20081219Reply Comments.pdf

Brad M. Purdy
Attorney at Law
2019 N. 17th St.
Boise, Idaho 83102
[phone]
Cell: [phone]
Fax: [phone]
RECEiVED
inmi OEC \ 9 PM 31 41
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UTUJT\
'l'ecember 19, 2008
Ms. Jean Jewell
Commission Sefitary
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,li;~, ID 837,Q".~
Case ~-U-08-01.rg¡ AffQ~1ity Coiaents
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,~s. Jewell:
Included wíth this lett(ëare an orIginal and seven (7)tfpi.~fCommunty Action
Pafership Associ.nofIdaho's Reply Comments in t~ve-referenced proceeding,
pursuat to the Corris!fm's Order No. 30685.~
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Brad M. Purdy
Attorney at Law
BarNo. 3472
2019 N. 17th St.
Boise, ID. 83702
[phone]
FAX~ [phone]
bmpurdy(ihotmail.com
Attorney for Petitioner
Communty Action Parership
Association of Idaho
RECE!VED
2008 DEC i 9 PH 3= 47
IOAHO.PUBlIC
UTILITiES COf'AM'ŠS10N
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN TH MATTR OF TH COMMSSION'S
INQUIRY ABOUT ENERGY AFFORDABILITY
ISSUES AN WORKSHOPS
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REPL Y COMMNTS OF
COMMTY ACTION PART-
NERSHIP ASSOCIATION OF
IDAHO
COMES NOW, Communty Action Parership Association ofldao (hereinafer
"CAP AI") and, in reply to the Staff Comments filed in this case, hereby replies as follows.
INTRODUCTION
CAP AI lauds the Idao Public Utilties Commission for implementing ths case and
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highy commends the Commission Sta for its effort in creating a work product that contas an
exhaustive discussion of a large number of issues, weighed in on by a considerable number and
varety of staeholders. CAPAI largely agrees with Stas analysis of the issues and ultimate
reoommendations. In light of this, and in the interest of brevity and avoidance of repetition,
CAPAI restrcts its reply to those pottions of Sta Comments where it has a unque or different
perspective than Sta or feels that elaboration is in order. To the extent that CAP AI does not
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specifically oppose, or propose modification to, any given proposal and recommendation
contained in Staff s Comments, it may be constred that CAP AI is in agreement with Staf.
ENERGY AFFORDABILITY AND INABILITY TO PAY
CAP AI strongly agrees with Staffs overall assessment of need and the lack of adequate
resources to meet that need reg~ding energy affordabilty. CAPAI also notes that Stawitness
Curis Thaden provides a thoughtful anlysis of ths issue in the pending Idaho Power Company
rate case (Case No. IPC-E-08-10). Although that testimony is obviously limited to the specifics
of Idaho Power and its customers, it provides insight into the diffculties faced by low-income
customers of all of Idaho's public utilties.
CURRNT ASSISTANCE PROGRAMS
CAP AI believes that Staff has done a thorough job of outlining assistace programs
curently in place and implemented by the varous utilties. CAPAI interprets Stafs Comments
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to conclude that such programs are insuffcient, however, to meet the need that exists, thus the
need for this proceeding. CAP AI obviously agrees with such a conclusion.
Low-Income Weatheriation
On page 7 of its Comments, Sta states that "households with incomes at 160% of the
Federal Poverty Guidelines or less automatically qualify to receive federa weathenzation
services." CAPAI simply notes that, in recent years, this figue has only been 150%. The
threshold was raised to 160% for program year 2009 with no assurance that it will not retu to
its previous level or even be reduced below 150%.
CAP AI further notes that it has taen the position in numerous proceedings before the
Commission, supported by undisputed data, that there remais a substatial backlog of homes
tht quaify for low-income weatherization for utilities offenng this type of program, such as
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Idaho Power, PacifiCorp (dba, Rocky Mountain Power), and AVISTA. This is largely due to an
insuffciency of adequate fuding by the utilities.
