Moratorium on Wind Farms House committee passes wind moratorium by narrow margin

On Wednesday, the House Local Government Committee moved its meeting the Senate/House Auditorium in anticipation of the large number of people opposed to wind energy wanting to testify in favor of H561.  The bill is sponsored by Rep. Erik Simpson of Idaho Fallsand proposes a two year moratorium on construction of wind turbines and an eight member legislative committee “to adequately and thoroughly assess the wind energy sector in Idahoand make recommendations based on that assessment.”

In the bill’s statement of purpose, Rep. Simpson laid out the rationale for H 561:

“Because of the massive financial incentives offered to wind developers at the federal,state, and local levels,” he said, “wind energy development in Idaho has proliferated at an unprecedented rate. In spite of the action by the Idaho Public Utilities Commission last year, which reduced the cap to 100Kw for wind developers to qualify for the published PURPA rate, wind development in Idaho continues unabated. Simply put, the negative impacts of wind energy on wildlife,residents, property owners, taxpayers, and utilities continues to be of concern.”

The list of those wishing to testify was lengthy. All but five were against the moratorium for a variety of reasons.  Those opposing H561 included farmers and ranchers, landowners and developers from across southern Idaho. They cited economic development, jobs, and local tax dollars from thesep rojects as reasons for their opposition to the moratorium.  They were concerned about private property rights and the possibility that many projects that are already started would be stopped before completion and the investments would be lost.

The few that testified in favor of the moratorium talked of wind turbines within 600 feet of their homes, the impacts of turbine shadows, noise and their private property rights.  They felt that they were fighting international corporations and vested interests as well.

After more than three hours of testimony and numerous questions by the committee members, H561 was sent to the House floor with a do-pass recommendation on a vote of 6-5.

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.

2011 Legislative Wrap Up

Idaho’s legislators called it quits Thursday with a couple of startling results.After killing a wind farm moratorium bill in committee and negotiating a compromise on the extension of the sales tax rebate for alternative energy in the final days, the House passed two bills on April 5 in favor of wind projects.

H347 would extend the rebate for those projects already in the works to December 31st. H348 would give the Idaho Public Utilities Commission jurisdiction over the avoided cost rates paid to PURPA solar and wind qualifying facilities. Only wind and solar projects producing 100 kW or less would continue to receive the standard avoided costs under PURPA but bigger projects would negotiate a purchase price.

When H347 failed by one vote in the Senate yesterday, the companion bill, H348, was returned to the State Affairs Committee at the request of Sen. Curt McKenzie.

An anti-degradation rule was negotiated this summer and fall. As with all rules it had to go by the legislature. In a rare move, the legislature chose to reject portions of the rule and replace them with H153. In doing so, legislators were acquiescing to a request by the industries involved and supported by the Department of Environmental Quality. They assured the legislators that this action will meet with EPA’s approval. Opponents may still proceed with a lawsuit to challenge the new rule and the statutory changes.

Under NOT SO STARTLING BUT IMPORTANT news: an amendment to Idaho’s current Right to Farm statute was challenged in committee hearings by several people whose concerns centered on dairies and confined animal feeding operations (CAFO). The amended law protects agricultural practices from nuisance lawsuits by adding an extensive list of standard agricultural practices. It does not add protection for negligent practices or change the current regulation of dairies or CAFOs. It also does not interfere with local planning and zoning authority. It passed the House and Senate and was signed by the Governor on April 6th.

Other Legislation That Made It:

H40: PROPANE FLAMING - There was a successful negotiated rulemaking to streamline the process for propane flaming of fields which is necessary for crops like mint but should not be regulated under the regular crop residue burning program. This bill changes the current law so that fees shall not apply to this practice.

H137a: ALTERATION OF CHANNELS OF STREAMS – This amends existing law relating to the alteration of channels of streams to provide that in specified situations, no permit shall be required by the state or any agency or political subdivision thereof from a water user or his agent.

