20160829final_order_no_33570.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION TO MODIFY
OPTIONAL SCHEDULE 62, GREEN
ENERGY PURCHASE PROGRAM RIDER
)
) CASE NO. IPC-E-16-13
)
) ORDER NO. 33570 __________________ )
Office of the Secretary
Service Date
August 29, 2016
On June 22, 2016, Idaho Power Company filed an Application with the Commission
to modify its Schedule 62, the Green Energy Purchase Program. The proposed modifications do
not change customer rates associated with the ongoing funding of the program, but change the
program's pricing structure, renewable energy credits (REC) sourcing and certification, and the
treatment of certain program expenses. The Commission issued a Notice of Application and
Modified Procedure setting deadlines for comments and the Company's reply. Order No. 33553.
Staff timely filed the only written comments, and Idaho Power did not file a reply. The
Commission now approves the Company's Application.
BACKGROUND
The Commission approved Idaho Power's Schedule 62 Green Power Program in
February 2001, as an optional program to allow "customers and non-customer participants ... to
participate in the purchase of new environmentally friendly green energy." Order No. 28655;
Application at 2 (footnotes omitted). Participants' contributions to the program go towards the
purchase of Green-e certified renewable energy credits (RECs). Application at 2. "A REC is
created when a megawatt-hour (MWh) of renewable energy is produced and delivered to the
grid." Id. It is "a tractable, non-tangible commodity that represents the environmental attributes
associated with one MWh of electricity generated from a renewable energy resource and can be
sold separately from the electricity commodity." Id. According to the Application, "Green-e
Energy is the nation's leading independent certification and verification program for renewable
energy." Id.
THE APPLICATION
Idaho Power's proposed modifications are in response to customer input, received
during meetings with the Company from February 2014 to early 2016. Id. at 3. The Company
states that the proposed changes are intended to "satisfy changes in customer preference . . .
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[and] align the Green Power Program with the best practices of other green programs in the
industry." Id.
The proposed modifications include: (1) existing Dollar Contribution Method would
be replaced with both a block option and a 100 percent of usage option; (2) the Bonneville
Environmental Foundation (BEF), which facilitates the purchase of green energy for the
Program, would give preference to RECs from sources located closest to or within Idaho
Power's service territory, when possible; (3) Idaho Power would seek Green-e certification of the
RECs purchased through BEF; (4) up to 15 percent of the total Program funds would be used for
program marketing expenses, to allow the Company to reach more customers. Id. at 2-5.
STAFF COMMENTS
Staff recommended approving the Company's Application. As to pricing structure,
Staff agreed with Idaho Power that it currently does not meet Green-e certification standards, and
that the Company's proposed participation options would allow the program to be Green-e
certified. The Company's two proposed participation options would allow participants to: (1)
purchase 100 kWh blocks of "green" energy for $1.00 per block; or (2) purchase renewable
energy equal to their monthly usage each month at a price premium of 1.0 cent per billed kWh.
Comments at 3; Pengilly Direct at 9. Staff believes the new rate of 1.0 cent/kWh is fair and
reasonable. Comments at 3. Also, Staff believes that the Company's proposed pricing structure
will not adversely impact participants. Id.
As to REC sourcing and certification, Staff supported the Company's proposal to
continue to purchase RECs from projects in the Northwest and to direct BEF to give preference
to RECs from sources located closest to or within Idaho Power's service territory. Id. at 3;
Application at 4. Staff also agreed with the Company's proposal to obtain Green-e certification
of RECs purchased through BEF. Id.; Application at 5. Concerning marketing expenses, Staff
believes the Company's proposal to use 15 percent of program funds for marketing is acceptable,
but suggested that the figure be reviewed every other year. Comments at 4.
DISCUSSION AND FINDINGS
The Commission has reviewed the Application and record in this case, including the
testimony of Peter Pengilly and the attached exhibit, and Staffs comments. We find that the
Company's proposed pricing structure, providing "block" and "100% usage" options, is
reasonable, and allows the program to be Green-e certified. We also find that the 1.0 cent/kWh
ORDER NO. 33570 2
rate under the 100 percent of usage option is fair and reasonable, given the added program
benefits in the Schedule 62 modifications. We find these modifications have no adverse impact
to participants, and thus approve the proposed pricing structure.
In addition, we find it appropriate for the Company to continue to purchase RECs
from projects in the Northwest and to direct BEF to give preference to RECs from sources
located closest to or within Idaho Power's service territory. We also approve the Company's
proposal to obtain Green-e certification of RECs purchased through BEF.
Finally, concerning marketing expenses, we find it reasonable at this time for the
Company to use 15 percent of program funds for marketing. However, we find it appropriate to
review this figure, and other aspects of its Green Energy Purchase Program, every other year.
Accordingly, we direct the Company to submit a biennial Green Energy Prudency Report, which
should include the following:
• Customer count under each participation option, by schedule
• Monthly RECs purchased
• Monthly revenue and expenses for Schedule 62
• Updated costs associated with re-certifying the RECs prior to retirement
• Summary of marketing activities and expenses
• Solar 4R Schools expenses
• Percentage of RECs purchased within Idaho Power's service territory
• Monthly funds transferred to the Power Cost Adjustment (PCA) from
Idaho Power-owned REC purchases
With this reporting requirement, we approve the Company's Application.
ORDER
IT IS HEREBY ORDERED that Idaho Power's Application to modify the Green
Energy Purchase Program Rider is granted. The Revised Schedule 62 filed with the Commission
on June 22, 2016, is approved, effective upon issuance of this Order.
IT IS FURTHER ORDERED that the Company submit biennial Green Energy
Prudency Reports as described herein.
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)
ORDER NO. 33570 3
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code § 61-626.
.,, or" DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this o<.. 1
day of August 2016.
PAULYJiJe
ERIC ANDERSON, COMMISSIONER
ATTEST:
~
Diane Holt
Assistant Commission Secretary
O:IPC-E-16-13_djh2
ORDER NO. 33570 4