The URL can be used to link to this page

Home My WebLink About19970117Order_26750.PDFBEFORE TEE IDBO PUBLIC UTILITIES CONMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPAIY FOR AN )CERTIFICATE OF MAILING OFORDERREVISINGTEERATES,TERMS AND CONDITIONS UNDER WHICH IDAHO ) POWER PURCHASES NON-FIRM ENERGY )ORDER NO.26750 FROM QUALIFYING FACILITIES... )CASE NO.XPC-E-95-15 STATE OF IDAHO) )ss COUNTY OF ADA I hereby certify that I am employed as a secretary in the office of the Secretary,IPUC,and that on the 17th day of January ,1997,I served ORDER NO.26750 in the above entitled matter,pursuant to directions and instructions of the Secretary on each of the following: NANE ADDRESS PLEASE SEE ATTACHED LIST MISC.MAILING LISTS (A,B-i,B-3 &F-i)mailed at a later date by depositing in the United States Mail,true copy thereof for each enclosed in a sealed envelope,with postage prepaid,addressed to each of them respectively at his respective place of address,and that there is regular mail service to each of said addresses. WITNESS by hand and seal of said Commission at Boise,Idaho,this 22nd day of January ,1997. ‘1 ifl/1 (704Lv—/I &Lt OFFICE SECRETARYipce9sls.crt IPC-E-9-15 IDPHO POWER COMPANY PARTIES OF RECORD BARTON L KLINE IDAHO POWER COMPANY P0 BOX 70 BOISE ID 83707-0070 INTERESTED PARTIES LARRY D RIPLEY IDAHO POWER COMPANY PC BOX 70 BOISE ID 83707-0070 PETER J RICHARDSON DAVIS WRIGHT TREMAINE 999 MAIN ST STE 911 BOISE ID 83702 RONALD C BARR EARTH POWER ENERGY &MINERALS INC 2534 E 53RD ST TULSA OK 74105 MARCUS G THEODORE COGEN POWER II INC 466 SOUTH 500 EAST SALT LAKE CTY UT 84102 OWEN H ORNDORFF ORNDORFF PETERSON STE 230 1087 W RIVER ST BOISE ID 83702-7035 CONLEY WARD GIVENS PURSLEY ET AL P0 BOX 2720 BOISE ID 83701-2720 BILL BROWN AW BROWN CO INC 3416 VIA LIDO STE F NEWPORT BEACH CA 92663 DON A OLOWINSKI RICHARD B BURLEIGH HAWLEY TROXELL ET AL P0 BOX 1617 BOISE ID 83701-1617 TERRY E COFFIN ATTORNEY AT LAW P0 BOX 1758 BOISE ID 83701-1758 F I SHERIES DEVELOPMENT COMPANY 1301 VISTA AVE BOISE ID 83705 JOHN CROCKETT DEPT OF WATER RESOURCES PC BOX 83720 BOISE ID 83720-0098 STATEHOUSE MAIL LES NELSON CAL SEIA 2391 ARDEN WAY STE 212 SACRAMENTO CA 95825 GENER R BERTSCHE 13810 N 11TH ST PHOENIX AZ 85022 MARY G McGOWEN PH]) IDAHO RIVERS UNITED P0 BOX 633 BOISE ID 83701-0633 MARJORIE G HAYES 7440 MANORWOOD DR BOISE ID 83704 JOHN R SMITH SMITH ASSOCIATES PA P0 BOX 2029 KETCHUM ID 83340 PETER CHAFFEY 109 VICTOR DR HAlLEY ID 83333 MARK A MOSER RESOURCE CONSERVATION MANAGEMENT INC P0 BOX 4715 BERKELEY CA 94704 CHARLES WOODWARD NATURAL RESOURCE CO P0 BOX 91 VICTOR ID 83455 DAVID VAN HERSETT FOREST FUELS INC N 9 POST ST STE 241 SPOKANE WA 99201 MIKE LEONARD AURORA POWER &DESIGN 3412 N 36TH ST BOISE ID 83703 DALE C HALL OWNER DALE HALL &ASSOC 410 PARKWAY DR BOISE ID 83706 fl MISCELINEOUS MAILING LIST (RUN 46) LIST “B -1” LOIS 0 CASHELL SECRETARY FERC 825 N CAPITOL ST NE WASHINGTON DC 20426 WILLIAM J NICHOLSON POTLATCH CORPORATION SUITE 610 244 CALIFORNIA ST SAN FRANCISCO CA 94111 STAFF JUDGE ADVOCATE 366 CSG-JA MOUNTAIN HOME AFB ID 83 648-5131 GNMYERS POTLATH CORP P0 BOX 1016 LEWISTON ID 83501 JOAN SIPPLE ENERGY ECONOMIST DEPT OF WATER RESOURCES STATEHOUSE MAIL OFFICE OF CHIEF COUNSEL IDAHO OPERATION OFFICE DEPT OF ENERGY 785 DOE PLACE IDAHO FALLS ID 83401 BOB HOPPIE DEPT OF WATER RESOURCES STATEHOUSE MAIL JOHN CROCKETT DEPT OF WATER RESOURCES STATEHOUSE MAIL MYRA B ADELMAN BURT ASSOCIATES P0 BOX 719 WESTFORD MA 01886 LESLIE STITH ENGINEERING CONSULTANTS 600 N CURTIS SUITE 201 BOISE ID 83706-1443 BILL DRUMOND PUBLIC POWER COUNCIL 1500 NE IRVING STE 200 PORTLAND OR 97232 ROBERT L MILLS FMC CORPORATION PC BOX 4111 POCATELLO ID 83205-4111 LYNN N HEMINGWAY NORTHWEST PIPELINE CORP P0 BOX 8900 SALT LAKE CITY UT 84108 R ROACH /C LEONE OFF OF GEN COUNSEL APR BPA P0 BOX 3621 PORTLAND OR 97208 LINDEN SWENSEN KIEWIT COMPANY 1000 KIEWIT PLAZA OMAHA NE 68131 MARK FLESCHER SR RATE ANALYST NATIONAL UTILITY SER P0 BOX 712 PK RIDGE NJ 07656-0712 GERRY GAL INATO DEPT OF WATER RESOURCES STATEHOUSE MAIL BENT MOURIS TEN 366 CES—CEOE 1030 LIBERATOR ST MTN HOME AFB ID 83648 ROY L EIGUREN GIVENS PURSLEY &HUNTLEY PC BOX 2720 BOISE ID 83701-2720 CONT4EY WARD ESQ GIVENS PURSLEY &HUNTLEY PC BOX 2720 BOISE ID 83701-2720 BART KLINE ESQ EVANS KEANE ET AL P0 BOX 959 BOISE ID 83701-0959 GARY MAY DOMINION POWER SERVICE STE 220 699 EAST SOUTH TEMPLE SALT LAKE CITY UT 84102 DONALD A HAAGENSEN HILL HUST0N CABLE ET AL SUITE 2000 1001 