20181031Compliance Filing 2018 Net Metering.pdf

Y ROCKY MOUNTAIN
HP,Iy.E^.n"-.
RECEIVED
?ili$ OCI 3 t Alt g: S t
1407 W. North Temple, Suite 330
Salt Lake City, Utah 84116
(-
SSIONOctober 31,2018
VA OVERNIGHT DELIVERY
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise,ID 83702
RE: COMPLIANCE FILING IN CASE NO. PAC-E-16-07
ROCKY MOUNTAIN POWER'S 2OI8 AI\NUAL NET METERING REPORT
Attention: Diane Hanian
Commission Secretary
Pursuant to Order No. 3351 I in the above referenced case, Rocky Mountain Power hereby submits
its 2018 Annual Net Metering report.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at [phone]
Very truly yours,
Vice President, Regulation
Rocky Mountain Power's
Annual Net Metering Report
October 31, 2018
Rocky Mountain Power ("Company"), pursuant to Order No. 33511,t hereby provides the
2018 Net Metering report to the Idaho Public Utilities Commission. The report provides customer
participation by resource type, nameplate capacity, total net metering generation, and contribution
to coincident peak. The Net Metering report 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. The Company has witnessed rapid growth in its net metering service in recent
years and has identified quantifiable cost shifts occurring between its residential and small general
service net metering customers and standard service customers.
Net Metering Customer Participation
As of September 30, 2018, net metering participation in Rocky Mountain Power's Idaho
service territory consisted of 592 customers with a cumulative nameplate capacity of
approximately 4.2 megawatts ("MW"), representing a 101 percent increase in the number of
customers and I l3 percent increase in installed capacity since the 2017 Net Metering report. The
Company has 560 residential customers with 3,680 kilowatts ("kW") of combined name-plate
capacity and 32 non-residential customers with 550 kW of combined name-plate capacity. The
Company's net metering customer participation and connected capacity by year from December
2012through September 2018 is summarized in the table below.
1 Case No. PAC-E-16-12.
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Date
Total
Customers
Rocky Mountain Power
Idaho Cumulative Totals
Residential Non-Res Residential
Customers Customers Size (kW)
Non-Res
Siza (kW)
Totalqire (<UD
Dec2Ol2
Dec 2O13
Dec2Ol4
Dec 2O15
Sep 2Ol6
Sep 2O17
Sep 2O18
339
409
464
646
952
1584
3680
571
672
820
1003
1339
1980
4230
98
tt2
138
156
201
294
592
82
94
106
133
177
269
s60
16
18
22
23
24
25
32
232
263
356
357
387
396
550
Participation in the net metering program has increased 604 percent since 2012 with
acceleration ofthe annual growth each successive year; most ofthis growth is occurring in installed
solar. The resource mix of the current connected capacity is 3,891 kW solar, 282 kW of wind, 34
kW Solar with battery, and23 kW mixed wind and solar, as summarized in the following graph.
Idaho kW b-v Resource T""-pe
282
. Nlixed . Solu r \[/iud r Solal & Banery
Net Meter Customers' Reduction to Coincident Peak
The Company's 2017 coincident peak of 10,334 MW occurred on August lst at 6 p.m.
MST; Idaho's contribution to the system peak was 593 MW, after accounting for irrigation load
control curtailment. Net metering customers' on-site generation reduced that peak by
approximately 437 kW, or approximately 0.07 percent. The following table summarizes net
2lP age
34 23
metering customers' private generation reduction to Idaho's contribution to Rocky Mountain
Power's monthly system coincident peaks.
Month : Jan-17
PeakDrtc : 6
PcakTime MSl 09:00
PACIFICORP ELECTRIC OP ERATIONS
20 I 7 MERG ED COMPAT{Y COTNCTDENT LOADS AT Ir\PUT(kW
PRIVATE GENERATION - STATE OF IDAHO
FeblT Mrr-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 ScplT163302661520:00 09:00 09:00 18:00 18:00 18:00 18:00 18:00
Oct-17
3l
09:00
Nov-l7 Dec-l771219:00 19:00
Privrte Gcncration
0
0
0
23
0
331
I
78
3
I
340
3
89
,,
,,
326
t
93
1,
32
t
t0
0
0
287
.,
93
I
,,
281
0
92
It
.,
321
120
106
0
2
t2
I
4
I
0
0
Sch 001 Solar
Sch 001 Wind
Sch 023 Solar
Sch 023 Wind
Sch 006 Solar
Sch 006 Wind
TOTAL 264153863875499t944430 437 ,
Net Metering Customer 2017 Generation
During 2017,the Company's net metering customers in Idaho generated 2.7 GWh of
energy which is summarized by month by customer class in the table below.
