Idaho approves 100 MW solar project

The Idaho Public Utilities Commission last week approved five 20-year power purchase agreements between Idaho Power Company and Boston, Massachusetts-based developer First Wind for delivery of approximately 250,000 MWh annually from five 20 MW PV plants.

According to the energy regulator, the average levelized rate for the projects is about 6.3 cents per kilowatt hour (kWh). The value of the five contracts is approximately $322.5 million over 20 years. First Wind expects to complete the projects in southern Idaho by the end of 2016.

However, in approving the contracts, Idaho energy regulators expressed concern that the federal law backing the five contracts – the Public Utility Regulatory Policies Act (PURPA) – "may be compelling utilities to buy energy they do not need."

In the last four months, Idaho Power has contracted with 13 proposed solar facilities backed by PURPA, which requires regulated electric companies to purchase power from independent renewable energy projects at rates established by state commissions.

The 13 projects total more than 400 MW, all of which are proposed to come on line by the end of 2016, before the expiration of the 30% federal Investment Tax Credit.

"Unfortunately, PURPA does not address and FERC [Federal Energy Regulatory Commission] regulations do not adequately provide for consideration of whether the utility being forced to purchase [qualifying facility] power is actually in need of such energy," the commission said in its order approving the First Wind contracts.

To date, there are no large-scale solar power plants operating in Idaho, which relied on hydroelectric dams to generate nearly 60% of its electricity in 2013, according to the Department of Energy.

In November, the commission approved two PV projects totaling 120 MW. The commission has not yet ruled on another six projects totaling 181 MW. Idaho Power also recently announced six contracts for 60 MW of PV in neighboring Oregon.

In November, SunEdison and its yieldco subsidiary TerraForm Power signed an agreement to purchase First Wind. The deal is expected to close in the first quarter of 2015.