1. Idaho Power Company Demand Response & Dynamic Pricing Programs PNDRP December 5, 2008 Darlene Nemnich Pete Pengilly

2. Overview of Idaho Power DR and Pricing Programs Demand Response Programs –Residential A/C Cycling: 20,000 customers, -20 MW max –Irrigation Peak Rewards, 897 service points, -35 MW max Redesign in 2009 –In Design - DR Aggregator for commercial Pricing Programs –Mandatory TOU for all industrial customers –Proposed mandatory TOU for all large commercial customers –Residential CPP and TOU pilot 2005-2006, ongoing to-date AMI –2009 will be year one of three-year deployment

3. Overview of Idaho Power DR and Pricing Programs Demand Response Programs –Residential A/C Cycling: 20,000 customers, -20 MW max load –Irrigation Peak Rewards, 897 service points, -35 MW max load –In Design - DR Aggregator for commercial Pricing Programs –Mandatory TOU for all industrial customers –Proposed mandatory TOU for all commercial customers –Residential CPP and TOU pilot 2005-2006, ongoing to-date AMI –2009 will be year one of three-year deployment

4. Energy Watch Residential CPP Pilot-Ongoing Limited to Emmett, Idaho customers Maximum 10 event days, June 15 – August 15 Generally, no more than two consecutive days will be called Critical peak hours – 5:00 p.m. to 9:00 p.m. weekdays Rates: –20¢ /kWh during critical peak hours –5.7783¢ /kWh flat rate all other hours of the year Customer notification: –Email sent by noon day-ahead of event –Email notification initiates automatic calling to all customers on program Customers must be contacted before 4:00 the day before event –This process also updates website

5. Time-of-Day Residential TOU Pilot-Ongoing Limited to Emmett, Idaho customers TOU rate in effect June 1 – August 31 Time blocks and current rates: –On-Peak 1:00 pm to 9:00 pm WD8.8683 ¢/kWh –Mid-Peak 7:00 am to 1:00 pm WD6.5148 ¢/kWh –Off-Peak 9:00 pm to 7:00 am WE/Holidays4.8074 ¢/kWh Flat rate September-May 5.7783 ¢/kWh

6. Time-of-Day Program Rates Differentials 20052006-2008 on peak/off peak30%84% on peak/mid peak11%36% mid peak/off peak16%35%

7. Customer Solicitation Current process Send postcard/bill insert to eligible customers Send thank-you letter to existing customers Advertise in local paper Hold public event in person to answer questions

8. Research Plan Time-of-Day and Energy Watch Data Analysis –RLW Analytics 2006 & 2007 Bill Analysis Energy Consumption / Peak Usage Analysis Temperature Usage Correlation Customer Surveys –2005 – Northwest Research Group, Boise Idaho –2006 - Clearwater Research, Boise Idaho 2007-2008 Ongoing reporting

9. Program Participation Energy WatchTime-of-Day 20057690 20066876 20075886 20085882

10. Data Analyses

11. TOD Energy Usage Results

12. - 2006

13. EW Energy Usage 2005

14. EW Energy Usage - 2006

15. Load Analysis Results Average difference between participant group and control group for June-August Energy Watch 4 hour average load reduction Time-of-Day kWh difference* 2005200620052006 1.33 kW1.26 kW On-Peak 54 kWh less Mid-Peak 8 kWh less Off-Peak 49 kWh more On-Peak 36 kWh more Mid-Peak 22 kWh more Off-Peak 146 kWh more

16. EW Event Days 2005 Temperature Usage Correlation

17. EW Event Days 2006 Temperature Usage Correlation

18. Weather Regression for the Energy Watch Program 2005 2006 EW Reduction vs. Temperature T-value of 1.82 and a p-value of 0.078. Reduction = 0.62738+0.000762*Temperature T-value of 5.55 and a p-value of 0.0001 Reduction = -1.09089+0.02611*Temperature

19. EW Energy Usage – 2007 Average event showing each event

20. EW Energy Usage – 2007 Day before, day of, day after

21. EW Energy Usage – 2007 Two consecutive days

22. Customer Survey Results

23. Likelihood to Participate Again Energy WatchTime-of-Day 2005200620052006 Very Likely 62%67%68%58% Somewhat Likely 22%24%23%20%

24. Customer Survey Results Participants felt there was a reduction in their electricity bill Energy WatchTime-of-Day 2005200620052006 41%68%47%72%

25. Bill Analysis Results Average difference between control group bill and participant bill for June-Aug Energy WatchTime-of-Day 2005200620052006 -$22.26-$24.74-$10.57-$1.57

26. Customer Survey Highlights - 2005 The most effective means to provide information is direct mail or bill stuffer Those who did not participate indicated they felt the programs were not convenient or would not save enough electricity, also they did not want to change when they used electricity and that there was not enough incentive to participate In order to acquire more customers for these programs, the utility will have to show the benefits of participating and provide messaging that customers will not lose control

27. Customer Survey Highlights - 2006 Satisfaction is tied to the sense that their electricity bill decreased and that they were conserving energy Most participants indicated they changed the way they used electricity Less than half of all participants and less than one third of Energy Watch participants have central air conditioning About half of the participants are over the age 65 Most participants have been Idaho Power customers more than 25 years

28. Lessons Learned Labor Intensive –Call Center –Meter Support –Corporate Communications –Customer Satisfaction Automated System(s) for Customer Notification Need infrastructure in place Need constant marketing/reinforcement More and easier “near real time” feedback to customers No clear customer elasticity Review program design –Hours –Rates

29. Questions/Comments