20060915Dickman direct, exhibits.pdf

~ ~~;oo
~OUNTAIN RECEIVED
2006 SEP / 5 AM 9:
201 South Main, Suite 2300
Salt Lake City, Utah 84111
September 15 2006 il~f\JIO PUBLICUTILllll:S COMMISSION
VIA OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472 West Washington
Boise, ill 83702-5983
Attention:Jean D. Jewell
Commission Secretary
Re:Case No. PAC-06-
In the Matter of the Petition ofPacifiCorp to Determine the Appropriate Payment
Structure of Schedule 21
As stated in the Petition for Declaratory Order, (P AC-06-1 0), PacifiCorp (d.a. Rocky Mountain
Power) hereby submits for filing an original and seven copies of Direct Testimony and Exhibits in the
Matter of the Petition of PacifiCorp to Determine the Appropriate Payment Structure of Schedule 21.
Service of pleadings, exhibits, orders and other documents relating to this proceeding should be served on
the following:
Dean Brockbank
PacifiCorp
201 South Main Street, Suite 2200
Salt Lake City, Utah 84111
Dean. Brockbank~Pacifi Corp. com
Brian Dickman
PacifiCorp
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Brian. Di ckman~P acifi Corp. com
It is respectfully requested that all formal correspondence and Staff requests regarding this material be
addressed to:
Bye-mail (preferred):datareq uest~pac ificorp. com
By regular mail:Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, Oregon, 97232
By fax:[phone]
Sincerely,
D. f)+ ~1rf2.
D. Douglas Larson
1A
Vice President, Regulation
Enclosures
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 15th day of September 2006, I served a true and correct
copy of Direct Testimony and Exhibits in Docket No. P AC-06-1 0 upon the following named
parties by the method indicated below, and addressed to the following:
Brad Purdy Hand Delivered
Attorney at Law u.S. Mail
Community Action Partnership Association Overnight Mail
ofIdaho FAX
2019 N. 1 ih Street
Boise, ID 83702
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--:I)~R
Peggy
RegulatIOn Department
PETITION OF P ACIFICORP
~RECEIVED '
~:ZOO& SEP '15 AM 10: 16
IDAHO PUBLIC
: UTILITIES COMMISSION
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
PACIFICORP TQ DETERMINE THE
APPROPRIATE PAYMENT STRUCTURE
OF SCHEDULE 21
CASE NO. PAC-06-
, '..
) Direct Testimony of Brian S. Dickman
PACIFICORP
CASE NO. PAC-06-
September 2006
Please state your name, business address and present position with
PacifiCorp dba Rocky Mountain Power (the Company).
My name is Brian S. Dickman, and my business address is 201 South Main Street
Suite 2300, Salt Lake City, Utah. My current position is Manager, Idaho
Regulatory Affairs.
Qualifications
Please briefly describe your educational and professional background.
I received a Bachelor of Science Degree in Accounting from Utah State
University in 2001 and a Masters of Business Administration from the University
of Utah in 2002. Prior to joining PacifiCorp in 2003, I was employed as an analyst
for Duke Energy Trading and Marketing. At PacifiCorp, I worked as a revenue
requirement analyst before taking my current position. I have been involved in the
preparation and prosecution of numerous filings with public utility commissions
in PacifiCorp s six-state service territory.
What are your current responsibilities as Manager of Idaho Regulatory
Affairs for Rocky Mountain Power?
My current responsibilities are focused on managing the Company s regulatory
filings in Idaho. I am involved in regulatory planning and analysis and serve as
PacifiCorp s external contact for regulatory issues in Idaho.
What is the purpose of your testimony?
The purpose of my testimony is to support the Company s petition for a
declaratory order to determine the appropriate payment structure of Schedule
No. 21.
Dickman, Di - 1
PacifiCorp
Why is the Company petitioning the Commission for such an order?
PacifiCorp had previously committed to the Community Action Partnership
Association of Idaho ("CAP AI") that it would make a filing with the Commission
to address the structure of funding provided by the Company for low-income
weatherization services under Schedule No. 21.
In Commitment I13b, adopted in Order No. 29998, Case No. P AC-05-
the Company agreed to include in the direct testimony of its next general rate case
an analysis of the costs and benefits of changing its current practice of matching
50 percent of federal contributions for low-income weatherization measures to
matching at a higher percentage amount. Commitment I13b was accepted, based
on a previous stipulation in Case No. P AC-05-, Order No. 29833, which
proposed a general rate case was to be filed by the Company, no later than April
, 2006, to address an unresolved and unrelated cost of service issue.
On June 21 2006, the Company made three applications with the
Commission to adjust rates for tariff Schedule Nos. 10 400, and 401 (Case Nos.
PAC-06-, PAC-06-, and PAC-06-9). The above applications are based
on settlement agreements reached between PacifiCorp and the representatives of
customers served under the respective rate schedules. PacifiCorp contends that
pending Commission approval of the applications, a general rate case would no
longer be needed during 2006.
In an attempt to honor its commitment made in Case No. P AC-05-, the
Company sought agreement from CAP AI to address the issues raised
Commitment I13b in a filing other than a general rate case. Such an agreement
Dickman, Di - 2
PacifiCorp
was reached and, on June 19 2006, the Company and CAPAI executed the
stipulation attached hereto as Exhibit 1. As part of the stipulation PacifiCorp
agreed to make a filing before the Commission no later than September 1 , 2006.
Did the Company agree to anything else in exchange for CAP AI's agreement
to forgo a general rate case?
Yes. PacifiCorp agreed to (1) contribute $10 000 each to SouthEastern Idaho
Community Action Agency ("SEICAA") and Eastern Idaho Community Action
Partnership ("EICAP") to be used as energy assistance for the Lend-a-Hand
program during the 2006-2007 heating season, and (2) support legislation
sponsored by CAP AI during the 2007 Idaho general legislative session, that
would give the Commission authority to approve discounted rates for low-income
customers if requested by a utility. An example of such legislation is included as
an attachment to the stipulation provided in Exhibit 1. The proposed legislation
would give the Commission authority at its discretion to establish a preferential
rate for low-income customers, with program costs recovered from other utility
customers. While the Company has committed to support the proposed
legislation, it has not committed to request or establish such a bill discount
program in Idaho.
Please describe PacifiCorp s initiatives to assist low-income customers in its
service territory.
PacifiCorp has had a variety of programs in place to assist households in financial
crisis with their energy needs for many years. Its Low-Income Weatherization
program has been in effect since 1988 , with over 600 homes completed to date.
Dickman, Di - 3
PacifiCorp
The Company has also donated, and solicited donations, to the Lend-a-Hand
energy assistance program for many years through envelopes distributed in
November and February billings. PacifiCorp has matched all contributions to
Lend-a-Hand since November 2000. PacifiCorp recognizes the importance of
providing services to households with limited income.
The Low-Income Weatherization Program is a demand side management
DSM") program intended to reduce electricity consumption and monthly bills
by increasing the efficiencies oflow-income homes. PacifiCorp partners with
EICAP in Idaho Falls and SEICAA in Pocatello to provide energy efficiency
services, at no cost to income-qualifying households, through Schedule No. 21.
PacifiCorp reimburses the agencies 50 percent of the cost of installing approved
cost-effective measures. Federal funding is available to the agencies that cover the
remaining costs so that the services are provided at no charge to participating
households.
