20050222Application.pdf

Lisa D. Nordstrom (ISB No. 5733)
PacifiCorp
825 NE Multnomah, Suite 1800
Portland, OR 97232
Telephone: [phone]
FAX: [phone]
Email: lisa.nordstrom~pacificorp.com
Attorney for PacifiCorp
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
ACIFICORP d/b/a UTAH POWER & LIGHT
COMP ANY FOR APPROVAL OF A
VOLUNT ARY RENEWABLE ENERGY BULK-
PURCHASE OPTION TARIFF
CASE NO. P AC-05-
APPLI CA TI 0 N
Pursuant to Idaho Code 99 61-301
, -
307
, -
622, and -623 , PacifiCorp, d/b/a Utah
Power & Light Company ("PacifiCorp" or the "Company ), applies to the Idaho Public
Utilities Commission (the "Commission ) for approval of a new, optional program that
would allow PacifiCorp to offer large-usage customers the ability to purchase renewable
energy at a bulk rate. PacifiCorp submits that this proposed voluntary option provides a
more cost effective way for businesses to make significant renewable energy purchases
and meet their own environmental goals. Thus, the Company seeks to add Schedule No.
73 to its Tariff LP.C. No. 28. In support of its Application, PacifiCorp states:
PacifiCorp is an electrical corporation and public utility in the state of
Idaho and is subject to the jurisdiction of the Commission with regard to its public utility
operations. PacifiCorp also provides retail electric service in the states of Utah, Oregon
Wyoming, Washington, and California.
APPLICATION OF P ACIFICORP -
This Application is filed pursuant to the Idaho statutes referenced above.
In particular, Idaho Code 9 61-623 empowers the Commission to address the propriety of
requested rate schedule increases, 99 61-307 and -622 require Commission approval prior
to any increase in rates, and 9 61-301 requires Idaho retail electric rates to be just and
reasonable.
STANDARD BLUE SKY OPTION In August 2003, the Commission
issued Order No. 29329 authorizing PacifiCorp to offer renewable energy to residential
and non-residential customers in 100 kilowatt-hour blocks (hereafter referred to as "the
standard Blue-Sky option ) beginning September 1 , 2003. Customer response to that
offering has been positive, and a number of residential and business customers are now
choosing to purchase renewable energy. Since April 2004, nearly 700 Idahoans
approximately 1 % of our Idaho customer base, have signed up for PacifiCorp' s voluntary
Blue Sky option. PacifiCorp has informed customers of the standard Blue Sky option
through a mix of communication vehicles including bill inserts, bang tails (tear-off
response panels on envelopes), direct mail, and customer newsletters.
At this time, only lOnon-residential customers are enrolled in the program with
price being the greatest obstacle to increasing the base of business participants. In this
Application, PacifiCorp seeks approval to offer an additional option that offers a less
expensive alternative for bulk purchases of renewable energy.
PROPOSED BULK-PURCHASE OPTION The purpose of the bulk-
purchase Blue Sky option is to allow customers to support renewable energy purchases
above and beyond what the Company would otherwise do as a regulated investor-owned
utility. The renewable energy purchased on behalf ofPacifiCorp s Blue Sky customers is
APPLICATION OF P ACIFICORP - 2
in addition to the renewable energy generated and purchased on behalf of all PacifiCorp
customers, as well as the resource needs outlined in the Company s Integrated Resource
Plan ("IRP"). Thus, the Blue Sky program seeks to create an even larger market for
renewable energy.
More specifically, revenues received from Blue Sky customers are used to further
market the program and to purchase Green Tags - certificates of generation from
renewable resources. The Green Tag purchases do not provide electric power to serve
customer loads, nor do they directly displace PacifiCorp generation. However, the
purchases do foster markets for new renewable resources, and the program has now
grown to the point that it will soon be able to cause new renewable resources to be built
on the power system specifically dedicated to the program. Participating customers
create more demand for renewable energy generating facilities both now and in the
future. Individually and collectively, Blue Sky purchases support the production of
renewable energy by bolstering the market value of renewable resources.
Minimum Bulk Purchase The bulk purchase option requires a
minimum annual purchase of 121.2 megawatt-hours (121 200 kWh or 1 212
blocks/year or 101 blocks/month). This requirement is the result of a break-even
analysis that combines the $7/MWh commodity cost, the costs associated with
extending the program to customers (e., communications, program support
enrollment, and fulfillment), as well as the anticipated number of customers
subscribing to the program. Customers with multiple sites within Utah Power
Idaho service territory will be able to aggregate their purchases to meet the
APPLICATION OF P ACIFICORP - 3
minimum purchase level. Customers choosing to buy less than 101 blocks per
month can choose PacifiCorp' s standard Blue Sky option.
