Loading...
HomeMy WebLinkAbout20230315Direct R. Thompson.pdf 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 IDAHO POWER COMPANY DIRECT TESTIMONY OF ROBERT Z. THOMPSON RECEIVED Wednesday, March 15, 2023 4:00:39 PM IDAHO PUBLIC UTILITIES COMMISSION 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, “Electric 21 Utility Fundamentals and Insights,” an electric utility 22 course offered by Western Energy Institute, and “Electric 23 Rates Advanced Course,” an electric utility ratemaking 24 course offered through Edison Electric Institute. 25 THOMPSON, DI 3 Idaho Power Company Q. Please describe your work experience with 1 Idaho Power. 2 A. In 2020, I was hired as a Regulatory Analyst 3 in the Company’s Regulatory Affairs Department. My primary 4 responsibilities include supporting activities associated 5 with demand-side management (“DSM”) as well as rate design 6 for the small general service, large general secondary 7 service, and irrigation customer classes. 8 Q. What is the purpose of your testimony in this 9 case? 10 A. The purpose of my testimony is to present the 11 Company’s request for a determination that $39,896,437 of 12 DSM expenses for the acquisition of demand-side resources 13 in 2022 was prudently incurred. This amount includes 14 $31,585,110 funded in 2022 by the Idaho Energy Efficiency 15 Rider (“Rider”) and $8,311,328 of demand response program 16 incentive payments funded through base rates and tracked 17 annually through the Power Cost Adjustment (“PCA”). 18 My testimony will: (1) provide a review of 2022 DSM 19 program performance, (2) discuss 2022 DSM expenses and 20 adjustments, (3) provide an overview of the cost-21 effectiveness results for 2022, (4) review program 22 evaluation efforts, and (5) describe the input stakeholders 23 provided during the year. 24 THOMPSON, DI 4 Idaho Power Company I. 2022 DSM PROGRAM PERFORMANCE 1 Q. What is Idaho Power’s focus when evaluating 2 program performance? 3 A. Idaho Power takes its responsibility of 4 prudently managing customer-funded DSM activities 5 seriously, and the Company believes it is important to 6 provide its customers with the maximum value from these 7 activities. The Company’s actions in 2022, and the content 8 of the Demand-Side Management 2022 Annual Report (“DSM 2022 9 Annual Report”), Attachment 1 to the Application filed in 10 this proceeding, provide evidence supporting the 11 conscientious work Idaho Power employees made toward using 12 customers’ funds wisely to support DSM activities. 13 Q. Please provide an overview of Idaho Power’s 14 DSM activities in 2022. 15 A. On a system-wide basis, Idaho Power offered a 16 broad portfolio of energy efficiency and demand response 17 programs available to all customer segments, and the 18 Company also participated in market transformation efforts 19 through the Northwest Energy Efficiency Alliance (“NEEA”). 20 In addition, the Company offered several educational and 21 behavioral initiatives including the Residential Energy 22 Efficiency Education Initiative, seasonal contests, the 23 School Cohort, and the continuation of the Water and 24 Wastewater Cohort. 25 THOMPSON, DI 5 Idaho Power Company The Company leveraged its Energy Efficiency Advisory 1 Group (“EEAG”) to solicit input and feedback on ways to 2 identify opportunities to increase program effectiveness, 3 delivery, and marketing. A summary of Idaho Power’s 2022 4 DSM programs is provided in Table 1 below. 5 Table 1. 2022 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 Efficient Lighting ............................................... Energy Efficiency ID/OR Energy House Calls ...................................................... Energy Efficiency ID/OR Heating & Cooling Efficiency Program .......................... Energy Efficiency ID/OR Home Energy Audit ....................................................... 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 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 2.02 benefit/cost ratio when evaluated from a Utility 5 Cost Test (“UCT”) perspective, a 1.43 benefit/cost ratio 6 when evaluated from a Total Resource Cost (“TRC”) test 7 perspective, and a 2.01 benefit/cost ratio when evaluated 8 from a Participant Cost Test (“PCT”) perspective. 9 The DSM 2022 Annual Report provides details for each 10 program, which include: a program description, 2022 11 performance results, program activities, cost-effectiveness 12 ratios, marketing activities, customer satisfaction, 13 upcoming 2023 plans, and evaluation results if applicable. 14 Filed in conjuction with the DSM 2022 Annual Report are: 15 Supplement 1: Cost Effectiveness (“Supplement 1”), which 16 provides detailed cost-effectiveness data, and Supplement 17 2: Evaluation (“Supplement 2”), which provides copies of 18 the Company’s evaluation, reports, and research conducted 19 in 2022. 20 Energy Efficiency 21 Q. What level of incremental annual energy 22 efficiency savings was achieved in 2022? 23 A. On a system-wide basis, Idaho Power achieved 24 169,889 megawatt-hours (“MWh”) of incremental annual energy 25 THOMPSON, DI 7 Idaho Power Company efficiency savings in 2022. This value includes 145,440 MWh 1 from Idaho Power’s energy efficiency programs and an 2 estimated 24,448 MWh1 of energy efficiency market 3 transformation savings through NEEA initiatives. Chart 1 4 below shows the incremental annual energy efficiency 5 savings in MWh from 2002 to the current year. Also shown in 6 this chart are the total energy efficiency expenses for 7 each year in millions of dollars. 8 Chart 1. Incremental Annual Energy Efficiency Savings 9 (MWh)and Energy Efficiency Expenses ($ millions) 2002-2022 10 11 Note: 2022 NEEA market-transformation savings are estimated. 12 Q. Did Idaho Power meet the energy efficiency 13 targets included in its 2021 Integrated Resource Plan 14 (“IRP”)? 15 1 Because Idaho Power will not receive final 2022 savings from NEEA until the second quarter 2023, the NEEA-attributable savings is an estimate provided to Idaho Power by NEEA. THOMPSON, DI 8 Idaho Power Company A. Yes. In 2022, Idaho Power achieved 19.4 1 average megawatt-hours (“aMW”) of incremental energy 2 efficiency savings, including NEEA estimated energy 3 savings, which exceeded the economic technical achievable 4 potential included in the 2021 IRP of 16 aMW. The 2022 5 savings represent enough energy to power approximately 6 14,900 average homes in Idaho Power’s service area for one 7 year. 8 Q. How did 2022 savings compare to 2021? 