Idaho Power has sent two contracts it made with solar power developers to state regulators for approval.
The utility already has signed six solar contracts for 60 megawatts in its Oregon service territory and says it has another 300 megawatts of proposed solar projects developers seeking pricing and contracts. It also has sent to the Idaho Public Utilities Commission a proposal for a solar integration charge developers would pay that gradually increases as solar generation increases.
This expansion of solar power comes from Idaho Power’s requirement to provide an open market for power developers who can sell them power at the same cost they would pay to build their own natural gas plant. This is called the avoided cost.
This is a federal requirement of the Public Utility Regulatory Policies Act that the utility has often chafed at in the past. Today its main concern is to ensure that its customers nor its stockholder pay the cost of integrating intermittent sources of power like solar into its grid.
This is a complex issue in the short run until Idaho Power completes high power transmission projects that will allow more power to go back and forth between western Oregon an Washington, and eventually Wyoming. That’s because Idaho Power has to have other generation from gas, coal or hydro ready to go on in seconds as clouds obscure solar or the wind dies down.
Sunergy World, a part of Intermountain Energy Partners, is one of the two developers with an Idaho Power contract. Its proposed plant would generate up to 40 megawatts of electricity at a City of Boise-owned a site on South Cloverdale Road between Boise and Kuna. It hopes to begin operation in January, 2016.
Grand View PV Solar Two proposes an 80 megawatt solar plant 20 miles southeast of Mountain Home. The 120 megawatts the two plant would produce could serve 83,000 average sized homes.
Both developers are seeking 20-year contracts, which would pay them $72-$74 per megawatt-hour -- about seven cents a kilowatt hour -- for the energy, levelized over the life of the contracts. This demonstrates just how much the cost of solar power has come down since only a few years ago solar projects needed an avoided cost of more than 13 cents a kilowatt-hour to compete.
The two contracts were signed because the developers agreed to the integration charge the utility has proposed to the commission. “With the recently completed Solar Integration Study, Idaho Power can ensure that the developers, and not our customers, will pay the cost of integrating this solar power into our system,” said Phil DeVol, Resource Planning Leader for Idaho Power.
Idaho Power proposes that developers pay about 40 cents per megawatt-hour when there is 100 megawatts or fewer of solar generation on Idaho Power’s system. That cost increases to $1.50 per megawatt-hour when solar penetration is between 100 and 300 megawatts; $2.80 per per megawatt-hour when it get to between 300 and 500 megawatts; and $4.40 per per megawatt-hour when between 500 and 700 megawatts of solar power is on the utility’s grid.
These charges would gradually change during the length of the sales agreement.