20170727Aschenbrenner Direct.pdf

CASE NO. IPC_E_17-13
f\'.i\Jr1
BEEORE THE IDAHO PUBL]C UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY' S APPLICATION FOR
AUTHORITY TO ESTABLISH NEW
SCHEDULES EOR RESIDENTIAL AND
SMALL GENERAL SERVICE CUSTOMERS
WITH ON-SITE GENERATION
IDAHO POWER COMPANY
DIRECT TESTIMONY
OE
CONN]E G. ASCHENBRENNER
1 Q. Please state your name and business address.
2 A. My name is Connie G. Aschenbrenner. My
3 business address is L227 West Idaho Street, Boj-se, Idaho.
4 Q. By whom are you employed and in what capacity?
5 A. I am empJ-oyed by Idaho Power Company ("Idaho
6 Power" or "Company") as the Manager of Rate Design in the
7 Regulatory Affairs Department.
8 Q. Please describe your educational background.
9 A. In May of 2006, I received a Bachelor of
10 Business Adminlstration degree in Finance from Boise State
11 Unlversity in Boise, Idaho. In
Busj-ness Administration degree
20!L, I earned a Master of
13 In addition, I have attended the electric
State University.
utility
74 ratemaking course The Basics: PracticaT Regulatory
t2 from Boise
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Training
Newfor the ELectric Industry, a course
Mexico State University's Center for
offered through
Public Util-ities.t6
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O. Pl-ease describe your work experience with
Idaho Power.
A. In 201-2, I was hired as a Regulatory Analyst
in the Company's Regulatory Affairs department. My primary
responsibil-ities included support of the Company's
Commercial and Industrial customer cl-ass's rate design and
general support of tariff rules and regulations. In 2015,
I assumed responsibilities associated with residential and
smal-l- general service (*R&SGS") rate design as weII as
ASCHENBRENNER, DI 1
Idaho Power Company
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1 activities associated with demand-side management
2 actlities. In 2076, T was promoted to a Senior Regulatory
3 Analyst and my responsibilities expanded to j-nclude the
4 development of complex cost-rel-ated studj-es. In 20ll , I
5 was promoted to my current posj-tion of Manager of Rate
6 Design for Idaho Power. I am currently responslble for the
7 management of the rate design strategies of the Company as
8 well as the oversight of all tariff administratj-on.
9 Q. How is your testj-mony organized?
10 A. The first sectj-on of my testimony wj-I1 detail
11 the history of the Company's net metering service from its
L2 incept j-on to the implementation of Schedul-e 84, Customer
13 Energy Production, Net Metering Service ("Schedule 84")
74 currently in p1ace, specifical-Iy highlighting discussions
1-5 regarding cost shifting caused by the current residential
t6 rate design. The second section will provide the Idaho
71 Public Utilities Commission ("Commissj-on") with updated net
18 metering participation and growth rates. The third section
79 of my testimony wilJ- discuss the Company's stakeholder and
20 customer outreach efforts in 20L6 and 2017. The fourth
2I section wil-l descrj-be the Company's request for
22 establishment of new customer cl-asses for R&SGS customers
23 with on-site generation. The fifth sectlon of my testimony
24 wil-I describe the Company's request to impJ-ement two new
25 tariff Schedules, Schedule 6, Residential Service On-Site
ASCHENBRENNER, DT 2
Idaho Power Company
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Generation, ("Schedule 6")
Service On-Site Generation,
Schedule 84 to new service
and Schedule 8, Small General
("Schedule 8") and close
for Idaho R&SGS customers upon
sixth4 the adoption
5 section of my
6 communication
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of Schedules 6 and 8. And finaI1y, the
will- describe the Company's
to this filing.
testimony
efforts as they relate
I. HISTORY
Please provide a general descrj-ptj-on of net8Q
9 metering
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servr_ce.
Net metering service is offered by the Company
to provide for the transfer of
from customer-owned generatlon
of offsetting a1I or a portion
usage.
o
16 service?
L1 A
18 Regulatory Pol-icies
L9 offered net metering
20 energy of less than
electricity to the Company
facilities with the intent
of a customer's energy
How long has Idaho Power offered net metering
Pursuant to Section 210 of the Public Utility
Company fj-rst
non-firm
offset all or a
Act of L91B (PURPA), the
service to suppliers of
100 kj-lowatts ("kW") to
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portion of their retaj-l- loads through Schedule 86,
Cogeneration and Smal-l- Power Production Non-Eirm Energy,
("Schedule 86"), under Option C, approved by Commission
Order No. 18358 issued in October 1983. In that case (Case
ASCHENBRENNER, DI 3
Idaho Power Company
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No. U-1006-200), Schedul-e 86 was modifled to accommodate
one customer with an installed photovoltaic ("PV") system.
O. How was the Company's net metering service
structured at the time of its lnitial offering?
A. The net metering service establ-ished j-n 1983
was deslgned to
or a portion of
fdaho Power charged
energy consumed and
provide customers the
their usage with their
customers the ful1
ability to offset all
own generation.
retail rate for net
credited the full retail rate for
10 excess net generation
O. Did the
delj-vered to the Company.
11 Company propose
12 its net metering service after it was
13 A.Yes. In October of 1995, the Company filed an
\4 application in Case No. IPC-E-95-15 requesting to modify
15 the terms of Schedule 86. As part of this case, a formula-
L6 based rate was approved in Order No. 26750 to allow the
L7 Company to recover certai-n non-generation costs from net
18 metering customers. When the formula rate was created, the
L9 Company's net metering service still consisted of a single
20 customer with an instal1ed PV system; therefore, the
2L Company's formula rate proposal was specifically designed
22 for PV systems. It was anticipated that when other types
23 of self-generation were introduced, new formula rates woul-d
24 be created for those specific generation types.
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ASCHENBRENNER, DI 4
Idaho Power Company
any modifications to
establ-ished in 1983?
1 Q. Was net metering servj-ce further modified
2 following the conclusion of Case No. IPC-E-95-15?
3 A. Yes. In February of 2002, the Commissj-on
4 issued Order No. 28951 in Case No. IPC-E-01-39 creating
5 Schedule 84 specifJ-cal1y for net metering service and
6 removing it from Schedule 86, which now addressed non-firm
7 cogenerati-on and small power production without a retail
8 sales offset option. As part of that Order, pricing
9 associated with the Company's net metering service was
10 modified to remove the previously-described formula rate.
11 O. What were the driving factors for creating
L2 Schedule 84 and removing net metering service from Schedule
13 86?
L4 A. At the time Schedule 84 was implemented in
15 2002, there was one customer taking service under the net
1,6 metering provision of Schedule 86 and two customers who had
77 requests pending. The Schedule 86 formul-a rate was
18 impractical because the rate required a manual billing
L9 process that was complex and time intensive, and was onJ-y
20 designed to accommodate PV installations. Through the
2L creatj-on of Schedul-e 84, pricing was simplified for net
22 metering customers by eliminating the formula rate
23 component of customers' bills and applying the full retail
24 rate to net usage or generation. This allowed the Company
25 to use its existing billing system, a single meter, and
ASCHENBRENNER, DI 5
fdaho Power Company
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resulted in a charge or credit at a rate consistent with a
customer's respective standard service rate class. It also
allowed the Company to more easily expand j-ts net metering
service to a broader range of generation resources.
O. Did the Commj-ssion Staff ("Staff") raj-se any
concerns with the Company's proposal to
the full retail rate?
credit customers
for generation at
A. Yes.Staff's Comments indicated that
10 participation in the net metering service was limited:1
subsidization would occur but would be limited if
For the Commission to accept a net
metering tariff where customergeneration is credited at full retail-rates, it must be willing to accept thefact that Idaho Power may not recover itsfull- costs of providing service from net
metering customers. Those costs that are
uncollected must either come from Idaho
Power through its sharehol-ders or f romother customers col-Iectj-veIy.
o.
regarding
rate?
Despite Staff's concerns about thel-ikelihood that some of the costs ofserving net metering customers wlII besubsidized by other customers, theoverall dolIar impacts of net metering
will be smal-I if participation Levefs are
restricted.
Did the Company share Staff's concerns
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the crediting of customers at the full retail
1 Case No. IPC-E-O1-39, Staff's Comments, p. 3 (emphasis added).
ASCHENBRENNER, D] 6
Idaho Power Company
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1 A. Yes. In response to two separate Staff
2 production requests in Case No. IPC-E-01-39, the Company
3 stated, "It is possible that the retail- rate may be higher
4 lthan the value of generationl,"2 and acknowledged that
5 Idaho Power woul-d not fully recover its cost of providing
6 service if a net metering customer fully offsets their
7 monthly usage with their own generation.:
I Q. Why did the Company propose to credit net
9 metering customers at the fu1l retail rate in 2001 if it
10 understood the potential for cost shifting?
11 A. The Company's proposal in Case No. IPC-E-01-39
L2 was intended to facil-itate the development of small
13 resources and was specifically designed to provide a
1-4 simple, standardized interconnection arrangement utiliz)-ng
15 a single, inexpensive watt-hour meter. The Company
76 acknowledged the proposal- would result in a small subsidy
L7 to those customers that chose to develop net metered
18 projects, but pointed out that if the program was capped,
19 this subsidy would be limlted to a reasonable l-evel and
20 would be partially offset by savings resulting from the
2L simplifications of the net metering service.
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2 Case No. IPC-E-01-39, Idaho Power's Response to Staff'sProduction Request No. 6.
3 Case No. IPC-E-01-39, fdaho Power's Response to Staff'sProduction Request No. 1.
ASCHENBRENNER, DI 1
Idaho Power Company
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In the response to Production Request No. 6
referenced above, the Company stated:
The Company believes, dt this time, thatthe benefits gained in reducingadministrative costs offset anypotential difference Iin value]. By
employing retail- rates, the Company willeliminate a cumbersome, involved processrequired to cal-cul-ate the additionalmonthly charge currently defined under
Schedule 86 Option B. By providing asimple mechanism to credit customergeneration at retail rates, the Companywil-l- reduce administrative costs and
customers wil-l- have a methodology thatwill be easier to understand and tracktheir account.
Was the issue of crediting customers at the
recognizes that in the program we approve
today f or Schedu1es 1 and 7 customers,
the ful1 cost of the program may not be
borne by part j-cipants. Raising the cdp,we xeaLize, increases the level- of
subsidization We also expect
further information regarding cost
shj-fting and the Company's ability torecover customer costs from program
participants.
a Case No. IPC-E-01-39, Order No. 28951, p. 12.
ASCHENBRENNER, DI B
Idaho Power Company
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20 fu1l retail rate addressed by the Commission in that same
27 case?
22 A. Yes. The Commisslon placed limits on
23 individual R&SGS projects of 25 kW as well as a total
24 install-ed capacity limit of 2.9 megawatts (*MW") . In its
25 Order No. 2895L, the Commission stated it:4
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O. Were further modifications made to the
Company's net metering service after the conclusion of Case
No. IPC-E-01-39?
