20030505Comments.pdf

William M. Eddie (ISB #5800)
ADVOCATES FOR THE WEST
O. Box 1612
Boise, ID 83701
[phone]
fax: [phone]
billeddieC0nnci.net
RECEIVED mF!LED
2003 HAY -2 PM 4: 54
I~),h:) PUHLiC
UTILITIES COi'H1ISSION
Express mail address:
1320 W. Franklin St.
Boise, ID 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION
OF NW ENERGY COALITION AND
RENEWABLE NORTHWEST PROJECT
TO ESTABLISH NET METERING
SCHEDULES FOR P ACIFICORP.
Case No. P AC-03-
COMMENTS OF NW ENERGY
COALITION, RENEWABLE
NORTHWEST PROJECT, and
NWSEED
Petitioners NW Energy Coalition and Renewable Northwest Project hereby file
these comments on PacifiCorp s proposed Net Metering Schedule 135. Also joining in
these comments is Northwest Sustainable Energy for Economic Development
(NWSEED), which supports and develops creative programs, policies , and financing
approaches to build rural economies and meet the region s power needs through
affordable, distributed "green" generation. Collectively, these groups are referred
herein as the "Renewable Energy Advocates" or "Advocates.
In general, the Renewable Energy Advocates are supportive of the Company
proposal, and request that the PUC adopt the proposal with the suggested changes set
forth below. Specifically, the Advocates:
-- Support the relative system size limitations of25 kWand 100 kW as proposed
although the upper limit will exclude some large customers from participating in the
program at a meaningful level;
COMMENTS OF RENEWABLE ENERGY ADVOCATES --
-- Support the proposal to credit excess generation for smaller customers at the
customer s retail rate; and
-- Support the incorporation of established standards for interconnection of net
metered generation systems.
However, the Renewable Energy Advocates request that the Commission modify
the Company s proposal to better encourage the installation of clean, distributed
generation as set forth below.
THE COMMISSION SHOULD STRONGLY ENCOURAGE NET
METERING BY LARGER CUSTOMERS
We support the Company s proposed system capacity limit of 100kW for larger
customers, although it is important to acknowledge that this size limitation will prevent
some large customers from meaningfully offsetting their electric consumption through
net metering.
Our primary concern is that the Company s proposed billing methodology will
discourage irrigation customers from net metering. PacifiCorp has proposed that large
customers be able to fully offset their monthly energy usage on a kilowatt-hour for
kilowatt-hour basis, but that any excess energy generated by the customer be purchased
or credited monthly at 85% ofthe market price for non-finn energy ("non-finn avoided
cost rate
A. The Commission should create an annual "true-up" period, or provide
an indefinite carryover without opportunity for payment.
As the Renewable Energy Advocates stated in comments to the Commission on
Idaho Power Company s proposed amendments to Schedule 84 (IPC-02-4), we believe
it is more appropriate at this time to strongly encourage the installation of net metered
COMMENTS OF RENEWABLE ENERGY ADVOCATES -- 2
generation systems by allowing customers to "bank" generated kilowatt-hours (or the
financial equivalent at retail rate) on an annual or indefinite basis. Specifically,
Renewable Energy Advocates propose that any excess kilowatt-hours of generation be
credited to the following month at the customer s retail rate, and that such credits be
carried forward until the end of an annual period, at which time the Company could
purchase any remaining excess generation at the non-finn avoided cost rate.
Essentially, we recommend that the "true up" of excess generation occur annually
rather than monthly. Iowa currently provides for this type of net metering billing: excess
kilowatt-hours are credited to the following month and carried over until the end of the
annual period, at which point any excess generation is purchased at avoided cost. Iowa
Admin. Code ~ 199-15.11(5). Numerous states, including Washington (where PacifiCorp
also operates), also provide for excess generation to be carried over from month-to-month
until the end of an annual period. In Washington s case, excess credits simply expire at
the end of the annual period). RCW 80.60. In the alternative, excess generation credits
could be carried over indefinitely, without opportunity for customers to receive payment
for excess generation.
We believe any risk of customers over-sizing their facilities is slight, given that
net metering will only be available to customers attempting to offset all or part of their
energy usage.If excess generation credits are lost at the end of the year or carried over
indefinitely without opportunity for cash payment, a customer s only incentive is to offset
their own consumption and reduce their power bills. See Proposed Original Sheet 135.
There are strong benefits of distributed generation, which could be better realized
through strong encouragement of net metering. These include: (1) increased system
COMMENTS OF RENEWABLE ENERGY ADVOCATES -- 3
reliability, (2) better diversification of generation resources, and (3) environmental
benefits of clean energy.
