20130531Said Rebuttal.pdf

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May 31 ,20'13
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
47 2 W est Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-12-27
Net Metering Service - ldaho Power Company's Rebuttal Testimony
Dear Ms. Jewell:
Enclosed for filing are an original and eight (8) copies each of the rebuttal
testimonies of Gregory W. Said and Matthew T. Larkin. One copy of each of the
aforementioned testimonies has been designated as the "Reporte/s Copy." ln addition, a
disk containing Word versions of the testimonies is enclosed for the Reporter.
Very truly yours,
K,-- 9,,7(*/dr*,^
Lisa D. Nordstrom
LDN:kkt
Enclosures
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
3013 tf,iy 3 t pi{ |l: {+g
ulLl?j #ii-ii;,.; .; ;r'., ;u;,
BEFORE THE TDAHO PUBLIC UTTLITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POI,IER COMPANY EOR
AUTHORTTY TO MODIFY ITS NET
METERING SERVTCE AND TO INCREASE
THE GENERATION CAPACITY LIMIT.
CASE NO.rPc-E-72-27
IDAHO POT,IER COMPANY
REBUTTAL TESTIMONY
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GREGORY W. SAID
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o.
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address is 7221 West Idaho Street, Boise, Idaho.
O. By whom are you employed and in what capacity?
A. I am employed by Idaho Power Company ("Idaho
Power" or "Company") as the Vice President of the
Regulatory Affairs Department.
Please state your name and business address.
My name is Gregory W. Said and my business
Pl-ease describe your educational background.
In May of 7975, I received a Bachelor of
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Science Degree in Mathematics with honors from Boise State
University. fn 1999, I attended the Public Utility
Executives Course at the University of Idaho and am now on
the faculty of that program coveri-ng "Regulation and
Ratemakitg." I have attended numerous additional
educational conferences throughout my career at Idaho Power
and am an active member of the Edison Electric Institute's
Rates and Regulatory Affairs Committee.
o.
Idaho Power.
Pl-ease describe your work experience with
A. f became employed by Idaho Power in 1980 as an
analyst in the Resource Planning Department. In 1985, the
Company applied for a general revenue requirement increase.
I was the Company wj-tness addressing power supply expenses.
In August of 1989, after nine years in the Resource
Planning Department, I was offered and I accepted a
SAID, REB 1
Idaho Power Company
1 positj-on in the Company's Rate Department. With the
2 Company's applicatJ-on for a temporary rate increase in
3 L992, my responsibilities as a witness were expanded.
4 Illhile I continued to be the Company wi-tness concerning
5 power supply expenses, I al-so sponsored the Company's rate
6 computations and proposed tariff schedul-es in that case.
7 Because of my combined Resource Planning and Rate
8 Department experience, I was asked to deslgn a Power Cost
9 Adjustment ("PCA") which would impact customers' rates
10 based upon changes in the Company's net power supply
11 expenses. I presented my recommendations to the Idaho
L2 Public Util-ities Commission ("Commission") in 1992, dt
13 which time the Commission established the PCA as an annual
t4 adjustment to the Company's rates. I sponsored the
15 Company's annual PCA adjustment in each of the years 1996
16 through 2003.
L7 In 7996, T was promoted to Director of Revenue
18 Requirement. I have overseen the preparation of revenue
t9 requirement informatj-on for regulatory proceedings since
20 that time.
2L In 2008, T was promoted to Director of State
22 Regulati-on, adding the area of Rate Design to my oversight
23 responsibil-ities.
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SAID, REB 2
fdaho Power Company
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In 2070, I was promoted to General Manager of the
Regulatory Affairs Department and in 207L, I was promoted
to Vice President of Regulatory Affairs.
