20121221Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: KARL KLEIN
DEPUTY ATTORNEY GENERAL

DATE: DECEMBER 21, 2012

SUBJECT: ROCKY MOUNTAIN POWER’S APPLICATION: (1) FOR AUTHORITY
TO CANCEL IRRIGATION LOAD CONTROL TARIFFS 72 AND 72A,
AND (2) APPROVAL OF NEW DSM CONTRACT, CASE NO. PAC-E-12-
14

On December 7, 2012, PacifiCorp dba Rocky Mountain Power (the “Company”)
applied to the Commission for an Order: (1) authorizing it to cancel Electric Service Schedule
72, Irrigation Load Control Credit Rider, and Electric Service Schedule 72A, Dispatchable
Irrigation Load Control Credit Rider; and (2) approving a new demand-side management (DSM)
contract with third party aggregator, EnerNoc, Inc., for delivery of the irrigation load control
program. The Company asks that Modified Procedure be used, and that the requested changes
take effect on February 1, 2013. Application at 1 and 12.
THE APPLICATION
The Company’s describes the current irrigation load control program and the new
DSM contract with EnerNoc in sum as follows:
The Current Irrigation Load Control Program
In 2003, the Company implemented Electric Service Schedule 72, Irrigation Load
Control Credit Rider tariff, to provide irrigation customers with an alternative to receiving firm
service under Electric Service Schedule 10, Irrigation and Soil Drainage Pumping Power
Service. Schedule 72 lets irrigators opt to participate in a load control program that enables them
to manage their energy costs through curtailment. Id. at 2-3. Offerings are made to program
participants based on avoided kilowatts for each of the three summer months. The amount of

DECISION MEMORANDUM 2
credit is based on the price that the Company would have to pay for an equivalent amount of
power on the open market for a block purchase of 30 megawatts.
When the Schedule 72 program began, it had 207 customers with 401 sites,
representing 45 megawatts of peak reduction. Program participation then increased to a high of
489 customers, 1065 sites, and 54 megawatts of peak reduction capability in 2005. Program
participation has since declined, and in 2012 only 68 customers with 77 sites participated,
representing 2.3 megawatts of peak reduction capability. Id. at 3.
During the 2007 irrigation season, the Company successfully piloted a fully
disapatchable load control solution; while the Company expected 45 megawatts of participating
load, 76 megawatts ultimately participated in the program under contract. In light of this
success, in 2008 the Company implemented Electric Service Schedule 72A in 2008 as a full
enrollment program. Schedule 72A is a voluntary load reduction program available to irrigators
who receive service under Schedule 10. The program enables the Company to control demand
and manage summer peaks by periodically turning off program pumps. Id. at 4. Participation in
the Schedule 72A program has grown, and participation was capped at 283 megawatts for the
2011 and 2012 seasons. Id. Following a series of stipulations between the Company, Idaho
Irrigation Pumpers Association (“IIPA”), and Commission Staff, an agreed-to load control credit
was extended through the end of the 2012 irrigation season. Id. at 5.
During the 2012 season, the Company called 12 control events. Id. Incentive
payments or credits to 2012 participants were based on 244 megawatts of load. Id. at 6. The
average realized load reduction for the 2012 season was 139 megawatts, or 57% of participating
load. During the 10-year system peak period, the 2012 average realized load reduction was 117
megawatts, or 48% of the participating load. Id.
The EnerNOC DSM Contract
In 2012, the Company requested proposals for delivering the irrigation load control
program in the most cost-efficient manner. Id. at 7. The Company sought proposals on two
alternatives: (1) A pay-for-performance model in which the contractor delivers the dispatchable
irrigation load control program and provides capacity, monitoring and load control devices, and
incentives to customers while accepting the risks associated with the program; and (2) an
equipment-and-service model in which the Company continues to operate the program while the

DECISION MEMORANDUM 3
contractor provides the customer service and equipment installation, operation, and maintenance
associated with the program. Id. at 7.
After reviewing five proposals from two qualified vendors, the Company determined
that the least-cost option is a pay-for-performance model submitted by EnerNoc, Inc., a company
that manages more than 25 pay-for-performance contracts and which purchased the manufacturer
of the Company’s current irrigation load control equipment. Id. at 8. The Company’s resulting
contract with EnerNoc provides, in sum:

General Term Description
–
–

Id. at 9. In addition, EnerNoc assumes all responsibility for installing, operating, and
maintaining the irrigation load control devices, dispatching services as directed by the Company,
recruiting customers, providing customer service, and issuing the irrigation credits. Id. EnerNoc
will be paid based on the average load available for curtailment less any performance shortfall
adjustments during program events. EnerNoc also receives an incentive to optimize load
curtailment during historical peak times. Id. at 10. Participant curtailment amounts, incentives,
and terms and conditions will be between EnerNoc and qualifying customers. Id. Consistent

DECISION MEMORANDUM 4
with existing program structure, customers will be notified the day before program dispatch and
will be able to opt-out of event participation before loads are controlled. Id.
In light of the above, the Company now asks the Commission to approve the EnerNoc
DSM contract and cancel Electric Service Schedules 72 and 72A, effective February 1, 2013. Id.
at 11.
STAFF RECOMMENDATION
Staff recommends the Commission issue a Notice of Application that sets a 14-day
intervention deadline, suspends the proposed effective date, and orders a prehearing conference.
The Company has advised Staff that it concurs with this approach.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application that sets a 14-day
intervention deadline and a prehearing conference, and suspends the proposed effective date?

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