BOISE — Alternative energy companies are at odds with Idaho Power over a proposed change in fees.Solar Power companies say Idaho Power is running them out of business, but Idaho Power says they’re looking out for the hundreds of thousands of…
Idaho Power is doing the right thing by trying to get its prices lined up with how it incurs costs. However, it is making several mistakes that will make its proposal harder for regulators and the public to accept. I know that “proffered advice stinketh,” but I will proffer some anyway.
First, Idaho Power is cloaking its proposal in the name of fairness to all customers yet ignoring the obvious benefits that accrue to the company. People will not buy this. Instead, Idaho Power should explain how its current prices do not reflect how it incurs costs and that this means people with solar are not paying the cost of serving them. Included in this should be a calculation of what things would look like if nothing changes and all residences had solar. Let others determine what “fair” is.
Second, Idaho Power is applying the increase in fixed and demand charges only to customers with net metering, predominantly solar. This, on its face, appears unfair and contradicts their fairness argument. Instead, they should apply any price structure change to all customers. Moreover, it just changes the incentives such that customers still put in solar but eschew net metering so they can still avoid high variable prices. It encourages the adoption of energy storage that is, from a societal perspective, uneconomic.
Third, Idaho Power is making a large change very fast. This looks unreasonable to government price setters (regulators), and especially antagonizes a relatively small interest group, making acceptance of the change harder. Instead, they should propose a series of revenue neutral changes every six months for all rate classes, the result of which will bring them toward where they want to be over a reasonable period, say five years.
Fourth, Idaho Power should propose to purchase excess power at their avoided cost based on the time it is delivered. There has to be good faith in the calculations which take into account avoided capacity, transmission, and distribution as well as line losses and energy. And they should seek the opportunity to invest in rooftop solar at their regulated rate of return to both show that they support solar and customer generation and that they are indifferent as to where they own generation.
Idaho Power’s proposal will not stop distributed generation, it will only twist it in uneconomic ways. Net metering does not work on a large scale (unless it is changed so much it is not really net metering) because if everyone installed enough distributed generation, there would be no net sales of kWh but there would still be the costs of generation. It is time to begin selling and buying retail electricity at prices that reflect costs. Our window to get this right is short.
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