A Boise developer hopes to build what would be the Northwest’s largest solar farm in Twin Falls County near the Nevada border and to sell the renewable energy to Idaho Power.
Idaho Power has applied with the Idaho Public Utilities Commission to approve a power purchase agreement with Boise-based Alternative Power Development, LLC for 120 megawatts of solar, with an option to purchase an additional 100 megawatts.
The first 120 megawatts would be scheduled to come online in 2022. If PUC gives it the green light, the agreement would end a roughly four-year hiatus on “utility scale” solar and wind projects gaining approval in Idaho.
The solar farms would be located on about 2,000 acres leased from J.R. Simplot Co. Alternative Power Development also developed Idaho’s current top solar farm, which is an 80 megawatt facility in Grand View.
“It speaks to the advances in technology we’ve seen that are making some of these clean resources a lot more cost-effective,” Idaho Power spokesman Jordan Rodriguez said of the plans.
Rodriguez said the solar farm would provide a clean power source to help offset lost production from the North Valmy coal power plant, which the company co-owns with a Nevada utility and plans to close early. The coal plant’s first unit will close at the end of this year, 12 years ahead of schedule, and its second and final unit should close in 2025, a decade early.
Rodriguez said the solar farm will tie into the same power transmission network that serves the coal plant, which now operates as a summer-only resource. The clean power project also moves Idaho Power closer to its goal of using 100 percent renewable energy by 2045, Rodriguez said.
The Idaho PUC hasn’t approved any significant solar or wind projects since August of 2015, when the commission opted to shorten the mandatory length for renewable power contracts under the Public Utility Regulatory Policy Act from 20 years to two years.
PURPA requires utilities to purchase renewable energy from qualifying facilities at a rate set by the commission to be equivalent to what the utility would have paid to generate its own power or to buy it from another source.
PUC spokesman Matt Evans said the commission agreed the long PURPA contracts hurt customers by locking in power rates for several years, preventing utilities from benefiting from technological advancements that lowered renewable energy production costs. Furthermore, Idaho utilities argued they already had plenty of renewable power in their portfolios but still needed more reliable sources that produce power when the when isn’t blowing or the sun isn’t shining.
Many green energy proponents, however, argued when the PURPA contracts were changed that most renewable energy projects would be unable to obtain financing with such short guaranteed contracts. Indeed, records show the flurry of renewable energy activity Idaho experienced about a decade ago came to an abrupt halt after the PUC’s decision.
“PURPA projects for solar and wind died when they changed the contract,” said Boise energy attorney Peter Richardson.
Richardson likens PURPA to a “shotgun wedding,” forcing a utility and a developer to “marry” on a project. The beauty of the large, planned solar project, he said, is that it represents a voluntary agreement, driven by economics that are in the best interests of both parties.
“What it shows is solar resources have matured to the point where they’re competitive with traditional fossil fuel resources and in fact can economically displace traditional fossil fuel resources,” Richardson said. “This is cheaper than their coal and gas resources.”
Idaho Power agreed to a 20-year contract to buy the solar power from Alternative Power Development, motivated by one of the most affordable contract prices for solar power in the country, according to the company’s application.
“At the price we offered it’s very attractive to the utility. There’s nothing out there priced less,” explained Robert Paul, managing member of Alternative Power Development.
According to Idaho Power’s application with the PUC, the contract price would be $21.7 per megawatt-hour in the first year and would increase by 1.5 percent annually. Idaho Power estimates customers will save about $151 million throughout the course of the contract compared with its current resources if the full 220 megawatts is realized.
Paul has submitted his application in time to capitalize on a 30 percent federal investment tax credit for solar power that’s scheduled to be curtailed after this year, dropping to 25 percent next year. He doubts there will be a flurry of solar projects forthcoming in Idaho in the near future, given that he knows of none that are currently in the pipeline to take advantage of the tax incentive. In the next few years, however, he expects to see applications as costs of building solar projects continue to come down. Paul noted builders are becoming more experienced and efficient at erecting solar farms, and increased competition among them has also driven down costs.
Until 2012, wind power represented most of the state’s green energy activity. Evans said regional projects shifted almost entirely in favor of solar power from 2012 through 2015, as solar technology came of age and many of the best sites for wind production were already taken. Idaho Power’s current portfolio includes 728 megawatts of purchased wind capacity and 436 megawatts of purchased solar.
Rodriguez said using power that is generated intermittently remains a challenge for Idaho Power, but the company’s decision to join the Western Energy Imbalance Market in 2018 has provided new stability. The market involves energy providers in seven Western states sharing resources to provide a more consistent supply.
Rodriguez believes planned transmission lines will further help Idaho share power with its neighboring states. Renewable power should become even more viable as battery storage technology becomes more cost effective, he said.
“This agreement is kind of indicative of the path we’re on, and we believe that path will continue and there will be continued opportunities to add more clean energy without increasing prices or sacrificing reliability,” Rodriguez said.