As the Vice President of Regulatory Affairs, I
oversee and direct the activlties of the Regulatory Affairs
Department. These activities include the development of
jurisdictional revenue requirements, the oversight of the
Company's rate adjustment mechanisms, the preparation of
cost-of-service studies, the preparation of rate desj-gn
analyses, and the administration of tariffs and customer
contracts. I also have the primary responsibil-ity for
corporate policy regarding matters related to the economic
regulation of Idaho Power. I have testified before the
Idaho Pub1ic Utilities Commission and the Public Utility
Commission of Oregon on numerous occasions.
o.What is the purpose of your rebuttal testimony
in this matter?
A.The purpose of my rebuttal- testj-mony 1s to
respond to a number of reconrmendations regarding the
Company's net metering service and its purpose that have
been presented by the Commission Staff ("Staff"), Idaho
Clean Energy Association ("ICEA"), the City of Boise,
Pioneer Power, LLC ("Pioneer Power"), and the Idaho
Conservation League (*ICL"). There are five major issues
that I wish to respond to: (1) the purpose of the Company's
SAID, REB 3
Idaho Power Company
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f i1ing, (2) the j-ntent of net metering service, (3) the
proper treatment of excess net energy, (4) rate certainty
and the importance of a capacity cap, and (5) the Company's
position on the future of net meterlng service.
I. PI'RPOSE OF TEE FILI}IG
O. The City of Boise's witness, Mr. Rick Gilliam
states on pages 3 and 4 of his testimony that "[t]he
actions and changes proposed by IPCo in this case are
individually and coll-ectively designed to make customer on-
site generation more difficul-t to install and more
expensive to utilize, or both." Is this true?
A. No, that was certainl-y not Idaho Power's
intent. The Company's filing 1s intended to expand the
availability of net metering service under a design that is
both scalab]e and sustainable into the future.
P1ease expla j-n.
As Idaho Power considered expanding the
availability of net metering service, the Company
recognized that its traditional business model and rate
design were not developed to address the unj-que
characteristics of customers with distributed generation
('DG") resources or the transactions that net metering
service is intended to facilitate. Up until recently,
Idaho Power's business model- had been to generate (or
purchase) power at l-ocatj-ons some distance from customers
SAID, REB 4
Idaho Power Company
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and transport it through the transmissj-on and distribution
systems to customers, at the times and quantities needed to
supply energy to meet customer demand. The introduction of
DG systems has changed this model by allowing customers to
generate a portion of their energy needs 1oca11y. These
customers can also export any excess production to the
Company. Under this arrangement, customers expect that
Idaho Power will provide backup and reliability services to
ensure that they have power whenever they need j-t, whether
their DG systems are generating or not.
Residential- customers with DG systems are simil-ar to
other residentia] customers in that they use power for
residential purposes. However, residential customers with
DG systems are dissimilar to other resi-dential customers in
that they produce power, can offset thelr usage of power,
use the transmi-ssion and distribution services in a
different manner, and require backup services.
As customer characteristics change, it is important
to align prJ-ces with the products and services that
customers util-ize. This will position Idaho Power to
effectively respond to changing customer needs. Because
Idaho Power has historically provided a fuI1y bundl-ed set
of services that incl-uded generation, transmission,
distribution and customer service, rates were designed to
recover these costs in a simil-arly bundled fashion.
SAID, REB 5
Idaho Power Company
1 However, with increased adoption of DG systems, fewer
2 customers, particuJ-ar1y those with residentj-al end-uses,
3 wil-l require the ful-I bundle of services provided to
4 traditional customers. The unique nature of DG requires an
5 effectj-ve unbundling of reliabil-ity, standby, and power
6 quality servj-ces from traditionally bundl-ed utility
7 services. Corresponding changes need to occur in the
8 Company's rate structure to ensure that DG customers are
9 paying for services they receive.
10 O. Please expand upon why the Company feels that
11 it is i-mportant to modify the rate structure for net
1-2 metering service?
13 A. In general, Idaho Power's rates are designed
74 to recover the costs of all of the services provided
15 through both fixed and variable (or volumetric) charges.
