Idaho Energy Update
March 13, 2009
The Senate today approved and sent to the House one of the most important energy bills of the session, a measure that allows school districts to voluntarily tap resources to build energy efficient schools. Not only would the bill save school districts and the state on energy costs, it would lead to more efficient and healthier buildings. Meanwhile, the House Revenue and Taxation Committee approved a measure to provide property tax exemptions for residential and commercial properties that have installed solar and other renewable energy resources, and another that would add biomass and solar to a law that exempts commercial renewables generation facilities from property taxes in lieu of paying a levy on their generation.
For information on these developments and others, 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: Legislature: Energy Bills Moving Forward
It was a busy – and productive – week for energy bills in the Idaho Legislature, with the Senate approving a “green schools” bill today and the House Revenue and Taxation Committee moving bills to encourage renewable energy generation projects as well as renewable installments on residential and commercial property.
S1132 was approved with just one vote against it. If approved by the House, it will create voluntary incentives for school districts to build more energy efficient buildings by using integrated design and fundamental commissioning – practices designed to build efficient buildings and then make sure they’re operating as designed. House Bill 233 came out of the Revenue and Taxation Committee and is a combination of two earlier bills, House 208 and 209. It exempts the value of renewable energy devices on residential and non-residential property from being included in property tax calculations. It is designed to provide incentives to those considering installing solar or other renewables on their property. And House Bill 203, also out of Rev & Tax, would exempt certain renewable energy facilities from property taxes in exchange for their paying a 3 percent gross production taxes. Wind and geothermal already qualify for that tax treatment under bills enacted in prior sessions. The idea is to reduce swings in county property tax collections as renewable projects are depreciated over time, and instead give counties a more steady revenue stream from the tax on the energy those projects produce.
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 Electricity” section currently looks like this, but the most recent bills have not yet been added to the list:
ELECTRICITY AND ELECTRICIANSELECTRICITY AND ELECTRICIANS
Electric facility construction, priority processing H0007 – Ch.9
Electrical apprentice registration, license, fees H0111
Energy facility construction, state siting panel S1027
Energy-efficient school building design S1120
Energy-efficient school building design S1132
Energy/environment/technology, legislative study comm HCR016
Lead acid battery sales, recycling, $10 fee H0170
Low-impact hydro energy tax credit H0209
Public utility ratemaking treatment, cost recovery S1123
Public utility, new facilities, charge customers H0052
Renewable energy device, homes, tax exempt H0208
Renewable energy device/facility, property tax exempt H0233
Renewable energy projects, state funds investment H0200
Renewable energy, enterprise zones, tax incentives H0122
Renewable energy, operating property, producer tax H0203
Utility facilities relocation, public highway planning S1097
Utility rates, programs for low-income customers S1119
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 signed into law by the governor.
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. 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. Bert 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: Approved by both chambers.
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 held in committee at the request of the sponsor – killing the measure.
Sponsor: Office of Energy Resources Director Paul Kjellander.
Low-Income Energy Assistance (S1119)
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: Failed in Senate, 17-18.
Sponsor: Neil Colwell, Avista Corporation
Energy Efficient Schools (S1132, was S1120 but was amended and renumbered)
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: Approved by Senate March 13 and sent to the House.
Sponsor: Sen. Curt McKenzie
Utility Project Financing (S1123)
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: Approved by Senate and awaiting hearing in House State Affairs..
Sponsor: Sen. Curt McKenzie
Idaho Energy Resources Authority Bonds (H200)
Would authorize the State Treasurer to purchase bonds a below-market rates from the Idaho Energy Resources Authority (IERA) to encourage development of certain renewable energy projects (not including wind or solar) in Idaho. The identified renewables include cop residues, food or animal waste, landfill gases, wood waste, or geothermal energy.
Status: Held in House Environment, Energy and Technology Committee at sponsor’s request.
Sponsor: Ronald Williams, Williams Bradbury Attorneys at Law
Property Tax Exemption for Renewable Energy Devices on Residential and Commercial Properties (H233, was H208 and H209, and both were combined into new H233)
Exempts the value of renewable energy devices such as solar panels or heat pumps on residential and commercial property for purposes of calculating property taxes. The measure would have no negative impact on the state budget, and would not impact county tax collections inasmuch as it would allow homeowners simply to install renewable energy equipment and not have that value added to the value of the property for tax reasons.
Status: Two earlier bills treated residential and commercial separately; this bill combines the two. Introduced by House Revenue and Taxation.
