The Idaho Public Utilities Commission ruled against Idaho Power’s proposed policy to curtail wind power plants.
The three-member commission said Idaho Power did not prove its case that the glut of new wind projects is costing its customers unfairly during periods of low demand.
“If the company believes that the over-supply of (wind) power presents operational problems during light-load periods then it should address this issue when it negotiates new power purchase agreements,” the Commission said in an order released today,
The commission also ruled that renewable energy credits worth millions of dollars should either go to the energy developer or be split between the developer and the utility, depending on the contract. It also ruled against Idaho Power and kept contracts at 20 years instead of five.
But the commission ruled all new renewable contracts will be paid for generating capacity based only on the project’s ability to deliver during peak hours and when a utility is short on capacity. Currently, renewable developers are paid for both energy and capacity, which in the case of wind power leaves utilities short during peak demand in the summer.
The commission also called on the parties to develop a new procedure for contracts under the Public Utility Regulatory Policies Act.
“This Commission has a long history of encouraging PURPA development,” the Commission wrote in its order. “With the changes adopted herein, we believe that PURPA development can continue to thrive in a way that holds ratepayers harmless.”
That law, passed in 1978 to encourage development of small and alternative sources of energy, requires utilities to buy power from private producers at the price the utility would spend to build its own power generation facilities. Today that "avoided cost" is the cost of building and operating a natural gas plant, which the PUC said should be set annually in June.
The cap for wind and solar projects seeking the commission’s published avoided-cost rates was kept at 100 kW. The eligibility cap for all other renewable developers remains 10 megawatts.
Wind and solar projects larger than 100 kW can negotiate for a rate based on utilities' Integrated Resource Plan, or growth plan. Idaho Power wanted all developers to use the negotiated rate methodology.