16 However, in most instances, particularly with regard to the
71 residential class, almost all- of the Company's costs are
18 recovered through volumetric (per kilowatt-hour ('kwh") )
79 charges, including the Company's fixed distribution costs,
20 as well as other fixed administrative costs. Currently,
27 residential and small general service customers with DG
22 systems are able to avoid paying for the fixed costs for
23 distribution and administrative services even though they
24 continue to util-ize them.
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SAID, REB 6
Idaho Power Company
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The Company's proposal recognizes that residential
and small general service customers with DG systems are
dissimilar from traditional residential- and small general
service customers. The proposal to create new Schedules 6
and 8 addresses this dissimilarity by removing the recovery
of fixed distribution and administrative costs from the
energy charge for this unique set of customers and instead
recovering those costs through the proposed Servi-ce Charge
and Basic Load Capacj-ty charge. This change better aligns
cost recovery with cost causation for residential- and smal-I
qeneral servi-ce customers with DG systems.
IT. IIITEI{T OE NET METERING SERVICE
o.Several witnesses representing parties in this
proceeding suggest that net metering service should
encourage the installation of DG, particularly solar
generation. Is that the intent of net meterlng service?
A.No. Net metering service is a tariff service
availabl-e to customers who choose to instal-l- DG at their
homes or businesses and wish to interconnect to the
transfer of electricity to the Company through customer-
owned generation facilities with the intent of offsetting
all or a portion of a customer's energy usage. Under this
service, customers are able to offset their individual
energy needs directly by their own generation, and export
SAID, REB 7
Idaho Power Company
20 Company's electri-caI system. This servj-ce provides for
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any excess production to the Company. However, the Company
continues to provide backup, reliability, and customer
services to these customers to ensure that they have power
whenever they need it.
O.The City of Boi-se's witnesses Mr. Paul R.
Woods and Ms. Cece Gassner recommend that the Commission
reject the Company's application with regard to net
metering servj-ce modifications because they believe that
the proposed modlfications do not align with the City of
Boise's goals with regard to sustainability and economic
growth. Is the intent of net metering servi-ce to further
the sustainability and economic goals of the City of Boise?
A.No. While Idaho Power does not oppose the
City of Boj-se's goals in the areas of sustainabiJ-ity and
economic development, retainj-ng inapproprj-ate net metering
rates and service provisions is not the appropriate vehicle
for furthering those goa1s. The continued use of standard
residential and sma1I general service rates for customers
with DG installations via current net metering service
provisj-ons will not necessarily promote a sustainable
growth of solar and other renewable energy systems. A
growing net metering customer base results in a shrinking
pool of standard service customers who must pay for the
unrecovered fixed costs of the customers who are able and
willing to make DG investments.
SAID, REB 8
Idaho Power Company
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0.Mr. R. Thomas Beach's entire testimony is
dedicated to quantifying the value that DG provides in the
form of avoided costs. Is the intent of net metering
service to facil-itate a transaction whereby the customer is
compensated for their on-site generation based on the val-ue
of the energy produced?
A.No. The purpose of net metering servlce is to
provide customers an option to offset their own energy
consumptj-on with on-site DG. Staff witness Mr. Matt Elam
affirms this on pages 28 and 29 of his testimony. Mr. Elam
also notes that the Company has an option for customers who
wish to be compensated for the non-firm energy produced by
their on-site DG. That option is Schedule 86, Cogeneration
and Small Power Production Non-Eirm Energy ("Schedule 86").
o.On page 74 of Mr. Beach's testimony, he
suggests that energy produced by solar photovoltaic net
metering systems should be considered "firm" energy from an
energy valuation perspective. Do you agree with this
suggestion?
A.No. The U.S. Energy Information
Administration ("EIA") defines "firm power" to be "power or
power-produclng capacity, intended to be avai-1able at all
times during the period covered by a guaranteed commitment
to deliver, even under adverse conditions. "l EIA defines
t ht tp : / / w,n{w . -q a-L,ggy1t o o I s / g1 o s s a ry,/ index . c f m ? I d: E
SAID, REB 9
Idaho Power Company
1 "non-firm power" to be "power or power-produclng capacity
2 supplied or availabl-e under a commj-tment having limited or
3 no assured availability."' By definiti-on, the excess
4 generation output of DG systems taking net metering service
5 clearly represents a non-firm power or energy product.
