United States

United States

New legislation for stalled state -- Idaho's wind friendly laws

Two new laws on Idaho's books should pave the way for landowners to bring more wind power to a state that has been stalled at 75 MW since 2005. One law moves wind farms from property tax to production tax lists, meaning that operators will be assessed for output rather than equipment. The other law will increase the length of state land leases related to wind generation from ten to 49 years.

The bills breezed through both legislative houses unopposed and were signed into law in March. "What's interesting is that they went through the House and Senate unanimously," says Stephen Voorhees of Seattle-based Ridgeline Energy, which has 47 wind projects in its development portfolio, including eight in Idaho. "It's indicative of how earnest the people and the legislature are about getting renewables going in Idaho. It's significant because the wind resource in Idaho is certainly there."

The old laws meant that land leases did not extend past the halfway point of most projects, which were essentially assessed a sales tax on equipment, rather than depreciated over time. A typical result saw Ridgeline build a project in Oregon and move the power into Idaho simply because of the tax structure. "Now we're going full bore to get power purchase agreements in Idaho," says Ridgeline's Rich Rayhill. "Both pieces of legislation will be very beneficial in that hunt. You can't build without a power purchase agreement and it's a super-competitive environment out there right now. Anything you can do to give yourself an edge over competitors in surrounding states is likely to benefit local development."

State's Largest

Ridgeline developed Idaho's largest wind project, Goshen I, then sold the 65 MW project to Invenergy, which built it and renamed it Wolverine Creek. Now Ridgeline is developing the project's 90 MW second phase, Goshen II, a joint venture with BP. It is planned for completion this year or next. If a third phase gets off the drawing board, the Goshen development's grand total could reach 280 MW.

According to Voorhees, there is potential to develop 3000 MW of wind energy in Idaho over the next ten years, representing a capital investments in excess of $5 billion. He expects the state to make the transition from a net importer of power to a net exporter. Idaho, with nearly 1.5 million people, ranks as the 13th windiest state.

enthusiasm

The new tax legislation is retroactive to January 1, while the land law goes into effect July 1. "If legislation happens in Idaho regarding renewables, we're the ones who write it," says Rayhill. "I'm not a legislator, but the enthusiasm of the Idaho policymakers makes my job a lot easier. This is great for the state from a rural economic growth standpoint. The bonus is that the royalties will go directly to Idaho kids," he says, referring to taxation of wind farms benefiting local government tax rolls. In January, Rayhill received the governor's renewable energy award in recognition of contributions to the growth of wind energy in Idaho.

"The farmers see these windmills as another product and the counties see a stronger stream of revenue," says Idaho State Representative George Eskridge. "These laws put us on an even playing field, make us competitive with other states and allow more revenue and employment opportunities. Wind energy is a product we can develop within the state borders and it makes us less dependent on coal."

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