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The Idaho Public Utilities Commission is accepting a settlement that ensures continuity of Idaho Power demand response programs designed to reduce electric demand during summertime peak-use periods.

Earlier this year, the commission says Idaho Power filed an application to temporarily suspend its A/C Cool Credit program and Irrigation Peak Rewards. The utility said the programs cost more to operate than the value of the energy saved. The downturn in the economy reduced demand on Idaho Power's generation system, the utility claimed, and the utility's own forecasting did not show a peak-hour capacity deficit until 2016.

According to the commission, A/C Cool Credit paid residential customers $7 per month for each of the three summer months for allowing Idaho Power to remotely cycle their air-conditioning units. Irrigation Peak Rewards, meanwhile, paid farmers to curtail irrigation during peak periods.

The commission says the settlement, reached by Idaho Power, commission staff, Idaho Irrigation Pumpers Association, Idaho Conservation League, Snake River Alliance and EnerNOC Inc., keeps costs lower by slightly reducing both the duration of the programs and the amount of credit paid to customers who volunteer to participate.

The settlement, the commission reports, makes the demand reduction more valuable by eliminating, in most cases, the requirement of the utility to notify participating customers in advance of interruption. With advance notice, if the peak use does not eventuate as forecast, the value of the energy saved is lost, the commission notes.

In addition, the settlement allows Idaho Power to leverage the investment it made when the programs started - enrolling customers, installing load-control devices, etc. - while operating them in a more cost-efficient manner, the commission adds.

The commission says the parties agreed that the value to both Idaho Power and its customers of all the programs combined would be about $16.7 million annually. During 2012, Idaho Power spent $5.5 million on the A/C Cool Credit program and $12.3 million on Irrigation Peak Rewards, with much of that expense in the form of direct payments to customers. During 2012, these two programs and FlexPeak, a program that offers incentives to large commercial and industrial customers to create customized efficiency programs, provided about 367 MW of peak reduction.

Furthermore, the commission notes that the settlement says demand response should be used not only during peak-use periods, but also to delay construction of new peaking capacity, avoid transmission line losses and provide improved reliability during emergencies.

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