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Alt power, Idaho utilities scuffle at PUC hearing

John Miller, Associated Press

Peter Richardson, an attorney for renewable energy developers in Idaho, grills a utility official on Tuesday, Aug. 7, 2012 at a Public Utilities Commission hearing in Boise, Idaho. As the two sides fought over accusations of fraud, energy regulators hope what are expected to be three days of hearings will help them settle differences between the two sides over the price utilities must pay renewables developers for their electricity. (AP Photo/John Miller)

BOISE, Idaho (AP) -- Deep animosity between Idaho Power Co. and the state's wind developers was on display Tuesday, the first of three days of hearings where energy regulators are considering proposed rules to govern small, independent power projects — and the prices they get for their electricity.

Idaho Power, a unit of IdaCorp Inc., has joined other utilities seeking to convince the state Public Utilities Commission to change the formula it uses to set the price they must pay renewables developers for their power, arguing the current price is too high.

Developers contend that if regulators side with utilities, it will spell the demise of most small, independent energy projects breathed into life by a 1978 law known as Public Utility Regulatory Policies Act, or PURPA, that requires regulated utilities to buy their electricity.

Dozens of lawyers, energy entrepreneurs and environmentalists packed the Public Utilities Commission's hearing room near downtown Boise.

Idaho Power, backed by Avista Corp. and Rocky Mountain Power, renewed arguments that they are paying wind developers too much money for the federally mandated contracts that the utilities brand as unreliable. That's because wind doesn't consistently blow during hot afternoons when Idaho farmers are irrigating and homeowners are turning on their air, forcing the utility to fire up other resources like its new, $427 million natural gas plant west of Boise.

"What this proceeding is about is the proper price," Donovan Walker, Idaho Power Co. senior counsel, told The Associated Press outside the hearings. "We believe it has been priced improperly and our customers are being harmed."

Leading to the hearings, Idaho Power has engaged in a high-voltage public relations campaign, inserting leaflets into its roughly 400,000 customers' bills informing them they'll be paying an estimated $850 million extra over the next decade due to existing wind projects.

Peter Richardson, the Boise-based attorney who represents wind developers including Exergy Development Group, accused Idaho Power's power supply manager, Lisa Grow, of misleading ratepayers with a public relations war on wind.

Richardson said Idaho Power is bending the facts to scare customers.

The utility came up with the $850 million figure it warned customers about by using short-term energy prices it would now pay for electricity if Idaho Power were to buy it today on the so-called "spot market," he said. Spot prices are at historic lows, due to plummeting natural gas costs.

But Richardson contends that the utility should have used longer-term price projections for its comparison. Meant to reflect the anticipated cost of natural gas over the next two decades, those prices make wind projects look like more of a bargain, he said.

"Wouldn't you agree that the comparison of long-term...cost rates is an unfair comparison to today's spot market?" Richardson pressed Grow. "That it's misleading?"

She gave a little ground but refused to concede the company's campaign was inaccurate.

"I would agree with your spot market comment, however, at the end, those are resources that we could procure today, and they are in fact lower than what we are paying for the PURPA resources," Grow countered. "I don't think it's misleading, I think it's absolutely factual."

Idaho's three-member commission — Chairwoman Marsha Smith, Mack Redford and Paul Kjellander — plans to consider testimony through Thursday on numerous disputed issues that could impact the prices independent developers will receive for their power in the future.

The commission will issue a decision at a later date.