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HomeMy WebLinkAbout20191113Opening Brief.pdfSEffi* an loAcoRP companv LISA D. NORDSTROM Lead Counsel I nordstrom(Aidahooower.com RECEIVED /0l9li0Y l3 Pll l:52 November 13,2019 VIA HAND DELIVERY Diane Hanian, Secretary ldaho Public Utilities Commission 11331 W. Chinden Boulevard Building 8, Suite 201-A Boise, ldaho 83714 Re:Case No. IPC-E-18-15 Study of Costs, Benefits, and Compensation of Net Excess Energy Supplied by Customer On-Site Generation ldaho Power Company's Opening Brief Dear Ms. Hanian: Enclosed for filing in the above matter please find an original and seven (7) copies of ldaho Power Company's Opening Brief in the above matter. lf you have any questions about the enclosed documents, please do not hesitate to contacl me. Very truly yours, K.-AV1-r*r.*--> Lisa D. Nordstrom Enclosures LDN:kkt RECEIVED LISA D. NORDSTROM (lSB No. 5733) ldaho Power Company 1221 West ldaho Street (83702) P.O. Box 70 Boise, ldaho 83707 Telephone: (208) 388-5825 Facsimile: (208) 388-6936 lnordstrom@ idahopower.com r:: i:cli I 3 Pl'l l: 52 )i C , -:i-: Attorney for ldaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY TO STUDY THE COSTS, BENEFITS, AND COMPENSATION OF NET EXCESS ENERGY SUPPLIED BY CUSTOMER ON. SITE GENERATION ) ) ) ) ) ) ) IDAHO POWER COMPANY'S OPENING BRIEF CASE NO tPC-E-18-15 TABLE OF CONTENTS I. INTRODUCTION 1 2 2 5 7 II. BACKGROUND A. Case No. IPC-E-17-13 B. Case No. IPC-E-18-15 III. ARGUMENT A. The Commission Should Apply the Terms of the Settlement Agreement to All Customers with On-Site Generation, lncluding Current Customers, to Avoid Undue Discrimination Under ldaho Code $ 61-315 7 B. Current Customers with On-Site Generation Have Received Ample Notice that Net Metering Rates are Subject to Change.... 1. Notice from Commission Orders. 2. Notice from the Company's Website, Customer Generation Application, and Communications.............. 3. Notice as Required by the Residential Solar Energy System ..11 ..14 17 Disclosure Act. ..............................20 C. The Transition Period Mitigates lnvestment Recovery lmpacts for Existing Participants 20 D. Criteria to Become and Remain an Existing On-Site Generation Customer 22 22 22 1. Vintaging Start Date. .. 2. Grandfather End Date 3. Grandfather Existing System Size and Premise Location. .. .. ....23 rv. coNcLustoN.. .......... . .. ....................23 IDAHO POWER COIVIPANY'S OPENING BRIEF - i I. INTRODUCTION Since net metering's inception in 1983, the standard rate paid has failed to properly recover the costs incurred to serve customers with on-site generation. ln 2001, the ldaho Public Utilities Commission ("Commission"), its Staff ("Staff'), and ldaho Power Company ("ldaho Power" or "Company") shared the belief that the resulting cost shift was tolerable up to a 2.9 megawatt ("MW") capacity limit, but that it would need to be addressed in the future.l More than 5,581 participants,2 52 MW, and 18 years later, this rate design issue remains unresolved. ln addressing the proper valuation of Net Excess Energy,3 the Settlement Agreement filed in this case constitutes a significant step in establishing a proper compensation structure for Schedule 6, Residential Service On-Site Generation ("Schedule 6"), and Schedule 8, Small General Service On-Site Generation ("Schedule 8"), customers until the Company and stakeholders can address rate design in a subsequent proceeding. ldaho Power recognizes that an immediate change to the new rates could impact some residential and small general service net metering customers, and therefore, supports moving these customers to their cost of service gradually. However, the Company does not believe ldaho law supports developing separate rates for new and 1 ln the Mafter of the Application of ldaho Power Co. for Approval of a New Schedule 84-Net Metering Taritt, Case No. IPC-E-01-39, Order No. 28951, at 12 (Feb. 13, 2002) ("The Commission recognizes that in the program,rve approve today for Schedules 1 and 7 customers, the full cost of the program may not be born[e] by participants. Raising the cap, we realize, increases the level of subsidization. ") 2 As of November 1 , 2019, ldaho Power has 4,832 actave customers with on-site generation taking service under Schedules 6 and 8 with 55.329 MWof generation capacity. An additional 749 applications with 15.008 MW of generating capacity were pending completion. IDAHO POWER COMPANY'S OPENING BRIEF - 1 3 As defined by the proposed tariff Schedules 6 and 8 filed as Attachments 2 and 3 to the Motion to Approve Settlement Agreement filed October 11,2019, Net Excess Energy is the amount of energy generated, as measured in kilowatt-hours, by the customer in excess of the customer's energy requirements less any energy supplied by the Company during each hour, summed over the course of the Billing Period. existing on-site generation customers under these circumstances. Distinctions between customers based solely on the date the individual became a utility customer have not been upheld by the ldaho Supreme Court on appeal and subsequently have been disfavored by the Commission. For this reason, ldaho Power asks the Commission to transition the compensation for Net Excess Energy received by all on-site generation customers, regardless of when the customer's generation system became operational, to the Export Credit Rate+ over the eight-year period contemplated in the Settlement Agreement. II. BACKGROUND A. Case No. IPC-E-17-13. On July 27 ,2017, ldaho Power applied for authority to establish new schedules for residential and small general service customers with on-site generation, initiating Case No. IPC-E-17-'13.5 ldaho Power explained that its existing retail pricing structure did not accurately reflect the cost to serve its on-site generation customers, who require services from the Company but also meet some of their energy needs with on-site, customer- owned systems such as rooftop solar.s On May 9, 2018, the ldaho Public Utilities Commission ("Commission") issued Order No. 34046. The Commission found it was "time to distinguish a class of customers that uses the grid for standard energy import and use, from a class of customers that uses a Per the methodology set out in Section lV.B. of the Settlement Agreement, the Export Credit Rate would be based on the value of exported energy from all solar photovoltaic customers in each class and applicable to all distributed generation resources taking service under Schedules 6 and 8. 5 ln the Matter of the Application of ldaho Power Co. for Authoity to Estabrsf, New Schedules for Residential and Small Gen. Serv. Cuslomers with On-Site Generation, Case No. IPC-E-1 7-13, Order No. 34046, at 1 (May 9,2018). 6ld IDAHO POWER COMPANY'S OPENING BRIEF - 2 7 ld. a|16. s ld. at 16-17 (emphases added) s ld. at 17 -18. 10 See ld at 18. 11 /d. at 18. IDAHO POWER COMPANY'S OPENING BRIEF - 3 the grid to both import and export energy."7 The Commission explained that its "analysis of the history of the Company's on-site generation program reveals an unfairness in how current and future on-site generation customers avoid fixed costs[,]" because "[t]he ability these customers have to 'net out' or net to zero their electricity use causes them to underpay their share of the Company's fixed costs to serve customers, and this inequity will only increase as more customers choose on-site generation."s Further, the Commission observed that a "bi-directional" on-site generation customer ''can push energy back to the grid whenever its generation source and timing allows it to, with the Company having limited control over the use and distribution of this somewhat unpredictable resource."e This results in "load and usage characteristics" that are unique to on-site generation customers, including "increased volatility in demand and load factors, excess net-energy exportation in the spring and summer, and more volatility in contributions to the Company's peak(s)."!o The Commission observed that these characteristics affect "circuits, voltage management, islanding, and load cycle adjustments," making it more difficult for ldaho Power "to forecast resource availability and load."11 Based on these distinguishing class characteristics shared by on-site generators who export to the grid, the Commission granted ldaho Powels request to separate on-site generation residential customers and small general service customers into newly-proposed Schedules 6 and 8, respectively.l2 ln Case No. IPC-E-17-1 3, ldaho Power did not request - and the Commission did not order - any immediate changes in ratemaking treatment for on-site generation customers.l3 Nevertheless, the Commission did express significant concern that ldaho Power's customers may currently be receiving price signals regarding on-site generation investment from the industry that are "not in the public interest."la The Commission observed that "incorrect price signals related to rate or rate design changes may be trivialized[,]" notwithstanding the fact that "[r]ates change, . . . rate design evolves, and no utility rate can be locked or considered to exist ad infinitum[,]" since "tariff rates are not contracts."15 Therefore, the Commission directed ldaho Power to initiate a new docket to conduct a comprehensive study of the costs and benefits of on-site generation on the Company's system, as well as proper rates and rate design, transitional rates, and related issues of compensation for net excess energy provided as a resource to ldaho Power.16 The Commission stated that "current and prospective on-site generators will be better positioned to analyze the costs and benefits of buying, installing, and maintaining an on- site generation system as a result of this Order."17 12 ld. al31 , see id at 15-19 13 /d. at 16. 11 /d. at 19. 