CAP AI has also taen the undisputed position in numerous cases that low-income
weathenzation, when properly implemented and administered, is a cost~effective energy
efficiency resource that is not being fuly exploited. For instace, CAPAI notes that Idaho
Power Vice-President John Ric Gale recently testified in Idaho Power's pending general rate
case (Case No. IPC-E-08-1O) that the Company's low-income weathenzation program
("WAQC" - Weatherization Assistace for Qualified Customers) can be charactenzed as "low
hanging frit when it comes to addrssing affordabilty." Rebuttal Testimony of Ric Gale at p.
36. Mr. Gale fuher states that a $100 investment in W AQC "can retu more than $200 in
present value customer benefits in futue bil savings and over $300 in system benefits because
of the selection of a lower cost resource option." Id at pp. 36-37.
CAP AI proposes an increase to Idaho Power's W AQC fuding level in the curent rate
case. For its pary, the Company is reticent to commit to any specific funding increase in the
context of the rate case, but agrees to meet with CAP AI in the near futue to discuss appropnate
fuding levels. Rocky Mountain Power also has a pending general rate case but the issue has not
yet been fully addressed.
Finally, AVISTA agreed to increase low-income weathenzation fuding in its most
recent general rate case. Though CAPAI appreciates AVISTA's increased paricipation in the
progr, and the numerous other progrs implemented by A VISTA that address energy
affordabilty, the fact remains that there remains a backlog of qualified homes for which
adequate fuding is unavailable for A VISTA, along with Idaho Power and Rocky Mountain
Power.
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Finally, as Ten Ottens testified on behalfofCAPAI in Case No. IPC-E-08-1O, "curently
only 10% of homes receiving a LIHEAP benefit are weathenzed." Direct Testimony ofTeri
Ottens at p. 6. CAPAI recognzes and appreciates the wilingness of AVISTA, Idaho Power and".
Rocky Mountain Power to engage in low-income weathenzation and occasionally review
funding levels but encourages those utilties to continue to ramp up fuding to address the
backlog oflow-income households in need ofweathenzation. For those electnc and gas utilities
who do not have a low-income weathenzation program, CAP AI urges those utilties to
implement such a program.
PROPOSALS TO ADDRESS ENERGY AFFORDABILITY
Bil Payment Assistance
Implement Utility Programs Designed to Provide Financial Assistance
CAPAI strongly agrees with Stas general recommendation that "(t)he LIRAP program
would be beneficial for Idaho's low-income utility customers." StaffComments,p. 11. Indeed,
of all the identified proposals, CAP AI believes that bil payIent assistace is the most effective
and powerful means to address the disparity between need and resources proposed thus far in this
case.
Though Staff favors a "LIRA" type of assistace (Staff Comments, pp. 11, 14-15), there
is any number of other mechansms for providing bil payment assistace. A VISTA and Rocky
Mounta Power curently offer varing bil payment assistace progras in other states in
which they provide service. As Staff noted in its Comments, however, implementation of such a
program would require changes to the Idaho Code as it curently exists. This is tre regardless of
whether bil payment assistace is achieved through a LIRAP progr, discounted rates, or any
other mechansm that provides assistance to low-income customers, as opposed to any other
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segment of a public utilty's customer base. Thus, CAP AI is proposing, for the 2009 legislative
session, legislation that would remove existing, general statutory prohibitions against bil
payment assistace programs.
Specifically, CAPAI's proposed legislation is an attmpt to: 1) remove the curent
statutory prohibition against bil payment assistace programs, whether though a LIRAP, or
other means, 2) make any such program volunta on the par of the utilties and, 3) craft the
legislation in a maner that provides the utilities with the greatest degree of latitude reasonable to
design a program that best suits the paricular needs of the utilties and their customers.
The curent statutory regime (See, Idaho Code Section 61-315) prohibits the Commission
and utilities from granting any "preference" or "advantage" in favor of any ratepayer with
respect to "rates, charges, service, facilties or in any other respect." CAP AI's proposed
legislation would specifically authorize public utilties to implement, and the Commission to
authorize, low-income bil assistace programs. A copy of CAP AI's curently proposed
legislation is attched hereto as Exhbit "A."
CAP AI's ultimate objective is to propose whatever statutory verbiage would most likely
be acceptable to the greatest number of staeholders in authonzing low-income bil payment
assistace programs while achieving the objectives stated above. CAP AI continues to seek the
input of all such staeholders in crafting a final, proposed bil for legislative consideration.
