Renewable energy advocates praised Tuesday’s wide-ranging order by the Idaho Public Utilities Commission, which will guide future development.
The three-member commission that regulates the state’s three monopoly electric utilities denied Idaho Power’s request to curtail existing wind power plants during low demand except in emergencies, a proposal that developers said could threaten their viability. But it also limited the size of wind and solar plants eligible for a simple published power price to only 100 kilowatts, forcing larger developers to negotiate with utilities on rates and credits.
Any new power-generation source will cost ratepayers more money. But the commission said these new rules will ensure that renewable energy projects don’t cost more than natural gas plants that Idaho Power would build otherwise.
“With the changes adopted … we believe that (renewable energy) development can continue to thrive in a way that holds ratepayers harmless,” commissioners wrote in their order.
Idaho Power has argued that renewal energy development will cause higher rates for customers.
Small hydroelectric, geothermal, biomass and other projects up to 10 megawatts will be eligible for the “published avoided cost rate,” which is based on the price the utilities would pay to build and operate a natural gas plant. The utilities are mandated to buy the power by the federal Public Utility Regulatory Policies Act.
That simple rate will now be set annually to ensure it is accurate and fair, the commission said.
The commission ruled that renewable energy credits (RECs) worth millions of dollars should either go to the energy developer or be split with the utility, depending on the contract. It also ruled against Idaho Power and kept contracts at 20 years instead of five.
“It’s going to be tough on the wind guys, but for all kinds of clean energy it’s probably going to be better,” said Ben Otto, an energy attorney for the Idaho Conservation League.
Idaho Power, backed by Avista Corp. and Rocky Mountain Power, had argued that it was paying wind developers too much money for power that it couldn’t rely on in the peak summer months. The commission ruled that all new contracts will be paid based only on the project’s ability to deliver during peak hours and when a utility is short on overall capacity.
“We always thought we’d get some of what we asked for,” said Mark Stokes, Idaho Power’s power supply planning manager.
The Federal Energy Regulatory Commission didn’t wait for the Idaho PUC to act. It ruled in September that Idaho Power’s proposal to curtail wind plants would be inconsistent with PURPA. The federal panel ruled on the request of Idaho Wind Partners, which operates farms around Twin Falls.
It turns out the federal action wasn’t necessary. The Idaho commission, silent on the issues raised by FERC, said Idaho Power did not prove its case that a glut of new wind projects is costing its customers unfairly during periods of low demand.
“If the company believes that the over-supply of (wind) power presents operational problems during light-load periods, then it should address this issue when it negotiates new power-purchase agreements,” the commission said.
Idaho Wind Partners hasn’t stated an intention to build new wind plants, but the order keeps its current projects’ cash flow stable.
“We commend the actions taken to confirm the sanctity of our approved power contracts and sincerely hope that all involved parties agree to live within the scope of the IPUC’s decision without further appeal or litigation,” managing partner Steve Eisenberg said.
Idaho Power and the other parties have 21 days to ask the commission to reconsider its decision.
“Were going to be looking at this to decide if this is going to protect our customers from further harm,” Stokes said.
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