20180126Tatum Rebuttal.pdf

R=CEIVED
?li3 J,lH 26 Pll lr: 28
,, r','1ri=l=#o?',}1'5t r o N
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OE THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHOR]TY TO ESTABLISH NEW
SCHEDULES FOR RESIDENT]AL AND
SMALL GENERAL SERVICE CUSTOMERS
WITH ON_SITE GENERATION.
IDAHO POWER COMPANY
REBUTTAL TESTIMONY
OF
TIMOTHY E. TATUM
CASE NO. IPC_E_17_I3
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a. Please state your name.
A. My name is Timothy E. Tatum.
O. Are you the same Timothy E. Tatum that
previously presented direct testimony?
A. Yes.
O. Have you had the opportunity to review the
pre-fiIed direct testimony of the City of Boise's witness
Stephan L. Burgos; the Idaho Cl-ean Energy Association,
Inc.'s ("ICEA") witnesses Kevj-n King, Michael Leonard, and
Stephen White; the Idaho Conservation League's ("ICL")
witness Benjamin J. Otto; Sierra Club's witness R. Thomas
Beach; the Idaho lrrigation Pumpers Association, Inc's
("fIPA")witness Anthony J. Yankel; the Snake River AII-iance
and NW Energy Coalition's (*SRA/NW Energy") witness Amanda
15 M. Levin; Vote Solar's witness Briana Kober; Auric Solar,
IdahoL6 LLC's ("Aurlc Solar") witness Elias Bishop; and the
11 PubIic Utilities Commission ("Commission") Staff's
1B ( "Staff" )
A.
O.
testimony?
witnesses Michael Morrison and Stacey Donohue?
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Yes, I have.
What is the purpose of your rebuttal-
A. The purpose of
provlde cl-arification and to
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testimony is to
various arguments
("Parties") in
my rebuttal
respond to
and Staff
TATUM,
Idaho
REB
Power
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Company
1 their direct testimony. My testimony is comprised of five
2 sections.
3 In Section I, I explain the reasoning for the
4 Company's timing of the case and provide the Commission
5 with the Company's view on a number of important changes
6 occurring in the electric industry and associated
7 regulatory policy considerations.
B In Sections II and III, I clarify the Company's
9 request in this case and respond to a number of issues
10 raised by Parties that are more approprj-ately addressed as
11 part of subsequent proceedings or are otherwise not within
12 the scope of this case and address other pertinent issues
13 raised by Parties.
1,4 In Section IV, I reaffirm the Company's position
15 that the different. load service requirements and usage
76 characteristics of residential and smal-l- general service
l1 (*R&SGS") customers who lnstaII on-site generation justify
1B the establishment of a separate customer class. I support
19 the Company's position with a summary of the results of
20 additional analyses performed by the Company that
2L demonstrate the l-oad service requirements and the pattern
22 of use clearly distinguish customers with on-site
23 generation from customers without on-site generation.
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Idaho
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Power
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In Section V, I respond to the Staff's proposal to
modify the compensation structure for net metering
customers.
I. TIMING OE THE CASE A}ID OTHER STRATEGIC CONSIDERJATIONS
1. Electric Industry Evolution
O. Why is now the right time for the Commission
to make a policy determinat.ion on customer cl-assification
for customers with on-site generation?
A. Idaho Power Company ("Idaho Power" or
"Company"), like other util-ities across the country, is
witnessing and experiencing a transformation of the
e1ectric industry. Historically, the vertically integrated
utility has been called upon to provide fully bundl-ed
services to its customers -- including generation,
transmission, and distribution services and Idaho Power
L6 has provided those one-way services to 1ts "full
71 requirements" customers for over 100 years. In recent
experienced changing
the services available to
1B years, however, Idaho Power has
79 customer preferences related to
20 them. This transformation has resul-ted in more engaged
customers requi-re2I
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segments of customers
nearly instantaneous
than ever before
informati-on related to their energy
aboutusage
their
today
and use that information to make decislons
energy consumption. One important
are asking themselves is about the
quest.ion customers
decision to invest
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in privately-owned
rather take service
that is, this segment
from the same bundled
customers require.
O. How has
transformation?
generation. Some customers
as a "partial
of customers
services the
requirements"
is choosing
rest of the
today would
customer;
to move away
Company's
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Idaho Power responded to this
A. Idaho Power has responded by improving its
infrastructure to provide more robust information to its
customers through the deployment of Automat.ed Metering
Infrastructure and implementation of onl-ine services like
My Account. But more work needs to be done. Idaho Power
sees a growing need to modernize its transmission and
distribution grid to accommodate the rapldly growj-ng
distributed generation (*DG") capacity coming onl-ine. As
technol-ogical advancements are made and innovative business
model-s emerge, the grid will likely l-ook very different in
the future than it does today. Given the rapid adoption of
DG in Idaho Power's service area, it is no longer justified
to delay important. policy decisions, such as the question
of customer cl-assification brought to the Commission by the
Company in this case.
