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Fed-Up Feds Take Idaho PUC to Court Over Wind Contracts

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Frustrated at having to review multiple complaints against the Idaho Public Utilities Commission’s handling of wind power contracts, the federal government’s energy regulator will now take the PUC to court to settle things.

The fight over whether utilities must accept the power from certain wind projects at a price set by the PUC boiled over with FERC’s decision to sue Idaho in hopes of solving what has become an ugly battle with wind developers on one side and the PUC with Idaho’s big three electric utilities on the other.

At issue is Idaho’s implementation of the federal Public Utility Regulatory Policies Act (PURPA). The law was passed during the 1978 energy crisis to spur development of smaller renewable energy projects, and requires utilities to purchase the power produced by small-scale renewable energy projects under rules set by the state.

After dealing with multiple complaints lodged by wind developers who saw their contracts denied by the PUC in 2011, FERC took a look at the most recent Idaho case and concluded, “We intend to go to court to enforce PURPA.”

Idaho Power, backed by the other utilities, complained for years about having to buy  “intermittent” wind power at prices that are artificially high and at times when the power isn’t needed. Wind farm developers counter that, over the life of their 20-year contracts, the price they receive is cheaper than other forms of energy purchased by the utilities.

In the most recent cases that led to this FERC blow-up, the PUC ruled in 2010 that utilities only needed to pay PURPA prices and sign PURPA contracts for renewable projects that are 100 kilowatts or less, an amount so small compared to the pre-2010 10 megawatt threshold that no renewable energy project could qualify for the more favorable contracts. The PUC then said any contract submitted by developers and the utilities after Dec. 14, 2010, would be bound by the new, more restrictive rules.

In this case, the developer of three separate Murphy Flat wind farms said he reached agreement with Idaho Power before the deadline, but the company didn’t submit it to the PUC until Dec. 15 – one day too late. So the PUC rejected those contracts, as well as more than a dozen others submitted after Dec. 15.

The wind developer appealed to FERC, which determined the contracts were legally binding and valid regardless of whether they were formally submitted to the PUC after its deadline.

In earlier cases out of Idaho, FERC scolded the PUC for misinterpreting PURPA but declined to initiate legal action against the state as requested by the developers. A suit like this is almost unheard of.

This case is part of a much larger set of renewable energy contract and pricing issues brought to the PUC by Idaho Power and the state’s two other big electric utilities, Avista and Rocky Mountain Power. The PUC is reviewing a number of issues related to wind and solar contracts and on how much utilities should be required to pay to developers under the PURPA rules. The PUC case is expected to begin producing Commission decisions in the very near future.

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