6 This arrangement is unlike a Publ-ic Utility Regulatory
7 Policy Act of L918 (*PURPA") contract because there are no
8 performance requirements and there is no obligation to
9 generate.
10 O. Mr. Beach proposes a new method of val-uing the
11 energy produced by net metering. Is this method consj-stent
72 with the Commission's currently approved method for valuing
13 non-firm energy produced by renewable energy resources?
74 A. No. The Commission-approved method for
15 determining the value of non-firm generation such as that
76 produced by net metering systems is set forth in Schedule
l7 86. According to Schedul-e 86, the avoj-ded energy cost
18 value for non-firm energy products is equal to 85 percent
79 of the weighted average daily on-peak and off-peak Dow
20 Jones Mid-Columbj-a Electricity Price Index prices for non-
27 firm energy published in the Wall Street Journal-. Over the
22 past year this price has ranged from approximately $0.005
23 per klllh to $0.019 per kwh.
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2 http :,/ /www. eia . gov,/toof s /gl-ossary/ index . cfm?id:N
sArD, REB 10
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O. What can be concluded by the analysis
presented by Mr. Beach?
A.Because Mr. Beach's energy valuation analysis
is incorrectly premised on the belief that DG systems
taking net meterj-ng service provide a "firm" energy
product, the conclusions reached by the analysis are not
relevant with regard to net meterj-ng servj-ce. Therefore,
the Commission should disregard the entire analysis.
It should also be noted that the Commission, the
Company, and numerous other stakeholders recently dedicated
a significant amount of resources and regulatory process
toward the development of a methodology for determining the
value of firm energy produced by cogeneration and small-
scale power production in Case No. GNR-E-11-03. Even if
one agreed that DG systems provide firm power, Mr. Beach's
proposed energy valuation methodology does not align with
the Commission's recently approved methodology for valuing
firm energy contracts and therefore should be rejected.
o.ICEA witness, MS. Courtney White, states on
page I of her testimony that the Company's filing is
inconsistent with Idaho state policy. She notes that the
Idaho State Legislature's directive lncluded in the 2012
Idaho Energy Plan states that "the Idaho PUC shoul-d
continue to administer its responsibilities under the
Public Utillty Regulatory Act in a way that encourages the
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cost-effective development of customer-owned renewabl-e
generation and combined heat and power facilities." Is
there a regulatory process in place to identify cost-
effective resources to be considered for future
development?
A.Yes. The Commission has relied upon the
Company's Integrated Resource Planning (*IRP") process to
determine the economic viability and risk profile of all
potential resources including renewable generation and
energy efficiency.
O.Has the Company analyzed Solar DG as part of
its IRP process?
A.Yes. The Company has analyzed Solar DG as
part of its 2073 IRP process. In the Company's "Risk
Analysis on Resource Alternativesr "3 solar DG was determined
to not be cost-effective as compared to other available
resource alternatives and therefore has not been i-ncl-uded
in the Company's preferred portfolio of resources.
o.Is the Company opposed to the Commission
taking action to encourage the cost-effective development
of customer-owned renewable generation?
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ht tp :,/ /www. ldahopower . com/pdf s /About Us / PlanningForEuture,/ i rpl 2 0 1 3,/March
Mt gMa t e r j- a I s / Re s ourceAl- t e qna t i ve s_ Ri e kj!!U
sArD, REB t2
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Absol-uteIy not. However, the Company believes
that the Commission shoul-d continue to rely on the
Company's IRP process to j-dentify cost-effective resources.
o.Why should the Commission not utilize net
metering service provisj-ons to encourage the development of
customer-owned renewable resources?
