20191210Replacement Pages.pdf

SEffi*
VIA HAND DELIVERY
Re Case No. IPC-E-18-16
Study of Fixed Costs of Providing Electric Service to Customers
ldaho Power Company's Replacement Pages to Fixed Cost Report and
Appendix
Dear Ms. Hanian
On September 30, 2019, ldaho Power Company ("ldaho Power" or "Company") filed
a Motion to Accept Fixed Cost Report and Fixed Report in the above matter. After the filing
was made, it was discovered that Figure 21 in the report (pages 35-36), also included in
Appendix K to the report (page 83), was incorrectly referencing a prior version of the
studied rate design. Therefore, ldaho Power is submitting an originaland seven (7) copies
of the enclosed replacement pages with the corrected information in both final and
legislative formats.
The Company regrets the inconvenience of this oversight and appreciates the
opportunity to submit the corrected pages. lf you have any questions about the enclosed
documents, please do not hesitate to contact me.
lz-.-%91.1**-
Lisa D. Nordstrom
LDN:kkt
Enclosures
cc: Service List via email
An roacoRP company
RECEIVED
,J19 OiC l0 Ptt !: 06
.,. .,,t ., ,.,Llc
r r, i i r ., I'r-l,,,i.llssl0ll
December 10, 2019
Diane Hanian, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83702
Very truly yours,
LISA D. NORDSTROM
Lead Counsel
[e-mail]
CLEAN FORMAT
ldaho Power Company Rate Design Analysis
encouraging behavioral changes that may help reduce future costs. However, TOU designs that
are not cost-based may reduce the assignment, and recovery ofexisting fixed costs, resulting in a
continued need fbr a mechanism like the FCA.
Collection of Revenue
700%
90%
80%
70%
60%
50%
40%
30%
20%
LO%
O"/L
Cost of TOU (5:1)
5ervice
schedule 1
Cost of TOU (5:1)
Service
schedule 7
! Energy I Demand Service Charge
Figure 20
Collection of revenue; time of use (5:1)
Figure 2l provides an illustration ofthe percentage ofcustomers impacted by the change in rate
design from the base case to a 5:l TOU rate design. Based on current customer energy use,
69 percent of Residential will have an increase in their monthly bill. Ifthis plan was introduced
on a mandatory basis, some customers may not be able to reduce their energy during the on-peak
summer time frame and could result in larger bills for a certain customer segments as compared
to a volume-only based measurement. However, as customers understand how their bills are
aflected by their usage, customers are likely to shift their energy usage which may result in a
lower bill than the static presentation below.
Moving from base rates to a 5:l TOU rate, results in 6l percent of LIHEAP and Weatherization
customers having reductions in their bill, prior to any behavioral changes. The rcsulting bill
impact analysis is presented in Appendix K.
IPC-E-18-16 Fixed Cost Report Page 35
ldaho Power Company Rate Desagn Analysis
40%
'a 35o'4
I
E
30%
25%
75%
70%
5%
o%,rrhl
<- 5100 -S25to- -S25to-S10 -S10toS0 S0toS10 S10toS2s S2sto5100 >5100
s 100
rAllCustomers LIHEAP rWeatherization
Figure 2l
Percentage of residential customer average monthly impact-base case to 5:l TOU
Of the three rate designs evaluated in this section, the company believes the three-part rate
design that includes a demand component would result in the most equitable assignment ofcosts
to customers depending on the demand placed on the system by each customer within the class.
As customer and demand-related costs are moved out ofthe energy charge, collection ofthe
revenue requirement is less exposed to eroded fixed cost recovery when customers rcduce
overall energy consumption. While the rate designs presented in Figurc l5 do not perfectly align
with the underlying cost structures for each class, a three-part design would represent a vast
improvement in aligning fixed cost collection with cost causation than the current rale design.
B. Residential and Small General Service On-Site Generation
Customers (Schedules 6 and 8)
l,ike standard service Residential and Small Gencral Service customers. customers currently
taking service under Schedule 6 (Residential On-Site Generation Scrvice) and Schedule 8 (Small
General Servicc On-Site Gcneration) pay a fixed monthly service charge of$5 and a monthly
seasonal energy charge with tiered energy rates; the current rates under each of these service
schedules mirror those ofthe standard scrvice offerings. Schedule I and Schedule 7.
The difference between Residential customers taking service under Schedule 6 (or Small General
Service customers taking service under Schedule 8) and those taking service on Schedules I and
7 is that customers on Schedules 6 and 8 produce some or all oftheir monthly or annual energy
requirements, but rely on Idaho Power to balance those energy needs when their systems are no1
generating. The on-site gencration systems installed by customers are designed to generate
electricity when resources (e.g., rooftop solar) are available-without regard to when the
customer actually consumes electricity. To-date, customers with on-site generation have been
billed under a billing construct commonly referred to as net metering where Idaho Powcr
measures and bills the customer based on each customer's net monthly consumption.