SW FIFTH AVE PORTLAND OR 97204-1136 LIBRARIAN PRESTON THORGRIMSON 5400 COLUMBIA CENTER 701 5TH AVE SEATTLE WA 98104-7011 MARIE MALONE PACIFICRCP-UTAH POWER 201 S MAIN ST STE 800 SALT LAKE CITY UT 84140 JR GALE MGR -RATES IDAHO POWER COMPANY PC BOX 70 3O3E ID 33707-0070 LISA LOGIE POLICY ANALYST PNUCC 101 SW MAIN SUITE 810 PORTLAND OR 97204 ASSOC.OF IDAHO CITIES 3314 GRACE STREET BOISE ID 83703-5896 0 MISCELLANEOUS MAILING LISr !I -U CONT’D” FRANK BRYANT ENERGY USER NEWS 900 FRONT ST SAN FRANCISCO CA 94111 FRANKIE HICKMAN EX VP BLDG CONTRACTORS ASSOC OF SOUTHWESTERN IDAHO 11120 EXECUTIVE DRIVE BOISE ID 83704-9844 BCA WOOD RIVER VALLEY P0 BOX 2723 KETCHUM ID 83340-2723 RONALD L WILLIAMS ESQ ATTORNEY AT LAW P0 BOX 2128 BOISE ID 83701-2128 JIM CLARK 8561 N CLAKVIEW PL HAYDEN LAKE ID 83835 JOE DAVIS LB INDUSTRIES INC P0 BOX 2797 BOISE ID 83701 IDAHO BUILDING CONTRACTORS ASSOC SUITE 303 802 W BANNOCK ST BOISE ID 83702-5840 HOUSEL CONSTRUCTION P0 BOX 445 KETCHEJN ID 83340 SCOTT PASLEY JR SIMPLOT COMPANY PC BOX 27 BOISE ID 83707-0027 DAVID HAWK JR SIMPLOT COMPANY PC BOX 27 BOISE ID 83707-0027 JAMES GOLDMANN PC BOX 827 KETCHUM ID 83340-0827 JOHN J McFADDEN MOORE &McFADDEN 999 MAIN ST STE 910 BOISE ID 83702 WARD SINSEL 9477 APPLING DR BOISE ID 83704 TOM FLEMING IDAHO CONSUMER AFFAIRS 5056 HARBORVIEW DR BOISE ID 83703 DOCUMENT CENTER PACIFICORP 825 NE MULTNOMAH STE 625 PORTLAND OR 97232 LOCAL UNION 232 IBEW 225 N 16TH ST RN 210 BOISE ID 83702 STEVE STRASSER NW POWER ENTERPRISES INC 10500 NE 8TH ST STE 1100 BELLEVEJE WA 98004 WENDY TOBIASSON XENERGY 492 9TH ST STE 220 OAKLAND CA 94607 MISCELLANEOUS MAILING LIST “B -2” MARGIE JONES SUPV OF PURCHASING BOISE PUBLIC SCHOOLS 1207 W FORT STREET 3013E :D a37o2-5399 JOHN WILLIAMS B PA 1101 W RIVER ST STE 250 BOISE ID 83702 0 C ISCEI*XLUEOUS MAILING 1IST B -3”---- PHILLIP J HARRISON BASIC AMERICAN FOODS P0 BOX 592 BLACKFOOT ID 83221-0592 LINDA WYRATHER -DREF BPA P0 BOX 3621 PORTLAND OR 97208 )AN MEEK .935 NE CLACKIMAS 0RTLAND OR 97232 3TEVE O’BRIEN 3ASIC AMERICAN FOODS P0 BOX 592 3LACKFOOT ID 83221-0592 (IDAHO POWER ONLY) RONALD C BARR EARTH POWER ENERGY & MINERALS 2534 EAST 53RD ST TULSA OK 74105 REBECCA FORESEE MICRON MAIL STOP 902 2805 E COLUMBIA RD BOISE ID 83706-9698 MIKE BOYDSTUN TRAFFIC SECTION DIVISION OF HIGHWAYS STATEHOUSE MAIL MIKE LEONARD AURORA POWER &DESIGN 3412 N 36TH ST BOISE ID 83703 JOE MARSHALL PRES &CEO IDAHO POWER COMPANY P0 BOX 70 BOISE ID 83707-0070 JOHN WILLIAMS BPA 1101 W RIVER ST STE 250 BOISE ID 83702 R A PERALTA CHIEF COUNSEL ARGONNE NAT LAB -WEST PC BOX 2528 IDAHO FALLS ID 83403 MISCELLANEOUS MAILING LIST (run 18) LIST F’-1” C) JOHN BRADEN HYDRO CONSULTANTS 410 ARCHIBALD STREET KANSAS CITY MO 64111 MITCH ARKOOSH 714 3RD AVE EAST GOODING ID 83330 JEFF ANTISDEL NEVADA ENERGY COMPANY 989 BIBLE WAY RENO NV 89502 DON BIDDISON 4068 DUTHIE BLVD LEWISTON ID 83501-9679 DAN HUDSON 21876 SW REGAL CT ALOHA OR 97006-1316 NVH INC GLEN R STOCKWELL 306 S JEFFERSON RITZVILLE WA 99169 MELVIN TAGGART PE &LS TAGGART ENGINEERING RR 2 BOX 22 POTLATCH ID 83855-9603 PAUL E LEVY ESQ LEVY LAW OFFICES 380 PARKCENTER BLVD #320 BOISE ID 83706 GEORGE SMITH 2905W 33RD S IDAHO FALLS ID 83402-5630 BARRY SHEINGOLD CITIZENS POWER &LIGHT 530 ATLANTIC AVE BOSTON MA 02210 TOM MCLAUGHLIN P0 BOX 1066 HAlLEY ID 83333-1066 DICK GRAVES 2082 SOUTH 2000 EAST GOODING ID 83330-5309 ANNA FAY WILLIAMS EDITOR-IN-CHIEF THE COGENERATION LETTER 1750 ALBANS ST HOUSTON TX 77005-1704 DAVE VAN HERSETT STE 241 N 9 POST STREET SPOKANE WA 99201 AWBROWN A W BROWN CO INC 3416 VIA LIDO SUITE F NEWPORT BEACH CA 92663 TOM NELSON STOEL RIVES BOLEY ET AL STE 2300 900 SW 5TH ST PORTLAND OR 97204 MAHER F WISSA PRESIDENT COMMERCIAL ENERGY MGMT P0 BOX 4518 POCATELLO ID 83205-4518 PAT WINDES BLIND CANYON HYDRO 1424 BOB BARTON RD WENDELL ID 83355 )Office ofthe Secretary Service Date January22,1997 BEFORE THE iDAHO PuBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF )IDABO POWER COMPANY FOR AN ORDER )CASE NO.IPC-E-95-15 REVISING THE RATES,TERMS AND )CONDITIONS UNDER WHICH IDAHO POWER) PURCHASES NON-FIRM ENERGY FROM )ORDER NO.26750QUALIFYINGFACILITIES) _______________________________________________________________________________) In October 1995,the Idaho Power Company (Idaho Power;Company)filed an Application for an Order (1)approving revisions to the Company’s current Schedule 86 entitled “Cogeneration and Small Power Production —Nonfirm Energy;”(2)approving revisions to the rates