Letters From the West

Idaho PUC gives solar developer a week to make case

grand solarThe Idaho Public Utilities Commission continues to sort out issues between Idaho Power and renewable energy developers created before it resolved how to meet a federal law that requires electric utilizes to buy private power.

The three-member commission gave Grand View PV Solar a week to show it was willing and able to sign a contract to supply power to Idaho Power Co. in 2011. The federal Public Utility Regulatory Policies Act, or PURPA, requires utilities to buy energy from qualifying small renewable power projects at rates to be determined by state commissions.

In December the commission that regulates the state’s three monopoly electric utilities limited the size of wind and solar plants eligible for a simple published power price to only 100 kilowatts, forcing larger developers to negotiate with utilities on rates and credits. The commission ruled that renewable energy credits (RECs) worth millions of dollars should either go to the energy developer or be split with the utility, depending on the contract.

But before the issue was resolve in 2012 Idaho Power and the developers were arguing over nearly every aspect of the contract. The developer of the Grand View solar project in Elmore County claims his project was ready to provide energy to Idaho Power, but the parties did not sign a sales agreement because they could not agree on who should receive the financial benefits of the Renewable Energy Credits RECs associated with the project.

Grand View argues that the dispute as to who should keep the revenue from the RECs is separate from whether Idaho Power is obligated under PURPA to buy output from the solar plant. The commission denied Grand View’s motion for a declaratory order, stating that the manager of the project said that RECs are an integral part of the project’s financial viability and that without the revenue from the RECs, the project was not ready to sell energy to Idaho Power.

In an affidavit filed with the commission, Paul said the project’s business plan is based upon selling all the RECs associated with the project and that without the ability to sell the RECs, the “project’s financial viability will be compromised.” He also said the project’s profitability and his ability to raise the capital necessary to build the project would also be compromised.

“We find these statements undermine Grand View’s argument that it was willing and able to mutually obligate itself to supply power,” the commission said.
So Grand View has to show it created a legally enforceable obligation without conditions, including retaining all REC benefits, “then it may present such evidence to the commission within seven days,” of the order’s July 29 date.

The commission denied another request by Grand View Solar Two that the December 2012 commission decision to split RECs evenly between utilities and solar and wind projects not be applied to this case because the proposed sales agreement was offered in 2011.

Looking over the commission’s shoulder will be the Federal Energy Regulatory Commission, which enforces PURPA. In similar cases from that same era, FERC has initiated enforcement action against the state commission and even filed civil suits on behalf of renewable developers arguing it violated the federal law by not protecting the developers’ access to sell their power.

Rocky Barker is the energy and environment reporter for the Idaho Statesman and has been writing about the West since 1985. He is the author of Scorched Earth How the Fires of Yellowstone Changed America and co-producer of the movie Firestorm: Last Stand at Yellowstone, which was inspired by the book and broadcast on A&E Network. He also co-authored the Flyfisher's Guide to Idaho and the Wingshooter's Guide to Idaho with Ken Retallic. He also was on the Statesman’s team that covered the Sen. Larry Craig sex scandal, which was one of three Pulitzer Prize finalists in breaking news in 2007. The National Wildlife Federation awarded him its Conservation Achievement Award.

Posted in Letters from the West