Utility, wind farmer reach deal: No upgrade required for wind farm

HAGERMAN, IDAHO - After nine months of back and forth, Idaho Power Co. and a Magic Valley wind farmer have reached an agreement both say could launch a fledgling wind industry in southern Idaho.

The deal involves a case dating back to September. Hagerman wind farmer Jared Grover wanted to sell Idaho Power energy produced on his wind farm, but the power company wanted Grover to spend $60 million on transmission system upgrades it said was necessary to incorporate the wind energy. The agreement reached this month cuts Grover's bill to less than $200,000, and Grover said it opens the door for more wind development because many potential wind farmers were waiting to see what happened in his case before starting their own wind farms.

The power company agrees. "We hope this will serve as a template for future contracts," said Dennis Lopez, a spokesman for Idaho Power. Instead of the multimillion-dollar upgrades, the company will install a device at Grover's farm that can limit the amount of power that enters the system when there's an energy emergency, such as a system overload. To pay for the device and other infrastructure-related costs the utility will pay for 25 percent of the estimated $10 million project. Grover will pay for 75 percent, with 50 percent of that refundable after the system is up and running. Since the energy crisis of the 1970s, the federal government has required utility companies to buy power produced by alternative-energy suppliers, such as Grover.

The program, the Public Utility Regulatory Policies Act, or PURPA, says utilities must buy power from alternative producers at a rate equal to what the utility would spend if it would have to generate the power itself or buy it from another source. In Idaho, that rate is about $62 per megawatt hour. In Grover's case, the power company didn't dispute that it had to buy his power. It said, though, that adding additional energy to its grid would require a system upgrade, and it wanted Grover to foot the bill. The case went before Idaho's Public Utilities Commission, the governing board for Idaho energy, which asked the parties to try to reach a deal.

"We've been working on this a really long time," Grover said. "It feels good to finally reach this agreement."