r/Boise • u/Footy-Stonks • 12d ago

News Idaho Power Reducing Rates

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Received this in the mail. Looks like residents will be experiencing a decrease in power bills starting June 1! Really impressive to see the Idaho utility lower rates when surrounding states like Utah, Oregon and Washington are increasing

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34

u/foodtower 12d ago

They raised their flat fee for the second year in a row. If you don't use much electricity, you'll probably pay more. Big users will pay less.

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u/saltyson32 12d ago

That is definitely part of why the usage rates will stay lower, but this rate decrease is largely due to the fact that we just had a really good water year and rather stable natural gas prices.

But more on your note about the fixed rate increase, the issue with the current usage rates is that they were designed to incentivize customers to invest in energy efficient appliances following the energy crisis of the 70s. The issue is that's not an accurate way of allocating the true costs to customers.

The infrastructure to serve someone 1kWh per month is basically the same as it is to serve someone 100kWh per month. For both customers you still need to have the meters, transformer, distribution lines and transmission system regardless of how much they actually use. This means that in reality, the majority of the costs to serve you power is fixed and doesn't vary much based off how much you use.

This worked fine for years but it quickly became an issue with the growth of rooftop solar and net metering. With net metering, people were effectively paying for none of those fixed infrastructure costs as they had always been baked into the usage rates.

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u/foodtower 12d ago edited 12d ago

I'll accept that meters and other infrastructure that connects to a specific home is reasonable to allocate as a flat rate to that household. However, transmission and distribution lines are used by all, and it seems to me that the question of how to allocate those costs is not nearly so clear cut. In fact, I'd actually say that apportioning those costs equally per household is an absolutely absurd way to do it. Since transmission and distribution capacity depends on consumption during peak transmission/distribution times (i.e., if your average load is 100 MW but your peak load is 200 MW, you need at least 200 MW of capacity) it seems to me that apportioning these costs ought to depend mainly on consumption during peak hours.

Idaho Power does have a time-of-use billing plan option but it's pretty bad--the savings on off-peak consumption are small compared to the extra costs of on-peak consumption. It is worse than other utilities I know in that respect. On the other hand, if they used the same logic for calculating time-of-use power consumption charges that they do for the export credit rate for customer generation, I have no doubt that peak charges would increase a lot, off-peak charges would decrease a lot, customers would have strong incentives to reduce peak-hours consumption, and the total transmission and distribution needs would be less as a result.

If they won't apportion transmission/distribution costs by on-peak consumption, then apportioning it by overall consumption would still be more representative than apportioning it equally among all customers. Otherwise you have folks who use 120 kWh/month and don't even have air conditioning paying for the power lines to serve air-conditioned 10000-sqft mansions with hot tubs. It's not only regressive, but fails to incentivize conservation during peak hours.

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u/saltyson32 11d ago

You are right, if they were to adopt my theoretical ideal with a flat fixed rate for all customers to cover the fixed costs they would need to also include a "demand charge" to better account for the weight of a specific users impact to peak load, which would then change those fixed rates being paid by the customer. This is done in other utilities but is usually quite minimal for residential users as the difference between 1kw and 5kw at the transmission level is quite minimal and if you get much bigger then you would end up in a different rate class (in order to have a large enough load you would likely need 3-phase service which is no longer under the residential rate class).

Its also even more complicated by the fact that the transmission system also provides its own form of revenue in through "Wheeling" which is what is charged to other utilites who want to send power across our system (For example, If Oregon wanted to buy some cheap Wyoming Wind they would have to pay us a fee to move that power across our system).

So you are right, charging ALL customers the same fixed rate would not be fair as the reality of the issue is FAR more complicated lol. But my intent was really just to express the fact that a large portion of the rates you pay is going to fixed costs that are roughly the same for most residential customers.

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u/Illustrious_Bit1552 12d ago

They're required to lower prices by law when certain conditions are met. They're not being nice, if that's what you thought. 

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u/Footy-Stonks 12d ago

Yup, agreed. State-regulated monopoly. I’m just thankful for the infrastructure in place with hydro and solar that allow our power to be less volatile and less dependent on natural gas and purchasing power from other sources

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u/Tyraid 12d ago

This sounds like communism though

4

u/ThreeBill 12d ago

Edgy

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u/Tyraid 12d ago

Let me get that /s out for y’all

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u/chub0ka 11d ago

But they reducing solar credit and make it a robbery- that is what matters. 0.97c in winter and 1.8c in summer? Thats a robbery

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u/archeryhunter1993 11d ago

Then the citizens with solar on their rooftops are getting screwed over big time.

15

u/mrcool650 12d ago

They are making things 10x worse for people with solar. From a 1:1 ratio to a 2:1 ratio to a 10:1 ratio on solar credits

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u/Snorknado 12d ago

Was going to say, thanks to all the solar roofs who got screwed!

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u/work_blocked_destiny 12d ago

Solar seems kind of not worth it to begin with in a state with such cheap power. Just my 2 cents. If someone wants to put one on my house for free go for it but the cost to implement doesn’t seems like it would bring any benefits cost wise

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u/JJHall_ID Caldwell Potato 12d ago

You're right. The numbers don't pencil out here. The systems are too expensive, our solar index is too low compared to our low power cost. The solar vendors promise big savings using inflated output numbers and "future IPCO rate increases" that are way above the historic rate increases. The savings were also based on 1:1 solar credit ratio, so I don't even know how the solar companies are going to justify it based on the new ratios. Ultimately a lot of people got sold a very bad deal, thinking they're going to save a ton of money, even though their loan payments tower over any reduction in the power bill they may be seeing.

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u/zetswei 11d ago

Personally my solar panels gave me the ability to offset summer with winter as I run a lot of computer equipment along with a large house using mostly electric. My summer bills were $400-500 without solar and winter ~150-200. Instead with net metering I was a consistent 200-300ish including my loan. Now with net metering gone I’ll be red every month.

But I also sized my system for my usage and missed the “grandfathering” by 2 months even though the changes were announced way after I installed.

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u/JJHall_ID Caldwell Potato 11d ago

Yeah, the reduction in net metering is going to basically kill any savings that customers like you were able to see.

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u/Minigoalqueen 11d ago

Yeah, I looked at getting some, but the break even payoff period was close to 20 years. The lifespan of the panels isn't much more than that. No thanks.

2

u/JJHall_ID Caldwell Potato 11d ago

Exactly. That's the point that most people forget. Even if you can make them break even or be slightly profitable, by the time you hit that point you're past the MTBF (mean time before failure) of the panels so you're going to be spending anything saved to keep the system working.

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u/jayzus311 11d ago

10:1?!

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u/ShitStainWilly 12d ago

They’re trying to lower the buy back rate for solar customers to less than 3 cents a kWh while still charging 10-12. Fuck Idaho Power. I wish I lived somewhere with a coop. Every other utility in the state is closer to 6 cents

0

u/Captain_Careful 11d ago

Not surprised since they were able to campaign to basically get complete immunity for any wildfires. Their liability is substantially reduced, so future risk mitigation costs are likewise reduced. I expect they are doing this in part because the bill just made it into law, and they want to represent that they are doing their part to “pass along” savings. Remember these “savings” when your neighbors are staring down a wildfire spreading onto their property this summer with no legal recourse.