O. Several- parties urge the Commission to delay a
decision on customer classifications. What is your
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TATUM, REB
Idaho Power
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Company
25 response to that?
1 A. Operating in the status quo regarding rate
2 structure wil-l- not position Idaho Power to keep pace with
3 the transformation of the electrical- system that is
4 currently underway. The outdated rate structure in place
5 today for on-site generation sends a fal-se signal to
6 customers; that is, reduclng net consumption (sometimes to
J zero, but not always) reduces the cost to serve
8 commensurately. This signal is inaccurate and needs to be
9 addressed. Informing customers today that the pricing
10 structure in place for full- requirements customers does noL
11 work in the long-term for partial requirements customers is
12 the first step. Ensuring customers are making decisions
13 based on better information will all-ow the market to
L4 advance those technol-ogies that are competitive from a cost
15 standpoint, not those that compete based on subsidies.
16 O. Are there benefits associated with addressing
71 this issue today instead
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adoption to date make it easier to address issues like
"grandfathering" -- the contentiousness of this issue will
of waj-ting?
are several.Lower level-s ofA
only grow as
education and
Iower leveIs
metering with
communicate to
Yes, there
of adoption.
vol-umetri-c
more customers adopt. S j-mil-ar1y, customer
communication are easier to facilitate with
Sending a signal- today that "net
rates is not sustainable" will
those customers considering investing 1n
TATUM, REB
Idaho Power
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1 sol-ar or other DG that changes in
that send clear
rate design wifl occur.
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Establ-ishing
enabfe growth
rates price signals wil-l-
of DG in a non-subsidized manner.Delaying a
eas ierdecision on customer classifications will not get
with the passage of time.
2. Grandfathgl+ng
O Did the Company request "grandfathering" j-n
its proposal?
A No.
10 O. Can you please clarify the Company's request
as it relates to a transition period?
A. The Company requested that existing R&SGS net
metering customers remain on Schedule 84 for a period of
time, under the existing rate structure and compensation
method, and transition in the future to the proposed new
schedul-es over some period of years. The Company
understands that future rate changes will impact the
economics of decisions customers have made in years past
and is sensitive to those impacts. The Commission has, in
other cases, implemented modest transition periods, and the
Company's position is that if the Commission chooses to
implement a transition period in this case, it may be
appropriate.
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Idaho Power
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1 3. Delay Decisions UntiJ. a General Rate Case
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Should the Commission delay a decision until- a
general rate case (*GRC") ?
No. Tdaho Power has not
it is unknown when it wi-l-1 do
2, 2A7l ,
and CEO
Q3 earnings release
20lL and
November
Pres ident
thoughts
Anderson
fil-ed a GRC si-nce
so. In IDACORP's
cal-l-, Idaho Power
asked for hisDarrel Anderson was
on the Company's near-term rate activity. Mr.
responded that:
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IIdaho Power] would have to signal early
in '18 if we're going to do something for
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as continued strong economic acti-vity and
if we can continue to manage the expenses
Iike we have done thls year, we would
hope to not have to go in.1
Because the Company does not have definite near-term
plans to file a GRC, Idaho Power's requested refief in the
2011 Application purposefully does not impact customer
rates but will position the Company to make appropriate
rate proposals for Commission, customer, and stakehol-der
consideration when that time comes.
II. ISST'ES OUTSIDE THE SCOPE OF THIS PROCEEDING
u What was the Company's request in its
26 Application flfed in thls case?
1 IDACORP Inc. Earnings Calf transcript, November 2, 2011, p. 1.
http: //www.idacorplnc.com/-/media/FiIes/tttoacorp/conference-ca-Ifs/ida-
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Idaho Power Company
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usg transcript 2011 -ll -02.pdf
t A. In this case, the Company has requested (1) to
2 close Schedule 84, Net Metering Service to new R&SGS
3 customers with on-site generation, (2) establ-ish new
4 cl-asses for R&SGS customers with on-site generation, (3)
5 require smart inverters as defined by the Institute of
6 El-ectrical- and Electronic Engineers ("fEEE") for all new
7 on-site generation lnstal-l-ations, and (4) establish a
8 generic docket at the conclusion of this case to explore
9 the benefits and costs that on-site generation brings to
10 Idaho Power's system.
11 O. Please explain why you feel- there are several-
1,2 issues raised by Parties that are not within the scope of
13 this case.
