Idaho Energy Update
March 20, 2009
After a slow start, Idaho Power’s energy efficiency programs are beginning to expand, and with new ones coming online this year the company this week asked the Public Utilities Commission to approve an increase in monthly bills to raise significantly more funds to pay for the programs. Also, the NW Energy Coalition released a ground-breaking report detailing how the Pacific Northwest can meet growing electricity demands with energy efficiency and renewables while retiring and replacing coal plants and replacing the power from the four lower Snake Dams. And a couple of key renewable energy bills were amended in the House and could be approved early next week, while the Senate-passed green schools bill is expected to get its House committee hearing on Tuesday.
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
Two important renewable energy bills were amended this week on the House floor and should be up for final votes in the House on Monday. H203 would add biomass and some other renewable energy resources to the statute that already exempts wind and geothermal projects from property taxes in lieu of a production tax on the energy they generate. And H233 would exempt renewable energy additions to residences and other structures from property taxes. Both would promote renewables as generation resources as well as energy-saving improvements to structures. Also, S1132, the “green schools” bill that easily passed the Senate earlier this month, is expected to receive its House Environment, Energy and Technology Committee hearing on Tuesday.
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 Environment, Energy and Technology Committee, where hearing is likely Tuesday, March 24.
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. Amended in the House and awaiting final approval in House as early as Monday.
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: Amended in the House and awaiting final approval in the House as early as Monday.
Sponsor: Rep. Wendy Jaquet
II: Idaho Power Seeks Increase in Energy Efficiency Tariff
Idaho Power this week asked the Public Utilities Commission to approve an increase in its energy efficiency “tariff rider” – the small charge customers pay to raise funds to implement energy efficiency and conservation programs.
If approved by the PUC, the charge to customers to fund Idaho Power’s energy efficiency programs would rise from 2.5 percent of monthly energy bills to 4.75 percent effective June 1. The current energy efficiency tariff was increased from 1.5 percent last year. The tariff collections began in 2002. The higher charge would collect an additional $15.6 million a year, or 1.9 percent of the current revenues collected for the energy-saving programs. The programs have undergone significant growth in recent years, rising from $1.9 million in 2002 to $6.7 million in 2005 and $21.2 million in 2008. The programs are aimed at all customer classes – residential, commercial, industrial, and irrigation. A list of the programs can be found at www.idahopower.com/eeprograms
Programs are designed to slow the growth of overall electricity demand through such things as weatherization or installing energy efficient devices, but also to reduce “peak” power demand during times of heavy consumption by providing incentives to customers to have their air conditioners cycled off periodically in summer months when demand is peaking. In seeking the tariff increase, the company said its energy-savings program spending are rising dramatically and will approach $30 million this year and more in succeeding years.
Idaho Power also submitted to the PUC its Demand-Side Management 2008 Annual Report (see http://www.idahopower.com/EnergyEfficiency/reports.cfm ), which outlines the programs and its energy savings over the year. It says the energy savings programs saved 16 average megawatts last year, or enough to serve about 11,000 homes. That was a 54 percent increase over 2007’s energy savings.
In a related filing to the PUC, Idaho Power asks for PUC permission to include in customer rates the costs of installing thousands of new “advanced meters” that will help drive the coming wave of “smart grid” technologies by giving customers more control over their energy consumption and the costs of their electricity. The PUC has urged Idaho Power to move swiftly in deploying its “advanced meter infrastructure,” and the company will begin installing the new, smarter meters in Ada County this year, the rest of southwest Idaho and eastern Oregon next year, and the Magic Valley eastward in 2011.
To review the request to raise its energy efficiency tariff, visit www.puc.idaho.gov and then “file room” and then “electric cases” and then IPC-E-09-05.
