Idaho Public Utilities Commission cuts renewable energy contracts from 20 years to 5 years

EnergyAssociated Press

The Idaho Public Utilities Commission has reduced the length of federally mandated contracts Idaho Power signs with renewable energy projects such as solar and wind farms from 20 years to five years.

The commissioners approved the change Thursday, and it will be in place until the commission decides on Idaho Power's request to reduce the contract length to two years.

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The Public Utilities Regulatory Policies Act, or PURPA, created in 1978 is intended to promote alternative resources. It requires power companies to buy electricity at a state commission-approved rate from qualifying small power production facilities.

The federal law allows states to determine the length and terms of the contracts.

Idaho Power said being forced to buy power from renewable energy projects could cause customers to pay more. The company also said there are more companies wanting to sell renewable energy power than it needs.

The company said it has PURPA contracts for 461 megawatts of solar energy and another 885 megawatts of PURPA solar capacity from companies seeking sales agreements.

The company said the 20-year contracts for what are called qualifying facilities, or QFs, put undue risk on customers.

"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 QF power is actually in need of such energy," the commission said in approving six solar projects in January.

Commission spokesman Gene Fadness said in a statement that dates will be announced soon for future hearings and customer comments about the plan to cut contract lengths.

Also Thursday, commissioners granted the right to intervene to the Idaho Conservation League, Intermountain Energy Partners, J.R. Simplot Co. and the Snake River Alliance. That means the entities will be able to present evidence, cross-examine witnesses and participate in settlement discussions concerning contract lengths.