20180102Comment.pdf

Diane Holt
From:[e-mail]
Sent:Saturday,December 30,2017 1:03 PM
To:BeverlyBarker;Diane Holt;Matthew Evans
Subject:Case Comment Form:Lisa Hecht
Name:Lisa Hecht
Case Number:IPC-E-17-13
Email:[e-mail]
Telephone:[phone]
Address:4920 E Sagewood Dr
Boise ID,83716
Name of Utility Company:Idaho Power
Comment:First,I thank the Idaho PUC Commissioners and staff for this opportunity to provide input on Idaho Power
filing IPC-E-17-13.
I am a decades-long Idaho Power shareholder,residential net-metering customer,semi-retired Hewlett-Packard
electrical engineer and program manager,and mother of two 20-somethings,who wants to leavethem a habitable
planet;I write from all of these perspectives.In its filing,Idaho Power refers to my Letter to the Editor to the Idaho
Statesman.I,therefore,wanted you to be aware of this context with respect to my comments.
First (Idaho Power's Requests),I will briefly respond to each of Idaho Power's requests.
Secondly (Refuting Flaws in Idaho Power's Arguments),I will specifically refute what I believe are flaws in Idaho Power's
arguments,and support those with which I agree.
Thirdly (A Better and Fairer Approach),I will provide,based on my research,a better,fairer approach for Idaho Power's
customers,shareholders,and citizens of Idaho.
Idaho Power's Requests
(1)closure of Schedule 84,Customer Energy Production Net Metering,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 Idaho Power's system on or after January 1,2018,with no pricing changesat this time,
(3)acknowledgement that smart inverters provide functionalitythat is necessary to support the ongoing stability and
reliability of the distribution system by ordering the Company to amend its applicable tariff schedulesto require the
installation and operationof smart inverters for all new customer-owned generator interconnections within 60 days
followingthe adoption of an industry standard definition of smart inverters as defined by the institute of Electrical and
Electronic Engineers,and
(4)commencement of a generic docket at the conclusion of this case to establish a compensation structure for
customer-owned distributed energy resources ("DER")that reflects both the benefits and costs that DER interconnection
brings to the electric system.
In requesting items (1)and (2)before item (4),Idaho Power is putting the cart before the horse,and cherry-picking.It is
unethical and backward for Idaho Power to ask to modify existing customer classes *before*it has established net-
metering in the context of ALL customer rates,and included both impacts AND BENEFITS of net-metering customers.
This they can do by applying data available to them from the smart meters the PUC approved years ago to identify
overall opportunities for cost reduction and rates fair to all customers.Most Idaho Power net-metering customers utilize
solar PV,and a number of studies have been conducted on the value of solar,including meta-studies and studies in 23
states (1)as well as by the NREL (2)nationally.The Idaho PUC should include these in any analysis of costs and benefits;
especially since Idaho Power referred to "costs and benefits of net-metering",but failed to include the BENEFITS.It
would be best if an independent contractor were to suggest categories for the resource values of distributed resources,
which could be openly debated and agreed upon;next step would be to assign values to each of these categories.
Furthermore,net-metering customers are not only a tiny percentage (0.2%)of current customers but also a very small
percentage of total generation and load.As I shall later establish,even if the number of net-metering customers grows
10-fold,the impact of that on retail electricity rates,per a study by Lawrence Berkeley National Labs (3),may actually be
to *lower*rates,and in any case,is likely to be an *order of magnitude*lower than the impact on rates of capital
expenditures such as the proposed Boardman-to-Hemingway ("B2H")transmission line!The very busy PUC staff need to
prioritize items with the greatest impact on Idaho Power's customers,as is their mandate.This is not one of them.
Requests (1)and (2)should be immediately dismissed.
As for item (3),I wholeheartedlyagreethat net-metering customers should use smart inverters to support the grid's
voltage-and frequency-regulation;in fact,I suggested this in a phone call to Scott Gates at Idaho Power.However,
Idaho Power needs to do this in such a way as not to prohibit net-metering;this means that smart inverters meeting
IEEE standards must be easily available in Idaho,not prohibitivelyexpensive,with the sale not restricted by Idaho Power.
I would furthermore suggestthat,at the same time,Idaho Power be required to provide smart-metering that allows
simultaneous net-value calculations of both net-metering generation and usage.It is currently extremely difficult to
determine and validate the value of the net-value I have provided Idaho Power as a net-metering customer;and
researchshows that the closer to instantaneous that net-value calculation is done,the fairer and more accurate it is.
