Idaho Energy Update
Feb. 29, 2008
It was another miserable week for energy legislation, as the Senate State Affairs Committee killed one energy efficiency bill and then another – although one of the measures, requiring new state buildings exceed existing energy codes, may be revived on Monday. Meanwhile, the Senate Resources and Environment Committee left another clean energy bill clinging to life until next week. In all, the Legislature continues to roll up a dismal record in implementing the 2007 Idaho Energy Plan it approved by acclamation last year. On the upside, U.S. Geothermal received a drilling permit from the state of Oregon to explore the Neal Hot Springs project near Ontario, just west of the Idaho line. Meanwhile, the Idaho Public Utilities Commission has approved the Idaho Power rate case settlement, which means higher rates go into effect Saturday. And the developers of the proposed Bruneau nuclear power plant are caught once again stretching the truth in their dealings with Owyhee County.
See below for more information on these and other developments.
Thanks as always, and if you have any calendar items, please send them my way!
Clean Energy Program Director
Snake River Alliance
(208) 344-9161 office
(208) 841-6982 cell
I: In the Legislature: Energy Plan Collects Dust as Senate Kills Efficiency Measures
The Senate State Affairs Committee showed its stripes on energy bills this week, killing a bill to promote energy-efficient school buildings in Idaho on Monday and then killing another bill promoting energy-efficient state buildings on Friday.
S1412, sponsored by Sen. Elliot Werk, D-Boise, and also by the GOP leaders of the interim Energy and Environment Committee, would have helped Idaho school districts build energy efficient school buildings and would also pay for the needed inspections to make sure the new schools are in fact saving the energy they should. Despite the bill’s bipartisan sponsorship and support of the Interim Energy Committee, critics on the Senate panel said they didn’t like the idea of having new school buildings “commissioned” to make sure they’re actually meeting higher energy standards. That measure was then held in committee, effectively killing it. Then today, H422, which easily passed the House 55-11 earlier this month, had to run the same gauntlet and met the same fate. The measure, sponsored by Sen. Kate Kelly and with the unanimous support of the Interim Energy Committee – whose GOP co-chairs both testified in support – failed in a 5-4 vote. Critics again raised the commissioning issue, and claimed Idaho’s Permanent Building Fund is already promoting energy-efficient buildings. Voting against the measure were Sens. Brad Little of Emmett, Bob Geddes of Soda Springs, Joe Stegner of Lewiston, Denton Darrington of Declo, and Mike Jorgensen of Hayden.
The thrust of the argument in killing the energy-efficient state buildings bill was that it would cost about 1.5 percent of a project’s total cost to verify its performance through commissioning. Supporters argued the payback to Idaho taxpayers would come back multiple times through energy savings, but critics were not persuaded. While the bill was effectively killed on Friday, the committee has scheduled it on its agenda for 8 a.m. Monday to allow sponsors to come back with an amended version. Assuming they do, the measure is at risk of being so watered down as to be ineffective. For those wanting to learn more about this upside-down reasoning on energy efficiency, an Associated Press account of the hearing is appended at the end of this update.
Meanwhile, the Senate Resources and Environment Committee on Wednesday took up SCR128, which is aimed at finding legislative and other solutions the state can take to addressing greenhouse gas emissions. This is another bill that should have been a lock, but after more than an hour of testimony – none yet by the public – the committee withheld a vote and scheduled testimony to resume this Wednesday. Given that the Idaho Legislature has yet to pass a single bill that addresses greenhouse gas emissions, the odds of SCR128’s passage are far from certain.
Finally, the House Revenue and Taxation Committee on Thursday approved two bills (H561 and H562) tailored specifically to provide Areva, Inc., a French-controlled nuclear services company, with state and local tax incentives in an effort to attract Areva to Idaho rather than the four other states it’s considering. H562 would cap Areva’s property taxes in Bonneville County to the first $400 million the company invests in its uranium enrichment centrifuge project so long as it spends at least $1 billion on the project. H561 would give Areva a sales tax exemption for production equipment. Both are losers for taxpayers, let alone for the environment and the health and safety of Idahoans.
Those who watch the Legislature recall its attempts to curry favor with mega-companies such as Micron (which H562 is fashioned after) and Albertson’s have been unsuccessful. Micron chopped 1,000 jobs last year; Albertson’s was sold and is no longer based in Boise. The House Rev & Tax Committee refused to entertain any testimony dealing with what the Areva plant is designed to do – convert imported yellow cake uranium into nuclear fuel and create tons of toxic waste in the process – but restricted testimony instead only to tax policy issues. Even then, the bills fail the smell test, although as the media notes, they both appear to be greased by legislative leaders.
Each week, we’ll 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 Energy section currently looks like this:
Energy Efficient State Buildings Act . . . . . . . . . . . H0422
Energy facility siting, construction moratorium. . . . . .S1314
Energy facility, commercial purpose, endowment lands . . . H0500
Energy savings performance, facilities, contractors. . . . H0556
Energy-producing materials, sales tax exemption. . . . . . H0561
Geothermal energy electrical production, tax . . . . . . . H0529
Major energy facilities, siting certificate. . . . . . . .S1293
Nuclear energy use, public advisory vote . . . . . . . . .S1289
Renewable energy resources, federal lands, funds . . . . . H0432
Resources Office, collaborative report, energy options. SCR128
School building design, energy efficiency. . . . . . . . .S1412
Here’s a look at the status of pending bills:
Energy Facility Siting (S1293):
Creates a state facility siting authority to review and approve or disapprove sites for large merchant generation facilities.
Status: Introduced in the Senate and referred to State Affairs. No hearings likely, and this bill is dead for the session.
Sponsor(s): Sens. Clint Stennett, David Langhorst, Elliot Werk, Mike Burkett, Kate Kelly, Diane Bilyeu, Dick Sagness.
Non-binding Vote on Nuclear Power Plants (S1289)
Amends Idaho Code Section 39-3027 (which prevents passage of state laws prohibiting nuclear power plants for generation without voter approval) by requiring a positive vote by Idahoans for nuclear power plants proposed in Idaho. The vote is advisory and not binding.
Status: Introduced in the Senate and referred to State Affairs. No hearing likely, and this bill is dead for the session.
Sponsor(s): Sen. Clint Stennett
Power Plant Moratorium (S1314)
Places a two-year two years to the soon-to-expire moratorium on permitting or construction of merchant thermal power plant – through April 2010.
Status: Introduced in the Senate and referred to State Affairs. No hearing set; this bill is likely dead for the session.
Sponsor(s): Sens. Clint Stennett, Kate Kelly, Elliot Werk, David Langhorst, Mike Burkett.
Green State Buildings (H422)
Requires new state-financed buildings and major renovations of existing buildings to exceed national energy efficiency codes adopted by the state. Provides for buildings that cannot meet the requirements.
Status: Passed the House 55-11-4 on Feb. 7. Killed by Senate State Affairs in a 5-4 vote on Friday; scheduled to come up again Monday at 8 a.m. after authors have a chance to amend it.
Sponsor(s): Sens. Kate Kelly and Curt McKenzie; Reps. Eric Anderson, George Eskridge, and Donna Boe.
Office of Energy Resources Funding (H432)
Allocates most of the state’s share ($2.3 million) of recent BLM geothermal lease sales to the new Office of Energy Resources.
Status: Passed the House, 61-8-1 and sent to the Senate, where it has been referred to the Senate Resources and Environment and awaits a hearing.
Sponsor: Office of Energy Resources Administrator Paul Kjellander
Energy Efficient Idaho Schools (S1412)
Requires school districts to integrate certain design and commissioning procedures for new school buildings to ensure they are more energy efficient.
Status: Held and likely killed for the session by Senate State Affairs.
Sponsor(s): Sens. Elliot Werk (prime sponsor), Curt Mckenzie, Stan Bastian; Reps. George Eskridge, Sue Chew, Eric Anderson
Geothermal Power Plant Taxes (H529)
Replaces property tax for operating equipment at geothermal power plants with a 3 percent production tax, similar to that enacted last year for wind developers.
