Idaho Power Proposed Solar Net Metering Changes 2023 - IPC-E-23-14

Idaho Power Proposed Solar Net Metering Changes 2023 - IPC-E-23-14

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If you’re in the process of having solar installed in Idaho Power’s territory, or already have it installed, you recently got a letter in the mail informing you about their proposed changes to net metering for “non-legacy” systems under Schedule 84. This is the Idaho Public Utilities Commission case IPC-E-23-14. It relates to changing from kWh for kWh net metering to a new, generation-credit based system. And while the documents are fairly easy to read, they’re also quite long - so I thought I’d be helpful and summarize the changes and my thoughts on them here!

I’ve written on net metering changes before a few years back - please read it, if you want some further history on the matter.

Overview and Summary of Proposed Changes

If you’re a residential or small commercial customer of Idaho Power with onsite generation capability, and you’re not a “legacy” or “grandfathered” customer (system installed before December 1st 2020 - if you are, you should know it), what Idaho Power wants to do is change the way your generation and consumption are valued. Right now, before any changes go into effect, you’re on a “kWh for kWh” net metering system (with no expiration of credits) - push a kWh in June, and you can use a kWh, for free, in December. If you’re overproducing, you pay your monthly $5 connection fee, and that’s about it.

What you’ll change to, if this proposal is approved (and I expect it to be approved), is the following: Your meter tracks realtime consumption and exports - and you see this on your current power usage chart, if you have solar. For every kWh consumed, you’ll be billed the normal retail rate - which can be paid for by your built up credits. For every kWh you export, you get paid a rate that, depending on time of year and day, is either (currently proposed as) 4.91¢, or 20.42¢ per kWh. The higher rate is for “On-Peak” times - defined as June 15 to September 15, Monday to Saturday, 3PM to 11PM. All other hours are defined as “Off-Peak.” It’s very important to note here that the On-Peak rate is higher than the retail cost of electricity delivered! The Off-Peak rate, meanwhile, is lower. I’ll talk about this more in depth later, but the incentives are such that if you can provide power when they really need power, your compensation is quite handsome!

Also important to note: these changes are all in the context of a “one meter” interconnection. Idaho Power only sees net imports/exports to their grid. Anything you consume at the time of production is “behind the meter,” and they don’t see any of it. So if you’re willing to fit your loads into your generation, it’s all free - and again, I talk more about how to optimize for this later on. But that’s the short, high level summary.

A Note on Documents

Most states have a Public Utilities Commission, which is a government group that regulates utility providers in the state (or, at least, is supposed to). If a utility wants to do something with rates, rate schedules, or pretty much anything more than “running the utility as agreed on,” they have to submit an application to the PUC for approval or denial. The Idaho PUC seems to have a good understanding of things from what I’ve seen, and regularly tells them to come back with actual research - so that’s a good thing!

If you’ve not gone poking around the PUC website before (I have weird hobbies…), the case overview page will look something like this. The primary document to be concerned about is the application - under Case Files. This is what Idaho Power is proposing, and has the overview and most of the relevant supporting information. The files under the “Company” heading are supporting documents, and include some testimony from various people involved in the process. Further down, in the Intervenor section, you’ve got requests from various other companies who want some say in the process - they send their paperwork in, and are somehow involved. Finally, there’s the public comments section, and… well, it’s a comments section. I’ll touch on that a bit later, but it’s safe to say you can ignore them almost entirely.

A Brief History and the VODER Study

If you’ve heard me talk about net metering, I’ve probably mentioned that originally, it was a concession to “that one guy.” And in Idaho, it was “that one guy” for 18 years. From 1983 to 2001, there was literally “one net metering customer” and their billing was done manually. Come 2002 or so when a few more people started asking questions, Idaho Power realized they needed to change something, so they went to the traditional kWh for kWh net metering setup - which, even at the time, they recognized wasn’t ideal, but it was the limit of what their meters of the time could do, so it was about the best option.

