20090116Reply Comments.pdf

LISA D. NORDSTROM
Senior Counsel
eslDA~PORtI
An IDACORP Company
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January 16, 2009
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-08-24
IN THE MA ITER OF THE APPLICATION OF IDAHO POWER COMPANY
FOR AN ORDER AUTHORIZING THE RETIREMENT OF ITS GREEN TAGS
Dear Ms. Jewell:
Enclosed please find for filing an original and seven (7) copies of Idaho Power's
Reply Comments in the above matter.
I would appreciate it if you would return a stamped copy of this letter for my file in
the enclosed stamped, self-addressed envelope.
Very truly yours,£~¡Q.~~~
Lisa D. Nordstrom
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Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, 10 83702
LISA D. NORDSTROM, ISB No. 5733
BARTON L. KLINE, ISB No. 1526
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: 208-338-6936
InordstromßYidahopower.com
bklineßYidahopower.com
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2009 JAN l 6 AM II: 41
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR AN ORDER
AUTHORIZING THE RETIREMENT
OF ITS GREEN TAGS
)
) CASE NO. IPC-E-08-24
)
) IDAHO POWER'S REPLY COMMENTS
)
)
COMES NOW, Idaho Power Company ("Idaho Powet' or "the Company"), and in
response to Comments filed in this docket, submits the following Reply Comments.
TERMINOLOGY
Idaho Power's Application and several comments filed with the Commission
discuss "retiring" Green Tags and what timeframes comprise the actual shelf life of
Green Tags. Based on the comments filed, Idaho Power believes there may be some
confusion about these concepts and wil attempt to further clarify them.
IDAHO POWER'S REPLY COMMENTS-1
1. Shelf Life
Shelf life refers to the concept that Green Tags may no longer have value at
some date in the future. The shelf life of Green Tags may vary depending upon the
purpose for which they are used.
Green-e has a complicated definition of the shelf life of Green Tags that are
Green-e certifiable, a short summary of which was included in Idaho Powets
Application on page 3, footnote 5. Generally, the Green-e process establishes a
maximum shelf life of approximately 18 - 21 months from the date the MWh associated
with the Green Tag was generated. This shelf life can vary depending on how close to
the end of a calendar year the Green Tag was created.
States that have adopted Renewable Portolio Standards (RPS) generally define
what resources are eligible to meet the state's RPS requirements and establish the
shelf life applicable to Green Tags generated by eligible resources. In order to
determine the shelf life for each state, a review of each state's individual RPS
documents is required.
2. Disposition of Green Tags
There are various actions that an owner of a Green Tag may take once the
Green Tag is created. The Green Tag owner may transfer/sell the tag, hold the tag, or
retire the tag. If the owner holds a Green Tag past the oldest shelf life date, it wil
expire. Until such time as an Idaho Power-owned Green Tag is transferred, retired or
expires, the Green Tag simply resides in an Idaho Power Green Tag account awaiting
disposition.
IDAHO POWER'S REPLY COMMENTS - 2
a. Transfer
The transfer of a Green Tag is required at the time the owner sells the Green Tag
to another part. When the transfer is complete, the seller of the Green Tag wil have
transferred all ownership rights and environmental attributes associated with the Green
Tag to the other part.
b. Expiration
If the Green Tag is a certified Green-e tag, the tag effectively expires or becomes
worthless with respect to its value as a Green-e certified Green Tag when the Green-e
designated shelf life passes. However, the Green Tag may stil satisfy a RPS
requirement, in which case the expiration is dictated by the individual state with the RPS
requirement. The Oregon RPS specifies that excess Green Tags may be held and
used in future years. The Oregon RPS has no reference to a particular shelf life; absent
evidence to the contrary, Idaho Power assumes that there is no shelf life limitation on
Green Tags used to satisfy the Oregon RPS.
c. Retirement
Retirement is the process by which the owner of a Green Tag actually consumes
the Green Tag to meet a specific requirement. Once a Green Tag is retired or
consumed it is no longer available to be used for any future transaction or purpose. For
an entity to be able to make public statements in regard to the entity being "green", the
entity must retire or consume some level of Green Tags on a routine basis. For
example, commercial enterprises that claim to be "green" typically retire a quantity of
Green Tags each month equivalent to their monthly energy (MWh) consumption (e.g., a
IDAHO POWER'S REPLY COMMENTS - 3
company that consumes 15 MWh in a month also retires 15 Green Tags in the same
month).
In order for Idaho Power to represent to its customers it is delivering the
renewable generation associated with the Elkhorn Valley Wind Project or the Raft River
Geothermal Project, Idaho Power wil need to retire (consume) the Green Tags created
by those projects. These retired Green Tags wil then no longer be available to transfer
or sell to other parties and Idaho Power does not anticipate that they wil be eligible to
meet any future RPS requirements.