Incidentaly, it is fair to charactenze the utilties' reaction, with the exception of
A VISTA, to the concept of a LIRA program or similar bil payment assistace measures as less
than enthusiastic. CAP AI notes that in virtally every state surounding Idaho, such bil payment
assistace measures are specifically allowed by law, if not mandated. Both Rocky Mountain
Power (and its parent corporation PacifiCorp) and AVISTA aleady offer bil assistace
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programs in other states. No par to the workshop opposing bil payment assistace was able to
adequately explain why Idaho should be the only state in the region making such progrs or
measures to be unlawfL.
Increase Federal Funding for LIHEAP
Whle CAP AI fuly supports any effort to obtain additional federal LIHEAP fuds for the
State of Idaho, such an endeavor is speculative at best given the fact that all states compete for
federal LIHEAP fuds and given the curent state of the economy and the possibilty that curent
fuding levels might even be decreased. CAP AI recommends that while the substace of this
proposal is worthy, and supports it, it not be relied upon to the exclusion of other proposals more
likely to come to fruition.
Create a State-Funded Financial Assistance Program
Ths proposal involves an assistace program "fuded by state ta revenues." Though it
shouldn't be ruled out as a possibilty, given the curent economy and the Governor's recent
request that all state agencies tnm their respective budgets in response to the curent economic
cnsis, such a proposal is not likely to prove successful in the near future.
Bil Reduction
Reduced Rates for Low-Income Customers
CAP AI reiterates its comments made regarding bil payment assistance though utility-
fuded programs. That is, whether bil payment assistace is achieved through a LIRA,
discounted rates, or any other means, a chage to existing legislation is likely requied. Though
CAP AI's recommendation is to give public utilities the authority to propose and implement
whatever form of bil assistace that a utility deems best suits its needs and those of its
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customers, CAP AI in no way proposes mandating discounted rates, as opposed to other forms of
assistace.
CAP AI notes that Staff discusses a tiered discount rate design authonzed in Washington
state and, consistent with its general opposition to discounted rates, opposes such a tiered rate
strctue. CAP AI simply points out that Staff s Comments in this regard should not be confsed
as a disdain by Sta for tiered residential rates, that are not based on a customer's income.
Indeed, as noted on page 20 of Staff s Comments, all utilities should consider tiered residential
rates.
Low-Income Weatheriation, Conservation Education, and Other Energy Efficiency
Programs
CAPAI's comments regarding low-income weathenztion progrs have already been
set fort above. Regarding conservation education, most if not all of the public utilities
paricipating in this case have some form and level of conservation education progras already
in place. What CAP AI believes is missing are a conservation programs that specifically taget
low-income customer.
In its most recent rate case, A VISTA agreed to fud a program that would enable the
CAP agencies to provide conservation education to customers who apply for LIHEAP. CAPAI
believes there is a need for such programs due to the often overwhelming state of despair
expenenced by those who are strggling to provide for themselves and their families the most
basic necessities of life and their inabilty to add something else to their plate. Providing these
customers with information on how they can reduce their utilty consumption with relative ease
at little or no cost, paricularly when they are meeting face to face with CAP employees dunng
the LIHEAP application process, will very likely result in reduced utilty consumption and cost.
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In addition to obtaning AVISTA's agreement to fud this tye of program, CAPAI made
a similar proposal for Idaho Power in its pending rate case. Though the Company would not
commit to fuding as par of the rate case, it made the assurance that it would give the matter
consideration as a result of this proceeding. CAP AI stongly urges Idaho Power, Rocky
Mountain Power, and all other public utilities to acknowledge the benefits, both to low-income
customers and to the overall system, of this type of program and to provide suffcient fuding to
the CAP agencies to implement it.
Design Rates to Encourage Energ Effciency
A tiered residential rate design allows for what could be considered a "lifeline" level of
usage pnced at a lower rate which not only allows low-income customers to consume the basic
level of utility service needed to live a healthy existence, but also promotes energy effciency,
somethg that ultimately proves beneficial to all utility customers by lowering overall rates.
Incidentaiy~ Idaho Power, in Case No. IPC-E-08-10, is curently proposing to increase
the level of its two-tiered residential rates from a first block level of consumption from 300
kilowatt hour (kWh) to 600 kWh and to implement a two-tiered rate strcture year around and
should be commended for its proposal. For tiered rates to be effective in assisting customers to
achieve energy afordabilty, however, the tier rate design must be structued so that low energy
consumers have the possibilty of limiting their consumption at or close to the upper limit of the
first tier, thereby paying a lower overall rate. This serves the dual purose of assisting low
energy consumers and sending proper pncing signals regarding the cost of supplying gas and
electrcity.
For that reason, CAP AI and Staff have both proposed a higher consumption level for the
first tier block than that proposed by the Company in the Idaho Power rate case. Staf has
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actully proposed a three tier residential rate. CAP AI believes that both its and Sta s proposals,
if adopted by the Commission, will benefit low-income customers. CAP AI is well aware tht
low-income customers often have higher consumption levels than would be expected due to poor
housing stock and the prevalence of electnc baseboard heating. That is why the first tier block
level should be high enough to cover lifeline usage, but not so high as to pnce truly discretiona
use at lower levels.
Though it is unclear to CAP AI precisely what the "lifeline" level of usage should be for
rate design puroses, CAP AI believes that the highest of residential users are tyically those with
a commensurately high degree of discretionary consumption (e.g., large homes, hot tubs,
recreational appliances, etc.). These customers should, to the greatest extent possible, be
assessed with a higher energy rate which a tiered rate design, if structued properly,
accomplishes. For those utilities who do not have tiered residential rates, CAPAI strongly urges
the Commission to mandate said tiers.
PROPOSED ACTION
The Notice of Workshops issued by the Commission in ths case identifies six specific
topics to be discussed and explored durng the workshops conducted in this case. Those issues
were, in fact, discussed durng the workshops and addressed by Staff in its Comments. This stil
begs the question of what wil be the final outcome of this proceeding.
The Notice of Workshop directs Staff to issue a final report to be provided to the
Commission. It is not stated precisely what action the Commission intends to tae once it
receives Staffs final report. The Commission does state, however, that "(t)he objective is to
identify new programs, policies, and/or legislation, procedurs, and/or resources that could be
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implemented to address energy affordability. To the extent possible, the costs and benefits of
proposed solutions wil be identified." Notice o/Public Workshops at p. 1.
What remains somewhat unclear to CAP AI is whether, at ths junctue, Staff s Comments
specify the costs and benefits of proposed solutions and how those solutions could and/or should
be implemented. Put directly, CAP AI questions whether all of the paricipants to the workshop,
not just Staff, have given the Commssion specific recommendations of what to do with the
proposals resulting from the workshop and identified in the Comments.
Emphasis should be placed on quatifying costs and benefits for the Commission of all
energy affordability proposals. Some costienefit data has aleady been provided to Staff by the
workshop paricipants. Utilties are naturaly best able to conduct such studies and make them
available to the Commission and all stakeholders. One example is data supplied by Idaho Power
Company during ths proceeding regarding the benefits that accrue from investment in the
Company's low-income weathenzation program ("W AQC"). CAP AI recognizes that Idaho
Power and Rocky Mountain Power have expressed a preference for investment in programs such
as W AQC but urges the utilities to approach the other proposals made durng this proceeding
with an open mind in calculating system-wide benefits that inure from such progras and, in
fact, conduct the appropriate costienefit analyses to determine said benefits in relation to costs.
Utilzing the adage that "good intentions without action are just thoughts" CAP AI urges
not only Staff, but all paries, to expand upon examples of direct action that the Commission
could tae to address energy afordability. One example is to urge the Commission to actively
promote legislation that would grant it, and public utilties, the ability to design and implement
low-income, bil assistace programs.
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As attched Exhibit A reveals, CAP AI is currently seeking an amendment to Idaho Code
Section 61-315 to allow bil payment assistace. Coincidentally, the Commission is also seeking
to amend Section 61-315 this legislative session, for unelated reasons. Specifically, the
Commission seeks the authonty to set rates reflecting the costs of customer growt. Thus, the
2009 legislative session constitutes an opporte point in time to seek amendment of 61-315 for
energy affordabilty puroses. Support from the Commssion would be quite valuable.
