Idaho Energy Update
Feb. 13, 2009
The Idaho Office of Energy Resources this week introduced legislation to create up to 20 “renewable energy enterprise zones” across Idaho, but the bill will have to survive tough scrutiny from a House tax panel dubious about any bills that come with a taxpayer tab. Also in the House, a measure to renew the interim energy committee is well on its way. Meanwhile, a small utility in north Idaho wants to get a chunk of money in unclaimed deposits in the hands of low-income ratepayers in its territory; the PUC is tackling Avista’s new rate case, and the PUC has endorsed Idaho Power’s plans to deploy its smart meters across its service territory over the next three years at a cost of $70 million plus. For information on these developments and others, please read on.
Thanks as always, and if you have any calendar items, please send them my way!
Clean Energy Program Director
Snake River Alliance
I: Legislature: OER Introduces Renewable Energy Zones Bill
The Office of Energy Resources on Thursday introduced legislation to create up to 20 “Renewable Energy Enterprise Zones” to incentivize development of renewable energy projects in specific regions across the state. While the House Revenue and Taxation Committee agreed to introduce the measure presented by OER Director Paul Kjellander, its fate is far from certain. The tax panel this year is loath to approve legislation that could have a fiscal impact on the state’s general fund, and it remains to be seen whether this measure might. The OER plan would begin by designating four such renewable energy zones, including one in the Magic Valley designed to promote development of a manure digester to deal with waste from the Valley’s massive dairies. Other zones could be established to spur development of generation resources using biomass, wood waste, wind, solar geothermal or low-impact hydro. The Public Utilities Commission would be in charge of creating the zones, and the projects would benefit from an income tax credit for renewable energy generation; an income tax credit for capital investments; and a property tax exemption. Whether tax-writers want to grant those breaks will decide whether this bill moves forward.
Also this week, the House Environment, Energy and Technology introduced a resolution by Interim Energy Committee Co-Chair Rep. George Eskridge to extend the interim committee into this year. The panel was first authorized 12 years ago and has been extended ever since. In 2006 and 2007, it led the development of the 2007 Idaho Energy Plan, and Eskridge said the panel needs to be reconstituted to ensure components of the energy plan are implemented. So far, only a few of the plan’s recommendations have been implemented.
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 “Legislation” link and then “Legislative Topic Index of Bills” 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 currently looks like this:
ELECTRICITY AND ELECTRICIANSELECTRICITY AND ELECTRICIANS
Electric facility construction, priority processing H0007
Electrical apprentice registration, license, fees H0111
Energy facility construction, state siting panel S1027
Energy/environment/technology, legislative study comm HCR016
Public utility, new facilities, charge customers H0052
Renewable energy, enterprise zones, tax incentives H0122
For Internet streaming of budget committee meetings and House and Senate floor sessions, go to http://idahoptv.org/leglive/. Meanwhile, here’s a look at the status of pending bills:
Priority Designation for Transmission Projects (H7):
Allows the Public Utilities Commission to designate certain transmission projects as “priority” for purposes of expediting review by state agencies. Such request would be made by developer of the transmission project. The bill wouldn’t affect local siting decision-making by counties and other government entities, nor would it affect existing federal review of transmission projects.
Status: Approved by the House 69-0-1 and on Feb. 12 by the Senate 31-0-4 and returned to the House before being sent to the governor.
Sponsor(s): Office of Energy Resources Director Paul Kjellander, 287-4903.
Energy Facility Siting (S1027):
Sets up a process for state review of applications for siting and expansion of major energy facilities (50MW or more) in Idaho. The bill sets up procedures to create a siting authority and the process by which developers of energy projects would seek state approval for construction. Similar Democratic efforts to create a state “siting authority” for energy projects have failed in past legislative sessions.
Status: Introduced in the Senate on Friday, Jan. 23. Hearing yet to be scheduled in Senate State Affairs.
Sponsors: Sens. Elliot Werk, Kate Kelly, Les Bock, Nicole LeFavour, Diane Bilyeu, Richard Sagness, and Jon Thorson.
One-Time Connection Charges (H52):
Allows the Public Utilities Commission to set one-time hook-up fees for new customers to recover some of the costs of investments needed to provide power to those customers. The “non-recurring charges” are designed to avoid having existing utility customers foot the bill to provide services to new customers.
Status: Introduced in House State Affairs and awaiting hearing in that committee.
