Kate Darby

7 Steps to a Renewable Future in Idaho

In order to develop a plan for the implementation of renewable energy into Idaho’s current energy distribution, a paper by the Union of Concerned Scientists was used as a model. The paper, entitled “Powerful Solutions: 7 Ways to Switch America to Renewable Energy” (Alan Nogee, Steven Clemmer, Bentham Paulos, Brent Haddad: January, 1999) suggests seven methods to federally increase the amount of renewable energy production in a restructured utility system. These same principles will be used on a smaller scale to develop a plan to increase renewable energy production in Idaho while restructuring the electric utilities.

Step 1: Develop a Renewables Portfolio Standard (RPS)

A Renewables Portfolio Standard is a minimum required percentage of electricity from renewable energy that is placed upon an energy supplier or generator. These minimum requirements provide a boost to the renewable energy market while still using market-based principles. A system of Renewable Energy Credits (REC) is a corollary to the RPS. REC’s can be traded just like SOx and NOx emissions trading, only in this case, the positive externalities to technology (i.e. cleaner air, water, less waste, etc.) are traded instead of the negative externalities (i.e. chemical emissions). The RECs allow the RPS to remain a market-based system.

In Idaho, nearly 100% of the electricity is produced from hydroelectric dams. Large-scale hydropower, as it is used in Idaho, should NOT be considered a renewable technology and therefore should NOT be included in the RPS. The following technologies should be used to meet RPS requirements in Idaho:

· Photovoltaics and solar concentrators

· Geothermal plants

· Wind farms

· Small-scale hydroelectric dams

· Biomass (i.e. landfill methane recovery, rape fuel)

Because most of the electricity demand is met by hydropower, modest RPS requirements should be undertaken in Idaho. Assuming the plan begins implementation in 2002, the RPS minimum standard should be 3% for the first three years (2002-2004), raised to 4% for the next two (2005-2006) and then raised to 6 percent through 2010. In 2009, the program should be reevaluated to set more aggressive targets for the next time period. Also, special consideration should be taken for the exceptional wind resources found in some regions of Idaho. To promote the use of wind power in the state, the Idaho RPS should require that 40% of the requirement come from wind turbine use.

Step 2: Begin Public Benefits Funding

Public benefits funding provides a financing pool for RPS requirements and other renewable projects. Since the cost of electricity is very low in Idaho, electricity consumers can bear the burden of a public benefits fee. The fee can be assessed as $0.0005/kWhr for Idaho electric consumers. This will raise approximately $74.5 million dollars in revenue for the public benefits fund. The burden of this fund should be placed on consumers on a usage level for several reasons:

· Consumers of electricity will be the ones who will benefit from the implementation of renewable, sustainable energy technologies.

· The electricity costs in Idaho are lower than the costs in every other state, except Kentucky. Idahoans should be able to bear the burden of a $0.0005 fee per kWhr.

· By levying the fee on a per unit of energy consumption basis, the Idaho government sends the message that those who consume more should pay more. Those who practice energy conservation in their homes are naturally rewarded. This would not be the case if, for example, a yearly flat fee was used to create the public benefits fund.

The fund should only remain in place for the first 3 years after initiation of RPS (i.e. through 2004). The Energy Division of the Idaho Department of Water Resources should manage the fund and should create a committee to evaluate proposals from utility companies. Those with proposals which help the renewable energy market most in the long-term sense should be rewarded with a piece of the public benefits fund.

Step 3: Further Develop Net Metering

Net metering already exists in Idaho, however the current system can be tweaked to promote better outcomes. Net metering benefits individuals and small businesses that implement small-scale renewable technologies. Most of these consumers still rely on utility electricity when the sun is not shining or the wind is not blowing. Net metering allows that individual or business to “trade” excess energy produced during particularly sunny or windy days back to the utility in exchange for utility use when the renewable technologies are not producing enough energy. In some states, this can result in a net positive for the individual renewable-owner; they may receive a check from the utility company every month. However, in Idaho this is not possible. Requiring the utilities to physically buy the excess energy produced should ensure the continued success of this program.

Step 4: Enact Fair Pollution Rules

The Union of Concerned Scientists presents this section mostly to deal with pollution from coal and gas-fired power plants. Essentially, these plants do not exist in Idaho and so the traditional pollution issues are not a problem. However, similar policies should be enacted as a security measure in case coal or gas-fired plants are built in the future.

To ensure that fair pollution rules are created in Idaho, a board of scientists in Idaho must compile scientific assessments of the environmental effects of hydropower. Many scientists claim that hydroelectric dams produce as much pollution as energy sources associated with the term, “dirty”. These claims need to be evaluated; if they are determined to be true, hydropower emissions must be included in the fair pollution rules.

Step 5: Customer Information

These are educational measures that teach consumers where their energy is coming from, how much it costs (comparatively), and what are the related externalities.

Disclosure Label – These labels should be included with every electric bill. They are analogous to mandatory food labels. In Idaho, these labels should include the following:

· Electricity price (compared to national average)

· Electricity mix

· Air emissions (an accurate estimation of emissions from hydropower)

Education Programs – In order to help consumers analyze their disclosure label, the following educational materials should be provided with each electric bill

· Comparison of the health and environmental effects of various energy technologies.

· Environmental assessment of hydropower (detailing the problems associated with large-scale hydropower use.

· Brief explanation of several renewable energy technologies.

Most people do not know much about energy choices. By including comparative information in their energy bills, the utilities provide that education to ALL electric consumers. It is important for the utilities to include information concerning the problems of hydropower and to educate people about renewable energy. Through this education, more people will choose renewable energy, which will help support the utilities’ RPS requirements.

Certification – When Idaho is deregulated, the state can issue certification for utilities providing at least 30% of their electricity as renewable (no large-scale hydro) power. This gives consumers a visual to relate to good environmental choice.

School Education – Just as children were essential in promoting recycling, children should be included in the renewable energy reform process. Utilities should be required to develop state-approved educational materials for schools. Also, renewable energy should be required in elementary, middle and high school science curriculums.

Step 6: Putting Green Customer Demand to Work

Studies have shown that consumers are willing to pay more for clean, renewable energy; “green pricing” programs take advantage of that willingness. These programs, run by utilities, charge consumers a bit extra for electricity. The extra costs are poured into renewable energy projects. The Union of Concerned Scientists estimates that penetration for this program is only 1% of the population. However, this is still a viable means for promoting renewable energy development. This concept may be particularly difficult to market in Idaho, where energy prices are so low. Those marketing the green pricing programs should point out that energy prices in Idaho are well below national average, while average per capita income is above the national average.

Also, consumers interested in purchasing green power should form aggregate groups. These groups have a stronger negotiating power than individuals and can request (or demand) certain conditions from utilities. For example, aggregates can demand a certain percentage of renewables. Aggregates can also take the form of a buyers cooperative.

Also, the Idaho state government should demand a clean energy supply for all government and public buildings. By doing this the government sets an example AND financially promotes renewable energy.

Step 7: Develop Existing Programs

Idaho has quite a few incentives in place already to promote renewable energy. These come mostly in the form of low interest loans and grants for small businesses and individuals interested in implementing renewables or energy-efficient devices in their homes. None of these measures help utilities introduce renewables or encourage large businesses to take energy-efficiency measures. Also, the Idaho electric utility is NOT yet deregulated and one electric company has a virtual monopoly of the market. In order to move towards deregulation and make current incentives more successful, the following points are recommended:

· Develop a plan to deregulate the electric utilities immediately.

· Develop a low-interest loan program for small utilities interested in introducing more renewable energy (and green pricing) into the market.

· Expand net metering to include all customers (including commercial) and to operate as a net-buyback system if needed.

· Find ways to market the Idaho Solar Initiative to those in regions with lots of sun. Explain to these people the benefits of solar energy.

· Expand the current low-interest loan program to provide limited loans for on-the-grid renewable energy generation in high-sun or high-wind areas.

· Include renewable energy options (not just energy efficiency) in the low-interest agricultural loan program.

With its widespread solar and wind resource potential, Idaho has the potential to become a leader in the renewable energy market. These seven steps should be taken immediately to assure Idaho’s position as a leader in this incredible movement.