20160901Comments.pdf

SNAKE RIVER
ALLIANCE
IOAHO'S NUCLEAR WATCHDOG & CLEAN ENERGY ADVOCATE
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From: Ken Miller, Clean Energy Program Director, Snake River Alliance
Re: Snake River Alliance Comments In the Matter of Idaho Power Company's Application for
Approval of New Tariff Schedule 63, a Community Solar Pilot Program (IPC-E-16-14)
Dear Commissioners,
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On behalf of our members in Idaho Power's service territory, the Snake River Alliance appreciates
this opportunity to comment on the above-referenced case. These comments are submitted
pursuant to the Commission's Notice of Modified Procedure (Order No. 33569) and the Parties'
Proposed Schedule as noticed by the Commission in that order.
The Snake River Alliance has a long history of supporting low-carbon and carbon-free energy
resources for Idaho electricity customers. We also have significant experience participating in
Idaho Power integrated resource plan (IRP) and other planning efforts. Furthermore, the Alliance
is actively engaged in solar power development as the sponsor of the "Solarize the Treasure
Valley" campaign to facilitate greater solar PV participation by identifying and introducing
potential residential and commercial solar PV clients to solar PV installers in Southwest Idaho and
adding significant amounts of new rooftop solar PV generation onto Idaho Power's grid.
The Alliance commends Idaho Power for this proposal for a community solar pilot project and for
the Company's initiative to seek stakeholder input on its proposal. We believe the Company's
proposal is a reasonable starting point for what is understandably a complex discussion of how to
craft a community solar project that is most affordable and accessible to all eligible Idaho Power
Box 1731 D Bo1sE, ID 83701 I 208.344.9161 Box 425 I POCATELLO, ID 83204 I 208.233.7212
WWW.SNAKERIVERALLIANCE.ORG
customers eager to participate in this offering, while at the same time advancing the larger goal of
greater solar power integration into Idaho Power's system.
It is clear that those interested in this case share the goal of crafting a program accessible to
customers who for various reasons cannot or do not avail themselves of other clean energy
resources such as net-metered rooftop solar PV. Judging by the successes similarly situated
utilities nationwide have demonstrated in developing community solar programs, it is also clear
that a carefully crafted Idaho Power community solar program should be an attractive offering to
the customers who, as Idaho Power agrees, seek access to this kind of energy resource.
Alliance Concerns With Idaho Power Proposal
While we share the Company's stated goal of increased solar development and customer adoption
of solar energy (APPLICATION, P. 2), there are some important elements of Idaho Power's
proposal that we believe warrant further exploration by the Commission and all stakeholders.
First, the Alliance believes that setting a lump sum, one-time, up-front purchase of one or more
shares in the community solar pilot project will hinder customer participation and the project's
chances of success. It is clear that, over time, such an investment makes good economic sense for
almost any customer. However, a buy-in cost of approximately $740 for a 25-year subscription
will presumably be a non-starter for many prospective shareowners. We believe more analyses
will demonstrate the value of allowing customers to purchase shares over time, which is
fundamental to fashioning a program that can succeed. As we have seen in many other
jurisdictions, there are myriad ways to frame such a payment structure to make the program
attractive to more customers. We also believe that through additional discussion, methods can be
identified to address Idaho Power's concerns regarding the risk of subscribers leaving the
program and stranding costs. For instance, a finance or carrying charge of some level for those
seeking monthly subscription payments, an early exit charge, or the ability to transfer a
subscription to another customer awaiting participation on a "wait list" would help reduce Idaho
Power's exposure to risk from program defection by customers.
We're concerned that the Company's Response to Request No. 7 (Idaho Power Company's
Response to the Idaho Conservation League's First Production Request, P. 9) demonstrates a lack
of enthusiasm by the Company to entertain monthly payment option alternatives. For instance, the
Company states that:
Allowing participants to pay monthly over the life of the program while at the same time
allowing them the ability to exit the program at any time introduces financial risk that would
ultimately be borne by the Company or non-participants. Because IDACORP shareholders
have already committed to provide a contribution equal to 15 percent of the construction
costs, the Company was not willing to increase shareholder exposure, nor was it wiling to offer
a payment option that would potentially result in non-participating customers being assigned
program-related costs. The Company did not feel that this risk was appropriate for a pilot
program and the proposed program structure eliminates this financial risk; consequently no
additional analysis was performed to quantify this risk.
