20110120Hunter Direct.pdf

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iun JAN 20 AM If): 22
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE )
APPLICATION OF ROCKY )
MOUNTAIN POWER REQUESTING )
APPROVAL OF REVISIONS TO ITS )
DISPATCHABLE IRRGATION )
LOAD CONTROL PROGRAM )
CASE NO. PAC-E-11-06
Direct Testimony of Carol L. Hunter
ROCKY MOUNTAIN POWER
CASE NO. PAC-E-11-06
January 2011
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Please state your name and business address.
My name is Carol L. Hunter. My business address is One Uta Center, 201 South
Main, Salt Lake City, UT 84111.
By whom are you employed and in what position?
I am a Vice President for Rocky Mountain Power.
Please describe the responsibilties of your current position.
I am responsible for demand-side management for Rocky Mountain Power and
for Pacific Power. This includes the planning, development, design, approval and
implementation of programs designed to reduce energy consumption through
energy efficiency and behavioral changes and to reduce consumption durg peak
12 periods of usage through load control.
13 Qualifications
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Please describe your background.
I received a RS. in mechanical engineering in 1977 and an M.RA. in 1987 from
the University of Utah. I joined PacifiCorp in 1977 as a customer service engineer
and have held various management positions in resource planning, wholesale
marketing, community and business services and economic development. In 2004,
I was promoted to vice president.
I have held numerous board positions over my 30 year career and
curently serve on the executive board of the Salt Lake Chamber of Commerce,
the Idaho Strategic Energy Allance and the energy efficiency subcommittee of
the Uta Energy Taskforce.
Hunter, Di- 1
Rocky Mountain Power
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What is the purpose of your testimony?
The purose of my testimony is to describe the proposed changes to the
Company's Dispatchab1e Irrgation Load Control Program, Schedule 72A (the
"Program").
What is the purpose of the Program and who is eligible to participate?
The Program is a voluntary load control program available to agricultua1
irrigation customers receiving service under the Company's Schedule 10,
Irgation and Soil Drainage Pumping Power Service. The purose of the Program
is to allow the Company to control demand and manage the system sumer peak
by turning off participating pumps periodically, not to exceed 52 hours, during
June 1 through August 31 (the "Program Season"). Participants voluntarily agree
to allow the Company to tu off pumps, with a day ahead notification, any
Monday through Friday between 11:00 a.m. and 7:00 p.m. Mountain Daylight
Time durng the Program Season. In retu, participants receive a load control
payment or credit against their outstanding bil before October 31 st of each year.
16 Irrigation Load Control Program
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What is the current status of the irrigation load control Program?
The Company's irgation load control Program has grown from 65 MW in 2007
19 to 203 MW in 2008. During the 2010 Program Season, approximately 278 MW of
20 load was enrolled in the Program. Durng the 2008 and 2009 Program Seasons,
21 the Company began noticing voltage excursions outside industry acceptable
22 standards durg dispatch events. By 2010, the Company began to phase-in and
23 out of dispatch events to tr to minimize these excursions. While this phasing
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Rocky Mountain Power
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approach helped minimize excursions, the Company was stil unable to take the
entire paricipating 10ad off durg the peak time period between 2:00 and 6:00
p.m. due to the magnitude of participating 10ads on some circuits. The
participatig loads were simply too dominant on some circuits for the Company's
voltage control equipment to compensate for the loss of 10ads. As a result, with
the agreement of the customers, some loads had to be scheduled for curailment
outside of the primar dispatch hour or hours. While this action, coupled with the
phase-in and out of dispatch events, was effective in stabilzing the voltage
excursions, doing so diluted the total control available durng any peak hour when
the Program's resources are n~eded to manage system demands. The Company
realized that Program modifications were required to provide the Company the
flexibility to select Program participation by system circuit.
Did the Company intend to make modifcations to the Program earlier?
Yes. During the 2010 Program Season the Company prepared an application to
address these issues. Before fiing the application the Company spoke with
Commission Staff who recommended not proposing changes durng the Program
Season.
Later in the year, through discussions with Staff it became apparent that
they planned on raising issues concerning the treatment of the Program in the
Company's pending general rate case (PAC-E-1O-07). Ultimately, Mr. Randy
Lobb and Ms. Terri Carlock fied direct testimony proposing that the costs
associated with the Program be system allocated rather than directly assigned to
Idaho. I sponsored rebuttal testimony requesting that the Commission approve
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modifications to the Program that I believe wil reduce the costs of the Program
and increase its effectiveness.
