IPC asks Idaho PUC for declaratory order defining solar project fees

The Idaho Power Company (IPC) requested on Friday that state regulators from the Idaho Public Utilities Commission (PUC) settle a dispute between IPC and a developer of four 20-megawatt (MW) solar projects proposed for construction along the Nevada border in southern Twin Falls county.

The projects fall under the provisions of the Public Utility Regulatory Policies Act (PURPA). PURPA requires utilities to buy energy from qualified renewable sources at a negotiated rate. The rate is defined as the cost that the utility avoids by not generating the power independently, or by purchasing energy from another source.

Developers of generation projects may receive one of two kinds of payment. An energy payment is paid based on the price of the energy at the time the energy is produced. A capacity payment is then paid in addition to an energy payment if the output occurs when the utility is capacity deficient.

IPC predicted that it will become energy deficient by approximately 2024. The developer of the four proposed projects wished to enroll in 10 consecutive two-year contracts, totaling 20 years. If the projects were approved, each would be eligible to receive capacity payments in 2024, even if the projected resource deficient date changed. Projects contracted this year would be eligible for capacity payments in 2024.

IPC claimed that capacity price is determined at the time of the initial two-year contract instead of to the beginning of the two-year term when the utility is capacity deficient. The developer claimed that the 2015 Idaho PUC order that shortened contract lengths for these kinds of projects to two years also decided that the deficiency date and the capacity rate are both defined during the time of the initial contract.