Loading...
HomeMy WebLinkAbout20250515Comments.pdf Tyler Grange RECEIVED y g May 15, 2025 6149 Meeker Place IDAHO PUBLIC Boise ID 83713 UTILITIES COMMISSION 208-997-6527 Tvler&idahomeenergy.com BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER COMPANY'S APPLICATION FOR ITS CASE NO. IPC-E-25-15 FIRST ANNUAL UPDATE TO THE EXPORT CREDIT RATE FOR TYLER GRANGE'S COMMENTS NON-LEGACY ON-SITE GENERATION REGARDING THE FIRST UPDATE TO CUSTOMERS FROM JUNE 1, 2025, IDAHO POWER'S EXPORT CREDIT THROUGH MAY 31, 2026, IN RATE COMPLIANCE WITH ORDER NO. 36048 At the request of IPUC Staff at the May 7t'Public Workshop, I would like to propose a separate and simple method for determining the Export Credit Rate (ECR), supported by many of the local industry professionals, including but not limited to installers, self-generators and distributors. We believe the current method, approved by the IPUC, does not seek fairness for the consumer, but rather disproportionately grants the company an excessive margin of profitability and does not pertain directly to the fixed costs associated with providing the infrastructure needed for our distributing means to interconnect to the grid. Background Without the ability to have an impartial 3'parry conduct these calculations we cannot be confident in the utility's proposed costs to provide the infrastructure needed for self-generators to self-consume solar production or to share excess generation with immediate neighbors. Therefore, we will not rely on biased, historically inaccurate data to be applied. Idaho Power unabashedly attempts to slow the growth of the self-generating community, evident by incorrect and misleading information found on the Idaho Power website. The information provided is inaccurate and intentionally skews the reader's opinion to deter interest in installing solar. We believe the same effort is evident in the VODER study and recent proposal provided by Idaho Power to deter consumers from installing the only alternative source of energy. We must remember, this is a private, for-profit utility with a monopoly on electric resources in their service territory, and the PUC is meant to ensure it's not overreaching. The data received by the IPUC and applied to the current system of establishing the ECR is given from the utility's perspective. The IPUC has rejected the overwhelming desire of the consumers it serves to TYLER GRANGE'S COMMENTS REGARDING THE FIRST ANNUAL ECR UPDATE - 1 have the means of procuring impartial data and methodologies to be applied in determination of the ECR. By allowing Idaho Power to develop its own methodology, with inherent biases and assumptions, and approving that framework with very little revisions, it is our belief that the IPUC has failed its primary regulatory duty. As the only regulatory agency tasked with checks and balances and protecting the consumers, having failed to regulate the investor-owned utility, we believe Idaho Power can and will be subject to an anti-trust complaint and investigation. Customer Financial Impacts In the May 7`'Public Workshop, the staff of the IPUC admitted having a limited understanding of the financial impact the adjustment to ECR has on Idaho Power self-generating consumers. The negative effects of these decisions are devastating on the well-being of the consumers the IPUC is sworn to protect. To demonstrate the magnitude of negative effects the change to net-billing and this proposal has had or could have,we, as industry experts, have provided a summary below, highlighting the significant increase in cost to the consumer to maintain a similar offset of electric utility costs. Important note: The Residential Solar Providers Disclosure Act(48-1805)was adopted to mandate that Solar companies accurately represent the financial assumptions when estimating a system for potential consumers. The current and proposed net-billing structure will not allow an accurate representation as the data cannot be collected to correctly assess the utility offset. Please review the following information. All information is accurately collected and assessed by many industry-specific resources. We believe all information provided to the IPUC should be fact-checked by an impartial entity. 