20250515Comments.pdf

RECEIVED
May 15, 2025
Gregory M. Adams, ISB No. 7454 IDAHO PUBLIC
Richardson Adams, PLLC UTILITIES COMMISSION
515 N. 27th Street
Boise, Idaho 83702
Phone: [phone]
Email: [e-mail]
Rose Monahan, CA Bar No. 329861 (pro hac vice)
Sierra Club
2101 Webster Street, Suite 1300
Oakland, California 94612
Phone: [phone]
Email: [e-mail]
Attorneys for Sierra Club and Vote Solar
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR ITS CASE NO. IPC-E-25-15
FIRST ANNUAL UPDATE TO THE
EXPORT CREDIT RATE FOR NON- SIERRA CLUB AND VOTE SOLAR'S
LEGACY ON-SITE GENERATION COMMENTS REGARDING THE FIRST
CUSTOMERS FROM JUNE 1, 2025 UPDATE TO IDAHO POWER'S
THROUGH MAY 31, 2026, IN EXPORT CREDIT RATE
COMPLIANCE WITH ORDER NO. 36048
May 15, 2025

TABLE OF CONTENTS
I. INTRODUCTION.............................................................................................................. 1
II. BACKGROUND................................................................................................................3
III. ARGUMENT...................................................................................................................... 7
A) Idaho Power's Application Contains Errors and Omissions that Undervalue On-Site
GenerationExports...................................................................................................................... 7
i. Avoided Energy................................................................................................................ 8
ii. Integration Costs .............................................................................................................. 9
iii. Avoided Generation Capacity........................................................................................ 12
iv. Avoided or Deferred Transmission and Distribution Costs........................................... 19
B) A Virtual Power Plant Program Will Provide Much Needed Capacity in a Cost-
EffectiveManner....................................................................................................................... 22
C) The Commission Should Approve Idaho Power's Request to Consolidate its Annual
Distributed Energy Resources Status Report with the Annual ECR Update. ........................... 24
IV. RELIEF REQUESTED...................................................................................................25
V. REQUEST FOR A FORMAL HEARING....................................................................26
i

LIST OF FIGURES
Figure 1. Historical and Corrected ELCC Values (2020-2024)................................................. 13
Figure 2. Winter Hours of High, Medium, and Low Risk as Identified in the 2023 IRP. ......... 16
Figure 3. ELCC of Existing and Future Resources from Idaho Power 2023 IRP...................... 17
LIST OF ATTACHMENTS
Attachment I Idaho Power Company's Response to Sierra Club and Vote Solar's
Production Request No. 1.1
Attachment 2 SCNS Workpapers I
Attachment 3 SCNS Workpapers 2
ii

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR ITS CASE NO. IPC-E-25-15
FIRST ANNUAL UPDATE TO THE
EXPORT CREDIT RATE FOR NON-
LEGACY ON-SITE GENERATION
CUSTOMERS FROM JUNE 1, 2025
THROUGH MAY 31, 2026, IN
COMPLIANCE WITH ORDER NO. 36048
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST
UPDATE TO IDAHO POWER'S EXPORT CREDIT RATE
The Sierra Club and Vote Solar hereby submit joint comments in response to Idaho
Power Company's ("Idaho Power" or"Company") April 1, 2025 Application for its first annual
update to the Export Credit Rate ("ECR"). We appreciate the Idaho Public Utilities
Commission's ("PUC" or"Commission") careful consideration of this issue and provide several
recommendations to improve the accuracy and fairness of the ECR update. Our
recommendations address specific ECR components and propose necessary adjustments to
ensure that the rate accurately reflects the value of exported on-site generation. The goal of our
recommendations is to help the Commission conduct a thorough evaluation of this initial ECR
update and balance precision with other essential ratemaking principles, particularly simplicity
and gradualism. Adoption of our recommendations will result in an ECR that values the exports
from on-site generation resources more accurately and an ECR framework that is more
sustainable and transparent to stakeholders and customers.
I. INTRODUCTION
The Sierra Club is a national non-profit environmental and conservation association
dedicated to the protection of public health and the environment. Vote Solar is an independent
501(c)(3)non-profit working to repower the United States with clean energy by making solar
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 1