A. The current net metering rates provide
indirect j-ncentives to customers with DG systems, which is
problematic because those indirect incentives l-ack
transparency. Rather than providing an incentj-ve
specifically designed to meet a desired objective, the
indirect incentives that net metering customers receive
today from traditj-onal energy pricing originate from the
ability of customers with DG systems to obtain free use of
equipment and services. Consequently, there is potential
for customers with DG install-ations to pay less than their
cost of service in a manner that is disconnected from any
underlying rate design polJ-cy goa1s. This approach brings
with it the risk of providing indirect incentives that are
greater than necessary to accomplish desired renewable
energy development goa1s.
III. PROPER TREJATMENT OF EXCESS NET ENERGI
O. The ICEA and Pioneer Power recommend that the
Commission authorize financial compensation of excess net
generation based on the Company's avoided cost of energy at
sArD, REB 13
fdaho Power Company
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1 any time, or at the tlme a net metering customer's service
2 is disconnected, respectJ-ve1y. Does ldaho Power support
3 prospectively offering a financial palrment for excess net
4 metering generatlon in ej-ther circumstance?
5 A. No. As explained in greater detail- on pages 7
6 and 8 of the Company's Appli-cation, the Federal Energy
7 Regulatory Commission (*FERC") maj-ntains that aIl power
8 purchases made by utilities to non-Qualified Facilities
9 under PURPA are wholesale transactions under the FERC's
10 jurisdiction -- not retail transactions to be regulated at
11 the state level. As I understand it, to receive financial-
L2 compensation for a net excess power sale as recommended by
13 ICEA and Pioneer Power, the net metering customer wou1d be
14 required to comply with either the requirements of the
15 EERC-administered Eederal Power Act or Idaho's
16 implementation of PURPA.
I7 To ensure that its net metering service can be fuIIy
18 administered at the state level and comply with federal
19 1aw, Idaho Power cannot continue providing fj-nancial
20 compensation for net sales of excess net metered
27 generation. Customers that wish to continue selling net
22 generation to Idaho Power for financial payment may do so
23 as a PURPA Qualified Facility by procuri-ng a sales
24 agreement through Schedul-e 86.
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sArD, REB 1-4
Idaho Power Company
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o.Several parties discuss the disparate impacts
the December expiration date would have on net metering
customers due to varying generati-on and consumptj-on
patterns. How do you respond to these concerns?
A.fn light of the concerns regarding the
proposed December expiration date, the Company is willing
to revj-se its original proposal regarding the excess net
energy credit system as descrj-bed in its application. The
Company woul-d accept an excess net energy credit system
that would all-ow customers to self-select the annual
expiration date of unused kwh credits. However, for
reasons previously stated, the Company maintains that a kwh
credit system should be i-mplemented in fieu of the existing
financial- credit system, and that only per-kWh energy
charges should be eligible for offset. f have asked Mr.
Matt Larkin to detail this proposal and its underlying
rationale in his testimony.
rV. RATE CERTAINTY ATiID THE IMPORTA}ICE OF A CAPACTTY CAP
O. Witnesses White and Dunay suggest that the
Company's proposal in this case has introduced uncertainty
and financial risk that is negatively impacting the local
sof ar industry and future solar instal-l-ations. To your
knowledge, has the Commission or the Company ever suggested
that net metering rates provide certainty for customers?
sArD, REB 15
Idaho Power Company
Quite to the contrary,the Commission
Order No. 30221,made the following statement on page 1 of
Case No. IPC-E-O5-L1:
IW] e must note that the net metering
program price j-s a tarif f rate. It is
not a contract rate. As a tariff rate,it is subject to change. An impetus
for future change j-s recognition that
in addition to the customer charge, the
Company recovers some of its fixed
costs for serving customers in its
energy charge. A persuasive argumentcould be made that net metering
customers are being subsidized by other
customers.Indeed 1n our Orderapproving net metering we recognized
that the fu1l cost of the program maynot be borne by participants. OrderNo. 28957.The Company pursuant to
Commission direction continues tomonitor net metering program costs,
cost recovery and rel-ated issues of
subsidization.Customers therefore
shoul-d not rely on continuation of the
tariff rate in cost effectiveness
calcul-ations to justify net metering
equipment j-nvestment decisions.
