20100415White Direct.pdf

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Dean J. Miller (ISB No. 1968)
Chas. F. McDevitt (ISB No. 835)
McDEVITT & MILLER LLP
420 West Banock Street
P.O. Box 2564-83701
Boise,ID 83702
Tel: [phone]
Fax: [phone]
j oe(ßmcdevitt-miller. com
chas(ßmcdevitt -miler .com
ZOiû APR 15 Aì'~ to: 04
Attorneys for The New Energy Company LLC
and Western States Equipment Company, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMSSION
The New Energy Company LLC,
An Idaho Limited Liabilty Company, and
Western States Equipment Company, Inc.,
An Idao Corporation,
Case No. IPC-E-IO-13
Complainants
v.
Idaho Power Company,
A Regulated Public Utilty,
Res ondent.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
DIRECT TESTIMONY OF LESLIE WHITE
1 Q.Please state your name.
2 A.My name is Leslie Whte.
3 Q.What is your occupation?
4 A.I am one of the two co-owners of The New Energy Company, LLC.
5 Q.Please describe your educational and professional background.
6 A.I am a Chemical Engineer. Prior to my work in renewable energy, I had worked
7 for seventeen years in energy related industres primarly centered around coal,
8 upgrading oil and gas. My professional experience also includes chemical
9 processing and design development for solid rocket boosters.
10 Q.What is the New Energy Company?
11 A.We are a women-owned company specializing in energy efficiency solutions for
12 businesses and renewable energy development.
13 Q.What is the purose of your testimony?
14 A.I will describe, in addition to negotiations with Idao Power Company, other
15 efforts we have underten to develop our projects.
16 Q.Please describe the projects.
17 A.We are working to develop thee electrc generation projects at large dairies in
18 southern Idao. They are the Rock Creek Dai in Filer, the Double B Dairy in
19 Muraugh and Swager Farms in Buh.
20 Q.What is the intended nameplate capacity of each of the projects?
21 A.The intended capacity for the Swager and Double B dairies is 1.2 MW for each.
22 The initial intended capacity for the Rock Creek Dairy was 2.4 MW.
White, L 1
The New Energy Company
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Subsequent analysis has shown that Rock Creek may be capable of an additional
1.6 MW capacity.
Please describe the technology that will be used for the generation of electric
power.
The anmal waste from the dairy is processed in an anaerobic digester. Biogas
from the digester is captured, cleaned and utilzed in the reciprocating engines to
produce electricity. The technology also includes solids separation and water
cleanup.
When did New Energy commence work on these projects?
We first began discussions with the owners of the dairies in July of 2009.
Did New Energy subsequently enter into wrtten agreements with the daes?
Yes. In September of 2009, New Energy and the owner ofthe Rock Creek and
Double B Dairies, Mr. Luis Bettencour, executed Letters of Intent setting out the
terms on which New Energy would place digesters at those diares. In October of
2009, a similar Letter ofIntent was executed with the owner of Swager Fars,
Mr. Dean Swager. Since that time, our attorneys and attorneys for the daires
have exchanged drafs of defInitive lease and off-take agreements. As of March
16,2010, those agreements were in near-final form.
Please describe efforts New Energy has undertaken to obtan governenta or
environmenta permits for the projects.
New Energy has put effort into obtaning two permits, the Special Use Permit
from Twin Falls County and the Air Permit from the Deparent of
Environmental Quaity. Specific to the Special Use Permit, New Energy has met
White, L 2
The New Energy Company
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with the Twin Falls Planing and Zoning Deparment to determine the
requirements of the Special Use Permit. We have met thee times with the
environmental engineer in charge of Bettencour Dairies to discuss the procedure
and technical requirements for the SUP. New Energy has worked with our
technology provider to determine the design parameters needed to submit the SUP
application. Specific to the Air Permit, we met with the DEQ on Febru 5,
2010, to determine the permitting requirements for the Air Permit. The modeling
protocol was submitted to the DEQ on Febru 13,2010. We engaged an
environmenta permit specialist to direct our air permit process. Subsequently, we
have met with ths consultat several times to provide facilty design and
emissions input for the modeling necessar to obtain the air permit.
