20181212IPC to Staff 1.pdf

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An IDACORP Companv
LISA D. NORDSTROM
Lead Counsel
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December 12,2018
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re Case No. IPC-E-18-15
Study of Costs, Benefits, and Compensation of Net Excess Energy Supplied
by Customer On-Site Generation - ldaho Power Company's Response to the
First Production Request of the Commission Staff
Dear Ms. Hanian:
Enclosed for filing in the above matter are an original and three (3) copies of ldaho
Power Company's Response to the First Production Request of the Commission Staff.
Also enclosed are four (4) copies of a disk containing information being produced in
response to Staff's Request No. 1.
lf you have any questions about the enclosed documents, please do not hesitate to
contact me.
Very truly yours,
Lisa D.
LDN:csb
Enclosures
1221 W. ldaho 5t. (83702)
PO. Box 70
Boise, lD 83707
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I no rdstrom @ id a h opowe r. com
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Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION
OF IDAHO POWER COMPANY TO
STUDY THE COSTS, BENEFITS, AND
COMPENSATION OF NET EXCESS
ENERGY SUPPLIED BY CUSTOMER
ON-SITE GENERATION
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CASE NO. IPC-E-18-15
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Power" or "Company"), and in
response to the First Production Request of the Commission Staff to ldaho Power
Company dated November 21,2018, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
REQUEST NO. 1: ln Order No. 34046, the Commission ordered "an ldaho
Power specific on-site generation docket to study the costs and benefits of net metering
on ldaho Power's system, proper rates and rate design, alongside the related issues of
compensation for net excess energy." See Order No. 34046 at 22. Please provide all
relevant studies and reports conducted by the Company or on its behalf within the last 3
years.
RESPONSE TO REQUEST NO. 1: After receiving final Order No. 34046 issued
in Case No. !PC-E-17-13, ldaho Power prepared a preliminary class cost-of-service
('CCOS") study for its ldaho jurisdiction to facilitate the examination of issues raised by
the ldaho Public Utilities Commission ("Commission") in its order. This study was
developed consistent with the methodology most recently approved by the Commission
in Case No. IPC-E-08-10 ("2008 GRC') and filed in Case No. IPC-E-11-08 ("2011
GRC"). Because the ldaho jurisdictional revenue requirement is not an issue in this
case, ldaho Power did not prepare a test year with forecasted components per recent
rate case methodology. Rather, as described in more detail in this response, the
Company utilized its historical ldaho Results of Operations ("ldaho ROO") trom 2017 as
the basis for the CCOS study.
ln addition to the CCOS study, the Company developed a preliminary Value of
Distributed Energy Resources ("VODER") study to determine the value of excess net
energy provided by Schedules 6 and 8 customers. Consequently, as discussed further
in the attachments to this response, the CCOS study was adjusted to recognize that the
value for excess energy exports is addressed in this separate VODER study.
The following paragraphs provide a summary of the process by which the
Company developed these initial studies and outline the overall organization of the
Company's response to Staffs Request No. 1.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
t. 2017 CCOS STUpY
To arrive at the CCOS study results, the Company first developed the ldaho
ROO based on 2017 actual data, then applied typica! rate case adjustments such as
normalization for weather and annualization of certain revenues and expenses. A
detailed description of the process the Company used to develop lhe 2017 ldaho ROO
is included as Attachment 1 - Development of 2017 Results of Operations, which
includes the working Excel file as Attachment 1a. The jurisdictional separation study
('JSS') results calculated in Attachment 1a were then used as an input to the CCOS
study.
After the 2017 ldaho ROO was determined and the JSS results finalized, the
Company used a methodology consistent with that approved by the Commission in the
2008 GRC and filed by the Company in the 2011 GRC. The study is a three-step
process in which the jurisdictionalized ldaho ROO is (1) categorized by function, (2)
classified based on the utility service being provided, and, finally, (3) allocated to
customer classes. The CCOS process guide, Attachment 2, describes the methodology
utilized in the 2008 and 2011 rate cases and highlights changes necessary to
incorporate the on-site generation Schedules 6 and 8. The CCOS, workpapers, and
input derivation are included and described in the files contained within the folders titled
Attachments 2 through 7:
. Attachment 2 - CIass Cost-of-Service Study
. Attachment 3 - Normalized Energy
. Attachment 4 - Normalized Demand and Energy Derivation
. Attachment 5 - Net Hourly Billing Determinant Derivation
. Attachment 6 - Normalized Retail Revenue Derivation
. Attachment 7 - Schedules 6 and 8 Cost-of-Service Study Results
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 3
As detailed in the summary of CCOS results provided in Attachment 7, both of
the newly established Schedules 6 and 8 classes demonstrate an earnings and revenue
deficiency.
