20081205Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF

FROM: KRISTINE SASSER
DEPUTY ATTORNEY GENERAL

DATE: DECEMBER 2, 2008

SUBJECT: IDAHO POWER’S APPLICATION FOR AN ORDER AUTHORIZING
THE RETIREMENT OF ITS GREEN TAGS, CASE NO. IPC-E-08-24

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 comply with
certification standards while clearly communicating the Company’s renewable portfolio1 to
customers, meet customer expectations for increased use of renewable energy, and align with
Idaho’s interests in promoting renewable energy. The Company requests that the Application be
processed by Modified Procedure.
THE APPLICATION
Idaho Power’s 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 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. However, by selling the Green Tags
from these facilities, Idaho Power loses the right to claim any environmental attributes gained
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.
DECISION MEMORANDUM 2
from these renewable energy resources. The person/entity buying the Green Tag retains the sole
claim to have purchased “renewable” energy. In contrast, by “retiring” the Green Tags Idaho
Power can clearly communicate the Company’s renewable portfolio to customers, meet customer
expectations for increased use of renewable energy, and align with State interests in promoting
renewable energy.
Idaho Power contends that the acquisition and retention of Green Tags is necessary to
accurately represent the renewable energy component of Idaho Power’s 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.
STAFF RECOMMENDATION
Staff has reviewed the Application and recommends that the case proceed by
Modified Procedure. Furthermore, Staff recommends that a 28-day comment period be
established.
COMMISSION DECISION
1. Does the Commission find that the public interest may not require a hearing to
consider the issues presented, and that this proceeding may be processed under Modified
Procedure?
2. Does the Commission wish to establish a 28 day comment period?

M:IPC-E-08-24_ks