20111209Comments.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
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Street Address for Express Mail:
472 WWASHINGTON
BOISE ID 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITION FOR AN
ACCOUNTING ORDER TO ESTABLISH
RATEMAKING TREATMENT OF
QUALIFYING REPORTING ENTITY
CONTRACTS.
)
) CASE NO. IPC-E-1l-21
)
)
) COMMENTS OF THE
) COMMISSION STAFF
)
COMES NOW the Staff of the Idaho Public Utilties Commission, by and though its
Attorney of record, Weldon B. Stutzman, Deputy Attorney General, and in response to the Notice of
Filng and Notice of Modified Procedure issued in Order No. 32400 on November 18, 2011, submits
the following comments.
BACKGROUND
On October 31, 2011, Idaho Power Company fied a Petition requesting a Commission Order
modifying and continuing ratemaking processes set forth in Commission Order No. 30941 issued
November 5, 2009, regarding the volunta qualified reporting entity (QRE) services the Company
provides. The Company's Petition addresses accounting for renewable energy credits (RECs)
through an independent inventory tracking system as recommended by the Western Energy
Coordinating Council (WECC). The tracking system is the Western Renewable Electricity
Generation Information System (WRGIS) and is designed to ensure that (1) only one REC is
STAFF COMMENTS 1 DECEMBER 9, 2011
created for each megawatt-hour generated from a qualifying renewable energy project, (2) each
individual REC is only used for one purpose, and (3) provides a system that allows both the
generation units creating RECs and users of the RECs to communicate specific REC requirements.
The WRGIS system does not track the financial value of the RECs but instead tracks the creation
and disposition of the individual REC certificates.
The Company's Petition states that the WRGIS process requires that a pary, independent
from the owner of the renewable generation unit, supply WRGIS with the actual montWy megawatt-
hour that a renewable generation unit has delivered. The independent pary is called a qualified
reporting entity (QRE). Idaho Power has been approved as a QRE by the WRGIS administrator.
Idaho Power's identification as a QRE came about through a case resolved in front of the
Oregon Public Utilties Commission in 2009. The Oregon Commission approved a memorandum of
understanding between its staff and the utilties in which the utilities agreed to voluntarily provide
QRE services for approximately two years so long as the cost to perform the services was fully
compensated by the pary requesting the QRE service.
In May 2009, Idaho Power filed a request with this Commission for approval of accounting
and ratemaking treatment of expenses and revenues associated with providing voluntar QRE
services as outlined in the agreement approved by the Oregon Commission. On November 5, 2009,
this Commission issued an accounting Order approving the Company's proposed accounting and
ratemaking processes through the two-year review process established in Oregon. The Commission
also directed the Company to file an analytical report on the QRE services to facilitate the review of
the above-the-line ratemaking treatment for those services. The Company's analytical report is
attached to the Petition in this case.
Idaho Power in its Petition requests the Commission authorize the Company to continue the
accounting and ratemaking treatment processes previously approved for an indefinite period of time.
STAFF REVIEW
Staff has reviewed the analytical report and documentation of the program since 2009. Idaho
Power is an approved QRE by the WRGIS administrator. As of September 30,2011, Idaho Power
has 26 client contracts within the Idaho Power Balancing Authority area, 25 generator plants are in
Idaho, and 1 generator plant is in Oregon.
The original Memorandum of Understading on the voluntar QRE process was fied with the
Oregon Public Utilities Commission and approved in 2009. On March 15,2011, interested paries
STAFF COMMENTS 2 DECEMBER 9, 2011
met to review the success of the voluntary program. The QREs reported that costs were near what
they anticipated and providing the services did not add significantly to the workload at curent usage.
The Paries agreed the provision ofQRE service on a voluntay basis went well over the last two
years. The Parties agreed to continue the status quo and close the Oregon docket with two conditions
(identified below).
The Idaho Public Utilties Commission approved the accounting and ratemaking process for
Idaho Power in 2009 for the two-year review period. After review, Staff believes the accounting and
ratemaking process has worked as anticipated. Actual costs are recorded to work orders. The
average work order costs are used to establish the fees charged clients. Once the program was
established, the average cost declined and rates charged were reduced. Idaho Power reviews the
average cost each Januar and updates the fees the following March. The fees charged covered the
actual costs incured during the two-year review period so ratepayers were not hared by the
program. Staff believes these QRE processes are reasonable and should be continued.
STAFF RECOMMENDATION
The Company requests Commission approval of its request to continue the processes related
to the QRE services indefinitely with the following conditions, which have been approved by the
Oregon Commission: (a) Idaho Power will notify the Commission and all entities using QRE
services of its intent to discontinue providing voluntar QRE service 90 days in advance of the
proposed discontinuance; and (b) Idaho Power will provide data regarding QRE service, subject to
protection of confidential information, if requested by the Commission.
Staff recommends an Accounting Order be issued approving Idaho Power's request to
authorize the Company to continue the accounting and ratemaking treatment previously approved for
an indefinite period of time with the above conditions.
Respectfully submitted this ci~ day of December 20l 1.
~~~
Weldon B. tutzman
Deputy Attorney General
Technical Staff: Terri Carlock
i:umisc:commentsipce1 1.21 wstc comments
STAFF COMMENTS 3 DECEMBER 9, 2011
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 9TH DAY OF DECEMBER 2011,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-II-21, BY E-MAILING AND MAILING A COPY THEREOF,
POSTAGE PREPAID, TO THE FOLLOWING:
LISA D NORDSTROM
JASON B. WILLIAMS
IDAHO POWER COMPANY
P.O. BOX 70
BOISE IDAHO 83707
E-MAIL: lnordstromiiidahopower.com
jwilliamsiiidahopower .com
TIMOTHY E TATUM
COURTNEY WAITES
IDAHO POWER COMPANY
P.O. BOX 70
BOISE IDAHO 83707
E-MAIL: ttatuiiidahopower.com
cwaitesiiidahopower.com
sEcil~(7 -
CERTIFICATE OF SERVICE