Page 36 IPC-E-I 8-'16 Fixed Cost Report
ldaho Power Company Appendix K
Schedule 1
BGo Cale
TFr€d Volumstric Rrtes
Studi€d Case
TOU (5:'l)
Energy Ch.rgeTiers Sunmer Hol}summer
o-a00 kwh $0 083026 s0.077146
801 2 000 k\,Vh $0 0SS835 $0 085051
over 2 000 kwh $0 118597 $0.094192
Energy Chrrge
Summor Non-Summer
s0.?75066
s0.05,{708 s0.054708
Summer Non.Summea
Noh-Summet S€rvice Ctarqe $17.28 $1728
Servlce Charqe 15.00 $5.00
Summ€r Nocsummer
A\€rage iront{y Consump{on
A\€rage Bill lncrease
A\erage Bill Decrease
A\,erage O€ral Bill lnpact
93,6
$9.67 (288,,160 cullomoG)
-$r8.59 (135,962 aElomeis)
30 75
On.Poak
Olt-Pe.k
3-10 PMI\ilF i\uA
Al olhe. hdrrs
Avg $ Chang€
(ironthlY)
Number of
Customers'
oh ot
Customeas
CumuhivG
v.
Ave.age
Base Caae
Bil
Avarago
Studhd C..€
Blt
Average
ironthv Diff
Average
Annual Diff
-14o
3.9'I
GT $25 LE $100
GI S15 LE 625
GT $10 LE 115
GT $5 LE $10
GI TO LE $5
61
35,669
117,137
85,058
50,159
o.o1va
8.40%
27.67%
20.u%
11.42%
o.o1%
E.42%
36.09%
56.13%
67.95%
s68
$57
s52
963
s80
$95
s74
s64
t70
s82
$27
$17
i12
$8
s3
$u2
$202
61,18
$s3
(|2
No Chanqe 0 156 o-O.a% 67.w%s88 s88 t0 s0
d)
B
GI IO LE 35
GT
'5
LE 3iO
GT!10 tE 115
GT t15 LE t25
GT $25 tE 3100
GT 3100
33,607
21,617
18.672
25.129
32,063
1,300
7.97%
5.60%
1.10%
5.990,6
0.31%
75.95%
41.75%
86.15%
92.14V.
99.89%
100.00%
$s5
$t 1t
$126
$148
s211
$5,{2
393
$104
t114
s129
sl72
s386
-$2
-$7
-912
-120
-642
-s156
-128
'$9
-1149
-5235
-$500
-$1,869
'Cusromerswithlesslhan12monihsordalawereexclud€drromlheUllimpacianalysis.
40%
E
E
35%
30%
25%
20"n
75",4
70%
o%
< 5100 -S25 to - -S25 to -S10 -510 to S0 S0 to S10 S10 to 925 S25 to 5100 > 5100
Sloo
I All Customers IIHEAP I Weatherization
Percentage of Residential customer average monthly impact-base case to 5:'l TOU
IPC-E-1 8-16 Fixed Cost Report Page 83
Appendix K
Schedules I and 7 Base Case compared to Time of Use (5:1) Rates
LEGISLATIVE FORMAT
ldaho Power Company Rate Design Analysis
encouraging behavioral changes that may help reduce future costs. However, TOU designs that
are not cost-based may reduce the assignment, and recovery ofexisting fixed costs, resulting in a
continued need for a mechanism like the FCA.
Collection of Revenue
700vo
90%
80%
70%
60%
50%
40%
30%
10%
70%
o/.
Cost of fOU (5:1)
Service
Cost of TOU (5:1)
Service
Schedule 1 Schedule 7
! Energy I Demand Service Charge
Figure 20
Collection of revenue: time of use (5:'l )
Figure 2l provides an illustration ofthe percentage ofcustomers impacted by the change in rate
design from the base case to a 5: I TOU rate design. Based on current customer energy use,
69 percent of Residential will have an increase in their monthly bill. Ilthis plan was introduced
on a mandatory basis, some customers may not be able to reduce their energy during the on-peak
summer time frame and could result in larger bills fbr a cenain customer segments as compared
to a volume-only based measurement. However, as customers understand how their bills are
affected by their usage, customers are likely to shift their energy usage which may result in a
lower bill than the static prcsentation below.
Moving from base rates to a 5: I TOU rate, results in 6l percent of LIHEAP and )3-pereent-tr{.
Weatherization customers having reductions in their bill. prior to any behavioral changes.
The resulting bill impact analysis is presented in Appendix K.