9 A. Overall portfolio savings increased by 26,968 10 MWh, or 19 percent, year-over-year compared to 2021 with 11 the main drivers being the Commercial & Industrial (“C&I”) 12 Energy Efficiency Program Custom Projects, New 13 Construction, and Retrofits options. The projects within 14 these options can vary greatly in size, scale, and 15 completion, which can cause changes in overall portfolio 16 savings performance annually. These three program options 17 combined drove 53 percent of the increase in annual 18 incremental savings. A couple other notable drivers were 19 increases in savings associated with Home Energy Reports, 20 Energy Efficient Lighting, and Educational Distributions. 21 As noted in last year’s prudence request, the dip in 22 savings experienced between 2020 and 2021 was largely 23 driven by a reduction in Custom Projects. 2022 portfolio 24 results were positively impacted by several projects within 25 THOMPSON, DI 9 Idaho Power Company that program option being completed within the program 1 year. The Company anticipates the overall portfolio will 2 see lower incremental savings in the coming years due to 3 Energy Independence and Security Act of 2007 (“EISA”) 4 lighting standards being fully adopted in 2023. 5 Q. Does the Company engage in customer education 6 and outreach activities for which it cannot quantify or 7 report savings? 8 A. Yes. The Company engages in significant 9 educational awareness activities and marketing efforts that 10 are likely to result in energy savings experienced by 11 customers but are not quantified or claimed as part of 12 Idaho Power’s annual savings. These efforts are designed to 13 reach all customer segments and are more fully explained 14 throughout the DSM 2022 Annual Report. In 2022, this 15 included activity such as: holding virtual and in-person 16 technical trainings and workshops with customers, producing 17 the Energy@Work and Irrigation newsletters, participating 18 in several different types of agricultural shows, hosting 19 or participating in vendor workshops promoting irrigation 20 system efficiency, publishing residential energy efficiency 21 guides which showcased behavioral changes to save energy, 22 attending other outreach activities such as home shows, and 23 supporting the Integrated Design Lab. 24 // 25 THOMPSON, DI 10 Idaho Power Company Demand Response 1 Q. What level of capacity was available from 2 Idaho Power’s demand response programs in 2022? 3 A. The total available capacity of Idaho Power’s 4 three demand response programs (A/C Cool Credit, Flex Peak 5 Program, and Irrigation Peak Rewards) was approximately 312 6 megawatts (“MW”). This value represents the total enrolled 7 MW from participants adjusted for an expected maximum 8 realization rate. 9 Q. What level of non-coincident demand reduction 10 was provided? 11 A. The Company’s demand response programs 12 provided actual non-coincident demand reduction of 200 MW 13 during the 2022 program season. The 200 MW maximum load 14 reduction is less than 312 MW of total demand response 15 program capacity because the three demand response programs 16 are not always dispatched together during a single event 17 day and the four irrigation groups are also not always 18 dispatched coincidentally. Chart 2 below reflects the 19 annual available peak demand reduction capacity and actual 20 load reduction in MW since 2004 and the associated annual 21 expenses in millions of dollars. 22 // 23 // 24 // 25 THOMPSON, DI 11 Idaho Power Company Chart 2. Peak Demand Reduction Capacity (MW) and Demand 1 Response Expenses ($ millions) 2004-2022 2 3 II. 2022 DSM EXPENSES AND ADJUSTMENTS 4 Q. What amount of DSM expenses is the Company 5 requesting the Commission find were prudently incurred? 6 A. In the delivery of energy efficiency, demand 7 response, and market transformation programs, Idaho Power 8 expended $31,585,110 of Rider funds and paid $8,311,328 in 9 demand response program incentives, for a total of 10 $39,896,437 spent on demand-side resource acquisition in 11 2022. Idaho Power requests that the 2022 Rider-funded DSM 12 expenses, and the 2022 demand response program incentives 13 recovered through base rates and tracked through the PCA, 14 be reviewed together for a prudence determination. Exhibit 15 No. 1 to my testimony, 2022 Idaho DSM Expenses and 16 Adjustments for Prudence Filing, shows a breakout of these 17 expenses by program, customer sector, and funding source. 18 THOMPSON, DI 12 Idaho Power Company This year’s Rider-funded DSM expenses increased 1 $3,662,770, or 13 percent, compared to the DSM expenses 2 reviewed in last year’s prudence case, Case No. IPC-E-22-3 08. As described more fully above, the increase in 2022 4 expenses was primarily driven by an increase in large 5 projects participating in the C&I Program Custom Projects, 6 New Construction, and Retrofits options with total expenses 7 in those three options amounting to $16,301,141 or 8 $1,925,959 more compared to 2021. 9 Q. Please compare the dollar amounts in Exhibit 10 No. 1 to your testimony with Appendix 2, 2022 DSM expenses 11 by funding source (dollars), of the DSM 2022 Annual Report. 12 A. For clarity and ease of understanding, Exhibit 13 No. 1 ties to Appendix 2, which is found on page 186 of the 14 DSM 2022 Annual Report. The first column of Appendix 2 15 labeled “Idaho Rider” and the first column of Exhibit No. 1 16 labeled “Rider Expenses” match at the row labeled “Total 17 Expenses” in Exhibit No. 1 and “Grand Total” in Appendix 2 18 in the amount of $31,673,550. All values in Exhibit No. 1 19 represent DSM expenses for the Idaho service area only. 20 Three prior year-end and three current year-end accounting 21 adjustments were necessary to accurately arrive at the 22 total 2022 expenses for purposes of the prudence 23 determination. These six adjustments are listed in Exhibit 24 No. 1 under the Adjustments section as 2021 Commercial & 25 THOMPSON, DI 13 Idaho Power Company Industrial, 2021 Residential New Construction, 2021 SBDI: 1 Small Business Direct Install (“SBDI”), 2022 Commercial & 2 Industrial Overhead, 2022 Residential Energy Efficiency 3 Education, and 2022 Residential Energy Efficiency Overhead. 