Idaho Public Utilities Commission

Case No. IPC-E-10-24, Notice of Application and Comment Deadline

October 29, 2010

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

Utility seeks agreement with 80-megawatt wind project near American Falls

The Idaho Public Utilities Commission is taking comments through Nov. 19 on a request by Idaho Power Company to enter into a sales agreement with the 44-turbine, 80-megawatt Rockland Wind project near American Falls in eastern Idaho.

The agreement, with Seattle-based Ridgeline Energy, is for a PURPA project with a scheduled operation date of Dec. 31, 2011. PURPA is the federal Public Utility Regulatory Policies Act passed by Congress during the energy crisis of the late 1970s. The act requires electric utilities to offer to buy power produced by small power producers or cogenerators who obtain Qualifying Facility (QF) status.

The proposed agreement has many unique characteristics because of its size. All Idaho Power PURPA wind projects to date are 10 megawatts or smaller, which is as large as a project can be for developers to be paid an “avoided cost” rate that is determined and published by the commission. 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. However, projects larger than 10 MW can still qualify as PURPA projects if the developer and the utility are able to negotiate a price that closely matches the utility’s avoided cost. Because Idaho Power customers ultimately pay for the power generated by PURPA projects, it is not in the public interest for the commission to approve sales agreements that result in customers paying more for power that could have been generated or purchased elsewhere at lower cost.

The negotiated levelized energy price in the 25-year agreement is $71.29 per megawatt-hour, according to Idaho Power’s application, lower than the published avoided cost rate of $75.88 per MWh for projects 10 MW or smaller.

The proposed agreement contains financial damage and security provisions for the benefit of customers in the event of the project’s default or failure to meet its completion date as well as a mechanical availability guarantee. The developer would retain the renewable energy credits (green tags) for the first 10 years, which will help offset the development cost. Idaho Power would keep the renewable energy credits for the final 15 years when the utility may have to comply with federal or state renewable portfolio standards.

The commission plans to handle this request in a modified procedure that uses written comments rather than conducting a hearing. Comments are accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on "Comments & Questions About a Case." Fill in the case number (IPC-E-10-24) 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. Click on “File Room” and then on “Electric Cases” and scroll down to the above case number.