20190201Community Solar Annual Report.pdf

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An IDACORP Company
LISA D. NORDSTROM
Lead Counsel
[e-mail]
Re:
February 1,2019
Diane Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, ldaho 83720-007 4
Case No. IPC-E-16-14
Tariff Schedule 63, Community Solar Pilot Program
ldaho Power Company's 2019 Community Solar Annual Report
Dear Ms. Hanian:
ln Order No. 33638, the ldaho Public Utilities Commission ("Commission") approved a
settlement stipulation that required ldaho Power Company ("ldaho Power" or "Company") to
submit annual reports updating the Commission and stakeholders on a variety of items for the
Community Solar Pilot Program ("Program"). The first report was filed on April 30, 2018.
The Company is submitting the enclosed second annual report tor 2019 before the due
date of April 30, 2019, per Advice No. 19-02 requesting a suspension of the Program (Schedule
63) due to insufficient enrollment. The report provides details on the Company's extensive
marketing efforts, program enrollment statistics, subscriber characteristics, customer feedback,
and the Company's communication plan to inform Participants of the Company's request to
suspend the Program. Lastly, the report provides an overview of the future of an ldaho Power
community solar offering.
lf you have any questions regarding this tariff advice, please contact Regulatory Analyst
Kelley Noe at [phone].
Sincerely,
Lisa Nordstrom
LDN:kkt
Enclosure
IDAHO POWER COMPANY' S
20'19 COMMUNITY SOLAR ANNUAL REPORT
I. BACKGROUND
A. lnitial Filing
On June 22,2016, in response to customers who expressed interest in a community solar
program, ldaho Power Company ("ldaho Powe/' or "Company") filed an application
requesting that the ldaho Public Utilities Commission ("Commission") approve a new tariff
Schedule 63, Community Solar Pilot Program ("Program"). The Company proposed to build
a 500-kilowatt ("kW") single-axis tracking community solar array in southeast Boise that would
allow a limited number of ldaho Power's ldaho customers the opportunity to voluntarily
subscribe to the generation output. ldaho Power proposed that participating customers pay
a one-time upfront Subscription Fee ("Subscription Fee") and in return receive a monthly bill
credit ("Solar Energy Credit") for their designated portion of the energy produced from the
array. Details of the Program as filed are provided in the following table:
P Details - As Filed
Petitions to intervene were filed by the ldaho Conservation League ("lCL"), the lndustrial
Customers of ldaho Power, the ldaho lrrigation Pumpers Association, lnc., the Snake River
Alliance ("SRA'), the ldaho Sierra Club ("Sierra Club"), and the City of Boise ("Boise City"),
hereafter referred to individually as a "Party" or jointly as "Parties."
The Parties engaged in settlement discussions on August 23,2016, and September 8, 2016,
that ultimately led to a settlement of the issues related to the Company's application, which
is outlined below.
B. Settlement Stipulation
The Settlement Stipulation was filed on September 26, 2016, and signed by the Parties
including Commission Staff. The stipulation modified the Company's initial request by the
following terms:
1
Project Size 500 kw
Cost of Construction $1.2 Million
Shareholder Contribution 15 Percent
Marketing Budget $50,000
Number of Subscriptions 1,563
Subscription Fee $740
Payment Options Upfront
CheckPayment Methods
Embedded energy-related costs by rate class + PCA offsetSolar Energy Credit
Annual kWh's per Subscription 638
Subscription Term 25 Years
I Subscription Fee. Originally proposed to be $740, the Subscription Fee was lowered
to $562 to reflect three modifications, collectively referred to as the "Rate Base
Amounts." (1) a reduction reflecting the net present value of the incremental difference
between the Demand-Side Management Alternate Costs and the forecasted
embedded cost of energy, as applied to the projected output of the project over the
25-year life of the Program, (2) removal of the cost of the smart inverters from the total
project cost, and (3) a reduction reflecting the present value of the projected deferral
of Transmission and Distribution investments for the 25-year life of the project, as
determined by the Company's recently completed study that was presented to the
Energy Efficiency Advisory Group on August 30, 2016. The Rate Base Amounts
reduced total program costs by $323,000, resulting in a Subscription Fee of $562.
