20090728final_order_no_30868.pdf

Office ofthe Secretary
Service Date
July 28, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO RETIRE ITS GREENTAGS. CASE NO. IPC-08-
ORDER NO. 30868
On June 8, 2009, the Industrial Customers of Idaho Power (ICIP) filed a Petition for
Clarification of the Commission s reconsideration Order No. 30818 issued on May 20, 2009
regarding Idaho Power s Application for authority to retire its Green Tags. After reviewing the
initial Application, our prior Orders and the Petition for Clarification, the Commission declines
to grant the Petition.
PROCEDURAL HISTORY
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. A Green Tag is a tradable environmental commodity attributable to renewable energy
generation. The entity possessing a Green Tag ! allegedly has a right to make claims about the
environmental benefits associated with renewable energy. For example, a utility that possesses a
Green Tag may claim that it is producing renewable energy and that it satisfies a state renewable
portfolio standard (RPS). Each megawatt-hour (MWh) of electricity generated by an eligible
renewable energy resource is equal to one Green Tag. Order No. 30701 at 1.
On December 11 , 2008, the Commission issued a Notice of ApplicationINotice of
Modified Procedure and set a 28-day comment period. Order No. 30701. Several organizations
individuals, and Staff filed comments. On January 16 2009, the Company filed reply comments.
On January 26, 2009, the Commission issued final Order No. 30720 approving the Company
request to retire its Green Tags.
On February 17, 2009, the Industrial Customers of Idaho Power (ICIP) filed a
Petition for Reconsideration alleging that retirement of Green Tags sets poor ratemaking
precedent and senselessly destroys the value of ratepayer property. Petition for Reconsideration
at 2. Thereafter, the Commission granted reconsideration by written briefs, followed by oral
argument in order to more fully examine the issues presented by ICIP.
1 A Green Tag is often referred to as a "renewable energy credit" (REC).
ORDER NO. 30868
FINAL ORDER NO. 30818
On May 20, 2009, the Commission issued its Final Order on Reconsideration
granting ICIP's Petition. The Order directed Idaho Power to sell its eligible 2007 and 2008
Green Tags generated by the Elkhom Valley Wind Project and the Raft River Geothermal
Project and to include the proceeds from the sale in the Company s 2010 PCA calculation.
Order No. 30818.
The Commission found no compelling evidence that banking Green Tags generated
in 2007 and 2008 would lessen the Company s burden in meeting a future federal standard.
Accordingly, the Commission determined that "the best use of the Green Tags at issue in this
case is to sell them and use the proceeds to benefit Idaho Power ratepayers." Order No. 30818 at
4. In addition to ordering Idaho Power to sell its 2007 and 2008 Green Tags, the Commission
directed the Company "to formulate a prudent business plan outlining how it plans to manage
Green Tags generated in 2009 and later. This plan should be submitted to the Commission no
later than December 31 2009.Id.
THE PETITION FOR CLARIFICATION
ICIP seeks clarification regarding the treatment of Green Tags generated in 2009.
Specifically, ICIP argues that "(a)llowing until the end of (2009) to decide what to do with
vintage-2009 Green Tags will foreclose the option of maximizing their value for ratepayer
benefit." Petition for Clarification at 2. ICIP requests that the Commission determine "whether
or not the diminished value of2009 Green Tags sold in 2010 will be a shareholder liability.Id.
DISCUSSION AND FINDINGS
After reviewing ICIP's Petition for Clarification and the record in this case, we deny
the Petition for two reasons. First, ICIP's request that we address the value of 2009 Green Tags
is clearly beyond the scope of this case. This docket required the Commission to address the
treatment of Idaho Power s 2007 and 2008 Green Tags. On reconsideration we granted ICIP'
request that the 2007 and 2008 Tags be sold. As part of our reconsideration Order we directed
Idaho Power to devise a business plan to address future Green Tags. We anticipate that after
Idaho Power files its business plan that we will initiate a new case to examine the plan and the
Company s proposed treatment of its 2009 Tags.
Second, ICIP asks us to declare that shareholders will be liable for any reduction in
value if the 2009 Green Tags are sold in 2010. This statement is predicated on the assumption
ORDER NO. 30868
that the 2009 Tags are to be sold. However, this assumption is speculative and premature. What
the Commission ordered was for Idaho Power "to formulate a prudent business plan" to address
2009 and future Green Tags. The development of a business plan takes time to research and
prepare. After Idaho Power s business plan has been filed with the Commission and reviewed, it
will serve as the starting point for determining the best use of 2009 and future Green Tags.
Consequently, there is not a sufficient evidentiary record to serve as the basis for addressing
ICIP's liability concerns. We correspondingly await Idaho Power s submission of a business
plan that will maximize the value of its future Green Tags and we deny the Petition for
Clarification.
ORDER
IT IS HEREBY ORDERED that the Industrial Customers of Idaho Power s Petition
for Clarification is denied.
THIS IS A FINAL ORDER ON CLARIFICATION. 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 ~ 61-626.
ORDER NO. 30868
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ~8'i"1...
day of July 2009.
0~(~D. KEM ON SIDENT
ARSHA H. SMITH, COMMISSIONER
ATTEST:
~T"Je n D. Jewell
Commission Secretary
O:IPC-O8-24 ks5
ORDER NO. 30868