20180306Donohue Direct - Revised.pdf

ldaho Public Utilitie* Commission
P.0. Box W7zfi,8oise,l0 837?0-0874
RT O EIVE D
Paul Kjellander, Commissioner
(ristine 8aper, Cpgrnissioner
Eric Anderson, {e{rh&giEp r. 'ilUJl\-rir
MEMORANDUM
TO:PARTIES OF RECORD
COMMISSION SECRETARY
FROM: SEAN COSTELLO
DATE: MARCH 6,2018
SUBJECT: REVISED DIRECT TESTIMONY OT STACEY DONOHUE
CASE NO.IPC.E.I7.I3
Please find enclosed the Revised Direct Testimony of Stacey Donohue in
IPC-E-17-13. All but one of these corrections carried through from Dr. Morrison's revised
calculations to Ms. Donohue's testimony in this matter, the other is a typographical error. These
corrections do not affect Staffs underlying conclusions and recommendations in this case.
Included along with this Memorandum is Ms, Donohue's Revised Testimony.
The changes are summarized as follows:
Page Line From To
10 7 13,1 l3 13,581
l0 9 I 1,781 11,77 6
l1 l0 1,332 1,805
t2 5 $100.63 $137.25
12 7 2022 2021
t2 8 $708,000 $985,000
t2 9 0.14%0.t9%
15 t2 s8.39 $ 1 1.44
l5 l3 $ 100.63 $137.2s
l8 23 1,332 1,805
Please do not hesitate to contact me if you have any questions regarding these changes
Costello
Deputy Attorney General
I:\LegaI\ELECTRICVPC-E- I 7- I l\LettersUPCE I 7 I 3 jarties lt12.doc
472 West Washington Street, Boise l0 83702
Ielephone: [phone] Facsimile: [phone]
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residential customers with average usage.
The Company's data provided Lo Dr. Morrison shows
t.hat average neL metering customers have higher usage t.han
average standard service customers even after accounting for
their own on-site generation. Aft.er offsetting their
consumption through their own on-siLe generation, an average
net metering customer consumes 13,58L kiIowatt hour (kWH)
annually from the Company. By comparison, an average non-
net metering customer consumes LL,776 kWh annually from the
Company.
Nevertheless, Lhe Company then applied t.he effects
of a 5kW solar photovoltaic (PV) system to the average
residential customer usage to create its "strawman" future
net metering customer.
Because any customer with below average usage
receives a subsidy from any customer with above average
usage, applying a 6kW solar PV system Lo average usage
significantly reduced usage below what is observed with
actual net metering customers in the sample the Company
provided to Dr. Morrison.
Based on this methodology, the Company calculated
a $444 subsidy per its future "strawman" net metering
customer. This estimate is highly speculative because it is
not based on observed actual usage of net metering
customers.
CASE NO. IPC-E-17-13
03/06/t8
DONOHUE, S. (Rev) 10
STAFF
The Company then multiplied this figure across its
projected growth in net metering customers and determined
that the future cost shift could range from $755,000 to $1.9
million over the next five years.
O. How should the cost shift have been cal-culated?
A. Future net metering customer usage shou1d have
been forecast using actual net metering customer
consumpt.ion.After offsett.ing their consumptJ-on from the
Company wit.h their own on-sit.e generation the average net
metering customer uses 1,805 kWh more energy annually than
an average residential customer.
O. Did Staff conduct its own analysis of the cost
shift?
A. Yes. Staff does not believe that power consumed
by the customer at the time it. is produced by the customer's
own generation should be included in the cost shift
calculatj-on. The only transactj-ons that should be
considered are those that happen at the meter: 1) the power
supplied by the Company, and 2) excess generation supplied
by the customer.
The Company is currently paying net metering
customers retail rates for the energy net metering customers
push across the meter and back onto the grid. Any payment
amount that exceeds the cost the Company would have j-ncurred
to acquire that energy is a subsidy to net metering
CASE NO. IPC.E-17-13
03 / o6 /1-8
DONOHUE, S. (Rev) 11
STAFF
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customers.
By applying avoided cost rates to the excess
generation on1y, Dr. Morrison calculated the current subsidy
from the body of standard service ratepayers to an average
net metering customer to be 5137.25 annua11y.
Using the Company's most aggressive forecast for
net metering growth, the cost shift in 2021- would be about
$985,000. Assuming that residential class revenue remains
stable at $5L5 mi11ion, the cost shift represents 0.19
percent of the annual residenLial class revenues.
O. Why do you bel j-eve the cost shif t should be
addressed even though it is relatively sma11?
A. The cost shift should be addressed because it is
caused by an inappropriate valuation of energy delivered to
the grid by net metered residential customers and not, for
example, by certain inevitable subsidies created by
consumption patterns, which cannot be controlled by the
Company or the Commission.
O. Company witness Tatum claims that "Cost shifting
is generally accepted and regulators nationwide have
attempt.ed to address it." Tatum Direct at L4. Please
respond to the suggestion t.hat. the Idaho Commission should
fo11ow the lead of other states on this issue.
A. I have not reviewed the consumption data, cost
shift calculations, and evj-dence presented in other states.
cAsE NO. rPC-E-l_7-l_3
03/06/1,8
DONOHUE, S. (Rev) 12
STAFF
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only eliminates the cost shift caused by excess generation,
which is the only way that net metering customers are
different from standard cusLomers as a c1ass. OLher cost
shifts assocj-ated with other-than-average bi1Ied consumption
remain, just as they remain for any other standard service
residential customer.
