20100615Reply Comments.pdf

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RECEI l1tJ
Z8lOJUN l 5 AM 9: 35
201 South Main, Suite 2300
Salt Lake City, Utah 84111
June 14,2010
VL ELECTRONIC FILING
AND OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472 West Washington
Boise,ID 83702-5983
Attention:Jean D. Jewell
Commission Secreta
Re:Case No. PAC-E-IO-03
In the Matter of the Application of Rocky Mountain Power for an Increase to
the Customer Efficiency Services Rate
Rocky Mountain Power, a division of PacifiCorp, hereby submits for filing an original and seven
(7) copies of its comments in response to comments filed by the Idaho Public Utilties
Commission Sta, the Idaho Irrgation Pumpers Association and the Idao Conservation League
in the above referenced matter.
Informal inquiries may be directed to Ted Weston, reguatory manager, at [phone].
~n7J~. ~ (1)Î
J:I;K. Larn J
Vice President, Regulation
Enclosures
Mark C. Moench
Danel E. Solander
201 South Main, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
FAX: [phone]
Email: mark.moench(ßpacificorp.com
danel.solander~pacificorp.com
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Attorneys for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER FOR
AN INCREASE TO THE CUSTOMER
EFFICIENCY SERVICE RATE
)
) CASE NO. PAC-E-IO-03
)
) REPLY COMMNTS
)
)
COMES NOW Rocky Mountain Power, a division of PacifiCorp (the "Company"),
before the Idaho Public Utilities Commission ("Commission") with the following reply
comments to positions taen by the Idao Conservation League ("ICL") and the Idaho Irrgation
Pumper Association ("IIPA") opposing the Company's request to increase the Customer
Efficiency Service Rate ("DSM Tarff Rider"). The Company is generally supportive of the
comments and position recommended by the Idaho Public Utilities Commission Sta ("Staf') in
ths Case.
1) Whle the justifications differ, both ICL and lIP A have proposed to remove the costs
associated with the Company's irgation load control program from recovery though the DSM
Tarff Rider. The Company strongly disagres with ICL and IIPA's proposal to recover costs
associated with ths program though general rates. Deferrg demand-side management
("DSM") costs for recovery though the DSM Tarff Rider, removes at least in par the utility
1
disincentives posed by DSM programs (i.e. the potential under recovery of prudent expenses
without an abilty to ear a retu). ICL recognzes this fact in stating that ''te taff rider is an
importt mechansm for encouraging DSM investments in that it provides timely cost
recovery." Comments of ICL, at p. 4. Requig recovery of the irrgation load control program
though general rates wil result in a signficant disincentive, not only for Rocky Mountain
Power but for other utilities regulated by the Commission.
2) Rocky Mountan Power is concerned with the contradictions contaed in ICL's
comments. ICL commends "Rocky Mounta's efforts thus far in puruig their DSM
programs," acknowledges that the "Irgation Load Control continues to be a highy successfu
program," and "encourages Rocky Mountain and the Commission to pursue other load control
programs." Id. at 4-5. Then, however, ICL states Rocky Mounta failed to justify recovery of
the accumulated balance and is concerned about the inability to control the accumulated balance
Id. at 9. It appears to the Company ICL expects Rocky Mountan Power to offer and to grow the
DSM programs that ICL acknowledges results "in lower rates and bils overall" Id. at 5 but
should not be allowed to recover the costs associated with the programs.
3) IIPA fuer proposes that costs associated with the irrgation load control program be
considered "system" costs rather than 'jursdictional" costs. Comments of LIP A at page 3. Once
again, the Company strongly disagrees with this assertion. This proposal is inconsistent with the
"Revised Protocol" and with Stas comments in ths Case where Sta states that "all customers
realize a net benefit from the cost effective use of DSM intiatives, including energy efficiency
and load management programs because of the reduced need for higher cost supply-side
resources." Comments of Staff at page 4.
2
4) ICL erroneously argues that the costs associated with the irgation energy services
progr (Schedule 155) are not "legitimate" Id. at p. 6. Rocky Mountain Power strongly
disagrees with this assertion. The stadad economic test that compares the benefits to the costs
paid by the utilty (and recovered through the DSM Tarff Rider in the Idaho jursdiction) is the
Utility Cost Test ("UCT"). The UCT benefit cost ratio for the 2009 program is provided in
Attchment 2 of the Application and is 1.69. The ratio indicates that each 2009 dollar invested
(and recovered though the DSM Tarff Rider) for ths program is forecastedto generate $1.69 in
net benefits. The UCT results for ths program in 2007 and 2008 were 2.021 and 2.271
respectively. As such, Rocky Mountan Power disagrees with ICL's assertion tht ilegitimate
DSM taff rider costs were incured prior to 2009 for this program.
