Idaho Energy Update
June 27, 2008
A weird week on the energy front in Idaho, thanks in no small part to the unexplained disappearance of the developer of the Elmore nuclear power plant just before he was to appear before a legislative committee to discuss his project. While Don Gillispie of Alternate Energy Holdings beat a path away from the committee, the panel heard from other experts, including a former Owyhee County Planning and Zoning Commissioner willing to discuss the project. Meanwhile, Idaho Power filed its newest rate increase, and unlike the past two, this one may not be settled so quickly. Also, Idaho Power has updated its power planning plan, which continues to emphasize conservation and energy efficiency.
Also: Don’t forget the Snake River Alliance is holding a PUBLIC MEETING on the AEHI nuclear power plant from 6 p.m.to 8:30 p.m. Tuesday, July 1, at the Mountain Home Library. Everyone is invited to attend and engage in this important community discussion! For information, call the Alliance at 208 344-9161
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: AEHI Ducks Committee Rather Than Address Legislature Over Nuke Plant
By now you know how things went down at this week’s meeting of the Idaho Legislature’s Interim Energy, Environment and Technology Committee meeting, which was punctuated by a surprise no-show by the developer of the proposed nuclear power plant in Elmore County. Alternate Energy Holdings President Don Gillispie was waiting to appear before the committee on Thursday, but when the time came for him to make his presentation, he was nowhere to be found.
Turns out Mr. Gillispie had left the building knowing he was about to be called for his presentation, and instead called legislative staff to say he couldn’t appear. Instead, he said he’ll e-mail his comments to what, as it turns out, is a pretty perturbed committee. What we didn’t know Thursday night when we posted our release on the Snake River Alliance website (www.snakeriveralliance.org), was that Mr. Gillispie’s “testimony” will now be given no more weight than any other comments submitted to legislators via e-mail. That’s because he chose not to appear to answer questions, and his information will be treated the same as any information provided to the interim Energy Committee, and of course many interested parties will be filling the vacuum left by Mr. Gillispie’s sudden absence. The Committee is scheduled to meet next on Sept. 17-18, and Mr. Gillispie is not expected to be invited to appear. As embarrassing as things turned out for the proponent of Idaho’s first commercial nuke plant, Thursday’s events presented critics of the plant with an opportunity to debunk the series of misstatements Mr. Gillispie has been making about his proposal. If and when he submits his comments, we will send them along.
Meanwhile, the Committee heard from a number of energy interests who did appear as promised during its two days of hearings. Here’s a sampling of what they had to say:
Idaho utilities presented updates on their energy plans as Idaho Power, Avista, Rocky Mountain Power presented for the three regulated utilities, and Jo Eng of Idaho Falls Power presented on behalf of Idaho’s two dozen public utilities.
Elg, speaking for the municipals and cooperatives, said customers of Bonneville Power Administration face big challenges as Bonneville prepares to allocate power to its Pacific Northwest customers, including Idaho’s many muni’s and co-ops. Elg said Idaho Falls Power, easily the biggest public in the state, faces tough decisions as it tries to find new power post the 2012 BPA allocation. Her utility’s biggest demands are in the winter, when BPA’s supplies are tightest, and as a result Idaho Falls goes to the markets for power costing about $100 per megawatt hour. She said Idaho’s public utilities are searching for new power resources – including wind – but so far haven’t reached any deals to meet their needs. Rep. Eric Anderson said he was “miffed” that Bonneville isn’t contacting potential firm power suppliers such as U.S. Geothermal to find new renewable resources within Idaho. Avista’s Clint Kalich presented his utility’s plan for the near future, saying his company relies mostly on natural gas, with only 200MW or so of coal. The upside at Avista, he said, is that the utility is well-positioned for meeting its energy needs for the next 10 years. He also said Avista is looking at three possible wind plant locations in the Grangeville area (Avista’s Idaho territory includes much of the Panhandle). He also said Avista is looking at a significant jump in demand – perhaps a one-third increase in load – as plug-in hybrids become more popular and their owners look more to the grid to energize their vehicles.
