20160812Imlach Direct.pdf

Ronald L. Williams, ISB No. 3034
Williams Bradbury, P.C.
1015 W. Hays St.
Boise, ID 83702
Telephone: [phone]
Email: [e-mail]

Attorneys for Intermountain Gas Company

BEFORE THE IDAHO PUBLIC UTILITES COMMISSION

IN THE MATTER OF THE APPLICATION OF
INTERMOUNTAIN GAS COMPANY FOR
THE AUTHORITY TO CHANGE ITS RATES
AND CHARGES FOR NATURAL GAS
SERVICE TO NATURAL GAS CUSTOMERS
IN THE STATE OF IDAHO

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Case No. INT-G-16-02

DIRECT TESTIMONY OF CHERYL IMLACH

FOR INTERMOUNTAIN GAS COMPANY

August 12, 2016

Imlach, Di 1
Intermountain Gas Company

I. INTRODCUTION 1
Q. Please state your name and business address. 2
A. My name is Cheryl Imlach. My business address is 555 S. Cole Road, Boise,
Idaho. My e-mail address is [e-mail].
Q. By whom are you employed and in what capacity?
A. I am employed by Intermountain Gas Company (“Intermountain” or the 6
“Company”) as the Manager of Energy Utilization. In this capacity, I have been
tasked with leading the operation and tactical implementation of the Company’s 8
emergent Demand Side Management (DSM) efforts and associated rebate
program. I lead the Company’s economic and technological development efforts.
I am also in charge of forecasting customer growth for integrated resource
planning.
Q. How long have you been employed by the Utility Group? 13
A. I have been with Intermountain for 24 years starting first as a Consumer Specialist
in the Southeast section of IGC’s service territory. In 2005, I was promoted to
Manager of Treasury Services. In 2007, I became the Manager of Revenue
Accounting. My current title is Manager of Energy Utilization, a role which I
began in 2016.
Q. What are your educational and professional qualifications?
A. I am a graduate of Idaho State University where I earned a bachelor’s degree in 20
business administration in 1992 and an M.B.A in 2002. I have extensive
experience in both financial management and fiscal oversight in the utility sector.

Imlach, Di 2
Intermountain Gas Company

I am also well versed in the tactical implementation of efforts designed to
encourage efficiencies through the direct use of natural gas.
II. SCOPE AND SUMMARY OF TESTIMONY 3
Q. What is the purpose of your testimony in this docket?
A. My testimony will cover three primary areas. First, I will discuss the feasibility of
operating a residential conservation rebate program and the preparations
Intermountain has made to launch this effort. Next, I will offer a detailed
description of our proposed program ramp-up. Lastly, I will describe anticipated
program benefits and predicted results.
Q. Are you sponsoring any exhibits in this proceeding?
A. No, although I participated in the preparation of Original Tariff Sheet No. 16,
Rate Schedule DSM (DSM Tariff), which is the Company’s proposed Tariff that
would obtain demand side resources through rebates for select energy efficiency
equipment and upgrades. This proposed DSM Tariff sheet is part of Exhibits 30
and 31 sponsored by Company witness Michael McGrath.
III. FEASIBILITY OF DEMAND SIDE MANAGEMENT AND 16
ASSOCIATED PREPARATIONS
Q. What steps has the Company taken in preparation of the launch of a 18
residential conservation rebate program in Intermountain’s service area? 19
A. As explained in the testimony of Ms. Spector, the Company has performed an
assessment of both its total DSM potential and the cost effectiveness of offering
rebates for residential conservation measures. In addition, the Company has also