to be paid for nonfirm energy sold to Idaho Power under Schedule 86,and (3)authorizing the Company to file documentation supporting the computation ofpurchase rates under Schedule 86 on a semi-annual rather than a monthly basis.Sellers under Schedule 86 are typically QF generators (“qualifying facilities”)of small amounts ofnonfirm power utilizing a variety of sources including, among others,cogeneration,photovoltaic and small hydro.On September 18,1996,Idaho Power amended its application.By this Order,we approve,with modifications,the Company’s Amended Application. HISTORY In 1980,the Commission directed Idaho Power,in OrderNo.16025,Case No.P-300- 12,to purchase nonfirm energy from cogenerators and small power producers based on the Company’s system avoided energy cost,plus a small amount in consideration of system capacity benefits.In compliance with the Commission’s directive,Idaho Power files,each month,a schedule showing norrflrm energy prices based on the Company’s monthly incremental variable cost ofenergy used to serve its marginal 175 MW increment of system load.The filed schedule is based on data for average fuel cost,operating and maintenance expenses (which vary with the output of thermal plants),firm power purchases and spot market purchases.In addition to its monthly variable energy cost,Idaho Power adds a 3 miii per kWh “aggregate capacity”amount to represent the “system capacity benefits”provided by Schedule 86 suppliers,as required by Order No.16025. ORDER NO.26750 -1- 1D IDAHO POWER’S PROPOSAL The Company contends that in 1980 when the Commission was considering implementing Schedule 86,a number ofparties argued that in the future there would be a sufficient number of QFS selling nonflrm energy at all times to justiIr a capacity payment based on an aggregation of nonfirm energy resources.The Commission accepted the argument at that time and required the Company to include the 3 mill aggregate capacity adder to nonfirm rates.Idaho Power contends that actual experience has shown that an aggregation of nonfirm resources has not materialized. According to the Company,nonfirm sales under Schedule 86 to Idaho Power are generally of short duration and occur on an intermittent basis.The Company states that only one large QF has received regular payments under Schedule 86 for more than a few months and that particular QF has now converted its sale to a long term,firm sale.Furthermore,Idaho Power notes that only two QF projects are currently selling nonfirm energy on a regular basis under Schedule 86. Those two projects have capacities of 110 kW and 261 kW,respectively.The Company argues that nonfirm energy purchases under Schedule 86 have never provided any actual capacity to Idaho Power’s system.Because it does not avoid any capacity purchases as a result of nonfirm energy purchases from QFS under Schedule 86,Idaho Power asserts that it would be appropriate to eliminate the 3 mill aggregate capacity adder. Idaho Power further proposes to reduce the number of compliance filings it makes with the Commission under Schedule 86.The Company will still compute the incremental variable cost of energy on a monthly basis but proposes to file the rate computation data with the Commission semi-annually as opposed to monthly.Idaho Power suggests that this is reasonable considering the small number of QFS selling to the Company under the schedule. In its current form,Schedule 86 contains three rate options for suppliers.Option “A” is a fixed rate.Option “B”is a variable rate based on the Company’s system avoided energy cost. Option “C”,known as “running the meter backward”allows suppliers to utilize the power they generate to actually reduce the amount of energy they take from Idaho Power.Idaho Power proposes to eliminate the existing Rate Option A.Only two small QFS are currently being paid under this option.The Company notes that nonfirm energy purchases from these two smaller projects could continue at the variable energy rate proposal (Option B)under the revised Schedule 86.Idaho Power ORDER NO.26750 -2- ((D asserts that the variable energy rate more accurately reflects the actual costs the Company can avoid by purchasing nonflrm energy from QFS and,therefore,elimination ofthe Option A would benefit Idaho Power’s customers. Finally,the Company originally proposed to eliminate the existing Option C titled “Offset Against RetailRates.”This option essentially allows a QF developer to be paid the retail rate for nonfirm energy by using its own generation to run the meter backwards.The option was designed to be available only to very small facilities (under 100 kilowatts)and only one QF has ever elected to utilize the option. On July 17,1996,the Commission conducted a decision meeting to resolve the issues presented by the Company’s proposal.The Commission decided three of the issues and deferred making a decision on a fourth pending a subsequent proposal by the Company.In summary,the Commission made the following decisions: 1.Eliminate the 3 mil capacity adder. 