20131119final_order_no_32925.pdf

Office of the Secretary
Service Date
November 19,2013
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY’S APPLICATION FOR )CASE NO.IPC-E-12-27
AUTHORITY TO MODIFY ITS NET )
METERING SERVICE AND TO INCREASE )
THE GENERATION CAPACITY LIMIT )ORDER NO.32925
________________________________________________________________________________________
)
On August 14,2013,the Commission issued Order No.32280.As part of that Order,
the Commission granted interested persons until September 30,2013 to submit supplemental
comments on the following additional issue:
If a net metering customer takes service through multiple meters at one or
more premises,should the customer be allowed to apply net metering credits
to offset usage on the other meters?If so,what conditions should apply?
See Order No.32880 at 5.The Commission received timely comments on this “meter
aggregation”issue from:Idaho Power Company;Commission Staff;Pioneer Power,LLC;Idaho
Conservation League (ICL);Idaho Clean Energy Association (ICEA);and several members of
the public including Ada County.
With this Order,the Commission summarizes the supplemental comments and directs
the Company to allow for meter aggregation as expressed below.
SUPPLEMENTAL COMMENTS
Idaho Power,Commission Staff,Pioneer Power,ICL and ICEA,and several
members of the public filed supplemental comments on the meter aggregation issue.Idaho
Power primarily opposes meter aggregation,but as an alternative,it proposes that meter
aggregation only be allowed under certain conditions.Additionally,Staff,Pioneer Power,ICL,
ICEA and the public commenters support meter aggregation with varying conditions.The
commenters’positions are summarized below.
A.Idaho Power
Idaho Power submitted the only comments opposing meter aggregation.Idaho Power
opposes meter aggregation because:(1)aggregation exacerbates the potential under-recovery of
fixed costs from net metering customers;(2)aggregation does not align with the intent of net
metering as an avenue to offset usage,and diminishes the incentive for customers to right size
generation units;and (3)the Company’s billing system is not designed to bill net metering on an
ORDER NO.32925 1
aggregated basis.With regard to the latter point,the Company says that customizing the system
to allow for aggregated billing would cost about $60,000.which is not cost-justified given the
small number of customers,and if aggregation is allowed the Company would incur additional
costs,such as labor costs to complete a manual meter transaction.In light of these challenges,
Idaho Power recommends that meter aggregation be disallowed.See Idaho Power Comments in
Response to Order No.32880 (IPC Comments)at 2-6.
But as an alternative to proposing that meter aggregation be disallowed.Idaho Power
proposes that meter aggregation only be allowed upon the conditions that would ‘reasonably
address the challenges associated with meter aggregation in the Company’s service area.”See
IPC Comments at 6-7.The Company proposes such conditions.
First,the Company proposes that a customer only be allowed to apply kWh credits
from a net metering system to consumption at a separate meter if the following “eligibility
criteria”are satisfied:
I)The separate meter is located at the customer’s net metering site or on the
same contiguous property as the net metering system.Contiguous
property is defined as a single piece of land even if it is separated by
public or railroad rights of way;
2)The separate meter is served by the same primary feeder as the Net
Metering System at the time the new system application is submitted;and
3)Electricity recorded by the net meter and the aggregated meter is solely for
the net metering customer’s requirements.
Id.at 7-8.
Besides these eligibility criteria.”the Company proposes conditions related to
“billing mechanics,”“aggregation priority,”and a “meter aggregation fee.”
With respect to “billing mechanics,”the Company proposes that unused Excess Net
Energy credits be applied to eligible meters in the following manner:
1)Transfer of excess credits between metered accounts will occur on anannualbasis;
2)Customer must annually declare and confirm eligible accounts in the
month of January;and
3)Idaho Power must annually transfer the credits as specified by the
customer no later than March 31.
ORDER NO.32925
Id.at 8-9.
With respect to “aggregation priority,”the Company proposes that customers use the
following criteria to prioritize their eligible aggregated meters to determine the order in which
credits will be applied:
1)Meter priority for eligible meters will be determined by the customer on
an annual basis in January of each year;and
2)Meters on the same rate schedule as the Net Metering System must be
prioritized above meters on differing rate schedules.
Id.at 9-10.
In addition to the above requirements,the Company proposes that customers pay a
$10 annual “meter aggregation fee”for each aggregated meter.The Company must charge this
fee to cover real costs that meter aggregation would impose,and the fee is consistent with
approaches taken in neighboring states.The Company says it calculated the proposed fee based
on its expected labor cost to complete a manual meter aggregation transaction,and that applying
the fee annually instead of monthly aligns with the annual kWh credit transfer that will minimize
administrative costs for the Company and its customers.Id.at 10-11.