The Company s dedication to its low-income customer programs is further
illustrated by the commitments made as part of the MidAmerican Energy
Holdings Company purchase ofPacifiCorp, Case No. P AC-05-8. In
Commitment 114, PacifiCorp committed to a total contribution level from all
sources to low-income bill payment assistance in Idaho of $40 000 annually for a
five year period beginning July 1 , 2006. This ongoing contribution will
substantially increase annual contribution levels. Through Commitment 115
PacifiCorp will provide shareholder funding to study an arrearage management
project. In Commitment 141 , PacifiCorp agreed to initiate a collaborative effort to
Dickman, Di - 4
PacifiCorp
track low-income issues by identifying and collecting data pertinent to low-
income customers in the Company s Idaho service area.
Has PacifiCorp made any recent changes to Schedule No. 21?
Yes. Pursuant to Commitment I13a, Case No. PAC-05-, and as approved by
the Commission in Tariff Advice 06-03, effective August 1 , 2006, PacifiCorp will
reimburse the agencies up to 100 percent of the cost of installing approved
measures if government funds are exhausted. Also, effective August 1 2006, the
previous maximum average investment per household of$1 500 is no longer
applicable. Instead, PacifiCorp will reimburse costs as described above with no
per household maximum or average payment applied, providing the partnering
agencies more flexibility in administering the program. The Company will
continue to reimburse its partnering agencies 15 percent of the Company s rebates
on each completed home to cover their administrative costs. Total PacifiCorp
funding available continues to be subject to a cap of$150 000 annually.
Why is it important that the Low Income Weatherization Program be cost
effective?
As stated earlier, the Low-Income Weatherization Program is a DSM program
intended to reduce electricity consumption and monthly bills by increasing the
efficiencies oflow-income homes. Not only do individual customers benefit from
weatherization services, but all PacifiCorp customers in Idaho benefit from the
reduced electricity demand on PacifiCorp s system, which results in lower
incremental power supply costs. As a DSM program, funding for Schedule No. 21
is recovered from customers through the Schedule No. 191 Customer Efficiency
Dickman, Di - 5
PacifiCorp
Services Rate Adjustment. It is important that the funding burden of the program
is matched with the benefit of reduced energy usage and net power costs.
What services are provided to customers through the Low Income
Weatherization Program?
PacifiCorp provides financial assistance to its partnering agencies on approved
measures under Schedule No. 21. The agencies use a Department of Energy
approved audit to determine if shell measures, including insulation and window
replacements, are cost effective in electrically heated homes. Other measures are
available to increase electric efficiencies such as water heating measures in homes
with electric water heaters and efficient lighting and refrigerators in all homes.
Has the Company provided the Commission with an analysis of the
program s cost effectiveness?
Yes. PacifiCorp previously provided the Commission an analysis ofthe Low
Income Weatherization Program in support of proposed program revisions in
September 2005. That analysis included the results of a cost effectiveness study
based on estimated kWh savings and number of installations by measure and is
provided as Exhibit 2 of my testimony (refer to page 11-2 for cost effectiveness
calculations). At that time and under the reimbursement policy of 50 percent
matching rebates, the program narrowly passed the Utility Cost Test under the
Integrated Resource Plan (HIRP") Decrement approach for quantifying the
expected benefits.
If the reimbursement portion is increased, the Company is concerned that
fewer PacifiCorp customers will be provided weatherization services. An increase
Dickman, Di - 6
PacifiCorp
in the Company s reimbursement would mean a larger percentage of program
costs would be covered through funds collected from Schedule No. 191 and a
smaller percentage through federal tax funds. Because total program expenditures
are capped, the total cost to the utility would remain relatively unchanged, but the
benefits of the program would be reduced, due to fewer homes receiving installed
measures. Not only would fewer low-income customers in the Company s service
area receive energy efficiency services, but the benefit of reduced energy usage
and lower incremental power costs would no longer be shared by PacifiCorp
Idaho customers, making the program less cost effective. In fact, the benefits of
the energy efficiency services could be shifted to customers of another gas or
electric provider through federal funds no longer available to PacifiCorp
customers. PacifiCorp believes that the costs and the benefits of the
weatherization program should be aligned and that the cost effectiveness of the
program should be maintained.
As an example, if on average the cost of completing energy efficiency
services on a qualifying home is $3,000, the Company s reimbursement for
measures plus the 15 percent administrative cost rebate would total $1 725. At
this rate, 87 homes could be completed with PacifiCorp s annual budget of
$150 000. Reimbursement of75 percent of costs under this scenario results in the
potential completion of 58 homes, and reimbursement of 100 percent of costs
results in only 45 homes completed annually. This example illustrates that
considerably fewer PacifiCorp customers would benefit from these energy
efficiency services if the funding policy is revised.
Dickman, Di - 7
PacifiCorp
Has the Company analyzed the program s cost effectiveness since September
2005 ?
Yes. An updated cost effectiveness analysis is provided as Exhibit 3. This update
provides cost effectiveness results under three reimbursement scenarios:
PacifiCorp reimburses 50% of costs, federal funding covers 50%
PacifiCorp reimburses 75% of costs, federal funding covers 25%
PacifiCorp reimburses 100% of costs, federal funding covers 0%
As shown in Table 3 of Exhibit 3, under a 50 percent reimbursement
scenario the program continues to pass the Total Resource Cost Test and the
Utility Cost Test. Under a 75 percent reimbursement scenario , the program no
longer passes the Utility Cost Test (Table 6). And finally, under a 100 percent
reimbursement scenario, the program fails both the Total Resource Cost Test and
the Utility Cost Test (Table 9). Costs included in the calculations are those
provided by PacifiCorp only. Federal funds aren t included because Quantec
includes only local funding in their calculations which could include utility
contributions as well as any other funding from state and local entities.
Does the Company plan to monitor the program in the future?
Yes. As stated in Section III of Exhibit 2, PacifiCorp plans to have an impact
evaluation completed on program results once the Low Income Weatherization
Program revisions approved in January 2006 (Order No. 29952) have been in
place for two years. The evaluation plan is included in Section III of Exhibit 2.
The Company will review these results in 2008 to determine if program changes
should be made, including changes to the reimbursement policy. In addition, the
Company will file a report by May 1 of each year, beginning May 1 , 2007
Dickman, Di - 8
PacifiCorp
detailing its Idaho DSM activities and program cost effectiveness, including the
Low Income Weatherization Program.
What does PacifiCorp recommend with respect to the reimbursement levels
provided under Schedule No. 21?
The Company recommends no change to the current structure of Schedule No. 21
including the level of reimbursement provided in relation to available federal tax
money.
Providing weatherization services is an important component in the
Company s mix oflow-income program offerings. The current 50 percent
reimbursement policy is consistent with the low-income weatherization programs
the Company offers in its other service areas. This policy allows customers to
receive benefits from their tax dollars as well as cost-effective services from this
demand side management program. Using federal grants to cover 50 percent of
program costs provides benefits to all PacifiCorp customers in Idaho, regardless
of income or participation in the Low Income Weatherization Program, because
all customers benefit from cost effective energy efficiency investments.
PacifiCorp requests that the Commission determine the current payment structure
is appropriate based on the reasons stated above.
Does this conclude your testimony?
Yes.
Dickman, Di - 9
PacifiCorp
Case N~. PAC-06-
Exhibit No.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
P ACIFICORP
Stipulation and Agreement.
September 2006
STIPULATION AND AGREEMENT
This Stipulation and Agreement ("Stipulation ) is entered into by and between
PacifiCorp, doing business as Rocky Mountain Power ("PacifiCorp" or the "Company ) and the
Community Action Partnership Association ofIdaho ("CAP AI") (collectively referred to as the
Parties ) as of June 19, 2006.
