Idaho regulators approve 10MW biomass power deal

November 8, 2010

Idaho regulators have approved a 10-megawatt biomass power contract against the advice of their own staff.

The Idaho Public Utilities Commission gave the go ahead last week to a 15-year power purchase agreement between Boise-based utility Idaho Power Company and developer Yellowstone Power, Inc..

Yellowstone is developing a $6 million biomass power plant at a new sawmill in Emmett, Gem County.

The 11.7 MW nameplate facility will generate both heat and power for the Emerald Forest Sawmill, using woody biomass as a fuel.

The Commission noted that the combined heat and power project would provide “steady, predictable generation for Idaho Power around the clock”.

Averaging no more than 10-megawatts output each month, the contract will be based on Idaho’s program under the federal Public Utility Regulatory Policies Act (PURPA), which allows utilities to buy power from small renewable energy projects at an “avoided cost” rate determined by the Commission.

“Troubled”

Back in March, the Commission lowered its published price for PURPA contracts by about 10%, in response to market conditions. Idaho Power and Yellowstone had based their contract on the previous price, arguing that they had been discussing the contract all through 2009, and that an agreement was essentially in place before the rates were lowered.

Commission staff said last month they were unsure whether the project was far enough along when the price was lowered to be eligible for the old price because there was no written evidence the deal was struck before the price change.

The Commissioners said last week that they were “troubled” by the lack of documentation, but decided the contract could be approved. The regulators are responsible for ensuring Idaho ratepayers do not pay too much for utility power.

The Commission stated: “There is no reason to question the representations of Idaho Power and Yellowstone as to when contract negotiations of the parties occurred.”

The ruling on the contract is open for petitions for reconsideration, which must be submitted by November 23.