20090316press release.htm

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Idaho Public Utilities Commission

Case No. IPC-E-08-24, Order No. 30743, Notice of Hearing for Oral Argument

March 16, 2009

Contact: Gene Fadness [phone], 890-2712

Commission will reconsider Green Tag issue

The Idaho Public Utilities Commission is agreeing to reconsider a Jan. 26 order that granted Idaho Power Company’s request to hold on to its Green Tags rather than sell them on the open market or to other utilities. It will take written comments from the parties in the case through March 30 and will conduct oral arguments on April 22.

A Green Tag, or Renewable Energy Credit, is issued to each utility for every megawatt-hour of electricity generated by an eligible renewable energy resource. An active market exists for the purchase and sale of Green Tags. Idaho Power’s Elkhorn Wind project in Oregon and its Raft River geothermal project in south-central Idaho generated more than 320,000 MWh of Green Tags for Idaho Power in 2007 and 2008.

The Jan. 26 order allowed Idaho Power to retire its Green Tags in anticipation of federal or state legislation that may require utilities to generate a specific amount of energy from renewable sources. Idaho Power said it needed to retire the Green Tags so it can represent to renewable energy certification programs and to its customers that it is meeting customer expectations for increased use of renewable energy.

But the Industrial Customers of Idaho Power, an organization representing the utility’s largest customers, maintains the Green Tags have no shelf life and cannot be used to meet future renewable portfolio standards. The industrial customers said the Green Tags constitute surplus property that should be sold to benefit ratepayers. If the market value of each tag generated through 2008 is between $5 and $6, as suggested by Idaho Power in its application, the value of the Green Tags produced through 2008 is between $1.6 million and $1.9 million.

Idaho Power has twice sold surplus sulfur emissions credits in a market program similar to the sale of Green Tags. In 2008, $16 million in proceeds from the sale of surplus SO2 credits was applied against the Power Cost Adjustment, lowering the surcharge assessed customers. In 2007, $70 million in SO2 sales was applied against the PCA.

Parties to the case include the Idaho Conservation League, the Renewable Northwest Project and the Snake River Alliance, all of which previously submitted comments supporting Idaho Power’s petition to retire the Green Tags.  Other parties include the Industrial Customers of Idaho Power, the Idaho Rural Council and the Public Utilities Commission staff, which operates separately from the commission.

The industrial customers and PUC staff supported selling the tags. The Idaho Rural Council supported retiring the green tags, but only if other options could not be found that would generate income while still protecting the utility’s right to claim the benefits of green tag ownership.

In its decision to reconsider, the commission is asking parties to the case to provide written comment on these issues:

The concept of a “shelf life” for a Green Tag that is neither retired nor sold;

Federal and/or state guidelines regarding shelf life;

Federal and/or state rules that disallow the use of previously retired Green Tags to meet current and future Renewable Portfolio Standards;

The monetary value that the disputed Green Tags would have if sold in the present market;

The differential that such value would have if credited back to each ratepayer’s bill; and

Whether retiring Green Tags in order to use the credits to promote Idaho Power’s renewable resources amounts to “image advertising.”

The commission said it will accept legal briefs from the parties who have participated through March 30. Idaho Power’s reply comments must be filed by April 20. Oral arguments will be heard April 22 at 9:30 a.m. in the commission hearing room at 472 W. Washington St. in Boise.