A. Yes. In Order No. 28951, the Commission
directed Idaho Power to file a net metering proposal for
its other customer classes (customers with three phase
servj-ce and demand metered customers) within six weeks of
the issuance of the Order.s On March 29, 2002, Idaho Power
filed
10 with
an application in Case No.
the Commission' s directive.
IPC-E-02-04 in compliance
In that filing, the
as the 2.9 MW cap remained11
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so substantial- as to justify special
ratemaking treatment. 6
O. What was the result of Case No. IPC-E-02-04?
A. The Commission issued Order No. 29094 on
Company reiterated that
in place, excess costs
metering should not be
August 2L, 2002, approving the
without modification. In this
so long
and subsidies associated with net
Company's compliance filing
Order, the Commission
reaffirmed its view
generation capacity
time.7
that the cumul-ative
limit of 2.9 MW was
nameplate
appropri-ate at that
sId.at1
6 Case No.
7 Case No.
TPC-E-02-04,
lPC-E-02-04,
Drake DI,
Order No.
p. 11 .
29094,p. 1.
ASCHENBRENNER, D] 9
Idaho Power Company
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the Company's
limit of 2.9
A
How did Idaho Power notify the Commission when
net metering service was nearing the
generation?
capacity
MW of cumul-ative nameplate
The Company fited Case No.
10
IPC-E-!2-21 with
the Commission on November 30, 2012.
The prlmary objectives of the Company's request in
IPC-E-L2-21 were to (1) expand the net metering service
beyond the 2.9 MW cap, (2) establ-ish new customer cl-asses
and implement a modified rate structure for R&SGS net
metering customers, and (3) modify Schedule 12 and Schedul-e
84 to allow expansion of the offering.
O. What was the Company's request regarding the
capacity limit of the net metering service?
A. In its application, the Company sought to
double the capacity limit to 5.8 MW. The Company expressed
its belief that maintaining a capacity limit was important
to al-Iow the Company and other stakehol-ders the opportunity
to evaluate the net metering servlce as it expanded. By
increasing the capacity limit to 5.8 MW, the Company would
facilitate the expansion of its net metering service while
maintaining the ability to appropriately evaluate and
request modificatlons to the service as necessary.
O. Did the Commission authorize a higher cap in
24 Case No. IPC-E-L2-21?
ASCHENBRENNER, DI 10
Idaho Power Company
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A. No. In its
declined to increase the
eliminated it entirely.
No. 32846, the Commission
that time and instead
Order
cap
In
at
conjunction with removal of the
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capacity limit, the Commission ordered the Company to file
an annual- status report with the Commission discussing the
net metering service. In that order, the Commission
stated: e
The Report shall discuss, without
1J-mitation, the net metering service
provisions and pricing and how
distributed generation may be impacting
system reliabil-ity. The Company also
shal-I promptly file an earlier report if
at any time it expects its net meteringt
service will materially and negativeJ-y
impact its system.
o.Did the Commission approve the Company's
request
pricing
to establish new customer classes and modify the
structure in IPC-E-12-21?
A. No. In Order No. 32846, whil-e the Commission
acknowledged that net metering customers "have some
characteristj-cs that could justify moving them into a
separate cl-ass and onto a different schedule from the
general R&SGS rate cl-asses,"t Lhre Commission declined to
authorize pricing changes at that time.
8 Case No. IPC-E-12-2'1, Order No. 32846, p. 19.
e Id. at 12.
ASCHENBRENNER, DI 11
Idaho Power Company
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participation
A.
net metering service?
1,468 active and pendlngto ,r.a
metering systems service area as of June 30,
2071. This represents a 1-5 percent increase in the number
of systems since the Company's l-ast update to the
Commj-ssion in the 2017 Annual- Net Metering Status Report
(*2017 Report") found as Exhibit No. 9 to my testimony
in just three months, the number of active and pending
systems in Idaho has increased from 7,217 as of March 37,
201,1, to L,468 as of June 30, 2011 .
The figures j-n Table 1 reflect customers taking net
II. CURRENT NET METERING PARTICTPATION
V'lhat is the current level of customer
1n the Company's
in its Idaho
The
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metering service, ds well as customers
applications for net metering service
who had submitted
as of June 30, 2017.
capacity in MW16 The figures in Table 2 reflect the nameplate
l7 of those same systems.
Tab].e 1 - Idaho Net ![eteri1B Customers
10 "Pending" refers to a customer who has applied to participate
in the Company's net metering service, but whose system has not yet
been inspected and energized. In Idaho Power's experience, once anapplication for a net metering system is submitted, that system wil-l-generally come online within approximately five months.
ASCHENBRENNER, DI 12
Idaho Power Company
PhotovoltaicCLass tlind Hydro/Other Tota1
Residential-7,258 55 l 1,320
Commercial &
Industrial-133 6 4 143
4Irrigation I 5
Tota].1,395 62 11 L,468
1 Tab].e 2 Idaho Net ldeter te (in MI{h)
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O. How does the nameplate capacity of i-nstalled
net metering systems at June 30, 2077, compare to the
original participation cap of 2.9 MVf, as authorized by the
Commi-ssion in 2002?
A. The total capacity of active and pending
systems in the Company's ldaho servj-ce area was 11.11 MW as
of June 30, 2017, wlth growth of al-most four tj-mes the
original cap. Figure 1 shows year-over-year j-nstall-ed
capacity of Idaho's net metering service since 2012. The
solid horizontal line represents the lnitial- 2.9 MW cap
authorized by the Commission in 2002.
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1: Cumulative te
0 Does the Company bel-ieve that customers wiII
continue to install on-site generation?
ASCHENBRENNER, DI 13
Idaho Power Company
CIass Photovoltaic Itind Eydro/Other Total
Residential 7 .95 0.29 0.07 8.31
0.09 2.62Commercial &
Industrial-2.48 0.05
0.14 0.04 0.18Irr j-gati-on
Total 10.57 0.38 0.16 11.11
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0
1,500
1,40O
1,2(X'
1,(rco
800
600
tlOO
200
0
oo
.s!coA.!,CocEoo.=;Ea
o
t,oI
==g(,oCLot,
20L2 2013 20t4 2015
r Residential r Commercial & lndustrial
2016 2017 (2Ql
rlrrigation
-Capacity
1 A. Yes. As noted in Mr. Tatum's testimony, as
2 well as in previous reports to the Commissiontt, the Company
3 expects that as the costs of installing a residential PV
4 system improve, the installation of these systems will
5 become more attractive to and financially attainable by the
6 Company's average residential customer.
7 Q. Has the Company projected future adoption of
8 residential customers with on-site generation?
9 A. Yes. As previously reported to the
10 Commissiorrr12 using historical growth trends, the Company
11 projects that the count of residential- customers wi-th on-
1,2 site generation could be as high as 7,032 customers or as
13 1ow as 6,1'71 customers by 202L, with the median growth rate
L4 resulting in 6,816 resj-dential customers with on-site
15 generation. Figure 2 reflects this forecast.
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11 Case No. 7PC-E-72-2'7, 2016 Annual Net Metering Status Report,
p. 8
12 Case No. IPC-E-72-21, 2017 Annual Net Metering Status Report,
ASCHENBRENNER, DI 74
Idaho Power Company
p. 8
1 Figrute 2: Forecasted Growth in Residential On-Site2 Generation
III. CUSTOMER AT{D STAIGHOI,DER ENGAGEMENT
O.Did the Company consult with R&SGS net
metering customers and stakeholders prior to the date of
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this filing?
A.
stakehol-ders
o.
A.
Yes. The Company consulted with customers and
in 2016 and again in 20L1.
Please describe the Company's efforts in 2016.
In July of 20L6, the Company held a workshop
and stakeholders to share the results of the
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20L6 Annual Net Metering Status Report to the Commission
(*2016 Report") and sol-icit feedback on a potential filing
the Company was considering. The Company sent an
invitation (vla direct mail) to al-1 current and pendl-ng
R&SGS net metering customers, an invitation (via email) to
all parties who intervened in Case No. IPC-E-12-27, and an
ASCHENBRENNER, DI ]-5
Idaho Power Company
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7,Om
7,O32
5,815
6,0(X)
5,0@
4,0(x)
3,0(X)
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2016 20L7 2018 2019
-Low -Median -Hi8h
2020 202L
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1 invitation (via email) to a I1st of installers who were
2 known to be doing business in the Company's service area.
3 In total-, the Company sent out approximately 830
4 invitations to particj-pate in the workshop.
5 Q. What were the objectives of the workshop?
6 A. The Company's objectives were to (1) share the
7 results of the cost shifting analysis presented to the
8 Commission in the 2076 Report, (2) raise awareness among
9 the Company's R&SGS net metering customers about the issue
10 of cost shifting and that the Company was considering
11 making a filing that may seek to modify rate design, and
L2 (3) solicit input, feedback, and concerns from customers
13 and stakeholders.
L4 0. What was the format of the workshop?
15 A. As one of the Company's representatives, I
76 presented participants with an overview of how Idaho Power
tl quantifies the costs associated with providing service
18 (revenue requirement), a brief explanation of how Idaho
19 Power then assigns those costs to the various customer
20 classes (class cost-of-service study process), as weII as
2L an explanation of how existing residential rates are
22 establ-ished to collect those costs (rate design) . f al-so
23 presented the cost shift findings published in the 2016
24 Report. The presentation used at the workshop is attached
25 as Exhibit No. 10.
ASCHENBRENNER, DI 16
Idaho Power Company
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I then discussed a potential "straw man" for net
metering residential- rate design and the Company's
evaluation of a filing that woul-d include: (1) recognizinq
how net metering customers use the system differently by
segmenting R&SGS net metering customers into their own
respective classes, and (2) addressing the cost shift
caused by the existing residential rate design by
establishing a rate that would col-Iect more fixed costs
through a higher fixed service charge from those cl-asses.
I also explained to participants that the Company was
considering different options that could be proposed to
mitigate the impact of the potential- filing to exj-sting net
metering customers.
O. How many customers attended the workshop?
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A. The Company had 1,24
attend in person and 18 customers
participated remotely via WebEx.
0.
the workshop?
A. Yes.
questions to
should Idaho
customers and stakeholders
and stakehol-ders
Did you ask for feedback from participants of
After my presentation, I posed two
participants to promote discussion: (1) how
Power best coll-ect grid costs from net
23 metering customers, and (2) if rates were changed, how can
24 Idaho Power best mitigate the impact to existj-ng net
25 metering customers?
ASCHENBRENNER, DI 71
Idaho Power Company
1 Q. Generally, what did you hear from the workshop
2 particj-pants?
3 A. Overa11, of the customers and stakeholders who
4 commented, most felt that the Company's analysis contained
5 in the 2016 Report should have quantified potential
6 benefits that on-site, customer-owned generation systems
7 provide to the Company. Several of those who commented
I felt that the Company's assessment of cost assignment
9 overstated a net metering customer's use of fdaho Power's
10 system.
11 Some commenting participants felt that the straw man
t2 rate design was punitive for net metering customers and
13 would discourage future adoption of net metering. A few
L4 participants felt that others (the Company or other
15 customers) should be compensating customers with on-site
L6 generation for the investment they made in thej-r systems.
