20240315APPLICATION.pdf

MEGAN GOICOECHEA ALLEN
Corporate Counsel
[e-mail]

March 15, 2024

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

Re: Case No. IPC-E-24-11
In the Matter of the Application of Idaho Power Company for a Determination
of 2023 Demand-Side Management Expenses as Prudently Incurred

Dear Commission Secretary:

Attached for electronic filing is Idaho Power Company’s Application and the Direct
Testimony of Robert Z. Thompson in support of the Application in the above-entitled
matter. Due to the voluminous nature of the attachments to the Application, the Company
is posting the PDF files to the secure FTP site. The login information will be provided
separately.

A Word version of the testimony will also be sent in a separate email for the
convenience of the Reporter.

In addition, seven (7) copies of the Application, Direct Testimony, and the DSM 2023
Annual Report will be hand delivered to the Commission.

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

Sincerely,

Megan Goicoechea Allen
MGA:cd
Enclosures
RECEIVED
Friday, March 15, 2024 1:29PM
IDAHO PUBLIC
UTILITIES COMMISSION
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 2023 DEMAND-SIDE
MANAGEMENT EXPENSES AS
PRUDENTLY INCURRED.
)
)
)
)
)
)

CASE NO. IPC-E-24-11

APPLICATION

Idaho Power Company (“Idaho Power” or “Company”), in accordance with
Commission Rule of Procedure1 52, et. seq., and Order No. 29419,2 submits its Demand-
Side Management 2023 Annual Report (“DSM 2023 Annual Report”) and makes
Application to the Idaho Public Utilities Commission (“Commission”) for an order
designating Idaho Power’s expenditures of $30,323,272 in Idaho Energy Efficiency Rider
(“Rider”) funds and $8,455,107 of demand response program incentives funded through
base rates and tracked annually through the Power Cost Adjustment (“PCA”) mechanism,

1 Hereinafter cited as RP.
2 In the Matter of the Petition Filed by Idaho Power Company for Modification to Two Prior Orders to
Permit Consolidation of the Company’s Conservation and Demand Side Management (DSM) Reporting
Requirement into a Single Consolidated Report, Case No. IPC-E-03-19, Order No. 29419, p. 2 (Jan. 14,
2004).
APPLICATION - 2
for a total of $38,778,378, as prudently incurred demand-side management (“DSM”)
expenses.
In support of this Application, Idaho Power represents as follows:
I. INTRODUCTION

1. It is well-established that the Commission considers the promotion of cost-
effective energy efficiency and demand-side management an integral part of least-cost
electric service:3 “The Commission has consistently stated that cost-effective DSM
programs are in the public interest and has admonished electric utilities operating in the
state of Idaho to develop and implement DSM programs in order to promote energy
efficiency.”4
2. Like the Commission, Idaho Power considers energy efficiency and
demand response to be an important and necessary part of a balanced approach to
meeting system energy needs and endeavors to provide customers with programs and
knowledge through its DSM programs to help them use electricity wisely. The Company’s
energy efficiency portfolio includes a broad array of programs available to its customers
in energy efficiency, demand response, and education.
3. Energy efficiency programs are available to all customer segments in Idaho
Power’s service area and focus on reducing energy use by identifying homes, buildings,
equipment, or components for which an energy-efficient design, replacement, or repair
can achieve energy savings. Some energy efficiency programs include behavioral

3 In the Matter of the Investigation of Financial Disincentives to Investment in Energy Efficiency by Idaho
Power Company, Case No. IPC-E-04-15, Order No. 30267, p. 13 (Mar. 12, 2007).
4 In the Matter of the Idaho Power Company’s Application for an Order Designating the Energy Efficiency
Rider Funds Spent by the Company During 2008-2009 as Prudently Incurred Expenses, Case No. IPC-E-
10-09, Order No. 32113, p. 8 (Nov. 16, 2010).

