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HomeMy WebLinkAbout20240430Compliance Filing.pdf 0IQAFIQPOWER. RECEIVED Tuesday, April 30, 2024 3:11 PM IDAHO PUBLIC Connie Aschenbrenner UTILITIES COMMISSION Rate Design Senior Manager caschenbrenner(a)-idahopower.com April 30, 2024 VIA ELECTRONIC FILING Monica Barrios-Sanchez, Secretary Idaho Public Utilities Commission PO Box 83720 11331 W. Chinden Boulevard Building 8, Suite 201-A (83714) Boise, Idaho 83720-0074 RE: Compliance Filing in Case No. IPC-E-12-27 Annual 2024 Distributed Energy Resources Status Report Dear Ms. Barrios-Sanchez: Pursuant to Order Nos. 32846 and 32925 in the above-mentioned case and Order No. 34955 in Case No. IPC-E-20-30, attached for electronic filing is Idaho Power Company's Annual Distributed Energy Resources Status Report for 2024. If you have any questions regarding this filing, please contact Regulatory Analyst Mary Alice Taylor at (208) 388-5645 or mtaylor(a)idahopower.com. Very truly yours, Connie Aschenbrenner CA/sg Enclosures cc: Terri Carlock, Idaho Public Utilities Commission DISTRIBUTED ENERGY :20 RESOURCES ANNUAL :2 t REPORT April 2024 0 00 — 0 00 — p ❑ � o 00 fa:,a:: ❑ o 00 0 00T,+Vf- HIQAW POWER. Introduction &Table of Contents INTRODUCTION Idaho Power Company ("Idaho Power" or "Company") presents its annual Distributed Energy Resources ("DER") Status Report to the Idaho Public Utilities Commission ("Commission") as required by Order Nos. 328461 and 329252 in Case No. IPC-E-12-27 and Order No. 349551 in Case No. IPC-E-20-30.The report begins with a brief regulatory update on recent orders that affect the compensation structure applicable to customers with DERs. Next, the report contains an update on current participation levels and growth rates since the Company's last DER Status Report filed with the Commission in April 2023. Then, the report discusses system reliability considerations and concludes with an update on meter aggregation activity, credit transfers, and accumulated excess net energy credits. TABLE OF CONTENTS Introduction.................................................................................................................................. 1 Tableof Contents.......................................................................................................................... 1 Listof Tables .................................................................................................................................2 Listof Figures................................................................................................................................2 I. Customer Generation in Idaho................................................................................................... 3 Recent Regulatory Changes..................................................................................................... 3 Current Participation and Growth Rates (Exporting Systems).................................................4 II. System Reliability Considerations..............................................................................................8 Installation Concentration versus Capacity.............................................................................8 SmartInverter Installation ......................................................................................................9 1 On page 19 of Order No. 32846, the Commission directed Idaho Power to "file an annual status report with the Commission discussing the net metering service. The report shall discuss, without limitation, the net metering service provisions and pricing and how distributed generation may be impacting system reliability." Z On page 7 of Order No.32925,the Commission stated, "We expect the Company to monitor these changes and to ensure its billing system can accommodate aggregated billing for net metering accounts when doing so becomes cost-justified." 3 On page 11 of Order No. 34955, the Commission found "it prudent to require that the Company's annual Net Metering Report include any known or foreseeable DER related distribution circuit issues or costs and potential smart inverter functionality updates that could address the issues or lower the costs." Distributed Energy Resources 2024 Annual Report Page 1 HIQAW POWER. Introduction &Table of Contents III. 2023 Excess Net Energy Credit Transfers ............................................................................... 