Idaho Energy Update
March 27, 2009
One of the biggest clean energy bills of the 2009 legislative session faces one final vote next week after a House panel overwhelmingly passed the green schools bill and sent it to the full House for approval. The House on Monday also approved two important renewable energy bills without opposition and sent them to the Senate, where both await hearings in the Local Government and Taxation Committee. Meanwhile, Idaho Power has set an April 2 open house in New Plymouth to discuss its proposed Langley Gulch Power Plant, a 330MW natural gas turbine it hopes to build in Payette County. 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: Green Schools Bill Close to Final Approval; Renewables Advance
Two important renewable energy bills were unanimously passed by the House this week and sent to the Senate, while the long-awaited green schools bill awaits its final green light this week in the House before becoming law.
The green schools bill, S1132, was overwhelmingly passed by the House Environment, Energy and Technology Committee with a lone “nay” vote – by Rep. Steve Kren, R-Nampa. It looms as one of the most meaningful pieces of energy legislation this session and is expected to pass in the House in the coming week.
In another win for clean energy advocates, H233 and H203 both passed the full House with 68-0-2 votes and were sent over to the Senate, where they await hearings in the Local Government and Taxation Committee. H233 would provide property tax exemptions for renewable energy additions such as solar panels to homes and non-residential structures, while H203 would add solar, biomass and other renewable energy generation facilities to existing laws that exempt wind and geothermal generation plants from property taxes in lieu of a 3 percent levy on their generation. Both H233 and H203 should create a more favorable climate for renewable energy at the consumer level as well as the generator level in Idaho.
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
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, approved by House Environment, Energy and Technology Committee, awaiting final approval in full House next week.
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, approved by House State Affairs, awaiting vote in full House next week.
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. Approved by House March 23, 68-0-2, and awaiting hearing in Senate Local Government 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 March 23, 68-0-2, and awaiting hearing in Senate Local Government and Taxation.
Sponsor: Rep. Wendy Jaquet
II: Idaho Power Will Hold Open House on Gas Plant
Idaho Power is planning an April 2 open house in New Plymouth to field questions and explain its plans for a 330MW natural gas generation plant it hopes to locate immediately south of I-84 at exit 9 in Payette County. The meeting will be from 5 p.m. to 7 p.m. at New Plymouth High School, located at 207 S. Plymouth Ave., and will feature short informal presentations at 5:30 p.m. and at 6:30 p.m.
The company says it needs the proposed $427 million “Langley Gulch Power Plant” to meet its growing electricity demands and hopes to bring the plant on line by late 2012. Critics of the project say the company has yet to show a need for the project, and have expressed concerns about bringing more fossil fuel-based generation on to Idaho Power’s energy portfolio given the likelihood the federal government may soon begin regulating carbon emissions. Critics are also concerned about the company’s efforts to have the PUC commit to including power plant or transmission line costs in customer rates before the plants are built and on line – and before a thorough vetting of the plant’s cost has been undertaken.
The Idaho Public Utilities Commission has set an April 1 deadline for parties wishing to intervene in Idaho Power’s application for a certificate to build the plant, and has also scheduled an April 14 pre-hearing conference at 10 a.m. at PUC headquarters to identify intervening parties and determine how the case will be handled.
To review the PUC docket on Idaho Power’s application, visit the PUC’s website at www.puc.idaho.gov and then go to “file room” and then “electric cases” and scroll down to IPC-E-09-03.
To review Idaho Power’s page on the project, visit http://www.idahopower.com/AboutUs/OurPowerPlants/Gas/gas.cfm
III: Gov. Otter Vouches for Idaho’s Energy Stimulus Spending Plans
Gov. Butch Otter has sent his letter to Energy Secretary Steven Chu, providing what the governor said were “assurances” that his office and the state of Idaho are or will be implementing policies required by the federal government before it can receive some $26 million in stimulus funds for energy projects.
Among other things, the federal government requires that states seeking energy funds as part of the American Recovery and Renewal Act (ARRA, or the stimulus bill). Section 401 of the stimulus bill says governors must notify the secretary of Energy that they have “obtained necessary assurance” from the state’s utility regulators that they will “seek to implement” two conditions on gas and electric utilities:
“A general policy that ensures that utility financial incentives are aligned with helping their customers use energy more efficiently”
“Timely cost recovery and a timely earnings opportunity for utilities associated with cost-effective measurable and verifiable savings.”
That second item will be of importance to Idaho energy-watchers, as it essentially commits the state to a form of utility regulation that both promotes energy efficiency and also allows utilities to realize earnings as approved by regulators. One such method is known as “decoupling” – or breaking the link between energy sales and conservation by allowing utilities to recover some revenues lost if their customers use less energy.
In his letter to Secretary Chu, Otter said: “I have written to our public utility commission and requested that they continue their successful decoupling efforts and consider additional actions to promote energy efficiency, consistent with the Federal statutory language contained in HR 1 and their obligations to maintain just and reasonable rates, while protecting the public. I have also written the appropriate state agencies and requested that they consider actions to improve building energy codes, consistent with state law and state constitutional requirements…”
“Our state is committed to a robust improvement in energy efficiency and renewable energy, as well as a balanced state energy policy. I want to assure you that, within the limits of my authority, we will move forward in these critical areas.”
And in a letter to Otter dated March 2, PUC President Mack Redford and Office of Energy Resources Director Paul Kjellander told the governor they are committed to pursuing his pledge to DOE, including expanding “cost-effective” energy efficiency programs and also utility decoupling mechanisms to promote energy efficiency and conservation among Idaho’s electric utilities.
Those promises will be worth watching. So far, only one Idaho utility – Idaho Power – is participating in a decoupling project. Now, it seems the PUC and the OER have committed to expanding it to other utilities, although no regulatory proceedings have begun to do so.
IV: Idaho Power Seeks PUC OK for Commercial and Industrial Efficiency Programs
Idaho Power has asked the PUC to approve a new energy efficiency program that would allow commercial and industrial customers to sign up for an energy-savings program where they would agree to have their demand curtailed during times of high energy demand. The PUC will take comments on the case through April 15.
The utility is asking the PUC to sign off on a five-year contract with its consultant, EnerNOC, which under the contract will reduce demand from Idaho Power’s bigger customers by 50MW in 2012. Idaho Power will pay EnerNOC $12 million to run the program over its five years, and in return the company expects to be able to shave critical power demands during its “peak” periods in an effort to reduce the need for expensive new peak power generating plants.
Commercial and industrial customers that sign up for the peak-reduction program will be compensated (much as residents are when they participate in the air-conditioning “Cool Credits” cycling program) for allowing their power to be scaled back during times of high demand. Under this proposed agreement, EnerNOC will ensure the power demands are reduced after being notified by Idaho Power of the need. The program would be financed through Idaho Power’s energy efficiency rider, under which customers pay 2.5 percent of their monthly electric bills to support energy efficiency programs. Idaho Power has a pending request before the PUC to raise that level to 4.75 percent, which would raise another $15 million a year to underwrite efficiency programs across residential, commercial, industrial, and irrigation customer classes.
For more information on this application, go to www.puc.idaho.gov and then go to “file room” and then “electric cases” and then to IPC-E-09-02.
On The Agenda:
► Idaho Power holds an open house in New Plymouth to discuss its proposed Langley Gulch Power Plant south of town. The meeting will run from 5 p.m. to 7 p.m. at the New Plymouth High School. See above for more details.
► 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 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.