STATE OF INDIANA INDIANA UTILITY REGULATORY COMMISSION JOHN E. HASELDEN ON BEHALF OF & LIGHT COMPANY

Transcription

1 Petitioner's Exhibit JEH-l STATE OF INDIANA INDIANA UTILITY REGULATORY COMMISSION VERIFIED PETITION OF INDIANAPOLIS ) POWER & LIGHT COMPANY REQUESTING ) THE INDIANA UTILITY REGULATORY ) COMMISSION TO APPROVE AN ) ALTERNATIVE REGULATORY PLAN ) PURSUANT TO IND. CODE 8-t-2.5-1,ETSEQ., ) FOR THE OFFERING OF ENERGY ) EFFICIENCY CONSERVATION, DEMAND ) RESPONSE AND DEMAND-SIDE ) MANAGEMENTPROG~SAND ) ASSOCIATED RATE TREATMENT ). INCLUDING INCENTIVES IN ACCORDANCE ) WITH IND. CODE ET SEQ. AND 8-1- ) 2-42(a); AUTHORITY 'TO DEFER PROGRAM ) COSTS ASSOCIATED WITH ITS ENERGY ) EFFICIENCY PORTFOLIO PROG~S; ) AUTHORITY TO IMPLEMENT NEW AND ) ENHANCEDENERGYPROG~SAND ) APPROVAL OF MODIFICATION OF THE ) FUEL ADJUSTMENT CLAUSE EARNINGS ) AND EXPENSE TESTS. ) CAUSE NO VERIFIED DIRECT TESTIMONY OF JOHN E. HASELDEN ON BEHALF OF INDIANAPOLIS POWER & LIGHT COMPANY SPONSORING PETITIONER'S EXHIBITS JEH-2 THROUGH JEH-5

2 Petitioner's Exhibit JEH-l A49. Q48. A48. Q49. would be unfair to subject the performance incentive resulting from implementation of the core DSM programs to the significant impact the advanced DSM program might have if it were included in the whole. As an example, if the implementation of the AMI communication system upgrade and demand rate meter upgrade program resulted in much greater demand and energy savings than currently anticipated and performance in the core DSM programs was less than anticipated, the resulting performance in total could be superior and an incentive of 30% would be earned on all qualified expenditures, notwithstanding the less than targeted performance of the core DSM programs. Implementation timing of the advanced DSM program is different than that of the core DSM programs which would also introduce unnecessary complications. Is IPL proposing any changes to its tariff as it relates to this DSM proceeding? Yes. IPL is proposing changes to its Standard Contract Rider No. 9 (Net Metering for Customers with Solar Photovoltaic, Wind, or Hydroelectric Systems), a new Standard Contract Rider No. 22 (Core and Advanced Demand-Side Management Adjustment), and a new Rate REP (Renewable Energy Production). Please explain the purpose of the changes to Standard Contract Rider No.9 and the new Rate REP. IPL is proposing changes to its Standard Contract Rider No.9 and the new Rate REP as part of its comprehensive effort to introduce more renewable energy resources into its portfolio of generating assets. As part of that effort, IPL entered into a long term power purchase agreement for wind energy which was approved by the Commission in Cause No This project is now under construction and will be completed later tbis year. Another step in that effort are the proposed Residential and Commercial and fudustrial. Haselden - 24

3 Petitioner's Exhibit JEH-l Renewables Incentives DSM programs that provide customer incentives for the installation ofrenewable generating resources on customer premises. The capital costs of small scale renewable resources has historically been high compared to the cost of conventionally produced power provided by electric utilities partly due to the lack of recognition of the environmental attributes of renewable energy production. Earlier attempts to provide more compensation for such projects included the arrangement of net metering wherein if a customer produces more renewable electric energy than is consumed at any point in time, then the excess is purchased by the serving electric utility and the customer receives a credit at the full retail rate on their bill. Since retail rates are higher than a utility's avoided generating costs, this is in effect a subsidy revenue stream 11 intended to offset the high capital costs of renewable resources. This has proven to be an insignificant amount of revenue for such projects and has not stimulated development of renewable energy projects in IPL's service territory. 14 IPL is now proposing to expand the number and type of customers eligible to participate 15 on Standard Contract Rider No.9 by opening it up to C&I customers and by raising the qualifying capacity limit from 10 kw to 50 kw. No.9 is set forth in Petitioner's Exhibit JEH-4. The revised Standard Contract Rider IPL is also proposing a new Rate REP created so that customers may alternatively choose to participate in a renewable energy feed-in rate for generation resources with capacity ratings ranging from 50 kw to 10 MW. Rate REP provides pricing unique to the type of 21 renewable energy produced and allows for long term contracting. This allows a customer a basis for financing a project and helps to close the economic gap that has historically been a roadblock to renewable generation resource development but does so in a Haselden - 25