Sponsors: Rep. John Stevenson
Interim Energy Committee Renewal (HCR16):
Extends joint House-Senate Interim Energy, Environment and Technology Committee for 2009. Key issues before the interim committee will be reviewing the 2007 Idaho Energy Plan to determine how to implement its recommendations, few of which have been acted upon.
Status: Introduced by House Environment, Energy and Technology on Feb. 12 and awaiting hearing.
Sponsor: Rep. George Eskridge
Renewable Energy Enterprise Zones (H122)
Would authorize the Public Utilities Commission to designate up to 20 Renewable Energy Enterprise Zones around the state. Also includes a suite of income and property tax incentives to encourage development of renewable energy projects, including anaerobic digesters, biomass, wood waste, wind, solar, geothermal, and low-impact hydro.
Status: Introduced in House Revenue and Taxation on Feb. 12 and awaiting hearing.
Sponsor: Office of Energy Resources Director Paul Kjellander.
II: PUC Welcomes Northern Lights Co-Op Offer of Funds
It’s a rare occasion for an unregulated Idaho utility to appear before the Idaho Public Utilities Commission, but PUC members were delighted to have Northern Lights, Inc. knock on their door recently.
Northern Lights, Inc., which describes itself as the oldest rural electric cooperative west of the Mississippi, filed an application to ask the PUC for certification to allow it to donate $3,500 in unclaimed deposit refunds to help provide energy assistance to needy customers in its service area. The PUC regulates investor-owned utilities such as Idaho Power, Avista and Rocky Mountain Power – but not the state’s 25-plus municipal-owned and cooperative utilities, many of which are small and serve rural areas.
So it was a surprise when Northern Lights, based in Sagle and serving northern Idaho, northeast Washington, and western Montana, opened a case before the PUC earlier this month. “Currently, we have $3,500 that needs to be given to a financial assistance program or turned over to the state as unclaimed property,” the company wrote the PUC. “Our goal is to give those funds to Community Action Partnership, the local administrator for the (Low Income Home Energy Assistance Program, or LIHEAP), who in turn could designate those funds to Northern Light’s members who are in need of financial assistance.”
At their meeting on Monday at which they approved the request, commissioners welcomed the application – and then some.
“I really like this proposal,” Commissioner Jim Kempton said, adding it would be great if other cooperative utilities received a letter about Northern Lights’ idea in hopes it spreads. “This is the first time I ever heard of it,” said Commissioner Marsha Smith, who added it might also be a good idea to send such a letter to Idaho’s Big Three electric utilities and suggest such unclaimed deposits would be better spent helping low-income customers rather than sending it to the state’s unclaimed property fund.
To review the Northern Lights application, go to www.puc.idaho.gov, and then click “File Room” and then “Electric Cases” and then IPC-E-08-10.
III: PUC Starts Avista Rate Case
The Idaho Power rate case behind it, the PUC has begun working on the latest rate case by Avista Utilities, which serves parts of northern Idaho and also eastern Washington, where last week hundreds of furious ratepayers turned out to protect the company’s proposed rate hikes.
Avista wants to raise its electric rates by an average of 7.8 percent, and its gas rates by 3 percent, but many of its 121,000 electric customers and 93,000 gas customers in northern Idaho are already giving their legislators an earful – complaining the rate hikes are more than they can bear.
Idaho PUC President Mack Redford got a taste of that distaste when he appeared before the Idaho Legislature’s Joint Finance-Appropriations Committee (JFAC) Friday morning to present his agency’s 2010 budget. After running through the standard budget presentation and list of his agency’s priorities, Redford was confronted by a question from Sen. Joyce Broadsword, R-Sagle, who wanted to know whether the PUC was getting the same pushback about the Avista case as she was in terms of complaints.
“It’s been fairly brisk,” Redford said of the complaints about the proposed Avista rate hikes. He added moments later that “there are some horrendous issues coming up” such as hydropower relicensing expenses and other costs that will likely continue to hammer Idaho electricity ratepayers.”I wish we could tell everyone things are normal,” he said. But they’re not.”
Responding to a question from Rep. George Eskridge, R-Dover, about the costs of relicensing the dams that provide so much power to Idaho Power on the Snake River and Avista on the Spokane River, Redford said Idaho Power has already spent about $100 million on its Hell’s Canyon relicensing.
“I wish I could say renewable resources are online enough (to meet Idaho’s energy needs),” Redford said. But they’re not. Instead, Idaho utilities are embracing more natural gas, which is subject to supply and cost uncertainties.
