Case No. AVU-E-05-07, Order No. 30158

October 31, 2006

Contact: Gene Fadness (208) 334-0339




Commission approves Avista-Thompson River contract


The Idaho Public Utilities Commission has approved a 20-year power purchase agreement between Avista Utilities and Thompson River Co-Gen, LLC, a cogeneration facility near Thompson Falls, Mont.


Under the agreement, Avista will pay $58.50 per megawatt hour to Thompson River for up to 11.99 average megawatts per year. For all surplus energy, Avista will pay the current month’s market price.


While the project does meet the requirements for a Qualifying Facility under the provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA), it is not a conventional PURPA contract.


Congress passed PURPA during the energy crisis of the late 1970s. The act requires that electric utilities offer to buy power produced by small-power producers or cogenerators who obtain Qualifying Facility (QF) status. The rate to be paid project developers is set and published by state commissions and is to be equal to the cost the electric utility avoids if it would have had to generate the power itself or purchase it from another source.


The parties negotiated a rate that is less than the $61.60 per MWh rate published by the commission for most PURPA contracts, but is greater than the rate wanted by Avista of $49 per MWh.


The Thompson River plant generates power from coal and from wood waste produced by a nearby sawmill. The commission received a number of comments from environmental organizations, including Women’s Voices for the Earth, expressing concern about the impacts of the project on environmental and public health in the Thompson Falls area due primarily to the plant’s coal generation.


The commission ruled that these issues are beyond the commission’s statutory jurisdiction and should be raised with Montana agencies that do have jurisdiction over environmental and health issues.


The Northwest Energy Coalition asked for a public hearing to more closely examine whether the project qualifies as a PURPA project, the capacity levels of the project, the rates proposed and the environmental integrity of the plant. The commission said a public hearing is not necessary, primarily because purchases from qualifying PURPA facilities are mandated by federal law. The commission also said Avista is not sidestepping the Idaho moratorium on construction and permitting of coal-fired projects in Idaho because the project is not located inside the state. Idaho utilities already buy power and are part owners of coal projects outside the state.


A full text of the commission’s order, along with other documents related to this case, are available on the commission’s Web site at Click on “File Room” and then on “Electric Cases” and scroll down Case No. AVU-E-05-07.


Interested parties may petition the commission for reconsideration by no later than Nov. 17. Petitions for reconsideration must set forth specifically why the petitioner contends that the order is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and quantity of evidence the petitioner will offer if reconsideration is granted.


Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.