Solar customers face steep rate cut, but Idaho regulators pause annual changes
AI-generated summary reviewed by our newsroom.
- PUC limits export credit cuts to about 31% on average, below Idaho Power's ask.
- Commission freezes annual rate reviews until 2028 to provide billing predictability.
- Reduced credits may extend payback times and discourage rooftop solar investment.
Solar advocates argued for years that if Idaho Power got the go-ahead to overhaul its rooftop solar compensation system, homeowners would see smaller payments for power produced by their rooftop solar panels.
Now, they’re seeing it play out.
The Idaho Public Utilities Commission issued an order on Tuesday partially granting a request from Idaho Power to decrease the amount the utility credits to over 14,000 households in Southern Idaho with rooftop solar — though the decrease was less than the utility had hoped.
The order, on average, limits solar rate decreases to 31%, according to a news release Wednesday from the Idaho Chapter of the Sierra Club. Idaho Power had proposed a 60% cut.
Idaho Power’s net metering policy previously allowed customers to receive credits on their utility bills equivalent to retail electricity rates when they produced more energy than their households needed. For every kilowatt hour of solar energy sent to the grid, the customer received a kilowatt-hour credit.
But the company overhauled that method in early 2024, lowering the rate export credit rate and replacing what was known as net monthly billing with real-time net billing. It shifted energy valuation to on-peak and off-peak times. Notably, in that case, the PUC gave Idaho Power a path to adjust the rates annually. But it just backtracked that decision in its latest order.
The commission on Tuesday hit pause on the annual review process until 2028, giving families and businesses a stretch of predictability on their bills. The PUC acknowledged that the recurring rate changes make it difficult for people considering solar to plan ahead.
“The fundamental purpose of on-site generation is to offset a customer’s own usage; that on-site generation should not result in cost shifting between generators and non-generators; and that customers who generate on- site should receive a fair value for their exports,” the PUC wrote.
Under the order, which took effect Wednesday, the payout for solar owners will fall but stay higher than Idaho Power originally proposed. The fixed rates are set remain in place for three years. Solar owners will now be compensated less than 3 cents per kilowatt-hour for most of the year, with higher rates only during peak hours in the summer.
Advocates vow to ‘continue pushing’ for better rates
Idaho Power’s original proposal, filed last spring, sought to adjust what the company pays solar and other on-site generation owners for electricity exported to the grid.
The utility argued that the cut is necessary to reflect the actual value of solar to its broader customer base and avoid what it calls unfair subsidies. But solar advocates pushed back, warning that the changes would lengthen payback periods, discourage solar investment and undermine clean energy goals adopted by cities like Boise.
“Energy affordability is an increasingly important issue in Idaho, and the PUC has a key role to play in ensuring that our monopoly utilities don’t unfairly raise our bills,” Lisa Young, director of the Idaho Chapter of the Sierra Club, said in the release. “We will continue pushing the PUC to listen to Idaho ratepayers and prioritize fair rates moving forward.”
A spokesperson for Idaho Power did not immediately respond Wednesday to a request for comment.
Over 88% of public comments filed in the case opposed cutting the export credit rates, and several community groups and the city of Boise weighed in to defend local solar. Boise questioned the methods Idaho Power used to calculate the new rates and said it was unclear how “fair value” was defined, according to the order.
In its decision, the PUC acknowledged the rising financial pressures on solar owners: Under the utility’s plan, some customers could see their monthly bills double after multiple rate and policy shifts in just 18 months.
Jeremy Brunson, a rooftop solar owner in Meridian, said in the Sierra Club’s release that the PUC still has work to do.
“This is blatantly unfair,” Brunson said. “How can the PUC justify a reality where Idaho Power pays me three cents for the electricity I make and then sells it to my neighbor for eight to ten cents?”
The PUC will consider petitions for reconsideration until Oct. 21.
Solar owners should note: This rate freeze only applies to non-legacy customers. During previous rulings, the PUC granted legacy status to eligible residential and small general-service on-site generation systems as of Dec. 20, 2019. The status was also granted to eligible commercial, industrial and irrigation systems as of Dec. 1, 2020.
In a separate case, Idaho Power is requesting a 13.09% hike to its overall rates, according to an application the company filed with the PUC in April. The average residential customer using 900 kilowatt-hours per month would see bills rising by about $21.66 a month, or 17.35%. The company also proposed hiking the residential service charge from $15 to $25. A public hearing on the proposal is scheduled for Nov. 20 in Boise.
