20191107Comments.pdf

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MAi}i A, EcHo HAw(
ERIC I,. OI,SEN
JosEPrrT. PREsroN
505 PLRSHINC AvE.. STr,. 100
POUOX6tt9
P(xr,\Irir.r o. [) 83205-61 l9
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November 6, 2019
Diane Hanian, Commission Secretary
Idaho Public Utilities Commission
I 133 1 W. Chinden Blvd.
Building 8, Suite 201--4
Boise, ID 83714
[e-mail]
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Re:CASE No.: IPC-E-18-15
COMMENTS RE: SETTLEMENT AGREEMENT BY IDAHO
IRRJGATION PUMPERS ASSOCIATION, INC.
Dear Ms. Hanian:
Enclosed you will find the original and seven (7) copies ofthe following:
Comments Re: Settlement Agreement by Idaho Irrigation Pumpers Association, Inc
Electronic copies havc bccn served per the Cerlificate of Service.
Please file the Comments in the case file. If you have any questions, please don't hesitate
to call. Thank you.
Sincerely,
Eric L. Olsen
ELO/rf
Enclosures
HtwDox\cr,rENTs\ I 343\0025\00092832.DOCX
1
iiICIIVED
I tl-
i.rlSSl0N
i -l AH l0: 52
IN THE, MATTEROF IDAHO POWER
COMPANY'S APPLICATION TO STUDY
THE COSTS, BENEFITS, ANI)
COMPENSATION OF NET I,XCESS
ENERGY SUPPLIED BY CUSTOMER ON.
SITE, GENf,RATION
CASE NO. IPC.E-IIt--I5
COMMENTS RE: SE TTLEMENT
AGREEMENT BY IDAHO
IRRI(;ATION PUMPERS
ASSOCIAl'ION, INC.
COMES NOW Idaho Irrigation Pumpers Association, Inc. ("llPA") and pursuant to
Commission's Order No. 34315 and provides its comments on the Settlement Agreement that
has been filed in this case.
I. GENERAL OBSERVATIONS
The IIPA has signed the Stipulation in this case and supports it. While the IPA does not
see the Settlement Agreement as an ideal result for its members, it does provide the best, assured
outcome for all parties involved. The IIPA would like to thank the parties lbr their spirited,
technically robust and civil discourse in reaching settlement in this case. It is often said that a
good Settlement leaves all parties somewhat unhappy. Ifthat is the case, this must have been a
very good settlement, because the IIPA gave up a great deal and so did the other parties as well.
Given the diversity ofopinions of the various parties, the IIPA believes that the Commission
should not consider the Seftlement Agreement a precedent upon which to build, butjust a first
step in a long-term process.
The Commission may ask why is the IIPA involved and concemed about a case that deals
with Residential and Small-Commercial On-Site Gencrators. The answer is twofold: First, it is
believed that On-Site Generation may begin to rapidly dcvelop. Additionally, it is believed that
llPA COMMENTS ON THE SETTLEMENT AGRIEMENT - Page I
cASti No. IPC-E-r8-r5
Eric L. Olsen (lSB# 4811)
ECIIO HAWK & OLSLN, PLI,C
505 Pershing Avc., Ste. 100
P.O. Box 6119
Pocatello, Idaho 83205
Telephone : (208) 47 8 - I 624
Iacsimile: (208) 47 8-1 67 0
Email: [e-mail]
Attorneyjbr Intervenor ldahct lrrigation Pumpers Associalion, Inc.
BEFORE TTIE IDAHo PUBLIC I]TII,ITIES COMMISSION
large scale solar generation will bc growing rapidly as well, c.g., Jackpot Solar. If On-Site
Generation is to grow, it needs to be priced appropriately, not too low to stifle growth, but not so
high as to inappropriately raise customer rates. On-Site Solar Generation should be "priced
righf'to the benefit of all customers.
Second, although this case is not about Inigation On-Site Generation, what happens in
this case will have an impact upon the setting ofrates and policies lbr Irrigation, as well as othcr,
On-site Generation customers. Although a solar panel will generate the same amount of cnergy
if it is associated with a Residcntial customer or an Irrigation customer, the usage characteristics
oleach are different and, thus, thc time and amount ofenergy generated and used by each
customer group will bc different. Ilowever, the underlying principles ofthe benelit (reduction in
utility generation/costs) arc the same. A kWh generated by an Irrigator at any given time will
have the same impact upon the system as a kWh generated by a Residential oustomer. Both
classes must receive similar treatment.
II. OL]'I'S'I'ANDING ISSU[,S
The Settlement Agreement results in a shift in how On-Site Generation is to be treated in
the futurc, compared to the petst. Some may agree with these changes and others may simply
acquicsce to thesc changes for the sake of an overall Settlement. The IIPA has two concems
regarding rates/compensation that will need to await fufure efforts in ordcr to correct. First, On-
Site Generation is being treated as simply a conservation measurc which means that it is
oompensated at the marginal cncrgy rate of any given rate schedule. Second, On-site Generation
is not being compensated at a pricc that reflects the benefit to the system and/or its impact on the
system.
