20230224Comments.pdf

DAYN HARDIE ED
DEPUTY ATTORNEY GENERAL e et
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE,IDAHO 83720-0074
[phone]
IDAHO BAR NO.9917
Street Address for Express Mail:
11331 W CHINDEN BVLD,BLDG 8,SUITE 201-A
BOISE,ID 83714
Attorneyfor the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN )POWER'S APPLICATION REQUESTINGA )CASE NO.PAC-E-22-12
PRUDENCY DETERMINATION ON )DEMAND-SIDE MANAGEMENT )COMMENTS OF THE
EXPENDITURES )COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission,by and through its Attorneyof
record,Dayn Hardie,Deputy AttorneyGeneral,submits the followingcomments.
BACKGROUND
On August 17,2022,Rocky Mountain Power,a division of PacifiCorp ("Company")
asked the Commission to fmd it prudentlyspent $10,039,507 on Demand-Side Management
("DSM")in 2020 and 2021.The Company requests its Application be processed by modified
procedure.
On September 14,2022,the Commission issued a Notice of the Company's Application
and Notice of Intervention Deadline.Order No.35530.No one petitioned to intervene.
On November 4,2022,the Commission issued a Notice of Modified Procedure
establishing deadlines for public comments and the Company's reply.Order No.35584.
STAFF COMMENTS 1 FEBRUARY 23,2023
On January 9,2023,the Commission issued a Notice of Amended Comment Deadlines
vacating the deadlines set in Order No.35584 and establishing new deadlines for public
comments and the Company's reply.Order No.35659.
The Company requests a prudency determination on 2020 DSM expenditures of
$5,454,714 and 2021 DSM expendituresof $4,584,793.
The Company reports its DSM programs saved 25,789 megawatt-hours ("MWh")in 2020
and 18,692 MWh in 2021.
The Company's DSM program accrual basis accumulated balance was $1,066,780
overfunded on January 1,2020.On December 31,2021 the Company's DSM program accrual
basis accumulated balance was $465,984 overfunded.
STAFF ANALYSIS
Staff reviewed the Company's Application,DSM Annual Reports,and additional
information provided by the Company.Based on its review,Staff recommends the Commission
approve the Company's request declaring its 2020 and 2021 DSM expendituresof $10,039,507
as prudentlyincurred.
Staff addressed the Company's Energy Efficiency ("EE")portfolio,residential programs,
non-residential programs,demand response programs,avoided cost basis for program
evaluations,and annual reports.The absence of any discussion on other issues should not be
construed as Staff support for the Company's position on those issues.
Rider Balance and Expenses
Staff audited the Company's EE Tariff Rider expenses,which included sampling and
reviewing 142 transactions across all the Company's EE incentives,marketing campaign,
program administration,and labor expenses.Staff verified that expenses were well documented,
and that internal controls appeared to be in place to prevent improper payment of incentives and
to properly record EE Program expenses.See Table No.11 below for a summary of the
Company's EE Tariff Rider revenues and expenses.
I The Company's prudency request for $10,039,507 in DSM expenses actually paid in 2020 and 2021.Table No.1
expenses were calculated based on when a measure was installed.Expenses paid in January 2022 for measures
installed in December 2021 are included as 2021 expenses in the table,but the prudency determination for those
expenses will be determined in a future case.
STAFF COMMENTS 2 FEBRUARY 23,2023
Table No.1:Customer Efñciency Services Tariff Rider Balance
Beginning Balance,as of January 1,2020 -(Overfunded)$(1,605,796)
Tariff Rider Revenue 2020 $(4,594,645)
Tariff Rider Expenses 2020 $5,750,656
Carrying Charge 2020 $(27,712)
Ending Balance,as of December 31,2020 -(Overfunded)$(477,497)
Tariff Rider Revenue 2021 $(4,713,416)
Tariff Rider Expenses 2021 $4,671,716
Carrying Charge 2021 $(5,429)
Ending Balance,as of December 31,2021 -(Overfunded)$(524,625)
Table No.1 shows that as of December 31,2021,the Tariff Rider was overfunded.On
October 1,2022,in Order No.35546,Case No.PAC-E-22-10,the Commission approved an
increase to the Company's Electric Service Schedule 191 -Customer Efficiency Services Rate
("Schedule 191")from 2.25%to 2.5%.Althoughthe EE Tariff Rider balance was overfunded in
that case,the 2.25%Schedule 191 rate was designed to reduce the Tariff Rider balance to $0.00.
