Commission approves Idaho Power wind contract with Montana firm

State regulators have approved an energy sales agreement between Idaho Power Co. and a Montana wind farm.

The 20-year contract, the first between Idaho Power and a wind generating facility, is with United Materials of Great Falls, Inc., a 9-megawatt wind facility. The Idaho Public Utilities Commission said Friday the contract is new territory for the panel.

By The Associated Press

http://helenair.com/articles/2004/05/01/montana/a04050104_04.txt

‘‘It remains to be seen whether this approach for purchases of renewable energy is in the public interest,” the commission said Friday.

The approval sets no precedent for the commission’s future regulation of such agreements, and does not preclude negotiating parties from challenging such contract terms in future agreements, the commission said.

The pact has different features than the Boise-based company’s agreements with other small power producers.

Typically, small power projects that qualify under the federal Public Utilities Regulatory Policies Act are guaranteed a published rate set by the Idaho commission. They also are based on the cost the regulated utility avoids by not having to generate the power itself or buying it from another source.

But because the output of wind generation is unpredictable, Idaho Power required United Materials to reimburse it when wind production falls to 90 percent or less of its promised delivery. Idaho Power also has to pay more than the contract terms for replacement power.

If the wind generation exceeds 110 percent of a month’s estimated kilowatt-hours, Idaho Power will pay United Materials a market-based price for that surplus.

The power generated at United Materials is outside Idaho Power’s service territory.

NorthWestern Energy, which operates in Montana, has agreed to carry the electricity to Idaho Power over its transmission lines.

The commission said it was pleased that the company is adding a wind project to its resource portfolio. It is accepting public input until May 14.