20211116Comments.pdf

ERICK SHANER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83120
BOISE, IDAHO 83720-007 4
(208) 334-03t4
IDAHO BAR NO. 5214
IN TIIE MATTER OF IDAHO POWER
COMPANY'S APPLICATION TO INITIATE
A MULTI-PHASE COLLABORATIVE
PROCESS FOR THE STUDY OF COSTSO
BENEFITS, AND COMPENSATION OF NET
EXCESS ENERGY ASSOCIATED WITH
CUSTOMER ON.SITE GENERATION
CASE NO. IPC-E.ZI.zI
COMMENTS OF THE
COMMISSION STAFF
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Street Address for Express Mail:
I I33I W CHINDEN BLVD, BLDG 8, SUITE 201-4.
BOISE, TD 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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STAFF OF the Idaho Public Utilities Commission ("Commission"), by and through its
attorney of record, Erick Shaner, Deputy Attorney General, submits the following comments.
BACKGROUND
On June 28,2021, Idaho Power Company ("Company") applied to the Commission to
begin a multi-phase process for a comprehensive study of the costs and benefit study of on-site
generation as directed in Order No. 34046.1 See Application at 1. The Company requested that a
final order be issued in this case by the end of 2021so that 2021 data can be used for the "study
design" phase in the first half of 2022 and the "study review" phase can begin in June 2022. Id.
at 10.
I In the Matter of the Application of Idaho Power Company for Authority to Establish New Schedules for
Residential and Small General Service Customers with On-Site Generation, Case No. IPC-E-17-13, Order
No. 34046 at 3l (May 9, 2018).
ISTAFF COMMENTS NOVEMBER 16, 2O2I
On July 27,2021, the Commission issued a Notice of Application and set a deadline for
intervention and deadline for the Company, Commission Staff ("Staff'), and intervening parties
to confer regarding a proposed schedule for this matter. Order No. 35121. Industrial Customers
of Idaho Power ("ICIP"), IdaHydro, Idaho Conservation League ("lCL"), Idaho Clean Energy
Association ("ICEA"), Clean Energy Opportunities for Idaho ("CEO"), Idaho Solar Owners
Network ("lSON"), Micron Technology, [nc. ("Micron"), City of Boise ("Boise City"), Kiki
Leslie A. Tidwell ("Tidwell"), pro se, Idaho Irrigation Pumpers Association, [nc., Richard E.
Kluckhohn ("Kluckhohn"), pro se and Wesley A. Kluckhohn, pro se, ABC Power Company,
LLC, Comet Energy, LLC, and Idahome Solar petitioned for and were granted intervention
("lntervenors"; collectively with the Company and Staff "the Parties" singularly a"Party").2
On August 30,2021, the Parties met and agreed that Staff would file the Initial
Framework to Study ("Study Framework") with the Commission on September 30,2021. The
Study Framework is based on initial work completed by the Parties and discussed on September
22,2021. The Study Framework does not represent agreement by all parties on what should be
included in the final Study Framework. Each Party will file Comments with the Commission to
present their formal views and recommendations for the final Study Framework to be established
by the Commission.
On September 8, 2021, the Commission issued a Notice of Parties.
On September 22, 2021, the Commission issued Order No. 35 I 76 requiring all Parties
and the public to file initial comments about the appropriate scope of the Study Framework by
October 13,2021.
On September 30, 2021, Staff filed the Study Framework based on initial work
completed by the Parties.
On October 7,2021, the Commission issued Notice of Scheduling, Notice of Modified
Procedure, Notice of Virtual Public Workshops, and Notice of Telephonic Public Hearing.
Order No. 35193.
On October 20,2021, the Company held an online public workshop.
On October 26,2021, Staff held an online public workshop.
On October 28,2021, the Commission held a telephonic customer hearing from 6:00 PM
to 7:15 PM. Six customers commented on the record.
2 See Order Nos. 35105, 351 15, 35132,35152,and 35155
STAFF COMMENTS 2 NOVEMBER 16,2021
STAFF ANALYSIS
Staff s comments address the feedback received from the public during the Staff
workshop on October 26,2021, the customer hearing on October 28,2021, and comments from
the public filed with the Commission.3 In addition, Staff provides further clarification in specific
areas of the proposed Study Framework. These comments should be considered an extension of
Staff s initial comments filed on this matter on October 13,2021, which provides an in-depth
analysis of the areas proposed to study by the Company and the other Parties.
