20221027Compliance Filing 2022 Net Metering.pdf

Y ROCKY MOUNTAIN
P(o\,lrER.
RTCEIVET)
?ffi? tl[T 21 Ptt hr tr?
,r,i'?ffffot?'hl8t'o*
1407 W. North Temple
Salt Lake City, UT 84116
October 27,2022
VU ELECTRONIC DELIVERY
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd
Building 8 Suite 20lA
Boise,lD 83714
RE: COMPLIANCE FILING IN CASE NO. PAC-E-16-07
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTIAIT POWER
REQUESTTNG AUTHORTTY TO MODTF"Y ELECTRTC SERVICE SCHEDULE 135 -
I\[ET METERING SERYICE
Attention: Jan Noriyuki
Pursuant to Order No. 33511 in the above referenced matter Rocky Mountain Power hereby
respectfully submits its 2022 Annual Net Metering report to the Idaho Public Utilities
Commission.
Informal inquiries may be directed to Ted Weston, tdaho Regulatory Manager at [phone].
Very truly yours,
SVP, Regulation and Community & Customer Solutions
"^-D
Rocky Mountain Power's
Annual Customer Generation Report
October 27,2022
Rocky Mountain Power (the "Compohy"), pursuant to Order No. 3351 l,' hereby provides
the 2022 Customer Generation report to the Idaho Public Utilities Commission. The report
provides: customer participation by resource type, nameplate capacity, total customer generation,
and the amount customer generators mitigated the system coincident peak. The Customer
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, 2022, had 1,455 customers participating
under Electric Service Schedule No. 135 - Net Metering Service, ("Schedule 135") and 480
customers on Electric Service Schedule 136 - Net Billing Service, ("Schedule 136"), with a
cumulative nameplate capacity of approximately 15.8 megawatts ("MW"). This represents a 2l
percent increase in customer participation and 25 percent increase in installed capacity since the
2021 On-Site Generation report. There are 1,881 residential customers with a combined on-site
generation name-plate capacity of 14.7 MW and 54 non-residential customers with approximately
l.l MW of combined name-plate capacity interconnected to the system. Participation in these
I In the matter of the application of Roclcy Mountain Power requesting authority to modifu Electric Service Schedule
135 - Net Metering Service,Case No. PAC-E-I6-07.
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programs has increased from 1,593 customers in September202l to 1,935 customers by September
202l.The growth in customers' connected capacity with on-site generation is summarized by year
in the following table.
Date
Roclry Mountain Pouer- Idaho Cumulative Total
Total Residential Non-Res Residential Non-Res
Custornen Custonrers Customers Size ftW) Size ftW)
Total
Sizr ftW)
Dec 2015
Sep 2016
Sep 2017
Sep 2018
Sep 2019
Sep2020
Sep 2021
Seo2022
r56
201
294
592
1025
1362
1s93
r935
133
t77
269
560
990
t3t2
1543
1881
646
952
r584
3680
6656
9579
tt6t4
14730
1003
1339
1980
4230
7239
10562
12577
15776
23
24
25
32
35
50
50
54
357
387
396
550
583
983
963
1046
Customers with on-site generation has increased32T percent since 2018 with almost all of
the growth occurring in solar installations. Solar-based technology now makes up 98 percent of
customer-owned generation systems compared to 47 percent at the beginning of 2015. The
resource mix of the current connected capacity is 15,456 kW of solar, 75 of those solar customers
also have batteries with a capacity of 729 kW. There are 258 kW of wind, and 62 kW mixed wind
and solar, as summarizedin the following graph.
Idaho kW by Resource Tlpe
62258729Y
L4,727
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r Mixed Solar r Wind . Solar & Baftery
Since 2015, the composition of customer generation has changed significantly, recent
customer generation installations are larger relative to customer usage. ln20l5, 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
Clrss
Eurgr
Defverrd
(MWh)
Energr
rvlorted
(MWL)
Ect. Eergr
Gcnerrted
(MWh)
rur
Reqdrcreils
IJsefe (MWh)
Resldent{el I\IEM 3.51O 905 1.855 4,4@
Schedde 23NEll t24s 280 536 1,501
Sctredde 6 NEfil 1,936 6 l5 L.96
Gcrcrefunes t ?loJ
ftlRcq&crerts
LIsEc
41.60/o
35.7o/o
O.8o/o
Oct 2l Nov-21 lhe2l
08:lX)
Idaho Customers' On-Site Generation Reduction to Coincident Peak
During calendar year 2021PacifiCorp's system peak of 10,125 MW occurred on July 6,
2021, at 6 p.m. mountain standard time, Idaho load contributed 577 MW to that coincident peak.
On-site generation reduced Idaho's contribution to the coincident peak by 4.9 MW, or
approximately 0.84 percent. The following table summarizes customers' on-site generation by
month and the corresponding reduction to Idaho's contribution to the monthly system coincident
peaks.
Month :
Pcrkllrtc:
Perk Time MST:
Jrn-21
26
l9:00
PACINCORP. IDAf,O CUSMMIR GININAIION
REDUC',TT0N IO 2t},l SYSIf,M CoINCTDINTpEAK (ATrNpUTkW)
Ich2l lltrr-2! Apr.2l Mry.2l Jun-21 Jul-21 Aug:21 Sop2lrt306312t6t2920:00 0E:l[ ffi:lX) lt:lX) 17:lX] l7:lXl lt:00 17:00
27
l9:00
22
l9:00
l2
0
{5
0
l0
0
I
0
l,{93
27
103
6
3t
I
l0
lrrr
l9
12
I
a
0
0
2;77
il
tlt
,,
54
0
0
l,ll2
34
t2t
7
120
I
0
{,155
l9
305
I
lr{
0
0
2J35
ll
l7l
7
55
0
0
244
25
It
6
7
I
0
I,ll59
5
u
I
30
0
0
0
29
0
5
0
I
0
0
3
0
I
0
0
0
Sch 001 Sohr
Sch ll(ll lVind
Sch 023 Solrr
Sch 023Wind
Sch lXl6 Solrr
Sch llll5 Wind
Sch 010 Solrr
IOTAT
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\ln 301 25n 4,597 {,t96 Z,A4 t,765 I,fit 0 56
Customer On-Site Generation
During calendar year 2021, Rocky Mountain Power's Idaho customers with on-site
generators produced 17.3 GWh of energy which is summarized by month by customer class in
the following table.
PACIIICORP. IDAIO CUSMilIIR GINTTAIION
2O2I I(Wf,ATINPIN
Jm.2l [eh2l Mrr-21 Apr-21 Mry-21 Jun-21 Jul-21 Aur2l Scr2l 0ct2l Nov-21 Dec-21Month :
Sh00lSolr
Sch00lWind
Sch 023 Sohr
Sch023Wind
Sch flh Solrr
Sch 006Wind
Sch0l0Solr
IOTAL
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509,0t0 71u69 U9t00{ 1,562,145 t,7t0l67 t?97it3 I,t99,036 1,755,561 1,5{1J92 U49J0l t54,562 596557
I,t20
39,97t
L,ll6
14,970
217
0
10,917
55,{01
4Js5
20,146
{63
0
15,530
e9I07
tl19
t7)52
344
0
22,tto
ll7,569
4,97t
44,U6
506
0
20,097
w)91
4fl
fr,6fifr
{5
0
16J61
13l,$5
3J60
oJ6r
162
0
1t,906
l3t,l83
2,590
51,745
263
0
t,t65
125,9{l
\ne
41,161
196
0
fi,217 11,775
tot,lll t5,969
2,441 2,$2
40,$6 ll,ln24t t6t
0 t,{32
10,176 lu76
$/37 39,tt5
2)t4 3,99t
2l,tot 14,936
225 M
5,712 3,912
576102 u3,{71 l,{54,025 1,752,103 lJl0,l39 1,999,01t 2,t03,7U 1,939,653 1,704J06 Um,49l 952,934 67tfr70
Impact on Customers Not Participating in Net Metering
To better understand the relationship between the revenue collected 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 summarizes the results with separate classes for non-
net metering and net metering customers.
NEM COS
Class
Annual
Revenue
$ooo
Total Cost of Sepice
$ooo
fncrease / (I)ecreese)
to -ROR $Ofi)
Fercentage
Change from
Curent Revenues
Residemial
Residentbl- TOD
54,542
t9,94t
51,479
20.,o95
(3,063)
153
-5-620/.
O.77o/.
7r.573 (2.910)-3.91o/.TotalResitedial 74,483
270
28,870
156
19,599
88
363
29,599
t52
17,942
103
94
730
(3)
(1,6s7)
t4
34.81o/.
2.530^
-2.21o/.
-8.460/.
t6-L80/(
Residertial- NEM
Sc1rc6'le 6lJ5
SdE&b 6 - NEM
Sctpd'rb 23
SclE&tb23 -NEM
Odrr Chsses 155,000 158,733 3,733 2.41o^
27a.465 o-ov/<Idalp Total 278,465
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 refurn. 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 Schedule23 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 from the NEM COS study for residential and Schedule 23 net metering
customers demonstrates the ability of net metering 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.
I\ET 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
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only consume energy that is delivered to them from the energy grid, on-site generation customers
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 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
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. On average, the cost
of service for a residential customer is $97.32 per month, $22.84 or about 23 percent of this value
is energy related. The remaining $74.48 or about 77 percent is fixed and not energy related. This
split between fixed charges and energy charges for residential customers is based on the cost-of-
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service study from the last general rate case,2 updated for the final settled revenue requirement
increase of $8.0 million input into the cost-of-service model. While 77 percentof the costs to serve
residential customers are fixed costs for investments already made to serve customers, only l0
percent of those costs are recovered through the fixed customer service charge. The Company's
current rate structure for residential customers recovers approximately 90 percent of fixed costs
through volumetric energy charges instead of through the fixed customer service charge. This
dynamic results in larger customers who use more energy subsidizing smaller customers who use
less energy.
VALUE OF EXPORTED ENERGY
The value of exported energy from customer on-site generators is not equal to the retail
energy rate. 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 l, Schedule 6, and Schedule 23 are 10.485, 4.251, and 8.563 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 the retail energy rate,
which includes 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.
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,
2 In the Matter of the Application of Rocly Mountain Power for Authority to increase lts Rates and Charges in ldaho
andApproval ofProposed Electric Service Schedules ond Regulations, Case No. PAC-E-21-07, Order No. 35277
(Dec.27, 2021).
Tll']age
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 31, 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.
The Company issued a press release summarizing the Commission's order and sent letters
to current Schedule 135 participants notiffing them that they are grandfathered on Schedule 135
for twenty-five years. Bill messages were included on all customer bills notiffing them of the
closure of Schedule 135 to new participation, grandfathering of existing customers,
3 In the matter of the Application of RoclE Mountain Power to close the Net Melering Program to New Service &
Implement a Net Billing Program to Compensate Customer Generalorsfor Exported Generation. Case No. PAC-E-
l9-08.
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implementation of Schedule 136 - Net Billing Servico on November l, 2020, directing custorners
to the Company's website for more information about the changes and ongoing updates.
CONCLUSION
The Company continues to experienoe growth of customers installing on Bite generation,
has idenffied quantifiable cost shifts ooourring betweenresidential and Schedule 23 netmetering
customers and standard sen ioe customers. The Company is committed to working with interested
parties to develop an e4port credit rate that is fair for all customers.
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