20160229Application.pdf

ROCKY MOUNTAIN
POWER
A IXVtSrOil OFmOHOORP
February 29,2016
Jeffrey K. Larsen
Vice President, Regulation
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VIA OVERNIGHT DELIVERY
Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472W. Washington
Boise,lD 83702
RE: CASE NO. PAC-E-16-07
IN THE MATTER OF THE APPLICATION OF ROCKY MOT]NTAIN POWER
REQUESTING AUTHORITY TO MODIFY ELECTRIC SERVICE SCHEDULE 135 -
NET METERING SERYICE
Attention: Jean D. Jewell
Commission Secretary
Please find enclosed for filing an original and seven copies of Rocky Mountain Power's
Application in the above-referenced matter.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
\"W*tY-.)"ra'*l cxw
Yvonne R. Hogle (lSB# 8930)
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone: [phone]
Email : wonne.hoeel@nacifi com.com
Attorneyfor Roclry Mountain Power
APPLICATION OF
ROCKY MOUNTAIN POWER
REC[!VED
2B16 f [B 29 Al'1 l0: 20
r :T irr,r, i, iiiili*i8r,o*
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
rN THE MATTER OF THE APPLTCATTON ) CASE NO. PAC-E-16-07
oF ROCKY MOUNTATN POWER )
REQUESTING AUTHORITY TO MODIFY ) APPLICATION OF
ELECTRTC SERyTCE SCHEDULE 13s - ) ROCKY MOUNTATN POWER
NET METERING SERVICE )
COMES NOW, Rocky Mountain Power, a division of PacifiCorp (the "Company")
pursuant to Idaho Code $$ 6l-502,61-622,61-623, and RP 52,121,125 hereby respectfully
submits this Application to the Idaho Public Utilities Commission ("Commission") for
authority to modify Electric Service Schedule No. 135 - Net Metering Service, to adjust the
participation cap from 714 kilowatts to 2,000 kilowatts.
In support of this Application, Rocky Mountain Power states as follows:
l. Rocky Mountain Power is authorized to and is doing business as an electrical
corporation in the state of Idaho. The Company is an electrical corporation pursuant to ldaho
Code $ 6l-119, providing retail electric service to approximately 73,000 customers in the
state and is subject to the jurisdiction of the Commission. Rocky Mountain Power is a public
utility in the state of Idaho pursuant to Idaho Code $g 6l-l l9 and 6l-129.
Page I
2. This Application is filed pursuant to Idaho Code $$ 6l-301 ,61-303,61-307,
and 6l-622. In particular, Idaho Code $ 6l-622 empowers the Commission to determine the
propriety of proposed rate schedules, $ 6l-307 requires Commission approval prior to any
changes in rates, and $ 61-301 requires Idaho retail electric rates to bejust and reasonable.
BACKGROUND
3. Pursuant to the Commission's Orderl on June 20,2003, the Company began
offering net metering service to its Idaho customers through Electric Service Schedule No.
135 - Net Metering Service, ("Schedule 135"), with participation capped at7l4 kilowatts, or
one-tenth of one percent of the Company's 2002 retail peak demand.
4. Net metering customers who install distributed generation facilities can offset
part or all of their energy requirements and feed excess energy (i.e., energy the customer's
facility generates in excess of its needs at that moment) back into the grid. During periods
when the customer's generation is not operating or not producing sufficient energy to meet
the customer's usage, energy is delivered to the customer from Company facilities.
5. During each billing period, a customer's excess generation is netted against
the customer's kilowaff-hour usage taken from the Company. If the energy generated by the
customer and delivered to the Company exceeds the energy supplied by the Company to the
customer during the billing period, the customer is billed for the appropriate power and other
non-energy charges and compensated for any net energy through a financial credit, based on
the applicable standard service tariff.
rOrderNo.29260.