()ompensation at 'l'hc Marsinal Ene rsr, R:rte
At any givcn moment, a unit ol'On-Site Generation should be valued the same whcthcr it
is generatcd by a Residential, Small Commcrcial, Commercial" Inigation or Industrial customer.
The Settlement does not do that. Undcr the Settlement, a customer is compensated at his
marginal cost of energy. I.'or Rcsidential customers using 2,010 kWh per month in the summer,
onc kWh olsolar gencration r,r,ould reduce his bill by 12.2019 cents/kWh. For a Small
llPA COMMENTS ON THE SETTLEMENT ACRE,EMENT - Page 2
CASIi NO. IPC.L.I8.t5
Commercial customer using 2,010 kwh in the summer, the reduction in his bill for one kWh of
solar is lggq-at 10.5984 cents/kWh. Note, this reduction in the bills occurs no matter whcn this
onc kWh o{'solar is generaled.
IIowcvcr, if this same Residential Customcr was using only 1,990 kWh per month (20
kWh less) in thc summer, he would be compensatcd at 10.2715 cents,&Wh for that same kWh o1
solar generation. On the other hand, if the same Small Commcrcial customer was using the same
1,990 kwh per month in t}re summer and reduces his consumption by one kWh. he is still
compensated at 10.5984 cents/kWh ry than the compensation given to a similar Rcsidcntial
cuslomer. Again, this reduction in the bills occurs no matter when this one kWh of solar is
gcncrated.
Another anomaly of the Settlement rates is that a Residential customer is compensated
fbr Excess Gcncration (amount of energy put back on thc grid) at a rate of 10.222 cents,&Wh
(winter, spring. summer, or fall). Ilowever, a Small Commcrcial customer with Excess
(ieneration is compensated at a rale o18.680 cents/kWh (winter, spring, summer, or fall)-much
Iess than a Residential customer. Once again, an undefined kWh ofenergy being put back on thc
grid should not receive a different ratc ofcompensation based upon rate class.
The discrepancies become greatly magnified when applying this same process
(compensation at the marginal energy rate) to customers with both a demand and an cncrgy
charge. Residential customers have all demand costs rolled into their encrgy ratcs. On thc other
hand, customers such as the Irrigators have a large portion oftheir demand costs collected in
their demand charges, thus lowering the energy rate that needs to be charged. Using this same
marginal energy approach to compensatc On-Site Generations 1br an Irrigator at the highest
usagc ratc would result in a reduction of only 5.7696 cents/kwh for one kWh ofsolar generation.
Thus, there are major problems with the compensation scheme for different customer
groups choosing On-Site Gcneration. A rcading olthe Commission's order in this case suggests
that rate dcsign was not intended to be a topic for Casc No. IPC-E- I 8- 15. Givcn that
interpretation, it would seem beneficial to the appropriate development of On-Site Generation to
address oompensation issues such that all customers are treated fairly.
IIPA COMMENTS ON THE SETTLEMENT AGREEMEN'l'- Page 3
CASE NO. tPC-ti-18-15
Price/Comoensation 'I'hat Reflccts the Ilencfit to 'l'hc System
The fact that On-Site Generation customers are compensated Ibr using their own
generation as if it were conservation, no1 only impacts the compensation between classes and
within each class of On-Site Generation customers, but it also impacts the ovcrall system cost
and, thus, the cosL/bencfit to all Non-On-Site Generation customers. With the exception of
losses, ifa singlc kWh is generated in a given hour on a given day, there is no reason why the
cost/benefit to the system should be any different ifthat kWh is generated by a Residential,
Small Commercial, Commercial, Irrigation, or Industrial customer. The level ol'compensation is
even further complicated by the lact that a customer on any given rate schedule oould be taking
his lasl,/marginal kWh at a diffcrcnt rate than othcrs on his same rate schcdulc. Additionally.
there should be no dif-ferencc if that singlc kWh is consumcd by the customer or put onto thc grid
for others to use either way, the Company will acquire one less kwh.
Givcn the wide diversity ofcompensation that is to be paid to diffbrently situated
customers for their own On-Site Generation, it cannot be claimed that all this compensation is
just and reasonable and in the best intercst ofall the other system customers.
As pointed out above, a kWh generated by an On-Site Generator reduces the need lor the
Company to generate one kWh at the margin. This all sounds well and good if the Company's
marginal costs are high, but what if the marginal costs are less than the price being
paid/compensated for the On-Sitc Gencration? What if the Company is in a position where it
must pay to have another utility take energy off its system and On-Site Generators continue to
add unneeded energy to the system? These are not theoretical considerations, but reallife
srtuatlons
III. CONCLUSION
IPC-E- 18-1 5 did not address rate design issues. As a result, there are many flaws in what
is contained in the Settlement Agreement that were not addresscd in this casc. 'l'hc Commission
should look at another vcnue for correcting these problems and the IIPA will provide additional
comments on these issucs in the IPC-I8-16 Fixed Cost case. Until rate design issues are
llPA COMMENTS ON THE SETTLEMII,NT ACREtIMUN'I - PAge 4
CASE NO, IPC-E-I8-I5
addresscd, On-Sitc (icncration customcrs will not be fairly treated compared to cach other and
On-Site Generators w'ill not be operated in a manner that is in the best interest ofthe system.
