20211130Reply Comments.pdf

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November 30,2021
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 West Chinden Blvd., Building 8
Suite 201-A
Boise, ldaho 83714
Re: Case No. IPC-E-21-21
ln the Mafter of the Application of ldaho Power Company's Application to
lnitiate a MultLPhase Collaborative Process forthe Study of Gosts, Benefits,
and Compensation of Net Excess Energy Associated with Customer On-
Site Generation
Dear Ms. Noriyuki:
Attached for electronic filing, pursuant to Order No. 35058, is ldaho Power
Company's Reply Comments in the above entitled matter.
lf you have any questions about the attached documents, please do not hesitate
to contact me.
Very truly yours,
LISA D. NORDSTROM
Lead Gounsel
[e-mail]
LDN:sg
Aftachment
fr. !.(^1,t,-*,
Lisa D. Nordstrom
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I n o rdstrom@ ida hopowe r. com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO PO\A/ER
COMPANY'S APPLICATION TO INITIATE
A MULTI.PHASE COLLABORATIVE
PROCESS FOR THE STUDY OF COSTS,
BENEFITS, AND COMPENSATION OF
NET EXCESS ENERGY ASSOCIATED
WITH CUSTOMER ON-SITE
GENERATION
CASE NO. |PC-E-21-21
IDAHO POWER COMPANY'S
REPLY COMMENTS
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After considering the additional feedback received from the ldaho Public Utilities
Commission ("Commission") Staff, intervenors, and the public, ldaho Power Company
("ldaho Powef' or "Company") submits its Reply Comments pursuant to the
Commission's Notice of Scheduling in Order No. 35193. ldaho Powerbelieves its Revised
Study Framework filed as Attachment 1 to its November 16, 2021 Final Comments,
provides a reasonable basis for the Company to conduct the study as ordered by the
IDAHO POWER COMPANY'S REPLY COMMENTS. 1
Commission.l'2
The Revised Study Framework addresses issues raised in the Parties' Final
Comments also filed on November 16, 2021, and incorporates those items that should be
included in the scope of the study. Therefore, ldaho Power's Reply Comments focus on:
(1) addressing suggestions from Parties regarding the Company's Revised Study
Framework; (2) reiterating why the Company believes lClP's proposal is out-of-scope;
and (3) responding to comments suggesting a third-party consultant should conduct the
study. These Reply Comments should be considered an extension of ldaho Power's lnitial
Comments3 and Final Comments,a which provide a more in-depth analysis of the areas
proposed for study and feedback from Parties and public comments.
The Revised Study Framework will provide for a comprehensive study of the costs
and benefits of on-site generation, as directed by the Commission in Order Nos. 34046
and 34509. ldaho Power recommends that the Commission approve the Revised Study
Framework as the final scope to conclude the study design phase so the Company can
begin its comprehensive study of the costs and benefits of on-site generation.
1 ln the Matter of the Application of ldaho Power Company for Authoity to Establish New Schedules for
Residentialand SmallGeneralServrbe Customers with On-Site Generation, Case No. !PC-E-17-13,
Order No. 34046 at 3'l (May 9, 2018) (the Commission ordered ldaho Power to "initiate a docket to
comprehensively study the costs and benefits of on-site generation on ldaho Power's system, as well as
proper rates and rate design, transitional rates, and related issues of compensation for net excess energy
provided as a resource to the Company.')
2 ln the Mafter of the Petition of ldaho Power Company to Study the Cosfg Benefits, and Compensation
of Net Excess Eneryy Supplied by CustomerOn-Srte Generation, Case No. IPC-E-18-'t5, Order No.
34509 at 9 (Dec 20,2019) ('The Company must prepare and file a credible and fair study on the costs
and benefits of distributed on-site generation to the Gompany's system." ('...Commission Staff and the
Company will both host public workshops to share information and perspectives on net-metering program
design with the public and listen to customer concerns and input.')
