December Idaho Energy Update from Snake River Alliance

The Idaho Energy Update is a periodic summary of Idaho energy and climate issues from Coalition member Snake River Alliance. It features updates from the Legislature and state agencies, Idaho’s utilities and regulators, and topical clean energy developments in Idaho and the Northwest – all designed to help you follow and participate in Idaho energy issues.

All Energy Updates are archived and available for viewing on SRA’s website.

Idaho Energy Update | Dec 3, 2013

The Idaho PUC declined to sign off on Idaho Power’s application to pre-approve spending $130 million for antipollution upgrades at its Wyoming coal plant. While the PUC granted Idaho Power’s bid for a certificate attesting to the merits of the investments, it did not agree with Idaho Power that the risks for those investments should be moved from the company to its customers – a big victory for clean energy advocates who oppose ongoing investments in coal-fired generation. In other news, Advocates for the West has appointed long-time conservation activist Wendy Wilson as its new executive director. Seattle City Light is looking for a utility to swap its 100 megawatts of Lucky Peak hydropower output for a winter peaking resource that better meets its needs. And the National Renewable Energy Laboratory has issued its fact-loaded 2012 Renewable Energy Data Book. And we look at some coming events and meetings in the weeks ahead. Thanks as always, and if you have any calendar items, please send them along!

Ken Miller
Clean Energy Program Director
Snake River Alliance
(208) 344-9161
km*****@sn****************.org
www.snakeriveralliance.org

I: PUC Declines to Give Idaho Power Guarantee to Recover Coal Plant Investment

The Idaho Public Utilities Commission this week granted Idaho Power’s request for a “certificate of public convenience and necessity” (CPCN) showing the PUC agrees that a coal plant investment is probably needed – but the Commission then denied Idaho Power’s bid for a guarantee that it can recover all of the costs from customers regardless of how the coal plant upgrade project turns out.

Idaho Power wants to invest $130 million in ratepayer dollars into the Wyoming Jim Bridger coal plant, which Idaho Power co-owns with majority partner PacifiCorp. When utilities make large capital investments, usually for new power plants or transmission lines, they often seek a CPCN from the PUC as a sign the Commission generally approves of the investment, even if the CPCN does not guarantee the utility will recoup all of its investment. In this case, Idaho Power proposes to add “selective catalytic reduction” controls at two of Jim Bridger’s four units to ensure they comply with federal regional haze requirements that will take effect in 2015 and 2016 in order to reduce nitrogen oxide emissions. However, Idaho Power also sought a “binding ratemaking treatment,” or what amounted to a shift in risk of the investment from the company and its shareholders to customers, and that’s where the PUC drew the line, mostly because the uncertainty over future environmental regulations on coal plants raises questions about how long coal plants can continue to operate.

“We acknowledge the public’s concerns about unnecessarily extending the life of the Bridger coal plant,” commissioners wrote in their order. “ The detrimental effects of long-term coal use on human health, the climate, wildlife, land, and water are well-documented.” The Commission added that, “We recognize that the future of coal-fired generation in the United States is uncertain at best. We admonish the company to stay abreast of potential future environmental regulations that could negatively impact its investment in the Bridger upgrade.”

The Snake River Alliance, which engaged legal counsel in this case for the first time in its long history of participating in utility cases at the PUC, was joined in opposing all or parts of Idaho Power’s application by the Idaho Conservation League and the Industrial Customers of Idaho Power. The Alliance challenged Idaho Power’s recent coal plant analysis, which was designed to determine whether it would be better to invest in coal plant upgrades, replace one or more of the coal units with a natural gas plant, or switch the plants’ fuel from coal to gas. The Alliance argued that Idaho Power failed to adequately consider the possibility of replacing the coal with other alternatives such as energy conservation and renewable energy, or more likely a combination of those, as other utilities are already doing. But the heart of the Alliance’s case in its testimony and legal brief was that these investments not only pose undue risks to customers, but that they also represent only the “tip of the iceberg” given that Idaho Power acknowledges many more expensive compliance upgrades will be needed in coming years to keep the plants operating legally.

While the Commission agreed with Idaho Power that such suitable clean alternatives are either to expensive or not reliable enough to replace coal plants, the Alliance’s position was that the plants should not be shut down immediately – but that Idaho Power must begin planning for their eventual retirement before they reach the end of their expected operating lives. The Obama administration is developing rules to reduce greenhouse gas emissions from existing coal plants by next June with an eye to approving the rules a year later.

Idaho Power and other partner utilities are already planning an early shutdown of the Boardman coal plant in Oregon, and the Centralia coal plant in Washington is likewise set for early retirement as utilities pursue other, low-emission energy resources so the Pacific Northwest can reach its greenhouse gas reduction targets. Outside of our region, utilities nationwide, including many that burn far more coal than Idaho Power, are also planning to decommission their coal plants early in the face of coming environmental regulations that may make the plants uneconomic to run or incapable of operating legally. Also, none of the anti-pollution controls considered by Idaho Power and other utilities can address emissions of climate-changing carbon dioxide, since that technology has not been developed for utility power plants, and carbon dioxide emissions are exactly what the Obama administration plans to regulate.

“All parties, including Idaho Power, acknowledge that the future of coal is uncertain,” the PUC said. “Additional future environmental regulations are likely.”

And then this: “Because of the uncertain future of coal-fired generation, we find it unreasonable to prematurely commit ratepayer dollars to support Idaho Power’s investment.” It’s not to say customers will never pay some or all of this $130 million. Rather, the PUC intends to wait until after the retrofits are complete and operating before it reviews the prudency of the investment to decide whether the costs will be passed on to ratepayers.
The PUC order was a victory for energy advocates who oppose Idaho Power’s ongoing investments in its coal plants in order to keep them in compliance with ever-tighter health and environment regulations. The PUC order noted that more than 200 public comments were submitted in this case, and almost all of them opposed Idaho Power’s application while also supporting clean energy alternatives to burning coal. In addition, the Commission noted that more than 110 people packed the PUC hearing room on Nov. 25, and that none of the 26 who testified at that public hearing supported Idaho Power.

