Idaho Energy Update
March 4, 2011
Idahoans have a chance to speak out on 17 different wind projects that are before the Public Utilities Commission – but that are also caught in the regulatory tangle created when Idaho’s big electric utilities sought PUC approval to clamp down on the renewable energy projects they must deal with. Meanwhile, legislation has been introduced to change Idaho’s eminent domain laws and place new requirements on private transmission developers hoping to string lines across big swaths in Idaho. Gov. Otter has a PUC opening to fill, and the Payette County Commission on Monday will once again take up the case of would-be nuclear developer Alternate Energy Holdings. For more information on these developments, along with your legislative update, 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 Seeks Public Comment on Multiple Wind Projects
The Idaho Public Utilities Commission is taking public comments on multiple applications on 17 different utility wind contracts, which utilities are generally opposing because they have a case pending before the PUC on how the state should regulate the prices and configurations of the relatively small wind projects that are popping up around southern Idaho.
Idaho’s three regulated electric utilities – Idaho Power, Avista Utilities and Rocky Mountain Power – have asked the PUC to intervene in whether the utilities must accept power from all wind projects at certain prices, including power from large wind farms that have been broken into smaller ones that qualify for more favorable prices. Utilities are required under the 1978 federal Public Utility Regulatory Policies Act (PURPA) to buy power from “qualifying facilities” at an “avoided cost” rate that is about what the utilities would have to pay if they generated their own power or bought it from outside markets. Traditionally, those more attractive rates were granted to projects generating 10 megawatts (MW) or less. But increasingly, utilities claim, far larger projects have been carved into 10MW mini-projects to qualify for the higher prices. Wind developers deny they’re trying to “game” the system, arguing instead the multiple projects bring advantages such as combined connections to utility systems and economies of scale.
While the overall issue of who qualifies for more favorable PURPA rates and things like the sizes of their wind farms and other issues are pending before the PUC, the Commission has reduced the size of projects that qualify for those rates from the former threshold of 10MW to 100 kilowatts, a size so small that it does not include wind farms. As a result, applications such as those at issue here that were technically submitted to the PUC after the retroactive date of Dec. 14 are in an effective moratorium. Wind developers have charged they reached agreements or were very close to having signed contracts with the utilities, but that the utilities unnecessarily delayed filing the contracts with the PUC so the contracts would miss the Dec. 14 cutoff date. In a similar case in 2005-2006, the PUC agreed to “grandfather” certain wind contracts if they were far enough along before a moratorium hit. That has not occurred yet in this case.
The applications and wind farms that are up for public comment include five wind projects in Bingham County in eastern Idaho that were submitted by Rocky Mountain Power; five wind projects in the Burley area submitted by Idaho Power (the former Cotterel Ridge wind project); two wind projects Utah that were submitted by Idaho Power; two wind projects in the Declo area submitted by Idaho Power; and three wind projects near Murphy that were submitted by Idaho Power. All projects were for up to 10MW, meaning they wouldn’t qualify for the PURPA rates under the PUC’s current orders.
For more information about the pending PURPA case, go to www.puc.idaho.gov and then “File Room” and then “Electric Cases” and scroll to GNR-E-11-01. Those interested in reviewing the cases for the multiple wind projects described above, including how to submit comments on whether the projects should be allowed to move forward, can also find them in the “Electric Cases” section. The Bingham County projects are at PAC-E-11-01, 02, 03, 04, and 05. The Burley projects are at IPC-E-10-51, 52, 53, 54, and 55. The Utah projects are at IPC-E-10-61- and 62. The Declo projects are at IPC-E-10-59 and 60. The Murphy projects are at IPC-E-10-56, 57, and 58.
II: Bill Would Change Eminent Domain Laws for Big Transmission
A bill that would require “direct” benefits to Idaho from private or “merchant” transmission lines wanting to exercise eminent domain rights is awaiting introduction in the Idaho House after a House State Affairs hearing raised questions that lawmakers want answered by the Attorney General’s Office.
House Bill 189, by Assistant House Majority Leader Scott Bedke, R-Oakley, was temporarily held in committee when lawmakers sought some specific advice from the A.G.’s office. Bedke’s measure would amend existing eminent domain law dealing with electric distribution and transmission lines to require projects by non-utility private firms prove they are delivering “direct” benefits to Idaho before they can exercise eminent domain procedures in case landowners are unwilling to allow the use of their land for transmission projects.
