Record low natural gas prices, a regional power surplus and a glut of wind energy that Idaho Power was forced to buy makes changing Idaho’s system for allowing renewable energy projects critical to protect customers, utility executives said Tuesday.
But attorneys for energy developers, irrigation companies, JR Simplot Co. and Clearwater Paper said the power company’s proposal goes beyond protecting customers. They worry Idaho Power’s plan will strangle development of small hydroelectric, solar, biofuel and other projects and take credits those developers view as private – and valuable – property.
The back and forth came on the first of three days of hearings before the Idaho Public Utilities Commission, the agency that regulates the state’s monopoly utilities.
Energy developers contend that if regulators side with utilities, it will spell the demise of most independent energy projects breathed into life by a 1978 law known as Public Utility Regulatory Policies Act, or PURPA, that requires regulated utilities to buy their electricity.
Idaho Power, backed by Avista Corp. and Rocky Mountain Power, renewed arguments that it is paying wind developers too much money for federally mandated contracts that the utilities brand as unreliable. Wind might not blow during hot afternoons when farmers are irrigating and homeowners are turning on their air, forcing the utility to fire up other resources, such as its $427 million natural gas plant near New Plymouth.
The day was dominated by tough cross examination of utility executives, especially by Peter Richardson, an attorney representing energy developers and other Idaho companies and groups that sell power.
Richardson questioned the basis for Idaho Power’s proposal that would dramatically lower the PURPA price paid for power.
He said the proposals to reduce contracts from 20 years to five and to shift ownership of renewable energy credits are designed to keep developers out of the power market, thereby leaving more development for Idaho Power to benefit its stockholders.
Lisa Grow, senior vice president for power supply, denied those assertions.
“This doesn’t have anything to do with the shareholders, because 100 percent of the cost of PURPA is passed on to the customers,” Grow said.
She said Idaho Power doesn’t want ownership of renewable energy credits to make more money for stockholders, but said the RECS should belong to customers, she said.
Tom Arkoosh, a Gooding attorney who represents two of the state’s largest canal companies, asked Mark Stokes, Idaho Power planning manager, about the contract proposal.
He questioned whether five years was long enough to pay back a project’s cost and whether that would make it impossible for developers to get financing.
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