DATED this 6th day of November, 2019.
ECIIO HAWK & OLSEN
ERIC I,. OI,SEN
IIPA CollllllEN'I'S ON I HE SETTLEMENT AGRI-EMEN'I - Page 5
cAsE NO. rPC-ri- t- 15
)'-lCrfi
U/tt'^*-
CRIITIFI(IATE OI,' SITRVI(lll
I HEREBY CERIIFIY that on this 6th day of November, 2019, I served a true, correct
and complete copy of the aforementioned document to each of the following, via U.S. Mail or
private courier, email or hand delivery, as indicated below:
Dianc M. Hanian, Secretary
Idaho Public Utilities Commission
P.O. Box 83720
1 133 1 W. Chindcn Blvd.
Building 8, Suite 201-A
Boise, ID 83 714
[e-mail]
Lisa D. Nordstrom
Regulatory Dockets
Attorney for Idaho Power Company
P.O. Box 70
Boise, ID 83707
[e-mail]
dockets@idah opower.c()m
llPA COMMENTS ON THL SETTI,UM tlN'l' A(;Ril,EM ENT - Psgc 6
CASE NO. IPC-E-I8-I5
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U.S. Mail
Hand Delivered
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IIand Delivered
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U.S. Mail
Hand Delivercd
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Electronic Mail (Email)
Tim Tatum
V.P. of Regulatory Affairs
Idaho Power Company
P.O. Box 70
Boise, ID 83707
[e-mail]
Anthony Yankel
Idaho Irrigation Pumpers Association, Inc.
12700 Lake Avenue, Unit 2505
Lakewood, OH 44107
[e-mail]
Abigail R. Germaine
Deputy City Attomey
Boise City Attorney's Office
150 N. Capitol Blvd.
P.O. Box 500
Boisc, Idaho 83701 -0500
agermaine@)citvofboise.ore
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IT
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Russell Schiermeier
29393 Davis Road
Bruneau, Idaho 83604
buvhav@r l.com
Zack Waterman and Mike Heokler
Idaho Sierra Club
503 W Franklin St.
Boise, Idaho 83702
zack.waterman sierraclub.org
michae[.p.hcckler(Dsmail.com
Kelsey Jae Nunez
Kelsey Jae Nunez LLC
920 N Clovcr Dr.
Boise, Idaho 83703
[e-mail]
C Tom Arkoosh
Arkoosh Law Olfices
Po Box 2900
Boise, ID 83701
tom. [e-mail]
[e-mail]
IIPA COMMENl'S ()N 'I HE SETTLEMENT AGREEMENT - Page 7
cAsE NO. rPC-l.t-18-15
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Preston N. Cartcr
Givens Purslcy LLP
601 West Bannock Slreet
Boise, Idaho 83702
prestoncarter@ givenspursley.com
[e-mail]
Benjamin J. Otto
Idaho Conservation Leaguc
710 N. 6th St.
Boise, Idaho 83702
[e-mail]
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Yvonne R Ilogle
Rocky Mountain Power
1407 WN'Iemple Ste 320
Salt Lake City, UT 841 I 6
Yvonne.hosle@Dacifi corp.com
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Briana Kobor
Vote Solar
358 S 700 E Ste 8206
Salt Lake Ciry, UT 84102
[e-mail]
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David Bender
Earthjusticc
3916 Nakoma Rd
Madison, WI 53 71 I
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IIPA COMNIENTS ON THE SETTLEMENT AGREEMENT _ Page 8
cASri No. IPC-E- l8- l5
'l'ed Weston
Rocky Mountain Power
1407 WN'l'emple Ste 330
Salt Lake City, UT 841 I 6
ted.weston@pacifi corp.com
F Diego Rivas
NW Energy Coalition
1 l0l 8th Ave
Helena, MT 59601
[e-mail]
Austin Reschhoff
Thorvald A Nclson
Holland & Hart LLP
555 7th St Sre 3200
Denver, CO 80202
[e-mail]
tnel son@hollandhart. com
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Jim Swier
Micron Technology Inc
8000 S Fcderat Way
Boise, ID 83707
[e-mail]
Peter J Richardson
Richardson Adams PLLC
515 N 27th Street
PO Box 7218
Boise, ID 83702
[e-mail]
Electronic Service 0nly
[e-mail]
Elcctronic Service Only
Al Luna
ustlce.or
Nick Thorpe
[e-mail]
llPA (]()MM[,NTS ON 'I HE SU'I"ILE\IENT AGREEMEN'I' - Page 9
CASl-t N(). IPC-[-t
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5
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Flric L. Olsen
Er:ho Hawk & Olsen
Dr. Don Reading
6070 Hill Road
Boise, ID 83703
[e-mail]
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