State By State Proposals - Idaho

Idaho’s Electricity Future

State Snapshot

Idaho’s power landscape is dominated by Idaho Power Company. Investor-owned utilities (Avista, Utah Power & Light/PacifiCorp and Idaho Power) serve nearly 90 percent of Idaho’s electric load, and Idaho Power claims fully three-fifths of that service. Idaho Power’s resource mix is dominated by the energy from 17 hydroelectric dams on the Snake River and its tributaries.


Both Idaho Power and Avista collect modest dedicated funds from ratepayers for investments in energy efficiency. These investments mark a return to energy efficiency for Idaho Power, which systematically phased out most of its efficiency programs in the 1990s. With Boise and Coeur d’Alene growing as quickly as any areas in the region, Idaho consumers need an influx of low-cost power; energy efficiency can provide that, in spades. Ensuring that efficiency programs capture all available cost-effective energy savings is a central tenet of the Citizens Energy Plan. 

Idaho’s Public Utilities Commission has voiced increased support for clean energy of late but still approved utility integrated resource plans that failed to recognize the full value of efficiency and increased renewable energy investment. For example, Idaho Power’s 2002 Integrated Resource Plan ignores the 590 aMW of biomass and more than 300 aMW of wind energy potential identified in the Tellus Institute study.  Idaho Power’s draft 2004 IRP appears to more accurately reflect the risks and benefits from fossil fuels and renewables, respectively. 

Some state legislators have expressed interest in a renewable portfolio standard and other incentives for renewable energy development. In 2002, the legislature adopted a statewide commercial and residential building energy code.  Bills giving investment and production tax incentives for development of renewable energy generation passed the legislature in 2004, but were vetoed by Governor Kempthorn as too expensive. The agricultural community’s growing interest in renewable energy development could bolster the legislature again next year while also providing pressure on the Governor to support renewables as an economic development tool for the rural economy.

In the past year, Idaho began to acknowledge the real economic benefits of clean energy development. Turning these baby steps into tangible investments is the primary goal of the Citizens Energy Plan.  Opportunities exist in Idaho to secure incentives for renewable energy projects, further improve integrated resource planning analysis, and promote increased utility commitments to energy efficiency and low-income weatherization. The Citizens Energy Plan also recommends establishing a renewable portfolio standard and minimum level of low-income energy assistance, and requiring utilities to disclose their resource mixes.

Idaho citizens who see the benefits of the Citizens Energy Plan to their economy and their environment are the necessary force to deliver on the Plan’s opportunities.

Priority Opportunities

Incentives for Renewable Energy Development – Support renewable energy development through incentives for distributed and large-scale renewable energy projects. Incentives include tax credits/exemptions, net metering and supportive siting policies. Establish goals for state government electric load to be met with renewable power. Improve and expand net metering programs.

Reinvigorate Integrated Resource Planning – Heighten the importance of utility biennial integrated resource planning to ensure that the least-cost resource portfolio is developed. Support appropriate corporate incentives and structures that remove barriers to energy efficiency investments.

Capture all Cost-Effective Energy Efficiency – As appropriate, increase investor-owned and large public utility commitments to efficiency investments to fully capture the savings potential. Increase tax incentive for investments in energy efficient equipment, tier incentives to reward greater efficiency.

Establish Clean Energy Portfolio Standard – Establish a statewide standard for utilities to meet a percent of their loads with renewables and energy efficiency resources.

Improve Low Income Energy Services - Revise utility weatherization programs to incorporate current state-of-the-art practices and comprehensive delivery approaches. Adopt a standard for a statewide affordable energy payment level as a percent of annual income to reduce the energy bill burden on limited income customers. Establish statewide or utility specific requirements so that every eligible customer has access to energy assistance in some form.

Collect Data on Utility Arrearages and Service Terminations for Non-Payment – Encourage utility regulators and governing boards to track residential customer statistics from electric and natural gas utilities.

Adopt Utility Supply Mix Disclosure - Establish statewide disclosure requirement for all utilities to provide customers with information about resource supply and environmental impacts.