2.Reduce the number of compliance filings made with the Commission under Schedule 86 from monthly to semi-annually. 3.Eliminate Option “A”,the fixed rate supplier option. 4.Maintain rate Option “C”,generally known as running the meter backward,with certain modifications.These modifications entailed calculating a rate structure thatreflectsthefollowingrequirements: k Allows the Company to use its existing billing system. B.Allows customer to use a conventional “single meter”metering system. C.Charges customers the rate consistent with their class of service while the meter is running “forward”. D.Pays customers the avoided cost rate when the meter is running “backward.” E.Charges customers a minimum fee consistent with the amount of backup supply and capacity they are being provided. Item Number 4 was referred back to Idaho Power to develop a proposal that would fhlfihl these requirements.Idaho Power subsequently filed an amended proposal reflecting the initial conclusions ORDER NO.26750 -3- expressed by the Commission The Company also made additional changes to Schedule 86;most notably,limiting the availability of Option C to rate Schedules 1 (residential)and 7 (small commercial).Following the submission by Idaho Power of its amended proposal,the Commission issued a Notice soliciting comments in response to that proposal.Comments were received by the Commission Staff the Department of Water Resources,Idaho Rivers United,Idaho Consumer Affairs,Inc.,Resource Conservation Management,Inc.,Aurora Power Design and Mr.Peter Chaffey.All ofthe comments made in opposition to the Company’s proposal pertain to Option C. Commission Staff Option A. As indicated,Idaho Power proposes eliminating Option A from Schedule 86.In the amended proposal,each of the remaining two options have been moved up one position in the lettering order,i.e.,the former Option B is now Option A and the former C is now B.To avoid confusion,the Options will be referred to by their “old”,i.e.,still current,designation. Option B. This is the variable rate option.Staffhas no comments on Option B other than to say that the Company’s proposal appears to be consistent with the Commission’s July 17,1996 decision. Option C. This is the “rnnriirig the meter backward”option.(Also known as “net metering”).This is the Option that the Commission deferred decision on until such time as the Company could suggest a mechanism for recovering distribution and reserve capacity costs.The Company has developed a methodology that calculates a monthly charge (net photovoltaic charge)that depends on a number of variables including class of service rate,avoided energy costs,hours of sunlight and rated photovoltaic (PV)output.As suggested by its name,this monthly charge is unique to PV producers. it is Staff’s conclusion that,for PV producers,Idaho Power’s proposal for calculating the monthly charge is consistent with the Commission’s requirements to (a)allow the Company to use its existing billing system,(b)allow customers to use a conventional single metering system,(c)charge the customer the rate consistent with its class of service while the meter is running forward,(d)pay the customer the avoided cost rate when the meter is running backward and,(e)charge the customer a minimum fee that is consistent with the amount ofbackup supply and capacity the customer is being provided. ORDER NO.26750 -4- () Staff notes that while Option C is not limited to PV suppliers,this particular monthly charge is.Consequently,the Company will have to revisit this issue each time a customer with a different type ofgeneration technology requests access to Option C.Given the current and expected workload associated with processing Schedule 86 applicants,however,Staff does not consider the case specific nature of this monthly charge to be a significant problem.Staff believes that