20220719Comments.pdf

RILEY NEWTON
DEPUTY ATTORNEY GENERAL
TDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. II2O2
IN THE MATTER OF CLEAN ENERGY
OPPORTUNITIES FOR IDAHO'S PETITION
FOR AN ORDER TO MODIFY THE
SCHEDULE 84 IO()KW CAP & TO ESTABLISH
A TRANSITION GUIDELINE FOR CHANGES
TO SCHEDULE 84 EXPORT CREDIT
COMPENSATION VALUES
CASE NO. IPC-E-22.12
COMMENTS OF THE
COMMISSION STAFF
'- , /'). I 'r-, '.j':-'
Street Address for Express Mail:
I 133I W CHINDEN BLVD, BLDG 8, SUITE 20 I -A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Riley Newton, Deputy Attomey General, submits the following comments.
BACKGROUND
On April 28,2022, Clean Energy Opportunities for Idaho ("CEO") petitioned the
Commission for an order by October 31,2022, that (1) modifies the project eligibility cap of 100
kilowatts ("kW") for Schedule 84 customers, which include commercial, industrial, and
irrigation ("CI&I") net metering customers, to l00oZ of a customer's maximum demand; and (2)
establishes a Transition Guideline that improves predictability and stability of rates by setting a
limit to the pace at which the compensation for excess energy may change for Schedule 84
customers, if and when an Export Credit Rate ("ECR") is implemented.
On May l8,2022,Idaho Power Company ("Company" or "ldaho Power") filed an
Answer to CEO's Petition ("Answer") and a Motion to Dismiss ("Motion").
1STAFF COMMENTS ruLY 19,2022
On June 1,2022, CEO filed a response ("Response") to the Company's Motion.
On June 28,2022, the Commission issued OrderNo. 35453, stating "anyone desiring to
state a position on whether to grant CEO's Petition or grant the Company's Motion must file a
written comment in support or opposition with the Commission within 21 days of the service
date of this Order."
STAFF REVIEW
Staff recommends that the Company's Motion to Dismiss CEO's Petition be granted.
CEO's petition carves out the following two items for resolution currently included within the
frameworkl of the Comprehensive Study of Costs and Benefits of On-Site Customer Generation
("Comprehensive Study") determined in Order No. 35284, Case No. IPC-E-21-21:
I. Modification of the eligibility cap of 100 kW for Schedule 84 customers to 100%
of a customer's maximum demand; and
II. Establishment of Transition Guidelines that improves predictability and stability
of rates by setting a limit to the pace at which the compensation for excess energy
may change for Schedule 84 customers, if and when an ECR is implemented.
The Comprehensive Study2 results were filed with the Commission in the Company's
Application to Complete the Study Review Phase of the Comprehensive Study in Case No. IPC-
E-22-22 on June 30,2022.
I. Eligibility Cap
Staff does not support changes to the eligibility cap for Schedule 84 customers outside of
the Comprehensive Study process for the following reasons:
I Page 25 of Order No. 35284 states that "[w]e find that a separate docket is not necessary to study these items. The
Company has the necessary data and expertise to provide a thorough evaluation ofthe 25 kW and 100 kW
predetermined caps through this study. We also find it reasonable to expand the analysis at l25oh of customers'
demand. The analysis of the project eligibility cap should also include an evaluation of concerns previously echoed
in Order No. 2895 I and Order No. 29094, such as safelr, service quality, and grid reliability." Page 24 of Order No.
35284 states that "[t]he Commission also finds it fair and reasonable for updates to current cost of service, new rate
designs, and transitional rates to be imolemented in a general rate case. While these issues are studied within this
ploc-9!!, we decline to order a full general cost of service study be conducted in this case."2 In Case No. IPC-E-22-22,the Company refers to the Comprehensive Study as the "Value of Distributed Energy
Resource ("VODER") Study."
2STAFF COMMENTS JULY 19,2022
A. CEO's proposal to use an expedited process through this docket is unlikely to
result in incremental capacity in time to meet the 2023 surlmer capacity
deficiency;
B. Conducting the study and planning for implementation holistically through the
Comprehensive Study process will likely result in a better outcome and could
prevent unintended consequences that could occur if CEO's Petition is granted;
and
C. Schedule 84 customers can choose to add generation not subject to the 100-kW
cap as Public Utility Regulatory Policies Act of 1978 ("PURPA") projects or non-
exporting projects.