71 O. What did the Company do with the feedback it
18 received from participants of the workshop?
t9 A. After carefully consideri-ng the input from
20 customers and stakeholders, the Company decided not to make
27 a filing tn 20L6 and instead contemplated alternate case
22 strategy while continuing to monitor the participation j-n
23 the net meterlng service.
24 A. Did the Company engage 1n additional
25 stakeholder outreach?
ASCHENBRENNER, DI 18
Idaho Power Company
1 A. Yes. The Company hel-d a stakeholder meeting
2 on June 16, 20!7. The Company j-nvited (via email) all
3 parties who intervened j-n Case No. IPC-E-L2-21.
4 Q. What were the objectives of this meeting?
5 A. The Company's objectives were to (1) update
6 participants on activity since the customer meeting held in
7 July 2076, (2) inform stakeholders of a filing the Company
8 was considerlng, and (3) invite additional feedback from
9 stakehol-ders.
10 A. What was the format of the meeting?
11 A. The Company held a 9O-minute meeting at its
L2 Corporate Headquarters. There was no formal presentation,
13 but as a representative of the Company, I provided a
L4 summary of the July 20L6 workshop and discussed the
15 Company's decision to not pursue pricing changes for R&SGS
76 net metering outside of a future rate proceeding. I
1,7 dj-scussed the Company's deslre to continue to work with
18 stakeholders both throughout this proceeding and in advance
1,9 of a future rate case to determine areas of alignment
20 regarding rate design and compensation methodologies for
27 R&SGS customers who install distributed energy resources
22 (*DER") . I also discussed the Company's planned filing and
23 why the Company feels that establishing customer classes in
24 advance of a general rate proceeding is necessary.
25 O. How many stakehol-ders attended the meeting?
ASCHENBRENNER, DI 19
Idaho Power Company
1
2
3
4
5
6
1
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9
A. There were \6 stakehol-ders who attended the
meetj-ng, including several parties from IPC-E-72-21
(Commission Staff, Idaho Conservation League, Idaho Clean
Energy Association, and the Snake River Alliance).
o.
participants
A.
Did the Company solicit
at the meeting?
Yes. At the conclusion
all of the stakeholders in attendance
on potential- areas of agreement and to
feedback from
of my remarks, I asked
to provide feedback
express ideas for
future meetings to
compensation
DER
10 how the Company could best facilitate
11 discuss alternate rate design and
customers withL2 methodologles for
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24
O. Generally, what did you hear from participants
at the meeting?
A. Partj-cipants at the meeting expressed a desire
to quantify the potential benefj-ts that on-site, customer-
owned generation systems provide to the Company prior to
discussing whether establishing new customer classes is
approprlate. Some parties expressed concern that because
other inequities exist within the residential customer
c1ass, the Company should not address rate design
associated with customers who have on-site generatj-on.
There was also discusslon regarding what a comprehensive
val-ue of DER proceeding cou1d invol-ve.
ASCHENBRENNER, DI 20
Idaho Power Company
25
1 Q. Did the Company solicit feedback from solar
2 installers prior to making this filing?
3 A. Yes. The Company held a meetj-ng with solar
4 instal-Iers on June 30, 2011. The Company invited (via
5 email-) all install-ers who are known to be doj-ng business in
6 the Company's service arear dS wel-I as the Commission
7 Staff , to participate in the di-scussj-on.
8 Q. What were the objectives of the meeting?
9 A. The Company's objectives were to (1) update
10 participants on activity since the l-ast customer meeting
11 held in July 20L6, (2) inform stakeholders of a filing the
L2 Company was considering, (3) discuss the Company's deslre
13 to pursue a smart i-nverter requirement, and 4) invite
L4 feedback from installers on what, Lf dny, changes to
15 Schedule 72 they perceived necessary.
!6 O. What was the format of the meeting?
11 A. The Company held a 9O-minute meeting at its
18 Corporate Headquarters. There was no formal presentation,
19 but as a representative of the Company, I provided a
20 summary of the July 2016 meeting and also discussed the
27 Company's decision to not pursue pricing changes for R&SGS
22 net metering outside of a future rate proceeding. I
23 discussed the Company's desire to continue to work with
24 stakeholders both throughout this proceeding and in advance
25 of a future rate case to determine areas of alignment
ASCHENBRENNER, DI 27
Idaho Power Company
1 regarding rate deslgn and compensation methodologies for
2 R&SGS customers who install DER. I also discussed the
3 Company's planned filing and why the Company feels that
4 establishing customer cl-asses in advance of a general rate
5 proceeding is necessary.
6 Company witness Dave Ange11 then led a discussion
7 focused on the current interconnection requirements in
8 Schedul-e 72, including a discussion specifically regardj-ng
9 inverters and the Company's desire to require smart
10 inverter functionality at a future time when the industry
11 establishes a standard for what constitutes a smart
L2 inverter.
o.
A.
meeting.
o.
install-ers
A.
13
t4 There were L9 installers who attended the
L1 at
1B
L9 install-ers for feedback specifically related to smart
20 inverters and also invited the installers to di-scuss any
comply2L sections of Schedule 12 that they find difficult to
22 with.
23 a What type of feedback did the Company receive
24 from installers?
ASCHENBRENNER, DI 22
Idaho Power Company
15
16
How many installers attended the meeting?
Did the Company sollcit feedback from
the meeting?
Yes. After Mr. Angell's remarks, he asked the
25
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A. The installers asked several clarifying
questions around the Company's plans to ask the Commission
to establish separate customer classes, and some expressed
a desire to participate in future conversations with the
Company to determine the beneflts and costs of on-sj-te
generatlon systems. Those present al-so asked clarifying
questions around the benefits of smart inverters.
O. Did the Company specifically ask if the
installers present had concerns about the possibility of
the Company requiring smart inverters in the future?
A. Yes. Mr. Angell asked participants, based on
the discussion in the meeti-ng, if they would have concerns
if the Company were to seek the inclusion of a smart
inverter requirement at the time when an industry standard
was adopted. The installers present indicated that
professionally installed systems already utilize inverters
that have "smart functj-onality" and did not express any
concerns around the Company's plan to require smart
inverters at a future date; however, those who commented
suggested the Company shoul-d clearly communicate or offer a
list of inverters that meet the requirements and a process
to configure them at the point when those inverters are
mandated.
ASCHENBRENNER, DI 23
Idaho Power Company
1
2
3
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5
6
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o.
heard during
this filing?
A.
the Company simply planned
new classes and propose a
described more fully in Mr
Company's decisj-on to ask
docket where parties from
Did the Company incorporate the feedback it
June from stakeholders and instal-Iers into
Yes. At the time of the meetings I descrlbed,
to request the establishment of
smart inverter requirement. As
. Tatum's testimooy, the
the Commission to open a generic
across the state could
10 participate in a discussion about identifying/quantifying
the benefits and costs of on-site generation was the direct
result of what the Company heard from interested
stakeholders and installers during those meetings.
O. Does the Company intend to participate in
future workshops/meetings with stakeholders and interested
parties?
A. Yes. As described by Mr. Tatum, following the
conclusion of this case, the Company anticipates
participating in a Commission-Ied generic docket where
parties will evaluate the benefits and costs of on-site
generation.
IV. ESTABLTSHUENT OF SEPARATE CUSTOMER CI,ASSES
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V . why
classes
is the Company requesting to establish
for the R&SGS net meterj-ng customerseparate
segments?
ASCHENBRENNER, DI 24
Idaho Power Company
25
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A. It is a long-standing ratemaking practice to
establish separate customer classes to set rates for
segments
where the
of customers with dlfferent costs of service or
from their current
Ioad is distinctly different
classification.
. Washington Water Powerl3
electricity used, differences
the time, nature and pattern
Supreme Court has set for the
whether there is a reasonable
nature or type of
customer
On page
described class
in ldaho State HomebuiLders v
"cost of service, quantity of
I of Order No. 26'780, the Commission
differentiating characteristics identified
13 justification for setting different rates and charges for
L4 different classes of customers. "
15 O. What characteristics differentiate the R&SGS
t6 net metering customers from standard R&SGS customers such
77 that a reasonable justification exists for setting
18 different rates and charges?
10 in conditions of servj-ce, ox
11 of use" as "guidelines the
12 Commi-ssion to use to evaluate
t-9 A.
net metering
customers.
20
22 testimony, the time, nature,
differs because the standard
2t
The nature and pattern of energy use by R&SGS
customers i-s different than the standard R&SGS
As described more fu11y in Mr. Ange11's
and pattern of energy use
service R&SGS customer segment
\3 ldaho State Homebuifders v. Washington Water Power, 107 ldaho
415, 420, 690 P.2d 350, 355 (1984).
ASCHENBRENNER, D] 25
Idaho Power Company
23
1 only consumes energy from the grid, while the R&SGS net
2 metering customer segment both consumes energy from the
3 grid and delivers excess net energy to the grid when not
4 consumi-ng all generation on-sj-te. That is, the standard
5 service customer has a one-way relatj-onship with the grid
6 while the net metering customer has a two-way relationship.
7 This two-way flow of energy is unique and fundamentally
I different than a non-net metering customer. Further, while
9 the daily demand requirements of the two customers may be
10 similar, net metering customer's net monthly energy as a
11 basis for billing does not reflect thej-r util-izatj-on of the
L2 grid.
13 O. Do the R&SGS customers with on-site generation
74 differ from one another such that it makes sense to create
15 a separate customer class for the residential on-site
76 generatj-on and smal-l- general on-site generation rather than
77 creating a single new customer class for these on-sj-te
18 generation customers?
79 A. Yes. R&SGS customers who take standard
20 service from Idaho Power are set apart in separate customer
27 classes not because of the amount of energy they use but
22 because the nature of energy use is different from one
23 another. The nature of energy use by residential customers
24 is for general domestic uses, such as occupying or living
25 in a space. The nature of energy use by a commercial
ASCHENBRENNER, DI 26
Idaho Power Company
1
2
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customer is generally for business, professionalr or other
gainful purposes.
O. If R&SGS customers with on-site generation are
distlnctly different from each other, why has the Company's
anal-ysj-s focused primarily on the residential net metering
customers?
A. The Company's analysis focused on the
residential net metering customers because most of the
recent growth in the net metering service is in the
residential- cl-ass; however, because the residential and the
smal1 general servj-ce customer classes both have a two-part
rate design with most of the customer-related fixed costs
and al-I of the demand-related fixed costs being recovered
through a volumetric charge, both customer cl-asses have the
potential to create a cost shift.
O. How is the residential net meterj-ng customers'
impact on the grid different than that of the residential
standard service customers?
A. The load shapes in Eigure 3 il-lustrate the
demand placed on the grid by the Company's residential- net
metering customer segment and the Company's residential
standard service customer cl-ass on the 2076 adjusted peak
ASCHENBRENNER, DI 21
Idaho Power Company
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24
25
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2
3
4
daY. tn
time
SpecificalIy, note the distinct difference in the
and pattern of use between the two.
