20111102Ottens Stipulation Testimony.pdf

Bra M. Pudy
1 Attorney at Law
BarNo. 34722 2019 N. 17th St.
3 Boise, ID. 83702
[phone] (Lad)
4 [phone] (Fax)
bm p u rdVillh Q.m a ì I.('orn
5 Attorney for Petitioner
Communty Action Parership
6 Association of Idao
7
RECEIVED
zon ~mv -2 Pti 4= LiLi
BEFORE TH IDAHO PUBLIC UTILITIES COMMISSION
8 IN TI MATTR OF TH APPLICATION
9 OF PACIFICORP DBA ROCKY MOUNTAIPOWER FOR APPROVAL OF CHAGES TO
10 ITS ELECTRC SERVICE SCHEDULES
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) CASE NO. PAC-E-11-12
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COMMTY ACTION PARTNRSHI ASSOCIATION OF IDAHO
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DIRCT TESTIMONY OF
TERIOTTNS
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DIRCT TESTIMONY OF TERI OTTENS 1
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I. INTODUCTION
Plea state your nae and business addrss.
My nae is Ten Otens. I am the Policy Dirtor of the Communty Action Parnership
Assoiation ofIdao headquaerd at 5400 W. Frain, Suite G, Boise, Idao, 83705.
On whose behalf are you testifyg in ths proceding?
The Community Action Parership Assoiation of Idao ("CAP AI") Board of Dirctors
asked me to present the views of an expe on, and advocate for, low income cusomers 0
Rocky Mounta Power ("Rocky Mounta" "Compay").
Pleae descnbe CAPAI's organtion and the fuctions it pedorms, relevant to its
involvement in ths cas.
CAP AI is an assoiation of Idao's six Communty Action Parerships, the Communty
Council of Idaho and the Canyon County Organzation on Agig, Weathenzation and
Human Serces, all dedicated to promoting self-sufciency thugh reoving the causes
and conditions of pover in Idao's communties.
Wht are the Communty Action Parerhips?
Communty Action Parerhips ("CAPs") ar pnvate, nonprofit organtions that fight
pover. Eah CAP has a designated service ara Combing al CAPS, every county in
Idao is served. CAPS design their varous progrs to meet the unique need of
communties located withn their respve servce aras. Not ever CAP provides all of
the followig serces, but all work with peple to promote and support incread self-
sufciency. Progr provided by CAPS include: employment prepartion and dispatch,
education assistce child car, emergency foo, seor indepedence and support,
clothg, home weathenzation, energy assistce, afordable housing, heath car access,
and much more.
Have you tetified before ths Commission in other proedings?
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Yes, I have testified on behalf of CAP AI in numerous cases involvig, among others,
Rocky Mounta Idao Power, and AVISTA, and Unite Water ofIdao.
II. SUMY
Pleas sumar your testimony in ths cae?
Fir CAP AI, for the reasns mentioned herin does not support and ha declined to join
in the proposed settement executed by other paries to ths proceedig and curently
pendig before the Commssion by way of motion and stipulation. The seement rases
numerous concern for CAP AI includig the magtude and frequency of rect general
rate case filings, the combintion of gener rate increes with increasing cost
adjusent (revenue stability) mechansms, the dangers inernt in the fruent use of
"black box settlements," and whether the interest of residential cusomer, paicularly
those who are or will soon beome low-income, have been adequately addressed through
a procedur that lacks trarcy. Second, I will prent CAPAI's position on fuding
for Rocky Mounta's low-income weaenztion assistce progr ("LIWA").
Finally, I will respnd to the Company's position on Low-Income Conservation
Education.
Ar there any exhbits to your testimony in ths case?
No.
ID. CURNT STATE OF POVERTY
Are the concern and the positions you hold in ths proceedg limte stctly to the
interests of Rocky Mounta's low-income cusomer?
In the past, the anwer to that question would be an obvious and simple yes. But, as
everyone is well aware, we are curently expenencing one of the most severe economic
cnses in our naton's history. One of the many consequences of ths is tht the ras of
citien who quaify as "low-income" ar swellng. Pover rates in Idao have nsen
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from 12.6% in 2000 to 14.4% in the 2010 census figues representig an additiona
62,00 Idao citins suvig under the Feder Pover LeveL. Simultaeously, federa
fudig of progrs designed to assist low-income customers are being reduced or
entiely elimted includig the termnation of AR i which provided a substtial, but
tempora, boost in feder low-income weathenon fuds. The backlog of
housholds in Idaho eligible for low-income weathenztion is far too great for AA to
have even come close to elimnatig.
iv. PROPOSED SETTLEMENT
A. Overvew
Would you pleas identify the reasns that CAP AI declined to join the settlement
propose in ths ca?
