20211116Second Comments.pdf

Kelsey Jae (ISB No. 7899)
Law for Conscious Leadership
920 N. Clover Dr.
Boise, ID 83703
Phone: [phone]
[e-mail]
Attorney for Clean Energy Opportunities for Idaho
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
APPLICATION TO INITIATE A MULTI-
PHASE PROCESS FOR THE STUDY OF
COSTS BENEFITS AND COMPENSATION OF
NET EXCESS ENERGY ASSOCIATED WITH
CUSTOMER ON-SITE GENERATION
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CASE NO. IPC-E-21-21
SECOND COMMENTS OF
CLEAN ENERGY
OPPORTUNITIES for IDAHO
REGARDING THE STUDY
DESIGN
Please find below Clean Energy Opportunities for Idaho (CEO) comments regarding what CEO
believes are essential changes to the proposed design study framework. CEO’s comments are
organized as follows:
1.CONDITIONS HAVE CHANGED IN FUNDAMENTAL WAYS SINCE IPC-E-17-13 WAS FILED
a)Adding customer owned solar generation now reduces future costs for all IPC
customers
b)Rapid load growth: additional resources required, enhanced IPC revenue recovery
c)Combining solar with storage provides a low risk approach for meeting growing load
d)Preliminary 2021 IRP results: 5 times more solar, 20 times more storage than 2019
IRP
e)Implications for changes to the scope of the proposed study design
2.SIGNIFICANT POLICY AND PROCEDURAL PROBLEMS ARE NOW AVOIDABLE
a)Balancing state policy with concern for inter/intra class subsidies
b)Previously established principles related to customer-owned generation
c)Customers not duly noticed of consumption rate changes
3.THE CURRENT STUDY FRAMEWORK IS UNNECESSARILY BROAD AND CONFUSING.
MODIFICATIONS TO THE CURRENT STUDY DESIGN ARE REQUIRED.
a)Focus on self-generator program parameters and rates for exports
b)Two proposed additions/corrections to the value analysis methodologies
4.CONCLUSIONS
RECEIVED
2021 NOV 16 PM 4:26
IDAHO PUBLIC
UTILITIES COMMISSION
1.CONDITIONS HAVE CHANGED IN FUNDAMENTAL WAYS SINCE IPC-E-17-13 WAS FILED
a)Adding customer owned solar generation now reduces future costs for all IPC
customers
Declining PV solar costs combined with a wide range of scalability have made solar a
disruptive technology. That disruption has come with significant regulatory impacts.
Developments occurring this year, both in the improving cost-effectiveness of utility
scale storage technology as well as the rapidly growing loads Idaho Power (the
Company) is experiencing, have fundamentally changed those regulatory impacts as
they relate to customer owned generation.
Utility-scale storage has crossed a tipping point and can now eliminate many of the
previous tradeoffs between affordable, reliable, and sustainable energy resource
alternatives. The combination of the substantial load growth the Company is
experiencing with declining utility scale storage costs has fundamentally changed the
value of solar plus storage resources within the Company’s system.
As further detailed below, the Company will likely plan to add very large amounts of
both storage and solar resources in the immediate future as well as over the next couple
of decades. To the extent that Idaho Power customers add their own solar generation,
the amount of additional solar the Company needs to procure will be reduced. The
result of increased customer owned solar generation is reduced future costs for all
Idaho Power customers.
In its filing of IPC-E-17-13 and in several derivative dockets, the Company has implied
that monthly net metering at full retail value has produced harms to both non-self-
generating customers and the Company itself. These harms arise from three sources:
from the Company over-paying for exported power,
from the Company facing inadequate revenue recovery due to the reduced
consumption of self-generators, and
from reduced consumption of self-generators resulting in self-generating
customers not adequately absorbing their share of fixed costs thereby requiring
other customers, whether inter or intra class, to subsidize the self-generators.
Assuming fair prices for any exported power can be established, Idaho Power customers
who in the future choose to add solar generation will provide benefits to non-self-
generating customers rather than be “subsidized” by them.
As detailed below, the Company has made no showing in this docket - and is likely not
to face in the foreseeable future - problems related to inadequate revenue recovery
caused by the reduced consumption of future customer self-generation.
Should such deficiencies arise in the future they are more appropriately addressed in a
comprehensive general rate case rather than as an adjunct within the study addressed
in this docket.
Concerns about addressing “subsidies” that benefit self-generators due to their reduced
consumption are likely no longer relevant. To fairly review whether such “subsidies”
exist would, at the least, require an analysis of such complexity as to make the study
envisioned under this docket not understandable by the average customer.
Extensive review during IPC-E-18-16, the “Fixed costs” docket, identified multiple
substantial problems in attempting to apply the historic cost of service (COS)
methodologies in analyzing the costs and benefits accruing from future additions of
customer owned generation resources.
CEO believes that it is analytically inappropriate to include historical cost based cost-of-
service studies in this docket. Such studies add substantial complexity to any review and
in so doing reduce the ability for the public to understand the matters being studied.
The scope of the study design addressed here needs to be modified to eliminate this
unnecessary component.
b)Rapid load growth: additional resources required, enhanced IPC revenue recovery
Idaho Power has made no showing that its ability to collect required revenue levels have
been or are likely to be harmed from reduced consumption by self-generators.
On the contrary, the Company’s owner has recently reported 2021 results of its highest
earnings ever for any first three-quarter period. In response, IDACORP raised its
dividends per share to their highest level ever.
These earnings results occurred in spite of well below average generation from the
Company’s low-cost hydro generating resources - estimated annual hydro generation in
2021 at 5.4 to 5.7 million megawatt-hours vs a longer-term average above 7 million
megawatt-hours. The Company incurred record-high earnings while incurring higher
than normal power costs to cover this hydro shortfall.
The Company has had strong recent load growth and anticipates more growth in the
future as evidenced by recent requests for expedited processing of proposals for
additional solar resources in the 2022-2025 period and potential to develop appropriate
offerings for possible new high load customers.
Forecasts for growth in the Idaho Power service territory far exceed national average
growth rates. The Company has no basis in this docket for requiring a review of
whether reduced future consumption by customers with on-site self-generation will
significantly impinge upon its ability to adequately collect required levels of revenue.
c)Combining solar with storage provides a low risk approach for meeting growing
load
Utility-scale storage has crossed a tipping point and can now eliminate many of the
previous tradeoffs between affordable, reliable, and sustainable energy resource
alternatives.
The combination of the substantial load growth the Company is experiencing with
declining utility scale storage costs has fundamentally changed the value of solar plus
storage resources within the Company’s system.
In the 2021 series of Integrated
Resource Plan Advisory Council
meetings, analysis by Idaho
Power subject matter experts has
shown that while solar alone has
a relatively low probability of
being a reliable source of power
in meeting all high load hour
requirements, solar plus 4-hour
storage, combined in a 1 to 1
nameplate ratio, can be exceptionally reliable.
As displayed in the figure above, the 97% effective load carrying capability of the solar
plus storage combination means that such combinations can effectively serve as a
substitute for the reliability previously provided by gas-fired generation.
The analysis associated with this 2021 IRP has shown that a combination of low cost
energy from solar with the flexibility provided by storage can produce a low carbon risk
and low fuel price risk approach to meeting growing load. As a result, the 2021 IRP will
likely include dramatically more solar, wind and storage than the acknowledged, but
now outdated, 2019 IRP version.
d)Preliminary 2021 IRP results: 5 times more solar, 20 times more storage than 2019
IRP
In preparing the 2019 IRP, Idaho Power used a capacity expansion model for the first
time. There were some not uncommon start-up difficulties with using this new type of
portfolio modeling. Some of those difficulties related to modeling utility scale storage.
In this 2021 IRP iteration, many of the storage modeling problems have been resolved.
As a result, the 2021 model shows dramatically rising levels of solar plus storage as
being cost effective in serving Idaho Power’s rising loads.
While more detailed information will likely be
presented at the IRPAC meeting in two days-
time on November 18th, preliminary analysis
has shown that a combination of solar and
storage provides an attractive low-carbon risk
and low-fuel-price risk approach to meeting
growing load. For this reason, the preliminary
2021 iteration selects 20 times more storage
and 5 times more solar than that modeled in
2019 and shows large quantities of solar and
storage being needed in each of the near-
term 2023-2025 years.
In Order number 34509, the Commission
suggested use of “the most current data
possible” when preparing this docket’s study.
The 2021 IPR version will very likely show dramatic changes in the perceived value of
adding solar plus storage to the Idaho Power system. While a 2021 IRP will likely only be
submitted in the near future, and will not be acknowledged for some time, the dramatic
improvements in the use of capacity expansion modeling in the 2021 iteration make it,
and not the 2019 version, the appropriate IRP data resource for use in the study being
designed under this docket.
In summary, to the extent that Idaho Power customers add their own solar generation,
the amount of additional solar the Company needs to procure will be reduced. By
reducing the Company’s need to acquire new resources, the result of increased
customer owned solar generation is to reduce future costs for all Idaho Power
customers whether they self-generate or not.
e)Implications for changes to the scope of the proposed design study
With no need for the study to review whether non-self-generating customers
“subsidize” self-generators or whether self-generators cause Idaho Power to forego its
required revenue, CEO believes the study can be better aligned with Idaho policy by
tightly focusing on assisting customers in answering questions such as:
How much solar nameplate can a customer install;
How will the customer be compensated for any portion of their generation that
is exported;
o How to measure the cost/benefits of customer energy exports to Idaho
Power’s system;
o How will the quantity of exports be calculated;
o What is the price(s) for those exports and how will those prices be
updated over time;
o How will the compensation for exports be delivered to the customer;
o How will any transition from the current netting process and valuation of
exports be implemented?
2.SIGNIFICANT POLICY AND PROCEDURAL PROBLEMS ARE NOW AVOIDABLE
a)Balancing state policy with concern for inter/intra class subsidies no longer
required
As filed, this docket presented the Commission with inherent conflicts between what
the Company has proposed and established state policy. CEO believes a scope of study
review that both eliminates this policy conflict and allows for producing a dramatically
more understandable study is now available.
It is Idaho policy to encourage investment in customer owned generation. With an
implied counter-balancing concern related to possible inter/intra class subsidies, the
Commission was previously been presented with a difficult challenge in balancing
competing interests. Now that the opportunity for self-generating customers to help,
rather than harm, non-self-generating customers that concern is eliminated.
The Idaho Energy Plan, at E-11 states:
“It is Idaho policy to encourage investment in customer-owned generation;
therefore the Idaho PUC, utilities, municipalities, and cooperatives are
encouraged to ensure non-discriminatory policies for interconnection and net
metering”
Idaho Power also imports significant portions of its energy supplies. As displayed below,
self-generation can also help to bring that condition in-line with an Administration policy
that encourages the developing Idaho’s energy resources:
The study contemplated in this docket can, and should, be designed to assist and
support customers in deciding whether to install self-generation consistent with those
policy positions. Increasing monthly customer fees for self-generators would discourage
customer-owned generation. Any changes to fees charged to self-generators should
only be reviewed within a general rate case and should not be contemplated in this
study.
b)Previously established principles related to customer-owned generation
During IPC-E-17-13, many concerns were raised that if Customer generators were placed
in separate classes, those classes would be singled out for rate changes. The
Commission registered those concerns and stated, Order 34046, p25:
“We can also assure the Company's customers that discriminatory rates will not
follow from the outcome of this case.”
The Commission also noted in that Order, p16:
“Further, cost of service issues will be fully vetted if and when the Company
applies to change the rates of customers that take and provide service under
Schedules 6 and 8.” [emphasis added].
Order 34046 (from IPC-E-17-13, at p31) instructed that the study proposed under this
docket address “proper rates and rate design, transitional rates, and related issues of
compensation for net excess energy provided as a resource to the Company.”
[emphasis added].
The Commissioners tied rate design and compensation issues to net excess energy, not
to utility cost recovery from particular customer classes. In that same order which
defined the study addressed by this docket, the Commission also headlined their
finding: “VI. ANALYSIS OF FIXED COSTS IN SEPARATE DOCKET” (Order 34046 at p23).
As ordered, IPC-E-18-16 was the docket to contemplate changes to cost of service,
revenue requirements, and rate designs across customers. Stakeholders engaged time
and resources into that docket, and progress was made. The importance of linking cost
allocations and rate design to future costs was emphasized, changes to cost of service
