John Gardner
14 March 2012
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In just 7 years?
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How we got to where we are, where might we
go from here?
Background on PURPA and REC’s
Timeline of PURPA in Idaho
Comparison to other states and regions
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Public Utilities Regulatory Policy Act of 1978
◦ aka PURPA
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Renewable Energy Certificates
◦ aka “Green tags”
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Passed in 1978
Intended to guarantee access to market
for renewable (and CHP) generation
Defined Qualifying Facilities (QF’s) that
included wind
Specified that Investor Owned Utilities
must purchase power from QF’s
Specified that the price of the transaction
is to be at the “avoided cost” and hence
be invisible to the consumer
Left the details to the states (within those
limits)
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The PUC’s have to do some hard work with
PURPA
◦ Specify the size of QF’s that qualify (a “cap” on
generation capacity)
◦ Figure out the “published rates”, based on avoided
costs and how long they last
◦ Deal with the details surrounding the issues that
were not anticipated by PURPA
 Seasonal variations due to hydro/wind phasing
 Rapid development of the wind industry (partially
driven by federal PTC)
 Disaggregation issues.
 Renewable Energy Certificates
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1988 – PURPA Maximum Contract Period reduced from 35 to 20 years
◦ Order #21630 - U-1500-170
1993 - PURPA Eligibility Cap reduced from 10 MW to 1 MW
◦ Order #25884 - IPC-E-93-28
1995 - PURPA Maximum Contract Period reduced from 20 to 5 years
◦ Order #26576 - IPC-E-95-09
2002 - PURPA Eligibility Cap increased from 1 to5MW, Maximum Contract
Period increased from 5- to 20 years
◦ Order #29029 - GNR-E-02-1
2002 - PURPA Eligibility Cap Increased from 5 to10MW
◦ Order #29069 - GNR-E-02-1
2005 - Lewandowski farm comes on line
2005 - Fossil Gulch Wind Park comes on line
1Thanks
to Matt Wiggs, Idaho Office of Energy Resources for this summary
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2002- Bob Lewandowski begins project by
purchasing de-commissioned Micon 108’s from
a California wind farm and started erecting them
(himself!) out on Simco Rd, about 20 miles from
here.
2005 – PURPA-based Power Purchas Agreement
with Idaho Power approved.
◦ Total capacity: less than 0.4 MW.
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July 2005 – Bob Lewandowski passes away
◦ Turbines cease functioning shortly thereafter
 (2009 – Turbines decommissioned by owners, donated to
Idaho schools for training purposes)
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2005 - PURPA Wind Eligibility Cap Decreased from 10MW to100kw
◦ Order #29839 - IPC-E-05-22
2007 - PURPA Wind Eligibility Cap Increased from 100kw to 10MW
◦ Order #30488 - IPC-E-07-03
2010 - PURPA Wind & Solar Eligibility Cap decreased from 10MW
to100kw, others remain at 10MW
◦ Order #32176 - GNR-E-10-04
2011 - PURPA Eligibility Cap maintained at 100kw Wind & Solar, 10MW
others
◦ Order #32262 - GNR-E-11-01
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First applied to Raft River and the Lewandowski
Site and Fossil Gulch.
Operators must submit prediction of quantity of
power expected to be to utility for the coming
quarter. (4 to 6 months in advance)
If actual production misses by 10% (less than 90%
or more than 110% of prediction) the operator
pays a penalty
At one point, it was proposed that the operator
pay for the power that the utility was forced to
purchase if actual was less than prediction.
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It reflected the processes in place at the time
With little new generation coming on line,
utilities purchased blocks of power on the
market
Planning in advance guaranteed low prices
Utilities did not want unknown amounts of
power on the grid to disturb this planning
process
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“environmental attributes” of energy generated
Energy is placed on the grid and taken from it at
thousands of locations
The energy from various sources is inextricably
mixed
The REC market was created to help decommoditize energy.
Everyone pays the going rate for a MWh but
Individual customers can pay for REC’s and lay
claim that the energy they used was ‘green’
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The holder of the REC must ‘retire’ the certificate in
order to lay claim. Once they are sold, the new buyer
has the claim
REC’s are often used by utilities operating under state
renewable portfolio standards, purchasing the REC’s
from anywhere to meet the requirement, then retiring
them
A common understanding of the REC market is that it
allows consumers to vote with their pocket book and
help support renewable energy development.
In other words, the $$’s generated by sales of the
REC’s are generally thought to go to the owners of
the wind farms, helping make the deal more
attractive to investors.
