Regulators at the Idaho Public Utilities Commission have approved a one-year energy sales agreement between Idaho Power and J.R. Simplot Company's fertilizer plant in Pocatello.
Power generated at the plant comes from heat or steam that is the byproduct of a fertilizer manufacturing process. The contract calls for an average of 10 megawatts of electricity per month, though the plant can produce as many as 15.9 megawatts per month.
Regulators have determined that Simplot's facility qualifies as a renewable energy generation project under the Public Utility Regulatory Policies Act of 1978, or PURPA, which requires utilities to purchase energy from renewable generation projects at regulator-established rates.
The PUC has approved a proposed rate of $52.72 to be paid to Simplot in 2015, and $52.28 in 2016, though these rates will vary during heavier and lighter load hours, days and seasons over the course of the year.
In February, the PUC reduced the timeline for some PURPA contracts from the previously set 20 years to five years. Idaho Power, meanwhile, is trying to convince the PUC to further reduce those contracts to two years.
According to the PUC, the utility company contends that 20-year contracts requiring the purchase of "intermittent, renewable energy" places "undue risk on customers at a time when ... it has sufficient resources to meet customer demand."
What's more, "the company claims acceptance of the contracts will inflate power supply costs and negatively impact the reliability of its energy delivery system."
Read the contract ruling below.
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