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HomeMy WebLinkAbout20171113Answer to ICEA Motion to Dismiss.pdf3Iffi* An IDACORP Company LISA D. NORDSTROM Lead Counsel I nordstrom@ida hopower.com RECEIVED I0lI N$Y l3 PH lr: lr8 lll -',1-lC, P'tJ llLtC ; i i 1y'1:il;S COUMtSSI0N November 13,2017 VIA HAND DELIVERY Diane Hanian, Secretary ldaho Public Utilities Commission 472 West Washington Street Boise, ldaho 83702 Re Case No. IPC-E-17-13 New Schedules for Residential and Small General Service Customers with On-Site Generation - ldaho Power Company's Answer to the ldaho Clean Energy Association's Motion to Dismiss Dear Ms. Hanian Enclosed for filing in the above matter please find an original and seven (7) copies of ldaho Power Company's Answer to the ldaho Clean Energy Association's Motion to Dismiss. lf you have any questions about the enclosed documents, please do not hesitate to contact me Very truly yours, X;4ru"a-/,*r,J Lisa D. Nordstrom LDN:kkt Enclosures lnordstrom@id ahopower.com Attorney for ldaho Power Company BEFORE THE IDAHO PUBLIC UT!LITIES COMMISSION LISA D. NORDSTROM (lSB No. 5733) ldaho Power Company 1221West Idaho Street (83702) P.O. Box 70 Boise, ldaho 83707 Telephone: (208) 388-5825 Facsimile: (208) 388-6936 IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AUTHORITY TO ESTABLISH NEW SCHEDULES FOR RESIDENTIAL AND SMALL GENERAL SERVICE CUSTOMERS WITH ON.SITE GENERATION RECEIVED Z0lI !t0$ l3 Pl{ lr: hB lLlr,i'iC t''UELICli I1i iri=$ COh4MlSSl0N ) ) ) ) ) ) ) ) CASE NO. IPC-E-17-13 IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS Idaho Power Company ("ldaho Power" or "Company") and the electric industry are currently transforming to integrate new technologies and respond to changing customer preferences. Significant changes have occurred nationally and locally in the five years since the ldaho Public Utilities Commission ("Commission") last addressed customer- owned distributed energy resources ("DER"). Most intervenors in this case argue that the Commission should narrowly interpret its authority and/or delay responding to the opportunities and challenges posed by customers taking bi-directional services until a general rate case is filed. Yet as a regulator that performs both legislative and judicial IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS. 1 functions, the Commission is empowered by the ldaho Legislature to set and adapt regulatory policy as circumstances require to promote and protect the public it serves. Arguments that res judicata or conditions precedent prevent the Commission from acting ignore the state of ldaho's utility regulatory framework and should be denied. Pursuant to RP 57, ldaho Power files this Answer to the ldaho Clean Energy Association's ("|CEA") Motion to Dismiss and Joinders filed by multiple intervenors. The Company requests the Commission deny the Motion and allow its Application to proceed as scheduled in Order No. 33901. BACKGROUND Five years ago, ldaho Power filed Case No. IPC-E-12-27 in November 2012 requesting authority to modify its net metering service to approximately 350 customers. ldaho Power's Application ("2012 Application") asked the Commission to approve four changes to the net metering service: (1) increasing the net metering cap; (2) changing the net metering pricing structure; (3) changing how excess net energy is billed; and (4) changing tariff provisions regarding interconnection with net metering customers. ln Order No. 32846 issued in July 2013, the Commission declined to make changes to ldaho Power's net metering pricing structure. The Commission stated, in relevant part on pages 12-13: Commr.ssion Decision: Based on our review of the record, we believe that net metering customers have some characteristics that could justify moving them into a separate rate class and onto a different schedule from the general residential and small general service rate classes. However, we are concerned that the Company's proposal is inconsistent with State policy as expressed in the ldaho Energy Plan, will discourage investment in distributed generation, and encourage rate-gaming. Further, we believe dramatic changes such as those proposed in this case-including increasing the monthly customer charge, imposing a new BLC IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 2 charge, and reducing the energy charge for the residential and small general service customers-should not be examined in isolation but should be fully vetted in a general rate proceeding. Accordingly, at this time we decline to make these changes, change the rate design, or separate the net metering customers from the standard residential service and small genera! service classes. lf the Company wishes to raise these issues again, then it should do so in the context of a general rate case. We agree with the Company that net metering customers do escape a portion of the fixed costs and shift the cost burden to other customers in their class. However, we find that more work needs to be done to establish the correct customer charge for those who net meter. Case No. IPC-E-12-27, Order No. 32846, pp. 12-13. As directed by the Commission, the Company has filed an annual status report for each of the past four years discussing "the net metering service provisions and pricing and how distributed generation may be impacting system reliability."l On July 27 ,2017, ldaho Power filed an Application ("2017 Application") for an order authorizing: (1) closure of Schedule 84, Customer Energy Production Net Metering, ("Schedule 84") to new service for residential and small general service ("R&SGS") customers with on-site generation after December 31,2017, (2) establishment of two new customer classifications applicable to R&SGS customers with on-site generation that request to interconnect to ldaho Power's system, with no pricing changes at this time, (3) acknowledgement that smart inverters provide functionality that is necessary to support the ongoing stability and reliability of the distribution system by ordering the Company to amend its applicable tariff schedules to require the installation and operation of smart inverters for all new customer-owned generator interconnections within 60 days following 1 ln the Matter of ldaho Power Company's Application for Authority to Modify /fs Nef Metering Seryrce and to lncrease the Generation Capacity Limit, Case No. IPC-E-12-27, Order No. 32846 at 19. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS.3 the adoption of an industry standard definition of smart inverters as defined by the lnstitute of Electrical and Electronic Engineers ("|EEE"), and (4) commencement of a generic docket at the conclusion of this case to establish a compensation structure for customer- owned DER that reflects both the benefits and costs that DER interconnection brings to the electric system. On October 27 ,2017, ICEA filed a Motion to Dismiss and Memorandum in support thereof, Auric Solar, LLC ("Auric Solar") filed a Joinder and Memorandum in Support of ICEA's Motion to Dismiss, and the City of Boise ("Boise City") filed a Memorandum Joining in Support of and Providing Comments to ICEA's Motion to Dismiss. Following the October 27 deadline for dispositive motions established in Commission Order No. 33901, the ldaho Conservation League ("lCL") filed a Partial Joinder on November 1, 2017. On November 3, 2017, the ldaho Sierra Club filed its Partial Joinder to ICEA's Motion to Dismiss, lntermountain Wind and Solar, LLC filed a Partial Joinder in Motion to Dismiss and Memorandum in Support of Motion to Dismiss, and the Snake River Alliance ("SRA") and NW Energy Coalition jointly filed a Joinder and Memorandum in Support of ICEA's Motion to Dismiss. ldaho Power refers herein to these parties collectively as "Movants." The Movants argue in ICEA's Motion to Dismiss and their Joinders thereto that the above language in Order No. 32846 bars consideration of the issues presented in the present docket. ldaho Power strongly disagrees. ARGUMENT l. The lmpact of Order No. 32846 on This Proceedinq !CEA's Memorandum in Support of Motion to Dismiss and the Movants' Joinders argue that the doctrine of res judicata applies to the Company's 2017 Application. The IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 4 ICEA's Motion to Dismiss also moves the Commission for "an Order dismissing this case with prejudice because Applicant ldaho Power Company has failed to satisfy the conditions precedent to it applying to the Commission for other relief."2 Neither of the arguments provide a reasonable basis to dismiss ldaho Power's 2017 Application. A. Res Judicata. On pages 2-3 of its Memorandum, ICEA quotes Magee v. Thompson Creek Mining Co. for the proposition that: ln ldaho, 'res judicata' means that in an action between the same parties upon the same claim or demand, the former adjudication concludes parties and privies not only as to every matter offered and received to sustain or defeat the claim but also every matter which might and should have been litigated in the first suit."3 ICEA argues that res judicata applies because ldaho Power's 2017 Application presents the same set of operative facts as its 2012 Application and that the Commission has previously decided the issue(s) that ldaho Power presents. ldaho Power disagrees with this narrow interpretation of facts and Commission authority. 1. Same Set of Operative Facts. Much has changed in the five years since ldaho Power filed its 2012 net metering case. When ldaho Power filed its 2012 Application, it was largely concerned about potential cost shifting to non-participants and wished to address this issue while the number of customers was relatively small, and before quantifiable cost shift was occurring. At the time Order No. 32846 was issued, it is unlikely that any party expected this issue to remain unaddressed five years later. ln addition to more recent 2 ICEA's Motion to Dismiss at 1 3 Magee v. Thompson Creek Mining Co., 152ldaho 196, 2O2,268 P.3d 464, 470 (2012) (internal quotations omitted). Res judicata applies to decisions of ldaho administrative agencies. Magee, 152 ldaho at202,268 P.3d at470 (2012). IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 5 national trends discussed in Mr. Tatum's testimony,a ldaho Power believes that circumstances in its service atea - particularly continued growth in participation and misinformation to potential future net metering participants - have changed such that the Commission should evaluate whether it wishes to address the requests set forth in the Company's 201 7 Application. 2. Previouslv Decided the lssue ldaho Power Presents . ln 2012, ldaho Power proposed substantial changes to its pricing structure applied to net metering customers - "including increasing the monthly customer charge, imposing a new BLC charge, and reducing the energy charge for the residential and small general service customers" - such that the Commission believed they "should be fully vetted in a general rate case proceeding."5 However, when the Commission declined in July 2013 to make changes "at this time",6 the Commission clearly envisioned revisiting the issue in the future. lt "agree[d] with the Company that net metering customers do escape a portion of the fixed costs and shift the cost burden to other customers in their class" but that "more work needs to be done to establish the correct customer charge for those who net meter".7 ln the instant case, ldaho Power proposed an approach that incorporated this guidance from the Commission in Order No. 32846 as well as feedback received from four stakeholder meetings. To best position customers, stakeholders, and the utility for rate changes that will be proposed in a future rate proceeding, ldaho Power's 2017 a Direct Testimony of Timothy E. Tatum at 14-18. 5 Order No. 32846 at 12-13. 6 Order No. 32846 at 13. 