Idaho Power works out deals with Pacific Northwest Solar on six projects

On Sept. 22, the Oregon Public Utility Commission officially closed the docket on a May 6 complaint from Pacific Northwest Solar LLC (PNW) against Idaho Power over several solar power projects.

PNW had asked that Idaho Power be ordered comply the its already-existing legal obligations to adhere to the timelines and other requirements of Oregon Schedule 85 for standard Energy Sales Agreements (ESA). After PNW submitted its applications for ESAs to Idaho Power, it said it was informed by a representative of Idaho Power that no further action would be taken on its applications becuase Idaho Power had filed a request with the Oregon commission for a stay of its obligations under Schedule 85. The commission at that point had not issued the requested stay.

PNW said its proposed projects are all protected by PURPA and existing regulations promulgated by the commission because the facilities, once constructed, would generate at or below 10 MW (ac) of power which will be supplied to Idaho Power (i.e., they are qualifying facilities). The proposed projects are: Arcadia Solar, Butler Solar, Evergreen Solar, Jamieson Solar, John Day Solar, Kingman Solar, Lagoon Solar, Little Valley Solar and Moores Hollow Solar.

On Sept. 21, PNW and Idaho Power jointly asked the commission to dismiss the complaint, saying: “Since PNW filed its Complaint, the Parties have entered into discussions wherein they have negotiated terms and conditions under which PNW will sell and Idaho Power will purchase the output of the projects named in the Complaint. PNW ultimately decided not to go forward with three of the nine projects for business reasons, and the Parties have entered into fully executed Energy Sales Agreements for the remaining six. All six of the projects are over the 3 MW interim cap adopted by the Commission in UM 1725, and therefore the negotiated prices were calculated using Idaho Power’s Integrated Resource Planning (IRP) methodology. The term of each contract is 20 years. The executed Energy Sales Agreements will be filed with the Commission in Docket No. RE 141.”

In its May 26 response to the PNW complaint, Idaho Power said about its reasons for not wanting to sign these contracts: “Recent events in Idaho Power’s Oregon service territory reveal both a widening gap between Idaho Power’s actual avoided costs and current QF prices, and an increasingly high volume of requests for long-term QF contracts in Oregon. As detailed in Idaho Power’s Motion to Stay, and accompanying applications including the May 1, 2015, annual avoided cost update, the Company’s standard avoided costs are overstated by an average of $12-$38/MWh. The Company currently purchases power from 6 operational QF projects in its Oregon service territory; there are 11 new QF projects under contract but not yet operational, and another 16 to 28 projects proposed. If all of these projects become operational, it will increase Idaho Power’s must-buy obligation from 21 MW to almost 400 MW. Even assuming that only half of these projects come online, it would represent nearly a 10-fold increase in the Company’s must-buy obligation in the Oregon jurisdiction. Idaho Power currently has a penetration level of 320 MW of solar QFs under contract. Solar integration costs are $3.12/MWh for penetration levels at 400 MW, and escalate to over $18/MWh for penetration levels over 1,400 MW.”

Notable is that the commission docket shows that a largely identical complaint filed May 18 by Gardner Capital Solar Development LLC against Idaho Power is still pending. That complaint drew a June 8 response from Idaho Power that is basically the same as the one in the PNW case.

The Gardner complaint is over Idaho Power’s failure to comply with Oregon Schedule 85 and provide standard Energy Sales Agreements with current long-term standard avoided cost prices after Gardner Solar submitted six separate applications for ESAs for Qualifying Facilities that it is developing in Oregon. Gardner Solar’s six QF projects and the date on which they submitted complete Schedule 85 applications are: Olds Ferry Solar (April 7, 2015); Owyhee Solar (April 7, 2015); Malheur River Solar (April 7, 2015); Cooper Solar (April 7, 2015); Fourth Ave Solar (April 7, 2015); and Fairway Solar (May 6, 2015).

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.