4 Q. Please describe the prior year-end accounting 5 adjustments included in Exhibit No. 1. 6 A. The first adjustment of $1,044 was associated 7 with the Commercial & Industrial program where an expense 8 should have been charged to the Oregon Rider instead of the 9 Idaho Rider in 2021. The correction to reduce the Idaho 10 Rider was made in 2022, and therefore $1,044 needs to be 11 added back to avoid understating the 2022 prudence request. 12 The second adjustment of $1,356 is associated with 13 Idaho activity for the Residential New Construction Program 14 that was incorrectly charged to the Oregon Energy 15 Efficiency Rider in 2021. The correction adding the expense 16 to the Idaho Rider was made in 2022, and therefore $1,356 17 needs to be subtracted from the 2022 prudence request 18 because it was already deemed prudent by the Commission in 19 the 2021 request. 20 The final adjustment of $7,260 associated with SBDI 21 corrected a duplicate transaction. An amount of $7,260 of 22 Idaho SBDI expenses had originally been charged to the 23 Oregon Rider. When this was discovered in 2021, the Company 24 transferred the amount to the Idaho Rider, but the 25 THOMPSON, DI 14 Idaho Power Company transaction was duplicated adding the amount twice. The 1 duplicate transaction was identified and reversed in 2022, 2 and therefore, $7,260 needs to be added back to avoid 3 understating the 2022 prudence request. 4 Q. Please describe the current year-end 5 accounting adjustments included in Exhibit No. 1. 6 A. Three accounting adjustments to the Rider for 7 2022 were identified through Idaho Power’s review of end of 8 year expenses and the corrections were made after the 2022 9 year-end financial books were closed. The first adjustment 10 results in a reduction of $6,998, which was related to 11 expenses associated with Commercial & Industrial Overheads 12 that should have been charged to O&M, rather than the Idaho 13 Rider. 14 The second adjustment requires inclusion of $1,289 15 associated with the Residential Energy Efficiency Education 16 that was initially charged to O&M instead of the Idaho 17 Rider. 18 Finally, a reduction of $89,680 was necessary to 19 remove a program administration fee the Company paid in 20 2022 that was refunded in 2023 due to services not being 21 rendered. 22 Q. What amount of Rider-funded employee DSM-23 related labor expense did the Company incur in 2022? 24 THOMPSON, DI 15 Idaho Power Company A. The 2022 total Rider-funded DSM employee labor 1 expense incurred by the Company was $3,392,286. 2 Q. What amount of 2022 DSM-related labor is the 3 Company requesting be funded through the Rider? 4 A. The Company is requesting $3,381,085 in 2022 5 DSM labor expense be collected through the Rider. This 6 amount is appropriately recovered through the Rider as it 7 is equal to the Commission’s authorized labor cost cap 8 detailed in Order Nos. 348742 and 35270.3 The actual 2022 9 DSM labor expense was $11,201 over the cap as detailed in 10 Table 2 below. 11 Table 2. Labor Expense Calculation 2021 Total Actual Labor Expense $ 3,205,211 2021 FTEs* ÷ 23.34 2021 Actual Average Wage per FTE $ 137,334 2% Cap x 1.02 2022 Maximum Average Wage per FTE $ 140,081 2022 FTEs* x 24.14 2022 Maximum Allowed Labor Expense $ 3,381,085 2022 Total Actual Labor Expense - $ 3,392,286 Amount Over Maximum Allowed Labor Expense $ (11,201) *23.34 and 24.14 are rounded values. 12 13 // 14 2 In the Matter of Idaho Power Company’s Application for a Determination of 2019 Demand-Side Management Expenses as Prudently Incurred, Case No. IPC-E-20-15, Order No. 34874, p. 5 (Dec. 18, 2020). 3 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, p. 9 (Dec. 27, 2021). THOMPSON, DI 16 Idaho Power Company Q. What was the year-end 2022 balance of the 1 Rider? 2 A. The Rider account balance on December 31, 3 2022, had a negative, or under-collected, balance of 4 $3,767,319 compared to an under-collected balance of 5 $6,937,705 on December 31, 2021. Table 3 below shows the 6 January 2022 beginning balance, funding plus accrued 7 interest, expenses, and the ending balance as of December 8 31, 2022. 9 Table 3. Idaho Energy Efficiency Rider (January-December 10 2022) 11 Idaho Energy Efficiency Rider 2022 Beginning Balance $ (6,937,705) 2022 Funding plus Accrued Interest as of 12/31/22 34,843,936 Total 2022 Funds 27,906,231 2022 Expenses as of 12/31/22 (31,673,550) Ending Balance as of 12/31/22 $ (3,767,319) 12 III. 2022 COST-EFFECTIVENESS OVERVIEW 13 Q. What is Idaho Power’s overall goal when it 14 comes to DSM cost-effectiveness tests? 15 A. Idaho Power strives to ensure that DSM funds 16 collected from customers are utilized to support the 17 pursuit of cost-effective energy efficiency and demand 18 response programs, with the limited exception of certain 19 policy considerations. This goal is achieved by applying a 20 multi-step process. Prior to the actual implementation of 21 energy efficiency or demand response programs, Idaho Power 22 THOMPSON, DI 17 Idaho Power Company performs a preliminary cost-effectiveness analysis to 1 assess whether a potential program design or measure will 2 be cost-effective from the perspective of customers as well 3 as the Company. Idaho Power measures cost-effectiveness 4 under three tests: the UCT, the TRC test, and the PCT. A 5 review of each test allows for an economic assessment of 6 the life-cycle costs and benefits of a DSM investment from 7 the perspective of DSM program participants, Idaho Power, 8 and non-participating customers. 9 Idaho Power also reviews the cost-effectiveness 10 results for each program and measure on an annual basis to 11 determine whether a program should continue or be modified 12 so it remains cost-effective on an ongoing basis. If a 13 measure or program is identified as non-cost-effective, 14 Idaho Power seeks EEAG input before making its 15 determination on modifying, continuing, or discontinuing an 16 offering. 