20030707_535.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
COMMISSION STAFF
LEGAL
FROM:LISA NORDSTROM
DATE:JULY , 2003
RE:FURTHER PROCEDURE NEEDED FOR IDAHO POWER'S AUTOMATED
METER READING (AMR). CASE NO. IPC-02-12.
In Case Nos. IPC-02-2 and -, the Commission directed Idaho Power and the Energy
Efficiency Advisory Group (EEAG) to "evaluate and report to the Commission on the viability
of a Time-of-Use residential metering program by September 12, 2002." Order No. 29026 at 22.
In compliance with this Order, Idaho Power submitted its "Report on Residential Time-of-Use
Pricing" (Report) on September 12 2002.
On February 21 , 2003 , the Commission declined to authorize residential time-of-use
rates for Idaho Power customers. Order No. 29196. However, the Commission directed Idaho
Power Company to begin replacing its existing manual read metering equipment as soon as
possible with an automated meter reading (AMR) system. AMR allows the meter to be read
remotely and thus significantly reduces operational costs. Anticipating the replacement process
could be complete by the end of 2004, the Commission ordered Idaho Power to submit an
implementation plan no later than March 20, 2003.
On March 12, 2003 , Idaho Power Company filed three petitions in this docket: 1) a
Petition to Stay that portion of Order No. 29196 requiring the Company to submit the Advanced
Meter Implementation Plan by the March 20 deadline; 2) a Petition for Confirmation that Order
No. 29196 is or is not a final Order; and 3) a Petition for Reconsideration. The Commission
granted the Company s Petition for Stay and denied the Petition for Reconsideration of AMR
issues as premature in Order Nos. 29210 and 29226, respectively. However, the Commission
DECISION MEMORANDUM
clarified and amended the interlocutory portions of Order No. 29196 so that a more complete
record could be established on AMR issues.
To allow for further collaborative proceedings, the Commission stayed the
Company s Advanced Meter Implementation Plan filing requirement until: (1) a multi-party
implementation plan is endorsed by interested parties, (2) the Company unilaterally files its
Implementation Plan, or (3) the Commission issues an Order revoking the Stay and sets a new
filing date. Idaho Power updated and filed its AMR analysis on May 9, 2003, in anticipation of
the Advanced Meter public workshop, which was intended to allow interested parties to offer
Idaho Power input on its AMR analysis, proposed timeline to install the system, and possible
methods to recover the cost of the meters and their installation.
PUBLIC WORKSHOP AND DISCOVERY
The Advanced Metering public workshop on May 19, 2003, was attended by
representatives of Idaho Power Company, Commission Staff, USCL Corporation, Distribution
Control Systems Inc. (DSCI), Energy Strategies Group (ESG), Advocates for the West, Avista
Corporation, ITRON, Landis & Gyr, Resource Associates International (RAI), and Pat Clifford.
Idaho Power s presentation discussed the criteria it used for choosing AMR technology
and the costs associated with different technologies. The Company proposed implementing
powerline AMR technology over a four-year period (2004-2007) at a cost of $86.5 million.
Under this scenario, Idaho Power predicted that AMR expenses would exceed those of the
manual read system until 2010 and that ratepayers would break even in 21 years. In short, Idaho
Power stated that AMR was not a prudent investment at this time. However, the Company
intends to continue monitoring developments and conducting periodic assessments to determine
the appropriate time for deployment. Over time, the Company predicted that AMR will become
more cost-effective as employee costs increase and AMR costs decrease.
Participants asked the Company numerous questions on issues that included the
incremental costs of advanced metering options, load projections, implementation schedules
equipment life, salvage value of old meters and customer benefits. Because Staff had technical
questions requiring complex Company analysis, the participants agreed that any parties with
additional questions could submit them to Idaho Power for a written response. Staff has asked
and the Company has answered, several rounds of questions in the weeks that followed the
workshop.
DECISION MEMORANDUM
STAFF RECOMMENDATION
In light of public workshop and additional discovery conducted in this case, Staff
recommends the Commission allow additional opportunity for public comment on the
Company s updated AMR analysis. This recommendation is consistent with the procedure
discussed by the workshop participants. Staff believes that written comments can adequately
address the issues presented by the Company s updated AMR analysis in lieu of an evidentiary
hearing. To allow adequate time to prepare detailed comments, Staff suggests the Commission
adopt an August 15th comment deadline with a September 5th Company reply deadline. Staff
further recommends the Commission direct parties to particularly focus on the following issues:1. Should the Commission direct the Company to implement AMR on its system?2. What technology should the Company employ?3. Under what timeframe should the Company implement AMR?4. How should the Company recover the costs associated with AMR?
COMMISSION DECISION
Does the Commission wish to adopt Staff's Recommendation to solicit public
comment on Advanced Meter Reading as described above?
Lisa D. Nordstrom
M:IPCEO212 memo4.doc
DECISION MEMORANDUM