20121207Application.pdf

'ROCKY MOUNTAIN
POWER
A DIVISION 0FCIFIcORP fLU 201 South Main, Suite 2300
Salt Lake City, Utah 84111
2012OEC -7 $j fl: 07
December 7, 2012 jr.j
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VIA OVERNIGHT DELIVERY
Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
Re: CASE NO. PAC-E-12-14
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN
POWER FOR AUTHORITY TO CANCEL ELECTRIC SERVICE
SCHEDULE NOS. 72 AND 72A IRRIGATION LOAD CONTROL
TARIFFS AND APPROVE A NEW DEMAND SIDE MANAGEMENT
CONTRACT
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Rocky Mountain Power's
Application and two Confidential Attachments in the above referenced matter.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager, at (801) 220-
2963.
Sincerely,
frhLar
ice President, Regulation and Government Affairs
Mark C Moench (ISB# 8946)
Daniel B. Solander (ISB # 893 1)
201 South Main, Suite 2300
Salt Lake City UT 84111
Telephone: [phone]
FAX [phone]
Email damel solander(i)pacificorp corn
mark moench(äpacificorp corn
Attorneys for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF ROCKY MOUNTAIN POWER FOR )
AUTHORITY TO CANCEL ELECTRIC ) CASE NO PAC-E-12-14
SERVICE SCHEDULE NOS 72 AND 72A )
IRRIGATION LOAD CONTROL TARIFFS ) APPLICATION
AND APPROVE A NEW DEMAND SIDE )
MANAGEMENT CONTRACT )
COMES NOW, Rocky Mountain Power, a division of PacifiCorp (the
"Company"), and in accordance with RP 052 and RP 201, et seq., hereby applies to the
Idaho Public Utilities Commission (the "Commission") for authority to cancel Electric
Service Schedule No 72, Irrigation Load Control Credit Rider, and Electric Service
Schedule No 72A, Dispatchable Irrigation Load Control Credit Rider Program and
respectfully requests approval of a demand-side management contract with a third party
aggregator for delivery of the irrigation load control program
In support of this Application, Rocky Mountain Power states
1 Rocky Mountain Power does business as a public utility in the state of
Idaho and is subject to the jurisdiction of the Commission with regard to its public utility
operations
APPLICATION OF ROCKY MOUNTAIN POWER -1
2. This Application is filed pursuant to Idaho Code §§ 61-301, 61-307, 61-
622, and 61-623. In particular, Idaho Code § 61-623 empowers the Commission to
determine the propriety of proposed rate schedules, §§ 61-307 and 61-622 require
Commission approval prior to any change in rates, and § 61-301 requires Idaho retail
electric rates to be just and reasonable.
BACKGROUND
Electric Service Schedule 72 - Pre-Schedule Program
3.Rocky Mountain Power has offered a pre-scheduled irrigation load control
program for decades. Beginning in the early 1980s, irrigators in Idaho had the option to
participate in load interruption through options A, B, or C of the Electric Service
Schedule 10, Irrigation and Soil Drainage Pumping Power Service.
4.In June 2002 as part of the power cost surcharge stipulation approved by
the Commission, options A, B, and C were eliminated in favor of firm service offered
under Schedule 10. As part of the stipulation, PacifiCorp committed to develop an
alternative option to Schedule 10 that would permit irrigators to manage their energy
costs through a curtailment ("load control") program. The program was to be available
for the 2003 irrigation season. On January 31, 2003, PacifiCorp complied with the
directive of the Commission by filing an application requesting approval of Electric
Service Schedule No. 72, Irrigation Load Control Credit Rider tariff. On March 17, 2003,
1 Case No. PAC-E-03-03.
APPLICATION OF ROCKY MOUNTAIN POWER -2
the Commission approved 2 the Company's tariff and ordered implementation by June 1,
2003.
5.Pursuant to the Commission's approval of Schedule 72, offerings were
made to participants based on avoided kilowatts for each of the three and one-half
summer months (June through September 15th)• The amount of credit was based on the
price of a power option for the 2003 summer period. That is, the value proposition to
participants was set based on what the Company would otherwise have to pay for an
equivalent amount of power (supply side) on the open market for a 'block' purchase of
30 megawatts The price was, in effect, the cost for an equivalent market instrument
Separate pricing structure metrics were prepared for June, July, August and the first 15
days of September.
