BOISE — The Federal Energy Regulatory Commission says Idaho Power's long-term purchase agreement with wind farms means that it must buy electricity from the farms even when demand for power is low.
The commission's decision, reached Thursday, is good news for Idaho wind farms but a loss for the state's largest utility.
"Basically our position at this point is we're examining FERC's order and evaluating our options," said Idaho Power spokesman Brad Bowlin.
Idaho Power officials have contended that the Public Utilities Regulatory Policies Act, or PURPA, should allow them to halt otherwise contractually required electricity purchases during periods of light load, such as during the night in the spring and fall.
The utility company said the requirement to buy from wind farms even during times of light demand forces them to back down other energy generators like coal-fired plants to balance the power system, and that bringing the other systems back up when demand increases costs the utility more — and those costs are passed on to consumers.
But wind developers maintained that PURPA only allows utilities to limit their output during operational emergencies, and that Idaho Power was trying to sway public opinion by unfairly basing their cost arguments on historically low natural gas prices. Longer-term pricing models are actually the proper comparison, the wind farms argued.
The Idaho Public Utilities Commission hadn't yet ruled on the plan, so state regulator officials argued to FERC officers that the matter simply wasn't ripe for federal review.
Idaho Wind, a wind energy company with 11 subsidiary project companies in Idaho, told the federal commission that the Idaho Power plan would violate PURPA and expose the wind farms to immediate financial harm. Each of the farms has a 20-year agreement with Idaho Power that has already been approved by state regulators.
The federal regulatory commission found that PURPA doesn't allow a utility company to unilaterally curtail electricity purchases during times of light load.
Moreover, the federal regulators emphasized, those purchases are part of long-term power purchase agreements, and when those agreements are created they reflect the costs that each party anticipates over the life of the contract in a variety of circumstances, including light loads. In other words, Idaho Power likely considered those costs — or at least should have — when it entered the agreements with the wind farms in the first place.
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