Consistent with the Commission's view, the Company's
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proposed net metering capacity cap, does the Company
practice has been to remind customers who are considering
net metering service that there is not a contract
associated with the service and therefore rates are subject
to change.
O.Given the testimony filed in opposition to the
continue to support the implementation of a capacity cap at
5. I megawatts?
SAID, REB L6
Idaho Power Company
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A. Yes. The Company is j-n agreement with the
Staff on this j-ssue. The capacity cap provides an
opportunity for periodj-c review of the net metering service
provisions and prj-cing. Eurther, the cap provides the
Company with an opportunity to assess the impacts that DG
may have on the reliable operation of its el-ectrical
system. To date, the most important aspect of the cap has
been to l-imit the potential- cost assj-gnment inequities that
exist as a result of applying traditional bundled rate
design for net meterlng service. If the Commission
declines to implement the Company's net metering rate
design proposal, there wil-I be a greater need to have in
place a capacity cap to l-imit the potential cost assignment
inequities that wiIl continue to grow.
o.Does the existence of the proposed capacity
cap introduce any additj-onaI rate uncertaj-nty other than
what wou1d exist without a capacity cap?
A.No. As pointed out by the Commj-ssion j-n Order
No. 30227, the net metering price "j-s not a contract rate.
As a tariff rate, it is subject to change." A capacity cap
does not change this fact, it simply puts in place a known
trigger for review.
V. EUTT'RE OF NET METERING SERVICE
o.Several witnesses representing other parties
in this proceeding claim that Idaho Power's proposal to
sArD, REB t7
Idaho Power Company
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create new rate classes that distinguish between standard
and net metering customers is discriminatory. Do you
agree?
A. No. I am familiar with Idaho Code S 61-315,
which prohibits any public utility from offering
preferential or discriminatory rates or services to
customers, or to establj-sh any unreasonable difference as
between classes of service. The Idaho Supreme Court
lnterpreted Idaho Code S 61-315 in the ldaho State
HomebuiTders v. Washinqton Water Power ("I{omebuilders")
casera which I have also read. The HomebuiTders Court
observed that not all differences in a utility's rates
between different customers constitute unl-awful-
discri-mination or preference under Idaho Code S 61-315.
The Court explained that the setting of dlfferent rates may
be justified by factors such as "cost of service, quantity
of el-ectricity used, differences and conditions of service,
or the time, nature and pattern of use."s The Homebuilders
Court also stated the Commission may consider other
o ::drho State HomebuiTders v. WashingEon Water Power, 107 Idaho 415,
590 P.2d 3s0 (1984).
5 td. at 420, 690 P2.d,Intermountain Gas Co. ,l-00
sArD, REB 18
Idaho Power Company
aE 335, Citing Utah-Idaho Sugar Co. v.Idaho 358, 597 P. 2d at 809-810 (1981).
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crlterj-a for establishing different rates including energy
conservation, optimum use, and resource al-l-ocation.6
Although I do not practice 1aw, based on my reading
of Homebuil-ders as a 1ay person, I believe that Idaho
Power's proposal to create Schedules 6 and 8 meets the non-
discriminatory standard set by the Idaho Supreme Court. As
described earlier in my testimony, net metering customers
utilize on-sj-te generation that causes them to use Idaho
Power's distribution system in a fundamentally different
fashion than standard service customers.
In effect, net metering customers require Idaho
Power to provide "standby service" much like industrial
customers with cogeneration a service which is
separately tariffed under Schedul-e 54.
o.If the Commission declines to implement the
Company's net metering rate design proposal-, should the
Commi-ssion still establish tariff Schedules 6 and 8?
