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Wind energy: Opponents stress problem with subsidies; proponents insist it is a property rights issue

Wind energy: Opponents stress problem with subsidies; proponents insist it is a property rights issue

Mitch Coffman
October 11, 2012
October 11, 2012

During the 2012 legislative session, Rep. Erik Simpson, R-Idaho Falls, proposed legislation putting a two-year wind moratorium on wind projects in the state so the issue could be better studied by the Legislature.

House Bill 561 was held for four weeks, eventually not making it to a vote. But Simpson did get something from his effort: The House speaker and Senate pro tem formed a task force to look into the issue.

The task force met in Idaho Falls for two days recently to hear testimony from wind farm developers, Idaho Power, Idaho Fish and Game, Simpson as well as testimony from the public. In addition to the formal testimony, there was a tour of wind development projects in the area.

Simpson has been at the forefront of those opposed to the wind energy industry for the last couple of years in the Legislature, pointing out several things with the industry that he believes are concerns.

Among those are the production tax (rather than property tax), government subsidies and property rights of those citizens around wind farms who are forced to live with the huge structures, the noise and the visual pollution of having them as neighbors.

Simpson also says that Idaho power companies are being forced to buy energy that they don’t need, at higher prices. “Idaho’s investor-owned utilities are drowning in unreliable, expensive energy derived from commercial wind farms,” he said.

During Simpson’s presentation to the task force and while the Legislature was in session, he emphasized that subsidies play a major role in the wind energy industry, as IdahoReporter.com has written on previously.

What has become a wind energy development debate in Idaho had its beginnings in 1978 with the passage of the federal Public Utility Regulatory Policies Act (PURPA). Its intent was to promote greater use of domestic renewable energy. The law forced regulated electric utilities to buy power from wind producers, for example, if that cost was less than the utility's "avoided cost" rate to the consumer. Avoided cost refers to the added expense a utility would have to spend to generate the power itself.

PURPA's implementation was left to the states, which is the background for the discussion in the Legislature about wind energy and a focus of sorts at the Idaho Falls hearing.

In addition to meeting the intent of PURPA, said Simpson, two recent events have helped the industry explode. In 2007, the Idaho Legislature changed the taxing method from a property tax to a production tax, thus giving the wind farms a major tax break.

Then, in 2009, as part of American Recovery and Reinvestment Act (stimulus bill), for installing a specified energy property, some of the cost (up to 30 percent) is reimbursed by the federal government. The numbers are staggering, according to Simpson.

Since the program began in 2009, some $13 billion has been awarded to projects for alternative energy. Of that money, the number of solar projects reimbursed versus wind is a ratio of nearly 59 to 1. However, the total dollar amount for wind projects, $9.216 billion, consumes more than 70 percent of the subsidies.

The total amount received in Idaho is $303 million, with just under $301 million going to 34 wind projects.
During the public testimony on wind energy, far and away the majority of those testifying were in favor of wind energy. Those who testified settled on two themes:

First, it’s the property owner’s right to put up wind turbines and the state shouldn’t have the authority to say no.

Tory Talbot, who described himself as a property owner with a wind farm in Idaho Falls, reflected the private property sentiment in his remarks to the task force. “If this thing comes to pass (wind moratorium), you’re stepping on the toes of private property owners and saying, you know, you can’t use your property as you see fit, even if you’ve followed the local ordinances and laws. I think a lot of landowners (involved in wind energy) feel like their property rights are being trampled on even though they followed the law.”

Second, that local counties should have a say in the zoning and siting requirements and, again, the state should have no control.

Out of nearly two dozen who elected to testify during the public testimony portion of the task force meeting, just one person was against wind energy.

Harold Jones, a former planning and zoning commissioner for nine years for Bonneville County, believes that wind energy is fine, if it can sustain itself as an industry without the subsidies.

“My concerns are the fundamental principles of wind energy itself. The free markets should be determining whether it’s a viable resource or not. I’m very grateful that these gentlemen have jobs, especially right now, but the free market isn’t providing those, I’m providing those as a taxpayer and I question whether or not the subsidies are the best way to go. You can argue back and forth about farm subsidies. I’m a farmer, I have a small farm,” said Jones. “But my view is that those farm subsidies should be gone too, that we shouldn’t be subsidizing any industries.”

Jones also agreed with Rep. Simpson’s point about wind developers allowed to pay a production tax instead of a property tax.

“We as a state have given these companies and these property owners a pass on property taxes and that’s not equitable for the rest of us that are paying property taxes to have these massive structures (and not pay property taxes). The structure itself should be taxed just like any other structure or building that a corporation uses to do their business. I would recommend that at the very minimum that property tax be assessed based on the structure,” said Jones.

While the subsidized nature of wind development was a center point of the task force meeting, Idaho Fish and Game tossed in another factor: The department is losing ground in understanding wind power and its impact on fish and game in the state.

Gary Vecellio, a staff biologist with Idaho Fish and Game, said the agency provides technical assistance for projects such as wind farms concerning the effects they may have on wildlife and wildlife habitat, and how those can be mitigated.

Vecellio said, however, that wind energy is advancing much more rapidly than the department can keep up with. “This is an issue, specifically wind farm and wind energy development, where the actual physical technology has surged ahead of our associated technologies to understand all of these effects. That is, we can build it but we don’t know all of the effects from it.”

Idaho Power, at the center of the wind development debate in Idaho, is forced to operate under PURPA guidelines plus whatever state regulators require, a burden a company spokesman explained to the task force.

Karl Bokenkamp, director of operations strategy for Idaho Power, told the task force that because the wind is inconsistent, Idaho Power’s system must be controlled in such a way to make up for the difference. He used a chart to illustrate how the company’s hydro system would be run to compensate for high demand times and low demand times. Then he explained that integrating wind into the mix changes the way the hydro is managed.

“What winds up happening, is we have to have the ability to move another (power) unit either up or down if we go into an hour and wind energy is producing at one level and all of a sudden it falls off. Something else has to make up the difference if the load didn’t change,” he said.

Basically, the hydro system, which provides low-cost energy for the company and ratepayers, is victimized by the variances in wind generation. The company can’t increase the flow of water as much during a heavy demand and it can’t decrease the flow as much during a light demand. In some cases, Bokenkamp said, a study by Idaho Power showed that the company would end up just spilling water.

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