July 2 ID Energy Update

Construction of the Langley Gulch Natural Gas Plant in Idaho. Photo credit: Idaho Press Tribune

Idaho Energy Update
July 2, 2012

Idaho Power customers just got socked with one of the larger rate hikes in many months after the PUC approved the company’s request to place most of the $400 million cost of its new natural gas power plant into customer rates. The average rate hike works out to about 6.8 percent, down slightly from the average 7.1 percent the company asked for. Meanwhile, the Northwest Power and Conservation Council, our region’s primary power planning body, brings its monthly meeting to Boise next week with a two-day session on several items of interest to Idaho energy-watchers. And the BLM has released some additional analysis on how the proposed 1,100-mile transmission line from Wyoming to southwest Idaho might impact sage grouse – and more important what kinds of steps might be taken to reduce those impacts. For these updates and a look at the energy calendar ahead, including the July 13 BPA meeting in Boise to discuss the 1964 Columbia River Treaty, please read on. Thanks as always, and if you have any calendar items, please send them along!

Ken

Ken Miller
Clean Energy Program Director
Snake River Alliance
(208) 344-9161
kmiller@snakeriveralliance.org
www.snakeriveralliance.org

I: Big Idaho Power Rate Hike Coming as PUC Request to Put Gas Plant Cost in Rates

State regulators shaved the overall amount slightly, but Idaho Power customers just saw their electric rates jump by an average 6.8 percent in order to cover the costs of Idaho Power’s new $400 million natural gas plant near New Plymouth.

Idaho Power’s original request would have resulted in an average 7.1 percent rate hike, but even at 6.8 percent, this is one of the largest single rate increases for Idaho Power customers in recent PUC actions. A typical residential customer using 1,020 kilowatt-hours per month will see a bill increase of $5.63, from $82.72 a month to $88.35.

The Public Utilities Commission’s order on Friday allows Idaho Power to begin collecting the lion’s share of the costs of the new Langley Gulch natural gas plant immediately. The primary issue that had to be decided by the PUC was how much Idaho Power should be allowed to collect from customers. The Commission ruled back in 2009, over objections of groups such as the Snake River Alliance and other environmental organizations as well as the company’s industrial customers, that Idaho Power should receive the important “certificate of public convenience and necessity” (CPCN), to build the plant. Critics of the CPCN issuance in 2009 questioned whether the new gas plant is necessary at this time given light of soft customer demand for power and an abundance of other electricity generation resources.

A PUC news release noted that the industrial customers and the irrigators argued Idaho Power’s load growth actually declined since the CPCN was granted, while the industrial customers also “expressed concern that the low cost of operating the Langley plant would reduce use of the company’s three coal-fired plants by 70 percent.” Langley Gulch can generate up to 330 megawatts, compared to the company’s average “load” or demand of about 2,000 megawatts. Particularly given currently depressed natural gas prices, it is expected that Idaho Power will rely less on the 1,100 megawatts of coal-fired power generation in which it has an interest in Oregon, Wyoming, and Nevada. Most of the balance of its generation comes from hydropower plants.

Meanwhile, the PUC release said, “the Snake River Alliance argued that construction of the plant ‘was and continues to be ill-timed’ and said Idaho Power has ample energy supplies, particularly so with the failure of both the Hoku polysilicon plant in Pocatello and the Micron-Transform Solar project in Nampa.”

Commissioners resisted those arguments and said it doesn’t have the “use of hindsight to judge the reasonableness of issuing the CPCN to Langley three years ago.” Their release also said the PUC “attempts to balance the interest of the utility and ratepayers and reduced the requested rate base commitment by $26 million to protect ratepayers.”

While Idaho Power’s cost for the plant is $401.4 million, the Commission allowed $389.4 million to be included in customer rates. Some expenses were removed because they will not be incurred until after June 30 and will need to be collected later; others were disallowed for various reasons. The first installment for Langley to be billed to customers beginning immediately is for $58.1 million more to be collected in rates.

To review the Commission’s order or other documents in this case, go to www.puc.idaho.gov and then “File Room” and then “Electric Cases” and scroll down to IPC-E-12-14.

Meanwhile, Idaho Power filed a form with the U.S. Securities and Exchange Commission (SEC) advising that it “received pre-approval from the Idaho Public Utilities Commission (IPUC) to include up to $396.6 million of construction costs in Idaho Power’s rate base” when the gas plant goes into operation.  The company told federal regulators that Langley “became commercially available on June 29, 2012,” the same day the PUC issued its order.

II: NW Power & Conservation Council Comes to Boise for July Meeting

The NW Power and Conservation Council, the region’s primary power planning entity that includes two gubernatorial appointees from each of the four Northwest states, brings its monthly meeting to Idaho next week.

The “Power Council,” as it is often called, was created by the Northwest Power Act of 1980 in the aftermath of one of the region’s worst power crises, to develop a 20-year electric power plan every five years to show how the region will have a secure, reliable energy future that is also the lowest economic and environmental cost to the region. It also must develop fish and wildlife programs to protect salmon and other species impacted by hydropower development in the Columbia River Basin. Idaho’s two appointees to the Council are Jim Yost and Bill Booth.

One of the Council’s most important tasks is to create the region’s power plan every five years. It’s a process that rarely ends, given the amount of time required to prepare the plans. More Idahoans than ever participated more than two years ago with comments and testimony as the Council prepared its 6th Power Plan for the Northwest. That groundbreaking plan projected that the Pacific Northwest can meet 85 percent of its new electric load growth over the next 20 years with energy efficiency alone, with most of the remainder coming from renewable energy, primarily wind.

