20180111Morrison Direct-Revised.pdf

RECEIVED
ldaho Public Utilities Cornmission
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MEMORANDUM
PARTIES OF RECORI)
COMMISSION SECRETARY
FROM: SEAN COSTELLO
DATE: JANUARY 11,2018
SUBJECT: DIRECT TESTIMONY OF MICHAEL MORRISON
CASE NO. IPC.E-17-13
Please find enclosed the Revised Direct Testimony of Michael Morrison in IPC-E-17-13.
The following are summaries of the revisions:
Staff made an error related to its use of the Company's DSM avoided cost rate data set. Dr.
Morrison inadvertently stated that Idaho Power's 2016 DSM avoided cost rates were used to
estimate an average net metering customer's bill in the hypothetical related to the calculation of
net metering avoided cost rates. Dr. Morrison actually used Idaho Power's 2015 DSM avoided
cost rates. See Revised Morrison Direct at 1 1, line 9;
2. Staff made a typographical error. ln Dr. Morrison's Direct Testimony, Table l, Row 4, Column 2
wasenteredincorrectlyas$l,l64.34,whentheactualvalueshouldbe$1,161.34. Seeid.atll,
line 9. As a further result of this revision, Dr. Morrison's testimony should be revised, on page
12,line2,to read'. "A portion of the $234.59 difference represents the avoided cost due to excess
energy provided by the net metering customer ($133.96), and is therefore not a subsidy . . . ." See
id. at 12,line 2; and
3. Staff made an error as it relates to the computation of net metering and non-net metering peaks.
As a result of revising and aligning the methodology used to compute both net metering and non-
net metering peaks in Dr. Morrison's testimony, the following revisions should be made:
a. Page 18, line l0 should read: "On average, net metering customers demand less power
(2.451kW) than non-net metering customers . . . ." See id. at 18, line 10; and
b. Page 19, line 2 should read: "Using data provided by the Company, we find that net
metering customers' average non-coincident peak was greater (4.508 kW) than that of
non-net metering customers . . . ." See id. at 19,line 2.
Specific details are provided in the enclosed Revised Direct Testimony. Please do not
hesitate to contact me if you have any questions regarding these changes.
Sean Costello
Deputy Attorney General
472 West Washington Street, Boise lD 83702
Telephone: [phone] Facsimile: [phone]
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in my analysis.
O. Please summarize your analysis.
A. Because resident,ial customers account for most
net metering generation capacity, and virtually all net
metering growth, my analysis focused on Residential
Schedule 1 customers. I used the Company's 2OL6 rates
f or all analyses. In order to estimat.e an average net.
metering customerrs bill under Staff's proposal, I
used 20L5 DSM avoided cost rates; however, as I indicated
earlJ-er, f bel-ieve t.hat the exact methodol-ogy for
calculating net met,ering avoided cost rates should be
det,ermined in a separate docket.. I have summarized my
analysis in Table 1.
Non-N EM
Customers
NEM Excluding
Schedule 84 Credit
N EM with Schedule
84 Credit N EM Staff Proposal
Annual
kWh Consumed
Excess kWh
Billed kWh
Bill before Excess Generation Credit
Excess Generation Credit
Final Bill
Current Rate
133.96
s 1,001.61 1,161.34 926.75 7,027.38
Consumption and bj-l1ing for average non net metering (Non-
and Net Metering (NEM) customers under current rates andStaff's Proposal.
sss
TabLe 1:
NEM)
O. Currently, what is the magnit.ude of the cost
shift. under Schedule 84?
A. Under Schedule 84, a net metering customer's
monthly excess generat.ion is subtract,ed from her monthly
consumption, and so an average net metering customer pays
substant.ially less (i926.75/yr) than she would pay
cAsE NO. rPC-E-17-13
01,/ tt/18 MORRISON, M
STAFF
77,781 13,113 13,113
0 3,444 3,444
LL,78t L3,LL3
s 1,001.61 s 7,767.34 926.7ss
N/A N/A N/A
(Rev) 11
9,669
without the Schedule 84 excess energy credit
($1,161-.34/yr) . A portion of the $234.59 dif ference
represents the avoided cost due to excess energy provided
by the neL metering customer ($133.96) , and is therefore
not a subsidy. The remaining $100.53 represents the cost
shift from an average residential net metering customer
to t.he general body of residential ratepayers. A summary
of consumption, excess generation, and billing
i-nf ormat.ion can be f ound in Table 1.
