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Idaho Power to Tap Montana Wind Farm by Dave Wilkins, Idaho Staff Writer Capital Press, May 7, 2004

Idaho regulators last week approved an agreement between Idaho Power Co. and a planned wind farm in Montana.

Under the 20-year agreement, the Idaho utility will buy power from United Materials, a nine-megawatt wind energy facility west of Great Falls.

Construction of six 326-foot-tall wind turbines is expected to begin this summer.

The power generated by the facility is outside of Idaho Power’s service territory. Northwestern Energy has agreed to allow Idaho Power and United Materials to use its transmission lines to deliver the power.

Exergy Development Group of Missoula, Mont., will build the wind farm.

The same company is seeking a rezone of land in Elmore County, Idaho, for the purpose of generating wind energy. A public hearing before the Elmore County Planning and Zoning Commission was scheduled May 5.

The agreement between Idaho Power and United Materials was approved by the Idaho Public Utilities Commission under terms of the Public Utilities Regulatory Policies Act. The act requires utilities to buy energy from qualifying small power producers that generate power from sources other than fossil fuels.

State regulators said the contract includes some unique features not found in other agreements between Idaho Power and small power producers.

For that reason, the commission said its decision “sets no precedent for our future regulation of such agreements.”

Typically, small power projects that qualify under Public Utilities Regulatory Policies Act provisions are guaranteed a published rate that is set by the commission.

But because production of wind energy is unpredictable, Idaho Power included certain contingency provisions in the contract that will take effect when output drops below a certain level.

United Materials will be required to reimburse the utility when wind production falls to 90 percent or less of its promised delivery and Idaho Power has to pay more than the contract terms for replacement power.

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

State regulators noted that the terms and conditions of such contracts have yet to be challenged.

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

Idaho has lagged behind most other Western states in the development of wind energy, but several projects are in the works, including proposed sites in Elmore, Cassia and Bonneville counties.