20090420Brief on Reconsideration.pdf

1SIEW~POR(I
An IDACORP Company
LISA D. NORDSTROM
Senior Counsel
April 20, 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
GREEN TAGS
Dear Ms. Jewell:
Enclosed please find for filing an original and seven (7) copies of Idaho Power
Company's Reply Brief on Reconsideration 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,~fQ~~
Lisa D. Nordstrom
LDN:csb
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
Tel: [phone]
Fax: [phone]
Inordstromcæidahopower.com
bkline(âHdahopower.com
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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 MAnER 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 COMPANY'S REPLY
) BRIEF ON RECONSIDERATION
)
Idaho Power Company ("Idaho Powet' or the "Company" or the "Applicant"),
pursuant to Order No. 30743, hereby respectfully submits its Reply Brief on
Reconsideration.
I. INTRODUCTION
A. Idaho Power's Request
In its Application filed on November 14, 2008, Idaho Power requested that the
Commission authorize it to retire the Green Tags, or Renewable Energy Credits
("RECs"), associated with its renewable resources on behalf of its customers. By
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION-1
acquiring, retaining, and later retiring the Green Tags generated with Company-
sponsored renewable projects, Idaho Power can: (1) comply with standards regarding
characterization of its resource portolio while clearly communicating the Company's
renewable portolio to customers, (2) meet customer expectations for increased use of
renewable energy, (3) align with state interests in promoting renewable energy, and (4)
plan to align with future federal Renewable Portolio Standard ("RPS") legislation. On
January 16, 2009, Idaho Power filed Reply Comments to clarify several of the terms and
concepts used in its Application and comments filed by others.
Idaho Power respectfully requests that the Commission. affrm its findings in
Order No. 30720 that approved the Company's request to retire its Green Tags
generated by the Elkhorn Valley Wind Project and the Raft River Geothermal Project.
However, in light of recently proposed legislation to institute a federal Renewable
Portolio Standard,1 the Company requests the Commission authorize Idaho Power to
"bank" Green Tags as well as retire them to satisfy state or federal RPS requirements.
Allowing Idaho Power the option to either retire or bank its Green Tags wil enable the
Company to stockpile tags now, when the Green Tags are presumably less expensive
to acquire, in anticipation of federal mandatory renewable energy requirements.
Assuming that banked tags wil be applied to a federal RPS or otherwise
consumed/retired, Idaho Power wil also be acting in accordance with the goals set out
in the 2007 Idaho Energy Plan and the Idaho Strategic Energy Allance initiated by
Governor Otter's 25 x '25 initiative.
1 Renewable Portolio Standards require a certain percentage of a utility's power plant capacity or
generation to come from renewable sources by a given date.
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION - 2
B. Green Tag Conceptual Overview
A Green Tag is a tradable financial instrument that represents the environmental
attributes of renewable energy, typically associated with one megawatt-hour ("MWh") of
renewable energy. In a Green Tag market, the environmental attributes can be
disassociated from the renewable energy (MWh) and sold as a separate product whose
price reflects the premium paid for the environmental attributes associated with
renewable energy. Once a Green Tag is sold separately (or "unbundled") from the
energy, the energy has no favorable environmental attributes and the energy becomes
a homogenous ("null power" or "brown power") product.
The market value of a Green Tag is determined by its age, geographic origin,
and type of generation, as well as supply and demand. Two markets exist for Green
Tag transactions: the compliance market and the voluntary market.
The compliance (involuntary) market has been created by the various
requirements that a Green Tag buyer must satisfy to comply with a RPS. A typical RPS
wil allow the buyer (utility) to meet the RPS requirements by creating Green Tags from
their own qualifying renewable generation units and/or purchasing Green Tags from
another party's qualifying renewable generation units.
The voluntary market is comprised of the various individuals and businesses that
wish to claim they are using renewable energy. Green-e, a voluntary consumer-
protection program administered by the Center for Resource Solutions, has established
industry recognized standards2 for Green Tags. These "Green-e standards" have been
adopted by the majority of the participants in the voluntary market. Voluntary market
2 The Standard may be found online at: http://w.green-e.org/docs/energvJAppendix%20D Green-
e%20Energy%20National%20Standard.pdf.
