20211130Reply Comments.pdf

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;rl: :':i; 3li FH 2: 30Kelsey Jae (ISB No. 7899)
Law for Conscious Leadership
920 N. Clover Dr.
Boise,ID 83703
Phone: [phone]
[e-mail]
Attorney for C lean Ener gt Opportunrtie s for Idaho
APPLICATION TO INITIATE A MULTI-PHASE
PROCESS FOR TITE STUDY OF COSTS
BENEFITS AND COMPENSATION OF NET
EXCESS ENERGY ASSOCHTED WITH
CUSTOMER ON.SITE GENTERATION
BEFORE TIIE IDAI{O PUBLIC UTILITIES COMMISSION
CASE NO. IPC.E-2I.21
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REPLY COMMENTS of
CLEAI\I ENERGY
OPPORTUNITIES for
IDAHO
Clean Energy Opportunities for ldaho (CEO) has previously informed the Commission that it
sought to provide a check on utilities' assumptions and analyses by engaging in regulatory
matters related to clean energy. CEO attempts to provide such checks with these reply
comments.
There are substantive changes in the revised framework ldaho Power (the Company)submitted
on November 16th. CEO acknowledges the progress that Staff and ldaho Powe/s efforts have
made as evidenced by these changes.
Nonetheless, CEO believes there remain within the revised study framework several instances
where the Company's assumptions or suggested analysis methods will produce inappropriate
and severe consequences. Consequences which, in some instances, may violate prior
Commission direction to produce a fair study.
Specifically, CEO believes changes are needed in the following sections:
94.1, 4.4, 7, 8, 8.1, 10, tl, L6.4, 18.1, 19 Lg.L, and 20
!mmediately below CEO explains why it believes changes are needed in each of those sections.
Proposed modifications to the specific wording of the framework, which CEO believes to be
required in order to implement these changes, are detailed in Attachment 1 to these
comments.
CIeon Energy Opporlunities for ldqho
5 4.1& 8.1- 2019 vs 2021 lRP as a data source The Company suggests using the "most
recently acknowledged" lRP, which would imply using the 2019 version, as a data source
in the study. CEO believes that deficiencies in the modeling methods used in developing
the 2019 IRP resulted in systematically under-estimated west coast wholesale market
prices in that IRP version. Using price estimates from the 2019 IRP would unfairly bias
the value of avoided energy cost analyses against self-generators and thereby produce
unfair results in the study.
As has been previously acknowledged, ldaho Power did their best in developing the
2019 lRP. But the 2019 IRP was the first time the Company used a capacity expansion
modeling approach and in that first iteration the Company had severe difficulty
modeling the use of storage as a resource.
The difficulties ldaho Power encountered in their 2019 modeling the value of storage
call into question the market price estimates produced in that IRP iteration (see IPC-E-
19-19, Sierra Club Comments, Jan 20,2O2L, p. 3-4). The 2019 IRP added 23 Gigawatts of
wind and solar resources in west coast states without adding any storage. As a result,
unrealistically large amounts of variable generation were modeled as flowing onto
markets with the effect of depressing forecasted wholesale market prices.
As predicted when making their third submitta!, !PC noted that future lRPs will "proceed
more smoothly''(|PC-E-19-19 Amended application p 2). The 2021 IRP process has
indeed proceeded more smoothly and, as a result, has produced dramatically different
outcomes when compared to the 2019 version. The most current 2021action plan calls
for the Company to procure approximately 2OOO%o more storage and five times more
solar than the 2019 lRP, indicating a sharp difference in how current data and old data
value solar. Using the outdated 2019 IRP would result in misleading results in the study's
assessment of the value of solar self-generators can provide.
Given the Commission direction to use the most current data sources, CEO strongly
encourages the Commission to direct tPC to use the 2O2L, and not the 2019, IRP for any
data sources required (including, for example, in section 8.1 for determining first
capacity addition date) in the study envisioned in this docket.
S 4.4 - Fuel Price Risk By not including CEO's proposed section 4.4, the Company
omitted the recommendation and established practice of including avoided fuel price
risks. As noted by the lnterstate Renewable Energy Council ("Checklist of Key
Requirements for a Thorough Evaluation of DSG Benefits," A Regulotor"s Guidebook:
Colculoting the Benefits ond Costs of Distributed Solar Generation, p36):
A fue! price hedge value should be included. ln the past, utilities regularly
bought natural gas futures contracts or secured long-term contracts to avoid
price volatility. The fact that this is rarely done now and the customer is bearing
fr Cleon fnergy Opportunilies for{dqho
the price volatility risk does not diminish the fact that adding solar generation
reduces the reliance on fuels and provides a hedging benefit.
ln Order No. 34753 (PAC-E-19-08, Attachment A, @ p2), the Commission directed the
utility to "Analyze whether there is a fuel price guarantee value provided by on-site
generators as a class". The avoided energy value stack should include this value. CEO
proposes adding a section 4.4 to remedy this oversight.
$ 7 & 18.1- !f a fair value is provided for ECRs, then purchases from self-generators are no
rpre asrurce of snbdtlythan anyother nnrlet purchae. ln section 7 the
Company posits a concern about ECR impacts "on non-generating customers" and a
need for avoiding "inter-class subsidies". Similarly, in section 18.1 the Company raises a
concern about allocation of ECR charges via an identification of "customer classes
responsible and the potential impact to other customer classes".
lf the ECR rates reflect a fair value based on both the costs and benefits they produce on
IPC's system, how could those impacts produce inter-class subsidies? With fair
compensation for ECRs what difference does it make which customer class is
"responsible" for the export event? How would allocation of incurred costs for power
purchased from customers at fair ECR rates impose "impacts to other customer classes"
any more than any of the Company's other power purchases produce?
Fair ECR rates means those exports do not produce a subsidy. CEO proposes that
sections 7 and 18.1 be eliminated.
5 8. 10 & 11 - Capacity should be valued by the total effect on Company load, not just based
uponthezubsetofselfgeneratbnu,hkhbexported. ln sections 8, 10 and
11 the Company proposes analyzing the capacity value provided by self-generators
based only on the portion of the generation that is exported. When determining the
capacity value of efficiency or QF alternatives, the basis for analysis is the amount that
the Company's net load is reduced. The same analytical basis should be employed in
this study.
Capacity values associated with self-generation should be based upon the extent that
such generation reduces Company load. lrrespective of whether that self-generation
results in higher exports from the customers who self-generate or from their meeting
some of their need from their self-generation and thus reducing !oad, the appropriate
measure for capacity is based on how much the Company's net load is reduced, not just
the portion self-generators export.
The language in sections 8, 10, and ll should be adjusted accordingly
Cleon fnergy Opporlunilies for {doho
S 16.4 fhere are addtbnal nahes rsochted with the renenable attrbutes of
exports from self-generators beyond just REC sales. ln section 15.4 the Company
limits the basis for quantifying the value produced by net metering exported energy to
just REC sales. CEO believes this is an unnecessarily restrictive view which would result
in underestimating the inherent value of self-generator exports.
There are potentially large accounting related costs that could be incurred in
establishing REC certification for exports from a large number of self-generators. The
Company has previously informed the public of large and growing requests from
customers for "Green Powe/'. Exports from self-generators are a potential source of
the renewable power customers are increasingly interested in procuring from the
Company.
CEO believes section 16.4 should be expanded to include a review of all possible ways to
harvest the renewable energy value of self-generator exports, not just via REC sales.
S 19 & 19.1 - Cost-of-Service (COSI studies, inherently based on historic cost information,
are analytically inappropriate for valuing the cost and benefits of future additions of
customer self-generation. lnclusion of COS studies are also procedurally
inappropriate. For both reasons section 19 should be modified to exclude COS
studies. lnsection19,theCompanyproposesthatitsstudyofthe"Cost$
Benefits, and Compensation of Net Excess Energy'' should include an evaluation of cost-
of-service methodologies and rate designs for customer-generators. CEO believes that
any COS based review is inappropriate and outside the scope of the study.
Review of rate design options for customer-generator exports is a completely
appropriate topic for study review. But piecemea! study of rate designs for
consumption which specifically target customer generators is inconsistent with the
principles previously established by the Commission. Order 34046 states, "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."
Further, customers without on-site generation are impacted by such evaluations and
have not been duly noticed. Fixed cost recovery for customers with low consumption or
part-time electricity requirements is not specific to customer-generators. All customers
impacted by evaluating cost-of-service methodologies and potential rate designs have
not been given fair opportunity to engage.
Partially vetting consumption side rate alternatives in the context of this study
discourages the necessarily holistic consideration of issues, opportunities, and options
related to self-generation and should not be undertaken outside of a general rate case
Cleon Energy Opporlunities for {doho
ru - The added costs to Cl&l customerc imposed by the 100kW proiect eligibility cap and
the discouratement of investments in customer-owned generation should continue no
longer than absolutely necessary. Given prior discussion with stakeholders,
CEO believes the pros and cons of changing the project eligibility cap for C!&! customers
could be resolved in a more-timely manner. CEO proposes that the Company file an
application proposing changes to the Cl&l cap, which should be no less than a
custome/s peak electric !oad, as soon as possible.
Respectfu lly zubmitted on l,lovember 3O,2O2L
r\h
KebeyJae
Attorney for Clean Enegy Opportunitis fur ldaho
ry Cleon Gnergy Opporlunilies for{doho
THIS PAGE INTEI{TIONALLY LEFT BLAI{K
3 Oeon Gnergy Opportunltles forldqho
tPc-E-21-21
ATTACHMENT 1
to
Clean Energy Opportunities for ldaho Reply comments
November 3O,2O2L
Only sections of the framework with proposed changes are shown.
Proposed deleted materials shown with strikethrough (€xampl€+.
Both deletions and additions are shown in red.
Brief summary of CEO rationale for proposed change shown in underlined italics
Avoided Energy Value
5 4.t & 8.L - CEO believes the modelino method used in the 2079 IRP hod 'Tirst-time-used"
problems thot svstemoticollv under-estimated morket prices. Usino orice estimotes from the
2079 IRP would unfoirlv bias the volue of avoided enerov cost onolvses oooinst self-aenerators
therebv producino unfoir studv results. The 2027 IRP is the opprooriote doto source for use in
this studv.
5 4.4 ln Order No. 34753 PAC-E-79-08 Attochment A^ @ p2l the Commission directed the
utilitv to "Analvze whether there is o fuel orice ouorantee volue provided bv on-site qenerotors
os a closs". The ovoided enerav value stack should include this volue. CEO proposes addino o
section 4.4 to remedv this oversioht.
4 Provide the calculations and documentation for the avoided cost of exported energy using:
1.EnergypricecalculationsfromtheCompany's2o27@
lntegrated Resource Plan ("lRP")
2. Market index price assumptions
3. Other methods to determine an avoided energy value (e.g., surrogate resource)
4. Fuel price hedging value.
CIeon Cnergy Opporlunilies for {doho
6 7 & 78.7- lf o fair volue is provided for ECRs. then purchoses from self-qenerotors are no
more o source of subsidv to a porticular customer class than anv other market purchase. CEO
believes Sections 7 ond 78.7 os drofted ore preiudiciol ond should be deleted.
7 Gensider any impaet ef the EGR en nen-generating eustemers te ensure ether eustemer elasses are
heJd neutralte aveid inter elass subsidies,
Avoided Capacity Value
S 8. 70 & 77 - When determinino the copociil volue of efficiencv or QF olternotives. the bosis
for onalvsis is the amount that the Componr/s net lood is reduced. The some onolvticol basis
should be emploved in this studv. CEO believes copacitv should be volued in this studv bv the
total effect on Comoonv load not iust bosed upon the subset of self-oeneration which is
exported.
8 Anatyze the capacity value based on the amount that the Company's load is reduced e++xpe*e+
enerreiaeA by customer-generators. Provide the calculations and documentation for
evaluating the capacity resource value and the contribution to reducing the Company's system
coincident peak (i.e., the Company's net peak - the hour(s) that drive the need for capacity or
capacity-equivalent resource additions)as a component of the Company's broad resource
portfolio.I
1. Consider valuation of avoided capacity based on the timing of the Company's first
planned capacity additions in the 2021 IRP d€fi€ien€y and how it can be incorporated
into the development of the ECR.
Avoided Distribution Costs
10 Quantify the value of distribution costs that could be avoided based on the amount that the
Company's load is reduced ef experted energy previCeC by customer-generators.
Avoided Transmission Costs
11 Quantify the value of transmission costs that could be avoided based on the amount that the
Company's load is reduced ef experted energf previded by customer-generators.
Avoided EnvironmentalCosts and Other Benefits
6 16.4 CEO believes the studv <hould incltfic o review of all oossible wovs to horvest the
renewoble enerav volue of self-oenerator exports. not iust via REC soles,
16 Evaluate environmental and other costs that are quantifiable, measurable, and only include
avoided costs that affect rates.
4 Quantify the possible net values of renewable attributes
produced by net metering exported energy.
} Cleon Energy Opporlunilies for{doho
Recovering Export Credit Rate Expenditures
18 Rnalyze methods for how these costs would be allocated and recovered by rate class.
1 ldentify the eustemer elasses respensrble anC the petential impaet te ether eustemer
€las€€g.
ffi Export Rate Design
6 79 & 79.7 Review of rate desiqn options for customer-oenerotor exoorts is o completelv
oopropriote tooic for studv review. But piecemeol studv of rote desions for consumption which
specificollv taroet customer oenerotors. is inconsistent with the princioles previouslv estoblished
bv the Commission. CEO believes thot partiollv vettino consumotion side rate alternotives in the
context of this studv discourooes the necessorilv holistic considerotion of issues. opportunities.
ond options reloted to self-qenerotion ond should not be undertaken outside of o aenerol rate
case. References to historicol cost of service should not be included within the studv framework.
