20100216Application.pdf

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Februar 12, 2010
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Jea D. Jewell, Secreta
Idaho Public Utilities Commssion
Statehouse Mail
W. 472 Washington Street
Boise, Idaho 83720
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Application No. A VU-G-1O-0:;
Dea Ms. Jewell:
Enclosed for filng with the Commssion is an origial and 7 copies of the Company's revised
application reuesting an increase to Schedule i 9 i rates, "Energy Effciency Rider Adjustment,"
also known as the "energy effciency ta rider." Schedule 191 is designed to reover the costs
incurd by the Company associate with providing natual gas energy effciency services to
customers.
Pleae dit any questions on ths matter to Bruce Folsom, Dirtor, Energy Effciency at (509)
495-8706 or myself at [phone].
Sincerely,~~~Linda Gervais
Manager, Reguatory Policy
State & Federa Regulaton
A vista Corpration
Enclosurs
DAVID J. MEYER
VICE PRESIDENT AN CHIEF COUNSEL FOR
REGULTORY AN GOVERNNTAL AFFAIS
AVISTA CORPORATION
P.O. BOX 3727
1411 EAST MISSION AVENU
SPOKA, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
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BEFORE THE IDAHO PUBLIC UTILITIS COMMSSION
IN TH MATTR OF TH APPUCATION
OF A VISTA CORPRATION FOR TH
REQUEST TO INCREASE ITS ENERGY
EFFCIENCY PUBLIC PURSE RIER
SCHEDUL 191
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CASE NO. A VU-G-lO-b~
APPLICATION OF AVISTA CORPRATION
1 I. INRODUCTION
2 A vista Corporation, doing business as A vista Utilities (hereinafr A vista or
3 Company), at 1411 East Mission Avenue, Spokae, Washigton, respetflly reuests
4 approval of an increase to Schedule 191 rates, "Energy Effciency Rider Adjustment," also
5 known as the "public purse taff rider."
6 Commssion Order No. 30918 in Case Nos. A VU-E-09-06 and AVU-G-09-04,
7 provides that Avista must file with the Commssion on or before Februar 15th of each year,
8 beginnng 2010, to revise the Demand Side Management (DSM) portons of the Schedule 91
9 and 191 to establish ta riders that are suffcient to fund the following twelve month of
10 DSM as well as amortze any taff rider imbalance. The intent of ths anual fing is to
1 1 minie any potential under or over collections. As par of ths reuirment, the Company
12 must cirulate dr of any tarff revision, or concepts for consideration, afectig the
13 Company's DSM portolio to its Triple-E Board at least 30 days prior to filig a ta
14 revision with the Commssion. The Company, on Januar 15th, 2010, provided via electrnic
15 mail a draf of its conceptual filing, Avista received one response from pares regarng the
16 dr. Washington State's Public Counsel sought clarfication of the electrc revenues
17 depicte. Ths filig is responsive to the above referenced requirment.
18 Curnt projections indicate that the existing electrc taff rider Schedule 91 may lea
19 to a small negative balance of approximately $600,00 at the close of 2010 based upon the
20 curent budget. Ths number is minor relative to the potential varation in customer demand
21 caused by weather and other factors beyond Avista's control. Therefore, Avista is proposing
22 to reta the existing Schedule 91 taff rider rate. The Company, in ths filing reuests
23 approval of an increase to Schedule 191 natu gas rates.
Application of A vista Corporation
Case No. AVU-G-I0"O.;
Page 1
1 Now in its fifeenth year, the energy effciency tarff riders were the Countr's fit
2 distrbution charge to fund DSM and are now replicated in many other states. The proposed
3 increase in Schedule 191 natu gas rates is necessar to continue to fund ongoing natura
4 gas effciency programs consistent with Avista's most reent Natual Gas Integrated
5 Resource Plan (IR). It wil also serve to amortze a deficiency balance with the natual gas
6 effciency tarff rider resulting from the Company's response to higher than expected
7 customer demand for services. The proposed increase in revenues for DSM wil not increase
8 or decrease the earngs of the Company.
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10 The Company requests that ths filing be processed under the Commssion's Modfied
11 Procedure rules.
12 Communications in reference to ths Application should be addrssed to:
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David J. Meyer, Esq.
