3

         1                 So my question for the panel:  Is Idaho

         2       ready to provide for or to mandate CCS with new

         3       and even existing industrial and energy sources

         4       of CO2 emissions?

         5                 Three keyite barriers to commercialize

         6       CCS have been identified.  The first is the need

         7       to develop cost-effective capture technology.

         8       DOE and its industrial partners are working on

         9       that.  They say that basalt formation hold

        10       promise.  And maybe we can hear more about that

        11       here.

        12                 The second barrier is regulatory and

        13       legal uncertainties, mainly in the ownership of

        14       the emissions at the site and the long-term

        15       liability areas.  Well, our neighboring Rocky

        16       Mountain states are taking action to amend their

        17       laws to address these ownership and other legal

        18       impediments to CCS.  The EPA and coalitions of

        19       western states are developing regulations to

        20       govern the actual transport and injection

        21       process.  But liability remains a big question

        22       and we may end up having to wait for the federal

        23       government to address that part if it's going to

        24       be commercially viable.

        25                 The third barrier is the absence of a

                                                                  4

         1       national strategy to control carbon dioxide

         2       emissions, to provide the adequate incentive for

         3       industry to invest in the cost of CCS.  Cap and

         4       trade may be the answer there regionally or

         5       nationally because, as we've learned in this

         6       conference, cap and trade holds the promise of

         7       increasing the cost of emitting CO2 and that

         8       makes CCS more cost-effective.

         9                 Questions again:  Is there a need in

        10       Idaho for CCS as a way to reduce carbon dioxide

        11       emissions?  Would this be a requirement for any

        12       clean coal plant or any new natural gas plant

        13       that we plan to develop in Idaho?  Do we have the

        14       right underground formations in Idaho for CCS?

        15       Do we need to amend our laws to enable CCS or to

        16       facilitate that?  Should we be more of a player

        17       now rather than an observer in the cap and trade

        18       initiatives?

        19                 One other question that we haven't

        20       really addressed in the conference is

        21       transmission grid and transmission capacity.

        22       That is related to our state energy supply and

        23       whether we have the capacity available to gather

        24       all the new power that is being developed,

 &
nbsp;      25       including through renewables, and bring it to the

                                                                  5

         1       demand centers.

         2                 Wind and geothermal sites are often

         3       scattered and very remote.  They are located

         4       where the resource is and not convenient to the

         5       transmission grid and transmission lines.  So the

         6       sites that are near transmission are being filled

         7       and proposed and those are the ones that are

         8       being developed most quickly.  But we have a lot

         9       of wind and geothermal that are in remote areas.

        10       How are we going to deal with those?  How are we

        11       going to collect that energy and bring it to

        12       where the demand is?  Who is going to pay for

        13       that?

        14                 Currently in the West we are expanding

        15       and upgrading the western grid infrastructure.

        16       There are new transmission lines being considered

        17       from Idaho to Oregon to go to the Northwest and

        18       there are lines being considered from Wyoming and

        19       Idaho to bring wind energy south into Utah, to

        20       Salt Lake, where there is demand for that.

        21       Nevada is considering transmission lines from

        22       northern Nevada where there is a lot of

        23       geothermal being developed, to take that power to

        24       southern Nevada and southern California where the

        25       demand is.  And new transmission capacity is

                                                                  6

         1       being considered to move Wyoming coal power, both

         2       existing and new, to the southwest, to Arizona,

         3       Nevada, and southern California.

         4                 How does Idaho get involved in that?

         5       Do we have sufficient in-state transmission

         6       capacity and infrastructure to accommodate

         7       expanding renewable energy sources?  How are we

         8       going to connect them to the grid?  Are there

         9       impediments to our expanding our intrastate

        10       infrastructure?  What else is being planned for

        11       upgrading the western grid and how is Idaho

        12       involved in all of that?

        13                 I recently read an article about

        14       climate change that concluded a national

        15       electricity transmission grid would greatly

        16       enhance the exploitation of renewable sources of

        17       energy and to distribute energy more efficiently.

        18       That article identified local opposition as an

        19       obstacle because local governments want too much

        20       control, oversight and cost allocation.  In the

        21       article, one FERC commissioner is reported to

        22       favor a more prominent federal role in decisions

        23       and even federal authority to override state

        24       objections.  I can probably guess what Idaho

        25       thinks about that.

                                                                  7

         1                 But I'm curious what you think of the

         2       national grid idea and is Idaho involved in some

         3       of those discussions and decisions?

         4                 At the other end of the spectrum are

         5       commentators and articles that are saying that

         6       planning for purely local energy generation and

         7       delivery has got to be part of and is our best

         8       promise for energy independence, that locally-

         9       owned co-ops or smaller power plants delivering

        10       to local users is a good idea.  This is an

        11       opportunity for renewable sources to be combined

        12       with smart growth, land use and transportation

        13       planning and energy efficiency and conservation

        14       efforts to create climate-friendly sustainable

        15       communities that aren't that dependent on the

        16       grid.  This would require local land use planning

        17       and transportation planners to work hand in hand

        18       with utilities and energy supply and delivery

        19       planners.

        20                 The question I have is:  Are we already

        21       doing this or do we need to do more in this area?

        22       And another big question is:  Can we choose how

        23       we develop our power?  Can we choose to focus

        24       more on the local microscale energy development?

        25       Do we have to be involved in upgrading the

                                                                  8

         1       transmission system on the western grid and do we

         2       have to play a role in the national grid system?

         3                 All of these elements, particularly the

         4       transmission needs, how do they relate back to

         5       our energy supply portfolio diversification

         6       efforts that we have talked over the last few

         7       days and our goal of offsetting our energy demand

         8       and growth with more conservation and energy

         9       efficiency?

        10                 So with these thoughts in mind and the

        11       overarching question of what are we doing to

        12       secure Idaho's energy future and are we doing all

        13       that we can to move towards energy independence,

        14       I'll turn the time over to Ken to introduce the

        15       panelists and the roundtable discussion.

        16                 MODERATOR KEN BAKER:  You are

        17       absolutely right, that was very provocative,

        18       Linda.  Thank you very much.

        19                 What I'm going to ask the panelists to

        20       do, I'm going to introduce them right down the

        21       row here, they are going to start speaking with

        22       Representative Eskridge here; and then we are

        23       going to move to Jim Kempton with the PUC; Paul

        24       Kjellander, the director of Office of Energy

        25   &n
bsp;   Resources.  Unfortunately, Jim Miller is very

                                                                  9

         1       sorry but he could not make it today.  We'll move

         2       to Bruce Folsom, the senior manager with Avista

         3       Corp.; and down to the end, Travis McLing, a

         4       senior scientist with Idaho National Lab.

         5                 What I've asked the speakers to do is

         6       focus within that broad spectrum — actually,

         7       it's a focused spectrum — of energy that Linda

         8       has brought up, within their area of expertise

         9       and influence to address this group.  If each of

        10       us could take up to 10 minutes to begin with.

        11                 We'll start with you, Representative

        12       Eskridge, please.

        13                 REPRESENTATIVE GEORGE ESKRIDGE:  Thank

        14       you, Ken.  You might tip me when I get close to

        15       10 minutes.

        16                 But, Linda, in answer to your question:

        17       "Yes" in all the above.

        18                 So good afternoon, everybody.  Once

        19       again, it's my pleasure for being here and I

        20       always enjoy this conference.  Ken reminds me I

        21       think I've made every one since we started or

        22       almost every one.

        23                 I think you know I would have liked to

        24       have attended the whole conference, especially

        25       Wednesday night's event.  However, as you are

                                                                 10

         1       aware, this is an election year and I had some

         2       candidate forms and I was participating in my

         3       annual two-year job interview process.  So I'll

         4       know in about a week and a half or 11 days how

         5       well I did on those job interviews.

         6                 But I will ask:  How did Ken do

         7       Wednesday night; did he make me look good or did

         8       he make me look bad?

         9                 MODERATOR KEN BAKER:  Good.

        10                 REPRESENTATIVE GEORGE ESKRIDGE:  That

        11       is good.  I'm sure he did a far better job than I

        12       could and that is why I asked him to take my

        13       place.

        14                 In looking at the issue of how I

        15       believe we are going to meet our future energy

        16       needs, I refer you to our state energy policy

        17       that we put in place in 2007.  In that policy, as

        18       Linda said, we recognize that we've been blessed

        19       with a large amount of low-cost hydroelectricity.

        20       However, again as Linda said, we have utilized

        21       most of the hydro potential, at least the large

        22       hydro potential, and we now face the realization

        23       that the development of new energy resources is

    &nb
sp;   24       becoming increasingly costly and more

        25       challenging.

                                                                 11

         1                 Because of this, meeting our electric

         2       energy needs will inevitably result in upward

         3       pressure on energy rates as well as the overall

         4       difficulty in meeting our power supply needs.  In

         5       addressing the concerns of supply, availability,

         6       and price, we recognize in the policy that in

         7       order to achieve legislative objectives of

         8       ensuring a reliable, low cost energy supply,

         9       promoting the economic growth and at the same

        10       time protecting the environment, we established a

        11       priority in meeting those needs.

        12                 The Legislature gave priority, Linda,

        13       to conservation, energy efficiency, and demand

        14       response as our first priority.  Followed by

        15       renewable resources as our second priority.  At

        16       the same time, however, the Legislature also

        17       recognized that we must continue to have access

        18       to conventional energy resources such as coal and

        19       nuclear to keep our resource costs as low as

        20       possible and available when we need it.

        21                 So given these priorities in the Energy

        22       Plan, what is actually taking place in terms of

        23       following the plan?  First of all, this summer

        24       the Interim Committee on Energy, Environment &

        25       Technology was presented summaries of Idaho

                                                                 12

         1       utilities' resource acquisition programs.  Now,

         2       based on the information they provided to the

         3       Committee, I believe the utilities do recognize

         4       the priorities in the Energy Plan and are

         5       attempting to pursue resource strategies

         6       following these priorities.

