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Utilities, Renewables Developers Set For PUC Fight

Stocks in this article: AVA CLW IDA

Exergy says its projects that include more than 100 southern Idaho wind turbines produce hundreds of jobs and millions in revenue for local governments. The company suggests that utilities really aim to cripple the renewables industry.

"Idaho Power's doomsday predictions are overblown and not supported by what few facts there are in this case," Exergy lawyers wrote earlier this year.

Utilities and independent developers also are fighting over who owns valuable renewable energy credits, or "RECs," that accompany alternative projects and can be sold to satisfy utilities' renewables requirements in states that have mandated them, including Oregon and Washington. In 2011, for example, Seattle City Light bought the RECs from a 22-megawatt Idaho wind farm for $1 million annually.

Utilities say they deserve them, but independent producers like Clearwater Paper Corp., with a 40-megawatt biomass electricity plant at its Lewiston mill, and J.R. Simplot, with a cogeneration facility at its Pocatello fertilizer factory that's seeking a new contract with Idaho Power, say utilities seek to take private property without paying for it.

"Where the government requires an owner to suffer a permanent physical invasion of their property... it must provide just compensation," Simplot and Clearwater Paper wrote last month in filings laying the groundwork for next week's hearings

In an Idaho attorney general's opinion, however, the state sided with utilities. "It is reasonable and just to conclude that RECs should be owned by the utility," wrote Kristine Strasser, the PUC's deputy attorney general.

Peter Richardson, a Boise-based energy attorney for Simplot, Clearwater Paper and Exergy, counters that giving the utilities what they want will shut down Idaho's renewables industry for years to come.

"If the commission adopts what the staff and utilities have recommended, we're back to building gas and coal plants to meet our future load," he predicts. "We all know the problems with coal, and gas prices are notoriously volatile. That's a really scary thing to put the ratepayers at risk to."

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