20200826Proposed_Order_on_Grandfathering_Order_No_34752.pdf

PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 1

Office of the Secretary
Service Date
August 26, 2020

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

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
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CASE NO. PAC-E-19-08

PROPOSED ORDER ON
GRANDFATHERING EXISTING
CUSTOMER-GENERATORS

ORDER NO. 34752

On June 14, 2019, Rocky Mountain Power, a division of PacifiCorp (“Rocky Mountain
Power” or “Company”) applied to the Commission for an order closing Electric Service Schedule
135 – Net Metering Service (“Schedule 135” or “Net Metering Service”) to new customer’s after
December 31, 2019, and grandfathering, for ten years, customers who are on Schedule 135 as of
December 31, 2019. The Company also proposed opening Electric Service Schedule 136 – Net
Billing Service (“Schedule 136” or “Net Billing Service”) to new customer’s as of February 1,
2020 (“Original Application”). Original Application at 1.
On July 18, 2019, the Commission issued a Notice of Application and Notice of
Intervention Deadline. Order No. 34379.
On December 20, 2019, the Commission issued a final order in IPC-E-18-15 rejecting
a proposed Settlement Agreement for Idaho Power’s net metering program. Order No. 34509. On
February 5, 2020, the Commission issued a final order on reconsideration in IPC-E-18-15
upholding its decision to reject the proposed Settlement Agreement. Order No. 34546.
On March 10, 2020, the parties met to discuss how to proceed with Rocky Mountain
Power’s Original Application given the Commission’s directives in Order Nos. 34509 and 34546
issued in IPC-E-18-15.
On April 23, 2020, Rocky Mountain Power submitted a supplemental application
(“Supplemental Application”). The Supplemental Application proposed to close Schedule 135 to
new customer’s as of July 31, 2020, and open Schedule 136 as of September 1, 2020. The
Supplemental Application also updated inputs to the Company’s proposed export credit rate
(“Export Credit Rate”).
On May 6, 2020, the Commission issued a Notice of Supplemental Application, Notice
of Public Hearing, and Notice of Comment Deadlines. Order No. 34661. The Commission
PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 2
established a procedure similar to that prescribed for Idaho Power in IPC-E-18-15 to design,
conduct, and review a study with multiple opportunities for public input before fundamental
program changes are implemented. See Order No. 34509 at 9. The Commission set a deadline of
May 26, 2020 for initial comments, July 3, 2020 for revised comments, and a deadline of July 16,
2020 for party reply comments and public comments on the study design phase. The Company
hosted a live-streamed public workshop on June 16, 2020. Commission Staff hosted a live-
streamed public workshop on June 18, 2020. The Commission held a telephonic public hearing
on June 22, 2020.
On July 31, 2020, the Commission suspended the Company’s proposed effective date.
Order No. 34745.
Idaho Irrigation Pumpers Association, Inc., Idaho Conservation League (“ICL”), Idaho
Clean Energy Association, Inc. (“ICEA”), and Monsanto Company have intervened as parties.
Now, the Commission issues a proposed order on grandfathering existing customer-
generators pursuant to Commission Rule of Procedure 312. Concurrently and separately, the
Commission issues Order No. 34753 outlining the scope of the study the Company is to conduct.
THE SUPPLEMENTAL APPLICATION
In its Supplemental Application, the Company makes the following specific requests
for immediate implementation:
that the Commission issue an order authorizing the Company to: (i)
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 . . . .;(ii) allow existing net metering customers and those
that apply for or complete interconnection before July 31, 2020 to
continue to stay on the program at the site until July 31, 2030; (iii)
offer a Net Billing program to new customer generators through
Schedule 136 for those who apply for interconnection starting
September 1, 2020; (iv) implement an $85 application fee for
customers that apply to interconnect a customer generation system
under the Net Billing program . . . . (v) require projects that apply
for interconnection before August 1, 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 Metering and Net Billing program
through the Company’s annual ECAM.
Supplemental Application at § IX.
PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 3
The Original Application and the Supplemental Application propose an Export Credit
Rate calculated by three components: an avoided energy value, avoided line losses, and integration
costs. The Company details its proposed methods of calculating the Export Credit Rate and
defends its proposals in its reply comments. However, the Company also states,
Schedule 136 is the same as Schedule 135 with one difference – any
energy exported to the GRID will be compensated at the Export
Credit Rate. Initially that Export Credit Rate would be the same as
retail energy charges until the Commission issues a final ruling on
the value of the Export Credit.
Supplemental Application at ¶ 22.
In its Supplemental Application, the Company asserts that Idaho Code § 61-622(4)
dictated a July 31, 2020 effective date based on the Company’s proposal in its Original Application
to close Schedule 135 as of December 31, 2020. Supplemental Application at ¶ 20-21. The
Commission does not agree with the Company’s analysis that the proposed effective date in the
Original Application and operation of Idaho Code § 61-622(4) dictate a July 31, 2020 effective
date and suspended the Company’s proposed effective dates to close Schedule 135 and open
Schedule 136. Order No. 34745.
GRANDFATHERING EXISTING CUSTOMER-GENERATORS
A. Commission Staff.
When Staff submitted its initial comments, roughly one month after the Company
submitted its Supplemental Application, only one customer comment had been received regarding
the Company’s Supplemental Application, reflecting that the Company had not yet advised its
customers it had filed the Supplemental Application. Staff Initial Comments at 14-15. Most
comments received related to the Company’s Original Application. Id. at 15. Staff also expressed
concern that the Company’s June 2019 letter to customers inaccurately described the Company’s
proposed changes. Id. at 14-15. Staff stated,
Staff expects that more customers will comment on the Company’s
Supplemental Application when it is noticed by the Company and
customer letters are distributed. Staff strongly recommends that the
Company carefully examine the content and timing of those
communications to ensure that they fully and accurately represent
the Company’s filing. Staff further recommends the Company
ensure those communications are received with sufficient time and
instructions for customers to participate in the Commission-ordered
PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 4
public workshops. Lastly, Staff recommends that the Company
distribute notice of its Supplemental Application and public
workshops broadly to all customers so that all interested customers
– not just net metering customers—have the opportunity to be heard
on this issue.
Id. at 15.
Staff’s revised comments relay customer comments received during the public
workshop held by Staff on June 18, 2020 and incorporate public comments submitted to the record.
Staff states, “Customers who attended the Staff workshop and filed comments are strongly
opposed to the 10-year grandfathering period proposed by the Company. Several customers
believe Staff’s 25-year proposed grandfathering period is reasonable, in part because they state
that 25 years is the basic warranty period for most rooftop solar systems.” Staff Revised
Comments at 4-5. Staff’s revised comments do not further address any additional efforts at
customer communications undertaken by the Company.
Staff states its belief that the same factors that led the Commission to grandfather
existing customer-generators in Idaho Power’s service territory in IPC-E-18-15 apply to the
customer-generators in Rocky Mountain Power’s service territory.
Staff believes that the logic and conclusions reached by the
Commission in Order Nos. 34509 and 34546 apply as much to
Rocky Mountain Power customers as they did to Idaho Power net
metering customers and should therefore be adopted in this case.
Rocky Mountain customers likely had an expectation that the
essential program structure under which they were installing net
metering equipment would remain intact, though rates for
consumption and bill credit could change.
Staff Initial Comments at 4. Staff’s revised comments recommend the Commission order the
Company to study the impacts of different grandfathering periods and apply different assumptions
regarding the future Export Credit Rate to be implemented. Staff Revised Comments at 6-7.
B. ICEA and ICL.
ICEA joined in and concurred with ICL’s initial and revised comments. ICEA
Comments on Study Design at 2, ICEA Revised Comments on Study Design at 1. ICEA states
that Rocky Mountain Power customers with on-site generation share the same characteristics that
the Commission determined justified grandfathering Idaho Power customer-generators in IPC-E-
18-15, and therefore submits that Rocky Mountain Power customers should be grandfathered
PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 5
under the terms established in Order Nos. 34509 and 34546 for Idaho Power customer-generators.
ICL also recommends the Commission apply the legacy rate treatment established in IPC-E-18-15
for Idaho Power customer-generators but wait until a successor program is in place. ICL Initial
Comments at 9.
C. Public Comments.
Public comments largely reflect the viewpoint of current customer-generators and
oppose the Company’s proposal to grandfather existing customer-generators for ten years.
Customer comments reflected an understanding that program fundamentals would not change over
the expected life of the resources. E.g., Public Comment Received July 8, 2020 (stating, “The
problem I have with this proposal is that people built these systems with the understanding that
they would be credited at the consumer rate for the life of the system. To change the terms seems
unethical considering the capital investment has already been made.”) Public comments
predominantly came in two time periods. The first in July 2019 following the Company’s Original
Application in June 2019, and the second in June and July 2020 following the Company’s
Supplemental Application in April 2020.
D. Rocky Mountain Power’s Revised Comments.
In its Original and Supplemental Application, the Company proposed a ten-year
grandfather period for existing customer-generators. See Original Application at ¶ 8-13,
Supplemental Application at ¶ 19-23. In its revised comments, the Company responded to
Commission Staff’s initial comments by calculating the present value revenue requirement
associated with grandfathering existing customer-generators under 10, 15, 20, and 25-year
scenarios. Rocky Mountain Power Revised Comments at ¶ 9, 10. The Company calculates the
present value of the revenue requirement to grandfather existing customer-generators based on
then-current participation levels to be $4.2 million over 10 years, $5.4 million over 15 years, $6.2
million over 20 years, and $6.8 million over 25 years. Id. at ¶ 10, Table 1. The Company also
calculated the potential payback periods for customers over a range of assumptions, arriving at 6.6
years for what the Company defined as low-cost/higher-usage systems and 17.8 years for what the
Company defined as high-cost/lower-usage systems. Id. at ¶ 11, Table 2. In its revised comments,
the Company modified its grandfathering proposal from 10 years to 15 years based on its analyses
and customer comments. Id. at ¶ 12, 13.
PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 6
Following its Original Application, Rocky Mountain Power issued a news release
stating the Company proposed to close Schedule 135 and open Schedule 136. The Company
stated, “Further, the company proposes that the commission approve a 10-year transition period
for existing customers on Schedule 135, Net Metering Service, to move to the new tariff, Schedule
136, Net Billing Service.” Rocky Mountain Power News Release dated June 14, 2019. The
Company also issued two letters to then-current customer-generators. The first stated, “Rocky
Mountain Power is proposing that existing customer-generators such as you would be able to stay
on the existing net metering program for a roughly ten-year period until June 1, 2029.” On June
25, 2019, the Company mailed a second customer notice to existing customer-generators
reiterating the same statement.
In its Supplemental Application the Company states it was waiting to determine
additional details about its workshops before notifying customers of its Supplemental Application.
Supplemental Application at ¶ 24-26. In its reply comments, the Company states,
On April 23, 2020, when the Company submitted its updated Export
Credit rate to the Commission once again it issued a press release
and included bill inserts informing all customers of the Company’s
proposed changes to the Net Metering program and of the public
workshop the Company would be hosting on June 16, 2020 to
explain its proposal and seek public input and comments.
Supplemental Application at ¶ 38. No copy of the bill inserts was provided. The Company does
not respond to Staff’s assertion that the Company’s prior customer notifications were misleading.
COMMISSION FINDINGS
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, 61-
502, and 61-503. The Commission is vested with the power to “supervise and regulate every
public utility in the state and to do all things necessary to carry out the spirit and intent of the
[Public Utilities Law].” Idaho Code § 61-501. The Commission is empowered to investigate
rates, charges, rules, regulations, practices, and contracts of public utilities and to determine
whether they are just, reasonable, preferential, discriminatory, or in violation of any provision of
law, and to fix the same by order. Idaho Code §§ 61-502 and 61-503. Commission Rule of
Procedure 312 authorizes the Commission to issue a proposed order.
The Commission may issue a proposed order in any proceeding.
Any party may file exceptions and briefs to a proposed order within
PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 7
twenty-one (21) days from its date of service, unless a different time
is designated by the Commission. Any party may file and serve
answers and accompanying briefs to the exceptions within seven (7)
days after service of the exceptions. The Commission may adopt or
revise the proposed order in response and issue a final order
accordingly. The proposed order is not an order of the Commission
unless it is adopted by order. In that case, the order of adoption is
the final order for all purposes.
IDAPA 31.01.01.312.
Based on the record, the Commission finds it is fair, just, reasonable, non-
discriminatory, and in the public interest to grandfather existing Rocky Mountain Power customer-
generators on the same terms the Commission granted existing Idaho Power customer-generators
in IPC-E-18-15. There has been no showing of how Rocky Mountain Power customer-generators
are differently situated than Idaho Power customers in their reasonable expectations of
fundamental program stability. The Commission has consistently tried to align the net metering
programs between Idaho utilities to the extent reasonable. See Order No. 29260 at 6.
Further, we lack confidence in the Company’s calculations of the costs to grandfather
existing customer-generators or in potential payback periods. We are concerned the calculation of
costs to non-participants to grandfather existing customer-generators do not fully convey the range
of potential costs to non-participants because they do not examine potential Export Credit Rates
higher than that proposed by the Company. Additionally, the costs embedded in the Company’s
payback analysis do not align with the Company’s own testimony regarding costs of on-site
generations. Compare Steward, Di at 6 with Supplemental Application at ¶ 11. The range of
prices to install an on-site generation system over the time in which the Company has offered
Schedule 135 is much wider than those calculated by the Company.
The Company’s Original Application, Supplemental Application, and reply comments
propose, reiterate, and defend a detailed method to calculate an Export Credit Rate. Yet the
Company does not request immediate implementation of the Export Credit Rate in its Requests for
Relief. See Supplemental Application at § IX. We agree that implementing the Export Credit Rate
as proposed by the Company would be premature. The Company’s proposals, including its Export
Credit Rate components, its inputs, and its proposed move to instantaneous netting from monthly
netting, need more scrutiny before implementation. In Order No. 34753, issued concurrently with
this order, the Commission delineates a scope of study for the Company to undertake. Upon
completion of the study, the Commission will initiate a public process to review the study and
PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 8
determine whether it was conducted in a credible and fair manner. Upon finding that the study is
credible and fair, the study can be a supporting piece of evidence for proposed program changes.
The Commission finds it fair and just to grandfather existing customer-generators as of the service
date of the adopting order, rather than wait until completion of the Company’s study and approval
of program changes. This approach will limit any possible cost shift from customer-generators to
non-participants and is consistent with prior net metering determinations. The Commission is
interested in recognizing the significant financial investment incurred by customer-generators on
a reasonable expectation of long-term program stability1, limiting the magnitude of the likely cost
shift, and also providing adequate opportunity to fully study the issues before determining
fundamental program changes. To appropriately balance these interests, the Commission
determines it is reasonable to grandfather existing customer-generators before the final
determination of program changes.
The Commission has long identified a potential cost shift from customer-generators to
non-participants under the program structure of Schedule 135. See Order Nos. 29260 at 7
(requiring an annual report regarding the subsidization of on-site customer-generators by non-
participants and stating, “The Commission recognizes that the full cost of the program we approve
today may not be borne only by participants.”); Order No. 33511 at 7 (removing the overall
participation cap but noting that the “subsidization level is currently small but growing[.]”) See
also PAC-E-16-09 Compliance Filings. The Commission recognizes recent rapid growth in the
on-site generation industry that might exacerbate cost shifts if the program structure is not
modernized. The Company reports that, as of June 2019, there were about 820 customer-
generators under Schedule 135 with a total installed nameplate capacity of 5.8 MW. By the end
of March 2020, there were 1,262 customer-generators with 9.3 MW of installed nameplate
capacity, a 60% increase in nine months. Supplemental Application at ¶ 5.
The Commission now issues a proposed order rather than making a final determination
because the Commission is concerned with the breadth and clarity of the Company’s customer
communications regarding its proposal. The record does not reflect the actual timing or language

1 This Commission has repeatedly asserted, and affirms here, that tariffs are not contracts and are subject to change
whenever this Commission finds the proposed change is fair, just, reasonable, non-discriminatory, and in the public
interest. The significant investment of net metering customers and general issues of fairness and reliance warrant
modified application of this standard principle under the present circumstances.

PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 9
used by the Company to notify customers of its Supplemental Application, and the language used
to notify customers of its Original Application is more vague than necessary.
We would like the Company to be more clear, direct, and timely in its communications
with customers regarding its on-site generation service offering. On-site generation provides
customers a unique opportunity to be active participants in their relationship with their electric
utility. The benefits and risks associated with being a customer-generator differ from the benefits
and risks of being a passive consumer of electricity. The utility is a trusted entity imbued with a
public purpose. It has the opportunity and the obligation to provide its customers with timely,
trustworthy, and accurate information regarding the utility’s service offerings to allow its
customers to make informed decisions about whether to pursue the potential benefits of being a
customer-generator while also incurring the associated risks.
The Company points to its notice to customers in its Interconnection and Net Metering
Service Agreement, titled “Governing Law” to support its assertion that customer-generators were
adequately notified that the program could change when they signed up for it.
As amended from time to time, the Idaho Statutes, Idaho
Administrative Rules (“IDAPA”) 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.
Rocky Mountain Power Revised Comments at ¶ 6. Similar to our findings in IPC-E-18-15, we
would like the Company to put a finer point on its customer communications regarding the
potential risk of program change when a customer is making a substantial financial investment
with a long payback period. This information should help the customer make a fully informed
decision. We reiterate that tariffs are not contracts and are subject to change whenever this
Commission finds the proposed change is fair, just, reasonable, non-discriminatory, and in the
public interest.
The Commission proposes to approve the Company’s request to close Schedule 135,
but to do so as of the service date of the adopting order. The Commission proposes to allow
customers who have applied to be on Schedule 135 as of the service date of the adopting order,
PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 10
but who have not yet interconnected their system, one year from the order’s service date to
interconnect their system under Schedule 135. The Commission proposes to approve the
Company’s request to open Schedule 136, but to do so as of October 1, 2020. Schedule 136 will
have no immediate changes from Schedule 135 other than an $85 application fee, but Schedule
136 customers will be subject to future program changes, whereas Schedule 135 customers will
take service consistent with the present terms of Schedule 135 as detailed below.
The Commission proposes to grant grandfathered status to existing customers with on-
site generation systems according to these terms:
1. The grandfathered status runs with the meter site, not the customer.
2. If a system is offline for over six months, or is moved to another site, the
grandfathered status of the system is forfeited.
3. The customer may increase the capacity of the grandfathered system by no
more than 10% of the originally installed nameplate capacity, or 1 kW,
whichever is greater.
4. The term of the grandfathering period is 25 years.
Further, the Commission proposes that an existing customer be defined as a customer who has:
1. Successfully interconnected an on-site generation system as of the service
date of the order of adoption in this case; or
2. Applied to the Company for interconnection of an on-site generation system
as of the service date of the adopting order of adoption and who successfully
interconnects their system within one year of the date of their application.
These criteria generally align with the criteria established for Idaho Power customer-generators in
IPC-E-18-15. Where they do not align, the terms outlined above apply to Rocky Mountain Power
customers and the terms outlined in the IPC-E-18-15 orders apply to Idaho Power customers. The
Commission also finds it in the public interest to extend the comment deadline for persons not
parties to the case as well. See IDAPA 31.01.01.013.
O R D E R
YOU ARE HEREBY NOTIFIED that any party may file exceptions and briefs to the
proposed order within twenty-one (21) days from the date of service. Any party may file and serve
answers and accompanying briefs to the exceptions within seven (7) days after service of the
exceptions. The Commission may adopt or revise the proposed order in response and issue a final
PROPOSED ORDER ON GRANDFATHERING
ORDER NO. 34752 11
order accordingly. The proposed order is not an order of the Commission unless and until it is
adopted by order. In that case, the order of adoption is the final order for all purposes. See IDAPA
31.01.01.312.
YOU ARE FURTHER NOTIFIED that any person may file comments on the
Commission’s proposed order until 28 days from date of service.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 26th
day of August 2020.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Jan Noriyuki,
Commission Secretary

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