APPLICATION - 3
components. Savings from energy efficiency programs are measured on a kilowatt-hour
(“kWh”) or megawatt-hour (“MWh”) basis.
4. The goal of Idaho Power’s demand response programs is to minimize or
delay the need to build new supply-side peaking resources, and the demand response
portfolio currently has a capacity of more than 8 percent of its all-time system peak load
available to respond to a system peak load event during the summer. In 2023, the
Company utilized all or portions of its three demand response programs: A/C Cool Credit,
Flex Peak Program, and Irrigation Peak Rewards. Demand response is measured both
by the actual demand reduction in megawatts (“MW”) achieved during events, as well as
the potential demand reduction if all programs were used at full capacity.
5. The Company strives to ensure it offers DSM programs that offer value to
its customers and increase the DSM savings available to it. In 2023, Idaho Power
achieved 15.9 average megawatts (“aMW”) of incremental energy efficiency savings,
including estimated energy efficiency market transformation savings through Northwest
Energy Efficiency Alliance (“NEEA”) initiatives, which represents enough energy to power
approximately 12,200 average homes in Idaho Power’s service area for one year. Direct
Testimony of Robert Z. Thompson (“Thompson Testimony”) at 7-9. From its three
demand response programs, Idaho Power achieved a total non-coincident demand
reduction of 240 MW from an available capacity of 316 MW during the 2023 program
season. Thompson Testimony at 11-12.
6. In addition to the education customers get through participation in specific
incentive programs for energy efficiency, Idaho Power educates customers on energy
efficiency in many other ways including presentations, trainings, workshops, trade shows,
APPLICATION - 4
and through its distribution of an annual Energy Efficiency Guide that includes information
on energy efficiency equipment and ways to use energy wisely. DSM 2023 Annual Report
at 14-15. The Company sponsors significant customer educational outreach and
awareness activities, promotes codes and standards, and focuses marketing efforts on
saving energy—none of which are quantified or claimed as part of Idaho Power’s annual
DSM savings, but are likely to result in energy savings that accrue to Idaho Power’s
electrical system over time. Thompson Testimony at 10-11.
7. As the Commission previously noted, “DSM benefits depend on constantly
evaluating opportunities and identifying ways to improve available programs.”5 To this
end, Idaho Power devotes significant resources to maintain and improve its energy
efficiency and demand response programs and actively works to both improve the cost
effectiveness of existing DSM programs and explore the addition of new DSM offerings
for customers.
8. Idaho Power strives to ensure that DSM funds collected from customers are
utilized to support the pursuit of cost-effective energy efficiency and demand response
programs, with the limited exception of certain policy considerations. This goal is achieved
by applying a multi-step process. Prior to the actual implementation of energy efficiency
or demand response programs, Idaho Power performs a preliminary cost-effectiveness
analysis to assess whether a potential program design or measure will be cost-effective
from the perspective of customers as well as the Company. Idaho Power measures cost-
effectiveness under three tests: the Utility Cost Test (“UCT”), the Total Resource Cost
(“TRC”) test, and the Participant Cost Test (“PCT”). A review of each test allows for an

5 In the Matter of the Application of Idaho Power Company for a Determination of 2020 Demand-Side
Management Expenses as Prudently Incurred, Case No. IPC-E-21-04, Order No. 35270, p. 8 (Dec. 27,
2021).
APPLICATION - 5
economic assessment of the life-cycle costs and benefits of a DSM investment from the
perspective of DSM program participants, Idaho Power, and non-participating customers.
Thompson Testimony at 17-19.
II. CONTENTS OF THE DSM 2023 ANNUAL REPORT
9. Idaho Power’s DSM 2023 Annual Report, which is included as Attachment
1 to this Application, is submitted in compliance with the reporting requirement set forth
in Commission Order No. 29419 in Case No. IPC-E-03-19. The Company’s actions, as
detailed in the DSM 2023 Annual Report, demonstrate the conscientious work Idaho
Power undertook to expend funds wisely to further DSM activities over the course of the
last year.
10. The DSM 2023 Annual Report consists of the main document (with
appendices) and two supplements. The main report provides details for each of the
Company’s DSM programs including program descriptions, 2023 performance results,
program activities, expenditures and cost-effectiveness ratios, marketing efforts,
customer satisfaction, and evaluation results if applicable. Supplement 1: Cost-
Effectiveness (“Supplement 1”) to the DSM 2023 Annual Report provides detailed cost-
effectiveness data for each program and includes a table that reports expenses by
funding source and cost category. Supplement 2: Evaluation (“Supplement 2”) to the
DSM 2023 Annual Report contains copies of Idaho Power’s program evaluations,
customer surveys, reports, and research conducted in 2023. Each of these evaluations
reflects Idaho Power’s continued commitment to review and evaluate program value and
cost effectiveness on an ongoing basis.

