20030331Press Release.pdf

IDAHO PUBLIC UTILITIES COMMISSIONCase No. GNR-03-, Order No. 29216F or Immediate Release / March 28 , 2003Contact: Gene Fadness [phone]Commission denies independent producers ' requestBOISE - By a 2-1 vote, the Idaho Public Utilities Commission today declined a request by theIndependent Energy Producers of Idaho that larger independent power proj ects be able to qualify forpublished contract rates.
Currently, only renewable projects that generate up to 10 megawatts can qualify for the rates , often
called PURP A rates. The Independent Energy Producers of Idaho asked that proj ects up to 30 MW qualify
for PURPA rates.
The energy crisis of the late 1970s prompted Congress to pass the Public Utilities Regulatory
Policies Act, or PURP A. Its purpose is to encourage the development of renewable energy technologies as
alternatives to burning fossil fuels or building new power plants. PURP A requires that electric utilities offer
to buy power produced by qualifying small power producers or cogenerators. Some cogenerators , such as
R. Simplot Co., produce power as a byproduct of timber or potato processing or other types
manufacturing. State commissioners set the rate that utilities must pay small power producers for the power
they generate. That rate, called "avoided cost rate " is to be equal to the cost the electric utility avoids by not
generating the power itself.
Last year, the commission agreed to a request by current and potential PURP A developers to extend
the contract length of PURP A projects from five to 20 years and increase the size of projects that can qualify
for PURPA rates from one megawatt to 10 megawatts. (One megawatt, or one million watts , is enough
energy to power about 800 homes.
The Independent Energy Producers of Idaho claim that the 10 MW limit is still not big enough to
allow energy producers to recover their investment in energy projects. IEPI noted that only one PURP
contract has been signed in the nine months since the commission increased the size limit from 1 MW to MW. IEPI contends the commission is to proactively encourage development of renewable sources as ameans of diversifying the national energy portfolio, making it less dependent on foreign sources.Commission President Paul Kjellander and Commissioner Dennis Hansen voted to deny IEPI'request, saying more time is needed to gauge the response from last year s increase. Further, thecommissioners said, independent producers larger than 10MW can still negotiate individual contracts withutilities. If the parties cannot agree on a rate, either can file a complaint with the commission.In her dissent, Commissioner Marsha Smith said IEPI's contention that the effect of an increase inproject size to utilities and consumers is inconsequential merits further examination and public comment.Development of renewable resources not tied to natural gas as a fuel source would help avoid additionaldemand for natural gas and the associated upward pressure on rates for that commodity," Smith said. "would also add to the diversity in the resources available for electricity production in our state and region.Copies of the order are available on the commission s Web site at www.puc.state.id.. Click onFile Room " and then on "Recent Orders and Notices " and scroll down to Order No.29216. Petitions forreconsideration must be filed with the commission by no later than 21 days of the service date of the order.END