20230601Direct Anderson.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

OF IDAHO POWER COMPANY FOR
AUTHORITY TO INCREASE ITS RATES AND CHARGES FOR ELECTRIC SERVICE IN THE STATE OF IDAHO AND FOR
ASSOCIATED REGULATORY ACCOUNTING TREATMENT.
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CASE NO. IPC-E-23-11

IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
GRANT T. ANDERSON
ANDERSON, DI 1
Idaho Power Company
Q. Please state your name, business address, and 1
present position with Idaho Power Company (“Idaho Power” or 2
“Company”). 3
A. My name is Grant T. Anderson. My business 4
address is 1221 West Idaho Street, Boise, Idaho 83702. I am 5
employed by Idaho Power as a Regulatory Consultant in the 6
Regulatory Affairs Department. 7
Q. Please describe your educational background. 8
A. In May of 2013, I received a Bachelor of Science 9
degree in Microbiology from Oregon State University. In May of 10
2015, I earned a Master of Business Administration degree from 11
Boise State University. In addition, I have attended the 12
electric utility ratemaking course The Basics: Practical 13
Regulatory Training for the Electric Industry, a course 14
offered through New Mexico State University’s Center for 15
Public Utilities. 16
Q. Please describe your work experience with Idaho 17
Power. 18
A. In 2018, I was hired as a Regulatory Analyst in 19
the Company’s Regulatory Affairs Department. My primary 20
responsibilities as a Regulatory Analyst included supporting 21
the Company's Commercial and Industrial customer classes’ rate 22
design and general support of tariff rules and regulations. In 23
2021, I was promoted to my current position as a Regulatory 24
Consultant. My responsibilities expanded to include the 25
ANDERSON, DI 2
Idaho Power Company
development of complex cost-related studies and support of the 1
Company’s Residential and Small General Service ("R&SGS") and 2
on-site generation customer classes’ rate design. 3
Q. What is the purpose of your testimony in this 4
matter? 5
A. My testimony will address the Company’s rate 6
design proposals for residential, on-site generation, large 7
commercial, and industrial customers. 8
Q. How is your testimony organized? 9
A. My testimony is organized as follows: 10
• First, I describe the Company’s proposed rate changes for 11
residential service under Schedule 1, Residential Service 12
Standard Plan (“Schedule 1”), Schedule 3, Master-Metered 13
Mobile Home Park Residential Service (“Schedule 3”), and 14
Schedule 5, Residential Service Time-of-Use (“Schedule 15
5”). 16
• Second, I describe the Company’s proposed Residential 17
Price Modernization Plan for all residential service 18
customers. 19
• Third, I describe the Company’s proposed rate changes for 20
on-site generation under Schedule 6, Residential Service 21
On-Site Generation (“Schedule 6”) and Schedule 8, Small 22
General Service On-Site Generation (“Schedule 8”). 23
• Fourth, I describe the Company’s proposed rate changes for 24
large commercial customers taking primary and transmission 25
ANDERSON, DI 3
Idaho Power Company
service under Schedule 9, Large General Service (“Schedule 1
9”) and for industrial customers taking service under 2
Schedule 19, Large Power Service (“Schedule 19”). 3
• Lastly, I will address updates to Schedule 68, 4
Interconnections to Customer Distributed Energy Resources 5
(“Schedule 68”). 6
Q. Are you sponsoring any exhibits? 7
A. Yes. I am sponsoring the following exhibits: 8
Exhibit Description 9
Exhibit No. 53 Calculation of Proposed Rates 10
Exhibit No. 54 Typical Monthly Billing Comparison 11
Exhibit No. 55 Residential Price Modernization Plan 12
Exhibit No. 56 Schedule 6/8 Non-Legacy Bill Comparison 13
I. RESIDENTIAL RATE DESIGN 14
Q. What are the Company’s residential service 15
schedules? 16
A. Idaho Power has four residential service 17
schedules, Schedules 1, 3, 5, and 6. Schedule 1 is available 18
to all customers taking service for general domestic use. 19
Schedule 3 is available only to master-metered mobile home 20
parks included on the Company’s list of “grandfathered” mobile 21
home parks. Schedule 5 is an optional, time-of-use pricing 22
program with an on-peak and off-peak time-of-use period. 23
Schedule 6 is an optional net metering service that I will 24
more fully describe later in my testimony. 25
ANDERSON, DI 4
Idaho Power Company
Q. What is the annual revenue requirement to be 1
recovered from residential service customers? 2
A. The annual revenue requirement to be recovered 3
from residential service customers, which includes Schedules 4
1, 3, 5, and 6, is $650,093,265, as shown on page 5 of Company 5
Witness Mr. Paul Goralski’s Exhibit No. 48, representing a 6
12.25 percent increase. 7
Q. What are the changes the Company is proposing to 8
the current rate design for residential service? 9
A. For the residential service schedules, the 10
Company is proposing to adjust each of the billing components 11
to move closer to its cost of service. This includes a 12
proposal to initially increase the Service Charge from the 13
existing $5.00 per month to $15.00 for all residential 14
schedules. Also, for Schedule 5, the Company is proposing 15
modifications to the definitions of on- and off-peak to better 16
align with the Company’s hours of highest risk as informed by 17
its Integrated Resource Plan (“IRP”) as described in more 18
detail in the Direct Testimony of Company Witness Ms. Connie 19
Aschenbrenner. 20
Q. Where does the Company show a comparison of the 21
present and proposed rates within each of the Company’s 22
service schedules? 23
A. Pages 1-5 of Exhibit No. 53 shows a comparison 24
of the present and proposed rates for each of the residential 25
ANDERSON, DI 5
Idaho Power Company
service schedules, which I will describe later in my 1
testimony. 2
A. Schedule 1, Residential Service Standard Plan 3
Q. Could you please describe the present rate 4
structure under Schedule 1 for residential service? 5
A. Yes. Residential service under Schedule 1 has a 6
present Service Charge of $5.00 per month and seasonal 7
inclining block tiered rates where the price of energy is 8
higher when a customer uses more than a given threshold during 9
a monthly billing period. Table 1 provides a summary of the 10
present base tariff rates under Schedule 1. 11
Table 1 12
Schedule 1 Residential Energy Rates – Present 13
14
Q. How does the Company propose to spread the 15