17 The cost-effectiveness test methodologies and 18 assumptions are described in more detail in the first pages 19 of Supplement 1, included in Attachment 1 to the 20 Application in this proceeding. 21 Q. Does Idaho Power believe its application of 22 the standard economic tests is consistent with Commission 23 directives? 24 THOMPSON, DI 18 Idaho Power Company A. Yes. Idaho Power believes its application of 1 the three economic tests is consistent with prior 2 Commission directives, as described in Order No. 33365:4 3 We thus find it reasonable for the Company to 4 continue screening potential programs using 5 each test as a guideline, and to advise us on 6 how the Company's programs fare under each 7 test. When the Company ultimately seeks to 8 recover its prudent investment in such 9 programs, however, we believe the Company may 10 (but need not exclusively) emphasize the UCT—11 and that test's focus on Company-controlled 12 benefits and costs—to argue whether the 13 programs were cost-effective. As always, the 14 Company ultimately must persuade us that its 15 program investments were prudent under the 16 totality of the circumstances. 17 18 Because Idaho Power must ultimately demonstrate to 19 the Commission that its program investments were prudent 20 under "the totality of the circumstances", the Company 21 continues to evaluate performance from the three 22 perspectives. 23 A. 2022 Cost-Effectiveness Results 24 Q. What were the results of the 2022 cost-25 effectiveness analyses? 26 A. Exhibit No. 2 to my testimony, 2022 Cost-27 Effectiveness Summary by Program, Sector, and Portfolio, 28 shows the results of the UCT, TRC test, and PCT for every 29 4 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 (Aug. 28, 2015). THOMPSON, DI 19 Idaho Power Company energy efficiency program aggregated by sector and for the 1 overall portfolio. As shown in Table 4, the overall DSM 2 Portfolio achieved benefit/cost ratios greater than 1.0 for 3 each of the three cost-effectiveness tests. All three of 4 the program sectors achieved benefit/cost ratios of greater 5 than or equal to 1.0 from the UCT and PCT perspectives with 6 the Residential Sector having a TRC less than 1.0. 7 Table 4. 2022 Benefit/Cost by Sector & Portfolio 8 Sector Utility Cost Test (UCT) Total Resource Cost (TRC) Test Participant Cost Test (PCT) Residential* 1.00 0.76 2.89 Commercial/Industrial 2.71 1.34 1.71 Irrigation 2.69 2.54 2.66 Portfolio* 2.02 1.43 2.01 *Does not include Weatherization Assistance for Qualified Customers Program 9 Q. Did the Company quantify the Residential 10 Sector and DSM Portfolio cost-effectiveness, including the 11 costs and benefits of the Weatherization Assistance for 12 Qualified Customers (“WAQC”) program? 13 A. Yes. Table 5 below shows the cost-14 effectiveness of the Residential Sector and the Overall DSM 15 Portfolio with and without the WAQC program included. 16 Table 5. Residential and Portfolio Cost-Effectiveness with 17 and without WAQC 18 Sector WAQC Not Included WAQC Included UCT TRC PCT UCT TRC PCT Residential 1.00 0.76 2.89 0.84 0.67 2.56 Portfolio 2.02 1.43 2.01 1.94 1.40 2.00 19 THOMPSON, DI 20 Idaho Power Company While the WAQC program remains non-cost-effective 1 from an economic perspective, it provides real savings to 2 customers that would otherwise likely be unable to afford 3 to weatherize their homes and offers health and safety 4 benefits to customers in need that are not quantified 5 through the economic tests. 6 Q. What assumptions were utilized to calculate 7 the sector and portfolio cost-effectiveness for 2022? 8 A. Idaho Power relies on research conducted by 9 third parties to obtain savings and cost assumptions for 10 various measures. The Company fixes savings assumptions 11 when budgets and goals are established for the next 12 calendar year unless codes and standards change, or program 13 updates necessitate a need to use updated savings. The 14 remaining inputs are obtained from the Company’s IRP 15 planning process. Because the 2021 IRP was not acknowledged 16 at the time 2022 DSM program planning occurred, Idaho Power 17 used the avoided costs from the acknowledged 2019 Second 18 Amended IRP. 19 To calculate the sector cost-effectiveness, Idaho 20 Power includes the benefits and costs associated with 21 programs that produce quantifiable energy savings. The 22 portfolio cost-effectiveness is the sum of all energy 23 efficiency activities, including those that do not have 24 savings associated with them, such as overhead expenses. 25 THOMPSON, DI 21 Idaho Power Company Q. What are the results of specific program cost-1 effectiveness? 2 A. As reflected in Exhibit No. 2 to my testimony, 3 2022 Cost-Effectiveness Summary by Program, Sector, and 4 Portfolio, on an individual program basis, 9 of the 17 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 2022 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 2022, Idaho Power evaluated the 17 benefits and costs of 300 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 2022 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 22 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 2022 Annual Report. 11 B. Non-Cost-Effective Programs 12 1. Income Qualified Weatherization 13 Q. Please explain what drivers influence the 14 cost-effectiveness results for the WAQC and Weatherization 15 Solutions for Eligible Customers (“Solutions”) programs? 16 A. The WAQC and Solutions programs provide real 17 and substantial per home savings, but due to the costs of 18 comprehensive whole-house weatherization, it is difficult 19 for the value of the savings to outweigh the costs. The 20 weatherization services provided through the WAQC program 21 are consistent with the Idaho State Weatherization 22 Assistance Program guidelines, and both the WAQC and 23 Solutions programs are offered at no charge to the 24 participant. Please refer to pages 94 and 103 in the DSM 25 THOMPSON, DI 23 Idaho Power Company 2022 Annual Report for the savings, cost, and the number of 1 homes weatherized in 2022. 2 Q. Does Idaho Power plan to continue offering the 3 WAQC and Solutions programs in the future? 