Blaine County and three of its cities think Idaho Power is undervaluing solar energy—and they’re letting state officials know.
The cities of Bellevue, Hailey and Ketchum, along with Blaine County, submitted a joint letter to the Idaho Public Utilities Commission last week on what they believe to be a flawed study that is being used to inform changes to the rate structure of solar credits.
“Right now rates are really great, which is incentivizing people to install solar, but [Idaho Power is] basically recommending some really significant changes in the way they view the value of that solar energy generation,” said Lynne Barker, Sustainability Manager for Blaine County. “And so what we wanted to point out is that we just felt that their study was insufficient in terms of understanding the full value of clean energy.”
Under Idaho code, any time Idaho Power wants to change its rate structure, it must go before the Public Utilities Commission for approval. The Public Utilities Commission is a three-person regulatory body appointed by the governor and confirmed by the state Senate.
“We... hope that the Public Utilities Commission reconsiders their methodology,” Ketchum City Administrator Jade Riley said.
Idaho Power conducted a study on “the value of distributed energy resources,” or “VODER,” as they titled it—essentially a cost-benefit analysis of solar energy in the state. This study was sent before the Public Utilities Commission to help the panel understand what changes to the current rate structure should be made for excess solar compensation.
An independent review of the Idaho Power Study by Crossborder Energy concluded that “Idaho Power’s choice of assumptions and calculation methods significantly undervalue the five components that the utility quantified.” These five components are avoided energy costs, avoided generation capacity, transmission and distribution deferral, avoided line losses and integration costs. Each of these components was assigned a dollar per megawatt hour (MWh) value.
The total value of all these components according to the VODER study was just under $38/MWh. The Crossborder review valued the total at about $141/MWh.
The letter from Blaine County and its cities—as well as the independent study—make the claim that there are other aspects that the VODER study did not address.
The Crossborder review states that “environmental benefits that do not result in direct savings, or an avoidable cost, are not included in [Idaho Power’s] study. Similarly, environmental benefits based on non-quantifiable or speculative values are not included in [the VODER anaylsis].”
“Despite acknowledging the social cost of carbon, and the associated methodologies to quantify it, these were left out of the VODER study calculations,” the joint letter states.
The social cost of carbon is the marginal cost of the effects of emitting one extra ton of greenhouse gas into the atmosphere. This methodology is often used to evaluate policies designed to limit greenhouse gas emissions.
“The metric was developed under the National Academies of Science, Technology and Medicine, who brought together stakeholders across federal agencies to really evaluate and assign a metric for the social cost of carbon, and, right now, the metric is at $51 per ton,” Barker said.
Barker emphasized that this study could have potentially drastic effects on the state’s solar industry.
“People need to understand that the decisions made by the Public Utility Commission have longstanding impacts on our access to clean, affordable energy,” she said. “The fastest growing jobs sector in the nation is the clean energy sector, and Idaho is so well positioned to be able to take advantage of that because we have really great clean energy resources.” 
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Be sure you do your diligence on who is behind the local push for solar. Follow the money and you may be surprised.
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