20200706Revised Comments.pdf

EDWARD JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10446
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 CUSTOMERS
GENERATORS FOR EXPORTED ENERGY
ATTCIIVEB
ICZI JUL -2 Pl{ 3: 18
CASE NO. PAC-E-19.08
REVISED COMMENTS OF
THE COMMISSION STAFF
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Street Address for Express Mail:
I I331 W CHINDEN BVLD, BLDG 8, SUITE 2OI-A
BOISE, TD 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Edward Jewell, Deputy Attomey General, submits the following comments.
BACKGROUND
On June 14,2019, Rocky Mountain Power, a division of PacifiCorp ("Rocky Mountain
Power" or o'Company") filed an Application requesting the Commission close Electric Service
Schedule 135 - Net Metering Service ("Schedule 135" or'Net Metering Program") to new
customer participation as of December 31,2019, and open Electric Service Schedule 136 -Net
Billing Service ("schedule 136" or'Net Billing Program") to new customer participation as of
February 1,2020.
On July 18,2019, the Commission issued a Notice of Application and Notice of
Intervention Deadline. Order No. 34379. Idaho Irrigation Pumpers Association, Inc., Idaho
Conservation League, and Idaho Clean Energy Association, Inc. intervened.
On December 20,2019, the Commission issued a final order in IPC-E-I8-15 rejecting a
proposed Settlement Agreement for Idaho Power's net metering program. Order No. 34509.
ISTAFF COMMENTS ruLY 2,2020
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 Application in light of the Commission's directives in Order Nos. 34509 and34546
issued in IPC-E-18-15.
On April 23,2020, Rocky Mountain Power submitted a supplemental application
("Supplemental Application") with updated inputs to the proposed Export Credit Rate and an
updated proposal regarding grandfathering treatment for existing customers.
On April 28,2020, Commission Staff presented a Decision Memorandum at the
Commission's regularly scheduled Decision Meeting outlining the proposed procedure and
schedule agreed to by the parties.
On May 6,2020, the Commission issued Order No. 34661 which adopted the "two-
phase" approach the Commission ordered for Idaho Power in Order No. 34509 and
recommended by parties in this case. The two-phase approach consists of a study design phase
and a study review phase, with opportunities for public input during both phases. The study
design phase provides the parties and the public the opportunity to comment on the scope and
parameters of the study. Following the study design phase, the Commission will issue an order
establishing the scope and parameters of the study. The Company then will conduct the study
and file it with the Commission. The study must be understandable to the average customer, but
its analysis must withstand expert scrutiny. After the Company files the study, the Commission
will issue an order establishing the procedure and schedule for the study review phase. The
study review phase will allow parties and the public to state whether the study was conducted in
a credible and fair manner and whether the study is sufficiently comprehensive to support a well-
informed decision regarding Rocky Mountain Power's net metering service offerings.
Rocky Mountain Power submitted a Supplemental Application in this docket, which
supersedes the Company's original application.
The Company proposes to close its current Net Metering Program to new participants as
of July 31,2020. The Company proposes that Schedule 135 customers remain on Schedule 135
until July 31,2030, grandfathering existing customers to the terms of Schedule 135 for l0 years.
2STAFF COMMENTS ruLY 2,2020
Arguments pertaining to the Company's proposed grandfathering treatment for existing
customers will be considered in the study design phase.
The Company requests the Commission establish Schedule 136 - Net Billing Program
effective September 1,2020. The Company proposes that customers who apply to interconnect
an onsite generation system after July 31,2020 take service under Schedule 136.
The Company states the only difference between its current Schedule 135 and its
proposed Schedule 136 is that under Schedule 136, energy exported to the grid by a customer
generator would be compensated at an export credit rate ("Export Credit Rate").
The Company requests the Commission open Schedule 136 for new customers as of
September 1,2020, but initially set the Export Credit Rate equivalent to retail energy charges
until the Commission approves an Export Credit Rate.
The Company proposes three components to determine the Export Credit Rate: an energy
component, an avoided line losses component, and an integration cost component.
