20211130Reply Comments.pdf

::1,-::-.1-- iir'ii*
Benjamin J. otto (lsB No. 8292)
710 N 6ft Street
Boise, ID 83701
Ph: [phone]xt12
[e-mail]
IN THE MATTER OF IDAHO
POWER COMPAI\Y'S
APPLICATION TO INITIATE A
MULTI.PHASE COLLABORATIYE
PROCESS FOR THE STUDY OF
COSTS, BENEFITS, AND
COMPENSATION OF NET EXCESS
ENERGY ASSOCIATED WITH
CUSTOMER ON.SITE
GENERATION
i,:ii:-,'. Ii; ?ii Z:22
{&,r,'\11
Attorney for the Idaho Conservation League
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. IPC.E-2I.2I
IDAHO CONSERVATION LEAGUE
REPLY COMMENTS ON STUDY
FRAMEWORK
The Idaho Conservation League flCL) submits the following Reply Comments on the
proposed customer on-site generation study framework. Following Order 35176,lCL filed
Formal Comments on the Study Design on October 13,2021. Those comments formalized ICL's
initial input shared with the parties in the initial phase of this docket. We continue to stand by
those comments. Pursuant to Order 35193,lCL now files these Reply Comments to respond to a
few issues raised in other parties' filings. Overall, ICL supports the improvements and
clarifications to the proposed study framework provided by the PUC Stafl Idaho Power, and all
the other stakeholders. ICL comments seek to clariff our positions and suggest some further
improvements to the study design.
I. Cost of Service and Rate Design
ICL wishes to clarifu our position on whether and how to include cost of service and rate
design issues into a study of the costs, benefits, and compensation of net excess energy
associated with customer on-site generation. In sum: ICL agrees with Staff and Micron that cost
of service and consumption rate design options may be part of this study, but any changes in this
area must happen in a general rate case.
ICL Reply Comment
tPC-E-zt-2t I
November 30,2021
We recognize the further clarity provided by Micron, Stafi and Idaho Power. Micron
provides a helpful distinction by explaining they wish to evaluate a range of cost of service
methods in order to gather data on the topic and not because Micron has already assumed any
cost shifting.l We also support the PUC Staff s position that any changes to cost of service
methodologies or rates must occur in a general rate case.2 Idaho Power improved the study
framework by clariffing that the study will include a range of cost of service methodologies and
will consider this issue across all customer classes.3 In addition, Idaho Power clarified that the
study will not presuppose any cost shift, will consider a range of methods and options as applied
to all customer types, and will provide information to be further considered in a general rate case.
The above revised approach to explore a range of options that could be implemented in a
future case after fuller review addresses ICL primary concern about this topic. As we explained
in our formal comments, cost of service applies to the consumption of utility services by
customers. Cost of service attributable to customer classes is an important topic for the
Commission to consider, but this should occur in a general rate case where all costs and
customer types are comprehensively considered. Regarding rates: it is appropriate to consider
rate options related to the customer-generator exports in this study, but changes to rates for
consumption are appropriately implemented in a general rate case. Further, this distinction
respects the perspectives of other parties who uniformly recommend focusing on customer-
exports and not consumption of utility power. Given these changes, ICL believes this portion of
the study framework is more appropriately designed
II. Measurement Interval
ICL appreciates the PUC Staff and Idaho Power clari$ing the framework by changing
"separate channel" to the term "instantaneous" or "real time".4 Idaho Power provided some
further clarifications in the revised study framework filed as Attachments I and 2 on November
16,2021.5 While improved, ICL believes a key feature is missing - how the measurement
interval affects the value of the export to the customer-generator. As we explained in our Formal
1 Micron Final Comme nt at 2 - 3 (November I 6, 2021).
2 StaffComments at 5 (November 16,202l).
3IPC Final Comment, Attachment 2 at 4.
a StaffComments at 3; IPC Final Comment at 4 (November 16,2021).
5 fPC Final Comment at 4, Attachmefiz atp. I (ICL uses Attachment 2, legislative format, to see the changes).
ICL Reply Comment November 30,2021LPC-E-21-21 2
Comments, a comprehensive study should assess how the measurement interval enables
stakeholders to match the timing of exports with the value to the system.6 Adding this clarity to
the Measurement Interval section is especially important to fully and fairly examine the capacity
value provided by customer-generators.
III. Export Credit Rate
All stakeholders provided productive input on the value categories and methodology
options to determine a fair and robust export credit rate. Idaho Power's revised framework
incorporates most of these suggestions. ICL has six remaining concerns:
(a) The study should use the most recent IRP for data sources;
(b) Methods exists to examine the locational benefits unique to distribution resources;
(c) IPC proposes a vague term to study "any impact" of the energy credit rate;
(d) The study narrowly defines capacity value;
(e) The study should asses avoided distribution and transmission costs by all customer-
generators on the same circuit regardless of customer class; and
(f1 Many environmental benefits are already included in rates and should be included in
the Export Credit Rate.
a. Use the 2021 IkP os the starting pointfor data
First, because the Commission ordered that this study should use "the most current data
possible."T Idaho Power should rely on data from the 2021 IRP and not the 2019 IRP. Idaho
Power proposes to use the now-stale 2019 IRP because it is the most recently acknowledged IRP
by the Commission.8 The Commission's acknowledgement of an IRP, however, does not provide
additional weight to the ongoing relevance of the IRP data, it just confirms that the Company
followed a required process:
"With this Order, the Commission does not approve the IRP or any resource acquisitions
referenced in it, endorse any particular element in it, opine on Idaho Power's prudence in
selecting the IRP's preferred resource portfolio, or allow or approve any form of cost
recovery. The appropriate place to determine the prudency of the IRP or ldaho Power's
5 See ICL Formal Comments at7 - 10. (October 13,2021).
7 Order No 34509 at 9.
8IPC Formal Comment at Attachment2,page l.
ICL Reply CommentLPC-E-21-21 3
November 30,2021
decision to follow or not follow it, and the validation of predicted performance under the
IRP, is a general rate case or other proceeding where the issue is noticed.' and does not
provide any review or endorsement of the underlying data."e
Further, the Commission has recognized in the past that determining avoided cost values
does not require an acknowledged IRP. For example, Idaho Power uses the most recent IRP to
establish resource values and rates for independently-owned generation before the Commission
has acknowledged that IRP. The Commission endorsed this approach in Order 32697 by ordering
that "when a utility submits its Integrated Resource Plan to the Commission," the utility should
file a parallel docket to examine avoided cost pricing updates based on the just-filed IRP.l0 ICL
is a long-term participant in Idaho Power's IRP Advisory Commiuee and we support the
comments of Clean Energy Opportunity describing how the current 2021 IRP shows a
fundamentally different load profile, a different preferred resource mix, and an increasing focus
on flexibility rather than basic capacity when compared to the 2019 IRP.ll All of this new
information highlights the increasing value of distributed energy resources to ldaho Power's
rapidly growing system. Using the most recent IRP also supports the Staff position that the
Export Credit Rate should be based on future values and not just historical data.t2lCL
recommends the Commission direct Idaho Power and others to use the 2021 IRP as the basis for
the most current data available.
b. Methods to Determine the Timing and Locational Value of Distributed Resources
An essential characteristic of customer-owned generation is the placement of small
resources distributed across the grid at the distribution level. We appreciate Idaho Power adding
in an assessment of the time and location benefits that distributed resources can bring to the
system.13 We also agree this may result in a more accurate avoided cost. However, we are
concerned with ldaho Power's caveat that "if a method is not available" they will evaluate a
placeholder.la Other states and utilities have used established tools and methods in this area,
e OrderNo 34959 at25.
roOrderNo.32697 at23.u See Clean Energy Opportunity Second Comments (November 16,2O2l).
t2 StaffComments at 4.
13 IPC Final Comment at 5, Attachm ent2 at l.
14 IPC Final Comments, Attachment 2 at l.
ICL Reply CommentrPC-E-21-2t 4
November 30,2021
which primarily focus on avoided distribution capacity, avoided line losses, as well as reliability
and resiliency benefits. This webpage from the Lawrence Berkeley National Lab provides
dozens of examples addressing this area going back to 2017: https://emp.lbl.eov/projects/time-
value-efficiency. ICL recommends that the Commission direct Idaho Power to utilize these
established methodologies to assess the locational value of distributed energy and refrain from
using a placeholder for any avoided costs. In addition,ICL recommends that Idaho Power
prepare an assessment of how the timing of exports relates to the utility's avoided costs at that
same time.
c. Avoid Vague Terms to Ensure Transparency
Idaho Power's November 16ft Final Comments and Revised Study Framework included,
for the first time, a new issue to study "any impact of the [export credit rate] on the non-
generating customers to ensure other customer classes are held neutral to avoid inter-class
subsidies."ls ICL is highly concerned that the vague statement "any impacf' undercuts the
transparency and rigor of this study. The statement "avoid inter-class subsidies" presupposes that
a subsidy exists and undercuts IPC's commitment to neutrally study a range of cost of service
methods and rate options. Also, it is not clear how the impact of the export credit rate on non-
generating customers is relevant to determining the value of the export for generating customers.
Rather, the impact to non-generating customers is related to the methods IPC uses to account for
the cost of any credit, which is addressed in the export credit rate recovery study components.
Because the term "any impact" is vague and does not provide useful information about the value
of the export credit rate, ICL recommends the Commission remove component #7 from the
Revised Study Framework.
d. Capocity Yalue
The capacity value is likely to be a primary driver of the value of export credit rate. ICL
supports most of the Staffs proposed improvements and notes that Idaho Power incorporated
this into the Revised Study Framework. Our remaining concern is the focus on adding new
resources to meet future capacity and not on avoiding capacity costs whenever they occur. Idaho
Power's system needs capacity in every hour of the year and this always incurs costs, such as
ls IPC Final Comment, Attachment 2 at page 2 (adding framework component 7)
ICL Reply CommentLPC-E-21-21 5
November 30,2021
fuel for peaking gas plants. As the system grows, forecasts show that Idaho Power may need
additional capacity to meet load. A customer generator that exports during peak hours can avoid
both existing capacity costs and defer new capacity costs. We point out that just as existing
PURPA projects get paid for capacity because they are currently deferring capacity needs,
existing customer-generators should be paid for capacity regardless of the utility deficiency date.
We recommend the Commission amend number 8(a) in the proposed framework to: "Consider
valuation of avoided capacity based on the capacity costs ldaho Power incurs at the some time
the export occurs."l6
e. Distribution and Transmission Avoided Cost
ICL is pleased to see that Idaho Power accepted our suggestion to look at avoided
distribution and transmission costs separately.lT However, we are concerned that the Company's
suggestion to study the impact at the customer class level misses the mark. For distribution
circuits, the key point is whether the amount of distributed resources on that circuit can avoid
costs regardless of the customer class that hosts the resource. For the larger transmission system,
the key question is whether the entire set of distributed energy resources can avoid transmission
costs, regardless of the customer classes hosting each resource. ICL recommends the
Commission revise this portion of the Study framework to say:
10.a. "Evaluate the range of avoided capacity between individualcustomer generators
and avoided capacity costs a, the distribution circuit level." and
I l.a. "Evaluate the range of avoided capacity between individual customer generators
and all customer-owned generators a/ the transmission system level."
f. Utility rates include environmental costs that can be avoided and other benefits realized
ICL believes the environmental and other benefits included in the Revised Study
Framework are alltypes of costs that are typically included in rates today and thus should be
included in the export credit rate value. The Staff set out four criteria for including
environmentalbenefits into the export rate value.l8ICL believes the environmental benefits
listed in the study fit these criteria. Utility rates today include pollution control costs that arise at
15 IPC Final Comment, Attachment 2 atpage2
17 IPC Final Comment at 7.
18 StaffComment at 6.
ICL Reply Comment
[PC-E-2I-21 6
November 30,2021
Idaho Power owned fossil plants every time they operate; customer generation will help Idaho
Power avoid these costs. Idaho Power's IRP process shows that customer loads and hydroelectric
production will deviate from historical norms due to climate change and incur different operating
costs for the utility. Pollution control costs and operating costs are both typically included in
rates today. In both examples, as long as customer generators are fairly compensated, then non-
participating customers are held harmless. Also in both examples, the forecasting of these
benefits is at least as accurate as other forecasts like gas prices, wholesale electricity prices, and
other resource costs. Just like every reputable study of the value of customer-generation, we are
encouraged to see the environmental, reliability, and security benefits included in this study
framework and look forward to seeing these values reflected in the export credit rate.
IV. Implementation Issues
a. Customer Credit Expiration
ICL is encouraged that both Staff and Idaho Power clarified that the study will consider
whether customer credits should ever expire and, if so, how to do so in a manner that protects the
customer generators.le We support the topics and issues highlighted in the StaffComments of
November 16,2021.20ICL recommends the Commission direct Idaho Power to add one
additional consideration on this topic - impact to the customer generators whose credits would
potentially expire. Including this perspective will provide a more well-rounded study than the
current focus on impacts to the Company and non-customer-generators.2l
b. Frequency of Updates to the Value of Solar
ICL interpreted Idaho Power's statement in the proposed Study Framework that it would
"quantiS the impact of biennial updates as compared to annual updates of the ECR" to say that
the study will look at those two options. We are pleased to see that Idaho Power clarified that
these two specific time periods were actually just "examples" and the Company has no desire to
limit the scope of the study.22 We recommend the Commission request further clarity on what
'e StaffComments at 7; IPC Final Comments at 12
20 StaffComments at 7.
21 See IPC Final Comment, Attachment2 at 4-5.
22 IPC Final Comment at 13.
ICL Reply Comment
[PC-E-2I-21 7
November 30,2021
Idaho Power means by "Consider the impact of timing of updates".23 For example: what types
of impacts will the study consider? Is the Company, customer-generators, or non-customer
generators the impacted entity? And, what are the options to avoid, minimize, or mitigate each
impact?
c. Individual System Caps
ICL seeks to clarify our suggestion regarding the cap on individual system sizes. ICL did
not suggest that the Commission address the system size cap before a comprehensive study, as
alleged by Idaho Power.24 Rather, we recommended that this issue could be dealt with in a
separate docket in parallel with the export value study. The sizing of individual systems to meet
individual customer needs does not dictate the value of exports from customer generators. ICL
believes that system design rules that more accurately match customer systems with customer
needs is a common sense step to take as soon as possible. We recommend the Commission direct
Idaho Power to open a parallel docket that addresses the system size cap. This approach is
similar to the recent dockets implementing streamlined interconnection rules and inverter
settings while stakeholders work through the larger issue of the export credit rate.
Conclusion
ICL recognizes the hard work of all the parties and the public input thus far. The Revised
Study Framework is a better starting point for the VOS Study than initially filed. Idaho Power's
statement that "nothing in the Revised Study Framework is in anyway intended to be
limiting"2sis also very encouraging. We look forward to this curious, inclusive approach to the
analysis of the value of customer generators exports.
Respectfully submitted this 30th day of November,202l.
/s/ Beniamin J Otto
Idaho Conservation League
With technical assistance from
Dainee Gibson-Webb, Conservation Analyst
Emma Sperry, Climate Fellow
23 IPC Final Comment, Attachment I at 5
24 IPC Final Comment at I l.
2s PC Final Comment at 13.
ICL Reply Comment
[PC-E-ZI-21 8
November 30,2021
CERTIFICATE OF SERVICE
I hereby certifu that on this 30th day of November 2021,I delivered true and correct
copies of the foregoing REPLY COMMENTS to the following persons via the method of service
noted:
JslBenjamin J Otto_
Idaho Conservation League
Electronic mail only (See Order 34781):
Idaho Public Utilities Commission
Jan Noriyuki, Secretary
[e-mail]. gov
Erick Shaner
Deputy Attorney General
Erick.shaner@puc. idaho.gov Kelsey Jae
Law for Conscious Leadership
[e-mail] Power
Lisa D. Nordstrom
Connie Aschenbrenner
lnordstrom@idahopower. com
caschenbrenner@idahopower. com
[e-mail]
Industrial Customers of Idaho Power
Peter J. Richardson
Richardson Adams, PLLC
[e-mail]
Dr. Don Reading
[e-mail]
IdaHydro
C. Tom Arkoosh
Arkoosh Law Office
[e-mail]
[e-mail]
Idaho Clean Energt Association
Kevin King
sta ff@ i d ahoc I eanener gy. or g
Kiki Leslie A. Tidwell, pro se
[e-mail]
ICL Reply Comment
tPC-E-21-21
Clean Energt Opportunityfor ldaho
Michael Heckler
Courtney White
m i [e-mail]
courtney(@c leanenergyopporun ity. com
Idaho Solar Owners Network
Joshua Hill
Terri Ottens
[e-mail]
[e-mail]
Micron Technologt Inc
Jim Swier
Micron
[e-mail]
Austin Rueschoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart, LLP
darueschhoff@ ho I landhart.com
tnelson@hol landhart.conr
awj ensen@hoI Iandhart.com
ac lee@hol landhart.com
gl garganoamari @hollandhart.com
City of Boise
Ed Jewell
Deputy City Attorney
ejewel [e-mail]
boisecityattorney@cit),ofboise.orq
9
November 30,2021
Idala Inigdion Pwnpers Association
Erie L. Olsen
Echo Hawk & Olsen, PLLC
[e-mail]
Nchard E. Kueklnnt, pro se
WesleyA. Kttcklwrn, pro se
kluckhorn@.email.com
wkluckhomtEsmail.com
ABC Pou,er he
RyanBushland
Rvan.bushland(Dabcoower.com
Comet Energt, LLC
Geotge Stanton
Georee.stanton(Acometener gy.com
Idallome Solar, LL(
Tyler Grangr
[e-mail]
ICL Reply Comment
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November 30,2A21