20120217IPC to Exergy 1-7.pdf

RECE
'4IDA~POR(I
DONOVAN E. WALKER
Lead Counsel
dwalker~idahopower.com
An IDACORP Company
February 17,2012
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. GNR-E-11-03
IN THE MATTER OF THE COMMISSION'S REVIEW OF PURPA QF
CONTRACT PROVISIONS INCLUDING THE SURROGATE AVOIDED
RESOURCE (SAR) AND INTEGRA TED RESOURCE PLANNING (lRP)
METHODOLOGIES FOR CALCULATING PUBLISHED AVOIDED COST
RATES
Dear Ms. Jewell:
Enclosed for filng please find an original and three (3) copies of Idaho Power
Company's Response to the First Production Request of Exergy Development Group of
Idaho ("Exergy") to Idaho Power Company in the above matter.
Also enclosed in a separate envelope are four (4) copies of confidential information
provided in response to Exergy's First Production Request. Please handle the confidential
information in accordance with the Protective Agreement executed in this matter.
Very truly yours,~¿W~
Donovan E. Walker
DEW:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
DONOVAN E. WALKER (ISB No. 5921)
JASON B. WILLIAMS (ISB No. 8718)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalkerCâidahopower.com
jwilliamsCâidahopower.com
Attorneys for Idaho Power Company
o i:Ci= 'i' \!t: D'I\~ ;¡. "".-
2DI2 FEB I ì PH~: 31
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE )
COMMISSION'S REVIEW OF PURPA QF )
CONTRACT PROVISIONS INCLUDING )
THE SURROGATE AVOIDED )
RESOURCE (SAR) AND INTEGRATED )
RESOURCE PLANNING (IRP) )
METHODOLOGIES FOR CALCULATING )
PUBLISHED AVOIDED COST RATES. )
)
)
CASE NO. GNR-E-11-03
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
EXERGY DEVELOPMENT GROUP
OF IDAHO TO IDAHO POWER
COMPANY
COMES NOW, Idaho Power Company ("Idaho Powet' or "Company"), and in
response to the First Production Request of Exergy Development Group of Idaho
("Exergy") to Idaho Power Company dated February 1, 2012, herewith submits the
following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 1
REQUEST FOR PRODUCTION NO.1: At page 14 of her prefiled direct
testimony Ms. Grow states, "Idaho Power understands that the Idaho Legislature . . .
may be considering proposed legislation that would address the ownership of RECs
from PURPA QF projects, and thus the Company has no specific request of the
Commission in this regard at this time." Please provide all documents in Idaho Powets
possession relating in any way to said "proposed legislation" including any copies or
drafts of the same, correspondence, notes, memos and email correspondence.
RESPONSE TO REQUEST FOR PRODUCTION NO.1: Idaho Power objects to
this Request on the grounds of relevance. The Direct Testimony of Lisa A. Grow
submitted in this proceeding specifically states, ". . . the Company has no specific
request of the Commission in this regard (Le., related to RECs) at this time." Grow
Testimony at p. 14, 11. 6-8. Since Idaho Power has no specific request regarding
Renewable Energy Credits/Certificates ("RECs") in this proceeding at this time,
questions related to RECs are irrelevant and beyond the scope of this docket.
Idaho Power further objects to this Request as it is overly broad and would be
unduly burdensome for the Company to provide the information requested.
In addition, some of the requested material is or may be privileged and protected
by the attorney-client privilege as well as the attorney-work product doctrine.
Notwithstanding and without waiving these objections, please see the Company's
response to Exergy's Request for Production NO.5 below.
The response to this Request was prepared by Donovan E. Walker, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 2
REQUEST FOR PRODUCTION NO.2: Please provide copies of all documents
related to Idaho Powets acquisition of RECs from existing or proposed QF PRUPA (sic)
projects.
RESPONSE TO REQUEST FOR PRODUCTION NO.2: Idaho Power objects to
this Request on the grounds of relevance. The Direct Testimony of Lisa A. Grow
submitted in this proceeding specifically states, ". . . the, Company has no specific
request of the Commission in this regard (Le., related to RECs) at this time." Grow
Testimony at p. 14, II. 6-8. Since Idaho Power has no specific request regarding RECs
in this proceeding at this time, questions related to RECs are irrelevant and beyond the
scope of this docket.
Idaho Power further objects to this Request as it is overly broad and would be
unduly burdensome for the Company to provide the information requested.
In addition, some of the requested material is or may be privileged and protected
by the attorney-client privilege as well as the attorney-work product doctrine.
Idaho Power does not specifically seek to acquire RECs from existing or
proposed qualifying facilty ("QF") Public Utilty Regulatory Policies Act of 1978
("PURPA") projects. Idaho Power includes the environmental attribute language below
in initial Idaho draft PURPA agreements supplied to proposed PURPA projects.