14 A. The Commission has provided clear direction as
15 to the scope of thls case. In Order No. 33946, the
76 Commission denied ICEA's motion to dismiss, and also denied
77 ICEA's alternate recommendation to decide the value of DG
18 prior to addressing reclassification of net metering
19 customers. The Commlssi-on stated that it is "reasonabl-e
20 for us to reexamine classification now instead of
2L waiting . ."2 Much of the testimony filed by Parties
22 diverts discussion to issues that are not relevant to the
23 Company's relatively limited request in this case. The
24 vast majority of the topics covered by the Staff and
2 Order No. 33946, p. 6 (emphasj-s added)
TATUM, REB
Idaho Power
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1 intervenors go beyond the scope of this docket. Testimony
2 from Clty of Boise, fCEA, ICL, SRA/NW Energy, IIPA, and
3 Auric Solar appears to ignore the Commission's Order No.
4 33946 by continuing to recommend that the Commission deny
5 Idaho Power's Application and decide the value of DG prior
6 to addressing reclassificatj-on of net metering customers.3
7 In Order No. 33946, the Commission denied ICEA's motion to
B dismiss, as well- as denied ICEA's alternate recommendation
9 to decide the value of DG prior to addressing
10 reclassification of net metering customers.
11 1. Genera]' Rate Case Vs. Standalone Issue
I2 O.Several- partiesa have suggested that customer
13 classification must be determined as part of a GRC and not
74 as a standalone lssue. Ms. Kobor even goes as far as to
15 say that it
definitions,
CASC
Idaho law to
is "not approprlate to modify customer class
L6 nor rate design outside of a general rate
T1 ,r5 Do you believe that it is consistent with
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19 standafone issue outside of a GRC?
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3 King DI, p. 71 , l-l-. 22-23, White DI, p. 9, 1. 12-73,. Otto DI, p
10, l-l-. 12-78; Beach Df, p. 6, 11. 9-79; Yankel DI, p. 6, ff. 20-27;Levln DI, p. 26, Il- . 1,6-23; Kobor DI, p. f 6, l-l-. 1-4 ; Morrison DI, p.22.11. 16-20; Donohue DI, p. 22, t. 24 through p. 23, l-. 1.
determine customer classification as a
a Kobor DI, p. 28, 11p. 22, 1. 12.
1-B; Beach DI, p. 39, 11. 2L-22; Levin DI,
s Kobor DI, p. 55, l-. 19 through p. 56,1. 1.
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Idaho Power
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A.Yes. Based upon my understanding of the
resul-ts of an internal 1egal review,
with Idaho faw to determine customer
standalone issue, outside of a GRC.The Idaho Legislature
specifically authorizes6 the Commissj-on upon hearing to
, or the entireinvestigate a single rate,or classification
tariff schedul-e and establ-j-sh new rates, classificatj-ons,
or practices.
2. Class Cost-of-Service Study Prerequisite
o. rr
of-service study
classification.
has been suggested thatT a new class cost-
("COSS") is required to determine customer
Do you believe that a new COSS is required
13 in order to determine customer classification?
74 A No. A COSS is to i-nform any future
it would be consistent
classification as a
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nece s sary
Company ischanges
address
the cost
serve this segment
characterlstics of
are different and
in rate design. The
rate design as
to serve these
requesting to
Regardless of
if the cost to
not
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part of this case.
customers, and even
of customers was the same, the usage
R&SGS customers with on-site generation
require a separate rate structure in
reasonable opportunity to recover the
those customers.
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6 rdaho Code S 61-503.
7 Kobor DI, p. 49, 11. 5-6.
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3. Benefits/Costs Study Prerequisite
O.Several partiess suggest it
understand
is necessary to
conduct the generic docket, to the benefits and
costs that DG interconnection brings to the electric
system, prior to a determination on rate classifications in
the current case. How do you respond to that?
A. The questlon at the center of this case is
whether customers with on-site generation are fundamental-1y
different than ful1 requirements customers. I bel-ieve the
suggestj-on by parties that the Commission cannot make a
decision on customer classification without cost and
benefits being evaluated is an attempt at stalling. The
determj-nation of customer classificatlon is not dependent
on the cost to serve those customers, nor 1s it dependent
on any benefits a customer's excess net energy exports may
provide to the system. Determining the costs and benefits
of on-sj-te generation is not relevant when answering the
question about fundamental differences between a customer
who generates some or all of their own energy and one that
does not.
