20101213Complaint.pdf

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ATTORNEYS AT LAW
Tel: [phone] Fax: [phone]
P.O. Box 7118 Boise, ID 83707 - 515 N. 27th St. Boise, ID 83702
December 10,2010
Avo .-.-(0-05
Ms. Jean Jewell
Commission Secreta
Idaho Public Utilties Commission
472 W. Washington
Boise, ID 83702
RE: Mariah Wind, LLC v. Avista Corporation dba Avista Utilties, Inc.,
Dear Ms. Jewell:
We are enclosing for filing an original and three (7) copies of the above-referenced Formal Complaint.
An additional copy is enclosed for you to stamp for our records.
~since~
. e Adams
Rlc ardson & O'Lear PLLC
encL.
Peter J. Richardson (ISB # 3195)
Gregory M. Adams (ISB # 7454)
Richardson & O'Lear, PLLC
515 N. 27th Street
P.O. Box 7218
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter(frichardsonandoleary.com
greg(frichardsonandoleary.com
RECEIVE
2UlOlJEC i 0 PM q: itS
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UriUT!ES
Attorneys for Complaiant
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
Mariah Wind, LLC,
Complainant,
)) Case No. -ÀU-E-(O-õ
)
) FORMAL COMPLAINT
)
)
)
)
vs.
Avista Corporation dba Avista Utilties, Inc.,
Defendant.
1 INTRODUCTION
2 This is a formal complaint fied by Mariah Wind, LLC ("Mariah Wind") with the Idaho
3 Public Utilties Commssion (the "Commssion") pursuant to Idaho Administrative Rules
4 31.01.01.054. Mariah Wind, LLC requested that Avista Corporation, dba Avista Utilities, Inc.,
5 ("Avista") execute a stadard Public Utilty Regulatory Policies Act of 1978 ("PURPA") power
6 purchase agreement ("PPA") for qualifying facilties ("QFs") under 1 0 average monthy mega-
7 watts ("aMW") for Mariah Wind, LLC's 10 MW renewable energy project. Avista rejected
8 Mariah Wind, LLC's attempt to obligate itself to a PPA containing the Commission-approved
9 terms of a stadard PUR A PP A at the published avoided cost rates. A vista has unjustifiably
10 refused to negotiate reasonable terms regarding environmental attbutes, delay default liquidated
Page 1 - FORMAL COMPLAINT
1 damages and securty, and wind integration charges for Marah Wind's off-system project.
2 Therefore, Marah Wind respectfully requests that the Commission issue a declaratory judgment
3 resolving those clauses and ordering A vista to enter into a PP A at the rates in effect on the date
4 of this filing (errata to Order No. 31025).
5 PRELIMINARY MATTERS
6 Copies of all pleadings and other correspondence in ths matter should be served upon
7 counsel for Mariah Wind, LLC at:
8 Peter J. Richardson9 Gregory M. Adams10 Richardson & O'Leary, PLLC11 515 N. 27th Street12 P.O. Box 721813 Boise, Idaho 8370214 Telephone: [phone] Fax: [phone]
peter(frichardsonandoleary.com
16 greg(frichardsonandoleary.com
17
18 In support of this Complaint, Mariah Wind, LLC alleges as follows:
19 IDENTITY OF PARTIES
20 1.Avista Corporation, dba Avista Utilties, Inc., is a Washington Corporation with
21 its principal place of business at 1411 E. Mission Ave., Spokane, Washington 99202. Avista is
22 an electrc company and a public utility subject to the jurisdiction and reguation of the Idaho
23 Public Utilities Commission pursuant to I.C. § 61-129. Avista is subject to the jurisdiction of the
24 Commission, the Washington Utilities and Transporttion Commission, and the Federal Energy
25 Regulatory Commission ("FERC").
26 2.Mariah Wind, LLC is an Oregon limited liability company. Mariah Wind, LLC's
27 address is Marah Wind, LLC, 17971 SE River Road Ste. 229, Milwaukie, Oregon 97267.
Page 2 - FORML COMPLAINT
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Marah Wind, LLC has the rights to develop and dispose of the output of the Marah Wind, LLC
wind project, which is a qualifying facility under the Public Utility Regulatory Policies Act of
1978.
JURISDICTION
3. This case involves PURPA's avoided cost provisions and FERC implementing
reguations thereto, which PURPA directs states to implement. See 16 U.S.c. § 824a-3 (a)-(g);
FERC v. Mississippi, 456 U.S. 742, 751 (1982). In Idaho, the Commission possesses jursdiction
over complaints regarding rates of public utilities, including PURPA rates. I.C. §§ 61-129, -501.
-502, -503, -612; see also Afton Energy Inc. v. Idaho Power Co., 111 Idaho 925, 929, 729 P. 2d
400,404 (1986). The Commission has jurisdiction to issue declaratory judgments regarding
utilty contracts pursuant Idaho's Declaratory Judgment Act, I.C. § 10-1203. See Utah Power
and Light v. Idaho Pub. Utilties Commission, 112 Idaho 10, 12, 730 P.2d 930,932 (1986).
