20210225Comments.pdf

MATT HUNTER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 10655
Street Address for Express Mail:
1 I331 W. CHINDEN BLVD, BLDG 8, SUITE 2OI-A
BOISE, IDAHO 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN GAS
COMPANY'S APPLICATION FOR A
DETERMINATION OF 2019 ENERGY
EFFICIENCY EXPENSES AS PRUDENTLY
INCURRED
CASE NO. INT.G-20.06
COMMENTS OF THE
COMMISSION STAFF
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The Staff of the Idaho Public Utilities Commission ("Staff') submits the following
comments regarding the above referenced case.
BACKGROUND
On September 1, 2020,Intermountain Gas Company ("Company") applied to the
Commission for an order finding the Company prudently incurred 52,803,346 in Energy
Efficiency Program ("EE Program") expenses during 2019. The Company stated it would not
seek to adjust its Energy Efficiency Charge ("EEC") in2020.1
On October 2,2020, the Commission issued a Notice of Application that set an
October 23 , 2020 deadline for interested persons to intervene. Order No. 34801 . The Idaho
Conservation League petitioned to intervene, and the Commission granted its petition. Order
No.34804.
I The EEC is a per therm charge that funds the EE Program. In Order No. 34454, Case No. INT-G- 19-05, the
Commission approved an EEC of S0.02093 per therm.
STAFF COMMENTS FEBRUARY 25,2021I
On December 7,2020, the Company supplemented its Application ("Supplemental
Application"). Staff hereafter refers to the Company's Application, as supplemented, as the
"Amended Application."
The Amended Application amends the original Application to include the results of the
Company's recent Evaluation, Measurement and Verification ("EM&V") study and proposed
changes to the Company's EE Program based on the EM&V study's results. Additionally, the
Company seeks to revise its Residential Energy Efficiency Rebate Program tariff consistent with
its proposed changes to the EE Program. Amended Application, Exhibit No. 9. The Company
requested its proposed tariff changes take effect March 1,2021. In Order No. 34908 the
Commission suspended the effective date until April 1,2021, or until the Commission enters and
order accepting, rejecting, or modifuing the proposed tariffs.
STAFF ANALYSIS
This is the second Demand-Side Management ("DSM")/Energy Efficiency prudency
filing made by the Company since the EE Program's inception on October 1, 2017. Staff
examined the Company's Application, workpapers, 2019 Energy Eff,rciency Annual Report ("EE
Report"), EE Report exhibits, Conservation Potential Assessment ("CPA"),2 Amended
Application and exhibits, EM&V study and report, and additional information provided by the
Company through Production Request responses. The Company is seeking approval for EE
Program expenses of $2,803,3 46 for the period of January 1,2079, through December 31,2019,
as prudently incurred. Based on its review, Staff recommends the Commission approve the
Company's EE Program expenses of $2,803,346 as prudently incurred.
Staff comments address the Company's program financials, program offerings, avoided
cost, EM&V, CPA, program results, and other issues. Staff notes that the absence of any
discussions on additional points should not be construed as Staff support for the Company's
position without a full evaluation in the future.
While Staff believes the EE Program expenses of $2,803,346 were prudently incurred,
Staff also believes that some of the initial assumptions about measure savings and incentive
levels required evaluation and verif,rcation. In particular, Staff recommended in Case
No. NT-G-19-04 that program savings be evaluated by an independent third-party EM&V
2 The CPA was submitted in Case No. INT-G-19-07 as Exhibit 4.
STAFF COMMENTS FEBRUARY 25,20212
evaluator and that the Company, with input from stakeholders, adjust its avoided cost
methodology so it more accurately represents actual costs avoided through energy efficiency.
The Company presented EM&V results in an Energy Efficiency Stakeholder Committee
("EESC") meeting on September 16, 2020. The EM&V was submitted as part of the Amended
Application on December 1,2020 and is described in greater detail below.
Financial Review
Staff audited the Company's EE Program, which included a review of the Company's EE
incentives, marketing campaign, program administration, and labor expenses. Staff verified that
expenses were well documented and that internal controls appeared to be in place to prevent
improper payment of incentives and to properly record EE Program expenses. The Tariff Rider
balance, labor expenses, and calculations are described in greater detail below.
