20020514Idaho Farm Bureau Federation Comments.pdf

IDAHO FARM BUREAU FEDERATION
P.O.Box 167 500 W.Washington Street
Boise,Idaho 83701-0167 [phone]
May 10,2002 FAX [phone]
Ms.Jean D.Jewell
ldaho Public Utilities Commission
472 West Washington
P.O.Box 83720
Boise,ID 83720-0074
RE:Case No.IPC-E-02-04 ldaho Power Company's Application For
Amendments to Schedule 84 --Net Metering.
Dear Ms.Jewell:
On behalf of the Idaho Farm Bureau,which represents more than 52,800 Idaho
families,I am pleased to offer the followingcomments with regard to Idaho
Power's proposed modifications to their net-metering program.
Idaho Power's net-metering proposal for all service classes besides schedule 1
and schedule 7 is a good start,but it must be significantly improved if it is to be of
any practical value to the customers it will serve.It appears to have been crafted
to meet the bare minimum requirements for compliance with PUC Order No.
28951 rather than a good faith effort to work with business,industry and
agriculture to propose a viable program which would benefit all involved.
Several items in the proposal appear to be aimed at preventing,rather than
fostering participation in the program.For example,paying sellers only 85%of
the Dow Jones Mid-Columbia Electricity Price Index (Dow Jones Mid-C Index)
prices for any excess generation is not explainedadequately in the proposal.
Twice,Ms.Drake testified before the Commission that sellers would receive
avoided cost rates for excess generation.However,the proposal and Ms.Drake,
in two other instances in her testimony,indicate that sellers will only receive 85%
of avoided energy cost.
This is inconsistent and unfair.There is no reason that sellers should be
penalized15%on their excess generation,especially since they are netted on a
monthlybasis.Many customers will be generating the bulk of their power in
months when their electricity consumptionis low.For instance,for irrigators
using wind turbines,power will be primarily generated in the winter and spring,
Home Office:P.O.Box 4848 1001 N.7th Avenue'Pocatello,Idaho 83205-4848 [phone]
Jones Mid-C Index price,which is currently less than half of the retail rates he is
paying,he has to double again the size of the turbine to hope to break even over
the course of a year.Now he is up to around a 300 kW turbine just to cover the
cost of the electricity of one 100 hp pump.
This is just a small example.What about those larger farmers who have severalpumps?There is no way they can hope to participate with these unrealistic size
restrictions.A better approach would be to not restrict the nameplatecapacity of
the generation equipment,but to only allow generation up to a certain percentage
over consumption at each meter,say three to five percent,on an annualized
basis.That way farmers could take advantageof economies of scale and put in
larger equipmentthat is more cost effective,yet they will be restricted from
generating excess power.
The interconnection agreementcould cover all the details of the feasibility of
interconnecting the proposed equipment.If the proposed installation were too
large for the existing transmission lines,it would be up to the customer to pay for
any upgrades necessary.However,under the current proposal,or any
modifications,it is extremelyimportantthat any interconnection fees that are
charged be limited to the actual costs to Idaho Power.This should not be a
windfall for the utility,nor should it be a subsidy to the customer.
We are still troubled by the proposed cap of 2.9 MW of cumulative nameplate
capacity.Idaho Power has indicated that this one tenth of one percent of the
company's retail peak demand is an "industry standard"and it must be in place to
protecttheir system from any equipmentoverloads should all net metering
generationcease functioning at one time.This event seems highly unlikely,
especiallywhen you consider the_currentnormal load demand fluctuation
system-widevaries far more than that on a daily basis.We believe a far more
reasonable cap would be one percent or 29 MW with no single customer being
allowed to connect generation in excess of 1 MW as is currently the case underAshland,Oregon'slocal net metering law.This would allow for far wider
participation in the program.
It is our contention that the above-mentioned restrictions regarding monthly
netting,discounting wholesale prices,the 100 kW nameplatecapacity,and the
2.9 MW cap will severelyrestrict the number of people willingand able to
participate in this program.The whole purpose of the Commission's Order N.
28951,as we understand it,was to encourage and promote participation.We
believe that there are equitablesolutions to all of these impedimentsthat will
allow Idaho Power to continue to supply reliable,consistent power while allowing
consumers to offset loads and generate clean,renewable power in a safe and
effective way.
Furthermore,we believe that ldaho Power is missing a golden opportunity for
self-promotion.It could position itself as a company that is environmentally
while most consumption will be in the summer months.Therefore,considering
the differential between the price they will receive when generating (85%of the
Dow Jones Mid-C Index),and the price they will pay when consuming (full retail),
they will have to generate more than 2.5 times the amount of electricity they
consume over the course of a year just to come out even at the end of the year.
This should be addressed in two ways.First,excess generation should be
credited at full Dow Jones Mid-C Index prices.There have been no reasons
given for the 15%discount in Idaho Power's proposal.Secondly,all power
generated on schedules other than 1 and 7 should be carried over for a one year
period so it can offset consumption at other times of the year.
NotwithstandingIdaho Power's argumentthat power is worth different amounts
depending on when it is generated or consumed,for net metering to truly serve
its stated purpose of allowingcustomers to offset all or part of their electrical
consumption,annualized billing is a necessity.This could easily be done by
carrying forward all generation at full retail price until it is offset by consumption
during the year.At the end of the year a check could be cut for any excess
generation over consumption at the wholesale rate.
In fact,we would not object to all excess generation being given to ldaho Power
at the end of the year,as many other states currently do,as long as all
generation were carried forward for a year and credited against consumption.
Net Metering is not supposed to be a money making project for generators,it is
supposedto be a way to offset their consumption.Unfortunately,Idaho Power's
proposal makes them offset their consumption by a factor of 2.5 to one.
As a side note,it is our understanding that avoided energy cost as used in the
Public Utilities Regulatory Policy Act means the cost avoided if the utility does not
build its next power plant.The cost of power from that next plantis what is
considered avoided cost.This cost reflects capital as well as variable costs
where as the Dow Jones Mid-C essentiallyreflects only variable costs.
Therefore,at the least,the avoided cost definition in the proposed schedule 84
should be changed to allow for actual avoided cost rates.
Restricting generating equipmentto 100 kW of nameplatecapacity is far too
restrictive.This requirement,in and of itself,will severely reduce the number of
people interested in participating in this program since many operators will be
unable to come close to offsetting their consumption with the proposed size
limitations.
For example,to offset the power consumption for six months use of a 100
horsepowerirrigation pump,a farmer would have to install a 150 kW wind turbine
once you factor in that wind only produces about 20 -30%of the time over the
course of a year.If you then factor in that during those months when he is not
consuming enough to offset his production,he will only get paid 85%of the Dow
friendly and is doing all that it can to distribute and diversify generation andsupportclean,renewable energy technologies.It could also capitalize on the
image of working with agriculture and business in this time of economic setback
to bolster rural economies and strengthen our electrical energy supply for thefuture.
We appreciate the opportunityto comment on this important issue.Please keep
us informed of any decisions,discussions or hearings regarding this matter.
Thank you for your consideration.
Sincerely,
Frank Priestley,Pre ent
Idaho Farm Bureau Federation
CC:IFBF Officers,Directors &Staff
Idaho Dept.of Water Resources
Idaho Power Company