proposed revenue increase for Schedule 1 to the rates within 16
that schedule? 17
A. The Company proposes to increase the Energy 18
Charges - while slightly decreasing the price differential 19
between the three energy blocks - and increase the Service 20
Charge from $5.00 per month to $15.00 per month. The proposed 21
Energy Charges are summarized below in Table 2. I will discuss 22
Summer Non-Summer
Energy Charge, per kWh
First 800 kWh 8.6518 ¢ 8.0390 ¢
801-2,000 kWh 10.4033 ¢ 8.8627 ¢
All Additional kWh Over 2,000 12.3585 ¢ 9.8154 ¢
ANDERSON, DI 6
Idaho Power Company
the justification and rationale for the increase in the 1
Service Charge later in my testimony. 2
Table 2 3 Schedule 1 Residential Energy Rates – Proposed 4
5
Q. How will the proposal impact a residential 6
customer with average consumption? 7
A. Inclusive of the increase to the Service Charge, 8
the proposed bill changes for a customer on Schedule 1 using 9
an average of 950 kilowatt hours (“kWh”) per month is $12.26 10
per month, or a 12.8 percent change in their electric bill. 11
The present average monthly bill for 950 kWh is $95.73, and 12
that would increase to $107.99. Page 1 of Exhibit No. 54 shows 13
the bill comparison table for the bill change across different 14
average monthly usage levels. The largest increase across the 15
different usage levels shown is a $17.98 per month increase, 16
or a 3.2 percent change in their electric bill, for a customer 17
using 5,000 kWh. 18
Q. Did the Company evaluate the distribution of 19
customer bill impacts for residential customers? 20
A. Yes. Figure 1 shows the distribution of Schedule 21
1 bill impacts reflective of the overall increase in revenue 22
from the residential class of 12.25 percent and a $15.00 23
Summer Non-Summer
Energy Charge, per kWh
First 800 kWh 10.2985 ¢ 9.3050 ¢
801-2,000 kWh 11.7937 ¢ 10.0034 ¢
All Additional kWh Over 2,000 13.9291 ¢ 10.7014 ¢
ANDERSON, DI 7
Idaho Power Company
Service Charge. The median average monthly bill increase in 1
the first year of the transition is $11.38. Based on 2
historical 2022 energy consumption, 89 percent of residential 3
customers would have an average monthly bill increase of $12 4
or less. 5
Figure 1 6 Residential Price Modernization Bill Impact 7
Year 1 vs Current 8
9
Q. Did the Company evaluate the distribution of 10
customer bill impacts for low-income residential customers? 11
A. Yes. The Company prepared some of the same bill 12
impact information, but specific to low-income customers. 13
Because the Company does not track income information for its 14
ANDERSON, DI 8
Idaho Power Company
customers, this impact analysis relied on those customers 1
identified as having received energy assistance through the 2
Low-Income Home Energy Assistance Program (“LIHEAP”) as a 3
proxy for a low-income customer segment. Figure 2 shows the 4
distribution of low-income customer bill impacts reflective of 5
the overall increase in revenue from the residential class of 6
12.25 percent and a $15.00 Service Charge. The median average 7
monthly bill increase in the first year of the transition is 8
$11.09. Approximately 95 percent of the low-income customer 9
segment shown would have an average monthly bill increase of 10
$12 or less as a result of the year one changes requested in 11
this case. 12
// 13
ANDERSON, DI 9
Idaho Power Company
Figure 2 1
Residential Price Modernization Bill Impact – Low Income 2
Year 1 vs. Current 3
4
As shown in Figure 2, these low-income customers are not 5
disproportionately negatively impacted under the Company’s 6
residential rate design proposal. 7
Q. Does the Company propose any other changes to 8
Schedule 1? 9
A. Yes. The Company is proposing additional 10
increases to the Service Charge while commensurately 11
flattening the inclining block structure in 2025 and 2026. I 12
will address this in more detail later in my testimony when 13
describing the Company’s proposed Residential Price 14
ANDERSON, DI 10
Idaho Power Company
Modernization Plan. These additional proposed changes are 1
designed to be revenue neutral relative to rates as proposed 2
for 2024 in this docket. 3
B. Schedule 3, Master-Metered Mobile-Home Park Residential 4 Service 5
Q. Do you propose any rate design changes for 6
Schedule 3? 7
A. No. The only change to Schedule 3 is an increase 8
in the Service Charge from $5.00 to $15.00 per month and a 9
uniform decrease in the Energy Charge to achieve the required 10
revenue for that schedule. The Company’s proposed rate design 11
for Schedule 3 is shown on page 4 of Exhibit No. 53. 12
C. Schedule 5, Residential Service Time-of-Use Plan 13
Q. Could you please describe the present rate 14
structure under Schedule 5 for residential service? 15
A. Yes. Residential service under Schedule 5, 16
currently has an on-peak and off-peak time block in both the 17
summer and non-summer seasons. In the summer, the on-peak 18
block is eight hours long and in the non-summer, the on-peak 19
block is 14 hours long. The off-peak rate is the same for both 20
summer and non-summer seasons. The summer on-peak rate is 21
currently 1.7x higher than the off-peak rate, and the non-22
summer on-peak rate is 1.3x higher than the off-peak rate. 23
Table 3 provides a summary of the present base tariff rates 24
under Schedule 5. 25
// 26
ANDERSON, DI 11
Idaho Power Company
Table 3 1
Schedule 5 Residential Time-of-Use Energy Rates – Present 2
3
Q. How does the Company propose to spread the 4
proposed revenue increase to Schedule 5 rates? 5
A. The Company proposes to shorten the on-peak 6
periods, increase the price differential between on-peak and 7
off-peak Energy Charge time blocks, and increase the Service 8
Charge from $5.00 per month to $15.00 per month, consistent 9
with all other residential service schedules. Table 4 10
summarizes the proposed Energy Charges. 11
Table 4 12 Schedule 5 Residential Time-of-Use Energy Rates – Proposed 13
14
Q. How will the proposal impact a residential time-15
of-use customer with average consumption? 16
A. Inclusive of the increase to the Service Charge, 17
the proposed bill change for a Schedule 5 residential customer 18
using an average of 1,400 kWh per month is $17.59 per month, 19
or a 12.5 percent change in their electric bill. The present 20
bill for 1,400 kWh is $140.25 and would increase to $157.84. 21
Summer Non-Summer
Energy Charge, per kWh
