After nearly three years of deliberation between Idaho's regulated utilities, wind developers and state regulators, three cases involving how much it costs to add wind to utilities' transmission grids have been resolved.
Three orders issued by the Idaho Public Utilities Commission establish the amount of discounts utilities can assess against wind developers to account for the cost of integrating wind into their systems. The orders also remove a cap on the size of small wind power projects that can qualify for a rate published by the commission. Also removed is a provision that allowed utilities to pay wind developers a market rate rather than the typically higher state rate when wind output from projects did not fall within forecasted ranges.
Due to a rapid increase in the number of small wind power projects seeking access to its transmission grid, Idaho Power Co. in 2005 asked the commission to suspend small wind development to allow the utility time to study the costs associated with using back-up generation when wind output is less than projected. The commission denied the suspension, but agreed to decrease the size of small wind power projects – from 10 MW to 100 kW – that could qualify for the published rates that utilities must pay generators of these projects.
Since then, Idaho Power Co., as well as Idaho's two other major electric utilities Avista Corp. and PacifiCorp, completed studies to determine wind integration costs. The utilities and most wind developers proposed a settlement that would bring the size limit of projects that qualify for the small-power rate back up to 10 MW.
Further, wind developers proposed to provide more certainty to utilities by agreeing to participate in the cost of acquiring state-of-the-art wind forecasting services and, further, provide guarantees that their projects would be mechanically able to generate at full output during 85% of the hours during a month.
In exchange for those agreements by wind developers, utilities agreed to support removal of the ’90/110 performance band’ which required that when output was less than 90% of projections or more than 110% of projections, utilities could pay developers the usually smaller market-based rate rather than the published rate.