Idaho Power Co. was touted as a national leader in energy conservation and demand management programs in 2008 when it was urging residential customers the sign up for the A/C Cool Credit program and farmers to sign up for its Irrigation Peak Rewards program. Its energy efficiency and demand management programs were rolled out with a lot of fanfare and wide support from Idaho leaders like Gov. Butch Otter, customer groups and conservation groups.
The programs were designed to pay customers to reduce power use during periods of high demand. The A/C Cool program paid customers to connect their air conditioners to communication devices that allow the company to turn them on and off in periods of high demand to manage the power load.
The Irrigation Peak Rewards allowed Idaho Power to turn off farmers’ pumps for a credit on their bill. Again, a computer switch that allowed Idaho Power to link to the pumps was added to their control panels.
In the meantime the utility built and successfully charged to ratepayers several small natural gas plants, the Langley Gulch Plant and was forced to buy power for hundreds of megawatts of wind plants. And demand for power dropped dramatically both because of energy conservation and the slowing economy.
So Idaho Power went to the Idaho Public Utilities Commission and asked to stop the A/C Cool Program along with other demand management programs because it has a surplus of power in the summer now. It came at the same time the utility was asking to stop some energy efficiency programs but was deciding to move forward with the spending of hundreds of millions of dollars to upgrade coal plants it operates in Wyoming and Nevada.
The PUC approved a one year settlement to ramp-down the programs. It will still provide a small credit to the A/C Cool and the Irrigation Rewards customers.The two programs are only a portion of the 20 programs devoted to demand-side management.
But the three-member commission made clear it didn’t like the utility’s proposal to just stop the programs that had helped changed the way the utility and its customers were dealing with the shifting energy market where cheap power is a thing of the past.
“We are disappointed that the company proposed to discontinue their use completely,” the PUC said in its order. “Valuable time and resources were used to develop effective (demand side management) programs, and we do not want to impair the effectiveness of these programs in the future when the company’s peak loads surpass its supply resources.”
What the commission was signaling is that it still believes reducing peak summer loads reduces Idaho Power’s reliance on buying power or building new power plants. Idaho Power makes money for its stockholders when it builds new generation plants and that is its main financial incentive against these programs.
The PUC wrote that it agreed with one customer who said it may be cheaper for the company to use A/C Cool than to purchase or generate power from its own resources. The commission said it also found merit in one customer’s comment about using the (demand side management) programs to respond to unforeseen emergencies.
“Although the company does not believe it will need to use these programs in 2013, we doubt that it has perfect foresight,” the PUC wrote.