20090611Boise Chamber Comments.pdf

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Comments Prepared by the Boise Metro Chamber of Commerce
Before the Idaho Public Utilities Commission
Regarding Idaho Power's Request for a Cerificate of Public Convenience and Necessity
For the Langley Gulch Generation Plant
June 11, 2009
Commssioners:
The Boise Metro Chamber of Commerce (Chamber) has carefully evaluated energy
resource issues and their impacts on the communty. The Chamber stated its conclusions in a
docuent entitled "Energy Resources Policy" which was approved by the Chamber's Board of
Directors on August 14, 2008. A copy of ths docuent is attached to these comments.
One of the key conclusions is the Chamber's strong support of public policy that
encourages energy efficiency and responsible energy use by businesses, consumers, and
governent, including sustaiable operation and design in buildings. Additionaly, the
Chamber is supportive of the development of additional energy infrastrcture including
distrbution and tranmission facilties, and environmentally responsible generation to meet the
short-term and long-term energy needs for, and to accommodate economic development in, the
Treasure Valey. Reliable and affordable energy is an important element to a vibrant area
economy.
It is our position that the tiely constrction and operation of the Langley Gulch plant is
consistent with the Chamber's stated Energy Resources Policy. We conclude that the Langley
Gulch Project offers a reliable power supply, is the economical alternative, diversifes Idaho
Power's resource portfolio, supplies jobs and tax revenues to the valley now and into the future,
supports and complements the development of additional renewable resources, is
environmentaly responsible, and provides economic stiulus to the area.
The Chamber believes that the project is needed in the tie frame proposed. We are
well aware of the impact that supply and transmission constraits have in the valley's abilty to
recruit new quality commercial and industral enterpries to the area. We understand that new
or additional loads of any size are frequently asked to provide their own generation, be subject
to interrption and/or reduce their sumer load shapes in order to intiate servce. Our
examation of the restrctions in the recent Hoku Materials electrc servce contract indicates
that Idaho Power is constraied in the amount of power it can provide a new customer even
today.
Idaho Power's cuent resource mi relies signcantly on its hydroelectc generation;
therefore its operations can be signcantly affeced by water conditions. Idaho power often
must rely on market purchases to meet energy deficits, which in tu are subject to transmision
availabilty. The Langley Gulch Power Plant wil reduce that reliance. Ths generation option is
even more important as new tranmision constrcton appears to be takg a slower route to
completion.
From our gleang of the Idaho Power fig, it is apparent that the Langley Gulch
project is the most economical of the alternatives avaiable with the second place project in the
Request for Proposal process being substantially more expensive and without signcant
differences in achevig the goal of reliable power supply. Langley Gulch was the right choice
for Idahoans.
By selectig the Langley Gulch Project, Idaho Power and its shareholders take on project
development and constrction risk. Customers retai the rik of fuel cost increases under either
a tollg agreement or a utity-owned. However, th utity-owned resource option provides
for customers the potential opportty to share in the benefit if Idaho Power is able to operate
and maitai the project for less than its anticipated costs.
Langley Gulch wil create both short and long term job opportuties. The constrction
wil require a labor force of up to 120 workers for as long as two years. These wil include
qualifed local electrician, pipefitters, steelworkers, excavators, carenters, concrete workers,
and laborers. Additionaly, Idaho Power has told the Chamber that local services, material and
equipment suppliers wi be used wherever possible. Ths wi include such items as concrete,
rebar, and steel, and the rental of equipment. Under commercial operations the combined cycle
plant staff wil consist of 18 personnel, including 10 operators to provide 24 by 7 coverage, two
maintenance mechancs, two techncians, an engineer, a chemit, a clerk/materials coordinator,
and an operations and maintenance supervisor. Once complete, the plant wil be placed
permanently in the tax base and Idaho Power wil pay propert taxes.
The addition of the Langley Gulch Power Plant to Idaho Power's generation portfolio
wil enable the Boise Metro Chamber of Commerce to realistically encourage the contiued
research and development of cost-effective renewable energy sources, including but not lited
to wid, solar, geothermal and bioenergy. Development of these energy options wil lead to
new industries and lower the need for traditional generation in the futue. From an
envionmental standpoint, the Langley Gulch Power Plant wi be fueled by clean burg
natural gas and wil be constrcted using the best techology to mitigate ai emisions. The
plant contais the best attibutes of both a base load plant that can be ru economicaly for long
periods of tie and a peakg plant that can be brought up and down to meet load. It is our
understanding, that a combined cycle plant is an excellent resource to integrate wind, and other
intermittent resources into the electrical system.
