Idaho PUC Approves Six Wind Farms

The Idaho Public Utilities Commission (PUC) has accepted sales agreements between Idaho Power Co. and a San Francisco developer for six wind projects.

All six wind farms – Cold Springs, Desert Meadow, Hammett Hill, Mainline, Ryegrass and Two Ponds – qualify for the commission's posted avoided-cost rate under the provisions of the Public Utilities Regulatory Policies Act (PURPA), which requires that electric utilities offer to buy power produced from qualifying small-power producers or cogenerators.Â

The rate to be paid to developers of cogeneration or small-power producers is established by the commission and 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.Â

Each of the projects has a capacity of 23 MW, but because wind is intermittent, the agreements call for delivery of an average 10 MW per project per month to Idaho Power. Should the projects exceed an average 10 MW, Idaho Power may accept the energy but will not pay for it.Â

While the commission adopted the sales agreements, it expressed concern about the transmission capacity available on Idaho Power's system at the single point of interconnection, a 230 kV line in Elmore County, which is also near two other projects – Bennett Creek and Hot Springs – owned by the same developer. The identity of the developer was not released by the PUC.Â

A system impact study was performed that indicated the existing transmission system can accommodate output from the projects without transmission network upgrades. However, when that study was completed, it was for projects with a nameplate capacity of 20 MW. Since the study was completed, the project evolved with the developer's turbine choice resulting in projects with a nameplate capacity of 23 MW.Â

Consequently, the PUC is ordering the developer to request additional transmission capacity and be responsible for all costs associated with the request.Â

All of the agreements include a mechanical availability guarantee, a reduction in the price paid to the developer to allow for integrating the wind into Idaho Power's transmission system and a wind forecasting cost assessed the developer. The parties also agreed to damages and security provisions in the event the projects do not meet their scheduled first operation date of Dec. 31, 2012.Â

The rate for these projects is a non-levelized rate that increases through the 20-year life of the contract. In 2013, the rate for normal load hours during normal seasons of the year will be $61.93/MWh, escalating to $121.76/MWh in 2032. That rate varies to account for heavy and light load hours of the day and heavy and light load seasons of the year.Â

Commission staff calculated that the six projects are expected to generate 303,648 MWh annually. The annual value of the expected generation will be about $18.8 million in 2013 and will increase to about $36.9 million in 2032. Staff calculated the collective net present value of the generation over the life of the agreements to be about $208.9 million. Â

SOURCE: Idaho Public Utilities Commission


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