Monthlv Fee Option. The settlement agreement expanded the payment terms and
options offered to customers for their Subscription Fee payment. While customers
were still allowed to pay the entire Subscription Fee upfront as initially proposed, the
Company agreed to offer a "Bill Me" option through which customers would receive a
billforthe entire Subscription Fee that must be paid within 30 days, allowing customers
to utilize a crediUdebit card or their bank's bill pay option plus any nominal convenience
fees. The Company also agreed to offer a monthly fee option to Residential Service
Customers that would provide for recovery of the Subscription Fee over 24 equal
monthly payments of $26.31. The monthly fee included a carrying charge and an
administration charge to reflect the costs of administering this monthly option.
The Parties agreed that ldaho Power should be allowed to collect 100 percent of the revenue
requirement associated with the Rate Base Amounts through the Power Cost Adjustment
("PCA') mechanism or until the Company resets its base rates in a future general rate case
proceeding. Additionally, ldaho Power agreed to submit an annual report updating the
Commission and stakeholders on various program metrics.l The following table provides
program details as agreed upon in the settlement stipulation:
P Details - As Settled
1 ldaho Power's 2018 Community Solar Annual Report was filed on April 30, 2018, in Case No.
IPC-E-16-14.
2
2
Project Size:500 kw
Cost of Construction $1.2 Million
Shareholder Contribution:15 Percent
Rate Base Amount:$323,000
Marketing Budget:$50,000
Number of Subscriptions 1,563
Subscription Fee:$562
Payment Options Upfront or 24 Monthly Payments
Payment Methods:Check, Debit Card, Credit Card, Bank bill pay
Solar Energy Credit:Embedded energy-related costs by rate class + PCA offset
Annual kWh's per Subscription: 638
Subscription Term 25 Years
On October 31, 2016, the Commission issued Order No. 33638, approving the Settlement
Stipulation stating:
The record demonstrates that there is great interest and
enthusiasm for the Company's proposed Community Solar Pilot
Program. The issues raised by the parties were valid concerns
that touch on the viability of the project itself. We find that the
resolutions reached in the Settlement Stipulation represent fair
and reasonable compromises intended to help the proposed
pilot program succeed. We further find that pilot programs such
as that proposed here, on a small-scale, are valuable for learning
what works and what does not, to inform future projects with
similar offerings.2
The Commission concluded that the stipulation is just, fair, reasonable, and in the public
interest.
II. PROGRAM OUTREACH AND MARKETING EFFORTS
The Program was marketed utilizing a variety of strategies and tactics, including awareness
marketing reaching all customers and targeted approaches reaching customers most likely
to subscribe. Customers had the opportunity to learn about the Program through various
forms of communication such as public relations (face-to-face), the ldaho Power website,
direct mail, and social media. Several local newspapers and television stations ran stories
about the Program. Additionally, stakeholder organizations promoted the Program through
their various communication channels such as ICL's blog.
A. Direct Mail
The initial targeted direct mail letter went out in early November 2016 which included a target
audience of customers meeting one of the following criteria:
. Target customers living close to the array - national research shows those closer to
the array have a higher propensity to buy.o Customers with a higher propensity to participate - they are pro-environment and
undertake the highest number of energy conserving behaviors.. Customers with the discretionary income to make this purchase.
The Company chose these criteria based on information ldaho Power knows about its Green
Power participants. The Company assumed that a Community Solar participant may be
similar.
The initial direct mail letter was sent to over 11,000 customers. The second direct mail letter
was sent in January 2017 and was sent to almost 25,000 additional customers.
3
2 Order No. 33638, p. 10
Additionally, ldaho Power included program information in a bill insert to all ldaho residential
customers between December 20'tG and January 2017. ln August 2017, a "Green Choices"
bill insert summarizing renewable energy and conservation options was sent to al! residential
customers.