June 11, 2009 Page 2 of3 . Langley Gulch
As mentioned previously, ths power plant is a rather unque base load facility for the
Idaho Power system with the inerent operational flexibilty that can support use of renewable
energy sources because it can be dispatched to optiize output and capabilties with Idaho
Power's existig generation fleet. The plant can change generation quickly to maintain system
balance as load vares or as intermttent resources such as wind and solar vary their output.
Idaho Power has aleady leveraged the flexibilty of its clean, carbon-free hydroelectric
generatig system and is lited in its abilty to integrate intermttent generation resources such
as wind and solar generation. The flexibilty ths plant would provide is necessar to permit
integration of future intermittent generation resources. In addition, the plant wil also provide
additional operatig reserves necessary to reliably operate Idaho Power's transmision and
generation system in those peak ties when demand is high and reliabilty is paramount to our
members.
Respectfuy submitted,
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Julie A. Pipal
Director of Legislative Affairs
Boise Metro Chamber of Commerce
June 11, 2009 Page 3 of3 Langley Gulch
.BOISE METRO
CHABER OF""OMMERCE~
R.eCEIVED
2009 JUN "PH 2: 22
IDAHO P If'UTlUTfES C iŠSiON
ENERGY RESOURCES POLICY
POLICY STATEMENT: To support the continued economic development of Southwest Idaho and
maintain the qualties of life we enjoy, the Boise Metro Chamber of Commerce wil:
· Encourage cost effective energy efficiency programs and responsible energy use by
businesses, consumers and governent, including sustanable innovation in the operation
and design of buildings. Energy conservation now wil lower the need for additional
energy in the future. Advocate and parer with the State of Idaho and local governents
for 'high performance' buildings.
· Support the development of additional electrcal and natual gas infastrcture projects to
meet the area's short-term and long-term energy needs and to accommodate economic
development in the Treasure Valley. This includes implementation of plans which specify
necessary transmission and distrbution facilties and constrction of environmentally
responsible generation facilities withn the Treasure Valley that wil serve the demand and
enhance system reliabilty.
· Urge members of Idaho's Congressional Delegation to support environmentally compatible
exploration for oil and natural gas in the Arctic National Wildlife Refuge (ANR), on
other federal lands and in portons of the Outer Continenta Shelf now closed to drllng.
Support allocation of a porton of the new revenues to national energy laboratories and
universities for research for next generation energy development.
· Support relicensing of hydro-generation plants in the region, including retention of
operational flexibilty to meet demand. Hydropower is a renewable energy source that is
clean and affordable.
· Support cooperative efforts to preserve and maintain existing water resources for hydro-
generation in order to assure that our region's electrcity rates remain affordable.
· Encourage the continued research and development of cost effective renewable energy
sources, including but not lited to wind, solar, geothermal and bioenergy. Development
of these energy options wil lead to new industres and lower the need for traditional
generation in the future.
· Advocate for the research and development in Idaho of power generation from nuclear
energy. A diversified portfolio of sustainable economic energy options wil best provide
for the projected population and business growth in Southwest Idaho. In addition to
traditional generating resources, the portfolio may include nuclear and varous types of
alternative energy resources.
Page 2.
Background:
Southern Idaho has historically benefited from abundant, low-cost, clean electricity due largely
to the abilty to generate electrcity from 17 hydro-electrc generation projects operated by Idaho
Power on the Snake River and its trbutaes. Low electrcity rates have helped fuel historically
unprecedented economic development in Southwest Idaho. Businesses have enjoyed reduced costs of
production, makng goods and services more economically competitive. Southwest Idaho consumers
have enjoyed relatively greater disposable income which has allowed them to purchase more goods
and services.
Due to the combination of increased demand for electrcity due to population growt and
increased electrcity usage by individual households, and shrnkng base levels of water in the Snake
River that have reduced hydro-generation, once abundant supplies of electrcity have beome a luxur
of the past. Electrcity is now a precious resource, and wil become more precious in the futue. It
must be used efficiently and conserved when possible.
Idaho lacks in-state energy resources to meet curent or future demand. Idaho must import over
80 percent of the energy it consumes, including all of its natural gas and petroleum, and over half of
its electrcity. Much of the Treasure Valley's electrcity demand is met by hydro-generation within the
state. Environmental concerns and competing demands for water makes the development of
signficant additional hydro-generation unlikely. Moreover, while development of renewable energy
resources such as geothermal, solar, wind and biomass wil continue to help meet the Treasure
Valley's energy needs, these energy resources cannot satisfy all additional future demand.
Meeting futue demand for reliable electrcity in the Treasure Valley wil require
unprecedented constrction of new infrastrctue - principally electrcal transmission and generation
facilities. These facilties wil be expensive and take time to build. Paying for this new infrastrcture
wil require the Idaho Public Utilities Commission (IPUC) to authorize responsible, yet necessar,
increases in electrc rates. Since the demand for electrcity is growing nationwide, utilities across the
countr are also required to build infrastrcture and their customers wil encounter similar rate
increases. Although Treasure Valley customers wil see an increase in the cost of electricity, on a
relative basis Treasure Valley businesses and residents wil continue to enjoy among the lowest rates in
the countr.
Growth impacts all infrastrctue - water, roads, governenta services, natual gas, and
electrcity generation and transmission. The cost of supplying electrcity to new customers is
signficantly greater than the cost of supplying electrcity to existing customers. Electrcal utilities are
not permitted by law to impose the full cost of new infrastrcture only on new customers. As a result,
existing customers' rates increase as they bear the cost of growth. In this way, attracting new
businesses can have the effect of imposing higher costs on existing businesses. In order to preserve
existing businesses and jobs, communities should measure the life cycle impacts of attacting new
businesses. Maintaining relatively low electrcity rates requies that communities plan better for
growth, It also requires that stream flows in the Snake River be maintained in order to preserve our
region's base of low-cost, clean, hydro-generated electrcity.
Page 3.
In order to continue to enjoy low cost electrcity and still permit reasonable economic growth,
Treasure Valley business leaders, political leaders and citizens should:
· Educate themselves and others about energy issues and our precious hydro-resources.
· Conserve electrcity and support energy conservation and effciency efforts.
· Support cooperative efforts to preserve and maintain water resources.
· Communities need to plan better for growth.
· Support the development of new generation necessar to allow reasonable growth.
Introduction from the "2007 Idaho Energy Plan":
Idaho has historically benefited from a reliable energy supply and from electrcity and natural gas
prices among the lowest in the country, despite the fact that Idaho has no domestic petroleum, natural
gas or coal resources. These low electrcity and natural gas rates have provided Idaho with an
economic advantage in attacting and retaining industry and allowing Idaho households to spend less
of their incomes on energy. However, Idaho's economy is more energy-intensive than most other
states, and the expansive western landscapes require Idahoans to drve more miles and bur more
gasoline than residents of most other states. Ths is compounded by the fact that Idaho's gasoline and
diesel prices are somewhat higher than the national average. Moreover, Idaho's relatively low
household incomes mean that energy is a larger relative burden for Idaho households than many other
states.
Whle Idaho's existing electrcity rates are very low, new electrc generating resources are much
costlier than the existing resources that serve Idaho customers. Idaho's large hydroelectrc resources
are fully developed, and the cost of building and operating new coal and natural gas fired power plants
has risen substantially in recent years. Natual gas prices have been rising because U.S. production has
not kept pace with demand, requiring the development of costlier resources such as Arctic gas or
liquefied natural gas imports. Geopolitical events such as the current instability in the Middle East and
rising petroleum demands by developing countres are causing high and volatile global crude oil prices
- and as a result, high fuel prices in Idaho. Going forward, Idaho wil likely see escalating prices for
its energy supplies.
Idaho's lack of domestic energy resources means that Idaho relies on imports for over 80% of its
energy needs, including all of its natural gas and petroleum supplies and more than half of its
electrcity. The in-state resources that are available to Idaho utilities are largely renewable resources
such as geothermal, wind, hydro, and biomass. Increased deployment of energy conservation and
renewable energy wil help grow the state's economy by reducing the flow of dollars outside the state
and creating local jobs and tax revenues.
EnergyPolicy
Approved: 08-14-08