Without an adjustment,future DSM expenses would exceed revenue collections over time and
increasing the rate from 2.25%to 2.5%was expected to return the overfunded Tariff Rider
balance to customers by December 31,2024,while continuing to fund the anticipated increased
DSM expenses.Application at 3.
One of the biggest drivers for the Company's request to increase Schedule 191 rates was
a DSM pilotprogram-Wattsmart Battery Demand Response Program-authorizedby the
Commission in Order No.35370.The Company estimated the Wattsmart Battery Demand
Response Program costs would total $1,951,000by the end of 2024.
Energy Savings Portfolio
The Company's EE portfolio achieved 36,380 MWh savings at generationover 2020 and
2021.While collectivelythe portfolio surpassed the Integrated Resource Plan ("IRP")target of
34,780 MWh,the individual year savings are not equally distributed.The 2020 program year
exceeded the IRP target with annual savings of 21,993 MWh,while 2021 savings of 14,387
MWh did not.This decrease in savings is largely due to changes in the Wattsmart Homes
STAFF COMMENTS 3 FEBRUARY 23,2023
program.However,for both years,the Company's portfolio was cost-effective with Utility Cost
Test ("UCT")2 TRÍiOs of 1.25 and 1.68 for 2020 and 2021,respectively.
Residential Programs
The Company states its residential programs captured 7,394,004kWh of energy savings
and was not cost-effective with a UCT of 0.85 in 2020.In 2021,the UCT ratio increased to 1.99
despite a significant decrease in savings,capturing only 5,621,465 kWh.Additional details on
the decrease in savings are discussed in the individual program sections below.
Wattsmart Homes
The Wattsmart Homes program,previously Home Energy Savings ("HES"),is available
for new or existing homes,multi-familyhousing,and manufactured homes.Residential
customers can participate in measures and incentives offered across multiplecategories including
HVAC and lighting.The Company states the Wattsmart Homes program was not cost-effective
with UCT ratios of 0.88 and 0.99 for 2020 and 2021,respectively.In 2020,the Company reports
that the Wattsmart Homes program captured 3,047,841 kWh of savings with over half of those
savings from the lighting measure category.In 2021,the Wattsmart Homes savings decreased to
only 960,073 kWh.Consistent with other utility'sEE programs,this decrease can largely be
attributed to the removal of high-efficiencylighting measures.In 2021,the success of market
transformation efforts and changes to federal standards for lighting led the Company to remove
LED incentives from the program's lighting measures.Staff looks forward to reviewing the
Company's efforts to capture savings in other categories now that high-efficiencylighting
measures have sunset.
Electronics Category
In addition to the reduction in savings from the lighting measures,a significant portion of
the residential savings decrease can be connected to the electronics category3.The 2020
electronics measure category captured as much energy savings as the remainder of the program's
2 The UCT considers cost-effectiveness from the perspective of the utility.The UCT presents as a ratio of the
benefits of avoided supply costs to costs incurred by the program administrator.Any ratio above 1 is cost-effective.
3 The electronics measure category targets energy savings for small electronic devices such as computers,printers,
TVs,and chargers through the use of advanced power strips,smart switches,and smart plugs.
STAFF COMMENTS 4 FEBRUARY 23,2023
offerings with energy savings of 652,260 kWh.In 2021,the Company reports the electronics
category only received two rebates producing 68 kWh of savings.Staff is concerned with the
declining performance of the Wattsmart Homes electronics measure category.Since introducing
the Electronics category in 2018,it has not achieved cost-effectiveness.For the current filing,
the company reports a 0.39 UCT in 2020 and 0.08 UCT in 2021 for the measure category.
