20211027Compliance Filing 2021 Net Metering.pdf

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1407 W. North Temple, Suite 330
Salt Lake Ci$, Utah 84116
October 27,2021
VIA ELECTROMC DELIVERY
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
I l33l W. Chinden Blvd
Building 8 Suite 20lA
Boise,ID 83714
RE: COMPLIANCE FILING IN CASE NO. PAC-E-1647
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTIAN POWER
REQUESTTNG AUTHORTTY TO MODrr"r ELECTRTC SERVTCE SCITEDULE 135 -
NET METERING SERVICE
Attention: Jan Noriyuki
Pursuant to Order No. 33511 in the above referenced matter Rocky Mountain Power hereby
respectfully submits its 2021 Annual On-Site Generation report to the Idaho Public Utilities
Commission.
Informal inquiries may be directed to Ted Weston,Idaho Regulatory Manager at [phone].
Very truly yours,
Ct,^"^-DJoelle Steward
Vice President, Regulation
Rocky Mountain Power's
Annual On-Site Generation Report
October 27,2021
Rocky Mountain Power (the "Compony"), pursuant to Order No. 3351 l,' hereby provides
the202l On-Site Generation report to the Idaho Public Utilities Commission. The report provides:
customer participation by resource type, nameplate capacity, total on-site generation, and
generation from on-site generators that mitigated coincident peak. The On-Site Generation report
compares the value of exported generation from customers with on-site generation to alternative
sources of power and summarizes the impacts of customers with on-site generation to customers
without on-site generation.
The Company continues to witness growth of customers installing on-site generation and
has identified quantifiable cost shifts occurring within the residential and Schedule 23 customer
classes between customers with on-site generation and standard service customers due to the
structure of the net metering and net billing programs.
Customers with On-site Generation
Rocky Mountain Power, as of September 30, 2021, had 1,455 customers participating
under Electric Service Schedule No. 135 - Net Metering Service, ("Schedule 135") and 138
customers on Electric Service Schedule 136 - Net Billing Service, ("Schedule 136"), with a
cumulative nameplate capacity of approximately 12.6 megawatts ("MW'). This represents a
lTpercent increase in customerparticipation and l9 percent increase in installed capacity since
the 2020 On-Site Generation report. There are 1,543 residential customers with ll.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. Participation in these programs has
I In the matter of the application of RoclE Mountain Power requesting authority to modify Electric Service Schedule
135 - Net Metering Service, Case No. PAC-E-16-07.
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increased from 1,362 customers in September 2020 to 1,593 customers by September 2021. The
growth in customers' connected capacity with on-site generation is summarized by year in the
following table.
Date
Rocky Mountain Pouer- Idaho Cumulative Total
Total Residential NorRes Residential NorRes
Custorners Custorners Custorners Sfue (kW) Size ftW)
Total
Stue (kW)
Dec 2015
Sep 2016
Sep 2017
Sep 2018
Sep 2019
Sep2020
Sep 2021
155
201
294
s92
1025
1362
r593
357
387
396
550
583
983
963
23
24
25
32
35
50
50
r33
177
269
560
990
t3t2
1543
646
952
1584
36E0
6656
9579
tt6t4
1003
1339
1980
4230
7239
10562
12577
Customers with on-site generation has increased269 percent since 2018 with almost all of
the growth occurring in solar installations. Solar-based technology now makes up 97.5 percent of
customer-owned generation systems compared to 47 percent at the beginning of 2015. The
resource mix of the current connected capacity is 12,257 kW of solar, 33 of those solar customers
also have batteries with a capacity of 295 kW. There are 258 kW of wind , and 62 kW mixed wind
and solar, as summarized in the following graph.
Idaho kW by ResourceType
2ll'age
r Mixed . Solar r Wind
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 customers with on-site generation was estimated to be about 28 percent of the residential
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
customers with on-site generation was approximately 42 percent with the size of average
residential installations increasing to 7.1 kW.
