Case No. AVU-E-07-04

June 14, 2007

Contact: Gene Fadness (208) 334-0339



Avista proposes pilot program to reduce electrical demand


Avista Utilities is seeking state approval of a program to reduce electrical demand during times of peak use when electricity is most expensive. The program would include volunteer customers in the Sandpoint and Moscow areas.


Under the pilot, Avista customers could choose to have Internet protocol thermostats and related technology installed in their homes. The company would present information to participating customers through the use of a Web portal. The thermostats would be used to reduce electrical demand during times of peak use.


The company’s application before the Idaho Public Utilities Commission states the pilot program is projected to cost about $123,000. But the program will be cost-effective, Avista maintains, because the utility anticipates it will save about $150,000 in power costs during the peak-periods when the program is in place. The average wholesale price for electricity on the highest days of electrical demand can be to two to three times higher than average-day prices. On July 24, 2006, generation outages and record regional demand pushed the wholesale market price of power to more than 20 cents per kWh. That compares to peak prices last week at the Mid-Columbia trading hub of between 5.3 and 6.8 cents per kWh.


Avista will call a minimum of four “events” during the year when electrical demand is at peak levels. During the peak events, volunteer customers will participate with Avista in reducing demand, using the technology Avista provides. Each of the peak events is expected to last for four hours, but can be extended up to six hours depending on power price and conditions.


An incentive for customers to participate is the upgraded equipment and associated features they will receive from Avista. Customers opting in for a programmable thermostat will receive a thorough inspection of their heating, ventilating and air conditioning (HVAC) system. Customers with demand response switches will also receive an audit of all equipment controlled by the switch plus a $10 a month credit during July, August, December, January and February.


Avista will evaluate the effectiveness of the program by examining energy savings, effectiveness of the technology, customer acceptance, and interaction of peak demand on the company’s overall distribution system.


The commission is taking public comment on whether the program should be approved. Those wishing to submit comments must do so by no later than June 27. Comments are accepted via e-mail by accessing the commission’s homepage at and clicking on "Comments & Questions." Fill in the case number (AVU-E-07-04) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.


A full text of the commission’s notice along with the company’s application is available on the commission’s Web site. Click on “File Room” and then on “Electric Cases” and scroll down to the above case number.