Idaho Energy Update
July 11, 2008
The saga of Idaho’s nomad nuclear power plant continues to drag on, with the plant’s developer offering up yet another would-be financial angel – but the missing ingredient is once again the money. Meanwhile, you can read the developer’s short note to Idaho Legislators in which he excused himself from appearing before the Interim Energy Committee at the last minute, saying he was “busy.” On the utility side, Idaho Power is asking the PUC for permission to buy about 83MW of summer peak power from Montana to deal with those high summertime loads, and the PUC will be holding a workshop this week to look into how to spend a half-million dollars made available when Idaho Power sold surplus pollution credits – a good thing. And the sale price for Intermountain Gas was $328 million. Read on for details on these and other energy issues.
Thanks as always, and if you have any calendar items, please send them my way!
Clean Energy Program Director
Snake River Alliance
I: AEHI’S Legislative Regrets Come With Terse Note
Idaho’s first would-be nuke plant developer not only stood up the Legislature’s interim energy committee, whose co-chairs wanted to hear an update on his plant proposal, it turns out he also sent an odd note explaining his absence. Alternate Energy Holdings, Inc., CEO Don Gillispie was supposed to address the panel to brief it on his company’s plans. Apparently, his business was more important than that of the Legislature. Here’s what he sent to Mike Nugent from the Legislative Services Office after leaving the building moments before he was to appear before legislators:
Sorry I missed the committee today…busy schedule these days and you were behind schedule
Attached is my presentation with backup slides. Also, here is a letter from an Oxford scholar from Idaho who recently attended one of my public meetings that the committee may find enlightening.
I am happy to reschedule to meet with the committee.
So that’s what the Legislature heard from the power plant’s developer, whose company also faced the unwelcome development of being red-flagged by the penny-stock market on which AEHI trades. Turns out the “Pinksheets” electronic over-the-counter markets placed a “Stop – Pink Sheets No Information” sign on its AEHI page. Here’s what the firm says that warning means: “Indicates companies that are not able or willing to provide disclosure to the public markets – either to a regulator, an exchange or Pink OTC Markets. Companies in this category do not make Current Information available via the OTC Disclosure and News Service, or if they do, the available information is older than six months. This category includes defunct companies that have ceased operations as well as ‘dark’ companies with questionable management and market disclosure practices. Publicly traded companies that are not willing to provide information to investors should be treated with suspicion and their securities should be considered highly risky.”
To learn more, go to www.pinksheets.com and then OTC Company Search and enter AEHI as the company symbol.
Finally, AEHI also announced this week that it has secured a financial supporter to help it pay the massive costs to submit its application to the Nuclear Regulatory Commission, as well as the $10 billion-plus it will need to actually buy the land and build the plant. This time, the firm is Texas-based Powered Corporation, which by all accounts is as cash-poor as AEHI. This isn’t the first time AEHI has touted a big investor for its nuclear scheme. Last August, it claimed Cobblestone Financial Group, a small New York investor that specializes in small commercial businesses, provided a letter of intent to fund the multibillion-dollar nuclear plant. Then last December, AEHI issued another news release claiming Silver Leaf Capital in Salt Lake City had pledged $150 million. Still nothing. Then AEHI pulled up stakes in Owyhee County and moved its Nomad Nuclear Plant 15 miles upstream on the Snake River to Elmore County. Now, AEHI has rolled out another company with an inactive web site, a failed foreign nuclear venture in Yemen, an ominous financial history, and apparently little money to bring to the effort.
According to the most recent filing (a July 2007 prospectus summary) by Powered Corporation on the SEC Info website (http://www.secinfo.com/d12Pk6.udPm.htm) the company listed a litany of “risk factors” that investors should know about before investing in the company. It’s an eye-opening list, to say the least.
