Idaho bill would aid city power planning

BOISE – Idaho cities that provide electric service may gain access to new, longer-term contracts that allow them to avoid volatile market fluctuations if lawmakers pass a bill introduced Thursday by a North Idaho representative.

The legislation would allow city-owned electric utilities, such as those run by Bonners Ferry and Plummer, to sign potential capacity-use contracts with the Bonneville Power Administration and part-ownership contracts with private utilities to secure lower power rates. Under existing law, cities may lack authority to enter such agreements, the Idaho Supreme Court has ruled.

The change is essential to allow cities to plan for their future energy needs, bill sponsor Rep. George Eskridge, R-Dover, told fellow members of the House Environment, Energy and Technology Committee.

The BPA, a predominate supplier for many city utilities, has proposed new 20-year “take-or-pay” contracts that would require cities to determine how much power they will use in advance and pay extra for additional power.

Whether the BPA will offer those contracts, which would take effect post-2011, will not be finalized until late spring or early summer, said BPA spokesman Mike Hansen.

“Without this bill, Idaho’s cities’ ability to enter into these contracts is in doubt, and it interrupts and puts into jeopardy their ability to supply the needs of their citizens,” Eskridge said.

Currently, city-owned utilities buy fluctuating amounts of power from the BPA and other providers to meet their seasonal needs, said Ron Williams, an attorney for the Idaho Consumer-Owned Utilities Association. Present BPA contracts last five years.

But the BPA’s proposed contracts would require cities to pay for a pre-determined amount of power regardless of its output, Williams said.

The state’s Supreme Court ruled in Asson v. City of Burley in 1983 that Idaho law may not give cities power to purchase capacity or enter jointly owned energy projects.

Cities have been struggling with the ruling ever since, Williams said, but they acted now because the BPA and other providers are transitioning toward longer contracts.

The proposed legislation resolves that legal ambiguity and “clearly and unequivocally” gives city-owned utilities ability to enter the new contracts, Eskridge said. It contains an emergency clause, meaning it would take effect immediately if passed.

City-owned utilities could pay for construction and operation of joint electric facilities through bonds, the proposed bill states.

If the bill passes, it will not affect privately-owned cooperatives such as Northern Lights, a member-owned electric utility in North Idaho.

The 20-year contracts would prevent customers with steady power use from subsidizing the price of power for users with expanding needs, helping stem a “slow creep” upward in prices, Hansen said.

“It allows people to start making long-term decisions about where they are going to get their resources,” Hansen said.

Rep. Eric Anderson, R-Priest River, said cities “must be able to finance new generation” and that the bill will help them do so.

Eskridge expects “full support” for the bill, which was written with input from private utilities, he said.

The ICUA represents 21 of Idaho’s rural electric cooperatives and cities, nine of which are city-owned, according to its Web site.