June 14, 2011

Does a PUC decision signal end of Idaho wind industry?

By Rocky Barker, Idaho Statesman, www.idahostatesman.com 14 June 2011

Promoters say a PUC decision to kill access to favorable power rates will strangle the billion-dollar sector.
The three-member Idaho Public Utilities Commission handed the state’s three investor-owned utilities a victory when they made permanent a lower cap on what projects qualify for a federal law designed to encourage small, sustainable power projects.

But the real effect will be on one of the fastest-growing industries in the state – at least according to the people pushing the expansion of wind resources.

“It means there won’t be any more wind projects in Idaho,” said Peter Richardson, who represents the Northwest and Intermountain Power Producers Coalition, which includes renewable energy developers.

The PUC kept a 100-kilowatt cap for wind and solar projects eligible for a favorable rate under the Public Utility Regulatory Policies Act – known as PURPA – which passed Congress in 1978.

Other renewable projects can be as large as 10 megawatts to qualify for the rate.

The PUC agreed with Idaho Power, Rocky Mountain Power and Avista that there was no practical way to stop large-scale wind operations – like a massive GE partnership in southern Idaho – from bending the rules by forming lots of smaller wind farms that qualified for the published rate when they should all be considered one big project.

Now wind and solar companies must cut a deal with companies wary of intermittent power sources – and that “makes it very hard for wind projects to get an attractive rate,” said Ben Otto, an energy specialist with the Idaho Conservation League. “It’s a debate about short term versus long term.”

Locking in a renewable rate for 20 years ultimately could have the same cost as building a new natural gas plant.

“What (Idaho Power) is saying is the market for gas prices is going to be low in 20 years,” Otto said. “I don’t know how they can say that.”

Wind turbine construction wouldn’t stop immediately. Idaho Power still has more than 400 megawatts of approved contracts with developers who have yet to build their plants.

This was the second blow this year for the industry.

The Legislature let lapse a sale tax exemption for renewable energy even after developers argued that the loss of the exemption would make it hard to get financing for their projects.

Idaho Power said it will still negotiate with developers, but the company also says it would be a challenge to integrate any additional wind power, said Donovan Walker, an attorney who argued before the PUC.

“There will be large increases in rates just because of the addition of PURPA (projects) and wind on the system,” Walker said.

“Everything we’ve been doing is to stand up for our customers so they don’t spend more than they have to,” added Mark Stokes, Idaho Power’s power supply planning manager.

URL to article:  https://www.wind-watch.org/news/2011/06/14/does-a-puc-decision-signal-end-of-idaho-wind-industry/