Helping or Hindering Clean Energy?

A new decision from the state energy regulators lays out the future for clean energy in Idaho.

We must cut fossil fuels in our electric system to protect Idaho’s clean air, clear water and quality of life. Air pollution threatens our health, and carbon pollution is changing the climate, landscapes and wildlife habitat right before our eyes. Over the past several years, we have begun to transition from fossil fuels—like coal—to clean sources like the wind projects popping up across Idaho.

This transition may be slowed, but fortunately it won’t be stopped, based on new rules issued by the Public Utilities Commission. At the most basic level, the rules establish how clean energy projects obtain contracts to sell power to Idaho’s utilities. These rules drive clean energy growth in Idaho. Our focus is on three main parts: length of the contract, price that clean energy brings, and size of projects eligible for different prices. Here’s ICL’s take on how each part helps or hinders clean energy.

Length of Contracts

The PUC continued the current rules allowing for 20-year contracts. This benefits clean energy since longer contracts make investors happy. When utilities build fossil fuel plants, we customers pay them off over 30 years or more. Allowing long-term contracts for clean energy helps level the playing field and promotes more clean energy in Idaho. This clearly helps clean energy.

Price Available to Projects

This is the most complicated yet most important part of the rules. Higher prices help, while lower prices hinder. On the other hand, the price our utilities pay for energy is passed on to us customers. ICL supports fairly priced clean energy. The PUC’s decision helps some types of clean energy and hinders others.

On the good side, the basic rule is that clean energy projects qualify for a price based on the value of their output. Clean energy delivered on hot summer afternoons when energy demands are high is a valuable product. This is a good benefit for some kinds of projects—like solar power.

On the bad side, this rule keeps us reliant on fossil fuels when energy demands are low because today burning fossil fuels does not include the cost to our health and climate from air pollution. During times of low demand, old, dirty coal plants set the price of energy, and clean projects—especially wind power—may have a tough time competing.

Size of Projects

We have a long way to go to replace fossil fuels with clean energy; larger projects definitely help. The size rules determine whether a project is eligible for a published price or must negotiate a price. Being eligible for published prices helps, while having to negotiate a price hurts clean energy. Imagine going to the grocery store and having to haggle over the price of bread. It is much easier for everyone to just pay the price published on the shelf.

Here again the PUC rules help some but hinder most projects. Previously, all types of projects up to 10 average megawatts (enough to power 10 Walmarts or 7,000 homes) qualified for published prices. Larger projects negotiated their rates. The PUC slashed the size for wind and solar projects to access published rates from 10 to 0.1 MW, which hinders the largest sources of clean energy.

One More Thing

ICL also focused on “renewable energy credits.” RECs are a creation of state laws that attempt to capture the “renewableness” or “cleanness” of energy projects. RECs allow a clean energy project to sell energy to the utility and the “clean” to someone else. This provides a separate source of income to help clean energy compete against dirty fossil fuels.

The rules can help by allowing projects to sell the clean and the energy separately. But they can hinder by requiring projects to bundle the REC with the energy. Here the PUC helped small projects by allowing them to keep their RECs. But they hindered larger projects by forcing them to give half the RECs to the utility. We hope that this decision is not the final word on the issue.

So Idaho’s clean energy future is brighter than it was a few months ago, but not as bright as it could be. The new rules hinder larger clean energy projects. But the new rules help small projects that deliver energy during hot summer days. It’s a good step away from dirty fossil fuels toward clean energy.

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