Last year the commission directed Idaho Power to sell its 2007 and 2008 RECs and use the $1.6 million to $1.9 million in proceeds to benefit ratepayers. It also directed the company to file a business plan on how it intends to treat RECs sold in 2009 and beyond. The commission is taking comments on that plan through May 14.
A Renewable Energy Credit is issued to each utility for every megawatt-hour of electricity generated by an eligible renewable energy resource. The RECs represent a currency that can be traded on an active market to entities wishing to support renewable energy.
RECs are becoming more valuable as a growing number of states require their regulated utilities to buy or generate a certain amount of power from renewable sources.
Idaho Power’s 101-megawatt Elkhorn Wind power project in Oregon and its 13MW Raft River geothermal energy project in south-central Idaho generated more than 320,000 MWh of RECs for Idaho Power in 2007 and 2008.
In January 2009, the commission granted an Idaho Power request to retire, rather than sell, its RECs in anticipation of federal or state renewable mandates. By retiring the RECs, Idaho Power said it could represent to renewable energy certification programs and to customers that it is meeting customer expectations for increased use of wind energy.
However, the Industrial Customers of Idaho Power petitioned the commission for reconsideration, arguing the value associated with the RECs belongs to the ratepayers and should be sold to benefit them. The Idaho Conservation League and the Renewable Northwest Project argued that the commission affirm its original decision to let the utility retire the RECs.
The commission reversed its earlier order and directed the company to sell the RECs. But the order also required the company to submit a business plan on how it intends to treat REC sales in 2009 and beyond.
In the plan, Idaho Power states there is a “reasonable likelihood” that a federal renewable standard will be passed by Congress that will require the company to obtain and retire RECs for compliance. Idaho Power believes it is also prudent to continue acquiring ownership of RECs to minimize the impact if a federal standard is implemented.
“However, because of current economic conditions and recent increases in costs and customer rates, the basic philosophy of Idaho Power’s REC Management Plan is to sell its RECs in the near-term,” and apply it against the annual Power Cost Adjustment surcharge that customers pay. While selling the RECs in the short term, the company proposes to acquire long-term contractual rights to own RECs for meeting future federal requirements.