Boise Guardian » Economy

County Amps Up The Voltage On Dynamis Deal

dave — Tue, 22 May 2012 20:34:09 +0000

When Ada Commishes Sharon Ullman and Rick Yzaguirre approved a last minute extension to the Dynamis “franchise agreement” at the landfill, they added “significant value” to the deal according to a GUARDIAN financial consultant. It appears the lease has jumped from 5 years to 30 years.

Additionally, the contract now allows Dynamis to bring in waste from other sources “with a higher BTU content.” That can include up to 6 tons of tires–something that has been rumored by opponents of the facility for the past few months.

Word on the street has it that Dynamis is unable to get financing for the so-called “waste to energy” project the Eagle firm has proposed to build. The firm has refused to provide any proof of financing, claiming it is privately owned. Ada Commishes paid Dynamis $2 million in public funds for design plans on a private commercial facility the county will never own, control, lease, or operate. Payment to Dynamis has been described by Dave Case, the Republican nominee who unseated Ullman in the primary, as “a loan any way you look at it.”

Until this morning Dynamis had little more than an idea to sell to potential investors and lenders. Now, they can claim they have a 30 year commitment from a government agency. Even if Dynamis never operates the proposed facility, it is possible they will be able to sell their franchise to another party, depending on how the contract is worded.
Our banker explained it as the difference between applying for a construction loan on an apartment building versus a loan on a building with 100% occupancy and 10 year leases.

We see this as a preemptive political maneuver to rush the deal through prior the pending appointment of a third commissioner to fill the seat vacated by Vern Bisterfeldt. Also, all the remaining candidates–both Dems and Repubs–have gone on record as opposing the Dynamis deal in its present form.

For what its worth, the GUARDIAN predicts Dave Case will be appointed as an Ada Commish by the end of the week. Even if he gets outvoted by Ullman and Yzaguirre, he will have the inside info hopefully he will make public that which has been under the radar of late.

See the STATESMAN version of events and click on the “RELATED CONTENT” box to get the entire contract.

Some Educated Thoughts To Consider

dave — Mon, 14 May 2012 21:12:13 +0000

Its an annual event this time of year: students graduate either high school or college, there are inspiring stories of old immigrants getting degrees, students overcoming emotional and financial hurdles, and of course politicos making commencement addresses to show they are “pro education.”

Just today we encountered a couple of youngsters (nearly everyone is a youngster to the GUARDIAN) mixing those foo-foo latte drinks at a local java joint who graduated from BSU “Magna Cum Laude.” Asked their plans for when they “grow up,” they both planned to go to grad school. A fellow barista is already working on a masters degree.

We also contacted a guy who left a flyer in the door that was NOT from a politician, so we read it. He wanted to do yard work. We gave him a call and caught him in the middle of a high school shop class where he is a senior about to graduate.

From a business standpoint (return on investment), the highschooler is much more “profitable” than the brilliant baristas. He has low overhead, little investment and can make upwards of $20 an hour.

The college grads have at least 4 years and perhaps $40,000 invested, are probably in debt to the government for student loans and have no job prospects on the horizon. This picture is common in the USA and something’s wrong with it.

This doesn’t mean we should be training landscape laborers, but it certainly offers food for thought regarding the value of a college degree, the “right” course of study, and the state of economics and education in America. Your educated thoughts please.

Ada County Buys Foreclosed Subdivision

dave — Thu, 10 May 2012 20:11:20 +0000

First it was the Idaho Land Board purchasing a private storage business, now Ada County Commishes bought a foreclosed subdivision on 250 acres north of Hidden Springs and east of Highway 55 for $240,000.

Known as Red Hawk Estates, the development fell on hard times and was foreclosed by Bank of The Cascades from Dry Creek Partners on January 19. As provided by Idaho code, the land was sold at a Sheriff’s Sale on Tuesday.

The Ada Commishes–Sharon Ullman and Rick Yzaguirre–rammed the deal through with a last minute change to the agenda and voted to place a bid. They met in executive session prior to authorizing the bid at the Sheriff’s Sale.

Efforts to get an explanation from various county staffers and officials regarding the motivation for the purchase have been futile. No one can tell us WHY the county purchased an undeveloped platted subdivision. There was only one other bidder at the auction. That party placed a bid of $230,000 on the barren foothills land.

The foreclosure and sale were properly advertised, but based on records and agendas posted at the Commish site, we can’t see any public discussion or consideration that would justify the sudden expenditure.

Boise To “Upgrade” Council Chambers For Only $1,300,000

dave — Mon, 07 May 2012 19:35:41 +0000

UPDATE Tuesdy 5/8/12–Councilors passed the expenditure on a 4-2 vote. Councilors TJ Thomson and Ben Quintana stood up against staff and four of their colleagues to cast the no votes. Thomson noted it was hard to justify the expense in the face of the current budget crunch. The GUARDIAN was asked by one wag if the council chambers would now have thrones.

