Idaho Energy Update
Feb. 21, 2011
Idaho wind developers received a boost last week in the form of a new study by consulting firm Idaho Economics that reports far greater than projected economic benefits from wind development in the state. The report comes at a critical time as Idaho lawmakers seemed poised to let a critical sales tax rebate for renewable energy developments lapse when it’s due to expire this July. On the efficiency front, the Idaho Office of Energy Resources reports it’s not too late to tap into the rebate program for new energy efficient appliance purchases. And the Payette County Commission is scheduled to hold hearings Tuesday on appeals of the county’s favorable review of a rezoning request by a would-be nuclear reactor developer who’s also in hot water with the U.S. Securities and Exchange Commission. Finally, the Idaho PUC has approved contracts between Idaho Power and four new wind farms, as well as a renewed agreement with a small hydropower developer near Jerome; and a bill has been introduced in the Senate to allow school districts to receive on-bill credit for excess energy they produce on their own. It’ll get a hearing on Wednesday.
For more on these and other developments, read on. Thanks as always, and if you have any calendar items, please send them along!
Clean Energy Program Director
Snake River Alliance
I: New Report Touts Economic Impacts of Idaho Wind Developments
Wind power investments in Idaho will generate scores of new jobs and provide tens of millions of dollars in new tax revenues, according to a new study by veteran Idaho economist John Church and his firm, Idaho Economics.
Idaho Economics’ report comes within a week after the State Tax Commission retracted a grave warning that Idaho’s five-year-old sales tax rebate for renewable energy projects threatened to blow a $47 million hole in the Idaho’s tax revenues over the coming two years. The Tax Commission’s initial report stunned Idaho’s renewable energy industry just as the Legislature was about to consider whether to extend the renewables energy tax rebate, which expires this summer. The Tax Commission on Valentine’s Day retracted its forecast, saying that in fact the rebates due to renewable energy developers will be a “net neutral event” with little or no impact on state general fund revenues.
Coupled with the Tax Commission’s backtracking on the rebates’ budget impacts, the Church report will give renewable energy supporters fresh ammunition in their drive to renew sales tax rebates that industry representatives say are critical to the future of new wind, solar, and other renewable energy projects in Idaho.
The economics report uses a 300 megawatt wind project by Boise-based wind developer Exergy Development to project its impacts in a county that would host the wind farms. Partnering with energy giant General Electric, Exergy’s $500 million, 11-farm wind development across southern Idaho was energized last month and is providing 183MW of nameplate or maximum electricity for Idaho Power from 122 turbines.
Over the course of its 25-year operational phase, such a project would generate $120 million in additional tax revenues, including $6.7 million in additional Idaho personal income tax revenues, $6.3 million in additional Idaho general sales tax revenues, $38.6 million in additional Idaho corporate income tax revenues, $2.2 million in vehicle and fuel tax revenues, $2 million in Idaho product tax revenues, and $55.9 million in payments in lieu of taxes (PILT) revenues to local governments. The report said the wind projects would also provide about $50 million in royalties to private landowners where the projects are located.
“The ongoing operations of the 300MW Exergy Developments wind energy generation will, through direct and secondary economic impacts, create and maintain an additional 120 jobs each ear for the next 25 years in the state of Idaho,” the report said. “The majority of these additional jobs will be in rural Idaho where employment gains have been difficult to achieve.”
II: OER Says Rebates Still Available for Energy Star Appliance Purchases
The state’s Office of Energy Resources still has funds available from its $1.2 million appliance rebate program, which uses federal stimulus dollars for incentives to Idahoans who buy qualifying appliances.
OER said the appliance rebate program will run through March 31 or until the rebate funds are exhausted. The program has paid out 15,000 rebates so far, with most going toward purchases of clothes washers, refrigerators and dishwashers.
“This is a great opportunity for Idahoans to combine the federal tax credit with the state rebate program on heating appliances to significantly decrease their utility bills,” OER Administrator Paul Kjellander said in a news release. “Consumers must act quickly if they want to take advantage of both incentives.”
Besides the state rebate program, OER said furnaces, air-source heat pumps, and hot water heaters qualify for a federal tax credit, which is worth 10 percent of the cost up to $500. Examples of the state rebates for appliances certified by the federal Energy Star program include $75 for clothes washers and refrigerators, $50 for dishwashers, and $25 for room air conditioners. Higher rebates are offered for electric heat pump water heaters, gas storage water heaters, and solar water heaters, among other things.