II. VODER STUDY
Because the intent of the Company's CCOS study was to allocate Company-
related costs, it was necessary to perform a separate study to determine a value for the
net excess energy exported by Schedules 6 and 8 customers. To determine this value,
the Company developed a preliminary VODER study as it relates to compensation for
net excess energy that is delivered to the Company on an hourly basis. Attachment 8 -
Compensation for Net Excess Energy, describes the development of the VODER, and
Attachment 8a is the Company's VODER Excel model. Attachment 9 - Schedules 6
and 8 Net Hourly Revenue lmpact, quantifies the impact of a net hourly billing construct,
with the VODER applied as a credit for excess energy to determine the reduction in the
Schedules 6 and 8 revenue deficiency that occurs through a change in billing and
compensation.
III. PRIOR STUDIES
Finally, Commission Staff's Request No. 1 requested all relevant studies and
reports conducted within the last three years. In addition to the recent CCOS study
provided in Attachments 1 through 7 and the VODER study provided in Attachments 8
and 9, the Company also completed two cost-of-service analyses that were previously
filed with the Commission in compliance reports filed in Case No. IPC-E-12-27. These
reports and the relevant analyses are included and described in the files contained
within the folder titled Attachment 10 - Residential Net Metering Cost Shift in 2015 and
2016.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
IV. CONCLUSION
!n its Application in Case No. IPC-E-17-13, the Company requested the
Commission open a docket to establish a compensation structure for distributed energy
resources ('DER") that reflects both the benefits and costs that DER interconnection
brings to the system. The studies ldaho Power has developed and supplied in
response to Staff's Request No. 1 in this current proceeding, Case No. IPC-E-18-15,
are not intended to be presented as final studies; rather, they were developed to
facilitate discussion with Commission Staff and parties as consideration is given to
identifying and quantifying the costs incurred and benefits supplied by customers in
Schedules 6 and 8. The 2017 ldaho ROO and the preliminary CCOS study results
provided with this response are the same as provided in ldaho Power's Response to
Staff's Request No. 1 in Case No. IPC-E-18-16.
The response to this Request is sponsored by Connie Aschenbrenner, Rate
Design Manager, ldaho Power Company, and Matt Larkin, Revenue Requirement
Senior Manager, ldaho Power Company.
DATED at Boise, ldaho, this 12th day of December 2018.
D. NOR
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 12th day of December 20181 served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Sean Costello
Deputy Attorney General
ldaho Public Utilities Commission
47 2 W est Wash in gton (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
ldaHydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite LP 103
P.O. Box 2900
Boise, ldaho 83701
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North 6th Street
Boise, Idaho 83702
ldaho lrrigation Pumpers Association, lnc.
Eric L. Olsen
ECHO HAWK & OLSEN, PLLC
505 Pershing Avenue, Suite 100
P.O. Box 6119
Pocatello, ldaho 83205
Anthony Yankel
12700 Lake Avenue, Unit 2505
Lakewood, Ohio 44107
Vote Solar
Briana Kobor
Vote Solar
358 South 700 East, Suite 8206
Salt Lake City, Utah 84102
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enn rkoosh.com
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IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 6
David Bender
Earthjustice
3916 Nakoma Road
Madison, Wisconsin 537 11
Al Luna
Nick Thorpe
1625 Massachusetts Avenue, NW, Suite 702
Washington, DC 20036
City of Boise
Abigail R. Germaine
Deputy City Attorney
Boise City Attorney's Office
150 North Capitol Boulevard
P.O. Box 500
Boise, ldaho 83701 -0500
ldaho Clean Energy Association
Preston N. Carter
GIVENS PURSLEY LLP
601 West Bannock Street
Boise, Idaho 83702
Sierra Club
Kelsey Jae Nunez
KELSEY JAE NUNEZLLC
920 North Clover Drive
Boise, ldaho 83703
Zack Waterman
Michael Heckler
Idaho Sierra Club
503 West Franklin Street
Boise, ldaho 83702
Snake River Alliance
John R. Hammond, Jr.
FISHER PUSCH LLP
101 South Capitol Boulevard, Suite 701
P.O. Box 1308
Boise, ldaho 83701
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nthorpe@ea rthj ustice. orq
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michael. p. heckler@qmail. com
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IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
Amy C. Hilton
Snake River Alliance
223 North 6th Street, Suite 317
P.O. Box 1731
Boise, ldaho 83701
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PacifiCorp d/b/a Rocky Mountain Power
Yvonne R. Hogle
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
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Ted Weston
Rocky Mountain Power
1407 West North Temple, Suite 330
Salt Lake City, Utah 84116
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Christa Bearry,Assista
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 8