Tariff Rider Balance
Table No. 1 shows Tariff Rider activity for the calendar year 2019.
Table No. 1: Tariff Rider Reconciliation
$ (310,870)
$ 2,671,829
$ (2,803,346)
$ (442,387)
In Order No. 34454, Case No. INT-G-I9-05, the Commission approved an increase in the
EEC from $0.00367 per therm to $0.02093 per therm, effective October 1,2019. The increased
EEC, intended to reduce the underfunded rider balance, was collected for only part of 2019. The
underfunded balance increased by $131,516 in 2019, as program expenses exceeded Tariff Rider
revenue. The Company did not request a change to the EEC in this case. Staff supports
maintaining the current EEC for residential customers at this time and will monitor the fund
balance trends in the Company's quarterly updates.
STAFF COMMENTS -)FEBRUARY 25,2021
Beginning Balance, as of Janu^rV lr 2019 (underfunded)
Tariff Rider Revenue
EE Program Expenses
Ending Balance, as of December 31,2019 (Underfunded)
Labor Expenses
The Company's EE Program labor expense increased significantly to $497,726 for the
12 months ending December 31,2019 from $189,962 for the 15 months ending on December 31,
2018. The Company increased the number of its employees that charge their time to the Tariff
Rider in2019, including eight Energy Service Representatives who allocate 25oh of their work to
the EE tariff. The Company also added a Conservation Policy Manager position in 2019. Staff
believes the increase in staffing and labor expense was necessary to build up a relatively new
program but expects increases in labor expenses in future years to be more in proportion with the
growth of the whole EE Program. The total labor expense represented 17.75% of total program
expenses in2019, up from 12.1% of total program expenses over the previous 15 months.
DSM Cost-Effectiveness Test Results
The Company uses the Utility Cost Test ("UCT") as the primary test for determining the
cost-effectiveness of each measure and for the entire EE Program. The measures listed in Table
No. 2 are available to the Company's customers who receive service under the Residential Rate
Schedule.
In the original Application, overall EE Program and individual measure assessments are
shown as Pre-CPA and Post-CPA. Application at 9. Pre-CPA results reflect original EE
Program design measure inputs and were used because the CPA was not completed until mid-
year 2019. Post-CPA results reflect re-calculated therm savings and cost effectiveness based on
the CPA measure inputs. EM&V study results were included in the Amended Application and
cost-effectiveness tests were recalculated. See Table No. 2
In the original Application, the 2019 EE Program using Post-CPA results was not cost-
effective with a UCT of 0.87. However, using results from the Amended Application, the
progrtrm has a UCT of 1.3 as shown in Table No. 2. Amended Application, Exhibit No. 6.
STAFF COMMENTS FEBRUARY 25,20214
Table No. 2: DSM Measures and Cost-Effectiveness:
EM&V
In Case No. INT-G-19-04, Staff stated its concerns about the amount of reported savings
associated with the highest incented measure, the Whole Home Program. Staff recommended
that the Company develop a plan for completing an EM&V study. In Commission Order
No. 34536, the Company was directed to complete an EM&V study for all EE Program
measures
The EESC, which includes Staff members, provided insight into the scope of the
Company's first EM&V study.
To get the most value from the study, it was determined the EM&V study would
include both an impact evaluation and process evaluation. As a new program it was
important to conduct a process evaluation to identify potential areas of
improvement in program operations and delivery. The process evaluation reviewed
the entire EE Program.
Amended Application at 5.
The EESC also determined that the initial EM&V study should require an impact
evaluation on Furnace and Whole Home measures because those two measures provide the
greatest therm savings opportunities and are the major drivers of overall program costs. Based
on its CPA, the Company planned to revise or eliminate some rebates. The EESC recommended
that these rebates not be included in the EM&V study, saving the Company undo expense and
time.