6.In 2003 there were 207 customers, with 401 sites, representing 45
megawatts of peak reduction participating in optional Schedule 72. Participation reached
its highest level in 2005 with 489 customers, 1,065 sites, and 54 megawatts of peak
reduction capability. In 2006 participation began to decline with 478 customers, 931
sites, and 44 megawatts. In 2007 participating load in Schedule 72 dropped by half
mainly due to the implementation of the new Electric Service Schedule 72A,
Dispatchable Irrigation Load Control Credit Rider program. This declining participation
trend continued, during the 2012 irrigation season only 68 customers, with 77 sites,
representing 2.3 megawatts participated in Schedule 72
2 IPUC Order No. 29034.
APPLICATION OF ROCKY MOUNTAIN POWER -3
Electric Service Schedule 72A - Dispatchable Program
7.In the fall of 2006, based on the results of a twenty-five unit pilot test of a
prototype control technology, Rocky Mountain Power proposed and subsequently
received Commission approval 3 to pursue a pilot program of a fully dispatchable load
control solution for the 2007 irrigation season.
8.The Company implemented the pilot program prior to the 2007 irrigation
season anticipating approximately 45 megawatts of participating load. Actual results
exceeded anticipated participation levels with 76 megawatts under contract during the
2007 program season. In 2008, based on the results of the 2007 pilot program, the
Company applied to the Commission and was granted authorization to implement
Electric Service Schedule 72A as a full enrollment program.
9.Schedule 72A is a voluntary load control program available to agricultural
irrigation customers receiving service under Schedule 10. The purpose of the program is
to allow the Company to control demand and manage the system summer peak by turning
off participating pumps periodically, not to exceed 52 hours, from June 1 through August
31 the "Program Season."
10.Growth in the load control program exceeded the Company's expectations
jumping from 76 megawatts in 2007 to 203 megawatts in 2008. Participation continued to
Case No. PAC-E-06-12, IPUC Order No. 30243.
APPLICATION OF ROCKY MOUNTAIN POWER -4
increase in 2009 to 254 megawatts and by 2010 had reached 283 megawatts under
control, where it was capped for the 2011 and 2012 irrigation seasons.4
11.The operating terms of Schedule 72A have typically been achieved by
agreement between the Company, Idaho Irrigation Pumper Association ("IIPA") and
Idaho Public Utilities Commission Staff, ("Staff') through several stipulations. After
initiating the program in 2007 the load control credit was agreed to as part of the
Company's general rate case.5 The stipulation approved in Order No. 30425 governed
operations for calendar years 2008 and 2009. In April 2011 the Company, IIPA and Staff
filed a stipulation agreeing to modifications to the program and extending the load
control credit approved in Order No. 30425 through the end of the 2012 irrigation
season.
12.As part of the stipulation, the Company committed to invest a minimum of
$1.3 million in capital improvements to identify and install equipment needed to reduce
the constraints on four circuits prior to the 2012 irrigation season. The Company
completed the necessary system improvements before the 2012 irrigation season.
Consequently, the constraints cited in the stipulation to Case No. PAC-E-11-06 did not
impact the 2012 performance.
13.During the 2012 Program Season the Company called twelve control
events. Given the number and dispersion of events, the Company had the ability to
evaluate the week-to-week availability of actual controllable load in Idaho. The chart
Case No. PAC-E-1 1-06, IPUC Order No. 32235.
Case No. PAC-E-07-05, Order No. 30425.
6 Case No. PAC-E-1 1-06
APPLICATION OF ROCKY MOUNTAIN POWER -5
260
240
220
200
180
160
MegaWatts
140
120
100
80
60
40
Participating
Load
Av.rag.
Reduction
Average
During Peak
Period
6/10/2012 6/20/2012 6/30/2012 7/10/2012 7/20/2012 7/30/2012 8/9/2012 8/19/2012 • Realized Load
Date Reduction
10-YR System Peak Period
I
below illustrates the relationship between load curtailed during a control event (actual
and average) and the load used as the basis for incentive payments or credits to
participating customers in Idaho (total participating load).
