20190328Comments.pdf

EDWARD J. JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10446
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S REQUESTED SUSPENSION OF
SCHEDULE 63 _ COMMUNITY SOLAR PILOT
PROGRAM
CASE NO. IPC.E.T9.Os
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission comments as follows on Idaho Power
Company's Application.
BACKGROUND
On February l,2ll9,ldaho Power Company ("Idaho Power" or "Company") filed Tariff
Advice No. l9-02 requesting suspension of Schedule 63, the Company's Community Solar Pilot
Program ('oProgram"). The Company requested an effective date of March 4,2019.
The Company filed its 2019 Community Solar Annual Report ("2019 Annual Report")
concurrently with Tariff Advice 19-02. The Company's 2019 Community Solar Annual Report
contains information on the Company's outreach and marketing efforts for the Program, Program
enrollment, subscriber characteristics, customer feedback, a customer communication plan if
suspension is approved, and other information on the Program.
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STAFF COMMENTS MARCH 28,2019
At the Commission's Decision Meeting on February 19,2019, Commission Staff
recommended that the proposed effective date of the Tariff Advice be suspended and the filing
processed by Modified Procedure. StafPs recommendation was based on its belief that the
proposed change is not minor, as required by Rule 134.01 of the Commission's Rules of
Procedure. The Commission subsequently ordered the Tariff Advice to be processed as an
Application. See Order No. 34251, Case No. IPC-E-I9-05.
STAFF REVIEW
Staff appreciates that Idaho Power Company responded to customer requests for
renewable energy options by proposing the Community Solar Pilot Program. The Program
provided customers with the opportunity to support renewable energy, but without the upfront
capital investment and liability of a rooftop solar system. In agreement with the Company, Staff
recommends suspension rather than program termination. Although the project goals were not
achieved, 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 the first attempt at
designing an alternative energy offering.
The Community Solar Pilot Program was approved by the Commission in October 2016
(Case No. IPC-E-16-14, Order No. 33638). Under the Program, the Company proposed to build
a 500 kilowatt solar array in southeast Boise. The Company estimated the cost of construction at
the time would be $1.2 million. /d
Since the Program's inception, 178 participants have subscribed to the Program with a
total of 269 subscriptions purchased.r In data provided by the Company, Staff found 31
participants had purchased 122 (45%) of the total subscriptions with one residential participant
having purchased 17 subscriptions. See Company's Response to Production Request No. 7.
Residential customers purchased 90oh of the total subscriptions. Residential on-site generation
customers purchased 60/o of the total subscriptions, while large general service and large power
service customers accounted for 3oh of the total subscriptions. See Table 1.
I Participants may purchase multiple subscriptions.
STAFF COMMENTS 2 MARCH 28,2019
Rate Schedule Total # of Participants Total # of Subscriptions
1 - Residential r60
5 - Residential Time of Use 2 2
6 - Residential On-Site Generation 9 t6
7 - Small General Service 1 I
95 - Large General Service 5 6
l9P - Large Power Service I 2
178 269
Table I PARTICIPATION BY CLASS
Staff found that 43 participants that subscribed to the Program were also subscribed to the
Company's Green Energy Program (Schedule 62). Of those 43 participants subscribed to both
programs, five participants were residential on-site generation customers and one was a
residential time-of-use customer.
When the Company filed the Application to suspend the Program, there were 148
subscriptions, equal to roughly 9.5Yo of the available subscriptions. The Company based its
request to suspend the Program on insufficient enrollment. Application at 1.