Table No.2:Performance Metrics of the Electronics Measure Category Since its Introduction in 2018
Electronics Measure Category Historical Performance
Year Participation Savings (kWh)UCT Ratio
2018 3,132 676,512 0.50
2019 725 156,600 0.61
2020 9,318 652,260 0.39
2021 2 68 0.08
In the Company's previous prudency filing,Staff commented that the Company should
address the cost-effectiveness of the program and demonstrate a path to become cost-effective if
it plans to continue the offering.While the annual reports did not provide details on its efforts,
the Company was able to provide a narrative in its Response to Production Request No.21.The
Company states that it removed advanced power strips measures due to a lack of cost-
effectiveness in mid-2021 and introduced several home energy management systems.Staff is
encouraged by the Company's efforts to manage its measure category but remains concerned
with program performance.Staff expects that if the Company cannot capture cost-effective
savings for its programs and measures,it will sunset the cost-ineffective measures.Staff will
continue to work with the Company to select and implement cost-effective measures during
dedicated DSM meetings.
Realization Rates
Staff is concerned the Company continues to overstate claimed savings for the Wattsmart
Homes program.Since 2014,evaluations of the Wattsmart Homes program have shown savings
significantlyless than those claimed by the Company in its annual reports.While there is a delay
between prudence filings and Evaluation Measurement &Verification ("EM&V")reports,Staff
expects the claimed and evaluatedsavings to align as the Company refines its program.
STAFF COMMENTS 5 FEBRUARY 23,2023
Table No.3:Comparison of Reported and Evaluated Savings Since 2013
Year Report Savings kWh Evaluated Savings Realization Rate
2013 2,512,467 2,689,263 107%
2014 4,864,286 4,031,004 83%
20l5 3,801,426 2,873,324 76%
2016 1,694,153 1,140,037 67%
2017 2,137,201 1,668,788 78%
2018 3,771,635 3,166,917 84%
2019 2,808,414 1,973,582 70%
2020 2,794,621 1,619,960 58%
2021 886,621 --
It is important to ensure that claimed savings generally agree with evaluatedsavings over
time.Significant and continued disagreements between claimed savings and evaluated savings
reduce Staffs ability to support prudence based on reported values,especially for programs or
measures that are marginallycost-effective.Consistent with suggestions for additional annual
report details,Staff recommends that the Company provide detailed descriptions of evaluation
recommendations and other efforts the Company has implemented to address realization rates for
each program in its next prudence filing.
Home Energy Reports ("HER")
The HER is a behavioral program that encourages residential customers to decrease
energy usage by providing them with energy saving tips and comparative data.The program has
shown continued improvement over previous years with the addition of 41,000 participants in
July 2020.The programs savings remained relativelyconstant with 3,947,830 kWh in 2020 and
4,238,790 kWh in 2021.The Company reports the HER program as cost-effective with UCT
values of 2.72 and 10.40 for 2020 and 2021,respectively.Staff is concerned with this sudden
increase in the UCT ratio as the program claimed similar savings and costs.Further discussion
on this topic is presented in the IRP Avoided Cost Basis section.
Low-Income Weatherization ("LIW")
For low-income customers,the Company works with two Community Action Partnership
("CAP")agencies to provide weatherization services:Eastern Idaho Community Action
STAFF COMMENTS 6 FEBRUARY 23,2023
Partnership ("EICAP")and South-Eastern Idaho Community Action Agency ("SEICAA").The
LIW program experienced significant reductions compared to 2019.Program savings,costs,and
the number of homes weatherized by the CAP agencies decreased by approximately 68%from
2019.A detailed summary of the LIW program performance metrics can be found in Table
No.4.The Company reported its LIW program as not cost-effective in 2020 with Pacificorp
Total Resource Cost ("PTRC")4 ÍCSÍ TRÍiO of 0.74 and as cost effective in 2021 with a PTRC ratio
of 4.31.Similar to the HER program,Staff is concerned with the sudden increase in the PTRC
ratio despite claiming similar costs and savings.