Measurement Intervals (# I -3)
Customers did not provide any feedback on the Company's proposal of measurement
intervals. Staff recommends the term "Separate Channel" be replaced with an "lnstantaneous" or
"real-time" net energy measurement. The Parties generally agree that the new terminology f,rts
better and better describes the method of measuring consumption and exports to the grid at the
same time. Staff recommends this section be included in the Study Framework.
Export Credit Rate ("ECR") (#4-9)
While most of the public comments did not speak to the specific design of the ECR,
several commenters stated that the Study Framework must be fair, accurate, and credible.
Staff reiterates that the ECR should be based on only those financially quantifiable costs
that the Company avoids and the benefits that the Company receives that are typically included
in customer rates. Furthermore, the ECR should adhere to the principle of ratepayer indifference
and avoided costa 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.
3 As of November 16, 2021,118 comments have been filed with Commission. Due to a public comment deadline of
November 30,2021, not all public comments have been addressed in Stafls comments.
a 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 qualifuing facility or qualifying facilities, such utility would generate itself
or purchase from another source. See l8 C.F.R. $ 292. l0l (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 utility customers harmless - not a rate at which a project may be viable."
JSTAFF COMMENTS NOVEMBER 16, 2021
Staff has also provided additional comment related to developing the ECR for: (1) the
form of the credit, (2) penetration levels of customer generation in the system, (3) future versus
historic basis for rates, and (4) output profiles used to value avoided cost and to construct the
rate.
Form of Credit
Staff believes the ECR should be provided on a price per kilowatt-hour ("kWh") basis
and not a kWh credit. As discussed in StafPs October 13,2021, comments, the value of
exported energy varies by time of day, week, month, and year. Providing a kWh export credit
against a kWh of consumption could lead to a mismatch in value between energy exported and
energy consumed with impacts to other customer classes in the form of inter-class subsidies.
Penetration Levels
Staff believes that it is important to design the ECR for various penetration levels so that
the net exported energy can be accurately valued. This is especially important regarding
adjustments for integration cost associated with the net exported energy, since increased
penetration of variable resources in the system affects the cost of regulating reserves the
Company needs to carry to balance the system. Staff also recommends that the Company
determine the specific penetration levels based on the customer gener4tor growth trend, the
frequency of ECR updates, the different configurations of customer generators, and other
relevant factors.
Future versus Historic Basis for Rates
The net exported energy should be based on the value it will provide to the Company's
system when customer generators export their energy. The accuracy of the two main
components of avoided cost, capacity and energy, depend on costs that can reasonably be
forecasted. Avoided energy cost depends on future fuel costs, the future price of wholesale
electricity, and the resources the Company will have in place when exports occur. Avoided
capacity cost depends on when future capacity deficits occur, and the resources needed to fill
them. However, Staff believes future costs can be estimated based on historic data, but the
context of the rate should be future-oriented.
4STAFF COMMENTS NOVEMBER 16,202I
Output Profiles
Customer generator output profiles will be important to differentiate the value of energy
when exported to the Company's grid and to determine the rate design of the ECR. As such, the
output profiles need to be based on existing customer generators within the Company's system
using historic data reflecting actual exports net of actual consumption. In addition, the output
profiles in the study need to have enough time resolution so the ECR can reflect an accurate
value based on when the energy is exported to the Company's grid and should be differentiated
based on different customer generator configurations, with and without batteries.
Recovering ECR Expenditures (#l l-12)
Customers did not provide feedback on the Company's proposal to recover the ECR.
The Study Framework should present how the bill credits paid to net metering customers are
booked, how the Company's proposal would differ from the method, and the impact of those
methods on each customer rate class. Staff recommends the section of recovering ECR
expenditures be included in the Study Framework.
Cost-of-Service and Rate Design (#13-15)
Customers did not provide feedback on the Company's proposed cost-of-service and rate
design. Updates to current cost-of-service, new rate designs or even transitional rates should be
implemented in a general rate case. Staff recommends this section to be included in the Study
Framework.
Project Eligibitity Cap (#16)
Customers did not provide feedback on the Company's proposal for evaluating the
project eligibility caps of 25 kilowatt ("kW") and 100 kW. However, a few customers did
question the need for caps. The analysis of the project eligibility cap should evaluate previous
concerns echoed in Order No. 28951 and Order No. 29094, such as safety, service quality, and
grid reliability concems.
