Idaho Energy Update
Jan. 4, 2008
The Idaho Legislature convenes Monday in its makeshift quarters at the old Ada County Courthouse, just east of the Capitol. While leadership will try to shorten the session due to the cramped conditions and logistical challenges of meeting in the temporary facility, a number of energy-related initiatives are expected, ranging from how Idaho reviews large energy facilities to whether Idaho should adopt standards on how much renewable energy its regulated utilities acquire. Meanwhile, a busy 2008 is shaping up at the Public Utilities Commission, beginning with a discussion Jan. 15 on the disposition of $10 million in pollution credit sales received by Idaho Power and what may be a contentious rate case for the state’s largest utility. On the renewables front, work continues on the first wind farm to be constructed in Idaho in more than two years, and U.S. Geothermal is delivering power to Idaho Power from its Raft River project in southern Idaho. And Gov. Butch Otter quietly issued an executive order in December directing all state agencies to reduce vehicle-related greenhouse gas emissions – and buy hybrids or other low-emissions vehicles when possible. See below for more information, and how to learn more about these important issues.
Thanks as always,
Clean Energy Program Director
Snake River Alliance
I: Multiple Energy Proposals Expected as Legislature Convenes
When the 2008 Legislature convenes at noon Monday, the headline for the day will be Gov. Butch Otter’s combined State of the State and Budget address at 3 p.m. MST at Boise State University’s Special Events Center. Given the governor’s decision to create an Office of Energy Resources in his office, we anticipate he will make some mention of energy issues, including his support of commercial nuclear power plants in Idaho. Idaho Public Television will carry the governor’s remarks on its stations and on the Internet. We expect a number of energy-related bills and resolutions to be introduced this session. Among the likely proposals:
Facility siting: Democratic lawmakers have tried for the past three sessions to enact some sort of statewide “facility siting” authority to review large generation plants. Another attempt will be made this session, and its chances of passing in some form seem enhanced by announcements in 2007 of plans for two nuclear projects. The key to passage will likely be to find a way to ensure a continued local role in permitting coal, nuclear or even large wind projects. It’s possible there may be multiple “facility siting” bills this session, each with different approaches to the makeup of a siting panel and whether local jurisdictions should be required to seek assistance from state agencies. The current siting law, passed in 2007, is completely voluntary at the local level and as a result its effectiveness is dubious – a proposal for a nuclear power plant in Owyhee County has not prompted that county to seek the state review and counsel afforded in the law passed last session.
Greenhouse gas emissions: A resolution acknowledging the existence of global warming and the need for Idaho to address climate change issues died last year in the House Environment, Energy and Technology Committee. Lawmakers will try again this session with a bill that addresses the issue and calls for a legislative study on ways Idaho can reduce its greenhouse gas emissions.
Renewable Energy Portfolio: Idaho is among the few Western states without some sort of renewables portfolio standard, which essentially requires utilities to obtain a specific portion of their power from renewable resources. With Oregon and Washington adopting an RPS within the past 14 months, only Idaho, Wyoming and Utah do not have an RPS – and Utah is expected to adopt one soon. Legislation is expected to be introduced this session to require 15 percent of the power provided by Idaho’s three regulated utilities come from renewables by 2020.
Green building: After a bill to require new state buildings or major renovations of state buildings died last year (again, in the House Environment, Energy and Technology Committee), the bill has been retooled and is expected to gain swift approval this year. It would require new state-funded buildings to exceed national energy conservation codes. Local schools are not included, and while there are efforts to craft legislation to create a funding mechanism to help local school districts pay for more energy efficient schools, it may not be ready for the 2008 session.
II: Have a Say on How to Spend $10 Million in Idaho Power SO2 Proceeds
The Idaho Public Utilities Commission will hold a workshop Jan. 15 in Boise to hear ideas on what to do with an estimated $10 million in net proceeds Idaho Power collected in 2007 by selling surplus sulfur dioxide pollution credits. The company sold 35,000 SO2 emission allowances (each allowance represents a ton of emissions) last year for about $20 million. After brokerage fees and taxes, the amount at issue is $10.1 million.
Last year, the company took in about $70 million by selling surplus SO2 emission credits, made possible mostly by improving operations at coal plants Idaho Power operates with other utilities. In last year’s case, parties agreed to send 10 percent of the proceeds to company shareholders and 90 percent to ratepayers in the form of a reduced annual “Power Cost Adjustment” to reflect costs of providing power to customers. This year, however, Idaho Power is suggesting other possible ways to spend the money, including purchasing all or part of a wind farm or buying renewable energy credits (“green tags”) that represent renewable energy. The PUC is certain to hear other ideas on how to use the one-time money, including investing in long-term conservation and energy efficiency programs and undertaking energy efficiency education efforts.
Individuals or groups are invited to offer suggestions on what to do with the proceeds by attending the workshop, which begins at 9:30 a.m. at the PUC’s hearing room at 472 W. Washington St. in Boise. In addition, comments or suggestions will be accepted by the Commission through Jan. 15 via the Commission’s website at www.puc.idaho.gov. The case is IPC-E-07-18. There is a comment submission form under the “Contact Us” portion of the Commission’s homepage. You can also read more about the docket by going to “File Room” and then “Electric Cases” and finding IPC-E-07-18. Also, if you’d like an e-mail copy of our brief comments on last year’s case, drop me an e-mail and I’ll send it along.