Bulk PricinJ!Like the standard Blue Sky option, the bulk pricing
proposed for this new offering is based on assumptions that balance program
revenue, costs and the retail price. The premium is based on the cost to purchase
renewable energy Green Tags from wind sources and the costs associated with
operating the program. The National Renewable Energy Laboratory ("NREL"
reports that the green power programs with the lowest premiums charged a price
premium between $.006 and $.013 per kilowatt-hour.
The fixed annual cost of this program will be $1 500, plus $7.00 per MWh
($0.70 per 100 kWh block). The fixed cost of$1 500 per year, or $ 125/month
includes estimated costs for program management, customer contract, enrollment
processing, fulfillment costs, materials/tools and mailings specific this option.
However, the fixed cost excludes development, advertising and public relations
costs to be consistent with the standard Blue Sky block product.
The charge of $0.70 per block is based on the cost to purchase renewable
energy (e., wind power tags can be purchased for $7/MWh). The unit cost will
vary based on the volume of the purchase; the larger the total purchase, the lower
the unit price. In addition, a purchase calculator will be published on the
Company s website to assist customers in determining the unit cost and
comparing the bulk option to the standard Blue Sky block product. The additional
charges associated with participation in this program will be added to each
participating customer s utility bill and identified as a separate line-item.
APPLICATION OF P ACIFICORP - 4
Minimum Enrollment Commitment The NREL report
, "
Trends in
Utility Pricing Programs " has indicted that about 440/0 of the green power
programs have a minimum enrollment period requirement for non-residential
customers and that the most common enrollment term is one year. The one-year
minimum commitment proposed in this tariff Application is based on
PacifiCorp s assumption that customers purchasing in bulk desire to get public
recognition for their investment. PacifiCorp has a business partnership program
that requires a one-year commitment and provides benefits such as publishing
their name on the PacifiCorp web-site, in renewable power advertising, and in
press releases.
EnerJ!V Procurement Like the standard Blue Sky block program
the revenues associated with this product will be used to: 1) purchase bundled
renewable energy or tradable renewable credits; and 2) operate the program
including the provision of customer service, back-office support, administration
program management, and customer education.
Power purchases made on behalf of participating customers will come
from "new" generation facilities as defined by legislation or Green-e Renew 2000
and will be made in addition to the Company s renewable energy purchases
outlined in PacifiCorp s IRP. The wind energy purchased on behalf of Blue Sky
customers directly corresponds to what PacifiCorp s Blue Sky customers buy.
The location of these sources will be from the Western Electricity Coordinating
Council ("WECC"), with a preference to the states within PacifiCorp
jurisdiction. Overall, a preference will be given to buying renewable energy from
APPLICATION OF P ACIFICORP -
local (i., Oregon, Washington, or Idaho) or more recently installed projects on
behalf of Blue Sky customers.
Other Jurisdictions PacifiCorp has offered this bulk pricing
option in Oregon and Utah for several months and now has 19 participating
customers (45 individual sites) across its Oregon and Utah service area. Many of
PacifiCorp s standard Blue Sky customers who were participating at or above the
minimum purchase threshold opted to switch to the new bulk Blue Sky pricing
option and, as a result, are buying and supporting more renewable energy at a
reduced cost. Five new businesses have opted to participate in the program since
the introduction of Blue Sky bulk pricing option. The types of participating
businesses include government, retail, service industry and manufacturing
companies. PacifiCorp recently received approval to offer a bulk pricing option
in Washington and Wyoming and is hopeful this new option will encourage more
large businesses to enroll in the Blue Sky program.
TARIFFS Attachment 1 to this Application contains PacifiCorp
proposed Electric Service Schedule 73: a New Wind, Geothermal and Solar Power
Bulk Purchase Option.
MODIFIED PROCEDURE The Company believes that consideration
by the Commission of the proposals contained in this Application does not require an
evidentiary proceeding, and accordingly the Company requests that this Application be
processed under RP 201 allowing for consideration of issues under modified procedure
, by written submissions rather than by an evidentiary hearing.
APPLICATION OF P ACIFICORP - 6
SERVICE OF PLEADINGS Communications regarding this
Application should be addressed to:
Bob Lively
PacifiCorp
201 South Main Street, Suite 2300
Salt Lake City, UT 84140
Telephone: [phone]
Facsimile: [phone]
E-mail: bob.lively~pacificorp.com
Lisa Nordstrom
PacifiCorp Office of the General Counsel
825 NE Multnomah, Suite 1800
Portland, OR 97232
Telephone: [phone]
Facsimile: [phone]
E-mail: lisa.nordstrom~pacificorp. com
In addition, PacifiCorp respectfully requests that all data requests regarding this
matter be addressed to:
Bye-mail (preferred):datareq uest~1Jacificorp. co
By regular mail:Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 800
Portland, OR 97232
By facsimile:[phone]
Informal inquires also may be directed to Bob Lively at [phone].
