20090126final_order_no_30720.pdf

Office of the Secretary
Service Date
January 26, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATIONOF IDAHO POWER COMP ANY FOR
AUTHORITY TO RETIRE ITS GREENTAGS. CASE NO. IPC-08-
ORDER NO. 30720
On November 14, 2008, Idaho Power Company filed an Application with the
Commission seeking authority to "retire" the Green Tags it has obtained or will obtain in the
future. By acquiring, retaining, and retiring the Green Tags, Idaho Power can conform with
certification standards while improving its renewable portfolio , increasing its use of renewable
energy, and aligning with Idaho s interests in promoting renewable energy.
On December 11 , 2008, the Commission issued a Notice of Application and Notice
of Modified Procedure and set a 28-day comment period. Order No. 30701. Several
organizations and individuals, including Staff, filed comments. The Company filed reply
comments in an effort to clarify what it believed to be confusion about several of the Green Tag
terms and concepts. After reviewing the Application and comments, we approve Idaho Power
request to retire its Green Tags.
THE APPLICATION
Idaho Power Application describes Green Tags as tradable environmental
commodities that create value for the environmental and social benefits of the non-energy
attributes of renewable energy generation. Essentially, the entity that possesses a Green Tag
holds the legal right to make claims about the environmental benefits associated with renewable
energy. A Green Tag is produced for each megawatt-hour (MWh) of electricity generated by an
eligible renewable energy resource. An active market exists for the purchase and sale of Green
Tags.
Idaho Power has two facilities (the Elkhorn Wind Project and the Raft River
Geothermal Project) that qualify as renewable energy resources. These facilities have generated
more than 320 000 MWh of Green Tags in 2007 and 2008. If Idaho Power were to sell the
Green Tags from these facilities then, according to the certification standards, Idaho Power
1 "Renewable portfolio" generally refers to the portion of the Company s electricity produced by renewable
resources such as wind, solar, biomass, and geothermal energies.
ORDER NO. 30720
would lose the right to claim any environmental attributes associated with these two renewable
energy resources. Under the certification standards, a person or entity buying the Green Tag
possesses the exclusive right to claim to have purchased "renewable" energy. In contrast, by
retiring" or retaining the Green Tags, Idaho Power can communicate that it is generating and
promoting renewable energy.
Idaho Power contends that the acquisition and retention of Green Tags is necessary to
accurately represent the renewable energy component of its resource portfolio. Acquiring and
retaining Green Tags assures Idaho Power s customers that it acquires or generates energy from
renewable resources. The Company recognizes that the State of Idaho has no requirement that
electric utilities possess Green Tags. But because Idaho Power s portfolio includes both
renewable resources and purchases from renewable energy resources, retaining Green Tags
would allow the Company to satisfy future federal or state laws imposing renewable energy
standards.
Idaho Power s Application states that the Company remains committed to developing
a diverse generation portfolio to better provide reliable, responsible, and affordable energy for
future generations.
THE COMMENTS
Staff reviewed the Application and recommended that the Commission deny the
retirement and approve the sale of Green Tags generated by Idaho Power. Because Idaho law
does not currently mandate that utilities comply with a Renewable Portfolio Standard (RPS), the
only way for an Idaho utility to realize value in a generated Green Tag is through its sale. Staff
argued that, should Idaho adopt RPS requirements, there is no guarantee previously "retired"
Green Tags would be counted toward the utility s portfolio. Thus, Staff recommended that the
Green Tags be sold and that the proceeds be returned back to customers through the PCA.
Alternatively, Staff recommended that Idaho Power hold the proceeds in a dedicated account to
be applied toward power purchased from new renewable projects.
The Industrial Customers of Idaho Power, the Idaho Rural Council, and two
residential customers submitted comments in support of the sale of Idaho Power s Green Tags.
These comments submit that the only tangible benefit that can be realized by Green Tags is
through their sale, with proceeds applied toward the cost of energy for ratepayers. The
proponents of selling the Green Tags maintain that the environmental benefits of Idaho Power
ORDER NO. 30720
green" energy facilities are realized by Idaho residents, regardless of whether the Company is
able to advertise its green facilities
' "
attributes" as a condition of Green Tag sales.
The Idaho Conservation League, the Renewable Northwest Project, the Snake River
Alliance, and one residential customer submitted comments in support of Green Tag retirement.
The proponents of retirement argue that it allows the Company to promote renewable energy
generation by advertising current renewable energy projects. In addition, retirement reduces the
Company s exposure in the event of future RPS or Green Tag regulations.
Idaho Power filed reply comments stating that it viewed retirement of Green Tags as
both a customer service and customer satisfaction issue. Retiring Green Tags would allow the
Company to communicate to its customers that it employs renewable resources as part of its
energy generation.
COMMISSION FINDINGS
Having fully reviewed the Application and comments in this proceeding, the
Commission approves Idaho Power Company s request to retire its Green Tags. The likelihood
of federal regulation regarding renewable energy and carbon emission cannot be overstated. The
Commission finds that any potential savings through rates for customers in the short-term might
result in the need for exponentially greater increases in rates in the future in order to meet
mandated renewable energy standards. Moreover, by retiring the Green Tags, Idaho Power
retains the right to publicize and promote its renewable energy resources in a way that informs
customers and satisfies their expectations of the utility.
We further find that approving the present Application comports with several policies
of the Idaho Energy Plan. In particular, retiring Green Tags at this time promotes the
development of renewable resources, diversifies Idaho Power s generation portfolio, and yet
preserves the Company s ability to meet changes in energy policy. State Energy Plan, Policies
, 5, 10-11. Retiring these Green Tags now does not foreclose sales of future tags depending
on possible changes in energy policies.
ORDER
IT IS HEREBY ORDERED that Idaho Power Company s Application to retire its
Green Tags generated by the Elkhorn Valley Wind Project and the Raft River Geothermal
Project is approved.
ORDER NO. 30720
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 9 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ;;2.3
day of January 2009.
~~'- ~ ~!
MACK A. REDFORD, PRESIDENT
ARSHA H. SMITH, COMMISSIONER
ATTEST:
Je ,D. Jewell
Co mission Sec etary
O:IPC-08-24 ks2
ORDER NO. 30720