APPLICATION OF
ROCKY MOUNTAIN POWER
Page2
6. By December 31,2007 the Company only had two net metering customers
with approximately 3 kilowatts of generation. Participation increased to l6 customers by the
end of 2008 with 4l kilowatts connected, 70 customers by the end of 2010 with 250
kilowatts, 98 customers by the end of 2012 with approximately 575 kilowatts of generation
capacity. By the end of 2013, ll3 net metering customers with a total of 677 kilowatts were
interconnected to the Company's system. As of December 31,2015 the Company had l6l
customers with 1,049 kW of interconnected load.
7. Since Schedule No. 135 was implemented, the Company has monitored its net
metering program, anticipating the need to file for modifications to the net metering service
tariff. During that time the Company also followed Idaho Power's net metering case and the
Commission's final order therein.2 The Company also monitored distributed generation
issues in other states and the impact on all customers in order to ensure fairness when
establishing rates and policies for net metering customers. Based on the Commission's ruling
in Order No. 32846, in ldaho Power's case, the Company is not proposing modifications to
rates in this Application but will address those issues in its next general rate case.
REPORT
8. In Order No. 292603 the Commission found:
"the proposed 714 kW cap is a reasonable initial capfor PacifiCorp's net
metering program. We olso Jind it reasonable however; that the cumulative
capacity limit be reviewed afier that limit is reached. As part of that review,
we expect a report from the Company regarding the required level of
subsidization by non-participants. The Commission recognizes that the full
cost of the program we opprove today may not be borne only by
participants... As part of its report to the Commission, the Company should
2lPc-g-tz-zl, order No. 32846-
3 Case No. PAC-E-03-04.
APPLICATION OF
ROCKY MOUNTAIN POWER
Page 3
provide the differential between the net metering purchase price it pays at
retail sales rates and the wholesale cost of alternative power supplies. We
also expect further information from the Company regarding cost shifting and
the Company's ability to recover customer costs from program participants, "
9. As ordered, the Company has prepared an analysis showing the difference
between the purchase prices paid to net metering customers at the applicable electric service
tariffs and the wholesale cost of alternative power supplies. To determine the net metering
purchase price paid by the Company at current retail rates, a calculation of the energy
charges from monthly bills of customers with net metering service that had excess credits
was subtracted from a calculation of energy charges for the same monthly bills without
excess credits. To determine the wholesale cost of alternative power supplies, excess energy
from net metering customers was multiplied by average monthly Mid-Columbia ("Mid-C")
wholesale power prices. The table below summarizes the Company's analysis showing the
customer impact from excess generation; it does not reflect the total generation from net
metering customers.
Rocky Mountein Pourr- Stete of Idrho - Thlve Months [,ndiry Decenrbcr3l,2015
Differcntirl be tncen the Net Metering Punhrse Price rnd Whohsrlc Cost of Aftenative Powr Suflies(F) (G) (H) (D(q
Rrte
Schedule
Eneryy
Cherges
nithout Excess
C}rdib
Energy
Chrqes with
Excess Crtdib
Cost of
Excess
Crcdib
Vrlue of
Excess
Crtdits
{Mid-CJ
Net Cost/
(Bcneft) ot
Excess
Crcdib
Net Cost/(Benefit)
of Excess Crcdib as
a Penentage ofNet
Fl,nepv Chrpes
I $llt.5l($94, I 8i $ r 7,331 $3,81($ 13.51r 14.3%
36 $83.07'$72.74($10,331 $2, r 6($8.171 11.2o/o
6 $74.87i $74,64t $22t $12{$10(0.1%
23 $ 101.99'$85,44($ 16,s5,$4,53:$ 12,02:74.1o/o
Total $371.461 $327.01t $44.44($10,63{$33.80{10.3%
f,xcess
f,treryy
Output
&wh)
Averrge
hice Paid
fnr ['vanas
lvcrrge hice o
Excess Cndib
fltIi&r)Credib
155.955 $0.1111 $0.024s
90.365 $0. I 143 $0.0239
s.42i $0.0420 $0,0236
178.1 0t $0.0930 $0.0255
429.848 $0. r034 $0.0247
10. Column A in the table shows the energy charges net metering customers
would have been assessed without the reduction to their bills for the excess energy they
supplied to the Company. These values do not consider any reduction in energy charges
APPLICATION OF
ROCKY MOUNTAIN POWER
Page 4
related to the portion of the net metering customers' generation that is consumed onsite.