A. Yes. Even if it decl-ines to implement the
Company's net metering rate design proposal, the Commission
should stiIl establ-ish tarif f Schedul-es 6 and B. By
implementing Schedul-es 6 and 8, the Commission wil-I send a
clear message to the Company and its customers that it
recognizes net metering service as a substantially
u Id. Citing GrindstoneUtiTities Commission, lO2(1e81).
Butte MutuaT Canal Co. v. Idaho htbTicfdaho at l-80-181-, 627 P. 2d at 809-810
SAID, REB L9
Idaho Power Company
1 different type of service as compared to standard
2 residential and sma1l general service. By establishing
3 Schedul-es 6 and 8, the Commission will also make it clear
4 that when the Company files its next general rate case, the
5 costs to provide net metering service and future pricing
6 structures wil-I be specifically tailored to the unique
7 services that net metering customers desire.
I Q. On page 1-0 and 11 of his testimony, Staff
9 witness Matt El-am likens the service taken by a net
10 metering customer to that of a customer with a vacation
11 home to support his argument that net metering customers
L2 should not be treated differently from other residential
13 customers. Do you agree that this is a val-id compar j-son?
t4 A. No. While I would agree that a net metering
15 customer and a customer with a vacant vacation home have
t6 the potentia1 for similar net usage on a monthly basis, the
L7 similarity ends there. The way in which these two types of
18 customers utilize the el-ectrical- system on a daily or
19 hourly basis may differ dramatically. When a vacation home
20 has zero energy consumption over a month, it is because the
2l customer did not take any energy during the month and
22 therefore did not utllize the Company's system during that
23 month. On the other hand, when a net metering customer has
24 net zero consumption for the month, it is likeIy that the
25 net metering customer took energy during some hours of the
sArD, REB 20
Idaho Power Company
1 month which was ultimately offset by on-site generation.
2 Tn hours when a net metering customer is generating energy
3 in excess of consumption to achieve net zero consumption,
4 that customer is also using the Company's distribution
5 system at no cost.
6 In the case of a vacation home, traditional bundled
7 residential rate design has carried with it an implied
B policy of customers being required to pay when they use the
9 system. Under the tradj-tional bundled resj-dential rate
10 design approach, this "pay-for-use" policy cannot be
11 consistently applied for net metering service customers
L2 because a net metering customer has the unj-que ability to
13 util-ize the Company's distribution system at no cost.
L4 O. Several- witnesses in this case suggest that
15 because any inequities that currently exist regarding net
16 metering service are relatively small, the Commission
11 should not take any action now. Do you agree with this
1B recommendation?
19 A. No. Several witnesses in this case also point
20 out that there is potential for solar DG to grow rapidly in
27 the near future. The Company's filing is intended to
22 expand the availability of net meteri-ng service under a
23 design that is both scalable and sustainable into the
24 future. The current net metering rate design and service
25 provisions are neither scalable nor sustainable. The
sArD, REB 2L
Idaho Power Company
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Commission has an opportunlty now to fix the flaws j-n the
current net metering service while the service is still
relatively small in sca1e. If the Commission declines to
make necessary changes now, the financial uncertainty
described by Ms. White j-n her testimony will continue and
the number of customers with DG i-nstallations ultimately
impacted by future net metering rate design modifications
will multipJ-y.
o.On page 28 of his direct testimony, Mr.
Gilliam recommends that any rate changes adopted in this
proceeding "should be gradual and applied only to new
customers." Do you agree?
A.No. Although Idaho Power does not object to
gradually moving customers with net metering service closer
to thej-r cost of service, the Company does not agree that
any rate changes resulting from this proceeding shoul-d be
applied only to new customers. As the Commission noted in
Order No. 22489, "this Commission has never \vintaged'
utility condj-tions at the time a customer begins service or
expands service for the benefit of that customer."
