20070423_1906.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:BRYAN LANSPERY
DATE:APRIL 20, 2007
RE:ROCKY MOUNTAIN POWER TARIFF ADVICE NO. 07-04;
BLUE SKY OPTION PROGRAM
Rocky Mountain Power (RMP; Company) has submitted a number of revisions to
Schedules 70 and 73 , which pertain to RMP's Blue Sky option program (Blue Sky; Program).
Blue Sky refers to the Company s optional offerings to residential and commercial customers
within its 6 state jurisdiction to purchase blocks of renewable energy above their own energy
usage and demand. Blue Sky was initially approved by the Commission in Order No. 29329
creating Schedule 70. See Case No. P AC-03-9. RMP expanded the program to provide larger
customers the option to participate at a reduced rate with minimum block purchase requirements.
See Case No. P AC-05-, Order No. 29765. The current Application does not introduce any
substantive changes to Blue Sky that would require additional filings beyond what the Company
has submitted in this tariff advice.
RPM proposes changing the titles of the 2 schedules to 'Renewable Energy Rider-
Optional' to reflect the expanded nature of the Program. This reflects RPM's efforts to adhere to
General Commitment 23 from Case No. PAC-05-
, "
modifying the tariff to reflect the
developing green power market and by monitoring national certification standards." Along those
lines, the Company proposes to add a section in the Schedules to expand its definition of
renewable energy to include certified low impact hydroelectric, biomass energy, among other
recognized renewable sources. Staffhas reviewed the guidelines for purchasing green power set
forth by the EP A and DOE and finds that the Company s proposed modifications are in
conformance with national standards.
DECISION MEMORANDUM APRIL 20, 2007
Additional amendments to the tariff relate to the purchase of Renewable Energy Credits
(RECs), the environmental attributes associated with renewable power production, and a
commitment to use Blue Sky funds to support "new renewable energy . RMP defines new
renewable facilities as those either placed in operation or those that have undergone significant
enhancement on or after January 28 2007. Staff notes that RMP retires, or removes the REC
from any marketable opportunity when purchased with Blue Sky funds, maintaining the intent of
the Program. While RECs can serve as a source of revenue for the Company and may
potentially offset some costs associated with Blue Sky, Staff supports the Company s position
with regards to the intent of the Program. RECs derived through the Company s normal
operations are unaffected by the Program.
Of the changes to the schedules, the most substantive is the inclusion of funding for
qualifying initiatives through the Program. As explained in the added section ' Administration
Blue Sky funds received beyond the matching renewable energy purchases and Program costs
will be used to fund renewable energy initiatives within the Company s service territory. The
new language sets forth the terms of qualifying initiatives. Perspective recipients can get details
of the eligibility and screening criteria from the Company s website. Staff notes that RMP may
claim a share of the RECs created from these initiatives commensurate with the financial
contribution made, along with the opportunity to purchase additional RECs from the project.
Again, the RECs claimed by the Company through sponsored initiatives will also be retired.
Staff supports RMP's investment of surplus Blue Sky funds into local qualifying
initiatives. One noteworthy area of funding the Company proposes is in research and
development projects encouraging renewable energy market transformation and technologies.
The relatively high cost of renewable technologies has often been cited as the main impediment
to greater penetration levels of renewable proj ects. RMP, and MidAmerican Energy Holdings in
general, appear to be committed to address this issue now rather than be idle until it is forced into
a position to react to the growing demand, both locally and nationally, for green power.
Staff recommends one modification to the proposed tariff language. In both schedules
under 'Qualifying Initiatives , point 4 (Sheet Nos. 70.3 and 73.3), there appears to be a redundant
sentence. Staff recommends that RMP strike the final sentence, that reads
, "
The Company will
also be given the opportunity to purchase additional RECs off the project", as it appears two
sentences prior in the paragraph.
DECISION MEMORANDUM APRIL 20, 2007
STAFF RECOMMENDATION
Staff recommends striking the last sentence of Qualifying Initiatives, point 4. With that
revision, Staff recommends approval of this Application.
COMMISSION DECISION
Does the Commission wish to approve the Company s Application?
i:udmemos/adv 07 02 ipc
DECISION MEMORANDUM APRIL 20, 2007