Dive Brief:

• The Idaho Public Utilities Commission reduced from 20 years to five the length of federally mandated contracts Idaho Power signs with developers of intermittent, renewable energy projects.
• The commission is already considering a request by Idaho Power to reduce the contract length to two years, the Statesman reports.
• Idaho Power told regulators continued creation of 20-year contracts places risk on customers at a time when the utility already has sufficient resources to meet customer demand.

Dive Insight:

Idaho regulators are continuing to manage power contracts mandated under the Public Utility Regulatory Policies Act (PURPA), and in the last three months have approved PURPA contracts for 400 MW of solar energy. Idaho Power claims it has an additional 885 MW of PURPA solar capacity in the queue actively seeking energy-sale agreements with 2016 on-line dates, but that the longer contracts can inflate power supply costs and hurt system reliability.

While the commission considers the utility's request to limit contract length to two years, regulators opted to go ahead and reduce the terms to five years. Commissioners said the case should be processed quickly "to give project developers certainty and ensure customers do not pay more for PURPA power than what they would for power generated by the utility or bought from other sources," according to a PUC statement.

The commission recently concluded a major review of PURPA contract terms and conditions and updated how it calculates avoided-cost rates. Developers continue to request contracts with Idaho Power in significant enough numbers “that we remain concerned about the company’s ability to balance the substantial amount of must-take intermittent generation and still reliably serve customers,” the commission said in a January 8 order approving six solar projects.

“Unfortunately, PURPA does not address and FERC regulations do not adequately provide for consideration of whether the utility being forced to purchase [renewable] power is actually in need of such energy,” the commission said.