power more accessible and affordable. Sierra Club and Vote Solar have actively participated in
prior proceedings related to the value of distributed solar before the Commission, including IPC-
E-17-13 regarding new schedules for customers with on-site generation, IPC-E-18-15 regarding
Idaho Power's Application to study net excess energy from customer on-site generation, and
IPC-E-23-14 which established the ECR methodology. Our organizations have a shared interest
in ensuring the ECR is a fair reflection of the value of exported solar energy. Each of our
organizations includes members who are customers of Idaho Power and/or current or prospective
Idaho Power net billing customers.
The Sierra Club and Vote Solar's comments cover three topics: first we identify errors in
Idaho Power's proposed ECR calculation, and then propose adjustments and offer
recommendations to improve the ECR. Second,we describe the benefits of"Virtual Power
Plant"programs and the opportunity to deliver cost-effective capacity to Idaho Power's grid by
coordinating the dispatch of distributed storage resources. Third, we respond to, and support,
Idaho Power's proposal to consolidate its annual DER Status Report with the annual ECR
update. Based on these recommendations, we suggest next steps to help the Commission obtain
the data and information needed to investigate contested ECR components and reach a resolution
before the December 1, 2025 implementation date.1
Sierra Club and Vote Solar's lack of comments on any specific aspect of Idaho Power's
application should not be interpreted as acquiescence or agreement with the Company. We
reserve the right to express additional opinions, and to amend or supplement the
recommendations provided in these initial comments as new information becomes available
through discovery and as this proceeding progresses. Sierra Club and Vote Solar also reserve the
1 Order No.36558(April 21,2025).
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right to express additional opinions in response to comments provided by other parties to this
proceeding.
Sierra Club and Vote Solar recommend that the Commission take the following actions:
1) Direct Idaho Power to use a 3-year rolling average of market prices to determine the
avoided energy component of the ECR, as proposed in Idaho Power's final VODER
study, and update its current ECR proposal accordingly;
2) Direct Idaho Power to compensate net billing customers for the historical errors in Idaho
Power's ECR calculations through an on-bill credit;
3) Approve a capacity contribution calculation that is transparent and reviewable by
stakeholders and regulators and direct Idaho Power to update its current ECR proposal
accordingly;
4) Reject Idaho Power's proposed integration costs, which inappropriately apply utility-
scale solar metrics to distributed solar installations and neglect the significant impact that
batteries have to reduce integration costs, and direct the Company to re-calculate
integration costs using a profile appropriate for on-site generation;
5) Reject Idaho Power's proposed$0 avoided transmission value and direct Idaho Power to
accurately account for quantifiable avoided transmission costs attributable to on-site
generation and update its ECR proposal accordingly; and
6) Direct Idaho Power to propose a"Virtual Power Plant"program including a capacity
payment that is equal to the utility's cost for battery storage.
Finally, if the Commission determines that it is not able to accept our recommendations
based solely on opening and reply comments, as currently, provided for in the procedural
schedule, we request that the Commission a formal hearing to address factual disputes and to
allow for parties to introduce alternative ECR calculations.
II. BACKGROUND
The question of appropriate rates for Idaho Power customers with on-site generation has
a long and complex history before the PUC, spanning many dockets over more than eight years.
Throughout this process, the Commission has consistently recognized that the question of
appropriate compensation for customers with on-site generation is a difficult and often
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
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contentious issue and that there are a range of valid approaches for quantifying the value of on-
site generation.2 Order No. 34046 implored the utility and stakeholders to "promote creativity in
solutions related to this unique, important class of customer."3 In search of a solution, the
Commission has emphasized the need for the public, stakeholders, and the utility to each provide
input into the process and work cooperatively.4 The Commission also sought to ground its
investigation in data that is not only credible and accurate but also "readily available to the
public and in the Commission's decision-making record" in order to balance accuracy with a
need for a transparent process that is understandable to customers.5
In January 2021, Idaho Power initiated Docket IPC-E-21-21 with an Application to begin
the multi-phase process for the study of costs,benefits and compensation for on-site generation.
2 In the Matter of the Application of Idaho Power Company for Authority to Establish New Schedules for Residential
and Small General Service Customers with On-Site Generation,Case No. IPC-E-17-13,Order No. 34046 at 18
(May 9,2018)(establishing a separate rate class for on-site generation customers recognized that the Commission
was undertaking exploration of"difficult on-site generation issues that will take time to resolve.") [hereinafter
"Order No. 34046"]; In the Matter of Idaho Power Company's Application to Complete the Study Review Phase of
the Comprehensive Study of Costs and Benefits of On-Site Customer Generation &For Authority to Implement
Changes to Schedules 6, 8, and 84,Case No.IPC-E-22-22,Order No. 35631 at 28(Dec. 19,2022)(acknowledging
Idaho Power's VODER study and clarifying that"our decision is not a determination that a specific method or value
within the Study is superior to another.")
3 Order No.34046 at 18
a At the start of its investigation into compensation for on-site generation,the Commission directed the Company to
design a comprehensive costibenefit study"in coordination with the parties and the public"including additional
opportunities for public comment during both the study design and study review phase.In the Matter of the Petition
of Idaho Power Company to Study the Costs,Benefits, and Compensation of Net Excess Energy Supplied by
Customer On-Site Generation,Case No.IPC-E-18-15,Order 34509 at 9-10(Dec.20,2019) [hereinafter"Order No.
34509"].In Order No.34046 the Commission stated"The rate and rate design elements of this new class must be
analyzed thoroughly and discussed cooperatively,with an eye toward compromise"and that it sought to "promote
creativity in solutions related to this unique,important class of customer."Order No. 34046 at 19.
5 Order No.34509 rejected a Settlement Agreement and directed the Company to undertake further analysis because
data underlying the settlement process was not in the public record or available to the public.Order No. 34509 at 7-
9.The Commission directed Idaho Power to complete a"credible and fair study on the costs and benefits of
distributed on-site generation to the Company's system"with specific instructions that"(1)The study must use the
most current data possible and must be readily available to the public,and in the Commission's decision-making
record... (2)The Company must design the study in coordination with the parties and the public... (3)The study
must be written so it is understandable to an average customer,but its analysis must be able to withstand expert
scrutiny."Id. at 9. Order No.35284 approved the Company's proposed study framework,reiterating that"the study
must use the most current data possible,and the data must be readily available to the public and in the Commission's
decision-making record" In the Matter of Idaho Power Company's Application to Initiate a Multi-Phase
Collaborative Process for the Study of Costs,Benefits, and Compensation of Net Excess Energy Associated With
Customer On-Site Generation,Case No.IPC-E-21-21,Order No. 35284 at 9(Dec. 30,2021).
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In June 2022, Idaho Power filed a Value of Distributed Energy Resources ("VODER") study
outlining its proposal for valuing on-site generation exports.6 In 2023, Idaho Power initiated
Docket IPC-E-23-14 requesting implementation of its proposed net billing program and the
ECR. The Commission approved the first ECR values at the conclusion of that docket in Order
No. 36048.
Order No. 36048 approved the net billing program and initial ECR values but did not
limit the Commission's ability to continually evaluate the ECR methodology and calculations.
As with any class of customers, the Commission has the authority and the responsibility to
evaluate whether rate decisions remain appropriate in light of new data and changing conditions.
In fact, when the Commission established separate rate classes for customers with on-site
generation it stated"[t]o be clear, the separate rate classes established here are not meant to be
punitive nor discriminatory—nor, as with rates, are they a classification that will not evolve."7
Throughout its evaluation of on-site generation, the PUC has recognized that distributed
solar resources both provide value to the grid and result in benefits to the state of Idaho and
ratepayers broadly. Clean, local energy generated by rooftop solar has many positive impacts,
from reductions in air and water pollution to jobs and economic development from growth in the
solar industry. Prior PUC Orders have determined that while "[w]e have not been granted the
legislative or executive authority to monetize many of the environmental attributes addressed by
Parties and customers . . . there are environmental considerations that are quantifiable and will be
included in an ultimate determination of fair,just and reasonable terms for the Company's on-
6 In the Matter of Idaho Power Application to Complete the Study Review Phase of the Comprehensive Study of
Costs and Benefits of On-Site Customer Generation,Case No.IPC-E-22-22,Application(June 30 2022).
Order No.34046 at 19
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site generation program."8 The substantial environmental, health, and social benefits from on-site
generation are not quantified in the ECR,but are worth considering as the PUC revisits rates for
on-site generation customers to ensure they remain just, reasonable, and in the public interest. A
fair, stable, and predictable ECR will help to support the continued growth of the rooftop solar
market and its benefits to all ratepayers.
The first annual update is an important opportunity to evaluate whether the ECR is
working as the Commission intended and whether there are opportunities for improvements. The
utility environment has changed substantially since the implementation of the ECR. After
decades of stagnant or declining load growth, utilities are now facing substantial near-term load
growth. In this context, the demand reductions from on-site generation are even more important
to help reduce utility costs for all customers.
In isolation, Idaho Power's proposed reduction to the ECR will discourage investments in
on-site generation, but the financial prospects of an investment in rooftop solar have also
changed for the worse as a result of Idaho Power's last General Rate Case (Case No. IPC-E-23-
11).Notably, the significant increase to customers' monthly fixed charge (and lower volumetric
energy charges) approved in the rate case suppresses the financial benefits of customer
investments in both energy conservation and on-site generation. Ultimately, reduced investment
in on-site generation will increase costs for all customers due to higher expenditures on
generation, transmission, and distribution infrastructure to meet load growth that could have been
served, in part, through private investments in on-site generation.
We respectfully suggest that Idaho Power's Application does not currently include
sufficient information to determine that the Company's proposed ECR accurately values the
s Order No.35284 at 12
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
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contributions of on-site generation. Additionally, the calculations underlying the ECR contain
errors and omissions that undervalue exports from on-site generation. We recommend several
changes to improve the accuracy of the ECR and ensure the Commission is able to base its
decision on a record of sound and transparent publicly available data and methodologies.
III. ARGUMENT
A) Idaho Power's Application Contains Errors and Omissions that Undervalue On-
Site Generation Exports.
Idaho Power's proposed update to the ECR would result in a 61%reduction to the
average compensation received by customers with on-site generation in exchange for exported
energy, including an 80%reduction in the rate received during the eight-month non-summer
season. This dramatic change will have substantial impacts on the monthly utility bills of Idaho
Power's approximately 13,800 non-legacy on-site generation customers.9 Several of Idaho
Power's proposed ECR calculations contain errors or omissions that result in an ECR that does
not fairly reflect the value of exported on-site generation. In some cases, information in the
record is not sufficient to determine whether the proposed ECR is accurate or appropriate.
Additionally, we are concerned that Idaho Power's proposed reduction to the ECR value
would result in rate shock for on-site generation customers. Gradualism is a well-established
principle of sound utility ratemaking. Utilities and Commissions place a high priority on
avoiding or mitigating sudden or dramatic changes to utility rates, recognizing that customers are
harmed by volatile swings in their costs for purchasing electricity from year to year. Approval of
Idaho Power's ECR as proposed signals that customers with on-site generation do not merit the
same gradualism considerations. Our comments address the following specific ECR components:
9 Idaho Power Company's Application,Attachment 2,2024 Distributed Energy Resources Annual Report at Table
3.
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(1) avoided energy, (2) integration costs, (3) avoided generation capacity, including the solar
capacity contribution and generation capacity costs, and(4) avoided or deferred transmission and
distribution costs.
i. Avoided Energy
Idaho Power's Application proposes an avoided energy cost component of 1.7682 cents
per kilowatt-hour during the summer season and 0.9540 cents per kilowatt-hour during the non-
summer season, or 1.2852 cents per kilowatt-hour averaged across the year. The avoided energy
cost calculation is based on twelve months of Energy Imbalance Market(`BIM") Load
Aggregation Point (`SLAP") market prices, weighted by on-site customer generation exports.
The proposed update results in a 70%to 80%reduction in the ECR avoided energy component
compared to the current rate.
Market prices for electricity are influenced by a wide variety of external factors including
fuel price fluctuations, extreme weather, drought conditions impacting hydroelectric generation,
and global supply chain disruptions or geopolitical events. Volatility and uncertainty in the
market price component of the ECR makes it difficult for families and businesses to predict the
financial benefits of an investment in on-site solar, and basing the ECR on 12 months of
historical EIM ELAP prices exposes customers with on-site generation to a level of risk and
uncertainty that would be untenable for other generation resource owners. For example, utilities
recover the cost of investments in generation resources through customer base rates over many
years, regardless of swings in energy market prices. Third-party developers contract to sell
energy to utilities through long-term, fixed-price Power Purchase Agreements of up to 20 years.
Just as a utility or third-party developer would struggle to obtain financing for a generation
resource whose value is uncertain after the first year, families and businesses will be unable to
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evaluate whether an investment in on-site generation is financially beneficial if the value of the
ECR can change so dramatically from year to year.
Using a longer-term historical record of energy prices will improve the stability of the
ECR from year to year. Idaho Power's VODER study presented an avoided energy value based
on a three-year trailing average of the ELAP price,10 and Vote Solar was supportive of this
approach." In its approval of the initial ECR, the Commission recognized the importance of
balancing accuracy with stability in other ECR elements and found that use of a five-year trailing
average was reasonable for purposes of the ELCC calculation.12 Using a three-year average of
ELAP prices will help to mitigate severe swings in the ECR value from year to year,promote
gradualism, and provide improved predictability and stability for on-site generation customers.
We recommend that avoided energy costs for the ECR update be calculated using the 36 months
of ELAP market prices from January 2022 through December 2024 and that the Commission
direct Idaho Power to update its current application using that 36 month average.
ii. Integration Costs
Idaho Power's Application proposes an integration charge of 0.697 cents per kilowatt-
hour—more than double the 0.293 cents per kilowatt-hour charge used in the current ECR. The
proposed integration charge is derived from Idaho Power's 2024 Variable Energy Resource
"In the Matter of Idaho Power Company's Application to Complete the Study Review Phase of the Comprehensive
Study of Costs and Benefits of On-Site Customer Generation&For Authority to Implement Changes to Schedules 6,
8, and 84,Case No.IPC-E-22-22,2022 VODER Study,October 2022, Section 4.1.1.3,available at
https://puc.idaho.gov/Fileroom/PublicFiles/ELEC/IPC/IPCE2222/CaseFiles/20221026_Voder%20 Study_Clean.pdf.
"In the Matter of Idaho Power Company's Application for Authority to Implement Changes to the Compensation
Structure Applicable to Customer On-Site Generation Under Schedules 6, 8, and 84 and to Establish an Export
Credit Rate Methodology,Case No. IPC-E-23-14,Vote Solar's Comments Regarding Changes to On-Site
Generator's Compensation Structure and Export Credit Rate(October 12 2023).
12 In the Matter of Idaho Power Company's Application to Complete the Study Review Phase of the Comprehensive
Study of Costs and Benefits of On-Site Customer Generation&For Authority to Implement Changes to Schedules 6,
8, and 84,Case No.IPC-E-22-22,Order No.36048 at 11 (Dec.29,2023).
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("VER") study, which quantifies the costs of ancillary services necessary to support the addition
of 100 MW of utility-scale solar to the grid.
We have several concerns with applying this study to distributed on-site generation
resources. First, integration costs are a function of the overall system resource mix and the extent
to which existing generation resources can respond quickly and flexibly to variation in output
from resources like wind and solar. Idaho Power states that integration costs for solar have
increased primarily because of the increase in solar on Idaho Power's system. However, the
amount of battery storage on Idaho Power's system is also increasing substantially, including
160 MW of storage in Owyhee and Elmore counties13 and 200 MW of storage planned at the
Boise Bench substation.14 In markets such as California, the growth of significant battery
capacity has eliminated the need to calculate VER integration costs, and the California
Independent System Operator has integrated a very high penetration of both utility-scale and
rooftop solar, plus substantial wind resources, without an increase in its ancillary service costs as
a percent of its overall market costs. Battery storage is a flexible resource that can respond
quickly to provide ancillary services,which significantly reduces integration costs and the
addition of these resources should result in lower integration costs,not an increase. The 2024
VER study evaluates the cost of ancillary services needed to support the addition of 100 MW of
utility-scale solar resources in isolation. But the Company is adding new solar resources to its
grid concurrently alongside other new resource additions that are complementary to solar
generation. In addition to the 260 MW of energy storage that Idaho Power has already committed
"Idaho Power Company,Idaho's Largest Energy Storage Projects Under Construction;More Solar on the Way
(March 3,2023),available at https://www.idahopower.com/news/idahos-largest-energy-storage-projects-under-
construction-more-solar-on-the-way/.
is Idaho Power Company,Boise Bench Substation Battery Project, available at
https://www.idahopower.com/energy-environment/energy/energy-sources/battery-investments/boise-bench-
substation-battery-project/.
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to, the Company plans to add another 700 MW of additional battery storage to its grid in the next
five years which will further reduce integration costs.15
Second, the 2024 VIER study evaluates the ancillary service costs associated with the
addition of a 100 MW block of utility-scale solar, but Idaho Power does not anticipate adding
anywhere near this amount of new on-site generation resources to the grid in 2025. The
Company reports approximately 20 MW of new on-site generation resources were added in
2024,16 and forecasts the addition of less than 30 MW of new on-site generation annually in the
near term.17 In response to Sierra Club and Vote Solar Production Request 1.1, the Company
stated that this forecast assumes that the ECR value "is held at the . . . currently approved rates
and billing structure," so actual solar adoption in the coming year will certainly be even lower
than forecasted if the ECR value declines as Idaho Power proposes.18 Further, the generation
output and shape from a single large solar facility is not reflective of the generation output from
a fleet of many smaller on-site generation facilities. Homes and businesses with on-site solar use
a portion of their energy generation behind-the-meter before exporting the remainder to the grid.
It is inaccurate to use a utility-scale generation profile to approximate integration costs for on-
site solar energy resources rather than using the actual export profile as is done with other ECR
elements. Additionally, on-site solar resources are distributed geographically across many
15 Idaho Power 2025 Integrated Resource Plan Draft Preferred Portfolio Presentation(May 8,2025),available at
https://docs.idahopower.com/pdfs/AboutUs/PlanningForFuture/20251RP DraftPreferredPortfolio.pdf
"Idaho Power Company,2024 DER Annual Report(April 2025)at 9,Figure 2, available at
https://docs.idahopower.com/pdfs/AboutUs/EnergySources/solar/2024-DER-report-full-year.pdf
"Idaho Power Company,Our 20-Year Plan,2025 Meeting Schedule,Nov.14:Natural Gas and Energy and Demand
Forecasts,Energy Efficiency and Demand Response Modeling,Customer Generation Data, available at
https://www.idahopower.com/energy-environment/energy/planning-an l459d-electrical-projects/our-twenty-year-
plan/(see"Customer Generation Data"link). The 2026 Forecast data anticipates 41,665 MWh of new on-site
generation in 2026.Using an assumption of 1,459 kWh/kW/year for an installation in Boise(PVWatts),this equates
to 28.5 MW of nameplate capacity.Id.
"Idaho Power Company's Response to Sierra Club and Vote Solar's Production Request No. 1.1,attached as
Attachment 1.
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locations. It is not appropriate to base the integration costs for many small on-site generation
resources that export only a portion of their total generation on the ancillary service needs of a
single utility-scale project that is five times as large. The Commission should reject Idaho
Power's proposed integration cost, which inappropriately applies utility-scale solar metrics to
distributed solar installations and is not a reasonable proxy for the integration cost associated
with on-site generation. We recommend that Idaho Power update the integration study with a
scenario that accurately represents on-site generation exports and re-calculate the avoided energy
component of the ECR with the updated integration value.
iii. Avoided Generation Capacity
The ECR avoided generation capacity cost is calculated by multiplying the capital cost of
a proxy resource by the capacity contribution of on-site generation exports and distributing the
total value across the kilowatt-hours of on-site generation exports during on-peak hours. Our
recommendations are focused on the capacity contribution which is a measure of the capacity
provided by a generation resource during the hours when it is most needed, typically expressed
as a percentage of the resource's nameplate capacity. Idaho Power's Application proposes to use
an updated five-year trailing average of the Effective Load Carrying Capacity("ELCC"),
calculated using the Company's internally-developed Reliability and Capacity Assessment Tool.
The Company's Application proposes a modification to its ELCC calculations to correct an error
identified in the calculations for 2020, 2021, and 2022.19 As a result of this error, the ELCC
values (and the avoided generation costs) in the current effective ECR are lower than if they had
been calculated correctly. Idaho Power's proposed updated ELCC 5-year trailing average is
10.07%.20 We have significant concerns about the ELCC values Idaho Power proposes and the
i9 Ellsworth Direct Testimony at 19:6-16.
20 Ellsworth Direct Testimony at 21,Table 1.
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continued use of a methodology that cannot be reviewed or verified by stakeholders or
regulators.
a) On-site generation customers must be compensated for the historical ELCC error.
The error in ELCC calculations for 2020, 2021, and 2022 resulted in significant
underpayments to on-site generation customers. As shown in Figure 1, after the Company's
corrections the trailing average of ELCC values that should have been used in the initial ECR
equals 11.48%, compared to 10.12% approved in Order No. 36048.
Figure 1. Historical and Corrected ELCC Values (2020-2024)21
Year 2023 ECR 2023 ECR Idaho Power
IPC-E-23-14 Corrected 2025 Proposal
2020 7.50% 7.50% 7.50%
2021 14.90% 17.39% 17.39%
2022 7.95% 9.55% 9.55%
2023 -- -- 12.17%
2024 -- -- 3.73%
Average 10.12% 11.48% 10.07%
Use of the incorrect ELCC average resulted in an underpayment to customers with on-
site generation equal to 1.503 cents per kilowatt-hour during summer on-peak hours.22 Multiplied
by the total amount of on-site generation exported during on-peak summer hours, this equals a
total underpayment of$209,215 in 2024 or approximately$15 per customer(although the exact
amount varies depending on each customer's on-peak exports).21 On-site generation customers
must be compensated for this underpayment. We recommend that Idaho Power provide a one-
time bill credit to each on-site generation customer based on the amount of energy that customer
exported to the grid during summer on-peak hours from January 1, 2024 until the updated ECR
takes effect. The one-time bill credit should equal each customers' total on-peak exports during
21 SCNS Workpapers 1,Attached as Attachment 2.
22 Id.
23 Id.
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this period times 1.503 cents per kilowatt-hour.
b) Idaho Power's ELCC methodology contains errors and has not been verified by
PUC Staff or stakeholders.
The ELCC error highlights the pitfalls of relying on an internal utility calculation that
cannot be reviewed or verified by the Commission or stakeholders. Vote Solar cautioned against
use of the Company's proposed ELCC approach during the proceeding determining the ECR,
noting that"calculating an ELCC is computationally intensive because doing so requires a
substantial amount of data and a probabilistic modeling approach. This makes ELCC
calculations less transparent because the assumptions and calculations are challenging for
stakeholders to review. ,24 In fact, no party has been able to verify the Company's ELCC
calculations. As Staff described, because "the Company performs these calculations using
complicated MATLAB scripts, verification by Staff is extremely difficult."25 Nevertheless, Staff
noted several issues with Idaho Power's ELCC analysis at the time: the Company was excluding
the impact of system battery storage resources from the model; the Company manipulated on-site
generation customer export profiles to remove off-peak customer exports; and the ELCC model
does not have the resolution to account for small differences in exports such as the impact of
avoided line losses.26 Each of these issues will undercount the capacity contribution of on-site
generation.
The Company's proposed ELCC methodology continues to yield unexpected and volatile
results. The output from on-site solar generation follows predictable daily and seasonal patterns
24 In the Matter of Idaho Power Company's Application for Authority to Implement Changes to the Compensation
Structure Applicable to Customer On-Site Generation Under Schedules 6, 8, and 84 and to Establish an Export
Credit Rate Methodology,Case No. IPC-E-23-14,Vote Solar's Comments Regarding Changes to On-Site
Generator's Compensation Structure and Export Credit Rate at 20(Oct. 12,2023).
21 In the Matter of Idaho Power Company's Application for Authority to Implement Changes to the Compensation
Structure Applicable to Customer On-Site Generation Under Schedules 6, 8, and 84 and to Establish an Export
Credit Rate Methodology,Case No. IPC-E-23-14,Comments of the Commission Staff at 21 (Oct. 12 2023)
26 Id. at 14,21.
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 14

