and/or board approval.
12. NEEA has played a significant role in energy efficiency within the Northwest,
and its contributions have amounted to large energy efficiency savings across the region.
Idaho Power has been a longstanding supporter of NEEA since its inception and
continues to recognize the importance of regional collaboration. Notwithstanding, the
Company recognizes the widening differences in jurisdictional regulatory goals, market
trends, and customer needs across each state, which may impact its decision to continue
participation in the next funding cycle (2025-2029).
13. In business planning for the 2025-2029 funding cycle, the Company will
continue to address the concerns and recommendations of the EM&V and explore ways
to reduce costs and keep the focus on energy efficiency measures and activities that
deliver actual verified benefits to Idaho Power customers.
SUPPLEMENTAL APPLICATION - 7
III. CONCLUSION

14. While Idaho Power and NEEA share the same fundamental objective of
improving energy efficiency, as the EM&V demonstrates, their preferred approaches and
priorities to pursuing this shared goal may not always align. Guided by the findings and
recommendations of the EM&V, NEEA’s potential implementation of any of the EM&V
recommendations, and any Commission guidance received through orders issued in this
matter or other relevant proceedings, the Company will evaluate whether it believes
NEEA is a wise use of customer funds and provides sufficient direct benefits to Idaho
residents moving forward in order to determine whether it will participate in the next
funding cycle.
15. Idaho Power respectfully requests the Commission issue an order: (1)
designating Idaho Power’s 2022 DSM expenses of $39,896,437 as prudently incurred,
(2) finding the Company complied with the directives outlined in Order No. 35270, and (3)
acknowledging continued participation in NEEA through the current funding cycle is likely
to result in cost-effective energy savings for Idaho Power’s customers.

Respectfully submitted this 30th day of June 2023.

for

MEGAN GOICOECHEA ALLEN
Attorney for Idaho Power Company
SUPPLEMENTAL APPLICATION - 8
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 30th day of June 2023, I served a true and correct
copy of Supplemental Application upon the following named parties by the method
indicated below, and addressed to the following:

Commission Staff
Claire Sharp
Deputy Attorney General
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No. 8
Suite 201-A (83714)
PO Box 83720
Boise, ID 83720-0074

Hand Delivered
U.S. Mail
Overnight Mail
FAX
FTP Site
X Email [e-mail]

Ed Jewell
Deputy City Attorney
Boise City Attorney’s Office
150 N. Capitol Blvd.
P.O. Box 500
Boise, ID 83701-500
Hand Delivered
U.S. Mail
Overnight Mail
FAX
FTP Site
X Email [e-mail]
[e-mail]
[e-mail]

Wil Gehl
Energy Program Manager
Boise City Dept. of Public Works
150 N. Capitol Blvd.
P.O. Box 500
Boise, ID 83701-500
Hand Delivered
U.S. Mail
Overnight Mail
FAX
FTP Site
X Email [e-mail]

Becca Yates
Northwest Energy Efficiency Alliance
700 NE Multnomah Street, Suite 1300
Portland, Oregon 97232

Hand Delivered
U.S. Mail
Overnight Mail
FAX
FTP Site
X Email [e-mail]

Nicole Hydzik
Avista Corporation
1411 E. Mission Ave.
Spokane, WA 99252-0001

Hand Delivered
U.S. Mail
Overnight Mail
FAX
FTP Site
X Email [e-mail]

SUPPLEMENTAL APPLICATION - 9

Christy Davenport
Legal Administrative Assistant