Idaho Public Utilities Commission

Case No. IPC-E-09-34, Order No. 31026

April 5, 2010

Contact: Gene Fadness (208) 334-0339, 890-2712

Website: www.puc.idaho.gov

 

Idaho Power seeks approval of geothermal contract

 

Idaho Power Company is asking the Idaho Public Utilities Commission to approve a sales agreement with the developer of geothermal generation project 12 miles northwest of Vail, Oregon. The project is within Idaho Power’s service territory. The commission is taking comments on the proposal through May 3.

 

The Neal Hot Springs Unit No. 1 is expected to produce about 22 megawatts of power by late 2012. The project is owned by USG Oregon LLC, a subsidiary of U.S. Geothermal based in Boise. The agreement provides that Idaho Power will receive the rights to the renewable energy credits now available or created during the 25-year term of the agreement.

 

Beginning in 2012, the flat energy price, under the agreement, is $96 per megawatt hour. The price escalates annually by 6 percent in the initial years and by 1.33 percent during the latter years of the agreement. The approximate 25-year levelized price is $117.65 per MWh.

 

Idaho Power asserts that while the price of energy under this agreement is higher than most sales agreements, there are benefits that bring value to Idaho customers. Those include Idaho Power’s right to the renewable energy credits, the utility’s ability to curtail energy output from the project when needed, Idaho Power’s first right to ownership of possible future site development and the right to extend the terms of the contract.

 

Because the projected output is more than 10 average megawatts, the project is too large to qualify for posted PURPA rates. Instead, the proposed rates were negotiated between the company and the project developer. If approved, the cost of the power purchased under the agreement would be recovered in the annual Power Cost Adjustment (PCA), which is updated every June 1.

 

The commission plans to handle this request in a modified procedure that uses written comments rather than conducting a hearing, unless customer comments can demonstrate a need for a public hearing. Comments are accepted through May 3 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-09-34) 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, is 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.