20231012Comments.pdf

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 1
CASE NO. IPC-E-23-14

Eric L. Olsen (ISB# 4811)
ECHO HAWK & OLSEN, PLLC
505 Pershing Ave., Ste. 100
P.O. Box 6119
Pocatello, Idaho 83205
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]

Attorney for Intervenor Idaho Irrigation Pumpers Association, Inc.

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
AUTHORITY TO IMPLMENT CHANGES
TO THE COMPENSATION STRUCTURE
APPLICABLE TO CUSTOMER ON-SITE
GENERATION UNDER SCHEDULE 6, 8,
AND 84 AND TO ESTABLISH AN EXPORT
CREDIT RATE METHODOLOGY
CASE NO. IPC-E-23-14

IDAHO IRRIGATION PUMPERS
ASSOCIATION, INC.’S COMMENTS

COMES NOW Idaho Irrigation Pumpers, Inc. (“IIPA”) and pursuant to Order No. 35881,
herein provide its comments with respect to Idaho Power Company’s (“IPC”) Application, as
follows:
Background
The IIPA represents approximately 12 percent of IPC’s load and 32 percent of energy
subject to IPC’s net export credit. IIPA members include both participants and non-participants
in solar net metering. Thus, IIPA has an interest in ensuring that participants are fairly
compensated, but not over-compensated, for export energy. We find that IPC’s application fairly
reflects IIPA’s input on the VODAR study in Case. However, this filing provides additional
detail and calculations which bring to light new issues that were not evident in that case. These
comments address the following issues:
RECEIVED
2023 OCTOBER 12, 2023 5:01PM
IDAHO PUBLIC
UTILITIES COMMISSION

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 2
CASE NO. IPC-E-23-14

1. Irrigation and non-irrigation net export energy have substantially different annual shapes
and warrant separately calculated export credits.
2. The EIM prices used to calculate on-peak energy value are, on average, hours where
scarcity pricing results in market prices compensating for capacity as well as energy. As a
result, IPC’s filed rate double compensates net metering participants for the capacity
value of exports, once directly through the capacity component and again indirectly
through the on-peak energy component. The off-peak energy value should be credited in
both on- and off-peak periods to avoid double counting capacity.
3. The EIM prices used to calculate energy value include the value of greenhouse gas
credits. However, net metering participants retain RECs and all renewable attributes of
their net production, thus these customers should not be compensated as if these attributes
are being provided to IPC. The energy credit should be recalculated with GHG values
removed from the EIM prices.
4. IPC expects market prices to decline over time during solar production hours. This means
that the export credit will also decline over time. IPC should provide notice of this by
including tariff language that informs customers of the expected decreases in the net
export credit over time.
5. The proposed methodology values energy using historical rather than forecasted costs. In
an environment of declining market prices during solar production hours, this will
systematically bias the export credit and cause IPC to overpay for net energy. IPC should
develop a balancing account to track the difference between the energy value paid to
customers and the value received from customers and amortize the balance in each export
credit rate update.

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 3
CASE NO. IPC-E-23-14

6. The distribution component of the capacity credit assumes that 100 percent of solar
generation is exported. However, not all energy produced is exported, and much of the
energy produced reduces the customer’s energy bill. If the energy component of the
customer’s bill includes distribution costs, the customer will receive double
compensation for reduced distribution costs, once directly through the capacity
component of the export credit, and again by avoiding these costs through avoiding
energy charges with self-consumed energy. Rate schedules that recover some portion of
distribution demand costs through the energy charge should be excluded from receiving
the distribution component of the capacity credit.
Issue 1: Separate Irrigation Energy Credit
IPC proposes a single export credit for all classes of exporting customers. However, most
irrigation customers have little to no off-season load, while residential and commercial
customers have material load in every month of the year. This means that a disproportionately
large share of irrigation net energy export occurs in winter and shoulder months. Table 1 below
reproduces IPC’s calculation of the energy value of exports across all classes (Ellsworth Exh 1
page 2).
(Table 1 on following page)

