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About that Renewable Energy

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About that Renewable Energy

George explains the importance of renewables to Idaho's energy customers, from a Seat in the House

During this last primary election, support of renewable electric energy resources, specifically wind power, was a major issue in our legislative district. Given this, I believe it is important to provide more substantive background into the pros and cons of encouraging the use of renewable electric energy resources to help meet Idaho’s future demand for electric energy.

I have discussed in past articles the adoption of the 2007 Idaho Energy Plan by the Idaho Legislature. In adopting the 2007 energy plan the legislature committed to updating the Idaho Energy Plan at a minimum of every five years and in this last session adopted a 2012 Energy Plan that met this requirement.

The major work in updating the plan was accomplished by the Legislative Interim Committee on Environment, Energy and Technology during the summer of 2011.

In updating the 2007 plan the Interim Committee worked in partnership with the Idaho Strategic Energy Alliance. The ISEA is comprised of nearly 200 volunteers from state, local and federal interests as well as profit and non-profit sectors, including representatives from the private electric utility companies.

In addition, the Interim Committee engaged in a thorough public process that provided substantial opportunity for input from stakeholders and members of the public to comment and submit revisions for the 2012 plan.

The 2012 Idaho Energy Plan was adopted by a 56 to 9 vote in the House and a 34 to 0 vote in the Senate and is recognized as a resource to be used by the legislature in adopting energy policy to meet the energy needs of Idaho businesses and citizens.

The recommendations of the Energy Plan were based on a frank assessment of Idaho’s energy strengths and weaknesses. Idaho’s existing energy resource base has resulted in some of the lowest electricity prices in the country, providing enormous benefit to all Idaho consumers. 

However, new energy resources are becoming increasingly costly, and Idaho’s position as an importer of more than 80 percent of our energy needs leaves Idaho consumers vulnerable to issues that are outside of our control.

Given this reality one of the more significant policy statements in the plan states that: “When acquiring resources Idaho and Idaho utilities should give priority to cost effective and prudent conservation, energy efficiency and demand response resources, and secondly, to renewable resources.

Note the words: “cost-effective”, meaning that when determining the use of a particular resource, the cost of that resource has to be competitive with other resources that are available. 

The Idaho Energy Plan is a document intended to be a guide and is not a requirement for utilities to follow in acquiring resources, unlike some of our neighboring states that have adopted a mandatory “Renewable Portfolio Standard.”

An RPS requires that electric utilities supply a minimum amount of customer load with electricity from renewable energy resources. States that have implemented an RPS include Washington, Oregon, Nevada, and Montana. 

Idaho utilities do have to abide by the federal Public Utility Regulatory Policies Act. PURPA, passed in 1978, requires that “regulated, natural monopoly electric utilities buy power from more efficient producers, if that cost was less than the utility’s own ‘avoided cost rate’ to the consumer.” The law was meant to encourage non-utility Independent Power Producers to develop environment-friendly, renewable energy projects and technologies.

The governing factor under PURPA is the use of the “avoided cost” terminology that lets a regulated electric utility avoid buying a renewable resource when the cost of that resource is greater than the cost of a more conventional electric generating resource such as a natural gas fueled electric generator.

Given these parameters, renewable resources can be instrumental in providing the most cost-effective electric supply mix to aid in providing the lowest costs for Idaho consumers.

Specifically, in the case of wind, wind generation, when priced right in recognition of the intermittent availability (non-firm) of wind and the costs of integrating the resource into the transmission system, can be a cost-effective and viable resource. 

Two specific examples of this involve purchases of wind energy by the Avista Company that serves northern Idaho and eastern Washington.

Avista has a current contract to purchase a 35 MegaWatt share of the 660 MW Stateline Wind Project located near Wall Walla, Washington at a rate paid by Avista, including a wind integration charge and other considerations, of 5.5 cents per KiloWatt hour.

The company also has a contract to purchase the entire output of the Palouse Wind project currently under construction near Oaksdale, Washington. The rate to Avista is about 5.5 cents per KWh in the first year. These rates are comparable to or less than what Avista is paying for its own gas fired generation. Additionally, because wind does not have a fuel cost, the cost of wind is not subject to increasing fuel costs, as is the case with natural gas fired generation which in most cases includes a fuel adjustment clause that allows the utility to increase its rate to its consumers if the cost of natural gas increases.

There are also other benefits of wind and other renewable resources including tax revenues, lease payments to land owners and use of endowment lands that provide public school monetary support that are also significant when considering development of renewable electric energy resources to serve Idaho consumers. These benefits need to be considered in our overall energy planning and development of electricity resources by Idaho electric utilities.

I believe that for several reasons our private utilities in Idaho are generally relying on natural gas as their electric resource of choice and this may not be in the best interest of Idaho ratepayers in terms of future electricity costs. Rather, as supported by our state energy plan, a diverse mix of electric generating resources based on cost-effectiveness on both a short-term and long-term basis, will serve the interests of Idaho ratepayers more effectively and at least-cost.

Thanks for reading and as always please contact me issues important to you. I can be reached by phone at 265-0123 and by mail at P.O. Box 112, Dover, Idaho 83825.

George

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Rep. George Eskridge Rep. George Eskridge the Republican Representative for District 1 in Idaho’s House, George Eskridge can be reached at 208-265-0123 or write PO Box 112, Dover, ID 83825

Tagged as:

wind power, renewable energy, A Seat in the House, Idaho Energy Plan

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