Idaho Power, customer and environmental groups reach pact on peak demand programs

October 14, 2013 

Idaho Power Co. has reached a settlement with several customer and environmental groups on a program to reduce demand during peak power periods.

The settlement is designed to delay construction of new peaking capacity, avoid transmission line losses and provide improved reliability during emergencies. Previously, the utility’s demand response program had been viewed simply as a way to expand its electric power capacity during peak seasons.

The settlement would make the demand reduction and energy savings more valuable by eliminating, in most cases, the requirement that participating customers be notified in advance of interruption.

The program would be valued at $16.7 million annually, which would be paid by Idaho Power’s customers. The deal was endorsed by the Public Utilities Commission’s staff, Idaho Power, the Idaho Irrigation Pumpers Association, the Idaho Conservation League, the Snake River Alliance and EnerNOC, a contractor that works with irrigators on the programs.

The Industrial Customers of Idaho Power did not sign the proposed settlement agreement. The PUC is taking comments before it rules on the issue.

Here what the settlement proposes:

• A/C Cool Credit will be available on weekdays from June 15 to Aug. 15 to remotely cycle air conditioners or heat pumps on and off during peak use hours. Participating customers would receive a $15 bill credit over three billing periods, as opposed to the $7 per month credit for the three-month season in previous years.

Idaho Power will not actively market the program but will recruit customers who move into a home where a load-control device has been installed because the previous owner agreed to participate. The company will accept new participants upon request.

• Irrigation Peak Rewards also will be available Mondays through Saturdays from 9 a.m. to 5 p.m. from June 15 to Aug. 15. Participants would receive a fixed incentive of $15 per kW per season.

If more than three interruptions occur, participants would get a variable incentive. Participating irrigators would choose from one of three interruption options, two of which would not require advance notice of interruption. Interruptions can last up to four hours, but no more than 15 hours per week or 60 hours per irrigation season.

• Flex Peak Management would be available to commercial and industrial customers from 2 to 8 p.m. weekdays from June 15 to Aug. 15. Participants would get a fixed incentive for up to three interruptions and a variable incentive if more interruptions occur. Interruptions may last up to four hours, but no more than 60 hours per summer.

The “A/C Cool Credit” and “Irrigation Peak Rewards” programs were created in 2003 and 2004, respectively. The company installed direct-load control devices on or near about 37,000 participating customers’ air conditioning units. In the irrigation program, Idaho Power turned off irrigation pumps through the use of an electric switch connected to customers’ electrical panels.

During 2012, these two programs and another program targeted to commercial and industrial customers called FlexPeak, provided about 367 MW of peak reduction.

Earlier this year, Idaho Power Co. sought to temporarily suspend A/C Cool Credit and Irrigation Peak Rewards, claiming they cost the utility and, hence, customers more to operate than the value of the energy saved. The downturn in the economy reduced demand on Idaho Power’s generation system, the company claimed, and its own forecasting did not show a peak-hour capacity deficit until 2016.

Instead of suspending the programs entirely, the commission, the company and other parties adopted a negotiated settlement that provided a “continuity payment” of $1 per month to residential customers during summer 2013, even though air conditioner cycling did not occur. Participating irrigators also received continuity payments, but the amounts varied depending on which Peak Reward option irrigators chose.

The proposed settlement ensures the existing resources – the load-control devices and the ready pool of customers – are not wasted and also ensures demand response is provided to all major customer classes. The settlement proposes to keep costs lower by slightly reducing both the duration of the programs are offered and the size of the financial credit.

The settlement proposes to make the demand reduction and energy savings more valuable by eliminating, in most cases, the requirement that participating customers be notified in advance of service interruption. (With advance notice, if the peak-use does not eventuate as forecasted, the value of the energy saved is lost.)

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