Idaho Power Tells Commission Its “Over Powered”

Idaho Power is seeking a suspension of the law which requires the utility to purchase power from small “renewable energy” producers. A hearing is set for Wednesday at the Idaho Public Utilities Commission headquarters 9:30 a.m. at 472 W. Washington St. in Boise.

Oversupply of wind power has been a major bone of contention recently due to high water levels in the Columbia Basin and less consumption than previously predicted. Here is the official version from a PUC press release:

The Idaho Public Utilities Commission will hear oral arguments Wednesday on an Idaho Power Company motion to temporarily suspend the utility’s federal PURPA obligation to enter into sales agreements with qualifying small-power producers.

Idaho Power claims the suspension is needed while the commission processes a case (GNR-E-11-03) that addresses how energy from the small projects, called Qualifying Facilities (QFs), should be priced. That case is ongoing with technical hearings scheduled for Aug. 7-9. In the meantime, Idaho Power argues, it may be forced under PURPA to enter into contracts with small-power producers for energy it claims it does not need at prices it claims are too high, unduly inflating customer rates.

Several groups, including Exergy Development Group of Idaho, JR Simplot Company, the Idaho Conservation League and the Snake River Alliance filed comments opposing the suspension. PacifiCorp, doing business as Rocky Mountain Power, supports the motion and asks that the requested suspension also include proposed sales agreements in its eastern Idaho territory.

Oral arguments are scheduled to begin at 9:30 a.m., March 21, in the commission’s room at 472 W. Washington St. in Boise.

The federal Public Utility Regulatory Policies Act (PURPA) requires regulated utilities to buy energy from qualifying small-power generators, such as hydro and wind projects. The rate utilities must pay QFs is called an “avoided cost rate,” and is based on the costs the utility avoids by not having to generate or buy the power itself.

The commission must act quickly, Idaho Power claims, because 27 QFs representing 595 megawatts of capacity are “seriously exploring” sales agreements with Idaho Power. These projects would be in addition to the existing 119 PURPA projects, representing 989 MW of nameplate capacity, already in place. “Without adequate interim relief from its duty to purchase output from QFs at those inaccurate avoided cost rates, Idaho Power’s customers are likely to suffer substantial harm,” Idaho Power stated. The cost of the energy generated by the projects is included in customer rates.

Exergy, a Boise-based wind developer, said Idaho Power’s motion should be denied. Exergy urges the commission to maintain the schedule now in place to process the avoided-cost rate case. Exergy claims Idaho Power failed to cite a federal statute granting the Idaho commission authority to impose a moratorium on Idaho Power’s PURPA obligations under federal law. “That is because no such authority exists,” Exergy claims.

Exergy states that granting the suspension would “in all likelihood destroy the economic viability” of all the projects expected to seek agreements this year. “The listed projects would, if all were built, add about 500 megawatts of new capacity on Idaho Power’s system. Why this is a bad thing is never explained, except for identifying the expense to ratepayers over the lives of these projects and an assertion that if Idaho Power gets its way, the new avoided cost rates will reduce that amount,” Exergy stated.

In an order issued today, the Commission said it wants the parties to the address the following issues during Wednesday’s oral argument:

1) Whether Idaho Power has established a prima facie case for emergency relief from its obligation to purchase QF power;

2) Whether the existing schedule in the GNR-E-11-03 case should be modified to expedite the proceedings and outcome; and

3) What action, if any, should be taken on Idaho Power’s motion for a stay.

In late 2010, the commission lowered the size of wind and solar projects that can qualify for the commission’s published avoided cost rate from 10 megawatts to 100 kilowatts. Wind and solar projects larger than 100 kW can negotiate an avoided-cost rate with the utility based on a commission-approved methodology.

Customers can track the progress of the case on the commission Website at Click on the electric icon, then on “Open Electric Cases,” and scroll down to Case No. GNR-E-11-03.

Comments & Discussion

Comments are closed for this post.

  1. FERC, needs to stop forcing companies like Idaho Power into buying power they do not need at very high cost to their customers. Wind power needs to have a closer look given all the damage/death to birds, waterfowl, and eagles.

    Turbines catch on fire out in the middle of nowhere and no way to keep the fires from spreading. My other issue with wind is money going to China…last report was $400 million to build the turbines and blades.

    Last note…where does the Dynamis fiasco fit into this plea from Idaho Power to the PUC?

  2. Shocking! Most unfortunate that we humans insist on touching the live wire rather than learn about it from those who did so in the past. It saddens me to see so many Americans looking out for only themself. It is a greater sadness that so many more Americans see the problems of selfish leadership and still refuse to use their power to vote the situation into a sensible sollution.

  3. chicago sam
    Mar 20, 2012, 3:04 pm

    Finally Idaho Power is stepping up to the plate and doing what should have been done some time ago. The realization that large companys are gaming the system with little or no benifit for rate payers has finally switched a light bulb on. Simplot among others are also guilty of gaming the system receiving large subsidys for producing “renewable power” while being a large consumer of electricity and receiving lower rates for what they buy. Some attepts have been made in the legislature to give guidence to the PUC (who were practically begging for guidence) but efforts have been futile and stalled in committees. Keeping energy rates low will benefit Idahoans far more than any piddling tax relief that has been proposed

  4. Paul: Pocatello has a wind turbine blade factory paying good wages. If true market based capitalisim is really true, then shouldn’t our rates go down if there is a surplus of power?
    If we have so much power, why aren’t manufacturing companies racing to get here. Oh I forgot, we don’t have a big convention center in Boise.

  5. Ya know, when I read stuff like this I think..what prevents Idaho Power from selling excess electricity to neighboring users at a profit? Is everyone oversupplied?

    Why is “too much” energy at a low cost some horrendous liability? I don’t get it. Obviously.

  6. Dear Dog..

    FERC has mandated power companies take power from alternative sources even when the power from them isn’t needed. Bonneville Power cant’ refuse to take power from wind projects even when the Columbia River is full and spilling over all the hydro projects. They have more wind power than they need to meet minimum demand on their system and a river full of cheap dependable power.

    Idaho Power got tangled up in the Dynamis project and will pay and average of $92.35 per MWH with the same power rates around $27.00/MWH on wholesale market. How is this good for consumers who are forced to underwrite this boondoggle?

    Federal intervention in the free market is not helping the cause here. Alternative sources have to be competitive and they are not and nor will they be for the foreseeable future. Add to this the inability to store electricity efficiently in anything but some kind of battery farm make wind and solar questionable sources of power for anything but a third world country. PURPA rates apply to all alternative energy supplies if I have it right. PURPA rates are based on the costs to build additional sources at about $4-$6 Million/MWH.

    Natural Gas prices are really low and making gas fired plants attractive over coal, nuclear, solar and wind.

  7. Bloomberg Energy Market Price for Electricity.. ELECTRICITY ($/megawatt hour)
    Mid-Columbia, firm on-peak, spot 18.49 -0.17 -0.91% 13:20
    Palo Verde, firm on-peak, spot 24.28 0.34 1.42% 13:20

    On a KWH basis the cost is about 2.5 cents per KWH.

  8. chicago sam
    Mar 21, 2012, 7:06 pm

    buying @92.35/mwh and selling surplus @25/mwh brilliant
    Sounds like my stock market picks

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