One Idaho wind company has a plan to get more green for each gust.
Idaho Winds LLC, representing eight local wind farms, has petitioned the Federal Energy Regulatory Commission to approve its unconventional plan to sell renewable energy credits in California.
In its Dec. 15 request, Idaho Winds proposed to sell wind energy and related renewable energy credits to a third party. The catch was Idaho Winds would instantly buy the power back, leaving just the credits, which the third party would sell to a California utility.
In essence, no energy would be sold – just California credits for wind power sold in another state.
The shell game is driven partly by California energy policy and partly by Idaho regulations.
California, along with most Western states, has a law requiring that renewable sources provide a certain percentage of the state’s energy needs. With every unit of renewable energy it buys or produces, a utility receives a renewable energy credit. At least 20 percent of California’s energy needed to come from renewable sources this year, with that percentage jumping to a full third by 2020.
As it stands, California utilities buy the energy and energy credits together. But after the initial purchase, the credits can be “unbundled” from the energy so utilities can just buy the credit. That’s the loophole Idaho Winds hopes to use.
Idaho Winds can’t sell the credits in Idaho because the state doesn’t have such a law, so its utilities don’t need credits.
Part of the reason for the petition was to ensure that, if the plan is approved, Idaho Winds will still qualify for small-project energy rates under the U.S. Public Utility Regulatory Policies Act. It received approval for such rates from the Idaho Public Utilities Commission the same day it petitioned FERC.
FERC spokeswoman Barbara Connors said the petition may be a unique idea. Both state renewable standards and the renewable energy industry are just getting going, so very little has been tried.
“Basically, they’re saying to us, ‘This is how we read things and do you see it the same way?’” Connors said. “If this had happened before, they probably wouldn’t be asking us.”
If the petition is approved, it opens the door for other renewable energy producers in Idaho to follow suit.
Connors said one California utility has already intervened in the petition, an option allowed until Jan. 14. Pacific Gas and Electric Co. says it would be affected by the proposal.
However, Idaho Winds’ petition may be unnecessary. The California Public Utilities Commission is reconsidering the bundling requirement after its latest rules pertaining to credits were challenged. Spokesman Andrew Koch said the CPUC plans to meet Jan. 13 to vote on a revision that allows for bundled contracts and credit-only contracts.
“We’re going to see if we can refine the whole process,” Koch said. “This may open up a different avenue.”
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