20201125Application.pdf

Avista Corp.
l4l I East Mission P.O. Box 3727
Spokane, Washington 99220-0500
Telephone [phone]
Toll Free 800-721-9170
RECEIVED
2L2LNovember 25, PM 2:25
IDAHOPUBLIC
UTILITIES COMMISSION
November 25,2020
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. ChindenBlvd.
Bldg. 8, Suite 201-A
Boise,Idaho 83714
AVU-G-20-08
Re:Avista Corporation Application for Determination of 2018-2019 Natural Gas Energy
Efficiency Expenses as Prudently Incurred
Dear Ms. Noriyuki:
Enclosed for filing with the Commission is the Application of Avista Corporation, dba
Avista Utilities (Avista or "the Company"), requesting a determination of prudence for the
Company's natural gas energy efficiency expenditures from January 1, 2018 through December
3l , 2019 . Also included in this filing are Exhibit Nos. I -3 in support of the Application, containing
Avista's 2018 Annual Conservation Report,2019 Annual Conservation Report, and the
Company's third-party Impact Evaluation Reports of its natural gas energy efficiency programs
for 2018-2019.
If you have any questions regarding this filing, please contact Dan Johnson, Director of Energy
Efficiency, at (5 09) 49 5 -2807 or dan. i ohnson@ avi stacorp. com.
Sincerely,
lolsnaa,rr gar.W
Shawn Bonfield
Sr. Manager of Regulatory Policy & Strategy
Avista Utilities
509-495-2782
shawn. bonfi eld@ avistacom. com
Enclosures
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DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
T4II E. MISSION AVENUE
P.O.BOX3727
SPOKANE, WASHINGTON 99220 -37 27
PHONE: (s09) 49s-4316
IN THE MATTER OF THE APPLICATION OF
AVISTA CORPORATION FOR A
DETERMINATION OF 20 1 8-20 1 9 NATURAL
GAS ENERGY EFFICIENCY EXPENSES AS
PRUDENTLY INCURRED
David J. Meyer, Esq.
Vice President and Chief Counsel for
Regulatory and Governmental Affairs
Avista Corporation
P.O.Box3727
Application of Avista Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. AW-c-20-6
APPLICATION OF
AVISTA CORPORATION
18 I.INTRODUCTION
19 [n accordance with IDAPA 3 I .0 I .01 (Rules of Procedure, or RP), RP 052 and RP
20 201, et seq., Avista Corporation, doing business as Avista Utilities (hereinafter Avista or
2I Company), hereby respectfully requests that the Idaho Public Utilities Commission
22 (Commission) issue an order designating Avista's natural gas energy efficiency
23 expenditures from January l, 2018 through December 3l,2llg, in the amount of
24 $2,896,986, as prudently incurred.
25 The Company requests that this filing be processed under the Commission's
26 Modified Procedure rules through the use of written comments.
27 Communications in reference to this Application should be addressed to:
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Shawn J. Bonfield
Senior Manager, Regulatory Policy & Strategy
Avista Corporation
P.O.Box3727
141I E. Mission Avenue, MSC-27
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1411 E. Mission Avenue, MSC-7
Spokane, WA 99220-3727
Phone: [phone]
david.meyer@avi stacorp. com
Spokane, WA 99220-3727
Phone: [phone]
shawn.bonfield@ avistacorp. com
5 The Company has included the following attachments in support of this filing,
6 which are also referenced below:
7 a) ExhibitNo. 1 -Idaho2018and20lgNaturalGaslmpactEvaluations
g b) Exhibit No. 2 - Avista 2018 Idaho Annual Conservation Report
g c) ExhibitNo. 3 - Avista 2019Idaho Annual Conservation Report
10 II. BACKGROT]ND
11 Avista has continuously offered energy effrciency services since 1978. Through
12 these offerings, the Company seeks to provide customers with programs and information
l3 that may help them manage their energy use and to utilize cost-effective energy efficiency
14 resources to meet the energy and demand needs of the Company's electrical and natural
15 gas systems. These efforts are funded through Avista's Electric and Natural Gas Energy
16 Efficiency Rider Adjustments (Schedule 91 and Schedule 191, respectively), or tariff
17 riders.
18 The Company's Energy Efficiency Programs (Programs) consist of options for
lg residential, non-residential and low-income customer segments. These Programs are
Z0 offered through traditional prescriptive channels along with site-specific projects and
2l upstream buy-down programs. Each Program in the Company's natural gas Energy
22 Efficiency Portfolio (Portfolio) is designed to meet cost-effectiveness requirements and
23 is evaluated by a third-party evaluator.
