20180322Technical Hearing Transcript Vol III.pdf

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ORIGINAL CSB REPORTING
C e rtifrc d S h o rt h an d Rep o rt e rc
Post Offrce Box9774
Boise,Idatro 83707
c sbreportin g@heritagewifi . com
Ph: 208-890-5198 Fan: 1-888-623-6899
Reporter:
Constance Bucy,
CSR
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF TDAHO POWER COMPANY FOR
AUTHORITY TO ESTABLISH NEW
SCHEDULES FOR RESIDENTIAI AND
ST'{ALL GENERAL SERVICE CUSTOMERS
I/tlIfH ON-SITE GENERATION
)
)
)
)
)
)
)
CASE NO. IPC.E-17-1-3
COMMISSIONER KRISTINE RAPER (Presiding)
COMMISSIONER PAUL K.JELLANDER
COMMTSSTONER ERIC ANDERSON
PLACE:Commission Hearing Room
472 West $lashington StreetBoise, Idaho
DATE:March 8, 20tB
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VOLUME III Pages 160 335
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BEFORE
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CSB REPORTING
Wil-der, Idaho 83616
APPEARANCES
For the Staff:Sean Costello
Deputy Attorney General
472 West Washington
PO Box 83120
Boise, Idaho 83720-0074
For Idaho Power Company:Lisa D. Nordstrom
Idaho Power Company
l22L West Idaho Street
PO Box 70Boise, Idaho 83707-0070
For Idaho Irrigation
Pumpers Associat j-on:Joseph T. Preston
Echo Hawk & Ol-sen PLLC
505 Pershing Avenue, Ste.
PO Box 6719Pocatello, Idaho 83205
100
For Idaho Conservation
League:
l.latthew A. Nykie1
Idaho Conservation League
102 South Euc]id #207
PO Box 2308
Sandpoi-nt, Idaho 838 64
For Auric LLC and Idaho
Clean Energy Association:
Preston N. Carter
Gj-vens Purlsey LLC
601 Vflest Bannock Street
PO Box 2720
Boise, Idaho 8370L-2120
Eor City of Boise:Abigail R. Genaaine
Deputy City Attorney
Boise City Attorneyrs Office
105 North Capitol Bl-vd.
PO Box 500
Boise, Idaho 83701-0500
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APPEARANCES
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CSB REPORTING
Wilder, Idaho 83616
A P P E A R A N C E S (Continued)
For Snake River Alliance
and NVI Energy Coalition:ilohn R. EamondEisher Pusch LLP
101 South Capitol B1vd.Suite 701
PO Box 1308
Boj-se, Idaho 83701-
For Sierra Club:Ke1sey Jae Nunez LLC
Si-erra Club
920 North Clover DriveBoise, Idaho 83703
Eor Vote Solar:David Bender
Earthj ustice
3916 Nakoma Road
Madison, Wisconsin 53711
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APPEARANCES
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CSB REPORTING(208) 890-s198
INDEX
WITNESS EXAM]NATION BY PAGE
Timothy E. Tatum
(Idaho Power)
Ms. Nordstrom (Direct)
Prefiled Direct Testimony
Prefj-led Rebuttal TestimonyPrefiled Surrebuttal Test.
Ms. Germaine (Cross)
Mr. Carter (Cross)
Mr. Hammond (Cross)
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243
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254
310
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INDEX
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CSB REPORTING(208) 890-s198
EXH]B]TS
NUMBER DESCR]PTION PAGE
EOR IDAHO POWER COMPANY:
1 Solar Panel Technology PremarkedAdmitted 173
2 Elon Musk says Tesla will begin
selling solar roof tiles
PremarkedAdmitted 173
3 Solar Industry Data, SEIA Premarked
Admitted 173
4 Auric Solar moves from Boise tolarger Meridian space
Rethinking Rat.ionale for Net
Metering
PremarkedAdmitted L73
5 PremarkedAdmitted 113
6 Net Meter Applicati-on PremarkedAdmitted 173
7 Eorm letter from Idaho Power
Net Metering Team
Premarked
Admitted 173
B Net Metering, What you Needto Know
PremarkedAdmi-tted \7 3
FOR TDAHO CLEAN ENERGY ASSOCATION & AURIC SOLAR:
810 Order from the Public Utility
Commj-ssion of Oregon,
September lf, 20L1
Marked 305
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EXH]BITS
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CSB REPORTING(208) 890-s198
BOISE, IDAHO, THURSDAY, MARCH B, 2418, 9:30 A. M.
COMMISSIONER RAPER: Good morning. It
almost feels like church. This is the time and place set
for a technical hearing in the Case IPC-E-17-13, further
identified as in the matter of the application of fdaho
Power Company for authority to establ-ish new schedules
for residential and smalI general service customers with
on-site mics whengeneration. Use your
thanks. I'm Kri-stine
you're going to
wil-I Chair thespeak,
hearing today.
Kjellander. He
the stand, and
We comprise the
Raper. I
To my l-eft is Commissioner
will be swearing you in as
to my right is Commissioner
Paul
you come up to
Eric Anderson.
Commission and we wil-1 u1timately render
a final decision in this matter.
A couple of housekeeping things. We have
bathrooms down the hal-l, all the way at the end. If
there's not water on the table, there's water behind
Brandon and Matt over there, and if you are on a computer
and you want wireless, wifi access, I think the thing
says, "PUC guest" and then the password is "pucwireless"
a1I lower case, and as another housekeeping matter, I
think we have more parties than we have mics, so to the
extent you can allow lawyers forward and your witnesseso25
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CSB REPORTING
(208 ) 890-s198
behind you and then if we need to share, then I know that
you're al-l good sharers, so we can do that.
We anticipate a multi-day hearing, so if
there's no objection, we'11 break for lunch as cl-ose to
noon as possible, depending on where we're at with
wj-tnesses, and then we'11 break as need be. We have
Connie Bucy
fast, she'11
as our court reporter today, so if you talk
needs a break,slow down and when Connieyou
her are magic.
this morning by taking
so we can begin with the
we break, because hands
We'l-1 begin
appearances of
Applicant.
the parties,
MS. NORDSTROM: Good morning. Lisa
Nordstrom for Idaho Power.
COMMISSIONER RAPER: Thank you, Lisa.
MR. COSTELLO: Good morning, Sean Costel-l-o
for Commission Staff.
COMMISSIONER RAPER: Thanks, Sean.
MR. BENDER: Good morning, David Bender,
Earthjustice, for Vote Sol-ar.
COMMISSIONER RAPER: Thank you. We'11 go
back to ICL.
MR. NYKIEL: Good morning, Matt Nykiel for
the Idaho Conservation League.
COMMISSIONER RAPER: Thank you.25
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MR. CARTER: Good mornj-ng. Preston Carter
for the Idaho Clean Energy Association and Aurj-c Solar.
COMMfSSIONER RAPER: Thank you.
MR. HAMMOND: Good morning. John Hammond
for the Snake Rlver Alliance and NW Energy Coalition.
MS. GERMAINE: Good morning. Abigail
Germaine representing the City of Boise.
MR. PRESTON: Good morning. Joe Preston
representing the Irrigation Pumpers Association,
Incorporated.
COMMISSIONER RAPER: Thank you.
MS. NUNEZ: Good morning. Kelsey Nunez
with the Sierra Cl-ub.
COMMISSIONER RAPER: Thanks. Anyone else
in the room? Do we have anyone representing Idahydro?
Intermountain Wind and Solar? Okay, preliminary matters
to come before the Commission. I know that there's a
filing which we can address. We can address that first
or we can address order of the parties. Anyone have
any -- I wasn't provided any informatj-on in advance that
there was a preference. Normally we woul-d do Applicant,
intervenors, Staff. I would suggest direct and rebuttal
through, a11ow surrebuttal- for the Applicant at the
end.
MS. NORDSTROM: I think the resol-ution of
CSB REPORTING(208) 890-s1_98
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CSB REPORTING
(208 ) 890-s198
the motion will determine Idaho Power's position on the
latter.
COMMISSIONER RAPER: Okay. Well, then,
1et's address the motion. So letrs see, March 6th, two
days dgo, a Notice of Motion for Leave to Present Reply
Testimony of Rick Gilliam Responding to the Rebuttal-
Testimony of Idaho Power Company was filed by
Earthjustj-ce represented by David Bender. Mr. Bender,
would you l-ike to address the filing?
MR. BENDER: Sure, Chaj-rwoman. After a
noticer w€ had -- after recej-ving the rebuttal testimony
from the Company undertook discovery, whJ-ch, when it got
to us 21 days later, did some processing of it, real-ized
that there was some other information we'd like the
Commission to look at that was raj-sed by the Company's
rebutta1 testimony. I thought that the easiest way to do
it would be to prefile it so everyone saw it,
anticipating that we would seek your leave to present
that during this hearing, and the j-ntent of the filing
was just to get that in everyone's hands ahead of time so
they could see it.
Al-so, maybe in the interest of
much of the same discussion is going to happen
format rather
efficiency,
in the
thanhearing, but putting it
cross-examinat j-on maybe less time-consuming, and it also
in thist25
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CSB REPORT]NG
(208 ) 890-5198
puts it in some graph or picture format, which, at least
for me, is easier to understand sometimes than the
narrative description.
Ultimate1y, the data underlying the couple
of charts in here and the testj-mony is already in all the
parties' hands. It was produced in discovery. I think
multipJ-e parties rel-ied on it. This is just processing
it in another way, putting it in a different format
vi-sua1lyr so it's nothing the data themsel-ves are not
new to the parties and we thought it may be helpfuJ- to
the Commission, so we're offering it. Obviously, it's up
to you all whether you find it helpful or not to allow
in.
To us, it crystallizes kind of, I think,
where this case has focused through the multiple rounds
of testimony, to looking at l-oad factors, and whether net
metered customers look like other customers matters
mostly on whether or not you include their exports as
part of their l-oad or that you look at that as a separate
flow of el-ectricity and just look at the servj-ce they're
taking from the utiJ-ity, and that's ultimately what these
tables do as weIl.
COMMISSIONER RAPER: Okay, and yesterday
fdaho Power filed an objection to the motion.
Ms. Nordstrom.25
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CSB REPORTING(208) 890-s198
arguments
testimony
that was
MS.
opposing
are laid
NORDSTROM: Yes, Idaho Power's
and objecting to this late*fil-ed
out in the answer
comply with the
yesterday. The l-ate
scheduling order.The Company believes
issues coul-d haveit could have been addressed, those
been addressed, in both Vote Solar's direct and rebuttal.
We be1ieve the filing is prejudicial. We received it
l-ess than two days before hearing. We did not receive
workpapers until 3:30 yesterday afternoon.
Our witnesses have not had an opportunity
late in the
the objection
filing does notfiled
ir
the workpapers,
seems l-ike the
to l-ook at
game and
presented
so this is
information is being
very
that
could be dealt with on cross-examination and
that is the proper place for it rather than in the reply
rebuttal as it is fil-ed with the Commission, so we
continue to object.
COMMISSIONER RAPER: Okayr we received no
other fi11ngs, except for the motion and the objection.
Are there any questi-ons or comments from the
Commissioners?
COMMISSIONER KJELLANDER: Just one, it's
to the applicant for the motion. Essentially you said
you think you can get at the same information through
cross-examination?25
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CSB REPORTING
(208 ) 890-s198
MR. BENDER: I think we can get at some of
the information, but I canrt put j-t into, 1ike, a
demonstrative exhibit, like a graph.
COMMISSIONER KJELLANDER: I can fj-gure it
out. Okay, thanks.
COMMISSIONER RAPER: So my question to you
is the material within this late filj-ng was all material
that could have been produced prior to two days before
the hearing, yes?
MR. BENDER: The data were avaj-lable prior
to that, Your Honor -- wel-l-, thatrs not true. Some of
the data were available prior to that, because the data
sets we had to use had been previously provided, but that
we had to use those because we asked for the workpapers
that were in support of the Company's rebuttal testimony.
The workpapers were the ones
were hard pasted, which meant
that we needed, many of them
the underlying data, the
and counsel- and I had aload data, were
back-and-forth
not available
and when we realized we didn't have access
to those data that the Company used for its rebuttal
testimony, we had to re-create it with data that we did
have available, so we did not know that we needed to take
that step until- after rebuttal was in, we asked in
discovery for the workpapers. The Company took the 2L
ful-1 days to get those to us; mail-ed us the data on ao25
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disk, which arrived several days after that.
Once we were able to l-ook at it, asked if
further data were forthcoming, were told no, that's when
we set out to try to recreate it as best we could with
data previously produced, and that takes us to the
weekend, this last weekend, which is why this is
that's why the timing of this is what it is.
COMMISSIONER RAPER: I am incl-ined to not
allow it in for a multi-tude of reasons. One is I hold in
my hand the Order that Ms. Nordstrom referred to, the
Notice of Schedule, Order No. 33901, which sets out a
schedule that all parties agreed to. All parties did not
have an additional opportuniLy to make an additional
filing following the surrebuttal of the Company, so
whether they agree with you or disagree with you, all-
parties were prejudiced by your additional filing,
because they haven't had an opportunity to respond, so I
am going to deny the motion for leave to present the
reply testimony of Rick Gilliam that responds to the
rebuttal testimony of Idaho Power.
To the extent that you can get to that in
cross-examination of the witnesses, more power to you. I
think that thatrs the appropriate way to make it fair to
a1I parties to address the issue as they come.
MR. BENDER: Thank you.
CSB REPORTTNG
(208 ) 890-5198
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CSB REPORTING(208) 890-sr_98
MR. HAMMOND: Commission Chairwoman, I
just want to make clear that for our purposes, I know the
decj-sion has been made, but we don't find that therers
any prejudice either way. We think developi-ng a ful-1
record is the most j-mportant thj-ng, so our client is not
concerned about that; just wanted to have that on the
record.
COMMISSIONER RAPER: I appreciate your
position, Mr. Hammond, and my ruling stands. If you had
wanted to put a position in, f would have expected to
receive a position from parties either direction at l-east
by yesterday close of business. Okay, movj-ng on.
MR. PRESTON: If we're moving on, may f
raise another procedural matter at this time?
COMMISSIONER RAPER: Absol-uteIy.
MR. PRESTON: Thank you. Our witness,
Mr. Anthony Yankel-, is on some travel restraints and we
wou1d request that we make sure that we get his testimony
in today. He has to leave here no later than 4:00
o'clock to make a fliqht and requests, depending on where
werre going with the testimony with the Company, that we
work him in maybe shortly after l-unch or between a break
between witnesses.
COMMISSIONER RAPER: Okay,thank you.
Mr. Yankel andAre there any objections to the request of25
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CSB REPORTING
(208 ) 890-s198
I would anticipate after Idaho Power's witnesses? So,
then, is there any objection to the procedural matter
that I described initially, which is as witnesses come
up, both dj-rect and rebuttal, and then al-low the Company
to present its surrebuttal witnesses at the end of the
hearing, at the concl-usion of the hearing?
MR. CARTER: Madam Chair, I have one
clarification on that. The surrebuttal-testimony that
include in our
that surrebuttal
to
NormaIIy, Do, because
record, but the
on the stand. fs it
has been prefiled, would we be able
initial cross-examination references
testimony; is that correct?
COMMISSIONER RAPER:
j-t wouldn't have been spread on the
witness for surrebuttal- will be back
to
overcomplicated to avoid surrebuttal?
MR. CARTER: I guess my question re1ates
to trying to weave all of the -- present questions on al-l-
of the witness's testimony in one shot as opposed to
trying to segment into the initial questioning and then
surrebuttal. I guess I woul-d submit that for my
cross-examinatj-on, which wou1d attempt to identify the
relevant the issues that the Company is contending are
relevant and i-rrelevant, it would be helpful to have all
three, be abl-e to present questions on all three, rounds
of testimony to kind of ldentify how the issues have25
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CSB REPORTING
(208 ) 890-s198
narrowed down as the testimony has progressed.
COMMISSIONER RAPER: Ms. Nordstrom?
MS. NORDSTROM: We recognize that there is
some administrative efficj-ency in presenting all of the
Company's testimony simultaneously instead of the
traditional sequential manner; however, we would like to
retain the opportunity to re-call witnesses to address
j-ssues j-t would have had the opportunity to respond to
otherwise, so if that is amenable to the parties, w€
could do that.
MR. CARTER: That takes care of my
problem.
COMMISSIONER RAPER: Okay, so as the
Company's witnesses come on the stand, we wil-I spread on
the record direct, rebuttal, and surrebuttal. To the
extent that surrebuttal arguments can be l-eft to that
great. To the extent that they'reportion, that
integrated in
address that
would be
your
when
MS. NORDSTROM:
of questioning, then we can
takes the stand.
So if the witness needs to
other l-ine
the witness
be re-cal-led, we'11- do that, but only if necessary.
COMMISSIONER RAPER: Okay, we'11- Ieave it
open at the end for Company witnesses to be re-called.
MR. CARTER: Thank you.
COMMISSIONER RAPER: Absolutely. Are25
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CSB REPORTING
(208 ) 890-s198
TATUM (Di)
Idaho Power Company
there any other prellminary procedural issues that need
to be addressed?
The Company may
NORDSTROM:
call its first witness.
MS.Thank you.
witness.
Idaho Power
calls Tim Tatum as its first
TIMOTHY E. TATUM,
produced as a witness at the instance of the Idaho Power
Company, having been first duly sworn to tel-I the truth,
was examined and testified as follows:
DIRECT EXAMTNATION
BY MS. NORDSTROM:
o
A
o
Good morning.
Good morning.
Pl-ease state your name and spell your last
name for the record.
A
o
Timothy Tatum. Last name T-a-t-u-m.
By whom are you employed and in what
capacity?
A I am the vice president of regulatory
affairs for Idaho Power.
O Are you the same Tim Tatum that filed
direct testimony on JuIy 27th, 201,1, and prepared Exhibito25
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CSB REPORT]NG(208) 890-s198
TATUM (Di)
Idaho Power Company
Nos. 1 through 8?
A Iam
O Are
rebuttal testimony ,
exhiblts?
A Yes.
O Are
you the same Tim Tatum that filed
on January 26Lh, 2018, and prepared no
you the same Tim Tatum that fifed
surrebuttal testimony
exhibits?
Yes.
on February 23rd, 20L8, with no
additional-
A
O Do you have
your prefiled testimony or
A I do not.
O If I were to
any changes or corrections to
exhibits?
ask you the same questi-ons
same to thosetoday, would your answers be the
questions?
A Yes, they woul-d.
MS. NORDSTROM: I
cross-examination.
tender this witness for
COMMISSIONER RAPER: Without objection, we
will spread Mr.Tatum's direct,
if read.
rebuttal, and surrebuttal
on the record as
Ms. Nordstrom, would you like the exhi-bj-ts
admitted?
MS. NORDSTROM: Yes.25
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COMMISSIONER RAPER: For expediency, Mr.
Tatum, will you run down the list of your exhibits
throughout your testimony and we will admit those into
the record?
THE WITNESS: Sure; so Madam Chair, how
would you Iike me to describe the exhibits? Just by
number?
COMMISSIONER,RAPER: Yes.
THE WITNESS: Okay; so Exhibits No. 1,
through 8 for direct is aII I have.
COMMISSIONER RAPER: Okay. Exhibits 1
through 8 will be admitted into the record
THE WITNESS: Okay.
(Idaho Power Company Exhibit Nos. 1 - I
were admitted into evidence. )
(The following prefiled direct, rebuttal,
and surrebuttal testimonies of Mr. Timothy Tatum are
spread upon the record. )
TATUM (Di)
Idaho Power Company
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CSB REPORTING
(208 ) 890-s198
TATUM, DI 1
Idaho Power Company
O. Please state
present posj-tion wj-th
or "Company").
A. My name is
address is l22L West
am employed by Idaho
your name, business address, and
Idaho Power Company ("Idaho Power"
Timothy E. Tatum. My business
Idaho Street, Bo j-se, Idaho 83102 .
Power as the Vice President of
Business
of Business
I
Regulatory Affairs in the
O. Pl-ease describe
Regulatory Affairs Department.
your educational background.
AdministrationA. I earned a Bachel-or of
degree in Economics and a Master
Administration degree from Boise State University. I
have also attended el-ectrj-c utility ratemaking courses,
incJ-uding "Practical Skil-l-s for The Changing Electrical
Industry, " a course offered through New Mexico State
University's Center for Public Utili-ties, "Introduction
to Rate Design and Cost of Service Concepts and
Techniques" presented by Electric Utilities Consultants,
Inc., and Edison Electric Instituters "El-ectric Rates
Advanced Course." In 20L2, I attended the Utility
Executj-ve Course (UEC) at the University of Idaho, and
subsequently became a member of the UEC faculty in 2015.
O. Pl-ease describe your work experience with Idaho
Power.
A. I began my employment with Idaho Power in 1-996
in the Company's Customer Service Center where I handled25
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customer phone calls and other customer-related
transactions. In 1999, I began working in the Customer
Account Management Center where I was responsible for
customer account maintenance in the areas of billing and
metering.
In June of 2003, T began working as an Economic
Analyst on the Energy Efficiency Team. As an Economic
Analyst, I was responsible for ensuring that the
demand-side management ("DSM") expenses were accounted
for properly, preparing and reporting DSM program costs
and activities to management and various external-
stakeholders, conducting cost-benefit analyses of DSM
programs, and providing DSM anal-ysis support for the
Company's Integrated Resource Pl-an.
