Idaho Public Utilities Commission
Case No. IPC-E-11-10
September 21, 2011
Contact: Gene Fadness (208) 334-0339, 890-2712
Utility, solar developer given week to propose corrected price
State regulators are allowing Idaho Power Company and the developer of a solar project seven days to submit an amended sales agreement that corrects acknowledged mathematical errors in the current proposed agreement.
Idaho Power, Interconnect Solar Development and staff from the Idaho Public Utilities Commission agree there are computational errors in the proposed sales 25-year sales agreement between the utility and the developer of a 20-megawatt photovoltaic solar project near Murphy in Owyhee County.
The current agreement proposes that Idaho Power pay a $105.25 per megawatt-hour levelized over 25 years to Interconnect Solar. The cost of that power is passed on to ratepayers. After the agreement was proposed to the commission, Idaho Power, responding to commission staff production requests, identified errors that, if corrected, would result in a price of $94.59 per MWh.
Interconnect Solar argues commission staff has introduced methodologies for computing prices for wind and solar projects that should be addressed in a separate case now pending before the commission that addresses many of the same issues. Further, Interconnect says the computational error should not be corrected because other considerations such as ownership of renewable energy credits (green tags) and carbon offsets were negotiated based on the $105.25 per MWh calculation. Interconnect Solar states that the $94.59 per MWh price would render the project no longer viable.
The commission disagreed with Interconnect Solar’s request that the commission overlook the errors in light of the totality of an agreement that was successfully negotiated by both the utility and the developer. The commission said it would “not be fulfilling its role of ensuring just and reasonable rates if it approved an agreement that contained a known computational error.”
The commission said it will give the participants until Sept. 27 to propose a corrected price before making a final determination on the entire agreement.
Interconnect Solar is a qualifying facility under the provisions of PURPA, the federal Public Utility Regulatory Policies Act of 1978. PURPA requires electric utilities to offer to buy power produced by qualifying small power producers or cogenerators. The proposed rate for the project is based on avoided cost – the cost Idaho Power avoids by not having to generate the power itself or buying it from another source. It is the first wind or solar project proposed since a February order by the Idaho Public Utilities Commission that requires wind and solar developers larger than 100 kilowatts to negotiate the avoided-cost rate rather than rely on the commission’s published avoided cost rate.
The parties are proposing to share 50-50 the revenue received from the sale of Renewable Energy Credits attributable to the project.
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.