20180627Answer to Complaint.pdf

Case 1:18-cv-00236-REB Document 4 Filed 06/25118 Page 1 of 13
ldaho Pir[-,irc Utilities Commission
Otiice.nf the SecretaryRECEIVED
JUN 2 7 20t8LAWRENCE G. WASDEN
IDAHO ATTORNEY GENERAL
Boise,ldaho
Brandon Karpen,ISB No. 7956
Edith Pacillo, ISB No. 5430
Deputy Attorneys General
Idaho Public Utilities Commission
472West Washington
P.O. Box 83720
Boise, Idaho 83720-007 4
Telephone No. [phone]
Facsimile No. [phone]
brandon.karpen @ puc. idaho. gov
Scott Zanzig, ISB No. 9361
Deputy Attorney General, Civil Litigation Division
Office of the Attorney General
945 West Jefferson Street, 2nd Floor
P.O. Box 83720
Boise, Idaho 83720-0010
Telephone No. [phone]
Facsimile No. [phone]
scott.zanzi g @ ag.idaho. gov
Atto rney s fo r D efendants
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
FRANKLIN ENERGY STORAGE ONE, LLC,
FRANKLIN ENERGY STORAGE TWO, LLC,
FRANKLIN ENERGY STORAGE THREE
LLC, FRANKLIN ENERGY STORAGE
FOUR, LLC,
Case No. 1 : I 8-cv-00236-REB
ANSWER TO FIRST AMENDED
COMPLAINT
Plaintiffs,
VS
PAUL KJELLANDER, KRISTINE RAPER, and
ERIC ANDERSON, in their official capacity as
Commissioners of the IDAHO PUBLIC
UTILITIES COMMISSION,
Defendants.
ANSWER TO FIRST AMENDED COMPLAINT - I .
Case 1:18-cv-00236-REB Document 4 Filed 06/25118 Page 2 ot t3
DEFENDANTS' ANSWER TO FIRST AMENDED COMPLAINT
Defendants Paul Kjellander, Kristine Raper, and Eric Anderson, in their official capacity
as Commissioners of the Idaho Public Utilities Commission (collectively "Defendants"), answer
Plaintiffs' First Amended Complaint for "Violation of the Federal Power Act, the Public
[Utility] Regulatory Policies Act of 1978, and Federal Energy Regulatory Commission
Regulations" (the "Complaint") as follows:
FIRST DEFENSE
(General Denial)
Defendants deny all allegations in the Complaint not specifically and expressly admitted
in this Answer.
SECOND DEFENSE
(Specific Answers to Numbered Paragraphs)
I.
JURISDICTION AND VENUE
l. Paragraph 1 states a legal conclusion to which no answer is required. To the
extent an answer is required, Defendants deny the allegations of Paragraph 1.
2. Paragraph 2 states a legal conclusion to which no answer is required. To the
extent an answer is required, Defendants deny allegations of Paragraph2.
3. In answer to Paragraph 3, Defendants admit that Plaintiffs filed their Petition at
FERC on December 14,2017 and that the Federal Energy Regulatory Commission ("FERC")
declined to initiate the enforcement proceeding sought by Plaintiffs in a Notice of [ntent Not to
Act issued February 15, 2018, which speaks for itself as to its content. True and correct copies of
the Plaintiffs' Petition and the FERC's Notice of Intent Not to Act are attached to this Answer as
Exhibit Nos. 1 and2. Defendants deny that Plaintiffs' Petition was directed to them as
ANSWER TO FIRST AMENDED COMPLAINT. 2 -
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individuals in any capacity, and otherwise deny the allegations of Paragraph 3 of the First
Amended Complaint.
4. Paragraph 4 states a legal conclusion to which no answer is required. To the
extent an answer is required, Defendants deny the allegations of Paragraph 4.
5. In answer to the allegations in Paragraph 5, Defendants admit they are located and
conduct business in this district. Defendants deny the remaining allegations of Paragraph 5.
II.
PRELIMINARY STATEMENT
6. Defendants deny the allegations of Paragraph 6.
7. Paragraph 7 states a legal conclusion to which no answer is required. To the
extent an answer is required, Defendants deny the allegations of Paragraph 7 and invite the
Court's attention the actual terms of Section 210 of the Public Utility Regulatory Policies Act
(16 U.S.C. $ 824a-3) rather than Plaintiffs' attempt, in Paragraph 7 of the Complaint, to
paraphrase the statute. Defendants admit that the Idaho Public Utilities Commission ("IPUC") is
an agency of the State of Idaho that is a "State regulatory authority" within the meaning of $
2r0(0(t).
8. Defendants deny the allegations of Paragraph 8, and invite the Court's attention to
l8 C.F.R. g 292.304 and the IPUC's decisions in Order No. 33357 - In the Matter of ldaho
Power Company's Petition to Modify Terms and Conditions of PURPA Purchase Agreements,
324P.[J.R.4'h 320 (2015), reconsiderarion denied, Order No. 33419 (2015) for the actual
regulatory regime. True and correct copies of l8 C.F.R.304, and IPUC Order Nos. 33357 and
33419, are respectively attached to this Answer as Exhibit Nos. 3, 4, and 5.
9. Defendants deny the allegations of Paragraph 9, except admit that Plaintiffs are
self-certified Qualifying Facilities ("QFs") seeking to sell energy output.
ANSWER TO FIRST AMENDED COMPLAINT.3 .
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10. Defendants deny the allegations of Paragraph 10, except admit that Idaho Power
Company petitioned the IPUC for a declaratory judgment as to the eligibility of Plaintiffs for
specific types of PURPA power purchase agreements.
1 1. Defendants lack knowledge or information sufficient to form a belief about the
truth of the allegations of Paragraph I l.
12. Defendants deny the allegations of Paragraph 12, except Defendants admit to
issuing IPUC Order Nos. 33785 and 33858 relating to Idaho Power's Petition for Declaratory
Order. True and correct copies of these IPUC orders are respectively attached to this Answer as
Exhibits 6 and 7 . Defendants invite the Court's attention to those orders for the disposition of
that matter.
13. Defendants deny the allegations of Paragraph 13, and invite the Court's attention
to Commission Order Nos. 33785, and 33858 (Defendants' Exhibits 6 and 7).
14. Defendants lack knowledge or infonnation sufficient to form a belief about the
truth of the allegations of Paragraph 14.
III.
THE PARTIES
A. Parties Plaintiff:
15. In answer to the allegations in Paragraph 15, Def'endants admit that Franklin
Energy Storage One, LLC, has filed a FERC Form No. 556 QF self-certification. A true and
correct copy of that document is attached to this Answer as Exhibit 8. Defendants otherwise deny
the allegations of Paragraph 15.
16. In answer to the allegations in Paragraph 16, Defendants admit that Franklin
Energy Storage Two, LLC, has filed a FERC Form No. 556 QF self-certification. A true and
ANSWER TO FIRST AMENDED COMPLAINT - 4 -
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correct copy of that docurnent is attached to this Answer as Exhibit 9. Defendants otherwise deny
the allegations of Paragraph 16.
17. In answer to the allegations in Paragraph 17, Def'endants admit that Franklin
Energy Storage Three, LLC, has filed a FERC Form No. 556 QF self-certification. A true and
corect copy of that document is attached to this Answer as Exhibit 10. Defendants otherwise
deny the allegations ofParagraph 17.
18. In answer to the allegations in Paragraph 18, Defendants admit that Franklin
Energy Storage Four, LLC, has filed a FERC Form No. 556 QF self-certification. A true and
correct copy of that document is attached to this Answer as Exhibit 1 1. Defendants otherwise
deny the allegations ofParagraph 18.
19. Def'endants lack knowledge or information sufficient to form a belief about the
truth of the allegations of Paragraph 19.
B. Party Defendant:
20. In answer to the allegations of Paragraph 20, Defendants admit that they are the
incumbent Commissioners of the IPUC, and that the IPUC is an agency of the State of Idaho that
is a "State regulatory authority" within the meaning of $ 210(0(1) of PURPA. Defendants also
invite the Court's attention to the relevant provisions of PURPA (16 U.S.C. $ 824a-3), the
FERC's PURPA rules (18 C.F.R. Part292), and the IPUC's decisions for statutorily-defined
responsibilities, and otherwise deny the allegations of Paragraph 20.
IV.
FACTUAL ALLEGATIONS AND CLAIMS
2I. [n answer to the allegations in Paragraph 21, Defendants admit that Plaintiffs
purportedly base their claims on Section 210(h)(2) of PURPA (16 U.S.C. $ 82aa-3(h)(2)) and
FERC's implementing regulations. Defendants deny the allegations in Paragraph2l to the extent
ANSWER TO FIRST AMENDED COMPLAINT.5 -
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they imply that Defendants have violated the cited laws or regulations, or that Plaintiffs are
entitled to relief under PURPA Section 210(h)(2), Defendants otherwise deny the allegations of
Paragraph2l.
22. Defendants deny the allegations of Paragraph2Z.
23. Paragraph 23 states a legal conclusion to which no answer is required. To the
extent that an answer is required, Defendants deny the allegations of Paragraph 23.
24. In answer to the allegations in Paragraph 24, Defendants admit that PURPA is
intencled to encourage the development of certain types of energy resources. Defendants
otherwise deny the remaining allegations of Paragraph24, and invite the Court's attention to the
FERC's decision in Luz Developrnent & Finance Corp.,51 FERC g[61,078 (1990) for that
decision's actual content. A true and correct copy of Luzis attached to this Answer as Exhibit 12.
25. Paragraph 25 of the Complaint states a legal conclusion to which no answer is
required. To the extent an answer is required, Defendants deny the allegations of Paragraph 25
and invite the Court's attention to Section 210 of PURPA (16 U.S.C. $ 824a-3) for its actlral
terms.
26. In answer to the allegations in Paragraph 26, Defendants admit that Plaintiffs have
self-certified themselves as QFs by filing Form 556 QF with the FERC (attached as Exhibits 8
through 11 to this Answer). Defendants deny the remaining allegations of Paragraph 26.
27 . Defendants deny the allegations of Paragraph 27 .
28. Defendants deny the allegations of Paragraph 28.
29. In answer to the allegations in Paragraph 29, Defendants admit that Plaintiffs filed
their December 14, 2017 Petition (Exhibit I hereto) with FERC, and otherwise deny the
allegations of P aragraph 29.
ANSWER TO FIRST AMENDED COMPLAINT - 6 -
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30. In answer to the allegations of Paragraph 30, Defendants admit that FERC issued
its February 15, 2018 Notice of Intent Not to Act (Exhibit 2 hereto) with respect to Plaintiffs'
Petition. Defendants otherwise deny the allegations of Paragraph 30.
31. Defendants admit the allegation of Paragraph 31.
32. The allegations of Paragraph 32 state a legal conclusion to which no answer is
required. To the extent an answer is required, Defendants invite the Coufi's attention to Section
210(hX2XB) of PURPA (16 U.S.C. 82aa3@)(2)(B), which speaks fbr itself. Defendants
otherwise deny the allegations of Paragraph 32.
33. Defendants deny the allegations of Paragraph 33.
v.
STATUTORY AND REGULATORY FRAMEWORK
34. Paragraph 34 states a series of legal conclusions to which no answer is necessary.
To the extent that an answer is necessary, Defendants deny the allegations of Paragraph 34.
35. Defendants deny the allegations of Paragraph 35 and invite the Court's attention
to the Supreme Court's decision in Mississippi v. FERC,456 U.S. 727 ,745-752 (1982), fbr an
authoritative exposition on Congressional intent in enacting PURPA.
36. Defendants deny the allegations of Paragraph 36 and invite the Court's attention
to the Supreme Court's decision in Mississiltlti v. FERC,456 U.S. 727,745-752 (1982), for an
authoritative exposition on Congressional intent in enacting PURPA.
37 . Defendants deny the allegations of Paragraph 37 and invite the Court's attention
to the Supreme Court's decision in Mississiplti v. FERC,456 U.S. 727,745-752 (1982), for an
authoritative exposition on Congressional intent in enacting PURPA.
38. Paragraph 38 states legal conclusions to which no answer is required. To the
extent an answer is required, Defendants deny the allegations of Paragraph 38 and invite the
ANSWER TO FIRST AMENDED COMPLAINT - 7 -
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Court's attention to the text of PURPA Section 210(b) (16 U.S.C. $ 82aa-3(b)) and of the
FERC's regulations at 18 C.F.R, g 292.I01(b) for the content thereof.
39. Paragraph 39 states legal conclusions to which no answer is required. To the
extent an answer is required, Defendants deny the allegations of Paragraph 39 and invite the
Court's attention to Small Pov,er Productiort and Cogeneratiort Facilities; Regulations
Intltlementing Sectiott 210 oJ'the Puhlic Utility Regulator.v Policies Act, Order No. 69, FERC
Stats. & Regs. t130,128, oreler on reh'g Order No. 69-A, FERC Stats. & Regs. t[30,160 (1980),
aff'd in part antl vacated in part sub nom. Americon Elec. Pwr. Svc. Corp. v. FERC,675 F.2d
I?26 (D.C. Cir. 1982), rev'd in part sub nom. American Paper Inst., Inc. v. Anrcrican Elec. Py.,r.
Svc. Corp.,461 U.S. 402 (1983), for FERC's explanation of its construction of PURPA in its
implementing regulations.
40. Paragraph 40 states legal conclusions to which no answer is required. To the
extent an answer is required, Defendants deny the allegations of Paragraph 40 and invite the
Court's attention to the FERC's regulations at l8 C.F.R. $ 292.304(d) for the content thereof.
41. Paragraph 4l states legal conclusions to which no answer is required. To the
extent an answer is required, Defendants deny the allegations of Paragraph 41 and invite the
Court's attention to the text of the FERC regulations cited in Paragraph 41 for the content
thereof.
42. Paragraph 42 states legal conclusions to which no answer is required. To the
extent an answer is required, Defendants deny the allegations of Paragraph 42 and refer the Court
to text of the statutory provisions cited in Paragraph 42 for the content thereof.
43. Defendants admit the allegations of Paragraph 43.
ANSWER TO FIRST AMENDED COMPLAINT. S -
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vI.
IDAHO PUC,s PURPA IMPLEMENTATION SCHEME
44. Paragraph 44 states legal conclusions to which no answer is required. To the extent
an answer is required, Defendants admit that state commissions o'may comply with the statutory
requirements by issuing regulations, by resolving disputes on a case-by-case basis, or by taking
any other action reasonably designed to give effect to FERC's rules." FERC v. Mississippi,456
U .S . 7 42, 7 5l (1982). Defendants otherwise deny the allegations of Paragraph 44.
45. Defendants admit the allegations of Paragraph 45.
46. Defendants admit that the block-quoted passages set forth in Paragraph 46
correctly quote excerpts from IPUC Order Nos. 32176 and32697. True and correct copies of
IPUC Order Nos. 32176 and32697 are respectively attached to this Answer as Exhibits l3 and
14. Defendants deny the remaining allegations of Paragraph 46.
47. Defendants deny the allegations of Paragraph 47, and invite the Court's attention
to Exhibits l3 and 14 for an accurate and comprehensive discussion of the IPUC's exercise of
the discretion granted to it by l8 C.F.R. * 29230a@X1) and (2) regarding standard rates for
PURPA purchase agreements.
48. Paragraph 48 states legal conclusions to which no answer is required. To the
extent an answer is required, in the IPUC proceedings Defendants acknowledged that "[t]he
battery storage facilities' QF status is a matter within FERC's jurisdiction and is not at issue in
this case." Defendants' Exhibit 6 (Order No. 33785 at 11). Defendants deny the remaining
allegations of Paragraph 48.
ANSWER TO FIRST AMENDED COMPLAINT - 9 .
Case 1:18-cv-00236-REB Document 4 Filed 06/25118 Page 10 of 13
vII.
FRANKLIN ENERGY STORAGE QF STATUS
49. In answer to the allegations of Paragraph 49, Defendants admit each Plaintiffs
self-certified to FERC that each owns a "qualifying small power production facility."
Defendants otherwise deny the allegations of Paragraph 49.
50. Defendants admit the allegations of Paragraph 50.
51. In answer to the allegations of Paragraph 51, Defendants state that the Plaintiffs'
FERC Form 556 self-certifications are attached to this Answer as Exhibits 8 through I 1.
Defendants invite the Court's attention to those Exhibits for the content of Plaintiffs' self-
certifications. To the extent that an answer is required, Defendants deny the allegations of
Paragraph 5 1.
52. Defendants admit Plaintiffs each filed FERC Form 556 self-certifications.
53. Defendants admit the allegations of Paragraph 53.
54. Paragraph 54 states legal conclusions to which no answer is required. To the
extent an answer is required, Defendants invite the Court's attention to the FERC's decision in
Luz Dev. & Fin. Corp.,5l FERC 9[61,078 (1990) for its contents. See Exhibit l2 hereto.
55. Defendants admit that when this matter was before the IPUC, each Plaintiff
exclusively used solar modules to provide the electric energy to their battery storage facilities.
Defendants deny the remaining allegations of Paragraph 55.
56. The Defendants deny the allegations of Paragraph 56. Defendants further state the
IPUC found, in response to Idaho Power's Petition for Declaratory Order, "that, as storage
facilities with design capacities that will exceed 100 kW each and with solar as their primary
energy source, the projects are eligible for two-year, negotiated (IRP methodology) contracts."
ANSWER TO FIRST AMENDED COMPLAINT. IO -
Case 1:18-cv-00236-REB Document 4 Filed 06/2511-8 Page 11 of 13
See IPUC Order No. 33785 at l2-I3, Exhibit 6 hereto. The IPUC reaffirmed this finding in Order
No. 33858 at3. See Exhibit 7 hereto.
57 . Defendants deny the allegations of Paragraph 57 and invite the Court's attention
to Exhibits 6 andT for the actual content of the IPUC's rulings.
58. Defendants deny the allegations of Paragraph 58.
vIII.
CLAIM FOR RELIEF
59-63. In answer to Paragraphs 59-63, Defendants deny that Plaintiffs are entitled to any
relief whatsoever.
THIRD DEFENSE
l. Plaintiffs' Complaint is barred by the applicable statute of limitations.
FOURTH DEFENSE
2. Plaintiffs' Complaint is barred because Plaintiffs failed to exhaust their
administrative remedies.
FIFTH DEFENSE
3. Plaintiffs' Complaint fails to state a claim upon which relief can be granted.
SIXTH DEFENSE
4. The claims asserted in Plaintiffs' Complaint attack the Idaho IPUC's
determination about the Plaintiffs' eligibility for "standard" or "published" rate contracts having
a term longer than two years, based on the IPUC's review of project characteristics specific to
the Plaintiffs' projects. The Plaintiffs' claims are, therefore, "as-applied" claims subject to
determination by the Idaho Supreme Court under PURPA Section 210(9), rather than PURPA
"implementation" claims subject to this Court's jurisdiction under PURPA Section 210(h). As a
result, this Court lacks subject matter jurisdiction over Plaintiffs' claims.
ANSWER TO FIRST AMENDED COMPLAINT. II -
Case 1:l-8-cv-00236-REB Document 4 Filed 06/2511-8 Page L2 ot t3
SEVENTH DEFENSE
5. The relief sought by Plaintiffs' Complaint is an impermissible collateral attack on
a final order of the IPUC, and is barred by res judicata, collateral estoppel.
ATTORNEYS' FEES AND COSTS
Defendants have been required to retain counsel to defend themselves in this action and
are entitled to recover their reasonable attorneys' fees and costs under Idaho Code $$ I2-lL7 and
12-121, the Federal Rules of Civil Procedure, and other applicable law.
WHEREFORE, Defendants pray for a judgment dismissing the Plaintiffs' Complaint
with prejudice, and for an award of Defendants' reasonable costs and attorneys' fees, and for
any such further relief as the Court may deem just.
RESPECTFULLY SUBMITTED this 25th day of June, 2018.
OFFICE OF THE ATTORNEY GENERAL
/s/ Brandon Kanten
Brandon Karpen
Deputy Attorney General
Attorney for Defendants
ANSWER TO FIRST AMENDED COMPLAINT - 12 -
Case 1:L8-cv-00236-REB Document 4 Filed 06/25118 Page 13 of 13
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 25th day of June,2Ol8,I filed the foregoing electronically
through the CM/ECF system, which caused the following parties or counsel to be served by
electronic means, as more fully reflected on the Notice of Electronic Filing:
Robert Jones, Attorney for Plaintiffs
(email : peter@ richardsonadams.com)
Robert C. Huntley, Attorney for Plaintiffs
(email : rhuntley @ huntleylaw.com)
RESPECTFULLY SUBMITTED this 25thday of June,2018.
/s/ Brandon Karpen
Brandon Karpen
ANSWER TO FIRST AMENDED COMPLAINT - 13 -
Case 1:18-cv-00236-REB Document 4-1 Filed 06/25118 Page 1 of 10
IJNITED STATES OF AMERICA
BEX'ORE THE
FDDERAL ENERGY REGULATORY COMMISSION
Franklin Enerry Storage 0ne, LLC
X'ranklin f,nergy Storage Two, LLC
Franklin Enerry Storage Three, LLC
Franklin Energr Storage Four, LLC
)
)
)
)
Docket No. ELIT-
PETITION ['OR DECLARATORY ORI}ER
AND
PETITION FOR ENTORCEMENT
PURSUATYT TO SECTTON 2r0G)
OF TIIE
PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978
OF
TRANKLIN ENERGY STORAGE ONE, LLC
FRANKLIN ENERGY STORAGE TWO, LLC
FRANKLIN ENERGY STORAGE TIIREE, LLC
FRANKLIN ENERGY STORAGE FOUR, LLC
Pursuant to Rule 207 of the Federal Energy Regulatory Commission's
("Commission" or "FERC") Rules of Procedure, 18 C.F.R. $ 385.207, Franklin Energy Storage
One, LLC; Franklin Energy Storage Two, LLC; Franklin Energy Storage Three, LLC, and
Franklin Energy Storage F-our, LLC (herein collectively, the'oF'ranklin tsnergy Storage Facilities"
or "Franklin") hereby collectively petition the Commission for a Declaratory Order finding that
certain orders of the ldaho Public LJtilities Commission ("IPUC" or "ldaho Commission") are
inconsistent with the Public Utilities Regulatory Policies act of 1978 (*PURPA"). Pursuant to
Section 2 I 0(h) of PTJRPA Franklin also petitions the Commission to initiate an enforcement
action against the Idaho Public Utilities Commission ("IPUC") to remedy the State of Idaho's
improper implementation of PURPA.
Franklin Energy Storage Facilities
Petition for Declaratory Ruling
Petition for Enforcement
1
Case 1:18-cv-00236-REB Document 4-1 Filed 06/25118 Page 2 of tO
This Petition asking the Commission to issue its Declaratory Order and to initiate an
enforcement action against the IPUC is based on the IPUC's usurpation of the Commission's
exclusive authority over the certification of Qualiffing Facilities under PURPA. The IPUC
denied Franklin's entitlement to IPUC established long-term (twenty-year) power purchase
agreements prusuant to established IPUC precedent based solely on the Idaho Commission's
denial of the QF status of the Franklin Energy Storage Facilities. In doing so, the IPUC has
usurped the exclusive role of this Commission to establish criteria for, and to adjudicate, the
legal status of Qualifying Facilities. Specifically, the IPUC ruled that energy storage QFs are not
distinct QFs but rather are defined by the nature of the energy input into the energy storage
facility. The IPUC's orders are inconsistent with established FERC rulings that energy storage
systems using renewable resource inputs are distinct Qualifying Facilities. The IPUC's orders
wrongfully allow it to avoid its obligation to implement PURPA and deny the Franklin Energy
Storage Facilities their entitlement to the Idaho Commission's ostandard' twenty-year contract
term and associated rates.
I. PETITIONER DESCRIPTION
The Franklin Energy Storage Facilities are four Idaho limited liability companies, each under
clistinct and separate ownership. The Franklin Energy Storage Facilities are each a 25 MWI
"qualifying small power producet''within the meaning of section 210(hX2XB) of PURPA. The
I Alternating current.
Franklin Energy Storage Facilities
Petition for Dccleuatory Ruling
Petition for Enforcement
2
Case 1:18-cv-00236-REB Document 4-1 Filed 06/2511-8 Page 3 of 10
Franklin Energy Storage Facilities are self-certified "QF"s.2 All four projects are similarly
described in their respective FERC Form 556's at Paragraph 7h as follows:
The project consists of an energy storage system Qualifring Facility providing scheduled
and dispatchable electricity in forward-looking time blocks. The energy storage system
that comprises the energy storage Qualifying Facility is dcsigned to, and will, receive
1A0% of its energy input from a combination of renewable energy sources such as wind,
solar, biogas, biomas, etc. The current initial design utilizes solar photovoltaic (PV)
modules mounted to single-axis trackers to provide the electric energy input to the
Qualiffing Facility's battery storagc system. The PV modules are planned to be
connected in series/parallel combinations to solar inverters, rated approximately 2.5
MWac each, (subject to change). The proposed electric energy storage Qualiffing
l'acility will consist of an electro-chemical battery and will have a maximum power
output capacity of 25 MWac for a sustained time period of 5 - 60 minutes. The Facility
will consist of an altemate current (AC) to direct current (DC) control system. 'Ihe
Qualiffing Facility will be utilized to provide the purchasing utility with pre-scheduled
and dispatchable AC energy within pre-determined time blocks. The sole source of
electric power and energy provided to the purchasing utility will be the electro-chemical
reaction giving rise to the discharge of electric power and energy by the battery. In turn,
the sole direct source of energy input to the battery Facility will be, as described above,
renewable sources.3
The four distinct Franklin Energy Storage Facilities will be located in Idaho near the
Nevada/Idaho border about twenty miles north of the town of Jackpot, Nevada. They will be
adjacent to one another and will share an interconnection onto the commonly owned (Idaho
Power and NV Energy) 345 kV Midpoint-Humboldt transmission line.
II. COMMUNICATIONS
All correspondence and communications regarding this Petition should be directed to:
Peter J. Richardson
515 N. 27s St.
Boise,Idaho $742
(208) e38-7901
ne ter(a) ric hard so nad a m s. corn
Robert A. Paul
515 N. 27th Street
Boise, tdaho 83702
(760) 861-l 104
robertapaul@gmail, com
2 See FERC DocketNos. QF17-581, QF17-582, QFlT-583 and QFlT-584.
3 F'ERC Form 556 atllTh, FERC f)ocket Nos. QFl7-581 - 584.
l'ranklin Energy Storage Facilities
Petition for Declaratory Ruling
Petition for Enforcement
J
Case 1:18-cv-00236-REB Document 4-1 Filed 06/25118 Page 4 of 10
Copies of this filing have been served on the Idaho Public Utilities Commission and Idaho Power
Company by hand delivery of a hard copy and email.
ru. THE TDAHO COMMISSION'S REFUSAL TO RE,COGI\IZE, ENERGY
STORAGE QUALIT"TING FACILITY STATUS
PURPA is implemented in Idaho by the IPUC on an ad hoc, order-by-order basis. There
are no tdaho statutes or rules implementing PURPA. Idaho's electric utilities operate in a
traditional vertically integrated rate-regulated environment.4 The IPUC has established standard-
offer avoidcd cost rates, with a contract term of up to twenty-years, for all QFs (other than solar
or wind QFs) that have a capacity of ten average monthly megawatts (l0aMW) or less.s For
wind and solar QFs only, the IPUC has restricted the availability of standard offer rales and
twenty-year contract terms to only those solar and wind QFs that have a capacity of 100 kW or
less.
While limiting the availability of published rate 'standard offer' contacts to two years for
just solar and wind Qualiffilg-Eacilities, the Idaho Commission specifically established standard
contract rates of up to twenty-years for all other Qualiffing Facilities. The Idaho Commission's
rulings in this regard are explicit:
After careful consideration, the Commission fidaho PUC] ultimately determined that it
was appropriate to maintain the 100 kW eligibility cap for published avoided cost rate for
wind and solar OFs.6
And:
a Idaho Power is scheduled to begin participation in the recently established Western Energy
Imbalance Market in 2018.
s ,See IPUC Order Nos. 33357 and 33419, attached hereto as Exhibit Nos. 1 and 2 respectively.
6 tpUC Order No. 32697, at p. 3, emphasis provided. Attached hereto as Exhibit No. 3.
Franklin Energy Storage Facilities
Pctition for Declaratory Ruling
Petition for Enforcement
4
I
I
I
Case 1:18-cv-00236-REB Document 4-1 Filed 06/25118 Page 5 of 10
This Commission [Idaho PUC] is confident that, with other changes to the avoided cost
methodologies incorporated in the Order, changing eligibility from l0 aMW for resources
other than wind and solar is unnecessary at this time. We find that at l0 aMV/ eligibility
cap for access to published avoided cost rates for resources other than wind and solar is
appropriate...T
Finally:
We maintain the eligibility cap at 10 aIvIW for QF projects other than wind and solar
(including but not limited to biomass, small hydro, cogeneration, geothermal and waste-
to-energy.8
Thus, under the ldaho Commission's orders implementing PLJRPA, standard twenty-year
avoided costs rates and contacts are available to non-solar and non-wind QFs with a monthly
capacity of ten average megawatts or less. Wind and solar QFs are only entitled to standard
twenty-year avoided cost rates and contracts if they have a nameplate capacity of 100 kW or less.
ln early zAn, each of the Franklin Energy Storage Facilities proposed to enter into a
twenty-year published avoided cost rate contract with Idaho Power Company pursuant to
established Idaho Commission orders for their respective energy storage facilities. Each of the
Franklin Storage F'acilities sought contract terms and rates established by the ldaho Commission
for non-wind and non-solar Qb's.
Franklin, therefor, had to meet a simple two-prong test in order to claim eligibility to the
Idaho PUC established twenty-year standard avoided cost rates and contracts. The first prong of
the two-part test is a determination whether the projects are wind or solar QFs. If the QFs are not
wind or solar QFs, then the second prong of the two-part test is whether the generation from the
7 Id. atp. 14.
8 IPUC Order No. 32176, at p. 9. Attached hereto as Hxhibit No. 4
Franklin Energy Storage Facilities
Petition for Declaratory Ruling
Petition for Enforcement
{
Case 1:18-cv-00236-REB Document 4-1 Filed 06/25118 Page 6 of 10
proposed non-wind and non-solar QFs is equal to or less than tsn average monthly megawatts.e
The second part of this two-part test was not at issue because the Franklin Energy Storage
Facilitie' generation profiles in their respective FERC Form 556 filings clearly demonstrate that
they will generate well bclow the ten-averagc monthly megawatt threshold. This fact was never
questioned. Therefore, thc sole question to be answered in order to determine whether each of
the Franklin Energy Storage Facilities is eligibile for Idaho Commission established twenty-year
contracts and rates was therefore whether or not thcy are solar or wind QFs.
Idaho Power refused to enter into the requesl,ed twenty-ycar standard rate contracts and
instead filed a Petition for Declaratory Ruling asking the tdaho Commission to "extend the I00
kW published rate eligibility cap to battery storage projects." Idaho Power filed its Petition with
the Idaho PUC on February 27,2017.10
The Idaho Commission ignored Idaho Power's request to establish a 100 kW published
rate eligibility cap for battery storage facilities and instead ruled that battery storage QFs are not
distinct QFs apart from the source of the energy input into the battery system. In direct
contravention of this Commission's clearly established rulings relative to the QF status of battery
storage facilities, the Idaho Commission responded to Idaho Power's Petition by basing the
battery storage facilities' eligibility on their energy source, rather than on their QF status:
e'l'hat the l'ranklin Projects would generate less than 10 average monthly megawatts each was
never questioned or challengcd befure the Idaho Commission. According to the Franklin FERC
Form 556 filing the average monthly generation is expected to be significantly below l0 average
monthly megawatts.r0 Idaho Power Petition for Declaratory Ruting, at p. 13. IPUC Docket No. IPC-E-17-01.
Attached hcreto as Exhibit No. 5, due to size without its accompanying attachments. The entire
filing may be accessed at:
http://www.puc.idaho.gov/fileroom/cases/elec/IPC/IPCE1701/2017L227APPLICATION.PDI
Franklin Energy Storage Facilities
Petition for Declaratory Ruling
Petition for Enforcement
6
Case 1:18-cv-00236-REB Document 4-1 Filed 06/2511_8 Page 7 of 1_0
[Wle find it appropriate to base Franklin's ...eligibility under PURPA on its primary
energy source - solar. Solar resources larger than I 00 kW are entitled to negotiate two-
year PURPA contracts ... Franklin's argument that this Commission's prior decisions
clearly and unequivocally allow it entitlement to published rates ignores FERC's
pronouncement that energy storage facilities are not per se renewable resources/small
power projection facilities under PURPA.T I
The Franklin Facilities are, of course, neither wind nor solar QFs. They have been self-
certified as an "Other Renewable Resource"l2 and more specifically described as an'oenergy
storage (battery) system."l3 This Commission (FERC) has previously answered the question of
whether energy storage systems are QFs in their own right in the affrrmative. The only
requirement this Commission imposed on energy storage facilities, as distinct QFs, is that the
energy input into the storage system must comply with the same energy source requirements
applicable to any other qualiffing faciality:
In sum, energy storage facilities . . . are a renewable resource for purposes of QF
certification. However, such facilities are subject to the requirernent that the energy input
to the facility is itself biomass, waste, a renewable resource, a geothermal resource or any
combination thereof. . .
Luz Development und Finonce Corp. 57 FERC ti 61,078 atp.9,(1990).
As this Commission explained:
[I]n order for a storage facility to be a QF the primary energy source for generation of the
energy must be one of those contemplated by the statute for conventional small power
production facilities e.g., boimass, waste, renewable resources, geotherrnal resources of
any combination thereof.
Id. at p. 8.
rr IPUC Order No. 33785, p.12. Attached hereto as Exhibit No. 6.
12 FERC Form 556 at Paragraph 6, FERC Dooket Nos. QF17-581 -- 584
t3 Id. at Paragraph 7h.
Franklin Energy Storage Facilities
Petition for Declaratory Ruling
Petition for Enforcement
7
Case L:18-cv-00236-REB Document 4-1 Filed 06/25118 Page 8 of 10
There is no question that the Franklin Energy Storage Facilities will utilize a renewable resource
as their primary energy source.t4
PURPA grants FERC exclusive authoritLover QF status determinations.ls This follows
from section 201 of PURPA, which includes "qualiffing small power production facilities" as
QFs under the requirements prescribed by, and as dctermined by FERC.16 Thus, FERC's
"regulations carry out the statutory regime reposing in [FERC] exclusive authority to malce QF
status determinatiow," artd "[n]owhere do these regulations contemplate a role for the state in
setting QF standards or determining QF status."lT The Idaho Commission, therefore, is
preempted from making any determination as to the QF status of the Franklin Energy Storage
Facilities.
The Idaho Commission purported to rely on this Commission's Luz decision. However,
the IPUC aetually ignored that decision by making the facially untenable assertion that battery
storage facilities are not "presume[d]" to be "a legitimate ... qualifring facility eligible for the
benefits of PURPA:"I8
Consequently, our ruling on the narrow declaratory issue before us should not be read to
presume that this Commission deems battery storage to be a legitimate qualifying facility
eligible for the benefits of PURA and subject to the Act's implementing regulations
under FERC.le
la Form 556 at Paragraph 7h, FERC Docket Nos. QF17-581 - 584; "The energy storage system
that comprises the energy storage Qualifying Facility is designed to, and will, receive 100% of
its energy input from a combination of renewable energy sources such as wind, solar, biogas,
biomas, etc."
ts Indep. Energt Producers Ass'n, Inc. v. Cot. Pub. Utilities Comm'n, 36 E.3d 848, 853-54 (9th
Cir. 1994), "The structure of PURPA and the Commission's regulations, reflect Congress's
express intent that the Commission exercise exclusive authority over QF status determinations."
16 r6 u.s.c. 9796(17(c).t7 Indep. Energgt Producers,36 F. 3d at 854 (emphasis provided).
r8 IPUC Order No. 33785, Id. ar p. 10.
te Id.atpp. Io- 11.
Franklin Energy Storage Facilities
Petition for Declaratory Ruling
Petition for Enforcement
8
Case 1:18-cv-00236-REB Document 4-1 Filed 06i25/i.8 page g of 10
Although the ldaho Commission cited to this Commission's Luz opinion, it ignored this
Commission's unequivocal nrling that: "In sum, energy storage facilities such as the proposedLvz
battery system are a renewable resource for purposes of QF certification."2o Further ignoring this
Commission's ruling in Luz, the IPUC inexplicably stated that:
We [the Idaho CommissionJ are unaware of any reference in PURPA or FERC's
implementing rcgulations that identifies battery storage as a renewable resource eligibile
for QF' status and the benefits provided by the act. Indeed, F'ERC acknowledged that
"[n]either thc statute nor the final rule refers specifically to energy storage systems" Luz at
6l,l7l.2l
It therefore concluded that:
[W]e find it appropriate to base Franklin's eligibility under PURPA on its primary energy
source - solar. 22
In sum, the IPUC has completely disregarded this Commission's clear ruling as to the QF status
of energy storage facilities. It did so by denying that energy storage facilities are QFs and
instead ruled that their eligibility under PURPA is not based on their status as self-certified
energy storage facilities but rather is bascd on their "primary energy source." 23
ry. PRAYERS FOR RELIEF
A. DECLARATORYRULING
20 Luz, supra at p. 9.
21 IPUC Order No. 33785, Id. atp.10, citation in original.
22 Id atp.12.
23 Id, The Idaho Commission did not define what it meant by the phrase "primary energy
source." The Franklin Energy Storage Facilities' FERC Form 556 provides that they may use a
combination of renewable energy sources to energize their battery systems. Thus, there may be a
combination of energy sources, the primary one of which may vary depending on the mix of
renewable energy inputs into the battery system at any one time.
Franklin Energy Storage Facilities
Petition for Declaratory Ruling
Petition for Enforcement
9
Case 1:1-8-cv-00236-REB Document 4-1 Filed 06/25118 Page 10 of 10
PURPA vests in FERC the exclusive jurisdiction to set QF standards and to determine QF
status. Under FERC's rulings each of the Franklin Energy Storagc Facilities is a legitimate
Qualifuing Facility and a renewable resourcc that is entitled to all the bencfits accruing to it
under PURPA. The Franklin Energy Storage Facilities therefore respectfully request this
Commission issue its order declaring that; (l) the IPUC's decisions discussed herein are contrary
to PURPA and this Comrnission's implementing rules and ordcrs thcreundcr; and (2) the
Franklin Energy Storage Facilities are energy storage QFs; and (3) the Franklin Energy Storagc
Facilities are entitlement to all of the benefits under the IPUC's orders as are all other non-solar
and non-wind QFs.
B. ENFORCEMENT ACTION AGAINST TIIE IPUC
Section 210(hX2XA) of PURPA permits the Commission to initiate aur enforcement
action against a State for failure to properly implement that statute. The Franklin Energy Storage
Facilities respectfully request the Commission initiate an action to enforce PURPA against the
IPUC to invalidate and permanently enjoin all conditions imposed on energy storage QFs that
prevent them from entitlement to the IPUC's standard long term avoided cost rates available to
non-wind and non-solar QFs.
Respectfu lly submitted,
/s/ Peter Richardson
Peter Richardson, ISB ll3l95
Franklin Energy Storage Facilities
515 N. 27th Street
Boise, tdaho 83702
(208) e38-7901 '
oeter(D.ri chard so n a d a m s. com
Dated this l4th day of December 2017
Franklin Energy Storage Facilities
Petition for Declaratory Ruling
Petition fbr Enforcement
t0
Case 1-:18-cv-00236-REB Document 4-2 Filed 06/2511-8 Page 1 of 1
162 FERC fl 61,110
TINITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Franklin Energy Storage One, LLC
Franklin Energy Storage Two, LLC
Franklin Energy Storage Three, LLC
Franklin Energy Storage Four, LLC
Docket Nos. EL18-50-000
QFlT-s81-001
QFlT-s82-001
QF17-s83-002
QF17-584-001
NOTICE OF INTENT NOT TO ACT
(February 15,2018)
1 . On Decemb er 14, 2017 , Franklin Energy Storage One, LLC, Franklin Energy
Storage Two, LLC, Franklin Energy Storage Three, LLC, and Franklin Energy Storage
Four, LLC (Petitioners) filed a petition for enforcement against the Idaho Public Utilities
Commission (Idaho Commission) pursuant to section 210(hX2XB) of the Public Utility
Regulatory Policies Act of 1978 (PURPA).I Petitioners claim that the Idaho Commission
violated Commission regulations in classifying their energy storage qualifying facilities
(QFs) as solar QFs, and that this classification prevents them from being eligible for the
Idaho Commission's published rate, available to non-wind and non-solar QFs of 10 MWs
average capacity or less.
2. Notice is hereby given that the Commission declines to initiate an enforcement
action pursuant to section 210(hX2)(A) of PURPA.2 Our decision not to initiate an
enforcement action means that Petitioners may themselves bring an enforcement action
against the ldaho Commission in the appropriate court.3
By direction of the Commission.
Kimberly D. Bose,
Secretary.
' l6 u.s.c. g 82aa-3(hX2XB) (2012).
2 16 u.s.c. g 82aa-3(hX2XA) (2012).
3 l6 u.s.c. g 82aa-3(h)(2xB) (2012).
$ 2e2.304 natepgFFuldl&-ey.;SE3fr.BE&.sCIocument 4-3 Filed 06/25118 Page \ ol 4
Code of Federal Regulations
Title rB. Conservation of Power and Water Resources
Chapter L Federal Energy Regulatory Commission, Department of Energy
Subchapter K. Regulations Under the Public Utility Regulatory Policies Act of 1978
Part2gz. Regulations Under Sections zor and zro of the Public Utility Regulatory Policies Act of 1978
with Regard to Small Power Production and Cogeneration. (Refs & Annos)
Subpart C. Arrangements Between Electric Utilities and Qualifoing Cogeneration and Small Power
Production Facilities Under Section zro of the Public Utility Regulatory Policies Act of rg78 (Refs
&Annos)
18 C.F.R. S z9z.Zo4
$ z9z.3o4 Rates for purchases.