4 Petitioner's Exhibit JEH-l 1 A50. Q50. Q51. transparent manner that is subject to the approval of the Commission. Another key difference in this approach compared to net metering is that the output from a renewable generator is separately metered and the total output is compensated. As part of the agreement and in consideration of the compensation which is in excess of avoided costs of traditional generation alternatives, IPL will retain all environmental attributes of the power produced. The customer can purchase green power through IPL's Standard Contract Rider No 21 (Green Power Initiative) if they wish. The environmental attributes will be sold to the market for such commodities with the proceeds applied as a credit for all customers against the costs of the purchase of renewable energy in the same manner and timing as that outlined in the Commission's order in Cause No approving the long term power purchase agreement for wind energy. Please describe the specific details of the proposed Rate REP. The proposed rate is shown in Petitioner's Exhibit JEH-5, Rate REP (Renewable Energy Production). Rate REP is similar to IPL's Rate CGS with the notable exceptions of the basis for pricing and the voluntary nature with which IPL offers this rate. The proposed rates for the various renewable technologies are not yet available and will be provided later through the 30-day filing process. There are many proposals for various types of economic incentives for renewable resources pending in Congress as part of economic stimulus packages that, if enacted, will significantly impact the rates. IPL will take local and federal legislation into account to calculate the appropriate rates.,.;.'"> Does this conclude your prepared direct testimony? 22 AS 1. Yes, at this time. Haselden - 26

5 VERIFICATION L John E. Haselden, Principal Engineer for Indianapolis Power & Light Company, aftlnn under penalties of pezjury that the foregoing representations are true and correct to the best of my knowledge, information and belief Dated: February 2; 2009 li'iljsol CEARLS ,,1

6 Petitioner's Exhibit JEH-4 Cause No

7 Indianapolis Power & Light Company One Monument Circle Indianapolis, Indiana LU.R.C. No. E-16 5th Revised No. 161 Superseding 4th Revised No~, 161 STANDARD CONTRACT luder NO.9 NET METERING FOR CUSTOMERS WITH SOLAR PHOTOYOLTAlC, OR HYDROELECTRlC SYSTEMS (A,'nib}'1" In Red'", R<:, 'm" nfn0.r f\llf'l-nmp.rq fl<; cl(~fin('cl hfdowl WIND, AYAILABILITY Available to allrate RS Customers and Elementary Schools, Middle Schools and High Schools on Rate SH, 8L, or PL, who have installed renewable solar photovoltaic, wind or hydroelectric systems with Approved Electrical Connection. Total capacity on this rider will be limited to one tenth of one percent of the company's most recent annual peak load; customer installations applicable to this Rider are limited to 50+0 KW or less. System capacity will be defined as the lower value of the inverter nameplate capacity excluding non~renewable power sources or the renewable power source -nameplate capacity. It is the Customer's responsibility to request and provide relevant information to the Company for application of this rider. APPROVED ELECTRiCAL CONNECTION: Installation of the system will conform,to the most current Indiana Electrical Code, and, IEEE Std 929. The net metering facility shall comply with the appl~cable requirements of 170 IAC Conformance with the codes and standards does not convey any liability to the Company for damages or injuries ~rising from the installation or operation of the system. METERING: For customers served at single phase: The Company will install one of the metering options below: 1) One main watt-hour meter capable of measuring net KWH. 2) One main watt-hour meter measuring KWH to the Customer, and one watt-hour meter measuring KWH to the Company. The reading of the second meter will be subtracted from the reading of the, main meter to obtain net KWH for billing. For Customers served at multi-phasesohools 00 Rat<l8H (not served at single phase), 8L or PL: The Company will not initially install special metering.' The Company will, however, install metering, capable of net metering, at the Customer's request and expense. Installation and use of the system in accordance with this rider does not.violate the exclusion provision under the qualifications for Rate SR., tn addition to the metering for billing, described above, the Company reserves the right to install, at its expense, a meter to measure the output of the system. The customer's responsibility includes all other wiring, raceways and connections associated with the system. BILLING: The bill will be calculated in accordance with all provisions of the appropriate tariffs. For purposes ofbiuing, negative net KWH will be considered to be zero KWH. Negative net KWH will be carried forward to the " next billing month. Negative net KWH is not transferable to another account or service. " Second step of two step increase., 'Pending