APPLICATION - 6
III. 2023 DSM PROGRAM PERFORMANCE
11. In 2023, Idaho Power offered its customers a wide range of energy
efficiency and demand response programs, participated in market transformation efforts
through NEEA, and offered several educational initiatives and other activities. Table 1 on
page 6 of the DSM 2023 Annual Report contains a list of Idaho Power’s DSM programs
by sector, operational type, and location. The table illustrates the broad suite of programs
that Idaho Power offers to its customers in energy efficiency and demand response.
12. As explained in more detail in the Thompson Testimony filed
contemporaneously with this Application, Idaho Power’s annual energy savings combined
with NEEA estimated annual energy savings resulted in an incremental energy efficiency
savings of 15.9 average megawatt-hours (“aMW”), exceeding the economic technical
achievable potential included in Idaho Power’s 2023 Integrated Resource Plan (“IRP”) of
12.2 aMW. Thompson Testimony at 8-9.
13. On a system-wide basis, Idaho Power achieved 139,683 megawatt-hours
of incremental annual energy efficiency savings in 2023, which includes 115,769 MWh
from Idaho Power’s energy efficiency programs and an estimated 23,914 MWh6 of energy
efficiency market transformation savings through NEEA initiatives. Thompson Testimony
at 7-8. The 2023 savings results consisted of 24,394 MWh from the residential sector,
86,813 MWh from the commercial/industrial sector, and 4,563 MWh from the irrigation
sector. DSM 2023 Annual Report at 11, Table 2.
14. In the 2023 program year, several of the Company’s DSM programs

6 Because Idaho Power will not receive final 2023 savings from NEEA until the second quarter
2024, the NEEA-attributable savings is an estimate provided to Idaho Power by NEEA.

