IDAHO PUBLIC UTILITIES COMMISSION

Case No. IPC-E-06-21

June 27, 2007

Contact: Gene Fadness (208) 334-0339, 890-2712

Website: www.puc.idaho.gov

 

 

Idaho Power, wind developer propose settlement

 

A wind developer and Idaho Power Co. are proposing to settle their dispute over who should have to pay for transmission upgrades to accommodate new generation in south-central Idaho.

 

A complaint filed last fall by Cassia Gulch Wind Park and Cassia Wind Farm alleged that an Idaho Power plan to require small-power producers to pay for nearly $60 million in transmission upgrades to accommodate nearly 200 megawatts of new generation threatened the economic viability of a number of wind projects and would stifle further development of renewable energy in Idaho. The developer, Jared Grover, asked the Idaho Public Utilities Commission to determine that costs to upgrade the 138-kV transmission system in the Twin Falls area be borne by all Idaho Power ratepayers, not just small-power producers. Cassia Wind Farm is a 10.5-MW facility with five, 2.1 MW turbines. Cassia Gulch Wind Park is an 18.9-MW project that will include nine, 2.1-MW turbines. Both projects are in the Bell Rapids area near Hagerman.

 

The parties are now asking the commission to approve a settlement that significantly reduces the amount needed to invest in transmission upgrade from $60 million to $11 million. Cassia has agreed to install, at its expense, equipment and communication facilities that will allow it to reduce its energy output to a predetermined point within 10 minutes of when Idaho Power asks for a reduction. Under the proposed settlement, Idaho Power would issue a “redispatch” notice to Cassia and other wind developers when it needs to act quickly to reduce transmission over-loads.

 

Idaho Power has the transmission capability to handle the anticipated 200 MW in new generation under normal circumstances. However, existing transmission capacity is not sufficient to meet the company’s required reliability standards during times of emergency, such as when transmission lines are out of service. The willingness of Cassia and future wind generators in the area to be able to reduce output when Idaho Power issues a redispatch notice will obviate the need to install major transmission upgrades, the company claims.

 

The parties are also proposing a formula to pay for the $11 million in transmission upgrades required to accommodate generation from Cassia and other anticipated wind projects in the Magic Valley. Idaho Power would pay 100 percent of the costs for the first phase of the five-phased upgrade. For the remaining four phases, 25 percent of costs would be provided by the developer and 25 percent by Idaho Power Co., the latter to be included in rate base for future recovery from customers systemwide. The remaining 50 percent would be advanced by the developer, but refunded over a term not to exceed 10 years after the projects are commercially viable. The refunded amounts would then be included in rate base.

 

The transmission upgrades, Idaho Power contends, would provide the company with a more robust transmission system serving the Magic Valley and the Wood River Valley.  Further, the generation Idaho Power anticipates from other wind projects in the area, about 60 to 80 MWs, would satisfy a major portion of future generation identified as necessary in the company’s Integrated Resource Plan.

 

The commission is taking comment on the proposed settlement through Aug. 6. Comments are accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on "Comments & Questions." Fill in the case number (IPC-E-06-21) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.

 

A full text of the commission’s order, along with other documents related to this case, are available on the commission’s Web site. Click on “File Room” and then on “Electric Cases” and scroll down to the above case number.