O. Why does the Company belleve it is critical
for the Commission to issue a determinati-on on customer
I Burgos DI, p. 8J, l-l-. 7L-72,' Beach DI,
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1I. 1-3; Klng DI, p. 18, II. 10-11; Otto DI, pp. 6, l-I. 9-79; Levin direct Testimony, p. 21,f6, II. l-4.
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23 classes prior to opening a generic docket to establish a
TATUM, REB
Idaho Power
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1 compensation structure for customer-owned generation that
2 reflects both the benefits and costs that on-site
3 generation j-nterconnection brings to the el-ectric system?
4 A. Having the answer to customer classifications
5 is necessary because that determination wil-I inform the
6 scope of the generic docket. Eirst , if the Commission
7 declines to adopt new customer cl-asses, there is no need to
B evaluate the costs specific to net metering customers --
9 they wil-l- be assigned costs as part of the standard service
10 customer c1ass. Second, if the Commission decl-ines to
11 adopt new customer cl-asses, a pricing discussion al-so
12 becomes irrelevant; if the Commission determj-nes net
13 metering customers are no different than standard service
74 customers, they will contj-nue to pay the same rate
15 structure as standard service customers.
76 O. Does the Company have a recommendatlon for the
11 format of the generic docket?
18 A. Yes. I believe the process should lncl-ude a
L9 series of workshops held with al-l- interested stakeholders
20 in the state, ds a continuation of prior stakeholder
2l workshops that the Company has facilitated.
to
The purpose of
establish a
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the initial workshop could be for parties
framework for analyzing costs and benefits
to the
that customers
electric system.24 with on-site generation contribute
25 The Company and other stakeholders would bring studies or
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recommendations demonstrating possible rate deslgn and
compensation structures. The Company and stakeholders
would al-so soliclt feedback about the types of studies and
considerations they feel the parties should focus on. A
second workshop coul-d be held for parties to discuss how
the COSS should be conducted to inform the appropriate rate
design for customers with on-site generation. A11 parties
would then complete the requested studies and submit them
for all- parties to review. A third workshop may be
necessary to discuss the results of the studies to help
inform what rate design each participating utility could
file in a future GRC. Eol-l-owing the final workshop, there
would be an opportunity for public comment. If parties
reach agreement, a settl-ement stipulation woul-d be drafted
and submitted to the Commission to seek approval.
4. Effect on Private So1ar Industry
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L1 O. A number of intervenors contend that the
18 Company's proposal would have a negative lmpact on the
19 rooftop solar industry.s How do you respond to that
20 contention?
27 A. These arguments either ignore or misconstrue
22 the Commission's rol-e, which is to establish just and
e Burgos DI, p. 10, Il-. 2-3; King DI, p. \4,11. 8-10; White DI,p. 9,11. 8-10; Leonard DI, p. I,11. 74-76; Bi-shop DI, p. 2,1I. 8-9
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reasonabfe rates and regulation.l0 The rooftop solar
industry should stand on its own without the benefit of the
subsidies embedded in existing rate designs. Customers who
want to participate in private generation have the right to
continue to do so under the Company's proposal.
The intent of the net metering service is to provide
a fair and sustainabl-e option for customers to offset their
own usage with
believe it is
facil-itate the
on-site generatlon. Idaho Power does not
the responsibillty of its customers to
expansion of prlvate business interests
11 through subsidies provided by an outdated pricing
72 structure. That is, Idaho Power does not befieve it is in
13 the best interest of its customers to ignore, and l-eave in
\4 pIace, a pricing structure that fails to coll-ect costs from
15 a segment of customers at the expense of other customers.
L6 If as a matter of policy, the Commission wishes to
Ll continue to promote the adoption of DG through fj-nancial
18 incentives or other subsidies, this goal is best
79 accomplished through direct and transparent mechanisms and
20 not through rate design. Intervenors have provided no
27 justification for why roof top solar industry
22 considerations should factor into this customer
23 cl-assification proceedlng. The Commission should reject
TATUM, REB 14
Idaho Power Company
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these arguments, as they clearly assign a higher prlority
for the financial wel-1-being of an indlvidual industry over
the pursuit of just and reasonable rates for Idaho Power's
customers.
IIT. OTHER ISST'ES RAISED BY PARTTES
1. Customer Choice
a. Do you agree with intervenors' claims or
suggesti-ons that the Company's proposal will el-iminate
customer choice for solar in Idaho?11
A No. Idaho Power supports customers who want
to generate a portion of their own energy. Under the
Company's proposal, any customer who chooses to install on-
sj-te generation wil-l- continue to be provided the same
opportunity to do so. To be cl-ear, the Company is not
seeking to eliminate rooftop sol-ar, or any type of on-site
generation, as an option avai-Iabl-e to its customers. The
Company's proposal woul-d take an important step toward
establishing a framework in which a customer's decisj-on to
i-nstall his or her own generatj-on system can be informed by
the actual economics of doing so without hidden subsidies
that exist within an outdated rate design and compensation
22 structure.
