Rocky Barker: In changing times, Idaho Power to decide its solar fate

April 30, 2013 

An Idaho Power proposal that right now affects 353 mostly solar-producing customers attracted more than 50 people to an Idaho Public Utilities Commission workshop last week.

The proposal to change "net metering" - which allows customers with their own electricity sources to send their surplus power to the grid - could unleash changes on Idaho Power before it's ready, as has happened to so many other institutions. The decision on the proposal comes as Idaho Power must decide whether to spend tens of millions to upgrade its coal plants in Wyoming and Nevada and whether to spend tens of millions to build new transmission lines.

It also comes as the company has proposed an 8 percent rate increase for this year and 4.5 percent for next year because of low water and low demand for its surplus power.

Technology is changing markets and industries. Telephone companies, newspapers, broadcasters, book publishers and dozens of other centralized service providers have been forced by information technology to share markets they previously controlled. Historically, economies of scale benefited people who could raise the capital to build power plants, printing presses, transmission system and telephone lines.

Now cellphones are connected by wireless cell towers. News, books and advertising can be cheaply delivered digitally. Increasingly in developing nations, where there are no telephone and power lines, renewable power distributed individually and locally is playing a big role.

Today Idaho Power sells not only electrons, but also the equipment to deliver them, as well as reliability, service and storage. It's all bundled together, but if the market is deregulated in the future, as is the natural gas market, Idaho Power might not sell power at all - it might, for instance, be delivering power that customers buy from other suppliers.

Which brings us back to net metering. Idaho Power is proposing to double the amount of electricity its net-metering customers can generate - from 2.9 megawatts to 5.8. It also wants to stop writing checks at the end of the year to solar and wind customers who have sold more power than they've bought. It also wants to increase the rate solar and wind users pay for the power they do buy from Idaho Power and to quadruple hook-up fees.

Idaho Power officials say the added charges are needed to ensure that its other customers aren't subsidizing the solar-generating customers in the future, though it acknowledged at the Thursday workshop that there has been no impact on other customers' rates yet. Solar proponents say the solar homeowners are actually helping keep other customers' rates lower by delivering electricity to the grid during peak demand periods in the summer.

Some of the net-metering customers who use a lot of electricity would pay less under the proposal. But in general the people who added solar panels to their homes and the installers who now have low enough costs to compete with conventional power sources see the Idaho Power net-metering plan as a way to hold them back.

Today the two sides will sit down with PUC staff to see whether they can work out a settlement. If they can't, customer and technical hearings are set for the week of June 1, with a target decision date of July 1.

The solar industry has grown more quickly in other states, where the price of electricity is much higher. Idaho Power will have to decide whether it wants to stand and fight now over a relatively small group of customers or settle and wait until these solar customers really have an impact on its business.

Gynii Gilliam, chief economic development officer for the Idaho Department of Commerce, which wants to grow the economy and jobs, suggested at a recent Integrated Resource Planning meeting that the utility consider adopting a program in which third-party companies finance and build solar installations on homes. The idea addresses Idaho Power's biggest complaint about switching to solar: capital costs.

But doing that would give the business to other companies instead of Idaho Power shareholders.

The price of solar technology will continue to drop, just as information technology has done. There may come a point where the cost is so low it will overwhelm any barriers Idaho Power might choose to erect to defend its service monopoly.

Since it is a regulated utility, the Idaho Public Utilities Commission and the Idaho Legislature will have a large say in the direction Idaho Power chooses. It's a public utility, which means that you have a say, too.

Rocky Barker: 377-6484

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