Bedke said he noticed the assessed market value in his home Oneida County jumped significantly recently, and learned it was due in large part to a new “Gateway East” transmission line. While he said that project – just 26 miles traverses his county – will have favorable tax revenue impacts, he said it raised the issue of whether similar projects should be able to exercise eminent domain rights to secure property. The issue is becoming increasingly topical as several big transmission lines, including some by Idaho utilities but others from private or “merchant” developers, are being proposed to cross large swaths of Idaho.
Opposing the bill in its current form is transmission developer LS Energy, which wants to build the 500-kilovolt Southwest Intertie Project (SWIP) from the huge Midpoint transmission intersection near Shoshone into Nevada to tie into another big transmission line to serve Las Vegas and the Southwest.
“We feel the bill as currently written would be a burden on this project,” LS Power representative Luke Papez told legislators, adding the measure creates a different standard for private companies than that Idaho utilities must meet. Papez said LS Power has acquired all but about 3 percent of the property access it needs for that line. Bedke said he believed LS Power’s concerns can be addressed through minor rewording in his legislation.
III: Gov. Otter Looking to Replace Jim Kempton on PUC
Gov. C.L. “Butch” Otter has a vacancy to fill on the Idaho Public Utilities Commission, and it’s a big one. Commission President Jim Kempton, who came to the three-member PUC in 2007 from a successful stint on the Northwest Power and Conservation Council, is not seeking re-appointment to another term.
Otter appointed Kempton to the PUC to fill the unexpired term of Paul Kjellander, who was named by the governor to become Idaho’s first director of the Office of Energy Resources. Kempton is a former state House member from Albion. He was a fighter pilot in the U.S. Air Force and an assistant professor of physics at the U.S. Air Force Academy. Following his Air Force career, Kempton returned to Idaho in 1981 and returned to ranching until elected to the Legislature in 1990.
Kempton’s departure leaves 2007 Otter appointee Mack Redford, whose term expires in 2013, and also Marsha Smith, whose fourth term expires in 2015, as the PUC’s remaining commissioners. Members of the PUC are appointed by the governor.
IV: Payette County Commission to Take up Appeals of P&Z’s AEHI Recommendations
The Payette County Commission’s Monday agenda includes an action item on two appeals of the county Planning and Zoning Commission’s recommended approval of a rezoning request by would-be nuclear reactor developer Alternate Energy Holdings, Inc.
The County Commission heard the appeals of the P&Z in January but deferred a decision. It is scheduled to take up the AEHI issue at about 11:15 during its regular meeting on Monday. The original hearing was requested by Betty Bercik regarding the P&Z Commission’s favorable rezone recommendation for the property that AEHI says it plans to use for the reactor. Another hearing was requested by Clifford Morgan on behalf of the Little Willow Irrigation District on similar issues. The appeals challenge the way the P&Z Commission reached its decision in favor of AEHI and also say nearby landowners will be adversely affected.
The Payette County Commission suspended consideration of AEHI’s rezoning request in December, shortly after the U.S. Securities and Exchange Commission froze trading of AEHI stock and then secured a temporary court order freezing the company’s assets in the wake of a far-reaching SEC fraud complaint against AEHI and its executives and related companies. In a federal court case that has yet to be set for trial, the SEC has accused AEHI and officers Don Gillispie and Jennifer Ransom of taking several actions to manipulate stock prices and engaging in questionable stock sales and other activities that in part supported a lavish lifestyle at the expense of bilked investors. While a federal judge lifted the freeze on AEHI’s assets, he also required AEHI report on its financial activities to the SEC, including any expenditure of $2,500 or more.
To review the SEC’s complaint against AEHI, go to: http://www.sec.gov/news/press/2010/2010-249.htm
On The Agenda:
► The Idaho Public Utilities Commission holds its next decision meetings on March 7, 14, 21 and 29. 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 Western Governors’ Association’s Industrial Energy Efficiency Summit will be held March 16 and 17 in Boise. The meeting, to be held at the Boise Centre and hosted by current WGA Chairman Gov. C.L. “Butch” Otter, includes sessions on industrial energy efficiency success stories, utility efficiency programs, regulatory policies that promote efficiency programs, and regional program resources. For more information, including the full agenda and registration information, go to: http://www.westgov.org/
►The Northwest Power and Conservation Council’s March meeting will be in Boise on March 8-9. Tuesday’s meeting begins with a meeting of the Fish and Wildlife Committee at 8:30 at the Hampton Inn Suites in downtown Boise. The full Council begins its meeting at 1:30 p.m. and includes a 1:45 p.m. panel on Idaho energy policy and a 2:45 presentation on Idaho Power planning issues. The Council meeting will continue at 8:30 a.m. on March 9. The Power Council is made up of eight members appointed by the governors of the four Pacific Northwest states and is the region’s leading authority on planning for the Northwest’s electricity needs, as well as the protection of fish and other wildlife. For information about the Council, go to http://www.nwcouncil.org/
IN THE LEGISLATURE: Geothermal Bills Moving Quickly
The Senate unanimously approved a quartet of geothermal energy bills designed to remove some hurdles in approving state leases for geothermal projects on state endowment lands. The bills were already approved without dissent in the House. Also, Rep. Scott Bedke’s bill to set new standards for non-regulated electric transmission developers to exercise eminent domain for their projects was held temporarily in the House State Affairs Committee pending a request that the attorney general be consulted on some provisions of the measure (see above for more information). And a bill was introduced in the House to allow counties to create new renewable energy authorities to facilitate development of projects within their borders. Otherwise, no energy bills moved in either chamber in the past week.