III: Gov. Otter Orders Cleaner State Vehicles
With no fanfare, Gov. Otter on Dec. 20 issued an executive order directing state agencies to take measures to reduce greenhouse gas emissions from the state’s vehicle fleets – including purchasing hybrid or other low-emission vehicles when practical.
EO 2007-21 (http://gov.idaho.gov/mediacenter/execorders/eo07/eo_2007_21.html), acknowledges that vehicles “are a major source of greenhouse gases in Idaho as well as a major source of air pollution in Idaho’s urban areas,” and says the state “can and should lead by example managing its state vehicle fleet to improve and protect air quality, reduce greenhouse gas emissions and reduce the amount of fossil fuels purchased and used.” It directs state agencies to minimize vehicle-related emissions by:
1. Using less fuel by increasing fuel economy of state vehicles; increasing vehicle efficiency; and reducing miles driven.
2. Limiting the purchase or lease of four-wheel drive SUVs and similar vehicles unless needed for an agency to do its job.
3. Giving priority to purchase and use of hybrids and other fuel efficient or low-emission vehicles.
4. Having the Division of Purchasing make lists available of all vehicles that meet the requirements of the executive order.
5. Having the Division of Purchasing provide the Department of Environmental Quality and Office of the Governor with a quarterly vehicle purchasing report.
IV: Hearings set on Idaho Power Rate Case
The Public Utilities Commission has scheduled a three-day technical hearing on Idaho Power’s proposed rate increase, as well as public hearings on the case in Boise, Chubbuck, and Twin Falls.
In June, Idaho Power filed its rate case with the PUC, seeking an average 10.35 percent increase in rates, including 4.5 percent for residential customers (an average of $2.86 per month) , 15 percent for small commercial, 13.1 percent for large commercial, 15 percent for industrial, and 20 percent for irrigators. The rate hike would generate about $64 million. However, PUC staff has recommended smaller increases in all classes.
Idaho Power says that, since its last rate case in 2005, it has invested $300 million in its electrical system, including new transmission lines and substations, environmental upgrades at its power plants, and in other areas.
Typically, the PUC does not grant the full request when an Idaho utility comes in with a rate case, so the process of presenting evidence and hearing public comment is under way. The Commission will hold a technical hearing at its Boise offices from Jan. 22-25 to allow Idaho Power, Commission staff, and intervening parties to present testimony and exhibits on the case. The public hearings begin with a Jan. 23 hearing at 7 p.m. in the Commission hearing room in Boise, followed by a Jan. 29 hearing at 7 p.m. in the Chubbuck City Council Chambers and a Jan. 31 hearing at 7 p.m. in the Twin Falls City Council Chambers. For more information and to review documents in the case, go to the PUC’s website at www.pub.idaho.gov, click “File Room” and “Electric Cases” and find
V: U.S. Geothermal Delivering Power to Idaho Power; Wind Project Under Way
Finally, some good news on the renewables front!
Boise-based U.S. Geothermal has completed construction of its Raft River plant near Malta and is delivering electricity to Idaho Power. The Raft River Unit One project underwent some mechanical adjustments after a test run in October and was restarted in late November. The plant is delivering about 10MW of power to the utility. Idaho Power has identified 150MW of geothermal power in its long-term plan, and U.S. Geothermal has offered to sell about 45MW to the company. It’s believed the Raft River site may be able to produce upwards of 100MW of clean power once fully developed.
Meanwhile, construction is well under way at a pair of wind farms in the Mountain Home-Glenns Ferry area. The 20MW Bennett Creek project and the 20MW Hot Springs project are being developed by California-based Energy Vision and developers Glenn Ikemoto and John Steiner. When completed in the coming months, the 40MW of wind power will be the first to come online in Idaho in more than two years. The only other utility-scale wind farms in the state are the 64MW Wolverine Creek project east of Idaho Falls, which sells to Rocky Mountain Power, and the 10.5 MW Fossil Gulch wind farm near Hagerman, which sells to Idaho Power. Soon after completion of Bennett Creek and Hot Springs, work will begin on two more wind farms in the Hagerman area. The 10.5MW Cassia Farm project and the 18.9MW Cassia Gulch project will bring this year’s total of new Idaho wind farms to about 70MW.
On the Agenda:
► Idaho Legislature opens its 2008 session on Monday. See above for details.
► The Idaho Public Utilities Commission holds a workshop Jan. 15 to hear ideas on how to handle the distribution of Idaho Power’s SO2 allowance sale proceeds. See above for details.
► The Idaho Public Utilities Commission holds decision meetings on Jan. 7, Jan. 17, and Jan. 28. Agendas for the meetings are normally posted the day before on the Commission’s website at www.puc.state.id.us
►The Idaho Environmental Forum holds its annual Legislative Forecast meeting from 1 p.m. to 5 p.m. Jan. 30 at the Hoff Building in downtown Boise. Panel discussions include “Moving Past Gridlock”, “Powering Idaho’s Future”, and “Paying for Growth.” For more information, go to www.idahoenvironmentalforum.org