20110826PacifiCorp Comments and Intervention.pdf

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UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION

Petition for Enforcement of the Public
Utility Regulatory Policies Act of 1978 of
Cedar Creek Wind, LLC

Docket No. EL11-59-000

MOTION TO INTERVENE and COMMENTS
OF
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In accordance with Part 385 of the Commission’s Rules of Practice and Procedure,
18 C.F.R. Part 385, and the Commission’s December 17, 2010 Notice of Petition for
Declaratory Order, PacifiCorp1 respectfully submits this Motion to Intervene and
Comments opposing the Petition for Enforcement of the Public Utility Regulatory Policies
Act of 1978 of Cedar Creek Wind, LLC (“Cedar Creek”) submitted in the captioned
docket on August 5, 2011.
I. EXECUTIVE SUMMARY
PacifiCorp opposes any effort by Cedar Creek to enforce five Power Purchase
Agreements (the “Agreements”) previously rejected by the Idaho Public Utilities

1 PacifiCorp was referred to as Rocky Mountain Power in the relevant proceedings in Idaho.

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Commission (“Idaho PUC”). The Agreements were denied based on a rule change made
within the state’s allowed discretion that served to make the projects ineligible to receive
the published rate. Because the state’s rules under the Public Utility Regulatory Policies
Act of 1978 (“PURPA”) have been properly implemented, the attack is based on whether
the rules, as revised, are properly applied to Cedar Creek. This as-applied claim falls under
the jurisdiction of the state courts and should be dismissed.
Alternatively, the Commission should reject Cedar Creek’s petition because the
Idaho PUC acted appropriately in denying the Agreements. The Idaho PUC has discretion
to determine the point at which a legally enforceable obligation arises. By defining that
point as the execution of a contract by both buyer and seller while providing the QF the
ability to unilaterally create a legally enforceable obligation by filing a meritorious
complaint, the Idaho PUC provides clarity and consistency with Idaho contracts law and
allows the seller a vehicle to ensure timely execution by the utility.
II. COMMUNICATIONS
PacifiCorp requests that all correspondence and communications with respect to
this proceeding be sent to, and that the Secretary include in the official service list, the
following individuals:
Michael Reid
Legal Counsel
PacifiCorp Energy
825 Multnomah, Suite 600
Portland, Oregon 97232
Telephone: [phone]
Facsimile: [phone]
E-mail: [e-mail]

And to

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Kenneth E. Kaufmann
Lovinger Kaufmann LLP
825 Multnomah, Suite 925
Portland, Oregon 97232
Telephone: [phone]
Facsimile: [phone]
E-mail: [e-mail]

III. DESCRIPTION OF PACIFICORP
PacifiCorp is a vertically-integrated public utility primarily engaged in the
business of providing retail electric service to approximately 1.7 million residential,
commercial, industrial and other customers in portions of the following states: Utah,
Oregon, Wyoming, Washington, Idaho, and California. In addition, PacifiCorp provides
electric transmission service in nine Western states, and owns or has interests in (1)
approximately 9,200 (pole) miles of transmission lines and (2) thermal, hydroelectric, and
wind-powered generating plants with a net summer capacity of approximately 10,700
MW.
PacifiCorp buys and sells electricity on the wholesale market with public and
private utilities, PURPA qualifying facilities (“QFs”), energy marketing companies and
incorporated municipalities in connection with excess electricity generation or other
system balancing activities. PacifiCorp has received market-based rate authority from the

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Commission,2 and provides open access transmission service pursuant to a tariff (the
“OATT”) on file with the Commission.3
IV. MOTION TO INTERVENE
On August 5, 2011, Cedar Creek submitted a Petition for Enforcement (the
“Petition”) seeking initiation of a Commission enforcement action against the Idaho PUC
for its rejection of the Agreements between Cedar Creek and PacifiCorp. The Petition
requests the Commission to find that the Idaho PUC erred in holding that a QF’s right
under PURPA to charge at the then-published avoided cost rates exists only upon the
execution of a contract by both parties.
As a utility that purchases a sizable amount of energy from QFs pursuant to
PURPA, and in particular, as Cedar Creek’s counterparty in the Agreements, PacifiCorp
has a direct interest in the outcome of this proceeding that cannot be adequately
represented by any other party. For these reasons, PacifiCorp respectfully moves to
intervene in this proceeding.
V. BACKGROUND
PacifiCorp is one of three investor owned electric utilities (IOUs) serving
customers in Idaho—the other two being Avista Corp., and Idaho Power Company (Idaho
Power). The Idaho Public Utilities Commission (Idaho PUC) regulates Idaho IOUs, and
ensures that those IOUs comply with the requirements of PURPA.

2 PacifiCorp, 79 FERC ¶ 61,383 (1997).
3 PacifiCorp, FERC Electric Tariff, Seventh Revised Volume No. 11.

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Since 2008, Idaho has allowed wind QFs with expected monthly generation equal
to 10 average Megawatts (10 aMW), or less, to sell net output to Idaho’s IOUs at the
utility’s (Idaho PUC-approved) published avoided cost prices.4 The Idaho PUC provided
QFs with this option pursuant to the discretionary authority it has under 18 C.F.R. §
292.304(c)(2) to set standard or published rates for QF projects with a design capacity of
more than 100 kW. The Idaho PUC also allows all QFs to sell net output at prices derived
on a case-by-case basis for each QF project from each IOU’s proprietary avoided cost
pricing model.5 The case-by-case pricing satisfies PURPA’s must-buy requirement for all
QFs with a capacity greater than 100 kW. The Idaho PUC’s decision to require IOUs to
offer published avoided cost rates for projects greater than 100 kW goes above and
beyond Idaho’s PURPA obligation.
In 2010, Idaho experienced a proliferation of large wind project development, all,
or nearly all, of which disaggregated into QFs with average output of 10 aMW or less in
order to become eligible for Idaho’s published avoided cost prices.6 Idaho Power

4 See In the Matter of Idaho Power Company’s Petition to Increase the Published Rate Eligibility Cap for
Wind Powered Small Power Production and to Eliminate the 90%/110% Performance Band for Wind
Powered Small Power Production Facilities, Idaho PUC Case No. IPC-E-07-03, Order No. 30488 (2008).
5 See In the Matter of the Application of PacifiCorp for Final And Interim Orders Revising its Avoided Cost
Rates; In the Matter of the Application of PacifiCorp for an Order Modifying the Availability of Published
Avoided Cost Rates, Idaho PUC Case No. PPL-E-93-5, Docket No. UPL-E-93-7, Order No. 25882 (1995);
In the Matter of the Application of the Washington Water Power Co. for an Order Revising Avoided Cost
Rates, Idaho PUC Case No. WWP-E-93-10, Order No. 25883 (1995); In the Matter of the Application of the
Idaho Power Co. for Approval of Prices for the Purchase of Electricity from Cogenerators and Small Power
Producers Qualifying under Section 210 of the Public Utility Regulatory Policies Act of 1978, Idaho PUC
Case No. IPC-E-93-28, Order No. 25884 (1995).
6 See In the Matter of the Joint Petition of Idaho Power Co., Avista Corp., and PacifiCorp dba Rocky
Mountain Power to Address Avoided Cost Issues and to Adjust the Published Avoided Cost Rate Eligibility
Cap, Idaho PUC Case No. GNR-E-10-04, Order No. 32176, 2 (2010). Cedar Creek admitted that its five
projects were dis-aggregated from two, 78 MW wind projects. Comments of Cedar Creek Wind in Support

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Company calculated that it received over 570 MW of small wind QF requests in 2010—
nearly half the capacity of Idaho Power’s entire system load during light hours.7
PacifiCorp received over 400 MW of new small QF wind requests in 2010.8 The Idaho
PUC did not intend for large wind projects to disaggregate into small projects to become
eligible for published avoided cost prices.9 Staff for the Idaho PUC recognized that some
of the assumptions built into published rates, such as the assumption that the new QF will
not materially affect the utility’s load and resources balance, may break down when
applied to large QF projects, causing the published rate to be higher than the utility’s true
avoided cost.10
Concerned that the Idaho PUC’s policy allowing QFs up to 10 aMW to receive
published avoided cost rates could lead to severe, unintended consequences, the IOUs, on
November 5, 2010 filed their joint petition (“Joint Petition”) requesting that the Idaho
PUC initiate a generic investigation into various avoided cost issues.11 The IOUs further

of Rocky Mountain Power’s Application for Approval of a Power Purchase Agreement, Idaho PUC Case
Nos. PAC-E-11-01 to -05, 2-3 (January 26, 2011)(attached hereto as PacifiCorp Exhibit 101).
7 See In the Matter of the Joint Petition of Idaho Power Co., Avista Corp., and PacifiCorp dba Rocky
Mountain Power to Address Avoided Cost Issues and to Adjust the Published Avoided Cost Rate Eligibility
Cap, Idaho PUC Case No. GNR-E-10-04, Joint Petition at 4 (November 5, 2010)(attached hereto as
PacifiCorp Exhibit 102).
8 Id.
9 Idaho PUC Order No. 32176, 8-9.
10 Id. at 8. Published rates also effectively became a floor for prices that developers of wind projects bid into
PacifiCorp’s competitive procurement auctions. Id. at 9.
11 In the Matter of the Joint Petition of Idaho Power Co., Avista Corp., and PacifiCorp dba Rocky Mountain
Power to Address Avoided Cost Issues and to Adjust the Published Avoided Cost Rate Eligibility Cap, Case
No. GNR-E-10-04, Notice of Joint Petition, Idaho PUC Order No. 32131 (2010) (Exhibit 2 to Cedar Creek
Petition).

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requested that the Idaho PUC lower the published avoided cost rate eligibility cap from 10
aMW down to 100 kW effective immediately.12
On December 3, 2010, the Idaho PUC found probable cause to investigate the
IOUs’ assertions. It did not immediately reduce the eligibility cap, but gave notice that it
would make a decision on the eligibility cap after its investigation and that its decision
would be effective, retroactively, on December 14, 2010.13 On February 7, 2011, after
gathering an extensive written record and holding oral argument, the Idaho PUC held that
the eligibility cap for wind and solar QFs to receive published avoided cost rates should be
reduced from 10 aMW down to 100 kW.14
Cedar Creek is the developer of a large wind generation site located in PacifiCorp
service territory in Bingham County, Idaho. After bidding unsuccessfully into a
PacifiCorp RFP for procurement of renewable resources in 2009, and after rejecting as too
low the project-specific avoided cost prices quoted by PacifiCorp in 2010, Cedar Creek
divided its project into five contiguous sub-projects,15 certified each sub-project to be a
QF with monthly output less than 10 aMW, and sought five power purchase agreements
from PacifiCorp at its Idaho published avoided cost rates applicable to QFs under 10
aMW. Cedar Creek and PacifiCorp negotiated those agreements beginning in May 2010.
Cedar Creek intervened in the IOUs’ November 5, 2010 Joint Petition, and therefore
received the Commission’s December 3, 2010 order notifying participants that its final

12 Id.
13 Id. at 9.
14 Idaho PUC Order No. 32176.
15 The Cedar Creek projects are: Rattlesnake Canyon, Coyote Hill, North Point, Steep Ridge, and Five Pine.

