Fortnightly
Idaho PUC Split on QF Contract Buy-outs
January 15, 1995By Phillip S. Cross
The Idaho Public Utilities Commission (PUC) has approved a Utah Power & Light Co. proposal to buy out a QF contract with Firth Cogeneration Partners Ltd., which the PUC found cost-efficient less than eight months ago. The utility said that the grandfathered avoided-cost contract rates were too high, and that lower-cost supplies were available from other sources.
While granting authority for the buyout, the PUC denied approval for accounting treatment and rate recovery of $4.4 million in cancellation fees suggested by the utility. The state's three commissioners issued separate opinions; only PUC president Marsha H. Smith approved deferral of the ratemaking issues to the utility's next rate case. Commissioner Nelson would have approved the proposed accounting treatment for the cancellation costs while Commissioner Miller dissented from the decision entirely, stating that utility buyouts of approved QF contracts are not in the public interest. He said that the goal of promoting diversity in generating resources is compromised when a utility is permitted to eliminate independent power proposals, especially by using ratepayer funds. Miller also said that the short-term change in the market price for electrical power was an inappropriate standard for judging the price of a long-term resource, such as the Firth contract. Re Utah Power & Light Co., Case No. UPL-E-94-6, Order No. 25754, Oct. 14, 1994 (Idaho P.U.C.).
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