The wind power industry scored a key victory last week and this could be a long-term win for consumers as well.
The Federal Energy Regulatory Commission ordered Idaho Power to abide by the terms of its 20-year agreement to purchase electricity from Idaho wind farms.
For Idahos young and growing wind industry, the implications are clear. Wind producers need a dependable, stable market for their power and need to know that they can sell their product. Without a set market and a predictable rate of return, investments in renewable power development could all but vanish.
The renewable sector has the federal law on its side: The Public Utilities Regulatory Policies Act is supposed to ensure access to the consumer power market. But Idaho Power asked the feds for a rollback, arguing that it should not be required to buy wind power when demand for electricity is lower.
The utilitys talking point the centerpiece of its public battle with wind producers goes back to consumer cost. Idaho Power says the PURPA contracts force the utility to purchase expensive wind power, with the costs passed along to nearly 500,000 customers. When Idaho Power is forced to buy off-peak power from wind farms, the utility is forced to scale back production at its coal-powered plants a yo-yo effect that also drives up consumer costs.
But lets remember that these are 20-year purchase agreements, not one-shot deals. The same time frame that provides a stable market for the seller provides the buyer with the cushion to ride out short-term cost fluctuations.
For Idaho Power to present coal power as a low-cost option seems, at best, short-sighted. Idaho Power isnt going to phase out coal, which meets a little over 40 percent of its power demands in a normal water year. But the region and its ratepayers are best served by an all-of-the-above power portfolio. That includes the traditional sources but also natural gas, now a low-cost commodity, and renewables such as solar and wind.
Developing Idahos abundant wind into a piece of the power puzzle presents an opportunity one the state cannot afford to pass up.
But that opportunity will never be realized unless the wind producers and Idaho Power can craft a long-term working relationship that works for both sides. And this may be the FERC decisions lasting, unintended benefit. Because the ruling keeps wind power in the game, Idaho Power has added incentive to work with this industry, not against it.
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