Starting some years back, Idaho Power started trying to replace net metering with “something else.” Back in 2018 or so, they proposed just slicing the rates paid for exported electricity with justification that I’ve heard described as “crayon scribbled on a bar napkin.” The PUC smacked their hand, told them “Not a chance,” and that if they wanted to change solar net metering, they had to come back with a study - and they put some constraints on the study that it be understandable by the general public, as well as holding up to expert scrutiny.

The PUC also told them that for anyone who had a system underway at this point, they had built it assuming that the net metering wasn’t going to change, as nobody had said anything about it - hence the “legacy” system designation, which means kWh for kWh net metering until Dec 2045. I’ve got it. I plan to keep it.

But the result, in 2022, was the VODER Study - Value of Distributed Energy Resources (mirror).

If you want to understand more than the surface level of what’s going on, I encourage you to go read it. It’s a fairly well written study in terms of meeting the requirements, and if you’re reading this blog post and interested in solar, you should be able to understand it fairly easily - they do a good job of explaining the concepts of what goes into power rates. There’s also some good history in it, including some charts of solar growth on Idaho Power’s network (yes, there are some other customer generation resources, but they round to zero).

On the other hand, if you’re just wondering why they tried to make some changes in 2017 and 2018, this is why - that’s right around the time they started getting swamped with requests to build new systems.

The VODER study pointed out that the value of a kWh to Idaho Power doesn’t really change depending on who exports into the system, but they were effectively rewarding them with very different rates based on the rate schedules (since it was credited at retail rate, effectively). And this is quite fair. After reasoning through a bunch of their system details, they came to the conclusion that a kWh of distributed, non-firm energy (“as, if, and when available”) is worth about $0.04/kWh to them (against a retail delivery rate of $0.10/kWh - which includes a lot of grid costs on top of the energy cost).

Of course, not everyone agreed with that, and a group called Crossborder Energy published a criticism of the VODER study (mirror). They take some great offense to various parts of Idaho Power’s methodology (rightly so…), and come up with a rather higher value for a distributed kWh. Again, this is a quite readable response, and if you’ve got any sense of how power systems work, please read it. They also talk about environmental benefits that Idaho Power basically ignores in the VODER study, and they also touch on the problem of methane leakage (any time we go looking for methane downwind of production, transmission, or usage of methane, we find a lot more than we expect). Based on their numbers, the value of that distributed kWh is greater ($0.14/kWh) than the retail rate, so there’s no problem with net metering as-is - it’s not a cost shift.

The application for the new rate schedule summarizes the VODER study, and then comes up with their proposal for export rates, based on the following costs. It’s somewhat better than what’s in the VODER study, and the on-peak rates are more than retail rates by a good margin - which is reasonable as well. Though I think the off-peak rates are a bit low. But this is what they’re arguing for.

Hourly vs Real-Time Net Metering

The other major change here is the transition from a monthly tracking of use (how many net kWh did you use during the month?) to what Idaho Power calls “Real-Time Metering.” What does this mean, exactly?

During any given period of time, you may be importing power from the grid or exporting power to the grid - and this relates to how that’s measured. Net metering simply looks at the total “net flow” through the meter at the end of any given period (hourly, daily, monthly), and bills based on that - so if you consume 10kWh one hour and export 10kWh the next, it works out to 0 at the end of that period. At one level it’s valid, but at another, you’ve gone about using quite a bit of grid resources to do that.

Realtime metering involves a meter that can count up, separately, both imported power and exported power. Idaho Power’s meters can do this, and have been doing it for quite some time, as can be seen on their power usage charts. Here, you can see that in each hour, I’m not just importing or just exporting, but I can be doing both - the 9AM hour involved importing learly as much as was exported, despite having moved ~1.5kWh both ways through the meter during that hour. Under the proposed system, for an hour in which I imported 1kWh and exported 1kWh, I’d pay about $0.05 during the off-peak season, and bank about $0.10 during the peak hours (in the summer afternoons).