5STAFF COMMENTS NOVEMBER 16,2O2I
Environmental and Other Benefits (#17-18)
Customer comments and testimony during the customer hearing focused on
environmental and other benefits section of the Study Framework. Customers expressed concern
over the Company's lack of depth in this section and believes it needs more detail than what the
Company proposed in its Application. One customer stated they were disappointed with the
proposal and believe the Company is contradicting its recent promotion of clean energy by
excluding environmental benefits in the Study Framework. Multiple customers commented that
they support the proposals of the Intervenors. Another customer mentioned in testimony, that at
the very least, this section should include the same parameters as ordered in Case
No. PAC-E-I9-08, Order No. 34753, Attachment A at 3.
Staff believes that any environmental benefits included as an avoided cost in the ECR
should be valued based on the following criteria: (l) the benefits included should ultimately be
realized by the Company's customers, (2) other customer classes should be held harmless, (3)
environmental benefits included in the ECR should maintain accuracy over time, and (4) the
environmental benefits included should only be those typically included in customer rates.
However, the environmental benefits included in the Study Framework that do not impact
customer rates at this time, but may impact rates in the future, can be examined as a risk variable
similar to how the Company performs a scenario analysis of potential future federal legislation in
the Company's Integrated Resource Plan ("IRP").
Staff addressed, in its previous comments, the pros and cons of having a third-party
consultant conduct a study on the environmental benefits section of the Study Framework.
During the customer hearing, multiple customers testified in support of the entire study of cost
and benefits of on-site generation to be conducted by a third-party consultant. Customers
asserted that a third-party conducting the study would provide an unbiased and fair evaluation.
However, if a third-party contractor does perform the study, funding to conduct it and who will
pay for it, customer generators or all customers, will need to be identified.
In addition, in many areas of the proposed Study Framework the Company has the best
overall understanding of the data for determining how exports from customer generators will
avoid cost and provide benefits to its system. For example, the Company's experience in
determining avoided cost is routinely demonstrated in its IRP, which is conducted every two
years.
6STAFF COMMENTS NOVEMBER 16,2O2I
Implementations Issues (#l 9-2 3)
During the customer hearing, many customers commented that export credits should
never expire. Based on the Company's Application and proposed areas of study, Staff does not
believe it is the Company's intent to have export credits expire at this time, but to provide
information on whether there is any justification for it in the future. To make an informed
decision, data and information such as magnitude, duration, and value of the accumulated export
credits should be included in the Study Framework. In addition, if export credits were to expire,
Staff believes there are many additional areas to study for handling of credits, including, but not
limited to, how credits will be tracked, how excess credits will be handled at the end of an
expiration period, how the Company will record expired credits that have been recovered, and
how credits that have been billed are returned to customers.
A customer comment suggested that while they are not in support of export credits
expiring, if they expired, instead of basing the expiration period on a traditional calendar year,
basing the expiration period off a period of April through March would be necessary to allow
customers to use accumulated export credits built up in the summer throughout the entire winter.
Staff believes this is a reasonable approach as many solar systems are designed to primarily
offset a customer's consumption, with most accumulated exports occurring in the summer
months and utilized to offset consumption during winter.
Another customer comment stated concerns over their inability to transfer their excess
accumulated credits between their residential and irrigation accounts and suggested this be
included in the Study Framework.
Public Input
As of November 16, 2021,118 public comments have been filed in this case. Many of
the customer comments filed to date have focused on providing a fair study that moves Idaho
towards a clean energy future.
One area of customer comments discussed in StafPs comments was for the Study
Framework to examine and compare it to other electric utilities that have adopted new customer
generator programs. Similarly, during the customer hearing a customer suggested utilizing
recent studies as recommended by ICL in the Study Framework. Leveraging recent studies and
other utilities recently adopted programs can help the Company by building on the successes and
7STAFF COMMENTS NOVEMBER 16,2O2I
learning from the failures of the cost and benefits of on-site generation. It is important to
recognize that studies and programs are designed for particular states, regions, and utilities that
have their own unique energy sources and needs at specific times of the day, month, and/or year.
If any studies and programs are used, any data used in developing the ECR will need to be based
on the Company's system to ensure that the benefits and avoided costs generated through
customer generator exports can be accurately captured and reflected. Additionally, any studies
and programs will need to be vetted to ensure calculations of the cost and benefits of onsite
generation do not account for adders or subtracters to the calculation that would not be
applicable for the Company's service territory.
Multiple customers testified during the customer hearing recommending the Commission
publish a draft study before making a final order. The public expressed concern about the
inability to provide feedback on the Study Framework and wishes to have a comment period to
provide feedback on a Commission drafted Study Framework before a final Study Framework is
published by the Commission.