In August of 2004, I accepted a position as a
Regulatory Analyst in the Regulatory Affairs Department.
As a Regulatory Analyst, I provided support for the
Company's various regulatory activities, including tariff
administration, regulatory ratemaking and compliance
filings, and the development of various pricing
strategies and policies.
In August of 2006, I was promoted to Senj-or
Regulatory Analyst. As a Senior Regulatory Analyst, my
responsibilities expanded to include the deveJ-opment of
complex financiaf studies to determine revenue recovery
and
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pricing strategies, including the preparation of the
Company's cost-of-service studies.
In September of 2008, T was promoted to Manager
of Cost of Service and, in April of 2077, T was promoted
to Senior Manager of Cost of Service and oversaw the
Company's cost-of-service activities, such as power
supply modeling, jurj-sdictional separation studies, class
cost-of-service studies, and marginal cost studies. In
March 20L6, I was promoted to Vice President of
Regulatory Affairs. As Vice President of Regulatory
Affairs, I am responsible for the overal-l- coordination
and direction of the Regulatory Affairs Department,
including development of jurisdictional- revenue
requirements and class cost-of-service studies,
preparation of rate design analyses, and administration
of tariffs and customer contracts.
O. What is the scope of this docket?
A. With this case, the Company intends to i-nform
the Idaho Public Utilities Commission ("Commissj-on") that
its net metering service offerj-ng has matured to a point
where certain aspects of the service offering warrant
review and modification. In light of the information
Idaho Power wil-l present in this case, the Company wil-l-
request that the Commission initiate certain near-term
steps to transition from current net metering practices
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to an eventual pricing and compensation structure for
customers
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Idaho Power Company
with on-slte generation that is both fair and sustainable
into the future. In support of this eventual transiti-on,
the Company wil-1 also recommend the Commission establ-ish
a formal process by which a comprehensive review of the
compensation structure for customers with on-site
generati-on can be analyzed and vetted col-l-aboratively
with interested parties.
O. What aspects of the current net metering
service does fdaho Power believe warrant review and
modification?
A. Idaho Power is requj-red to maintain a network
of interconnected power plants, transmission poles/wires,
substations, and distribution poles/wires to balance the
supply of and demand for electricity in its service area.
This complex system of infrastructure, people, and
integrated systems is sometimes referred to as our "power
grid" or "the grid. " Existing retail rate designs
currently applicable to residential and small general
service ("R&SGS") net metering customers were structured
to col-lect the costs associated with the grid under the
assumption that customers would only need
by the utility.
one-way
While thisservices provided
pricing structure
with prlces paid
thi-s rate
so1e1y
does not perfectly align costs lncurred
for each individual customer, overall
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TATUM, DI 5
Idaho Power Company
structure has worked for R&SGS customers who receive
one-way services from Idaho Power.
However, this pricing structure does not work
for customers with on-site generation who require some
servj-ces from Idaho Power (use of the grid and some of
thej-r energy), but who also meet some of their own energy
needs with an on-sj-te generation system (e.9., rooftop
sol-ar) . Many withj-n this growing customer segment use
the grid every hour of the month, but when the existing
rate structure is applied against monthly net
consumption, customers with on-site generation may pay
less than their fair share for the grid-related services
they require while receivj-ng credit for their respective
kj-l-owatt-hours ("kwh") of productj-on at the fulI retail-
rate energy rates; rates reflective of the cost of
utility-provided energy and grid services and not the
benefits and costs associated with customer-owned energy
production. The existing R&SGS rate design does not
reflect the costs and benefits of the transaction between
Idaho Power and its customers with on-site generation.
Commission
service
o
pract j-ces
was
were
A. Net metering is a non-cost based policy that
implemented in 1983 when residential rate designs
review and
Why is Idaho Power proposing the
consider modifying net metering
at this time?
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TATUM, DI 6
Idaho Power Company
limited by meters that could only track inflow and
outflow, and distributed energy resources ("DER") were an
expensive and nascent technology. The circumstances that
existed when net metering policies and practices were
originally estab1ished have changed dramatically across
the nation, and more specifically, in Idaho Power's
service area. First, Idaho Power has deployed Advanced
Metering Infrastructure (AMI) in its service area,
enabling the Company to achieve more precise usage
measurement and facllitate more sophisticated, cost-based
rate designs. Secondly, the cost of solar photovoltaic
("PV") has continued to decl-ine resulting in increased
adoption. Thirdly, and arguably most importantly, the
Company bel-j-eves its net metering service has reached a
pivotal point; that is, Idaho Power has witnessed rapid
growth in its net metering servi-ce in recent years and
has identified a quantifiable cost shift occurring
between its residentj-al net metering customers and
residential- standard service customers. Considering
recent growth, the
predict that future
Company bel-j-eves it can
cost shifting between
substantially in the
reasonably
these customer
next few yearsgroups w1l-I increase
if left unaddressed.
Incentivizi-ng
is no longer needed and
net metering through rate design
results in inappropriate costo25
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shifting. Furthermore, our customers te1l us we must
posj-tion the
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CSB REPORTING(208) 890-sl-98
TATUM, DI 1
Idaho Power Company
Company
services
to meet changing customer preferences and offer
that are fair and sustainable for all- customers
going forward as solar panel technology continues to
evol-ve and improve. Eor reasons described later in my
testimony, the time has come to take gradual, yet
meaningful, steps toward establishing rate designs and
compensation structures for customers with on-site
generation that are fair and sustainabl-e into the future.
O. What specifically is the Company requesting in
this filing?
A. The Company is requesting that the Commission
issue an order authorizing the following: (1) closure of
Schedule 84, Customer Energy Production Net Metering,
("schedule 84") to new service for Idaho R&SGS customers
with on-site generatj-on after December 3L, 2071 , (2)
establishment of two new cl-assifications of customers
applicable to R&SGS customers with on-site generation
that request to interconnect to Idaho Power's system on
or after January L, 20L8, with no pricing changes at this
time, (3) acknowledgement that smart j-nverters provide
functionality that is necessary to support the ongoing
stability and reliability of the distribution system by
ordering the Company to amend its applicable tariff
schedules to requj-re the installation and operati-on of
smart inverters for all- new customer-owned generator
interconnections within 60o25
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TATUM, DI B
Idaho Power Company
days fol-lowing the adoption of an industry standard
definition of smart inverters as defined by the Institute
of Electrical and Electronic Engineers ("IEEE"), (4)
commencement of a generic docket at the concl-usion of
this case with the purpose of establishing a compensation
structure for customer-owned DERs that reflects both the
benefits and costs that DER interconnection brJ-ngs to the
electric system.
O. Is the Company suggesting pricing changes for
the customers that would be placed in the newly
established cl-asses ?
A. No, not at this time. At this time, the
Company is requesting authority to implement two new
tariff schedules, Schedule 6, Residential Service On-Site
Generation, ("Schedul-e 6") and Schedule 8, Small General
Servj-ce On-Site Generation, ("Schedul-e 8") to serve new
R&SGS customers with on-site generation. The newly
establ-ished Schedule 6 and Schedule I would initially
contain rates that mirror those applicable to Schedu1e L,
Residential Service, and Schedul-e 'l , Smal-I General-
Service, respectively. Under this proposal, the rates
under Schedule 6 and Schedul-e 8 woul-d continue to mirror
the rates contained in Schedule 1 and Schedule 7 until
the Commission determines the proper rate design and/or
compensation structures
based
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upon appropriate cost of service studies and other
applicable generation valuation studies.
O. How is the Company's case organized?
A. My testj-mony will begin with an overview of how
the continued evol-ution of customer preferences and
technological advances require that Idaho Power eval-uate
and modif y the services it provides to customers. I wil-l-
then discuss the cost shifting that exists with current
net metering practices, the need for establ-ishing
separate customer classes, and important considerations
related to existing net metering customers.
Company witness Connie Aschenbrenner will-
review the history of the Company's net metering service
and provlde an overview of the associated cases brought
before the Commission. Ms. Aschenbrenner will provide an
update on net metering participation and growth rates,
and will- discuss the Company's efforts related to
customer and stakeholder engagement prior to the
Company's application in this case. Ms. Aschenbrenner
will- discuss the Company's request to establish new
customer classes for R&SGS customers with on-site
generation and the implementation of new tariff Schedules
6 and B. Lastly, Ms. Aschenbrenner will dj-scuss the
Company's efforts rel-ated to customer communication of
this filing.
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CSB REPORTING(208) 890-5198
TATUM, Dr 10
Idaho Power Company
Company witness Dave Ange11 wiII provide an
explanation of the electrical- grid and how the Company's
R&SGS customers with on-site generation utilize the
distribution system. He will then address the questlon
of whether j-ncreasing l-evel-s of DER contrj-bute to the
deferra] of future investment in distribution
infrastructure. Lastly, Mr. Ange11 will present the
benefits provided by smart inverters and explain the
Company's request re1ative to a smart inverter
requirement for customers who interconnect on-site
generation to Idaho Powerrs system.
I. EVOLVING CUSTOMER PREEERENCES AIID TECHNOLOGICAT
ADVAT{CES
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O. Has the Company experienced a change i-n
customer needs and preferences with regard to how they
take service?
A. Yes. As technology has evolved, so have
customer preferences and expectatj-ons with regard to
where and how their energy is produced. Innovation,
particularly advances in sofar PV technology and personal
vj-ews on solar power, has resulted in larger numbers of
customers choosing to install on-site generation.
O. Generally, what types of solar PV innovation
has the utility industry witnessed?
A. Advances in solar energy, specifically
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discoveries j-n the solar panel technology, have led to
increased sofar panel efficiency. An article written in
TATUM, Dr 10a
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201-7 by EnergySage, attached as Exhibit No. 7, stated
that: "A number of achievements by vari,ous panel
manufacturers have brought us to todayrs current record
for sol-ar panel efficiency: 23.5 percent . ." The
article also claims that, "The sol-ar cell- types used in
mainstream markets could also see major j-mprovements in
cost per watt a metric that compares relatj-ve
af fordabiJ-ity of sol-ar panels. " These reductions in
cost have led to growth in the development of
non-utility-owned power. In fact, on May 10, 20L1, USA
Today reported that Tesla, best known for its el-ectric
cars, "wi1I begin selling and installing sol-ar roof til-es
for U.S. customers this summer." The articl-e, attached
as Exhibit No. 2, went on to explain that "glass solar
roof tiles with embedded solar col-l-ectors" would be "more
durable than a typical roof, a third lighter and cheaper
when electricity savings and tax credits are included. "
Developments in power technol-ogy in the form of on-site
or self-generation are becomj-ng more readily available,
affordable, and attractive to customers.
O. What type of growth rate has the solar industry
witnessed?
A. The Solar Energy Tndustries Association
("SEIA") reports that the solar industry is growing at a
record pace. In the article attached as Exhibit No. 3,
CSB REPORTING
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TATUM, Dr 11
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TATUM, Dr 12
Idaho Power Company
SEIA claims that: "In the l-ast decade, solar has
experienced an average annual growth
0. Has Idaho Power experienced
rate of 68U. "
metering service conrmensurate with the
growth in its net
growth experienced
across the industry?
A. Yes. As more fu1ly described in Ms.
Aschenbrenner's testi-mony, the Company has seen simil-ar
growth in its net metering service, most notably in the
Iast few years. Idaho Power interconnected its first
residential customer-owned sol-ar PV system in 1983, and
this remained the only residential- customer with
self-generation for almost 20 years. In 2002, the net
metering servj-ce was expanded to accommodate two
additional requests for service. As of the end of June
20L7, Idaho Power has L,287 net metering systems in ldaho
taking service under Schedule 84 and has received 181-
applications from customers who intend to install- a
system and take servlce under Schedul-e 84. According to
an articl-e published on May 5, 2017, by the Meridian
Press, a weekly newspaper servj-ng Meridian Idaho: "The
Idaho sol-ar market 1s exploding. " This article is
attached as Exhibi-t No. 4 .
II. NET METERING COST SHIFT
O. Pl-ease describe what is meant by the term "cost
shift" i-n the context of this case.o Z3
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TATUM, Dr 13
Idaho Power Company
A. Currently, the Company's R&SGS customers are
bilIed two types of charges: (1) a flat monthly service
charge of $5.00 and (2) per kWh energy charges that vary
by season and total monthly consumption. Due to the
Iimited biJ-1ing components associated with these rates
classes, most of the Company's revenue requirement is
collected through the volumetric energy rates. This
includes costs associated with all components of the
el-ectrica.l- system, from investment in generation
resources to the meters installed on customers'premises.
ref l-ectenergy rates
energy-rel-ated
for R&SGS customers
components of the revenue
associated with generation,
Consequently,
not only the
requirement,
transmj-ssion,
but fixed costs
and distribution as well.
For this type of rate design, recovery of fixed
costs from an individual- customer declines with any
reduction in net energy usage. This creates a potential
inequity between net metering cuslomers and standard
service customers as net metering customers, who still-
rely heavily upon the grid to both purchase power and
transfer excess generation, are provided the opportunity
to unduly reduce col-lection of cl-ass revenue requirement
by reducing a portion or even all of their net kWh usage
while other residential- customers are left to compensate
for the fixed costs that transfer to them through this
revenue shortfall.25
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CSB REPORTING(208) 890-5198
TATUM, Dr 74
Idaho Power Company
O. How does the industry perceive the
cost shiftj-ng caused by net metering under
that collects the majority of fixed costs
volumetric rate?
a
concept of
rate design
through a
A. Cost shifting is generally accepted and
regulators nationwide have attempted to address it. In
November 2016, the National Association of Regulatory
Utility Commissioners ("NARUC") Staff Subcommittee on
Rate Design issued the Distrlbuted Energy Resources Rate
Design and Compensation manual ("NARUC Manual"). The
NARUC Manual states "DER customers who supply most, Lf
not all, of their own needs annually, but not necessarily
daiIy, may be undercompensating the utility under certain
INet Energy Metering] rate designs for the generation,
transmission, and distribution investments that were made
on behalf of the customer. "l
Others in the industry have concluded that the
net metering policy is also regressive in nature. An
October 201-6 Pub1ic Utilities Eortnightly article,
"Rethinking Rationale for Net Metering, Quantifying
Subsidy from Non-Solar to Sol-ar Customers" (attached as
Exhj-bit No. 5) stated: "The subsj-dy, in aggregate,
constitutes a regressive weal-th transfer from
Iower-income customers to
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1 NaRUC Manual, P. 89. http: / /p,tbs.naruc.org/pub/ 19FDF48B-
AA57 - 5 1 6O-DBA1-BE2E 9C2 FTEAO
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DI 14a
Company
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TATUM, Dr 15
Idaho Power Company
customers. " Idaho Power shares this
Company does not believe it is fair for its
customers without the financial-
higher-income
concern. The
install solar to
O. Has the
rate design been
Commission?
subsldize those
potential for
discussed in a
A. Yes. As explained more fu1Iy in Ms.
Aschenbrenner's testimony, the potential for cost
shifting was acknowledged by this Commj-ssion as early as
2002 and in subsequent cases in front of the Commission.
In a 2002 order, the Commission stated it recognized that
in the net metering program it approved for R&SGS
customers, "the full cost of the program may not be borne
by participants. rf 2 In a 20L2 order, the Commission
acknowledged, "net metering customers do escape a portion
of the fixed costs and shift the cost burden to other
customers in their class. "3 In that same order, the
Commission stated, "dramatic changes shoul-d not be
examined in isol-ation but should be fuI1y vetted in a
general rate case proceeding. "4
O. Does the Company believe, in liqht of the
Commission language cited above, that the Commission
should
ability or desire to
who do.
cost shifting caused by
case in front of this
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2 Case No. IPC-E-01-39, Order No. 28957, p. 72.
3 Case No. IPC-E-12-21, Order No. 32846, p. 13.
4 rd. aL 12.
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DI 15a
Company
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Idaho Power Company
authorize the Company to establish separate customer
cl-asses for R&SGS customers with on-site generation at
this time?
A. Yes. The Commi-ssion's statement from Order No.
32846 was made in reference to the Company's proposed
pricing modifications in that case, which were specific
to R&SGS net metering customers, and incl-uded a request
to increase the servj-ce chartTe, introduce a new basic
Ioad capacity ("BLC") charge, and reduce the energy
charge. In the current proceedj-ng, Idaho Power is only
requesting that the Commj-ssion approve the formatj-on of
two new rate schedul-es on a prospectj-ve basis with no
proposed modifications to rate design or compensation.
The Company believes its relatively limited request in
this case does not contradict the Commission's order
issued in Case No. TPC-E-72-21 . Establ-ishing
customer classes now w1l-I
its class cost-of-service
position the Company
process to allocate
established customer
separate
to utilize
revenue
cl-asses andrequirement
also inform
to the newly
the Company as to what rate design makes
cl-ass in a future rate
the net metering
sense for the residential customer
proceeding absent
customers.
Further,as describeci more fu11y in Ms.
Aschenbrenner' s testimony, the l-evel- of adoption of net
metering in Idaho Power's service area has grown
the inclusion of
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CSB REPORTING(208) 890-s198
TATUM, DI 1-7
Idaho Power Company
substantially since the concl-usion of TPC-E-12-27 and
does not show signs of slowing. As stated in the NARUC
Manual, rate design incentive may not be necessary as
adoption rates increase: s
Rate design and compensation decj-sions made in
one year will Iikely need to be reviewed,modified, or changed over time as technologies
continue to deveJ-op, as customers adopt DER atgreater (or slower) rates, and as needed to
support economj-cs. Eor exampfe, a decision to
adopt net energy metering (NEM) as the
compensation methodology may be appropriate if
a regulator decides to incentivize adoption
rates of sol-ar PV; however, as adoption rates
increase, it may not be necessary to continue
to provide such an incentive.
O. Why does the Company believe it shoul-d address
cost shifting now rather than waiting untj-l- the number of
DER installations reach higher level-s?
A. The Company believes that the most appropriate
time for the Commj-ssion to begin to address cost shifting
caused by the combj-nation of net metering and current
rate design is now, before DER penetration reaches higher
Ievels. Many state utility regulatory commissions have
recently faced challenges when addressing modifications
to net metering policy at higher level-s of DER
penetration. Customer dissatisfaction has been a
sj-gnificant driver in high profile, contentious
proceedings across the high DERtotrLJ
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TATUM,
Idaho Power
DI L7a
Company
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(208 ) 890-s198
TATUM, DI 1B
Idaho Power Company
penetration states of Cal-ifornia, Arizona, Hawaii,
Nevada, and Utah. Idaho Power bel-ieves that positioning
stakeholders to address the cost shift with separate
customer classes, coupled with customer education from
DER providers and utilities al-ike, will provide increased
transparency and certainty for a greater number of
customers as they consider j-nvestments and wil-l- likety
l-ead to increased customer satisfaction in the long run.
Consistent with this notion, the NARUC Manual emphasized
the importance of price signals:6
A very important factor in customers' decisj-ons
on DER j-nstall-ation is the price signals sentby the rate design. If those price signals do
not appropriately reflect a jurisdiction's
policies on cost-causatj-on, the result will
likely be an economically or socially
inefficient amount of DER.
While the Company provJ-des its customers with
information that rates are
customers may be investing
assumption that rate design
subject to change, some
in DER systems under the
changes or compensation for
occur; that misunderstandingneverexcess net energy will
may negatively impact the economics of their investment.
6 td. at 155
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CSB REPORTING(208) 890-s198
TATUM, DI 19
Idaho Power Company
III. ESTABLISEMENT OF SEPAR;ATE CUSTOMER CI,ASSES
O. Why is the Company proposj-ng to establ-ish new
customer classes for R&SGS customers with on-site
generatlon?
A. The Company beJ-ieves that establishing new
customer cl-asses for R&SGS customers with on-site
generation is a first step toward addressing the cost
shift between net metering customers and standard service
customers.
O. Why not wait to create new customer classes for
R&SGS customers with on-site generation until- the future
rate proceeding that considers or evaluates pricing
changes?
A. The establishment of similarly situated
customers or customer classes has been a long-standing
and j-mportant first step in the ratemaking process.
Taking this important first ratemaking step now wiII
positj-on the Company to study this segment of customers,
providi-ng the data necessary to understand how this
customer segment utilizes the Companyrs system. The data
quantifying the usage of the system wil-l- inform what
costs (revenue requirement) are appropriately allocated
to the newly established customer classes j-n a future
rate proceeding (class cost-of-service process) .I 25
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TATUM, Dr 20
Idaho Power Company
This approach will limit the issues presented
in a future rate proceeding to the eval-uation of what an
appropriate rate design and compensation structure is for
R&SGS customers with on-site generation. In addition,
establishing new customer cl-asses will provide increased
transparency for customers as they consider making
investments in self-generation systems.
The Company believes this first step is also
consistent with guidance contained in the NARUC Manual
which acknowledges that the "important point is that a
jurisdiction be situated to analyze, p1an, and be
prepared for its next steps before the market and
customer adoption rates overtake its abiJ-ity to respond. "
The Company's filing j-s intended to facilitate the
expansion of on-site generation in a way that is both
scalabl-e and sustainable into the future. The current
net metering rate design and service provisions are
neither scafable nor sustainable.