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 4
CASE NO. IPC-E-23-14

Table 1

Table 2 below reproduces these calculations for the irrigation class. The Annual, On-Peak,
and Off-Peak $/MWh for the irrigation class exceed IPC’s filed amounts because the irrigation
energy is exported during higher priced hours.
(Table 2 on following page)

Monthly Seasonal Energy Calculation
On/Off-Peak Month Value Energy $/MWh
Off-Peak 1 102,879$ 3,144 32.72$
Off-Peak 2 167,545$ 6,362 26.33$
Off-Peak 3 233,461$ 8,973 26.02$
Off-Peak 4 436,204$ 9,977 43.72$
Off-Peak 5 445,602$ 11,077 40.23$
Off-Peak 6 263,414$ 9,105 28.93$
On-Peak 6 57,053$ 1,624 35.14$
Off-Peak 7 385,929$ 6,750 57.17$
On-Peak 7 188,394$ 2,100 89.72$
Off-Peak 8 402,482$ 6,195 64.97$
On-Peak 8 165,264$ 1,767 93.52$
Off-Peak 9 474,169$ 7,779 60.96$
On-Peak 9 118,488$ 764 155.00$
Off-Peak 10 516,061$ 9,157 56.36$
Off-Peak 11 332,075$ 4,809 69.06$
Off-Peak 12 517,249$ 2,494 207.40$
Annual 4,806,268$ 92,076 52.20$
On-Peak 529,199$ 6,255 84.60$
Off-Peak 4,277,069$ 85,821 49.84$

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 5
CASE NO. IPC-E-23-14

Table 2

Table 3 below reproduces these calculations for the non-irrigation classes. The Annual, On-
Peak, and Off-Peak $/MWh for the non-irrigation classes are lower than IPC’s filed amounts
because the energy is exported during lower priced hours.
(Table 3 on following page)

Monthly Seasonal Energy Calculation Irrigation
On/Off-Peak Month Value Energy $/MWh
Off-Peak 1 54,296$ 1,592 34.10$
Off-Peak 2 72,932$ 2,596 28.09$
Off-Peak 3 83,781$ 3,081 27.20$
Off-Peak 4 143,109$ 3,172 45.11$
Off-Peak 5 124,454$ 3,021 41.20$
Off-Peak 6 63,232$ 2,185 28.94$
On-Peak 6 13,633$ 382 35.66$
Off-Peak 7 82,620$ 1,443 57.25$
On-Peak 7 61,056$ 647 94.32$
Off-Peak 8 101,330$ 1,576 64.30$
On-Peak 8 64,255$ 630 102.02$
Off-Peak 9 130,046$ 2,109 61.66$
On-Peak 9 42,378$ 218 194.22$
Off-Peak 10 184,211$ 3,230 57.03$
Off-Peak 11 149,508$ 2,103 71.08$
Off-Peak 12 332,217$ 1,561 212.83$
Annual 1,703,057$ 29,547 57.64$
On-Peak 181,321$ 1,878 96.57$
Off-Peak 1,521,736$ 27,670 55.00$