STAFF RECOMMENDATIONS
Staff recommends that the Commission order the Company to begin constructing its
comprehensive cost and benefits of on-site generation study laid out in more detail on Staff s
Comments filed on October 13,2021and based on Stafls recommendations included above.
Respecttully submitted this /Gof Novemb er 2021.
Shaner
Attorney General
Technical Staff: Taylor Thomas
Travis Culbertson
Yao Yin
Joseph Terry
Chris Hecht
Jolene Bossard
i:umisc:comments/ipce2 1.2 I estttncyy,jtchjb comments
4
8STAFF COMMENTS NOVEMBER L6,2O2I
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 16th DAY OF NOVEMBER 2021,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-21-21, BY E-MAILING A COPY THEREOF, TO THE FOLLOWTNG
LISA NORDSTROM
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
dockets@idahopower. com
PETER J RICHARDSON
RICHARDSON ADAMS PLLC
5I5 N 27TH STREET
BOISE ID 83702
E-MAIL: peter6Drichardsonadams. corn
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
710 N 6TH ST
BOISE ID 83702
E-MAIL: [e-mail]
RICHARD E. KLUCKHOHN
WESLEYA. KLUCKHOHN
2564W. PARKSTONE DR.
MERIDIAN ID 83646
E-MAIL: [e-mail]
wkluckhohn(r?mac.com
KELSEY JAE
LAW FOR CONSCIOUS LEADERSHIP
920 N CLOVER DR
BOISE ID 83703
E-MAIL: [e-mail]
CONNIE ASCHENBRENNER
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-MAIL: caschenbrenner(D.idahopower.com
DR DON READING
6070 HILL ROAD
BOISE ID 83703
E-MAIL : dreadinefDmindsprins.com
ED JEWELL
DEPUTY CITY ATTORNEY
BOISE CITY ATTORNEYS OFF
PO BOX 500
BOISE ID 83701-0500
E-MAIL : B o i seCitlzAttornelr@citluofbo i se. or g
ej [e-mail]
MICHAEL HECKLER
COURTNEY WHITE
CLEAN ENERGY OPPORTUNITIES FOR
IDAHO
3778 PLANTATION DR, SUITE 102
BOISE ID 83703
E-MAIL:
courtnelz(Dcl eanenergyopportunities. com
JIM SWIER
MICRON TECHNOLOGY INC
8OO SOUTH FEDERAL WAY
BOISE ID 83707
E-MAIL: [e-mail]
nlln
CERTIFICATE OF SERVICE
AUSTIN RUESCHHOFF
THORVALD A NELSON
AUSTIN W JENSEN
HOLLAND & HART LLP
555 ITTH ST STE 32OO
DENVER CO 80202
E-MAIL : darueschho ff@.hol landhart. com
tnelson@ho I landhart. com
awi ensen@hollandhart. com
acl ee(Ehollandhart. com
gl eareanoamari @.hol landhart. com
KEVIN KING
P.O.BOX2264
BOISE [D.83702
E-MAIL: [e-mail]
KIKI LESLIE A. TIDWELL
704 N. RIVER ST. #1
HAILEY ID 83333
E-MAIL: ktinsv@.cox.net
GEORGE STANTON COMET ENERGY
LLC
1360I W. MCMILLAN RD.
STE 102 PMB 166
BOISE ID 837I3
E-MAIL : George. [e-mail]
TYLER GRANGE IDAHOME SOLAR
2484 N. STOKESBERRY PL. #IOO
MERIDIAN ID 83646
E-MAIL: tvler@.idahomesolar.com
C. TOM ARKOOSH
ARKOOSH LAW OFFICES
913 W RIVER STREET SUITE 450
PO BOX 2900
BOISE ID 8370I
E-MAIL [e-mail]
erin. [e-mail]
JOSHUA HILL
IDAHO SOLAR OWNERS NETWORK
1625 S. LATAH
BOISE,ID 83705
P.O.BOX8224
BOISE ID 83707
E-MAIL ioshuashill com
[e-mail]
ERIC L. OLSEN
ECHO HAWK & OLSEN, PLLC
505 PERSHING AVE., STE. IOO
PO BOX 6119
POCATELLO ID 83205
E-MAIL: [e-mail]
RYAN BUSHLAND
ABC POWER CO. LLC
184 W. CHRISFIELD DR.
MERIDIAN ID 83646
E-MAIL: [e-mail]
SECRETARY
CERTIFICATE OF SERVICE