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Utility Watch

Helping or hindering a clean energy future?
by Katherine Pioli

During his presidency, Jimmy Carter took numerous steps to move the United States towards energy independence and environmental sustainability. One of these steps, the Public Utility Regulatory Policy Act or PURPA passed in 1978, required utilities to buy a certain amount of power from small independent companies at the same rate it would cost the utility to generate the electricity. Many small producers were and are renewable energy projects and thus benefitted from the new law. But a recent request from Rocky Mountain Power to the Utah Public Service Commission, which was denied last month, could have enabled the utility to circumvent such renewable-favoring laws.

In what on the surface appears to be a benign request, in May Rocky Mountain Power asked the Public Service Commission to grant a 90-day extension for processing pricing requests. According to law, when a renewable project developer requests a pricing proposal (an estimate of the rate and total purchase amount for the power generated), the utility has 30 days to submit their bid.

Currently the utility says it is working with a high volume of price requests, including bids for the Parowan Solar project by Energy of Utah (EOU) and the Monticello II project by Ellis-Hall Consultants, LLC (EHC). In a statement to the Public Service Commission, Rocky Mountain Power attorney Daniel Solander wrote, “Complying with the 30-day timeframe became an impossibility due to the large volume of pricing requests that were received in a short period of time. The stay will not prevent the development of renewable resources in Utah.”

Sarah Wright, executive director for Utah Clean Energy, a Salt Lake-based, nonprofit public interest organization that works and advocates for a clean energy future, doesn’t quite see it that way. “With renewable energy projects, there are a lot of upfront capital costs. All of the energy generated for a 15- to 20-year period is bought upfront,” explains Wright. In order to know the project’s feasibility, to plan for development and to even approach a financer, a renewable energy developer needs to know the utility’s pricing proposal. Slowing down pricing as requested by Rocky Mountain Power could, says Wright, slow down this entire process.

Even more is on the line. Without a timely pricing proposal, some clean energy projects currently waiting for pricing could miss out on a 30% federal investment tax credit for completed projects, which ends December 31, 2016, potentially harming the viable financing of renewable projects.

After reviewing the request from Rocky Mountain Power and objections from EHC, EOU and UCE, the Public Service Commission denied the request. “We are not persuaded that reasons provided justify a waiver,” wrote the Commission. “We expect PacifiCorp [Rocky Mountain Power’s parent corporation] to manage its staff and other resources to facilitate compliance with the requirements of its tariff….”

Wright says that Utah Clean Energy applauds Rocky Mountain Power for recent renewable energy purchases of Four Brothers solar development in Beaver and Iron Counties and the Seven Sisters wind project, all purchases connected to obligations under PURPA. Utah Clean Energy will continue working to assure more, not fewer, acquisitions such as these enter Rocky Mountain’s portfolio. After all, says Wright, “Utah is one of the six sunniest states in nation. We should reap the benefits of this amazing resource.”

 
 
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