2012 Irrigation Load Reduction
Incentive payments or credits to participants for 2012 were based on 244 megawatts of
load Participating load, as defined by Schedule 72A, is the sum of the average billing
demand for participant's sites for the most recent two-year Program Seasons The
average realized load reduction for the 2012 Program Season was 139 megawatts or 57
percent of the participating load During the ten-year system peak period (ten year actual
system peak days) the 2012 average realized load reduction was 117 megawatts or 48
percent of the participating load
REQUEST FOR PROPOSAL
14 The Company has been able to reduce operating costs of the program over
the last three years by renegotiating the scope of its contract with its third party service
APPLICATION OF ROCKY MOUNTAIN POWER -6
provider and utilizing inventoried equipment as it readied for the re-procurement of
control equipment and services
15 During 2012 the Company issued a request for proposal ("RFP") in an
effort to identify program delivery alternatives to deliver the program in the most cost
efficient manner.
16 Sixteen companies were invited to participate in the RFP issued by
PacifiCorp The companies were asked to provide proposals based on two alternatives
Option 1 contractor delivers the dispatchable irrigation load control
program under a fully outsourced pay-for-performance model accepting
all the costs and risks to create, maintain, and manage the program This
option required respondents to provide capacity, provide both monitoring
and load control devices, and pay incentives to customers
Option 2 the Company would continue operating the dispatchable
irrigation load control program Currently the Company delivers the
dispatchable irrigation load control program with an internal program
manager utilizing contractors for the field operations, program database,
dispatch software, and customer interface activities To support a
Company operated program contractors were asked to provide proposals
for equipment installation, operation, maintenance, and customer service
associated with the program under the terms specified in the RFP
APPLICATION OF ROCKY MOUNTAIN POWER -7
While the focus of the RFP was on the existing programs in Utah and Idaho,
proposals were also obtained for California, Oregon and Washington. 7 Targeted load
reductions were established for each state.
The Company received five proposals from two qualified vendors, two pay-for-
performance proposals and three equipment and service proposals The proposals were
evaluated to determine the least cost option after consideration of risk To facilitate this
evaluation, the incentive level and structure currently approved by the Idaho and Utah
Commissions were utilized
The results of the pricing analysis of the five proposals on a cost per kilowatt of
realized reduction is attached as a Confidential Attachment No 1
The least cost option is the pay-for-performance proposal submitted by EnerNoc,
Inc ("EnerNoc") In addition to being the least cost option, EnerNoc assumes all
equipment and delivery risks associated with the program
EnerNoc currently manages over twenty-five pay-for-performance contracts in the
United States In 2011, EnerNoc purchased the manufacturer of the Company's current
irrigation load control equipment The equipment being proposed by EnerNoc is a two-
way communication solution designed specifically for irrigation load control applications
by (1) capturing and communicating near real-time irrigation load data on five-minute
intervals, and (2) enabling direct control of irrigation pumps and equipment
Pricing information for irrigation load control in California, Oregon and Washington were provided for
inclusion in the Integrated Resource Planning model
APPLICATION OF ROCKY MOUNTAIN POWER -8
The next closest bid to EnerNoc was from a company that is an Idaho Limited
Liability Corporation (Vendor B), who has supported the Company's current program as
the installation, maintenance, and customer service provider for six years Vendor B's
proposal required either the development of a new irrigation load control device or the
acquisition of more costly equipment
Taking into consideration pricing, risk and the technical evaluation performed
during the RFP process, EnerNoc's pay-for-performance proposal was selected
Negotiations regarding the final agreement began shortly after the vendor selection The
terms of the contract agreed to between the companies are summarized in the table
below:
General Term Description
Term of the Agreement 10 Years with ability to terminate early
Eligible Customers Schedule 10 customers
Average Demand Response
Capacity
145 MW Idaho
40 MW Utah
Capacity Basis Average available capacity measured during the guarantee period
Pricing Provided in Confidential Exhibit B
Performance Guarantees Provided in Confidential Exhibit B
Dispatch Limitations - 52 hours per year, 20 events per year, 1 to 4 hours per event
Guaranteed Period June 15 - August15
Weekdays excluding holidays
12pm - 8pm MST
Non-Guaranteed Capacity May dispatch an event anytime beyond the Dispatch Limitations and
Guaranteed Capacity Limits, load reductions will not be guaranteed.