Table No.4:LIW Program Performance Metrics
LIW 2020 2021
Homes Serviced 23 27
Claimed Energy Savings (kWh)37,245 35,325
Benefits $24,473 $38,779
Non-Energy Impacts $82,913 $630,561
Costs $145,885 $155,472
PTRC 0.74 4.31
UCT 0.15 0.23
Staff analysis discovered that the primary cause of the increase in cost-effectiveness is
due to a change in the calculation method for the Company's non-energy benefits/impacts
("NEIs"or "NEB").The Company's NEIs consist of quantified,payment-related NEI,
consistent with Order No.32788.Traditionally,NEI for low-income programs are extremely
difficult to quantify;however,the Company supports its NEI values with regular impact
evaluations that include reductions to arrearages and assistance payments.For 2020 and
previous years,these NEIs were added directlyto the PTRC benefits.Staff analysis of the 2021
workpapers discovered that the listed NEI benefits of $41,364 were discounted over the life of
the LIW measure life resulting in benefits exceeding $500,000.This is inconsistent with the
Company's previous method for including NEIs.Staff is concerned that the Company may have
4 The PTRC considers cost-effectiveness from the perspective of the service territory.PTRC presents as a ratio of
energy savings benefits to the expenses incurred for both the utility and customers.The PTRC differs from a
traditional TRC by including a 10%conservation adder to account for unquantifiable non-energy benefits.Any ratio
above l is cost-effective.
STAFF COMMENTS 7 FEBRUARY 23,2023
overvalued the benefits associated with NEI's by discounting them over the measure life of
weatherization upgrades.
During its analysis for the NEI calculation method,Staff also discovered two NEI
values-$111,430and $41,364-thatwere provided and used in the Company's 2021 cost-
effectiveness workpapers.In its Response to Production Request Nos.16 and 18 the Company
provided the supporting documentation for the $41,364 value and stated that the $111,430 value
was an error and was not used in the benefit calculation for the LIW program.However,Staff
analysis confirmed that the Company used the $111,430 value in the 2021 calculations,therefore
double counting NEIs.Despite the error,the impact is minimal in the context of the discounted
$41,364.Staff requested the Company account for the identified NEI error when providing its
updated workpapers.Staff analysis confirmed that the erroneous NEI value was not removed
and was still included in the cost-effectiveness calculations.
Removal of both the discounted NEI value and the erroneous NEI value from the cost-
effectiveness calculation reduces the PTRC to 0.72 using 2021 avoided costs or 0.42 with 2019
avoided costs.While LIW programs historically struggle to be cost-effective,a PTRC ratio of
0.4 to 0.7 suggests the Company's program is performing well relative to other utilities'similar
programs.
Based on the errors described above,Staff believes that the Company did not provide
adequate review of the cost-effectiveness analysis provided by its third-partycontractor.Staff
recommends that the Company provide thorough review of all future third-partydeliverables.
The Company's reviews should include but not be limited to verification of the accuracy of all
input values provided to the third-partycontractor,the appropriateness of calculations used,the
transparency of workpaper calculations,and evaluation of all reporting values provided by third-
party contractors.The Company should compare all of these items to actual program
performance whenever possible and either correct or explain differences in sufficient detail to
address any possible concerns.
Low-Income Education
Consistent with Commission Order No.32788,the Company also provides funding for
conservation education services through the CAP agencies in its service territory.The
Company's education materials come in the form of Energy Savings Kits ("Kits")which are sent
STAFF COMMENTS 8 FEBRUARY 23,2023
to homes that receive Low Income Home Energy Assistance Program ("LIHEAP")funding to
promote energy conservation behavior.While the contents vary year-to-year,each kit contains
easy to install energy saving tools like LED lightbulbs,insulating materials,and thermometers.