Idaho Power, the state’s largest utility, updated lawmakers on its IRP, which was just updated and refilled with the PUC (see below). Unlike Avista, Idaho Power has more near-term challenges in meeting its coming load growth. Like the other Idaho utilities, Idaho Power has cancelled coal generation for the next 10 years or so. Issues include the Bureau of Reclamation shifting its water releases into the Snake River, which Idaho Power figures will lop about 13 average megawatts or 60MW of peak generation off its critical July-August period. It is also delaying its planned Shoshone Falls hydropower upgrade from 2010 to 2013, meaning the 11 aMw and 15MW of peak power it counted on in two years will be delayed due to uneven water conditions. Idaho Power has hired the consulting giant Black & Veatch to conduct a solar power generation feasibility study, according to Mark Stokes, the company’s power supply manager. He told the committee Idaho Power consumers should brace themselves for steady power cost increases (see rate case item below). The “bright spot” – if there is one – is that rising rates also means more forms of conservation and energy efficiency measures become more “cost effective.” And that means conservation efforts that didn’t pencil out before soon will, as power costs rise even at one of the nation’s least expensive electric utilities.
Idaho Power G.M. for Power Marketing and Planning Karl Bokenkamp told lawmakers the company’s recent “request for proposals” for between 250MW and 600MW of new firm power was revised this week to a floor of at least 300MW – affirming the company’s concerns about bringing new resources online in the wake of slumping resources elsewhere. Bokenkamp also said Idaho Power is launching a new demand-side management (DSM) conservation study aimed at reducing peak demand, and said the results of that study will be included in Idaho Power’s 2009 IRP, which will begin this summer.
Idaho PUC Member Jim Kempton agreed the days of ultra-cheap power are over, telling legislators that state officials and utilities need to caution consumers that “rate shock is something they are going to experience in no uncertain terms.” Kempton warned Idahoans that there is a “huge backload” of issues building up – from power supply and transmission issues to diminishing hydropower opportunities – that will continue to add to Idahoans’ electric bills. He said it will be up to legislators, the PUC, and the governor’s Office of Energy Resources to brace Idaho consumers for coming price hikes.
Office of Energy Resources Administrator Paul Kjellander agreed with much of what Kempton had to say, adding his office’s new “25-By-25” group is beginning to hold committee meetings to come up with recommendations on how Idaho can squeeze more power from renewable resources. Kjellander said his biggest concerns remain developing adequate transmission for Idaho utilities (“We can do nothing without transmission; absolutely nothing”) and said Idaho needs more. He also departed from his oft-repeated “3 N’s (nuclear, natural gas, or nothing) mantra and said energy efficiency measures will be critical to meeting Idaho’s growing power needs. Besides efficiency and transmission, Kjellander identified “generation” as the third major focus of his office, although the nature of that generation remains unclear.
Last, but certainly not least, Idaho wind executive Rich Rayhill of Ridgeline Energy addressed the economic opportunities of wind power. He detailed each aspect of the jobs gained in these areas of the industry and cited Texas as the primary example of what a state can do to advance wind and the great benefits gained.
Framing the issue not in terms of the reality of global warming, but rather in terms of the Wall Street reality in response to global warming, he argued that gas, coal, and nuclear all present problems that make them poor investments in terms of market stability. He pointed to the tremendous success of all aspects of the renewable industry on Wall Street and advocated a 20-25% increase in wind production by 2030 and cited studies indicating that the sooner we increase wind development, we’ll have a greater environmental impact and see better economic returns.
Rayhill argued that a wind generation increase of 20 times today’s levels by 2030 is a realistic goal and the best option in terms of investment. Specifically addressing Idaho he argued that Idaho has all the tools needed for wind generation in terms of base resources, but said Idaho has room for creating a market place for wind that it is currently not taking advantage of given its high rating in terms of wind resources. He pointed to the large number of inquiries his company receives from out of state prospectors looking to purchase Idaho’s wind.
The question and answer segment was lively. Asked about possible state revenues from a recent bill liberating renewables contracts on state endowments lands, Rayhill predicted the number for turbines at between $6,000-$15,000 annually per machine.