Couched as a routine budget transfer of funds, the Boise City Council will be asked Tuesday to pony up $1.3 million of tax money for what amounts to a three room upgrade–the council chambers area. It will be an INCREASE to the code upgrade previously approved.

Like most things “on sale,” the upgrade will actually save $200,000. Right!

Here is how it is presented in the Council work agenda:

Public Works (Capital Fund) – City Hall Building 1, 3rd Floor Public Space Upgrades: $1,300,000 (one-time)
Public Works is requesting approval of a $1.3 million increase to the City Hall Code Upgrade capital project, funded by a transfer from the Capital Facilities Contingency. The additional funding will be used to improve the functionality and configuration of the public-use areas of Building 1, 3rd Floor, which have not received any significant enhancements since the building was constructed in the 1970s. Completing these enhancements now is advantageous because the 3rd floor is being significantly impacted by the current Code Upgrade project; the upgrade work can be incorporated into the overall project with minimal impact to the overall schedule. Postponing this work to a future date would result in a $200,000 increase to the overall project cost as well as increased inflationary costs. Improvements will be focused on the areas used by the public when participating in government activities, including the Council Chambers, lobby / reception area, Bonneville Room / City Council work space, as well as associated utility / storage areas. Staff has worked with the design team to develop a conceptual plan to resolve long- standing issues such as lobby noise / acoustics, limited flexibility, outdated audio-visual capabilities and inadequate Americans with Disabilities Act access.

The GUARDIAN reported in December that no local artist’s work made the final cut for inclusion in the new City Hall makeover.

Assets vs Liabilities In Banking, A lesson

dave — Thu, 03 May 2012 09:00:54 +0000

Boise’s SYRINGA BANK is in trouble and faces a merger or takeover from state and federal regulators because it’s capital level is less than 10% of its assets.

Terms used to describe banks are somewhat reverse of what we normally think. When we DEPOSIT funds in a bank–savings, checking, or CDs–the institution shows that as a LIABILITY because it is ultimately owed back to the customer.

LOANS to customers who ultimately owe payments to the banks are shown on the books as ASSETS. It is confusing to most folks because it seems logical that money in hand (deposits) would be assets and money loaned out would be a liability. The problem with banks loaning more than is being repaid draws down their cash reserves known as CAPITAL.

When regulators talk about “seizing assets,” it is normally about taking over loan contracts and either the money being repaid or the collateral–usually a house–that is security for the loan.

Dorothy Goes Down Yellow Brick Road To Credit Union

Thoughts From The Road

dave — Fri, 20 Apr 2012 04:53:47 +0000

The day job has the GUARDIAN on the road making photographs and observing the “American Condition.” We share some random observations.

–The new bridge across the Coloorado River below Hoover Dam is a great time saver if you are headed south of Las Vegas, but you can’t see it (or the dam) as you drive across. Thee is a parking lot and pedestrian access on the north end of the bridge.

–Arizona entrepreneurs have figured a way to sign up residents to buy solar panels for their rooftops. The the deals amount to obligations to purchase, but are to be repaid with the money earned by selling power back to the electric company that is forced to purchase the power. The real money is in the “Renewalable Energy Credits”–a mini version of the windmills lumped into thousands of invididual homeowners.

–Old semi-trailers are used along the freeways as billboards. Either to skirt a billboard law or just because they can be moved easily.
–Trucks outnumber cars by at least two to one on I-10 from Phoenix to El Paso, Texas.

–From El Paso to San Antonio you really have to WANT a speeding ticket…the speed limit is 80 mph. Some of the trucks actually go that fast, but the 585 miles stilll go slow, even at 80!

–Amazed at the number of people who choose not to watch news or read papers. A friend in boise gave up news for Lent and liked it so much he has adopted the practive permanently.

–Motorhome culture in Arizona provides lots of jobs. The big ones are everywhere–even with gas at $4 per gallon.

–Border Patrol seems to be everywhere. The inspection station at Sierra Blanca, Texas permanently blocks I-10 just like at a border crossing. Dogs sniff vehicles and the armed agents check everyone passing through…both reassuring and disconcerting.

Idaho Power Tells Commission Its “Over Powered”

dave — Tue, 20 Mar 2012 15:14:33 +0000

Idaho Power is seeking a suspension of the law which requires the utility to purchase power from small “renewable energy” producers. A hearing is set for Wednesday at the Idaho Public Utilities Commission headquarters 9:30 a.m. at 472 W. Washington St. in Boise.

Oversupply of wind power has been a major bone of contention recently due to high water levels in the Columbia Basin and less consumption than previously predicted. Here is the official version from a PUC press release:

The Idaho Public Utilities Commission will hear oral arguments Wednesday on an Idaho Power Company motion to temporarily suspend the utility’s federal PURPA obligation to enter into sales agreements with qualifying small-power producers.

