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The Idaho Public Utilities Commission (PUC) has modified the method electric utilities must use to conduct avoided-cost negotiations with qualifying cogeneration facilities (QFs). A new interim standard for large QF projects (greater than 1 megawatt) calculates avoided costs based not on displaced purchases from a single, hypothetical power plant, but on information in the utility's resource plan.

The PUC also reduced the minimum QF/utility contract length from 20 to five years, noting that a 20-year obligation did not reflect the industry's current reliance on short-term purchasing strategies for supply: "We can find no justification for insisting that Idaho's investor-owned utilities and their ratepayers assume such an obligation simply to foster one particular segment of an increasingly competitive industry." In response to the contract-length reduction, the state's major utilities agreed that all large QFs should be entitled to levelized rates upon request. Re Idaho Power Co., Case No. IPC-E-95-9, Order No. 26576, Sept. 4, 1996 (Idaho P.U.C.).

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