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Developers of qualifying renewable projects with a capacity of less than 10 MW will be paid considerably more for their generation as a result of new rates published by the Idaho Public Utilities Commission (PUC).

The Idaho PUC updated both the fuel and non-fuel components of a mechanism used to calculate the rates that Idaho's three major regulated utilities must pay to small-power or co-generation project developers whose projects qualify under the federal Public Utility Regulatory Policies Act.

The commission recently issued two orders: One updates the non-fuel components of the avoided-cost rate, such as capital costs and operations and maintenance, and the other updates the always varying fuel components of the rate. The fuel component adjusted shortly after the Northwest Power and Conservation Council releases a new natural-gas price forecast, which it did last December.

The result of both orders is an avoided-cost rate that is considerably higher than the former rate paid by utilities to small-power producers. For example, the developer of a wind farm or geothermal facility with a capacity of less than 10 MW would be paid $88.67 per MWh (or about 8.87 cents per kWh) for a 20-year levelized contract with Avista Utilities. That compares to the former avoided-cost rate of $70.12 per MWh.

The three major investor-owned utilities in Idaho - Idaho Power, PacifiCorp and Avista Utilities - participated in the case, as did Black Canyon LLC, which is developing a wind generation facility in Bonneville County.

SOURCE: Idaho Public Utilities Commission

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