20190801PAC to Staff 1-12.pdf

Y ROCKY MOUNTAIN
HP,H,*EF."",
REC EIVEO
1$15 AU$ - | Pl{ h: 26
ttrAl-i,J t'UliliC
J1' rLiTiil$ *ch{Ml$$loN
August 1,2019
Diane Hanian
Idaho Public Utilities Commission
472W. Washington
Boise,ID 83702-5918
di ane.holt(eDpuc. idaho. eov (C)
RE ID PAC-E-I9-08
IPUC I't Set Data Request (1-12)
Please find enclosed Rocky Mountain Power's Responses to IPUC 1't Set Data Requests 1-12
Also provided are Attachments IPUC 2,5 1l-2),8, 10 - (l-2), and 12 {1-6).
If you have any questions, please feel free to call me at [phone].
Sincerely,
--Jsl-J. Ted Weston
Manager, Regulation
Enclosures
C.C.: Eric L. Olsen/IIPA elo(@echohawk.com
Anthony Yankel/IPA tony@,),ankel. net
1407 W North Temple, Suite 330
Salt Lake City, Utah 84116
PAC-E-19-08 / Rocky Mountain Power
August 1,2019
IPUC ls Set Data Request I
IPUC Data Request 1
Please provide an example of the worksheet(s)/exhibit(s) that would be submitted
with an ECAM filing if the proposal is approved.
Response to IPUC Data Request L
The Company proposes export credit payments in accordance with the proposed
Net Billing Service be recorded in FERC Account 555 and be included in the
Company's calculation of Total Company net power costs (NPC). No additional
worksheets or exhibits would be required for the Company's energy cost
adjustment mechanism (ECAM) filings since export credits would flow through
the mechanism like any other purchased power expense.
Recordholder:
Sponsor:
Amie Stevenson
Mike Wilding
PAC-E-19-08 / Rocky Mountain Power
August 1,2019
IPUC 1't Set Data Request 2
IPUC Data Request 2
Please provide a worksheet(s) in Excel with executable formulas intact that shows
for each current Idaho Schedule 135 customer:
(a) generation type;
(b) annual generation in kWh and dollars;
(c) annual consumption in kWh and dollars; and
(d) net annual generation in kWh and dollars.
Response to IPUC Data Request 2
(a) Please refer to Attachment IPUC 2 for the generation type for each Schedule
135 customer as of July 8,2019.
(b) The Company does not have production meters on each of its Schedule 135
customers and therefore does not have this data.
(c) The Company does not have production meters on each of its Schedule 135
customers and therefore does not have this data.
(d) The Company is unsure what is meant by "net annual generation". For
purposes of this request, the Company assumes that "net annual generation"
means exported energy. Based on the foregoing assumption, the Company
responds as follows:
This information is not readily available for all current Schedule 135
customers. Please refer to Attachment IPUC 2 for the annual exported energy
for each Schedule 135 customer during the calendar year 2017 period used by
the Company in its filing.
Recordholder:
Sponsor:
James Zhang
Robert Meredith
PAC-E-19-08 / Rocky Mountain Power
August 1,2019
IPUC ls Set Data Request 3
IPUC Data Request 3
Please explain how the Results of Operations report information was used to
develop the NEM COS Study submitted in this filing.
Response to IPUC Data Request 3
The results of operations (ROO) report provides the revenues required to offset
the costs of providing service to the Company's customers. Those costs, which
are then functionalized, classified and allocated, are compared with the actual
revenues collected for each customer class. This comparison informs the
Company of changes in rates that should be made in order to align costs incurred
by different customer classes with the revenues collected from those classes.
Recordholder:
Sponsor:
Mitchell Dean
Robert Meredith
PAC-E-I9-08 / Rocky Mountain Power
August 1,2019
IPUC l't Set Data Request 4
IPUC Data Request 4
Please explain why the 2018 Results of Operations report was not used in
development of the NEM COS Study submitted in this filing.
Response to IPUC Data Request 4
When the Company prepared the net energy metering (NEM) cost of service
(COS) study, the2017 results of operations (ROO) report was the most current
and accurate report available.
Recordholder:
Sponsor:
Mitchell Dean
Robert Meredith
PAC-E-19-08 / Rocky Mountain Power
August 1,2019
IPUC 1't Set Data Request 5
IPUC Data Request 5
Please provide copies of Orders in other jurisdictions where a methodology
similar to what the Company has proposed for valuing exported energy of net
metering customers has been approved and implanented.
Response to IPUC Data Request 5
The Company is unaware of other instances in which a time-varying export credit
has been used; however, in addition to the Company in Utah, there are utilities in
Aizona that use an export credit structure similar to the Company's proposal in
this proceeding, but are not time-varying.
In Docket No. 14-035-114, the Public Service Commission of Utah (UPSC)
approved the implementation of a transition program where an export credit is
applied to energy exported to the grid from customer generators. The value of the
exported credit was the result of a negotiated settlement and based on a
percentage ofthe average energy rate ofcorresponding rate schedules.
Attachment IPUC 5-l includes a copy of UPSC's order. As contemplated in that
settlement, Phase I in Docket No. 17-035-61 has concluded and Phase II is
scheduled to continue in2020 to further evaluate the export credit.