8 Indianapolis Power & Light Company One Monument Circle Indianapolis, Indiana I.V.R.c. No. E-16 Petitioner's Exhibit JEH-5 Cause No Page 1 of4 Original No. XX AVAlLABILITY: RATEREP RENEW ABLE ENERGY PRODUCTION Available to any Customer of Indianapolis Power & Light Company (the "Company") that operates within the Company's service territory a Qualifying Renewable Energy Power Production Facility subject to the Company's rules and regulations and, any terms, conditions and restrictions imposed by any valid and applicable law or regulation. This tariff is submitted pursuant to the requirements of the Commission's regulations and shall cease to be effective if such regulations are set aside, withdrawn or for any reason cease to be applicable to the Company. An Existing Qualifying Facility is eligible to the benefits of this Rate REP except as otherwise expressly forbidden by law. DEFINITIONS: (a) (b) (c) (d) (e) (f) (g) Qualifying Renewable Energy Power Production Facility (the "Facility") means an arrangement of equipment for the production of electricity with capacity no less than 50 kw (20 kw for solar) and no greater than 10 MW and which produces electric power through the use of 100% renewable resources or fuel. Such resources or fuels include: a. Solar photovoltaic cells and panels b. Wind c. Dedicated crops grown for energy production d. Organic waste biomass e. Biomass will be consistent with the State's definition in IC The Facility shall be located at one site an~ is not the aggregation of more than one site each less than 50 kw (20 kw for solar). Purchase means the purchase of electric energy or capacity or both from the Facility by the Company and is also inclusive of all environmental attributes. Sale means the sale of electric energy or capacity or both by the Facility to the Company and is also inclusive of all environmental attributes. Avoided Costs means the incremental costs to the Company of electric energy or capacity or both which, but for the purchase from the Facility, the Company would generate itself or. purchase from another source. Environmental Attributes means Renewable Energy Credits ("REC"), carbon credits, greenhouse gas.offsets or any other environmental credit, commodity or classification associated with the production of renewable energy from the Facility.. Interconnection Costs means the reasonable costs of connection, switching, metering, transmission, distribution, safety provisions, and administrative costs incurred by the Company directly related to the installation and maintenance of the physical facilities necessary to permit interconnected operations with a Qualifying Facility, to the extent such costs are in excess of the corresponding costs which the Company would have incurred if it had not engaged in interconnected operations, but instead generated an equivalent amount of electric energy itself or purchased an equivalent amount of electric energy or capacity from other sources. Interconnection Costs do not include any costs included in the calculation of Avoided Costs. Supplementary Power means electric energy or capacity supplied by the Company, regularly used by a Qualifying Facility in addition to that which the facility generates itself Pending

9 Petitioner's Exhibit JEH-5 Cause No Page 2 of4 Indianapolis Power & Light Company One Monument Circle Indianapolis, Indiana r.u.r.c. No. E-16 Original No. XX (h) Back-up Power means electric energy or capacity supplied by the Company to replace energy ordinarily generated by a facility's own generation equipment during an unscheduled outage of the facility. (i) Interruptible Power means electric energy or capacity supplied by the Company subject to interruption by the Company under specified conditions. CD Maintenance Power means electric energy or capacity supplied by the Company during scheduled outages of the Qualifying Facility. (k) System Emergency means a condition on the Company's system which is liable to result in imminent significant disruption of service to Customers or in substantial deviation from normal service standards or which is imminently liable to endanger life or property. (1) Commission means the Indiana Utility Regulatory Commission. (m) FERC means Federal Energy Regulatory Commission. (n) Peak Period means the time between 6 a.m. and 10 p.m. (April through September) or between 7 a.m. and 11 p.m. (October through March) on all days except Saturdays and Sundays, which daily time period will be subject to change from time to time at the Company's option. This change would occur after no less than ten (10) days notice has been given to all Customers who. would be affected, and to the Commission. (0) Off Peak Period means the time not included in the Peak Period. PURCHASE AND SALE: Purchases and sales shall also be subject to the following general terms and conditions: a.. The Company need not purchase or sell at a time of System Emergency. INTERCONNECTION CONDITIONS AND COSTS: (a) The Company, subject to prior compliance by the Qualifying Facility with all applicable Federal and State laws and regulations, shall make parallel interconnection with the Qualifying Facility in such a way as to accomplish purchases and sales as described in Sections (b) through (t). (b) The Qualifying Facility shall comply with the National Electrical Safety Code, as supplemented, the applicable requirements of 170 lac 4-4.3, and the Company's rules and regulations for electric service. (c) Interconnection Costs from the Qualifying Facility to the Company's distribution or transmission system, including those costs of (d) and (e) below, shall be borne by the Qualifying Facility. There shall be no obligation on the Company to finance such interconnection. (d) The Qualifying Facility shall install, operate, and maintain in good order such relays, locks and seals, breakers, automatic synchronizer, and other control and protective apparatus as shall be designated by the Company for operation parallel to its system. The Qualifying Facility shall bear full responsibility for the installation and safe operation of this equipment. (e) Breakers capable of isolating the Qualifying Facility from the Company shall at all times be immediately accessible to the Company. The Company may isolate the Qualifying Facility at its own discretion if the Company believes continued parallel operation with the Qualifying Facility creates or contributes to a System Emergency. System Emergencies causing discontinuance of parallel operation are subject to verification by the Commission. Pending