APPLICABLE LAWS AND REGULATIONS
4. Section 210 of PURP A requires electric utilties to purchase power produced by
small power producers that obtain QF status under section 201. 16 U.S.C. § 824a-3(a)(2). The
PUR A avoided cost rates must compensate the QF for the full costs the utilty avoids by
purchasing its energy, capacity, and, if transferred, the QF's environmental attbutes. See
California Public Utilties Commission, 133 FERC ~ 61,059 (Oct. 21, 2010) (order denying
rehearng) (approving of a PURP A implementation whereby certain QFs receive a higher
avoided cost rate for providing environmental attbutes in addition to their energy and capacity);
see also American Ref-Fuel Co., et al., 105 FERC ~ 61,004 (2003), order aff'd on reh 'g, 107
FERC ~ 61,016 (2004).
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5. FERC rues provide QFs with the option of selling electricity and capacity to a
utilty based on the utilty's "avoided costs" at the time the QF incurs a legally enforceable
obligation to deliver energy or capacity over a specified term. See 18 C.F.R. § 292.304(d)(2)(ii).
Thus, "a QF, by committing itself to sell to an electrc utilty, also commits the electrc utility to
buy from the QF; these commitments result either in contracts or in non-contractual, but binding,
legally enforceable obligations." JD Wind 1, LLC, ''Notice ofIntent Not to Act and Declaratory
Order," 129 FERC ~ 61,148, at p. 10-11 (November 19,2009).
FACTUAL BACKGROUND
6. Mariah Wind, or its agents and predecessors, have been actively engaged in the
development of the Marah Wind, LLC wind project since 2005. The project will have a
nameplate capacity rating of 10 MW, and will be located on ranch land in Morrow County,
Oregon.
7. Mariah Wind's project has been developed in tandem with a 10-MW wind project
located on neighboring land, and that neighboring project is owned and operated by Orem
Family Wind, LLC.
8. Marah Wind, or its agents and predecessors, have made substantial investments
in development of the Mariah Wind project. Development activities have included conducting
wind studies, environmental studies, acoustic studies, and archeological studies.
9. Mariah Wind and Orem Family Wind, LLC, are in the process of securing shared
interconnection and transmission though Columbia Basin Electric Co-operative and Bonnevile
Power Administration to A vista's Lewiston Substation.
10. Marah Wind has been in contact with Avista regarding the sale of its output
through a PURA PPA contaning published avoided cost rates since September 2010.
Page 4 - FORML COMPLAINT
1 12. On October 8, 2010, Mariah Wind sent to Avista all of the project-specific
2 information requested by A vista for a stadard PURP A PP A.
3 13. Without prior notice to Mariah Wind, after the close of business on Friday,
4 November 5, 2010, Avista fied a joint petition and motion, with Rocky Mountain Power and
5 Idaho Power Company, initiating Commission Case No. GNR-E-I0-04, which requested the
6 Commission immediately lower the eligibility cap for published rates from 10 aMW to 100
7 kilowatts ("kw") of nameplate capacity.
8 14. If granted, Avista's requested immediate reduction in the eligibilty cap
9 availabilty would preclude Marah Wind from obtaining the published rates, and would negate
10 the cost-effectiveness of a PP A with A vista.
11 15. On November 16,2010, Mariah Wind obligated itself to a 20-year PPA, by
12 sending to Avista a PP A containing the Commission-approved terms of a standard PURP A PP A
13 at the published avoided.cost rates, executed by Marah Wind.
14 16. Marah Wind's November 16th PPA contained identical terms to those in a draf
15 PPA provided by Avista, except that Marah Wind's PPA contaned modified terms regarding
16 ownership of environmental attbutes, delay liquidated damages and security, the mechanical
17 availabilty guarantee, insurance, as well as applicable rates and the wind integration charge.
18 The submitted PP A also contained an accompanying letter describing the basis for the modified
19 terms.
20 17. A vista rejected Marah Wind's signed PP A.
21 18. Subsequently, Mariah Wind expressed willngness to agree to Avista's terms
22 regarding the mechanical availabilty guarantee and insurance.
Page 5 - FORMAL COMPLAINT
1 19. But A vista has refused to agree to Mariah Wind's terms regarding ownership of
2 environmental attibutes, delay liquidated damages and securty, and the wind integration charge.
3 20. Avista refused to agree to a term similar to those in Idaho Power Company and
4 Rocky Mountain Power PURP A PP As whereby the utilty waives ownership of environmental
5 attributes in contracts containing the published avoided cost rates calculated to compensate the
6 QF only for the energy and capacity delivered.
7 21. Additionally, Avista stated it would not agree to delay liquidated damages and
8 security clauses containing damages and securty amounts less than $45/kw, in response to
9 Marah Wind's statements that it would obligate itself only to an amount reasonably calculated to
10 offset Avista's actu damages, as determined by the Commission.
11 22. Finally, Avista insisted on charging Marah Wind 50% of its standard wind
12 integration charge of$6.50IMWh, despite that Marah Wind will pay Bonnevile Power
13 Administration for wind integration services and will therefore provide a firmed energy delivery
14 to Avista's system entitling it to Avista's ful, published, avoided cost rates.
15 23. Through Mariah Wind's PPA submitted November 16,2010, and subsequent
16 communications, Mariah Wind has agreed to all material terms of the draft PP A distrbuted by
17 Avista except for clauses discussed in paragraphs 19-22.
18 24. Mariah Wind stil intends to obligate itself to all terms of the draf PP A
19 distributed by Avista with the exception of the modified terms regarding Marah Wind's
20 ownership of environmental attributes, reasonable delay liquidated damages and securty as
21 determined by the Commission, and the curent, published, avoided cost rates without a
22 $3.25/MWh reduction for wind integration.
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Page 6 - FORMAL COMPLAINT
1 LEGAL CLAIM
2 Complainant's Claim for Relief
3 Avista is in violation ofPURPA, FERC's regulations and orders, and the Commission's
4 orders by refusing to enter into a power purchase agreement containing the published
5 avoided cost rates in Order No. 31025 and reasonable and legal terms regarding ownership
6 of environmental attributes, delay damages and security, and wind integration.
7 25. Mariah Wind, LLC re-alleges and incorporates all preceding paragraphs.
8 26. Marah Wind, LLC has attempted in good faith to engage in negotiations to obtain
9 a fuly executed power purchase agreement to deliver energy and capacity to A vista from the
10 Mariah Wind, LLC wind project and provided A vista with an executed PP A for the project.
11 27. Avista has unjustifiably refused to disclaim ownership of environmenta attibutes
12 in a PPA that will contan published avoided cost rates calculated to only compensate the QF for
13 sale of energy and capacity in the State ofIdaho, where the law does not assign ownership of
14 environmental attibutes to the utilty for a wholesale energy transaction.
15 28. Avista unjustifiably insisted on a punitive delay liquidated damages and delay
16 security amount of $45/kw nameplate capacity without regard to any reasonable approximation
17 of its likely damages in the event of a delay default. See Magic Valley Truck Brokers, Inc. v.
18 Meyer, 133 Idaho 110, 117,982 P.2d 945,952 (Ct. App. 1999).
19 29. Avista unjustifiably insisted on charging Mariah Wind $3.50IMWh for wind
20 integration when Marah Wind will pay for wind integration with Bonnevile Power
21 Administration prior to delivery to A vista.
Page 7 - FORMAL COMPLAINT
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30. Mariah Wind, LLC commtted itself to sell energy and capacity from its QF to
Avista at a time when the rates in Order No. 31025 are applicable to its QF and, consequently,
Mariah Wind, LLC committed A vista to buy from the QF at those rates.
31. These commitments result in non-contractual, but binding, legally enforceable
obligations. 18 C.F.R. § 292.304(d)(2)(ii); JD Wind 1, LLC, 129 FERC ~ 61,148, at pp. 10-11.
32. By negotiating in bad faith and by failing to execute a PPA containing reasonable
terms, Avista is in violation ofPURPA, FERC's implementing regulations, and the
Commission's orders. See 16 U.S.C. § 824a-3(a)(2); 18 C.F.R. § 292.304(d)(2)(ii); Blind
Canyon Aquaranch v. Idaho Power Company, Case No. IPC-E-94-1, Order No. 25802
(November 1994).
PRAYER FOR RELIEF
WHEREFORE, Marah Wind, LLC respectfuly requests that the Commission issue an
Order:
1. Declaring that Avista is in violation ofPURPA, FERC's implementing
reguations, and the Commission's orders.
2. Requiring A vista to execute a stadard PURP A power purchase agreement with
Marah Wind, LLC containing Avista's avoided cost rates on fie for QFs under 10 aMW in
Order No. 31025, and the terms deemed reasonable by the Commission for the disputed clauses
described in this Complaint.
3. Granting any other relief that the Commission deems necessar.
Page 8 - FORML COMPLAINT
õ~
Respectfully submitted this ~ day of December, 2010.
RICHARDSON AND O'LEARY, PLLCØI
Peter J. Richardson (ISB No: 3195)
Gregory M. Adams (ISB No. 7454)
Attorneys for Complainant
Page 9 - FORMAL COMPLAINT
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 10th day of December, 2010, a true and correct copy of
the within and foregoing FORMAL COMPLAINT BY MARIAH WIND, LLC was served by
HAD DELIVERY, to:
Jean Jewell
Commission Secreta
Idaho Public Utilties Commission
472 West Washington
Boise, Idaho 83702
Jean. i ewell(fpuc.idaho. gov
BY~~
Page 10 - FORMAL COMPLAINT