For more information, see OER’s website at: http://www.energy.idaho.gov/
III: Payette County Commission to Hear Appeals of Nuke Plant Decisions
The Payette County Commission will hold two appeal hearings over the county Planning and Zoning Commission’s recommended approval of a rezoning request by would-be nuclear reactor developer Alternate Energy Holdings, Inc.
The appeal hearings are scheduled for 10:45 a.m. and include a hearing requested by Betty Bercik regarding the P&Z Commission’s favorable rezone recommendation for the property that AEHI says it plans to use for the reactor. Another hearing was requested by Clifford Morgan on behalf of the Little Willow Irrigation District on similar issues.
The Payette County Commission suspended consideration of AEHI’s rezoning request shortly after the U.S. Securities and Exchange Commission froze trading of AEHI stock and then secured a temporary court order freezing the company’s assets in the wake of a far-reaching SEC fraud complaint against AEHI and its executives and related companies. In a federal court case that has yet to be set for trial, the SEC has accused AEHI and officers Don Gillispie and Jennifer Ransom of taking several actions to manipulate stock prices and engaging in questionable stock sales and other activities that in part supported a lavish lifestyle at the expense of bilked investors. While a federal judge lifted the freeze on AEHI’s assets, he also required AEHI report on its financial activities to the SEC, including any expenditure of $2,500 or more.
To review the SEC’s complaint against AEHI, go to: http://www.sec.gov/news/press/2010/2010-249.htm
IV: PUC Approves Idaho Power Deals with Four Wind Projects, Small Hydro Project
The Public Utilities Commission has signed off on contracts between Idaho Power and four wind projects being developed by Boise-based Exergy Development, which as mentioned above recently energized 11 wind projects across southern Idaho and is generating 183 megawatts for Idaho Power.
According to the PUC, the Commission approved the four 10-megawatt wind farm project contracts in the Rogerson area south of Twin Falls. The Commission said it acted in favor of the contracts because they were filed four days before the Commission-imposed Dec. 14 cutoff for new wind and solar projects to be reviewed during a pending investigation requested by Idaho Power, Rocky Mountain Power and Avista Utilities. The three electric utilities claim they are getting so much new wind on their respective systems that the reliability of those systems could be strained. Industry and other interests reject the utilities’ claims, and the PUC is in the midst of complex set of cases designed to address renewable energy cost and other considerations of adding wind and solar power to utility portfolios.
Idaho Power agreed these four Exergy projects should be approved by the PUC under the requirements of the 1978 Public Utility Regulatory Policies Act (PURPA), which was passed by Congress to encourage development of small renewable energy projects. Under the terms of these four contracts, Idaho Power said it can curtail generation from the wind farms without compensating the project owners if the added power comes at times when the utility already has adequate power to meet its demand and without negatively impact existing hydropower, coal or other company-owned generation resources.
These are likely to be among the last wind projects to receive PUC contract approval for some time – or at least until the utilities’ cases before the PUC are resolved. For more information on these projects, go to www.puc.idaho.gov and then “File Room” and then “Electric Cases” and scroll to Case Numbers IPC-E-10-47, 48, 49, and 50.
In an unrelated case, the PUC also approved an Idaho Power contract with the 8MW Hazelton A Hydroelectric Project near Jerome. The agreement renews a 1989 contract that expired last Dec. 31. The new 15-year agreement features provisions to adjust rates for high and low load seasons of the year. For more information on this case, go to the pages above and scroll to IPC-E-10-45.
On The Agenda:
► The Senate State Affairs Committee will hold a hearing Wednesday, Feb. 23, on S1112, legislation dealing with school districts and their ability to earn credits for excess power they produce (see below). The Committee meets at 8 a.m. in Room WW55.