I. INTRODUCTION
The tenns and conditions of this Stipulation are set forth herein. The Parties
agree that this Stipulation represents a fair, just and reasonable compromise of the issues raised
between the Parties.
II. BACKGROUND
In the Stipulation settling the general rate case filed by the Company in Docket
No. PAC-05-1, PacifiCorp proposed that certain cost of service issues would be addressed in a
general rate case that was anticipated to be filed no later than April 29, 2006. PacifiCorp desires
to not file a general rate case in Idaho in 2006 and anticipates making a filing to address certain
price changes on a limited basis rather than through a general rate case. If the Idaho Public
Utilities Commission (the "Commission ) approves a limited issue application, then the
Company will not have the need to file a general rate case in 2006. CAP AI is willing to support
PacifiCorp in its approach to avoid the need for a general rate case in 2006. This Stipulation sets
forth the terms and conditions under which the Parties agree to be bound with respect
PacifiCorp s approach to a limited issue filing and avoidance of the need to file a general rate
case in 2006.
In anticipation of executing this Stipulation, representatives of PacifiCorp and
CAP AI have held discussions several times pursuant to IDAP A 31.01.01.271 and engaged in
settlement discussions with a view toward resolving the issues raised herein. Based upon the
settlement discussions between the Parties, as a compromise of the Parties' positions on the
STIPULATION - Page I
subjects discussed herein, and for other consideration as set forth below, the Parties agree to the
fo llo wing terms:
Ill. TERMS OF THE STIPULATION
No later than August 31 , 2006, PacifiCorp shall make a one-time cash
contribution of shareholder money often-thousand dollars ($10 000) to each of SouthEast em
Idaho Community Action Agency ("SEICAA") and Eastern Idaho Community Action
Partnership ("EICAP") (for a total aggregate contribution of twenty-thousand dollars ($20,000))
to be used as funding assistance for the Lend-Hand program for the 2006-2007 heating season.
No later than September 1 2006, PacifiCorp shall make a formal filing before the
Commission to address those issues that PacifiCorp and the MidAmerican Energy Holdings
Company agreed to address pursuant to Commitment No. I 13(b) in Docket No. P AC-05-
PacifiCorp agrees to provide support for legislation sponsored by CAP AI during
the 2007 general Idaho legislative session that would give the Commission authority to approve
discount rates for low income customers that are requested by utilities. The Company s support
is limited to legislation allowing: 1) a utility to propose bill discounts on a strictly voluntary basis
and subject to Commission approval, and 2) the costs and lost revenue from such discounts to be
included in the utility s cost of service to be recovered in rates from other customers. An
example of such legislation is attached as Exhibit A to this Stipulation and is subject to
modification and approval by the Idaho legislature. The terms of this Stipulation shall not bind
the Company to request or agree to establish such a bill discount in Idaho.
CAP AI agrees to waive the Company s commitment to file a general rate case per
the Stipulation in Case No. PAC-05-1 and will not make any objection to the Company
applications seeking rate increases for Monsanto Corp., Nu- West Industries, Inc. and
PacifiCorp s irrigation customers. In addition, CAP AI agrees that Commitment No. I 13(b) in
STIPULA nON - Page 2
Docket No. P AC-05-8 will be addressed in the filing referenced in paragraph 5 of this
stipulation rather than in a general rate case.
The Parties agree that this Stipulation represents a compromise of the positions of
the Parties on the issues addressed herein. Other than the above referenced positions and any
teStimony filed in support ofPacifiCorp s Application and except to the extent necessary for a
Party to explain before the Commission, if necessary, its own statements and positions with
respect to the Stipulation, all negotiations relating to this Stipulation shall not be admissible as
evidence in any legal or regulatory proceedings regarding this subject matter.
No Party shall be bound, benefited or prejudiced by any position asserted in the
negotiation of this Stipulation, except to the extent expressly stated herein, nor shall this
Stipulation be construed as a waiver of the rights of any Party unless such rights are expressly
waived herein. No fmdings of fact or conclusions of law other than those stated herein shall be
deemed to be implicit in this Stipulation. This Stipulation shall be governed in accordance with
the laws of the State ofldaho.
DATED this 19th day of June, 2006.
-"~~
Mark oench
Sr. Vice President and General Counsel
PacifiCorp, dba Rocky Mountain Power
Community Action Partnersh ip Association
orId_bo
Purdy
Attorney for CAP AI
PacifiCorp
STIPULATION - Page 3
Stipulation Exhibit A
TITLE 61
PUBLIC UTILITY REGULATION
CHAPTER 5
POWERS AND DUTIES OF
PUBLIC UTILITIES COMMISSION
6l-502C. RATES - LOW-INCOME CUSTOMERS. Upon request by a water.
gas or electric public utility. the Commission mav approve rates. charges. services and/or
facilities at a discount for the utilitv s low-income residential customers. Any expenses
and lost revenues as a result ofthese bill discounts shall be included in the utilitv s cost
of service and recovered in rates to other customers. For purposes ofthis provision. the
term "low-income" is defined as follows: one hundred-fifth percent (150%) ofthe
PovertY Guidelines updated annuallv in the Federal Register by the U.S. Department of
Health and Human Services under the authority of 42 US.C. 9902(s).
No other statute contained within Title 61 shall be construed to prohibit the
Commission from approving programs as set forth herein.
Stipulation Exhibit A
TITLE 61
PUBLIC UTILITY REGULA nON
CHAPTER 3
DUTIES OF PUBLIC UTll..ITIES
61-315-DISCRIMINA TION AND PREFERENCE PROHIBITED-=
EXCEPTION. No public utility shall, as to rates, charges, service, facilities or in any
other respect, make or grant any preference or advantage to any corporation or person or
subject any corporation or person to any prejudice or disadvantage. No public utility shall
establish or maintain any unreasonable difference as to rates, charges, service, facilities
or in any other respect, either as between localities or as between classes of service. The
commission shall have the power to determine any question of fact arising under this
section.
Nothing in this provision shall act to prohibit a public utility from seeking
approval for. and operating. low-income residential bill discounts pursuant to Idaho Code
Section 61-502C.
Stipulation Exhihit A
TITLE 61
PUBLIC UTILITY REGULATION
CHAPTER 5
POWERS AND DUTIES OF
PUBLIC UTILITIES COMMISSION
61-502. DETERMINATION OF RATES. Whenever the commission, after a hearing
had upon its own motion or upon complaint, shall find that the rates, fares, tolls, rentals
charges or classifications, or any of them, demanded, observed, charged or collected by
any public utility for any service or product or commodity, or in connection therewith
including the rates or fares for excursions or commutation tickets, or that the rules
regulations, practices, or contracts or any of them, affecting such rates, fares, tolls
rentals, charges or classifications, or any ofthem, are unjust, unreasonahle
discriminatory or preferential, or in any wise in violation of any provision of law, or that
such rates, fares, tolls, rentals, charges or classifications are insufficient, the commission
shall determine the just, reasonable or sufficient rates, fares, tolls, rentals, charges
classifications, rules, regulations, practices or contracts to he thereafter observed and in
force and shall fix the same by order as hereinafter provided, and shall, under such
rules and regulations as the commission may prescribe, fix the reasonable maximum rates
to be charged for water by any public utility coming within the provisions of this act
relating to the sale of water.
Nothing in this provision shan prohibit the Commission from approving low-
income residential bill discounts pursuant to Idaho Code Section 61-502c.
