Case No. IPC-E-06-17, Order No. 30227

January 30, 2007

Contact: Gene Fadness (208) 334-0339



Net metering customers will continue to get retail rate


Residential and small-business customers of Idaho Power Company who participate in the company’s net metering program by generating their own electricity and selling their surplus (the amount that exceeds their consumption) back to the company will continue to be paid the full retail rate rather than a wholesale rate, as originally requested by Idaho Power.


However, an order recently issued by the Idaho Public Utilities Commission allows Idaho Power to include power supply expenses associated with the net metering program for residential and small-business customers in its annual power cost adjustment (PCA) process for possible later recovery from customers.


Idaho Power has about 27 residential and small-business customers who offset their own power consumption by generating their own power with small hydro, wind or solar projects. Another 13 customers have pending requests for net-metering generation interconnects.


In August, Idaho Power filed an application with the commission to pay net-metering residential and small business customers an amount equal to about 85 percent of the wholesale market rate for electricity rather than the full retail rate for that amount of generation that exceeds their use. In December, the company modified its application to leave the rate paid for excess generation the same. The final order issued by the commission leaves the rate the same, but grants Idaho Power’s request to recover expenses associated with the net metering program through its annual power cost adjustment process. The order also grants the company’s request to remove a financial impediment for customers in classes other than residential and small-businesses to participate in net metering. The order removes the requirement that those customers have a second meter.


In its original application, Idaho Power asserted that excess generation from residential and small-business net metering customers is “non-firm,” or intermittent. Thus, those customers should be paid the same rate – a lower wholesale rate – as all sellers of non-firm energy. Under the current system of paying full retail rate for excess generation, Idaho Power said it does not recover its full costs of providing service to net metering customers and that those costs are shifted to the remaining residential and small-business customers who do not have net metering. Customers do get the full retail rate for all the energy that offsets their own consumption, but the company believes that generation in excess of the customer’s consumption should be viewed differently.


The commission said the amount of excess generation sold back to the company by net metering customers is not substantial enough to warrant a revision to the tariff. The cumulative capacity of existing net metering projects is 336 kilowatts and the total amount paid for the projects’ excess generation over the past 12 months was $23,102. “If this increased substantially, it would be necessary to reconsider the pricing of excess generation. There is no need for that reassessment at this time,” the commission said.


The commission cautioned potential net metering customers against relying on continuation of the current tariff when calculating their investment in net metering projects. “We must note that the net metering program price is a tariff rate. It is not a contract rate. As a tariff rate, it is subject to change,” the commission said. “A persuasive argument could be made that net metering customers are being subsidized by other customers.”


A full text of the commission’s order, along with other documents related to this case, are available on the commission’s Web site at Click on “File Room” and then on “Electric Cases” and scroll down to Case No. IPC-E-06-17.