B.Commission Staff
Staff believes the Commission should allow a net metering customer to apply the
excess net energy credit from a designated meter to offset usage on additional meters.But to
preserve the intent of net metering—that is,to allow a customer to offset usage with self-
generation—Staff believes the following conditions must exist to apply credits to offset usage on
the aggregated meters:
1)The aggregated meters must be under the same account as the designated
meter.Staff believes the “same account”requirement will make the
process of applying excess kWh credits easy for customers to understand
and less administratively burdensome for the Company;
2)The electricity recorded by the designated meter and any aggregated
meters must be for the customer-generator’s requirements;
3)The aggregated meters must be located on or contiguous to the premises of
the designated meter;
Staff clarifies that,in the case of one meter,the designated meter is the retail meter attached to the generation
facility.In the case of two meters,the designated meter is the retail meter attached to the separately metered
generation facility.
ORDER NO.32925 3
4)The designated meter and the aggregated meters must be served by the
same primary feeder;and
5)The excess net energy credit must first be applied to a designated meter
and then to aggregated meters on the same rate schedule as the designated
meter before the balance can be applied to other aggregated meters.ThekWhcreditcanoniybeappliedbetweenScheduleNos.I and 7,orbetweenScheduleNos.9,19.and 24.2
C’.Pioneer Power
Pioneer Power urges the Commission to allow the transfer of excess credits from ‘the
net metering site to other accounts held by the same entity,”including “other accounts on a
different tariff schedule.”Comments of Pioneer Power at 2.
D.ICL and ICEA
ICL and ICEA submitted joint comments proposing that net metering customers be
allowed to apply excess kWh credits to separate meters on the following conditions:
1)Any excess kWh credits will first be applied to the same account the netmeteredsystemiselectricallyconnectedto;
2)A customer may apply any excess kWh credits to another account held bythesamecustomer;
3)The kWh credits may not offset the customer charge portion of any
account to which they are applied:
4)Customers must prospectively designate the additional account oraccountstoapplythekWhcredit;and
5)Customers may change the designated account annually.
See ICL/ICEA Supplemental Comments at 5.In addition,ICL/ICEA are skeptical of the
Company’s claim that it must use a manual system if aggregation is allowed because its billing
system cannot net usage across multiple schedules and customer accounts.ICL/ICEA asks the
Commission to “direct Idaho Power to report back within six months on the necessary timeline
for ensuring the Company’s billing system has adequate capacity to apply a kWh credit system
for net metering customers.”Id.at 4.
2 Customers must select and rank the aggregated meters in the order in which the customer wishes to apply creditsbeyondthoseusedtooffsetallusageatthedesignatedmeter.An aggregated meter on the same rate schedule as thedesignatedmetermustberankedhighest.
ORDER NO.32925 4
E.Public
The Commission received public comments from customers and those who install
and design renewable energy systems.All of the public commenters recommended that meter
aggregation be allowed in some form.
The public commenters disagreed on how a customer’s excess net energy credits
should be applied.For example,one commenter said customers should be able to transfer their
credits to anyone,such as family members and non-profit organizations,to allow them to offset
their usage.Another commenter said customers should be allowed to apply their credits to offset
usage at any of their other accounts.Some customers would allow the customer to offset usage
at their other accounts regardless of schedule and location.Others said the customer’s credits
should only offset usage at the customer’s “related meters.”
Commenters also discussed issues like valuation and fees.For example,a customer
proposed that credits be applied,and usage for all of the customer’s meters be calculated,as if
the meters were one meter.Another commenter recommended that the excess credits be applied
when the power is generated to account for the value of power at the time of the day when it is
produced.Still another proposed a valuation formula to facilitate the transfer of credits between
classes.Lastly,a customer said it would be fair for the Company to charge a nominal service fee
to process the credit transfer,and to limit the number of transfers to one every 90 days.
DISCUSSION AND FINDINGS
Idaho Power Company is an electric utility subject to the Commission’s regulation
under the Public Utilities Law.Idaho Code §S 61-119 and 61-129.The Company’s rates,
charges and contracts for electric service in the State of Idaho are subject to the Commission’s
jurisdiction.
We appreciate the time the parties and public took to comment on the meter
aggregation issue.After reviewing those comments,we find it just,fair,and reasonable for the
Company to provide for meter aggregation on the following conditions.We find that these
conditions align with the intent of net metering as an avenue to offset usage while minimizing
the potential under-recovery of fixed costs from net metering customers.
ORDER NO.32925 5
A.Eligibility Criteria
The intent of net metering is to allow a customer to offset the customer’s usage with
self-generation.It would be inconsistent with this intent to allow the customer to apply excess
net energy credits to offset another customer’s usage.Further,it would be inappropriate to let
the customer apply the credits to offset the customer’s own usage at another delivery point
without considering that delivery point’s location.As discussed in prior comments and
testimony,even with one delivery point,net metering customers may not pay their full fixed
costs given the current rate structure.We find that allowing customers to apply credits to offset
usage on contiguous meters that are served by the same primary feeder is a reasonable means by
which to limit the potential under-recovery of fixed costs.Based on the above,we find it fair,
just,and reasonable to allow a customer to apply the customer’s excess kWh credits from the
designated meter3 to offset usage recorded on aggregated meters if all of the following eligibility
criteria are satisfied:
1)The customer may only apply the excess net energy credits to accounts
held by the customer.