Stipulation Exhibit A
TITLE 61
PUBLIC UTILITY REGULATION
CHAPTER 3
DUTIES OF PUBLIC UTILITIES
61-301. CHARGES JUST AND REASONABLE. All charges made, demanded
or received by any public utility, or by any two (2) or more public utilities, for any
product or commodity furnished or to be furnished or any service rendered or to be
rendered shall be just and reasonable. Every unjust or unreasonable charge made
demanded or received for such product or commodity or service is hereby prohibited and
declared unlawful.
Nothing in this provision shall prohibit a public utility from seeking approval for.
and operating. low-income residential bill discounts pursuant to Idaho Code Section 61-
S02C.
Case No. PAC-O6-
Exhibit No.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
ACIFICORP
Idaho Low Income Weatherization Program:
Analysis in Support otTariffRevision .
September 2006
Case No. PAC-O6-
Exhibit 2
Final
Idaho Lovv Incol11e
Weatherization Progral11:
Analysis in
Support of Tariff Revision
Prepared for:
PacifiCorp
August 2005
Quantec Offices
6229 SE Milwaukie Ave,
Portland. OR 97202
[phone]
[phone] fax
www,quantecllc,com
3445 Grant 51.
Eugene, OR 97405
[phone]
[phone] fax
1722 14th 51., Suite 230
Boulder, CO 80302
[phone]
[phone] fax
6 Ridgeland Rd
Barrington. RI 02806
[phone]
[phone] fax
Case No. PAC-O6-
Exhibit 2
Prepared by:
Brian Hedman
M. Sami Khawaja, Ph.
Quantec, LLC
212 E Main 51., Suite G
Reedsburg, WI 53959
[phone]
[phone] fax
20022 Cove Circle
Huntington Beach, CA 92646
[phone]
~_..~--
Case No. PAC-O6-
Exhibit 2
Table of Contents
Program Description ........................................................ 1-
Other Program Costs........... ................... ............ .............. ......... ............. 1-
II.Cost Effectiveness...... .......... ................................. .......... 11-
III.Eval uation Plan.......................................................... ..... 111-
Impact Evaluation.. .............
...... ...........
............................. ...... ............ 111-
Management & Reporting...................... ........ ................... ...,.... .......... 111-
Timeline ..............................................................................................111-
Appendix A. EP A Guidelines..................................................
Safe Disposal Requirements ........... .......... ..................... ...... ................ A-
Section 608 ofthe Clean Air Act of 1990............................................ A-
Low-Income Weatherization Program
Analysis in Support of Tariff Filing 08/22/05
Case No. PAC-O6-
Exhibit 2
Program Description
The current Low Income Weatherization Program has been in place for over
ten years. It is available to Utah Power customers with incomes at or below
150% of federal poverty guidelines that have installed electric heating
systems. Services are provided at no cost to participants because partnering
agencies are able to leverage Utah Power funding with federal and state funds
they receive. Utah Power offers rebates directly to the Eastern Idaho Special
Services Agency and the SouthEastern Idaho Community Action Agency
("Agencies ) that administer the Program. The average annual number of
completions during the period 2000 through 2004 is 23.
Utah Power in consultation with their two partnering non-profit agencies is
proposing revisions to the current program (Schedule 21). There are four
goals to this effort.
1. To increase Utah Power customer participation numbers.
2. To provide incentives for the installation of additional cost effective
measures.
3. To offer rebates on measures that reduce electricity consumption in
homes regardless of heating source.
4. To reimburse agencies for services up to two times per home, one
time per measure. This allows the installation of new technologies
and/or measures that previously were not considered cost effective.
The agencies provided expected participation rates for the revised program
based on their historic weatherization program experience. Estimates are
presented in Table 1.1.
Table 1.1: Expected Annual Participation Rates
Electric Base Load Program Participants
Electrically Heated Homes
170
Proposed Rebates: The following summarizes Utah Power s proposed
reimbursement available to the Agencies for the installation of approved
measures and reimbursement on administrative costs:
A rebate averaging up to $1 500 per home annually (April 1 through March
31) will be provided towards the cost of installed qualifying Major and
Supplemental Measures. The following measure categories will be eligible for
rebates:
Low-Income Weatherization Program
Analysis in Support of Tariff Filing 08/22/05
Case No. PAC-O6-
Exhibit 2
Weatherization Measures in Electrically Heated Homes
Compact Fluorescent Light Bulbs (CFLs)
Refrigerator Replacements
Water Saving Measures in Homes with Electric Hot Water Heaters
Weatherization
Major Measures with a Savings to Investment Ratio (SIR) of 1.0 or greater are
required (based on results of the State ofIdaho Weatherization Energy
Analysis) on homes with an electric heating system that is operable and
permanently installed with the capacity to heat at least 51 % of the dwelling. If
physical barriers exist that prohibit the installation of a measure, the measure
is not required. A list of qualifying measures follows. Greater R-values than
listed below may be installed as long as audit results show it to be cost
effective:
Insulation up to R-48 for ceilings with less than R-30 in place.
Floor insulation over unconditioned spaces up to R-
Insulation (not urea-formaldehyde) up to R-26 for walls without insulation
installed
Class 40 replacement windows
Supplemental Measures qualify for a rebate when they are determined to be
cost effective.
Funding is available on the following Supplemental Measures installed in
electrically heated homes:
Attic ventilation when installed with ceiling insulation
Ground cover and water pipe insulation when installed with floor
insulation
Forced air electric space heating duct testing, insulation, and sealing in
unconditioned spaces
Weather stripping and/or caulking including blower door assisted air
sealing and duct sealing
Thermal doors
Timed thermostats on centrally controlled multi-room heating/cooling
systems
Funding is available on the following supplemental measures installed in all
homes:
Low-Income Weatherization Program
Analysis in Support of Tariff Filing 08/22/05
Case No. PAC-06-
Exhibit 2
Compact fluorescent light bulbs - limit 8 Energy Star certified bulbs per
home placed in fixtures that are on 2 hours or more per day.
Refrigerators identified in the Weatherization Assistance Program
Technical Assistance Center (W APT AC) database as having mean annual
usage of900 kWh or greater may be replaced with an Energy Star model
with estimated annual consumption of 500 kWh or less. Replaced
refrigerators must be removed and recycled in accordance with EP A
guidelines.
Pipe insulation, energy-efficient showerheads, and aerators for homes with
an electric water heater.
Administrative Cost Reimbursement will be provided at 15% of Utah Power
reimbursement for Major and Supplemental Measures with a minimum of
$150 on homes with at least one major measure installed and $50 on homes
without the installation of a major measure, not to exceed the following per
building (Table 1.2).
Table 1.2: Program Administration
Dwelling Units/Building
Maximum
Payment
Minimum Payment - $150
wlmajor measure, $50 without
major measure
1 to 4 $350
5to1O $800
11to15 $1,200
16 to 20 $1,400
21 to 25 600
26 to 30 800
31+$2,100
Table 1.3 displays the assumptions used in the Program design and
conducting cost-effectiveness analysis. The U.S. DOE estimates the average
cost per home throughout the nation is $2 744 (based on the 2005 DOE
Weatherization Guideline). The average total cost of homes completed
through the Utah Power program in 2004 was $1 678. Expected savings are
based on an Oakridge National Laboratory study of weatherization programs.
These savings include the Major Measures and Supplemental Measures with
the exception of CFLs, and refrigerator replacements, which are separately
estimated below. We used a 30-year economic life for the weatherization
component of the Program. Overall weatherization measures were assumed to
have a 30-year economic life.