► The Idaho Public Utilities Commission holds its next decision meetings on Feb. 22 and 28 and March 7, 14, and 21. 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 Western Governors’ Association’s Industrial Energy Efficiency Summit will be held March 16 and 17 in Boise. The meeting, to be held at the Boise Centre and hosted by current WGA Chairman Gov. C.L. “Butch” Otter, includes sessions on industrial energy efficiency success stories, utility efficiency programs, regulatory policies that promote efficiency programs, and regional program resources. For more information, including the full agenda and registration information, go to: http://www.westgov.org/
►The Northwest Power and Conservation Council’s March meeting will be in Boise on March 8-9. The agenda will be announced before the meeting, as will the time and place. The Power Council is made up of eight members appointed by the governors of the four Pacific Northwest states and is the region’s leading authority on planning for the Northwest’s electricity needs, as well as the protection of fish and other wildlife. For information about the Council, go to http://www.nwcouncil.org/
IN THE LEGISLATURE: Geothermal Bills Moving Quickly
As expected, the House quickly approved a package of bills designed to remove some hurdles in approving state leases for geothermal projects on state endowment lands. Also, a bill to let school districts receive credit on their bills for energy they produce but don’t need has been introduced in the Senate.
Each week, we’ll post thumbnail summaries on where the bills stand. Text of bills can be found by going to the Legislature’s main site at www.legislature.idaho.gov and clicking the “Bill Center” link and then “Legislation By Subject” and scrolling to the categories in which you’re interested in. Such as “Energy,” “Environment” or “Utilities.” You then click the link to the bill for more information. The Energy section will look something like this:
Energy/environment/technology, interim study comm HCR004
Renewable energy projects, expedite permits S1035
School district, electric energy, receive credits S1112
Here’s a look at the status of pending bills:
Grow Green Idaho Jobs Act (S1035):
Calls on state and local government jurisdictions to “expedite” permit applications for renewable energy projects and to hold public meeting on the applications. Says the “permitting and approval of such projects shall be a priority of each state agency or political subdivision.” Requires local governments and the state to expedite permits for renewable energy projects and to provide for public meetings on such applications in an accelerated fashion.
Status: Awaiting hearing in Senate State Affairs.
Sponsor(s): Sens. Edgar Malapeai, Les Bock, Michelle Stennett, Elliot Werk, and Dianne Bilyeu. (332-1351).
Interim Energy Committee Renewal (HCR4):
Joint House-Senate resolution to renew the interim Energy, Environment and Technology Committee, which will convene after the 2011 session to study energy and related matters. This interim committee has been authorized to meet for the past 14 years, and this year it will be tasked with the Legislature’s first five-year review of the 2007 Idaho Energy Plan. Much of the 2007 plan has been implemented only in part or not at all, so the committee will review which of the dozens of plan recommendations should be updated or dropped from the plan – as well as whether new recommendations should be added.
Status: Approved by both chambers.
Sponsor(s): Interim Committee Co-Chairs Rep. George Eskridge and Sen. Curt McKenzie.
Geothermal Development on State Lands (H52, 52, 54, & 56):
Mostly technical but nonetheless important bills by the Department of Lands designed to remove certain barriers to geothermal energy development on state lands. H52 amends Idaho code to lengthen the maximum lease period for geothermal leases from the current 10 years to 49 years, similar to the change already made for wind. The extension is needed to provide time for geothermal energy developers of projects to recover their investments H53 would amend Idaho code to allow the state to negotiate royalty rates for geothermal projects on state lands, rather than be forced to use the current minimum annual rates of 25 cents per acre and royalties of not less than 10 percent of the geothermal resource produced. The change is needed to allow latitude in negotiating rates depending on the kinds of geothermal uses proposed. H54 amends Idaho code that restricts the size of geothermal leases on state lands. Currently, code restricts leases to a single “section”, or 640 acres, when in practice geothermal projects can cover thousands of acres. This change allows the state to negotiate one lease rather than several leases for each section of land. H56 modifies state bonding procedures to allow for lease performance in bonding and also to reflect bonding for actual surface disturbance without duplicating existing bonding requirements by the Department of Water Resources.
Status: The first three bills unanimously passed the House and have been sent to the Senate; the fourth bill was set for a final vote today.
Sponsor(s): Bob Brammer, Idaho Department of Lands; 334-0239.
School Districts and Renewable Energy (S1112):
Allows local school districts to exchange or receive credits on their bill for excess thermal or chilled water or electric energy not needed by the school district. As more school districts look to clean and renewable energy resources such as wind, solar, biomass and heat pumps, they want to be able to receive credit for excess amounts of energy they produce during times they don’t need as much. This bill would allow them to receive credits on their energy bills for unneeded energy.
Status: Hearing in Senate State Affairs set for Wednesday, Feb. 23, in Room WW55.
Sponsor(s): Sen. Chuck Winder