Idaho farmers find themselves in an unfortunate situation due to a Public Utilities Commission (PUC) decision on a recent Idaho Power petition. Farmers and small businesses who want to control their utility costs by investing privately in clean energy now face a great deal of uncertainty in their excess energy compensation by Idaho Power.

Idaho Power’s petition (IPC-E-20-26 34854) asked the PUC for policy changes to ag and commercial customer-generated power. During the petition’s public comment period the Portneuf Resource Council (PRC) and other Idaho organizations advocating for clean energy worked to generate citizens’ support for fair compensation. The coordinated outreach and public comment campaign resulted in more than 100 formal written statements and/or testimonies submitted to the Idaho PUC, as well a joint letter of support for farmers’ rights from sixteen Idaho non-governmental organizations.

Despite overwhelming input from Idaho’s farmers, the public and the PUC’s own staff to wait for the completion of a valuation study of on-site power generation, the PUC order results in customer-owned power-generating systems being subject to future Idaho Power net metering rate changes. Those changes will likely be to significantly lower compensation rates for excess energy. Unfortunately, this is consistent with the December 2019 PUC ruling on residential power generation.

So what does this mean? Prior to these orders, the excess energy compensation rules were known and could be used in planning solar installations. Now it is nearly impossible to correctly size solar systems or calculate the rate of return for the investment. With this kind of financial uncertainty Idaho’s homeowners and farmers looking to stabilize their high energy costs will be understandably hesitant to make investments in clean energy. In addition, this decision also means high paying solar jobs will be lost as opportunities for solar businesses decline.

In line with advocate recommendations from PRC and others, the PUC also ordered that existing ag and commercial solar customers, who had systems installed or contracted before December first of this year, will receive legacy net metering for the next 25 years. Legacy net metering means for every kilowatt put into the grid, the customer will get one kilowatt credit for later use. Idaho Power’s petition proposed only 10 years. This is good news for farmers with existing solar and the order aligns with the residential solar legacy rules in a PUC decision last December (2019).

What is the actual value of customer generated power? Idaho Power’s position is that as more solar is connected to the grid, rates for non-power producing customers will go up. They assert that their customers who do not have solar panels are subsidizing those who do because Idaho Power’s fixed costs are being shifted to fewer people. The “shifted cost” argument is Idaho Power’s reason to lower the compensation value of excess energy for solar owners.

However, Idaho Power’s position is only conjecture. It is not substantiated by economic or scientific analysis and does not consider all factors that determine the value of customer generated power. In December of 2019, the PUC ordered Idaho Power to complete a valuation study of on-site power generation before any further net metering rule or rate changes can be proposed for residential, ag or commercial solar power customers (IPC-E-18-15).

The actual value is a contentious point being played out across the United States. Publicly traded utilities, like Idaho Power, using the same “shifted cost” argument have issued studies showing the value of customer-generated power to be significantly less than the retail rate. However recent studies published by stakeholders, like state governments and national energy and science agencies, show a different result.

When studies consider all factors, such as avoided costs associated with generating, storing and distributing power as well as avoided costs of environmental compliance and/or impacts; the value of customer generated power is equal to or greater than the retail value of power on the grid. A fair valuation study must include all the costs and benefits to the power generation system and the grid.

The PUC is requiring that Idaho Power’s net metering valuation study be “understandable to an average customer.” This means that in the coming year the public will have opportunities to understand, weigh in and influence future PUC decisions regarding Idaho Power’s ongoing efforts to devalue customer generated power. Citizens will be able to express their thoughts as to what should be included in the valuation study. Once the study is completed, the public will have another opportunity to formally comment on the findings and conclusions of the study.

PRC will be posting a position statement on the pending valuation study and will keep the public informed as these opportunities to participate occur. Check out our Facebook page, facebook.com/PortneufResourceCouncil, to stay current on this and other important opportunities for citizen input. The PUC is more likely to make decisions favorable toward customer-generated power if they know a significant number of Idahoans are advocating for clean energy and are actively engaged.