STAFF COMMENTS FEBRUARY 25,20215
Measure Rebate
Amount
Measures
Installed
UCT Pre-
CPA
UCT Post-
CPA
UCT
EM&V
Whole Home Program $1,200 1,079 0.99 0.80 1.2
95% AFUE Furnace $3s0 2,066 1.15 0.97 1.5
9}%HighE Combo System $ 1,000 11 1.58 0.56 0.6
70o/oFireplace Insert $1 00 t4 1.72 0.49 0.5
.67 EF Water Heater $s0 8 1.30 r.34 1.7
.91 Condensing Tank-less Water
Heater
$ 1s0 r59 1.30 1.58 t.9
Totals 3,337 1.06 0.87 1.3
The Company retained ADM Associates ("ADM") to conduct the EM&V of its
Residential DSM program. Amended Application at 4. Overall, Staff believes that ADM's
EM&V provides a useful analysis that can be used to evaluate and improve elements of the
Residential DSM program; however, Staff is concerned by the Company's use of ADM's
simulation-based analysis, rather than its billing analysis, in its determination of the cost
effectiveness of its Whole Home Program. See Amended Application at 6. ADM's simulation-
based analysis inflated the energy savings estimates compared to the billing analysis. The
Company uses the energy savings estimates to calculate program incentive levels and future
program costs.
Staffs comments will discuss the following areas of ADM's EM&V study:
1. Billing analysis using the Impact Evaluation approach shows that annual Whole
Home Program savings are 57 therms per home, or about 28o/o of the value
determined by the Company's Conservation Potential Assessment ("CPA").
Exhibit No. 5, Table 4-1.
2. Billing analysis using the Impact Evaluation approach shows that annual Fumace
Rebate Program savings are 56 therms per rebate, or about 49Yo of the value
determined by the Company's CPA. Exhibit No. 5, Table 3-1.
3. Simulation analysis found that Whole Home Program savings are 274 therms per
home relative to a User Defined Reference Home ("UDRH") based on minimum
Federal Energy Conservation Standards.
4. Two additional analyses of the Furnace Rebate Program showed very different
results. A pre-post analysis of the same customers reflected savings tobe29.4
therms per rebate recipient, whereas application of the Equivalent Full Load
Heating hours ("EFLHh") method to new homes estimates savings to be 134
therms per rebate participant.
5. Therm consumption of Energy Star certified homes is greater than the energy
consumption of homes which received the Whole Home rebate ("Program
Homes"). Exhibit No. 5, Table Nos. 4-33 and 4-34.
Conservation Potential Assessment
The purpose of a CPA is to estimate the amount of energy savings in a utility's service
territory that can potentially be acquired. In 2018, the Company selected Dunsky Energy
STAFF COMMENTS 6 FEBRUARY 25,2021
Consultants to complete a CPA. The Company's CPA was completed in 2019 and submitted
with the 2019 IRP in Case No. INT-G-19-07. The CPA included revised program measure
assumptions for therm savings, costs, and estimated useful lives. Applying the revised
assumptions resulted in changes to cost effectiveness of all measures as shown in Table No. 2
above. Assumptions used prior to CPA completion are noted as Pre-CPA and assumptions post
CPA completion are noted as Post-CPA.
In Commission Order No. 34536, the Company was directed to immediately and
continuously monitor, evaluate, and update its EE Program incentives with the best available
data. Staff believes the use of revised (Post-CPA) data as shown in Table No. 2 was one method
the Company used to incorporate relevant and available data into its energy efficiency program.
DSM Program Measure Assessments
Whole Home Program
The Company is proposing to modifr the incentives for the Whole Home Program from
$1,200 per qualiffing home to a two-tier incentive level, $900 for Tier I and $700 for Tier IL
The Company's proposed incentive amounts were calculated using the savings estimates from
ADM's engineering analysis. By not using billing data to estimate Whole Home Program
savings, the Company is not in compliance with the Commission's final order in the Company's
last Residential DSM Prudency case, INT-G-19-04. The Commission wrote, "The deemed
savings value should be based on a comparison of actual billing data from similar new homes
constructed which received the rebate and ones that did not receive the rebate." Order No. 34536
at 5.