7 /d. (emphasis added). IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 6 Application requests that the Commission establish new rate classes and open a generic, multi-utility case to investigate the proper methodology to value customer-sited distributed generation. The Movants argue that res judicata bars the Commission from revisiting the issue of establishing new rate classes because it was finally decided in Order No. 32846. This would be an absurd result that, if strictly applied, would prevent the Commission from ever modifying rates, charges, or classifications once established. The Commission does not forfeit its power under ldaho Code S 61-503 or its public duty under ldaho Code S 61- 502 to investigate and determine rates, charges, or classifications if it finds them to be "unjust, unreasonable, discriminatory or preferential."s lndeed, the Commission previously indicated on page 12 of Order No. 32846 that "net metering customers have some characteristics that could justify moving them into a separate rate class While res judicata is appropriately applied when adjudicating transactional matters such as contracts and complaints, it is less suited to the Commission's legislative and policy functions that must evolve over time.s Applying res judicata as the Movants propose ignores ldaho Code S 61-624, which allows the Commission to "rescind, alter, or amend any order or decision made by it." The Legislature clearly envisioned that the Commission would need to modify orders to address changing circumstances that render rates, charges, or classifications unjust or unreasonable. While the Commission found that changes to rates and classification were premature in 2013, the Company's 2017 8 ldaho Code $ 61-502 e "Because regulatory bodies perform legislative as well as judicial functions in their proceedings, they are not so rigorously bound by the doctrine of sfare decisls that they must decide all future cases in the same way as they have decided similar cases in the past." Rosebud Enterprises v. ldaho PUC,128 ldaho 609, 618,917 P.2d766,775 (1996) citing lntermountain Gas Co. v. ldaho PUC,97 ldaho 113, 119, 540 P.2d 775,781 (1975). See a/so Commission Order No. 30955 at 21. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 7 Application gives the Commission the opportunity to revisit the limited issue of customer classification if it believes circumstances warrant doing so. B. Conditions Precedent. Similar to arguments put forth by |CEA1o and Auric Solar,1l Boise City's Joinder to ICEA's Motion to Dismiss contends that "ldaho Power has failed to follow the Commission's Order No. 32846 requiring certain conditions related to a filing of this sort, including obtaining customer and stakeholder feedback and presenting its application as a general rate proceeding.'12 ldaho Power will now address each of these arguments. 1. Stakeholder Ensaqement. ICEA argues on page 5 of its Memorandum that ldaho Power has not met the condition precedent set by the Commission in Order No. 32846 to "inform and obtain feedback from its customers and stakeholders" before proposing major program-specific changes. As explained in the Ms. Aschenbrenner's testimony,l3 ldaho Power has not only solicited feedback from interested parties, but it also incorporated this feedback into the case strategy. However, ICEA implies that stakeholder engagement is deficient if it does not "craft a consensus."14 ldaho Power's actions were more than "going through the motions" and did in fact "meaningfully consider public input and shape its application accordingly."l5 The 10 ICEA Memorandum in Support of Motion to Dismiss at 5. 11 Auric Solar, LLC's Joinder and Memorandum in Support of ICEA's Motion to Dismiss at 2. 12 Boise City's Memorandum Joining in Support of, and Proving Comments to, ICEA's Motion to Dismiss at 3. ts Direct Testimony of Connie G. Aschenbrenner at 15-24. 14 ICEA Memorandum in Support of Motion to Dismiss at 5. 15 Auric Solar, LLC's Joinder and Memorandum in Support of ICEA's Motion to Dismiss at 5. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 8 Company has solicited feedback (and incorporated the feedback received) from customers and stakeholders regarding potential changes that would impact net metering customers on at least four occasions. a. Fall 2015 Customer Focus Groups / Stakeholder Meetinq. During 2015, ldaho Power contemplated a filing that would have sought to implement mandatory demand charges for all R&SGS customers. ln evaluating whether to proceed with the filing, ldaho Power held 12 customer focus groups across the Company's service area,16 with each session attended by seven to eight customers. At each focus group, a Company representative delivered a short presentation explaining the concepts of demand and energy and discussed a potential rate design that would incorporate a mandatory demand charge for those customer classes. After those focus groups, the Company held meetings with stakeholders to share the Company's strawman rate design, discuss the feedback it received at the focus groups, and listen to additional feedback from those stakeholders. Several parties in this current docket, including the Commission Staff, lCL, and SRA, participated in those discussions. After considering input it obtained from customers and stakeholders, the Company ultimately decided not to move fonarard with a filing at that time. b. Julv 2016 Stakeholder and Customer Meeting. As described more fully on pages 15-18 of Ms. Aschenbrenner's direct testimony, ldaho Power held a customer meeting in July 2016 to (1) share the results of the cost shifting analysis presented to the Commission in the 2016 Net Metering Status Report ("2016 Report"), (2) raise awareness among the Company's R&SGS net metering customers about the issue 16 Focus groups were held in Boise (4), Caldwell (2), Pocatello (2), Twin Falls (2), and the Wood River Valley (2). IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 9 of cost shifting and that the Company was considering making a filing that would seek to modify rate design, and (3) solicit input, feedback, and concerns from customers and stakeholders. The Company mailed an invitation to all active and pending R&SGS net metering customers, and invited parties from the 2012 net metering case.17 At the meeting, the Company described the analysis it performed in preparation for the 2016 Report, and presented a straw-man rate design that it was considering filing. The Company provided participants with an opportunity to ask questions, voice concerns, and to propose potential alternative suggestions for consideration. Participants at the meeting strongly opposed any modifications to rates - generally, participants felt that the rate changes proposed would be punitive for net metering customers. After carefully considering the input received at that meeting from customers and stakeholders, the Company decided not to make a filing in 2016 and instead contemplated alternate case strategy while continuing to monitor the participation in the net metering service. c. June 2017 Stakeholder Meetinq. The Company filed its 2017 Net Metering Status Report ("2017 Report") with the Commission in April 2017. ln the 2017 Report, the Company determined: (1)the estimated cost shift from net metering customers to non-participating customers continued to grow throughoul2016, (2) that cost shift coupled with an updated forecast demonstrating significant growth on the horizon prompted ldaho Power to engage with stakeholders to provide an update of the recent growth in the net metering service, and (3) described an alternative case strategy than what had been proposed the prior year. Contrary to the Movants' claims that the 17 Case No. IPC-E-12-27 IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 1O Company has not "informed or obtained feedback in any meaningful way'ta or that the Company has simply gone "through the motions" rather than "meaningfully consider public input and shape its application accordingly,"ls the Company's 2017 Report described2o that ldaho Power had carefully considered the input it received from customers in 2016 and ultimately determined it would not seek pricing changes in customer rates as part of a proposal. The Company subsequently presented a much more limited proposal for consideration at the June 2017 Stakeholder Meeting - one that would not have an immediate impact on customers, but one that would position the Company, and parties, to address the rate structure at a date in the future in a general rate proceeding or another docket where pricing was considered. d. June 2017 lnstaller Meetinq. ldaho Power also held a meeting with installers to understand what the impact would be (if any) of the Company's planned proposal to seek an eventual inclusion of a smart inverter requirement in Schedule 72. Several installers in the Company's service area attended the meeting and none of those present indicated concerns about a future requirement for smart inverters. ldaho Power incorporated this feedback into its current request.2l ln developing the scope of the Company's 2017 Application, the Company considered the feedback provided by both customers and stakeholders. The Company's decision to request the Commission to open a generic docket at the conclusion of this case with the purpose of establishing a compensation structure for customer-owned 18 ICEA Memorandum in Support of Motion to Dismiss at 5. 1s Auric Solar, LLC's Joinder and Memorandum in Support of ICEA's Motion to Dismiss at 5. 20 2017 Report at 3-5. 21 Direct Testimony of Connie G. Aschenbrenner at21-24. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 11 DERs that reflects both the benefits and costs that DER interconnection brings to the electric system was the direct result of what the Company heard from interested stakeholders and installers.22 2. Timing of a General Rate Case. ldaho Power has not filed a general rate case since 2011 and it is unknown when it will do so. In IDACORP's November 2, 2017, Q3 earnings release call, ldaho Power President and CEO Darrel Anderson was asked for his thoughts on the Company's near-term rate activity. Mr. Anderson responded that ldaho Power "would have to signal early in '18 if we're going to do something for'19... given what we would hope to see as continued strong economic activity and if we can continue to manage the expenses like we have done this year, we would hope to not have to go in."2g Because the Company does not have definite near- term plans to file a general rate case, ldaho Power's requested relief in the 2017 Application purposefully does not impact customer rates but will position the Company to make appropriate rate proposals for Commission, customer, and stakeholder consideration when that time comes. ll. Chanqed Circumstances A. Growth in Participation. When the Company filed for changes to its net metering service in 2012, it did so based on a 2002 Commission Order directing the Company to make a filing when the Company's net metering service reached the 2.9 22 ld. at24. 23 IDACORP lnc. Earnings Call transcript, November 2,2017, at7. http://www.idacorpinc.com/-/media/Files/l/lDACorp/conference-calls/ida-usq transcript 2017-11-02.odf IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 12 megawatt ("MW') cap imposed by that Order.24 At the time of the 2012 Application, the Company had 353 net metering customers with installed generation capacity of 2.53 MW. As of June 2017, the number of active and pending net metering systems had grown to 1,468 with installed generation capacity of 11.11 MW.25 As shown in Chart 1, as of October 31 ,2017, iust four months later, the number of active and pending systems is 1,893 with installed generation capacity of 15.77 MW; net metering customer generating capacity has increased by 42 percent in those four months. Chart 1: Count of Active/Pending Systems and lnstalled Capacity 3 = .=(Jl! CL(E I 18 16 14 t2 r0 2,000 1,800 1,6100 l,4W 1,200 1,000 800 500 400 200 0 Eo tt o0 .E:E'troo. !,tra!o.zu o c =o(, 8 5 4 2 0 20L2 20L3 20t4 2015 rTotal NM Customers 2OL6 6l3il2ot7 LOl3tl2OtT Capacity Chart 2 shows the number of applications, by month, received by ldaho Power since 2012. The number of applications received by the Company has shown a steady increase over the last three years; even pior to the Company filing its request at the end of July 2017 , the Company had been experiencing growth in the number of applications 2a ln the Matter of the Application of ldaho Power Company for Approval of a New Schedule 84 - Net Metering Tariff, Case No. IPC-E-O1-39, Order No. 28951 at 12. 2s Direct Testimony of Connie G. Aschenbrenner at 13. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 13 ff L40 120 100 80 50 40 20 processed monthly. ln fact, customer growth observed thus far in 2017 exceeds the high grovuth forecast in the 2017 Report, which projects 7,032 residential net metering customers by 2022.26 Ghart 2: Net Metering Applications Received, by month (2012-20171 B. Consumer Protection. While the Company has previously expressed its concern about the potential for cost shifting to non-participants, ldaho Power is increasingly concerned that potential net metering participants are relying on inaccurate or misleading information to make decisions about investing in on-site generation. Statements by the Movants suggest that customers investing in net metering systems today believe as much: "lf ldaho Power's proposal is accepted, Auric Solar's potential customers will be placed in an untenable position of incurring a known, substantial, up- 26 2017 Report at 9; Direct Testimony of Connie G. Aschenbrenner Exhibit No. 9 at 9 IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS. 14 o t-l NN ooNN>\=co_-< (Uu I NdoNo f tlt N oN fbO r , , tr, r,, r, rrlrrl, rtllllllilh lllt N N m m (o ro m m + sf <f sf st sf (^ Lr) rn rn rn rn (o (o (o (o (o !o l'. N 1.. l'. F.dddddddddddddHdddilddddddddiddddoooooooooooooooooooooooooooooooN (\ N c{ N N N N N N N N N N N c\] N N N N N N C{ N N N N N N N Nb b .= 9; ; b .E 9; ; b .= y d; b .E g; b b a= 9; b-o! o o = =-o! c o = f -o! 6 0- = l-o-o 6 0- i f !-o o o. = f !o tr f, < : 99o tr r< < 99o q r< = 9po tr r< < 99o tr 5< < 99ouo-Oduo-odao-odocr!daa949o3,E -o33 -o33 -o33 -o33 -o ooooo rllrr front cost without knowing the long-term return."27 This statement implies that today Auric Solar's customers are left with the impression that electric rates will not change. Per an online review, this is precisely the impression Auric Solar2s left with them: "we will lock your power rate so that it never goes up again, ever." Attachment 1. The same comment suggests that ldaho Power's rates are "increasing almost 10o/o ayeat." ln fact, since 2003 ldaho Power's residential rates have experienced a compound annual growth rate of 2.83 percent. Boise City argues that "the structure of ldaho Power's Application is creating uncertainty in the industry which is currently effecting solar installation and may dramatically reduce the number of citizens who will pursue rooftop solar."2e While ldaho Power has not observed a decline in net metering applications submitted after filing its 2017 Application (see Chart 2 above), ldaho Power agrees with the Movants that uncertainty exists in the ldaho distributed generation industry. However, it is erroneous to believe that ldaho Power's filing "creates" or "injects extreme uncertainty into the market."30 Customer uncertainty has ALWAYS existed because all customer utility rates are subject to change.31 27 Auric Solar, LLC's Joinder and Memorandum in Support of ICEA's Motion to Dismiss at 7. 28 Customers have identified Auric Solar as their installer on 40 percent of the net metering applications received by ldaho Power in 2017 through October. 2s Boise City's Memorandum Joining in Support of, and Providing Comments to, ICEA's Motion to Dismiss at 4. 30 Auric Solar, LLC's Joinder and Memorandum in Support of ICEA's Motion to Dismiss at 2 and 6. 31 ldaho Code $S 61-502 and -503. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 15 Even though ldaho Power provides its customers with information that rates can change - on its website,32 the net metering application where the customer signs and acknowledges an understanding that rates can change,33 the email notifying the customer their net metering account is active, and on brochures provided to customers at trade shows, the Movants suggest that new uncertainty would be created by the establishment of new customer classes. Boise City maintains that the "adverse impact" of the Company's filing "is undeniable and could eliminate Boise's progress towards an efficient system driven by the customer's desires for renewable energy."3a To clarify, the Company's filing does not change a customer's ability to install on- site generation, nor did it request rate changes as a part of this filing. No additional uncertainty will be created because of the Commission issuing a determination on customer classifications. To the extent that installers in the Company's service area have assured customers that installing on-site generation will protect them from future increases or changes to rate structures, those statements have created a false certainty. For example, Attachmenl2 is an online post submitted by an Auric Solar installer touting 32 https://www.idahopower.com/energy/renewable-enerqv/qreen-choices/net-meterinq/: "Future changes in rates will impact the estimated net savings and payback."; https://docs.idahopower.com/pdfs/BusinessToBusiness/SolarChecklist.pdf: "The net metering service, including the current rate structure and interconnection requirements, is subject to change and current rates do not represent a guarantee of future pricing."; https://docs.idahopower.com/odfs/BusinessToBusiness/NetMeterinqFAQs.pdf: "The net metering tariff -including the current rate structure and interconnection requirements - is subject to change and does not represent a guarantee of future pricing." 33 https://docs.idahopower.com/pdfs/BusinessToBusiness/netMeterinq Application.pdf: "l understand that the net metering service - including the rate structure and interconnection requirements - is subject to change and that current rates do not represent a guarantee of future pricing." il Boise City's Memorandum Joining in Support of and Providing Comments to ICEA's Motion to Dismiss at 4. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 16 that "you can lock in what you are paying now, and power rate hikes will no longer effect you." Customers' impression that rates will never change is also fostered by their observation of other states that "grandfather" existing systems to historic rate treatment. Many expect this to occur in ldaho as well. lnstallers also perpetuate this idea, as can be seen on Auric Solar's website banner "lDAHO RESIDENTS: IDAHO SOLAR POLICY lS CHANGING. ACT NOW TO LOCK lN CURRENT RATES." Attachment 3. Yet past ldaho Supreme Court opinions suggest that grandfathering rates for existing net metering customers cannot laMully occur.35 Further, ldaho Power is increasingly aware that customers are relying on a wide range of investment payback information that could be misleading. Customer distributed generation investments are substantial; the average residential, non-tracking photovoltaic system installed in ldaho Power's service area in 2017 is7 .2 kW, a system that may cost upwards of $30,000. ldaho Power believes that customers can recoup the average investment in 15 years.36 Auric Solar's website indicates a period half as long - customers purchasing its array can achieve a Return on lnvestment of 7-10 years. Attachment 4. Evengreen Technology estimates on its website that installing solar generation equates to a savings of "7|,lkWh for life." Attachment 5. One cannot reasonably conclude that dismissing or delaying the Company's request will make any future changes easier for those that are considering becoming a 35 ldaho State Homebuilders v. Washington Water Power, 107 ldaho 415,421, 690 P.2d 350 , 356 (1984) and Building Contractors Association v. IPUC and Boise Water Corp., 128ldaho 534, 539, 916 P.2d 1259, 1264 (1996). 36 ldaho Power computed this payback period using the 1S-year residential compound annual growth rate of 2.83 percent. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 17 net metering participant in the interim. To the contrary, continued inaction perpetuates misinformation and could be especially harmful to customers who would benefit from better signals concerning net metering rates that are many months, if not years, from being established by the Commission. ldaho Power believes it is possible to convey this message to the public so that potential participants can make informed choices. Auric Solar references the following comment from a member of the public: Approving ldaho Power (lPC)'s request for a separate rate class would send a message that the rate structure for customers with on-site generation will fundamentally change, but nobody has any idea what to plug in as an assumption.3T Although this result is viewed negatively by the commenter and by Auric Solar, at least it would be an accurate reflection of the current state of net metering rates in ldaho until more accurate assumptions are developed. lt also demonstrates that this commenter clearly received the message that rate structure for customers with on-site generation will fundamentally change. Waiting to make changes until a general rate case is filed or until a technical study is complete encourages hundreds or thousands more customers to make five digit investments under a faulty premise. C. ldaho Enerqv Plan Page 9 of Order No. 32846 provided several reasons why the Commission declined to make changes to ldaho Power's net metering pricing structure - one of which was the Commission's concern "that the proposal was inconsistent with State policy as expressed in the ldaho Energy Plan . . . ." Auric Solar 37 Auric Solar, LLC's Joinder and Memorandum in Support of ICEA's Motion to Dismiss at 6 (bolded emphasis in original). IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 18 argues that the Company's case does not meet the terms of Order No. 32846 because "ldaho Power does not demonstrate how its current Application complies with the State Energy Plan any more than its 2012 application (which it did not)."s8 However, ldaho Power appropriately did not reference the ldaho Energy Plan in its Application because it no longer operates as state policy. During its 2006 session, the ldaho Legislature passed House Concurrent Resolution ('HCR") No. 623s which directed the Legislative Council lnterim Committee on Energy, Environment and Technology ("lnterim Committee") to "develop an integrated state energy plan that provides for the state's power generation needs and protects the health and safety of the citizens of ldaho" and to report its findings and recommendations to the Legislature the following year. ln the 2007 session, HCR No. 1340 adopted the 2007 ldaho Energy Plan prepared by the lnterim Committee and required that it be updated a minimum of once every five years. Five years later, the 2012 ldaho Energy Plan was submitted by the lnterim Committee and adopted by HCR No. 34.41 Like HCR No. 13 from the 2007 session, the preamble of HCR No. 34 stated that "it is the desire of the Legislature to ratify this plan, while at the same time making it a living, breathing plan with the intent that it be revisited at a minimum of once every five years." As it did five years earlier, the ldaho Legislature in HCR No. 34 resolved to "formally adopt the ldaho Energy Plan" as adopted by the 38 Auric Solar, LLC's Joinder and Memorandum in Support of ICEA's Motion to Dismiss at 5-6. 3s http://leqislatu re. idaho. gov/sessioninfo/2006/leqislation/HCR062/ a0 https://leqislature.idaho.qov/sessioninfo/2007/legislation/hcr013/ 41 https://leqislature.idaho.qov/sessioninfo/2012lleqislation/hcr034/ IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 19 lnterim Committee "as the State Energy Plan and that the Legislature update this plan at a minimum of once every five years." While the Interim Committee met in 2017 to discuss state energy issues,a2 the lnterim Committee did not adopt a new or existing version of the ldaho Energy Plan. Consequently, the matter did not come to a vote in the 2017 Legislative session. Because the Legislature has not updated the ldaho Energy Plan in more than five years, it no longer operates as state policy. lll. Establishinq Glass Composition Before Cost-of-Service ldaho Power disagrees with Boise City's argument that: "Before deciding whether there is a need for a new rate class the value of solar must be studied and ldaho Power should thoroughly examine the appropriate cost of service."43 To perform the very study Boise City discusses, net metering customers would have to be separated from standard service customers to isolate and measure their utilization of the system, a step needed to understand what costs are appropriately assigned to these customers. This is precisely the reason the Company proposed the scope and timing of its case in the manner it did - to formally recognize that these customers should be separated into different classifications based upon factors consistent with ldaho law.aa lf the Commission determines that no differences exist that warrant the creation of new customer classes for customers with on-site generation, the Company will continue to allocate costs to 42 https://leqislature. idaho.qov/sessioninfo/2017lstandingcommittees/HENV/ a3 Boise City's Memorandum Joining in Support of and Providing Comments to ICEA's Motion to Dismiss at 4. 44 ldaho State Homebuilders v. Washington Water Power, 107 ldaho 415, 420 (1984). The Commission has subsequently identified factors such as cost-of-service, quantity of electricity used, differences in conditions of service, or the time, nature, and pattern of use "as guidelines for the Commission to use to evaluate whether there is a reasonable justification for setting different rates and charges for different classes of customers." Order No. 26780. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 20 those broader customer classes as it does today and will evaluate what pricing changes may be necessary for all customers in order to mitigate the cost shift that occurs as a result of an outdated net metering policy. ldaho Power believes addressing the issue of separate classes today is the most efficient way to process this issue in the long term. There are many other rate issues that must be addressed in a general rate case proceeding and those issues must be fully vetted and litigated in a seven-month time period.a5 To suggest the Commission should ignore the issue until the next rate case because it would somehow be easier or less controversial is irrational. As other utilities in the industry have found, the issue does not become less contentious as more time passes. Asking the Commission to decide whether a segment of customers should be considered their own class prior to a general rate case is a reasonable first step that may more accurately inform potential participants' expectations of future rates. lV. Alternative Relief The ICEA asserts "the resolution of net metering costs and benefits may best be set by the same process used in the solar integration Case No. IPC-E-14-18, see Attachment 2 hereto."a6 The Movants request the Commission provide "alternate relief similar to the attached in timeline, methodology, source of inputs, and technical group to study the costs and benefits of net metering, and would request a settlement conference to discover whether the parties can agree on such a concept."aT ldaho Power finds this a5 ldaho Code S 61-622 ao ICEA's Memorandum in Support of Motion to Dismiss at 6. The City of Boise City references the IPC-E-14-18 settlement process in its Memorandum at page 2; Auric Solar's Memorandum references the settlement at page 7. 47 ICEA's Memorandum in Support of Motion to Dismiss at 6. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 21 request confusing and believes the Movants have misrepresented what occurred in Case No. IPC-E-14-18. ICEA refers to the settlement filed in Case No. IPC-E-14-18 as Attachment 2 to its Memorandum.4s By the terms of that settlement, the parties in Case No. IPC-E-14-18 agreed to immediately implement the integration charges of ldaho Power's first solar study as proposed in the Company's Application (paragraph 5) and to initiate a second solar integration study (paragraph 6) where a different solar integration methodology could be evaluated. The settlement set forth how the second solar study would be conducted (paragraph 7) and what issues would be considered (paragraph 8). At no point did the settlement in Case No. IPC-E-14-18 dismiss or delay resolution of the Company's initial Application. The opposite occurred - the settlement implemented the requested rates without delay and resolved the case so that the new study could begin. Once the settlement was accepted by the Commission in Order No. 33227, the second solar study occurred and its rates were later implemented in another proceeding, Case No. IPC-E- 16-1 1. lf the parties to Case No. IPC-E-17-13 wish to engage in settlement discussions that include separate customer classes for currenUfuture net metering participants as a precursor to a multi-utility proceeding that explores the proper value of distributed generation, ldaho Power would be pleased to facilitate these discussions. However, the establishment of separate customer classes must come first for two reasons: (1) to send a more accurate rate message to customers, and (2) to ensure that stakeholder efforts are not wasted if the Commission were to later determine that net metering participants aa The Memorandum's attachments were inadvertently omitted and subsequently filed on October 30,2017 , as an errata. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 22 and standard rate customers should remain unseparated in their current customer classes. CONCLUSION Many customers are making investments in privately owned generation under the false belief that they will continue to enjoy a rate design that was established to collect costs from a group of customers who all took service in the same way; they received all their energy from the utility. The issue at the center of this case is whether customers who generate their own energy are fundamentally different than those who do not. While the Movants disagree with the timing and content of ldaho Power's Application, any party could have initiated a case to address any or all of these issues at any time in the last five years. No party chose to do so. lt is appropriate that ldaho Power's case be allowed to move forward to a Commission determination on the merits without dismissal or substantial "restructuring"ae of ldaho Power's requested relief. ldaho Power requests the Commission deny the Movants' Motion to Dismiss and allow the Company's Application to proceed as filed and scheduled. The Commission should approve the creation of new customer classes as soon as possible to more clearly indicate to potential net metering customers and the distributed generation community that future net metering rates will not be the same as standard retail rates and to formalize classification for future cost of service studies. DATED at Boise, ldaho, this 13th day of November 2017 . LISA D Attorney for ldaho Power Company ae Boise City's Memorandum Joining in Support of, and Providing Comments to, ICEA's Motion to Dismiss at 1 and 4. IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 23 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 13th day of November 2017 I served a true and correct copy of IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Sean Costello Deputy Attorney General ldaho Public Utilities Commission 472 West Washington (83702) P.O. Box 83720 Boise, ldaho 83720-007 4 Idahydro C. Tom Arkoosh ARKOOSH LAW OFFICES 802 West Bannock Street, Suite 900 P.O. Box 2900 Boise, ldaho 83701 ldaho Gonservation League Matthew A. Nykiel Idaho Conservation League 102 South Euclid #207 P.O. Box 2308 Sandpoint, Idaho 83864 Benjamin J. Otto ldaho Conservation League 710 N.6th st. Boise, Idaho 83702 ldaho lrrigation Pumpers Association, lnc. Eric L. Olsen ECHO HAWK & OLSEN, PLLC 505 Pershing Avenue, Suite 100 P.O. Box 6119 Pocatello, ldaho 83205 _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email sean.costello@puc.idaho.qov _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email tom.arkoosh@arkoosh.com erin. cecil@arkoosh. com _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email mnvkiel@idahoconservation.orq _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email botto@idahecqoservation.orq _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email elo@echohawk.com IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 24 Anthony Yankel 12700 Lake Avenue, Unit 2505 Lakewood, Ohio 44107 Auric Solar, LLC Preston N. Carter Deborah E. Nelson GIVENS PURSLEY LLP 601 W. Bannock Street Boise, ldaho 83702 Elias Bishop Auric Solar, LLC 2310 S. 1300 W. West Valley City, Utah 84119 Vote Solar David Bender Earthjustice 3916 Nakoma Road Madison, Wisconsin 537 11 Briana Kobor Vote Solar 360 22nd Street, Suite 730 Oakland, California 94612 Gity of Boise Abigail R. Germaine Deputy City Attorney Boise City Attorney's Office 150 N. Capitol Blvd. P.O. Box 500 Boise, ldaho 83701-0500 ldaho Clean Energy Association C. Tom Arkoosh ARKOOSH LAW OFFICES P.O. Box 2900 Boise, ldaho 83701 _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email tony@vankel.net _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email prestoncarter@qivenspursley.com den@q ivenspu rslev. com _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email elias.bishop@auricsolar.com _Hand Delivered _U.S. Mail _Overnight Mail_FAXX Email dbender@earthiustice.orq _Hand Delivered _U.S. Mail _Overnight Mail _FAXXEmail @ _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email agermaine@cityofboise.orq _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email tom.arkoosh@arkoosh.com erh. cecil@arkoosh.com IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 25 David H. Arkoosh Law Office of David Arkoosh P.O. Box 2900 Boise, Idaho 83701 Sierra Club Kelsey Jae Nunez KELSEY JAE NUNEZLLC 920 North Clover Drive Boise, ldaho 83703 Zack Waterman Director, ldaho Sierra Club 503 West Franklin Street Boise, ldaho 83702 Michael Heckler 3606 North Prospect Way Garden City, ldaho 83714 Snake River Alliance NW Energy Goalition John R. Hammond, Jr. FISHER PUSCH LLP 101 South Capitol Boulevard, Suite 701 Boise, ldaho 83702 lntermountain Wind and Solar, LLC Ryan B. Frazier Brian W. Burnett KIRTON McCONKIE 50 East South Temple, Suite 400 P.O. Box 45120 Salt Lake City, Utah 84'111 _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email david@arkooshlaw.com _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email kelsev@kelseyjaenunez.com _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email zack.waterman@sierraclub.oro _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email michael.p.heckler@qmail.com _Hand Delivered _U.S. Mail _Overnight Mail_FAXX Email irh@fisherpusch.com wwi I so n @s n a keriveral lia n ce. olq dieqo@nwenerqy.orq _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email rtrazier@kmclaw,com bburnett@kmclaw.com IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 26 Doug Shipley Dale Cravyford lntermountain Wind and Solar, LLC 1953 West2425 South Woods Cross, Utah 84087 _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email douq@imwindandsolar.com dale@imwindandsolar. com 6 Executive Assistant IDAHO POWER COMPANY'S ANSWER TO THE IDAHO CLEAN ENERGY ASSOCIATION'S MOTION TO DISMISS - 27 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION GASE NO. IPC-E-17-13 IDAHO POWER COMPANY ATTAGHMENT 1 OVEHVIEW .r Verizon ?3:36 PM q g auric solar boise n * 44o/" a Danny O'Malley i :, (; ;:. l *****:vrjltl"5iti.tr lmagine if ldaho Power came to you and said, "We have a new program and we'd like to invite you to participate. lf you are willing to pay an extra $5-$10/mo, we will lock your power rate so that it never goes up again, ever. (By the way, our rates are increasing almost lOYo a year, which is about $5-$1O/mo, so you're going to pay this either way)Then, depending on the program options that you choose, after so many years we will completely stop charging you for power. Also, just to sweeten the deal, we'll plant 100 trees ayeil in your name and add at least S10,000 to your home value... lnterested?" Well, the utility isn't making that offer, but Auric is! IJ https://www.soosle.com/search?ei=dlwHWri2AYHEiAPbgL2lBw&q=auric+solar+boise&oo=auric+solar+boise&ss l=psv-ab.3..0i57k1i019.11415.14426.0.14520.24.13.0.0.0.0.390.1307.1i4i1i1.7.0....0...1.1.64.psv- ab.. 18.6. 12 16...0i 131k1i0i46i67k1i46i57k1.0.V2rJcl IVZQQ%20- %201 rd=0x54ae5441ab482877:0x1078b7f95c94a37f,1,..&sof=15 10431878588#lrd=0x54ae5441ab482877:0x1078b 7f95c94a37f, 1,,,&sof=15 10595841026 Printed November 4, 2017 REVIEWS BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION GASE NO. 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IPC-E-17-13 IDAHO POWER COMPANY ATTACHMENT 5 PV Installation Company I PV Solar Panels I EvenGreen Technology \s F.rrenGreen Page I of2 888.200.3177 : E TECHNOLOGY HOME IECHNOLOGIES ENERGY SERVICES GALTERY COMPANY GOAI IERO CONIACT f,5ctxl(HrE Lrmloltlm PV SOLAR PHOTOVOLTAIC SOLAR BASICS What tochnology can rellably gonorate electricity for decadea without omltfrng any pollutanE and save you monay in the proceas? !rn Solar electric panels, of murse. Solar electric, or photololtaic panels transform the sun's energy directly into electricity The energy generated by the panels can be used to seamlessly power your home or business, or be sent back into the grid for purchase by your utility provider One of the best aspects of solar panel technology is lhat it converts sunlight, an unlimited source of energy, into electrlcity So how doe3 thli cloan, gr€en, technology work? 1. 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