150326_IPCFlexPeak.pdf

Case No. IPC-E-15-03, Order No. 33242
Contact: Gene Fadness [phone], 890-2712
www.puc.idaho.gov

Idaho Power proposes demand response program
for its commercial, industrial customers

BOISE (March 26, 2015) – Idaho Power is seeking approval to internally operate
an energy demand reduction program for its commercial and industrial customers.

Since 2009, Idaho Power has contracted with a third-party, EnerNoc Inc., to
operate its “Flex Peak” program under which larger industrial and commercial
customers volunteer to curtail their energy use during peak-use hours of the
summer months.

In an application now before the Idaho Public Utilities Commission, Idaho Power
says it would save costs by operating Flex Peak itself and the program’s operation
and results would be more transparent.

The commission is taking public comment through April 8 on the application and the
utility will submit its reply comments by April 15. Idaho Power is seeking approval
for the program by May 1 so the company can solicit participants and implement it
by June 15.

Under Idaho Power’s proposal, the utility would call at least three “dispatch events”
between June 15 and August 15, notifying volunteer customers at least two hours
in advance that they will need to reduce or curtail their energy use. The dispatch
events will be during peak-use hours when demand on Idaho Power’s system is the
greatest. Those hours are typically between 2 p.m. and 8 p.m. on weekdays,
excluding holidays. Each dispatch event will last between two and four hours, but
no more than 15 hours per week or 60 hours per summer season. Idaho Power
proposes to provide incentive payments to customers who agree to participate.

Idaho Power does not propose a change to customer rates associated with the
program. The utility says operating Flex Peak internally will cost from $1.1 million
up to $1.4 million if the entire 35 megawatts of potential savings were dispatched
for the maximum allowed 60 hours.
The incentives paid to participating customers will be recovered in base rates.
About $2 million in base rates is allocated for commercial and industrial demand
response programs. Idaho Power anticipates incentive payments will range from
$900,000 to $1.27 million. Previous costs to the program under the EnerNoc
program were about $2 million, according to Idaho Power.
The utility proposes that savings from internal operation of Flex Peak be passed
directly to customers. Non-participants also benefit from the increased
transparency of an internally managed program, Idaho Power claims. Further, all
customers benefit when Idaho Power does not have to buy or generate as much
power from other more costly sources during peak-use hours when power is the
most expensive.
The company proposes that the deviation between actual demand response
incentive payments and forecasted program costs be included in the annual Power
Cost Adjustment, which is a rate credit or surcharge to customers effective June 1.
Labor associated with administration of the program is recovered from the Energy
Efficiency Rider already included in customer bills.
Idaho Power also offers demand-response programs to residential customers and
irrigation customers. According to Idaho Power, the cost of operating all its demand
response programs in 2014 was $10.6 million, but the value accrued to the
company and its customers as a result of the reduced demand was $16.7 million.
Idaho Power plans at least 390 MWs of demand reduction from all its programs
during 2015.
Comments will be accepted through April 8 via e-mail by accessing the
commission’s website at www.puc.idaho.gov and clicking on "Case Comment Form,”
under the “Consumers” heading. Fill in the case number (IPC-E-15-03) and enter
your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-
0074 or faxed to [phone].

Idaho Power’s application and supporting testimony can also be found on the
website by clicking on “Open Cases” under the “Electric” heading and scrolling down
to the case number above.

###