20210222Comments.pdf

EDWARD JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BARNO. 10446
! -. i.;-!\I;L.i-!' .'i. "t .-" i { L'*'
. i:,)'? PH 3:39
Street Address for Express Mail:
I 1331 W CHINDEN BVLD, BLDG 8, SUITE 2OI-A
BOISE,ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN
POWER'S APPLICATION FOR A PRUDENCY
DETERMINATION ON DEMAND SIDE
MANAGEMENT EXPENDITURES
CASE NO. PAC.E-20.11
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission ("Staff'), by and through its Attorney
of record, Edward Jewell, Deputy Attorney General, submits the following comments.
BACKGROUND
On August 28,2020, Rocky Mountain Power, a division of PacifiCorp ("Company")
filed an application seeking a Commission order finding that Rocky Mountain Power prudently
spent $9,634,576 on demand side management ("DSM") in 2018 and20l9. The Company
reports its DSM programs saved 17,663 MWh in 2018, and2l,354 MWh in 2019. The
Company's DSM expenditures were $4,766,097 for 2018 and $4,868,479 for 2019.
On October 16,2020, the Commission issued aNotice of Application and Notice of
Intervention Deadline. Order No. 34813. No parties intervened.
The Company uses its energy efficiency rider to fund programs for approximately 84,000
customers in eastern Idaho. The Company offers four energy efficiency programs for its
residential, business, and agricultural customers. Programs offered to the residential customers
are the Low-Income Weatherization/Low-Income Education (Schedule 2l), Home Energy Saver
STAFF COMMENTS FEBRUARY 22,2021
)
)
)
)
)
)
1
or "Wattsmart Homes" (Schedule 118), and Home Energy Reports (no tariff). The Wattsmart
Business (Schedule 140) is the energy efficiency program offered to business customers and
agricultural customers. The Company also offers an irrigation load management program
focused on demand response which is covered in its DSM Annual Reports ("Annual Reports")
but is not subject to energy efficiency tariff riders.l The Company's DSM program savings,
expenditures, cost effectiveness, and overall performance are outlined in the 2018 Annual Report
and the 2019 Annual Report.2
STAFF ANALYSIS
Staff reviewed the Company's Application, DSM Annual Reports, and additional
information received during its audit of the Company's DSM expenditures. Based on its review,
Staff recommends the Commission approve the Company's request to designate its DSM
expenditures of $9,63 4,57 6 in 201 8 and 2019 as prudently incurred.
Rider Balance and Expenses
Staff audited the Company's DSM expenses and determined that the Company
documented expenses correctly and that the Company's DSM rider expenses appear to be
prudent. See Table No. 1 below for a summary of the Company's rider revenues and expenses.
Table No. 1: Customer Efficiency Services Tariff Rider Balance
2018 2019
Beginning balance - overfunded3
Tariff rider revenue
Carrying charges
DSM expenses
Ending balance - overfunded
$ 1,127,251
5,142,442
19,433
(4,747,062)
$ 1,541,064
4,491,050
33,527
(4,988,861)
$ 1,541,064 $ 1,066,780
I See Order No. 32196: Idaho's share of program cost will be shifted from the Company's tariff rider to base rates
for the Irrigation Load Control Program.
2The 2018 Annual Report is available at
https://www.pacificorp.com/content/dam/pcorp/documents/en/pacihcorp/environment/dsm/idaho/2018 ID-DSM A
nnual Report_Apoendices.pdf and the 2019 Annual Report is available at:
https://www.pacificorp.com/content/dam/pcorp/documents/en/pacificom/environment/dsm/idaho/2019-ID_DSM A
nnualReport 4-20-20.pdf
3 The beginning balance for 2018 does not include the $9,210 adjustnent to decrease the balance that the
Commission approved in Case No. PAC-E-I8-07. This adjustment was included in 2018 DSM expenses.