Currentness
(a) Rates for purchases.
(l) Rates for purchases shall:
(i) Be just and reasonable to the electric consumer of the electric utility and in the public interest; and
(2) Nothing in this subpart requires any electric utility to pay more than the avoided costs for purchases
(b) Relationship to avoided costs
(l) For purposes of this paragraph, "new capacity" means any purchase from capacity of a qualifying facility,
construction of which was commenced on or after November 9. 1978.
(2) Subject to paragraph (b)(3) of this section, a rate for purchases satislles the requirements of paragraph (a) of
this section ifthe rate equals the avoided costs determined after consideration ofthe factors set forth in paragraph
(e) ofthis section
(3) A rate for purchases (other than from new capacity) may be less than the avoided cost ifthe State regulatory
authority (with respect to any electric utility over which it has ratemaking authority) or the nonregulated electric
utility determines that a lower rate is consistent with paragraph (a) of this section, and is sufficient to encourage
cogeneration and small power production.
WS$[L&W tO 2018 l'homsr:n Reut*rs. No claim to original iJ.$. Gr:ve rnment Works
(ii) Not discriminate against qualifying cogeneration and small power production facilities.
s 2s2.304 natekFpuld*&-ev.-ffiE3fr.8E&.rfilocument 4-3 Filed 06/2511-8 Page 2 ol 4
(4) Rates for purchases from new capacity shall be in accordance with paragraph (b)(2) of this section, regardless
of whether the electric utility making such purchases is simultaneously making sales to the qualifying facility.
(5) In the case in which the rates for purchases are based upon estimates of avoided costs over the specific term of
the contract or other legally enforceable obligation, the rates for such purchases do not violate this subpart if the
rates for such purchases differ from avoided costs at the time of delivery.
(c) Standard rates for purchases.
(1) There shall be put into effect (with respect to each electric utility) standard rates for purchases from qualifying
facilities with a design capacity of 100 kilowatts or less.
(2) There may be put into effect standard rates for purchases from qualifying facilities with a design capacity of
more than 100 kilowatts.
(3) The standard rates for purchases under this paragraph
(i) Shall be consistent with paragraphs (a) and (e) of this section; and
(ii) May differentiate among qualifying facilities using various technologies on the basis of the supply characteristics
of the different technologies.
(d) Purchases "as available" or pursuant to a legally enforceable obligation. Each qualifying facility shall have the option
either:
(l) To provide energy as the qualifying facility determines such energy to be available for such purchases, in which
case the rates for such purchases shall be based on the purchasing utility's avoided costs calculated at the time of
delivery; or
(2) To provide energy or capacity pursuant to a legally enforceable obligation for the delivery ofenergy or capacity
over a specified term, in which case the rates for such purchases shall, at the option of the qualifying facility exercised
prior to the beginning of the specified term, be based on either:
(i) The avoided costs calculated at the time of delivery; or
(ii) The avoided costs calculated at the time the obligation is incurred.
(e) Factors affecting rates for purchases. In determining avoided costs, the following factors shall, to the extent
practicable, be taken into account:
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g 2s?.r04 natefdFpuldg"Q.gv.;W'3fr.BE&.ilocument 4-3 Filed 06/25118 Page 3 of 4
(l) The data provided pursuant to $292.302(b), (c), or (d), including State review ofany such data;
(2) The availability ofcapacity or energy from a qualifying facility during the system daily and seasonal peak periods,
including:
(i) The ability of the utility to dispatch the qualifying facility;
(ii) The expected or demonstrated reliability of the qualifying facility;
(iii) The terms of any contract or other legally enforceable obligation, including the duration of the obligation,
termination notice requirement and sanctions for non-compliance;
(iv) The extent to which scheduled outages of the qualifying facility can be usefully coordinated with scheduled
outages of the utility's facilities;
(v) The usefulness of energy and capacity supplied from a qualifying facility during system emergencies, including
its ability to separate its load from its generation;
(vi) The individual and aggregate value of energy and capacity from qualifying facilities on the electric utility's
system; and
(vii) The smaller capacity increments and the shorter lead times available with additions of capacity from qualifying
facilities; and
(3) The relationship ofthe availability ofenergy or capacity from the qualifying facility as derived in paragraph (e)
(2) of this section, to the ability of the electric utility to avoid costs, including the deferral of capacity additions and
the reduction offossil fuel use; and
(4) The costs or savings resulting from variations in line losses from those that would have existed in the absence
of purchases from a qualifying facility, if the purchasing electric utility generated an equivalent amount of energy
itself or purchased an equivalent amount of electric energy or capacity.
(l) Periods during which purchases not required.
(1) Any electric utility which gives notice pursuant to paragraph (f)(2) of this section will not be required to purchase
electric energy or capacity during any period during which, due to operational circumstances, purchases from
qualifying facilities will result in costs greater than those which the utility would incur if it did not make such
purchases, but instead generated an equivalent amount ofenergy itself.
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s 2e2.304 nategrgF6ufldlg-gv.;SE?fr.8E&.:&ocument 4-3 Filed 06/25118 Page 4 ot 4
(2) Any electric utility seeking to invoke paragraph (f)(l) of this section must notify, in accordance with applicable
State law or regulation, each affected qualifying facility in time for the qualifying facility to cease the delivery of
energy or capacity to the electric utility.
(3) Any electric utility which fails to comply with the provisions of paragraph (f)(2) of this section will be required
to pay the same rate for such purchase of energy or capacity as would be required had the period described in
paragraph (0( I ) of this section not occurred.
(4) A claim by an electric utility that such a period has occurred or will occur is subject to such verification by its
State regulatory authority as the State regulatory authority determines necessary or appropriate, either before or
after the occurrence.
SOURCE: 44 FR 65746, Nov. 15, 1979;45 FR 12234, Feb. 25, 1980; 50 FR 40358, Oct. 3, 1985; 52 FR 5280, Feb. 20,
1987;52 FR 28467, July 30, 1987; 53 FR 15381, Apil29,1988;53 FR 27002, July 18, 1988; 53 FP.40724, Oct. 18, 1988;
57 FR21734,May 22,1992:60 FR 4856, Jan.25,1995, unless otherwise noted.
AUTHORITY: l6 U.S.C. 79la-825r, 2601-2645; 3l U.S.C. 9701; 42 U.S.C. 7l0l-7352.; Public Utility Regulatory
Policies Act of 1978,16 U.S.C. 2601et seq., Energy Supply and Environmental Coordination Act, l5 U.S.C. 791 et
seq. Federal Power Act, 16 U.S.C. 792 et seq., Department of Energy Organization Act, 42 U.S.C. 7l0l et seq., E.O.
12009,42 FR 46267 .
Notes of Decisions (122)
Current through June 15,2018; 83 FR 28150.
Ir.nd sf l)tcurrtrnt ,(,lr 2018'I'hornson l{culels. No claiur to oriqinal t.j.S. Ciovern:lcnt Works.
lrySfiTl-*W O 2018 Thomson Reuters. Na *laim to original U.S. Government Works 4
Case 1:1.8-cv-00236-REB Document 4-4 Filed 06/25i L8 Page 1 of .,X,.. o' rtrc sccrcrcry
Scrvicr. Dute
August 20.3015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITION TO MODIFY
TERMS AND CONDITIONS OF PURPA
PT"]RCIIASE AGREEMENTS
CASE NO. IPC.E.Is.OI
IN THE MATTER OT'AVISTA
CORPORATION'S PETITION TO MODIFY
TERMS AND CONDITIONS OT'PI.]RPA
PURCHASE AGREEMENTS
CASE NO. AVU.E.T5.OI
IN THE MATTER OT ROCKY MOUNTAIN
POWER COMPANY'S PETITION TO
MODIFY TERMS AND CONDITIONS OF
PURPA PURCHASE A GREBMENTS
CASE NO. PAC,E.Is.O3
0RDER NO. 33357
On January 30,2015, ldaho Power Conrpany tlled a Petition asking the Cornmission
to rnodify the length of prospective contracts under the Public Utility Regulatory Policies Act
(PURPA). Specifically, the Company asked that the length of its new PURPA contracts f<rr
projects that exceed the publishecl rate eligibility cr,p' be reducecl fronr 20 years to two years.
Avista Corporation and Rocky Mountain Power filed similar petitions and thc three cases were
consolidated into a single procceding. Order No. 33250. The Clomrnission granted tenlporary
relief to the threc petitioning utilities by reducing the length of PURPA contracts to five years
while the Commission investigated the issue of contract length. Order Nos. 33222, 33250.
33253 (clarifying that interirn relief applies only to new PURPA contracts that cxceetl the
puhlished ratc eligibility cap), 33286 (denying petition to lirnit interim relief to only wind and
solar PURPA contracts).
'fhe Commission received almost 200 written conlmcnts lrom the public. The
Commission held two public hearings and a two-day technical hearing. S'ee Order No. 33253.
Alier the record closed, the Commission received fclur tirnely petitions for intervenor funding.
The matter being fully submittcd, thc Commission issues this Order reducing the length of IRP-
based conlracts fr0m 20 years to two years.
lThe"publishedratc"anrlpublisheclratecligibilitycaparccxplainccl infrainthcBackgroundScctionl.B.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
ORDER NO. 33357
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 2 of 34
I. I}ACK(;ROTJIYI)
A, The Portics
'l'hc lirllou,ing partics pctitioncd fbr and u'crc grantcd intcrvcntion:
J.R. Sirnplot Company
Idaho Conservation League
lntermountain [nergy Partners (lEP)
Snake River Alliance (SRA)
'frvin Falls Canal Cornpanv. North Sicle Canal Company. ancl
American Falls Rescrvoir District No. 2 (collcctively, thc Canals)
Idaho Irrigation Pumpers Association, Inc. (IIPA)
C' learrvaler Paper Clorporal i on
ILerrewable Hnergy Coalition (RECI)
Amalgarnated S ugar Company
Micron l"echnology, lnc.
Sierra Club
AgPower DCD. t.l.C and AgPou,er.lcrome. LLC
Iicoplcxus. Irrc.2
B, I'URPA
Congress cnactcd PtIRPA in I978 in rcsponsc l.o a national cnergy crisis. "[ts purposc
was to lcsscn thc country''s depcnc'lence on lorcign oil and to cncourage the promotion and
developr:rcnt ol'renewable energy technologies as alternatives to lbssil lirels." Order No. 32580
at 3, ciring FER() r', ,{4,s.ri.r^rr7ryi.456 Lj.S. 742. 745-46 (1982). lJnder the Act, the Federal
Ilnergy Regulatory Clommission (FIiRC) prcscribcs rr.rles lbr PURPA's implernentation. 16
U.S.C. r\ 824a-3(a), (b). Statc rcgulatory authoritics such as the Idahri Public Utilities
Commission implement I'-ERC regulations. but have "discretion in dctermining the manner in
which the rules will be intplemented," Idaho l'ower Co. t,. lelaho l'U(;,155 Idaho 780,782,316
P.3d I 278, | 280 (201 3), citing I;ERC v. !14is,vi,s:;iltpi, 456 LJ.S. al 75 I .
'l-o cncourage the clcvclopment ol'renc'uvablc l'acilities, PURI)A requircs that elcctric
utilities purchase the porver produced by designatcd qualifying facilitics (QFs). "This mandatory
purchase rccluircment is ollen rel'crrcd to as thc 'nrust purchasc' provisior'r ol'PtlRPA." Ordcr
No. 32697 at 7;16 l.J.S.Cl. $ 82aa-3(b); l8 C.F.R. $ 292.303(a) (exceptions to the "must
purchase" provision inapplicable in this case). l]lectric utilities are required to purchase power
iiom Qlrs at ratcs cquivalcnt to a utility's avoidcd cost and approvcd by this Commission. l6
r Ecoplexus lilcci its Petition to lntcrvcne a month and a hallaltcr thc deadlinc for intervcntion. 'lhe Conrrnission
granted llcoplcrus linritcd intcrvcntion in Ordcr No. il3l l.
2ORDER NO. 33357
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 3 of 34
U.S.C. r\ 824a-.i: Iclaho I'ov,er. I55 Idaho at 789. 316 P.3d at 1287. I'he purchase or "avoided
cost" ratc represents thc "'incrcmcntal cost'to the purchasing utility of porvcr which, but tbr the
purchase ol' power fronr the Ql:. such utility would either generate itself or purchase l'rom
anotlrcr source." Order No. 32580 al 3" c'iting Ro:;ehud Entcrprises v. Iduho /'{/Cl. 128 ldaho
624.917 l>.2d 781 (lc)96); ltt C.f.R. t\ 292.101(bX6). "l'hc avoidcd cost ratc musl tre "iust and
reasonable to the electric consurl'lers . . . and in the public intercst" and "shall not discriminate
against 1QFsl." l6 U.S.C. rc 824a-3(b): l8 C.lj.l{. rs 292.304. 'l-he Idaho Supreme Court has
observed that the Comrnission has the authority to implcnrent PURPA ancl that this grant of
autlrorit-v-isbroad. lcluhol'ov'ct'.155 Idahoal787,3l6P.3datl285; Rosebucl,l28 ldahoat627.
917 l'.2d at 784: il.ll". Brovn v. Icluho Potru Oonrptrny,,l2l Idaho 812, 814, 828 P.2d 841. 843
( l 9e2).
'[his Cornmission has established t\\,o methods of calculating avoided cost, depending
on the size of the QIr project: (l ) the surrogatc avoided resolrrce (SAR) n)ethodolog1,, and (2)
the integrated resource plan (lltl') nrethodology. S'ec Order No. 32697 at 7-8, The Commission
uses the SAR methodology to establish what is commonly rel'erred to as "published" or standard
avoidcd cost ratcs. ft/.; l8 C.lj.R. $ 292.304(c). Published rates are available for r,r'irrd and solar
QFs rvith a design capacity of up to 100 kilorvatts (kW). and ftrr QFs ol'all other resource types
with a dcsign capacitl, ol'up to l0 avcrage megawatts (aN,lW). Ordcr No. i2697 at 7-8. For QFs
with desigr: capacity abor,'e tlre publishcd ratc e ligibility caps, avoided cost rates are
'"individually rregotiated bv the QI; and the utilily" using thc llll'}mcthodology based on the
spccilic characteristics of the resource. Order Nos. 32697 at 21 32176 al l.
C. The Three I'etilions
L Idaho Power, In its Petition. Idaho Porvcr asscrtcd it has a total of I,302
mcgaw,atts (MW) o{. PLJRPA Ql: projects under contract and "an additional 885 MW of PTJRPA
solar capacity in thc qucuc activcly secking PtjRPA Energ.v Sales Agreemenls to be on-line in
2016." Application at 2, l8; Exh.2. p. I of 6. Idaho Porvcr lurthcr asserted that if all these
proposccl solar projccts comc on-linc, it u'ould represent a "long-term llrrancial obligation to
customers of approximately $2.1 billion, in addition to the cxisting $2.6 billion obligation over
the lile o1'thc Company's pro.iecls alrcady on-line and eiperational." ltl. at3. At the technioal
hearing Idaho Power clarified that the amolrnt olPtlRPr\ gcneration under conlract had declined
3ORDITR No. 3i357
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 4 of 34
tiorn I,i02 N'{W to l.l6l MW but tlrc Amount ol'ncu,solar pro.iccts in lhe queue had increased
li'onr 885 l\4W to 1,316 !1W. Exh. ll. p..l of 4.
Given thc possibilitl' tor largc anrounts of additional I'}LJRPA generation, Idaho Porvcr
contcndcd that it is reaching a point at rvhich the capacitl, ol'the proposcd PIJRPT\ projects rvill
excced tlre Companv's operational rreeds. Itl. at 20. It asscrtcd that this influx of I'URI'A
generation is unnecessary given the Company's current surplus ol' generating capacitl, (aka
capacity sr.uplus) to 2021.r 'l'hc Company maintained that contilrualion of 20-year: I'}l.iRPA
contracls "places undue risk on customers at a tinte rvlten Idaho Power has sulllcient resources to
mcet customer demands." Icl. at 2. According to ldaho Powcr, if it continucs to acquirc large
anroLurts olunneeded. intenniltent PURPA generatiorl, it will increase its power supply costs and
dcgradc its systern rcliability. Id. at20-27.
The Company asserted that its must-takc PI,IRPA gcncration ol46l MW of solarand
r1'rust-runhydrorvoulclcxcccditstotal systemkradbyaboutS3%ol'all hours. ld.at26. Adding
thc proposcd 885 ivlW ol additional solar rvould exceed load by about 40% in all hours. /r/
Idaho Por.ver concluded that its continued obligation to acquirc large anlourlts ol' PURPA
gcncration undcr PtiRPA's must purchasc provision rvithout considcring thc Conrpany's nced
lirr additional supply is unreasonalrle ancl contrary to the public interest. ld. at27-34.
2. I{ocky Mountain. On March 2,1015, Rocky Mountain liled its Petition secking a
reduction in the length ol' its P(JRPA ceintracts. Rocky Mountain requested a pennanent
rcduction in its I'}tJIIPA contracts tionr 20 years to three ycars "to be consistent with the
Company's heclging and trading policies and practices fbr non-PIJRPA energv contracts and [to
bel morc aligrred with the ftr.vo-ycarl Intcgratcd Rcsourcc I)lan ("lRP")cycle." ld. al3-4. Rocky
Mountain asscrted that it experienced a significant increase in proposed PURPA projects in the
rvakc of'Idaho Polver's Petition. Pctition at 2. 'l'hcsc ncw rcqucsts combined with the largc
nunrbcr of alrcady cxccuted contracts and proposed contracls prornpted Rocky Mour,tain to file
its Petition. l-ike ldaho Ilorver, Rocky Mountain asserted that it has no nccd lbr generating
rcsourccs in the next decade. Id. at3.
Itocky Mountain clairned that rvithin livc days ol'thc Cornmission granting interirn
relicl'to ldaho Porvcr, Ilocky Mountain received lbur requests for PIJRPA pricing totaling 130
' nt the hearing, the Conrpany extended its capacity surplus estimate to 2024 based upon its 2015 Integratcd
llesource Plan (ll{P). 'l'r. at 281 ', .te c ol}-o Case No. IPC-l:- I 5- 19.
40RDER NO. 33357
Case 1:18-cv-00236-REB Document 4-4 Filed 06/2511-8 Page 5 of 34
MW "from QF developers who are located in ldaho Powcr's scrvice territory but are now'
planning to obtain a transnrission rvheel to PaciliCorp in order to secure a ntore favorable 20-
)-'car contract rvith ['acitiCorpl." Id.at 4-5. With the addition ol'the fbur ncrv projects, Itockl'
Mountain reported that it has 275.5 MW in proposed PTJRPA proiects seeking Idaho contracts. in
addition to the 189.6 MW of pro.iccts alrcady' approved by,' this Commission in ldaho. Thus, the
Conrpany has a total ol'465.1 lv'lw of existing and proposed PURPA contracts in ldaho. "This
amount. at lirll nanreplate capacitl,, rvould be enough to supply 108% ol'PaciliCorp's avcrage
Iclaho rctail load in 2014. and 275% ol'PaciliCorp's minirnum Idaho retail load in2014." ld. at
5.r Iclaho's allocatecl share of l)acifiCorp's cxccutcci l'}tJI{PA conlracts over thc ncxt ten years is
$ I 56 rnillion. or about $ 15.6 rnillion per yc&r. lel. at 21.
ln addition 1o rcducing the length of its t'}l.JI{PA contracts. Rocky Mountain requested
autheirity to modily its indicative (or incrernental) pricing practice tei rellcct "all active QF
projects in the pricing queuc ahcad of any ncwly proposecl QF' project that recluests indicative
avoided c<rst rates." Icl. al 4. More specifically, the Company seeks relief fiom a prior
Conrmission Order that required indicative rtrtes be upclated bascd upon "signed QIr contracts."
Itl. at 32,35 (emphasis original). citing Order No. 32697 ar 22. Rocky Mountain asserted that
this requircment and the drarnatic increase in the number of proposed QF projects results in
indicative pricirrg that docs not retlect the most accuratc and up-to-datc avoidcd cost ratcs. I f its
indicative pricing were rnore robust, the Cornpany maintained that its avoided cost rates rvould
bc $18 pcr MW hour (MWh) lcss on a Z0-year levclized basis. /r/. at 37.
3. Avista. Avista filed its Petition seeking relief on February 27, 2015, requesting
the same interim and tinal rclief' that the Conimission providcs to Idaho Power or ltocky
Mountain. Petition at 1. Avista observed that the Conrmission granted Idaho Porver interim
relief by limiting nerv I'tJItl'}A contracts to five years during thc pcndcncy of its irrvcstigation.
Order No. 33222. Avista expressecl conccrn that without bcing allorded similar relief to the
other truvo utilities. PI..lRI'}A developers "nray seek to sell such output to Avista." Petition at 3.
D. Grantirtg Interim Relief
A{ler revierving Idaho Poweros Petition, the Commission found that there was
substantial evidence to grant the Company interim relicf whilethe Commission initiatcd a fbrmal
'' PacitiCorp rnainrained that its averagc ldaho retail load in 2014 rvas 432 MW and the minimunr ldaho retail load
was 169 MW. Petition at 5 n.6.
5ORDI]R NO. J3357
Case L:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 6 of 34
investigation into the issuc of contract lcngth. Order No. 33222 at 4. More specifically. thc
Conunission directed that lRP-hasecl contracts be limited to live years in leugth until the
Commission complctcs its l-ornral invcstigation. Even belbre Iclaho Por.ver tiled its Petition. thc
Cornrnission expressed concern that in "lcss than lbur months' time. l3 Q[s have contracted
rvith ldaho Power tbr ncarly' "t00 I\,IW of solar generation - all cxpectcd to be on-linc and
proclucirrg pow'er b1,the end o1'2016."s Ortier No. 33222 at3. quoting Orcler No. 33209 at 7.
Tlrc Commission also noteel r.vithin seven days of ldaho Pow,er's Petition, the Comnrission had
received lour petitions to intervcne and one of the prospective intervenors had already filed
discovery. Order No. 33222 at 4. -fhe Commission fbund that thc inllux of numcrous "PURPA
contrficts could significantly and detrirnentally impact customer rates and system reliability
hcforc this mattcr is lirlly rcsolvcd." /r/. Conscqucntly, the Comrnission fbund that interirn relicl'
limiting the length of |RP-based contracts pending resolution of thc invcstigation is rvarrantcd.
"['l']his intcrim mcasure will errablc thc Clomrnission to address the PUII.PA implemerrtation
issues raiscd in this case. without having to simultaneously manage a continucd tide of ncw
PIJIIPA cases." /r/.
After Rocky Mourntain and r\vista tiled their Petitions, thc Comrnissiorr also granted
interinr reliel to the two utilities. C-'onsistent rvith its prior Ordcr Nos. 33222 and 33250, the
Comrnission founcl thcre r.vas substantial evidence to grant interim relief to the utilities for all
IItl'}-based pro-iects rvhile the Commission invcstigatecl the issue ol'contract length. Order No.
33253. The Commission ordcrcd that thc thrcc I'}etitions be consolidated into a single proceeding
and set a cleaclline lbr intervention ol'March 27,2015. Order No. 33250 at 8. The inlormal
prehcaring conference in the consoliclatcd casc was hcld on March 10.2015. At thc prehearirrg
cont-crcnce, the parties developed a schedule tbr processing the consolidated proceeding and
discusscd tn'o pctitions to clarify the scope ol'thc casc (scc ncxl Section). In Order No.33253,
the Cornmission adopted the procedural schedule recommended by the parties and set the
tcchnical hearing lbr June 29.2015.
E. The Th'o Petitiotts to Clarify the Scope of the Cose
L SAIT vs. IIIP Contracts. In F'ebruary 2015, Intenrrountain Energy Partners (lEP)
and Renervable Energy Coalition (R[Cl) each filcd petitions sccking clarification rcgarding thc
scope ol'this docket. Briel)y, IIIP and RI1C sought to clarify whether the proposed reduction in
t'l'he l3 projects rverc proposed byjust three developers.
oRDltR NO. 33357 6
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25i18 Page 7 of 34
contract length is linritcd to thosc nerv QF projects that excecd thc publishcd rate eligibility cap
(i.c.. IRP-bascd rncthodology pro.iects), At the prehearing conl'erence on March 10.2015, the
trrartics to thc case gencrally agrccd thc Conrr-nission should clarily its Order No. 33222 tcr
indicate that interim relicl'of thc livc-y'ear contract should apply onl,v to new PURPA IRP-based
contracts not SAR-bascd published rate contracls. In Order No. .13253. the Conrn,ission agreed
and clarificd that the scope ol'this proceeding addressed only the length of lRP-based PURPA
contracts. Order No. 33253 at 4.
2. I-imitation to Wind/Solar Contracts On Februarl, 25, 2015. Clcarwatcr Paper and
J.ll. Sirnplot Cornpany tjlcd a joint petition to also clarity' the scopc ol'interim rclie f granted to
ldaho Poucr in Order Ncl. 33?22, and to limit the scope of the requcstcd permanent rclief. In
their pctiti<>n, Clcarwater and Simplot sought to limit thc interim rcliel ol'live-year PURPA
contracts to only nerv "intennittcnt (solar and rvind powcred) pro.iects." .loint Petition at 4.
Idaho l)or.vcr. Rocky Mountain and Comrnission Stall'opposcd the clarillcation proposecl by
Clearrvatcr and Simplot.
ln Order No. 332tt6. thc Comnrission l'ound no basis at this early stage ol' the
procccding to rcstrict thc intcrim relief granted to the three utilitics to "only wind and solar
intcrmittent" resources. 'l'he Comnrission observcd that thc procedural schedule lor the
invcstigation is "cxpcditious cnough" and that Clcarwatcr and Simplot agreed to the expeditcd
schedulc. Orcler No. 33286 at 5.
II. PtJI}I,IC COMMIINTS
'['he Commission rcceived nearly 200 rvritten commcnts in this consolidatcd casc. Of
those. roughly 30 comnrcnts supporlcd the petitions to shorten the PlJItl'A conlract length, and
thc rcst opposed. At the public hearings. thc Commission hcard from 2l rvilncsses, all of whom
opposcd thc pctitions. 'l"hese conrmcnts are discusscd below.
A. Supportfor Petitions
'l'hose comnrenting in lavor of shoncncd PURPA contracts included a number of
conrpanies that arc largc consunrers o1' electric power. Thosc companics citcd an intcrcst in
keeping po,wcr costs lorv and lair, ancl ensuring rcliable service. Several of the companies
conrmented that thc utility should neit "be rcquired to buy electricity it does not nced." A number
ol' Idaho school districts ancl comrnunity colleges also supportcd the petitions, noting the
7ORDIIT N(). 3:i157
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 8 of 34
importance of "maintaining lor.v opcrationa[ costs." antl suppo(ing "a balanced approach" to
cncouraging w'ind and solar power.
Scvcral large and small rnunicipalitics and l]oisc Clounty also supported tlre petitions.
'l'hese cntities noted the importance ol'power reliabilitl,' and altordabilityl some expressed that
the utilitics' requested relief rvas reasonable and balanced. These comnlents w,ere cchocd by a
number ol'business development organizations and local charnbers of commcrce, which also
cxprcsscd that thc rcqucsted rclicf rvas good lbr developnrent.
I.inally, a handtul of individuals supported the petitions. -lhcse individuals listed
concerns lbr porvcr rcliahility ancl maintaining low consllmer elcctricity ratcs. Sorne expressecl
that thc requested relielrvas "best for ratepayers" or in the "best intcrcsts of Idaho."
B. Oppositiott lo Petitions
The City ol Ketchum. the l.cague ol Wonren Voters, ancl a numhcr of organiz.ations
trled contnlcnts opposing the pctitions. 'l'lrese entitics cited the nced to promote renewable
energy and distribulccl generation. and claimed that thc rcquestcd pennanent relief would
clirninate solar devclopnrcnt in ldaho. Kctchurn also expressed concern that shortening PIJRPA
contracts would climinatc community solar projccts. Lahren [rinancial commcnted that
shortening PLlltPA contracts as proposed by the utilities rvould impact its ability 1o invest in
Idaho. Idaho Smart Grow,th asked that the utilitics bc rcquircd "to do all they can to continue to
shilt their powcr purchasing to rcnewable sources. and . . . to encourage them to embrace new
models ol'clcan cncrgy productiot't and distributed power."
A number ol renervable energy dcvelopers also commented that shortening PURPA
contracts *'ould nrakc it cxtrenrcl,v difticult. i1'not impossible, fbr thcm to obtain thc Iinancing
needed to develop their projects. Two devclopcrs proposcd adopting an alternative to shoficning
20-year PLJRPA contracts. -l'lrcy suggestcd thc Conrrnission rnaintain 20-year contracts, but
allorv the cncrgy ratc conrponcnt of the contract to be ad.iustcd annually altcr thc first ten years of
thc contract. l)ristine Sun arrd Renervable Northwest Commcnts.
Finally, morc than 130 individuals serrt writtcn commcnts opposing tlrc petitions, and
2l individuals opposcd the petitions at public hearing. Most o[ theise comments and public
rvitnesses expressed thc nced to tbstcr solar porvcr development or "keep solar [dcvelopment]
viable." Many comments expressed the necel to move a$,ay fionl coal and other fossil fuels
toward clcan cncrgy. Several public rvitncsscs notcd tlrat ratcpaycrs rvere required to pay tbr the
8OltD[R NO. 3i357
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 9 of 34
costs ol transmission lines for 20 or rnorc years, so recluiring 20-year contracts lbr solar porver is
"only lair." A number olcomments asked that the Comrnission "do r.vhat's right" for the future.
And sonre commcnts cxpressed that r"rtilities lrave not shorvn the nced lbr their requested reliel'
except lo cnsure the utilities increasing protits.
Conmtissiort l)iscussion'. l'l're Cornnrission apprcciates thc consiclcrablc tinre arid
cxpense that participants dcdicated to testifying in the public lrearings. and the thoughtfulness
evidcnt in so nranv of the oral and rvrittcn comrncnts. 'l'lre Comnrission recogniz-es that a large
numbcr ol' the public commenters encouragcd the development of more solar and other
rcneu,able cnergy resoLlrccs. Many ol'tlresc sarne individuals also rvantcd the use ol'coal to be
phased out. Finally. thcre were many concerns about retaining low ancl reasonable customer
ratcs.
In direct response to the public conccrns. wc note that I'URPA is not the only avenuc
to devclop renervable resourccs. As Dr, Don [teading lestified at our technical hearing, utilities
have and will probably continue to develop non-PURPA rcncrvablc rcsources in the tuture
through a variely of nreans. l'r. at 868-70. Indecd, as several rvitnesses pointed out in our
hearing. thc utilities havc devcloped orpurchased lrundrcds of MW of non-PURPA renewable as
part ol- their gcneration portfolio. 'l'r. at 931. I I l, I 77-78. Iv{orcover, acquiring more renewatrles
w'hilc maintaining lon rates is consistcnt u,ith the Slate's 2012 Energy I'lan.6
III. CONTRACT LENGTH
A. Do FERC Regulations Dictote the l.engtlt of Cantrocts?
'l'he Comrnission flrst arlclrcsses whether the proposals to reduce the lRP-based
PLIRPn contracts fionr 20 ycars arc inconsistcnt with I'l,illPA or IrliRC's regulations. ICL and
Sierra Club's w'itncss Adarn Wenner testified that Idaho Pclwer's proposal to reducc the length of
contrasts to two ycars is inconsistcnt rvith cithcr fFll{C regulations or ldaho precedence fbr three
reasons. First, hc maintained that QIr contracts rvere intcnded to providc both cnergy and
capacity to thc utility. PURI'}A and I;[IRC's implementing regulations require that QFs be paid
ftrr capacity when a QF contract "enables the utility to replace rrerv capacity with QF purchases."
"l'r. at 5{13. If contracts arc linritcd to trvo years, he insisted that thc capacity a QF could provide
undcr its contract to the utility could not be ''countcd on to be available afler two years. . . ." 'fr.
" l'he Plan states that ldaho's "utilitics nced to have access to a broad variety ol'resources, bslh_ealyg$tgga|gld
lelcryablc, and nothing in this lincrgy Plan should bc read as precluding a utility lrom investing in a particular
rcsorrrcs." Section 6.2.2 at I l5 (cmphasis added).
9oRI)titt N(). 3:]357
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 10 of 34
at 587, In othcr rvorels" a utilit,v cor"tld not cancel or displacc planncd gcrrcration based on such a
short t*'o-vear conu:ritment.
Sccond, hc rnaintained thal short-lc:nn conlracts impede a QF's abilit.v to pcrfcct a
legally' entbrceable obligatiorr (l.EO). Undcr either a negotiated contract or a I.EO.7 a QF lras an
option to reccivc avoided cost ralcs either calculated at the tinre ol'ciclivery or at the time the
obligation is incurred. l8 C,f'.R. $ 292.304(dX2). He noted that in Order No.69, FERC
nrentions that a QF rnay dcsirc levclizcd payncnts (u'hcre a QI" rnay rvish to receive a greater
percentagc of the total purchasc pricc during the beginning of the obligation than at thc cnd of
the contract term), if it enters intei a "long tenn contract to proviclc energy or capacity {o a
utility." Tr. at 591 , citing 45 Fed.Reg.12,224 (Feb. 25, I980).
Irinally. Mr. Wenncr also rclied upon a l9tl4 ldaho Supremc Clourt case to support his
opinion that QFs arc entitlcd to a long-term contract. Tr. at 591-93. citing A.fton Energ.,v. Idqho
Potrer ('o. ("A./ion lllll"). 107 ldaho 781. 786, 693 P.2d 427,432 (1984). hr A.fton lilil,he
notccl that thc Suprcmc C'ourt a{llrmcd an Ordcr ol" the Commission reqr.riring Idaho Power to
enter into a 35-year contract rvith a QF.
Clearrvater and Simplot's witncss Dr. Rcading supportcd Mr. Wenncr's opinion about
the FIIRC regulations fr<lm an econontic point of vicrv. He testified that shortening the contracts
to two, threc, or livc years will inhibit thc QIr lionr rcceiving future capacity payments due to the
shortness ol the contract. 'lr. a|777-79. ICL/Sierra Club lvitness R. Thomas Beach and Snake
Rivcr Alliancc rvitness Kcrr Millcr both opposcd shortcning IIIP contracts. 'tr. at 630; 734.
'fhe three utilities and Commission Staff disputed Mr. Wenner's opinion that FIIRC
regulations dictate a long-term PLJRPA contract. In particular, thcy point to his testirnon;- where
he acknowlcdged that FEITC nrles do not specity a number of years or other time period for
PUI{PA contracts. Allphin,'l'r. at 215-16; Clenrents, 1'r. at440-41,513-15; Kalich, Tr. at 410-
l2: Wenner, Tr. at 589. Micron also argucd in closing that PURI'A does not mandate contract
length. l'r. at 988-89. Rocky Mountain Power's rvitness Paul Clernents explained that PURPA
'Ther"aretwogeneral rnethotlsbyrvhichaQFcanprovidcpowertoautilit-v: (l)byenteringintoasignedcontract
rvith a utility; or (2) pursuant to a LEO. Order No. 32974 at 13, citing l8 C.F.R. $ 292.30a(d); Power Resources
Group t,. PUC o/ Texas.422l..3d 231, 237 (5th Cir. 2005); ltlaho [>ov,er,155 ldaho at ?85, 316 P.3d at 1283.
"f ERC specifically adopted thc concept of [a LEOI to prevent utilities frorn circumventing thc 'must purchase'
PURPA provision 'merely by rcfusing to enter into a contract rvith' a qf'." Order No. 32974 al 13, quoting Power
llesetttrces,427lt.3dat238,qurting45 F'ed.Reg. 12,21{, 12,224 (Feb.25, 1980).
ORDITR n'O. 33.i57 l0
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25ll-8 Page LL of 34
gives state regulatory agencies the discretion to estahlish the key tcrnrs and conditir-rns of PURPA
contracts. Tr:. at 439-,141.
Stafl'witness Rick Sterling testil'ied that FERC regulatiorrs "are silent on [the issue o[
contract length." Tr. at 902. He turther maintained that FERC regulations only require utilities
to provide five years of data to calculate the energy component of a utility's avoided cost rates
and only ten years oi data to calculatc thc capacity conrponent of the avoided cost rates. ld. at
q0?-03, These forecasts '"are nruch less than the 20-year contract." /d. at 903.
Mr. Clements and several other witncsses also noted that the length of PURPA
contracts in Idaho has not been static. The Commission initially set contract terms for 35 years
"to match the amortization period allowed fbr similar utility-owned facilities"; later shortened
the contract length to 20 years; and shortened the contract length to tlve years in 1996 and 1997
"to align the QF contract tirreliame with the utilities' acquisition strategies." Tr. at 441-43
(footnotes omitted); (irow, Tr" at l?4-26. In 2002, the Commission raised the contract length
back to 20 years. Tr, at .143; Sterling, Tr. at 897-98. Mr. Clernents also noted that the
Washington Commission sets standard avoided cost PURPA contracts in Washington for up tc)
five years. Id. at 513.
Although Rocky Mountain recommended that the length of QF contracts be reduced
to three years to coincide with the Cornpany's hedging and planning process, Mr. Clements
explained that limiting contracts to a threc-year term
does not mean that the [Qf'] project will only have a three-year life. Rocky
Mountain Power will be required to purchase the power produced by the
project as long as PTJRPA requirements exist and the project qualifies as a QF
under PURPA. Limiting the tcrm of thc contract to three years simply means
that the price Rocky Mountain Power antl its customers will be required to
pay to the QF will be subject to adjustment every three years and be more
closely aligned with Rocky Mountain Power's current avoided cost.
Tr. at 5ll-12.
Commissiort Findings: As several parties observed, this Commission has set
dill'erent contract lengths for PURPA contracts ovcr the years. When PURPA was first
implementcd in ldaho, this Commission established a maximunr contract term of 35 years, which
it shortened to 20 years in I987. Order Nos. 21018,21630. Thc tcnn was reduced to live years
in 1996, and raised back to 20 years in 20O2. Order Nos. 26576,29029. Over the years the
Commission has considered many factors (price risk, forecasting uncertainty, financing needs,
ORDER N(). 33.3.s7 ll
Case 1:l-8-cv-00236-REB Document 4-4 Filed 06/25118 Page t2 of 34
anrortizalion, plant durability) rvhen erstahlishing contract length. Orcler No.32125. In February
2015. we granted interinr and temporary relief in thi.s mattcr, r'educing the length tbr PURPA
contracts lrorn 20 years to five years, pending tlris llnal Order. Order No. 33222 at 4,6.
As the Idaho Suprerne Court rcccntly stated in ldulto Ptxtcr Co. v. ldulut l'UC, a state
commission "has discretion in determining the manner in which the [PURPA] rules will be
implemented, and may comply by issuing regulations, by resolving disputes on a case-by-case
basis, or by other actions reasonably designed to give eff'ect to FERC's rules," 155 Idaho at 782,
316 P.3d at 1280. citing I;ERC r,. Missrssippi,456 U.S. at 751. lt "is up to the States, not
IFERC] to tletennine the specific parameters of individual QF power purchase agreements. . . ."
Id. at786,316 P.3d at 1284, quotirtl4 Power Resources Group v. PUC of Te.rus,422F.3d23l,
238 (5'h Cir. 2005).
Basecl upon our review of federal court and state Supreme Court precedent, the
testimony of the parties, PURPA, and FERC's implementing regulations, we find that PURPA
and FERC regulations do not specify a mandatory length tbr PURPA contracts. As noted above,
when PURPA was enacted, it was intended to encoLrrage the development o[ rcncwahle
resources. Order Nos. 32697, 33250, 32125. PURPA "establishes a program of cooperative
f'ederalism that allows the States, within linrits established by f'ederal minimunr standards, tn
enact and aclminister their own regulatory programs, structured to meet their own particular
needs." lduln Povver,l55 ldaho at 782,316 P.3d at 1280, t'iting I;ERC v Mississippi,456 U.S.
at 7 67 . Even Mr. Wenner acknowledged that FERC regulations do not dictate a specific number
of years or establish a time period tbr PURPA contracts. Tr. at 589. It is not contested that
PURPA, and its implernenting regulations, are silent as to a specific contract length. Mr.
Wenner's reliance on the AJion I/lll case is misplaced. As our Supreme Court noted in the flrst
sentence of its opinion, the basic issue presented in Afton I/lll is whether the Conrmission "has
authority to orcler an elec(ric utility to purchase power fiom a [QF] for a lixed term according to
avoided cost rates previously approved by the Commission." A.fiort I/lll, lO7 Idaho at 782,693
P.?d dt 4?8. Consequently, we find the issue of contract length is left to this Commission's
discretion. Sea A.ftrn l/lll,107 ldaho at 785-86,693 P.2d at 431-32', Idulw Pow'er,l55 ldaho at
78?, 316 P.3d at 1280.
oRDER NO. 333.s7 t2
Case 1:18-cv-00236-REB Document 4-4 Filed 06/2511-8 Page 13 of 34
B, Are 20-Yeur Controcts Reasonable?
'l'hc three utilities and Cornnrission Stail'generally asscrt that 2O-year contralcts are no
longer appropriate and should bc "shortcncd. 'l'hcir witnesses ot'ler several rea.sons to discontinuc
the 20-vear contracts. Cleanvater. Simplot. ICL. SRA and other partics urge the Commission to
retain 2O-ycar contracts. As an alternativc 1o reducing the length ol' the 20-year contract.