ADM's EM&V included a thorough and statistically sound comparison of billing data
from Program Homes and similarly constructed homes that did not receive the rebate ("Control
Group Homes"). ADM refers to this method as the Impact Evaluation approach. ADM applied
a technique called Propensity Score Matching ("PSM") to the data in order to select Control
Group Homes that, aside from their participation in the Whole Home Program, were as similar as
possible to Program Homes. T-tests and Chi-squared tests found no statistically significant
difference between the Program Homes and the PSM-matched Control Group Homes. Billing
data from these two groups were then used to create a regression model of billed therm
consumption that included predictor variables such as Heating Degree Days ("HDD") and a
variable that indicated whether or not a particular home was a Program Home or a Control Group
STAFF COMMENTS FEBRUARY 25,20217
Home. Using the Impact Evaluation approach, ADM concluded that Program Homes saved an
average of 57.5 therms annually when compared to Control Group Homes, or about 28%o of the
204 therm value determined by the Company's CPA, used to establish the current $1,200 Whole
Home incentive. Amended Application, Exhibit No. 5, Table 4-1.
ADM also performed a simulation analysis of its Whole Home Program referred to as an
o'engineering analysis" in the Company's Amended Application. Amended Application at 6-7.
Unlike its Impact Evaluation, which was based on billing data, ADM's simulation analysis
compared the simulated consumption of 59 Program Homes to a hypothetical UDRH. Response
to Production Request No. 19. Staff believes that the choice of parameters used in the UDRH is
inappropriate. Staff believes that basing the UDRH on minimum Federal Energy Efficiency
Standards rather than actual construction techniques used in the Company's service tenitory
overestimates savings and is inconsistent with Commission Order No. 34536's requirement that
savings estimates be based on a comparison of actual billing data from similar new homes.
According to the Company, "...the average non-program home in Intermountain's service
territory exceeds amended IECC 2012ldaho building code standards." Amended Application at
6. Using the simulation analysis, ADM concluded that the Program Homes saved an annual
average of 274 therms per Program Home, or about five times the savings determined by the
Impact Evaluation's billing analysis.
The average per-home consumption established during the Company's last rate case was
698 therms per year. This figure is based on consumption of all housing within the Company's
service territory, including new homes and vintage housing stock. By contrast, ADM's
hypothetical UDRH consumes 923.9 therms, or 32oh more energy than existing homes within the
Company's service territory. Amended Application, Exhibit No. 5, Table No. 5-3. In response
to Production Request No. 18, the Company attributed this difference to an increase in the size of
homes being constructed within its territory: According to the Company, the average size of
homes currently being constructed within its territory is 2,388 square feet, versus an average of
1,932 square feet for existing housing stock. Given that ADM's UDRH is based on relatively
recent Federal Standards and Building codes, we would expect per square foot consumption of
the UDRH to be less than that of existing housing stock; however, this is not the case: Per-
square foot consumption for the UDRH is actually 7o/o greater than that consumption of existing
housing stock.
8STAFF COMMENTS FEBRUARY 25,2021
The use of ADM's simulation, instead a billing analysis, to establish incentive levels is
inconsistent with Commission Order No. 34536. Using the 57.5 therm savings determined by
ADM's billing analysis, Staff calculated an incentive level of $206 compared to the proposed
incentives of $900 and $700 based on the savings estimates from the ADM simulation. The
Company did not adequately document why it did not use the filing data to update incentive
levels.
Furnace Rebate Program
ADM used its Impact Evaluation approach to perform a billing analysis of its Furnace
Rebate Program and found that actual annual savings were 56 therms, or about half of the 112
therm savings determined by the Company's CPA used to establish the current $350 incentive for
this program. Amended Application, Exhibit No. 5, Table 3-1. Staff believes that the
methodology used in this analysis was rigorous and statistically sound.
ADM also conducted two alternative analyses of the Furnace Rebate Program. Because
the Furnace Rebate Program provides incentives to replace existing furnaces, it is possible to
compare the consumption of a residence prior to its receipt of the rebate to its consumption after
receipt of the rebate. This analysis differs from the previously described Furnace Rebate
Program analysis in that it only analyzes the change in consumption of program participants and
does not compare their consumption with the consumption of similarly situated non-participants.
