Idaho Energy Update
December 11, 2009
Idaho Power has prepared its draft 2009 Integrated Resource Plan, which will guide the company’s energy future over the next 20 years and which will be presented to the Idaho PUC just before Christmas. The PUC is also reviewing Idaho Power’s request to make permanent its energy-saving “decoupling” program, and is taking comments through Dec. 22 on the company’s proposed rate hike moratorium. Also, Nordic Windpower in Pocatello shipped its first turbines, and the Office of Energy Resources sent $1.5 million to 15 recipients for clean energy projects. For more on these developments, please read on.
Thanks as always, and if you have any calendar items, please send them along!
Clean Energy Program Director
Snake River Alliance
I: Idaho Power Nears Completion of Resource Plan
Idaho Power is nearing completion of its every-other-year resource plan, settling on a “preferred portfolio” with an eye to filing the plan with the Public Utilities Commission before Christmas.
The company’s Integrated Resource Plan Advisory Committee (IRPAC) held its final meeting Thursday to review Idaho Power’s draft resource plan, and members will submit comments to the utility before the plan is finalized and sent to the PUC. Idaho’s three regulated electric utilities file IRPs every other year. The plans, which are not binding and which are “acknowledged” by the PUC, serve as a roadmap of how utilities will meet their energy needs for the coming decade and also for the decade after that.
Given the energy picture can change dramatically, the IRP’s first 10 years are most closely scrutinized. Utilities spend up to a year preparing the plans, analyzing a variety of energy “portfolios” and economic and sales forecasts before settling on a preferred plan.
Idaho Power’s draft 2009 IRP’s preferred portfolio projects the utility will add 540MW of new generation from 2010-2019 and another 425MW of transmission capacity during the same period. It also estimates that by 2012, the company’s demand response programs will shave 380MW – more than the amount to be generated by Idaho Power’s proposed Langley Gulch natural gas plant. The company is also proposing a new solar pilot project as part of the plan.
Specifically, Idaho Power expects to add 150MW of new wind generation and the 300MW from the Langley Gulch gas plant by 2012; another 20MW of geothermal generation in 2012; 49MW from a new turbine at the Shoshone Falls hydro plant in Twin Falls; 250MW in new transmission capacity from the proposed Boardman (Ore.) to Hemingway line to southwest Idaho in 2015; 20MW of additional geothermal in 2016; and another 175MW of added transmission from the Boardman-Hemingway line in 2017. The outlying years in the following decade anticipate significant new natural gas generation as well as some additional wind and transmission.
While the first decade is a relatively green power portfolio, the second decade is far from certain. According to the draft power plan, the company’s gas-heavy power portfolio could revert back to old-fashioned, carbon-heavy coal-fired generation in the event federal greenhouse gas regulations don’t place an adequate price on carbon emissions.
The PUC will set a public comment period for early next year after Idaho Power files the IRP. To review the draft IRP and to review documents from prior IRPAC meetings, visit http://www.idahopower.com/AboutUs/PlanningForFuture/irp/2009/default.cfm
II: PUC Considering Making Idaho Power “Decoupling” Program Permanent
The Idaho Public Utilities Commission will soon be taking comments on Idaho Power’s request to make permanent its three-year pilot program to remove disincentives that could hinder energy efficiency measures. Known as a “fixed cost adjustment” but more broadly as “decoupling,” the program contains mechanisms to break the link between power sales and the company’s earnings.
Utilities have historically lacked incentives to promote energy-saving measures, because those measures generally lead to reduced sales. Decoupling allows the utility to come to the PUC every year to recover its fixed costs through a surcharge if its power sales declined due to conservation measures. If the company collects more than expected, customers receive a credit. In the first year, the mechanism resulted in a credit of about 48 cents on an average residential bill. In the second year, there was a 56-cent surcharge. Idaho Power says the mechanism, along with an increase in its energy efficiency tariff “rider,” have resulted in significant new energy savings.
The national AARP says it opposes decoupling because it can add to customer bills. Supporters of the mechanism, including Idaho Power, counter that while a very small surcharge is possible due to reduce power sales, customers benefit from bill reductions thanks to the energy savings.
The PUC set a Dec. 16 deadline for parties who want to participate in hearings or file testimony. Later, it will set a comment period for those who want to comment on the case but not participate formally as an intervenor. For more information on the case, visit www.puc.idaho.gov and then “file room” and then “electric cases” and scroll to IPC-E-09-28.
III: PUC Taking Comments through Dec. 22 on Idaho Power Rate Moratorium
The PUC is taking comments through Dec. 22 on an agreement between Idaho Power and various customer groups that would place a moratorium on new rate cases through January 2012 in exchange for a better chance to earn its allowed rate of return.
The deal was reached between the state’s largest electric utility and such customer groups as 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.
Rather than file a general rate case, which lately Idaho Power does every year or so, 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.
In addition, the stipulation would allow Idaho Power to speed up its use of the customer share of the tax credits it receives on its capital investments. Those customer groups that participated in the agreement said giving the company a share of the expected PCA bonus is worth it in exchange for having stable rates over the next two years.
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.
IV: Nordic Windpower Ships First Turbines from Pocatello
Pocatello’s Nordic Windpower said Monday it has shipped the first of its new two-bladed turbines, sending three to Uruguay and two to Indiana.
“Nordic Windpower has emerged as the only wind turbine manufacturing, sales and service company purely focused on the community and distributed wind energy sector,” company CEO Tom Carbone said as three turbines headed from Pocatello to a 13MW wind farm in Paraje Ojos de Agua in Uruguay.
Unlike the far larger 1.5MW turbines that can be seen along I-84 between Mountain Home and Hagerman, Nordic Windpower’s N1000 turbines have two blades rather than three, generate 1MW each, and are less expensive than the larger machines sending power to Idaho utilities. Nordic’s turbines are targeted at schools, small wind farms, military bases, community-based energy projects and similar customers. The company has offices in Berkeley, Calif., and Bristol, United Kingdom, but its new manufacturing plant is in Pocatello.
“Our customers recognize the value of the N1000 wind turbine as a lighter weight, simple and highly reliable wind turbine,” Carbone said. “It is ideally suited for community and distributed wind power applications that want to adopt clean and renewable wind energy easily and affordably.”
For information on Nordic Wind, visit www.nordicwindpower.com
V: Office of Energy Resources Distributes Energy Grants
The Idaho Office of Energy Resources said Wednesday it has awarded $1.5 million in federal stimulus money to 12 recipients as part of OER”s Renewable Energy Enterprise Zones program. The agency said it received 26 grant requests and will continue to seek funds for those who did not receive grants in this round.
Grant recipients will use the money for such projects as producing electricity from landfill gas in Kootenai and Cassia counties to installing solar systems in McCall, developing woody biomass combined heat and power systems in Boise and Clearwater counties, and studying converting Amalgamated Sugar’s Nampa facility from coal to biogas as a fuel.
For a list of the grant recipients, visit www.energy.idaho.gov and then “stimulus” and then “renewable energy enterprise zones.”
On The Agenda:
► The Public Utilities Commission holds its next decision meetings on Dec. 14, 21, and Jan. 4. 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.