20190502Procedural Comments.pdf

EDWARD JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03 l4
IDAHO BAR NO. 10446
RECEIVED
?019 t{[Y -2 Pil 3r 20
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Street Address for Express Mail:
472W, WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER'S
APPLICATION TO EVALUATE SCHEDULE
84 _ NET METERING
CASE NO. IPC-E-19-15
PROCEDURAL COMMENTS
OF THE COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Edward Jewell, Deputy Attorney General, submits the following comments.
BACKGROUND
On April 5,2019,Idaho Power Company ("Idaho Power" or "Company") filed an
Application requesting the Commission initiate a process to study the continued reasonableness
of Schedule 84. The Company requested Schedule 84 be suspended for new applicants as of
April 5, 2019, during the pendency of this matter. In IPC-E-I7-l3,the Commission approved
the Company's request to move residential and small general service customers with on-site
generation into Schedules 6 and 8. Order Nos. 34046,34147. This left commercial, industrial,
and irrigation ("CI&I") customers with on-site generation in Schedule 84.
Two dockets stemming from IPC-E-17-13 are currently underway, IPC-E-I8-15 and
IPC-E-18-16. See Order No. 34046. In IPC-E-18-15, the Company and stakeholders have met
numerous times to develop the parameters for a study that will examine the costs, benefits, rates,
and rate designs for net excess energy provided by on-site generation customers who are now in
STAFF COMMENTS 1 MAY 2,2019
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Schedules 6 and 8. See Order No. 34189. In IPC-E-18-16, the Company and stakeholders have
met numerous times to develop the parameters for a study that will examine the Company's
fixed-cost recovery and other rate design options prior to its next general rate case. See Order
No.34190.
The Company requests the Commission initiate a collaborative process to examine
the compensation structure, value of excess net energy, and measurement interval under
Schedule 84. The Company requests a timeline that allows for implementation of the findings
of the collaborative process by January 7,2020. Application at 9.
The Company states its concern that Schedule 84 customers are making investments in
on-site generation based on an assumption that retail net metering rates will continue to prevail
for Schedule 84. See Application at 5. The Company notes that a value-based rate for excess
energy is currently being discussed in IPC-E-18 -15. Id. at 5. The Company asserts retail net
metering has the potential to shift costs from net metering customers to standard service
customers. Id. at 6. The Company also points out that using the retail rate to compensate net
metering customers creates a disparity between different customer classes within Schedule 84
because each class is charged and receives different rates for energy. Id. at 6-7.
The Company states that from year-end 2018 through the end of March2}I9, there has
been a ll4% increase in Schedule 84 net metering capacity, including pending applications.
Id. at4. The Company states that the average size of installation under Schedule 84 is
roughly 99 kW to comply with the 100 kW limit on an individual meter. Id. at 6.
In Order No. 34315, the Commission declined the Company's request to immediately
suspend Schedule 84 to new applicants and instead ordered a two-week procedural comment
period in which interested parties may file comments on how the Company's Application in this
case should be processed. The Commission requested comments only on the procedure of this
case, specifically:
1) Whether and to what extent this Application impacts or is impacted by IPC-E-I8-15
and IPC-E-18-16.
2) Whether and to what extent the issues raised in IPC-E-18-15, IPC-E-18-16, and this
docket can and should be examined holistically.
3) Whether this docket should be processed according to Idaho Power's proposal on
page 8 of the Application.
STAFF COMMENTS MAY 2,20192
4) Whether the Commission should process this docket by modified procedure or by
hearings.
5) Whether the Commission should suspend Schedule 84 for new applicants while
IPC-E- l9- I 5 is being processed, and if the Commission does suspend Schedule 84 in the interim,
whether the suspension should be from the date of the filing-April 5, 2019-or some other
date.
6) Whether the Company's proposed effective date of January I , 2020 in IPC-E- I 9- 1 5 is
feasible.
