Idaho Power wants to pay less for homeowners’ rooftop solar, new report says
A new report says Idaho Power undervalued customer-generated solar power in a study for state regulators.
And an environmental group contends the utility’s proposal to sharply reduce the price of the excess energy it buys from homeowners will discourage further rooftop solar development.
The report by Crossborder Energy, a Berkeley, California, consulting company for the energy industry, sought to provide an independent review of Idaho Power’s study on the value of distributed energy resources such as rooftop solar power. It was paid for by environmental groups and solar companies.
It was submitted to the Idaho Public Utilities Commission on Sept. 21 along with comments from the Idaho Conservation League.
Idaho Power’s study, requested by the PUC and released in June, proposes changes to the compensation structure for excess energy produced by customers with on-site generation, which most commonly applies to rooftop solar but can also include windmills, geothermal and small hydro facilities.
Customers with on-site generation get a kilowatt-hour credit on their bill when they produce more energy than they need, according to the utility’s study.
“That credit is applied at the full retail rate, which reflects the full cost of generating, transmitting and delivering reliable electric service to our customers,” Idaho Power’s study said. “However, only a portion of that retail rate represents energy generation. The rest pays for building and maintaining the grid, running a customer care center and other expenses that apply to all customers.”
Retail rates for homeowners are typically between 8 cents to 10 cents per kilowatt hour, depending on how much energy is used.
Idaho Power’s study said excess power from on-site generation, like rooftop solar, is worth 2.8 cents to 4 cents per kilowatt hour. Crossborder Energy’s report concluded that the same power is worth 18.3 cents per kilowatt hour, about five times more.
“We are concerned that the study repeatedly exercises discretion in its calculations that favor (Idaho Power’s) programmatic and business aims at the expense of distributed generation development,” the Crossborder Energy report said.
Crossborder Energy said it identified “significant issues” with the way Idaho Power valued the contribution of distributed solar to reducing the utility’s need for generation capacity and to the marginal cost of generation capacity. It also said there is no cost shift to other customers under current retail payment rates.
Crossborder’s report was paid for by the Idaho Conservation League, the Idaho Chapter of the Sierra Club, EGT Solar, Vote Solar, the Portneuf Resource Council, the Snake River Alliance, CED Greentech, Sunnova, Empowered Solar, the Climate Action Coalition of the Wood River Valley and the Idaho Organization of Resource Councils.
The Sierra Club, a nationwide environmental organization, said Monday in a news release that the lower rates proposed by Idaho Power would protect the company’s interests in owning and profiting from solar power.
“Regulators need to step up here and make sure Idahoans interested in rooftop solar have a chance to produce their own affordable, clean energy,” said Lisa Young, director of the Idaho Chapter of the Sierra Club, in the release.
The club also said the utility didn’t take into account the long-term impacts of natural gas usage.
Jordan Rodriguez, a spokesperson for Idaho Power, said that while few people were involved in rooftop solar two decades ago, the utility now has about 12,000 customers generating power from panels on their homes.
“The underlying issue for this whole case is that we are using a customer-generation or net-metering policy that was created about 20 years ago when there was just a very, very small handful of people using on-site generation,” Rodriguez told the Idaho Statesman by phone. “Our study shows that current pricing policies overcompensate customers with solar at the expense of customers without.”
He said most customers already participating in on-site generation would be grandfathered in, regardless of the decision the PUC makes.
During previous rulings, the PUC granted legacy status to eligible residential and small general-service on-site generation systems as of Dec. 20, 2019. It also granted the status to eligible commercial, industrial and irrigation systems as of Dec. 1, 2020.
Systems connected after those dates would be subject to future changes, according to Rodriguez.
“We support rooftop solar, but we want to make sure the pricing is fair for all customers,” he said.
Disclosure: The Idaho Statesman pays Jordan Rodriguez, a spokesperson for Idaho Power, to write a fishing column for the Statesman.
This story was originally published September 29, 2022 at 4:00 AM.