Vice Prsident and Chief Counsel for
Regulatory and Governmenta Afai
A vista Corpration
P.O. Box 3727
1411 E. Mission Avenue, MSC-13
Spokae, VV A 99220-3727
Phone: [phone]
Fax: [phone]
23
Application of A vista Corpration
Case No. AVU-G-lO-o~
Bruce Folsom
Diretor, Energy Effciency
A vista Corpration
P.O. Box 3727
1411 E. Mission Avenue, MSC-15
Spokae, VV A 99220-3727
Phone: [phone]
Fax: [phone]
Page 2
1 ll. BACKGROUN
2 The Company's energy effciency tagets are established in the proess of developing
3 its electrc and natur gas IRs. The electrc IR non-regional i effciency goal for Idaho
4 and Washigton in 200 was 57.2 millon kWhs. The results of Avista's non-regional energy
5 effciency programs contiue to excee tagets. A vista's 200 local energy effciency
6 savings were over 82 millon kWhs (approxiately 9.4 aM or 143% of the Company's
7 IR anual taget. Over 147 aM of cumulative savings have been achieved thugh
8 Avista's energy efficiency effort in the past thy year; over 117 aM ofDSM is curntly
9 in place on the Company's system. By comparson, Avista's tota reta load for 2010 wil be
10 approxiately 1,035 aMW; therefore, the tota DSM energy savings represent a meangfl
11 reduction to the retal load that A vista would otherwise serve. The 200 natual gas savings
12 targets for Idaho and Washington was 1.6 millon therms. Over 2.0 millon therms were
13 saved last year.
14 Avista's energy effciency programs are supported by 21.5 full-tie equivalents
15 (P) spread over 44 sta. The 200 tota DSM budget was over $23.2 millon.
16 Customers continue to look to the Company's DSM progras for assistace in
17 responding to increased retal electrc and natural gas prices. Existing and planed
18 prograatic expenditues ar exceng taff rider revenues. As of the close of Januar
19 2010, Avista's electrc DSM taff rider balance for Idaho is a negative $2,417,322 and the
20 natual gas DSM taff rider balance for Idaho is a negative $1,375,435 (past expenditus
21 have exceeded tarff rider collections). The currnt Idao electrc tarff rider and the
22 proposed Idaho natu gas taff rider increase ar estimated to eliminate these curnt
23 balances by the end of 2010 and to fund estimated curent year expenditus. The proposed
1 Non-regional represents Avista goals excluding NEEA
Application of A vista Corpration
Case No. AVU-G-IQ-Q;i
Page 3
1 increase in the DSM surcharge is approximately 2.61% of present natu gas biled rate.
2 Ths proposed rate wil have an average monthy bil impact to residential customers using 66
3 therms of $1.52.
4 Additional drvers that contiue to add to increses in the taff rider balances include:
5
6 · increased customer demand for demand-side management progrs;
7 · increaing avoided costs which leads to a higher number of cost-effective
8 energy effciency program; and
9 · higher level of energy effciency acquisition identified in the IR leads to
10 increaed dollar per unt as higher cost measures ar selecte on the supply11 cure.
12
13 All Schedules 91 and 191 DSM funds wil remain with the electrc and natu gas
14 effciency program includig the Evaluation, Measurment and Verification, reportg of
15 progras, either offered by the Company diectly or thugh designated contrctors, or as
16 par of cooperative regional electrc and natu gas efficiency program. The Company wil
17 continualy assess the demand for services and progr fmancial balances and propose
18 revisions to Schedules 91 and 191 as necessar. Schedules 91 and 191 funds support DSM
19 programs described in Schedules 90 and 190. These programs include but are not limite to
20 the following measures:
21 · Appliance measures
22 · Compressed ai measures
23 · HV AC measures
24 · Industral measurs
25 · Lightig meaures
26 · Maintenance meaures
27 · Motors measures
28 · Renewable Technologies
29 · Nortwest Energy Effciency Alance parcipation
30 · Shell measures
31 · Sustanable Buildig measures
32
33 The Company's programs ar based on providig a fmancial incentive, or "rebate,"
34 for cost-effective effciency measures instaled by customers with a simple payback of
Application of A vista Corpration
Case No. A VU-G-I0 -c):2
Page 4
1 greater than one year. Ths includes over 300 measurs that are packaged into over 30
2 programs for customer convenience.
3 Avista has long encourged the diect-use of natu gas by its electrc customers.
4 The Company is continuing ths effort with residential rebates for the conversion of electrc-
5 to-natural gas space and water heat loads as well as a broad progr for any non-residential
6 electrc-to-natual gas conversions meeting specified criteria for relative British Thermal Unit
7 (BTU) effciency. The cost-effective potential for these measurs has been incorprate into
8 Avista's IR effort and are contaned withn the identified acquisition goal. Avista's
9 residential progrs include high effciency equipment, electrc-to-natu gas conversions,
10 compact fluorescent lights (CFLs) , "second" refrigerator recycling, weatherization, rooftop
1 1 dapers, as well as providig educational assistace though varous community events.
12 For non-residential customers, in addition to prescriptive programs, A vista offers
13 "site-specific" progrs. Site-specific programs ar customized to the customer premise.
