The Idaho Public Utilities Commission has authorized Idaho Power Co. to stop paying a "capacity adder" to qualifying cogeneration facilities in addition to its own monthly variable energy cost as payment for nonfirm energy.
The adder, 3 mills per kilowatt-hour, originally was devised by the commission to compensate the QFs for the aggregate-system-capacity benefits provided by the QF suppliers. Nevertheless, due to lack of participation in the QF rate-schedule offering, little was provided to the utility in terms of reduction of capacity needs. It was reasonable to eliminate compensation to energy providers for the capacity value of their deliveries, the commission found.
The commission also has authorized the utility to eliminate the fixed-rate payment option available to the QFs, finding that the variable-cost approach more accurately reflects the actual cost that Idaho Power can avoid by purchasing nonfirm energy from QFs. Re Idaho Power Co., Case No. IPC-E-95-15, Order No. 26750, Jan. 21, 1997 (Idaho P.U.C.).