20111117_3515.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: WELDON STUTZMAN
DEPUTY ATTORNEY GENERAL

DATE: NOVEMBER 14, 2011

SUBJECT: IDAHO POWER COMPANY’S APPLICATION FOR AN ACCOUNTING
ORDER TO ESTABLISH RATEMAKING TREATMENT OF
QUALIFYING REPORTING ENTITY CONTRACTS, CASE NO. IPC-E-
11-21

On October 31, 2011, Idaho Power Company filed a Petition requesting a
Commission Order modifying and continuing ratemaking processes set forth in Commission
Order No. 30941 issued November 5, 2009, regarding the voluntary qualified reporting entity
(QRE) services the Company provides. The Company’s Petition addresses accounting for
renewable energy credits (RECs) through an independent inventory tracking system as
recommended by the Western Energy Coordinating Council (WECC). The tracking system is
the Western Renewable Electricity Generation Information System (WREGIS) and is designed
to ensure that (1) only one REC is created for each megawatt-hour generated from a qualifying
renewable energy project, (2) each individual REC is only used for one purpose, and (3) provide
a system that allows both the generation units creating RECs and users of the RECs to
communicate specific REC requirements. The WREGIS system does not track the financial
value of the RECs but instead tracks the creation and disposition of the individual REC
certificates.
The Company’s Petition states that the WREGIS process requires that a party,
independent from the owner of the renewable generation unit, supply WREGIS with the actual
monthly megawatt-hour that a renewable generation unit has delivered. The independent party is
DECISION MEMORANDUM 2
called a qualified reporting entity (QRE). Idaho Power has been approved as a QRE by the
WREGIS administrator.
Idaho Power’s identification as a QRE came about through a case resolved in front of
the Oregon Public Utilities Commission in 2009. The Oregon Commission approved a
memorandum of understanding between its staff and the utilities in which the utilities agreed to
voluntarily provide QRE services for approximately two years so long as the cost to perform the
services were fully compensated by the party requesting the QRE service.
In May 2009, Idaho Power filed a request with this Commission for approval of
accounting and ratemaking treatment of expenses and revenues associated with providing
voluntary QRE services as outlined in the agreement approved by the Oregon Commission. On
November 5, 2009, this Commission issued an accounting Order approving the Company’s
proposed accounting and ratemaking processes through the two-year review process established
in Oregon. The Commission also directed the Company to file an analytical report on the QRE
services to facilitate the review of the above the line ratemaking treatment for those services.
The Company’s is attached to the Petition in this case.
Idaho Power in its Petition requests the Commission authorize the Company to
continue the accounting and ratemaking treatment processes previously approved for an
indefinite period of time. The Petition states that as of September 30, 2011, Idaho Power has 26
client contracts, 25 of which are for generator plants in Idaho, and 1 for a generator plant in
Oregon. The Company requests Commission approval of its request to continue the processes
related to the QRE services indefinitely with the following conditions, which have been
approved by the Oregon Commission: (a) Idaho Power will notify the Commission and all
entities using QRE services of its intent to discontinue providing voluntary QRE service 90 days
in advance of the proposed discontinuance; and (b) Idaho Power will provide data regarding
QRE service, subject to protection of confidential information, if requested by the Commission.
The Company requests that its Petition be processed by Modified Procedure.
Staff recommends the Commission issue a Notice of Petition and Notice of Modified
Procedure providing for a 21-day comment period to process the Company’s Petition.

DECISION MEMORANDUM 3
COMMISSION DECISION
Should the Commission issue a Notice of Petition and Notice of Modified Procedure,
providing for a 21-day comment period, to process Idaho Power’s Petition for an accounting
Order to establish ratemaking treatment of qualifying reporting entity contracts?

Weldon B. Stutzman
Deputy Attorney General

bls/M:IPC-E-11-21_ws