OER looks for new funding

BOISE (AP) - Idaho's state energy office is running out of cash because geothermal leasing royalties never materialized and federal stimulus cash it's relied on since 2009 is drying up.

Among possibilities discussed to cover the Office of Energy Resources' expenses: a surcharge on Idaho utility customers' power bills.

Director John Chatburn has been told by the governor to pursue other funding options, while lawmakers said the agency is facing serious questions about its future.

"No. 1, are we going to continue?" said Rep. George Eskridge, Republican co-chairman of the Legislature's Energy, Environment & Technology interim committee. "I don't think we'll find any support for doing it through" general taxpayer funds.

In the 2012 session, behind-the-scenes discussions included an addition to Idaho residents' power bills, Eskridge said.

Chatburn said nothing's decided.

"The governor just asked me to have a conversation with utility, industry and other stakeholders," he told The Associated Press. "We're looking for creative solutions. I think it's safe to say, everyone anticipated there would be substantially more geothermal development than we've seen."

Renewables incentives are ending, and Idaho is awash in cheap electricity as natural gas prices are low and the economy stutters along.

A 2007 auction of BLM geothermal leases in Idaho brought in $5.7 million; the last BLM auction in 2011 reaped just $53,000.

"The whole federal leasing program peaked quickly and has pretty much faded away as a source of revenue for the BLM and state governments," said Doug Glaspey, U.S. Geothermal's president and chief operating officer. "There's no quick fortune in geothermal."

Absent geothermal money, some Idaho utilities are decidedly cool about asking customers to pay the Office of Energy Resources' way.

"Why should utility customers pay a surcharge to support a state agency that has operated primarily on federal funding up to this point?" Rocky Mountain Power spokesman Jeff Hymas said.

Rocky Mountain Power, with customers in southeastern Idaho, is already a member of the Idaho Strategic Energy Alliance, the group Gov. C.L. "Butch" Otter created in 2010 to give him policy advice on energy production, energy efficiency and the energy-related economy. Consequently, Hymas suggested that asking its customers to pay for a state energy office with similar objectives might be duplicative.

One sign of the Office of Energy Resources' uncertain future was last year's surprise departure of its administrator, Paul Kjellander.

In 2007, Otter elevated Kjellander from the Public Utilities Commission to be his new energy czar, to oversee a newly independent office being moved from its decades-old, low-profile quarters at the Office of Water Resources. Kjellander and Otter foresaw a grand role in helping set Idaho energy policy, guiding transmission lines and even spurring nuclear power.

When the recession hit, however, the Office of Energy Resource became largely a conduit for President Barack Obama's American Reinvestment and Recovery Act money, with its 18 staffers helping direct some $40 million at projects including energy efficiency upgrades for government and public school buildings.

With that money due to run out, Kjellander made his exit in March 2011, with the governor sending him back to his old Public Utilities Commission position.

Kjellander didn't return a phone call Friday.

Rep. Wendy Jaquet, D-Ketchum, appreciated the Office of Energy Resource's backing for one of her bills, passed by the 2012 Legislature to expand a state income tax deduction for homeowners who make energy efficiency upgrades.

But too often, Jaquet contends, the agency's leadership has fallen short of playing a strong policy role in shaping Idaho's energy future, in particular with renewables. For instance, in 2008, the office disbanded Idaho's wind-power think tank and reassigned staff.

"The office is necessary, but I think it's not being used," Jaquet said. "I think it should be a gubernatorial policy to be a leader in energy development in our state. It's a disappointment."

Otter's office didn't return a call seeking comment.