and is quite consistent from year to year, so it is surprising that Idaho Power's proposed
corrected ELCC values change erratically from year to year. Most notably, as shown in Figure 1,
Idaho Power reports a 3.73%ELCC for on-site generation in 2024, compared to 12.17% in 2023.
These erratic changes insert further volatility into the ECR, which, as already noted, harms
customers and imposes a level of risk on customers investing in rooftop solar that is not shared
by utility-scale developers or the utility itself. Without the ability to verify the utility's ELCC
calculations, stakeholders cannot know whether the low 2024 ELCC value is because of actual
changes to the capacity contribution value of on-site generation, one of the manipulations to the
calculations previously identified by Staff, or a different error.
It is also unclear whether Idaho Power has resolved the issue that intervenors identified in
the past, whereby the denominator of the ELCC percentage was the full capacity of distributed
solar resources (including the capacity that serves on-site loads), instead of the much lower
capacity that produces exports (and that is very difficult to model or even estimate).27 The result
of this issue is that the utility's calculated ELCCs may be many times too low if only a fraction
of distributed solar capacity is being used to produce exported power.
Removing exports that occur outside of the on-peak period from the ELCC inputs will
fail to capture instances when on-site generation contributes to meeting load and improving
reliability. As shown in Figure 2, many hours with a high risk of loss of load now occur during
winter mornings and mid-day, outside of summer on-peak hours (defined as 3PM to I IPM on
summer weekdays, excluding holidays).
27 In the Matter of Idaho Power Company's Application to Complete the Study Review Phase of the Comprehensive
Study of Costs and Benefits of On-Site Customer Generation &For Authority to Implement Changes to Schedules 6,
8, and 84,Case No.IPC-E-22-22,Idaho Conservation League's Initial Comments at 3 (Sept.20,2022)
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 15

