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Digester to Sell Power to Grid by Dave Wilkins Capital Press, August 15, 2008

Conservation group supports project to burn methane

Idaho Power Co. has received the green light to purchase electricity from an anaerobic digester that will be built on a Magic Valley dairy farm.

The Idaho Public Utilities Commission on July 30 approved a power purchase agreement between Idaho Power and DF-AP #1 LLC, the group that is building the digester at the Big Sky Dairy near Gooding, Idaho.

If the 1.5-megawatt project gets up and running by mid-February as planned, it could be the first anaerobic digester on an Idaho dairy to sell electricity to the commercial power grid. The digester will capture methane gas from cow manure and burn it to produce electricity.

Electricity isn't the only commercial energy source being generated by anaerobic digesters in Idaho. Intrepid Technology and Resources Inc. sold its first load of commercial-grade biogas from a digester in late March. The company operates the digester in cooperation with the Whitesides Dairy near Rupert.

Anaerobic digesters could help Idaho dairies dispose of cow manure and create a new income stream for producers at the same time.

"There definitely is interest, especially in the Magic Valley," IPUC spokesman Gene Fadness said.

"It could be another source of income in that region," he said. "It takes care of waste and odor all at once, so there certainly is a lot of interest in it."

Even critics of large feedlot operations have embraced the dairy industry's use of anaerobic digesters.

In a letter to the IPUC in June, the Idaho Conservation League said it supported the digester project as a means of increasing "clean power production and reducing greenhouse gas emissions."

The league has sued some Idaho dairies over odor emissions.

The Big Sky digester qualifies as a small-power production facility under provisions of the Public Utility Regulatory Policies Act of 1978. Passed by Congress during the energy crisis of the late 1970s, PURPA requires electric utilities to offer to buy power produced by small-power producers who gain "qualifying facility" status.

Idaho Power's contract with DF-AP is unique in that it includes a clause that requires DF-AP to pay the utility up to $200,000 if the project fails to come online by its target date of Feb. 14, 2009.

Commissioners said the provision was reasonable because at least six separate PURPA facilities have recently failed to meet their contractual online dates with Idaho Power.

"A failure to meet the contractual online target date can adversely affect Idaho Power's power supply costs given recent high market prices for replacement power," the IPUC said in its order.

DF-AP will be required to post a "delay security," or what amounts to a bond, that Idaho Power could draw upon if the digester fails to come online on time.

The amount of the delay security is to be calculated by Idaho Power according to a "good faith forecast" of future energy prices and is not to exceed $200,000, according to the agreement.