The Idaho Public Utilities Commission (PUC) has approved utility Idaho Power’s application to build a 500 kW community solar project in southeast Boise.
According to the PUC, the $1.16 million single-axis solar project will allow up to 1,093 residential customers and 470 non-residential customers to buy one or more subscriptions (one subscription is a 320 W panel) for the solar farm’s anticipated 25-year life. Completion of the project is anticipated by June 2017. Some 350 kW of the 500 kW project will be apportioned to residential customers and 150 kW for commercial customers. Subscriptions will be rewarded on a first-come, first-served basis until program capacity is reached.
The PUC notes that commission staff and parties to the case, including the Idaho Conservation League, the Idaho Irrigation Pumpers Association, the Sierra Club, Snake River Alliance and the City of Boise, differed with Idaho Power’s initial subscription fee proposal and the method that would be used to calculate the monthly credit subscribers would get for their part of the solar generation. The parties engaged in settlement discussions to work out their differences, and members of the public also provided comment.
“The record demonstrates that there is great interest and enthusiasm” for the program, the commission said. “We appreciate the intervening parties’ willingness to engage in settlement negotiations to address the various concerns raised … In this way, the public interest is best served.”
According to the PUC, Idaho Power originally proposed a one-time fee of $740 for each subscription. After negotiation, the company and parties agreed on $562, while also allowing customers to pay either at one time or in monthly installments of $26.31 over 24 months.
Parties also said the company’s proposed 3-cent/kWh credit would not be enough for subscribers to recoup their investment. Idaho Power originally proposed the credit be calculated based on the embedded cost-of-service to serve each customer class, but the PUC says commission staff and other parties said that method does not take into account the value that a new generation resource provides to Idaho Power’s system, particularly a solar resource that provides energy during high-use hours of the day.
Because Idaho Power operates its system to minimize ratepayer costs, a new generation project would allow the company to avoid using its most expensive resource, thus providing greater value than just embedded cost-of-service. Therefore, the PUC adds, the credit given to customers should be based on an avoided-cost calculation and not on embedded cost-of-service.
Eventually, the company and parties agreed on a solar energy credit that reflects Idaho Power’s recommended embedded cost of energy, but one that gradually increases as the retail energy rate increases. Idaho Power projects the credit could increase from about 3 cents now to about 4.4 cents in 25 years.
The PUC says the project was requested by Idaho Power customers that cannot install their own rooftop solar panels because they live in rental properties or multi-unit dwellings, have aging rooftops, too much shading or an unsuitable rooftop orientation Both Idaho Power and the commission said the pilot status of the program will help the company and commission develop future, perhaps larger, projects.
Small-scale pilot programs, the commission said, “are valuable for learning what works and what does not.” Idaho Power said the pilot will assist the utility in learning the “complexities associated with offering community solar programs including: customer commitment, construction, contracting, interconnection, maintenance and billing.”
Idaho Power will retain ownership of the renewable energy credits (RECs) and all other environmental attributes. The RECs would be retired by Idaho Power on behalf of subscribers.