II: Idaho Power Seeks Backup Power Supply from Montana for Summer Peaks
Idaho Power wants the Public Utilities Commission to approve an agreement to buy up to 83 megawatts per hour from a Montana power generator to meet its heavy summer peak loads. The request to the PUC comes as Idaho Power customers continue to set records this summer for peak demand, most recently topping 3,200MW on June 30.
The company is seeking a two-year power purchase agreement with PPL EnergyPlus of Montana. According to the filing, the agreement sought by Idaho Power would replace an Idaho Power-PPL Montana contract that expires at the end of August 2009.This agreement would provide Idaho Power with additional generation during summer weekdays in 2010 and 2011. The cost of the additional power during these peak periods will be $101 per megawatt hour (MWh), which Idaho Power says is competitive with other energy resources. The utility also says dealing with a Montana utility is preferable, given existing transmission and other constraints on the west side of its system.
It’s expected the added costs of acquiring this peak generation will face ratepayers when Idaho Power files its next Power Cost Adjustment next spring. For more information, visit the PUC at www.puc.idaho.gov and go to “File Room” and then Electric Cases” and then find IPC-E-08-13.
III: PUC Sets July 16 Conference on $500,000 for Energy Conservation Efforts
The Public Utilities Commission will hold a status conference at 1:30 p.m. Wednesday to discuss the best use of $500,000, which has been set aside from a case dealing with Idaho Power’s sale of $16 million worth of surplus sulfur dioxide pollution credits. The meeting, to be held at PUC’s Boise headquarters at 472 W. Washington Street, will allow interested parties to offer suggestions on how the funds can best be used. The PUC agreed to carve out the half-million dollars from another case involving disposition of the $16 million in revenues from the pollution credit sales. The PUC directed the rest of those proceeds to be used to reduce the size of Idaho Power’s most recent Power Cost Adjustment surcharge.
In response to a recommendation by Bill Chisholm and the Idaho Energy Education Project, commissioners agreed to open this new case. The IEEP has suggested half the money go to energy education in classrooms, with the other half for grants to schools in IPC service territory to install energy efficiency and renewable energy projects.
For more information, go to www.puc.idaho.gov and then to the “File Room” and then “Electric Cases” and then to IPC-E-08-11.
IV: Intermountain Gas Purchase Plans Disclosed – Sale Price Is $328 Million
North-Dakota-based MDU Resources said July 1 that it will buy Boise-based Intermountain Gas Co., which provides natural gas service to more than 300,000 Idaho consumers, the most of any gas utility in the state. The Idaho utility has been on the market for some time, and completion of the sale will require approval by the Idaho Public Utilities Commission, among other regulatory agencies and shareholders. Excerpts from the MRU news release:
“Bismarck, ND – MDU Resources Group, Inc. (NYSE:MDU) announced today that it entered into an agreement to acquire Intermountain Gas Company, a wholly-owned subsidiary of privately held Intermountain Industries, Inc. The acquisition is a cash-for-stock transaction.
Intermountain Gas, headquartered in Boise, Idaho, serves more than 300,000 customers in 74 communities in Idaho, including the Boise metropolitan area, Twin Falls, Sun Valley, Pocatello and Idaho Falls. Intermountain was founded in 1955 and employs 332 people.
The enterprise value of the transaction, including indebtedness, is approximately $328 million. The company expects to finance the transaction through traditional means, including the issuance of a combination of long-term debt and equity, on a basis consistent with MDU Resources’ utility capital structure.
“Intermountain’s service territory and their employee expertise and culture is a great long-term strategic fit within our existing regulated operations area, which stretches from Minnesota to the Pacific Northwest,” said Terry D. Hildestad, president and chief executive officer of MDU Resources. “Consistent with our long-term objective of growing our regulated utility as part of our overall business portfolio, Intermountain operates in a high-growth area with recent customer growth of approximately 4.5 percent annually. In total, after closing, our utility customer base will exceed 930,000 customers.”
The completion of the acquisition is subject to various regulatory reviews, as well as clearance under the Hart-Scott-Rodino Act, and satisfaction of other customary closing conditions. It is anticipated that closing will occur during the fourth quarter of 2008.
“As part of our extensive due diligence process, we found that Intermountain operates much like MDU Resources, with integrity and the priority of providing safe and reliable service to its customers,” Hildestad said. “We are extremely pleased to have a company of Intermountain’s reputation join ours.”
“When we made the decision to sell Intermountain Gas, it was very important to us that it become a part of an organization that would continue to build on our tradition of commitment to customers, employees and the communities we serve,” said Wm. “Bill” Glynn, president of Intermountain Industries. “I have personally known MDU for 30 years and they are such a company.”
When the transaction is completed, Intermountain will become an indirect wholly owned subsidiary of MDU Resources, continuing to operate as Intermountain Gas Company. Intermountain will join Montana-Dakota Utilities Co., Great Plains Natural Gas Co. and Cascade Natural Gas Corp. as MDU Resources utility business units. The utility segment currently serves approximately 510,000 natural gas customers in North Dakota, Minnesota, Montana, Oregon, South Dakota, Washington and Wyoming, as well as nearly 121,000 electric customers in North Dakota, Montana, South Dakota and Wyoming.”
V: Home Depot Taking Spent CFLs for Recycling
Home Depot stores have joined the growing number of outlets taking used compact fluorescent light fixtures for recycling, according to a news release issued Monday by The Home Depot and Idaho Power. The home improvement giant is the largest program offered by a retailer to date, with the chain’s 1,973 stores participating.
“Home Depot is doing their part to close the loop with CFL bulbs,” Idaho Power Energy Efficiency Program Leader Celeste Becia said. “They not only sell these energy-saving bulbs, but now offer consumers a safe and simple way to dispose of their DCFLs without concern for our local landfill or other environmental issues.”
While CFLs present huge opportunities to reduce energy bills – and cut down on greenhouse gas emissions from generation facilities – many consumers have expressed concerns about how to dispose of the bulbs, which contain small amounts of toxic mercury. Those with bulbs that have burned out are cautioned the bulbs must be intact before bringing them to large retail recycling drops such as Home Depot, which sold more than 75 million CFLs nationwide last year, resulting in about $4.8 billion in energy savings.
On the Agenda:
► The Idaho Public Utilities Commission holds its next decision meetings on July 15 and then on July 28. Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us
► The Idaho PUC will hold workshops in Moscow and Coeur d’Alene on July 23 and 24 to brief customers and answer questions about Avista Utilities’ request for electric and natural gas rate increases in its North Idaho service territory. Avista is seeking an average 15.8 percent rate hike for its electric customers and 5.8 percent on the gas side. The company says the electric rate increases are required to offset investments in upgrades to the Noxon Rapids and Cabinet Gorge hydro projects and to the Colstrip coal plant. It also says it spent $130 million on transmission upgrades. The company’s last general rate case was in 2004. For more information, go to www.puc.state.id.us and then to the “File Room” and then “Electric Cases” (or “Gas Cases” for the gas docket) and find AVU-E-08-01 and AVU-G-08-01.
► The Bureau of Land Management and U.S. Forest Service will hold public meetings across the West to hear from the public on a Draft Programmatic Environmental Impact Statement (DPEIS) to expedite geothermal leasing on federal lands in the West. The Boise meeting will be July 21 at the Boise Public Library and will run from 5:30 p.m. to 7:30 p.m. For more information, go to: http://www.blm.gov/wo/st/en/prog/energy/geothermal/geothermal_nationwide.html
►The Boise Mayor’s Climate Protection Program Advisory Committee will hold its final meeting at noon on July 23, at a location to be determined. The Committee has completed its recommendations to the mayor, so the final meeting will be to tie up any loose ends. To review the recommendations made so far, go to the Program’s site at http://www.cityofboise.org/Departments/Public_Works/Services/AirQuality/page18402.aspx, and then go to the Committee’s page.