As stated, CAP AI is curently proposing such legislation for the 2009 session and would
greatly appreciate support from the Commission and all interested staeholders in ths endeavor.
The upcoming session is imminent and time is of the essence. To the extent that the
Commission, its Staff, or other persons prefer alternative statutory verbiage to that proposed by
CAP AI, then CAP AI welcomes imediate input so that it can propose a bil to the legislatue
that has the greatest degree of support obtanable.
Another example of proposed action would be in cases where Staff has recommended
studies or fuer discussion among the staeholders to determne benefits, or conduct feasibilty
or cost-effectiveness stdies of afordabilty proposals, that such fuer studies or discussion be
identified with clarty and made mandatory by the Commission, where it possesses the legal
authority to do so.
CONCLUSION
There are numerous other mechansms for addressing the issue of energy affordabilty
contained in Staffs comments than those addressed in ths Reply. CAPAI supports Staffs
recommendations regarding all such mechanisms. Regarding bil payment assistace, CAP AI
stresses that this, if authonzed by the Idaho legislatue, would be the single most effective means
of addressing energy afordabilty.
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Regarding the other proposals contained in Staffs Comments. The Commission
possesses the legal authonty to mandate consideration or implementation of these proposals in
certain cases and CAP AI respectfully suggest that the Commission issue said mandate. In cases
where such legal authonty does not exist, CAP AI urges the Commission to, in tur, urge the
utilties to consider the proposal in question.
DATED, this 19th day of December, 2008.
1~QJ~(-¿9Brãd Purdy "
Attorney for Communty ActioÌl"Pare pAssociation of Idaho'
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IN THE HOUSE OF REPRESENTATIVES
BILL NO.
BY
AN ACT
RELATING TO THE PUBLIC UTILITY REGULATION; AMENDING SECTION 61-315, TO
PROVIDE FOR LOW-INCOME BILL PAYMENT ASSISTANCE TO PUBLIC UTILITY
CUSTOMERS.
Be it enacted by the Legislatue of the State of Idaho:
Section 1. That Chapter 3, Title 61, of the Idaho Code be, and the same is hereby amended
to read, as follows:
61~315-DISCRIMINATION AN PREFERENCE PROHIBITED. 1: No public utilty
shall, as to rates, charges, service, fadlities or in any other respect, make or grant any preference
or advantage to any corporation or person or subject any corpration or person to any prejudice
or disadvantage. No public utility shall establish or mainta any uneasonable difference as to
rates, charges, service, facilties or in any other respect, either as between localities or as between
classes of service. 2. The commission may authonze a public utilty providing electrc and/or
natual gas service, upon application of the utilty, to include in rates of the utility, amounts for
the purose of generating fuds to be used for bil payment assistace, or other programs, to low-
income residential customers of the utilty. 3. The commission shall have the power to
determine any question of fact arsing under this section.
e:'17d- i .''-! .... _,.~ .., J1
STATEMENT OF PURPOSE
RS
This bil gives authonty to the Public Utilties Commission to approve low-income programs that
gas and electrc utilities may propose to assist these customers. Almost all of such Idao utilities
are able to offer simlar services in other states that they provide services in and have not had the
option to voluntaly promote such programs in Idaho.
This legislation will not mandate any low-income programs upon utilties but will give those
utilties the option of approaching the Public Utilties Commission with programs that they wish
to voluntaly implement. Any such proposals would then be subject to the rate filing procedures
as requied by law and the Public Utilties Commssion. Ths provides flexibilty for utilities to
design programs that benefit both their customers and their company.
FISCAL NOTE
This bil is revenue neutral to the state, but might have an impact on gas and electrical ratepayers
if progrs are implemented. Any program approval and rate design, however, would be subject
to the filing procedures as require& by law and the Public Utilities Commission.
The economic impact on the state will be positive overalL. In addition to assistig the poor, low-
income assistance programs offer "system-wide" benefits to the utilty and other ratepayers. By
helping customers to pay their bils, a utilty with a low-income assistace progr authonzed
by this amendment will expenence fewer disconnections, reconnections, bad debt, and other
expenses.