Those who follow the Idaho Power (IDACORP) Annual Meeting of Shareholders every May know these affairs can become testy once the meeting is opened to questions from the company’s shareholder-owners, some of whom challenge its policies – particularly when it comes to its coal plants and reluctance to address climate change.
These annual meetings are designed to allow company executives to recap key events of the past year and to describe the company’s financial health. They also feature re-election of board members, voting on executive compensation packages, and other matters. The meeting concludes with an opportunity for shareholders attending the meeting to pose questions to Idaho Power – one of the rare times when shareholders can directly interact with their company’s leadership.
More recently, annual meetings featured tough questions to Idaho Power’s top executives as shareholder-activists pressed their company to reverse its long-standing commitment to burning coal for much of its power generation. The trend began at the 2009 shareholders meeting, when a group of shareholders presented a resolution asking the company to craft a plan to reduce its climate-changing greenhouse gas emissions. Idaho Power aggressively sought to have that resolution rejected by shareholders, but it passed and made history as the first successful resolution asking an electric utility to take action on its carbon emissions. This resolution sent shockwaves through Idaho Power’s management circles and the utility sector in general.
Some new perspectives came out of Idaho Power’s 2015 annual shareholders meeting.
Idaho Power’s May 21, 2015, annual meeting revealed a number of encouraging signs that the relationship between the company and its activist-shareholders is becoming more amicable. To be sure, we didn’t extract any stunning commitments from the company, and we still have real differences on environmental issues, including some very contentious cases at the Idaho Public Utilities Commission. But the volleys between shareholders and Idaho Power President and CEO Darrel Anderson at this meeting were for the most part cordial and, unlike some meetings in the past, there appeared to be no hard feelings. Mr. Anderson, a long-time Idaho Power executive, became its top executive a year ago.
Here are a few of the signs – modest as they may be – that things are incrementally changing at the state’s largest electric utility:
- While Mr. Anderson said, “We take carbon very seriously,” he does not envision the company reaching the ultimate goal of zero carbon emissions – at least not for another generation or so.
- “Solar has a place in Idaho,” he said, adding he was “a little surprised” that the “community solar” issue (see below) did not come up as Idaho Power wraps up its 2015 Integrated Resource Plan, which is the company’s every-other year roadmap on how it will meet its future energy needs. One of the excuses given for not pursuing solar is that Idaho Power says it already has more than enough energy for the next decade or so. In our view, that may change if the Nevada coal plants are decommissioned early. And in any case, we believe the time has come for Idaho Power to better understand how to “integrate” solar onto its larger grid.
- The IDACORP Board decided the day before the May 21 annual meeting that it would “raise the bar” to achieve greenhouse gas emissions from 10% to 15% below 2005 levels to 15% to 20% below 2005 levels. It would also extend the reduction goal for another two years beyond the original target date to allow time to meet the higher reduction goal. The original reduction target was an outgrowth of the 2009 shareholder resolution that the company opposed.
- Anderson’s PowerPoint presentation included a slide showing the new electric vehicle charging station at Whole Foods, which was paid for by Idaho Power, Whole Foods, Snake River Alliance, and Idaho Conservation League. He mentioned the partnership with the two public interest organizations.
- The proposed “Boardman to Hemingway” transmission line from southwest Idaho to Boardman on the Columbia River could be a cornerstone of how Idaho Power plans to meet future energy needs, as it might help import excess power from the Northwest. We asked what would happen if the “B2H” line is further delayed or even if it is not built. We already knew the answer: New generation plants such as a natural gas generator would likely take its place.
- On the issue of the North Valmy coal plants in Nevada, which Idaho Power co-owns with Nevada’s NV Energy, he went further than any Idaho Power CEO has gone in saying the company is in discussions with NV Energy that could lead to retiring those units, which provide about 260 megawatts of power to Idaho Power, perhaps a decade earlier than planned. There were no commitments, of course, but when we’ve asked similar questions about coal plant retirement in the past, they were mostly brushed off with the explanation that customers want cheap and reliable power and that meant keeping the coal plants. It’s far too early for fist-bumps, but Idaho Power acknowledging potential retirement is certainly a step in the right direction.
- It was no surprise, but it was very clear that early shutdowns of these Nevada coal units are directly linked to development of the B2H transmission line mentioned above.
- Because it’s far from being finalized, nobody knows how EPA’s proposed Clean Air Act “111(d)” rule to reduce emissions from existing coal plants will impact Idaho Power or its coal plant co-owners. While Idaho Power is actively discussing possible impacts with its partners and others, the short video presented at the beginning of the May 21 annual meeting did cast the draft 111(d) rule in a very unfavorable light.
- Idaho Power was noncommittal on whether it might get into the electric vehicle charging station business and install EV chargers in more of its service area than just Ada County. Many utilities nationwide are diving into the EV charging business as they adapt their business models. Idaho Power isn’t there yet but has supported legislation to allow other companies to install chargers and purchase electricity from utilities.
- Anderson also seemed intrigued by new energy-saving technologies such as “Ice Bear,” which he mentioned by name and which can shift the times electricity is used to times when it’s cheaper and has been used successfully on large buildings.
So while the vibe in the room at this most recent shareholder meeting was about as positive as it has been for some time, we always urge caution in not reading too much into it. Encouraging? Sure. But the ultimate measure of commitment by this company, like any other, is results. And for now, it’s still too soon to tell whether or how quickly this battleship is changing directions.
What we do know is that many other utilities around the country already are changing directions on such issues as incorporating solar power, joining the EV charger wave, and shuttering coal plants. For Idaho Power, some of the driving forces will be not only an appetite among shareholder-owners of the company for change, but also among us as utility customers who need to continue speaking out for change. In some cases, it will also require nods from the Public Utilities Commission – the regulators that oversee utility operations – to buy into the electric utility revolution that has already begun.
As a side note, some of you may have noticed a quarter-page ad that appeared on page 2 of the Idaho Statesman on the morning of the May 21 annual meeting. The ad, paid for by the Idaho Sierra Club and the Snake River Alliance, was an open letter to Mr. Anderson urging his company to take a more active role in getting into what’s known as “community solar.” In general terms, the concept of community solar allows customers to purchase a share in a local solar power facility and to use credit from the energy generated from that facility to reduce their electric bill. Many utility customers cannot install rooftop solar for a variety of reasons, and a project like this would allow them to participate in solar power and receive a direct benefit. Such a project would also help Idaho Power gain experience in owning and operating solar power.
The letter was endorsed by the Alliance, Sierra Club, and Idaho Conservation League, as well as 55 local business customers, 12 Idaho non-profit organizations, three churches, and 430 residential customers – and counting.