H206: POULTRY – This adds to and amends existing law relating to poultry to provide for the Poultry Environmental Act; to provide for permits and registration of existing facilities; permits for expansions of operations; to provide for the design and construction of certain new and modified wastewater storage and containment facilities; to provide that the review and approval of plans by the Idaho Department of Agriculture shall supersede that of the Idaho Department of Environmental Quality.

H270: AGRICULTURE DEPARTMENT - RULEMAKING – This requires the director of the Idaho State Department of Agriculture to notify the public and the legislature in the event rules of the director are more stringent than federal law or regulations, or propose to regulate an activity not regulated by the federal government. It requires the director to use the best available science and apply well established risk assessment methods (The Idaho Department of Environmental Quality already has similar requirements).

H328: PUBLIC RECORDS – This amends existing law relating to public records to provide that public agencies may charge fees for the cost of filling requests for public records. This legislation was the result of records requests that were more like fishing expeditions and required a large commitment of staff time and copying thousands of pages.

HJR 2: NO MORE WILDERNESS - Idaho shall not support any wilderness designations without having used the public process, which includes the citizens of the state of Idaho, and urging our elected officials to defend this position whenever necessary with the full support of the citizens of the state.

S1001aa: SPECIALTY OFF-HIGHWAY VEHICLES – This amends existing law relating to all-terrain vehicles, utility type vehicles, specialty off-highway vehicles or motorbikes to revise provisions relating to certain operators of all-terrain vehicles, utility type vehicles, specialty off-highway vehicles or motorbikes on certain roads, to provide that certain unlicensed operators on national forest roads must have completed a safety course, to provide that a certificate or proof of completion shall be in the possession of the unlicensed operator and shall be provided for inspection upon request. This came about as a result of Forest Service action to close roads to ATV use because of concern for the safety of children under the age of 16 operating ATVs.

SCR105: WILD LANDS – This urges the Secretary of Interior to abandon the "Wild Lands" wilderness re-inventory and request the United States Congress to honor the longstanding commitment to multiple use management of public lands in Idaho and the western United States....

And some legislation that did not:

H242aa: EMINENT DOMAIN – This would have amended existing law to provide that eminent domain shall not be used for trails, bike paths, walking paths, greenways, or other alternate or limited use transportation corridors, except where bike lanes, bike paths, sidewalks, walking paths, greenways or other alternate or limited use corridors are adjoining or adjacent to highways, roads, streets, permitted bridges, toll roads, byroads, plank and turnpike roads. This passed the House but was held in the Senate Local Government Committee.

H268: EMINENT DOMAIN – This would have amended existing law relating to eminent domain to provide that certain entities exercising the right of eminent domain in behalf of certain public uses shall demonstrate that such use materially serves the interests of the citizens of Idaho. This bill would have applied to a private company trying to use eminent domain to build a merchant power transmission line that did not serve the interests of Idaho citizens. It was also held in the Senate State Affairs Committee after passing the House.

House Energy, Environment and Technology looks at the impacts of tax incentives for wind projects

The impact of Idaho tax incentives for renewable energy projects was the focus of presentations to the House Environment, Energy and Technology Committee this week.

A study from the Boise State University Center for Business and Economic Research was commissioned by a consortium of alternative energy producers. Another presentation from John Church of Idaho Economics followed, focusing on Exergy Development Group, developer of wind projects in Idaho.

The first study utilized data collected from projects of various sizes and from different locations combined and averaged into representative projects representing a 160 MW wind project and a low impact hydro project of 2.5 MW. The study included costs of permitting, construction and operations, as well as how much of the expenditures were local, and projected revenues over the life span of the project. Also considered were the types of jobs created when energy projects come into the state, the corresponding increases in income and expenditures. The study focused particularly on the impacts in rural areas.

Not surprisingly, much of the costs of renewable projects come from the construction phase. The representative wind company generated 380 jobs annually, with $36.7 million in labor income during the construction period. In the operations phase, the total fell to 94 jobs annually for the life of the project and $3.6 million in annual labor income.

