20201027Compliance Filing 2020 Net Metering.pdf

1407 W. North Temple, Suite 330
Salt Lake City, Utah 84116

October 27, 2020

VIA ELECTRONIC DELIVERY

Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd
Building 8 Suite 201A
Boise, ID 83714

RE: COMPLIANCE FILING IN CASE NO. PAC-E-16-07
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTIAN POWER
REQUESTING AUTHORITY TO MODIFY ELECTRIC SERVICE SCHEDULE 135 –
NET METERING SERVICE

Attention: Jan Noriyuki

Pursuant to Order No. 33511 in the above referenced matter Rocky Mountain Power hereby
respectfully submits its 2020 Annual Net Metering report to the Idaho Public Utilities
Commission.

Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at [phone].

Very truly yours,

Joelle Steward
Vice President, Regulation

RECEIVED
2020 October 27 PM2:49
IDAHO PUBLIC
UTILITIES COMMISSION
1 | P a g e

Rocky Mountain Power’s
Annual Net Metering Report
October 27, 2020

Rocky Mountain Power (the “Company”), pursuant to Order No. 33511,1 hereby provides
the 2020 Net Metering report to the Idaho Public Utilities Commission. The report provides:
customer participation by resource type, nameplate capacity, total net metering generation, and net
metering customers generation to mitigate coincident peak. The Net Metering report compares the
value of exported generation from net metering customers to alternative sources of power and
summarizes the impacts of net metering customers on non-net metering customers.
The Company continues to witness rapid growth in its net metering program and has
identified quantifiable cost shifts occurring between its residential and Schedule 23 net metering
customers and standard service customers due to the net metering program.
Net Metering Customer Participation
Rocky Mountain Power, as of September 30, 2020, had 1,362 customers participating
under Electric Service Schedule No. 135 – Net Metering Service, (“Schedule 135”), with a
cumulative nameplate capacity of approximately 10.6 megawatts (“MW”). This represents a
33 percent increase in customer participation and 46 percent increase in installed capacity since
the 2019 Net Metering report. There were 1,312 residential customers with 9.6 MW of combined
name-plate capacity and 50 non-residential customers with approximately 1.0 MW of combined
name-plate capacity interconnected to the system. Net metering customer participation and
connected capacity from December 2014 through September 2020 is summarized in the following
table.

1 In the matter of the application of Rocky Mountain Power requesting authority to modify Electric Service Schedule
135 – Net Metering Service, Case No. PAC-E-16-07.
2 | P a g e

Participation in the net metering program has increased 230 percent since 2018 with most
of the growth occurring in installed solar. The resource mix of the current connected capacity is
10,245 kilowatts (“kW”) of solar, 11 of those solar customers also have batteries with a capacity
of 126 kW. There are 255 kW of wind, and 62 kW mixed wind and solar, as summarized in the
following graph.

Participation in the Net Metering Program has increased from 1,025 customers in
September 2019 to 1,362 customers by September 2020. Since 2015, the composition of customer
generation has changed significantly, recent customer generation installations are larger relative
to customer usage. In 2015, energy production from customer generation was estimated to be about
Total Residential Non-Res Residential Non-Res Total
Date Customers Customers Customers Size (kW) Size (kW) Size (kW)
Dec 2014 138 106 22 464 356 820
Dec 2015 156 133 23 646 357 1003
Sep 2016 201 177 24 952 387 1339
Sep 2017 294 269 25 1584 396 1980
Sep 2018 592 560 32 3680 550 4230
Sep 2019 1025 990 35 6656 583 7239
Sep 2020 1362 1312 50 9579 983 10562
Rocky Mountain Power - Idaho Cumulative Total
3 | P a g e

28 percent of residential net metering customers’ full requirements usage with the average size of
residential installations at 4.9 kW. During 2017, the proportion of energy produced relative to full
requirements usage for residential net metering customers was approximately 42 percent with the
size of average residential installations increasing to 7.1 kW.
Comparison of Customer Generation to Full Requirements Usage in 2017

New customer generators participating in the program under Schedule 135 are almost
entirely rooftop solar systems, solar-based technology now makes up 97.5 percent of customer-
owned generation systems compared to 47 percent at the beginning of 2015.
Net Meter Customers’ Reduction to Coincident Peak
On July 22, 2019, at 5 p.m. mountain standard time, PacifiCorp’s system peaked at
10,473 MW, Idaho load contributed 778 MW to the coincident peak. Schedule 135 net metering
customers’ onsite generation reduced Idaho’s contribution to the coincident peak by 2.6 MW, or
approximately 0.33 percent. The following tables summarize Schedule 135 net metering
customers’ onsite generation by month and the corresponding reduction to Idaho’s contribution to
the monthly system coincident peaks.