14 The site-specific offering provides incentives on commercial and industral energy effciency
15 measure with a simple fmancial payback exceedng one yea. Ths is implemented though
16 site analyses, customized diagnoses, and incentives determned for savings generated by the
17 customers' premise or process. Commercial and industral progr avaiable to A vista
18 customers include:
19 · Energy Smar commercial refrgeration20 · lighting and contrls
21 · commercial food service equipment
22 · building retro-commssioning
23 · premium effciency motors
24 · power management for personal computer (PC) networks
25 · LEED certfication, commercial HV AC varable frequency drves (VFs)
26 · refrgerated warehouses
27 · vending machie controllers28 · demand controlled ventilation29 · side-stream fitration
30 · steam trp replacement and repaiApplication of A vista Corpration Page 5
Case No. A VU-G-IQ-o;z
1 · multifamly development
2 · LED trafc signals
3 · electrc to natual gas water heater conversions
4 · commercial clothes washers
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6 In addition to Avista's prescriptive and site-specific progrs, the Company funds,
7 and parcipates in the activities of the Nortwest Energy Efficiency Alliance (NEA).
8 NEEA focuses on using a regional approach to obtan electrc effciency though the
9 trsformation of markets for effciency measures and services. An example of NEEA-
10 sponsored progras that benefit A vista customers is decreasing the cost of CFL and high-
1 1 effciency appliances by working though manufacturs. For some measures, a large-scale,
12 cross-utility approach is the most cost-effective means to achieve energy effciency savings.
13 Ths approach is parcularly effective for markets composed of large numbers of smaller
14 usage homogeneous consumers, such as the residential and smal commercial markets. The
15 results from NEEA programs ar report in Marh of the following year. Historicaly,
16 A vista has received approximately 2.1 aM of savings in its service terrtorý from NEEA
17 progrs.
18 The Company provided $1.9 milion for low-income weatherization in 2009 in Idaho
19 and Washigton. Effective October 1,2008, in Order No. 3067 in Case Nos. A VU-E-09-06
20 and A VU-G-09-04, $465,00 was diected to Idaho electrc and natu gas low-income
21 customers and $25,00 was provided to Idao (CAP) agencies for the purse of
22 underwting agency personnel assisting in low-income outreach and conservation education.
23 The low-income weatherization portolio represents approximately 6.3% of our tota energy
24 effciency budget excluding utility support.
25
Application of A vista Corporation
Case No. A VU-G-lO -o~
Page 6
1 m. EVALUATION, MEASURMENT AND VERICATION
2 A vista is in the process of enhancing its Evaluation, Measurement and Verification
3 (EM& V) protocols. The Company circulated an EM& V draf plan for review by the Triple-
4 E board in November, 2009. Avista fully commtted to incorprate into its futu DSM
5 activities the requirements emboded in the Memorandum of Understading date Deember
6 21, 200. Avista plans to initiate a collaborative, beginng in March, 2010 to review
7 EM&V issues and wil provide a report to the Commssion on or before September 1, 2010.
8 That report wil describe Avista's enhanced EM&V protocols.
9 As described in its drt plans, EM& V is intended to reflect al of the analyses
10 necessar to supply information to staeholders to adequately determne the prudence of
11 Avista's DSM Programs. EM&V includes "impact," "process," "market," and "cost test"
12 test analyses. These are described below (and taen as a whole ar synonymous with other
13 terms such as "Portolio Evaluation" or "Progr Evaluation."
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15 Impact Analysis - Impact analysis provides the documentation necssar to prove
16 that the savings estimated withn a parcular progra are equal to the savings
17 realzed by all of the customers parcipating in that progr. Impact analysis
18 subcomponents include:
19 · Measure Verification applies principles of the . International
20 Performance Measurement & Verification Prtocol (IPMVP). Only a
21 single measur may be verified using ths tehnque or protocol. The
22 verification of a statistically signficant number of projects using
23 IPMV technques is often extrpolate to verify and perform impact24 analysis on whole programs. The followig pareters are necessar25 for the verification of a measur.
2627 · Process for calculating the savings;28 · Incrementa cost of a measur;29 · Instaation date;30 · Measure life;
31 · Claimed savings;
Application of A vista Corporation
Case No. AVU-G-I0-D.2
Page 7
1 · Rate schedule for DFIC Calculation; and2 · Other
3
4 Process Analysis - Process analysis is the documentation of the contiuous
5 changes necessar to create, implement, modify and possibly termate programs.
6 The following items are included in proess analysis.
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8 · Contact information;
9 · Changes to progrs over time;10 · Rules for customer qualfication;
1 1 · Project Cost data; and12 · Other
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14 Market Analysis - Market analysis determnes the effect of the marketplace on
15 customer implementation of energy efficiency including customer costs. Ths
16 analysis is under development and wil be included in the Company's EM&V
17 collaborative with interested pares as previously discussed.
