20100604Comments.pdf

L.W OFFICES OF
W. MARCUS W. NYE
RANDALL C. BUDGE
JOHN A. BAILEY, JR.
JOHN R. GOODELL
JOHN B. INGELSTROM
DANIEL C. GREEN
BRENT O. ROCHE
KIRK B. HADLEY
FRED J. LEWIS
ERIC L. OLSEN
CONRAD J. AIKEN
RICHARD A. HEARN, M.D.
L.NE V. ERICKSON
FREDERICK J. HAHN, III
DAVID E. ALEXANDER
PATRICK N. GEORGE
SCOTT J. SMITH
JOSHUA D. JOHNSON
STEPHEN J. MUHONEN
CANDICE M. MCHUGH
CAROL TIPPI VOLYN
BRENT L. WHITING
JONATHON S. BYINGTON
DAVE BAGLEY
THOMAS J. BUDGE
JONATHAN M. VOLYN
MARK A. SHAFFER
JASON E. FL.IG
RACINE OLSON NYE BUDGE Be BAILEY
CHARTERED
BOISE OFFICE
101 SOUTH CAPITOL
BOULEVARD. SUITE 208
BOISE. IDAHO 83702
TELEPHONE: (208) 39S~0011
FACSIMILE: (208) 433~0167
201 EAST CENTER STREET
POST OFFICE BOX 1391
POCATELLO, IDAHO 83204-1391
TELEPHONE [phone]
FACSIMILE [phone]
ww.racinelaw.net
IDAHO FALLS OFFICE
477 SHOUP AVENUE
SUITE '07
POST OFFICE BOX 50698IDAHO FALLS, 1083405
TELEPHONE: [phone]
FACSIMILE: [phone]
SENDER'S E-MAIL ADDRESS:elo!éraclnelaw.net
ALL OFFICES TOLL FREE
(877) 232-81 01
LOUIS F. RACINE 0917-2005)
WILLIAM D. OLSON. OF COUNSEL
June 4,2010 i;;;
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Hand Delivered
Jean Jewell
IPUC Commission Secretary
P.O. Box 83720
Boise, Idaho 83720-0074
Re: PAC-E-IO-03
Enclosed for filing please find an original and seven (7) copies of the Idaho Irrgation Pumpers
Association, Inc.'s Comments in the above matter.
Sincerely,~~r-
ERIC L. OLSEN
ELO/rg
Enclosures
c: Service List
C:\Users\mlAppData\Lcal\Microsoft\Windows\Tempora Internet Files\ContentOutlook\l7FW85DlJean Jewell 6 4 IO.wpd
Eric L. Olsen ISB# 4811
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
P.O. Box 1391; 201 E. Center
Pocatello, Idaho 83204-1391
Telephone: [phone]
Fax: [phone]
Ri:í'¡:,i.v~-
20in JUN -4 PM 3= l 2
Attorneys for Idaho Irrgation Pumpers Association, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF P ACIFICORP DBA ROCKY MOUNTAIN )
POWER FOR AN INCREASE TO THE )
CUSTOMER EFFICIENCY SERVICES RATE )
)
CASE NO. PAC-E-lO-03
IDAHO IRRGATION PUMPERS ASSOCIATION, INC.'S COMMENTS
IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. ("IIPA"), by and though its
attorneys, hereby respectfully submits the following comments with regard to Rocky Mountain
Power's ("RMP") proposed adjustment to Customer Efficiency Servces Rate or Schedule No.
191.
INTRODUCTION
On Februar 25,2010, PacifiCorp filed an Application with the Commission seeking
authority to increase its Schedule No. 191 from the current 3.72% to 5.85% of retail revenue.
Essentially, the Company asserts that it needs the increase in order to meet expected higher costs
of the overall energy conseration and Demand Side Management (DSM) programs that are
being conducted by the Company in Idaho. Additionally, the increase would help to reduce the
curent accrued deficit balance of$3.5 milion associated with these programs.
