20200702Revised Comments.pdf

Y ROCKY MOUNTAIN
POWER
rT[TEIVEB
?t?t iul -2 PH lr:3?1407 West North Temple, Suite 330
Salt Lake City, Utah 84116i i;li;ii lf
c*t**'i''+i5stffiH
July 2,2020
VIA ELECTRONIC FILING
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472W. Washington
Boise,lD 83702
Re:CASE NO. PAC.E.19.O8
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
TO CLOSE THE NET METERING PROGRAM TO NEW SERYICE &
IMPLEMENT A NET BILLING PROGRAM TO COMPENSATE CUSTOMER
GENERATORS FOR EXPORTED GENERATION
Dear Ms. Hanian:
Please find an electronic filing of Rocky Mountain Power's Revised Comments in the above
referenced matter.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
.^--D
Vice President, Regulation
Adam Lowney (158#10456)
McDowell Rackner Gibson PC
419 SW l16Avenue, Suite 400
Portland, OR 97205
Telephone: [phone]
Fax: [phone]
Email: adam(@mrg-law.com
Emily Wegener Qtro hac vice)
1407 West North Temple, Suite 320
Salt Lake city, utah 84116
Telephone No. (801 ) 220-4526
Mobile No. (385) 227 -247 6
Email : Emily. weeener(a)pacifi corp.com
Attorneys for Roclqt Mountain Power
BEFORE THE IDAIIO PUBLIC UTILITIES COMI\{ISSION
IN THE MATTER OF THE APPLICATION )
oF ROCKY MOUNTATN POWER TO ) CASE NO. PAC-E-19-08
CLOSE THE NET METERING PROGRAM )
TO NEW SER\ICE & IMPLEMENT A NET )
BTLLTNG PROGRAM TO COMPENSATE ) REVTSED COMMENTS OF
cusToMER GENERATORS FOR ) ROCKY MOUNTATN POWER
EXPORTED GENERATTON )
Pursuant to the Notice of Supplemental Application, Notice of Public Hearing, and
Notice of Comment Deadlines issued by the ldaho Public Utilities Commission ("Commission")
on May 6'2020, Rocky Mountain Power a division of PacifiCorp ('.RMP" or the "Company")
hereby submits its revised comments in the above-referenced case.
1. The Company filed its application in this matter on June 14,2019 ("Application")
and a supplemental application onApril 23,2020 ("SupplementalApplication").
2. The Supplemental Application provided updated information about the
Company's Export Credit Study and requested that customers who submitted an interconnection
agreement as of July 3I,2020, be grandfathered in the Schedule 135 net metering program for
ten years, until July 31,2030.r The Company requested that customers who submitted an
application to interconnect before midnight on July 31,2020, would have one year to
interconnect their customer generation system in order to be grandfathered into Schedule 135.
3. After the Supplemental Application was filed, the Commission ordered a two
phase proceeding including a phase one addressing study design and a phase two reviewing the
study. The Commission solicited comments from parties by May 26,2020, and required all
public comments to be received by July 16,2020.
4. On May 26,2020, Commission Stafl Idaho Clean EnergyAssociation, and Idaho
Conservation League each submitted comments on the Company's proposed study design. A few
members of the public have also submitted comments. Additionally, the Company hosted a
telephonic public workshop on June 16,2020, where it shared its study design and solicited
comments, and Commission staffhosted a similar telephonic workshop on June 18, 2020. The
Commission held a telephonic public customer hearing on June 22,2020. Most of the comments
received from the general public related to grandfathering.
5. Based on the comments of the parties and the public, the Company requests that
Schedule 135 customers be grandfathered for fifteen years, until July 31,2035, instead of ten
years as originally requested. The Company makes no other revisions to its request at this time.
6. The Company understands customers' concern with the Company's proposed ten
year grandfathering period for existing customer generators. While the Company's payback
analysis demonstrates that ten years is reasonable, the Company is not unsympathetic to concems
from existing net metering program participants and recognizes that customers may have had their
systems built anticipating longer payback periods for their investment. However, Net Metering
I Supplemental Application fl 2l
customers were notifled that the program was subject to change when they signed up for
interconnection. Paragraph 2 of the Company's Interconnection and Net Metering Service
Agreement, titled Goveming Law states:
As amended from time to time, the Idaho Statutes, Idaho Administrative Rules
("[DAPA") and Rocky Mountain Power's Idaho tariffs approved by and on file
with the Idaho Public Utilities Commission ("Tariffs") are incorporated by
reference and regulate this Agreement. In the event of any conflict between this
Agreement and the Idaho Statutes, IDAPA and Rocky Mountain Power Tariffs
(collectively, "Governing Law") the Governing Law shall control. Rocky
Mountain Power shall furnish applicable provisions of the Idaho Statutes, IDAPA
and its Tariffs upon request from the Customer-Generator.
7. Based on the following updated analysis, a l5-year grandfathering period should
be suffrcient for most customers to get a return on their investment while striking a balance
between giving existing customer generators a reasonable time on the existing program with
mitigating the impacts to non-participants.
Average customer payback period
8. The Company recognizes that Schedule 135 customers have made a significant
investment in their generation systems; therefore the Company's original proposal included a ten-
year grandfather period for the Schedule 135 Net Metering progfttm that provided customers
sufficient time to recover their investment. After the grandfathering period ends, these customers
would still continue to benefit from their investment through reduced usage from the Company
and compensation for exported energy. Grandfathering existing customer generators for fifteen
years on the Net Metering program is reasonable and consistent with the customer payback
analysis while limiting the length of time non-Net Metering customers must subsidize net
metering.
9. Staffs comments recommended that the Commission order the Company to
quantiff the dollar amount expected to be recovered from all non-net metering customers under a
reasonable range of export credits and grandfathering time periods.
10. The Company developed the present value revenue requirement associated with
grandfatheringunder 10, 15,20,and25year scenarios. TheCompanyuseda 6.92percettdiscount
rate consistent with the 2019 IRP and assumed the Company's net billing export credit price from
its supplemental filing and its current retail rates remain flat through the 25 year period. The
present value of revenue requirements provides a measurement of the estimated cost of preserving
the Net Metering program for existing participants in present value terms. In other words, it is
what the cost would be today of choosing to grandfather Net Metering customers over different
periods taking into consideration the time-value of money. Table I below summarizes this
analysis:
Table I - Value of Net Metering Cost Shifting
Under Different Scenarios
I l. Another important consideration regarding a grandfathering period is customer
payback. In its initial filing, the Company estimated that a typical customer could experience a
payback period of about 9.6 years. To give a fuller picture of how this might vary for different
customers, the Company took the same assumptions it used in its initial filing and calculated
customer paybacks for higher and lower cost systems ($2 per waff installed and $4 per watt
installed) as well as for a larger usage and lower usage customer (2,000 kWh per month and 1,000
kWh per montQ. Table} below summarizes the results of these nine customer payback scenarios:
Prcsent Value of Revenue
Remrircmnts ($ mtlllon)Scenario
4.2I 0 Year Crraodfathering
15 Year Grandfatheriry 5.4
20 Year GadfatherirE 6.2
25 Year Grandfatheriu 6.8
Table 2 -Solar ack Scenarios
A customer with 2,000 kWh per month who paid $2 per watt2 for a generation system could have
a simple payback period of 6.6 years on the Net Metering program. Conversely, a customer using
1,000 kwh per month who paid $4 per watt could have a payback of 17.8 years.
12. This analysis continues to support the Company's original 10 year grandfathering
period. However, as noted the primary concern of the eighteen customers that submitted written
comments to the Commission and the handful of customers who participated in the public
workshops was their concern about imposing any grandfathering period for current customers.
13. Based on the analysis summarized in Table 2, a ll-year grandfathering period is at
the backend of all but one payback scenario assuring existing customer generators have reasonable
time on the current Net Metering program to recover their investment before moving to Net Billing.
14. After the grandfathering period ends, current Net Metering customers transferred
to the Net Billing program will continue to benefit from their system by reducing their energy bill
which is the intent of Net Metering. When the Company implemented its Net Metering program,
the Commission order3 stated:
The net metering tariffproposed by the Company provides its customers with the
opportunity to offset their electric loads and energy requtements. This opportunity
to run the meter backwards and offset usage is the primary purpose of net
metering... The purpose of net metering is not to encourage excess generation.
Developers of qualifuing renewable generation resources who wish to get into the
2 $2 per watt is not an unreasonably low price, because Tesla now offers an 8.16 kW solar system for $16,000 or at a
price of about $1.96 per watt.
3 In the Matter of the Petition of NW Enetgt Coalition and the Renewable Northwest Pruject to Establish Net
Metering Schedules for Pact/iCorp. Case No. PAC-E-03-04, Order No. 29260.
LourcrUsage
(1,000 kWh/mnth)
Base Usage
(1.591 kWh/month)*
Higher Usage
(2.000 kWh/rmnth)
Low Cost Svstem ($2.00/TPC)8.6 6.9 6.6
Base Cost System ($2.75l\\Pc)*t2.0 9.6 9.1
High Cost System ($4.00/UPc)17.8 t4.2 13.4
business of selling energy to the Company should, under PURPA, request firm or
non-firm energy purchase contacts.
REOTIEST FOR RELIEF
WHEREFORE, Rocky Mountain Power respectfully requests that the Commission issue
an order authorizing the Company to close Electric Service Schedule 135 to new customer
participation and cap it at the levels in place, effective at midnight local time, July 31, 2020 and
approve a l5-year grandfathering period. Rocky Mountain Power respectfully requests that the
Commission grant the study design in its Supplemental Application and the above modification to
the grandfathering period for current Net Metering customers.
DATED this 2'd day of July 2020.
Respectfu lly submitted,
ROCKY MOUNTAIN POWER
Emily Qtro hac vice)
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone No. [phone]
Mobile No. (385) 227 -247 6
Email: Emily.weeener(@pacificorp.com
Attorneys for Roclgt Mountain Power