Figure 2. Winter Hours of High,Medium, and Low Risk as Identified in the 2023
IRP.28
Winter Risk Hours(November 1—February 28129)
Hour End Sunday Monday Tuesday Wednesday Thursday Friday Saturday Holiday
1 WLR WLR WLR WLR 10 WLR WLR WLR IV WLR
2 WLR WLR WLR WLR WLR WLR WLR WLR
3 WLR WLR WLR WLR WLR WLR WLR WLR
4 WLR WLR WLR WLR WLR WLR WLR WLR
S WLR WLR WLR WLR WLR WLR WLR WLR
6 WLR WLR WLR WLR WLR WLR WLR WLR
7 WLR WHIR WHR WHR WHR WHR WHR WLR
8 WLR WHIR WHIR WHR WHR WHR WHR WLR
9 WLR WHIR WHIR WHR WHR WHR WHR WLR
10 WLR WHIR WHR WHR WHR WHR WHR WLR
11 WLR WMR WMR WMR WMR WMR WMR WLR
12 WLR WMR WMR WMR WMR WMR WMR WLR
13 WLR WLR WLR WLR WLR WLR WLR WLR
14 WLR WLR WLR WLR WLR WLR WLR WLR
15 WLR WLR WLR WLR WLR WLR WLR WLR
16 WLR WLR WLR WLR WLR WLR WLR WLR
17 WLR WMR WMR WMR WMR WMR WMR WLR
18 WLR WHIR WHR WHR WHR WHR WHR WLR
19 WLR WHIR WHR WHR WHR WHR WHR WLR
20 WLR WHIR WHR WHR WHR WHR WHR WLR
21 WLR WMR WMR WMR WMR WMR WMR WLR
22 WLR WLR WLR WLR WLR WLR WLR WLR
23 WLR WLR WLR WLR WLR WLR WLR WLR
24 WLR WLR WLR WLR WLR WLR WLR WLR
WLA—Winter Low-Risk
WMR—Winter Medium-Risk
WHR—Winter High-Risk
Although there are fewer medium- and high-risk hours in the winter compared to the
summer, the Company reported that 6.7% of loss of load expectation hours occur in November
and 7.4% occur in December, and that January and February are expected to have similarly high
risk in future years due to forecasted industrial customer load ramps.29 This means that up to 1-
in-3 hours of high risk may now be occurring in the winter months during morning and mid-day
hours when on-site solar generation is available and exporting power to the grid. Excluding
exports that occur during these time periods from the ELCC calculation undercounts the system
21 Idaho Power Company,2023 Integrated Resource Plan,Appendix C at 94,available at
https://docs.idahopower.com/pdfs/AboutUs/PlanningForFuture/irp/2023/2023-appendix-c-final.pdf[hereinafter
"2023 IRP"].
29 Id. at Appendix C,96.
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 16

