20190227final_order_no_34255.pdf

Office of the Secretary
Service Date
February 27,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO.PAC-E-18-12
OF ROCKY MOUNTAIN POWER TO )DECREASE ELECTRIC SERVICE )SCHEDULE 191-CUSTOMER EFFICIENCY )ORDER NO.34255
SERVICES RATE )
On November 9,2018,Rocky Mountain Power ("Company")filed an Application
seeking authorization to decrease the collection rate applied to customer bills for energy efficiency
measures in its Schedule 191 -Customer Efficiency Services Rate Adjustment ("Schedule 191").
On November 29,2018,the Commission issued a Notice of Application and Notice of Intervention
Deadline setting an intervention deadline of December 19,2018,and suspending the Company's
proposed effective date of January 1,2019.Order No.34198.On January 17,2019,the
Commission issued a Notice of Modified Procedure,which set a comment and reply period.Order
No.34230.Now,the Commission issues this Order approving the Company's Application.
BACKGROUND
The Company has offered Demand Side Management ("DSM")programs to its
customer since the 1970s.Since 2006,the Company has recovered its program costs from
customers through Schedule 191.The rate has routinelyfluctuated over the years.In 2006,the
Schedule 191 rate was established at 1.5%.Order Nos.29952,29976.In 2008,the rate was
increased to 3.72%.Order No.30543.In 2010,the rate increased further to 4.72%.Order No.
32023.In December 2010,the rate was decreased to 3.4%.InterlocutoryOrder No.32151.In
2012,the rate was further decreased to 2.1%.Order No.32606.In March 2016,the rate was
increased to its current rate of 2.7%.Order No.33491.
THE APPLICATION
The Company states that as of September 30,2018,the balance in its account for energy
efficiencymeasures was over-collected by $2.1 million.The Company proposes to decrease the
collection rate under Schedule 191 from 2.70%to 2.25%.The Company estimates that lowering
the collection rate to 2.25%will draw down the over-collected account over a three year period.
The Company estimates that the proposed change would decrease the average residential
customer's bill by about $5 per year.
ORDER NO.34255 1
COMMENTS
A.Commission Staff
Commission Staff recommends the Commission approve the Company's Application.
Staff Comments at 3.Staff believes the new rate will align Schedule 191 revenue and DSM
expenses.Id.at 2.Staff recommended a modest decrease to the Schedule 191 rate to the Company,
such as the decrease proposed in this Application,rather than a larger decrease that would lower
customers'rates more dramatically initiallybut require an increase in rates before 2021.Id.Staff
notes that the proposed decrease would be the smallest percentage change in Schedule 191 rates
since the inception of the rates.Id at 3.Staff also states it "continues to encourage the Company
to pursue all available cost-effective methods of DSM,even if costs exceed projected expenses."
Staff also determined that the Company properly applied the revised rate across customer classes
in its Application.Id
B.Idaho Conservation League.
The Idaho Conservation League ("ICL")states it "generallysupports using a multiyear
timeframe to align DSM expenditures and revenues."ICL Comments at 1.ICL also states it
supports Rocky Mountain's goal to better align DSM revenue and expenditures while gradually
reducing the over-collected balance.Id.However,ICL recommends the Commission defer the
Company's request until after the conclusion of Rocky Mountain's 2019 Integrated Resource Plan
("IRP")case.ICL acknowledges that current revenues slightly exceed current expenses but also
points out that the Company's analysis shows increasing DSM targets going forward."Our
concern is that Rocky Mountain's forecast calls for increasing levels of DSM achievement while
forecasted DSM budgets remain flat."Id.at 1-2.ICL points to language in previous Commission
Orders that encouraged increased marketing and outreach efforts for DSM programs,highlighted
the positive benefit-to-cost ratio of DSM programs,and found DSM to be an effective means to
delay the construction or acquisition of higher cost generation resources.Id at 2,3 (citing to
Commission Order Nos.34224,33491).Additionally,ICL recommends the Commission
"encourage Rocky Mountain to increase the energy education funding above the current $25,000
annual amount."Id at 2-3.ICL states its strong support for additional investments in energy
education funding to expand participation across all energy efficiency programs.Id
ORDER NO.34255 2
C.CommunityAction PartnershipAssociation of Idaho.
