The federal law that helped 30 Idaho wind projects get underway over the last four years was initially championed by an entirely different breed of business: timber companies, canal companies, and Simplot. That adds a twist to a story that is, on its face, about a dispute between the renewable energy industry and utilities, primarily Idaho Power.
StateImpact recently reported on the Public Utility Regulatory Policies Act, or PURPA. It’s a federal law, but implemented at the state level. It was passed in the late ’70s, on the heels of the oil crisis.
The intent was to spur domestic energy production and give independent energy producers leverage in a system dominated by traditional, regulated utilities, which function as monopolies. To that end, PURPA forces utilities to accept power from independent producers, as long that alternate power source is cost-neutral.
When PURPA was signed into law, ears pricked up here in Idaho. By 1990, J.R. Simplot had set about building co-generation plants that would convert waste heat into steam needed for potato processing, and into electricity. Canal companies — which manage and deliver irrigation water — began to use canal drops to generate hydroelectric power which they could sell to the utilities.
Lawyer Peter Richardson, who now spends much of his time representing wind producers, graduated from law school and took a job with the Idaho Public Utilities Commission (PUC) not long after PURPA passed.
He says the fact that traditional Idaho industries were the first in the state to establish independent power projects complicates the traditional relationship between those industries and the utilities.
“Traditionally you wouldn’t think that there’s a dissonance between ag and the utility,” Richardson says. “But there is in this state. There’s a dissonance between the utility and manufacturing,“
Tom Arkoosh, a lawyer who represents canal companies, describes the relationship somewhat differently. The canal companies and Idaho Power get along just fine, he says. “We’ve made an effort to distinguish ourselves from what the utilities perceive as their problem.”
In other words, the current disagreement over the large number of wind projects Idaho Power has had to accept and how PURPA should be implemented in Idaho is primarily between wind producers and Idaho utilities. But the first businesses to make use of PURPA — traditional and quintessentially Idahoan businesses like Simplot and the canal companies — have a good deal at stake in the case that’s now before the PUC.
“We’re just caught up in the maelstrom,” Arkoosh says. “We don’t perceive ourselves as the focus of this proceeding, but we do perceive that it could have a huge material effect on us.”
Among other things, the utilities are petitioning to dramatically shorten the length of power purchase agreements with independent producers. The PUC has also agreed to temporarily reduce the upper size limit of the independent projects that may take advantage of a streamlined process for supplying power under PURPA.
“The parameters could change, and how that could affect us is a concern,” Arkoosh says. “Whether it’s a 20-year contract or a five-year contract is concerning. The eligibility cap has a material effect on the development of projects.”
Arkoosh says these are simply a new iteration of old tensions between the utilities and independent power producers.
“I did some of the first contracts in the ’80s,” he says, “and these are precisely the same issues that we were rolling around in the mud about 30 years ago. Ultimately this is about who is going to build the generation.”