In unsuccessfully seeking the “binding ratemaking treatment” that would have committed customers to paying for the investment regardless of whether it turns out to be appropriate, Idaho Power claimed that the changing “political and social environment” could make coal generation impractical as the nation continues to turn its back on coal. The Alliance and other intervening parties countered that the likelihood of stiff health and environmental regulations is no reason for saddling utility customers with such a high-risk investment, but instead was reason to negotiate a withdrawal from Idaho Power’s coal obligations.

The Commission acknowledged future events might render the investments and the plants themselves of little value even before the installation is complete: “It is not inconceivable that, during the installation of the SCRs, a tipping point could be reached making them uneconomic.”

The Alliance also notes that Idahoans have twice overwhelmingly rejected the construction of coal plants in the state – in 1974 and again in 2006 – due to cost and environmental concerns. Despite opposition to coal plants in Idaho, the utilities serving customers instead turned to power plants in other states, regardless of the widespread health and environmental impacts imposed by those plants.

To review Idaho Power’s application, the PUC order, testimony, public comments and other documents this case, go to the PUC’s website at www.puc.idaho.gov and click “utilities” and “electric” and “open cases” and scroll to IPC-E-13-16.

II: Wendy Wilson is New Executive Director at Advocates for the West

Advocates for the West, the Boise-based public interest environmental law firm, announced the appointment of Wendy Wilson as its incoming executive director, replacing longtime director and founder Laird Lucas, who remains with Advocates and assumes a new role as Litigation Supervisor.

“Wilson has an extensive background as a conservation leader in Idaho and the West,” Advocates said in a news release. “She was the founding director of Idaho Rivers United, a statewide advocacy organization, leaving that position in 1999. Since then she has led national training and development programs for River Network, a Portland-based nonprofit, supporting water protection organizations and focusing on climate and energy.”

“There is nothing more important than protecting our public lands and wildlife,” Wilson said. “I am a long-time supporter of Advocates for the West and their free litigation services for conservation groups addressing so many issues. They need this voice at the table to have a fair shot against polluters and agency foot-dragging.”

III: Seattle City Light Looks to Exchange Lucky Peak Power

Seattle City Light, considered one of the greenest electric utilities in the Northwest if not the nation, is looking to exchange its 101 megawatts of summer peaking power from the Lucky Peak Hydro Electric project near Boise for power that better meets its winter peaking needs when customer demand is highest.

Such a deal may be a good fit for the likes of Idaho Power, which will have a need for summer “peaking” power to meet its high summertime demand, while utilities west of the Cascades often have peak needs during the winter. It’s one reason utilities on the east side of the Northwest can send surplus power to west side utilities in the winter, while the flow of surplus power is reversed in the summer to satisfy high energy demands in Idaho and elsewhere.

City Light has a request for proposals to see if another utility or power marketer is interested in such an exchange in a way that will benefit both parties. Most of Lucky Peak’s power is generated in spring or summer, making it more valuable here in Idaho than in markets that often don’t need it.

“Other utilities have a greater need for summer power,” City Light Power Management Director Wayne Morter said. “This exchange would provide us with more power when our customers have the greatest need.”

City Light is the first utility in the nation to achieve “greenhouse gas neutral” status. A city-owned utility, it serves about 1 million Seattle area residents.

IV: NREL Releases 2012 Renewable Energy Data Book

The Department of Energy’s National Renewable Energy Laboratory has released its popular annual Renewable Energy Data Book, a volume chock-full of all kinds of renewable energy information.

“The 2012 Renewable Energy Data Book is filled with information-packed charts and graphics, which allows users, from analysts to policymakers, to quickly understand and summarize trends in renewable energy – both on a U.S. and global scale,” NREL Energy Analyst Rachel Gelman said in news release accompanying release of the book, which can also be accessed online.

Among the 2012 statistics is a finding that wind energy and solar photovoltaics were two of the fastest growing electric generation technologies in the United States. Wind’s cumulative installed energy capacity grew 28 percent from the prior year; solar PV grew more than 83 percent. Renewable energy’s share of the overall U.S. electric generation continued to grow, representing more than 21 percent of total electric generation in 2012.

The book also shows how Idaho stacks up with other states with its installed renewable energy capacity, with the overwhelming percentage of Idaho’s renewable energy coming from hydropower.

You can download from NREL’s home page at www.nrel.gov.

On the Agenda: Here’s a look at some upcoming energy-related events and meetings in Idaho and the Pacific Northwest:

► UPDATE: The LINE Commission meeting, originally scheduled for December 5, has been canceled. If/When a new meeting is scheduled we will update the SRA event calendar on our website.

► The Sustainable Energy, Sustainable Homes seminar series resumes Dec. 12 with a meeting from 7 p.m. to 9 p.m. at the Integrated Design Lab at 306 S. 6th Street in Boise. The cost is $10 per seminar or $50 for the series, and Snake River Alliance members receive a 50 percent discount. The Dec. 12 session will feature a “Question & Answer Builders Panel: Building Science and the Well-Built Home.” Future sessions are scheduled for Jan. 9, Feb. 13, March 13, and April 10. For more information, contact Josh Bogle at jo**@go***********.com or visit www.goodhomesboise.com

► The Idaho Public Utilities Commission will hold its next regular “decision meetings” on Dec. 9, 16, 23, and 30. Meetings normally begin at 1:30 p.m., and agendas are usually posted the day before on the Commission’s website at www.puc.idaho.gov.