The Idaho Public Utilities Commission has approved a sales agreement between Idaho Power Company and Idaho Winds LLC, which plans to build a wind generation project six miles northwest of Glenns Ferry.
The Alkali Wind Farm includes 12 turbines that will be operating by Dec. 31. Even though the maximum output of the project is 18 megawatts, Idaho Winds will not generate more than 10 average megawatts on a monthly basis. Energy delivered in excess of amount may be accepted but Idaho Power will not be obligated to pay for it. The president of Idaho Winds LLC is Rick Koebbe of Boise.
The project is a Qualified Facility under the provisions of the federal Public Utility Regulatory Policies Act passed by Congress during the energy crisis of the late 1970s. PURPA requires electric utilities to offer to buy power produced by small power producers or cogenerators who obtain Qualifying Facility (QF) status. The rate to be paid project developers, called an “avoided cost rate,” is determined and published by state commissions. The avoided cost rate 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.
In August 2005 the commission reduced the size of the projects that can qualify for an avoided-cost rate from 10 average MW to 100 kilowatts. However, Idaho Winds had submitted a signed energy sales agreement and completed a generation interconnection study before August 2005 and is thus grandfathered from the lower size limit.
The agreement does include provisions that require the project to pay Idaho Power damages if the project comes on-line after Dec. 31. The delay damages will accrue for up to 90 days.
The project is also one of the first to come under changes in company’s interconnection tariff, including a requirement that small-power producers enter into an interconnection agreement as well as a sales agreement with the utility. Idaho Winds has not yet signed an interconnection agreement with Idaho Power, but anticipates doing so by year’s end. A feasibility study indicates that upgrades to both Idaho Power’s local distribution system and transmission system are necessary. Costs associated with those upgrades could be reduced if other projects in the area will use some of the same transmission facilities, although cost-sharing arrangements have yet to be worked out.
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 No. IPC-E-06-36.