A. CEO's Proposal to Expedite Resources in Time to Meet 2023 Deficiency is Unlikely.
CEO believes that its proposal to increase the Schedule 84 customer eligibility cap in a
proceeding separate from the overall Comprehensive Study process will allow Schedule 84
customers to add capacity to the Company's system in time to meet the Company's2D23
summer capacity deficiency. See Exhibit I of the Petition. However, Staff believes this outcome
is unlikely due to the combination of:
o Time needed to evaluate how the eligibility cap can be increased without
unnecessary risk to system safety and reliability; and
o Extended equipment order lead-times and issues with the current supply chain.
Given that the Company is resolving its2023 deficits through resources it is acquiring
through its202l Request for Proposal and by potentially obtaining approval through Case
No. IPC-E-22-13, Staff does not believe taking additional risk by expediting the process outside
of the Comprehensive Study process is justif,red.
Determination of a Modified Capfor Schedule 84 Customers
The Company is responsible for maintaining the safety and reliability of its system and
for any liabilities and risks associated with the safe and reliable operation of its system. Staff
believes the Company has provided sufficient justification that modiffing the eligibility cap
should be carefully considered. Given the effort needed to study the feasibility and to develop a
modified eligibility cap framework, Staff does not believe a modification to the cap is likely to
JSTAFF COMMENTS JULY 19,2022
happen in time to meet the Company's2023 capacity deficiency without increasing risks to the
safety and reliability of its system.
The Comprehensive Study uses PURPA facilities as an example to explain how projects
at a specific interconnection point could require additional reviews and studies. Screening
criteria are applied to a PURPA project to determine if additional studies are necessary. One
screening criterion automatically requires a more detailed study to be conducted for projects
larger than2 megawatts ("MW") and/or exceeding l5% of the distribution line section. Then,
based on the screening criteria, a determination is made on whether additional studies are needed
to evaluate various system impacts, such as distribution voltage and line equipment impacts,
voltage flicker from generation output variability, deadline reclosing, ground fault current
contribution limits, and other system upgrades. Even if it is determined that no additional studies
are needed, a preliminary review may still be required. CEO did not consider the potential for
case-by-case reviews and interconnection studies, which could take one month to several months
to complete, depending on the circumstances sulrounding each project.
In addition, the Company needs to periodically change connections to its distribution line
sections by closing and opening distribution switches to manage its distribution system. Section
9.2.2.2 of the Comprehensive Study states:
[A]n area of distribution line with a large quantity of customer generation
associated with seasonal loads could start exporting all generated energy to
Idaho Power's system. Under the current 100 kW cap for non-residential
customers, there is an opportunity to limit the number of customer-
generator systems switched at a time. However, increasing the cap to a
customer's demand could negatively impact the switching process during
seasons or certain times with low customer load.
The Comprehensive Study discusses two potential solutions to resolve this issue. The
first requires larger customer-generator systems to include a communications connection to
allow remote curtailment by Idaho Power. The second requires implementing a Distributed
Energy Resource Management System ("DERMS"). For comparison, the Comprehensive Study
states "PURPA projects are typically remotely curtailed during the distribution switching
operations and left off until the system is retumed to normal operation status." Comprehensive
Study at I 01 . Staff believes it takes additional time to determine the specific solution needed
and to install additional upgrades.
4STAFF COMMENTS ruLY 19,2022
Because of the Company's priority in preventing safety and reliability issues in its
system, Staffbelieves that time must be expended to study and understand potential issues that
could arise from modifring the eligibility cap and to develop a comprehensive set of criteria and
rules to mitigate such issues.
Equipment Delivery Lead-Time Issues
Global supply chain disruptions have caused significant delays for electric equipment
necessary for solar installations. For example, there is a critical shortage of transformers, meters,
and other distribution-related equipment necessary to interconnect additional customer
generation for Schedule 84 customers. According to the American Public Power Association,
lead times for these types of equipment have risen from 3 months to over ayear.3 In addition,
solar panels, inverters, and other equipment necessary for customer generation installations are
also experiencing extended order lead times.a According to industry experts, shortages and order
lead time issues are not expected to lessen this year and are likely to continue well into 2023.5
The Company has provided some of the reasons for the additional lead times and shortages in its
Motion , stating that, "[c]urrent supply chain constraints for renewable energy equipment and
components, combined with extended tariff and the current federal investigation related to non-
domestic solar panel components, could impact construction timelines and the commercial
operation date for new renewable projects." Motion to Dismiss at 17.
In addition to numerous delays in receiving electrical equipment, following the
construction of a solar system, solar projects can often experience delays with inspections,
permitting and the interconnection process before a system can be operational. These issues
combined, lead Staff to believe that CEO's proposal to expedite resources in time to meet the
2023 deficiency date is unlikely.
