Idaho Energy Update
March 14, 2008
The Idaho Legislature continued to disappoint clean energy advocates this week, as the Senate Local Government and Taxation Committee voted to dish new tax breaks to French-owned Areva for a uranium enrichment plant it may or may not bring to Idaho. THE BILLS ARE UP FOR FINAL APPROVAL ON MONDAY.
On the good-news front, Idaho Power announced late Friday that it has filed with the Idaho Public Utilities Commission to increase the small amount it collects from ratepayers to add to its programs to increase energy conservation and efficiency programs.
Also on the upside: While returning to Boise from a meeting in Jerome on Thursday, the weather cleared on I-84 long enough to provide an excellent view of the Idaho Windfarms project taking shape north of the freeway. This is the first wind project being built in Idaho in more than two years. For those traveling on I-84 between Mountain Home and Glenns Ferry, the project can be seen by looking north at around mile-markers 103-106. You can get a closer view by exiting I-84 at the Old Oregon Trail exit at Mountain Home (the last of three Mountain Home exits if heading east; the first of three if you’re driving west). It’s an inspirational site to see the turbines going up at the Bennett Creek and Hot Springs wind sites being developed by Glenn Ikemoto and his Idaho partner, John Steiner. Combined, these projects will consist of 20 2.1MW Suzlon turbines that will produce about 40MW of power, enough to serve 8,800 homes. Idaho Power will buy the power, and John Deere Renewables is the owner-operator.
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: Areva Tax Break Bill Barely Passes Senate Committee
The Senate Local Government and Taxation Committee this week approved two bills to entice a French-controlled firm to Idaho so it can import processed uranium to convert it into nuclear fuel for export out of state. House bills 561 and 562, which have already been approved by the House, will be before the full Senate as early as Monday, March 17. If they’re approved and signed by the governor, Idaho would be in play among the four or five states trying to lure the nuclear services giant Areva and its toxic operations to their states.
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. Legislators supporting the bills said they’re important as economic development tools. Critics questioned the wisdom of showering a foreign-subsidized company with even more Idaho giveaways, particularly given the dearth of information about what the plant is designed to do. The Snake River Alliance has a bulletin on its site at www.snakeriveralliance.org.
While H561 flew though the Senate committee in a 7-2 vote. The more contentious H562 passed in a close 5-4 vote, with Assistant Majority Leader Joe Stegner of Lewiston saying the tax break for Areva was inequitable given that it will be TWICE the exemption granted to Boise-based Micron. In 2005, legislators capped Micron’s property tax valuation for its semiconductor plant at $800 million. H562 would let Areva – a complete unknown to Idaho and a company already heavily subsidized by the French government – grab a property tax exemption twice that given to Micron.
“If I was Micron and saw this, I’d be back here next year to get my taxes reduced,” said Boise Sen. David Langhorst, echoing similar warnings made by bill opponents in the House. Added Sen. Stegner: “Idaho doesn’t need to race to the bottom to attract any and all business to compete with some unknown. This proposal is too good a deal. We’re reaching too far.”
Meanwhile, a number of bills are close to approval or have been sent to the governor for his expected signature. They include H422, the so-called “green buildings” bill for new state buildings. We expect final approval on Monday, but the bill has been significantly watered down to require new state buildings to be from 10 percent to 30 percent above current energy efficiency (IECC) codes. Ten percent is laughably easy to obtain and 30 percent is easy, so the bill really doesn’t require the state to do much it’s not already doing. And H432, which would add funding to the Office of Energy Resources with monies received from the state’s share of renewable energy leases (geothermal), awaits the governor’s signature. Again, while this bill would add funding for now to the historically under funded OER, this is temporary money and so far there is no state commitment to fund a robust energy office with ongoing general fund appropriations.
H529, which would replace property taxes on operating equipment with a 3 percent production tax on energy produced by geothermal plants, has also been sent to the governor. This is similar to the tax reform passed last year for wind projects and should encourage more geothermal development in Idaho. Finally, H500, which would expand the definition of “commercial purposes” on state endowment lands to include various renewable projects, was signed by the governor today.
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 development on endowment lands. . . . . .HCR054
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. Dead this 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. Dead this 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. Dead this 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. This bill has been significantly weakened, reducing requirements that state buildings meet 30 percent above minimum energy codes to now meeting 10 percent above those codes. In effect, it does not require anything from the state that the state is not already doing, and it does not include Idaho among the states that are setting a standard for their own buildings.
Status: Passed the House 55-11-4 on Feb. 7. Killed by Senate State Affairs in a 5-4 vote, but revived in a weakened form. Easily passed the Senate and is now up for final approval in the House on Monday.
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 to help support the office’s operations.
Status: Sent to governor for approval. However, it will still require a “trailer” bill to provide required funding.
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: Introduced and referred to Senate State Affairs. Dead this session.
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: Sent to governor for approval.
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: Killed in the Senate, 20-13. Voting against the measure were Sens. Steven Bair, Stan Bastian, Joyce Broadsword, Dean Cameron, Denton Darrington, Bart Davis, Russell Fulcher, John Goedde, James Hammond, Lee Heinrich, Brent Hill, Michael Jorgenson, Shawn Keough, Patti Anne Lodge, John McGee, Shirley McKague, Curt McKenzie, Monty Pearce, Mel Richardson, and Jeff Siddoway.
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: Signed by governor March 14.
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 by the House, 60-10 on March 5; awaiting final Senate action 3/17.
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, 41-27-2 on March 5; awaiting final Senate action 3/17.
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.
Renewables Development on State Endowment Lands (HCR054)
Would promote the development of renewable energy projects on state-owned endowment lands. The non-binding measure “encourages” the governor, the Office of Energy Resources, and the Land Board “to work toward the development of energy production of renewable resources on state endowment lands for the purpose of maximizing the potential returns for education.”
Status: Approved by House; in Senate State Affairs.
Sponsor(s): Reps Eric Anderson and Bob Nonini; Speaker Lawrence Denney; Reps. Mike Moyle, Scott Bedke, Ken Roberts, George Eskridge, Frank Henderson, Cliff Bayer.
II: Owyhee Nuke Plant: County P&Z to Rule On Controversial Towers March 26
The saga of the Owyhee County nuclear reactor turned even stranger Wednesday when the County Planning and Zoning Commission reviewed a proposal by the nuke plant developer to make legal two data collection towers that were erected without county approval.
Nuke plant developer Don Gillispie and his companies, Alternate Energy Holdings, Inc., and Idaho Energy Complex, were before the commission to seek approval for a 10-meter (33-foot) and 60-meter (197-foot) tower, as well as two office trailers that have already been erected and located at the would-be nuclear plant site on Tindall Road near Bruneau. Aside from the irony of the developers asking the county to approve construction of something already constructed (in violation of county ordinances, since the developers have never had a permit to construct), the lengthy hearing on Wednesday seemed to indicate a decision was likely in favor of the nuclear plant developers.
Those presenting testimony were cautioned that the issue at hand on Wednesday was ONLY to discuss the immediate application for the towers and trailers. The county seemed uninterested in the fact everything was already built without county approval, or that they were build only to facilitate the nuclear power plant application. And those testifying were also told NOT to discuss the proposed nuclear power plant, since the towers and trailers officially had nothing to do with the plant. Instead, developers argued the two meteorological towers were erected to collect simple weather information such as wind speed and temperatures. Incredibly, the developers claimed the towers would benefit local farmers needing weather information – as if farmer didn’t already have that information, which is also available to every other farmer and rancher in Idaho.
Former Owhyee County P&Z Commissioner Joe Weatherby presented powerful testimony in opposition to approving the tower and trailer permits. Despite repeated objections from the nuke plant developer’s representative, Doug McConnaughey (whose objections were overruled by the hearing officer), Weatherby’s comments about the track record of the developers remained part of the record.
When the dust settled, the commission decided to defer a decision for two weeks – until March 26. Commissioners also agreed to accept any public recommendations on any possible “findings and conclusions” or any other recommendations until 3/26. We will be providing information on how to comment in the coming week.
The takeaway message for now is that it’s pretty clear the commission will rule in favor of AEHI and IEC, the nuclear plant developers. Despite the fact the developers failed to provide required information in past applications and then built the facilities anyway, and that the county evidently failed to sanction the developers, and that the developers also refused to pay the county the required $50,000 to allay the costs of processing their application for several weeks, the developers are still getting pretty much everything they ask for in Owyhee County.
III: Report: A Nuclear Reactor at Mountain Home AFB?
Reports are flying that the U.S. Air Force may be thinking about building a nuclear reactor at one or more of its big bases – Mountain Home AFB east of Boise chief among them – to develop new energy resources for its operations.
Reporter Matt Christensen of the Twin Falls Times-News summed it up this way:
“The U.S. Air Force is considering plans to build a nuclear reactor at its base in Mountain Home, according to statements made by U.S. Air Force Secretary Michael Wynne reported on an online military news site.
“The thoughts are, right now, we’re talking about Cannon out in New Mexico and Mountain Home up in Idaho,” Wynne said, according to Inside-Defense, a Web site that covers military issues.
The Air Force announced earlier this month plans to build a small test reactor, after being prompted to explore nuclear energy by federal lawmakers including Idaho Sen. Larry Craig. The Air Force would also assume operational controls of the nuclear facility it builds.
Air Force officials now plan to partner with the nuclear industry to develop a base-located reactor, though an Air Force spokeswoman downplayed the finality of the location following Wynne’s comments, according to the online report.
Craig and Wynne have communicated recently about the plans, however, and have spoken about Idaho, Craig press secretary Dan Whiting confirmed Tuesday.
“Sen. Craig would love to see a reactor at Mountain Home,” Whiting said.
In a letter from Craig to Wynne’s Pentagon office dated Aug. 2, the senator encouraged Wynne to “consider nuclear as a preferred source of electricity for military facilities for which reliability and security of supply are of paramount importance.”
The military is one of the single largest users of domestic electricity, Craig said in the letter, and a nuclear reactor could best meet its power demands and reduce its demand for domestic supplies of power. The construction of a 5 to 10 megawatt reactor would be enough electricity to power a typical Air Force base, in addition to surrounding communities.
Wynne and Craig have communicated about nuclear power since August, Whiting said.
Officials at Mountain Home Air Force Base were not aware of Wynne’s statements, said Sgt. Jasmine Reif, a spokeswoman for the base. Reif said she would find out more information but did not respond to follow up calls.
Click here to view a letter sent from Idaho Sen. Larry Craig to U.S. Air Force Secretary Michael Wynne about developing a nuclear reactor at an Air Force base
All of this raises a number of questions, beginning with the likelihood that any such reactor is at least a decade away from being deployed. While Sen. Craig’s enthusiasm is evident, the likelihood of such power plants built to serve a military reservation or any other non-DOE facility any time soon is very remote. It also raises questions about the military’s concerns about the reliability and security of civilian generation resources.
IV: More Raft River Geothermal Power on Contract – to Oregon
Boise-based U.S. Geothermal announced this week another power sales agreement from its Raft River geothermal plant, but the purchaser this time is an Oregon-based utility seeking the power to bolster its renewable energy portfolio.
This is great news coming from an Idaho company that’s leading the way in the Pacific Northwest in developing a huge renewable energy resource. In a March 11 announcement, U.S. Geothermal and Eugene Water and Electric Board (EWEB) announced a power purchase agreement in which EWEB will purchase a maximum of 16MW of electrical output from U.S. Geothermal’s Raft River Unit 2 for 25 years. In a related agreement, the Bonneville Power Administration will deliver the geothermal electricity to BPA’s customer load in Idaho, with a like amount made available by BPA to EWEB to serve its own load. It’s a win-win for renewable energy development in Idaho and for EWEB as it boosts its renewable portfolio.
“EWEB has been at the forefront of developing renewable energy resources to meet its increased demand and we welcome them as a potential new customer for Raft River,” U.S. Geothermal CEO Daniel Kunz said. “We extend our thanks to BPA for supporting renewable energy development at Raft River.”
U.S. Geothermal is currently providing about 10MW of power from the first phase of Raft River to Idaho Power. The expectations are that Raft River will be able to develop considerably more generation – and we have hopes that Idaho Power will be a purchaser. The state’s largest utility recently issued a request for proposals to acquire up to 100MW of new geothermal generation.
V: Idaho Power Files to Boost Tariff for Conservation Programs
Idaho Power on Friday filed a request to the Public Utilities Commission to increase the monthly “energy efficiency rider” from the current 1.5 percent of your electricity bill to 2.5 percent as the company plans to boost its energy efficiency programs.
The PUC request, which follows a similar request by Rocky Mountain Power earlier this month, would add less than 1 percent to a typical residential electricity bill. More important, it would generate an estimated $16 million a year for the company’s energy efficiency programs – up from the $7 million a year it collects under the current 1.5 percent tariff.
The PUC will soon acknowledge receipt of Idaho Power’s request and will set a public comment period, and we’ll let you know how to provide your input as soon as the PUC acts.
Clean energy advocates have long encouraged the state’s largest utility to return to the PUC with such a request, as the company has made progress in ramping up its energy efficiency, conservation and related programs. The monthly bill increase for all classes is small compared to the larger benefit from investing in energy-savings programs.
In a related filing, Idaho Power has proposed rate changes for residential and small commercial customers under the “Fixed Cost Adjustment” pilot program. This is the program that encourages conservation efforts by allowing the utility decouple its electricity sales to customers from the fixed costs of providing that service. The idea of the fixed cost adjustment is to remove the company’s disincentives to promote energy conservation measures, since if successful those measures might lead to reduced sales.
In this filing, the company says that: “During 2007, the company over-collected fixed costs from residential customers and under-collected fixed costs from its commercial customers. Therefore, residential customers are proposed to receive a 1.17 percent monthly reduction beginning June 1… Due to under-collection, small commercial customers are proposed to receive a 3.0 percent monthly surcharge June 1.”
In effect, this is how the new decoupling mechanism is designed to work: The adjustments are expected to me minimal, while the company continues to have appropriate incentives to encourage more conservation and efficiency measures.
On the Agenda:
►The House Education Committee will hear a renewable energy presentation from Rich Rayhill of Ridgeline Energy when it meets Monday at 8:30 a.m. in Room 148.
► The Idaho Public Utilities Commission holds its next decision meeting on March 31. Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us
► 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.
► The Idaho Green Expo runs May 17-18 at the Boise Centre on the Grove in Boise. See www.idahogreenexpo.org for more information.