Status: Approved by House Revenue and Taxation Feb. 20; passed by the House Feb. 29 70-0-3. Sent to Senate.
Sponsor(s): U.S. Geothermal, Inc.
Energy Resource Office – Reporting on Energy Options (SCR128)
A resolution requesting that the Idaho Department of Environmental Quality and the newly created Office of Energy Resources report on opportunities and steps the Legislature can take to meet the goals of the state Energy Plan, particularly regarding how Idaho can address future state, regional or federal greenhouse gas emissions targets, achieve conservation goals, and develop renewable energy resources in Idaho. The report will be due July 1, 2008.
Status: Hearing on Feb. 27 was continued to Wednesday, March 5.
Sponsor(s): Sens. Kate Kelly, Clint Stennett, David Langhorst, and Gary Schroeder; Reps. Wendy Jaquet, Sharon Block and Sue Chew
Energy Facilities on Endowment Lands (H500)
Expands the definition of “commercial purposes” for leases on state endowment lands to include renewable resources, including fuel cells, low-impact hydro, wind, geothermal, biomass, cogeneration, sun or landfill gas as the primary power source of power for generating facilities of 25KW or less.
Status: Approved 63-0-7 by the House Friday and sent to the Senate, where it awaits a hearing in Resources and Environment.
Sponsor(s): Reps. Eric Anderson, Bob Nonini, Lawrence Denney, Mike Moyle, Scott Bedke, Ken Roberts, George Eskridge, Frank Henderson and Cliff Bayer
State Production Tax Exemption for Areva Uranium Plant (H561)
Exempts a proposed uranium enrichment plant by French-controlled Areva, Inc., from the state’s sales and use tax. This is a single-company bill designed specifically for the foreign-owned company that is seeking the best tax deals among five states it is considering for its uranium facility.
Status: Approved on voice vote by House Revenue and Taxation Committee on Feb. 28 and sent to the House.
Sponsor(s): Sen. Brent Hill; Sens. Bart Davis, Jeff Siddoway, Melvin Richardson, Steve Bair; Reps. Scott Bedke, Jim Marriott, Janice McGeachin, Dean Mortimer, Russ Mathews, Mack Shirley, Del Raybould, and Mike Moyle.
County Property Tax Cap for Areva Uranium Plant (H562)
Another Areva-specific bill would cap county property taxes at $400 million for a company investing at least $1 billion in a project.
Status: Approved by House Revenue and Taxation, 12-6, on Feb. 28 and sent to the House floor.
Sponsor(s): Rep. Dennis Lake; Sens. Bart Davis, Brent Hill, Jeff Siddoway, Melvin Richardson and Steve Bair; Reps. Scott Bedke, Jim Marriott, Janice McGeachin, Dean Mortimer, Russ Mathews, Mack Shirley, Del Raybould, and Mike Moyle.
II: Owyhee Nuke Developer Finally Pays Up, But His Story Doesn’t Wash
As reported last week, the developer of the would-be Bruneau nuclear power plant in Owyhee County finally coughed up the $50,000 he promised three months ago to help process his application for the power plant. But even now, it seems Alternate Energy Holdings continues to mislead the public on how the arrangement shook out.
AEHI CEO Don Gillispie issued a news release a week ago saying he and the county finally came to terms on his payment, and cited a “miscommunication” for his company’s failure to make good on its promise. The Idaho Statesman on Feb. 19 summarized it this way:
“Gillispie blamed the dispute on miscommunication. He said he would have paid the funds sooner, but the county didn’t submit an invoice or arrange for an escrow account so both the county and his company would have control of disbursements.
“It has always been and remains our policy to pay any costs associated with processing our application,” Gillispie said in a statement. “Now that these technical issues have been addressed and the correct protocols set up, the county may now move forward on evaluating our application, and it won’t be at taxpayer expense.”