O. Does Staff's proposal eliminate a1l- intraclass
subsidies?
A. Staff's proposal eliminates all intraclass
subsidies that are due t.o the Schedule 84 Net Metering
program; however, intraclass subsidies that are not
related to net metering remain in p1ace. By virtue of
their slightly greater average consumption (Tab1e l-),
t.here would be a sma11 subsidy from average net metering
customers to non-net metering customers,' however, ds
dj-scussed earlier, this type of cost shift is not. unique
t.o net met,ering customers.
THE COMPANY I S NET ZERO CUSTOMER ANAI,YSIS
O. What are net. zero customers, and why are they
important?
A. As we have already dJ-scussed, Schedule 84
allows net metering cusLomers to "bank" energy credits
(Rev) t2CASE NO. IPC-E-17-13
01,/tr/1,8
MORRISON, M
STAFF
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O. Would Staff 's proposal correct t,he intraclass
cost shift from net zero customers to non-net meterJ-ng
customers ?
A. Yes. Under Staff's proposal, net zero
cusLomers would pay fu11 retail rates during hours in
whj-ch they are net consumers of energy, and receive
credit for excess energy at avoided cost rates. Because
avoided cost raLes compensaLe customers only for costs
that, t.hey al1ow the Company to avoid, there would be no
J-mpact to non-net metering customers.
NET METERING VS. NON-NET METERING CONST'MPTION PATTERNS
O. How do consumpt.ion patterns of net metering
customers differ from those of non-net metering
customers?
A. There is Iitt1e difference in the consumption
characteristics that cause the Company to incur fixed
costs. The primary consumption characteristics that
cause the Company to incur fixed costs are contribution
to coincident peak (Cp), group non-coincident peak (NCP),
and individual peaks. These are summarized in Table 2.
Peak et
lndividual Peak
Contribution to mCP 7:OO
ri Grou Non
N
7:N
Net Metering Group Non Coincident Peak (L2/78/2OL6, 9:00 am)
TabLe 2: Peak magnitudes and times for net metering and non-netmetering customers.
k
CASE NO. IPC-E-17-13
01,/t1,/1,8
MORRISON, M
STAFF
9.13 7L.42
2.867 2.457
2.992
4.508
(Rev) 16
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80
Non-Net Metering Peak Load by Month {2015)
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Figure 4: Non-Net Metering Peak Load by Month for Stratified
Random Sample of residential non-net metering customers.
There are some sma1I differences between the
two groups. On average, net metering customers demand
less power (2.451, XW) than non-net metering customers
(2.851 kW) at system coincident peak (,June 29Lh between
5:00 pm and 7:00 pm). Power consumed at coincident peak
is an important component of the Coincident Peak factor
used to allocate fixed generation and transmission costs
in Cost-of-Service studies. Had the Company performed a
Cost-of-Service Study, it would 1ike1y have allocated
slightly less generation and transmission plant cost to
net metering customers. Given the large fraction (942)
of residential net metering systems using solar
generation, it isn't surprising that summertime
coincident peak consumption of net metering customers is
reduced.
Class non-coincident peak is an important
component of the Non Coincident Peak factor used to
CASE NO. IPC-E-L7-]-3
0L/tr/L8
MORRISON, M
STAFF
(Rev) 18
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allocate distribution plant in cost-of-servj-ce studies.
Using dat.a provided by t,he Company, we find that net
met.ering customers' average non-coincident peak was
greater (4.508 kW) t.han that of non-net metering
customers (2.992 kW). As a group, net metering cusLomers
peak during the winter rather t.han during the summer.
On t.he other hand, individual peak loads are
important det.erminants of costs that the Company expends
on distribution p1ant, and in particular, on the costs of
secondary transformers and service drops. Average
individual net metering peaks are somewhat higher
(LL.420 kW) t.han t.hose of non-net metering customers
(e.130 kw) .
Had the Company performed a Cost-of-Service
Study, it is difficult. to determine whether it would have
all-ocat.ed more or less distribution plant to net metering
cusLomers than to non-net metering customers.