As with another recent gener rate cae settlement, 2 the propose settlement stipulation
in ths ca seems to addrss the issues and objecves of all pares except CAP AI and
low-income cusomers. CAPAI is concerned about Rocky Mountan's rapidly nsing
rates, the frquency at which genera rate cass are being filed, the increasing use of
"black box" settlements, combined with the effects of revenue stbility mechansms, the
prssur and signficance of havig multiple filings simultaeously pendig before the
Commssion, includig genera rate cases for the thr largest electrc utilities and for
Idaho's largest invesor owned public water utliif and a separte fiing by Rocky
Mounta contending tht its LIW A progr is not cost-effecve.4
In addition to raidly nsing utility rates, the economy sems to be slipping into
ression, unemployment is skyketing, and feder assistce prgr for low-
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i The ~American Recovery and Reinvestment Act."
2 Case No. IPC-E-I1-08.
3 United Water of Idaho; Case No. UWI-W-II-02.
4 Case No. PAC-E-II-13.
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income cusomers ar being reduced or elimnated puttg vulnerle low-income
cusmers directly in the path of a pedect storm. In spite of ths, the seement
agment fails to include an increase in Rocky Mounta's low-income weathenzation
progr (referr to herein as "LIW A"). CAP AI simply could not justfy joing in yet
another black box settlement agment resultig in yet another rate increas without any
offsettg provision for low-income customer.
Does ths mean that CAP AI opposes every identifiable element of the proposed
settement?
Not necessaly. CAPAI's decision to not sign the settement in whole or in par was
cery not a decision made lightly. There ar cert asts of the settlement tht ar
of obvious, positive value frm CAP AI's perspetive, such as the fact tht the requested
non-net power supply cost ageed upon ar less than reuested and that the residential
schedule 1 cusomer charge will reain at its curent level of $5.00. In a vacuum, such
compromises are obviously of benefit to low-income cusomer who pay those raes and
charges but CAPAI, like every other par, assessed the proposed settement tag into
considertion the totaity of everg it conta, as well as what it lacks. Furerore,
CAP AI does not begi an anysis of any requested rate increase with the presuption
tht some degre of rate increase will ultimately be grted. Thus, perhaps a more
jusifiable rate increase in ths case would be considerbly less th stipulated to, perhaps
none at alL. Regaress, for reans tht I will explai in greater deta, CAP AI cae to
the conclusion tht agreeing to the overal selement as proposed would not be in the bes
inte of low-income cusomer or residential cusomers on the whole.
B. CAP AI'S Evolvg Role
Ar there paricular circumstces that you believe mae a genera rate cas such as this
25 proing of signficant conce to CAP AI?
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In my opinon, the present cas, along with the simultaeously pedig genera rate cases
of Idao Power and A VISTA, highight senous events ocurg on not jus a state or
nationa scale, but globally. The Commssion is obviously awar, as are all Amencans,
of the mounting economic problems face by all sectors of soiety. The curent
pendency of genera rae cas for all thee of Idao's lares electrc utities and Idao's
larest reguated water utility,S as well as Rocky Mounta's LIW A evaluation cae
claimig that the Company's LIWA progr is not cost-effectve,6 combined with the
problems I have referred to, could well be unprecedented. Many residential cusomers
who are slightly above the low-income thhold as defied for the purse of receivig
feder and stte benefits in Idao such as LIHEAP, ar rapidly slipping below that
theshold, quaifing them as low-income. Furerore, may existg low-income
cusomers have yet to avail themselves of governenta and utility assistace programs
such as LIW A but eventuly will, espeially if the economic cnsis continues or spirals
fuer downwar and the cost of electrcity increas. Thus, the importce of every
low-income progr, such as Rocky Mounta's LIWA, continues to increas.
Wht role do you see CAP AI filling in terms of its appece before ths Commssion
given what you have descnbe?
Firs, unike in may other sttes, it should be noted that ther is no regular interenig
par to Commssion proeedings who rents, exclusively, the interests of non-low
income residential customer. Whle the Commion Sta cery stves to seek a fai
balance takg residential interests into considertion when it taes its positions in any
given proing, Stas legal mandae, as with the Commssion, reuis tht it do so
for al paies, including the utility.
5 United Water of Idaho; Case No. UWI-W-11-02.
6 Case No. PAC-E-11-13.25
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As the percentage of Rocky Mounta's residential cusomers who quaify as low-
income incras, CAP AI's involvement in progs before th Commssion expands
in depth and scope. Low-income assistce resour ar alrey sady inufcient to
meet the needs of the poor. Rapid expaion of the ran of the poor without
commenste incree in asistce is of obvious concern to CAPAI. Many oftoday's
non-low-income residential cusomers are tomorrow's por. Thus, while CAPAI's
mandate is to see and reresent the interest of low-income cusomer, we must remain
aware th ths parcular population is rapidly expading and, unorttely, will include
customers who do not yet quaify as low-income. Thus, CAP AI submits that it is the
closest thg tht Idaho has to a conser advocte for residential cusomer at ths time.
C. Effec of Simultaeous Filgs Problematic for Settlement
Dos the ting of the th pendig elecc genera rate cases and the LIW A evaluation
cas cause any parcular problem that CAP AI wishes the Commssion to be aware of?
Yes. As discused thughout my testiony, there is curntly pedig a very
problematic sitution for CAP AI based on the fact tht Rocky Mounta's LIW A
evaluation case wa filed shortly before not only Rocky Mounta's gener rate case, but
simar cas for Idao Power and A VISTA.