11 Kobor DI, p. 50, I. 20 through p. 51, 1. 1; White Df, p. 4,111, p. 8, t. 4; Beach DI, p. 74, lI. 6-7.
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O. How does the Company's proposal preserve
customer choice while stil-I making progress toward
increased fairness in the aSsignment of cosLs among
customers ?
A. The Company's proposal recognizes that, under
the status euo, the current pricing structure for R&SGS is
il-l-suited to appropriately recover the costs associated
with the distinctly different usage characteristics of
R&SGS customers with on-site generation. The Company's
proposal seeks to address this issue gradually and
thoughtfully with input from customers, regulators, and
other stakeholders. The Company supports the establishment
of separate classes for R&SGS customers with on-site
generation as a reasonable flrst step. This first step
does not in any way impact the economics of customer
investment in on-site generation in the near-term, but
rather sends a cl-ear signal to customers that future
pricing and compensation structures for R&SGS customers
with on-site generation may be modified.
The .assertions that the Company's proposal in this
case may l-imit or eliminate customer choice appear to be
incorrectly premised on the bel-ief that, absent the
Company's proposal, customers shoul-d be confident that the
pricing and compensation structure under net metering wiII
not materially change in the future. That is precisely the
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misconception the Company's proposed initlal step is
intended to address. The Company's proposal will serve to
better inform customer choice going forward and wiIl do
nothing to limit customers' energy choices.
2. Rate Certainty
u Several witnessesl2 suggest that the Company's
proposal creates additional uncertainty that wil-l-
negatively impact
bel-ieve that the
future solar installations. Do you
Company's
customers
proposal creates more
uncertainty for
site generation?
considering an investment in on-10
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72 A.No. Given the growing nationwide debate over
13 would continue even i-f the Idaho
74 the issue at this time. By
15 making a filing, the Company intends to provide more
clarity to customers who are considering investing in
private DG.
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22 A No. I bel-ieve the contrary is true
23 prolonging the decj-sion on customer classification could
12 Burgos DI, p. 9,11-. 12-13; Bishop DI, p. 2,1. 15; King DI, p
20, II. 13-14,'White DI, p.5, l-l-. 6-9.
net metering, uncertainty
Commission did not address
O. Would delaying the Company's
the uncertainty and make future changes in
those who are considering an investment in
generation?
TATUM,
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Power
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the potential for misinformation and coul-d be especially
harmful to customers who would benefit from more accurate
economic signals concerning on-site generation.
3. Fixed Cost Adjustnent Mechanism
o.Some parties, including the Commission Staff,13
point out that the Company is not financially
meteri-ng because of its Fixed Cost Adjustment
you agree with this assessment regarding the
harmed by net
(*FCA"). Do
It-A/
10 A. Generally, yes. However, it should be noted
11 that the Company has not presented any concerns in this
!2 case regarding financial impacts to Idaho Power resultlng
13 from net metering. The FCA mechanism is designed to allow
14 the Company to recover the majority of the fixed costs of
15 providing service to R&SGS service customers, regardless of
16 the overall l-evel of energy consumption per customer. In
71 the case of net metering, dny shortfal-l in fixed cost
18 recovery that may result from the current net meterlng rate
79 structure would be tracked and recovered from al-l- R&SGS
20 customers annually through the FCA. While it is correct to
2l point out that the FCA largely mitigates any financial
22 impact that net metering would otherwise have on fdaho
23 Power, it is al-so important to recognj-ze that the FCA
24 facilitates annually any cost shifting that may exist
13 Donohue DI, p. 3, l-I . l1 -27; Levin DI, p. 24, II
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between net metering customers and non-net meterlng R&SGS
customers between GRCs.Therefore, any
metering serviceshifting related to net
future ECA collections that would have otherwise existed.
IV. EVIDENCE TO SUPPORT SEPARATE CUSTOMER CI.ASSES
What do you believe is the most important
issue at the center of the case?
I belleve that there is one relatively
1lmited, but important,
case, which is to answer
policy issue to resofve in this
the question: "Do the different
reduction in cost
would reduce
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11 load servj-ce requirements and usage
L2 R&SGS customers who install on-site
13 separate and unique rate structure
74 opportunity to recover the costs of
15 customers?"
