20171101IPC to Idaho Clean Energy 1-7.pdf

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November 1,2017
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re Case No. IPC-E-17-13
New Schedules for Residential and Small General Service Customers with
On-Site Generation - ldaho Power Company's Response to the ldaho Clean
Energy Association's First Request for Production to ldaho Power Company
Dear Ms. Hanian
Enclosed for filing are an original and three (3) copies of ldaho Power Company's
Response to the ldaho Clean Energy Association's First Request for Production to ldaho
Power Company in the above matter.
If you have any questions about the enclosed documents, please do not hesitate to
contact me.
Very truly yours,
RECEIVEO
201? HOY - | Pl{ lrr 25
iDAFiO PUtsLIC:JTILIT S COIJMISSIONLISA D. NORDSTROM
Lead Counsel
[e-mail]
LDN:kkt
Enclosures
@
An IDACORP Companv
P.O. 8ox 70 l83707l
1221 W. ldaho St.
Boise, lD 83702
0.fl^**.t "1Lisa D. Nordstrom
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I nord strom@ id ahopower. com
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
RECEIVED
?01? HOY - | Ptt h: 26
, j ",,,1,1m0,*y#rhi8r,o*
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. IPC-E-17-13
IDAHO POWER COMPANY'S
RESPONSE TO IDAHO CLEAN
ENERGY ASSOCIATION'S FIRST
REQUEST FOR PRODUCTION
TO IDAHO POWER COMPANY
COMES NOW, ldaho Power Company ("ldaho Power" or "Comp?oy"), and in
response to ldaho Clean Energy Association's ("|CEA") First Request for Production to
ldaho Power dated October 11,2017, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 1
REQUEST NO. 1: Disti nguish the difference to ldaho Power of all factors
including cost, between the customer who reduces use of electricity delivered from the
grid by conservation measures and the customer who reduces use of electricity from the
grid by producing some or all, but not a surplus, of its electricity on site.
RESPONSE TO REQUEST NO. 1: The Company does not have any residential
or small general service customers with on-site generation who have not, at some time,
produced a surplus of electricity. Therefore, the following discussion is hypothetical.
Customers with on-site generation use the grid differently than customers who
only receive one-way service from the utility. Customers with on-site generation utilize
all aspects of ldaho Power's grid, including the generation, transmission, and
distribution systems.
Customers who reduce electricity use through energy efficiency or conservation
measures generally reduce their overall demand; that is, they can reduce overall
customer use at all hours across the year. For example, an energy efficient refrigerator
will use less energy than a standard refrigerator at all hours of the day. An energy
efficient clothes washer will use less energy than a standard clothes washer when in
use which can happen at any hour of any day. When valuing energy efficiency, load
shapes are applied using end-use load shapes which are applied based on the
likelihood of that energy efficient measure being used during a given time. The load
shapes that ldaho Power uses are based on regional and national third-party research.
Whereas customers who reduce their use of electricity from the grid by producing some
or all of their electricity on-site only produce energy at certain times of the day or year
based on their type of generation. For example, solar generation can only produce
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 2
electricity during daylight hours, typically peaking in the afternoons during the summer
months. Wind generation can produce energy at any hour but is unpredictable and
typically has a low capacity rating when the weather is very hot or very cold. Some
small hydro systems generate electricity during all hours of the year, and some are
seasonal depending on stream flows.
The response to this Request is sponsored by Connie Aschenbrenner, Rate
Design Manager Regulatory Affairs, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 3
REQUEST NO. 2: What are the "potential benefits of on-site generation" to
which the Application refers on page 1
RESPONSE TO REQUEST NO. 2:The Company has asked that the ldaho
Public Utilities Commission commence a generic docket at the conclusion of this case
to establish a compensation structure for customer-owned distributed energy resources
("DER") that reflects both the benefits and costs that DER interconnection brings to the
electric system.
The response to this Request is sponsored by Tim Tatum, Vice President of
Regulatory Affairs, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 4
REQUEST NO. 3: Page 1 of the Application provides "bi-directional service is
being provided [net metering] customers nearly every hour of every day." Please define
"bi-directional service" as used in this sentence.
RESPONSE TO REQUEST NO. 3: Bi-directional service refers to the service
provided to a customer when the power flows in both directions. When the customer's
generation is not enough to satisfy the customer's own demand, the grid will provide
power to the load. When the generation is greater than the consumption, the grid will
absorb any excess power from the customer.
The response to this Request is sponsored by Dave M. Angell, Transmission and
Distribution Planning Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 5
REQUEST NO.4: At page 13 of Angell's Direct, he opines upon an example in
which the meter reading of a net metering customer does not reflect the total amount of
energy consumed by a household because the outgoing electricity reduces the meter
reading, and concludes, "[t]his demonstrates how the net monthly energy as a basis for
billing does not reflect a net metering customer's utilization of the grid."
a. How does electricity produced and consumed on-site utilize the grid?
b. Does the volumetric price of energy delivered from the grid to the site
accurately reflect the proportionate share of cost of using the grid for the delivery of that
electricity to the site?
i. lf not, please explain why.
