The Idaho Public Utilities Commission isn’t waiting to rule on Idaho Power’s request to reduce the length of renewable energy contracts it’s required to sign.
The three-member commission reduced from 20 years to five the length of federally mandated contracts Idaho Power signs with solar and wind developers in an order Thursday.
The 5-year contract length will be in place until the commission rules on Idaho Power’s application a week ago to reduce contract lengths to two years. It’s the latest effort of the PUC to manage the federal Public Utility Regulatory Policies Act of 1978, which it has implemented aggressively since the 1980s.
PURPA, as the law is called, requires regulated utilities to buy energy from qualifying renewable generation projects at rates aimed at to be the same as the utility would pay to generate it or buy from somewhere else. In the last three months, the commission has approved PURPA contracts for 461 megawatts of solar energy. Idaho Power claims developers have an additional 885 megawatts of PURPA solar capacity in the queue actively seeking energy-sale agreements with 2016 on-line dates.
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If all of those plants are built, Idaho Power would have a total of 1,253 megawatts of new green power on its grid, Idaho Power said last year. In 2013, Idaho's peak load was 3,407 megawatts in July, which would make green power 37 percent of its system.
And that doesn't count as green power the 1,700 megawatts Idaho Power can produce at its hydroelectric dams.
Idaho Power claims that continued creation of 20-year contracts places undue risk on customers at a time when the utility says it has sufficient resources to meet customer demand. The company claims acceptance of the contracts will inflate power supply costs and negatively impact the reliability of its energy delivery system.
Reducing the length of the contracts increases the risk for developers and is designed to slow the flow of new projects. Commissioners said Thursday they will process Idaho Power’s case quickly to give project developers certainty and ensure customers do not pay more for PURPA power than they should.
The commission recently concluded a major review of PURPA contract terms and conditions and updated how it calculates avoided-cost rates.
Developers continue to request contracts with Idaho Power in significant enough numbers “that we remain concerned about the company’s ability to balance the substantial amount of must-take intermittent generation and still reliably serve customers,” the commission said in a January 8 order approving six solar projects. “Unfortunately, PURPA does not address and FERC (Federal Energy Regulatory Commission) regulations do not adequately provide for consideration of whether the utility being forced to purchase (PURPA) power is actually in need of such energy.”
The Idaho Conservation League, Intermountain Energy Partners, JR Simplot Company and the Snake River Alliance all were granted intervenor status in the case.