140411_AVUeeprudency.pdf

Idaho Public Utilities Commission
Case Nos. AVU-E-13-09, Order No. 33009
Contact: Gene Fadness [phone]

Avista Utilities’ expense to implement
efficiency programs declared prudent

BOISE (April 11, 2014) – The Idaho Public Utilities Commission has determined that Avista
Utilities’ prudently incurred $25.17 million in expense related to its electric and gas efficiency
programs during 2010-12.
The commission’s finding means those expenses can be included in the electric rider of 0.245
cents per kilowatt-hour on customer electric bills. The gas rider is temporarily zeroed out
because low natural gas prices render the expense related to the gas efficiency programs less
prudent. The prudency finding does not impact customer rates.
The electric efficiency programs provided more than 109,100 megawatt-hours of savings during
2010-12. Natural gas efficiency programs resulted in 950,822 therms not being used.
The commission determined that $25.17 million of the $25.4 million the company spent on
energy and natural gas efficiency programs was prudently incurred.
The 30 programs funded by the rider must pass cost-effectiveness tests that demonstrate all
customers benefit, not just those who participate in the programs. One test, the Total
Resource Cost test, measures whether the total costs in Avista’s north Idaho service territory
decrease as a result of the programs. That test showed that for every $1 invested in the
programs, the benefit to all customers is $1.91.
Some of the programs for residential customers include financial incentives for installation of
high-efficiency equipment, compact fluorescent lamps, refrigerator recycling, weatherization,
and electric-to-natural gas conversions. Commercial and industrial customers who participate
can take advantage of customized, site-specific programs.
The commission did not include about $100,000 Avista paid the state Department of Energy
Resources for efficiency projects at schools because Avista paid the incentives without verifying
that the efficiency measures had been installed and without receiving contractor receipts or
invoices to confirm the purchases and labor associated with the projects. The commission
believes the efficiency measures were purchased and installed and will allow those expenses to
be included in the prudency determination once verification is provided. The commission also
didn’t include $14,120 paid to Lewis Clark State College for the same reasons.

The commission also said Idaho customers should not have to pay for more frequent third-
party evaluation required by Washington state, also part of Avista’s service territory. Although
the evaluations provide some benefit to Idaho customers, Avista agreed to shift about $100,000
from the Idaho rider to the Washington rider. The commission also encouraged Avista to abide
by the 50 percent cap on site-specific efficiency projects’ cost and to more carefully manage its
labor costs related to all the efficiency programs’ implementation.

Overall, the commission expressed satisfaction with Avista’s management of the programs,
which provide cost benefits to customers. “Like commission staff and the Idaho Conservation
League, we applaud Avista’s longstanding ‘top down’ commitment to demand-side
management and stakeholder involvement in energy efficiency issues,” the commission said.

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 “Open Cases” under
the “Electric” heading and scroll down to Case No. AVU-E-13-09.

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