Program information was also included in the September 2016 and January, February, and
August 2017 Connections Newsletters that is included with bills to all customers. ln
September 2017, a program ad was placed in the Energy @ Work newsletter to small
business customers and an article promoting the Program as a unique and long-lasting gift
for nonprofits was included in the Energy lnsights newsletter to large commercial and
industrial customers.
B. Direct Customer Outreach
While the docket was being processed, ldaho Power had preliminary program information
available on its Company website. On the Community Solar landing page customers
interested in the Program could provide contact information to stay informed. lmmediately
following the Commission's Order on October 31, 2016, ldaho Power began its outreach to
customers by contacting the interested customers and letting them know the Program was
open for enrollment. Approximately 200 customers had requested notification of program
enrollment.
ln February and March 2017, ldaho Power's Customer Representatives put significant effort
into direct marketing by contacting business customers and informing them about the
Program. Over 300 one-on-one interactions were completed as a result of this effort.
Additionally, ldaho Power worked extensively with several large commercial customers and
one municipality on potential large purchases for the unsubscribed portions of the afiay.
Community solar presentations were given to rotary clubs, chambers, home owners
associations, and trade associations. Furthermore, ldaho Power had personneland displays
at events such as the Home and Garden Show, Smart Women Smart Money, ldaho
Environmental Forum, and severalothertrade events. ln February 2017,ldaho Power hosted
a Brown Bag lunch at its corporate headquarters and invited the public to attend to learn
about the Program.
C. Awareness Marketing
ldaho Power utilized its internal employee and retiree communication channels, publishing
an article in its all-employee newsletter and producing an informational video about the
Program which was posted to ldaho Power's public YouTube channel. Additionally, ldaho
Power used its social media presence on Facebook and lnstagram to post information about
the Program and to answer questions from customers. Combined, ldaho Power has more
than 17,000 followers on Facebook and lnstagram. ldaho Power representatives also gave
interviews about the Program for local television news and local radio shows.
4
D. Allied Marketing
Proponents of the Program and signers to the Settlement Stipulation (lCL, SRA, Sierra Club,
and Boise City) utilized their communication channels to promote the Program. lnformation
on their respective websites, social media, blog posts, and emails to members were many of
the ways these groups helped promote the Program.
Additionally, local media sources KTVB, ldaho Statesman, and the Boise Weekly all provided
news coverage about the Program.
The Company's initial email to interested customers informing them that the Program was
open for enrollment was one of the biggest drivers of early subscription purchases. ln fact,
almost half of the subscriptions purchased occurred in November and December 2016.
Despite continued marketing efforts, program participation continued to decline after the initial
batch of subscription purchases. Figure 1 below shows the number of applications received
by month.
Figure 1: Applications Received (November 2016 - December 2018)
65
On March 1,2017, or 120 days afterthe Commission Order, the Program was only 14 percent
subscribed. Although ldaho Power reserved the right to discontinue efforts on the Program
if the project was not fully subscribed within 120 days, the Company was determined to
provide the best opportunity for the success of the Program so the timeframe for enrollment
was extended.
On June 27, 2017, ldaho Power held a stakeholder meeting at its corporate headquarters
with the signors of the settlement stipulation. At this meeting, ldaho Power gave an update
on the Company's efforts and then-current enrollment levels. The Company aligned with
stakeholders to keep enrollment open until the end of the year and focus its efforts on larger
customers who might purchase a substantial amount of the unsubscribed portion of the aray.
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5
III. PROGRAM ENROLLMENT
39
26
20
10
During the Program's enrollment extension, ldaho Power continued to pursue interested large
commercial customers and municipalities with the intent of gaining substantial program
subscriptions. The Company has since learned that none of the large customers or
municipalities that expressed prior interest would be participating in the Program.
Additionally, the Company explored changing the size of the array; however, building smaller
was less economical and would have caused individual subscription costs to increase
substantially.
The Company sent a program update to participants in July 2017, January 2018, and March
2018 explaining the timeline extension and giving the option to cancel subscriptions. Figure
2 below shows the number of participants and subscriptions cancelled from July 2017 to
current.