0. Illhat do you believe should be the next step
toward addressing the cost shift between net metering and
standard service customers?
A. Idaho Power believes that the next step would
be to determi-ne the benefits and costs of an on-site
6 ta. at 62o25
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(208 ) 890-5198
TATUM, Dr 2L
Idaho Power Company
generation system through a coll-aborative process where
stakehol-ders and other utilities can participate. Before
the Company can propose an appropriate rate structure or
compensation methodo.l-ogy for R&SGS customers with on-site
generation, the Company would need to understand the
unique benefits and costs these customers may add to the
overall system.
O. Why doesn't Idaho Power first establish those
benefits and costs before proposing to establish separate
customer cl-asses for R&SGS net metering customers?
A. Establ-ishlng separate customer cl-asses for
R&SGS customers with on-site generation 1s not
Power
dependent
believeson what benefits of DER may exist. Idaho
that the logical first step is to ask the
decide whether the nature or type of l-oad
Commission to
for a customer
with on-site generation is distinctly different from
their current customer classification. Then, it is
appropriate to study this segment of customers to
determine what utility costs are appropriately assigned
to them (class cost-of-service process) and what benefits
these unj-que customers may bring to the system that a
customer without on-site generation doesn't.
O. Please describe the Company's request of the
Commission in this proceeding as it relates to
determining the benefits and costs of DER.o 25
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(208 ) B9o-s198
TATUM/ Dr 22
Idaho Power Company
A. The Company
generic docket at the
purpose of establishing
customer-owned DERs that
requests that the Commissj-on open a
conclusion of this case with the
a compensation structure for
reflects both the benefits and
costs that DER interconnection brings to the electric
system.
as the
Because the Company believes that decisions such
determination of appropriate benefits and costs
are not unique to Idaho Power, a generic docket, that
could include other
appropriate forum to
be.
O. When does
would be the most
what those impacts would
utilities,
determine
Company antj-cipate it will
for the newly establ-ishedpropose pricing
Schedules 6 and
A.
modify
as part
the
changes
8?
The Company antj-cj-pates that it wil-l- request to
the pricing structure and compensation methodology
of a future rate proceeding. The Company
believes this approach al-so aligns wlth previous Order
No. 32846, where the Commission stated:8
To the extent the Company wishes to increasethe monthly customer charge, ot implement a BLC
for the residential and small general service
customer classes, it shall raise that issue ina general rate case.
8 Case No. IPC-E-12-2'7, Order No. 32846, p. 19.o 25
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CSB REPORT]NG(208) 890-5198
TATUM, Dr 23
Idaho Power Company
O. Does the Company currentl-y communicate to its
prospective net metering customers that the current rate
structure and interconnection requirements are subject to
change?
A. Yes. When a customer submits a net metering
application, the Company requires that customers
affirmatively acknowledge an understanding that the
current rates do not represent a guarantee of future
pricing (included as Exhibit No. 6). fn addition, the
Company reminds customers of this provisi-on when Idaho
Power notifies them via email or letter that their
on-sj-te generation
their service wiII
system has met all requirements and
be transferred to a net metering
the letter is attached as Exhibit
di-stributes a brochure at trade
account.
7. The
A copy of
Company al-so
No.
shows where Idaho Power is represented that j-ncludes
information about net metering and the potential- for
This brochure i-s attached asfuture price
Exhibit No. I
changes.
Further, the Company maintains a l-ist of
Erequently Asked Questions (FAQs) on Idaho Power's net
metering J-anding page that includes information about net
metering and the potential for future price changes.
IV. IMPACT TO EXISTI}IG ![ET METERIT{G CUSTOMERS
O. Will the Company's filing impact existing R&SGS
net metering customers?o 25
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TATUM, Dr 24
Idaho Power Company
A. No, not immediatefy.
establish new customer classes
not impact existing R&SGS net
schedules
o.
period for
is?
The Company's request
in this proceeding will
meteri-ng customers. The
R&SGS net metering
to
Company proposes that existing
customers remai-n on Schedu]e 84 for a period of time,
under the same rate structure and compensation method,
and transition in the future to the proposed new
over some period of years.
Has the Company calcul-ated what the payback
an average residential net metering customer
A. Yes. While the payback period for an
individual- customer can vary depending on variables such
as cost to install-, customer usage, and system
orientation, using the normal-ized average monthly usage
per residential- customer (954 kwh) for 2016, the payback
period is approximately 15 years for a customer living in
Boise, Idaho who installs a 6 kW PV system.
O. Is the Company proposing to establ-ish the time
frame over which to transition existing R&SGS net
metering customers as part of this case?
A. No. The Company recommends that the term of
the transition period be determined by the Commission as
part of a future rate proceeding. The Company believes
that decision i-s best informed in the context of a
generalo25
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CSB REPORTING
(208 ) 890-s198
TATUM, DI 25
Idaho Power Company
rate case when it is al-so known what rate design changes
will- be
o.
metering
A.
metering
Company proposes that the
remain on Schedule 84 be
taking place.
What does this mean for existing R&SGS net
customers?
Under the Company's proposal, the existing net
customers will remain on Schedule 84 and their
rates wil-I continue to mirror those in Schedule 1 for
residential- net metering customers and Schedule 1 for
small general servj-ce net metering
length of
determined
customers. The
time these customers
by the Commission as
part of a future
are proposed for
rate proceedj-ng,
R&SGS customers
when different rates
with on-site generation
taking service under Schedules 6 and 8.
O. Please summarize the Company's request in this
proceedj-ng.
A. The Company is requesti-ng that the Commission
issue an order authorizing the following: (1) closure of
Schedule 84, Customer Energy Production Net Metering, to
new servj-ce for R&SGS customers with on-site generation
after December 31, 20L7, (2) establishment of two new
classifications of customers applicable to R&SGS
customers with on-site generation that request to
j-nterconnect to Idaho Powerrs system on or after January
1-, 20L8, with no pricj-ng changes at this time, (3)
acknowledgement thato25
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CSB REPORTING
(208 ) 890-s198
TATUM, Dr 26
Idaho Power Company
smart inverters provide functionality that is necessary
to support the ongoing stability and reliability of the
dj-stribution system by ordering the Company to amend its
applicable tariff schedul-es to require the installation
and operation of smart inverters for all new
customer-owned generator interconnections within 60 days
following the adoption of an industry standard definition
of smart j-nverters as defined by the IEEE, (4)
commencement of a generic docket at the conclusion of
this case with the purpose of establishing a compensation
structure for customer-owned DERs that reflects both the
benefits and costs that DER interconnection brings to the
el-ectric system.
a. When is the Company requesting a Commission
determination regarding its proposal in this filing?
CommissionA. The Company is
issue an order approving
2077 .
requestirrg that the
its proposal by December 31,
O. Does this conc1ude your testi-mony?
A. Yes.
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O. Please state your name.
A. My name j-s Timothy E. Tatum.
0. Are you the same Timothy E. Tatum that
prevj-ously presented direct testimony?
A. Yes.
O. Have you had the opportunity to revj-ew the
pre-fi1ed direct testimony of the City of Boj-se's witness
Stephan L. Burgos; the Idaho Cl-ean Energy Assocj-ation,
Inc.'s ("ICEA") witnesses Kevin King, Michael Leonard,
and Stephen White; the Idaho Conservation League's
("ICL") witness Benjamin J. Otto; Sj-erra Clubrs witness
R. Thomas Beach; the Idaho Irrigation Pumpers
Association, IncIs ("IIPA")witness Anthony J. Yankel; the
Snake Rj-ver Alliance and NW Energy Coalition's ("SRA/NW
Energy") witness Amanda M. Levin; Vote Sol-ar's witness
Briana Kober; Auric So1ar, LLC's ("Auric So1ar") witness
E1ias Bishop; and the ldaho Public Utilitj-es Commission
("Commj-ssion") Staff's ("Staff") witnesses Michael
Morrison and Stacey Donohue?
A. Yes, I have.
O. What is the purpose of your rebuttal testimony?
A. The purpose of my rebuttal testimony is to
provide clarification and to respond to various arguments
raised by intervening parties and Staff ("Partj-es") in
CSB REPORTTNG(208) 890-s198
TATUM, REB 1
Idaho Power Company
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CSB REPORTING(208) 890-s198
TATUM, REB 2
Idaho Power Company
their direct testi-mony. My testimony is compri-sed of
five sections.
In Section I, I explain the reasoning for the
Company's timing of the case and provide the Commission
wj-th the Company's view on a number of important changes
occurring in the electric industry and associated
regulatory policy considerations.
fn Sections II and III, I c1arify the Companyrs
request in this case and respond to a number of issues
raised by Parties that are more appropriately addressed
as part of subsequent proceedings or are otherwise not
within the scope of this case and address other pertinent
issues raised by Parties.
In Section IV, I reaffirm the Company' s
requirements and
smal1 general
on-site
position that the different load service
usage characteristics of residential and
service ("R&SGS") customers who install-
generation justify the establ-ishment of a separate
customer class. I support the Company's position with a
suflrmary of the resul-ts of additional- analyses performed
by the Company that demonstrate the l-oad service
requirements and the pattern of use clearly distinguish
customers with on-site generation from customers without
on-site generati-on.
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CSB REPORTING
(208 ) 890-s198
TATUM, REB 3
Idaho Power Company
In Sect j-on V, I respond to the Staf f 's proposal
to modify the compensation structure for net metering
customers.
I. TIITING OF THE C;ASE A}ID OTEER STRATEGIC CONSIDERATIONS
1. EJ.ectric Industry Evolution
O. Why is now the right time for the Commj-ssion to
make a policy determination on customer cl-assification
for customers with on-site generation?
A. Idaho Power Company ("Idaho Power" or
"Company"), like other util-ities across the country, is
witnessing and experiencing a transformation of the
electric industry. Historically, the vertically
integrated utility has been called upon to provide fully
bundled services to its customers -- inclu.ding
generation, transmission, and distribution services
and Idaho Power has provided those one-way services to
its "fuIl requj-rements" customers for over 100 years. In
recent years, however, Idaho Power has experienced
changing customer preferences related to the services
available to them. This transformation has resulted in
more engaged segments of customers than ever before
customers require nearly instantaneous information
rel-ated to thej.r energy usage and use that information to
make decisions about their energy consumptj-on. One
important questj-on customers today are
is about the decision to invest
asking themselvest25
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in privately-owned generation. Some customers today
woul-d rather take service as a "partial requj-rements"
customer; that is, this segment of customers is choosing
to move away from the same bundled services the rest of
the Company's customers require.
O. How has Idaho Power responded to this
transformation?
A. Idaho Power has responded by improving its
infrastructure to provi-de more robust information to its
customers through the deployment of Automated Metering
Infrastructure and i-mplementation of onl-i-ne services like
My Account. But more work needs to be done. Idaho Power
sees a growing need to modernize its transmission and
distribution grid to accommodate the rapidly growing
distributed generation (rrDG'r) capacity comi-ng online. As
technological advancements are made and innovative
business models emerge, the grid will Iike1y l-ook very
different in the future than it does today. Given the
rapid adopti-on of DG in Idaho Power's servlce area, it is
no longer justified to delay important poJ-icy decisj-ons,
such as the question of customer cl-assification brought
to the Commj-ssion by the Company in this case.
O. Several- parties urge the Commission to delay a
decision on customer classifications. What is your
response to that?
CSB REPORTING(208) 890-5198
TATUM, REB 4
Idaho Power Company
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TATUM, REB 5
Idaho Power Company
A. Operating in the status quo regardj-ng rate
structure wil-1 not position Idaho Power to keep pace with
the transformation of the el-ectrical- system that is
currentfy underway. The outdated rate structure in place
today for on-site generation sends a fal-se signal to
customers; that is, reducing net consumption (somet.imes
to zero, but not always) reduces the cost to serve
commensurately. This signal is inaccurate and needs to
be addressed. Informing customers today that the pricing
structure in place for fuII requirements customers does
not work in the long-term for partial requirements
customers is the first step. Ensuring customers are
making decisions based
the market to advance those technologies that are
competitive from a cost standpoint, not those that
compete based on subsidies.
O. Are there benefits associated with addressing
this issue today instead
A. Yes, there are
adoption to date make it
"grandfatherlng" -- the
on better information will allow
of waiting?
several-. Lower l-evels of
easier to address issues l-ike
contentiousness
will only grow as more customers adopt.
customer education and communication are
of this issue
Similarly,
easier to
facilitate with lower l-evels of adoption. Sending a
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not sustainabl-e" will communicate to those customers
considering investing in
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TATUM, REB 5A
Idaho Power Company
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CSB REPORT]NG(208) 890-s198
TATUM, REB 6
Idaho Power Company
solar or other DG that changes j-n rate design will occur.
Establishing rates that send clear price signals
enabl-e growth of DG in a non-subsidized manner.
a decision on customer cl-assifi-cations wil-l- not
Can you please clarify the
to a transition period?
The Company requested that
Company's request as
it relates
will
Delaying
get
easier with the passage of time.
2. Grandfathering
O. Did the Company request "grandfathering" in its
proposal?
A. No.
a
A.
metering customers remain on Schedul-e
existing
84 for
R&SGS net
a period of
compensation
proposed new
tlme, under the existing rate structure and
transition in the future to themethod, and
schedules over some period of years. -The Company
understands that future rate changes wil-I impact the
economics of deci-sions customers have made in years past
and is sensj-tive to those impacts. The Commj-ssion has,
1n other cases, implemented modest transition periods,
and the Company's posi-tion is that if the Commj-ssion
chooses to implement a transition period in this case, it
may be appropriate.
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CSB REPORTING
(208 ) 890-s198
TATUM, REB 7
Idaho Power Company
3. Delay Decisions Until a General. Rate Case
O. Shoul-d the Commission delay a decision unti-l a
general rate case ( "GRC" ) ?
A. No. Idaho Power has not filed a GRC since 201,7
and it is unknown when it wil-l- do so. In IDACORP's
November 2, 2077, Q3 earnings release call, Idaho Power
Presi-dent and CEO Darrel Anderson was asked for his
thoughts
Anderson
on the Company's near-term rate activity. Mr.
responded that:
lIdaho Power] would have to signal early in '18if we're going to do something for '19given what we would hope to see as continued
strong economic activity and if we can contj-nue
to manage the expenses l-ike we have done thisyear, we would hope to not have to go j-n.1
Because the Company does not have definite
near-term plans to file a GRC, Idaho Power's requested
rel-ief in the 2011 Application purposefully does not
impact customer rates but will position the Company to
make appropriate rate proposals for CommissJ-on, customer,
and stakeholder consideration when that time comes.
II. ISST'ES OUTSIDE THE SCOPE OE' THIS PROCEEDING
O. What was the Company's request in its
Application filed in this case?
I 25
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1 IoaCORP Inc. Earnings Cat.l- transcript, November 2. 201-'7, p.
7 . http :,//www. idacorpinc. com/-/medigl_trtesZttf oaCorpZc
cal-l-s,/ida-usg transcript 2017 -11 -02 . pdf
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A. In this case, the Company has requested (1) to
cfose Schedule 84, Net Meteri-ng Service to new R&SGS
customers with on-site generation, (2) establish new
classes for R&SGS customers with on-site generation, (3)
require smart inverters as defined by the Institute of
Electrical and Electronic Engineers ("IEEE") for all- new
on-sj-te generation installations, and (4) establish a
generic docket at the conclusion of thls case to explore
the benefits and costs that on-site generation brings to
Idaho Power's system.
O. Please explain why you feel there are several
issues raised by Parties that are not within the scope of
this case.
A. The Commisslon has provided clear direction as
to the scope of this case. In Order No. 33946, the
Commission denied ICEA's motion to dismiss, and afso
denied ICEA's alternate recommendation to decide the
value of DG prior to addressing recl-assification of net
metering customers. The Commission stated that it is
"reasonable for us to reexamine classification now
instead of waj-ting . ."2 Much of the testimony
filed by Partj-es diverts discussion to issues that are
not relevant to the Company's relatively limited request
in this case. The vast majority of the topics covered by
the Staff and
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TATUM
Idaho Powe
EBB
ompany
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CSB REPORTING
(208 ) 890-s198
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Idaho Power Company
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intervenors go beyond the scope of this docket.
Testimony from City of Boise, ICEA, ICL, SRA/NW Energy,
IlPA, and Auric Solar appears to ignore the Commissj-on's
Order No. 33946 by continuing to recommend that the
Commission deny Idaho Power's Application and decide the
value of DG prior to addressi-ng recl-assification of net
metering customers.3 In Order No.
denied ICEATs motion to dismiss, dS
alternate recommendatlon to decide
33946, the Commisslon
to addressing recl-assification of net metering
DG prior
customers.
1. General Rate Case Vs. Standalone Issue
O. Several partiesa have suggested that customer
classification must be determined as part of a GRC and
not as a standalone issue. Ms. Kobor even goes as far as
to say that it is "not appropriate to modify customer
class definitions, nor rate design outside of a general
rate case . . "5 Do you believe that it is
consistent with Idaho law to determlne customer
classi-fication as a standalone issue outside of a GRC?
wel-l as denied ICEATs
the value of
p. 10,
20-2]-;
DI, p.
Df, P
3 King Dr, p. 11 , Ii. 22-23, white Dr, p. 9, 1. 12-1,3; otto Dr,
1I. 12-1-8 i Beach DI, p. 6, 11 . 9-1,9; Yankel- DI, p. 6, 11 .
Levi-n DI, p. 26, 1I . 1,6-23; Kobor DI, p. 16, 11 . 1-4 ; Morrison
22.11. 16-20; Donohue DI, p. 22, 1. 24 through p. 23, 1. 7.
4 Kobor DI, p. 28,11. -7-8; Beach DI, p. 39, 11. 21-22i Levin
22, 1. 12.
5 Kobor DI, p. 55, I. 19 through p. 56, I. 1.
CSB REPORTING(208) 890-s198
TATUM
Idaho Powe
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Idaho Power Company
A. Yes. Based upon my understanding of the
resul-ts of an internal- lega1 review, it woul-d be
consistent with Idaho law to determine customer
classifj-cation as a standal-one issue, outside of a GRC.
The Idaho Legislature specifically authorizes6 the
Commission upon hearlng to investigate a sj-ngIe rate, ox
classification, or the entire tariff schedule and
establish new rates, classifications, or practices.
2. CJ,ass Cost-of-Service Study Prerequisite
O. It has been suggested thatr a new cl-ass
cost-of-service study ("COSS") is required to determine
customer classifj-cation. Do you believe that a new COSS
is required in order to determine customer
classification?
A. No. A COSS is necessary to inform any future
changes in rate design. The Company is not requesting to
address rate design as part of this case. Regardless of
the cost to serve these customers, and even 1f the cost
to serve this segment of customers was the same, the
usage characteristics of R&SGS customers with on-site
generation are different and requj-re a separate rate
structure j-n order to provi-de a reasonable opportunity to
recover the costs of servj-ng those customers.
6 rdaho code S7 Kobor DI, p.
61-503.
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3. Benefits/Costs Study Prerequisite
O. Several parties8 suggest it is necessary to
conduct the generic docket, to understand the benefits
and costs that DG interconnectj-on brings to the electric
system, prior to a determination on rate classifications
in the current case. How do you respond to that?
A. The question at the center of this case is
whether customers with on-site generation are
fundamentally different than fu1l requirements customers.
I betieve the suggestion by parties that the Commission
cannot make a decision on customer classification without
cost and benefits being eval-uated is an attempt at
sta11ing. The determination of customer classification
is not dependent on the cost to serve those customers,
nor is it dependent on any benefits a customerrs excess
net energy exports may provide to the system.
Determining the costs and benefits of on-site generation
is not relevant when answering the question about
fundamental differences between a customer who generates
some or all of their own energy and one that does not.
A. Why does the Company believe it is critical for
the Commission to issue a determination on customer
classes prior to opening a generic docket to establ-ish a
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8 Burgos DI, p. 8, 11. 1-3; King DI, p. 18, l-l-. 10-11; Otto DI,
p. 7,11. 11--L2; Beach DI, p. 6,11. 9-19; Levin direct Testimony, p.
21, 11. l4-2Li Kobor DI, p. 76, 11. l-4.
CSB REPORTING
(208 ) 890-s198
TATUM, REB 11a
Idaho Power Company
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Idaho Power Company
compensation structure for customer-owned generation that
reflects both the benefits and costs that on-site
generation j-nterconnection brings to the el-ectrj-c system?
A. Having the answer to customer cl-assifications
is necessary because that determination will inform the
scope of the generic docket. First, if the Commission
declines to adopt new customer classes, there is no need
to evaluate the costs specific to net metering customers
they will be assigned costs as part of the standard
service customer class. Second, if the Commisslon
decl-ines to adopt new customer classes, a prr-c]-ng
Commissiondiscussion also becomes lrrelevant; if the
determines net metering customers are no different than
standard service customers, they will continue to pay the
same rate structure as standard service customers.
O. Does the Company have a recommendation for the
format of the generic docket?
A. Yes. I believe the process shoul-d include a
series of workshops held with al-1 interested stakeholders
in the stater dS a continuation of prior stakeholder
workshops that the Company has facilitated. The purpose
of the initial workshop could be for parties to establish
a framework for analyzing costs and benefits that
customers wj-th on-sj-te generation contribute to the
electric system. The Company and other stakeholders
woul-d brj-ng studies oro25
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(208 ) I90-5r-98
TATUM, REB 13
Tdaho Power Company
recommendations demonstrating possible rate design and
compensation structures. The Company and stakeholders
would also solicit feedback about the types of studies
and considerations they feel the parties should focus on.
