May 2004 Newsletter

Wind-energy bills vetoed, but backers not giving up

Monday, April 12, 2004
By Ben Botkin, Idaho Falls Post Register

Legislation that would have encouraged the spread of wind energy in Idaho met stiff resistance at Gov. Dirk Kempthorne's desk.

The governor recently vetoed two bills that would have provided tax credits to wind-energy developers and given an incentive for encouraging alternative power sources. Developers say those bills would have helped make the state a stronger player in the alternative energy market but that wind companies in Idaho need a sales tax exemption to stay competitive.

Developers and utility companies see the moving air masses in Idaho as an unlimited power resource without greenhouse gas emissions or dependency on foreign oil. The American Wind Energy Association ranks Idaho as having the 13th highest wind potential in the nation, and two utility-scale wind farms are planned for the region.

But developers say Idaho is at a competitive disadvantage. Wind-farm equipment costs 6 percent more here because of the state sales taxes. The states bordering Idaho offer sales tax exemptions on the equipment used to build wind farms, providing lower construction costs to developers building outside the Gem State.

A bill that would provide the sales tax exemption did not get out of a legislative committee for a vote this year, but developers and lawmakers hope the next session will result in legislation that encourages wind-energy projects in Idaho.

"We're just going to continue and try," said Rich Rayhill, vice president of Ridgeline Energy. "We continue to hope for a sales tax exemption."

Rayhill's company is planning a 100- to 200-megawatt wind farm with Airtricity Inc. If built, it will straddle the border of Bonneville and Bingham counties east of Shelley and Idaho Falls.

But before he can build the turbines, Rayhill needs the financial backing of an energy contract. As a result, Idaho's sales tax puts his recent bid with PacifiCorp at a disadvantage compared with offers from outside Idaho.

The issue hasn't been discussed at the governor's level, but that doesn't mean it won't be a future possibility, said Mike Journee, Kempthorne's spokesman.

As for this year's vetoed legislation, Journee said it was because of the state's tight budget.

"It really had nothing to do with the idea of green energy," he said.

Sen. Brent Hill, R-Rexburg, said he was disappointed with the rejection but is optimistic for the future.

Hill, co-chairman of the energy interim committee, said it's too early to say what will be up for a vote in the next session. He hopes to meet with the governor and talk about the possibilities, which may include sales tax exemptions.

"I feel like we need to get in touch with the governor's office and see where to go," he said.

Did you know?

* The Ridgeline wind-energy farm would be a 100- to 200-megawatt project, and Idaho has the potential to continuously produce 8,290 megawatts from the state's wind.

* The Ridgeline project is enough to continuously power 60,000 to 80,000 homes.

* Idaho is ranked as the 13th highest state in wind-energy potential.

* Surrounding states offering sales tax exemptions to wind developers include Utah, Wyoming, Nevada, Washington and Oregon. There is no exemption in Montana because it has no sales tax.