20161011Application.pdf

October 11, 2016
VIA OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472 West Washington
Boise, ID 83702-5983
Attn: Jean D. Jewell
Commission Secretary
RE: CASE NO. PAC-E-16-14
10: 28
I ' • Ii 'BLIC
I i' :···· ·, (~()l.,L~ISSION
1407 W. North Temple, Suite 330
Salt Lake City, Utah 84116
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
REQUESTING A PRUDENCY DETERMINATION ON DEMAND-SIDE
MANAGEMENT EXPENDITURES.
Please find enclosed in the above captioned matter an original and seven (7) copies of Rocky
Mountain Power's Application requesting an order designating its demand-side management
expenses as prudently incurred for 2014 and 2015 program years.
For informal questions related to this matter, please contact Michael Snow, DSM Regulatory
Affairs Manager, at [phone] or Ted Weston, Idaho Regulatory Affairs Manager, at (801)
220-2963.
Sincerely,
~
Bill Comeau
Director, Customer Solutions
Enclosures
Daniel E. So lander, (ISB# 8931)
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone: [phone]
Email: [e-mail]
Attorney for Rocky Mountain Power
FtECEIVED
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER
REQUESTING A PRUDENCY
DETERMINATION ON DEMAND-SIDE
MANAGEMENT EXPENDITURES.
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CASE NO. PAC-E-16-14
APPLICATION
COMES NOW, Rocky Mountain Power, a division of PacifiCorp (the "Company"), in
accordance with RP 052 and RP 201 , et seq., and hereby respectfully applies to the Idaho Public
Utilities Commission (the "Commission") for an order designating Rocky Mountain Power's
demand-side management ("DSM") expenses in the amount of $7,460,715 as prudently incurred
("Application") for 2014 and 2015 program years.
In support of this Application, Rocky Mountain Power states as follows:
1. Rocky Mountain Power is authorized to do and is doing business in the state of
Idaho. The Company provides retail electric service to approximately 75,500 customers in the
state of Idaho and is subject to the jurisdiction of the Commission. Rocky Mountain Power is a
public utility in the state ofldaho pursuant to Idaho Code§ 61-129.
2. In support of this Application respectfully requesting the Commission's
determination that the Company's 2014 through 2015 program year DSM expenditures were
prudently incurred and in the public interest, the Company presents the annual DSM reports for
each year, the results of the program cost effectiveness analysis, and the third-party program
evaluation reports.
APPLICATION OF Page I
ROCKY MOUNTAIN POWER
BACKGROUND
3. The Company has offered a variety of DSM programs to its customers since the
1970s. All of the DSM programs offered by Rocky Mountain Power in Idaho have been designed
to be cost-effective. On March 2, 2006, the Commission approved an enhanced set of DSM
programs and cost recovery of them through Electric Service Schedule No. 191 , Customer
Efficiency Services Rate Adjustment, ("Schedule 191 "), which was applied to customers' bills
beginning May 1, 2006.
4. This Application and the Annual DSM reports are consistent with the
Memorandum of Understanding the Company entered into in Case No. GNR-E-12-01 , and
approved by Order No. 32788 ("MOU"). Pursuant to this MOU Rocky Mountain Power has filed
annual reports with the Commission for program years 2014 and 2015. For convenience the 2014
Idaho Annual DSM report has been provided as Attachment No. 1, its associated appendices are
Attachment No. 2, the 2015 Idaho Annual DSM report is Attachment No. 3, and its associated
appendices are Attachment No. 4 to this Application. These reports followed the format set forth
in the MOU and include: Table of Contents, Introduction, Cost Effectiveness, Program specific
sections, and Evaluations. Program performance, including expenditures, savings and assessments
of cost effectiveness, as well as the balancing account activity associated with Schedule 191 were
also included in the annual reports.
5. During 2014 and 2015, the Company 's DSM portfolio consisted of five1 distinct
programs, offering incentives for a wide variety of energy efficiency measures to the Company's
residential, business and agricultural customers. Agricultural customers can also participate in the
1 Home Energy Reports is a residential behavior based program that began in January 2015. Home Energy Reports is
included in the fi ve distinct programs.
APPLICATION OF Page 2
ROCKY MOUNTAIN POWER
irrigation load management program2. The Company continues to work with customers and the
Commission to provide a comprehensive suite of DSM programs that provide the greatest
opportunity for participation by all customer sectors.
6. DSM programs offered by the Company provide a wide range of services and
financial incentives to assist customers with energy efficiency projects they wished to pursue. The
five DSM programs subject to Schedule 191 in 2014 and 2015 were:
• Schedule 21 -Low Income Weatherization/ Low Income Education
• Schedule 117 -Residential Refrigerator Recycling
• Schedule 118 -Home Energy Saver
• Home Energy Reports (no tariff)
• Schedule 140 -Non-Residential Energy Efficiency (wattsmart Business)
Energy FinAnswer, FinAnswer Express, and Agricultural Energy Services, (non-residential
programs), were consolidated into a single wattsmart Business program effective November 13,
2014, through Case No. PAC-E-14-083. The consolidation served to maximize energy savings and
reduce costs by streamlining program offerings and alleviating customer confusion.
PROGRAM EXPENDITURES
7. The Company requests a Commission determination that the DSM expenditures
totaling $7,460,715, which represents $3,222,115 for 2014 and $4,238,600 for 2015, were prudent
and in the public interest. Expenditures by category are provided in Appendix 3, (Attachment No.
2), of the 2014 Annual Report and Appendix 2, (Attachment No. 4), of the 2015 Annual Report.
2 In 2011 , the Irrigation Load Control program was treated as a system-wide benefit and excluded from Schedule 191.
Performance results were no longer included in the annual DSM reports but were submitted as a confidential document
to the Commission.
3 Order No. 33178.
APPLICATION OF Page 3
ROCKY MOUNTAIN POWER
These expenditures are categorized by program delivery administration, Company administration,
customer and dealer/trade ally incentives, engineering, evaluation, marketing and program
development. The expenditures submitted in this Application represent the activities that took
place during program years 2014-2015 through a year-end cost true-up process.
8. The Company reports its Schedule 191 balancing account annually in the DSM
Annual Reports. For added convenience, the 2014 and 2015 balancing account activity is provided
in Tables 1 and 2 below.
a e -c e u e a ancm• T bl 1 2014 S h d I 191 B I A ccount A .. ctiv1ty
Monthly Program Cash Basis Accnial Bas is
Cost-Fixed Monthly Net Rate Carrying Accumulated Accumulated
Month Assets Accnied Costs * Recovery Charge Balance Balance
Balance as of 12/31/1 $ (908,882 $ (625,565'
Jan-14 $ 199,728 $ (35,032 $ (274,741 $ (789 $ (984,684 $ (736,399'
Feb-14 $ 277,055 $ (97.033 $ 1,184,794 $ (211 $ 476,955 $ 628,206
Mar-14 $ 267 760 $ 1,897 $ (215,906) $ 419 $ 529,227 $ 682376
Apr-14 $ 272,076 $ (11,315 $ (203,781 $ 469 $ 597,991 $ 739,825
Mav-14 $ 170 588 $ 23 832 $ (264 860) $ 459 $ 504 178 $ 669843
Jun-14 $ 325,554 $ (18 826) $ (490,453) $ 351 $ 339,629 $ 486,468
Jul-14 $ 193.932 $ 41276 $ (583,010) $ 121 $ (49,327) $ 138,788
Aug-14 $ 213 804 $ 91181 $ (520,272) $ (169) $ (355 964) $ (76,668'
Sep-14 $ 315.637 $ (22.472) $ (318,779' $ (298) $ (359,405) $ (102,580'
Oct-14 $ 223,462 $ 13,618 $ (243 510' $ (308) $ (379,761) $ (109,319'
Nov-14 $ 224,967 $ 244,026 $ (228,009' $ (318' $ (383,121 $ J31,348
Dec-14 $ 476,261 $ (1),622) $ (247,787) $ (224' $ (154 871 $ 347,975
2014 totals $ 3,160,823 $(2,406,31S) $ (498)
• December 2014 total accrual $ 502,846
Intentionally Left Blank
APPLICATION OF Page 4
ROCKY MOUNTAIN POWER
Table 2 -2015 Schedule 191 Balancing Account Activity
Monthly Monthly Net Cash Basis Accrual Basis
Program Cost-Accrued Rate Carrying Accumulated Accumulated
Month Fixed Assets Costs* Recovery Charge Balance Balance
Dec-14 $ (154,871' $ 347,975
Jan-15 $ 196,397 $ (31,425) $ (256,901' $ (154 $ (215,529' $ 255,892
Feb-15 $ 419,568 $ (75,285) $ (222,120' $ (97' $ (18,178' $ 377,959
Mar-15 $ 411 ,785 $ (373) $ (200,202 $ 73 $ 193,478 $ 589,242
Apr-15 $ 580,982 $ (225,671) $ (207,514' $ 317 $ 567,263 $ 737,356
Mav-15 $ 203,541 $ 223,405 $ (310,098' $ 428 $ 461,134 $ 854,632
Jun-15 $ 486,112 $ (122,743) $ (378,575 $ 429 $ 569,100 $ 839,855
Jul-15 $ 246,092 $ 56,391 $ (628,494' $ 315 $ 187,013 $ 514,159
Aug-15 $ 342,460 $ 97,403 $ (434,222' $ 118 $ 95,369 $ 519,918
Sep-15 $ 451,406 $ (21,308) $ (419,729' $ 93 $ 127,139 $ 530,379
Oct-15 $ 355,845 $ (56,342) $ (277,156' $ 139 $ 205,966 $ 552,865
Nov-15 $ 348,534 $ (54,443) $ (235,459' $ 219 $ 319,261 $ 611,717
Dec-15 $ 352,648 $ 15,300 $ (265,280' $ 302 $ 406,931 $ 714,687
2015 Totals $ 4,395,370 $ (3,835,750) $ 2,182
* December 2015 total accrual $307,756
ENERGY EFFICIENCY SA VIN GS AND COST EFFECTIVENESS
9. The annual energy efficiency portfolio savings achieved through the Company's
DSM programs were 11 ,410 MWh in 2014 and 15,692 MWh for 2015, measured at the customers'
meter.
10. The portfolio was cost effective for each year with a benefit to cost ratio greater
than 1.0 for both the Total Resource Cost ("TRC") and Utility Cost Test ("UCT"). The Appliance
Recycling program was cost effective for both the TRC and UCT in 2014, but was not cost
effective in 2015, with a 0.91 benefit to cost ratio for the TRC. The Low Income Weatherization
program was not cost effective for the TRC or UCT in either year.
11. In Case No. PAC-E-16-04, the Company requested authorization to cancel the
Appliance Recycling program because the program implementer went out of business in 2015, and
analysis indicated operating the program with a new contractor would fail the TRC and UCT cost
APPLICATION OF Page 5
ROCKY MOUNTAIN POWER
effectiveness tests. The Commission approved the Company's application canceling the Appliance
Recycling program effective March 1, 2016. See Order No. 33497.
12. The Low Income Weatherization program was not cost effective from the
PacifiCorp Total Resource Cost ("PTRC") or UCT for both years as shown in Table 3 below. The
PTRC cost effectiveness test included health, safety and repair measures as a dollar of non-energy
benefits for each dollar of cost: $31,575 in 2014 and $23,297 in 2015.
Table 3 -Low Income Weatherization Cost-Effectiveness
Benefit/Cost Test 2014 2015
PTRC (TRC + 10% conservation adder) 0.72 0.48
UCT 0.50 0.35
The Low Income Weatherization program was not cost effective due to multiple factors including
a limited amount of homes served and measures installed, but the primary driver was the reduction
in decrement values calculated in the 2015 Integrated Resource Plan ("IRP"). The most recent
Low Income Weatherization evaluation for program years 2010-2012 calculated a PTRC of 1.34.
The evaluation cost effectiveness included non-energy benefits (health, safety and repair costs and
reduced payment assistance and arrearage) and was calculated using the 2008 IRP decrement for
2010 and the 2011 IRP decrement for 2011 and 2012. The program is currently undergoing an
evaluation for program years 2013-2015 with a published report expected in 2017. In Case No.
GNR-E-12-01 , the Commission initiated a generic case to investigate the cost effectiveness oflow
income weatherization programs. The case resulted in a myriad of Commission approved
recommendations in which the Company has complied with. See Order No. 32788 .
ENERGY EFFICIENCY TAR GETS
13. Provided in Table 4 is a comparison of the Company's energy efficiency portfolio
performance with the Achievable Technical Potential identified in the Company's conservation
APPLICATION OF Page 6
ROCKY MOUNTAIN POWER
potential assessment ("CPA") and the IRP selections over the 2014-2015 period. Consistent with
the Northwest Power and Conservation Council's regional power plans, the Company's CPA
utilizes acquisition ramp rates and assumes that 85 percent of the technical potential is achievable
over 20 years to account for real world constraints around acquisition of energy efficiency
resources. Absent the achievability assumption and ramp rates, all discretionary resources (those
that can technically be acquired at any time) would be available at the start of the planning period,
which is unrealistic from both a planning and acquisition standpoint.
