ORDER NO. 98-431

ENTERED OCT 19 1998

This is an electronic copy. Footnotes and appendices may not be included.

 BEFORE THE PUBLIC UTILITY COMMISSION

LC 19

DISPOSITION: PETITION FOR RECONSIDERATION DENIED

Order No. 98-254. By Order No. 98-254, the Commission refused to acknowledge Idaho Power Company’s (IPCO) proposed Least Cost Plan (LCP). The Commission concluded that IPCO’s LCP failed to meet the substantive requirements of Order No. 89-507. Specifically, the Commission found that IPCO had failed to address Demand Side Management (DSM) programs as the company had been requested to do. As Order No. 98-254 states:

Staff made two recommendations regarding DSM programs in Order No. 95-1387 on IPCO’s 1995 LCP. The first recommendation asked the company to assess new ways of funding and delivering DSM programs to customers. The second recommendation requested that in the next planning cycle, the company run all DSM programs through its least-cost planning screening model. These recommendations were not followed in the preparation of this plan. Not only were the recommendations not followed, they were not even addressed. IPCO simply ignored them. The Commission finds this unacceptable. If the company felt there were sufficient reasons not to follow Staff’s recommendations, it should have stated those reasons in its report. The Commission views this as further proof that IPCO has not provided a "…broad examination of all choices" as required in Commission Order No. 89-507.

As a result of IPCO’s failure to address DSM programs, the Commission concluded that IPCO did not adequately evaluate demand-side resource possibilities, did not integrate demand-side and supply-side resources, and was therefore not in compliance with the requirements of Order No. 89-507.

 Petition for Reconsideration. On August 20, 1998, IPCO applied for reconsideration of Order No. 98-254. IPCO expressed regret that it failed adequately to respond to Staff’s DSM comments. It further expressed regret that it had failed to provide sufficient explanation of the Idaho Public Utilities Commission’s position on reducing deferred expenditures for DSM programs. IPCO filed additional materials and data to address the Commission’s concerns in hope that a review of the material would lead the Commission to acknowledge IPCO’s LCP.

IPCO states in its petition that it has discontinued existing DSM programs and has not proposed new or expanded DSM programs. In explanation, IPCO asserts that the Idaho Public Utilities Commission has directed IPCO to reduce the amount of deferred DSM expenditures. Because Idaho is its primary jurisdiction, IPCO has decided against increasing deferred regulatory assets.

Commission Decision. IPCO misses the main thrust of the Commission's reason for not acknowledging its LCP. The Commission stated that demand-side and supply-side resources must both be considered in order to fully develop an integrated resource plan. IPCO did not consider DSM as a future resource and therefore its plan cannot be considered as integrated, as required by Order No. 89-507.

IPCO lists many reasons for its failure to address Staff's recommendations from its previous LCP. IPCO also reiterates that the Idaho Public Utilities Commission has directed it to reduce the amount of deferred DSM expenditures and that is why it has not considered DSM as a future resource.

Staff understands that the Idaho Commission is IPCO’s primary regulator. However, the Oregon Commission’s responsibility is to the Oregon ratepayers of Idaho Power Company. Staff believes it needs information about potential savings from DSM in order to evaluate whether IPCO is acting in a least-cost manner when it purchases power or builds additional generation in the future. It may well be that DSM would be lower-cost than some other alternatives IPCO will choose. The fact that Idaho Power has been prompted to discontinue DSM by the Idaho Commission does not in any way change the company’s responsibility to serve its Oregon customers with its least-cost resources.

Because IPCO has not met Oregon’s LCP requirements, its petition for reconsideration should be denied.

 ORDER

IT IS ORDERED that the petition of Idaho Power Company for reconsideration of Order No. 98-254 is denied.

 Made, entered, and effective __________________________.

A party may appeal this order to a court pursuant to applicable law.