On-Peak 12.8910 ¢ 9.5159 ¢
Off-Peak 7.3899 ¢ 7.3899 ¢
On:Off Differential 1.7x 1.3x
Summer Non-Summer
Energy Charge, per kWh
On-Peak 27.9642 ¢ 13.4745 ¢
Off-Peak 6.9911 ¢ 8.9830 ¢
On:Off Differential 4.0x 1.5x
ANDERSON, DI 12
Idaho Power Company
Page 3 of Exhibit No. 54 shows the bill comparison table for 1
the bill change across different average monthly usage levels. 2
The largest dollar increase across the different usage levels 3
shown is a $37.10 per month increase, or 7.6 percent for a 4
customer using 5,000 kWh per month. 5
This average monthly bill comparison assumes no change 6
in usage. Presumably, a customer will respond to the price 7
signal between the new on- and off-peak time-of-use blocks, 8
resulting in the opportunity to reduce their energy bill. 9
Q. Did the Company evaluate the time-of-use periods 10
for Schedule 5? 11
A. Yes. As I will describe later in my testimony, 12
the Company is proposing changes to the definitions of the 13
time blocks commensurate with increasing the price 14
differential between on- and off-peak. I will describe the 15
proposed changes to the time blocks as part of the Company’s 16
Residential Price Modernization Plan. 17
Q. Are you proposing any other changes to Schedule 18
5? 19
A. Similar to Schedule 1, there are additional 20
revenue neutral rate changes that I will describe in the 21
context of the Residential Price Modernization Plan. 22
// 23
ANDERSON, DI 13
Idaho Power Company
II. RESIDENTIAL PRICE MODERNIZATION PLAN 1
A. Residential Price Modernization Plan Overview 2
Q. What is the Company’s Residential Price 3
Modernization Plan? 4
A. The Company proposes a three-year transition 5
period to modify the structure of its residential rates to 6
include the following: 7
1. Increase the Service Charge for residential service 8
under Schedules 1, 3, 5, and 6 to $35.00 per month and 9
lower Energy Charges commensurately. If the Company 10
files a general rate case during the Residential Price 11
Modernization Plan transition the rates would be updated 12
to reflect any Commission approved rate changes. 13
2. Eliminate inclining block tiered rates for Schedules 1 14
and 6, resulting in Energy Charges that are flat for 15
each season. 16
3. Update the time periods for on- and off-peak periods for 17
Schedule 5 to better reflect the hours of system risk. 18
Q. When does the Company propose these changes 19
occur? 20
A. The first Service Charge increase is included 21
with the proposed revenue increase in this proceeding. The 22
second- and third-year changes would go into effect on January 23
1, 2025, and January 1, 2026, respectively. As I previously 24
ANDERSON, DI 14
Idaho Power Company
described, the Company proposes to update the on- and off-peak 1
periods under Schedule 5 effective January 1, 2024. 2
Q. Does the first year of the Residential Price 3
Modernization Plan include more than just the transitioning? 4
A. Yes. The first year of the Residential Price 5
Modernization Plan also includes the increase in revenue 6
requirement. However, the second and third year of the 7
Residential Price Modernization Plan transition is revenue 8
neutral relative to the first year and does not increase the 9
Company’s Commission-approved revenue requirement as proposed 10
in this docket. 11
B. Fixed Service Charge 12
Q. What is the Service Charge? 13
A. The Service Charge is a flat fixed amount that a 14
customer pays every month irrespective of usage. 15
Q. How much is the Service Charge for residential 16
service? 17
A. For residential service, the Service Charge is 18
presently $5.00 per month. 19
Q. What proportion of a residential customer’s cost 20
of service is related to fixed costs? 21
A. On average, the cost of service for a 22
residential customer is $105.84 per month, and $29.52 or about 23
28 percent of this value is energy related. The remaining 24
$76.32 or about 72 percent is fixed and not energy related. 25
ANDERSON, DI 15
Idaho Power Company
Q. What proportion of revenues from residential 1
customers is recovered through the fixed Service Charge? 2
A. For Schedule 1, only about five percent of 3
revenue is collected through the Service Charge. For Schedule 4
5, only about three percent of revenue is collected through 5
the Service Charge. 6
Q. What Service Charge does the Company propose for 7
the end of the three-year transition? 8
A. The Company proposes the Service Charge be set 9
at $35.00 for all residential service schedules. 10
Q. Why is the Company proposing the same Service 11
Charge for both Schedule 1 and Schedule 5? 12
A. Schedule 5 is an optional rate schedule that 13
residential customers can choose to take service under. The 14
Company would like residential customers to opt-in to time-of-15
use residential service because they want the opportunity to 16
save money by shifting usage to off-peak periods – not because 17
a Service Charge benefits them under a particular residential 18
service offering. Therefore, having the same Service Charge 19
for both Schedule 1 and Schedule 5 would prevent customers 20
from choosing one schedule or the other based upon the dynamic 21
between the fixed and volumetric charges. 22
Q. How does $35.00 per month compare to the fixed 23
service or customer charge for other electric utilities in 24
Idaho? 25
ANDERSON, DI 16
Idaho Power Company
A. At $35.00 per month, the Company’s residential 1
Service Charge would be within the range of the fixed monthly 2
rates that other Idaho electric utilities charge for 3
residential customers. Table 5 below shows the fixed monthly 4
residential charges for all Idaho electric utilities with more 5
than 1,000 customers. 6
Table 5 7
Fixed Monthly Residential Charges for Idaho Electric Utilities 8 with More Than 1,000 Customers 9
10
Avista and Rocky Mountain Power have proposed similar changes 11
to their fixed residential charges in current dockets. If both 12
were approved as filed, the final year of their respective 13
Utility Price
Avista 7.00$
City of Idaho Falls 20.00
Fall River Rural Electric Cooperative 39.00
Inland Power & Light Company 26.55
Kootenai Electric Cooperative 32.50
Lower Valley Energy 16.00
Northern Lights 30.00
Raft Rural Electric Cooperative 22.50
Rocky Mountain Power 8.00
Salmon River Electric Cooperative 43.00
United Electric Cooperative 22.00
Average 24.23$
Note: All fixed monthly charges available from each
utility's website as of May 22, 2023.
