Idaho Energy Update
January 15, 2010
The Idaho PUC has accepted an unusual settlement between Idaho Power and several customer groups that sets a moratorium on future rate cases until 2012. Meanwhile, the PUC and the Office of Energy Resources have filed their report to the Legislature on how they believe they are implementing Idaho’s 2007 Energy Plan, and the Payette County Planning and Zoning Commission approved a change to the county’s comprehensive plan that could allow for an eventual rezoning of property as a step toward development of a nuclear reactor near Payette. Finally, Micron Technology has signed a deal with an Australian firm to get into the solar PV manufacturing business at Micron’s Boise campus. For more on these developments, please read on. Also, beginning with your next Idaho Energy Update, we will be sending them out on Mondays in order to capture up-to-date agendas for the Idaho Public Utilities Commission and the Idaho Legislature.
Thanks as always, and if you have any calendar items, please send them along!
Clean Energy Program Director
Snake River Alliance
I: PUC Accepts Idaho Power Rate Hike Moratorium
The Idaho Public Utilities Commission has accepted a settlement agreement between Idaho Power and some of its customer groups that would put a temporary moratorium on future rate cases in exchange for new opportunities for the company to realize a better chance to earn its allowed rate of return.
The deal was reached between the state’s largest electric utility and the Industrial Customers of Idaho Power, the Community Action Partnership Association of Idaho, the Idaho Irrigation Pumpers Association, Micron Technology, the U.S. Department of Energy, and the Kroger Company, which does business in Idaho as Fred Meyer. Rather than file a general rate case, the agreement calls for a freeze in general rate increases through the end of 2011. In exchange, Idaho Power would receive, among other things, a share of the annual “power cost adjustment,” which reflects the company’s costs to generate power. Power cost adjustment cases are filed each year. In years of abundant stream flows that allow increased use of relatively cheap hydropower, customers receive a discount on their bills. But in times of poor water flows, customers pay a surcharge to offset the added costs of acquiring power. Under the terms of this proposal, Idaho Power would receive a piece of what is expected to be a large ($160 million or more) favorable PCA due to this year’s good stream flows.
The PUC’s order said stable earnings are important for Idaho Power to secure financing for future investments at reasonable interest rates: “The company’s increased financial stability benefits customers by enabling the company to delay rate cases and potentially lower interest costs. It is beneficial to customers and to Idaho Power if the company can enhance its ability to stabilize earning in the near term, strengthening the company’s position in the financial markets and enabling it to reduce the cost of borrowing funds for operations or plant investment.”
The settlement agreement does not affect Idaho Power’s ability to file for other rate adjustments such as future PCAs, energy efficiency tariff increases, adjustments to the company’s fixed costs, or recovery of costs related to the company’s new advanced meters, which are being installed across its service territory.
To review Idaho Power’s application and other documents in the case, and for information on how to submit comments, visit www.puc.idaho.gov and then “file room” and then “electric cases” and scroll to IPC-E-09-30.
II: Energy Resources, PUC, File Energy Plan Status Update with Legislature
The Idaho Office of Energy Resources and the Idaho Public Utilities Commission have filed their first joint report to the Idaho Legislature, outlining how they believe they have progressed in implementing many of the recommendations in the 2007 Idaho Energy Plan.
The report, filed by PUC President Jim Kempton and OER Director Paul Kjellander, is required every other year by the energy plan that the Idaho Legislature adopted in 2007 after a year’s worth of meetings. It was Idaho’s first energy plan in almost 25 years, and contains recommendations to the Legislature, the PUC, the governor’s office and what’s now the Office of Energy Resources, and utilities on how Idaho can adopt more sustainable electricity, natural gas, and transportation energy policies.
“You will find that we firmly believe the State is making progress in meeting many of the plan’s objectives,” the two wrote in their cover letter.”We also do not hesitate to point out those areas where some of the plan’s recommendations are best met with other approaches and methodologies.”
To review the document, visit the PUC’s web site at www.puc.idaho.gov and click its link in the “Hot” section on the front page.
III: Payette County Approves Nuke Developer’s Request for Comp Plan Change
The Payette County Planning and Zoning Commission on Thursday night approved in a 9-2 vote a change in the county’s comprehensive plan that would be needed before the would-be developer of an Idaho nuclear can pursue a zoning change for his unfunded reactor proposal.
While some media were reporting Thursday’s decision was to approve the rezoning, that decision in fact won’t come for months, and the bar will be set extremely high for speculative developer Alternate Energy Holdings to justify converting Payette County agricultural land to an industrial use for its reactor scheme. Significant local opposition is galvanizing against the project for a variety of reasons, including the project’s need for massive transmission towers and lines, vast amounts of water, and other burdens on the local landscape and infrastructure.
Payette County P&Z Commissioner Don Dressen was quoted Friday in the Idaho Business Review as saying this was only the very beginning of a process that could take months. And that assumes AEHI is still pitching its nuclear reactor by then. “That’s not going to happen overnight,” Dressen was quoted as telling the IBR. “That can run to months, maybe a year. It would surprise me if it was all completed in a six-month period.”
The Payette County action comes amid mounting confusion over what kind of reactor AEHI plans to use for projects that it has pitched in three Idaho counties so far. AEHI touted a different reactor design when it was in Owyhee County and never identified one when it relocated to Elmore County. AEHI CEO Don Gillispie touted his recent trip to South Korea and claimed a deal was imminent early this year with Korea Electric Power Corp. to import the state-own firm’s APR-1400 reactor into Idaho and Colorado. However, KEPCO officials quickly downplayed the likelihood of that happening, saying AEHI’s low market capitalization and its lack of money made a deal unlikely.
At that point, AEHI quickly issued a statement on its blog saying it might not use the South Korean reactor design – at least the second such design it claimed it would use since arriving in Idaho in late 2006. “There are other reactors on the market,” Gillispie wrote on his blog on Jan. 13. “So the plant will go forward with or without a Korean-made reactor.”
IV: Micron Partners with Aussie Firm on Solar Manufacturing Project
Boise-based Micron Technology has entered into a partnership with Australian-based Origin Energy to develop a new solar power technology, The Idaho Statesman reported Friday. According to the story, Micron and Origin Energy signed an agreement in December to manufacture Origin’s unique photovoltaic solar components. The Statesman said the solar cells have been manufactured on a test basis for the past month.
“It was clear that combining or semiconductor manufacturing expertise with Origin Energy’s solar experience could result in a powerful partnership,” Micron CEO Steve Appleton and CEO Marc Durcan were quoted as saying in a memo.
This development comes on the heels of an announcement last year that Micron is also getting into the high-tech LED lighting field with the help of a $5 million federal energy stimulus grant. Micron’s presence in Boise has diminished significantly in recent years as its work force has shrunk from more than 11,000 workers in Idaho to about 5,000 in the wake of a declining market for its bread-and-butter memory chips.
On The Agenda:
► The Public Utilities Commission holds its next decision meetings on Jan. 19 and 25. 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.
►The Idaho Environmental Forum holds its annual legislative preview on Jan. 26. The half-day event begins with a panel discussing energy issues at 1:30. Subsequent panels will explore budget impact on Idaho natural resource agencies, as well as the prospects for environmental legislation in the 2010 Legislature.
The event will be in the Crystal Ballroom on the 2nd floor of the Hoff Building at 802 W. Bannock in downtown Boise. Tickets are $20, or $15 for sponsors and members or staff of sponsoring organizations. For more information, visit www.idahoenvironmentalforum.org