20170804Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM:SEAN COSTELLO
DEPUTY ATTORNEY GENERAL
DATE: AUGUST 4,2017
SUBJECT:IDAHO POWER COMPANY'S APPLICATION FOR AUTHORITY TO
ESTABLISH NEW SCHEDULES FOR RESIDENTIAL AND SMALL
GENERAL SERVICE CUSTOIVIERS WITH ON-SITE GENERATION,
CASE NO.IPC.E-I7-I3,
On July 27,2017, Idaho Power Company ("ldaho Power" or "Company") applied to
the Commission for authority to establish new schedules for residential and small general service
("R&SGS") customers with on-site generation. The Company claims new schedules are needed
because its existing rate design inaccurately reflects the costs and benefits of serving customers
that have on-site generation. Idaho Power also asked that the Commission convene a prehearing
conference. under Rule 2ll (discussing Prehearing Conferences) to establish procedure for this
case. With its Application, the Company attached its clean and proposed Tariff l0l Schedule 6.
8, Rule H-1, 54, 55,63,66,72,81, 84, 91, 98, and Direct Testimonies by David M. Angell,
Connie G. Aschenbrenner, and Timothy E. Tatum.
THE APPLICATION
The Company states that in recent years the number of its customers choosing on-site
generation and, therefore, taking bi-directional services, has outpaced the Company's extant net
metering rates, leading to unfair cost shifting between certain customer classes. The Company
states that "[t]he rates currently charged to net nretering customers were not designed to reflect
the value of the bi-directional service being provided to them by the grid nearly every hour of
every day, nor do they accurately reflect any potential benefits of on-site generation."
Application at l. Idaho Power maintains that due to this value imbalance and related pricing
DECISION MEMORANDUM I
inaccuracies, it is time, in line with the electric utility industry nationwide, to reassess the
appropriateness of net metering policies established decades ago. Id. at l-2.
The Company proposes to correct claimed unfair cost shifting by amending its net
metering rate design to remove rate design based incentives for net metering and facilitate the
expansion of on-site generation that is scalable and sustainable into the future. Id. at2.
Specifically, Idaho Power asks that the Commission:
l. Close Schedule 84 to new service for R&SGS customers with on-site
generation after December 3 l, 2017:
2. Establish two new classes for R&SGS customers with ou-site generation
that ask to connect to Idaho Power's system on or after January 1,2018,
with no pricing changes at this time;
3. Amend all applicable Company tariff schedules to require the installation
and operation of smart inverters for all new customer-owned generator
interconnection within 60 days following the Institute of Electrical and
Electronic Engineers adopting of an industry standard definition of smart
inverters: and
4. When this case is over. open a generic case to establish a compensation
structure for customer-owned distributed energy resources.
Id. al 15-16. The Company f'urther requests that the Commission convene a prehearing
conference to establish proper procedure for the case. Id. at 16.
STAFF RECOMMENDATION
Staff recor,rmends the Commission issue a Notice of Application and deadline to
intervene, with a 21-d,ay intervention deadline. Staff also recommends the Commission direct
Staff to convene an informal prehearing conference for the Company, Staff, and any intervenors
to discuss a schedule to process this case and other issues that may be raised by the parties. After
the informal prehearing conference occurs, Staff would report back to the Commission so
another Order can issue setting fuither procedure, including a public hearing for customers.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and deadline to intervene,
with a 2l-day intervention deadline?
')DECISION MEMORANDUM
Does the Commission wish to direct Staff to convene an infomral prehearing
conference for the Company, Staff, and any intervenors to discuss a schedule to process this case
and other issues that may be raised by the parties?
Jr"^,ada{
Sean Costello
Deputy Attorney General
M:IPC-E-17-13 sc
JDECISION MEMORANDUM