HomeMy WebLinkAbout20130117IPC to Staff 1-8.pdfIDAHO PNER®
1- -. An IDACORP Company
2013 JAN 17 PM t:53
LISA D. NORDSTROM ILJAHL
Lead Counsel UTLLIflES GMMSOi
Inordstrom(ãidahopower.com
January 17, 2013
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-12-27
Net Metering Service - Idaho Power Company's Response to the First
Production Request of the Commission Staff
Dear Ms. Jewell:
Enclosed for filing in the above matter are an original and three (3) copies of Idaho
Power Company's Response to the First Production Request of the Commission Staff
("Staff') to Idaho Power Company.
In addition, enclosed are four (4) copies of a non-confidential disk containing data
responsive to Staff's requests.
Very truly yours,
. LPfro
Lisa D. Nordstrom
LDN:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
xr-r
LISA D. NORDSTROM (ISB No. 5733)
JULIA A. HILTON (ISB No. 7740)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: (208) 388-5825
Facsimile: (208) 388-6936
Inordstromidahopower.com
jhiItonidahopower.com
Attorneys for Idaho Power Company
ZCI "If JAH 17 PM I:53
rtL T-r Lnu.- :
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORITY TO MODIFY ITS NET
METERING SERVICE AND TO
INCREASE THE GENERATION
CAPACITY LIMIT.
CASE NO. IPC-E-12-27
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO
POWER COMPANY
COMES NOW, Idaho Power Company ("Idaho Power" or "Company"), and in
response to the First Production Request of the Commission Staff to Idaho Power
Company dated December 27, 2012, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -1
REQUEST NO. 1: On pages 18-19 of Matt Larkin's testimony, he says "utilizing
the results of the Company's most current class cost-of-service study that was reviewed
in Case No. IPC-E-11-08, Schedule 6 and Schedule 8 reflect three primary
modifications to the collection of revenue requirement from Residential and Small
General Service net metering customers." Please provide the cost-of-service study
used to develop the proposed modifications. As part of your response, please explain
how the results of this study were specifically used to design rates.
RESPONSE TO REQUEST NO. 1: The Excel files AS Model - ST/P /PC-E-1 1-
08.x!s ("AS Model") and FC Model - STIP /PC-E-1 1-08.xls ("FC Model") provided on the
enclosed CD represent the class cost-of-service study reflecting the stipulated results of
the Company's last general rate filing, Case No. IPC-E-11-08. The entire study is
summarized on the "Unit Cost by Schedule" worksheet of the FC Model, which was
utilized to design the Company's proposed rates. The "Unit Cost by Schedule"
worksheet contains the Company's overall revenue requirement by customer class,
subdivided into the various operating functions (production, transmission, distribution)
and classifications (demand-related, energy-related, customer-related).
The utilization of the class cost-of-service study to design the Company's
proposed rates is demonstrated in the Excel file Net Meter Rate Deve!opment.xlsx, also
provided on the enclosed CD. The first worksheet in this file, "IPC-E-1 1-08," contains a
summary of the functionalized classified revenue requirement from the class cost-of-
service study contained in the "Unit Cost by Schedule" worksheet of the FC Model.
Column I of the "IPC-E-1 1-08" worksheet indicates the corresponding row numbers
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -2
from the detailed "Unit Cost by Schedule" worksheet that were summed to arrive at the
revenue requirement amounts listed in column 2 of the "IPC-E-1 1-08" worksheet.
Columns 3 and 4 of the "IPC-E-1 1-08" worksheet adjust the cost-of-service
results to reflect the final approved revenue requirement by rate class from the Idaho
Public Utilities Commission's Final Order No. 32426 in Case No. IPC-E-11-08. Because
the settlement stipulation in Case No. IPC-E-1 1-08 resulted in a uniform percentage
increase to all rate classes, final approved revenue requirement amounts did not sum to
the class cost-of-service totals contained in the FC Model. Therefore, to properly
calculate rates in a manner consistent with the Company's approved revenue
requirement, columns 3 and 4 uniformly adjust the functionalized classified components
of the cost-of-service revenue requirement to reflect the final approved revenue
requirement that was ultimately used to set rates. Through this calculation, the
Company was able to determine the level of customer-related and demand-related
revenue requirement associated with the distribution system that is embedded in energy
rates currently in effect.
