Idaho Energy Update
April 3, 2009
One of the biggest energy-efficiency bills of the 2009 session is on its way to the governor after the House easily approved the green schools bill this week. Unfortunately, a pair of good renewables bills were tripped up in a Senate panel and may be dead for this session, despite both being approved without opposition in the House. Also, the Public Utilities Commission mostly agreed with clean energy advocates on the use of $500,000 in Idaho Power proceeds from the sale of coal-fired pollution allowances for energy education programs. And Rocky Mountain Power wants to delay for a few months the filing of its newest resource plan because it no longer plans to build a big new gas plant – in part because the recession has dampened the need for the plant. For more 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 Sent to Governor; Senate Panel Blocks Renewables
The House overwhelmingly passed the green schools bill (S1132) this week, clearing the way for its signature by Gov. Otter. Trouble developed in the Senate, however, where the chairman of the Local Government and Taxation Committee held up two bills that would have promoted renewable energy.
First, the good news: In a 63-7 vote, the House approved what will likely be the most important green energy bill of the session. Assuming it’s signed by the governor, the green schools bill provides a voluntary mechanism for school districts to use some of their state funds to design, build and commission new schools that are far more energy efficient than those now being built.
The bad news: Senate Local Government Chairman Brent Hill, R-Rexburg, declined to hold a hearing on H233, which would provide property tax exemptions for renewable energy additions such as solar panels to homes and non-residential structures. That measure recently passed the House without a no vote. And his committee declined to support H203, which would have added 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. That bill was also approved by the House without opposition. Sen. Hill advised sponsor Rep. Wendy Jaquet, D-Ketchum, to retool the bill in the coming interim. That’s a big disappointment for bill sponsors and clean energy advocates who had worked on the bills most of the session, only to find them breeze through the House and hit a Senate wall.
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:
Electric facility construction, priority processing H0007 – Ch.9
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 – (A)
Idaho National Laboratory, energy programs, support HJM002
Low-impact hydro energy tax credit H0209
Public utility ratemaking treatment, cost recovery S1123
Renewable Energy Resources Fund, approp H0255
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
Swan Falls Reaffirmation, preclude PUC decisions S1169
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: Signed into law.
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: Never received a hearing.
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: Stuck in House State Affairs.
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.
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: Dead for the session.
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 the House and sent to the governor to become law.
Sponsor: Sens. Elliot Werk and 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 both chambers and sent to the governor.
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 to encourage development of certain renewable energy projects.
Status: Dead for the session.
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: Held by Senate Loc al and Government Affairs Committee Chairman Brent Hill and dead for the session.
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: Held up by Senate Local Government Committee; dead for the session.
Sponsor: Rep. Wendy Jaquet
II: Idaho Power Has More SO2 Emissions Credits, So PUC Will Decide How to Use Proceeds
Idaho Power has been given some credit for working to clean up the massive coal plants from which its customers receive up to half of their electricity. Being able to sell unneeded sulfur dioxide emissions allowances on the open market because your power plants no longer need them is a good thing and a step toward making the coal plants the relics they are. Here in Idaho, it raises the question of who should benefit from the millions of dollars in proceeds from the sales of those no-longer-needed pollution allowances.
We’ve written extensively about how in 2007 and 2008 the proceeds from the sales of those extra emissions allowances have gone to the company’s ratepayers and shareholders on a 90-10 split in favor of the ratepayers, which we agreed was equitable given the ratepayers are most at risk for a utility’s resource decisions and risk. And also how last year the PUC set aside $500,000 of the tens of millions of dollars from those proceeds for some very important energy education initiatives proposed by Buhl’s Bill Chisholm and his Idaho Energy Education Project.
Two important things happened this week. First, the PUC agreed for the most part with Bill’s proposal, and decided to run the half-million dollars through an Idaho Power program designed to promote energy efficiency in Idaho schools. Critical to this program’s success, of course, is that as Bill has argued all along, it must have an EDUCATIONAL component to it. Idaho Power’s proposal, if executed well and under the supervision of an advisory board, could accomplish that. What really matters is that the small amount of money made available goes to the highest and best use – and that’s to educate our students about the value of energy efficiency in their schools, and also in their homes.
Meanwhile, Idaho Power also reported to the PUC that it brought in another $5.3 million from the sale of SO2 emissions allowances during 2008 and part of 2009, and the PUC wants YOUR advice on what to do with those proceeds. The Commission will be taking suggestions through April 17.
To recap: We have 2 PUC cases dealing with a lot of SO2 money and how to put it to its best use. Please visit www.puc.idaho.gov and then to go “file room” and then “electric cases” and then to two different cases:
IPC-E-08-11 and IPC-E-09-08. You’ll find the filings and other information there.
III: DOE Rolls Out Consumer-Friendly Energy Efficiency Site
The Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) on Friday announced its latest consumer site to help reduce consumption during the spring season. The site, www.energysavers.gov/seasonal, has a load of resources on how visitors can slice their power bills on everything from conducting an energy audit to easy cheap or free energy-savings tips. The energysavers.gov is worth a look. And to EERE, jump to www.eere.energy.gov
IV: Rocky Mountain Power Seeks Delay in Filing IRP
Rocky Mountain Power, the PacifiCorp division that operates in portions of eastern Idaho, has asked the PUC to extend the time required to file its 2008 integrated resource plan. IRPs are the reports required by the PUC of the utilities every other year to show how utilities expect to meet future load growth requirements over the next 20 years.
In its petition for an extension of time, Rocky Mountain Power said a number of issues required it to rethink its IRP. Chief among them are a notice sent by the utility to developers of a proposed combined-cycle gas generation plant (which was included in the 2008 IRP as a planned resource on or about 2012) that the utility doesn’t need it right now.
“The decision to seek more cost-effective resource alternatives was driven by the worsening recessionary environment, continued declines in forward electricity and gas prices, the favorable outlook for future plant construction costs, and additional transmission import capability into Utah that the Company has recently become aware of,” the company said. It said its decision to cancel for now the acquisition of a new large gas plant occurred after its 2008 IRP identified the gas plant in its preferred portfolio, but before the IRP and its action plan were completed. In addition, Rocky Mountain Power said it has revised its load forecast to take into account impacts of the current recession.
Given the recent changes in the utility’s slowing load growth, the changing financial environment for the gas plant, and its ongoing analyses of the risks and costs of integrating more wind onto its system, the utility asked to move its IRP filing back to May 29.
PUC staff has recommended the Commission accept Rocky Mountain’s request, and the Commission is expected to rule on the matter in the coming weeks. It’s likely PacifiCorp’s experience with its declining load growth and the associated declining need for its expensive gas plant will resonate with some critics of Idaho Power’s proposed gas plant outside New Plymouth.
On The Agenda:
► The Public Utilities Commission will hold a hearing on April 14 to determine the next steps in processing Idaho Power’s request for a certificate for its proposed Langley Gulch natural gas plant in Payette County. The prehearing conference will be at 10 a.m. at the PUC’s Boise headquarters at 472 W. Washington Street in Boise. Visit www.puc.state.id.us and then “file room” and then “electric cases” and then IPC-E-09-03.
► 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 April 6, 13, 20, and 27. Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us.