Clleanvater/Simplot and ICL recommend the Commission consider "modifying" the 20-year IRP-
based, fixed-ratc contract by aeilr.rsting the errergy component of the avoidecl cclst ratcs aller thc
tlrst ten years. Wc cxplore those issues in greater detail below.
l. Idalro Power. ldaho Porver's Scnior Vice Prcsidcrlt. Lisa (irorv. laid out several
reasons why the Cornpany believes that 20-ycar llxcd-ratc contracts are no longer reasonatrlc.
l:irst. shc assertcd it was unreasonable lbr the Company to enter into long-term, fixcd-rate
contracts whcn thc Ccxrpany does nol need additional gcneration. Tr. at ll7, II9. Shc rcportcd
that the Clompany's peak-loacl firr its systcm in 2014 was about 3,l84 MW. while its minimum
loud u.'as approximately 1,073 MW. 'l'r. al 107-0t1. In comparison, she noted that the
Companv's llxhibit 2 showeel that Idaho Porver hacl 1,2978 MW of renewable, namcplate energy
(both PURPA and non-PURPA) on its systcm or undcr contracl. cxcluding thc Company's I7
hyclroelectric facilities.e Tr. at I09. This rcnewable generation consists of:
728 MW of wind (including l0l of non-PtJltPA wind)
320 MW of solar under contractl(,
35 IUW of'non-PIIRPA geothcrrnal
214 MW ol'PtlRPA hydro and othcr rcnewablc
1,297 Iv{W renewable (nameplatc capacity)
'l'r. at I I I, 177: Hxh. I l. p. 2. 'l'hus. lclalro f)orver's PtJRI'}A and non-PtJRPA rcnovablc
resources can be used to nreel about 40Yo t>l' its 2014 systern peak-load and uscd to mcet about
l7A% of its 2014 nrininrurn s1,'stem load.
Idaho Power witncss Randy Allphin asscrted that the Cornpany has no need for
additional generation "in the near ternr." 'l'r. at 206. IIe initially testified that the Company's
recently released draft of its 2015 Intcgratcd Resource Plan shows that the Cornpany has a
' This tlgure is corrected to shorv the rcrnovirl ol' 14l MW of approved solar contracts that were subsequently
terminated tbr failing to post their required security deposits. "l'r. at 376; sce Exh. I I, p. 2.
" The Company's hydroelectric facilities total rnore than 1,700 fuIW ol'nameplate capacity.
t'lr!.
l3ORDER NO. i3357
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page L4 of 34
capacity'surplus t'or 10 )'ears. until 2025. /c/. In his rcbuttal testinron,v. he rToted that the loss of
thc l"1l N{W o1'contracted solar generatiot"l caused the Conrpany to rellne its capacity, deliciency
cstimate to July 202"1,rr "l'r. at 281:OrderNo. i3j.1l at 2 (CaseNo, IPC-li-15-20).
When the Cotnpany has surplus capacitl.'. i( reduccs the overall avoidcd cost rates
paicl to QFs. Avoidcd cost ratcs are typically conrpriscd ol'a capacilv componcnt and an cncrgy
component. Ms. Grorv explained that if a utility lias surplus capacity at the time it ellters into an
IRI'-hased contract rvith a QIr. then the Q!'does not receive capacity payrnents untiI the utility
cxperiences a capacity'deficicncy. 'l-r. at 137. A utility's capacity status (e.g., surplus or
dcficient) is detcrnrincd in each utilily's lntcgratcd Rcsourcc Plan.
In addition to thc operating PUI{PA proiecls and those under contract, both ldaho
Powcr rvitnesscs obscrvcd at thc tinre thcy tllcd thcir direct tcstimony, that the Company had
rcccivecl proposals lbr an additiclnal 885 I\4W lrom solar developers. Tr. at l?A, 177; Exh. l-2.
At hearing. the Companl, subscquentll, increased this amount of proposed solar projccts liom
885 to 1.326 MW. Dxh. ll, p. 4 of 4. Ms. Cirorv rcpcated rhe conoerns voiced by the
Comrnission when it recently' approvcd 400 MW ol'ncw solar projects. Alicr rccognizing the
"must purchasc" provision of l'[JRI']A. she quoted fiorn thc Ordcr:
ldaho Porver's 2013 Integratecl Itesource Plarr docs no1 rellect that the
utility is in need ol-energy to reliably scrvc its customcrs. And yet, in less
than lour months time. l3 OFs havc contractcd rvithldaho Porvor lolnearl.v
400 MW of solar generation - all expected to be on-line and producing power
by'the cncl o1' 2016. I]re qrtrtbnrql 20-ycar oblisation ol' thcsc I 3 proiccts is
approximatc,ly $1.2 billion. . . . 100% of the costs of QF gencration are passed
ontoratepayers. .,,
. . . QIts continue to request contracts rvith Idaho Power in signiticant cnough
nunrbers that we remain concerned aboul the Company's ability to balance the
substantial amount of must-take intermittent generation and still reliably sene
clrstomers.
Tr. at I 2l -22 (citations ornitted) (ernphasis added).
Sccond. Ms. Grorv maintained it was unreasonable and no longer in the public
interest to maintain long-term. fixed-priced 2O-ycar contracts rvhile I'}URPA avoided cost rates
continue to decrcase. 'l'r. at ll9. On cross-examination. Mr. Allphin agrccd that the avoidcd
cost ratc lor cach new QIr will decrcasc as "oldcr" QFs add capacity to thc system. Tr. at 260-
ll See slrpra note 8
oRDrR N(). 11357 t4
Case 1:l-8-cv-00236-REB Document 4-4 Filed 06/25118 Page 15 of 34
6l : Exh, 207. h{s. Grou' also nolecl that the C-'omparny's fixhibit T shou's that from 2004 to 2024
tlre Ctrnrpanv's pou'er suprply expense increased approximatel"v 575%. Tr. a{ 129. Allorving QF
developcrs to obtain fixcd prices over thc long tcrrn causes electric rates to increase. Ivls. Crorv
pointed out that the Company's Bxhibit l0 shorvs that Idaho Power's average co$ fbr PURPA
generation since 2001 has al'uvays excecdcd the Mid-Columbia (Mid-C) index price and is
proiected to continuc to exceed the Mid-C price through ?032. Tr. at 129. Shc and Mr. Allphin
testitied that the averagc cost fbr I'}[JIll'A purchascs at $62.49 pcr M\\/h is greater tlran the
average cost of coal ($22.79lMWh). the cost of gas ($33.57lMWh), norr-PURPA purchascs
($50.64/lr4Wh). and "signilicantly greater than rvhat is being sold Ib1,the Cor:rpany] as surplus
sales at $22.41 per lv{Wh.'. iri.: Allphin.'l'r. at l9l-92. 'fhis continucd increase in net power
supplv costs advcrscly impacts ratcpay'crs bccause thcse escalating costs are passed on to
ratepayers.
'l'hird. the Contpany's witnesses argued it rnakcs little sensc to recluire 20-ycar tlxed-
rate contracts for IRP-based PTJRPA projects whcn avoided cost rates arc resct every two ycars
under the IRP mcthodology. IvIs. Cirorv noteel that the IRP methodology is updated everl'two
years to rcflcct current market conditions. customer growth. natural gas fbrecasls, and other
conditicrns. Tr. at l?7, 287. 'fhe tRP methodology is a good lit r.vith the Company's risk
managenlcnt practiccs rvhich linrit porver purchases and sales to Itl-24 months. J'r. at 127-28.
287. She explained that belbre ldaho Porver can accluire a long-term resource like a generating
unit, thcrc is a long and involved proccss lbr deternrir:ing whcthcr it is ncccssary and in thc
public intcrest lbr thc Companl,' to acquire a generating resource. Id. at 128. Typically. the
Company asscsses thc nced lbr such a rcsource; clctcrmines thc lype ol' resource necessaryl
exarnincs hclw'thc operating characteristics of the resource fit into the Conrpany's resource stack:
rcquires that the resource be accltrired through bidding and that thc Company be able to dispatch
the resource; seeks the approval ol'the Conrmission for a CPC].{; and subrnits to a public process
belbre the Commission. l'hen thcrc is a subscquent case belbre the Cornmission permits a new
gcnerating plant to bc placcd into rate base. 'l'r. at 140; Allphin, 'fr. at I q6-200, 205. Purchasing
thc output of I'}URPA proiects is not subject to these safeguards.
2. Rocky Mountain Power. Itocky Mountain Power's rvitness Paul Clcments also
recommended the Commission reduce the length of |RP-based contracts lionr 20 years. He
nraintained that PI,JRPA was intendcd to cncourage the developrnent of renervable rcsourccs at
or{DrR NO. 33357 r5
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 16 of 34
rates that: "(a) are just ancl rcasonahlc to clcctric consumers. (b) do not discriminate against QFs.
and (c) do not exceed'thc incrcnrcntal cost to the electric utility of alternative electric en€rg1,."'
'l'r. at.l35. citing l6 t.l.S.C. ss 82,1a-3(b). Ilc notcc{ tliat hoth this Ceimniission and FHI{C have
indicated tl:at the avoided cost price slructure "was to nrake ratepayers indilltrent as 1o rvhether
tlre utilitl' used rnore traditional sources ol porvcr or thc new'lv-enct'ruraged IQI;l alternatives."
'l'r. at 439. quoting, Southcrn Culi/brniu Edison L'ontputt1,,7l FEI{C'!i61.269 at p. 62.080 (1995),
ove rruled on othcr grounds. ('ulifin'nia l>U('. 133 ITHI{C 1, 61,059 (2010); Tr. at 435-37.
He rcquested that the Conrmission reduce Rocky lVlountain's lRP-based contracts
lionr 20 years to three years lbr scveral rcasons. 'l'r. at 433. l'irst. like ldaho Porver, Mr.
Clements testilied that Rocky Mountain/PacillCorp has a capacity surplus until 2028, and has no
necd lilr adtlitional gcncration unlil that tirnc. 'l'r. at 429. If all the proposed contracts were to
become opcrational. thc existing and proposed PURPA contracts would be enough to supply
l0tl(X, ol'PacitiCorp's avcrage rctail load and275oh of its nrinirnum retail load in ldaho in 2014.
Tr. at 427.
Second, Mr. Clcrnents insisted the 20-ycar, ljrcd-ratc contracts violate the rate
ncutrality standard and act as a subsidy 1o thc QF "bccause Ftjl{C generally' requires a utility to
lock irr lirrecastcd avoidc:d cost ratcs lbr thc cntirc conlract term." 'I'r. at 441.445 (Regulution.r
lntltlementing Sec'tion 210 d PURPI.45 Fcd.lleg. l2-214, 12.224 (1980)). A proposcd 20-ycar
project can obtain a "lixed-price encrgy contract at the Con:pany's pro.iected avoided cost,
without an,v economic considcrations or pricing adjustment to account lbr thc risk to utility
customcrs lrom this unusual long-tenl transaction. or to the QI; to account lbr the price certainty
the QI; enjoys fiom such a contract." Tr. at 445. Cranting a 2O-ycar contract rvith no adjustment
to thc price is something no other market participant enjoys and subjects ratepaycrs to
unreasonable price risk. 'l'r. a|446-47.
FIe explained that the Company treats QF contracts as "system resources'' and
allocates these rcsources to the six states served by I']aciliCorp. Idaho's share is approximately
6ot'o. '1"r. at.t63. I{e statcd that thc expectcd system-',vidc payrncnts to PURPA projccts overlhc
rrext ten ycars arc $2.6 billion. In 2015. this equates to QF payments o1'$170.5 million, "with
ldaho's allocatcd share at $10.2 million." 'l'r. at 463. IIthc avoidcd cost rates tbr these projects
are priced incorrectly by.iust I0%. that rvoultl create an additional impact lbr Idaho ratepayers in
2015 ol$1.0 million, and grorv to a total ol'S15.5 million over thc next l0 years. '1"r. at 463.
0RDEIT NO. ]3357 l6
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page t7 of 34
Conscqucntly, hc stalcd it r.r'irs imperative that avoidcd costs accurately retlect the Courpany's
actual avoiclccl costs during thc temr ol'the contract. Tr. at 464.
Third. Mr. Clcments explained tlrat thc Company"s proposal to rcducc thc 20-ycar
IRP-based contract is intended to match the Cornpany's risk managemcnt and hedging policies -
the Cornpany is gencrally linrited to power purchase contracts of 36 rrronths or less. Tr. at 469.
L'or non-PLIRPA contracts. the Contpany enters into purchase transactions that exceed three
years "only rvhcn the-rc is a clcarly idcntifled long-tem resourcc nced in its IRP. Long-term
resourcc nccds arc typically iclentified in thc IRP only altcr lower-cost. lorver-risk. short-lerm
resourcc opportunities are exhausted." '1"r. at 471. 'l'he Company avoids long-tenn, fixed-price
energy colltracts because they carry significant price risks. Tr, at 474-75. Shortening the
contrarct lcrnr to thrcc ycars r.r,ill nrore closely align the IRP-based contract to thc trvo-year lR[)
cycle. thc thrce-ycar lrcdging plan, and the two to ftrur year IRP action plan. 1'r. at,179-80, 486,
Irinally, Mr. Cllemcnts noteel that l'}aciliC]orp's cogeneration QFs (ofien ref-erred to as
combincd heat and power * or CI{P * Qfs} do not necd long-term contracts for financing
plrrposes because these l'acilities are usually financed by their host businesses. Tr. at 476. IIe
insisted that rnclst cogcncration lacilitics "typically elcct short-term contracts with PacifiCorp
even wherr 20 year ternls arc available. In f'act, most [cogeneration QIrs] elect annual contracts
tlrat are rcnerved each ycar at the thcn-current avoided cost," Tr. a|476-7 7. These QFs pretbr to
take thc spot or near-term avoided cost price to elirninate the price risk that cornes frorn long-
ternr Ilxcd-price contracts. 1-r. at 477. On cross-cxamination he statcd that all ol'PacifiCorp's
cogcneration PURPA contracts are shorl-term. "typically one year or less." Tr. at 541 .
I Ic concluded by observing that given the exponential increase in existing and
proposcd QI? contracts lbr PacifiCorp,
it is critical to quickll, ad.just pricing and contracting proccdurcs norv that
problems rvith those procedures havc been idcntillcd, The current
Comrnission-approved PLJRPA conlract length puls retail customers at risk of
harm due to signilicant and unnecessary exposure to long-term price risks. a
thc in the of
transaction. 'l'he Company has no control over this price risk: it must purchasc
esscntially an unlimiled quantity of'Qp power under terms ancl conditions the
Conrmission controls, Under PtJRPA. only'the Commission can nritigate this
pricc risk t<l customcrs,
ORD[TR NO. 33357 l7
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 18 of 34
'l'r. at 48q-93 (enrphasis added). 'l'hc shortcr conlract term is neccssary to rebalancc the utusl
purchase provision that lhvors QI;s u,itlr the ratepa),cr indill'erencc standard.
3. Avis.la. Il'thc Cotrntission dccides tt'r shorten the length of IRP-based conlracts
tbr Idaho I)orvcr or Ilockl' Ir4ounlain. Avista rcqucstcd thc Comrnission to provide it rt'ith the
samc relief'. 'l'r. at 404. 408. Its witncss Clirrt Kalich requcsted that the utility Lre aftirrdccl
sirnilar relief'"to ensure tr level playing field across the Cornmission-regulated utilities." 'l'r. at
410. IIeassertcdtheConrrnissionhasthcauthoritl,toshortenIRP-bascdcontracts.'l'r.at412.
Iv{r. Katich acknorvledged that Avista has not receivcd any proposed solar projects
and that Avisla has not been inundated with QI; proposals like the other tu'o utilities. Tr. at 414-
15. IIe explained that difl'erent contract lenglhs among the utilities could causc an increasc in
tilings at Avista il'it had longer term contracts than the othcr trvo utilities. 'l-r. at 406-07.
Howcl,er. he clid want Avista to maintain thc option ol'having IRP-based contracts longer than
five years it'thc tc'rms ol'such contracts "nre lbund by Avista and the [Comrnission.l to be in the
intercst of utility customers. It is not possible to knorv cvery circumstance whcre a longer term
agrcemenl may be w'arrantcd." ld. al110.
4. S!dl. Commission Stalf urgcd the Comrnission lo reduce the 20-year tcnn fur
IRP-bascd contracts to Irvc ycars. Statf witness Rick Sterling tcstilled that long-term contracts
"bascd on lorccastcd rates create greatcr risks for customcrs bcceruse thc rates in the later vears
are not rellective ol'avoidcd costs."' 'l'r. at 902. I-le explained that one o1'the major factors in
IRP-based contracts is thc price of natural gas. "A long-term llxed price could possibly bc
accurate .iust once dr,rring its term * at the beginning ol' the contract ,uvhen the rates are tlrst
cstahlislrcd. 'l'he shorter the term of the contracl, tlrc morc lrequcntly prices can be adjusted to
ensure they accurately represent the true value of the po\\'er. A shorter tcnn contract helps to
minir:rizc thc risk to ralepayers." l'r. at 905.903. Ilccause PUIIPA costs are passed on to
customers through thc Power Cost Adjustment (PCA) mechanisms, ratcpaycrs arc lully exposed
to thc risks il'l'UltPA rates prove to be too high. 'fr. at 906. Conversely, tuel costs for utility-
orvned rcsourccs are trackcd annually and the rates adiusted annually.
Mr. Ste rling lirrther testified there rvere legitirnate rsasons rvhy utilities "ere
penr,ittecl to develop or acquirc long-tenn gcncrating asscts but IIIP-based l'}LJItPA resources
should tre restricted to twr:. three. or fivr-y'ear contracts. Tr. at 915-16. FIe explained that when
a utility acquircs a resourcc it is usually a result of thc Company's Intcgrated Resource Plan. As
ORDER NO. 3:i3-s7 l8
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 19 of 34
sr-rch. thc utility rcsource is picked l'rom a range of altcrnatives. is procurc-d through a compctitive
proccss. and is contingent upotr Clommission approval in a public process. /r/, N4orec"rver, utility'
generating f acilities have lirel costs that are annuall,v adjustcd and these facilities are
clispatchable based upon the Conrpanl,"s load and generation requirements. Tr. at 917. On the
other hand. PURPA projccts arc cr-rtitlcd to long-tcrrrr contracts at I'rxcd rates, acquired without
consideration of need. undergo no competitive bidding. and their avoidecl oost rates are not based
upon cosl-basecl pricing. 'l'r. at 917,925. IIe also noted that PtJItPA projects entircly
circumvent thc II{P planning process. Tr. at 918.
IIc also tcstilled that the utilitics havc devcloped non-l)tJRPA rcncrvablc resourccs.
F-or example. Palouse Wind and Clearwater scll their power to Avista, and Elkhom Wind sells to
Idalro Por.ver. "['r. at 931 .
5. Idaho Iryigation Pumpers Association. The Irrigators ollered the testimony of
their rvitness Anthony Yankcl, 'uvho supportcd Idaho Porvcr's initial request to limit new IRP
contracts to two years. I'r. at 301. Mr. Yankel explained that thc llood of projccts presents
Idaho Powcr rvith a balancing problcrn of having to choose between curtailing its ow'n must-run
lacilities. or its nrust-takc I'LIRPA contracts, Tr. at 305. I'le recommended the Commission
rccluce IRP contracts to two years as a "sttlp gap measure" rvhile the Clommission lirrthsr refines
the Company's models and modeling assurnptions lvith actual Company operations. 'fr. at 305.
IIe also supported Iimiting new solar and rvind pro.iects to tu,o vears because of their interrnittent
naturc. Tr. at 307.
6. Interqg_untain finergy Partners. IEP presented the testimony'ol"its president. Mark
van Gulik. I'le testifled that the dorvnrvard trend in avoided cost ratcs in ldaho mcans that fbwcr
pro.iects will bc able to obtain financing and comc on-linc. Consequently. there is not an urgency
Ibr the Cornmission to shorten ceintract lengths. 'l'r. ttt 372.
As the developer of the Clark I through 4 solar projects. hc explained thc four
projects were tcrnrinated lvhen they were unable to nrake their required security deposits. 'l-r. at
376-77. Ile did not indicatc that contract lcngth contributcd to the termination of these fbur
projects totaling l4l MW ol'narneplate capacity. Because ldaho docs not have attractive state
tax inccntivcs. he foresaw littlc likelihood for lRP-based projects to be able to attract the
necessary capital il'their contract terms were less than l5 years. Tr. at 386.
oRDER NO. 33357 t9
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 20 ot 34
7. ICL/Siena Cluh. ICt,'s and Sierra Cllub's second rvitness rvas'lhomas Beach rvho
urgccl llre Commission to retain the 20-vear lRP-based contract. 'l'r. at 630-52. I-le indicated that
current inclicativc pricing tbr lcvclizcd avoidcd cost ratcs continucs to dcclinc by "morc than
509'o below' the $60 to $64 per Iv{W rangc ol'avoidecl costs lbr the reccntly-approvcd 2O-year
solar contracts." 'l'r. at 630-3 I ; l-ablc 3 at '['r. 64? (lbotnotc onrittcd). Rcducing the length of 20-
year long-tenn contracts as avoided cost rates continue to <Iecline. "appears likely to make
runecononric Ql;s that could be developed at avoided cost prices with a lorrg-term agreement."
Tr. at 63 l. I'le noted that rvhen the Commission reduced lRP-based contracts to l'ive vears
hctrvccn I996 and 2001, only onc PIIRPA contract was cxecuted during that time with ldaho
Porver. Tr. at 632.
I Ie rnaintained that ldaho Pou,er's IRP methodology is generally working well as
indicatecl in the decline in avoidcd cost ratcs lbr solar contracts as shown in 'fable 3 of his
tcstirrrony. 'I'r.al642. Of the 48 projects totaling 885 MW, only l4 have progressed lhrenough
to rcccivc indicativc pricing. and of those, only one has requested a contract. 'Ir. at 64.1. "As
more solar capacity has been addcd" thc avoidcd cost price has llllen based on Idaho Porver's
capacit.v position and titure necds." 'l'r. at 644. Ancl, as "avoided cost priccs lall. lbwer projects
will be built." /r/.
8. Clcarw-atcr Paner and J.R. $imnlot Company. Cllearuater and Simplot presented
the testimony of thcir rvitness Dr. Reading who opposed ellbrts to rcduce the length of the IRP-
basecl contracts fiom 20 years. Dr, Reading insisted that conditions havc not changed since the
Commission last decided to resunre 20-ycar contracts in 2012. In particular, he argued that the
only cor:dition that may have changed sincc 2012 rvas that thc utilitics'avoidcd costs may have
decrcascd but that does not mcan the term of the contract should be reduced. l'r. at 785-86. He
argued that reducing thc contract length to f ivc ycars or less will not encourage the development
of rener,r'able resources. 'fr. at 778-79. l{e insisted that reducing the contract as proposcd by the
utilitiesandStall"w'ill makeitirnpossiblefbraQFtoobtaintinancinglbrtheirprojects. /d- lle
noted that lhe last time the Commission rcduccd PUI{PA contracts to fivc years. "only one
PURPA contract was signed in Iclaho with the shortened contracl length." ld. a|780.
l{e mairrtaincd it would be unrcasonable to limit IIll']'bascd contracts to five years
rvhen the recovery of inl'estment tbr utility-orvned resources is rnuch longer, and in some cases
oRr)t-.rr NO. 3i357 20
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 page 2L ot 34
up to 50 !'ears. I'{e argucd that PURI'A resourccs should be placed "on an equal fboting w'ith
tutiliti'-orvned resources. . , IandJ shoulclreceive longer-term contracts." Tr. at 781.
l'[e ncxt cotnparcd the cost ol PURPA projec(s u,ith thc cost of Idaho Porvcr's
getterating resources, I'le dctcrminccl that thc pr:icc per MWh of ldaho Power's PURPA projects
c:onlpare lirvorably' to the Contpany's ltrcilities. See Chart No. I at 'l'r. at 793. In preparing his
chart and analysis, he acknowledged that he removed Idaho Porver's hydro facilities ("the
Companv's lo'uvest cost resource with the depreciated rate base ancl vcr1.' low variable running
cost"). 'l'r. at794. l'[e removcd thesc lor,ver cost facilities from his analysis because streamf'lorv
conditions vary liorn year-to-year and the cost ol rcliccnsing Idaho Porver's largest hydro
conrplex (l-lelts Canl'on) is not yct known. Tr. at 79.1-95.
IIe also lestified that cogcneration pro.iects are unique fiom other types of PURPA
projccts and arc descrving ol'continucd acccss to long-tenn IRP contracts. 'fr. at 819-23. I'{e
argued that Idaho Polver's Petilion prirnarily points to the probleur ol' oversupply l'ronr
"internritlurt and relatively unpredictable I'IJI{PA output liom wind and solar projects." Tr. at
823. Consequently, he suggested that any reduction in the length ol IRI' contracls not apply to
cogcnerati on projects.
9. Snake River Alliance. Ken Miller testified on behalf of SRA. He opposed
reducing the 20-year IRl'-bascd contract length and expressed conccrn that development of
utility-scale solar rvill bc impaired. Tr. at 734. As the Environmental Protection Agency (EPA)
llnislies its Clean Por.vcr Plan,12 lclaho's utilities rvill have grcatcr nced 1'trr solar as they reducc
tlrcir rcliance on their coal-lired gencrating tacilities. 'fr. at 735-36. Given the projected
reductions in coal-lrred generation, tlre shrinkagc in thc utility's proiccted ovcrcapacity rvill
likely prompt utilities to nccd nrorc solar gcncration. "fr. at 739-40.
Commissiott Fittdittgs: Wc rccognize that PTJRPA was intended to encourage the
dcvelcrpnrcnt ol'rcnervable resources. Order Nos. 32580 at 3: 32697. citing FERC v Mi,ssi,ssippi,
456 U.S. at715-16. Indecd, this Cornmission has a long history ol'cncouraging I']URPA projects
and reneu,able energy devclopmcnt in [daho. Order No. 32697 at 14. As shown in Idaho
Pow'er's Hxhibits I and ll, the gro"r'th of renewable gcneration started rnodestly. Idaho Power
nccunrtrlated less than ?00 MW in 25 ycurrs (roughly trom 1982-2007). Since 2007, PLIRPA
gcncration has increascd dramatically, and for Idaho Porvcr in particular, its PURPA generation
'r ul'A issucd its Clean Porver Plan on August i,20 l-5
Ol{DIrt{ NO. 3i157 2t
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 22 oI34
undcr contract has grorvn to about l.l6l lv{W - ttcarly. a six-lbld increase. [xh. 11, In.ir"rst three
months lNovember 2014 throu-uh.lanuarl'2015). the Comrnission approved l3 solar contracts
totaling nrorc than 400 N4W.
'l'o cncouragc thc clevelopment of'rcncrvablcs, PURPA and I'L'.RC regulations lay out
sevcral stanclards, tr,vo ol'rvltich are paramount in this case. Itirst, PtJI{PA requires that electric
utilities "n'rlrst purchase" thc porvcr produced by QFs. QFs are paid based on costs that the utility
avoids. Order No.32697 at 7: l6 tj,S.C. $ 82,1a-3(b): l8 C.F.R. $ 292.303(a). A utilit,v's
avoidcd cost rcprcscnts thc incrcmcntal cost to thc purchasing utility olporver *,lrich, bul fbr the
purchase ol porver from the QI", such utility rvould either generate itself or purchase tiom
another sourcc. Order No. 325t10 at 3. citittg Ro.sebud, 128 Idaho at 627,917 P.2d at 784.
PURPA and FIIRC rcgulations rcquirc that thc avoidcd cost rate nrust be "iust and rcasonablc to
elcctric consunlcrs of thc utility and in thc public interest, and shall not discrirninatc against
lQFsl." Order No. 32697 at 16. citing l6 tJ.S,C, $ 82aa-3(b); l8 C.F.R. $ 292.30a(aXI)
(interrral punctuation orrrittcd).
Second, FERC regulations allow a QI" to clroose to have the avoided cost rates lor the
purcliase of its porver calculated itr one of'trvo \ rays: ( l ) at the time of dclivery; or (2) at the time
it cntcrs into thc contract/obligation lbr thc dclivcry ol por.vcr. l8 C.F.R. $ 292.30a(d): a5
lred.ll.cg, at 12.224. In Idaho, rnost IIIP pro.jccts choosc to have thc avoided cost ratcs calculated
or "'fixed" at the time the contract obligation is incurred rvith their actual operationron-line dates
one to two yc:rrs latcr. 'l'hus. the rates arc lixcd lbr the duralion ol'the 20-year contract.
'l'he Idaho Supremc Clourt has recogniz-ed that PTJRPA contracts represent a "spccial
type of corrtract." Afton l/lll,l07 Idaho at793,693 P.2d at 439: A/ion Encrgt v. lclaho l'ov,er
Oo. ("A.lion L"').114 Idaho 852, 854, 761 P.2d 1204,1206 (1988); Ordcr No. 32802 at 17. Wc
have also said in prior Orders, PURPA conlracts are special because "federal larv compels
utilitics to purchase power rvithout arms-lcngth bargaining and rvithout regard to rvhether lhc
utility needs the power. Even if QF power rcplaces power the utility rvould otherwise
generate. ratepayers are ultimately paying fbr both the capital assets of the utility's base load
general.ing plant in ralcs and thc QF poivcr." OrderNo.32802 at l7-18.
Ileturning to this case, there seenrs to bc gencral agreement among the parties that as
morc PLiRPT\ porver is ofl-ered to the utilitv". the avoided cost rales tbr IRP projects will decline.
Tr. at 2(10-61 372:630-31:642. lt is thcrcfirrc axionratic that long-term avoided cclsl rates
oRDtitt N(). 33357 ')1
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 23 of 34
deternrincd at the tirne panies enter into their contract will "ovcrqstimatc" tuturc avoided cclsts
collectc'd fiom the utilities' ratcpa!'crs. Becausc ol- the 20-year tenn ol the curent IRP-based
contracts. (his "ovcrcstinration"'uvill beconre rnore signil'icant over the duration of the contract.
When I"ERC issued its initial PL"TRPA rcgulations. it acknowledged that. avoided costs
calculated when the parties cnter intt"r the contract nright result in t'uturc avoided costs over the
tcrr of the contract bcing greatcr than actual avoided costs at the time of delivery. FIIRC
rccognized that irr such cases a utility "rvould subsidize rhe [QFl at thc cxpensc ol'the utility's
other ratepayers," 45 Fed.Reg. at 12,224:Tr. at775-77. In other cases, FERC postulated that
the avoided costs calculated at tlrc tinre ol'dclivcry "rvill turn out to be lou,er than the avoided
cost at thc tinre ol feontract)." ld. -['hus, ]'F"R.C believed "that. in the long run, 'overestimations'
and 'unclcrcstintations' ol'avoiclcd costs will balance out." ./d
Based upon our record, we find that 2O-ycar contracls cxacerbate <lvcrestimations to a
point that avoidccl cost ratcs over the long-tcnn periotl are unreasonable and inconsistent with the
public intercst. We lind shorter contracts reasonablc and consistent with fbderal and state larv fbr
multiple reasons. F'irst. shorter contracts have the potential to benefit both the QF and the
ratepayer. By adjusting avoided cost rates morc licqucntly, avoided costs become a trucr
rellection of the actual costs avoided by the utility and allorv QF's and ratepayers to benel-it liom
normal fluctr.rations in the rnarkct.
Second, shortcr contract lengths do not ultimately prevcnt a QF lrom selling encrgy to
a utility ovcr the coursc ol'20 ycars - or longer. PIJRPA's "must purchase" provision requires
the utility to continue to purchase thc QF's power. As long as projects continue to oflcr power to
utilities. utilitics must continue to purchasc such powcr under PUIIPA. A shofier contract length
merely lunctions as a rcset for calculation of the avoidcd costs in order to maintain a more
accural.e reflection of the actual costs avoidcd by the utility over the long term. Our approach is
not dissirnilar to that suggcsted by witncsscs Ilcading and Bcach discussed below.
As an alternative to discontinuing the 20-year contract. Dr. Reading and Mr. Beach
suggested similar hut ditfcrent altemativcs. I)r. Rcading suggcslcd that thc Commission could
rctain the 2O-ycar contract but adjust the energy component in each of the last l0 years of the
contracl. 'l'r. at 842. Mr. ISeach suggested that the Clommission could make a singlc ad.iustment
in the lltl'year of a 20-year contract. Fie explainecl that thc 20-ycar contract could be "repriced
0RDE,R NO. lil57 -)
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 24 ot 34
allcr tlrc llrst l0 )'ears . . . [but] the indicativc cncrgy price lbr Years I l-20 rvould continue to be
lixed." 'l'r. at 701-702,
While ne appreciatc the concessions evident in thcsc proposed alternatives. u,e tind
the' reconurtendatious unpersuasive. An acljustable rate contract runs the risk ol'violating I;LRC
rcgulations that mandatc a "lixcd ratc" at the time of contracting. l8 C.F.R. $ 292.301(dx2xii);
'l'r. at 213-15. Morcclvcr. lhc samc result can bc accornplished through successive short-tenn
contracts. 'l'r. at 2 l.l: 5 I 5- I 7.
'l'hird, rve Iurther Iind the argurnents asking the Commission to trcat QIrs similarly
rvith utilitv rcsources unavailing, As is evident upon revicw of the extensive record (explained
b.v sevcral rvitnesscs). QFs dilicr frorn utility resources in several signiticant and material rvays.
A utility "cannot be corrrpensatccl by its customcrs lbr cnergy produccd fronr a gencrating lacility
until thc utility cstablishes the need lbr such new generation" by recluesting a Ccrtillcatc of
Public Convcniencc and Ncccssit), (CPCN). lduho Corlc $$ 6l-526,61-541. Order No. 32697
at l5-16. In contrast. PURI'}A requires thc utility to purchase QF poi.ver whether the power is
necclcd or not. Ncxt, a utility'-authorized resource is typically' subject tr: compctitive bidding,
ct'rst scrutiny. and clllcntimcs has dispatch characteristics differcnt than most QI's. Moreover, the
Iuel conrponent lbr utilit.v generating plants is ad.iustccl annually, hut is tlxed for thc duration of
fucl-based. long-tcrm QF contracts. QFs are entitlcd to receivc lull avoidcd cost rates.
llowevcr, thc calculation o['avoided costs is enlirely unrelaled to w'hat it costs a I']URPA project
to bc devcloped, 'l'r. a( 290: sce also 'l'r. at 196-200.205,507-510.924-76. Thc utilities also
rlemonstrated that avoided cost rates exceed the Mid-C index price and their avcrage costs ol
cithcr gencrating or purchasing power. 'fr. at 129, 191-92,477-80.
Finally, il' the goal ol PURI'}A \ryas to 'ocncourage" lhc development of'renervable
resourcss, ldalio has made signiticant advancements torvard that goal. Both Idaho Porvcr and
PacifrCorp prcsented persuasive evidencc of capacity surpluses. These two utilities have
dcnronstrated that their suppll' ol'PLIRPA and non-PURPA porvcr cxcecds thcir currcnt avcrage
loads. 'l'r. at I Il, 117,931. "l'hc abundance ol'PIIRPA generation extends the utilities'capacity
surpluses to 2024lbr ldaho Porver and 2028 lbr PacitiCorp.
A change in thc length of lRP-based contracts is not intended to be punitive to QFs.
For several years this Commission has been adjusting temrs and conditions of PI,JRPA contracts
in order to cstablish avoided cost rates that are just and rcasonablc to clcctric consurners! in the
ORDITI{ N0. 31i57 2.1
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 25 of 34
public intercst. and not cliscriminatory against QI"s. Wc lind that a change in contract length
aligns ,'r'ith thc intent ol' I'URPA. is consistent u'ith FEITC regulatic'rns and achieves ar.r
appropriale balancc bctu,ccn the conrpeting intcrests ol'protecting ratfpayers and developing QI;
-eeneration.
Bascd upon our revicrv of thc cvidencc. wc tind that the lcngth of new llll'-based
contracts should bc set at two 1,cars lbr all three utilities. 'lhere are several reasons to support
our tinding. ["irst. given the lwo-ycar planning c-vcle fbr the Integrated Resource Planning
process, u'e flnd it is reasonable tcl set the length ol'lRP contracts at t\\,o .vears. Matching IRP
contracts to thc IRP planning cy'clc providcs rrrore accuratc IIIP avoided costs. rcduces price risk.
and provides rrore lorecast certainty. 'fr. at 486, 127-?8,287.902-05,915-17. Further. the two-
year cvclc hretler rnatche's thc utilities' hcdging and risk rlranagcnrcnt practiccs.
Wc arc not persuadcd that sctting lRP-bascd contracts to t'uvo years will rcsult irr a
substantial clecline ol rencu.'able resources. 'l'he utilities all have ample amounts ol I'tJItPA
power on their systems; additional rener,vable generation is in the queue; SAlt-based contracts
are still 20 ycars: and thc "rnust purchase" provision w,ill still require utilities to purchase all
rennvable gcncration ofl'crcd by QIis. Moreovcr, PURPA is not thc only mcans through which a
utility can obtain and/or utilize rener.vable rcsources. All the utilities have acquired non-PURPA
rcncwahle rcsources and/or shortcr tcrm cogcneration projects, As PacitlCorp's Mr. Clemenls
testilied. all ol'PaciliCorp's cogcneration contracts arc lbr a period olone year. 1-r. at 476-77.
And rvc note that over thc )-cars. ncither Clcanvater nor Sirnplot havc choscn QF contracts of 20
years. Tr. at 858. In fact, Cleanvatcr's most rcccnt cogeneration agrcement was not a PTJRPA
contract.
In redurcing IRP-based conlracts to two years, we find that a clarification in
calculating thc capacity dclicicncy of thc IIll']-based pro.jects is warran{cd. As rvc have said in
prcvious Orders. a utility is to begin payments to a QF tbr capacity "at such time as the utility
beconres capacity deficient. . . . tly including a capacity payment only r.vhen the utility
bccomcs capacity dcficicnt, thc utilitics arc paying ratcs that are a morc accuratc rcllcclion of a
lruc avoided cost tbr the Ql' power." Order No. 32697 at 21. We recognize that a nerv two-year
contract rvould be unlikely to rcach a capacit-v deficicncy date. Thcreforc, lve flnd it reasonable
lbr utilities to establish capacity delicienci, at the tinre the initial IRP-based contract is signed.
As long as thc QIi rcnervs its contract and continuously sclls power to thc utility, thc QF is
oRDEn NO. i3357 25
Case 1:18-cv-00236-REB Document 4-4 Filed 06i25/18 Page 26 ol34
entitlcd to capacitv bascd on thc- capacit)' dcticiencl, datc established at the tirne of its initial
contract. For exarnplc. il'the QF conrcs on-line in 2017 and the utility is capacity,ciet-rcient in
2020. thc QIi rvould be etigiL'rle tbr capacity pavrnents irr the second year of its sccond contract
arrd therealier il'in continuous opcration. 'l'his ad.iustrnent recognizes that in ensuing contract
periods. the QIr is considcrcd part ol' thc utility's rcsourcc stack and lvill bc contrihuting to
reducing the utility"s need tbr capacity. 'l'his mitigatcs thc. conccrn that short-term contracts will
not contributc to the avoidance of utility capacitlrigcncration.
We tirrthcr find that on a case-by-case basis. therc nray be justilication lor lRP-based
contracts in cxccss of two ycars. 'fhis is consistent with our prior Orders. Order Nos,272l3;
?6576 at 6-7: Order No. 32697 at 25. ln those instances whcn the utility and the project
dcvclopcr bclicve that a longer term is justified, utilities arc dircctcd as part ol' their standard
negotiation process to lhirly cvaluate such requests. The Commissicln will corrsider those
contract lernrs rvhen the-y arc submittecl for approval.
C. lndicotive or Incremenlol Pricing
As part of its Pctition, Rocky Mountain askcd that the Conrmission allow it to change
its "indicative'' pricing practice in thc IRP methodology so that it rnay proviclc more accurate
avoided cost rates to proposed Qlt projects. I)etition at 4. Indicative or "incrcnrcntal" prices are
thc prcliminary cstinratcs of IRP-based avoided cost ratcs and arc the incrcmcntal cost a utility
r.vould cltherwise incur lbr thc capacitl' and energy that the QF proposes to sell to the utility. Yin,
'l-r. at 876. Incremental prices scrvc as thc starting point fbr ncgotiations betrveen QFs and a
utiliry. 1l/.
Rocky Mountain sceks rclicf liom a prior Conrmission Order in Clase No. GNR-E-1 l-
03 that generally directed thal incrernental pricing bc upelated alier "the QIr and utility have
cntercd irrtq a signcd contragl fbr the sale and purchase of QI pou'cr." Order No. 32697 at 22
(cmphasis added). In other words, the utility's calculation o[ an updated incremental price is
bascd upon signed contracts, rrot all projects seeking to sell powcr to a utility.
l. Ilocly Mountain's Proposal. In its Petition. Rocky Mountain asked ibr approval
to arrange proposecl QI; projects in a queue and providc thosc QFs wilh incren:ental pricing as
part of thc IRP negotiation proccss. Rocky Mountain Petition at 37-38. '[he avoided cost
prices/rates would be based on each QF's place in the qucue, and would be calculated using that
QF's proposed power and that ol'all earlier-queued projects. ld. Rocky Mountain asscrtcd that
OItl)lrlt NO. i3i57 26
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 27 ot 34
the "drastic incrcase in thc number of QF reqLlests receivecl in both ldaho and over [Rocky
MountairVPacifiClorp'sl six-state system in recent vears" results in "arlificially inflated avoidcd
cosl pricing." /r/.