How has ths scnao proven to be "problematic" for CAP AI?
Rocky Mountain's LIWA evaluaon case wa fied in late Apnl of ths year. The
Compay's application was, appantly, the culnaon of the cost-effectiveness
evaluation of LIWA it had promised for some tie but was completely unexpeted in
te of its natu and the relief sought. Rocky Mountain fred its application in a
highy unusual maer sekig authority to ceas fuer evaluations on the basis tht
LIWA is not cost-effective and will never satisfy trtional cost-benefit tests. In
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seemig contriction, Rocky Mounta asked the Commssion to, nonetheless, approve
LIW A as a pa of the Compay's overal DSM portolio.
In what maer was Rocky Mounta's application unexpeted?
By the tie Rocky Mounta filed its application, it was known to all that Rocky
Mounta Idao Power and A VISTA intended to soon fie gener rate cas. Casting
LIW A into such doubt imediately pnor to fiing its own rate case, as well as the others,
was certy not somethg that CAP AI anticipated. Furermore, a curory review of
the CADMUS stdy filed in support of the application reveaed th it was bas on a
paltr amount of sapling data reached incomprehenible conclusions, and seemed
facially invalid.
How did the filing of Rocky Mounta's LIWA evaluation cas afect ths rate cas?
CAP AI ha fully intended to intervene in the thee iment rate cases and sek
additional LIW A fudig for all th utlities including Rocky Mountan. By
chacterzig its own progr as not being cost-effective, Rocky Mounta did not
exactly do itself any favors. From CAP AI's stdpoint, the rafications were
immedately obvious. With all thee of Idao's largest electc public utlities set to file
gener rate cas, as well as United Water, it was obvious tht the resources of the
Commssion, Sta and CAP AI would be sttched to their very limts. Furermore, the
fact tht the LIW A evaluation case was not noticed until nearly July and a comment
deadlie set for the end of September didn't help mattrs.
Would you pleas identify the specific procedur problems ths causd CAP AI?
The LIW A case cas a shadow over the legitiy of all low-income weatherzation
progrs in the stte makg settlement negotiations conducted durg ths pa sumer
quite awkwd. Regardless of the fac tht Rocky Mounta's application and supporting
stdy will likely prove to be completely without mert, it wa reasnable to assume that
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Idaho Power and A VISTA might expeence unease at the prospct of supplementing the
fudig of a program tht ha ben caled into queston as to its pruency. The fiing was
not likely to put Sta at eas either.
Are you suggesting that Rocky Mountain should not have filed its applicaton at all?
Not at alL. The Company was under an obligation to evalua its DSM progrs and the
stdy was long overdue. The lack of care taen to properly evaluate LIW A causd
unecessa concer and procedur chalenges.
Are there other aspets to the simultaeous pendency of the multiple cas?
Yes. Although the A VISTA ca was the last of the the electrc rate cases filed, it was
the fi scheduled for settlement negotiations. Sta might have had legitiate reasons
for th, but CAP AI's pnmar focus was to bnng Idao Power's LIW A fuding level,
which ha not ben increased since its 2003 rate cas, into party with the other utilties.
Ths made settlement with A VISTA fi diffcult. In any event, it appear that even if
the propose settlement ageements and their sty-out provisions are ultiately approved,
the sae scenao of multiple rate caes pendig might occur agai in a year and a half or
so. Of grater concer is the fac that the curnt rate cases do prsent an opportty to
shore up the LIW A fudig levels of all the utities. The tig of Rocky Mountan's
LIW A cas has causd a chilling effect on obtang that effect though settlement
compelling CAP AI to tae the issue of LIW A fuding, as well as other, to hearg.
D. Currnt Trends of Rate Case Filgs and Settlements
Wht parcular components of the rate incree propose in the settlement does your
teimony address?
As the Commssion is well aware, CAP AI tyicaly does not have sucient ficial
mean to reta expert witnesses to analyz, and provide testony for, the gamut of
25 components that compnse any given rate increa. CAP AI has histoncally limted its
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scope of issues to very few low-income specific issues, such as LIW A fudig, rate
design minimum cusomer chage, etc.
Is CAP AI expandig its tritiona scpe of issues in ths procding?
To a limited extnt, yes. Ths is necessitated by severa factors including the curent
economic cnsis, the unprecedente spate of genera rate cases and LIW A evaluation
proceedigs curently pending before the Commssion, the cumulative impact that
frequent genera rate case filings by Idao's the largest electrc public utilities ha ha
on residential and pacularly low-income cusomers, the fact tht those utiities seem
incrasingly shielded by varous mechansms tht stbilize their eags puttg them in
a relatively advantageous position in the economy but have shifted the buren of nsk to
rapayers and fily, the fact tht all of the other pares ag to sele yet another
generl rate case using a "black box" settement tht does not specify a rate of retu and
allocating the proposed rate increase in a unform petage spread across customer
classes without fi tesing the validity of a unform rate sprea thugh the hearg
process.
Do you posses any expese in analyzg either revenue requirement or allocation
among cusmer classes for utity ratemakg purse?
