20161004notice_of_settlement_order_no_33616.pdf

Office of the Secretary
Service Date
October 4, 2016
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMP ANY'S APPLICATION TO )
APPROVE NEW TARIFF SCHEDULE 63, A )
COMMUNITY SOLAR PILOT PROGRAM )
)
)
)
)
____________ )
CASE NO. IPC-E-16-14
NOTICE OF
SETTLEMENT STIPULATION
NOTICE OF
COMMENT DEADLINE
ORDER NO. 33616
In June 2016, Idaho Power Company filed an Application with the Commission to
authorize it to implement an optional program, Schedule 63, Community Solar Pilot Program.
Under the Program, the Company proposes to build a 500 kilowatt (kW) single-axis tracking
community solar array in southeast Boise that will allow a limited number of Idaho Power's
customers to subscribe to the generation output.
The Commission issued a Notice of Application and Order setting a deadline for
interested parties to intervene. Order No. 33552. The Commission received and granted
petitions for intervention from Idaho Conservation League (ICL), Idaho Irrigation Pumpers
Association (IIP A), Industrial Customers of Idaho Power (ICIP), Sierra Club, Snake River
Alliance (SRA), and the City of Boise. Order Nos. 33552, 33557, 33560, 33562. The parties
conferred informally and agreed upon a schedule to process the matter by Modified Procedure,
and to engage in settlement discussions to address the parties' concerns about the project as
initially proposed. The Commission issued a Notice of Modified Procedure adopting the parties'
agreed schedule. Order No. 33569.
On September 26, 2016, Idaho Power filed a Settlement Stipulation and Agreed
Motion to Approve Settlement Stipulation, signed by all parties to this matter. With the Motion,
the Company filed supporting documents, including the revised proposed Schedule 63. The
Commission now issues this Notice of the Settlement Stipulation and Notice of Comment
Deadline.
NOTICE OF SETTLEMENT STIPULATION
YOU ARE HEREBY NOTIFIED that the parties have agreed to modify Schedule 63
(Community Solar Pilot Program) as it was proposed in the Company's Application. The terms
NOTICE OF SETTLEMENT STIPULATION
NOTICE OF COMMENT DEADLINE
ORDER NO. 33616
of the parties' agreement are set forth in a Settlement Stipulation signed by all parties. The
Settlement Stipulation is summarized in part in this Notice, but the complete document and
attachments (including revised Schedule 63) are available for public inspection, along with all
other public documents filed in this matter, during regular business hours at the Commission
offices. These records are also available on the Commission's web site at www.puc.idaho.gov.
Click on the "File Room" tab at the top of the page, scroll down to "Open Electric Cases," then
click on either case number as shown on the front of this document.
YOU ARE FURTHER NOTIFIED that the Settlement Stipulation addresses the
following main concerns, among other issues, resulting from settlement discussions between the
Parties: (1) calculation of the Program's solar energy credit; (2) the Program's subscription fee;
(3) a Company-facilitated monthly fee option; and (4) the Company's cost recovery.
YOU ARE FURTHER NOTIFIED that, as to the solar energy credit, the parties have
agreed that the Program "will use the on-bill Solar Energy Credit reflecting the embedded cost of
energy, as well as the proposed application of each participant's portion of monthly generation as
an offset to billed kilowatt-hours subject to the Power Cost Adjustment ('PCA')." Settlement
Stipulation at 3. However, "the initially-proposed Program will be modified to provide the
present value of the incremental difference between the DSM Alternate costs identified in the
2015 Integrated Resource Plan ... and projected embedded energy costs as a reduction to the
Subscription Fee." Id. at 4. The parties agreed Idaho Power "will provide the upfront
investment necessary to facilitate the reduction to the participant Subscription Fee and should be
authorized to recover the return on and return of that investment at the Company's then-current
authorized rate of return through the annual PCA until the Company's next general rate case."
Id.
YOU ARE FURTHER NOTIFIED that, as to the subscription fee, the parties agreed
it will be lowered from $740 (initially proposed) to $562, reflecting three changes in "Rate Base
Amounts":
( 1) a reduction reflecting the net present value of the incremental difference
between the DSM 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
NOTICE OF SETTLEMENT STIPULATION
NOTICE OF COMMENT DEADLINE
ORDER NO. 33616 2
Id. at 4.
(3) a reduction reflecting the present value of the projected deferral of
[transmission and distribution (T&D)] investments for the 25-year life of
the project.
YOU ARE FURTHER NOTIFIED that, as to payment options, the parties agreed the
Company will offer a "Bill Me" option, and a 24-month monthly fee option (with a monthly fee
amount of $26.31 ). Id. at 5. The parties agreed that "participants who choose the 24-month fee
option may transfer their subscription(s) to eligible customers within the 24-month time period."
Id. The parties further agreed that, "[i]f eligible participants elect to utilize the 24-month fee
option and fail to complete all 24 payments or request an eligible subscription transfer, Idaho
Power will utilize a waitlist if customer interest has exceeded the amount of available
subscriptions." Id.
