20130228Addendum to Comments.pdf

2/27/2013 Addendum
I beg the Commission's permission to add this addendum to my earlier comments.
IPC spends considerable time in their testimony discussing the loss of the $20
service fee for each net metering customer who successfully displaces a large
portion of their monthly electricity consumption. The thing IPC did not address is
whether the loss of the service fee in this manner constitutes an actual loss. My
calculations suggest that IPC receives a net gain in the transaction. Let me explain.
The following table presents two scenarios, one for solar, and one for wind. The
Solar column compares a solar net meterer to peak wholesale power alternatives,
while the wind column compares a wind net meterer to the wholesale prices
averaged over the whole day. For wholesale prices I went to the CAISO website and
acquired prices from the NP15 hub for the years 2002 through 2012. I then
adjusted the prices down by $3.00 per Mwh to approximate Mid-C pricing.
If a 1,200 kwh per month customer successfully generates enough power to
completely offset their consumption, this is power that IPC is free to sell on the
wholesale market, a market in which IPC is a regular and active participant. For the
solar net meterers, they will receive, on average, about $49.54 per month at Mid-C.
For wind, the number is slightly lower at $45.78. If we subtract out IPC's service fee
of $20, IPC receives a net benefit from the solar net meter of $29.54 and $25.78 from
the wind net meterer.
Now, clearly, not all of the net metering customers are wind, or solar, and if they
were, not all of them successfully offset their entire power use each month, but it is
worth looking at that possibility as a way of examining how "bad" it would be for
IPC and the rest of IPC's rate payers. It turns out, bad, is not bad at all.
If all 354 net meterers were solar generators who completely offset their 1,200 kwh
monthly load, the benefit to IPC would be $10,457.65 per month and $125,491.82
per year. If all 354 net meterers were wind generators who completely offset their
1,200 kwh monthly load, the benefit to IPC would be $9,126.37 per month and
$109,516.42 per year.
Again, not all net meterers fully offset their full load. However, some version of the
two alternatives presented above, and in the table below, is IPC's "worst case"
scenario. As worst cases go, for both IPC and Idaho ratepayers, these are great
deals. IPC's revenue may not be as high as in the absence of this program, but they
are not losing money on the deal either.
In my humble opinion the net metering option is one that should be whole-
heartedly expanded. It is good for IPC, ratepayers, and the environment.
Regards,
Anthony Jones
Solar Wind
Mid C Adjuster ($/Mwh) $3.00 $3.00
(Source IPC IRP)
IPC Gross Revenue" $49.54 $45.78
IPC Net Revenue $29.54 $25.78
Net Metering Customers - 354 354
1 One might argue that, in the absence of net metering, IPC would receive revenue of about $100 per
month from customers with 1,200 kwh demand. In that fashion, IPC could be said to be "losing"
income of about $51 ($55 wind) per month, per net metering customer, for a total of about $17,862
($19,193 wind) for all the net meterers per month, and a total of $214,348 per year ($230,323 wind).
However, anytime a customer conserves, installs energy saving devices, installs alternative fuel
sources such as wood, gas, propane, etc., IPC "loses" income relative to customers who do not do the
same, without initiating rate case retribution.
More to the point, in this case, IPC is still in the black with the net metering customers. IPC may not
be receiving as much revenue as they would if these customers were not net metering, but that does
not mean IPC is incurring loses.
IPUC
[e-mail]
P.O Box 83720
Boise, ID 83720-0074
472 W. Washington 83702
Subject; Comments on IPC-E-12-27
To Whom it May Concern,
I have four areas of concern regarding Idaho Power Company's proposal to alter the
Net Metering tariff.
Fairness
It is fair to say, I think, that none of the Net Metering customers view the current
program as a path to financial glory. The odd check from IPC in the two-digit range
does not fit that mold.
Rather, many, perhaps most, Net Metering customers take a sense of pride in the
knowledge that they are being socially responsible by helping move the electric
industry, however minutely, away from fossil fuels and toward renewable
resources.
