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HomeMy WebLinkAbout20090602notice_of_petition.pdfOffice of the Secretary Service Date BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION June 2, 2009 IN THE MATTER OF THE APPLICATION OF A PETITION FILED BY A VISTA CORPORATION FOR AN ORDER DETERMINING THE OWNERSHIP OF THE ENVIRONMENTAL ATTRIBUTES (RECS) ASSOCIATED WITH (PURPA) QUALIFYING FACILITY UPON PURCHASEBY A UTILITY OF THE ENERGY PRODUCED BY A QUALIFYING FACILITY CASE NO. A VU-O9- NOTICE OF PETITION FOR A DECLARATORY ORDER (RE: OWNERSHIP OF RENEWABLE ENERGY CREDITS (RECS)) NOTICE OF PETITION FOR STAY (OF ANY REQUIREMENT TO AWARD RECS TO QF REQUESTING PURPA CONTRACT) NOTICE OF INTERVENTION DEADLINE YOU ARE HEREBY NOTIFIED that on May 6 2009, Avista Corporation (Avista) filed a Petition with the Idaho Public Utilities Commission (Commission; IPUC) for declaratory order determining the ownership of the marketable environmental attributes (renewable energy credits or RECs) associated with wholesale sales of energy by a qualifying facility (QF) under the Public Utility Regulatory Policies Act of 1978 (PURP A) to a utility within the State ofIdaho. IDAPA 31.01.01.101 (Petition for Declaratory Order). A vista also petitions the Commission for a stay of "any requirement to award RECs to any PURP A developer" that has tendered or may tender a PURP A project to A vista pending issuance by the Commission of the requested declaratory order. IDAPA 31.01.01.053.01 (Stay of Existing Orders or Rules). A vista in its Petition and in the testimony of Clint Kalich, Manager of Resource Planning and Power Supply Analyses in Avista s Energy Resources Department, sets forth its argument for a Commission Order declaring that the ownership of environmental attributes associated with PURP A projects are to be assigned to the utilities that purchased the energy from such projects. A vista does not believe that an evidentiary hearing is necessary to consider the issues presented in its Petition and requests that the matter be processed under Modified NOTICE OF PETITION FOR A DECLARATORY ORDER NOTICE OF PETITION FOR STAY NOTICE OF INTERVENTION DEADLINE Procedure, i.e., by written submission rather than by hearing. Reference Commission Rules of Procedure, IDAP A 31.01.01.201-204. BACKGROUND In support of its Petition, A vista recites that in a petition for declaratory order seeking an interpretation of Section 210 of PURPA, the Federal Energy Regulatory Commission (FERC) determined that the ownership of environmental attributes (sometimes referred to as RECs) is not controlled by PURPA. American Ref-Fuel Co., et al.105 FERC ~ 61 004 p. 23 (2003), Order on Reh' g, 107 FERC 61 016, p. 12 (2004). FERC further held that States, in creating RECs, have the power to determine who owns the REC in the initial instance and how they may be sold or traded.Id. Accordingly, A vista states, the Idaho Public Utilities Commission has the authority to determine the ownership of environmental attributes associated with a wholesale sale of energy by a QF to a utility under PURP In 2004, A vista recites that Idaho Power Company filed a petition for declaratory order from the IPUC "determining ownership of the marketable environmental attributes associated with a PURP A Qualifying Facility when the ( utility) enters into a long-term, fixed rate contract for the purchase of the energy produced by that QF." Case No. IPC-04-, Order No. 29480. Idaho Power recommended that the Commission determine that the qualifying developers of new renewable resources receive full ownership rights in any green tags issued to them conditioned upon the requirement that the QF developers who qualify for green tags and from whom Idaho Power purchases energy grant the utility a "right of first refusal" to purchase those tags. As reflected in the Commission s Order No. 29480: All commenters recommend for different reasons that the ultimate relief requested by Idaho Power, i., that the Company be provided a "right of first refusal" to purchase the environmental attributes or green tags associated with required QF purchases, be denied. PacifiCorp and Avista maintain that the environmental attributes or green tags associated with renewable resources are the property of the purchasing