avue992.swr.doc

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]

Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF AVISTA CORPORATION DBA AVISTA UTILITIES -WASHINGTON WATER POWER DIVISION FOR AN ORDER APPROVING THE ADDITION OF A NET METERING OPTION TO THE COMPANY’S ELECTRIC SMALL POWER PRODUCTION AND COGENERATION TARIFF SCHEDULE 62.
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CASE NO. AVU-E-99-2

COMMENTS OF THE COMMISSION STAFF

COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of Application, Notice of Modified Procedure and Notice of Comment/Protest Deadline issued on March 29, 1999, submits the following comments.
On March 1, 1999 Avista Corporation d.b.a. Avista Utilities—Washington Water Power Division (Avista; Company) filed an Application with the Idaho Public Utilities Commission (Commission) proposing a revision to the Company’s Electric Tariff Schedule 62—Cogeneration and Small Power Production Schedule—Idaho. Avista proposes adding a net metering option to its Electric Tariff Schedule 62. “Net metering” as defined by the Company means measuring the difference between the electricity supplied by an electric utility and the electricity generated by a customer-generator that is fed back to the electric utility over the applicable billing period.
The Company’s proposed tariff sheets 62F and 62G establish the terms and conditions under which the net metering option is available. These terms and conditions include:
customer eligibility
cost to customer-generator of metering and interconnection
standards
balances of generation and usage by the customer-generator
remaining unused kwh credits
reversion to previous service

STAFF ANALYSIS
The primary reason to implement a net metering tariff is to encourage private investment in renewable energy resources. Net metering can be a simple, effective means of achieving this objective. Net metering programs are attractive to customer-generators because they enable them to generate when they can, rely on the utility when they cannot generate, and be credited for generation that exceeds their own needs. Customers do not need to install energy storage devices or alter their consumption patterns to precisely match their ability to generate.
The net metering tariff revisions proposed by the Company are identical to revisions which have recently been included in the Company’s Washington tariff. The Company is proposing the revisions in Idaho in order to have a consistent net metering policy throughout its service territory. The net metering tariff was prompted in Washington by Substitute House Bill 2773, passed by the Washington Legislature in 1998, which requires all electric utilities in the state to make net metering available to eligible customers.
To be eligible for the net metering option, a customer-generator must own a facility for the production of electrical energy that:
Uses as its fuel either solar, wind, or hydropower;
Has a generating capacity of not more than twenty-five kilowatts;
Is located on the customer-generator’s premises;
Operates in parallel with the electric utility’s transmission and distribution facilities; and
Is intended primarily to offset part or all of the customer-generator’s requirements for electricity.

The Company has also included a provision in the tariff that restricts eligibility if the cumulative generating capacity of net metering systems within Avista’s Idaho and Washington jurisdictions equals 1.52 MW, which is 0.1% of the Company’s retail peak demand during 1996. In order to reach this limit, there would have to be approximately 60 projects, each 25 kW in size. Of course, many more projects could be developed if the projects were smaller. Staff believes this restriction is intended to limit the revenue impact associated with the tariff; nevertheless, Staff is not concerned that the proposed limit will be overly restrictive. The Company estimates that less than three existing customers in Idaho will initially take service under the tariff revisions. Staff believes it is highly unlikely the limit would be reached in the combined state jurisdictions in the foreseeable future.
Staff believes the 25 kW limit on project size is also reasonable. It is large enough that nearly all residential customers, and perhaps many small commercial customers, could participate, yet small enough that it forces commercial power generation ventures to utilize other existing sections of the tariff under which payments are based on the utility’s avoided costs.
Another important feature of the tariff is the restriction that any unused kWh credits not be allowed to be carried over by the customer beyond the start of each calendar year. Staff believes this restriction helps to reinforce an objective of the tariff to offset part or all of the customer-generator’s requirements for electricity.
The Company’s proposed net metering tariff includes a requirement that customers maintain $200,000 of liability insurance. This is a departure from the Company’s standard practice of requiring $2,000,000 of liability insurance. Avista states that because it is self-insured for injuries and damages and carries a $2,000,000 deductibility clause, the Company usually requires that entities connected to its system maintain a minimum of $2,000,000 insurance in the event of a claim relating to injuries and damages against the utility. To date, the power generators interconnected to the Company’s system have been of sufficient size that this insurance requirement has not been an issue. However, the requirement of $2,000,000 of insurance coverage may not be economic for small generators with production under 25 Kw since this amount of insurance would cost from $300 - $600 per year. Just to cover the insurance premium, a customer would have to generate the equivalent of about six months of average household usage. Consequently, the Company proposes to require a lesser amount of liability insurance, i.e., $200,000, an amount that will still offer some degree of protection, yet a level that would be covered under most homeowner’s existing insurance policies. Nearly all homeowner’s policies include a minimum of $100,000 of liability coverage, and many include $300,000 of liability coverage. Staff believes the Company’s proposed liability insurance requirement is reasonable and can be easily met by all customers.
Customers electing the net metering option will be connected using a standard kilowatt-hour meter capable of registering the flow of electricity in two directions. The customer must install all required interconnection and safety equipment at his own expense. Customers must also pay the utility’s monthly basic charge under the appropriate schedule as compensation to the utility for services such as billing, metering, and accounting. Staff believes these requirements are also reasonable.

STAFF RECOMMENDATION
Staff recommends the Schedule 62 tariff revisions be approved as proposed by the Company. Staff believes the requirements of the tariff are reasonable, and believes the revenue effects on the Company will be extremely minor given the few customers expected to avail themselves of the tariff.

Dated at Boise, Idaho, this day of April 1999.

_______________________
Scott Woodbury
Deputy Attorney General

Technical Staff: Rick Sterling

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COMMENTS 3 APRIL 20, 1999