Idaho PUC to take combined look at glut of QF projects in the state

The Idaho Public Utilities Commission said March 19 that it will conduct both technical and public hearings in late June to consider requests by three electric utilities to reduce the duration of sales agreements they must enter into with large renewable energy developers.

The Idaho commission on Feb. 5 granted an Idaho Power request to reduce the duration of sales agreements with solar and wind PURPA projects that are larger than 100 kiW and other PURPA projects – such as geothermal, industrial cogeneration and hydro – that generate more than 10 average megawatts. Idaho Power originally sought to reduce the contract length from 20 years to two years. The commission approved five-year contract lengths while it further examines the case. Since that decision, Avista Utilities  and PacifiCorp d/b/a Rocky Mountain Power have requested similar treatment.

The federal Public Utility Regulatory Policies Act of 1978 (PURPA) requires regulated utilities to buy energy from qualifying renewable generation projects at rates established by state commissions. The rate to be paid Qualifying Facilities (QFs) 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 because the price utilities pay to QF developers is passed on to its customers. While PURPA requires utilities to buy from QFs, the law leaves it up to states to determine avoided-cost rates and other contract terms and conditions.

The commission noted that it is also considering a petition for clarification filed by Clearwater Paper and Simplot asking that the five-year contract limit apply only to intermittent wind and solar projects larger than 100 KW and not other PURPA projects such as industrial cogeneration. They argue that the increase in QF projects is limited to solar and wind, thus there is no need to reduce contract lengths for other resource types. Clearwater and Simplot have until March 26 to reply to responses to their request.

  • Idaho Power claimed that a glut of solar projects will drive up rates and threaten the utility’s ability to reliably deliver energy. The commission recently approved 13 Idaho Power agreements with QF developers for 400 MW of solar. Idaho Power claims it has an additional 885 MW of QF solar capacity in its queue actively seeking energy-sale agreements with 2016 on-line dates. Idaho Power said continued creation of 20-year contracts places undue risk on customers at a time when the utility says it has sufficient resources to meet customer demand.
  • Within five days of the Feb. 5 commission order that reduced the length of Idaho Power’s contracts, PacifiCorp on March 2 said in an application for relief filed with the the commission that it received four pricing requests totaling 130 MW from QF developers situated in Idaho Power’s service territory but seeking to wheel their output into Rocky Mountain Power’s territory. PacifiCorp claimed project developers are seeking the agreements “in order to secure a more favorable 20-year contract with PacifiCorp.” PacifiCorp now has projects seeking contracts totaling 275.5 MW in its Idaho territory. PacifiCorp has 189.6 MW of existing Idaho PURPA contracts – for a total of 465 MW of existing and proposed PURPA generation, enough power to supply 108% of PacifiCorp’s average Idaho retail load. While the commission adopted a temporary five-year contract limit while it processes the case, PacifiCorp is asking that the commission enact a permanent three-year limit.
  • While Avista Utilities does not claim a number of QF projects seeking contracts, the utility expressed concern that “PURPA developers that previously planned to sell the output from their projects to Idaho Power may seek to sell such output to Avista.”

The commission has consolidated all three utility dockets into one proceeding that includes an April 23 deadline for direct testimony from the utilities, commission staff and all other intervenors. Rebuttal from all non-utility parties is due May 14 with utilities submitting their rebuttal by no later than June 11. A technical hearing will begin on June 29 in the commission hearing room in Boise. That hearing will continue, if necessary, through July 1. 

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.