The Arizona Public Service Company implemented a similar export credit rate
pursuant to the Arizona Corporation Commission's Decision76295 in Docket E-
01345A-16-0036, attached as Attachment IPUC 5-2.
Recordholder:
Sponsor:
Mitchell Dean
Robert Meredith
PAC-E-19-08 / Rocky Mountain Power
August 1,2019
IPUC I't Set Data Request 6
IPUC Data Request 6
Please explain how the Company's meter functionality can support the net billing
proposal made in this filing. Specifically, please explain how all energy exported
and all energy delivered by customers under Schedule 136 be measured in real
time or instantaneously.
Response to IPUC Data Request 6
The meter will be prograrnmed with two separate sets of energy registers. One set
of registers will record the energy delivered to the customer in accordance with
their applicable service schedule. The other set will record the energy received
from the customer in on-peak and off-peak registers per Schedule 136. The meter
samples the voltage and current and updates the appropriate energy register every
second based on the direction of energy flow and the meter clock.
Recordholder: June Sabbah
Sponsor: Robert Meredith
PAC-E-19-08 / Rocky Mountain Power
August 1,2019
IPUC 1$ Set Data Request 7
IPUC Data Request 7
Please explain why the Company's proposal did not include a capacity credit.
Response to IPUC Data Request 7
Because there are no performance guarantees or damage provisions in the Idaho
Schedule 136 tariff, the Company considers the output it purchases under that
tariff to be non-firm (NF). NF purchases are not counted toward capacity
requirements. To the extent a customer desires to make a firm commitment to sell
to the Company, the qualitring facility (QF) rates applicable to solar resources
under the Surrogate Avoided Resource (SAR) methodology would be applicable
and would include capacity values in accordance with that methodology. For
additional details on the NF nature of the proposed tariff, please refer to page 3
and 4 of the direct testimony of Company witness, Daniel J. MacNeil.
Recordholder: Daniel MacNeil
Sponsor: Daniel MacNeil
PAC-E-19-08 / Rocky Mountain Power
August 1,2019
IPUC lst Set Data Request 8
IPUC Data Request 8
Please provide the work papers supporting a $2.1llMwhr line loss value.
Response to IPUC Data Request 8
The work paper supporting Exhibit I to the direct testimony of Company witness,
Daniel J. MacNeil was included on the CD submitted to the Idaho Public Utilities
Commission (IPUC) with PacifiCorp's Application on June 14,2019. Please refer
to file "Exhibit No 1".
For ease of reference, please refer to Attachment IPUC 8 which provides a copy
of the above referenced work paper supporting Exhibit I to Mr. MacNeil's direct
testimony, as well as other values referenced in that testimony.
Recordholder: Daniel MacNeil
Sponsor: Daniel MacNeil
PAC-E-I9-08 / Rocky Mountain Power
August 1,2019
IPUC I't Set Data Request 9
IPUC Data Request 9
Please explain why the Company proposes to use the SAR methodology for
determining the avoided cost of energy rather than other options, such as demand-
side management avoided cost pricing or Mid-C market prices.
Response to IPUC Data Request 9
The Surrogate Avoided Resource (SAR) methodology has already been approved
by the Idaho Public Utilities Commission (IPUC) for use with resources of less
than 100 kilowatts (kW) who wish to sell their output as qualifuing facilities (QF).
If an alternative data source is used for exports under the net billing program,
differences in vintage, timing, and methodology could create a disconnect
between the SAR methodology values available to a QF or the altemative values
available to a net billing customer. Allowing generators to pick from the higher of
two options in that manner is not consistent with non-participating customer
indifference - as other customers cannot be indifferent to two different values for
the same resource. To the extent there is concern about the SAR methodology
values, it would be appropriate to update that methodology. In addition, the SAR
methodology values are already updated annually, so it is administratively
efficient to use to value export credits, and any additional process required to keep
it updated is limited.
Demand-side management (DSM) avoided cost pricing is typically conducted
based on the preferred portfolio following completion of an Integrated Resource
Plan (IRP). The avoided cost of energy efficiency (EE) as a long-term resource is
representative of that resource's contribution to the reduction of the Company's
total system production costs. The EE avoided cost methodology calculates the
cost of the avoided resources as a result of removing the EE selection in the IRP.
Because that process is focused on what resource(s) would have been selected in
the absence of EE and the system's long-term supply requirements, it may not
reflect the best information available for net billing energy. The use of EE
avoided costs would also require adjustments to account for differences in the
load shape of EE resources and net billing energy exports. EE savings also are
distinct from generation exports with regard to their reserve obligations.
Reductions in load due to EE reduce the Company's reserve obligations, whereas
net billing energy exports may need to be supported by both contingency and
regulation reseryes.
Lastly, it is not clear that Mid-Columbia (Mid-C) market prices arc avery
accurate approximation of the avoided costs associated with net billing energy
exports delivered to the Company in its Idaho service territory, as the IPUC has
already approved the SAR methodology for comparable resources. In addition,
market prices represent firm market purchases, which reduce the contingency
PAC-E-19-08 / Rocky Mountain Power
August 1,2019
IPUC l$ Set Data Request 9
reserves that must be held on Company resources, resulting in an operating
reserve distinction comparable to that described for EE above.