         7                 I did pick up on a resource component

         8       of the utility plans, however, that I believe is

         9       going to create a problem in meeting our resource

        10       needs.  There appears to me to be an overreliance

        11       on natural gas to fill the gap between what

        12       renewable energy resources will provide and what

        13       our total electric energy needs will be.  Other

        14       than using natural gas for peaking need, I don't

        15       think we should be relying on natural gas for

        16       electricity production to the extent that it

        17       appears we are in the utilities resource

        18       portfolio.

        19                 Natural gas is more efficiently

        20       utilized in home heating, transportation fuel,

        21       and industrial uses than it is in electricity

        22       production.  Not only is it inefficient in terms

        23       of other uses, but using it as a generation

        24       resource impacts the supply
and then impacts

        25       resultant price of that resource.

                                                                 13

         1                 However, I can't fault the utilities

         2       for having natural gas in their resource

         3       portfolio because in reality they have no real

         4       other options in terms of conventional resources.

         5       Financing for coal plants is not available

         6       because of the environmental opposition to coal.

         7       And the public is still not that supportive of

         8       nuclear energy to make that option feasible, at

         9       least, I think, in the short term.

        10                 Our energy policy does address this

        11       issue of conventional resources and the

        12       conventional resources need to be recognized as a

        13       resource option in meeting our needs.  We ask in

        14       the plan that the Idaho PUC and the old

        15       Department of Water Resources, now the Department

        16       of Energy Resources headed by the energy czar,

        17       who you will be hearing from in a minute — Paul

        18       is not smiling when we say that any more, so

        19       maybe the responsibilities of that job is

        20       starting to become apparent to him — and then

        21       also the Department of Environmental Quality.

        22       These agencies should investigate and report on

        23       the status of clean coal technologies and

        24       barriers that prevent Idaho utilities from

        25       investing in environmentally preferred uses of

                                                                 14

         1       coal.

         2                 From this recommendation, depending on

         3       the progress of clean coal technology, I can see

         4       the energy office and the Legislature at some

         5       time promoting the value of this resource.  I

         6       think coal has a place in our resource options

         7       and I expect that some time we will recognize

         8       that and be advocating it.  Personal opinion

         9       only, I know there is other opinions to the

        10       contrary.

        11                 It doesn't mean we need to advocate

        12       building coal plants in Idaho.  As you are aware,

        13       we have strong opposition to that, at least at

        14       this time.  But there is the alternative of

        15       moving electricity over high-voltage transmission

        16       line from those states supporting coal plant

        17       generation to the low centers in our state.

        18                 We also state in the energy policy that

        19       Idaho and Idaho utilities should work with the

        20       Idaho National Laboratory to investigate the

        21       feasibility of bringing next-generation nuclear

        22       facilities to Idaho.

        23                 Among other energy research and

        24       development activities, the Idaho National Lab is

        25 &n
bsp;     a partner in the Center for Advanced Energy

                                                                 15

         1       Studies and houses the Center's facility in Idaho

         2       Falls.  The Center's members, including Boise

         3       State University, Idaho State University, and the

         4       University of Idaho are also participating in the

         5       Governor's Idaho Strategic Energy Alliance.  The

         6       goal of the Alliance is to enable the development

         7       of a sound energy portfolio for Idaho that

         8       includes diverse energy resources and production

         9       methods that provides the highest value to the

        10       citizens of Idaho, that ensures quality

        11       stewardship of environmental resources, and

        12       functions as an effective secure and stable

        13       energy system.

        14                 This is the part of the program I

        15       missed.  I understand you had a discussion in one

        16       of your concurrent sessions this week.  I would

        17       have liked to have been there to hear that.

        18                 I believe the Alliance and the

        19       involvement of the Idaho National Lab and our

        20       universities in the Center for Advanced Energy

        21       Studies supports the Energy Plan's recommendation

        22       for working with the Idaho National Lab.  I

        23       expect their work to be significant, Paul.  I

        24       expect you to do good things, in pursuing

        25       resource strategy to meet Idaho's energy needs.

                                                                 16

         1                 Given that, let me spend a little time

         2       on what we already are doing in the resource

         3       acquisition arena — Linda, to answer some of

         4       your questions — to meet our needs in

         5       conformance with the Energy Plan, as well as some

         6       of the activities I think will be pursued this

         7       next session and the following session.

         8                 In this last session, we passed House

         9       Bill 422 that requires State buildings to be

        10       constructed at a minimum of 10 percent more

        11       energy efficiency than currently required by law

        12       in Idaho code.  The original bill required a 30

        13       percent level above current law, but in order to

        14       get the legislation passed, we had to compromise

 &nbs

NEW! Online only subscription. 24/7 access to premium online subscriber content for only $79.00 a year!
CLICK HERE TO SIGN UP TODAY!

Comments are closed.