2)The aggregated meters must be located on.or contiguous to,the property
on which the designated meter is located.Contiguous property includes
property that is separated from the premises of the designated meter by
public or railroad rights of way;
3)The designated meter and the aggregated meters must be served by the
same primary feeder;and
4)The electricity recorded by the designated meter and any aggregated
meters must be for the customer generator’s requirements.
B.Billing Mechanics and Meter Aggregation Fee
With respect to billing mechanics,we find the Company’s billing system cannot
currently aggregate positive and negative reads among multiple meters.Further,an estimated 24
net metering customers would potentially benefit from meter aggregation,making the estimated
$60,000 needed to customize the Company’s billing system not cost justified.Accordingly,at
this time the Company’s staff must manually transfer meter aggregation credits.To minimize
the administrative costs associated with manual meter reading,we find it just,fair,and
En the case of one meter,the designated meter is the retail meter attached to the generation facility.In the case oftwometers.the designated meter is the retail meter attached to the separately metered generation facility.
ORDER NO.32925 6
reasonable for the transfer of excess net energy credits between metered accounts to occur
annually (as opposed to at some lesser interval).The customer must annually declare and
confirm eligible accounts in January,and the Company must annually perform the credit transfer
by March 31,as specified by the customer.We also find it appropriate for the customer to pay
an annual meter aggregation fee of $10 per aggregated meter to offset the expected labor costs
associated with completing a manual meter aggregation transaction.
While the number of net metering customers who presently could benefit from meter
aggregation may be small,this number may well increase as the cost of PV systems decrease and
net metering becomes more widespread.We expect the Company to monitor these changes and
to ensure its billing system can accommodate aggregated billing for net metering accounts when
doing so becomes cost-justified.Further,we expect the Company to keep us apprised of meter
aggregation in its territory.Accordingly,when the Company files its net metering status report
as directed in Order No.32846,the Company shall explain in detail:(1)the basis for its $60,000
initial-cost estimate for customization;(2)the expected total costs of customization,including
without limitation any updates to the Company’s original $60,000 estimate,and the ongoing
costs to upgrade and maintain the customized system over and above what the Company would
incur to upgrade and maintain the billing system without customization;and (3)the number of
customers for whom the Company is manually billing aggregated net metering accounts;and (4)
the Company’s projections for when switching to automated billing of aggregated net metering
accounts would be cost-justified.
C.Aggregation Priority
In an effort to save labor costs associated with the manual aggregated meter
transactions,we find it fair,just,and reasonable for a customer to first apply the customer’s
excess net energy credit to the designated meter and then to aggregated meters on the premises
that are on the same rate schedule as the designated meter.If the customer has any remaining
credits,the customer can apply the balance to offset usage at other aggregated meters.
However,we note that the fixed costs built into each unit of excess net energy may
vary when a credit is applied across schedules,and our intent with net metering is to approach a
one-to-one offset (i.e.,the value of a kWh generated when the system is producing excess energy
is worth the same as a kWh credit used to offset usage).We recognize that a one-to-one offset
may not fully occur because the credit from excess generation may be used at a different time
ORDER NO.32925 7
than it is generated.But we believe that requiring customers to apply the credits across
schedules with similar rates and rate designs will help mitigate this mismatch.Accordingly,we
find it fair,just and reasonable to only allow the customer to apply kWh credits between the
same schedules,between Schedule Nos.1 and 7,or between Schedule Nos.9,19,and 24.We
also find it reasonable to require that customers select and rank the aggregated meters in the
order in which the customer wishes to apply credits beyond those used to offset all usage at the
designated meter.Lastly,we find it reasonable to require that an aggregated meter on the same
rate schedule as the designated meter be ranked highest.4
ORDER
IT IS HEREBY ORDERED that the Company’s net metering service shall provide
for meter aggregation as discussed above.The Company shall file conforming tariffs within two
weeks of the date of this order.
IT IS FURTHER ORDERED that the Company’s report on its net metering service
shall include the additional meter aggregation information discussed above.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §6 1-626.
‘Ada County submitted a comment discussing its net metering arrangement at Barber Park.The County says it has
an 1 1 kW photovoltaic system on the roof of one building that is interconnected to the meter base on an adjacent
building with very little energy usage.The County says the Company assured it that the County could transfer
excess energy credits from the little-used,second building to offset more substantial usage at the first building.It is
unclear from the record whether the Barber Park buildings are on the same or similar schedules,such that the credit
transfer would be allowed under this Order.We recommend that the County work with the Company to ensure that
the County’s facilities are taking service under the correct schedules.
ORDER NO.32925 8
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /r’
day of November 2013.
PAUL K LLAN ,PRESIDENT
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MACK A.REDF1W,CMMIgSIONER
MARSHA H.SMITH,COMMISSIONER
ATTEST:
Commission Secretary
O:IPCE-I 2-27kk8
ORDER NO.32925 9