it is possible to develop a monthly charge that is consistent and broad enough to work with all forms of qualifying generation.The development and use of such a monthly charge in this tariffwould be of benefit to the public,the Company and the Commission,Staff contends. Staff believes that the proposed monthly charge under this Option calculated by the Company performs as desired but is overly complicated.Staff points out that potential customers cannot immediately discern what their monthly charge will be by looking at the tariff sheet.Staff suggests that customer understanding of the tariff could be improved by listing a table of monthly charges associated with discrete ranges ofinstalled capacity.The table could be developed with the same methodology and formulas and would carry the understanding that actual monthly charges will vary depending on the specifics of each customer’s installation. In its original filing,the Company titled Option C as “offset against retail sales—facilities under 100 kW only.”In the amended filing,the phrase “rate schedules 1 and 7 only”has been inserted.While Staff recognizes that this Option has a limited following,it believes that its appeal will be further diminished if limited to classes 1 and 7 as proposed by the Company.Staff sees no reason to add this further limitation of applicability. In the existing tariff Item 8 of the “Conditions ofPurchase and Sale”reads as follows: “Except under rates,Option C,metering will be provided for recording net output for this facility and will be separate from metering of the seller’s load.”In the proposed tariff;the qualifying section “Except under rates,Option C”has been removed;an omission that would have the effect of requiring Rate Option C customers to install additional metering equipment.Staffbelieves that to the extent that this action is clearly at odds with the Commission’s decision regarding the maintenance ofRate Option C,the phrase exempting Rate Option C customers should be revised to say “except under rates,Option C....“in recognition of the new listing of rates and reinserted into Item 8 of the conditions ofPurchase and Sale.Aside from the foregoing modifications,Staff concurs with the Company’s revised Application. ORDER NO.26750 -5- •0 State of Idaho,Department of Water Resources (I])WR) IDWR objects to the Company’s proposal to limit net metering (Option C)to rate schedules 1 and 7.According to IDWR,other customer classes using net metering will not require a second meter or hand processing of monthly bills;which is Idaho Power’s justification for the limitation.IDWR believes that net metering offers the greatest promise to customer classes other than schedules 1 and 7.For instance,integrating PV systems into the architecture of commercial buildings and utilizing the by-products ofwaste treatment at dairy and livestock operations are just two of the ways net metering can be applied but that would be needlessly eliminated by this restriction. IDWR also objects to the monthly charge under Option C which purports to recover nongeneration-related costs contending that such costs are already recovered through the line extension fees,monthly service charges and other direct service charges assessed by the Company. According to IDWR,the 1ct that the service charge calculation is based on the size of the generating system indicates that it is an assessment for net revenue lost due to reduced sales.IL)WR contends that the monthly charge is analogous to imposing a service charge for the installation of energy efficient light bulbs and that the Commission should encourage rather than penalize the use of alternative energy technologies. IDWR agrees,in concept,with the Company and Staff proposal that if a customer produces more electricity than is used in a month,the excess energy will be paid for by Idaho Power at avoided cost rates.IDWR believes,however,that the customer should be given the option to apply net metering on either a monthly or an annual basis.IDWR contends that some renewable energy sources are cyclical by nature and recommends an annualized net energy measurement similar to Idaho Power’s power cost adjustment (PCA).Other states,such as California,have set up a similar type of adjustment with their net metering customers,IDWR states. Finally,IDWR contends that the “Conditions of Purchase and Sale”have been inappropriately applied to the net metering option.The requirement of