Comparison of Customer Generation to Full Requirements Usage in20l7
Cless
Errgr
Dellverrd
(MWh)
Enery5r
Exportcd
(MWD)
Ect. Eucrgr
Genemted
6AWh)
rut
Rcqdremts
Useqe (MrnD)
Rcsldcntlrl I\EM 3.510 905 1,855 4,4&
Scbede 2:, NfM r245 280 536 1,501
Sctredde 6NEltl 1,936 6 l5 1,916
Gcncrrtlon es e 06 of
trt[Reqdcmnts
Usege
41.60/o
35.7o/o
O.8o/o
Customers' On-Site Generation Reduction to Coincident Peak
During calendar year 2020 PacifiCorp's system peak of 10,602 MW occurred on July 30,
2020, at 5 p.m. mountain standard time, Idaho load contributed 677 MW to that coincident peak.
On-site generation reduced ldaho's contribution to the coincident peak by 4.3 MW, or
approximately 0.64 percent. The following table summarizes customers' on-site generation by
month and the corresponding reduction to ldaho's contribution to the monthly system coincident
peaks.
PACIFICORP EI,ECTRIC OPERATIONS
2UZ0 MIjRGUD COI]IPANY COlNCrDf,,N'.l tJUAlrS Al'rNfU r'(IW)PNlVAlll GENljllAl'lON - S'l'At'I: Ol' llrAHo
Mont[ : Jr&20Pc.fD.E : 15Pc.k'l'h MS'l' : 09lro
l'cbzl, Mrr-2042lrr:01, lr9:lrl,t rt t t7{r0
Arg-Zl, ScD-20173l6t t lTt t
Oct-21, Nov-20 Dcc-Zl,z,6929lr9lrl, 10!01, l9:lrl,
Apr-20 M.y-21,229 Ju!-Zl, J[}2ll2t 30lul|lt lTt t
Prtvetc Gcncndon
Sch00l Sohr
Sch 001 liltnd
Sch 023 Sohr
Sch023 Wind
Sch 006 Sohr
Sch 006 Wind
TOTAL
t29
10
7S
2
4
0
309
5
27
I
I
0
t37
2
74
I
4
0
3,164
t2
26t
7
l1I
904
s2
74ll
2tI
3J33
9l
2t0
20
107
2
0
3
0
I
0
0
2,977
65
247
l4
93I
t,692
35
t2tt
l6I
4,621
t7
t76
E
t26I
3,ts2
4t
314
10
lo7I
2,3t6
13
t9t
3
67
0
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314 920 917 1,073 3Jts 2,666 4332 s,t70 3.132 3J9t 1,070 4
Customer On-Site Generation
During calendar year 2020, Rocky Mountain Power's Idaho customers with on-site
generators produced 15.2 GWh of energy which is summarized by month by customer class in
the following table.
Month :
PACITICORP ELECTRIC OPERAIIONS
2O'O KIryH ATIMUT
PRIVATE GENERAIION . SIATE OT IDAIIO
Jen-20 Fcb20 Mrr-20 Apr-20 Mry20 Jrr20 JUI-20 Arry-20 &p20 OcG20 Nov'20 lhc-20
Privrte Gcncrrtion
Sch 001 Solrr
Sch00l Wind
&h 023 Solrr
Sch 023 Wind
Sch 006 Solrr
Sch 006 Wind
TOTAL
4t9J36 tr9B94 I,1t3,090 lr60,tJ3l8J5t 9922 t9J66 17,64t
4t379 10,193 9t226 109,6533Bsr 2,t40 4,177 3,10623t2 4l7l 4:9t7 5,567403 21t 42s 3r7
tA499t7
230s9
122$76
497'
62rt
506
l)49,797
19,064
lll,769
4,112
t7,937
4lt
t,665Jtt
14949
t35,733
t224
46,070
32t
r500,614 rJ33re3
14,439 t2r53t2t92t ntr693,114 2J724tp64 42$67,17 2t2
I,llt,469 720,050 547,101
23,t65 l7$2t 7504
92,t99 59,176 52,040
5,147 3,802 1,619
3s,034 22,ts9 t94t7
323 3t7 l6s
ss7,t3t 9t6,53t 1240270 t397,t94 1,607,640 1123,097 l,t6s,693 t$tr{76 1503136 1r75,93t t23201 727p15
Impact on Customers Not Participating in Net Metering
To better understand the relationship between the revenue provided from customers with
on-site generation 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 summariz;es the results with separate classes for non-
net metering and net metering customers.
NEM COS
ADnuaI
Revenrrc
soooClass
Total Cost of Sewice
$ooo
Increase / (Decrcase)
to:ROR $O0O
Fercentage
Change from
Current Revenues
Residerninl
Residedial- TOD
54,542
t9.941
5t,479
20.o95
(3,063)
153
-5.620/o
O.77o/o
Total Resilential 74,483 71,573 (2.910)-3.91o/o
Resider*hl- NEM
S.badub 6/35
Scl-drle 6 - NEM
Scl-&de 23
Sclrtub 23 - NEM
270
28,870
156
19,599
88
363
29,599
r52
t7,942
l03
94
730
(3)
(1,657)
l4
34.81o/o
2.53o/o
-2.21o/o
-8.460/o
16.l8o/o
Olher Chsses 155,OOO 158,733 3.733 2.41o/o
Idaho Total 278,465 278,465 O-O@/o
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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 ofreturn. 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 offixed 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 / NET BILLING PROGRAMS
The current programs for customers with on-site generation do 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. Customers with on-site generation use the
system in a way that is fundamentally different than other customers. Unlike other customers who
only consume energy that is delivered to them from the energy grid, on-site generation customers
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may at different times be receiving energy from the energy grid, consuming their own generation
on-site, exporting excess energy from their on-site generation to the energy grid, or using the
Company's system as a virfiral 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
on-site generation customers. Inasmuch as customers with on-site generation consume the energy
from their own generation, 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 customers with on-site generation. Net energy does not reflect these
customer's physical time-based relationship with the energy grid. Even though a customer with
on-site generation 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.
Currently the Net Metering and Net Billing programs 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 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 betrveen 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,
z In lhe Matter of the Application of Rocly Mountain Power.for Approval of Changes lo its Electric Service
Schedules and a Price Increase of $32.7 Million, or opproximately 15.0 percent. Case No. PAC-E-I1-12.
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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 kilowafi-hour usage.
Residentid Cost of Service
r Demand- and Customcr-Related
C6ts
rEnergy-Rclated Ccts
26-lo/o
73.9o/o
Residential Charges
7.8o/o
r Fixed Cbarges r Energy Charges
92.T/o
VALTIE OF EXPORTED ENERGY
The value of exported energy from customer on-site 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 ofexported energy is approximatsly 2.234 cents perkwh. In comparison, the average enerry
charges for residential Schedule l, Schedule 6, and Schedule 23 are9.963,3.988, 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,
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rerlsonable, in the public interest, and ensures that, over time, customer generators are paid fairly
for the value that they provide.
ALTERNATIVE RENEWABLE POWER SOURCES
The Company's202lIRP preferred portfolio includes more than 3,700 MW of new wind
resources, more than 5,600 MW of new solar resources, more than 7,100 MW of energy storage,
and more than 6,700 MW of incremental energy efficiency and direct load control resources over
the 20-year planning horizon. Included in these totals are wind, solar, and battery storage
projects selected to the final shortlist of the Company's 2020 all-source request for proposals
(RFP) that are expected to achieve commercial operation by December 3 l, 2024. The Company
will also issue an all-source RFP in 2022 for cost-effective resources that can achieve
commercial operation by December 31,2026.
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 l, 2020, for
customers interested in installing onsite generation.
3 In the mauer of the Application of RoclE 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-
l9-08.
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The Company issued a press release summarizing the Commission's order and sent letters
to current Schedule 135 paricipants notiffing them that they are grandfathered on Schedule 135
for 25 years. Bill messages were included on all customer bills notiSing 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, directing customers to the Company's
website for more information about the changes and ongoing updates.
CONCLUSION
The Company continues to experience growth of customers installing on-site generation,
has identified quantifiable cost shifts occurring between residential and Schedule 23 net metering
customers and standard service customers. The Company is commiued to working with the parties
in Case No. PAC-E-I9-08 to develop an export credit rate that is fair for all customers.
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