Idaho Public Utilities Commission

Case No. IPC-E-10-16, -17, -18

July 6, 2010

Contact: Gene Fadness (208) 334-0339, 890-2712

Idaho Power agreements with anaerobic digester projects OK’d

The Idaho Public Utilities Commission has approved Idaho Power Company requests to enter into power sales agreements with the developer of three Magic Valley anaerobic digester power projects.

The 15-year contracts are all with a Middleton-based developer. Two of the projects are in Twin Falls County. They are the 4-megawatt Rock Creek Dairy project near Filer and the 2-megawatt Swager Farms Dairy project near Buhl. The 2-megawatt Double B Dairy project is near Murtaugh in Cassia County.

All three projects are qualifying facilities under the provisions of PURPA, the federal Public Utility Regulatory Policies Act of 1978. PURPA requires electric utilities to offer to buy power produced by qualifying small power producers or cogenerators. The rate to be paid PURPA project developers, called an “avoided cost rate,” is determined and published by state commissions. The avoided cost rate is to be equal to the cost the electric utility avoids if it would have had to generate the power itself or purchase it from another source.

All three of the projects contain purchase rates that on the May 24 date of their contract signing had been replaced by lower rates approved by the commission on March 16. However, the commission determined that the projects were entitled to be grandfathered and paid the older, higher rates in place before March 16. An internal review process by Idaho Power delayed contract signing until May 24 even though all the contract issues had been resolved before March 16.

For all three projects, the rate in the first year is $75.65 per megawatt-hour. The rate gradually increases over the 15 years of the contracts to $128.31 per MWh. That rate is adjusted for heavy- and light-load seasons as well as heavy- and light-load hours. The Rock Creek Dairy project intends to deliver 1,296 megawatt-hours per month, while the Swager Farms and Double B project are anticipating an output of 648 MWh per month.

Anaerobic digestion is a biological process that produces a gas principally composed of methane and carbon dioxide otherwise known as biogas. These gases, produced from organic wastes such as livestock manure and food processing waste, are converted into electric energy.

The commission’s final orders, as well as documents related to these cases, are available on the commission’s Web site at www.puc.idaho.gov. Click on the electric icon, then on "Open Electric Cases” and scroll down to cases IPC-E-10-16, -17 and -18.