20161031Compliance Filing 2016 Net Metering.pdf

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HAND DELIVERY
Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
4 72 W. Washington
Boise, ID 83702
RE: COMPLIANCE FILING IN CASE NO. PAC-E-16-07
1407 W. North Temple, Suite 310
Salt Lake City, Utah 84116
ROCKY MOUNTAIN POWER'S 2016 ANNUAL NET METERING REPORT
Attention: Jean D. Jewell
Commission Secretary
Pursuant to Order No. 33511 in the above mentioned case Rocky Mountain Power hereby submits
it 2016 Annual Net Metering report.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at [phone].
v;;~
Jeffrey K. Larsen
Vice President, Regulation
Rocky Mountain Power
Annual Net Metering Report
October 31, 2016
Rocky Mountain Power ("Company") pursuant to Order No. 33511, in Case No. PAC-E-
16-12, hereby provides its annual net metering report to the Idaho Public Utilities Commission.
The report provides customer participation by generation type, nameplate capacity, total net
metering generation, and contribution to coincident peak. It compares the value of excess net
generation from net metering to alternative sources of power and summarizes the impacts of net
metering on non-net metering customers and potential impacts to power quality and reliability.
Net Metering Customers
As of September 30, 2016, Rocky Mountain Power's net metering service consisted of201
customers with a cumulative nameplate capacity of 1.3 megawatts ("MW"). The Company had
177 residential customers with 952 kilowatts ("kW") ofname plate capacity and 24 non-residential
customers with 387 kW of nameplate capacity. This table summarize net metering customer
participation and connected capacity by year from 2012 through September 2015.
Rocky Mountain Power
Idaho Cumulative Totals
Total Residential Non-Res Residential Non-Res Total
Date Customers Customers Customers Size (kW) Size (kW) Size (kW)
Dec 2012 98 82 16 339 232 571
Dec 2013 112 94 18 409 263 672
Dec 2014 138 106 22 464 356 820
Dec 2015 156 133 23 646 357 1003
Sep 2015 201 177 24 952 387 1339
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Of this connected capacity the current resource mix is: 1,065 kW solar, 255 kW is wind,
and 19 kW mixed wind and solar, as summarized in this graph.
Idaho k\,V by Resource Type
19
• 1ixed • olar • \Vind
Net Meter Customers' Reduction to Coincident Peak
The Company's 2015 coincident peak of 10,487 MW occurred on July pt at 4 p.m. MST,
Idaho's contribution to the system peak was 858 MW. Net metering customers' generation reduced
that peak by approximately 493 kW, or approximately 0.06 percent. The table below summarizes
Rocky Mountain Power's Idaho net metering customers' private generation offsets to Idaho's
contribution to the monthly system peaks.
ROCKY MOUNTAIN POWER
IDAHO NET METERING -PRIVATE GENERATION
2015 PRODUOON COINCIDENT TO PEAK AT INPUT (kW)
Month Jan-15 Feb-15 Mar-15 Apr-15 May-15 JIDl-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
Peak Date : 2 23 4 15 31 30 I 13 I I 30 14
Peak Tin: MST : 19:00 09:00 09:00 09:00 19:00 18:00 16:00 18:00 17:00 18:00 19:00 19:00
Private Generatim
Sch 00 I Solar 0 87 95 7 45 60 256 153 231 114 0 0
Sch 00 I W irxl 0 2 2 46 2 4 5 4 39 I 0 6
Sch 006 Solar 0 3 3 0 2 7 4 6 3 0 0
Sch 006 Wirxl 0 0 0 0 0 0 0 0 0 0
Sch 023 Solar 0 98 102 7 44 59 224 125 181 86 0 0
Sch 023 Wirxl 0 0 I 10 0 I 10 0 0 2
TOTAL 0 190 203 70 91 126 493 286 467 203 0 8
21 Pa g e
Net Metering Customer Demand
For the residential net metering class, demand values were based upon a load research
study of 34 sample meters. Each of these load research meters measured delivered and exported
energy on a 15 minute interval basis. The overall profile from these load research meters was
scaled to the delivered and exported energy volumes on a monthly basis. The various monthly
system and distribution coincident peaks were developed from this profile. Non-coincident peaks
were determined on a monthly basis by averaging the non-coincident peaks for each of the sample
profile meters and scaling by the overall number of customers in the population.
For Schedule 6 and Schedule 23 net metering classes, the standard profile, which includes
both net metering and non-net metering customers, was adjusted to the overall energy volume for
estimated full requirements usage of the net metering customers on a monthly basis to create full
requirements profiles. Their estimated private generation production profile was then overlaid on
top of that estimated full requirements profile to estimate delivered and exported energy on an
hourly basis.
