Idaho Power seeks changes to contracts that it says will save its customers money 

TWIN FALLS • On Monday, Idaho Power Co. requested approval to stop buying power from projects eligible for certain small-scale federally mandated contracts.

The request is part of the utility company’s attempt to improve the Idaho Public Utilities Commission pricing method for the reduced rate contracts. Idaho Power wants to change several key elements of how such contracts are priced. Meanwhile, company representatives argue that they need an agreement “pause” because they are racking up higher rates for their customers.

So What is This?

Idaho Power is required to purchase power from energy projects that are eligible under the federal Public Utilities Regulatory Policies Act. It’s a rule that’s been around since the 1970s, but with the help of tax incentives, Idaho Power says it’s been flooded with requests for PURPA contracts over the past few years.

Specifically, it’s seen a rush on wind production. The company has courted some wind projects in the past, but views it as an unreliable energy source in such quantities since it mostly blows at times when the company needs the energy the least, said Mark Stokes, Idaho Power’s power supply planning manager.

The company thought PURPA requests would dwindle after the PUC tightened a cap on which projects are eligible in 2010. But that hasn’t happened.

“We’re still seeing a flood of contract requests,” Stokes said. “We’re trying to prevent our customer rates from getting any worse. Hopefully we can get all the pricing situations worked out.”

What Idaho Power Wants:

The company seeks several changes, all of which it argues will keep rates from rising. One would shorten PURPA contracts from lasting 20 years to five.

“Twenty years puts all the risk on our customers,” Stokes said. “Our customers still have to pay that higher PURPA rate even if the rate could be lower.”

Another change would be setting a stricter schedule on when a contract is legally enforceable. And, the company wants to base all PURPA pricing – not just wind – more on the company’s need for the energy.

What the Wind Developers Think:

Not surprisingly, Brian Jackson, president of American Wind Group, says this is an attack on wind energy.

Jackson’s company is currently pursuing legal action against the state for improperly limiting two power contracts in Cassia County.

He’s optimistic Idaho Power’s proposed contract changes won’t affect his company’s lawsuit if passed, but says it’ll have an impact on the industry.

“In the end, the PUC needs to look at what makes sense and not decide on something at the expense of one party,” he said.

The purpose of PURPA was to diversify energy production and ownership, Jackson said. With a federal backing, wind energy developers can go up against the larger utility companies.

And while he understands that wind energy is currently booming, he says that preparing for low load growth isn’t the right attitude.

“In a national and global energy crisis, I say we need to be doing more,” Jackson said. “I think it’s a unique time that the state could take advantage.”