20210907Comments.pdf

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IPC-E-21-2I "Study Design" Objectives and Staff Questions
Primary Objective (for this case -'rtudy design phese'):
I . Develop a scope of a study - shrdy to be completed by the Company that will help determine:
a. The dollar amount paid to on-site generation customers in the fonn ofrates, who export energy
on to the Company's grid @xport Credit Rate -'ECR ).
By evaluating:
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o Other "Models" (quantitative/mathematical) for evaluatine rate design
. Valueofavoidedcostof€,nerry
. Value ofavoided cost ofcapacity
. Value ofcost ofavoided tsansmission and distribution
. Value ofcost ofavoided line losses
. Cost to integrate customer-ge,neration exported to the grid
. Environmental and Other Benefits
. Idaho Power profit marein by customer class and by measurement intervals
(month. hour. separate channel)
. Cost ofpurchased power by provider tq)e (wind. solar. hydro-qeneration) by
measurement intervals (month. hour. separate channel)
. Recommendations regardine the timing and threshold number of customer
senerators when the PUC should implem€nt a chanee to the ECR
. Fair method for evaluation ofall customerVclasses to ensure the systemic
process remains fair. just. and reasonable for all customers
r How does IPC define "fair. iust & reasonable? What factors need to be
considered for each fair. iust & reasonable.
,o What recommendations does IPC for weishtins the factors h the
evaluation of faimess. iustness. and reasonableness?
b. The proper ECR measurement interval (month, hour, separate channel).
By identifing, characterizing, and/or quanti$ing implementation issues of potential
ECR solutions and rate designs using the different measurement intervals.
Su b-objectlves of Study:
l. Identifr, characterize and/or quantiS problems and issues that potential ECR altanative
solutions will create that will impact the Company's ability to recover costs from self-
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geo€rating customerc. The evaluation should irolude issues across the ECR sohfion spece
and Non- ECR solutions spooe using the diffoent ECR measurement intervals (mtb, hour,
s€parat€ chao[el) and ECR rate designs.
2. Ide,nti$, cbaraotrize and/or quantiS iryocts to both participating and non-paticipating self-
g€,lrerating custom€rs (e.g. bill iryocts, subsidies) relirtive to potcntial ECR sohtions. The
evaluation should inohde issus across thc ECR solrtion spoce using lhe differtnt ECR
maasursm€nt intervals (month, hour, seprate chaone$ and ECRmtc d€signs.
3. Evaluate alteroatives (inchding the pnocess definition" AeqU€ncy of rpddes, fiming,
customers aff€cte4 mam€tite of customo imacted relative to total wst . etc.) for rydating
the ECR to eosre it rcmains fair, just, md reasonable for all customers.
4. Provide pr€cise definition ofterms usod in the shdy.
Company's Objectives from Application and Testimony
l. The Company's primary objective of the satdy process is to establish a sustainable on-sile
generation offering thal linils subsidies by implementing a more equitable pricing and
comwnsation strucfure.
o Recommendations to modfy the existing offering should focus on cost-of-service
principles, while identifying the appropriate value of ucess net energ) to en:ture
equitable compens ation for on-site generators.
2. To prepore and file a "credible ond loit study" of the cosu ond benefiu of distributed on-site
generotion using the most currcnt dotoL . .
9 Llhat.factors determine "credible and fairness to the PUC"?.
hoposod Scope: On-Site Geireration Study
Merrurement Intervd
l. Calculate the class reveoue roquirem€nt if each of the existing customer-generators net their
energ)/ exports:
. Sffi Wh* changes can the Company expect to the rwe,nue requirement other
than the amount the Company purchases from the custom€r-g€n€rators?
. $Efri What is the purpose for calculating the class revenuc requlrcment for
purposes of the dweloping the ECR, if each of the existing customer-generators
net their elrergy exports by month, hour, and separate channel.?
a. Monthly
b. Hourly
c. Separateohannel
. M: Will separate channel be split betwe€n input channel and output channel?
Ifnot, please explain.
2. Calculatetheexportcreditpayme,ntsifeachoftheexistingcustomer-getreratorsnettheirencrgy
exports:
a. Monthly
b. Hourly
c. Se,parate channel
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3. Analyze bill impacts to existing customer-g€,[eratorc, sratified by usage if energy exports are
netted:
a. Monthly
b. Hourly
c. Separatechannel
Exoort Credit Rate ("ECR')
Avoided Energt Value
4. hovide the calculations and documentation for the avoided cost of exported e,nergy using:
- SEfr: In determining the ECR by evaluating the value of avoided energy cost to
using meter measure,ment intervals by month, hour, and separate channel, please
explain ifthis evaluation should consider the following:
. differe,nt methods to value enerry (surogate, market, proxy, etc.)
. value of energ;r during different times of the day, week, month,
and or yer (e.g. 12 month x 24 hour energy export profiIes)
. Differentconfigurations ofcustomergenerators including non-
exporting customers and customers with storage
a. Energy price assumptions in the Company's most recently acknowledged Inrcgrated
Resource Plan ("IRP")
' ffi: What aszumptions are currently being used from the IRP?
b. Marka index price assumptions
. Stlft Which market indexes prices will be looked at? Real-time, day ahead, 15-
minute, other?
. StafE How do you translate the market index price aszumptions into an ECR?
. $hff: Are you going to base this price on differing hour prices?
5. Provide the caloulations and documentation showing ifthe avoided cost ofexported energy
produced by customer-generators should be discounted to reflect the non-finn nature ofthe
exported energy.
o Stafr: Does the IRP price include the impacts ofnon-firm energy? How does the IRP
pricing mettrodologies take into account non-firm energy (ifany)?
Avoided Capacity Value
6. Analyze the capacity value of exported energy provided by customer-generators. Provide the
calculations and documentation for evaluating the capacity resource value and the contribution to
peak.
o Stafr: What is the most appropriate method for determining the peak need for capacity
from which the avoided cost ofcapacity will be determined and how should it be
calculated?
' 100 Peak hours?
. Peak hours ofeach day?
. Effective Load Carrying Capacity ("ELCC")?
o Stafr: In detemining the ECR by evaluating the value of avoided capacity cost using
meter m€asureme,nt intervals by month, hour, and separate channel, please explain if this
evaluation should consider the following:
. Using different methods to value the avoidedcost ofcapacity (surncgate, market,
Proxy, €tc.)
t How to ide,ntiS the Compmy resource investuent being avoided (generation,
transmission" disribution, ac.)
. Value ofavoided capacity cost based on whcn the Company's system or local
disbibution area first becomes capacity deficient.
. Peak hours that the exported energy will avoid incremental capacity inv€stment
(EL,CC, capacity contribution at pea.k).
. Pot€Nrtial rate designs (paid for all export using capocity contribution at peak or
only paid during ooincideirt peak hours (time ofgeneration), etc.)
. Differentconfigurations ofcustomer generators includingnon-exporting
customers and customers with storage.
Avoided Transmission and Distribution Costs
7. Quanti$ the value oftransmission and distribution costs that could be avoided by energy
exported to the grid by customer-gen€ratom.
o Stafr: fu'e tammission and distribution avoided cost of capacity evaluated separately?
Avoided Line losses
t. Quanti$ the avoided line loss associated with the avoided energy value and avoided capacity
value.
o Stafr: Since electricity is being put back on the grid at the distibution level, does
distribution line losses make sense to include? Or how should this be reflected in the
analysis?
o Staff: How do you avoid duplicate counting ofavoided distribution cost and avoided line
losses at distribution level?
o Stafr: When was the most rocent line loss study? How was this line loss study validated?
Integration Costs
9. Study methods for determining the integration costs of customer-genaators. Provide the
calculations and assumptions showing ifthe ECR should be reduced to accormt for integrating the
custom€r-gen€rator resource.
o Staff: How will the Company present the methods studied? Will all methods studied be
p'resented?
o S&fr: ln determining the ECR by evaluating the cost to integrate customer generation
exported to the grid using meter measurement intervals by month, hour, and separate
channel, please explain ifthis evaluation should consider the following:
. Cost ofreserves needed to balance the variability ofcustomergeneration
exported on to the grid
. Different methods for deermining cost of reserves (i.e. EIM, dispatchable
capacity, Ac.)
. Different configurations of customer generators including non-exporting
customos atrd customers with storage
Recoverins Export Credit Rrte Eroenditures
10. Quanti$ the annual costs under varying assumed ECR values.
o Stofr Howdoesthisdifferfromiterrs I and2above?
11. Analyze how thcse costs would be allocated and recovered by rate class.
o Stsfr: Should the cost of issuing ECRs to customer generators be recovered through the
PCA? Should the PCA mechanism be modified to incorporate the cost of ECRs such as
adjustnents to load and energy-classified fixed production costs in the Sales Based
Adjustment?
Cost-of-Service & Rate Dcrisn
12. Evaluate cost-of-service mefhodology and potential rate designs for customer-g€n€rators.
o Strfr: Please explain how different rate designs might drive different customer behavior
on energy consumption and influence €nergy exports ftrom customer-generators.
o Sffi From a cost recovery perspective, what are the impacts ofraising the customer
charge?
o S&ff: Frcm a oost reoovery perspective, could a demand charge work?
. Demand Charge by the peak hours ofthe month?
. Demand at peak moment?
. Average of de,nrands?
Evaluate revenue-of-service methodolosy and potential rate designs for customer-generators and
Non-customer generation class of IPC customeG.
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sid€ of the eguation. These factors cannot be evaluated independenlly. as the proposat may recommend
changing the "timinq" of measurement from the current monthlv to some other form of time-measurement
(hourlv. separate channel) and are addins a third diminution of"peak demand'.
Proiect Elisibilitv Cro
13. Analyze pros and cons ofsetting a customerh project eligibility cap according to a customer's
demand as opposed to predetermined caps of 25 kW and 100 kW.
o Staff: Should this be analyzed from a customer's peak demand? Other?o Staff: Please indicate the reasoning for predetermined caps of 25kW and l00kW?
o Staf: Does the size of the cap need to consider impacts to safety and reliability of Ole
system?
Environmental and Other Benellts
14. Evaluation ofthe quantifiable environmental and other systern benefits provided by customer-
generators.
o Staff: Are there existing studies that the Company plans to use here?
o Staff: What criteria does the Company plan to use to quanti$ the environmental and
other systems benefits provided by custom€r-gen€ratom?
o Stafr: Are these environmental and other benefits going to be actual dollars avoided?
o Staff: In detennining the ECR by evaluating the Environmental benefits of enagy
exported to the grid using meter measurement intervals by month, hour, and separate
channel, please explain ifthis evaluation should consider using different methods to
value benefits such as the market value of RECs, cost ofcarbon, avoided itrvestrnent cost
of environmental controls, etc.
o Stafr: Does the Company have the potential to collect RECs on behalfofthe custom€f,-
generators? Ifso, should the Company study how to allocate the environmental benefis
to the custome,r-genemtors? Through an adjustme,nt of export credits or other methods?
What would a cost benefit analysis look like for RECs?
Imolementation Issuer
Billing Structure
15. Explain how potential custom€,r-gen€rators and on-site gen€ration system installers will have
accurate and adequate data and information to make informed choices about the economics ofon-
site generation systems ov€r the expected life ofthe systern.
o Stafr: How does the Company plan to display this information? E.g. pamphlets, public
meetings?
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Export Credit Expiration
16. QuantiS the mapitude, duration, and value of accumulated export credits.
o Stafl: Will the calculations from the study be based offof actual data?
. Staffprefers using as much actual data as possible.
o Stcfr: Please explain thc financial impact to the Company ofthe export credits.
17. Explain the need for the credits to expire.
r Staff: Please explain how these will be tracked if credits expire? Will these be
tacked by day ofcredit generation, billing cycle, other?
. Shft How will credits based on kWh vs. a dollar value based on avoided cost
affect the need for policies regarding credit expiration?
. thff: How will excess crcdits be handled at end of the expiration period? Will
theyjust exPire?a. Show how the Company does or does not benefit ftom the expiration ofcustomer export
credits.
. Strfi: Ifthe Company collects money from the customer base for the credib
awarded and those credits expire before the Company has to pay them, does this
constitute a aking?
b. How will the Company deal expired credits that have be€o recovered from custom€f,s?
(Through the PCA or other mechanism) Show how non customer-gen€rators are harmed
or be,nefited from the expiration of customer export credits.
i. Quantit, the impact to non-customer-generators of a 2-year, S-year, and l0-year
Yt#*re show how oredits that have been billed for are retumed to
customers.
Frequency of Export Credil Rate Updates
It. Quanti$ the impact ofbiermial updates as compared to annual updates ofthe ECR.
o $tafi: What process, case, or mechanism (e.g. IRP, separate case, etc.) will ECR
updates be determined? Will thae be udates bascd on a regular schedule or are
there spocific trigg€rs that could be identified signaling the need for a change in the
ECR?