The Idaho Public Utilities Commission has temporarily lowered the maximum size of wind and solar plants that qualify under federal law for a program that requires power companies to buy their electricity at favorable rates.
Q: Why did this happen?
A: The move came at the request of Idaho Power Co., Spokane-based Avista Corp. and PacifiCorp’s Utah-based Rocky Mountain Power.
These utilities contend sophisticated, well-financed developers such as General Electric Co. are breaking up their large wind farms into small, 10-megawatt projects so they can qualify for the better prices. The utilities say the big developers essentially are gaming a system originally designed to help small, independent power producers.
Q: Does this affect ordinary electricity customers?
A: Yes. Idaho Power said it has been overwhelmed by these fragmented projects and says they are contributing to higher costs for its customers. The utility also estimates it could have 1,100 megawatts of wind power on its system within just a few years – more than it needs during low-usage days.
Q: What wind power are they talking about?
A: Here’s one big example: GE has just installed 122 wind turbines producing a maximum of 183 megawatts of power in southern Idaho. GE says the nearly $500 million project produces enough electricity to power 39,700 average Idaho homes. The turbines can be operated as a system. But because the project has been broken into 11 different sites, Idaho Power must buy the power at the mandated rates.
The new decision means qualifying wind and solar projects can now produce no more than 100 kilowatts – at least until the PUC can address the strain these projects place on the transmission systems of the utilities.
Q: How will this affect wind-power developers?
A: They say the decision will bring their job-creating projects to a standstill.
“We believe the commission based its conclusions on a flawed interpretation of its own procedure and a faulty reading of Federal Energy Regulatory Commission policy,” said Robert Kahn, executive director of the Northwest and Intermountain Power Producers Coalition, which represents these companies.
The ruling will affect at least 18 projects proposed by four companies, including the wind-energy business of Dutch energy giant Shell.
Builders are developing more than 6,500 megawatts of power capacity in Idaho, Oregon and Washington.
Q: Why is there a law regulating wind-power prices?
A: In the late 1970s, Congress passed the Public Utilities Regulatory Policy Act. It requires utilities to buy electricity from small power producers at special rates that are based on the cost the utilities could avoid if they have to generate the power themselves.
That amount is determined in Idaho by the PUC and is potentially more attractive than prices that wind or solar companies could independently negotiate with the utilities.
Q: Are other alternative-energy projects affected?
A: Only wind and solar projects are affected. The PUC will continue to allow biomass, geothermal and small hydroelectric projects to get the rate authorized by the federal law.
And Idaho Power says wind companies still can negotiate on rates for projects exceeding 100 kilowatts.
Q: Have wind developers really gamed the system?
A: The commission said the utilities have made a convincing case to temporarily reduce the eligibility cap for wind and solar projects until these issues can be resolved.
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