131011_IPCDRsettle.pdf

Idaho Public Utilities Commission
Case No. IPC-E-13-14, Order No. 32906
October 11, 2013
Contact: Gene Fadness [phone], 890-2712
Website: www.puc.idaho.gov

Parties offer settlement to customer load reduction programs
The Idaho Public Utilities Commission is taking comment through Oct. 28 on a proposed settlement that,
if adopted, would revive or modify three programs that offer Idaho Power Company customers
incentives for reducing electric consumption during the summer when electrical demand is at its peak.
The “A/C Cool Credit” and “Irrigation Peak Rewards” programs were created in 2003 and 2004,
respectively. Residential customers who signed up for the air conditioning program were credited $7
each month from June through August to allow Idaho Power to remotely cycle air conditions or heat
pumps on and off during peak use hours. The company installed direct-load control devices on or near
about 37,000 participating customers’ air conditioning units. In the irrigation program, Idaho Power
turned off irrigation pumps through the use of an electric switch connected to customers’ electrical
panels. Irrigators also received a monthly credit for agreeing to participate.
During 2012, these two programs and another program targeted to commercial and industrial
customers called FlexPeak, provided about 367 MW of peak reduction.
Earlier this year, Idaho Power Co. filed an application to temporarily suspend A/C Cool Credit and
Irrigation Peak Rewards claiming they cost the utility and, hence, customers more to operate than the
value of the energy saved. The downturn in the economy reduced demand on Idaho Power’s generation
system, the company claimed, and its own forecasting did not show a peak-hour capacity deficit until
2016. Idaho Power claimed it spent about $5.5 million on the A/C Cool Credit program in 2012 and
about $12.3 million on Irrigation Peak Rewards. Much of that expense was in direct payments to
customers who volunteer to participate in the programs. The costs of the programs are eventually
passed on to customers.
Instead of suspending the programs entirely, the commission, the company and other parties adopted a
negotiated settlement that provided a “continuity payment” of $1 per month to residential customers
during summer 2013, even though air conditioner cycling did not occur. Participating irrigators also
received continuity payments, but the amounts varied depending on which Peak Reward option
irrigators chose. The commission hoped the minimal incentive payment would prevent customers from
dropping out of the programs while Idaho Power, commission staff and interested parties could find a
way to make the programs more cost-effective.
Several parties, including the company and commission staff, participated in workshops over the last
few months that resulted in a proposed settlement that will resume operation of the two suspended
programs and modify the Flex Peak program.
The proposed settlement ensures the existing resources – the load-control devices and the ready pool of
customers – are not wasted and also ensures demand response is provided to all major customer
classes. The settlement proposes to keep costs lower by slightly reducing both the duration of the
programs are offered and the size of the financial credit. The settlement proposes to make the demand
reduction and energy savings more valuable by eliminating, in most cases, the requirement that
participating customers be notified in advance of interruption. (With advance notice, if the peak-use
does not eventuate as forecasted, the value of the energy saved is lost.)
The settlement proposes that demand response be viewed as more than just a capacity resource during
peak-use periods, but is also used to delay construction of new peaking capacity, avoid transmission line
losses and provide improved reliability during emergencies.
Going forward, the parties agreed that the value to both the company and its customers of all the
programs combined would be about $16.7 million annually.
Some of the program specifics include:
 A/C Cool Credit will be available on weekdays from June 15 to August 15. Participating
customers would receive a $15 bill credit over three billing periods, as opposed to the $7 month
per credit for the three-month season in previous years. Idaho Power will not actively market
the program, but will recruit customers who move into a home where a load-control device has
been installed because the previous owner agreed to participate. The company will accept new
participants upon request.
 Irrigation Peak Rewards will be available also from June 15 to August 15 on Mondays through
Saturdays from 9 a.m. to 5 p.m. Participants would receive a fixed incentive of $15 per kW per
season. If more than three interruptions occur, participants would get a variable incentive.
Participating irrigators would choose from one of three interruption options, two of which
would not require advance notice of interruption. Interruptions can last up to four hours, but no
more than 15 hours per week or 60 hours per irrigation season.
 Flex Peak Management would be available to commercial and industrial customers from June
15 to August 15 from 2 to 8 p.m. on weekdays. Participants would get a fixed incentive for up to
three interruptions and a variable incentive if more interruptions occur. Interruptions may last
up to four hours, but no more than 60 hours per summer.

Those parties signing the proposed settlement include commission staff, Idaho Power, the Idaho
Irrigation Pumpers Association, the Idaho Conservation League, the Snake River Alliance and EnerNOC.
The Industrial Customers of Idaho Power participated in the discussions, but did not sign the proposed
settlement agreement.
Comments are accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and
clicking on "Case Comment or Question Form,” under the “Consumers” heading. Fill in the case number
(IPC-E-13-14) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID
83720-0074 or faxed to [phone].
A full text of the commission’s order, the proposed settlement and other documents is available on the
commission’s Web site. Click on “Open Cases” under the “Electric” heading and scroll down to the above
case number.