That said, they do appreciate being compensated for their investment. The
installation of solar panels, windmills, etc., is a complicated process that requires
substantial monetary investment. The monetary payback, such as it is, is often
measured in decades.
IPC's current proposal, essentially, removes all chance for many Net Metering
customers to ever recoup their investment. This would be fine if the customers had
known as much before they made their investments. However, for IPC to change the
rules after the fact, after the customers have irrevocably made their investments,
seems patently unfair.
PURPA and Cogen customers get the option of 20-year contracts. It seems only fair
that Net Metering customers should as well. If the commission chooses to revise the
Net Metering tariff, it should grandfather the exiting net metering customers at the
current rates.
Trivialities
If the commission grants permission to the company to raise the service fee to $20
(a net increase of $15) on the 354 net metering customers, they will receive a total
of $5,310 dollars each month. The benefit to IPC's other 460,000 customers will be
about $0.012 per month. Over the course of an entire year, each of IPC's other
customers will see a benefit of a little more than a dime!
Speaking for myself, the benefit to me does not warrant the effective destruction of
the current net metering program. I am more than willing to donate a penny a
month, a penny I will never even notice, for the benefit of people willing to shoulder
the social responsible of self installing solar panels, windmills, etc.
Social Responsibility
IPC should be commended for trying to maintain low rates. And, IPC should be
commended for emphasizing gas over coal in its most recent IRP.
At the same time, one has to recognize that gas is simply the next coal and the bigger
issue still remains. Namely, the push to become 100 percent reliant on renewable
resources for energy production remains the goal. It is not only the socially
responsible thing to do, in the very long run, if we are to ever fully address climate
change and finite natural resources, it is the only viable option.
Current Net Metering customers deserve tremendous credit for their efforts to date.
They provide a much-needed glimpse into the future and provide ongoing test cases
on how to proceed toward that future. In my mind we (IPC, IPUC) should be doing
more, not less, to encourage customers to pursue conservation measures, and install
and maintain renewable generation systems on their own properties.
Discrimination
The applicant spends substantial time detailing the lack of equity associated with
net metering customers not paying their full fixed costs.
Observation: This tends to be true only during months when there systems are in
full production. When wind is light, of in winter when it is sun is low or it is cloudy,
wind and solar net metering customers tend to pay bills at or near the same as
conventional retail customers. It is better to say that they may not pay their full
fixed cost contribution during all periods of the year.
However, even this is a distraction.
For the entire residential and small general service rate classes, most of the fixed
cost portions of customer's service are rolled into the energy portion of their bills.
Mathematically, this leads to the obvious conclusion that roughly half of all IPC
customers fail to cover their entire fixed costs and are being cross subsidized by the
other half of IPC's customers.
Other things being equal:
Customers with above average bills tend to cross subsidize customer with
below average bills.
Customers with large families tend to subsidize customers with small
families.
Customers with all-electric homes tend to cross subsidize customers who
have gas space and water heating, and gas ranges.
People who practice little or no conservation tend to subsidize the fixed
portion of customers who do conserve.
Urban customers in dense neighborhoods tend to subsidize lower density
rural residents with long distribution lines.
People without summer homes tend to subsidize the fixed costs of running
lines to remote, rarely occupied vacation homes. (The author is familiar with
a family member whose power bill on their vacation property has not
exceeded $10 in any month for more than a decade!)
If IPC is desirous of correcting the inequity of some customer's failing to cover their
full share of fixed costs, addressing the items listed in the paragraphs above seems
both more fair, and a source of far bigger returns than going after the paltry few net
metering customers.
For IPC to single out only the Net Metering customers to recover the full amount of
their fixed costs smacks of discrimination and should not be allowed.
Thank you for your time.
Regards,
Anthony Jones
P.O. Box 1914
Boise, ID 83701
208-631-4334
[e-mail]