Case No. IPC-E-05-20, Order No. 29821

July 18, 2005

Contact: Gene Fadness (208) 334-0339



Utility wants to sell surplus emission allowances


Idaho Power Co. is seeking permission from the Idaho Public Utilities Commission to sell surplus sulfur dioxide allowances it has obtained under provisions of the federal Clean Air Act.


Under an amendment to the 1990 Clean Air Act, thermal (coal and natural gas) power plant owners are issued limited allowances for the plants’ sulfur dioxide (SO2) emissions. Scientists have determined that sulfur dioxide and nitrogen oxide are the primary causes of acid rain. In the United States, about two-thirds of all SO2 and one-fourth of all nitrogen oxide (NOx) comes from thermal electric generating plants.


Thermal power plant owners are provided allowances based on their past emissions and a nationwide cap on the total amount of S02 that may be emitted from their plants. Each allowance authorizes the utility to emit one ton of SO2. At the end of each year, a utility generating unit must hold allowances equal to its allotted annual SO2 emissions. A utility that holds over its annual requirement is considered to have surplus allowances that can be sold on an open market through auctions sponsored by the Environmental Protection Agency.


Idaho Power has an ownership interest in three coal-fired plants: Jim Bridger in Wyoming, North Valmy in Nevada and Boardman in Oregon. After building up what it calls a “cushion” in allowances to allow for changes or contingencies in the program, Idaho Power now believes it is an a position to sell its surplus allowances. Commission approval to participate in the market is needed, Idaho Power claims, to satisfy prospective purchasers that there will not be a “regulatory cloud” over the transactions.


Idaho Power also seeks authority to record the proceedings in a special account. In a case to be filed by Idaho Power at a later date, the commission will decide the appropriate ratemaking treatment of the proceeds received from the sales of the surplus allowances.


The commission will proceed under a modified procedure that allows the case to be handled through written public comments rather than by public hearing. However, comments may request a public hearing. Those wishing to submit comments must do so by no later than Aug. 5. Comments are accepted via e-mail by accessing the commission’s homepage at and clicking on "Comments & Questions." Fill in the case number (IPC-E-05-20) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.


A full text of the commission’s order, along with other documents related to this case, are available on the commission’s Web site. Click on “File Room” and then on “Electric Cases” and scroll down to the above case number.