20200106Comments.pdf

JOHN R. HAMMOND, JR.
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03s7
IDAHO BARNO.5470
RECEIVED
i:0 Jil{ -5 Al{ ll: b7
Attomey lbr the Commission Staff
BEFORE THE IDAHO PUBLIC UTTLITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION REQUESTING
TO MODIFY SCHEDULE 95 TO REVISE
THE COMPANY'S VOLUNTARY
RENEWABLE ENERGY PROGRAM
CASE NO, AVU.E-I9-12
COMMENTS OF TTIE
COMMISSION STAFF
The Staffof the Idaho Public Utilities Commission, submits the following comments
regarding the above referenced case.
BACKGROUND
On November 12,2019, Avista Corporation dba Avista Utilities ("Avista" or "Company")
filed an Application requesting Commission authorization to modify its voluntary renewable
energy program Schedule 95 "Optional Renewable Power Rate" ("Program") in an effort to
effectively manage costs, provide customers with greater choice, and to support renewable energy
within its rcgion. Application at 1. The Company requested the Application be processed by
Modified Procedure and that the proposed revisions for its Program become effective on
January 1,2020.
STAFF COMMENTS JANUARY 6.2020
I '-' I I' lY
Street Address for Express Mail:
1133i W CHINDEN BLVD, BLDG 8, SUITE 20I.A
BOISE, ID 83714
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On December 16,2019, the Commission issued its Notice of Application, Notice oi
Modified Procedure and Order wherein it suspended the proposcd effective date ofthe Agreement
for a period of tive (5) months and thirty (30) days from the proposed effective date unless the
Commission issues an earlier Order. See Order No. 34505.
Since 2002, Avista has offered its electric customers the opportunity to voluntarily supporl
the development of renewable energy by participating in the Company's "Buck-a-Block" option
under the Program. Id.at21 see a/so OrderNo.28948. Avista's wind power option was priced in
increments, or "blocks," of $ 1 . 1d Each $ I block of wind purchased by customers equaled 55
kilowatt-hours ("kwhs"). 1d
In 2004, the Company modified the Program from an Optional "Wind" Power Rate to an
Optional "Renewable" Power Rate. Id. The Company represents the revisions to the Program
also included the cost of renewable energy certificates ("RECs") associated with the rencwable
resource. L/. The RECs were primarily from wind power generated at the Stateline Wind Energy
Center, but could also come from other "Green-e certificd" resources. 1d. The revised Program
continued to include voluntary participation in increments of $l per b\ock. Id. However, blocks
were modified to reprcsent 300 kwh of renewablc energy as opposed to the prcvious 55 kWh. /d.
ln 2014, the Company filed additional rcvisions to the Program, allowing surplus funds to
be used for rooflop solar grants for installations on commercial buildings in Idaho and
Washington. Id.; see also Order No. 33218 at2. The Company represents $347,000 in grants
were made to fund nine (9) projects in Idaho and Washington. Id. at 3.
The Company stated that in 2019 it conducted customer research to better inform revisions
to the Program. Id. at3. The Company stated the customer feedback it received demonstrated: l)
the Company's customers are most tikely 1o choose participation in the Program amongst other
possible offerings, and 2) the information about the Program and what value it providcs is not
being communicated et'fectively to customers. 1d. Avista represented only 1 percent of its
customers in Idaho participate in the Program. /r/. Avista also asserted in recent years the cost ol'
RECs have increased but the level of Program participants has decreased. 1d. at 4. As a result,
the Company stated thc current operating reserves for the Program are approximately $38,000
causing Avista concern that it may not be able to cover its costs ifthese trends continue. 1d.
Based on the foregoing, Avista alleged there is a need to educate customers on the benefits ofthe
2STAFF COMMENTS .IANI]ARY 6.2020
Program. 1zl. at 4. Further, the Company is seeking to provide additional choices to its customers
through revisions to the Program that improve its sustainability. Id
The Company stated in order to provide more clarity, mitigate the rising costs of RECs
and provide choices that matter, the Company is proposing to of'lbr two REC options for
customers to choose from, both ol'which will continue to offer RECs from wind, solar or other
qualified alternative energy souces. Id. at 5. The Company is also proposing to change the name
ofthe Program to "My Clean Energy" in an elfort to help customers better understand it. Id.
The Company's proposed options are: (l ) National Blocks - Participants can purchase 300
kWh "blocks" for $l under the national option. 1rl. RECs procured under this option will be
sourced from renewable generation anywhere in the United Statcs. .Id. The Company asserts this
provides customers a low cost option to continue supporting renewable energy; and, (2) Reeional
Blocks - Participants can purchase 100 kwh "blocks" for $1 under the regional option. Id. RECs
procured under this option will be sourced tiom generation located in the Western
Interconnection, with preference given to the Northwest rcgion including Idaho, Washington,
Oregon, California, Montana and British Columbia. 1d. This option provides customers an
opportunity to support regional renenable energy at a price point that is more reflective ofthe
cunent REC market. Icl.
The Company states under the revised Program current participants will be given the
choice to participate in either the national or regional option, but will automatically be defaulted
into the national option ifthey do not specify a preferencc. 1d. at 6.
STAFF ANALYSIS
The Program is a voluntary option ibr customers who want to reduce the environmental
impact of their electric use with the Company tkough block purchases of bundled RECs.
Program participation declined and the evidence ofrising REC prices prompted the Company to
make Program updates that include additional participant education, outreach, and the creation of
two block purchase options. SlalT recommends the Commission allow the Company to create
National and Regional Block pricing options, and to rename the Program "My Clean Encrgy."