utility. The Bonneville Environmental Foundation, Northwest Energy Coalition and Advocates for the West recommend that the Commission confirm that QF developers own the environmental attributes associated with their projects, free from rights of first refusal. Exergy Corporation, Bob Lewandowski and Mark Schroeder and NOTICE OF PETITION FOR A DECLARATORY ORDER NOTICE OF PETITION FOR STAY NOTICE OF INTERVENTION DEADLINE Commission Staff contend that the Commission has no jurisdiction authority stemming from either PURP A, FERC implementing regulations or Idaho state law to grant the requested relief. The Commission made the following findings: We find that the issue presented by Idaho Power in its Petition does not present an actual or justiciable controversy in Idaho and is not ripe for a declaratory judgment by this Commission. Declaratory rulings are appropriate regarding the applicability of any statutory provision or of any rule or order of this Commission. See IDAPA 31.01.01.101; Uniform Declaratory Judgment Act Idaho Code ~ 10-1201 et seq. A declaratory ruling contemplates the resolution of prospective problems. The rights sought to be protected by a declaratory judgment may invoke either remedial or preventive relief; it may relate to a right that is only yet in dispute or a status undisturbed but threatened or endangered; but in either event it must involve actual and existing facts. Idaho Code Supreme Court in Harris v. Cassia County, 106 Idaho 513, 516-517, 618 P.2d 988 (1984). We find that none of the predicates are present in this case. In making this finding, the Commission notes that FERC on April 15, 2004 (Docket EL03-133-001 , 107 FERC ~ 61 016) denied rehearing of its earlier October 1 2003 Order (105 FERC ~ 61 004). We note also that the State of Idaho has not created a green tag program, has not established a trading market for green tags, nor does it require a renewable resource portfolio standard. While this Commission will not permit the Company in its contracting practice to condition QF contracts on inclusion of such a right-of- first refusal term, neither do we preclude the parties from voluntarily negotiating the sale and purchase of such a green tag should it be perceived to have value. The price of same we find, however, is not a PURP A cost and is not recoverable as such by the Company. Recovery of those expenses will be reviewed as are all other non-PURP A costs. The Commission in Order No. 29480 denied Idaho Power s Petition for a Declaratory Order and any all other relief requested by the commenting parties as may be related to the "environmental attributes" associated with QF renewable energy. Avista contends that since the Commission s Order in Case No. IPC-04- circumstances have substantially changed. Specifically: 1. PURP A rates have increased substantially. The current avoided cost rates in the State of Idaho that A vista is required to pay for energy generated by PURP A wind projects is $84.30/MWh (i. the 2010 levelized rate is $90.64/MWh which is reduced by 7% for wind integration). NOTICE OF PETITION FOR A DECLARATORY ORDER NOTICE OF PETITION FOR STAY NOTICE OF INTERVENTION DEADLINE 2. Interest in PURP A contracts has increased. A vista is currently negotiating new PURP A contracts for five proposed projects. 3. States have adopted renewable portfolio standards. The State of Washington has adopted renewable portfolio standards (RPS) that require utilities, including A vista, to meet certain targets by 2012 2016, and 2020. See RCW 19.285.010 et seq. Utilities can meet such targets by acquiring equivalent renewable energy credits. RCW 19.285.040. 4. A robust market for RECs has emerged. Avista is currently marketing RECs from its Spokane River projects, its Kettle Falls biomass project, and its contracted interest in the Stateline Wind Farm to other states that already have requirements. Kalich, p. 15. 