First Wind solar contracts with Idaho Power approved by PUC

First Wind said Jan. 5 that the Idaho Public Utilities Commission has approved Energy Sale Agreements with five proposed First Wind solar projects and Idaho Power.

The contracts are for 20 years and for projects that total 100 MW. The five 20-MW projects are spread across southern Idaho where they will provide energy and economic diversity to Ada, Elmore, Owyhee and Power counties.

“We’re excited to announce these agreements for new solar energy in Idaho,” said Paul Gaynor, CEO of First Wind. “These five projects will deliver clean, renewable solar energy to homes and businesses in Idaho at a cost-competitive price. The new long-term contracts with Idaho Power Company will enable us to move forward quickly and create a source of major economic activity for Idaho through good construction jobs and significant local tax revenues.”

Each project is targeted to be completed by the end of 2016. The five projects combined are expected to generate approximately 250,000 MW hours annually.

First Wind currently operates four solar projects in Massachusetts, and has additional solar projects in development in Hawaii and Utah. In Idaho, First Wind operates the 45-MW Power County Wind project on behalf of a third-party owner.

Idaho commission approved these deals, reluctantly

The Idaho Public Utilities Commission had announced these approvals on Dec. 29. While stating that the projects qualify under federal PURPA provisions, the commission’s order expresses concern that the federal law may be compelling utilities to buy energy they do not need. The order states that utilities should inform the commission as to whether additional review of contract terms and conditions for federal PURPA projects is necessary. PURPA requires regulated utilities to buy energy from independent, renewablegeneration projects at rates established by state commissions.

The rate to be paid small power producers is called an “avoided-cost rate,” because it is based on the cost the utility avoids by not having to generate the energy itself or buy it from another source. The commission must ensure the avoided-cost rate is reasonable for utility customers because 100 percent of the price utilities pay to qualifying small-power producers is included in customer rates.

Congress enacted PURPA in response to a national energy crisis in the late 1970s with a goal to lessen the nation’s dependence on foreign oil. “Unfortunately, PURPA does not address and FERC (Federal Energy Regulatory Commission) regulations do not adequately provide for consideration of whether the utility being forced to purchase QF power is actually in need of such energy,” the commission said.

The First Wind projects include American Falls Solar and American Falls Solar II in Power County, Murphy Flat Power in Owyhee County, Simco Solar in Elmore County and Orchard Ranch Solar in Ada County. The developers will be paid a non-levelized avoided-cost rate over the 20-year term of the agreements, which means payments increase over the course of the agreement and vary according to light-load and heavy-load hours of the day and seasons of the year. The average levelized rate for the First Wind projects is about $63 per megawatt-hour and the value of each of the five 20-year contracts ranges from $60.2m to $68m.

First Wind, which recently entered into an agreement to be acquired by SunEdison and TerraForm Power, is a leading renewable energy company exclusively focused on the development, financing, construction, ownership and operation of utility-scale renewable energy projects in the United States. Based in Boston, First Wind is operating or building renewable energy projects across the country, with combined capacity of nearly 1,300 MW.

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.