20120724Comments.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
P0 BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
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Street Address for Express Mail:
472 W WASHINGTON
BOISE ID 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF ROCKY MOUNTAIN POWER FOR ) CASE NO. PAC-E-12-11
AUTHORITY TO DECREASE THE )
CUSTOMER EFFICIENCY SERVICES )
RATE. ) COMMENTS OF THE
) COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through
its Attorney of record, Weldon B. Stutzman, Deputy Attorney General, and in response to the
Notice of Modified Procedure issued in Order No. 32587 on July 3, 2012, submits the following
comments.
BACKGROUND
On May 30, 2012, PacifiCorp dba Rocky Mountain Power filed an Application
requesting authority to reduce its customer efficiency services rate (Schedule 191). The
Schedule 191 rate is currently 3.4% and produces annual revenues of approximately $5.7
million. The Company requests authority to decrease the rate to 2.1%, to generate approximately
$3.5 million per year. The Company believes the rate reduction is appropriate to align the
Company's recovery of costs associated with future demand-side management (DSM) related
expenditures, and requests the new rate be effective July 1, 2012.
STAFF COMMENTS 1 JULY 24, 2012
The Company asserts that although its DSM balancing account was in deficit by
approximately $1 million as of April 30, 2012, the Company expects to have a credit balance
beginning August 2012 at current energy efficiency rider levels. The Company's Application
provides a summary review of each of its DSM programs along with expected levels of funding
in the near term. The Company does not propose to significantly modify or decrease its DSM
activities as part of this Application. The Company states that it "will continue to review
funding needs on a routine basis to determine whether this proposed adjustment is sufficient to
fund ongoing program expenses and continue to recover the remaining balance owed the
Company in the DSM balancing account." Application, p. 5.
STAFF REVIEW
Staff reviewed the Company's Application and additional information and supports the
Company's proposal to reduce the Schedule 191 customer efficiency service rate (energy
efficiency "Rider") to 2.1%. The proposed reduction to the tariff rider does not equate to a
reduction in DSM expenditures with the Company maintaining approximately the same level of
DSM expenditures through 2013. While a Rider of 2.1% will provide the Company with
sufficient revenue to cover its budgeted DSM expenditures through 2013, Staff is nonetheless
concerned that it may not be enough for the Company to acquire all cost-effective demand side
resources in the future
Based on the 2010 loads used in the Company's most recent general rate case, a 2.1%
Rider will generate approximately $3.5 million in annual revenue. The following table illustrates
the Company's historical and projected DSM expenditures from 2009-2013, excluding the
Company's Irrigation Load Control program:
2009 2010 2011 2012 2013
Energy Efficiency Expenditures (000's) $2,616 $3,232 $2,574 $3,227 $3,121
On February 28, 2011 the Commission ordered the Company to treat its Idaho irrigation load
control program as a system resource. Order No. 32196. Concurrently, the Commission reduced
the DSM tariff rider from 4.72% to 3.4% to account for the program no longer being funded
through the Idaho tariff rider and to provide the Company with sufficient revenue to recover its
deferral balance in approximately two years. However, the sagging economy and cooler than
STAFF COMMENTS 2 JULY 24, 2012
normal weather during 2011 caused the Company's DSM expenses to be significantly lower than
anticipated. Customers did not purchase energy efficient appliances or undertake retrofit
projects at the rate the Company had expected. This caused the Company to over-collect on the
DSM tariff rider for 2011 and pay down the deferral balance sooner than anticipated.
Without the proposed reduction, the Company states that it will begin to over collect the
DSM Tariff Rider in August of 2012. The proposed reduction will fund ongoing DSM
expenditures and more closely align the revenue and expenses associated with the DSM
balancing account by December 31, 2013.
Staff believes that cost-effective DSM is an important resource that helps customers
control their utility bills, reduces the need for costly supply-side resources and improves system
reliability. The least costly electricity resource is customers who invest in and use energy
efficiency to decrease energy consumption in their buildings, appliances, irrigation systems,
lighting, and industrial processes. Staff further believes the DSM tariff rider can be reasonably
reduced to match expenditures and increased when DSM program expenditures increase.
Staff reviewed the Company's forecasted Class 2 (energy efficiency programs and
services) energy savings from its Integrated Resource Plan (IRP) Update filed with the
Commission on April 2, 2012. Table B.3 of the update indicates that the Company's targets for
incremental energy savings for 2012 are 4,682 MWh and 7,329 MWh for 2013. During 2011,
the Company achieved approximately 9,000 MWh of new energy savings, far exceeding what it
had targeted for the upcoming years in its IRP update. Although the Company is achieving its
targets for energy savings, that by itself does not provide assurance that it is pursuing all cost-
effective DSM resources.
In response to Staff's production requests, the Company submitted a PacifiCorp system-
wide DSM Potential Study completed by Cadmus in 2011. The study provides PacifiCorp with a
20-year assessment of technical and achievable potential savings in each of its six jurisdictions,
including Idaho. For its Idaho jurisdiction, the assessment estimates a significant potential
increase in achievable energy savings for the Company's residential, commercial, industrial, and
irrigation sectors. The Company's Idaho service territory is distinct in its predominately rural
makeup and DSM implementation is more unique than its larger service areas. Staff intends to
work with Rocky Mountain Power to assess how the Company intends to incorporate future
potential energy savings based upon the most recent conservation potential study.
STAFF COMMENTS 3 JULY 24, 2012
STAFF RECOMMENDATION
Staff recommends that the Commission accept the Company's proposal in this
Application to reduce the customer energy efficiency services Schedule 191 from 3.4% to 2.1%,
effective August 1, 2012.
Respectfully submitted this 2...4 day of July 2011.
Weldon B. Stutzman
Deputy Attorney General
Technical Staff: Donn English
Nikki Karpavich
Stacey Donohue
i:umisc:comments/pace I 2.11 wsnkdesd comments
STAFF COMMENTS 4 JULY 24, 2012
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 24TH DAY OF JULY 2012,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. PAC-E-12-1 1, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
TED WESTON
ID REGULATORY AFFAIRS MANAGER
ROCKY MOUNTAIN POWER
201 5 MAIN ST STE 2300
SALT LAKE CITY UT 84111
E-MAIL: [e-mail]
DANIEL E SOLANDER
SENIOR COUNSEL
ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
E-MAIL: [e-mail]
DATA REQUEST RESPONSE CENTER BENJAMIN J OTTO
E-MAIL ONLY: ID CONSERVATION LEAGUE
[e-mail] 710 N 6TH ST
BOISE ID 83702
E-MAIL: bottoidahoconservation.org
SECRETAPY
CERTIFICATE OF SERVICE