Using this pre-post billing comparison, ADM determined that Furnace Rebate Program
recipients realized an average savings of 29.4 therms per year relative to their consumption prior
to receiving the rebate. This value is substantially less than the 56 therm obtained by comparing
participants with non-participants, and it is26Yo of the I 12 therm savings CPA value used to
determine the current $350 incentive level. Neither ADM nor the Company provided an
explanation for this discrepancy. The results of both analysis methods were corrected for the
effects of weather, eliminating weather as a cause for the discrepancy.
Billing analysis of replacement measures can include changes in household behavior,
equipment, or occupancy and therefore may include factors other than the impact of improved
equipment efficiency. For example, a billing analysis of the Furnace Rebate Program in2020
could potentially indicate that anew 95Yo Annual Fuel Utilization Efficiency ("AFUE") furnace
uses more therms than the fumace it replaced, simply because the occupants of the home were
STAFF COMMENTS FEBRUARY 25,20219
working from home during the winter months and heating the home throughout the day. This
would result in a billing analysis that would be counter intuitive.
The second alternative method used to evaluate the Furnace Rebate Program used the
EFLHh methodology. Amended Application, Exhibit No. 5 at70-75. Using the EFLHh
methodolgy, ADM estimated Furnace Rebate Program savings at 134 therms per participant per
year, or about ll8% of the CPA value used by the Company to develop its incentive levels. 1d
at Table 5-11. This methodology is straightforward, but it is also extremely sensitive to
assumptions about the efficiencies of both the replacement furnace and the furnace being
replaced. Given that this program is intended to incent replacement of furnaces in existing
housing stock, Staff disagrees with ADM's decision to include only new home construction in its
analysis of the Furnace Rebate Program. ADM explained that the characteristics of existing
homes were not considered in its EFLHh analysis because of "snapback," by which owners of
existing homes who receive a new furnace change their behavior in a way that increases
consumption. Id. at72. The effects of behavioral changes such as snapback are not factored into
engineering simulations, but will be included, whether implicitly or explicitly, in a billing
analysis.
Using the 56 therm savings determined by ADM's Impact Evaluation approach, Staff
calculated an incentive level of $88 for a95o/o AFUE furnace, instead of the $350 proposed by
the Company. For comparison, Avista Utilities offers an incentive of $450 for a less efficient
AFUE 90%o furnace. The Company should continue to monitor the cost-effectiveness of the
Furnace Rebate Program and modiff its incentive levels following the next EM&V.
Energ,, Star Certificotion, HERS Scores, and Energ,, Sovings
Using a simulation analysis, ADM concluded that Whole Home Program participants
save, on average,76 therms more than similar Energy Star certified homes. ADM attributes the
increased savings to the more rigorous duct sealing requirements of the Whole Home Program.
Amended Application, Exhibit No. 5 at 54.
ADM's simulation compared the energy savings of 68 homes modeled using Whole
Home criteria with the same homes modeled under Energy Star criteria, Id. This analysis is
similar to the simulation analysis conducted on the Whole Home Program, and it may overstate
the difference between consumption of a Program Home and a similar Energy Star home.
Nevertheless, because this analysis avoided the use of the UDRH, it is possible that Program
STAFF COMMENTS 10 FEBRUARY 25,2021
Homes are more energy efficient than their Energy Star counterparts. Staff supports the
Company's proposal to eliminate the Energy Star component of the Whole Home Program.
In its discussion in Order No. 34536, the Commission wrote, "After the EM&V study is
completed, we encourage the Company to consider modiffing the HERS threshold of 75 for the
Whole Home Program." ADM performed several different analyses in attempts to find an
appropriate HERS score but was unable to do so. Amended Application, Exhibit No. 5 at 52.
ADM wrote, "It is expected that the lower the HERS Index score, the higher the energy savings.
However, the Evaluators found the savings normalized by square footage remains relatively
constant across a2}-point HERS Index range."
Fireplace Insert Measure s
Initially, the Company offered two fireplace insert measures. The first measure was a
$200 rebate for installation of an 80% AFUE or greater natural gas fireplace insert, which was
discontinue d in 2020. See Order No. 34536.
