Future of Idaho tax rebate for wind power in limbo
By JOHN MILLER, Associated Press

BOISE, Idaho (AP) — The future of Idaho's sales tax rebate for wind power developers remains in limbo, with a skeptical Republican lawmaker aiming to scuttle a deal that industry and utilities worked out Friday.

Rep. Ken Roberts of Donnelly played spoiler Monday in the House Revenue and Taxation Committee by introducing a measure to extend the 6 percent sales tax rebate on qualifying purchases by geothermal, low-impact hydro, biomass and landfill gas projects until 2014, but not for wind. Robert's bill is now competing with a separate measure, developed in talks between utilities, wind developers and their lobbyists last week, to give the rebate to wind projects, too, provided they can secure power contracts with utilities by Oct. 31.

On one side of this debate, utilities Idaho Power Co., Rocky Mountain Power and Avista Corp. complain the proliferation of wind power in Idaho is boosting their customers' rates, and they argue federal tax incentives are already so generous that wind developers will build their projects in Idaho even if the sales tax rebate goes away.

On the other are industrial-scale wind farms who say utilities are misleading the public to protect their electrical generation monopoly — and pad shareholders' profits. Wind developers including Ridgeline Energy say losing the rebate will deal a deathblow to the industry in Idaho.

So far, Roberts said, nobody has adequately explained to him just who is right.

"If we're incentivizing a type of intermittent energy to be on our grid and it's adding to the costs of ratepayers, then I think we need to take a second look at what we're doing," Roberts said.

With hearings on both bills set for Wednesday, the House committee's members might expect technical help from the state's electricity regulator, the Idaho Public Utilities Commission. But Rep. Dennis Lake, R-Blackfoot and the Revenue and Taxation Committee chairman, decided against having somebody from the PUC testify.

The state agency fears an appearance on what's become one of the most politically charged issues of the 2011 Legislature could undermine its regulatory independence.

For instance, some of the complex issues in front of the Legislature are currently pending in front of the PUC.

"To have them before a committee in a political setting could create some problems," Lake said.

But his decision didn't sit well with some committee members like Rep. Grant Burgoyne, D-Boise, who suggested citizen legislators are ill-equipped to set complex tax policy that drives the state's energy policy if the Public Utilities Commission experts aren't there to provide technical assistance.

"I appreciate the PUC's reticence," Burgoyne said. "But in the Judiciary and Rules Committee, a committee on which I also serve, we routinely hear from (judges). It seems to me that the PUC has unique factual information that is unrelated to its quasi-judicial" duties.

Gene Fadness, a spokesman for the PUC, didn't immediately return a phone call seeking comment.

Conservation groups watching this unfolding drama say there's one clear loser, regardless of which bills survives: Idaho's fledgling solar power industry.

Roberts' bill ends the rebate for solar developers, while the compromise bill hashed out between wind developers and utilities slashes by 100 times the wattage of future solar projects that could qualify for an attractive, state-mandated rate for their power, a concession demanded by utilities.

Ben Otto, an Idaho Conservation League lobbyist, said solar was "thrown under the bus" because it lacks the lobbying muscle that's allowed Idaho's wind developers to go toe-to-toe with utilities to divide up the spoils.

"Like any industry, it takes time for them to develop the lobbying power," Otto said.

Copyright 2011 The Associated Press.on both measures is set for Wednesday.