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.

Energy Integrity Projects challenges validity of wind as a viable energy source

A group representing ratepayers recently presented to the Interim Committee on Energy, Environment and Technology. Representatives of the Energy Integrity Project say a great deal of the discussion on wind as an energy source has been done without the input of stakeholders who represent the ratepayers. The EIP believes that the Idaho Legislature is working with incorrect information when it comes to wind energy.

Last year the legislature looked at a moratorium on wind development backed by the group, who insist this issue is not necessarily as simple as not wanting turbines in their backyards. They say wind energy has been subsidized and promoted without proper research and oversight, that with up to two thirds of the value of a wind project coming from federal programs and tax subsidies including accellerated depreciation, federal cash grants and loan guarantees, the major beneficiaries of wind power are wind power developers. The group notes that Federal subsidies for wind projects have doubled over the last three years, and the total 2010 subsidies for wind energy exceed all other sources combined.

Energy Integrity Project representative Tauna Christensen noted that what they says is a 'green jobs agenda' destroys american jobs, touting a Madrid study and a ABC News investigative report on stimulus funds spending, among other sources.

"Implementing rigorous legislation in an effort to reduce our own nations' emissions is effectively pushing manufacturing intense industry to higher-emitting places like China," Christiansen said, causing more detrimental effect on the climate than maintaining those jobs on american soil. This, she said, damages the US economy and exacerbates greenhouse gas emissions world wide.

Senator Werk cautioned the group to examine the sources of these studies, noting additional information about who was backing these studies has been published.

Representative Cronin asked why the group is comparing jobs in the renewable sector to those in the manufacturing sector, taking issue with the suggestion that creating jobs in one cancel out those that may be created in the other.

Representatives of the group insist, however, that creation of jobs in the renewable sector is taking away from efforts to create manufacturing jobs. Overall, the group representatives said that their efforts were to illustrate that renewables is not a job-creation enterprise.

Senator Anderson noted that since taxpayer money has been spent on job creation in the renewables sector, this question is legitimate: that of how many jobs do we have out there on the wind farms, because we did spend taxpayer money to get there.

Update on Idaho’s Energy Plan

The Interim Energy, Environment and Technology Committee has enlisted the help of the Governor’s Office of Energy Resources, and specifically the Idaho Strategic Energy Alliance to assist with revising the 2007 Idaho Energy Plan to recommend changes to bring it current with present day energy issues.

The Plan is a comprehensive investigation of all of Idaho’s energy systems, with recommendations to help develop policy ensuring a reliable, low-cost energy supply, protecting the environment and promoting economic growth.

The body of the review document will include suggested policy actions, outline what has and has not worked, and what needs to be changed structurally, but the focus of the Alliance is not to provide specific tactical actions, which will be up to the interim committee. The draft will be available for public comment on the Alliance's website on October 17: http://www.energy.idaho.gov/energyalliance/.

With the final review almost complete, pending public input and vetting by the interim committee, the good news, says Dr. Aumeier, of the ISEA's board of directors, is Idaho's progress on conservation and energy efficiency as resources.

A few points from the ISEA’s report:
- Idaho ranks 26th in terms of energy efficiency, a fact which carries significant economic benefit.
- The task of educating an energy workforce is important, and also an important part of the Governor's Project 60 Plan.
- There has been tremendous growth in renewable sources of energy, especially wind. A section on “Lessons Learned,” will reflect that the innovation in renewables has real benefits as well as negatives in terms of accommodating the intermittent nature of the same. Whether to integrate more renewable energy will depend upon public sentiment on the costs and benefits and how they're weighted in our stakeholder groups. It's good to see people get engaged.
- Technology advances are offering approaches in conservation and use. It's important to keep a close eye on technology advances. Things are moving so fast, that options and costs are changing in real time.

Examples of technology improvements include improved drilling techniques are opening up opportunities in Idaho. These bring up questions regarding implications in regulation and structure. We’ve seen similar questions begin to pop up in expansion in renewable markets.

These technology improvements and the questions they raise are also impacting costs, since the last energy plan was drafted, the energy reserves that have been uncovered in our region are massive. They are also fundamentally changing energy options and choices, and Dr. Aumeier says the public needs to be kept up to date with the costs and benefits associated with each.

"We need to enable people to make the best possible decisions... what we know is there is no free lunch when it comes to energy production."

Ken Miller, clean energy director for Snake River Alliance offered a less rosy update from the perspective of his organization’s review of the Energy Plan. His organization has reviewed 34 of the 44 2007 plan recommendations they reviewed, finding:
- 17 were incomplete or showed no progress.
- 10 partially implemented.
- 7 implemented or mostly so.

Miller noted that the lack of progress is not one entity's responsibility and that of those unimplemented items, most are energy efficiency related. He stressed efficiency as a priority resource going forward, followed by the development of renewables and cleanest conventional resources.

In particular, Miller noted that the 2007 plan avoided climate recommendations. He stressed that regardless of political views of the committee, the 2012 plan must consider implications of climate issues.

“The federal government and surrounding states are defining the carbon issue for Idaho,” he said. “Bonneville Power, Idaho electric utilities are already planning for carbon constraints that will affect their resources decisions.”

Miller encouraged the ISEA to resist general or “easy-lifting” recommendations in the updated plan, and to avoid scrubbing element of the 2007 plan such as tax incentives simply due to budget constraints.

IJOBS package includes bill focused on expediting renewable energy projects

Idaho House and Senate Democrats introduced a package of bills Wednesday that its sponsors say are aimed at stimulating Idaho business and generating job growth. The Grow Green Idaho Jobs Act would expedite the permitting process for renewable energy projects. Another bill would establish a Jobs Council within the Governor’s Office charged with providing recommendations to increase jobs in Idaho. A third senate bill would direct the Departments of Commerce and Labor to provide market data to Idaho small businesses to help them compete in the market place and create jobs. All three senate bills were introduced and printed last week, and are waiting for a hearing. The remaining bills, set to be introduced in House Committees this week, focus on stimulating Idaho business growth and expansion, through small business incubators, tax credits on venture capital investments in Idaho business, and tax credits for businesses that create and fill higher paying jobs with benefits.

Sponsors have christened this the Idaho Jobs and Opportunity Blueprint (IJOBs), that they say borrows from programs that have been successful in other states.