Sen. Shawn Keough, R-Sandpoint, brought the conversation back to the mad-as-hell Avista customers she’s hearing from in northern Idaho. She noted hundreds of protesters challenged Avista in Spokane and many of her constituents are also angry about the proposed rate hikes. But Washington state has a consumer advocate to look after consumers, Keough said, and Idaho does not.
If Avista were to receive its 7.8 percent rate increase, the average customer’s electric bill would rise about $6.70 a month, while the average gas customer’s bill would rise about $2.50 a month. According to the Idaho PUC, Avista says its request to recover $31.2 million in electric revenues and $2.7 million in gas revenues reflect the company’s customer growth and the need to attend to aging generation plants and transmission infrastructure that requires the company to spend $200 million a year in upgrades.
According to a PUC news release, the Commission set a Feb. 25 deadline for parties who want to intervene in the rate case, although interested parties will have a chance to participate in the case without being an intervenor. Customers will have a chance to provide written comments and participate in workshops, and those schedules will be posted here in future Energy Updates.
IV: Idaho Power Gets OK to Launch Advanced Meters Across Its Territory
The Idaho PUC on Thursday approved an application by Idaho Power to deploy its $70 million-plus “Advanced Metering Infrastructure” technology across the state’s largest utility’s service territory.
Idaho Power had asked the PUC to OK its plans to install its AMI technology, sometimes called “smart meters” after a trial period that tested the devices in small segments of the company’s territory. The new meters can allow the company and the grid to better interact with customers. Idaho Power’s schedule calls for an initial rollout in the Capital Region (Boise, Kuna, Meridian, Eagle) in 2009; the Canyon and Payette regions in 2010; and Southern and Eastern Regions in 2011. The PUC wants these meters installed as soon as practical, but questions lingered as to the how the cost of the meters would be handled. In support of the AMI technologies, IPC told the PUC:
“AMR would improve meter reading accuracy, eliminate the need for Idaho Power to gain access to customer property for monthly meter reads, and allow Idaho Power to develop new services in the future. An AMR system would improve outage monitoring, theft detection, and employee safety. AMR’s capacity for remote connects and disconnects would also save customer time and employee labor. From a billing perspective, AMR would result in fewer estimated bills, less rebilling, flexible billing schedules, account aggregating, and flexible rate designs.”
In addition, the company claims the AMI technology will facilitate new “smart grid” functions in the future. This project will cost about $71 million, plus other costs that the company has yet to quantify.
The program’s cost is what drew the most attention – and some criticism – from such groups as AARP, which on behalf of its membership of senior citizens and retirees claimed the public wasn’t allowed adequate opportunities to review the costs of the AMI costs and also challenged the program for imposing new costs on consumers. PUC staff generally supported the company’s request but stopped short of endorsing the costs being “rate based” in customers’ rates until the prudency of those costs are examined.
In its order, the PUC sought a middle ground.
“…We find that both the present and future public convenience will be served through the enhanced outage management and billing accuracy, as well as reduced operating and maintenance e expenses, offered by the introduction of AMI technology throughout Idaho Power’s service territory,” PUC staff wrote. “We find that the deployment of AMI technology will also offer substantial future benefits by providing an essential platform for remote connect-disconnect capabilities, time-of-use pricing and other ‘smart grid’ operations. Finally, AMI technology will also prepare the Company to meet the future demand-capacity requirements posed by rapidly evolving technologies, for example, charging stations for hybrid electric vehicles. The Commission directs Idaho Power to submit a report detailing the Company’s plan to introduce its Time of Day, Energy Watch and/or other pilot programs throughout its service territory once the requisite AMI technology is fully deployed.”
Finally, the PUC’s order acknowledged concerns about the costs of the new program: “The Commission emphasizes that his order does not address issues relating to the propriety or prudency of the actual costs associated with the installation of the AMI technology.” Instead, it said those decisions will await the next Idaho Power rate case or other proceeding.
To read Idaho Power’s application, the PUC’s order, and other documents, go to www.puc.state.id.us and the “File Room” and then “Electric Cases” and then to IPC-E-08-16.
On The Agenda:
► The Idaho Public Utilities Commission holds its next decision meetings on Feb 23, and March 2, 9, and 16. Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us.
► The NW Power and Conservation Council holds its March meeting in Boise on March 10-12. The agenda and location have not been posted yet, but will be at www.nwppc.org The Power Council is the four-state body created to help plan for the energy needs and fish and wildlife concerns of the Pacific Northwest. Each of the four PNW states has two representatives on the Council, which is in the midst of developing a new power plan to guide the region’s resource needs.