19evaluatepotentialexportratedesignsforcustomer.generators
that could be implemented in the Company's next general rate case.
1 Previde the impaet te all eustemer elasses, ineluCing eustemer generaters.
Project Eligibility Cap
6 20 - The odded costs to Cl&l customers imposed bv the 700kW proiect elioibilitv cop ond the
discourdqement of investments in customer-owned aenerotion it produces should continue no
lonaer than obsolutelv necessorv. CEO proposes thot the Componv file an ooplication proposino
chanqes to the Cl&l cop which should be no less than o customels peok electric lood. as soon
os possible.
20 Anatyze pros and cons of setting a customer/s project eligibility cap according to a custome/s
demand (peak electric load) as opposed to predetermined caps of 25 kW and 100 kW. As soon as
possible after an order issues on this study design proposal, the Company should file an application
proposing changes to the Cl&l cap.
L. Analyze at 100% of custome/s demand.
2. Analyze al t25oA of custome/s demand.
fr Cleon Energy Opporlunilies for{doho
CERTIFICATE OF SERVICE
I hereby certify that on ttris 30th day of November, zDzl,ldelivered true and correct copies
of ttre foregoing REPLY COMMENTS to the following persons via the mettrod of service noted:
Elecronic Mail Delivery (See Order No. 34602)
Idaho Public Utilities Commission
Jan Noriyuki
Commission Secretary
[e-mail]. sov
Idaho PUC Snff
Erick Shaner
Deputy Attorney General
Idaho Public Ufrlities Commission
[e-mail]. gov
ABC Power Company,LLC
Ryan Bushland
184 W. Chrisfield Dr.
Meridian, tD 83646
[e-mail]
City of Bobe
Deputy City Attomey
Boise City Attomey's Office
150 N. Capitol Blvd.
PO Box 500
Boise,ID 83701-0500
e iewell@citvofboise. ors
boiseciwattornev @ cirvofboise. orp
CometEnergy,LLC
George Stanton
13601W. McMillan Rd, Suite 102
PMB 166
Boise, ID 83713
George. [e-mail]
Idahome Solar, LLC
Tller Grange
2484 N. Stokesberry Pl. #100
Meridian,ID 83646
tvler@idahomesolar. com
ldaho Irrigation Pumpers Association, Inc.
Eric L. Olsen
Echo Hawk & Olsen PLLC
505 Pershing Ave., Suite 100
PO Box 6119
Pocatello, tD 83205
[e-mail]
Idaho Power Company
Lisa D. Nordsuom
Connie Aschenbrenner
Idaho Power Company
1221 West Idaho Sueet" 83702
P.O. Box 70 Boise,Idaho 83707
lnordstrom@idahopower. com
dockets@ idahopow er.com
caschenbrenner@idahopow er.com
IdaHydro
C. Tom Arkoosh
Arkoosh Law Offices
913 W River Sreeg Suite 450
P.O. Box 2900
Boise,ID 83701
tom. arkoosh @arkoosh. com
erin. cecil@ arkoosh. com
IPC-E-21-21: CEO Reply Comments - Certificate of Service - 1
Idaho Clean Energy Association
Kevin King
P.O. Box 2264 Boise, [D,83702
208450-0880
staff @ idahocleanenergy. org
Idaho Conservation League
Benjamin J. Otto
710 N. 6th Sr Boise,Idaho 83702
botto@idahoconservation. ors
ldaho Solar Owners Network
Joshua Hill
1625 S. Laah
Boise,ID 83705
j o shuash ill@ gmail. com
[e-mail]
Industrial Customers of ldaho Power
Peter J. Richardson
Richardson Adams, PLLC
515 N. 27th Sr, P.O. Box 721,8
Boise,Idaho 83702
oeter@richardsonadams. com
Dr. Don Reading
6070 Hill Road Boise, Idaho 83703
d readin s @ min d sorin s. com
Richard E. Klucl<hohn, prc se
Wesley A. Kluckhohn,prc se
2564 W. Parkstone Dr.
Meridian,ID 83646
[e-mail]
[e-mail]
Micrcn Technology,Inc.
Jim Swier
8000 South Federal Way
Boise,ID 83707
[e-mail]
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hafi, LLP
555 17ttr Sneet Suite 3200
Denve4 CO 80202
darueschhoff @hollandhart. com
urelson@hollandhart. com
awjensen@hollandhart. com
aclee@hollandhart. com
elgarganoamari@hollandhaft. com
Kiki Leslie A. TldweII, prc se
704 N. River St. #1
Hailey,ID 83333
[e-mail]
s\e
Kelsey Jae
Anorney for CEO
IPC-E-21-21: CEO Reply Comments - Certificate of Service - 2