As magnanimous as that sounds, it is sharply at variance with the facts, according to an Owyhee County e-mail to the Snake River Alliance in response to an Alliance public records request. The Alliance asked the county to provide any records about an “escrow account” with AEHI and about any “protocols” set up to handle the disbursement of the $50,000 Gillispie has owed the county since December. Here’s what the county had to say, in a response to the Alliance from Fred Kelly Grant, Planning Coordinator for the Board of Commissioners:
“I have advised snake river alliance that there is no ‘escrow’ account, and no protocol for use of an ‘escrow’ account, that the payment of $50,000 was by check to Owyhee County, and was deposited by the Clerk in an account in the General Fund from which expenditures related to processing this application will be taken.”
No escrow account, and AEHI has no voice in how its $50,000 will be spent. Idahoans will judge whether they choose to believe a developer of a nuke plant that doesn’t pay his bills and then misleads the media about how that money will be used – or whether they choose to believe the county officials responsible for approving the project.
Also, as a reminder: The Owyhee County Planning and Zoning Department has set a hearing for March 12 to review an application by Gillispie’s firm for a permit for two towers to gather data at the proposed plant site. For those new to this saga, the towers were actually erected last November, in violation of county ordinances.
III: Idaho PUC Approves Idaho Power Rate Case Settlement
The Idaho Public Utilities Commission on Feb. 28 approved a settlement between Idaho Power and various parties involved in the company’s most recent rate case. For residential Idaho Power customers, the immediate impact will be a 4.7 percent rate hike beginning tomorrow (Saturday).
The overall increase was less than the amount sought by Idaho Power, but will still increase the company’s revenues by about $32 million in what company Vice President for Regulatory Affairs Ric Gale called “A fair and equitable resolution to our general rate case.” The company’s original filing was for an increase to retail base rates of $64 million, or 10.35 percent. The average increase in the stipulation agreement approved by the PUC turns out to be 5.2 percent. Besides the residential rate hike of 4.7 percent, commercial, industrial, and irrigation ratepayers will see a 5.65 percent hike.
While this rate case resulted in an increase of about half of what the company requested, Idaho Power and the PUC let customers know further increases are likely – perhaps soon. Another rate case is expected to be filed this year for another increase, and Idaho Power will likely file its annual “power cost adjustment” case April 15 to recover added costs of providing power last year.
In its news release, the PUC said Idaho’s electricity rates are still the lowest in the nation, but that customers should anticipate higher rates in the future.
“This is a result of rising electrical demand, long overdue transmission upgrades and expansions and the continued increase in wholesale prices for oil and natural gas,” the Commission said. “The Commission continues to encourage customers to increase conservation and energy efficiency efforts where possible.”
Ironically, the Idaho Legislature has done nothing to implement the energy conservation and efficiency measures incorporated in its 2007 Idaho Energy Plan. Nor has the Commission taken steps to set conservation targets for Idaho’s regulated utilities, also as called for in the energy plan. In an unusual twist, the Commission release took note of the impacts these higher energy prices are having on Idaho’s most vulnerable consumers:
“The Commission recognizes the impact rate increase have on customers, especially those on low-and fixed-incomes,” the release said. “There are financial assistance programs available. Customers can learn about them by contacting their utility or the Commission at 334-0300 or 1-800-432-0369….”
Clearly, the time has come for far more aggressive conservation and energy efficiency measures not only for customers of the Big 3 regulated utilities, but for all Idaho electricity consumers.
For Idaho Power’s take on the PUC order, go to: http://www.idahopower.com/newsroom/pressreleases/20080228.htm
For the PUC’s take on the order, go to: http://www.puc.idaho.gov/internet/press/press.htm
IV: U.S. Geothermal Gets Oregon OK to Exploring New Site
Boise-based U.S. Geothermal, Inc., received good news this week, reporting that the Oregon Department of Geology and Mineral Industries “Issued a drilling permit for the first full-size exploration well at the Neal Hot Springs Project” in eastern Oregon.
U.S. Geothermal is already selling about 13MW of power to Idaho Power from its new Raft River project in southern Idaho and hopes to expand the Raft River site with another two stages of development – up to 100MW. The company said the Neal Hot Springs exploratory well, not far from Ontario or 90 miles west of Boise, will be about 3,500 feet deep and is expected to hit water of between 311-347 degrees – suitable for electricity generation. The site was first explored by Chevron Resources in 1979.
