April 4 (Renewables Now) - Idaho Power Company has struck a power purchase agreement (PPA) with an initial price of just USD 21.175 (EUR 18.85) per MWh for a 120-MW photovoltaic (PV) project in Idaho.
The contract, touted as one of the lowest-cost solar deals of its size publicly reported in the US, has been agreed with Jackpot Holdings and will need approval from the Idaho Public Utilities Commission (PUC).
The utility, part of IDACORP Inc (NYSE:IDA), said last week the power from the future solar farm south of Twin Falls would help it compensate for a decrease in generation after the North Valmy coal-fired plant in Nevada is shut down. The solar farm will connect to an existing transmission line that at present delivers electricity from North Valmy.
The North Valmy Generating Station has a capacity of 522 MW and is jointly owned by Idaho Power and NV Energy. Both units of the facility are to be closed by 2025, under an accelerated retirement plan. This Monday, the Idaho Public Utilities Commission invited comments on Idaho Power’s proposal to lift all base rates by 0.11% from June to recover costs associated with the closing of the thermal power plant.
The Jackpot Holdings agreement includes an option for Idaho Power to buy the 120-MW solar power plant. The company will also be able to sign a PPA for the output of a proposed expansion at a slightly higher price.
The state of Idaho had less than half a gigawatt of solar capacity at the end of 2018, according to the Solar Energy Industries Association (SEIA). The deal Idaho Power has struck has the lowest PPA price in the state, significantly below "qualifying facility" rates set out under the Public Utility Regulatory Policies Act, Colin Smith from consulting and research firm Wood Mackenzie Power & Renewables said yesterday. The price of USD 21.175 per MWh will be increasing by 1.5% per year. According to Wood Mackenzie, the PPA is “unique” as it has been struck in a fledgeling state market, unlike other low-prices PPAs agreed by utilities in leading solar states.
Last month Idaho Power also announced a 100% clean energy goal by 2045. Hydropower already meets nearly 50% of its customers’ energy needs and the company wants to add more wind and solar power, as well as energy storage, to its portfolio and move away from coal. Grid and energy efficiency upgrades are also part of the plan.
(USD 1 = EUR 1.12)