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IPCo. Buys Wind Power, Seeks PUC Regulation by Pat McCoy, Staff Writer Capital Press, March 2, 2007

Workshop slated March 15 in Boise on the topic

Idaho Power Co., the main electrical utility for much of Southern Idaho, will buy wind power from two new projects being built in Elmore County.

The two projects are Bennett Creek Windfarm LLC and Hot Springs Windfarm LLC. Together, they will produce 40 megawatts.

The two agreements, approved by the Idaho Public Utilities Commission, brings IPCo.'s contracts for wind power to a total of nearly 400 MW, if all the proposed projects are completed by the end of 2008, according to a news release issued by the utility.

The company recently filed a wind integration study with the PUC outlining the issues surrounding combining nondispatchable wind generation with its hydroelectric and thermal generating plants. Wind developers and other interested parties are invited to a workshop on the subject at the Owyhee Plaza Hotel, Boise, on March 15, starting at 9 a.m. Further information on that meeting is available from Dennis Lopez, at 208-388-2464, or via e-mail at dlopez@idahopower.com, the news release said.

In a related development, the PUC announced IPCo. has filed a petition asking state regulators to raise the ceiling on the size of wind generation projects that can qualify for a published rate above market rates when the power produced by those projects is sold to the utility.

Currently, 100 kilowatt wind projects qualify for the higher rate. IPCo. is asking that that limit be moved back up to 10,000 kilowatts, or 10 MWs, the PUC said in a news release.

Under the federal Public Utility Regulatory Policies Act of 1978, regulated utilities must buy power from generators of renewable energy at a rate published by state utility commissions, the announcement said. That rate is currently about $64 per MW, and is called the avoided cost rate. It is intended to be based on the cost the utility avoids when it buys from a qualifying project, and thus does not have to generate the power itself or buy from another source.

IPCo. and other utilities question whether the current rate is truly based on avoided cost, since it does not take into account the costs the company incurs when it has to use its hydroelectric facilities as the backup for wind generation, the PUC release said. Wind can cost more for utilities when projected wind output is not met and the utility is forced to generate its own back-up power or buy from another more expensive resource.

After completing the wind integration study to be discussed at the March 15 meeting, IPCo. is asking the PUC for permission to return to the 10 MW size cap if wind developers agree to share in the cost of state-of-the-art wind forecasting services, include a guarantee in future wind contracts that demonstrates projects are mechanically capable of generating at full output during 85 percent of the hours each month, and agree to accept a discount off the rate to account for wind integration costs, the news release said.