No, I do not possess expertise in the aras of utility ratemakg, includig revenue
reuiment issues or rate spred issues. I do have exprtse in the peeptions and
reties of life for low-income customers and the burden tht ever-increain utility bils
poses for those cusomers. It is in tht spirt tht I offer my opinons.
In light of your sttement, is CAP AI tang any speific position on revenue reuirement
issues?
Agai not in the techncal se. I believe tht Sta always conducts a very thorough
25 anysis of speific revenue requirement issues. CAP AI generly supports the specific
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issues rased and positions taen by Stabut notes tht Stas settlement position in any
ca is obviously the result of compromise. It is entily possible that had every revenue
requiement issue identied in ths case by Stabeen litigated the outcome might have
ben a lesser revenue requiement and rate increase than setted upon.
Given that you do not purrt to have technca expertse in the speifics of ratemag,
wha points do you wish to addss regarding ratemakg issues?
I offer an opinon with respet to cert fudaenta pnnciples applied to the maner in
which rates have ben set as of late. I offere more speific opinons in my testony in
the Idao Power genera rate case, but believe doing so is less jusified for Rocky
Mounta beause the Commssion resolved many ratemakng issues for the Company
jus ths yea in Order No. 32196 issued in Rocky Mounta's 2010 gener rate case.7
The Table of Contents alone in Order No. 32196 is two pages long listig a vast ary of
techncal, ratemakg issues tht were reolved. It gives CAP AI a grter sense of ease
when issues have reently been litigated before and resolved by the Commssion.
Wht then ar the fudamenta pnnciples you've referrd to then?
CAPAI is concerned about the relatively recent trnd of Idao's the elecc utlities to
fruently file applications seekig signficant rate incrases. Rocky Mounta for
example, fied gener rate cases in 2005, 2007, 2008, 2009, 2010, and 2011. Whle not
all of those cass necessaly resulted in a genera rate increase, Rocky Mountan, in
respns to CAP AI discvery reuest No.4, sts tht its base taff rate for the
residential class ha increas 25% since 1989 and 22% since the year 2000 alone.
What incrases have been made to Rocky Mounta's LIW A fudig since its inception?
Rocky Mounta has increas its LIW A fudig only twce in the pas1 year from
$75,000 in 1989 to its curnt level of $300,000 ordered by the Commssion ths year.
25 7 Case No. PAC-E-I0-07.
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The most recent increae of $150,000 was ordered by the Commssion, over the
Compay's objecton, in Rocky Mounta's 2010 genera rate case.s Whe LIWA is
obviously of tremendous importce to CAP AI, one mus remember tht even if LIW A
fuding increas were incrased by the sae percentae as every Rocky Mounta rate
increase, LIW A is a progr tht, due to its extmely limted fudig, impats only a
frtion of the Company's low-income customers.
Are there other concern you have about frquent gener rae cass?
Ther are sever, including the fact tht it ca result in situtions such as tht curently
pending where there ar severa rate cass being processed simultaeously. Not only
does ths sttch the resours of Sta, the Commssion, and the pares quite th, it
placs considerable demad on CAPAI's limted resources. Furermore, it cres a
sense of overwelmng despai on the par of low-income customers whose abilty to
simply pay for life's necessities continue to plumet whle their utlity bils skyocket.
Thoug "stay-out" provisions ar oft negotiated as a result of rate cas settements,
they tyically las only a year or two and it goes without sayig that the non-utilty
setting pares give up somethg of value in exchange for them.
Wh other ratemag pnnciples applicable to ths cae concer you?
Though CAP AI acknowledges that "black box" settlements ca be a useful tool under the
nght circumstces, they se to have beome the rue, not exception. It simply does no
sit well with may if not most reidential cusomers, espialy low-income, when they
lear that their electrc utilty has obtaed yet another substtial incre thoug a
confdential selement process. Those customers with the sophistication necessa to
try anyze the te and conditions of a rate cas selement will liely be distbed by
ths lack of trparency.
8 Case No. PAC-E-I0~07.
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Ar there other ascts of black box settements tht trouble CAP AI?
Without the benefit of ainng out ratemakg issues in the cour of a public proding,
the potential for distr and uneae increas as settlements ar bas on increasingly
ste data Ths can involve anytng from rate of re to rate sprea, the latter of
which is of parcular concern for CAP AI. Recent black box settlements have tyically
included a unform percentae rate sprea among customer classes, even when the utility
in question's cost of serice stdy shows tht some classes are being largely subsidied
by other. Though it vares, the residential clas is oftn shown to be payig more than
its cost of seice. Regardless of the subjective natue of cost of servce stdies, ths
trnd towad deferrg needed rate sprad corrtions to the fu does little to engender
confdence in ths opaque process.
Are you suggestg that the Commssion never approve black box settements in ths case
or the fu?
No. I simply wish to offer one point of view suggestg tht ths form of rate cae
resolution should not become an automatic default position for the sae of reachig
settlement and avoiding litigating a genera rate case, in whole or in par before the
Commssion.
E. Revenue Sharig Mechanisms Exacerbate Foregoing Concerns
How does Rocky Mounta's power cost adjusent mechasm (ECAM facor into
your testony?
