Idaho Power contract with landfill gas generator approved
The Idaho Public Utilities Commission has approved an agreement between Idaho Power and Georgia-based G2 Energy LLC to buy energy output from a landfill gas project that G2 Energy will develop at the Ada County landfill on Seaman’s Gulch road north of Boise. Commission staff believes this will be the first electrical generation facility in the state to use landfill gas as its generation source.
The electricity is produced as a byproduct of operations at the landfill. Methane gas is generated as part of the decomposition process of the trash. The gas plant will be able to produce, at full capacity, 3.2 megawatts. The plant is scheduled to be in operation by March 1.
The 20-year agreement includes a special electric rate determined by the Idaho Public Utilities Commission under federal PURPA provisions.
Congress passed PURPA, the Public Utility Regulatory Policies Act, during the energy crisis of the late 1970s. Its purpose is to encourage development of renewable energy technologies as alternatives to burning fossil fuels or constructing new power plants. The federal act requires that electric utilities offer to buy power produced by small power producers or co-generators who obtain Qualifying Facility (QF) status.
The published rate to be paid project developers is set 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 rate paid G2 Energy will vary depending on the time of year. During times of peak demand – July, August, November and December – Idaho Power will pay about 6.2 cents per kWh and during low demand months about 3.8 cents. The price gradually escalates during the 20-year term of the agreement.
In its findings, commission staff said it is uncertain as to whether the fuel supply will diminish over time and whether the project can continue to produce its rated output over the 20-year life of the agreement. However, the contract is written in such a way that Idaho Power ratepayers are not at risk if the agreement is terminated early.
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 www.puc.idaho.gov. Click on “File Room” and then on “Electric Cases” and scroll down to Case Number IPC-E-05-29.