20220908Comments.pdf

CLAIRE SHARP
DEPUTY ATTORNEY GENERAL
TDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03s7
IDAHO BAR NO. 8026
Street Address for Express Mail:
1 I 3 3 1 W CHINDEN BLVD, BLDG 8, SUITE 20 I -A
BOISE, ID 83714
Attomey for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN GAS
COMPANY'S APPLICATION FOR
AUTHORITY TO REVISE RATE SCHEDULE
EEC.RS-RESIDENTIAL ENERGY EFFICIENCY
CHARGE
CASE NO. INT-G.22.05
COMMENTS OF THE
COMMISSION STAFF
Staff of the Idaho Public Utilities Commission ("Staff'), by and through its attomey of
record, Claire Sharp, Deputy Attorney General, and submits the following comments.
BACKGROUND
On August 70,2022,Intermountain Gas Company ("Company"), applied for authority to
revise the Residential Energy Efficiency Charge ("EEC-RS") rate schedule, effective October l,
2022. Application. The Company represented that, as of June 30,2022, the EEC-RS program
balance was over-collected, and a rate decrease from $0.02093 per therm to $0.01564 per therm
was appropriate. Id. at 5. The Company explained that energy efficiency participation has grown,
albeit at a slower rate than forecasted, and that subsequent changes in the rebate programs and
rebate amounts in April 2021 could not have been included in the previous forecast. Id. at 6-7 .
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ISTAFF COMMENTS SEPTEMBER8,2022
In Case No. NT-G-17-03, the Commission authorized the Company to implement: l) Rate
Schedule EE-Residential Energy Efficiency Rebate Program, outlining the offerings of the EE
Program; and 2) Rate Schedule EEC-Energy Efficiency Charge ("EE Charge"), establishing a
per therm charge to fund the EE Program. Order No. 33888. The EE Program is funded by
customers via the EE Charge. Both Schedules were implemented and initially became effective on
October 1,2017. In Case No. INT-G-22-02, the Commission authorized an increase in the
Company's WACOG and also ordered the Company to explore all options to reduce future
increases, including adjustments to the Residential Energy Efficiency Tariff. Order No. 35479.
The Company's Application proposes a one-time credit of $4,850,000 of the EEC-RS
Program deferral balance to residential customers through the Company's Purchased Gas Cost
Adjustment ("PGA") filing, and a decrease in the EEC-RS schedule from $0.02093 per therm to
$0.01564 per therm, effective October 1,2022. Application at 5.
STAFF ANALYSIS
Staff has reviewed the Company's Application and workpapers explaining administration
costs, the forecast for energy efficiency rebate payments, and the deferral balance for the EEC-
RS program. After veriffing those documents, Staff supports the Company's request to decrease
the EEC-RS per therm rate from $0.02093 to $0.01564. Staff anticipates the new rate will align
revenue with the Company's energy efficiency expenditures through 2024. Staff also supports
the one-time refund of $4,850,000 from the over-collected EEC-RS Program deferral balance to
residential customers through the PGA.
The Company is proposing to decrease the EEC-RS from $0.02093 to $0.01564. A
typical Residential customer of the Company would see a monthly decrease of $0.33.
Application at 6. With this new rate, the EEC-RS balance is forecasted to be $191,401 by
December 31,2024. Id. atBxhibit No. I . The Company maintains that an EEC-RS schedule
decrease is needed to reflect actual energy efficiency program participation and changes in the
rebate programs and amounts. Staff believes the new charge is reasonable.
Forecasted EEC-RS program expenses are comprised of labor, promotional & program
delivery, and rebates. The Company's promotional & program delivery and labor expenses are
forecasted to average $877 ,670 per year, including an increase of 5o/o every year. The Company
indicates that the 5olo increase for labor is based on a 4oh corporate guidance for non-union
2STAFF COMMENTS SEPTEMBER8,2022
employees and includes a loh increase due to a tightening labor market. See Response to
Production Request No. 5. Staff is concerned that 5oh increases in labor each year may not be
warranted in the future. Staff will address the reasonableness of labor increases and expenses in
the Company's next general rate case and will continue to review labor expenses in the
Company's regular prudency filings.
The Company forecasts approximately $4.2 million in expenses for the EEC-RS
program, with approximately $3.4 million earmarked for customer rebates. The Company
predicts a significant increase in rebate expenses between 2022 and2023. This increase is
directly related to forecasted increases in program participation. In particular, the Whole Home
Tier II, Furnace, and Smart Thermostat programs make up nearly the entirety of the Company's
savings and are predicted to increase participation by up to 38Yo. ln202l, the Company revised
incentives for most of their programs, including increasing incentives on some underperforming
cost-effective programs and reducing incentives of other popular rebates like the new
construction measure - Whole Home. The Company anticipates the recent changes will increase
the number of participants overall. See Application at 5. If program participation fails to reach
predicted levels, the EE-RS balance could again become significantly over-funded. Staff expects
the Company to closely monitor the rider balance and adjust the EE-RS when necessary to avoid
a significantly over or under-collected balances.
