Idaho Energy Update
August 15, 2008
The developer of the proposed Idaho nuclear reactor finally filed his application to rezone the property in Elmore County, beginning what is expected to be a long haul for all parties as Idaho decides whether to cast its lot with nuclear power or whether to embrace sustainable energy resources. Meanwhile, the Public Utilities Commission has approved Idaho Power’s request to import more than 80MW of pretty expensive power from Montana during Idaho’s peak season, and Rocky Mountain Power and the PUC are looking for public comment on a proposed transmission line in SE Idaho.
Thanks as always, and if you have any calendar items, please send them my way!
Clean Energy Program Director
Snake River Alliance
I: Troubled Idaho Nuke Developer Files to Rezone Elmore Parcel
The financially strapped developers of the would-be nuclear reactor in Elmore County have filed their application to rezone more than 1,300 acres of Elmore County farm country to transform it into a heavy industrial site, complete with a nuclear power plant and the associated industrial activities that will go with it.
Alternative Energy Holdings, Inc., submitted its application to rezone the prospective nuclear reactor site to the Elmore County Planning and Zoning Department. The rezoning application, which is not available online, features myriad misstatements and gaffes in its attempt to find support for its project. Examples include AEHI checking the “no” box on the question asking, “Are there hazardous materials and/or wastes involved in the existing operation, the proposed operation, and/or generated off site and brought onto the property?”
AEHI then tries to argue in its application that, “Although AEHI is requesting a rezone to M2 (heavy industrial), the use as defined in Elmore County Code is M1, Light Industrial.” In a breathtaking pivot, the developers are now trying to promote their project as a clean, hazard-free enterprise that won’t be noticed by surrounding property owners. AEHI also talks about the possibility of adding “additional reactors” to its already-constrained site on the Snake River just 5 miles from Hammett. The company continues to tout the cost of its plant at $4.5 billion, despite acknowledgements by leading utilities nationwide that a reactor this size will cost two to three times that.
And Idahoans should hold onto their hats, as AEHI is now suggesting that it might be cheaper to, “manufacture portions of the reactor in Idaho.” Exactly which parts of a nuclear reactor AEHI plans to build in Idaho, and exactly which local, state, and federal agencies have been consulted to oversee such an operation were not explained in the company’s filing.
In short, AEHI’s rezoning application to Elmore County raises more questions for the county than it answers. And it should also raise questions for potential investors in this scheme, which as it sits will likely not withstand scrutiny at the P&Z level, let alone make it to the County Commission.
Those in the Mountain Home area will want to know that the Elmore County Planning and Zoning Commission will hold a meeting at 7 p.m. on Wednesday, Aug. 21, at the American Legion Hall at 515 East 2nd South Street (call us for directions). The agenda includes an “Information Item” to discuss the pending public hearing – probably in October – on AEHI’s rezoning application.
Meanwhile, less than a week after AEHI filed an alarming audited financial statement that showed the would-be nuclear reactor developer in grim financial shape, AEHI on Monday filed yet another unaudited statement that shows things are even worse – losing more than $2.8 million so far this year alone.
A report made public last week revealed AEHI had racked up $3,394,200 in losses by the end of 2007, for a total of $4,889,603 since the company’s inception about 18 months ago. But the latest statement, which covers the period ending June 30, 2008, reveals another $2,209,515 in net losses for the three months ending June 30. That brings the total so far this year to $2,861,157 in losses, or a grand total since the company’s inception of $7,750,761. The company claimed total assets of just $489,757 as of June 30.
The reports are posted on the “Pink Sheets” website. Pink Sheets is a stock trading venue for securities that can’t meet traditional requirement of major trading markets. Last week, the company filed an audited set of financials by New York-based Rotenberg & Corp., which was dated July 22. In a letter to AEHI’s Board of Directors and shareholders, auditors wrote: “The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the consolidated financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern.”
Since 2006, AEHI has touted plans to build a 1,600 nuclear reactor in Idaho, first in Owyhee County and now in Elmore County. The company has also told Idahoans it has lined up three separate investment entities to finance the massive cost of the multibillion-dollar plant and assorted regulatory applications, although so far no company has stepped up with the cash.
The unaudited financials can be found on the Pink Sheets website at http://www.pinksheets.com/pink/quote/quote.jsp?symbol=AEHI#getQuote and by clicking “Filings.”
II: PUC OK’s Idaho Power Purchase From Montana
The Idaho Public Utilities Commission have approved an application by Idaho Power to purchase 83 megawatts an hour from a Montana energy provider during the summer “crunch” months when the utility’s customers are demanding the most power.
Idaho Power asked the PUC to approve the purchase because an existing contract for a similar purchase was about to expire. The PUC approved the two-year power purchase agreement with PPL EnergyPlus, LLC, a part of PPL Montana. The power won’t be cheap, and it never is during the summer, when Idahoans pay the highest prices for their electrical energy. Idaho Power will pay about $101 per megawatt hour, according to the PUC.
The Snake River Alliance and other commenters in this case did not oppose approval of the new power contract, but it did emphasize the need for such out-of-state deals underscored the need for more energy efficiency, conservation, and other measures to reduce the need for Idaho Power to spend so much to import power. Specifically, the issues the Alliance raised with the PUC included:
Having said that, we continue to be concerned about the cost of this power purchase, and about the growing gap between the Company’s projected firm and summer peak power needs. As became evident in Idaho Power’s 2008 Integrated Resource Plan Update, the Company’s projected peak demand continues to grow at rates greater than its forecasted firm load. For us, that raises the question of whether additional efforts must be marshaled to reduce the summer peak, which if successful would reduce the need for such expensive power purchase agreements as this.
The Alliance is not asking the PUC to deny Idaho Power’s request in this case. Rather, we encourage the Commission to consider some modifications that might further incentivize what the Alliance believes is an already impressive improvement by the utility in its DSM programs. One option might be to allow 90 percent of the requested purchase amount in the first year of the contract, followed by 80 percent in the second, etc., and require the Company to make up the difference through energy efficiency and conservation measures beyond those the company has already implemented. This application is designed to address existing and chronic peak demand problems, and incentives to expand those programs is appropriate. Currently, about half of the Company’s DSM budget is going to address peak demand concerns, notably the valuable residential air-conditioning and also the irrigation cycling programs.
As for the cost of the power to be imported from Montana, the Alliance agrees first that if power must be imported during these expensive summer months, importing it from an east-side resource is logical given the well-established transmission constraints on the west side of the Company’s system. We’re also mindful of the significantly higher market purchase costs during the peak summer months. But we continue to believe that, including line losses, the cost of this power will approach 11 cents per KWh – a price that poses challenges for ratepayers in all classes. Furthermore, the cost of this power underscores the need for the peak demand reductions referenced above, as it does for a review of how the PUC and our regulated utilities define “cost effective” energy efficiency measures.”
III: PUC Seeks Comments on Transmission Project
The Idaho PUC on Thursday issued the following release, seeking comment on a proposed transmission line in Bannock and Oneida counties in southeast Idaho.
The Idaho Public Utilities Commission is taking comments through Sept. 18 on Rocky Mountain Power’s request to build a 345 kV transmission line in Bannock and Oneida counties as well as a new substation in Downey.
The transmission line portion of the project would extend from an existing substation southwest of the Salt Lake City airport north to the new substation at Downey.
Rocky Mountain Power, which serves customers in southeastern Idaho, Utah and Wyoming, claims the expansion is needed to meet “significant increases in retail load” and to enhance reliability in the entire region. The line would also provide increased transfer capability of power between the company’s eastern (Oregon, Washington and northern California) and western (Idaho, Utah and Wyoming) control areas. If approved, the project would accommodate the delivery of power from the Goshen wind project in Bingham County as well as future power projects the company anticipates to build in Idaho and Wyoming. Increased transmission capacity gives utilities more options for cost-effective power supply sources, either through the utility’s own generation or from generators on the wholesale market.
Rocky Mountain Power has secured franchise agreements permitting construction within public thoroughfares and has applied with local government agencies for land use authorizations. The company estimates the project will increase its revenue requirement from Idaho customers by about 3 percent that could be applied in a future rate case.
According to testimony the company provided the commission, the existing transmission capacity from southeastern Idaho into Utah is fully utilized and no additional capacity can be made available without the addition of transmission lines.
The company is applying for a Certificate of Public Convenience and Necessity (CPCN), which is typically required by the commission before a regulated utility begins construction on a generation plant or transmission line. Because Rocky Mountain Power’s proposed transmission line is already inside its certificated area, a CPCN isn’t required. However, utilities may file an application for a CPCN to obtain the commission’s assurance that the utility may eventually recover the costs of typically large investments. When the company obtains a CPCN, it means the company has adequately demonstrated to the commission’s satisfaction that the new facilities are necessary.
The commission’s role is to determine if the project is needed to serve customers, meet load requirements and increase reliability. The commission will also examine the cost-effectiveness of the proposal. The commission’s does not have primary responsibility in siting decisions. Local governments (cities and counties) exercise primary authority over land-use decisions. Through a series of public information sessions, the company has been working with local government officials and citizens to address the route of the transmission line and the siting of the distribution station. The line has been re-routed to address citizen concerns.
The commission is seeking comments from customers that address topics such as: 1) Is the project needed to serve customers? 2) Will the project increase reliability and contribute toward fewer outages? 3) Will the project benefit customers by enhancing the utility’s ability to access other generation sources to meet customer demand? 4) Is the project cost-effective?
The commission intends to proceed under a modified procedure that allows this case to be handled through written public comments rather than by public hearing. However, comments may request a public hearing.
Comments are accepted through Sept. 18 via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on “Comments & Questions.” Fill in the case number (PAC-E-08-03) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.
A full text of the commission’s order, along with other documents related to this case, is available on the commission’s Web site. Click on “File Room” and then on “Electric Cases” and scroll down to the above case number.
On the Agenda:
► The Idaho Public Utilities Commission holds its next decision meetings on Aug. 18, and 25. Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us
► The Bureau of Land Management and U.S. Forest Service will be taking public comments through Sept. 19 on the multi-agency programmatic environmental impact statement (PEIS) to expedite geothermal leasing on federal lands. BLM and USFS held a workshop in Boise on July 21 to discuss their geothermal leasing program, and they’ll continue to solicit public input on issues that need to be explored as the agencies consider geothermal leases on western lands in the future. More than 50 people turned out for the Boise meeting – twice the attendance of any prior meetings! For more information, go to: http://www.blm.gov/wo/st/en/prog/energy/geothermal/geothermal_nationwide.html
► The Idaho Rural Council is coordinating the Idaho portion of the “Homegrown Prosperity Renewable Energy Tour,” which will include stops in Buhl, Hagerman, Gooding and Boise, between Aug. 11-17. Here’s an excerpt from the tour website explaining its mission, courtesy of Rich Carlson from IRC:
“WORC’s seven-state Homegrown Prosperity Renewable Energy Bus Tour is on the road. The tour is promoting good-paying jobs and income for rural communities and offering solutions to reduce greenhouse gases and pollution. The 12-week outreach tour offers solutions to reduce greenhouse gases; increase energy efficiency in homes and businesses; clean, renewable energy; small-scale cooperative biodiesel production; local foods production, distribution and consumption; and good-paying jobs and income for rural communities.
A four-person crew, traveling in a converted school bus powered by biodiesel, will visit 40 towns in Montana , Wyoming , North Dakota , South Dakota , Colorado , Idaho , and Oregon .Besides using biodiesel instead of petrol diesel, the bus is equipped with solar panels to power a laptop computer and a TV, and there is a solar oven and other displays.
“Our use of oil, gas and coal is changing the climate, leading to drought, wildfires, and other problems for people around the world,” said Jeanne Charter, WORC board member from Shepherd, Mont. “Our energy supplies are less reliable and more costly every day. Energy efficiency and homegrown, clean, renewable energy can reduce the pollution causing climate change while creating hundreds of thousands of good jobs and protecting our land, air and water.
“We call on public officials to pass laws and fund programs that reduce climate change and build healthy local economies by increasing energy efficiency and clean, renewable energy. We call on everyone – government, business, and individuals – to make wise decision as consumers, stop energy waste, and reduce climate-changing pollution.”
There are more details about the tour at: http://www.homegrownprosperity.org/bus%2Dtour/
With four energetic college students staffing the bus, we are considering canvassing with progressive energy policy literature in Boise. Our 501 c 3 status
limits our ability to do candidate advocacy, but we hope to be at the Boise Co-op of Friday eve. (15th), the Capitol City Farmer’s Market on the 16th and the “take out” for tubers and rafters at Ann Morrison Park on the 17th.
Earlier in the week we’re on a tour of U.S. Geothermal, hope to stop at several wind projects between the Magic Valley and Boise.
Idaho Rural Council
► The Idaho Legislature’s Energy, Environment & Technology Interim Committee will meet from 9:30 a.m. to 5 p.m. on Sept. 17 and then from 8 a.m. to noon on Sept. 18 at the Capitol Annex in Room 204 in Boise. The agenda has not been determined; we’ll advise as soon as it is.