20000613Order No 28406.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF PACIFICORP DBA UTAH POWER & LIGHT COMPANY FOR APPROVAL OF A NEW RENEWABLE ENERGY TARIFF, SCHEDULE 70 NEW WIND, GEOTHERMAL AND SOLAR POWER RIDER—OPTIONAL.
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CASE NO. PAC-E-00-1

ORDER NO. 28406

On March 10, 2000, PacifiCorp dba Utah Power & Light Company (PacifiCorp; Company) filed a request with the Idaho Public Utilities Commission (Commission) for approval of a new renewable energy tariff, Schedule 70 New Wind, Geothermal and Solar Power Rider—Optional.
Under the tariff proposed by the Company, customers would be permitted to purchase 100 kWh blocks of renewable energy (initially wind) by paying an additive premium of 4.75¢/kWh. For residential customers, a customer would pay the tariff rate of 7.4904¢/kWh plus 4.75¢/kWh for a total of 12.2407¢/kWh for each kilowatt hour of renewable energy purchased.
On May 18, 2000, the Commission issued final Order No. 28380 in Case No. PACE00-1 denying the Company’s Application. In its Order, the Commission stated:
In the merger case, the overriding customer sentiment in the Company’s southeast Idaho service territory was a desire for lower cost electricity. Geographically, the Company’s Idaho customers are uniquely situated, surrounded by municipal, cooperative and investor owned utilities, all providing lower cost power. The Company in this case presents us instead with a higher cost resource. In a separate case, also pending, it presents a rate increase related to elimination of the BPA exchange credit (Case No. UPL-E-00-1). We cannot ignore that while the Company forecasts a penetration rate of 2.75% on a system-wide basis for its new green tariff, it expects to achieve only half of that penetration rate in Idaho. The Commission finds that regardless of the voluntary nature of the submitted program, we must consider customer acceptance and we have a responsibility to assure fair pricing. While this Commission supports the development of renewable resources, we believe that the Company needs to refine its proposal. Perhaps experience gained in other states will result in program improvements. We encourage the Company to file a “green tariff” for UP&L that supports deployment of renewable resources and is priced to foster customer acceptance.

On May 26, 2000, the Company filed a Petition for Reconsideration with the Commission requesting reconsideration of the Commission’s Order No. 28380. Reference IDAPA 31.01.01.331; Idaho Code § 61-626. The Company believes that the Commission’s Order unreasonably denies interested PacifiCorp customers the opportunity to support additional new renewable resource development. The Company asks the Commission to consider the following:
A future renewable resource program will likely be more costly than the current proposed program due to the expiration of federal tax credits;

Customers have indicated a desire to participate in renewable resource programs;

The currently offered program benefits from economies of scale. Designing a program for the estimated 800 PacifiCorp customers in Idaho that are expected to participate would be prohibitively costly.

Marketing expenditures have been mischaracterized as representing a high percentage of program costs.

The Company seeks reconsideration by written comments.

COMMISSION FINDINGS
The Commission has reviewed the filings of record in Case No. PAC-E-00-1 including final Order No. 28380 and the Company’s Petition for Reconsideration.
PacifiCorp in its Petition for Reconsideration proposes no changes in its tariff offering and offers to provide no additional information or facts that would cause us to change our prior decision. The Company continues to offer a higher priced choice to a customer base that wants lower cost energy. We continue to find that the tariff the Company proposed for its southeast Idaho service territory is not priced at a level that would foster customer acceptance.
PacifiCorp should not interpret our decision in this case as opposition to renewable resource programs. The Company-estimated number of Schedule 70 participants in southeast Idaho is extremely small, a much lower expected participation rate than in any of the Company’s other jurisdictional service areas. We do not believe the current proposal is the best that can be offered. We expect that the Company will learn from its experience in those states that have approved the tariff and that advances in technology will continue to make wind power and other renewable generation resources more competitive. We find that it is also reasonable in this time of increasing costs for fossil-based fuels to expect that the federal tax credits for renewable energy will not expire but will be re-authorized or extended. We encourage the Company to continue to design its renewable energy program based on its experience in other states and refile an improved program in the future. It will be easier for the Company to demonstrate market acceptance with a proven track record. The Commission finds that the Company’s Petition for Reconsideration should be denied and Order No. 28380 is reaffirmed. Reference Idaho Code § 61-626(2).

CONCLUSIONS OF LAW
The Commission has jurisdiction over PacifiCorp dba Utah Power & Light Company, an electric utility, and its Application in Case No. PAC-E-00-1 pursuant to the authority and power granted under Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.

O R D E R
In consideration of the foregoing and as more particularly described above, IT IS HEREBY ORDERED that the Petition for Reconsideration filed by PacifiCorp dba Utah Power & Light Company in Case No. PAC-E-00-1 be and hereby is denied.
THIS IS A FINAL ORDER ON RECONSIDERATION. Any party aggrieved by this Order or other final or interlocutory Orders previously issued in this Case No. PAC-E-00-1 may appeal to the Supreme Court of Idaho pursuant to the Public Utilities Law and the Idaho Appellate Rules. See Idaho Code § 61-627.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of June 2000.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Myrna J. Walters
Commission Secretary

vld/O:PAC-E-00-1_sw3

ORDER NO. 28406 1

Office of the Secretary
Service Date
June 13, 2000