NOTES FROM BOISE

The Interim Energy Committee met Sept. 2 to continue the development of draft legislation encouraging renewable electric energy development.

Included in the discussion, although not a renewable resource, was a relatively new electric energy issue for our state. Sempra Energy Resources is considering construction of a 750-megawatt generation plant fueled by low sulfur coal. The coal would be obtained from Montana and Wyoming sources and delivered to the generation site by rail.

A feasibility study is under way and is expected to be completed next year. The plant would be located in the Glenns Ferry area and through interconnection with Idaho Power's electric transmission system would serve electric loads in Idaho and other Northwest states.

The plant would be built and operated using the latest "state of the art" technology and would represent a substantial investment, requiring in excess of one billion dollars to build. One thousand construction employees would be required to build the plant and operation and maintenance of the plant would employ 100 permanent employees

Sales tax paid on machinery and other equipment for the plant would be in excess of $30 million and more than $12 million would be paid annually in property taxes. The plant would generate another $12 million in state tax revenue.

Coal-fired electric generation has advantages in both long-term supply and price stability. The price of coal is lower then natural gas and the cost is expected to be more stable then gas.

As with any other electric generation resource however, coal also has its particular disadvantages. The plant would require 9,500 acre feet of water for cooling in an area where water supply is already an issue and some will express concerns relative to air quality impacts in the area created by plant emissions.

The remainder of the energy committee meeting was devoted to the renewable energy issue, specifically the use of tax incentives to promote construction of renewable energy resources.

As I have mentioned in a previous article, the governor vetoed the two renewable electric energy bills passed last session by the Legislature. These bills provided a production tax credit and additional investment tax credit for renewable energy development.

There is still considerable support for reintroduction of these two bills in the upcoming legislative session. In addition there was a large amount of support voiced by renewable energy developers for a sales tax exemption for new generation equipment required for renewable energy facilities.

The developers stated that the surrounding states of Washington, Oregon and Montana have no sales tax or have a sales tax exemption for renewable energy projects, thus creating a competitive disadvantage in locating projects in Idaho.

Some committee members however, expressed concern over a sales tax exemption given the number of exemptions already in place. Other committee members in response to this concern noted that if competition from other states does deter construction in Idaho then additional sales tax would not be realized anyway; in addition we would lose potential property tax revenue, state income tax revenue and the loss of new jobs provided by renewable energy development.

The meeting concluded with agreement by committee members that three renewable energy bills would be drafted for consideration at the next meeting. The three bills would be based on the use of three different tax incentive measures; one would include an investment tax credit, the second a production tax credit and the third a sales tax exemption. Based on input received prior to and during the next meeting from the Governor's office, developers and other interested parties, the committee will determine what bills, if any, would be presented for consideration in the upcoming legislative session.

Prior to the next meeting, in addition to input from other sources, I would especially welcome input from readers of this article on the issue of providing tax incentives to promote renewable electric energy development. My home phone and home mailing address is noted at the end of this article.

This edition of the Journal will be published as we are entering the heat of this year's election campaign by those seeking public office. Recognizing this, I end this article with the following quote from Norman Cousins:

"In a democracy, the individual enjoys not only the ultimate power but carries the ultimate responsibility."

During the next two months before election, I encourage all to learn about your local, state and national candidates and then, armed with this knowledge, exercise your right to vote in November.

Thanks for reading and please feel free to contact me anytime with your issues and concerns. My home phone is 265-0123 and my home mailing address is P.O. Box 112, Dover, 83825.