Idaho Power asks for suspension of solar purchase obligations

Idaho Power on May 13, dealing with a flood of solar project proposals, asked the Idaho Public Utilities Commission for a timeout on processing those applications.

The utility asked the commission to immediately issue an order temporarily suspending Idaho Power’s obligation under the 1978 Public Utility Regulatory Policies Act and various commission orders, to enter into contracts and/or obligations to purchase energy generated by solar-powered small power production Qualifying Facilities (QFs).

Alternatively, Idaho Power seeks an immediate order from the commission determining that any solar PURPA contracts or obligations entered into with Idaho Power contain an appropriate solar integration charge.

Idaho Power’s request for a temporary suspension is limited to contracts/obligations for purchases of energy from solar-powered QFs. The suspension would not affect contracts with QFs utilizing other generating technologies.

“Idaho Power requests that this temporary suspension remain in effect for a period of time sufficient to allow completion of Idaho Power’s current solar integration cost study and to include the results thereof into the purchase agreements with solar QFs,” the request said. “Idaho Power currently has 501 megawatts (‘MW’) of solar QFs that have recently signed contracts, received draft contracts, received indicative incremental Integrated Resource Plan (‘lRP’) cost pricing calculations, or otherwise made serious inquiries about selling their generation to Idaho Power and/or obligating Idaho Power and customers to such purchases pursuant to PURPA. The temporary suspension is necessary to prevent great and irreparable harm to Idaho Power’s customers that will result from entering into purchase agreements/obligations with solar QFs without the inclusion of solar integration costs. Numerous solar QFs are seeking purchase agreements/obligations with Idaho Power prior to completion of the current on-going solar integration study anticipated for June of this year.”

Of this 501 MW, 15 projects for 341 MW are located within Idaho with the remaining 16 projects for 160 MW being in Oregon.

At current avoided cost rates applicable in each jurisdiction, this 501 MW represents a cost of about $1.89bn to Idaho Power customers over the life of those contracts. Although the solar integration study has not yet identified a cost, the potential integration costs associated with the 501 MW of solar could be approximately $146m. The proposed solar QF projects represent two thirds of all of Idaho Power’s existing PURPA QF contract costs/obligations incurred to date. They also constitute an increase in the total nameplate rating of Idaho Power’s QF projects from 883 MW to nearly 1,400 MW. Idaho Power’s minimum load on its entire system for 2013 was 1,005 MW.

In Oregon, one developer has proposed a total of 16 different solar QF projects, all at 10 MW each in order to obtain Oregon standard contract rates, the utility noted. Of these 160 MW of proposed projects in Oregon, Idaho Power has recently executed six contracts at 10 MW of nameplate capacity each, none of which contain solar integration costs.

In its Idaho jurisdiction, the utility said it has 341 MW of inquiries from six developers representing 15 different solar QF projects. Idaho Power has provided indicative incremental cost IRP pricing to six separate solar QF projects, consisting of five 20 MW projects and one 40 MW project for a total of 140 MW. Four of these projects have requested and received draft contracts from Idaho Power and are in active discussions/negotiations about contract terms and conditions. One developer is seeking contracts for a 40 MW and two 20 MW solar QF projects to be located on land under the control of three large Idaho municipalities.

The commission has in the past authorized a temporary suspension of the PURPA purchase obligation, Idaho Power argued. The commission, on its own motion, imposed a one-year moratorium on purchases from QFs located within the service areas of non-investor-owned utilities that purchase energy from the Bonneville Power Administration. That moratorium was eventually lifted and ldaho Power said it continues to be the purchaser of considerable amounts of energy from QF projects located in the service areas of Idaho municipalities and co-ops.

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.