Idaho Public Utilities Commission

Case No. IPC-E-11-09, Order No. 32294

July 26, 2011

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

PUC approves PURPA agreement with Montana hydro project

The Idaho Public Utilities Commission has approved a power purchase agreement between Idaho Power Company and the developer of a 4.7-megawatt hydroelectric project near Dillon, Montana.

Under the sales agreement, Idaho Power will buy energy generated by the Clark Canyon hydroelectric project in southwest Montana. The agreement is for 20 years with a scheduled operation date of March 31, 2013.

The Clark Canyon project is a qualifying facility (QF) under the provisions of the federal Public Utilities Regulatory Policies Act, or PURPA. Passed in 1978, PURPA encourages the development of renewable energy technologies as alternatives to burning fossil fuels or building new power plants. PURPA requires electric utilities to buy power produced from QFs at a rate published by the commission or negotiated between by the QF and the utility. The published rate is to be equal to the cost the purchasing utility avoids if it would have had to generate the power itself or buy it from another source. The commission must ensure the avoided-cost rate is reasonable because 100 percent of the amount utilities pay QFs is included in customer rates.

The published rate included in the agreement begins at $67.32 per megawatt-hour in 2013 and increases to $128.26 per MWh in 2032.

In a separate agreement, the parties agreed to share the value of the Renewable Energy Credits that will be attributed to the project. Clark Canyon will retain all the credits for the first 10 years of the contract and Idaho Power will own all the RECs for the final 10 years of the contract.

A 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 Number IPC-E-11-09.