APPLICATION - 7
outperformed their savings and participation as compared to the 2022 program year.
These programs include Educational Distributions, Commercial & Industrial (“C&I”)
Energy Efficiency Program Custom Projects, C&I Flex Peak Program, and Irrigation Peak
Rewards. Thompson Testimony at 9-10. The Company was also able to launch a new
Multifamily Energy Savings Program that offers incentives to help reduce the costs of
installing energy efficiency features in existing and new construction multifamily buildings
with five or more units per building. Additionally, the Company engages in significant
educational awareness activities and marketing efforts that are likely to result in energy
savings experienced by customers but are not quantified or claimed as part of Idaho
Power’s annual savings.
15. Overall energy efficiency portfolio savings in 2023 decreased from 2022 by
29,883 MWh year-over-year. The primary drivers of the decrease in annual incremental
savings were the C&I Energy Efficiency Program New Construction and Retrofits options,
which drove about 83 percent of the decrease in annual incremental savings compared
to 2022. The projects within C&I Energy Efficiency Program vary greatly in size, scale,
and duration, and this can cause changes in overall portfolio savings performance
annually. The Home Energy Reports (“HER”) program also experienced a decrease in
savings due to the anticipated program attrition associated with the conclusion of the first
3-year treatment period. Thompson Testimony at 9-10. Appendix 3 on Page 185 of the
DSM 2023 Annual Report contains a complete list of program and sector-level savings.
16. Regardless of the decrease in savings, Idaho Power’s energy efficiency
portfolio remained cost-effective as more fully explained below, resulting in a 2.06
benefit/cost ratio when evaluated from a UCT perspective, a 1.51 benefit/cost ratio when
evaluated from a TRC test perspective, and 1.89 benefit/cost ratio when evaluated from
APPLICATION - 8
a PCT perspective. Thompson Testimony at 6-7.
17. In addition, Idaho Power successfully operated all three of its demand
response programs in 2023, and the demand response portfolio currently has a capacity
of more than 8 percent of its all-time system peak load available to respond to a system
peak load event during the summer. Idaho Power achieved a total non-coincident
demand reduction of 240 MW from a total available capacity of 316 MW during the 2023
program season. Thompson Testimony at 11-12. The amount of capacity available for
demand response varies based on weather, time of year, and how programs are used or
managed. The maximum capacity (316 MW) is calculated using the total enrolled MW
from participants with an expected maximum realization rate for those participants. DSM
2023 Annual Report at 10-11.
IV. 2023 DSM EXPENSES AND ADJUSTMENTS
18. Funding for the Idaho DSM programs in 2023 came from several sources.
The Idaho Rider funds are collected directly from customers on their monthly bills at 3.1
percent of their base rate revenues in 2023. Additionally, the Idaho demand response
program incentives are included in base rates and tracked annually through the PCA.
Energy efficiency and demand response-related expenses not funded through the Rider
are included in Idaho Power’s ongoing operations and maintenance (“O&M”) costs.
19. In 2023, the Company’s total system-wide expenditures on DSM-related
activities totaled $41,979,473. DSM 2023 Annual Report at 12-13, Tables 3 and 4. This
figure includes expenditures for Oregon and other O&M expenses that are not before the
Commission as part of this prudence request. In this filing, Idaho Power seeks a
determination that a total of $38,778,378 were prudently incurred in 2023 ($30,323,272
in Rider expenses and $8,455,107 in demand response program incentives). Thompson
APPLICATION - 9
Testimony at 13. A summary of the 2023 program expenditures by program, customer
sector, and funding source for which the Company is seeking a prudence determination
is provided as Exhibit No. 1 to the Thompson Testimony.
20. The Company strives to ensure DSM expenses are well-documented and
that controls are in place and adjusted as needed to regulate proper payment of incentives
and other costs. As more fully explained in the Thompson Testimony and summarized
below, prior to this filing, the Company’s internal review process identified three prior-year
and two current-year accounting adjustments that were necessary to accurately account
for the total 2023 DSM expenses for purposes of the prudence determination in this case.
Thompson Testimony at 13-17. Idaho Power has included each of these adjustments in
Exhibit No. 1 to the Thompson Testimony.
21. Prior Year Adjustments. The first prior-year adjustment of $6,998 was
associated with the Commercial & Industrial Energy Efficiency program where an
expense should have been charged to O&M instead of the Idaho Rider in 2022; this
amount must be added back to avoid understating the 2023 prudence request. The
second prior-year adjustment of $1,289 is associated with Idaho activity for the
Residential Energy Efficiency Education Initiative that was incorrectly charged to O&M
instead of the Idaho Energy Efficiency Rider in 2022. The correction adding the expense
to the Idaho Rider was made in 2023 and that amount therefore needs to be subtracted
from the 2023 prudence request because it was already deemed prudent by the
Commission in the 2022 request. The final adjustment of $89,680 was associated with a
program administration fee the Company paid in 2022 that was refunded in 2023 due to
services not being rendered. The correction to reduce the Idaho Rider expenses was
APPLICATION - 10
made in 2023, and therefore, that amount needs to be added back to avoid understating
the 2023 prudence request. Thompson Testimony at 14-15.
22. Current Year Adjustments. Two current year-end accounting adjustments
to the Rider for 2023 were identified through Idaho Power’s year-end review of expenses
and the corrections were made after the 2023 year-end financial books were closed. The
first current-year adjustment results in a reduction of $1,771, which was related to
expenses associated with the Irrigation Peak Rewards Program that should have been
charged to O&M, rather than the Idaho Rider. The second adjustment results in an
addition of $194 associated with the Residential New Construction program where the
expense was initially charged to the Oregon Rider instead of the Idaho Rider. Thompson
Testimony at 15.
23. DSM Labor Expense. In addition to these accounting adjustments, the
Company adjusted the amount of DSM labor expenses included in its request in
compliance with Commission Order No. 34874.7 When issuing its determination on the
appropriate level of DSM-labor funded through the Rider in the 2019 DSM prudence case,
the Commission stated that Idaho Power “shall apply the 2 percent cap to actual average
wages per [full-time employee] going forward. The baseline for the 2 percent cap shall
be the prior year’s actual average wages per [full-time employee].”8 Idaho Power’s Rider-
funded DSM employee labor expense in 2023 totaled $3,625,290. Thompson Testimony
at 16. The Company is requesting $3,449,976 in 2023 DSM labor expense be collected
through the Rider. This amount is appropriately recovered through the Rider as it is the

7 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).
8 Id.
APPLICATION - 11
Commission’s authorized labor cost cap; the actual 2023 DSM labor expense was
$175,313 over the cap as detailed in Table 2 of the Thompson Testimony.
V. DSM PROGRAM COST-EFFECTIVENESS
24. The DSM 2023 Annual Report and accompanying Thompson Testimony
demonstrate the Company’s diligent efforts to ensure that DSM funds collected from
customers are utilized to support the pursuit of cost-effective energy efficiency and
demand response programs and substantiate that Idaho Power’s DSM expenses were
prudently incurred. As reflected therein, Idaho Power reviews the cost-effectiveness
results for each program and measure on an annual basis to determine whether a
program should continue or be modified so it remains cost-effective on an ongoing basis.
Energy Efficiency Programs
25. To calculate cost-effectiveness, the DSM 2023 Annual Report uses
benefit/cost methodologies used in previous DSM annual reports, including the UCT, the
TRC test, and the PCT. A review of each test allows for an economic assessment of the
lifecycle costs and benefits of a DSM investment from the perspective of Idaho Power,
DSM program participants, and non-participating customers. Idaho Power calculates
cost-effectiveness from the TRC test, UCT, and PCT perspectives at the program level
except for those programs with no customer costs, in which case the PCT is not
applicable. When an existing program or measure is not cost-effective, Idaho Power
works with its Energy Efficiency Advisory Group (“EEAG”) to obtain input before making
its determination on continuing, discontinuing, or modifying an offering. Thompson
Testimony at 17-18. Cost-effective test methodologies are described in more detail in
Supplement 1 to the DSM 2023 Annual Report.
APPLICATION - 12
26. While the Commission continues to assess the prudence of DSM
investments under “the totality of the circumstances,” the Commission also believes that
public utilities may “emphasize the UCT—and that test’s focus on Company-controlled
benefits and costs—to argue whether programs were cost-effective.”9 Thompson
Testimony at 18-19. Thus, the Company continues to conduct all three benefit/cost
methodologies while using the UCT perspective as its primary test for evaluating program
cost-effectiveness.
27. Supplement 1 to the DSM 2023 Annual Report includes detailed results of
the cost-effectiveness tests by program and by measure, showing that the overall DSM
portfolio achieved benefit/cost ratios greater than 1.0 from the perspective of all three
cost-effectiveness tests in 2023. On a portfolio basis, Idaho Power’s energy efficiency
programs were found to be cost-effective, passing the UCT, TRC test, and PCT with ratios
of 2.06, 1.51, and 1.89, respectively. Thompson Testimony at 20, Table 4 and Exhibit 2.
28. On an individual program basis, 9 of the 15 energy efficiency programs
offered in Idaho for which the Company calculates cost-effectiveness had benefit/cost
ratios greater than 1.0 under the UCT. Thompson Testimony at 22. The results of these
calculations, along with measure assumption details and source determination, can be
found in Supplement 1 to the DSM 2023 Annual Report. Idaho Power’s cost-effectiveness
test results for 2023 energy efficiency programs determined that the following programs
were not cost-effective under the UCT in 2023:

9 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).
APPLICATION - 13
Income Qualified Weatherization
29. Two programs that scored less than 1.0 under the UCT were the Company’s
Weatherization Assistance for Qualified Customers (“WAQC”) and Weatherization
Solutions for Eligible Customers (“Solutions”). While these programs are not cost-
effective under the UCT, Idaho Power will continue to offer these programs to its limited-
income customers unless the Commission directs otherwise. Thompson Testimony at
23-24. Idaho Power will also continue to work with EEAG and weatherization managers
to identify opportunities that might improve the cost-effectiveness of these programs.
Rebate Advantage
30. The Rebate Advantage program achieved a UCT ratio of 0.98 and a TRC
of 0.93. The program was just slightly under 1.0 from the UCT perspective, which was
primarily driven by the updated avoided cost from the 2021 IRP used to evaluate the cost
effectiveness for the 2023 program year. Thompson Testimony at 24-25. The Rebate
Advantage program was found to be cost effective in 2022, with a UCT ratio of 1.18,
based on the avoided costs from the then-most recently acknowledged IRP, which was
the 2019 Second Amended IRP at the time 2022 DSM program planning occurred.
31. Notably, the savings assumptions between the 2022 and 2023 program
years remained the same for the Rebate Advantage program. However, because the life
cycle of program measures range between 43 and 45 years, the decrease in the avoided
costs in later years in the 2021 IRP, as compared to the 2019 Second Amended IRP,
contributed to the decline of the program’s cost-effectiveness from 2022 to 2023.
32. The Company anticipates that in 2024 the Rebate Advantage program will
be cost-effective because the 2023 IRP avoided costs were used for 2024 program
APPLICATION - 14
planning and will therefore be used to evaluate 2024 program cost-effectiveness. The
2023 IRP avoided costs are greater than the 2021 IRP avoided costs through 2034 along
with an increased capacity benefit, which is why the Company is optimistic the Rebate
Advantage program will be cost-effective going forward. Notwithstanding, this program is
also due for impact and process evaluations in 2024. Exhibit 3 to the Thomson Testimony.
Shade Tree Project
33. The Shade Tree Project achieved a UCT ratio of 0.31 and a TRC ratio of
0.42 for the 2023 program year as compared to UCT and TRC ratio of 1.02 and 1.21 for
2022, respectively. Thompson Testimony at 26-28. This was driven by the results of the
impact evaluation conducted in 2023 that significantly reduced the savings from how the
Company had previously calculated them. The Company received the preliminary Shade
Tree Project evaluation report on January 12, 2024, which identified two main drivers
contributing to a decrease in overall savings:
(1) An increased tree mortality rate -- the mortality rate of trees in certain parts of the
state turned out to be higher than previously expected, where trees did not survive
after being planted at a customer’s residence or were not planted at all; and
(2) The introduction of a heating penalty – the evaluator recommended applying a
heating penalty for electrically heated homes to account for the additional heating
that would be needed in the cooler months due to the shade provided by the tree.
Savings were reduced by subtracting the additional energy needed to heat the
home in the cooler months from the energy benefits of the tree’s shade in the
warmer months. Adding this penalty greatly reduced total savings on electrically
heated homes.
APPLICATION - 15
34. The Company briefly discussed the preliminary evaluation results with its
EEAG at the February 8, 2024, EEAG meeting, and has engaged in discussions with the
third-party evaluator that conducted the 2023 impact evaluation to assess possible cost-
effectiveness improvement recommendations. Prior to receiving the evaluation results
and based on the information available to the Company at the time, Idaho Power
contractually committed to the 2024 Shade Tree Project events. The vendor requires a
commitment at least a year in advance in order to plant and grow the trees to the preferred
size for the events. However, the recently obtained information will better inform decisions
about the future of the program. The Company plans to share this information at the May
EEAG meeting and consult with EEAG on potential next steps.
Heating & Cooling Efficiency Program (“H&CE”)
35. In 2023, the H&CE program achieved a UCT of 0.94 and a TRC of 0.40 as
compared to UCT and TRC ratio of 0.98 and 0.30 for 2022, respectively. The main driver
of the difference was the decrease in overall savings, which was largely due to updates
in savings assumptions by the Regional Technical Forum (“RTF”). The RTF is the source
of most measure savings assumptions within the program and many of those
assumptions changed between 2022 and 2023. Thompson Testimony at 28-29.
36. The savings decrease was primarily driven by two measures within the
program: smart thermostats and air-source heat pumps. Smart thermostats made up 45
percent of the total H&CE program participation and 14 percent of the total savings. With
the new RTF assumptions, the per unit savings declined by between 24 percent and 65
percent compared to the savings in 2022. Air-source heat pumps made up 17 percent of
the total program participation and 44 percent of the total savings. On average, the per
APPLICATION - 16
unit savings for air-source heat pump measures declined by nearly 12 percent as
compared to 2022.
37. Additionally, ductless heat pumps made up 16 percent of the program
participation and 19 percent of the total savings. While the savings assumptions did not
change year over year, the average savings per unit declined by nearly 16 percent due
to the heating zone locations of the participants in 2023 versus 2022. Savings vary by
heating zones and the participants in 2023 were in heating zones with lower savings.
38. In November 2023, Idaho Power modified the H&CE program based on the
updated RTF savings and the new DSM avoided costs from the most recently filed 2023
IRP. With these changes, the program is expected to be cost-effective in 2024 and
beyond.
Small Business Direct Install (“SBDI”)
39. The Company discontinued its SBDI program on March 31, 2023. This was
anticipated given that the program was always intended to be offered for a limited time.
Because all program savings came from lighting measures, the Company had previously
decided not to continue the program past the contract end-date with the vendor as it had
determined that it would not be cost-effective in the longer term. However, after
consultation with its EEAG during 2022 and into 2023, the Company decided to conduct
an impact evaluation on the program in 2023 to potentially inform a new small business
targeted energy efficiency program in the future. The short three-month operation of the
program in 2023 before it was discontinued, along with the costs associated with
evaluation, were the primary reasons the SBDI program was not cost-effective in the 2023
program year. The Company is exploring the potential to launch an updated and cost-
APPLICATION - 17
effective small business lighting energy efficiency program in the near future based on
the 2023 SBDI evaluation findings and further discussions and feedback from the EEAG
in 2024. Thompson Testimony at 30-31.
Demand Response
40. For 2023, Idaho Power determined the cost-effectiveness of its demand
response programs based on the methodology approved in Order No. 35336 and more
fully described in the Thompson Testimony at 31-33. In 2023, the system-wide cost of
operating the three demand response programs was approximately $11.3 million ($8.9
million of incentives and $2.4 million of other costs). The amounts attributable to the
Idaho-only jurisdiction were $10.7 million ($8.4 million of incentives and $2.3 million of
other costs). All three of the Company’s demand response programs, as well as the
demand response portfolio, had a cost per kW less than the 2023 threshold of $84.57
and were therefore cost-effective. Thompson Testimony at 33.
VI. DSM PROGRAM EVALUATIONS
41. In addition to the annual cost-effectiveness analysis the Company conducts
for each program, the results of which are included in Supplement 1 to the DSM 2023
Annual Report and summarized above, Idaho Power solicits and contracts with
independent third-party consultants to provide program evaluations. The Company
generally conducts impact evaluations every three years, and process evaluations for
relatively new programs, or when a program has significant changes. Supplement 2 to
the DSM 2023 Annual Report provides additional information regarding how Idaho Power
evaluates its programs and the final reports for the evaluations conducted in 2023.
42. Idaho Power uses the results of these evaluations to improve its DSM
programs, compare Company processes to industry best practices, and benchmark
APPLICATION - 18
reported program savings. In 2023, Idaho Power contracted with several third-party
evaluators to conduct impact and process evaluations as follows:
 Impact and process evaluations on the Home Energy Audit Program
 Impact evaluations on Residential New Construction Program, Shade Tree
Project, Small Business Direct Install, and the Irrigation Efficiency Rewards
Program.
43. In addition to these third-party evaluations, Idaho Power completed internal
analyses of the Irrigation Peak Rewards, C&I Flex Peak, and A/C Cool Credit demand
response programs. Thompson Testimony at 35-36
VII. STAKEHOLDER INPUT

