Parties support PacifiCorp deal to buy power from Utah solar project

Utah Red Hills Renewable Park LLC on Feb. 7 urged the Utah Public Service Commission to approve a power purchase agreement (PPA) between PacifiCorp d/b/a Rocky Mountain Power and Red Hills.

Red Hills said it has been in the process of developing a solar-powered generation project in Iron County, Utah, since 2007. Red Hills has expended significant resources on project-development activities by, among other things, participating in proceedings before this commission. In December 2013, Rocky Mountain Power submitted an application for commission approval of the PPA.

Red Hills and Rocky Mountain Power have negotiated a PPA for the purchase and sale of electric power from the Red Hills Project. Red Hills also has two interconnection queue positions for delivering power to Rocky Mountain Power’s transmission system.

With respect to interconnection, Red Hills has two queue positions with Rocky Mountain Power for 40 MW (ac) each (queue #324 and #525). Red Hills anticipates combining both queue positions into its existing interconnection agreement, if possible, and expects to finalize its interconnection agreement or agreements within the next several weeks.

Environmental group Utah Clean Energy filed Feb. 7 comments with the commission in support of this deal, saying: “A 20-year PPA for electricity from solar resource at avoided cost pricing represents a resource that will provide significant benefits to Utah ratepayers both in terms of economics and risk mitigation over the long term. A long term, flat rate power purchase agreement with a fuel-free resource, like a solar qualifying facility (‘QF’), insulates ratepayers from risks associated with fuel price volatility. Fuel-free renewable resources are unique among electricity generation resources in that the utility can lock in long-term rates for 20 years or more. Rates for electricity from a solar QF will not increase for the next 20 years. In the meantime, gas prices will continue to fluctuate and rise over the same 20-year period.”

In addition to mitigating fuel price risk, a solar QF like this one will reduce ratepayers’ vulnerabilities to emissions-related regulations and externality costs, the group added. “Carbon regulation, for example, will likely start impacting Utah’s energy resource mix within a few years. Bringing renewable resources online in Utah will reduce the state’s exposure to compliance costs associated with new carbon regulations,” it said.

The state Office of Consumer Services said in Feb. 7 testimony that it generally supports this PPA, though some additional information is needed from the parties. One issue is that the project is only due on-line about three years after the PPA was signed, it added. “While the Office has some concerns about the Red Hills PPA being signed so far in advance of the Scheduled Commercial Operation Date, our review indicates that the PPA is in compliance with the applicable schedules and Commission orders,” it said. “Therefore, the Office does not oppose the approval of the Red Hills PPA.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.