Idaho Power says it will appeal the Federal Energy Regulatory Commission’s (FERC) rejection last week of its proposal to the Idaho Public Utilities Commission that would allow it to curtail certain of its existing wind power PPAs in conditions of low network load.
“FERC’s order is contrary to the public interest of the citizens of the State of Idaho, and harmful to Idaho Power’s customers. The order addresses open issues that are before the Idaho Public Utilities Commission for determination. The company is preparing to challenge the order as part of our commitment to providing safe, reliable, and fair-priced electricity and service to our customers,” said Idaho Power spokesman Brad Bowlin, in a statement.
In proposing its “Schedule 74” tariff to the Idaho regulator, Idaho Power contended that Public Utilities Regulatory Policies Act (PURPA) should allow them to halt the otherwise contractually required electricity purchases during periods of light load, such as during the night in the spring and fall. The utility said the requirement to buy from wind farms even during times of light demand forces them to back down other energy generators like coal-fired plants to balance the power system, and that bringing the other systems back up when demand increases costs the utility more – and those costs are passed on to consumers.
During initial technical hearings with the state regulator, commission staffers testified that such curtailment during times of light load is allowable under commission rules and under precedent-setting decisions made in similar cases. Thus, the state’s wind operators, including Idaho Wind Partners 1, fearing an unfavorable decision, appealed to FERC without waiting for the Idaho Commission to rule, saying that such curtailment was possible only in emergency situations. FERC ruled despite state regulator officials argument to FERC officers that the matter simply wasn’t ripe for federal review.
The state Commission is still expected to rule on “Schedule 74” and other matters related to the Public Utilities Regulatory Policies Act (PURPA) some time in October. Randy Lobb, staff director for the Idaho Commission, said it would obviously have to take the FERC decision into consideration. He added “it’s possible that the commission would have rejected Schedule 74 even without the FERC ruling.”
Idaho Power’s Bowlin asserted that the proposed curtailment schedule would only be used in “very limited circumstances”, as the utility’s Load Serving Operations Director Tess Park testified during the technical hearing on the open PURPA case before the IPUC. “And it’s important to note that `curtailment’ doesn’t mean completely shutting off a particular resource; it means limiting the output,” he said.
Regardless, said Lobb, one of the things that was never clear at the technical hearings was just how often curtailment would happen if Schedule 74 were approved. Although at one point Idaho Power said it could be up to a maximum of 5% of hours per year, Lobb acknowledged that was likely a “just a forecast of what could happen if all of its wind farms came online with high production during a low load period.” Any curtailment decision always depends on many factors, he said, adding, however, that cutting back 5% of wind hours per year would be “quite large. It has never been interrupted to that degree to date.”
The utility insists that is has no anti-wind agenda. “It’s important to understand that Idaho Power is not against wind energy. In fact, the first major wind project to come onto our Idaho Power’s system, the Elkhorn Valley Wind Farm, was initiated by Idaho Power. But in the span of a few short years, more than 600 megawatts of wind power has been added to our system. As such, we are well positioned to speak to wind’s attributes and its shortcomings…wind’s erratic nature demands that other resources be in place to ensure the reliability of the power grid. At Idaho Power, we advocate for any and all generation resources that are reliable and fair-priced. Currently, wind power doesn’t meet those criteria,” the company said in a statement issued to REW.com
The Idaho PUC is expected to rule on several other PURPA issues, including PPA contract length, the precision of prices paid for capacity and energy, liquidated damages, and the issues surrounding non-performance. The latter item, Lobb noted, was highlighted in July, when Idaho Power set an all-time system peak load power of approximately 3250 MWh. “Of their 440 MW of wind online, only 14 MW was actually supplying. They’re paying for capacity, but they’re not getting it,” he said.
Indeed, paying too much for renewables was the Idaho Power’s primary argument for curtailment, saying that the non-negotiated rates it is required to employ are as much as $65 per MWh, compared to $5 per MWh for hydroelectric. “One of our problems [with renewable energy] in Idaho is low [energy] prices and lack of need. It means that we can’t continue to add resources indefinitely, and we have added a lot in the last few years,” Lobb said.
|Wind Watch relies entirely
on User Funding