Idaho Public Utilities Commission
Case No. IPC-E-11-10, Order No. 32384
October 24, 2011
Contact: Gene Fadness (208) 334-0339, 890-2712
Regulators OK agreement between Idaho Power, solar project
The Idaho Public Utilities Commission has approved a revised 25-year sales agreement between Idaho Power Company and the developer of a photovoltaic solar project near Murphy in Owyhee County.
Boise-based Interconnect Solar Development LLC states the 20-megawatt project will be online by July 1, 2012.
A calculation error in the contract originally proposed resulted in a commission order that the parties submit a revised agreement. The price Idaho Power will pay the project developer varies depending on the time of year and the hours of the day when the project’s output is delivered, but the levelized price over the life of the contract is $97.47 per megawatt-hour or about 9.75 cents per kilowatt-hour. The original agreement proposed a levelized price of $105.15 per MWh.
Idaho Power and Interconnect Solar will share 50-50 the revenue received from the sale of Renewable Energy Credits (green tags) attributable to the project.
Commission staff recommended the project be denied, stating the rates proposed to be paid by Idaho Power are not the same as Idaho Power would have paid had it generated the same amount of power itself or bought from another source, as required by PURPA, the federal Public Utility Regulatory Policies Act. The entire cost of power generated by PURPA projects is passed on to customers.
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. The Idaho Power-Interconnect Solar sales agreement is the first wind or solar project proposed since a February order by the commission that requires wind and solar developers larger than 100 kilowatts to negotiate an avoided-cost rate rather than rely on the commission’s published avoided cost rate for PURPA projects.
Commission staff was also concerned that the project would not meet its scheduled operation date because the necessary transmission and interconnection facilities may not be completed in time. Interconnect Solar has agreed to pay liquidated damages if the project is not completed in time.
In its findings, the commission said it shared commission staff concerns about timely completion. “The project’s optimism may prove to be foolhardy,” but, the commission noted the developer has agreed to pay damages if it doesn’t meet deadlines. “Interconnect Solar maintains its position that interconnection will occur ahead of Idaho Power’s estimated schedule at its own peril.”
Regarding the price paid the developer, the commission acknowledges that the issue of avoided cost for solar and wind is not yet settled, but the rates proposed by Idaho Power and Interconnect are reasonable because they are based on “past practices and current understanding of this commission’s directives.”
The concerns posed by commission staff are reasonable factors, the commission noted, that will be considered in another case that has been opened to determine more accurate avoided cost for solar and wind projects. That case, GNR-E-11-03, is open with testimony and rebuttal deadlines scheduled and a technical hearing tentatively scheduled for August 7-9, 2012.
The commission’s order in this case is final. 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 Case No. IPC-E-11-10.
Interested parties may petition the commission for reconsideration by no later than Nov. 10. Petitions for reconsideration must set forth specifically why the petitioner contends that the order is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and quantity of evidence the petitioner will offer if reconsideration is granted.
Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.