September 11, 2007
IPC-E-07-04, PAC-E-07-07, PAC-E-07-13, AVU-E-07-02
Contact: Gene Fadness 208-334-0339, 890-2712
Website: www.puc.idaho.gov
PUC allows daily adjustment to prices paid generators
State regulators have granted a request by utilities to
adjust rates paid small-power producers so they more closely match the actual
value of energy at the point of time it is delivered.
The value of energy increases during peak demand times and
decreases during light-load hours, yet utilities maintain they must pay the
same price to the small-power generator during light load hours as it pays when
the energy is delivered during heavy load hours.
In a related matter, the Idaho Public Utilities Commission
denied a request by utilities to place further restrictions on the distance
allowed between wind projects, or other small-power generation projects, which
are owned by the same entity.
Under the federal Public Utility Regulatory Policies Act
of 1978 (PURPA), regulated utilities must buy power from generators of
renewable energy a rate that is published by state utility commissions. That
rate, currently about $62.40 per megawatt-hour, is called the avoided-cost rate
and is typically more attractive than market rates. The rate is to be based on
the cost the utility avoids when it buys from a PURPA project and thus does not
have to generate the power itself or buy it from another source.
Utilities are already allowed a seasonable adjustment to
account for the changing value of energy between the various seasons of the
year. But because the value of energy fluctuates hourly, Idaho Power Company
and Rocky Mountain Power (formerly Utah Power) petitioned the commission for a
daily load shape adjustment, similar to one recently granted Avista Utilities
in northern Idaho. The revision does not change the computation of the
avoided-cost rate but could change the revenues received by small-power
producers depending on the times during the day they deliver their energy.
Idaho Power proposed a daily load shape adjustment of
$11.63, as the weighted difference between light-load hours and heavy-load
hours. However, commission staff proposed and the commission adopted an
adjustment of $7.28. For Rocky Mountain Power, the difference, on average, is
$7.18.
Idaho Power and Avista also asked commission to adopt a rule, similar to one approved in Oregon, which prevents utilities from having to pay the published avoided-cost rate when the same owner/developer has small-power projects located within five miles of each other. Current federal regulations state that projects must be at least one mile apart.
The utilities allege some wind developers build their
projects at or near the size limit to qualify for the published PURPA rate and
then locate another similar-sized project close by and still qualify for the
published rate simply by creating a separate legal entity, although ownership
does not change.
But the commission said the public interest would not be
served by the more restrictive rule. “It is a change that we find would
encourage and might actually promote gamesmanship,” the commission said.
A full
text of the commission’s orders in these cases, along with other documents, are
available on the commission’s Web site at www.puc.idaho.gov.
Click on “File Room” and then on “Electric Cases” and scroll down to any of the
above case numbers.
Interested
parties may petition the commission for reconsideration by no later than Sept.
28. Petitions for reconsideration must set forth specifically why the
petitioner contends that the order is unreasonable, unlawful or erroneous.
Petitions should include a statement of the nature and quantity of evidence the
petitioner will offer if reconsideration is granted.
Petitions
can be delivered to the commission at 472 W. Washington St. in Boise, mailed to
P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.