If the intended use of a Green Tag is to meet an RPS requirement, then the
Green Tag could be kept indefinitely in the utility's Green Tag account (assuming no
shelf life) until the time when the utility retires or consumes the Green Tag to meet a
RPS requirement. However, if Idaho Power represents that it is delivering renewable
energy from the Elkhorn Valley Wind Project or the Raft River Geothermal Project to its
customers, the Green Tag has been consumed and should be retired. The problem is
that Green-e and the various state RPSs have different shelf lives. Hypothetically, if a
utility initially holds a Green Tag in its account to satisfy a RPS requirement (without a
specified shelf life) but then circumstances later dictate the Green Tag to be sold
instead, the Green Tag wil have no value to a buyer if Green-e certification is required
and the 18to 21-month shelf life has passed.
IDAHO RURAL COUNCIL COMMENTS
On the morning of January 7, 2009, Idaho Power received several questions
pertaining to this docket from the Idaho Rural Council via emaiL. Although Idaho Rural
Council Comments filed with the Commission on January 8, 2008 at 9:39 a.m. state that
IDAHO POWER'S REPLY COMMENTS-4
the Company had not responded, Idaho Power had in fact fully responded to the Idaho
Rural Council's questions by email on January 7, 2009 at 6:49 p.m.
CONCLUSION
Idaho Power takes seriously its obligation to be a good steward of the
environment while providing its customers low rates and excellent customer service.
The sale of Green Tags pits maximization of revenue from tag sales to offset customer
rates against retention of the environmental attributes of renewable generation that
customers increasingly insist Idaho Power promote. According to a 2008 national public
opinion survey conducted by the Edison Electric Institute, "About nine in ten say they
support expanding renewable resources of electric power at an increased cost of up to
20%."1 As described in the Application, both the State of Idaho Energy Plan and Idaho
Power's customers support additional investment in renewable power and retention of
the environmental benefits associated with it.
To maximize revenues that offset customer rates through the sale of Green
Tags, Idaho Power wil be constrained in how it describes its generation resources to
customers lest it inappropriately imply that the green properties associated with
renewable generation remain with its portolio. Idaho Power is not concerned about the
marketing implications of sellng Green Tags. Rather, Idaho Power is concerned that it
wil not be able to explain in a manner that customers wil find satisfactory that the
renewable resources in its portolio are no longer "green" because those propert rights
have been contracted away. Idaho Power views retention of the renewable attributes of
its qualified renewable resources, and subsequent retirement of the Green Tags, as
both a customer service and customer satisfaction issue. Customers increasingly want
i EEl National Public Opinion Monitor Ql 2008 E-Forum, May 19,2008.
IDAHO POWER'S REPLY COMMENTS - 5
Idaho Power to supply energy from renewable resources and, to the extent it is in Idaho
Power's generation portolio, customers believe they are paying for it in their rates. The
only way the Company can satisfy this customer expectation is to keep the Green Tags
-- to do otherwise would strip away the renewable qualities that customers desire.
For these reasons, as well as those stated in its Application, Idaho Power
respectfully requests the Commission authorize Idaho Power to retire the Green Tags it
has obtained or wil obtain in the future.
DATED at Boise, Idaho this 1l ~ay of January 2009.
Jllj.~~NORDTRO~~
Attorney for Idaho Power Company
IDAHO POWER'S REPLY COMMENTS-6
CERTIFICATE OF SERVICE
~I HEREBY CERTIFY that on the 1k day of January 2009, I served a true and
correct copy of the within and foregoing document upon the following named parties by
the method indicated below, and addressed to the following:
Commission Staff
Kristine A. Sasser
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
.lHand Delivered
U.S. Mail
_ Overnight Mail
FAX
.i Email kristine.sasserßYpuc.idaho.gov
Industrial Customers of Idaho Power
Peter J. Richardson, Esq.
RICHARDSON & O'LEARY PLLC
515 North 27th Street
P.O. Box 7218
Boise, Idaho 83702
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email peterßYrichardsonandoleary.com
Snake River Allance
Ken Miler
Snake River Allance
P.O. Box 1731
Boise, Idaho 83701
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email kmilerßYsnakeriverallance.org
Idaho Rural Council
Richard Carlson
P.O. Box 21
Filer, Idaho 83328
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email carlsonrßYfilertel.com
Renewable Nortwest Project
Idaho Conservation Lea,Que
Suzanne Leta Liou and Betsy Bridge
P.O. Box 844
Boise, ID 83701
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email bbridgeßYwildidaho.org
££)~
LISA D. NO DSTROM
IDAHO POWER'S REPLY COMMENTS - 7