Developers of renewable, small-power projects are entitled to a rate – now about $61 per megawatt-hour – published by the commission under the requirements of the Public Utility Regulatory Policies Act of 1978, or PURPA. The federal act requires electric utilities to offer to buy power from qualifying small producers of renewable energy. The published rate to be paid developers is called an “avoided-cost rate” – equal to the cost the utility avoids if it would have had to generate the power itself or purchase it from another source.
The agreement includes a provision for a “shortfall energy penalty.” The penalty will be assessed during output shortfalls when the market price for the replacement power is higher than the contract price. There is no penalty when the market prices are less than the contract price. This method is based on the logic that in the event of a shortfall in generation, Idaho Power would have to pay more if it purchased replacement energy from the wholesale market at prices higher than specified in the contract.
The anticipated completion date for the Magic Wind project is Dec. 31, 2007.
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 the above case number.
Interested parties may petition the commission for reconsideration by no later than Jan 11, 2007. 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.