value of capacity that on-site generation is providing during these important hours.
An ELCC value of 3.73% is also inconsistent with the ELCC values for solar reported in
the 2023 IRP. As shown in Figure 3, the ELCC for existing utility-scale solar resources is 51.3%
and the ELCC for future additions of solar is 27.7%. When paired with four hour battery storage,
the ELCC of solar increases to 61%to 85% for existing resources. Idaho Power has not proposed
ECR rates for customers with solar and batteries that reflect the much higher generation capacity
value of their systems.
Figure 3. ELCC of Existing and Future Resources from Idaho Power 2023 IRP.30
ELCC of Existing and Expected Resources ELCC of Future Resources
Resource Average Resource
Solar 51.3% Solar 27.7%
Wind 20.0% Wind(ID) 15.5%
Demand Response 34.0% Wind(WY) 20.8%
4-Hour Stand-Alone Battery Storage 81.2% 4-Hour Stand-Alone Battery Storage 38.5%
Solar+4-Hour Battery Storage(1:1) 85.1% 8-Hour Stand-Alone Battery Storage 79.2%
Solar+4-Hour Battery Storage(1:0.6) 61.2% Incremental Existing Demand Response 19.4%
Storage Demand Response 35.0%
Pricing Demand Response 32.2%
Although ELCC values for solar are expected to decline over time as more solar
resources are added to the grid, the ELCC analysis from the 2023 IRP demonstrates that solar
resources provide substantial capacity value to Idaho Power's system today. As discussed further
below, on-site solar generation has the potential to provide far greater value when paired with
battery storage. More information is needed to understand why Idaho Power's ELCC for on-site
generation is just a fraction of the ELCC it calculates for its own solar resources, and whether
Idaho Power is indeed excluding the impact of system battery storage resources from its analysis
30 2023 IRP at Appendix C,92.
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 17