3 fdaho Power InitialComments (Oct 13,2021).
a ldaho Power Final Comments (Nov 16,2021)
IDAHO POWER COMPANY'S REPLY COMMENTS - 2
I. PROCEDURAL BACKGROUND5
On September 8, 2021, the Commission-issued Notice of Parties included the
Company, Commission Staff ("Staff'), lndustria! Customers of Idaho Power ("lClP'),
ldaHydro, ldaho Conservation League ("lCL'), ldaho CIean Energy Association ("ICEA"),
Clean Energy Opportunities for ldaho ("CEO'), Idaho Solar Owners Network ("ISON'),
Micron Technology, lnc. ("Micron"), City of Boise, Kiki Leslie A. Tidwell ("Tidwell"), Richard
E. Kluckhohn and Wesley A. Kluckhohn ("Kluckhohn"), ABC Power Company, LLC ("ABC
Powe/'), and ldahome Solar, LLC ('ldahome Sola/') ("lntervenors" and collectively, the
"Parties').
On October 13,2021, lnitial Comments were filed by the Company, Staff, lClP,
ICL, ICEA, CEO, ISON, City of Boise, Tidwell, and Kluckhohn.
On November 16, 2021, Final Comments were filed by the Company, Staff, lClP,
CEO, ISON, and City of Boise. As of November 29,2021, there were approximately 183
public comments filed. Many customer comments have focused on providing a fair study
that moves ldaho towards a clean energy future.
II. IDAHO POWER'S REPLY COMMENTS
A. ldaho Power's Revised Studv Framework Provides a Reasonable Basis for
the Scope of a Comprehensive Studv of Costs and Benefits of On-Site
Generation.
Following submission of its Revised Study Framework (Attachment 1) and Final
Comments on November 16, 2021, the Company has continued to evaluate Parties'final
5 The Company's lnitial Comments and Final Comments contain more detailed procedural background
information.
IDAHO POWER COMPANY'S REPLY COMMENTS - 3
commentso and public comments received to date. While stakeholders provide
suggestions on specific methods for conducting the study or what their opinion is on a
specific topic, after careful review of those comments, the Company believes the Revised
Study Framework incorporates the necessary and appropriate components for a
comprehensive study to be conducted by ldaho Power.
To the extent that a particular pafi provided a recommendation in their final
comments to modiff the scope of a study, the Company provides these Reply Comments
stating what is already included in the Revised Study Framework.
1. Public Comments
Public comments generally requested and/orsuggested more detailand specificity
in the Environmental and Other Benefits section.T The Company responded to this
suggestion in the Revised Study Framework by including the same areas of study as the
Avoided Environmental Costs and Other Benefits in the Scope of Rocky Mountain
Power's On-Site Generation Study set forth in Attachment A in Final Order No. 34753.8
The Company notes that public comments have not objected to the components of the
Export Credit Rate in the lnitial or Revised Study Framework.
2. Commission Staff Comments
Staffs Comments stated that the Export Credit Rate ("ECR") should be based on
only those financiallv quantifiable costs that the Companv avoids and the benefits that the
6 Parties'final comments were also filed on November 16,2021
7 Revised Study Framework at 3 (Attachment 1 to ldaho Power's FinalComments dated Nov 16,2021).
8 ln the Matter of the Application of Rocky Mountain Power to Close the Net Metering Program to New
Servrbe & lmplement a Net Billing Prcgram to Compensate Customer-Generators for Expofted
Generation, Case No. PAC-E-19-08, Order No. 34753, Attachment A at 3.
IDAHO POWER COMPANY'S REPLY COMMENTS.4
Comoanv receives that are tvpicallv included in customer rates.e Staff additionally noted
that the ECR should adhere to the principle of ratepayer indifference and avoided costlo
to ensure other customer classes are indifferent whether energy is supplied by exports
from customer generators or from other resources supplying the Company's system to
avoid inter-class subsidies.ll ldaho Power agrees with this applicability to inform the
scoping criteria of the Export Credit Rate components. The Company believes that the
Revised Study Framework, taken in context with this applicability criteria, addresses the
issues and suggestions from both Parties and the public comments.
