Customers fight back against Idaho Power’s proposal to lower solar energy rates
Money is at the heart of a debate over solar energy in Idaho.
Dozens of Treasure Valley residents argued during a three-hour hearing Thursday before the Idaho Public Utilities Commission that Idaho Power undervalued customer-generated solar power in its study for the state regulators.
The gathering in Boise followed two similar hearings the week before in Twin Falls and Pocatello.
Idaho Power’s net-metering 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 means rooftop solar but can also include windmills, geothermal and small hydro facilities.
Customers with on-site generation receive a kilowatt-hour credit on their bill when they produce more energy than they need.
While 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 valued excess power from on-site generation, like rooftop solar, at 2.8 cents to 4 cents per kilowatt hour.
The proposal from the state’s largest electric utility to slash the credit in half stirred a debate over how much rooftop solar is worth and what can be done to incentivize the renewable energy source in efforts to mitigate the effects of climate change.
Environmentalists worry change could reduce solar adoption
Lisa Young, director of the Idaho Chapter of the Sierra Club, a nationwide environmental organization, said Idaho Power’s proposal to sharply reduce the price of excess energy it buys from homeowners will discourage further rooftop solar development. She also said it would protect the company’s interests in owning and profiting from solar power.
“Idaho Power, like electric utilities across the nation, has been actively trying to suppress installations for over a decade since customer-owned energy doesn’t yield as much profit,” Young said. “With the worsening climate crisis, we should begin to make solar power more affordable and accessible and not less.”
Young argued the PUC should consider a study from “an independent third party” instead, citing a report from Crossborder Energy, a Berkeley, California, consulting company for the energy industry, that was paid for by environmental groups and solar companies.
The study was submitted to the Idaho Public Utilities Commission in September along with comments from the Idaho Conservation League.
Crossborder Energy’s report concluded that excess power from on-site generation is worth 18.3 cents per kilowatt hour, about five times more than Idaho Power’s valuation.
Jordan Rodriguez, a spokesperson for Idaho Power, told the Idaho Statesman in September 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.
He said the company supports rooftop solar but wants to make sure the pricing is fair for all customers.
“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 said. “Our study shows that current pricing policies overcompensate customers with solar at the expense of customers without.”
Some customers would be grandfathered in
During previous rulings, the PUC granted legacy status to eligible residential and small general-service on-site generation systems as of Dec. 20, 2019. That means Idaho Power customers who were already generating solar energy by that date will get to keep the higher rates for about 25 years, which is the standard lifespan of a solar power system, according to Rodriguez.
The status was also granted to eligible commercial, industrial and irrigation systems as of Dec. 1, 2020. Systems connected after those dates are subject to future changes.
James Taylor, from Caldwell, was the first to testify at the Thursday hearing. He installed solar panels on his home in 2016 and will be grandfathered in.
“If I generate a kilowatt of power, I should be compensated for a kilowatt of power,” Taylor said.
However, Idaho Power said in its study that current retail rates for homeowners reflect more than just the energy itself. The 8 cents to 10 cents per kilowatt hour valuation accounts for the full cost of generating, transmitting and delivering reliable electric service to over 610,000 customers across the state.
“Only a portion of that retail rate represents energy generation,” the utility’s study said. “The rest pays for building and maintaining the grid, running a customer care center and other expenses that apply to all customers.”
As part of the company’s goal to produce 100% clean energy by 2045, it has plans to start buying power from a 120-megawatt solar panel farm near Twin Falls called Jackpot Solar. It’ll pay less than 2.2 cents per kilowatt hour for the energy, about one-fifth of what it pays residential customers for their extra solar power, according to a guest opinion in the Idaho Statesman written by Theresa Drake, senior manager of customer relations and energy efficiency at Idaho Power.
Alex McKinley, co-owner of Empowered Solar in Boise, testified at the PUC hearing that Idahoans are eager to invest in a more efficient and resilient electrical grid.
“It worries me that we’re going to create a system that disincentivizes the actions we actually want,” McKinley said. “People have mentioned previously that Idaho Power has asked customers to reduce their consumption at peak load times. I’ve talked to people who say, you know, I want to go solar and if Idaho Power changes the rates I’ll just make sure that I turn up my AC in the summertime so I don’t export any electricity to them.”
An hour before the hearing, students and climate activists rallied outside the PUC’s building at 11331 W. Chinden Blvd. They were joined by representatives from several nonprofits including the Snake River Alliance, Idaho Organization of Resource Councils and Vote Solar, as well as local solar businesses.
Cindy Su, a senior at Timberline High School in Boise and member of the Sierra Club’s Climate Justice League, told the Idaho Statesman in an interview that reducing the price of customer-generated solar power makes it more difficult for people with low incomes to make the switch to clean energy.
She also said it’s important for her and her peers to advocate for access to clean energy.
“We’re the generation that’s currently going to be most affected by the decisions that are made today,” Su said. “If we don’t have good compensation for solar owners, and we allow the slowing down of this whole clean energy movement, then it’s going to hurt us especially.”
How nearby states are dealing with the issue
In other states, utility companies are having some success at changing net-metering rates.
Rocky Mountain Power customers in Utah get about 5 cents per kilowatt hour for their solar energy, compared with an average 10.2 cents per kilowatt hour residential rate. The Utah Public Service Commission approved the new rate two years ago.
State regulators in California plan to vote early next year on a new policy that could reduce the credit for excess energy sent to the grid and to create fixed monthly fees.
In Colorado, rooftop solar owners receive a credit for every kilowatt hour their solar panels produce at the same price residential customers are charged for electricity, just as customers in Idaho do now.
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 November 4, 2022 at 8:36 AM.