The CommunityAction Partnership Association of Idaho ("CAPAI")recommends the
Commission deny the Company's Application and resolve DSM funding levels after the
Company's 2019 IRP is completed.CAPAI Comments at 2.CAPAI states it agrees with ICL's
comments.Id CAPAI points to Commission Order No.34224,in which the Commission
recommended additional action to increase customer participation in DSM programs and states,
"Any such increased participation will,of course,require additional funding."Id CAPAI states
that its concerns lie particularlywith whether fundingfor the Low Income Weatherization Program
would be adequate if costs rise.Id at 1-2.CAPAI also expresses support for a multiyear
framework for balancing revenues and expendituresunder Schedule 191.Id.at 2.
D.Rocky Mountain Power Reply Comments.
On February 14,2019,the Company filed reply comments in response to ICL and
CAPAI.The Company states there is no reason to delay a decision on the Schedule 191 rate until
the IRP is completed.Reply Comments at 2."While the IRP helps inform and set targets for
energy efficiencyachievements,it does not drive the results."Id.The Company also states that
the Schedule 191 rate does not influence the amount of DSM pursued.Id.The Company describes
the DSM balancing accounts as a reimbursement mechanism for prudently incurred DSM
expenditures and that it "does not impact the level of DSM the Company will pursue."Id at 3.
The Company reiterates that the Schedule 191 rate adjustment is designed to decrease the over-
collected balance over three years.Id Additionally,the Company states it disagrees with ICL's
recommendationto increase energy education fundingabove the approved amount,and that "local
agencies have struggled to use the current level of funding."Id at 4.The Company states that
allowing the balancing account to remain over-collected is not in the public interest and does not
fulfill the balancing account's purpose.Id at 3.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§61-502 and 61-
503.The Commission is empowered to investigate rates,charges,rules,regulations,practices,
and contracts of public utilities and to determine whether they are just,reasonable,preferential,
discriminatory,or in violation of any provision of law,and to fix the same by order.Idaho Code §§
61-502 and 61-503.
ORDER NO.34255 3
The Commission has reviewed the record,includingthe Application,the comments of
Commission Staff,ICL,and CAPAI,and the reply comments of the Company.Based on our
review,we find it reasonable to approve the Application.As Staff notes,this will be the smallest
percentage change in the Schedule 191 rate since the inception of the schedule.The change will
help to align revenues and expendituresover three years,a goal supported by all commenters.We
decline ICL and CAPAI's request to wait until after the Company's 2019 IRP is complete to
examine the collection rate.As the Company states,the IRP helps to inform the level of DSM the
Company will pursue,but it does not mandate a result.Further,the Company avers that it will
"continue to pursue all cost-effective DSM to acquire energy savings targets,regardless of the
balancing account status ...."Reply Comments of Rocky Mountain Power at 4.We find that
the change represents a reasoned and gradual approach that continues to encourage cost-effective
DSM programs while reducing customer bills.
ORDER
IT IS HEREBY ORDERED that the Company's Application to reduce its Schedule
191 rate from 2.70%to 2.25%is approved,effective March 1,2019.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order with regard to any
matter decided in this Order.Within seven (7)days after any person has petitioned for
reconsideration,any other person may cross-petition for reconsideration.See Idaho Code §61-
626.
ORDER NO.34255 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this ¿7
day of February 2019.
PAUL K LLAN ,PRESIDENT
KRËTINERAPER,JOMMISSIONER
ERI ANDER N,,NIMIS R
Diane M.Haman
Commission Secretary
I:\Legal\ELECTRIC\PAC-E-18-12\PACEl 812_final order_ej
ORDER NO.34255 5