Month
PACIFICORP ELECTRIC OPERATIONS
2OI7 I(I'II ATIMUT
PRIVATE GENERATION . STATE OF IDAHO
Jan-17 FeLlT Mar-l7 Apr-I7 May-17 Jun-17 Jul-17 Aug-17 SeplT OchlT Nov-I7 Dec-I7
Private Generation
Sch00l Solar 53104
Sch 001 Wind 11,676
Sch023 Solar 1E,507
Sch 023 Wind 1,508
Sch006 Solar 380
75,361 140,439 168210 183J95 204,047 228241 229,853 205,435 174,064 123,946 97,809
22,684
25,E07
8,056
531
E19
28,928
46J80
1,077
953
r09
24,127
54,E6E
555
I,128
57
14,813
59,475
5,626
1,223
572
8979
52,176
11,732
I,043
13,544 5257 5550
61,636 64,675 60,631
4939 6,046 6fi87
11,66 r)ze t2t2
503 615 6E0
19,636 19,877 8,15E
41J59 27,939 21fi14
5,046 6)19 4195
827 558 380
513 643 447Sch 006 Wind
TOTAL E5,429 133,25E 217,886 24E,945 265,103 285936 306,163 304,612 2E0,558 241,445 179,282 133003
Impact on Customers Not Participating in Net Metering
To determine whether net metering customers were paying their full cost of service or if
they were shifting costs to non-net metering customers, the Company perfonned a class cost of
service study ('NEM COS Study") for the 2018 Net Metering report in which customers
participating in net metering were broken out into separate classes. The test period for the NEM
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I
0
0
I
0
0
0
7
0,
0
0
0
COS Study uses the costs from the December 2017 Results of Operation report. The results of the
NEM COS Study are summarized by separate classes for non-net metering and net metering
customers for Schedule I and 36-Residential Service, Schedule 6-Large General Service, and
Schedule 23 - Small General Service customers in the table below.
NEM COS STUDY
Class
Annual Revenue
$000
Total COS
$000
Incr/@ecr) to = ROR
$000
%o Change fmm
Cunent Revenues
Residential
Residential - NEM
Schedule 6/35
Schedule 6 - NEM
Schedule 23
Schedule 23 - NEM
74,483
270
28,870
156
19,599
8E
71,576
356
29,600
152
17,942
101
(2,907)
86
731
(4)
(1,657)
t2
-3.90o/o
32.01o/o
2.53o/o
-2.25o/o
-8.45o/o
14.02o/o
Other Classes 155,000 158,738 3,738 2.AlYo
Idaho Total 278,465 278,465 0.00%
This table shows that total residential non-net metering classes require a 3.9 percent rate
reduction to achieve an equal rate of return, which is down slightly from the 5.67 percent reduction
in the 2015 NEM COS study. In contrast, residential net metering customers require a32.0 percent
increase compared to 16.8 percent increase in the 2015 study. The 2018 NEM COS study shows
that the present under-collection of revenue relative to cost of service from residential net metering
is approximately $348 per customer per year, up from the $227 in the 2015 NEM COS study.
This table also shows that small general service net metering customers require a 14.0
percent increase representing an under-collection of about $564 per customer per year. The results
for the Schedule 6 -Large General Service net metering class show a smaller difference with other
customers on Schedule 6.
The results for residential and small general service net metering customers 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 and small general service customers, the majority of costs
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that are fixed and are related to demand are recovered through volumetric energy charges. When
net metering customers receive credits equal to the full value of retail energy charges, but do not
fully offset their peak demands, there is a potential for costs to be shifted to non-participating
customers.
As discussed above, net metering adoption has experienced an accelerated growth rate each
successive year more-than doubling from 294 customers in 2017 to 592 customers through
September 2018. Since 2015, the composition of customer generation in the Company's service
territory has also changed significantly. More recent customer generation installations are larger
relative to customer usage. In 2015, the volume of energy production from customer generation
was estimated to be about 28 percent of residential net metering customers' full requirements usage
with the size of the average residential installation at 4.9 kW. During 2017, this same proportion
of energy produced relative to full requirements usage for residential net metering customers grew
tonearly 42percentandtheaveragefortotal residentialinstallations at6.6 kW. Newcustomer
generators that are coming online are almost entirely rooftop solar systems and solar-based
technology now makes up 8l percent of customer-owned generation systems compared to 47
percent at the beginning of 20 I 5.
NET METERING PROGRAM
The current net metering program for customers with on-site generation does not reflect
the cost of serving those customers, nor does it appropriately reflect the benefits and costs of
interconnecting customer owned on-site generation to the system. Existing retail rate designs
currently applicable to net metering customers were structured to collect the costs associated with
the grid under the assumption that customers would only need one-way services provided solely
by the utility. While this pricing structure does not perfectly align costs incurred with prices paid
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for each individual customer, overall this rate structure has worked for customers who receive one-
way services. However, the existing retail pricing structure does not accurately reflect the cost to
serve customers with on-site generation who continue to require services from the grid, but who
also meet some of their own energy needs with on-site, customer-owned systems.
The Company has witnessed rapid growth in its net metering service in recent years and
has identified quantifiable cost shifts occurring between its residential and small general service
net metering customers and standard service customers. Considering recent growth, the Company
believes that future cost shifting between these customer groups will continue to increase
substantially in the next few years if left unaddressed. Considering these trends and the significant
and accelerating levels of cost shifting from the net metering program, the Company believes that
a careful review of the net metering program is needed and intends to file requesting modifications
to this program soon.
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