Please describe efforts New Energy has made in the area of engineering design
for the projects.
In March of 2009, New Energy began thorough research on anaerobic digestion
and the production of electricity from the produced biogas. Two main types of
technology were evaluated and thee specific technologies were selected for
fuher investigation. Capital costs and operating costs of the anaerobic digestion
and of generation reciprocating engines were determined. Facilties in
Washington, Michigan and Wisconsin were visited to determine the best
technology. Evaluation of the technology included research and investigation of
systems for cleaning the water, removing solids from the waste and engine
effciency and emissions. A business plan and cost model were developed to
explain the technology and to provide a mechanism for investment.
White, L 3
The New Energy Company
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Please describe efforts New Energy has made to procure or reserve digester and
related equipment for the projects.
Selection of the anaerobic digestion technology and evaluation of the engines
curently utilzed in the industry was the first step. Afer the technology was
selected, New Energy worked with the technology providers to determine the lead
times of critical equipment. The tas utilzed in anaerobic digestions are
primarly made of concrete, however, they can be steel construction. New Energy
provided a preliminar cost analysis of both constructions and worked with the
technology providers to determine the most cost effective design. The generating
equipment design and lead time for procurement was investigated at each of the
facilties that New Energy visited. New Energy determined that Western States
Equipment Company will provide the generating equipment. New Energy has
developed a project schedule which defines critical steps in the design
engineering, procurement and constrction. The tans on the digesters canot be
reserved or ordered off the shelf. New Energy has inquired as to the lead time on
the generating equipment. Two engines and the associated switchgear for the
facilties are reserved; the smaller engines can be procured withn the time
constraints of the digester constrction.
Please describe efforts New Energy has made in the area of project financing.
As noted above, the engines necessar to convert biogas to mechancal energy
wil be provided by Western States Equipment Company of Meridian, Idaho. In
December of 2009, we began discussions with Western States about the
possibilty of equity paricipation by Western States in the projects. On
Whne, L 4
The New Energy Company
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December 22nd 2009, Mr. Joseph Terteling indicated commitment in the form of
equipment in kind for six generators to the projects. After a series of discussions,
in Febru of201O, Western States, gave a firm commitment to provide equity
fuding.
What affect does the decrease in the avoided cost rates have on the economics of
the projects?
The new rates have substatially affected the financial retu by decreasing the
ROI by approximately 10%. Ths level of decrease to the financial retur
jeopardizes the economic viabilty and financial success of the projects.
Has New Energy made substatial financial investments in the development of
these projects?
Yes it has. We have incured costs in excess of $30,000 in consulting fees for
engineering and equipment design. We have incured costs for sureying and
preparation of legal documents of approximately $6,500. Prior to March 16,
2010 we paid deposits to Idaho Power Company in the amount of $20,760. On
April 2, 2010, we paid additional deposits to Idaho Power of $23,490. Travel and
office expense has totaled approximately $11,000. Salar, benefits and insurance
for the members of New Energy are $218,750 as of March 16,2010. Taken
together our investment in the projects exceeds $310,000.
Subsequent to March 16, 2010 has New Energy continued efforts toward
development of the projects?
Yes, on March 31, 2010, I completed the Qualifying Facility certification process
though the Federal Energy Regulatory Commission.
Whne, L 5
The New Energy Company
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Is there a reason you had not completed the self-certification process sooner?
We understood that the self-certification process is largely an clerical process
involving the completion of an on-line questionnaire at FERC that could be
completed any time prior to execution of a purchase power agreement.
Why did you continue to expend effort to obtain purchase power agreements 'and
electrical interconnection after the issuace of Order No. 31025?
New Energy desires to demonstrate that it is serious about pursuing the projects, if
it is determined the projects are entitled to avoided cost rates existing prior to
March 16,2010.
Does this complete your testimony?
Yes it does.
White, L 6
The New Energy Company