While these do produce some energy savings,the Company does not include them when
calculating program performance.
Staff is concerned with several reporting errors for the SEICAA Kit inventory,SEICAA
expenditures,and the EICAP Kit inventory.Staff analysis of the 2019,2020,and 2021 annual
reports discovered $6,750 of unaccounted SEICAA expenses between 2019 and 2020,an
unaccounted lack of SEICAA mail expenses,and discrepancies in both the EICAP and SEICAA
Kit inventories.The Company was able to reconcile the differences in SEICAA expenses and
EICAP Kit inventoryin its Response to Production Request Nos.13 and 14.However,the
Company also stated that SEICAA management changes have caused data tracking issues and
was unable to provide a complete reconciliation for the SEICAA Kit inventory;it was only able
to confirm beginning inventory,and Kits delivered.Staff believes that quality data tracking
processes should function regardless of management changes.These reporting errors in
expenses and Kit inventories suggest the lack of proper data tracking and reporting quality
control within the CAP agencies and a lack of oversight by the Company.The Company
ultimatelybears the responsibility of funds delivered to these agencies and maintaining accurate
mventones.
Staff recommends that the Company audit both agencies'Energy Saving Kit inventories
and expenses from 2020,2021,and 2022 program years.The results of these audits should be
included in the Company's next annual report and any adjustments identified by the audit should
be included in the Company's next prudency filing.The Company's audits should account for
the total amount of LIW education disbursements for the listed years and include invoices for
purchased Kits,invoices for Kits delivered,any additional expenses incurred delivering Kits,
yearly beginning and ending counts of Kits on hand,any Kits accidently damaged,a count of any
unaccounted Kits,the value of unaccounted Kits,any other trackable expenses,and a total of any
unaccountable expenses.Additionally,Staff recommends that the Company use the opportunity
to establish data tracking,reporting,and quality control processes with both CAP agencies and
provide a detailed summary of the changes made in the Company's next prudence filing.
STAFF COMMENTS 9 FEBRUARY 23,2023
Non-residential
The Company's Wattsmart Business program offers energy savings opportunities to
commercial and industrial customers in the Company's service territory through a combination
of incentives and direct install measures.In 2020,the Company reports total program savings
increased 12%compared to 2019,resulting in a total of 16,992 MWh of savings and a UCT of
1.51.In 2021,the program experienceda 43%decrease in energy savings when compared to
2020,capturing just 11,863 MWh of savings.Despite the decrease in savings from 2020 to
2021,the Company reports the program remains cost-effective with a UCT of 1.85.
Demand Response Programs
Irrigation load control
The Company offers an Irrigation Load Control ("ILC")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 early June through
mid-August.Overall,the program provides a valuable reduction of energy on the system,
allowingthe Company to defer higher cost investments that might otherwise be needed to serve
during peak summer hours.
The ILC program administered nine control events in 2020 and 11 events in 2021 with
events ranging from one-hour to five hours.The Company estimates average load reductions at
generation of 68 MW in 2020 and 119 MW in 2021.The Company notes that the ILC is treated
as a system resource and is not included on the Schedule 191 DSM tariff rider.Regardless,the
Company submitted confidential cost-effectiveness calculations in Response to Production
Request No.19.The Company considers detailed cost-effectiveness input metrics as
confidential information and reports the cost-effectiveness of the ILC program on a pass-fail
basis.The Company reports that the ILC passed its cost-effectiveness test for both 2020 and
2021.
In Commission Order No.34970,the Company was directed to track all measurable costs
for the ILC program and outline program metrics in its annual DSM Reports.Althoughthe
Company provides certain aspects of program performance and costs,the Company indicates it
has been delayed in providing detailed data due to employee turnover and follow-on training.
STAFF COMMENTS 10 FEBRUARY 23,2023
Staff recommends the Company continue its efforts to provide the necessary detailed data for full
evaluation of the program's performance and system benefits.
