Idaho PUC Re-affirms Two Year Contract Terms

On December 13, 2016, the Idaho Public Utilities Commission (Idaho Commission) issued an order approving a request by Idaho Power Company (Idaho Power) to affirm two-year contract terms and low capacity payments for larger qualifying facilities (QFs). The order applies to wind and solar QFs above 100 kilowatts and all other QFs above 10 megawatts (MW).  

Jackpot Solar sought to develop four 20 MW solar projects, but was unable to enter into power purchase agreements because of a number of disputed issues with Idaho Power. One key matter of contention was a disagreement between Jackpot Solar and Idaho Power regarding whether the solar developers are entitled to fixed capacity payments at the time of contracting, or if capacity payments (if any) would vary every two years. Many QF projects need fifteen to twenty years of fixed prices to obtain financing, and Idaho Power was only willing to provide two years of fixed prices.

The Idaho Commission agreed with Idaho Power on all disputed matters, concluding that large QFs, like Jackpot Solar, are only entitled to fixed energy and capacity payments for two years. After its two-year contract expires, then the QF can enter into a new power purchase agreement to obtain another two years’ of fixed capacity payments. QFs, however, are unable to lock in long term prices. The decision is one of a number of recent Idaho Commission decisions which have attempted to halt or slow down new QF development by lowering avoided cost rates, allowing fewer QFs standard contracts, and shortening contract terms.



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.