76 O. Does the Company
l-oad service requirements and
1B R&SGS customers who instalf
characteristics of
generation justify a
to provide a reasonabl-e
serving those
continue to believe that the
the usage characteristics of
on-site generation are
customers without on-site
l1
L9 R& SGS
20 the establishment of a separate
2t
22 A. Yes. The Company maintains its position that
23 the Ioad service requirements and the pattern of use of
24 R&SGS customers with on-site generatj-on are distinctly
25
different than that of
generation and justify
customer cl-ass?
TATUM, REB
Idaho Power
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Company
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different from that of R&SGS customers without on-site
generation.
O. Did Parties agree with Idaho Power that R&SGS
customers with on-site generation are different than
standard R&SGS customers and therefore requj-re a separate
customer class?
A. While ICL witness Mr. Ottola acknowfedged that
customers with on-sj-te generation are different in some
respects, generally, other partiesls suggested that the
Company dld not provide sufficient evidence to justify that
R&SGS customers with on-site generation are different than
R&SGS customers without on-site generation.
O. Did the Company perform additional- analyses in
response to suggestions that the Company did not provide
sufficient evidence to justify that R&SGS customers with
on-site generation are different than R&SGS customers
without on-sj-te generation?
A. Yes.
1. Pattern of Usage
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20 O. What analyses did
27 evaluate the pattern of use of
22
1a otto DI, p. 4, 1. 11.
the Company perform to
residential customers with
9-10; Kobor DI, p. 32, ff. 18-33 through p
tr]trJ1 r. J.
1s Levin Df , '7, Il-.
33, l. 5; Donohue DI, p.
TATUM, REB
Idaho Power
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on-site generation and for resldentlal customers without
on-site generation?
A. The Company studied the l-oad factor, the load
profile, the system-coincident demands ("SCD") and the non-
coincident demands ("NCD") for resldential customers wlth
on-site generation and for residential customers without
on-site generation.
O. Please summarize the results of the additional-
analyses performed by the Company that demonstrate the load
factor, the load profile, the SCD and the NCD for R&SGS
customers with on-site generation are different than R&SGS
customers without on-site generation.
A. Although Mr. David M. Angell will provide the
detail-s of the additional analyses performed by the
Company, as well as the statistical results of the
analyses, the results can be summarized as fol-lows:
o The Company's load factor analysis confirmed
that residential customers wlth on-si-te
generation have notably lower load factors than
residential customers without on-site
generation.16
o The Company's l-oad profile analysis showed that
customers with on-site generation had a hlgher
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16 Angell REB, p. 4, 1. 20 through p. '7, 1. 9
TATUM, REB 2I
Idaho Power Company
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demand for energy during the evening and
nighttime hours than customers without on*site
generation and their rate of change in usage
during the day is larger than for customers
without on-site generation. In addition, the
load profj-1e analysis shows that energy for
customers with on-si-te generation fl-ows in both
directions. The excess energy flowing to the
utility is greater in spring and sunrmer months.17
The Company's analysis of the SCD showed that
the SCD of customers with on-site generatj-on is
l-ower from April through September than the SCD
of customers without on-site generation but
higher from October through March.18
The Company's analysis of the NCD showed that
the NCD of customers with on-site generatj-on is
higher than
for aII L2
customers without on-site generation
months of the year. 1e
Company's analyses, does
that suggests that R&SGS
In additlon to the
20 the Company have other evidence
27
a10
11
72
13
74
15
76
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1i Angell REB, p
18 Angefl REB, p
1e Angeff REB, p
6 through p. 13, l- . 10 .
10-17.
7-15.
12,
1A
15,
I
rl_ .
r1.
TATUM, REB
Idaho Power
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customers with on-site generation are different from R&SGS
customers without on-site generation?
A. Yes. Dr. Ahmad Faruqui of the Brattl-e Group
has also conducted empirical analysis using Idaho Power
data. In his rebuttal- testimony, Dr. Earuqui shares the
results of his analysis which find that the differences are
quite significant.20
2. Load Service Requirement
a)How does the load service requirement of a
10 customer with on-site generation differ from that of a
11 standard service residential customer?
L2 A. A customer with on-site generation is a
13 partial requirements customer. Because partial
L4 requirements customers generate all or some of their own
15 annual energy needs, the utility provides only certain
16 services that standard servj-ce customers require like
l1 providing capacity. But the utility is also required to
18 provide different services that standard service customers
79 do not use fike receiving excess net energy on a non-
20 firm, Lf , ds, and when avall-abl-e basis.
2L O. Is it necessary to place partial requlrements
22 customers in a separate customer class?