Program Design Analysis
Staff reviewed the Company's Application and the 2019 Annual Report. Staff also
submitted Production Requests to gain additional insight into program inhibitors, institutional
learning, and potential alternatives if a similar program is pursued in the future. Additionally,
Staff evaluated other successful utility community solar programs and included aspects of
successful program design and results in this analysis. Staff compared components of the Idaho
Power Program design with programs in Utah, Washington, and Minnesota. The Utah and
Washington programs were selected for comparison because they are successful benchmark
Community Solar programs offered by Avista and Rocky Mountain Power, which both fall under
the jurisdiction of the Idaho Commission. The Community Solar Gardens of Minnesota Power
JSTAFF COMMENTS MARCH 28,2019
242
were selected because it is recognized as one of the most successful and economically viable
program designs in the nation.2
Staff was able to identify three areas of improvement to increase participation in the
Program: (1) Cost of Participation; (2) Solar Energy Credit; and (3) Payment Options. An
additional factor that may have contributed to the success of the three evaluated programs was
the utilities' ability to partner with other businesses or local govefirments to provide additional
funding and renewable program support with public outreach, equipment, education, and
program design expertise.
Of the three solar programs evaluated, Staff determined that distinguishing characteristics
contributing to their success were high solar energy credits and reduced program costs with state
govemment renewable initiatives, incentives, third-party contributions, and applied Renewable
Energy Credits ("RECs") value. The evaluated programs sold solar RECs and applied the credits
towards reducing participant costs. Staff recommends the Company consider REC sharing with
participants in future offerings to reduce subscription cost, which was the primary barrier to
participation identified in the 2019 Annual Report. In addition, two of the three states allow rate
recovery of uncovered program costs. Idaho currently does not have incentives or initiatives in
place to subsidize renewable programs, which makes the Idaho Power Program more expensive
compared to the other programs and more difficult to design to avoid impact to non-participants.
Cost of Participation
The Company stated that "the upfront investment was a barrier to both residential and
business customers," and that "business customers did not want an investment that took longer
than l0 to l5 years to realize a return." Company's Response to Production Request No. 3.
Additionally, the Company stated that some customers were under the misconception that
community solar should be cheaper than the standard energy mix, leading to signihcant bill
savings.
In its filing, the Company provided survey results indicating that the relatively high initial
cost ($562 per subscription) and potential inability to recover initial cost were the two largest
reasons for the program's low subscription rate. 2019 Annual Report at 8, 9. Staff believes it is
2 Minnesota community solar hits 400 mw, Utility Dive, (August 30, 2018).
httos://www.utilitydive.com/news/Minnesota-community-solar-hits-400-mw/531305/ (last visited March 28,2019)
4STAFF COMMENTS MARCH 28,2019
possible to structure a successful community solar program so subscribers pay no up-front
subscription fees. An example of a successful community solar program with no up-front
subscription fee is Rocky Mountain Power's Subscriber Solar Program (Utah Schedule 73).
This program is fully subscribed and has a waiting list of potential subscribers. Subscribers pay
for a 200 kWh per month block of energy, as well as a per kWh delivery charge. For residential
customers, the total of energy and delivery charges is $0.117 per kwh, or $23.41 per 200 kWh
block. Customers continue to pay all other charges in the applicable tariff schedule. Staff
believes that a similarly designed program could be viable in Idaho.
Solar Energy Credit
The monthly Solar Energy Credit used in the Company's Program was calculated on a
cost-based method of pricing, which generated concern in the original tariff filing. This created
the potential to reward participants disproportionately because each rate class would receive a
different kWh solar credit, thus breaking-even at different times despite being invested at the
same level. "May not recover initial cost" was the number two barrier to subscribing to the
Program. 2019 Annual Report at9- A low Solar Energy Credit and one that varies upon class
both contribute to this being defined as an area of improvement.
Staff believes that the motivation for many participants in the Program was to support
solar projects and increase renewable generation in Idaho. In future offerings, Staff recommends
the Company design the subscription and Solar Energy Credit in a way that offers customers a
lower cost of participation. The current program has proven there is support for renewable
energy options even with high participation costs, but not at levels that promoted sufficient
participation for the Program to succeed.
Payment Options
From evaluating other successful community solar programs, Staff found that it is
possible to structure a successful community solar program that provides subscribers with a
choice of payment methods. The Minnesota Community Solar Garden Pilot Program is fully
subscribed and offers three different subscription plans: Subscribers may either pay a one-time
fee of $2,132.15 per kW capacity for a25-year subscription, or a$15.62 per kW monthly fee, or
$0.1 I l5 per kWh for the energy produced by this project. Customers also pay for transmission,
distribution, administration, and other charges associated with delivering energy.