STAFF ANALYSIS
Staff believes the issues identified in the Company's Application warrant collaborative
investigation. However, Staff is concemed that merging aspects of this Application with
IPC-E-18-15, as the Company has proposed, will endanger the prospects for settlement in both
cases and hinder parties' ability to meet the Company's proposed January l, 2020 effective date.
In response to the Commission's specific questions:
l) Whether and to what extent this Application impacts or is impacted by IPC-E-I8-15
and IPC-E-18-16.
Staff believes merging this Application with IPC-E-18-15 would negatively impact
IPC-E-I8-15 by expanding the scope and parties beyond what has been understood up until this
point. Introducing new parties and issues deep in the settlement process is not only inefficient,
but more importantly endangers the likelihood of, and timeline for, achieving settlement. Parties
in IPC-E-18-15 have reached general agreement on several important issues related to
calculating the value of net excess energy, but under the Company's proposal, each of those
issues would need to be re-visited to include new customer classes and new parties to the case.
Staff believes the impacts of this Application to IPC-E- I 8- l6 are less concerning because
that case is already considering the proper spread of fixed costs across all customer classes,
including those affected by this Application. However, IPC-E- 1 8- 16 is also well underway and
the Company is preparing to run model analyses on determinants agreed upon by the parties in
that case. Staff does not see a need or benefit to disrupting the progress made in IPC-E- I 8- 16 by
injecting additional parties and uncertainty into that docket by merging it in any way with this
docket.
3STAFF COMMENTS MAY 2,2079
2) Whether, and to what extent, the issues raised in IPC-E-I8-15, IPC-E-I8-16, and this
docket can and should be examined holistically.
Staff does not believe these three cases can or should be examined holistically. While
some of the issues are similar, there are many important differences that make a holistic
approach unwieldy at best. Staff believes the separation between IPC-E-18-15 and IPC-E-18-16
has been beneficial thus far and does not recommend impeding that process by combining them
with each other, or this Application, at this advanced stage. Staff believes that parties have
demonstrated they are capable of effectively tracking related, but distinct issues in parallel
dockets.
Staff believes there are significant class-specific discussions that are more efficiently
handled separately than together. The different locations, voltage conditions, and rate structures
under which Schedules 6 &,8 customers take service and Schedule 84 customers take service are
significant differences that make combining IPC-E- 1 8- 15 and the net excess energy portion of
this Application unworkable. Each of these distinctions results in different costs and benefits
that can be attributed to the two different customer groups. Because the costs and benefits are
different, that means the value of the net excess energy they produce is also likely to be different.
For example, the Schedule l9 rate structure for Large Power Service has provisions for a
contract option, a substation allowance, and a transmission line vested interest that should be
considered when establishing the appropriate value of net excess energy produced by that
customer class. It is important to determine whether the value of net excess energy should
include the value of the load reduction on transmission facilities in which a Schedule 19
customer has a vested interest. Staff believes it will be very difficult to meet the Company's
proposed deadline ofJanuary 1,2020 ifthese types ofclass-specific discussions are analyzedrn
a single case rather than simultaneously in parallel cases.
3) Whether this docket should be processed according to Idaho Power's proposal on
page 8 of the Application.
Staff does not believe this Application should be processed according to Idaho Power's
proposal on page 8. Instead, Staff believes the Application should be processed under a
settlement structure mirroring that underway in IPC-E-18-15. Therefore, Staff recommends the
Commission direct parties to begin holding settlement meetings as soon as possible and further
direct Staff to file a progress report every three months for the duration of the case to keep the
Commission updated. This process has been productive for the IPC-E-18-15 case thus far, and
4STAFF COMMENTS MAY 2,2019
Staff believes it to be a reasonable model to replicate for this Application. Staff believes parallel
paths to address these issues for the two distinct customer groups is more likely to reach
settlement than merging these dockets in any way.
4) Whether the Commission should process this docket by modified procedure or by
hearings.
Similar to IPC-E-18-15, Staff recommends that the parties work towards settlement under
modified procedure for this Application. Staff recommends the Commission set a two week
intervention period in this case.