My limited knowledge is tht the ongi of cost adjusent mechasms ca be found
durg extended penods of extrd drught durg the i 990s leading Idaho Power
to seek and the Commssion to approve a mechansm tht would avoid the need for that
utility to file frquent "drougt surharge" cass durg ties of high power supply costs
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whle shag with ratepayers the beefits of lower power supply cost resultig from
thgs as basic as weather and maket forces.
Ar you contending tht mechasms such as Rocky Mounta's ECAM should be
elimted?
Absolutely not. But I am pointig out why these tys of mechasms exaerbate the
effect tht rapidly increaing rates have on low-income ratepayers. It is my
underding that before Idao's PCA was first approved, electrc utlities often went
extended penods of time between genera ra cas. A PCA allows utilities to forgo
filing genera rate cass beaus of simple varations in power supply costs, even durg
peods of extended drought or nsing costs of non-hydr power supply such as coal costs
and off-system maket pnce of purchas power. Ths should sem to be the effect on
Rocky Mounta as well by vire of its ECAM. Though tht parcular cost adjustment
mechasm ha not ben in plac for as long as Idao Power's, Rocky Mountain appear
to be in a pattern of filing genera rate cas ever year. The curt Rocky Mountan
proposed rate increase is basd in large par on increased base power supply costs. Thus,
frm the stadpoint of low-income cusomer, rapidly increasing bae rates combined
with ECAM adjustments tht incree their bils is confin and compoundig. It seems
to me th the ECAM and al other revenue stabilty mechansms provide greater
assurce to utility's than to their cusomer whch one could argue amounts to nsk-
shiftg. Whether ths is fuly facored into any given utilty's authonzed retu is
diffcult to discer.
Wht effect has ths ha on low-income cusomer?
Low-income cusomer, due to a lack of resources, have relatively limted abilty to
contrl their consumption and their bils and constitute the most vunerble customer b
to incrasingly higher rates. For these customers, the LIW A progr is curntly the
DIRCT TESTIMONY OF TERI OTTENS 14
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only viable mean to reuce their electrc bils and, to a limted extent, offset some of the
frquent rate increes grte to Rocky Mounta.
V. LIW A FUDING
A. Overvew
Wht is CAP AI's proposa regardin Rocky Mounta's LIW A progr in ths case?
CAP AI proposes tht Rocky Mounta's LIW A fuding level be incre to the amount
necessar to bnng the Company into party with AVISTA's fudig level on a per capita
basis.
Isn't it tre tht the Commssion reently doubled Rocky Mounta's LIW A fuding
level?
Yes. Rocky Mounta however, was histoncay investing such a sma amount of
capita into its LIW A progr tht the recent doubling should be put into proper context.
The facts and recommendations set fort in my Idao Power testony apply equaly to
ths ca if adjused for the spifc facts peent to Rocky Mounta's progr.
Would you pleas sumare how CAP AI amved at its positions in the the general rate
cass concerng the issue of LIW A?
When CAP AI firs leared tht there would likely be a nearly simultaeous fiing of all
the major electrc utilities in Idaho, it began formulatg a set of objectives for its
parcipation in those proings. Dug th process, it was realize that
notwthstdig the fact tht Rocky Mountain was recntly order to increas its LIW A
fuding, A VISTA was stil fuding approximtely 25% more th Rocky Mounta and
over 200% more than Idao Power. CAP AI ha ongily intended to seek additiona
LIW A fuding frm A VISTA to stop the widenig gap between need for LIW A and
available fuding. CAP AI aderes to and advoctes severa principles in matters before
ths Commssion. One of those pnnciples is that of party or, simply put, basic fairness.
DIRCT TESTIMONY OF TERI OTTENS 15
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Becau of the problematic tig of the thee genera rate cass, as well as the order in
which Sta notice settlement discussions, CAP AI detered th considenng the
circumtaces, the objective ofbnngig the LIWA fudig levels of the thee utilities
into relative paty outweighed obtag grater fudig from A VISTA.
Couldn't CAP AI have sought both objectives?
Yes, but beuse A VISTA was noticed for settlement fist, any increas in A VISTA's
fudig would necssitae even larger increass in the fudig of Rocky Mountain and
Idaho Power to achieve party. CAP AI submits tht paty applies to ths issue in several
respets. Firt, there is no logical reasn for the thee utiities to fud at signficantly
differnt levels. The evidence prsented by CAP AI over the year, and presubly par
of the basis for Commssion ruings, demonss that ther exist such a sizeale gap
between need and resources for all thee utilities, that there is certnly no nsk of over-
fuding LIW A in that sense. CAP AI believes tht it was more importt to focus on
bnngig Rocky Mounta and Idao Power into line with AVISTA's fuding. Ths
party is needed to treat both the utilties' sharholders with relative equaity as well as
their low-income cusomer who need the assistce that LIW A offer. It is argubly
discnmtory to allow large dispaties in LIW A fudig to contiue. Thus, CAP AI
ag to join the A VISTA settlement, but has made clear frm the outt that it intends
to seek party in fudig.
How did AVISTA's pe capita fudig level reach such a higher level th the other two
utilities?