The VODER study goes into more detail on hourly vs realtime net metering and the impacts it has on measured imports/exports. The short answer is that there’s about a 4% difference between the two, and I’m not sure it really matters, though I’d prefer to see hourly net metering as I don’t think the exact realtime use matters as much as the daily cycles of import/export (and realtime net metering starts getting closer to demand charges, in which you pay based on how your load stacks instead of just based on energy transferred).

But I Didn’t Know!

One of the most common things I see in the comment section is “Nobody told me this could change!” - and Idaho Power has rather reasonably both anticipated and responded to this objection in the Aschenbrenner testimony, on pages 36 and 37. The have a list of times they’ve communicated “things are likely to change,” and I’ve received quite a few various notifications, even though I’m a legacy customer.

They also point out that shortly after the decision in late 2019, they changed the wording on the customer application to make it (in their view…) really, really clear that things aren’t guaranteed to stay the same. Their sentiment seems to be, reasonably enough, “It’s not our problem if nobody reads what they sign.” At various points in the application and testimony, the concept of more of a transition period is rejected as “We’ve been letting people know that things could change for quite some time now, it’s no surprise if you’ve paid any attention.”

The Comments Section

Finally… grab your favorite drink and read the comments. They’re updated more or less daily, and 90% of them say the exact same thing, which is some variant of “But I spent soooooooo much money on my solar install to save the planet and now thanks to greedy Idaho Power, I’ll never make my money back!”

This is addressed directly in the testimony, as well - in the VODER study case IPC-E-22-22, somewhere, the PUC addressed this issue in Order 35631. In other words, that you got hosed to the tune of $4.50/W by some solar salesman isn’t any of their concern. Again, I really can’t argue here, other than to quietly point out that $1/W to $1.25/W (before any incentives/tax reductions) DIY ground mount installs are a thing, should you care to put the work in yourself.

What you won’t find very many of in the comments are comments by people who seem to have actually read the material, understand power systems, and can make a reasoned response as to why this application ought to be denied or modified by the PUC.

I plan to toss my hat in the ring soon, though, and if you’re going to make a comment there, please read through all the provided material and testimonies so you can understand what has and hasn’t already been said. Pointing out the errors in the VODER study that the Crossborder study pointed out would be a decent approach, as would the things that the VODER study just handwaved over as “Don’t care, not gonna.” Environmental costs would be a good one to focus on there, and the Crossborder study gives you some competent ammunition on that front as well. The PUC doesn’t need any more Reddit-style “But my ROI!” comments. You can find other criticism of the VODER study if you search, and working off those points would make for some better-than-average comments. If you want help wordsmithing, feel free to make an account on the attached forum.

I wouldn’t mind a bit of comment focus on requesting hourly or daily net metering too - I don’t think realtime is the right resolution, even though they can do it. It’s just not how the rest of residential power is metered, and it’s very close to a demand schedule in terms of stacking loads - which we generally don’t do on residential rate schedules for very good reasons. When the cost of 10kWh used over an hour varies depending on exactly how and when you use it in that hour, things start to get tricky to reason about.

Optimizing for the New Rate Schedule

Assuming it passes, what’s one to do to optimize for the new rate schedule?

If you’re one of the people who wondered why on earth I put in A-frames for my solar instead of just making it all south facing, this sort of rate schedule is exactly why - because reading the tea leaves, it seemed that Idaho Power was going to head this way, in some form or another - and the VODER study more or less confirmed it for me (though long after my system was operational). It’s within the capabilities of their current equipment and billing systems, and it makes a reasonable amount of sense in terms of “valuing interactions with the grid.” It’s not as nice as many would prefer, but I think it’s a fair system, and, honestly, a lot better than many of the systems I’ve seen (Buy-All-Sell-All, I’m looking at you).

The short of it is, “Consume as much of your own generation as you can while continuing to export, except for on-peak hours, then export as much as you possibly can.” Remember, it’s a one-meter system - so whatever you generate and immediately consume is entirely free for you. During off-peak hours, you want to maintain a slight export - it’s more expensive to consume 1kWh from the grid and then export 1kWh than it is to just keep your consumption below generation. I’ll suggest that “lower power devices using power over longer periods of time” are a good optimization here, as long as they operate during daylight hours. A heat pump water heater, for instance, is far better under this system than a resistive element heater - in addition to using less energy, it has a far lower peak power draw when operating (at least as a heat pump), so it’s less likely to push you into importing. Then tell it to only run during the day, and just store energy thermally at night. Off-peak, the trade is about 2:1 - push 2kWh during off-peak daylight hours, consume 1kWh any time you want.

During the peak months, you want to shove as much of your home energy use into the morning hours (or Sunday) as possible. Do laundry in the morning, run your air conditioner in the morning, etc. Come 3PM (our solar noon is 1:45PM in the summer around here, so it’s not as late as it sounds), use as little energy as possible so that you export as much as possible - and the details of this can vary, depending on what you value (more export credit, or more comfort). But try not to do laundry in the afternoon during the summer, perhaps shift EV charging to overnight (or morning), etc. Every kWh you push during peak hours is worth almost 2kWh of consumption the rest of the year, because of grid demand needs.

And if you happen to have an inventive way to increase your afternoon prodution (say, flipping your east panels up some), go for it! Optimize that summer afternoon exporting however you can, because it’s credits in the bank for winter!

This also means that if you’re considering building a system under the new rate schedule, optimize for summer afternoon production. A southwest facing system is ideal under this sort of rate schedule. But, also, optimizing your self consumption is worth a lot - so the whole A-frame, longer solar day thing, is a good optimization in this rate schedule.

This is an older set of production curves from my system, “sized to match.” There’s the standard “clean south facing solar curve” overlayed with my east-west facing frames. You can see how, for self consumption and export into the evening, the east-west stuff really makes a difference. And with this newer rate schedule, that’s a real difference.

Though I still can’t quite help the feeling that they’ve missed something here with the realtime monitoring, peak export credit, and “gaming the system.” If you produce 10kWh in an hour during peak and use 5kWh for your own uses, there are a few ways you could do it. You could evenly consume that 5kWh, and export a steady 5kWh, netting about $1.00 in credit for the hour. If you load things up to 20kW, and consume that 5kWh in 15 minutes then idle for the rest of the hour, you’ll consume 2.5kWh from the grid (at 10kW) in the first 15 minutes, at a ($0.12/kWh) cost of $0.30, and then get 7.5kWh of export credit for $1.50 - leading to a net credit for the hour of $1.20, which means you’re incentivized to abuse the grid. With hourly net metering, you’d still get the same 5kWh of credit, regardless of how you consumed it in that hour. Can someone else check my math here?

Final Thoughts

I was going to try to keep this post short… well, it’s short for me talking about power systems, I suppose. I’ve certainly written longer.

I don’t particularly mind that Idaho Power is trying to get away from net metering into a rate schedule that properly values solar exports. I just happen to think they’ve played some games, intentionally or not, that lead to undervaluing the exports by some amount during the off-peak hours - and I’d like to see more independent evaluation of their study and the costs proposed.

But overall, this is one of the better net metering sort of programs I’ve seen come through. I don’t think it’s solar-hostile at all - it’s just “expensive mid-day production” solar unfriendly, and, to that, I say “Good!”

Seriously, though. If you’re upset about how this will impact the finances of solar, just work out a DIY install at under $1.50/W installed cost, quite possibly by a good margin. I know $1/W ground mounts are doable out here, because I know people who’ve done it. Pay yourself that $40k instead of taking a solar loan! My forum is a good place for advice here.

If you’re interested in solar in Idaho, keep up with the case - and please submit intelligent and well thought out comments to the PUC!


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