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Courtesy of Lorna Steiner
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At their 5-acre spread outside Weiser, Idaho, retired ranchers Jack and Julie Holmes have installed solar panels to offset their electricity costs.
“We made the decision to do it based on the economics of it,” Jack Holmes said. “Our decision wasn’t based on environmental activism or tax rebates. It was a long-term decision to improve our property.”
About 100 miles to the south, a wind turbine on John Steiner’s farming and grazing operation near Oreana reduces his irrigation pumping costs by up to 20 percent — a fact he’s happy to share with others. He and partners help build wind turbines on other farms and ranches.
“Demand is created by that customer’s use,” he said, referring to net metering programs in which an alternative energy project’s power generation is credited against the farm’s power consumption.
Although the growth in the number of large alternative energy developments — including solar, wind and specialty hydro-electric power — has dropped substantially in Idaho during the last few years, farmers and ranchers are still carving out a niche with small-scale projects that help offset their electricity use.
The drop in new large projects came after the state Legislature in 2011 did away with a seven-year-old sales tax break and the state Public Utilities Commission tightened power contracting requirements. But even after those changes the federal Public Utilities Regulatory Policies Act — known as PURPA — continues to encourage the development of small-scale power projects in the region.
Boise attorney Peter Richardson — who represents energy developers and who charted an approximately five-fold increase in wind power’s contribution to Idaho Power Co.’s alternative energy portfolio — said it’s good news for many farmers and ranchers.
Among other reasons, agricultural sites are well-suited for alternative energy generation, Richardson said.
Steiner and his partners build wind projects on farms where they’re sited to keep clear of food production and provide electricity to power irrigation systems. On ranches, higher elevations with more wind often make up for the cost of installing electrical infrastructure.
“One of the reasons wind and solar development is so attractive to be on ag land is that the ag land is developed and typically doesn’t have the environmental issues associated with virgin sagebrush,” Richardson said.
The vast majority of wind and solar development in Idaho has been on private land, said John Chatburn, administrator of the Idaho Governor’s Office of Energy and Mineral Resources. Most has been utility-scale, but the number of small-scale projects continues to grow.
Steiner said he was busiest about three years ago, when Idaho investor-owned utilities still were seeking renewable energy in sizable quantities. Now development costs are higher and the utilities have in many cases met their renewable energy targets.
But utilities continue to purchase renewable energy based on project suitability, efficiency and need, he said.
Factors that bode well for alternative energy include population and business-sector growth, Steiner said.
“We are seeing some capacity taken up by new industries, which could provide a market for more energy created by renewables,” he said. For example, Amazon Web Services has committed to eventually getting all the energy for its global infrastructure from renewable sources, and was at 50 percent as of January, the company said.
Steiner said big tech companies support environmental sustainability, use a lot of power, and like the idea of getting it from innovative technologies such as the new solar and wind setups that are more efficient and affordable.
Developing wind power comes with challenges such as getting plans and contracts approved by counties, utilities, public utility commissions, environmental agencies and even the Federal Aviation Administration, because they take time and careful planning, he said.
Another challenge is the loss of some financial incentives. Some federal production tax credits are still available, but Congress did not renew valuable accelerated depreciation provisions on renewable energy projects.
Paying for itself
The Holmeses installed the solar-power system on their hill-country property in the spring of 2016 for $118,000. They received a federal income tax credit of 30 percent of the project’s total cost and a $1,500 Idaho income tax credit for renewable energy projects.
Jack Holmes said they would have put in the system without the tax credits as an improvement to their 5-acre property because it is guaranteed for 25 years and is forecast to pay for itself in less than half that time.
At 24.8 peak kilowatts, their solar setup generates enough power-production credits to offset what they would pay for electricity, he said. The 87 roof-mounted panels produce up to 285 watts each. Power produced in the summer above their needs is available as credits later in the year.
Because the system is relatively small, it doesn’t require a power-purchase contract with a utility.
“It appears to me that for farm production of energy to be sustainable and viable, it would require economic net metering or affordable storage, or both,” said Boise attorney Tom Arkoosh, who represents IdaHydro, a group of small hydropower producers supplying a combined 75 to 80 megawatt-hours to the grid. IdaHydro includes irrigation districts, canal companies and private owners such as farmers and ranchers.
Smaller is better
The number of large new Idaho wind developments dropped after the Legislature ended the sales-tax rebate, Richardson said. Subsequent moves by utilities and the Idaho Public Utilities Commission to shorten utility contract lengths and reduce qualifying facilities’ maximum power output made larger projects much less economically feasible. Developers who could previously get 20-year contracts to sell up to 10 peak megawatts to utilities were limited to projects smaller than 100 kilowatts.
In Oregon, wind and solar developments are still popular, thanks in part to the 15-year contract maximum and larger allowed project sizes, he said.
PURPA, the federal law, requires utilities to buy energy from qualifying independent producers at a rate determined by state utility commissions based on the cost the utility avoids by not having to generate the power or buy it elsewhere, or at a rate based on the utility’s long-range generation plan.
Because consumers pay for power, the intent of the federal law is they are not penalized if their utility uses renewable energy, Idaho PUC spokesman Matt Evans said.
Oregon as of March had 124 PURPA-qualifying small wind and solar projects operating or under development, according to the state Public Utility Commission. Pacific Power has 11 wind facilities operating and six under development, and nine solar facilities operating with 58 under development. Portland General Electric has one wind facility operating and none under development and nine solar projects operating with 58 under development.
Idaho Power has six wind projects operating and none under development, and six solar facilities operating with five under development.
Work on alternative-energy projects in Oregon and Washington remains fairly steady. In Oregon, 10 large wind projects are operating or planned, as are three large solar projects.
“We had a pretty big surge of wind applications up until around three or four years ago — then it kind of peaked,” said Todd Cornett, Oregon Department of Energy assisting director for siting. The department handles large projects, and municipalities handle small projects.
The department is also starting to see some existing wind project managers add generation capacity by increasing wind turbine blade lengths or incorporating solar arrays and battery storage to improve consistency, he said.
In Washington, output from renewable projects rose by about 50 percent from fiscal 2016 to 2018, said Michael Furze, assistant director of the state Department of Commerce Energy Division.
Washington utilities must use renewable energy for a specified portion of their electricity supply under a 2006 voter initiative, said Glenn Blackmon, senior energy policy specialist for the division.
“It’s currently 9 percent and goes to 15 in 2020, so utilities are looking ahead to that and preparing,” he said. Utilities are subject to the requirement if they serve at least 25,000 customers.
Overall, demand for power is leveling off, according to utilities.
Richardson said tougher energy-efficiency codes for buildings and more efficient lighting and appliances have greatly reduced per-person power demand in the past decade. The change has been “dramatic” and “in contrast to the traditional utility structure: a gradual rise in growth and consumption.”
Because of these efficiencies, Idaho’s population and economic growth have been strong, but not to the extent utilities are starved for more power generation, he said. Idaho Power says it has enough capacity to meet its needs for the next eight years.
Eighteen solar projects under PURPA contribute a combined 313 megawatts to the Idaho Power portfolio, and five more projects representing 26.75 megawatts are slated to go online in 2019, company spokesman Jordan Rodriguez said. The company this year added 5 megawatts from biomass — which includes timber and landfill waste and gases and methane gas from anaerobic digesters and other sources — and next year plans to bring on a 2 megawatt hydro project.
Under PURPA, Idaho Power purchased 2,800 megawatt-hours at an average price of 6.064 cents per kilowatt-hour last year, he said.
Idaho Power could also purchase more renewable energy as it retires the three coal plants it partly owns as an effort to reduce carbon emissions, Rodriguez said.
Small hydropower generation is a bright spot for agriculture. Richardson said southern Idaho has more than 50 small hydroelectric projects ranging from 100 kilowatts to 10 megawatts at peak capacity, including many on agricultural ground and in irrigation districts. Many projects were contracted with utilities 20 to 30 years ago. These projects “have been a real success story for ag in southern Idaho,” he said.
At Twin Falls Canal Co., “having the hydro projects in place saves our shareholders from a higher assessment cost,” said engineering technician Louis Zamora. The company has three and earns royalties from three more. The annual assessment of $26 per share, generally per acre, would be $31 to $33 without the hydro projects, he said.
Water flows from the canal into an intake structure, out through a power plant and back into the canal. “These canal hydros are a byproduct of water that is already being delivered to farms, with very little or no environmental impact,” he said.
Jordan Whittaker since 2014 has operated a hydropower system in a canal on his family’s Two Dot Ranch near Leadore, Idaho. The ranch, with 2,000 irrigated acres, runs 1,700 cow-calf pairs.
The fourth-generation rancher said the hydro setup uses a pipe and Pelton wheel to take advantage of more than 300 feet of elevation drop over two miles. Its peak capacity is 360 kilowatts. The $1.2 million project took around a decade to plan, permit and build, but now generates nearly $100,000 in gross revenue annually through a contract with a utility.
The income in the short term primarily services the project’s debt but in the long term represents “another revenue stream to make the operation stable, and opportunities for the kids and others to stay,” Whittaker said.