Sponsor: Rep. Eric Anderson
Adding More Renewables to Current Law Providing Production Tax (H203)
Following on similar measures dealing with wind and geothermal resources in prior sessions, this bill would simply add most other forms of renewable energy to existing law that replaces property taxes assessed on renewable energy projects with a 3 percent gross production tax. The measure has no state general fund impacts, and earlier measures have been endorsed by counties because they provide a more consistent revenue stream from renewable projects over time.
Status: Approved by House Revenue and Taxation and sent to general orders in the House for amendment to remove references to low-head hydropower.
Sponsor: Rep. Wendy Jaquet
II: Idaho Power Seeks 330MW Gas Plant in Payette County
Idaho Power has filed an application with the Public Utilities Commission to build a 330MW combined cycle natural gas generation plant south of New Plymouth in Payette County.
The utility has applied to the PUC for a “Certificate of Public Convenience and Necessity” that it says will authorize construction of its “Langley Gulch Power Plant” in Payette County. If approved by the PUC, the plant’s costs will be likely be included in rates charged to Idaho Power customers. Idaho Power told the PUC it issued a request for proposals (RFP) to acquire a natural gas generation resource by 2012. The company’s 2006 integrated resource plan envisioned it acquiring 500MW of coal-fired generation, but its 2008 update shed the coal in favor of cleaner gas generation. After reviewing the responses to its solicitation for bids, it settled on its own project with an eye toward beginning generation in late 2012.
Among the unique features of Idaho Power’s application is its request to the PUC that it either allow the utility to collect from ratepayers expenditures for “construction work in progress (“CWIP”) while the project is being developed, or that the PUC ensures Idaho Power can collect the costs from ratepayers as soon as it is in operation. Both are new ideas; regulators usually wait until a project is built and operating and all expenses reviewed before having ratepayers foot the bill. Idaho Power said having the guarantees that it will eventually collect its expenditures will increase the odds of obtaining favorable financing rates.
In a separate filing to the U.S. Securities and Exchange Commission, Idaho Power said it has already paid about $8.7 million to Siemens Energy to reserve the turbine equipment for the $427 million project.
To review the application and supporting documentation, go to www.puc.state.id.us and then “file room” and then “electric cases” and then to IPC-E-09-3.
III: March 17 Public Hearing Set in Rocky Mountain Power Rate Case
The Public Utilities Commission has scheduled a March 17 public hearing in Shelley, south of Idaho Falls, to hear public comment on a proposed settlement in Rocky Mountain Power’s current rate case. The utility serves parts of eastern Idaho, excluding Idaho Falls and Pocatello.
Rocky Mountain Power’s original application to the PUC was to increase its base rates for electric service by $5.9 million a year, or 4 percent. The increases would vary by customer classes. In February, a proposed settlement in the case was filed by Rocky Mountain Power that would reduce the increase in additional annual revenues to 3.1 percent, effective April 18. The PUC is interested in hearing from Rocky Mountain’s Idaho customers on the proposed settlement.
IV: Stimulus $$$ Update
Gov. Otter has issued his recommendations for the disposition of his discretionary share of the stimulus money. For those watching energy dollars, Office of Energy Resources Administrator Paul Kjellander said his office typically receives $250,000 in funds for the State Energy Programs, but the stimulus money will bring between $20 million and $30 million. He plans to use most of it for public school audits and energy efficiency improvements. Some additional funds would go to solar panels on schools.
Meanwhile, Health and Welfare will receive about $30 million for additional weatherization of low-income homes. That’s a gigantic increase and the Community Action Partnerships will have to quickly ramp up to process it.
Micron did not get the $100 million it sought to convert a dark fabrication building into a solar and LED manufacturing facility, but isn’t giving up and will still seek federal funds.
To review the recommendations by the governor, go to: http://dfm.idaho.gov/fed_stimulus.html
On The Agenda:
► Idaho Power Company holds a meeting of its Integrated Resource Plan Advisory Committee from 10 a.m. to 3 p.m. on March 19 at Idaho Power’s corporate headquarters in Boise. The Committee is reviewing Idaho Power’s possible choices of the energy resources it will use to meet its future demands for electricity.
► The Public Utilities Commission has set an April 22 hearing to revisit its Jan. 26 order allowing Idaho Power to retire the “green tags” it acquires from renewable energy projects as proof it is delivering some green power to its customers. Idaho Power sought to retire the green tags so it can have evidence of the renewable energy it’s purchasing from an Oregon wind project as well as from a southeast Idaho geothermal project. The PUC’s decision was challenged by Industrial Customers of Idaho Power, which opposed the company’s plan and wanted instead for the green tags to be sold and the proceeds returned to customers in the form of rate relief. Documents on the case can be found at www.puc.state.id.us and then “file room” and then “electric cases” and then IPC-E-08-24.
► The Public Utilities Commission holds its next decision meetings on March 16, 23, and 30. Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us.