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION - 3
buyers include Intel, PepsiCo, Dell, Whole Foods Market, the Pepsi Bottling Group,
Johnson & Johnson, the U.S. Air Force, Cisco Systems, the City of Houston, and the
City of Dallas. These entities are the top ten (10) green power purchasers in the
Environmental Protection Agency's U.S. Green Power Partnership.3
Although the compliance and voluntary markets may set separate values for the
Green Tags, they are interrelated in that a Green Tag may qualify to be used in either
market. Thus, the two markets do not necessarily operate independently of each other.
Once a Green Tag is used by the owner to satisfy a voluntary or RPS
requirement, the Green Tag cannot be sold, used for future compliance, or for any other
"green" representation. Green Tag tracking systems like the Western Renewable
Energy Generation Information System ("WREGIS") are accounting systems that create
a Green Tag based upon the energy generated at a qualifying renewable energy
generation facility and then track the use and disposition of the individual Green Tag to
ensure that it is not used for multiple purposes.
II. DISCUSSION
In Order No. 30743, the Commission requested Idaho Power clarify its position
with regard to the following six issues:
1. The concept of "shelf life" for a Green Tag that is neither retired nor
sold;
2. Federal and/or state guidelines regarding shelf life;
3. Federal and/or state rules that disallow the use of previously retired
Green Tags to meet current/future renewable portolio standards;
3 ww.epa.gov/greenpower
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION-4
4. The monetary value that the disputed Green Tags would have if
sold in the present market;
5. The differential that such value would have if credited back to each
ratepayers' bil (i.e., what difference an individual ratepayer would see in his or her bil if
the Green Tags were sold and credited back to the ratepayers) and the amount of time
that such credit would be in place; and
6. Whether retiring Green Tags in order to use credits to promote
Idaho Power's renewable resources amounts to image advertising.
A. The Concept Of "Shelf Life" For A Green Tag That is Neither Retired
Nor Sold
"Shelf life" generally refers to a time limit on the use of each Green Tag. If a
Green Tag is not sold or otherwise "consumed" on a timely basis, its value wil dissipate.
No universal definition of shelf life exists; each jurisdiction's RPS has its own definition
of Green Tag shelf life and viability. Shelf life also has an indirect impact on the banking
of Green Tags. While Green Tags may be banked indefinitely in WREGIS, a banked
Green Tag that is older than the shelf life requirements of a particular jurisdiction cannot
be used to satisfy that jurisdiction's RPS requirement.
Green-e and WREGIS are complimentary programs that both use verifiable data
to log renewable electricity transactions. For renewable electricity generated within the
Western Interconnect, Green-e requires that participants use WREGIS to provide
retirement reports for certified products sources within the WREGIS footprint. WREGIS
was developed by the Western Electricity Coordination Council ("WECC") in
cooperation with numerous utility, governmental, and environmental groups to provide a
universal, independent, Green Tag tracking system. The goal of WREGIS is to provide
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION - 5
a standard of reporting and to prevent double counting. Since its inception in late 2007,
WREGIS has quickly become the tracking system preferred by many western states
and regulatory agencies.
In essence, WREGIS acts like a bank into which generators like Idaho Power
may deposit qualifying generation. WREGIS then issues4 a Green Tag certificate for
each MWh of qualifying generation to the generator's WREGIS active account. The
generator may then choose to sell or transfer the certificate to another part, or move it
to a reserve or retirement sub-account.
When the Green Tag is transferred to a retirement or reserve account, the
purpose of the transfer is recorded.s Reserved certificates can be sold to someone who
does not have an account in WREGIS. Reserved certificates are considered "used" and
are taken out of circulation permanently with no further transfers allowed in WREGIS.
When Green Tags are committed to a compliance purpose, they are typically
transferred to the participant's WREGIS retirement sub-account. WREGIS certificates
may be retired only once and the retirement is permanent. Retirement can be used to
show compliance with state or voluntary programs. Regulators may then use WREGIS
data to verify that a utility's certificates meet their jurisdiction's specific eligibility
requirements. WREGIS stil tracks the Green Tags in the retirement sub-account, but
those Green Tags may not be traded or used for any other purpose. By comparison,
4 One MWh = one WREGIS certificate. WREGIS issues certificates ninety (90) days after the end
of the generation period. WREGIS certificates never expire.