10 Petitioner's Exhibit JEH-5 Cause No Page 3 of4 Indianapolis Power & Light Company One Monument Circle Indianapolis, Indiana I.UR.C. No. E-16 Original No. XX (f) To properly record numbers of kilowatthours for, respectively, purchase and sale, the following configurations shall be the basis for metering. (1) Where purchases are intended to be less than 1000 kilowatthours per month, and the Company and Qualifying Facility mutually agree, a single bidirectional meter may be placed between, at one side, the Company system and, on the other side, the Qualifying Facility and any load associated with it. (2) Where such measurement is appropriate for measurement of energy, the circuit shall include at minimum two monodirectional meters ina series arrangement between, at one side, the Company system and, on the other side, the Qualifying Facility and any load associated, with it: Load Utility Qualifying Facility (3) Where such is appropriate for measurement of energy, the circuit shall include a mono directional meter between the on-site load and the Company and, in a series arrangement, two monodirectional meters between the Qualifying Facility and the Company system: Company System Load Qualifying Facility (4) The meter measuring purchases by the Company shall be of a design to record time periods, and shall be capable of electronically transmitting instantaneous readings. ".. (5) Other metering arrangements shall be the subje<;:tof negotiations between the Company and the Qualifying Facility. RATE FOR PURCHASE: The rate the Company will pay each Facility for energy and capacity purchased will be established in advance by written contract with the Company as filed and approved by the Commission and will be based on the RATE REP PURCHASE RATES adjusted as outlined in the remaining parts of this section. Unless otherwise agreed, the RATE REP PURCHASE RATES shall be: (a) Solar a. Capacity b. Energy None x cents per kwh Pending

11 Petitioner's Exhibit JEH-5 Cause No Page 4 of4 Indianapolis Power & Light Company One Monument Circle Indianapolis, Indiana I.U.R.C. No. E-16 Original No. XX (b) (c) Wind a. Capacity b. Energy Biomass a. Capacity b. Energy None x cents per kwh x.xx dollars per kw per month x cents per kwh The Company and the Facility may negotiate terms and a rate for energy or capacity which differs from the filed rates by the Company. The Company and the Facility may agree to increase or decrease the rate in recognition of the following factors: (1) The extent to which scheduled outages of the Facility can be usefully coordinated with scheduled outages of the Company's generation facilities; (2) The relationship of the availability of energy from the Facility to the ability of the Company to avoid costs, particularly as is evidenced by the Company's ability to dispatch the Facility; (3) The usefulness of the Facility dllling System Emergencies, including the ability of the Facility to separate its load from its generation; (4) The impact of tax credits, grants and other fmancial incentives that when combined with the rate would produce excessive profits for the Facility. RATES FOR SALE BY COMPANY: Back-up Power shall be provided under Standard Contract Rider No. 10. Maintenance Power shall be provided under Standard Contract Rider No. II. Supplementary Power shall be provided under Standard Contract Rider No. 12. A Customer may not simultaneously qualify for Rate RE, Rate CGS Cogeneration and Small Power Production, Standard Contract Rider No.9, Net Metering, and Standard Contract Rider No.8 for off-peak service. STANDARD CONTRACT RIDERS APPLICABLE: No.1 Nlo.lO Np. II No. 12 see Page 150 see Page 162 see Page 163 seepage 164 Pending