STAFF COMMENTS FEBRUARY 22,20212
In Case No. PAC-E-18-l2,the Commission approved a decrease to the Company's
Customer Efficiency Services Rate from 2.7Yo to 2.25yo, effective March | , 2019 . Order
No. 34255. As expected, this rate decrease lowered tariff rider revenues for each of the final
l0 months of 2019 compared to 2018 levels, and reduced the overfunded tariff rider balance.
Energy Savings
The Company's energy efficiency portfolio achieved 43,264 MWh savings at generation
over 2018 and2019, failing to achieve the Integrated Resource Plan ("[U"'; target of 46,010
MWh. Notably, in 2018 the energy efficiency portfolio fell 15% below the IRP energy savings
target. It is unclear why the Company did not achieve its 2018 IRP target. The portfolio also
failed the Utility Cost Test ("UCT") in20l8 at 0.94. The portfolio showed significant
improvements in 2019, exceeding its IRP target and achieving a UCT of 1.09. See Table No. 2
below for a summary of the programs' energy savings and UCT.
Table No.2: Rocky Mountain Power's Idaho DSM Portfolio
Metric 2018 2019
Savings (at customer meter)17,663 MWh 21,354 MWh
Savings (at generation)19,595 MWh 23,669 MWh
IRP target (at generation)22,950 MWh 23,060 MWh
Utility Cost Test (UCT)0.94 1.09
Residential Programs
The Company's Residential Portfolio was cost effective from the UCT perspective (UCT
of 1.06 in 2018 and a 1.07 in 2019) when excluding the Low-Income Weatherization program.
When including the Low-Income Weatherization program, the Residential Portfolio is not cost
effective with a UCT of 0.89 in 2018 and 0.85 in20l9.
Low-Income Weatherization/Low-Income Conservation Education (Schedule 21)
For low-income customers, the Company works with two Community Action Partnership
("CAP") agencies to provide weatherization services, Eastem Idaho Community Action
Partnership ("EICAP") and South Eastern Idaho Community Action Agency ("SEICAA"). The
Company reported its Low-Income Weatherizationprogram as cost effective in both years, with
STAFF COMMENTS FEBRUARY 22,2021J
a PacifiCorp Total Resource Cost Test ("PTRC") of 1.39 in 2018 and 1.13 in 2019.4 However,
the reported savings have not yet been independently verified through a third-party Evaluation,
Measurement, and Verification ("EM&V") study. The number of homes weatherized by the
CAP agencies increased from 64 in2018 to 7l in 2019, and the program costs increased34o/o,
resulting in an overall decline in the cost effectiveness in20l9 compared to 2018, as displayed
in Table No. 3 below.
Table No.3: Low-Income Weatherization Program Results
Low-Incom e Weatheruation 2018 2019
Homes serviced 64 7l
Claimed energy savings (kwh)82,868 89,208
Benefits $83,240 $88,510
Non-energy benefits $264,589 $288,259
Costs $255,771 $341,665
PTRC (TRC + l0 yo conservation adder)1.39 1.13
UCT 0.33 0.26
In the Company's previous DSM prudency case, Case No. PAC-E-18-07, the Company
reported the Low-Income Weatherizationprograms were cost effective in2016 and2017 from
the PTRC perspective. In November 2020, ADM Associates, Inc. ("ADM") completed the
2016-2017 Low-Income WeatherizationEM&V Report and concluded that the program was not
cost effective, with an overall PTRC of 0.82 for 2016-2017.s The report found a significant
reduction in evaluated savings-163,296 kWh per year compared to the Company's claimed
gross savings of 271,409 kwh per year for both program years-for arealization rate of
approximately 60 percent. Because the Company's reported savings for 2018 and2019 have yet
to be verified, Staff is concerned that the progftlm will not be cost effective when verified
a Order No. 32788 in GNR-E-12-01 outlines how the Company calculates cost effectiveness for Low-Income
programs. The PTRC test is the TRC test plus a l0% conservation adder.