3. Micron Final Comments
Micron's final comments recommend including an evaluation of coshof-service
methodologies and potential rate designs for impacts to all rate classes.l2 Micron
encourages the Commission to include cost-of-service and rate design issues in the study
framework.l3 ldaho Power agrees with Micron's recommendation and believes that the
Revised Study Framework addresses Micron's comments.la
e Staff Comments at 3 (Nov 16,2021) (emphasis added).
1o ld. al3, footnote 4. ("Avoided costs under PURPA means the incremental costs to an electric utility of
electric energy or capacity or both which, but for the purchase from the qualiffing facility or qualifuing
facilities, such utility would generate itself or purchase from another source. See 18 C.F.R. S 292. 101
(b)(6). Order No. 25884 at 4 states that "[r]atepayers should be indifferent to whether a resource serving
them was constructed by a utility or an independent developer. The cost and quality of service provided
by either should be the same. Ratepayers should not be asked to subsidize the QF industry through the
establishment of avoided cost rates that exceed utility costs that would result from an effective least cost
planning process." Order No. 32262 at 8 states that "PURPA entitles QFs to a rate equivalent to the
utility's avoided cost, a rate that holds utili$ customers harmless - not a rate at which a project may be
viable.")
11 /d at 3.
12 Micron FinalComments at 2 (Nov 16,20211.
13 ld. al4.
1a Revised Study Framework at 4.
IDAHO POWER COMPANY'S REPLY COMMENTS.5
4. CEO Second Comments
CEO provides two (2) proposed additions to the scope of a study - ldaho Power
believes these are already addressed in the Revised Study Framework.
First, CEO suggests that Mr. Ellsworth's direct testimony in Case No. !PC-E-21-32
concerning modifications to ldaho Power's demand response program implies "reduced
load caused by selfgeneration provides flexibility/reserves benefits to the operators of
ldaho Power's system that extend beyond just reductions in the resource capacity needed
to meet peak loads" and should be included in the scope of a study.15 Mr. Ellsworth's
direct testimony does not mention flexibility/reserves benefits. lnstead, it addresses the
benefits of resource utilization. These are benefits that are already addressed in the
avoided energy component of the Revised Study Framework.16
CEO also proposes thatthe load reduction benefits associated with self-generation
should be quantified based on total generation, not just on the subset of generation
exported.lT To the extent self-consumption reduces on-site generation customers' load,
the benefits would be captured by a cost-of-service study; therefore, this proposal is
addressed in the Cost-of-Service & Rate Design section of the Revised Study
Framework.ls
15 CEO Second Comments at 9 (Nov 16,2021).
16 Revised Study Framework at 1.
17 CEO Second Comments at 9.
18 Revised Study Framework at 4.
IDAHO POWER COMPANY'S REPLY COMMENTS - 6
5. City of Boise Formal Gomments
The City of Boise recommends including areas of study that the Commission
directed Rocky Mountain Powerto study in Case No. PAC-E-19-08.1sThe Revised Study
Framework reflects this additionaldetailas the Commission included in Rocky Mountain
Power's scope of a study.2o The City of Boise also recommends the Company study
specific additional environmental benefits and avoided costs of energy benefits. The
Company believes these additional areas of study are already generally covered in the
Export Credit Rate section of the Revised Study Framework.2l
6. ISON Commenb
ldaho Power interprets the comments from ISON to generally align with the need
for a comprehensive study of on-site generation to include cost-of-service within the
scope of a study.zz This recommendation is addressed in the Cost-of-Service & Rate
Design section of the Revised Study Framework.23
B. Off-Site "Non-Exportinq" ls Out-of€cope.
lClP's proposalfiled on September 15,2021, suggests that the scope of the study
should include "off-site non-exporting DER.'2a ln ICIP's Final Comments, it incorrectly
concludes that off-site generation is already "found in Schedule 84" and the 'concept of
le City of Boise FormalComments at 3 (Nov 16,2021).
20 Revised Study Framework at 3.
21 ld. al'l-3.
22ISON Comments at 1-3 (Nov 16,2021).