of the hours of highest risk as identified by Staff during Case No. IPC-E-23-14.31
c) The Commission should approve a capacity contribution method that is transparent
and verifiable.
If subject matter experts are unable to verify Idaho Power's ELCC calculations and
methodologies, customers also cannot understand or trust the output of the calculations. Given
the substantial questions that we and other stakeholders have raised about the ELCC
methodology, we suggest that the Commission schedule a formal hearing to gather more
information and explore alternative options that reasonably balance accuracy with transparency.
As one option, Vote Solar previously recommended use of the capacity factor method.
The capacity factor method quantifies the actual contribution that on-site generation exports
provide to meet energy needs during high load hours. The capacity factor method been shown to
serve as a reasonable proxy for an ELCC32 and it is much simpler and more transparent.33 Use of
the capacity factor method would allow stakeholders to review and verify updates to the capacity
contribution calculation using a basic spreadsheet program, and it would also allow stakeholders
to propose changes to the calculation. As an alternative, the Commission could explore different
methodologies through a formal hearing where expert testimony could be submitted in order to
recommend solutions that balance accuracy with transparency and customer understandability.
"In the Matter of Idaho Power Company's Application for Authority to Implement Changes to the Compensation
Structure Applicable to Customer On-Site Generation Under Schedules 6, 8, and 84 and to Establish an Export
Credit Rate Methodology,Case No.IPC-E-23-14,Comments of the Commission Staff at 14(Oct. 12 2023)
32 National Renewable Energy Lab,A Comparison and Case Study of Capacity Credit Algorithms for Intermittent
Generators,(Mar. 1 1997),available at
https://www.researchgate.net/publication/238115630_A_comparison_and_case_study_of capacity_credit_algorithm
s for_intermittent—generators.
33 In the Matter of Idaho Power Company's Application for Authority to Implement Changes to the Compensation
Structure Applicable to Customer On-Site Generation Under Schedules 6, 8, and 84 and to Establish an Export
Credit Rate Methodology,Case No. IPC-E-23-14,Vote Solar's Comments Regarding Changes to On-Site
Generator's Compensation Structure and Export Credit Rate at 22-23.
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 18

iv. Avoided or Deferred Transmission and Distribution Costs.
Idaho Power's Application proposes an avoided distribution cost of 0.3899 cents per
kilowatt-hours during summer on-peak hours and no avoided transmission cost. The Company's
approach to valuing avoided transmission and distribution costs uses a short-term snapshot to
identify specific transmission and distribution projects that can be deferred by existing on-site
generation. Idaho Power's position is that a planned transmission or distribution project must be
deferred entirely by on-site generation before its value can be included in the ECR calculation.
This is not an appropriate way to quantify the marginal value that on-site generation exports
provide nor is it consistent with Idaho Power's treatment of other generation customers.
The impact of each on-site generation project is small when considered in isolation, but
collectively these resources help to reduce peak load which reduces the cost of building
infrastructure needed to serve the grid. This concept—that reductions in demand, even when they
are small, are valuable because they help to reduce or defer the need for additional distribution
and transmission infrastructure in the future—is well-established in other arenas of utility
ratemaking, such as the evaluation of energy efficiency programs. Idaho Power's proposed ECR
update does not appropriately quantify the avoided infrastructure costs associated with
reductions in load due to on-site generation exports, particularly avoided transmission costs. It is
inappropriate to assess the avoided transmission costs from on-site exports at $0 when on-site
generation resources demonstrably help to reduce peak load, which drives the need for new
transmission resources that increase costs for all ratepayers. Idaho Power has avoided or deferred
expensive investments in new or upgraded transmission because of lower than anticipated load
growth. For example, Idaho Power first identified a need for the 300-mile 500 kV Boardman-to-
Hemingway transmission line in the Company's 2006 IRP, which called for its completion in
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 19

2012.34 Idaho Power was able to defer construction of the Boardman to Hemingway project for
years because peak demand did not grow as quickly as expected. Energy from on-site generation
contributed to reducing peak demand and deferring the need for this and other substantial
infrastructure investments. The ECR should quantify the avoided transmission costs resulting
from on-site generation proportional to its contribution.
Not only is it inaccurate to represent that on-site generation provides no avoided
transmission value, but this all-or-nothing approach is also inconsistent with Idaho Power's
treatment of other third-party owned generation resources. Just as a third-party owned generation
resource that interconnects to Idaho Power's transmission system("Interconnection Customer")
must pay costs proportional to the capacity it requires, the ECR must credit on-site generation
with avoided costs proportional to the capacity they make available. Idaho Power does not allow
Interconnection Customers to connect to the transmission system for free as long as there is
capacity available on the transmission system, and when the transmission system is upgraded to
make additional capacity available, Idaho Power does not require the first new incremental
generation resource that interconnects to pay for the entire cost of the upgrade. Similarly, Idaho
Power should not assign zero avoided transmission costs to a distributed resource just because it
is small and does not provide all of the load reduction that might avoid or defer a transmission
project. Instead,just as Interconnection Customers pay for access proportional to the capacity
they need, the ECR must credit on-site generation customers with avoided transmission costs
proportional to the capacity they make available. It is not necessary to cause the cancellation of
an entire transmission project in order to provide value to Idaho Power and its ratepayers. When
"At the time,this project was named"McNary to Boise."Idaho Power Company's 2006 Integrated Resource Plan
at 5,available at
https://psc.ky.gov/pscscf/2007%20cases/200700477/oci%20workpapers%20ii/2006_irp%20idaho%20power.pdf.
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 20

peak load is reduced due to on-site generation it creates available capacity on the transmission
system that can instead be used by Idaho Power's own generation resources or sold to an
Interconnection Customer and used to meet new or growing load. Yet under Idaho Power's
proposed ECR, on-site generation customers receive no compensation for the avoided
transmission costs they provide.
We recommend that the Commission reject Idaho Power's proposed avoided
transmission cost value of$0 and direct the Company to quantify the marginal value of avoided
transmission costs due to on-site generation. We suggest several options. First, the Company
could use the National Economic Research Associates ("NERA")regression method, which has
long been used by utilities to calculate marginal transmission and distribution capacity costs for
ratemaking purposes.35 A second option is to use the avoided on-peak transmission and
distribution capacity costs for energy efficiency that are provided in Idaho Power's 2023 IRP.
Like energy efficiency, the power produced locally by on-site generation reduces the total load
that Idaho Power must serve and the amount of power that must be transmitted long distances
across its transmission and distribution system. Idaho Power's IRP quantifies the value of
transmission, substation, and distribution projects that can be deferred for each kilowatt of
reduction in load, which is $8.33 per kW-year.36 This results in an avoided transmission and
distribution cost of 6.4 cents per on-peak kilowatt-hour.37 Last, the Commission could approve
use of Idaho Power's current Open Access Transmission Tariff("OATT") rate. FERC Order No.
ss For more information about this method,see In the Matter of Idaho Power Company's Application to Complete
the Study Review Phase of the Comprehensive Study of Costs and Benefits of On-Site Customer Generation &For
Authority to Implement Changes to Schedules 6, 8, and 84,Case No.IPC-E-22-22,Idaho Conservation League's
Initial Comments at 7(Sept.20,2022);Id.,Independent Review of the Idaho Power Company's VODER Study at 7.
In 2022 the avoided transmission cost for on-site generation was$18.50/MWh and the avoided distribution cost was
$31.30/MWh.
36 2023 IRP at 72.
37 SC/VS Workpapers 2,Attached as Attachment 3.
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 21