The second measure is the current $100 rebate for installation of a 700lo effrcient or
greater Fireplace Efficiency natural gas fireplace insert. The Company reported that this rebate
has had very low participation and provides minimal therm savings and proposes to retire this
rebate.
Staff has reviewed the 70Yo fireplace rebate and believes the Company's recommendation
to retire it is reasonable and should be approved.
Water Heating Meosures
The Company currently offers two measures in its Water Heater Program. The first
measure is a $50 rebate for installation of a 0.67 Energy Factor ("EF") 3 or greater natural gas
water heater. The second measure is $150 rebate for installation of a 0.91 EF or greater
condensing tankless water heater. The Company proposes two changes to its water heating
measures.
3 Beginning June 12, 2017 EF ratings were replaced by UEF ratings, a new industry standard for measuring energy
efficiency in water heaters,
STAFF COMMENTS 11 FEBRUARY 25,2021
First, the Company proposes to change the existing 0.67 EF storage water heater to 0.68
UEF to align with current DOE industry standards and to increase the rebate from $50 to $115.
The increased rebate is driven by greater therm savings and is intended to promote participation.
Second, the Company proposes to modifr tankless water rebates and establish a two-
tiered system based on the UEF rating of the unit. The proposed two-tiered rebates are $325 for
Tier l, which is the installation of a 0.91 UEF tankless water heater, and $300 for Tier II
installation of a 0.87 UEF tankless water heater. See Table No. 3. The Tier II addition is based
on a recommendation from the EM&V study to add a lower priced tankless water heater.
Staff has reviewed the water heating EM&V analysis, ADM's recommendations, and
believes the Company's proposed rebates are reasonable and should be approved.
Thermostat Measure
The Company proposes to add smart thermostats to its rebate list, offering a rebate of
$100 for the installation of a Wi-Fi enabled, Energy Star certified smart thermostat. "The smart
thermostat has consistently been the most frequently requested appliance rebate by HVAC
contractors, customers, and members of the EESC." Amended Application, Exhibit No. 7 at 2.
Customers can install a thermostat without needing a professional contractor, which can be a
barrier to adoption for price-sensitive customers.
Staff has reviewed the smart thermostat assumptions and EM&V analysis and believes
the Company's proposed new smart thermostat rebate is reasonable and should be approved.
Other utilities in Idaho have similar efficiency measures, with Avista Utilities offering customers
a $125 rebate and Idaho Power offering customers a $75 rebate. Given that the Company would
only see efficiency savings from reduced gas used for heating, and not for reduced electricity for
cooling, Staff encourages the Company to monitor the popularity and cost-effectiveness of the
smart thermostat measure and adjust the incentive amount as needed.
STAFF COMMENTS t2 FEBRUARY 25,2021
Rebate Rebate Type Minimum Efficiency Rating Rebate
Amount
Whole Home Tier I New
Construction
Tier I Requirements:
o HERS rated. Air sealing at or below 3 ACH at 50 Pa
o Ceiling insulation at or above R-49
o Ducts and air handler located inside
conditioned space or duct leakage to
outside of less than 4 CFM25ll00 ft2
CFA
o Furnace efficiency at or above 97Yo
AFUE
$900
Whole Home Tier
II
New
Construction
Tier II Requirements:
o HERS rated
o Air sealing at or below 4 ACH at 50 Pa
o Ducts and air handler located inside
conditioned space or duct leakage to
outside of less than 4 CFM25ll00 ft2
CFA
o Furnace efficiency at or above 95%o
AFUE
$700
Combination Boiler
for Space and
Water Heat
Space
Heating
95% AFUE $800
Furnace Space
Heating
95% AFUE $3s0
Boiler Space
Heating
95% AFUE $800
Storage Water
Heater
Water
Heating
0.68 UEF $11s
Tankless Water
Heater Tier I
Water
Heating
0.91 UEF $325
Tankless Water
Heater Tier II
Water
Heatins
0.87 UEF $300
Smart Thermostat Thermostat Wi-Fi enabled; Energy Star certified $ 100
Table No.3: Proposed Measures
Staff reviewed each measure listed in Table No. 3 and believes the Company's proposed
modifications are consistent with accepted methods to determine savings, are reasonable, and
should be approved. The Company should continue to monitor and adjust incentive levels when
the EM&V study verifies measure savings.