The Company anticipates conducting a Conservation Potential Assessment ("CPA") in
2023, and an Evaluation, Measurement and Verification ("EM&V") study in2024 for all measures
that were revised in202l. Id. at 4. Ongoing EM&V studies are crucial to showing the efficiency
and efficacy of energy efficiency programs. The CPA will provide input to the next Integrated
Resource Plan as well as identiff additional cost-effective measures that could be included in the
EE-RS Program. Both the CPA and the EM&V are forecast at $250,000 with an 80120 split in
expenses between the residential and commercial programs. Id. at 4. Staff cautions the Company
in assigning EM&V expenses via the 80120 split. If an EM&V is conducted for the Company's
residential programs, the EM&V expense should be directly assigned to that program. Staff will
closely monitor and evaluate the Company's 80120 split for expenses in the Company's prudency
filings and encourages the Company to directly assign costs when possible.
As of June 30,2022, the EEC-RS program was over-collected by $4,893,882. See
Exhibit No. l. The Company proposes a one-time transfer of $4,850,000 of the EEC-RS deferral
JSTAFF COMMENTS SEPTEMBER8,2022
balance to residential customers through the Company's PGA filing.l The most efficient way for
the customers to see the benefit of the money funded to the EEC-RS program would be to refund
it through the PGA. The Company proposes this balance be amortized to residential customers
on a cents per therm basis over one year. The Company does not expect the balance of the EEC-
RS to become similarly overfunded again because they have revised their forecasts and are
adjusting the EEC-RS rate accordingly. Id. at 3-4. According to the Company there are two
primary reasons for the overfunded balance. The first reason is that therm sales were higher than
the Company had forecasted. The second reason is that the entire, then-current, under-collected
balance of $ 1,097,907 was used to determine the EEC-RS rate as if it was a recurring yearly
expense, rather than amortizing the balance over time. Staffs supports the one-time transfer of
$4,850,000 to the PGA as a method to reduce customer bills, consistent with Commission Order
No.35479.
Cost-effective Demand Side Management ("DSM"), including energy efficiency
programs and load management programs, is a significant resource that helps customers control
their utility bills, reduces the need for higher-cost supply-side resources, and increases system
reliability. Staff expects that the Company's DSM program costs will continue to be prudently,
incurred and that the programs will remain cost-effective. It is not Staff s intent to either validate
or question the Company's DSM prudency or its actual cost-effectiveness calculations for any of
its programs at this time. Such validation and additional review was not requested in this case
and is occurring in Case No. INT-G-22-03 which is currently pending before the Commission.
STAFF RE,COMMENDATION
After examining the proposed decrease to Rate Schedule EEC-RS, Staff recommends that
the Commission approve the Company's Application and tariffs as filed, decreasing the
Residential Energy Efficiency Charge rate to $0.01564 per therm.
Staff also recommends the one-time transfer of $4,850,000 of the residential deferral
balance to residential customers through the Company's Purchased Gas Cost Adjustment and is
amortized to residential customers on a cents per therm basis.
rsee Case No. INT-G-22-04
4STAFF COMMENTS SEPTEMBER8,2022
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O day of Septe mtrlr 2022.Respectfully submitted this
Technioal Staff: Laura Conilogue
Jason Talfoncl
Kevin Keyt
i:umisc/oomnentslinge2.0Scslciidsk oomrnenb
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Clair€ Sharp
Deputy Attorney General
5STAFF COMMENTS SEPTEMBER 8,2022
CERTIFICATE OT' SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 8TH DAY oF SEPTEMBER 2022,
SERVED THE FOREGOING COMMENTS OF TIIE COMMISSION STAFF, IN
CASE NO. INT.G-22-05, BY E.MAILING A COPY THEREOF, TO THE
FOLLOWING:
LORI BLATTNER
DIR _ REGULATORY AFFAIRS
INTERMOUNTAIN GAS CO
PO BOX 7608
BOISE TD 83707
E-MAIL: [e-mail]
PRESTON N CARTER
MORGAN D. GOODIN
GMENS PURSLEY LLP
60I W BANNOCK ST
BOISE TD 83702
E-MAIL : [e-mail]
stephaniew@ eivenspursley. com
morgangoodin@ eivenspursley. com
SECRET
CERTIFICATE OF SERVICE