sldaho Low Income Weatherization Program Evaluation, Measurement, & Verification Report 2016-2017 at38
available ar https://www.pacificorp.com/content/dam/pcorp/documents/en/pacificom/environmentidsm/idaho/2016'
17 PacifiCorp_Low_lncome Weatherization Reoort ID FINAL clean.odf (lastvisitedFebruary 17,2021).
4STAFF COMMENTS FEBRUARY 22,2021
savings are known. In a meeting with Staff in December 2020, the Company said it will handle
future evaluations by moving to a "real-time" feedback evaluation that will work with evaluators
in concurrence with the program delivery, as well as assess performance of the projects andlor
processes for the DSM programs. Given the length of time EM&V reporting can take, Staff
believes the Company's decision to move forward with "real-time" evaluations should improve
the Low-Income Weatherization program and provide the Company with the most up-to-date
results for its cost-effectiveness tests in the Company's next prudency filing.
In addition to the Low-Income Weatherizationprogram, the Company contributes
$25,000 annually to low-income conservation education. Those funds are split between the two
CAP agencies in its service territory, with EICAP receiving $16,000 annually and SEICAA
$9,000 annually. The CAP agencies provide tips on how to conserve energy and provide energy
efficiency kits to low-income customers who receive Low-Income Home Energy Assistance
Program ("LIHEAP") funds. While these services may provide energy savings, the Company
does not conduct cost-effectiveness tests on this program.6 However, the expenses for the
program are included in the cost-effectiveness test for the program's entire energy effrciency
portfolios. The EICAP has had a growing carryover of funds each year, with a 2019 ending
balance of $47,883, while SEICAA ended 2019 with zero funds to carry over into 2020.
In the Company's previous DSM prudency case, Case No. PAC-E-I8-07, the
Commission encouraged the Company "to explore the need for and possibility of fund sharing
between the two CAP agencies." Order No. 34224 at 6. Similarly, in the Company's 2016-2017
Low-Income WeatherizationEM&V study, ADM recommended the Company'oconsider
rebalancing the allocation of funding across implementation agencies to address unmet demand
in Eastern Idaho Community Action Partnership's service area."1 The Company addressed these
recommendations in its most recent DSM update meeting with Staff in December 2020, stating
that a program manager will work with both EICAP and SEICAA to determine funding need and
rebalance funding allocation. Staff will monitor the low-income programs for future fund
sharing between the two CAP agencies.
6 GNR-E-12-01, Order No .32788, Att. A (Staff Recommendation stating, "As with other education programs in
which energy savings are often very difficult to determine, the [conservation education] programs should not be
subjected to standard cost-effectiveness tests like the TRC and UCT.")
T Idaho Low Income Weatherization Program Evaluation, Measurement, & Verification Report 2016-2017 at38
available ar https://www.pacificorp.comicontent/dam/pcorp/documents/en/pacificorp/environment/dsm/idaho/2016-
17 PacifiCorp-Low Income Weatherization-Report-ID-FlNAl-clean.pdf (lastvisitedFebruary 17,2021).
5STAFF COMMENTS FEBRUARY 22,2021
2018 Claimed Savings (2018 Annual Report)3,771,635 kWh/yr (at site)
2018 Evaluated Gross Savings (2017-2018 EM&V)3,166,917 kWh/yr
2019 Claimed Savings (2019 Annual Report)2,808,414 kWh/yr (at site)
2018 Electronics Evaluated Gross Savings (2017-2018 EM&V)676,512 kWh/yr
2019 Electronics Claimed Savings (2019 Annual Report)156,600 kWh/yr (at site)
Home Energt Savings/Wattsmart Home (Schedule 118)
The Wattsmart Home progftrm, also called Home Energy Savings, is available for new or
existing homes, multi-family housing, and manufactured homes. Residential customers can
participate in multiple measures and incentives offered across multiple categories, e.g., HVAC
and Lighting. Overall, the Wattsmart Home program was cost effective in both years with a
UCT of 1.13 in 2018 and 1.11 in 2019. Application at 6. The 2018 Annual Report claims
significantly higher kWh savings at site than reported in 2019. However, following the
completion of the 2017-2018 Wattsmart Home Program Evaluation prepared by ADM,8
evaluated savings in 2018 were more in line with the Company's claimed savings in 2019, as
shown below:
Table No. 4: Wattsmart Home Annual Savings
The significant drop in Wattsmart program savings in20l9 coincides with the drop in the
Electronics measure savings, as displayed in Table No. 4 above. In 2018, the Company's
marketing team supported two main initiatives for the Wattsmart program. l) promoting its
smart thermostat incentive and2) offering a free advanced power strip. These were the only
items included in the Electronics category that year. The Company distributed 3,132 electronic
units in 2018 and 725 electronic units in20l9 to residential customers. That decrease in
distributed units is reflected in the drop in kWh savings in 2019. Since introducing the
Electronics category in 2018, it has not achieved cost effectiveness, with a 0.5 UCT in 2018 and
0.61 UCT in20l9. Staff recommends the Company address the cost effectiveness of the
category and demonstrate a path to cost effectiveness if it plans to continue the category.