In response to questioning around his position on an RPS, Rayhill simply stated that the evidence from even Idaho’s conservative neighbors (like Montana and Utah) indicated it was a good and effective idea. He said it was a great “hedge against the volatility of fuel” and the “uncertainty” of how carbon will be regulated. The Committee was pretty much captivated and it his points were solid and seemingly well received.
The Committee next plans to meet on Sept. 17-18, but that date could change and the agenda has not been set. We’ll keep you posted on further developments.
II: Idaho Power Files Rate Increase for 2009
Idaho Power on Friday filed its 2009 rate case to the Public Utilities Commission, submitting a proposal that will raise rates about 10 percent, assuming the PUC agrees with the company’s proposal.
The “sticker shock” for Idaho electricity consumers is becoming more a norm these days as poor water conditions, rising market prices for power purchases, and soaring costs for traditional power sources are taking their toll. Regulators, utilities and even the governor’s office are bracing consumers for escalating rates, which makes it all the more important for all those players to join consumers in demanding more aggressive energy conservation and efficiency measures to blunt the increases.
Idaho Power’s rate case filing can be found at http://www.puc.idaho.gov/internet/cases/summary/elec.html and scrolling down to Case No. IPC-E-08-10. You’ll find the application and supporting documents. But to cut to the chase, the biggest headline is that Idaho Power is proposing – for the first time – a new rate design mechanism that would price power at higher rates for certain times when it’s more expensive. What’s new in this rate case is that the company is proposing a tiered rate structure that is designed to encourage more conservation during high-use periods, the idea being to conserve energy when it’s most expensive.
Unlike the past two Idaho Power rate cases, which were settled without having to undergo a prolonged PUC hearing process, this one promises to be very contentious. It likely won’t be resolved until well into 2009, partly because so many different customer classes may take issue with how they’re treated in this rate case.
As of now, the company’s proposal would raise residential rates by about 6.3 percent (they just rose more than 8 percent as a result of unrelated energy cost issues), while small commercial rates would rise 10.6 percent, large commercial rates 11.5 percent, and industrial and irrigation rates 15 percent.
According to Idaho Power VP for Regulatory Affairs Ric Gale: “Two forces are driving this increase; growth in the number of customers and a growing demand for electricity. We have invested heavily to ensure we can provide a safe and dependable supply of energy for our current and future customers. This request seeks to recover those investments.”
The PUC, having just received the company’s application, will soon decide how the public can participate in this case.
Since it’s hot off the presses, we’re still evaluating the supporting affidavits accompanying the rate increase request and we’ll have more detail next week.
III: Idaho Power’s 2006 IRP Update NowAvailable
Like Idaho’s two other regulated utilities, Idaho Power files an every-other-year “Integrated Resource Plan” to the Public Utilities Commission. These IRPs are designed to keep the PUC and also utility customers and others aware of how our utilities plan to meet their future energy needs through such things as acquiring new energy resources and also implementing conservation and energy efficiency programs.
Idaho Power’s 2006 IRP was prepared and accepted by the PUC two years ago. The PUC is interested in coordinating IRPs among all three utilities, and as a result Idaho Power updated its 2006 version just now and will join the other two utilities in submitting full IRPs in 2009.
The updated Idaho Power reflects a number of changes since the one accepted by the PUC two years ago. Mostly, it shows better-than-expected gains in conservation and efficiency programs, but it also shows a troubling trend in which the company’s “peak” demand loads in the summer are growing faster than the overall growth in its firm demand balanced over the year. That means the company must focus on reducing its summer peak demand – though air conditioning, irrigation, and other energy-savings measures. For more information on Idaho Power’s IRP update, go to: http://www.idahopower.com/energycenter/irp/2006/2006IRPFinal.htm
On the Agenda:
► The Idaho Public Utilities Commission holds its next decision meetings on June 30, July 7 and July 15… Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us
► The Snake River Alliance holds its nuclear power plant public meeting from 6 p.m. to 8:30 p.m. on Tuesday, July 1, at the Mountain Home Library. See above for more information.
► 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.