Idaho Power claims the suspension is needed while the commission processes a case (GNR-E-11-03) that addresses how energy from the small projects, called Qualifying Facilities (QFs), should be priced. That case is ongoing with technical hearings scheduled for Aug. 7-9. In the meantime, Idaho Power argues, it may be forced under PURPA to enter into contracts with small-power producers for energy it claims it does not need at prices it claims are too high, unduly inflating customer rates.

Several groups, including Exergy Development Group of Idaho, JR Simplot Company, the Idaho Conservation League and the Snake River Alliance filed comments opposing the suspension. PacifiCorp, doing business as Rocky Mountain Power, supports the motion and asks that the requested suspension also include proposed sales agreements in its eastern Idaho territory.

Oral arguments are scheduled to begin at 9:30 a.m., March 21, in the commission’s room at 472 W. Washington St. in Boise.

The federal Public Utility Regulatory Policies Act (PURPA) requires regulated utilities to buy energy from qualifying small-power generators, such as hydro and wind projects. The rate utilities must pay QFs is called an “avoided cost rate,” and is based on the costs the utility avoids by not having to generate or buy the power itself.

The commission must act quickly, Idaho Power claims, because 27 QFs representing 595 megawatts of capacity are “seriously exploring” sales agreements with Idaho Power. These projects would be in addition to the existing 119 PURPA projects, representing 989 MW of nameplate capacity, already in place. “Without adequate interim relief from its duty to purchase output from QFs at those inaccurate avoided cost rates, Idaho Power’s customers are likely to suffer substantial harm,” Idaho Power stated. The cost of the energy generated by the projects is included in customer rates.

Exergy, a Boise-based wind developer, said Idaho Power’s motion should be denied. Exergy urges the commission to maintain the schedule now in place to process the avoided-cost rate case. Exergy claims Idaho Power failed to cite a federal statute granting the Idaho commission authority to impose a moratorium on Idaho Power’s PURPA obligations under federal law. “That is because no such authority exists,” Exergy claims.

Exergy states that granting the suspension would “in all likelihood destroy the economic viability” of all the projects expected to seek agreements this year. “The listed projects would, if all were built, add about 500 megawatts of new capacity on Idaho Power’s system. Why this is a bad thing is never explained, except for identifying the expense to ratepayers over the lives of these projects and an assertion that if Idaho Power gets its way, the new avoided cost rates will reduce that amount,” Exergy stated.

In an order issued today, the Commission said it wants the parties to the address the following issues during Wednesday’s oral argument:

1) Whether Idaho Power has established a prima facie case for emergency relief from its obligation to purchase QF power;

2) Whether the existing schedule in the GNR-E-11-03 case should be modified to expedite the proceedings and outcome; and

3) What action, if any, should be taken on Idaho Power’s motion for a stay.

In late 2010, the commission lowered the size of wind and solar projects that can qualify for the commission’s published avoided cost rate from 10 megawatts to 100 kilowatts. Wind and solar projects larger than 100 kW can negotiate an avoided-cost rate with the utility based on a commission-approved methodology.

Customers can track the progress of the case on the commission Website at www.puc.idaho.gov. Click on the electric icon, then on “Open Electric Cases,” and scroll down to Case No. GNR-E-11-03.

Trash Talk–Power, Politics, Economics, Ownership

dave — Wed, 07 Mar 2012 19:01:25 +0000

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.

City Staff Reduced, Management Seeks More Efficiency

dave — Wed, 07 Mar 2012 00:21:46 +0000

The GUARDIAN got a tip late last week claiming there were layoffs at City Gall.

We sent a query to Team Dave and spokesman Adam Park provided the following statement:

“In 2012 the City has laid off one employee and restructured one position following the retirement of another employee. Both of these actions were done to contain costs and ensure a balanced budget. These employees’ responsibilities have been reassigned; no city services have been cut as a result of their departure. As you are undoubtedly aware, layoffs are personnel matters and therefore the names of the parties are exempt from disclosure pursuant to Idaho’s public records laws. Department directors continue to explore ways to run their operations more efficiently, but no decision has been made on any additional layoffs.”

We have asked from which departments the two cuts were made.

If they cut staff that wasn’t needed, the GUARDIAN certainly applauds the move. Coppers previously avoided layoffs when they decided to forgo a contracted raise, but at this point it isn’t clear what departments–if any face additional cutbacks.

House Panel Votes To Keep State Out Of Commercial Ventures

dave — Thu, 01 Mar 2012 14:55:29 +0000

On a 15-1 vote The House Resources and Conservation Committee approved a measure Wednesday to prevent the state endowment fund from purchasing and running businesses.

This is a practice the GUARDIAN revealed in 2010 when the Dept. of Lands went into the private storage business with the purchase of Affordable Storage in Boise. With an 8% profit margin, officials claim it is the most profitable of their commercial real estate holdings. Other parcels are actually posting losses which we have noted in recent posts.

The IDAHO REPORTER covered the meeting and has complete report. It is unknown when the bill will get a floor vote and proceed to the senate if passed.

A history of GUARDIAN COVERAGE on this important issue.