2023 Net-Meter(excess generation)Value(avoided cost of electricity for residential consumers)= 10.97¢/kwh Value of Net-Meter is concluded by the avoided average price per kWh, although the retail value, once solar had been installed, was considered roughly 8.9¢/kwh as self-generators with equal annual production/consumption were not billed at a tier 2 or tier 3 rate. *Retail value 10.97¢/kwh(average residential price per kwh) Source:https://www.eia.gov/state/print.php?sid=ID Current Net-billing (excess generation) compensation (Jan 2024—present) Summer On-peak 16.43¢/kwh 54.5% increase from 2023 Summer Off-peak 5.6533¢/kwh 48.5%reduction from 2023 Non-Summer hours 4.8365¢/kwh 55.8%reduction from 2023 Annual Average 6.2348¢/kwh 43.1%reduction from 2023 Proposed Net-billing (excess generation) compensation: Summer On-peak 14.0598¢/kwh 14.4%reduction from current Summer Off-peak 1.7682¢/kwh 68.7%reduction from current TYLER GRANGE'S COMMENTS REGARDING THE FIRST ANNUAL ECR UPDATE - 2 Non-Summer hours 0.9540¢/kwh 80.3%reduction from current Annual Average 2.4585¢/kwh 60.2%reduction from current Total proposed annual reduction from December of 2023 87.6% This would be the single largest decrease to solar net-billing in the country's history,surpassing California's roughly 75% decrease with NEM3. A solar prospect prior to December of 2023, intending to offset 100% of their usage charges, would have received an estimate with the following parameters: 1. The system, however designed(brand/rating of components/panels), would be required to produce an equal or greater amount of electricity than the homeowner consumed in the prior 12 months. a. This information is provided by software specifically designed to indicate a solar system's potential output and includes an assumption of weather condition data. b. The weather condition data is provided by three different condition sets, our design team chose the middle output,providing the best chance of accuracy using the variable data. 2. The excess energy(produced by the system and not immediately consumed) would be passed beyond the meter to be compensated for. These kWh credits would be held in perpetuity and applicable to imported energy from Idaho Power. 3. Because the energy consumed could be easily matched by the systems expected production a fairly accurate assessment could be made of utility offset. 4. At this time the National and regional average price per watt for a solar system fully installed was $3.20/watt. a. A 7 kW system would generate enough electricity to offset$100-130/month of utility expense. b. The variability of offset is due to the tilt, azimuth and shading of the panels as well as many other factors. c. A 7 kW(DC Nameplate capacity) system would sell for approximately $22,400 given the $3.20 average above. 5. Although usage costs can be avoided, a connection fee of$5/month and a municipal charge of 16-21¢ was required to pay on all monthly bills. A current solar prospect intending to offset 100% of their usage charges would receive an estimate with the following parameters: 1. The system, however designed, would be required to produce a multiple of 1.155 to 1.25 times the energy consumed in the prior 12 months. a. Idaho Power claimed the average annual compensation for excess energy is 6.18¢/kWh. b. Providing the majority of self-generators stayed in the tier 1 billing; the average retail cost of electricity is roughly 9¢/kWh annually. c. We can now deduce, on an average basis, compensation for excess energy had been reduced by 31%. d. A facility generating an equal amount of electricity to their prior 12 months consumption on average uses half(50%) of the production immediately and will pass on the remaining half(50%)to the utility for compensation to be applied to future billing. e. If half of the energy produced loses 31% of the compensation, we believe a 15.5% (half of 31%) deficit would need to be accounted for. TYLER GRANGE'S COMMENTS REGARDING THE FIRST ANNUAL ECR UPDATE - 3 2. Because the value of compensation has such a vast difference seasonally and by hour it would be nearly impossible to factor the prospects hourly consumption data vs. the hourly production data and account for accurate excess credits. Therefore,we chose to overcompensate and under-assume (degrade) system production relative to the loss of value at an additional cost to the consumer. a. If usage for the specific prospect is highest in the summer, we could assume the value of excess energy would most likely be lower than the 6.18¢/kWh average provided by Idaho Power. We would then propose the estimated production of 120-125% of last year's consumption even though the potential for immediate use of solar production would increase. b. If usage for the specific prospect is highest in the winter, we could assume the value of excess energy would most likely be higher than the 6.18¢/kWh average. Even though the potential facility will most likely offset more utility expenses than we've estimated we would still propose the estimated production would need to be a minimum of 115.5% of last year's consumption. 