Idaho agrees to lower costs for solar developers connecting with Idaho Power

The Idaho Public Utilities Commission said Aug. 12 that it has adopted new integration rates that will reduce costs for new solar developers seeking to integrate their generation into Idaho Power transmission and distribution system.

The solar integration charge paid by developers applies only to larger solar projects that enter into contracts with Idaho Power. It does not apply to smaller projects, such as residential and commercial rooftop solar.

The Idaho PUC made the change in connection with Case No. IPC-E-16-11.

Electric utilities incur costs based on the amount of solar generation added to their distribution and transmission system. Part of those integration costs are incurred when utilities need to provide back-up generation if solar output is less than anticipated.

In February 2015, the commission approved a settlement that adopted solar integration costs developers pay the Idacorp (NYSE:IDA)-owned utility based on a 2014 study completed by the utility. However, the parties to that settlement did not agree on the tariffs recommended by the study.

As part of the settlement, Idaho Power agreed to conduct a second study using a Technical Review Committee comprised of staff from the Idaho and Oregon public utility commissions, Idaho Power, and a technical expert designated by each of the parties to the settlement, which also included the Sierra Club, Idaho Conservation League and the Snake River Alliance.

The integration costs now approved by the Idaho PUC incorporate the results of the second study, which includes an updated tariff for each 100 MW of solar generation up to 1,600 MW. (Idaho Power currently has 40 MW of solar generation online and another 290 MW under contract to be online by the end of this year).

At a total solar penetration of between 301 and 400 MW, the integration tariff to solar developers is 54 cents per megawatt-hour for a non-levelized contract signed this year. That compares to $2.63 per MWh using the 2014 study. Between 401 and 500 MW of penetration, the new tariff is 71 cents per MWh compared to the 2014 tariff of $3.31.

The commission said the integration tariff should be updated frequently to account for changes that could be affected by:

  • The potential impact of Idaho Power joining the Western Energy Imbalance Market;
  • Transmission changes, such as completion of the Boardman to Hemingway transmission line;
  • Resource changes or additions, including generation received through customer participation in demand response programs;
  • Energy storage;
  • The combined effects of new solar and new wind;
  • Changes in gas/fuel prices;
  • The effects of distributed generation and community solar projects as they develop.
About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.