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19 Cost Test Analysis - Cost test analysis combines several industr term relative to
20 the evaluation of energy effciency cost-effectiveness includig among others, Net
21 to Gross analysis, Total Resource Cost (TRC) analysis, Free Riders or Fre22 Drivers.
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25 IV. STAKEHOLDER INOLVEMENT
26 The Company has reguarly convened a staeholder's foru known as the External
27 Energy Effciency Board (Triple E). These meetings have included customer representatives,
28 Commssion sta members, and individuals from the environmenta communities. These
29 staeholder meetings review the Company's program offerigs as well as the underlying
30 cost-effectiveness tests and results. The progrs have been cost-effective from both a Tota
31 Resource Cost (TRC) and Program Admstrtor Cost Test (PACT) (formaly known as the
Application of A vista Corpration
Case No. AVU-G-lO-c.;
Page 8
1 Utility Cost Test (UCT)) perspective2. For the most recent reportng period, the TRC
2 benefit-to-cost ratio was 2.10 for the overall electrc DSM program portolio, with a net TRC
3 benefit to customers of over $29 millon in 2008. The PACT benefit to cost ratio for electrc
4 programs is cost-effective with a net PACT benefit of over $39 millon. The PACT benefit
5 to cost ratio for natura gas progrs is cost-effective with a net benefit of over $8.9 millon
6 for the same period. The natu gas DSM progr portolio is cost-effectiveness under both
7 the TRC and PACT tests (but for one Idaho customer, the Company's TRC would be 1.16,
8 with any number above 1.00 being cost effective for the most recent reportng period of
9 20083). The increased funding requested herein wil continue to be subject to the existing
10 cost-effectiveness tests.
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12 V. REQUEST FOR APPROVAL
13 In summar, instaling energy effciency measures is a dit action customers can
14 tae to respond to a period of increasing energy prices facing the Pacific Nortwest and the
15 Countr as a whole. Avista's energy effciency programs are being used by customers at
16 unprecedented levels. Customer parcipation continues to exceed curnt fundig. The
17 Company's request tres-up its natual gas taff rider to a level to meet customer demand
18 and reduce existing negative balances, while providing fundig for futue energy efficiency
2 The Tota Resoure Cost Test measures the net costs of a demad-side management progr as a resource
option based on the tota costs of the progr, including both the parcipants' and the utility's costs. The
Program Administrtor Cost Test measures the net costs of a demand-side management program as a resource
option based on the costs incurrd by the program administrtor (including incentive costs) and excluding any
net costs incurrd by the parcipant. The benefits ar similar to the TRC benefits. Costs ar defined more
narowly.
3 Ths customer, based on their own initiatives, spent $4.2 millon on energy effciency projects of which Avista
contrbute $247,00. Avista's contrbution of $247,00 divided by the 104,00 therms of savings frm these
projects results in a $2.36 per first yea therm utility incentive investment, in comparson to an avoided cost
value of approximately $10 for a therm of the measur life associate with those projects. Apar frm ths
customer, the TRC and UCT benefit cost ratios are 1.16 and 2.64 respetively. Therefore, except for the one
customer, the natu gas DSM portolio passes both the TRC and UCT tests.Application of A vista Corporation Page 9
Case No. AVU-G-I0..oÀ
1 programs. Energy efficiency remains ihe lowest cost new resource and al customers benefit
2 by its acquisition.
3 The estimated anual revenue change associated with ths filing is approximately $1.6
4 millon for natual gas. The tota proposed surcharge under Schedule 191 wil be
5 approxiately 2.6% of biled rates. Ths proposed rate wil have an average monthy bil
6 impact to residential customers using 66 therms of $ 1 .52.
7
8 VI. CUSTOMER NOTICATION
9 Notice to the public of the proposed rates and charges, pursuant to IDAPA
10 31.21.02.102, wil be given simultaeously with the filing of the Application by postig a
1 1 notice at each of the Company's distrct offices in Idao, and by a media release, both of
12 which are attached as Attchment A. Notice of proposed rates wil also be given to all Idaho
13 customers by individual bil insert as required by rule. The proposed effective date is April 1,
14 2010.
15
16 VI. CONCLUSION
17
18 WHREFORE Applicant respetflly requests the Commssion issue its
19 Order finding the proposed rates and charges in Schedule 191 attahed to ths Application as
20 Attchment B to be fai, just, reasonable and nondiscriminatory, and effective for natura gas
21 service rendered on and afer April 1, 2010, with ths application being processed under
22 Modfied Procedur.
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24
Application of A vista Corpration
Case No. A VU-G-lO'-o~
Page 10
10
1
2
3 DATED at Spokae, Washington, ths 12th day of Februar, 2010.
4
5 AVISTA CORPORATION
6
7 ?' ~,.vo
8 By
9 Kelly O. Norwoo
Vice President, State and Federa Regulation
Application of A vista Corporation
Case No. AVU-G-lO -o~
Page 11