5) Whether the Commission should suspend Schedule 84 for new applicants while
IPC-E-19-15 is being processed, and if the Commission does suspend Schedule 84 in the interim,
whether the suspension should be from the date of the filing-April 5, 2019--or some other
date.
Staff recommends the Commission not suspend Schedule 84 to new applicants during the
pendency of this case. Staff believes the Company's stated concern that customers will make
investments based on an assumption of continued retail net metering is partially resolved by the
Company's filing of this Application. Those concerns can be further resolved by the
Commission ordering Idaho Power to communicate with CI&I customers that this docket will
study the costs and benefits of on-site generation for Schedule 84 participants, and that a change
in the compensation structure for Schedule 84 is likely, which would impact the financial
viability of an on-site generation project. The Commission can also make a statement in its
Order establishing a procedure in this case that a change is likely, and that the change many
impact existing Schedule 84 customers.
If a CI&I customer still decides to make an investment in an on-site generation system
given the regulatory uncertainty, that is the customer's decision to make. So long as it is an
informed decision, Staff does not perceive a threat. Additionally, given the Company's
representation that a significant portion of growth in Schedule 84 is due to on-site generation
systems being implemented by irrigators, Staff recommends the Commission encourage the
Idaho Irrigation Pumpers Association, aparty in this docket, to convey to its membership that
this docket is underway and that it is likely to result in a different price for energy exported to the
grid by on-site generation projects.
Further, because CI&I customers have a retail rate structure for grid consumption that
collects far fewer fixed costs in the volumetric energy charge than residential customers, the
5STAFF COMMENTS MAY 2,2019
potential for cross subsidies of fixed costs (i.e. harm to other customers within the class) is
smaller. Also, the lower CI&I retail energy rate means that a future change (possibly a
reduction) in the payment for exported energy is unlikely to have the same magnitude and impact
of a similar, but as yet undetermined, change for residential customers. Both of these facts
indicate that the current situation is not an emergency that requires immediate and drastic action.
6) Whether the Company's proposed effective date of January l, 2020 in IPC-E-19-15 is
feasible.
The Company's proposed effective date of January 1,2020 may be feasible if
parallel dockets are established. Staff recommends the Commission order parties to target a
January 1,2020 effective date and work towards settlement by that date with all possible speed.
Staff proposes revising this target date later in the process if necessary.
STAFF RECOMMENDATION
Staff recommends the Commission order:
1) A two-week intervention period,
2) Parties to commence stand-alone settlement meetings for this Application and direct
Staff to file a report every three months for the duration of the case, and
3) Parties target a January 1,2020 completion date.
Respectfully submiued this Z; day of May 2019.
Edward
Deputy General
Technical Staff: Stacey Donohue
Michael Morrison
i :umisc/comments/ipce I 9. I 5ejsdmm comments
6STAFF COMMENTS MAY 2,2019
CERTIFICATE OF SERVTCE
I HEREBY CERTIFY THAT I HAVE THIS 2ND DAY oF MAY 2OIg, SERVED
THE FOREGOING PROCEDURAL COMMENTS OF THE COMMISSION STAFF,
IN CASE NO, IPC-E-Ig-Is, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
LISA D NORDSTROM
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOISE rD 83707-0070
E-mail: [e-mail]
dockets@idahopower. com
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
7IO N 6TH STREET
BOISE ID 83702
E-mail : [e-mail]
ANTHONY YANKEL
I27OO LAKE AVE
UNIT 2505
LAKEWOOD OH 44107
E-MAIL: [e-mail]
TIM TATUM
CONNIE ASCHENBRENNER
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: [e-mail]
caschenbrenner@idahopower. com
ERIC L OLSEN
ECHO HAWK & OLSEN PLLC
PO BOX 6119
POCATELLO ID 83205
E-MAIL: [e-mail]
PRESTON N CARTER
GIVENS PURSLEY LLP
60I W BANNOCK ST
BOISE TD 83702
E-MAIL: [e-mail]
kendrah@ givenspursley. com
-)-,4*"-,SECRETARI *
CERTIFICATE OF SERVICE