|Idaho Energy Update
Jan. 24, 2011
Idaho Power sold $540,000 worth of surplus pollution credits last year, and last week the PUC ordered most of the money should be returned to utility customers rather than spending some of it on energy efficiency programs as proposed by some who commented on the case. Idaho Power also updated its projected cost for one of its major planned transmission lines, and the increase is considerable. Meanwhile, the American Council for an Energy-Efficient Economy has released a report on how to encourage more utilities to ramp up their efficiency efforts, and Idaho is included in the study. And Bonneville Power Administration will hit Idaho Falls on Friday to solicit comments on its plans for energy efficiency programs after this year.
For more on these and other developments, including the first energy bill introduced in the new legislative session, read on. Thanks as always, and if you have any calendar items, please send them along!
Clean Energy Program Director
Snake River Alliance
I: PUC Says Proceeds from Pollution Credit Sales Should Go to Idaho Power Customers
The Idaho Public Utilities Commission last week issued an order directing most of the $543,000 in net sale proceeds from the sale of Idaho Power’s surplus pollution credits be returned to customers.
As it has in the past, Idaho Power was able to sell extra pollution allowances for sulfur dioxide emissions in the wake of somewhat cleaner operations at coal plants in which Idaho Power has an interest. As part of the 1990 amendments to the federal Clean Air Act, a national trading exchange was established for sulfur dioxide (SO2) emissions allowances in an effort to reduce emissions associated with acid rain. Companies that haven’t reduced their SO2 emissions buy credits from companies that have, and in this case Idaho Power sold emissions three times in 2010.
The proceeds from such sales in the past have traditionally been divided among customers and Idaho Power shareholders on a 90-10 split in favor of customers, though that was later changed to 95-5. But in a 2008 case, Magic Valley energy efficiency advocate Bill Chisholm and his Idaho Energy Education Project (IEEP) successfully lobbied the PUC to divert some of the SO2 sales proceeds to fund a two-year energy education pilot project aimed primarily at public schools in Idaho Power’s service territory. That program began in 2009, and the PUC said it would hold off on whether to continue that project until after it is evaluated this year.
A number of parties commented in this case that an energy education or similar program should be considered for part of the $543,000 received from last year’s sale of 20,000 SO2 emissions credits. The PUC decided instead to return the lion’s share of the proceeds to customers through what’s known as the annual “power cost adjustment” (PCA), which is mechanism used to account for unexpectedly higher or lower costs of fuel and other power generation expenses. In times of abundant water years, for example, customers receive a credit on their bills because the company was able to maximize the use of its relatively cheap hydropower resources. But when gas prices or other costs rise unexpectedly, customers pay a surcharge.
In this case, the Snake River Alliance acknowledged the PUC would not likely use proceeds for energy efficiency programs, but the Alliance nonetheless urged the PUC and other interested parties to consider more creative uses of proceeds from future sales, including extending the IEEP energy efficiency education programs once the energy education pilot program has been proven successful. Other possible uses for the proceeds, the Alliance said, could include real estate acquisition for wind or solar projects and increased spending on energy efficiency programs. The Alliance told the PUC that devoting some of the proceeds to clean energy programs will extend the value of the funds, whereas Idaho Power customers will barely notice the small reduction in their bills due to this case.
To review the PUC’s order and other documents in this case, go to www.puc.state.id.us and then click “File Room” and then “Electric Cases” and scroll to IPC-E-10-20.
II: Idaho Included in ACEEE Report on State Efficiency Incentives
The Washington-based American Council for an Energy-Efficient Economy (ACEEE), one of the nation’s leading energy efficiency advocacy organizations, has released a report examining a variety of energy efficiency “incentive” programs to encourage utilities to boost their conservation efforts. Idaho, which does not provide for direct incentives to utilities that reach conservation targets, is included in the report in part because of a program in which Idaho Power paid home builders an incentive to produce a certain percentage of “Energy Star” homes. Idaho also has a pilot program designed to remove the disincentive for electric utilities to sell more of their product.
Energy efficiency efforts have long been stymied in part because utilities are being asked to reduce their sales volumes – and presumably sacrifice profits along the way. A number of states are exploring ways to provide for incentives to utilities to encourage them to do more to reduce energy consumption without impacting their bottom lines.
“The traditional utility business model doesn’t provide opportunities to earn financial returns on energy efficiency comparable to the opportunities that exist for investments in new power plants, ACEEE Utilities Program Director and report co-author Dan York said in announcing the new report, “Carrots for Utilities: Providing Financial Returns for Utility Investments in Energy Efficiency.”
The Idaho Energy Plan, adopted by the Legislature in 2007, features recommendations on how to provide incentives to utilities, although those recommendations have not been implemented.
For more information or to review the report, go to www.aceee.org
III: Idaho Power’s Transmission Line Cost Estimate Takes Big Jump
Idaho Power’s proposed “Boardman to Hemingway” transmission line from Canyon County in Idaho up to the Boardman area near the Columbia River took another twist last week, when the company told its citizen planning committee that the line’s cost has risen from about $640 million in 2007 to the new estimate of $819 million.