sFinal Evaluation Report for PacifiCorp wattsmart Homes Program in Idaho, Program Years2017-2018 available at
https://www.pacificorp.com/content/dam/pcorp/documents/en/pacificom/environment/dsm/idaho/wattsmart_Homes
Program Evaluation-2O I 7-20 I 8.pdf (last visited February 17 ,2021).
STAFF COMMENTS 6 FEBRUARY 22,2021
The Company had significant increases in cost associated with the lighting measure in
2}lg,spending$397,274in20l9afterspending$175,731in2018. Theincreasemadelighting
the Company's most expensive residential measure, accounting for 49%o of the total Wattsmart
Home progftrm costs. Notably, in20l9 the Company incurred an increase of $214,974 in the
program delivery costs for lighting. With the increased expense came a decrease in cost
effectiveness, with the measure decreasing to a 0.79 UCT from 0.89 in 2018. Staff encourages
the Company to specifically address the increased program delivery costs, evaluate other areas
for improvement, and discuss with stakeholders ways to make lighting cost effective going
forward. The lighting industry has shown significant strides and market adoption for energy
efficiency measures over the last several years. Constant adjustments, adoption, and removal of
the various measures offered are necessary for making measures and programs cost effective
going forward.
Home Energt Reports
Home Energy Reports ("HER") is a behavioral program that encourages residential
customers to decrease energy usage by providing them with energy saving tips and comparative
data via email or postal mail. The Company switched vendors from OPower to Bidgely in 2018.
This change had significant upfront costs that markedly lowered the program's cost
effectiveness. However, removing the initial costs would have made the program cost effective
in 2018, and the program was cost effective with significantly increased participation in 2019, as
shown in Table No. 5 below:
Table No. 5: Home Energy Reports Cost Effectiveness
20lg 2018 without
initial fees
$ (29,460)
0.82
12,669
2019
Net benefit
UCT
Customers at year end
$ 60,540
1.86
12,669
$ 80,441
2.03
18,876
Ignoring startup or one-time fees entirely when evaluating cost-effectivenoss results
would not be appropriate, but amortizing those one-time expenses over two years, 2018 and
2019, would show that the Bidgely-run HER program was cost-effective.
Unlike other DSM measures, the Company claims savings for the HER based on single-
year energy savings. That means the Company does not assume that customer behavioral
7STAFF COMMENTS FEBRUARY 22,202I
changes will persist over several years, as it does with other measures such as lighting or
appliances. Staff feels this conservative approach to claiming savings is appropriate for this
program, as participant savings tend to decrease when customers stop receiving reports.
The Company has also increased the number of customers participating in the HER
program, adding 6,000 customers from the end of 201 8 to the end of 2019, as shown in Table
No. 5 above. The opt-out rate for customers was less than lYo in both years. The additional
customers contributed to a l2%o increase in total energy savings for the program. Staff
appreciates the Company's active management of this program.
Non-Residential Programs
Wattsmart Business (Schedule 140)
Total non-residential program savings increased 5Yo ftom 2017 to 201 8, resulting in a
total of 11,006 MWh of savings and a UCT of 1.04 as reported in the 2018 Annual Report.
