Powerful winds 

Idaho has the wind, but lacks the will to harness it for electricity

Armand Eckert had a dream: he wanted to build a wind farm on his family's 5,000-acre spread outside of Buhl. The 57-year-old farmer had always been interested in wind, and the additional money would help supplement his crop and irrigation costs. In early 2005, he began the arduous permit process required for starting a wind business. A few months later, just when things were starting to fall into place, the winds suddenly changed.

"In June, we sent in a Power Purchase Agreement with Idaho Power and an Interconnection Study Agreement along with a $10,000 deposit to Idaho Power to start the process. Three days later Idaho Power petitioned [the Public Utilities Commission] to stop all wind power development," he said.

Eckert's case is part of a trend of stymied wind development across the state. While renewables like wind appear in Idaho's Energy Plan, development has been slow. Since 2005, utilities have delayed incorporating wind while they study its reliability and costs. Transmission lines are already crowded, and more have to be added before significant amounts of new power can come online. And legislators have not installed renewable portfolio standards, which would force Idaho to develop wind but at a potentially greater cost.

"Bombarded with wind"

At the time Eckert sought his permits, Idaho Power, had its own problems. By 2005, the utility had received a "bombardment of applications for wind," according to Scott Gates, a renewable energy expert for the company. In June of that year, the utility petitioned the PUC for a temporary suspension of its obligation to purchase wind energy so it could study the impact of integrating wind into its power system. The PUC didn't grant a suspension, but it did reduce the number of watts new wind plants could produce, from an average of 10 megawatts per month down to just 100 kilowatts. The move squelched most new small projects, since independent developers like Eckert couldn't make a profit on so few generating watts.

"We were certainly very disappointed," Eckert said. "We have always been very, let's say, 'get in and get the work done' type of people."

Since 1978, public utilities like Idaho Power have been required to buy electricity from small projects like Eckert's that produce an average of 10 megawatts a month or less. Before the Public Utility Regulatory Policy Act, only utilities could own and operate electric generating plants.

Rich Rayhill, vice president of Ridgeline Energy, a large-scale wind developer with offices in Boise, likes PURPA projects because they force wind into the system.

"The beauty of having wind energy introduced through PURPA is it affords utilities that might otherwise be reluctant to incorporate wind the opportunity to become familiar with wind. They see how it works with their system and they tend to like it. Once they understand the benefits of wind, the utilities voluntarily choose to add more," he said.

The PURPA law doesn't affect Ridgeline's projects, which are too large to qualify. In 2007, Idaho Power contracted less than .5 percent of its power supply from a combination of PURPA wind projects and the Elkhorn Valley Wind Project in northeastern Oregon. This number is small because the 101-megawatt Elkhorn project didn't come online until late 2007, said Mark Stokes, manager of power supply planning with Idaho Power.

"This number will be substantially higher in 2008 because the Elkhorn project will have been operating all year and another 70 megawatts of PURPA wind is expected to come online yet this year," he said. Idaho Power currently has 90 PURPA contracts, 18 of which are wind farms. Only three of the 18 are currently operational.

Idaho Power concluded its study in early 2007, but more petitions to the PUC followed, requiring further study on transmission, integration and costs. These have generally resulted in higher start-up costs for small producers like Eckert. However, Idaho Power feels the studies will eventually translate into cheaper power for ratepayers, while still being fair to developers.

Political winds not keeping pace with actual wind

Though they don't qualify as PURPA projects, some large-scale developers also find it difficult to build wind farms in Idaho. It's not for lack of potential. Nationally, the state ranks 13th in wind generating potential with the capacity to capture about 15,000 megawatts of energy, according to Idaho National Laboratory data. But it is currently capitalizing on only about 75 of those megawatts. (One megawatt powers, on average, about 650 homes.) Other states that have less of the resource but more infrastructure and political backing are eclipsing Idaho. Oregon, for example, is closing in on 1,000 megawatts of wind energy electricity, with another 2,400 either approved or under construction. Oregon currently ranks seventh in the nation for wind generating capacity, but Oregon Department of Energy spokesman Lou Torres expects Oregon could jump to third place within a few years. Idaho currently ranks 21st.