B. The Comprehensive Study Should Be Reviewed Holistically
Staff believes the Comprehensive Study should be reviewed holistically to ensure: l)
policy decisions consider all on-site generation customers instead of considering Schedule 84
3 https://www.publicpower.org/policy/critical-infrastructure-and-supply-chain-constraints-04 Jackpot Solar anticipates at least a 40-day delay in project completion due to extended equipment lead times. See
Response to Stafls Production Request No. 8 in Case No. IPC-E-21-43.
5 https://www.utilitydive.com/news/solar-storage-delays-price-supply-chain/6205371
5STAFF COMMENTS JULY 19,2022
customers separately; 2) all the actions taken in the implementation plan are done based on
dependencies between all implementation activities and performed in the proper order; and 3)
each study area is treated fairly with the same level of public involvement.
First, policy decisions regarding the project eligibility cap should consider all on-site
generation customers, because of the similarity of issues across all customer generators. For
example, the Comprehensive Study examines four questions that could affect all on-site
generation customers:
. "Should a demand-based system size cap apply to all customer-generators or only
commercial, industrial, and irrigation customers?"
o "What is the definition of a customer's demand for purposes of a system size
cap?"
o "How will a demand-based system cap be defined for a customer without
historical usage data?"
o "How do changes in system ownership that result in considerable changes in
customer demand impact a customer-specific and demand-related cap?"
Comprehensive Study at 101.
Addressing these questions in review of the Comprehensive Study, rather than in this
case, will result in final policies that are more consistent, fair, comprehensive, and more likely to
eliminate unintended consequences that cannot be envisioned when addressing Schedule 84
customers separately.
Second, by developing the implementation plan for all solutions authorized as a result of
the Comprehensive Study simultaneously (except for items specified by the Commission to be
implemented in a general rate case), dependencies between actions needed to implement the full
set of solutions can be taken into consideration so that they can be performed in the proper order.
The benefit of this approach will produce efficiencies and prevent unnecessary rework of issues
during implementation. For example, if the project eligibility cap is modified, the Company
proposes to hold technical workshops to discuss proposed interconnection requirements prior to
submitting Schedule 68 tariff changes for Commission approval. The Company also plans to
train customer service and other customer-facing employees adequately to respond to customer
inquiries prior to implementing any modifications. In addition, the Company plans to develop
6STAFF COMMENTS ruLY t9,2022
written communication and host educational workshops with the installers to make sure they
understand how Idaho Power's customers will be impacted. Comprehensive Study at ll2.
Third, each study area can be treated fairly with the same level of public involvement.
The Company has not developed a specific recommendation based on the Comprehensive Study,
but it believes that the ultimate recommendation "will be best guided and informed by feedback
and input received from parties to the case and members of the public". Case No. IPC-E-22-22,
Application at 15. The Company proposes that public involvement include public workshop(s),
initial all-party comments, all-party reply comments, all-party comments proposing
recommendations for implementation, and all-party final reply comments on implementation
recommendations. This level of public involvement is considerably higher than what is it would
likely be in processing CEO's Petition to meet CEO's proposed timeline.
C. Hisher Capacity for Schedule 84 Customers Can Be Achieved Throueh PURPA Projects or
Non-exporting Projects.
Schedule 84 customers can install capacity greater than the current 100 kW eligibility cap
through two separate altematives. They can construct their project as a PURPA project or
configure their system under Schedule 68 as a non-exporting6 project. Comprehensive Study at
97. Staff believes this provides customers with viable alternatives to offset the cost of their
electricity usage, while contributing to the capacity needs of the system.
II. ECR Transition Guideline
In its Petition, CEO proposed to establish a Transition Guideline for Schedule 84
customers if and when an ECR is implemented. Petition at l. Specif,rcally, for 2023 and2024,
regardless of what an ECR would be, CEO proposed the credit for Schedule 84 customers be no
less than the current l:1 kilowatt hour ("kwh") credit or a Blended Base Energy Rate defined in
Settlement Agreement in Case No. IPC-E-18-15. Starting in2025, if an Order has been issued to
6 Non-exporting systems with total nameplate capacity of 3 MVA or greater are required to sign a Uniform
Customer Generator Interconnection Agreement. See Schedule 68. Idaho Power's website also states that "[a]ll
customer generation applications will undergo a Feasibility Review to determine Idaho Power's electrical grid's
capability to incorporate the proposed generation system and to determine if upgrades are necessary. In some cases,
proposed systems may require an additional Feasibility Study to determine if upgrades or protection equipment is
needed. Idaho Power will conduct Feasibility Studies for systems under 3 megawatts (MW) on a case-by-case basis.