Therefore,if item (3)is granted,it should include not only the customer protections for smart inverter procurement but
also requirements for Idaho Power to enable smart meters (current or future models)to enable and provide
instantaneous net-valuing of energy value provided by customers.Currently,Idaho Power net-metering customers
"bank"and then "withdraw"kWh,a measure of energy,but not the *value*of that energy when generated or used.I
will say more about this in later sections!
Refuting Flaws in Idaho Power's Argument IPC-E-17-13,section I.Background includes the following items:
Item 1 establishesthat Idaho Power maintains a "power grid".
Item 2 explains the nature of net-metering and quantifies the number of net-metering customers as of the filing of IPC-
E-17-13(this was later updated to correct the year 2021to 2022).
"The Company had 1,468 active and pending net metering systems in its Idaho service area as of June 30,2017.The
Company projects that the count of residential customers with on-site generation could be as high as 7,032 customers
or as low as 6,171 customers by 2022,with the median growth rate resulting in 6,816 residential customers with on-site
generation."
Note that even the updated customer numbers constitute a tiny fraction,about 0.2%,of Idaho Power's residential
customers,and they are small users,especially as compared to Commercial and Industrial customers.
Per a study done by Lawrence Berkeley National Labs,"Putting the Potential Rate impacts of Distributed Solar into
Context",current Idaho solar PV penetration is about0.2%,and even if it were to grow 10-fold by 2030,penetration will
still only be 2%,much less than the 5-15%generally considered to be the point at which any significant impact is seen by
utilities.Most importantly,the projected impact on retail electric rates is ±0.2¢/kWh,versus +1.3 to +3.6¢/kWh for
capital expenditure ("CapEx")projects such as the proposed Boardman-to-Hemingway transmission line.Thus,
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distributed solar PV may actually LOWER retail electricity costs,and in any case,its impacts on rates are an order ofmagnitudelowerthanCapExprojects.Thus,the PUC can safely ignore this for now,and learn from other locations andutilitiesinotherstates.The PUC can begin to study value-of-distributed-generation results from 23 other states and by
NREL,and incorporate this into future rate design questions.In addition,it remains to be seen how B2H's integration ofwindandsolarprojectsmayimpactgriddesignandelectricrates.
Item 3 claims that "Idaho Power's current net-metering pricing structure for R&SGS customers with on-site generationdoesnotreflectthecostofservingthosecustomers,nor does it appropriatelyreflect the benefits and costs ofinterconnectingcustomer-owned on-site generation to Idaho Power's system."
A number of assumptions underlie this argument.Below are assumptions I see and the issues with them.
First,item 3 refers to "benefits and costs",but nowhere in their filing did I find either an enumeration of or accountingfor,the benefits of net-metering.A claim such as is made in item 3 must include benefits,not merely costs;otherwise,how can Idaho Power or the PUC claim that it reflects the benefits and costs?A study of net-metering distributedgenerationvalue,especially of solar,must be included in order to establish the facts.
Item 3 also makes the implicit assumption of sunk costs for which we must continue to pay.But the larger concernshouldbepotentialfutureexpendituresintoa19th-or 20-century grid that become *stranded costs*in a 21st-centuryenergygridreality.Solar and wind costs have dropped 100-fold since the 1970's,and that trajectory continues.IdahoPowerhastheopportunitytoinvestinasmartgridthatmaximizesbenefitsandreturnstoitsshareholders,customers,and itself.To miss that opportunity would be a very expensive mistake.Avista,a neighboring utility,has reported that,
by investing in smart-grid technology,it has avoided millions of hours of outages.The same smart-grid that avoidsoutagesisalsokeytointegratingdistributedenergyresources(DERs),and saves both the utilityand its customerssignificantmoneyanddowntime.
Item 4 asserts that "...customers with on-site generation *may*pay less than their respective share for...grid-related
services...."
Among other problems,the benefits of avoided transmission loss and locational and time benefits of energy generated
are not accounted for,so this is little more than a supposition.
Using the IPUC-approvedTime-of-Day values to show the relative time-value of the energy I generated versus used,Icalculatedthatthenettime-value I would have provided to Idaho Power in a net-zero annual kWh situation would beabout$130.This amounts to a little over $10 in addition to the $5/month flat fee I now pay and does not include thewholestackofvalueDERscanprovide,as identified in aforementioned studies.I will gladly make my spreadsheets,assumptions,and calculations available to the IPUC.
