Contract with Raft River geothermal project approved
The Idaho Public Utilities Commission is approving a sales agreement between Idaho Power Co. and a Raft River geothermal facility owned by U.S. Geothermal.
Idaho Power originally had a PURPA contract with Raft River Energy I LLC, but, at the time the PURPA contract was approved, the upper limit on generation from the Raft River project was 10 megawatts. The sales agreement will allow delivery of 13 MW and is the first phase of what will eventually be a 45.5 MW plant. The project is about 15 miles southeast of Malta.
The sales agreement is beneficial to Idaho Power ratepayers, the commission ruled, because the rates Idaho Power must pay for the power under the sales agreement are less than they would have been under a PURPA contract.
PURPA, the Public Utility Regulatory Policies Act of 1978, requires utilities to buy energy from small renewable power projects at a rate set by state commissions. 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.
The commission denied Idaho Power’s request to have all the costs from the project passed on to customers through the company’s annual Power Cost Adjustment (PCA) process. Typically, the entire cost of PURPA projects is passed on to customers while the cost of power purchases from larger generators is divided between customers and utility shareholders, with customers paying 90 percent and shareholders, 10 percent. The commission said Idaho Power could have full cost recovery for the first 10 MW of generation, but remaining power costs should be subject to the 90/10 split accorded all non-PURPA projects.
U.S. Geothermal, Inc., based in Boise and Vancouver, British Columbia, was selected in a bid process undertaken by Idaho Power as part of the utility’s effort 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 typically appears in the form of volcanoes, hot springs and geysers.
Documents related to this case are available on the commission’s Web site at www.puc.idaho.gov. Click on the electric icon, then on “Open Electric Cases " and scroll down to Case No. IPC-E-07-17. Petitions for reconsideration must be filed no later than Jan. 30.