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Intermountain Gas Company

performed a desk audit of similar rebate programs in the State of Idaho including
both Avista and Idaho Power’s energy conservation efforts.
Intermountain has also held meetings with its district employees to ensure
that the measures in its portfolio were not already saturated in the local markets,
and that rebate levels are meaningful from an “on-the-ground” perspective.
Feedback from district staff ultimately drove the Company to make changes to
their initial program design, raising minimal efficiency levels from .64 to .67 for
water heaters and for 91% Annual Fuel Utilization Efficiency (AFUE) to 95%
AFUE for furnaces. Feedback from the districts also provided a better
understanding of the incremental costs associated with upgrades from standard
efficiency to high efficiency natural gas equipment in Intermountain’s service
area.
The Company has also met with local area HVAC contractors and builders
to better understand what natural gas equipment is available on the market today
and how to assist those contractors and builders in the selection of more energy
efficient measures and equipment.
Finally, Intermountain has developed a comprehensive set of trade ally
and rebate eligibility guidelines that will be used to govern the program, after
hoped-for approval by the Commission.
Q. What is the current demand for high-efficiency natural gas equipment and 20
ENERGY Star homes in Intermountain’s service are?
A. Within the residential market, there is currently a mix of older equipment, and
lower-grade energy efficiency measures being utilized by customers. While

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Intermountain Gas Company

energy efficient upgrades are not uncommon in the Boise metropolitan area,
anecdotal feedback suggests that penetration is inconsistent, and lower efficiency
equipment is still readily available to IGC customers, contractors and builder.
There is likewise a strong opportunity to increase the presence of energy efficient
equipment and ENERGY Star homes in other parts of the service area as well.
Q. What impacts do you anticipate your program will have on the residential 6
sector?
A. Making rebates available for energy-efficient natural gas equipment and
ENERGY Star homes will drive increased sales of these essential upgrades,
leading to energy savings that would have not been otherwise achieved without
the program. Other gas utilities in the northwest have achieved consistent energy
savings through rebates for energy efficiency measures. The Company believes
this momentum can be replicated in Intermountain’s service area in Idaho. More
specifically, based on the Company’s TEAPot modeling results, blended with 14
feedback from district staff, and area contractors, Intermountain believes it can
achieve a therm savings target of 65,000 therms with a stretch goal of 97,8235 as
described in the testimony of Ms. Spector. This savings will be achieved by using
rebates to encourage the purchase of energy efficient natural gas space and water
heating equipment and ENERGY Star homes in the residential sector.
Q. How will success resulting from this program be measured? 20
A. Success means that the Company has met or exceeded its programmatic therm
savings targets, and that the program’s pre-screened measures have been
performed safely, in accordance with industry best practices.

Imlach, Di 5
Intermountain Gas Company

The program metrics that will be used to determine performance will
include total therm savings achieved; Utility Cost Test (UCT) results in relation to
the $0.531 threshold; total conversions to high-efficiency natural gas equipment
directly attributable to the Company’s rebate program; total number of ENERGY 4
Star homes directly attributable to the Company’s rebate program; and the results
of any quality assurance inspection outcomes.
Q. How does the Company intend to directly attribute natural gas savings to 7
your conservation rebate program? 8
A. Natural gas savings will be considered directly attributable to the Company’s 9
natural gas conservation program if it is associated with a successfully completed
conservation incentive application for a rebate eligible measure. The Company
will be using deemed therm savings based from the appropriate climate zone
programmed in the TEAPot model. The risk of free ridership associated with
customers applying for incentives for equipment they would have otherwise
installed will be mitigated in the ways described within the testimony offered by
Ms. Spector.
Q. What will the Company do once the measures in its portfolio achieve market 17
transformation in Intermountain’s service area?
A. Measures eligible for incentive as part of the Company’s conservation rebate 19
program will be examined on an ongoing basis to ensure that they support the
most efficient technologies available on the market within Intermountain’s service
area. In the event that a measure becomes saturated into the local market, or

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Intermountain Gas Company

becomes mandated by code, the Company will replace it with a higher-tier energy
savings measure as they become available.
IV. PROGRAM RAMP UP AND DELIEVERY
Q. Please describe the first 90 days of operation for your conservation rebate 4
program, if approved. 5
A. Following the approval of the Company’s DSM program, Intermountain will file
for the collection of costs as described in Ms. Spector’s testimony. Upon approval
of the recovery mechanism, the Company will issue a solicitation for two new
staff to support daily program operation and implementation.
As Manager of Energy Utilization, I will oversee this process and provide
ongoing management and oversight to the DSM team. We will meet with our
district team to finalize all program terms and conditions, and to ensure that they
have the resources necessary to explain the program to customers and area
contractors. We will provide easy-to-complete rebate applications for distribution
by our district and program staff, and for distribution to local contractors. We will
convene meetings with area contractors to launch a residential trade ally program
to encourage partnership with the HVAC and builder communities on the sale of
high-efficiency natural gas equipment and ENERGY Star homes over standard-
efficiency alternatives. We will have an enrollment campaign to invite all well-
qualified contractors to participate in our trade ally program. We will perform
ongoing monitoring of work and will gather customer feedback to ensure that the
program operates as intended.

