‘It’s really scary to us.’ Idaho Power, customers at odds over rooftop solar panels

BOISE (Idaho Statesman) – Idaho energy regulators are deliberating over a proposal that would reduce the credits customers get when they generate electricity themselves using rooftop solar panels.

The three-person Idaho Public Utilities Commission is considering a proposal by Idaho Power that was reached in a settlement negotiated behind closed doors with the city of Boise, several environmental groups and an organization representing rooftop solar installers.

If the settlement is approved, Matt Dunay, a rooftop installer, says it will destroy his industry, which has created more than 500 jobs in Idaho in the last decade. Depending how the commission rules, retired airline pilot Gary Roeder says he could lose most or all of his investment in a solar system, which helps Idaho Power reach its goal to provide 100 percent clean energy by 2045.

The two Boise men were among the more than 250 people who turned out for a hearing Dec. 3 criticizing the settlement’s impact on the growing industry that now serves more than 4,000 Idaho Power customers. It’s the third time since 2012 that Idaho Power has come before the commission asking to alter the solar program that pays the solar customers the retail rate when they add electricity to Idaho Power’s grid.

Each time dozens of customers showed up to oppose the changes and up to now, the commission has kept the retail rate in place. This time the customers weren’t just mad at Idaho Power, they were mad at the pro-solar groups who accepted the settlement.

“As customers we were a party to this, and we were not included,” Roeder said.

Idaho Power sent repeated notices before and throughout the settlement talks to all its solar customers.

Ben Otto, an energy attorney with the Idaho Conservation League, participated in the talks but did not sign the settlement. The group did agree not to challenge it, and Otto has taken many phone calls from customers angry with him and the utility.

“I think they have a point,” Otto said. “I wasn’t comfortable with a confidential process.”

Idaho code requires utility settlement talks to be confidential unless all the parties involved agree to keep them open, said PUC spokesman Adam Rush.

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An issue of fairness

Idaho Power has argued from the start that the so-called net metering program for solar customers is unfair to its other customers because they avoid the fixed costs for the utilities’ transmission grid other customers must bear. While it acknowledges the current number of solar customers isn’t enough to have an impact on other customers’ rates, they want to get ahead of the issue as the number of solar customers grows.

It’s an issue of fairness, said Adam Richins, Idaho Power senior vice president and chief operating officer.

“It’s really a case about subsidies and how much should the subsidy be through the ratemaking process,” Richins said.

Idaho Power buys or produces electricity at a cost of 3 cents a kilowatt hour, he said, and the costs of the grid and its other expenses total about 7 cents. The issue is whether Idaho Power should pay solar customers the 3-cent wholesale rate or the 10-cent retail rate.

In the settlement, the two sides reached a compromise at 8.7 cents per kilowatt hour in credits solar generators will get when they add electricity to the grid for at least the next two years. The parties will return to the issue every two years for eight years, when the rate would be 4.4 cents.

Today, Idaho Power has purchased 120 megawatts of future power from the Jackpot Holdings Solar plant south of Twin Falls at 2.1 cents over 20 years, Richins noted.

The commission has never ruled on whether the net metering program is a subsidy or not, Otto said. But the issue of cost shifting in ratemaking is complex. For instance, rural customers who have long, costly transmission lines to serve relatively minor electricity needs are routine.

Jobs and the economy

But the commission ruled in its last solar case that the on-site generation customers, which includes the solar customers, are a separate class. It must decide if the settlement is in the public interest.

That inherently includes its impacts on the rooftop solar industry, which has grown steadily over the last decade. Dunay, one of the owners of Altenergy, has installed 300 residential and small business solar generation plants since he started in Idaho in 2011.

Each time Idaho Power has sought to reduce the credits to solar customers, he has seen business drop, including this time, Dunay said.

“We think everybody will lose their jobs in the solar industry if these terms are accepted,” Dunay said. “It’s really scary to us.”

Economics is not the only reason people are installing solar panels on their homes, Richins said. Many want to help protect the environment and will continue to purchase rooftop solar systems if the compromise settlement is approved, he said.

The Idaho Clean Energy Association, which includes many of the rooftop solar contractors as members, said if it could have continued the current net metering program it would have.

“But the commissioners asked the stakeholders to come to an agreement on a path forward,” said Preston Carter, an attorney for the group. “We believe the settlement is the best option to which Idaho Power would agree.”

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Grandfathering

Many of the people at the hearing earlier this month were retired like Roeder. They’re on fixed incomes and wanted the certainty of lower rates to carry into their old age. Some were in wheelchairs. If this settlement is approved, without a provision to keep existing customers and their systems at the same rate, they worry they could lose their investment.

The parties to the settlement chose to leave the issue of whether existing customers would stay whole through the transition to the commission. The three commissioners, appointed by the governor, must decide if it is legal to treat existing customers differently than the new group that has been created by the settlement.

Just keeping him with the same rate wouldn’t be enough for Roeder and others who testified. They worried about the value of the system if they sold their home.

“This would completely eliminate the value of the system to the house,” Roeder said.

Overall, he said, it’s about control.

“This is all a part of an effort by Idaho Power to keep control over every single electron in its service area,” Roeder said.

A different path forward

Each time Idaho Power has sought to limit the rooftop solar program, its customers have turned out in droves to oppose it. Zack Waterman, director of the Sierra Club in Idaho, which participated in the settlement, said the utility needs to work with this highly motivated customer base that has invested its own money to produce green electricity to the grid.

For instance, it could provide incentives for people to install solar systems on new and existing homes in fast-growing areas, such as western Treasure Valley, to reduce the amount of new transmission infrastructure it must build and add to all its customers’ rates.

“With new technologies transforming electric utilities at unprecedented rates, Idaho Power now has opportunities to team with customers in innovative ways that both reduce carbon emissions and lower overall costs for all electricity customers,” Waterman said.

Idaho Power is open to new, innovative incentive programs, Richins said. But it doesn’t want them incorporated into the power rates.

“We are open to discussions on all solutions,” Richins said.