23 Revised Study Framework at 4.
24ICIP Comments at 1-4 (Sep '15,2021).
IDAHO POWER COMPANY'S REPLY COMMENTS - 7
meter aggregation is currently artificially restricted to semi-contiguous properties."25 ldaho
Power does not offer off-site, or virtual, net metering and the criteria for transferring
excess net energy credits is not restricted'artificially," as mischaracterized by lClP in its
final comments.26
ln Order No. 32846 the Commission stated, "The net metering tariff is for those
who wish to offset a portion of their load."27 While the Company recognizes that disparate
seasona! consumption and generation profiles may result in over- or under- production
during certain months, the Company does not believe that a net metering customer
should receive financial benefits for over-sizing a system that consistently generates more
electricity than is consumed at the associated retail service point. An overly broad ability
to aggregate meters would allow net metering customers to game aggregation rules to
effectively become power sellers. As the Commission stated, "Those wishing to be
wholesale power providers should look to Schedule 86 as the vehicle for that type of
transaction."2s The Company agrees and believes Schedule 86 is the appropriate avenue
for customers who wish to sell power to the Company for financial compensation.
Additionally, the Company notes that it has already included a section in its Revised Study
Framework under lmplementation lssues to assess whether credits can be used to offset
other accounts held by the same customer.2s
25 lClP Final Comments at 2 (Nov 16,2021).
26 ld. a|24.
27 ln the Mafter of ldaho Power Company's Application for Authority to Modify rts Nef Meteing Seruice to
lncrcasetheGenerationCapacity Limit,Case No.|PC-E-12-27,Order No.32846 at 15 (July 13,2013).
28 ld.
2e Revised Study Framework at 4.
IDAHO POWER COMPANY'S REPLY COMMENTS. S
Further, lClP's characterization of this theoretical arrangement being an off-site
"non-export' system is flawed and misleading. Customers can install a non-exporting
system pursuant to Schedule 68, lnterconnections to Customer Distributed Energy
Resources, behind their point of delivery for retailservice ('Schedule 68"). Non-exporting
systems are required to install a non-export control system to ensure output is not
exported to the grid. The proposal by lClP is fundamentally different than a non-exporting
system installed pursuant to the Commission-approved interconnection requirements
under Schedule 68.
In essence, lClP's proposal is to study and evaluate off-site exporting systems that
effectively bypass the generator interconnection process as a wholesale power provider
and compensate all energy at the retail rate. The purpose of net metering service is to
provide customers an option to offset their own energy consumption with on-site
generation. The Company agrees with Staffs analysis that lClP's proposal is outside the
Scopeof''studyingthecostsandbenefits@.,'30
C. ldaho Power Must Prepare and File the Studv.
The Company believes that the Commission was clear in its directive for preparing
a study: "the Companv must prepare and file a credible and fair study on the costs and
benefits of distributed on-site generation to the Company's system."31 As a regulated
utility, Idaho Power routinely conducts studies to inform the Commission's decisions
regarding ratemaking matters. ldaho Power has the expertise and information to complete
30 Staff Comments at 16 (Oct 13,2021); Order No. 34036 at 31 (emphasis added) (directing the Company
to'initiate a docket to comprehensively study the costs and benefits of on-site generation on ldaho
Power's system, as well as proper rates and rate design, transitional rates, and related issues of
compensation for net excess energy provided as a resource to the Company.')
31 Order No. 34509 at 9 (emphasis added)
IDAHO POWER COMPANY'S REPLY COMMENTS - 9
a comprehensive, credible study at no incremental cost to customers. As the Commission
stated, "the study will be one critical component of Commission review but will not
preclude Parties from introducing and the Commission considering other relevant pieces
of information when it's time to address proposals for new program implementation."32
Further, Staff indicated they do not believe it is practical to have a third-party
consultant conduct the study, given the extensive scope and data necessary to produce
the study.33 The Company also emphasizes a concern Staff raised in its initialcomments
- a third-party consultant would likely need a contract and need to be paid. An
independent third party conducting the study would increase costs and require
authorization to determine how these costs should be recovered (i.e., customer-
generators or all customers).s Any pafi to the current proceeding may conduct its own
study and present the results for the Commission's consideration as part of the study
review phase.
il. coNcLustoN
Idaho Power appreciates the input received in the study design phase during the
public workshops, the Commission's public hearing, and written comments to date.