888 requires utilities to provide open access to transmission service on a comparable basis to the
transmission service they provide themselves and to file the OATT rate outlining the terms of
that service. Idaho Power's published OATT rate is $31.55/kW-year,38 which results in an
avoided transmission cost of 2.57 cents per kWh during the on-peak period (if using Idaho
Power's proposed ELCC value, which we address separately).39 We recommend the Commission
reject Idaho Power's proposed $0 avoided transmission value and direct Idaho Power to
accurately account for quantifiable avoided transmission costs attributable to on-site generation
using one of the methodologies described herein. Alternatively,we suggest the PUC consider
additional data and evidence as part of a formal hearing to support resolution of this issue.
B) A Virtual Power Plant Program Will Provide Much Needed Capacity in a Cost-
Effective Manner.
It is becoming increasingly common for customers who install on-site generation to pair
solar panels with a distributed battery. Customers are typically motivated to install a battery to
save money on their energy bills or increase their home or businesses' resiliency during a power
outage, but distributed batteries can also be used to provide much needed fast and flexible
capacity to the grid. Utilities are increasingly developing"Virtual Power Plant" ("VPP")
programs that leverage fleets of customer-sited distributed batteries to dispatch energy and
capacity during times when it is most needed at a lower cost than utility-scale battery storage.
Idaho Power is facing unprecedented increases in demand in the coming years. The Company
anticipates 8% average annual load growth over the next five years, and a 5% annual increase to
the system peak.40 A VPP program is a cost-effective solution to help meet a portion of growing
38 Idaho Power Company's 2024 Annual FERC Form 1 Report,"Federal Regulatory Matters-Open Access
Transmission Tariff Rates,"available at https:Hedocs.puc.state.or.us/efdocs/HAQ/re78hag336165026.pdf
"SCNS Workpapers 2.This calculation is provided using Idaho Power's proposed ELCC of 10.07%.We
recommend the avoided transmission cost value be calculated using the final approved ELCC value.
ao Idaho Power 2025 IRP Energy and Demand Forecast Update,March 13 2025 available at:
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 22

energy needs if the Company makes this option available to its customers now.
VPP programs have become commonplace and are now offered by utilities across more
than a dozen states, including here in Idaho through Rocky Mountain Power. A VPP allows the
utility to coordinate dispatch of customer-sited batteries to provide capacity during times when it
is most needed and most valuable, such as the system peak or during times of regional grid
constraints. VPP programs help reduce costs and improve reliability for all customers because
the utility can identify specific events when capacity is most needed and dispatch capacity from
the VPP instead of purchasing power at higher market rates. A VPP program is also less
expensive and less risky for ratepayers than the cost of utility-scale battery storage. When a
utility invests in battery storage,ratepayers are charged for the capital costs of the project
through rates even if it is only needed during a limited number of hours each year. In contrast,
the capital costs of a VPP are paid for by individual customers who choose to purchase batteries
and participate in the program, and in exchange a participating customer receives a capacity
payment to compensate them for the value of the energy and capacity they provide to the grid
during periods of high demand. This rate structure ensures that a VPP is a"win-win" solution for
utilities and all of their customers. Non-participating customers benefit from reduced exposure to
high and volatile prices during times of peak demand, and since the capacity payment is based on
the actual dispatch of a customer battery to the grid, the utility only pays for the capacity that is
actually used to serve load.
As noted above, a VPP program is already available to Idaho residents who are Rocky
Mountain Power("RMP") customers. RMP's WattSmart battery program provides residential
customers with an upfront payment and an ongoing capacity-based payment that equals an
https://docs.idahopower.com/pdfs/AboutUs/PlanningForFuture/IRPAC_DemandForecastUpdate_Mar l 1pdf.
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 23

average payment of$111 per kW over four years.41 As another example, several utilities in
Arizona have recently launched VPP programs including the APS "Bring Your Own Device"
program which aims to enroll 5,000 customers and offers a capacity payment of$110/kW and
the Tucson Electric Power"Energy Storage Rewards"program which provides a capacity
payment of$120/kW in the summer and winter seasons.42 Idaho Power identifies a need for over
700 MW of 4-hour battery storage resources in the next five years,43 at an estimated cost of$204
per kW-year.44 A VPP can help meet a portion of the utility's future and evolving energy needs
in a manner that is affordable, reliable, flexible, and highly scalable. As long as the capacity
payment is equal to or less than the utility's cost of capital, operations, and maintenance for a
comparable utility-scale battery resource, ratepayers will be indifferent or benefit from cost
savings. The strong customer engagement in this proceeding demonstrates that Idaho Power's
customers are eager to engage in demand-side programs and help be a part of the solution. We
recommend that the Commission direct Idaho Power to propose a Virtual Power Plant program
that allows the utility to dispatch aggregated customer batteries, including a capacity payment
that is equal to the utility's cost for battery storage.
C) The Commission Should Approve Idaho Power's Request to Consolidate its
Annual Distributed Energy Resources Status Report with the Annual ECR
Update.
Idaho Power's Application proposes to consolidate its compliance reporting requirements
from the ECR update and the annual Distributed Energy Resources ("DER") Status Report. The
Company states that the DER Status Report,which is the primary source of information about
" Rocky Mountain Power,WattSmart Energy Program, available at https://www.rockymountainpower.net/savings-
energy-choices/wattsmart-battery-program.html.
as Tucson Electric Power,Energy Storage Rewards, available at https://www.tep.com/energy-storage-rewards.
a3 Idaho Power 2025 Integrated Resource Plan Draft Preferred Portfolio Presentation(May 8,2025), available at
https://docs.idahopower.com/pdfs/AboutUs/PlanningForFuture/2025IRP_DraftPreferredPortfolio.pdf
as 2023 IRP at Appendix C,25.
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 24

the number of on-site generation customers and the amount of on-site generation capacity, is
currently filed in a closed docket that may not be obvious to customers and stakeholders. The
Company proposes to file future DER status reports coincident with ECR updates on April 1. We
agree with the Company's proposal. The DER Status Report is an important source of
information that helps the Commission evaluate how changes to the ECR are impacting the
adoption of on-site generation, and it is beneficial for the Commission and stakeholders to
review both of these filings in tandem. We also suggest that the Company make current and past
DER status reports available on its website so that they are easy for stakeholders and customers
to find. Finally, we note that the DER status report previously filed in Docket No. IPC-E-12-27
(dated April 2024) and the DER status report filed with Idaho Power's Application(dated April
2025) are both titled"2024 Distributed Energy Resources Annual Report."We suggest
correcting the title of the April 2025 report filed with the Company's Application to clarify that it
is the 2025 DER Annual Report.
IV. RELIEF REQUESTED
If Idaho Power's Application is approved without changes, Idaho Power customers will
be compensated for exported energy at a rate that is far below the actual value of energy they
provide to the grid, and they will have a lessened ability to realize a fair value for exports from
their installation of on-site generation. The financial value of an investment in on-site solar
generation will be depressed, resulting in fewer solar installations and a corresponding reduction
in jobs and economic benefits associated with the distributed solar industry in the state. Finally,
if the value of the ECR does not fairly capture the value of energy exported to the grid, the
market for distributed energy resources in Idaho will remain nascent and the benefits of
distributed energy resources to all ratepayers—including economic benefits, improved flexibility
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 25

and resiliency, and environmental,health, and social benefits—will not be realized.
As noted above, Sierra Club and Vote Solar recommend that the Commission take the
following actions:
1) Direct Idaho Power to use a 3-year rolling average of market prices to determine the
avoided energy component of the ECR, as proposed in Idaho Power's final VODER
study, and update its current ECR proposal accordingly;
2) Direct Idaho Power to compensate net billing customers for the historical errors in Idaho
Power's ECR calculations through an on-bill credit;
3) Approve a capacity contribution calculation that is transparent and reviewable by
stakeholders and regulators, such as the capacity factor method, and direct Idaho Power
to update its current ECR proposal accordingly;
4) Reject Idaho Power's proposed integration costs, which inappropriately apply utility-
scale solar metrics to distributed solar installations and neglect the significant impact that
batteries have to reduce integration costs, and direct the Company to re-calculate
integration costs using an export profile appropriate for on-site generation;
5) Reject Idaho Power's proposed$0 avoided transmission value and direct Idaho Power to
accurately account for quantifiable avoided transmission costs attributable to on-site
generation and update its ECR proposal accordingly; and
6) Direct Idaho Power to propose a"Virtual Power Plant"program including a capacity
payment that is equal to the utility's cost for battery storage.
V. REQUEST FOR A FORMAL HEARING
Should the Commission decline to adopt our ECR recommendations following opening
and reply comments,we respectfully suggest that the Commission hold a formal hearing to
resolve disputed issues, including the ELCC, avoided energy costs, avoided transmission costs,
and integration costs, as is contemplated in the Commission's April 21, 2025 Order. A formal
hearing is appropriate and, indeed, necessary for at least two reasons.
First, the procedural schedule did not provide sufficient time for discovery. Between
April 21, 2025, when the Commission issued its order setting the comment deadline, and May
15, 2025, the deadline for opening comments, there were only 24 calendar days. Parties before
the Commission are allotted 21 days to respond to discovery requests, and discovery typically
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 26

can only be submitted by an individual or organization once they have achieved party status.
Given the time constraints presented by the May 15, 2025 comment deadline, there simply was
not sufficient time for parties to intervene, be granted intervention status, submit discovery to
Idaho Power, and receive responses before the comment deadline.
Nevertheless, Sierra Club, Vote Solar, and individual intervenor Kevin Dickey submitted
discovery requests to Idaho Power and requested expedited responses before the opening
comment deadline. To the best of Sierra Club and Vote Solar's knowledge, Mr. Dickey did not
receive a response in the short timeframe between when discovery was able to be sent and the
deadline for opening comments, and Sierra Club and Vote Solar received a response on May 14,
as was requested by our organizations. We appreciate Idaho Power's efforts to respond to our
discovery requests prior to the deadline for filing opening comments; yet, a single day to review
discovery responses is not sufficient. Additional time is needed to analyze Idaho Power's
responses and determine whether additional discovery is needed. If additional discovery is
needed, there will not be enough time to send and receive discovery before reply comments are
due. Accordingly, additional time in the procedural schedule to conduct discovery is necessary to
fully vet Idaho Power's proposal to drastically cut the ECR. As demonstrated by these
comments, Sierra Club and Vote Solar dispute several inputs used to calculate the ECR but are
unable to verify Idaho Power's assumptions without further opportunity for discovery.
Second, a formal hearing is necessary in order for Staff and intervening parties to submit
expert testimony as well as to cross examine Idaho Power's witnesses. As explained above, there
are a variety of problems with Idaho Power's ECR calculation and a number of potential
solutions or alternative approaches. Order No. 36558 suspended the Company's proposed ECR
effective date of June 1, 2025 for 30 days and five months, out of concern that"the Company's
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 27

proposed effective date may not provide adequate time for Staff, and interested persons, to
evaluate the Company's proposal.i45 We agree. The limited opportunity to submit comment in
this proceeding does not provide Staff or intervening parties with the ability to fully present
alternative calculations that would be useful to the Commission's review. Should the
Commission hold a formal hearing, Sierra Club and Vote Solar intend to fully participate in the
hearing, including by presenting expert testimony and cross-examining Idaho Power's witnesses.
The Commission should hold a formal hearing this coming fall, which would allow intervening
parties to submit expert testimony and for Idaho Power to submit reply testimony, while still
allowing for a Commission decision before December 1, 2025, the latest date when the new ECR
is scheduled to take effect.
Respectfully submitted,
DATED: May 15, 2025.
Rose Monahan(pro hac vice)
Attorney for Sierra Club and Vote Solar
15 Order No.36558 at 4.
SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE FIRST ANNUAL
ECR UPDATE - 28

Attachment 1
Idaho Power Company's Response to Sierra Club and Vote Solar's Production Request No. 1.1

REQUEST FOR PRODUCTION NO. 1-1: Please provide any forecasts created
by or for Idaho Power of future annual on-site generation export credit rates. This includes
forecasted export credit rates from 2026-2045 that were used in the company's 2025 IRP
process, which the company noted using to create the on-site generation forecast (a
component of the overall load forecast).
RESPONSE TO REQUEST FOR PRODUCTION NO. 1-1: Idaho Power, or parties
on Idaho Power's behalf, does not forecast the export credit rate ("ECR") level. Any
inclusion of the ECR within Idaho Power's solar penetration forecast, which was
developed in Q3 2024, is held at the then currently approved rates and billing structure.
It is important to note that the solar penetration portion of the load forecast does not
predict non-firm energy exports, rather, the net impact of a site's overall usage. Any
changes to the assumed ECR may impact customer cost analysis that drives adoption;
however, impact from variation of the ECR may be muted. As the customer penetration
forecast does not rely on non-firm forecasted exports, other classes such as commercial,
industrial, and irrigation are solely based on historic rate of change adoption and not
reliant on billing structure or ECRs.
The response to this Request is sponsored by Jordan Prassinos, Load Forecast
Manager and Principal Economist, Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST SET OF PRODUCTION REQUESTS OF
SIERRA CLUB AND VOTE SOLAR- 2

Attachment 2 is an Excel spreadsheet and is being provided as a separate attachment.

Attachment 3 is an Excel spreadsheet and is being provided as a separate attachment.

CERTIFICATE OF SERVICE
I hereby certify that on this 15th day of May 2025, I delivered true and correct copies of
the foregoing SIERRA CLUB AND VOTE SOLAR'S COMMENTS REGARDING THE
FIRST UPDATE TO IDAHO POWER'S EXPORT CREDIT RATE to the following persons
via the method of service indicated below:
Electronic mail only(see Order 35375)
Idaho Public Utilities Commission
Monica Barrios-Sanchez, Secretary
[e-mail]
Erika K. Melanson
[e-mail]
Idaho Power Company
Megan Goicoechea Allen
Donovan Walker
[e-mail]
[e-mail]
dockets a,idahopower.com
Individual Intervenor
Kevin Dickey
[e-mail]
Clean Energy Opportunities for Idaho ("CEO')
Kelsey Jae
[e-mail]
Individual Intervenor
Martha Bibb
[e-mail]
Individual Intervenor
Scott Pinizzotto
[e-mail]
Idahome Energy
Tyler Grange
[e-mail]

City of Boise
Jessica Harrison
Katie O'Neil
[e-mail]
[e-mail]
[e-mail]
Rose Monahan(pro hac vice)
Attorney for Sierra Club and Vote Solar