With a pending Commission Order in Case No. PAC-E-l0-07 (2010 GRC),
why is the Company filing this Application?
There are three primary reasons for the fiing: First, the curent tarff language
states that the Company wil communicate the value of the load control service
credit to customers by February 15. It is my understanding that a decision wil not
be rendered in the 2010 general rate case until the end of Februar 2011. Second,
while I addressed the major Program changes that the Company is proposing in
my rebuttl testimony in the 2010 GRC, there are some additional minor tariff
languge revisions that need to be made. Finally, the Company did not file revised
taff sheets as par of the 2010 GRC. When the Commission's interlocutory order
was silent on the proposed Program modifications, the Company realized the only
way to have an order approving changes to the Progrm would be to fie a
separate tariff advice or application. On Januar 11, 2011, the Company fied a
tarff advice requesting that the proposed changes be processed and approved by
February 11, 2011. This timeline would allow the Company to communicate
Program changes to customers before the February 15th deadline. On Januar 13,
2011, Staff contacted the Company and requested that the Company withdraw its
tariff advice and fie this Application.
Has the Company communicated these proposed changes to its customers?
Yes. While preparng rebuttal testimony fied in Case No. P AC-E-1O-07, I and
other Company representatives had several conference calls with representatives
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of the Idaho Irgation Pumpers Association. Durg those calls several options
were discussed, including the revisions listed in my testimony. Furher, the Idaho
Irgation Pumpers Association actively participated in Case No. PAC-E-1O-07
and therefore was made aware of the proposed changes.
Please identify the changes that you are proposing to the irrigation load
control Program.
The Company proposes that the following changes be made to the Program tariff:
. Add similar language to that of Idaho Power's participation selection
language to the Company's tariff. The Company proposes the following
language be added to Schedule 72A:
The Company shall have the right to select and reject Program
participants at its sole discretion based on criteria the Company
considers necessary to ensure the effective operation of the
Program. Selection criteria may include, but wil not be limited
to; cost effectiveness, impact on the operation of the
Company's transmission and distribution system, biling
demand, location, pump horsepower, pumping system
configuation, and/or electrc system configuation. Past
participation does not ensure selection into the Program in
future years. Participation may be limited based upon the
availabilty of the Program equipment and fuding.
. Reduce the participation credit to $25.30 per kW per year.
. Change the penalty for opt-out events available to the Schedule 72A
participants to a percentage reduction in the partcipation credit for each
event as follows:
· 1 opt out event - 100% of the participation credit paid to
participant
· 2 opt out events - 90% of the paricipation credit paid to paricipant
· 3 opt out events - 70% of the participation credit paid to participant
· 4 opt out events - 50% of the paricipation credit paid to paricipant
· 5 opt out events - 25% of the participation credit paid to partcipant
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· 6 opt out events - participation in Program terminated for the year
. Finally, the Company has proposed minor language changes in the
Program tariff such as; modifying language about continued parcipation
in the Program, eliminating the requirement for internet access, deleting
duplicate language dealing with calculation of the credit, removing
references to air time communication costs and to use of equipment
charges and changing "irrigation season" to "Program Season" in the
tariff.
Please explain the change in tariff language you are recommending to align
the Company's Program tariff with Idaho Power's participation selection
language.
Begining in 2008, the Program manager for the irgation load control Program
began fielding complaints from the distrbution field engineers regarding voltage
excursions durng dispatch events. In response, the Program manager began
notifying distribution engineering of pending events so the Company could make
the necessar adjustrentsto the system to limit the impact to the system. Program
participation continued to grow and in 2009 the solution implemented in 2008
was insuffcient to address the issue.
Durng the period following the 2009 control season, the Program
manager, working with the Company's engineers, identified the upper limits of
the load that could be removed from each circuit without adversely impacting the
distrbution circuit, distrbution substation, transmission substation and/or
generating voltages that impacted end-use loads. On a circuit by circuit basis, and
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ultimately on a grower by grower basis, loads were organized so they could be
"stair-stepped" on and off in three minute intervals. While this approach resolved
part of the issue, there was stil an issue on select distribution substations where
reductions were limited to a certin magnitude. In these instances, the only
solution was to allocate some loads away from the 2:00 - 6:00 p.m. dispatch to
two dispatch periods: 11:00 a.m. - 3:00 p.m. and 3:00 - 7:00 p.m. The result was
three distinct dispatch periods and within each of the dispatch periods
approximately five different "stair step" dispatches. While this best utilzes the
loads under management, it dilutes the Program's contrbution durng.the highest
peak hours when the control is needed the most.
By including the proposed language in the Company's tariff, Rocky
Mountain Power can improve the impact of the load control Program at peak,
lower Program costs and, as a result, maintain and or improve Program cost
effectiveness.
What would the impact be to the Program if the incentive payments are
lowered to the proposed level of $25.30 per kW per year?
The Program provides significant benefits to customers, even at a reduced rate of
$25.30 per kW per year. While the Company anticipates that the reduced
participation credit will result in some customers electing to not participate in the
Program, given the number of other factors that may impact a customer's decision
to participate the Company is unable to provide an estimate of the impact on
participation from the proposed reduction in paricipation credit.
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How was the $25.30 per kW per year arrived at as a recommendation?
In its Interlocutory Order in Case No. PAC-E-1O-07, the Commission indicated
that the Program should be treated as a system resource and allocated system-
wide. In that case, I requested that the Commission reduce the. paricipation credit
to $25.00 per kW-year. Since the Interlocutory Order was silent on this issue, the
Company has calculated the proposed credit based on its recommendation of
$25.00 with 94 percent of the Program costs being shifted to other states, and
$30.00 based on the curent level in Idaho absent approval from the Commission
to lower it to the $25.00 as requested in Case No. PAC-E-1O-07.
Please explain the changes to the opt-out penalties you are recommending.
Let me start by summarzing the curent Program. Participants in the Schedule
72A Dispatchable Irgation Program agree to allow the Company to dispatch
their pumps for 52 hours per year. Each dispatch event canot exceed four hours
totaling a maximum of 13 interrptions annually. Program participants are
permitted to "opt-out" of up to five events; upon opting out of a sixth event, they
are terminated from the Program. Pursuant to terms of the existing Program tariff,
partcipants opting out of an event have their annual participation credit reduced
by the posted day ahead market price of electrcity. While the Company only
experienced 2.9 percent of customers opting out of control events, the penalty
associated with opting out is inconsistent with the impact to the Program and no
clear price signal is available to customers. Consider the following example:
. Assume an irrgator opts a 135 Hp pump (lOOkW) out of the Program
durng five control events.
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. Assume an average value of the liquidated damages in 2010 curently
provided for in the tarff.
. Under the curent tariff provision, the irigator would receive 96 percent of
the total paricipation credit while only curailng load during a maximum
of approximately 60 percent of the events durg a Program Season.
. Based on the proposed opt-out schedule, the irrgator would only retain 25
percent of the credits.
The proposed change wil improve the performance of the Program by (1)
reducing the number of opt-outs and, as a result, increasing the amount of load
curiled during events, and/or (2) reducing the total incentives, thereby reducing
the overall cost of the Program. This change has no impact on a paricipant's
abilty or rights within the Program to opt-out of an event, but rather provides a
framework that better aligns the costs associated with doing so with the value
provided through the paricipation credits.
If the proposed modifcations are approved, how wil the Company select
which irrigation customers participate in the Program?
The Company believes with the proposed revisions the selection process will be
accomplished to a degree through customer self selection. As discussed durng the
hearings in Case No. PAC-E-I0-07, limiting paricipation to larger pumps should
eliminate approximately 13 MW of participation. In addition to this, the reduction
in the load control credit and the change in the opt-out penalty are likely to result
in additional customers who elect to not paricipate in the Program. Additionally,
durng the public hearings held December 14th and 15th as part of the Company's
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2010 general rate case, Program participants on canal systems indicated that the
Program did not work for them due to flooding and water losses once water is in
the canaL. Accordingly, this may be another area of focus. However, ultimately
the Company wil need to review participation on a circuit by circuit basis to
avoid the curent over concentration of participation in anyone area and use its
discretion provided by the proposed language addition above (that similar to the
language found in Idaho Power's tariff) to accept or reject participation requests
in order to maintain voltage integrity and to maximize Program impact and
economics.
How would customers benefit from these Program changes?
These changes wil reduce the cost of Program delivery while enabling the
Company to more efficiently manage the Program and achieve optimal load
control results.
Does this conclude your testimony?
Yes.
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Rocky Mountain Power