III: New Energy Report Points to “Bright Future” in Pacific Northwest
A report issued this week points the way to a low-carbon energy future for Idaho and the Pacific Northwest, one that envisions the region meeting its future electricity demands through energy efficiency and conservation measures and that would also allow for deep reductions in coal generation and the removal of four lower Snake dams with more development of renewable energy. The study, “Bright Future,” was released by the NW Energy Coalition and was sponsored by the Coalition, Save Our wild Salmon, and the Sierra Club.
“Talk about a good deal!” NW Energy Coalition Executive Director Sara Patton said. “Here in the Northwest, we’re justly proud of clean energy tradition and innovation. Now we have a real opportunity to make tomorrow’s power system even cleaner than today’s.”
The “Bright Future” report assumes the Pacific Northwest’s electricity needs may double by 2050. However, it presents a roadmap for how those needs can be addressed through strong leadership by Bonneville Power Administration, a robust regional power plan by the Northwest Power and Conservation Council, effective state renewable energy standards, and an end to new coal plant construction. Not only can these energy efficiency and renewable energy measures satisfy the projected growth in electricity demand, but they can also satisfy new electricity demands from electric vehicles; meet state, regional and international greenhouse gas reduction targets; and reduce risks to the region’s imperiled salmon stocks.
The “Bright Future” report is the second in the Light in the River series of analyses on the interconnections of climate, clean energy, and species survival. To read or download the full report or the four-page summary, visit www.lightintheriver.org/brightfuture or www.nwenergy.org
IV: Idaho Power Sells More Pollution Allowances
Idaho Power on Thursday advised the Public Utilities Commission that it sold another batch of surplus pollution allowances, collecting $2.3 million that will presumably be distributed to ratepayers and shareholders.
Since 2006, the utility has on occasion sold sulfur dioxide emission allowances – in effect pollution credits – that it no longer needs because of emissions reductions at the coal plants in which it has an interest. In 2006, the company brought in about $69 million, which the PUC allowed to be distributed on a 90-10 split between ratepayers and shareholders. The company sold another $19.6 million in SO2 allowances in 2007. At the company’s request, $500,000 of those proceeds was set aside for some form of energy education project focusing on schools in Idaho Power’s service territory. The PUC held workshops on that program and has yet to issue a ruling on the best use for that half-million dollars. Once Idaho Power determines it no longer needs the emission allowances, it has PUC authority to sell them on the market. The company generally waits until market conditions are favorable before putting them up for sale.
“During 2009, conditions in the emission allowances market were such that Idaho Power sold surplus sulfur dioxide emission allowances,” the company told the PUC. “Thus far in 2009, the Company has either sold and received payment for, or entered into contracts for, the sale of a total of 16,500 surplus sulfur dioxide emission allowances.” The net proceeds after deducting brokerage fees is $2,341,375. In the past, 90 percent of those proceeds was allocated to customers through the company’s annual “power cost adjustment” mechanism that adjusts rates for such things as favorable or unfavorable hydro conditions that impact power prices. The balance has gone to shareholders. Under a separate agreement, the split will be 95-5, which can mean more benefits when costs are low or additional funds come in, or the opposite when costs are more than expected.
The PUC will review the company’s filing and issue an order at a later date. To review Idaho Power’s application, visit www.puc.idaho.gov and then to “file room” and then “electric cases” and then IPC-E-09-08.
V: PUC Sets Schedule on Idaho Power’s Proposed Gas Plant
The Public Utilities Commission has set an April 1 deadline for anyone wanting to intervene in Idaho Power’s application for approval of its proposed 330MW natural gas generation plant near 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.
Earlier this week, the PUC said it would hold a prehearing conference on the application at 10 a.m. April 14 at PUC’s Boise headquarters at 472 West Washington Street. That conference will identify intervening parties and discuss how to move forward with Idaho Power’s application. To review the application and Idaho Power’s supporting documents, visit www.puc.idaho.gov and then “file room” and then “electric cases” and then IPC-E-09-03.
On The Agenda:
► 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 23 and 30 and April 6, 13, 20, and 27. Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us.