A VISTA agd to nearly double its fuding frm $465,000 to $700,00 though
settlement approved by the Commssion in Cas No. A VU-E-lO-Ol. As stted earlier,
Rocky Mountain's fudig ha only ben increaed twce in 21 year and was at an
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unjusfiably low level when it was doubled from $150,000 to $300,000 by Commission
Order No. 32 i 96 in Cas No. IPC-E-10-07 issu Febru 28 of ths year.
How do the curnt fuding levels of the thee utilties compae now?
A VISTA fudig is curently the highest pe capita and is more th 200% higher than
Idao Power and roughy 25% higher th Rocky Mountan Power.
Plea explai how you arved at ths conclusion?
I divided the tota progr fuding by the number of each utlity's Idao electc
residential cusomers. The customer numbes wer obtaed from each utility and is the
most reent data I ha at my disposa when I made these caculations. To the extent that
there exists a more accurte cusomer count, CAP AI would obviously prefer that figu
for comparson purses. A VISTA fuds at $700,000 and ha 104,609 Idao electrc
cusomer for a per capita level of $6.69/cusomer. Rocky Mounta Power fuds at
$300,000 and has 56,430 Idaho electc cusomers for a per capita level of$5.32. Idaho
Power fuds at $1.2 milion and ha 391,759 Idao electrc cusomers for a pe capita
level of$3.06.
Would you pleas explai why prolonged, substtial disparty beee the th electrc
utilities' LIWA progrs is not fai, jus and reasnable?
If ther is substtial fuding dispaty between the th utilities, then cusomers of thos
utilities ar either being treated preferntially or discinated agait. Because the costs
of low-income weathenztion progr are passed on to ratepayers, there exist a
legitiate concern about whether rates are fai, jus and renable, at least to the extent
that they ar afeced by LIW A fuding.
Are there other considerations tht conviced CAP AI to join the recent A VISTA
settlement in Cas No. A VU-E-I1-01?
DIRCT TESTIMONY OF TERI OTTENS 17
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There were several. The consideration most pertent to ths cae is the fact tht
A VISTA agee to increas its consrvation education progr by 25% increasing it
from $40,000 anualy to $50,000. Incidentaly, Rocky Mounta contiues to
stnuously resist any attempt to even contiue its conseration education progr, let
alone incre its fudig.
Would you please sumar exactly wht you are sekig from the Commssion with
respet to Rocky Mounta's LIWA progr?
CAPAI proposes, as it did for Idao Power, th Rocky Mounta's fuding.level be set
at whaver fudig amount is necessa to equa AVISTA's fudig on a per capita
basis. CAP AI proposes using the most recent data available to calculate the precise
amount of incrase needed to bnng Rocky Mounta to party with A VISTA. Using Ms.
Otens' per capita AVISTA calculation of$6.69/cusomer multiplied by her most recent
Rocky Mounta Idaho residential cusomer populaton figu of 56,430 yields a needed
incre of $77,517 for a tota anua fudig level of $377,517.
How do you respond to a possible arguent tht Rocky Mountai's fudig should not
be incrasd so soon afer the 2010 rate cas order was issued?
Although Rocky Mounta's fudig was incread ealier ths year, it must be
remembered tht the Company went an extrdily long tie without any increase.
Furerore, Ròcky Mounta ha filed more genera rate cases since 2005 than either of
the other two utilities. Finly, if the Commssion ag to embrae paty in LIWA
fudin, ths wil bnng the utiities on an even level and make futu LIW A fudig
evaluations simpler.
B. Widening Gap Between Nee and Resourc for LIW A
Wht is the statu of the disparty between the need for LIW A and availabilty of
resoures?
DIRCT TESTIMONY OF TERI OTTENS 18
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In spite of the injection of fuds thrugh the now-expired AA, the disparty continues
to incre. Thoug diffcult to preict with preision, it is likely th Rocky Mounta
cusomers will have to wait for an averae of 8 year and quite possibly might never
receive benefits under the progr.
C. CASE NO. PAC-E-1l-13 - Rocky Mountain's LIWA Evaluation Case
You have discussed the pendig Rocky Mounta proeding sekig authonzation to
discntiue cost-effectiveness evaluations ofLIWA on the basis tht the progr is not
cost-effective and the chilling effect it ha ha on increing LIW A fuding for all thee
utiities. Why does CAP AI oppose deferrg LIW A fuding increases pending resolution
of Rocky Mountan's 11-13 case?
The LIW A evaluation fiin ha semed to have had an unortate chiling effect on not
only Rocky Mountan's LIWA progr, but possibly Idaho Power's and AVISTA's
progrs as well. Whle CAP AI is quite confdent tht the CADMUS stdy is so flawed
that it is meagless, and bass ths contetion on the work of a promient naiona
expert in the field of evaluating the cost-effectiveness oflow-income progrs retained
by CAPAI to propely analyz the effecveness ofLIWA, Rocky Mounta's filing
sems to have needessly cas a pall over other pares' perception ofLIWA and called
into question whether additiona fuding for the progr is appropnate pending a
resoluton of the LIW A evaluation case.
Has the Commsion recntly spoken to the issue ofLIW A's cost-effectiveness?