5 WREGIS retirement categories include: Used by the Account Holder for a Municipal Renewable
Portolio Standard, Used by the Account Holder for a Utility Green Pricing Program, Used by the Account
Holder for a Green Electricity Product, Used by the Account Holder for a REC-Only Product, Sold via
Paper Attestation, and Other.
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION - 6
maintaining Green Tags within a WREGIS active sub-account keeps the Green Tags
available for any purpose.
In the voluntary Green Tag market, the accepted standard "shelf life" as
recommended by Green-e is approximately eighteen (18) months.6 Most states have
decided that voluntary Green Tag sales should not be counted toward meeting the RPS,
in part because the purchaser may also be making claims against the environmental
attributes of the green power, when that environmental benefit was mandated by the
RPS policy.
In the compliance Green Tag market, "shelf life" refers to the length of time a
Green Tag can be used to comply with a state's RPS requirements. For example, if a
RPS establishes a shelf life of three (3) years for Green Tags, a Green Tag created in
January 2009 could be used to meet a January 2012 RPS requirement if the Green Tag
has been "banked." The banking process is simply the concept of holding the Green
Tags for use at a future date. Longer shelf lives increase the market's ability to smooth
out the impact of seasonal and annual weather variations on renewable generation.
WREGIS and other similar regional systems track Green Tag details and activity
to enable organizations to monitor the contents of their Green Tag banks. In some
states like California, an additional banking designation is made in the state's RPS
compliance system.
Idaho Power's Green Tags are currently banked in its active WREGIS account
while the Company monitors pending federal RPS legislation and the outcome of this
docket. If Idaho Power is not required to sell the Green Tags, it may hold them in its
6 According to Section III(B) of the Green-e Energy National Standard (Version 1.6), Green-e wil
only certify renewable energy generated in the calendar year in which the product was sold, the first three
(3) months of the following calendar year or the last six (6) months of the prior calendar year.
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION - 7
active account until final rules of a federal RPS are issued while possibly retaining its
ability to explain to customers how Idaho Power generates the electricity they consume.
If its request to bank or retire Green Tags were approved, Idaho Power now would only
"retire" Green Tags in the sense that they would not be marketed for sale; they would be
moved to a retirement sub-account when necessary to satisfy a future state or federal
RPS.
B. Federal And/Or State Guidelines Regarding Shelf Life
1. Federal Guidelines
The national renewable portolio standards proposed by the 111th Congress do
not address active or retired Green Tags that are currently in existence. Both H.R. 8907
and S. 4338 would amend Title Vi of the Public Utility Regulatory Policies Act of 1987
("PURPA")9 to require retail electric suppliers to gradually increase their renewable
energy generation to 25 percent of a base amount by 2025. Both bils describe the
shelf life of a prospective "federal renewable energy credit" as three (3) years after the
compliance year in which the federal renewable energy credit was issued. The federal
legislation does not indicate how it wil reconcile existing state RPS rules with the
federal RPS, only that the Secretary of Energy shall coordinate with the state programs
and preserve their integrity. While the ability to apply existing Green Tags to the federal
RPS requirements is an issue that wil be addressed during future rulemaking, this is
7 The American Renewable Energy Act was introduced to the U.S. House of Representatives on
February 4, 2009, by sponsor Rep. Edward Markey (MA). It has since been referred to the House
Committee on Energy and Commerce.
8 S. 433 was introduced on February 12, 2009, by Sen. Tom Udall (NM) and has since been
referred to the Senate Committee on Energy and Natural Resources.
9 16 U.S.C. 2601, et seq.
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION - 8
likely an area in which states and utilities wil lobby to have the federal government
recognize banked credits in a manner similar to existing state RPSs.
Although the Industrial Customers of Idaho Power may imply otherwise, the
federal legislation does NOT specifically state that existing Green Tags wil not count
toward federal requirements. S. 433 and H.R. 890 envision a 2012 effective date.
Given the investment many utilities may have to make to come into compliance so
quickly, it is not unreasonable that future rules implementing a federal RPS may allow
Green Tags from previous years as a way to mitigate rate impacts and smooth
interactions between state and federal requirements. Moreover, precedent exists in
state RPS programs for allowing existing Green Tags to meet future requirements. For
example, the Oregon RPS was passed in 2007 with 2011 as its first compliance year.