T bl 4 E a e -nerl!V Effi . 1c1ency, A h" bl T h . IP t ti I & IRP S I f c 1eva e ec mca o en a, e ec IODS
Source of Savings Idaho MWh Savin2s (at 2enerator)
2014* 2015**
Achievable Technical Potential 15,696 24,891
Integrated Resource Plan Selections 10,920 13,570
Energy Efficiency Portfolio Performance 12,680 17,414
* Potential from 2013 DSM Potential Study and selections from 2013 IRP Update
** Potential from 2015 DSM Potential Study and selections from 2015 IRP
2014-2015 Total
40,587
24,490
30,094
14. As shown in Table 4, from 2014 through 2015 the Company acquired 30,094 MWh,
at generator, of energy efficiency savings in Idaho exceeding the IRP selections for the same period
of 24,490 MWh. IRP savings are based on assumed typical acquisition rates, whereas actual
program performance can fluctuate from year to year based on factors such as economic
conditions, the timing of large project completions, etc.
PROGRAM EVALUATIONS
15. Evaluations are conducted using best-practice approaches and techniques including
those outlined in the National Action Plan for Energy Efficiency Program Impact Evaluation and
the California Evaluation Framework guides. The Company conducts process and/or impact
evaluations on energy efficiency programs to ensure the ongoing cost effectiveness of its programs
APPLICATION OF Page 7
ROCKY MOUNTAIN POWER
through validation of energy savings and to provide information to assist in management of its
programs.
16. Process evaluations assess program delivery, from design to implementation, in
order to identify bottlenecks, efficiencies, what worked, what did not work, constraints, and
potential improvements. Identifying opportunities for improvement is essential to making
corrections along the way.
17. Impact evaluations determine the impacts ( e.g. energy and demand savings) that
directly result from a program. Impact evaluations also support cost effectiveness analyses aimed
at identifying relative program costs and benefits.
18. Evaluations are based on credible and transparent methods focused on successfully
capturing the savings created by the programs. Evaluations develop retrospective estimates of
energy savings attributable to a program. While retrospective in nature, the information obtained
will be used to inform future potential assessments, plans, forecasts and targets.
19. Copies of the Company's most recent process and impact evaluations for its Idaho
programs can be found at http://www.pacificorp.com/es/dsm/idaho.htrnl or on the CD
accompanying this Application. Each of these evaluations were completed by third party
consulting firms. The most recent evaluations for the Company's Idaho programs have a TRC and
UCT benefit/cost ratio greater than 1.0.
MODIFIED PROCEDURE
20. Rocky Mountain Power believes that a technical hearing is not necessary to
consider the issues presented herein and respectfully requests that this Application be processed
under Modified Procedure, i.e., by written submissions rather than by hearing. RP 201 et seq. The
Company stands ready to present testimony in support of this Application in a technical hearing if
APPLICATION OF Page 8
ROCKY MOUNTAIN POWER
the Commission determines such a hearing is required.
COMMUNICATIONS AND SERVICE OF PLEADINGS
21 . Communications regarding this Application should be addressed to:
Ted Weston
Daniel E. Solander
Michael S. Snow
1407 West North Temple, Suite 330
Salt Lake City, Utah 84116
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
[e-mail]
[e-mail]
In addition, the Company respectfully requests that all data requests regarding this matter be
addressed to one or more of the following:
By e-mail (preferred)
By regular mail
[e-mail]
[e-mail]
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
REQUEST FOR RELIEF
22. WHEREFORE, for the reasons set forth above Rocky Mountain Power respectfully
requests that the Commission approve this Application by: ( 1) issuing an order authorizing that
this matter be processed by Modified Procedure; and (2) issuing a final order designating Rocky
Mountain Power's 2014 and 2015 total DSM expenditures of$7,460,715 as prudently incurred.
APPLICATION OF Page 9
ROCKY MOUNTAIN POWER
DATED this 11th Day of October 2016.
Respectfully submitted,
Daniel E. Solander
Attorney for Rocky Mountain Power
APPLICATION OF Page 10
ROCKY MOUNTAIN POWER