Wind industry setback won’t derail PUC process 

Idaho’s wind industry suffered a setback but didn’t die as a result of a tax incentive failing in the state Legislature.

Lawmakers killed a bill that would have extended a sales-tax rebate set to expire June 30.

“It’s very important to the financials,” said Peter Richardson, an Eagle-based attorney who represents wind developers. “Six percent of the capital cost of a project is a huge number.” Losing the sales-tax rebate will push wind projects to states that don’t impose sales tax on renewable-energy equipment, he said.

But Idaho’s moratorium on wind projects remains temporary. The Legislature, which adjourned April 7, did not pass a bill that would have made the Idaho Public Utilities Commission’s temporary restrictions on wind projects permanent. The PUC’s case on the restrictions would have been moot but instead continues.

“As far as the PUC is concerned, nothing has changed,” commission spokesman Gene Fadness said.

The commission plans a hearing May 10 on big companies breaking wind projects into small units to qualify for commission-posted rates under the Public Utilities Regulatory Policies Act. Idaho Power, Rocky Mountain and Avista say the trend has led to development of many small projects that will stress infrastructure and increase costs. Utilities must buy power from PURPA-qualified projects.

In February, the commission substantially reduced the size of a wind project that could qualify for rates it posts under PURPA while it considers the utilities’ case over so-called “disaggregation” of projects. Developers have said the new size limit is a moratorium because projects that small would not be profitable.

Commission-posted rates reflect the cost the utility avoids by buying power from a PURPA project instead of generating the power itself or buying it from another source.

“It’s our view that disaggregation is not a problem if the avoided-cost rates are accurately set,” Richardson said.

Idaho Power wants the commission to address disaggregation as well as pricing, spokeswoman Stephanie McCurdy said. The company believes it now must pay too much for power that is intermittent and not always needed, she said.

Wind projects too big to qualify for posted rates must negotiate a rate. Negotiated rates aren’t always lower than posted rates, McCurdy said.

Commission Engineering Supervisor Rick Sterling, in an exhibit filed in the disaggregation case, proposes the commission establish criteria to determine if a project is “single” rather than aggregated.

His proposal restores the pre-moratorium power limit. Wind projects would not qualify for posted rates if they exceed the limit. Multi-turbine projects at or below the power-output limit would qualify for posted rates even if they share things like ownership, interconnections, financing and government permits with other projects.

The Legislature considered, but did not pass, a bill that would have restricted where turbines are placed in relation to residential property boundaries.

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