5. The value ofRECs has increased dramatically. Recent market activity indicates that $15/MWh is a reasonable forward price for RECs. Kalich, p. 5. A vista contends that the rates A vista customers are required to pay for energy from wind QF resources are substantially higher than the avoided costs associated with a similar project that is developed, owned and operated by Avista or the contract price that Avista would expect to pay for renewable energy acquired through a competitive process. The Northwest Power and Conservation Council estimates for wind generation project development construction and operation result in an avoided cost of $64/MWh when levelized over 20 years. Transferring the environmental attributes associated with a QF to the utility purchasing the energy produced by that QF, Avista states, would reduce this disparity. Commission action is now necessary, Avista contends, to ensure that "the rates for (purchases of electric energy) from QFs (are) just and reasonable to the ratepayers of the utility, in the public interest, and (do) not discriminate against cogenerators or small power producers (and do) not exceed the incremental cost to the electric utility of alternative electric energy. . . .Reference 18 C.R. ~ 292.1 01 (b)(6) Definition - Avoided Costs and 292.304(a)(1)(i)(ii) Rates for Purchases. NOTICE OF PETITION FOR A DECLARATORY ORDER NOTICE OF PETITION FOR STAY NOTICE OF INTERVENTION DEADLINE YOU ARE FURTHER NOTIFIED that persons desiring to intervene in Case No. A VU-09-04 for the purpose of becoming a party, i., to present evidence, to acquire rights of cross-examination, to participate in settlement or negotiation conferences, and to make and argue motions must file a Petition to Intervene with the Commission pursuant to Rules 72 and 73 of the Commission s Rules of Procedure, IDAP A 31.01.01.072 and .073. Persons desiring to acquire intervenor rights of participation must file a Petition to Intervene on or before Friday, June 12, 2009. Persons seeking intervenor status shall also provide the Commission Secretary with their electronic mail address to facilitate future communications in this matter. YOU ARE FURTHER NOTIFIED that persons desiring to present their VIews without parties' rights of participation and cross-examination are not required to intervene and may present their comments without prior notification to the Commission or the parties. YOU ARE FURTHER NOTIFIED that the Commission Secretary shall issue a Notice of Parties after the deadline for intervention has passed. The Notice of Parties shall assign exhibit numbers to each party in this proceeding. YOU ARE FURTHER NOTIFIED that discovery is available in Case No. A VU- 09-04 pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.221-234. YOU ARE FURTHER NOTIFIED that the Company s Petitions and the supporting testimony of Clint Kalich, Manager of Resource Planning and Power Supply Analyses in Avista s Energy Resources Department, can be reviewed at the Commission s office in Boise Idaho and at the Idaho offices of A vista Utilities during regular business hours. The Petition is also available for public inspection on the Commission s web site at www.puc.idaho.gov under File Room" and then "Electric Cases. YOU ARE FURTHER NOTIFIED that the following persons are designated as A vista s representatives in this matter: David J. Meyer, Esq. Michael G. Andrea, Esq. A vista Corporation 1411 E. Mission Ave. - MSC 13/MSC 23 Spokane, W A 99202 E-mail: david.meyer~avistacorp.com mi chael. andrea~avistacorp. com Steve Silkworth Manager - Power Supply A vista Corporation 1411 E. Mission Ave. - MSC 7 Spokane, W A 99202 E-mail: steve.silkworth~avistacorp.com NOTICE OF PETITION FOR A DECLARATORY ORDER NOTICE OF PETITION FOR STAY NOTICE OF INTERVENTION DEADLINE YOU ARE FURTHER NOTIFIED that the Commission has jurisdiction over Avista Corporation, an electric utility, pursuant to the authority and power granted it under Title 61 of the Idaho Code and the Public Utility Regulatory Policies Act of 1978 (PURP A). The Commission has authority under PURP A and the implementing regulations of the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric utilities to enter into fixed-term obligations for the purchase of energy from qualified facilities and to implement FERC rules. YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted according to the Commission s Rules of Procedure, IDAP A 31.01.01.000 et seq. DATED at Boise, Idaho this 8--rvL-day of June 2009. ;&~ fJ-;rf~-tJ-f Barbara Barrows Assistant Commission Secretary blsfN:A VU-09-04 sw NOTICE OF PETITION FOR A DECLARATORY ORDER NOTICE OF PETITION FOR STAY NOTICE OF INTERVENTION DEADLINE