Figure 3: Averag'e Load Shapes for Residential.Standard
CustomersService Customers and Residentia]. Net lfeter
The first notj-ceable difference is the distinct dip
in load during midday for the resldential net meteri-ng
customer segment caused by increasing production by on-site
generation, whlch reduces their reliance on Company-
provj-ded energy. The second noticeable difference is the
steep ramp-up of demand for Idaho Power-owned generation
following the midday dip for the residential net meteri-ng
customer segment caused by decreasing production from on-
site generation combined with increasj-ng loads. On the
other hand, the resj-dential standard service load shape
1a The adjusted system peak day represents the hour at which the
system would have peaked had the Company not dispatched its demand
response programs. This methodology is consistent with the filed cLass
cost-of-service study from the Company's l-ast general- rate case (IPC-E-
11-08 ) .
ASCHENBRENNER, DI 28
Idaho Power Company
5
6
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10
11
72
13
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L 2 3 4 5 5 7 I 9 1011L2L314L5t617 18192021222324
Hour Ending
-Residential
Net Metering
-Residential
Standard Service
3.OO
2.00
1.OO
0.00
-2.m
4.OO
3J
1.m
1
2
3
4
5
6
1
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9
maintains a steady demand profile with less variation from
hour to hour.
O. Is a net metering customer's usage sj-miIar to
a standard servi-ce residential customer who has l-ittl-e
monthly kilowatt-hour (*kwh") usage?
A. No. Eigure 4 shows a compari-son of the load
shapes among different residential energy usage l-evels to
the load shapes of the entire residential customer class
and the residential net meterl-ng segment on the 2016
adjusted peak day. Eigure 4 illustrates that while the
time, nature, and pattern of use of all residential
customers are consistent between different energy usage
l-evels, they are distinctly different than the time,
nature, and pattern of use of the net metering customer
segment. Another important difference is that the sum of
the hourly usage over the billing month accurately reflects
the utilization of the grid by the customer with little
monthly kWh usage whereas the net monthly energy as a basj-s
for billing may not reflect the utilization of the grid by
the net metering customer.
ASCHENBRENNER, DI 29
Idaho Power Company
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1 Figrure 4: Average Load Shapes
2 Customers and Standard Service
for Residential Net l[etering
U Leve].s
Is the service taken by a residential- standard
3
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7
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9
0
service customer's
month, comparable
whose usage nets
vacation home, with no kWh usage in a
to a residential net metering customer
to zero?
the potential for similar net
the similarity ends there. The
No. Whj-Ie the residential net metering
customer and a residential standard service customer with a
10 vacant vacation home have
A
11
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usaqe
way in
on a monthly basis,
which these two types of customers utilize the
13
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electrical system on a daily or hourly basj-s differs
dramatically. When a vacation home has zero energy
consumption over a month, it is because the customer did
not take any energy during the month, and therefore, did
not utilize the Company's grid during that month. On the
other hand, when a net metering customer's meter reading
ASCHENBRENNER, DI 30
Idaho Power Company
1m%
75%
Se/o
25%
o%
-25%
-5o,6
7 2 3 4 5 6 7 I 9 1011t21314 15151718192021222324
Hour Endlng
-- 0_7@ -- 7Ol-t,25O 1,251_2,150
- - 2,151 +
-Residential
Net MeterinS
18
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2
3
4
5
6
7
8
9
indicates that they have "net zero" consumption for the
month, this is likely because the net metering customer has
generated either the same amount or more energy from their
system than they consumed over the course of the month.
However, the net meterlng customer used Idaho Power's grid
during the hours they were consuming energy and during the
hours they were exporting net excess energy to the grid.
Once again, another important difference is that the
sum of the hourly usage over the billing month accurately
reflects the utilization of the grid by the vacation home
owner, whereas the net monthly energy as a basis for
billing may not reflect the util-ization of the grid by the
net metering customer.
O. How are net metering customers different than
customers who reduce their energy requi-rements by
install-ing energy efficiency measures?
A. A customer with on-site generation and a
10
11
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20
customer
similar
they are
installs
rel-iance
biIled
are both able to reduce the amount
a customer who
2l
who installs an energy efficiency measure are
in that they
for
an energy
energy; however,
efficiency measure r_s reduci-ng thelr
in every hour(and lowering the cost to serve)
23 that measure is called upon.
always
That is, the energy
24
22
efficiency measure
On-site generation
IS delivering energy reduction.
only reduces the demand for grid energy
ASCHENBRENNER, DI 31
Idaho Power Company
25
I in the hours when the system is generating. When the
2 system is not generating, the grid is re1ied upon to serve
3 the full- demand.
4 Lastly, the sum of the hourly usage over the billing
5 month accurately reflects the utilization of the grid by
6 the customer who instal-l-s energy efficiency, whereas the
7 net monthly energy as a basis for billing may not reflect
8 the utilization of the grid by the net metering customer.
9 Q. Why doesn't the net monthly energy reflect the
10 utilization of the grid for a customer with on-site
11 generation?
t2 A. Most R&SGS customers with on-site generation
13 both consume energy from the grj-d and del-iver excess net
74 energy to the grid when not consuming all generation on-
15 site. When a customer with on-site generation produces
76 either the same amount or more energy from their system
11 than they utilize over the course of the month, the
18 customer's use will- net to zero; this is commonly referred
19 to as a "net zero" customer. However, during certain hours
20 of the month, the net zero customer is a net exporter of
2L energy to the grid, and during other hours of the month,
22 the customer j-s a net consumer of energy from the grid.
23 The net zero customer utilizes aII aspects of Idaho Power's
24 grid during the hours they are consuming energy (including
25 the generation, transmission, and distribution systems) but
ASCHBNBRENNER, DI 32
Idaho Power Company
1
2
3
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8
9
then also util-izes the distribution system during the hours
they are
o
standard
exporting energy to the grid.
servj-ce customers appropriate for customers with
on-site generation?
A. The residentj-al customers taking service under
Schedule 7, Residentj-a1 Service, have a two-part rate
design with most of the customer-related fixed costs and
all the demand related fixed costs being recovered through
vol-umetric charges. The revenue requirement for the
residential- customer class is comprised of approximately 10
percent fixed costs and 30 percent variable energy costs;
however, only five percent of the total revenue is
collected through the fixed service charge and the
remaining 95 percent is collected through the volumetric
energy charge. As explai-ned in Mr. Angell's testimony,
while the daily demand requirements of the two customers
may be simil-ar, net metering customers' net monthly energy
as a basis for billing fails to coll-ect the approprj-ate
amount of costs and does not reflect their utilization of
the grid.
O. Can you provide an example illustrating how
the current rate design fails to collect the appropriate
amount of costs from a net zero customer?
ASCHENBRENNER, DI 33
Idaho Power Company
Why isn't the current rate structure for the
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1 A. Yes. When a net metering customer exports
2 excess net energy to the grid, their retail- meter "spins
3 backwardsr " or in the case of a modern meter, subtracts
4 usage electronically. Later during other hours of the day
5 or month when the customer is consuming energy from the
6 grid, the meter "spins forwardr " or adds usage
7 electronically. So, on a monthly basis, the net metering
I customer is using the grid, every hour, every day, but
9 because usage is measured for billing purposes on a monthly
10 basis, that net metering customer appears to have "zero
11 usage" for the month.
72 Table 3 shows the annual 2016 base rate revenue
13 received from a net zero customer and the base rate revenue
\4 received from a standard service customer who lives nearby.
15 As shown in Mr. Angell's testimony, the net zero customer
L6 util-izes the grid as much (albeit bi-directionally), as a
Ll nearby standard servj-ce customer whose annual energy
18 requirements are close to Idaho Power's average residentj-al
79 customer; however, that customer wil-I not be
20
usage per
billed for any
2L costs in excess
kwh charges (and will- avoid paying for fixed
of $5 per month) so long as the sum of the
22 hours with excess generation exported to the grid is
23 qreater than the sum of the hours when the customer was
24 consuming
201-6 i the
from the grid. The
neighbor of the net
net zero customer paid $60 in
zero customer, who consumed
ASCHENBRENNER, DI 34
Idaho Power Company
25
1
2
3
4
all their energy needs from the grid, paid base rates of
$1,225 .
Table 3: Annual. Uti1ity BilJ. Comparison (net zero customer
and residential customer)
While these two customers may look simil-ar from a
5
6
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9
grid utilization standpoint,
only appropriately col-lects
customer who uses the system
the current pricing structure
costs from the standard service
in one direction.
customer representative of a1l-10 o.
the Company's
A.
Is the net zero
11 R&SGS net metering customers?
No. However, the net zero customer most
lllustrates the issue of applying the standard
rate design to a segment
all of15 ability to reduce some or their usage, when measured
t2
13 clearly
service74
1,6 on a net monthly basis. As
t1 continues to decl-i-ne and if
18 policy remains
a price signal
Idaho Power's
in hours when
generating, as
19
20
23
the cost to install- sol-ar PV
a retail rate net metering
in pIace, customers will continue to receive
that is not reflective of having access to
grid for both the supply of energy and demand
a customer's on-site system is not
well as
of customers who have the
access to the grid for the export of
is not consumed on-site. In a
27
22
thatexcess net energy
recent letter to the editor (attached as Exhibit No. 11 to
ASCHENBRENNER, DI 35
Idaho Power Company
Net Zero
Residential
Nearby
Residentia].
Service Charge
kWh Charges
$60
0
$60
1, 155
Tota].sL,225$60
24
1 my testimony), one Idaho Power customer remarked of
2 installing a solar PV system last sunrmer: "now my monthly
3 electric bill is only $5.27 ."
4 Q. Other intra-cl-ass subsidies exist within the
5 residential class. Why is the Company only proposing to
6 create separate customer classes for R&SGS customer with
7 on-site generation?
I A. As discussed in Mr. Tatum's testimony, other
9 intra-class subsidies do exist and continue to exist absent
10 fulIy unbundled cost-based rates; however, the distinct
11 differences between the time, nature, and pattern of use by
72 standard service customers and R&SGS customers with on-site
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generation is what
customer classes.
groups segments of
differentiation by
is driving the need for separate
As explained previously, the Company
customers together into classes based on
cost-to-serve and how and when
customers
they use
with on-the system. The unique way that R&SGS
site generation interact with and use
that creating R&SGS on-site generatlon
is appropriate and can
accurately reflect the
segments of customers.
the grid demonstrates
classes of their own
enable more effectj-ve rate design to
costs incurred to serve those
ASCHENBRENNER, D] 36
Idaho Power Company
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9
V. PROPOSED TARIEF CH.AIIGES
O.In the Company's proposal, under which tariff
schedule wiII
customers take
the existing and
service?
pending net metering
10
A.Bxisting net meterj-ng customers and those
pending customers who have submitted a complete net
metering System Verification Form el-ectronically or post-
marked on or before December 31, 2077, will continue to
take service under Schedule 84.
O. What constitutes a complete System
Verification Form?
A. Pursuant to the interconnection requirements
contained within Schedul-e 72, once a customer has completed
the installation of the system, they must provide the
Company
state,
the documentation verifying that aI1 federal,
and local requirements have been met; the customer
must then submit a net metering System Verification Form to
take service under Schedule 84.
O. Who wil-I take service under the proposed new
Schedules 6 and 8?
