20140306ICL Comments.pdf

Benjamin I. Otto (ISB No. 8292)
710 N 6'h Street
Boise, ID 83701 ,;:ll,: ,,:ii *.: iii ;lt I j
Ph: [phone] x12
Fax [phone] :,-:,[e-mail] i: I
Attorney for the Idaho Conservation League
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPoRATION'S APPLICATION FOR A ) CASE NO. AVL,-E-13-09
FINDING THAT IT PRUDENTLY ) AW-G-13-02
TNCURRED rTS 2oto - a0L2ELECTRrC )
AND NATURAL GAS ENERGY ) COMMENTS OF THE IDAHO
EFFICIENCY EXPENDITURES. ) CONSERVATION LEAGUE
The Idaho Conservation League (ICL) recommends the Commission find Avista's 2010 -
2012 energy efficiency expenditures were prudently incurred. While Avista's testimony and
exhibits filed in this case do raise several important issues, these are more appropriate to resolve
on a prospective basis. The primary reason ICL supports a finding of prudency despite these
issues is that prudence is measured "based on the information available at the time the decision is
made."rAs more or new information becomes available that draws into question the prudency of
an investment, the role of the regulator is to ensure the utility is "aware of changing conditions
and to take corrective actions to mitigate negative impacts on its customers[.]"2 The record in
this case demonstrates that Avista is attempting to adapt efficiency programs in a time of
changing information.
While this adaptation could happen faster and with increased transparencF, the
shortcomings identified in the testimony and exhibits do not support a finding of imprudence.
Two primary issues raised by Cadmus, the independent evaluator, were inadequate data
collection procedures in various programs and the lack of senior-level decision maker in site-
' Order No. 27877,IPC-E-98-12.
2 Id.
specific programs. ICL notes that Avista Witness Drake identifies some of the process
improvements recommended by Cadmus, but does not provide a timeline for addressing these
recommendations.3ICL recommends the Commission direct Avista to develop benchmarks and
a timeline for addressing these process improvements, along with the Energy Efficiency Advisory
Groupn by the end of 2014.
After reviewing the testimony and Exhibits in the case, ICL believes Avista prudently
operated the suite of Demand Side Management Programs during 2010-2012.ICL defers to the
detailed and precise accounting review performed by the Commission Staffto determine the
exact dollar amounts under consideration. Upon reviewing the DSM report filed as Exhibit 2 to
witness Drake's testimony ICL notes some individual programs had a Total Resource Cost (TRC)
result below 1.0. However, ICL submits the current calculation of TRC results is inaccurate and
insufficient to base a prudency determination on. The primary reason is the TRC, as applied in
Idaho, does not capture all the know benefits to balance out the costs. As witness Hermanson
states Avista only included "documented and quantifiable" non-energy benefits even though
"there are a number of legitimate non-energy benefits" that accrue to program participants.s
Under counting benefits hobbles the pursuit of all cost effective energy efficienry.
ICL offers two possible solutions to this program. First, the Commission could include a
10%o conservation adder to roughly account for the non-energy benefits. The Staffand
Commission endorsed providing utilities the option of using this adder in reviewing low-income
weatherization programs.u ICL submits the logic behind using a conservation adder for low
income programs supports extending this option to all energy efficiency programs with known,
3 Direct Testimony of Drake at 19 - 21.
' ICL is a member of the EEAG, but do to budget constraints does not regularly attend the meetings. Mr. Folsom,
on page 13 of his direct testimony, identifies the "Idaho Rivers Alliance" as a member of the EEAG, but no such
group exists.) Direct Testimony of Hermanson at 7.
u O.der 32788 at4, GNR-E-12-01; Staff Report at 5, GNR-E-12-01
but difficult to measure, non-energy benefits. The 10%o adder is a policy decision routinely
applied in our region that represents a reasonable approximation og the myriad of non-energy
benefits. Including a l0o/o adder will increase to accuracy and validity of the TRC test.
The second option is to focus prudency reviews on the Program Administrator Cost
(PAC) test. This test focuses on the costs and benefits that accrue to the utility. T ICL submits this
is a more accurate measure of the value of energy efficiency programs. The Total Resource Costs
test captures costs paid by customers to participate in Avista's efficiency programs.t While
understanding the costs of participation is important, the choice to spend this money is entirely
in the discretion of individual customers. Offering an efficiency program with a TRC below 1 but
a PAC above one cannot harm non-participating ratepayers. Eliminating a program with a TRC
below I and a PAC above 1 denies Idahoans options to address their energy needs. ICL
recommends the Commission focus on the PAC results when determining the prudency of utility
investments.
In closing, ICL acknowledges Avista long-term commitment to energy efficiency
programs in Idaho. More than other Idaho utilities Avista demonstrates an enhanced
commitment to pursuing cost effective energy efficiency opportunity and proactively engages
stakeholders.
Respectfully submitted on the 66 day of March 2013
Itu
Benjamin I. Otto
Idaho Conservation League
7 National Action PIan for Energy Efficiency, Understanding Cost-Effectiveness of Energlr Efficiency Programs: Best
Practices, Technical Methods, and Emerging Issues for Policy-Makers at3-6 (November 2008).I Idat3-6.