052113_IPCEnerNoc.pdf

Idaho Public Utilities Commission
Case No. IPC-E-13-04, Order No. 32805
May 21, 2013
Contact: Gene Fadness [phone], 890-2712
Website: www.puc.idaho.gov

PUC approves changes to demand response agreement

The Idaho Public Utilities Commission is allowing Idaho Power Company to significantly
reduce costs it incurs to pay large customers to reduce their energy consumption during
peak use times because the utility does not anticipate peak-hour capacity deficits until
2016.

Idaho Power contracts with an independent company, EnerNoc, to manage a demand
reduction program for the utility’s large commercial and industrial customers. The
program, called FlexPeak, allows large commercial and industrial customers to reduce
their consumption for short periods during peak summer days when demand on the
company’s generation system is the highest.

The modified agreement with EnerNoc caps the weekly demand reduction at 35 MW,
reduces the number of dispatch hours from 60 to 30, the number of peak-load days
from 20 to 10 and the amount Idaho Power pays EnerNoc. Idaho Power claims the
modified contract with EnerNoc will save all its customers $500,000.

Last month, the commission granted Idaho Power authority to curtail other demand
response programs: the Air Conditioner Cool Credit program for residential customers
and the Peak Rewards program for irrigators. Idaho Power originally sought to suspend
those two programs entirely for 2013, but the commission adopted a negotiated
settlement that continues a reduced amount of payments to participating customers
even though the demand reduction won’t take place. Workshops will be held this
summer to determine the future of the programs from 2014 on.

FlexPeak, the A/C Cool Credit and Irrigation Peak Rewards programs are just three of
about 20 programs devoted to demand side reduction and management.

The commission adopted the amendment to the EnerNoc agreement noting that it
maintains FlexPeak while cutting program costs by about $500,000 this year. “In light of
Idaho Power’s projected excess capacity in the near-term, the contract changes strike a
proper balance between maintaining an effective demand response program and
controlling costs that are passed on to the company’s customers.”

The Industrial Customers of Idaho Power objected to the contract changes, asserting
demand response programs should not be ramped down simply because the utility is in
a temporary surplus generation position. “DSM programs, like FlexPeak, allow the utility
to meet system demands in smaller increments and they smooth out the ‘lumpy’ nature
of adding generation plant like the Langley Gulch (natural gas) plant” recently
constructed by Idaho Power.

Idaho Power said it was faced with operating demand response programs costing
customers money when adequate system capacity exists to serve anticipated peak loads
through 2016. Idaho Power said it has an “obligation to keep rates reasonable for the
benefit of all customers.”

A full text of the commission’s order, along with other documents related to this case, is
available on the commission’s Web site at www.puc.idaho.gov. Click on “File Room” and
then on “Electric Cases” and scroll down to Case No. IPC-E-13-04.

Interested parties may petition the commission for reconsideration by no later than
May 30. Petitions for reconsideration must set forth specifically why the petitioner
contends that the order is unreasonable, unlawful or erroneous. Petitions should
include a statement of the nature and quantity of evidence the petitioner will offer if
reconsideration is granted.

Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed
to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.

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