Column B shows the energy charges for net metering customers net of the reduction to their
bills for energy that they supplied to the Company. Column C is the cost paid by the
Company, at the respective retail rates, for the excess energy supplied by the net metering
customers. Column D shows the Mid-C wholesale market power value, at average monthly
prices, of the excess energy that net metering customers supplied to the Company. Column E
is the incremental cost paid for the excess energy supplied to the Company. Column F
summarizes, by rate schedule, what percentage the incremental cost paid by the Company,
above Mid-C values, for the excess energy represents compared to the net costs the customer
paid for the energy supplied by the Company. Column G is the amount of excess energy that
net metering customers supplied to the Company. Column H summarizes by rate schedule
the average retail rate paid for the excess energy and Column I represents the average Mid-C
market price.
I l. The table summarizes the amount paid to net metering customers for excess
generation based on their applicable tariff rates compared to the energy's value at Mid-C.
The Company paid $44,446 for excess net metering generation that had a corresponding
energy value of $10,638 at Mid-C, or approximately 418 percent higherthan marketvalue.
Another comparator is the average price per kilowatt-hour paid. On average, the Company
paid 10.34 cents compared to an average Mid-C value of 2.47 cents.
12. The Company's compensation for excess energy includes fixed costs that are
not avoidable due to net metering generation, thus resulting in cost shifting to other
customers or the Company for recovery of those fixed costs. Since a net metering customer's
generation alters its service profile but may not reduce peak demand, rate designs that
APPLICATION OF
ROCKY MOUNTAIN POWER
Page 5
recover a significant portion of fixed costs (e.g., demand and customer related) through
energy charges, such as Schedules l, 36, and 23, are failing to recover the majority of the
fixed costs or shifting fixed cost recovery to other customers.
13. The figures below show the split between fixed charges and energy charges
for residential customers based on the cost of service study from the last general rate case.a
While 61.3 percent of the costs to serve residential customers are fixed costs, only 7.8
percent of those costs are recovered through fixed charges. Therefore, approximately 87
percent of the fixed cost recovery is subject to the customer's kilowatt-hour usage. The
Company intends to prepare a comprehensive cost of service study for its next general rate
case in order to accurately quantiff and address cost shifting related to net metering.
rFircd Chrgcs rEncrgy Chrrgcs
Rcridcotld Cort of Scrvlce
. I)crmnd- md Ol3bmr-Rclatcd
Coets
.En qy-Ifddcdccts
a Case No. PAC-E-I1-12.
APPLICATION OF
ROCKY MOUNTAIN POWER
Page 6
REOUEST TO MODIFY THE NET METERING CAP
14. The Company respectfully requests authority to increase, rather than remove,
the net metering cap in Electric Service Schedule No. 135 - Net Metering Service, fromTl4
kilowatts to 2,000 kilowatts. It's the Company's position that the Commission did not intend
the cap to be a hard cap. [t's also the Company's position that the existing cap has not had
any kind of chilling effect on participation by interested customers. Instead the cap was
implemented to serve as a check point to report the impacts of net metering to the
Commission.
15. The Company's last general rate case was filed in 20ll and it has
subsequently negotiated two consecutive two-year rate plans. The most recent case modified
terms and the base net power costs tracked in the energy cost adjustment mechanism. The
Company agreed as part of that stipulation to stay out of a general rate case until the date
upon which an application for a general rate case would produce new rates effective no
earlier than January 1,2018. [f net metering rate design issues are not addressed until such
date, the Company projects ldaho's net metering participation will have reached
approximately 1,800 kilowatts of participation. To provide for ample growth and recognizing
that the cap is not a hard ceiling for participation, the Company respectfully requests the
Commission authorize a new Schedule 135 cap of 2,000 kilowatts.
16. The Company provides clean and legislative copies of Electric Service
Schedule No. 135 - Net metering Service as an Attachment to this Application. Schedule 135
has been modified to increase the original 714 kilowatt cap to 2,000 kilowatts with a request
for a May 1,2016 effective date.
APPLICATION OF
ROCKY MOUNTAIN POWER
17. Pursuant to Commission Order No. 32846, the Company is not proposing any
rate design modifications in this Application but will address those issues in its next general
rate case. tt is the Company's position that it is important to align rate design with the cost of
service within each customer class, as recognized by Commission Staff in its comments
supporting implementation of net metering for Rocky Mountain Power:s
"Staff believes the proposal to credit customer generators at full retail rates will pay
customers more than the actual value of the generation. Net metering allows
PacifiCorp to ovoid some generation costs and perhops some transmission costs, but
few, if any, other costs. Under the proposed new tarffi customer generotion is not
credited bosed on the woided cost of generation and transmission, but at the full
retail rate. For the Commission to accept a net metering tariff where customer
generation is uedited at full retoil rates, it must be willing to dccept the fact that
PacifiCorp may not recover its full costs of providing service from net metering
customers. Those costs that are uncollected must either come from PacifiCorp
through its shareholders or from other customers collectively. Initially, the subsidy
for net metering customers is paid by PacifiCorp through shareholders. After a
general rate cose, the subsidy of net metering customers would presumably be shifted
to the general body ofratepayers."
18. As anticipated by the Commission in its order establishing the net metering
cap and confirmed by the Company's report, paying the full retail rate to net metering
customers creates a situation where the Company and non-participating customers are
subsidizing net metering customers and sending an uneconomic price signal to customers
regarding the value of distributed generation. While the subsidization may be relatively
minor at this time as a percentage of total Idaho retail revenues the Company believes the
issue should be addressed as soon as possible to minimize potential impacts on customers
and set appropriate expectations. For this and other reasons, it is important to maintain a cap
as a future check point to continue to report customer impacts due to net metering.
5 Case No. PAC-E-03-04,
APPLICATION OF
ROCKY MOUNTAIN POWER
Page 8
19. The Company will continue to monitor the impact of customer generation on
its system operations. With the increased interest in distributed generation, demand side
management, net metering and the evolving utility environment, it becomes increasingly
important to align rate design with the cost of providing service to each customer class.
SERVICE OF PLEADINGS
20. Communications regarding this Application should be addressed to:
Ted Weston
Rocky Mountain Power
1407 W. North Temple, Suite 330
salt Lake city, utah 84116
Telephone : (80 l) 220 -29 63
Fax: [phone]
Email : [e-mail]
Yvonne R. Hogle
Rocky Mountain Power
Assistant General Counsel
1407 W. North Temple, Suite 320
Salt Lake City UT 84116
Telephone: [phone]
Facsimile: [phone]
E-mail : wonne.hogle@Aacifi corp.com
In addition, the Company respectfully requests that all data requests regarding this
matter be addressed to one or more of the following:
By e-mail (prefened):
By regular mail:
APPLICATION OF
ROCKY MOUNTAIN POWER
datarequest@oacifi com.com
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
Page 9
MODIFIED PROCEDURE
21. It is Rocky Mountain Power's position that consideration of the proposed
modifications contained herein does not require an evidentiary proceeding and, accordingly,
Rocky Mountain Power requests that that this Application be processed under RP 201 et.
seq., allowing for consideration of these issues under Modified Procedure, by written
submissions rather than by an evidentiary hearing. If, however, the Commission determines
that an evidentiary hearing on this matter is necessary, the Company stands ready to present
testimony in support of this Application.
CONCLUSION
WHEREFORE, Rocky Mountain Power respectfully requests that the Commission
issue an order: (l) authorizing this Application to be processed under Modified Procedure;
and (2) increasing the cap from 714 kilowatts to 2,000 kilowatts for Electric Service
Schedule No. 135 - Net Metering Service, with modifications effective May 1, 2016.
DATED this 29th day of February,2016.
Respectfully submitted,
APPLICATION OF
ROCKY MOUNTATN POWER
Page l0
V,ROCKYMOUNTAINYpolnee\ r uvrson or PAoFrconP
I.P.U.C. No. 1
First Revision of Sheet No. 135.1
Canceling Original Sheet No. 135.1
ROCKY MOUNTAIN POWER
ELECTRIC SERVICE SCIIEDULE NO. 135
STATE OF IDAHO
Net Metering Service
AVAILABILITY: At any point on the Company's interconnected system.
APPLICATION: On a first-come, first-served basis to any customer that owns and operates an
Eligible Generating Plant that is located on the Customer's premises, on the Customer's side of the Point of
Delivery, is interconnected and operates in parallel with the Company's existing transmission and
distribution facilities and is intended primarily to offset part or all of the Customer's own electrical
requirements. This provision shall be available until the time that the total rated generating capacity of net
metering systems connected under this schedule equals 2,000 kilowatts. No single Customer may connect
more than 5 percent of the cumulative generation nameplate capacity connected under this schedule.
DEF'INITIONS:
Net Metering: The difference between the electricity supplied by the Company and the electricity
generated by an eligible Customer and fed back to the electric grid over the applicable billing period.
Eligible Generating Plant: A facility that uses energy derived from the sun, wind, water, biomass
or fuel cell technolory to generate electricity. An Eligible Generating Plant may not have a generating
capacity of more than twenty-five (25) kilowatts for customers taking service on Schedules 1, 36, 23 or 23A
or one hundred (100) kilowatts for all other customers. To quali$, a Customer must maintain its retail
electric service account for the loads served at the Point of Delivery adjacent to the Generation
Interconnection Point as active and in good standing.
Generation Interconnection Point: The point where the conductors installed to allow receipt of
Customer's generation connect to the Company's facilities adjacent to the Customer's Point of Delivery.
MONTHLY BILL: The Electric Service Charge shall be computed in accordance with the charges
for the Monthly Bill in the applicable standard service tariff subject to the following Special Conditions.
(continued)
Submitted Under Case No. PAC-E-I6-07
FILED: February 29,2016 EFFECTM: May 1,2016
ROCKY MOUNTAIN
PolA'ER
a oMgrd{ oF PActHconP
I.P.U.C. No. 1
First Revision of Sheet No. 135.1
Canceline Original Sheet No. 135.1
ROCKY MOUNTAIN POWER
ELECTRIC SERVICE SCHEDULE NO.135
STATE OF IDAHO
Net Metering Service
AVAILABILITY: At any point on the Company's interconnected system.
APPLICATION: On a first-come, first-served basis to any customer that owns and operates an
Eligible Generating Plant that is located on the Customer's premises, on the Customer's side of the Point of
Delivery, is interconnected and operates in parallel with the Company's existing transmission and
distribution facilities and is intended primarily to offset part or all of the Customer's own electrical
requirements. This provision shall be available until the time that the total rated generating capacity of net
meteringsyStemSconnectedunderthisscheduleequals41+MKilowatts@
. No single Customer may connect more
than 52e percent ofthe cumulative generation nameplate capacity connected under this schedule.
DEFINITIONS:
Net Metering: The difference between the electricity supplied by the Company and the electricity
generated by an eligible Customer and fed back to the electric grid over the applicable billing period.
Eligible Generating Plant: A facility that uses enerry derived from the sun, wind, water, biomass
or fuel cell technolory to generate electricity. An Eligible Generating Plant may not have a generating
capacity of more than twenty-five (25) kilowatts for customers taking service on Schedules l, 36, 23 or 23A
or one hundred (100) kilowatts for all other customers. To qualiff, a Customer must maintain its retail
electric service account for the loads served at the Point of Delivery adjacent to the Generation
Interconnection Point as active and in good standing.
Generation Interconnection Point: The point where the conductors installed to allow receipt of
Customer's generation connect to the Company's facilities adjacent to the Customer's Point of Delivery.
MONTHLY BILL: The Electric Service Charge shall be computed in accordance with the charges
for the Monthly Bill in the applicable standard service tariff subject to the following Special Conditions.
(continued)
Submitted Under A.Crr€€+,€j#ercase No. OffiPAC-E -16-07
FILED:EFFECTIVE: