Existing Wind Projects Fare Well Under Public Utilities Commission Ruling, But There’s A Catch

Molly Messick / StateImpact Idaho

In four years, 30 wind farms were approved in Idaho. Before that boom, the state had just one.

The Idaho Public Utilities Commission today handed a key victory to wind developers currently operating in the state, but it did so while imposing an indirect limit on the amount of wind development Idaho is likely to see in the near future.

“There are very different implications for existing versus new wind developers,” the Idaho Conservation League’s Ben Otto said after reviewing the PUC’s decision. 

The ruling is about more than the wind industry.  It has implications for many different kinds of renewable power projects that sell power to the state’s regulated utilities.  But it was the extraordinary pace of wind development that led Idaho’s utilities — chiefly Idaho Power — to petition the PUC to reevaluate some of its existing rules.  The utilities argued the sudden proliferation of wind farms in the state would result in higher electricity prices for Idaho customers.

In one part of its decision, the Public Utilities Commission gives the wind industry an unadulterated win.  It affirms that utilities must honor their obligations to purchase power from wind farms, even if those wind farms are producing a great deal of power at times when customer demand is light.  The state’s utilities had proposed to curtail generation from some wind projects at times of low demand.

“For existing wind projects, the threat of curtailment has been lifted, and that’s got to be a real relief for them,” observes Peter Richardson, a Boise attorney who represents many wind developers.

The PUC’s decision also says that wind developers may keep all or half of the Renewable Energy Certificates (RECs) associated with their wind projects, depending on the projects’ size.  Renewable Energy Certificates are tradable credits that represent the environmental benefit of renewable energy, and give it market value.

According to Richardson, that aspect of the ruling is not as positive, from a wind developer’s perspective.  “Wind and solar larger than 100 kilowatts lose half of their RECs,” he explains.  And as Richardson points out, a 100 kilowatt wind project is extremely small.  Single wind turbines are often 1,500 kilowatts.

That brings us to the part of the ruling that Richardson says will no doubt put would-be wind projects on hold in Idaho.  In order to qualify under a federal law (called the Public Utility Regulatory Policies Act, or PURPA) that requires utilities to purchase their power, wind and solar projects must be no larger than that 100 kilowatt limit.  That’s much, much smaller than the previous size limit.

Richardson says it’s a determination that’s representative of Idaho’s “continued war on wind and solar.”  But he also says the ruling is, on the whole, a good one.  “I thought it was overall a very positive order for renewable energy in the state,” he says.  “It’s very positive if you’re developing a canal drop, if you’re developing a dairy digester, if you’re building a cogen facility.”

Idaho Power’s initial response to the PUC’s decision was also positive.  “While we don’t agree with every conclusion in the order, we believe that it’s a step in the right direction,” spokesman Brad Bowlin said.

“The commission has essentially provided a new framework under which future renewable energy projects will be developed in Idaho, and we’re evaluating the order as a whole to determine how all of the various pieces will work together and what the impact will be.”