I should reiterate that these differences are
quit.e smal-I relative to the total variability among
Schedule l- customers. Had the Company conducted a Cost.-
of -Service study, it is likeIy t.hat t.hey would have
determined the differences in the overal-1 costs of
serving these two groups to be very sma1l.
CASE NO. IPC-E-17-].3
ot/1-1-/18
MORRISON, M
STAFF
(Rev) 1-9
a
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS llTH DAY OF JANUARY 2018,
SERVED THE FOREGOING REVISED PAGES FOR THE DIRECT TESTIMONY
oF MICHAEL MORRTSON, IN CASE NO. IPC-E-17-13, By MAILING A COpy
THEREOF, POSTAGE PREPAID, TO THE FOLLOWING:
LISA D NORDSTROM
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOrSE ID 83707-0070
E-MAIL:COITI
dockets@,idahopower. com
[e-mail]
ELIAS BISHOP
AURIC SOLAR LLC
2310 s 1300 w
W VALLEY CITY UT 84119
E-MAIL: elias.bishop@,auricsolar.com
ANTHONY YANKEL
I27OO LAKE AVENUE
LINIT 2505
LAKEWOOD OH 44107
E-MAIL: [e-mail]
TOM BEACH
CROSSBORDER ENERGY
2560 9TH STREET, SUITE 2I3A
BERKELEY CA 94710
E-MAIL : tomb@,crossborderenersy.com
TIMOTHY E TATUM
CONNIE ASCHENBRENNER
IDAHO POWER COMPANY
PO BOX 70
BOISE rD 83707-0070
E-MAIL: [e-mail]
caschenbrenner@ idahopower. com
MATTHEW A NYKIE,L
ID CONSERVATION LEAGUE
102 S EUCLTD #207
PO BOX 2308
SANDPOINT ID 83864
E-MAIL: [e-mail]
ERIC L OLSEN
ECHO HAWK & OLSEN PLLC
PO BOX 6l 19
POCATELLO ID 83205
E-MAIL: elo(@echohawk.com
KELSEY JAE NLINEZLLC
920 N CLOVER DR
BOISE ID 83703
E-MAIL: [e-mail]
ELECTRONIC ONLY
MICHAEL HECKLER
michael.p.heckler@, gmail. com
ZACK WATERMAN
zack. waterm an@sierracl ub. org
CERTIFICATE OF SERVICE
C TOM ARKOOSH
ARKOOSH LAW OFFICES
802 W BANNOCK ST STE 9OO
PO BOX 2900
BOISE ID 83701
E-MAIL: [e-mail]
ABIGAIL R GERMAINE
DEPUTY CITY ATTORNEY
BOISE CITY ATTORNEY'S
PO BOX 500
BOISE rD 83701-0500
E-MAIL : [e-mail]
DAVID BENDER
EARTHJUSTICE
3916 NAKOMA ROAD
MADISON WI 537I I
E-MAIL : dbender@,earttrj ustice.org
JOHN R HAMMOND JR
FISHER PUSCH LLP
PO BOX 1308
BOISE ID 8370I
E-MAIL: jrh@fi shemusch.com
RYAN B FRAZIER
BRIAN W BURNETT
KIRTON McCONKIE
PO BOX 45t20
SALT LAKE CITY UT 84111
E-MAIL: [e-mail]
[e-mail]
PRESTON N CARTER
DEBORAH E NELSON
GIVENS PURSLEY LLP
60I W BANNOCK ST
BOISE ID 83702
E-MAIL: prestoncarter@,qivenspursley.com
den@ givenspursley. com
DAVID H ARKOOSH
LAW OFFICE OF DAVID ARKOOSH
PO BOX 2817
BOISE ID 83701
E-MAIL : david(E-arkoosllaw.qom
BRIANA KOBOR
VOTE SOLAR
986 PRINCETON AVENUE S
SALT LAKE CITY UT 84105
E-MAIL: [e-mail]
ELECTRONIC ONLY
SNAKE RIVER ALLIANCE
wwil son@ snakeriveral liance. ore
NW ENERGY COALITION
[e-mail]
DOUG SHIPLEY
TNTERMOUNTAIN WIND AND
SOLAR LLC
I953 WEST 2425 SOUTH
WOODS CROSS UT 84087
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE