Idaho Public Utilities Commission

Case No. IPC-E-08-24, Order No. 30720

January 28, 2009

Contact: Gene Fadness (208) 334-0339, 890-2712

Website: www.puc.idaho.gov

 

Commission allows utility to hold on to green tags

 

The Idaho Public Utilities Commission has approved an Idaho Power Company application to hold on to its green tags rather than sell them on the open market or to other utilities.

 

A green tag, or Renewable Energy Credit, is issued to each utility for every megawatt-hour of electricity generated by an eligible renewable energy resource. An active market exists for the purchase and sale of green tags.

 

Anticipating federal or state legislation that may require utilities to generate a specific amount of energy from renewable sources, Idaho Power asked the commission for authority to “retire” its green tags so it can represent to renewable energy certification programs and to its customers that it is meeting customer expectations for increased use of renewable energy. Another option is to sell the green tags with the proceeds used to offset customer rates. (Idaho Power has twice sold surplus sulfur emissions credits in a market program similar to the sale of green tags. In 2008, $16 million in proceeds from the sale of surplus SO2 credits was applied against the Power Cost Adjustment, lowering the surcharge assessed customers. In 2007, $70 million in SO2 sales was applied against the PCA.)

 

However, the commission said any savings in rates for customers through the sale of the green tags “in the short-term might result in the need for exponentially greater increases in rates in the future” with the likelihood of federal regulation mandating that a specific amount of generation come from renewable energy sources. If the green tags are sold, Idaho Power cannot count the energy generated from the renewable sources as part of its own renewable generation.

 

The commission said Idaho Power’s application comports with goals cited in the Idaho Energy Plan, adopted in 2007. “In particular, retiring the green tags at this time promotes the development of renewable resources, diversifies Idaho Power’s generation portfolio and yet preserves the company’s ability to meet changes in energy policy.” Retiring the green tags now does not foreclose the sale of future tags in the event of changes in energy policy, the commission said.

 

Standards established by Green-e Energy, the nation’s leading independent certification and verification program for renewable energy, state that green tags sold by utilities from renewable projects can’t be counted twice – by the utility doing the selling and the purchaser. Thus, if Idaho Power sold its green tags it could no longer claim that renewable energy component of its total power generation. The Green-e standards even prohibit the utility from using visuals of its wind or geothermal projects in charts, graphs or line art as part of the green resources delivered to customers if the green tags that accompany those projects are sold. Idaho Power’s Elkhorn Wind project in Oregon and its Raft River geothermal project in south-central Idaho generated more than 320,000 MWh of green tags in 2007 and 2008.

 

The Idaho Conservation League, the Renewable Northwest Project, the Snake River Alliance and a residential customer submitted comments in support of retiring the green tags.  The Industrial Customers of Idaho Power and two residential customers supported selling the tags. The Idaho Rural Council supported retiring the green tags, but only if other options could not be found that would generate income while still protecting the utility’s right to claim the benefits of green tag ownership.

 

The commission’s order is final. However, interested parties may petition the commission for reconsideration by no later than Feb. 16. Petitions for reconsideration must set forth specifically why the petitioner contends that the order is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and quantity of evidence the petitioner will offer if reconsideration is granted.

 

Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.