20190404Reply Comments.pdf

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LISA D. NORDSTROM
Lead Counsel
I [e-mail]
April4, 2019
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
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Case No. IPC-E-19-05
Suspension of Schedule 63, Community Solar Pilot Progam - ldaho Power
Company's Reply Comments
Dear Ms. Hanian:
Enclosed for filing in the above matter please find an original and seven (7) copies
of ldaho Power Company's Reply Comments.
Very truly yours,
Re
Lisa D. Nordstrom
P.O. Box 70 (83707)
1221 W. ldaho 5t.
Boise, lD 83702
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I n o rd strom @ id a hopowe r. com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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IN THE MATTER OF IDAHO POWER
COMPANY'S REQUESTED
SUSPENSION OF SCHEDULE 63 _
COMMUNITY SOLAR PILOT
PROGRAM.
CASE NO. IPC-E-19-05
IDAHO POWER COMPANY'S
REPLY COMMENTS
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ldaho Power Company ("ldaho Power" or "Company") respectfully submits the
following Reply Comments in response to comments filed by the Idaho Public Utilities
Commission ("Commission") Staff ("Staff'), the ldaho Conservation League ("lCL"), the
City of Boise, Sierra Club, and two individuals. ln these Reply Comments, ldaho Power
clarifies the intent of this filing, reaffirms its commitment to exploring ways to develop a
successful offering, and reiterates its plans to work with stakeholders to address possible
modifications to facilitate a future offering.
IDAHO POWER COMPANY'S REPLY COMMENTS - 1
I. BACKGROUND
On February 1,2019, ldaho Power filed Tariff Advice No. 19-02 requesting
suspension of Schedule 63, Community Solar Pilot Program ("Program").
Contemporaneously with Tariff Advice 19-02, the Company filed its 2019 Community
SolarAnnual Reportl ('2019 Annual Report") in Case No. IPC-E-16-14 as required by the
terms of the Settlement Stipulation approved by Commission Order No. 33638.2 At the
Commission Decision Meeting on February 19, 2019, Staff recommended that the case
be handled as a case filing processed by modified procedure. The Commission
subsequently ordered the tariff advice be processed as an Application.e
On March 28,2019, comments were filed by Staff, lCL, and the City of Boise.
Public comments were filed by Sierra Club and two individuals. Staff, lCL, and Sierra
Club were generally supportive and acknowledged the Company's effort to offer
renewable energy options for customers and recommended that the Commission
suspend the Program for now. The City of Boise requested that the Commission deny
the request for suspension as they consider the Program and future community solar
installations important to supporting Boise's community energy goals. The two public
commenters expressed their disappointment with the proposed suspension. One
individual asked the Commission to reassess the subscription threshold before
suspending and the other individual asked the Commission to continue the Program and
1 Because it is included on the Commission's website as an "Addendum" posted 0210112019,the
2019 Community Solar Annual Report appears to have been made part of the Commission's official record
in this docket. lf not, ldaho Power requests the Commission take judicial notice of that filing or otherwise
include it in the official record in Case No. IPC-E-19-05.
2 ln the Matter of ldaho Power Company's Application to Approve New Tariff Schedule 63, A
Community Solar Pilot Program, Case No. IPC-E-16-14 (Settlement Stipulation approved by Order No.
33638 on October 31, 2016).
3 Case No. IPC-E-19-05, Order No. 34251.
IDAHO POWER COMPANY'S REPLY COMMENTS - 2
have the Company expand its marketing efforts. The overalltheme of the comments was
a desire to continue stakeholder engagement and to find a program design that would
make a future community solar project successful.
II. REPLY COMMENTS
A. Suspension of the Communitv Solar Proqram is appropriate.
Idaho Powerfiled to suspendthe Program, ratherthan filing to cancelit, in an effort
to signal its desire to continue efforts to develop a successful offering. Suspending the
Program demonstrates the Company's desire to continue working with stakeholders to
determine a community solar program design that could be successful in a future
offering.r The Company believes that filing to cancel the Program would have sent an
incorrect message to stakeholders that ldaho Power was abandoning efforts to develop
a successful community solar program offering. The Company agrees with Staff's
characterization that "suspending the Community Solar Pilot Project will allow a
placeholder for offerings in the future, which will be informed by the lessons and
challenges revealed in this first attempt at designing an alternative energy offering."s
Idaho Power's decision to suspend the Program was made after careful
consideration and after more than two years of attempting to gain sufficient subscription
levels. A significant amount of time and effort went into the marketing and outreach to
successfully subscribe the Program, as detailed in Section ll of the 2019 Annual Report.
Program enrollment began when the Commission approved the Program in Order
No. 33638 on October 31,2016. ln the initial filing, the Company stated it reserved the
a Also stated in the Company's Response to Staff's Production Request No. 4.
s Staff's Comments at 2.
IDAHO POWER COMPANY'S REPLY COMMENTS.3
right to discontinue efforts on the Program if the project was not fully subscribed within
120 days from the commencement of the enrollment period.6 As detailed in the 2019
Annual Report, the Company was determined to provide the best opportunity for the
success of the Program, so the timeframe for enrollment was extended on multiple
occasions.T The Company also engaged large commercial customers and municipalities
with the intent to gain substantial subscriptions to move the project forward; however, the
Company eventually learned that none of the entities that expressed prior interest would
be participating.a The Company even explored reducing the size of the array, but the
economics only became worse at a smaller size.g Therefore, after more than two years
of effort to subscribe the Program at a level that would enable it to move forward, it was
apparent that this offering would not be successful, thus prompting the Company's filing
to suspend the Program and refund participants'subscription fees.
To be clear, ldaho Power's request in this case should not be viewed as an
abandonment of efforts to develop a successful program, but rather a pause to reevaluate
the Program and refund customer funds, some of which have been held and accruing
interest since October 2016. !n its comments, the City of Boise requested that the
Commission deny the Company's application, and instead "require ldaho Power to
reevaluate the financial structure of the Community Solar Program."to ldaho Power
shares the City of Boise's desire to develop a successful program and fully intends to
6 Case No. IPC-E-16-14, Pengilly Dl at 12.
7 2019 Annual Report at 5.
I /d. at 6.
e ld.
to City of Boise's Comments at 1.
IDAHO POWER COMPANY'S REPLY COMMENTS - 4
work with stakeholders to reevaluate the Program as a whole, as further detailed in the
section below. However, the Company believes a suspension is appropriate and that it is
prudent to return customer funds during this reevaluation process. As described in the
2019 Annual Report, all participants will receive a check in the mailwithin six weeks upon
Commission approval of the suspension.
B. Stakeholder Engagement to Discuss the Future of a Gommunity Solar
Program.
The comments filed in this case encouraged continued stakeholder discussions on
the future of community solar and offered several suggestions to improve the economics
of the offering for potential subscribers. ldaho Power is fully supportive of the
commenters' desire to continue discussions to develop a successful program and looks
forward to working with stakeholders to evaluate their proposed changes. However, with
regard to Staff's third recommendation to the Commission - that a community solar
program submitted in the future should be a fundamentally redesigned program - the
Company is concerned that this requirement could limit a future offering rather than
facilitate its success. For example, if a single external factor such as declining costs could
make the Program, as currently designed, more successful, the Company could be limited
from filing this potentially successful program because it has not been "fundamentally
redesigned." To be clear, the Company is fully in favor of working with Staff and other
stakeholders to discuss proposed modifications but is concerned that a Commission order
requiring the Company to fundamentally redesign the Program could have the opposite
of the intended effect.
As stated in the 2019 Annual Report, ldaho Power is committed to working with
stakeholders and customers to determine a program design that will be most successful
IDAHO POWER COMPANY'S REPLY COMMENTS - 5
in a future offering.ll ln response to the comments filed in this case and to fulfill the
Company's commitment, ldaho Power will schedule a workshop with stakeholders to
discuss community solar and program modifications that may lead to a successful future
offering.
At the workshop, ldaho Power will discuss the Company's recent work with a
stakeholder group in the Wood River Valley to develop a community solar project located
in that area. As an illustration of ldaho Power's ongoing commitment to develop a
successful program, the Company and the stakeholder group developed siting criteria
and identified two favorable public land sites in the Wood River Valley that are currently
being evaluated for potential lease options. Concurrently, ldaho Power is quantifying the
cost to develop a solar photovoltaic project in the Wood River Valley through an
uncommitted request for bid process. The land and bid costs will then be converted to a
subscription price once a leasing option is established, which will help ldaho Power and
stakeholders to evaluate subscription potential based on the subscription price. The
Company believes the lessons learned in the Wood River Valley could help inform the
potential to rework its offering.
II. CONCLUSION
ldaho Power would like to express its appreciation of the generally positive
feedback provided by stakeholders in their comments. ldaho Power agrees with the
commenters' desire to continue to work together and will schedule a workshop pending
the outcome of this case. lt is a significant challenge to create a community solar program
in ldaho that is attractive to participants without financial impacts on non-participants. The
11 2019 Community Solar Report at 10.
IDAHO POWER COMPANY'S REPLY COMMENTS - 6
suspension of the Program is a pause that will allow the Company and stakeholders to
work together on a possible future community solar program, while returning customer
funds that have been held by ldaho Power for over two years. Additionally, the Company
will update the Commission and stakeholders if a viable community solar project results
from the work with stakeholders in the Wood River Valley and requests the Commission
suspend its reporting obligation from Order No. 33638 in the interim.
ldaho Power respectfully requests that the Commission issue an order
suspending Schedule 63 without the requirement that a future program submission
should be fundamentally redesigned. The order will prompt the Company to issue refund
checks to all participants and schedule a workshop within six weeks of the Commission
decision.
DATED at Boise, ldaho, this 4th day of April 2019.
LISA N
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S REPLY COMMENTS - 7
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 4th day of April 2019 I served a true and correct
copy of IDAHO POWER COMPANY'S REPLY COMMENTS to the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Edward Jewell
Deputy Attorney General
!daho Public Utilities Commission
47 2 W est Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
ldaho Conseryation League
Benjamin J. Otto
ldaho Conservation League
710 North Sixth Street
Boise, ldaho 83702
Sierra Club
Zack Waterman
Director, ldaho Sierra Club
503 West Franklin Street
Boise, ldaho 83702
Michael Heckler
3606 North Prospect Way
Garden City, ldaho 83714
Gity of Boise City
Abigail R. Germaine
Deputy City Attorney
Boise City Attorney's Office
150 North Capitol Boulevard
P.O. Box 500
Boise, ldaho 83701 -0500
IDAHO POWER COMPANY'S REPLY COMMENTS - 8
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