Electricity has traveled on a one-way street for the better part of a century. Customers have received electricity generated by Idaho Power into their homes, and they’ve paid a monthly bill to cover costs of the grid that delivers it. Today, over 530,000 Idaho Power customers receive one-way energy services that are safe, reliable and fair-priced.
In recent years, electricity has started to travel on a two-way street. We have about 1,400 customers who generate some of their own electricity (mostly by installing rooftop solar) and send what they don’t use back to the grid. This two-way use is known as net metering. We believe this is an important customer option, and we have supported net metering customers for years.
There is a misconception, however, that Idaho Power’s net metering customers are “off the grid.” In fact, these customers rely on the grid every hour of every day — they send energy to the grid when they don’t need it at their home, and they receive energy from the grid during cloudy days, at night, when starting up major appliances and when balancing their home’s energy use. They also receive a full retail credit on their bill for energy they send to the grid. Net metering customers’ use of the grid is simply different than that of traditional residential customers.
If both net metering and traditional residential customers use the grid, shouldn’t both pay for their share? We think so. But it’s not occurring under the current rate structure.
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To illustrate this point, let’s discuss a column that was sent to the Idaho Statesman last week on this topic. The writer stated that some rooftop customers pay only $5 a month for their use of the grid. We agree, and that’s the concern. It costs significantly more — approximately $65 per month in total — for Idaho Power to supply grid services to the average residential customer. Under the current rate structure, the $60 that is not paid by a net metering customer is ultimately shifted to other residential customers to pay. This is called cost shifting, and it results in higher prices for other customers.
Cost shifting is not unique to Idaho Power. In fact, many public utility commissions around the country are reviewing their net metering policies because of cost shifting. Idaho Power believes now is the time to take a first step in addressing this important issue in Idaho.
Although we will continue to support customer choice, we believe both customer choice and fair cost allocation can and should coexist. Customers with their own generation should not pay more than their fair share for the grid, and neither should customers who don’t have their own generation.
We recently filed a request with the Idaho Public Utilities Commission seeking modifications to our net metering service. Idaho Power believes any changes in policy should occur over time and gradually, so we are not seeking any pricing changes at this time; rather, we are asking the commission to determine whether customers with on-site generation should have a rate structure that is different from the standard service rates. If the commission approves this request, Idaho Power will work with stakeholders and customers in a future rate proceeding that would determine what the appropriate pricing should be.
Please go to idahopower.com/netmetering to check out the filing.
Adam J. Richins is Idaho Power’s vice president of customer operations and business development.