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 look something like this:
County-based renewable energy commerce authority H0208
Energy/environment/technology, interim study comm HCR004
Idaho National Laboratory, 60th anniversary HCR019
Renewable energy projects, expedite permits S1035
School district, electric energy, receive credits S1112
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).
Interim Energy Committee Renewal (HCR4):
Joint House-Senate resolution to renew the interim Energy, Environment and Technology Committee, which will convene after the 2011 session to study energy and related matters. This interim committee has been authorized to meet for the past 14 years, and this year it will be tasked with the Legislature’s first five-year review of the 2007 Idaho Energy Plan. Much of the 2007 plan has been implemented only in part or not at all, so the committee will review which of the dozens of plan recommendations should be updated or dropped from the plan – as well as whether new recommendations should be added.
Status: Approved by both chambers.
Sponsor(s): Interim Committee Co-Chairs Rep. George Eskridge and Sen. Curt McKenzie.
Geothermal Development on State Lands (H52, 52, 54, & 56):
Mostly technical but nonetheless important bills by the Department of Lands designed to remove certain barriers to geothermal energy development on state lands. H52 amends Idaho code to lengthen the maximum lease period for geothermal leases from the current 10 years to 49 years, similar to the change already made for wind. The extension is needed to provide time for geothermal energy developers of projects to recover their investments H53 would amend Idaho code to allow the state to negotiate royalty rates for geothermal projects on state lands, rather than be forced to use the current minimum annual rates of 25 cents per acre and royalties of not less than 10 percent of the geothermal resource produced. The change is needed to allow latitude in negotiating rates depending on the kinds of geothermal uses proposed. H54 amends Idaho code that restricts the size of geothermal leases on state lands. Currently, code restricts leases to a single “section”, or 640 acres, when in practice geothermal projects can cover thousands of acres. This change allows the state to negotiate one lease rather than several leases for each section of land. H56 modifies state bonding procedures to allow for lease performance in bonding and also to reflect bonding for actual surface disturbance without duplicating existing bonding requirements by the Department of Water Resources.
Status: All four bills approved unanimously by House and Senate.
Sponsor(s): Bob Brammer, Idaho Department of Lands; 334-0239.
School Districts and Renewable Energy (S1112):
Allows local school districts to exchange or receive credits on their bill for excess thermal or chilled water or electric energy not needed by the school district. As more school districts look to clean and renewable energy resources such as wind, solar, biomass and heat pumps, they want to be able to receive credit for excess amounts of energy they produce during times they don’t need as much. This bill would allow them to receive credits on their energy bills for unneeded energy.
Status: Awaiting hearing in Senate State Affairs.
Sponsor(s): Sen. Chuck Winder
Transmission Lines and Eminent Domain (H189)
Adds new language to existing state eminent domain language dealing with electric distribution and transmission lines. Says any entity besides a regulated public utility or a cooperative or municipal utility (meaning any private or merchant transmission developer) must show a new transmission line “directly serves the interests of the residents of Idaho.” While the state’s big regulated utilities have the power to use eminent domain if needed to acquire land for transmission rights of way, private companies would have to show a benefit to Idaho residents. There are questions about how to define those benefits. One private transmission developer, LS Energy, which plans a line in southern Idaho, opposes the measure on grounds it sets a higher standard for eminent domain proceedings than that for Idaho’s regulated utilities.
Status: Held in House State Affairs pending additional questions posed to attorney general’s office on certain legal issues.
Sponsor: Rep. Scott Bedke
County Renewable Energy Authorities (H208)
Authorizes counties to create their own “renewable energy commerce authorities” to help facilitate the development of renewable energy projects within their borders. The authorities could receive federal, state, or local funds and enter into contracts to acquire, hold or lease property to promote projects.
Status: Awaiting hearing in House State Affairs
Sponsor(s): Rep. Bert Stevenson