Company President and CEO Daniel Kun said he expects the exploratory well will be drilled in the second quarter of this year. The company said Neal Hot Springs has been selected by Idaho Power to negotiate a power purchase agreement for 26MW of power. For more information about U.S. Geothermal, go to www.usgeothermal.com
On the Agenda:
► The Senate State Affairs Committee meets Monday, March 3, at 8 a.m. in Room 204 of the Capitol Annex (Old Ada County Courthouse). The first agenda item is H422, the energy efficient state buildings bill referenced above.
► The Idaho Public Utilities Commission holds its next decision meeting on March 12. Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us
►The Northwest Power and Conservation Council meets March 11-12 at the Grove Hotel in Boise. Go to the Council’s website at www.nwppc.org and click the “Council Meeting” link for agenda and other information.
► The NW Energy Coalition’s spring conference and board meeting is May 30-31 in Helena. The agenda is being finalized; we’ll have details and registration information soon.
BOISE, Idaho – A Senate committee has killed a plan to require major new state-funded buildings meet energy efficiency standards that are 30 percent higher than required by Idaho law.
The measure was dumped Thursday on a 5-4 vote in the Senate State Affairs Committee, after passing 55-11 in the House.
Republican Sens. Brad Little, of Emmett; Bob Geddes, of Soda Springs; Joe Stegner, of Lewiston; Denton Darrington, of Declo; and Mike Jorgensen, of Hayden, opposed the bill.
They harkened to concerns of the Idaho Division of Public Works, whose administrator, Tim Mason, told them design work meant to determine a proposed state building’s energy savings could add to unnecessary upfront construction costs. The agency is already trying to save energy, but a mandate to meet the 30 percent requirement goes too far, Mason said.
“This is for the most part taking place,” said Darrington, who said he would have backed the bill, had it been just a nonbinding resolution. “I can’t see too much difference between what the bill requires public works to do, and what public works is already doing.”
A similar bill failed in 2007.
Proponents say this year’s bill could have saved taxpayers nearly $1 million over five years.
It would have applied the new energy standard to future large projects that receive state funding, including colleges and university construction. The results were to be reported to the governor and Legislature, to make sure the program was working.
The bill would have allowed projects to get a waiver from the standard in instances where Idaho’s Permanent Building Fund Advisory Council, which oversees state construction, deems it impractical to meet efficiency measures needed to achieve the 30 percent standard.
Mason told the panel his agency is already doing its best to achieve energy efficiency standards that exceed state requirements. Still, he said, making it a requirement would at the very least add to the steps his agency must take in designing its buildings.
After the bill died, Rep. George Eskridge, R-Dover and head of the joint Energy, Environment & Technology Interim Committee that unanimously backed the plan, said the vote shows a shortsighted view that places a premium on initial construction, without considering that taxpayers will be on the hook to pay for buildings decades into the future.
Had such a policy already been in place, Eskridge said, the 14,000-square-foot Aquaculture Research Institute built by the University of Idaho in Hagerman in 2005 might have gotten an energy-efficient heating and cooling system that taps into the region’s natural geothermal springs.
Instead, it has a propane system that cost the institute more than $42,000 in its first year _ nearly three times the estimates of design engineers. The Hagerman facility is now considering retrofitting its nearly new system for $47,000, to save $20,000 a year.
“It seems to me there’s an overemphasis on the cost of initial construction, without consideration of long-term operational costs,” Eskridge said. “The Hagerman facility is a good example.”
Lawmakers who backed the failed bill used examples from their own homes.
Sen. Curt McKenzie, R-Nampa and a sponsor of the measure, said he tried to get as much for his initial investment as possible when he built his home in southwestern Idaho. Only later did he realize a more efficient heating and cooling system could have saved him money down the road.
“We’re more than paying for it in the six years we’ve been there,” McKenzie said. “It probably does add more upfront. But you realize that very quickly over time.”
A service of the Associated Press(AP)
By JOHN MILLER