STAFF COMMENTS l3 FEBRUARY 25,2021
Avoided Cost
DSM avoided costs are those costs that the Company avoids by implementing a DSM
measure or program and not having to acquire and distribute natural gas therms to the end-use
customer. For example, a measure that incents customers to replace a low efficiency furnace
with a high efficiency furnace allows the Company to avoid the cost of gas saved by the high
efficiency furnace, as well as some of the costs of transporting that gas from the producer to the
Company's distribution system. However, no energy efficiency measure can reduce the fixed
costs that are already embedded in the Company's base rate.
In Order No. 34536, Case No. INT-G-19-04, the Commission ordered the Company to
review avoided costs and update its avoided cost calculations. The Company created an Avoided
Cost subcommittee within the EESC to address issues identified in Order No. 34536. The
subcommittee reached consensus on calculation of the commodity and transportation cost
components of an avoided cost model as described in Exhibit No. 3 of the Company's
Application. However, the Avoided Cost Subcommittee has agreed that additional discussion of
a distribution cost component is needed.
It is possible for energy efficiency measures to enable the Company to avoid future
capacity costs that have not yet been embedded in rates. Energy efficiency measures might
decrease load growth sufficiently to allow the Company to delay capacity upgrades, or to use
smaller pipes when extending new service; however, the Company provided no evidence that it
takes its EE Program into account when planning or designing its distribution system.
Marketing and Outreach
The Company's marketing, education, and outreach efforts focused on residential
customers, contractors, and home builders. The Company published multiple electronic and
paper bill inserts and used digital and social media to promote their EE Program. The
Company's marketing campaigns also included digital and radio ads.
To increase outreach and promotion, in June of 2019, the Company added energy
eff,rciency into the services provided by its Energy Service Representatives ("ESRs"). The
Company's energy efficiency program funds 25Yo of eight ESR positions, equivalent to two full
time ESRs. Staff believes this approach to expanding outreach and promotion of the Company's
energy efficiency program is both efficient and an effective use of personnel.
STAFF COMMENTS t4 FEBRUARY 25,2021
In its EM&V report, ADM suggested the Company provide more marketing materials for
builders, real estate agents, and homeowners. The report also suggested that the Company show
examples of actual homeowner cost savings.
STAFF RECOMMENDATIONS
Based on Staff s audit and analysis, Staff recommends the Commission issue an order:
1. Approving the Company's 2019 EE Program Expenses of $2,803,346 as
prudently incurred.
2. Approving the Company's proposed and modified measures as written in Tariff
Rate Schedule EE-RS, included as Exhibit No. 9 in the Amended Application.
3. Approving the Company's proposed retirement of the 70Yo fireplace rebate.
4. Directing the Company to address and document the use of billing analysis when
establishing incentive levels.
5. Directing the Company, in cooperation with its EESC, to continue efforts to
improve its avoided cost methodology, address distribution costs which are
avoided through its EE Program, and present those results to the Commission.
6. Directing the Company to implement program and measure adjustments, as soon
as possible and on an ongoing basis, using the best data currently available
including, but not limited to, billing analysis and the results of the EM&V.
Respectfully submitted this )- 6 fl day of February 2021
Matt Hunter
Deputy Attorney General
Technical Staff: Kevin Keyt
Brad Iverson-Long
Mike Morrison
Taylor Thomas
i : umisc/comments/intg20. 6mhkkblmmtt comments
STAFF COMMENTS 15 FEBRUARY 25,2021
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 25th DAY OF FEBRUARY 2021,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. INT-G-20.06, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:
LORI BLATTNER
DIR _ REGULATORY AFFAIRS
INTERMOUNTAIN GAS CO
PO BOX 7608
BOISE ID 83707
E-MAIL: [e-mail]
PRESTON N CARTER
GIVENS PURSLEY LLP
601 W BANNOCK ST
BOISE ID 83702
E-MAIL : prestoncarter@ givenspursley.com
kendrah@, givenspursley. com
ARY
CERTIFICATE OF SERVICE