160628_IPCDSM.pdf

Case No. IPC-E-16-03, Order No. 33505
Contact: Gene Fadness [phone], 890-2712
www.puc.idaho.gov

Idaho Power seeks prudency declaration
on $35.2 million investment in energy efficiency

BOISE (June 28, 2016) – Idaho Power Company is asking state regulators to determine that
$35.2 million of company investment in energy efficiency and demand-response programs
during 2015 was prudently incurred.

The application does not impact rates. The Idaho Public Utilities Commission is taking public
comment on Idaho Power’s application through July 14.

The efficiency programs are primarily funded through a 4 percent Energy Efficiency Rider on
customer bills. The demand-response programs are included in the annual Power Cost
Adjustment (PCA), which is part of the Annual Adjustment Mechanism listed on customer bills.

An energy-efficiency program is one in which less energy is used to perform the same function.
A demand-reduction program is one that shifts consumption to non-peak times of the day,
reducing demand on a utility’s generation system. Idaho Power offers 19 energy efficiency
programs and three demand reduction programs. The company claims these programs
increased annual energy savings by 18 percent.

About $28.5 million of the total $35.2 million investment is related to energy efficiency and
would be recovered through the 4 percent rider. The remaining $6.7 million includes demand
reduction incentive payments to program participants and, if approved, is recovered through
the PCA.

In general, the commission will allow Idaho Power an opportunity to recover its demand-
response expense through rates if the expenses were prudently incurred. If the commission
finds otherwise, the disallowed portion of expense is borne by shareholders, not ratepayers.

Energy efficiency programs resulted in 162,533 megawatt-hours of savings, which includes
21,900 MWh from Idaho Power’s participation in market transformation initiatives offered
through the Northwest Energy Efficiency Alliance. Some of Idaho Power’s energy efficiency
programs include offering customer rebates for increased use of heating and cooling
efficiencies and energy efficient lighting and appliances as wells as creating efficiencies in
commercial and industrial buildings.

The largest amount of energy efficiency savings came from the commercial/industrial sector
(102,074 MWh), followed by the residential sector (24,532 MWh), followed by the irrigation
sector (14,027 MWh).

Demand reduction programs that provided financial incentives to residential air conditioning
customers, large commercial and industrial customers and irrigators to shift or curtail
consumption to off-peak periods reduced demand on Idaho Power’s system by 376 megawatts,
saving customers about $1.6 million.

All the programs must pass cost-effectiveness tests to ensuring their cost does not exceed the
benefit to customers. One of the tests, the Total Resource Cost test, must show that all
customers benefit from the programs, not just those who directly participate.

To read Idaho Power’s full report, go to the commission’s website at www.puc.idaho.gov. Click
on “Open Cases” under the “Electric” heading, scroll down to Case Number IPC-E-16-03 and
click on “2015 DSM Annual Report.” Comments can be filed electronically by going to the same
website and clicking on "Case Comment or Question Form” under the “Consumers” heading. Fill
in the above case number and enter your comments. Comments can also be mailed to P.O. Box
83720, Boise, ID 83720-0074 or faxed to [phone].

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