Although the Commisslon in 1989 was speaking to special
contracts for large j-ndustrial customers, I believe it to
be an accurate statement about services provided to
customers generally. The Commission al-so indicated on page
6 of that Order that "special contract customers coming on
sArD, REB 22
Idaho Power Company
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in this time of surplus have no rights to continuatj-on
their 'good deals' beyond the time of surpJ-us." I
simil-arl-y believe that existing net metering service
customers have no right to continue indefinitely under
existing tariff at a promotional fuIl retail rate that
of
the
does
not adequately recover the utility's cost to provide
electrj-c service. Although this may alter the perj-od over
which net metering customers recover the cost of their
respective j-nvestments, builders of electric generation are
not guaranteed a return on their investment.
While ICEA's recommendation to grandfather the full
retail- rate to existing net metering customers would be
extremely difficult for the Company to administer, the
primary reason fdaho Power opposes the recommendation for
grandfathering is because it is not 1ike1y permissible
under Idaho l-aw. My understanding is that the intent of
Idaho Code S 61-315 and the Idaho Supreme Court's
Homebuil-ders decision is to prevent similarly situated
customers from being treated differently from one another
based solely on when they began taking service.
o.
A.
Does that conclude your testimony?
Yes, it does.
sArD, REB 23
Idaho Power Company
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ATTESTATION OF TESTIMONY
STATE OF IDAHO )) ss.
County of Ada )
I, Gregory V{. Said, havlng been duly sworn to
testify truthfully, and based upon my personal knowledge,
state the following:
I am employed by Idaho Power Company as the Vice
President of Regulatory Affairs and am competent to be a
witness in this proceeding.
I decl-are under penalty of perjury of the laws of
the state of Idaho that the foregoing rebuttal testj-mony is
true and correct to the best of my information and belief.
DATED this 31"t day of May, 2O!3.
May, 2073.
%
,-sP'jb,i { ":j:-'18
AhilS
u )"J
Grego '. saia
SUBSCRIBED AND SWORN to before me this 31"t day of
My commission expJ-res: l3 -Y-a-t'f
sArD, REB 24
Idaho Power Company
Notary Pu(Ii! for Idaho
Res idins u}/S-f-oz, J-J,L-
etrpt-tc
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 31st day of May 2013 I served a true and correct
copy of the within and REBUTTAL TESTIMONY OF GREGORY W. SAID, upon the
following named parties by the method indicated below, and addressed to the following:
Commission Staff
Karl T. Klein
Deputy Attomey General
ldaho Public Utilities Commission
47 2 W est Wash ington (83702 )
P.O. Box 83720
Boise, ldaho 83720-007 4
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North Sixth Street (83702)
P.O. Box 844
Boise, ldaho 83701
PowerWorks LLC
Chris Aepelbacher, Project Engineer
PowerWorks LLC
5420 West Wicher Road
Glenns Ferry, ldaho 83623
Pioneer Power, LLC
Peter J. Richardson
RICHARDSON & O'LEARY, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
John Steiner
24597 Collett Road
Oreana, ldaho 83650-5070
City of Boise
R. Stephen Rutherford
Chief Deputy City Attorney
Boise City Attorney's Office
150 North Capital Boulevard
P.O. Box 500
Boise, Idaho 83701 -0500
CERTIFICATE OF SERVICE
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John R. Hammond, Jr.
BATT FISHER PUSCH & ALDERMAN, LLP
U.S. Bank Plaza, Th Floor
101 South Capitol Boulevard, Suite 701
P.O. Box 1308
Boise, Idaho 83701
ldaho CIean Energy Association lnc.
Dean J. Miller
McDEVITT & MILLER LLP
420 West Bannock Street (83702)
P.O. Box 2564
Boise, Idaho 83701
Board of Directors
Idaho Clean Energy Association lnc.
P.O. Box 1212
Boise, ldaho 83701
Snake River Alliance
Ken Miller, Clean Energy Program Director
Snake River Alliance
P.O. Box 1731
Boise, ldaho 83701
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heathe r@ mcd evitt-m i I le r. com
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