ANDERSON, DI 17
Idaho Power Company
transition periods would increase the average fixed monthly 1
residential charge in Table 5 from $24.23 to $28.32.1 2
C. Tiered Energy Charges 3
Q. How do the Company’s current tiered energy 4
charges work for Schedule 1? 5
A. Schedule 1 customers are subject to seasonal 6
inclining block tiered rates where the price of energy is 7
higher when a customer uses more than a given threshold during 8
a monthly billing period. Additionally, energy charges vary in 9
price by season, with higher energy pricing in the summer 10
season of June through August and lower pricing in the non-11
summer season of September through May. 12
D. Time-of-Use 13
Q. What are the current time-of-use periods for 14
Schedule 5 and what changes does the Company propose? 15
A. Currently, the on-peak period for Schedule 5 is 16
weekdays from 1 p.m. to 9 p.m. during summer months and from 7 17
a.m. to 9 p.m. during non-summer months excluding holidays. 18
The off-peak period is during all other hours. The summer 19
season is defined as June through August and the non-summer 20
season is defined as September through May. 21

1 In the Matter of the Application of Avista Corporation for the Authority
to Increase its Rates and Charges for Electric Natural Gas Customers in
the State of Idaho, Case Nos. AVU-E-23-01 and AVU-G-23-01, Miller Direct at 27(proposing Schedule 1 basic charge increasing from $7 to $35 over 5 years). In the Matter of the Application of Rocky Mountain Power for
Authority to Implement the Residential Rate Modernization Plan, Case No. PAC-E-22-15, Meredith Direct at 2-3 (proposing basic charge increasing from $9 to $29.25 over 5 years).
ANDERSON, DI 18
Idaho Power Company
As described in the Direct Testimony of Ms. 1
Aschenbrenner, the Company is proposing the time-of-use 2
definitions for applicable rate classes be updated to better 3
align with hours of highest risk as informed by Idaho Power’s 4
IRP. Specifically for Schedule 5, the on-peak period proposed 5
is Monday to Saturday from 7 p.m. to 11 p.m. during the summer 6
months. During the non-summer months the on-peak period would 7
be Monday to Saturday from 7 a.m. to 9 a.m. and 6 p.m. to 9 8
p.m. 9
The Company is also proposing to modify the summer 10
season for all rate classes to June through September, which 11
is described in more detail in the Direct Testimony of Ms. 12
Aschenbrenner. 13
Q. What are the current price differentials between 14
on- and off-peak? 15
A. The current summer on-peak rate is 12.8910 cents 16
per kWh and the off-peak rate is 7.3899 cents per kWh, 17
resulting in a 1.7x differential between on- and off-peak. The 18
current non-summer on-peak rate is 9.5159 cents per kWh, 19
resulting in a 1.3x differential between on- and off-peak. 20
Q. What price differentials is the Company 21
proposing in its Residential Price Modernization Plan? 22
A. The Company is proposing an on-peak to off-peak 23
price ratio of 4.0x for the summer and 1.5x for the non-24
summer. 25
ANDERSON, DI 19
Idaho Power Company
Q. How did the Company develop its recommended 1
pricing structure for residential time-of-use? 2
A. Ms. Aschenbrenner directed me to develop an 3
offering in a manner that would be most effective at promoting 4
a response to the price signal. From evaluating industry 5
trends I found a common theme: as the price ratio increases, 6
customers shift usage in greater amounts, but at a declining 7
rate. A database of customer response to time-varying rates 8
conducted by Brattle2 shows a relationship between price 9
response and price ratio where a 4.0x peak to off-peak price 10
ratio could provide a peak impact of approximately 10 percent. 11
For the non-summer season, the Company selected a 1.5 12
differential to only moderately increase the existing 13
differential to send a price signal to customers during the 14
more narrowly defined hours of highest system risk during the 15
non-summer season. I believe this design will elicit customer 16
adoption, incentivize customers to shift load outside of the 17
highest risk hours, and provide customers an opportunity to 18
reduce their electric bills. 19
E. Rate Design Calculations 20
Q. What prices does the Company propose for the 21
three-year Residential Price Modernization Plan? 22

2 The Brattle Group, Arcturus 2.0: A Meta-analysis of Time-varying Rates
for Electricity, The Electricity Journal, vol. 30, issue 10 (Dec. 2017).