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The very fact that REC’s have value indicates
that market recognizes that renewable energy
is MORE valuable than other forms
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According to the EPA , in the last year:
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Intel Corp
Kohl’s Dept. Stores
Wal-Mart (CA & TX)
Whole Foods
Johnson & Johnson
City of Houston
2.5 Million MWh
1.5 Million MWh
0.9 Million MWh
0.8 Million MWh
0.5 Million MWh
0.4 Million MWh
◦ Point of reference, a 2 MW wind turbine with a 30%
CF will generate about 5,000 MWh.
◦ Intel’s purchase represents the annual output of
500 wind turbines!
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At the PUC
◦ Several filings in front of the PUC
◦ The cap is still 100 kW for wind and solar
◦ The utilities are arguing for new methods of
calculating avoided costs.
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At the Statehouse
◦ Several bills under consideration relates to the
future of wind in Idaho.
 2 Year Moratorium
 Interim Committee Study
 Disposition of REC’s
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HO 527: Original version of the moratorium
bill
HO 561: Current version
This bill creates a 2 year moratorium and
directs an interim committee to study the
environmental and economic effects of wind
power in Idaho.
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S1364: Dictates that any and all
environmental attributed associated with
PURPA projects will be transferred to the
utilities along with the energy at the avoided
cost.
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SR 127
◦ Senate Concurrent Resolution
◦ Combines elements of moratorium and REC bill
◦ Directs the Interim Committee on Energy, Environment
and Technology shall investigate:
◦ “the economic, social and environmental impacts of wind
energy development on the State of Idaho and its
citizens, and”
◦ “whether power sold by a renewable qualifying facility to
a utility at avoided costs should also transfer to a public
utility, without consideration, the environmental
attributes of that qualifying facility” and
◦ Report back to the 2013 legislature
◦ No immediate action as a result of this bill
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Required reading for
those interested in
this topic.
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What’s different about us?
How does our current development compare
to other states in the region?
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Energy Information Administration
◦ http://www.eia.gov
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State Energy Profiles
◦ Retail Electric Sales (as opposed to sales to other
utilities)
◦ Electricity Generated by source
 Other Renewables (see next slide)
◦ Total in-state generating capacity
◦ In-State capacity for Other Renewables
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Other Renewables includes:
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biogenic municipal solid waste,
wood,
black liquor,
other wood waste,
landfill gas,
sludge waste,
agriculture byproducts,
other biomass,
geothermal,
solar thermal,
photovoltaic energy, and
wind.
The are generally pretty flat from 1990 to 2000, some
dipping down in the mid-late 1990’s. Starting in 2000,
the O.R. capacity and energy rises steadily, corresponding
to wind development.
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Is a graph of 10-year trends for the 5-state
region, plotting the ratio of “Other
Renewable” generating capacity to the total
in-state capacity. Note that Idaho’s in-state
capacity is not sufficient to meet in-state
needs.
20.0%
18.0%
16.0%
14.0%
Idaho
12.0%
Oregon
10.0%
Washington
Montana
8.0%
Wyoming
6.0%
4.0%
2.0%
0.0%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
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This is similar to the previous slide except it
on an energy basis, not capacity. It’s the ratio
of in-state “Other Renewable” energy
generated to the total generated within the
state. Again, note that a significant amount of
energy consumed in Idaho comes from out of
state.
10.0%
9.0%
8.0%
7.0%
Idaho
6.0%
Oregon
5.0%
Washington
4.0%
Montana
Wyoming
3.0%
2.0%
1.0%
0.0%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
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Is the ratio of energy generated by Other
Renewables (OR) to the total retail electricity
sales in each state.
Idaho is last among the region
Note that in 2000, when there was no wind
generation in Idaho, this ratio was at 2%
(perhaps due to biomass generation).
Assuming those other renewables are still
operating, the precentage of wind, by energy,
in Idaho is between 2 and 3%
20.0%
18.0%
16.0%
14.0%
Idaho
12.0%
Oregon
10.0%
Washington
Montana
8.0%
Wyoming
6.0%
4.0%
2.0%
0.0%
2000
2001
“Other Renewables:
2002
2003
2004
2005
2006
2007
2008
2009
2010
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If you’re so inclined, contact your legislator
regarding the moratorium and the REC bills
It appears that SCR127 has some legs so an
interim committee report is likely
There are powerful forces in Idaho who are
intent on stopping wind development