A second workshop coul-d be held for parti-es to discuss
how the COSS should be conducted to inform the
appropriate rate design for customers with on-site
generation. A11 partles would then complete the
requested studies and submit them for all parties to
review. A third workshop may be necessary to discuss the
results of the studies to help inform what rate design
future GRC.each participating
Fol1owing the final-
utility could file in a
workshop, there would be an
opportunity for public comment. If parties reach
agreement, a settlement stipulation would be drafted and
submitted to the Commission to seek approval.
4 Effect on Private Solar Industnr
O. A number of intervenors contend that the
Company's proposal would have a negative impact on the
rooftop solar industry.9 How do you respond to that
contention?
A. These arguments ej-ther ignore or misconstrue
the Commission's ro1e, which is to establish just and
9 Burgos DI, p. 10, 11.
9, 1l-. 8-10; Leonard DI,
King DI, p. \4, 1I. 8-10; White
1-, 11. 1.4-16; Bishop DI, p. 2, l-1.
2-3;
p.DI, p.
8-9.
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TATUM, REB T4
Idaho Power Company
reasonable rates
industry should
the subsidies
Customers who
have the right
proposal.
provide
offset
Power does not believe it is
customers to facilitate the
interests through subsidies
and regulation.l0 The rooftop solar
stand on its own wi-thout the benefi-t of
embedded in existing rate designs.
want to participate in private generation
to continue to do so under the Company's
on-site generation. Idaho
the responsibility of its
expansion of private business
provided by an outdated
Idaho Power does not bel-ieve
The intent of the net metering service is to
a fair and sustainable option for customers to
their own usage with
pricing
it is in
structure. That is,
the best interest of its customers to ignore,
structure that fail-s toand leave in place, a pricing
segmentcollect costs from a of customers at the expense
of other customers.
If as a matter of policy, the Commission wishes
to continue to promote the adoption of DG through
financial incentives or other subsidies, this goal is
best accomplished through direct and transparent
mechanisms and not through rate design. Intervenors have
provided no justiflcation for why roof top solar industry
considerations should factor into this customer
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10 rdaho code SS 61-501 through 503.
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TATUM, REB 15
Idaho Power Company
these arguments,as they clearly assign a higher priority
well--bej-ng of an j-ndividual industry
of just and reasonable rates for Idaho
for the financial-
over the pursuit
Powerr s customers.
III. OTEER ISSI'ES RLISED BY PARTIES
1. Custouer Choice
O. Do you agree with intervenors' claims or
suggestions that the Company's proposal- will eliminate
customer choice for solar in Idaho?11
A. No. Idaho Power supports customers who want to
generate a portion of their own energy. Under the
Company's proposal, any customer who chooses to install
on-site generation wil-l- continue to be provi-ded the same
opportunity to do so. To be clear, the Company is not
seeking to el-iminate rooftop solarr or any type of
on-sj-te generation, as an option availabl-e to its
customers. The Company's proposal would take an
important step toward establishing a framework in which a
customer's decisj-on to instal-l his or her own generation
system can be informed by the actual economics of doing
so wi-thout hidden subsi-dies that exist within an outdated
rate design and compensation structure.
1l- Kobor DI, p. 50, 1. 20 through p. 51,
1. 17, p. 8, l-. 4; Beach DI, p. 14, i]. 6-'7.
1. 1; White DI, p. 4,
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CSB REPORTING
(208 ) 890-s198
TATUM, REB L6
Idaho Power Company
0. How does the Companyrs proposal preserve
customer choice while stil1 making progress toward
increased fairness in the assignment of costs among
customers ?
A. The Company's proposal recognizes that, under
the status guo, the current pricing structure for R&SGS
is iI1-suited to appropriately recover the costs
associated with the distinctly different usage
characteristics of R&SGS customers with on-si-te
generation. The Company's proposal seeks to address this
issue gradually and thoughtfulJ-y with input from
customers, regulators, and other stakehol-ders. The
Company supports the establishment of separate classes
for R&SGS customers with on-site generation as a
reasonable first step. This first step does not in any
way impact the economlcs of customer investment in
on-site generation in the near-term, but rather sends a
clear signal to customers that future pricing and
compensation structures for R&SGS customers with on-site
generation may be modified.
The assertions that the Companyrs proposal in
this case may limit or el-iminate
to be incorrectly premj-sed on the
customer choice appear
belief that, absent the
Company's proposal, customers
the prici-ng and compensation
shou]d be confident that
structure under net meteringo
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precisely the
That is
CSB REPORTING(208) 890-s198
TATUM, REB 16a
Idaho Power Company
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(208 ) 890-s198
TATUM, REB I7
Idaho Power Company
misconception the Company's proposed initial- step is
intended to address. The Company's proposal- will- serve
to better inform customer choice going forward and will-
do nothing to l-imit customers' energy choices.
2. Rate Certainty
O. Several
proposal creates
wi-tnessesl2 suggest that the Company's
additional- uncertainty that wiIl
negatively impact future sofar install-ations. Do you
believe that the Company's proposal creates more
uncertainty for customers considering an investment in
on-site generation?
A. No. Given the growing nationwide debate over
net metering, uncertainty would continue even if the
Idaho Commission did not address the issue at this time.
By making a fili-ng, the Company intends to provide more
clarity to customers who are considering investing in
private DG.
O. Woul-d delaying the Company's request eliminate
the uncertainty and make future changes in rates easier
for those who are considering an investment in on-site
generation?
A. No.
prolonging the
I believe the contrary is true
deci-sion on customer classi-ficatlon could
12 Burgos Dr, p. 9, l-l- . 72-1,3; Bishop Dr, p
p.20, l-l-. 13-14; White DI, p.5, l-1. 6-9.
2, 1. 15; King DI,
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(208 ) 890-s198
TATUM, REB ]-B
Idaho Power Company
foster further uncertainty. Continued inaction
perpetuates the potential for misinformation and could be
especially harmful to customers who woul-d benefit from
more accurate economic signal-s concerning on-site
generation.
3. Fixed Cost Adjustnent ![echanism
O. Some parties, including the Commission Staffr13
point out that the Company is not financially harmed by
net metering because of its Fixed Cost Adjustment
("ECA"). Do you agree wj-th this assessment regarding the
FCA?
A. Generally, yes. However, it should be noted
that the Company has not presented any concerns in this
case regarding financial impacts to Idaho Power resulting
from net metering. The FCA mechanj-sm is desj-gned to
all-ow the Company to recover the majority of the fixed
costs of providing service to R&SGS service customers,
regardless of the overal-l level of energy consumption per
customer. In the case of net metering, dtry shortfall in
fixed cost recovery that may result from the current net
metering rate structure would be tracked and recovered
from aI1 R&SGS customers annually through the FCA. Whil-e
it is correct to point out that the FCA J-argely mitigates
any financial impact that net metering wou1d otherwj-se
have on Idaho Power, it is also important to recognize25
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13 Donohue Dr, p. 3,11 . l'7 -21,; Levin DI, p. 24 , 11 . 6-76 .
CSB REPORTING(208) 890-5198
TATUM, REB l_Ba
Idaho Power Company
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TATUM, REB 79
Idaho Power Company
between net metering customers and non-net metering R&SGS
customers between GRCs. Therefore, dny reduction in cost
shifting related to net meterJ-ng service would reduce
future FCA col-l-ections that woul-d have otherwise existed.
IV. E\IIDENCE TO SUPPORT SEPAR]ATE CUSTOMER CI.ASSES
O. What do you believe is the most important issue
at the center of the case?
A. I believe that there is one rel-atj-veIy limited,
but important, policy issue to resofve in this case,
which is to answer the question: "Do the different load
servj-ce requirements and usage
on-site
characteristics of R&SGS
customers who instal-l-generation justify a
separate and unique rate structure to provide a
reasonabl-e opportunity to recover the costs of serving
those cusLomers?"
0. Does the Company continue to believe that the
Ioad service requirements and the usage characteristics
of R&SGS customers who install on-site
R&SGS customers
generation are
without on*sitedifferent than that of
generation and justify
customer cl-ass?
the establ-ishment of a separate
A. Yes. The Company maintains its position that
the load servj-ce requirements ancl the pattern of use of
R&SGS customers with on-site generation are distinctly
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CSB REPORTING
(208 ) 890-s198
TATUM, REB 20
Idaho Power Company
different from that of R&SGS customers without on-site
generation.
O. Did Parties agree with Idaho Power that R&SGS
customers with on-site generation are different than
standard R&SGS customers and therefore require a separate
customer class?
A. While ICL witness Mr. Otto14 acknowledged that
customers with on-site generation are different in some
respects, generally, other partiesls suggested that the
Company did not provide sufficient evj-dence to justify
that R&SGS customers with on-site generation are
different than R&SGS customers without on-site
generation.
O. Did the Company perform additional analyses in
response to suggestions that the Company did not provide
sufficient evidence to justify that R&SGS customers with
on-site generation are different than R&SGS customers
wj-thout on-site generation?
A. Yes.
1. Pattern of Usage
O. What analyses did the Company perform to
of residential customers withevaluate the pattern of use
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5; Donohue DI, p. 5, 1. 5.o 25
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(208 ) 890-s198
TATUM, REB 2T
Idaho Power Company
on-site generation and for residential- customers without
on-site generation?
A. The Company studied the l-oad factor, the load
profile, the system-coincident demands ("SCD") and the
non-coincident demands ("NCD") for residential customers
with on-site generatj-on and for residentia1 customers
wj-thout on-site generation.
O. Please summarize the resul-ts of the additional
analyses performed by the Company that demonstrate the
load factor, the l-oad profile, the SCD and the NCD for
R&SGS customers with on-site generation are different
than R&SGS customers without on-site generation.
A. Although Mr. David M. Ange11 will provide the
details of the additional- analyses performed by the
Company, as well as the statistical results of the
analyses, the results can be summarized as follows:
' The Companyrs load factor analysis confirmed
that residential customers with on-site
generation have notably lower load factors than
residential customers without on-site
generation. 16
The Company's
customers with
load profile analysis showed that
on-sj-te generation had a higher
L6 Angell REB, p. 4, 1. 20 through p. '7, 1. 9o25
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TATUM, REB 22
Idaho Power Company
demand for energy during the evening and
nighttime hours than customers without on-site
generation and their rate of change in usage
during the day is larger than for customers
without on-site generation. 1n addition, the
load profile analysis shows that energy for
customers with on-sj-te generation flows in both
directj-ons. The excess energy flowing to the
utility is greater in spring and summer
months.17
The Company's analysj-s of the SCD
the SCD of customers with on-site
showed that
generatj-on is
than the SCDlower from April through September
of customers without on-site generation but
higher from October through March.lB
The Company's analysis of the NCD showed that
the NCD of
higher than
generation
In addition
for all
to the
customers with on-site generation is
customers without on-site
Company have other evidence
12 months of the year.le
Company's analyses, does the
that suggests that R&SGS
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p. 74,
p. 15,
l-. 6 t.hrough p. 13, 1. 10 .
1f. 10-17.
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(208 ) 890-51-98
TATUM, REB 23
Idaho Power Company
customers with on-site generation are different from
R&SGS customers without on-site generation?
A. Yes. Dr. Ahmad Faruqui of the Brattle Group
has also conducted emplrical- analysj-s using Idaho Power
data. In his rebuttal testimony, Dr. Faruqui shares the
resu1ts of his anal-ysis which find that the differences
are quite significant.2o
2. Load Service Requiraent
O. How does the l-oad service requirement of a
customer with on-site generatj-on differ from that of a
standard service residential customer?
A. A customer with on-site generation is a partial
requirements customer. Because partial requirements
customers generate aII or some of their own annual energy
needs, the utility provides onJ-y certain services that
standard service customers require l-ike providing
capacity. But the utility is al-so required to provide
different services that standard service customers do not
use like receiving excess net energy on a non-firm,
if , ds, and when available basj-s.
O. Is it necessary to place partial requirements
customers in a separate
A. Yes. Current
customer cl-ass?
rate designs
recover costs from full-
were historically
reguirementsdeveloped to
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TATUM, REB 24
Idaho Power Company
on a fu11y bundled, volumetric basis. This approach has
been viewed as fair and reasonabl-e when applied to
customers who rely on the utility to meet all their
electric needs. However, it is neither faj-r nor
reasonable to apply fu11y-bund1ed, volumetrj-c rates to a
group of
and make purpose is reducing or
taken from Idaho Power.eliminating the volume of energy
V. STAFF'S MODIFIED COMPENSATION STRUCTT'RE FOR NET
METERING CUSTOMERS
a. Please provide an overview of your
understanding of Staff's proposal to "correct the cost
shift. "21
A. Staff witnesses Morrison and Donohue recommend
a modiflcation to the compensatj-on structure under
Schedule 84, Net Metering Servj-ce, that would eliminate
the current practice of netting consumption and
generation on a monthly basis, and instead move to an
hourly netting approach. Staff's proposal woul-d also
assign a value to hourly net excess generation equal to
an avoided cost-based rate instead of the full- retail
rate.
O. Do you believe Staff's proposal to correct the
cost shift is a reasonable solution to the issue at the
center of the case?
customers who choose to take unbundled services
investments whose sol-e
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21 Donohue DI, p. 13, 1. 20.
TATUM, REB 24a
Idaho Power Company
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CSB REPORTING(208) 890-sl-98
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A. I believe Staff's proposal represents a
reasonable step toward correcting the referenced cost
shift; however, it fa1ls short of a complete sol_ution.
Whi1e Staff's proposal does address part of the cost
shift issue by adjusting the compensation for excess net
energy, it ignores that the rate design applied to these
customers does not provide for an equitable assignment of
the costs of utility service.
O. Does the Company support the adoption of the
Staff's proposal to modify the compensation structure for
customers with on-site generation as an j-nterim step?
A. Yes. The Company does support adoption of the
Staff's recommendation for a modified compensation
structure for customers with on-site generation, because
it does represent meaningful movement toward addressing
the cost shifting at issue in this case. However, the
Company does not believe adoption of Staff's modification
should prevent the establishment of separate cl-asses for
R&SGS customers wj-th on-site qeneration. While Staff's
proposal may effectively address the appropriate level of
compensation for net excess generation, the rate design
flaws that exj-st by applying volumetric rates to net
metering customers would remain unaddressed. The Company
believes that the establishment of separate cl-asses for
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CSB REPORTING
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TATUM, REB 26
Idaho Power Company
R&SGS customers with on-site generation, in conjunction
with Staff 's proposal, woul-d
toward fair and sustainable
represent important steps
rate and compensation
customers.structures for this unique group of
O. If the Commj-ssion chooses
proposed compensation structure to
to implement Staff's
be applicable to the
new classifications of R&SGS customer with on-site
generation, what value should be assigned to the net
excess generatj-on?
A. The Company bel-ieves that the proxy value of
the DSM Alternatj-ve Cost used by Staff in its analysis
would represent a reasonable interim value for the net
excess generation. Should the Commission adopt a
specific DG valuation methodology following the
conclusion of the workshop process recommended earlier in
this testimony, the Company recommends that the
Commission transition to applying that resulting value on
a going-forward basis.
vr. coNcLusrot{
O. PIease summarize your testimony.
A. An increasing number of Idaho Power's customers
are choosing to invest in technologies that all-ow them to
interact with the Company's electric system, or the grid,
in new and innovative ways. In response to these
changes, the grid is transforming from a one-way serviceo25
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provider to an interactive,
interconnection of customer
enabling platform for the
driven technologies. In
CSB REPORTING(208) 890-s198
TATUM, REB 26a
Idaho Power Company
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CSB REPORTING(208) 890-s198
TATUM, REB 27
Idaho Power Company
support of this transformation, it is essential- that the
Company's pricing structures also transform to align with
new ways customers are choosing to take services from the
grid.
In this case, the Company has presented
Ioad service requirements
R&SGS customers who instal-1
sufficient evidence that the
and usage characteristics of
on-site generation
customers without on-sj-te generation. These differences
justify the establishment of a separate rate structure to
provide a reasonabl-e opportunity to recover the
cost-of-service from those customers. Taking steps today
to recognize these important differences will- pave the
way toward maintaining a fair-priced and sustainable
service of ferj-ng into the future.
O. What j-s your recommendation for the Commission?
A. The Company recommends that the Commission
j-ssue an order authorizing the following: (1) closure of
Schedul-e 84, Customer Energy Production Net Metering
Service, to new service for fdaho R&SGS customers with
on-sj-te generati-on, (2) establ-ishment of two new
cl-assifications of customers applicabl-e to R&SGS
customers with on-site generation that request to
j-nterconnect to Idaho Power's system on or after the date
of the
are different t.han that of R&SGS
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CSB REPORTING
(208 ) 890-5198
TATUM, REB 28
Idaho Power Company
Commissionrs order in this case, with no pricing changes
at thj-s time, (3) acknowledgement that smart inverters
provide functionality that is necessary to support the
ongoing stability and rel-iability of the distribution
system by ordering the Company to amend its applicable
tariff schedules to require the installation and
operation of smart inverters for all new customer-owned
generator j-nterconnections within 60 days foll-owing the
adoption of an industry scandard definj-tion of smart
inverters as defined by the IEEE, (4) commencement of a
qenerj-c docket at the conclusion of this case with the
purpose of establishing a generation val-ue for
customer-owned DG that reflects both the benefits and
costs that DG interconnectj-on brings
(5) adoption of Staff'ssystem, and proposed compensation
structure to be applicable to the newly established rate
classifications referenced in subpart (2) .
O. Does this conclude your testlmony?
A. Yes, it does.
to the el-ectric
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CSB REPORT]NG
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TATUM, SURR REB 1
Idaho Power Company
O. Please state your name.
A. My name is Timothy E. Tatum.
O. Are you the same Timothy E. Tatum that
previ-ousIy presented direct and rebuttal- testimony?
A. Yes.
a. What is the purpose of your surrebuttal
testimony?
A. The purpose of my surrebuttal testimony is to
respond to recommendations by intervening parties in
their rebuttal- testimony.
a. Please describe the recommendations made by
intervening parties in rebuttal- testimony.
A. Several parties continue to recommend that the
Idaho Publlc Utllities Commission ("Commission") deny
Idaho Power Company's ("Idaho Power" or "Company")
request to establish separate customer cl-asses and
address only how customers with on-site generation are
compensated for the energy they export to the grid.1
O. What is your response to these recommendations?
A. The parties who fil-ed rebuttal testimony raise
a number of important issues related to cost-of-service,
rate desi-gn, and compensation structure that the Company
1 Beach Rebuttaf, p. 2,11. 14-15; King Rebuttal, p. 10, 1l-.
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agrees are worthy of investigatj-on and further analysis;
however, it is not necessary to explore these issues
prior to making a decisi-on regarding separate classes for
residential and small general service customers who
instal-l on-site generation.
The fundamental disagreement in this case
appears to be related to the sequence of steps that
shoul-d be taken and the timing of those steps. The
parties are generally aligned with the notion that more
studies related to cost-of-service, rate design,
system-impact, and/or compensation structures for net
metering service are necessary prior to deciding the need
for separate rate classificationsr ds requested by the
Company in this case. Contrary to those views, the
Company bel-j-eves that it is important to first establ-ish
whether customers with on-site generation have load
characteristics that are fundamental-1y different than
fu1l requirements customers, and therefore, warrant a
separate classification for rate design purposes.
O. Vf,hy does the Company believe that establishing
separate rate cl-assifications for resj-dential and smal1
general servlce customers with on-site generation is the
appropriate fj-rst step?
A. Throughout this case the Company has presented
evidence that demonstrates that customers who install
on-site generation tend to reduce the vol-ume of energy
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TATUM, SURR REB 2
Idaho Power Company
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required from Idaho Power without a corresponding
reduction in their utilization of the electric system or
grid. The problem presented by the Company i-n thj-s case
is that the current rate desi-gn, which collects the vast
majority of servlce costs (fixed and variab1e) on a
volumetric basis, is no longer appropriate for a growing
segment of customers who are making investments in
technol-ogies that result in a reduction of the volume of
energy they would otherwise take from Idaho Power. The
rate design applied to net metering customers is outdated
and unsustainabl-e into the future.
Historically, the first step in the rate-making
process has been to establ-ish different classifications
of customers based on the time, nature, and pattern of
use.2 A cost-of-servi-ce study is then performed to
determj-ne proper assignment of costs to each of the
respective customer classes. Once the cost to serve each
class of customers is determined, the final step is to
determine the appropriate rate design for each c1ass.
The Company is recommending that this longstandj-ng
ratemaking process be applied to these cj-rcumstances.
O. Why does the Company feel it is unnecessary to
conduct the generic docket, to understand the benefits
and
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TATUM, SURR REB 3
Idaho Power Company
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2 On page 7 of Order No. 26'780, the Commission described
class differentiating characteristics j-denti-fied in fdaho State
HomebuiTders v. Washington Water Power, 107 Idaho 415, 420, 690 P.2d
350, 35s ( 1984 ) .
CSB REPORTING
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TATUM, SURR REB 3A
Idaho Power Company
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CSB REPORTING(208) 890-s198
TATUM, SURR REB 4
Idaho Power Company
costs that distributed generation interconnection brings
to the electric system, prior to a determination on rate
classifications in the current case?