installing two meters (Condition No.8)for instance,should not be applicable to this option,IDWR contends. Idaho Rivers United (IRU) IRU believes that the Commission should support the concept of net metering which it contends is one of the simplest ways to encourage renewable energy applications by small scale ORDER NO.26750 -6- generators.IRU contends that Idaho Power’s proposal is unduly complicated and should not be limited to only schedules 1 and 7 because a greater potential for the development ofrenewable energy lies with other customer classes. IRU notes that the comprehensive review of the Northwest Energy System is currently considering the role ofrenewable energy resources in the restructured utility market.RU states that a steering committee recommendation may include requiring a small percentage of a utility’s portfolio to be from renewable energy resources.IRU urges the Commission,therefore,to defer taking any action on Idaho Power’s request until there is more clarity on how renewables will be treated in the region’s restructured system. RU made a number of comments with regard to the specifics ofthe Company’s amended Application.First,RU questions the vagueness ofthe nongeneration-related costs the Company proposes to recover through the monthly charge.Second,RU believes that net metering should not be limited to only schedules 1 and 7 and questions why the Company will require a second meter. RU also questions the Company’s requirement that QFS under schedule 86 hire an engineer to certifSr the project given the protections already built into the various conditions in the schedule assuring the safety and design of the system.Similarly,RU questions the $1,000,000 insurance requirement which it contends is excessive for residential and small commercial customers. Idaho Consumer Affairs,Inc.(ICA) ICA opposes Idaho Power’s Application contending that the Company has made the use ofnet metering impractical and even punitive.ICA contends that net metering is used tiationwide and that its development should be encouraged in this state as well. Resource Conservation Management,Inc.(RCM) RCM contends that the Company’s proposal is anti-competitive because it removes renewable energy options to the detriment of citizens and customers and to the benefit of Idaho Power.RCM contends that the lack of participation in net metering is most likely due to Idaho Power’s deliberate failure to publicize the option.RCM also questions the Company’s proposal to limit net metering to customers on rate schedules 1 and 7,which would exclude commercial and industrial customers.RCM argues that it is important to retain net metering as a viable option because of the environmental benefits of renewable energy. Peter Chaffey ORDER NO.26750 -7- C •0 Mr.Chaffey argues that the Company’s monthly charge under Option B cannot be justified.He suggests that it is tantamount to charging people for using energy efficient appliances considering that it makes little difference in how a person reduces his/her energy consumption. Nonetheless,Idaho Power actively promotes these latter measures as do many other electric utilities because it reduces the load demand on existing facilities.Mr.Chaffey proposes to keep the net metering option in place and structure it so that the power produced by a QF is offset against retail rates until there is parity.Then,any excesses should be paid at the avoided cost rate or a credit should be issued whichever is easiest to calculate for accounting purposes. Idaho Power Respsonse On December 19,Idaho Power filed a response to the comments submitted by Staff and ]DWR.First,Idaho Power concedes that a monthly charge universal to all types of generation,and not just PV,could be calculated.The Company states that unless Staffmakes a proposal,however, it will continue to calculate technology-specific charges on an as needed basis. Idaho Power agrees that it could prepare a chart,as suggested by Staff to make the monthly charge more comprehensible.The Company contends,however,that site specific analysis is necessary anyway and that customers will have to provide the Company with basic information, obtainel from the vendor of the generation equipment used,in order to calculate the charges. Regarding Staff’s objection that Option C should not be limited to schedules 1 and 7,the Company states that the reason for limitation is that schedules 1 and 7 are the only schedules that do