The determination of system coincident peaks and distribution coincident peaks were based
upon energy deliveries to the customers. Non-coincident peak was based upon the maximum of
either energy delivery or energy export. Line transformers and secondary lines are allocated on
each class' annual maximum non-coincident peak which is weighted by a coincidence factor.
Using the maximum of either delivered or exported non-coincident peak for each customer
accurately reflects those customers' usage of these localized facilities.
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Net Metering Customer 2015 Generation
During 2015, Idaho's net meter customers generated 1.1 MWh of energy as summarized
below.
ROCKY MOUNTAIN POWER
IDAHO NET METERING
2015 KWH AT METER
ST A TE OF IDAHO
Month Jan-15 Feb-15 Mar-15 A(!-15 Ma~-15 Jun-15 Jul-15 Au&-15 See:15 Oct-15 Nov-15 Dec-15 Total
Private Generation
Sch 001 Solar 15,877 27,838 40,408 44,589 40,605 48,667 54,202 56,306 57,556 46,507 32,081 15,133 479,770
Sch 001 Wind 4,689 10,879 15,772 18,185 7,708 7,041 6,184 7,709 10,282 8,380 10,770 13,626 121,224
Sch 006 Solar 546 921 1,284 1,318 1,186 1,421 1,409 1,357 1,333 1,030 672 281 12,759
Sch 006 Wind 112 260 377 434 184 168 148 184 246 201 258 326 2,899
Sch 023 Solar 18,438 31,108 43,356 44,538 40,042 47,991 47,609 45,863 45,009 34,808 22,713 9,500 430,975
Sch 023 Wind 1,102 2,557 3,708 4,275 1,811 1,655 I 454 1,812 2,417 1,969 2,531 3,203 28,494
TOTAL 40,765 73,564 104,904 JJ3,340 91,537 106,944 111,005 I 13,231 116,843 92,896 69,024 42,068 1,076,120
Impacts on Customers Not Participating in Net Metering
To estimate the magnitude of cost shifting from net metering customers to non-net metering
customers, the Company performed a Class Cost of Service study ("NEM COS Study") where
customers participating in net metering were broken out into separate classes.
The test period for the NEM COS Study and the revenues and costs used in it are from the
December 2015 Results of Operation. It does not include all normalization adjustments or the
revenues required to increase earnings to the Commission authorized return.
The separate net metering classes in the NEM COS Study consist of Residential Net
Metering, Schedule 6 Net Metering, and Schedule 23 Net Metering. The table below summarizes
the results of this cost study:
Intentionally Left Blank
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RESULTS FROM THE NEM COS Study
Increase/
Annual Total Cost (Decrease) to = Percentage
Revenue of Service ROR Change from
Class $000 $000 $000 Current Revenues
Residential 50,214 46,596 (3,618) -7.21%
Residential -TOD 21 ,022 20,598 (424) -2.02%
Residential -NEM 162 189 27 16.83%
Schedule 6/35 26,751 26,044 (708) -2.65%
Schedule 6 -NEM 148 138 (10) -6.61%
Schedule 23 18,172 16,606 (1 ,566) -8.62%
Schedule 23 -NEM 87 88 2 1.74%
Other Classes 151 ,157 157,454 6,297 4.17%
Idaho Total 267,712 267,712 -0.00%
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This table shows that in contrast to other classes, residential net metering is significantly
below its cost of service and would require a 16.8 percent increase to bring it to its cost of service.
The study shows that the present under-collection of revenue relative to cost of service from
residential net metering is about $227 per customer per year. The results for the two non-residential
classes do not show as large of a departure from cost of service and are more consistent with the
rest of customers in their respective classes.
The results for residential net metering reflect the ability of these customers to offset the
full value of retail energy charges for each kWh generated. Within the rate design for residential
customers, costs that are fixed and are related to demand at the time of the Company's different
peak periods are recovered through volumetric energy charges. When residential net metering
customers receive credits that capture the full value of these energy charges, but do not fully offset
their peak demands, there is a potential for costs to be shifted to non-participating customers.
For residential net metering customers, overall average billed energy usage after being
credited for exported energy remains relatively high and participation is low compared to other
states at this time with an average of 120 residential customers participating in net metering over
the test period. Consequently the cost shifting at this time is relatively modest. However, as
discussed earlier in this report, participation levels have grown considerably in the past few years.
Also private generation system sizes have become larger on average. In 2010, the size of the
average private generation system installed was 4.22 kW. In 2015, the average private generation
system size had grown to 7.03 kW. With these trends, careful and continued monitoring of net
metering is warranted.
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Net Metering Customer Direct Assignments
The Company identified administration, engineering, and customer service/billing related
costs that are directly attributable to serving and interconnecting net metering customers. These
costs were directly assigned to the different net metering classes.
Within the Company, a department is dedicated to the administration of the various net
metering programs that the Company is responsible for delivering across the six states that it
serves. This includes the handling and processing of interconnection applications. The overall
expense of this department was multiplied by the proportion of workload that this department
spends on the net metering program in Idaho. There were no Schedule 6 and 23 interconnect
applications during 2015, so the administration costs solely represent residential applications.
Engineers review the technical details of the interconnection applications to ensure that
private generation systems can safely and reliably interconnect to the Company's distribution
system. To develop the engineering costs related to the net metering program, the estimated time
it takes to review an application was multiplied by the fully loaded hourly cost of a field engineer
which was then multiplied by the number of applications in 2015.
Customer service and billing costs related to the net metering program were sorted into
three categories:
Phone calls -This includes customer inquiries and requests related to the net metering
program.
Initial setup -This includes requesting a meter exchange and setting up customers to be on
the net metering program in the Company's billing system.
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Ongoing support -This includes back office work necessary to correctly bill customers
participating in the net metering program.
Developing the costs related to Phone calls, Initial setup, and Ongoing Support required
getting estimates from Company personnel who are involved in the day-to-day operations at the
call centers of the total time spent on each of these activities and multiplying by the fully loaded
hourly cost for a call center agent. To determine the proportions of these costs that are related to
the different customer classes, the overall cost estimates for each activity were spread based upon
an appropriate driver for those costs. Since phone calls were primarily for customers who were
considering participation in the net metering program, this cost was allocated on the number of
applications in the period. Initial setup cost was allocated based upon the number of
interconnections during the period. Since ongoing support is related to the number of bills, this
cost was allocated by the average bills during the period.
Net Metering Value for Excess Generation
In the NEM COS Study, the net metering classes are allocated energy-related costs for the
energy that is delivered to them and receive credit to their cost of service for the excess generation
that they export for use by other customers.
Net metering customers use the system in a way that is fundamentally different than other
customers. Unlike other customers who consume only energy that is delivered to them from the
energy grid, net metering customers may at different times be receiving energy from the energy
grid, consuming their own private generation onsite, or exporting the excess energy from their
private generation to the energy grid. Like any other customer, the allocation of the Company's
costs is based upon the volumes of energy and the magnitude of demands that the Company
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delivers to net metering customers. Inasmuch as net metering customers consume their own private
generation onsite, the profile and overall quantity of energy that is delivered to them is reduced
and the allocation of costs to net metering customers is also consequently reduced. The concept of
net energy is a billing related construct that is used for net metering. Net energy does not reflect a
net metering customer's physical time-based relationship with the energy grid. Even though a net
metering customer may produce as much total energy as that customer consumes over a period of
time, in real time that customer still relies upon the energy grid continuously to both import and
export energy. The NEM Breakout COS Study appropriately assigns costs to net metering
customers based upon their usage of the Company's system.
For the energy that net metering customers export to the energy grid from their private
generation systems, a credit for their exported energy is assigned to them based upon the currently
effective avoided costs deflated to the 2015 level. The credits applied for exported energy are
increased to reflect avoided line losses. In total the value of the energy credits for all NEM classes
is $13,394.
The excess credits are directly assigned to each NEM class. An offsetting cost for the
excess credits is allocated to all classes based upon Factor 30 -Energy. Both the excess credits
and the offsetting costs are functionalized to the Production function.
The excess credits in the NEM Breakout COS reflect a fair value of the energy that net
metering customers export to the energy grid for other customers to use. All customers, including
net metering customers, benefit from this excess generation in the form of reduced net power cost.
It is fair that all customers receive an increased allocation of cost proportional to that benefit to
offset the value assigned to the NEM classes for their exported energy. With this treatment of
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excess energy, customers are economically indifferent between whether they receive a kilowatt
hour from their net metering customer's private generation system or from some other source.
Impact of Net Metering on the System
Based on the Company's analysis, residential rooftop solar generation does not reduce the
peak demand experienced by the electric grid to a degree that could warrant a reduction in
infrastructure but may actually increase the requirements for infrastructure at the local level.
Furthermore, residential net metered customers use the electric grid at a level higher than similar,
non-participating residential customers. The total amount of energy transferred to and from the
electric grid by net metered customers exceeds the amount of energy delivered to non-participating
residential customers. This is energy that must be stored, accounted for and managed by the
Company on the customer's behalf. In addition, the Company incurs costs associated with
applications for rooftop solar generation and their interconnection. Net metering customers rely
on the grid 24 hours per day except for two instantaneous points when the direction of current flow
changes from energy delivered to energy received.
Rocky Mountain Power currently has 201 net metering customers in Idaho with 1,339 kW
connected load and has not experienced power quality or reliability issues as a result of their
interconnection to the system. The Company continuously monitors system integrity and industry
trends on this subject and will advise the Commission if any items need to be addressed.
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