23 A. Yes. Current rate designs were hi-storically
24 developed to recover costs from full requirements customers
20 Earuqui REB, p. J,1. 14. - p. 15,1. 6
TATUM, REB
Idaho Power
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Company
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on a fully bundled, vol-umetric basis. This approach has
been viewed as fair and reasonable when applied to
customers who rely on the utility to meet all their
electric needs. However, it is neither fair nor reasonable
to apply fully-bundled, volumetric rates to a group of
customers who choose to take unbundled services and make
investments whose sole purpose is reducing or elimlnatlng
the volume of energy taken from Idaho Power.
V. STAFF' S MODIFIED COMPENSATION STRUCTT'RE FOR NET
METERING CUSTOMERS
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22
o.
understanding
shift. "21
A.
Please provide an overview of your
of Staff's proposal to "correct the cost
Staff witnesses Morrison and Donohue recommend
a modification to the compensation structure under Schedule
84, Net Metering Service, that wou1d el-iminate the current
practice of nett.ing consumption and generation on a monthly
basis, and instead move to an hourly netting approach.
Staf f 's proposal woul-d al-so assign a value to hourly net
excess generation equal to an avoided cost-based rate
instead of the full retail- rate.
23 O
24 cost shift is
25 center of the
Do you believe Staff's proposal to correct the
a reasonable solution to the issue at the
case?
21 Donohue DI, p. L3, l. 2A.
TATUM, REB
Idaho Power
Z4
Company
1 A. I believe Staff's proposal represents a
2 reasonable step toward correcting the referenced cost
3 shift,' however, it fal-ls short of a complete solution.
4 While Staff's proposal does address part of the cost shift
5 issue by adjusting the compensation for excess net energy,
6 it ignores that the rate design applied to these customers
7 does not provide for an equitable assignment of the costs
B of utility service.
9 Q. Does the Company support the adoption of the
10 Staff's proposal to modify the compensation structure for
11 customers with on-site generation as an interim step?
72 A. Yes. The Company does support adoption of the
13 Staff's recommendation for a modifi-ed compensatlon
74 structure for customers with on-site generation, because it
15 does represent meaningful movement toward addressing the
1,6 cost shifting at i-ssue in this case. However, the Company
77 does not believe adoption of Staff's modification should
18 prevent the establlshment of separate classes for R&SGS
19 customers with on-slte generation. Whil-e Staff's proposal
20 may effectively address the appropriate level- of
2L compensation for net excess generation, the rate design
22 fl-aws that exist by applying volumetrlc rates to net
23 metering customers would remain unaddressed. The Company
24 bel-j-eves that the establishment of separate classes for
25
TATUM,
Idaho
REB
Power
LJ
Company
1 R&SGS customers with on-site generation, in conjunctj-on
2 with Staff's proposal, would represent important steps
3 toward fair and sustai-nable rate and compensation
4 structures for this unj-que group of customers.
5 Q. If the Commission chooses to implement Staff's
5 proposed compensation structure to be applicable to the new
7 cl-assifications of R&SGS customer with on-site generation,
8 what val-ue should be assigned to the net excess generation?
9 A. The Company bel-ieves that the proxy value of
10 the DSM Alternative Cost used by Staff in its analysls
11 would represent a reasonabl-e interim value for the net.
72 excess generation. Should the Commission adopt a specific
13 DG val-uation methodology fol-l-owing the concl-usion of the
74 workshop process recommended earlier in this testimony, the
15 Company recommends that the Commission transition to
16 applying that resul-ting value on a going-forward basis.
77 Vr. CONCLUSTON
1B O. Pl-ease summarize your testimony.
A. An j-ncreasing number of Idaho Power's
customers are choosing to invest in technologies that all-ow
them to j-nteract with the Company's electric system, or the
grid, in new and innovative ways. In response to these
changes, the grid is transforming from a one-way service
provider to an interactive, enabling platform for the
interconnection of customer driven technologies. In
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TATUM,
Idaho
REB
Power
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support of this transformatj-on, it is essential that the
Company's pricing structures al-so transform to align with
new ways customers are choosing to take services from the
grid.
In this case, the Company has presented sufficient
evidence that the load service requi-rements and usage
characteristi-cs of R&SGS customers who install on-site
generation are
without on-site generatlon. These differences justify the
provide a10 establishment of a separate rate structure to
11 reasonable opportunity to recover the cost-of-service from
72 those customers. Taking steps today to recognize these
13 important differences will- pave the way toward mai-ntaining
L4 a fair-priced and sustainabl-e servj-ce offering into the
15 future.
16 O. What is your reconrmendation for the
L7 Commission?