The IIP A agrees with the overall concept of the promotion of energy conservation and
DSM programs. Furhermore, the IIP A agrees with the fact that the utilty should be reimbursed
Idao Irrgation Pumpers Association, Inc.' s Comments - 1
for its approved costs in these areas. However, the IIP A disagrees that the Schedule No. 191
rates should be increased at this time.
COMMENTS
The IIPA believes that there should be an opportnity in RMP's pending rate case to
address the cost effectiveness of these programs and more importantly the fuding of at least the
Irrgation Load Control Program ("ILCP"). Depending upon the programs that are approved in
the rate case, as well as the fuding of those programs, the overall futue cost recovery needed
from Schedule No. 191 could drop below existing levels. This is not to say that the accrued $3.5
milion wil not need to be recovered, but that it could be done based upon the present rate leveL.
For puroses of these comments, the IIPA wil only address the treatment of cost recovery of the
ILCP.
The ILCP is unique among many of the energy conseration and DSM programs being
offered/utilized by RMP in Idaho. The ILCP not only has reached 258 megawatts in magntude,
but it is generally available on demand and completely under the control of the RMP. By
comparson, weatherzation, refrgerator recycling and other energy savings, are not as large in
magntude with respect to demand reductions, and their quantification is far more theoretical
than the immediate response that is realized when an irrgation pump is shutoff.
RMP contracted with Quantec to do a study of demand side resources and energy
efficiency programs in 2007. On July 11, 2007, Quantec produced a report entitled "Assessment
of Long-Term System-Wide Potential for Demand-Side and other Supplemental Resources".
With respect to direct load control programs, the study found that the ILCP had a levelized cost
that was half (or lower than half) of that of other direct load control programs such as Thermal
Energy Storage, Commercial Direct Load Control, and Direct Load Control of Air Conditioning
Idaho Irrgation Pumpers Association, Inc.' s Comments - 2
Load. These findings were before the development of the curent curailment programs and
mostly addressed the more static "designated-day" curtailment program that existed at the time.
In looking at the ILCP, it is in a category by itself. Today, it is not only a major program where
RMP has 258 MW (and rising) of curailment at its finger tips, but it has now greatly surassed
the Monsanto interptible load with respect to size. It is the new importance of the ILCP,
compared to that of all the other programs, that calls for special attention in this case and in
RMP's present rate case.
In Attachment 4 to RMP's Application in this case, the 2010 forecast Total Resource
Cost of all programs is $7,649,000. Of this amount $4,300,000 or 56% is associated with the
ILCP. Not only is the ILCP a major par of the RMP's energy efficiency and DSM programs in
Idaho, but it is a major driving force behind the rates in Schedule No. 191. Without recovery of
the ILCP costs in Schedule No. 191 (and absent the present arearage), the Company would be
seeking a reduction in the Schedule No. 191 rates as opposed to an increase.
The IIPA wil be proposing in RMP's current rate case that, like Monsanto, all costs
associated with the ILCP be considered "system" costs and not "jursdictional" costs. By way of
example, the ILCP is reducing the system peak by approximately 250 MW. This is a reduction
at the time of the system peak. This curailment of 250 MW allows the RMP to either forgo the
purchase of the most expensive power during the time of the system peak, or the ability to sell
into a market when sale for resale prices are at their highest. What does Idaho get for that benefit
that is provided to all customers in all jurisdictions-an average system cost benefit that is
closely tied to lower priced and depreciated coal fired power plants. However, the present
jursdictional allocation scheme requires Idaho to pay all of the costs ($4,300,000) to achieve ths
250 MW reduction (plus the credit paid to customers as well). Ths is not the treatment afforded
Idaho Irgation Pumpers Association, Inc.' s Comments - 3
Monsanto. The IIP A does not assume that the change in the treatment of the costs of the ILCP
wil be easy, as all of the other jurisdictions would be more than happy for Idaho to continue to
bare all of the costs of the program, while they enjoy 95% of the benefit-Idaho is only allocated
approximately 5% of the system costs/benefits. Admittedly, there are other programs that other
jurisdictions would like Idaho to support from a cost perspective. The appropriateness of such
claims needs to be reviewed as well. Just because another jurisdiction would like the costs of
their programs covered by others, does not mean that they are on a par with the ILCP or that
other jurisdictions should support such costs.
