20091008final_order_no_30921.pdf

Office ofthe Secretary
Service Date
October 8, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION FILED
BY A VISTA CORPORATION FOR AN
ORDER DETERMINING THE OWNERSHIP
OF THE ENVIRONMENTAL ATTRIBUTES
(RECS) ASSOCIATED WITH A (PURP A)
QUALIFYING FACILITY UPON PURCHASEBY A UTILITY OF THE ENERGY
PRODUCED BY A QUALIFYING FACILITY
CASE NO. A VU-09-
ORDER NO. 30921
BACKGROUND
On May 6, 2009, Avista Corporation (Avista) filed a Petition with the Idaho Public
Utilities Commission (Commission; IPUC) for a 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 (PURPA) to a utility within the State of Idaho. 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).
On May 26 2009, Exergy Development Group ofIdaho LLC (Exergy) filed a Motion
to Dismiss A vista s Petition for Declaratory Order. Exergy contends that the Commission lacks
subject matter jurisdiction to decide the proper ownership of renewable energy credits or RECs.
Exergy contends further that Avista s Petition is an impermissible collateral attack on the
Commission s final Order No. 29480 in Idaho Power Company Case No. IPC-04-02 (wherein
the Commission denied Idaho Power s Petition for a Declaratory Order determining ownership
of RECs).
On May 26, 2009, Sagebrush Energy LLC (Sagebrush) filed a Motion for Order
denying Avista s Petition for Stay. Sagebrush contends that Avista s request for stay (i., a
request for preliminary relief prior to a full hearing on the merits) should be evaluated under the
law of preliminary injunctions (IRCP 65e). To be entitled to a preliminary injunction, Sagebrush
ORDER NO. 30921
contends, Avista must prove two things: (1) that Avista is entitled to the relief demanded and
there is a substantial likelihood that the Company is likely to prevail; and (2) that A vista will
suffer irreparable injury in the absence of an injunction. Sagebrush contends that A vista fails on
both counts.
On June 17 2009, oral arguments were held in Case No. A VU-09-04 on the issues
raised by Exergy in its Motion to Dismiss and Sagebrush in its Motion for Order Denying
Petition for Stay.
WITHDRAWAL OF PETITION
On July 28, 2009, Avista filed a Notice of Withdrawal of Petition pursuant to
Commission Rule of Procedure 68. The Commission not ordering otherwise, the Notice was
effective 14 days after filing (August 11 2009).
PETITION FOR INTERVENOR FUNDING - SAGEBRUSH
On August 3 , 2009, Sagebrush Energy LLC filed a Petition for Intervenor Funding
requesting $6 799.35 (comprised of $5 665 attorney fees (25.75 hours at $220 per hour),
053.15 for Sagebrush travel expense and $81. 72 for office expense). Sagebrush contends that
costs incurred by it constitute a significant financial hardship because the company is a small
renewable energy development firm. The filing of Avista s Petition created specific delays and
complications with PURP A contract negotiations and appears to have closed out opportunities
for Sagebrush to purchase deeply discounted turbines and added unanticipated unbudgeted costs
to Sagebrush operations. These hardships have affected investors' willingness to finance the
deal between A vista and Sagebrush. The only costs Sagebrush seeks to recover are direct
expenses associated with Sagebrush travel and direct legal fees associated with A vista s Petition.
Sagebrush contends that an otherwise meritorious request for intervenor funding
should not fail because the utility withdrew its Petition before a written Order could be issued.
For precedent of an award of intervenor funding to a PURP A QF the Commission s attention is
cited to Order No. 29147, Case No. GNR-02-
PETITION FOR INTERVENOR FUNDING - EXERGY
On August 3 , 2009, Exergy filed a Motion to Condition Withdrawal on
reimbursement of parties' expenses or in the alternative a Petition for Intervenor Funding. The
amount requested by Exergy is $12 456 (consisting of $12 255 in attorney fees ($200 per hour)
ORDER NO. 30921
and $201.60 in office expense). Exergy contends that it is apparent from the filings in the case
that A vista was launching an attack on the avoided cost rates through the ruse of seeking a
declaratory order regarding ownership of RECs generated by PURP A projects. Such abuse of
the Commission s offices and waste of time and effort on behalf of the intervenors, Exergy
contends, should not be condoned by this Commission. Costs Exergy expended, it states, were
in good faith reliance on the Company s initial pleading in this docket.
COMMISSION FINDINGS
On July 28, 2009, Avista filed a Rule 68 Notice of Withdrawal of Petition in Case
No. A VU-09-04. The Company s Petition was a request for a Commission determination
regarding ownership of Renewable Energy Credits. Without Commission action the Notice was
effective August 11 2009.
Two Petitions for Intervenor Funding have been filed: (1) Sagebrush -- $6 799.35 and
(2) Exergy -- $12 456.
