IPUC Reduces Wind Project Sizeby Patricia R. McCoy
Capital Press, August 12, 2005
Non-firmed wind projects can be no larger than 100 kilowatts to qualify for the special rate small-power producers are paid for such power by Idaho Power Co. and other regulated utilities in Idaho.
The Idaho Public Utilities Commission issued that ruling Aug. 4, in temporary settlement of a petition filed by IPCo. seeking a six- to nine-month suspension from its obligation to buy energy generated by qualifying wind-powered projects under the federal Public Utility Regulatory Policies Act, or PURPA.
The previous limit was 10 megawatts. The new 100 kilowatt limit brings Idaho in line with federal limits.
The ruling is disappointing, and in effect puts opportunities for rural wind power on hold, said Glenn Ikemoto, a principle of Energy Vision LLC, a Nevada-based corporation working in Idaho as Idaho Wind Farms LLC.
"The original process needs improvement. Projects that may not be realistic are taking up contract capacity. It's very difficult for the utilities and the commission to understand how much wind energy is going to be added to the system. I understand where they're coming from," Ikemoto said. "However, there's a better way to fix the problem than to reduce the size of projects that can qualify for PURPA. For all intents and purposes, there no longer are any wind power contracts.
"Hopefully there will still be opportunities for agricultural-based wind projects, but we aren't going to know that for awhile," he said. "The PUC left the case open for further study. Now is the time for agricultural leaders to get involved."
The opportunity is still there for would-be developers to make their case, he said.
"Wind energy development is a marathon, not a sprint. This is just part of it. I think the actual record of the hearing supported the wind developers. The situation is like a restaurant at which too many customers show up for dinner. You don't close the restaurant. Instead, you create a waiting list. That's what should be done in this case," Ikemoto said.
Idaho Wind Farms is still working on a proposed 80-turbine wind generation project near Grangeville. The firm is measuring the resource and looking at the economics.
The PUC ruling directs parties to the case to meet within two to three weeks and schedule some workshops and possible hearings to further explore the issues raised in the case, said Gene Fadness, commission spokesman.
The commission wants more time to study the impact of the wind projects on reliability for customers. The PUC will also examine whether the higher price paid for PURPA wind projects is beneficial for customers, who end up paying the cost of higher-priced energy.
"This commission is supportive of wind generation, and believes it is a proven renewable energy technology that can, when properly integrated and economically developed, be an important addition in the resource portfolio of Idaho's electric utilities," the PUC said in the ruling. "The concern we address in this order and case docket is the proper pricing of intermittent wind generation pursuant to federal obligation, and the related utility integration costs that we find may not be fully reflected in the published avoided-cost rates."
The 100 kw limit applies only to non-firm wind contracts, not all PURPA contracts. They are projects not backed up by an alternative energy source when wind fails to generate the amount of energy the developer commits to deliver to the power company, Fadness said in a written announcement of the ruling.
Non-firm projects that signed power purchase agreements with IPCo. before July 1, or which have submitted a completed interconnection application and paid the required fee, and which have taken other substantial steps to further their projects are exempt, he said.
PURPA was passed by Congress in 1978 in response to the energy crisis of the late 1970s. It requires electric utilities to offer to buy power produced by small power producers at an avoided-cost rate.That rate is equal to the cost the utility avoids if it had generated the power itself or purchased it from another source.
State PUCs establish that rate.
IPCo. sought the moratorium to address the growing number of intermittent wind proposals it is receiving. Company spokesmen argued at a July 22 hearing before the PUC that those proposals could impact the reliability of its transmission grid.
To safely integrate 1,000 megawatts of intermittent wind generation would require concurrently adding 640 megawatts of combustion turbines to provide capacity when wind resources were not operating, IPCo. spokesmen said.
Avista and PacifiCorp. (Utah Power) later joined the case, asking to be included in the moratorium.
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