20231102Reply Comments of the Commission Staff.pdf

CHRIS BURDIN Ù
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION L
PO BOX 83720
BOISE,IDAHO 83720-0074 SSION
[phone]
IDAHO BAR NO.9810
Street Address for Express Mail:
11331 W CHINDEN BLVD,BLDG 8,SUITE 201-A
BOISE,ID 83714
Attorneyfor the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )COMPANY'S APPLICATION FOR )CASE NO.IPC-E-23-14
AUTHORITY TO IMPLEMENT CHANGES )TO THE COMPENSATION STRUCTURE )APPLICABLE TO CUSTOMER ON-SITE )REPLY COMMENTS OF THE
GENERATION UNDER SCHEDULES 6,8,)COMMISSION STAFF
AND 84 AND TO ESTABLISH AN EXPORT )
CREDIT RATE
COMMISSION STAFF ("STAFF")OF the Idaho Public Utilities Commission,by and
through its Attorneyof record,Chris Burdin,Deputy Attorney General,submits the following
comments.
BACKGROUND
On May 1,2023,the Company filed an application ("Application")with the Commission
proposing changes to the Company's on-site and self-generation tariffs pursuant to Commission
direction in Order No.35631.
On October 12,2023,Commission Staff ("Staff"),and five of the seven Intervenors
submitted comments ("Initial Comments")regarding the Export Credit Rate ("ECR")filing.
These Reply Comments respond to some items in the Initial Comments.
REPLY COMMENTS OF COMMISSION STAFF 1 NOVEMBER 2,2023
As of October 27,2023,393 public comments have been filed in this case,a 60%
increase from the 237 public comments noted in previouslyfiled comments,but not recorded
until after Staff comments had been filed.Of the 393 customers who offered comments,135
customers (34%')identified as non-legacy customers,while only 18 (5%)clearly identified
themselves as legacy customers.There were another 114 customers (29%)who have a net-
generation system but did not identify their status,whether legacy or non-legacy or interested in
self-generation.
Order No.35955 established two Customer Hearing's and set the Customer Comment
deadline.Customers must submit public written comments by November 8,2023.The first
Public Customer Hearing was held on Tuesday October 24,2023,in Boise,Idaho and the second
is scheduled for Wednesday November 8,2023,in Twin Falls,Idaho.On October 24,157
people attended the Customer Hearing,in-person and virtually.37 people testified at the Boise
hearing,including8 students.
STAFF REVIEW
Staff s Initial Comments,filed October 12,2023,addressed the Company's proposals,
provided recommendations for an alternative ECR,and addressed the feedback received from the
public at the public workshops and from the comments filed with the Commission.With these
Reply Comments,Staffaddresses portions of the Parties'Initial Comments and provides one
additional recommendation.The absence of a comment on any topic does not imply agreement
or disagreement and that Staff's Initial Comments should be viewed in their entirety.
General Rate Case Crossover
In its Initial Comments,Vote Solar,ICL,and Boise City note various concerns and
recommendations related to the Company's General Rate Case ("GRC"),Case No.IPC-E-23-11.
ICL raises a concern that the concurrent filings have confused customers,complicated analysis,
and notes that the details of a settlement in principle reached in the GRC have not been drafted or
approved and remain confidential.However,ICL also notes that the proposals of the ECR filing
considered matters of on-site generationexports and are distinct from those in the GRC.ICL
Initial Comments at 2.Boise City asks that the Commission recognize the interrelated nature of
Percentages are in reference to the total number of customers fromthe most recent comment count.
REPLY COMMENTS OF COMMISSION STAFF 2 NOVEMBER 2,2023
the Company's filings,believing the GRC will inform the decision of this filing.Boise City
Initial Comments at 2.Finally,Vote Solar recommends that the Commission delay the final
order of this filing until the GRC has concluded.Vote Solar Initial Comments at 3.