APPLICATION OF P ACIFICORP - 7
WHEREFORE, PacifiCorp respectfully requests that the Commission enter its
Order approving Schedule No. 73 to Tariff LP.C. No. 28, thereby authorizing
PacifiCorp to offer large-usage customers the ability to purchase renewable energy at a
bulk rate.
ffL
DATED this day of February, 2005.
Respectfully submitted
~;f)
Lisa D. Nordstrom
Attorney for PacifiCorp
APPLICATION OF P ACIFICORP - 8
ulBh
RIJUM
C. No. 28
Twenty- Third Revised Sheet No. B.
Cancels Twenty-Second Revised Sheet No. B.
ELECTRIC SERVICE SCHEDULES - Continued
Schedule
No.Class of Service
General Service - Small Power
23A General Service - Small Power (Residential and Farm)
Interruptible Power Service
Pacific Northwest Electric Power Planning and Conservation Act -
Residential and Farm Kilowatt-Hour Credit
Optional Time-of-Day General Service - Distribution Voltage
35A Optional Time-of-Day General Service - Distribution Voltage (Farm)
Optional Time of Day Residential Service
New Wind, Geothermal and Solar Power Rider - Optional
Energy Exchange Pilot Program
Irrigation Load Control Credit Rider
New Wind, Geothermal and Solar Power Rider - Bulk Purchase Option
Power Cost Adjustment
Rate Mitigation Adjustment
120 Commercial Energy Services - Optional to Qualifying Customers
122 Commercial Energy Services - Optional to Qualifying Customers
135 Net Metering Service
300 Regulation Charges
400 Special Contracts
Schedule numbers not listed are not currently used.
Submitted Under Case No. P AC-05-
ISSUED: February 18, 2005
Sheet
No.
23.1 - 23.
23A.l - 23AA
24.1 - 24.
34.1 - 34.
35.1 - 35.
35A.l -35AA
36.36.
70.1 - 70.
71.1-71.5
72.1 - 72.
73.73.(N)
120.1 - 120.
122.1 - 122.
135.1 - 135.
300.1 - 300A
400.1 - 400.
EFFECTIVE
ulah
RIJUM
C. No. 28 Original Sheet No. 73.(N)
UT AH POWER & LIGHT COMPANY
ELECTRIC SERVICE SCHEDULE NO. 73
ST ATE OF IDAHO
New Wind, Geothermal and Solar Power
Rider-Optional
Bulk Purchase Option
A V AILABILITY: In all territory served by the Company in the state of Idaho.
APPLICATION: To customers receiving service under Schedules 1 , 6, 6A, 9, 10, 21 , 23
23A, 35 , 35A or 36 who agree to purchase at least 1 212 blocks per year of New Wind, Geothermal
or Solar Power under this schedule.
BLOCK: 1 block equals 100 kWh of New Wind Geothermal or Solar Power. This
program requires a one year commitment to purchase a minimum of 121.2 megawatt-hours
(121 200 kWh or 1 212 blocks) per year.
CHARGE PER BLOCK:
Plus
$0.70 per month ($7.00 per MWh per month)
500.00 per year fixed charge
CHARGE: The Charge can be billed either monthly, twice yearly or annually and shall be
the number of Blocks the customer has agreed to purchase multiplied by the Charge per Block, plus
the $1 500 yearly fixed charge divided between the customer s billing choice (monthly, twice yearly
or annually) and added to the customer s standard bill. The Charge is in addition to all other
charges contained in Customer s applicable tariff schedule. This rider s Charge shall be applied to
the Customer s billing regardless of actual energy consumption.
NEW WIND, GEOTHERMAL AND SOLAR POWER: For the purpose of this tariff
power sources include wind, geothermal and solar sources of generation placed in service on or
after January 28 , 2000. Bundled energy or Tradable Renewable Credits may be used to support this
product.
continued)(N)
Submitted Under Case No. P AC-05-
FILED: February 18, 2005 EFFECTIVE:
ulah
RIJUM
C. No. 28 Original Sheet No. 73.(N)
ELECTRIC SERVICE SCHEDULE NO. 73 - Continued
SPECIAL CONDITIONS:
Customers may apply for this schedule anytime during the year.
The Company will not accept enrollments for accounts that have a time-payment
agreement in effect or have received two or more disconnect notices or have been
disconnected within the last 12 months.
New wind, geothermal, or solar power energy will be delivered within two years of
when the energy was purchased by customer under this tariff. Tradable Renewable
Credits will be delivered within eighteen months.
ELECTRIC SERVICE REGULATIONS: Service under this Schedule will be
accordance with the terms of the Electric Service Agreement between the Customer and the
Company. The Electric Service Regulations of the Company on file with and approved by the
Idaho Public Utilities Commission, including future applicable amendments, will be considered as
forming a part of and incorporated in said Agreement.
(N)
Submitted Under Case No. P AC-05-
FILED: February 18 , 2005 EFFECTIVE: