Idaho Power is waging war on renewable energy. Is it winning?

One of the West's great old-school monopolies and its multi-pronged attack on wind and solar.

  • Idaho, minus wind turbines. (Photo illustration)

    HCN staff/Idaho Tourism
  • Wind entrepreneur Brian Jackson lost big when Idaho Power pulled the plug on wind projects.

    Brian Jackson
  • Clean energy advocate -- and Idaho Power shareholder -- Kiki Tidwell (shown heliskiing last winter). l

    Reggie Krist photo courtesy Kiki Tidwel
  • Darrel Anderson, Idaho Power president and chief financial officer.

    Kyle Green/Idaho Statesman
  • One of Idaho Power's 17 hydroelectric plants on the Snake River system.

    Idaho Tourism
  • Mike Williams of Idaho Power at the company's new Langley Gulch natural gas plant, which can generate up to 330 megawatts.

    Kyle Green/Idaho Statesman

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There's an old joke that Idaho is the only state named after a utility -- a nod to Idaho Power's reputation as a major powerbroker. The nearly 100-year-old company secured its station in the 1950s, when, after a struggle over whether Snake River hydropower should be developed by public or private interests, it got permission to build its three-dam Hells Canyon Complex. The complex generated more power than Idahoans used, so excess electricity was sold out of state, and Idaho Power promoted new farmland development at home -- irrigated with electric pumps. Today, the company provides over three-quarters of Idaho's power, and its 17 dams provide some of the nation's cheapest electricity.

Idaho Power has frequently fought to protect its water rights and keep reservoirs full. Its lawyers and lobbyists have allied with industrial pulp mills and irrigators with superior water rights to curtail newer water users, worked with lawmakers to broker compromises, and occasionally played hardball. In 1994, the company successfully lobbied the Legislature to affirm that the utility's hydropower water rights had priority over farmers wanting to replenish aquifers. Later, it tried to use that law to sue the state to stop diversions from the Snake River destined for aquifers. It also supports politicians and political organizations, primarily conservative ones. Last year, it gave its first-ever donation to the Idaho Freedom Foundation, the state chapter of the Tea Party, which generally opposes renewable energy mandates. And since 2004, Idaho Power has contributed $660,535 to federal and state campaigns, according to the National Institute for Money in State Politics.

That doesn't mean it always gets what it wants. PURPA, in particular, has been a persistent thorn in its side. Before wind developers appeared, irrigators fought the company and won, forcing it to buy power from small irrigation-company dams, which offset farmers' electricity costs.

But renewable energy developers lack the political clout of farmers, and their act in this drama has played out differently. Between 2006 and 2010, Idaho Power took on 577 megawatts of wind power because PURPA obligated it to; wind now represents about 8 percent of its power capacity. When Jackson signed the Rainbow Ranch contract, Idaho Power anticipated adding 300 megawatts more.

These deals were a boon to wind developers, but not to Idaho Power. The rate utilities have to pay for power under PURPA is based on "avoided cost" -- what it would cost Idaho Power to generate the same amount by building its own natural gas plant. The utility passes those costs onto customers, but doesn't profit. Sometimes, it loses money. If wind turbines kick out juice in the middle of the night, when there's no demand for power, Idaho Power tries to sell it on the open market. But if prices are lower than the rate set under PURPA, it does so at a loss, which is eventually passed onto ratepayers.

As PURPA contracts piled up, Idaho Power complained that wind developers were abusing the law by carving large projects into 10-average megawatt slices so they'd qualify. But mostly it argued that wind was too expensive. "The costs to our customers are staggering," says Dan Minor, Idaho Power's chief operating officer. "We felt we needed to call a timeout on PURPA."

Wind has raised electric bills in Idaho, but whether the increase has been staggering is a matter of perspective. Last year, Idaho Power paid $67.9 million for PURPA-contracted wind. Its residential customers pay an average of $93 a month for electricity. About $7.20 of that covers the added expense of wind.

Still, in 2010, at the request of Idaho Power and the state's other major utilities, PacifiCorp and Avista, the Idaho Public Utilities Commission limited guaranteed PURPA contracts for solar and wind to projects under 100 kilowatts. (The change doesn't apply to other renewable energy, like the methane digesters used on dairy farms to convert manure into power.) Wind development skidded to a halt.

It was Idaho Power's opening salvo in a war on wind -- and, to a lesser extent, solar. Recently, the company supported a narrowly defeated bill that would have put a two-year moratorium on wind development. Earlier, in 2011, the utilities successfully lobbied the Legislature not to renew the sales tax exemption on energy equipment -- a key financing tool for wind developers. And that April, in a direct-mail campaign and ads on conservative websites like The Drudge Report and Fox News, Idaho Power called wind expensive, unnecessary and unreliable. In most other states, this kind of public bashing of clean energy would have drawn the ire of the governor and legislature. Here, it didn't.

The three-member Public Utilities Commission -- which doesn't make policy, but interprets state law -- has occasionally pushed back. During periods of strong wind and low energy demand, Idaho Power would shut off wind farms, claiming it was cheaper to run only its coal and natural gas plants. The PUC and the feds stopped that earlier this year. And this July, the PUC struck down Idaho Power's request to limit the amount of residential solar generation on its system.

Idaho Power says it's not ideologically opposed to renewable energy: "We don't think wind is the right resource for our customers today," Darrel Anderson, the company's president and chief financial officer, says. Anderson says Idaho Power's position reflects its customers' beliefs, noting low participation in the company's green-power programs and outside polls indicating that Idahoans are skeptical about climate change and unwilling to pay extra for renewable energy.

"We have an obligation to our customers to provide reliable and low-cost power. Wind does not fit those characteristics," Anderson says. "It's really a minority in the state that have taken exception to what we've done."

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