20191031Compliance Filing 2019 Net Metering.pdf

Y ROCKY MOUNTAIN
POA'ER
a Drvrstor, oF facrFrcoRP
RECEIVED
a::9OcT3t Al'lll: ll 1407 W. North Temple. Suite 330
Salt Lake City, Utah 84116
October3l,20l9
.,^'.,1....1.r r"r!
VIA OVERNIGHT DELIVERY
Diane Hanian
Commission Secretary
ldaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
RE: COMPLIdTTCE FILING IN CASE NO. PAC-E-16-07
ROCKY MOUNTAIN POWER'S 2OI9 ANNUAL NET METERING REPORT
Attention: Diane Hanian
Commission Secretary
Pursuant to Order No. 3351 I in the above referenced case, Rocky Mountain Power hereby submits
the 201 9 Annual Net Metering report.
lnformal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at [phone].
ery truly yours,
lle S
Vice President, Regulation
Rocky Mountain Power's
Annual Net Metering Report
October 31, 2019
Rocky Mountain Power ("Company"), pursuant to Order No. 3351l,r hereby provides the
2019 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 ofexported net generation from
net metering to altemative sources of power and summarizes the impacts of net metering on non-
net metering customers. The Company continues to witness rapid growth in its net metering service
and has identified quantifiable cost shifts occurring between its residential and SchedulB 23 net
metering customers and standard service customers.
Net Metering Customer Participation
As of September 30, 2019, net metering participation in Rocky Mountain Power's ldaho
service territory is 1,025 customers with a cumulative nameplate capacity of approximately 7.2
megawatts ("MW"), representing a 73 percent increase in the number of customers and 7l percent
increase in installed capacity since the 2018 Net Metering report. The Company has 990 residential
customers with 6,656 kilowatts ("kW") of combined name-plate capacity and 35 non-residential
customers with 583 kW of combined name-plate capacity. The Company's net metering customer
pa(icipation and connected capacity by year from December 2014 through September 2019 is
summarized in the following table.
I Case No. PAC-E-16-12
llPage
Date
Rocky Mountain Porrer - Idaho Cumulative Total
Total Residential Non-Res Residential Non-Res
Customers Customers Customen Size (kW) Size (kW)
Total
Size (kw)
Dec 2014
Dec 2015
Sep 2016
Sep 2017
Sep 2018
Sep 2019
138
156
201
294
592
1025
106
133
177
269
560
990
22
23
24
,(
32
35
464
646
952
1584
3680
6656
356
357
387
396
550
583
820
1003
1339
1980
4230
1239
Participation in the net metering program has increased 643 percent since 2014 with most
of this growth occurring in installed solar. The resource mix ofthe current connected capacity is
6,929 kW of solar with l0 of those customers that have batteries with a total capacity of 8l kW,
273 kW of wind, and 37 kW mixed wind and solar, as summarized in the following graph.
ldaho k\\' b-v Resource T1'pe
37
.I\lited . Solar . U'ird
Participation in the Net Metering Program has increased from 592 customers in 2018 to
1,025 customers in September 2019. Since 2015, the composition of customer generation in the
Company's service territory has changed significantly. Recent customer generation installations
are larger relative to customer usage. ln 2015, energy production from customer generation was
estimated to be about 28 percent of residential net metering customers' full requirements usage
2lPage
6929
with the average size ofresidential installations at 4.9 kW. During 2017, the proportion ofenergy
produced relative to full requirements usage for residential net metering customers was
approximately 42 percent with the average residential installations increasing to 7.1 kW.
Comparison of customer Generation to Full Requirements Usage in 2017
lrlrss
Errgi
Dellvcrrd
(Mwh)
Ene rEr
Erported
(MwL)
EEt. EerBt
Generrted
(Mwh)
rut
R equirtmds
UsEgr (MwL)
Resnetrtlrl NEM 3,510 4-4&
Schedrie 23 :iEu t-245 2AO 536 1.50I
Schrddc 6 NEvI 1.936 6 l5 1.946
Galerrtlon rr a o of
h! Rcqufutre s
Usrgc
41.6t/o
3:.7./"
08%
New customer generators that are coming online are almost entirely rooftop solar systems
and solar-based technology now makes up 96 percent of customer-owned generation systems
compared to 47 percent at the beginning of 2015.
Net Meter Customers' Reduction to Coincident Pesk
PacifiCorp's 2018 coincident peak of 10,174 MW occurred on July l6s at 5 p.m. MST;
Idaho's contribution to the system peak was 714 MW, after accounting for inigation load control
curtailment, Net metering customers' on-site generation reduced that peak by approximately 1.6
MW, or approximately 0,22 percent. The following table summarizes net metering customers'
private generation reduction to ldaho's contribution to Roclcy Mountain Power's monthly system
coincident peaks.
