Company seeks suspension of PURPA purchases

On March 12, Idaho Power asked the Idaho Public Utilities Commission (IPUC) to suspend the company’s obligation to purchase power in Idaho under the Public Utility Regulatory Policies Act, or PURPA, during the commission’s ongoing investigation which includes how pricing for that energy is calculated; the duration of customers’ obligation to buy the energy and aspects of reliability.

The requested pause, or “stay,” is necessary to protect Idaho Power customers and avoid other negative consequences during the months-long duration of this case.

There are 27 qualifying facilities (QF) projects seriously exploring firm energy sales agreements (FESA) with Idaho Power. These projects represent 595 megawatts (MW) nameplate capacity of generation in addition to the existing 989 MW nameplate of Idaho Power’s current 119 commission-approved QF power purchase agreements. These additional projects would require customers to pay an additional $2.7 billion over the company’s existing contractual obligation of more than $3.6 billion.

“The large increase in QF projects on-line and under contract since 2004 is expected to increase the power supply expense passed on to customers through Idaho Power’s annual Power Cost Adjustment from approximately $40 million in 2004 to approximately $60 million in 2009, and will increase to more than $120 million in 2012,” said Power Supply Planning Manager Mark Stokes. “We believe it is of vital importance to the interests of our customers to stem the tide of projects while the commission completes its thorough investigation into this issue—a problem clearly in need of a fix.”

Over the last several years, Idaho Power has received, and continues to receive, inquiries from developers with ideas for a proposed QF project. It is likely that even more developers will contact Idaho Power seeking FESAs before the end of phase III of the case before the commission (GNR-E-11-03), which will likely not conclude until late summer or early fall 2012.

Idaho Power has no Idaho PURPA contracts that are due to expire in 2012. An IPUC order suspending Idaho Power’s purchase obligation in the state for the duration of its investigation will not impact existing Idaho contracts with Idaho Power.