Idaho PUC Set To Approve Sales Agreement For Wind Projects

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Four wind projects developed by Boise, Idaho-based Exergy Development will be able to sell their output to Idaho Power Co., but only after the Idaho Public Utilities Commission (PUC) approves the sales agreements with some provisions to address concerns expressed by Idaho Power.

Applications for the four 10 MW projects in the Rogerson area were submitted four days before the effective date of a PUC order that reduced the size of wind and solar projects that can qualify for a published rate from 10 MW to 100 kW. Idaho Power and two other major electric utilities operating in the state asked for a reduction in the size of projects that can qualify for published rates due to the rapid development of large wind projects that are broken up into smaller 10 MW projects in order to qualify for the rate.

Idaho Power said it would accept these four projects to comply with its federal Public Utility Regulatory Policies Act mandate to accept power generated from qualifying renewable facilities but also stated that the ‘continuing and unchecked requirement’ for Idaho Power to acquire additional intermittent generation regardless of the utility's need for additional energy ‘increases the price its customers must pay for their energy needs.’

To address some of the concerns, the agreements state that Idaho Power can curtail generation from the four projects without compensation to the developer under certain conditions. Those conditions include times when generation on Idaho Power's total system approaches minimum levels needed to serve customers and when further acceptance of the wind would have a detrimental effect on the utility's ability to simultaneously manage the generation also coming from thermal, hydro and other resources.

PUC staff did not have objections to the curtailment provision, but stated that if non-compensated curtailment became frequent, the economic viability of the projects could be adversely affected.

The agreement also states that it is up to the wind developer to work with Idaho Power's business delivery unit to ensure that interconnection facilities and transmission upgrades are completed in time to meet the projects' scheduled operation date of June 30, 2012. If the projects fail to meet their delivery dates, delay damages will be assessed.

Idaho Power maintains it now has about 470 MW of wind generation and could have 1,100 MW of wind on its system in the near term, which exceeds the amount of power used in its total system on the lightest energy-use days.

The rate proposed for the four projects is a non-levelized rate that increases through the 20-year life of the contract. In 2012, the agreement's proposed rate for normal load hours during normal seasons of the year is $58.68/MWh, escalating to $117.77/MWh in 2031. The rate varies to account for heavy and light load hours of the day and heavy and light load seasons of the year.

SOURCE: Idaho Public Utilities Commission

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