not have a demand component associated ‘with the retail rate.They do not utilize meters that measure both demand and energy.The electricity purchased by Idaho Power under Option C is limited to non- firm energy.The Company asserts that retail rates designed to recover system costs allocated to both demand and energy make it impossible for Idaho Power to compute an appropriate monthly charge u1iliing a single meter that measures net energy and net demand when only non-firm energy is being supplied by the customer.In other words,running the meter backward for a customer with a demand as well as energy meter could reduce that customer’s demand.The Company contends that this is inappropriate because the energy supplied by the customer is non-firm and,therefore,Idaho Power must still have generation facilities available to serve that customer.The Company concludes that it would not be feasible to attempt to develop a monthly charge that takes into consideration the actual coincidence ofgeneration and demand. ORDER NO.26750 -8- C FINDINGS We hereby formalize the initial decision reached in our July 17,1996 decision meeting regarding the Company’s Application.Specifically,Idaho Power is authorized to eliminate the 3mil capacity adder included in Schedule 86.It appears that due to the lack of participation in this Schedule,very little is being provided to the Company in terms of a reduction in capacity needs. Consequently,it is reasonable to allow the Company to eliminate compensation to energy providers under Schedule 86 for the capacity value oftheir energy. We also agree that it is reasonable to allow the Company to reduce the number of compliance filings made with the Commission under Schedule 86 from monthly to semi-annually.The filing ofthis information on a semi-annual basis is sufficient to provide Staff and all concerned with necessary data in a timely manner. We find that it is reasonable to allow Idaho Power to eliminate the fixed rate option (Option A).At the time offiling,only two small suppliers were being served under Option A.The Company represents that purchases from these two smaller projects could continue at the variable energy cost proposal (formerly Option B;now Option A).Furthermore,it appears that the variable energy cost more accurately reflects the actual costs Idaho Power can avoid by purchasing non-firm energy from QFS.Consequently,elimination of Option A will benefit Idaho Power’s customers. The aspect of the Company’s Application that created controversy was the proposed changes to Option C.We confirm our initial conclusion that this Option should,in some form;remain available to those customers interested in eliminating some or all oftheir loads through their own generation.We find that a reasonable net metering option is one that (a)allows the Company to use its existing billing system,(b)allows the customer to use a conventional single meter metering system, (c)charges the customer the rate consistent with its class of service while the meter is running forward,(d)pays the customer the five year rolling average Avoided Energy Cost (see Option A)rate when the meter is rtinning backward,and (e)charges the customer a minimum fee that is consistent with the amount ofback-up supply and capacity being provided to the Company.We find that,for the most part,the Company’s revised proposal accomplishes the foregoing objectives.We now turn to the specific issues raised by the parties. ORDER NO.26750 -9- ‘4 First,we can find no reason to defer taking any action regarding Option C until there is more clarity on the role of renewable energy technologies in the restructured electric industry as proposed by RU.We agree that the future of such technologies,along with every other aspect of the electric industiy,is uncertain.We do not believe,however,that this is sufficient reason to defer making constructive changes to Schedule 86 so that it comports as closely as possible with the current state ofthe industry. We do not find that it is reasonable to require Idaho Power to calculate a monthly charge under Option C that is applicable to all forms of generation as proposed by Staff The only customers currently selling power to the Company under Option C are generating using photo voltaic systems. In the event that suppliers using alternative forms of generation wish to sell to the Company in the future under this Option,then Idaho Power can and will calculate a monthly