Snake River Alliance Feature

Idaho Wind and Solar Projects Run into Roadblocks

By Ken Miller, Snake River Alliance, Guest Writer, 8-24-11

	Wind turbines and a wheat field in southeastern Idaho. Photo by Zechariah Judy, Flickr.

It’s been a tough few weeks for Idaho wind and solar energy developers, what with the Idaho Public Utilities Commission (PUC) slamming the brakes on 14 wind projects, and with developers locking horns with Idaho Power Company over the terms of their contracts.

On July 27, the PUC opted not to reconsider its earlier disqualifications of 14 contracts for wind projects, on grounds that the contracts weren’t submitted before a PUC-ordered cutoff date. Nine of those contracts were between developers and Idaho Power; the other five were with PacifiCorp, an Oregon company that does business in Idaho as Rocky Mountain Power.

Central to this issue is the PUC’s granting of a request by all three Idaho-regulated electric utilities to reduce the size of wind and solar projects qualifying for special rates from the old standard 10 megawatts to 100 kilowatts, which is far smaller than almost any utility-scale wind or solar energy project.

The affected wind projects would be located near Burley, Declo, south of the City of Rocks, and near Shelley.

Developers have secured “published rates” in the past under the federal Public Utility Regulatory Policies Act (PURPA), which was passed in 1978 to foster more renewable energy projects nationwide. That rate is similar to what the utilities would have to pay if they generated their own power or purchased it from the markets. 

Now, if developers want to sell to Idaho utilities, they must work out a project-specific price mechanism, which they say is less favorable than the PURPA rates and depends largely on a utility’s willingness to negotiate.

With those wind projects sidelined for now, two more wind projects, one in Owyhee County of 5 megawatts and one in Elmore County of 10 megawatts, are the subject of charges by Idaho Power. The company says the wind projects are trying to game the system by skirting the Idaho PURPA roadblock in selling their power to Oregon customers at Oregon’s rates.

Oregon still has a 10-megawatt cap on projects, so these two could qualify for the more favorable rates. But Idaho Power claims it shouldn’t be forced to buy power from those projects at the higher rates, because they’re higher than Idaho’s new 100-kilowatt cap for wind projects.

The developers argue it would be a violation of the federal Commerce Clause of the U.S. Constitution for the Idaho PUC to restrict to whom they sell their power.

On the solar side, Grand View PV Solar Two, which is proposing a 20-megawatt solar farm in Elmore County, has filed a complaint against Idaho Power. It charges that the utility is improperly demanding 50 percent of Grand View’s valuable renewable energy credits (RECs) as a condition of its contract.

Renewable energy developers in Idaho have traditionally kept those RECs, which can be critical to their financing packages.

Idaho Power’s argument in this case is that it must have access to some of these renewable credits in order to qualify for a possible federal requirement that the utility should obtain a certain percentage of its power from non-hydro renewables. There is currently no requirement, but officials in Washington have been discussing it as part of a larger energy package.

Idaho Power currently sells the RECs it receives from a wind and geothermal project on the open market, returning the proceeds to customers, as ordered by the PUC.

And then there’s the case of Interconnect Solar’s proposed 25-year contract with Idaho Power, which has agreed to purchase the output from Interconnect’s 20-megawatt project in Owyhee County.

Interconnect says it’s on a tight timeline, needing to break ground and begin installing components for the project before the ground freezes, or risk losing a U.S. Treasury grant that must be issued before the end of the year.

However, PUC staff asked for an extension as they further explore the Idaho Power contract’s pricing structure, because this is one of the first solar utility contracts in Idaho.

In a PUC filing, Interconnect Solar manager Bill Piske said through his attorney that such a delay would be fatal to the project, because it would delay financing and the beginning of construction, which must be five percent complete by year’s end to qualify for the federal grant.

PUC offcials say the extra time to learn more about the solar contract is necessary to avoid find themselves in the same chaotic spot as is the are with wind contracts.

Documents in the above cases can be found on the PUC site at this page.

Ken Miller is clean energy program director for the nonprofit Snake River Alliance. This article is republished, in a shorter form, with permission.

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