Staff disagrees with the concerns and recommendations above and believes that the
filings should be considered independently and recommends that the Commission not delay its
decision on this filing.The intent of this filing is to determine a fair compensation rate for
certain customers'exports while the intent of the GRC is to determine fair rates for providing
electric service to all customer classes.While volumetric rates,demand rates,and customer
service charges may change because of the GRC,the outcome of the GRC will not change the
rate ultimatelydetermined for the ECR.The structure of the ECR,how it is updated,and the
value of the ECR are separate and have a different basis from the rates established in a GRC and
would not change with the GRC's final order.Therefore,Staff believes it is appropriate to
evaluate these two cases independently but concurrently.
Multiple ECRs Based on ExportShape
In its Initial Comments,IIPA states that irrigators and non-irrigators have substantially
different annual export shapes and recommends a separately calculated ECR for irrigators.IIPA
then provides analysis suggesting that irrigators should receive an on-peakrate of 9.847
cents/kW and an off-peak rate of 5.449 cents/kW while other classes should receive an on-peak
rate of 8.051 cents/kW and an off-peak rate of 4.654 cents/kW.Staff disagrees with the IIPA's
proposal.
First,Staff believes that the logic of a separate ECR for each unique export shape will
lead to multipleECRs for each rate class and for each exporting technology type.Multiple
ECR's would reduce transparency,increase confusion,and could lead to dissatisfaction among
customers.Finally,the intent of Schedules 6,8,and 84 is to provide customers the opportunity
to offset their energy usage.If irrigation customers want to receive compensation based on their
export shape,they can apply as a Qualifying Facility2 ("QF")to use Integrated Resource Plan
2 In order to use their individualgeneration shapes,facility size must be greater than 100 kw.Customers connected
under the existing project eligibility cap of 100 kW wouldneed to expand their system by investing in additional
generation.Customers connected under the proposed cap may be able to exceed 100 kw by buildingto 100%of
demand.
REPLY COMMENTS OF COMMISSION STAFF 3 NOVEMBER 2,2023
("IRP")-based avoided cost rates.Staff recommends that the Commission not adopt the IIPA's
request to establish a separate ECR for irrigators.
Avoided Cost Valuation
Remove Capacity Value from the Energy Imbalance Market ("EIM")Energy Pricing
IIPA recommends removing capacity value from the energy credit because IIPA believes
that market prices used to value the avoided cost of energy have both a capacity and energy
component when capacity is constrained and to avoid double counting capacity value,they
recommend re-pricing the on-peak energy credit to equal the off-peak credit.IIPA Initial
Comments at 7 and 8.
CEO states that,"Even during high-load hours,short-term market prices (like those in the
EIM)are not reflective of a 'capacity'value."CEO Initial Comments at 4.
Staff agrees with CEO that the EIM accurately reflects the value of energy each hour and
disagrees with IIPA's assertion that EIM pricing contains a component of capacity-related value.
The EIM is a sub-hourlymarket designed to allow market participants to balance supply and
demand fluctuations using resources across a broader regional footprintto optimize energy cost.
The EIM is designed to optimize participants'energy cost and is not designed to provide
capacity because participants are required to enter each hour with enough capacity to meet their
own load and should not rely on the imbalancemarket for capacity shortfalls.
Remove Distribution-Related Capacity Value from the ECR
IIPA recommends that the "transmission and distribution credit should only apply to
schedules with no transmission or distribution revenue requirement included in the energy
charge."IIPA Initial Comments at 11.IIPA bases its recommendation in part because "[t]he
calculation of this [T&D]credit assumes that 100 percent of solar generation is exported."Id.
Staff believes this assertion is contrary to the Company's stated calculation method where it
states that it uses the hourly profile of customer exports-whichis the generation of customer's
Distributed Energy Resources net of any consumption.VODER Study at 69.Staff does not
agree the Company's method assumes that 100 percent of the customer's generationis exported
as stated by IIPA.
IIPA also stated,"...the customer will receive double compensation for reduced
distribution costs,once directlythroughthe capacity component of the export credit,and again
REPLY COMMENTS OF COMMISSION STAFF 4 NOVEMBER 2,2023
by avoiding these costs through avoiding energy charges with self-consumed energy."Id.This
assertion mistakenly equates the sources of value for self-consumed energy and for exports.
