20171222Burgos Direct.pdf

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Abigail R. Germaine
Deputy City Attomey
BOISE CIry ATTORNEY'S OFFICE
150 N. Capitol Blvd.
P.O. Box 500
Boise,ID 83701-0500
Telephone: [phone]
Facsimile: (208)384 -445 4
Email : [e-mail]
Idaho State Bar No. 9231
Attorney for City of Boise
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR AUTHORITY TO
ESTABLISH NEW SCIIEDULES FOR
RESIDENTIAL AND SMALL GENERAL
SERVICES CUSTOMERS WITII ON-
SITE GENERATION
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RECEIVED
?01? 0[c 22 PH 2: 58
t3n!"lc iruBLlC
Lr T I i" r 1-i I s- t; it u i,r t ss I 0i\,1
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
Case No.IPC-E-17-13
DIRECT TESTIMOI{Y OF STEPHAN L. BURGOS
ON BEIIALF OF
THE CITY OF BOISE
December 22r2017
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1 Q: Please state your name and business address.
2 A: Stephan L. Burgos. My business address is 150 N. Capitol Blvd., 4th Floor, Boise, Idaho
3 83702.
4 Q: Who are you employed by and in rvhat capacity?
5 A: I am employed as the Public Works Director in the Boise City Public Works Department
6 Q: What are your responsibilities in this position at the City of Boise?
7 A: As the Public Works Director for the City of Boise, I oversee the City's engineering
8 programs, planning and construction ofmunicipal facilities, enterprise fund financial management,
9 environmental programs, including water renewal services, solid waste management, recycling
10 service, and compost service, air quality and sustainability and climate protection services, and
1l energy planning.
12 Q: What professional experience do you have that you use in this position?
13 A: Over the past 25 years, my experience includes engineering, project management and
14 program management on unique and complex environmental projects in both public and private
15 organizations.
16 Q: What is your educational background?
17 A: I have a Bachelor of Science Degree in Civil and Environmental Engineering from Duke
18 University and received post-graduate training as a United States Naval Officer.
19 Q: Have you previously testified in front of the ldaho Public Utilities Commission
20 ("PUC'or'oCommission')?
2l A: No, I have not.
22 Q: What is the purpose of your Direct TestimMony in this proceeding?
Burgos, Stephan L. - Direct Testimony p. I
City of Boise
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1 A: To convey the City's concerns rvith the Application of Idaho Power Company ("IPC") in
2 Case No. IPC-E-17-13. My testimony is to provide the more generalized concerns rvith the
3 proposed Application because it is contrary to the City's efforts to promote the use of renelvable
4 energy as part of our overall approach to sustainability and addressing climate change. In addition,
5 the City recently completed construction of the first zero-net energy building in the state of Idaho.
6 The financial analysis supporting the construction of the zero-net energy building relied on
7 payback periods for the installation of photo-voltaic panels as a result of IPC's existing net
8 metering approach. A change to this approach could negatively impact Water Renewal Fund
9 ratepayers. The Water Renewal Fund is the enterprise fund operated by the City to provide used
l0 rvater collection and treatment to the Boise community. Reduction in costs to deliver these services
11 by such projects as the Zero-Net-Energybuilding directly results in a downward pressure on water
12 renewal rates.
13 Q: What is the City's interest in promoting renewable energy as part of an overall
14 approach to sustainability?
15 A: A primary example is the City's Comprehensive Land-Use Plan, developed with
l6 significant public input, which provides in pertinent part that:
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Boise's growth will happen in a sustainable, efficient, and
responsible manner that maintains and enhances its treasured quality
of life, while meeting the challenges of the future. Boise is
committed to becoming a more sustainable community by taking
steps to enhance the local, regional, and global environment. A
sustainable community is one where the integrated economic, social
and environmental systems are structured to support healthy,
productive, and meaningful lives for its residents, while laying the
foundation for a high quality of life rvithout compromising the
ability of future generations to meet their own needs.l
I Blueprint Boise, Boise's Comprehensive Plan, at p. l-19. http://pds.cityofboise.org/mediarl14868,/blueprint boise-woaoc.pdf.
