Dive Brief:

• PacifiCorp subsidiary Rocky Mountain Power has asked Wyoming regulators to approve cuts to the rate the utility pays small qualifying facilities under the Public Utility Regulatory Policies Act (PURPA), arguing that wholesale power prices are low and natural gas is cheap.
• The proposed cuts are already built into the contracts of certain small QFs, an RMP spokesman told Utility Dive in an email, and are separate from the wider debate over PURPA contracts occurring in Western States.  RMP proposed to decrease the 20-year levelized avoided cost from $52.15/MWh to $31.48/MWh. 
• PacifiCorp, which is owned by Warren Buffett's Berkshire Hathaway, proposed shorter contract lengths in 2016 for PURPA QFs in Wyoming, but the Public Utilities Commission told the utility to collaborate with stakeholders and come up with a solution. So far, the collaboration is still ongoing. 

Dive Insight:

The proposed avoided cost prices are $25.64/MWh, $29.65/MWh, and $31.51/MWh on a 20-year (2018-2037) nominal levelized basis for a wind, fixed solar, and tracking solar facilities, respectively.

The reduced costs are "primarily due to the March 31, 2017 Official Forward Price Curve that includes lower wholesale power and natural gas market prices," the utility said. In addition to the forward price curve, RMP said it used the wind and solar integration costs, the capacity contributions for both wind and solar resources, and the resource sufficiency and deficiency periods that relate to capacity contribution costs, to develop the avoided cost rate.

RMP claims the fixed-price contracts are effectively renewable subsidies that will ultimately be paid by ratepayers in the long term. But these QFs differ from their larger counterparts in that the agreement to review and adjust the avoided cost rate is baked into the contract. However, RMP is involved in debating PURPA contract lengths in Wyoming, but has moved over working with stakeholders to come up with a mutual solution.

Debates over PURPA contracts are not new in the West, and PacifiCorp has been a key player in nearly all of them. Idaho regulators trimmed PURPA contract lengths from the standard 20-25 years to two years in 2015. But Utah utility regulators were more skeptical and voted last year to reject Rocky Mountain Power's bid to shorten PURPA contracts from 20 years to three years, instead trimming it to 15 years. 

PURPA was initially signed into federal law in 1978 to ensure utilities were sourcing power from a diversity of companies and resources and subsequently succeeded in creating opportunities for more renewable energy down the road. Fights over PURPA are not confined to PacifiCorp territory; Duke Energy is currently engaged in a debate in North Carolina over slashing contract remuneration rates and establishing itself as a potential bidder for contracts.