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decision would be effective as of December 14, 2010. PacifiCorp and Cedar Creek
continued to negotiate the five Agreements during the pendency of the Joint Petition.
On December 13, Cedar Creek signed and tendered the five Agreements for its
five projects to PacifiCorp, presumably believing that, in so doing, it perfected its
entitlement to the rates and terms set forth in those Agreements. Each of those Agreements
included the published avoided cost prices. They also included Section 2.1, which
provided that the power purchase agreement becomes effective “after execution by both
Parties and after approval by the [Idaho Public Utilities] Commission.”
PacifiCorp reviewed the December 13 Agreements tendered by Cedar Creek. It
found discrepancies in several of the exhibits that were corrected with substitute Exhibits.
The final draft then underwent a detailed review and sign-off by management, merchant
transmission, accounting, financial reporting (FAS 133, Fin 46, etc.), credit, legal, billing,
and delegation of signing authority by the appropriate PacifiCorp executive for execution
of the agreement.16 After completing internal review of the five Agreements, PacifiCorp
executed them, on December 22, 2010, and promptly filed them with the Idaho PUC for
approval.
In its approval filing, PacifiCorp noted that the five Cedar Creek projects
comprised 30 percent of the 443.4 MWs of disaggregated large QF wind projects currently
seeking PacifiCorp’s Idaho published avoided cost rates for QFs 10 aMW or less.17 It

16 Reply Comments of PacifiCorp dba Rocky Mountain Power, Idaho PUC Docket Nos. PAC-E-11-01 to -05
at 3 (April 12, 2011)(attached hereto as PacifiCorp Exhibit 103).
17 In the Matter of the Application of Rocky Mountain Power for Approval of Power Purchase Agreements
Between Rocky Mountain Power and Cedar Creek Wind, Idaho PUC Case No. PAC-E-11-01, RMP’s

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noted that, by paying Cedar Creek the published avoided cost rates rather than the project-
specific rates developed using PacifiCorp’s Idaho PUC-approved case-by-case
methodology, PacifiCorp expected to pay an additional $10 million per year in power
costs for the five projects during the 20-year term.18 It noted, further, that the Revised
Protocol allocation methodology19 states that “Costs associated with any New QF
Contract, which exceeds the costs PacifiCorp would have otherwise incurred acquiring
Comparable Resources, will be assigned on a situs basis to the State approving such
contract.”20 PacifiCorp therefore requested that, if the Idaho PUC approved the
Agreements for the Cedar Creek projects, that it assign the $10 million incremental cost
associated with the five agreements to PacifiCorp’s Idaho customers.21
The Cedar Creek Agreements are the tip of an iceberg of overpriced Idaho QF
contracts. Between December 16, 2010 and January 10, 2011 PacifiCorp and Idaho Power
together filed with the Idaho PUC seventeen (17) published avoided cost power purchase
agreements comprising 443.4 MW of disaggregated wind QFs, all of which were executed
after the reduced eligibility cap took effect—at rates the Idaho PUC believed to be too
high.22

Application for Approval of PPAs with Cedar Creek Wind, ¶ 6 (January 10, 2011) (“Application for
Approval”)(attached hereto as PacifiCorp Exhibit 104).
18 Id.
19 The Revised Protocol, recognizing that PacifiCorp operates an integrated electric system that spans six
states, seeks to allocate PacifiCorp's costs among its jurisdictional states in an equitable manner.
20 Application for Approval (PacifiCorp Exhibit 104) at ¶ 7.
21 Id.
22 See In the Matter of the Application of Idaho Power Co. for a Determination regarding a Firm Energy
Sales Agreement Between Idaho Power and…, Idaho PUC Case Nos. IPC-E-10-51 to -55, Order No. 32254

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The Idaho PUC did not approve the Agreements. The Idaho PUC found that the
Agreements were not fully executed until December 22, 2010—eight days after the
eligibility cap changes.23 It found that the Agreements themselves stated that they were
not effective until fully executed and approved by the Idaho PUC.24 It further found that
the time and scope of review undertaken by PacifiCorp after it received the Agreements
tendered by Cedar Creek was reasonable.25 Because the Agreements were not executed or
effective prior to December 14, 2010, the Idaho PUC found that the Cedar Creek projects
were not eligible for published avoided cost rates.26 It found, further, that the Cedar Creek
projects were not eligible for grandfathered treatment27 and therefore disapproved the

(2011) (disapproving Idaho Power’s power purchase agreements with Alpha Wind LLC (29.9 MW), Bravo
Wind LLC (29.9 MW), Charlie Wind, LLC (29.9 MW), Delta Wind, LLC (29.9 MW), and Echo Wind (27.6
MW)); see also In the Matter of the Application of Idaho Power Co. for a Determination regarding a Firm
Energy Sales Agreement Between Idaho Power and…, Idaho PUC Case Nos. IPC-E-10-56 to -58, Order No.
32255 (2011) (disapproving Idaho Power’s power purchase agreements with Murphy Flat Mesa, LLC (25
MW), Murphy Flat Energy, LLC (25 MW), and Murphy Flat Wind, LLC (25 MW)); see also In the Matter
of the Application of Idaho Power Co. for a Determination regarding a Firm Energy Sales Agreement
Between Idaho Power and…, Idaho PUC Case Nos. IPC-E-10-59 and -60, Order No. 32256 (2011)
(disapproving Idaho Power’s power purchase agreements with Rainbow Ranch Wind, LLC (23 MW) and
Rainbow West Wind, LLC (23 MW)); see also In the Matter of the Application of Idaho Power Co. for a
Determination regarding a Firm Energy Sales Agreement Between Idaho Power and…, Idaho PUC Case
Nos. IPC-E-10-51 and -62, Order No. 32257 (2011) (disapproving Idaho Power’s power purchase
agreements with Grouse Creek Wind Park, LLC (21 MW) and Grouse Creek Wind Park II, LLC (21 MW);
Order No. 32260 (disapproving Rocky Mountain Power’s power purchase agreements for Cedar Creek
Wind’s Rattlesnake Canyon Project (27.6 MW), Coyote Hill Project (27.6 MW), North Point Project (27.6
MW), Steep Ridge Project (25.2 MW), and Five Pine Project (25.2 MW)) (Exhibit 1 to Cedar Creek
Petition) (“June 8 Order”).
23 Idaho PUC Docket Nos. PAC-E-11-01 to -05, Order No. 32260, 6 (Exhibit 3 to Cedar Creek Petition)
(“July 27 Order”).
24 Id. at 10.
25 Id. at 10-11.
26 Id. at 16.
27 Id. at 11.

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Agreements.28 Cedar Creek now petitions the Commission to declare that the Idaho
PUC’s legal bases for disapproving the Agreements violated PURPA.

VI. COMMENTS
PacifiCorp opposes any effort by Cedar Creek to enforce the Agreements
previously rejected by the Idaho PUC. The Agreements were denied based on a rule
change made within the state’s allowed discretion that served to make the projects
ineligible to receive the published rate. Because the state’s PURPA rules have been
properly implemented, the attack is based on whether the rules, as revised, are properly
applied to Cedar Creek. This as-applied claim falls under the jurisdiction of the state
courts and should be dismissed.
Alternatively, the Commission should reject Cedar Creek’s petition because the
Idaho PUC acted appropriately in denying the Agreements. The Idaho PUC has discretion
to determine the point at which a legally enforceable obligation arises. By defining that
point at the execution of a contract by both buyer and seller, while still providing the QF
the ability to unilaterally create a legally enforceable obligation by filing a meritorious
complaint with the Idaho PUC, the Idaho PUC provides clarity and consistency with Idaho
PURPA law and allows the seller a vehicle to ensure timely execution by the utility.
A. Cedar Creek’s petition should be dismissed for lack of jurisdiction.
The Idaho PUC’s determination whether to require utilities to offer published rate
contracts to QFs over 100 kW is a discretionary act not subject to Commission review.

28 Id. at 16.

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PURPA requires standard published rates for QFs with a design capacity of 100 kW or
less. Provision of standard rates for any facilities larger than 100 kW, however, is left to
the discretion of the state. 29 The Idaho PUC must have this discretion in order to balance
the application of PURPA with the public interest. If, as is currently the case in Idaho,
allowing larger QFs to obtain published rates results in significant economic impacts to
the ratepayers that can be avoided by lowering the eligibility cap, the state has a
responsibility to apply the discretion afforded by PURPA.
FERC lacks jurisdiction over Cedar Creek’s petition because Cedar Creek is
challenging the Idaho PUC’s application, not the Idaho PUC’s implementation, of
PURPA. Federal jurisdiction over PURPA implementation matters is exclusive.30
However, PURPA limits the jurisdiction of FERC and the federal district court to matters
of reviewing state rules implementing PURPA and FERC regulations31 and reserves to
state courts the authority to review state rules that have been implemented and how those
rules have been applied in a particular circumstance.32 Once a state regulatory agency has
properly implemented PURPA and FERC regulations, the proper review of the state’s
rules as applied to an individual belongs to the state courts.33

29 18 C.F.R. § 292.304(c)(1-2).
30 Power Resource Group, Inc. v Pub. Util. Comm. of Texas, 422 F.3d 231, 235 (5th Cir. 2005).
31 16 U.S.C. § 824a-3(h)(2)(A) (210(f and h)). Subsection (f) establishes FERC’s authority to create
governing rules to implement PURPA. 16 U.S.C. § 824a-3(f).
32 16 U.S.C. § 824a-3(g); Indus. Cogenerators v. FERC, 310 U.S. App. D.C. 357, 47 F.3d 1231, 1234 (D.C.
Cir. 1995); Massachusetts Inst. of Tech. v. Massachusetts Dep't of Pub. Utils., 941 F. Supp. 233, 236 (D.
Mass. 1996); Greensboro Lumber Co. v. Ga. Power Co., 643 F. Supp. 1345, 1374 (N.D. Ga. 1986)); Policy
Statement Regarding the Commission's Enforcement Role Under Section 210 of the Public Utility
Regulatory Policies Act of 1978, at *2 (FERC 1983) (“FERC Policy Statement”).
33 Id.

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Cedar Creek’s petition is more properly characterized as an as applied claim. An
implementation claim properly brought before FERC asserts that the state agency’s plan is
not a lawful implementation of PURPA. An as applied claim that belongs in the state
courts, on the other hand, involves the implementation of a plan that is unlawful in how it
is applied to a specific claimant.34 The Idaho PUC properly implemented its rules
according to PURPA. It established a bright line eligibility cap according to its statutorily
allowed discretion and gave proper notice of the intended change. Cedar Creek’s
complaint only arose when the properly established rule was applied to its specific case.
This case is similar to a claim made by Massachusetts Institute of Technology
(“MIT”) in 1996.35 There the United States District Court of Massachusetts held that it
lacked jurisdiction to hear a QF’s complaint concerning stranded-cost recovery charges
because the plaintiffs’ federal petition sought an as applied review of a state policy as it
specifically applied to a QF.36 The District Court viewed the petition as an “as applied”
challenge to a matter of discretionary state policy and federal jurisdiction was denied.37
Just as in the MIT decision, the Idaho PUC’s decision to lower the eligibility cap is
a matter left to state discretion. And just as MIT did, Cedar Creek seeks a review of how a
state has applied a rule formulated as a matter of state policy to its specific case. FERC
34 Power Res. Group v. Pub. Util. Comm'n of Tex., 422 F.3d 231, 235 (5th Cir.2005).
35 Massachusetts Inst. of Tech. v. Massachusetts Dep't of Pub. Utils., 941 F. Supp. 233, 236 (D. Mass. 1996)
36 Id. See 18 C.F.R. § 292.395 requires that rates established for QFs “(i) shall be just and reasonable and in
the public interest; and (ii) shall not discriminate against any qualifying facility in comparison to rates for
sales to other customers served by the electric utility.”
37 Id.