Battery Demand Response
On April 14,2022,Commission Order No.35370 approved the Company's application to
implement a battery demand response pilotprogram.Under this five-year pilotprogram,the
Company will provide incentives to customers for installinggrid enabled batteries to be used in
grid management functions.The program is expected to provide benefits for both the utility and
the customer through load shaping and grid management functions.Staff looks forward to
reviewing the Company's progress on the battery demand response pilotprogram in its next
prudency filing.
Commercial and Industrial Demand Response Program
On August 25,2022,the Company applied requesting authority to implement a
commercial and industrial demand response program.See Case No.PAC-E-22-13.If the
Commission approves the Company's request as proposed,the program will provide incentives
to customers who subscribe load to be curtailed either through advanced notice or real time
dispatch.
IRP Avoided Cost Basis
Staff is concerned with the sudden and dramatic increase in cost-effective programs for
several of the Company's programs between 2020 and 2021.During its review,Staff noted
several programs where the Company reported similar or improved UCT values despite
decreases in energy savings and otherwise relativelyunchanged costs.Staff's analysis
discovered that the 2021 benefit calculations were based on the avoided cost data from the 2021
IRP filed in September 2021.6 Because avoided costs are a fundamental input for cost-
effectiveness calculations,this discovery has the potential to implicate all of the Company's
2021 EE programs.
6 Avoided costs are providedas an output from the Company's IRP process and represent the value of investments
the Company has deferred or delayed through the operation of a DSM program.
STAFF COMMENTS 11 FEBRUARY 23,2023
By using the most recently filed IRP to calculate historical cost-effectiveness,Staff believes
that the Company is inconsistent with its own practices.The Company provides a clarification:
Prior to 2020,the Company would run cost effectiveness for a given year's
annual report using the most current data in lieu of using the data that was
originally used when planning that program year.The Company stopped this
practice in favor of using the same assumptions and avoided costs for both
planning a year and reporting on that year.The purpose of the annual reports is
to reflect how the Company fared against its planning and targets,thus using
the same assumptions and avoided costs for planning and reporting is
appropriate.The purpose of evaluations is to reflect on how programs fare
against current/forward looking data and what actions are necessary to maintain
cost effectiveness.
Response to Production Request No.20
Staff ultimatelyagrees with the Company's statement that annual reports are intended to
measure program performance against the targets set using assumptions and avoided costs in
place at the time of program planning.However,it directlycontradicts the Company's historic
practices and the methods used to calculate cost-effectiveness for the 2021 Annual Report.
Table No.5 demonstrates that for the past two prudency filings,the Company has consistently
used IRP avoided cost data in place at the time of program planning to inform program
performance calculations.Additionally,Staff believes the Company's definition of evaluation
presented above diverges from the Company's historical use of evaluations like impact
evaluations and more closely matches the definition of a forecast.
Table No.5:Timeline DemonstratingOverlapof IRP Filings with DSM Avoided Cost Base
Year 2015 2017 2018 2019 2020 2021
IRP Filing Date Mar.Apr.Oct.Sep.
Prudency Filing
AvoidedCosts
Basis 2015 2015 2017 2017 2019 2021
Staff's analysis verified that the 2021 annual report's cost-effectiveness values are based on
2021 IRP avoided cost data as shown by the agreement of cost-effectiveness values provided to
Staff.By using avoided costs from the most recent IRP,the Company has used an inappropriate
baseline to measure its program year 2021 cost-effectiveness analysis against.It is vitally
important that cost-effectiveness is measured from a consistent and appropriate baseline in order
STAFF COMMENTS 12 FEBRUARY 23,2023
to verify program performance.Based on the large cost-effectiveness increase in the HER
program and other programs that saw increases to benefits despite decreases in energy savings,
Staff is concerned that by using 2021 IRP avoided costs,the Company has overstated the
benefits of its programs.
