Idaho Power seeks to include Raft River costs in PCA
Idaho Power Company is planning on increasing its power purchases from a Boise-based geothermal company and is seeking regulatory approval to include the expenses from the purchases in the company’s annual Power Cost Adjustment (PCA) mechanism.
U.S. Geothermal, Inc., based in Boise and Vancouver, British Columbia, was selected in a bid process undertaken by Idaho Power, which wants to include 100 megawatts of geothermal power in its power supply mix. Geothermal energy is recovered from the heat of the Earth’s interior that appears in the form of volcanoes, hot springs and geysers.
U.S. Geothermal is offering a total of 45.5 MW to Idaho Power. The agreement currently before the Idaho Public Utilities Commission is for about 13 MW of that 45.5 MW to come from U.S. Geothermal’s Raft River plant, about 15 miles southeast of Malta. Agreements for the remaining 32.5 MW will be submitted later under a separate filing.
Idaho Power currently has an agreement under provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA) for 10 MW of generation from the Raft River facility. PURPA projects are renewable projects that utilities are required to buy from at a rate set by state commissions. However, at the time U.S. Geothermal entered into a PURPA contract with Idaho Power, projects could generate no more than 10 average megawatts. By transferring the Raft River project from a PURPA project to a more traditional power purchase agreement, Idaho Power will be able to accept more energy from the developer. Further, Idaho Power claims, the price of the energy under the 25-year agreement will be about $20 per MWh less at contract’s end than under a PURPA contract. Idaho Power projects the power purchase agreement in 2032 will be about $73.92 per MWh compared to about $93.14 per MWh under a PURPA agreement.
Idaho Power’s application before the commission seeks to include the costs of this power purchase in the company’s annual Power Cost Adjustment mechanism. The PCA includes the utility’s extraordinary power supply costs that are not included in base rates. Every spring customers get either a surcharge added to their base rate when power supply costs are greater than anticipated or a credit when power supply costs are less than projected. During low-water years, customer typically get a surcharge because dry conditions result in less generation from Idaho Power’s hydroelectric facilities and, hence, the company has to buy more power from other sources. If the commission were to approve Idaho Power’s application, the expenses resulting from buying power from U.S. Geothermal would be among those used to calculate the yearly PCA.
The commission is taking comments on the company’s proposal through Dec. 21. Those wishing to submit comments via e-mail can do so by accessing the commission’s homepage at www.puc.idaho.gov and clicking on "Comments & Questions." Fill in the case number (IPC-E-07-17) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.