3. We do not account for service charges, fixed cost adjustment or power cost adjustment in the offset assumptions, although beginning in January of 2024, these fees can be paid for by excess generation. a. Example: the current $15 monthly service charge could be paid for by oversizing the system. For every $1 of offset, the system will need to export 16kWh at the recently claimed annual average of 6.24380. If we apply these credits to the $15 service charge, an additional 241kWh's per month would be required. The production needed to offset this expense annually can be produced by five (5) of the current 435-watt panels we are installing. b. If a client would like to produce enough energy to compensate for the additional monthly costs (aside from the base rate) although variable and prorated based on volume, we assume an average of roughly $25-30/month, typically 8-10 additional panels required. 4. Battery storage can now increase the value of self-generated energy by increasing grid-independence; a term used to describe the percentage of consumption directly from distributing resources. a. As noted above, a homeowner producing an equal amount of electricity to the consumption will have a grid-independence of 50% on average. If the home consumes 40kWh per day the system will produce roughly 80kh. Instead of sharing the excess 40kWh beyond the home and decreasing the monetary value, a battery can store some or all of the electricity to be used when solar production is not available. If 20kWh battery storage capacity is available to be cycled each day, this homeowner would then have a 75% grid independence. Only 25% of the system's production would now have a reduced value. b. A battery system can also be programmed to offload stored electricity to the grid during increased compensation times. During the Summer on-peak times each kWh passing outside the home will generate a credit of 16.99660. Solar facilities with batteries are incentivized to distribute as much energy as possible, assisting in the excess demand Idaho Power sees in peak usage times. c. Our estimates do not include the added benefit of grid-independence or battery programming during Summer on-peak simply because the value cannot be determined with the limited information available. Hourly production and consumption data for the individual would be needed as well as hourly weather data. Once this information is available the conclusion will be in reference to the prior years' data and consist of too many variables to consider accurate. TYLER GRANGE'S COMMENTS REGARDING THE FIRST ANNUAL ECR UPDATE - 4 d. The added benefit of battery storage is best calculated by assuming the remaining grid-dependence and what percentage of the facility's production is exposed to decreased value from net-billing. Thus, the higher the percentage of grid independence, the more valuable the produced electricity is. e. If a client would like to increase grid independence and mitigate the loss of value, the cost is roughly $1.50/watt for battery storage capacity considering the battery and additional infrastructure required. 5. Currently the National and regional average price per watt for a Solar system fully installed is $3/watt. a. The prior offset of$100-$130 is now increased due to the rise in the base rate of power; almost 8% last June and almost 4% in January and now requires a production increase of 15.5-25%to offset the same monthly payment. The prior 7 kW system must now be an average of 8.4 kW. b. An 8.4 kW system installed is now sold at a price of$25,200 given the $3/watt. A future Solar prospect, given the proposed net-billing compensation and intending to offset 100% of their usage charges, could receive an estimate with the following parameters. 1. The system, however designed, would be required to produce a multiple of 1.37 to 1.52 times the energy consumed in the prior 12 months. a. The assumption has been made, in Idaho Power's net-billing proposal the average annual compensation for excess energy would be 2.4585¢/kWh. b. Providing the majority of self-generators stayed in the current tier 1 billing; the average retail cost of electricity is still claimed to be roughly 9¢/kWh annually. c. We can now deduce, on an average basis, compensation for excess energy will be reduced in value by 73%. d. A facility generating an equal amount of electricity to their prior 12 months consumption on average uses half(50%) of the production immediately and will pass on the remaining half(50%) to the utility for compensation to be applied to future billing. e. If half of the energy produced loses 73% of the compensation, we believe a 36.5% (half of 73%) deficit would need to be accounted for. 2. Because the value of compensation has such a vast difference seasonally and by hour it would be nearly impossible to factor the consumers hourly consumption data vs. the hourly production data and account for accurate excess credits. Therefore, we would choose to overcompensate and under-assume (degrade) system production relative to the loss of value, at an increased cost to the consumer. a. If usage for the specific prospect is highest in the summer, we could assume the value of excess energy would most likely be lower than the 2.4585¢/kWh average provided by Idaho Power. We would then propose the estimated production of 145-152% of last year's consumption even though the probability of immediate use of solar production would increase. b. If usage for the specific prospect is highest in the winter, we could assume the value of excess energy would most likely be higher than the 2.4585¢/kWh average. Even though the potential facility will most likely offset more utility expenses than we've estimated, we would still propose the estimated production at 136.5% of last year's consumption. 