Hearings on how renewable energy projects will be priced began before the Idaho Public Utilities Commission began Tuesday with a long cross examination of an Avista official by an attorney for developers.
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Clint Kalich, Avista resource planning and power supply manager, testified how it depends on up to 700 megawatts of power it would buy on the market to project it will have a surplus of power now and in the near future. Avista is confident that power will be there because the Pacific Northwest has a large surplus of power available.
Peter Richardson, an attorney for renewable developers, pressed the issue that Avista did not have contract to ensure the power would be there when its needed. He was making his point that the utilities are asking the commission to establish a process that allows the state’s utilities out of mandatory purchase obligations under the federal Public Utility Regulatory Policies Act.
The proposal would relieve utilities during times of surplus. Richardson suggested that the utilities could “manipulate” their projections to show a surplus so they didn’t have to buy renewable projects.
But Kalich said that with the regional surplus, Avista’s customers don’t benefit by the utility buying the PURPA power, which is sold at rates higher than market costs now.
Richardson argues the market could change quickly like it did during the energy crisis in 2001 when utilities pay thousands of dollars for power it can buy from renewable developers for more than 10 times less.
Its just one of several issues the commission will decide about PURPA projects in three days of hearings scheduled this week. Idaho Power, Rocky Mountain and Avista have attorneys at the hearing along with 25 other intervenors.
The utilities argue changes are needed so that energy they are required to buy from renewable projects because it’s costing their customers too much. Renewable developers argue the proposed changes, including the surplus provision, shortening of the contract period from 20 to five years and transferring renewable energy credits to the utilities would kill renewable power development in Idaho and lead to higher cost in the future for ratepayers.