4 A. Yes. While the Company has identified that the 5 programs are not cost-effective under the UCT, unless the 6 Commission directs otherwise, Idaho Power will continue to 7 offer them to the Company’s limited-income customers on an 8 ongoing basis. The Company will also continue to consult 9 the EEAG and weatherization managers who oversee the 10 weatherization work to look for ways to improve outreach 11 and the cost-effectiveness of these programs as 12 opportunities are available. 13 2. Discontinued Programs in 2022 14 Q. Which programs did the Company discontinue in 15 2022? 16 A. The Company discontinued both the Energy House 17 Calls and Multifamily Energy Savings Programs on June 30, 18 2022 and December 31, 2022, respectively due to the 19 expectation that these programs will not be cost-effective 20 as currently structured going forward. After evaluating the 21 programs internally using Regional Technical Forum (“RTF”) 22 savings and 2021 IRP avoided costs, as well as 23 incorporating input from its EEAG, the Company determined 24 it was prudent to end the programs at this time. The 25 THOMPSON, DI 24 Idaho Power Company Company will continue to evaluate potential program 1 structures with the objective of increasing the 2 availability of cost-effective offerings to customers with 3 manufactured homes and multifamily dwellings. The Company 4 discussed its plans for the programs at the February 2022, 5 May 2022, and August 2022 EEAG meetings. 6 3. Programs to be Discontinued in 2023 7 Q. Is the Company planning on discontinuing any 8 of its programs in 2023? 9 A. Yes. the Company is discontinuing both its 10 SBDI and Commercial Energy-Savings Kits (“CSKs”) Programs 11 in 2023 on March 31, 2023 and June 30, 2023 respectively. 12 The SBDI program had a defined time-period in which the 13 program was offered based on the contractual agreement with 14 the third-party vendor completing the work. All of the 15 program savings come from lighting measures, and the 16 program was originally intended to be offered for a limited 17 time from November 2019 to December 2022 (it was extended 18 to March 2023 due to delays caused by COVID-19). The 19 program was successfully utilized by customers throughout 20 the entirety of the Company’s service area. The Company 21 does not expect a renewed contract with the existing vendor 22 would result in a cost-effective program, and as a result, 23 it is not proposing to continue the offering at this time. 24 THOMPSON, DI 25 Idaho Power Company The Company discussed its plans at the November 2022 and 1 February 2023 EEAG meetings. 2 The Company will also discontinue its CSKs in 2023. 3 Idaho Power discussed the cost-effectiveness challenges 4 facing the offering at the August 2021, November 2021, and 5 November 2022 EEAG meetings. In 2021, the RTF deactivated 6 the workbooks and zeroed out the savings for both pre-rinse 7 spray valves and advanced power strips. As a result, very 8 little differentiated the three CSK configurations for 9 restaurants, retail, and offices. Based on feedback from 10 EEAG at the November 2021 meeting, the Company began 11 offering a streamlined kit in 2022. 12 The savings for CSKs is largely based on the assumed 13 installation rates for each kit item. The 2022 evaluation 14 recommended the Company reconsider the inclusion of the 15 exit signs retrofit kits and the aerators due to low 16 install rates and the associated lower savings. The Company 17 had already reduced the number of exit sign retrofit kits 18 and aerators when designing the streamlined kit option but 19 did not remove them completely. Additionally, the 20 evaluators recommended the removal of the LED lightbulbs 21 from the kit. In June 2023, EISA lighting standards will 22 take effect, at which point certain lighting savings will 23 no longer be claimed by utility programs. The updated 24 standards have a significant impact on the CSKs, as the 25 THOMPSON, DI 26 Idaho Power Company kits offer two different kinds of LED lightbulbs. Once the 1 LED bulbs are removed, the only items remaining in the kit 2 would be one-exit sign retrofit kit, one-kitchen aerator, 3 and one-bathroom aerator which already have low 4 installation rates. Also, the savings for the faucet 5 aerators are dependent on the commercial customer having 6 electric water heat. As a result, the Company has concluded 7 the CSKs will not be cost-effective going forward, leading 8 to its decision to end the CSK offering on June 30, 2023. 9 The Company discussed its plans at the February 2023 EEAG 10 meeting. 11 4. Home Energy Reports 12 Q. What were the cost-effectiveness results for 13 the Home Energy Reports program? 14 A. As shown in Exhibit No. 2, the Home Energy 15 Report program achieved a one-year UCT of 0.71 and a TRC of 16 0.79,5 which was an improvement from the 2021 one-year UCT 17 and TRC ratios of 0.57 and 0.62 respectively. The Company 18 also calculated a life cycle cost-effectiveness for the 19 program that results in a UCT of 1.17 and a TRC of 1.29. 20 The life cycle cost-effectiveness uses savings generated 21 through 2026. 22 5 UCT and TRC ratios include costs associated with the 2022 impact evaluation. UCT would be 0.74 and TRC would be 0.81 without evaluation expenses. THOMPSON, DI 27 Idaho Power Company Q. What are the Company’s plans regarding 1 continuation of the Home Energy Reports program? 2 A. The Company believes the program will be cost 3 effective in 2023 because of the additional capacity 4 benefits that are included in the 2021 IRP avoided costs 5 where this year’s cost-effectiveness was calculated using 6 the 2019 Second Amended IRP avoided costs. Additionally, 7 the evaluation results showed the overlap percentage used 8 to calculate savings to avoid double counting with similar 9 programs savings was less than initially thought. 10 Therefore, program savings had a realization rate over one 11 hundred percent as shown later in my testimony in the 12 Evaluation Section. 13 Q. What other factors will the Company consider 14 when evaluating the cost-effectiveness of the Home Energy 15 Reports program? 16 A. As I noted, the program is cost-effective when 17 evaluated over the life cycle of the program. Typically, 18 Idaho Power evaluates cost effectiveness based on the value 19 associated with incremental savings achieved in the program 20 year and savings expected through the duration of the 21 measure life. A behavioral program, like Home Energy 22 Reports, has a “measure life” of 1-year, however, it is 23 expected that savings will continue to accrue (at a 24 degraded level) for at least 2-years after the program 25 THOMPSON, DI 28 Idaho Power Company concludes. Accordingly, Idaho Power will continue to 1 evaluate the appropriateness of reporting this program’s 2 cost-effectiveness on a life-cycle basis. 3 5. Heating and Cooling Efficiency Program 4 Q. What were the cost-effectiveness results for 5 the Heating and Cooling Efficiency program? 6 A. As shown in Exhibit No. 2, the Heating and 7 Cooling Efficiency Program achieved a UCT of 0.98 and a TRC 8 of 0.30. The program was just slightly under 1.0 from the 9 UCT prospective, which was primarily driven by the 10 evaluation costs the program absorbed associated with the 11 2021 impact and process evaluation that was completed in 12 2022. If the evaluation costs are removed, the UCT ratio 13 for the program would be 1.00. 14 Q. Does the Company anticipate seeking any 15 modifications to the program aimed at improving cost-16 effectiveness? 17 A. Yes. The Company anticipates making program 18 changes in 2023 that it expects will have a positive impact 19 on cost-effectiveness. These modifications may include 20 removal of some measures, modifications to adjust measures, 21 and incentive adjustments to measures. The Company will 22 consult with EEAG prior to making any future program 23 decisions. 24 // 25 THOMPSON, DI 29 Idaho Power Company C. Demand Response Cost-Effectiveness 1 Q. Does Idaho Power evaluate cost-effectiveness 2 for its three demand response programs? 3 A. Yes. The methodology approved in Order No. 4 353366 is used to determine the cost-effectiveness of the 5 demand response (“DR”) programs and sets the maximum 6 avoided cost value. In accordance with the approved 7 methodology, the 2022 cost-effectiveness threshold for 8 demand response is $82.91 per kW year. 9 Q. How was the $82.91 determined? 10 A. Using the approved method, the avoided cost 11 calculation for the demand response programs is as follows: 12 (Levelized Fixed Costs – Additional Benefits) 13 x Effective Load Carrying Capacity (“ELCC”) of Annual 14 Demand Response Capacity Compared to Proxy Resource 15 = $ per kW year Demand Response Avoided Costs 16 Each of the three components have been updated and 17 are: 18 1. From the 2021 IRP, the 2022 levelized fixed 19 cost value of a Simple-Cycle Combustion Turbine (“SCCT”) 20 was determined to be $131.60 per kW per year. 21 2. From the 2021 IRP, to determine the 22 6 In the Matter of Idaho Power Company’s Application for Approval to Modify its Demand Response Programs, Case No. IPC-E-21-32, Order No. 35336, p. 9-10 (Mar. 4, 2022). THOMPSON, DI 30 Idaho Power Company additional ancillary benefits provided by the SCCT compared 1 to DR, an analysis was performed where DR was replaced with 2 an equivalent SCCT and the fixed costs of the SCCT were 3 removed from the model. The result of this analysis showed 4 there were no additional benefits associated with the SCCT 5 because the cost of the fuel and SCCT plant O&M required to 6 meet the demand response demand. 7 3. The updated ELCC of approximately 312 MW of DR 8 capacity compared to a SCCT utilizing 2021 IRP assumptions 9 is 63 percent. 10 ($131.60 - $0.00) * 63% = 11 $82.91 per kW year Demand Response Avoided Cost 12 Additional details of the methodology are included 13 in Supplement 1. 14 Q. What were the total and per kW costs of the 15 Company’s demand response programs? 16 A. In 2022, the system-wide cost of operating the 17 three demand response programs was approximately $9.9 18 million ($8.7 million of incentives and $1.2 million of 19 other costs). The amounts attributable to the Idaho-only 20 jurisdiction were $9.4 million ($8.3 million of incentives 21 and $1.1 million of other costs). Table 6 below shows the 22 actual 2022 dollar per kW year costs for each program and 23 the overall demand response portfolio. Idaho Power 24 estimated that if the three programs were dispatched for 25 THOMPSON, DI 31 Idaho Power Company the full 60 hours allowed, the total costs would have been 1 approximately $12.0 million on a system-wide basis. 2 Table 6. Demand Response Program 2022 $ per kW year 3 Program $ per kW year Residential A/C Cool Credit $30.99 C&I Flex Peak $23.34 Irrigation Peak Rewards $40.97 Total Demand Response Portfolio $38.42 4 Q. Were the demand response programs cost-5 effective? 6 A. Yes. All three of the Company’s demand 7 response programs, as well as the demand response 8 portfolio, had a cost per kW less than the 2022 threshold 9 of $82.91, meaning the programs were cost-effective. 10 IV. EVALUATION ACTIVITY OVERVIEW 11 Q. What is the Company’s approach to DSM program 12 evaluation? 13 A. To ensure the ongoing cost-effectiveness of 14 programs through validation of energy savings and demand 15 reduction, and to guide the efficient management of its 16 programs, the Company utilizes evaluations conducted by 17 third-party contractors chosen through a competitive 18 bidding process. Idaho Power uses industry-standard 19 protocols, internal analyses, and regional and national 20 studies to inform its internal and external evaluation 21 efforts. The Company has generally conducted impact 22 evaluations every three years, and process evaluations for 23 THOMPSON, DI 32 Idaho Power Company relatively new programs, or when a program has significant 1 changes. Supplement 2 to the DSM 2022 Annual Report 2 provides additional information regarding how Idaho Power 3 evaluates its programs. 4 Q. How does Idaho Power utilize the evaluations 5 described above? 6 A. Idaho Power uses the results of its 7 evaluations to inform decisions related to program 8 improvement, to compare processes to industry best 9 practices, and to benchmark and validate reported program 10 savings. 11 Q. What evaluation activities took place in 2022? 12 A. In addition to the annual cost-effectiveness 13 analyses that the Company conducts for each program, Idaho 14 Power contracted with several third-party evaluators to 15 conduct impact and process evaluations in 2022. Evaluations 16 conducted by these evaluators were on the following 17 programs: 18  Impact and process evaluations on Commercial 19 Energy-Savings Kits, C&I New Construction, and 20 C&I Retrofits programs. 21  Impact evaluation on Home Energy Reports. 22 In addition to these third-party evaluations, Idaho 23 Power completed internal analyses of the Irrigation Peak 24 THOMPSON, DI 33 Idaho Power Company Rewards, Flex Peak, and A/C Cool Credit demand response 1 programs. 2 The impact evaluations that were conducted in 2022 3 analyzed reported savings from the 2021 program year. 4 Realization rates were as follows: 5  Commercial Energy-Savings Kits: 43.82 percent. 6  C&I New Construction Program: 102.5 percent. 7  C&I Retrofits Program: 96.4 percent. 8  Home Energy Reports: 109.65 percent. 9 The final reports for these evaluations, and the 10 market effects evaluations conducted by NEEA, are included 11 in Supplement 2 to the DSM 2022 Annual Report. 12 Q. Does Idaho Power have a DSM program evaluation 13 plan for 2023-2024? 14 A. Yes. The evaluation plan is included as 15 Exhibit No. 3 to my testimony and is also included in 16 Supplement 2 to the DSM 2022 Annual Report. In 2023, Idaho 17 Power’s evaluation plan includes the following third-party 18 evaluations: 19  Impact and process evaluations for Home Energy 20 Audit. 21  Impact evaluations for Residential New 22 Construction Program, Shade Tree Project, Small 23 Business Direct-Install, and Irrigation 24 Efficiency Rewards. 25 THOMPSON, DI 34 Idaho Power Company Q. Has the Company completed the Commission’s 1 directive to complete an independent Evaluation, 2 Measurement, and Verification (“EM&V”) of NEEA savings? 3 A. In August 2022, the Company contracted with an 4 independent evaluator to verify the accuracy of NEEA 5 claimed savings, as directed by the Commission in Order No. 6 35720.7 In part, the scope of the evaluation includes 7 clarifying the savings NEEA claims, verifying the 8 allocation of savings to NEEA member utilities, and 9 determining the cost-effectiveness of the savings for the 10 member utilities based on the utilities’ DSM avoided cost. 11 Idaho Power reviewed an initial draft report in 12 February 2023 and has asked the evaluator to clarify 13 several items prior to finalizing the report. The Company 14 expects to receive the final report in the coming weeks and 15 will develop a plan of action based on the final 16 recommendations and findings identified in the report. 17 Because the report was not complete prior to the 18 preparation of this case, Idaho Power anticipates filing a 19 supplemental application by no later than the end of June 20 2023, where it will file the report with the Commission in 21 7 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, p. 9 (Dec. 27, 2021). THOMPSON, DI 35 Idaho Power Company this docket. At that time, Idaho Power will identify its 1 near-term plan associated with addressing any findings. 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 as well as technical 10 experts, 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. All EEAG meetings were held virtually in 2022, and 18 the Company believes the member participation and input 19 remained strong in the virtual format. 20 The agenda during EEAG meetings is varied, but 21 typically includes: program and project updates, new energy 22 efficiency program or measure proposals, marketing methods, 23 specific measure details including cost-effectiveness, the 24 status of energy efficiency expenses, and general 25 THOMPSON, DI 36 Idaho Power Company information on DSM issues. When appropriate, the Company 1 invites experts to speak on evaluations, research, and 2 other topics of interest to enhance EEAG’s understanding. 3 Q. How did Idaho Power solicit guidance from the 4 EEAG during the 2022 program year? 5 A. In 2022, the Company held four virtual EEAG 6 meetings, and during these meetings, Idaho Power discussed 7 and requested recommendations on a broad range of DSM 8 issues. As explained in greater detail in the DSM 2022 9 Annual Report, the list below includes some of the topics 10 Idaho Power worked with the EEAG on for development, 11 design, promotion, or input: 12  Energy Efficient Lighting: The Company will 13 continue offering the Lighting Buydown Program 14 through June 30, 2023. After that date, the 15 Department of Energy OE will begin enforcing 16 federal EISA lighting standards with financial 17 penalties to those retailers that continue to 18 sell inefficient lightbulbs. This allows the 19 Company and customers to realize lighting savings 20 as long as possible. 21  Heating & Cooling Efficiency: Idaho Power began 22 offering two new measures through the program on 23 July 1, 2022 that provide a cash incentive to 24 customers who install a central A/C or a ground 25 THOMPSON, DI 37 Idaho Power Company source heat pump. The incentives apply to both 1 existing homes and new construction. 2  Welcome Kits: Idaho Power continued to contract 3 with a third-party vendor to distribute energy 4 efficiency kits to the company’s first-time 5 customers. With EEAG collaboration, the kit 6 contents were adjusted to improve cost-7 effectiveness. 8 VI. CONCLUSION 9 Q. Do you believe that the information contained 10 in this testimony and attached exhibits supports a prudence 11 determination for 2022 DSM expenses? 12 A. Yes. The DSM 2022 Annual Report details Idaho 13 Power’s DSM offerings in program specific sections. Based 14 on the DSM 2022 Annual Report, the testimony set forth 15 above, and the attached exhibits, Idaho Power respectfully 16 requests the Commission determine that $39,896,437 was 17 prudently incurred for the acquisition of demand-side 18 resources in 2022. 19 Q. Does this conclude your testimony? 20 A. Yes, it does. 21 THOMPSON, DI 38 Idaho Power Company ATTESTATION OF TESTIMONY 1 2 STATE OF IDAHO ) 3 ) ss. 4 County of Ada ) 5 6 I, Robert Z. Thompson, having been duly sworn to 7 testify truthfully, and based upon my personal knowledge, 8 state the following: 9 I am employed by Idaho Power Company as a Regulatory 10 Analyst in the Regulatory Affairs Department and am 11 competent to be a witness in this proceeding. 