Low-Income Weatherization Program
Analysis in Support of Tariff Filing 08/22/05
Case No. P AC-O6-1 0
Exhibit 2
Inputs Data Source Estimate Outputs Calculation
Number of Homes Annually Agencies 70 Total Annual Savings (kWh)150,710
Total Utah Power Annual Contribution $15,750
~ational Average Total Cost S. DOE 744 to Admin Cost
Average Total Savings (kWh) *ORNL ICON-488 153 ~otal Utah Power Annual Rebate $105 000
0212003
Average Admin Cost Utah Power $225 Irotal Annual Utah Power Cost $120,750
Average Rebate per Home Utah Power $1,500 ~otal Annual Cost $192,080
Table 1.3: Weatherization Assumptions
* Includes Major Measures and Supplemental Measures except as noted below.
Compact Fluorescent Light Bulbs (CFL)
Utah Power will pay 50% of the bulb cost for up to eight ENERGY STAR
certified CFLs per home, to be placed in lighting fixtures that are in use for
two or more hours/day. Table 1.4 displays the assumptions used in the CFL
portion of the Program and in conducting cost-effectiveness analysis.
Estimates of CFL cost were derived from several other recent programs. The
average wattage of replaced bulbs, installed bulb wattage, and expected
number of hours of use were derived from PacifiCorp s evaluation of its CFL
program in Utah. The total number of CFLs to be installed is determined by
multiplying the expected participation level from Table 1.1 (170 households)
by eight. The program requirements will limit installations of CFLs to
locations with at least two hours of use per day. With a minimum of two hours
per day, we assumed an overall average use time of three hours per day across
the installed CFLs. Average energy savings as a result ofCFL replacement is
calculated as the difference in wattage between the average incandescent light
bulb (70 Watts) and the replacement CFL (20 Watts), multiplied by hours of
use per day (3 hours) and days per year (365). This product is then converted
to kWh by dividing by 1 000. The economic life of a CFL light bulb (9 years)
is determined by assuming 10 000 hours of bum time divided by the annual
hours of use (10 000/(3*365)). Agency administrative payments are limited to
15% of the Utah Power estimated contribution of$1 700.
Low-Income Weatherization Program
Analysis in Support of Tariff Filing
1-4
08/22/05
Case No. P AC-06-1 0
Exhibit 2
Table 1.4: CFL Assumptions
Inputs Data Estimate Outputs CalculationSource
No. CFLs per Home Program Total Annual No. CFLs 360
Average Cost per CFL Various $2.Avg. CFL Savings (kWh)54.
Average Existing Wattage Utah Eva!.Total Annual Savings (kWh)460
Average New Wattage Utah Eval Total Utah Power Annual $255
Contribution to Admin Cost
Total Utah Power Rebate $1,700
Average No Hours per Day Utah Eva!.Total Annual Utah Power Cost 955
Total Annual Program Cost $3,655
Rebate as % of CFL Cost Utah Power 50%Economic Life (Years)
Refrigerators
Refrigerators can be replaced where existing models are listed in the
W APTAC database as having annual mean usage of900 kWh or greater.
Replacement refrigerators will be ENERGY STAR-certified models with
annual consumption levels of 500 kWh or less. Replaced refrigerators will be
removed and recycled according to Environmental Protection Agency (EP
guidelines. 1
Table 1.5 displays the assumptions used in the refrigerator replacement portion
of the Program and in conducting cost-effectiveness analysis. The
consumption data are based on metered units from a similar program run in
Utah during 2003. We assumed a 19-year economic life for a new refrigerator.
Utah Power s total annual cost is set at 50% of the cost of replaced
refrigerators. As mentioned above, the administration fee is limited to 15% of
Utah Power contribution.
Existing refrigerators consuming over 900 kWh annually can be cost-effectively
replaced. For detailed information concerning EPA Guidelines, please refer to Appendix
Low-Income Weatherization Program
Analysis in Support of Tariff Filing 08/22/05
Case No. PAC-06-
Exhibit 2
Table 1.5: Refrigerators Assumption
Inputs Data Estimate Outputs EstimateSource
Number of Refrigerators Tested Agencies 153 No. Refrigerators Replaced
Proportion of Tested Replaced Utah pgm 44%Avg Annual Savings (kWh)510
Avg Cost per New Unit Agencies $600 Irotal Annual Savings (kWh)101 653
~vg Cost Per Tested Unit Agencies trotal Annual Equip Cost $40 800
~vg Consumption of Existing Unit (kWh)Utah Pgm 944 otal Annual Testing Cost
~vg Consumption of New Unit (kWh)Utah Pgm 434 otal Utah Power Contribution $3,060
0 Admin Cost
Rebate as % of Unit Cost Utah Power 50%otal Utah Power Rebate $20,400
conomic Life (Years)otal Annual Utah Power Cost $23,460
Irotal Annual Cost $43,860
. The WAPTAC database will be used in lieu oftesting
Hot Water Measures
Table 1.6 displays the assumptions used in the design of the hot water portion
ofthe Program, and in conducting cost-effectiveness analysis. The segment of
clients likely to have gas heat with electric hot water was estimated at 10%
(approximately 17 households). The program will install low-flow
showerheads, kitchen and bathroom aerators and pipe wraps for these
customers. Energy savings estimates were obtained from the evaluation of the
2002 California Low Income Energy Efficiency program . As in the
components above, Utah Power s contribution to administration cost will be
limited to 15% of the total rebate amount for measures installed.
2 Energy use data for over 41 000 refrigerators, retrigerator-freezers, and treezers has been
compiled by D&R International, Ltd., for DOE trom the Directory of Certified
Refrigerators, Freezers, and Refrigerator Freezers published by the California Energy
Commission (CEC) trom 1979 to 1992. See http://www.waptac.org/sp.asp?id=70
Impact Evaluation of the 2002 California Low Income Energy Efficiency Program West
Hill Energy and Computing, Inc. October 11 2004
Low-Income Weatherization Program
Analysis in Support of Tariff Filing 08/22/05
Case No. PAC-06-
Exhibit 2
Table 1.6: Hot Water Measure Assumptions
Inputs Data Source Estimate Outputs Calculation
Percent of Participants with gas heat and Agencies 10% Annual Participants
electric hot water
Showerhead savings (kWh)2002 CA LlEE 230 Total Annual Savings (kWh)749
Aerators (kWh)2002 CA LlEE otal Annual Utah Power $97
Contribution to Admin Cost
Pipe Wrap 2004 CA DEER otal Annual Utah Power $323
Rebate
lt1easure Cost Iowa LI Pgm $38 otal Annual Utah Power Cost $420
,ebate as % of Unit Cost Utah Power 50%Total Annual Program Cost $ 743
Economic Life (Years)
Other Program Costs
Table I. 7 displays the estimated Utah Power program management and
administrative costs as well as the estimated cost of a third party evaluator.
Table 1.8 summarizes overall expected annual Program costs and savings.
Table 1.7: Other Program Costs
Utah Power Labor
valuation
$10,000
$10,000
*Includes program management, rebate processing and inspections.
** Evaluation costs are estimated to be $20 000, with evaluations occurring every two years.
Table 1.8: Combined Annual Program Costs and Savings
Utah Power Total KWh
Weatherization $120,750 $192,080 150,710
CFLs 955 $3,655 460
Refrigerators $23,460 $43,860 102 680
Hot Water $420 $743 749
Other $20,000 $20,000
Total $166,585 $260,338 334,599
Low-Income Weatherization Program
Analysis in Support of Tariff Filing 08/22/05
Case No. PAC-O6-
Exhibit 2
Cost Effectiveness
Cost-effectiveness tests were run for the Program as designed using the
following Standard tests:
Total Resource Cost (TRC): This test examines the program benefits and
costs from the Company and its customers' combined perspective. On the
benefit side, it includes reduction in supply costs. On the cost side, it
includes costs incurred by both Utah Power and the other funders. We also
include a TRC test that includes a 10% conservation adder (PTRC).