YOU ARE FURTHER NOTIFIED that the parties agreed the waitlist for the Program
should "be prioritized on a first-come, first-served basis, and will provide customers with the
option to purchase any unpaid subscriptions through a one-time payment at the amount of the
unpaid balance." Id. at 5-6.
YOU ARE FURTHER NOTIFIED that, as to cost recovery, the parties agreed "Idaho
Power should be allowed to collect 100 percent of the revenue requirement associated with the
Rate Base Amounts" described in the subscription fee provision, "through the Company's annual
PCA mechanism." Id. at 6. In addition, the parties agreed that "any Operation and Maintenance
expenses in excess of those included in the determination of subscription fees or specifically
identified for recovery as part of this Settlement Stipulation must be reviewed for prudence by
the Commission prior to recovery through customer rates." Id.
YOU ARE FURTHER NOTIFIED that, under the Settlement Stipulation, "a portion
of the initial project plant investment will be funded by Idaho Power and eligible for rate base
treatment," which "reflects anticipated Program net power cost savings," thus the deferral of
T&D investment, and other customer benefits would be paid for by all customers, as detailed in
accounting treatment and cost recovery detailed in the Stipulation. Id. at 7.
YOU ARE FURTHER NOTIFIED that the Company agreed to submit an annual
report to the Commission and stakeholders that would include the following items:
• The rate and timing of acquisition of subscriptions;
NOTICE OF SETTLEMENT STIPULATION
NOTICE OF COMMENT DEADLINE
ORDER NO. 33616 3
• Total subscriptions by rate class;
• The number of participants choosing each payment option;
• Default rate on the monthly fee option;
• Number of participant transfers to other eligible customers;
• Number of participant move-outs without subscription transfer;
• Marketing expenditures;
• Construction costs;
• System output and allocation to subscribers;
• Participant satisfaction survey results (when available);
• Operations and maintenance expense; and
• Warranty items.
Id. at 8.
YOU ARE FURTHER NOTIFIED that the parties agreed no party "shall be deemed
to have agreed that any method, theory, or principle of regulation or cost recovery employed in
arriving at this Settlement Stipulation is appropriate for resolving any issues in any other
proceeding in the future." Id. at 10. The parties further agreed that all "terms and conditions of
this Settlement Stipulation are subject to approval by the Commission." Id. at 10-11.
YOU ARE FURTHER NOTIFIED that the Commission is not bound by the parties'
settlement. The Commission will independently review any proposed settlement to determine
whether it is just, fair and reasonable, in the public interest, or otherwise in accordance with law
or regulatory policy. The proponents of a proposed settlement carry the burden of showing that
the settlement is reasonable, in the public interest, or otherwise in accordance with law or
regulatory policy.
NOTICE OF COMMENT DEADLINE
YOU ARE FURTHER NOTIFIED that the Commission issued a Notice of Modified
Procedure inviting comment from interested persons regarding the initial Application, over a 21-
day period ending September 6, 2016. Order No. 33569. Also, in its Application, the Company
requested that this matter be processed as expeditiously as possible to ensure sufficient time to
solicit Program participants and construct the solar array before its proposed June 2017
commercial operation date. Application at 2. Accordingly, we find it appropriate to set a 14-day
comment period to receive comments specific to the settlement terms. See IDAP A
31.01.01.202.02.
NOTICE OF SETTLEMENT STIPULATION
NOTICE OF COMMENT DEADLINE
ORDER NO. 33616 4
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Settlement Stipulation may file with the Commission a written comment in support or in
opposition by no later than 14 days from the service date of this Order. The comment must
contain a statement of reasons supporting the comment. Written comments concerning this
Settlement Stipulation may be mailed to the Commission and the Company at the addresses
reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
4 72 W. Washington St.
Boise, ID 83702-5918
Lisa Nordstrom
Matt Larkin
Peter Pengilly
Idaho Power
PO Box 70
Boise, ID 83707-0070
E-Mail: [e-mail]
mlarkin(a)idahopower.com
[e-mail]
dockets(a)idahopower.com
These comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission's home page located at www.puc.idaho.gov. Click the "Case Comment or Question
Form" under the "Consumers" tab, and complete the form using the case number as it appears on
the front of this document. These comments must also be sent to the Company at the e-mail
addresses listed above.
YOU ARE FURTHER NOTIFIED that the Company may file reply comments, if
necessary, by no later than 21 days from the service date of this Order.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code, and specifically
Idaho Code§ 61-503.
NOTICE OF SETTLEMENT STIPULATION
NOTICE OF COMMENT DEADLINE
ORDER NO. 33616 5
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission's Rules of Procedure, IDAPA 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that any interested persons and the parties may file
written comments regarding the Settlement Stipulation by no later than 14 days from the service
date of this Order. The Company may file a reply, if needed, by no later than 21 days from the
service date of this Order.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of October 2016.
ATTEST:
Commission Secretary
O:IPC-E-16-14_djh4
NOTICE OF SETTLEMENT STIPULATION
NOTICE OF COMMENT DEADLINE
ERIC ANDERSON, COMMISSIONER
ORDER NO. 33616 6