The final rules permit Green Tags generated the year the law was passed and later to
be used to comply with the Oregon RPS.1o
2. State Guidelines
Many states allow banked Green Tags to be used for compliance with their
Renewable Portolio Standards. The "shelf life" of a Green Tag can be as short as three
(3) months (New England), or as long as five (5) years (Colorado).11 Oregon,12
10 OAR 330-160-0030.
11 4 CCR 723-3-3654(i)(III).
12 ORS 469A.140(2) states: "Renewable energy certificates that are not used by an electric utilty
or electricity service supplier to comply with a renewable portolio standard in a calendar year may be
banked and carried forward indefinitely for the purpose of complying with a renewable portolio standard
in a subsequent year." Although page 4 of the Industrial Customers' brief states that the proposed
rulemaking in AR 518 would limit Green Tag banking to one (1) year, Idaho Power disagrees. Under the
proposed rules, an electric company may use a Green Tag to comply with both the RPS and power
source disclosures under OAR 860-038-0300 only if both uses occur in the same year. See also OPUC
Staff Comments filed on January 7 and 12,2009, in AR 518 (Phase II).
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION - 9
California,13 Utah,14 and Arizona15 currently allow Green Tags to be "banked" for an
indefinite period for RPS compliance. States allowing banked credits subject to an
expiration date include Nevada,16 Washington,17 and Montana.18 The California Public
Utilities Commission's Rulemaking 06-02-012 currently proposes Green Tags be
maintained in active WREGIS sub-accounts for up to three (3) compliance years
(including the year of generation) from the date the electricity associated with the Green
Tag is generated. Although the Industrial Customers of Idaho Power interpreted this as
creating a three-year shelf life, the draft decision would require that California utilities
either sell or transfer Green Tags into a WREGIS retirement account by the end of the
third compliance year. The purpose of this proposed rule change is to maintain market
liquidity while allowing a utility to make a good estimate of its future compliance needs,
yet discourage hoarding of Green Tags that may distort the market.19 The proposed
rules do not affect the unlimited time period for which a utility could apply Green Tags to
13 California Pub. Util. Code § 399.14(a)(2)(C)(1) provides in relevant part: "The commission shall
adopt . . . (f)lexible rules for compliance, including rules permitting retail sellers to apply excess
procurement in one year to subsequent years or inadequate procurement in one year to no more than the
following three years."
14 Utah Code Section 54-17-603(7). Renewable energy certificates do not expire and may be
banked.
15 ACC R14-2-1804(C). An Affected Utilty may use Renewable Energy Credits acquired in any
year to meet its Annual Renewable Energy Requirement.
16 NAC 704.8931. Portolio energy credits expire four (4) years after the compliance year in
which the portolio energy credits are certified.
17 W AC 480-109-020 (2). Renewable energy credits produced during the target year, the
preceding year, or the subsequent year may be used to comply with this annual renewable resource
requirement provided that they were acquired by January 1 of the target year.
18 MCA 69-3-2004 (9). The public utility may carry forward the amount by which the standard was
exceeded to comply with the standard in either or both of the two (2) subsequent compliance years.
19 Proposed Decision of ALJ Simon Authorizing Use of Renewable Energy Credits for
Compliance with the California Renewables Portolio Standard, Rulemaking 06-02-012 at pp. 53-56
(mailed 3/26/2009). This can be found online at: http://docs.cpuc.ca.gov/efile/PD/99016.pdf.
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION - 10
satisfy the California RPS. So while the Green Tags might reside in a WREGIS
"retirement sub-account," a utility could stil bank excess WREGIS certificates in the
retirement account for California's RPS compliance indefinitely.
Although the state of Idaho does not have a mandatory RPS requirement,
Governor C. L. "Butch" Otter's 25 x '25 initiative established the Idaho 25 x '25
Renewable Energy Council (later renamed the Idaho Str ategic Energy Allance) to
further the goal of providing 25 percent of Idaho's energy needs through renewable
sources by the year 2025.20 The original 25 x '25 effort was focused primarily upon
using agricultural and forestry resources to meet 25 percent of the state's energy needs
by 2025 but was later expanded by Idaho's Offce of Energy Resources ("OER") to
include sustainable resources, energy effciency and conservation, and energy
development in accordance with the 2007 Idaho Energy Plan.21 The policies set forth in
the Idaho Energy Plan promote development of renewable resources, diversification of
Idaho Power's generation portolio, and preservation of the Company's ability to meet
changes in energy policy. Even in the unlikely event a federal RPS was not
implemented in the next several years, retention of the Green Tags wil benefi Idaho's
renewable energy goals rather than those of other states or businesses outside Idaho.
C. Rules That Disallow Use of Retired Green Tags to Meet
Current/Future RPS
The word "retired" exists in a number of contexts with regard to Green Tags. In
the most general sense, "retirement" is the process by which the owner of a Green Tag
actually consumes the Green Tag to meet a specific RPS requirement for a given year
20 Executive Order 2007-20 can be found at: http://gov.idaho.gov/mediacenter/execorders/eo07/eo200720.html.
21 The 2007 Idaho Energy Plan can be found at: http://ww.energy.idaho.gov/eneray plan 0126.pdf (page 47).
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION -11
rather than merely banking it. It is unlikely that a Green Tag used to satisfy a state RPS
could be used for any future transaction or purpose (e.g., to meet a future federal RPS
requirement) because it has already been used. This is in contrast to the so-called
"retirement" of California RECs into a WREGIS sub-account described above, when
California utilities irrevocably designate but do not actually consume specific Green
Tags to satisfy the California RPS at some indeterminate point in the future.
If the intended use of a Green Tag is to meet a RPS requirement, the Green Tag
could be kept indefinitely in the utility's Green Tag account (assuming no shelf life
limitations) until such time when the utility retires the Green Tag to meet a RPS
requirement. Should Idaho Power represent 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 for purposes of the voluntary market and cannot be
sold without running afoul of Green-e22 certification or Federal Trade Commission23
rules. However, Idaho Power would stil be able to describe its power source mix to
customers and possibly fulfill its obligations under a RPS because it has retained the
Green Tags to back up its claims. However, it should be noted that Oregon has a
proposed rulemaking in AR 518 in which it would allow a utility to use a Green Tag to
comply with both the RPS and power source disclosures required by OAR 860-038-
0300, only if both uses occur in the same calendar compliance year. In other words, if
22 The Green-e Code of Conduct and Customer Disclosure Requirements can be viewed at:
http://ww.green-e.org/docs/energy/Appendix B-National Code of Conduct Cust Disclosure.doc.
23 The Federal Trade Commission's Guides for the Use of Environmental Marketing Claims are
outlined in 16 CFR Part 260. See http://ww.ftc.gov/bcp/grnrule/guides980427.htm. The National
Association of Attorneys General Environmental Marketing Guidelines for Electricity can be found at:
http://apps3.eere.energy.gov/greenpower/buying/pdfs/naag 0100. pdf.
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION -12
approved, a REC banked for future RPS compliance could be included in power source
disclosures only for the year the REC is used for RPS compliance.
As previously stated, the federal RPS legislation does not address whether active
or retired Green Tags may be used to satisfy a federal renewable generation
requirement. In the states of Oregon, Utah, and Colorado, utilities that use Green Tags
to satisfy the state RPS may also use them to satisfy a federal RPS, but not those of
other states.24 Although Arizona's Green Tags have unlimited shelf life, once a
Renewable Energy Credit is used to satisfy Arizona's Renewable Energy Standard, "the
credit is retired and cannot be subsequently used to satisfy these rules or any other
regulatory requirement.,,2s
D. Monetary Value of Disputed Green Tags if Sold in Present Market
Idaho Power Company's resource portolio includes both renewable resources
and electricity purchased from renewable energy resources. From November 2007
through March 2009, Idaho Power wil have obtained approximately 356,021 Green
Tags from the 101-MW Elkhorn Valley Wind Project located in eastern Oregon. The
Company has also obtained 3,452 Green Tags from the Raft River Geothermal Project
from May 2008 through March 2009. Attachment NO.1 details the number of Green
Tags received monthly for each project. Each of these Green Tags, depending on their
ability to become Green-e certified, could have value in the voluntary market that varies
according to its vintage. Attachment No.2 is an April 17, 2009, market quote provided
by Spectron Energy Inc., a broker of energy and environmental products. Using the
24 ORS 469A.140(4). Utah Code Section 54-17-603(9). 4 CCR 723-3-3654(m).
25 ACC R14-2-1804(D).
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION - 13
midpoint between the bid and offer quotes26 listed for WECC Green-e Certifiable Wind,
Idaho Power has estimated the present value of its November 2007 -March 2009 Green
Tags at $1,313,797. This amount presumes that Idaho Power can meet Green-e
certification standards (i.e., has not already consumed the environmental attributes of its
2007-2008 Green Tags). As described in its Application, Idaho Power believes that its
customer communications in 2007 and 2008 may have impaired the Company's ability
to certify its Green Tags from those years.