PACIFICORP ELECTRIC OPERATIONS2019 MERGED COMPANY COINCIDENT LOADS AT INPUT (kW)PRIVATE GENERATION - STATE OF IDAHO
Month : Jan-19 Feb-19 Mar-19 A r-19 Ma -19 Jun-19 Jul-19 Au -19 Se -19 Oct-19 Nov-19 Dec-19Peak Date : 2 7 4 10 13 12 22 5 5 30 26 17Peak Time MST : 19:00 09:00 09:00 08:00 18:00 17:00 17:00 17:00 17:00 08:00 19:00 19:00
Sch 001 Solar 0 603 436 744 1,193 2,385 2,310 2,547 1,802 574 0 0
Sch 001 Wind 0 4 10 21 76 28 16 25 13 9 1 1
Sch 023 Solar 0 78 55 90 136 263 243 255 179 59 0 0
Sch 023 Wind 0 1 2 5 16 6 3 5 3 2 0 0
Sch 006 Solar 0 5 3 6 9 16 15 16 11 3 0 0
Sch 006 Wind 0 0 0 0 2 1 0 1 0 0 0 0
TOTAL 0 690 507 866 1,432 2,698 2,587 2,848 2,007 648 1 1
4 | P a g e

Net Metering Customer 2019 Generation
During calendar year 2019, Rocky Mountain Power’s Idaho Schedule 135 net metering
customers’ onsite generators produced 9.4 GWh of energy which is summarized by month by
customer class in the following table.  

Impact on Customers Not Participating in Net Metering
To better understand the relationship between the revenue provided from Schedule 135 Net
Metering customers and their cost of service, the Company prepared a class cost of service study
where Schedule 135 customers were segregated from the class in which they presently participate
(“NEM COS Study”). The NEM COS study is based upon the December 2017 Results of
Operation report. The NEM COS Study table summarizes the results with separate classes for non-
net metering and net metering customers.
NEM COS Study

PACIFICORP ELECTRIC OPERATIONS2019 KWH AT INPUTPRIVATE GENERATION - STATE OF IDAHO
Month : Jan-19 Feb-19 Mar-19 A r-19 Ma -19 Jun-19 Jul-19 Au -19 Se -19 Oct-19 Nov-19 Dec-19
Sch 001 Solar 343,912 368,961 607,520 617,106 725,614 919,977 1,021,947 1,043,013 777,850 756,830 554,852 466,440
Sch 001 Wind 11,214 25,382 12,624 27,694 15,576 16,009 14,007 13,540 13,383 18,564 7,231 5,650
Sch 023 Solar 46,652 47,448 76,798 74,513 82,633 101,447 107,351 104,349 77,097 77,676 55,342 44,508
Sch 023 Wind 2,425 5,489 2,730 5,990 3,369 3,462 3,029 2,928 2,894 4,015 1,564 1,222
Sch 006 Solar 3,035 3,087 4,878 4,687 5,197 6,212 6,574 6,390 4,634 4,271 2,935 2,319
Sch 006 Wind 247 558 278 609 343 352 308 298 294 408 159 124
TOTAL 407,485 450,925 704,828 730,599 832,732 1,047,461 1,153,217 1,170,519 876,152 861,764 622,083 520,264
5 | P a g e

The NEM COS Study showed that the total residential non-net metering class would
require a 3.9 percent rate reduction to achieve an equal rate of return. In contrast, residential net
metering customers require a 34.8 percent increase to achieve that same return. The NEM COS
Study shows that the present under-collection of revenue relative to cost of service from residential
net metering customers is approximately $378 per customer per year.
The NEM COS Study also showed that Schedule 23 net metering customers require a
16.2 percent increase representing an under-collection of about $651 per customer per year. The
results for the Schedule 6 – Large General Service net metering class showed a smaller difference
with other customers on Schedule 6, primarily due to Schedule 6’s higher monthly customer
service charge that collects a larger percent of fixed costs.
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 the demand at the time of the Company’s
coincident peaks 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
demand, there is a potential for costs to be shifted to non-participating customers.
NET METERING PROGRAM
The current net metering program for customers with onsite generation does not reflect the
cost of serving those customers, nor does it appropriately reflect the benefits and costs of
interconnecting customer owned onsite 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
6 | P a g e

at different times be receiving energy from the energy grid, consuming their own generation onsite,
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 of energy and the magnitude of demand 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 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 Company’s
energy grid to import and export energy, provide voltage support, and act as a virtual battery to
store energy for the customer to use later.
Net metering compensates customers with onsite 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 of the 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 methodology from the
last general rate case,2 updated for costs from the 2017 Results of Operations report. While
73.9 percent of the costs to serve residential customers are essentially fixed costs for recovery of
operations and investments already made to serve customers, only 7.8 percent of those 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.

2 In the Matter of the Application of Rocky Mountain Power for Approval of Changes to its Electric Service
Schedules and a Price Increase of $32.7 Million, or approximately 15.0 percent. Case No. PAC-E-11-12.
7 | P a g e

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 Company, in its supplemental filing in Case No. PAC-E-19-08, proposed that the
value of exported energy is approximately 2.234 cents per kWh. In comparison, the average energy
charges for residential, Schedule 6, and Schedule 23 are 9.963, 3.988, and 8.841 cents per kWh,
respectively. Providing customer generators with credits for their exported energy at a price that
reflects the fair value instead of a net energy credit that is priced at retail energy charges, which
includes the recovery of fixed costs that are not avoidable with customer generation, is just,
reasonable, in the public interest, and ensures that, over time, customer generators are paid fairly
for the value that they provide.
8 | P a g e

ALTERNATIVE RENEWABLE POWER SOURCES
The Company’s 2019 IRP preferred portfolio includes more than 4,600 MW of new wind
resources, more than 6,300 MW of new solar resources, more than 2,800 MW of battery storage,
and more than 2,700 MW of incremental energy efficiency and direct load control resources over
the 20-year planning horizon. The twenty-year levelized prices for those wind and solar
resources ranged from 2.5 cents to 3.5 cents per kWh. In July 2020, the Company issued an all-
source request for proposals (RFP) to procure new resources that can achieve commercial
operation by December 31, 2024. The Company will select the final resources from the RFP on
or around June 1, 2021. The final selected resources are expected to contribute a significant
amount of new cost-effective renewable resources to the Company’s portfolio.
RECENT COMMISSION ORDERS
On August 26, 2020, Commission Order No. 34753 approved a two-phase approach used
to process the Company’s application. This approach is designed to solicit and incorporate public
feedback at pertinent stages and ensure a reasonably comprehensive study of the issues is
conducted in a credible and fair manner. The order included Attachment A, a list of items to study
as the parties evaluate what the value of customer generated export energy should be.
On October 2, 2020, Commission Order No. 347983 closed Electric Service Schedule No.
135 – Net Metering Service to new customer participation and authorized implementation of
Electric Service Schedule No. 136 – Net Billing Service effective November 1, 2020, for
customers interested in installing onsite generation.

3 In the matter of the Application of Rocky Mountain Power to close the Net Metering Program to New Service &
Implement a Net Billing Program to Compensate Customer Generators for Exported Generation. Case No. PAC-E-
19-08.
9 | P a g e

The Company issued a press release summarizing the Commission’s order and sent letters
to current Schedule 135 participants notifying them that they are grandfathered on Schedule 135
for 25 years. Bill messages were included on all customer bills notifying them of the closure of
Schedule 135 to new participation, grandfathering of existing customers, implementation of
Schedule 136 – Net Billing Service on November 1, 2020, and directing customers to the
Company’s website for more information about the changes and ongoing updates.
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 has filed an application with the Commission recommending that
exported energy from onsite generation be priced at a level that holds non-participating customers
economically indifferent instead of at retail energy charges. The Company is committed to
working with the parties in Case No. PAC-E-19-08 to develop an export credit rate that is fair for
all customers.