February 23, 2008
Contact: Gene Fadness 208.334.0339
Utility seeks small-power project modifications
Idaho Power Company wants state regulators to take into account the changing value of energy during peak demand times and light load hours when considering the amount it must pay to small-power producers who deliver energy to the utility.
Idaho Power’s petition also asks the Idaho Public Utilities Commission to adopt a rule, similar to one approved in Oregon, that prevents the utility from having to pay a small-power developer a published rate that is typically higher than market rates when the same owner/developer has another project or projects located within five miles of each other.
Under the federal Public Utility Regulatory Policies Act of 1978 (PURPA), regulated utilities such as Idaho Power Co. must buy power from generators of renewable energy at a rate that is published by state utility commissions. That rate, currently about $64 per megawatt-hour, is called the avoided-cost rate and is typically more attractive than market rates. The rate is intended to be based on the cost the utility avoids when it buys from a PURPA project and thus does not have to generate the power itself or buy it from another source.
Similar to a seasonal adjustment Idaho Power already gets, the utility seeks a “daily shape adjustment” that could change the total revenues received by small-power producers depending on when during the day they deliver energy to Idaho Power. The company contends that energy provided by small-power producers has different values based on how it can help the company’s daily peaks in load. Idaho Power notes that the commission has approved a similar daily shape adjustment for Avista Utilities, which accounts for the difference in value between heavy-load and light-load hours. Avista serves customers in northern Idaho.
Idaho Power’s second request concerns a practice of some wind developers to build their projects at or near the former 10 MW size limit to qualify for the published PURPA rate and then locate another 10-MW project close by, but still qualify for the published rate simply by creating a separate legal entity, although ownership does not change.
Current commission rules state that only non-firm projects of 100 kilowatts or less can qualify for the published PURPA rate. Idaho Power Co., in a separate petition, is seeking a return to the former size limit of 10,000 kilowatts, or 10 megawatts, as the upper limit of projects that can qualify for the PURPA rate. However, Idaho Power seeks an end to the practice of single owners aggregating projects in order to meet the size limit and get the published rate. Idaho Power wants the commission adopt a rule similar to one in Oregon that says projects owned by the same developer cannot be within five miles of each other.
The commission is taking comment on both these requests through March 23. 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-07-04) 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.