Rock,v fu{ountain's r.vitness Brian l)ickman explainccl:
Avoidcd costs for the tirst QF in [a] queue are based on displacement of the
highest cost resources on [Rocky ]r4ountain's] system. Each successive QF
should displacc lower and lower cost resourccs, rcsuhing in lower avoided
costs.
I)ickman, Tr. at 560. 'fhe pricc of proposcd power tiom queued projects is "not captured if the
recognition olner,l'long-term commitments is limited to signed conlracts." lcl. at 564. If a utility
cernnot updatc its avoidcd cost pricing to rcl1ect the price lor proposed por,r,er liom the queue. the
queued projects all rcccivc avoidcd cost rates or prices that are not up-to-datc and too high.
Ivlr. Dickman also testificd that it '"vould bc "prohibitively time consuming and
problematic fi'om a contract rregotiation standpoint." to recalculate prices lbr new QF'prcrjects as
other proposed QFs sign corrtracts. /r/ at 577. IIe suggcstcd thc Commission should modify thc
incremcntal pricing practicc in the IRP methodology "to account lor proposed QF projects on
fltocky Mountain'sl systern prior to the ncxt lclaho QI: rcqlresting indicative prioes." Icl. at574.
Cllearrvater arrd Sinrplot's ra,itness Dr. Reading supported the proposal. Tr. at 831.
No party opposed Rocky Mountain's increnrental pricing request.
2, Stafl' Suoport. Staff recommcndcd the Commission adopt Rocky Mountain's
proposal to update its incremcntal avoided cost pricing. Stall'witness Dr. Yao Yin testified that
under the incremental pricing practice approvcd per Order No. 32697, "proposed projects are not
placed in a queuc but are instead treated lbr pricing purposes as if they are all the first proiect ttr
receive the ncxt [incrcmcntal pricc]." 'l'r. at 877. Although tlris practicc "may result in accurate
avoidcd cost rates." l)r. Yin observed that "it can be ve'ry diltcult to recalculate ratcs lbr
proposecl pro.iects in a tirncly man,rcr r.vhcn therc arc many pro"iects seeking indicative prices at
thc sanrc time." Id. at877-78. "ln addition. a QF ma.'- not rvant to renegotiate the new updated
rates, because the new indicative prices may bc lou,er than thc originalones." ld. at878.
Dr. Yin notcd that current "PURI'A project sizes arc rnuch larger, both individually
and cuntrlatively. ancl multiple projccts Irequently seek indicalive prices at the same litne." Icl.
at 879. '['he pricing practice proposed by Itocky Mountain "would offler more accurate indicative
OI{DE,R NO. 33357 2'7
Case 1:1-8-cv-00236-REB Document 4-4 Filed 06/2511-8 Page 28 ot 34
prices to QFs hy putting all thc proposed projects into a queue based on thc times they request
indicative prices." /ri.
Shc cxplained that Idaho Porvcr ancl Avisla havc tarill'schedulcs (Sch. 73 and 62.
rcspectivcl,v) that "speeif"v the inftirmation a pro.ject needs to submit belbre requesting indicative
priccs." ancl that "specif,v tirnelinc ntilcslones lor QII's to mect as projects and negotiations
progress." Iel at 876,881. Dr. Yin recommended that Rock;- Mountain be directed to file a
similar schedulc in ldaho "so that QF prujects can lravc a bettcr ielea o1'thc procedures lbr
requcsting indicative prices in ldaho." and that" rvould "lay out the PIIRPA ncgotialing process
ancl prcvent prei.iccts liorn prcmaturely recluesting irrdicative pricing." Id. al 876-77,882. She
llr(her recommended that I{ocky Mountain develop "specific criteria. . . tbr management of the
queue, such as rtrles fcrr QI; entry, re-positioning, and removal l'ionr the queue." ld. at 882.
Finally. shc rccommcnded that the Conrmission "discontinue the 'signed contract' rcquirement in
Order No. 3?697 lbr purposes of giving indicative pricing to IRP-based pro"iects." /d. at 882-83.
Commission l;indirtgs: The Commission flnds that the "signed contract" language in
Order No. 32697 clid not achin,c its intendcd result. When developers llood the utilities with
many proposed projects in a short period of tims, the "signed contract" requirement yields
inaccurate avoided costs. The result is artificially inllated pricing.
Wc find that crcation of a qucuc to track thc ordcr in rvhich QF projccts havc cntered
negoliiltions r.l,ith a utility. so that incremental pricing can be calculated to rellect the actual
impacts of each project is reasonable and appropriate. Consequcntly, rve elinrinate the "signed
contract" requirement o[ Order Ncr, ]2697 and allorv utilities to update their incremental pricing
tbr: QIrs in their Pt-]t{PA queur:. ldoho ('ode $ 61-624. Such a process rvill irnprove the accuracy
of proposcd priccs. and irnprovc thc predictability ol'the proccss to botlr the utilitics and the QFs.
We, also direcl Rocky Mountain to lilc a tarifl'schedule . like those of Idalro Porver and Avista,
r.vhich outlines its PURPA negotiating process. fhe schcdule should include specific criteria for
nlanagemelrt of the queue to elirrinate unccrtainly and to facilitate negotiations bctlvecn Rocky
Il4ountain and QFs.
TV. II{TERVENOR FTJNDI]\iG
A. l'uncling Standurds
Inlervenor lunding is available pursuant to ltlaho Code $ 61-617A and Conmission
I(ulcs l6l thrnugh 165. Scction 6l-617,{(l) dcclares that it is "the policy of fidahol to
Ot{Dt-.R N0. 3i357 28
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 29 ot 34
cncourage participation at all stagcs of all procecdings bclbre this commission so that allattected
custonrcrs rcccive lirll and lhir representation in those proceedings." ltlefuo Ciorle r\ 6l-Gl7A(2).
'l'he slatute authorizes the Cornrnission to order an1, rcgulated utility' with intrastatc annual
revenues exceeding $3.5 million to pay all or a portion of the costs of one or rnorc parties.
Intcrvenor tunding costs include: lcgal fccs. rvitncss lccs. transporlation and othcr cxpcnses so
long as the total liurding lbr all intcrvcning parties does not exceed $40.000 in any proceeding.
lclaho Clorle $ 6l-617A(2). 'l'he Comn:ission must consider the follorving tactors rvhcn deciding
whether to arvard inten'enor lr.rnding:
( l) That the parlicipation ol'thc inlcrvenor has nratcrially contributcd to thc
Commission's decision:
(2) 'fhat the costs of intervention are reasonable in anlount and rvould be a
significant t'rnancial hardship lbr the intervenor:
(:i) 'fhc rcconrrncndation nradc by thc intcn,cnor dil'['crs matcrially liom the
testimon,v and cxhibits of the C'onrmissiorr Stafl: and
(1) l'he testimony and participalion of the interrrenor addressed issues of
concem to thc gcncral body'of customcrs.
Itluho &rrle $ 6l-617 A(7). 'lo oblain an arvard olintervenor tirnding, an intervenor must comply
rvith Commission Procedural Rules 16l-165. 'l'he petition must contain an itemized list of
cxpenscs broken dowrr into categories; a statement explaining rvhy thc costs cottstitutc a
significant lrnancial hardship; and a statemcnt shorving the class of customcr on whosc behall'thc
intcrvenor participated. Rulc 162. IDAPA 31.01.01.162.
B. The Intervenor Funding Requesls
As set out in greater cletail below, the Commission received lbur petitions lbr
intcn'cnor luncling, rcqucsting a lotal ol'about S58,000, It is undisputecl that cach of the thrce
electric utilities in this case has intrastate revenues thal exceed $3.5 nrillion.
l. Idaho C--onservation League. On July 1.2015, ICL tiled a Petition firr Inlenenor
Funding seeking recovery of $9,652.50 in expenses. ICL is a non-profit organization and claims
that its members and supporters are ratepayers ol'all three electric utilities. Petition at 3. ICL
maintained that it rcccives financial support solcly through charitable donations from its
merrrbers and foundations. 1rl. It asserted that it actively strived to reduce its expenditures by not
sccking any tral'el costs, reproduction f'ees, and that thc scrvices of its r.vitness, Mr. Wenner, were
OItDIllt NO. 33]57 29
Case 1:18-cv-00236-REB Document 4-4 Filed 06/251L8 Page 30 of 34
provicled pro bono. lvlorco'u'er. IC[, requcsted onl,v 60'% ol'its othcr u'itnc'ss's hourly rate. IC]L
subnrittecl that its rvitncsscs' testinlonv u'as nratcrialll'dil'l'erent ll'onr that testiurcln-v ollered b1'
thc Conrnrission Stafl. In particular, ICL argued that the Cornrnission should niaintain thc 20-
y'ear lixed-price contracts lbr IRP-based projccts. Pctition at ,5. In summarl', ICL requested
rccovcrv of its lcgal f-ccs in thc amount of $4.050 and witness fccs in the arnount of $5"602.50.
2. Rener.vable Flnergy Coalition. On JuI1,9,2015, I{EC tiled its Petition tbr
Intervenor l:unding seeking an award of $tt.751.50.rr Il[C rncrnbcrs represent small h.v'<lro
power producers that either have or may seek PURPA contracts with ldaho's electric utili(ies.
Petition at 3. R[:C nrcmbers imposcd a special assessment agairst thcrnselves to support their
intcrvention irr this case. Pctition at 4. However. costs lor intcrvcnors in this proceeding
c-xceeded the assessmcnt. Id. ln addition. I{LC has not sought recovery of all of its legal tbes
nor thc costs ol its prirnary i.vitncss. Mr. I.owc. in this case. RIIC dcclared that its testimony also
dil'lbrcd lionr that oll'cred by Commission Stall. [t rnaintains tlrat it is the only party that
rccornnrendcd the Clommission should broadly invcstigatc the issucs raiscd hy utilities whcn
balancing thc intcrest ol'ratcpayers and snrall Q[:s. In surnmarv, Ii.l.rc sought to recover its legal
lbcs in thc amount ol'$7,936.50 and its travcl cxpcnses in thc amount ol'$815.
3. Snake RiverAlli(rnce-. On July'9.2015. SRA liled its Petition lbr Intervenor
I;unding sccking $5.800 "ror:nded do'uvn tbr convcnicnce." Petition at 3. SRA characterizes
itscll'as a srnall, non-prolit organization "supported by charitable contribr.rtions liorn indivirJuals,
lamilics" and fourrdatiorrs." ld. Its participalion in this case was o'neccssarv to provide a voice
Ibr its menrbers and ratepayers that 'l'ace signilicant economic and environmental risks
associatcd ',vith the utilitics' coal flccl fbyl pursuit ol'clcan and renewable alternativcs to coal
and large hydropou,er." lcl. SRA opposed the utilities' and Staff s proposals to reduce lhc length
of 20-y'ear I'l.JItPA contracts but supported adjusting the energy component of avoided cost ratcs
at thc l0-year mark. ld. at?.
SIIA only' requcsted recoverv of its legal f'ees and did not seek reimbursement fbr its
w,itncss and lincrgy Dircctor, Kcn Millcr.
4. Irigation Pumpers Association. On July 10, 2015, the lrrigators filed their
Pctition tbr Intervcnor Funding secking a lotal of $33,733.72. 'l'he Irrigators sought recovery ol
't ln its Pctition, REC sought an arvard of 58.800 (Pctition at 2; Exh. A) but thc cxpcnses listcd in its Exhibit A total
$8.75 r .5Q.
ORI)[rR NO. ]3357 30
Case 1:1-8-cv-00236-REB Document 4-4 Filed 06/25118 Page 31 of 34
thcir lcgal f'ccs (37,500). u'itness f'ees (S2.1..150). and travel exprenses ($1.7113.72). Petition at
Ilxh. r\. The Irrigators are a non-prolit corporation reprcsenting fanners' interc-sts in electric
utilitr'nrattcrs in soutlrcrrr Idaho. Pc'tition at 3. 'l'lrc Irrigators rcl-v- solely on ducs and
contributions voluntaril,v paid by its due-paying members. 'fhey only have one part-time paid
contractor rvho shares ofi'ice space in [Joisc. 'l'hc [rrigators' position was materially dill'erent
than that addressed by Comr.nission Stalf or othcr parties. 'fhey maintained that Idaho Power
was opcrating its systenr inconsistently u'ith the assumptions in ldaho Porvcr's avoided cost
models. Id. at 3. 'l-hcy r"rrged the C<xrmission to reduce thc lcngth ol'contracts rvhile the
(lomnrission re fincs thc avoidcd cost methodology.
Commission Findings: l'he Commission finds that the requesls for intenenor
lunding satisl,v the intervenor lunding requirenrents. liach intervcnor pa(icipatcd in the case and
rnaterially contributcd to thc cxamination ol'the issues and the Commission's decision. As set
out atrove. each intervenor's petition materially dill'ercd tlorn Stal'f.s position. We tiuther lind
that thc'lack of intervsnor Iurrding would bc a si-rrnificant trnancial hardship to these intenenors
and that thcir costs ol interveution, {br the most pafl, are reasonablc. I-low'cvcr. thc total arnounl
requcstcd cxcceds that which is availablc by statute. 'l'herclbre, rve find it fair, just and
reasonable to arvard the interverlors the li:llowing funding amounts totaling $40.000.
IN'I'IIR\TE,NOIT AWARI)rcl s 8.635REC $ 8.3 14sttA $ 5.266
IIPA $ I 7.785l"otal $40"000
"l'hc intervcnor funding arvard shall be recovcrcd tiom Avista, Idaho Powcr and
Rocky Mountain Porver based on a proportional share o1'the total number of' Idaho customers
servecl by caclr utility. S'ee Ordcr No. 32697. 'l-he funding awards to ICI-, ItHCl, and SRA shall
be chargeable to the electric rcsidcntial cllstomcr class. I'he Irrigators' costs shall be chargeable
to tlre irrigation customer class of the three utilitics. ldaho C'orle $ 6l -617A(3).
UI.1'IMATE FINDINGS AND CONCI,USIONS
'l'he Corrrmission has jurisdiction over this rnatter pursuant to the authority and porver
granted it undcr Title 6l of the ldaho Code and the Public Utility Regulatory Policies Act
(PURPA). 'Ihe Commission has authority to set avoided cost rates. to order clectric utilities to
ORDITR nNO. 11357 il
Case L:18-cv-00236-REB Document 4-4 Filed 06/2511-8 Page 32 ot 34
enter into fixed-term obligation fbr the purchase of energy and capacity from QFs, and to set thc
term of PURPA contracts. The Cornmission is also crnpowercd to resolve disputes betwecn
utilities and QFs and to approve PI"JRPA contracts.
PURPA uncl FERC regulations direct not only that the r:ltes fbr purchnses not
discriminate against QFs, hut also that avoided cost rates be just and reasonablc to the utility's
ratepayers and in the public interest. l8 C.F.R. $ 292.304(a)(l). This Order shonens thc length
of lRP-based PURPA contracts in order to maintain a more accurate avoided cost. However, the
"nlust purchase" obligation of PURPA will allorv QFs to continually renew their contracts.
Moreover, QFs will continue to be compensated fclr capacity calculated at the time they initially
enter their lRP-based contract. Also, proposed IRP-hascd contracts th&t are longer than two
years will he evaluated on a case-by-case basis. This Order strikes a balance bctween .iust and
reasonable rates for ratepayers, the public interest and the interests of QFs, as is mandatcd hy
PURPA and FERCI regulations.
ORDER
IT lS HEREBY ORDERED that ldaho Power's Petition to reduce the length of its
IRP-based PURPA contracts from 20 years to two years is granted.
lT IS FURTHER ORDERED that Rocky Mountain Power's Petition to reduce the
length of its lRP-hased PURPA contracts from 20 years to three years is granted in part and
modified in part, Rocky Mountain shall reduce thc length of its lRP-based PURPA contracts tc)
two years.
IT IS FURTHER ORDERED that Avista's Petition to reduce the length of its IRP-
based PURPA contracts to two years is granted as set out above.
IT IS FURTHER ORDERED that Rocky Mountain Power's request to change its
indicative (incrernental) pricing practices is grantccl as set out above. The requirenlent that
utilitics update thcir indicative pricing practices based on signed contracts is rescinded . lcluho
Code $ 6l-624. PacifiCorp shall file a schcdule setting out its PURPA negotiating practices and
queue nranagemcnt.
IT IS FURTHER ORDERED that the capacity components for lRP-based QF
contracts shall be calculated for all new IRP contracts to begin at the time the QF first enters its
two-yeu contract provided such contract is continued in the future.
ORDER NO. 333-57 32
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 page 33 of 34
I1'IS I;tJI{'fllDR OllDt:t{[D that Avista, Iclaho Porver, and Rocky Nlountain Porver
rnav enter |RP-bascd QIr contracts in excess ol' fivo ycars on a case-by-case basis rvith
appropriatc .iustifi cation.
IT lS FURTIIER ORDERI:D that the lbur Petitions fbr Intervcnor Funding are
granted as set out in greater detail above. 'fhc utilities are directed to renrit their respective
arnounts to thc fbur intcrvenors rvithin 28 days of thc date of this Order, as more specifically
described above. IDAPA 31.01.01.165.02.
I1' IS FURTIIER ORDL]RIID that this Order become efl'ective on the service date
shorvn on the liont page.
-fl IIS IS A I;INAL ORDL.R. Any person intercsted in this C)rder (or in issues finally
dccided by this Order) or in inlerlocutory Orders previously issucd in Casc Nos. IPC-U-15-01.
AVt-l-t1-15-01, and PAC-11-15-03 nray pctition lbr rcconsideration rvithin twenty-one (21) days
ot' the service datc of this Order rvith regard to an)' matter decided in this Ordcr or in
interlocutory Orders previously issued in these cascs. Within seven (7) days ailer any pcrson has
petitioncd for reconsideration, any other person may cross-petition for reconsideration, Scc
Iduho ('r.rrle $ 61-626.
OLDL.R N0. 33357 JJ
Case 1:18-cv-00236-REB Document 4-4 Filed 06/25118 Page 34 of 34
DONIi by Orcler ot'the ldaho l'ublic tltilities Comnrission ar []oise. Idaho this LAt^
day ol'August 2015
Commis,yiory!'Smilh clid not purl.iciltale in thil; c'ule-.
MAITSHA }"I. SMII'I I, COMMISSIONTR
-K* , P.,a-co
A'f't'tis't'
ft *t$ n ^*-A-(if,ffirrl[';ilff--
(Vo nr rn i ssi o n #cc rctary
0:l llCl-l:- I 5-01 - n V U-L- l5-01. .P;\C-lr- I 5-03,. dh2*Final
L,
ORDt:.lt NO. 33157 34
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page L of 28
Ol'l'ict ol' thc Secretary
Sr'rvice Drtc
Nolembcr 5.:015
BEFORE THB IDAHO PT]BI,IC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITION TO MODITY
TERMS AND CONDITIONS OF PURPA
PURCHASE AGREEMENTS
CASI, NO. IPC.E-15.0I
IN THE IVIATTER OF AVISTA
CORPORATION'S PETITION TO MODIFY
TERMS AND CONDITIONS OII PURPA
PURCHASE AGREEMENTS
CASE NO. AVU.E.Is.OI
IN THE MATTER OF ROCKY MOUNTAIN
POWER COMPANY'S PETITION TO
IVIODITY TERMS AND CONDITIONS O}-
PURPA PURCHASE AGREEMENTS
CASE NO. PAC.E.15.O3
ORDER NO. 33419
On Septenrher 10,2015, Clcarwatcr Papcr Corporation and J.R. Sirnplot Company
(the "Petitioners") filecl a Petition for Rcconsideration in the above-refbrenced consolidated
cases. The Petitioners requested reconsideration of the Cornnrission's final Order No. 33357 that
reduced the length of certain PURPA contracts from 20 years to two years. The Petitioners
generally raised three argumenLs, First, they argued that the Commissinn's two-year contract is
contrary to the PURPA regulation "because it deprives the IRP-based QFs ol a long-term, fixed
contract. price to sell energy und capacity with prices calculated at the outset of the obligation."
Petition at I I (underline added). Second, they argued that the new two-year contract term tails
to provide each qualifying facility (QF) with a fixed-price for "energy and capacity calculated at
the time thc QF' obligates itself to sell its outplrt to an ldaho utility. . . ," ld. at 2. Finally, they
asserted the Cornnrission's "capacity adjustment" (used to determine the date when the QF
would hc cligible fbr capacity payments) "is made up of whole cloth." ld. at 16. They alleged
that no party discussed the capacity adjustnrent in its testimony. The Petitioners concluded that
the Cornrnission's creation of the capacity adjustment "is not supportcd by any evidence on the
record whatsoever." Id. trt 17,
Clearwater ancl Simplol requested that the Commission either retain the prior 20-year
contract term or adopt their alternative proposal for a "2(lyear contract with an update to energy
prices in new PURPA contracts in contract year 10. .." Petition at t5. The Petitioners
maintained that eithcr alternative would nlcet the mininrum requirements of FERC's regulations.
)
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)
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)
ORDER N(). 33419 I
Case 1-:l-8-cv-00236-REB Document 4-5 Filed 06/2511-8 Page 2 ot 28
/r/. 'l'he-v otlered to submit lurthcr bricling. oral argumcnt, or any turther tcchnical teslinlony the
Conrrnission ma)'rcquest. ld. at 17.
Orr Seplember 17.2015. Avista Corporatiurr, Idaho Powcr Companv, and R<"rcky
Mountain Porvcr (collcctively thc "Utililics") lilcd a time ly joint ansrvcr urging the Commission
to deny reconsideration. The tJtilities rnaintaineei that the Conrrnission's linal Order No. 33357
propcrly lirund that 20-year PIJRPA contracts are inconsistent with the public interest. They
argued the Con'unission's clecisiorr to set the maximunr standard contract tenn to two years more
accuratelv rellects true avoidcd cosls and appropriatcly balances "thc conrpeting intercst of
protecting utility customers and developing QF generation." Ansrver at I l. 'l'hey insisted that
thc ['URI'A rcgulations issucd by thc Fcdcral Iincrgy Regulatory Commission (]rllRC) are silent
as to the length ol a contract and the Clomrnission acted rvithin its discretion in reducing the
contract tcnr. ld. at (t. 'l'he Utilities also assc(ed that thc Conrnrission's final Order is based
upon substantial and competcnt cvidcnce in the record. 1cl. at I 1.
On Octoher 8, 2015, the Conrrnission issued Order No. 33395 granting
reconsicleration on the issues raised by Clearrvater and Simplot. 'l'he Comrnission noted that it
had compiled an extensive cvidcntiary rccord in this casc and determincd that turther argumcnt
and briellng was not necessary. Order No. 33395 at 2. After having thoroughly reviewed the
issucs raised in the l)etition lbr Reconsidcration and the rccord in tlris case. thc Commission
dismisses the issues raised in the Petition fbr Recorrsideration as discussed in ereater detail
bclo'uv.
BACKGITOUNI)
A. PURPA
Congrcss enactcd thc Public Ljtility Regulatory Policies Ac1 (PIJI(PA) in 1978 in
rcsponse to a national errergy crisis. "lts purpose was t0 lessen thc country's dependerlce on
lbreign oil and to encourage the pronlotion and developmcnt of rerrewable energy technologies
as altcrnatives to lbssil fuels." OrderNo.32580 at3, c'iting FERC v. lvli.ssi.ssippi.456 U.S. 742,
745-46 (1982). Undcr thc Act, I;EIIC prescribes rules lbr PURPA's inrplcmentation. l6 U.S.C.
$ 824a-3(a), (b). State regulatory authorities such as the ldaho Public Utilities Commission
implcmcnt IrnRC regulations. but lravc "discretion in deten:rining the manner in which (he rules
will be implemented." Idaho Pou'er Co. t,, Idaho l'>UC, 155 ldaho 780. 782,316 P.ld 1278,
I280 (2013). ciring FER(: v. Mi,ssis,ti1tpi, 156 [.r.S. at 751. ]'he Idaho Suprenre Court has
1OR,DI]R NO. 33,{ I9
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 3 ot 28
observcd that thc Conrrnission has the authority to inrplenrcnt PLIRPA ancl that this grarrt of
atrthoritv is ['rroad. ltluln Pov'er. 155 ldaho at 7tl7.3l(r P.id at 12851 Rosehd Enlerprises r.
lduho I'{-t(' (Ro.sabud lt. 128 Iclaho 62-1. 627.917 P.2d 781. 78-+ (1996): .1.11'. I}r'otut v. Iclulut
Power (,'o.. I 2 I Idaho 8l 2. 814. 828 P.2d 8,1I, 843 ( 1992).
'l'o cncourage thc devclopnrcnt ol'rencr.vable lircilities. PLJRl'A recluires that elcctric
utilitics purchasc thc pou,cr prodr.rced by dcsignated qualilying lacilitics (Ql"s). "'l"his mandatory
purchase rerluirenrent is oflen rel'erred to as the 'must purchase' provision ol PL}RPA." Order
No. 32697 at 7: I6 [J.S.C. $ 824a-3(b): l8 C.F.R. S 292,303(a) (exce ptions to the "nrust
purchasc" provision inapplicahle in this case). Iilcctric utilities are required tei purcha.se porver
liom QFs at ratcs equivalcnl 1o a utility's "avoidcc'l cost" and approved hy this Commission. 16
U.S.C, $ 824a-3; lduho Pov,er, 155 ldaho at 789. 316 P.ld al 1287. 'l'he purchase or avoided
cost rate rcpresents the "'incremental cost' to the purchasing utility of porver rvhich. but for the
purchasc ol porvcr liom thc QF. such utility rvoulcl cither gcncrate itsclf or purchase liorn
anothcr sourcc." Ordcr No. 3251t0 at3, citing Rosetbud I.l2S lclaho at 627.917 |'.2d at 784; l8
C'.F.R. ss 292.101(b)(6). Thc avoidcd cost rate must bc "iust and reasonable to the electric
consunlcrs . . . and in thc public interest" and "shall not discrirninatc against [QFsl." l6 tJ.S.C. $
tl24a-3(b); l8 C.l:.R. $ 292.304. In addition. utilitics shall rrot bc requirecl to pay morc than their
avoicled ccrsts when purchasing power fiorn a QIr. /lo.rebud lintcrpri:;e:; v. Iduho PUC (Rosehucl
Il), 128 Idaho 609, 614, 917 P.2d 766,711 (1996), t'iring 16 ll,S.C. $ 82aa-3(b) (PtrItPA
rcgulations shall not "providc li;r a rate rvhich exceccls thc incrcrnental cost to thc electric utility
of alternative electric energ,v."). Rosehud I,l2S ldaho at 677,917 l''.2d at 784.
'['his Corlnrission has establisheel tw.o rnethods of calculating avoided cr:st, depending
on tlrc sizc ol'1hc QF projcct: (l) the surrogatc avoidcd rcsourcc (SAR) mcthodology, and (2)
thc integratcd resource plan (lRI') methodology. See Order No.32697 at 7-8. 'l'he Commission
uscs the SAR rnethodology to cstablish what is commonly rclbrred to as "publishcd" or standard
avoided cost rates. ld.; 18 C.F.R. $ 292.304(c). Published rates are availablc for wind and solar
QIrs rvith a design capacity rlot to exceed 100 kilorvatts (kW). and fbr QFs of all other resource
types',r,ith a dcsign capacity ol'up to 10 average mcgawatts (aMW).1 OrderNo.32697 at7-8.
Ifor QFs r.vith design capacity' above the published ratc cligibility' caps. avoided cost rates are
I Ollrer types ol'PtlRPA generatirrg thcilities includc: cogeneration (such as Cllearrvatcr and Sirnplot); geothernral;
hydro (both year-round and seasonal); landllll gas; and bio-gas tacilities.
-1OIIDER N0. ]34I9
Case 1:18-cv-00236-REB Document 4-5 Filed 06/251L8 Page 4 ol28
"individually negotiatcd by the QF and the utility" r.rsing the IRP nrethodology hased on the
specitic characteristics of thc resonrce. Order Nos. 32697 at 2; 32176 at l. Sincc 2002, thc
standard length tbr both SAR-based contracts and lRP-based contracts was set by the
Conrrnission at 20 years. Order Nos. 32697 at 24-25,33357 at ll. In that Order the
Conrnrission also lound that shorter or longer contracts would be permissible on a case-by-ca.se
basis. /r/. at 25.
At the option of each QF, the utility's avoided cost power rate shall be calculated
either at the tirne o[ delivery or at the time the sales ohligation is incurred. Rosehud ll, 128
Idahcr at 621,971 P.2d at 778; l8 C.F.R. $ 292.304(d), Avoided costs iue generally divided into
two components: capacity rates and energy rates. .!.ce Order No.32697 at 15. Capacity rates
rct'lect thc ability of the utility to gcncrate elcctric powcr at any instant in tinre and are measured
in megawatts (MW). A QF that provitles capacity to the utility allows the utility in theory to
avoid building new gencration or purchasing firnr power from anothcr supplier. Energy rates
rcflect the costs of supplying clectricity over time and arc measurcd in mcgawatt hours (MWh).
For exanrple, one MW of capacity supplied for one hour equals one MWh of energy.
B. The Utilities' Requests to Reduce tlte Length of PURPA Contracts
On January 30, 2015, Idaho Power Company lilcd a Petition asking the Commission
to reduce the length of its lRP-based PURPA contracts tiom 20 years to two years. Avista and
Rocky Mountain subsequently filed similar petitions and the three cases were consolidated into a
single proceeding. Orcler No. 33250. While the Comnrission investigated the issue of contract
length, it granted temporary relief to the three utilities by reducing the length of new PURPA
contracts to five years. ld. at 8; see Order No. 33357 irt 6-7 (sumnrarizing petitions to clarify the
scope of the case).
l. Idaho Power. The Conrpany asserted that 20-year fixed-rate contracts are no
Ionger reasonable. Idaho Power insisted it has reached a point where the cumulative capacity of
the proposed PURPA projects will cxceed the Company's operational nced by a large rnargin.
Idaho Power's Senior Vice President of Power Supply testified that the Cornpany does not need
the additional generation. She reported that the Company's peak load for its system in 2014 was
about 3,184 MW while its minimum load was approxirnately 1,073 MW. Order No.33357 at
13; Tr. at 107-108. Idaho Powerasserted it had more than I,16l megawatts (MW) of PURPA
projects under contract and an additional 1,326 MW ol' new solar projects in the queue. Order
40RDER NO. 334t9
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 5 of 28
No. 33357 at 3-4: Ilxh. I I at .1. 'l'he Cornpany maintained that the recent influx of PL-IRPA
generation places undue ljnancial and opcrational risks on customcrs at a timc rvhen thc utility
has sullrcicrlt rcsoLlrccs to llrcct cLlstonrer clernand through 2024. Ordcr Ncl. 33357 at ;l: 'l'r. at
281 .
'l'he Con'rpanv also asserted in its initial Pctition that "the continued creation ol'20-
year term [PtiRPAl contracts places unduc risk on cnstomers" and is contrary to thc public
intcrest. Idaho Porvcr Petition at2,27-34. ltlalro Powercornplained that ilall the proposed solar
projects comc on-linc. it rvould represent a "long-tcnrr financial obligation to customers ovcr 20
ycars ol-approximately $2.1 billion, in addition to the existing $2.6 billion obligation over the
life of the Clompany's [PURI'A] projects already on-line and operational." .1rl. at i.
2. Roc-ky lVlountain Power. Rockv Mountain requested a permanent reduction in its
IltP-bascd PLJI{PA contracts lionr 20 ycars to three years. The Cornpany assertcd in its Pctition
that llve days after the Conrmission granted ldaho Porver interim relief', Rocky Mountain
received tbur requests tiom solar developers in ldaho Power's service territory seeking to sell or
"whcel" 130 lV{W ol scrlar power to Rocky Mountain. Rocky Moturtain Petition at 4-5. 16.
llocky Mountain insistcd thcsc ttrur projccts sought to wheel power to it to obtain a more
lavorable 2O-year contract when Idaho Porver conlracts were temporarily reducecl to five ycars.
Id., n.5.
Like Idaho I)or.ver. Rocky Mountain asserted it had no need for additional generating
rcsources until 2028. Id. al 3. rr.4. 'l'r. al 429. Aclding the proposed PLiltPA projects to the
Company's existing PIIRPA contracts w'ould total approximately 465 MW. Petition at 5. At full
nameplatc capacity. this rvoulcl bc cnough t<l supply 108% ol I{ocky Mountain's average retail
Ioad in 2014 and 275% of its minimum ldaho retail load in 2014. 'l-r. at427. 'fhe Company also
insisted that the reduction was necessary to be "corrsistent with the Conrpany's hedging and
trading policics." thc length of its non-lllJRPA cnergy conlracts, and to morc closely align with
the trvo-year Integrated Resource Plan (lRP) cycle. Petition at 3-4.
3. Avista. If thc Cornmission granted pcrmancnt rclicl'to ldaho Powcr and Rocky
Mountain by shortening their IRP contracts. Avista requested that it be granted the same relief.
Order No. 33357 at 18, cilintr4l-r. at 404,408. Avista's witncss acknowledged that Avista had
not received arly proposals for solar projects, but testified that having contract lengths in excess
of'the other tr.vo utilitics coulcl causc QF developers 1tl scck contracts with Avista sirnply to
5oli.DER NO. 3i,{ l9
Case 1:1-8-cv-00236-REB Document 4-5 Filed 06/25118 Page 6 oI28
obtain krngcr tcnn corrtracts. /r/..'l'r. al -106-()7. Avista also rcconulcndcd that thc Conrmission
allorv IItP contracls longcr than llve;"ears if such contracts are in thc best interest of ratepay,'ers.
ld..'l'r. at "l10.
FINAL ORDER NO.33357
A. 20-Year Conlrocts ore Unreasonable
In its llnal Order No. 33357. the Commission lbund based upon substantial and
con'rpeteltt cvidence that 20-year Ii{P contracts are unreasonablc ancl inconsistent rvith the puhlic
interest. Order No. 33357 at 23. The Comr:rission cited several reasons in support ol'its decision
to shortcn lllP-baseel oontracts. I;irst. thc Cornmission lound that neither PURPA nor its
inrplernentirrg regulations "specify a manclatory lcngth lbr PUI{l'A contracts." Id. al 12. The
Cornmission notecl that no part,y contested that "l;EItC regulations do not dictate a specilic
numhcr of ycars or cstablish a tirnc period fbr PTJRPA contracts." Id., c'iting Tr. at 589, see ulso
2l 5-16. 410-l l, 5t 3-l 5.
Second. thc Comrnission found that 20-ycar contrilcts arc unrcasonablc becausc thc
length exacerbates overestiurartions to a point that avoided cost rates are inconsistent rvith the
public intcrest. 'l'hc Comnrission fbund thcrc rvas gcneral agrecment among the parties that the
avoidecl cost ratcs lbr IRP proiects arc dcclining and rvill cr;ntinue to decline in the t'uture. Order
No. 33357 ar22, citing'l'r. at260-61,372,630-31. (t42. With long-terrn avoided cost rates in
decline. allowing QFs to lix their avoiried cost rates lbr 20 years when they enter inlo their
contract/obligation, will rcsult in avoidcclcost ratcs which cxcccd or "ovcrcstimale" avoided cost
rates in the tirture. Id. at 23. Thisu"overestimation' rvill become more significant over lhe
duration ol'thc [20-ycarl contract." ld. The Commission obscrved that r.vhen I;ERC issued its
irritial I'tJItPA regulations in 1980. l"l".RC recognizcd that avoidcd costs calculated at the tinre
parties enter into il power c:ontract ma,v- exceed the AqtUal avoicled costs at the timc the power is
dclivcrcd in thc futurc. 45 Fed.Rcg. 12.214 at 12,224(1eb.25, I980). As FFIRC explaincd in its
Ordcr No. 69, overcstimations will "subsidize thc IQFl at thc cxpcrlsc ol- the utility's other
ratcpaycrs." Order No. 33357 at 22-23, citing 45 l;cd.lleg. at 12,224; '['r. at 575-77. FERC
discountecl the conccrn about long-tenn avoided costs exceeding aclual avoided costs at the time
of delivcry (i.e., ovcrestirnations) bccause it theorized that ovcr tinre "'ovcrestimations' and
'underestimations'o1'avoidecl costs rvill balance out." /,/. Ilolvever, the Comrnission founcl that
6oRI)tiR ^NO. 33.119
Case 1:18-cv-00236-REB Document 4-5 Filed 06/2511-8 Page 7 of 28
hased upon the rccord in this procecding 20-;-car IIll) contracts',vith fixed avoided cost rates will
excccclactual avoided costs antl are inconsistent rvith the public intc'rest. l6 U.S.C. $ 824a-3(b).
-l'hird. the Comnrission lbund that both ldalro Povver and llockv Mountain presented
persutrsive evidencc that thel' did not need adclitional generation and each currently' has a
capacity, suqrlus. Ordcr No. ili57 at 24. "['he Conrmission specitically tbund that the two
utilities' suppl,v oI PURPA ancl tton-PURPA power excecds their average Idaho loads. ft/.. citing
'l'r. at lll, ll7. 931. "l-he abundattcc ol' Pt-ll{PA gcncration cxtcnds the utilities' capacity
surpluses to 2024 lbr Idaho Porver and 202ti ftir [Rocky iV{ountainl." Id. at24.
'l'he Comrnissiorr also rejectcd twr: sirr,ilar but dill'crcnt proposed altematives in lieu
of shortcning the tenrr olthe contracts. \4ore spccilically, tl,e Petitioners urged the Commission
to continuc tlrc 20-1,car contract but "adjust thc cncrgy conrponent in each ol'the la$t l0 years o1'
Lbg_Slq1dgrd_9enlgg1." Order No. 33357 at 23 (cmphasis addcd), citing 'lr. at 842. The other
altcrnativc proposccl by thc Siena Cllub r.r,as to retain thc 20-year term but reset the energy rate
.just once in the eleventh year of the contract, i.e., in year I l. 'fr. at 701-03. The Commission
re.iectcd both ot'these altematives bascd upon conccrn that an adjustable rate 20-y'ear contract
runs thc risk of undemrining FERC rcgulations that mandate a "fixed-rate" at the time the
contract or obligation is entered. Icl., c'iting l8 C.F.R. $ 292.304(dX2Xii); Tr. at 213-15. The
Cornmission also fbund that the ability to cnsurc that avoidcd cost rates rcmain accurate can best
bc accomplished througlr successive slror.t-tcrnr contracts. Orc'ler No. 33357 at 24.
B. The Two-Ycar Contract
Because neither PIIRPA nor FERC's irnplenrenting regulations expressly specify a
lcngth f'or PTJRPA contracts, thc Commission lound that sctting an appropriate contract length is
leli to its discrction. The Comrnission notecl that the Idaho Suprcme Cou( has stated that the
Commission has the authority to inrplernent PUI{I)A and that this grant of authority is broad.
Order No. 33357 at 3. c'itinq4 lduho Pov'er, I55 Idalio at787,315 P.3d at 1285; Rosebud I. 128
Idalroat 627.q17 P.2dat784;A.lY. llrov,n, 121 ldahoat 814.828 P.2dat 843. TlreComrnission
also noted that it "is up to the States. not [FI'lRC]] to dctcrminc thc specific parameters of
inclividual QIr porver purchase agreements. . . ." Order No. 33357 at 12. quoting lduho Pou,er,
155 ldaho at 786,316 P.3d at 1284, cluotittg Pov,er Resource:; Group t'. l'{LC of'Texns,4?2F.3d
23 t. 238 15rr' Crir, 2005).
70l{DI:R NO. 3:i.ll9
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 8 of 28
I laving found that the standard 2O-year ll{P-based contract rvas unrc&sonablc and no
longer in thc public interest. the Conrntission cletc'rmined that the lerrgth of neu' IRP-based
contracls slroulci bc sct at two ycars fbr all thrcc utilitics. Ordcr No.33157 at 25; l6 U.S.C. s\
824a-3(b)(I). The Cornmission cited sevcral reasons to sr"lpport its linding. First. the
Conrmission fi:und that sho(cr contr.rcts havc thc potential to bencllt both the QF and the
utility''s custonrers. "By ad.iusting avoided cost rates more liequently. avoided costs become a
truer rcllcction of ths actual costs avoidcd by thc utility and allow QI's and ratepaycrs to bcnelit
ll'onr nonnal lluctuations in the market." Id. at 23. In other rvords. whcn avoided costs increase
or decrease. both the QF and ratepayers have the opportunity 1o benetjt.
Second, the Comnrission lound that redr.rcirrg the contract length to two years does not
prcvent a QI; fiom sclling energy to a utility over the course of 20 ycars - or
longcr. PURPA's "must purchase" provision requires the utility to continuc tcr
purchase the QI;'s power. [6 tj.S.C. g 82aa-3(b); l8 C].F.R, $ 292.303(a).1
As long as projccts continue to ollcr powcr tcl utilities, utilities nrust. contirrue
to purchasc such pow'cr undcl PtJltPA. A shorter contract lcngth mcrcly
firnctions as a rcsct ltlr calculation ol'thc avoidcd costs in order to maintain a
ntore accurate rellection of the actual costs avoided by the utility over the long
tcrm.
Orcler No. 33357 at 23. In aclclition. most QIis choose to have their zrvoided cost rates fixed at the
tinre tlrc contract/obligatiorr is incurred ttrr thc duration of the contract. Id. at22.