RESPONSE TO REQUEST NO. 4:
a. Net metering customers require grid provided voltage for a grid-tied
inverter to convert direct current to alternating current electricity in synchronism with the
grid. The grid voltage is supplied by generators located throughout the grid and
transmitted through the transmission and distribution systems. The net metering
customers export energy only when their generation exceeds their load. This export
condition may not align with the local or ldaho Power's system load. Thus, the grid
operators must accommodate the extra energy by adjusting the dispatch of Idaho
Power's generation. Net metering customers utilize the entire grid from the generation,
substations, and transmission lines.
Additionally, a customer with on-site generation utilizes the grid for inverter
operation, motor starting, and energy balancing. lnverter operation use is described in
Mr. Angell's Testimony on page 8 beginning with line 19. The motor starting use
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 6
immediately follows on page 9. The grid will automatically and instantaneously supply
any load that is not supplied by the customer's self-generation. The customer's load
cycles on and off throughout the day and within a given hour. These energy imbalances
between self-generation and customer's load will be absorbed by the grid.
b. The volumetric energy rate includes costs associated with all components
of the electrical system, from investment in generation resources to the meters installed
on customers' premises. Consequently, energy rates for residential and small general
service ("R&SGS") customers reflect not only the energy-related components of the
revenue requirement, but fixed costs associated with generation, transmission, and
distribution as well. Existing retail rate designs currently applicable to R&SGS net
metering customers were structured to collect the costs associated with the grid under
the assumption that customers would only need one-way services provided solely by
the utility. While this pricing structure does not perfectly align costs incurred with prices
paid for each individual customer, overall this rate structure is better aligned with service
provided to R&SGS customers who receive one-way services from ldaho Power.
The response to this Request is sponsored by Dave Angell, Transmission and
Distribution Planning Manager, and Connie Aschenbrenner, Rate Design Manager,
ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 7
REQUEST NO. 5: At page 27 of Angell's Direct, he opines that, "[i]t is the DER
[Distributed Energy Resource] that creates the voltage deviation - it is also the DER
that can cost -effectively mitigate the deviation through the installation of a smart
inverter."
a. Does ldaho Power anticipate the conclusion of the balloting described on
page 26 of Angell's Direct will alter the cost estimates of invertors provided alpage 24?
i. lf so, what is the anticipated magnitude of the change of estimate?
b. Does this mitigation eliminate the need for ldaho Power to perform full
conductor replacement as described on page 23 of Angell's Direc?
c. lf not, what further measures would be required?
RESPONSE TO REQUEST NO. 5:
a. Yes.
i. ln the Global PV lnverter and MLPE Landscape H1 2017 Prices -
Forecasts, Market Shares and Vendor Profiles report, Green Tech Media
forecasts the price of the single-phase inverter to be approximately
$0.23Mac by the year 2019. This is the current price for a standard
inverter.
b. As discussed in Mr. Angell's testimony, the installation of a smart inverter
can cost-effectively mitigate the voltage deviation caused by the DER. However, there
may be instances where a conductor replacement is required in conjunction with the
use of a smart inverter to mitigate voltage issues caused by the DER.
c. Required mitigation solutions, such as conductor replacement, are studied
on a case by case basis to determine the most cost-effective solution.
The response to this Request is sponsored by Dave Angell, Transmission and
Distribution Planning Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 8
REQUEST NO. 6: At page 6 of Tatum Direct, the witness opines, "[i]ncentivizing
net metering through rate design is no longer needed and results in inappropriate cost
shifting."
a. How is net metering incentivized today?
b. Why is this "inappropriate?"
c. How is it "unfair" as described at page 1 of the Application?
RESPONSE TO EOUEST NO. 6
a. Net metering is incentivized by compensating customers with on-site
generation for the electricity they generate at the retail price of electricity, rather than at
the cost of the energy produced. Because the retail rate includes costs associated with
all components of ldaho Power's electrical system, from investment in generation
resources to the meters installed on customers' premises, the Company assumes this is
greater than the value of the energy produced.
b. Compensating customers with on-site generation for the electricity they
generate at the retail price of electricity is inappropriate because the retail rate reflects
not only energy-related costs but also costs associated with the transmission and
distribution system; services not provided by, or avoided because of, customer on-site
generation.
c. Net Metering is unfair because it results in a cost shift from customers with
on-site generation to those customers who do not have, do not want, or in some cases
cannot afford on-site generation.
The response to this Request is sponsored by Tim Tatum, Vice President of
Regulatory Affairs, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 9
REQUEST NO.7: Tatum Direct at page 13 describes the cost shift between
lines 1 and 25 as failure of net metering customers to pay some fixed cost, creating a
"potential inequity."
a. What is the nature of the certainty of uncertainty of that potential?
b. What is the magnitude of such inequity?
c. Should net metering customers pay more than the current fixed cost
portion of the volumetric rate for set for fixed costs for electricity taken from the grid?
d. The fixed costs described by Tatum Direct include costs associated with
investment by ldaho Power in generation. Should net metering customers pay a portion
of fixed cost ldaho Power's shareholder's investment in generation for electricity
produced on site and delivered to the gird? lf so, why?
RESPONSE TO REQUEST NO. 7:
a. ln its response, ldaho Power assumes that the question was intended to
be written as "What is the nature of the certainty or uncertainty of that potential?"
The Company has demonstrated the certainty of the inequity. Please see the
Company's response to Vote Solar's Request No. 17 for the estimated cost shift
occurring in years 2015 and 2016.
b. Please see Attachment 3 to the Company's response to Vote Solar's
Request No. 34 for the magnitude of the inequity.
c. ldaho Power believes that customers with on-site generation should pay
an amount representative of the cost to serve them including both energy and the grid
related costs.
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 1O
d. While it is unclear what is being asked, ldaho Power believes that
customers with on-site generation should pay an amount representative of the cost to
serve them including both energy and the grid-related costs.
The response to this Request is sponsored by Tim Tatum, Vice President of
Regulatory Affairs, ldaho Power Company.
DATED at Boise, ldaho, this 1" day of November 2017.
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 11
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 1't day of November 2017 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN
ENERGY ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO
POWER COMPANY upon the following named parties by the method indicated below,
and addressed to the following:
Commission Staff _Hand Delivered
Sean Costello _U.S. Mail
Deputy Attorney General _Overnight Mail
ldaho Public Utilities Commission _FAX
4T2WestWashington (83702) X Email [e-mail]
P.O. Box 83720
Boise, ldaho 83720-007 4
ldahydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite 900
P.O. Box 2900
Boise, ldaho 83701
ldaho Conseruation League
Matthew A. Nykiel
ldaho Conservation League
102 South Euclid #207
P.O. Box 2308
Sandpoint, ldaho 83864
Benjamin J. Otto
ldaho Conservation League
710 N. 6th st.
Boise, ldaho 83702
ldaho lrrigation Pumpers Association, lnc.
Eric L. Olsen
ECHO HAWK & OLSEN, PLLC
505 Pershing Avenue, Suite 100
P.O. Box 6119
Pocatello, ldaho 83205
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
eri n. ceci l@arkoosh. com
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email mnvkiel@idahoconservation orq
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY. 12
Anthony Yankel
12700 Lake Avenue, Unit 2505
Lakewood, Ohio 44107
Auric Solar, LLC
Preston N. Carter
Deborah E. Nelson
GIVENS PURSLEY LLP
601 W. Bannock Street
Boise, ldaho 83702
Elias Bishop
Auric Solar, LLC
2310 S. 1300 W.
West Valley City, Utah 84119
Vote Solar
David Bender
Earthjustice
3916 Nakoma Road
Madison, Wisconsin 537 11
Briana Kobor
Vote Solar
360 22nd Street, Suite 730
Oakland, California 94612
City of Boise
Abigail R. Germaine
Deputy City Attorney
Boise City Attorney's Office
150 N. Capito! Blvd.
P.O. Box 500
Boise, ldaho 83701-0500
Idaho Clean Energy Association
C. Tom Arkoosh
ARKOOSH LAW OFFICES
P.O. Box 2900
Boise, ldaho 83701
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
den@q ivenspu rsley. com
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAX
X Email [e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
erin. cecil@arkoosh. com
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 13
David H. Arkoosh
Law Office of David Arkoosh
P.O. Box 2900
Boise, ldaho 83701
Sierra Glub
Kelsey Jae Nunez
KELSEY JAE NUNEZLLC
920 North Clover Drive
Boise, ldaho 83703
Zack Waterman
Director, ldaho Sierra Club
503 West Franklin Street
Boise, ldaho 83702
Michael Heckler
3606 North Prospect Way
Garden City, ldaho 83714
Snake River Alliance
NW Energy Coalition
John R. Hammond, Jr.
FISHER PUSCH LLP
101 South Capitol Boulevard, Suite 701
Boise, ldaho 83702
lntermountain Wind and Solar, LLC
Ryan B. Frazier
Brian W. Burnett
KIRTON McCONKIE
50 East South Temple, Suite 400
P.O. Box 45120
Salt Lake City, Utah 84111
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email zack.waterma .org
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
wwi lso n @sn a ke rive ra I I ia n ce orq
[e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
[e-mail]
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 14
Doug Shipley
Dale Crawford
lntermountain Wind and Solar, LLC
1952 West2425 South
Woods Cross, Utah 84087
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
dale@imwindandsolar com
*ebco
Ki Towell,Assistant
IDAHO POWER COMPANY'S RESPONSE TO IDAHO CLEAN ENERGY
ASSOCIATION'S FIRST REQUEST FOR PRODUCTION TO IDAHO POWER COMPANY - 15