3. We do not account for service charges, fixed cost adjustment or power cost adjustment, or other fees in the offset assumptions. The client can request additional panels to offset the cost of these fees, however, we would strongly discourage this as the payback on investment is now outside of the life of the product. TYLER GRANGE'S COMMENTS REGARDING THE FIRST ANNUAL ECR UPDATE - 5 a. Example: the current $15 monthly service charge could be paid for by oversizing the system. For every $1 of offset, the system will need to export 41 kWh at 2.45850. If we apply these credits to the $15 service charge, an additional 615 kWh per month would be required. The production needed to offset this expense annually can be produced by thirteen (13) of the current 435-watt panels we are installing. b. If a client would like to produce enough energy to compensate for the additional monthly costs (aside from the base rate) although variable and pro-rated based on volume, we assume an average of roughly $25-30/month, typically 20-26 additional panels required. 4. Battery storage can increase the value of self-generated energy by increasing grid-independence as defined above. a. During the Summer on-peak times each kWh passing outside the home will generate a credit of 14.05980. b. Our estimates will not include the added benefit of grid-independence or battery programming during Summer on-peak as explained above. c. If a client would like to increase grid independence and mitigate the loss of value, the cost is roughly $1.50/watt for battery storage capacity considering the battery and additional infrastructure required, however, this cost is expected to increase as the moratorium on tariffs for Lithium products and ancillary components has now ended. 5. The National and regional average price per watt for a solar system fully installed is expected to increase 5-10%by Q3 of 2025 as the moratorium on tariffs for imported solar products has ended. If we assume the lower end of the estimate (5%), the price per watt will be $3.15. a. The prior offset of$1004130 will now require a production increase of 36.5-52%to offset the same monthly payment. The prior 7 kW system must now be an average of 10.01 kW. b. A 10.1 kW system installed is now sold at a price of$31,532 given the $3.15/watt. In summary: 1. A prospective solar customer would pay 41.1%more, following the acceptance of this proposal, to offset the same ratio of usage charges as they did in 2023. According to a well known source for local and National solar data, Energ,�Sage, the average power bill in Idaho currently requires 12.68 kW to offset. a. Pricing comparison: • 12.68kW/1.2 = 10.56 kW(system size required in 2023) Cost of$33,792 ■ 12.68kW(system size required currently) Cost of$38,040 • 10.56 x1.4425 = 15.233 kW(system size required June Pt as proposed) Cost of $47,9842 2. The Idaho Public Utilities Commission has stated their Mission to be: • Determine fair,just, reasonable and nondiscriminatory rates and utility practices for electric, gas, telephone and water consumers. a. This proposal is not and cannot be perceived as "fair," "just," "reasonable," or "nondiscriminatory." 1. "Fair" - The distribution of electricity by Idaho Power is monopolistic by definition. a. Fairness would be allowing a homeowner the ability to provide electricity to their home by any other means not inhibited by the utility company. The vast majority of homeowners are required to supply electricity to their property via the electric utility company per the neighborhood CCR's. The only alternative source of distribution, not unaffordable in comparison to the electric utility, is privately owned solar facilities, owned and maintained by the homeowner. Additionally Idaho Power refuses to allow TYLER GRANGE'S COMMENTS REGARDING THE FIRST ANNUAL ECR UPDATE - 6 private individuals or companies to install community solar systems if connected to their grid. b. The value of the excess energy provided by the facility is uniquely determined by the IPUC. This type of commodity value determination by a small body of three Governor appointees is unprecedented and affects now close to 20,000 self-generating facilities. This determination will negatively affect the well-being of these individuals and their families whilst granting the privately owned power company another record year of profit. 2. "Just"—The IPUC has refused to robustly consider third party testimony or studies provided to discredit the findings of Idaho Power and their heavily contested value determination of the ECR. a. The Crossborder Energy study directly refuted much of the testimony provided by Idaho Power in the prior case, leading to the decision to allow the net-billing program as we have today. b. The method for checks and balances of Idaho Power's testimony has not been disclosed, rather a public perception exists; the IPUC seems to have taken the private utility company at their word. This is not just, and the people of this community have repeatedly clamored for a re-calculation by any third parry. It is the responsibility of the IPUC to ensure that Idaho Power is not unfairly skewing rate calculations in its favor and to justify the decreasing compensation to the self-generators in Idaho and it is our opinion they've failed to do so. 3. "Reasonable"—It is not reasonable to lessen the value of compensation to self-generating consumers by 87.6% over a 1.5 year span; increasing the cost of a system to comparatively offset by more than 41%. The current self-generators will take a massive hit to the affordability of electricity, setting the industry and the advancements in technology back roughly 8-10 years in regard to price vs. cost of utility. a. In 2019 the IPUC suggested the change in compensation would be contingent on a third-party study, easily understood by the public and failed to hold accountable to either of these demands when reviewing the VODER study. 4. "Nondiscriminatory"— Service charges have openly been called discriminatory as the fees disproportionately affect low-income individuals. a. An individual in a large home with an average usage cost of$300/month would have seen a$10 increase in service fees from 2023 to now; a 3.33% increase in cost per month. b. An individual living in a small home,potentially low-income, with a usage cost of$50/month would have seen the same $10 increase in service fees; a 20% increase in monthly utility expenses. Next year, the $10 addition will account for a $20 increase in monthly service fees in just two years, a 40% increase for the small homeowner. c. If either homeowner would prefer to provide an alternative to the utility expense the cost has risen dramatically to pay the additional fees for service and other charges. As indicated above, 20-26 panels, a system size of 10.005kw ($31,515.75) is needed to cover the cost of these fees annually, this directly discriminates against a group of people; the solar TYLER GRANGE'S COMMENTS REGARDING THE FIRST ANNUAL ECR UPDATE - 7 community and disproportionately affects low-income individuals right to supplement energy costs or to offset expenses. • Ensure the delivery of safe, reliable and efficient utility services. a. This proposal is not and cannot be determined to promote increased or even maintained safety, reliability or efficiency. 1. "Safety" - solar energy is considered safer and more environmentally friendly than traditional utility power sources, as it doesn't produce pollution, requires little water, and avoids the environmental damage associated with fossil fuel extraction. Most importantly,wildfire has never been caused by a solar panel or solar farm in the state of Idaho. Disincentivizing solar installations in any manner, especially as dramatic as this proposal, reduces the safety of consumption/distribution. 2. "Reliability"—Solar installations directly affect the reliability of the grid in positive means. Reducing the necessity for increased transmission and distribution efforts as well as providing individual resources of sustainable energy provisions due to isolation components with battery systems. Disincentivizing solar installations and reducing the supplemental demand assistance provided directly negates the mission to provide and maintain reliability, especially as Idaho Power has increased recent messaging regarding outage preparedness. 3. "Efficiency"—There is no more efficient manner of consuming electricity than self-consumption and on-site generation to be used within a small radius. Further negating the value of distributed energy resources by individuals is harming the efficiency of transmission and distribution. • Regulate the public utilities to secure and promote general safety, health and public welfare. a. This proposal is not and cannot be determined to promote increased or even maintained safety, health or public welfare. 1. "Safety" - (see point above) 2. "Health" - Solar power is generally considered healthier than the grid because it's a clean, renewable energy source that produces zero emissions, unlike traditional grid power often generated from fossil fuels,which contribute to greenhouse gas emissions and air pollution. Disincentivizing solar installations directly negates the health advantages of solar generated electricity as an alternative to the majority of Idaho Powers procurement resources. 