20180817Decision Memo.pdf

DBCISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM:EDITH PACILLO
DEPUTY ATTORNEY GBNERAL
DATE: AUGUST 15,2018
SUBJECT:ROCKY MOUNTAIN POWER'S APPLICATION FOR A PRUDENCY
DETERMINATION OF DEMAND-SIDE MANAGEMENT EXPENDITURES
FOR 2016 AND 2017 PROGRAM YEARS; CASE NO. PAC-E-18-07
On August 10,2018, Rocky Mountain Power applied for an Order establishing that it
prudently incurred demand-side management (DSM) expenditures in 2016 and 2017 of $8,539,263.
Application at 1. Generally, DSM refers to utility activities and programs that encourage customers
to use less overall energy or use less energy during peak usage hours. Rocky Mountain's DSM
programs include: Low Income Energy Conservation Education (Schedule 2l); Home Energy Saver
(Schedule I 18); Home Energy Reports (no tariff); and Non-Residential Energy Efficiency/wattsmart
Business (Schedule 140). t Id. at 3 . Schedule I 17, Residential Refrigerator Recycling was suspended
in November 2015 and cancelled in April2016. Id.
BACKGROUND
The Company declares that it has offered a vaiety of DSM programs to its customers
since the 1970s. Id. at2. In2006, the Commission approved a set of DSM programs and provided
the Company with a cost recovery mechanism. 1d Typically, DSM programs have two parts.
First, the utility designs and implements DSM programs to promote energy efficiency and
conservation, or reduce customer demand during periods of peak demand and/or in times of supply
constraint. Second, utilities periodically report on the effectiveness of their DSM programs and
seek permission to recover the deferred costs of the DSM programs.
I Energy FinAnswer; FinAnswer Express; and Agricultural Energy Services have been consolidated into a
single "wattsmart Business program." See OrderNo.33l78. Also, in 2011, the Company's Irrigation Load
Control program was cancelled and treated as a system-wide benefit. As such, the performance results of
this program are not included in annual DSM reports, but are instead submitted as a confidential document to
the Commission. See Order No. 32760.
1DECISION MEMORANDUM
In Order No. 29976 issued in March 2006, the Commission authorized Rocky Mountain
to establish a DSM tariff rate (or "rider") as a separate line item on customers' bills under tariff
Schedule l9l. The DSM tariff rider is the mechanism used to recover the costs of the DSM
programs. The Company was authorized to defer the costs of its DSM programs until such time as
the Commission finds that the "Company's DSM expenditures and programs are or will be found to
be reasonably and prudently incurred and executed." Order No. 29976 at 6.
THE APPLICATION
A. The DSM Programs
During the period under consideration, Rocky Mountain offered five DSM/energy
efficiency programs. Application at2-3. The programs are summarized below:
Home Enerqy Saver - this program is designed to provide a number of products
and services to customers in new or existing homes, multi-family housing units,
or manufactured homes for customers taking service under Schedules I and 36.
Services and products under this program include insulation, duct sealing, energy
efficient windows, CFL and LED lighting, and other services. Application
attachment I at 15-17.
Low Income Weatherization - this program provides energy efficiency services
through local non-profit agencies to residential customers meeting income-
eligible guidelines. Services are provided at no cost to eligible customers.
Services provided under this program include insulation, furnace repair, air
infiltration, replacement door/windows, and other services. The Company's non-
profit program administrators include the Eastern Idaho Community Action
Partnership and Southeastern Idaho Community Action Partnership. Id. at22.
Home Enerey Reports - this is a behavioral program designed to decrease
participant energy usage by providing comparative energy usage data for similar
homes located in the same geographical area. The report provides the participant
with information on how to decrease their energy usage. Id. at 18.
Low Income Energy Conservation Education - this program targets customers
receiving Low Income Home Energy Assistance Program funds and provides
information about how to better conserve energy and understand their bill. It also
provided customers with measures aimed at furthering those goals. Id. at24-26.
Non-Residential Energy Efficiency - In 2014, commercial and industrial energy
efficiency programs were consolidated into a single portfolio labeled as
v)ottsmart. The wattsmart program is aimed to help commercial and industrial
customers to improve the efficiency in lighting, HVAC, motors, building
envelopes, and other equipment. Id. at27-32.
2DECISION MEMORANDUM
B, The Deferred Expenses
Rocky Mountain asserts that the DSM programs resulted in energy savings in 2016 and
2017. The utility reports that overall the programs were cost-effective. Application at 5. However,
the Company states that its Low Income Weatherization Program was not cost-effective under the
UCT test in either year, but was cost-effective from the PTRC in both years. Id. at 5.
In sum, Rocky Mountain requests authorization to recover $8,539,263 in DSM expenses
from the DSM rider account and asserts these expenses were "prudently incurred." Application at
1. This request included $4,500,332 for expenditures made in 2016, and $4,038,931 in 2017. Id. at
3.
In support of its Application, the Company submitted prefiled testimony, an annual
DSM report for each year, the results of its cost-effectiveness analysis, and the third-party program
evaluation reports. The Company requests that its Application be processed under Modified
Procedure.
STAFF RECOMMENDATION
Staff concurs with the Company's request to process its Application under Modified
Procedure. Staff recommends that the Commission issue a Notice of Application and set a 21-day
deadline for intervention. Once the intervenors to this case have been determined, then Staff
recommends that it convene an informal scheduling conference with the parties to develop a
schedule to process this case.
COMMISSION DECISION
I . Does the Commission wish to issue a Notice of Application and set a 2l -day deadline
for intervention?
2. After the Commission Secretary issues the Notice of Parties, does the Commission
desire that Staff convene
scheduling of this case?
to discuss the appropriate
Pacillo
Deputy Attorney General
PACEl807 dec ep
an informal conference the
JDECISION MEMORANDUM