Idaho Commission Limits PURPA Contract Terms

On August 20, 2015, the Idaho Public Utilities Commission (Idaho Commission) issued an order shortening the contract term for certain new and renewing qualifying facilities (QF) to two years. The decision is a major loss for wind and solar QFs, and all projects sized 10 megawatts (MW) and above. Non-wind and solar QFs under 10 MWs will remain eligible for long term contracts at published avoided cost rates. It is likely that the Idaho Commission’s order will significantly reduce the development of new wind and solar in Idaho, which was experiencing record growth.  

Idaho Power Company (Idaho Power), Avista, and Rocky Mountain Power petitioned the Idaho Commission to reduce the length of its new PURPA contracts for projects that exceed the published rate eligibility cap. The published rate eligibility cap is 100 kilowatts for wind and solar, and 10 MW for all other generation sources. Projects over the cap must negotiate their avoided cost rates based on utility computer models, and their avoided cost rates are generally lower than those for small QFs.

The Idaho Commission’s final order may significantly harm wind and solar QFs, as well as baseload QFs above 10 MWs. The Commission rejected arguments that PURPA requires a minimum contract term and concluded that a twenty year term was no longer reasonable or in the public interest for most new QFs. The Commission, however, denied Rocky Mountain Power’s proposal to shorten the contract term for all QFs, including those below the rate eligibility cap. The majority of the QFs operating in Idaho are hydroelectric projects below the rate eligibility cap, which will remain eligible for twenty year contracts.

The Order can be found HERE

 

Disclaimer

These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.