'l'hird. thc Commission dcternrined it was reasonablc and logical 1o set the length ol
ll(P contracts at two years to coincide rvith the two-year planning cycle tbr the integrated
resourcc plannirrg proccss. "Matching IRP contracts to the IRP planning cycle provides more
accuratc Il{|'}avoided costs, reduces price risks. and provides more fbrecast certainty." ld.,c'iting
1'r.at486, 127-28,287.902-05,915-17. ThcCommissionalsoloundthatthe two-yearcontract
bcttcr nratchcs thc utilitiss' hcdging and risk managen"rolt practices,
C. The Capocitl, Adjustmenl und Exccplions to Ttvo-Year Contracts
In rcducing the length ol' IRP-barscd contracts to two ycars. the Commission
rccognizcd that two adjuslrncnts or exccptions were necessary. 'l'he first is ref'erred to as the
"capacity adjustment," and the second is the "exception" to lirniting contracts to t\.vo years.
l. Carracity Adjr-rstmcnt. The capacity adjustmcnt addrcssed concerns raiscd by
parties opposecl to reducing the 2O-year contracts becausc "short-term contracts will not
contribute to thc avoidance of utility capacitylgeneralion." Order No. 33357 at 26. The ca;lacity
13ORDFIR N0. 3341e
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 9 of 28
adjustmcnt w'as intcnded to ensure that the QIr will bc compensated f'or providing capacitl'z to the
utilitv rvlren "the utilitl,'bccomes capacitl'delicient." Order No. 33357 al25, quotirrg Ordcr No.
]2697 at 21. Bccauscr cach utility's capacitl'c{clicicncy clate is updated and reset every two years
as part o1'the IRP methodologv. the Contntission rvas concerned that new' two-year IRP-bascd
contracts "u,ould be unlikely to reacil a capacity dcficiency date." Order No, i3357 at 25. In
other rvords. under the trvo-1'ear tcrm. a contracting QF might never reach a point rvherc its
capacitf is contributing to the utility's systcm and w'ould. thcrclirrc. ncver receivc capacity
paymcnts.
'l'o rcmedy this conccrn, thc Clomnrission fbund it
reasonablc lbr utilities to establish capacity deficiency at the time &e initial
IRl)-bascd contract is signcd. As long as the QF' rcncrvs its contract and
continuously sclls powcr to thc utility, thc QF is cntitlcd to capacity [ralcs]
based on the capacity deliciency date esublished at tltc time of its initial
contract. []or exermple. if'the QF cornes on-linc in 2017 and the utility
[bccomes] capacity deflcicnt in 2020. the QI; rvould bc cligihle fbr capacity
priymcnts in the second year of its second contract [(i.e., ?020)] and thcreatler
il' in continuous operation. 'l'his ad.iustment recognizes that in ensuing
contract pcriods, thc Qlr is considered part of the utility's rcsource stack and
will bc contributing to rcducing the utility"s need for capacit,v.
Order. No. 1.1357 at?5-26.
2. Ex-cgptions to Limiting Clontracts to Twg Ycars. Avista's rvitness recommended
that tlrc Comrnission allo,'uv lli.P contracts to exceed the slandard contract term of tw<1. three or
five years "in thc cvcnt a very lavorable PLJRI'A opportunity ariscs." '1"r. at 401,410; see also
l'r. at 908-10. 'l'he Conrmission adopted this recommendation and found there may be
circumstanccs that justity lltP-based contracts that are longer than trvo ycars. Order No. 33357
at 26. In instances rvhen the utility anci the proiect devcloper believe that a contract tenn Ionger
than tw.o ycars is justified. "utilitics arc directcd as parl of their standard negotiation process to
Iairly evaluate such a request." ld. The Comrnission also noted that approving IRP-based
contracts in excess ol'thc standard lcngth (i.c., trvo ycars) "is cousistent rvith our prior Orders."
Order Nos. 27213 ;2657 6 at 6-7; 32697 at 25,
2 Sce.ruprrt tc\t on pagc 4 cxplaining capacity and capacily'ratcslpavnrents
IORDIR r'O. 3i,ll9
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 10 of 28
SCOPE OT RECONSIDIIITA'TION
A. Lcgul Sttudurds
Itcconsidcration providcs arn opportunity' lbr a party to bring to the Llommission's
attcntion any cluestion previously determined, and thereby atfbrds the Conrmission with an
opportunity to rectifl' any rnistake or omissicttl. Ilkr:;hinglon trl/ulcr I'ov,er C'o. t,. Koolenai
Environntatrrul Alliuncc, 99 Idaho 875. 879. 591 P.2d 122, 126 (1979). l'he Commission may
grelnt rccorrsidcration by rcvicrving the cxisting record, by rvritten brieti, or by evidentiary
hcaring. Idaho C'orlc $ 6l-626: Rule 332, IDAPA 31.01.01.332. Il the Clommission believes its
final order "should be changed, the Commission rnay . . . change the same." Iduho C'rrrle $ 6l-
626(3). An order on reconsideration thal changes thc original final order. shall havc the same
lirrce and cll'ect as thc original ordcr. Id.; see ulso ldaho Corle $ 6l-624.
B. Underlying lracts
"l-hc scope ol' ljnal Order No. 3.i357 nas linrited to issues ol'reducing the length ol'
IRP-bascd PIIRPA contracts. Order No. 33253 at 4. 'fhc parties proposed and the Commission
approvcd that thc standarcl lcngth lor SAl{-based contracts remain unchanged at 20 years. /r/.,
Ordcr No. 31357 at 7. Cllearu,ater and Simplot are the onl,v parties or persons to scck
reconsideration of the Cornmission's linal Order. Icluho Cocle $ 61-626.
Both Petitioncrs operatc cxisting cogencration lhcilities and both exprcssed an interest
in developing nerv cogeneration lacilities at their industrial plants. Tr. at 769.771. A
cogeneration tacilitl, typically relies on a hosl's industrial proccss to producc electricity in
conjunction with the activities of the host lbcility. l8 C.F.R. $ 292.202(c). Cogeneration
projects with power output of l0 averagc MW (aMW) or less are cligible to reccive published
SAR-bascd, avoidcd cost cncrgy and capacity rates with 20-year contracts. Order No. 33357 at
Clcarwater Paper operatcs ftrur cogcncration facilitics at its manufacturing tacility
near Lerviston that arc capable ol'gencrating a total ol'approximately I I I MW. Petition at 3;'l'r.
at 769. Simplot currently operates a 15.9 MW cogerreration facility tlrat uses waste heat to
gcnerate elcctricity. Petition at 3;'l'r. at 76'7. Although Sirnplot's QF has the capability to
generatc in cxcess of l0 aMW. it "has thus lar chosen to enter into standard rate contracts fbr
QFs generating up to l0 aMW of generation." Petition at 3. In othcr words, Simplot has not
ottDH{ NO. 134 l9 t0
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page LL of 28
sought IIIP-bascd avoidcd cost rates but hars clcctcd to be paid thc published SAR-based avoided
cost rates lor small cogcneration QFs (less than l0 aMW).
At the technicarl lrearing, the Petitioners' witncss Dr. Ileading rvas askecl about thc
lcngths of the Petitioners' PI.JRPA contracts.J I'lc defcrrcd to thc Commission's rccords lbr thc
history ol'contract length. 'l'r. at 858. Since enaclurcnt o{'PUttPA in 1978, neither Clearwater
nor Simplot has sought a 20-ycar contracl lor their existing facilities.a 'l'he longest PL-IRPA
contract tbr Sirnplot's existir,g lacilitl,was sevur years (2006 -2013). Order No. 30028. Sinrplot
also lras had scvcral one and two-vear contracts. Order Nos. 28739,?9577.327q0.33240. In
Clcaru,ater's case. ils trvo longest PI-IRPA contracts u'cre each tcn ycars. Order Nos.23858,
29418. In 2013. Clear*,ater agrced to scll its available po\4,er output to Avista undcr a non-
PtIRPA sales ciutract that extcnds to 2018. 'l'r, at 858-59, 931-32, citing Order No. 32841.
Earlier this year, Clearwater and Avista requested and the Conrmission approvcd extending thcir
non-P[JRPAcontractlbranadclitional three years.untilJunc202l. OrderNo.33350; fr.at932.
n.l .
ISSTJE,S IN DISPUTE
A. PURPA does not Authorize the Ql;' to Spectfy the Length ttt the Controct
Thc Petitioncrs raisc a number of inter-related arguments generally urging the
Coninrission to reconsider its dccision to shorten lRP-based contracts to t\r,o years. Thcy tirst
insist that FERC's PURPA rcgulation at l8 C.F.R. S 2q2.304(dx2xii) permits a QF to determine
thc lcrrgtlr ol'lRP-bascd contracts. 'l'hcy arguc thal this section requires that each QIr "shall" he
provided r,vith the lollowing options:
( I ) to e lcct to scll cncrgy and capacity lto the utilityl;
(2) to clccl to scll such cnergy and capacity over a term specified by the OF;
and
(3) to elect that thc obligation contain rates lor energy and capacity calculated
at thc time thc QIr incurs that obligation.
r J"he Clornmission approves all PURPA contracts and other power sale.s agreements by issuing llnal orders. Order
No. 32802 at I l (and citations thcrcin). lduho ('ode \ 6 l -502.
r 'l'he Cornmission's proccdural l{ulc 26i allorvs the Cornnrission to tilke ofllcial notice of its orvn ordcrs and
noticcs. lDAI'A 31.0 1.01.263.01.a. We takc ollicial notice of our prior Orders approving thc length of tlre
I)ctitioncrs' l'UI(PA conlracts.
()R,Dtit{ NO. i34 t9 ttIt
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25i18 Page L2 of 28
Pctition at 9 (ernphasis aclded). -l'hcy nraintain that use ul thc worcl "shall" makcs it nranclatorl,
that QFs have the authority to dictate the lcngth of IRP contracls.
In thcir rnswcr, the Utilitics asscn thc Petitioncrs rnisrepresent tlie plain language of
section 192.304(dX2) and "authorities related to a legally enlbrceable obligation in an
runsuccessful el'fbrt to creatc a rcquirenrent l'or long-term contractual commilmcnts." Joint
Ansrver at 3 (cnrphasis original), They spccificall,v attack the Pctitioners' claim that section
292.304(d)(2) allorvs a QF to specily the term of the contract. 'l'hey allege that a revielv ol'tlre
section's explicit language reveals that QFs do not have the authority to specify thc lcngth of
IRP-based contracts with utilities. Ansrvcr at 3, 4-6.
Thc lJtilitics included Section 292.304(d) in thcir anslvcr. 'l'his section states in full:
I-.ach clualilying f acility shall have the option either:
l. 'l'o provide energy as the qualilying facility determines snch energy to
bc availahle lbr such purchases. in which case the rates lbr such
purchascs shall bc bascd on the purclrasing utility's avoicled costs
calculatcd at thc timc ol'dclivcrv: or
2. '['o provide energy or capacity over a speciflcd tenn, in u,hich case the
rates for such purchase shall. at thc option of the qualitying facility
exercise prior to thc bcginning of the specified tenn, be based on
cither:
(i) Thc avoidcd costs calculatcd at the tirnc ol'dclivcry; or
(ii) The avoided costs calculalcd at thc timc thc obligation is incurcd.
l8 C.F.R. s{ 292.304(d) (enrphasis addcd). 'fhcy rnaintained thc phrase "over a specified temr"
rxeans thcrc is "a tcrnl" or contract lcngth * not that thc QIr is entitled to specify the length ol'the
contracl. r\nsu,er at 5.
'l'he tJtilitics also obscrvcd that thc Commission's Order recites lhat there was no
dispute among thc parties rcgarding the lact that FERC regulations ''do not dictatc a spccific
rtunrber of'years or establish a lirnc pcriod lbr PURPA contracts." Answer at 4, quoting Order
No. 33357 at 12. I'he Lltilitics asscrtcd that thc PI"JRPA regulations are silcnt as to a specific
conlract length and (lrere is nothing in the regulations thal allow a QF to specifl, the length ol'a
PURPA contract.
Commission Findings: We are not persuacled that the Petitioners' (as qualifying
facilitics) gct to choose thc length or tenn of IRP contracts fbr several reasons. |'irst, PURPA
0RI)UR NO. i3119 t?
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 13 of 28
rcquircs Slatc Cornnrissions to intplctnent I'LiRPA. l6 t.l,S.(l. { 82aa-i(f)(l)l Order 69.45
I'cd.Rcg. at 12.216 ("-l'hc implementation of these [']URPi\] rules is reserved to the State
rcgulatorl' authorities. . . ."). l-his Conrmission has authorit,v to inrplenrent PURPA and "has
discretion in cleterrnining thc nlanner in rvhich thc IPIJRPAI rules rvill be implernented." ldaho
I'ov,er. 15.5 ldaho at 782, :il6 P.id at 1280, t'iting l;l:.ll('r'. ,1/i.r.ri.r.vryryri.456 Ll.S. at 751. It "il
up to the Statcs. ntl- lf;liRC]- to dctenninc 1hc spccitjc paranretcrs ot' individual QF porver
ptrrchase agreements ltluho l}otver. 155 ldaho al 78(r.316 P,3d at l2tl4, quoting Por.s,er
Rcsourc'es Groult t'. PU(l of'T"cxe*,,X22 f.3d 231.238 (5tr'Cir. 2005) (emphasis added).
Since PLJITPA w'as first enactcd. this Commission hars set the lengths tbr PURPA
contracts. Ovcr the y'ears. the Cornmission has set diffbrent contract terms ol'35 years, 20 years,
and as short as 5 y'ears. Order No. 33157 at I I (citatiorrs omitted). In setting conlract lengths,
the Comnrission has "consiclered merny factors (price risks, forecasting uncertainty, financial
nccds, anrortiz.ation. plant durability)." kl. al 12, c'iting Order No. 32125. We lbund in Order
No. 33357 and alflrm in this Order that the Commission has discrction to set the length of
I'tJIlP,,\ contracts. Order No. 33357 at 12. lndeed, the parties did not contest "that PURPA. and
its implementing rcgulations arc silent as to a spccilic contract length. . . . Ilvcn Mr. Wenner
acknowlcdged that FERC rcgulations do nol dictatc a specific nunrbcr of years or establish a
tinrc pcriod for PURI'}A contracts. l'r. at 589." Ordcr No. 33357 at I2 (othcr citations omitted).
Moreover, Clearwater and Sirnplot have tailed to identily any other Stale r.vhere the QI" has the
urrilateral authority to spccily the lcrm ol'a [)tJltl)A conlract^
We reject the Petition$rs' assertion tlrat they may unilaterally choose the lcngth of
their lltl) contracts. As our Idaho Supreme Court has noted on nrany occasions, "[s_ltatutory
intcrprctation bcgins r.vith thc plain mcaning ol'thc statutc. If the statutory Ianguage is clear and
unanrtriguous, this Court necd merely apply thc statute without engaging in statutory
interpretation." llerrnqn t'. I{ernton, 136 Idaho 781,786,41 P.3d 209,215 (2002) (citations
ornittcd). Statutcs and rules must be construcd as a whole. L'ersku v. Suint AlJthonsus Rl,{C,l5l
ldaho 889, 893,26-5 P.3d 502,506 (201l).: ldaho I'au'er r,. ldaho I'UC.102 Idaho 744,754,630
P.2d 442, 452 (1981) (construing PURPA statutes).
It is thc Cornmission that is taskcd rvith inrplcmcnting I'UI{PA. It is the Comnrission
thatapprovesall PURPAcontracts-includingthetermsof sr.rchcontracts. OrderNo. 15746.38
l).U.1{. 4th 352 (ldaho 1980). It is also the ConTnrission that sets and approves the avoided cost
otil)tIt N0. jjdl9 I -''
Case 1:l-8-cv-00236-REB Document 4-5 Filed 06/25ll-8 Page L4 of 28
ratc-s calculated at cither the tinre of deliver."" or iit thc timc the contract or obligation is incurrcd.
l8 C.F.R. sq 291.304(dx2xi-ii). Roschue{ II. 128 ldaho at 613.917 P.2d ar770. The PURPA
rcgulatieins also address lactors to bc considercd in detcrnrining avoidcd costs. [n setting
avoidccl oost rates. the Commission is to consider "the ternrs o1'any contract or other legally
cnlbrceahle ohligation" including the duratiern of the obligation, the tern:ination notice
requiremcnt and sanctions lbr non-compliance." 18 C.F.R. $ 92,304(e)(2Xiii) (emphasis added).
llecause the Commissiou must consicler contract tems in calculating avoided cost rates -
especiallv the length of the contract - rve find that setting the length of the contract is a necessary
requirement that talls to the Cornmission. 'l'his is not to say that all contracls must be ol'the
samc duration. Indectl, as set out abovc. ncither Cleanvater nor Simplot has had a contract rvith
a 20-ycar tcrrn. l;FlllC recognizcs that thcrc nray be instances that rvoulcl iustily a contract lor
tlrc clclivcry of por.vcr '"lbr a onc year pcriocl." 45 Fed.tteg. al 12,226. In addition, our final
Order rccognizcs that thcrc may bc instanccs where a particular lRP-bascd PURPA conlract is
Iongcr than thc standrrd t\.vo ycars. Ordcr No. 33157 at 26. Conscqucntly, Clcarrvater and
Sinrplot's altenrpt to paraphrase Flil{C regulations to their advantage is r.rnavailing. lt is the
C'orrmission's resporlsibility to set the lerrgth of IRP-based I'}l.iltPA contracts.
B. The Length of IRP Contracts
l . 'l l . 'l'hc Pctitioncrs ncxt assert thal
the I:BRC regr"rlalions require "long-term, lixed-price corltracts." Petition at 9 (emphasis added).
'l'lrcy urgc the Commission to continuc to use thc 20-.v'.car contract as the standard IRP contract,
or adopt an "alternativc proposal of a 20-year contracl with an updatc to energy prices , . . in
contract ycar 10." I'etition at 4.5, 15.
l-hc Pctitioncrs asscrt they arc cntitled to long-term PURPA contracts "to encourage
thc sort ol'energy procluction required by I'tJRI'}A." Petition at 9, 'l'hey' rcly on I"ERC's Order
No. 69 that notcs QFs have A "need fbr certaint,v rvith regard to rcturn on investment in new
technologies." Itl. at 9-10. quotitt1145 lred.Reg. at 12.224 (1980); 'l'r. at776. Thcir witness Dr.
Rcading tcstifled thal ll(l)-bascd PUI{l'A contracts of tivc ycars or less would not provide a
sutllcient revenue stream lbr QFs to linance their projects or become economically viable. Tr. at
777-79. IIc indicated that thc'lcngth of thc QF contract is relatecl to "the ability [of the QFJ to
obtain lirncls in order to builcl [the QF.l prcject." 'fr. at 785,
ORDER NO. 33419 l4
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 15 of 28
'l'he titilitics respond that thcrc is nothing in I'}URPA or its inrplementing regulations
that specily an exact contract length. Ansu'cr at 4. 'l'hc5, turther note the Conrmission for.rnd it
was uncontcslcd that "trtiRc regulatiorrs tlo not dictate a specitic number of years or establish a
time pc'riocl lor PLIRPA contracts." ld..quorittg OrderNo. 33357 at I2: 'l'r. at 589. 1'hey assert
that the Commission rclied upon prcccdcnts from our Suprenrc C.'ourt and other federal courts
that held thc Commission has the discreticln in implorcnting PURPA to set the length of such
contracts. ld., citing Ordcr No. 33357 at 2-3, 10. 12, 16,21-22.
Commission Findings: Based uporl oul review of the record, the PTJRPA regulations
ancl our prior Orders, we aflinn our linding in llnerl Order No. 33.i57 that PURI'A and its
implementing rcgulations do not rcquirc a specilic nurnber of years or establish a certain time
pcricrcl fbr l'tJItl)A contracts, Orcler No. 33357 'at 12. 'l'he l'}etitioncrs have not tlirectcd our
attentiorr to any specific conlracl length requirement in the PURPA regulations. In addition, our
review' ol'Ordcr No. 69 rcvcals that thc phrasc "long-tcrnr contract" appears only trvice in the 24
pagcs ol- thc Fcdcral Rcgister and was not furthcr dcflned. Sea 45 Fcd.Rcg. at 12,214. Our
lindings are supported by substantial evidence,
l;irst, rve are unpcrsuadcd by Dr. Rcadirrg's testimony that long-term contracts are
needed to finance Clearwatcr's or Simplot's existing QF projccts. Neither Clearu'ater nor
Sirnplot has had a 20-ycar contract frrr thcir existing lacilitics tlurirrg thc 37 ycars lbr which
P{.lRI'A has been in efl'ect. 'l'hcy have providcd no explanation wlry they need 2O-year contracts
lbr thcir lircilitics. Morcovcr. thcir cxisting facilities cannot reasonably bc considcrcd "ncrv
technologies" as rel'ercnccd by FEIiC.
We spccitically note that Clearu'ater recerrtl)- enlered into a non-PLJI{l'}A agreenlent
lbr thc output ol'its existing lacilities until 2021. 'fhus, Clcarwatcr's existing lacilities are
contractually hound in a non-PURPA contract until 2021 and arc not subject to Order No. 33357
fbr six ycars. 'l'he predccessors of Clearwater and Avista executcd thcir firs1 powcr purchase
contract in I9tl4 tor l0 ycars. Ordcr Ncl. 2-1858. lYu.shinglon Wuler I'oy,er,l26 P.U.R. 4th 61
(1991). Simplot began sclling its por.ver to ldaho Power in l9tt6 and cntercd its tirst long-term
I'UIiPA contract (llve years) with ldaho Power in 1991. OrderNo.23552, 1991 WL 11858077
(ldaho PtlC). The Pctitioners did not scck 20-year contracts in the past and have not persuaded
us on reeonsideration that 20-year contracls lbr their existing facilities are needed now. Indeed,
0Rt)t;tt NO. 3i,1t9 l<
Case 1:18-cv-00236-REB Document 4-5 Filed 06/2511-8 Page LG oI28
Rocky Mountain's witness Mr. Clemcnts testit'ied that all of its cogeneration contracts are lor a
pcriod ol'one year. Tr. trt476-77.
Also, the Petitioners' contenrplation of new PURPA pro.iects does not persuade us to
rctain 20-ycar contracts f crr scvcral re asons. First, wc flnd the Pctitioners' interests in developing
nerv PURPA facilities are speculative and urndeflned. Other than the possible location, neither
Petitioner definitively identit'ied any relevant characteristics of the future projects on which they
premise their argumcnt * fclr example, nowhere docs the rccord contain any information
concerning the exact size of any luture QF lacility nor the proposecl operation date. In particular,
Clearwater and Avista have been having discussions about such a facility tbr more than five
years. 'fr. at77l. While Simplot has askcd for indicative pricing fbr a cogeneration facility up
to 25 MW at its new Caldwell facility, we are unaware of any subsequent progress. Tr. at 769.
While a QF is entitled to a PURPA contract or a legally enfbrceable obligation, its off'er to sell
power to a utility nrust be firnr, binding, and unconditional. Ordcr No.32974;310 P.l.l.R.4th
304 (2014)', Whirchull Wind v. Mottturtu Public Service Connnissittn,34T P.3d 1277 (Mont.
2015); A.W. lJrunnr, l2l Idaho 818,828 P.2d at 847.
Sccond, the Commission found that the standard lRP-based contract of two years was
not an absolute tenn. ln particular, the Comnrissiorr recognizecl there may be justilication for
IRP-based contracts in excess of two years. Order No. 33357 at 26. Both Avista and ldaho
Power lrave tariff schedules approved by this Conrmission (Nos. 62 and 73, respectively) that
specify the PURPA negotiation process for otrtaining a proposed PURPA contract. QFs are
certainly liee to seek longer contracts if justified on a case-by-case basis. Consequently, at this
.iuncture the Petitioners are not foreclosed liom seeking longer contracts fbr their tentativc
projects. Order No. 33357 at 28:. citinN Tr. at 876, 881 .
Third, the Commission for.rnd that any asserted necd for }O-year conlracts was
mitigated by thc "rnust purchase" provision of PURPA. Orcler No. 33357 at 23; 16 U.S.C. $
824a-3(b); l8 C.F.R. $ 292.303(a). "PURPA's'must purchase'prr:vision rcquires the utility to
continue to purchase the QF's power." Ordcr No. 33357 at 25. As long as the projects continue
to offer power to utilities, utilities must continue to purchass such power under PURPA. And as
long as PURPA remains the law, the ability for QFs to earn a return remains. The shortening of
contracr length is nclt intended to inhibit a QF's ability to recover its investment. Rather the
shortenirrg of contract length tunctions as a rleans of ensuring that avoided costs remain 'Just
ORDHR NO. 33'II9 l6
Case 1:18-cv-00236-REB Document 4-5 Filed 06/2511-8 Page 17 ol28
.rncl reasouable to the clcctric consurner of tlrc clcctric utilit.r'and in thc public interest" (16
1l.S.C. ss tl24a-j(b)(l)) and serves ''to nraintain a lnorc ilccurate rcl'lcction t-rf the actual costs
ar,oidccl [r1'tlrc utilitl,ovcr thc Iortg-tr.:rrrt." Ordcr Nrl. 33357 at ]i.
Irourth. the Cornmission concluded that it rvas unrcasonable to continuc 20-,vear IRP-
based I'tiRP;\ contracts whcn utilitics lravc no need tbr additional capacity. See Citt, ol'
Ket<'hikan, .,llusku,94 [;ERC'!l 61.293 at 62.061 (2001) ("there is no obligation under PURPA
Ior a utilitl,to pa]'lbrcapacity that rvould displace its existing capacity'arangemcnts" and "tlrere
is no obligation under PURPA fbr a utility' to enter contracts to rnakc purchases which would
result in ratcs rvhich arc not 'iust and reasonable to electric consunrers of the electric utility' ancl
in thc public interest' or w'hich cxcccd 'the incrcmcntal cost to the electric utility of alterrative
energ.v."'). 'l'he Cornrnissiorr lbund that both ldaho l)owcr and l)acil'iCr)rp prcscrllcd persuasive
cvidcncc ol" capacity surpluscs. Morc spcciticalll'. the Conrnrission fbr"rnd that thcsc "trvo
utilities have clenronstratcd that thcir sr"rppl1, ol'PtJItPA and non-PIIRPA power exceeds their
crrrrerrtilvcragcloads.'' OrderNo.33i57al24,ciling'l'r.atlll.ll7,9il. IdahoPower'ssenior
vice prcsitlcnt testificd that Iclaho Porver's P[JItPA and r:on-PURI)A renewable resources
(approxirnatcly I.297 MW) cqualcd about 40oA ot'its 2014 systcrn pcak-load and w'as equal tcr
about 120%t of it 2014 mininrum systcm loacl. Ordcr No. 33357 at l.i, citing Tr. at lll. I77;
iixh. I I at 2. She testifred it r.vas unrcasonablc lirr ldaho Powcr to cnter into long-ternr, lixed-
rate contracts whcn [hc Companl'does not need additional generation. Id., ciling Tr. at 117. l1q.
Ilocky \{ountain's rvitncss also testificd his company has no nced fbr additional
gcnerationuntil 2028. OrdcrNo.33357arl(>.citing"I'r.at429.'['heCommissionlbundthatil'
all the proposccl IRP-based conlracts leir li.ocky Mourrtain werc to beconre operational, thcn the
utility's existing and proposed PURPA contracts r.vould bc cnough to suppli, 108% of
PaciliCorp's average retail load antl275ah of its nrinirnum rctail loacl in Idaho 2014. OrdcrNo.
33357 al 16, c'iting'l'r. at 427. l'hc Commission fbund tliat the abundance of PURPA generation
extends the utilities'capacity surpluses to2024 tbr Idaho Power and 2028 lor PaciflCorp." /r/. at
24.s Wc find thcsc statistics persuasive that 20-ycar contracts are unjust and contrary to thc
public intercst.
Irilih. the Cornmission lbund it unrcasonable to continuc to autlrorizc 20-ycar
conlracts givcn the proposition tlrat avoided cost rates fbr IRP projects are declining. Order No.
5 Avista has a capacity surplus until 2020. Order No. i30l.l at 3
ORT)ER NO. 3],II9 l7
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 18 of 28
ii357 at 22. ciring 'Ir. at 160-61:372,610-31:641. Contirtring to allorv QI"s to [ock in tixed-
rrlte corltracts filr 20 1'ears "rvill 'overcstirnatc' futurc avoidecl cost rates collected ironr the
r,rtilitics' ratcpavcrs. IJccausc o1'the 2O-year ternr ot'thc current IRP-based contracts. this
'overestimation' rvill beconre rnore signilicant ovcr tlre [20-;"ear] duration of thc contract." .IrL at
23. (iil'en the projectcd dccline in avoiclcd costs. lhc Comnrission lirund ancl we alllrrn on
reconsidcration that 20-ycar contracts rvill result in unjust and unreasonable rates f'or utiliti,
riltopnycrs and arc no longer in thc pubiic intcrcst. l(r LJ.S,C. $ 82aa-3(b)11).6 Thus, substantial
and compctcnt cvidcnce supports our conclusions that 20-year conlracts rvill result in long-ternr
avoiclcd cost rates that exceecl the utility's incremental costs. thus running alirul ol'the larv. /r/. at
824a-3(b).
2. 'l'hg l)ctitioncrs' 20-Year Altcrnative. 'l'he Petitioners also objected to the
Cumnrission's rejection ol their alternative proposal to maintairr thc 20-year contract but adjust
thc energy rate. On reconsideration. they propose a dilll'rcnt 20-year alternalive where the
Commission could "re-pricc thc cncrgy componcnt of ncrv contracts in year l0 of thc contract
whilc lcaving the capacity rate llxed lbr the cntire 2O-year tenn." Petition al4,5.
Commission Findings: First. rve obscrvc that thc I)ctiticlncrs' allcmative proposal on
reconsidcration is at odcls with r.vhat they actually proposed in their testimony at hearing. At the
tcchnical hearing. I)r. Itcading rccomrncnclec'l that:
"l"hc Conrmission maintain a 20-;-ear contract length rvith thc capacity
c()mponcnt ol'the ratc lixed tbr the entire 20-ye.rr tenn. Ilor.vever. as a
conrprornisc, thc cnu:gy*perrtion of the rate rvould onl.v- be fixcd thc tirst l0
):gals of'the contract. Alter ths first l0 years. thc cnerg-y comnonent would_bg
recalcplaled each.y-ear adhcring to thc Commission-approved method tbr the
remaining term of thc contract.
'l'r. at 842 (emphasis added); Orcler No. 33357 at 23. In other words, thc energy rate rvoultj be
adjustccl annually in cach of thc last tcn ycars of thc contract. 'l'he Petitioners either
rnischaracterized their alternative proposed at hearing or now on rcconsideration advance a
dil'l-crent 20-year alternative, one ot'fcred by thc Idaho Conservation l,eaguelSicrra Club's
rvitncss. Vfr. Beach. At hearing. he suggested that the Clomrnission "make a single adjustment in
" Thc Petitioncrs' rcliancc on the Hy'clrocl)'namic.r, Oedar Orcek ll'ind, and New, York State Electric ct Gas cases is
nrisplaccd. l'hesc cascs are not relevant to the issue ol' contract length and are tactually distinguishable.
llt'droth'nomics. l.16'1i 61,193 l). 3l (1014)' Oedur ('reek ll'ind, 137 l;t:ltc ti 61.006, P. 32 (201l);.Vcrt, Yark Stare
El<'ctric cQ (ias (.'orp.,7l f lrR.C tr 61,0:7. 6l,l Li-16 (199.5).
ORDlllt NC). l11l9 r8
Case L:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 19 of 28
the ll'r'year ol a 20-year contrilct." Order No. 33-157 at23. t'itittli Tr. at 702. Once reset, the
energy rate "for Years I I -20 would continue to hc fixed." /r/.
We fincl the Petitioners' new altemative oflerecl on reconsideration suflers lrom tlre
same defect wc prcviously iclentitied in Order No. 33357 and outlinecl ahove. "An adjustable
rate contract runs the risk of violating FERC regulations that nrandate a 'fixed rate' at the time ol'
contracting." Order No. 33357 at 24. Further, as long-ternr avoided cost rates continue to
decline, contracts of 20 years will "'overestimate [the]' luture avoided costs collected from the
utilities' ratepayers." Order No. 33357 at 23. This "overestimation" of future avoided costs will
become morc significant over the duration of the 20-year alternative proposed by the Petitioners
on rcconsideration. /d. The Petitioners' proposed alternative to adjust energy rates a single tirnc
at the mid-point of a 2O-year contr&ct does not mitigate our concerns. Finally, "the sanre result
can be acconrplished through successive short-term contracts" without the risk of violating
FERC regulations or unreasonably burdening customers. ld.
Consequently, we affirm our decisions and trndings set out in Order No. 33357.
The re is substantial ancl compctcnt evidence to support our findings thtrt two-year standard IRP-
bascd contracts are fair and reasonable, absent circumstances that would justify an exemption to
the standard length.
C. The 8f is Provided a Capacity Rate and
the Capacity Adjustment daes not Bind l'uture Commissions
In their Petition tbr Reconsideration, Clearwater and Simplot insist that the two-year
contract does not provide QFs rvith a capacity rate, and that the Commission's capacity
adjustment is legally defective. The Petitioners maintain these "errors" caused by the two-year
contract and the capacity adjustment justify the retLlrn to 20-year contracts or their alternative
proposal that re-prices avoided cost energy rates in the middle of the ZA-year contract. Petition
ar l2-15.
l. The Two-Year Contract Provides a Capacity Rate. The Petitioners acknowledge
the two-year IRP contract allows lbr short-term, fixed-price compensation for energy but they
argue the Order provides "no price at all fbr capacity and thereby deprives the QF o[ the right to
sell capacity." Petition at l2 (crnphasis added). They insist that a QF is deprived of a 'tlxed
contract price for its energy und capacity at the outset of its obligation' because . . . a two-year
ORDEII NO. 33419 t9
Case 1:18-cv-00236-REB Document 4-5 Filed 06/2511-8 Page 20 of 28
corrtract rvill not providc a price for capacity that is llxcd at this timc." l<1. at 12 litalics original
:lrtd citalions onrittcd).
'l'hc tJtilities oft'er three argurncnts in responsc. Irirst. thc tjtilities assert thc
Petitioners have rnisconstnred the Comrnission's tinal Ordcr No, 33-i57. "[hey' maintain that thc
Ordcr rvars not intc'ndcd to cstablish avoided cost rates. "['l'hc Orclerl is limited to addressing the
nraxinrurn contract length." Ansr,ver at 7. r\ctual avoided cost ratcs, fbr both avoided energy and
avoiclcrd capacity, are estahlished in olhcr Clommission Orclers and through tl,e Commission's
appror.'al of individual contracts.
Seconcl, tlre t.ltilitics maintain that thc Petitior:ers' allegation that Order No. 33357
docs not set a capacity ratc. is rcally an impermissiblc collateral attack on the Comnrission's
prior Orclcrs that do establish avoided cost rates lbr both capacity and energy, in IRP-bascd
contracts. Idaho ('orlc r\ 6l-625 (tinal and conclusivc ordc-rs of the Conrmission "shall not bc
attacked collatcrally''). Thc tltilities insist tlrat avoided cost rates lor capacity (or energv) are
sirrrply not rclevant to this procccding. ld. at 7 .
'l'hird. the Utilities nraintain that rvhen a utility has a capacity surplus, thcn the
"capacity corxponent of the avoidcd cost pricc Iis] zcro. 'l'hc cc is not
sct at zcro bccause the utility it--c1pa_cit}' s-U!]cient." Id. at 8 (emphasis added). Thc tJtilities
cxplain that a QIt is only cntitlcd to capacity ratcs rvhcn thc utility has a nccd lbr additional
generation or llrm powcr purchascs - i.c.. rvhcn a QF contributes capacity to a utiliti, with a
capacity clclicicncy. thcn thc avoidcd cosl r{tcs firr the ql: "rvill includc both avoidqcl energy and
cirpacity f ratcsl." ld., c'ititr5q'[r.'at 276.
'l'l:e Litilities conclude that the (lommission's capacity ad.iustmcnt was intencled to
recogr"rizc thal thc QF rvill bc cligiblc 1o rcccivc capacity rates when the utility is no longer
capacitv clcllcicnt. 'l'hey insist this is a bencllt to Ql"'s in that it allows a Qlr to establish a right to
capacity paymcnts at the time the initial IltP-bascd contract is signcd or the obligation is
incurred. Answcr at 8. 1'hcy cluote tionr the Commission's Order:
As long as the QI" renervs its contract and continuously sclls po\ /cr to thc
utility', the QF is entitled to capacity Ipa.vments] based on the capacity
dcliciency' date established at {he time ol'[the QF's.l initial contract.
Ordcr No. 33357 at 25-?6. 'l'hcy maintain thc primary dillerencc hetrvcen the Commission's
prcviously established 2O-year tentt and the two-year contract tcrnr cstablished in Order No.
OItl)l:ll NO. jj1l9 20
Case 1:l-8-cv-00236-REB Document 4-5 Filed 06/2511-8 Page 2L oI28
33i57, is that the al'oidcd cosl. ratcs "arc re licshed at each two-\'r'ar contrilct intcrval. rathcr tharr
bcinu crronctlusll' cstimatcd and lockcd-in ovcr 20 years." Ansrvcr at 8.
Commission lrindings: Wc arrc unpersuadccl b1,'thc l)ctitioners' capacitl,adjustmeut
argumcnts tbr several reasons. Iirst, thc capacit,n* adjustmcnt does not apply to Petitioners'
existing lacilities. Because tlrc existing Clearrvater and Sinrplot lacililies already corrtributc
capacitv to Avista and Idaho Power respectivell'. thcy hoth currently receive, and remain eligible
to receir,'e. capacitl' paymerlts rvhcn their cxisling contracts are rsncgotiated and renewed.
Indccd. thc Pctitioners conccdc that rcno.val contracts tbr their cxisting QF l'acilitics rvould
continue to reccivc conrpcnsation lbr capacity under the Commission's Order No, 33357.
Pctition at 4.
Second. the Petitioners also misconstruc thc nrcclranics ol'the capacity adjustnrent as
thcy relatc to any ncw, unbuilt futurc Q[; projects. lf thc utility has a capacity surplus, thcn a
first-tirnc QF cntering into its initial tr.vo-year IRP contract is not cligible to receive any payntent
lbr capacity. I'lorvcvcr, if thc purchasing Lrtilily has a capacity deficit in the initialor subsequent
two-),ear contract, tl,cn the QF is eligible to rcceivc capacity payments liorn that point lbrward.
Iloth l:lll{C ancl this Ccrmnrissi<tn have a long-standing practicc of allor.ving QIrs to obtain
capucity payments only when the utility is or
hcconres capacity dcficicnt. If a utili1."- is capacity surplus. then capacity is not
heing avoidcd by the purchase of QF power. By including a capacity payment
only rvhen the utility becomes capacity delicient, the utilities are paying ratcs
that are a more accurate rel'lcction ol'a true avoided cost lbr the Qlj power.
Order No.33357 at 25" tluoting Order No.32697 at 2l:Tr. at 586-87, 'Ihus. if a utility has a
capacity surplus during tlre entire two years ol'an IItP-bascd contract" a Q[; is not eligiblc 1o
reccivc a capacity paymenl. In practical tenns. thc avoidcd cost capacitv ratc in this cxample is
zero.
As I:I:RC statcd in its Ordcr No. 69. avoidcd cost ratcs nccd not include capacity
custs unless the Ql: purchase rvill pernrit the utility to avoid builcling or buying luture capacity.
Order No. 69.,15 Fed.t{cg. al 12,225-?(t. "[(-]lapacity paymcnts can only be required whcn the
availability.ol'capacity lrorn a [QFl actually permits the purchasing utility to reduce its neeti to
proviclc capacity' by dclcrring thc construclion ol'ncrv plant clr commitmcnts to llrm powcr
purchasc contracts." ld. While the utility may have an obligation under PURPA to purchase
()RI)[R NO. i-]'ll9 21
Case 1:18-cv-00236-REB Document 4-5 Filed 06/2511-8 Page 22 oI28
powcr l'rom a QI;. "that obligation does not reiluirc a utility' to pay lbr capacity' that it does not
necd." Cit.t, o./' Katchikun.9,l FIIRC'!1 61.293 at *6.
2. liorccasted . Cirpacity* ILatcs. 'l-he Petitioners also argue that PURPA's
imple'rnenting rcgulations ontitlc thcm to a lbrccasted capacitl, ratc u,hen thcy' cnter into their
coutact/ohligation. I"or extrmple. il'Clearu'aier or Sinrplot cntcrs into a contract tbr their unbuilt
and speculativc lacilities to be el ctive in 2015 but thc utility has a capacity surplus until 2024,
tlre Petitioners arglrc they are entitled to a llture capacity rate lbr 2024. when the utility is
capacity deficicnt. 'l'hcy allege that this lack of a fbrecastcd capacity rate calculatcd at the tirnc
lhcy erlter into lheir contract "is obviously rrot what FERC had in rnind rvhen it stated its
ll'}UItPA regulation] provides each Q[; with ar'capncity crcdit'through lsic] in a'tjxed contract
price at the outset ol' its obligation' that provides 'certainty u,ith regard to return on
investnrent."' Pe-tition at 14, tiling 45 lrcd.ltcg. at 12,224. 'l'hey assert the capacity acljustnrcnt
does not cornply rvith section 292.301(b) which ''requires that the QF bc provided a fixed price
to sell that capacity at the lime ol'commcnccrncnt o1'the lcontract orJ obligation - not a rate
calculatcd . . . scveral years from now." Petition at 14.
Commission l-ittdings: We find thc l)ctitioners rlisunclcrstand our Orrler and ITERCI
rcgulations. 'fhe regulations provide thal a QF has the option to either provide energy or
ca;;acitv as availablc. or at ar,oided cost rates calculatcd "over [the] specilicd term." I8 C.l:.R. s\
292.304(dXI), (2). Ilthe QI' chooses to sell powcr to thc utility ovcr a specified terrn, thc Ql;
may havc the rates calculerted lirr the !eln) at either "the tinrc ol'cleliver.v: or . . . at the tirne the
obligation is incurred." l8 C:.F.R. $ 292.304(dX2Xl-l l). ln Ordcr No. 33ji57, wc detcnnincd
that "tlrc speciliccl tcrm" lbr ncr.v stattdard IRP-based contracts is two ycars. Thus. Cleanvater
and Sirnplot are entitled to reccivc avoidcd cost capacity rates lbr thc specified tetm calculated at
cither the tir:re ol'dclir,cry or at the time thcy enter into their contract/obligation.
We also directcd the Utilities to establish their capacity dclicicncy datc rvhen a QF's
initial lRl'-based contract is signed. Order No. 33357 aL 25-26. This capacity adjustment
tnechanisnr recognizcs that if a QIr continucs to provide energy to a utility through w'hen thc
utilit,v r.vould othenvise experience a capacity delicicncy, the QF' will be paid lor its capacity
contribution. []ut until a Q[; cnters into a contract during r.vhich that capacity deticit date occurs.
the avoided cost capacity rate is zero.
ORI)I'tT NO. JJ4I9 11
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 23 of 28
As iv{r. Wcnner opined. a Ql; '"is entitled to reccive [capacity] rates based on the
c:apaciry cost that the utilitl, can avoid as a result of its obtaining capacity liom the [QFl." Tr. at
586. tluotitt5l -15 lred.llcg, at 12.2?5. A capacit,"- ratc calculatcd a1 thc start ol-cach specitierl ternr
rathcr than upon a QF's initial ctlntract. is a truer ref'lection of the utility's avoided cost fbr
capacity. 'l'he capacity adjustrncnt mcchanism thus ensurcs the Q!'receivcs the lirtl avoidecl cost
of the utility, consistent r.vith FERC regulations.
Notably, FIRC comments draltcd at thc tirne it u,as issuing its Pt)ttPA regulations
providcd:
[r]iRCll rccugnizcs that thc translation ol'the principlc of avoidecl capacity
costs liorn thcory- intr: practicc is an cxtremcly dilllcult exercise. ancl is one
rvhich. by dclinition. is bascd on cstimation and lirrecasting ol' luturc
occurrences.
Accorclingly, [;nRCl supports thc rccornmcndation nrade in thc Stat]'
Discussion Paper that it should leave to the Statcs and nonrcgulatcd utilitics
"fl exibility lirr experimerttatiorr and accornnrodation ol" spccial circumstances"
with regard to implenrentation ol'ratcs lbr purchases. 'l'herefbre. to the extent
that a method ol- calculating thc valuc of capacity liom [QI:s] reasonably
accounts for thc utility's avoidcd costs, and does not fuil to provide the
rccluircd encouragcnrcnt ol'cogcncration and snrall powcr production, it will
be considered as satisfactorily irnplcmcnting thc Comn'rission's rulcs.
45 l;ed.Reg. at 12.2?6.
As sct out in C)rdcr No. 33357. Idaho has bccn vcry successlul in encouraging the
developmerrt ol'renewal QF power. Our changes in this clocket are simply intendcd to cnsure the
utility is ltot paying morc than its actual avoidcd costs lvhen purchasing QF powcr.
3. 'l'he Capacjty Adjustment does nqt Bind_Futurs Commissions. Simplot and
Clearwatcr also arguc that thc Conrmissiorr's capacity adiustmcnt suf'fers frorn legal dcftcts.
fhe,v argue that this Comnrission cannol bind a luturc Commission to a capacity deficiency date
at an-v particulur point in a hypothctical lirturc I'}URPn contract. l'etition at 13. In other rvords.
they allege (he present Commission cannot set a future capacity deficienc,,- date in a luturc 2023
contracl. 'fhey insist the QFs cannot rcasonably rcly on thc Clomnrission's non-binding decision
to support thc QIl's right to sell its capacity in a hypothetical 2023 contract. Petition at 14. They
argue in a lbotnote that the "reserved powers cloclrine" limits the ability of the Comnrission to
ORDL.R NO. 334 r9
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 24 of 28
bind a lirturc Conrnrissiorr. Scc: Petition aI fbotnotc' I. 'l'hc titilitics do not rcspond to this
spccilic argumcnt.
Contmissittn Findings: l,inder tlre reserved porvcrs doctrirre, "a state govemment
may'not contrirct cway o'411 essential attribute ol'its sor.creignty." {,i.S. r'. ll'inslur Corp.,5l8
ti.S.839.88ti (1996).c'itingUtriretl StutesTnt.vt('o. r,.;Vcu,.lersey'.431 U.S. 1.23 11977). Such
"esscntial attributcs" ol state sovereigntl, include the power of emincnt dornain, and the power to
policc. 'l'his "por"'er to policc" is conrmonly rel'crlcd 10 as a state's police power. In ldaho. the
Conrrnission exercises legislative police porver rvhen setting rates. Coeur cl'llcne Dairy Aueen
v, Stuta lnsurunt'e l;uru|. 154 Idaho 379. 3115,299 P.3d 186, 192 (2013\. Iduho I'ov,er & Light
('o. y. lllonryuisr,26 ldaho 222,258.141 l.,. 1083, 1091 (1914). 'l'he Cornmission's regulation of'
utility rales set by private contract is subject (o such police power. Ag,riculturul Proeluc't.u CrtrSt.
,t'. Llttth I'ovar & Lighr ('o..98 ldaho 1.3.29.557 P.2d 617.623 (1976).7
'l"lrc related cloctrine ol"'unnristakability" providcs. "absent an 'unmistakable'
provision to the contrarv. 'conlractual arrangements. including thosc to rvhich a sovereign itself
is a par1y. renrain subject to subsequent legislation by the sovercign."'lllinstur.5l8 U.S. a1877.
citing llowan v. l'ublic Ag,encie,u Oppo,rcd to Soc'iul Scctrrity lintrupmcnt,4TT tJ.S. 41,57 (1q86)
( internal quotations omittcd).
Wc bclicvc neither doctrine applies in this I)URI)A case. I:irst, the Commission's
capacity ad.iustnrent is not a "contract" rvhere the Comnrission is a party to thc contract. The
capacity ad.iustrncnt is also no1 a ''ralc." lt is a mcchanism used tcl determine when a ne\!'QF in
an IIIP controct is eligible to receive capacity paymcnls. It is ahvays true that the Commission
cnrr cxcrc:ise its authority to change a ruling in a subscclucnt decision, just .rs a state legislature
can change a law. Our Suprernc Clourt has held on numerous occasiorrs that the Commission is
notrigorousll'bounil bvthedoctrineol'.vturetleci,si.t'. lduhrtPrnt'cr,l55 Idahoat1286,3l6P,3d
at 788; l.lc'i\'cal-lduho P{iC,l42 Idaho 685,690, 132 P.3d 442.447 (2006). Flow'cvcr, when the
Conrmission departs tiom a previously-cstablishcd policl,'. it nrust explain its departure l}om
prior rulings so tl"lat a revierving coufi can detcrmine that the decision to change is not arbitrary
or caprici<rus. Inlerrnountctin Gus Co. r'. Iduho PUC,97 Idaho I13, I19, 540 P.2d 775,781
t'lhc Conrnrissiorr may only interfere with the utility's contract if i1 flnd.s that a rate is so lorv or so high as to
advcrscly,atfect the public interest; "where it rnight impair the flnancial ability of the public utility to continue its
service, cast upon other corrsurners an cxcessive burden, or be unduly discrinrinatory." Ilunker l-lill Co. v.
lfu.shingtott ll/uter l'otver Oo.,98 Idaho 1,19,251,56 I P.2d i9l. 395 (1997) (quoting the clcmcnts of the Sicna-
Mobile Doctrinc .-rc>nt l)'ederul Pou'er ('ommi.ssion v. Sierru Pctc. Power (.1o.,350 L,.S. 348, 3-55 (1956).
ORDBR NO, ]34Iq a/:.|
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 25 ot 28
(1975). So k:ng as the Conrnrission adequately explains its eleparture, "orders based upon
positions substantially different than those taken in previous proccedings can be upheld." /r/.
Such authr:rity does not dirninish the "legal effect" of the Commission's decision,
from any perspective. fhc determinations and rulings in a final C)rcler are binding on the
a{t'ected utilities until they are changed or rescinded in the future. Idaho Codc $S il-4A6 (every
utility "shall obey and comply with each and every order, decision, direction, rule or regulation .
. . "). To the extent ClearwaterlSirnplot mean to assert that the Commission's decision has no
"practical el'f'ect" from a QF's perspective, because a future Cornmission could enter a cont[aly
decision, the same could be said ot' any existing QF contract, any Commissicln decision, or
indeed any law. Thus, we reject thc Pctitioners clainrs of a legal del'ect.
D. The Capacity Adjushnent is Supported by
Substantial Evidence tn the Record
Finally, the Petitioners asseft that the Commission's capacity adjustment was not
advocated by any party and therefore falls outside the record. They allege that no party
discussed this idea in testimony and no party has had an opportunity to address it. They insist
that the "Commission's findings and conclusions must be made upon the record developed
beforc it, and lhat when an administrative agency strays ti'om the records its lindings are not
supportable on review." Petition at 16.
The Utilities assert that this argument is without merit. They note that the
Comrnission received extensive testimony from the Petitioners' witness Dr. Reading and fronr
the Sierra Clr"rb's witness Mr. Wenner regarding the need to compensate QFs for capacity.
Answer at 9-10, citingTr. al773-79,583-601. The Utilities also argue that the Commission's
resolution of disputed issues is not so strictly limited to relief thert "was exactly proposed or
suggested by the parties, 'l'he Cornmission is tiee to act within it authority anel discretion, based
on the evidence befbre it." ld.
Commission Findings: Despite the Petitir:ners' iugument to the contrary, the
Commission's capacity adjustment was specifically designed to ensure that the reduction in the
standard-length IRP contract from 20 years to two years does not permit Utilities to avoid their
obligation to make capacity payments to QFs "in the Iirst year the utility has an identified
[capacity] deficiency." Tr. at 701. As Mr. Wenner explained, FERC's PLIRPA regulations
require QFs to bc paid for capacity when the QF is providing capacity that enables the utility to
ORDER NO. 33419 25
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 26 of 28
avoicl or lirrcgo thc constructior: of tte\\: gcncr'..lting tacilifics orlhe purchasc ol llrm power. /rL at
587. Quoting lior:r I]ERC's Order No. 69, Mr. Wcmer testilled that a QF "is entitled to receive
Icapacity'l ratc's bascd on thc capacity'cost that thc utilitl,can avoid as a result ol'its obtaining
capacitv ll'ernr the l'Qf l." 'l'r. at 586. quotins 45 Fed.Rcg. at 12.22,5. IIe insisted that if QF
cofitracts arc linrited to two )'ears. thcn "that powcr cannot be cclunted on to be irvailable alier
nvo vears. . . ." 'l'r. at 587. fhe Petitiorters'u'itness Dr. Reading also objected to thc rccluction
in thc lcngth ol IRP contracts, [-lc opincd that il' IRl'-based contracts are shortened to llvc or
lerver years, the QIr will not bc able to cause the utility to avoid futurc capacity additions. 'l'r. at
777.778-79. Ilc argucd that thc shortened contract length is dcsigncd to deprive capacity
pa.vmcnts to thc QF'. /r/. at 786.
(iir.en these conccrns about capacity and capacity ylaynrents. the Comnrission
Iashioned its capacity ad.iustmcnt to remedy these conccrns exprcsscd by thc partics. Consistent
rvith Ir'[rRC rcgulations and our Orders. a utility is required to pay lbr capacity contributed by the
QF when the utility' no longer has a caprcit.v" surplus. Order No. 33.i57 at ?5-76, citing Order
No. 32697 at 2l. Whilc tlrc ''must purcharse" provision rcquires utilities to purchase capacity and
encrgy liom a Ql''. "that obligation does not rcquirc a utility to pay ttlr capacity that it docs not
neecl." ('it1'ol Kett'hikun.9-t FI:RC 1(r1.293 at *6. When a QF enters into its initial
contractlobligation rvith thc utility, thc capacitl' adjustment cntitlcs thc QI,' to knou' the exact
date rvhcn it "vill be eligiblc to receive capacity paymcnts as long as the QF corrtinues to
contributc to the utilitl' resource stack. '['hus. thc Comnrission created thc adjustnrent in
conjunction with thc standard two-year term fbr IRP-based conlracts to prevcnt utilities tiom
circumvcnting their ohligations to pay lbr capacity when the utility becomes capacity deficient.
'l'hc Commission's capacity,adjustnrcnt is bascd upon ample evidence in the rccord
olfcrcd by the Petitioners and othcr parties, and comports with I;'llRC regulations requiring
utilities to makc avoidcd cost capacity payments to thc QF al timcs rvhen the utility is capacity
dclicicnt. 'l'he Idaho Suprerne Court will uphold the Clornmission's tindings of lact if thcy are
supported by suhslantial, conrpctent cvidence. Idufut I'ower,755 ldaho al787,316 P.3d at I285;
Ro,rehud ll. 128 ldaho at 618. 917 P.ltl at 775. In both Order No. i3357 and hcre. the
Comnrission lras explainccl its reasoning uscd to reach its conclusions basecl on substantial and
cornpetent evidence liom the record belbre it.
0Rt)t.tR NO. 331r9 26
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25118 Page 27 ol28
Given thc totalitl' ol'the evidence in thc record, r.vc afllrm our llnclings in linal Ordcr
No. 3i357 that it is reasonable and consistent wilh I'}tJl{l'}A that thc standard IRP contract be
rcducccl liorn 20 ).'cars to two years. It is unconteslecl that utilities do not need additional
gencrating capacity ancl that PI.JIf.PA and non-PLJRPA generation exceeds Idaho Power's and
Ilockl, Vlountain's nrinimur:r avcrage loads. More importantl5,. given thc undisputed evidencc
that avoidcd costs are decreasing, retaining lixed rates tbr 20 years would violate PURI'A"s
Section ?10(b) mandate that avoided costs rates shall nt'rt exceed a utility's avoided costs. We
find that thc I'}ctitioncrs' altcrnativc proposal to adjust cncrgy ratcs one tinrc in thc middlc of a
20-year colttract is not consistcnl rvith l'}URPA's intent or FERC's regulations. Consequently.
thc Clomnrission denies Sirnplot's and Clcarwatcr's request to rctain 20-ycar terms fbr IRP-based
c()ntracts.
OI{DEIT
I'f IS lllrRIliSY ORDIiRED that Clcarwatcr's and Simplot's rcquest to arncncl l-rnal
Ordcr No. i3157 is dcniccl. 'l'hc Ccurmission dcclincs their rcqrrest to continue a 20-year term
Ibr Il{l'-bascd contracts or to adopt their alternative proposal on reconsideration to adjust energy
ratcs onc tinrc at thc nrid-point ol'a 20-ycar contract.
IT IS FUI{'I'HIIR ORDHRED that the Petitioners' other issues raised in their Petition
lbr Ileconsidcration are dismissed as set out in the body of this Order,
T'l IIS IS A ITINAI- ORDITR ON RIICONSIDERz\TION. Any party aggrievcd by this
ljnal Ordcr on Reconsideration or other {ir,al or interlocutory Orders previously issued in this
Case Nos. II)C-ti-15-01, AVtl-[-15-01, and PAC-[-15-03 may appeal to thc Suprcmc Court of'
Idaho pursuant to the Puhlic Utilitics [,arv and thc ldaho Appellate Rules. See lclqho ('ode $ 6l-
627.
ORI)lllt NO. 31419 ?7
Case 1:18-cv-00236-REB Document 4-5 Filed 06/25ll-8 Page 28 of 28
I)ONII by Orclcr of thc ltlalio Public Lltilities Clormnissiol) at Boise. Iclaho this 5f"
dav ofNovcnrbcr 201 5.
l,ALil_ KJIt..
('crmi$ktueLSfiith ditl not na|ticttute in this casq".
MAII.SI"IA I-1. SMIl'H. COIV{MISSIONER
K TTAPEI{.SIONER
A I"t'tiS'l':
O:lPC'-[:-l5-01 .AVt.r-t;-15-0t Pn('-[-15-0]. dh1_ !'inal Rcconsitlcr;rlion
oRDI-.t{ N0. 311r9 28
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( ontmrssrrln Sdcrclary
Case 1:18-cv-00236-REB Document 4-6 Filed 06/25118 page 1of 13
Offrce of the Secretary
Service Date
July 13,2017
Bf,FORE TI{E IDAHO PUBLTC UTILITIES COMMTSSION
IN THE MATTER OF THN PETITION OT
IDAHO POWER COMPANY FOR A
DECLARATORY ORDER REGARDING
PROPER CONTRACT TERMS,
CONDITIONS, AND AVOIDED COST
PRICING FOR BATTERY STORAGE
FACILITIES
CASE NO. IPC.E-17-01
)
)
)
)
)
)
)
ORDER NO. 3378s
On February 27,2017, Idaho Power Company filed a Petition asking the Commission
to issue a Declaratory Order regarding proper contract tcrms, conditions, and avoided cost
pricing for five battery storage facilitics requesting contracts under thc Public Utility Regulatory
Policies Act of 1978 (PURPA). The Commission issued a Notice of Petition and Notice of
Modified Procedure setting deadlines for comments from the battery storage facilities, affected
utilities, Staff, and any interested persons. Order No. 33729. The Commission also granted a
joint Petition to Intervenc by Sierra Club and Idaho Conservation League (ICL)" Order No.
33743.
The Cornmission rcceived comments from the battery storage facilities - Franklin
Energy, LLC and tslack Mesa, LLC * fbllowed by comments Ilom Commission Staff, Avista
Corporation, Sierra Club/tdaho Conservation League (lCL), and Idaho Power. Each of the
parties, except Black Mesa, also filed reply comments. See Order No. 33765 (granting Franklin
Bnergy's unopposed Motion to extend deadline fcrr reply commcnts). With this Order, the
Commission grants IPC's request for a Declaratory Ordcr.
BACKGROUND: PUBLIC UTILITY REGULATORY POLICIES ACT
PURPA was passed as part of the National Energy Act of 1978. The Act's goals
include the encouragernent ofelectric cnergy conservation, efficient use ofresources by electric
utilities, and equitable retail rates for electric consurners, as well as the improvement of elecuic
service reliability. l6 U.S.C. $ 2601 (F'indings). Under the Act, the Federal Energy Regulatory
Commission (FERC) prescribes "broad, generally applicable rules" fbr PURPA's
implementation. Portland General Electric Cct. v. FERC,854 F.3d 692, (D.C. Cir. 2017); 16
U.S.C. $ 824a-3(a), (b). The Act also "requires state public-utility commissions to implement
FERC's rules at the local level." Portland General Electric, 854 !-.3d 692; 16 U.S.C. $ 824a-
3(f;. State commissions "rnay comply rvith thc statutory requirements by issuing rcgulations, by
ORDER NO. 33785 I
Case 1:18-cv-00236-REB Document 4-6 Filed 06/25118 Page 2 of \3
resolving disputes on a case-by-case basis, or by taking any other action reasonably designed to
give effect to FERC's rules." FERC v. Mississippi, 456 U.S. 742, 751 (1982), State
commissions have "discretion in determining the manner in which the rules will be
implemented." Idaho Power Company v. Idaho Pub. Util. Comm.,l55 Idaho 780,782,316 P.3d
1278, 1280 (2013).
PURPA requires electric utilities, unless otherwise exempted, to purchase electric
energy from QFs. 16 U.S.C. $ 824a-3; see also l8 C.F.R, 5 292.101 (defining QFs), 292.303(a).
In Idaho, the purchase rate for a utility's contract to purchase QF energy under PURPA must be
approved bythis Commission. Idaho Power,155 Idaho at789,316 P.3d at1287.
Under PURPA, the purchase rate for PIIRPA contracts shall not exceed the
"incremental" or "avoided cost" to the utility, defined as the cost of encrgy which, but for the
purchase from [the QF], such utility would generate or purchase from another source. 16 U.S.C.
$ 82aa-3(d); 18 C.F,R. g 292.101(6) (defining avoided costs). However, FERC rules require
establishment of "standard rates for purchases from [QFs] with a design capacity of 100
kilowatts or less," and allow "standard rates for purchases from [QFs] with a design capacity of
more than 100 kilowatts." l8 C.F.R. $ 29230a@Xl), (2). FERC rules provide that standard
rates "[m]ay differentiate among [QFs] using various technologies on the basis of the supply
characteristics of the different technologies." l8 C.F.R. $ 29X04@X3Xii).
This Commission has established tvro methods of calculating avoided cost, depending
on the size of the QF project: (l) the surrogate avoided resource (SAR) methodology, and (2)
the integrated resource plan (IRP) methodology. See Order No. 32697 at.7-8. The Commission
uses the SAR methodology to establish standard or "published" avoided cost rates. Id.
Currently, the eligibility cap for wind and solar QFs to access published avoided cost rates is set
at 100 kilowatts (kW). QF projects other than wind and solar are subject to a published rate
eligibility cap of l0 average megawatts (aMW). Order Nos32262 at 1,32697 at 7-8.
PURPA and FERC's irnplementing regulations do not dictate a requisite term length
forcontracts underPtlRPA. See Aflrsn Energ,,, Inc. v. Ieloho Power,l0TIdaho 781,785-86,693
P,2d 427,431-32 (198a); Idaho Power,155 Idaho at782,316 P.3d at 128A. Consequently, state
jurisdictions have identified varying minimum contract terms. Since PURPA was first
implemented in Idaho, this Commission has periodically modified the maximum length fbr
PURPA contracts. See Order No. 29029. In 2015, this Commission reduccd the term for
20RDERNO. 33785
Case 1:18-cv-00236-REB Document 4-6 Filed 06/25118 Page 3 of 13
individually-negotiated PURPA contracts (those not subject to published rates) in ldaho from 20
years to 2 years. Order Nos. 33357,33419. '['he contract term for published rate contmcts
remains at 20 years. See Order No. 33253 (clarifying that the proceedings concerned the
contract tenn for QFs exceeding the published rate eligibility cap).
IDAHO PO\rylER'S PETITION
Idaho Power stated it received requests for PURPA contracts from five battery
storage facilities (self-certified as QFs)r asserting they are entitled to published avoided cost
rates and Z}-year terms. Petition at 2. The five facilities are Franklin Energy Storage One, Two,
Three, and Four, LLCs and Btack Mesa, LLC,z and the contracts request 148 MW of total
combined energy storage. Id. at 4,7, Idaho Power informed Franklin and Black Mesa that it did
not believe any of the storage lacilities are eligible fur published rates and 20-year contracts. 1d.
Idaho Power acknowledged that "QF status is within thc cxclusive jurisdiction lofl
and properly before FERC"; thus for purposes of its Petition, the Company did not challenge the
QF status of Franklin and Black Mesa. Id. at 6. Idaho Porver asserted the Commission has
jurisdiction to issue a Declaratory Order, Id. at 5. Thus, the Company requested a Declaratory
Order that the Franklin and Black Mesa QFs and other battery storage facilities "are subject to
the same 100 kW published avoided cost rate eligibility cap applicable to wind and solar
facilities." ld. ar 13. The Company also requested a ruling that "the proper authorized avoided
cost rate lbr battery slorage facilities . . . that exceed 100 kW nameplate capacity, is [a rate based
on] thc incremental cost IRP mcthodology with a maximum contract term of tv,to years." Id. at
I 3-1 4.
Idaho Power noted thal "the generation sorrce that energizes all of the Proposed
Battery Storage Facilities is solar generation," and "the output profile submitted for each of the .
. . Facilities matches the shape and tirning of the generation profile of a solar generator." Id. at7
(citing Attachments 1-5). According to the Company, the potential benehts of an economically
I Petition at 4. Franklin and Black Mesa submitted a FERC Form 556 for each of the proposed projects, self-
certiffing that ttre projects are QFs under l8 C.F.R. $ 292.207(a). See Attachments I -5 to Petition.
2 The Black Mesa QF is owned by Redwood Energy, LLC, which submitted comments on behatf of Black Mesa as
its corporate owner. However, "Black Mesa Energy, LLC" submitted its Schedule 73 PURPA contract request form
to Idaho Power on its own behalf. Attachrnent 5 to Petition, at 4.
JORDERNO. 33785
Case 1:18-cv-00236-REB Document 4-6 Filed 06/25118 Page 4 of 13
viable utility-scale energy storage facility3 cannot be recognized if QFs o'are configured in such a
manner as to come under published rates," or stmctured to "pass[ ] ttrough as many kW hours as
possible...to maximize revenuc," as proposed by Franklin and Black Mesa, Id. at8,
The Company believes that Franklin and Black Mesa are using their QFs to
"circumvent the Commission's rules and requirements in its implementation of PURPA for the
state of Idaho." Id, The Company asserted the Franklin and Black Mesa QFs are "nothing more
than a pass through of the solar generation [that will energize their batteries], in what appears to
be a blatant attempt to manipulate the 100 kW published rate eligibility cap and two-year
contract limitation for solar generators." Id. at 9. The Company argued it is appropriate and
necessary forthe Commission to grant its requested declaratory relief "extend[ing] the 100 kW
published rate eligibility cap to battery storage projects . to protcct customers from this
manipulation of the rules." Id. at13.
COMMENTS
A. Franklin Energt
Franklin opposed Idaho Power's Petition. Franklin asserted there is no "legal
controversy" because the Commission's Orders and policy rulings are "clear [and] unequivocal"
in supporting Franklin's entitlement to published avoided cost rates for up to 20 years. Franklin
Comments at l-2, ll-12. Franklin quoted Commission Order No. 32697, which provides, "We
find that a 10 aMW eligibility cap fbr access to published avoided cost rates for resources other
than" Uind and solar is anpropriatc to continue to encourage renewable development while
maintaining ratepayer indifference," Id. x 7 (quoting Order No. 32697 at 14 (emphasis by
Franklin)). AIso, Franklin quoted the Commission's decision to "maintain the eligibility cap at
10 aMW for QF projects other than wind and solar (includins but not limited to biomass, small
hydro, cogeneration, geothermal, and waste-to-energy)." Id. at lA (quoting Order No. 32697 at 9
(emphasis by Franklin)).
Franklin argued that, because Commission Order No, 32697 is clear, there "are no
adverse legal interests," and Idaho Power's request must be construed as a request to reconsider
or revise Order No. 32697. Id. at 2,4. For such relief, Franklin contended, it and any potentially
affected parties must reccive notice and the opportunity to present evidence and cross-examine
3 The Company states t}tat the potential benehts of economically viable, utility-scale energy storage facilities include
"provid[ing] ancillary grid services such as reserve capacity, surge capacity, load-balancing, or voltage support;
firming [ ] variable generation; or time-shifting generation to match load." Petition at 8.
4ORDER NO, 3378s
Case 1:18-cv-00236-REB Document 4-6 Filed 06/25118 Page 5 of 13
witnesscs, Id" at3-4. Franklin also argued that the Commission's decision in such a proceeding
must be prospective only, and thus not apply to its legally enforceable contracts with Idaho
Power for the four proposed battery storage QFs. 1d. at 4-5.
In addition, F'ranklin challenged - and asked the Commission to disregard - a number
of factual assertions in Idaho Power's Petition. Franklin contended that, contrary to the
Company's claims, the Franklin QFs (l) "contemplated" energy sources in addition to solar; (2)
have offered to be dispatchable; and (3) will have the ability -'1o varying degrees" - to provide
ancillary grid services, firming of variable generation, and time-shifting generation to match
load. Id. at 14. Further, Franklin disputed tlrat its QFs will merely "pass through" solar power,
erguing that they would instead "utilize renewable energy as input into the battery storage system
. . . [that would then be] used to provide a non-intermittent, dispatchable product." Id. at 15.
Finally, Franklin asserted that it has complied with all the requirements of the
Company's Tariff Schcdule 73, which outlines PURPA contracting procedures, and that as such
it has established LEOs and is entitled to published rates and }}-year contracts. Id. al17.
B. Redwood Energfor Black Mesa
Redwood Energy, LLC, which owns the Black Mesa QF, submitted brief comments
on Black Mesa's behatl asserting that it qualifies for published rates "because it is a QF [with]
output of less than l0 taMlv] but is not a wind or solar QF that would be restricted to 100 kW."
Redwood Comments. Redwood contended that the Black Mesa QF "has fundamentally different
characteristics than a wind or solar project without energy storage." Id According to Redwood,
battery storage "makes output both more predictable and more coincident with system load, thus
[resulting in] a higher Net Qualifying Capacity." Id. Redwood asserted that "[e]nergy storage
will rcduce Idaho Power's requirements for Resource Flexibility, thus avoiding a cost that would
be bome but for" thc Black Mesa QF project. Id. Redwood further asserted, "This is a
dispatchable system that will offer ancillary grid services such as voltage support, load shifting,
reserve capacil.y, load-balancing, [and] firrning of variable generation or time-shifting to match
load." Id.
C. Stalf
StaJf believes there is a legal dispute that can be properly addressed by a Declaratory
Order, namely the terms of PURPA contracts between Idaho Power and the battery storage QFs.
5oRDDR NO. 33785
Case 1:18-cv-00236-REB Document 4-6 Filed 06/25118 Page 6 of 13
Staff maintained that Franklin's and Black Mesa's position that they are clearly
entitled to published avoided cost rates under the language of Order Nos. 32262 and 32176 is an
"overly simplistic analysis." Staff Comments at 7. Staff asserted that "the energy source of a
battery system is not an electro-chemical rcaction." Id. at 8. Rather, "a battery storage facility
can be a QF only if its energy source complies with PURPA and PURPA regulations," consistent
with FERC's analysis in Luz Development and Finance Corporation, 5l FERC P 61,078 (1990),
a FERC order cited in Franklin's comments. ld.
Staff thus reasoned "it is appropriate to look to the Franklin and Black Mesa QFs'
energy sources in determining their eligibility for published rates." Id. Staff highlighted that
Franklin's and Black Mesa's requests for PURPA contracts identified solar as the energy source,
although thcy have "contemplated" other sources. Id. at 8-9 (citing Franklin Comments at 14
and arguing that'omere contemplation of an altemate soruce is insufficient to obligate a utility to
purchase power from a battery storage QF with rates and contract terms based on that
hypothetical source"), Staff thus argued that Franklin and Black Mesa are subject to the 100 kW
published avoided cost rate eligibility cap, Id. at 9. Staff asserted that Franklin and Black Mesa
- as currently configured - exceed that cap, and are thus eligible for two-year terms and
negotiated avoided cost rates under the tRP methodology. ,Id,
Staff argued that Franklin and Black Mesa were interpreting isolated parts of
Commission orders, but ignoring the intent of the orders gleaned by reading them in their
entirety and in context. Staff Comments at 9-10, quoting Hayes v. City of Plummer, 159 Idaho
168, 170, 357 P.3d 1276, 1278 (2015) (other citation omitted) (statutory "provisions should not
be read in isolation, but must be interpreted in the context of the entire document").
Staff asserted, "A battery storage QF that would not exist except for its energy source
should not be able to evade an eligibility cap that would otherwise be applied to its cnergy
source." Staff Comments at 11. 'oHere, Franklin and Black Mesa- battery storage QFs cumently
intending to use solar as their energy source - should not be exempt from this Commission's
eligibility cap which was intended to prevent disaggregation of large solar projects." Id. Staff
argued Franklin's and Black Mesa's interpretation that they are eligible for published rates under
Order No.32262 is contrary to the Commission's intent - ignored by Franklin and Black Mesa,
but expressed throughout Order No. 32262 - to prevent disaggregation, Id. at 9-l l.
6ORDER NO. 33785
Case 1:L8-cv-00236-REB Document 4-6 Filed 06/25ll-8 Page 7 of 13
Finally, Staff disputed Franklin's contention that it established a LEO. ld. at 9. Tlne
Idaho Supreme Court affirmed this Commission's determination that a LEO "requires a showing
that there would have been a contract but for the actions of the utility." Idaho Power, 155 tdaho
at 787. Given the undisputed facts thaf Franklin and Black Mesa proposed to configure their
QFs with solar energy sources, Staff determined therc was no indication that Idaho Power
impeded formation of PURPA contracts. StaffComments at 9.
Given the broader implications of issues raised in the case, Staff recommended that
the Commission initiate a general investigation into the appropriate contract terms for battery
storage QFs. StaffComments at 11.
D. Avista
Avista Corporation supported Idaho Porver's Petition. Avista asserted that battery
storage facilities "should be classified, and treated, in the same manner as the facilities that
provide the primary energy source for such battery storage facilities." Avista Comments at 5, 3-
4 (discussing Luz,5l FERC P 61,078). In other words, battery storage facilities using wind or
solar facilities as their primary energy source should be treated as wind or solar QFs. /d. Avista
proposed that if the Commission rejects the proposal to treat battery storage facilities in the same
manner as their primary energy source, then the Commission should "initiate a generic
proceeding to deterrnine the appropriate treatment of such facilities." Id. at 5. Finally, Avista
recommended that the Commission pu1 a "moratorium on energy storage QFs with nameplate
capacities above 100 kW to protect utility customers during [a generic] proceeding." Avista
Comments at 5-6.
E. Sierra Club and ICL
Siera Club and ICL opposed Idaho Power's Petition, arguing that the Company is
asking to modify prior Commission Order Nos. 32262 and 33357, and that a petition for
declaratory order is therefore not the appropriate process. Sierra Club/lCL Comments at l-2.
Sierra Club and ICL assened that the Commission's "irherent, derivative" authority under the
Idaho Uniform Judgments Act "must yield to" the statutory process for "rescinding, altering or
amending prior orders" under ldaho Code $ 6t-624, because otherwise the procedures set forth
in ldaho Code $ 61-624 "become superfluous." Sierra Club/ICL Comments at 3.
The bulk of Sierra Club and [CL's comments challenged the validity of Order No.
33357, the final Order from consolidated proceedings on petitions by Idaho electric utilities to
7ORDER NO. 33785
Case 1:18-cv-00236-REB Document 4-6 Filed 06/25118 Page 8 of 13
shorten PURPA contract lengths for projects with IRP-based avoided cost rates. Siena ClubACL
Comments at 4-19. Sierra Club and ICL raised several arguments why Order No. 33357 is
invalid, and concluded that "the Cornmission cannot extend [an Order that] exceeded the
Commission's jurisdiction." Id. at 19. Siena Club and ICL recommended that the Commission
"revisit Order No. 33357 for wind and solar projects." Id.
Siena Club and ICL asserted, to the extent the Comrnission considers whether to limit
the length of contracts for bafiery storage facilities, "it must hold a hearing and make findings
that the contract term allows reasonable opportunity for QFs to attract financing for viable
projects." Id. at2.
REPLY COMMENTS
A. Idaho Power
On reply, Idaho Power stated that the proposed battery storage facilities have not
established a LEO. Idaho Power Reply at7-9. The Company detailed communications between
Idaho Power and the battery storage QFs demonstrating the Cornpany's efforts and actions prior
to filing its Petition here, and attached supporting records. /d (Attachments 1-2).
Idaho Power further asserted a generic case was not needed. Idaho Power Reply at 5-
6. However, the Company indicated it "is not necessarily opposed to such proceedings." "ld.
B. Franklin and Black Mesa
In its reply, Franklin asserted that Staff is simply ignoring the "clear and unequivocal
ruling by this Commission that all QFs other than solar and wind are entitled to twenty-year
contracts." Franklin Reply at 8. Franklin noted that, "in Luz,FERC was not 'evaluating battery
storage facilities'forthe purpose of determining their eligibility forpublished rates and twenty-
year contract terms.'o Franklin's Reply at 2 (emphasis by Franklin). Franklin highlighted that
FERC's conclusion in Luz was that "energy storage facilities such as the proposedLuz battery
system are a renewable source for purposes of QF certification." 1d. (quoting Luz at 10).
Franklin argued that Idaho Porver, Staff and Avista "conveniently ignore the distinct legal status
FERC has declared as to energy storage QFs." Id. at3-4.
Franklin took no position on Staffs recommendation to open a generic case, except to
assert that "such new generic dockets will only have prospective effect." Franklin Reply at 11.
8oRDER NO. 33785
Case 1:18-cv-00236-REB Document 4-6 Filed 06/25118 Page 9 of 13
C. Staff
Staff disagreed ,'vith Sierra Club and ICL's argument that the petition be construed as
a request to modify the Commission's Orders. Staff Reply at 3. StatTnoted that the Company's
request is consistenr with Order No. 32262, and consistent vilh Luz. Id. "Thus there is no
reason - as Sierra Club and ICL contend - for ldaho Power to seek modification of Order No.
32262." ld. Staff further noted that the Company's Petition secks to apply Order No- 33357
without modification. Id. at4.
Staff disputed the argument by Sierra Club and ICL challenging the validity of Order
No. 33357. Staff argued that their challenges exceed the scope of Idaho Power's Petition, and
are barred by ldaho Code $ 61-625, which precludes collateral attack on a final order of the
Commission. Staff Reply at 4-5.
As to Avista's recommended moratorium on energy storage QFs larger than 100 kW,
Staff recommended instead that the Commission allow such QFs to enter PURPA contracts, but
that the Commission temporarily set a 100 kW threshold br battery storage facilities to be
eligible for published avoided cost rates, pending the outcome of a generic proceeding. Stafl
Reply at 2. Staff stated t]:is "would ensure that Idaho Power complies with its obligation to
purchase under PURPA while also protecting ratepayers by ensuring accwate avoided cost
ratcs." Id. at2-3.
D. Sierua Club and ICL
In their reply, Sierra Club and ICL argued that StaIf ened in asserting that the issue of
contract lengh is in the discretion of state comrnissions based on FERC's silence about contract
length in its implernenting regulations. Sierra Club/lCL Reply at2-4. Sierra Club and ICL also
again addressed, as they did in their opening comments, the issue of contract lengh as it relates
to QFs' financial viability. Id. at4-6.
COMMISSION FINDINGS AND DECISION
This Commission has jurisdiction over ldaho Power, an electric utility, pursuant to
the authority and power granted it under Title 61 of the Idaho Code and PURPA. Idaho Code gg
6l-129,61-501; 16 U.S.C. $ 824a-3(f), The Commission has authority under PURPA and
FERC's implementing regulations to set avoided costs, order electric utilities to enter into fixed-
term obligations for the purchase of energy frclm QFs, and implement FERC rules. See supra
Background.
9ORDER NO. 33785
Case 1:18-cv-00236-REB Document 4-6 Filed 06/251L8 Page 10 of 13
Also, the Commission has jurisdiction to issue declaratory orders under Title 61 of
the Idaho Code and the Idaho Uniforrn Declaratory Judgments Act of 1933, Idaho Code $$ 10-
12Al et seq. See UtshPawer & Lightv. Idaho Pub. Util. Comm'n,ll2Idaho 10, 12,730P,2d
930, 932 (1986) (PUC had jurisdietion to determine which regulated electrical utility had the
right to be the sole supplier of electdcity to electric customer under the Uniform Declaratory
Judgments Act). A declaratory judgment "must clarify and settle the legal relations at issue, and
afford leave from uncertainty and controversy which gave rise to the procccding." tlarris v.
Cassia County, 106 ldaho 513, 517,681P.2d 988 (1984) (citing Sweeneyv. Am. Nat'l 8k,62
Idaho 544, I l5 P.2d 109 (1941). For a declaratory judgment to be rendered, there must be "an
actual or justiciable controversy" that is "real and substantial," and "definite and concrete.
touching the legal relations of parties having adverse legal intcrcsts." /d at 516 (quoting Aetna
Life Ins. Co. v. Haworth,300 U.S.227,240-41(1937)).
Under the applicable statutes and case precedent, and in light of thc circumstances
here, lve have jurisdiction to issue a declaratory order. Idaho Power disagrees with Franklin and
Black Mesa as to which avoided cost rate and eligibility cap should apply to the two battery
storage developcrs for purposes of forming PUR?A contracts. Both sides contend their
respective interpretations of applicable law should govern their contracts. We thus find the
Company, Franklin and Black Mesa have adverse legal interests about which there is "an actual
or justiciable controversy" that is "real and substantial," and "definite and concrete," that we
have jurisdiction to clariff and resolve. See Harris, 106 Idaho at 516 (quotingAetna Life Ins.,
300 U.S. at 240-41). We reject Siena Club's and ICL's argument that the Company is actually
seeking modification of the Commission's prior Orders. Sierra ClubilCl- Comments at 1-2. We
further find Sierra Club/ICL's challenge to the validity of Order No, 33357 to be an
impermissible collateral attack, pursuant to ldaho Cade $ 61-625.
We are unaware of any reference in PIIRPA or FERC's implementing regulations
that identifies battery storage as a renewable resource eligible for QF status and the benefits
provided by the Act. Indeed, FERC acknowledged that "[n]either lhe statute nor the final rule
refers specifically to energy storage systems." Luz at 61,171. Consequently, our ruling on the
narrow declaratory issue before us should not be read to presume that this Commission deems
battery storage to be a legitimate qualifying facility eligible for the benefits of PURPA and
oRDERNO. 33785 10
Case 1:18-cv-00236-REB Document 4-6 Filed 06/2511-8 Page 11_ of 13
subject to the Act's implementing regulations under FERC, Thc battery storage facilities' QF
status is a matter within FERC's jurisdiction and is not at issue in this case.
Although FERC goes on in Luz to summarily include battery storage as a renewable
resource for purposes of QF certification, it does so with specific parameters. FERC
distinguishes battery storage from energy sources that generate electric energy and provide the
battery with its resource. FERC states that ". in order for a storage facility to be a QF the
primary energy soruce for generation of this energy must be one of those contemplated by the
statute for conventional small power production facilities. . . ." Id. "Section 3(17)(A) of the
FPA defines a srnall power production facility as one which 'produces electric energy solely by
the use, as a primary energy source, of biomass, waste, renewable resources, geothermal
resources or any combination thereof."' Id., citing 16 U.S.C. $ 796(lTXAXi) (1988). "Primary
energy source is defined as the fuel or fuels used for the generation of electric energy. . . ." Id.,
citing 15 U.S.C. $ 796(1i)@Xi) (1988).