Burgos, Stephan L. - Direct Testimony p. 2
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Furthermore:
Boise is committed to becoming a more sustainable community by
taking steps to reduce its impact on the environment . . . the city r,vill
also strive to address many other aspects of sustainability, such as
climate change . energy conversation and altemative energy
production. . . .2
In addition, the City has committed to energy use reduction goals for municipal buildings
10 and operations. Specifically, the City has committed to reduce energy use in existing municipal
11 buildings by 50% from the 2010 baseline energy use by the year 2030. For new municipal
12 buildings, the City has committed to increasingly stringent energy use requirements such that all
13 new buildings rvill be zero net energy by 2030. Solar energy and net metering will be a critical
14 mechanism for the City in meeting these goals.
15 Lastly, the City has initiated the development of a Renewable Energy Strategy to consider
16 how best to increase and integrate renewable energy resources and in doing so, is actively
17 promoting policies that will enhance renewable energy use.
18 Q: Are there other examples of efforts related to sustainable development and re-
19 development being led by the City?
20 A: In 2009, the Mayor and City Council approved a resolution committing the City to strive
2l to achieve the U.S. Mayor's Climate lnitiative. A citizen committee appointed by the Mayor
22 developed specific recommendations for the City to achieve specific goals by:
23 . Implementing an outreach program for residential developers and builders that
24 can demonstrate how to build energy efficient homes and provide education on
25 renewable energy sources including, but not limited to, pre-wiring and pre-
26 plumbing for potential solar installations;
Burgos, Stephan L. - Direct Testimony p. 3
City of Boise
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Initiating a program to achieve a net zero energy use in new residential
construction by 2030;
Allowing sustainable practices through amendments to the Boise City Code,
including allowances for solar photovoltaic panels on all existing and nerv
homes; and
Providing incentives for all development that include density bonuses for
sustainable practices above minimum code levels including renewable energy
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resources.
The City is moving forward lvith phased implementation of these recommendations.
ln2014, the Mayor and City Council approved a resolution committing the City to strive
to achieve the goals set forth in an updated Mayors Climate Change Agreement. The goals which
are relevant and potentially negatively impacted by IPC's Application are:
o Striving to establish and meet or exceed locally-established targets for reducing
energy use, especially fossil fuels, by taking actions in our own operations and
throughout our cofirmunities, placing particular emphasis on engaging the
community - citizens, businesses, schools and organizations - in a concerted
campaign to set and achieve such targets.
o Increasing the use of clean, alternative energy by supporting the development
of renervable energy resources, building the renewable energy technology
manufacturing capacity of cities, recovering landfill methane for energy
production, and supporting the use of waste to energy technology.
Finally, the City's recently initiated Renewable Energy Strategy rvill study potential renervable
energy production goals for the larger Boise community. The study rvill consider approaches and
Burgos, Stephan L. - Direct Testimony p. 4
City of Boise
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1 policies to promote the use of renervable energy as a clean, local supply of energy for Boise
2 residents.
3 Q: Have the Cig and IPC collaborated on efforts to achieve the City's sustainabiliry*'
4 efforts?
5 A: Yes. The City and IPC have long been partners in serving the citizens and businesses of
6 our community. As a recent example, in 2015 the City and IPC collaborated under IPC's
7 Wastewater Cohort Program to promote energy efficiency at wastewater facilities. As a result of
8 this work, energy use at the City's Lander Street Water Renelval Facility rvas reducedby 14%.
9 Another example is our partnership on the installation of electric vehicle charging stations
10 throughout the City. As part of our sustainability efforts, the City is looking to expand the viability
11 of electric vehicle use in Boise. Part of this rvork includes the need to work lvith IPC to install EV
12 charging stations around the City.