charge compatible with that form ofgeneration.Until that time,we find that it is not necessary to require the Company to calculate a charge for suppliers who do not yet exist. Similarly,we find that it is not necessary to require the Company to list examples of minimum monthly charges associated with alternative generators as proposed by Staff The Company is directed to cooperate with and assist potential Option C customers in understanding the mechanisms of every aspect of the Option including the monthly charge. Regarding the veracity ofthe monthly charge itself we do not find that sufficient evidence was presented to convince us that the non-generation related costs proposed to be recovered by the charge are already being covered through other charges such as line extensiion fees as suggested by IDWR.Until we are presented with such evidence,we will assume that the charges are necessary to make the Company whole. We agree with Staffthat Item 8 ofthe “conditions ofpurchase and sale”found in Option C should be revised to more clearly exempt Option C customers from installing a second meter.To do otherwise would defeat the very purpose of a net metering option. IDWR proposes that Option C customers be allowed the choice of being billed on an annual as opposed to a monthly basis.This would mean that the customer could generate more power than it consumes in one month and use that to reduce the amount of electrical consumption that it would otherwise be billed for in another month.The Commission finds that this proposal would be unfair to other customers and the Company.Staffnotes that to allow such a procedure could require ORDERNO.26750 -10- (Z)‘0 substantial changes in the company’s billing system a result that conflicts with one of the Commission’s specifications for continuing Option C. One of the more controversial aspects of the Company’s proposal was to limit the availability of Option C to only those customers being served under Rate Schedules 1 (residential) and 7 (small commercial).We agree with the Company that because the energy purchased under Option C is limited to non-firm energy,retail rates that are designed to recover system costs allocated both to demand and energy make it impossible for the Company to compute an appropriate monthly charge utilizing a single meter that measures net energy and net demand when only non-firm energy is being supplied by the customer.In other words,running the meter backward for a customer with a demand as well as an energy meter could potentially reduce that customers demand and its subsequent bill which is inappropriate because the energy supplied by that customer is non-firm. Regarding IRU’s objection to the engineering certification requirements of Schedule 86, we believe that it is reasonable and necessary for the safety and integrity ofIdaho Power’s system to have such a requirement any time a supplier is generating onto the system.We do find,however,that the Company’s one million dollar liability insurance requirement seems excessive particularly with respect to small projects and given the other safeguards built into Schedule 86.It also appears to be the Company’s policy to waive this requirement in some cases.We find,therefore,that it would be reasonable to eliminate this requirement from Option C. ORDER IT IS HEREBY ORDERED that Idaho Power’s Application to revise its Schedule 86 is approved consistent with the modifications,terms and conditions set forth here.The Company is directed to file a tariffconforming with this Order and which will be effective three (3)business days from the date it is filed with the Commission. THIS IS A FINAL ORDER Any person interested in this Order (or in issues finally decided by this Order)or in interlocutory Orders previously issued in this Case No.IPC-E-95-15 may petition for reconsideration within twenty-one (21)days ofthe service date ofthis Order with regard to any matter decided in this Order or in interlocutory Orders previously issued in this Case No.TPC-E-95-15.Within seven (7)days after any person has petitioned for reconsideration,any other person may cross-petition for reconsideration.See Idaho Code §61-626. ORDER NO.26750 -11- C DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this...?/s.( day of Januaiy 1997. RALPH NELSON,PRESIDENT MARSHA H.SMITH,COMMISSIONR ENMS S.HAI’TSEN,COMMISSIONER ATTEST: Myrna J.Walters Commission Secretary cm/O:ipce95l5.bp ORDER NO.26750 -.12-