5STAFF COMMENTS MARCH 28,2019
The Company demonstrated that both upfront and monthly billing options were possible,
although it would take significant billing system modifications for the subscription charges to be
incorporated into existing utility bills, which is why solar subscriptions had to be billed
separately under the Idaho Power Program. See Company's Response to Production Request
No. 3. The Company originally assumed that the monthly billing option would generate more
participation than the upfront option. However, the majority of subscribers did not take
advantage of the monthly billing option and paid for their subscription upfront.
Although the monthly payment option was not utilized by subscribers as much as the
upfront payment option, Staff believes that multiple payment options allow flexibility for
customers who want to participate, but can't make large, upfront capital investments.
REFUNDS
According to the Company, 77 participants have cancelled their subscriptions and have
been provided a refund. In its Application, the Company states that "Customers who wish to
have their Subscription Fees refunded immediately will receive a check in the mail within six
weeks, otherwise refund checks will be sent to all participants upon Commission approval of this
filing." Application at 10. By mailing checks, the Company is ensuring that all participants
receive their refunds independent of how the participant chose to pay. Staff believes that this is
the most appropriate way to return subscription payments to customers.
CUSTOMER COMMENTS
As of March26,2019, the Commission has received two public comments in this case.
Both commenters express their disappointment with the proposed suspension of the Community
Solar Pilot Program. They also attribute the Program's failure to a lack of promotion on the part
of the Company. One commenter requests that the Commission require the Company to reassess
the program's 1,200 subscription threshold prior to suspending the program. The other
commenter asks the Commission to require the Company to continue the Program and have the
Company expand its marketing efforts.
STAFF SUMMARY AND RECOMMENDATIONS
As outlined in the analysis of other utility community solar program designs, Staff
believes there are a number of ways to potentially reduce participation costs, increase
6STAFF COMMENTS MARCH 28,2019
subscriptions, and appeal to a larger segment of participants. Methods may include the use of
RECs as a way to reduce the cost of participation or increasing Solar Energy Credits. Offering
multiple payment options may also attract additional interest from a broader range of
participants. Staff encourages the Company to explore partnerships and third-party investments,
and to approach commercial accounts and municipalities as partners rather than participants.
With a Program designed to be more financially competitive for meeting larger stakeholder's
sustainability goals, partnerships may become more attractive and boost the subscriptions needed
for a successful community solar Program.
Staff agrees that the Company's Community Solar Pilot Program did not achieve
sufficient participation rates (subscriptions) to be viable and recommends the Commission:
1. Allow the Company to suspend the Community Solar Pilot Program and Tariff
Schedule 63.
2. Require the Company to initiate a new case if it decides to pursue a community solar
or alternative energy offering in the future. If suspension of Tariff Schedule 63 is
approved, the tariffcould be considered a placeholder for a future redesigned
community solar program.
3. If the Company chooses to submit a Community Solar program case in the future, it
should be a fundamentally redesigned program, elements to reconsider include energy
credits, subscription fees, fee options, cost recovery, accounting treatments, rate
impacts, reporting, operation and maintenance, and recovery mechanisms.
Respectfully submitted this Z:6w" day of March 2019.
J
Deputy General
Technical Staff: Kevin Keyt
Michael Morrison
Rachelle Farnsworth
Johnathan Farley
i: umisc/comments/ipce I 9.5ejkskmmrlf comments
7STAFF COMMENTS MARCH 28,2019
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 28th DAY OF MARCH 2019,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF,IN
CASE NO. IPC-E-I9-05, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
LISA D NORDSTROM
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail : lnordstrom@idahopower. com
dockets@idahopower. com
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
7IO N 6TH ST
BOISE ID 83702
E-MAIL: [e-mail]
TIM TATUM
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-mail : [e-mail]
SECRET
CERTIFICATE OF SERVICE