Idaho Public Utilities Commission

Case No. IPC-E-10-26, Order No. 32138

December 20, 2010

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



Utility agreement with anaerobic digester approved


State regulators have approved a sales agreement between Idaho Power Company and AgPower Jerome LLC, a 4.5 megawatt anaerobic digester project to be built near Jerome.


The project, which includes three 1.6 MW turbines, is a Qualified Facility under the provisions of the federal Public Utility Regulatory Policies Act (PURPA) 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 utilities pay 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.  


Project developers, based in Colorado, asked that the project be grandfathered under an older, higher posted rate because the sales agreement was substantially complete before the avoided-cost rate was lowered by the commission on March 16. The agreement was not signed in time because the parties disagreed over liquidated damages and security provisions. When AgPower agreed to drop its opposition to those provisions, Idaho Power did not object to the project being grandfathered under the former avoided cost rate.


Under the agreement, AgPower will be paid about $80.05 per megawatt-hour in the first year of operation, with a project online date of Jan, 1. 2012. By the 20th year of the agreement, project developers would be paid about $128.31 per MWh. That amount varies during heavy- and light-load seasons of the year and heavy- and light-load hours of the day.


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 Click on “File Room,” then on “Electric Cases” and scroll down to Case Number IPC-E-10-26.