Following multiple program changes and adjustments in 2018, including restructuring the
lighting retrofit incentives, adding prescriptive inigation incentives, and adjusting cool roof
measures, the Wattsmart Business program experienced a37%o increase in energy savings in
2019 while also increasing its UCT to 1.25. While the Small Business Direct Install ("SBDI")
program had reduced savings, as discussed below, the Company reported a significant increase
in savings in the Irrigation and Energy Management measure categories accounting for 47%o of
the Company's Wattsmart Business savings in20l9.
In its 2018 Annual Report, the Company recognized its struggles with the SBDI program
despite recording an energy savings increase of more than30Yo in 2018. The Company states
that "increased savings targets combined with deeper market penetration and increased product
costs due to Chinese tariff regulations resulted in a much more challenging effort to serve the
small business communily." 2018 Annual Report at29. To increase cost effectiveness and
energy savings, the Company increased customer "up to" co-pays to 50Yo from25Yo and
increased the maximum incentive amount from $5,000 to $7,500 per site. However, after these
adjustments, the SBDI program experience d a 44% decrease in customer participation in 2019 .
Overall, 1,146 MWh savings were installed at customer sites for a total utility cost of $504,695
which was not cost effective with a0.75 UCT in 201,9. The program had a slight increase in cost
effectiveness from 2018's 0.72UCT. Staff applauds the Company for their work with
STAFF COMMENTS FEBRUARY 22,20218
implementing energy efficiency measures in small businesses and believes the Company has
shown continuous dedication in improving the cost effectiveness of the program.
Cadmus is currently evaluating the Wattsmart Business program for 2018 and 2019 and
is projected to publish a report by the first quarter of 2021.
Irrigation Load Control
The Company offers an Irrigation Load Control program designed to balance customers'
energy usage during peak summer hours. Participating customers receive an incentive for
curtailment of their electricity usage during dispatchable events. EnerNOC administers and
manages this demand response program, which runs from the first week of June through the
middle of August. Overall, the program provides a valuable reduction of energy on the system,
allowing the Company to defer higher cost investments that might otherwise be needed during
peak summer hours.
In 2018, the Inigation Load Control program administered 1l control events for 4 hours
each, and the Company estimates an average load reduction of 103 MW at generation for those
events. ln20l9, the program did not administer any control events due to low energy prices.
The Company does not track and report many aspects of the Irrigation Load Control
program and does not provide a cost-effectiveness calculation. See Response to Production
Request No. 13. Staff recommends the Company track all measurable costs and savings for the
Inigation Load Control program and outline these metrics in the Company's future Annual
Reports.
Idaho Stakeholder Meetings
In the Company's previous DSM prudency case, Case No. PAC-E-I8-07, Staff requested
that the Company schedule two meetings per year with Staff to discuss DSM programs. Since
that time, the Company has scheduled two meetings with Staff per year, which have been
informative and productive.
STAFF RECOMMENDATIONS
Staff recommends that the Commission issue an Order approving the Company's DSM
expenses of $4,766,097 in20l8 and $4,868,479 in20l9 as prudently incurred.
STAFF COMMENTS FEBRUARY 22,20219
Respecttully submitted this 2?) auyof February 2021
Deputy A General
Technical Staff: Brad Iverson-Long
Taylor Thomas
Rick Keller
Rachelle Farnsworth
i:umisc/comments/pace20. 1 lejblrkrftt comments
STAFF COMMENTS 10 FEBRUARY 22,202I
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 22ND DAY OF FEBRUARY 2021,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF" IN
CASE NO. PAC.E-}}-II, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:
TED WESTON
EMILY WEGENER
MICHAEL SNOW
ROCKY MOUNTAIN POWER
1407 WEST NORTH TEMPLE STE 330
SALT LAKE CITY UT 84I16
E-MAIL: [e-mail]
emily. wegener@pacifi corp. com
DATA REQUEST RESPONSE CENTER
E-MAIL ONLY:
datarequest@paci fi corp.com
michael.snow@paci fi corp.com
SECRETARY
CERTIFICATE OF SERVICE