Under this Agreement, ownership of Green Tags and
Renewable Energy Certificate (RECs), or the equivalent
environmental attributes, directly associated with the
production of energy from the Sellets Facilty sold to Idaho
Power wil be governed by any and all applicable Federal or
State laws and/or any regulatory body or agency deemed to
have authority to regulate these Environmental Attributes or
to implement Federal and/or State laws regarding the same.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 3
During the proèess of negotiating the draft PURPA agreements into final form,
Idaho Power and some counterparties have negotiated modifications to the above
language that has resulted in either (1) Idaho Power owning 50 percent of the
environmental attributes created by the project for the entire term of the Firm Energy
Sales Agreement ("FESA") or (2) the project retaining ownership of the environmental
attributes for the first half of the FESA term with Idaho Power retaining ownership of the
environmental attributes for the last half of the FESA term.
Listed below are the PURPA projects from which Idaho Power has environmental
attribute ownership rights.
Environmental Idaho Public Utilties
Attribute Commission Order
Ownership IPUC Case Number Approving
Project Name Description number the FESA
Fargo Drop Hydroelectric 50%*IPC-E-11-27 32451
Dynamis Ada County Landfil Project 50%IPC-E-11-25 Pending Approval
High Mesa Wind Project 10/10**IPC-E-11-26 Pending Approval
Murphy Flats Solar Power Project 50%IPC-E-11-10 32384
Clark Canyon Hydroelectric 10/10 IPC-E-11-09 32294
Rockland Wind Farm 10/15***IPC-E-10-24 32125
*50% Project and Idaho Power each own 50 percent of the environmental attributes for the
full term of FESA.
**10/10 Project owns environmental attributes during first the 10 years of the 20-year FESA;
Idaho Power owns environmental attributes for the second 10 years.
***10/15 Project owns environmental attributes through the end of calendar year 2021. Idaho
Power then owns the environmental attributes with the beginning of calendar year
2022 through the term of FESA (a minimum of 15 years as this is a 25-year
agreement).
The response to this Request was prepared by Randy C. Allphin, Senior Energy
Contract Coordinator, Idaho Power Company, in consultation with Donovan E. Walker,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 4
REQUEST FOR PRODUCTION NO.3: Please provide copies of all documents
related to Idaho Powets attempted acquisition of RECs from existing or proposed QF
PURPA projects.
RESPONSE TO REQUEST FOR PRODUCTION NO.3: Idaho Power objects to
this Request on the grounds of relevance. The Direct Testimony of Lisa A. Grow
submitted in this proceeding specifically states, ". . . the Company has no specific
request of the Commission in this regard (Le., related to RECs) at this time." Grow
Testimony at p. 14, 11. 6-8. Since Idaho Power has no specific request regarding RECs
in this proceeding at this time, questions related to RECs are irrelevant and beyond the
scope of this docket.
Idaho Power further objects to this Request as it is overly broad and would be
unduly burdensome for the Company to provide the information requested.
In addition, some of the requested material is or may be privileged and protected
by the attorney-client privilege as well as the attorney-work product doctrine.
Notwithstanding and without waiving these objections, please see the Company's
response to Exergy's Request for Production NO.2 above.
The response to this Request was prepared by Randy C. Allphin, Senior Energy
Contract Coordinator, Idaho Power Company, in consultation with Donovan E. Walker,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 5
REQUEST FOR PRODUCTION NO.4: Please provide all studies, analyses,
reports and any other documents whether electronic or in writing in Idaho Powets
possession relating to the value, marketabilty, creation, title and/or existence of RECs.
RESPONSE TO REQUEST FOR PRODUCTION NO.4: Idaho Power objects to
this Request on the grounds of relevance. The Direct Testimony of Lisa A. Grow
submitted in this proceeding specifically states, ". . . the Company has no specific
request of the Commission in this regard (Le., related to RECs) at this time." Grow
Testimony at p. 14, II. 6-8. Since Idaho Power has no specific request regarding RECs
in this proceeding at this time, questions related to RECs are irrelevant and beyond the
scope of this docket.
Idaho Power further objects to this Request as it is overly broad and would be
undury burdensome for the Company to provide the information requested.
In addition, some of the requested material is or may be privileged and protected
by the attorney-client privilege as well as the attorney-work product doctrine.
Notwithstanding and without waiving these objections, Idaho Power provides the
following:
a. A confidential chart showing the Company's REC transaction
history since February 2010, including the unit price and total amount of each REC
transaction. Importantly, 95 percent of the net proceeds the Company receives from
these transactions flows back to its customers as a reduction to power supply
expenses. The confidential chart wil be provided to those parties that have executed
the Protective Agreement in this matter.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 6
b. Attached to this Response is Idaho Power's most recent REC
Management Plan as well as Commission Order No. 32002 accepting the Company's
REC Management Plan. Idaho Power continues to use this REC Management Plan as
a guideline for maximizing value of RECs for its customers.
The response to thi& Request was prepared by Jason Wiliams, Corporate
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 7
REQUEST FOR PRODUCTION NO.5: Has Idaho Power conducted any
lobbying or attempt to influence the Idaho Legislature at any time on any proposed or
draft legislation relative to REC ownership? If yes, please document all resources used
by the company in doing so, including costs, and time devoted by individual employees
or consultants. Please also explain and document said attempt( s).
RESPONSE TO REQUEST FOR PRODUCTION NO.5: Idaho Power objects to
this Request on the grounds of relevance. The Direct Testimony of Lisa A. Grow
submitted in this proceeding specifically states, ". . . the Company has no specific
request of the Commission in this regard (Le., related to RECs) at this time." Grow
Testimony at p. 14, II. 6-8. Since Idaho Power has no specific request regarding RECs
in this proceeding at this time, questions related to RECs are irrelevant and beyond the
scope of this docket.
Idaho Power further objects to this Request as it is overly broad and would be
unduly burdensome for the Company to provide the information requested.
In addition, some of the requested material is or may be privileged and protected
by the attorney-client privilege as well as the attorney-work product doctrine.
Notwithstanding and without waiving these objections, Idaho Power employs in-
house, as well as contracted lobbyists, whose job it is to promote and discuss proposed
legislation with the Idaho Legislature and others. Idaho Power has discussed proposed
REC legislation with Idaho legislators, the Idaho Public Utilties Commission, and other
utilties in the state of Idaho. The costs and expenses associated with the Company's
lobbyists and legislative activities are not recoverable from the Company's customers
and are born solely by the shareholders.
The response to this Request was prepared by Donovan E. Walker, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 8
REQUEST FOR PRODUCTION NO.6: Has Idaho Power attempted to recruit,
influence, or otherwise enage (sic) non-legislators to support REC legislation? If yes,
please provide copies of all draft legislation and other documents used or relied upon in
doing so and identify the individuals (including the Idaho Power employee(s) or
agent(s)) and describe the efforts used to engage them.
RESPONSE TO REQUEST FOR PRODUCTION NO.6: Idaho Power objects to
this Request on the grounds of relevance. The Direct Testimony of Lisa A. Grow
submitted in this proceeding specifically states, ". . . the Company has no specific
request of the Commission in this regard (Le., related to RECs) at this time." Grow
Testimony at p. 14, 11. 6-8. Since Idaho Power has no specific request regarding RECs
in this proceeding at this time, questions related to RECs are irrelevant and beyond the
scope of this docket.
Idaho Power further objects to this Request as it is overly broad and would be
unduly burdensome for the Company to provide the information requested.
In addition, some of the requested material is or may be privileged and protected
by the attorney-client privilege as well as the attorney-work product doctrine.
Notwithstanding and without waiving these objections, please see the Company's
response to Exergy's Request for Production NO.5 above.
The response to this Request was prepared by Donovan E. Walker, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 9
REQUEST FOR PRODUCTION NO.7: Please identify all PURPA QF projects
that are owned or partially owned by Idaho Power or any company affliated with Idaho
Power. Please describe each project in detail including ownership percentages,
monthly production, in service date, power purchaser and location. Please describe the
impact on each such project Idaho Powets proposals in this docket wil have if they are
adopted by the Commission in total.
RESPONSE TO REQUEST FOR PRODUCTION NO.7: IDACORP owns Ida-
West Energy, a non-regulated subsidiary that owns and operates nine QF projects
under PURPA. Specific details related to these projects are provided in the two tables
below. If Idaho Powets proposals are adopted by the Idaho Public Utilties
Commission, the four Ida-West projects located in Idaho wil be impacted to the same
extent as any other similarly situated QF projects with which Idaho Power has FESAs
under PURPA.
Nameplate In-Service
Project Name (MW)Location Power Purchaser Ownership Year
South Forks 8.20 Idaho Idaho Power 50%1985
Hazelton B 7.70 Idaho Idaho Power 50%1993
Wilson Lake 8.40 Idaho Idaho Power 50%1993
Falls River 9.10 Idaho Idaho Power 50%1993
Cove 5.00 California Pacific Gas & Electric 50%1990
Burney Creek 3.50 California Pacific Gas & Electric 50%1990
Ponderosa/Bailey 1.10 California Pacific Gas & Electric 50%1990
Lost Creek 1 1.10 California Pacific Gas & Electric 50%1989
Lost Creek 2 0.45 California Pacific Gas & Electric 50%1989
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 10
Estimated Monthly Production (MWh)
Project Name Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
South Forks 0 0 0 1,498 4,160 4,815 5,484 5,173 3,942 2,272 0 0
Hazelton B 0 0 87 1,418 3,390 4,087 4,689 4,319 3,211 1,373 51 0
Wilson Lake 0 0 51 1,532 3,926 4,664 5,298 4,826 3,656 1,639 57 0
Falls River 2,627 1,957 2,652 4,922 6,350 6,255 4,702 4,314 3,803 3,713 3,538 2,842
Cove 2,055 2,448 3,609 3,228 2,590 1,140 194 6 2 16 235 1,353
Burney Creek 654 816 1,271 1,429 1,304 509 28 0 0 4 45 266
Ponderosa/Bailey 156 196 279 292 506 538 324 66 3 0 16 92
Lost Creek 1 559 509 587 562 550 492 498 502 493 528 513 528
Lost Creek 2 249 226 258 247 247 234 226 237 229 241 230 238
The response to this Request was prepared by Mark Stokes,Power Supply
Planning Manager, Idaho Power Company, in consultation with Donovan E. Walker,
Lead Counsel, Idaho Power Company.
DATED at Boise, Idaho, this 1 ¡th day of February 2012.
~f/~
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 11
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 17th day of February 2012 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF EXERGY DEVELOPMENT GROUP OF IDAHO TO
IDAHO POWER COMPANY upon the following named parties by the method indicated
below, and addressed to the following:
Commission Staff
Donald L. Howell, II
Kristine A. Sasser
Deputy Attorneys General
Idaho Public Utilties Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
-- Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-- Email don.howellcapuc.idaho.gov
kris.sassercapuc.idaho.gov
Avista Corporation
Michael G. Andrea
Avista Corporation
1411 East Mission Avenue, MSC-23
P.O. Box 3727
Spokane, Washington 99220-3727
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-- Email michael.andreacaavistacorp.com
PacifiCorp d/b/a Rocky Mountain Power
Daniel E. Solander
PacifiCorp d/b/a Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-- Email daniel.solandercapacificorp.com
Kenneth Kaufmann
LOVINGER KAUFMANN, LLP
825 NE Multnomah, Suite 925
Portland, Oregon 97232
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-- Email kaufmanncalklaw.com
Exergy Development, Grand View Solar II,
J.R. Simplot, Northwest and Intermountain
Power Producers Coalition, Board of
Commissioners of Adams County, Idaho,
and Clearwater Paper Corporation
Peter J. Richardson
Gregory M. Adams
RICHARDSON & O'LEARY, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, Idaho 83707
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-- Email petercarichardsonandoleary.com
gregcarichardsonandoleary.com
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 12
Exergy Development Group
James Carkulis, Managing Member
Exergy Development Group of Idaho, LLC
802 West Bannock Street, Suite 1200
Boise, Idaho 83702
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
~ Email jcarkulisCâexergydevelopment.com
Grand View Solar II
Robert A. Paul
Grand View Solar II
15690 Vista Circle
Desert Hot Springs, California 92241
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
~ Email robertapaul08Ø2gmail.com
J.R. Simplot Company
Don Sturtevant, Energy Director
J.R. Simplot Company
One Capital Center
999 Main Street
P.O. Box 27
Boise, Idaho 83707-0027
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
~ Email don.sturtevantØ2simplot.com
Northwest and Intermountain Power
Producers Coalition
Robert D. Kahn, Executive Director
Northwest and Intermountain Power
Producers Coalition
1117 Minor Avenue, Suite 300
Seattle, Washington 98101
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
~ Email rkahnCânippc.org
Board of Commissioners of Adams
County, Idaho
Bil Brown, Chair
Board of Commissioners of
Adams County, Idaho
P.O. Box 48
Council, Idaho 83612
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
~ Email bdbrownØ2frontiernet.net
Clearwater Paper Corporation
Marv Lewallen
Clearwater Paper Corporation
601 West Riverside Avenue, Suite 1100
Spokane, Washington 99201
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
~ Email marv.lewallencæclearwaterpaper.com
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 13
Renewable Energy Coalition
Thomas H. Nelson, Attorney
P.O. Box 1211
Welches, Oregon 97067-1211
John R. Lowe, Consultant
Renewable Energy Coalition
12050 SW Tremont Street
Portland, Oregon 97225
Dynamis Energy, LLC
Ronald L. Wiliams
WILLIAMS BRADBURY, P.C.