ANDERSON, DI 20
Idaho Power Company
A. Exhibit No. 55 shows the proposed prices, 1
billing determinants, and anticipated revenue for the 2
Residential Price Modernization Plan. It is important to note, 3
the anticipated residential revenue for each year of the 4
transition does not increase in years two or three of the 5
plan. Rather, in each successive year of the transition 6
period, the revenue from the Service Charge increases and 7
revenue from the Energy Charge decreases commensurately, which 8
ensures a revenue neutral proposal. Additionally, for 9
Schedules 1 and 6, the differences between the three energy 10
blocks are eliminated by the final transition year. Table 6 11
summarizes the proposed prices for Schedules 1 and 6 for each 12
year of the transition. 13
Table 6 14
Proposed Schedule 1 and 6 Prices by Transition Year 15
16
// 17
Transition Year
Description Current Year 1 Year 2 Year 3
Service Charge 5.00$ 15.00$ 25.00$ 35.00$
Summer Energy Charges
First 800 kWh 8.6518 ¢ 10.2985 ¢ 9.5182 ¢ 8.7379 ¢
801-2,000 kWh 10.4033 ¢ 11.7937 ¢ 10.2658 ¢ 8.7379 ¢
All Additional kWh 12.3585 ¢ 13.9291 ¢ 11.5634 ¢ 8.7379 ¢
Non-Summer Energy Charges
First 800 kWh 8.0390 ¢ 9.3050 ¢ 8.3859 ¢ 7.4669 ¢
801-2,000 kWh 8.8627 ¢ 10.0034 ¢ 8.7351 ¢ 7.4669 ¢
All Additional kWh 9.8154 ¢ 10.7014 ¢ 9.0306 ¢ 7.4669 ¢
ANDERSON, DI 21
Idaho Power Company
Table 7 summarizes the proposed prices for Schedule 5 1
for each year of the transition. 2
Table 7 3 Proposed Schedule 5 Prices by Transition Year 4
5
Q. How were prices for the three-year Residential 6
Price Modernization transition determined? 7
A. The $35.00 Service Charge was determined by 8
taking residential revenue from Schedules 1, 3, and 5, and 9
multiplying by the proportion of cost of service related to 10
all other fixed costs besides generation and transmission 11
costs and dividing by the number of monthly billings. The 12
resulting $36.09 was rounded down to $35.00. To determine 13
prices for the transition, the Service Charge was increased by 14
one-third of the difference between the present $5.00 Service 15
Charge and $35.00 in each year of the transition. 16
Flat seasonal Energy Charges in the final year of the 17
transition were determined by applying the seasonal 18
differential and solving for the remaining revenue required 19
Transition Year
Description Current Year 1 Year 2 Year 3
Service Charge 5.00$ 15.00$ 25.00$ 35.00$
Summer Energy Charges
On-Peak 12.8910 ¢ 27.9642 ¢ 26.0477 ¢ 24.1307 ¢
Off-Peak 7.3899 ¢ 6.9911 ¢ 6.5119 ¢ 6.0327 ¢
On:Off Differential 1.7x 4.0x 4.0x 4.0x
Non-Summer Energy Charges
On-Peak 9.5159 ¢ 13.4745 ¢ 12.5509 ¢ 11.6273 ¢
Off-Peak 7.3899 ¢ 8.9830 ¢ 8.3672 ¢ 7.7515 ¢
On:Off Differential 1.3x 1.5x 1.5x 1.5x
ANDERSON, DI 22
Idaho Power Company
for the class after removing the proposed Service Charge 1
revenue. Prices for each transition year were determined by 2
decreasing the Energy Charge by one-third of the difference 3
between the present and final transition year price in each 4
subsequent period. 5
To determine the proposed Schedule 5 Energy Charges, 6
the final transition year on- and off-peak Energy Charges were 7
set to reflect a 4:1 differential while also reflecting the 8
increase in recovery from the higher Service Charge. 9
Q. Why is the Company proposing to modify the on- 10
and off-peak price differential? 11
A. The proposal is intended to send a more 12
meaningful price signal to customers to shift energy usage to 13
off-peak hours. Providing this price signal in conjunction 14
with the shorter window of time for the on-peak period 15
furthers two distinct objectives: (1) incenting customers to 16
shift usage from highest risk hours, and (2) creating an 17
opportunity for customers to reduce bills. 18
F. Customer Bill Impacts 19
Q. How would the Company’s proposed rate increase 20
and the Residential Price Modernization Plan impact customers 21
at different usage levels? 22
A. Page 1 of Exhibit No. 54 shows a bill comparison 23
table for the bill impact of the first year of the transition 24
for Schedule 1 customers across different usage levels and 25
ANDERSON, DI 23
Idaho Power Company
page 2 shows the same for the change from the first year to 1
the final year of the transition. The largest change shown 2
over the transition is for a customer using 150 kWh, which 3
would see a $10.38 per month increase in the first year. The 4
increase for a customer using 150 kWh for the entire 5
transition period is $27.76 per month. The difference between 6
these values demonstrates the need to make the changes in 7
price over the requested three-year period to moderate 8
customer impacts. Pages 3 and 4 of Exhibit No. 54 shows the 9
same information, except for the proposed transition for 10
Schedule 5. 11
Q. Did the Company evaluate the distribution of 12
customer bill impacts for the full transition of the 13
Residential Price Modernization Plan? 14
A. Yes. Figure 3 shows the distribution for the 15
final year of the transition period for Schedule 1 customers, 16
as compared to the first year. The changes implemented in 17
years two and three will be revenue neutral and the median 18
average monthly bill increase in the final year of the 19
transition, compared to the first year, is $3.06. Based on 20
historical 2022 energy consumption, 86 percent of residential 21
customers would have an average monthly bill increase of $12 22
or less between year one and year three of the plan. 23
// 24
ANDERSON, DI 24
Idaho Power Company
Figure 3 1
Residential Price Modernization Bill Impact 2
Final Year of Transition vs. Year 1 3
4
Q. Did the Company similarly evaluate the 5
distribution of low-income customer bill impacts for the full 6
transition of the Residential Price Modernization Plan? 7
A. Yes. Figure 4 shows the distribution for the 8
final year of the transition for the low-income customer 9
