FOR IMMEDIATE RELEASE
Idaho Public
Utilities Commission
March 2,
2011
Case Nos.
IPC-E-10-56, -57, -58, Order No. 32189
Contact:
Gene Fadness (208) 334-0339, 890-2712
Sales agreements with three Murphy area wind
projects submitted
Comments are
being accepted through March 17 on an Idaho Power Company application for state
regulators to accept or reject sales agreements with three wind projects in the
Murphy area.
The developer
of the projects, Brian Jackson of American Wind Group, LLC, seeks a 20-year
agreement for each project with a targeted operation date of Dec. 31, 2012. The
agreements state that each project would deliver up to 10 average megawatts
monthly to Idaho Power and that the developers would be paid by Idaho Power at
a rate that is published by the Idaho Public Utilities Commission.
However, the
applications for the projects were submitted to the commission after the Dec.
14, 2010, effective date of a commission order that reduced the eligibility cap
on the size of wind and solar projects that can qualify for the commission’s
published rate from 10-megawatts to 100 kilowatts.
The
temporary reduction in the eligibility cap came after Idaho’s three major
investor-owned electric utilities said the rapid development of large wind projects
that are broken up into smaller 10-MW projects in order to qualify for the published
rate is circumventing utility planning process and creating system reliability
and operational issues. Idaho Power further claims that the “continuing and
unchecked requirement” for the utility to acquire additional intermittent
generation regardless of its need for additional energy “increases the price
its customers must pay for their energy needs.”
Despite
those concerns, Idaho Power states it is complying with its federal mandate under
the Public Utility Regulatory Policies Act (PURPA) to accept power generated
from qualifying renewable facilities. (The
commission’s reduction in the eligibility cap does not waive regulated
utilities’ PURPA requirement to buy energy from wind and solar projects up to
80 MW, but the rate paid to the projects between 100 kW and 80 MW is negotiated
between the utility and the developer using the published rate as a starting
point for negotiation. For now, projects
under 100 kW qualify for the posted rate.)
PURPA was
passed by Congress in 1978 to encourage development of renewable energy
technologies as alternatives to burning fossil fuels or building new power
plants. The act requires that electric utilities offer to buy power produced
from qualifying small-power producers at rates determined by the states. The
rate to be paid small-power developers, called an avoided-cost rate, is to be
equal to the cost the utility avoids if it would have had to generate the power
itself or purchase 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
producers is included in customer rates.
The rate
proposed for the projects is a non-levelized rate
that increases through the life of the contract. In 2013, the agreement’s
proposed rate for normal load hours during normal seasons of the year is $61.93
per megawatt-hour, escalating to $125.89 per MWh in
2033. The rate varies to account for heavy and light load hours of the day and
heavy and light load seasons of the year.
To address
some of Idaho Power’s concerns, the agreements state that Idaho Power can
curtail generation from the projects without compensation to the developer
under certain conditions. Those conditions include times when generation on
Idaho Power’s total system approaches minimum levels needed to serve customers
and further acceptance of the wind would have a detrimental effect on the utility’s
ability to simultaneously manage the generation also coming from thermal, hydro
and other resources.
The
agreement also states that it is up to the wind developer to work with Idaho
Power’s business delivery unit to ensure that interconnection facilities and
transmission upgrades are completed in time to meet the projects’ scheduled
operation date. If the projects fail to meet their delivery dates, delay
damages will be assessed.
Comments are
accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on
"Comments & Questions About a Case." Fill in the case numbers
(IPC-E-10-56, -57 or -58) and enter your comments. Comments can also be mailed
to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.
A full text
of the commission’s orders, along with other documents related to these cases,
is available on the commission’s Web site. Click on “File Room” and then on
“Electric Cases” and scroll down to any of the above case numbers.