The story isn't as simple as the numbers make it seem, said Gates. Many of Idaho's prime places aren't accessible to developers.

"A considerable amount of that resource is in the wilderness area, so there are no lines that will be built; there are no turbines that'll be put up in there," Gates said.

Legislators, developers and farmers all agree that transmission infrastructure is one of Idaho's biggest hurdles in integrating wind energy into the power supply.

"The key to all of the future resource development is going to be transmission," said Paul Kjellander, administrator for the state Office of Energy Resources and former president of the PUC.

Kjellander's office heads up Gov. C.L. "Butch" Otter's 25 x '25 Renewable Energy Council. "If you're looking at a wind resource that is 100 to 150 miles away from available transmission, and you look at high capacity transmission costing anywhere from $1.5 to $2.6 million per mile, you can see that some of those projects won't be in the money," he said.

But some believe transmission is a side issue compared to Idaho's apparent lack of political leadership. The 2007 Idaho Energy Plan, while renewables-friendly, is long on policy statements but short on specifics. While a few pieces of legislation have passed in recent years that encourage wind and other renewable energy development in the state, Idaho still lacks its own renewables portfolio standard, which would mandate that utilities buy certain amounts of renewable power by a certain date.

Sen. Curt McKenzie, co-chairman of the Energy, Environment and Technology Interim Committee, doesn't like the idea of instituting mandates.

"We're kind of trying to make a balance between costs of energy and continuing to develop alternative sources," he said. Kjellander agrees, saying that he believes it is better to blend old energy sources with the new in order to maintain the lowest costs possible for ratepayers.

Right now, that means using a combination of hydropower, coal and natural gas. According to a recent report commissioned by Climate Solutions, an Olympia, Wash.-based nonprofit that seeks solutions to global warming woes, Idaho spends $3.7 billion on energy each year, and 80 percent of the energy used is imported. Widely distributed among lawmakers, the report advises that Idaho bulk up its wind power development through policy, incentives and infrastructure upgrades, creating thousands of new jobs and stimulating local economies in the process.

Portfolio standards drive wind development

For now, other states are leaving Idaho in the dust. According to the Database of State Incentives for Renewables and Efficiencies, which is funded by the U.S. Department of Energy, all of the top 10 states for new wind energy development, including Oregon and Washington, have portfolio standards. Idaho does have a few incentives for developers. Developers can now lease state land for renewable energy development for 49 years and are taxed on actual generated income, rather than on the power plant's initial start-up and development costs.

"It's not taxed immediately up front, but it's an ongoing revenue source for the counties," McKenzie said. "It lets the wind developers not have a big hit at the beginning."

State incentives could prove more important than ever when federal incentives expire in December.

Large-scale developers like Rayhill would like to see a combination of better transmission and strong leadership from Idaho government.

"I think we should be looking at transmission upgrades, transmission development, and incentive programs like they have in place in Washington and Oregon," he said. "We have greater wind potential than they do, but they're smoking us on development. They're creating jobs where they're desperately needed; their farmers are doing better; their counties are doing better; and the folks that want green power in their state are doing better."

Ridgeline Energy is responsible for developing 65 of Idaho's current wind generating megawatts. This month, the company received permission to develop 450 megawatts of wind power in Bingham County, enough electricity to power between 270,000 and 360,000 homes.

Meanwhile the cost to build and maintain a wind farm keeps exploding. When Eckert planned his wind farm in 2005, the start-up costs were about $1 million per megawatt, which included site construction fees and materials. Today that price has more than doubled to about $2.5 million per megawatt. Gates says that's mainly due to the skyrocketing prices for concrete and steel, as well as the weakening dollar.

Neither Kjellander nor McKenzie could provide insight about what's in the pipeline for wind in the 2009 legislative session.

"[Wind] will be a part of the energy portfolio," Kjellander said. "How big a part? Well, we'll see."

Eckert is still dreaming of his wind farm. Earlier this year the PUC reversed the cap for PURPA projects back to 10 megawatts. Now that many of the Idaho Power petitions have been resolved, he's hoping for a 2009 start date.

"We'll get that farm up and running," he said, "come hell or high water."

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