A. The question at the center of this case is
whether customers with on-site generation are
fundamentally different than full requirements customers.
The Company has presented evidence that the load service
requirements and usage characteristics of residential- and
small general service customers who install on-site
generation are substantially different than that of
resj-dential and smal-I genera1 service customers without
on-site generation.
classification is not
those customers, nor
customerts excess net
system.
separate
service
The determination of customer
dependent on the cost to serve
1s it dependent on
customers with on-site generation
any benefits a
provide to theenergy exports may
O. Please summarize how the Company's current
request for separate customer cfasses rel-ates to the
Company's long-term plan for residential- and smal-1
general service customers with on-site generation.
A. The Company has concl-uded that net metering
with vol-umetric rates is not sustainable, and in light
that conclusion, has asked the Commission to establ-ish
classes for residential- and small-
of
general
and to initiateo
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a process to explore the costs ahd benefits of serving
those classes
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TATUM, SURR REB 4A
Idaho Power Company
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of customers. If the Commission determines customers
with on-site generation should be in a separate customer
class, the next step would be to investigate pricing and
compensatj-on structures for those customers based on the
cost and benefits associated with serving those
customers.
a. Does this concl-ude your testimony?
A. Yes, it does.
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TATUM, SURR REB 5
fdaho Power Company
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CSB REPORTING(208) 890-s198
TATUM
Idaho Power Company
(The following proceedings were had in
open hearj-ng. )
COMMISSIONER RAPER: And I need to get an
order going. We'11- work straj-ght across the front.
MS. GERMAINE: Madam Chair, I be1ieve that
some of the parties have agreed on somewhat of an order
for at least the first few intervenors, if f cou1d give
those to you if that's acceptable.
COMMISSIONER RAPER: Sure.
MS. GERMAINE: Abigail Germaine with the
City of Boise woul-d l-ike to cross-examine the witness
first. I believe next will be Preston Carter.
COMMTSS]ONER RAPER:
always feel
the hearing
have Abigail
free to provide these
starting. It woul-d
For the
things to
speed things
Carter as the
record,
me prior to
a1ong, so I
secondGermaine, Preston
thereattorney. Is
MR. HAMMOND:
can go third, thatrs fine,
Anybody el-se?
twice
MR. NYKIEL:
Matt Nykiel on behalf of the
I'm happy to follow or find
Madam Chair, we
if nobody has any
certainly
obj ection.
COMMISSIONER RAPER: Going once, going
Madam Chaj-rwoman, this is
Idaho Conservation Leaque.
a spot wherever iso25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
sufficient.
COMMISSIONER RAPER: Thank you, Mr.
NykleJ-. I appreciate your flexibility.
MR. PRESTON: Madam Chairwoman?
COMMISSIONER RAPER:
objection to the
through the rest
Germaine for City
MS GERMAINE: Thank you.
CROSS-EXAMINATION
BY MS. GERMAINE:
O Good morning, Mr. Tatum.
A Good morning.
O Isn't it correct that the Company states
that it is not necessary to establj-sh the difference, if
dny, in the cost of serving net metering customers before
placing them into a separate class?
A Yes, the Company has taken a position that
a cost of service study is not necessary to inform
whether or not we should establish separate classes for
customers with on-site generation.
O Thank you, and yet, in your testj-mony, you
reference the case of fdaho State Homebui-lders versus
order and then I
of the attorneys.
of Boise.
Okay, is there any
will work my way
Thank you. Ms.
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Idaho Power Company
Washington Water Power, which actually specifically 11sts
the cost of service as a factor that the Commission
should consider in determini-ng whether a separate
classification of customers is necessary; isn't that
correct?
A The information that you describe in terms
of cost of service studies certainly should inform the
rate design ultimately and the costs assigned to that new
class. We're suggesting a stepped-in process where each
of those factors that you described can be considered
before different rates are applled to the new cIass, but
does not need to be, the cost of service study does not
need to be, completed in order to inform whether or not
customers with on-site generation have different usage
characteristics that when viewed in liqht of the
residential rate design
believe
that's applied to them is not
appropriate. I
decision without a cost of service study, yes.
tl Thank you, Mr. Tatum, but back to my
far as what the Commission may consider inquestion, ds
the Commission can make that
classifying a new class
and one of the factors
that
of customers, it may
they shoul-d consider,
correct?
consider,
is a cost of
service study; is
A No.They may consider it.
they don't need to, so I woul-d not agree
I'm saying
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Idaho Power Company
"should" in your statement.
O The Company emphasizes that it's the load
and usage characteristics that distinguj-sh this net
metering customer from non-net metering customers and
that the cost of service does not need to be considered
in determining whether they should be separated; is that
correct?
A Thatfs correct, yeah.
O Yet, isn't it true that the Company also
clalms that the usage characteristics of these on-site
customers with solar generation require a separate rate
structure in order to provide a reasonabl-e opportunity to
recover the cost of serving those customers; is that
correct?
A That is correct. Eventually I think that
would be a better policy than what exists today.
O So, then, would you agree that it is
actually necessary to establish the difference in cost or
benefit of these customers prior to putting them in a
separate cl-ass?
A I've answered that question, Do.
MS. GERMAINE: Thank you. I have no
further questions.
COMMISSIONER RAPER:Mr. Carter, could you
be clear because representations switched midstream in25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
this case, could you be clear for the record just this
one time which parties it is that you're representing and
wil-I you be questioning them aI1 simul-taneously based on
the position of the parties?
MR. CARTER:Yes; so I rm currently
Energy Association and AuricCleanrepresenting the Idaho
Sol-ar and my questions and representations wil-l- be made
on both of their behal-f s at once.
COMMISSIONER RAPER: Thank you. Please go
ahead.
MR. CARTER: This is like Wakimo.
CROSS_EXAMINAT]ON
BY MR. CARTER:
O Good morning, Mr. Tatum.
A Good morning.
O Like I said, I'm Preston Carter. I
represent the Idaho Clean Energy Association and Auric
Solar. Just to be cIear, in this case Idaho Power has
made several requests; is that correct?
A That's correct.
O And one of those requests is that the
Commission create a separate rate class for residential-
and small- general service customers wj-th on-sj-teo25
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CSB REPORTING(208) 890-s198
TATUM (X)
fdaho Power Company
generation; correct?
A Yes.
O Just to be cIear, my examination this
morning is going to address sole1y that request, not
Schedule 72, not the sma::t inverters.
A Okay.
O So you filed three rounds of testimony in
this case; correct?
A That's correct.
O The direct, the rebuttal, and the
surrebuttal?
A Yes.
O And do you have copies of those with
you?
Ido
Do you have a copy of the application with
you?
A I don't have a copy of the application,
no.
Do you mind if I provide one to you?
That sounds great.
A
o
o
A
O okay.
(Mr. Carter approached the
O BY MR. CARTER: Okay, lrd
trying to understand what in your opinion
witness. )
Iike to start by
is relevant too25
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Tdaho Power Company
the Commission's decision to create a separate rate
c1ass, so let's start with your rebuttal testimony. Can
you open to page L9?
A I'm there.
O Can you read lines 6 through 15?
A Yes. "What do you believe is the most
important j-ssue at the center of this case?
I be1ieve that there is one relatively
l-imited, but important, policy j-ssue to resofve in this
case, whJ-ch is to answer the question: 'Do the different
load service requirements and usage characteristics of
residential and small general service customers who
install- on-site generation justify a separate and unique
rate structure to provide a reasonabl-e opportunity to
recover the cost of serving those customers? "'
0 Thank
surrebuttal, page 1,
then continuing on to
A Sure.
you turn to your
Can you read line 2L
page to line 5?
you. Can
l-ine 27?
the next
and
In the context of what the other
pagelthrough5on
rebuttal- testimony
related to cost of
parties had recommended in their testimony, lines 2L on
2, I say, "The parties who fil-ed
a number of important issues
rate design, and compensation
agrees are worthy of
page
raise
service,
structure that the Company
investigation and further analysis,' however, it is not25
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Idaho Power Company
necessary to explore these issues prior to making a
decision regardj-ng separate cl-asses for residential and
smaI1 general service customers who instal-l- on-site
generation. "
O Okay; so bringj-ng this together, is it
your testimony that the Commission should create a
separate rate cl-ass based soIe1y on l-oad service
requirements and usage characteristics of net metering
customers ?
A In light of
to those customer classes,
the rate design and their
present a problem that the
Commission' s considerati-on
usage
the rate design thatrs applied
yes. It's the combination of
l-oad characteristics that
Company is raising for the
a Okay.
A -- but at the heart of the issue is the
characterj-stics, but it's the appllcation of those
usage characteristics to the rate
o
littl-e bit,
Commission
design.
drill down on that aOkay; so I guess
the distinction that you're
to draw is based on the l-oad
requirements and usage characteristics
customersi correct?
A That is the information
to
asking the
service
of net metering
that we're
presenting for their consideration, yes.25
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0 And so you're asking the Commission to
make a separate cfass or draw a dj-stinction between net
metering and non-net metering customers based on the l-oad
service requirements and usage characteristics;
correct?
A Correct, wlthout changing the rates that
are applicable, from what are currentl-y applicable,
because the Company is suggesting that other steps are
necessary before making that decision.
O Correct.
A Yes.
O So the distinction and the new class
shoul-d be drawn first and then at some later time the
rate design and the rate should be decided; is that
right?
A That I s our recommendation, yes.
O And is it your testimony that the cost of
service, the rate design, and compensation structure are
not relevant to the Commi-ssi-on's decision to create a
separate rate cl-ass?
A I think it does inform to some extent the
problem that exists with the current policy of net energy
metering. It doesn't at this point werre not looking
to implement a complete sol-ution as part of this case.
We're looking to take the first step and we believe that
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Idaho Power Company
first step is adequately or sufficiently informed by the
usage characteristics as applied to the rate design that
they I re currentl-y sub j ect to.
O Okay; so you're saying that these so
let me be clear. In your surrebuttal, you say the
parties raise important issues rel-ated to cost of
service, rate design, and compensation structure, but
those j-t's not necessary to explore those issues
before the Commission creates a new class, and so is it
your testimony that information regarding the cost of
service, rate design, and compensation structure is not
rel-evant to the Commission's decision on whether to
create a separate rate class?
A I think it can be considered, but it's not
necessary, no. I
presented in the
different, really
think the information that we've
form of usage characteristics
drastically different, than
thi-s will- be the last
that are
the average
of the
opin j-on, the
rate cl-ass
residential customer provides, in the context
current rate design provides, sufficient evidence that
the rate design applied to those usage characteristics
does not does not work in terms of the intent of
rates, which is to collect the cost to serve customers.
O Okay; so the, and
time I ask this, the distinction
Commi-ssion can and should create
or in your
a separate25
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TATUM (X)
Idaho Power Company
based soleIy on the l-oad and usage characterlstics of net
meteri-ng customers?
A As they compare to the general residentj-a1
cl-ass, correct .
O Okay. Now, can you turn to page 7 of the
application?
A Yes, I'm there.
O Paragraph 12, does paragraph 1,2 identify
factors that the Idaho Supreme Court has considered
relevant to the Commission's decision to distinguish
between customers based on rates?
A Yes, I see that.
O And can you identify those factors for
us?
A Cost of service, quantity of electricity
used, differences in conditions of service or the time,
nature, and pattern
O And
of use.
then going on two lines l-ater.
A Homebuilders court al-so found that the
Commission may consider other criteria for establishing
rates, including energy conservation, optimum use, and
resource a1l-ocation.
0 Thank you. Is it the Company's position
that any difference in l-oad and usage characteristics for
net metering customers fal-1s within the time, nature, and25
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pattern of use factor identified by the Idaho Supreme
Court?
A I think it fal1s within that nature and
pattern of use, y€s.
O Thank you. In your opinion, is the cost
of serving net metering customers compared to other
customers in the R&SGS class relevant to the Commissionrs
decision to create a separate rate cl-ass?
A No.
O In your opinion, is the rate design for
the proposed new customer class relevant to the
Commission's decision to create a separate rate class?
A The rate design is rror we're not asking
to make that decislon today.
0 In your opinion, is the appropriate rate
for imports, that is, energy down.l-oaded from the grid by
net metering customers, relevant to the Commission's
decj-sion to create a separate rate class?
A No.
0 In your opinion, is the rate for exports,
that is, the cost excuse me, the rate for energy
uploaded to the grid by net metering customers, relevant
to the Commission's decision to create a separate rate
clas s ?
A No. As I saj-d, the rate design currently
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Idaho Power Company
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applied to net meterlng, net metering customers in
association with thej-r associated with their usage
characteristics should be considered. What new rates
might be established, if I can just clarify, the new
rates are not necessary for consideratlon at this time.
O In your opinion, is the quantity of
electricity used by an average net metering customer
compared to an average R&SGS customer relevant to the
Commission's decision to create a separate rate class?
A I think it would be helpful information to
consider, but the it's more the netting effect that is
currentl-y applicable to net metering customers that's
more relevant. Netting at the retail rate is the issue
that we're presenti-ng as a problem. We presented it in
the form of the usage characteristic charts that Mr.
Ange11 and Mr. Faruquj- or Dr. Faruqui have presented.
O So is it your opinion that a comparison of
the quantity of energy used by net metering customers
compared to the quantity of el-ectricity used by non-net
metering customers is not re1evant to the decision to
make a separate rate class?
A Is it the quantity -- the gross quantity
of energy or net quantity, which are you -- because those
are important distinctions, I think.
O WelI, I guess which one of those if one
CSB REPORTING(208) 890-s198
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Idaho Power Company
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Idaho Power Company
of those is relevant in your opinion, can you teII us
which?
A The net is what's rel-evant today, because
that's what's measured.
O But the gross quantity
non-net metering
in your testimony
create a separate
customers versus net
is not relevant to
of energy used by
metering customers
the decision to
A WeII, it may be rel-evant, but it's not
measured. We don't have that information availabl-e to
us. I think it might be helpful to lnform the extent to
which a net metering customer util-j-zes the Company's
system; however, it's not measured. Ir'le measure on a net
basis, not on a gross consumption basis, so I think it's
important to consider; however, it would be an important
consideration if we had that inf ormati-on availabl-e. We
don't measure it.
0 So if we don't have the information, it
better not be relevant; right?
A WelI,
measured. It's not
the past policy has
been measurement of
rate class?
it's not avai-labIe. It' s not
available because the past practice,
been net, net roetering. It hasn't
gross consumption and measurement of
been a netting, so that's what wegross
have
export. It's
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numbers are important at this time to consider.
O A11 right, in your opinj-on, is it rel-evant
for the or I guess are any benefits provided by
distributed generation rel-evant to the Commissionrs
decision to create a separate rate class?
A No.
O In your opinion, is it relevant for the
Commission to compare any cost shift caused by net
metering customers to other lntracl-ass cost shifts within
the R&SGS customer class?
A I think itrs important to for the
Commission to understand the potential for cost shift
that exj-sts with the current rate desi-gn applied to net
metering. I don't think the specific quantification is
necessary. I think enough information can be obtained
through comparing the usage characteristics of net
metering customers to the rate design to understand that
that policy is no longer the approach that should be
taken golng forward because of the potential for cost
shift under that approach, so the quantification I don't
think is necessary. I think the understanding of the
flaws that exj-st in the rate design that is applied to
the usage characteri.stics, I think, 1s the most important
consideration there.
O Okay; so in your opinion, i-s it rel-evant
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Idaho Power Company
for the Commission to compare any cost shj-ft caused by
net metering customers to any other intraclass cost
shifting within the R&SGS class?
A I think it would be useful i-nformation to
inform the Commission; however, I don't think it's
necessary to do that comparison to make the decision that
we've asked the Commission to make.
O Has the Company provided a comparison of
any cost shift caused by net metering customers to other
intraclass cost shifts in the R&SGS customer class?
A No. No, we only
customers within the residenti-al
have one segment of
cl-ass that
their own energy
Company. Thatrs
That's the cl-ass
establ-ished.
OSo
on-site and export energy
the distinction that we're
Company is
cost shifts
not denying that there
within the R&SGS class;
generate
to the
making.
of customers that we're suggesting be
the
are other intracl-ass
correct?
A No.
O Just that those need not be compared to
the cost shift caused by net metering customers in order
to create a separate cusLomer class?
A I'm not saying that either. The Company
has a long history of making recommendations with regardo25
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Idaho Power Company
to rate design and
with the intent of
establ-ishment of classes partialJ-y
reducing intraclass subsidies. Having
pricing that's more reflective of the cost to serve
customers does achieve that. I thj-nk unbundling of the
residential rate would achieve some of that, and I am not
suggesting that the Company will not make proposals to
reduce i-ntraclass subsidies or interclass subsidies for
that matter in future rate cases. We're not suggesting
any rate changes at this point, actuaIIy, for any
customer.
O So I guess bringing this back to the
record that will- be before the Commission today based on
the anticipation that the partiesr testimony will be
introduced, the Company has not presented the Commission
wlth any comparison of any cost shift created by net
metering customers to any other intraclass cost shifts;
is that right?
A Thatrs correct.
O So if such a comparison were rel-evant, the
Commission would not have sufficient informatlon to make
that determination or that comparison,' is that correct?
A The Company is not suggesting that any
other classes be established except for residentj-al-
customers and small general service customers with
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O Correct.
A That's a class of customers or a segment
of customers that has been identified separately for
decades and there's been a tracking of potential cost
shifting by this Commission, and the Company has
recommended -- or the Commission has recommended that the
Company inform the Commission with any changes with
regard to this specific segment of customers over many
years, so this is a segment of customers that has long
been identified as a potential concernr so there isn't
anything new with regard to this segmentation of t.his
class for monitoring purposes.
Werre not suggesting any changes to rates
at this poj-nt. I'd reiterate that. V'Ihat we're
suggesting is that we establj-sh, that the Commission
establish, new cl-asses and establ-ish a process where cost
of service, pricing, value of distributed generation can
be explored in a collaborative, inclusive, transparent
manner, and I think that my read of the testj-mony is that
many of the folks within this room seem to agree that
that's a good process to pursue. The Company is simply
requesting as a first step as a matter of policy that the
Commission segment those customers that were referenced
into a separate c1ass.
a Okay, pretty narrow question here. If the
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TATUM (X)
Idaho Power Company
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Commj-ssion deems it relevant to compare any cost shift
caused by net meteri-ng customers to any other intraclass
cost shifts within the R&SGS class, the Company has not
provided the data to do that comparison; is that
correct?
A That's correct.
O In your opinion, is disruption to the
rooftop solar industry relevant to the Commission's
decisj-on to create a separate rate class?
A You know, I can't speak to what the
Commj-ssion may or may not cons j-der relevant. They may
consider that relevant. I think they may consj-der it
relevant as they balance the j-mpacts to al-l- customers or
different segments of customers.
O Is it relevant in your opinion?
A I think itrs certainl-y something that
needs to be considered and balanced, y€s.
0 Mr. Tatum, if I may, can you turn to your
rebutta1 testj-mony on page 14 to 15?
A Woul-d you repeat that, please?
O Sure, rebuttal testimony, page 14, line
20, through 15, line 4. Can you read that, please?
A Rebuttal- page 15, l-ine
O Rebuttal page t4
A Page 1.4.
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Idaho Power Company
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TATUM (X)
Idaho Power Company
line 20.
Rebuttal page !4, l-ine 20?
That's correct.
A Starting with the middle of the
"Intervenors have provided no"?
O That's correct.
A "Intervenors have provided no
justification for why rooftop solar industry
considerations should factor into this customer
classification proceeding. "
O Go on.
A "The Commj-ssj-on should reject these
arguments, as they clearJ-y assign a higher priority for
the financial wel-l-being of an individual industry over
the pursuit of just and reasonable rates for Idaho
Powerts customers."
O So let's clarify your testimony. Here,
isn't it true that you have said, "Intervenors have
provided no justification for why rooftop solar industry
considerati-ons shoul.d factor into this customer
classification proceeding"? Is j-t your testimony today
that any disruption to the rooftop solar industry should
or should not be considered by the Commissj-on in creating
a separate customer class?
A I think the poi-nt that I was trying to
o
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make in my testimony is that it shoul-dn't be assigned a
higher priority by the Commlssion than faj-r, just, and
reasonable rates for all customers.
O So your testimony is that it is relevant,
but shouldn't be assigned much weight; is that correct?
A WeIl-, again, f can't speak to what the
Commissioners may or may not consider relevant. My
recoflrmendation is that it not be placed as a higher
priority than fair, just, and reasonable rates.
O And the Company is not proposing any rate
changes at this time; correct?
A That's correct.
O Okay, in your opinion, is a separate rate
class needed to study net metering customers?
A Itrs not needed, no. I'd like to clarify
that. What the Company has proposed j-s the Commission or
has asked the Commission to make a poJ-icy decj-sion that
may inform what types of studies may be conducted. If
the decision is that a separate classj-fication for
customers isn't needed or warranted and that net metering
customers or customers with on-sj-te generation should
remain within the general body of residential customer
class going forward, that wil-l inform a different
analysis for the Company with regard to cost of service
and rate design, and so it's not necessary to study, but
CSB REPORTING(208) 890-5198
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Idaho Power Company
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TATUM (X)
Idaho Power Company
it's certainly necessary to inform the direction of the
studies that woul-d be conducted by the Company.