Intervenor funding is available pursuant to Idaho Code 9 61-617 A and Commission
Rules of Procedure 161-165. Section 61-617 A( 1) declares that it is "the policy of (Idaho) to
encourage participation at all stages of all proceedings before this commission so that all affected
customers receive full and fair representation in those proceedings.The statutory cap for
intervenor funding that can be awarded in anyone case is $40 000. Idaho Code 9 61-617A(2).
Accordingly, the Commission may order any regulated utility with intrastate annual revenues
exceeding $3.5 million to pay all or a portion of the costs of one or more parties for legal fees
witness fees and reproduction costs not to exceed a total for all intervening parties combined of
$40 000.
Rule 162 of the Commission s Rules of Procedure provides the form and content
requirements for a Petition for Intervenor Funding. The petition must contain: (1) an itemized
list of expenses broken down into categories; (2) a statement of the intervenor s proposed finding
or recommendation; (3) a statement showing that the costs the intervenor wishes to recover are
reasonable; (4) a statement explaining why the costs constitute a significant financial hardship
for the intervenor; (5) a statement showing how the intervenor s proposed finding or
recommendation differed materially from the testimony and exhibits of the Commission Staff;
(6) a statement showing how the intervenor s recommendation or position addressed issues of
concern to the general body of utility users or customers; and (7) a statement showing the class
ORDER NO. 30921
of customer on whose behalf the intervenor appeared. The Petitions for Intervenor Funding in
this case were timely filed and comport with the procedural and technical requirements of the
Commission s rules.
Idaho Code ~ 61-617 A includes a statement of policy to encourage participation by
intervenors at all stages of all proceedings before the Commission. The Commission determines
an award for intervenor funding based on the following considerations:
(a)finding that the participation of the intervenor has materially
contributed to the decision rendered by the Commission; and
(b)A finding that the costs of intervention are reasonable in amount and
would be a significant financial hardship for the intervenor; and
(c)The recommendation made by the intervenor differed materially from
the testimony and exhibits of the Commission Staff; and
(d)The testimony and participation of the intervenor addressed issues of
concern to the general body of users or consumers.
Idaho Code ~ 61-617 A.
In considering the reasonableness of the Petitions for Intervenor Funding filed by
Exergy and Sagebrush, the Commission pursuant to Idaho Code ~ 61-617A is required to
consider whether the payment of the amount requested by intervenors would constitute a
significant financial hardship." Addressing the issue of hardship, the Petitioners for Intervenor
Funding make the following statements:
Exergy
Exergy is solely owned by Mr. James Carkulis who funds developmentoperations from a variety of sources, none of which anticipated or
budgeted for litigating a complex issue. . . .
Sagebrush
The costs described. . . constitute a significant financial hardship for
Sagebrush because the company is a small renewable energy development
firm that carefully allocates limited investor funds to specific tasks.
Most awards to intervenors by this Commission have historically been to non-profit
organizations, rarely to for-profit corporations. In this case, the positions advanced by the
intervenors were clearly to serve their economic interests and those of other QFs. While the
ORDER NO. 30921
Commission appreciates the participation of both Exergy and Sagebrush in this case , we do not
find that an award of funding is required to encourage their participation. The end result
withdrawal of the Petition by A vista, we find was in line with the relief requested by intervenors
- Motion to Dismiss and Motion to Deny Stay.
While the Commission has a certain amount of discretion in making awards of
intervenor funding, we find a critical element for any award to be that of financial hardship.
Both petitioners are PURP A QFs. Both are for-profit corporate entities. Pursuant to FERC rules
this Commission is constrained from inquiring into the finances of QFs.18 C.R. ~
292.602( c )(ii).We find the respective offers of proof regarding hardship by Exergy and
Sagebrush in this case to be insufficient. This Commission, however, will not inquire further;
nor will we entertain any additional voluntary offer of proof. Given the nature of the
proceedings in this case and on the facts presented, we find that the Petitioners are not qualified
recipients of intervenor funding. Accordingly, we find it reasonable to deny the Petitions for
Intervenor Funding.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over A vista Corporation dba
Avista Utilities, an electric utility, pursuant to the authority and power granted 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.
ORDER
In consideration of the foregoing and for reasons set forth above IT IS HEREBY
ORDERED and the Commission hereby denies the Petitions for Intervenor Funding filed by
Exergy Development Group of Idaho LLC and Sagebrush Energy LLC in Case No. A VU-09-
04.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 30921
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of October 2009.
ff ~-L
D. KEMPTON, P IDENT
iJ~
MARSHA H. SMITH, COMMISSIONER
ATTEST:
ISSIONER
~ft~;;t~
Commission Secretary
bls/N:A VU-09-04 sw3
ORDER NO. 30921