15 See ld. 16 ld. al22-23,31 ln the Mafter of the Petition of ldaho Power Co. to Study the Cosfs, Benef,ts, and Compensation ofNet Excess En ergy Supplied by Customer On-Site Generation, Case No. IPC-E-18- 15, Order No. 34460, at 1 (Oct. 17, 2019). 17 Order No. 34046 at 19 IDAHO POWER COIVPANY'S OPENING BRIEF - 4 Finally, in light of recommendations by two intervening parties to grandfatherl8 the rate structure for existing customers,ls the Commission found it "appropriate to more fully consider the nature and effect of allowing a transitional period for customers who have already invested in on-site generation" in the new docket.2o On this topic, the Commission noted the following B. Case No. IPC-E-18-15. On October 19, 2018, ldaho Power petitioned to initiate Case No. IPC-E-18-15 to comply with the Commission's directive in Order No. 34046.22 ldaho Conservation League, ldaho lrrigation Pumpers Association, ldaho Hydroelectric Power Producers Trust ("ldaHydro"), Rocky Mountain Power, Vote Solar, the City of Boise City, ldaho Clean Energy Association, ldaho Sierra Club, Northwest Energy Coalition, Micron Technology, 18 A "grandfather clause" refers to a "provision in a new law or regulation exempting those already in or a part of the existing system which is being regulated." Black's Law Dictionary (6ti ed. 1990). The term arose from provisions in southern voting laws that restricted the vote to those who could prove that their grandfathers had voted. 1s Case No. IPC-E-17-13, Direct Testimony of Briana Kobor on Behalf of Vote Solar, at 76-88 (Jan. 2,2018)., Case No. IPC-E- 17-13, Direct Testimony of R. Thomas Beach on behalf of The Sierra Club, at 34-37 (Dec. 22,20171. 20 Order No. 34046 al23-24 21 ld. at 24 22 Order No. 34460 at 1 IDAHO POWER COIVIPANY'S OPENING BRIEF . 5 [A]s part of our general encouragement for interested stakeholders to work toward agreement in the Company's on- site generation docket . . . , we are not opposed to considering the parties' legal analysis and interpretation of ldaho Code $ 61-315 and related ldaho Supreme Court case law, which prohibits rate discrimination among similarly situated ratepayers. We find it reasonable to consider arguments related to protecting investments already made, or other transitional periods, and other pertinent and legally sufficient distinctions, by customers with on-site generation systems.2l lndustrial Customers of ldaho Power, and Russel Schiermeier (''the intervenors") intervened as parties in this docket. Per direction from the Commission, Commission Staff conferred with ldaho Power and the intervenors regarding the procedural and substantive scope of the docket.23 ln total, the parties held one prehearing conference and eight settlement conferences.2a The process culminated in a Settlement Agreement filed with the Commission on October 11, 2019, that was signed by ldaho Power, Staff, ldaho lrrigation Pumpers Association, lnc., ldaHydro, City of Boise, ldaho Sierra Club, ldaho Clean Energy Association, lndustrial Customers of ldaho Power, and Russell Schiermeier ("the Signing Parties').2s ln the Agreement, the Signing Parties recommended Net Hourly Billing'?s for netting exports and consumption within the hour, with on-site generation customers compensated for net hourly exports at an Export Credit Rate.27 The Agreement also establishes a methodology for calculating this Export Credit Rate, to be updated biennially as part of ldaho Power's lntegrated Resource Planning process, and a phased schedule for implementing the Export Credit Rate over an eighlyear transition period.28 The Signing Parties did not resolve whether and under what terms the Settlement Agreement will apply to existing customers with on-site generation, so they agreed to 26 Rather than calculating Net Excess Energy over the course of the monthly Billing Period, Section lV.A. of the Settlement Agreement establishes Net Hourly Billing where exporls in excess of consumption measured at the end of each hour will be compensated at the Export Credit Rate. 27 Case No. IPC-E-18-15, Motion to Approve Settlement Agreement, Attachment 1 , at 2 (Oct. 1 1 , 2019) ("Settlement Agreement")i Order No. 34460 at 2. 28 Settlement Agreement at 2-5; Order No. 34460 atz IDAHO POWER COMPANY'S OPENING BRIEF - 6 23 ld. 24 ld. 25 Order No. 34460 at 1 seek resolution of this issue from the Commission.2s The Signing Parties further agreed the Settlement Agreement will be effective and binding if approved by the Commission, regardless of the outcome of this proceeding to determine applicability to existing customers.3o Finally, the Signing Parties agreed to a process for converting existing customers to Net Hourly Billing if the Commission determines existing customers are subject to the terms of the Settlement Agreement.3l On October 17,2019, the Commission issued Order No.34460 establishing a schedule for resolution of the issue of whether the Settlement Agreement should apply to existing customers with on-site generation, as well as how to define such customers.32 Specifically, the Commission established a deadline of November 13,2019, for opening briefs, a deadline of November 27,2019, for reply briefs, a telephonic public hearing on December 2,2019, and an in-person public hearing on December 3, 2019.33 III. ARGUMENT A. The Commission Should Apply the Terms of the Settlement Aqreement to All Customers with On-Site Generation, lncludinq Current Customers, to Avoid Undue Discrimination Under ldaho Code S 61-315. The Commission has broad authority to regulate and fix rates for services assessed by ldaho's public utilities.3a Under ldaho Code S 61-301, all rates and charges 2e Settlement Agreement at 7; Order No. 34460 at 3. s Settlement Agreement at 7. 31 ld. 32 Order No. 34460 at 3-4. 33 ld. al4. v Bldg. Contractors Assh v. IPUC and Boise Water Cory., 128 ldaho 534, 538, 916 P.2d 1259, 1263 (1996) (" Boise Watel). IDAHO POWER COIVPANY'S OPENING BRIEF - 7 must be just and reasonable.3s The Commission is further tasked under ldaho Code $ 61-315 with ensuring that rates are not unduly discriminatory.36 While there is no requirement under this statute that rates for different classes of service must be uniform in order to be lawful, rate differentiation must be based on "'a reasonable classification corresponding to actual differences rn the situation of the consumers for the furnishing of the service[.]"':z The ldaho Supreme Court has identified relevant factors to guide the Commission in determining whether it is reasonable to distinguish between customers, including "the quantity of the [electricity] used, the nature of the use, the time of use, the pattern of use, the differences in the conditions of service, the costs of service, the reasonable efficiency and economy of operation and the actual differences in the situation of the consumers for the furnishing of the service."38 Other considerations may include "contribution to peak 35 ld No public utility shall, as to rates, charges, service, facilities or in any other respect, make or grant any preference or advantage to any corporation or person or subject any corporation or person to any prejudice or disadvantage. No public utility shall establish or maintain any unreasonable difference as to rates, charges, service, facilities or rn any other respect, either as between locallties or as between classes of service. The commission shall have the power to determine any question of fact arising under this section. As the ldaho Supreme Court has explained, "[ilt follows that the IPUC'S authority may only be exercised in such a way as to fix non-discriminatory and non-preferential rates and charges." Eoise Water, 128ldaho at 538, 916 P.2d at 1263. 37 Utah-ldaho Sugar Co. v. lntermountain Gas Co., 100 ldaho 368, 377, 597 P.2d 1058, 1067 (1979) (quoting 64 AmJu2d, Public Utilities S117 (1972)). See a/so lclaho State Homebuilders v. Wash. Water Power,'107 ldaho 415, 420,690 P.2d 350, 355 (19841 (" Homeburlders") ("Not all differences in a utility's rates and charges as between different classes of customers constitute unlawful discrimination or preference underthe strictures of l.C. S61-315. A reasonable classification of utility customers may justify the setting of different rates and charges for the different classes of customers."). 38 Grindstone Butte Mut. Canal Co. v. ldaho Pub. Utils. Comm'n, 102 ldaho 175, 180, 627 P.2d 804, 809 (1 981 )i Utah-ldaho Sugar Co., 1 00 ldaho at 377, 597 P.2d al 1067. 36 Specifically, ldaho Code S 61-31 5 provides: IDAHO POWER COMPANY'S OPENING BRIEF - 8 load, costs of service on peak demand days, costs of storage and economic incentives."3s For example, it might be valid to provide a customer with a preferential rate if the customer provides the utility with system benefits relative to other customers, e.9., based on whether the customer load is uniform or varies seasonally, the amount of reaction current the utility must supply to serve the customer, the administrative costs the customer imposes on the utility, whether the customer load is intenuptible when cutbacks are necessary, and what transmission and distribution costs that customer load imposes.a0 As this Commission has explicitly acknowledged, however, differentiating between customers based merely on whether those customers are old or new is "a practice that has long been prohibited by the ldaho Supreme Court."a1 Thus, where new customers cannot be distinguished from existing customers based on valid factors such as the quantity of electricity they use, the pattern, nature and timing of their usage, the conditions of service, or the cost of service, it would be a violation oI ldaho Code $ 61-135 to subject new customers to different rates than the rates paid by existing customers. ln Homebuilders, the ldaho Supreme Court invalidated a non-recurring charge imposed on new electric space heating customers, finding that all customers, both old and new, were contributing to the need for increased system capacity.a2 Similarly, in Boise Water, the Court struck down a water hook-up fee for new customers that allocated 3e Gindstone Bufte, 102ldaho at '180, 627 P.2d at 809 & The Bunker Hill Co. v. Wash. Water Power Co.,98 ldaho 249,254,561 P.2d 391, 396 (1977) (" Bunker Hilf'). a1 ln the Matter of the Application of ldaho Power Co. for Authoity to lncrease ifs Rates ard Charges for Elec. Serv. lo /ts Customers in the State of ldaho, Case No. IPC-E-08-10, order No. 30722, at 36 (Jan. 30, 2009) (citing Homebuilders, '107 ldaho at 421 , 690 P.2d at 356). a2 Homebuilders. '107 ldaho at 421, 690 P.2d at 356 IDAHO POWER COMPANY'S OPENING BRIEF . 9 the costs of a new treatment plant to new customers only, where new customers alone were not responsible for the need for that plant.a3 Following those decisions, this Commission has been careful to avoid imposing costs on new customers only, where such costs are incurred to serve all customers in a class.aa On the other hand, where there is clear evidence of a difference in cost of service or conditions of service between old and new customers differential rates may be permissible.as Applying this framework to net metering customers, it does not appear that distinctions between new and existing customers can be justified. All residential and small general service customers with on-site generation share key load and usage characteristics, namely, their use of the grid both to import and to export energy in a manner that has historically contributed to cost shifting with respect to system fixed costs.a6 As this Commission observed, a "bi-directional" on-site generation customer "can push energy back to the grid whenever its generation source and timing allows it to, with the Company having limited control over the use and distribution of this somewhat 43 Boise Water,128 ldaho at 539, 916 P.2d at1264. a ln the Mafter of the Application of ldaho Power Co. for Authority to lncrease its Rates and Charges for Elec. Serv. Due to the lnclusion of the Bennett Mountain Plant lnvestment rn its Rate Base, Case No. IPC-E-05-10, Order No. 29790, al4 (May 26, 2005) (relying on Eor3e tvater to decline to impose costs of new power plant only on new customers); Order No. 30722 al36 (concluding that, where multiple sectors were contributing to peak load, the Commission could nol impose higher rates on certain sectors merely because those sectors were experiencing more growth, i.e., more new customers, as this is not a valid basis to differentiate under Homebuilders). 45ln the Matter of the Application of ldaho Power Co. for Approval ot New Tariff Provisions Relating to IVew Serv. Attachments and Distibution Line lnstallments or Alterations, Case No. IPC-E-95-18, Order No. 26780, at 7 (Feb. 6, 1997) (approving imposition of fees for new service customers requiring line extensions and upgrades); The Bldg. Contractors Assoc. of Sw. ldaho v. ldaho Pub. Utils. Comm'n, 151 ldaho10, 13-14,253 P.3d 684, 687-688 (201 1) (where there was clear evidence that new customers would require service extensions, allowing issuance of special service-extension refunds to new customers that resulted an a higher per capita investment by the utility in those new customers on a one-time basis). a6 See, e.9., Order No. 34046 at 16. IDAHO POWER COMPANY'S OPENING BRIEF . 1O unpredictable resource."47 This results in load and usage characteristics that are unique to (but shared among) on-site generation customers, including "increased volatility in demand and load factors, excess net-energy exportation in the spring and summer, and more volatility in contributions to the Company's peak(5).''ae These characteristics affect "circuits, voltage management, islanding, and load cycle adjustments," making it more difficult for ldaho Power "to forecast resource availability and load.'ae These traits describe existing customers, and there is every reason to expect these traits will describe new net metering customers as well. ln light of the framework described above, ldaho Power is not aware of any valid distinctions that can be made between current customers with on-site generation, and those who may participate in the future, that would warrant giving current customers more favorable rates. Therefore, excluding current customers from the terms of the Settlement Agreement would be unduly discriminatory toward future net metering program participants. B. Current Customerg with On-Site Generation Have Received Ample Notice tNetM nn Rates are Su ttoCh e It is a core principle of public utility regulation that the Commission has ongoing jurisdiction to oversee rates.so Under ldaho's tariff process, utility rates are subject to 47 ld. at 17-18 48 See /d at 18 4s /d. at |8 s /daho Code S 61-5O2 ("Wheneverthe commissionll . . . shall find thatthe rates[] ...collectedby any public utility for any service . . . are unjust, unreasonable, discriminatory or preferential, or in any wise in violation of any provision of law, or that such rates[] . . . are insufficient, the commission shall determine the just, reasonable or sufficient rates[] . . . to be thereafter observed and in force and shall fix the same by order. . . .") (emphasis added). IDAHO POWER COMPANY'S OPENING BRIEF - 1 1 change by Order of the Commission whenever the Commission finds such revision is just and reasonable.sl As the ldaho Supreme Court explained in a decision issued more than a century ago, rates for public services that may have once been just can become inequitable due to "changed conditions" and the passage of time, and "it is for this very reason that the people have reserved to themselves the power to regulate and prescribe the method of fixing rates in such matters."52 ln that case, a private individual, James Murray, made significant investments to deliver water service to the City of Pocatello in exchange for a city ordinance providing that he would be guaranteed a 5 percent rate of return on his investments for a period of 50 years.s3 The ldaho Legislature subsequently enacted a statute authorizing the city to modify water service rates for its inhabitants, and the Supreme Court found this was a valid exercise of the state's power.s ln so holding, the Court observed that Mr. Murray had "undertake[n] a business or engagement to serve the public for private gain[]'ts and explained that: 51 See /, the Matter of the Application of the Wash. Water Power Co. for an Order Approving lncreased Rates and Charges for Naf. Gas Serv. in the State of ldaho, Case No. VVWP-G-88-5, et al., Order No. 2?749 at 62-63 (Sept. 29, 1989) (summarizing staff testimony explaining that "the tariff standard" for reviewing prices in special contracts "is the same standard that is applicable to ldaho intrastate tariff ratesl,]" under which "rates are subject to the continuing .iurisdiction of the Commission and are subject to change and revision by Order of the Commission upon finding, supported by substantial and competent evidence, that such rate revision is just, fair and reasonable.")i ln the Matter of the Application of Utah Power & Light Co. for Approval of a Power Supply Agreement Between Utah Power & Light Co. and Monsanto Co. Dated July 3, 1991, Case No. UPL-E-92-02, Order No. 24220 (Mat.26, 1992) (approving special contract that specjfied contract rates were "subject to change under the same standard of review applicable to the Company's regular tarlff process[,]" in part based on the finding that "the establishment of l\Ionsanto's rates unde[ the tariff standard wiil make those rates more easily adjusted by this Commission in normal rate proceedlngs, thus providing an added level of ratepayer protection."). 52 City of Pocatello v. Murray,2'l ldaho 180, 196-197, 120P 812,817 (19121. s3 /d. at 189, 190-191, 194, 120 P. at 814-815, 816. s /d. at 189, 194-200, 120 P at814,816-818. ss ld. at 197 , 12O P. a|817. IDAHO POWER COMPANY'S OPENING BRIEF - '12 When Murray procured his contract for supplying the city of Pocatello and its inhabitants with water. . . , he immediately entered upon the discharge of the duty of supplying a public use, and he was immediately chargeable with notice . . . to the effect that the business in which he was engaging and the service which he was undertaking to render would be forever subject to the regulation and control of the state in a manner prescribed by law, - not the mannet already prescribed by law, but in the manner that might from time to time be prescribed by the law-making power of the state, - a continuing and ever-existing power.56 The Court acknowledged Mr. Murray's financial investment but noted that continuation of a 5 percent rate of return might not be reasonable any longer given his rate base had expanded over time to keep pace with the city's growth and that he "ha[d] no vested right to charge an unreasonable . . . rate while exercising a franchise to serve a public use.57 The Court found that "[]or such reasons, the power ought to always rest in the people or the law-making power to re-establish and readjust rates from time to time in order to meet [] changed conditions."5s By engaging in the business of importing electric energy back to the grid for credit, ldaho Power's existing residential and small general service customers with on-site generation have similarly "undertaken . . . to serve the public for private gain.'se And like Mr. Murray, they have no "vested right" to continuation of the particular rates in effect at the time they elected to participate in net metering; these rates are subject to change 56 /d. at 195-196, 120 P. at817 (quotation marks and some emphases in origanal omitted) 57 ld at 199-200, '120 P. at 818. s8 /d at200, 120P.a|818. See also Bunker Hill,98 ldahoat253,56'1 P.2d at 395 ("[Tlhe State, by virtue of its police power, has the right to regulate public utilaties. No regulated monopoly can contract away its duty to serve the public interest or the state's right to enforce that obligation."). 5s Ctty of Pocatello, 21 ldaho a|197, 120 P. at 8'17. IDAHO POWER COMPANY'S OPENING BRIEF.13 once they are no longer reasonable.60 As noted in Case No. IPC-E-89-5, "this Commission has never'vintaged' utility conditions at the time a customer begins service or expands service for the benefit of that customer."61 1. Notice from Gommission Orders. ln the specific context of net metering, the Commission has repeatedly put program participants on notice of this bedrock ratemaking principle. As early as 2007, in Case No. IPC-E-06-07, the Commission stated: ln response to the comments of some program participants, . . . we must note that fhe net meteing program pice is a taiff rate. lt is not a contract rate. As a taiff rate, it is subject to change. An impetus for future change is recognition that in addition to the customer charge, the Company recovers some of its fixed costs for serving customers in its energy charge. A persuasive argument could be made that net metering customers are being subsidized by other customers. Indeed in our Order approving net metering we recognized that the full cost of the program may not be borne by participants. Order No. 28951. The Company pursuant to Commission direction continues to monitor net metering program costs, cost recovery and related issues of subsidization. Customers therefore should not rely on continuation of the taiff rate in cost effectiveness calculations to justify net metering equ ipme nt inve stment decision s.62 60 ln conlrast, under the Public Utility Regulatory Policies Act of 1978, both the federal statute and its implementing regulations provide cogeneration facilities and small power producers with a reasonable expectation of selling their power to regulated public utilities at fixed rates for the life of a power purchase agreement. See George Arkoosh and Bonnie Arkoosh, Husband and Wife, Complainants, vs. ldaho Power Co., a Maine Coe., Respondenl, Case No. U-1006-237, Order No. 19442, al l5-22(Feb.8, 1985). There is no analogous legislative authorization or directive to fix rates for net metering participants over a period of years. 61 ln the Matter of the Application of ldaho Power Co. for Approval of an Hec. Serv. Agreement Between ldaho Power Co. and Micron Tech., lnc., Case No. IPC-E-89-5, Order No. 22489, at 6-7 (May 19, 1989) (concluding that "special contract customers coming on in this time of surplus have no rights to continuation of their'good deals' beyond the time of surplus[]" and that "to qualify for their special contract rates lower than tariff rates . . . , they must show a continuing benefit to the system beyond the time of surplus through the types of load management or energy efficiencies described earlier."). 62 ln the Mafter of the Application of ldaho Power Co. for Revision of Schedule 84 - Net Metering, Case No. IPC-E-06-17, Order No. 30227 , at 7 (Jan. 25, 2007) (emphases added). IDAHO POWER COMPANY'S OPENING BRIEF - 14 Certain persons have expressed sympathy for customers who sought a faster payback on their investment by over-sizing their net metering systems in order to sell excess power to the Company. Another Petitioner suggested that net metered customers should be grandfathered to the conditions of the cunent net meter tariff to allow them to recover their investments in their renewable energy projects. These remarks ignore that taiffs can change while power purchase agreements provide more certainty, and that persons who oversized their systems to obtain a faster payback ignored or misunderstood this difference and took the risk of taking service on a changeable fanrf instead of a contract under schedule 86. Consistent with our view in Order No. 30227 (lPC-E-06-07)63, the Commission reminds customers that net meteing is a tariff rate. There is no contract associated with the seruice and rates are subject to change depending on future Commission decrslons.6a ln 2016, in Case No. PAC-E-16-07, the Commission directed Rocky Mountain Power to provide periodic reports on its net metering program, including "any information [Rocky Mountain Power] provides to customers about net metering (forexample, whether the Company informs customers that the net metering tariff is subject to change and [] does not guarantee future pricing, rate structure, and interconnection requ irements)."65 ln 2018, in Case No. IPC-E-17-13 establishing separate classes for ldaho Power's residential and small general service customers with on-site generation, the Commission stated: [T]he evidence causes us a great deal of concern that industry surrounding R&SGS on-site generation may be sending price signals to ldaho consumers, including the Company's 63 Order No. 30227 was issued in Case No. IPC-E-06-17 ln the Matter of ldaho Power Co.'s Application for Authoity to Modify its Net Meteing Serv. and to lncrease the Generation Capacity Limit, Case No. IPC-E-12-27, Order No. 32880, at 4 (Aug. 14, 2013) (record citations omittedi emphases added). 65 ln the Mafter of Pacificorp dba Rocky Mountain Power's Application to Modify Elec. Serv. Schedule 135- Net Metering Serv., Case No. PAC-E-16-07, OrderNo.33511, at8 ( pt.29,2016). IDAHO POWER COMPANY'S OPENING BRIEF . 15 ln 2013, in Case No. in IPC-E-12-27,the Commission again stated: customers, that are not in the public interest. For example, the cost to consumers of financing, installing, and maintaining a residential rooftop solar system is not trivial. However, the inverse also holds true, where incorrect price signals related to rate or rate design changes may be trivialized. Rates change, and rate design evolves, and no utility rate can be locked or considered lo exlsl ad infinitum. As we have consistently held, taiff rates are not contracts. While the responsibility to investigate purchasing or financing an on-site generation system lies with the consumer, based, in part, on the integrity of the seller, the fact that on-site generation customers differ from standard customers can and should be clarified to consumers.66 And even more recently, in a separate docket initiated this year for ldaho Power's commercial and industrial customers with on-site generation, the Commission stated: The Company expressed concern that customers are deciding to install net metering systems on a misguided assumption that retail net metering rates will continue indefinitely. The Company notes it is studying value-based compensation structures for net metering participants, the implementation of which will likely impact the economic calculus of investing in a net metering system. We reiterate: Rates and rate structures are always subject to change. Although this Commission must approve any rate changes as just, reasonable, and non-discriminatory before they take effect, lhere is no guarantee that rates will stay the same indefinitely . . . As long as solar installers and other sellers of net metering systems are not misrepresenting how utility rates and rate structures operate, customers should have sufficient understanding that a change in rates and/or rate structures will impact the payback period for a net metering system.67 ln sum, through repeated admonitionsfrom the Commission overthe last 12 years, net metering participants have received more than adequate notice that their rates are subject to change. 66 Order No. 34046 at 19 (emphases added) 67 ln the Matter of ldaho Power's Application to Evaluate Schedule 84 - Net Meteing, Case No IPC-E-19-'15, Order No. 34335, at 2 (May 15, 2019) (emphases added). IDAHO POWER COMPANY'S OPENING BRIEF - 16 Notice from the Company's Website, Customer Generation Application, and Communications. The Company proactively communicates with its customers that the rates and compensation structure related to on-site generation are subject to change. Most customers seeking to install on-site generation consult and engage ldaho Power through its website. On ldaho Power's Customer Generation landing page,o8 ldaho Power provides a variety of customer tools, including a Solar Checklist. Since it was created in July 2017, the Solar Checklist,6, included as Attachment 1 to this Brief, has outlined "other things to consider," including: Note: ldaho Power's on-site generation and net metering services are not a contract. The services and rules, includingthe current compensation and billing structure and interconnection requirements, are subject to change and current rates do not represent a guarantee of future pricing. ln its resources for Understanding Customer Generation,T0 ldaho Power provides links to "Pending Cases Related to Pricing" for cases impacting customer generation, explaining The costs, benefits and compensation of net excess energy supplied by customer-owned on-site generation is currently being studied by ldaho Power, the ldaho Public Utilities Commission and interested parties. The outcome of the case could impact the time frame for estimated payback, s Solar Power Options and Customer Generation,https://www. idahopower com/enerqy- environmenUqreen-choices/solar-powe r-oDtions-customer-qeneration/ 6s Solar Checklist,httos://docs. idahopower com/pdfs/BusinessToBusiness/SolarChecklist. Ddf 70 U nderstanding Customer Generation, https://www. idahooower. com/enerqv-environmenUoreen- choices/solar-power-options-customer-qeneration/customer-qeneration/ IDAHO POWER COIVIPANY'S OPENING BRIEF . 17 2 This can be found in Attachment 2. When using Google's Project Sunroof to Estimate Your Solar Costs, ldaho Power also reminds customers that "Estimates provided by Google's Project Sunroof are based on current electric rates. Future changes in rates will impact the estimated net savings and payback.'ri This information rs included as Attachment 3. Additionally, the Company maintains a list of Frequently Asked Questions ("FAOs') on its customer generation landing page that includes information about the existing compensation structure and the potential for future price changes.T2 lncluded as Attachment 4, the FAQs have contained a versionz: of this question and responsive information since November 2012: How much would I be paid for my power and how much would I have to pay for the power I use? Residential and small commercial customers are paid for excess generation at the same base retail rate that they are charged for electricity. Other customer classes are paid under a different, calculated rate structure. The net metering tariff including current rate structure and requirements is subject to change and does not represent a guarantee of future pricing. Contact ldaho Power for more information. FAQ language advising customers that the current rate structure is subject to change and does not represent a guarantee of future pricing has been available online and in handout form to at least 5,298 residential and small general service applicants who comprise 94.7 percent of current Schedule 6 and 8 customers with on-site generation. Since January 2017, all new on-site generation customers have been required to affirmatively acknowledge they are aware that the rates and compensation structure 7r Google's Prolect Sunroof,h tps.//wwv.!!Lahopower. com/enerqy-environ menUq reen- cho ect-sunroof/n n choices/solar-oower-ootions-customer -qeneration/freouentlv-asked-ouestions/ 73 This FAQ was most recently updated in 2019 to read What if I need more power than my system provades? How much will I pay? Currently, customers pay the same retail rates for power they use as ldaho Power's standard service customers who don't generate their own energy. However, the rules, including the current rate structure and interconnection requirements, are subject to change and do not represent a guarantee of future pricing. IDAHO POWER COI\ilPANY'S OPENING BRIEF - 18 72 Frequently Asked Questions: httos://www. idahopower.com/enerov-environmenvoreen- applicable for customers with on-site generation are subject to change. On the Apply to Connect Your System webpage,T4 ldaho Power's Customer Generation Applicationrs explicitly notifies applicants of all customer classes that current on-site generation rates are not guaranteed. The form, included as Attachment 5, requires applicants to check a box acknowledging: tr I understand that the on-site generation and net metering service, including the rate structure and interconnection requirements, are subject to change and that current rates do not represent future pricing. This notice language and check box is located above the customer signature line. ln many cases, installers help customers fill out the form and therefore see this language as well. From January 1,2017, through October 31, 2019, ldaho Power has received approximately 4,624 ldaho applications from all customer classes since the application form was updated to include a customer acknowledgement that rates are subject to change. This represents 80 percent of all 5,843 on-site generation participants and applicants in ldaho Power's ldaho service area. Since December 2016, the Company also has reminded customers that rates paid for customer generation are subject to change when ldaho Power notifies them via email or letter that their on-site generation system has met all requirements and their service 7a Apply to Connect Your System, httos://www. idahopower.com/enerqv-environmenvoreen- choices/solar-oowerootions-customer-qeneration/a pply-to-connect-your-system/ 75 Customer Generation Application, httos:/idocs. idahopower.com/pdfs/BusinessToBusiness/DEL326.pdf IDAHO POWER COMPANY'S OPENING BRIEF - 19 will be transferred to the applicable on-site generation tariff schedule. lncluded as Attachment 6, the notification states:76 Notice as Required by the Residential Solar Energy System Disclosure Act. Earlier this year, the ldaho Legislature enacted the Residential Solar Energy System Disclosure Act.77 To the extent applicants or participants have signed agreements with solar retailers on or after October 1 , 2019, individuals have also received notice substantially similar to the following statement required by ldaho Code $ 48- 1805(3): "LEGISLATIVE OR REGULATORY ACTION MAY AFFECT OR ELIMINATE YOUR ABILITY TO SELL OR GET CREDIT FOR ANY EXCESS POWER GENERATED BY THE SYSTEM AND MAY AFFECT THE PRICE OR VALUE OF THAT POWER.' e Transition Period Miti ates lnvestment Recove cts r Exislm Participants. As discussed above, ldaho Power believes that under current ldaho law, it is most legally defensible to transition the compensation of its existing and prospective on-site generation customers taking service under Schedules 6 and 8, respectively, from the full 76 Prior to the creation of Schedules 6 and 8, the email or letter advised applicants with complete systems: "Schedules U and 72 have been approved by the ldaho Public Utilities Commission and the Oregon Public Utility Commission (Commissions). Tariff schedules (including rates and system requirements) are subject to change pursuant to a Commission order. ldaho Power will notify the customer of record of any future modifications to the schedules that may impact the customer." 77 ldaho Code I 48-1801, et seq. IDAHO POWER COMPANY'S OPENING BRIEF - 20 3 c The rules for on-site generation, including compensation structure, are outlined in Schedules 6,8,84 and 72, which have been approved by the ldaho Public Utilities Commissionand the Oregon Public Utility Commission (Commissions). Tariff schedules (including pricing, compensation structure, and system requirements) are subject to change with approval from the Commissions. We will notify you of any future changes to the schedules. retail rate to the Export Credit Rate on the same timetable set forth in Section lV of the Settlement Agreement - irrespective of when service began or will begin. From a public policy perspective, however, ldaho Power acknowledges that doing so will have negative impacts on the economics of previously installed customer on-site generation systems, The Company understands that as compared to customers in other rate classes, many residential and small general service customers have modest means and comparatively limited access to strategic business information. Consequently, ldaho Power strongly supports the transition period for these customer classes set forth in the Settlement Agreement while limiting the adverse financial impact to non-participants of compensating participants for Net Excess Energy at a rate higher than the Export Credit Value. During the eighlyear transition period, the difference between the higher retail compensation rate and the lower Export Credit Rate will be reduced in four equal percentage adjustments occurring every two years, with the first adjustment not occurring until January 1,2022. lf applicable to existing customers, this gradual implementation schedule will serve to lessen the economic impact of moving to the lower value-based Export Credit Rate, while at the same time reducing the level of cost shifting toward standard service customers over time. Because existing and new on-site generation customers are indistinguishable in the way they take service and interact with ldaho Power's system, the transition of all on-site generation customers - regardless of when the customer's generation system became operational - in identical mannerwill satisfy /daho Code $ 61- 315 and the ldaho Supreme Court's prior interpretations thereof. IDAHO POWER COMPANY'S OPENING BRIEF.21 D. Criteria to Become and Remain an Existinq On-Site Generation Customer. 1. Vintaging Start Date. Notwithstanding these concerns, if the Commission wishes to define "existing customers with on-site generation" for purposes of vintaging customers for grandfather treatment, ldaho Power recommends two options for consideration: ('l ) Active participants and applicants as of October 17,2019 (the date of the Commission's Notice of Motion to Approve Settlement Agreement in this matter) or (2) the date of the Commission's order resolving the grandfather issue. The earlier date minimizes cost shifting to non-participants by applicants who had legal notice that a multi-party proposal to change compensation rates was under review. Vintaging customers as of the date of the Commission's grandfather determination order would allow applicants who submitted on-site generation applications on or after October 17 , 2019, to benefit even though they submitted their application with notice of the prospective compensation rate change and can rescind their applications at their option. 2. Grandfather End Date. lf the Commission determines that exempting existing customers from the terms of the Settlement Agreement is legally permissible and is in the public interest, the Company requests the Commission implement an end date for the grandfather treatment. As changes in metering or billing system functionality are implemented over time, it may become administratively burdensome for the Company to continue to track and manage a set of uniquely situated customers. The Company believes a 10-year period should be considered and is one that could be reasonably implemented. IDAHO POWER COIVIPANY'S OPENING BRIEF .22 3. Grandfather Existing System Size and Premise Location. Additionally, in order to limit the cost shift to what the Company's broader residential and small general service customers are currently exposed to, the Company also proposes the Commission order that existing grandfathered systems not be allowed to "expand" those systems or relocate grandfather systems to a different premise. This can be implemented by requiring that system sizes are capped at what the customer initially applied for or had subsequently applied for prior to the effective date as determined by the Commission.Ts lf a customer had expanded their system without adhering to the requirements in Schedule 72, the customer could elect to reduce the size of the system to be compliant with their initial system size, or could transition the system to Schedule 6 or 8. rv. coNcLUstoN Net metering participants have received ample notice over the years that their rates are subject to change. The rates currently in effect for existing net metering particapants are no longer just and reasonable. The Settlement Agreement therefore establishes a methodology for transitioning on-site generation customers to a rate that more closely reflects cost of service for these classes. And as described in Section lll.A., above, there is no reasonable basis upon which to single out current customers forspecial treatment. ln recognition of the existing investments in on-site generation equipment and to avoid imposing undue hardship on current Schedule 6 and 8 customers, the Settlement 78 When applying for Schedule 6 or 8 service, customers are required to notify the Company of the total system size. lf a customer expands a system after the initial application date, the customer is required, pursuant to the terms of Schedule 72, to submit a new application and complete the application process. IDAHO POWER COMPANY'S OPENING BRIEF - 23 Agreement establishes a phased transition to the Export Credit Rate over a period of eight years to allow these customers more time to recoup their investment. For these reasons, ldaho Power urges the Commission to apply the terms of the Settlement Agreement to all residential and small general service customers with on-site generation, regardless of the date a customer's generation system becomes operational, in keeping with /daho Code $ 61-315. Respectfully submitted this 13th day of November 2019. la-^-a LISA D. NORD OM Attorney for ldaho Power Company IDAHO POWER COMPANY'S OPENING BRIEF - 24 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 13th day of November 2019 I served a true and correct copy of IDAHO POWER COMPANY'S OPENING BRIEF upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Edward Jewell Deputy Attorney General ldaho Public Utilities Commission 11331 W. Chinden Boulevard Building 8, Suite 201-A(83714) P.O. Box 83720 Boise, ldaho 837 2O-OO7 4 ldaHydro C. Tom Arkoosh ARKOOSH LAW OFFICES 802 West Bannock Street, Suite LP 103 P.O. Box 2900 Boise, ldaho 83701 ldaho Conservation League and NW Energy Coalition Benjamin J. Otto ldaho Conservation League 710 North 6th Street Boise, ldaho 83702 NW Energy Coalition F. Diego Rivas NW Energy Coalition 1101 8th Avenue Helena, Montana 59601 ldaho lrrigation Pumpers Association, lnc. Eric L. Olsen ECHO HAWK & OLSEN, PLLC 505 Pershing Avenue, Suite 100 P.O. Box 61 19 Pocatello, ldaho 83205 IDAHO POWER COMPANY'S OPENING BRIEF - 25 _Hand Delivered _U.S. Mail _Overnight Mail_FAXX Email edward.iewell@puc idaho.qov _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email tom.arkoosh@arkoosh. com taylor. pestell@arkoosh.com _Hand Delivered _U,S. Mail _Overnight Mail _FAXX Email botto@ idahoconservation. orq _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email d ieqo@ nwenerqv.orq _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email elo@echohawk.com Anthony Yankel 12700 Lake Avenue, Unit 2505 Lakewood, Ohio 44107 Vote Solar Briana Kobor Vote Solar 358 South 700 East, Suite 8206 Salt Lake City, Utah 84102 David Bender Earthjustice 3916 Nakoma Road Madison, Wisconsin 5371 1 Al Luna Nick Thorpe 1625 Massachusetts Avenue, NW, Suite 702 Washington, DC 20036 City 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 GIVENS PURSLEY LLP 601 West Bannock Street Boise, ldaho 83702 ldaho Sierra Club Kelsey Jae Nunez KELSEY JAE NUNEZ LLC 920 North Clover Drive Boise, ldaho 83703 IDAHO POWER COMPANY'S OPENING BRIEF . 26 _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email tonv@vankel.net _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email aluna@earthiustice.orq nthorpe@earth iustice.orq _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email aqermaine@cityofboise.org _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email briana@votesolar. orq _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email dbender@earthiustice.orq _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email prestoncarter@qivenspurslev.com _Hand Delivered _U.S. Mail _Overnight Mail -FAXX Email kelsev@kelseyiaen u nez. com Zack Waterman Michael Heckler ldaho Sierra Club 503 West Franklin Street Boise, ldaho 83702 PacifiCorp d/b/a Rocky Mountain Power Yvonne R. Hogle Rocky Mountain Power 1407 West North Temple, Suite 320 Salt Lake City, Utah 841 16 Ted Weston Rocky Mountain Power 1407 West North Temple, Suite 330 Salt Lake City, Utah 841 16 lndustrial Customers of ldaho Power Peter J. Richardson RICHARDSON ADAMS, PLLC 515 North 27th Street (83702) P.O, Box 7218 Boise, ldaho 83707 Dr. Don Reading 6070 Hill Road Boise, ldaho 83703 Micron Technology, lnc. Austin Rueschhoff Thorvald A. Nelson Holland & Hart, LLP 555 Seventeenth Street, Suite 3200 Denver, Colorado 80202 Jim Swier Micron Technology, lnc. 8000 South Federal Way Boise, ldaho 83707 _Hand Delivered _U.S. Mail _Overnight Mail -FAXX Email zack.waterman@sierraclub.oro m ichael. p. heckler@qmail.com _Hand Delivered _U.S. Mail _Overnight Mail FAXX Email wonne.hoqle oacificoro.com _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email ted.weston@pacificorp.com _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email peter@richardsonadams.com _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email d read inq@m indsprino.com _Hand Delivered -U.S. Mail _Overnight Mail _FAXX Email darueschhoff@hollandhart.com qlqarqano-amari hollandhart.com IDAHO POWER COIVIPANY'S OPENING BRIEF - 27 tnelson@hollandhart.com aclee@hol land hart.com _Hand Delivered _U S. Mail _Overnight Mail _FAXX Email iswier@micron.com lndividual Russell Schiermeier 29393 Davis Road Bruneau, ldaho 83604 _Hand Delivered _U.S. Mail _Overnight Mail _FAXX Email buyhav@omail.com T , Executive Assistant IDAHO POWER COMPANY'S OPENING BRIEF - 28 BEFORE THE IDAHO PUBLIG UTILITIES COMMISSION CASE NO. !PC-E-18-15 IDAHO POWER COMPANY OPENING BRIEF ATTACHMENT 1 (Language Highlighted) 3r'ffi An DACOap aornErnY Solar Checklist ldaho Power welcomes your interest in solar and renewable generation. To help you research your options, we've developed the following list: lnformation you'll need to start fl Your goals-How much energy you want to produceT Do you want to offset all or a portion of ylour energy use? Do you want a backup power source in the case of a power outage? Most systems that conn<t to the elxtrical grid will not proide power duing a power outage. E Your space---Decide on a roof- or groun&mount system and consider how much unsfraded, southern-oriented space is available. Each kilowatt (kW) of solar requires approximately 100 square feet of unshaded space. D Your monthly and annual energy use (kilowatt hours [kWhlF-{daho Power's My Ac(ount tool can help you er/aluate your energy use. lf possible, look at energy use (kWh) over two or three years to reduce irregularities from unusual weather events. Use your historical energy usage and consider future energy additions (heated pool, electric vehicle, etc.) to determine the size of system you need. D Your budget-How much you want to spend on your system? Do you plan to buy or {inance your system? lf you plan to finance, remember to factor in the interest rate on a loan. The cost of a system depends on many factors, including the type and size. D You pioiect-Do you plan to install it yourself or hire a contractor? lnstallation requires expertise and all systems must pass an electrical inspection. Businesses are reguired by electrical code to use licensed professional electricians. ldaho Power recommends getting several bids. See our tips for <hoosing a solar inslaller. Other things to consider ! Are there any restrictions lrom my homeowner! association. city or county? O Will my roof need to be replaced soon? ! will my roof warranty be affected? tr Will my homeownert imurance premium change? ! How long do you plan to live in your cunenl home? lf you move, accrud energy credits are forfeited. tr Are you running or planning to run a business, including cryptomining, at your horne? Thb could change your rate, system rquirements picing, wtrich will affect how quickly you rxoup your investment. tr You'll still have an ldaho Porer bill each month. Under the current billing structure, you will be responsible for seMce fees and any energy you need from ldaho Power. Questions to ask your installer D What licenses do you hold and are you licensed in the states of ldaho and Oregon? tr What size system would meet my goal? Answer will be in kilowatts, not number of panels. D How much energy, in kwh, wrll the system produce each month? Each year? The National Renewable Energy Laboratoys PV Watts program can help you etimate enerry output from d if f e re nt s i zed systern s. are B How does that compare to my monthly and annual energy useT D lf your goal is to have power during an outage, can they install a system to achieve that? u Will anythingr-trees, roof lines. neighbors-shade my panels? How will that shade affect my output? Ask your installer to do a shade analysis. 0 What assumptions were made when calculating my payback date, such as: ! ldaho Power! current cost of energy for residential customers? Cunent arerage base rate for residential customers on khedule O1 is 8.71 cents per kW, but it mnges from 8 to 12 cents depending on tiers and sr.ason. D ldaho Powerl energy cost escalation rate (the estimated percentage that rates will increase each year)? For a<amplq in 2018 and 2A19, ldaho Power customen erperiencd a decreEs€ in elxtricity coss. Looking forward, ldaho Pov,er's most recent lntegrated Resource Plan estri'nates that relative fuel prica will incrase, on average, 1 .3 percent Fr year over the next 18 Wn. tr Does the payback consider the rate that production will decrease each year over the life of the panels as they age? tr ls there an equipment maintenance and replacement schedule? fl Do I need to clean the panels or remove sno\iv? E What wananties are offered? tr Who do I contact for maintenance? tr What if I need a new roof? tr What is the process for installing a system? How long might each step take? Connecting your system to ldaho Powert grid Under our on-site generation and net metering tariffs, customers can install their own small-scale renewable generation source to offset some ol their energy needs. They remain connected to ldaho Power's grid for reliable, consistent electricity, drawing energy anytime they need more than their system can provide. See the Customer Generation FAQs {or more information. Prior to installing the syst€m, your installer should complete ldaho Power3 Customer Generation Application for approval to connect to ldaho Power! grid. Any upgrades needed to connect your system to the grid will be at your expense. Alternatives E Consider energy effiriency updates for your home prior to installing your sptem. Lowering your energy use conserves resources and may allow you to install a smaller system for your home. tr tf you are a renter or iI solar on your property jun isn't leasible for you. there are other options for supporting renewable energy. Check out your Green Choices on our website. Other resources tr Financing option information: . ldaho customers-ldaho Olfice of Energy and Mineral Resources . Oregon customers-oregon Department of Energy E lncentive information: Database of State lncentives for Renewable Energy (DS|RE) Helpful Links idahopower.<om/(ustomergeneration for tariff information my.idahopower.<om for your energy usage history google.<om/get/sunrool for an estimate on solar size, cost and payback pvwatts.nrel.gov to estimate system size and energy output oregon,gov/energy to find tax credits for Oregon residents dsireusa.org a database of state incentives for renewables idahopower.<om/solar for tips on choosing a solar installer BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION GASE NO. IPC-E-18-15 IDAHO POWER COMPANY OPENING BRIEF ATTACHMENT 2 (Language Highlighted) Understanding Customer Generation - Idaho Power Page I of3 Understanding Customer Generation ldaho Powe, supports cuslomerchoice and your nterest rn clean energy Customers !\,ho inslalltheir own generalion sources - usually solar, but also w nd hydropower, qeothermalor fuelcells - can offset some or alloftherr energyneeds Customers rernarn connected to ldaho Power'sgnd, drawing energy any limelheyaren't producrnq lhei own power or need more thantheycan produce When certarn cuslomers (those billed underschedules 6,I and g4) generale moreenergy lhanthey need, they send it backto ldaho Power's grid and earn an energy cred t forthe excess ene.gy produced. ln addrtion toa fixed monthlyservice charqe, thecuslomerls billed for lher net energy use, whlch is simplythe amount they generate minus the amount they use overthe monthly billing period Th s billing structure is called net energy melenng, or net metering I NET ENERGY Pending Cases Related to Pricing \, I ENERGY YOU CONSUME ENERGY YOU GENERATE IIIrtlIIL lvlake sure to stay!plodatew[h activepficrng casesthrough the ldahoPublc Ut ites Comm6sion . Case studying the costs and benefits ofresdentialand small general service cuslomer qeneration on ldtsho Powels system llPC-E-I8-15 fhto //www ouc rdaho oov/tl€room/cases/summatu/lPCE] 81 5 htmD) . Case studyin g the costs and benef ts of commerc al, rndustr al a nd irrigaton cuslomer qeneration on ldaho Powels system ll PC-E-I 9-l 5 (htlo //wyrw nuc.idaho oov/frleroom/cases/summarv/lPCEl g I 5 html) . Case studying ways to recover the fxed cosls of provdrng electric seMce to customers (PC-E-l8-l6 fhttn//www nuc rdaho oov/frleroom/.ases/sumnrarv/IPCE 1 81 6 htmll) Customer Generation Etigibitity and Pricing Customers approved to generale therr o\dn elecv city are brlled under different pricing policies. ofien called rate schedules (or tariffs) Llse the cha( below, lo frnd your rate scheduleorvrew all CURRENT SCHEDULES ELIGISLE FOR CUSTOMCR GENENAiON APPLICABLE SCHEOULE wlTH CUSTOMER G€NENAIION ldaho Residential (Sqbsrule-L fhttps://docs id. ho.ower com/pdfs/aboulus/ratesr-aoulatorv/tanffs/l 56 odf)) ldaho Residential Serv ce on-sire Generarron ls.hedL,le6 lhtinR //docs idahonower com/odf s/aboutus/.atesreoulatoN/tafl lls/3 I 3 od ldaho Small ceneral Servrce lschedulqz rhtus//docs dahonower.om/ndfs/aboLrtus/ratesreoulatorv/lariffs/37 pdn) ldaho Small General SerMce on-Sle Generalon ischedul€ 8 {httFsT/do.s idah.nower.com/odfs/ahoutu s/ralesre.r 'latorv/tanffs/3'l 4 nd CLrslomer Energy Productron/Net Metenng Seryrce (Schedule 84 (hitns //docs idahonower com/odls/aboutus/ratesreoulatorvnariffs/1 98 nd https://www.idahopower.corn/energy-environment/green-choices/solar-power-options-cu... I I ll I12019 0regon Res dennal lSchedule 'l ahttps //docs rd.hooower corn/pdfs/aboutusral€srmulatorv/tar ffs/1 56 pdll) and Small General Servrce lsch€dule 7 thltns//do.s dahooowercom/pdfs/eboutus/ratesreo!latoN/lariffs/37ndn) = Understanding Customer Ceneration - Idaho Power CIJRRENT SCHEDUTES €LIGIBLE FOR CUSIOMER GEN ERATION APPLICABIE SCHEDULE WITH CUSTOMER GENERATION ldaho and oregon kr gatio. (s.hedule 24 rhttos //docs id ahonower com/pdfs/aboutus/ratesreoulatorv/tanffs/42 od0), Large General S€Mce (Sqheduleg fhtns //docs tdahonower corn/pdfs /aboutu s/raresreou latorv/larif{s/38 pdfl) and lndirstr allschedule lI rhttnsT/.locs idahopower com/pdfs/abourus/ratesreoulatorv/lanffs/ 1 9 l odfll Cuslomer Energy Production/Net lileter ig Service (schedule 84 f htos //docs dahooower com/pdf s/abouius/ratesreculatorv/tarif fs/1 98 nd For prolects over 100 kW reler to Generalor lnterconf€.1nn (lrttps //www rdahooower com/ab.)!t-{ls/do n!-busrness-!,rlh-us/g€neraior-rnterconneclron/l TechnicaI Requirements Solar, wlnd an d other on-site generatron sources must be insialled safely There Bre specifrc equipment requiremenls and desrgns depending on your rate schedule and size of syslem ESchedule T2lhtlbs//do.s rdahopower com/ndfs/a boulus/ratesregulatorv/tanffs/52 nd0 lnterconneclions to Non-Utility Generatron apphes to allrate schedulesand oulhnesthe nlerconnection requrrements and apphcation process https://ww*. idahopower.com/energy-environment/green-choices/solar-power-options-cu... I I ll I12019 Page 2 of3 ECr,stomer Generanon lnterconnecti.ln Reourrements (htlos //docs rdahooower com/odfs/Aboutll s/busrnessToBusrn€ss/Customerceneralron lnterconnection Reouremenis odfl nclude lne daagrams, eq!rpmenl specifcations and test ng req!irements toensure your system is conliqured prop€rly seelheldahoDMslonofBUild.n9Safety'sEwarnlngabout plug and play inveners Ready to lnstatt? Find apploatrcn forms here fhttps://www dahooower com/enero$€nv r.nm€nt/oreen-chorces/solarooweF.nnons{uslomer-o€neralon/aoolv-tcconnect- vour'svst.m/) Questions? Check out our FAos (https://!yww dahooower com/energv-environment/oreen-choices/solar-power-oplions-customer-oeneralion/freouentlv'asked- q!sslio!s4, or contact a customer Generation Specialrst for help at !lz)&3!8r55qllelElll&jl8&2559) or soc@idahololelcom rrnailto cA@idahopower com). Solar installers, oeneration/.uslomerreneration-newsletteri tor oul Customer Generation ema I newsletter to stay n the loop about updates and trends l-- .q;F: * !,\ ! L I ,--"'",rTm I { --f-!W;' C Lea t I l, n tomor LJnderstanding Customer Ceneration - Idaho Power Page 3 of3 ldaho Po\*-er s commrlled to our ooal ol lOO% ctean enerqv bv 2046. L earr nore O https://www.idahopower.com/energy-environment/green-choices/solar-power-options-cu ... ll ll ll20l9 ill.tr.s /rww,! da BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-18-15 IDAHO POWER COMPANY OPENING BRIEF ATTAGHMENT 3 (Language Hig h lighted) Google's Project Sunroof- ldaho Power Page I of2 Google s Proyecl Sunroof Curious to know what an investment in solar Looks [ike? Googl€,s@-aflon|lneso|arestimalor.cangiveyouareslimateofthecosttoinslallasystem and y""," unt,l payb""k. -PloJectSunroofisnotfunctionalfolallofldahoPowe/sseNicealea,soweveplovidedlhleePrqedSunroofexamplesofatypEal home below. Examples fot usng solat on-sle gehe1ton lo malch nea y 100% of a homes energy use lufIPsxAvww.tDAHoPot{ER.coM/cot{TENT/uPLoaot201 7/rzHousEl PNGI IIE JOI'ES HOI'SE f HTTPsJ,,tllWW lDll{opowER CoM/COl{TEi.ITIUPLoADS/2o1 7/r THE 2HAAG'S HOUSE AVEIACE MONIHLY ELECTRC USE: AV:RAOE iIONIHIY BILT SOTAR SYSIEM gZE NEEDED: ESTIMATED LJCFRONT COSI: 500 kwh 1,000 kwh NEI COST AFTER IIXI'@]I lHTlp://www.pstRELrsa oRG/1 s45 3.75 kW S13,300 (S3 55 per watt) s8,400 59o 526,700 (S3 33 per watt) s16,700 PURCHASING WITH A LOAN ESTIMATEO AREArcVEN Beyond 20 years Beyond 20 years TOTAI SAVII{GS AFIEF 20 YE RS (SlMPrE SAVTNCS): -S6.300 (loss)-S9 900 (loss) TOTAL SAVINGS AFTEN 20 YEARS (I{EI PNESENT VALUE): -S4.200 (loss)-S6,500 (loss) Planning on oaying cash? *Average monthly b ll costs are based on ldaho Power r€s denlral Schedule 0l rates as oi I l/1/201I Syslem producton esl mates are from PMdqtlg lhnp//ovwatls nreloov^ defa!h syslem settrngs lor Eorse lD Allolher estrmales regardrngcosl and payback arefrom Goooles prorect Sunroof lhttos //wuv ooolle com/oet/sunroof#p=0). which are based on clrrenl eleclr c rales Ful!re chanqes rn raies willrmpacl the eslimated net savrngs and payback Project Sunroof uses a 2o-year loan lenn and 6 6 percent interesl rate Actualcosls, system productron ard tax credts willvary For a personalrzed eslmate, ldaho Power recommends getting several bids from ce lied installers lWhy does Project Sunroof provide two different 2o-year vaLues? https://wrrw.idahopower.com/energv-environment/green-choices/solar-power-options-cu... I I /l I /2019 Google's Project Sunroof- Idaho Power Page 2 of'2 Srmple savrngs, or the patback method httns //hbr orol201 6/04/a{€fresherrn-oayback-melhod) and oglltEsedJalle takes lo recoup your money. Net present value determrnes f il ls a good linancial investment compared to olher thinqs yo! could do wilh your money_like earnrng inlerest rnyour bank account or rnveslrng in stocksand bonds rhttns://r', ww rdahopowPI com/energ!'envrronment/€nerg://clpan-today'cletsnerlomcrrow/) loaho Power s commfied to our ooal of 1OO% ctean enerqy bv 2045. Lea'n ,nore O -='- ) Jl;L- i Cleanlo .!u rsl w:;,ift https://www. idahopower.com/energy-environment/green-choiccs/solar-power-options-cu... I I ll l12019 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION GASE NO. |PC-E-18-15 IDAHO POWER COMPANY OPENING BRIEF ATTACHMENT 4 (Language Hig h lighted) An ToACOPP Co.npany Net Metering Frequently Asked Questions What is Net Metering? Net metering is a program that allows customers to generate power on their property and connect it to a utility's power system. The electric meter "spins" backwards, providing a credit for energy produced against charges for energy used. Systems connected to the grid are referred to as "interconnected." How does Net Metering work? For residential and small commercial customers, the renewable source ofgeneration is connected on the customer's side ofthe electric meter. Energy generated is consumed inside the residence first and any excess would flow from the meter to the power lines. At the end ofthe month, if consumption outpaces production, a monthly power bill is sent to the customer for the energy consumed. Ifproduction outpaces consumption, a credit appears on the bill. What type of generation is allowed under the Net Metering tariff? Idaho Power's Net Metering program is restricted to wind. solar, hydro, biomass and fucl cell technologies. Other renewable technologies may be included in the future. Who is eligible to go on the Net Metering tariff? The Net Metering program is open to residential (Rate 0l ) and small commercial (Rate 07) customers. Other rate classes can connect up to 100 KW ofgeneration but the connection and credit are calculated differently. Is there a limit to the size ofgeneration from the customer? Yes. For residential and small commcrcial customers, generation is limited to 25 kilowatts of nameplate generation or less. Other rate classes can connect higher levels but under different requirements and rate structures. Contact Idaho Power tbr more information. Are there any costs involved to go on the Net Metering tariff? Yes. There is a $100 application fee for processing. project review, the connections, and review ofthe lines and transformers. Ifthe project requires upgrades to Idaho Power equipment, the applicant also will pay those costs. SEffi* PO. Box 70 (83707) !221 W td.ho 51. Eois€, lD 81702 much would I be lbr and how much would I have to for the I and small commercial customers are id for exccss at the same base retail that are for - Other customer classes are under a calculated The net tariff incl current rate structure and IS to does not a of tuture Contact ldaho Porver lbr nrore infirn'nation Is it a legal requirement Idaho Power provide Net Metering? No. This program lalls within a tariff filed with the Idaho Public Utilities Commission (IPUC) and is only for Idaho Power and its customers. Several other utilities serving different parts of Idaho have their own Net Metering programs that also are filed with the IPUC. Is there a limit to how many Idaho Power customers can participate in Net Metering? Yes. At this timc Idaho Power limits the total amount of customer-owned generation to 2.9 MW. The actual number of systems will vary depending on the size ofthe individual installations. Will Idaho Power offer their customers systems for sale and installation? Idaho Power does not offer or install systems for customers. There are a number ofqualified dealers that provide sales and installation services. Where can I learn more? To leam more about the net metering program, rules and application process, visit,r Visit: www.idahopower.com/netmeterinr Call 208-388-2323 or 800-488-6151 outside the Treasure Valleyo Email netmeterine(a)idahopower.com Other Links: Idaho Office of Energy Resources: energy.idaho.gov/renewableenergy Information on renewable resources in Idaho including technologies, financing options and resources. Oregon Dcpartment of Energy: ww\\,.oregon.govi EN IiRGY/index.shtm I Information on renewable resources in Oregon including technologies and financing options BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. |PG-E-18-15 IDAHO POWER COMPANY OPENING BRIEF ATTACHMENT 5 (Language Highlighted) Sffi- Once completed, please mail this form and the non-refundable $100 application fee to: U.s. Postal deliveryi ldaho Power Cornpany Express delivery: ldaho Power Company Attn: Customer Generation, CHO 8 Attn: Customer Generation, CHQS P.O. Box 70 1221 wett ldaho Street Boise, lO 83707 Boise, lD 83702 Allgeneration systems must satisrythe requirements in Schedule 72, lnterconnections to Non-Utility Generation. upon completion ofthe interconnection process, cudomers willtake seryiqe under one ofthe following s€hedules: . ldaho Residential customers - schedule 06, Residential Service On-Site Generation. ldaho Small General Service customeE - Schedule 08, Small General service On-Site Generation. All Oregon customers, and ldahg Larye Commercial, lrritation and lndustrial curtome,s - Schedule 84 Customer Enerty Production/Net MeterinE Service l. Proiect lnformation All Fields Required Contact Email Phone ()o(x) rco(-xx.u E I cenify that the information provid€d in thi5 application is correct to the best of my knowledge. I I understand that the qn-rit€ teneration and oet metering service, including the ,ate structurc and interconnection requirements, are subiect to change and that curent rates do not represent future pricinS. E I Bive my permission for ldaho Powerto discuss my project and electric usage history with the Project Contact/Company listed above. Name (Type or Print) Phone {rcq) xxx-x)ou Sitnature Email 0ate lf yorr have any queitlon3, pleare call 20&388-2559 or emall cq@idahopower.com Account Holder Account Number Must be the customer/tcout holdet on lhe ltloho Powet ecoun? Project Location Meter NumberAddress Cir, srate Zip Cu.rent Rate S€hedule_ Note: Rotes 07 ood 07 rcquire single metet design. d,..-, Rotes 0g,79,24 rcqutre two-metet destgn (untess opptytng os o Demoostrotio, p-iij Hyl'ojlTry-b-: '::o f- coimercial purpos€s? *e khedule 72 Iot rcquiremen'. (i e home business' crypto currency minin8) E stinS prolect at location? E Yes ENo f yes, total oameplate rating of eisting project (kw): - P.oiect Type Propos€d Project Size (kw) - ehase: flsingle [Three Battery Backup: flves flrfo Gcn€rato, Ba$urce/sire Maximum Size: 25 kW Reridential and Small General S€rvice; Maximum Si.e 100 kW [a,ge Commercial, lndustrial, .nd lrrigation. Si.e defined a5 nameplate capacity of photovohaic or turbine power source measu,ed in kilowatt5 (kW). E Solar: # of Module Module Rating (kwo() - Manufacturer Model Tracker:[None [single Axis ETwo A(is lf fixed, tilt f.om horiron (G90"] - orientatioo {5, Sw, sE etc Model lnv€fter #_ Watt size (each):_Manufacturcr voltage- Phase: flsingb f[ftrree ls invener Ut 1741or tEEEls4T listed?flYes INo lfno, what protection type? This appllcation is an lnterconnection request fo.existing ldaho Power accounts $/ho wish to initall renewable teneratlon systemt (solar, wind, hydro, biomass andluel cell technologies). Upon receipt of the application and fee. ldaho Power will review the project and determine if any upgrades tg the electrical grid are needed. lf no upgrades are needed, cultomer will rcceive an approvalto proceed. Application and fee expire one year aftei approval to proceed- Visit www.idahooower.com/CustomerGen€ration fo. information about the interconnection prcces5, tariffschedules, and credittranlfer €ligibility. 2. Prolect Contact (inslallerl all Flelds Requircd 3. Ac€ount Holder Acknowledgement A ll Fields Required Customer Generation Application Ewind:fofTurbineTurbineRating(kw^c)-Manufacturer- I Other: Resource type Generator Ratint (kw)- Generator Output 0 AC I DC Model#_ Company State_ BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION GASE NO. IPC-E-18-15 IDAHO POWER COMPANY OPENING BRIEF ATTACHMENT 6 (Language Highlighted) 3Effi, RE: Solar prcject for (meter Congratulations! Your Solar project at in is now complete andasof-,isincompliancewithldahoPower,Scurrentinterconnection requirements (outlined in Schedule 72 lnterconnections to Non-Utility Generation). lf you are unsure how to turn on or operate your system, please check with your installer. As part of the interconnection requirements, there are a few ongoing requirements that are important to note, These include: Providing access to ldaho Power for ongoing inspections (currently every 3 years) Notifying ldaho Power if your system is removed or offline for more than six months Submitting a new application for system expansions or relocation. These requirements help ensure and protect the reliability of ldaho Power's electrical grid. Any lapse in these ongoing requirements may requrre us to disconnect your on-site generation system until it comes back into compliance. More information about on-site renewable generation including links to the Schedules referenced above, can be found at idahopower.com/Customerceneration. lf you have any questions, you can reach us at 208-388-2559 or co@idahopower.com. Sincerely, ldaho Power Customer Generation Team