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and the federal courts are prohibited by PURPA from exerting jurisdiction over these “as
applied” matters. Therefore, jurisdiction before FERC and the federal courts is improper.
The Commission has stated that it has given the states “a wide degree of latitude” when it
comes to establishing rules under PURPA.38 That latitude includes developing rules
appropriate to the local market “so long as the final plan is consistent with statutory
requirements.”39 The implementation of the Idaho PUC rules regarding the eligibility cap
for published rates are included in that latitude. Once the rules were properly established,
determining how they should be applied to the Cedar Creek contract is a matter for the
state courts. This petition should be dismissed.
B. In the alternative, if FERC finds that it has jurisdiction over Cedar
Creek’s petition, the Idaho PUC’s implementation PURPA in the
Idaho PUC’s orders was proper.
Cedar Creek bases its petition on its interpretation that Idaho law violates PURPA
by allowing utilities to shirk their PURPA obligations by refusing to execute contracts
with QFs. This Section VI.B explains why the basis of Cedar Creek’s argument is wrong
and that, in fact, Idaho law does allow QFs to create legally enforceable obligations with
unwilling utilities. First, this Section briefly restates FERC’s grant of discretion to states to
determine when a legally enforceable obligation. Second, this Section explains Idaho law
regarding the creation of legally enforceable obligations and why it is consistent with
PURPA. Lastly, this Section argues that the June 8 Order and the July 27 Order are

38 FERC Policy Statement at 3.
39 Id.

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consistent with Idaho law and PURPA in that they do not limit QFs to establishing a
legally enforceable obligation only by executing a contract with a utility.
1. FERC has granted states discretion to determine when a legally
enforceable obligation arises.
FERC rule 18 C.F.R. § 292.304(d)(2) implements PURPA by providing a QF the
right to sell net output to the utility at a price determined at the time of delivery or at the
time the QF establishes a legally enforceable obligation to sell its output to the utility.40
FERC explained, when it adopted this regulation, that the term “legally enforceable
obligation” recognizes that, in order to prevent a utility from frustrating the intent of
PURPA by refusing to sign a power purchase agreement, a QF must have a path to create
a buy-sell obligation between itself and the utility without the utility’s execution of a
contract.41 FERC, however, left it to each state to determine the specific parameters of
individual QF power purchase agreements, including the date on which a legally
enforceable obligation is incurred under state law.42
2. Idaho has lawfully implemented 18 C.F.R. § 292.304(d)(2) by
establishing law that a QF may create a legally enforceable obligation
by (1) executing a contract with a utility, or (2) filing a meritorious
complaint with the Idaho PUC.
Under long-standing Idaho law, as announced by the Idaho PUC and affirmed by
the Idaho Supreme Court, there are two paths by which a QF may establish a legally
40 The Idaho Supreme Court has observed 18 C.F.R. § 292.304(d)(2) in Rosebud Enterprises, Inc. v. Idaho
Pub. Util. Comm’n, 128 Idaho 609, 613, 917 P.2d 766, 770 (1996).
41 Small Power Production and Cogeneration Facilities; Regulations Implementing Section 210 of the
Public Utility Regulatory Policies Act of 1978, 45 Fed. Reg. 12214, 12224, FERC Order No. 69 (Feb. 25
1980).
42 West Penn Power Co., 71 FERC ¶ 61,153 (1995); see Rosebud, 128 Idaho at 623-24, 917 P.2d at 780-81
(citing West Penn Power).

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enforceable obligation under PURPA. The first path is for the utility and the QF to execute
a power purchase agreement and to obtain approval of that agreement by the Idaho PUC.43
The Idaho Supreme Court has determined that a QF power purchase agreement becomes
effective and a legally enforceable obligation arises—thereby fixing the avoided cost
rate—when the Idaho PUC approves the executed contract. If, however, the rate
applicable to the proposed power purchase agreement has changed prior to the date the
Idaho PUC grants its approval, the Idaho PUC may, in its discretion, determine that the
QF should receive grandfathered rate treatment and have access to the rates that were in
effect just prior to the rate change.44 In Rosebud, the Idaho Supreme Court found that
“[c]onferment of grandfathered status on qualifying facilities is essentially an [Idaho PUC]
finding that a legally enforceable obligation to sell power existed by a given date. Such a
finding is within the discretion of the state regulatory agency.”45
43 Earth Power Resources, Inc. v. The Washington Water Power Co., Idaho PUC Case No. WWP-E-96-6,
Order No. 27231 (1997) (“Since its initial implementation of PURPA in 1980, the Idaho PUC has required
that signed contracts be submitted for review, approval and lock-in of effective rates. A lock-in of rates does
not occur until the Idaho PUC approves a contract to provide power. 18 C.F.R. § 292.304(d).”).
44 See Rosebud, 128 Idaho at 620, 917 P.2d at 777 (noting that QF “is not entitled to a lock-in of an avoided
cost rate until it has entered into a legally enforceable and IPUC approved obligation for delivery or energy
and capacity...” and acknowledging the IPUC’s “grandfathered treatment” of QFs that have executed a
contract or filed a complaint but not obtained Idaho PUC approval before the rate changed); see also In the
Matter of the Application of Idaho Power Company for New Cogeneration/Small Power Production
Purchase Rates, Idaho PUC Order No. 19850 (1985) (Idaho PUC states that QFs that file a meritorious
complaint prior to rate change will enjoy grandfathered status and will be entitled to old rates if the
complaint is subsequently approved by the Idaho PUC); see also Public Service Company of New
Hampshire, 131 FERC ¶ 61,027, ¶¶ 23-24 (2010) (FERC recognizes distinction between grandfathering and
the establishment of a legally enforceable obligation and concludes that a QF may have a grandfathered right
to require a utility to purchase its net output even if the QF has not fully established a legally enforceable
obligation prior to the date FERC grants the utility’s request to be relieved of the PURPA buy-sell
obligation).
45 Rosebud, 128 Idaho at 624, 917 P.2d at 781.

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In the second path, a QF may incur a legally enforceable obligation under Idaho’s
implementation of PURPA by filing a meritorious complaint. In order for a complaint to
be “meritorious,” the complainant must allege and prove: (1) that the project was
substantially mature to the extent that would justify finding that the developer was ready,
willing, and able to sign a contract; and (2) that the developer had actively negotiated for a
contract which, but for the reluctance of the utility, would have been executed.46 In sum,
QF creates a legally enforceable obligation in Idaho either: (1) when the Idaho PUC
approves a power purchase agreement that has been executed by the utility and the QF; or
(2) when the QF files a complaint alleging that but for the utility’s inappropriate refusal to
execute an agreement the QF would have obtained a power purchase agreement and the
Idaho PUC has approved the relief request (i.e., the complaint must prove to be
meritorious).
The framework for creating a legally enforceable obligation in Idaho is more
accommodative to QFs than the Texas Public Utility Commission (“Texas Commission”)
implementation of 18 C.F.R. § 292.304(d)(2) upheld by the United States Court of
Appeals in Power Resources Group, Inc. v Pub. Util. Comm. of Texas.47 In Power
Resources, a QF developer challenged the Texas Commission’s rule that a legally
enforceable obligation could not be established until a QF is within 90 days of delivering
power. The plaintiff developer argued that this “90-day rule” violated a QF’s PURPA

46 Earth Power Resources, Inc., Idaho PUC Order No. 27231; Rosebud, 128 Idaho at 624, 917 P.2d at 781;
A.W. Brown Co., Inc. v. Idaho Power Co., 121 Idaho 812, 814, 828 P.2d 841, 843 (1992).
47 422 F.3d 231 (5th Cir. 2005).

MOTION TO INTERVENE AND COMMENTS OF
PACIFICORP - 18
right to establish a legally enforceable obligation pursuant to 18 C.F.R. § 292.304(d)
because a new QF cannot be financed and constructed in 90 days. In essence, the Texas
90-day rule means that a developer must construct a QF before it can establish a legally
enforceable obligation.
The United States Court of Appeals for the Fifth Circuit rejected the QF
developer’s arguments and held that the 90-day rule was within the state’s broad
discretion to determine when a legally enforceable obligation is formed under PURPA.
The court reasoned that neither PURPA nor 18 C.F.R. § 292.304(d) gives QFs the right to
create a legally enforceable obligation “at any time.”48 Further, the court noted that, if
FERC had determined that States must allow a QF to lock in rates with a legally
enforceable obligation prior to construction of a facility, it could have said so in its rules.49
Because Idaho PUC’s requirements for a QF to form a legally enforceable obligation are
less limiting than those imposed by the Texas Commission and approved by the Fifth
Circuit, Idaho’s implementation of 18 CFR §292.304(d) is lawful.
3. The Idaho PUC correctly applied State law to Cedar Creek’s power
purchase agreements; Cedar Creek was not a hostage to PacifiCorp’s
signature.
Cedar Creek’s chief accusation in its petition is that the Idaho PUC held that a QF
has no PURPA right to avoided cost rates until both parties sign an agreement.50 The
Idaho PUC did not actually make such a statement; however, Cedar Creek argues that it is

48 422 F.3d at 238-39.
49 Id. at 239.
50 Cedar Creek Petition at 12.

MOTION TO INTERVENE AND COMMENTS OF
PACIFICORP - 19
inherent in “the logic of the June 8 Order.”51 Cedar Creek has mischaracterized Idaho law
and the Idaho PUC’s order.
As was explained above, there are two ways an Idaho QF may create a legally
enforceable obligation and only one depends on the utility’s cooperation. A QF may arrive
at a legally enforceable obligation via a bi-lateral contract, or it may create a legally
enforceable obligation without the utility’s consent if (1) the QF project was substantially
mature to the extent that would justify finding that the developer was ready, willing, and
able to sign a contract; and (2) the developer had actively negotiated for a contract which,
but for the reluctance of the utility, would have been executed. Cedar Creek’s petition
ignores the second prong of Idaho’s law on legally enforceable obligations—the Idaho
PUC did not. In its order denying Cedar Creek’s request for rehearing, the Idaho PUC
stated:
In this consolidated case, we found that each of the five projects incurred a
legally enforceable obligation on December 22, 2010. Thus, there is no
resort to the use of grandfathering criteria. We further find that the time
Rocky Mountain Power took to complete its final review of the
Agreements was reasonable. This finding is consistent with our authority
under federal and state law.52
The above passage shows that the Idaho PUC considered both paths to a legally
enforceable obligation. First, it found that a legally enforceable obligation arose on
December 22, 2010—the date the power purchase agreements were executed. But it did
not stop there. It went on to consider whether PacifiCorp took a reasonable amount of time

51 Id.
52 July 27 Order at 11.

MOTION TO INTERVENE AND COMMENTS OF
PACIFICORP - 20
to execute the agreements it received on December 13, 2010. It noted that the Commission
has directed utilities to assist the Commission in its gatekeeper role when reviewing QF
contracts.53 In light of its directive, the size and number of the contracts, and PacifiCorp’s
explanation of its review process, the Commission concluded that the nine days it took
PacifiCorp to execute the December 13, 2010 agreements was reasonable.54
The Idaho PUC’s finding that PacifiCorp’s delay in executing the agreements was
reasonable shows that the Idaho PUC considered whether the legally enforceable
obligation arose before December 22, 2010 under the second path for establishing a
legally enforceable obligation. If the Idaho PUC had found that PacifiCorp’s delay was
unreasonable, it presumably would have determined a reasonable delay period, added it to
the date Cedar Creek tendered the power purchase agreements (December 13), and come
up with a different date (prior to December 22, 2010) when a legally enforceable
obligation arose. However, because the Idaho PUC found that it was reasonable for
PacifiCorp to take nine days to execute the agreements, Cedar Creek could not show that,
but for the reluctance of the utility, it would have executed contracts sooner than
December 22, 2010. Under Idaho law and the Idaho PUC’s orders, a QF is never held
hostage to a utility’s signature; and Cedar Creek suffered no such harm.

53 Id. at 10 (“[A] comprehensive review of a power purchase agreement is consistent with this Commission’s
directive to utilities that they assist the Commission in its gatekeeper role when reviewing QF contracts.”).
54 Id. at 10-11.

MOTION TO INTERVENE AND COMMENTS OF
PACIFICORP - 21
VII. CONCLUSION
WHEREFORE, for the foregoing reasons, PacifiCorp respectfully requests that the
Commission grant this Motion to Intervene and issue an order consistent with the
foregoing comments.
Respectfully submitted this 26th day of August, 2011.

/s/ Michael Reid
Michael Reid
Legal Counsel
PacifiCorp Energy
825 N.E. Multnomah St., Suite 600
Portland, OR 97232
[phone]
[e-mail]

MOTION TO INTERVENE AND COMMENTS OF
PACIFICORP - 22
INDEX OF EXHIBITS

Exhibit 101 Comments of Cedar Creek Wind (January 26, 2011)
Exhibit 102 Joint Petition of Idaho Power Co, Avista Corp., and PacifiCorp (November
8, 2010)
Exhibit 103 Reply Comments of PacifiCorp (April 12, 2011)
Exhibit 104 Application for Approval (w/o attachment) (January 10, 2011)

MOTION TO INTERVENE AND COMMENTS OF
PACIFICORP - 23

CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing MOTION TO
INTERVENE AND COMMENTS OF PACIFICORP upon Kimberly D. Bose,
Secretary for the Federal Energy Regulatory Commission via Electronic Filing properly
addressed and with postage prepaid to all parties on the Official Service list provided by
FERC.
DATED this 26th day of August, 2011.
/s/ Michael Reid
Michael Reid
Docket No. EL11-59-000
Motion to Intervene and Comments of PacifiCorp