Yes. In Order No. 32196 issued Februar 28,2011 in Cas No. PAC-E-1O-08, the
Commssion stted on pp. 61-62, in reference to Rocky Mountain's LIW A progr that:
"(w)e find tht RM doe not dispute the cost-effectiveness of its Schedule 21
weathenztion progr for its low-income cusomers."
What is the sttus of the LIW A cost-effecveness cas?
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Both Staff and CAP AI have submitted comments in respons to Rocky Mounta' s
application. As I just mentioned CAP AI, using the detaled anysis pedormed by its
expert submitted extensive comments demonstrting preisely how the cost-
effectiveness evaluation conducte on behalf of Rocky Mounta wa flawed and what
effect it ha on the ultite outcome of the study. CAP AI's expe concludes tht there
is no doubt tht, if properly evaluated Rocky Mounta's LIW A progr will prove
cost-effecve.
For its pa Sta also noted a numbe of deficiencies so senous th it proposes
tht the pares to that case convene in a workshop settg to resolve the complicated tak
of propely evaluatig low-income weatherzation progrs. In its comments, Sta
noted its "long history of support for low-income weathenzon program" and cited
from a Commssion Order dating back to 1989 identifyg the ty of benefits provided
by LIWA. Sta also quoted from the Commssion's fial order in Rocky Mountan's
2010 rate cas in which the Commssion note its contiued support for LIW A and that it
was not disputed tht the progr is cost-effective.
Would you sumarze CAP AI's position tht increased LIW A fuding should not be
defered pending resolution of the LIW A evaluaon ca?
The progr fuding levels are substtially disproportonate, resultig in disparty and
unaiess for utlities and ratepyers. Allowig ths dispty and the resultig
preferentialdiscnmatory effects to contiue is not fai, jus or renable. Secnd,
there ar economic consquences to losing the opportty to present the issue to the
Commssion in this and Idao Power's rate cass.
Wht ecnomic consquences ar you referng to?
Althoug CAP AI could ostenibly intiate a docket by way of petition solely for the
purse of increasing LIW A fuding afer Rocky Mounta's LIW A evaluation progr
DIRCT TESTIMONY OF TERI OTTENS 20
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is concluded, ths constitus a lost opportty for CAP AI. My undersdig is that
genera rate proceedgs ar considered an opportty to present most relevant issues to
the Commssion.
So it is possible for CAP AI to file an application for LIW A fudig increases outside the
context of a pendig gener rate ca?
To my knowledge, any individua or entity may file an applicaon or petition with the
Commssion at its disction but it is not always ficially feasible for CAP AI to do so.
A pendig genera rate cae offers advantaes for an organion with limited resources
such as CAP AI. I am not an atorney and do not profess to have any legal expertise. I
am, however, famliar with the basic elements ofIdao law and the Commssion's
procur rues pertng to intervenor fuding. There ar a number of cntena tht an
intervenor must satisfy in order to be entitled to a fuding award. Absent the possibilty
of obtg such an award, it is a ficial st for CAP AI to formaly interene in
procgs before the Commssion. Furhermore, there are essntialy economies of
scale tht exist when a genera rate cas is pending for a utilty that constitute an
ecnomic opportty for CAP AI to have its issues addrsed. Because the Commission
generay alows any and al issues to be rase durg the cour of a genera rate case, it
is procedurly less complicated and costy for CAP AI to interene in a pendig case th
to intiate a new one.
VI. CONSERVATION EDUCATION
Have you reviewed the testimony fied by Rocky Mounta witness Barbara Coughin
regardig the low-income conservation education progr ("Con-Ed")?
Yes I have.
Wht is your response to Ms. Cougin's testiony?
DIRCT TESTIMONY OF TERI OTTENS 21
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Though I possess no legal expeise and assue tht Ms. Cougin is not an attorney, it
sems tht she ha essentially restte the arguents made by Rocky Mounta in post-
heang bnefig at the conclusion of Case No. PAC-E-1O-07. I point out tht both
CAP AI and Rocky Mounta have alady submitt extensive brefig on the issue of
whether a pnor settlement ageeent should be constred as an agrement by Rocky
Mounta to fud its Con-Ed progr on an anual basis, or wheter it was a one-time
expeditu. I see no reason to reiterte points alady made by CAP AI's attorney in
bnefig from las year's rate cas.
Does Ms. Cougin present any factu inormation or techncal anysis tht wasn't
alrdy put before the Commssion in the las rate ca?
I se nothg in Ms. Coughin's not aly stte and put before the Commssion in the
pas case. I do note that Ms. Cougin sems to suggest that the Company is wiling to
have a dialogue with the Communty Action Agencies that admster the Con-Ed
progr and agree that such dialogue would be warted. Ms. Cougin suggest that it
might not be possible for the agencies to distbute 500 kits pe year as was the ongin
agement. Ths is the ty of concer tht could be addrssed thugh collaboration
beee the agencies and Rocky Mounta.
Do you have an update on the sttu of distbutin the conseration kits under Rocky
Mounta's progr?