Each kWh that a customer self-consumes rightfullyavoids all the costs imbedded in a retail kWh.
Each kWh that a customer exports may help to avoid T&D investment and is therefore eligible
for a portion of that avoided cost.Staff does not believe this is double counting.
Generation Capacity
ICL recommends that the Company,"Adjustthe Company's Export Credit Rate ("ECR")
methodology to include marginal line loss calculations and avoided cost figures based on battery
storage as the alternative dispatchable resource."ICL Initial Comments at 2.Staff believes
there are two factors to consider when choosing a surrogate dispatchable resource to establish a
purelyavoided cost of capacity.The resource should:(1)have the lowest levelized fixed cost
including capital cost and fixed operation and maintenance cost;and (2)be reliably dispatchable
regardless of the time or duration needed.ICL's recommendation to use battery storage as a
proxy for avoided cost of capacity does not fit either of these two criteria.First,battery storage
has a levelized cost of $204/kilowatt/year while a simple cycle combustion turbine has a
levelized cost of $144/kilowatt/year.2023 IRP at 114.If the Company needed to install a
resource to add capacity outside of any other needs,the Company would choose a dispatchable
resource with the lowest levelized fixed cost.Second,a proxy avoided cost of capacity should
be based on a resource that can reliably provide capacity when it is needed.Since battery storage
has limited duration dispatch,using it as a surrogate capacity resource does not provide an ideal
fit.
Transmission and Distribution("T&D")
In its Initial Comments,Boise City recommends that,if the Commission determines that
an ECR is necessary,that it should include a higher T&D deferral value.Specifically,Boise
City believes that the energy efficiency ("EE")T&D deferral value will yield a higher on-peak
T&D avoided cost value in the ECR.Staff believes that it is inappropriate to use EE T&D
deferral values for the ECR.The Company describes that the calculation of the T&D capacity
value relies on the same 20 years of project data that are used to determine IRP EE values.
Anderson Direct at 32.While the input data is the same,the 2023 IRP describes that the EE
REPLY COMMENTS OF COMMISSION STAFF 5 NOVEMBER 2,2023
avoided T&D costs are calculated using EE specific assumptions and reduction amounts.2023
IRP at 72.Meanwhile,the proposed ECR calculation in Exhibit 3 uses analogous export data
and assumptions specific to on-site generation customers to calculate the T&D deferral value.
Staff recommends that on-site generation export specific data and assumptions are used to value
the ECR T&D deferral and believes it will result in a more accurate T&D value specific to
customer generators.
Boise City also recommends that the T&D deferral value be sourced from the most
recently acknowledged IRP.Staff is indifferent on this matter;however,Boise City's
recommendation does not include other components that the Company has proposed to update
based on the most recently filed IRP.Staff recommends that the Company maintain a consistent
practice for basing ECR component updates out of its IRPs (i.e.,as filed or acknowledged IRPs)
and should not favor individual analysis because it has a higher value in a different IRP cycle.
Integration Costs
CEO proposes that the ECR incorporate the integration cost from case scenario ("Case")
9 of the 2020 Variable Energy Resources Study instead of from Case 1.CEO Initial Comments
at 7.Staff believes that this proposal has merit.Two characteristics distinguish Case 9 from
Case 1.Case 9 assumes an additional 794 megawatts ("MW")of solar generation,and 200 MW
of battery storage.
As expected,cases with higher solar penetration and no battery storage have higher
integration costs,such as Cases 4 and 8.2020 Integration Study at 5.However,Case 9,which
has the same level of solar penetration as Case 4 and 8,has 200 MW of 4-hour battery storage
and an integration cost that is 22 percent of Case 1.Based on this information,Staff believes
that the presence of battery storage in the Company's system can influence integration costs.
Since the Company will have installed approximately 120 MW of battery storage by the
end of the year,Staff recommends the Company conduct a new integration study as soon as
possible,and not wait until after the 2025 IRP,as proposed by Mr.Ellsworth.Ellsworth Direct
at 27.Staff also recommends that the Company file the study for Commission approval3 and
incorporate the results of this new integration study into the next possible ECR adjustment filing.