EXHIBIT 101

Comments of Cedar Creek Wind
(January 28, 2011)
WILLIAMS . BRADBURY
ATTORNEYS AT LAW E \!
Janua 26, 2011 iun J~N 26 ftMll:26
'1£f.~
Idaho Public~ Commission
472 W. Washington Street
Boise,ID 83702
ATTN: Jean D. Jewell
Commission Secretar
Re: In the Matter of the Application of Rocky Mountain Power for Approval of Power
Purchase Agreements Between Rocky Mountain Power and Cedar Creek Wind
Dear Jean:
Please find enclosed the original and seven (7) copies of Comments of Cedar Creek
Wind LLC in Support of Rocky Mountain Power's Application for Approval of a Power
Purchase Agreement, together with Affidavit of Dana Zentz, in each of the following actions:
Rattlesnake Canyon
Coyote Hil
North Point
Steep Ridge
Five Pine
PAC-E-11-01
PAC-E-11-02
PAC-E-11-03
PAC-E-11-04
PAC-E-11-05
Sincerely,R~lJ~
Ronald L. Wiliams
RLW/jr
Enclosures
1015 W. Hays Street - Boise, ID 83702
Phone: [phone] - Fax: [phone] - ww.wiamsbradbur.com
Ronald L. Wiliams, ISB No. 3034
Wiliams Bradbur, P.C.
1015 W. Hays St.
Boise ID, 83702
Telephone: [phone]
Fax: [phone]
ron~willamsbradbur.com
Ci
L"no Jl~J2(" AU¡Hi f'fi 0 HM If: 27
Attorneys for Cedar Creek Wind, LLC
BEFORE THE IDAHO PUBLIC UTILITES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF ROCKY MOUNTAIN POWER FOR )
APPROVAL OF POWER PURCHASE )
AGREEMENTS BETWEEN RMP AND )
CEDAR CREEK WID LLC )
)
)
Case No. PAC-E-11-01
COMMENTS OF CEDAR CREEK
WIND LLC IN SUPPORT OF ROCKY
MOUNTAIN POWER'S APPLICATION
FOR APPROVAL OF A POWER
PURCHASE AGREEMENT
Cedar Creek Wind, LLC ("Cedar Creek" or "CCW") files these comments
in support of the Application in this case by Rocky Mountain Power ("RMP" or
"PacifiCorp") for approval of the Power Purchase Agreement ("PP A") between RMP and
Cedar Creek for the Rattlesnake Canyon Wind Project (the "Project"). For the reasons
stated below, Cedar Creek requests that the Commission approve the PPA.
STATEMENT OF FACT
For a full and complete statement of the facts in this case please see the
accompanying affdavit of Dana Zentz.
The electrical interconnection study process for this Project and the other four
CCW wind projects commenced in 2008 and is now at a very matue stage. Zentz
Affdavit, ~ 6. System impact studies for this Project were completed by RMP in 2009, a
final facilities study report was issued by RMP in March of 2010 and CCW paid in April
Cedar Creek Wind, LLC Comments in Support ofPPA Approval Page 1
2010 a $100,000 deposit for RMP to commence detailed interconnection engineering and
procurement of interconnection pars. Id All other material milestones needed for
electrical interconnection, short of actual facilities construction, have been met. In total,
Cedar Creek has paid over $475,000 to RMP for interconnection and PTP application,
along with cost studies, transmission system impact studies and for project specific
engineering and procurement. Id
Cedar Creek Wind was an unsuccessful bidder of approximately 150 MW of wind
generation in PacifiCorp's 200812009 Requests for Proposals for renewable energy.
Instead, PacifiCorp selected Wyoming based wind generation in that RFP process. As a
result, in late 2009, CCW began negotiations with RMP for the sale of power from two
78 MW wind Qualify Facilities. In early 2010 Cedar Creek asked RMP to ru its
integrated resource (IR) model to calculate the PURP A rate for two 78 MW wind
projects. In late April 2010, RMP responded with IR model results showing a first year
(2012) non-Ievelized PURPA rate of$37.01/MWh (which included the $6.50/MWh wind
integration charge). This "calculated" avoided cost rate was 35% below the 2012 non-
levelized net avoided cost rate of$57.47/MWh established by the Commission on March
16,2010 for PacifiCorp. Id, ~ 5. More importtly, the non-negotiable rate offered by
RMP to CCW was uneconomic and un-financeable for puroses of developing the Cedar
Creek wind project.
At this point in the spring of2010 CCW had two choices: (i) contest before the
Commission the accuracy ofRMP's modeling of its avoided cost, or (ii) reduce the
amount of gross generation and sacrifice the economies of scale associated with two 78
MW wind projects and reconfgure into five separate PURP A projects not greater than 10
Cedar Creek Wind, LLC Comments in Support ofPPA Approval Page 2
aMW, in order to qualify for Surogate Avoided Resource ("SAR") based avoided cost
rates. Cedar Creek chose the latter option, as a contested case before the Commission
challenging PacifiCorp's IR model would have been extremely expensive and involved
delay likely fatal to the Project. Id, ~~ 2-5.
Starting in early May 2010, RMP and CCW were in almost constant
communcation and then negotiations concerning PP As for the five Cedar Creek 10 aMW
wind projects. Much of the data and detail concerning the CCW projects requested by
PacifiCorp was beyond the scope considered reasonable and necessary for a PURP A
PPA, but CCW complied with all ofPacifiCorp's requests fully, even though doing so
fuher delayed the eventual delivery of a first draft PPA from PacifiCorp. Zentz Affdavit,
~~ 14, 15 While PacifiCorp's motive for these requests mayor may not have been to
delay the execution of the PP As, the facts of the case are that the PP As would have been
ready for execution several months before the end of 20 1 0, but for these requests.
Likewise, contract negotiations concerning ownership of renewable energy credits
fuher stalled a final PP A. Nonetheless, Cedar Creek and PacifiCorp stil came to a
meeting of the minds and agreed to final terms and conditions of a PP A for this Project
by November 29,2010. On that date, PacifiCorp transmitted to CCW a "proposed final
redline" PPA, and on that same date Cedar Creek responded "we have nothing fuer."
Id, ~ 16.
While the PP A for this Project should have been signed the first week of
December, PacifiCorp stared to slow the process down again, by failng to deliver an
executable PPA to CCW, based on a newly anounced need for additional credit, legal
and management review of this Project's PPA and the other four Cedar Creek PPAs.
Cedar Creek Wind, LLC Comments in Support ofPPA Approval Page 3
This "new" review was focused on standard form contract language created by
PacifiCorp and on pars of those standard agreements which had not changed materially
if at all, since negotiations began. At that time CCW argued, to no avail, that the
standard contract language was well vetted with PacifiCorp management in advance of
the completion of the negotiations in November. Id, ~ 17.
While CCW can not know why PacifiCorp inserted these new requirements at the
11 th hour of the contracting process, the fact remains that the PP A for this Project was
ready to execute the first week of December, 2010, and CCW was assured that
PacifiCorp was ready to execute, prior to the introduction of these new review
requirements. A final form, executable PP A for the Project was eventually delivered
from PacifiCorp to CCW on December 9,2010 with the statement from RMP that RMP
would be prepared to execute the Project's PPA on Monday, December 13,2010. Id, ~
20. Cedar Creek executed the PPA for this Project on Monday, December 13,2010 and
hand-delivered the same to PacifiCorp at its office in Portland Oregon. PacifiCorp did not
execute this Project's PPA until December 22,2010, twenty-thee days after
acknowledging that the PP A was "in final form" and ready for execution and receiving
CCW's execution of the same.
PacifiCorp acknowledges in thee separate pleadings before this Commission that
this Project's PPA, and the other four like them, were mature contracts with a meeting of
the minds reached between the paries before December 14,2010. First, in its Application
for contract approval in this case, PacifiCorp states: "The five (CCW) projects. . .
complied with all PURPA's regulation including the 1-mile separation requirement, and
met all Idaho rules and Commission Orders." Application of Rocky Mountain Power,
Cedar Creek Wind, LLC Comments in Support of PP A Approval Page 4
Case NO.PAC-E-II-0l through 05, p.p. 5,6. PacifiCorp's Application fuer
acknowledges that this Project's PP A was prepared by PacifiCorp, was executed by
CCW on December 13, 2010, and complied with relevant Commission Order Nos.
29632,30423,31021, and 31025. Id, p. 8.
Furher, Bruce Griswold, in his affidavit filed on Januar 19, 2010, in Case No.
GNR-E-1-04, states: "Because Rocky Mountan Power and Cedar Creek Wind LLC
reached agreement on all terms of their power purchase agreements including price prior
to December 14,2010, Rocky Mountain Power executed final power purchase
agreements and, on Januar 10,2010, filed them with the Commission." Case No. GNR-
E-I0-4, Griswold, B., (Di), p. 5.1
As a final acknowledgement that this PP A was agreed to and effectively entered
into by PacifiCorp and CCW prior to December 14,2010, PacifiCorp states in its Joint
Utilty Docket Reply Comments of Janua 19,2011 that: "If Rocky Mountain Power
and the QF (under 10 aMW) both executed the power purchase agreement or reached
agreement on all final terms of a PP A prior to December 14, 2010, Rocky Mountain
Power will pay Seller the published avoided cost prices." Reply Comments of RMP, pp
5-6. A footnote immediately following specifically references Cedar Creek: "An example
is the Cedar Creek Wind LLC QF development consisting of five separate and distinct
facilties each sized 10 aMW or less. . . .(wherein) . .. Rocky Mountain Power and Cedar
Creek finished negotiations of all terms prior to December 14,2010." Id, Fn. 10.
i matters contained in parenthesis are omitted
Cedar Creek Wind, LLC Comments in Support ofPPA Approval Page 5
STATEMENT OF LAW
In the Notice of Joint Petition, Order No. 321312, the Commission ordered that the
Commission's decision regarding whether or not to reduce the published avoided cost
eligibility cap would become effective on December 14,2010. PacifiCorp, in its
Application in this case, asks the Commission for an Order "accepting or rejecting" this
Project's PPA between Cedar Creek and RMP. However, RMP provides no gudance to
the Commission or evidence to support either of the two recommendations and instead
uses the Application to continue 'pleading its case' in the Joint Utilties Docket for a
reduction in the published avoided cost rate eligibility cap? Unfortunately, the
Application is virtally void of any representations or proof as to whether this Project's
PPA was "ripe" before December 14, 2010. Consequently, Cedar Creek is compelled to
explain and document the facts that warant approval ofthis Project's PPA. To that effect
please refer to the accompanying affidavit of Dana Zentz and attachments thereto.
It is clear from the record, as supplemented by this filing, as well as excerpts of
the record from the Joint Utilities Docket, that this Project's PPA should be approved by
the Commission and that CCW is entitled to the rates, terms and conditions contained