13 The City's contention with IPC's proposals in this case is not tlpical of the City and IPC's
14 interaction. However, the City has no choice but to oppose IPC's Application, as IPC is attempting
l5 to create a new schedule for net metering customers prior to clearly establishing the need based on
16 an independent study of benefits and costs associated with net metering. Implementation of what
17 the utility proposes in this case could significantly and negatively impact the City's economic
18 development and sustainability policies and goals. Accordingly, the City felt that it was essential
1.9 to participate in this case
20 Q: IPC has proposed closure of Schedule 84 to Residential and Small General Service
2l Customers E&SGS) rvith on-site solar generation and proposes a nely schedule for these
22 customers. Are there concerns that have been identified by the City rvith the proposal of a
23 nerv customer schedule?
Burgos, Stephan L. - Direct Testimony p. 5
City of Boise
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1 A: The concerns of the City are several fold:
2 o IPC's creation of a new schedule for net metering customers creates uncertainty
3 which is already having a negative effect on the installation of rooftop solar at
4 a time when the City is promoting the expanded use of renervable energy.
5 o IPC has not completed a thorough, independent study on the impacts, both
6 positive and negative, including the cost or value of distributed solar energy,
7 related to net metering to demonstrate that a new schedule is justified.
8 o IPC suggests net metering results in cost shifting to non-net metering
9 customers, but has not provided sufficient data showing that this impact is
l0 material to the company or to non-net metering customers. In addition, IPC has
I 1 failed to demonstrate how this potential cost shift by net metering customers is
12 substantially different from other distinguishable customers within the same
13 class.
14 o The City is a net metering customer at our Zero-Net-Energy Maintenance and
15 Administration Building at the Twenty Mile South Farm and could be
16 negatively impacted by the formation of a new schedule. This could then
17 negatively affect Water Renewal Fund ratepayers as the City's ability to
18 accurately assess cost implications for future net metering projects would be
19 hampered by the uncertainty associated with a nelv schedule.
20 Q: What effect do you believe IPC's proposal in its Apptication rvould have on economic
2I development in the City?
22 A: I believe the proposal would have a deleterious effect on the City's economic development,
23 both in negatively affecting businesses already housed in Boise, as rvell as sending a negative
Burgos, Stephan L. - Direct Testimony p. 6
City of Boise
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1 message to businesses that are looking to expand to nelv locations. In fact, we are already hearing
2 from companies that install solar panel systems that their business decreased dramatically almost
3 immediately after the filing of this Application.
4 As in just about any industry,lvhen companies are looking for a location for an expansion
5 or relocation, they often are looking for a community that lvould serve as a market for their
6 products and/or services; that is, they want a place rvhere the citizens rvould also be customers.
7 The new classification proposed in this Application would essentially stifle the development of
8 solar energy generation at residential or commercial buildings through IPC customers becoming
9 net metering customers. The market rvould likely hold at current levels (assuming those customers
10 maintain their systems) with limited new growth.
l1 Q: Why does the City feel the new customer class for R&SGS creates uncertainty or
12 instability in the renervable market related to net metering?
13 A: For net metering customers who have installed electrical generation units or are
14 considering doing so, the uncertainty created by a new schedule creates concern on whether [PC
15 will adjust net metering rates in the near term and therefore, leads to uncertainty on payback
l6 periods and the ultimate economic feasibility of the systems. The uncertainty on payback periods
17 has already had a negative impact on the solar installation market as consumers are waiting to see
18 how this case proceeds prior to making long term commitments on installed electrical generation
19 units. By IPC refusing to conduct a rate study and value solar prior to attempting to create a
20 separate class, customers rvill be unable to determine the economic feasibility of a rooftop solar
2l project prior to investment.
22 Q: The City proposes an alternative structure and procedure for this case. Can I'ou
23 describe rvhat this procedure rvould look like and rvhy the Citl'feels it rvould be beneficial?
