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Idaho PUC Approves Previously Rejected Wind Energy Projects by Staff Renew Grid, December 27, 2011

The Idaho Public Utilities Commission (PUC) has approved sales agreements between PacifiCorp and three of five wind projects previously rejected by the PUC, but the projects may be moved from their original Bingham County location to the Meadow Creek wind farm location in Bonneville County.

Because of already available transmission at the Meadow Creek site, the power purchase agreements from three of the projects may be assigned to Ridgeline Energy, the PUC explains. If the Cedar Creek projects are assigned to Ridgeline, the scheduled operation date would be moved up to Dec. 31, 2012, which qualifies the projects to receive Treasury grants and other tax incentives before they expire.

In June, the commission declined to approve five sales agreements between PacifiCorp (Rocky Mountain Power in eastern Idaho) and Cedar Creek because, in the commission's view, the agreements were not submitted in time to meet the Dec. 14, 2010, date on which wind and solar projects had to be smaller than 100 kW in order to qualify for a rate published by the commission.

After the commission denied its petition for reconsideration, Cedar Creek petitioned the Federal Energy Regulatory Commission (FERC) to bring an enforcement action against the Idaho commission for failure to comply with the federal Public Utility Regulatory Policy Act (PURPA), which requires utilities to buy renewable power from independent generators at rates published by state commissions or rates negotiated between the purchasing utility and the independent generator. Cedar Creek also appealed to the state Supreme Court.

While it declined to bring an enforcement action, FERC's opinion was that the PUC order was inconsistent with PURPA. Consequently, commission staff, PacifiCorp and Cedar Creek engaged in four negotiation sessions that resulted in the agreement approved today by the Idaho commission. As part of the agreement, Cedar Creek agrees to dismiss its state Supreme Court appeal.

Even though two of the five projects will not be built, the output from the three remaining projects will be the same as was agreed to with all five original projects: an annual nameplate capacity not to exceed 133.4 MW, with an annual output not to exceed an average of 50 MW per month.

Ridgeline's Meadow Creek site is smaller but has more wind capacity than the Cedar Creek location. However, Ridgeline's site has only 80 MW of transmission capacity and will need to acquire another 40 MW of capacity to accommodate the former Cedar Creek projects. If no additional transmission becomes available, then part of the projects may revert to the Cedar Creek site.

In its order approving the three modified sales agreements, the PUC said the agreements are fair and reasonable to Cedar Creek, Rocky Mountain Power and ratepayers. The utility and ratepayers are protected because the amount of power the utility will be obligated to buy under PURPA is no more than what was originally contemplated with the five wind projects.

Further, customers will benefit from any revenue created by the sale of renewable energy credits (RECs).

"This is an improvement over the original purchase power agreements, because the assignment of the environmental attributes or RECs was not clearly delineated in the original agreements," the PUC says.