E. Potential Credit to Customer Bils
If the Commission determined that Green Tags generated by the Elkhorn Valley
Wind Project and the Raft River Geothermal Project should be sold, it is conceivable
that the proceeds would offset the 2009 Power Cost Adjustment ("PCA") much like S02
allowances do. Using the $1,313,797 value estimated above, the Idaho base revenue
requirement would decrease by 0.17 percent. As shown on Attachment NO.3, the
potential credit to a typical residential customer using 1,050 kWh/month during the 2009
PCA year would be 9 cents a month ($1.09 for the PCA year).
F. Image Advertising
Although the Industrial Customers of Idaho Power's Reconsideration Petition and
Brief refer to "image advertising," neither document explains specifically what is
encompassed by that term. Idaho Power interprets "image advertising" as utility-funded
advertising that is designed to make customers feel more favorable toward that utility or
to consume additional services of that utilty. Such advertising is not generally
recoverable in utility rates. On the contrary, informational advertising that is of an
26 The "bid" quote is the price Green Tag buyers are willng to pay. The "offet' quote is the price
at which Green Tag owners are willng to selL.
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION -14
educational nature or otherwise beneficial to utility customers does not constitute
"image advertising" and may be included in utility rates.
Although Idaho does not have codified rules about the recovery of advertising
expenses, Oregon's rules govern a portion of Idaho Power's service territory and may
be instructive here. The state of Oregon presumes that "Utility Information Advertising
Expenses" are just and reasonable in a rate proceeding up to 0.125 percent of gross
retail operating revenues.27 The Oregon Administrative Rules define Utility Information
Advertising Expenses as those "advertising expenses, the primary purpose of which is
to increase customer understanding of utility systems and the function of those systems,
and to discuss generation and transmission methods, utility expenses, rate structures,
rate increases, load forecasting, environmental considerations, and other contemporary
items of customer interest. ,,28 To the extent Idaho Power's explanation of its generation
resource mix or retirement of Green Tags can even be considered "advertising," it would
likely be recoverable in Idaho Power's Oregon jurisdiction as informing customers of its
generation methods and addressing "contemporary items of customer interest." While
the concept of "image advertising" implies self-promotion, the source of Idaho Power's
electricity is the very type of information that the Company is required to report to
customers under the 2007 Idaho Energy Plan29 and Oregon's Labeling Requirements
Rules.3D
27 OAR 860-026-0022(3)(a).
28 OAR 860-026-0022(1)(g).
29 Action E-18: Idaho utilities shall report annually to their retail customers their sources of
electricity (their "fuel mix").
30 OAR 860-038-030), et seq.
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION -15
As previously explained in Idaho Power's Application, the sale of its Green Tags
would limit Idaho Power's ability to communicate on a basic level with customers on
subjects related to its generation portolio. Because Idaho Power is not permitted under
the Green-e Standard to imply that customers are receiving the benefits of the
renewable energy in its system when Green Tags are sold, Idaho Power wil have
diffculty clearly stating the resources in Idaho Power's generation mix and those
delivered to customers. Under the Green-e Standard, Idaho Power would be prohibited
from using visuals (including charts, graphs, line art, etc.) depicting green resources as
part of the energy delivered to customers. The sale of all of its Green Tags that are (or
capable of being) Green-e certified would also preclude Idaho Power from using
photographs or other imagery depicting wind turbines, solar, or other green resources
when describing or displaying its resource portolio if all environmental attributes have
been relinquished.
To maximize revenues that offset customer rates through the sale of Green
Tags, Idaho Power would 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
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION - 16
Idaho Power to supply energy from renewable resources and, to the extent it is in Idaho
Powets 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.