44. Idaho Power relies on input from EEAG to provide a customer and public
interest review of energy efficiency and demand response programs and expenses.
EEAG provides input on enhancing existing DSM programs and on implementing new
DSM programs. Currently, EEAG consists of members representing a cross-section of
customers from the residential, industrial, commercial, and irrigation sectors, as well as
representatives for low-income individuals, environmental organizations, state agencies,
public utility commissions, and Idaho Power. Thompson Testimony at 37-38.
45. The EEAG generally meets quarterly in-person at Idaho Power’s corporate
offices and through webinars as needed. In 2023, three of the EEAG meetings were held
in person with a virtual option and one meeting was held virtually. The Company believes
that member participation and input remained strong during the 2023 EEAG meetings.
Specifically, Idaho Power worked with EEAG on developing, designing, and promoting
several projects and solicited guidance on a broad range of issues including the new
APPLICATION - 19
Multifamily Energy Efficiency program, the C&I Flex Peak incentive structure, and the
avoided costs used in DSM program planning and cost-effectiveness. Thompson
Testimony at 38-40.
VIII. MODIFIED PROCEDURE
46. Idaho Power believes that a technical hearing is not necessary to consider
the issues presented herein and respectfully requests that this Application be processed
under Modified Procedure, i.e., by written submissions rather than by hearing. RP 201,
et. seq. Idaho Power has, however, contemporaneously filed the Thompson Testimony
in support of this Application. The Company stands ready to present testimony supporting
this Application in a technical hearing if the Commission determines such a hearing is
required.
IX. COMMUNICATIONS AND SERVICE OF PLEADINGS
47. Communications and service of pleadings with reference to this Application
should be sent to the following:
Megan Goicoechea Allen
Lisa D. Nordstrom
Regulatory Dockets
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
[e-mail]
[e-mail]

Connie Aschenbrenner
Zack Thompson
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
[e-mail]

APPLICATION - 20
X. CONCLUSION

48. As described in greater detail above, in 2023, the Company believes that it
successfully achieved prudent cost-effective energy efficiency savings and provided
useful and cost-effective demand response programs as determined by the IRP planning
process. As such, Idaho Power respectfully requests that the Commission issue an order:
(1) authorizing that this matter be processed by Modified Procedure and (2) designating
Idaho Power’s 2023 DSM expenses of $38,778,378 as prudently incurred.

Respectfully submitted this 15th day of March 2024.

MEGAN GOICOECHEA ALLEN
Attorney for Idaho Power Company