10 Meter Aggregation Eligibility................................................................................................. 10 Credit Transfer Requests for Calendar Year 2023 ................................................................. 11 Credit Transfer Magnitude.................................................................................................... 12 Accumulated Excess Net Energy Credit Balances.................................................................. 13 IV. Conclusion.............................................................................................................................. 14 LIST OF TABLES Table 1 Legacy- Idaho Active and Pending Exporting Systems as of March 31, 2024...............4 Table 2 Legacy- Idaho Active and Pending Exporting Systems Nameplate Capacity (MW) as of March 31, 2024.........................................................................................5 Table 3 Non-Legacy- Idaho Active and Pending Exporting Systems as of March 31, 2024 ............................................................................................................................ 5 Table 4 Non-Legacy- Idaho Active and Pending Exporting Systems Nameplate Capacity (MW) as of March 31, 2024 ..........................................................................6 LIST OF FIGURES Figure 1 Cumulative Exporting System Counts by Customer Type, 2014— 1Q2024..................6 Figure 2 Cumulative Exporting System Capacity by Customer Type, 2014— 1Q2024................7 Figure 3 Excess Net Energy Credit Transfers by Customer Class, 2019—2023........................ 12 Figure 4 Accumulated Unused Excess Net Energy Credit Balance, 2014—2023 ..................... 13 Distributed Energy Resources 2024 Annual Report Page 2 0I0AW POWER. Customer Generation in Idaho I. CUSTOMER GENERATION IN IDAHO Recent Regulatory Changes Over the last several years, Idaho Power, as directed by the Commission, has engaged in a series of cases related to studying the costs and benefits of on-site generation on the Company's system. In 2019 and 2020, the Commission issued Order Nos. 34509 (Case No. IPC-E-18-15) and 34854 (Case No. IPC-E-20-26), where it established "legacy" and "non-legacy" status for residential and small general service ("R&SGS") customers and commercial industrial and irrigation ("CI&I") customers, respectively.4 Through their orders, the Commission found that legacy customers will continue to participate in net energy metering (one-for-one kWh credit for excess net energy) under certain criteria through 20451 and non-legacy customers would be subject to future changes to the program fundamentals, including to the compensation structure applied to excess energy. The Commission also ordered the Company undertake a comprehensive study process before any changes applicable to non-legacy customer compensation would be considered.' Idaho Power undertook this study process in Case Nos. IPC-E-21-21 and IPC-E-22-22 and in Order No. 35631 (Case No. IPC-E-22-22), the Commission found the Company had complied with its previous orders by acknowledging the Company's October 2022 Value of Distributed Energy Resource study. In that order, the Commission directed the Company to file a new case requesting to implement changes to its on-site generation offering.' On May 1, 2023, Idaho Power filed Case No. IPC-E-23-14 where it sought to implement changes to the on-site generation offering,which included a modified compensation structure (net billing)that would be applicable to non-legacy on-site generation customers. Under net billing, customers are compensated per kWh exported with an avoided cost-based export credit rate ("ECR") that varies based on the season and time of export. In Order No. 36048, the Commission approved the Company's filing, with modifications, and authorized new program parameters take effect with non-legacy customers' January 2024 billing period.' Accordingly, going forward the Company's DER report will update the Commission on customer participation and aggregation activities for both legacy and non-legacy customers. 4 Order No.34509 pg. 10 and Order No.34854 pg. 10. 5 Order No.34546 pg.9. 