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Utility seeks to compensate balancing costs
1 April 2007
Idaho Power wants small wind power developers to absorb some of the costs of integrating wind into its electricity mix. The company has asked the state's Public Utilities Commission (IPUC) to reduce the megawatt hour rate of $64 that it must to pay to the small projects. While the request has raised some eyebrows, the company says that it incurs extra costs because it must use other sources to back up wind power during times of minimal wind. The company is asking to have the fixed purchase rate reduced to $48/MWh. A federal law, the Public Utility Regulatory Policies Act (PURPA) of 1978, requires regulated utilities to buy renewable energy from small operations. The IPUC is required to set the payment rate based on avoided costs -- the amount that would be paid for electricity from another source. Idaho Power has PURPA contracts for 227 MW of wind projects, along with another 60 MW pending. Integration costs for large wind power sources are negotiated. Much of the state's power comes from hydroelectric sources, which should make wind energy cheap to integrate. "In our opinion, Idaho Power took some premature data and submitted it to the IPUC," says Rachel Shimshak of the Renewable Northwest Project, a Portland-based renewables advocate. "We want them to do a thorough job with a peer review so everyone can feel good about this." An upcoming period of public comment is expected to help sort out the issue.
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