The Idaho Public Utilities Commission did not question Idaho Power’s motives for proposing a major change to its net metering plan that could have taken much of the incentive out of rooftop solar installation just as its price had become attractive.
In fact the commission and its staff recognized the balancing act it faces as solar and other distributed generation programs become economically viable. There are clear benefits for all utility customers when some are prepared to invest capital to add power to the system –especially power that comes during peak demand periods. But there are system costs, fixed costs such as transmission lines, customer service and repair crews that all customers share.
Ensuring these net metering customers carry their weight of the burden was Idaho Power’s main argument. The issue is facing utilities all over the country, even though roof-top solar is only beginning to become a significant share of the power portfolio.
In Texas, CPS Energy, San Antonio’s publicly-owned utility, told solar net metering customers it was going to cut payments for the power it buys from them in half. It came at the same time the utility was aggressively moving to develop more than 400 megawatts of solar generation projects of its own.
It made many of the same arguments Idaho Power did about how other customers would be forced to carry the fixed costs while the solar customers would not.
“To ensure that solar customers continue to enjoy the benefits of any distributed energy they produce, and pay a fair share of the infrastructure that they rely on, we’re taking a different approach,” Cris Eugster, executive vice president and chief strategy and technology officer for CPS said in a press release. “This is really important in San Antonio, where one quarter of the community’s residents are at or below the poverty level, and monthly energy bills absorb a larger portion of their monthly budgets.”
This publically-owned utility in a largely Democratic community was making the economic justice argument. In essence, its saying, our rich and upper middle class customers who can afford to put solar panels on their homes are cutting their costs and leaving the poor and lower income customers who can’t afford it to pay for the rest of the system.
CPS’ argument dramatically illustrates the challenge before the Idaho Public Utilities Commission. Most customers don’t realize that residential rates all contain some level of subsidy, or as commissioner Marsha Smith says, cross subsidies, in them.
At any given time the cost to provide power for one customer or another is different depending on their use, location and timing. It’s up to the commission to balance these differences for all customer groups as a matter of policy.
In the simplified language of the recent political debate it is electrical redistribution.
The commission also is entrusted to ensure Idaho Power gets a fair return on its investment for providing reliable power when its customers need it night or day.
When Fox News covered Idaho’s net metering debate this spring. Its reporters accurately reported the challenge that could face Idaho Power in the future over who will pay for its infrastructure.
But it appeared to suggest that the growth in demand of roof-top solar was due to subsidies, not the dramatic drop in the price of solar panels. Since it was about subsidies it must be bad right?
Idaho Power has wrapped all of its recent initiatives against wind, solar and even to suspend its demand response program around saving its customers money. But in conservative, independent Idaho it was a hard case to take on customers who were willing to put up their own dollars to cut their own bills and protect themselves from power outages.
I would be surprised to see them play the economic justice card, especially before the Idaho Legislature.