 

Policies to Deliver Idaho’s Electricity Goals

Incentives for Renewable Energy Development
Current Status: Idaho's state energy loan program offers up to $100,000 (depending on the sector) at 4% interest for five years for commercial and residential installations. Tax deductions are available for clean energy investments. Idaho Power, Avista and a couple of public utilities offer net metering for systems 25 kilowatts or less (100 kilowatts or less under Idaho Power tariff and PacifiCorp proposal). No statewide law.
Recommendations: Upgrade loan amounts and loan guarantees to support larger project specific bond sales. Create business energy tax credits up to 35% of project costs on projects up to $10 million. Exempt purchases of clean energy generators and equipment from sales tax. Adopt production and investment tax incentives for qualifying renewable energy projects.

Encourage state and local siting and zoning policies to facilitate development of appropriately sited renewable energy projects.

Public Utilities Commission should expand and improve billing and interconnection methods for each utility.

Adopt a statewide standard for all utilities that allows net metering for residential and small commercial systems up to 25 kilowatts and up to 250 kilowatts for agricultural applications.

Reinvigorate Integrated Resource Planning
Current Status: Biennial integrated resource plans are supposed to be filed by each investor-owned utility. Public utilities have no specific IRP obligation.
Recommendation: Short-term, increase advocacy during IRP development and review processes and ensure utility resource acquisitions are consistent with IRPs. Long-term, petition PUC to establish agency rules to guide IRP processes and resource acquisition.

Capture all Cost-Effective Energy Efficiency
Current Status: Idaho Power has a tariff rider to collect 0.5% of retail revenues for demand side management programs. In addition, Idaho Power makes a contribution to the Northwest Energy Efficiency Alliance (NEEA). Avista Utilities has a tariff rider to collect 1.95% of retail revenues for local demand side management and NEEA. PacifiCorp has no dedicated funding mechanism in Idaho. Public utilities purchasing from BPA may be participating in the Conservation and Renewable Energy Discount. Idaho's state energy loan program offers up to $100,000 (depending on the sector) at 4% interest for five years for energy efficiency investments by individuals, businesses, non-profits, schools and local governments.
Recommendations: Create a level playing field among all utilities in the state such that investment levels are equivalent and sufficient to capture all cost effective resources, either through individual tariffs or legislative standard.

Adopt a business tax credit that allows businesses a credit for 35%- 50% of project costs for measures beyond code. Adopt a residential tax credit for energy efficient appliances and equipment that go beyond code and standards up to $1,000 per year. All credits and benefits should be tiered to encourage consumers to utilize the most energy efficient design practices and technologies.
 

Establish Clean Energy Portfolio Standard
Current Status: Idaho has no statewide program to systematically encourage the development of new clean energy resources.
Recommendation: Establish a performance standard for electric utilities to ensure the development of new renewable and efficiency resources. Given the level of energy savings and non-hydro renewable resources in the supply mix currently, an appropriate goal would be to meet 15% of their load with clean resources by 2023.

Improve Low Income Energy Services
Current Status: All Idaho utilities offer weatherization services to low income customers. Some programs have upgraded measures and practices, and delivery mechanisms. Many have not. There are NO utility funded bill assistance programs. State law prohibits differential rates within a particular rate class. Therefore there are no utility rate discounts for low-income customers.
Recommendations: Work with the Public Utilities Commission to allow utility programs to increase funding and incorporate current state-of-the-art practices and comprehensive delivery approaches. These include use of base load efficiency and indoor air quality measures, adoption of best practices where practical, link to distributed renewables when appropriate, and use of new diagnostic tools and payment of 100% of administrative costs.

Establish a statewide requirement to offer some form of energy assistance to eligible customers.  Work with individual investor-owned utilities and the PUC to establish energy assistance programs similar to ones offered in Washington and Oregon.

Collect Data on Utility Arrearages and Service Terminations for Non-Payment
Current Status: Few utilities collect detailed information in one place on a regular basis on the cost and impact of utility arrearages and disconnections. 
Recommendation: State regulators and public utility governing boards should gather information on an annual basis from electric and natural gas utilities on key residential customer statistics that relate to monthly energy assistance customers, disconnections, and past due accounts, among other items.

Adopt Utility Supply Mix Disclosure
Current Status: No disclosure requirement of any kind.
Recommendation: Establish a disclosure requirement for utilities to provide customers with information about the mix and environmental impacts of resources that produce each utility’s electricity.