)IoothPerlDate:
Pe.k Ti m. MST :
Jrn- 18
2
l8:00
PACU,'ICORP f, LECTRIC OPf, RATIONS
2018 Mf,RG T,D COMPA\Y CONCTDENT I,OADS .4T TNPTIT( KTT)PRIVAfi GENER{TION . STATf, OF IDAIIO
FeblS Mrr-18 AprlS vsyl8 Jun-18 Jul-18 Aug-18 ScFlS23 6 32427 169 708i00 08100 08:00 lE:00 17:00 lr:00 16:00 l7:0O
O.l-18I
20:0O
Nor-lEl9
0E:00
Dec-18
3
18r00
Prilstc Gcneralion
Sch001 Solrr
Sch 001 Wind
5ch023 Solrr
Srh023 wiod
S(h006 S0lrr
Sch 006 \lind
TOTAL
646
l0
t24
0
501
20
87
5
I
0
1,o42
23
201
5
J
I
tJls
35
242
8
16
I
1,765
1S
319
3
2t
0
309
41
2
3
0
0
0
I
0
0
512
5
I00
433
22
19
5
I
I
771
l5
314
9
45
2
3
0
0
0
0
0
0
0
135
I
0
3
9
0
3lPage
I 620 144 s40 615 lrEr 1.517 2.124 939 o 372 314
m5 1.E55
Net Metering Customer 20lE Generation
During 2018, the Company's net metering customers in ldaho generated 5.2 GWh of
energy which is summarized by month by customer class in the table below.
PACII ICORP f, LTCI.IIIC OPTR{NoNS
20 I Ii K!I'H AT IIPI'T
PRN,ATI (}T,\[RATION . STATE Of IDAITO
Jan-18 Feb-18 NIar-18 nnr-18 luiy-18 .Iun-18 .Iul-18 Aug-18 Sep-18 Oct-18 \ot-18 D(c-18
PrivDle Generation
Sch 001 Solar
Shh 0Ol I ind
Sch 023 Sol!r
Sch 023 l,ltnd
Sch 006 Solar
S.h 006 rryi"d
MTAL
99,143
14,990
20521
3,425
3{9
364
283,6s0 37s-s24
21,001 25,025
54363 68J894J99 5,718869 r.026
5t I 608
519.107
I tJ03
98J30
2.583
6,701
275
5l5,E2l
I1,545
93,245
2,638
6,t07
281
463,469
10698
80265
2,145
260
396,145
I1,963
64,083
2,734
4,t69
291
2O7 681
8,413
29J 3l
| 929
rJ34
205
145,099
to,929
2E,446
7,06E
4E4
752
427,177
9,703
14.044
22t1I, l
236
47253E
17.021
91.003
3389
t.lsr
,l l.l
246.676
tt,62t
l3,Jl2
2,rt55
2,821
282
139399 212:711 365,092 {76191 515,039 589,0t6 638..198 629,637 562J95 {79J85 147,{70 2{9J23
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 performed a class cost of
service study C'NEM COS Study") in which customers participating in net metering were broken
into separate classes. The test period for the NEM COS Study used the costs from the December
2017 Results of Operation report. The results of the NEM COS Study are summarized with
separate classes for non-net metering and net metering customers for Residential Service, Schedule
6 - Large General Service, and Schedule 23 - Small General Service customers in the table below.
NEM COS STUDY
Class
Annual Revenue
s000
Totsl COS
$000
Incr(Decr) to = ROR
s000
7o Change fmm
Cunt nt Revenues
Residential
Residential - NEM
Schedule 6/35
Schedule 6 - NEM
Schedule 23
Schedule 23 - NEM
11,483
270
28,870
156
t9,599
88
71,576
356
29,600
152
17,942
l0l
(2,e07)
86
731
(4)
(1,6s7)
tz
-3.90Vo
32.01o/"
2.530h
-2.25v"
-8.45Yo
l4.02vo
Other Classes 155,000 t 58,7J8 3,738 2.41"h
Idaho Total 278,465 278,465 0.00%
4lPage
llonth
The NEM COS Study shows that the total residential non-net metering class requires a 3.9
percent rate reduction to achieve an equal rate of return. In contrast, residential net metering
customers require a 32.0 percent increase. The NEM COS Study shows that the present under-
collection of revenue relative to cost of service from residential net metering is approximately
$378 per residential customer per year.
This table also shows that Schedule 23 net metering customers require a 14.0 percent
increase representing an under-collection ofabout $651 per customer per year. The results for the
Schedule 6 - Large General Service net metering class shows a smaller difference with other
customers on Schedule 6.
The results for residential and Schedule 23 net metering reflect the ability of these
customers to avoid paying their full cost of service by receiving compensation for each kWh
generated at the full retail energy rate. Within the rate design for residential and Schedule 23
customers, costs that are fixed which are related to demand at the time of the Company's different
peak periods are largely recovered through volumetric energy charges. When net metering
customers receive credits equal to the full retail energy rates, but do not fully offset their peak
demands, there is a potential for costs to be shifted to non-participating customers.
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. 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 generation onsite,
5lPage
exporting excess energy from their onsite generation to the energy grid, or using the Company's
system as a virtual battery. Like with any other customer, the Company allocates its costs based
upon the volumes ofenergy and the magnitude ofdemands the Company delivers to net metering
customers. Inasmuch as net metering customers consume their own generation onsite, the profile
and overall quantity of energy delivered to them is reduced and the allocation of costs is also
consequently reduced. The concept of net energy is a billing construct that is used lor 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 to both import, export energy, and store energy.
Net metering compensates customers with on-site generation that export energy back onto
the grid at the full retail energy rate. For smaller customers such as residential and Schedule 23
customers, most ofthe fixed costs to pay for and maintain the Company's system are recovered
through these volumetric energy charges. 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 updated for costs from the 2017 Results of Operations repo(.2 While 73.9 percent
ofthe costs to serve residential customers are essentially fixed costs for recovery ofoperations and
investments already made to serve customers, only 7.8 percent ofthose costs are recovered through
fixed charges. Therefore, approximately 89 percent of the fixed cost recovery is subject to the
customer's volumetric kilowatt-hour usage.
'? Case No. PAC-E-I I -12
6lPage
Residential Cost of Service
:,: Deumnd- and Ostourer-Related
Costs
r Energy-Related Cosls
26.19b
73.Po
Residential Charges
7. go.o
e Fixed Clurges r Euergl'Charges
92.2e 0
VALUE OF NET METERING CUSTOMER'S EXPORTED ENERGY
The value of exported energy from customer onsite generators is not equal to retail energy
charges. The value of exported energy is currently 2.486 cents per kilowatt-hour. In comparison,
the average energy charges for residential, Schedule 6, and Schedule 23 are 9.963,3.988, and
8.841 cents per kilowatt-hour, respectively. Providing customer generators with credits for their
exported energy at a price that reflects the fair value instead ofa net energy credit that is priced at
retail energy charges, which includes the recovery of fixed costs that are not avoidable with
TlPagc
customer generation, is just, reasonable, in the public interest, and ensures that, over time,
customer generators are paid appropriately for the value that they provide.
CONCLUSION
The Company continues to experience rapid growth in net metering service, has identified
quantifiable cost shifts occurring between residential and Schedule 23 net metering customers and
standard service customers, and recommends that exported energy from onsite generation be
priced at a fair value instead ofat retail energy charges.
In consideration of this, the Company filed an applicationr with the Commission
respectfufly requesting that: (l) the Commission close Electric Service Schedule 135 to new
customer participation and cap it at the levels in place, effective at midnight local time, December
31,2019; (ii) allow existing net metering customers and those that apply for or complete
interconnection before January 1,2020,to continue to stay on the program at the site until June [,
2029; (iii) offer, as an altemative, its proposed Net Billing program to new customer generators
through Schedule 136 for those who apply for interconnection starting February 1,2020t @)
implement an $85 application fee for customers that apply to interconnect a customer generation
system under the Net Billing program that will reflect the one-time cost to the Company associated
with processing and reviewing customer generation interconnection requests; (v) require projects
that apply for interconnection before January l, 2020 to complete interconnection within a one
year period of application to be eligible to stay in the Net Metering program; and (vi) recover the
exported energy credits from the Net Billing program through the Company's annual ECAM.
Electric Service Schedule No. 136 - Net Billing is designed to provide for the growth of
renewable distributed generation in the Company's service territory by appropriately
3 Case No. PAC-E-19-08.
8lPage
compensating customers for exported generation that is supplied to Rocky Mountain Power's
system. The Net Billing progrcm is designed to provide compensation based on costs that the
Company would otherwise expend to obtain electricity. There by ensuring that the Company's
other customers who are not participating in the Net Billing program are not harmed.
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