O Tf I may to kind of restate that, I
suppose, is it the Company's posj-tion that it currently
has the ability to study net metering customers without
creating a separate customer class; is that correct?
A Just generally study? To what end? For
what objective?
MR. CARTER: Okay, I have a l-itt1e bit of
an issue.
testimony
question.
not I'm not introducing it as an exhibit.
provide the wj-tness a copy of Exhibit No. 101
understanding that it's anticipated that that
will be introduced at a later time?
COMMISSIONER RAPER: Sure.
I have Exhibit No. 101 to Dr. Morrison's
that I think would be helpful in exploring that
I don't have all the extra copi-es since itrs
May I
with the
exhibit
THE WITNESS: I have it in front of me
O BY MR. CARTER: Oh, you do have it?
A Uh-huh.
O Oh, perfect; so is it true that request
No. 3 of the Commj-ssion Staff was on page 9 of its
application, the Company states that "establ-ishing
separate customer classes now wil-1 position the Company
to study this segment of customers, provj-ding the data25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
necessary to
util-izes the
understand how this customer segment
system. tt
be able to gather that
these customers? Can
third paragraph of the
Company is currently"?
MS. NORDSTROM: I thinK
question already posed.
COMMISSIONER RAPER: I
What information will- the Company
is not currentl-y available for
you read the, I guess it's the,
Companyrs response startingr "The
there was a
heard
and I didnrt hear an answer from the witness
a question
either. Did
you pose
from the
a question to the witness
document?
MR. CARTER: I was
read from the document to set up
will-ask the question first. f
COMMISSIONER
or were you reading
asking the wj-tness to
this questi-on. f can
ask the question first.
Okay, we can haveRAPER:
Connj-e read somethi-ng back, too.
MR. CARTER: That's okay.
O BY MR. CARTER: So the question is, is
creating a separate customer class necessary to provide
the Company data to understand how thj-s customer segment
utilizes the system?
A I think a definitj-on of the segment would
be heIpful. We have
0 Would it be helpful in giving the Company25
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(208 ) 890-s198
TATUM (X)
Idaho Power Company
the motivation to study or actually providing the Company
the ability to
A
data. We have
customer. We study each
Iooking for
study?
Wel-l-, the Company has its own customer
customer data for each individual-
have. What we're
individual- customer that we
l_s a segmentation
Commission to provide a
that data.
l_s
can
definition that we've asked the
decision on to inform who and real1y what to study going
forward.
AIso, werve suggested a process where we
would talk with our customers and other stakeholders
about what that study or what those studies might look
like, so like I said earlier, j-t's rea11y a policy
decision that we're looking for to provide direction on
where the study efforts should occur.
To answer your question directly, again,
we have our customer data. We can study indivi-dual-
customers
aggregate
different
down to the individual- customer level- and can
from that individual- customer leve1 up to
segments. We have
0 So the Company currently able to gather
to study net metering
separate customer class;
the data that would be necessary
customers without creation of a
correct?
A Again, we have all of our customer data.25
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CSB REPORTING
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TATUM (X)
Idaho Power Company
It's the segmentation and the definition of the segment
that is important in determining what should be
studied.
O Okay, just
think there's two separate
I want to separate this. I
concepts. Creating a separate
for anycustomer class isn't necessary to obtain the data
study; correct?
A Correct.
O Separating in the Company's opinion,
creating a separate class might change what data the
Company looks dt, but doesn't it isn't necessary to
obtain the data?
A The Company has in its possession
individual customer data, including customers who have
on-site generation.
O Okay; so you've testified that the
distinction you're asking the Commission to draw is based
on the load and usage characteristics of net metering
customers r' correct?
A Correct.
O Would you agree ttrat if the Commission
determines there is no material- difference between the
Ioad and usage characteristic-s of net metering customers
and non-net metering customers that there would be no
reason to create a separate customer cl-ass?25
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CSB REPORT]NG(208) 890-s1_98
TATUM (X)
Idaho Power Company
A That hypothetical_, you're asking me
whether or not I agree with j-t or not?
O Yes.
A Wel-I, the Company has presented that they
are different.
O Correct, f understand that.
A If they werenrt, we would not have made
the request that we made.
a So the key questj-on presented in this case
is, is the load and usage characterlstics are the load
and usage characteristics of net metering customers
materially different from those of non-net metering
customersi correct?
A
posed and I
demonstrate
That is a central question that we've
think we've provided sufficient evidence to
that
OSo
they
if
are.
the Commission agrees with the
Company's position and the Company's position is it
shoul-d create a separate customer cl-ass, if the
the CommissionCommission does not agree
determines that there is
and if
no materi-al distinction of the
load and usage characteristics, should the Commission
then not establish a separate customer class?
A There would be no reason to at that
point.o 25
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O Okay; so we've establ-ished that the
Company would like to draw a distinction between net
metering and non-net metering customers based on their
time, nature, and pattern of use; in other wordsr ds
demonstrated by their load and usage characteristics;
correct?
A Thatrs correct.
O Now, what is the problem the Company is
trying to solve by asking the Commission to draw that
distinction? And if it wou1d help, your surrebuttal page
3, line 3.
A It was surrebuttal-
a Page 3, line 3, says I guess l-ine 2,
"The problem presented. "
A "The problem presented by the Company in
this case j-s that the current rate desi-gn, which collects
the vast majority of service costs (fixed and variable)
on a volumetric basis, is no longer appropriate for a
growing segment of customers who are making investments
in technologies that resul-t in a reductj-on of the volume
of energy they would otherwise take from Tdaho Power.
The rate design applied to net metering customers is
outdated and unsustainable into the future."
O So is it' correct to say you're asking the
Commission Lo draw a distinction based on load and usage
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Idaho Power Company
characteristics to sol,ve a problem based on investments
in a reduction of the volumein technologies that
of energy they would
A Yes,
that also have those
Power's system.
A Sois there an incongruity between the
distinction you've asked the Commission to draw and the
problem you've asked the Commission to address?
A No,
Are
I don't believe so
result
otherwise take from Idaho Power?
and I would add to that technologies
customers exporting energy to Idaho
there investments in technologies that
of energy that arenrt
O
result i-n a reduction of the vol-ume
net metering technologies?
A Well-, the reduction in energy because of
generation on-s j-te, no.
0 So I guess going back to your testimony,
the problem presented by the Company that you've
identlfied here is making investments in technologies
that result in a reduction of the volume of energy they
woul-d otherwise take from Idaho Porver. Is it. correct
that there are j-nvestments in technologies other than net
metering -- excuse me, than distributed generation that
resul-t in a reduction of the volume of energy that
customers would otherwise take from Idaho Power?
A Yes, but in a very different way.25
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Idaho Power Company
Certainly, this these statements within my testimony
have to be taken in context within the broader issues
presented in this case. The Company has presented
customers with on-site generation as having a two-way
relationship with the grid, with being producers of
energy on-site. That's very much different than energy
efficiency -- wel-I, MS. Aschenbrenner, Dr. Earuqui, and I
believe Mr. Angell al-I address those differences in their
test j-mony.
Commission
O Rlght, and so
to make is based
the distinction you want the
on the l-oad and usage
yet the
reduce the
from Idaho
characteristics of net meterj-ng customers,
problem of investing in technologies that
vol-ume that customers would otherwise take
Power extends beyond net metering customers; correct?
A In that very narrow description that you
gave, yeS, but that's not what we presented.
O Wel-l, that's the description you gave.
A In the context of this is one paragraph of
dozens of pages of testimony that also describe the
problem in the context of the two-way nature of this
relationship, so I think you have to view it within that
context. It is that on-site generation. Itrs the title
of our case that we've submitted that i-s the i-ssue. It
so happens that the netting effect. that's applicable too25
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
fdaho Power Company
net metering customers has the effect of showing reduced
consumption on a net basis where consumption on a gross
basis isn't measured, and so we have usage of the system
that is masked by this netting approach of generation and
consumption. Thatrs some additional detail and context
for this particular statement.
O Can you turn to the application on page 5?
Will you read the last sentence of paragraph 6?
A Last sentence on the application,
paragraph 7 --
O Excuse me.
A -- page 5, paragraph 7?
O Page 5, paragraph 6, the l-ast sentence
there.
A
O
A
Okay, sorry about that.
That's okay.
"Eor this type of rate design, recovery of
from an individual customer declines with anyfixed costs
reduct j-on in net energy usage. "
O So any reduction
I I d emphaslze "neL. "
in net energy usage
whether thatdecreases the recovery of fixed costs,
decrease is from an investment in net metering
correct?
technology
net usage for anyone
or in non-net
A
other than a
metering technology;
Wel-l-, we don't have
net metering custom-er.o 25
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CSB REPORTING
(208 ) 890-5198
TATUM (X)
Idaho Power Company
customer decreases the
use, that decreases the
will recover from that
conceptually, if there's no
same as the grossi
not at al-I.
your testimony that whenever a
volume of energy that they would
. amount of fixed costs Idaho Power
customer?
Under the vol-umetric rate design, a
customer would reduce
correct, because
a fixed cost
volumes charged to the
to recover those costs,
that vo]umetric rate is
So the problem the
the reduction
Company has identified
O We1I,
the net
I guess
is theexports, then
correct?
A
o
No, oo,
So is it
A
decrease in
our ability
embedded in
component.
o
is associated with in volume that a
customer would otherwj-se take from Idaho Power;
correct?
A Absent a correct.
O Yet,
to draw
the
netting effect,
distinction that
Commission is based on the usage
of net metering customers?
A That's correct.
O Vfould you agree
Company has identified extends
Company has proposed?
that the problem the
beyond the class the
you've asked the
characteri sti-cs
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Idaho Power Company
A WeI1,
classes. I think the
We have net metering
thj-nk the problem is
because there is l-ess
energy rates in those
different rate
we've proposed a change to two
problem exists in other cl-asses.
for other servi-ce schedul-es. I
l-ess severe in those classes,
fixed cost recovery embedded in the
other cl-asses, and we have a
that j-ncl-udes higher f ixed charges.
for those customer cl-asses. ThoseWe have demand
design
charges
customer classes cannot offset their demand charges,
because there's a two-meter setup for those customers,
and so the Company's ability to recover its fixed costs
for those classes under net metering as it exists today
is much, much greater than what exists for the two
classes that we've identified, residential and smal1
general service customers classes, which on average have
95 percent of our cost recovery through a volumetric
rate.
O Yeah, f'm sorry, I asked a bad question.
Just looking at the R&SGS class, within that classr we
have net metering customers and non-net metering
customers; correct?
A f think the acronym that
classes, residential- and smal-I
you used is two
generalseparate
service.
O Understood; so within those two classes,25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
there are net metering customers and non-net metering
customersi correct?
A Within that class there are, yes,
currently.
O So the problem that the Company has
the decrease in recovery of fixedidentified, which is
costs caused by the
consumption, applies
decreased volume of energy
to investments in technology made by
net metering customers and by non-net meterlng customers,'
correct?
A No, you left off an important distinction
and that is net energy. That j-s reaIly the issue here
that we've been discussing and it's net energy. We
measure on a net basis, on a net monthly basis, and so as
the customer is consuming energy and using the grid
throughout the month, if they offset with their own
energy an equal amount of energy, they woul-d pay only a
$5.00 service charge even though they used the grid
throughout the month, but the netting that we have
currently applicable to this type of l-oad service is what
we've identified as the problem, so it's net energy. You
didn't include net energy in you:: description, so I canrt
agree with you on chat.
O So I guess we can use an example here. If
a customer invests in technology that decreases the25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
volume of energy they use for their home, does that
reduce the amount of fixed costs Idaho Power recovers
from that customer?
A Yes.
a If a customer installs a rooftop solar
insta.Ilation and uses a portion of that generation to
offset their energy consumptj-on, that also reduces the
fixed cost that Idaho Power collects from that customer;
correct?
A That's correct, and you're looking at one
side
O Mr. Tatum, woul-d you agree that the
problem of reducing energy consumption and the associated
reduction 1n recovery of fixed costs applies to both net
metering and non-net metering customers?
A ft applies, but it applies differently
because of the netting approach that is used for net
metering. When a customer can I clarify?
O Yes.
A Okay, a customer who lnstal1s an energy
efficiency measure and uses
of their energy consumption
For a customer who instal-l.s
Iess energy, the measurement
is accurate for that month.
on-site generation at their
netted, is net of thatconsumptj-on is
so the actual-utilization of the system is
home, thej-r
generation,25
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Idaho Power Company
masked by the netting
important difference
energy and using less
and so there's, I
between using less
think, a very
and -- using fess
O And
that you're asking
You're asking the
energy on a net basis.
that relates to the distinctlon
Commission to drawi correct?
It's not net of any other effect.
The netting is the issue.
associated or, excuse me,
any costs associated with
grid by net metering
SO
the
Commi-ssion to draw a distincti-on based
on net metering customers' Ioad profiles, yet the problem
in reducing the volume of consumption applies to both net
metering and non-net metering customers; correct?
A The reduction in volumes reduces revenue,
correct. The reduction in consumptlon wlthout netting is
l-ower utilization of the system. With netting, it coul-d
be the same utilization of the system before the, the
Idaho Power system before the, on-site generation system
was installed, yet the nettj-ng shows j-n a measurement
that there was it cou]d show there was no uti]ization
when there actually was. With the energy efficiency
actual utilization of ourexample that you're
system is measured.
giving, the
It's the actual- measurement.
O Has the Company
identified j-n this proceeding
the bi-directional use of the
customers?
A Ms. Aschenbrenner references a study thato25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
was prepared that looks at the cost of serving net
meterj-ng customers.
O And the Commission Staff has submj-tted
testimony on that question as
Yes, I believe
And Commission
well; correct?
so.
Staff concluded that theo
cost of serving
lower than the
A
net metering customers
cost of serving non-net
customers?
A I believe Staff was referencing the
Company's own analysis that y€s, I think that is
absolutely correct. What it didn't cover was that while
it was, you know, 20 -- what was the number that you
cited, 24?
O f believe it was 26 percent.
A Twenty-six percent lower cost to serve,
but that same study showed that t.he Company would recover
approximately 70 percent less revenue, so while the cost
was shown to be less by 24 percent, the revenue was less
by 70 percent, creating a shortfall- that the point of the
analysis that was conducted was to quantify or estimate a
level of cost shift that would occur under the current
policy of net metering. That was a bit of informati-on
that was not included in that particular porti-on of
Staff's testimony.
was 26 percent
metering
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
3, l-ine 11 through 13? Can you read
"HistoricalIy" ?
A "Historlcally, the first step in the
ratemaking process has been to establish different
classificatlons of customers based on the time,
A cost of service study isand pattern of use.
O Okay, can you turn to your surrebuttal- at
that starting with
nature,
then
performed to determine proper assignment of costs to each
of the respecti-ve customer classes. "
O Okay; so your testimony provides a
citation to one Order of the Commission; correct?
A That's correct.
O rs j-t
is an example of what
of
testimony that Order No. 26180
describe as the historic
Commission?
you
your
you
theratemaking process
A Itrs an example of when those two steps
were considered, yes.
O So is it your testimony that in Order
26780, the Commission established a different
classification of customers based on the time, nature,
and pattern of use?
A No, I wouldn't get to that level- of
detail, ro.
O Do you have sitting there today, do
have any other examples of what you describe as the25
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Idaho Power Company
historic ratemaking practice of the Commission?
A Yeah, frm not seeing there where I said
it's the hj-storic practice of the Commission. I was
describing the ratemaking practice, whj-ch I've applied
personally over a number of years.
O So I guess I'm confused by your answer.
Is it your testimony that this Commission has
historically first established a different classification
based on the time, nature, and pattern of use?
A Yeah, my testimony is that is my view of
the process that has been applied historically, y€sr that
the Company prepares that information.
O Can you provide me an example of when the
Commissj-on has first made a separate classification based
on the time, nature, and pattern of a customer's use ox,
excuse me, a class of customers t use?
A We've established customer classes or
segments of customers within the residential cJ-ass,
actually, without a cost
time-of-day rates and a
was establ-ished a number
of service study for our
critical peak pricing rate that
of years ago. Off the top of my
head, those are a couple of
O But no example of
class based
the Commission creating
a separate customer
nature, and pattern
soleJ-y on the time,
of use?25
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CSB REPORTING(208) 890-s198
TArUM (X)
Idaho Power Company
A Yeah, I canrt say that it hasn't occurred,
but off the top of my head, nothing is coming to mind.
O Do you have any examples of when the
Commission has created a separate customer class without
changing rate design and then years later created a new
rate and a new rate design?
A Nothing is coming to mind, no.
O And you didn't cite any in your testimony;
correct?
A No, I wou1dnrt f f m not suggesting that
that has to be a prerequisite for doing it today.
O Do you have any examples of cases in which
the Commission created a separate customer cl-ass where
the proposed new class is already identified and the
Company al-ready has the data required to study that new
proposed class?
A Off the top of my head, you're asking me
to do regulatory research while I'm on the stand. I
certainly can't come up with examples off the top of my
head, but it doesn't suggest that the Company's request
in this case is not reasonable and not supported by
adequate data.
O Viell, you tescified that "The Company is
reconrmending that this longstanding ratemaking process be
applied to these circumstancesr" and I wasnrt able to25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
find examples. I'm asking if you
A Well, those are the
Werre suggesting to take one step
basis
Commission in
had any with you
steps that are
on an individual
today.
taken.
o
A
o
Right.
now.
And you don't have an example of when the
the past has taken that step separately
from the other steps; correct?
A I don't have an
don't know whether one exists
don't have one off the top of :
MS. NORDSTROM:
further questions
has been asked and
in this line of inquiry.
answered. The witness has testified
example for you today.
I certainly
r
or not, but
my head.
I 'm go j-ng object to any
The question
to
that this was a statement about ratemaking generalJ-y and
the Company's practices specifically and I think that
this goes well beyond the scope of the inquiry here.
MR. CARTER: f think the question has been
answered. I can move on.
COMMISSIONER RAPER: Thank you, Mr.
Carter.
O BY MR. CARTER: AII right; so the Company
is asking the
changes to the
Commlssion to create a new class without
rate structure and the rates at this time;25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
correct?
A
o
rate structure
correct?
A
point is that
is warranted;
That's correct.
And the Company intends to
and a new rate at sometime
propose a new
in the future;
I think the Company's position at this
it appears that a different rate structure
however, before making a decision on that
and landing on any specific recommendation, we'd like to
continue to work with our Commission Staff, other
interested parties to determine what studies may be
necessary, what that rate design might l-ook like, what a
compensation structure should look like. I think that's
the process that the Company has proposed.
O How long will it be until- the Company
proposes a new rate structure and new rates for their
proposed separatb class?
A I don't know the answer to that.
O Coul-d it be one year?
A f don't know.
O Could it be 10 years?
A As I said, the Company is hoping to work
with other parties that wil-l- contribute to that timeline.
Itrs not completely driven by the Company at this point.
Werre proposing a process and the Commission, I believe25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
in the past,been that gradualism has
been favored We're proposing a
process that sort of embraces that approach and we're
proposing the first step in
my impression has
by the Commission.
O So during the
Wel-l-, the Commission
cl-ass today; correct?
Right, but rates can
can make recommendations
that process.
period of tj-me SO
hasn't created a
I guess
thisif the Commission creates a separate rate cl-ass in
proceeding, during the period of time between the
creation of that class and deciding the rate structure
and the rates for that cIass, the members of that class
and potential members of that class will know that a
change is coming eventually, but wj-Il not know what that
change is; correct?
A Thatrs correct, the same status that they
have today.
o
separate rate
A
The Company
any time.
o
change at
to change
any time.
rates at
The Company can try to change rates at any
time; correct?
now. We're
A The Company is not trying to change rates
The Company can
We're proposing a process under which
o
A25
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rates can be evaluated for this specj-f i-c cl-ass. Yeah, it
is the same it's the same uncertainty that exists
today, perhaps I would argue more certainty, because
there's at l-east the beginning of a process that would be
envisioned to lead to some end.
O So it's your testimony that the same
amount of uncertainty applies to net metering customers
whether they are in the R&SGS cl-ass with everyone else
and if the Commission separates them j-nto a separate rate
class without indicating what the new rate structure and
the new rate design will be?
A It's the same uncertainty that exists
today with rates. Rates can change at any time.
O Is it your testimony or is the Company
asking the Commission to create a separate rate class as
the fj-rst step in modernizing rate design?
A It I s my testimony that modernization of
the rate design is necessary, yes. I believe it should
happen; however, prior to making any decisions on what
that is and when it would be implemented, we proposed a
process to fo1low.
0 So the Company has characterized creatj-on
of a separate class as the first step in modernizing its
rate structurei correct?
A Can you point me to exactly where you're
CSB REPORTING
(208 ) 890-sr_e8
TATUM (X)
Idaho Power Company
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
fdaho Power Company
finding that?
0 Sure, application, page 9, paragraph 15.
A Yes, "The Company bel-j-eves that
establishing new customer cl-asses for resj-dential and
small general service customers with on-site generation
is a first step toward modernizlng its pricing structure
and addressing the cost shift between net metering
customers and standard service customers. "
O So if the Commission creates a separate
cl-ass in this case, the Commission will- have taken a
first step
customers;
A
policy determination
O Isit
taking a first step
will inform the next
in making a
steps.
to think
it's more
j-n modernizing rate design as to net metering
correct?
It will be
that
reasonabl-e for a customer
that if the Commi-ssion has taken a first step,
1ike1y to take a second step?
A I donrt know. I don't know what a
customer may think or not. As I mentloned, rates can
change, actua11y, with much l-ess j-nformation ahead of
time than what woul-d be available under what the Company
is proposing, and at the end of the process, it doesn't
guarantee that rates rvould be changed as part of the
process or perhaps it's phased in over a number of years.
Irm not making any estimates as to what woul-d play out,25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
but it's the same it's the same uncertainty that would
exj-st if the Company did nothing in this case and just
proposed a
Customers
change to rates as part of a future rate case.
in this case will at least see that there's a
process underway.
O But
customers wil-1 not
or the eventual
A
o
unknown period
A
o
rate design wil-l- be;
Just as they do today,
I thlnk that's beneficial.
while that process is underway, those
know what the eventua] rate structure
correct?
they don't today.
And t.hat status will continue for an
of time; is that correct?
That's correct.
Is there significant j-nnovation
in the field of distributed generation at this
occurr j-ng
time?
A
o
separate class
or rates will
A
o
of a class and
rates, isnrt it
deJ-ay or avoid
From what I read, yes,
Is there a possibitity
without indicating what
be wil-I stall or disrupt
I donrt know.
it appears so.
that creati,on of a
the rate structure
that innovati-on?
During the period of time between creation
imposition of the new rate structure and
possible that potential- customers wil-l-
investment until they see what the
eventual rate structure and rate will- be?
A Yourre asking me 'Lo try to understandt25
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CSB REPORT]NG(208) 890-s198
TATUM (X)
Idaho Power Company
what -- how individuals may be perceiving this based on
what information or misinformation they may receive. I
have no idea.
O But it's possible that new customers or
potential new
see what the
customers will- delay investment untj-l they
eventual rate deslgn and rate wil-l- be;
correct?
A Anything is possible, f suppose. It's
possible that they don't as well.
0 Is there testlmony -- is there proposed
testimony that customers are indeed holding off on
j-nvestment until- they determine the outcome of this case?
A Our data, the Company's data, doesn't
support that. We're seeing an increasing l-evel of
adoption of net metering service.
O Wel-l-, increasing l-evel- of adoption is
holding off;different from more potential customers
isn't that correct?
A I can only speak to the
we have available at the Company and it
that there's a
forward
information that
does not suggest
decrease or any sort of holding off on
in instal-1ing on-site generation. We'removr_ng
sti1l seeing
A Members of the solar industry have
testified that they have spoken to customers that haveo25
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CSB REPORTING(208) 890-s198
TATUM (X)
ldaho Power Company
indj-cated they are holding
case; is that correct?
A I donrt know
that's stated?
a Sure. WeI1,
introduced. I think thatrs
off until the decision in this
Can you point to me where
we can wait until that gets
probably more
suffice it to sdy, you
asked whether they are
this case; correct?
haven't spoken with
hoJ-ding off pending
efficient, but
customers and
a decision in
Me personally?
Yes.
I have not spoken to any customers that
have indicated that they're holding offr Do.
O Okay; so if the Commission creates this
new rate class for net metering customers, how many
customers would be in that class initially?
A I don't know. That hasn't been defined as
to when it would occur and how it woul-d be implemented,
so I can't answer that question.
O And what would it take to become part of
that new class?
A We1l, the Company proposed that the date
that would be established for a cutover has already
passed and so I don't know when it's going to be up to
the Commlssion to determj-ne if they decide a new class,
A
O
A
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CSB REPORTING(208) 890-s1e8
TATUM (X)
Idaho Power Company
if the Commission decides that a new class,
when it's estab.l-ished and I think when it's
is warranted,
established
and how customers transition into that class is important
thatinformation to answer, that I s needed to answer,
information.question and I donrt have that
O Sure, and I guess that could have been a
bad question. My questi-on is regardless of kind of the
cutoff day, any customer taking service, dtry new customer
service taking service, under Schedule 84 woul-d become
part of that new cIass, correct, or the new schedule? My
question is -- weII, I guess, what would j-t take for a
new customer to be in that new customer class?
A Our proposal is that a customer who
install-s on-site generation and who woul-d have otherwise
requested net metering servj-ce would no longer take
Schedule 84, but would rather be placed on the new
service schedule as of whatever date is ultimately
determined as the cutover point.
so the key is installation ofO Sure,
on-sj-te generation;
A WeII,
Idaho Power,
SUIC;
correct ?
and wanting to take service from
yes.
Correct; so it woul-dn't matter the size ofo
the on-site generation that the customer instal-1s;
correct?25
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TATUM (X)
Idaho Power Company
A The size, yes, is important. That's one
of the provisions of the service offering. There is a
size limit.
O I guess within broad -- within the limits
of the proposed schedule, a customer could instal-l-
on-site generation towards the smal-l side or towards the
large sj-de and they would become a member of this new
class; is that correct?
A I think that's correct. I think I'm
fol1owin9 you, but yes.
O So I guess if I were a customer that had a
Iarge vol-ume of consumption, I could instal-l- a small
on-site generation system and become a member of the new
cl-ass; is that correct?
A
o
Can you restate your question?
Sure; so the assumptj-on is if the
Commission creates a separate class, if f were a customer
that consumed a large volume of energy, I could become a
member of this new class by instal-l-ing a very small
on-site generation system; correct?
A You would become a part of that class by
installing any on-site generation that met the criteria
for eligibility for that serrice offering, correct.
O Correct. Doesn't that raise the
possibility of rate gaming by consumers; for example, Lf25
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CSB REPORT]NG(208) 890-s198
TATUM (X)
Idaho Power Company
a consumer woul-d benefit by higher fixed charges and
lower volumetric charges, couldn't they instal-1 a small
on-site generation if it were more economically
beneficial? In other words, couldn't they self-sel-ect to
become a member of that class?
A WelI, what we proposed at this poj-nt,
there would be no economic difference, because the rate
structure is exactly the same under the Company's
proposal,
what the
are of the service
so to answer your question, you have to know
ul-timate rate design and service requirements
schedule to know whether it would be
more economj-c or not to instal-l- on-site generation.
Right now it would be the same, So the economic decision
is the same under the Company's proposal as it is today
with no change so there isn't a gaming opportunity today.
I woul-d hope that as we work -- if we move to working
through the ultimate rate structure for a new class that
it would minimize the opportunity for any gaming that
you're describJ-ng.
O So I guess right now we don't have
suffj-cient information to analyze problems that coul-d
occur from having a different rate design and rate for a
new customer class; is that correct?
A We donrt have the inf ormat j-on f or any
future rate changes that have yet to be determined. ft'so25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
the same for any customer
their class,regardless of
1evel. There's no customer
considering an investment
regardless of their usage
of Idaho Power who knows what
the future rater j-ncreases or rate design changes may
no different than that.
Without the proposed new rate structure
exi-st. This
o
and proposed
problems that
that correct?
A
r_s
new rate, the
might arise
Commission cannot evaluate
with the new customer cl-ass;
any
is
there wouldn't
Wel-l-, there I s
be any of the
no change to
problems that
the rate, so
you described
they wou1d beuntil a new rate
able to consider
design is considered and
before adopting the new
Commission.
rate design,
"they" belng the
O I mean, isn't the whol-e point of creat j-ng
a new class today so that the Company can propose changes
to the rate design and the rate in the future?
A The Company believes that yesr a new rate
design should be pursued. The Company also believes rate
design changes
as well. We I re
are necessary for other customer cfasses
not addressing those as part of this
on-si-teCASE.We're addressing customers with
generation.
o So without the proposed new rate design
and new rates, the Commj-ssion can't evafuate the25
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downstream consequences of its decision today, is that
correct, ot in this case; correct?
A The Commission wj-lI have an opportunity to
eva1uate any consequences of changes in rate design in
the future before adopting any new rate design. Werre
not proposing any changes to rates at this time. The
rates that we would propose be applied to the new class
are the same as they're applicable today. We're asking
for, as I've mentioned, a policy decision as to whether
or not net metering customers or customers with on-site
generati-on should be segmented into their own cl-ass for
cost of service and rate design purposes in the future.
O Okay; so the Companyrs application states
that the current rate structure acts as a regressj-ve
weal-th transfer from lower income customers to higher
j-ncome customers; correct?
A The testimony cited that that was a
concern raised and presented the source of that concern
and the Company is concerned that that may exist for its
customers, yes.
O But the Company doesnrt have any data
regardi-ng the income of net meterj-ng customers versus
non-net metering customers; is that correct?
A Thatrs correct.
O Does the Company have any data regarding
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TATUM (X)
Idaho Power Company
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CSB REPORT]NG(208) 890-s198
TATUM (X)
Idaho Power Company
the trends for investment in distributed generation? In
other words,
income people
generation?
A
customers.
O
regarding the trends
who are investing in
know the Company does
related to i-ndividual
O So the
states that shou]d be
however, the Company
whether that is or is
does the Company know whether more lower
are currently investing in distributed
The Company doesn't track income of its
So the Company does not
of investment or
have any data
the income of those
on-site generation; correct?
A I am not aware. I do not have that data
and I'm not aware if the Company does or
not track or retain
not, but I do
income l-evels of its
any records
customers.
Company does not know whether what
it has characterized as a regressive wealth transfer is
becoming less regressive as time goes on; correct?
A The Company has cited that as a concern
that has existed and has been demonstrated i-n other
that is worthy of consideratj-on;
hasnrt done any analyses to verify
not happening, but based on what is
it's a concern.occurring in other states,
O So it's possible that any regressive
wealth transfer is actually becoming less regressJ-ve as
prices for rooftop solar fal1?25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
A I've not seen that study that would yield
those results, so I don't know.
O Okay, I think f'm coming to the end here.
Idaho Power or is it your testimony that any benefits
of distributed generation shouldn't be considered in this
proceedj-ng; j-s that correct?
A I donrt think that they're necessary to
consider at this pointr rro.
O Is Idaho Power involved in any other case
regarding net metering policy?
A No.
O Is Idaho Power involved in a case with the
Oregon Publ-ic Util-ities Commission regarding, I guess,
generation?the value of distributed
A
o
ongoing; rlght?
A
o
require Idaho
so.l-ar?
A
o
customer class
A
Yes.
And is that case that case is currently
That's correct.
Did the Oregon Public Utilities Commission
Power to study the resource value of
Yes.
Did the Oregon PUC create a separate
before requiring this study?
The Company didn't request it, and no,25
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Idaho Power Company
this time
requiring
sol-ar.
they did not.
O Is the Company currentl-y engaged in that
study?
A Is the Company currently engaged in what
study?
O In studying the resource value of solar
that the Oregon PUC required.
A The Company has completed its study,
yes.
MR. CARTER:Ird just like to introduce at
Util-ities Commission Orderthe Oregon
Idaho Power to study the resource val-ue of
COMMISSIONER RAPER: As a new exhibit?
MR. CARTER: Correct.
COMMISSIONER RAPER: Do you know where
youtre at on numbers?
MR. CARTER: 810.
COMMISSIONER RAPER: 8l-0?
MR. CARTER: Can we have this marked as
Exhibit 810? I don't know who has a copy of it or who
needs a copy, but Trve got plenty.
(Mr. Otto distributing documents) .
MR. CARTER: Ben is handing them out for
me. Thanks, Ben.
Publ-1c
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
(Auric Solar o Idaho C1ean Energy
Association Exhibit No. 81-0 was marked for
identification. )
0 BY MR. CARTER: Okay, I guess starting on
page 2L of this Order, the Oregon PUC identifies 11 items
that fdaho Power is required to study; correct?
MS. NORDSTROM: Could counsel please
explain how this Iine of questioning is relevant to these
proceedings in Idaho for a narrowly defined net metering
case as opposed to a generi-c docket in the State of
Oregon addressing the resource value of solar for uses in
many different contexts and may or may never be applied
to net metering, p€r se, so is this rea11y relevant to
the proceeding, because this is a very large document to
be handed to Mr. Tatum who may or may not have read it
previously to provide information in response to your
questions.
MR. CARTER: Sure, and just to be cIear,
I'm not going to be asking Mr. Tatum any more
on this,
intent, I
currently
value of
just that the 11 el-ements are
guess, is to demonstrate that
involved in a
there,
Idaho
the
questions
and my
Power is
resourcestudy to determine
not intended or has indi-catedsofar, but has
that it does not consider the resource va]ue of
distributed generation to be rel-evant to this proceeding.25
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CSB REPORT]NG
(208 ) 890-s1eB
TATUM (X)
Idaho Power Company
MS. NORDSTROM: But they are two different
MR. CARTER: Thatrs correct.
MS. NORDSTROM: Correct?
MR. CARTER: Correct.
MS. NORDSTROM: The Commission can
MR. CARTER: Okay; so I would ask
COMMISSIONER RAPER:Are you objecting to
Nordstrom?the admission of the exhibit, Ms.
proceedings.
decide.
what
mean,
MS.
purpose it is
this witness
the weeds on
NORDSTROM: WelI, I don't know for
being admitted or being proffered.
has testified that the consideration
I
of costs and benefits are something to be dealt with in a
the Company has recoflrmended, so to
costs and benefits here seems to be
future proceeding that
get into
outside of the scope of this proceeding.
COMMISSIONER RAPER: And I would have to
sdy, Mr. Carter, that having ruled on Mr. Bender's
attempt to get additional information in after initial
filings the way that I did at the beginning of this
hearing, if your only objective in entering this exhibit
is to get the chart in the record, which j-s what I heard
you sdy, and there are no questions to Mr. Tatum
regarding the document, then you're going to have to25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
establ-ish a basis
MR.
questioning. Itrs
data avail-able that
for entering the
CARTER: Okay,
that ?
CARTER:
simply
Idaho
exhibit.
and f guess I would
for this exhibit.
compillng data
currently in Oregon
distributed
posed to hi-m with regard
If that's a line ofto being in possession of
questioning, then by all
MR
propose a modest, but relevant, basis
It is that Idaho Power has data or is
regarding the resource va1ue of sol-ar
and has contended that the benefits of
generati-on is not relevant to the Commj-ssion's decision
in this caser so it's modest 1n the sense of this is just
demonstrating that there is information out there that
Idaho Power has not asked the Commission to consider.
COMMISSIONER RAPER: Tenuous at best for
proceedings where an Oregon decision has absol-utely no
jurisdiction over this Idaho Commission.
MR. CARTER: Idaho Power woul-d be in
possession of information regarding the va1ue of so1ar,
though, from this Oregon study.
COMMISSIONBR RAPER: Did Mr. Tatum answer
or not answer questions that you
means proceed.
that is not my line ofNo,
a demonstration that there is
Power has asked the Commission
not to consider, but it's out there.
MS. NORDSTROM: And that would have been25
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CSB REPORTING(208) 890-sr_98
TATUM (X)
Idaho Power Company
properly presented in ICEA's
MR. CARTER:
rebuttal testimony.
I would submit that itrs
appropriate in cross-examination to use exhibits.
MS. NORDSTROM: But,
whether this is within
again, it goes to
of therel-evancy of
proceeding.
the scope
MR. HAMMOND: Madam Chairwoman, if I may,
the resource value whether i-t's relevant or not is
obviously up to your discretion; however, this is an
issue that's been raised in other parties' testimonies,
the issue of resource value of solar. Our witness
specifically mentions the Oregon proceedj-ng. In
proceedj-ngs and meetings in this case, it was clear to
al-I the parties that any issue concerning rate design,
rate cl-assification woul-d be allowed to be brought in
this proceeding. If the Commisslon disagrees, that's the
Commission's prerogatj-ve, but I don't think this is a
surprise that this piece of information, you know, just
suddenly came up.
COMMISSIONER RAPER: And Mr. Hammond, I
don't think it's a surprise to anyone, but what I donrt
hear Mr. Carter saying is that he has questions for the
wj-tness regarding the exhibit, and as I already stated,
if your only objectj-ve in entering the exhibit is to get
this chart in, then I see a date of September 15th, 2017,25
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CSB REPORTING
(2oB ) 890-s198
TATUM (X)
Idaho Power Company
on the front, which means that it could have been entered
during the underlying submission of dj-rect and rebuttal,
so I will allow you I'II overrule any objection to the
extent that you have questions to pose to Mr. Tatum with
regard to thls exhibit; otherwise, it wil-I not be
admitted for any purposes because you're not
cross-examining a witness.
a BY MR. CARTER: Okay, and to be clear, the
one question was to, I guess, indicate that the Oregon
Publj-c Utilities Commj-ssion has required Idaho Power to
study these 11 items,and I guess my wrap-up question
doesn't deny that there arewould be, Idaho Power
benefits to distributed generati-on; correct? ft just
contends that any of those benefits in the Company' s
decision inopj-nion arenrt rel-evant to the Commission's
this case?
A Yeah, I actually can't agree with you
based on this information that you're presenting to me.
The result of the Company's study on one of the aspects
of this case was that there were negative benefits when
all of the criteria were considered, and so the answer
would be no,
cri-teria of
there were not benefits under the ful-l-
one segment of this study.
Now, that was the result of this study.
Commlssion adoptThe Company is not suggesting that theo
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CSB REPORTING
(208 ) 890-5198
TATUM (X)
Idaho Power Company
this methodology goj-ng forward. We'd like to hear from
many folks within this room about what that methodology
should be, so I donrt know what that resul-t will be or
how it will- reflect benefits associated with distributed
generation as they exist in Idaho, but Dor I can't agree
with you on the result of this particular study.
O Okay; so I guess to clarify my question
here or to make sure that we have the same understanding,
the Company doesn't deny that there may be benefits to
dj-stributed generatj-on in Idaho, it just thinks that any
benefits should not be considered now, but shoul-d be
considered later; correct?
A I think that's right, yes.
MR. CARTER: Okay, that concludes my
questions.
COMMISSIONER RAPER: Thank you, Mr
Carter. Mr. Hammond graciously offered to go next.
CROSS-EXAMINAT]ON
BY MR. HAMMOND:
0 Good morning, Mr. Tatum.
A Good morning, Mr. Hammond.
O Thanks for being here today. I appreciate
it. I know everybody is busy and this is a big25
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CSB REPORTING(208) 890-5198
TATUM (X)
Idaho Power Company
proceeding, so I know your time is valuabl-e. Thank you.
In this case, is it fair to say that the Company is
attempting to address a problem with net metering
customers because they're concerned about a cost shift
and subsidy that may be having to be taken care of by
non-net metering customers?
A That is a concern of the Company, yes.
O Okay, 1s there another concern other than
that cost shift?
A I think that's generally one of the main
concerns. I think we have the ability through our
current AMI system to measure in a way that is new,
rel-atively new, and unique and we think that util-j-zation
of that measurement, the hourly measurements, do present
some opportunities to have more accurate pricing for
customers and a compensation structure for customers with
on-site generation, so I thj-nk generally, a fairness
issue with regard to both customers with on-site
generation and those without. Cost shift is a component
of that sort of broader fairness objective.
O And correct me if lrm wrong, but I believe
Idaho Power's application asks the Commission to
establish a
was
new rate schedule,
to establish a new
or at least the
rate schedule,
origj-na1
for netrequest
meterj-ng customers. New net metering customers would go25
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Idaho Power Company
on these new schedules as of a certain date. In the
application, I believe it was December 31st. As you've
said, we passed that and then the existing net metering
customers, however that's defined, would remain on
Schedules 1 and 7 pending some transition period; is that
correct?
A They would remain taking service under
Schedule 84, which is our net metering service. Just a
distinction on the terminology as we11, we weren't
classifying or calling the new group net metering, but
rather customers with on-site generation, so we were
making that distinction as well just to clarify.
A So on each of these in each of these
cases under the Company's request, those new customers
with on-site generation would be paying the same rates
and being credited for the export of power at the same
rate as the existing customers, the existing net metering
customers, but theyrre in separate rate classes, dt least
going forward?
A
o
Thatrs the Companyrs proposal, y€s.
for Idaho Power toIs it conimon practice
set separate rate
structures?
AIt
Ors
classes with identical rate
is not, no.
it correct that the Company proposed tot25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
establish a new rate class where the rates under Schedule
B and or excuse me, Schedule 6 and 8 woul-d continue to
mirror the rates contained in Schedules 1 and 7 until the
Commissj-on determines the proper rate design and
compensation
under that
appropriate cost of service study and
generation studies; is that something
A I think that properly
Company's proposal, yes.
0 So we're going to set
for those new rate schedules, 6 and B,
decision r,roul-d be made based
other
upon an
applicable
you recal-1?
characterizes the
these customers in a
separate rate class and maybe these the existing ones
in the same or in another rate class, but they're all-
going to have the same rate; correct?
A For a perj-od of time, yes.
O And then the proposal by the Company is
that we're going to study the costs and benefits or we're
going to engage in some col-l-aborative process to
determine maybe the resource val-ue of solar. I don't
want to put words in
understanding?
A So the
),our mouth, but is that your
Company's proposal is y€s, to
theestabllsh a process
costs-benefits rate struc'ture for that newly established
cl-ass with the information that a policy decision has
where we coulcl evaluate
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been made that those customers should have different
rates than the standard or customers within the
residentia.l- and sma11 general service cl-ass that don't
have on-sj-te generation. I think thatrs an j-mportant bit
of information as we move forward with that investigation
so that it's cl-ear that at the end of the day that we
will evaluate those customer that customer cl-ass as a
segment of its own.
