20090327notice_of_report_order_no_30761.pdf

Office of the Secretary
Service Date
March 27 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPROPRIATE
DISPOSITION OF IDAHO POWER
COMPANY'S SULFUR DIOXIDE EMISSION
ALLOWANCES FOR 2008 AND 2009
CASE NOS. IPC-08-
IPC-09-
NOTICE OF REPORT
NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 30761
On March 18, 2009, Idaho Power Company filed a report disclosing that the
Company recently recorded the sale of surplus sulfur dioxide (S02) emission allowances. The
Company reported that it has either sold or entered into contracts for the sale of 16 500 S02
allowances. After deducting its brokerage fees of $4 125 , Idaho Power anticipates booking S02
proceeds of$2 341 375. The Company s report also noted that during calendar year 2008 , it sold
000 S02 allowances. After deducting brokerage fees, the Company reported net S02
revenues in 2008 of$2 958 500. See Case No. IPC-08-14 (report filed July 24 2008).
The Commission initiates this proceeding to determine the appropriate disposition
and ratemaking treatment for the reported S02 revenues.
BACKGROUND
Title IV of the Clean Air Act Amendments of 1990 established a national program for
the reduction of acid rain. 42 U.C. ~~ 7651 et seq. The centerpiece of the acid rain program is
the incentive- or market-based "cap and trade" S02 program. Under the cap and trade program
the U.S. Environmental Protection Agency (EP A) sets a cap or ceiling on the total amount of
S02 emissions allowed nationwide. Based upon this cap, EP A allocates a certain number of
S02 emission allowances to thermal power plant owners. Each allowance or credit provides the
authority to emit one ton of S02. Idaho Power has an ownership interest in three thermal power
plants in the west: Jim Bridger, North Valmy, and Boardman.
A thermal power plant owner must hold sufficient allowances each year to cover its
actual S02 emissions. A power plant owner that does not possess sufficient allowances to cover
NOTICE OF REPORT
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30761
its annual emissions must purchase additional allowances or it is automatically fined and must
surrender future-year allowances to cover the shortfall. A power plant owner holding surplus
S02 allowances in a given year may retain the allowances or sell them. S02 allowances are
fully marketable commodities and can be traded on the open market or in special EP A-sponsored
auctions. Id.
PROPOSED ACCOUNTING TREATMENT
In its report, Idaho Power proposes that the "same 90/10 percent sharing of benefits
be utilized to allocate the proceeds from the sale of S02 allowances booked during 2008 and in
January 2009. Application at ~ 7. The Company recognizes that subsequent S02 sales will be
subject to the new 95/5 percent sharing methodology consistent with the parties' stipulation
approved by the Commission in Order No. 30715 (Case No. IPC-08-19). In addition to the
change in sharing methodology, Idaho Power also asserts that the jurisdictional allocations were
adjusted in the Company s recent rate case Order No. 30722. In particular, Idaho s jurisdictional
percentage increased from 94.7% to 94.79%. Id.
Idaho Power s report merely notes that the Company has accrued S02 credits but
does not recommend a particular disposition or ratemaking treatment for the funds. Staff
recommended that the Commission initiate a docket to determine the appropriate disposition of
the 2008 and 2009 (thus far) S02 credits. In past cases, S02 proceeds have been included in the
Company s annual Power Cost Adjustment (PCA) case. See Order Nos. 30041 and 30529. In
Order No. 30760, the Commission utilized S02 proceeds to fund an energy education proposal.
NOTICE OF MODIFIED PROCEDURE
YOU ARE HEREBY NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission s Rules
of Procedure IDAPA 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on the
appropriate disposition of the S02 proceeds may file a written comment in support or opposition
with the Commission within twenty-one (21) days from the service date of this Notice. The
NOTICE OF REPORT
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30761
comment must contain a statement of reasons supporting the comment. Persons desiring a
hearing must specifically request a hearing in their written comments. Written comments
concerning this Application shall be mailed to the Commission and Idaho Power at the addresses
reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
Lisa Nordstrom, Senior Counsel
Greg Said, Manager-Rev. Requirement
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E- Mail: lnordstrom~idahopower. com
gsaid~idahopower.com
472 W. Washington Street
Boise, ID 83702-5918
These comments should contain the case caption and case numbers shown on the first page of
this document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.idaho.gov. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document. These comments must also be sent to Idaho Power at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the two reports have been filed with the
Commission and are available for public inspection during regular business hours at the
Commission offices.The two reports are also available on the Commission s Website at
www.puc.idaho.gov under the "File Room" and then "Electric Cases.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction under Title 61 of the Idaho Code and specifically
Idaho Code ~~ 61-316, 61-502, 61-503, 61-523 , and 61-524. The Commission may enter any
final Order consistent with its authority under Title 61.
NOTICE OF REPORT
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30761
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Persons interested in submitting written comments regarding the disposition of the S02 proceeds
for calendar years 2008 and 2009 (to present) must do so no later than twenty-one (21) days from
the service date of this Order.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ';' 1 r~
day of March 2009.
MARSHA H. SMITH, COMMISSIONER
JI . KEMPTON~COM SSIONER
ATTEST:
~AJJe . Jewell
Commission Secretary
bls/O:IPC-08-14 IPC-09-08 dh
NOTICE OF REPORT
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30761