The term "image advertising" suggests that somehow Idaho Power would be
creating a perception of the Company that may not be backed by its functional
attributes. Idaho Power's commitment to acquire and integrate renewable energy is not
a mere perception; it is outlined in its Integrated Resource Plan and demonstrated by
the renewable wind and geothermal energy it currently has under contract. As
customers increasingly inquire31 of the Company's renewable generation portolio and
carbon emissions, Idaho Power simply wishes the opportunity to forthrightly answer its
customers without the double-speak and asterisks that Green-e certification would
require in order for Idaho Power to the sell Green Tags in the voluntary market.
III. CONCLUSION
Idaho Power is doing its best to balance its need to be responsive to customer
needs and inquiries while maximizing the value of Green Tags for its customers.
Although much uncertainty exists as to what a federal RPS wil look like and whether
pre-existing Green Tags may be used to satisfy its requirements, few doubt that a
federal RPS wil be enacted in the next several years. To best position the Company
and its customers to transition to those new regulatory requirements, Idaho Power
believes it should bank the Green Tags in the anticipation of a federal RPS rather than
31 This is true even of industrial customers. Of nearly 100 Idaho Power industrial customers
surveyed quarterly, industrial customer inquiries about renewable energy have doubled from 2004 to
2008.
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION -17
sell them. In this manner, the Green Tags would be "retired" only in the sense that
Idaho Power customers would claim the environmental attributes at some point and the
Green Tags would not be sold on the voluntary market.
In light of the foregoing, Idaho Power more specifically respectfully requests that
the Commission issue an Order authorizing the Company to bank and/or retire Green
Tags to meet future state and/or federal RPS requirements rather than sell them in the
voluntary market.
Df\TED at Boise, Idaho, this 20th day of April 2009.
¿i1i~Lisa D. Nordstrom .
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION -18
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 20th day of April 2009 I served a true and correct
copy of IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION 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
-X Email kris.sassercæpuc.idaho.gov
Industrial Customers of Idaho Power
Peter J. Richardson, Esq.
RICHARDSON & O'LEARY PLLC
515 North 2ih Street
P.O. Box 7218
Boise, Idaho 83702
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
-l Email peter(ârichardsonandoleary.com
Snake River Allance
Ken Miler
Snake River Alliance
P.O. Box 1731
Boise, Idaho 83701
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
-l Email kmiler(âsnakeriverallance.org
Idaho Rural Council
Richard Carlson
P.O. Box 21
Filer, Idaho 83328
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
-l Email carlson rcæfi lerte i. com
Renewable Northwest Project
Idaho Conservation League
Suzanne Leta Liou and Betsy Bridge
P.O. Box 844
Boise, Idaho 83701
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
-l Email bbridgecæwildidaho.org
~12~LISA D. N' ST
IDAHO POWER COMPANY'S REPLY BRIEF ON RECONSIDERATION -19
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-24
IDAHO POWER COMPANY
MONTHLY GREEN TAGS RECEIVED
ATTACHMENT NO.1
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BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-24
IDAHO POWER COMPANY
SPECTRON ENERGY INC. MARKET QUOTE
ATTACHMENT NO.2
0.2
8-24
Reply Brief, IPC
Page 1 of 1
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-24
IDAHO POWER COMPANY
POTENTIAL CREDIT
ATTACHMENT NO.3
Idaho Power Company
Renewable Energy Credit (REe) Sales
Revenue Impact Analysis
Estimated Value of RECs*$1,313,797
Customer Share (95%)$1,248,107
Idaho Jurisdictional Share (95%)$1,185,702
Idaho Jursidictional Base Revenue $700,186,637
Estimated % Change in ID Base Revenue -0.17%
2008 Idaho Normalized Sales (kWh)13,689,144,862
Rate Impact per kWh $(0.00009)
Typical Monthly Resid. Bill Impact (1,050 kwh/mol $(0.09)
Typical Annual Resid. Bil Reduction (1,050 kwh/mol $(1.09)
Notes:
(*) Based on WECC Green-e Certifiable Wind Renewable Energy Credit prices reported by
Spectrometer on its April 17, 2009 price sheet.
Attchment NO.3
Case No. IPC-E-08-24
Reply Brief, IPC
Page 1 of 1