Item 5 asserts that "the company believes that...future cost-shifting...will increase."
This statement assumes it has been proven that cost-shifting is occurring;that has not been proven,and cannot beprovenuntilDERvalueisestablishedinanopen,inclusive process.
Idaho Power then uses a graph to attempt to show that since net-metering customers have different usage curves fromotherresidentialcustomers,they should be put in a different class.
The variation within residential customers itself is large,including 3rd-shift and rural vs.urban customers,so should
we create a class for all of these?Adding new customer classes adds administrative cost and should not be donearbitrarily.
Also,it is the *impact*on electric rates that matters,not the existence of different usage patterns.The LBNL report towhichIreferredearlierarguesthatdistributedsolarmayactuallyloweroverallelectricrates,and that its impact,in any
case,is an order of magnitude below CapEx projects such as the B2H project proposed by Idaho Power.
A Better and FairerApproach
First,this filing is completely out-of-order;also,the impact of this 0.2%of the customer base is de minimus and will
not likely be relevant for a decade or more.The value stack of DER generation,which is missing from the filing,should
be established as a first step,not as the last step.
IPUC commissioners need to prioritize the cases they address.The Lawrence-Berkeley National Lab (LBNL)has
published a study,"Putting the Potential Rate Impacts of Distributed Solar into Context".It found that,for Idaho,the
probable range of impact to retail electricity rates by 2030 (assuminga 10-fold capacity increase in Idaho's net-
metering)would be ±0.2 cents/kWh,versus +1.3 -3.6 cents/kWh for *capital expenditures*,such as the proposed
Boardman-to-Hemingway transmission line or scrubbers on their coal plants to minimize air pollutants to allow
continued operation.This demonstrates that this issue should be a very low priority to commissioners,and can safely
be deferred.
At such time as net-metering comprises 5%or more of the customer base,a third-party should propose a resource
value stack of DER assessments,in an open,transparent way to be debated by all before the IPUC.Idaho Power should
simultaneously begin collecting real-time,two-way usage and generation data (not netted);ideally,several years of data
should inform this study.That data and an agreed-upon resource value stack can be used in a general rate case to
assess fair valuation and costs for both utilityand ALL customers.
Idaho Power currently requires net-metering customers to leavethe AC Cool-Credit and Time-of-Day programs,both
of which I participated in prior to net-metering.There is no reason these should not still be of benefit to lowering idaho
Power's costs.For example,I could run my AC summers in the early afternoon,and turn it off later afternoon or allow it
to be cycled off by Idaho Power.This would lower costs for all customers,by shifting usage from more expensive
summer peak to cheaper off-peak hours.This should be included in any net-metering rate-case studies.
Thirdly,the IPUC and Idaho lawmakers should identify laws and rate-making rules by which Idaho Power and its
customers are incented to invest and compete in a 21st-century clean-energy economy,including distributed
generation,smart grids,AMI,customer home and auto battery storage,and enhanced energy efficiency and
conservation.For example,well-sited,distributed renewable energy could reduce the need for,and cost of,some T&D,
which comprises over half IPC's costs.This will lower customer costs,provide continuing revenue to fairly compensate
Idaho Power for grid services,and reward both net-metering customers and Idaho for clean,21st-century energy
generation.Performance-based regulation is one pathway to take us there.
Lastly,I remind the IPUC that Idaho Power is granted a monopoly under the condition that it serves the public.It must,
therefore,be held to high standards of proof in making assertions by providing open,verifiable numbers that show its
actions would benefit,and not harm,its customers!
References
1.SolarCost-Benefit Studies,SEIA,https://www.seia.org/initiatives/solar-cost-benefit-studies
2.Value of Solar:Program Design and Implementation,NREL,https://www.nrel.gov/docs/fy15osti/62361.pdf
3.Putting the Potential Rate Impacts of Distributed Solar into Context,LBNL,https://emp.Ibl.gov/publications/putting-
potential-rate-impacts
4.On grid modernization,gap widens between leading states,laggards,Utility Dive
https://www.utilitydive.com/news/on-grid-modernization-gap-widens-between-leading-states-laggards/413028/
Unique Identifier:72.24.147.220
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