The Company proposes using the Surrogate Avoided Resource ("SAR") method, with
on-peak and off-peak pricing, to determine the energy value in the Export Credit Rate. The SAR
method is used by the Commission to calculate published avoided cost prices under the Public
Utility Regulatory Policies Act of 1978. The SAR method reflects the costs the utility would
incur if it were to build, operate, and maintain a natural gas fired combined cycle combustion
turbine. Based on20l9 data and the proposed SAR rates set to take effect on June 1,2020,the
Company calculates the average value of the SAR-based energy component at$22.34 per MWh.
For the value of avoided line losses, the Company proposes a value of $3.36 per MWh.
The Company states it must maintain reserve resources to integrate variable resources.
The Company calculates its integration costs, based on its 2019Integrated Resource Plan
("IIU"'), as $0.25 per MWh.
The Company proposes to recover exported energy credits for Schedule 135 and
Schedule 136 through the Company's Energy Cost Adjustment Mechanism ("ECAM").
The Company reports about 1,262 clstomers with a total of 9.3 megawatts installed
capacity participate under Schedule 135 as of the end of March2020.
The Company proposes a one-time non-refundable application fee of $85 be submitted
with the customer's application for on-site generation.
STAFF COMMENTS ruLY 2,2020J
On June 16 and June 18, 2020, the Company and Staff held respective public workshops.
Due to COVID-19, these public workshops were held virtually and a telephonic option was
provided. Both workshops were held after preliminary comments were filed and before revised
comments were filed to provide an opportunity for parties to incorporate public feedback into the
revised comments.
The Company proposes no changes to retail consumption rates in this docket. On
March 26,2020, Rocky Mountain Power filed a Notice of Intent to File a General Rate case.
In its Supplemental Application, the Company states it intended to file a general rate case on
June 1, 2020. Rate design and cost of service issues for consumption will be addressed in that
docket.
STAFF ANALYSIS
Stafls revised comments in this matter address the feedback received from the public
during the Staff workshop on June 18,2020. The majority of customer feedback received at the
workshop focused on supporting a grandfathering period for existing customers of at least 25
years, expressing concern about the low proposed export credit rate, and very strongly opposing
the annual expiration of rate credits. In addition to incorporating public feedback, Staff s revised
comments provide additional detail on the scope, methods, and sources that Staff recommends
the Commission order the Company to adopt for its comprehensive study of the costs and
benefits of net metering.
A limited number of customers participated in the workshops, but those who did were
well informed on the issues. Several customers questioned the motivation for the Company's
filling. One customer said that the increase in net metering is driven by expiring federal tax
incentives and that the Company is using the recent growth in the program as an opportunity "to
kill it when it looks scary." Another customer found it strange that a large investor-owned utility
would be so concerned with 1 .49%o of its Idaho customers.
Grandfathering Existing Net Metering Customers
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
21-year proposed grandfathering period is reasonable, in part because they state that 25 years is
4STAFF COMMENTS JULY 2,2020
the basic warranty period for most rooftop solar systems. One customer stated he did not
understand the basis for the Company's 10-year grandfathering proposal. Another customer
asked about the variability in payback periods for different customers. That customer astutely
pointed out that the Company says it used an ooaverage" customer costs to calculate the payback
period. However, solar prices have been dropping steeply in recent years, so early adopters
likely have a longer payback period, which means that the "ayerage" customer may not
accurately represent payback periods for many customers.
Another customer said he had invested significant money in his panels with the
understanding that the net metering program had been vetted and approved by the Commission
and Rocky Mountain Power to ensure that the'orates and structure itre sustainable," and now felt
"duped, tricked, misled, defrauded, [and] hoodwinked" upon now hearing that "net metering
schedule 135 was misguided and likely sent erroneous rate signals..." and believes that he and
similarly situated customers should be "held harmless." Yet another customer said he made a
"significant financial investment" and considers the Company's proposal a "bait-and-switch
maneuver." He further stated that changing the terms for new net metering customers is
reasonable, but not for existing customers.