18 A. The Company recommends that the Commj-ssion
19 issue an order authorizing the following: (1) closure of
20 Schedule 84, Customer Energy Production Net Metering
27 Service, to new
site generation,
cl-assif ications
(2) establishment of two new
23 of customers applicable to R&SGS customers
24 with on-site generation that request to interconnect to
25 Idaho Power's system on or after the date of the
different than that of R&SGS customers
service for Idaho R&SGS customers wlth on-
ZZ
TATUM, REB
Idaho Power
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Commission's order in this case, 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
orderlng the Company to amend its applicable tariff
schedules to require the instal-l-ation and operation of
smart inverters for al-1 new customer-owned generator
interconnections within 60 days followlng the adoptlon of
10
an lndustry standard
defined by the IEEE,
at the conclusion of
defini-tion of smart inverters as
establishing a generation val-ue
reflects both the benefits and
commencement of a generic docket
CASC with the purpose of
for customer-owned DG that
costs that DG
(4)
this11
72
13
74 interconnection brings to the electric system, and (5)
15 adoption of Staff's proposed compensation structure to be
16 applicable to the newly establ-ished rate classifications
L1 referenced in subpart (2).
18 O. Does this conclude your testimony?
L9 A. Yes, it does.
20
27
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23
24
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TATUM, REB
Idaho Power
2B
Company
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9
ATTESTATION OF TESTTMONY
STATE OE IDAHO
County of Ada
I, Timothy E. Tatum, having been duly sworn to
testify truthfully, and based upon my personal knowledge,
state the following:
I am employed by Idaho Power Company as the Vice
Presldent of Regulatory Affairs and am competent to be a
witness in this proceeding.
I declare under penalty of perjury of the faws of
the state of Idaho that the foregoing rebuttal testj-mony is
true and correct to the best of my information and belief.
DATED this 26th day of January, 2078.
10
11
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a1LL
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23
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26
21
€
Timothy Tat
SUBSCRIBED AND SWORN to before me thls 26th day of
January, 2018.
0ry Publ for Idaho
iding at:'Adoh"
COIIIMfSSAON E res: @b"bo
Not
Res
My
TATUM, REB 29
Idaho Power Company
tf0Trf.?l
acrrutc
(Da-
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OF ID
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t
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)
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.to
trtlllr
(i,
tlt
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 26th day of January 2018 I served a true and
correct copy of REBUTTAL TESTIMONY OF TIMOTHY E. TATUM upon the following
named parties by the method indicated below, and addressed to the following:
Commission Staff
Sean Costello
Deputy Attorney General
!daho Public Utilities Commission
47 2 W est Wash i ngton (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
ldahydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite 900
P.O. Box 2900
Boise, ldaho 83701
ldaho Conseruation League
Matthew A. Nykiel
ldaho Conservation League
102 South Euclid #207
P.O. Box 2308
Sandpoint, ldaho 83864
Benjamin J. Otto
ldaho Conservation League
710 North 6th Street
Boise, ldaho 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
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erin. [e-mail]
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Anthony Yankel
12700 Lake Avenue, Unit 2505
Lakewood, Ohio 44107
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Auric Solar, LLC
Preston N. Carter
Deborah E. Nelson
GIVENS PURSLEY LLP
601 West Bannock Street
Boise, ldaho 83702
Elias Bishop
Auric Solar, LLC
2310 South 1300 West
West Valley City, Utah 84119
Vote Solar
David Bender
Earthjustice
3916 Nakoma Road
Madison, Wisconsin 537 11
Briana Kobor
Vote Solar
986 Princeton Avenue S
Salt Lake City, Utah 84105
Gity of Boise
Abigail R. Germaine
Deputy City Attorney
Boise City Attorney's Office
150 North Capitol Boulevard
P.O. Box 500
Boise, ldaho 83701 -0500
ldaho Clean Energy Association
Preston N. Carter
Deborah E. Nelson
GIVENS PURSLEY LLP
601 West Bannock Street
Boise, ldaho 83702
Sierra Club
Kelsey Jae Nunez
KELSEY JAE NUNEZLLC
920 North Clover Drive
Boise, Idaho 83703
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den@o ive nspu rsley. com
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x Email kelsey@kelseyiaen u nez.com
Tom Beach
Crossborder Energy
2560 9th Street, Suite 213A
Berkeley,CA 94710
Zack Waterman
Director, ldaho Sierra Club
503 West Franklin Street
Boise, ldaho 83702
Snake River Alliance
NW Energy Goalition
John R. Hammond, Jr.
FISHER PUSCH LLP
101 South Capitol Boulevard, Suite 701
P.O. Box 1308
Boise, ldaho 83701
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 84111
Doug Shipley
lntermountain Wind and Solar, LLC
1953 West2425 South
Woods Cross, Utah 84087
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6
Ki berly T l, Executive Assistant
Michael Heckler
3606 North Prospect Way
Garden City, ldaho 83714