Idaho Business Review panel sheds light on energy projects that utilize waste

OnTuesday, the Idaho Business Review and Holland and Hart presented “Waste to Wattage,” a panel discussion on energy projects that use waste products as fuel.

Ada County Commissioners are pursuing energy conversion projects that reduce the volume of waste at the landfill, said Ada County Commissioner, Sharon Ullman.  The County is working with Dynamis, which uses a controlled gasification process to create energy from garbage.  This process reduces the volume of the garbage it consumes as fuel by 90 to 95 percent. With this project, Ullman said the fuel supply is continuous and the power it provides can be controlled to fill different needs. Ullman said the County has put $2 million into the project, a figure which she said compares favorably to the $30 million cost of burying waste over the past 6 years.  Nevertheless, Ullman said, this decision has opened the county up to criticism.

Dr.Erin Searcy, a bio fuels engineer with the Idaho National Laboratory, works primarily in wood biomass conversion projects and anaerobic digestion.  She noted that resources need to be put into researching conversion technology and posited that, while a cost effective business model for producing energy from waste at the dairy or farm level is not yet available, it is on the horizon. Anaerobic digesters need to be managed carefully, and are 

complicated to operate, although technologies are advancing toward this point every day.

“You can't just throw some poop in a bucket and make it work,” she said of farmb ased efforts, “you need an engineer.”  Dr. Searcy noted that scientists at the Center for Advanced Energy Studies are actively advancing the technology to address some of these challenges.  One example is a project she is working on to pre-ferment the waste material to stabilize the conversionp rocess.  But such efforts take funding.

“One of the things we have to do to move this energy process forward in Idaho is fund research to make farm-based energy projects less complicated,” she said.

Don Strickler, an energy efficiency engineer at Simplot, noted that Simplot plants currently employ utilize anaerobic digesters, utilizing wastewater that comes from the water in processing vegetables.  Bacteria eat the waste and make that gas that can be burned in generators.  

Mark Stokes, with Idaho Power Company, said that his power supply planning group works on the integrated resource planning processes.  They have contracts with anaerobic digesters, which are considered renewable energy projects subject to the Public Utility Regulatory Practices Act of 1978 or PURPA.  He noted that while most states have renewable energy portfolio standard requirements, Idaho does not.  Because of the abundance of renewable energy generation in Idaho, he said, our state is ahead of what the requirements would be in Oregon or Washington without mandated requirements under a portfolio standard.

Peter Richardson is an attorney who represents developers of PURPA projects.  PURPA requires utilities to buy power from small energy developers at the cost to the utility of developing the resource themselves.  Federal law charges the Public Utilities Commission in each state with setting the methodology, the terms and length of the contracts, and the avoided cost rates under PURPA.  

Richardson noted that a bill was under consideration this session that would have tied the renewable power generated by PURPA projects with the Renewable Energy Credits(or RECS) they earned.  He noted that this would make most renewable energy projects uneconomical, as the developers sell those RECs separately as an additional revenue source.

RECs are fictitious units created primarily to track the environmental attributes of renewable projects.  Once renewable portfolio standards began to be set in various states, RECs were developed as a way to track renewable energy.  

Stokes noted that the cost purchasing power from PURPA projects impacts rate payers.  He said if the RECs were attached to the renewable power they purchased, their value would be passed along to rate payers.

But would a change in the law affect plans for new renewable projects?  Does having access to the RECS they generate make renewable projects more marketable?  Richardson noted that the revenue stream from selling the RECS separate from the energy helps other states fulfill their renewable energy obligations under their renewable energy standards portfolios,and keeps small energy developers solvent.

Idaho Business Review will publish a complete story of the round table discussion in its March 23^rd issue.

PUC shares PURPA primer and an overview of Renewable Energy Credits

On Valentine’s Day, Idaho Public Utilities Commissioners Marsha Smith and Paul Kjellander briefed the House Environment, Energy & Technology Committee with some background information on the Public Utilities Regulatory Policies Act (PURPA) and Renewable Energy Credits (REC).

Commissioner Smith discussed PURPA which was passed in 1978 to encourage conservation of electric energy and to promote greater use of domestic renewal energy   The law forced regulated monopoly electric utilities to buy power from other small producers of renewable energy.  The Federal Energy Regulatory Commission (FERC) delegated primary authority to the states.

There are two classed of generation facilities:  small production facilities (like small hydro projects) and co-generation facilities that produce electric power and heat.  Utilities must purchase the power at avoided costs from the generating facilities.

FERC still has primary jurisdiction.  One important factor is what it would cost the utility to build or buy a project; however avoided cost does not take into account federal or state tax credits.  FERC does the rates for wholesale power and the states do the rates for retail sales.

If the utility buys power, the cost is passed through to the ratepayers.  If the utility builds the power source, the cost is passed on through the rates as well as a 10% rate of return.

Commissioner Kjellander reviewed renewable energy credits (RECs) which exist with or without PURPA.  A REC is a piece of paper which represents the equivalent of 1 mw pf power that has been generated by a renewable energy source.  RECs can be sold separately from the project or decoupled.  The question is whether the producer owns the REC or the utility which buys the power gets the REC.

RECs are important when a state has a renewable portfolio standard (RPS) which mandates that utilities must produce a certain amount of power from renewable sources.  Utilities in states with an RPS comply by showing that they are holding enough RECS to meet the standard.

Customers can choose to buy renewable power without a renewable portfolio standard.  The project that produces that power can sell the RECs to someone who needs to comply with an RPS.  RECS are traded through direct transactions or through a broker.  A REC can be used only once.