Luz attempted to convince FERC that a battery storage facility independently meets
the definition of a prirnary energy source because it generates energy when an electro-chemical
reaction discharges the stored power from the battery. Id. x 61,169. Luz further argued that the
time shifting capability of energy storage "can only make sense and be implernented if energy
storage facilities Iike the proposed battery system are allowed to operate as QFs and to use
eleotric energy without an inquiry as to the source of energy uscd to generate that electricity."
Id. at 61,170. FERC rejected this position. "Contrary to Luz's assertion, the primary energy
source of the battcry system is not the electro-chemical reaction. Rather, it is the electric energy
which is utilized to initiate that reaction, for without that energy, the storage facility could not
store or produce the electric energy which is to be delivered at some later time. Since this energy
is the primary energy source of the facility, it is necessary to look to the source of this energy as
the ultimate primary energy source of the facility." ld. at 61,17 1 .
FERC confirmed that energy storage faoilities are not renewable resources/small
power production facilities per se. Id, Electric input is requircd to produce electrie output from
a storage facility. Id. at 61,172. For this reason, in order to qualify as a PURPA resource, the
primary energy source behind the battery storage must be considered, We must, then, look to
Franklin's and Black Mesa's primary energy sources in order to determine their eligibility under
PURPA. The primary energy source for Franklin and Black Mesa is solar generation.
oRDERNO. 33785 11
Case 1:18-cv-00236-REB Document 4-6 Filed 06/25118 page 12 oI L3
Moreover, the energy generation output profiles for the battery storage facilities are a direct
reflection of the solar generation that operates as the primary energy source for the battery
storage facilities. Petition at 7, Attachments l-5.
Accordingly, we find it appropriate to base Franklin's and Black Mesa's eligibility
under PURPA on its primary energy source - solar. Solar resources larger than 100 kW are
entitled to negotiate two-year PURPA contracts through the use of Idaho's IRP methodology.
Franklin's argument that this Commission's prior decisions clearly and unequivocally allow it
entitlement to published rates ignores FERC's pronouncement that energy storage facilities are
not per se renewable resources/small power production facilities under PURPA,
Franklin further maintains that it has established a legally enforceable obligation
(LEO) requiring Idaho Power to purchase its cnergy. Franklin Comments at 17. However,
Franklin has failed to prove that Idaho Power impeded Franklin's abilily to enter into PURPA
contracts. See ldaho Power, 155 Idaho at787. To the contrary, Idaho Power notified the battery
storage facilities that the utility did not believe the projects were entitled to 20-year, published
rate contracts and requested the projects "supplement your Applications with additional
information that verifies eligibility for the requested rates and terms, or modify your
Applications to request rates and terms that your proposed projects may qualiff for." Petition,
Attachment 6.
"FERC has given each state the authority to decide when a LEO arises in that state."
Idaho Power,155 Idaho at787, quoting Power Resource Group, Inc. v. Public Ulility Comm'n
of Texas, 422 F.3d 231, 239 (5ft Cir. 2005). The facts and evidence in this case reveal that the
parties were in active negotiations which resulted in Idaho Power's Petition for a declaratory
ruling. We decline to interpret a reasonable dispute between the parties regarding contract terms
and conditions as intransigence or a failure to negotiate on the part of the utility. Therefore, we
find that no action (or inaction) of the utility has triggered the creation of a legally enforceable
obligation.
Finally, based on the above findings regarding the characteristics of battery storage
and the compulsory consideration of its underlying primary energy source, we find a generic
investigation unnecessary. We grant Idaho Power's Petition for a declaratory ruling to address
and resolve the legal dispute between Idaho Power and Franklin Energy8lack Mesa arising out
of contract negotiations between the two parties. We find that, as storage facilities with design
ORDER NO, 33785 r2
Case 1:18-cv-00236-REB Document 4-6 Filed 06/25118 Page 1-3 of 13
capacities that will exceed 100 kW each and with solar as their primary energy source, the
projects arc eligible for two-year, negotiated (IRP methodology) contracts.
ORDER
IT IS HEREBY ORDERED that ldaho Power's Petition for declaratory relief is
granted as set forth above.
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 ldaho Code $ 6l-626.
DONE by Order of the Idaho Public Utilitics Commission at Boise, Idaho this / Y &
day ofJuly 2017.
IONER
ERIC ANDERSON, COMMISSIONER
ATTEST:
Diane M. Hanian
Commission Secretary
O:lPC-E- 17-01_djh3
oRDER NO. 33785 13
Case 1:18-cv-00236-REB Document 4-7 Filed 06/25118 Page L ot 4
Ot'fice ol'the Sccretary
Scrvicc Datc
August 39, 201 7
I}EFORE THE IDAHO PUBLIC I.]TILITIES COMMISSION
IN'TIIE MA'T'TEIT OF T}I[, I'IiTITION OT
IDAIIO POWETT C]O}IPANY FOIT A
I)E(]I,AIIA'I'ORY ()RDI'It RI'(;AI{DI N(;
PROPER CON'TRAC]' TERMS,
CONDITIONS, AND AVOIDED COST
I'RICING I.'OII I}AT'TIIRY STOITAGE
[';\CILITIIiS
CASE NO. IPC-E.I7-OI
oRDrill. No. 33n58
Ort February 27. ?017, Idaho Pou'er Cornpany asked the Cltlnrmission lor a
dcclaratory ordcr rcgarding propcr contract tcrms. conditions. and avoided cost pricing lbr five
battery storagc lircilities reeluesting cortracts under thc Public tllilit), Rcgulatory Policies Act o1'
l97lt (PUIIPA). Sec Ordcr No. 33729. 'l'he Clomrnission issucd Final Ordcr No. 33785 that
granted Iclaho Porver's recluest. Franklin flnergy Storage Projects (Franklin) timcly pctitioned
thc Comnrission to rcconsidcr thc lrinril Ordcr, and ldaho Pou,er tirnely ansrvcrcd Franklin's
Pctition. Witli this Orclcr. wc find that I"ranklin has iailed to meet its btu'den ol- shorving
rcconsideration is rvarrantcd, anc{ clcny l:rankIilt's l)ctition.
PETITIONS FOII IIECONSIDEITAI'ION
lteconsideration provides an opportunitl' fbr a party to bring to the Comn-rission's
attcntion any isslre previously determined, and thereby allords the Commission an opportunity to
corrcct arry nristakc or onrission. Wushinglon ll'uter ['ou,ar Co. v. Koolenai Environmcnlul
illliunc'e,99 lclaho 875, 591 I'.?d 122 (1979). Undcr Commission Rule 331.01,'oPetitions for
rcconsideration must sct lbrth specifically the grouncl or grounds why thc pctitioncr contcnds that
the ordcr or any issuc decicled in the order is unreasonablc. unlarvlul. erroneous or not in
conlbrmity rvith the law...." IDAI']A 31.01 .01.331.01.
FIIAN KT,IN'S PI1TTTION FOR RECONSIDI! IIATION
Irranklin's Petition askecl the Clonrnrission to reverse tlre Irinal Orcler ancl derry ldaho
l)orver's request lbr dcclarat<lry reliel" bccausc parls of thc l]inal Order are 'omistaken.
unreasonablc, unlaw'lirl, errclncous, ancl not irr conlbrmity rvith thc larv." Ijranklin Pctition at l,
10. Franklin argucd that, while thc Comrnissiorr conceded that battery storage fbcilities'
clualilying facility (QIr) status is a mattcr within thc Fedcral L.nergy Regulatory Con:rnissiott's
(F[:ltC's) jurisdiction, thc Commission nevcrthclcss dctenrincd that "cnergy storage QI;
)
)
)
)
)
)
)
oRt)l,tt N(). 1i858
Case 1:18-cv-00236-REB Document 4-7 Filed 06/25118 Page 2 oI 4
lacilities that use solar porver as a printary energy input arc'. in fact. fslolar QFs and not energy
storage QF's," intrudirrg on FEI{C's jurisdiction. Itl. at 3.6.
According to Franklin. the Commission erred. in part due to its misreading of FERC's
lrr: decision. Id. at 8 (rcfcrring to Luz l)evelopmenl uncl [;inance L'orp.,5l FI]RC !] 61,078
(1990)). F'ranklin asserted that in lu.z, FERC ruled that energy storage facilities ore QFs, so long
as they n'reet the fuel-use criteria and othcr requirements for QF status. Id. at 9. l;ranklin tirrther
asserted tliat in lus, FERC looked to thc prirnary energy source behind the storage system to
confirm that the storage system is a QL- but did not consider the primary encrgy source to be the
QF. Id. Franklin claimed this Commission tbund that "an energy storage facility's primary
source of energy is the QF and not the storagc I'acility itsclt'," Icl. at 6.
Franklin therefore argued that the Comnrission cxceeded its jurisdiction under
PI.JRPA by granting ldaho Power's request lbr relief and "illegally finding that energy storage
facilities that use solar porver to charge the underlying storagc dcviccs are not energy storage
Qlrs, but are instead solar QFs." ld. al l0 (quoting Indep. EnerSyt I'roducers Ass'n v. Cletlifitrniu
Puh, (itil. Clontm'n,36F.3d 848,856 (9th Cir. 1994)).
IDAHO POWER'S ANSWER
Idaho Power asserted that Franklin's "solc basis of error" was "that the Commission
inrproperly made a deternrination as to the [Qf] status of the l;ranklin" projects. Idaho Power
Answer to Petition for Reconsideration (ldaho Power Answer) at 2. Idaho Porver contended
Franklin's argument is incorrect. According to Idaho Power, the Commission (in Final Order
No. 33785) dctermined the proposed battery storage fhcilities' proper avoided cost ratc and
contract term, not their QF status. w,hich the Cornmission expressly accepted as undisputed for
purposes of the case. /d at 2-4. 'fhe Companv also notcd that the Conrmission has the exclusive
jurisdiction to dctemrine proper avoided cost rates and contractual terms as applied to the battery
storage facilities, which is what the Commission did in thc Final Order. Itl. at3-4. Because the
Final Order was based upon substantial and competent evidence in the record, and the
Commission regularly pursued its authority and acted within its discrction, Idairo Power asked
that the Commission deny Franklin's Petition. Id. al5.
COMMISSION DISCUSSION AND FINDINGS
Franklin argues that the llinal Order is "unreasonable, unlawtll, crroncous or not in
conlbrmity rvith the law" and should be reconsidered because it infiinged on FERC"s jurisdiction
2ORDER NO. 33858
Case 1:18-cv-00236-REB Document 4-7 Filed 06/25118 Page 3 oI 4
to clc'tcrnrine QIi' statLls. b'rarnltlin's onl,," legal authority lbr its argument is lnclep, Energt,
Producct',t.36 F.3d at 856. in r.vhich the Nintlr Circuit ('ourt of Appeals opined that the authority
to make QIr status deterrninations belongs to I"L'.RC, not tlle states. I;ranklirr asserts that. contrary
to Intlep. Energ'I'rochrcers, rve dctcrmincd thc QIr status ol-hatterl'storage facilities in the Final
Order. We did not. Franklin's mischaracterization of our Final Order is a tiivolous eflbrt to
contrive a lcgal basis for rcconsideration.
L'ranklin contends we determined that the prirnary' energy sollrce behind a battery
storage QF i.r the QF', based on a misrcading ol' l;ERC's decision in l;rz Developmcnl uncl
I;'inctnce ('orporulion,5l FERC fl 61.078. Franklin Petition at 9. 'l'his Clommission did not find
tlrat tlre primary cnergy source behind a battery is thc Qli', nor dici we assert thal Luz stands fbr
such a proposition. In the Final Order, rve explicitly rccognized that "battery storagc facilities'
Ql'status is a matter lvithin I]LiRC's jurisdiction" ancl rve acknowledged the sell'-certifiuations of
Franklin's QFs. Final Order No. 33785 at 3, l0- l I . Consistent with FERC's analysis in l-uz, we
lookecl to the prirnary snergy source o1'Franklin's battery storage QFs to determine the projects'
eligibility to particLrlar avoided cost rates and contract terms.
It is well-cstablished that state commissions such as this Cornmission have broad
discrction and authority to establish and approve tlre terms and conditions of I'URPA contracts,
in implcmcnting IiEI{C rules. l6 [,r.S.C. $ 82aa-3(l)(l) ("each State regulatory authority shall . .
. irnplenrent such rulc (or reviscd rule) lbr each electric utility lbr which it has ratemaking
atrtlrority"); lndep. ilnergg'Proclucer:;,36 F.3d at 856 (noling statc commissions'broad authority
to inrplement PURPA); sea alxt Portluncl Generul lilectric C'o. v. I;ER(:,854 F.3d 692, (D.C.
Cir.20l7)'. Itluho Pov,er CompunT,v. kluho Pub. Util, Ctsmm., 155 Idaho 780,782,316 P,3d
1278. 12tlo (2013); I;'EIl(.: v lvli,ssi.r,rippi,456 LJ.S. 742, 751 (1982). I'ursuant to such authority,
and consistent with FERC's reasoning in Luz, we concluded that l;ranklin was cligible fbr two-
year contracts at negotiated avoided cost rates. I;inal Orcler No. 33785 at I2. Franklin lailed to
shorv that Final Order No. 33785, or any issuc in it, is unreasonable, unlawful, erroncous or not
in corrlirrnrity with the larv. Wc thus deny l"ranklin's Petition.
ORDEIT
Il'IS HEREBY ORDERED that Franklin's Petition for Reconsideration is denied.
TIIIS IS A FNnl, OI{DI1R DENYING RIiCONSIIXRA"I'ION, Any pafiy
aggricved by this Order or other llnzrl or interlocutory Orders previously issr"red in this Case No.
-)Or{DEIl' NO. 33858
Case 1:18-cv-00236-REB Document 4-7 Filed 06/251L8 Page 4 ol 4
IPC-E- l 7-01 may appeal to thc Supreme Court of Idaho pursuant to the Public Utilities Larv and
the Idaho Appellate Rules. Sce lduho Coric 5\ 61-627.
DONE by Order of the ldaho Public Utilities Comrnission at Boisc. Idaho this
day ofAugust 2017.
PAUL PRESIDENT
RAPER,ONER
ERIC ANDERSON. COMMISSIONER
ATTI]ST
Diane M. Hanian
Commission Secretary
0 : I I'C-ti- I 7-0 t _djh4_Rcconsidcration
2"4,
a
4ORDER NO. 33858
Case 1:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 1 of 19
FEDERAL ENERGY REGULATORY COMMISSlON
WASHINGTON, DC
OMBControl# 1902-0075
Expiration 06/30/2A19
Fo rm 5 5 6 F,"J:[il:T:ft:lT:,'#;::il,11'', statusfor a Sma* Power
General
Questions about completing thls form should be sent to i_orrnJ5,r,1f,lsrc.gerv. lnforrnatlon about the Commlsslon's QF
program, answers to frequently asked questions about QF requlrements or completing this form, and contad lnformation for
QF program staffare available at the Commisslon's QF wcbslte, ry_r41-lu.11,ir:ru.gr:v;'Cl The Commission's QF webslte also
provides llnks to the Commission's QF regulatlons tl8 C.F.R.5 131,80 and Part 292), as well as other statutes and orders
pertaining to the Commission's QF program.
Who Must File
Any applicant seeking QF status or recertificatlon of QF status for a generatlng facility with a net power production capacity
(as determined in lines 7a through 79 below) greaterthan 1000 kW must flle a self-certiflcation or an appllcatlon for
Comrnission certification of QF status, which includes a properly completed Form 556. Any applicant seeklng QF status for a
generatlng facility with a net power productlon capacity 1000 kW or less is exenrpt from the certification requiremenl and ls
therefore not reguired to complete or file a Form 556. 5ee 18 C.F,R, S 292,203.
How to Complete the Form 556
Thls form is intended to be completed by respondlng to the ltems ln the order they are presented, accotding to the
lnstructlons glven. lf you need to back-track, you may need to clear certain responses before you will be allowed to change
otherresponsesmadepreviouslyintheform. lfyouexperienceproblems,clickonthenearesthelpbutton(@ lfor
assistance, or contact Commission staff at io]jljf !6&ilc|g.gqiy.
Certain lines in thls form will be automatically calculated based on responses to previous lines, with the relevant formulas
shown. You must respond to all of the previous lines within a section before the results of an automatically calculated field
will bedisplayed. lfyoudisagreewiththeresultsofanyautomatlccalculationonthisform,contactCommlssionstaffat
Ist!].5!!.?rjlgr(.qs_'1 to discuss the discrepancy before liling,
You must complete all lines in this form unless instructed otherwise. Do not alter thls form or save thls form in a different
format. lncomplete or altered forms, or forms saved in formats other than PDF, will be rejected.
How to File a Completed Form 556
Appllcants are requlred to file their Form 556 electronically through the Comrnission's eFiling website (see instructions on
page 2). By filing electronically, you wlll reduce your flllng burden, save paper resources, tave postage or courler chargel
help keep Commission expen5es to a minimum, and receive a much faster confitmatlon (via an email containing the docket
number assigned to your facility) that the Commlssion has recelved your flllng.
lf you are simultaneously flling both a waiver request and a Form 556 as part of an application for Commission certification,
see the "Waiver Requests' section on page 3 for rnore information on how to file.
Paperwork Reduction Act Notice
Thls form ls approved by the Office of Management and Budget. Compliance with the informatlon requirements established
by the FERC Form No. 556 is required to obtain or maintaln status as a QF. See '18 C.F.R. 5 I 3 l ,80 and Part 292. An agency may
not conduct or sponsor, and a person is not required to respond to, a collection of informatlon unless it displays a currentiy
valid OMB control number. The estimated burden for completing the FERC Form No. 556, including gathering and reporting
information, is as follows: 3 hours for self-certificatlon of a small power production facility, I hours for self-certifications of a
cogeneration facility,6 hours for an application for Commission certification of a small power production facility, and 50 hours
for an application for Commis5ion certificataon of a cogeneration facility, Send comments regarding this burden estimate or
any aspect of this collectlon of informatlon, including suggestlons for reducing this burden, to the following: lnformation
Clearance Officer, Office of the Executive Director (ED-32), Federal Energy Regulatory Commission, 888 First Street N.E,,
Washlngton, AC 20426 (ll.{a(l*ar 41r-e.!tt1:..,;igv); and Desk Officerfor FERC, Office of lnformation and Regulatory Affairs,
Office of Management and Budgei Washington, DC 20503 (iii.r.) -:r.ilrti.it-rill,ri.:)t"rrr.firjJ,,).uov). lnclude the Control No.
1 902-0075 ln any correspondence,
Case 1:18-cv-00236-REB Document 4-8 Filed 06/2511-8 Page 2 of L9
FERC Form 556 Page 2 - lnstructions
Electronic Filing (eFiling)
To electronlcally flle your Form 556, visit the Commisslon's QF website at uyrwJefLqqylQf and click the eFiling link.
lf you are eFlling your first document, you will need to reglster with your name, email address. mailing address, and phone
number. lf you are registering on behalf of an employer,then you wlll also need to provide the employer name, alternate
contact name, alternate contact phone number and and alternate contact email,
Once you are reglstered, log in to eFlling with your registered email address and the password that you created at
reglstratlon. Follow the lnstructlons. When prompted, select one of the following QF-related ftling types, as appropriate,
from the Electric or General flllng category.
Fillng category Filing Type as listed ln eFiling Descrlption
Electrlc
(Fee) Application for Commission Cert. as Cogeneration QF
Use to submit an applicatlon for
Cornmission certification or
Commission recertificatlon of a
cogeneration facility as a QF.
(Fee) Application for Commlsslon Cert, as Small Power QF
Use to submit an application for
Corn mission certlflcatlon or
Cornmisslon recertlflcatlon of a
small power production faclllty as a
QF.
Self-Certiflcation Notice (QF, EG, FC)
Use to submit a notlce of self-
certlflcatlon of your faclllty
(cogeneration or small power
production) as a QF.
Self-Recertification of Qualifying Facility (QF)
Use to submit a notice of self-
recertification of your faclllty
(cogeneration or small power
production) as a QF.
Supplemental lnformation or Request
Use to correct or supplement a
Form 556 that was submltted with
errors or omissions, or for which
Commission staff has requested
additional information. Do not use
this filing type to report new
changes to a faclllty or its
ownership; rather, use a self-
recertifi cation or Commission
recertification to report such
changes.
General (Fee) Petition for Declaratory Order (not under FPA Part 'l)
Use to submit a petition for
declaratory order grantlng a waiver
of Commission QF regulations
pursuant to 18 C.F.R. 55 292.204ta)
(3) and/or292.205(c). A Form 556is
not required for a petition for
declaratory order unless
Commission recertifi cation is belng
requested as pa( ofthe petltlon.
You will be prompted to submit your filing fee, lf applicable, durlng the electronic submission process. Filing fees can be pald
via electronic bank account debit or credit card.
During the eFlllng process, you wlll be prompted to select your file(s) for upload from your computer.
Case 1:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 3 of 19
FERC Form 556 Page 3 - lnstructions
Filing Fee
No filing fee ls required if you are submitting a self-certification or self-receftiflcation of your facility as a QF pursuant to l8
C.F.R.5 292.207(a).
A filing fee is requlred if you are filing either of the followingl
(1 ) an applicatlon for Commisslon certlflcation or recertification of your {aclllty as a QF pursuant to 18 C.F,R, 5 292.207(b), or
(2) a petition for declaratory order granting waiver pursuant to 18 C.F,R. 55 292.204(aX3) and/or 292.205(c).
The current fees for applications for Commisslon certilications and petitions for declaratory order can be found by visltlng the
Commlssion's QF webslte at Uwx.f,er"So:alQf and clicking the Fee Schedule link.
You will be prompted to submit your filing fee, if applicable, durlng the electronk filing process described on page 2.
Required Notice to Utilities and State Regulatory Authorities
Pursuant to 1 8 C.F.R. 5 292.207(aXll), you must provide a copy of your self-certlfication or request for Commlssion certiflcation
to the utilities with which the facility will interconnect and/or transact, as well as to th€ State regulatory authoritles of the
states in which your faclllty and those utilities reside. Links to information about the regulatory authorities ln varlous states
can be found by visitlng the Commission's QF website at yt$Lydetigg-vlQ[ and clicking the Notice Requirernents link.
What to Expect From the Commission After You File
An applicant filing a Form 556 electronically wlll receive an email message acknowledging receipt of the filing and showing
the docket number assigned to the filing. Such emaiJ is typically sent within one business day, but may be delayed pending
conflrmatlon by the Secretaryof the Commission of the contents of the filing.
An appllcant submittlng a self-certlflcation of QF status should expect to recelve no documents from the Commlsslon, other
than the electronlc acknowledgement of receipt described above. Consistent with its name, a self-certification is a
certification by the opplicont ifrelf that the facility meets the relevant requirements for QF status, and does not involve a
determlnation by the Commlsslon as to the status of the faclllty. An acknowledgement of recelpt of a self<ertiflcation, ln
particular, does not represent a determinatlon bythe Cornmlssion with regard to the QF status of the facllity, An applicant
self-certifying may, however, recelve a rej€ction, revocation or deflciency letter lf lts applicatlon ls found, during periodic
compliance reviewt not to comply wlth the relevant requlrements.
An applicant submitting a reguest for Commission certification will recelve an order elther granting or denying certilicatlon of
QF status, or a letter requesting additional information or rejecting the application. Pursuant to 1 I C.F.R. 5 292.207(bX3), the
Commission must act on an application for Commission certification within 90 days of the later of the filing date of the
application or the filing date of a supplemen! amendment or other change to the application.
Waiver Requests
18 C.t.R. 5 292.204(aX3) allows an applicant to request a waiver to modify the method of calculation pursuant to l8 C.F,R. 5
292.204(aX2) todetermineaftwofacilitlesareconsideredtobelocatedatthesamesite,forgoodcause. .l8C.F.R.5292.205(c)
allows an applicant to request waiver of the requirements of l8 C.F.R. SS 292,205(a) and (b) for operating and efficiency upon
a showing that the facility will produce slgnificant energy savings. A request for waiver of these requirements must be
submltted as a petition for declaratory order, with the appropriate filing fee for a petition for declaratory order. Appllcants
requesting Commlssion recertiflcation as part of a request for waiver of one of these requirements should electronically
submit their completed Form 556 along wlth their petition for declaratory order, rather than filing their Form 556 as a
separate requeet for Commisslon recertlflcation. Only the flling fee for the petition for declaratoly order must be paid to
cover both the walver request and the request for recertiflcation lf such rcquestsore made simultaneously.
l8 C.F.R, 5 292.203(dX2) allows an applicant to request a waiver of the Form 556 filing requirements, for good cause.
Applicants flling a petltlon for declaratory order requestlng a waiver under '18 C.F.R, 5 292.203(dX2) do not need to complete
or submit a Form 556 with their petition.
Case 1:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 4 of 19
FERC Form 556 Page 4 - lnstructions
Geog raphic Coordinates
lf a street address does not exist for your facility, then line 3c of the Form 556 requlres you to report your facility's geographic
coordinates (latitude and longitude). Geographlc coordinates may be obtained from several different sources. You can find
links to online services that show latitude and longitude coordinates on online maps by visitlng the Commtsslon's QF
webpage at ry11rl1.ii,r,, u.g",L!,)|," and clicking the Geographic Coordinates link. You may also be able to obtaln your geographlc
coofdlnates from a GP5 device, Google Earth (available free at htLir:,'i rr,rrtlr lr.rtrglr;,r:r::rrr), a property survey, various
engineerlng or constructlon drawlngs, a property deed, or a municipal or county map showlng property lines.
Filing Privileged Data or Critical Energy lnfrastructure lnformation in a Form 556
The Commission's regulations provide procedures for applicants to either (l ) request that any information submitted with a
Form 556 be glven prlvlleged treatment because the lnformation is exempt from the mandatory publlc dlsclosure
requlrements of the Freedom of lnformation Act, 5 U.S,C. 5 552, and should be wlthheld from public disclosure; or (2) identlff
any documents containing critical energy infrastructure lnformation (CElll as deflned in 18 C.F.R. 5 388.1 1 3 that should not be
made publlc.
lf you are seeking privileged treatment or CEll status for any data in your Form 556, then you must follow the procedures in 18
C.F.R. 5 388.1 12. See r,!ww.i*rt .qov./ltcl1:r/f ilirrg qrrrrir,ll!k.-<r'ir ;s1r for more information.
Among other things (see l8 C.F.R. 5 388,1 I2 for other requirements), appllcants seeking privileged treatment or CHI status for
data submified in a Form 556 must prepare and file both (l ) a complete version of the Form 556 (containing the privileged
and/or Cf ll data), and (2) a publlc verslon of the Form 556 (with the privileged and/or CEll data redacted). Applicants
preparing and flling these different verslons of thelr Form 556 must lndicate below the security deslgnatlon of thls version of
their document. lf you are nof seeking privileged treatment or CEll status for any of your Form 556 data, then you should not
respond to any of the items on thls page.
Non-Publlc Appllcant ls seeklng prlvlleged treatment and/or CEll status for data contained in the Form 556 lines
fl indicated below, This non-publlc version of the applicant's Form 556 contains all data, lncluding the data that is redacted
in the (separate) public version of the appllcant's Form 556.
Publlc {redactcd}: Applicant is seeklng prlvlleged treatment and/or CEll status for data contalned in the Form 556 llnes
! indlcated below, This public verslon of the applicants's Form 556 contains all data excepl for data from the lines
indicated below, which has been redacted.
Privllcaed: lndlcate below which lines of your form contain data for which you are seeklng privileged treatment
Crltlcal Energy lnfrartructure lnformatlon (CEIU: lndlcate below whlch lines of your form contain data for which you are
seeking CEll status
The eFiling process described on page 2 will allow you to identifo which versions of the electronic documents you submit are
public, privileged and/or CEll. The filenames for such documents should begin with "Public', "Priv", or "CEll", as applicable, to
clearly indicate the security designation of the flle. Both versions of the Form 556 should be unaltered PDF copies of the Form
556, as available for download(tom':,t,,'t',,t {,:rr ..1t:t'ttt.)i . To redact data from the publlc copy of the submlttal, simply omit the
relevant data from the Form. For numerical fields, leave the redacted fields blank, For text fields, complete as much of the
field as possible, and replace the redacted po(ions of the field with the word "REDACTED' in brackets, Be sure to identifiT
above All fields which contaln data for which you are seeking non-public status.
The Commission is not responslble for detectlng or correcting filer errors, including those errors related to security
designation. lf your documents contain sensltlve lnformation, make sure they are filed using the proper securlty designatlon.
Case 1:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 5 of 19
FEDERAL ENERGY REGULATORY COMMISSION
WASHINGTON, DC
OMB Control # 1902-0075
Expiratlon A6/3012O19
Fo rm 5 5 6 F,'J:[i:::::ft:rJJ:,',ff::il,1[',',"u'u'
fora sma' Power
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Ia Full name of applicant (legal entity on whose behalf qualifying faclllty status ls sought for this facility)
Franklin Energy Storage One, LLC
1b Appllcant street address
515 N. 27th StreeL
rc City
Boise
ld State/province
ID
le Postalcode
83'702
1f Country (tf not Unlted States)lg Telephone number
[phone]
t h Has the lnstant faclllty ever previously been certlfled as a QF? Yes ffi No t t
ti lfyes,provldethedocketnumberofthelastknownQFfillngpertalnlngtothisfacllity: QFrr - 581 - 000
lJ Under which certiflcatlon process ls the applicant maklng this flllng?
-,, Notice of self-certiflcation -, Appll(ation for Comnrission certification (requires flllng6 (see note below) u fee; see "Filing Fee" section on page 3)
Note: a notice of self-certlflcatlon ls a notice by the appllcant itself that its facility complles wlth the requirements for
QF status. A notice of self<ertlflcatlon does not establlsh a proceeding, and the Commlssion does not review a
notlce of self-certification to verl! compliance, See the 'What to Expect f rom the Commlssion Aftet You File"
section on page 3 for more lnformation.
1k What type(s) of QF status ls the applicant seeking for its faclllty? (check all that apply)
! Qualillng small power productlon facility status fl Qualifiing cogeneration facility status
t I What is the purpore and expected effective date(s) of this fillng?
i'I Orlglnal certlflcatlon;facility expected to be installed by and to begln operation on
:- ] Change(s) to a previously certified facllity to be effective on
(identlfy type(s) of change(s) below, and descrlbe change(s) ln the Miscellaneous sectlon starting on page 19)
Ll Name change and/or other administrative change(s)
- ; Change in ownershlp
i.-J Change(s) affecting plant equipment fuel use, power production capacity and/or cogeneration thermal output
ft Supplementorcorrectlonto a prevlousffling submitted an L / 26/ 7'l
(describe the supplement or correction in the Miscellaneous section starting on page 19)
lm lfanyofthefollowlngthreettatementsistrue,checkthebox(es)thatdescribeyoursituationandcompletetheform
to lhe extent posslble, explainlng any speclal clrcumstances in the Miscellaneous sectlon starting on page I9.
.- The |nstant facility complier wtth the Commission's QF requirenrents by vlrtue of a waiver of certain regulations! previously granted by the Commlsslon ln an order dated (specify any other relevant waiver
orders in the Miscellaneous section starting on page 19)
',-- The lnstant facillty would comply with the Commission's QF requirements if a petition for waiver submittedU concurrently witlr this application is granted
The instant facility complies with the Commission's regulations, but has special circumstancet such as the
f, employment of unique or innovatlve technologies not contemplated by the structure of thls form, that make
the demonstration of compllance via thls form difficult or impossible (descrlbe in Misc. section startlng on p, 19)
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2r Name ofcontact person
Peter Richardson
2b Telephone number
[phone]
2< Whlch of the following describes the contact person's relatlonshlp to the appllcantT (check one)
I Applicant (sel0 [ Employee, owner or partner of applicant authorlzed to represent the applicant
I Employee of a company affiliated wlth the appllcant authorlzed to represent the appllcant on thls matter
ffi Lawyer, consultant, or other representative authorized to represent the applicant on thls matter
2d Company or organization name (if applicant is an lndlvldual, check here and skip to line 2e) i I
t'ranklin Energy Storage One, LLC
le Street address (if same as Applicant, check here and skip to line 3a)ffi
2t City 2g State/province
2h Postal code 2i Country (if not United States)
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3a Facility name
Franklin Energy Storage ONe
3b Streetaddress(ifdstreetaddresrdoernotexistforthefacility,checkhereandsl<iptoline3c)ffi
3c Geographic coordinates; lf you indicated that no street address exlsts for yout facility by checking the box in llne 3b,
then you must speclry the latitude and longltude coordinates of the facility in degrees (to three declmal places). Use
the following formula to convert to declmal degrees from degrees, minutes and seconds: decimal degrees =
degrees + (mlnutes/60) + (seconds/3600), See the 'Geographic Coordinates" section on page 4 for help. lf you
provided a street address for your facility in line 3b, then specif ing the geographic coordlnates below ls optlonal.
l-'l East (+)
Longhude H *"r, t, 114 ' 605 degrees , X North (+)Latlluoe ! south G)
42.L91 degrees
3d Clty (lf unlncorporated, check here and enter nearest city) ffi
Jackpot
3. State/provin€e
Nevada
3f County (or check here for independent city) i ;
Twin Fa1ls
39 Country (if not United States)
vto
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ldentifu the el€ctrlc utillties that are contemplated to transast with the facllity.
4a ldentify utility interconnecting with the facility
Idaho Power Company
4b ldentify utilities provi.ling wheelinq service or check lrere if none ffi
4t ldentiff utilities purchasing the useful electric power output or check here if none
Idaho Power Company
4d identify utilities providing supplernentary po',ver, backup porarer, maintenance po\,ver, andlor inlerruptible power
seorce orcheck here rfnone ffi
Case 1:18-cv-00236-REB Document 4-8 Filed 06i25/18 Page 6 of 19
FERC Form 556 Page6-All Facilities
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Case 1:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 7 of 19
FERC Form 556 Page7-AllFacillties
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5a Direct ownership as of effective date or operation date: ldentis all direct owners of the facility holding at least 'l 0
percent equity interest. For each identified owner, also (1 ) indicate whether that owner is an electrlc utility, as
defined in section 3(22) of the Federal Power Act (16 U.S.C.796(22)), or a holding company, as defined in seclon
1262(8) of the Publlc Utlllty Holding Company Act of 2005 (42 U.s.C. 1645.|(8)), and (2) for owners which are electric
utllities or holding companies, provide the percentage of equity lnterest in the facility held by that owner. lf no
direct owners hold at least 10 percent equity interest in the facility, then provide the required information for the
two direct owners with the largest equity interest ln the facllity.
Electrlc utllity or lf Yes,holding % equity
Full legal names of direct owners company interest
l) BCL & Assoclates, LLC Yes !
Yes I
Yes I
Yes I
Yes I
Yes f
Yes I
Yes fl
Yes fl
Yes fl
NoX
NoX
NoI
NoI
NoI
Non
Nof
NoI
Notr
Nof
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3)
4l
5)
6)
7)
8)
9)
l0)
fl Check here and continue in the Miscellaneous section starting on page 19 if additional space is needed
5b Upstream (i.e., indirect) ownership as of effective date or operdtion date: ldentify all upstream (i.e., indirect) owners
of the facility that both (l ) hold at least 1 0 percent equity interest in the facillty, and (2) are electric utilities, as
defined in section 3(22) of the Federal Power Act (16 U.s.C. 796(22)), or holding companies, as defined in section
1262(8) of the Public Utility Holding Company Act of 2OAS 142 U.S.C. 16451(8)). Also provide the percentage of
equity interest in the facility held by such owners. (Note that, because upstream owners may be subsidiaries of one
another, total percent equity interest repofted may exceed I00 percent.)
Check here if no such upstream owner exist. fi
Full legal names of electric utility or holding company upstream owners
Yo equity
interest
1)
2t
3)
4)
5)
6)
7l
8)
9)
10)
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Check here and continue in the Miscellaneous section starting on page l9 if additional space is needed
5c ldenti$ the facility operator
Frankiin Energy Stor:age Cne, LLC
{,
Case 1:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 8 of 19
FERC Form 556 Page8-All Facilities
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6a Describe the primary energy input: (check one maln category and, if applicable, one subcategory)
f] Blomass {specify) ffi Renewable resources (speciM [ Geothermal
I Landfill gas I Hydropower-river f] Fossilfuel (specify)
I Manure d igester gas E Hydro power - tidal I Coal (not waste)
I Municipal solid waste f] Hydro power - wave il Fuel oil/diesel
I Sewagedigestergas I Solar-photovoltaic I Natural gas(notwaste)
I Wood I Solar-thermal r-t Otherlossll fuel
I Other biomass (describe on page 19) fJ Wind - (de scribe on page lg)
Iwaste(speclfytypebelowinline6b) -otherrenewablpresource fother(descrlbeonpagelg]X (descrlbe on page 1 9)
6b lf you specifled "waste' as the prlmary energy input in line 6a, indicate the type of waste fuel usedr (check one)
I Waste fuel listed in 18 C.F.R. S 292.202(b) (specif one of the following)
I Anthracite culm produced prior to July 23, 1985
,- Anthraciterefarcthathasanaverageheatcontentof6,000Etuorlessperpoundandhasanaverageu ash content of45 percent or more
- Bituminouscoalrefusethathasanavetagoheatcontentofg,500Etuperpoundorlessandhasanu average ash content of 25 percent or more
Top or bottom subbltuminous coal produced on Federal lands or on Indlan lands that has been
.-., determirred to be waste by the United States Department of the lnterior's Bureau of Land Management
" (BLM) orthatislocatedonnon-Federal ornon-lndianlandsoutsldeofBLM'sjurisdlctlon,providedthat
the applicant showsthatthe lattercoal is an extension of that determined by BLM to be waste
Coal refuse produced on Federal lands or on lndian lands that has been determined to be waste by the
I BLM or that is located on non- Federal or non-lndian lands outside of BLM's jurisdictlon, provided that
applicant shows that the latter is an extenrion of that determlned by 8LM to be waste
- Llgnite produeed in association with the production of montan wax and lignite that becomes exposedu at , result of such a mining operation
I Gaseous fuels (except natural gas and synthetic gas from coal) (describe on page I9)
Waste natural gas from gas or oil wells (describe on page t t how the gas meets the requirements of '18
n C.F.B. $ 2.400 for waste natural gas; include with your filing any materials necessary to demonstrate
compliance with l8 C.F.R. S 2,400)
! Malerials that a government agency has certified for disposal by cornbustlon (describe on page l9)
I Heatfromexothermicreactions(describeonpage19) [ Residualheat(describeonpagelg)
f! Used rubber tires ! Plastic mate(als fl Refinery off-gas fl Petroleum coke
Other waste energy input that has little or no commercial value and exists in the absence of the qualifoing
fl facility industry (describe ln the Miscellaneous sectlon starting on page 19; include a discussion of the fuel's
lack of commercial value and existence in the absence of the qualifring facility Industry)
6( Provide the average energy input, calculated on a calendar year basil in terms of Btu/h for the following fossil fuel
energy inputs. and provide the related percentage ofthe total average annual energy input to the facility (1 I C"F.R. 5
292.202(j)). Foranyoil ornatural qasfuel,uselowerheatingvalue(18C"F.R.5292.202(m\.
Annual average enelgy Percentage oftotal
Fuel lor fuel annual !n
Natural gas 0 Btu/h A o/o
0il-based fuels O Btu/h 0%
Coal 0 Btu/h 0 o/o
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lndicate the maximum gross and maximum net electric power production capacity of the facility at the point(s) of
delivery by completing the worksheet below. Respond to all items. lf any of the parasitic loads and/or losses identified in
lines 7b throug h 7e are negligible, enter zero for those lines.
7a The maximum gross power production capacity at the terminals of the individual generator(s)
under the most favorable anticipated design conditlons 32, ooo kw
7b Parasitlc statlon power u:ed at the facility to run equipment which is necessary and integral to
the power production process (boiler feed pumps, fans/blowers, office or malntenance buildings
directly related to the operation of the power generatlng faclllty, etc.). lf this facillty includes non-
power production processes (for instance, power consumed by a cogeneration facility's thermal
host) , do not include any power consumed by the non-power productlon actlvlties in your
reported parasitic station power.r0 kw
7c Electrical losses in interconneqtlon transformers
4 14 kU/
7d Electrical losses in AC/DC conversion equipment, if any
920 kw
7e Other interconnection losses in power lines or facilities (other than transformers and AC/DC
conversion equipment) between the terminals of the generato(s) and the point of interconnection
wlth the utility 5,636 kw
7f Total deductions from gross power productlon capacity = 7b + 7c + 7d + 7e
". 000. 3 k\y'/
79 Maximum net power production capacity = 7a - 7f
2:i,0Cii.O kW
7h Description of facility and primary components: Describe the facility and lts operation. ldentify all bollers, heat
recovery stearn generators, prime movers (any mechanical equipment driving an electric generator), electrical
generators, photovoltaic solar equipment, fuel cell equipment and/or other ptirnary power generation equlpment
used in lhe facillty. Descriptions of components should include (as applicable) specifications of the nominal
capacities for mechanical output, electrical output, or steam generation of the identifled equipment. Foreach piece
of equipment identified, cleatly indicate how many pieces olthat type of equipment are included in the plant, and
which components are normally operatlng or normally in standby mode, Provide a description of how the
components operate as a system. Applicants for cogeneration facilities do not need to describe operations of
systems that are clearly depicted on and easily understandable from a cogeneration facility'r attached mass and
heat balance diagram; however, such applicants should provide any necesrary descrlption needed to understand
the sequential operation of the faclllty deplcted in thelr mass and heat balance diagram. l{ additional space ls
needed, contlnue in the Miscellaneous sectlon starting on page 19.