The transmission line, designed to improve the movement of electricity to and from Idaho Power’s service territory and the Pacific Northwest, is one of two major lines being planned by Idaho’s largest electric utility. The other is the Gateway West line from Wyoming through southern Idaho and to the Hemingway substation south of Nampa. Idaho Power had considered the Boardman-Hemingway line a “committed” resource, meaning it was including the line in its future planning efforts. But Oregon utility regulators told the company to slow down and conduct additional studies on the project.
The company announced the increased cost at last week’s meeting of its Integrated Resource Plan Advisory Committee, which helps Idaho Power prepare its every-other-year roadmap for how it will meet its future energy demands. It also filed the revised cost estimate with the U.S. Securities and Exchange Commission. Besides the updated cost estimate, the company also said the project will come on line later than originally planned, likely in 2016.
The precise route for the transmission line hasn’t been determined. Idaho Power has its preferred route, which includes a combination of private and government lands, but the U.S. Bureau of Land Management has yet to weigh in, after which it will release a draft environmental impact study for public review and comment.
Idaho Power has information on the transmission line at http://www.idahopower.com/AboutUs/PlanningForFuture/ProjectNews/BoardmanHemingway/default.cfm
IV: Bonneville Power Seeks Input on Energy Efficiency Efforts
The Bonneville Power Administration, which provides energy to much of the Pacific Northwest from a network of federal hydropower projects and transmission lines, is holding a series of public meetings this week to take comments on how it will provide energy efficiency programs beyond this year, when new power contracts take effect with utilities. Idaho’s meeting will be from 9 a.m. to noon on Friday, Jan. 28, at the Red Lion on the Falls in Idaho Falls.
In Idaho, Bonneville’s clients consist mainly of more than two dozen cooperative and municipal utilities. The state’s three large regulated utilities, Idaho Power, Avista, and Rocky Mountain Power own much of their own generation or purchase power from other energy developers.
Those in or near Idaho Falls are encouraged to attend Friday’s public hearing or provide written comments. Bonneville should be commended for helping to ensure that public utilities in the region meet their full share of the region’s energy efficiency targets and for instituting a “tiered” rate structure that encourages conservation by charging more to those who consume more. Bonneville also has provided an adequate budget for its energy efficiency programs and has involved stakeholders in its planning process.
However, clean energy advocates point out that Bonneville could do a better job in deciding how to spend its efficiency dollars – in other words funding programs that deliver the most benefit as opposed to simply allocating the funds to utilities. BPA is also being urged to take a closer look at how it funds large efficiency projects, such as those involving multi-city or multi-state stores that are served by multiple utilities. It should also reconsider plans to place a limit on certain conservation projects but instead should fund them based on their efficiency returns.
For more information about Bonneville Power and its energy efficiency plans, go to www.bpa.gov/Energy/N/post-2011
And for more information from the NW Energy Coalition, go to www.nwenergy.org
On The Agenda:
► The House Resources and Conservation Committee holds a bill introduction meeting at 1:30 p.m. tomorrow, Jan. 25, in Room EW40 of the Capitol. The committee will consider introducing four bills by the Idaho Department of Lands dealing with geothermal resources.
► The Idaho Public Utilities Commission holds its next decision meetings on Jan. 31 and Feb. 7 and 22. Agendas are normally posted the day before on the Commission’s website at www.puc.state.id.us. The meetings typically start at 1:30 p.m.
► The Idaho Solar Working Group meets at 9 a.m. Jan. 27 at the Joe R. Williams Building (“Hall of Mirrors”) at 700 W. State Street in Boise. The meeting will be in the first floor east conference room. The Idaho Wind Working Group meets at 8:45 a.m. the following day, Jan. 28, at the Owyhee Plaza Hotel in Boise.
► The Ontario Renewable Energy Summit will be held Thursday and Friday at the Ontario Readiness Center at 1330 SW 4th Street in Ontario. There is an admission fee. For more information, go to http://solaroregon.org/events/ontario-renewable-energy-summit
► The Boise Climate Protection Program Advisory Committee meets at 8:30 a.m. Wednesday, Jan. 26, in the Ancell Conference Room on the Fourth Floor of Boise City Hall. For information on the Committee and its work, go to http://www.cityofboise.org/Departments/Public_Works/Services/AirQuality/page25275.aspx
IN THE LEGISLATURE: Session Under Way; Few Big Energy Bills Expected
The Idaho Legislature’s first energy bill of the 2011 session was introduced by Senate Democrats. S1035, dubbed the “Grow Green Idaho Jobs Act,” is similar to legislation introduced last session. It calls for streamlining the review process of renewable energy projects and for developers to hold public workshops to provide information about their projects.
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 “Bill Center” link and then “Legislation By Subject” 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 will eventually look something like this:
Renewable energy projects, expedite permits S1035
Here’s a look at the status of pending bills:
Grow Green Idaho Jobs Act (S1035):
Calls on state and local government jurisdictions to “expedite” permit applications for renewable energy projects and to hold public meeting on the applications. Says the “permitting and approval of such projects shall be a priority of each state agency or political subdivision.” Requires local governments and the state to expedite permits for renewable energy projects and to provide for public meetings on such applications in an accelerated fashion.
Status: Awaiting hearing in Senate State Affairs.
Sponsor(s): Sens. Edgar Malapeai, Les Bock, Michelle Stennett, Elliot Werk, and Dianne Bilyeu. (332-1351).