Utah Power (Utility Cost Test; UCT): From the Company s perspective
the benefits are in the form of avoided supply and line-loss costs. The
costs include administration, evaluation, and rebate costs associated with
the program.
Ratepayers: All ratepayers (participants and non-participants) may
experience an increase in rates to recover lost revenue. This test (entitled
Ratepayer Impact Measure, RIM) includes all the Company s program
costs as well as first-year lost revenues. On the benefits side, it includes all
avoided energy and capacity costs.
The participant test is included but no benefit cost ratio is calculated due to
zero participant costs. Cost-effectiveness assumptions are summarized in
Table II. 1.
Table 11.1: Program Cost-Effectiveness Assumptions
Item Assumptions
Energy Savings Savings by measure
Retail Rate Average 2004 Residential Retail Rate
Discount Rate The US Treasury Long Term Composite bond rate of 4.60% posted on August 10,
2005 was used for the TRC. Utah Power s estimated cost of capital of 7.18% was
used for the other tests.
Line Loss 10.23% from the 2004 Utah Power line 1055 study
Measure Life Each measure has its own expected life.
Avoided Costs Primary source is the 2005 Integrated Resource Plan 65% load factor decrement.
We also used the June 31, 2005, official Company forward price curve as a
secondary data source.
Measure Cost Each measure has its own expected cost.
Incentive Amount Varies by element. See previous sections.
Results
The cost effectiveness of the Idaho Low Income Weatherization Program was
calculated using Quantec s Demand Impact and Cost Effectiveness (DICE)
Low-Income Weatherization Program
Analysis in Support of Tariff Filing
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Case No. PAC-O6-
Exhibit 2
model. The model distributes the estimated annual kWh savings across the
year based on hourly residential load shapes for each measure. Each of these
hourly savings values is multiplied by the associated hourly avoided-costs
from PacifiCorp s market price forecasts. These products are all discounted
back to the present. This approach accurately captures the hourly differences
in the value of a kWh during the year.
Cost effectiveness was calculated based on avoided costs estimated through
the August 2005 IRP decrement approach using a 65% load factor and on the
Company s official market price forecasts base case for Palo-Verde Hub
dated June 31 , 2005.
The proposed Program design passes the utility cost effectiveness tests from
the UCT perspective under both the forward price curve scenario and under
the IRP decrement . The program passes the TRC under the forward price
curve scenario and narrowly fails the TRC under the IRP 65% load factor
decrement scenario. Neither scenario reflects the additional benefits
associated with low-income weatherization to both the utility and the
participant. These additional benefits include decreases in collections and
arrearages, improved comfort, improved health, fewer work and school
absences, less frequent moves and more money to spend on other necessities.
Table 11.2: IRP Decrement (65% Load FaCtor)
All Measures AC: 65% Load Factor
Levelized $/kWh Costs Benefits Net Benefit Ratio
Total Resource Cost Test 0552 $260,338 $243,705 $16,633 936
(PTRC) + Conservation Adder
Total Resource Cost Test (TRC)0552 $260 338 $221,550 $38,788 851
No Adder
Utility Cost Test (UCT)0353 $166 585 $177 086 $10,501 063
Rate Impact Test (RIM)$325,395 $177 086 $148,309 544
Participant Cost Test (PCT)$189,322 $189,322 n/a
Lifecycle Revenue Impacts ($/kWh $0.0000039059
All Measures AC: Base Case
Levelized $/kWh Costs Benefits Net Benefit Ratio
Total Resource Cost Test 0552 $260,338 $349,279 $88,941 342
(PTRC) + Conservation Adder
Total Resource Cost Test (TRC)0552 $260,338 $317 527 $57,189 220
No Adder
Table 11.3: June 31, 2005 Base Case Forward Prices
4 The Utility Cost Test is often considered the appropriate test for low-income weatherization
programs since non-utility costs are federally funded.
Low-Income Weatherization Program
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Case No. PAC-O6-
Exhibit 2
Utility Cost Test (UCT)0353 $166 585 $245,576 $78,991 474
Rate Impact Test (RIM)$325,395 $245 576 $79,819 755
Participant Cost Test (PCT)$189,322 $189,322 n/a
Lifecycle Revenue Impacts ($/kWh $0.0000021021
Low-Income Weatherization Program
Analysis in Support of Tariff Filing
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Case No. PAC-O6-
Exhibit 2
III.Evaluation Plan
The goals of the evaluation are to:
1. Estimate actual energy (kWh) and demand (kW) savings
2. Analyze Program cost effectiveness
The Company has committed to a process and impact evaluation at the end of
the second program year.
Impact Evaluation
The impact evaluation will include collecting key data, selecting a random
sample of participants, estimating energy savings, and assessing cost
effectiveness. The impact evaluation approach will vary by type of measure
installed.
Weatherization/Shell
This is not expected to be a large part ofthe Program. Energy impacts will
assessed through billing analysis, and demand impacts will be assessed using
residential load shapes from secondary sources.
Compact Fluorescent Light bulbs
The analysis will begin with the Program database for the number of CFLs
installed, initial and final wattage, and hours of use whenever available.
Program database will be used to verify number of CFLs installed, hours of
use, whether the replaced bulbs were in working condition, and number of
bulbs removed. It is recommended that this effort be enhanced with a survey
of about 100 participants to verify the information in the program database.
However, this may also lead to increasing overhead costs to prohibitive levels
given the size of this program.
The data collected will be used to estimate the energy (kWh) savings. The
evaluator will then use secondary lighting hourly use data to estimate the
Program demand (kW) impacts. Actual savings will be verified with billing
analysis as described below.
Refrigerators
The evaluator will utilize the metered data collected from the replaced
refrigerators for estimating the energy and demand impacts. If conducted
Low-Income Weatherization Program
Analysis in Support of Tariff Filing
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Case No. PAC-O6-
Exhibit 2
customer surveys will be used to verify the presence of new refrigerators.
Actual savings will be verified with billing analysis as described below.
Savings Analysis
Traditionally, "quasi experimental" research design is the most appropriate
method for conducting impact evaluations of demand-side management
programs. The approach consists of comparing the change in pre- to post-
program energy consumption between the participants and a "comparison
group of customers who, though eligible, did not participate. By accounting
for non-pro gram-related factors that can affect energy use from the pre- to the
post-program periods, the approach can provide estimates of "net" program
impacts.
Census Billing Analysis. A billing analysis will be conducted on all
participants that pass the screen for sufficient billing history. These data will
be compared to a group oflow-income customers that did not participate in
the Program.
Princeton Scorekeeping MethodS (PRISM), an established weather-
normalizing tool, will be used to calculate each individual customer s annual
energy consumption under average weather conditions. Utilizing historical
weather data and billing records, PRISM adjusts for the impact of weather
variations upon usage during both the pre and post periods. The result is
weather-normalized and annualized data that allow for the meaningful
interpretation of the true impact of the Program upon energy consumption.
The evaluator will use difference-of-means tests to analyze disparities
between the participants and non-participant billing data.
The evaluator will also analyze the differences between pre and post PRISM-
produced set temperatures for assessment of take back.