segment, compared to other residential customers. The median 10
average monthly bill change in the final year of the 11
transition, compared to the first year, is a $0.68 decrease 12
and 90 percent of the low-income residential customer segment 13
would have an average monthly bill increase of $12 or less. 14
ANDERSON, DI 25
Idaho Power Company
Figure 4 1
Residential Price Modernization Bill Impact – Low Income 2
Final Year of Transition vs. Year 1 3
4
As shown in Figure 4, these low-income customers are not 5
disproportionately negatively impacted under the Company’s 6
Residential Price Modernization Plan. 7
III. ON-SITE GENERATION RATE DESIGN 8
Q. What are the Company’s on-site generation 9
service schedules? 10
A. Idaho Power has three on-site generation service 11
schedules; however, only Schedules 6 and 8 are separate 12
customer classes with their own rate design and cost 13
allocation. The third on-site generation service is under 14
ANDERSON, DI 26
Idaho Power Company
Schedule 84, Customer Energy Production Net Metering Service 1
(“Schedule 84”), where customers take their retail electric 2
service under the applicable standard service schedule (e.g., 3
Schedules 9, 19, or 24). For purposes of rate design 4
discussion, on-site generation rate design for these customer 5
classes is addressed under the applicable standard service 6
schedule. 7
Q. What is the revenue requirement to be recovered 8
from Schedules 6 and 8? 9
A. The annual revenue target to be recovered from 10
Schedules 6 and 8 is $14,723,344 and $55,219, as shown on page 11
3 and 6 of Exhibit No. 53. As noted in the Direct Testimony of 12
Ms. Aschenbrenner, the Class Cost-of-Service (“CCOS”) study 13
allocated costs to Schedules 6 and 8 are higher than revenue 14
collection under rates that mirror the Service Charge and 15
Energy Charges for the respective standard service under 16
Schedules 1 and 7. 17
Q. What is the current rate design structure for 18
on-site generation service under Schedules 6 and 8? 19
A. Schedules 6 and 8 rate design currently mirrors 20
the structure and rates for residential and small general 21
customers without on-site generation on Schedules 1 and 7, 22
respectively. Both rate structures currently have a $5.00 23
Service Charge and an inclining block Energy Charge. 24
ANDERSON, DI 27
Idaho Power Company
Q. Please summarize the Company’s proposed rate 1
design changes for Schedules 6 and 8. 2
A. For Schedule 6, the Company is proposing in this 3
case to retain the linkage with rates under Schedule 1. In 4
addition, customers taking service under Schedule 6 will also 5
have the option to elect to take time-of-use rates which would 6
retain a linkage with rates under Schedule 5. All Schedule 6 7
rates, under the standard or time-of-use option would follow 8
the Service Charge transition under the Company’s Residential 9
Price Modernization Plan. 10
For Schedule 8, the Company is proposing in this case 11
to retain the linkage with rates under Schedule 7. As 12
described in the Direct Testimony of Company Witness Mr. Zack 13
Thompson, the Company is proposing an increase in the Schedule 14
7 Service Charge from $5.00 to $20.00 per month. 15
Q. Why is Idaho Power requesting to maintain the 16
relationship with the respective applicable retail service 17
schedules? 18
A. The Company acknowledges that its proposal for 19
these on-site generation schedules does not address that, as 20
informed by the CCOS, the cost to serve these customers is 21
higher than standard service. However, similar to the 22
rationale for suggesting a three-year transition for the 23
Residential Price Modernization Plan, the Company is proposing 24
ANDERSON, DI 28
Idaho Power Company
that residential rates be modified with gradualism in mind to 1
moderate bill impacts on individual customers. 2
After the final year of the three-year transition, the 3
Company will explore whether circumstances warrant further 4
rate design modifications for on-site generation customer 5
classes. For example, if all costs related to the distribution 6
system and customer service were collected through the Service 7
Charge for Schedule 6, the Service Charge would equate to 8
approximately $50 per month. The Company suggests evaluating 9
further movement towards the cost to serve in a future case 10
after or near the end of the transition period for the 11
Company’s Residential Price Modernization Plan. 12
Q. Have you prepared an exhibit that illustrates 13
the rate design proposal for revenue recovery of Schedules 6 14
and 8? 15
A. Yes. Exhibit No. 53 shows the proposed prices, 16
billing determinants, and anticipated revenue for Schedules 6 17
and 8. These rates align with the proposed rates for Schedules 18
1 and 7, respectively. 19
Q. Have you prepared an exhibit that shows the 20
billing impact of this rate design proposal on customers 21
receiving service under Schedules 6 and 8? 22
A. Yes. Exhibit No. 54 shows bill comparisons for 23
the proposed transition period for rates under Schedules 1 and 24
5, which would be applicable to customers taking service under 25
ANDERSON, DI 29
Idaho Power Company
Schedule 6. Pages 1 and 3 of Exhibit No. 54 shows a bill 1
comparison for the first year of the transition for customers 2
across different usage levels. 3
Additionally, Exhibit No. 56 shows a comparison for 4
non-legacy Schedule 6 and 8 customers with 12 months of 5
billing data in 2022 under the existing and proposed rates. 6
The average monthly increase shown for Schedule 6 non-legacy 7
customers is an 18 percent increase and for Schedule 8 is a 43 8
percent decrease. 9
IV. LARGE GENERAL SERVICE – SCHEDULE 9 (PRIMARY/TRANSMISSION) 10
Q. What is the revenue requirement for Schedule 9 11
customers taking service at the Primary and Transmission 12
levels? 13
A. The annual revenue requirement for Schedule 9 14
Primary and Transmission level customers as shown on page 5 of 15
Mr. Goralski’s Exhibit No. 48 is $43,557,610. 16
Q. What is the current rate structure for Schedule 17
9 Primary and Transmission Service? 18
A. All customers taking service under Schedule 9 19
Primary or Transmission Service pay seasonal time-of use 20
Energy Charges, seasonal Demand Charges, a summer On-Peak 21
Demand Charge, a Basic Charge, and a Service Charge. Customers 22
may also pay a Facilities Charge for Company-owned facilities 23
installed beyond Idaho Power’s Point of Delivery. 24
ANDERSON, DI 30
Idaho Power Company
Q. Have you prepared an exhibit that illustrates 1
the rate design proposal for Primary and Transmission Service 2
under Schedule 9? 3
A. Yes. The rate design proposal for Schedule 9 4
Primary and Transmission Service is located on pages 7 and 8 5
of Exhibit No. 53 and targets the revenue shown on page 5 of 6
Mr. Goralski’s Exhibit No. 48. For all rate components, the 7
Company is proposing rates that represent a uniform 30 percent 8
movement towards the costs to serve that rate component, and 9
the Energy Charges are informed by the marginal price of 10
energy for each time-of-use period. The costs to serve each 11
rate component are indicated on page 6 of Mr. Goralski’s 12
Exhibit No. 43. 13
Q. What other changes is the Company proposing for 14
Schedule 9 Primary and Transmission Service rate design? 15
A. In addition to the incremental movement towards 16
the costs to serve each of the rate components, the Company is 17
proposing to change the definition of the time-of-use periods. 18
Q. What definition for on/mid/off-peak does the 19
Company propose for Schedule 9? 20
A. The Company proposes to change the definition of 21
the TOU periods for the summer season as follows: 22
• On-Peak: 7:00 p.m. to 11:00 p.m. Monday through 23
Saturday, except holidays 24
ANDERSON, DI 31
Idaho Power Company
• Mid-Peak: 3:00 p.m. to 7:00 p.m. and 11:00 p.m. 1
to 12:00 a.m. Monday through Saturday, except 2
holidays 3
• Off-Peak: 12:00 a.m. to 3:00 p.m. Monday through 4
Saturday and all hours on Sunday and holidays. 5
For the non-summer season, the Company proposes to change the 6
definition of the time-of-use periods to the following: 7
• On-Peak: 6:00 a.m. to 9:00 a.m. and 5:00 p.m. to 8
8:00 p.m. Monday through Saturday, except 9
holidays 10
• Mid-Peak: 9:00 a.m. to 12:00 p.m., 4:00 p.m. to 11
5:00 p.m., and 8:00 p.m. to 10:00 p.m. Monday 12
through Saturday, except holidays 13
• Off-Peak: 10:00 p.m. to 6:00 a.m. and 12:00 p.m. 14
to 4:00 p.m. Monday through Saturday and all 15
hours on Sunday and holidays 16
Q. Why is the Company proposing to modify the 17
definition of time-of-use hours? 18
A. Similar to the change in the definition of hours 19
for residential time-of-use, the proposal better aligns these 20
definitions with hours of highest risk on the Company’s 21
system. Aligning these hours with highest risk is consistent 22
with the evaluation performed in the development of the 23
Company’s 2023 IRP. 24
ANDERSON, DI 32
Idaho Power Company
Q. Have you prepared an exhibit that shows the 1
billing impact of this rate design proposal on customers 2
receiving Primary Service under Schedule 9? 3
A. Yes, page 5 of Exhibit No. 54 shows the billing 4
comparisons between the existing rates and proposed rates for 5
Schedule 9 Primary Service. 6
V. LARGE POWER SERVICE, SCHEDULE 19 7
Q. What is the revenue requirement to be recovered 8
from Large Power Service customers taking service under 9
Schedule 19? 10
A. The annual revenue requirement for Schedule 19 11
customers as shown on page 5 of Mr. Goralski’s Exhibit No. 48 12
is $164,068,656, representing a 6.61 percent increase. 13
Q. What is the current rate structure for customers 14
taking service on Schedule 19? 15
A. Service under Schedule 19, similar to service 16
under Schedule 9, is provided at Secondary, Primary, and 17
Transmission Service levels. All customers taking service 18
under Schedule 19 pay seasonal time-of-use Energy Charges, 19
seasonal Demand Charges, a summer On-Peak Demand Charge, a 20
Basic Charge, and a Service Charge. Customers taking Primary 21
or Transmission Service may also pay a Facilities Charge for 22
Company-owned facilities installed beyond Idaho Power’s Point 23
of Delivery. In addition, Schedule 19 includes a 1,000 24
ANDERSON, DI 33
Idaho Power Company
kilowatts per month minimum Billing Demand and Basic Load 1
Capacity. 2
Q. Have you prepared an exhibit that illustrates 3
the proposed rate design to recover the annual revenue 4
requirement for Schedule 19? 5
A. Yes. The rate design proposal for Schedule 19 is 6
shown on pages 9-11 of Exhibit No. 53 and targets the proposed 7
class revenue increase. For all rate components, the Company 8
is proposing rates that represent a uniform 30 percent 9
movement towards the costs to serve that rate component, and 10
the Energy Charges are informed by the marginal price of 11
energy for each time-of-use period. The costs to serve each 12
rate component are indicated on page 7 of Mr. Goralski’s 13
Exhibit No. 43. 14
Q. What definition for on/mid/off-peak does the 15
Company propose for Schedule 19? 16
A. The Company proposes the same definition for 17
on/mid/off-peak as described for Schedule 9. 18
Q. Have you prepared an exhibit that shows the 19
billing comparisons between the existing rates and the 20
proposed rates for Schedule 19 Primary Service customers? 21
A. Page 6 of Exhibit No. 54 shows the billing 22
comparisons between the existing rates and the proposed rates 23
for Schedule 19 Primary Service customers. The higher load 24
ANDERSON, DI 34
Idaho Power Company
factor customers will see a lower overall increase as compared 1
to low load factor customers. 2
VI. UPDATES TO SCHEDULE 68 3
Q. What other changes are addressed in your direct 4
testimony? 5
A. In addition to the rate design proposals 6
described herein, I will address the proposed revisions to 7