The Power Council’s two-day meeting will be preceded Monday, July 9, with a tour of the new Idaho Power Langley Gulch natural gas power plant (see above). The actual meeting begins Tuesday, July 10, with an 8 a.m. meeting of the Fish and Wildlife Committee and a 9 a.m. meeting of the Power Committee. All meetings are at the Hampton Inn in downtown Boise. After the committee meetings on Tuesday morning, the full Council meets from 1:30 p.m. to 4 p.m. The full Council continues its meeting at 8:30 a.m. Wednesday and will run until about noon. Here are some expected highlights from the meetings. Supporting documents for some of these items can be found in the Council’s agenda, the site for which is mentioned below:

-       Mid-term assessment of the 6th Power Plan. There will be a discussion of progress made to date in implementing the Power Plan, and also topics that need to be addressed as the Council prepares to develop the 7th Power Plan in the coming months.

-       Revised electricity loads and forecasts, including progress made in achieving the ambitious energy efficiency targets in the 6th Power Plan. For instance, Council members will hear that demand for electricity in the region grew by 634 average megawatts since the start of the 6th Plan, and that 81 percent of that load growth has been met with conservation – almost on track with the 85 percent projected in the 6th Plan.

-       A presentation by the Upper Snake River Tribes.

-       A report by Idaho Power on its progress with its latest “wind integration study,” which the company is undertaking to assess the impacts of added wind power on its grid system.

-       A briefing on Idaho regional transmission issues by Commissioner Marsha Smith of the Idaho PUC. Smith, serving her fourth term on the PUC, is the current chair of the Western Electricity Coordinating Council (WECC) board of directors and also represents the state on the Western Interconnection Regional Advisory Body. She has long been involved and continues to participate in a variety of regional and national transmission planning bodies and is a past president of the National Association of Regulatory Utility Commissioners.

For more information about the Power Council and to review the agenda and supporting documents for next week’s meeting, go to www.nwcouncil.org

III: BLM Releases More Information on Power Line’s Impacts on Sage Grouse

It’s no secret that impacts to sage grouse may be the Achilles’ heel for the giant, 1,000-mile Gateway West transmission line proposed by Idaho Power and Rocky Mountain Power/PacifiCorp for Wyoming and Idaho, so last week the Bureau of Land Management released yet more information for public review on how the line might affect the birds and what can be done about it.

BLM’s release of the new habitat equivalency analysis (HEA) as part of its environmental review of the transmission line proposal is sure to draw close scrutiny in light of serious concerns raised about the project’s environmental impact on wildlife. Declining sage grouse populations have prompted the federal government to consider whether the birds should be placed on the federal endangered species list to secure more protections to help the species’ recovery. Sage grouse are already considered a “candidate” species for federal protection.

The government has released and taken public comment on its draft environmental impact statement (DEIS) review of the Gateway West project, and will be taking comments on this recent analysis through Aug. 3 as it works toward completion of its final EIS.

The BLM held public information meetings in Boise and in Cheyenne, WY, in February 2012 to provide background on the history and development of the sage grouse analysis in the Gateway West DEIS. Issues addressed in the Gateway West DEIS include evaluations of direct and indirect impacts on the birds by the proposed transmission line; addressing direct loss of the birds; and what if any mitigation measures can be taken to reduce impacts. New for public review is the “mitigation plan” put forth by the utility proponents of the project.

Also last February, the utilities submitted proposed revisions to the transmission line’s proposed route from near Glenrock, WY, to Murphy in southwest Idaho southwest of Boise.

To review the latest additions to the Gateway West DEIS, go to BLM’s main Gateway West website at www.wy.blm.gov/nepa/cfodocs/gateway_west

On The Agenda:

► The Bonneville Power Administration (BPA) will hold a “listening session” on the implementation of the 1964 Columbia River Treaty (CRT) July 13 at the Owyhee Plaza Hotel in Boise. The original treaty was written to address primarily hydropower and flood control issues associated with the Columbia River. However, it is expected that many other issues that have arisen since the CRT was adopted, notably fish and wildlife issues dealing with such things as endangered salmon runs, will likely come up as the treaty is revisited and modern-day issues are taken up. The United States is represented in the treaty revision efforts by the what’s known as the “U.S. Entity,” which is represented by the Bonneville Power Administration (BPA) and the U.S. Army Corps of Engineers. However, this review of the CRT will see a much greater participation by 15 tribal governments and each of the four Northwest states.

“The overarching challenge in the review will be to adequately consider the ecosystem, environmental, irrigation, navigation, and other issues that were not addressed in the original treaty, and balance those interests with the continuing need for flood control and power benefits,” the U.S. agencies said in announcing the review process. “The ultimate objective is to submit a recommendation to the State Department in September 2013, one year before either nation can transmit its intention to terminate the treaty, in order to provide federal authorities sufficient time to deliberate and review that recommendation.”

The Columbia River is the fourth largest river in North America and is also the nation’s largest power-producing river. The river’s headwaters are in British Columbia, although only 15 percent of the Columbia River Basin is in Canada. Both countries have major interests in the river and its operations, with the United States reliant on Canadian flood control projects for flood prevention and Canada similarly reliant on hydropower systems in the United States for electricity.

For more information on the CRT and this process, go to www.crt2014-2024review.gov

► The Northwest Power and Conservation Council’s July meeting will be held July 10-11 at the Hampton Inn in downtown Boise (see above).  The Power Council works on region-wide energy issues and fish and wildlife issues associated with the impacts of the federal Columbia and Snake River hydropower system. The Council’s agenda, with supporting documents, is posted on its website at www.nwcouncil.org

► The Idaho Public Utilities Commission holds its next decision meetings on July 9, 16, and 30. Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us. The meetings typically start at 1:30 p.m.

Download a pdf copy of this report here.