Savings by Agency and Measure Type. Utilizing the estimates from the
billing analysis and detailed statistical models, the evaluator will stratify
savings by agency and measure. This will provide valuable insight into the
Program s operation and overall economic performance. This analysis will
provide descriptive statistics on the frequency of installations for specific
measures and groups of interrelated measures. It will also provide estimates
savings for groups of measures and can be compared to deemed savings to
assess possible discrepancies. Additionally, these data will be stratified by
In order to produce the most accurate results, PRISM models each participant's pre and
post periods separately, generating an individual normalized consumption record for each
period. Employing several stages, PRISM utilizes an iterative process to determine the
appropriate model (Heating-Only or Heating & Cooling) that best fits the data based on
the usage characteristics exhibited by the participant.
Low-Income Weatherization Program
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Case No. PAC-06-
Exhibit 2
agency to provide additional insight into best practices and areas of
improvement.
Quantify Non-Energy Benefits. If surveys are conducted, the evaluator will
estimate non-energy benefits, where applicable.
Conduct Cost-Effectiveness Analysis
The evaluator will conduct a cost-effectiveness analysis using traditional
tools. The analysis will include the standard perspectives (i., utility,
ratepayers, participants, and society) and, as much as possible, non-energy and
environmental impacts (e., carbon dioxide reduction and reduction in forced
mobility). The benefits to Utah Power include the reduction in energy
consumption and the Company s avoided costs.
Program costs include administration, delivery, and actual payments made to
participants. Benefit/cost ratios will be computed from the various
perspectives.
Management & Reporting
The evaluator will deliver a draft and final report of findings. The final report
will reflect all the comments made by stakeholders. It will provide a complete
description of the relevant evaluation objectives and how they were achieved.
The final report is to contain the following elements:
Executive Summary
Description of the Program, its goals, and objectives
Statement of the evaluation goals and objectives
Discussion of methodologies
Implementation procedures and assumptions for each method
Data-collection procedures and methods
Sample design and sample attrition
Results and their interpretation (demonstrated clearly with charts and
tables)
Timeline
A process evaluation of the Program should be conducted approximately one
year after Program implementation to assure that the Program is operating as
planned. An impact evaluation should be conducted two years after Program
implementation to allow sufficient post-implementation billing data to be
available.
Low-Income Weatherization Program
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Case No. PAC-O6-
Exhibit 2
Appendix A. EP A Guidelines
Safe Disposal Requirements
Under Environmental Protection Agency (EP A) rules, equipment that is
typically dismantled on site before disposal (e., retail food refrigeration
central residential air conditioning, chillers, and industrial process
refrigeration) has to have the refrigerant recovered in accordance with EPA'
requirements for servicing. However, equipment that typically enters the
waste stream with the charge intact (e., motor vehicle air conditioners
household refrigerators and freezers, and room air conditioners) is subject to
special safe disposal requirements.
Under these requirements, the final person in the disposal chain (e., a scrap
metal recycler or landfill owner) is responsible for ensuring that refrigerant is
recovered from equipment before the final disposal of the equipment.
However, persons "upstream" can remove the refrigerant and provide
documentation of its removal to the final person if this is more cost effective.
If the final person in the disposal chain (e., a scrap metal recycler or landfill
owner) accepts appliances that no longer hold a refrigerant charge, that person
is responsible for maintaining a signed statement from whom the appliance is
being accepted. The signed statement must include the name and address of
the person who recovered the refrigerant, the date that the refrigerant was
recovered, or a copy of a contract stating that the refrigerant will be removed
prior to delivery. EPA does not mandate a sticker as a form of verification that
the refrigerant has been removed prior to disposal of the appliance. Such
stickers do not relieve the final disposer of their responsibility to recover any
remaining refrigerant in the appliance, unless the sticker contains a signed
statement that includes the name and address of the person who recovered the
refrigerant and the date on which was recovered.
The equipment used to recover refrigerant from appliances prior to their final
disposal must meet the same performance standards as equipment used prior
to servicing, but it does not need to be tested by a laboratory. This means that
self-built equipment is allowed as long as it meets the performance
requirements. For MV ACs and MV AC-1ike appliances, the performance
requirement is 102 rom of mercury vacuum; for small appliances, the recovery
equipment performance requirements are 90% efficiency when the appliance
compressor is operational and 80% efficiency when the appliance compressor
is not operational.
Technician certification is not required for individuals removing refrigerant
from appliances in the waste stream.
Low-Income Weatherization Program
Analysis in Support of Tariff Filing 08/22105
Case No. PAC-O6-
Exhibit 2
Section 608 of the Clean Air Act of 1990
SEC. 608. NATIONAL RECYCLING AND EMISSION REDUCTION
PROGRAM.
(a) In General -
(1) The Administrator shall, by not later than January 1, 1992, promulgate
regulations establishing standards and requirements regarding the use
and disposal of class I substances during the service, repair, or disposal
of appliances and industrial process refrigeration. Such standards and
requirements shall become effective not later than July 1 , 1992.
(2) The Administrator shall, within 4 years after the enactment ofthe
Clean Air Act Amendments of 1990, promulgate regulations
establishing standards and requirements regarding use and disposal
class I and II substances not covered by paragraph (1), including the
use and disposal of class II substances during service, repair, or
disposal of appliances and industrial process refrigeration. Such
standards and requirements shall become effective not later than 12
months after promulgation of the regulations.
(3) The regulations under this subsection shall include requirements that-
(A) reduce the use and emission of such substances to the lowest
achievable level, and
(B) maximize the recapture and recycling of such substances.
Such regulations may include requirements to use alternative substances
(including substances which are not class I or class II substances) or to
minimize use of class I or class II substances, or to promote the use of safe
alternatives pursuant to section 612 or any combination of the foregoing.
(b) Safe Disposal.- The regulations under subsection (a) shall establish
standards and requirements for the safe disposal of class I and II substances.
Such regulations shall include each of the following-
(1) Requirements that class I or class II substances contained in bulk in
appliances, machines or other goods shall be removed from each such
appliance, machine or other good prior to the disposal of such items or
their delivery for recycling.
(2) Requirements that any appliance, machine or other good containing a
class I or class II substance in bulk shall not be manufactured, sold, or
distributed in interstate commerce or offered for sale or distribution in
interstate commerce unless it is equipped with a servicing aperture or
Low-Income Weatherization Program
Analysis in Support of Tariff Filing 08/22/05
Case No. PAC-O6-
Exhibit 2
an equally effective design feature which will facilitate the recapture
of such substance during service and repair or disposal of such item.
(3) Requirements that any product in which a class I or class II substance
is incorporated so as to constitute an inherent element of such product
shall be disposed of in manner that reduces, to the maximum extent
practicable, the release of such substance into the environment. If the
Administrator determines that the application of this paragraph to any
product would result in producing only insignificant environmental
benefits, the Administrator shall include in such regulations an
exception for such product.
( c) Prohibitions. -
(1) Effective July 1 , 1992, it shall be unlawful for any person, in the
course of maintaining, servicing, repairing, or disposing of an
appliance or industrial process refrigeration, to knowingly vent or
otherwise knowingly release or dispose of any class lor class II
substance used as a refrigerant in such appliance (or industrial process
refrigeration) in a manner which permits such substance to enter the
environment. De minimis releases associated with good faith attempts
to recapture and recycle or safely dispose of any such substance shall
not be subject to the prohibition set forth in the preceding sentence.
(2) Effective 5 years after the enactment of the Clean Air Act
Amendments of 1990, paragraph (1) shall also apply to the venting,
release, or disposal of any substitute substance for a class I or class II
substance by any person maintaining, servicing, repairing, or disposing
of an appliance or industrial process refrigeration which contains and
uses as a refrigerant any such substance, unless the Administrator
determines that venting, releasing, or disposing of such substance does
not pose a threat to the environment. For purposes of this paragraph
the term "appliance" includes any device which contains and uses as a
refrigerant a substitute substance and which is used for household or
commercial purposes, including any air conditioner, refrigerator
chiller, or freezer.