6 Order No.34046 pg.22. Order No.35631 pg.28. s Order No.36048 pg.5-6 and 18. Distributed Energy Resources 2023 Annual Report Page 3 HIQAW POWER. Customer Generation in Idaho Current Participation and Growth Rates (Exporting Systems) As of December 31, 2023, Idaho Power's On-Site Generation ("Exporting Systems")9 consisted of 17,930 total active and pending systems with a cumulative nameplate capacity of 167.98 megawatts ("MW") in its Idaho service area. During the calendar year 2023, active and pending Exporting Systems increased by 4,065 (a 29 percent increase) and an incremental nameplate capacity of 40.55 MW. All new systems interconnected in 2023 were solar photovoltaic ("PV"). During the first quarter of 2024, the Company added 466 active Exporting Systems with an aggregate nameplate capacity of 4.11 MW. Additionally, In the first quarter of 2024 there were 677 pending applications with an additional 11.58 MW of nameplate capacity. At the end of the first quarter of 2024, Idaho Power had 18,396 active and pending Exporting Systems, representing a 16 percent growth rate since the same time last year. Legacy Systems Table 1 provides the total number of active and pending Exporting Systems in the Company's Idaho jurisdiction by resource type and customer class for customers with legacy status. Table 1 Legacy- Idaho Active and Pending Exporting Systems as of March 31,2024 Customer Segment Solar PV Wind Hydro/Other Total Schedule 6 Residential On-Site Generation 5,073 22 6 5,101 Schedule 8 Small General On-Site Generation 44 - 4 48 Schedule 84 Commercial & Industrial 162 - - 162 Irrigation On-Site Generation 207 - - 207 Total Idaho 5,486 22 10 5,518 Table 2 provides the total nameplate capacity of active and pending Exporting Systems in the Company's Idaho jurisdiction by resource type and customer class for customers with legacy status. s On-Site Generation includes all Exporting Systems under the terms of Schedule 6,8,or 84,designed to provide the transfer of electric energy to the Company. Distributed Energy Resources 2023 Annual Report Page 4 HIQAW POWER® Customer Generation in Idaho Table 2 Legacy- Idaho Active and Pending Exporting Systems Nameplate Capacity(MW) as of March 31, 2024 Customer Segment Solar PV Wind Hydro/Other Total Schedule 6 Residential On-Site Generation 39.64 0.10 0.07 39.81 Schedule 8 Small General On-Site Generation 0.30 - 0.09 0.39 Schedule 84 Commercial & Industrial 5.62 - - 5.62 Irrigation On-Site Generation 19.50 - - 19.50 Total Idaho 65.01 0.10 0.16 65.33 Note:Totals may not sum due to rounding. Non-Legacy Systems Table 3 provides the total number of active and pending Exporting Systems in the Company's Idaho jurisdiction by resource type of customer class for customer with non-legacy status. Table 3 Non-Legacy- Idaho Active and Pending Exporting Systems as of March 31, 2024 Customer Segment Solar PV Wind Hydro/Other Total Schedule 6 Residential On-Site Generation 12,695 1 1 12,697 Schedule 8 Small General On-Site Generation 33 - - 33 Schedule 84 Commercial & Industrial 93 - - 93 Irrigation On-Site Generation 55 - - 55 Total Idaho 12,876 1 1 12,878 Distributed Energy Resources 2023 Annual Report Page 5 HIQAW POWER. Customer Generation in Idaho Table 4 provides the total nameplate capacity of active and pending Exporting Systems in the Company's Idaho jurisdiction by resource type and customer class for customers with non- legacy systems. Table 4 Non-Legacy- Idaho Active and Pending Exporting Systems Nameplate Capacity(MW)as of March 31,2024 Customer Segment Solar PV Wind Hydro/Other Total Schedule 6 Residential On-Site Generation 96.31 0.002 0.004 96.31 Schedule 8 Small General On-Site Generation 0.29 - - 0.29 Schedule 84 Commercial & Industrial 4.19 - - 4.19 Irrigation On-Site Generation 5.97 - - 5.97 Total Idaho 106.75 0.002 0.004 106.76 Note:Totals may not sum due to rounding. Total Systems Figures 1 and 2 detail the cumulative Exporting System counts and nameplate capacity, respectively, by customer class in the Company's Idaho jurisdiction for both customers with legacy and non-legacy status, from 2014 through the first quarter of 2024 (including pending applications). Figure 1 Cumulative Exporting System Counts by Customer Type, 2014—1Q2024 20,000 18,000 16,000 �14,000 012,000 U E10,000 y 8,000 cn 6,000 4,000 2,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q2024 ■Residential ■Commercial & Industrial ■ Irrigation Distributed Energy Resources 2023 Annual Report Page 6 HIQAM POWER® - Customer Generation in Idaho Figure 2 Cumulative Exporting System Capacity by Customer Type, 2014—1Q2024 200 180 160 140 120 I 100 c� ■ co 80 v 60 40 20 — — — - ■ 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q2024 ■Residential ■Commercial & Industrial ■Irrigation Distributed Energy Resources 2023 Annual Report Page 7 UIQAW POWER. System Reliability Considerations II. SYSTEM RELIABILITY CONSIDERATIONS There are 691 electrical distribution circuits in the Company's service area. Considering all customer-owned on-site generation installations across all jurisdictions, all rate classes, and all resources, as of March 31, 2024, there were 17,719 active, customer-owned on-site generation systems. These systems total approximately 161 MW on 526 distribution circuits—compared to 15,133 active operational systems totaling approximately 139 MW across 485 distribution circuits on March 31, 2023. Installation Concentration versus Capacity The circuits containing the greatest number of customer-owned on-site generation systems are in Ada and Elmore County,with the densest concentrations in southeast and south Boise and north Mountain Home. The largest number of customer-owned on-site generation systems connected on a single distribution circuit is 255, with a total rated capacity of 1,660 kilowatts ("kW"), compared to 222 systems with a total capacity of 1,433 kW in 2022. This circuit primarily serves residential customers in Boise. The distribution circuit in Idaho with the greatest customer-owned on-site generation capacity has not changed from 2022. That circuit still has 29 solar PV systems with a total rated capacity of 2,723 kW (average system size over 90 kW). This circuit primarily serves agriculture and rural customers in the Magic Valley with a summer peak load of approximately 7,100 kW. The distribution circuit in Idaho with the second-highest customer-owned on-site generation capacity has 64 solar PV systems with a total rated capacity of 1,921 kW (average system size is 30 kW) and with 15 larger solar PV systems on it accounting for 1,400 kW of the feeder's total capacity. This circuit also serves agriculture and rural customers in the Magic Valley and with a summer peak load of approximately 19,400 kW. The number of circuits with total customer-owned on-site generation capacity greater than 1,000 kW increased from 16 to 19 circuits in 2023. Eleven of the circuits are in the Magic Valley with one circuit serving a single industrial customer and all others serving irrigation and rural customer loads. The other eight circuits include five in Ada County, two in Canyon County, and one in Elmore County that primarily service residential customers. The average system size for these eight feeders is 7.3 kW. As a comparison, Idaho Power had one distribution circuit with more than 1,000 kW of generation capacity on a single distribution feeder in 2020. The customer-owned on-site generation connected capacity on the Company's distribution system continues to grow and has increased year-over-year from 3.6 to 4.7 percent of the total system peak load. The Company has managed the impacts on these circuits, when necessary, by Distributed Energy Resources 2023 Annual Report Page 8 HIQAW POWER. System Reliability Considerations requiring customer-funded distribution upgrades pursuant to Rule H and, in more rare instances, requiring customer-funded substation upgrades. Smart Inverter Installation All new systems applying to interconnect are required to install smart inverters10 to support the distribution system's ongoing stability and reliability. As of January 1, 2024, Idaho Power requires inverters to comply with the IEEE 1547-2018 certification11 which meet all smart inverter requirements as defined by the Institute of Electrical and Electronics Engineers ("IEEE").The IEEE Standard 1547 establishes the technical standard for interconnection and interoperability of distributed energy resources and Idaho Power is an active participant in the review process of this standard which is currently being updated and revised. 10 Order No. 34955 issued in Case No. IPC-E-20-30 approved Schedule 68, effective March 23, 2021. Schedule 68 requires smart inverter functionality to be enabled for all new applications for customer generation. 11 Underwriters Laboratories Standard for Safety 1741 — Inverters, Converters, Controllers and Interconnection System Equipment for Use with Distributed Energy Resources,Supplement B. Distributed Energy Resources 2023 Annual Report Page 9 HIQAW POWER. 