County
Trash Talk–Power, Politics, Economics, Ownership
March 7, 2012 
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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Comments & Discussion
Comments are closed for this post.
Mar 7, 2012, 3:41 pm
I guess that’s my whole problem with a lot of this. I’ve realized for awhile that it’s all about money. Guilt trip all you want about from the wind generators that by not giving in to them you don’t care about the environment. I’ve heard it all. One of the bigger issues I see here that nobody seems to talk about, is that we’re also facing a problem with too much generation. Just from the wind generators alone, we’re producing WAY more power than we could ever hope to use. From that point of view, isn’t it all just a big waste of consumer money then? Why bring in more power generators when we’ve already got more than we can use?
EDITOR NOTE–We agree with you. The issue for the power companies is the “reliable source,” rather than the amount of electricity.
Mar 7, 2012, 5:34 pm
While Idaho Power may have all the power generation it needs, there are other locations that probably don’t. Thus, there is likely interest in the “excess” power if it can be purchased inexpensively and sold for a profit. (But again, as noted, money becomes the issue).
EDITOR NOTE–The rate is the “avoided cost” of what it would have cost idaho Power to generate the power. Any PURPA deals create RECs out of thin air that someone gets to sell. Rate payers at one end or the other have to pay for the PURPA projects. The RECS are negotiated.
Mar 8, 2012, 2:57 pm
Like most things for the “people” those with the gold make the rules.
We have an apathetic,complacent public who won’t take the time and effort to become knowledgeable about pocketbook issues on the local level but they whine and moan about the federal govt. Face it, we have no control over the federal govt. but on the local level our votes and opinions do matter. What’s missing is participation and paying attention to what is going on around all of us every day.
Waste and spend is not something unique to the federal govt. You scratch a little below the surface and the waste, fraud and abuses are everywhere on the local level.
Mar 8, 2012, 4:41 pm
In theory selling excess power to other States is a good way to get money into Idaho but the power is contracted for in most cases 20 years at a set rate and the value of the power in other placesoften does not cover this cost–so Idaho ratepayers must come up with the difference. Idaho Power and other Utilitys are required by federal law to purchase this electricity even if they don’t need it and they frequently don’t. And guess who will pay for the transmission lines
Mar 9, 2012, 1:11 pm
Has anyone noticed where you mail your payment too? Certainly isn’t in Idaho…..
Mar 9, 2012, 2:03 pm
Since I am an Idaho native. I remember when Idaho Power cried during dry spells to raise their rates and when the rivers ran high they sold excess power to the highest bidder. Now the City and County is fighting over our trash. Whoda thought. I say we just deposit our trash at the City-County building and save our cost in trash pick up.
Paul you are right gold buys politicians and pays for our right to go along to get along. I conclude with recycling help us. smile—wink.
Mar 9, 2012, 5:53 pm
Paul is absolutely spot on. Thanks Paul. Idacorp makes sure we pay all costs associated with power generation and energy conservation.
Mar 12, 2012, 2:17 pm
Hi Karen,
This is Gene Fadness from the Idaho Public Utilities Commission. Since 1992, there has been a Power Cost Adjustment process (PCA) that credits customers when high water results in lower than anticipated power supply expense and surcharges customers when low water results in higher than anticipated power supply expense. When Idaho Power has surplus power, you want them to sell, sell, sell after they have met their requirment to serve native load. Electrons (to date) cannot be stored. And 90 percent of what they make from surplus sales comes directly back to customers.