The "Rate Design" worksheet in the Net Meter Rate Development.xlsx Excel file
calculates the Company's proposed Schedule 6 and Schedule 8 rates based on the
values contained in column 4 of the "IPC-E-11-08" worksheet. Column I of this
worksheet reflects billing units used to set the Company's currently-approved base rates
established in Case No. IPC-E-12-14. Column 2 contains current residential and small
general service rates, while column 3 calculates the Company's currently approved
revenue requirement by applying current rates to the billing units contained in column 1.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -3
Column 4 details the adjustments made to the current revenue requirement to
calculate rates for the proposed Schedules 6 and 8 by shifting customer-related and
demand-related revenue requirement associated with the distribution system from the
per kilowatt-hour ("kWh") energy charges into the proposed service charge and basic
load capacity ("BLC") charge, respectively. As detailed in column 4, revenue
requirement associated with the Service Charge and Basic Load Capacity charge was
adjusted upward, while revenue requirement associated with the per kWh energy
charges was adjusted downward, resulting in (1) a service charge that reflects the full
customer-related cost-of-service, (2) a BLC charge that reflects the full demand-related
cost-of-service associated with the distribution system, and (3) energy charges that
reflect the remaining components of revenue requirement. As detailed on lines 17 and
38 of column 4, this adjustment resulted in zero net impact to the overall revenue
requirement associated with each rate class.
Column 5 contains the final revenue requirement reflecting the adjustments
described above, while column 6 contains the Company's final proposed rates.
The response to this Request was prepared by Matthew T. Larkin, Regulatory
Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -4
REQUEST NO. 2: On page 20 of Matt Larkin's testimony, he says the "proposed
schedules simply modify the charges through which the Company collects its currently
authorized revenue requirement without modifying the level of revenue collection."
Please provide the rate design workpapers used to confirm the currently authorized
revenue requirement will be collected if the proposed rates are approved.
RESPONSE TO REQUEST NO. 2: Please see Attachment 3 (Net Meter Rate
Development.xlsx) provided with the Company's response to Staffs Request for
Production No. 1. As demonstrated in the "Rate Design" worksheet, the total revenue
requirement from the Company's proposal is equivalent to the revenue requirement
approved in the Company's most current base rate filing, Case No. IPC-E-12-14.
The response to this Request was prepared by Matthew T. Larkin, Regulatory
Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -5
REQUEST NO. 3: On page 17 of Mall Larkin's testimony, he says the "majority
of the Company's revenue requirement associated with Residential Service and Small
General Service is collected through volumetric energy rates." For both Residential
Service and Small General Service, please provide the percentage of revenue
requirement collected through the volumetric energy rates.
RESPONSE TO REQUEST NO. 3: Please see Attachment 3 (Net Meter Rate
Development.xlsx) provided with the Company's response to Staff's Request for
Production No. 1. Column 3 of the "Rate Design" worksheet contains the Company's
currently approved revenue requirement. Using the figures from this column, the table
below indicates the proportion of currently approved revenue requirement collected
through volumetric energy rates:
Revenue Requirement
from
"Rate Design"
Worksheet
Proportion of Total
by Class
Residential
Energy Charge Revenue $385,511,114 94.13%
Total Revenue $409,546,656
Small General
Energy Charge Revenue $13,764,710 89.05%
Total Revenue $15,456,689
The response to this Request was prepared by Matthew T. Larkin, Regulatory
Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -6
REQUEST NO. 4: On page 25 of Matt Larkin's testimony, when discussing
Schedules 9, 19, and 24, he says the "majority of fixed cost recovery is excluded from
the energy rates." For these schedules, please provide the percentage of revenue
requirement collected through the volumetric energy rates.