2023 Excess Net Energy Credit Transfers III. 2023 EXCESS NET ENERGY CREDIT TRANSFERS Meter Aggregation Eligibility Schedule 6, Residential Service On-Site Generation ("Schedule 6"), Schedule 8, Small General On-Site Generation ("Schedule 8"), and Schedule 84, Large General, Large Power, and Irrigation On-Site Generation ("Schedule 84") provide for customers with Exporting Systems to submit requests to transfer excess net energy credits by January 31 of each year. The Company applies the following criteria12 from Schedules 6, 8, and 84 (collectively referred to as "aggregation criteria") to all requests received: i. The account subject to offset is held by the customer; and ii. The meter is located on, or contiguous to, the property on which the Designated Meter13 is located. For the purposes of the tariff, contiguous property includes property that is separated from the premises of the Designated Meter by public or railroad rights of way; and iii. The meter is served by the same primary feeder as the Designated Meter at the time the customer files the application for the Exporting System;14 and iv. The electricity recorded by the meter is for the customer's requirements; and v. For customers taking service under Schedule 1 or Schedule 7, credits may only be transferred to meters taking service under Schedule 1 or Schedule 7. For customers taking service under Schedule 9, Schedule 19, or Schedule 24, credits may only be transferred to meters taking service under Schedule 9, Schedule 19, or Schedule 24. In November of 2023, prior to the credit transfer window opening on December 1, Schedule 6,Schedule 8,and Schedule 84 customers with an excess net energy balance were sent a postcard reminding them of the meter aggregation process, a list of important things to note about the transfer process, the deadline for them to apply, a phone number to contact, and the website with the requirements and an online form. This postcard was sent to a total of 9,431 customers. The Company also posted a message on all Schedule 6, Schedule 8, and Schedule 84 customer 12 The aggregation criteria were established by Order No. 32925 in Case No. IPC-E-12-27. 13 Schedules 6, 8, and 84 define the Designated Meter as the retail meter physically connected to the Exporting System. 14 Schedules 6, 8, and 84 define an Exporting System as"a Customer-owned DER under the terms of Schedule 6, 8, or 84,which is designed to provide for the transfer of electric energy to the Company." Distributed Energy Resources 2023 Annual Report Page 10 HIQAM POWER. 2023 Excess Net Energy Credit Transfers bills issued during the month of December informing them of when the transfer window closes and provided a link to a webpage where customers could find more information. Lastly, on January 16, 2024, the Company sent an email reminder to 80 customers who submitted transfer requests in 2022 but had not yet submitted a request for 2023.The email reminded the customer of the meter aggregation process and deadline and provided a link for them to submit a transfer request. Credit Transfer Requests for Calendar Year 2023 In Order No. 32925, the Commission directed Idaho Power to keep it apprised of the number of customers choosing to transfer excess net energy credits under the meter aggregation rules.15 As of the application deadline, January 31, 2024, the Company received 372 applications for transfer, representing a 20 percent increase from the previous year. The applications were reviewed during February against the aggregation criteria. The Company determined that 306 of the requests were eligible for transfer based on the aggregation criteria. The total amount transferred was 13,626,674 kilowatt-hours ("kWh") generated from Exporting Systems taking service under Irrigation (81 percent), Large General (10 percent), Residential (8 percent), and Small General (1 percent) rate schedules. The 13,626,674 kWh were transferred to customers taking service under Irrigation (77 percent), Large General (14 percent), Residential (9 percent), and Small General (less than 1 percent) rate schedules.16 The Company received 66 applications that were ineligible for transfer based on the following: • 5 applications requested to transfer to non-compatible rate schedules • 49 applications were duplicate requests • 8 applications requested a transfer to a meter that was not on contiguous property • 4 applications were not on the same feeder The Company sent letters to all customers whose requests were ineligible for transfer explaining the reason for the denial. is While Order No. 36048 issued in IPC-E-23-14 directed the Company to update its transfer rules for non-legacy customers,the change did not impact credit transfers requested in advance of January 31,2024.Accordingly, next year's report will delineate between kWh aggregation applicable to legacy customers and financial credit aggregation applicable to non-legacy customers. 