Idaho's Peak Rewards Program Changes OK'd
by Dave Wilkins
Capital Press, March 11, 2011
Payments will be based on a 75 percent fixed rate
The Idaho Public Utilities Commission on March 9 approved changes in the way Idaho Power Co. compensates irrigators who participate in its peak rewards program.
The incentive program rewards irrigation customers who agree to have their pumps shut down during peak demand periods. In exchange for their voluntary participation, irrigators receive a credit on their monthly power bill.
The existing program pays a fixed amount to each participant regardless of whether Idaho Power actually interrupts service during the irrigation season.
Last year, the company paid participating irrigators about $11.5 million and interrupted service on three occasions.
The commission on March 9 approved changes that will result in a payment based on a 75 percent fixed amount and 25 percent variable.
"Because Idaho Power's use of the curtailment offered by the program varies from year to year, it is reasonable to base a portion of the program costs on actual interruptions during the irrigation season," the commission said in its final order.
The company had proposed that 40 percent of the incentive payment be fixed and 60 percent of it be variable. That would have resulted in a fixed payment reduction from $32 per kilowatt hour to $12.78 per kilowatt.
The commission nixed the proposal on the grounds that it would constitute a significant change to the overall incentive payment amount.
"Significantly altering the incentives to irrigation customers could cause customers to drop out, thereby reducing the program's effectiveness," the commission said in its order.
An incentive payment that includes a 25 percent variable portion is "fair and reasonable," the panel concluded.
Lynn Tominaga, executive director of the Idaho Irrigation Pumpers Association, said irrigators should be pleased with the commission's order.
"I think this will provide some of the consistency in the program that we have been looking for," he said.
With the approved change, the fixed payment amount will be about $25 per kilowatt, he said.
A 60 percent fixed, 40 percent variable payment would not have provided enough incentive for many irrigators to continue their participation, Tominaga said.
"I think we would have lost quite a few folks," he said.
The commission also approved a one-hour expansion of the program hours to 9 p.m. on an optional basis.
Under the existing program, customers' pumps can be shut off from 1 to 8 p.m.
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