methodologies were recommended, and specific opportunities to mitigate future fixed
costs were identified.
Eliminating the portions of the study design associated with cost of service analyses and
inter and intra class “subsidies” and focusing on issues related to compensation for net
excess energy better aligns the study design with previous Commission direction.
c)Customers not duly noticed of consumption rate changes
This docket was titled and noticed to the public as related to the costs, benefits and
compensation of net excess energy. To contemplate rate design changes based on cost
of service methodologies in this docket would have implications for all customers.
Idaho Power customers have not been noticed that this study could impact their future
rates for consumption.
The study contemplated in this docket is not an appropriate vehicle for review of
revenue requirements or class rate design via use of cost of service methodologies. CEO
asks that, rather than revenue requirements and cost allocations associated with
customers, the value stack of costs and benefits associated with exports should be
studied in order to inform fair and objective compensation for net excess energy.
In sum - Because the study design, as proposed, would impact future rates and rate
design for consumption, it puts the Commission in a conundrum: should rate designs
for consumption, such as increased monthly fees, be targeted only at customer
generators in a fashion inconsistent with state policy, or will the study impact other low
usage customers without notice? CEO requests that the study not be used to impact
rates or rate design for consumption.
3.THE CURRENT STUDY FRAMEWORK IS UNNECESSARILY BROAD AND CONFUSING.
MODIFICATIONS TO THE CURRENT STUDY DESIGN ARE REQUIRED
a)Focus on self-generator program parameters and rates for exports
The Company has proposed that revenue requirements be analyzed, cost of service
methodology be utilized, and potential new rate designs for consumption by customer
generators be evaluated. CEO believes those are outside the scope of this docket and
should be removed.
CEO asks that the scope of the study stay within the “cost, benefits, and compensation
of net excess energy” and that a primary design focus of the study should be to provide
timely and understandable information to Idaho Power customers to allow them to
make informed decisions as technology advances provide them with new ways to meet
their electric power needs.
b)Two proposed additions/corrections to the value analysis methodologies
1)As Jared Ellsworth implied in his testimony in IPC-E-21-32 (Ellsworth Direct p
21), reduced load caused by customer self-generation provides
flexibility/reserves benefits to the operators of Idaho Power’s system that
extend beyond just reductions in the resource capacity needed to meet peak
loads. These values should be quantified and added to the stack of solar
benefits.
2)As is done when valuing energy efficiency alternatives, the load reduction
benefits associated with self-generation should be quantified based on total
generation, not just on the subset of such generation that is exported.
4.CONCLUSIONS
In 2013, when the Company proposed to increase monthly customer charges for net
metering customers, the Commission determined:
“However, we are concerned that the Company’s proposal is inconsistent with
State policy as expressed in the Idaho Energy Plan, will discourage investment in
distributed generation, and encourage rate-gaming.” (ORDER NO. 32846, at p12,
IPC-E-12-27)
Since that time –
State policy support for customer-owned generation has not waned
State policy support for developing Idaho’s in-state resources has been recently
affirmed
Municipal and employer needs for clean energy have grown
The Company’s base scenario in its 2021 IRP identifies the need for 900MW of
additional renewables to serve existing & prospective customers
Improvements in storage technology allow utility-scale storage to augment the
value of solar
The Company’s modeling now shows solar plus storage as a cost-effective energy
and capacity addition to serve growing loads
The Company is recording record-high earnings and has not shown that it is
harmed by issues related to inadequate fixed cost recovery.
The Commission’s concern regarding rate designs which would discourage customer-
owned generation remains valid, and the public interest served by encouraging
customer owned generation has grown.
In addition to issues described in these and prior comments, we respectfully highlight
the following requests for modifying the study framework:
Narrow the study scope to focus on matters related to compensation of net
excess energy
Remove from the study matters related to customer side consumption - revenue
requirement analysis, cost of service methodologies, and rate designs for
consumption
Seek ways to encourage and better leverage customer-owned generation
CERTIFICATE OF SERVICE

I hereby certify that on this 16th day of November, 2021, I delivered true and correct copies
of the foregoing FINAL COMMENTS to the following persons via the method of service noted:

Electronic Mail Delivery (See Order No. 34602)

Idaho Public Utilities Commission
Jan Noriyuki
Commission Secretary
[e-mail]

Idaho PUC Staff
Erick Shaner
Deputy Attorney General
Idaho Public Utilities Commission
[e-mail]

ABC Power Company, LLC
Ryan Bushland
184 W. Chrisfield Dr.
Meridian, ID 83646
[e-mail]

City of Boise
Deputy City Attorney
Boise City Attorney’s Office
150 N. Capitol Blvd.
PO Box 500
Boise, ID 83701-0500
[e-mail]
[e-mail]

Comet Energy, LLC
George Stanton
13601 W. McMillan Rd, Suite 102
PMB 166
Boise, ID 83713
[e-mail]

Idahome Solar, LLC
Tyler Grange
2484 N. Stokesberry Pl. #100
Meridian, ID 83646
[e-mail]

Idaho Irrigation Pumpers Association, Inc.
Eric L. Olsen
Echo Hawk & Olsen PLLC
505 Pershing Ave., Suite 100
PO Box 6119
Pocatello, ID 83205
[e-mail]

Idaho Power Company
Lisa D. Nordstrom
Connie Aschenbrenner
Idaho Power Company
1221 West Idaho Street, 83702
P.O. Box 70 Boise, Idaho 83707
[e-mail]
[e-mail]
[e-mail]

IdaHydro
C. Tom Arkoosh
Arkoosh Law Offices
913 W. River Street, Suite 450
P.O. Box 2900
Boise, ID 83701
[e-mail]
[e-mail]
IPC-E-21-21: CEO Final Comment s - Certificate of Service - 1
Idaho Clean Energy Association
Kevin King
P.O. Box 2264 Boise, ID, 83702
208-850-0880
[e-mail]

Idaho Conservation League
Benjamin J. Otto
710 N. 6th St. Boise, Idaho 83702
[e-mail]

Idaho Solar Owners Network
Joshua Hill
1625 S. Latah
Boise, ID 83705
[e-mail]
[e-mail]

Industrial Customers of Idaho Power
Peter J. Richardson
Richardson Adams, PLLC
515 N. 27th St., P.O. Box 7218
Boise, Idaho 83702
[e-mail]

Dr. Don Reading
6070 Hill Road Boise, Idaho 83703
[e-mail]

Richard E. Kluckhohn, pro se
Wesley A. Kluckhohn, pro se
2564 W. Parkstone Dr.
Meridian, ID 83646
[e-mail]
[e-mail]

Micron Technology, Inc.
Jim Swier
8000 South Federal Way
Boise, ID 83707
[e-mail]

Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart, LLP
555 17th Street Suite 3200
Denver, CO 80202
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Kiki Leslie A. Tidwell, pro se
704 N. River St. #1
Hailey, ID 83333
[e-mail]

_____________________________
Kelsey Jae
Attorney for CEO
IPC-E-21-21: CEO Final Comment s - Certificate of Service - 2