5) The Company strongly disagrees with ICL's assertion and interpretation of Order No.
29976 and believes ICL has misrepresented the intent of the Commssion's order by adding their
own interpretation Id. at 3. The Company is unable to find any statement that would lead it to
believe that "the Commssion has previously explained that before granting any adjustment to
the DSM taff," they will determe the prudence of program spending. In fact based on
Commission precedent, this is not the case. In both Case No. PAC-E-05-1O (Order No. 29976)
and PAC-E-08-01 (Order No. 30543), the Commission reviewed the Company's Application and
granted increases to the energy efficiency rider without expressly determining prudency. The
Company believes it has fuly complied with Order No. 29976 and met the intent of that order
by: (i) filing Anual DSM reports that demonstrate the distrbution of program dollars, the cost
effectiveness of individual programs, and the program spending with the Commssion before
May 1 of each year; and (ii) providing actual program performance, including expenditues,
savings and assessments of cost-effectiveness, as well as the balancing account activity for 2009
3
and forecasted program performance, expenditues, savmgs and assessments of cost-
effectiveness for 2010.
6) The Company disagrees with ICL assertion that Sta failed to review program
distrbution, cost effectiveness, and prudency in ths case. Id. at page 3. Stas comments attest
to the fact that Sta has examined the Company's Application, the distrbution of program
dollars, and the cost effectiveness of individual programs. Based on their examination, Sta
noted in their comments: "As can be seen in the Company's 2009 DSM anua report, all major
customer classifications are receivig benefits from the curnt portfolio of DSM programs."
Comments of Sta at p. 2. Furer, Staff states, "For the puroses of this case, Staff verified the
estimated anua level of expenditues required to fud existing DSM programs and reviewed
the existing DSM deferral balance subject to recovery and confired the Customer Effciency
Servce Rate necessa to allow recovery of progr costs. Based on ths review, Sta supports
the Company's proposal to increase the Effciency Services Rate to 5.85%" Id. at 3.
7) Rocky Mountain Power strongly disagrees with ICL's assertion that it has failed to justify
recovery of the accumulated back balance and that customers "incur substatial caring
charges" on this balance. Comments of ICL at p. 9. The Company's preference would be for
fuding to match program expenditues where the Company experienced no delay in recovering
program costs. However, Rocky Mountan Power is keenly aware of the impact rate increases
have to our customers and this Application made signficant efforts to address ths concern. In its
Application, the Company identified progrs that the Commssion could consider temporarly
suspending to mitigate customer rate impact as well as proposed a collection rate that would take
approximately thee years to collect the accumulated balance. Curently the anua caring
4
charge on the DSM balancing account is 1 percent, a rate that any reasonable person would be
hard pressed to represent as a "substatial caring charges."
CONCLUSION
Rocky Mountai Power has fied Anua DSM reports tht demonstrate the distrbution
of program dollars, the cost effectiveness of individua programs, and the program spending with
the Commission. ICL's own testimony pointed out that "According to the Californa Stadard
Price Manual, when the RI reveals a benefit to cost ratio greater than one, the progr will
result in lower rates and bils overall" Id. at 4 - 5. Ths alone is a stong indication of the
prudency of the Company's programs. Rocky Mountain Power continues to incur cost-effective
DSM expenditues to meet customer demand for paricipation in these programs. Staff has
reviewed the Company's Application and determined that the Company's request was justified.
The Company has complied with past Comssion orders to support this Application. The
Company requests that the Commission grt its request to increase the Customer Effciency
Service Rate by processing ths Application under Modified Procedure.
DATED this 14th day of June, 2010.
Respectfly submitted,
NtvuM~/v1iMark C. Moench I
Danel E. Solander
Attorneys for Rocky Mountan Power
5
CERTIFICATE OF SERVICE
I hereby certify that on ths 15th day of June, 2010, I caused to be served, via E-mail, a
tre and correct copy of Rocky Mounta Power's Reply Comments in PAC-E-10-03 to
the followig:
Eric L. Olsen
Racine, Olson, Nye, Budge & Bailey,
Charered
201 E. Center
P.O. Box 1391
Pocatello,ID 83204-1391
E-Mail: elo(iracinelaw.net
Anthony Yane i
29814 Lake Road
Bay Vilage, Ohio 44140
Fax: [phone]
E-mail: tony(iyaneLnet
Benjamin J. Otto
Idaho Conservation League
710 N. 6th St;
P.O. Box 844
Boise, Idaho 83702
E-MAIL: botto(iidahoconservation.org
Cm~
Coordinator, Admnistrative Services