Schedule 68. Attachment to the Application Nos. 1 and 2 show 8
the revisions in clean and legislative format, respectively, 9
for each of the respective tariff schedules. 10
Q. What is Schedule 68? 11
A. Schedule 68 is Idaho Power’s tariff schedule 12
that applies to the construction, operation, and maintenance 13
of all interconnections to customer Distributed Energy 14
Resources (“DER” or “DERs”) interconnected in parallel – 15
meaning operating and receiving voltage from Idaho Power’s 16
system. 17
Q. What changes is the Company proposing to 18
Schedule 68? 19
A. The Company has proposed an update to the return 20
trip charge and a modification to the applicability section 21
regarding regenerative drives. Additionally, the Company has 22
proposed several miscellaneous revisions to improve the 23
administration of the interconnection process. Pages 68-1 to 24
ANDERSON, DI 35
Idaho Power Company
68-13 in Attachment Nos. 1 and 2 show these administrative 1
improvements. 2
Q. What is the return trip charge? 3
A. A return trip charge is billed to the customer 4
each time Company personnel are dispatched to the job site but 5
are unable to conduct the on-site inspection due to one or 6
more conditions not being met that had been certified as 7
complete by the customer or installer on the System 8
Verification Form. 9
Q. Why is the Company updating the return trip 10
charge? 11
A. The return trip charge of $61.00 was last 12
updated in 2020 based on meter technician miles driven, number 13
of inspections, vehicle rates, and labor rates. The updated 14
return trip charge calculation includes the miles and number 15
of inspections for the years 2020 through 2022 and updates the 16
Company’s vehicle and labor rates for 2023. 17
Q. What is the change in the return trip charge? 18
A. The updated calculations result in a decrease to 19
the return trip charge in Schedule 68 from $61.00 to $52.00. 20
The change in the return trip charge is primarily driven by a 21
reduction in the average miles per inspection and efficiency 22
gains in time per inspection. 23
Q. What is a regenerative drive? 24
ANDERSON, DI 36
Idaho Power Company
A. A regenerative drive allows electrical energy 1
generated by a motor under braking conditions to be used 2
again, or regenerated, rather than being completely lost to 3
heat. Applications that involve frequent starts and stops, 4
constant deceleration, or overhauling loads are candidates for 5
this use case. Examples include elevators, downhill conveyers, 6
and flywheels. The period of time during which regeneration 7
routes electricity back to the utility is small, based on the 8
limited amount of energy available from the driven load. 9
Q. Why does the Company believe a revision to 10
Schedule 68 is needed for regenerative drives? 11
A. Regenerative drives provide a source of electric 12
power independent from the bulk power system and is considered 13
a Distributed Energy Resource (“DER”) connected in parallel 14
with the Company’s system and pursuant to Schedule 68 is 15
subject to the smart inverter requirements therein. 16
As described to me, regenerative drives do not 17
typically raise the same concerns as other DERs with respect 18
to grid stability and reliability that are addressed with 19
smart inverters. For example, regenerative drives operate 20
infrequently and only for a few seconds at a time. These short 21
operations are not long enough to expect a change in reactive 22
power output to meet the voltage/reactive power capability 23
threshold for smart inverters. In addition, regenerative 24
drives cannot function with the loss of utility source – if 25
ANDERSON, DI 37
Idaho Power Company
the grid loses power the drive will automatically also be de-1
energized and won’t be able to begin regenerating or continue 2
regenerating, which effectively eliminates the risk of that it 3
will contribute to an island condition and obviates the need 4
for anti-islanding protection. 5
Q. What changes does the Company propose to 6
accommodate the installation of regenerative drives? 7
A. To account for installations that are within the 8
scope of Schedule 68 but do not implicate the same challenges 9
that smart inverters are intended to address, the Company 10
proposes to amend the Applicability section to address other 11
technologies that use similar methods to generate electricity 12
in parallel with the Company's system, including but not 13
limited to regenerative drives used in elevators and other 14
energy recapture systems. 15
Specifically, the Company proposes to evaluate the 16
following criteria to determine whether a regenerative drive 17
or other energy recapture system can be interconnected outside 18
of the IEEE 1547 requirements: (1) magnitude of exports; (2) 19
duration of the exports; and (3) ability of DER to operate 20
during the loss of the utility source. 21
Q. Does this conclude your direct testimony in this 22
case? 23
A. Yes, it does. 24
// 25
ANDERSON, DI 38
Idaho Power Company
DECLARATION OF GRANT T. ANDERSON 1
I, Grant T. Anderson, declare under penalty of 2
perjury under the laws of the state of Idaho: 3
1. My name is Grant T. Anderson. I am employed 4
by Idaho Power Company as a Regulatory Consultant in the 5
Regulatory Affairs Department. 6
2. On behalf of Idaho Power, I present this 7
pre-filed direct testimony and Exhibit Nos. 53 through 56 in 8
this matter. 9
3. To the best of my knowledge, my pre-filed 10
direct testimony and exhibits are true and accurate. 11
I hereby declare that the above statement is true to 12
the best of my knowledge and belief, and that I understand 13
it is made for use as evidence before the Idaho Public 14
Utilities Commission and is subject to penalty for perjury. 15
SIGNED this 1st day of June 2023, at Boise, Idaho. 16
17
Signed: _________________________ 18 GRANT T. ANDERSON 19
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