therein and that existed before December 14,2010. Specifically, Cedar Creek is entitled
to a contract with rates established by this Commission on March 16, 2010 in Order No.
31025, for a PURP A QF wind project that contracts with PacifiCorp and does not
generate in excess of 10 aMW in any given month, in compliance with IPUC order No.
2 See, Joint Petition of Idaho Power Company, Avista Utilties and Paeifeorp, GNR-E-I0-04.
3Id
Cedar Creek Wind, LLC Comments in Support ofPPA Approval Page 6
30497.4 This entitlement is due to Cedar Creek and PacifiCorp having resolved and
agreed to all material outstanding contract issues prior to December 14,2010. As
discussed below, both the Idaho Supreme Cour and the Commission have previously
reviewed the question of maturity needed for a QF project to be entitled to vintage rates
or terms applicable before a certin date.
The Supreme Cour first stated that a project must be "a QF" and "ready willing
and able to sign a contract" with a utility in order to be entitled to standardized PURP A
rates. Empire Lumber Co. v. Wash. Water Power Co., 114 Idaho 191, 755 P.2d 1229,
1232 (1987). The Cour in a later case also approved of the Commission's establishment
of a more detailed set of requirements for QF contracts seeking vintage QF rates where it
agreed with the Commission that: "The QF must be able to exhibit that is has laid a
proper foundation entitling it to contract consideration" and that a "CSPP (QF) is not
entitled to contract rates until it is ready, willng and able to sign a contract." A. W Brown
Co., Inc., v. Idaho Power Company, 121 Idaho 812,817; 828 P.2d 841 (1992). The Court
in A. W Brown Co. went on to fuher affirm the Commission's decision that the "ready,
wiling and able" standard of "substative negotiation" will "entail making a
comprehensive binding offer showing with reasonable specificity, design and size
characterizes and indicating a willngness to rely on proposed contract terms and proceed
thereunder." Id
Two recent QF contract approvals by the Commission continue a long line of
decisions wherein the Commission reviews the relevant facts and circumstances to
determine whether a QF is entitled to vintage rates or terms. Some of the factors recently
4 Case No. PAC-E-07-07: In the Matter ofthe Petition of Rocky Mountain Power for an Order Revising
Certain Obligations to Enter Into Contracts to Purchase Energy Generated by Wind-Powered Small Power
Generation Qualifying Facilities.
Cedar Creek Wind, LLC Comments in Support ofPPA Approval Page 7
noted by the Commission as determinative, when taken together, include: (i) whether a
QF developer is materially down the path of facilty interconnection with the utilty, (ii)
whether the developer obtained QF status from the FERC, (iii) whether the paries had
exchanged contract drafts and project specific information, and (iv) whether the paries
reached a meeting of the minds as to the material contract terms and conditions. Order
No. 321045; See also Order No. 320686 In both of these instances - Yellowstone Power
and Grand View Solar - the Commission approved contracts that were executed
substatially after March 16,2010, but contained the higher vintage PURPA avoided cost
rate applicable to pre-March 16, 2010 contracts. 7 In both of these cases it was Idaho
Power's assertion that it and the developer "had resolved all material outstanding contract
issues prior to March 16, 2010." Order No. 32068, p. 2. The Commission also found in
Grand View Solar the representations of Idaho Power "that all outstanding contract issues
had been resolved prior to March 16, 2010" to be a convincing and accurate portrayal of
the paries having come to a meeting of the minds. Id at p. 5.
The affdavit of Dana Zentz similarly demonstrates that "all outstanding contract
issues" were resolved between PacifiCorp and Cedar Creek prior to December 14,2010.
PacifiCorp is in agreement with this statement of fact; although it could not apparently
admit so directly in this case and instead made such statements in the Joint Utilities
Docket.
5 Case No. IPC-E-I0-22; In the Matter of the Application ofIdaho Power Company for Approval ofa Fir
Energy Sales Agreement with Yellowstone Power Inc.
6 Case No. IPC-E-1O-19; In the Matter of the Application ofIdao Power Company for Approval ofa Fir
Energy Sales Agreement with Grand View Solar PV 1.7 The contract between Yellowstone Power Inc. and Idaho Power was dated July 28, 1020, more than four
months after the change in rates. Idao Power and Grand View Solar executed their contract on June 8,
2010, not quite thee months after the change in rates.
Ceda Creek Wind, LLC Comments in Support ofPPA Approval Page 8
PacifiCorp's Application to Commission for approval or rejection of this Project's
PP A presents the Commission three policy reasons favoring the latter: (i) that the five
CCW projects are a significant par (e.g., 30%) of the inundation ofIdaho wind power
onto PacifiCorp8; (ii) that the five CCW projects will create system instability or
uneliability9, and (iii) the cost of energy from CCW is in excess ofRMP's avoided cost
and wil have adverse impacts on RMP's retail rates in Idaho.10 None of these reasons
are relevant to the Commission's determination in ths case. Nor are the statements in
PacifiCorp's Application accurate.
From 2005 to date, only eight wind contracts between developers and PacifiCorp
(including the five CCW PPAs) have been submitted to this Commission for approval.
None of these eight have yet commenced constrction and none are yet delivering energy
to RMP. Whether or not an additional two or three hundred MW of wind capacity is
about to be contracted for by PacifiCorp, subject to pre or post December 14,2010 rates,
terms and conditions is simply a matter of speculation. Furhermore, a PacifiCorp system
perspective must also be kept in mind. Energy needed by PacifiCorp in 2011 is projected
to be slightly over 61 milion MWhs.ll IfPacifiCorp were to absorb an additional 350
MW s of Idaho based wind nameplate generation into its system, it would amount to
approximately 3.5 percent ofPacifiCorp's projected 2011 coincident system peak. More
relevant, energy provided by 350 MWs of nameplate wind would equal approximately
1.5% ofPacifiCorp's projected energy needed in 2011.
8 Application ofRMP, ~ 6.
9 Id,~ 8.
10 Id., ~~ 6-8.
11 See PacifCorp 2011 IRP Public Meeting Handout, October 5,2010, p. 16,
athtt://www.pacificoi:.com/content/dampacificoi:/docÆnergy Sourcesllntegrated Resource Plan/20 11
IRPlPacifiCoi: 2011IRP PIM4 10-05-10.pdf
Cedar Creek Wind, LLC Comments in Support ofPPA Approval Page 9
Nor do the five CCW wind projects adversely impact RMP's "electrical system
and reliability" in eastern Idaho. PacifiCorp has been very clear that CCW will pay, and
CCW has agreed to pay, for all electrical system impacts related to the projects. Cedar
Creek has also paid for all RMP studies that have, in great detail, determined the extent to
which CCW wil pay RMP for any and all reliability impacts on the electrical system.
Finally, as inappropriate as it is in this case, the arguent that the SAR calculated
avoided cost rate is signficantly above an IR calculated rate is simply a wrong and
misleading comparison. As discussed in the Zentz affidavit12, the PacifiCorp IR model
appears heavily biased against independent wind projects, in that it produces a first year
average rate of $37.05/MWh. Instead, that IR modeled rate should be compared to the
recent Idaho Power IR modeled rate for Rockland Wind Project, or to the $/kWh incured
by PacifiCorp in developing 480 MW of Company owned wind generation in Wyoming
or in acquiring an additional 400 MW of independently owned Wyoming wind. Whle
confdential, Wyoming wind purchase or development costs can be reviewed by the
Commission in the most recent PacifiCorp Idaho ratecase.13 All will show costs/kWh
significantly greater than $37.05/MWh.
SUMMARY
Prior to December 14, 2010 Cedar Creek had fully pedected its right for a less
than 10 aMW SAR avoided cost PPA with PacifiCorp for this Project. Significant
milestone compliance events are sumarzed as follows: (1) By May of2010 CCW and
RMP had reached a mature point in studying and understading the interconnection and
transmission system impacts caused by the Project and CCW had paid PaciCorp in
12 ~ 6.
13 IPUC Case No. PAC-E-1O-07
Cedar Creek Wind, LLC Comments in Support of PPA Approval Page 10
excess of $475,000 for such studies. (2) Qualifying Facility status was perfected with the
FERC for this Project on June 23, 2010. (3) PacifiCorp provided the first draft PPA to
CCW in July, 2010 and multiple drafts were exchanged between the paries over the
course of the next several months. (4) In September CCW presented PacifiCorp with
detailed Project specific notebooks with equipment specifications, wind data, site layout,
electrical diagrams, etc. and which were acknowledged by RMP as being "complete." (5)
On November 29,2010 Cedar Creek and RMP had reached full agreement as to the
"final" rates, terms and conditions of a PP A for this Project, with "nothing fuher" to
negotiate, add or discuss. (6) PacifiCorp prepared the final draft of this PPA for execution
by the paries and Cedar Creek signed and delivered the PP A to PacifiCorp on December
13,2010.
For the reasons stated above and in accordance with previous decisions, Cedar
Creek respectfully asks that the Commission approve the PP A for the Rattlesnake
Canyon Wind Project.
Dated this 26th day of Januar, 2011.
Respectfully submitted,
f?JlLW~
Ronald L. Willams
Wiliams Bradbur, P.C.
1015 W. Hays St.
Boise ID, 83702
Telephone: [phone]
ron~willamsbradbur.com
of Attorneys for Cedar Creek Wind
Cedar Creek Wind, LLC Comments in Support of PP A Approval Page 11
CERTIFICATE OF MALING
I HEREBY CERTIFY that on this 26th day of January, 2011, I caused to be served a
true and correct copy of the foregoing document upon the following individuals in the
manner indicated below:
Ted Weston
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, UT 84111
E-Mail: ted.weston~pacificorp.com
D Hand Delivery
D US Mail (postage prepaid)
D Facsimile Transmission
D Federal Express
IZ Electronic Transmission
Daniel E. So lander
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, UT 84111
E-Mail: daniei.solander~pacificorp.com
D Hand Delivery
D US Mail (postage prepaid)
D Facsimile Transmission
D Federal Express
IZ Electronic Transmission
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
D Hand Delivery
D US Mail (postage prepaid)
D Facsimile Transmission
D Federal Express
IZ Electronic Transmission
ÆAlf/Ak
Ronald L. Wiliams
Cedar Creek Wind, LLC Comments in Support ofPPA Approval Page 12
Docket No. EL11-59-000
Motion to Intervene and Comments of PacifiCorp

EXHIBIT 102

Joint Petition of Idaho Power Co, Avista Corp., and PacifiCorp
(November 10, 2010)
Docket No. EL11-59-000
Motion to Intervene and Comments of PacifiCorp

