20040429Press Release.pdf

IDAHO PUBLIC UTILITIES COMMISSION
For Immediate Release
Case No. IPC-04-
April 29, 2004
Contact: Gene Fadness [phone]
Website: www.puc.state.id.
PUC says "green tag" issue not ripe for judgment
Boise - The Idaho Public Utilities Commission has denied an Idaho Power Co. request to issue
an order declaring who owns the "green tags " associated with renewable power projects that
qualify for federal PURP A * provisions.
Green tags, or "renewable energy credits " are a currency that can be traded to individuals and
entities wishing to support renewable energy. They are becoming more valuable as a growing
number of states are starting to require their regulated utilities to buy or generate a certain
amount of power from renewable sources. Because green tags are created by the states, their
ownership is not addressed by the federal PURP A legislation.
Idaho Power asked the commission to determine who owns the green tags: PURP A project
owners or the utility that contracts to buy the power from the project owners. Idaho Power
proposed that the commission allow project owners to retain ownership of the green tags because
that would encourage development of green resources. However, Idaho Power proposed to retain
the "right of first refusal" to purchase the tags before project owners offer them to another buyer.
The commission s order says the matter is "not ripe for declaratory judgment." The Idaho
Legislature has not enacted renewable portfolio standards, has not created a green tag program
and has not established a trading market for green tags.
Idaho Power has contracts with about 70 PURP A projects.
Since PURP A was enacted, regional organizations, such as the Bonneville Environmental
Foundation, have been created to certify projects as "green energy compliant." Power projects
found to be compliant are issued green tags that can be traded.
Idaho s other large electric utilities, PacifiCorp and Avista Utilities, filed comments in the case
stating that the green tags are the property of the purchasing utility. The Bonneville
Environmental Foundation, Northwest Energy Coalition and the Advocates for the West asked
the commission to confirm that project owners own the green tags. Commission staff and other
small power producers who filed comments intervened in the case said the commission had no
jurisdiction or authority to decide the issue.
Idaho Power claimed the tags represented a value to the utility because they have monetary value
separate from the actual energy produced. Idaho Power claimed that if it were granted ownership
rights to the green tags, the revenue from them could be used to lower energy costs to Idaho
Power customers or be reinvested in the development of additional renewable resources in the
state.
PURP A project owners contended keeping ownership of the tags benefits the state because the
ability to sell green tags provides incentive for more renewable development. It also compensates
owners for their projects ' environmental attributes and rewards them for the risk they take to
invest in and operate a renewable energy plant.
While the commission s order does not allow Idaho Power to include a right of first refusal
provision in PURP A contracts, it does not preclude parties from voluntarily negotiating the sale
and purchase of green tags. However, the price a regulated utility would pay for the green tags is
not a PURP A cost that the utility can recover from ratepayers, the commission said. "Recovery
ofthose expenses will be reviewed as all other non-PURP A costs " the commission said.
A full text ofthe commission s order, along with other documents related to this case, are
available on the commission s Web site at www.puc.state.id.. Click on "File Room" and then
on "Electric Cases" and scroll down to Case No. IPC-04-
END
*PURP A - The Public Utilities Regulatory Policies Act or PURP A, passed during the energy
crisis in the late 1970s, requires utilities to buy energy from qualifying small power producers
that generate power from sources other than fossil fuels. The Public Utilities Commission sets
the rate the utilities must pay small power producers. The rate, called an avoided cost rate, is
based on the cost the utility avoids if it would have had to generate the power itself or purchase it
from another source.