According to the Department of Energy, distributed generation such as net
metering has the following "consumer-side" and "grid-side" benefits:
Consumer-Side Benefits
Better power reliability and quality
Lower energy costs
More choice in energy supply options
Greater predictability of energy costs (lower financial risk) with
renewable energy systems
Energy and load management
Combined heat and power capabilities
Environmental benefits including cleaner, quieter operation , and
reduced emissions
Faster response to new power demands - as capacity additions can be
made more quickly
Grid-Side Benefits
Reduced energy losses in transmission lines
Reduced upstream congestion on transmission lines
Reduced or deferred infrastructure (line and substation) upgrades
Optimal utilization of existing grid assets including potential to free
up transmission assets for increased wheeling capacity
Less capital tied up in unproductive assets - as the modular nature of
distributed generators means capacity additions and reductions can be
made in small increments , closely matched with demand , instead of
constructing central power plants sized to meet estimated future
(rather than current) demand
Improved grid reliability
Higher energy conversion efficiencies than central generation
Faster permitting than transmission line upgrades
Ancillary benefits including voltage support and stability,
contingency reserves, and black start capability
See EREN
, "
Major Potential Benefits of (Distributed Energy Resources)";
http://www.eren.doe.gov/der/potential benefits.htmi.
COMMENTS OF RENEWABLE ENERGY ADVOCATES -- 4
Renewable Energy Advocates believe that net metering and other fonns of
distributed generation should be strongly encouraged now to achieve the customer and
utility benefits noted above.
All systems under 25 kW should be treated identically
As an alternative to the system set forth above, excess generation from all systems
smaller than 25 kW should be credited at retail rate, regardless of customer class. Under
the Company s proposal, a small customer and a large customer could each install
identical 10 kW wind turbines, yet excess generation would be treated differently
between the two. The smaller customer would be credited at retail rate for excess
generation, but the larger customer would be credited at the non-finn avoided cost rate.
This disparity makes little sense, and will likely discourage larger customers (particularly
irrigation customers) from net metering at more modest scales.
By treating all systems less than 25 kW identically, all customers installing
similarly-sized systems would be on a level playing field.
II.THE PROPOSED CUMULATIVE CAP IS TOO LOW
The Company s proposed cumulative capacity limit of714 kW is quite low, and
could be reached with only a handful of participating larger customers, potentially
limiting the participation of small customers. A cumulative limit of 0.1 % of peak load is
a commonly used figure around the industry - and for many utility territories will allow
significant growth of net metering. Indeed, for Idaho Power s territory, this limit
calculated out to some 2.9 megawatts of potential net metering installations.
But the Renewable Energy Advocates are concerned that it the proposed limit
may arbitrarily cut-off the availability of the program in this case. The Commission
COMMENTS OF RENEWABLE ENERGY ADVOCATES -- 5
should size the cumulative capacity limit so that, when the limit is reach, a significant
amount of infonnation will be available to infonn potential changes to net metering
protocols going forward.
As an alternative to simply choosing a higher limit for PacifiCorp, the
Commission should provide that net metering shall continue beyond this limit, but that
the Company may petition the Commission to modify or discontinue its availability after
the limit is reached.
III. CREDITS SHOULD BE CARRIED OVER OR PAID AT THE
CUSTOMER'S OPTION
The Company appears to propose that net metered customers be issued a check
each month to pay for the customer s excess generation from the previous month. We are
concerned this may needlessly increase administrative costs. First, as the proposed tariff
indicates, net metering systems are "intended primarily to offset part or all of the
Customer s own electrical requirements." Proposed Original Sheet 135.1. An
appropriately-sized system generally will not result in large amounts of excess generation
(although a net metered irrigation customer may create more excess generation in the
winter time, and purchase more power in the summer). The Company may find itself
issuing numerous checks for only a few dollars - an unnecessary administrative cost.
It would make more sense to carryover the financial credit to the next billing
cycle. The Company could issue checks for excess generation credits upon request
rather than as a matter of course. Even if a customer did generate substantial excess
kilowatt-hours during a billing cycle, it should not make a difference to the Company
whether that credit is paid by check or carried-over to the next billing cycle.
COMMENTS OF RENEW ABLE ENERGY ADVOCATES -- 6
CONCLUSION
The Renewable Energy Advocates request that the Commission approve
PacifiCorp s Proposed Schedule 135 , but with the following changes:
All excess generation should be credited at retail rate, with an annual
true-up," or indefinite carryovers with no opportunity for payment to discourage
customers from over-sizing systems.
In the alternative, all systems under 25 kW in size, regardless of customer
class, should be billed as the Company proposes for the classes of smaller customers.
Net metering should continue beyond the 714 kW cumulative capacity
limit, provided that the Company could petition the Commission to end or modify its
availability after that limit is reached.
Credits for excess generation should be carried over to the next billing
cycle, or paid at the customer s request.
Dated: May 2, 2003 Respectfully submitted
William M. Eddie
Advocates for the West
On behalf of:
NW Energy Coalition
Renewable Northwest Project
NWSEED
COMMENTS OF RENEWABLE ENERGY ADVOCATES -- 7
CERTIFICATE OF SERVICE
I hereby certify that on this 2nd day of May 2003, I caused true and correct copies
of the foregoing COMMENTS to be served on the persons listed below via the method of
service noted:
Via Hand Delivery
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington St.
Boise, ID 83702-5983
Via U.S. Mail
John Erikkson
Stoel Rives
201 South Main St., # 1100
Salt Lake City, UT 84111-4904
Bob Lively
PacifiCorp
201 S. Main St., Suite 2300
Salt Lake City, UT 84140
William M. Eddie
COMMENTS OF RENEW ABLE ENERGY ADVOCATES -- 8