NorthwestMarch 26, 2012

Idaho Public Utilities Commission suspends contracts pending review of rate requirements

Associated Press

Associated Press

BOISE - The Idaho Public Utilities Commission has denied a request by Idaho Power Co. to suspend a requirement that the utility buy power from alternative energy producers.

But the commission last week also eliminated standards that determine how much alternative energy developers are paid by the utility, a practice Idaho Power said increases costs for customers.

Officials told the Idaho Business Review that the new system will be in place until the commission can resolve the current rate-setting case, scheduled for this fall.

"It's a back-handed win," said Peter Richardson, a Boise attorney who represents alternative energy developers. Those range from stand-alone wind and solar projects to energy projects involving J.R. Simplot Co. and Clearwater Paper.

Idaho Power said pausing new power contracts until the fall will avoid locking in contracts that could have inflated prices for two decades.

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"The likelihood of risk or harm to the customers is substantial, great and long-term," said Donovan Walker, an attorney for Idaho Power. "That in and of itself justifies a temporary stay while the commission determines what the proper lawful rate is."

The federal Public Utility Regulatory Policies Act, or PURPA, requires utilities in specific circumstances to buy alternative energy. The act is intended to increase production of renewable energy.

But last summer, utilities including Rocky Mountain Power, a subsidiary of PacifiCorp, and Idaho Power Co., the state's biggest utility, complained to state regulators that developers were gaming the system - splitting up what otherwise would be big wind developments into smaller projects that were eligible for contracts mandated under PURPA.

Rocky Mountain Power and Idaho Power sought to stop the wind projects, contending they would lead to a hike in customers' power costs. In its ruling last week, the Idaho Public Utilities Commission declined to end the requirement that Idaho Power buy power from alternative energy developers.

Mack Redford, PUC commissioner, said the decision made by the commission was essentially a temporary restraining order.

However, fellow commissioner Marsha Smith said she didn't think the PUC had the power to take an action that conflicted with federal law.

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