20040319NW Energy & Advocates for West Comments.pdf

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Jean Jewell, Commission Secretary
Idaho Public Utilities Commission
472 W. Washington St.
Boise, ill 83702-5983
Re: Comments on IPC-O4-02 (ownership of environmental attributes)
Dear Ms. Jewell:
NW Energy Coalition and Advocates for the Westl submit these comments on
Idaho Power Company s request for a declaratory ruling on ownership of environment'J-J
attributes ("green tags ) associated with qualifying facilities under PURP
We concur with the thoughtful comments of Bonneville Environmental
Foundation ("BEF") in this proceeding. BEF's comments deserve careful consideration
in no small part because BEF markets and sells green tags in Idaho for Idaho Power
Green Power Program.
We also appreciate and agree with the general position taken by Idaho Power
Company (that green tag ownership should stay with project owners), which reflects an
understanding by the Company of the value of the environmental benefits of renewable
resources.
Ownership of Green Tags
Two fundamental reasons underlie our position that green tags should stay with
owners of qualifying facilities:
First, PURP A requires utilities to pay at least their avoided cost for power from
qualifying facilities. If Idaho Power were deemed to own the green tags associated with
these projects, the Company effectively could pay less than avoided cost for that power
in violation ofPURP A. Of course, this concern potentially could be addressed via
contract negotiations between Idaho Power and the independent developer. But such a
system would put developers of qualifying facilities (particularly small facilities) at a
distinct disadvantage, considering that Idaho Power is largely a monopsony (single
buyer) of small power production in southern Idaho. The market for their green tags
which is potentially national in scope, would shrink to just one buyer.
1 The NW Energy Coalition is a multi-state association of energy efficiency, clean energy, environmental
and other public interest organizations engaged in promoting a clean, reliable, and economic energy future
for the Pacific Northwest. Advocates for the West is a nonprofit conservation law and advocacy center
which supports renewable energy resources and energy efficiency improvements.
P.O. Box 1612, Boise, ID 83701 208-342-7024 Fax: [phone] www.AdvocatesWest.org
Second, green tags are just one collateral value that PURP A qualifying facilities
can have, apart from the production of electrons. For example, methane digesters
installed at dairies can improve overall waste management, including by producing a
more marketable compost product; and digesters could help resolve local odor problems.
Canal-drop hydro systems can have independent value to their owners for channel
maintenance, water flow management or other reasons. These values are real and
separate from the production of electricity at qualifying facilities, but a utility could not
possibly claim ownership of them.
Right of First Refusal
We join BEF's position that Idaho Power also should not enjoy a right of first
refusal (ROFR) to purchase green tags from qualifying facilities. Quite simply, we donot believe the Company has presented any legal or other compelling basis to obtain such
a right. Furthermore, as BEF noted, a ROFR could reduce the market value of the tags.
Green tag marketers such as BEF would tend to avoid investing time and money in
helping new qualifying facilities get off the ground, when those efforts could be thwarted
by Idaho Power s exercise of its ROFR. In the end, a ROFR held by Idaho Power would
unnecessarily hurt small power producers interested in creating an environmentally
friendly energy product.
Conclusion
The Commission should encourage and support a robust market for green tags
which fosters development of new clean forms of energy production in Idaho. The
Commission should confirm that qualifying facility developers own the environmental
attributes associated with their projects, free from rights of first refusal.
William M. Eddie, Attorney
On behalf ofNW Energy Coalition, and
Advocates for the West
cc:
Monica Moen
Idaho Power Co.
O. Box 70
Boise, ill 83707
Randy Allphin
Idaho Power Co.
O. Box 70
Boise, ID 83707