A. New R&SGS customers, who request to
interconnect an on-site generation system (evj-denced by the
completion of the state el-ectrical- inspection and
submission of the net metering system verification form)
after the effective date of the proposed new Schedules 6
ASCHENBRENNER, DI 31
Idaho Power Company
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2
3
4
5
6
7
8
9
and 8, January 1
or 8. Schedule
20t8, will take service under Schedules 6
6 and Schedule 8 are included as
Attachments
o.
of January 1
A.
2and3
Why is
, 20L8?
fn
to the Application.
10
the Company proposing an effective date
of applications
the Company's experience, over 95 percent
received for net metering service submit
the System Verlfication Eorm wj-thin five months (the
proposed schedule of this case). Further, it is the
Company's experlence that customers desire to have their
system instal-Ied prior to year-end to be elj-gible for the
income tax credit in a given tax year.
O. Is the Company proposing any changes to the
rate structure or compensation method in Schedule 84?
A. No. The Company is not proposing any changes
to the rate structure or compensation method in Schedule
84-
O. Will customers who take servj-ce under
Schedules 5 or 8 have different rates or a different
compensation method than Schedule 84, the Company's current
net metering schedule?
A. Not at this time. The rate structures
proposed in Schedules 6 and 8 wiII continue to mj-rror the
rates in Schedules 1 and J, respectively, until the
Commission approves changes to the rate design or the
ASCHENBRENNER, DI 38
Idaho Power Company
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compensation method for these customer segments in a future
rate proceeding.
O. Is the Company proposing any changes to
Schedul-es 6 and 8 that differ from Schedule 84?
A. Yes. Because the prices for the Schedule 6
and 8 services will be contained within the newly proposed
schedules, the Company is proposj-ng to include language in
those schedules to j-nform customers that prices contained
in the schedule today are subject to change and they will-
be subject to any future changes to rate design and/or
compensation methodologl-es subsequently approved by the
Commj-ssion. While aIl tariff schedul-es are inherently
subject to change, the addition of this language is
intended to continue the Company's efforts of increasing
customer communication concerning the potential for prj-cing
changes that exist under its tariff.
O. If the Commission approves Schedules 6 and 8,
wil-l- the Fixed Cost Adjustment ("FCA") apply to those new
L9 schedul-es ?
20
10
11
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13
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A. Yes. Because
rate design as part of this
that the approved FCA rates
changes proposed to
it is appropriate
there are no
proceeding,
wil-l- continue
23 customers in the
to apply to
schedul-es. The
to how and to24 Company envisions
25 what extent the FCA should apply going forward to Schedules
ASCHENBRENNER, DI 39
Idaho Power Company
newly established R&SGS
proposing modifications
7 6 and 8 at the time rate design is addressed for these
2
3
4
5
6
1
I
9
customer classes.
Schedule 84?
A.The Company
to new service for R&SGS
What changes does the Company propose too
is proposing to close Schedule 84
customers as of the effective date
of the proposed new Schedules 6 and 8
Schedule 84 is included as Attachment 1
The proposed
to the Application.
O What changes does the Company propose to
11
12
10 Schedule 72?
A The Company is revising Schedule 12 to
13
incorporate the defined terms necessary to sync the
j-nterconnection requirements between Schedule 72 and the
newly proposed Schedules 6 and 8.
The Company j-s also proposing to make one minor
revision to Schedul-e 12 to allow the Company additional
time to complete the on-site inspection of a newly
installed on-site generation system when circumstances
beyond the Company's control arise, making the onsite
j-nspection impracticable or impossible wj-thin the 10-
business day requirement. Whil-e this is not a like1y
occurrence, there are factors outside of the Company's
control that would prevent it from meeting this tariffed
requirement, as it currently exists. For example, during
the 2016-20L1 winter, the Company encountered difficulty
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ASCHENBRENNER, DI 40
Idaho Power Company
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performing j-nspections due to heavy snow faII that
prevented solar PV systems from powering up for the
inspection.
a. Are any other tariff rules or schedules
impacted by the creation of new Schedules 6 and 8?
A. Yes. The following rules and schedul-es are
effected by the creation of new Schedules 6 and 8: Rule H
10
(H-1, H-11),
Schedule 55
Schedule 63
Schedul-e 81
RuIe I (I-1, I-2),
(55-1, 55-2, 55-3),
(63-1, 63-2, 63-4) ,
(8!-2), Schedule 9l
Schedule
Schedule
Schedule
(e1-1),
rules and
54 (54-I,
6L (61-1),
66 (66-3,
Schedule 98
schedules
54-2) ,
66-4) ,
(98-1),
are
11
72 and the Schedule Index. These
13 incl-uded in this filing as Attachment 4 to the Application
L4 in legislative format.
15 VI. COMMUNICATION REGARDING THE FILING
t6 O. What efforts has the Company made to current
and pending net metering customers to i-nform them of this
filing?
A. The Company mailed two separate letters today,
July 27, 2071, to active and pending net metering
customers.
Attached as Exhibit No. t2 is the l-etter that was
maj-l-ed to existing R&SGS customers taking service under
Schedule 84 as of the date of this filing. The purpose of
that letter was to inform existing net metering customers
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ASCHENBRENNER, DI 4L
Idaho Power Company
2L
23
24
25
1 of the filing and how they would be impacted; that is, the
2 Company proposes to leave the exlsting net metering
3 customers on Schedule 84 for the time being. The Company
4 al-so provided information as to how those customers coul-d
5 submit a comment for the Commi-ssion's consideration.
6 The Company also mail-ed a letter (attached as
7 Exhibit No. 13) to those R&SGS customers who have signaled
8 their intent to install an on-site system under Schedule 84
9 by the submissj-on of a net metering application received
10 prior to thls filing. The purpose of that letter was to
11 inform pending net metering customers of the filing and how
72 they would be impacted; that is, the Company's proposal
13 envisions that customers who submit an el-ectronj-c or post-
14 marked System Verification Eorm on or before December 3L,
15 20L1, wiII take service under Schedule 84; those customers
1,6 who submit an electronic or post-marked system verj-fication
L7 form on or after January 1, 201,8, would take servj-ce under
18 the successor schedule to Schedul-e 84. The Company also
19 provl-ded informatj-on as to how those customers could submit
20 a comment for the Commission's consideration.
27 The Company also intends to mail this letter to
22 R&SGS customers who submit a net metering application after
23 the date of the filing, but prior to receipt of a
24 Commission order.
25
ASCHENBRENNER, DI 42
Idaho Power Company
1 Q. Does the Company envisj-on sending additional-
2 communication to its pending net metering customers while
3 this case is processed?
4 A. Yes. The Company al-so plans to send reminder
5 letters, via direct mai1, to customers who have submitted
6 an application, but who have yet to submit a System
7 Verification Eorm, regarding how they may be impacted by
I the Company's proposed filing. The Company expects to send
9 these letters while the case is being processed.
10 O. Does this conclude your testimony?
11 A. Yes.
L2
13
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L7
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ASCHENBRENNER, DI 43
Idaho Power Company
I
2
3
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8
9
ATTESTATION OF TESTIMONY
STATE OF IDAHO
SS.
County of Ada
Tt Connie Aschenbrenner, havlng been duly sworn to
testify truthfully, and based upon my personal knowledge,
state the following:
I am employed by Idaho Power Company as the Rate
Design Manager in the Regulatory Affairs Department and am
competent to be a witness in this proceedj-ng.
I declare under penalty of perjury of the laws of
the state of Idaho that the foregoing pre-filed testimony
and exhj-bits are true and correct to the best of my
information and belief.
DATED this 27th day of July 2071.
Ultu4
nnie Aschenbrenner
SUBSCRIBED AND SWORN to before me this 27th day of
July 201,7 .
LY T.6
No v Public
F Residing at S
My commission expi-res :L2/20/2020
ASCHENBRENNER, DI 44
Idaho Power Company
10
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L7
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2B
29
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31
r Idaho
e Idaho$oT4.?r
e(re lrc
-a-
.l
OF ID
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-17-13
IDAHO POWER COMPANY
ASCHENBRENNER, DI
TESTIMONY
EXHIBIT NO.9
ldaho Power Company
Annual Net Metering Status Report
April28,2017
ldaho Power Company ("ldaho Powe/' or "Company") presents its Annual Net Metering
Status Report to the ldaho Public Utilities Commission ("Commission") as required by Order Nos.
32846 and 32925 in Case No. IPC-E-12-27.1 The report begins with a status update as to current
participation levels and growth rates and provides an overview of the customer and stakeholder
workshop held in July 2016. The Company also updates its quantification of cunent cost shift, its
growth forecast for its net metering customer count, and discusses how residential net metering
customers' use of the system and load profile suggest that it is appropriate to segment these
customers into a class of their own. The report discusses system reliability and modern
technological considerations, and concludes with an update on accumulated net excess energy
credits and 2016 meter aggregation activity.
I. EXISTING NET METERING SERVICE
Gurrent Participation and Growth Rates
As of December 31,2016, ldaho Power's net metering service consisted of 1,067 active
systems with a cumulative nameplate capacity of 8.23 megawatts ("MW'). During calendar year
2016, participation in net metering service increased by 336 active systems (a 46 percent increase
from the end of 2015) with incremental nameplate capacity totaling 2.92 l{lN. The additional
systems were entirely comprised of new solar photovoltaic ("PV') installations.
During the first quarter of 2017, growth continued with the Company adding 86 new active
systems with aggregate nameplate capacity of 0.65 MW and 158 pending applications for a
combined total of an additional 1.66 MW of nameplate apacity.z At the end of the first quarter of
I On page 19 of Order No. 32846, the Commission directed ldaho Power to "file an annual status
report with the Commission discussing the net metering service. The report shall discuss, without
limitation, the net metering service provisions and pricing and how distributed generation may be
impacting system reliability."
2 At the end of the first quarter of 2016, the Company had 77 pending applications. ldaho
Power's experience has been that once an application for a net metering system is submitted, that
system will come online within the next year.
Exhibit No. 9
Case No. IPC-E-I7-'13
C. Aschenbrenner, IPC
Page 1 of 18
2017, ldaho Power had 1,311 active and pending systems, which represents a 51 percent growth
rate since the same time last year.
Tables 1 and 2 provide the total number of active and pending net metering systems and
nameplate capacity by resource $pe, jurisdiction, and customer class.
Table 1: Number of Net Metering Systems3 - Pending and Active as of March 31, 20',7
ldaho Solar PV Wind Hvdro/Other Total
Residential 1,074 56 7 1.137
Commercial & lndustrial 125 6 4 135
lrriqation 4 1 5
Totalldaho 1,203 63 11 1,277
Oregon
Residential 16 ,|17
Commercial & lndustrial I 8
lrriqation 9 9
TotalOregon 33 1 34
Total Company
Residential 1090 57 7 1,154
Commercial & lndustrial 133 6 4 143
lrrigation 13 1 14
TotalGompany 1,236 64 11 1,311
Table 2: Nameplate Capacity (MtlV) - Pending and Active as of March31,2017
Idaho Solar PV Wind Hvdro/Other Tota
Residential 6.49 0.29 0.07 6.8s
Commercial & lndustrial 2.34 0.04 0.09 2.47
lrrigation 0.22 0.04 0.26
Total ldaho 9.05 0.37 0.16 9.58
Oreqon
Residential 0.11 0.11
Commercial & lndustrial 0.15 0.15
lrrigation 0.68 0.68
TotalOregon 0.94 0 0 0.94
Total Companv
Residential 6.60 0.29 0.07 6.96
Commercial & lndustrial 2.49 0.04 0.09 2.63
lniqation 0.90 0.04 0.94
Total Company 9.99 0.37 0.r6 10.53
3 The Company's net metering database reports a new application as a "system." Some customers
have increased capacity of an existing system or have installed a second system that is a different resource
type; an expansion or additional system would be counted in Tables 1 and 2 as a separate system. This
allows the Company to report capacity in the year in which it came online. Because an expansion of an
existing system requires the filing of a new application, it is treated separately for tracking purposes.