Systems over 3 MW will require additional study." See https://www.idahopower.com/energy-environmenVgreen-
choices/so lar-power-options-customer-generation/frequently-asked-questions/
7STAFF COMMENTS JULY 19,2022
use an ECR different than the current I : I kWh credit, and if the value is lower than the 1 : I kWh
credit or the Blended Base Energy Rate, the value would decline by no more than 15% in2025
and by no more than l5o/o over each subsequent two-year period until the value reaches the level
of the ECR determined to be most current at that time. Petition at 16. Staff does not support
establishment of a Transition Guideline outside of the Comprehensive Study process for the
following reasons:
A. Transitional rates should not be developed in the absence of the Comprehensive
StudY;
B. Transitional rates should be studied in the Comprehensive Study process; and
C. The need for transitional rates should be determined.
A. Transitional Rates Should Not Be Develqped in the Absence of the Comprehensive Study
Staff believes that the transitional rates should not be developed in the absence of the
Comprehensive Study. CEO's Petition was filed on April 28,2022, before the Company filed
the Comprehensive Study on June 30,2022. In Case No. IPC-E-18-15, the parties filed a
Settlement Agreement with the Commission, which included transitional rates over 8 years.
However, the Commission rejected the Settlement Agreement and stated in Order No. 34509 that
"filing the Settlement Agreement in the absence of a comprehensive study does not comply with
our directive to parties in Order No. 34046." Order No. 34509 at 6. Therefore, Staff believes
developing transitional rates in the absence of the Comprehensive Study does not comply with
Order No. 34509.
B. Transitional Rates Should Be Studied in the Comprehensive Study Process.
Order No. 35284 states that "[t]he Commission also finds it fair and reasonable for
updates to current cost of service, new rate designs, and transitional rates to be implemented in a
general rate case. While these issues are studied within this process, we decline to order a full
general cost of service study be conducted in this case." Order No. 35284 at24 and 25. Based
on that Order, Staff believes it is the Commission's expectation that transitional rates are to be
studied in the Comprehensive Study process, and Staff does not believe a separate process is
necessary.
8STAFF COMMENTS JULY 19,2022
Additionally, Staff believes that transitional rates should be developed relative to a
determined and known ECR. In other words, transitional rates should be determined after an
ECR is determined and known. Without knowing the destination that a transition plan is
designed to reach, developing such a plan would be futile. Because the ECR is determined in the
Comprehensive Study process, Staff believes that transitional rates should be included in the
same process.
C. The Need for Transitional Rates Should Be Determined
Before transitional rates are developed, the question of whether they are needed should be
answered. CEO's Petition begins the discussion of transitional rates but doesn't fully document
the need based on program changes. On the other hand, the Comprehensive Study states that
"the Commission could evaluate if it should cap the average customer impact. If so, the
Commission could assess proposals for transitional rates over a given number of years to
transition non-legacy systems from the retail rate to a Commission-approved ECR under Net
Billing." Comprehensive Study at 111.
Staff believes the question of whether transitional rates are needed should be examined in
the Comprehensive Study process. If there is a need for the transitional rates, then the next
question is what transitional rates should be used.
Previously, transitional rates have been used to help mitigate rate shock. For example, in
Order No 35247, the Commission approved a transition plan for Eagle Water Customers over
seven years to help avoid rate shock as the Eagle Water System merged into the Suez Water
System. Similarly, Staff believes if needs for transitional rates are identified in the
Comprehensive Study, a transition plan should be considered.
STAFF RECOMMENDATIONS
Staff recommends that the Company's Motion to Dismiss CEO's Petition be granted.
Staff does not support changes to the eligibility cap or establishment of a Transition Guideline
for Schedule 84 customers outside of the Comprehensive Study process.
9STAFF COMMENTS JULY 19,2022
Respeottully,submittod this nf"day of tuly zQzz.
RiluyNeurton
Deputy Attorney General
Technical Staff: Yao Yin
Travis Culbertson
i:umisc,/oommonts/ipce2. Drnyyhc comment
STAFF COMMENTS l0 JI,JLY 19,2A22
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 19th DAY OF ruLY 2022,
SERVED THE FOREGOING COMMENTS OF' TIIE COMMISSION STAFF,
IN CASE NO. IPC-E-22.12, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:
LISA NORDSTROM
MEGAN GOICOECHEA ALLEN
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-MAIL: [e-mail]
mgoicoecheaallen@ idahopower.com
[e-mail]
CONNIE ASCHENBRENNER
GRANT ANDERSON
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
ganderso n@idahopower. com
KELSEY JAE
LAW FOR CONSIOUS LEADERSHIP
920 N CLOVER DR
BOISE ID 83703
E-MAIL: [e-mail]
Y
CERTIFICATE OF SERVICE