SunEdison last wek broke ground on the 22.6 MW Seven Sisters solar project In Utah, shown here, and announced three new solar projects totaling 262 MW (DC). Photo credit: SunEdison

In a state dominated by a coal-centric utility and with no real renewable portfolio standard, Utah is a surprise candidate for a utility-scale solar boomlet. But it’s happening, thanks to SunEdison, big solar’s tiny price tag, the continuing impact of the federal investment tax credit and – here’s the unique Utah twist – an aging but apparently still potent energy law called PURPA.

SunEdison, already with some 450 MW (DC) of solar in development in Utah, stepped up last week with three more big solar projects in the state, totaling 262 megawattts.

As the company said in its announcement, “PacifiCorp, an electric utility that serves 1.8 million residential, commercial, and industrial customers, will purchase the electricity through three 20-year power purchase agreements according to its obligation under the federal Public Utilities Regulatory Policies Act.”

That’s PURPA, a Jimmy Carter-era law that among other things, required utilities to purchase renewable energy from independent producers that could be sold for less than what it would cost a utility to generate the power itself. It was this “avoided cost” mechanism that inspired the first wind power wave in the U.S., in California in the 1980s.

But over time, as natural gas-fired generation became cheaper, PURPA’s ability to pave the wave for more renewable energy waned.  The Union of Concerned Scientists, in a PURPA primer on their website, says: “(D)espite its benefits, PURPA is no longer much help for renewables. Due to current low avoided costs, few renewables are able to compete with new natural gas turbines.”

So what’s going on in Utah?

For one thing, the group Utah Clean Energy, in regulatory combat with PacifiCorp’s Utah subsidiary, Rocky Mountain Power, has managed to win rulings that make “qualifying facilities” – renewable plants no more than 80 MW in capacity – more competitive with conventional power.

“We saw that without an RPS, PURPA was our only tool to try to drive more renewable energy development,” Sarah Wright, UCE’s executive director, said in an interview. The group won a key victory on the capacity contribution of solar – not capacity factor, but rather a more complex measure of a resource’s ability to reliably deliver power to the utility. Regulators set the capacity at 84 percent for the sort of single-axis tracking solar common with big plants today. That helped increase the avoided cost calculation for Rocky Mountain Power, because it would take more conventional power to match the solar.

The solar advocates didn’t get everything they wanted from regulators – in particular, the state still doesn’t value the clean attributes of renewable energy, nor its ability to provide a hedge against higher fuel prices. But the combination of a higher avoided cost calculation along with today’s low, low prices for solar has given SunEdison the opening it needed. Thus, solar in the neighborhood of 5 cents per kilowatt-hour or less is a winner in Utah. It’s the law. It’s happening.

“Twenty years fixed at that price, in our view, that’s a screaming good deal for ratepayers,” Wright said.

The utility disagrees. It continues to fight to defang PURPA – for instance, it would like to see the capacity contributions for solar pushed down to 39.1 percent for tracking solar. That change, which the company says would protect ratepayers from overpaying for power, by itself would push the avoided cost calculation down by nearly 2 cents per kilowatt-hour, perhaps putting it beyond the reach for even today’s cheap solar.