20141003Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF

FROM: KRISTINE SASSER
DEPUTY ATTORNEY GENERAL

DATE: OCTOBER 3, 2014

SUBJECT: AVISTA’S REQUEST TO USE AVAILABLE FUNDS FROM SCHEDULE
95 TO PROMOTE ROOFTOP SOLAR, CASE NO. AVU-E-14-10

On September 18, 2014, Avista Corporation filed an Application with the
Commission requesting revisions to its Schedule 95 – Optional Renewable Power Rate. The
Company seeks to use available/surplus funds from Schedule 95 to promote grants for rooftop
solar installations, 20 kW or smaller, on commercial buildings in Idaho. The Company requests
that its Application be processed by Modified Procedure. Avista further requests that the
revisions become effective November 14, 2014.
THE APPLICATION
Avista states that it is a proponent of utilizing a variety of energy resources as well as
offering energy efficiency measures, to provide safe and reliable service to its customers. The
Company’s Schedule 95 – Optional Renewable Power Rate – allows customers to purchase
blocks of renewable power. In furtherance of this objective, the Company would like to expand
the awareness of renewable energy generation options, specifically by funding locally-owned,
commercial solar, using funds from its current Schedule 95.
Avista explains that, beginning in 2002, Avista has offered electric customers the
opportunity to voluntarily support the development of renewable energy by participating in the
Company’s Buck-a-Block program under its Schedule 95. Avista’s wind power option was
priced in increments, or “blocks,” of $1.00. Each $1 block of wind purchased by customers
equaled 55 kilowatt hours (kWh).
In 2004, the Company filed revisions to its program. Avista modified the program
from an optional wind power rate to an optional renewable power rate. Avista states that these
DECISION MEMORANDUM 2
revisions also reflected a lower wholesale cost of wind power to Avista and represented the cost
of renewable energy certificates (RECs) associated with the renewable resource. The RECs were
primarily from wind power generated at the Stateline Wind Energy Center, but could also come
from other “Green-e certified” resources. The revised program continued to include voluntary
participation in increments of $1 per block. However, blocks were modified to represent 300
kWh of renewable energy as opposed to the previous 55 kWh. Avista explains that this created
an opportunity to enhance the Buck-a-Block program. Presently, this voluntary program
continues to allow customers the choice to purchase a “block” of renewable power equal to 300
kWh that is produced through regional wind or solar projects for $1 a block.
According to Avista, approximately 3,500 customers purchased nearly 227,000
blocks (68,000 MWh) in 2013. All of the costs and benefits stay within the program. The Buck-
a-Block program requires regular program administration, promotion, and communication with
customers. The intent of the program is to continually match funds collected with the annual
program costs while balancing the need to collect enough funding to meet potential growth and
potentially higher priced RECs. However, due to the availability of low-cost RECs in recent
years and a plateau in subscription levels, it has resulted in surplus revenues that exceed the costs
by approximately $200,000. This has prompted the Company to explore additional ways to
promote and acquire additional renewable energy for the program.
The Company proposes to use, when available, any available funds from Schedule 95
to promote grants for rooftop solar installations, 20 kW or smaller, on commercial buildings in
the Company’s service territory in Idaho and Washington. Successful grant recipients would
agree to allow their installation to be made available for the education of its building occupants
and members of the community on the merits of solar energy generation and the Buck-a-Block
program. Preference for grant recipients would be given to school districts and buildings where
the visibility of the installation will have the greatest impact for both educational purposes as
well as solar energy generation. Geographic distribution throughout the Company’s service
territory will also be considered as part of the evaluation.
Avista estimates that the existing $200,000 surplus would fund the installation of 6-8
small projects (5 kW or less) or 2 larger projects (20 kW or less).1 After application and
1 Future costs may vary based on market conditions, the size of the installation and where the equipment is
manufactured.
DECISION MEMORANDUM 3
screening, grant recipients would be awarded partial or full funding that could fund the cost of a
rooftop solar installation, not to exceed $70,000 per site. Costs and risks associated with a site
feasibility or assessment study, labor and contracting costs related to the installation, and
ongoing maintenance will be the responsibility of the grant recipient.
STAFF RECOMMENDATION
Staff has reviewed Avista’s Application and recommends that the case proceed
through the use of Modified Procedure. In order to allow adequate time for review and
discovery, Staff recommends that the Commission suspend Avista’s proposed November 14,
2014, effective date.
COMMISSION DECISION
Does the Commission wish to process this case by Modified Procedure and suspend
the proposed effective date of November 14, 2014, pursuant to Idaho Code §§ 61-622 and 61-
623?

M:AVU-E-14-10_ks