3 See StaffInitial Comments at 25.
REPLY COMMENTS OF COMMISSION STAFF 6 NOVEMBER 2,2023
Grandfathering
In Vote Solar's Initial Comments,it recommends that "the Commission should determine
that customers who have applied to interconnect a solar installation on or before the date of the
Commission's final order in this proceeding may remain on the rate current at the time of their
application for a period of 20 years."Vote Solar Initial Comments at 4.Staff interprets this
recommendation as an expansion of grandfathering.The Commission has been clear through
Order Nos.34509,34546,and 34854,that established legacy status for Schedule 6,8,and 84
customers will not be expanded.Per Commission Order,grandfathered legacy status terminates
either December 20,2045,or whenever a legacy customer violates the grandfathering criteria,or
when a self-generator self-forfeits their legacy status.Order No.34546 at 9.Staff does not
recommend expanding grandfathering,or legacy status.Staff believes that Commission orders
regarding grandfathering are clear on this matter and that tariff rates for customer generators who
do not qualify for grandfathering are subject to change.
PUBLIC INPUT
As of October 27,2023,393 public comments have been filed in this case,a 60%
increase from the 237 public comments noted in previouslyfiled comments,but not recorded
until after Staff comments had been filed.Of the 393 customers who offered comments,135
customers (34%4)identified as non-legacy customers,while only 18 (5%)clearlyidentified
themselves as legacy customers.There were another 114 customers (29%)who have a net-
generation system but did not identify their status,whether legacy or non-legacy or interested in
self-generation.
Order No.35955 established two Customer Hearing's and set the Customer Comment
deadline.Customers must submit public written comments by November 8,2023.
The first Public Customer Hearing was held on Tuesday October 24,2023,in Boise,
Idaho and the second is scheduled for Wednesday November 8,2023,in Twin Falls,Idaho.On
October 24,157 people attended the Customer Hearing,in-person and virtually.37 people
testified at the Boise hearing,including 8 students.
Previous Orders
4 ŸCTCCHÍSgeS are in reference to the total number of customers from the most recent comment count.
REPLY COMMENTS OF COMMISSION STAFF 7 NOVEMBER 2,2023
Customers continued to express concerns regarding grandfathering with 160 customers
(41%)stating that all current net generationcustomers should be granted legacy status.58
customers (15%)claimed they were not aware of possible changes to the program at the time
their systems were installed.These customers stated they would not have gone forward had they
known the rates would change.
There were 65 customers (17%)who disagreed with the outcome of Case No.IPC-E-22-
22,including42 customers (11%)who challenged the objectivity of the VODER study,and 29
customers (7%)who suggested that the Commission failed to consider third-partystudies and the
concerns of interested parties.There were 119 customers (30%)who urged further consideration
of environmental benefits.
Structure and Compensation
Regarding any change to compensation,238 customers (61%)wanted no change to the
structure of the program,and 216 customers (55%)wanted to keep monthlynet metering versus
real-time metering.
Regarding the accrued kwh credits accumulated by both legacy and non-legacy
customers,41 customers (10%)expressed concern about the future value and traceability of
accumulated credits as well as advocated for customer options for the applicability of those
credits.
Regarding financial credits under the proposed changes,33 customers (8%)worried
about the accountability of those financial credits and the value of those credits.
Of the 21 customers (5%)who offered comments on the ECR,14 customers (4%)wanted
the ECR tied to retail rates,and 9 customers (2%)expressed a desire for an unbiased annual
review of ECR rates.
There were 52 customers (13%)who offered comments regarding compensation for peak
versus non-peakhours,time-of-day versus peak and non-peak hours,seasonal demand versus
customer peak hours and use of a single rate versus peak and non-peak hours.
Incentives
There were 92 customers (23%)who said the Company needs to provide more incentives
to customers to encourage net generation.