Recordholder:
Sponsor:
Daniel MacNeil / Angela Long
Daniel MacNeil
PAC-E-I9-08 / Rocky Mountain Power
August L,2019
IPUC 1s Set Data Request 10
IPUC Data Request L0
Please provide work papers supporting Ms. Steward's claim on page 4 of her
direct testimony that "The primary driver of the cost shift is that net metering
customers are compensated at the full retail rate for excess output from their
onsite generation."
Response to IPUC Data Request 10
Please refer to the direct testimony of Company witness, Robert M. Meredith,
pages 8 through 10 for a further explanation of the cost shifting caused by net
energy metering (NEM) customers and why it is largely attributable to full retail
rate compensation of exports.
Please refer to Attachment IPUC 10-1 for the cost of service (COS) study results
Please refer to Attachment IPUC 10-2 for the comparison of NEM and non-NEM
energy profiles.
As seen in the COS study results, residential NEM and Schedule 23 NEM
customers incur a large amount of cost shifting, while Schedule 6 NEM customers
do not. The cost shift occurs in the first two groups because residential NEM and
Schedule 23 NEM customers are able to avoid fixed costs related to their peak
demand usage by offsetting their volumetric energy charges related to their
demand with export credits. In contrast, the rate design to which Schedule 6 NEM
customers are subject employs a demand charge that is based on peak load rather
than volumetric use.
The claim that the primary driver of the cost shift is that net metering customers
are compensated at the full retail rate for excess output from their onsite
generation is also substantiated by Exhibit No. 8 in the Company's filing which
shows that if residential NEM customers had been subject to the Company's net
billing program, the subsidy which they impose upon other customers would be
reduced by 89 percent.
Recordholder:
Sponsor:
Robert Meredith
Robert Meredith
PAC-E-19-08 / Rocky Mountain Power
August 1,2019
IPUC l't Set Data Request 11
IPUC Data Request 11
Mr. McNeil claims on page l0 of his direct testimony that "[h]igher hourly energy
prices imply higher costs for integration . . ." Please explain why it would cost
more to integrate customer generation at peak or at times the energy prices are
higher when the energy produced by customers at that time would lessen peak
load requirements.
Response to IPUC Data Request 11
Integration costs represent the opportunity cost of holding flexible resources in
reserve so as to integrate or "back-up" the output from variable resources. As a
simple example, if l0 megawatts (MW) are expected from a variable resource, but
there is a chance only 8 MW will be delivered, the Company must ensure it has an
additional 2 MW available to make up the difference. Integration requirements are
explained in more detail in the Company's 2017 Flexible Reserve Study (FRS)
which is included in PacifiCorp's20lT Integrated Resource Plan (IRP),
specifically Volume II, Appendix F. That study accounts for the benefits of
diversity between load, wind, solar, and other resources in determining reserve
requirements. Diversity reduces the reserves necessary to cover the variability in a
pool of resources, relative to the variability of each resource on its own.
In the example above, if the 2 MW reserve requirement occurs in a low-price
hour, foregoing a sale from a flexible resource that is held in reserve will
generally have a low opportunity cost, as relatively low-cost resources will be on
the margin. To the extent out-of-the-money flexible resources are available but
backed down due to economics in low-price intervals, the cost of holding back
flexible resources could be zero. Conversely, if the 2 MW reserve requirement
occurs in a high-price hour, holding reseryes will generally have a high
opportunity cost, as resources that are backed down to provide reserves will
forego high-price market sales.
PacifiCorp's2017 IRP is publicly available and can be accessed at the following
website link:
http ://www.paci fi corp. com/es/irp.html
Recordholder:
Sponsor:
Daniel MacNeil
Daniel MacNeil
PAC-E-19-08 / Rocky Mountain Power
August 1,2019
IPUC I't Set Data Request 12
IPUC Data Request 12
Please provide Exhibits 1 - 4 and 6 -9, in Excel format with executable formulas
intact.
Response to IPUC Data Request 12
Exhibit I - Please refer to the Company's response to IPUC Data Request 8
Exhibit 2 - Please refer to Attachment IPUC l2-l for the calculation of the
application fee.
Exhibit 3 - Please refer to Attachment IPUC l2-2 for the value of excess net
energy metering (NEM) credits.
Exhibit 4 - Please refer to the Company's response to IPUC Data Request 10,
specifically Attachment IPUC 10-1 for the results of the cost of service (COS)
study.
Exhibit 6 - Please refer to Attachment IPUC I2-3 for the average savings for
generated energy.
Exhibit 7 - Please refer to Attachment IPUC T2-4 for the estimated photovoltaic
(PV) system payback.
Exhibit 8 - Please refer to Attachment IPUC l2-5 for the impact to COS from the
proposed changes.
Exhibit 9 - Please refer to Attachment IPUC 12-6 for the altemative transition
plan summary.
Recordholder:
Sponsor:
Mitchell Dean
Robert Meredith