Burgos, Stephan L. - Direct Testimony p. 7
City of Boise
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1 A: Yes. The City believes it is imperative that rve establish the value of net metering through
2 a detailed, independent study of both the benefits and costs of distributed solar generation prior to
3 establishing a new schedule for net metering customers. The data generated by this study is critical
4 to establishing lvhether the impacts of net metering customers are significant enough to warrant
5 the need for a new schedule. The study would also help establish the value of solar generation
6 within the IPC service area and assist in the consideration and development of future renewable
7 energy concepts or projects.
8 Q: IPC claims that allorving R&SGS customers to remain in the same schedule as other
9 customers causes a cost shifting to those other customers by subsidizing on-site generators.
10 \Yhat is the City's perspective on this issue?
11 A: Cost shifting occurs on a dailybasis throughout the IPC service territory. For example, the
12 rate paid by a residential customer that lives in an isolated service area that requires significant
13 infrastructure to deliver energy, pays the same residential rate as someone located close to a
14 generation source that requires far less infrastructure to deliver the same electricity. [n effect, there
15 is cost shifting from the isolated residential customer, whose power is more expensive to deliver,
16 to the customer located closer to the generation source, whose power is less expensive to deliver.
17 And this occurs with no benefit to tPC other than the payment of the residential rate as opposed to
18 the cost shifting that might occur as a result of a net metering customer that's also providing the
19 benefit of additional sources of energy and potentially reducing peak demands that drive the need
20 for additional generation.
21 Q: Is the City itself a net metering customer?
22 A: Yes. ln 2016, the City completed construction of the Trventy Mile South Farm
23 Maintenance and Administration Building. In keeping rvith our municipal building energy
Burgos, Stephan L. - Direct Testimony p. 8
City of Boise
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1 reduction goals, the Mayor and City Council approved the project as a pilot to test the feasibility
2 and performance of a zero-net energy building. The building \vas designed to meet an extremely
3 lorv energy use intensity (energy use per square foot) by first maximizing energy efficiency and
4 then utilizing rooftop photo-voltaic panels and ground source heat pumps as sources of renewable
5 energy. In the first year of operation, the building operated as a net positive generator of energy.
6 This resulted in shortened payback period of approximately 11 years for the total project. Because
7 thebuilding's useful life is expected to be approximately 50 years or more, this decreased payback
8 period provides operational savings to the Water Renewal Fund. As a result, this reduced cost
9 provides downrvard pressure on the water renelval rates paid by the citizens of Boise.
l0 Q: \Yhat harmful effects lvould the City itself experience if this nery class rvas
11 established?
t2 A: By establishing a nerv schedule for net metering customers rvith the uncertainty of how
13 rates may change in this new schedule, the City lvould be potentially restrained in committing to
14 further net metering projects that are exposed to a risk of potentially higher costs. This would
15 potentially preclude us from being able to meet energy reduction goals, that under current
16 conditions, are demonstrating a financial benefit to Boise citizens.
17 Q: Is there anything else you rvould like to add?
l8 A: As the cost to install and operate renewable energy sources continues to decrease, the City
19 of Boise believes that renewable energy lvill be the primary source of power in the future. Our
20 renewable energy industries were starting to show signs of promise and demonstrate how they
2l could be value added to our city's and our state's economy. Other states and other countries are
22 actively promoting this industry and recognize the significant job creation and financial benefits it
23 can have on the local economy. These communities are implementing smart policies and programs
Burgos, Stephan L. - Direct Testimony p. 9
City of Boise
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I to help those industries grow. Unfortunately, IPC's proposal of a nerv schedule for net metering
2 customers is having the opposite effect. We knolv that the IPC's proposed nerv schedule has
3 already had a negative impact on the solar installation industry because of the uncertainty it creates.
4 This will only continue and likely worsen if the new schedule is established as this creates further
5 uncertainty on how rates will be impacted and when.
6 Q: \Yhat is your request of the Commission related to IPC's Application?
7 A: The City rvould ask that this Commission deny IPC's request to close Schedule 84 and
8 create a new class for R&SGS on-site generation customers. The City would also ask the
9 Commission to direct IPC that prior to establishing a separate rate class for R&SGS on-site
10 generation customers, it engage in a process to accurately value on-site solar generation.
11 Q: Does this conclude your testimony in this case:
12 A: Yes.
Burgos, Stephan L. - Direct Testimony p. 10
City of Boise
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CERTIFICATE OF SERVICE
I hereby certify that I have on this 22nd day of December 2017,I caused a true and
correct copy of the foregoing to be served upon the follorving in the manner indicated:
Lisa Nordstrom
Idaho Power Company
PO Box 70
Boise,ID 83707-0070
lnordstrom@idahopower. com
dockets@idahopower. com
Tim Tatum
Connie Aschenbrenner
Idaho Power Company
PO Box 70
Boise,ID 83707-0070
ttatum@idahopower. com
caschenb renner(Ei dahop ower. com
Sean Costello
Deputy Attomey General
Idaho Public Utilities Commission
PO Box 83120
Boise,lD 83720-0074
sean. [e-mail]. gov
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, lD 83720-0074
Diane.holt. @puc.idaho. gov
Idahydro
c/o Tom Arkoosh
Arkoosh Law Office
PO Box 2900
Boise,ID 83701
tom. arkoo sh(E arkoosh. com
erin.cecil @arkoosh. com
Eric L. Olsen
Echo Harvk & Olsen PLLC
PO Box 6l l9
Pocatello, ID 83205
tr U.S. Mailtr Personal Deliverytr Facsimileg Other: electronic mail
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Burgos, Stephan L. - Direct Testimony p. l1
City of Boise
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elo@,echoharvk.com
Anthony Yankel
12700 Lake Ave. Unit 2505
Lake,'vood, OH 44107
tony(r).yankel.net
Mattherv A. Nykiel
Idaho Conservation League
PO Box 2308
Sandpoint, ID 83864
mnykiel @idahoconservation.ore
Benjamin J. Otto
710 N. 6th St.
Boise,ID 83701
botto(Eidahoconservation.ore
Elias Bishop
Auric Solar, LLC
2310 s. 1300 w.
West Valley City, UT 841l9
eli as.bi shop@auricsolar. com
Preston N. Carter
Deborah E. Nelson
Givens Pursley LLC
601 W. Bannock St.
Boise, lD 83702
prestoncarter@ givenspursley. com
den@ givenspursley. com
Kelsey Jae Nunez LLC
Sierra Club
920 N. Clover Dr.
Boise,ID 83703
kelsey@kelsevi aenunez. com
Tom Beach
Crossborder Energy
25609th St. Ste.2l3A
Berkeley, CA947I0
tomb@cro ssborderener gy. com
Zack Waterman
zack. lvaterm an (D,si erracl ub. ors
a
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Burgos, Stephan L. - Direct Testimony p. 12
City of Boise
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Michael Heckler
Michael.p.heskl er@ smai l. com
David H. Arkoosh
Law Office of David Arkoosh
PO Box 2817
Boise,ID 83701
davi d@arkoo shl arv. com
David Bender
Earthjustice
3916 Nakoma Rd.
Madison, WI 5371I
db ender@earthj usti ce. or e
Briana Kobor
Vote Solar
986 Princeton Avenue S.
Salt Lake City, UT 84105
[e-mail]
John R. Hammond, Jr.
Fisher Pusch LLP
PO Box 1308
Boise,ID 83701
[e-mail]
Snake River Alliance
wwilson@snakeriveralliance. ors
NW Energy Coalition
[e-mail]
Other: electronic mail
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Burgos, StephanL. - DirectTestimonyp. 13
City of Boise
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Ryan B. Frazier
Brian W. Burnett
Kirton McConkie
PO Box 45120
Salt Lake City, UT 84111
[e-mail]
[e-mail]
Intermountain Wind and Solar, LLC
1953 West 2425 South
Woods Cross, UT 84087
[e-mail]
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Germaine
City Attomey
Burgos, Stephan L. - Direct Testimony p. l4
City of Boise