1a Totals may not sum due to rounding. Distributed Energy Resources 2023 Annual Report Page 11 HIQAM POWER® 2023 Excess Net Energy Credit Transfers Credit Transfer Magnitude Following the implementation of the excess net energy credit transfers authorized by the Commission in Order No. 32925, the Company has experienced growth in the magnitude of excess net energy transfers, most notably within the irrigation class. The Company transferred approximately 206,000 excess net energy credits in 2014 (the first year of meter aggregation), increasing to over 13.6 million in 2023. Compared to 2022, total kWh transfers decreased over 5.6 million or 29 percent. While residential kWh transfers saw a 32 percent increase between 2022 and 2023, all other customer classes saw a decrease in kWh credit transfers, including a 34 percent decrease in irrigation transfers. Annual availability of irrigation credit balances will vary depending on a combination of factors which can include weather and commodity pricing for energy intensive crops. Figure 3 shows the total excess net energy credit transfers for the last five years (2019 through 2023) by customer class. Figure 3 Excess Net Energy Credit Transfers by Customer Class, 2019—2023 25,000,000 20,000,000 19,263,396 15,000,000 13,626,674 10,000,000 5,000,000 4,627,989 2,118,709 3,241,836 2019 2020 2021 2022 2023 ■Residential ■Commercial ■Irrigation Distributed Energy Resources 2023 Annual Report Page 12 HIQAM POWER. 2023 Excess Net Energy Credit Transfers Accumulated Excess Net Energy Credit Balances After the implementation of the kWh crediting for excess net energy authorized by the Commission in Order Nos. 32846 and 32872 in January 2014, the Company has accumulated significant unused kWh credit balances.11,18 The excess net energy credit balance at the end of 2014 was approximately 0.5 million, increasing to approximately 34.8 million kWh credits at the end of 2023. Figure 4 shows the accumulated excess net energy credit balance for 2014 through 2023. Figure 4 Accumulated Unused Excess Net Energy Credit Balance,2014—202319 40 34.8 35 30 28.9 0 25 20 17.1 3: 15 11.3 10 7.6 5 4.3 0.5 ■ 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 17 In Order No.32846,the Commission stated, "we find it fair,just,and reasonable for the kWh credit to indefinitely carry forward to offset future bills as long as the customer remains on the net metering service at the same generation site.Allowing the credits to carry forward indefinitely ensures that customers will be able to use their credits when they need them and thus receive the benefits of their systems." 18 Pursuant to Order No. 36048, the Commission approved the Company's request to convert all non-legacy customers' unused kWh credits to a financial credit on December 31, 2024.The change will be reflected in next year's annual DER status report. 19 The accumulated excess net energy credit balance represents all unused credits as of December 31. It does not reflect the potential reduction due to future offset at the premise generated or transferred to another meter for offset. Distributed Energy Resources 2023 Annual Report Page 13 HIQAW POWER. Conclusion IV. CONCLUSION The continued expansion of on-site generation on Idaho Power's system highlights the evolution of the Company's electrical grid and the importance of evaluating service provisions and pricing to ensure safe, reliable, and fair-priced electricity. Idaho Power will continue to monitor customer generation and keep the Commission informed of its impact on system reliability. The 2025 report will contain additional elements related to: (1) meter aggregation (as 2024 will be the first-year non-legacy customers will be eligible to transfer financial credits), and (2) updated reporting requirements related to the quantity and cost of all upgrades for on-site generation customers, along with an approximation of their associated ongoing operations and maintenance costs.20 20 March 28, 2024,compliance filing,submitted to the Commission in Case No. IPC-E-23-14. Distributed Energy Resources 2023 Annual Report Page 14