Figure 2: Subscription Cancellations
50
45
40
35
30
25
2A
15
10
5
0
44
13
t7-lIiFeb Mar Apr May
I 44 11 11
Jul Aug Oct Nov Jan
20L7
7
2018
I Sum of Participants ! 5um of Subscriptions
zz r3 23 zz 11
--Iil--Jun Jul Aug Nov Jan
20L9
At the height of enrollment, June 2017, there were 239 subscriptions purchased or
approximately 15.3 percent of the total Program. Of those subscriptions purchased, 22
percent chose monthly payments and 78 percent chose the UpfronUBill Me option. Of those
239 subscriptions, approximately 95 percent were purchased by residential customers. The
remainder of the subscriptions were purchased by large and small commercial
customers. While a few participants purchased multiple subscriptions, most purchased a
single subscription.
As of the date of this filing, approximately 9.5 percent of the total Program is subscribed, at
148 subscriptions.
6
--
IV. SUBSCRIBER CHARACTERISTICS
ln an effort to gather data about the Program participants, ldaho Power compiled the number
of participants by city. The following table presents the data as of January 2019 and includes
participants that have cancelled their subscriptions.
Table 1: Participants by City
City
Blackfoot
Boise
Caldwell
Eagle
Emmett
Fruitland
Garden City
Garden City
Garden Valley
Hailey
Hammett
Horseshoe Bend
Jerome
Ketchum
Kimberly
Kuna
McCall
Meridian
Mountain Home
Nampa
Ontario
Pocatello
Sun Valley
Twin Falls
Wendell
Grand Total
Participants
I
126
Percentage
1o/o
7Oo/o
2o/o
2o/o
1o/o
1o/o
2o/o
1o/o
1o/o
1o/o
1o/o
lYo
1o/o
1o/o
1o/o
1o/o
2o/o
5%
1o/o
2o/o
2o/o
1%
1o/o
4o/o
1o/o
3
3
2
1
3
1
1
1
1
1
1
2
1
1
3
I
2
3
3
I
2
8
1
181
As evidenced in the chart, while most of the Community Solar participants were located in
Boise there were program participants located throughout ldaho Power's ldaho service
territory.
Additionally, as a voluntary part of enrolling in the Program, the participation agreement
requests that the customer indicate how they heard about the Program. Figure 3 below
summarizes the responses provided by participants.
7
Figure 3: Participant Responses
ldaho Conservation League IMedia Client
1%Empor,rrered
Community
1?6
?%
Multiple
296
V. CUSTOMER FEEDBACK
ln February and March 2017, Customer Representatives undertook a large effort to contact
business customers and inform them about the Program. As described in the marketing
section above, they completed over 300 one-on-one interactions with business customers.
Through this effort, the customer representatives requested specific feedback during those
visits. Only one percent of these customers said they were interested in the Program. The
following Figure 4 summarizes the remaining business customers' feedback on why they
were not interested in the Program.
Fi 4: Business Customer Feedback
Additionally, in March 2017,ldaho Power sent out a survey to all its Empowered Community
members (over 1,000) and received a 65 percent response rate on the survey. The following
question and responses are from survey responders interested in community solar:
Customer Rep
x9s
I
Other Reasons:
. 0ther priorities
' Not the decision maker
'lnterested {1%}
' Wants a localarray
' Wants recognition
' Not eligible
No value ta Other
prefer onsite
solar
10?6
ia;
d
W;
ltler*rs [iled
1496
erxn
Ccrpnnunicat on
C*5tl'*Sl
7qi
-J
Unknown
34?6
Q: Which of the following, if any, are concerns or barriers fo subscribing to the Community
So/ar Pilot?
overrll cort of rubccrlptlon
Mey not recover initiel cort
Dont hrvr rnough informrtlon rbout th. Pliot
fhr durrtion of thc *b*ripdon
Oth.r
Dont undrrrtend tht Pilot
Thr propored *olrr rrrry b not locrlrd ne* you
Unorrtein rbout tho nord for rcbr powrr
The following question and responses are from survey responders not interested in
community solar:
Q: Which of the following, if any, describe why you are not interested in subscribing to the
Community So/ar Pilot?
