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Idaho Power Co. forced to use renewable credits for benefits of customers

Alexander Richter 26 May 2009

Idaho Power Co.'s is requested to capitalize renewable energy credits for the benefit of its customers or ratepayers, but not for investments into new renewable energy projects.

As reported by Forbes, Idaho Power Co.’s is requested to capitalize renewable energy credits for the benefit of its customers or ratepayers, but not for investments into new renewable energy projects.

It is so far unclear what this will mean in detail, but probably would mean that utilities in the U.S. will be more hesitant to invest themselves in the projects that they need to fulfill the portfolio standards in the individual states and potentially in a federal portfolio standards scheme.

The article describes that Idaho Power Co. will have “to sell about US$2 million worth of renewable energy credits and use the money to benefit ratepayers, instead of retiring or banking the credits in expectation of new federal laws requiring more renewable energy generation.”

“Idaho Power wanted to take the credits, known as “Green Tags,” off the market or bank them. That would have allowed the utility to publicly tout its commitment to renewable energy – or use the credits in the future to help meet new renewable energy standards. The U.S. Senate is considering legislation to require the country to generate up to 15 percent of its power from renewable resources, including wind and solar, by 2021.

But the Industrial Customers of Idaho Power, a group that includes the J.R. Simplot Co., argued the tags should be sold and the proceeds turned into savings for all Idaho Power customers.

The three-member commission found “no compelling evidence” that banking the tags would “lessen the company’s burden in meeting a future federal standard,” the panel wrote in its latest decision. “Unless and until the federal government establishes renewable energy standards and corresponding guidelines, we find the most prudent disposition of these Green Tags, at this time, is their sale.”

“We have the commission’s order and we’re in the process of reviewing and digesting it,” said Stephanie McCurdy, a spokeswoman in Boise. The credits consist of 320,000 megawatt hours of Green Tags generated in 2007 and 2008 from Idaho Power’s Elkhorn Wind project in Oregon and the Raft River geothermal plant near Malta in southern Idaho.

Source: Forbes