20010531Order No 28743.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF PACIFICORP DBA UTAH POWER & LIGHT COMPANY FOR APPROVAL OF ITS PROPOSED SCHEDULE 2020-20/20 CUSTOMER CHALLENGE PROGRAM RIDER.
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CASE NO. PAC-E-01-7

ORDER NO. 28743
On April 17, 2001, PacifiCorp submitted Tariff Advice No. 01-06 for Schedule 2020 – 20/20 Customer Challenge Program Rider (Program). The proposed tariff provided that for monthly bills during the months of June, July, August and September 2001, customers who reduce their monthly kilowatt hours (kWh) usage by 20% over their usage for the corresponding month a year ago will receive a 20% reduction on their bill for that month during this year. The Company requested an effective date of May 1, 2001. On May 2, 2001, the Commission issued Order No. 28724 finding that PacifiCorp’s Tariff should be treated as an Application under the Commission’s Rules of Procedure because it proposed more than minor changes to existing schedules. Order No. 28724 at 1; see also IDAPA 31.01.01.052 and .134. In this Order the Commission also suspended the Application until June 1, 2001 and ordered that it be processed by Modified Procedure under the Commission’s Rules with a shortened comment period of fourteen (14) days. Order No. 28724 at 3.
In an effort to accurately analyze this Program, Staff filed a production request on April 24, 2001 that sought a response from the Company by May 4, 2001. PacifiCorp was unable to respond to Staff’s requests until May 9 at which time Staff was notified that the Company would be modifying its Application. Accordingly, Staff chose not to comment on this matter until the Company made its subsequent filing. However, the Northwest Energy Coalition, the Land and Water Fund of the Rockies and Idaho Rivers United filed joint written comments on this Application on May 18, 2001.
On May 18, 2001, the Company filed a modification to its Application providing that customers who reduce their monthly energy usage by 10% to 20% over the previous years usage for the months of July, August and September would receive a 10% reduction on their remaining bill for those months this year. Customers saving 20% or more (kWh) over their previous year’s monthly energy usage for June, July, August and September would receive a 20% reduction on their remaining bill for those months in 2001.
PacifiCorp will make this Program available to all residential customers on Schedules 1 and 36 that have not changed addresses or service since September 2000. The Company requests that the Program be in operation only for the months of June through September 2001, and will be available at no direct cost to customers. The 20% credit program is ready to be implemented on June 1 and the Company proposes to start it on that date as originally planned. Due to programming constraints with the Company’s billing system, PacifiCorp states that the added 10% credit program cannot be implemented until July 1, 2001.
The Company proposes that all program costs and savings be booked to the Company’s FERC Account 557, Other Power Supply Expenses.
PUBLIC COMMENTS
The Commission received joint comments from the Northwest Energy Coalition (NWEC), the Land and Water Fund of the Rockies, and Idaho Rivers United. The comments presented were submitted before the Company modified its proposal. The comments generally did not support the 20/20 Customer Challenge Program as originally proposed. NWEC suggested a more equitable program that would be similar to Avista’s 5 cent buy-back program for electricity savings over 5% of previous year’s usage.
NWEC was further concerned over the needs of low-income customers who move more often than the average residential customer and therefore are more likely to be ineligible for the Program. NWEC also states that the 20% reduction requirement will be difficult to achieve, with those failing to reach it still helping PacifiCorp’s bottom line by conserving, but ineligible for the 20% bill reduction.
NWEC is also concerned that the Program time frame is too short for customers to install real energy efficiency measures that reduce consumption over a longer period of time. Furthermore, customers who engaged in conservation and energy efficiency measures prior to June 2000 will not likely be able to benefit from the Program while still conserving more energy than the average customer conserves.
NWEC recommended a stepped approach that matches savings with usage reductions at 5%, 10%, and 20% or at least reduce the proposed threshold to 10% to allow more customers to benefit. NWEC also recommended a number of reporting requirements so that the Commission can monitor this Program including:
Number of Customers achieving the threshold by class by month,
The Percentage of total customers achieving the threshold by class,
The total volumes and dollars credited to customers by month,
The total volumes saved from previous year’s bills by month and by customer class, and
The amount of revenues the Company gained through the Program.
STAFF COMMENTS
Staff believes the Program, as modified, has value to Idaho consumers. Staff believes many of PacifiCorp’s Idaho customers will be able to participate and should be able to achieve at least the minimum 10% savings over last year’s bills. Furthermore, all customers will benefit from the Program regardless of whether they directly participate because current wholesale prices to purchase power to meet loads are higher than retail rates. The Program may also assist PacifiCorp in meeting its peak summer demand in Idaho as well as other jurisdictions. The Company is proposing the new Customer Challenge system wide to achieve economies of scale and consistency in billing and operations. Staff believes the modified Customer Challenge Program is an improvement over the previous submittal and will encourage conservation. Therefore, Staff recommended its approval.
Staff also recommended that the Commission allow the Company to book all Program costs and savings to the Company’s FERC Account 557, Other Power Supply Expenses. Staff recommended that the Commission require the Company to include subaccounts in FERC Account 557, Other Power Supply Expenses, to specifically track the Program costs and savings.
Finally, Staff recommended that the Commission require the Company to provide a summary program performance report following the completion of the Program.
COMMISSION FINDINGS
Conservation programs have become increasingly valuable because of the unprecedented prices for power on the wholesale market. Thus, the Commission is pleased that PacifiCorp has offered this Program in the state of Idaho. Conservation gained through this Program will benefit both the Company and its residential customers by reducing the Company’s reliance on power purchases from the wholesale market to serve its system load. Initially the Commission, Staff and NWEC questioned whether this Program as originally proposed could be successful. Specifically, the concern was that PacifiCorp’s residential customers would have difficulties in reaching the required 20% saving mark. Accordingly, the suggestion was made to the Company that it reduce this to a lower level so that greater participation would be encouraged and gained.
PacifiCorp’s May 18, 2001 filing addresses to some degree the concerns noted above by modifying its Program so that its residential customers on Schedules 1 and 36 will also receive a 10% bill reduction if they achieve a 10% to 20% reduction in their energy usage from the same billing month in the previous year for the months of July, August and September 2001. The Commission appreciates the fact that PacifiCorp has expanded the reach of its Program. However, we are still concerned that most customers will find it difficult to achieve the 10% reduction required in the Program. Notwithstanding our reservations, the Commission finds that the Company’s modified Program is reasonable and thus approves it. The Commission is also concerned about the short duration of this Program for the 10% savings level. Despite its short term, the Commission finds that the Program has the potential to be valuable to the Company and its customers during the summer months that it will be in operation. Accordingly, the Commission approves the Program’s duration but encourages PacifiCorp to use the data it gains from its operation to develop long-term conservation programs that will benefit both its customers and itself.
The Commission also finds that the Company shall book all Program costs and savings to the Company’s FERC Account 557, Other Power Supply Expenses, and include subaccounts in FERC Account 557 to specifically track the Program costs and savings.
The Commission also requires that the Company file a summary program performance report with the Commission within sixty (60) days after September 30, 2001. This report, at a minimum, shall contain the following information: the number of customers in Idaho achieving the
Program’s 10% and 20% energy reduction marks by month, and the percentage of its total customers in Idaho achieving the 10% and 20% reduction marks by month.

