Wind Power has dominated the discussions around the the Idaho Public Utilities Commission hearings Tuesday, Wednesday and Thursday over the pricing of renewable energy projects.
But some of Idaho most powerful companies and its growing dairy industry are fighting to protecft what they consider private property.
Idaho Power Co., Avista and Rocky Mountain Power Co are pushing to shift the ownership of renewable energy credits, or RECs worth in some cases millions, from the power producers to the utilities who are required to buy the power under the Public Utility Regulatory Policies Act — PURPA.
Passed by Congress in 1978. PURPA was written to encourage small, sustainable power production and assures these companies a market and a set rate for their electricity. Public utilities like Idaho Power are a monopoly and the law was designed to provide competition.
JR Simplot and Clearwater Paper have co-generation plants at their factories in Pocatello and Lewiston that have RECs attached to them and they don’t want to lose them. The dairy industry is seeking to clean up its smell and help with water quality by building digesters that capture methane from manure.
So when the PUC staff came down on the side of the utilities and recommended the RECs stay with the utility require3d to buy power under PURPA, the Milk Producers of Idaho weighed in with the commission and Gov. Butch Otter who appoints them.
“If the IPUC follows the staff recommendation, the credits would no longer be available for the dairy and the construction of a very useful waste management tool will be eliminated,” said Tena Petter, Chairman, and Brent Olmstead, executive director of the Milk Producers.
They put the decision in the language of liberty that Idaho’s conservative government holds precious.
“ Any determination by the IPUC to force the owner of those credits to give them up to the utility would be nothing more than a bureaucratic taking of personal property and would be contrary to how Idaho State Government has traditionally operated,” they wrote.
Here’s the entire letter:
August 3, 2012
The members of the Milk Producers of Idaho (MPI) want to make you aware of a recommendation made by the Staff of the Idaho Public Utilities Commission that if implemented will negatively impact the Idaho Dairy industry.
In the recently released “Staff Legal Brief” regarding Case No. GNR-E-11-03, the PUC staff addresses the issue of who owns the “Renewable Energy Credits” (RECs) that are developed in the production of alternative energy projects that are PURPA qualified.
The staff recommendation is that those credits should stay with the energy and be given to the Utility that is required to purchase the energy under the PURPA laws. The members of MPI utilize those credits in contracting the construction of anaerobic digesters on dairies. These RECs are necessary for the project to pencil out and not become yet another regualtory cost for the dairy. If the IPUC follows the staff recommendation, the credits would no longer be available for the dairy and the construction of a very useful waste management tool will be eliminated.
Currently in negotiations with the Utilities, the credits are a large part of the discussion, and it is recognized that those RECs belong to the producer of the energy. During the last legislative session a bill was introduced that would force the creator of those credits to give them over to the Utility. After hearing from multiple impacted parties (including the Idaho Dairy Industry) the Senate State Affairs committee wisely chose to not give the bill a hearing.
For that reason the IPUC feels that they must be the determining body in deciding who should own the credits. To the dairy industry that is not a question that needs answering. The individual who took the financial risk, acquired the necessary permits and built the facility should own all benefits from the investment – including the RECs.
Any determination by the IPUC to force the owner of those credits to give them up to the Utility would be nothing more than a bureaucratic taking of personal property and would be contrary to how Idaho State Government has traditionally operated.
Governor, this is an extremely important issue for the Idaho Dairy Industry. The state of Idaho has encouraged the use of digester technology for over a decade. The industry has spent tens of millions of dollars in researching digesters and has finally found a process that helps solve the issues surrounding the waste products produced at a dairy operation and is affordable to build – provided the RECs are owned by the facility.
A decision by the IPUC that accepts the staff recommendation will create a regulatory expense that will jeopardize any further growth for a three billion dollar Idaho industry.
Governor, the members of MPI would be happy to meet with you and discuss this issue in further detail.
Tena Petter, Chairman,J. Brent Olmstead, Executive Director,
Milk Producers of Idaho