Idaho Energy Update
Feb. 20, 2009
Three more energy bills were introduced in the Legislature this week, including measures to promote greener schools, help low-income consumers pay their utility bills, and to change the way utilities finance big transmission and generation projects. Meanwhile, Idaho Power took issue with the Public Utilities Commission’s order on its just-concluded rate case; and the chase for federal stimulus dollars for energy projects is on. 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: Bills Introduced on Low-Income Assistance, Green Schools
Three more energy bills were introduced this week, including one to provide more assistance to low-income utility customers, another to promote construction of more energy efficient schools across Idaho, and a third that could make it easier for utilities to gain regulatory consent for some projects before beginning them in hopes of having more access to investment money to pay for the projects.
S1119, introduced in the Senate State Affairs Committee by Chairman Curt McKenzie, has been long in coming. Backed by the state’s Community Action Partnerships offices and now by the three major electric utilities with the leadership of Avista, the measure simply allows utilities to ask the PUC to provide assistance to low-income ratepayers. It would remove an archaic prohibition in state law that allows for multiple rates within a particular customer class. It would also help advance the recommendations of the Public Utilities Commission in the PUC’s recent report on energy affordability and would provide critical support to the neediest of ratepayers at a time when they can least afford to keep their electricity and gas accounts open. On the same day, the Senate State Affairs Committee introduced S1120, which would provide incentives to local school districts to build energy efficient school buildings. The beauty of S1120 is that it won’t cost the state’s general fund, but instead uses funds already provided to school districts and gives those districts incentives to build efficient schools rather than the traditional inefficient ones. A similar measure failed last year due to questions about its funding mechanism, but this version answers those questions and could become one of the top energy efficiency measures to pass the Legislature this session. And today, the Senate State Affairs introduced a bill (the number for which was not available tonight) that could make it easier for utilities to finance big capital projects such as transmission lines or generation projects. The measure is backed by the Office of Energy Resources, but could still face opposition from critics who claim it amounts to preapproval of expensive projects to be included in customers’ rates without first determining whether the project is needed. Supporters say it will provide potential investors for these projects the confidence that the PUC is watching the projects and will likely eventually include them in customer rates, ensuring the investors are safe.
Each week, we 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:
Electric facility construction, priority processing H0007
Energy facility construction, state siting panel S1027
Energy-efficient school building design S1120
Energy/environment/technology, legislative study comm HCR016
Idaho National Laboratory, energy programs, support HJM002
Renewable energy, enterprise zones, tax incentives H0122
Utility rates, programs for low-income customers S1119
Public utility, new facilities, charge customers H0052
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 awaits the governor’s signature.
Sponsor: Office of Energy Resources Director Paul Kjellander
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, where it is not expected to receive a hearing.
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 final approval in the House next week.
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, probably next week.
Sponsor: Office of Energy Resources Director Paul Kjellander.
Low-Income Energy Assistance (S119)
Would allow utilities to request the PUC to approve low-income bill payment assistance and other programs that gas and electric utilities voluntarily propose to help low-income customers. The programs are completely voluntary on the part of the utilities and would be subject to rate filing procedures and public review and comment.
Status: Introduced in the Senate State Affairs Committee and awaiting hearing in that committee.
Sponsor: Neil Colwell, Avista Corporation
Energy Efficient Schools (S1120)
Creates a voluntary incentive to encourage school districts to build more energy efficient school buildings by using the design and construction practices of integrated design and fundamental commissioning. The incentive forgives the school district requirement to provide annual matching maintenance funds for the qualifying school building. There is state budget impact, as the funds are already provided by the state general fund to the respective school district.
Status: Introduced in the Senate State Affairs Committee and awaiting hearing in that committee.
Sponsor: Sen. Curt McKenzie
Utility Project Financing (no bill number yet)
Would allow utilities to apply to the Public Utilities Commission for the PUC to acknowledge the capital expenses for a project such as a transmission or generation facility before the utility embarks on expensive construction project. Supporters say the bill would provide some assurance that the project will eventually be paid for by ratepayers and attract investors. Opponents say the blessing of a project before it’s built would tie the hands of future Commissions. The process would be voluntary for utilities.
Status: Introduced in the Senate State Affairs Committee today and awaiting a hearing.
Sponsor: Sen. Curt McKenzie
II: Idaho Power Seeks PUC Reconsideration of Rate Case Order
Idaho Power Co. on Thursday filed a petition for reconsideration or clarification to the Public Utilities Commission in the wake of the PUC’s decision earlier this month on the company’s rate case.
The PUC has granted Idaho Power an average residential rate increase of 1.6 percent and an overall increase of 3.1 percent across all rate classes – much lower than the 9.89 percent sought by the utility. Further, Idaho Power had asked to increase its annual revenue requirement by $66.6 million, but the PUC granted a $20.87 million revenue increase. The PUC rate case order creates a year-round, three-tiered rate mechanism that the utility and witnesses agreed would lead to more energy efficiency and conservation measures by customers. Under the new tiered rate structure, customers can realize actual savings if they reduce consumption, because the new tiers provide lower charges for the first block of energy use and higher charges for greater consumption.
However, Idaho Power took issue with a number of the Commission’s findings and with some of the calculations used to compute several costs that play into the amount the company can recover through rates. It is not objecting to the new rate structure.
The PUC now has 28 days to decide whether to deny Idaho Power’s requests, accept it, or a combination of the two. That decision will be followed by a further investigation by PUC staff and eventually a new order by the PUC on its findings. In the meantime, the new rates established in this rate case that went into effect Feb. 1 remain in place. If adjustments are needed depending on the outcome of the PUC investigation, they will be applied later.
To review Idaho Power’s petition for reconsideration and the PUC’s order, go to www.puc.idaho.gov, click on “File Room” and then “Electric Cases” and then Case Number IPC-E-08-10.
III: Governor, Legislature Giving Stimulus Money a Hard Look
No one knows for sure how much federal stimulus money is coming to Idaho and what it might be used for, but one thing is certain: Energy projects will get a big chunk of it and the game is on to find out where it will go.
Gov. Butch Otter issued an executive order (http://gov.idaho.gov/mediacenter/execorders/eo09/eo_2009_06.html) that sets his administration’s timeline and rules for state agencies and others to seek a piece of the stimulus pie. Meanwhile, the Legislature’s budget-setting Joint Finance-Appropriations Committee (JFAC) has slightly delayed its budget-setting meetings for state agencies and on Monday will hold a “Hearing on Stimulus HR1” in Room316 of the Annex, the temporary home of the Legislature. That cramped room will likely be filled to capacity, however, so if you’re interested in tracking JFAC’s stimulus discussion, the best bet is to do it online. Go to http://idahoptv.org/leglive/ to learn more on listening in from afar.
As for energy issues in the stimulus package, it’s clear that money coming into Idaho will be heavily screened to ensure it meets myriad requirements, first and foremost that it is used for one-time projects that don’t require future funds. Home weatherization, energy efficiency in private and public buildings, and direct investments to incent renewable energy projects seem ideally suited. These are the kinds of investments that will not only provide jobs in the short term, but will also lead to significant and long-lasting energy savings and help create a larger supply of clean and affordable renewable energy. We’ll keep you posted on how the chase for stimulus dollars plays out in the coming days.
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.