EXHIBIT 103

Reply Comments of PacifiCorp
(April 12, 2011)
LoVIGER I KAUFMA LL
825 NE Multnomah . Suite 925
Portand, OR 97232-2150 RECE\VED office [phone]
fax [phone]
101\ APR 12 PR 3d)'Keet E. KaKauf~.co
April 8, 2011
Via Electronic Mail and Overnight Mail
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 W Washington Street
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
472 W. Washington
Boise, ID 83702-5918
Re: Case Nos. PAC-E-11-01, PAC-E-11-02, PAC-E-11-03, PAC-E-11-04, PAC-E-11-05
IN THE MATTER OF THE APPLICATION OF PACIFICORP DBA ROCKY
MOUNTAIN POWER FOR A DETERMINATION REGARDING FIRM ENERGY
SALES AGREEMENTs BETWEEN ROCKY MOUNTAIN POWER AND CEDAR
CREEK WIND, LLC
Dear Ms. Jewell:
Enclosed for fiing in the above-captioned docket are an original and seven (7) copies of
REPLY COMMENTS OF ROCKY MOUNTAIN POWER.
An extra copy of this cover letter is enclosed. Please date stamp the extra copy and retu it to
me in the envelope provided.
Than you in advance for your assistance.
~q
Kenneth E. Kaufman
-
cc: PAC-E-ll-01 Service List
Enclosures
Jeffrey S. Lovinger
Kenneth E. Kaufman
Lovinger Kaufmann LLP
825 NE Multnomah, Suite 925
Portland, Oregon 97232
Telephone: [phone]
Fax: [phone]
lovinger($lklaw.com
kaufman($lklaw.com
Attorneys for Rocky Mountain Power
RECEIVED
2011 APR 12 PM 3: 09
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY
MOUNTAIN POWER AND CEDAR CREEK
WID, LLC (RATTLESNAKE CANYON
PROJECT
IN THE IN THE MATTER OF THE
APPLICATION OF PACIFICORP DBA ROCKY
MOUNTAIN POWER FOR A
DETERMINATION REGARDING A FIRM
ENERGY SALES AGREEMENT BETWEEN
ROCKY MOUNTAI POWER AND CEDAR
CREEK WIND, LLC (COYOTE HILL PROJECT
IN THE MATTER OF THE APPLICATION OF
PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY
MOUNTAIN POWER AND CEDAR CREEK
WID, LLC (NORTH POINT PROJECT)
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Case No. PAC-E-11-01
Case No. PAC-E-11-02
Case No. PAC-E-11-03
IN THE MATTER OF THE APPLICATION OF
PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY MOUNTAIN
POWER AND CEDAR CREEK WIND, LLC
(STEEP RIDGE PROJECT)
IN THE MATTER OF THE APPLICATION OF
PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY MOUNTAIN
POWER AND CEDAR CREEK WIND, LLC
(FIVE PINE PROJECT)
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Case No. PAC-E-11-04
Case No. Pac-E-11-05
REPLY COMMENTS OF
PACIFICORP DBA
ROCKY MOUNTAIN
POWER
Comes now PacifiCorp dba Rocky Mountain Power and fies these Reply Comments in
response to Reply Comments of Cedar Creek Wind.! Without recommending that the
Commission approve or disapprove the five Cedar Creek Wind power purchase agreements,
Rocky Mountain Power notes the following facts and law for the Commission's consideration.
Background
Rocky Mountain Power and Cedar Creek Wind completed negotiation of all terms of the
power purchase agreements ("PP As") for Cedar Creek Wind's five, lOaMW wind qualifying
facilities ("QFs") prior to December 14, 2010. Rocky Mountain Power is aware the Public
Utility Regulatory Policies Act of 1978 ("PURP A") does not permit a utility to delay signing a
PP A while it waits for a pending rate change to take effect and Rocky Mountain Power acted
with reasonable speed to execute the PP As given the number of documents and complexity of
1 Rocky Mountain Power's Reply Comments, as well as the Reply Comments of Cedar Creek Wind fied on AprilS,
are out of the prescribed window to comment set fort by the Commission in its February 24, 2011 Order No.
32192. Rocky Mountain Power therefore requests that the Commission either strike both Replies or accept both
Replies.
REPLY COMMENTS OF
ROCKY MOUNTAIN POWER
2
review of the multiple transactions requested by Cedar Creek Wind. It is important to note that
the Company's contract review and execution procedure must comply with Sarbanes Oxley
("SOX") regulatory requirements. Begining when the PPA is in near-final form, various
functions in the Company review the draft PP A and make a preliminar determination of what is
needed for final review and approvaL. From these reviews, the Company determines if there are
any major issues that need to be addressed with the QFs and what follow-up information is
needed for final approvaL. Once the parties agree to a final draft, the final draft then undergoes a
detailed review and sign-off by management, merchant transmission, accounting, financial
reporting (FAS 133, Fin 46, etc.), credit, legal, biling, and delegation of signing authority by the
appropriate Company executive for execution of the agreement. As ths final. review requires the
involvement of several fuctions across the Company and detailed scrutiny of the final PP A
draft, the typical time for this final review and execution phase is 5 to 10 business days. Seldom
does ths review result in any material changes to the draft PP A. Rather, the final review process
confirms that the contract complies with the Company's SOX requirements, documents that all
PP A requirements were met, and moves the PP A to execution. Each executed contract is
documented for validation and signed-off by the varous fuctions and a copy of the PP A and
documentation is retained for compliance auditing puroses.
The Company commenced internal review of a near-final draft of the Coyote Creek PP A
on November 15, 2010, and continued the internal review process in parallel with the paries'
ongoing negotiations of the near-final draf and a related transmission agreement. After those
negotiations finished, Cedar Creek Wind signed and delivered original copies of all five PPA
agreements without exhibits to Rocky Mountain Power's Portland office late on the afternoon of
December 13, 2010. Cedar Creek Wind did not deliver final conformed exhbits for each PPA
REPLY COMMENTS OF
ROCKY MOUNTAIN POWER 3
until December 14, 2010. Once Rocky Mountain Power received the conformed exhibits from
Cedar Creek Wind, the Company verified every page of each PP A (including exhbits),
documented the review, obtained internal approvals, executed the originals, and made copies
before returng a complete set of executed originals to Cedar Creek Wind. Durng the review,
the Company identified discrepancies in several of the PP A exhibits which were corrected and
confirmed by Cedar Creek Wind on December 16, 2010. These discrepancies included;
incorrect project names in Exhibit D for Five Pine, North Point, Rattlesnake Canyon and Steep
Ridge, incorrect QF number for Rattlesnake Canyon, and changes by Cedar Creek Wind to the
Five Pine and Nort Point PPA exhibits that were incorrectly made on the Coyote Hil exhibits.
The Company also pedormed additional legal and technical analysis to confirm that the five
projects did not violate the I-mile rule codified at 18 C.F.R. §292.204, and that the addendum to
the PP As allocating comingled line losses and station service comported with PURP A and
transmission system interconnection requirements. The Company completed final review and
executive approval was received December 22, 2010. The Company executed the five PPAs on
December 22, 2010 and delivered copies of the signatue page to Cedar Creek Wind that same
day with a fully conformed original for each PP A following by maiL.
The Company completed review and execution or all five PP As in 7 business days--well
,/
withn the typical range of time that the Company has completed final reviews with other QF
projects. It is unlikely that Rocky Mountain Power could have completed its review in a timelier
maner and in no event could the Company have been diligent and stil executed the contracts
prior to December 14, having received signed PP As with no conformed exhibits from Cedar
Creek Wind at the end of the business day on December 13,2010.
REPLY COMMENTS OF
ROCKY MOUNTAIN POWER
4
At the time Rocky Mountain Power executed the agreements, there was uncertainty about
the correct avoided cost rate for all small Idaho QFs over ioOkW. On November 5, 2010, Rocky
Mountain Power, Idaho Power Company, and Avista Corporation jointly petitioned the
Commission to immediately reduce the eligibility cap for published avoided cost rates from
lOaMW to 100kW? The Commission, on December 3, 2010, issued Order No. 32131, in which
it declined to immediately reduce the 10aMW eligibility cap, but simultaeously anounced its
intent to review the eligibility cap at a Januar 27, 2011 hearng and to apply the outcome of that
process effective December 14, 2010.3 Order No. 32131 gave Rocky Mountain Power and
Cedar Creek Wind notice that the eligibility status of the Cedar Creek Wind QFs might change,
effective December 14, 2010.4 However the parties did not know, and could not know, the post-
December 14 status of those projects until the Commission's final decision (Order No. 32176),
issued Februar 7, 2011.5 Under those circumstaces, Rocky Mountain Power did what it
believed it was obligated to do-it executed the five agreements (the "December 22 PPAs") with
the terms and conditions the paries agreed to prior to December 14, 2010, and with the
published avoided cost rates in effect on December 22, 2010. Rocky Mountain Power did not
know, on December 22 or at any time thereafter, whether the Commission would approve the
PP As as executed.
2 Joint Petition to Address Avoided Cost Issues and Joint Motion to adjust the Published Avoided Cost Rate
Eligibilty Cap, Case No. GNR-E-I0-04, (Nov. 5, 2010).
3 In the Matter of the Joint Petition of Idaho Power Company, Avista Corporation, and PacifCorp d/b/a Rocky
Mountain Power to Address Avoided Cost Issues and Adjust the Published Avoided Cost Rate Eligibilty Cap, Case
No. GNR-E-I0-04, Order No. 32121 (2010).4 Id.
5 On December 22, 2010, it was not yet clear whether the Commission would decide to reduce the eligibilty cap for
published avoided cost rates effective December 14,2010, and it was therefore not clear on December 22, 2010, that
Cedar Creek Wind's QF development-a large development which had been disaggregated into five QFs under
1OaMW-would not qualifY for published avoided cost rates after December 14,2010.
REPLY COMMNTS OF
ROCKY MOUNTAIN POWER
5
Discussion
Cedar Creek Wind argues, in its Reply Comments (page 4), that it is entitled to approval
of its contracts because the paries "had a meeting of the minds" prior to December 14, 2010.
However, under their terms, the December 22 PP As are not effective until approved by the
Commission. Section 2.1 of each of PP A provides:
This Agreement shall become effective after execution by both Parties and after
approval by the Commission ("Effective Date"); provided, however, this
Agreement shall not become effective until the Commission has determined,
pursuat to a final and non-appealable order, that the prices to be paid for energy
and capacity are just and reasonable, in the public interest, and that the costs
incured by PacifiCorp for purchases of capacity and energy from Seller are
legitimate expenses, all of which the Commission will allow PacifiCorp to
recover in rates in Idaho in the event other jurisdictions deny recovery of their
proportionate share of said expenses.
Per the language above, the December 22 PP As canot become effective until the Commission
finds that: (1) the prices to be paid for energy and capacity are just and reasonable; (2) the
contract is in the public interest; and (3) costs incured by the Company for purchases of capacity
and energy from Seller are legitimate expenses, all of which the Commission wil allow the
Company to recover in rates in Idaho in the event other jursdictions deny recovery of their
proportionate share of said expenses.
On previous occasions where QFs sought grandfathered rate treatment the Commission
has, without exception known to the Company, made the above findings and approved
grandfathered rates where the paries fully executed a PP A prior to the date of a rate change.
The Commission also authorizes grandfathered treatment where the paries did not fully execute
the PP A and the QF fies a meritorious complaint prior to the rate change alleging that the
utility's foot dragging prevented full execution of a PPA before the rate change. These two
recognized fact patterns embody what Rocky Mountain Power has referred to before the
Commission as the "bright line" rule for grandfathered rate treatment anounced by the
REPLY COMMENTS OF
ROCKY MOUNTAIN POWER
6
Commission and affirmed by the Idaho Supreme Cour in the 1990s.6 Under the bright line rule,
Cedar Creek Wind could have assured itself of obtaining the pre-December 14, 2010 published
avoided cost rates if it had either obtained fully executed PP As by December 14 or filed a
meritorious complaint by December 14 alleging that Rocky Mountain Power improperly refused
to execute PP As. Cedar Creek Wind did neither and Cedar Creek Wind therefore is not entitled
to the certin relief of the bright line rule.
Cedar Creek Wind requires an exception to the bright line rue to allow its QFs to qualify
for pre-December 14 published avoided cost rates. There is recent Commssion precedent for
granting grandfathered rate treatment in circumstaces where the seller failed the bright line test.
In 2010, Idaho Power Company requested, and the Commission granted, grandfathered rate
treatment to both the Grand View Solar and the Yellowstone Power Inc. QFs.7 The Commission
noted that there was a meeting of the minds prior to the rate change but also based its grant of
grandfathered rate treatment on other, equitable, reasons. In Grand View Solar, the Commission
found that "but for consideration by the Company of a non-PURPA contract for the project, a
contract would have been signed prior to March 16, 2010.,,8 In Yellowstone, the Commission
found that a "combination of factors, coupled with evidence of an agreement prior to March 16,
2010, make it clear that approval of the Agreement' s grandfathered avoided cost rate is in the
6 A. W.Bown CO., Inc. v. Idaho Power Co., 121 Idaho 812, 816, 828 P.2d 841 (1992); See, also, In the Matter of the
Application of Idaho Power Company for Approval of a Firm Sales Agreement with Yellowstone Power, Inc. for the
Sale and Purchase of Electric Energy, Case No. IPC-E-I0-22, Comments of the Commisson Staff, at 3 (2010).
7 See, In the Matter of the Application of Idaho Power Company for Approval of a Firm Energy Sales Agreement
with Grand View Solar PV 1, LLC for the Sale and Purchase of Electric Energy, Case No. IPC-E-1O-19, Order No.
32068 (2010); In the Matter of the Application of Idaho Power Company for Approval of a Firm Sales Agreement
with Yellowstone Power, Inc.for the Sale and Purchase of Electric Energy, Case No. IPC-E-I0-22, Order No. 32104
(2010).
8 Order No. 32068, at 5.
REPLY COMMENTS OF
ROCKY MOUNTAIN POWER 7
public interest.,,9 These cases may be factually distinguished from Cedar Creek Wind QFs,
based on the "other factors" unique to the Cedar Creek Wind projects. Whereas, Grand View
and Yellowstone are both single QFs with capacity less than 10 aMW, the five Cedar Creek QFs
are, in substance, a single 133 MW project, disaggregated into 10 aMW projects, apparently for
the purose of qualifying for that to which it otherwise is not entitled-the published avoided
cost rate. The policy implications of grandfathering Cedar Creek Wind PP As are not the same as
the implications for grandfathering either Grand View or Yellowstone.
Conclusion
Rocky Mountain Power concurs with Cedar Creek Wind's statement (on page 3 of its
Reply) that the two parties reached agreement on all terms oftheIr December 22 power purchase
agreements prior to December 14, 2010. This fact alone does not, however, compel the
Commission to approve those contracts.
Dated this 8th day of April, 2011.
Respectfully Submitted,:£&Kenneth Kaufmann
Lovinger Kaufmann, LLP
Of Attorneys for Rocky Mountain Power
9 Order No. 32104, at 12.
REPLY COMMNTS OF
ROCKY MOUNTAIN POWER
8
CERTIFICATE OF SERVICE
I herby certify that I have this 8th Day of April, 2011, served the foregoing Reply
Comments of PacifiCorp, d/b/a Rocky Mountain Power, in Case No. PAC-E-ll-
01_02_03_04_05, by electronic and overnight mail, to the following:
Jean Jewell
Commission Secretar
Idaho Public Utilities Commission
472 W. Washington
PO Box 83720
Boise, ID 83720-0074
jean.jeweii~pucrãlidaho.gov
sccretary(Q,puc.idaho. gov
Daniel Solander
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, UT, 84111
E-Mail: daniel.solanderræpacificorp.com
Ted Weston
ID REG Affairs MGR
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, UT, 84111
E-Mail: ted.westonræpacificorp.com
Ronald L. Wiliams
Wiliams Bradbur PC
1015 W. Hays St
Boise, ID 83702
E-Mail: ron~wiliamsbradbur.com
U~
Jeffery S. Lovinger, OSB 960147
Kenneth E. Kaufman OSB 982672
Lovinger Kaufman LLP
Attorneys for Rocky Mountain Power
Ns:-
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-0::
w..o\i
Docket No. EL11-59-000
Motion to Intervene and Comments of PacifiCorp

EXHIBIT 104

Application for Approval (agreements not attached)
(January 10, 2011)

,.ROCKY MOUNTAINPOR
A DMSl OF PACOP
201 So Main, Suite 2300
Salt Lake Cit, Ut 84111
lOll JA.A! 1 f'. ;ir'i lJ 11M 9: 39
Janua 8, 2011
VI OVERNIGHT DELIVERY
Idaho Public Service Commssion
472 W. Washion Street
P.O. Box 83720
Boise, Idaho 83720-0074
p..:.-l l -D (
Attention: Jean D. Jewell
Commssion Secreta
RE: In the Matter of the Applications of Rocky Mountain Power for Approval of Power Purchas
Agreements Between Rocky Mountain Power and Cedar Creek Wind
Please fmd enclosed the original and seven (7) copies each of five separte Applications and
Power Purchase Agreements between Rocky Mounta Power under which Cedar Creek would
sell and Rocky Mounta Power would purchae electrc energy generted from each of the five
Cedar Creek Wind projects ("Projects") locted in Bingham County, Idaho:
Yroject Name
v Rattlesnae Canyon
Coyote Hil
North Point
Steep Ridge
Five Pine
Nameplate Capacity
Megawatt (M
27.6
27.6
27.6
25.2
25.2
Monthly Average MW
Delivery
9.4
9.4
9.8
9.8
9.4
Inquies may be directed to Ted Weston, Idao Reguatory Manager at [phone], or
Danel Solander, Senior Counsel, at [phone].
y~rylL~FY Yours,! / i 11
i W · tM 1/U!
¡ II
Jeffey K. Laren
Vice President, Reguation
Enclosures
iûu JAN t 0 AM 9:41
PA C. -E -((-of
PROJECT
RATTLESNAKE CANYON
Mark C. Moench
Daniel E. Solander
Yvonne R. Hogle
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Uta 84111
Telephone: (80l) 220-4014
Fax: [phone]
Email: mark.moenchimpacificorp.com
daniel.solanderimpacificorp.com
yvonne.hogle(ßpacificorp.com
Attorneys for Rocky Mountain Power
-.,j"
.'. ;.l=
lOJ I JArlj 0 AM 9=41
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF ROCKY
MOUNTAIN POWER FOR
APPROVAL OF A POWER
PURCHASE AGREEMENT
BETWEEN RMP AND CEDAR
CREEK WIND LLC
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CASE NO. PAC-E-11-0r
APPLICATION OF
ROCKY MOUNTAIN POWER
Comes now Rocky Mountain Power ("RMP" or "Company" or "PacifiCorp"), in
accordance with RP 52 and the applicable provisions of the Public Utility Reguatory
Policies Act of 1978 ("PURP A"), hereby respectfully applies to the Idaho Public Utilties
Commission ("IPUC" or "Commission") for an Order accepting or rejecting the published
avoided cost rate Power Purchase Agreement ("PP A") between RMP and Cedar Creek
Wind LLC ("Cedar Creek" or "Seller') under which Cedar Creek would sell an RMP
would purchase electric energy generated from each of the five Cedar Creek Wind
projects ("Projects") located in Bingham County, Idaho:
Project Name Nameplate Capacity
Megawatt (MW)
27.6
27.6
27.6
25.2
25.2
Monthly Average MW
Delivery
Rattlesnake Canyon
Coyote Hil
North Point
Steep Ridge
Five Pine
9.4
9.4
9.8
9.8
9.4
This application is specific to the Rattlesnake Canyon Project ("Facilty"). In support of
this Application RMP represents as follows:
1. Communcations regarding this Application should be addressed to:
Ted Weston
201 South Main, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
Fax: [phone]
Email: ted.weston(ßpacificorp.com
and to:
Danel E. Solander
201 South Main, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
Fax: [phone]
Email: danie1.solander(ßpacificorp.com
In addition, the Company respectfully requests that all data requests regarding ths
matter be addressed to one or more of the following:
Bye-mail (preferred)
By regular mail
dataequest(fpacificorp.com
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
I. BACKGROUND
2. Sections 201 and 210 ofPURPA, and pertinent regulations of the Federal
Energy Regulatory Commission ("FERC"), require that regulated electric utilties
purchase power produced by cogenerators or small power producers that obtain
qualifying facility ("QF") status. The rate a QF receives for the sale of its power is
generally referred to as the "avoided cost" rate and is to reflect the incrementa cost to an
electric utility of electric energy or capacity or both, which, but for the purchase from the
QF, such utility would generate itself or purchase from another source. The Commission
has authority under PURP A Sections 201 and 210 and the implementing regulations of
the FERC, 18 C.F.R. § 292, to set avoided costs, to order electric utilities to enter into
fixed-term obligations for the purchase of energy from QFs, and to implement FERC
rules.
3. Cedar Creek proposes to design, construct, install, own, operate, and
maintain a 27.6 megawatt ("MW") (Facility Capacity Rating) wind generating facilty
named Rattlesnake Canyon, to be located in Bingham County, Idaho. The Facility will be
a QF under the applicable provisions of PURP A. The PPA for this Facility and the other
four Cedar Creek projects; Coyote Hil, North Point, Steep Ridge, and Five Pine, are all
executed by Scott Montgomery, President of Cedar Creek Wind LLC, being the
authorized manager of each aforementioned Project.
4. On November 5, 2010, RMP along with Idaho Power and Avista
Corporation filed a Joint Petition and Motion seeking a reduction in the published
avoided cost rate eligibility cap from 10 aMW to 100 kilowatts ("kW"). Case No. GNR-
E-1O-04. On December 3, 2010, the Commission issued Order No. 32131 setting a
Modified Procedure comment schedule with which to develop a record for its decision
regarding the Joint Petition and Motion's request to lower the published avoided cost rate
eligibility cap. Comments were provided December 22,2010, Reply Comments are due
Januar 19,2011, and Oral Arguments are scheduled for Januar 27,2011. As par of the
Order, the Commission ordered that its decision regarding whether to reduce the
published avoided cost eligibility cap become effective on December 14,2010.
5. RMP has an obligation under federal law, FERC regulations, and ths
Commission's Orders to enter into power purchase agreements with PURPA QFs. As
stated in the Joint Petition fiing, RMP has received multiple requests from PURPA wind
QF developers for published avoided cost rate PPAs. The Company continues to process
these requests as par of its normal course of business with the appropriate level of due
diligence to ensure these potential resources comply with all PURP A regulations and
Commission Orders and are submitted to this Commission for review and decision, as is
its legal obligation. However, the request in this Application, the other four Applications
for Cedar Creek Wind projects, as well as several other QF PP A Applications that will be
filed over the course of the next several months, is made with the specific reservation of
rights and incorporation of the averments set forth in the Joint Petition regarding the
possible negative effects to the both the utility and its customers of additional and
unfettered PURP A QF generation on system reliabilty, utility operations, and costs of
incorporating and integrating such a large penetration level of PURP A wind QF
generation into the utility's system.
6. RMP is concerned with the increase in power supply costs, and the
resulting increase in rates to its customers, that the current published SAR-methodology
avoided cost prices causes as compared to applying the IRP-methodology or the results
from a competitive request for proposal solicitation. A non-standard QF project using the
Commission Ordered IRP-methodology addresses the specific operating characteristics of
the QF as part of the Company's resource portfolio, resulting in avoided cost prices tied
to that specific resource and generally, at a lower cost than the SAR-derived avoided cost
prices. The magnitude of standard wind QF project development in Idaho has reached
monumental levels and at the curent published avoided cost levels will have a significant
impact on the net power cost portion of its Idaho and other jurisdiction customer's rates.
The Rattlesnake Canyon QF Contract and the other four Cedar Creek Idaho wind QF
contracts being submitted to the Commission total 133 MW, representing 30 percent of
the 445 MW QFs that are curently requesting published avoided cost rate wind contracts.
These proposed projects are not small family or community-based developers doing a
single project, but rather large-scale, sophisticated developers with legal and technical
assets who have disaggregated large projects into multiple projects in order to meet the
10 aMW threshold and qualify of published avoided cost contracts. Cedar Creek Wind
originally submitted a bid into the Company's 2009R renewable Request for Proposal
(RFP) as a single 151 MW project but did not make the RFP short-list of bids. In March
2010, Cedar Creek requested QF pricing for two 78 MW projects. The projects were
priced using the IRP-methodology for large Idaho non-stadard QFs. RMP prepared and
delivered avoided cost prices which Cedar Creek rejected as not meeting their price
theshold and therefore too low. In May 2010, Cedar Creek resubmitted five individual
QF projects totaing 133 MW for Idaho avoided cost pricing. The five projects, which
share a common interconnection under the original single large project's interconnection
agreement and have a single owner, complied with all PURP A's regulation including the
I-mile separation requirement, and met all Idaho rules and Commission Orders. Five
published avoided cost contracts were prepared and executed. The Company points out
that at the avoided cost price difference between the SAR-methodology compared to the
IRP-methodology results in the Company paying an additional $10 milion per year for
the power from the five projects. Expanding these standard avoided cost prices to the
other 312 MW of standard QF contract requests versus using the IRP-methodology would
results in an additional cost of $23 milion per year. In this instance,. the published
avoided cost prices are significantly higher than the avoided cost prices produced using
the IRP-methodology. Furher, standard purchases result in an inherent overpayment to
the extent that the project does not offer the same delivery attibutes as the proxy
resource on which the avoided costs are calculated. As standard pricing becomes
available to larger projects, for longer contract terms, the magnitude of this overpayment
increases. Because a contract under the published QF rate has minimal flexibilty to
adjust pricing or the terms and conditions in the contract based on the project's
characteristics, wind resources have found the QF path more conducive to gaining a long
term power purchase agreement without the project specific adjustments they would
encounter through the IRP-methodology or a competitive request for proposal
solicitation. This divergence between applying the project specific characteristics through
the IRP-tnethodology and the stadard default pricing natue of the QF process wil lead
to Idaho customers on the Company's system of caring the burden of a higher-cost (i.e.,
above avoided cost) QF resource than they would otherwse pay for.
7. The Revised Protocol agreement addresses treatment of New QF
Contracts under State Resources in Section C. as follows: "Costs associated with any
New QF Contract, which exceeds the costs PacifiCorp would have otherwse incured
acquiring Comparable Resources, wil be assigned on a situs basis to the State approving
such contract." Therefore if the Commission approves this purchase power agreement the
Company respectfully requests that the $10 milion anua incremental expense
associated with these five contracts be situs assigned to the state of Idaho. This would be
in addition to Idaho's allocation of the cost produced by IRP-methodology valuation
representative of the avoided cost RMP would have otherwise incured acquiring these
resources.
8. Rocky Mountain Power is concerned with the impact on its electrical
system and reliability in adding the Cedar Creek Wind projects and other large volumes
of QF wind. Historically the generation threshold for published avoided cost rates had
been low, and the costs associated with capacity contribution and integration for an
intermittent resource have been deemed to have minimal impact on the Company's
electric system. With curent thresholds in Idaho increased to 10aMW which equates to a
wind QF project in the nameplate capacity range of 20 to 30MW, the cost to the
Company and thus to the customer for integration, capacity contribution, and
transmission capacity are of greater significance and need to be revisited in the
determination of avoided costs for intermittent resources. In those cases where a resource
is added in Idaho and there is insufficient load to absorb or use the generation, the added
QF power output must be moved elsewhere to be useful to the system and serve the
Company's network load. This is primarily expected to be the case in the off-peak time
period when customer loads are normally lower and canot absorb the wind generation,
but also may occur with the addition of significant numbers of 10 aMW QF projects or a
small number of large QF projects. While the Company recognzes that locational
transmission constraints and the need for transmission upgrades should not prevent
project development, any incremental cost reflecting the constraint or upgrade should be
borne by the developer and not the ratepayer. Analysis of transmission system constraints
and the cost of options for dealing with those constraints should be incorporated into the
QF pricing and contract process so that appropriate adjustments can be made.
9. Even though RMP is legally obligated to continue to negotiate, execute,
and submit PURP A QF contracts for Commission review, it also feels obligated to
reiterate that the continuing and unchecked requirement for the Company to acquire
additional intermittent and other QF generation regardless of its need for additional
energy or capacity on its system not only circumvents the Integrated Resource Planing
process and creates system reliability and operational issues, but it also increases the
price its customers must pay for their energy needs.
II. THE POWER PURCHASE AGREEMENT
10. On December 22, 2010, RMP and Cedar Creek entered into a PPA
pursuant to the terms and conditions of the various Commission Orders applicable to this
PURPA agreement for a wind resource. See Order Nos. 29632, 30423, 31021, and 31025.
A copy of the PP A is attched to this Application as Attchment NO.1. Under the terms
of this PP A, Cedar Creek elected to contract with RMP for a 20-year term using the non-
levelized published avoided cost rates as curently established by the Commission for
energy deliveries of less than 10 average megawatts ("aMW"). This PP A was executed
by Cedar Creek on December 13, 2010. It was subsequently executed by RMP on
December 22,2010, and now fied for the Commission's review on Januar 7, 2011.
11. The nameplate rating of this Facility is 27.6 MW. Cedar Creek has attested
and documented through its generation profile that the Facility will not exceed 10 aMW
on a monthly basis. Furhermore, as described in Section 5.3 of the PPA, should the
Facilty exceed 10 aMW on a monthly basis, RMP will accept the energy that does not
exceed the Maximum Facilty Delivery Rate (Inadvertent Energy), but will not purchase
or pay for this Inadvertent Energy.
12. This PURPA wind agreement includes the Mechanical Availability
Guaantee ("MAG"), Wind Integration Cost adjustment, and Wind Forecasting cost
sharing as required in Commission Order No. 30497. In addition, Cedar Creek and RMP
have agreed to Delay Liquidated Damages and associated Delay Security provisions of
$1,429,585 for the Rattlesnake Canyon project with retur of the security as specific PPA
milestones are met.
13. Cedar Creek has elected October 1, 2012, as the Scheduled Commercial
Operation Date for this Facility. The PPA establishes numerous requirements in Section 2
that Cedar Creek must meet prior to RMP accepting energy deliveries from this Facility.
Cedar Creek must deliver a monthly report on progress staring in October 2011 and
RMP will monitor compliance with these initial requirements. In addition, RMP wil
monitor the ongoing contractual requirements through the full term of this PP A.
14. The PP A, as signed and submitted by the paries thereto, contains non-
levelized published avoided cost rates in conformity with applicable IPUC Orders. In
addition, Cedar Creek shall reimburse RM for the cost of securing the network resource
and transmission service request.
15. Cedar Creek's projects share a common collector substation for the five
wind QF projects including Rattlesnake Canyon, which then delivers aggregated energy
via a Cedar Creek owned 345-kV transmission line to the Point of Delivery at the Goshen
Substation. This Facility and the other four Cedar Creek project's net output generation
is individually metered at the collector substation and each PP A contains an Addendum L
which distributes the line losses between the collector substation and the Point of
Delivery to each project based on their percentage of the monthly net output to the
aggregated delivery at the Point of Delivery.
16. The PP A provides that all applicable interconnection costs and monthly
operational or maintenance charges as defined in the Generator Interconnection
Agreement ("GIA") will be assessed to Seller. PURPA QF generation must be designated
as a network resource ("NR") on RMP's system, which requires the Company's merchant
fuction to submit a Transmission Service Request ("TSR") on behalf of the Facility to
PacifiCorp Transmission. Submission of such request will occur by January 30, 2011.
Upon resolution of any and all required upgrades, if necessar, to acquire network
transmission capacity for this Facility's delivery of energy and upon execution of the
PPA and the GIA, this Facility may then be designated as a network resource.
17. Seller has selected October 1, 2012, as the Scheduled Commercial
Operation Date. Cedar Creek has been advised that it is Cedar Creek's responsibilty to
work with PacifiCorp Transmission to ensure that suffcient time and resources will be
available to constrct the interconnection facilities, and transmission upgrades if required,
in time to allow the Facilty to achieve the Scheduled Commercial Operation Date. Cedar
Creek has been fuher advised that delays in the interconnection or transmission process
are not Force Majuere events in achieving the Scheduled Commercial Operation Date and
if Seller fails to achieve the Scheduled Commercial Operation Date at the times specified
in the PP A, delay damages will be assessed.. Cedar Creek has advised RMP that is has
been advised of and accepted the responsibility and risk associated with meeting the
Schedule Commercial Operation Date requirements relating to interconnection and
possible transmission upgrades.
18. Cedar Creek has also been made aware of and accepted the provisions of
the PPA regarding curailment or disconnection of its Facility should certain operating
conditions develop on the Company's system. Section 6 of the PP A defines the conditions
for curtailment and obligations of Cedar Creek in the event of curailment.
19. Section 2.1 of the PPA provides that the PPA will not become effective
until the Commission has approved all of the PP A's terms and conditions and issued a
final and non-appealable order that declares that all payments RMP makes to Cedar
Creek for purchases of energy wil be allowed as prudent and legitimate expenses for
ratemaking puroses and that Idaho will allow PacifiCorp to recover through its rates in
Idaho any shortfall in recovery of power purchase costs under the PP A if any other public
utility commission with jurisdiction over PacifiCorp disallows recovery of any par of
that state's proportionate share of said expenses.
III. MODIFIED PROCEDURE
20. RMP believes that a hearng is not necessar to consider the issues
presented herein and respectfully requests that this Application be processed under
Modified Procedure, i.e., by wrtten submissions rather than by hearing. Reference
Commission Rules of Procedure, rDAPA 31.01.01.201-204. If, however, the Commission
determines that a techncal hearing is required, the Company stads ready to prepare and
present its testimony in such hearing.
WHEREFORE, Rocky Mountain Power respectfully requests that the
Commission issue an Order accepting or rejecting the published avoided cost rate Power
Purchase Agreement ("PPA") between RMP and Cedar Creek Wind LLC ("Cedar Creek"
or "Seller') under which Cedar Creek would sell and RMP would purchase electric energy
generated from the Rattlesnake Canyon facility.
Dated this 7th day of Janua, 2011
Respectfuly submitted,
'"
By l//~ ,kí.~../1tr7
Daniel E. Solander r /
Attorney for Rocky Mountain Power