2021 EE Cost-effectiveness Analysis using 2019 IRP Avoided Cost
In its Response to Production Request No.18,the Company provided 2021 cost-
effectiveness workpapers using 2019 IRP avoided costs to remain consistent with Company
practice.Staff's analysis of these workpapers discovered that when using 2019 avoided costs,
the cost-effectiveness of all of the Company's programs decrease and,with the exception of the
LIW program,is more consistent with the 2020 annual report's cost-effectiveness results.A
summary of the portfolio,sector,and program level cost-effectiveness results for 2020,and 2021
using both the 2021 IRP avoided costs and 2019 IRP avoided costs is presented in Table No.6.
Table No.6:Comparison of Cost-Effectiveness Results
2020 cost-2021 cost-effectiveness 2021 cost-effectiveness
effectiveness results with 2021 Avoided results with 2019
results (UCT)Costs (UCT)Avoided Costs (UCT)
Portfolio 1.25 1.68 1.21
Commercial 1.47 1.85 1.46
Residential 0.85 1.99 0.81
Wattsmart Homes 0.88 0.99 0.66
LIW (PTRC/UCT)0.74/0.15 4.31/0.28 4.21/0.20
HER 2.72 10.40 2.69
Wattsmart Business 1.51 1.85 1.46
Using the 2019 avoided costs,the Company's portfolio level benefits decreased by over
$2,000,000.While remaining cost-effective,specific programs saw significant changes.Most
notably,the residential sector became not cost-effective with a UCT of 0.81.This value is
significantlyless than the reported 1.99 using 2021 avoided costs and is relatively consistent
with the 2020 cost-effectiveness ratio which is based on the same 2019 avoided costs.This
STAFF COMMENTS 13 FEBRUARY 23,2023
decrease in cost-effectiveness can be attributed to similar decreases in the Wattsmart Homes and
HER programs.
The Wattsmart Homes program reports a cost-effectiveness ratio of 0.66 using 2019
avoided costs and is a decrease compared to the 2020 cost-effectiveness ratio of 0.88.Using the
2021 avoided costs,the Company reported the programs cost-effectiveness ratio as 0.99;this
represents a $324,550 or 51%difference in claimed benefits.The larger decrease in benefits is
caused by the HER program,whose cost-effectiveness ratio decreased from 10.40 using 2021
avoided costs to 2.69 using 2019 avoided costs.This reduction corresponds to a $680,525 or
73%difference in claimed benefits.The LIW program did not see a large reduction because
much of its benefit value provided by NEI values.6
Based on comparisons with the 2019 IRP avoided cost cost-effectiveness results and the
inconsistencies with both previous and stated practices,Staff believesthat the Company has
overstated the benefits of its EE portfolio by over $2,000,000,resulting in the residential sectors
reporting as cost-effective.However,these programs would not be cost-effective using 2019
IRP avoided costs.Staff recommends that,when calculating the cost-effectiveness of its
programs for annual reports,the Company use the IRP avoided costs in place at the time of
program planning consistent with historical practice and practices stated in Response to
Production Request No.20.Staff notes that this recommendation relates specifically to the cost-
effectiveness analysis of historical program performance and does not extend to program
planning.Consistent with its current practice,Staff believes that the Company should continue
to plan programs using forecasts based on best available data (i.e.,most recently filed IRP).
When doing so,the Company should make note of large increases or decreases in avoided costs
that may affect the cost-effectiveness of future programs.
Annual Report
During its review of the 2020 and 2021 Annual Reports,Staff would appreciate
additional context and detail surrounding the Company's programs in certain areas.Staff
recognizes that the Company has recently made changes to its annual report format and
6 This is discussed in greater detail in the LIW section of this document.
STAFF COMMENTS 14 FEBRUARY 23,2023
appreciates its effort to produce a concise report.However,the annual reports must continue to
provide the context and detail necessary to support the prudence of the Company's programs.In
addition to specific recommendations throughoutStaff's Comments,Staff has outlined several
suggestions that will provide an informative and transparent report while minimizingthe burden
on both the Company and Staff in Attachment A.Staff will work with the Company improve the
Company's annual reports.
STAFF RECOMMENDATION
Based on its analysis Staff recommends the Commission issue an order:
1.Approving the Company's DSM expenses of $5,454,714 in 2020 and $4,584,793
in 2021 as prudentlyincurred;
2.Directing the Company to provide detailed descriptions of evaluation
recommendations and other efforts the Company has implemented to address
realization rates for each program in its next prudency filing;
3.Directing the Company to provide thorough review of all future third-party
deliverables;
4.Directing the Company to conduct audits of both LIW agencies'Energy Saving
Kit inventories and expenses from 2020,2021,and 2022 program years,and
provide the results of the audit in the Company's next prudency filing;
5.Directing the Company to establish data tracking,reporting,and quality control
processes with both CAP agencies and provide a detailed summary of the changes
made in the Company's next prudency filing;
6.Directing the Company continue its efforts to provide the necessary detailed data
for full evaluation of the ILC program's performance and system benefit;and
7.Directing the Company to use avoided costs in place at the time of program
planning for the purpose of calculating the cost-effectiveness of historical
programs.
STAFF COMMENTS 15 FEBRUARY 23,2023
Respectfully submitted this day of February 2023.
Dayn Hardie
Deputy Attorney General
Technical Staff:Jason Talford
Laura Conilogue
Rick Keller
i:umisc/comments/pace22.12dhjjtlerk comments
STAFF COMMENTS 16 FEBRUARY 23,2023
I nt rod uct ion
During its review of the 2020 and 2021 Annual Reports,Staff would apprecate additional
context and detail surrounding the Company's programs in certain areas.Staff recognizes that
the Company has recently made changes to its annual report format and appreciates the effort to
produce a concise report.However,the annual reports must continue to provide context and
detail necessary to support the prudency determination of the Company's expenditures.In
addition to more specific details presented as part of larger recommendations,Staff has outlined
several suggestions that will provide an informative and transparent reporting while minimizing
the burden on both the Company and Staff.
Portfolio Level PerforrnanceSection
Provide a high-levelnarrative describing the results of the Company's efforts to address
previously identified concerns,any new challenges identified during the program year,
and the Company's plans for addressing future concerns.
Provide a graph of portfolio level historical savings data
o Provide commentary identifying long term trends,when necessary.
Provide a table comparing program performance metrics such as expenditures,energy
savings,and cost effectiveness of program year to the previous year.
Provide Rider balancing account for the program year
Program Description
Provide additional detail on measure categories offered by each program.Describing:
o how they provide benefits to customers;and
o how incentives are provided.
Program Activity Section for Each Program
Provide a narrative describing the results of previous Company efforts or changes,any
new challenges identified by evaluator recommendation or others,and the Company's
plans for addressing future concerns specific to the given program.
Provide sub-sections on items with significant impact or history,when necessary.(i.e.,
removal of lighting measures,follow up on program specific Commission orders,items
from DSM meetings,etc.)
Changes Made Through Flexible Tariff
Provide a table detailing incentive changes made throughthe flexible tariff.
o Should include measure,old incentive,new incentive,and effective date.
Provide sub-sections detailing important Staff feedback or key supporting documentation
for specific changes,when necessary.
Attachment A
Case No.PAC-E-22-12
Staff Comments
02/23/23
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 23rd DAY OF FEBRUARY 2023,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF,IN
CASE NO.PAC-E-22-12,BY E-MAILING A COPY THEREOF,TO THE
FOLLOWING:
TED WESTON EMILY WEGENER
ROCKY MOUNTAIN POWER MICHAEL S SNOW
1407 WEST NORTH TEMPLE STE 330 ROCKY MOUNTAIN POWER
SALT LAKE CITY UT 84116 1407 WN TEMPLE STE 320
E-MAIL:[e-mail] SALT LAKE CITY UT 84116
[e-mail] E-MAIL:[e-mail]
[e-mail]
DATA REQUEST RESPONSE CENTER
E-MAIL ONLY:
[e-mail]
SECRETARY
CERTIFICATE OF SERVICE