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Dairies, Canal Firms Favored by Renewable Energy Ruling by Sean Ellis Capital Press, December 19, 2012

BOISE -- Developers of dairy digesters and small, canal-based hydroelectric projects in Idaho will be able to keep the valuable renewable energy credits that come along with those projects.

But under a Dec. 18 ruling by the Idaho Public Utilities Commission, developers of small wind and solar projects and renewable energy projects over 10 megawatts will have to split the credits with publicly regulated utilities.

Utilities and representatives of the alternative energy industry are still combing through the 69-page ruling, but they agreed the IPUC's ruling was favorable to dairy digesters and small hydro projects but less favorable to wind and solar projects.

"It leaves our dairy digesters whole, which is a good thing," said Milk Producers of Idaho Executive Director Brent Olmstead. "We feel the developer of the power deserves to own them because they're the ones making the investment and building the facility and they're the ones producing the power."

The so-called "green tags" represent proof that one megawatt of electricity was generated from a renewable source that meets federal guidelines and can be sold on the open market.

While the state's three major electric utilities argued they should own the credits because federal laws force them to purchase the power, developers of the projects say they should because they're the ones making the investment.

Without the credits, dairy digesters aren't economically viable, Olmstead said, and an unfavorable ruling would likely have meant the end of dairy digesters in Idaho.

Dairies don't build digesters to produce power but to manage waste, he said. "However, without being able to sell the power and the renewable energy credits, we would not be able to use this waste management tool."

The ruling culminates a case that began in 2010 when Idaho Power Co., Avista and Rocky Mountain Power asked the IPUC to investigate a number of issues related to the federal Public Utility Regulatory Policies Act, which requires regulated utilities to buy energy from small qualifying renewable energy projects.

Canal companies in Idaho with hydroelectric power projects also liked the ruling.

"In line with PURPA, I think the commission is encouraging the development of alternative power," said Boise attorney Tom Arkoosh, who represented several Idaho canal companies in the case. "The credits have real economic value. Having them encourages the development of alternative energy."

The IPUC ruled that wind and solar projects larger than 100 kilowatts and all projects larger than 10 average megawatts will have to split the credits 50-50 with utilities.

None of Idaho's dairy digesters or canal-based hydro projects are over 10 megawatts. The largest manure-based digester in the country, Double A Dairy in Lincoln County, Idaho, is a 4-megawatt project.

Mark Stokes, manager of power supply planning for Idaho Power, said the company is still reviewing the order, "which has a lot of different pieces and parts to it. While we got some of the things we asked for, we didn't get all of it by any means."