Exhibit No. 9
Case No. IPC-E-17-'13
C. Aschenbrenner, IPC
Page 2 of 18
Chart 1 details the increasing cumulative net metering system counts by customer class
and net metering nameplate capacity growth from 2001 through the first quarter of 2017
(including pending applications).
Chart 1: Gumulative Net Metering System Gounts and Capacity (by Customer Type)
Residential PV systems continue to make up the majority of groMh in the Company's
net metering service. Since the beginning of 2013, a total of 827 new active residential systems
have been installed and only two of those were generation types other than PV. The continued
expansion of the Company's net metering service demonstrates how the Company's grid
continues to evolve, and underscores the need to evaluate the associated service provisions
and pricing to ensure that ldaho Power can continue to offer safe, reliable, fair-priced electrical
service now and in the future.
II. UPDATE ON 2016 CUSTOMER AND STAKEHOLDER WORKSHOP
ln the 2016 annual net metering status report ("2016 Report") filed with the Commission
on April 29, 2016, the Company indicated that it would be holding a customer and stakeholder
workshop in the summer of 2016 to discuss a potential filing the Company was considering.
After filing the 2016 Report, the Company notified existing net metering customers and those
customers who had applied for net metering service that the 2016 Report was available and that
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 3 of 18
1,4(X)
\2(n
1,(Xlo
800
600
400
200
0
L2
10
8
6
4
2
0
2001 2003 2005 2007 2009 20LL 2013 2015 20L7
(1A)
-
Residential I Commercial & lndustrial r lrrigation
-Capacity
==
l!
CLo(J
EtoIJ
EIt,
tA
the Company would be holding a workshop to discuss the 2016 Report and a potentialfiling the
Company was considering. ln addition to reaching out to customers, ldaho Power also invited
intervenors from Case No. IPC-E-12-27, as well as solar PV installers known to the Company.
The workshop was held at ldaho Power's corporate headquarters building in Boise,
ldaho on July 27,2016, and was attended by more than 140 current and potential net metering
customers and stakeholders.a The objectives of the workshop were to: (1) share the results of
the cost shifting analysis presented to the Commission in the 2016 Report, (2) raise awareness
amongst the Company's residential and small general service net metering customers about the
issue of cost shifting and that the Company was considering making a filing that may seek to
modify rate design, and most importantly (3) solicit input, feedback, and concerns from
customers and stakeholders.
At the workshop, the Company presented participants with an overview of how ldaho
Power quantifies the costs associated with providing service (revenue requirement), a brief
explanation of how ldaho Power then assigns those costs to the various customer classes
(class cost-of-service study process), as well as an explanation of how existing residential rates
are established to collect those costs (rate design). The Company also presented the cost shift
findings published in the 2016 Report.
A Company representative then discussed a potential "straw-man" for net metering
residential rate design and the Company's evaluation of a filing that would include: (1)
recognizing how net metering customers use the system differently by segmenting residential
and small general service net metering customers into their own respective classes, and (2)
addressing the cost shift caused by the existing residential rate design by establishing a rate
that would collect more fixed costs through a higher fixed service charge from those classes.
The Company also explained to participants that it was considering different options that could
be proposed to mitigate the impact of the potentialfiling to existing net metering customers.
4 124 participants attended in person and 18 attended the workshop remotely via WebEx.
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 4 of 18
At that point in the workshop, the Company asked participants for feedback regarding:
(1) how ldaho Power should most fairly collect grid-related (fixed) costs from net metering
customers, and (2) if ldaho Power were to suggest pricing changes, what options should be
proposed to best mitigate the impact to existing customers. The Company received feedback
from approximately 30 participants at the workshop and received six comments via an online
comment submission form created exclusively for workshop participants to provide feedback to
the Company. Generally, customers indicated that they were concerned with potential changes
to rate design for net metering customers and emphasized that there are other factors the
Company should consider, such as the benefits of solar to the grid, before making changes to
pricing for net metering customers.
The feedback the Company received at the workshop and in the weeks following the
workshop has been beneficial in evaluating what changes the Company might propose with
regards to the net metering service. The Company continues to believe modifying the net
metering service provisions and pricing is essential to ensure that ldaho Power can continue to
offer reliable and fair-priced electric service now and in the future for all of its customers -
including those who wish to install on-site generation.
III. COST SHIFTING
As discussed in Case No. IPC-E-12-27 and in annual net metering status reports to the
Commission, the cunent practice of applying standard retail rates to net metering service
creates the potential for inappropriate cost shifting between net metering customers and
standard service customers. The potential for cost shifting is especially large within the
Company's residential and small general service classes because a higher percentage of fixed
costs are collected through a volumetric energy rate from these customers as compared to
other customer classes. ldaho Power's residential and small general service customers are
cunently billed through a two-part rate design consisting of a $5.00 monthly service charge with
volumetric energy rates collecting the rest.
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 5 of 18
ln November 2016, the National Association of Regulated Utili$ Commissioner's
('NARUC') Staff Subcommittee on Rate Design issued lhe Distributed Energy Resources Rafe
Design and Compensation manual ('NARUC Manual") and acknowledged that "traditional utility
and regulatory models built on the assumption of the utility providing enough electricity to meet
the entire needs of its service territory are under pressure" by the installation of distributed
generation.s The NARUC Manual also acknowledged the presence of cost shifting caused by
traditional net metering stating that in the case of distributed energy resources, "often the billing
determinants are lowered to mitigate the pressure on revenue collection effected by lower sales.
Thus, the decline in usage would effectively be shifted to other customers when the billing
determinants are reset to account for the decreased revenue received" from distributed energy
resource customers.6
Update on Quantification of Current Cost Shift
ln the 2016 Report, ldaho Power stated that there was an estimated cost shift of
approximately $55,712 per year from residential net metering to residential standard service
customers occuning as of calendar year 20l5. This represented l2 percent of the total revenue
requirement for the 366 residential net metering customers who had a full 12 months of billing
data during 2015. Using that same methodology, the Company updated its analysis to quantify
the amount of cost shifting that occurred in 2016 from the 566 residential net metering
customers who had a full 12 months of billing data during 2016. The results of the updated
quantification of cost shift were that those 566 customers represent a $116,682 (18 percent of
the total $665,969 revenue requirement) cost shift.
IV. FUTURE POTENTIAL ADOPTION RATES
The residential customer segment continues to see tremendous growth in the adoption
of net metering. As described in the 2016 Report, the Company used historical growth trends to
inform the estimation of residential net metering customer counts through the scheduled 2021
5 NARUC Manual, p. 16.
6 ld. at67.
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 6 of 18
expiration of the federal investment tax credit ("lTC";.2 Three forecasted growth scenarios were
developed based on the distribution of year-over-year growth rates by month as experienced
over the past 18 months. The "Median" scenario represented the median of the growth rate
distribution, the "Lovr/'growth scenario was based on the 10m percentile of growth rates and the
"High" growth scenario was based on the 70th percentile of growth rate.
ln the 2016 Report, the Company reported forecasted 2016 year-end residential net
metering counts of the low, median, and high scenarios to range from 746 to 873 customers. At
the end of 2016,ldaho Power had 869 active customer agreements for residential net metering,
demonstrating that the Company's Median forecasted customer counts in the 2016 Report
understated the potential growth in the residential net metering service. Given the rapid
increase in the number of residential net metering installations, ldaho Power recalibrated its
residential net metering customer forecast model since filing the 2016 Report. The Company
updated the historical collection period through a more recent term ending January 2017, where
the previous forecast modelwas constructed using customer growth data ending March 2016.
Chart 2: Updated Forecast Growth in Residential Net Metering Customers
8,000
7,0(x)
6,000
5,0(x)
4000
3,(X)0
2,(X)0
1,(XlO
0
7,O32
o
=o
I
20L6 2017
-updated
Low
2018 20L9 2020
*Updated Median
-Updated
HiSh
202L
7 A taxpayer may claim a credit of 30 percent of qualified expenditures for a system that serves a
dwelling unit located in the United States that is owned and used as a residence by the taxpayer. The
Consolidated Appropriations Act, signed in December 2015, extended the expiration date for PV and
solar thermal technologies, and introduced a gradual step down in the credit value for these technologies.
The 30 percent ITC was extended through 2019 and is scheduled to reduce to 26 and 22 percentin2O2O
and 2021, respectively. After 2021, the residential credit will drop to zero while the commercial and utility
credit will drop to a permanent 10 percent.
Exhibit No. 9
Gase No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 7 of 18
Using these historical growth trends, the Company projects residential net metering
customer counts to be as high as 7,032 customers or as low as 6,171 customers, with the
median growth rate resulting in 6,816 net metering customers in 2021.
V. CHARACTERISTICS OF THE AVERAGE RESIDENTIAL NET METERING CUSTOMER
Chart 3 compares the average load profile calculated from the Company's residential
standard service customer class to the average load profile calculated from the Company's
residential net metering customer segment on the day of the 2016 adjusted peak.8 The chart
demonstrates that in addition to peaking two hours later, the Company's residential net metering
customers have a larger demand than the Company's average residential standard service
customers.
Chart 3: 2016 Adjusted System Peak Day (June 29,20161
4.00
3.00
2.00
3 1.ooJ
0.00
-1.00
-2.00
L 2 3 4 5 6 7 8 9 1011t213t4t5!617 18192027222324
Hour Ending
-Residential
Net Metering
-Residential
standard service
Generally, solar generation peaks in the early afternoon, before the residential customer
class peaks and before the residential net metering customer segment peaks; the peak
reduction in killowatts ('kW') provided by the PV system does not align with peak usage of the
residential net metering customers.
8 The adjusted system peak day represents the hour at which the system would have peaked had
the Company not dispatched its demand response programs. This methodology is consistent with the
filed class cost-of-service study from the Company's last general rate case (lPC-E-11-08).
Exhibit No. 9
Case No.|PC-E-17-13
C. Aschenbrenner, IPC
Page 8 of 18
Because of the cunent pricing structure, some customers may be incented to orient their
systems south-facing, such that they capture the most kilowatt-hours ("kWh") production over
the course of the day; this enables the customer to offset or "net off' the maximum amount of
energy over the course of a billing month. lf the customer had a pricing signal that incented
them to orient their system in a way that might better align with the Company's system peak
hours, when there is a higher demand for electricity, the net metering customer may contribute
to a reduction in the system peak. The prevalence of south-facing systems reflects a
misalignment between the retail rate net metering compensation method versus the potential
value the customer's generating system could provide to the grid.