1015 West Hays Street
Boise, Idaho 83702
Wade Thomas, General Counsel
Dynamis Energy, LLC
776 East Riverside Drive, Suite 150
Eagle, Idaho 83616
Interconnect Solar Development, LLC
R. Greg Ferney
MIMURA LAW OFFICES, PLLC
2176 East Franklin Road, Suite 120
Meridian, Idaho 83642
Bil Piske, Manager
Interconnect Solar Development, LLC
1303 East Carter
Boise, Idaho 83706
Renewable Northwest Project and Idaho
Windfarms, LLC
Dean J. Miler
McDEVITT & MILLER LLP
420 West Bannock Street (83702)
P.O. Box 2564
Boise, Idaho 83701
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email nelsonCâthneslon.com
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email jravenesanmarcos(iyahoo.com
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email ron(iwiliamsbradburv.com
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email wthomas(idynamisenergy.com
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email greg(imimuralaw.com
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email bilpiske(icableone.net
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email joe(imcdevitt-miler.com
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 14
Megan Walseth Decker
Senior Staff Counsel
Renewable Northwest Project
917 SW Oak Street, Suite 303
Portland, Oregon 97205
Idaho Windfarms, LLC
Glenn Ikemoto
Margaret Rueger
Idaho Windfarms, LLC
672 Blair Avenue
Piedmont, California 94611
North Side Canal Company and Twin Falls
Canal Company
Shelley M. Davis
BARKER ROSHOLT & SIMPSON, LLP
1010 West Jefferson Street, Suite 102 (83702)
P.O. Box 2139
Boise, Idaho 83701-2139
Brian Olmstead, General Manager
Twin Falls Canal Company
P.O. Box 326
Twin Falls, Idaho 83303
Ted Diehl, General Manager
North Side Canal Company
921 North Lincoln Street
Jerome, Idaho 83338
Birch Power Company
Ted S. Sorenson, P.E.
Birch Power Company
5203 South 11 th East
Idaho Falls, Idaho 83404
Blue Ribbon Energy LLC
M. J. Humphries
Blue Ribbon Energy LLC
4515 South Ammon Road
Ammon, Idaho 83406
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-- Email megancærnp.org
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email glennicæenvisionwind.com
margaretcæenvisionwind .com
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email smdcæidahowaters.com
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email olmsteadcætfcanal.com
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email nscanal(gcableone.net
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email ted(gtsorenson.net
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email blueribbonenergy(ggmail.com
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 15
Arron F. Jepson
Blue Ribbon Energy LLC
10660 South 540 East
Sandy, Utah 84070
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-l Email arronesg((aol.com
Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North Sixth Street (83702)
P.O. Box 844
Boise, Idaho 83701
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-l Email botto((idahoconservation.org
Snake River Allance
Ken Miler
Clean Energy Program Director
Snake River Allance
350 North 9th Street #B610
P.O. Box 1731
Boise, Idaho 83701
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email kmiler((snakeriveralliance.org
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF EXERGY DEVELOPMENT GROUP OF IDAHO TO IDAHO POWER COMPANY - 16
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. GNR-E-11-03
IDAHO POWER COMPANY
RESPONSE TO EXERGY'S
REQUEST FOR PRODUCTION NO.4
THIS ATTACHMENT IS
CONFIDENTIAL
AND WILL BE PROVIDED
TO THOSE PARTIES THAT
HAVE SIGNED THE
PROTECTIVE
AGREEMENT
,
usA D. NORDSTROM
Senior CounselInordsldildahopr.com
~IDA~POR~
An IDACORP Company
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December 30, 2009
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-08-24 - REC Management Plan
Dear Ms. Jewell:
In Order No. 30818, the Commission directed Idaho Power Company ("Idaho
Power" or "the Company") to formulate a business plan that describes how it wil manage
Green Tags generated in 2009 and later. Enclosed with this letter is Idaho Powets
Renewable Energy Credit ("RECj Management Plan describing the scnaris under which
Idaho Power wil likely acquire RECs and how it intends to manage them going forwrd.
If you have any questions or concerns, please do not hesitate to contact me at 388-
5825.
Very truly yours,
cI.v¿) '1$L~
Lisa D. Nordstrom
LDN:csb
Enclosures
p.o. Box 70 (83707)
1221 W. Idaho St.
Boise. 10 B3702
RECEiVED
IDAHO POWER REC MANAGEMENT PLAN
2009 DEC 30 PH It: itS
Renewable Energy Credits IDAHO FUDU'J
UTILITIES COMMISSION
To promote the construction of renewable resources, a system was crated that
separates renewable generation into two parts: (1) the electrical energy produce by a
renewable resource and (2) the renewable attributes of that generation. These
renewable attributes are referred to as renewable energy creits ("RECs") or green
tags. The entit that holds a REC has the right to make claims about the environmental
benefits associated with the renewable energy from the project. One REC is issued for
each megawatt-hour ("MWh") of electricity generated by a qualified resource. Electricit
that is split from the REC is no longer considered renewable and cannot be marketed as
renewable by the entity that purchases the electricity.
A REC must be retire once it has been used for regulatory compliance and once
a REC is retired, it cannot be sold or transferr to another part. The same REC may
not be claimed by more than one entit, including any environmental claims made
pursuant to electricity coming from renewable energy resourcs, environmental labeling,
or disclosure requirements. State renewable portolio standard ("RPS") requirements
also typically specify a "shelf life" for RECs so they cannot be banked indefinitely.
Idaho Power's RECs
Idaho Power Company ("Idaho Powet') is currntly receiving all of the RECs
from the 101 megawat ("MW") Elkhom Valley Wind Project in northeast Oreon. The
Elkhorn Valley Wind Project is expected to provide approximately 300,000 RECs to
Idaho Power annually throughout the term of the power purchase agreement ("PPA")
that expires in 2027.
Idaho Power is also reiving RECs from the 13 MW Raft River Geothermal
Project. For the first 10 years (2008-2017) of the agreement, Idaho Power is entitled to
75 percent of the RECs from the project for generation that exceeds a monthly average
of 10 MW. For the second 10 years of the agreement (2018-2027), Idaho Power is
entitled to 51 percent of the RECs generated by the Raft River Geothermal Project.
1
Regulatory Treatment of Idaho Power's RECs
In late 2008, Idaho Power filed an Application with the Idaho Public Utilities
Commission in Case No. IPC-E-08-24 asking to retire RECs received as part of the
long-term power purchase agreements for generation from the Elkhorn Valley Wind
Project and the Raft River Geothermal Project. Because the state of Idaho does not
have a RPS, these RECs could be either voluntarily retire or sold. Idaho Powets
Application indicated that these RECs needed to be retired in order for Idaho Power to
represent to its customers they were receivng renewable energy from these projects.
In May 2009, the Commission issued Order No. 30818 directing Idaho Power to
sell eligible 2007 and 2008 RECs from these projects and include the proceeds in the
Company's 2010 Power Cost Adjustment ("PCA") calculation. The Order also
instructed Idaho Power to file a business plan addressing the disposition of future RECs
by the end of 2009.
Idaho Power's REC Management Strtegy
Idaho Power believes there is a reasonable likelihood that a federal renewable
energy standard ("RES") wil be passed by Congress that will require the Company to
obtain and retire RECs for compliance. Idaho Power also believes it is prudent"to
continue acquiring ownership of RECs associated with renewable resources to minim'ize
the impact when a federal RES is implemented. However, because of current economic
conditions and recent increases in costs and customer rates, the basic philosophy of
Idaho Powets REC Management Plan is to sell its RECs in the near-term and retum
the customers' share of the proceeds through the PCA mechanism while continuing to
acquire and. hold long-term contractual rights to own RECs for use in meeting a future
federal RES.
Proposed federal RES legislation includes a shelf life for RECs, thereby allowing
the holder to "bank" RECs for a period of time. The abilty to bank RECs is important to
Idaho Power because the number of RECs required to comply with a federal RES is
expected to fluctuate depending on hydrologic conditions. The proposed federal RES
legislation would allow Idaho Power to deduct generation from its hydroelectric
resourcs from the sales base used to calculate the number of RECs required annually.
2
In above average water years, Idaho Powets REC requirement wil be lower
because of increased production from hydroelectric resourcs. In low water years,
Idaho Powets hydroelectric resources wil produce less electrici and the number of
RECs required will increase. With the abilit to bank RECs, Idaho Power would be able
to save additional RECs from good water years and rely on banked RECs to meet
requirements in low water years.
Therefore, Idaho Powets REC Management Plan is as follows:
1. Existing Long- Ter PPAs. For existing projects, such as Elkhom
Valley Wind Project and the Raft River Geothermal Project, in which Idaho Power
receives RECs as part of a long-term power purchase agreement, Idaho Power plans to
sell the near-term RECs and return the customers' share of the proceeds through the
PCA while continuing to acquire and hold long-term contractual riht to own RECs for
use in meeting a future federal RES.
2. Existing PURPA and REC Generating Contract. For existing
PURPA and other REC generating projecs that provide output to Idaho Power under
mid- to long-term contracts (such as Fossil Gulch Wind Project or the Arrwrck
Hydroelectric ProjectClatskanie Exchange), if a mutually agreeable price can be
reached wit the projec owner, Idaho Power may enter into contracts to purchase the
project's RECs on a mid- to long-term basis with the expecation that the REC
acquisition costs wil be treated as a PCA expense. In this situation, Idaho Powets
intent is the same - to sell the near-term RECs and retum the customers' share of
proceeds through the PCA while continuing to acquire and hold long-term contractual
rights to own RECs for use in meeting a future federal RES.
3. New Long-Term PPAs. For new long-term power purchase
agreements, like the recently filed Neal Hot Springs Geothermal contct (Case No.
IPC-E-Q9-34), Idaho Power intends to continue to acquire long-term rights to the RECs
under these agreements. As noted above, Idaho Power intends to sell the near-term
RECs and return the customers' share of the proceeds through the PCA while
continuing to acquire and hold long-term contctual rights to RECs for use in meeting a
future federal RES.
3
4. Qualified Renewable Projects. To the extent Idaho Power's small
hydroelectric projects can be certed as renewable under other states' renewable
portolio standards, Idaho Power will consider sellng the near-term RECs as
opportunities become available and retum the customers' share of the proceeds
through the PCA.
4
Offce of the Secret
Serice Dat
June i i, 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPAN FOR ) CASE NO. IPC-E-08-24
AUHORITY TO RETIR ITS GREEN TAGS. )
) ORDER NO. 32002
)
In May 2009, the Commission directed Idao Power Company to sell its eligible 2007
and 2008 Green Tagsl generated by the Elkhorn Valley Wind Project and the Ra River
Geotherm Project and to include the proceeds from the sale in the Company's 2010 Power Cost
Adjustment (PCA) calculation. Order No. 30818. The Commission also directed the Company
to formulate a business plan regarg the disposition of Green Tags generated in 2009 and late.
On December 30, 2009, Idaho Power fied its REC Management Plan with the
Commission. On Aprl 23, 2010" the Commission issued a Notice of REC Mangement Plan
Filing and Notice of Modified Procedur seeking public comment on the REC Plan. Order No.
31062. Two comments were submitted in addition to Staffs. After reviewing the fiing and
comments, we accept Idao Power's REC Management Plan filing.
THE REC MAAGEMENT PLAN
For existing long-term Power Purchas Agreements (PPAs), such as the Elkhorn
Valley Project and the Raf River Project from which Idaho Power receives RECs as par of the
agreement, Idaho Power plans to sell the near-term RECs and retu the customers' share of the
proceeds thugh the PCA. The Company also plans to continue acquiring and holding long-
term contractu rights to own RECs to meet futu federal renewable energy stadards.
For existing PURA and REC generating projects tht provide output to Idaho Power
under mid- to long-term contracts, "if a mutually agreeable price ca be reached with the project
owner, Idaho Power may ente into contrcts to purchase the project's RECs on a mid- to long-
term basis with the expectation that the REC acquisition costs will be treated as a PCA expense."
Plan at 3. Idaho Power intends to sell the nea-term RECs and retur the customers' share of
proceeds though the PCA while continuing to acquire and hold long-term contractual rights to
own RECs for use in meeting a futue federal renewable energy stadard.
i Green Tags are alo commonly referred to as renewable energy credits (Res).
ORDER NO. 32002 1
For new long-term Power Purchase Agreements, Idaho Power intends to continue to
acquire long-term rights to the RECs to meet futue federa renewable energy stadards. The
Company intends to sell the near-term RECs and retu the customers' share of the proceeds
though the PCA.
To the extent Idaho Power's small hydroelectrc projects can be certified as
renewable under other states' renewable portolio stdars, Idaho Power intends to consider
sellng the near-term RECs as opportties beome available and retur the customers' share of
the proceeds though the PCA.
TH COMMENTS
i. Staff. Staf believes that unless and until the federal governent establishes
renewable energy stadards and corresponding guidelines, the most prudent disposition of Gren
Tags is to sell the Tags and retu the proceeds to ratepayers. Staff noted that Idaho Power
reported $665,788 in proceeds, to date, from 2007 and 2008 Green Tags sold in accordance with
Order No. 30818. These proceeds are being retured to customers through the Company's 2010
Power Cost Adjustment. Order No. 31093. Staff believes that Idaho Power's Plan for the
disposition of Green Tags generated in 2009 and later generally reflects the same treatment that
the Commission ordered for the 2007 and 2008 Tags. Therefore, Staf recommended tht the
Commission accept for filing Idao Power's REC Management Plan.
2. ICL and RN. The Idaho Conservation League (ICL) and Renewable Northwest
Project (RP) (collectively the "Organizations") fied joint comments. The Organzations state
that regulatory obligations and consumer demand drive the value of the REC marketplace. They
argue that Idaho Power's Plan fails to consider the value of REC retirement for the purpse of
complying with trth in advertising laws. For example, "if Idaho Power consumes RECs by
making public statements concerning the environmental attibutes of the Elkhorn, Raf River, or
other renewable resources, (it) must retire suffcient RECs to account comply (sic) with
regulatory obligations imposed by trth in advertising laws." ICLIRP Comments at 7.
The Organizations maintai that the Plan should explain how the Company intends to
sell its RECs and stil comply with the REC market's guidelines, restrictions and procedures.
The Organizations request that the Commission order Idaho Power to develop a more detailed
plan regarding whether to acquire RECs from all potential sources and a more thorough
evaluation of how to best derive value from the RECs.
ORDER NO. 32002 2
3. Ms. Black. A residential customer of Idaho Power, Ms. Black, also submitted
comments. Ms. Black asserts that RECs "that are sold are 'glued' by their buyer to an electron
that would have otherwise not had such environmenta benefits." Black Comments at 5. Bas
on ths premise, Ms. Black argues that "(r)atepayers continue to believe that (Idaho Power) has
some amount of wid on its system that is being delivered to their meter(s). The benefits they
have associated with wind have been strpped away in the sale of the REC." Id. at 7. She also
assert tht selling RECs is contrar to curntly recognzed State policy supporting the pursuit
of a diversified energy portolio. Id at 5. Ms. Black maintans that, even durng a time of
upward pressure on rates, there are compellng arguents for the value to ratepayers associated
with retiring RECs.
Ms. Black requests that a hearng be grted to review the specifics and the
implications of Idaho Power's REC Management Plan. In the alterntive, Ms. Black request
tht the Commssion "deny the Company's REC Mangement Plan as wrtten and request a new
plan tht either (a) reflects the inherent value to Idao Power ratepayers of retirng all 2009 and
futue RECs the Company obtais the rights to, or (b) allows for the sale of 2009 and futu
RECs but requires the Company char a course of action tht more comprehensively educates
stakeholders . . . on the implications of sellng those RECs and report anualy to the
Commission on those educaton efforts." Id at 8.
DISCUSSION
Pursuant to Idaho Code §§ 61-129, 61-502, and 61-503, the Commission ha
jursdiction over Idaho Power Company and over the issues rased in this case. As a preliminay
matter, Ms. Black requested a hearng be granted to more closely consider the implications of
Idaho Power's Plan. We find the record established in this case is suffcient for the Commission
to make a determination regarding Idaho Power's REC Management Plan filing. IDAPA
31.01.01.204. Therefore, Ms. Black's request for a techncal hearng is denied.
In Order No. 30818, the Commission directed the Company to formulate a prudent
business plan outlining how it intends to mange Gren Tags generated in 2009 and later. The
REC Management Plan is meant to be a tool for the Company that taes into account the present
and near futu renewable energy market of the State of Idaho and the federal governent. The
Plan is not meant to be a dispositive evaluation of all aspects of the REC market, but a showig
ORDER NO. 32002 3
to the public tht the Compay ha considered its options (i.e., to ban, rere, or sell RECs) and
underten a reasonable comse of action.
After reviewig Idao Power's REC Manement Plan and the comments, the
Commssion accepts the Plan for filing. Ths acknowledgement and acceptace of the Plan
should not be interpreted as approval of the Plan, or as a judgment of the prudence of any
transactions undertaken as par of the Plan.
The Commission appreciates the conces expressed by the Organzations and Ms.
Black regarding Idaho Power's compliance with the REC market's guidelines and restrctions.
As noted by the commenters in this case, the REC system is a complicated maket that is stil
developing and vares from state to state. We expect Idao Power to remain fully engaged in
REC market developments and to comply with the proper procedures regarding representations
of renewable energy. We fuer direct the Company to submit a modifed REC Mangement
Plan when a change in state or federal energy policy warants such action.
ORDER
IT is HEREBY ORDERED that the Commission accepts Idao Power Company's
REC Mangement Plan for filing.
THIS is A FINAL ORDER. Any person interested in ths Order or issues decided in
this Order may petition for reconsideration within twenty-one (21) days of the service date of
this Order. Within seven (7) days afer any person has petitioned for reconsideration, any other
person may cross-petition for reconsideration. See Idaho Code § 61-626.
ORDER NO. 32002 4
IltADONE by Order of the Idaho Public Utilties Commission at Boise, Idao ths
day of June 2010.
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D: KE N, SIDENT
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MASHA H. SMITH, COMMISSIONER
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MACK A. REDFORD, COMMISSIONER
ATTEST:
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Commission Secretar
O:IPC-E-08-24_ks7
ORDER NO. 32002 5