No Compromise 

Idaho Power gets 100 percent of request to dial down solar contract terms

Ben Otto said he wasn't surprised. The Idaho Conservation League's go-to expert on alternative energy projects—and particularly the legal wrangling it takes to make large-scale solar energy production a reality—Otto was frustrated, but not exactly shocked.

"Not surprised, but absolutely disappointed," he told Boise Weekly. "I had a bad feeling the Idaho Public Utilities Commission was going to rule 100 percent in favor of the utilities."

Otto's disappointment came a short time after the PUC handed down its much-anticipated ruling Aug. 20 that it would grant a request from Idaho Power, PacifiCorp and Rocky Mountain Power to reduce the length of any new solar contracts from 20 years to two years.

"It's exactly what the utilities asked for. I thought maybe there might be some concession to maintain a semblance of renewables in Idaho," said Otto. "But no, and to that end I guess I am a little bit surprised."

The issue is related to the federal Public Utility Regulatory Policy Act, or PURPA, which requires utilities to purchase renewable energy from sources such as solar, wind and hydroelectric power generators. As a result, dozens of alternative energy developers have cued up to put more renewables into Idaho Power's massive grid. It's up to state regulators like the PUC to determine what those contracts between utilities and developers look like.

"We already have, under contract, 400 megawatts that will be coming in from new solar projects next year," Idaho Power attorney Donovan Walker told BW this past spring. "Then on top of that there's another 900 MWs from proposed contracts. To put that in perspective, that's larger than our entire Hells Canyon three-dam complex. It exceeds the total load on our system."

That's why Idaho Power turned to the PUC, asking that future contracts be dialed down from 20 years to 24 months. The proposal prompted a marathon public hearing on June 24, in which every witness, representing every corner of Idaho, begged the commission to maintain 20-year contracts in order to encourage more renewables in the Gem State.

"[Idaho Power] chooses to be on the wrong side of environmental health and the wrong side of history," said self-described alternative energy promoter Reed Burkholder.

"Our state is blessed with clean, renewable resources and we should embrace them," said Rebecca Bundy, senior planner at the city of Ketchum's Department of Planning and Building.

"The Public Utilities Commission and Idaho Power have an ethical responsibility to open all pathways to environmental renewables," said Ketchum artist Karen McCall.

"Idaho Power simply needs to work a little harder on this," said Pocatello-based engineer Brian Formusa.

In its Aug. 20 ruling the PUC was having none of it, saying instead that 20-year contracts with renewable energy developers would trigger "unreasonable costs" which were "contrary to PURPA's avoided-cost principle." Instead, the commission ruled that two-year contracts would "maintain a more accurate reflection of the actual costs."

Otto insisted that the ruling will doom future alternative energy developers in Idaho.

"I continue to talk to developers and those who could finance them, and they have consistently told me that a two-year contract is a non-starter," he said. "They say it's not even worth talking about."

PUC commissioners were quick to say that they had a long history of encouraging PURPA-related projects and renewable energy development in Idaho. For its part, Idaho Power said it has experienced a six-fold increase in PURPA generation since 2007.

"All that said, we have a public utilities commission that has tended to side with utilities over and over," said Otto. "But when you read the news, you see businesses and homes and even utilities across the nation that are moving toward renewable energy. In this case, we had a question of whether Idaho would follow that path or stay in the past. I think we got our answer."

Otto added that any possible appeal to the ruling would prove challenging.

"The next step might be an appeal to the Idaho Supreme Court or even the Federal Energy Regulatory Commission—in effect, they're the nation's PUC, "he said. "A possible appeal is a very complicated question that we're still trying to find an answer to. I thought it might be easier, but it turns out that any such appeal would be very hard."

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