A forum of experts in turning “Waste To Watts” was assembled Tuesday by the IDAHO BUSINESS REVIEW and it completed the circuit for many not plugged into the energy circuit.
Idaho Power rep M. Mark Stokes, along with attorney Peter Richardson who reps small electricity producers selling power–like wind generated and landfill projects, really cut to the heart of why there is so much interest, legislation and litigation over energy.
It all boils down to Renewal Energy Credits (RECs) created out of thin air. They can be bought and sold on the open market. These credits cannot be put in a box, they don’t come off anyone’s tax bill, but they play into every major decision to build so-called alternative energy projects. Without the credits most projects are doomed to failure because the value of the power is less than the cost to produce it.
In a nutshell here is how it works: Back in the 1970s the U.S. government wanted to stimulate “alternative energy sources” to cut down on foreign oil dependence. With visions of small farmers using windmills to power their milking machines, congress required the utility companies to purchase the excess electricity from these small producers to reduce consumption of fossil fuels and help offset the farmer’s cost of construction.
The high voltage utility companies are simultaneously required to have a certain percentage of their power generated by renewable energy sources. Alternatively, they can buy RECS on the open market. The idea sounds noble enough. Clean alternative power, burn less fossil fuel and it is financed in part by RECS. The low watt producers have a guaranteed market and use the money from RECS as part of their funding formula–or profit.
Fast forward to 2012 and those little farmer-owned windmills have blossomed into thousands of acres of 200 foot towers owned by the likes of Shell Oil, British Petroleum, and General Electric. In Idaho alone there is enough wind power to supply the minimum needs of Idaho Power.
But unlike politicians and salesmen, the wind doesn’t blow all the time. Under terms of the monopoly, the utilities must have enough DEPENDABLE power to meet peak demand–but still purchase whatever RENEWABLE power is produced.
Which brings us to this new generation of generators who are flocking to the nation’s landfills cutting deals to use the Municipal Solid Waste (MSL) as fuel for electrical generators. Again, sounds great. Trash volume at the dump is reduced, reliable electricity is generated, and we all have plenty of juice for lights and air conditioning.
In Ada County the Commishes were so eager to plug into the idea they ponied up $2 million to Dynamis Energy for an “oxygen-deprived gasification” device that appears to be a glorified incinerator. It is said to create heat to boil water to turn a turbine to make electricity. Currently the company has no pending DEQ permit application and it was denied funding by the Idaho Energy Resource Authority because that outfit doesn’t fund the mandated purchase deals known as PURPAs.
The latest Dynamis news is a plan to double the amount of trash to be burned each day. That signals to some the original plan didn’t “pencil out” so they just increased the “projected” amounts. It jumped from about 200 tons to 400 tons of trash to be burned.
Meanwhile we hear rumblings from the city and others with regard to who actually “owns” the trash which has now become a “fuel stream” with value to the likes of Dynamis. One argument holds that since the city contracts with a firm to pick up the trash, it is the city’s. The county claims it’s theirs once it hits the landfill.
In some cities the generators actually pay for the trash or share in the profits generated by the generators. Ada was happy to just reduce the trash to ash in the case of Dynamis. The county actually is paid for the methane production by sharing in electricity revenues.
Now for the politics. Remember those RECs? In most recent deals Idaho Power has shared the RECs with the producer. They now have a bill before the Idaho Legislature to get ALL the money–a plan the little guys say will put them out of business. Idaho Power charges customers all the costs associated with the purchase of the PURPA power and claims sale of the RECs helps offset costs, hence it provides a saving to customers.
So as we complete the circuit, it isn’t about the ELECTRICITY generation. It’s about the MONEY to be generated by political influence and government mandated regulations.
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