12 I declare under penalty of perjury of the laws of 13 the state of Idaho that the foregoing pre-filed testimony 14 and exhibits are true and correct to the best of my 15 information and belief. 16 DATED this 15th day of March 2023. 17 18 19 Robert Z. Thompson 20 21 SUBSCRIBED AND SWORN to before me this 15th day of 22 March 2023. 23 24 25 Notary Public for Idaho 26 Residing at Ada County Idaho 27 My commission expires: 09/10/2026 28 29 30 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-10 IDAHO POWER COMPANY THOMPSON, DI TESTIMONY EXHIBIT NO. 1 Expenses Rider Expenses Demand Response Program Incentives Recorded in PCA Total Expenses Energy Efficiency/Demand Response Residential A/C Cool Credit 429,722$ 375,320$ 805,042$ Easy Savings: Low-Income Energy Efficiency Education - - - Educational Distributions 1,061,898 - 1,061,898 Energy Efficient Lighting 505,430 - 505,430 Energy House Calls 36,734 - 36,734 Heating & Cooling Efficiency Program 636,597 - 636,597 Home Energy Reports 964,709 - 964,709 Home Energy Audit 184,650 - 184,650 Multifamily Energy Savings Program 32,634 - 32,634 Rebate Advantage 157,746 - 157,746 Residential New Construction 236,962 - 236,962 Shade Tree Project 128,673 - 128,673 Weatherization Solutions for Eligible Customers 198,198 - 198,198 Commercial/Industrial Custom Projects 8,753,084 - 8,753,084 New Construction 2,762,412 - 2,762,412 Retrofits 4,785,645 - 4,785,645 Commercial Energy-Saving Kits 21,604 - 21,604 FlexPeak Program 84,582 283,651 368,233 Small Business Direct Install 1,317,820 - 1,317,820 Irrigation Irrigation Efficiency 1,950,122 - 1,950,122 Irrigation Peak Rewards 569,467 7,652,357 8,221,825 Energy Efficiency/Demand Response Total 24,818,689$ 8,311,328$ 33,130,017$ Market Transformation NEEA 2,650,440 - 2,650,440 Market Transformation Total 2,650,440$ -$ 2,650,440$ Other Programs and Activities Commercial/Industrial Energy Efficiency Overhead 826,911 - 826,911 Energy Efficiency Direct Program Overhead 296,204 - 296,204 Residential Energy Efficiency Education Initiative 287,839 - 287,839 Residential Energy Efficiency Overhead 1,528,355 - 1,528,355 Other Programs and Activities Total 2,939,309$ -$ 2,939,309$ Indirect Program Expenses Energy Efficiency Accounting & Analysis 1,236,470 - 1,236,470 Energy Efficiency Advisory Group 15,575 - 15,575 Special Accounting Entries Special Accounting Entries 13,068 - 13,068 Indirect Program Expenses Total 1,265,112$ -$ 1,265,112$ Total Expenses 31,673,550$ 8,311,328$ 39,984,878$ Adjustments Prior year-end accounting adjustments: 2021 Commercial & Industrial (a)1,044 1,044 2021 Residential New Construction (b)(1,356) (1,356) 2021 SBDI: Small Business Direct Install (c)7,260 7,260 Current year-end accounting adjustments: 2022 Commercial & Industrial Overhead (d)(6,998) (6,998) 2022 Residential Energy Efficiency Education (e)1,289 1,289 2022 Residential Energy Efficiency Overhead (f)(89,680) (89,680) 2022 Prudence Filing Total 31,585,110$ 8,311,328$ 39,896,437$ (a) 2021 Oregon Rider expense that was initially charged to the Idaho Rider. The correction was made in 2022. (b) 2021 Idaho Rider expense initially charged to the Oregon Rider. The correction was made in 2022. (c) Duplicate 2021 Idaho Rider transaction. The correction was made in 2022.(d) 2022 O&M expense initially charged to the Idaho RIder. The correction was made in 2023. (e) 2022 Idaho Rider expense initially charged to O&M. The correction was made in 2023.(f) Program administration fee charged to the Idaho Rider in 2022 and refunded in 2023. Idaho Power Company 2022 Idaho DSM Expenses and Adjustments for Prudence Filing Exhibit No. 1 Case No. IPC-E-23-10 R.Z. Thompson, IPC Page 1 of 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-10 IDAHO POWER COMPANY THOMPSON, DI TESTIMONY EXHIBIT NO. 2 Program/Sector Utility Cost Test (UCT) Total Resource Cost (TRC) Participant Cost (PCT) Educational Distributions 1.31 1.62 N/A Energy Efficient Lighting 1.68 1.52 4.35 Energy House Calls1 0.70 0.77 N/A Heating & Cooling Efficiency Program 0.98 0.30 0.76 Home Energy Reports2 0.71 0.79 N/A Multifamily Energy Savings Program3 0.49 0.68 N/A Rebate Advantage 1.18 0.54 1.56 Residential New Construction 1.45 0.84 1.70 Shade Tree Project 1.02 1.21 N/A Weatherization Assistance for Qualified Customers 0.17 0.32 N/A Weatherization Solutions for Eligible Customers 0.15 0.23 N/A Residential Energy Efficiency Sector4 1.00 0.76 2.89 Commercial and Industrial Energy Efficiency Program Custom Projects 2.88 1.12 1.17 New Construction 4.25 3.64 5.41 Retrofits 2.01 1.11 1.61 Commercial Energy-Savings Kits 0.78 0.87 N/A Small Business Direct Install 0.95 1.50 N/A Commercial/Industrial Energy Efficiency Sector5 2.71 1.34 1.71 Irrigation Efficiency 2.69 2.54 2.66 Irrigation Energy Efficiency Sector6 2.69 2.54 2.66 Energy Efficiency Portfolio7 2.02 1.43 2.01 1 Program closed June 30, 2022 2 Cost-effectiveness based on 2022 savings and expenses. Cost-effectiveness ratios are also calculated for the program life-cycle and are 1.17 and 1.29 for the UCT and TRC respectively. 3 Program closed December 31, 2022 4 Residential sector cost-effectiveness excludes WAQC benefits and costs. If included, the UCT, TRC, and PCT would be 0.84, 0.67, and 2.56 respectively. 5 Commercial/Industrial Energy Efficiency Sector cost-effectiveness ratios include savings and participant costs from Green Motors Rewinds. 6 Irrigation Energy Efficiency Sector cost-effectiveness ratios include savings and participant costs from Green Motors Rewinds. 7 Portfolio cost-effectiveness excludes WAQC benefits and costs. If included, the UCT, TRC, and PCT would be 1.94 , 1.40, and 2.00 respectively. 2022 Cost-Effectiveness Summary by Program, Sector, and Portfolio 2022 Benefit/Cost Tests Exhibit No. 2 Case No. IPC-E-23-10 R.Z. Thompson, IPC Page 1 of 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-10 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 Efficient Lighting 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-23-10 R.Z. Thompson, IPC Page 1 of 1