Statf also recommends the Company work with Staff to conduct a yearly performance review
based on filed annual Program data.
-lSTAFF COMMENTS JANt.JARY 6,2020
Program Updates
Program participation has decreased and the price of RECs has increased. Accordingly,
the Company proposes to provide additional education, outreach, and customer choices 10 ensure
the Program remains sustainable. See Application at 3. Surveys, customer panels, interviews,
and additional Company research revealed that participation may increase with renewed effort to
communicate Program value and benefits. Id. at3 and 6. The Company proposes new block
purchase options and R-EC pricing to increase customer options lor participation and has
requested a program name change to "My Clean Energy" to makc the intenl ofthe Program clear.
/d. at 5. The Company also states it will modifu the Ianguage and positioning on the Company's
wcbsite in a manner that drives participation and promotes customer awareness and support ol
renewable eneryy. Id. al 6.
Two New Block Purchase Options
Currcntly, the Program lets customers buy a 300 kWh block of renewable energy for $1.
The Company proposes two new block options for participants ol'the Program: National Blocks
or Regional Blocks. See Application at 5. The National Blocks option continues to allow
participants to purchase 300 kWh blocks lbr $ I . This option is sourced liom renewable
generation throughout the United States and may provide a better opportunity to purchase RECs
at the most competitive price. The Regional Blocks purchase option sources RECs fiom the
Northwest, but at a reduced quantity of 100 kWh fbr $1. This option allows participants to
support renewable resources located in the No(hwest. Both the National Blocks and Regional
Blocks purchase options will fund solar grants in Idaho and Washington, when Program revenues
exceed costs.
If the Commission approves the two new block options, thc Company will ask participants
to choose either the National or Regional Blocks purchase option. 1d. at 5. The Company
requested that participants who do not respond be assigncd to the National Blocks option. ft/.
Staff finds it reasonable for existing participants to default to the National Blocks option because
it allows them to buy at their current Program rate and kwh selcction.
4 JANUARY 6,2O2OSTAFF COMMENI'S
Financial Analysis
Staffreviewed the Company's REC purchases from 2015 to 2019 as well as a projected
2020 budget for the Program with the proposed two blocks. Staff found the changes in REC
prices reflect the Company's assertions ofrising prices for RECs in the Application. Id.at4.'fhe
Company purchased approximately 70 percent oiits RECs in this Program from 2015 to 2019
from Washington, Oregon and Idaho, with 34 percent of RECs purchased from Idaho. The
Company's purchase ofRECs outside Washington, Oregon, and Idaho do not appear to be less
expensive than local REC purchases, but Staffbelieves the Company may find cheaper RECs to
purchase on a national level.
The Company's proposed 2020 budget lbr the Program appears reasonable and includes
some surplus funds that could support solar grants or unexpectedly higher costs lor REC
purchases or operating expenses.
Program Implementation and Audit
The Company cunently files an annual Buck-a-Block report, including program data, with
the Commission in February, and the Program is certified through the Center for Resource
Solutions. The Company proposes to track Program performance to determine customer
satisfaction, awareness, and participation in a similar manner. Id. al7. The enrollment and
voluntary participation details of the Program remain unchanged, but the Company will notify
cunent participants that the Program name will change, additional block purchase options will
become available, and existing participants have the choice of which block purchase option they
would like to suppon. /d. at 6.
StafTrecommends that the Company continue to lile a Renewable Energy program annual
report with Program data that includes: (1) annual and cumulative subscription data; (2) RIC
purchase detail with generator, location, quantity, price per REC, year, total annual purchase, and
weighted average price by year; (3) detailed breakdown of administrative and marketing costs; (4)
summary ofProgram marketing efforts and community education and outreach; (5) surplus fund
balance and detailed account information; (6) carbon ol'l'set content label, and; (7) detailed grant
projcct information that includes implementation dates and costs.
)STAFF COMMEN'IS JANUARY 6,2O2O
STAFF RECOMMENDATIONS
Staffrecommends:
l. The Commission allow the Company to create the National Blocks purchase option of
300 kWh for $l in the Program, to become effective upon the Commission's final
order,
2. The Commission allow the Company to create the Regional Blocks purchase option of
100 kWh for $1 in the Program, to become effective upon the Commission's final
order.
3. The Commission allow the Company to rename the "Buck-a-Block" progam to "My
Clean Energy."
4. The Commission direct the Company to file the annual report with Program data and
work with Stalf to evaluate yearly Program performance.
tJL(,Respectfully submitted this day of January 2020
Jo
D
Hammond, Jr.
Attorney General
Technical Stall': Brad Iverson-Long
Rachelle Farnswofih
i:umisc:comments/avucl9. i2jhblrf comments
6STAFF COMMENTS JANUARY 6,2020
CERTIFICATE OF SERVICE
I HEREBY CERTIFY TI.IAT I HAVE I'HIS 6TH DAY OF JANUARY 2020.
SERVDD THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. AVU.E.I9-I2, BY MAILING A COPY THEREOF. POSTAGE PREPAID,
TO THE FOLLOWING:
DAVID J MEYER
VP & CHIEF COUNSEL
AVISTA COR}ORATION
PO BOX3727
SPoKANE WA99220-3727
E-MAIL: david.mcyer(ir)avistacorp.com
avistadockcts(Dtavistacorn.com
LINDA GERVAIS
MGRRTGUT,ATORY POLICY
AVISTA CORPORATION
PO BOX3727
SPoKANE WA99220-3727
E-MAIL: linda.qcrvais@,avistacorp.com
,L,/je^-
SECRETARY
CERTIFICATE OF SERVICE