Bringing the Economy Home

After The Wind Boom, A Fight Over Idaho’s Energy Future

Molly Messick / StateImpact Idaho

The wind farm on Edith and Richard Kopp's land was completed last year.

If you look at a map of where wind development has taken off in Idaho, you’ll notice an area near American Falls. There, in the rolling agricultural land of southeast Idaho, Edith Kopp stands on a high hillside.  She gazes out with satisfaction at more than a dozen turbines, turning steadily.

“This is a pretty constant wind,” she says.  “They’re all going!”

Kopp and her husband, Richard, have spent their lives right here, farming grain.  For decades, they’ve planted in spring and harvested in summer.  They’ve tallied profits and losses as winter sets in.  The years have been marked by anxiety, and hope.

“Hopefully at the end of the year when you sell your crop, there will be something left for you,” Kopp explains.  “In 33 years of marriage there’s been several of those years when there wasn’t anything left for us.”

She pauses, and then says, “This is the first time we’ve ever had a steady income.”

That income is thanks to wind turbines like the one that towers above us. A wind developer owns it, but the Kopps own this land.  To them, the turbines mean royalty payments for the rest of their lives.

Molly Messick / StateImpact Idaho

This billboard and others near American Falls are one measure of how sentiment has turned against wind development.

Wind development has taken off in Idaho.  In four years, 30 wind projects were approved in the state.  Before then, Idaho had just one wind farm.  Now, legislators and the state’s utilities are pumping the brakes.

The Kopp’s story is the kind wind developers love to tout: here in Idaho, clean and renewable wind energy is sustaining rural communities.  But you don’t have to go far to get a very different take on wind development.

On the roadside, on the way out of American Falls, there’s a billboard that reads, “swindle.”  The letters w-i-n-d, spelling “wind,” are in red.  Then the sign reads, “Not cheap.  Not clean.  Not for Idaho.”

It’s one of several nearby.  They’re sponsored by a local anti-wind group called the Energy Integrity Project, and they aren’t the only opposition the industry has faced here.  There have been objections about spoiled landscapes and preferential tax policy.  A proposed moratorium on wind development has won support from prominent legislators.  Then there’s Idaho Power’s campaign. Through TV ads and leaflets, the state’s largest utility has worked to spread a simple message: wind power drives up electricity prices.

So what’s going on here?  Why did Idaho welcome wind and then turn a cold shoulder?  The answer is the story behind the story of Edith and Richard Kopp’s wind turbines.  And it has to do with a federal law you’ve probably never heard of: the Public Utility Regulatory Policies Act of 1978, also known as PURPA.

“Congress, when it passed PURPA, their goal was essentially national security,” explains Peter Richardson, who practices energy and utility law in Boise.

Here’s the context: it’s the late 70s, and there’s an energy crisis.  Government wants to encourage independent power production, but there’s a problem.  The utilities control electricity generation.  They’re monopolies.  They don’t want to distribute power they don’t produce.  So, here’s what PURPA does: it makes utilities accept power from small, independent projects.  They don’t have a choice.

Now, fast-forward 30 years.  There’s anxiety about climate change and job creation.  Congress passes a tax credit for renewable energy production.  Idaho passes a property tax exemption for wind producers.  At the same time, wind turbines become a lot cheaper.  Plus, PURPA is still there, telling utilities they have to accept power from small, independent producers.  Wind developers rush into Idaho, catching the state off-guard.  And that brings us to today.

“The utilities are using this accident,” Richardson says, “this perfect storm, that allowed for a very large amount of wind to be developed to put the kibosh on all PURPA projects.”

Richardson represents many wind developers, and this is his view: that the utilities are trying to dismantle the mechanism that forces them to accept energy from small, independent projects.  He says the utilities want to protect their market power, and their profits.  No surprise, the utilities don’t see it that way.  Mark Stokes is the manager of power supply planning for Idaho Power.

“I would not characterize it as us trying to dismantle PURPA,” says Mark Stokes, the manager of power supply planning for Idaho Power.  “We are just trying to get the rates that we pay for this energy through these contracts to be a fair rate, so that our customers aren’t harmed.”

Idaho Power has a couple of arguments.  First, wind doesn’t always blow, and turbines don’t always turn.  For utilities, that varying supply can be hard to accommodate.  Sometimes, Stokes says, Idaho Power winds up with way more energy than it needs.

“We end up having to turn around and sell that energy back into the market, because it’s surplus,” Stokes says.  “We end up taking a big loss on that, which ultimately ends up impacting the rates of our customers.”

Stokes and Richardson don’t agree about much, but they both say one key thing.  There’s a rate – set by the Idaho Public Utilities Commission – that dictates how much utilities pay for the independent power they have to accept.  Stokes and Richardson say that rate may, for a time, have been set too high.  In other words, when wind developers looked around to see where they should build projects, they saw a special deal in Idaho.

The utilities want a lot of changes to the way PURPA works in the state.  Those include shorter contracts with independent energy producers, and a different way to calculate rates.

Richardson says the utilities’ proposals would shut wind developers out of the state.  “Instead of turning the spigot on and off to allow new development when it’s needed, they’re basically blowing up the well!” he says.

These arguments are currently before the Public Utilities Commission, which is expected to rule next month.  The Federal Energy Regulatory Commission has already weighed in on one aspect of the case, coming down in favor of the wind industry.

What can we take away from all of this?  Let’s hear from one more person: Ben Otto, of the Idaho Conservation League.  He’s a fan of clean energy, but he says Idaho hasn’t approached it in the right way.

“Business is just reacting naturally to what is placed before them,” he says.  He imitates an old-fashioned ad man. “’Here’s a very lucrative thing, and it’s a limited-time offer!  Get it now, before we’re out!'”  And that’s because Idaho doesn’t have much of an energy plan, Otto says.

The state does have a document called the Idaho Energy Plan, but Otto and other experts say it has little weight.  Otto believes that leaves the state in a binge-and-purge cycle.  “When the incentives are hot, everybody comes in,” he explains.  “When the incentives go down, everybody leaves.”

A federal tax credit for wind power is set to expire in December, making this particular cycle even more dramatic.

Now let’s think back to the start of the story and to Edith Kopp, standing under a turbine on a hillside near American Falls.  Why did Idaho welcome wind farms, and then change its tune?  The answer is complicated.  It’s about state and federal policy, and businesses looking for profit.  And it’s a case study in unintended consequences.


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