O R D E R
IT IS HEREBY ORDERED that PacifiCorp’s Application requesting approval of its Customer Challenge Program Rider, as amended by its May 18, 2001 filing, is approved. Accordingly, the Company shall implement this Program as of June 1, 2001 for the 20% bill reduction for customers using 20% less energy from the previous year for the months of June, July, August and September 2001 and July 1, 2001 for the 10% bill reduction for customers using 10% to 20% less energy from the previous year for the months of July, August and September 2001.
IT IS FURTHER ORDERED that this Program shall terminate on September 30, 2001.
IT IS FURTHER ORDERED that PacifiCorp shall book all Program costs and savings to the Company’s FERC Account 557, Other Power Supply Expenses.
IT IS FURTHER ORDERED that the Company shall establish subaccounts to specifically track Program costs and savings in FERC Account 557.
IT IS FURTHER ORDERED that the Company shall provide a summary program performance report, including the information described above, to the Commission within sixty (60) days of September 30, 2001 in order to track actual program performance in a timely manner.
THIS IS A FINAL ORDER. Any person interested in this Order or in interlocutory Orders previously issued in this Case No. PAC-E-01-7 may petition for reconsideration within twenty-one (21) days of the service date of this Order with regard to any matter decided in this Order or in interlocutory Orders previously issued in this Case No. PAC-E-01-7. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61626.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of May 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

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See letter dated May 15, 2001 filed in Case No. PAC-E-01-7.
Id.

ORDER NO. 28743 -6-

Office of the Secretary
Service Date
May 31, 2001