Low-Income Weatherization Program
Analysis in Support of Tariff Filing 08/22/05
, "
Case No. PAC-06-
Exhibit No.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
ACIFICORP
Quantec Memo Regarding Idaho Low Income
Program Cost Effectiveness Analysis
September 2006
.. ~
quantec!
,,"'....,..,...---..,..,-....,-..,--,-....,...-
lIdj,!!!g ti,e bar in aI/all"""
Date:August 30, 2006
To:Becky Eberle
From:Brian Hedman
Re:Idaho Low Income Program Cost Effectiveness Analysis
The tables below present the updated assumptions and cost effectiveness findings for the Idaho
Low Income Program under three scenarios: 50% cost sharing, 75% cost sharing and 100%
funding. The cost sharing is applied regardless of the total cost of the weatherization or
measures. The base assumptions were presented in Quantec document dated August 22, 2005
entitled "Idaho Low Income Weatherization Program: Analysis in Support of Tariff Revision
Cost Effectiveness Assumptions
The discount rates in Table 1 were obtained from two sources. For the TRC, the discount rate
used is the US Treasury Long Term Composite bond rate posted on August 28, 2006. The
discount rate for the Utility Cost, Rate Impact and Participant Cost tests is the system average
used in the 2004 IRP. Rocky Mountain Power also provided the values for line losses and the
residential retail energy rate.
Table 1: Common Inputs
Parameter Value
Discount Rate for TRC test 97%
Discount Rate for UTC, RIM, PART tests 18%
Line Loss 10.25%
Residential Energy Rate ($/kWh)$0.0404
Case No. PAC-06-
Exhbit No.
Scenario 1: 50% cost sharing
Table 2: Program Costs and Savings
(50% Cost Sharing)
Program Savings
Category Participants Cost (*(kWh)
Weatherization $103,243 150,710
CFLs (number of households)175 $2,013 76,650
Refrigerators $24 150 105,700
Hot Water $445 146
Other Administrative Costs $20,000
Total $149,850 340,206
) Rocky Mountain Power costs only. Exogenous costs (federal) are not included in cost effectiveness determination.
Table 3: 2004 IRP 65% Load Factor Decrement, August 2005 Update
All Measures AC: IRP 65% Load Factor
Decrement
Levelized BenefitfCost
$fkWh Costs Benefits Net Benefits Ratio
Total Resource Cost Test (PTRC)0313 $149 850 $303,348 $153,498
+ Conservation Adder
Total Resource Cost Test (TRC)0313 $149,850 $275,771 $125,921
No Adder
Utility Cost Test (UCT)0361 $149,850 $216,872 $67,022
Rate Impact Test (RIM)$279,506 $216,872 ($62,634)
Participant Cost Test (PCT)$191,806 $191 806 nfa
Lifecycle Revenue Impacts ($fkWh)$0.0000011827
Table 4: June 2006 Forward Price Curve: Base Case
All Measures AC: 06/30/06 Base Case PV
Levelized Benefit/Cost
$/kWh Costs Benefits Net Benefits Ratio
Total Resource Cost Test (PTRC)0313 $149,850 $342,992 $193,142
+ Conservation Adder
Total Resource Cost Test (TRC)0313 $149,850 $311 811 $161,961
No Adder
Utility Cost Test (UCT)0361 $149,850 $250,806 $100,956
Rate Impact Test (RIM)$279 506 $250,806 ($28,700)
Participant Cost Test (PCT)$191,806 $191,806 nfa
Lifecycle Revenue Impacts ($fkWh)$0.0000005419
Page 2
Case No. PAC-06-
Exhbit No.
Scenario 2: 75% cost sharing
Table 5: Program Costs and Savings
(75% Cost Sharing)
Program Savings
Category Participants Cost (*(kWh)
Weatherization $102,488 103,344
CFLs (number of households)120 070 52,560
Refrigerators $24 840 72,480
Hot Water $410 764
Other Administrative Costs $20,000
Total $149,809 233,148
) Rocky Mountain Power costs only. Exogenous costs (federal) are not included in cost effectiveness determination.
Table 6: 2004 IRP 65% Load Factor Decrement, August 2005 Update
All Measures AC: IRP 65% Load Factor
Decrement
Levelized Benefit/Cost
$/kWh Costs Benefits Net Benefits Ratio
Total Resource Cost Test (PTRC)0456 $149,809 $207,954 $58,146 1.39
+ Conservation Adder
Total Resource Cost Test (TRC)0456 $149,809 $189,050 $39,241
No Adder
Utility Cost Test (UCT)0527 $149,809 $148.666 ($1,142)
Rate Impact Test (RIM)$235,530 $148,666 ($86 863)
Participant Cost Test (PCT)$131,481 $131,481 nfa
Lifecycle Revenue Impacts ($fkWh)$0.0000016402
Table 7: June 2006 Forward Price Curve: Base Case
All Measures AC: 06130106 Base Case PV
Levelized Benefit/Cost
$/kWh Costs Benefits Net Benefits Ratio
Total Resource Cost Test (PTRC)0456 $149,809 $235,124 $85,316 1.57
+ Conservation Adder
Total Resource Cost Test (TRC)0456 $149 809 $213,749 $63,941 1.43
No Adder
Utility Cost Test (UCT)0527 $149,809 $171,923 $22 114
Rate Impact Test (RIM)$235,530 $171,923 ($63,607)
Participant Cost Test (PCT)$131,481 $131,481 nfa
Lifecycle Revenue Impacts ($/kWh)$0.0000012011
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Case No. PAC-06-
Exhbit No.
Scenario 3: 100% Payment
Table 8: Program Costs and Savings
(100% Payment)
Program Savings
Category Participants Cost (*(kWh)
Weatherization $101 528 79,661
CFLs (number of households)116 40,296
Refrigerators $25,530 55,870
Hot Water $437 970
Other Administrative Costs $20,000
Tota/$149,611 179,797
) Rocky Mountain Power costs only. Exogenous costs (federal) are not included in cost effectiveness determination.
All Measures AC: IRP 65% Load Factor
Decrement
Levelized BenefitJCost
$/kWh Costs Benefits Net Benefits Ratio
Total Resource Cost Test (PTRe)0590 $149,611 $160,334 $10,723
+ Conservation Adder
Total Resource Cost Test (TRe)0590 $149,611 $145,758 ($3,853)
No Adder
Utility Cost Test (VCT)0683 $149,611 $114 626 ($34,985)
Rate Impact Test(RIM)$213,423 $114 626 ($98,797)
Participant Cost Test (PCT)$101 375 $101 375 n/a
Lifecycle Revenue Impacts ($/kWh)$0.0000018656
Table 9: 2004 IRP 65% Load Factor Decrement, August 2005 Update
Table 10: June 2006 Forward Price Curve: Base Case
All Measures AC: 06/30/06 Base Case PV
Levelized Benefit/Cost
$/kWh Costs Benefits Net Benefits Ratio
Total Resource Cost Test (PTRC)0590 $149,611 $181,284 $31,673
+ Conservation Adder
Total Resource Cost Test (TRe)0590 $149,611 $164,804 $15,193
No Adder
Utility Cost Test (VCT)0683 $149 611 $132,559 ($17,052)
Rate Impact Test(RIM)$213,423 $132 559 ($80,864)
Participant Cost Test (PCT)$101,375 $101,375 n/a
Lifecycle Revenue Impacts ($/kWh)$0.0000015269
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