IPC-E-18-16 Fixed Cost Report Page 35
ldaho Power Company Rate Oesign Analysis
'o
.E
Eo
40%
35%
3004
250/6
20%
75%
10%
5%
ooA rl
<- s100 -S25 to - -S25 to -S10 -S10 to S0 S0 to S10 S10 to S25 S25 to 5100 > 5100
Sloo
lAll Customers , LIHEAP !Weatherization
50"/6
E n".a
E 30%
E o%2
o%II ti 70%
<- Sloo -525to- -S25to-S10 -S10toS0 S0toS10 Sr0toS25 S25to5100 >5100
Sloo
IAllCustomers ! LIHEAP I Weatherization
Figure 2l
Percentage of residential customer average monthly impact-base case to 5:1 TOU
B. Residentialand Small General Service On-Site Generation
Customers (Schedules 6 and 8)
Like standard service Residential and Small General Servicc customers. customers currently
taking servicc undcr Schedule 6 (Residcntial On-Site Generation Service) and Schedule 8 (Small
General Service On-Site Generation) pay a fixed monthly servicc chargc of$5 and a monthly
Page 36 IPC-E-1 8-16 Fixed Cost Report
Of the three rate designs evaluated in this section, the company believes the three-part rate
design that includes a demand component would result in th€ most equitable assignment ofcosts
to customers depending on the demand placed on the system by each customer within the class.
As customer and demand-related costs are moved out of the cnergy charge, collection of the
revenue requirement is less exposed to eroded fixed cost recovery when customers reducc
overall energy consumption. While the rate designs presented in Figure l5 do not perfectly align
with the underlying cost structures for each class, a three-part design would represent a vast
improvement in aligning fixed cost collection with cost causation than the current rate design.
ldaho Power Company Appendix K
Appendix K
Schedules 1 and 7 Base Case compared to Time of Use (5:1) Rates
Schedule l
Balo Crse
Tbred Volumet.k Rates
Studied Cce
TOU (5:1)
TieIs
Enerqy Chrrqe
Sulttltea Nonlsumnor
Energy Charge
Summer Non-Summef
90.0a3O26
$0.oss35
$0.1185S7
s0.077146
s0 0a5051
$0.094192
s0.275066
$0.054708 $0.054708
Summer Non-Surxner
Summer Non-Summer
Service Charqe t5 00 s5 00
Summcr l{on-Summcr
Alerage Monhly Consumptm
A\erage Bill lncrease
A\€rage Bill Decrease
A\erage O\€rall Bll lmF'ect
956
$9.87 (286.460 custsneG)
-S18.59 (135.962 custmers )
$0.75
On-Pe.k
Of"Pe.k
Avg I Charg€
{ilonthk)
Number of
Custoncrsr
.ad
CrEtdrErs
Cumulrtive
Avorago
Bale Cala
Bil
Aveiagc
Sludbrl Casa
Bal
Average
tibnthtv Oi6
Average
Annu.l D I
ao
I
GT S25 LE S1M
GT $15 LE $25
GT $10 LE $15
GT $5 LE $10
GT $O LE $5
61
35.6€9
117,437
85,058
50,159
0,01%
E.40%
27.67%
20.u%
11.42%
o.o10/,
4.12r/r
36.090/0
56.130/o
67%
s68
$57
s52
s63
$80
s95
s74
$Br
$70
$82
s27
$12
$8
$3
s322
s202
$148
s93
s32
No Chanoe 0 67.98%$88 ffia $o $0
in
iI
GT $O LE $5
GT $5 LE S1O
GT $10 LE 515
GT $1s LE S25
GT S25 LE $1@
GT $100
-s2
-s7
-$12
-$20
'$42
,$1s6
-$28
_tEg
-t149
-1235
,t500
-$1,869
Cuslomers wilh less thar 12 modhs or dala we.e etclud€d rrrn lhe b rmpaci aralys s
Page 83 IPC-E-I 8-16 Fixed Cost Report
e800 kwh
a01-2,000 kwh
Over 2,000 kwh
Sewice Chaiq€ $17 28 S17 28
}10 PMi'F I\/A
Al olher horrs
156 0.(x%
33.807 7.97. 75.95%
?4.617 5.4tr/6 A1-75%1E672 4lryh 86.15%
25 49 5.990/6 S2-11y,
32.063 7.55% S9.69,6
1.300 0.31% 100.0oY"
395 $S
t1r1 $104
9126 1114
s14a $129
3214 $172
$542 $366
ldaho Power Company Appendix K
50%
o.
E
40%
30v.
to%
ooa II
<- s100 -s2Sto- -s2sto-s10 -s10tos0 s0tos10 s10tos25 s25tos100 >s100
Sloo
r All Customers LIHEAP t Weatherization
40"/o
E
E
Eo
35%
30%
25%
20/.
t50/.
7004
5"/"
0%a
<- Sloo -s25to- -525to-s10 -s10tos0 s0tos10 s10tos25 525tos100 >s100
Sloo
r All Customers LIHEAP I Weatherization
Percentage of Residential customer average monthly impact-base case to 5:1 TOU
IPC-E-1 8-16 Fixed Cost Report Page 83
ll I I