However, the IIP A believes that the Commission should look at this program from an
Idaho Irgator's point of view and ultimately that ofthe other Idaho customers as well. A ver
simplistic example wil be provided here as this is not the venue where jursdictional allocation
arguments need to be made. An Idaho Irrgator gives up his right to irrgate (or allows the RMP
to curail) up to 52 hours per season. The Irrgator does this for a credit of $30 per kW per year.
There is a cost to this that is obvious, but diffcult to quantify. The cost impacts include reduced
yield and additional labor costs-the Irrgator clearly does not net $30 per kW. In total, ths
credit amounts to approximately $7,500,000 at the present level of paricipation. Because the
present jurisdictional allocation ties ths credit to Idaho, and not the system as a whole, all of the
Idaho customers (Residential, Commercial, Industral, and Irrgation) pay for this cost that brings
a benefit to the entire system. Assuming that the Irrgators are allocated in the cost of servce
study l/3rd of the cost of these credits ($7,500,000/3 = $2,500,000), they wil have been given a
credit of $30, but pay $10 back, for a net benefit of $20 per kW (which mayor may not cover
potential lost yield and additional labor costs).
Idaho Irgation Pumpers Association, Inc.' s Comments - 4
Additionally, the cost of the ILCP that is included in Schedule No. 191 is now expected
to be $4,300,000 in 2010. Because the present jursdictional allocation ties this credit to Idaho
and not the system as a whole, all of the Idaho customers (Residential, Commercial, Industral,
and Irgation) pay for ths costs that brings a benefit to the entire system. Based upon the
present intra-jursdictional allocation scheme, the IIP A would also pay about a 1/3 rd of these
costs as well ($4,300,000/3 = $1,430,000). In total the Irrgators would be given a credit of
$7,500,000 but pay back $3,930,000 ($2,500,000 + $1,430,000) or more than half of the original
credit. Not even addressing the potential lost yields or additional labor costs, this treatment of
Idaho customers for the "system" benefit is simply inequitable.
CONCLUSION
It is not the IIPA's position in this case to change the jursdictional allocation scheme that
is presently in place-we plan to address that in the pending rate case. However, given the need
for a change, we urge the Commission to not increase Schedule No. 191 at this time. By leaving
Schedule No. 191 at the existing level, but removing the cost of the ILCP, it wil be possible to
completely fud all of the remaining energy effciency and DSM programs, while rapidly bring
down the present $3,500,000 in accred balance.
DATED this iday of June, 2010.
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
By ~~;A-~ERIC LŠE:A~~
Idaho Irga ion Pumpers
Association, Inc.
Idao Irrgation Pumpers Association, Inc.' s Comments - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 4.~day of~10, I served a tre, correct and
complete copy of the foregoing documen~ach of the following, via U.S. Mail or private
courer, e-mail or hand deliver, as indicated below:
Jean D. Jewell, Secretar
Idaho Public Utilties Commission
P.O. Box 83720
472 W. Washington Street
Boise, Idaho 83720-0074
jjewell(ßpuc.state.id. us
I Hand Delivery
Ted Weston
Idaho Regulatory Affairs Manager
201 South Main, Suite 2300
Salt Lake City, UT 84111
ted. weston(ßpacificom.com
/E-maillU.S.Mail
Danel Solander
Senor Counsel
201 South Main, Suite 2300
Salt Lake City, UT 84111
daniel.solander(ßpacificorp.com
iJ E-maillU.S.Mail
Benjamin J. Otto
Idaho Conseration League
710 N. 6th Street
P.O. Box 844
Boise, ID 83702
botto(ßidahoconservation.org
J E-mai1lU.S.Mail
.k~~h.ERIC L. OL N T
Idao Irrgation Pumpers Association, Inc.' s Comments - 6