REPLY COMMENTS OF COMMISSION STAFF 8 NOVEMBER 2,2023
STAFF RECOMMENDATIONS
In addition to Staff's recommendations provided in its initial comments Staff
recommends that the Company conduct a new integration study as soon as possible,file the
study for Commission approval,and incorporate the results of this new integration study into the
next possible ECR adjustment filing.
Respectfully submitted this 2nd day of November 2023.
dm
Deputy AttorneyGeneral
Technical Staff:Jason Talford
Chris Hecht
DylanMoriarty
Jolene Bossard
Matt Suess
Travis Culbertson
Yao Yin
i:umisc/comments/IPC-E-23-14 Reply Comments
REPLY COMMENTS OF COMMISSION STAFF 9 NOVEMBER 2,2023
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 2nd DAY OF NOVEMBER 2023,
SERVED THE FOREGOING REPLY COMMENTS OF THE COMMISSION STAFFTOIDAHOPOWER,IN CASE NO.IPC-E-23-14,BY MAILING A COPY
THEREOF,POSTAGE PREPAID,TO THE FOLLOWING:
LISA D NORDSTROM TIMOTHY TATUM
MEGAN GOICOECHEA ALLEN CONNIE ASCHENBRENNER
IDAHO POWER COMPANY GRANT ANDERSON
PO BOX 70 IDAHO POWER COMPANY
BOISE ID 83707-0070 PO BOX 70
E-MAIL:[e-mail] BOISE ID 83707-0070
[e-mail] E-MAIL:[e-mail]
[e-mail] [e-mail]
[e-mail]
ERIC L OLSEN LANCE KAUFMAN PhD
ECHO HAWK &OLSEN PLLC 2623 NW BLUEBELL PLACE
PO BOX 6119 CORVALLIS OR 97330
POCATELLO ID 83205 E-MAIL:[e-mail]
E-MAIL:[e-mail]
MATTHEW NYKIEL BRAD HEUSINKVELDIDCONSERVATIONLEAGUEIDCONSERVATIONLEAGUE
710 N 6TH ST 710 N 6TH ST
BOISE ID 83702 BOISE ID 83702
E-MAIL:[e-mail] E-MAIL:[e-mail]
C TOM ARKOOSH MICHAEL HECKLER
ARKOOSH LAW OFFICES COURTNEY WHITE
PO BOX 2900 CLEAN ENERGY OPPORTUNITIES
BOISE ID 83701 3778 PLANTATION RIVER DR
STE 102E-MAIL:tom.arkoosh arkoosh.com
.BOISE ID 83703enn.cecil arkoosh.com .E-MAIL:[e-mail]
[e-mail]
KELSEY JAE
LAW FOR CONSCIOUS LEADERSHIP
920 N CLOVER DR
BOISE ID 83703
E-MAIL:[e-mail]
CERTIFICATE OF SERVICE
AUSTIN RUESCHHOFF JIM SWIER
THORVALD A NELSON MICRON TECHNOLOGY INC
AUSTIN W JENSEN 800 SOUTH FEDERAL WAY
HOLLAND &HART LLP BOISE ID 83707
555 17TH ST STE 3200 E-MAIL:[e-mail]
DENVER CO 80202
E-MAIL:[e-mail]
[e-mail]
[e-mail]
[e-mail]
clmoser hollandhart.com
DARRELL EARLY WIL GEHL
DEPUTY CITY ATTORNEY ENERGY PROGRAM MANAGER
BOISE CITY ATTORNEY'S OFFICE BOISE CITY DEPT OF PUBLIC WORKS
PO BOX 500 PO BOX 500
BOISE ID 83701-0500 BOISE ID 82701-0500
E-MAIL:[e-mail] E-MAIL:[e-mail]
boisecityattorney citvofboise.org
ABIGAIL R GERMAINE KATE BOWMAN REG DIR
ELAM &BURKE PA VOTE SOLAR
PO BOX 1539 299 S MAIN ST STE 1300
BOISE ID 83701 PMB 93601
E-MAIL:are elamburke.com SALT LAKE CITY UT 84111
E-MAIL:kbowman votesolar.org
SECRETARY
CERTIFICATE OF SERVICE