However, some customers pointed out that the grandfathering period should go beyond
25 years because solar panels can be replaced to extend the life of the system, in the same way
that a utility-owned generation source regularly replaces parts in order to continue running for
many years past its originally anticipated life span. Several customers said grandfathering
should be extended in perpetuity, and one pointed out that the "term "grandfathered" by
definition means never changed or ended."
One customer stated the grandfathering period should be analyzed in the Company's
comprehensive study. Another voiced doubt about the approximate l0 centslkWh subsidy
identified by the Company and pointed out that if the avoided cost of generation is greater than
the subsidy, then the exported energy is a net benefit to the grid. One customer asked if the
subsidy means that the Company is losing revenue.
At the public workshop, Staff specifically asked for feedback on the value of a transition
period (or glide path) which could be used to phase in the change from the retail rate to a lower
export credit rate. One customer pointed out that moving from the "15 cent credit to a2 cent
5STAFF COMMENTS JULY 2,2020
credit is a huge jump" and another said that the value of the transition period depended on the
final export credit rate.
One customer observed that while the Company claims it is correcting a subsidy, it has
not demonstrated that other customers are harmed, and that "belief is not evidence." Staff notes
that no non-metering customers have voiced concern about the subsidy or submitted comments
supporting the Company's proposal.
In order to respond to customer feedback on grandfathering, Staff recommends the
Company quantiff the impact of grandfathering based on the Company's lO-year proposal,
Stafls 2l-year proposal, a35-year time period, and a 50-year time period, which is intended to
provide a starting approximation for the perpetual grandfathering recommended by some
customers.
Staff also recommends analyzing the impact of those grandfathering periods under a
range of Export Credit Rates, including the current retail rate and the Company's proposed
Export Credit Rate as bookends. Additionally, Staff recommends analyzing the impact of a7.4
cent/kWh credit, which is the median of current retail rate and the Company's proposed Export
Credit Rate, and a 5 cent/kWh credit, intended to be a proxy for the possible increase to the
Export Credit Rate under Staff s proposed rate components. Lastly, Staff recommends analyzing
the impact of a range of transition periods, beginning with the 3-year transition period proposed
as an alternative in the Company's original Application, and 5, 10, and 15-year transition periods
to understand the impacts of those possible options on net metering customers and the Company.
Therefore, Staff now recommends that the Commission order the Company to analyze
the impact of grandfathering as follows:
l. Quantiff the dollar amount expected to be recovered from non-net metering
customers and paid to net metering customers over 10, 25,35, and 50-year
grandfathering periods. The quantification for each grandfathering period should
be analyzed using the current retail rate, a7.4 centslkWh Export Credit Rate, a 5
cents/kWh Export Credit Rate, and the Company's proposed 2.23 cents/kWh
Export Credit Rate. This analysis should take into account how a reduced Export
Credit Rate will impact future customer adoption.
2. Quantifu the dollar amount required to be collected from each rate class under the
scenarios listed in l.
6STAFF COMMENTS JULY 2,2020
3. Quantiff the bill impacts that these proposed Export Credit Rates would have to a
distribution of differently-situated customers in each rate class (i.e. different usage
levels).
4. Quantifu the dollar amount required to be collected from each rate class if the
transition from the current retail rate to the Company's proposed 2.23 cents/kWh
was phased in over 3, 5, 10, and 15 years. This analysis should take into account
how a reduced Export Credit Rate will impact future customer adoption.
Application Fee
Customers did not have any feedback on the Company's proposed application fee or the
StafPs recommendation for veriffing that amount. In order to confirm the costs and calculation
of this proposed fee, Staff recommends that the Commission direct the Company to:
5. Provide the costs that the Company has incurred processing applications for net
metering customers for the past 3 years and then calculate an average rate per
application.
Recovering Export Credit Rates in the ECAM
Customers did not have any feedback on the Company's proposal to recover the Export
Credit Rate in the ECAM. In order to understand how the bill credits paid to net metering
customers are currently booked, how the Company's proposal would differ from the current
method, and the impact of those methods on each customer rate class, Staff recommends that the
Commission direct the Company to:
6. Explain the method currently used to record net metering bill credit costs.
7. Quantiff the current annual amount of the net metering costs allocated to each
class.
