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 www.puc.idaho.gov. Click on the electric icon, then on “Open Electric Cases,” and scroll down to Case No. GNR-E-11-03.
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