VI. ESTABLISH SEPARATE CUSTOMER CLASSES FOR NET METERING CUSTOMERS
ldaho Power believes it is appropriate to establish a separate class for a segment of
customers who have different costs of service or where the nature or type of load is distinctly
different. This practice is generally accepted in the utility industry for the purpose of cost
analysis and rate-setting because each class is assumed to have different characteristics than
the other class. ln Order No. 26780, the Commission described class differentiating
characteristics identified in ldaho State Homebuilders v. Washington Water Powef - "cost of
service, quantity of electricity used, differences in conditions of service, or the time, nature and
pattern of use" as "guidelines the Supreme Court has set for the Commission to use to evaluate
whether there is a reasonable justification for setting different rates and charges for different
classes of customers."
Residential is distinguished from commercial use by the nature of energy use, not by the
amount of energy used. Similarly, the nature and pattern of energy used by residential and
small general service net metering customers is different than the standard residential and small
general service customers. The standard service residential customer segment only consumes
e The ldaho legislature authorizes the ldaho Public Utilities Commission in ldaho Code $$ 61-502
and -503 to determine just and reasonable rates, charges, classifications, rules, regulations, practices, or
contracts for utility service in ldaho. This authority is limited by the prohibition against discrimination and
preference in ldaho Code $ 61-31 5. The ldaho Supreme Court interpreted $ 61-31 5 to identifo factors that
lawfully differentiate between classes of customers in ldaho State Homebuilders v. Washington Water
Power,107 ldaho 415,420,690 P.2d 350, 355 (1984).
Exhibit No. 9
Case No.|PC-E-17-13
C. Aschenbrenner, IPC
Page 9 of 18
energy from the grid, while the residential net metering customers consume energy from the
grid and deliver excess net energy to the grid when not consuming all generation on-site. That
is, the standard service customer has a one-way relationship with the grid while the net
metering customer has a two-way relationship. Further, while the daily demand requirements of
the two customers may be similar, net metering custome/s net monthly energy as a basis for
billing does not reflect their utilization of the grid.
When a net metering customer generates either the same amount or more energy from
their system than they utilize over the course of the month, the custome/s use will net to zero;
this is commonly referred to as a "net zero" customer. However, during certain hours of the
month, the net zero customer is a net exporter of energy to the grid, and during other hours of
the month, the customer is a net consumer of energy from the grid. The net-zero customer
utilizes all aspects of ldaho Power's grid during the hours they are consuming energy (including
the generation, transmission, and distribution systems) but then also utilizes the distribution
system during the hours they are exporting energy to the grid. To illustrate this, Chart 4
compares the hourly usage of a net zero residential net metering customer on the Company's
2016 adjusted system peak day to the hourly usage of a standard service customer whose
home is on the same street as the net zero net metering customer. This chart highlights how
the net metering customer uses the grid differently - that is, they use the grid to export excess
net energy in those hours when on-site consumption is less than generation, and they use the
grid to consume energy in those hours when on-site consumption is more than generation.
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 10 of 18
8
5
4
2
(21
(4)
(6)
L 2 3 4 5 6 7 8 9 1011t2L314L516L7 1819202L222324
Hour Ending
t "Net Zero" Net Metering Customer r Standard Service Residential Customer
3J
Ghart 4: Residential Net Metering Gustomer vs. Standard Service Residential Gustomer
Chart 5 demonstrates that the net monthly energy consumed by the net metering
customer is not representative of their utilization of the grid, which is more accurately reflected
by the measured demand (kW). This chart uses the absolute value of the hourly
measurements, which reflects the utilization of the distribution system, regardless of which
direction the energy is flowing. Chart 5 also illustrates that, just like the standard service
residential customer, the residential net zero customer is using the grid during all24 hours of
the day.
Chart 5: Utilization of the Distribution System
=!
8
7
6
5
4
3
2
1
L 2 3 4 5 6 7 8 9 1011L2L3L4L5L6L7 1819202L222324
Hour Ending
r Net Metering trExported Net Excess r Standard Service
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page11 of18
While the net zero customer utilizes the grid to a similar degree as the nearby standard
service customer, the current rate design of billing residential net metering customers a nominal
service charge coupled with the remaining variable and fixed cost recovery through a volumetric
rate does not collect the appropriate amount of costs from that customer. Table 3 below shows
the 2016 base rate revenue received from both customers described above. While the net zero
customer uses the grid every hour of every day of the year, that customer will not be billed for
anv kWh charges (and will avoid paying for fixed costs in excess of $5 per month) so long as
the sum of the hours with excess generation exported to the grid is greater than the sum of the
hours when the customer was consuming from the grid. On the other hand, the neighbor of the
net zero customer, who consumed all of their energy needs from the grid, paid base rates of
$1,225.
Table 3: Annual Utility Bi!! Comparison (net zero customer and nearby residential
customer)
"Net Zero" Residential Nearby Residential
Service Charge
kWh Charges
Soo
0
s60
1,155
Total Seo 51,225
While these two customers look similar from a utilization standpoint, the current pricing
structure was only intended to appropriately collect costs from the standard service customer
who uses the system in one direction, drawing all of their energy needs from ldaho Powefs
system.
The Company is not the first to look at addressing the potential for cost shift that exists
with net metering customers. Utilities across the country are examining how to best address the
issues created by existing rate designs and the issues created by the historical practice of a
one-for-one kWh credit established at the retail rate. The Company continues to believe that
proper rate design is the appropriate means for addressing the existing cost shift that will
continue to grow with the further adoption of distributed generation in its service area. ldaho
Power has carefully monitored the increasing penetration in its system and believes that
establishing new customer classes for the residential and small general service net metering
Exhibit No. 9
Case No. IPC-E-'|7-13
C. Aschenbrenner, IPC
Page 12 of 18
customers will enable the Company to address what an appropriate pricing and compensation
structure is in a future rate case. The NARUC Manual noted that the "important point is that a
jurisdiction be situated to analyze, plan, and be prepared for its next steps before the market
and customer adoption rates overtake its ability to respond."10
VII. SYSTEM RELIABILITY CONSIDERATIONS
System Operations
While the overall customer-sited generation compared to ldaho Power-controlled
generation is relatively small, the Company continues to study the load profile of its residential
net metering customer segment to stay cognizant of changing grid conditions with increased
participation in net metering. Chart 6 compares the average load profile calculated from the
Company's residential net metering customer segment on the 2015 adjusted system peak day
(June 29, 2015) to the average load profile calculated from the Company's residential net
metering customer segment on the 2016 adjusted system peak day (June 29,2016). The chart
demonstrates how the 2016 ramp-up caused by decreasing customer-sited generation starting
mid-day combined with increasing loads starting in the early evening, is becoming steeper,
which could eventually cause a challenge for ldaho Power's grid operators. During this period,
the Company must quickly ramp-up or ramp-down ldaho Power-controlled generation resources
to meet an increasing or decreasing electricity demand - sometimes refened to as load
following. Chart 6 also demonstrates that, when the load curve is less than or equal to zero, the
net metering customer is generating more energy than they are using.
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 13 of 18
ro NARUC Manual, p.62
3.50
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1 2 3 4 5 6 7 8 9 10ttt2 13L4 15L617 18L9202t222324
Hour Ending
-2015
Residential Net Meterin 2015 Residential Net Metering
Chart 6: Net Metering Load Profiles for 2015 and 2016
ln order to achieve system reliability, ldaho Power must continuously match the demand
for electricity with supply on a second-by-second basis. As participation in the Company's net
metering service continues to grow, it may become more challenging to achieve this balance.
Distribution System Reliability
The Company's electrical distribution system continues to experience net metering
system growth throughout its electrical distribution circuits. Because the current penetration
level on most of the distribution circuits is relatively small as compared to distribution circuit
loads, distributed generation has not had a significant impact on distribution system reliability.
There are approximately 650 electrical distribution circuits in the Company's service
area. As of March 31, 2017, there were 1,153 active net metering systems totaling
approximately 8,900 kW on 324 distribution circuits. This compares to 790 active systems
across 282 distribution circuits that were reported on March 31,2016. The circuits that contain
the greatest number of net metering systems are largely located in northeast Boise and in the
Wood River Valley area, while the circuits that contain the greatest amount of connected net
metering capacity tend to be located in mostly agricultural and rural areas. The greatest
number of active net metering systems that currently exist on a single distribution circuit is 30
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 14 of 18
totaling approximately 139 kW. On another distribution circuit, from a capacity perspective,
seven generators (all solar) rated at approximately 606 kW are located on that single distribution
circuit. That circuit serves mostly rural customers with a calculated summer peak load of
approximately 1,900 kW. The net metering penetration on the circuit is approximately 32
percent. The net metered connected kW capacity on the Company's distribution system
continues to remain small and the Company has not yet experienced significant operational
impacts on these circuits.
Net metering installations are typically unique in both customer-specific system
attributes, as well as the Company's facilities at a location. The Company reviews several
factors when determining the feasibility of connecting a new net metering system. This review
may include determining if there is adequate transformation and conductor capacity, as well as
a phasing (single- versus three-phase) match. The Company has not denied any net metering
applications due to system limitations, but continues to carefully monitor requests for connection
to ensure ongoing safe and reliable service is available to both existing and new customers.
The Company will continue to monitor the effects of net metering service on its system
including tracking the locations and connected capacities of net metering customers and
comparing connected capacities to minimum circuit loads. As net metering system penetration
increases, the Company will keep the Commission apprised of experienced or anticipated
system reliability impacts and will propose mitigation as needed. This may include additional
inverter requirements such as smart inverter technology, which can mitigate many high
penetration issues.
V!!I. 2016 EXCESS NET ENERGY CREDIT TRANSFERS
Accumulated Net Excess Energy Credit Balances
ln Order No. 32846, the Commission stated:
[W]e find it fair, just, and reasonable for the kWh credit to
indefinitely carry forward to offset future bills for so long as
the customer remains on the net metering service at the
same generation site. Allowing the credits to carry forward
indefinitely ensures that customers will be able to use their
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 15 of 18
credits when they need them and thus receive the benefits
of their systems.
On reconsideration, ldaho Power asked the Commission to clarify that it could
implement excess net energy credit methodology effective with each customer's January 2014
bills, which the Commission authorized in Order No. 32872.11 Since the implementation of the
kWh crediting for excess net energy in January 2014, the Company has accumulated significant
unused kWh credit balances. The Company had accumulated approximately 0.5 million,
1.3 million, and 2.3 million unused excess net energy credits by the end of years 2014,2015,
and 2016, respectively. This growing accumulation of unused excess net energy credits
represents a potential liability on the Company's financial statements that is both difficult to
assign a value to and has the potential to never be relieved, which may add undue risk to the
Company's financial position. ldaho Power will continue to monitor the accumulation of unused
excess net energy credits and will notify the Commission if it becomes necessary for the
Company to seek a change in how these credits are accounted for.
Manual Meter Aggregation
Schedule 84, Customer Energy Production Net Metering Service ("Schedule 84"),
provides for net metering customerc to submit requests to transfer excess net energy credits
between January 1 and January 31 of each year. The Company applies the following criteria
from Schedule 84 to all requests received:
i. The account subject to offset is held by the customer; and
ii. The meter is located on, or contiguous to, the property on which the Designated
Meterl2 is located. For the purposes of Schedule 84, contiguous property includes
property that is separated from the premises of the Designated Meter by public or
railroad rights of way; and
iii. The meter is served by the same primary feeder as the Designated Meter at the time
the customer files the application for the Net Metering System;13 and
11 Order No. 32872, p.3.
12 Schedule 84 states the Designated Meter "is the retail meter physically connected to the Net
Metering System."
13 Schedule 84 states the Net Metering System "is a Customer-owned Generation Facility
interconnected to the Company's system under the applicable terms of Schedule 72 and Schedule 84."
Exhibit No. 9
Case No. IPC-E-I7-13
C. Aschenbrenner, IPC
Page 16 of 18
iv. The electricity recorded by the meter is for the customer's requirements; and
v. For customers taking service under Schedule 1 or Schedule 7, credits may only be
transferred to meters taking service under Schedule 1 or Schedule 7. For customers
taking service under Schedule 9, Schedule 19, or Schedule 24, credits may only be
transfened to meters taking service under Schedule 9, Schedule 19, or Schedule 24.
On December 6, 2016, net metering service customers were sent a letter outlining the
meter aggregation process, the requirements, and the deadlines for customers to submit an
application for transfer of eligible excess net energy credits. A copy of the transfer request form
and a Frequently Asked Questions document were sent with the letter (both of which are
available on the Company's website).14 Finally, the Company posted a message on all net
metering service customers' December bills informing them of the upcoming transfer window.
Given the costs associated with system customization, the Commission directed ldaho
Power in Order No. 32925 to keep it apprised of the number of customers choosing to transfer
excess net energy credits under the newly-approved meter aggregation rules. As of the
January 31, 2017, deadline, the Company received 41 applications for transfer and those
applications were reviewed during February against the Schedule 84 criteria.
Based on the criteria, the Company determined that 34 of the requests were eligible for
transfer. The total amount transferred was 478,990 kwh generated from net metering systems
taking service under Residential (36 percent), Small General (31 percent), and Large General
(16 percent) and lrrigation (17 percent) rate schedules. The 478,990 kWh were transfened to
customers taking service under Residential (67 percent) and Large General (16 percent) and
lrrigation (17 percent) rate schedules.
The Company received seven applications that were ultimately found to be ineligible for
transfer based on the following:
. Six applicants did not have excess net energy credits.
. One applicant requested a transfer to a meter on a property that was not on a
compatible rate schedule.
14 https://www.idahooower.com/AboutUs/BusinessToBusiness/GenerationlnterconnecUnetMeterinq.cfm
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPG
Page 17 of 18
The Company contacted by phone all of the customers who had requested a transfer but
whose applications were denied to explain the reason the requested transfer could not be
completed.
tx. coNcLustoN
ldaho Power continues to believe that in order to facilitate the expansion of distributed
generation in a safe, reliable, and fair manner, net metering rate design must be addressed
sooner rather than later. Between the first quarters of 2016 and 2017, pending and active net
metering systems in ldaho Power's service area have increased 51 percent. This growth brings
the potential for significant cost shifting to occur from the Company's net metering customer
segment to the standard service customer classes, most prominently within the residential and
small general service customer classes. Given the real and discernible differences between
residential and small general service net metering customers and standard service residential
and small general service customers, ldaho Power believes it is appropriate to establish new
customer classes for these segments. Establishing new customer classes for the residential
and small general service net metering customer segments will enable ldaho Power to better
allocate costs based on how those customers use the Company's grid.
The growth in net metering service since 2001 demonstrates how the Company's grid is
evolving and underscores the need to evaluate the associated service provisions and pricing to
ensure that ldaho Power can continue to offer safe, reliable, fair-priced electrical service now
and in the future. ldaho Power will continue to work with its customers and stakeholders to
inform the timing and scope of any filing that will address the Company's net metering service
provisions or pricing.
Exhibit No. 9
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 18 of 18
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
cAsE NO. IPC-E-17-13
IDAHO POWER COMPANY
ASCHENBRENNER, DI
TESTIMONY
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I
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-17-13
IDAHO POWER GOMPANY
ASGHENBRENNER, DI
TESTIMONY
EXHIBIT NO.11
Hecht letter: Solar power I Idaho Statesman Page I of5
TETTERS TO THE TDITOR JUilE 23,20171:07 All
Hecht letter: Solar power
If, like the vast majority of Americans, you prefer clean air and water, you can
select Idaho sunshine to power your home. I chose clean energy for my home last
summer through the Solarize the Valley program, and now my monthly electric bill
is only $5.21.
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Building Council and the Snake River Alliance, to homeowners and businesses at
lowest-possible prices by providing installers with volume business. My installation
quote last year was 40 p€rcent lower than previous quotes; this y€ilr prices are
even lower per kilowatt. Idaho provides low finance rates for the PV electric
system. And real estate agents with experience tell me it raises my home's resale
value.
This year, I enjoyed both a 3O percent federal investment tax credit, and ldaho tax
relief, which I can use to buy an electric vehicle. Fortunately, Solarize the Valley
includes EV charging stations as well this year.
Installation was abreeze, and with no moving parts, my system has quietly and
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LISA HECT{T, BOISE
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trsza
SUGGESTED TORYOU Exhibit No. 11
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 1 of 'l
http://www.idahostatesman.corn/opinionfletters-to-the-editor/articlel57779704.htlorrl 7/1412017
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPG.E.17.13
IDAHO POWER COMPANY
ASCHENBRENNER, DI
TESTIMONY
EXHIBIT NO.12
S!ffi*.
An loAcoRP comDany
Insert Date]
Insert Recipient Name]
Insert Recipient Title]
Insert Recipient Company]
Insert Recipient Street Address]
finsert City, State Zip]
Subject: Modification to Net Metering Service
Dear finsert Recipient]:
Idaho Power is pleased to offer options to our customers who wish to install on-site renewable
generation at their home or business. We want to let you know, on f uly 27 ,2017 ,ldaho Power filed
a request with the Idaho Public Utilities Commission IPUC or Commission) to modiff its net
metering service applicable to new on-site renewable generation installations on or after fanuary 1,
2018. These changes are intended to facilitate the expansion of on-site generation in a way that is
both scalable and sustainable into the future.
As a current net metering customer, we want to let you know about the request and what it means
for you.
Idaho Power is requesting to:
o Close the current net metering tariff fSchedule 84) to new residential and small general
service customers.. Create two new tariffs for residential and small general service customers who wish to
install on-site renewable generation.
o Update inverter requirements on new systems to meet emerging industry standards.. Open a separate IPUC proceeding to determine a compensation structure for customer-
owned generation that reflects both the costs and benefits it brings to the electric grid.
If approved as proposed, the changes would affect new installations only. We have asked that
current net metering customers, such as yourself, remain on the existing net metering tariff
(Schedule 84) for a period of time. That Iength of time will be determined as part of a future rate
proceeding. At this time, no date for that proceeding has been set.
We value your business and want to address any questions you have about the proposed changes to
net metering service. For your reference, I have enclosed a Frequently Asked Questions document
that provides more details.
Exhibit No. 12
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page I ot2
[Insert Recipient' s Name]Page2 ofZ [Insert Date]
I invite you to learn more about the proposal. Copies of the application are available to the public at
the Commission offices (472W.Washington St., Boise), Idaho Power offices or on Idaho Power's
website, vvrnrw.idahopower.com or the IPUC website, www.puc.idaho.gov. You can view additional,
related materials, including a news release on the filing at www.idahopower.com/rates and click on
the link to ldaho Rate Filings.
If you have any additional questions or would like to discuss further, please contact our Customer
Service Center at [phone].
Thank you for taking the time to read this letter.
Sincerely,
*/t,rrrrr-D/t-
Theresa Drake
Customer Relations and Enerry Efficiency Manager
Exhibit No. 12
Case No. IPC-E-I7-13
C. Aschenbrenner, IPC
Page 2 ot 2
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-17-13
IDAHO POWER COMPANY
ASCHENBRENNER, DI
TESTIMONY
EXHIBIT NO. 13
SIffi*@
An IDAC0RP Company
finsert Date]
flnsert Recipient Name]
Insert Recipient Title]
Insert Recipient Company]
Insert Recipient Street Address]
finsert City, State Zip]
Subiect: Modification to Net Metering Service
Dear flnsert Recipient]
Idaho Power is pleased to offer options to our customers who wish to install on-site renewable
generation at their home or business. We want to let you know, on fuly 27,2077,Idaho Power filed
a request with the ldaho Public Utilities Commission (IPUC or Commission) to modiff its net
metering service applicable to new on-site renewable generation installations on or after f anuary 1,
2018. These changes are intended to facilitate the expansion of on-site generation in a way that is
both scalable and sustainable into the future.
As a customer with an active net metering application, we want to let you know about the request
and what it means for you.
Idaho Power is requesting to:. Close the current net metering tariff [Schedule 84) to new residential and small general
service customers.o Create two new tariffs for residential and small general service customers who wish to
install on-site renewable generation.. Update inverter requirements on new systems to meet emerging industry standards.. Open a separate IPUC proceeding to determine a compensation structure for customer-
owned generation that reflects both the costs and benefits it brings to the electric grid.
This proposal may affect your application for interconnection. As part of the application process,
Idaho Power requires a System Verification Form, certiffing the system has been installed and has
passed all local, state and federal requirements including a city or state electrical inspection. Under
the proposal, customers who submit this form on or before December 37,20t7, will take seryice
under the existing net metering tariff (Schedule 84); customers who submit this form on or after
fanuary L,20LB,will take service under the new tariffs.
The rates under the new tariffs will mirror those of the residential and small general service
customer classes, as do the rates under Schedule 84. However, as part of a future rate proceeding
the new tariffs will be reviewed and new pricing structures may be proposed. At this time, no date
has been set for a future rate proceeding.
Exhibit No. 13
Case No. IPC-E-17-13
C. Aschenbrenner, IPC
Page 1 ot2
[Insert Recipient's Name]Page2 of2 [Insert Date]
We value your business and want to address any questions you have about the proposed changes to
net metering service. For your reference, I have enclosed a Frequently Asked Questions document
that provides more details.
I invite you to learn more about the proposal. Copies of the application are available at the
Commission offices (472W. Washington St., Boise), Idaho Power offices or on Idaho Power s
website, www.idahopower.com or the IPUC website, www.puc.idaho.gov. You can view additional,
related materials, including a news release on the filing at www.idahopower.com/rates and click on
the link to Idaho Rate Filings.
If you have additional questions or would like to discuss further, please contact our Customer
Service Centerat [phone].
Thank you for taking the time to read this letter
Sincerely,
-/tlrrrrr"-D/t-Theresa Drake
Customer Relations and Enerry Efficiency Manager
Exhibit No. 13
Case No.|PC-E-17-13
C. Aschenbrenner, IPC
Page2ol2