O How long do you anticipate that that
process may take? Does the Company have an opinion on
that?
A I answered that earlier. I don't know. I
don't know how long it will take. I think it's important
that we take the necessary amount of time to provide the
information that is needed to inform the decision to
implement new rates or a compensation structure. As I
mentioned earlier when that question was asked before, I
think it's important that the process be a co11aborative
one and that perhaps others who are participating have an
idea of what the timetabl-e shoul-d be associated with that
investigation.
The Company is not has not proposed
unilaterally to establish every step in that process.
We've saj-d that there are general steps that are taken,
but we would like to hear from others before we make a
CSB REPORTING
(208 ) 890-5198
TATUM (X)
Idaho Power Company
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
recommendation to the Commission on those subsequent
steps.
Oregon is
some sort
going to
believe?
O Now, I understand there's a
dj-fferent than ldaho, but you're
of cost-benefit study there. Is
take a significant amount of time
position that
going through
that process
do you
believe it
o
this point,
certain at
proceeding
A
might come in
what the rates
A Oh, it has taken some time already and I
wiII continue.
t And the Company isn't certain, dt l-east at
when -- and f understand that, but it isn't
this point when it might file the next rate
No.
O And is it the Company's intent to bring
any rate changes in a general rate proceeding excuse
rrer l-et me back up any rate changes to the net
metering customer class in a general rate proceeding?
A That's certainl-y a possibility, yes. f
think that would be it woul-d certaj-n1y be a
possibility. The decision hasnrt been made, just as the
deci-sion to file a case hasnrt been made.
O So are you suggesting that
on a one i-ssue rate case to
the Company
just consider
should be for this cl-ass?o 25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
A I'm not
O Okay;
had stated, with this
suggest j-ng
we have a
cost shift
thatr Do.
problem, I think you
and if the Commission
SO
were to grant your
class, that grant
correct?
AIt
suggested.
O But
request
doesn't
to establish a separate rate
solve the probl-em; is that
initiates a process, y€s, that we've
to sol-ve the problem, we need to
adjust rates in the Company's opinion or change the rate
design and we don't know when thatrs going to occur.
Obviously, that's dependent on other partj-es, but at
least from the Company's perspective, we don't know when
thatrs going to occur?
A hle do not knol when that woul-d occur.
O Are you aware that, and I think you're
aware that, the majority of the parties in this case at
least seem to agree with the Company that a cost-benefit
study or some type of proceeding is relevant and should
be undertaken?
A Yes, it seems that way.
O We may dj-sagree on some of the elements
that would be included j-n that-, but we all sort of agree
on that?
A I would assume that, yes.o 25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
O fs it fair to say that the other parties,
in your opinion, are also in line with Idaho Power in
that they would be willing to consider changes to rate
design and a rate structure of rates after that
cost-benefit study in a rate proceeding of some sort?
A Ird like to think that that's the case,
but I donrt know that thatrs the case, Do.
O Certainly; so the only difference here is
that Idaho Power at l-east today wants a separate rate
class to establish for customers with on-sj-te generation.
It doesn't change any of the rates or solve the problem
that Idaho Power has brought to the Commission?
A The Company's request is for the
Commission by granting its request to make a policy
decision with regard to the classificati-on of customers
with on-site generation and those without in the
residential and small general service classes.
O And I believe you stated earlier that you
believe the Company has demonstrated or provided
sufficient evidence that these customers or that a new
rate class shoul-d be established. Would you agree that
the vast majority of the parties in this case have
provided evidence that disputes that evidence?
A I agree that the parties have disputed 1t
data and thebut I stand by the accuracy of the Companyrs25
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CSB REPORTING
(208 ) 890-s198
TATUM (X)
Idaho Power Company
way that the data were presented.
O Certainly, I would expect that, but at the
end of the day, if therers a dlspute, the Commission as
the trier of fact would then decide what evidence should
be considered and how that decision should be made; is
that correct?
A I think that's how it works.
O So in your application and in the
testimony, your testimony and other Company witnesses, I
think the representatj-on has been made that it's
important for the Company to send a price signal or prj-ce
signals to customers regarding this category of
customers,' is that correct?
A It is important, yes.
O Did the Company in 201,2 when j-t filed its
application in Case No., I believe it is, 72 or
TPC-E-!2-27, wouldn't you say that the Company's position
in that case was sending a price signal- to customers that
rates could change?
A I agree with the first part, but right at
the end I would not agree with that. The intent of that
filing was to change rate structure and to
separate cl-asses. That case, I think, is a
establish
of why we're pursuing the process that we're
today, because what we had in tirat case was
good example
suggesting
dispute over25
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
whether or not there shoul-d be a different class and al-so
what the pricing should or shoul-d not be, but the
decision to establ-ishdecision to separate or the
separate classes was at focus, I think, of most of the
partJ-es, to my recollection, with the notion that there
is no difference and there shouldnrt be a separate class;
therefore, no pricj-ng regardless of the structure should
be accepted, so we're stepping back and suggesting that
the Commission consider just that issue. There were, you
know, two major issues in that case. One of them is the
one that we're asking the Commission to address this
time, which is a separate class justified based on the
different usage characteristics of customers with on-site
generat j-on.
O So after the decision in that case, did
the Company engage in any efforts to evaluate the cost of
service to serve these customers, these net metering
customers?
A I think Ms. Aschenbrenner testifies to the
different studies that the Company undertook as wel-l-
stakeholder engagement and focus groups and other
investigation and analyses and evaluations.
O The Company belj-eved this was a problem
back tn 20!2, 20L3 and now itrs filed again. Yet, are
you aware of whether the Company has developed some sort25
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of class cost of service model to study the costs that
these customers may cause to the Company that are
different than standard residential customers or non-net
meterlng customers?
A WeII, the Company has proposed a process
under whlch we would seek input from customers and other
j-nterested parties as to what that study should look
l1ke. The Company I can assure you is capable of doing
its own study; howeverr we'd like to hear from others as
to how they think a study shoul-d be performed prior to
landing on a preferred approach. We certainly, again,
would wel-come that input as part of the subsequent
process that we've asked the Commission to establish.
O But the Company really hasn't engaged in
that until now; is that correct?
A Well, dS I said, Ms. Aschenbrenner has
presenLed information regarding cost of service studies
or cost of service-type studies that were performed as
part of our annual reporting requirement to the Idaho
Commission regarding net metering service.
O In any of this time period between that
case and here, has the Company ever considered the
benefits of net metering generation?
A ft was pointed out earlier that we did for
an Oregon proceeding.
CSB REPORTING(208) 890-sr98
TATUM (X)
Idaho Power Company
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
O No, I'm saying here in the State of ldaho,
I apoJ-ogize. In the State of Idaho, has there been a
discussion or analysis by Idaho Power about the benefits
that net metering generatJ-on may provide here in the
State of Idaho?
A WelI, the studj-es for our Oregon
jurisdiction are performed in the State of Idaho at our
headquarters in Boise, so, yes, and the studies were done
on a system basis. I,tle're studying Idaho Powerrs system,
so they were not jurisdictionalized to ldaho
specifically. They were done for the purpose of
complying with an Oregon requirement, so, yes, the
Company has done studies. The Company does studies on
the value of generation sources like solar and wind all-
the time. We do it for the purposes of PURPA. We've
applied a study to val-ue community solar and, y€s, we've
done lots of studies that woul-d look at the val-ue of
0 Have any of those studies been provided to
any of the stakeholders or net metering customers or
presented anywhere in this case?
A WelI, the valuatj-on of sol-ar resources
under PURPA are provided through PURPA-related filings,
but the Company filed 1n Oregon, which woul-d be
publicly-avall-able information, its results of the study
did makethat we were requj-red to f ile i n Oregon. We25
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availabl-e to the parties that were invol-ved in the
community solar-related docket a couple of years ago
information with regard to estimates regarding the val-ue
of a solar resource, so yes, werve made i-nformation
avail-ab1e regarding our studies to the public.
O In this case?
A Werve not submitted anything in this case
regarding that and we haven't suggested that that is
necessary to inform the decision that we're asking the
Commission to make either.
O Would you say the Company sent a price
slgnal to net metering customers by holding its
workshops, I believe, in 2016 and 2017 that it was
considering making changes to the structure of the net
metering cl-ass?
A Yeah, Ms. Aschenbrenner testifies to the
details of those meetings, but I be1ieve at the 2016
meeting, the Company introduced a strawman example of
rate design that it was thinking might solve the problem
that the Company believed exists with net metering.
O So the Company dj-scussed those changes and
then the Company has filed this case and wouldnrt this
case itself send a price signal to customers that changes
may be forthcoming?
A Can you ask that question one more time,
TATUM (X)
Idaho Power Company
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
please?
O Sure. liouldnrt just the filing of this
case by itself without any decision by the Commission
send a price signal to customers that changes, net
metering customers that changes, may be coming to the
rate design or rates of those customers?
A I think it sends a signal that the
Commission -- 1f the Commission grants what the Company
has asked that the Commissj-on is interested in a process
that may lead to different rates and a different
compensat j-on structure for their cl-ass. It will also
send a signal that that process is intended to be
col-l-aborative and inclusive and transparent as welI. I
think thatrs the right approach.
O Wou1d the price signal change if the
Commission were to decj-de to deny the request for a
separate cl-ass at this time,
a cost-benefit proceeding and
but to continue forward with
then an
at some point in time that in either a
general rate proceeding, or some other
the rates shoul-d change?
u]timate decision
rate proceeding,
proceeding that
A Like I mentioned a number of times, we're
not suggesting a different pricing structure at this
time, so the price signal will remain in effect until-
that structure changes, Lf it does, sometime in the25
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future.
O So is the Company stating that if the
Commj-ssion denies its request today, but wants to
continue on with further proceedings, that it does not,
the Company does not, intend to go forward because
there's no separate rate classes?
A WeII, the Company will comply with
whatever the Commissj-on directs the Company to do. The
Company's preference is that the Commission make a
decision now related to separate classification for cost
of service and rate design purposes rather than deferring
that decision until later.
O Would you say the Company does a pretty
good job of informj-ng its customers that there might be
pri-ce changes, there might be changes in terms of
service; is that something generally the Company does a
great job of?
A I think the Company makes every effort to
make sure its customers understand what pricing changes,
known pricing changes, fldy impact them, yes.
O In fact, although it is, I belj-eve, in Ms.
Aschenbrenner's testimony, I apologize, the Company has
engaged in significant efforts to inform net metering
customers that these rates are subject to change; is that
correct?
CSB REPORT]NG(208) 890-s198
TATUM (X)
fdaho Power Company
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A Absolutely, yes, that is the case, but Ms.
Aschenbrenner speaks to the details of how that's carried
out, but I believe that the Company's intent is to make
sure that customers know that rates are subject to
change.
0 And j-n this case, f don't know the exact
number, but there's hundreds of comments of folks that
have commented on this case and I won't say theyrre all
one way or the other, but therers hundredsr so obviously,
some signal is getting out there that things could
change; is that correct?
A I think certainly those customers are
aware of this proceeding, yes.
O And we had a substantial number at the
public hearing here and the public hearing in Pocatel-l-o.
I guess what I'm getting at is it seems like there's a
representation that there's misinformation that needs to
be corrected and the only way we can correct it is to
establish a separate rate c-lass, and I'm confused as to
what misinformation is out there that people don't
understand that rates cou.l-d change.
A We11, I am ce::tainly and can speak for the
Company, we're not trying to present any misinformation,
so the misinformation is certainl-y not this Company is
not the source of that.
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CSB REPORTING(2oB) 890-5198
TATUM (X)
Idaho Power Company
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
O I wasnrt suggesting that,
A I just want to make sure
cl-ear. I think the establishment of the separate class
request, a1so,with the process
is to establish
I mean, the Company's
a process. I believe that's good
information. Itrs more information than I think
customers normally get prior to a rate structure change.
Oftentimes the Company wiII propose a rate structure
change as part of a general rate case. That process
Iasts seven months, and at the end of the day, there's
uncertainty throughout that process as to what ultimately
the rate structure will be, so this is a process that I
think is more inclusive and transparent as suggested by
the Company than what normally occurs.
O One moment, I apologize.
A No problem.
(Pause in proceedings. )
O MR. HAMMOND: fn your testimony, I believe
it's your direct testimony, on page 18, I'I1 see if I can
find the exact l-ine number, you've referenced that NARUC
Manual, and I guess the fuII title is the NARUC Manual
for Distributed Energy Resources, Rate Design, and
Compensation. Is that the articl-e or publication that
you're citing at page 18 of your testimony?
A Yes, j-t was a manual produced at the
I apologi-ze.
that that's
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CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
request of the NARUC organlzation to help inform
decj-sions just like this one that commissions around the
country are bej-ng faced with.
O Do you have a copy of that?
A I donrt wJ-th me, no.
MR. HAMMOND: I'm not j-ntending to
introduce that document as an exhibit. I just would like
him to have it sj-nce he cited passages from it. If the
Commissioners would l-ike a copy of that document, I can
certainly provide it to you, a hard copy.
COMMISSIONER RAPER: My question was going
to be, do you have a copy of that document?
MR. HAMMOND:No, it's a ginormous
to I donrt need todocument, and
i-ntroduce it
Irm not trying
as an exhibit
COMMISSIONER RAPER:
MR. HAMMOND: -- but
Company. I assumed they would want
COMMISSIONER RAPER:
ask questions of Mr. Tatum regarding
reference to it would assist him in
Great.
I have a copy for the
them.
If you're going to
the document and
answering, by all
means, thank you,
MR.
Mr. Hammond.
HAMMOND: May I
COMMISSIONER RAPER:
app::oach?
Yes.
(Mr. Hanunond approached the witness.)25
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(208 ) 890-s198
TATUM (X)
Idaho Power Company
O BY MR. HAMMOND: I think in your testimony
at page 18, you quote a portion of the NARUC Manual that
it I s very important for customers' decisj-ons on DER
installation that price signals are sent by rate design.
If those price signals do not appropriately reflect a
jurisdiction's poiicy on cost-causati-on, the resul-t wil-l-
like1y be an economically or socj-a11y inefficient amount
of DER; is that correct? I may have got a wrong word or
two in there,but is that your testimony?
r think that I thi-nk youA
O
got it,
l-55 of
yes.
thatAnd
document; is that
that's a quote from page
correct? I just want to make sure that
Irm referenclng the
in your testimony,
sure that quote is
be certain.
on one pathway
generation?
A
and points out
same document that you're referencing
so if you'd go to
there. I beli.eve
155 and just make
j-t is, but just to
A Yeah, it looks Iike it starts with the
second sentence in the paragraph on page 155.
O And woul-d it be fair to say that this
manua1 is sort of a generic docket that addresses a lot
of issues and doesn't necessarily take a sol-id position
to solving any issues with net metering
No, I would say that it represents a guide
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to consj-der. I think, in fact, it says that maybe a
different solutj-on for each state and f donft disagree
with that.
O And yourve referenced this NARUC Manual, I
think, several times in your testimony. ff that's wrong,
please correct me, and I'd like you to turn to page 76 of
the manual- and there should be a highlighted portion in
the middle paragraph there, the middle paragraph,
highlighted portion, second sentence.
A On page 76 you said?
0 76, I believe.
A Okay, I'm there.
O And 1n that statement, can you read that
middle paragraph, second sentence? It starts with "The
question. "
A "The question for DER, " and I bel-ieve
that's referri-ng to distributed energy resources.
O Thank you.
A "The questj-on for DER customers, then, is
whether the difference in the service provj-ded to DER
customers differs in a way that justifies their
separation into separate classes. "
O And then can you at the end of that
sentence, is there a footnote, 105?
A Yes.
CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
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O Could you read that footnote?
A Sure. Footnote 105 is, "It can be argued
that a separate class j-s not necessary until DER
constitutes some threshold portion of an important cost
determinant and that doing so before this threshol-d is
met constitutes rate discrimination. "
O Thank you. On page 78 of the manual,
there is a highlighted portion there that we've
highlighted. It's the last sentence of the main
paragraph on that page and j-t beglns with "In the end."
Could you read that sentence for me?
A Sure. "In the end, regulators must
examine the partj-cular load profiles associated with
various customers, including DER customers and subsets
thereof, and how those profiles correspond to costs and
decide whether those differences consti-tute a substantial-
enough difference in service provided to justify their
separation. "
COMMISSIONER RAPER: Mr. Hammond, can I
ask for clarification? The thi-ngs that you're asking
Mr. Tatum to read, are they parL of his testimony that he
cited to the document or are they portions of the
document that you're pulling out for other clarification?
MR. HAMMOND: I'm pulling out for other
clarification, and the point is that we've cited one
CSB REPORTING(208) 890-s198
TATUM (X)
Idaho Power Company
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CSB REPORTING(208) 890-5198
TATUM (X)
Idaho Power Company
particular provision of this document for a position that
seems to support Idaho Powerrs case. What I want the
commission to understand is that this document recommends
a variety of approaches that don't necessarj_1y agree with
Idaho Power's posJ-t j-on and of fers an important
determination of how to separate rate classes based on
cost as a main factor.
COMMISSIONER RAPER: It sounds like to me
you want to have the document admitted as an exhibit.
MR. HAMMOND:
you'd lj-ke. I was trying to
If you would l-ike that done,
I certainly can do that if
spare the Commission record.
f certainly can offer it as
back to the office and fry
take a break.
an exhibit and provide
a bunch of copies when we
run
COMMISSIONER RAPER: Does fdaho Power have
an opinion?
MS. NORDSTROM: This document is generally
available and f'm not sure exactly what further questions
you're going to ask the witness on this.
COMMISSIONER RAPER: T'm fine with the
fact that you initially said that you admitted it for,
whlch was because Mr. Tatum references it in his
testimony. To the extent that it's just to assist him in
rememberj-ng where it's from and then ask him questions
rel-ated to what the reference is, then that's okay, too,25
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TATUM (X)
Idaho Power Company
but at a given point for the benefit of everyone here and
then later on when this document and this docket is
looked at, if therers goi-ng to be multiple references and
then follow-up testimony, rebuttal regarding the
document, I would rather have it admitted as an exhi-bit
for the benefit of now and in the future.
MR. HAMMOND: I think at this point we
Atl we'rewoul-d choose not to offer it as
tryj-ng to point out is that the
determinant for commissioners to
separate rate classes. Thatrs it.
COMMISSIONER RAPER: Okay, thanks.
(Off the record discussj-on. )
COMMISSIONER RAPER: Was that all, then?
Are you done or do you have more?
MR. HAMMOND: I have some more questions,
but I'l-l- defer to you and to Connie, of course.
COMMISSIONER RAPER: Go ahead.
MR. HAMMOND: Okay.
O BY MR. HAMMOND: On page 4 of your
rebuttal testimony, there is a discussion about AMI. Can
you just define for me what AMI is?
A Yeah, it stands for Advanced Metering
Infrastructure. You said page 4 of my rebuttal?
O That might be incorrect. Wait one second.
an exhibit.
cost is an important
decide whether to
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TATUM (X)
Idaho Power Company
Yes, page 4, line 8, of your rebuttal- testimony. It
starts there.
Power has
investing
correct?
A Okay.
O There I believe you stated that Idaho
responded to on-site customer generatj-on by
in AMI and the online My Account; is that
A Yeah, and it looks like I've cal-led it
Automated Metering Infrastructure, which, I guess, is a
reasonable description, but it's actually Advanced
Metering fnfrastructure, but f think both terms are
used.
O Are you suggesting in this paragraph that
Idaho Power is only investing or that the net metering
customers are the cost causers of the i-nstal]ation of AMI
and My Account or is that infrastructure that is being
put j-n place and utilized by the Company for all
customers and for all customers to use?
A Yes, to your second statement.
O Sorry, it was such a long question, I
apologize.
A It is available and serves the majority of
our customers.
MR. HAMMOND: May I have one moment to
confer?25
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Idaho Power Company
COMMISSIONER RAPER: Do you want to make
it a break?
MR. HAMMOND: I think it will take 30
seconds.
COMMISSIONER RAPER: Okay.
(Pause in proceedings. )
COMMISSIONER RAPER: Your mic i-s live, Mr
Hammond. You' re welcome.
MR. HAMMOND: I didn't mean to say that
bad thing about Lisa. Irm afraid of her.
COMMISSIONER RAPER: You're also on the
record.
MR. HAMMOND: I think we're done. Thank
you.
COMMISSIONER RAPER: Thank you, Mr.
Hammond. Is there a show of hands of number of parties
Ieft, attorneys on1y, pleaser so I'm not counting
witnesses, for who has questions for Mr. Tatum?
Okay; so I was hopeful that we woul-d be
through with Mr. Tatum by lunch and I was going to push
on after a short break. We'I1 just do a lunch break at
this point. I think
noon, promptly 1:00
have to run down to
apologize for that.
that t,hat's probably bestr So it is
o'cIock. I know that means you'11
Quido's for pizza quickly. I
1:00 o'cl-ock we'11 be back on the25
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record and we will continue with Mr. Nykie}, because he
was the unfortunate chap who raised his hand to be next
We're adj ourned f or l-unch.
(Lunch recess. )
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Idaho Power Company
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