20170915NW Energy Coalition Comment.pdf

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NW Energy Coalition
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September 15,2017
CASE NO. INT-G-17-03,In the Matter of the Application of
Intermountain Gas Company for Authority to Implement a Demand
Side Management Program Funding Mechanism and Charge
Honorable Commissioners :
Please accept these comments of the NW Energy Coalition in response to
Intermountain Gas Company's (lGC) application for authority to
implement a demand-side management program funding mechanism and
charge. The Coalition appreciated the opportunity to provide input as an
intervener in IGCs recent rate case (Case No. INT-G-16-02) and we look
forward to working with both the Commission and IGC as their DSM
program progresses. It is our understanding that in Order 33757 the
Commission authorized IGC to move forward with a DSM program.
However, due to the denial of the request for a Fixed Cost Collection
Mechanism (FCM), the Company must still establish a means to recover
the costs of the formation and implementation of a DSM program.
First and foremost, the Coalition is pleased that IGC is beginning to
recognize the value of energy efficiency to its customers and has begun the
process of creating a DSM program.
As such, the Coalition supports establishing the funding mechanism laid
out by IGC, whereby the company will: l) submit a budget of anticipated
expenses, including any surplus or deficit from previous year; 2) seek
prudency review by Commission and stakeholders; and 3) establish the
DSM charge by dividing the annual budget by normalized therm sales.
Any increase in rates as a result of investment in cost-effective energy-
efficiency is inherently less than investment in procurement and delivery
of increased natural gas. Additionally, and perhaps more importantly,
investments in cost-effective DSM during a period of low natural gas
prices will pay off in multiples if and when natural gas prices rise in the
future.
The Coalition continues be concemed that IGCs DSM program, as
proposed, is more of a fuel-switching program, encouraging electric users
of Northrest lndiaB
br RotiEd Acton
to switch to direct use of natural gas, rather than a full-fledged DSM program. A natural gas
DSM program encourages the reduction of natural gas use, and helps to alleviate increased costs
due to load growth. The DSM program as proposed by IGC, however, has at least the possibility
- if not probability - of leading to increased therm sales, thereby eliminating the long-term cost
benefits of the investments. We look forward to seeing more information on usage of Tier 1
(existing gas applications, lower rebates) vs Tier 2 (fuel-switching applications) rebates in
subsequent filings.
Furthennore, we continue to express concern that IGC is not attempting to capture all cost-
effective energy efficiency on its system. We understand that a DSM program takes time to rarnp
up, and that not all applicable DSM programs can be undertaken immediately. Yet, IGC makes
no attempt in this filing to budget for a third-party Conservation Potential Assessment, a
necessity to understand how much DSM is available on the system and what programs would
capture that DSM quickly and cost-effectively. It should be noted that IGCs in-house CPA does
not come close to industry standards or best practices and is vitally flawed on multiple levels (for
example, the in-house CPA does not even take the first step of establishing technical potential on
the company's system, thereby rendering the rest of the study useless).
In Case INT-G-16-02, Cornpany Witness Spector stated in her rebuttal testimony on pages 9-10
that,
"lntermountain would be amenable to researching costs associated with certain
additional measures including showerheads and [faucet] aerators as part of its
early rebate offerings, given sufficient time to find a cost-effective retailer for
this measure, and to ramp-up our ability to process applications for this measure
and distribute via mail as appropriate. In addition, duct sealing, air infiltration,
and insulation measures should all be studied and considered, once the program
has been fully ramped up. has sufficient time to mature, and a FCCM has been
put into place."
The Coalition agrees with the majority of this statement, except that the implernentation of these
measures should be studied and considered once the program has been "fully ramped up." We
see no reason to wait and we are disappointed to see that the company has yet to make an effort
to include these easily achievable measures in its DSM program. We hope the company, even
absent the FCCM, will seek to include costs for a full, comprehensive DSM program in
subsequent filings. The FCCM should not be a prerequisite for a DSM program; rather, if the
company sees significant load reduction due to their DSM efforts, the Coalition would
enthusiastically support another attempt to institute the decoupling mechanism.
IGC has also signaled support for the formation of a Conservation Advisory Committee as well
as the need to address the needs of low-income customers. Again, neither of these is included in
the initial funding mechanism proposal. Considering the Cornpany has a long way to go in
establishing a robust DSM program, the Coalition encourages the Comrnission to direct IGC to
immediately form an advisory committee to assist the company in the rollout of a Conservation
Potential Assessment and overall program design based on the results of the CPA.
Significantly, low-income customers pay into DSM programs yet rarely see the benefits due to
lack of ability to invest in energy efficient applications and increased upfront costs. It is vital that
IGC address the needs of these customers by establishing a separate structure that provides for
energy efficient applications to be installed in homes with little or no cost to the customer.
In conclusion, the Coalition currently supports the DSM funding mechanism as put forth by IGC
in order to jump-start the company into action on DSM, but future support for the use of
customer funds to pay fbr the program will be based on the company's ability to significantly
ramp up its efforts over the next year. We encourage the Commission to push IGC to join the vast
rnajority of utilities across the region in acquiring all cost-effective DSM as quickly as possible.
Thank you for the opportunity to comment on this matter
Sincerely,
F. Diego Rivas
Senior Policy Associate
NW Energy Coalition
811 1st Ave. #305, Seattle, WA 98104 . [phone] . [phone] fax
www.nwenergy.Qrg . [e-mail]