As mentioned above, we believe such an analysis is absolutely required to quantify that risk if this
analysis is to be used as a basis on which to judge this proposed pilot project. The Company states
that it is not "wiling to offer a payment option that would potentially result in non-participating
customers being assigned program-related costs," yet it argues that the exact analysis required
reaching that conclusion is not necessary, and we disagree.
We are not proposing spreading the subscription fee over the course of 25 years, but we do
believe that making a payment option available over one to two years at a minimum will make the
program more appealing and accessible to prospective share owners. Of course, the possibility of
subscribers "unsubscribing" prior to paying the full cost of their shares (and the consequent
potential risk to the Company) must be addressed, but we believe the cost structure can be
arranged in ways to reduce that risk to the Company. We also agree that a methodology can be
established to protect the company against the possibility of subscribers moving outside Idaho
Power's service area with an unpaid subscription balance. Such circumstances are foreseeable and
can be managed through measures such as a cancellation fee, or, as mentioned above, arranging
for the balance of their subscription to be paid by replacement customers who have been placed
on a wait-list, or through other means.
We are also unconvinced that contracting a subscription-payment program to a "third-party"
contractor is necessary, sufficient, or practical -other than to achieve Idaho Power's stated goal of
inoculating itself, its shareholders, or its greater customer class from any financial risk. Inserting a
third party into this process would presumably add to the cost of administering the program while
delivering no real benefits to program participants and only to Idaho Power and its shareholders.
We don't share Idaho Power's position that a well-crafted community solar program must expose
non-participants to unnecessary risk. In fact, we believe there will always be risks associated with
programs such as this, and that it is impractical to isolate one party (Idaho Power shareholders)
from any risk at the expense of all others. This is, after all, a pilot project intended to identify
possible shortcomings in how the program is executed. The financial exposure to any particular
party in this case is minimal and worth the "risk" to determine whether the program is viable
beyond its pilot stage. No party wants to assume financial risk in moving forward with a project,
but we believe one of the points of having a "pilot" project is to identify possible risks moving
forward -not to ensure that one party is immune to any risk at this stage. To the extent the
Company argues that a third-party financing solution or manager is required to protect the
interests of its shareholders and/ or customers, we disagree.
A second but equally consequential component of the program is the valuation of the solar power
in question -the solar energy credit. Idaho Power has proposed (Paragraph 29, APPLICATION, P.
10) basing the Solar Energy Credit on its embedded energy-related costs recovered through base
rates and updating those costs "as needed." We believe a more accurate and meaningful basis for
the credit would be tied to Idaho Power's Commission-approved DSM avoided costs. It doesn't
appear that the value added by community solar participants in reducing the Company's need for
marginal resources is fully recognized in the Company's proposal, and we believe it should be.
We also believe that there is a "locational value" in projects such as this and we're concerned such
value has not been quantified by Idaho Power. We are eager to pursue this with the Company
going forward.
Low and Fixed-Income Issues
Inasmuch as the ability to afford participation in a community solar pilot project is central to this
application, we encourage stakeholders to more creatively explore avenues to include Idaho
Power customers on low or fixed incomes to participate the pilot. Such mechanisms have been
identified in community solar programs elsewhere, and we believe the success of this program
requires a similar effort. Idaho Power should be commended for staking a 15 percent share of this
pilot from its shareholders, and that could be one source of funds for a low-income "carve-out" of
sorts to enable certain customers who might not otherwise be able to participate to do so. For
example, Oregon has considered sequestering 10 percent of the generating capacity from
community solar projects to benefit low and fixed-income customers. The Community Action
Partnerships of Idaho could be a resource in developing such a program.
The George Washington University Solar Institute explored this issue in depth in 2014
(http://solar.gwu.edu/research/state-policies-increase-low-income-communities%E2%80%99-
access-solar-power) and among its key take-aways:
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Low-income households in the US spend a higher percentage of household income on
energy. Solar power could reduce the energy burden of low-income households by
providing electricity that is less than what utilities charge.
Low-income households face several barriers to going solar, including: difficulty meeting
credit requirements for financing or leasing, status as a renter, and inability to benefit from
tax credits or other incentive programs.
California has several successful programs and initiatives designed to support solar
deployment to low-income families. The California Solar Initiative (CS) sets aside $216
million to support the Single-Family Affordable Solar Housing (SASH) and Multifamily
Affordable Housing (MASH) that subsidize solar systems for low-income households.
California also used LIHEAP funds to help support solar installations for LIHEAP eligible
families.
Louisiana lacks public support and finance for low-income solar programs, but leasing
company PosiGen has developed a model that leverages state tax credits and secures
financing on community redevelopment terms.
Colorado's 2010 Community Solar Gardens (CSG) Act allow homeowners who without a
suitable roof or space to purchase shares of a solar installation. The Act requires that at
least 5 percent of the electricity from the CSG be reserved for low-income families in order
to qualify for solar renewable energy credits (SRECs).
• California, Louisiana, and Colorado's low-income solar policies and programs can serve as
models that can be replicated in other states.
Burden to Nonsubscribers
We agree with the Company that utility customers who choose not participate in the program
should not have undue costs shifted onto them from those who do participate. However, we
disagree that such a need exists in this community solar pilot project, and we reiterate that the
community solar program has the potential to deliver actual benefits to all customers regardless
of whether they participate in the program. There are system-wide benefits that a community solar
program accords all customers, including the delivery of capacity-valued power to the system
during times of highest demand and a lowered need for other marginal resources. We look
forward to further exploring and identifying those benefits as this docket moves forward.
We're eager to learn more about the justifications for the claims in Paragraph 7, APPLICATION P.
4, prohibiting Idaho Power employees and net metering customers from subscribing until after
the initial 60-day enrollment period "in order to test other customers' commitment to community
solar." If the Company is concerned that its own employees or its net metering customers may
somehow skew the perceived demand for this pilot offering, we would appreciate learning more
about that concern and how it can be addressed. Is the Company proposing that its employees be
prohibited from participating in the program while it tests "other customers' commitment to
community solar?"
We also suggest that a pilot program include a "wait list" of customers who sought to participate in
the program but who were precluded if it was fully subscribed. In such an event, those on the wait
list could replace subscribers who for one reason or another needed to leave the program, and in
such cases that would eliminate the need for a "cancellation fee" for departing subscribers. Unless
a subscriber chooses to remain in the program but at another address within Idaho Power's
service area, in which case the account would simply be transferred.
Conclusion
The Snake River Alliance appreciates this opportunity to comment on IPC-E-16-14, and we look
forward to continuing a productive dialog on the issues presented in this case.
Idaho Power and all interested parties have brought many important issues to into this discussion
and have raised thoughtful ideas on how to best proceed with a community solar pilot project.
This is an excellent beginning, and we believe there is ample room for continued discussions on
how to perfect a pilot project as all stakeholders strive toward a successful implementation.
Respectfully submitted,
Ken Miller
Clean Energy Program Director
Snake River Alliance
P.O. Bo 1731
Boise, ID 83701
[phone]
[e-mail]
Hand Delivered
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington St.
Boise, ID 83702
Via E-Mail
Daphne Huang, Idaho Public Utilities Commission: [e-mail].g_QY_
Lisa Nordstrom, Idaho Power Co.: [e-mail]
Matt Larkin, Idaho Power Co: [e-mail]
Peter Pengilly, Idaho Power Co.: [e-mail]
Benjamin Otto, Idaho Conservation League: [e-mail]
Peter Richardson, Industrial Customers of Idaho Power: [e-mail]
Don Reading, Industrial Customers of Idaho Power: [e-mail]
Eric Olsen, Idaho Irrigation Pumpers Association, Inc.: [e-mail]
Anthony Yankel, Idaho Irrigation Pumpers Association, Inc.: [e-mail]
Zack Waterman, Idaho Sierra Club: [e-mail]
Michael Heckler, Idaho Sierra Club: [e-mail]
Elizabeth A. Koeckeritz, Boise City Attorney's Office: [e-mail]