Imlach, Di 7
Intermountain Gas Company

While program ramp-up is taking place, the Company will concurrently
implement internal best-practices for rebate processing and data collection to
ensure that customer rebate requests are processed in a timely manner, and that
we are able to report all program findings and outcomes with maximum
transparency and clarity. We will also train our call center staff to ensure they are
prepared to answer customer questions about our energy efficiency rebate
program and to refer customers to the appropriate departmental contacts.
Q. Please describe the guidelines that will be associated with this program and 8
how they will be enforced. 9
A. Intermountain has developed terms and conditions that will govern the operation
of its rebate program. The program will be available to residential customers who
use natural gas as their primary space or water heating fuel. Natural gas must be
the space heat fuel for all space heating applications. Natural gas must be the
water heat fuel for all water heating applications. Energy savings equipment must
meet the program requirements specified in the program’s terms and conditions. 15
Rebate eligible measures will be performed through licensed & bonded
contractors. A Trade Ally program will help enforce best practices in equipment
installation, and ensure a commitment to assisting customers through the rebate
application process.
All rebate applications will be subject to verification and review, including a
review of all associated invoices. Staff will be available to perform both
randomized and targeted quality assurance inspections as appropriate. Trade

Imlach, Di 8
Intermountain Gas Company

Allies whose work does not pass QC inspection will be removed from the
program.
Q What existing resources are available to the Company for program delivery? 3
A. In addition to the in-house expertise harnessed for our DSM analysis and the
design of our rebate portfolio, we have the following resources available to
support our rebate program:
First, we have an Energy Utilization management position, which I now
hold with the Company. In this capacity, I will be overseeing the practical
implementation and daily operation of our program.
Second, we have customer-facing Company staff in each district served by
the Utility that have been instrumental in providing feedback to ensure the smooth
integration of this effort into their day-to-day operations. They will be thoroughly
trained on all rebate program guidelines and requirements and will be available to
answer customer questions, and provide support to area contractors.
Third, we have an existing program that has been used to promote
efficient natural gas equipment in partnership with area contractors. We intend to
increase the focus of this program to focus on the measures available under our
DSM rebate portfolio. This will serve as a starting point from which we will be
able to launch a more comprehensive trade ally program effort.
Fourth, as stated earlier, Intermountain’s Customer Service team will be
trained on all aspects of our rebate program and will be available to answer
customer questions and refer them to the appropriate program contacts.

Imlach, Di 9
Intermountain Gas Company

Finally, we have ongoing customer outreach materials such as our
monthly bill-stuffers that will contain messaging designed to encourage additional
program participation.
V. ANTICIPATED BENEFITS AND OUTCOMES
Q. What are the anticipated outcomes & associated benefits of the Company’s 5
conservation rebate program?
A. The anticipated outcome of the Company’s rebate program is an energy savings
achievement 65,000 therms in the first year with a stretch target of 97,825 therms
based on the TEAPot’s model of Achievable potential. Intermountain also
anticipates a gradual increase in the availability of high-efficiency natural gas
space and water heating equipment and ENERGY Star homes in its service area,
which will be encouraged through partnership with area contractors.
Benefits associated with the Company’s rebate program include the cost-
effective acquisition of demand side resources for load management;
environmental benefits and increased efficiencies associated with the direct use of
natural gas that was described in detail in the testimony of Mr. Kirschner; and
direct benefits to participating homeowners such as increased comfort and lower
energy bills than if the program were not in existence.
Q. Does the Company anticipate a limit to the amount of DSM potential in its 19
service area? 20
A. While there is a finite level of DSM potential for any given measure within an
energy conservation portfolio, housing stock will continue to age over time, and

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Intermountain Gas Company

technologies will continue to evolve, offering additional opportunities for energy
efficiency, which the Company will explore on an ongoing basis.
Q. Does this conclude your testimony?
A. Yes it does.