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 6
CASE NO. IPC-E-23-14

Table 3

This recommendation will not impact the total amount paid for exported energy, but it
will better align the value of exports with the rate classes producing the exports. Under current
market prices this change will benefit the irrigation class. However, IPC expects shoulder month
energy prices to decline more rapidly than summer month energy prices. This means that, in the
future, this recommendation may result in lower payments to the irrigation class. IPC’s
recommendation can be implemented by replacing the energy credit component of the export
Monthly Seasonal Energy Calculation Non-Irrigation
On/Off-Peak Month Value Energy $/MWh
Off-Peak 1 48,583$ 1,552 31.30$
Off-Peak 2 94,613$ 3,766 25.12$
Off-Peak 3 149,680$ 5,892 25.40$
Off-Peak 4 293,095$ 6,804 43.07$
Off-Peak 5 321,149$ 8,056 39.86$
Off-Peak 6 200,182$ 6,920 28.93$
On-Peak 6 43,420$ 1,241 34.98$
Off-Peak 7 303,309$ 5,307 57.15$
On-Peak 7 127,339$ 1,452 87.67$
Off-Peak 8 301,151$ 4,619 65.19$
On-Peak 8 101,009$ 1,137 88.81$
Off-Peak 9 344,123$ 5,669 60.70$
On-Peak 9 76,110$ 546 139.33$
Off-Peak 10 331,849$ 5,927 55.99$
Off-Peak 11 182,567$ 2,705 67.48$
Off-Peak 12 185,032$ 933 198.32$
Annual 3,103,211$ 62,529 49.63$
On-Peak 347,878$ 4,377 79.47$
Off-Peak 2,755,333$ 58,152 47.38$

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 7
CASE NO. IPC-E-23-14

credit rate in Ellsworth Direct Figure 1 of 8.59 ¢ and 4.91 ¢ with a distinct credit for irrigation
(9.847 ¢ and 5.449 ¢) and non-irrigation (8.051 ¢ and 4.654 ¢) exporters.1
Issue 2: Remove capacity value from energy credit.
The EIM prices used to calculate on-peak energy value are, on average, hours where
scarcity pricing results in market prices compensating for capacity as well as energy. For
example, Table 2 shows that the average on-peak export value in August is $194 per MWh. This
level of pricing indicates that the market is constrained during export hours, and as a result
market prices reflect the cost of this scarcity.
Market prices during hours where the market is not capacity constrained can reasonably
be asserted to reflect energy value. However, market prices during hours where the market is
capacity constrained have both a capacity and energy component.
Resources produce as long as marginal revenue, or market price, is greater than marginal
production costs such as fuel. This means that the producers do not recover fixed costs during
periods where market prices are low. These costs are instead recovered during periods where
market prices are high, or in on-peak hours. IPC treats fixed costs as demand costs. Thus, on-
peak hour market prices represent a payment to producers for both energy (variable costs) and
capacity (fixed costs).
IPC proposes to pay customers for the capacity value directly through a capacity payment
in on-peak export hours.2 However, IPC also proposes to pay customers for the premium value
of on-peak exports.3 The premium that IPC offers during these hours duplicates a capacity

1 Calculated using tables 2 and 3 above and the methodology in Ellsworth Exh 1 page 2.
2 Ellsworth Direct Figure 1 shows 11.59 ¢ per kWh for generation capacity.
3 Ellsworth Direct Figure 1 shows on and off-peak energy credit as 8.59 ¢ and 4.91 ¢, an on-peak premium
of 3.68 ¢.

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 8
CASE NO. IPC-E-23-14

payment for on peak energy. If all exported energy were sold in the EIM, there would be no
capacity value remaining for IPC.
To avoid double counting capacity value, we recommend re-pricing the on-peak energy
credit to equal the off-peak energy credit. Using the values in Ellsworth Direct Figure 1, this
would reduce the on-peak credit from 20.42 ¢ to 16.74 ¢.
Issue 3: Exclude Greenhouse Gas component of energy payment.
The EIM prices used to calculate energy value include the value of greenhouse gas
credits.4 According to IPC, “The GHG component is the marginal cost of providing the next
megawatt (“MW”) of energy to serve load in the California Independent System Operator
(“CAISO”) load from an Energy Imbalance Market (“EIM”) Balancing Authority Area outside
of California. EIM participating resources submit energy bids into the EIM market and can
choose to offer a bid with a flat GHG price adder to allow that energy to be sent to serve load in
California.” 5 However, net metering participants retain RECs and all renewable attributes of
their net production. If IPC were to directly export this energy on the EIM (which isn’t
technically feasible), the energy would not receive a GHG price adder. It is not appropriate to
pay net export customers for a renewable attribute when the customer does not provide this
attribute to IPC.
Thus, net export customers should not be compensated as if these attributes are being
provided to IPC. The energy credit should be recalculated with GHG values removed from the
EIM prices.

