On December 15, 2010, Idaho Wind Partners 1, LLC (“Idaho Wind”) filed a petition for declaratory order with FERC (Docket EL11-12) on behalf of its eight qualifying facilities ("QFs") in Idaho to approve an unconventional plan to sell RECs into California.  Idaho Wind is seeking confirmation that the plan (1) would not violate any of the Commission’s anti-manipulation rules and (2) would in no way result in the loss of small power producer QF status.

In a nutshell, Idaho Wind proposes to sell bundled power and RECs from the eight QF facilities to a third party “inside the fence” (i.e., before being placed on the grid).  Idaho Wind has already applied for market based rate authority for each of the projects- a step required prior to the sales.  The third party would then instantaneously sell the power back to the projects, keep the RECs, and attach them to power already scheduled for delivery into California.  After buying the power back from the third party, the projects would sell it to Idaho Power (which has no need for the RECs because the state has no renewable portfolio standard) under Idaho Power’s standard PURPA contract. 

In its petition, Idaho Wind states that the projects qualify as eligible renewable resource (“ERR”) facilities and that the third party can meet the California RPS deliverability requirement.  After discussing the ERR qualifications, the petition cites an example from the California Energy Commission’s guidebook that it believes would allow the third-party to deliver the unbundled RECs into California:

“The retail seller [buying from the ERR] could provide firming and shaping services.  The retail seller could buy energy and RECs from an RPS-eligible facility, sell the energy back to the facility, and ‘match’ the RECs with energy delivery into California from a second PPA and/or with imports under a pre-existing PPA.” CEC Guidebook at n.2 (emphasis added).

Idaho Wind has requested expedited review.  Only PG&E has intervened in the docket at this point.