County

Boise Attorney Opposed To Dynamis Deal

Boise attorney Jon Steele has released comments critical of the proposed Ada County “waste to energy” currently before the Idaho Public Utilities Commission.

Steele, in a press release was critical of the proposed rate schedule between Idaho Power and Dynamis Energy, the outfit that already has $2 million from Ada taxpayers for the project.

PRESS RELEASE
Backdoor Politics: The Ada County Commissioners and Dynamis Energy, LLC

Why would Idaho Power agree to pay Dynamis Energy far more than any other alternative energy provider?

The Idaho Public Utilities Commission has been asked to approve a “deal” between Dynamis Energy, LLC and Idaho Power Company that will require Idaho Power to pay Dynamis more than twice the going rate for electricity. The Dynamis electricity is planned to be generated at a proposed trash-to-energy Project located at the Ada County landfill.

While the public spotlight is now focused upon Idaho Power and the Idaho Public Utilities Commissioners, this boondoggle originated with the Ada County Commissioners.

Although Idaho Power has made the application to the Idaho Public Utilities Commission for approval of the Dynamis “deal,” a close reading of the Idaho Power papers discloses a less than enthusiastic endorsement. The garbage to energy concept sounds green and clean and may even be technically feasible, but it will be expensive for Idahoans, who have enjoyed the cheapest electric rates in the United States.

In June of 2010 the Ada County Commissioners agreed to pay Dynamis almost 2 million dollars for the design of a trash-to-energy Project to be built at the Ada County landfill. The primary benefit to Ada County is the possibility of extending the useful life of the landfill because the Project will incinerate garbage rather than bury it.

However, unlike many communities, Ada County has a landfill that will provide solid waste disposal for roughly 70 to 100 years – the Hidden Hollow Landfill off of Hill Road. In 2007 Ada County opened a new landfill section, the North Ravine Cell, located on 2700 acres of County-owned property. The North Ravine Cell is the replacement landfill for the nearly full Hidden Hollow Landfill.

In 2005, Ada County contracted with Fortistar Energy to burn the natural byproduct at the Hidden Hollow Landfill – gas – which is used as fuel to generate electricity. Fortistar can generate roughly 3.2 mega-watts of electricity – enough to power about 2,400 homes. In 2010 Fortistar paid Ada County $260,786 for gas produced by rotting garbage which was converted to electricity and sold to Idaho Power. Yet, the rate paid to Fortistar by Idaho Power is substantially lower than the rate to be paid Dynamis.

Dynamis, according to its website, is composed of “…a group of highly committed professionals that are dedicated to clean renewable energy through waste recovery systems.” If their website is to be believed, Dynamis is “…your best source for value-driven, environmentally sound, global turnkey waste to energy services.” Dynamis owns “…state-of-the-art proprietary waste-to-energy technology.” Their “…patented process reduces reliance on fossil fuels, decreases harmful emissions and provides numerous immeasurable long-term benefits, clearing a new path toward a sustainable and cleaner world.” Who can argue with that?

In June of 2010 Ada County Commissioners Fred Tillman, Sharon M. Ullman, and Rick Yzaguirre took it upon themselves to sign a contract with Dynamis which says that Dynamis will design “… a 250 ton per day waste to energy facility…” referred to as the Project. The Dynamis website states that … “[o]ne of our 250 ton per day plants produces on average 15 megawatts, which means in theory we can provide power for 14,000 homes.”

Between July 15 and December 17, 2011, Ada County paid Dynamis almost 2 million dollars. These payments were for the design of the Project. None of these payments purchased any material or labor or permits that will be required to build the Project.

The Dynamis contract does not guarantee that the waste to energy Project will work or even that the waste to energy Project will probably work. Rather, the contract states that the almost 2 million dollar Project design is based upon “experimental technologies” and that after review of the Project design Ada County “…may not want to proceed.”

On November 1, 2011 the Ada County Commissioners entered into a second agreement with Dynamis. This time, however, Commissioner Vern Bisterfeldt refused to go along, but majority ruled. This agreement allows Dynamis to finance the Project, build it, own it, and operate a 54,400 square foot plant costing $60,000,000 on County land for $1 a year. The County will deliver 408 tons of waste daily to Dynamis at no charge. Dynamis will convert the trash to electricity which it plans to sell to Idaho Power, which brings us back to the Idaho Power application before the Idaho Public Utilities Commission.

Energy law requires Idaho Power to contract with Dynamis, but not at an inflated price which will ultimately be paid by Idaho Power customers. This “deal” favors Dynamis over Idaho Power customers. While science and technology make the Dynamis project possible, science and technology have not made the Dynamis project economically feasible.

The Ada County Commissioners’ rush to contract with Dynamis left little time for any analysis. The driving forces behind the rush to contract were government payments, tax incentives about to expire, and cash.

Approval of this “deal” will open the flood gates. The Dynamis “deal” is based upon a franchise business model designed to be repeated over and over again with local governments who are lured into approval by the “clean and green” mantra and the possibility of economic growth.

Any opposition to the Idaho Power application before the Idaho Public Utilities Commission runs the risk of being labeled as anti-clean, anti-green, and anti-environment. But these are not the issues to be decided. The real issue is whether we saddle the next generation of Idahoans with obligations that are not economically feasible. The simple question is: Why would Idaho Power agree to pay Dynamis far more than any other alternative energy provider?

The Idaho Public Utilities Commission is taking comment on the Dynamis “deal” through February 2, 2012. Comments are accepted via e-mail by accessing the Commission’s homepage at www.puc.idaho.gov and clicking on “Comments & Questions About a Case.” Fill in the case number (IPC-E-11-25) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762. Be sure to join the list of “Interested Parties.”

The public’s only opportunity to express views on the Dynamis “deal” is to submit comments before February 2. As of today, there will be no public hearing for you to attend. Our Public Utility Commissioners will read and respect your comments, but only if you beat the February 2 deadline.

The full text of the Commission’s order in this application, along with other documents related to this case, are available on the Commission’s Web site at www.puc.idaho.gov. Click on “File Room” and then on “Electric Cases” and scroll down to the above case number.

The Ada County Commissioners can be reached at (208) 287-7000.

Jon M. Steele
Runft & Steele Law Offices, PLLC
1020 W. Main St. Ste 400
Boise, Idaho 83702
(208) 333-9495

Comments & Discussion

Comments are closed for this post.

  1. Jeniss Nicole
    Jan 13, 2012, 5:30 pm

    Not sure how how much this would affect user rates though. According to the application, Idaho Power would only pay for the power they needed to supply their currently have a demand for. Either way, the county paid for at least the researching of the facility. This way, there’s someone that’s actually willing to put it to use so that research money wasn’t a wasted effort. I could easily see the wind generators will be quick to object to someone coming in on their turf.

  2. chicago sam
    Jan 14, 2012, 8:49 am

    I took a quick look at the IPUC website to see how much Idaho Power will pay this company. Contract says avg. of $92.35/megawatt hour. Today’s Statesman says Idaho Power will pay High Mesa Energy 56.43 per megawatt hour. Then I looked at my power bill and I am paying $66.257 per megawatt hour. Maybe Idaho Power is going to absorb the extra cost and take a lower return as a gesture of being a good corporate citizen. And $60 million for this plant. Sounds like something the Dept of Lands might be interested in for a long term investment. Breath deeply– they won’t have a smokestack for no reason and who are these guys and where have they built a plant that works. I think Idaho Power needs to answer some questions

  3. Rod in SR Boise
    Jan 14, 2012, 12:23 pm

    Both Idaho Power and the Ada County Commissioners need to answer some questions, not to mention the Idaho PUC.

  4. Rod in SR Boise
    Jan 14, 2012, 12:32 pm

    Thank you, Dave. Without you, we would never hear about some of this stuff.

  5. We are married to fossil fuels for the foreseeable future. Windmills knock all kinds of birds out of the sky and they can cause range and forest fires, ethanol is an expensive joke, Hydrogen cells aren’t on the radar and Nuclear scares people.

    Why has so much of the decision making been behind closed doors?

    The Ada Commissioners have rushed into this mess with eyes less than wide open.

    The Dynamis project scares me from the point they will be adding to the pollution loading in the valley when they start burning tires. Add to this the cost is not competitive.

  6. A few minutes of research shows Dynamis to be an unprofitable company for all but the execs in charge. They claim 15 years of proven technology. Of course a connection to Butch showed up. $2 million wasted so far. Let us get together and send a clear message to not only the IPUC but other agencies involved and personally to the Ada commissioners.

  7. Hubert Osborne
    Jan 18, 2012, 4:40 pm

    In a press release dated Jan. 13,2012 concerning Hoku mfg overdue bill with Idaho Power the commission directs Hoku and Idaho Power to renegotiate their contract for electricity. The origional contract specified Hoku pay 6.16/ kw hr for the first block of energy The second block was to be paid for at the traditional embedded cost rate for Idaho Powers large customers. Contract no doubt will lower amount paid by Hoku. How is this fair that Idaho Power will pay Dynamis 9.253/kwhr and resell to Hoku for less money. I don’t have to be an expert on sex to know when I am being screwed–same here

  8. Gene Fadness
    Jan 19, 2012, 7:08 pm

    Hello. This is Gene Fadness from the Idaho Public Utilities Commission. I appreciate all the comments here. I wouldn’t dare take a position for the commissioners who will ultimately decide this case. But there are some key facts about the pricing for this contract that are being missed here. One is that this is a levalized contract that stays at the $92.53 per MW over the life of the 20 years. So you need to project power supply cost over 20 years to come up with an apples-to-apples comparison of what ratepayers will pay over the life of the contract. Second, Dynamis is unique among all small-power projects in that it is committed to deliver 20 MW of non-intermittent energy solely during heavy load hours when prices of other generation at peak times may well — and will very likely — exceed the Dynamis price. The project has a peak-hour capacity factor of 92 percent, higher than almost any other baseload small-power source. Again, I am NOT saying the contract should be approved, but these factors should be considered in the debate. Watch for staff comments on this case to be filed, also by Feb. 2. You can view them on our Website at http://www.puc.idaho.gov

    EDITOR NOTE–A personal thanks for the clarification. We can provide the forum, but even for an old newsy it is difficult to explain second hand and better said by an expert.

  9. chicago sam
    Jan 22, 2012, 2:39 pm

    Gene
    Your comment about the committment to deliver 20 MW solely during heavy load hours raises the question==will plant shut down during light load hours?–not sure this makes sense. Starting and stopping large boilers could have some unintended consequences

  10. Gene Fadness
    Jan 24, 2012, 4:29 pm

    Sam,
    Please see paragraph 7 on pg 5 of the application on our Website: “Seller only plans to deliver energy during heavy load and holiday standard energy hours and does not intend to produce and deliver any light load energy to Idaho Power.”
    Gene Fadness

  11. Check the players and follow the money, Dynamis LLC filing:

    http://www.sos.idaho.gov/tiffpilot/tiffpilot.exe?FN=\\sosimg\corp$/%5C20100526%5CLLC_ORIG10146112650.tif

    Done deal.

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