4 IPC’s response to IIPA’s DR 1-2c.
5 IPC’s response to IIPA’s DR 1-2c.

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 9
CASE NO. IPC-E-23-14

Issue 4: Include a notice in tariff language of potential changes to export credit and on-
peak hours
IPC expects solar energy to decline in value over time. The figure below illustrates IPC’s
expected evolution in hourly pricing from 2021 to 2041.

Note that prices decline rapidly from 2021 to 2041. This decline in solar value is directly
related to expected increases in solar generation. For example, Jackpot Solar came on-line at the
end of 2022, and there has been a substantial decrease in solar export value from 2022 to 2023,
as shown in the figure below.

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 10
CASE NO. IPC-E-23-14

Given the expected trend in solar production and market prices, it is reasonable to expect
that the net export credit will decline over time. However, some net metering customers may not
have sufficient energy market background to be aware of this expected decrease in value. IPC
should include language in its tariff that identifies the potential for the export credit to decrease
substantially over time.
Issue 5: Track deviations from energy payments and energy value
The prior section demonstrates that export energy values are expected to fall continuously
over the next 20 years. However, the proposed credit methodology values energy using historical
rather than forecasted costs. In an environment of declining market prices during solar
production hours, this will systematically bias the export credit and cause IPC to overpay for net
energy. IPC should develop a balancing account to track the difference between the energy value
paid to customers and the value received from customers and amortize the balance in each export
credit rate update.
IPC can track energy payments by multiplying the energy component of the export credit
rate by the total volume of export energy in each hour. IPC can track the actual value of energy
by multiplying the LAP price, adjusted for line losses and integration costs, by total export
volume. The difference in these values should be credited to a balancing account and
incorporated into the export credit rate in annual or quarterly updates.
Export Value $/MWh
On/Off-Peak Month 2022 2023
Off-Peak 4 43.72 32.18
Off-Peak 5 40.23 3.68
Off-Peak 6 28.93 20.02
On-Peak 6 35.14 25.90
Off-Peak 7 57.17 46.98
On-Peak 7 89.72 65.88

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 11
CASE NO. IPC-E-23-14

If the methodology is modified as recommended in issue 1, 2, or 3, such changes should
be incorporated into calculating balancing account changes. For example, if the on-off peak
differential is removed from the export credit rate, the actual on-peak EIM prices would be
replaced by weighted average off-peak prices, using actual export volumes to weight prices.
Issue 6: Transmission and Distribution credit should only apply to schedules with no
transmission or distribution revenue requirement included in the energy charge.
The proposed export credit includes 0.25 ¢ per on-peak kWh for avoided transmission
and distribution capacity costs. The calculation of this credit assumes that 100 percent of solar
generation is exported, which is not the case. Furthermore, net exporters already avoid
distribution costs to the extent that these costs are included in the energy rate of their respective
base schedules.
If the energy component of the customer’s bill includes distribution costs, the customer
will receive double compensation for reduced distribution costs, once directly through the
capacity component of the export credit, and again by avoiding these costs through avoiding
energy charges with self-consumed energy.
For example, the current Schedule 1 rate has a $5 fixed charge and all other revenue is
recovered through the energy charge. If a customer on Schedule 1 is also a net metering
customer, and 50 percent of the customer’s load is self-generated, the customer avoids
approximately 50 percent of the cost of providing distribution and transmission service. The
export credit rate includes 100 percent of the benefit of the customer’s solar generation. This
includes distribution benefit of both self-consumed generation and export generation, because the
model used to calculate distribution and transmission benefit assumes 100 percent of production