RESPONSE TO REQUEST NO. 4: The table below indicates the proportion of
revenue requirement collected through volumetric energy rates for Schedule 9, 19, and
24 customers. Figures in the below table reflect approved rates from the Company's
most current base rate filing, Case No. IPC-E-12-14.
Revenue Requirement
from
IPC-E-1 2-14
Proportion of
Total by Class
Schedule 9
Energy Charge Revenue $159,793,451 77.09%
Total Revenue $207,268,561
Schedule 19
Energy Charge Revenue $62,847,512 69.84%
Total Revenue $89,986,561
Schedule 24
Energy Charge Revenue $87,351,489 75.65%
Total Revenue $115,468,947
The response to this Request was prepared by Matthew T. Larkin, Regulatory
Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -7 I
REQUEST NO. 5: The Company proposes that the credits from Excess Energy
expire annually at the conclusion of a customer's December billing period. For the last
two years, please provide 12 separate scenarios showing the amount of excess energy
customers would have forfeited if the annual credits expired at the conclusion of each
month's billing period. For all scenarios, please categorize the results by month, class
and generation type.
RESPONSE TO REQUEST NO. 5: The table in the Excel file provided on the
enclosed CD contains an estimation of excess energy that would have been forfeited
under each of the requested scenarios utilizing historical billing data for the time period
December 2010 through November 2012. It should be noted that this information
reflects actual billing data for net metering customers actively taking service during the
given historical time period. For some customers, data does not reflect usage over all
months, as several customers either began net metering service or ended net metering
service within the historical time period. For a description of the Schedule 84 rate class
designations included in this table, please see the Company's response to Staffs
Request for Production No. 8.
The response to this Request was prepared by Matthew T. Larkin, Regulatory
Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -8
REQUEST NO. 6: On page 22 of Matt Larkin's testimony, he says by "leaving
the collection of demand-related generation and transmission costs in the volumetric
energy rate, the Company's proposal recognizes that these systems potentially provide
benefits at the generation and transmission level by reducing loads on these
components of the Company's system at certain times." Please provide a schedule
explaining in more detail all net metering transmission related benefits and the
associated cost savings.
RESPONSE TO REQUEST NO. 6: The Company is not in possession of a
schedule that quantifies transmission-related cost savings specific to net metering
systems, as the Company's net metering rate design proposal for residential and small
general service customers is based on an embedded cost-of-service study and does not
include an avoided cost component. The above-referenced statement from Mr. Larkin's
testimony acknowledges that net metering systems—the majority of which are solar
photovoltaic—can produce electricity during hours when demand on the Company's
electrical system is at its highest. Recognizing that peak-hour demands drive the
Company's need for transmission capacity, the Company's proposed volumetric energy
charges subject to the "net" aspect of a net metering arrangement contain a
transmission-related component. Total transmission-related revenue requirement used
as the basis for the Company's rate design proposal can be found for residential and
small general service customers in column 4, lines 18 and 25, of the "IPC-E-1 1-08"
worksheet contained in Attachment 3 (Net Meter Rate Development.x!sx) provided with
the Company's response to Staffs Request for Production No. 1.
The response to this Request was prepared by Matthew T. Larkin, Regulatory
Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -9
REQUEST NO. 7: On page 23 of Matt Larkin's testimony, when discussing the
Company's consideration of offering a two-meter option for Schedule 6 and Schedule 8,
he says the "Company determined that this option is not feasible for net metering
customers, as the need for a second meter can be problematic in application and would
increase the cost associated with net metering service." Please explain how a second
meter can be problematic in application, and provide an estimate of the increased cost
associated with adding a second meter.
RESPONSE TO REQUEST NO. 7: Net metering is a functional description of a
kWh meter that has the ability to add to the accumulative register reading for power
delivered and subtract from the register reading for power received. Net metering is a
simple method to allow customers to offset their energy consumption by installing self-
generation without the need for modifying their service or adding equipment.
The addition of a second meter results in a number of incremental costs which
can vary broadly based on each customer's specific circumstances. In addition to the
cost of the meter itself, the use of two meters requires a second service connection to
Idaho Power's electrical system, including an additional customer-installed and
customer-owned meter base, an additional main circuit breaker, and wiring from the
new circuit breaker to the generation source. Costs associated with the second service
connection are directly dependent on the configuration and location of the existing
electrical service and the physical location of the customer's generation facility. In light
of the variability of these costs, the table below provides a range of estimated
incremental expenses associated with adding a second meter. As noted in this table,
these costs can vary greatly depending on the characteristics of each unique service
connection.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -10
TABLE 1: INCREMENTAL COST ESTIMATE
Incremental Component Description Cost Estimate
Second Service Connection Installation may include: service $300-$1,500
wire, junction box, connecters,
conduit, weather head, and
installation labor. Actual
materials and work required
could vary widely based on a
number of factors, including the
presence of overhead service or
underground service, and the
physical location of the service
and generation source.
Additional Meter Base Meter base, service entrance, $150-$500
and labor. This cost is also
dependent on location.
Additional Main Breaker Breaker panel and labor. $100-$200
Wiring to Generation Source Wire and installation labor. Will $04100
vary based on physical location.
Additional Bi-Directional Meter Commercial bi-directional meter $245
required to measure generation.
Service Establishment Charge Cost to connect service to Idaho $25
Power's system. ___________________________
In addition to the cost of materials and labor, adding a second electrical service
and meter base to a residence can lead to compliance issues with the National
Electrical Code ("NEC"). Generally speaking, each building is allowed one electrical
service. Locating two separate services on a structure complicates compliance with the
NEC, and may result in increased expenses for the property owner to modify his or her
service to gain compliance. A second service connection can also create safety issues
related to potential cross connections between the two services-'
The use of a two-meter system also complicates the data collection and billing
process. A true net metering rate applies a per kWh charge to net kWh usage at a
customer's site. Alternatively, the use of a two-meter system to calculate the net
1 Idaho Power defers to the Idaho Division of Building Safety on NEC compliance and safety
issues related to dual electrical meters. Statements made in regard to NEC compliance are based on the
Company's opinion and informal discussions with staff of the Idaho Division of Building Safety.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -11
difference between delivered and received energy is not a simple net meter application
as it requires additional data calculation outside the meter. Rather than utilizing the
current billing system to apply a single rate to a single value, a two-meter configuration
requires the billing system to subtract generation from consumption. If different rates
are applied to generation and consumption, it introduces an additional element of
complexity, as it would require dollar amounts to be calculated for each meter and then
applied against each other in the billing system. Additionally, from the customer's
perspective, this customization of the billing process would render the Company's
Energy Use Advisory Tool useless, as it does not have the capability to display
delivered and received hourly data for one customer with two meters.
The response to this Request was prepared by Mark Heintzelman, Regional
Operations Support Leader, Idaho Power Company, at the direction of Matthew T.
Larkin, Regulatory Analyst II, Idaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -12
REQUEST NO. 8: Please provide the following for each Idaho customer
currently taking Net Metering Service:
• Rate Class
• Effective Date
• City
• Generation Type
• Total Watts
RESPONSE TO REQUEST NO. 8: Please see the Excel file provided on the
enclosed CD. This data includes customers actively taking net metering service as of
December 31, 2012. Schedule 84 rate codes listed in the "Current Rate" column
correspond to the following rate classes:
Schedule 84 Rate Code Rate Class
184R Residential
184C Small General
184CS Large General
I841R Irrigation
The response to this Request was prepared by Matthew T. Larkin, Regulatory
Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
DATED at Boise, Idaho, this 17thi day of January 2013.
LISA D. NORDSROM
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -13
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 17th day of January 2013 I served a true and
correct copy of the within and foregoing IDAHO POWER COMPANY'S RESPONSE TO
THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO
POWER COMPANY upon the following named parties by the method indicated below,
and addressed to the following:
Commission Staff
Karl T. Klein
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North Sixth Street
Boise, Idaho 83702
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email Karl. Klein(äpuc.idaho.qov
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email bottocidahoconservation.orq
Christa Bearry, Legal Assistant
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -14