Idaho Energy Update
March 7, 2008
A week after a Senate committee voted against bills to promote energy efficient schools and state buildings, the full Senate killed a resolution to engage Idaho in climate change issues and promote renewable energy. The 20-13 vote to kill the resolution was driven primarily by senators who don’t believe climate change is occurring, or if it is that climate change is a naturally occurring phenomenon.
Meanwhile, the House couldn’t vote fast enough to grant French-subsidized nuclear giant Areva a pair of sweet tax deals, as Idaho legislators sought desperately to woo the company’s uranium enrichment plant away from competing states, including Washington, New Mexico, and Texas.
On the upside, PacifiCorp’s Rocky Mountain Power asked the Public Utilities Commission to approve a request to ramp up its energy efficiency programs in eastern Idaho.
Also, Rich Rayhill, one of Idaho’s leading proponents of renewable energy, will give a presentation on “Renewable Energy Opportunities in Idaho” at the House Environment, Energy and Technology Committee meeting at 1:30 p.m. on Monday.
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: Climate Change Deniers Kill GHG-Renewables Resolution
To the surprise of many Legislature-watchers, the Senate this week killed SCR128, which would have directed the Office of Energy Resources and Department of Environmental Quality to look at the issue of greenhouse gas emissions and renewable energy and recommend to the Legislature possible actions to promote clean energy policies. The resolution called on the state “to prepare for the likelihood of future greenhouse gas regulation” and also “recommending policies which place the highest priority on the development of energy conservation and in-state renewable resources. The resolution requests that the Idaho Department of Environmental Quality and the Office of Energy Resources prepare a report identifying opportunities and steps the legislature could take to meet these Energy Plan goals.” The 20-13 defeat of the bill was particularly surprising given the number of senators who stood up to challenge or question whether climate change is occurring.
The House, meanwhile, wasted little time in approving H561 and 562, bills that were written specifically to make Idaho more appealing to Areva and the uranium enrichment facility it’s shopping around the country. 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. Ironically, the day after the House passed its Areva-friendly bills, news reports popped up in New Mexico, Texas and Washington state – all touting Areva’s efforts to woo policy-makers there for its plant. Those states already have the tax structures Areva is pushing Idaho to adopt, and seem to have the inside track over Idaho for tax and other reasons.
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.
Status: Passed the House 55-11-4 on Feb. 7. Killed by Senate State Affairs in a 5-4 vote on Friday; but revived in a weakened form and is now on the Senate’s calendar for approval in the coming week.
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: Passed the House, 61-8-1; Senate Resources and Environment Committee approved it March 7 and sent to the Senate floor for approval.
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: Passed by the House Feb. 29 70-0-3. On Senate calendar for final approval as early as Monday, March 10.
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: Approved 63-0-7 by the House Friday and sent to the Senate, where it is on the calendar for approval as early as March 10.
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 and sent to the Senate Local Government and Taxation Committee, where it awaits a hearing.
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 and sent to the Senate Local Government and Taxation Committee, where it awaits a hearing.
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: Awaiting final approval in the House as early as March 10.
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 Power Plant: Business Review Story Shows Company’s History
The Idaho Business Review recently (Feb. 25) ran a story on the history of Alternate Energy Holdings, Inc., the would-be developer of a nuclear power plant in Owyhee County. The Business Review’s reporter dove deep into AEHI’s past and discovered the company isn’t nearly as financially robust as many have been led to believe.
The story below discusses AEHI’s failure to pay the required $50,000 permit fee to Owhyee County until after the Snake River Alliance brought the issue to light. As we reported last week, the fee has in fact been paid, but not under the circumstances described by CEO Don Gillispie. Mr. Gillispie claimed he didn’t pay the money he owed because of a “misunderstanding” with the county over how the money should be used. His company had said it wanted its payment to be place in an “escrow account” so it would continue to have a say in how the funds are disbursed. The county has denied Mr. Gillispie’s version of the story.
Here are some highlights from the Business Review article:
“When Alternate Energy Holdings announced, just over a year ago, that it would build Idaho’s first commercial nuclear reactor, the company had few assets, no research and a multi-million dollar deficit from operating expenses.
Idaho wasn’t even the first choice.
While the company did want to eventually build a new commercial nuclear reactor, it wasn’t the first goal. According to the company’s 2006 initial stock issue statement, Alternate Energy Holdings planned to purchase a struggling nuclear power plant somewhere in the Sunbelt region, improve its profit margins and then construct another reactor on the same site.
The company was exploring a second option of moving out west to construct a new plant on an empty site.
At the end of 2006, the company said it planned to build a reactor on farmland in Owyhee County. From the beginning, the company’s finances have been in question.
In December of 2007, Alternate Energy Holdings issued a press release claiming to have secured $150 million from Silver Leaf Capital in Salt Lake City. But in February the Snake River Alliance, a local nuclear watchdog group, announced it had uncovered documents showing that Alternate Energy Holdings has not paid $50,000 in fees they owed the county to offset the cost of processing their conditional use permit, which had been filed back in July.
The company said, again through a press release, that the fees had been settled – though the county has not confirmed this.
According to the company’s 2006 financial report, filed with the “Pink Sheets” exchange where Alternate Energy Holdings stock is traded, the company’s short term assets that year were $320,344. The revenue was generated from the sale of common stock and the remaining assets of another company, Nussentials, which Alternate Energy Holdings had purchased.
The company had also calculated prepaid patent costs as a long-term asset of $1.1 million. According to the report, the prepaid patent costs represented “the fair market value of 1,149,999 shares of common stock that were issued to acquire pending patents for the removal of carbon dioxide from the exhaust of combusted fuels, a lightning harvesting, storage and conversion device, and a method and apparatus for heating and vaporizing liquid ethanol to improve the performance of gas turbine engines.”
Because the company’s finances were tied directly to the sale of its stock, liabilities canceled out assets: The combined total assets of $1.4 million were exactly equal to the company’s total liabilities and stockholders’ equity for the year.
Alternate Energy Holdings also reported a $19.5 million net loss in 2006, with $18.2 million lost to continuing operations.
The company’s March 31, 2007 quarterly report (the last time the company filed a financial report), told the same story: Total assets of $255,137 equaled total liability and stockholder equity.
Alternate Energy Holdings is traded as a “penny stock.” According to the Securities and Exchange Commission, penny stocks tend to be low priced securities offered by small companies, and are traded infrequently. The Pink Sheets electronic quotation system does not require companies traded on its system to meet listing requirements or file periodic reports.
However, Alternate Energy Holdings recently began posting its financial reports on the board (www.pinksheets.com), though the information is not up to date.
Alternate Energy Holdings was originally incorporated in the state of Nevada as Corptran Support in 2001. In December 2004 the name was changed to DRX Inc. In June 2005 it was changed again to Nussentials Holdings Inc., and then once more to Alternate Energy Holdings in September 2006.
Alternate Energy Holdings CEO Don Gillispie is also registered in the state of Nevada as the president and director of Sunbelt Energy Resources and a director of Estate Furniture Consignment Brokers. His daughter Taylor is also registered as an officer of all three companies.
According to Alternate Energy Holdings 2006 report, Sunbelt Energy Resource was created August 29, 2005 as a development company. Alternate Energy Holdings bought Sunbelt in September 2006 when it purchased Nussentials.
To begin trading as Alternate Energy Holdings, the company filed an Issuer Information and Disclosure Statement, dated October 9, 2006. Seventy-five million shares were authorized for trading, at $0.001 par value per share. About a third of those shares were issued to company officers and through a private placement.
Alternate Energy Holdings was motivated about the economic incentives in the Energy Policy Act of 2005. It’s clear from reading the issuer statement why they wanted to build the first new reactor:
“The bill provides an eight-twenty (80-20) loan guarantee for technologies that avoid, reduce or sequester air emissions, including advanced nuclear plants. Additionally, the energy bill conferees approved provisions supported by the Administration and industry to provide one hundred percent of the cost of delay (when delays are beyond the industry’s control) during construction and at the start of operations of the first two new nuclear plants. The costs would be covered up to five hundred million dollars for the first two plants and two hundred fifty million dollars for plants three through six. AEH plans to take advantage of this directive by ensuring its construction of a new unit will be one of the first six, and most probably the first two new plants to be constructed in the United States.”
At that point, in October of 2006, Alternate Energy Holdings had spent “approximately $1,000 on research and development.” In December of that year, the company announced it would build a commercial nuclear reactor in Owyhee County.”
III: Idaho PUC Seeks Comments on Rocky Mountain Power’s Conservation Tariff
The Idaho Public Utilities Commission is seeking comments on a proposal by Rocky Mountain Power (PacifiCorp) to allow the company to boost the amount customers pay for energy efficiency programs. Rocky Mountain Power serves portions of eastern Idaho. Like Idaho Power, Rocky Mountain Power has had a 1.5 percent “tariff rider” to collect funds for its energy efficiency and conservation programs. As these programs expand, the utilities are finding a greater need for more funding.
Rocky Mountain Power’s proposed increase from 1.5 percent of the company’s retail revenue to 3.72 percent would mean an average increase in utility bills of $1.56 a month. The PUC is accepting comments on the proposal through April 24. Following is a copy of the PUC release and how to comment on the proposal.
IDAHO PUBLIC UTILITIES COMMISSION
Case No. PAC-E-08-01
March 6, 2008
Contact: Gene Fadness (208) 334-0339, 890-2712
Rocky Mountain Power proposes increase in efficiency rider
Rocky Mountain Power is asking the Idaho Public Utilities Commission to allow the company to increase its rider on customer bills that pays for the utility’s energy efficiency programs. The commission is accepting comments on the proposal from customers through April 24.
The rider, currently set at 1.5 percent of the company’s retail revenue, would increase to 3.72 percent. If the commission were to approve that 2.2 percent increase, an average residential bill for the company’s eastern Idaho customers would increase by about $1.56 per month. Revenue collected from the rider must go directly to fund and administer energy efficiency programs and cannot be used for other purposes.
According to Rocky Mountain Power, the enhanced energy efficiency programs will offer information, services and cash incentives to help customers install energy efficient equipment or make permanent operational changes to reduce consumption and save money.
During 2007, programs funded by the rider produced 8,000 megawatt-hours of savings. With its proposed new and expanded programs, the company is hoping to achieve 13,140 MWh for each year over the next 20 years.
Rocky Mountain Power proposes these changes:
* Expanding the FinAnswer Express program, which provides incentives for commercial and industrial customers in the areas of efficient lighting, premium motors and mechanical upgrades to heating and cooling systems. Both new construction and retrofit projects are eligible. Rocky Mountain Power reports there is a waiting list of business customers wanting to participate.
* Adding the Energy FinAnswer program to its Idaho jurisdiction. Rocky Mountain Power, which operates as PacifiCorp in five other Western states, offers this program in other states. It would provide incentives and honorariums to builders of new construction projects that exceed current Idaho energy code by at least 10 percent.
* Modifying and updating the Irrigation Energy Savers program, which helps irrigators with system upgrades, including the installation of frequency drives on pumps that help them to operate more efficiently.
* Modifying the Home Energy Savings program to increase participation and align incentive levels with Idaho markets. The program provides incentives for residential customers for more efficient use of washing machines, dishwashers, water heaters, lighting, evaporative cooling, insulation and heat pumps.
Other programs funded by the rider that will continue without change are Refrigerator Recycling, Low-Income Weatherization Services and the Irrigation Load Control Credit Rider.
Customers can benefit in two ways from energy efficiency programs. Direct participation in these programs can reduce monthly bills. Also, all customers benefit when efficiency programs make it possible for utilities to reduce costs by not having to generate additional power or buy power from the market.
Those wishing to submit comments must do so by no later than April 24. Comments are accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on “Comments & Questions.” Fill in the case number (PAC-E-08-01) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.
The company’s complete application, along with other documents related to the case, is available on the commission’s Web site. Click on “File Room,” then on “Electric Cases” and scroll down to the above case number.
IV: Montana Wind Project a Lesson for Idaho
Here’s a lesson the Idaho Legislature and other state leaders could learn from our friends to the east. Gov. Brian Schweitzer and the Montana Legislature have a track record of attracting wind developers and other renewable energy companies to Montana, and their efforts are paying off big for both the state and local communities. Unfortunately for Idaho, the Gem State continues to drag its feet on attracting renewable energy, although it’s eager to offer subsidies and other enhancements for non-renewable energy companies such as nuclear power plants and uranium enrichment factories.
The following story appeared recently in the Billings Gazette. Of particular interest is the fact that Montana’s Department of Commerce has an “Energy Infrastructure and Promotion Division” – something Idaho could benefit from. And long-time readers of the Idaho Energy Update will remember that Horizon Wind Energy, the subject of the following story, is already selling about 100MW of power to Idaho Power. Which is great, except the wind farm is in Oregon, which is receiving most of the economic benefits of that project.
By MATTHEW BROWN
A Texas company with Portuguese backing is working with state natural resource officials in central Montana to develop a 300-megawatt wind farm – twice the size of the state’s largest existing wind project.
Horizon Wind Energy would erect up to 100 turbines near Martinsdale to tap into winds sweeping through the Musselshell River valley.
Horizon had been solicited to develop in the area by the state Department of Natural Resources and Conservation. The agency owns about 2,400 acres of school trust land within the 19,000-acre project site.
Gov. Brian Schweitzer and the Legislature have aggressively pursued wind energy over the past several years by courting developers, offering tax incentives that favor wind over fossil fuels and pitching state lands as potential project sites.
However, progress has been slow. The state’s total energy production from wind remains less than that generated by a single coal-fired power plant.
Only one major project – a 135-megawatt wind farm near Judith Gap – has been completed. And late last year, the administration’s efforts suffered a setback when another Texas company, GreenHunter, scaled back a 500-megawatt proposal near Glasgow to 50 megawatts after running into opposition from conservation groups.
But with several new projects now moving forward, state officials insist the industry will ramp up quickly in the next couple of years.
Horizon’s Martinsdale Wind Farm is one of at least seven totaling more than 900 megawatts being pursued along a swath of central Montana stretching from Big Timber north to Shelby. That’s an area buffeted by strong winds coming off the Rocky Mountains and onto the Great Plains – winds that federal energy officials say are among the best in the United States.
Statewide, officials say, wind farms totaling more than 3,700 megawatts are at various stages of development.
“We’re going to see a number of projects coming through here very , very soon,” said Chantel McCormick with the state Energy Infrastructure and Promotion Division, part of the Department of Commerce.
McCormick said another major wind company with European roots, Spain’s Naturener, is preparing to break ground in March on a 103-megawatt project near Shelby. The company’s McCormick Ranch Wind Park could eventually expand to more than 500 megawatts, she said.
As with Horizon’s Martinsdale Wind Farm, the ultimate size of the project will be governed by the availability of transmission line capacity to carry power to markets.
Horizon representative Chris Taylor said the company’s first 100 megawatts could be sent through an existing NorthWestern Energy line that runs through the area. After that, the company will need to find additional capacity to complete the project.
“Transmission constraints are the big issue for us, like they are for everybody in Montana,” Taylor said.
He said the power will be for both in -state and out-of-state markets.
A major new transmission proposal that would carry power from central Montana to Canada, the Montana Alberta Tie Line, has run into concerted opposition from local landowners and farmers and some environmental groups.
If the line is blocked or delayed, that could significantly choke future wind development.
The first signs of similar opposition with Martinsdale are emerging.
Gene Leary, 67, owns a ranch within a few miles of the proposed wind farm site. He described wind farms as “visual pollution” and said he worries such projects could mar central Montana’s scenic vistas, driving down property values and discouraging tourism.
“It’s a feel-good energy thing – clean power appeals to everybody,” he said. “A lot of them really haven’t thought about the consequences of what it would do in this area.”
Horizon’s Taylor said he was not aware such complaints were being made and said local officials were supportive of the project.
Houston-based Horizon has built wind projects in at least six states and Costa Rica. Founded in the 1998, the company was bought last year for $2.15 billion by Energias de Portugal, in a deal that made the Portuguese electric utility one of the largest wind producers in the world.
On the Agenda:
►The House Environment, Energy & Technology Committee will hear a presentation by Rich Rayhill of Ridgeline Energy on “Renewable Energy Opportunities in Idaho” when it meets at 1:30 p.m. on Monday in Room 145.
► The Senate Agricultural Affairs Committee will hear a report on carbon sequestration in the agricultural community on Tuesday, March 11, at 8 a.m., in Room 117 of the Capitol Annex. Dr. Sian Mooney from the Boise State University Department of Economics will present.
► 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.
► The Idaho Green Expo runs May 17-18 at the Boise Centre on the Grove in Boise. See www.idahogreenexpo.org for more information.