Ovtelt cott d rubrcription
M.y not rGcovar inhiel coct
ttr duntian of thr rubrdlpion
Thr propo*d rohr rrrry ir not locetrd n..r You
Uocart.in about tho ared for roler powrr
Don't undcr*trnd the Pilot
Oont hrrc rnough informrtion rbout thr Pilot
Srtirfird with ldrho Powrr'r curr.nt.n.rgy tourctt
Othcr
9
73.2?96
55.4496
34.65X
:it?616
17.8296
10.89t6
7.92116
0.9$,6
41.93)6
I re.rrx
7.3?16
6.45t6
7.3796
u.L276
f
11.9896
I zz.se*
Overall, the feedback from business customers and the Empowered Community survey
responses revealed that the common concerns about the Program were the cost to participate
and the return on investment.
VI. CUSTOMER COMMUNICATION PLAN
To ensure participating customers are informed of the Company's request to suspend the
offering, contemporaneous with this filing, ldaho Power wil! be contacting participants directly
via phone to inform them of the decision to suspend the offering. A letter will be sent to each
participant after the initial phone call to reiterate next steps. Customers who wish to have
their Subscription Fees refunded immediately will receive a check in the mailwithin six weeks,
otherwise refund checks will be sent to all participants upon Commission approval of this
filing.
lf the filing is approved, ldaho Power will update the Community Solar landing page on its
website to inform customers that the Program is suspended while ldaho Power and other
interested parties research alternative community solar projects. A notification sign-up
mechanism will be placed on the website, so interested customers can leave their contact
information, should a form of community solar move forward.
VII. THE FUTURE OF AN IDAHO POWER COMMUNITY SOLAR OFFERING
ldaho Power had requested that the initial offering for community solar be treated as a pilot
program to allow the Company to learn about the complexities associated with offering
community solar programs including customer commitment, construction, contracting,
interconnection, maintenance, and billing. While lack of sufficient subscribers did not enable
the Company to achieve each of these learning objectives, the Company is suspending this
Program with greater knowledge about customer commitment for this type of offering.
The Company believes that the terms of the Program, as agreed to in the Settlement
Stipulation, were fair, and importantly minimized the impact to non-participants. ldaho Power
wil! continue to look at alternative community solar projects that maintain these same
principles.
Through this process, the Company received valuable feedback from stakeholders
throughout the enrollment timeframe and is committed to working with stakeholders and
customers to determine a community solar program design that will be most successful in a
future offering. The Company will keep the Commission apprised in the event that a viable
option is identified in the future.
10
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 1st day of February 2019 I served a true and
correct copy IDAHO POWER'S 2019 COMMUNIry SOLAR ANNUAL REPORT to the
following named parties by the method indicated below, and addressed to the following:
Commission Staff
Karl Klein
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North Sixth Street
Boise, ldaho 83702
lndustrial Customers of ldaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
ldaho lrrigation Pumpers Association, lnc.
Eric L. Olsen
ECHO HAWK & OLSEN, PLLC
505 Pershing Avenue, Suite 100
P.O. Box 6119
Pocatello, ldaho 83205
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Anthony Yankel
12700 Blake Avenue, Unit 2505
Lakewood, Ohio 44107
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Snake River Alliance
Ken Miller, Energy Program Director
Snake River Alliance
223 North Sixth Street, Suite 317
P.O. Box 1731
Boise, Idaho 83701
Sierra Club
Zack Waterman
Director, ldaho Sierra Club
503 West Franklin Street
Boise, ldaho 83702
Michael Heckler
3606 North Prospect Way
Garden City, ldaho 83714
Gity of Boise Gity
Elizabeth A. Koeckeritz
Deputy City Attorney
Boise City Attorney's Office
150 North Capitol Boulevard
P.O. Box 500
Boise, ldaho 83701-0500
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rly Towe Assistant
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