2Application of Avista Corporation
I III. NATURAL GAS PROGRAM EXPENDITURES
2 The Company requests Commission determination that the expenditures incurred
3 during the 2018-19 Program years, totaling $2,896,986 for Idaho's natural gas Energy
4 Efficiency Programs, were prudent and in the public interest. Of the total amount spent,
5 $2,263,689, or 78o/o, of total expenditures were paid out to customers in direct incentives.l
6 This percentage does not include additional benefits such as technical analyses provided to
7 customers by the Company's Energy Efficiency engineering staff or regional market
8 transformation efforts through the Northwest Energy Efficiency Alliance (NEEA).
9 The Company reports the Schedule l9l balance on a monthly basis to
l0 Commission Staff and its Energy Efficiency Advisory Group (Advisory Group). At
ll December 31,2017, Avista's natural gas Programs had an overfunded balance of
12 $180,889. During 2018, the Programs incurred costs in the amount of $1,279,666, while
l3 tariffSchedule 191 collections totaled $I,332,964, resulting in additional overfunding for
14 a total balance of $234,187 at December 31,2018. However, the overfi.rnded balance
15 decreased to $78,073 by December 31, 2019, as Program expenditures outpaced
16 collections by $156,1 14, totaling 51,617,320 and $1,461,206, respectively.
17 The following Table No. I illustrates the balances for the 2018 and 2019 program
18 years on a monthly basis.
19 Table No. 1
Accounting
Period
Beginning
Balance
Program
Expenditures
Tariff
Collections
Ending
Balance
Jan 2018 ($180,889)$109,956 ($230,692)($301,625)
Feb 2018 ($301,625)$52,253 ($181,721)($431,094)
Mar 2018 ($431,094)$115,200 ($192,239)($508,132)
Apr 2018 ($508,132)$80,240 ($138,897)($566,789)
| $1,321,862 in incentives were paid to customers in 2018 and $941,g27 in 2019.
3Application of Avista Corporation
May 2018 ($566,789)856,726 ($69,186)($579,249)
Jun 2018 ($579,249)$t74,591 ($37,098)($441,756)
Jul 2018 ($441,756)$88,835 ($34,262)($387,183)
Aue 2018 ($387,183)$61,837 ($28,254)($353,600)
Sep 2018 ($353,600)$72,311 ($28,254\($309,543)
Oct 2018 ($309,543)$127,425 ($71,834)($253,953)
Nov 2018 ($253,953)$90,486 ($120,301)($283,767)
Dec 2018 ($283,767)$249,806 ($200,226)($234,1 88)
Jan2019 ($234,188)$t26,374 ($214,477)($322,291)
Feb 2019 ($322,291)$63,490 ($229,875)($488,676)
Mar 2019 ($488,676)$125,209 ($235,145)($598,611)
Lpr 2019 ($598,611)$136,254 ($126,556)($588,913)
May 2019 ($588,913)$146,874 ($73,947)($515,987)
Jun 2019 ($515,987)$103,468 ($41,352)($453,870)
Jul2019 ($453,870)$t22,685 ($34,014)($365,199)
Aug 2019 ($365,199)$155,134 ($29,849)($239,914)
Sep 2019 ($239,914\$119,454 ($32,750)($153,210)
Oct 2019 ($153,210)$192,393 ($86,213)($47,030)
Nov 2019 ($47,030)$167,368 ($15 1,147)($30,809)
Dec2019 ($30,809)$158,617 ($205,881)($78,073)
1 IV.ENERGY EFFICIENCY SAVINGS AND COST EFFECTTVENESS
Z From January 1, 2018 through December 31, 20L9, the Company achieved
3 464,718 therms of savings on a gross basis. Table No. 2 details the energy savings by
4 residential, non-residential and low-income sectors, which make up the Company's
5 natural gas Energy Efficiency Portfolio.