The low head hydro project, in contrast, generated 92 jobs during the construction period with a labor income of $3.3 million. The operations phase represented one employee annually, with $50,000 in annual labor income.

The study concluded that Idaho’s tax exemptions and rebates for renewable energy projects have been successful in bringing more such projects to Idaho and have a net positive impact. But a prevailing question throughout the presentations dealt with the impact to the consumer when utility rates go up as a result of buying energy from these projects. Neither study took this factor into account. Committee members also questioned new job figures, some of which may represent workers brought in from other states to function in specialized fields, although they also represent a share of the consumer spending realized by communities in which such projects were sited.

Representative Anderson questioned the value of the incentives, is a 6% sales tax rebate truly what motivates such projects to locate here? Analysts noted that Idaho’s population centers and transmission capabilities typically factor into such decisions.

Idaho’s alternative energy projects have grown from 75 to 400 MW since 2006, and there does not appear to be a decline in new projects. Given what he describes as this “explosion of wind energy in the state,” Representative Simpson asked when we stop incentivizing such projects. Experts assert that developers are aware that this rebate is scheduled to sunset in 2012, and are continuing to locate in Idaho, based upon the assumption that the rebate will be extended.

But what of existing public utilities’ need to pick up the slack when the wind doesn’t blow, Chairman Raybould asked, perhaps rhetorically, pointing out traditional utility's ineligibility for tax incentives when they back up wind projects.

Dr. John Church's presentation focused on economic and fiscal impacts to the state from the perspective of Exergy Development's construction and operation of 300 MW of wind energy in Idaho.

Over a 2 year period, this project would create an additional 650 jobs throughout the state, including specialized workers from outside Idaho. Post construction, the jobs from wind projects shrink dramatically, representing another 125 in ongoing jobs in rural Idaho over a lifetime of 25 years.

This study also evaluated the net effect on state income for each $1 increase in personal income. Income to the state can be realized in sales tax, some in vehicle license fees, registration taxes and product taxes. The additional jobs represented by Exergy projects total $120 million in additional tax revenues from all sources.

Exergy also pays property owners a royalty for placement on their lands. A farmer with ten windmills would realize $60k per year.

Representative Simpson reiterated the prevailing concern about the impact of these projects on utility rates.

“I’m looking at the increased cost for the rate payers,” he said of the rebate. “They hurt everyone, and the end result is we’re paying more for utilities. There should be no net negative over the lifetime of the project to the rate payer . . . most of these projects aren’t base load projects, but intermittent projects, and they’re very costly. “

“I’m not advocating for this as the end-all for energy supply,” Dr. Church said, responding to Representative Simpson's comment and others about the intermittent nature of wind energy and the costs to the consumer.

“It (wind energy) may have some characteristics that are somewhat variable, as others are variable,” he said. “It is one piece of an ideal portfolio, the combination of wind and hydro. There are some synergies that could work very well together. These two are not incompatible in any stretch of the imagination.”

But for Representative Anderson, the question came back to whether or not tax incentives for such projects should continue, although this committee is focused on the energy supply in Idaho and it will be the job of the Revenue and Taxation Committee to deal with the issue of extending tax incentives.

“I’m not convinced with any of these studies that the rebate is the deciding factor,” Representative Anderson said. “I’m not there with whether or not to extend this rebate.”

Integration of Wind Energy into BPA Power Grid - ICIE's Saturday Summary 3/28/09

This is a weekly roundup of some of ICIE’s activities in and around the Idaho Legislature. Staffing limits mean we can’t cover every meeting. If there’s an item of interest to you at an upcoming meeting of one of the environment or agriculture committees, let us know and we’ll try to cover it. Agendas are available at www.state.id.us. Click on “Legislative” and click on “Calendars and agendas.”