Having incorporated this input into the Company's Revised Study Framework filed on
November 16, 2021 as Attachment 1, the Company respectfully requests that the
Commission issue an order with a final approved scope and direct the Company to begin
the comprehensive study of the costs and benefits of on-site generation.
32 Order No. 34753 at 9.
33 Staff Comments at 14 (Oct 13,2021)
s Staff Comments at 6 (Nov 16,2021).
IDAHO POWER COMPANY'S REPLY COMMENTS - 10
DATED at Boise, ldaho, this 30h day of November 2021.
X*!.ff"1.t.^,
LISA D. NORDSTROM
Attomey for ldaho Power Company
IDAHO PO\AJER COMPANYS REPLY COMMENTS . 1 1
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 30b day of November 2021,1 served a true and
correct copy of IDAHO POWER COMPANY'S REPLY COMMENTS upon the following
named parties by the method indicated below, and addressed to the following:
Commission Staff
Erick Shaner
Deputy Aftomey General
ldaho Public Utilities Commission
472 West Washington Street (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
ldaHydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
913 W. River Street, Suite 450
P.O. Box 2900
Boise, ldaho 83701
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North 6th Street
Boise, ldaho 83702
ldaho lrrigation Pumpers Association, lnc.
Eric L. Olsen
ECHO HAWK & OLSEN, PLLC
505 Pershing Avenue, Suite 100
P.O. Box 6119
Pocatello, ldaho 83205
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e rin.cecil@a rkoosh.com
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IDAHO POWER COMPANY'S REPLY COMMENTS - 12
City of Boise
Ed Jewell
Deputy City Attorney
Boise City Attorney's Office
150 North Capitol Boulevard
P.O. Box 500
Boise, ldaho 83701 -0500
ldaho Clean Energy Association
Kevin King
Board President
P.O. Box2264
Boise, lD 83702
lndustrial Customers of ldaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
Micron Technology, lnc.
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart, LLP
555 Seventeenth Street, Suite 3200
Denver, Colorado 80202
Jim Swier
Micron Technology, !nc.
8000 South FederalWay
Boise, Idaho 83707
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bo i secitvattornev@citvofbo ise. o ro
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q loa roa no-amari@holland ha rt. com
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IDAHO POWER COMPANY'S REPLY COMMENTS - 13
Glean Energy Opportunities for ldaho
Kelsey Jae
Law for Conscious Leadership
920 N. Clover Dr.
Boise, ldaho 83703
Michael Heckler
Courtney White
Clean Energy Opportunities for ldaho
3778 Plantation River Drive, Suite 102
Boise, ldaho 83703
Richard E. Kluckhohn
Wesley A. Kluckhohn
2564 W. Parkstone Dr.
Meridian, lD 83&to
Kiki Leslie A. Tidwell
704 N. River Street #1
Hailey, ldaho 83333
ABC Power Co. LLC
Ryan Bushland
184 W. Chrisfield Dr.
Meridian, lD 83646
ldahome Solar, LLC
Tyler Grange
2484 N. Stokesberry Pl. #100
Meridian, lD 83646
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courtnev@cleanenerqyop portu n ities.com
miketOcleanen e oortunities.com
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IDAHO POWER COMPANY'S REPLY COMMENTS - 14
Gomet Energy LLC
George Stanton
13601 W. McMillan Rd. Ste
102 PMB 166
Boise, lD 83713
ldaho Solar Owners Network
Joshua Hill
1625 S. Latah
P.O. Box 8224
Boise, lD 83707
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(}r.J=
Stacy Gust, Regulatory Administrative
Assistant
IDAHO POWER COMPANY'S REPLY COMMENTS. 15