3. "Public Welfare"—It is not in the best interest of public welfare to lessen the value of compensation to homeowners by 87.6% over a 1.5 year span; increasing the cost of systems to comparatively offset by more than 41%. The current self-generators will take a massive hit to the affordability of electricity, setting the industry and the advancements in technology back roughly 8-10 years in regard to price vs. cost of utility. We believe the following must be considered: 1. The ECR should be easily understood by the General Public. a. The current method of valuing the export rate credit is largely not understood by the public or even many solar installers. b. It is impossible for a consumer to compare their usage on an hourly basis to the facility's production and calculate excess distribution to the grid. The current method does not allow a consumer to fact-check the data received and advocate for TYLER GRANGE'S COMMENTS REGARDING THE FIRST ANNUAL ECR UPDATE - 8 themselves regarding billing errors. To state that Idaho Power has never made a billing error is grossly false, however, how would a consumer be able to tell? c. The ECR is currently subject to change each year at the discretion of the IPUC following reporting by Idaho Power. Consumers cannot accurately assess the value of their distributed energy in effort to make a financial decision. We believe this is used to intentionally deter future investments in self-generation. 2. The ECR should not be evaluated by determining the costs Idaho Power didn't have to pay (avoided cost) to purchase energy from other resources. a. The energy produced and consumed on site or by the next closest facility,unless rare circumstance exists, does not utilize much of Idaho Power's infrastructure if any. b. It is not reasonable to claim the difference between the average ECR and average retail cost of electricity, roughly 8.5¢/kWh is required to pay for Idaho Power's fixed costs for upkeep and maintenance due to distribution facilities. c. Self generators should not be subject to paying for Idaho Power's other business efforts, land purchases,profitability or any funding methods not directly related to solar facilities. 3. The ECR should not change each year, causing high volatility and unstable investment expectations. a. It is irresponsible to rehash the value of excess generation each year. The use of resources,paid for by the customers of Idaho Power,required for Idaho Power to provide a biased and easily discredited report each year, is a waste of funds. b. Each year the IPUC will have to review another proposal to allow Idaho Power to lessen the value of customer owned distributed energy resources, followed by a lengthy gripe by the affected community. Idaho Power has a lengthy and proven record of effort to slow the growth of self-generated energy. Why would we allow the company to repeatedly suggest less and less compensation for their only competition each year and waste the Commission's time and the solar community's time. Alternative Proposal We suggest a simple method, adopted by several other large privately owned utility companies across the country for determining excess credit rates with an additional seasonal consideration. This method provides the general public with an easy-to-understand calculation of export credit rates and allows the solar community to provide accurate offset assumptions. We are willing to compromise in a good faith effort for Idaho Power to exceed the cost recovery needed to more than pay for all infrastructure and administrative burden caused by self-generators with additional room beyond fixed costs for profitability or to be applied elsewhere. Residential 1. October 1st to May 30t'of each year(non-summer); for every kWh of excess distribution from the generating facility, the facility will receive a credit of 50% of that month's current tier 2 billing rates for residential customers. 2. June 1st to September 30t'of each year(summer); for every kWh of excess distribution from the generating facility, the facility will receive a credit of 100% of that month's tier 2 billing rates for residential customers. 3. The same compensation rates will apply to the customers opting for Time of Use Billing. TYLER GRANGE'S COMMENTS REGARDING THE FIRST ANNUAL ECR UPDATE - 9 Commercial 1. Non summer(defined above); will receive 50% of the average price per kWh for the month received. 2. Summer; will receive 100% of the average price per kWh for the month received. Other considerations 1. The method approved will not change or be reviewed for 10 years from the active date. 2. The compensation must adjust as retail costs change for the consumer. The 50% and 100% values will adjust as rates increase/decrease. Respectfully submitted, DATED: May 15, 2025. Tyler Grange TYLER GRANGE'S COMMENTS REGARDING THE FIRST ANNUAL ECR UPDATE - 10