Feds step into middle of fight over power

BOISE, Idaho — Federal regulators are wading into another Idaho energy fight, taking the state to court to force it to approve contracts requiring Idaho Power Co. to buy electricity from a small wind project.

The move by the Federal Energy Regulatory Commission marks the latest instance where regulators in Washington have intervened in Idaho. In September, it forbid utilities from curtailing contractually required wind energy purchases during low-demand periods.

It also signals a showdown with the Idaho Public Utilities Commission, which is sticking by its decision to reject contracts between wind developer Murphy Flat Wind and Idaho Power.

Last month, the three-member panel decided Murphy Flat had missed important deadlines to appeal the state’s rejection of its power purchase agreements. Gene Fadness, an Idaho Public Utilities Commission spokesman, said Wednesday state regulators see no reason to now change their ruling.

“We’ll argue it in federal court in Boise,” Fadness told The Associated Press. “In this case, Murphy Flat waited more than 15 months before filing its FERC case. The lack of a timely appeal disrupts the regulatory process, introduces uncertainty and is contrary to the interests of ratepayers and utilities.”

Idaho’s renewable energy landscape, especially for wind power developers, is extremely unsettled, with Fadness’ agency now considering changes to state provisions governing when and how utilities must buy their electricity under a federal law, the Public Utility Regulatory Policies Act of 1978, or PURPA, designed to promote independent power sources.

In September, for instance, the last time federal regulators waded into an Idaho dust-up, FERC told the state commission and utilities including Idaho Power and Rocky Mountain Power that PURPA forbid them from curtailing contractually obligated purchases of electricity from wind farms during low-demand periods.

That case is under appeal.

In the case at hand this week, Murphy Flat aims to build three projects totaling 30 average megawatts in southern Idaho’s Owyhee County, south of Boise.

Idaho Power has been critical of such developments, arguing their owners have been breaking up projects into units small enough to qualify for attractive PURPA contracts — and driving up ratepayers’ costs.

Consequently, it doesn’t want their power.

The Idaho Public Utilities Commission has sided with utilities, all but shutting down such developments since December 2010.

But FERC says Idaho regulators’ rejection of Murphy Flat’s contracts violated PURPA and must reverse course.

Ron Williams, Murphy Flat’s attorney, didn’t return a phone call seeking comment Wednesday on FERC’s decision to take the matter to a federal judge.

Peter Richardson, another Boise-based attorney for renewable energy developers, said FERC’s move marks a first in PURPA’s 34-year history: Shouldering the burden of litigation against a state, rather than leaving it up to the private company.

“It is extraordinary,” said Richardson, who regularly butts heads with the utilities. “I think FERC has lost patience with the Idaho commission.”

FERC spokesman Craig Cano in Washington didn’t return a phone call seeking comment Wednesday.

FERC’s decision to go to court came on a 4-1 vote.

In his dissent, Commissioner Tony Clark said he’d prefer the panel leave litigating up to Murphy Flat Wind.

“The Commission has chosen to expend federal resources to defend the claims of a single wind developer,” Clark wrote. “I would prefer to follow longstanding policy: The Commission makes a decision, but then allows the developer to fight its own fight.”

Stephanie McCurdy, an Idaho Power spokeswoman, said Idaho’s biggest utility is considering options, now that a federal judge will likely decide the fate of its disputed contracts with Murphy Flat.

“We’re looking at it very closely and evaluating what the next steps might be,” McCurdy said.