The contract with EnerNoc is being filed with this Application as Confidential
Attachment No 2 Under the terms of this contract, the vendor assumes full responsibility
for the installation, operation and maintenance of the irrigation load control devices,
dispatch of the devices as directed by the Company, customer recruitment, customer
service and issuance of irrigation credits to be paid to participating irrigation customers
APPLICATION OF ROCKY MOUNTAIN POWER -9
EnerNoc will be compensated based on the average load available for curtailment
less any performance shortfall adjustments during program events. Performance shortfall
adjustments will be calculated using actual five-minute interval energy data against a pre-
determined baseline during program events. Additionally, the vendor has been provided
an incentive to optimize the amount of load curtailment during historical peak time
periods, July 15 through August 15.
Participant curtailment amounts, incentive levels and terms and conditions will be
between the vendor and qualifying customers. The increased flexibility in identifying
load available for curtailment, contracting, and pricing incentive will allow the vendor to
optimize the amount of load available for curtailment July 15 through August 15. The
vendor will administer the program from its Boise, Idaho office. The program will feature
updated hardware providing near real-time (five-minute interval data) electricity usage
information through an advanced software platform, delivered and maintained by the
vendor.
A two-way communication system enables the vendor to consolidate the interval
data from participating customers and to provide the Company, accurate information
regarding the load available for curtailment. Consistent with the existing program
structure, customers will be provided with day-ahead notice of program dispatch and the
ability to opt-out of event participation before loads are remotely controlled via the
irrigation load control platform. The participating customer will also have access to
energy usage data available in near real-time through a dynamic web portal.
APPLICATION OF ROCKY MOUNTAIN POWER -10
CANCELLATION OF ELECTRIC SERVICE SCHEDULES 72 & 72A
17 Based on the Company's evaluation of the RFP bids for the load control
program by comparing the costs and results of self-delivery with the costs and results of
the pay-for-performance bids the Company determined that the most efficient and
effective manner to continue to offer the irrigation load control program is through a pay-
for-performance bi-lateral contract model, as opposed to a typical tariff-based, utility
delivered load control program model
18 Therefore, the Company respectfully requests that the Commission
approve the attached demand-side management contract and cancel Electric Service
Schedules 72 and 72A
MODIFIED PROCEDURE
19 Rocky Mountain Power believes that consideration of this Application
does not require an evidentiary proceeding, and accordingly respectfully requests that this
Application be processed under RP 201 allowing for consideration of issues under
Modified Procedure, i.e., by written submissions rather than by an evidentiary hearing
SERVICE OF PLEADINGS
20 Communications regarding this Application should be addressed to
Ted Weston
Rocky Mountain Power
Manager, Idaho Regulatory Affairs
201 South Main Street, Suite 2300
Salt Lake City UT 84111
Telephone: [phone]
Facsimile: [phone]
E-mail ted weston@pacificorp corn
APPLICATION OF ROCKY MOUNTAIN POWER -11
Daniel E. Solander
Rocky Mountain Power
Senior Counsel
201 South Main Street, Suite 2300
Salt Lake City UT 84111
Telephone: [phone]
Facsimile: [phone]
E-mail: [e-mail]
In addition, Rocky Mountain Power requests that all data requests regarding this
matter be addressed to:
By e-mail (preferred): datareguestpacificorp.com
By regular mail:
PacifiCorp
Data Request Response Center
825 NE Multnomah, Suite 2000
Portland, OR 97232
CONCLUSION
WHEREFORE, Rocky Mountain Power respectfully requests that the Idaho
Public Utilities Commission issue an order under Modified Procedure authorizing the
Company to cancel Electric Service Schedule 72, Irrigation Load Control Credit Rider,
and Electric Service Schedule 72A, Dispatchable Irrigation Load Control Credit Rider
Program, as described herein and approve the attached demand-side management contract
effective February 1, 2013.
APPLICATION OF ROCKY MOUNTAIN POWER -12
DATED this 7th day of December, 2012
Respectfully submitted,
L olw
Mark C Moench
Dame! E Solander
Attorneys for PacifiCorp
APPLICATION OF ROCKY MOUNTAIN POWER -13
Confidential
Attachment No.1
Confidential
Attachment No.2