20130307press release.pdf

Idaho Public Utilities Commission
Case No. IPC-E-12-27, Order No. 32756
March 7, 2013
Contact: Gene Fadness [phone], 890-2712
Website: www.puc.idaho.gov

Pre-hearing conference set in net metering case

State regulators will conduct a pre-hearing conference to determine how to process
Idaho Power Company’s request to modify the way it pays about 353 net metering
customers. The commission will schedule a customer hearing in this case at a later date.

The pre-hearing conference, scheduled for Thursday, March 21, is not to discuss the
merits of the case, but only to schedule hearing dates, determine how to conduct
discovery of evidence and other issues that may be raised by the parties. The pre-
hearing conference will begin at 9 a.m. in the Idaho Public Utilities Commission hearing
room at 472 W. Washington St. in Boise. Parties to the case include Idaho Power,
commission staff, the City of Boise, the Idaho Clean Energy Association, the Idaho
Conservation League, Pioneer Power LLC, Powerworks LLC and the Snake River Alliance.

The pre-hearing conference may determine whether a technical hearing is needed.
Unlike a customer hearing, a technical hearing is a public hearing during which the
above parties to the case present witnesses and prepare testimony and exhibits. In
many cases, the commission may find that written comments, in lieu of a technical
hearing, may be just as sufficient a means to thoroughly consider all the issues.

In 2002, the commission directed that it be notified when the generation Idaho Power
receives from net metering customers nears the 2.9 megawatt limit previously set by
the commission. Idaho Power anticipates meeting that limit in the next few months.

Idaho Power proposes to double the cap to 5.8 MW, but also proposes to adjust the
amount net metering customers are paid because of increasing costs to serve the
growing number of net metering customers, costs the company claims are being passed
on to other ratepayers.

Net metering customers offset their electrical consumption by connecting their own
generating resources (such as solar panels or wind turbines) to Idaho Power’s electrical
grid. Customers are credited for the amount of electricity they generate at the full retail
rate that all residential and small-business customers pay for their electric use. Idaho
Power claims that full retail rate is higher than the actual value of the generation
provided by net metering customers. That’s because the full retail rate paid by other
customers includes not just the cost of energy generation, but also transmission,
distribution and customer-related costs such as billing. Because net metering customers
provide only generation and not transmission or distribution, these customers are being
paid for services they do not provide to the detriment of other customers, Idaho Power
claims.

Further, Idaho Power claims, the fixed costs of connecting net metering customers to
the grid have increased with the rapid expansion of net metering customers from just
three in 2002 to more than 350 today. The utility says these price inequities are unfair
to standard service customers who must then compensate the company for expenses
related to net metering.

To account for the transmission and distribution components of electric service that net
metering customers do not provide, Idaho Power proposes to increase the monthly
service charge for residential net metering customers from $5 to $20.92 and from $4 to
$22.49 for small-business net metering customers.

To more fully reflect the growing cost of service associated with net metering
customers’ use of Idaho Power’s distribution system, the utility proposes to establish a
basic load capacity charge of $1.48 per kW for residential net metering customers and
$1.37 per kW for small-business net metering customers.

While those demand-related charges would increase, Idaho Power proposes to reduce
the retail energy rates net metering customers pay to Idaho Power for their
consumption. For example, a residential net metering consumer would pay a non-
summer rate of 4.85 cents per kWh compared to a standard residential customer’s rate
of 7.23 cents per kWh for the first 800 kWh of use.

Idaho Power claims the net effect on net metering customers of the demand increases
and the retail rate energy decreases will vary depending on how they use and generate
energy. Some customers will be paid more than they currently receive for net metering,
while others will be paid less than what they currently receive.

Finally, Idaho Power proposes to stop paying customers who generate more energy
than they consume and instead issue them a credit against a future billing period.
Credits remaining after the December billing period would expire, but would not be kept
by Idaho Power. Instead they would be passed on to all customers through the annual
Power Cost Adjustment (PCA) mechanism.

Idaho Power said the net metering program was created for customers who want to
generate their own electricity in order to reduce all or part of their monthly electric use.
The program was not intended, the utility states, to be one in which net-metering
customers would be able to sell excess power. In fact, the sale of excess power may be a
considered a wholesale transaction subject to federal jurisdiction, Idaho Power claims.
“To ensure its net metering program can be fully administered at the state level in a
manner that complies with federal law, Idaho Power believes it must cease its current
practice of providing financial payments to customers in the context of net metering,”
the company’s application states. Power generators who want to sell power to Idaho
Power should enter into a sales agreement with the company, Idaho Power states.

The commission has waived the current 2.9-megawatt upper limit on the amount of
capacity that can be generated from all net metering customers combined while this
case is being processed.

To read Idaho Power’s application as well as comments filed by customers, go to
www.puc.idaho.gov. Click on the electric icon, then on “Open Electric Cases,” and scroll
down to Case No. IPC-E-12-27.

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