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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