As it turns 100 this year, Idaho Power and its 520,000 customers rely increasingly upon power from the sun, wind and natural gas. The company is intrigued by the prospect of powering electric cars like those planned by Tesla.
CEO Darrel T. Anderson spoke in December to a Boise Metro Chamber of Commerce audience about his company’s evolution, its carbon footprint, its new use of drones and the possibility of vehicle-charging stations.
His comments are condensed from a transcript prepared by the chamber’s public relations director, Caroline Merritt.
THE ROOTS OF TODAY’S COMPANY
The first electric lights were in Hailey. It wasn’t really until July 4, 1887 that lights showed up in Boise. Once that showed up, what you saw is a whole lot of entrepreneurs saying, “Hey, I think I want to get a piece of this business. This looks like it’s going to take off.”
There wasn’t really regulation at the time. There were about 50 companies trying to provide electric service to a small number of customers in what is now our geographic footprint. Over the years, that shrank to 19, because a lot of those companies ended up falling upon some financial hardships, and because everyone was trying to string power poles. You had power poles running everywhere.
About 1915, five companies that were sort of waning started talking about “How can we put this business together and make it go?” By 1916, Idaho Power was formed, the consolidation of these five.
Swan Falls, outside of Kuna, was the first Idaho electric facility along the Snake River, in 1901. It was built to supply energy to the mines in Silver City. [It became]the nexus of our water rights today that allow us to continue hydro generation on the Snake.
In the ’20s, ’30s, and ’40s, the sense was, “The area is starting to grow, and we need a new generating source.” The leadership then at Idaho Power started looking at developing resources. What you ended up with is a three-dam complex down in Hells Canyon area that provides about 1,200 megawatts today, which helps keep the prices for our customers down. We’re in the process of relicensing that project.
After Hells Canyon, the economy continued to grow, irrigation continued to grow, so we need a new resource. The fuel, at the time, of choice was coal. There was a battle royale with respect to a coal plant just south of Boise in the 1970s called the Pioneer Plant.
The company lost that battle in a big way. There was a three-county vote. Elmore County voted something like 80 percent down. Ada County and Canyon County voted like 50 to 60 percent against that project.
The company ended up partnering with some others with respect to power plants in Wyoming, Nevada, and Oregon.
Fast-forward to now. In 2012, we christened Langley Gulch, by New Plymouth. If you follow natural gas prices, you know the timing actually couldn’t have been better. It’s been a great project.
Some of you probably know there has been some exploration out in western Idaho, and they found some natural gas reserves out there. Alta Mesa’s been producing that gas. It’s not a lot now, but it’s some, and we have the opportunity to take that gas into the pipeline. It’s located really close to that plant.
WE WANT RENEWABLES, BUT
We’ve also seen an increase in the amount of renewables in our state, solar, wind, geothermal. And you are probably also aware that we were right on the tip of the spear in a recent battle in reducing contracts for these types of projects under a federal law, PURPA.
Some would say we were fighting renewables because we didn’t like them. That’s not the case at all. We believe that renewables are an important part of a balanced portfolio.
The problem is, if you go to an all-renewables portfolio, what’s going to provide your energy source if the sun’s not shining and the wind‘s not blowing?
Storage isn’t where it needs to be today. It’s very expensive. We were pushing back on these projects, primarily because we are trying to manage the portfolio to the lowest-cost level, while, at the same time, not going out and acquiring resources we don’t need, because we have adequate resources today.
At the end of 2016, we will have over 1,000 megawatts of solar and wind projects on our system. Our peak load on a hot summer today is about 3,400 megawatts. So almost a third of that is those types of renewable resources.
If you add our hydro resource, over 1,700 megawatts, the combination of those two is 2,700 megawatts of what I would call renewable resources. Far and away a higher percentage than anybody out there in the country.
Some people don’t want to call hydro renewable. We believe it’s a green resource. So we believe our customers are supporting renewables in a big way.
POWER AS CHEAP AS A CENTURY AGO
[Anderson shows a slide:] This is an old bill from a customer over on Bannock Street. This person consumed 9 kilowatt hours. They paid about a dollar — a little over 10 cents a kilowatt hour. In 1914.
Does anybody know what you are paying today? If you are an average residential customer? You’re paying about 8.5 cents. You aren’t using 9 kilowatt hours today. Most of you guys are using 1,200 to 1,500 kilowatt hours, some of you more maybe in the summer time.
We are pretty proud of the fact that we work really hard to try keep the price down. We think that that’s a huge part of the challenge we do, being a regulated utility company.
One of the things that we find is that our customer satisfaction is generally limited to how much time you have left on your cell phone battery, if the power is out.
Darrel T. Anderson
CLIMATE-CHANGE PLAN WENT WELL
We got national regulations suggesting that as a country we reduce our carbon footprint by 2030 by close to 30 percent from 2005 levels. The good news with the Clean Power Plan that came out not too long ago, Idaho came out pretty good.
I would like our company to take some credit for it with the Office of Energy Resources, because we pointed out some flaws in the proposed regulations that would have had a negative impact on Idaho. The EPA listened, and they modified at least the rules for Idaho, so Idaho will probably come out OK, no big issues.
We have only two big carbon-emitting plants in the state: our Langley Gulch Power Plant and the Rathdrum gas plant up in northern Idaho. We have no coal plants in Idaho. So that makes our target a little easier.
We still import some coal-based resources from Wyoming, Nevada and Oregon. Oregon’s plant is scheduled to shut down in 2020. So the challenge we see on the horizon is going to be: Wyoming, because we have the third interest in a power plant in Wyoming; and a 50 percent interest in a plant in Nevada.
NEW: DRONES TO MONITOR FISH
We have started some unmanned drone usage, and one of the things that has been really good, is that we use drones to survey the salmon redds [spawning nests] along the Snake River. We have historically done that with airplanes and helicopters, and if you have been in the Hells Canyon area down through there, it can be pretty dangerous. This is a lot safer, and we get as good a read-out on the camera.
We might use [drones] to patrol some power lines.
OPPORTUNITY IN ELECTRIC VEHICLES
We believe that one of the things we need to be looking at is electric vehicles. The No. 2 emitter of carbon in the country is transportation.
We took a team down to Tesla last week to see how might we partner with them . They’re making a big play on the electric vehicle side, and they are also doing a big play into battery storage.
We were looking at what’s going on in the electric vehicle side. While they do high end vehicles today, their whole vision is a mass-marketed electric vehicle. In 2017 their plan is to put out a $40,000 base-price vehicle that will not necessarily have all the bells and whistles as their high-end vehicles, but will have some of the same performance characteristics.
If you had an electric vehicle using our power prices, you’re going to pay about 95 cents a gallon, depending on vehicle and some other things. Think about $2 gas prices today. It wasn’t that long ago that they were $4. There is opportunity for people to seriously consider electric vehicles.
And our role in that is: How can we ensure that there is an infrastructure out there that people don’t get range anxiety, so they can go somewhere and figure, “How am I going to get home?” Think about how many miles you really put on every day. If you had a car that could make a 220-, 240-mile range, and you can pay 95 cents a gallon for fuel, is that something you might consider?
Stay tuned to Tesla.
This story appears in the Jan. 20-Feb. 16, 2016, edition of the Idaho Statesman’s Business Insider magazine.