8. Present and explain how these costs have been allocated and recovered between
rate classes for the past five years.
9. Quantifu these costs per year under the assumptions that the Export Credit Rate is
the retail rate, 7 .4 cents/kWh, 5 cents/kWh, and 2.23 cents/kWh.
10. Analyze how these bill credit costs would be allocated and recovered by rate class
through the Company's proposed ECAM method going forward.
7STAFF COMMENTS JULY 2,2020
Export Credit Rate
Customers who attended the Staff workshop and filed comments are strongly opposed to
moving from the retail rate credit to a significantly reduced Export Credit Rate if it is applied to
existing customers. Customers are much more open to moving to the Export Credit Rate for new
net metering customers, who they believe would be fully aware of the payback period under
which they are making a large financial commitment.
Customers doubted the validity of the Company's calculation which resulted in such a
small Export Credit Rate value. One described it as "outlandish" and o'intended to severely chill
solar investment in Idaho." Several mentioned that it was not reasonable for the Company to
buy their exported energy at2.23 cents/kWh and then immediately sell it to their neighbor using
local distribution lines for the retail rate of approximately 12.5 centsikWh: "it doesn't seem right
that the excess power I produce can be used by Rocky Mountain Power to be resold to customers
for far more than they are compensating me for it." Others mentioned that the Company had not
studied the environmental, economic, and reliability benefits associated with net metering.
Modeled Dqta as a Proxyfor Actual Customer Export Data
Customers did not have any specific feedback on the Company's use of modeled data to
calculate the Export Credit Rate. In order to establish the need and ability to rely on modeled
data to calculate the Export Credit Rate, Staff recorrmends the Commission order the Company
to:
11. Confirm when a full year of hourly AMI export data will be available for its net
metering customers.
12. Explain the Company's method for verifring and validating the accuracy of its
model and modeled customer export data.
Avoided Energt Value
Customers clearly understood that they are providing a resource to the Company and
other customers. Staff believes that the assumptions and adjustments the Company used in its
proposed avoided energy value do not align with the value the Company uses for other resources
Staff recommends the Commission direct the Company to:
8STAFF COMMENTS JULY 2,2020
13. Calculate the avoided cost of exported energy using the energy price assumptions
in its most recently acknowledged IRP.
14. Provide the calculations and documentation showing why the avoided cost of
exported energy produced by net metering customers should only be valued at
85% ofthe total avoided energy value.
Avoided Capacity Value
At least one customer identified the potential capacity value of net metering when he
cited the increased value of westerly-oriented panels that provide exported energy 'khen power
demand and rates are at their greatest" and its ability to "shift peak usage from peak periods
thereby reducing costs for everyone." Because the Company has not attempted to establish the
capacity value of exported energy, this customer and others would not be compensated for any
capacity value they provide as a class to the system.
In addition to noting the capacity value of net metering, that customer also identified a
concern similar to that described by Staff: that unconfirmed assumptions about panel orientation
included in the modeled data on which the capacity value calculation is based can have an
inordinate impact on the outcome. Staff also believes it is critical to analyze the avoided
capacity value on a class, or aggregate, basis in order to fairly reflect the resource as a whole.
In order to assure that customers are compensated for any capacity value that they
provide on a class basis, Staff recommends that the Commission order the Company to:
15. Analyze the capacity value of exported energy provided by net metering
customers on a class basis using one of two methods:
a) a Loss of Load Probability Study, or
b) determine the power that is reliably exported to the grid by net metering
during peaking events. Staff recommends using a reliability threshold of
99.5%. If, for example, the study determines that customer-generators
provide no less than 1.5 MW of power during 995% of the peaking
events, then Staff would recommend using 1.5 MW as the basis for
determining the capacity avoided by the customer-generator class. Staff
believes that an accurate estimate of the power reliably exported during
9STAFF COMMENTS ruLY 2,2020
peaking events can be obtained using the top 100 peaking events from
each ofthe past 10 years (1,000 peaking events).
16. Provide hourly time-differentiated capacity values.
Avoided Line Losses
Some customers pointed out that locally produced energy provides value because it does
not have to be transported long distances from the generation site to consumption centers. While
Staff believes that the Company's avoided line loss calculation appears reasonable, it is part of a
complex system loss study that may not be clear to most customers. In order to allow customers
an opportunity to meaningful digest that study, the Staff recommends that the Commission order
the Company to:
17. Explain the avoided line loss calculations at a level that an average customer can
understand.
Integration Costs
One net metering customer stated that it is unreasonable for the Company to treat them as
large-scale power producers in some, but not all, respects. Staff agrees that the Company has
done this by inappropriately assuming that utility-scale wind and solar projects can be used as a
reasonable proxy for the integration costs associated with residential net metering customers and
analyzingthose costs on an individual customer basis, rather than on a class basis. In addition,
Staff believes that net metering integration costs cannot be reasonably determined using the
Company's proposed methodology because it does not address the variability of these resources.
Staff recommends the Commission order the Company to:
18. Study other methods for determining the integration costs of net metering
customers as a class, calculate the dollar impact of deferring a study of the
integration charge for net metering customers until AMI data is available, and if
different, calculate the dollar value of using a zero placeholder until AMI data is
available.
STAFF COMMENTS 10 JULY 2,2020
Avoided Transmission and Distribution Costs
Customers were interested in quantifring the value of locally produced energy that can
avoid the infrastructure required to move energy produced at distant generation plants to load
centers. Staff agrees that those costs which can be deferred should be included in the export
credit calculation. Therefore, Staff recommends that the Commission order the Company to:
19. Quantiff the value of transmission and distribution costs that could be avoided by
energy exported to the grid by net metering customers by using the methodology
it uses for calculating the avoided transmission and distribution costs provided by
energy efficiency programs.
Avoided Environmental Costs and Other Benefits
While customers stated their primary motivation for installing panels was economic,
customers also pointed out that additional benefits of net metering have not been included in the
Company's proposal. Customers stated that net metering can provide environmental and
economic benefits, increased grid resilience and protection against cybersecurity threats. Less
quantifiable, but still quite valuable to customers, is the ability for them to contribute to their
own energy needs and foster independence, a core Idaho value.
One customer noted that combining rooftop solar panels with a Tesla Powerwall can
protect the Company's Idaho customers from outages caused by the frequent Southeastern Idaho
winter storms, including the potential damage caused by frozen pipes, which the customer pays
to repair, not the Company.
In response to customer feedback on these benefits, Staff recommends that the
Commission order the Company to analyze and quantifr net metering contributions to:
20. Quantiff the value of grid stability, resiliency, and cybersecurity protection.
21. Quantifu the value of economic benefits, including local job creation and
increased economic activity in the immediate service territory.
22. Quantiff the value of environmental benefits, including reduced greenhouse gas
emissions and improved water quality.
23. Quantiff the possible value of Renewable Energy Credit sales produced by net
metering exported energy.
STAFF COMMENTS il JULY 2,2020
Schedule 136 Issues
Billing Structure
There was some discussion at the Staff workshop about how the Company proposes to
bill customers in its proposal, in particular before AMI is installed in the Company's Idaho
service territory. After AMI is available, customers will be billed for consumption and credited
for exports on a near-instantaneous basis, without the need to net consumption and production on
a monthly basis, as is the Company's current practice, or on an hourly basis, as some utilities
have considered. However, it is less clear how the Company plans to bill customers in the time
between when the proposed Export Credit Rate would take effect and AMI is installed.
Therefore, Staff recommends the Commission order the Company to:
24.Explainhow the Company proposes to bill net metering customers until AMI is
implemented in its Idaho service territory.
Additionally, at least one customer strongly recommends that the Company institute a
time-differentiated rate for exports rather than a single flat rate, in order to incent customers to
design their systems and panel orientation to provide energy when it is most needed. Staff notes
that the Company has proposed time and seasonally differentiated periods for the Export Credit
Rate, but the time periods are quite broad. Therefore, Staff recommends that the Commission
order the Company to:
25. Explain if and how seasonal and time-of-delivery price differences will be used to
help align customer generated exported energy with the Company's system needs,
26. Explain if and how using more granular time periods for differentiating energy
and capacity credits could be used to more closely align customer-generated
exports with the Company's system needs.
Export Credit Expiration
In addition to a l0-year grandfathering period, the Company's proposal that export
credits expire annually was the issue that customers most strongly objected to at the Staff
workshop and in written comments.
Several customers pointed out that the Company only proposed customer benefits of net
metering expire, it does not propose similar treatment for itself. One customer stated that "The
STAFF COMMENTS t2 ruLY 2,2020
expiration of credits doesn't make sense- when the Company sells the energy I produce to other
customers, the revenue the Company collects doesn't expire." Another said, PacifiCorp "is also
looking to make credits expire as they are too difficult to track over the long term even though
they have already resold that power and have no problems tracking money owed them." A third
customer noted that "unpaid bills don't expire."
Other customers pointed out that the preservation of those credits is important for their
personal finances. One cited a friend who has significant credits and uses them towards
electricity costs in future winters. Another customer said they only produce energy in the
summer and need the credits to get through the winter.
Additional customers pointed out that "people converting their homes from natural gas to
electricity, or buying electric vehicles, may increase usage and therefore the use of bill credits"
and that'owith financial credits, the value [of the bill credit] diminishes over time as electric rates
go up. Another customer described the Company's proposal to expire bill credits as "criminal."
Staff shares customers' concerns on this issue. The Company's stated reason for annual
credit expiration - that it encourages customers to right-size their system - incorrectly assumes
that customer consumption remains stable from year to year. But annual consumption can vary
significantly based on weather, so a system designed to meet a customer's average usage will
overproduce in sunny summers and underproduce in cloudy or rainy summers. Similarly, a
customer's annual consumption can also vary considerably depending on whether it is a hotter
than usual su[rmer or a colder than usual winter. Similar weather and temperature patterns often
occur together over a series of years, which means that customers could over-produce and/or
under-consume for several years in a row.
Annual expiration of credits would significantly harm these customers by erasing a
benefit they spent significant funds to acquire. It is also important to note that if a cost-based
Export Credit Rate is adopted, these customers will not be over-compensated for the energy they
produce, which raises the question about why those credits should expire. Further, because
exported energy is compensated with a bill credit rather than a check, there is no economic
incentive for customers to invest in an oversized system that will generate bill credits far in
excess of what they can ever use even if the bill credits do not expire.
In order to establish whether a bill credit expiration period is necessary, and if so, what an
appropriate term might be, Staff recommends the Commission order the Company to:
STAFF COMMENTS 13 JULY 2,2020
27. Quantify the magnitude, duration, and value of accumulated export credits as of
August 1,2020.
28. Quantifu the impact to customers of a 2-year,5-year, and lO-year expiration
periods.
29. Explain the need for credits to expire and show how the Company does or does
not benefit from the expiration of customer export credits.
Frequency of Export Credit Rate Updates
Customers did not comment on the Company's proposal to update the Export Credit Rate
annually. However, Staff believes that such frequent updates could jeopardize bill stability for
customers and make it difficult for them to reasonably estimate payback periods when
determining whether to invest. Staff recommends including the additional proposed components
of the Export Credit Rate, including an avoided capacity value, in this analysis if those
components are approved by the Commission. Therefore, Staff recommends that the
Commission order the Company to:
30. Quantiff the impact of biennial updates as compared to annual updates of the
Export Credit Rate by comparing the changes in the SAR energy rate,line losses,
and integration costs using historical data over one year, one IRP cycle (two
years), and two IRP cycles (four years).
Smart Inverter Study
Several customers' comments mentioned the benefits that smart inverters could provide
to the Company's grid if incorporated as part of the net metering program and noted that value
had not been included in the Company's proposed Export Credit Rate. Staff agrees that smart
inverters have the potential to provide grid benefits and notes that the Company has already
developed a smart inverter policy for its Utah service territory. In order to understand if
applying a similar policy in Idaho would yield benefits, Staff recommends the Commission order
the Company to:
31. Explain the key aspects of the Company's Utah smart inverter policy and quanti$
the benefits of applying that policy in its Idaho service territory, in particular, the
potential benefits of reactive power control.
ruLY 2,2020STAFF COMMENTS t4
CUSTOMER COMMENTS
Staff wishes to thank the customers who took the time to participate in the Staff
workshop, the Company workshop, the Commission's public hearing, and provide written
comments.
STAFF' RECOMMENDATION
Staff recommends the Commission order the Company to conduct its comprehensive
study of the costs and benefit of net metering according to Study Recommendations 1-31 listed
in these comments and in Attachment A.
,")
Respectfully submitted this 2'day ofJuly 2020
Edward J
Deputy General
Technical Staff: Stacey Donohue
Rachelle Famsworth
Kevin Keyt
Mike Morrison
Joe Terry
Chris Hecht
i:umisc/comments/pace l9.8ejsdrfkkmmjtch revised comments
STAFF COMMENTS l5 ruLY 2,2020
Attachment A: Staffs PaciliCorp Net Billing Study Design Recommendations
PAC-E-19-08
Grandfathering Existine Net Metering Customers
1. Quantiff the dollar amount expected to be recovered from non-net metering customers
and paid to net metering customers over 10, 25,35 and 50-year grandfathering periods.
The quantification for each grandfathering period should be analyzed using the current
retail rate, a 7.4 cents/kWh Export Credit Rate, a 5 cents/kWh Export Credit Rate, and
the Company's proposed2.23 centslkWh Export Credit Rate. This analysis should take
into account how a reduced Export Credit Rate will impact future customer adoption.
2. Quantifu the dollar amount required to be collected from each rate class under the
scenarios listed in 1.
3. Quantiff the bill impacts that these proposed Export Credit Rates would have to a
distribution of differently-situated customers in each rate class (i.e. different usage
levels).
4. Quantiff the dollar amount required to be collected from each rate class if the transition
from the current retail rate to the Company's proposed 2.23 centskWh was phased in
over 3, 5, 10, and 15 years. This analysis should take into account how a reduced Export
Credit Rate will impact future customer adoption.
Application Fee
5. Provide the costs that the Company has incurred processing applications for net metering
customers for the past 3 years and then calculate an average rate per application.
Recoverins Exnort Credit Rates in the ECAM
6. Explain the method currently used to record net metering bill credit costs.
7. Quantiff the current annual amount of the net metering costs allocated to each class.
8. Present and explain how these costs have been allocated and recovered between rate
classes for the past five years.
9. Quantifu these annual costs under the assumptions that Export Credit Rate is the retail
rate,7.4 cents/kWh, 5 cents/kWh, or 2.23 cents/kWh.
Attachment A
Case No. PAC-E-I9-08
Revised Staff Comments07102120 Page I of4
10. Analyze how these costs would be allocated and recovered by rate class through the
Company's proposed ECAM method going forward.
Export Credit Rate
Modeled Data as a Proxyfor Actual Customer Export Data
11. Confirm when a full year of hourly AMI export data will be available for its net metering
customers.
12. Explain the Company's method for verifring and validating the accuracy of its model and
modeled customer export data.
Avoided Energt Value
13. Calculate the avoided cost of exported energy using the energy price assumptions in its
most recently acknowledged IRP.
14. Provide the calculations and documentation showing why the avoided cost of exported
energy produced by net metering customers should only be valued at85o/o of the total
avoided energy value.
Avoided Capacity Value
15. Analyze the capacity value of exported energy provided by net metering customers on a
class basis using one of two methods:
a) a Loss of Load Probability Study, or
b) determine the power that is reliably exported to the grid by net metering during
peaking events. Staff recommends using a reliability threshold of 99.5%. If, for
example, the study determines that customer-generators provide no less than 1.5
MW of power during 99.5% of the peaking events, then Staff would recommend
using 1.5 MW as the basis for determining the capacity avoided by the customer-
generator class. Staff believes that an accurate estimate of the power reliably
exported during peaking events can be obtained using the top 100 peaking events
from each ofthe past 10 years (1,000 peaking events).
16. Provide hourly time-differentiated capacity values.
Attachment A
Case No. PAC-E-19-08
Revised Staff Comments07102/20 Page2 of 4
Avoided Line Losses
17. Explain the avoided line loss calculations at a level that an average customer can
understand.
Integration Costs
18. Study other methods for determining the integration costs of net metering customers as a
class, calculate the dollar impact of defening a study of the integration charges for net
metering customers until AMI data is available, and if different, calculate the dollar value
of using azero placeholder until AMI data is available.
Avoided Transmission and Distribution Costs
19. Quantifu the value of transmission and distribution costs that could be avoided by energy
exported to the grid by net metering customers by using the methodology it uses for
calculating the avoided transmission and distribution costs provided by energy efficiency
programs.
Avoided Environmental Costs and Other Benefits
20. QuantiS the value of grid stability, resiliency, and cybersecurity protection.
21. Quantif,, the value of economic benefits, including local job creation and increased
economic activity in the immediate service territory.
22. Quantifu the value of environmental benefits, including reduced greenhouse gas
emissions and improved water quality.
23. Quantifu the possible value of Renewable Energy Credit sales produced by net metering
exported energy.
Schedule 1 36 Implementation Issues
Billing Structure
Z4.Explainhow the Company proposes to bill net metering customers until AMI is
implemented in its Idaho service territory.
25. Explain if and how seasonal and time-of-delivery price differences will be used to help
align customer generated exported energy with the Company's system needs.
Attachment A
Case No. PAC-E-19-08
Revised Staff Comments
07102/20 Page 3 of 4
26. Explain if and how using more granular time periods for differentiating energy and
capacity credits could be used to more closely align customer-generated exports with the
Company's system needs.
Export Credit Expiration
27. Quantifu the magnitude, duration, and value of accumulated export credits as of August
1,2020.
28. Quantifr the impact to customers of a 2-yea4 5-year, and 10-year expiration periods.
29. Explain the need for credits to expire and show how the Company does or does not
benefit from the expiration of customer export credits.
Frequency of Export Credit Rate Updates
30. Quantiff the impact of biennial updates as compared to annual updates of the Export
Credit Rate by comparing the changes in the SAR energy rate, line losses, and integration
costs using historical data over one year, one IRP cycle (two years), and two IRP cycles
(four years).
Smart Inverter Study
31. Explain the key aspects of the Company's Utah smart inverter policy and quantifu the
benefits of applying that policy in its Idaho service territory, in particular, the potential
benefits of reactive power control.
Attachment A
Case No. PAC-E-19-08
Revised Staff Comments
07102120 Page 4 of 4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 2'd DAY OF JULY 2020,
SERVED THE FOREGOING REVISED COMMENTS OF THE COMMISSION
srAFF, IN CASE NO. PAC-E-19-08, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:
TED WESTON
ROCKY MOI-]NTAIN POWER
I4O7 WEST NORTH TEMPLE STE 330
SALT LAKE CITY UT 84116
E-MAIL: [e-mail]
EMILY WEGENER
ROCKY MOI.INTAIN POWER
I4O7 WN TEMPLE STE 320
SALT LAKE CITY UT 84116
E-MAIL: [e-mail]
[e-mail]
DATA REQUEST RESPONSE CENTER
E.MAIL ONLY:
datareque st@pacifi corp. com
ERIC L OLSEN
ECHO HAWK & OLSEN PLLC
PO BOX 61 19
POCATELLO ID 83205
E-MAIL: [e-mail]
ANTHONY YANKEL
I27OO LAKE AVE
UNIT 2505
LAKEWOOD OH 44107
E-MAIL: [e-mail]
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
710 N 6TH ST
BOISE ID 83702
E-MAIL : [e-mail]
PRESTON N CARTER
GIVENS PURSLEY LLP
601 W BANNOCK ST
BOISE ID 83702
E-MAIL : prestoncarter@ givenspursley. com
kendrah@ givenspursley. com
CERTIFICATE OF SERVICE