O. How will this impact current net metering
customers?
A. Using the Company's DSM avoided cost rate as a
placeholder for the revised excess generation credit, Dr.
Morrison calculated that. these two changes would increase
the average net metering customer's bill by $1L.44/month,
which is $1-37.25 annuaIly. This amount exactly offset,s the
current subsidy received by net metering customers described
earlier.
O. The Company states that the current net metering
pricing structure does not adequately reflect the cost to
serve net metering customers who use grid services every
hour of the month, but pay less than their respectlve share
of costs when generation is valued at the fu11 retail rate
and netted against consumpt.ion on a monthly bas j-s.
Application at 3. Does St.aff's proposal addresses that
concern?
A. Yes. By adjusting the credj-t for excess
generation from the retail rate to an avoided cost rate and
CASE NO. IPC-E-17-13
03/06/18
DONOHUE, S. (Rev) 15
STAFF
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Do you agree with this assessment?
A. No. A customer who installs a net meLering syst.em
is almost identical to a customer who installs an energy
efficiency measure. An energy efficiency measure only
delivers energy reduction in the hours that it is
functionj-ng, which is the same as a net metering system.
For example, if a customer chooses to override the
efficiency setting on a smart thermostat, the device does
not provide savings during that time and the grid is cal1ed
upon to serve higher demand.
a. On page 29 of her testimony, Ms. Aschenbrenner
claims Ehat a net metering customer's usage is not similar
to a standard service residential customer who has little
monthly kWh usage. Do you agree?
A. No. To defend this statement, the Company
provides a chart showing the differing load patterns between
net metering and standard service residential customers on a
single day. One day of load pattern data does not support a
claim about. mont.hly usage. Further, Ms. Aschenbrenner's
statement assumes that net metering customers are 1ow usage,
but, Dr. Morrison's analysis shows that after offsetting
their consumption with t.heir own on-site generation, the
average net metering customer uses 1,805 kWh more annual
energy from the Company than non-net meterj-ng customers.
O. Ms. Aschenbrenner admits on page 35 of her
CASE NO . IPC-E- 1-7 -1,3
03/06/18
DONOHUE, S. (Rev) 18
STAFF
CERTIFICATE OF SBRVICE
I HEREBY CERTIFY THAT I HAVE THIS 6TH DAY OF MARCH 2018,
SERVED THE FOREGOING REVISED PAGES FOR THE DIRECT TESTIMONY
OF STACEY DONOHUE, 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
BOISE ID 83707-0070
E-MAIL: [e-mail]
dockets@idahopower. com
C TOM ARKOOSH
ARKOOSH LAW OFFICES
802 W BANNOCK ST STE 9OO
PO BOX 2900
BOISE ID 83701
E-MAIL : [e-mail]
erin. ceci I @arksash.sart
ELIAS BISHOP
AURIC SOLAR LLC
2310 S 1300 W
W VALLEY CITY UT 84I 19
E-MAIL: [e-mail]
ANTHONY YANKEL
I27OO LAKE AVENUE
UNIT 2505
LAKEWOOD OH 44107
E-MAIL: [e-mail]
TOM BEACH
CROSSBORDER ENERGY
2560 9TH STREET, SUITE 213A
BERKELEY CA 94710
E-MAIL: [e-mail]
TIMOTHY E TATUM
CONNIE ASCHENBRENNER
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL : ttatum(Erdahoparryqr. com
caschenbrenner@ idahopower. com
MATTHEW A NYKIEL
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: [e-mail]
KELSEY JAE NUNEZLLC
920 N CLOVER DR
BOISE ID 83703
E-MAIL: kelsey@kelseyj aenunez.com
ELECTRONIC ONLY
MICHAEL HECKLER
michael.p.heckler@ email.com
ZACK WATERMAN
zack. waterman@sierrac I ub. ore
CERTIFICATE OF SERVICE
ABIGAIL R GERMAINE
DEPUTY CITY ATTORNEY
BOISE CITY ATTORNEY'S
PO BOX 500
BOISE rD 83701-0s00
E-MAIL: [e-mail]
DAVID BENDER
EARTHJUSTICE
3916 NAKOMA ROAD
MADISON WI 53711
E-MAIL: [e-mail]
JOHN R HAMMOND JR
FISHER PUSCH LLP
PO BOX 1308
BOISE ID 8370I
E-MAIL: irh@fr com
RYAN B FRAZIER
BRIAN W BURNETT
KIRTON McCONKIE
PO BOX 45120
SALT LAKE CITY UT 841I1
E-MAIL: [e-mail]
[e-mail]
PRESTON N CARTER
DEBORAH E NELSON
GIVENS PURSLEY LLP
60I W BANNOCK ST
PO BOX2720
BOISE ID 8370I
E-MAIL: [e-mail]
den@ givenspursley. com
BRIANA KOBOR
VOTE SOLAR
986 PRINCETON AVENUE S
SALT LAKE CITY UT 84105
E-MAIL: [e-mail]
ELECTRONIC ONLY
SNAKE RIVER ALLIANCE
wwilson@ snakeriveralliance. ore
NW ENERGY COALITION
[e-mail]
DOUG SHIPLEY
INTERMOLINTAIN WIND AND
SOLAR LLC
I953 WEST 2425 SOUTH
WOODS CROSS UT 84087
E-MAIL : [e-mail]
CERTIFICATE OF SERVICE