Yes. It was agree by all concerned tht the best tie to distbute the reder of the
kits would be the commencement of the LIHAP sen whch st tody. All kits are
expeted to be distbuted by year's end.
Do you have any respns to Ms. Coughin's suggestion tht ther be a "consistent state-
wide approach" to Con-Ed?
DIRCT TESTIMONY OF TERI OTTENS 22
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CAP AI would support such a proposition to the extent feasible. There ar obvious
unque chaenstics between the thee electrc utilities th might prevent a pedectly
consistent model for Con-Ed, but to the extent possible, it would be desirable to CAP AI.
In this regard, I point out that both Idao Power and AVISTA's Con-Ed programs are
fuded anualy. In fact, AVISTA agee to increase fudig for its progr by 25% in
the recently approved settlement in Case No. A VU-E-11-01. If Rocky Mounta try
desirs a consistent stte-wide approach, then it is only logical to contiue fuding Rocky
Mountain's progr on an anua bais as well.
VII. CONCLUSION
How would you suare your tesony in conclusion?
I grtly appreciate the opportty to prent a low-income customer's perstive on
the many issues and challenges facing tht cusomer tody. I also appreciate the
Commssion's considertion of ths perstive. My testimony is obviously not tht of
expert in the technca aspets of a gener raemakg suh as deternig revenue
requient and allocaton. The purse of my testony is to explai why the ty of
settlement curntly before the Commssion is unbalance frm the point of view of a
low-income Rocky Mounta cusomer who stggles with the fac tht his or her bil
sems to constatly increas. The frtion tht accompanes ths is elevated by that
sae cusmer's inbilty to do anytg to modify his or her consumption. A settlement
tht does nothg but exacerate the may inequities I suggest exist by failig to simply
increase fuding of the only resource available to low-income cusomer is neither fair,
jus nor reasnable.
Does ths conclude your testimony?
Yes, it does.
DIRCT TESTIMONY OF TERI OTTENS 23
CERTIICATE OF SERVICEi
2
I, the undersigned, hereby certify tht on the 2nd day of Novembe, 2011 I served a copy
of the foregoing document on the followig by eleconic maiL.
3 Ted Weston
Rocky Mounta Power
201 Sout Mai Suite 2300
Salt Lae City, UT 84 I 11
4
5
6
7
Danel E. Solander
Rocky Mountain Power
201 South Mai Suite 2300
Salt Lae City, UT 841118
9
10 Dat Request Respns Center
PacifiCorp
11 825 NE Multnoma Suite 2000
Portland, OR 97232
12
13 NeilPnce
14
Deputy Attorney General
Idao Public Utities Commssion
15 472 W, Washigton (83702)
POBox 83720
16 Boise, ID 83720-0074
17
Radal C. Budge
18 Raine, Olson, Nyc, Budge & Bailey
201 E. Cente
19 PO Box 1391
Poctello, ID 83204-1391
20 E-Mail:
21 Brubaker & Assoiates
22 16690 Swigley Ridge Rd., #140
Chesterfeld, MO 63017
23
24 James R. Smith
Monsto Company
25 P.O. Box 816
DIRCT TESTIMONY OF TERI OTTENS 24
1
Sod Spnngs, ID 83276
2 Enc L. Olsen
ASSOCIATION, INC: Raine, Olson, Nye, Budge & Bailey
(Exhbit Nos. 30 1-400) 201 E. Center
POBox 1391
Pocatello, ID 83204-1391
3
4
5
6 Anthony Yanel
29814 Lae Road
Bay Vilage, OH 441407
8
9 Benjam J. Oto
Idao Conservaton League
10 710 N. 6th St.
Boise, ID 83702
11
12 Ronald Willams
Williams Brabur, P.C.
13 1015 W. Hays St.
Boise, ID 8370214
15 Don Schoenbek
16 RCS, Inc.
900 Washington St., Suite 780
17 Vancouver, WA 98660
18
Tim Buller
19 Agrum, Inc.
3010 Conda Rd.
20 Sod Spnngs, ID 83276
21
22
DATED, ths 2nd day of November, 2011.
23
24
25 Bra M. Pudy
DIRCT TESTIMONY OF TERI OTTENS 25
1
Sod Spnns, ID 83276
2 Enc L. Olsen
3 ASSOCIATION, INC: Raine, Olson, Nye, Budge & Bailey
(Exhbit Nos. 30 1-400) 201 E. Cente
4 PO Box 1391
Pocatello, ID 83204-1391
5
6 Anthony Yanel
29814 Lae Road
7 Bay Vilage, OH 44140
8
9 Benjam J. OtoIdao Consrvation Leage
lQ. 710 N. 6th St.tRoise, ID 83702
11
12 Ronad William
William Brabur, P.C.
13 1015 W. Hays St.
Boise, ID 83702
14
15 Don Schoenbek
16 RCS, Inc.
900 Washington St., Suite 780
17 Vancouver, WA 98660
18
Tim Buller
19 Agrum, Inc.
3010 Conda Rd.
20 Soda Spnngs, ID 83276
21
22
DATED, ths 2nd day of November, 2011.
23
24 ~
25 Brad M. Pudy
DIRCT TESTIMONY OF TERI OTTENS 28