Friction grows over wind power

Idaho Power Co. is fighting a measure to extend a 6 percent sales tax rebate for alternative power developers on grounds that its power systems are being overwhelmed by wind, raising rates for customers. And on Monday, a House committee spent a second day listening to impassioned testimony on a separate measure to cancel all new wind development for the next two years.

“If wind is such a good thing for Idaho, it can wait two years for further development,” said Ann Dietrich, an Idaho Falls homeowner.

A vote on the moratorium was delayed until this morning, and opposition from Idaho Power, along with its allies Avista Corp. and Rocky Mountain Power, has succeeded in derailing public hearings on the sales tax rebate at least until Wednesday while negotiations over a compromise continue.

For much of the 2011 session, Idaho Power claimed neutrality on the matter – while holding behind-the-scenes meetings with legislators in hopes that the rebate extension would simply die on its own.

Any doubt over where the state’s largest utility really stood vanished Thursday, when Idaho Power lobbyist Jeff Malmen approached Rep. George Eskridge just after 6:30 a.m. in the nearly deserted House chamber. Eskridge, R-Dover and sponsor of the rebate extension, recalls that Malmen told him that power customers in his region would be told what was behind their rising power costs, if his bill became law.

“I perceived it as a threat,” Eskridge said.

Malmen said there was no threat, merely a businesslike but friendly exchange between a company and a legislator on a subject where they disagreed. Idaho Power officials were frustrated they hadn’t been given more of an opportunity to weigh in on Eskridge’s bill.

“We were disappointed,” Malmen said.

Otter, too, finds himself in a strange spot.

For one, Malmen is his former chief of staff, so the Republican governor has close ties to one of the chief dealmakers.

In addition, Otter has touted Idaho as a magnet for alternative energy projects like wind when it suits him – not only in the Department of Commerce publication this month, but in his 2010 re-election campaign when he produced TV commercials contending he was a champion of Idaho’s wind potential. It had “just scratched the surface,” Otter told voters.

On Monday, the governor’s office said it was monitoring the talks between utilities and wind developers but hadn’t taken sides.

“At the very least, the moratorium discussion has raised the urgency for an agreement between developers and utilities,” said Mark Warbis, Otter’s energy policy adviser.

As developers and utilities employ a slew of lobbyists to wield packets of financial calculations supporting their arguments, Idaho’s citizen lawmakers refereeing the dispute face the unenviable task of navigating competing and complicated messages during the waning days of the 2011 Legislature.

Gary Allen, an attorney for a wind project going up near Bennett Mountain east of Boise, told the House State Affairs Committee on Monday that Idaho risks exposing itself to lawsuits if a moratorium scuttles projects like his.

“You’re going to bring a $250 million project that no one opposes to a screeching halt,” Allen said. “I believe my clients will have a powerful regulatory takings claim.”

Moratorium foes also contend the utilities are simply protecting their monopoly on generating facilities, much like they did in the early 1980s when Idaho Power fought efforts by farmers to add hydropower facilities to their irrigation canals.

“A monopoly will defend its turf to the death,” said Jack McCann, a former lawyer at the Idaho Public Utilities Commission in the late 1970s and early 1980s.

Neil Colwell, Avista’s lobbyist, countered that a moratorium should be enacted because wind power is developing at an unsustainable rate for Idaho’s power system. Colwell contends that federal subsidies, cheap turbines, attractive rates and lucrative renewable energy credits that wind farms can sell outside Idaho have transformed the wind industry into a gold mine on the backs of ratepayers.

“Who pays?” Colwell asked the panel. “We think the customers do. … We think a timeout might be a good idea.”