Note from ICIE: Committee meetings are slowing down but I wanted to forward this report by John Williams to the Senate Resources & Environment Committee earlier this month. We had a brief discussion of it in an earlier Saturday Summary; however, alternate energy is such a hot topic, I thought you would like to see John’s entire report.

“Integration of Wind Energy Into BPA Power Grid”
John Williams, Idaho Constituent Account Executive, BPA

I. BPA strongly supports wind power: since the 2007 NW Wind Integration plan, BPA has been working with regional stakeholders on various solutions to integrate large amounts of wind power in a reliable and cost effective manner.

Within BPA’s balancing authority (BA)/Transmission control area, wind power has increase from 25 mw 10 years ago to more than 1,500 mw today. This may double by the end of 2009.

Several factors are driving the need to develop renewables in the NW: 1) increase demand for power, 2) state renewable portfolio standards, and 3) climate change concerns. There are challenges in meeting RPS and climate concerns.

II. Renewable Portfolio Standards: California, Oregon, and Washington have mandated a portion of their utilities resources to meet load must come from carbon free generation. Majority of the wind development is in BPA’s BA (Lower Columbia region). This is a supply demand for renewable resources.

III. Transmission/Generation: BPA has integrated over 1,500 mw of wind power. During the last few years, BPA have built five new substations and tap lines. BPA will continue to invest in transmission to integrate renewable resources. Also federal hydro have supplied reserves to back-up and support wind generation while maintaining system reliability.

However, wind development is moving so quickly that it’s out pacing BPA’s ability to integrate this resource with the Federal hydro-system (1,500 mw wind is about 15% of our 10,500 mw peak load). We are experiencing large ramping events – several hundred megawatts of unscheduled changes in wind output occurring within an hour!

Wind power requires generation inputs (reserves) to maintain balance between scheduled output and actual generation. BPA must increase or decrease it’s generation in like amounts immediately to maintain the constant balance of generation and load to keep the transmission system stable.

The hydro system’s limits are being reached. Excessive wind generation imbalance is beginning to impose real consequences on power system operation that could affect both system reliability and protection of Columbia and Snake River salmon listed under the Endangered Species Act.

IV. Wind Integration challenge: reliability and cost
BPA is working aggressively with the wind and utility communities to develop new wind forecasting tools and market mechanisms to better manage wind and other variable resources in the transmission grid.

Until these tools are sufficiently mature, BPA will have to rely on the federal hydropower system. For the last several weeks, BPA has worked intensively on a way to continue to add wind farms to its existing system without jeopardizing system reliability or fulfillment of its hydro operation requirements under the Endangered Species Act and Clean Water Act. We are sharing the resulting solutions with the wind and utility communities and interested parties.

Solutions: 1) Protocols will limit wind operation to stay within balancing reserves - shifts the responsibility for balancing for under-generation of wind to the transmission contract holder and its balancing authority (utility’s transmission control area) and to the wind power customers, 2) Interconnection Agreements that define the responsibilities of BPA and each generator that connects to BPA’s transmission system, 3) Balancing reserves (to back-up wind) will be forecast in rates. However, BPA cannot reduce hydro generation to compensate for wind over-generation if doing so would increase nitrogen saturation in the river above legal limits (Clean Water Act and ESA listed fish impact).

V. Summary

BPA will need additional power reserves, thus last November we sent out a Request for Information on potential sources (generation inputs and/or load interruption) to be used for load following and regulation capabilities. We received 18 responses that will be used to develop one or more pilot projects.

As mentioned earlier, BPA is working aggressively to help the industry develop new forecasting tools and market mechanisms to enable new supplies of integration services (system regulation, resource following, and generation imbalance – all in real time except the third point that is after the fact correction used in billing)

BPA is working with its customers, wind developers, regulators, and interested parties to find practical, equitable and viable ways to meet the technical requirements of integrating wind power in the NW.

Report by John Williams, Idaho Constituent Account Executive, BPA