6 Table No.2
Program Sector 2018 -2019 Gross Verifi ed
Savings (therms)
Residential 387,75r
Nonresidential 68,263
Low lncome 8,704
Total Portfolio 464,718
7 Avista judges the effectiveness of its natural gas Portfolio based upon a number
8 of metrics, including analyses utilizing four specific metrics to evaluate the cost-
4Application of Avista Corporation
I effectiveness of a given program from both the Company's and from customers,
2 perspectives: the Utility Cost Test (UCT),2 the Total Resource Cost (TRC), the
3 Participant Cost Test (PCT), and the Ratepayer Impact Test @IM). One of the most
4 commonly applied metrics to provide insight into the net value of natural gas savings to
5 all customers is the UCT, which is a benefit-to-cost test from the utility perspective that
6 includes incentives and excludes net costs and non-energy benefits (NEBs). Avista,s cost-
7 effectiveness goal for both the electric and natural gas Program Portfolios is to have a
8 UCT above 1.00, which indicates that the benefits to the utility exceed the costs of
9 implementing the program. Based on gross reported savings, the overall natural gas
l0 Program Portfolio achieved a UCT ratio of 2.123 for 2018 and a UCT ratio of 1.50 for
I I 2019. The cost-effectiveness metrics are included in Table No. 3 below:
12 Table No.3
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Cost-Effectiveness Test 2018 2019
Cost Test 2.12 r.50
14 V. ENERGY EFFICIENCY TARGETS
15 The Company's energy efficiency targets are established in the process of
16 developing the Natural Gas Integrated Resource Plan (IRP). The targets derived through
17 the resource planning efforts provide a starting point for program planning which is
18 accomplished through the annual business planning process where program offerings are
19 optimized for the Company's service territory based on current economic and market
20 conditions.
2 Also known as the Program Administer Cost (pAC) test.
3 See Exhibit No. 2 - Avista 2018 Idaho Annual Conservation Report; page l2,Table l0 contains the
correct UCT for the natural gas Portfolio cost-effectiveness results, 2.12.The associated paragraph states,incorrectly, a 2.15 UCT for 201 8.
Application of Avista Corporation 5
I The results of Avista's natural gas Energy Efficiency Programs exceeded the 2018
2 and 2019 IRP targets established as part of this IRP process, as shown in Table No. 4
3 below. Idaho Energy Efficiency savings for 2018 were247,756 therms, which surpassed
4 the natural gas savings target of 246,440 therms by 101%. For 2019, the Company
5 accomplished 68% of its 320,830 therm target, reporting annual energy savings of
6 2l6,g6}therms. Avista's Idaho 2018 and 2019 Natural Gas Impact Evaluations have been
7 included as Exhibit No. 1 to support these figures.
8 Table No.4
9 Time Period of
Reported Savings
Local Evaluated
therm Savings
IRP Target Percent
Achieved
2018 247,756 246,440 l0lo/o
2019 216,962 320,830 680/o
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13 VI. PROGRAM EVALUATION
14 In addition to the cost-effectiveness analyses conducted for each Program, Avista
15 also contracts with independent, third-party consultants to provide program Evaluation,
16 Measurement, and Verification (EM&V) activities. These EM&V activities are used to
17 validate and report verified energy savings related to its energy-efficiency measures and
l8 progrilms, as well as provide viable recommendations to improve progrcm performance,
lg enact changes to programs, and decide whether and when to phase out measures'
20 For both the 2018 and 2019 Program years, Cadmus was retained by Avista to
2l perform an impact and process evaluation on Avista's natural gas Energy Efficiency
22 programs. The primary goal of the impact evaluation is to provide an accurate srunmary
23 of the gross energy and demand savings attributable to Avista's Portfolio. The main
Application of Avista Corporation 6
1 purpose of a process evaluation is to identi$, any improvements needed at the portfolio
2 level to increase program effectiveness and efficiency.
3 As part of its 2018-19 evaluations, Cadmus concluded that Avista's Idaho natural
4 gas Programs achieved 464,718 therms in 2018-2019 cost-effectively and that Avista's
5 2018-2019 programs addressed all impact and process evaluation needs in accordance
6 with industry and regulatory standards.a
YIII. REOUEST FOR RELIEF
As described in greater detail above, Avista respectfully requests that the
Commission issue an Order designating Avista's 2018 and 2019 total natural gas
Energy Efficiency expenditures of $2,896,986 as prudently incurred, with this
Application being processed under Modified Procedure through the use of written
comments.
Dated at Spokane, Washington this_25ft day of Nqyelqba{_ 2020.
AVISTA CORPORATION
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n_v,,,44@ -' 4-David J. Meyer
Vice President and Chief Counsel for
Regulatory and Govemmental Affairs
4 See Exhibit No. l, Cadmus' Idaho 2018 and 2019 Natural Gas Impact Evaluations
Application of Avista Corporation 7