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 12
CASE NO. IPC-E-23-14

is available to defer distribution investments. This customer should not receive the distribution
and transmission capacity credit because it would double count these benefits.
Irrigation customers pay a substantial demand charge. This demand charge recovers both
generation demand and distribution demand. Thus, irrigation net metering customers do not
avoid distribution costs in the same manner as residential net metering customers. There is no
double counting of distribution discounts for these customers, and it is therefore appropriate for
irrigation customers to receive the transmission and distribution credit.
Rate schedules that recover some portion of distribution demand costs through the energy
charge should be excluded from receiving the distribution component of the capacity credit. IPC
may change rate design in the future, and it would be appropriate to realign the distribution and
transmission component of the export credit in the future to reflect such changes.

DATED this 12th day of October, 2023.
ECHO HAWK & OLSEN

_____________________________________
ERIC L. OLSEN

IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 13
CASE NO. IPC-E-23-14

CERTIFICATE OF SERVICE

I HEREBY CERTIFIY that on this 12th day of October, 2023, I served a true, correct and
complete copy of the Petition of Idaho Irrigation Pumpers Association, Inc.’s First Set of Data
Requests to each of the following, via the method indicated below:

Jan Noriyuki, Secretary
Idaho Public Utilities Commission
P.O. Box 83720
11331 W. Chinden Blvd.
Building 8, Suite 201-A
Boise, ID 83714
[e-mail]

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Chris Burdin
Deputy Attorney General
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg. No. 8,
Suite 201-A (83714)
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]

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Lisa D. Nordstrom
Megan Goicoechea Allen
Idaho Power Company
1221 W. Idaho St. (83702)
PO Box 70
Boise, ID 83707-0070
[e-mail]
[e-mail]
[e-mail]

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Timothy Tatum
Connie Aschenbrenner
Grant Anderson
Idaho Power Company
1221 W. Idaho St. (83702)
PO Box 70
Boise, ID 83707-0070
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IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 14
CASE NO. IPC-E-23-14

Lance Kaufman, Ph.D.
Idaho Irrigation Pumpers Association, Inc.
2623 NW Bluebell Place
Corvallis, OR 97330
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Matthew Nykiel
Idaho Conservation League
710 N. 6th Street
Boise, ID 83702
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Brad Heusinkveld
Idaho Conservation League
710 N. 6th Street
Boise, ID 83702
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Tom Arkoosh
Arkoosh Law Offices
Attorney for IDAHYDRO
913 W. River St., Suite 450
P.O. Box 2900
Boise, ID 83701
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Michael Heckler
Courtney White
Clean Energy Opportunities for Idaho Inc.
3778 Plantation River Dr., Suite 102
Boise, ID 83703
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Kelsey Jae
Law for Conscious Leadership
Attorney for Clean Energy Opportunities for
Idaho Inc.
920 N. Clover Dr.
Boise, ID 83703
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IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 15
CASE NO. IPC-E-23-14

Jim Swier
Micron Technology, Inc.
8000 South Federal Way
Boise, ID 83707
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Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart, LLP
Attorneys for Micron Technology, Inc.
555 17th Street, Suite 3200
Denver, CO 80202
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Darrell G. Early
Deputy City Attorney
Boise City Attorney’s Office
150 N. Capitol Blvd.
P.O. Box 500
Boise, ID 83701-0500
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Wil Gehl
Energy Program Manager
Boise City Dept. of Public Works
150 N. Capitol Blvd.
P.O. Box 500
Boise, ID 83701-0500
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Kate Bowman
Regulatory Director
Vote Solar
299 S. Main St., Suite 1300
PMB 93601
Salt Lake City, UT 84111
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IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. FIRST SET OF DATA REQUESTS – Page 16
CASE NO. IPC-E-23-14

Abigail R. Germaine
Elam & Burke PA
Attorney for Vote Solar
251 E. Front St., Suite 300
P.O. Box 1539
Boise, ID 83701
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_____________________________________
Eric L. Olsen, Echo Hawk & Olsen PLLC