The project con$ist$ of an energy storaqe system Qualifying FacilLty providinq
scheduled and ciispatchable electricity in forward-looking time blocks. The
energy st.orage sysLem that comprises the energy storage QuaLi-fying Eacility is
designed to, and wi1l, receive 100t of its energy input from a combination of
rerrewable energy sources such as wind, solar, biogas, biomas, etc. The currenL
i ni l.ial design rrtil.izes solar photovol,taic (PV) modules mounl.ecl to single-axis
trackers Lo provide the electric energy input to the Qualifyi"ng Facility's
battery storage sysLem, The PV n.odules are pl.anned l.o be connected in sertes,/
paralJ-ej- combinati-ons to solar inuerters, rated apprcximately 2.5 MWac each,(subject to change) . The proposed eleclric energy sLorage Qualifyinq !'acilitywill <:on.si..sf of an el.e<:t.ro-chemLcal baLt-ery and wil. l have a maxrmrrm power oLlt-puL
capaciLy of 25 Mtdac for a sustarned time peri"od of 5 - 60 mj-nutes. ?he Facility
wiIl consist of an alLernating current {AC) to direct current (DC} control
system. The Qualifying Facility will be utilizeo tc provicle th€ purchasj,ng
utiliry with pre-schedulecl anci dispatchable AC energry wibhin prc-dctermined tine
bl.ocks. The sole source of electric power and en€rgy provided to the prrrehasing
utility wJ. I1 be l-he electro-chemj"cal reaction giving rise to the discharge of
electric power and energy by the baLtery. In L.urn. the sole direct source of
energy input provided to the battery Faci.J-ity will be, as descri"bed above,
r:enewable sources.
Case 1:18-cv-00236-REB Document 4-8 Filed 06/2511-8 Page 9 of 19
FERC Form 556 Page9-All Facilities
Case L:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 10 of 19
FERC Form 556 Page 10 - Small Power Production
Pursuant to l8 C.F.R.5 292.2041a1, the power production capaclty of any small power production facility, together
wlth the power productlon capaclty of any other small power production facllltles that use the eame energy
resource, are owned by the same person(s) or lts afflliates, and are located at the same slte, may not exceed 80
megawatts. To demonstrate compliance with this size limitation, or to demonstrate that your facility is exempt
from this slze lim itation under the Solar, Wind, Waste, and Geothermal Power Production lncentives Act of 1 990
(Pub. L. l0l-575, 104 Stat.2834 (1990) as amendedbyPub. L. I02-46, 105 Stat.249 (1991)), respond to lines 8a
through 8e below (as applicable).
8a ldentlff any facilities with electricalgenerating equipment located within I mile of the electrical generating
equipment of the instant facility, and for whlch anyof the entities identlfied in lines 5a or 5b, ortheir afflllates, holds
at least a 5 percent equity lnterest.
i . I Check here and continue in the Miscellaneous sectlon staftlng on page l9 if additional space is needed
Common owner(s)
KW
KW
KW3)
1)
2l
QF
here if no such facilities exist, ffi
Facility location Root docket #
(city or county, state) (if any)
hlaximum net power
production cap."l(ity
QF
.QF
8b The Solar, Wind, Waste, and Geothermal Power Production lncentives Act of 1990 (lncentlves Act) ptovldes
exemption from the slze limitatlons in 18 C.F.R. 5 292.204(a) for certain facilities that were certified prior to 1 995.
Are you seeking exemption fiorn the size limitations in 18 C.F.R. 5 292.204(a) by virtue of the lncentlves Act?
I Yes (continue at line 8c below) ffi No (skip lines 8c through 8e)
8c Was the original notlce of self-certiflcation or application for Commission ceftiflcation of the facility filed on or
before December3l. 1994? Yes i-.' No l-l
Sd Dld construction of the facilitycommence on or before December 31, 1999? Yes ; ; No i. i
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8c lf you answered No in llne 8d, lndicate whether reasonable dlligence was exerclsed toward the completion of
the faclllty, taklng lnto account all factors relevant to construction? Yes I No i -l lf you answered Yes, provide
a brlef naiiatlve ixplanation in the Miscellaneous section starting on pagE"iS of the construction timeline (in
particular, describe why construction started so long after the faclllty was certifled) and the dlligence exercised
towa rd completlon of the facility.
Pursuant to l8 C.F.R.5 292.2M(bl,qualifiTing small power production facilities may use fossil fuels, in minimal
amounts, for only the following purposes: ignition; start up; testing; llame stablllzation; control use; alleviation or
preventlon of unanticipated equipment outages; and alleviation or prevention of emergencies, directly affecting
the public health, safuty, or welfare, which would result from electric power outages. The amount of fossil fuels
used for these purposes may not exceed 25 percent ofthe total energy input ofthe facility during the l2-month
perlod beginning with the date the facility first produces electrlc energy or any calendar year thereafter.
9a Certification of compllance wlth I8 C.F.R. S 292.204(b) with respect to uses of fossil fuel:
fi Applicant certifles that the facility will use fossil fuels exclusively f or the purposes listed above.
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9b Certiflcation of compliance with I 8 C.F.R. S 292,204(b) wlth respect to amount of fossll fuel used annually:
Applicant certifies that the amount of fossil fuel used at the facility will not, in aggregate, exceed 25
E percent of the total energy input of the facility during the l2-month period beginning with the date the
facility first produces electric energy or any calendar year thereafter.
lnformation Required for Small Power Production Facility
lf you lndlcated ln llne I k that you are seeking qualifying small power production faclllty status for your facility, then you
must to the items on this Otherwlse.10.
s
Case L:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 11 of 19
FERC Form 556 Page 1 1 - Cogeneration Faclllties
Pursuant to l8 C,F.R. S 292.2021c1, a cogeneration facillty produces electric energy and forms of useful thermal
energy (such as heat or steam) used for lndustrial, commercial, heatlng, or cooling purposes, through the sequential
useofenergy. Pursuantto18C.F.R.S292.202(s),"sequential use"ofenergymeansthefollowing:(1)foratopplng-
cycle cogeneration facility, the use of reject heat from a power production process in sufficient amounts in a
thermal application or process to conform to the requirements of the operating standard contained in l8 C.F.R. $
292.205(a'), or 12) for a bottoming-cycle cogeneration facility, the use of at least some reject heat from a thermal
application or process for power production,
1 0! What type(s) of cogeneration technology does the facility represent? (check all that apply)
I jTopping-cyclecogeneration 1 lBottoming-cyclecogeneratlon
co
(oox
o:cnPotrUK
.t,-
ocot,
10b To help demonstrate the sequential operation of the cogeneration process, and to support compliance with
other requlrements such as the operating and efflciency standards, lnclude with your filing a mass and heat
balance dlagram depicting average annual operating conditions. This diagram must include certain items and
meet certain requirements, as described below, You must check next to the descriptlon of each requirernent
below to certihT that you have complied with these requlrements.
Check to certifo
compliance with
lndicated requirement Requkement
tl
Diagram must show orientation within system piping andlor ducts of all prime movers,
heat recovery steam generators, boilers, electric generators, and condensers (as
appllcable), as well as any other primary equipment relevant to the cogeneration
process.
Anyaverageannual valuesrequiredtobereportedinllnes10b, I2a, I3a. I3b, I3d, Ilf,
1 4a, I 5b, 1 5d and/or 1 5f must be computed over the anticipated hours of operation.
Diagram must specifr all fuel inputs by fuel type and average annual rate in Btu/h. Fuel
for supplementary firing should be specified separately and clearly labeled. All
specifications of fuel inputs should use lower heatlng values.
Diagram must specify average gross electric output in kW or MW for each generator.
Dlagram must speciff average mechanical output (that it any mechanical energy taken
off of the shaft of the prime movers for purposes not directly related to electric power
generation) in horsepower, if any. Typically, a cogeneration facllity has no mechanical ,
output,
At each point for which working fluld flow conditions are required to be specified (see
below), such flow condition data must include mass flow rate (in lb/h or kg/s),
temperature (in "F, R,'C or K|, absolute pressure (ln psla or kPa) and enthalpy (in Btu/lb
orU/kg). Exception: Forsystemswheretheworkingfluldlsllquidon/y(novaporatany
polntlnthecycle) andwherethetypeof liquid andspecificheatof thatliquidareclearly
indicated on the diagram or in the Mlscellaneous section startlng on page 19, only mass
flow rate and temperature (not pressure and enthalpy) need be specified. For reference,
specific heat at standard conditions for pure liq uid water is approximately 1.002 Btu/
ilblR) or 4.1 95 kJl(kg'K),
Diagram must specifo working fluid flow conditions at lnput to and output from each
steam turblne o( other expanslon turbine or back-pressure turbine.
Diagram must specify wolking fluid flow conditions at delivery to and return from each
thermal application.
Dlagram must speciry working fluid flowconditions at make-up water inputs,
lnformation Required for Cogeneration Facility
lf you ind icated in llne 1 k that you are seeklng quallfuing cogeneration facility status for your facillty, then you must respond
to the items on 13. Othenvise,pages 1 1 13.1t
tr
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EPAct 2005 cogeneration facilitiesr The Energy Policy Act of 2005 (EPAct 2005) established a new section 210(n) of
the Public Utility Regulatory Pollcies Act of 1978 (PURPA), 1 6 USC 82aa-3(n), wlth addltlonal requirements for any
qualiffing cogeneratlon facllity that (1) is seeking to sell electric energy pursuant to section 210 of PURPA and (2)
was elther not a cogeneration facility on August 8, 2005, or had not flled a self-certlflcation or application for
Commlsslon certlflcatlon of QF status on or before February 1 , 2006, These requirements were lmplemented by the
Com mission in 18 C.F.R, 5 292.205(d). Complete the lines below, carefully followlng the lnstructlons, to demonstrate
whether these addltlonal requlrements apply to your cogeneration facility and, if so, whether your facllity complies
with such requlrements.
I I e Was your facility operatlng as a qualifying cogeneration facillty on or before August 8, 2005? Yes i _i t to 1-'
I t b Was the initialfiling seeking certification of your facility (whether a notice of self-certification or an application
for Commission certification) filed on or before February 1, 2006? Yes . -l tlo , I
lf the answer to elther llne 1 1a or 1 I b is Yes, then continue at line I 1 c below. Otherwlse, lf the answer to both lines
I 'l a and 1 1 b are No, skip to line I 1e below.
I Ic With respect to the derign and operation of the facility, have any changes been lmplemented on or after
February 2, 2006 that affect general plant operation, affect use ofthermal output, and/or Increase net power
prod uctlon capaclty from the plant's capacity on February 1 . 2006?
i l Yes (contlnue at line I I d below)
No, Your facility is not subject to the requirements of 1 8 C.F.B. S 292,205(d) at this time. However, it may be
i- I subject to to these requirements in the future if changes are rnade to the faciltty. At such tlme, the appllcant
would need to recertifi/ the facility to determine eligibility. Skip lines 1 1d through 1 lj.
lld Doestheappllcantcontendthatthechangesidentifiedinllnellcarenotsosignificantastomakethefacllity
a "new" cogeneration facility that would be subject to the 18 C.F.R, S 2C2.205(d) cogeneration requirements?
Yes. Provide in the Miscellaneous sectlon starting on page l9adescrlption ofany relevant changes nrade to
t"'l the facility (lncludlng the purpose of the changes) and a discussion of why the facility should not be
considered a "new" cogeneration facility in light of these changes. Skip lines 11e through I 1j.
No, Applicant stipulates to the fact that it is a "new" cogeneration facility (for purposes of determining the, i applicability of the req uirements of 1 8 C.F.R, 5 292.205(d)) by virtue of modifications to the facility that were
initiated on or after February 2,2006. Continue below at line 1 le.
11c Wll electricenergyfrornthefacilitybesoldpursuanttosection2l0ofPURPA?
, , Yes. The facility ls an EPAct 2005 cogeneration facility. You must demonstrate compliance with 18 C.F.R. S
- 292.205(d)(2) bycontinuing atllne I lf below.
No. Applicant certifies that energy will not be sold pursuant to section 2'10 of PURPA. Appllcant also certifies
, - its understandinq that lt must recertlfy its faclllty in order to deterrnine compliance with the requirements of
'.. '18C.F.R.S292.205(d) beforesellingenergypursuanttosectlon2l0ofPURPAinthefuture, Skiplinesllf
through I 1j.
t 1f ls the net power production capacity of your cogeneration facility, as indicated in line 79 above, less than or
equalto 5,ooo kW?
Yes, the net power production capacity is less than or equal to 5,000 kW. 18 C.F.R. 5 292.205(d)(4) provides a
rebuttabie presumption that cogeneration facilities of 5,000 kW and smaller capacity comply with the
requirements for fundamental use of the facllity's energy output in l8 C.F,R. I 292.205(dX2). Applicant
certifies lts understanding that, should the power production capaclty of the facllity increase above 5,000
kW, then the facillty must be recertified to (among other thlngs) demonstrate compliance with 18 C.F.R, 5
292.205(dX2), Skip lines 1 lg through 1 1j,
No, the net power production capacity is greater than 5,000 kW, Demonstrate compliance with the
requirements for fundamental use of the facility's energy output in 18 C-F.R. 5 292.205(dX2) by continuing on
the next page at line 1 1 g.
Case 1:18-cv-00236-REB Document 4-B Filed 06/25118 Page L2 oI Lg
Page 12 - Cogeneration Facilities
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FERC Form 556
Case 1-:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 13 of 19
FERC Form 556 Page 13 - Cogeneration Facilities
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Lines 1 1g through I 1 k below guide the applicant through the process of demonstrating compliance with the
requirements for "fundamental use" of the facillty's energy output. 'ls C.F.R. S 292.205(dX2). Only respond to the
llnes on this page if the instructions on the previous page direct you to do so. Otherwise, skip this page.
18 C.F.R. 5 292.205(dX2) requires that the electrical, thermal, chemlcal and mechanical output of an EPAct 2005
cogeneratlon facllity is used fundamentally for industrial, commerciaL residentlal or lnstltutlonal purposes and is
not lntended fundamentally for sale to an electrlc utility, taking lnto arcount technological, efficiency, economic,
and variable thermal energy requirements, as well as state laws applicable to sales of electric energy from a
qualifying facility to its host facllity. lf you were directed on the previous page to respond to the items on this page,
then your facility is an EPAct 2005 cogeneration facllity that ls subject to this "fundamental use'' requirement.
The Commisslon's regulations provide a two-pronged approach to demonstrating compliance with the
requirementsforfundamentaluseofthefacility'senergyoutput. Fitst,theCommissionhasestabllshedinlsC.F.R.
S 292.205(dX3) a 'fundamental use test" that can be used to demonstrate cornpliance with t 8 C.F,R. 5 292.205(dX2).
Under the fundamental use test, a faclllty ls considered to comply with I8 C.F.R. 5 292.205(dX2) if at least 50 percent
of the facility's total annual energy output (including electrical, thermal, chemical and mechanical energy output) is
used for industrtal, commercial, residential or institutional purposes.
Second, an applicant for a facility that does not pass the fundamental use test may provlde a narratlve explanatlon
of and support for its contention that the facility nonetheless meets the requirement that the electrical, thermal,
chemlcal and mechanical output of an EPAct 2005 cogeneratlon facllity is used fundamentally for lndustrlal,
commercial, residentlal or lnstltutional purpose! and is not intended fundamentally for sale to an electric utlllty,
taklng into account technological, efficlency, economig and variable therrnal energy requlrements, as well as state
laws appllcable to sales of electric energy from a quallfying facllity to its host facility.
Complete lines 1 I g through 1 lj below to determine compliance with lhe fundamental use test in 18 C.F.R. 5
292.205(dX3). Complete llnes 119 through lljevenif youdonotintendtorelyuponthefundomentolusetestto
demonstrute complioncewith ,8 Cf.R. g 292,205(d)(2).
I I g Amount of electrical, thermal, chemical and mechanical energy output (net of internal
generation plant losses and parasltlc loads) expected to be used annually for industrlal,
commercial, resldentlal or lnstltutional purposes and not sold to an electric utillty M\,/Vh
t th Total amount of electrical, thermal, chernical and mechanical energy expected to be
sold to an electric utility tul1,1/h
1 I I Percentage of total annual energy output expected to be used for industrial,
commercial, resldential or institutional purposes and not rold to a utility
=100*1lql(119+11h){l Vo
I lf ls the response in line 1 I i greater than or equal to 50 percent?
Yes. Your faclllty complles with 18 C.F.R. 5 292.205(d)(2) by virtue of passlng the fundamental use test
provlded in 1 8 C.F.R. 5 292.205(dX3). Applicant certlfles its understanding that, if it ir to rely upon passing
i ': the fundamental use test ai a basls for complylng with l8 C.F.R. 6 292.205(dX2), then the faclllty must
comply with the fundamental use test both in the l2-month period beginning with the date the facillty first
produces electrlc energy, and in all subsequent calendar years.
No. Your facility does not pass the fundamental use test. lnstead, you must provide in the Miscellaneous
sectlon starting on page 1 9 a narrative explanatlon of and support for why your faclllty meets the
requirement that the electrical, thermal, chemical and mechanical output of an EPAct 2005 cogeneration
facility is used fundamentally for industrial, commercial, residential or institutional purposes and is not
intended fundamentally for sale to an electric utility, taking into account technological, efficiency, economlc,
and variable thermal energy requirements, as well as state laws applicable to sales of electric energy from a
QFtoitshostfacility. Applicantsprovidinganarrativeexplanationofwhytheirfacilltyshoutdbefoundto
comply with I 8 C.F,R. E 292.205(dX2) in spite of non-compliance with the fundamental use test may want to
review paragraphs 47 through 61 of Order No.671 (accessible from the Commlssion's QF website at
www.ferc.gov/QF), which provide discussion of the facts and circumstances that may support their
explanation. Applicant should also note that the percentage reported above will establish the :tandard that
that facility must comply wlth, both for the i 2-month period beginnlng wlth the date the facility flrst
produces electric energy, and in all subsequent calendar years, See Order No. 67 1 at paragraph 5 l . As such,
the appllcant should make sure that lt reports appropriate values on lines I lg and 'l t h above to serve as the
relevant annual standard, taking into account expected varlations ln production conditions.
f}
Case 1:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 14 of 19
FERC Form 556 Page l4 - Topping-Cycle Cogeneration Facilities
Information Required for Topping-Cycle Cogeneration Facility
lfyoulndicatedlnline l0athatyourfacilityrepresentstopplng-cyclecogenerationtechnology,thenyoumustrespondto
the ltems on l4and 15. Otherwise,l4and 15
thermal energy output of a topplng-cycle cogeneration facility is the net energy made available to an industrlal
or commercial process or used in a heatlng or cooling application. Pursuant to sections 292.202(c), (d) and (h) of the
Commlsslon's regulatlons (18 C.F.R. $S 292.202(c), (d) and (h)), the therrnal energy output of a qualifying topplng-
cycle cogeneration facility must be useful. ln connection wlth this requirernent, describe the thermal output of the
topplng-cycle cogeneratlon facility by responding to lines I 2a and t 2b below.
l2a ldentifranddescribeeachtherrnal host,andspecilrtheannualaveragerateofthermal outputmadeavailable
to each host for each use. For hosts with multiple uses of thermal output, provide the data for each use lnseparoterows' Averageannual rate of
thermal output
attrlbutable to use (net of
Name of entity (thermal host) Thermal host's relatlonship to facility; heat contained in process
taking thermal output Thermal host's use of thermal output return or make.up water)
thermal host's rela tol)
thermalhosl's use oi thernral
therrnal host's relalionshi to facil2)
rhcrmal hoEr's use of thernral ou t Btu/h
t thermal host's rel ro facil
lect therrnal host's use of thernral orr t Bru/h
thermalhost's to facili4)
thermalhost's use of thernral oLr i Btu/h
thermal host's to facili
s)
(rrermal host's use oI lhenrtal uLr UI ljt u/h
therrnal host's relalion to faolity
6)
thermal host's use of ihernal
'" i Check here and continue In the Miscellaneous section sta(ing on page l9 if additional space is needed
a)
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=t 2b Demonrtration of usefulness of thermal output At a minimum, provide a brief desctiption of each use of the
thermal output ldentlfled above. ln some cases, this brlef descrlption is sufficient to demonstrate usefulness.
However, if your facllity's use of thermal output is not common, and/or if the usefulness of such thermal output is
not reasonably clear, then you must provide additional details as necessary to demonstrate usefulness. Your
application may be rejected and/or additional information may be required if an insufficient showing of usefulness
is made. (Exception: lf you have previously received a Commission certiflcation approving a speclflc use of thermal
output related to the instant facility, then you need only provide a brief descrlption of that use and a reference by
date and docket number to the order certifylng your faclllty wlth the indicated use. Such exemptlon may not be
used lf any change creates a nraterlal devlation from the prevlously authorized use.) lf additlonal space is needed,
continue in the Mlscellaneous sectlon starting on page 19.
Btu/h
3)
Btu/h
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Applicants for facilities representing topping-cycle technology must demonstrate compliance wlth the topping-
cycleoperatingstandardand,ifapplicable,efflciencystandard, Section292.205(aX1)oftheCommis:ion's
regulations (18 C.F.R. 5 292.205(aX1)) establishes the operating standard for topplng-cycle cogeneratlon facilities:
the useful thermal enelgy output must be no less than 5 percent of the total energy output. Sectlon 292.205(aX2)
(18 C,F.R. 5 292.205(aX2)) establishes the efficiency standard for topplng-cycle cogeneration facllities for whlch
installation commenced on or after March 13, 1980: the useful power output of the facillty plus one-half the useful
thermal energy output must (A) be no less than 42,5 percent ofthe total energy input ofnatural gas and oil to the
facllity; and (B) lf the useful thermal energy output is less than 'l 5 percent of the total energy output of the facllity,
benolessthan45percentofthetotal energyinputof natural gasandoil tothefacility. Todemonstrate
compliance with the topping-cycle operating and/or efficiency standards, or to demonstrate that your facility is
exempt from the efficlency standard based on the date that lnstallation commenced, respond to lines 13a through
131 below.
lf you indicated in line 10a that your facility represents both topping-cycle and bottoming<ycle cogeneration
technology, then respond to lines I 3a through I 3l below conslderlng only the energy lnputs and outputs
attributable to the topplng-cycle portlon of your facility. Your mass and heat balance dlagram must make clear
which mass and energy flow values and system components are for which portlon (topplng or bottoming) of the
cogeneratlon sy!tem,
l3a lndicatetheannual averagerateofuseful thermal energyoutputmadeavailable
to the host(s), net of any heat contained in cqndensate return or make-up water Btu/tr
13b lndicate the annual average /ate ofnet electrical energy output
kvv
13c Multiply llne l3b by 3,412 to convert from kWto Btu/h
C Btu/h
13d lndlcate the annual average rate of mechanical energy output taken directly off
of the shaft of a prime mover for purposes not directly related to power production
(thls value ls usually zero)hp
I3e Multiply line l3d by 2,544 to conveil from hp to Btu/h
{l 8tu/h
I3f tndicate the annual average rate of energy input from natural gas and oil
Btu/h
139 Topping-cycle operatlng value = 100 * 1 3a / (l 3a + 1 lc + I 3e)
A s/o
f 3h Topping-cycle efficiency value = 100 * (0,5'1 3a + I 3€ + 1 3e) / 13f
() o/o
13i Compliance with operating standard: ls the operatlng value shown in llne l39 greatei than or equal to 5%?
1 I Yes (complies with operating standard) i- ] No (does not comply with operating standard)
13, DidlnstallationofthefacllitylnitscurrentformcommenceonorafterMarchl3, 1980?
, , Yes. Your facility is subject to the efficlency requirements of l8 C.F.R. I 292.205(aX2). Demonstrate
' , compliance with the efficiency requirement by responding to line 1 3k or 131, as applicable, below.
i' j No. Your facility is exempt from the efficiency standard, Skip lines 1 3k and 1 31.
t 3k Compliance with efficiency standard (for low operating value): lf the operating value shourn in line 139 is less
than 1 5%, then indlcate below whether the efflclency value shown in line 1 3h greater than or equal to 45%:
Yes (complies with efficiency standard) No (does not comply with efficiency standard)
131 Compliance with efficiency standard (for high operating value): lf the operating value shown in line 139 is
greater than or equal to 15o/o, then indicate below whether the efficiency value shown in line l3h is greater than or
equal to 42.5%:
iYes (complies with efficiency standard) .l No (does not comply with efficiency standard)
Case 1:1-8-cv-00236-REB Document 4-8 Filed 06/25118 Page 1-5 of 19
FERC Form 556 Page l5 - Topping-Cycle Cogeneration Facillties
vl
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Case 1:18-cv-00236-REB Document 4-8 Filed 06i25/18 Page 16 of 1-9
FERC Form 556 Page l6 - Bottomlng-Cycle Cogeneration Facilitles
lnformation Required for Bottoming-Cycle Cogeneration Facility
lf you indicated in line 10a that your facility represents bottomlng-cycle cogeneration technology, then you must respond
to the ltems on l6 and I 7. Otherwise,l6 and 17,
The thermal energy output of a bottomlng-cycle cogeneratlon facillty is the energy related to the process(es) from
which at least some of the reject heat ls then used for power productlon. Pursuant to sections 292.202(c) and (e) of
the Commlssion's regulatlons (18 C,F,R.5 292.202(cI and (e)) , the thermal energy output of a quallfllng bottomlng-
cycle cogeneration facility must be useful. ln connection with this requlrement, descrlbe the process(es) from wh
at least some of the reJect heat ls used for power productlon by responding to lines 14a and l4b below.
I 4a ldentifo and descrlbe each thermal host and each bottoming-cycle cogeneration process engaged ln by each
host. For hosts with multiple bottomlng-cycle cogeneration processes, provlde the data for each process in
seporate rows'
Has the energy rnput to
Name of entlty (thermal host) the thermal host been
performlng the process from augmented for purposes
which at least some of the of increaslng power
reject heat is used for power Thermal host's relationshlp to facility; production capacity?productlon Thermal host's proc.ess type (if Yes, describe on p. 19)
thermal host's relation to Yesll Nol.ll1)
thermal host's
thermal host's relationship to Yes' i No '-2)
thermal host's proceis
thermal host's rela to
thermal host's
Yes No Il
i- i Check here and contln ue in the Mlscellaneous section startlng on page l9 if additional space is needed
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oaif
t4b Demonstration of usefulness of thermal output: At a minimum, provide a brief descrlption of each process
identified above. ln some cases, this brief description ls sufliclentto demonstrate usefulness. However, if your
facllity's procers Is not common, and/or if the usefulness of such thermal output is not reasonably clear, then you
must provide additional details as necessary to demonstrate usefulness, Your application may be rejected and/or
additional information mayberequlredif an lnsufflclentshowlngof usefulnessismade. (Exception: lf youhave
previously received a Commlssion certificatlon approvlng a speclflc bottoming<ycle process related to the instant
facility, then you need only provide a briefdescrlption ofthat processand a reference bydate and docket number
to the order certifoing your facility with the indicated process. Such exemption may not be used if any material
changes to the process have been made.) lf additional space ls needed, contlnue in the Miscellaneous section
5tarting on page 19.
3)
Case 1:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 17 ol L9
FERC Form 556 Page 17 - Bottoming-Cycle Cogeneration Facllities
6
C'
0
s
!Ec
9'' 8
r'UJ
9o6Ya, -t
XEV;o)uCC'= 0,L-.-l- (J
6 '-rr6
Applicants for facilities representing bottoming-cycle technology and for which lnstallation commenced on or after
March 1 3, '1990 must dernonstrate cornpliance with the bottoming<ycle efflclency standards. Section 292.205(b) of
the Commlsslon's regulatlons (18 C.F.R. 5 292,205(b)) establishes the efflclency standard for bottoming-cycle
cogeneration facilities: the useful power output of the facility must be no less than 45 percent of the energy input
of natural gas and oil for supplementary firing. To demonstrate compliance wlth the bottoming-cycle efficlency
standard (if applicable), or to demonstrate that your facillty ls exempt from this standard based on the date that
lnstallation of the facility began, respond to lines 15a through 15h below.
lf you indicated in line l0a that your faclllty represents both topplng-cycle and bottoming-cycle cogeneratlon
technology, then respond to lines l5a through 1 5h below considering only the energy inputs and outputs
attributable to the bottoming-cycle poftion of your facility. Your mass and heat balance diagram must make clear
which mass and energy flow values and system components are for which portion of the cogeneration system
(topping or bottoming).
l5a DidinstallatlonofthefacilityinitscurrentformcommenceonorafterMarchl3,tgs0?
. - I Yes. Your facility is subject to the efficiency requirement of 18 C.F.R, S 292.205(b). Demonstrate compliance
' - wlth the efflclency requitement by respondlng to llnes l5b through 15h below.
i i No. Your faclllty is exempt from the efficiency standard. Skip the rest of page 1 7.
t 5b lndicate the annual average rate of net electrical energy output
l(VV
t 5c Multiply line I 5b by 3,412 to convert from kW to Btui h
0 Btu/h
l5d tndicate the annual average rate of mechanical energy output taken directly off
of the shaft of a prime mover for purposes not directly related to power production
(this value is usually zero)hp
15e Multiply line 15d by 2,544 to convert from hp to 8tu/h
0 Btu/h
1 5f lndicate the annual average rate of supplementary energy input from natural gas
or oil Btulh
t 59 Bottoming-rycle efficiency value = 100 r (l 5c + I 5e) / I 5f
a%
t 5h Compliance with efficiency standard: lndicate below whether the efficiency value shown in line 159 ls greater
than or equal to 459o:
i_-'i Yes (complles with efflciency standard) i " i No (does not comply wlth efficiency standard)
Case 1:18-cv-00236-REB Document 4-8 Filed 06/2511-8 Page 18 of 1-9
FERC Form 556 Page 18 - All Facllities
Certificate of Completeness, Accuracy and Authorig
Applicant must certify compliance with and understandlng of filing requirements by checking next to each item below and
slgning at the bottom of this section. Forms wlth incomplete Certificates of Completeness, Accuracy and Authority will be
rejected by the Secretary of the Commisslon.
Signer identlfied below certifles the following: (check all items and applicable subitems)
He or she has read the flling, lncludlng any information contalned in any attached documents, such as cogeneration
ffi mass and heat balance diagrams, and any information contalned ln the Miscellaneous section starting on page 19, and
knows its contents.
D(
He or she has provided all of the requlred information for certificatioq and the provlded lnformatlon ls true as stated,
to the best of hls or her knowledge and beliel
He or she possess full power and authority to sign the filing; as required by Rule 2005(a)(3) of the Commission's Rules of
Practice and Procedure (18 C.F.R. S 385.2005(aX3)), he or she is one of the following: (check one)
fl The person on whose behalf the filing is made
! An offlcer of the corporation, trust, assoclation, or other organized group on behalf of which the filing ls made
- Anofficer,agent,oremployeofthegovernmental authority,agency,orinstrumentalityonbehalfofwhichtheU flling is made
,- A representative qualified to practice before the Comnrir:lon under Rule 2101 of the Commission's Rules of6 Practlce and Procedure (18 C.F,R. S 335,2.l01) and r,vho possesses authorityto sign
He or shE has reviewed all automatlc calculations and agrees with their results, unless otherwlse noted in the
Miscellaneous sectlon startlng on page 19.
He or she has provided a copy of this Form 556 and all attachments to the utillties wlth which the facility will
lnterconnect and tranract (see lines 4a through 4d), as well as to the regulatory authorities of the states ln whlch the
facility and those utllitles reslde. See the Required Notlce to Public Utilities and State Regulatory Authorltles section on
page 3 for more information.
a
X
x
Provide your slgnature, address and signature date below. Rule 2005(c) of the Commission's Rules of Practlce and
Procedure (18 C.F.R. 5 385.2005(c)) provides that persons flllng their documents electronically may use typed characters
representing his or her name to slgn the flled documents. A person filing this document electronlcally should slgn (by
typing his or her name) in the space provided below.
Your Signature
Peter J, Richardson
Your address
515 N. 27th StreeL
Boise, ID 83702
Date
'.;l ',1..; . ,
Audit Notes
Com mission Staff Use Only:n
Case 1:18-cv-00236-REB Document 4-8 Filed 06/25118 Page 1-9 of 1-9
FERC Form 556 Page l9 - All Facllities
Miscellaneous
Use this space to provide any information for whlch there was not sufflclent space ln the previous sections of the forrn to
provlde. For each such item of lnformatlon cleorty identify the line number that the informotlon belangs to. You may also use
this space to provide any additlonal lnformation you believe is relevant to the certification of your facllity.
Your response below is not limited to one page, Addltlonal page(s) wlll automatlcally be inserted into this form if the
lengthofyourresponseexceedsthespaceonthispage. Useasmanypagesasyourequire.
The oriqi na L tr"orm 556 incorrectly listed the lat-ir-urie ar".d lcngitude coordinates irt
?aragraph 3c as West 114,060 NorLh 42.206. The correct lati":irde and iongitude
coordi"nates are West 114.605 North 42,191.
Case l-:18-cv-00236-REB Document 4-9 Filed 06/251L8 Page L of 20
FEDERAL ENERGY REGULATORY COMMISSION
WA5HIN6TON, DC
OMB Conrro , I902.00/5
Explrailon 06/3012019
Certification of Qualifying Facility (QF) Status for a Small Power
Productlon or Cogeneration Facility
General
Questlonr about completlng lhls form should be sent to form556€lerc.oov, lnformatlon about lhE Commisrlon's QF
proglam, anlwers to frequently asked questlons about QF requlremenls or completlng thlr form, and contact lnbrmallon for
QF ptognm rtaff are avallable at the Commlsrlon's QF webrlte. wwr,v.ferqgov/OF. The Comrnlsslon's QF webrlte abo
ptovldes llnk to the Commlsslon'' QF regulatlons {18 C,F.R. I 131,80 and Part 2921, as wellas other ststuteJ and orders
peilalning to the Commlrslon's QF program,
Who Must File
Any appllcant seeklng QF status or recertlllcatlon of QF status for a generatlng faclllty with a net power producllon capaclty
(as determlned ln llnes 7a through 79 below) greater than 1000 kW must ffle a self-<ertllicatlon or an appllcatlon for
Commlssion certl0catlon of QF status, whlch lncluder a properly completed Form 556, Any appllcant seeklng QF statur for a
generallng facllity wlth a net power productlon capa(lty 1000 kW or less ls exempt lrom the certlficatlon requlremenL and ls
therefore not requlred to complete or flle a Form 556. See l8 C.F.R. ! 292.203.
How to Complete the Form 556
Thls Iorm is Intended lo be completed by respondlng to the lterns ln the orderthey are presented, accordlng to the
lnstructbnsglven. lfyouneedloback-traclt"youmayneedtoclearcertalnresponresbeforeyouwlllbeallowedtochenge
other responscr made previou:ly ln the form. lf you experlence problems, clickon the nearert help button (@ ) for
asslstance, or conta(t CDmmlrslon 5taff at fgtr[55$]&Icrqgy.
Certain lines ln thls form wlll be aulomatically calculated based on rerpon5es to prevlous llnes, wlth the relevant formula:
shown. Youmurtr€spondtoall of thepreviouslinerwlthlnasectionbeforelheresultsofanautomatlcallycalculrtedfleld
wlll bedlsplayed. lfyoudlsagreewiththererultsofanyautomatlccalculationonthisform,contactCommbsionstaffat
[e-mail] to dlrcu:s the dlxrepancy befote lillng.
You muit (omplete all llnes ln thls form unless lnstructed othenrvlse. Do not alter thl! form or save thtr brm ln a dlfferent
folmat. lncomplete or alte red forms, or forms saved in formats other than PDF. will be tejected.
How to File a Completed Form 556
Appllcontr are requlred lo llle lhelr Form 556 clectronl(ally through lhu Commlrrlon'r eFlllng websltB (ree ln5!ru.tlonr on
page 2). By fillng electronlcally, you wlll lcduce your llllng burden, rav€ pnper resources, iave poitage or courier rharger,
help keep Comrnlsslon erpenses to a mlnlmum, rnd recelve a much farler conflrmatlon (vla an emall rontalnlng the docket
number asslgned to your fa<llhy) that the Commlsslon has received your ffllng.
lf you are rlrnultaneou:ly llllng both a watuer request and a Form 556 ar parl of an appllcatlon for Commlsslon certlllcation,
see the "Walver Regucst!'r€ction on page ll for more lnformitlon on how to flle.
Paperwork Reduction Act Notice
Thls form ls approved by the Offlce of Management and Budget. Compllance wlth the lnformallon requlrementr establlched
by the FERC Form No.556 ls requlred lo obtaln or malntaln $atut as a QF.see I8 C-F.R. 5 131.80 and Part 292. An agency m.y
not conducl o, rponror, and a person ls not requlred to respond to, a collectlon of lnformatlon unless lt dlrplap . currently
valld OMB control number.The estimated burden for complettng the FERC Form No.556, lncluding gathering and reporting
informatlon, ir as follows:3 hours for self-certlffcatlon of a srnall power productlon facillty. S hours forself<crtificEtions of a
cogenerataon f.clllty, 6 hours for an applicrtion for Comrnlssion cerUflcatlon of a small power productlon facility, and 50 hour
for an appllcation for Commlrslon certlflcatlon of a cogeneratlon fadlity. !end comments regarding thir burden ertimate or
any rspect of this collealon ol lnformatlon, lncludlng suggeitlons for reducing thlr burden, to the followlng: lnformation
Clearance Officer, Offlce of the Executive Dlrector {ED-32). Federal Energy ffegulatory Commlsslon, 888 Flrrt Street N.E,
Warhington, OC :0426 lDatatlearqgieafercgql); and Derk Officer for itRC, Oflice of Informatlon and Segulatory Atralri,
Ofilce of Managernent and Sudget, Washlngton, DC 20503 (oira Submlr3ton6omb.eop.pov).Include the Control No.
| 902-0075 ln any corespondence.
Form 556
Case 1:18-cv-00236-REB Document 4-9 Filed 06/25118 Page 2 of 20
fEBC Form 555 Page 2 - lnstructlons
Electronic Filing (eFiling)
To electronically llleyourForm 556, vlslt theCommlsslon'sQF webrlte atwww.hrcggy/Qiand cllck the eFlllng llnk.
lf you are eFlllng your llnt documenl you wlll need to reglster with your name, emrll address, malllng addrers, and phone
number. lf y,ou are reglrtering on behalf of an employer, then you wlllal:o need to provlde the employer name, alternate
contact name, alternate contact phone nuntber and and alternate contact emall.
Once you are reglstered, log ln to eFlllng wllh yotr reglstered emalladdress ard the paiiword that you created at
reglstration. Follow the lnstructlons. When ptompted. select one of lhe followlng QF-relat€d tillng typer, ar appropriate,
from the Electrlc or General llllng category,
Flllng category Flling Type as llrted ln eFlling Derrlptlon
Electrlc
(Fee) AFplication for Commlrtlofl Cert. ar Cogeneration QF
Use to submlt an applcatlon for
Commbsion cenllkEtion or
Commlssion recertlficatlon of e
cogeneratlon faclllty as a Qf .
(Feel Appllcation for Commlsslon C€rt. a! Small Power QF
Ure to rubmlt an rppllcatlon for
Comrnlssloo certlfl catlon or
Commlsrlon recertillcatlon of a
small power productlon faclllty ar r
0lc.
Self-Certifkatlon Notiqe (QF, EG, fC)
Use to tubmlt a notice of self-
certlllcatbn of your faclllty
(cogeneration or small power
produaionl as a QF.
5 elf-Recertifi <ation of Quallfying Faclllty {Qt)
Use to submlt a notlce of self-
recertificatlon of your faclllty
{cogeneratlon or :mall power
prodrrctlonl as a QF.
5upplemental lnfonniition or Requert
Usc to corred or rupplement a
Form 556 that was submitted wlth
erron or omlsslons, or for whlch
Commisslon $aff has requested
addltlonal lnforrnrtion. Do roa ure
this filing type to report new
changes to o faclltty or lts
ownerihip; r.ther, use a sell-
recertlfi(atlon or Commls:lon
recerttflcntlon to .eport such
changer.
General (Fe*) Petition for Oe(laratory Order (not under FPA Part I )
Use to submlt a petltion for
declatatory order grantlrg a walver
of Commlsrlon Qf regulationr
pursuant to 18 C.F.R 55 292.204(a)
(3) and/or 292.205{c). A Form 556 is
not requlred for a petitlon for
declaratory order unlest
Commlsslor recertlfl catlon ls being
requetted ar pa* ofthe petltlon.
Youwlll be promptedtotubmltyourffllngfee,if appllcable,duringlheelectronicsubmlrslonprocess. Flllngfeercanbepald
vla electronlc bank account deblt or credlt card.
Dutlng the eFlllng prxess, you wll[ be prompted to select you. flla(sl for upload from your computer.
Case 1:18-cv-00236-REB Document 4-9 Filed 06/25118 Page 3 of 20
FERC Form 556 3 - lngtrurtlons
Filing Fee
No fillng fee lr requlred lf you are submlttlng a self-certlflcatlon or self-recertlflcatlon of your faclllty as a QF pursuant to l8
C.F.R. 3 292.207(r).
A flllng fee is requlred if you are flling eltherof the followlng:
( l) an appllcatlon for Commlsslon certlflcntlon or recertlflcatlon of your faclllty as a QF pursuant to l8 C,F.R. S 292.207(b), or
(21 a petitlon for declaratory order grantlng walver pursuant to '18 C,F,R. 55 292-?OA(aX3l and/or 292.205(c).
The cunent fees for appllcationr for Commlsrlon certifications and pethlons for declaratory order can bc found by vlrlting the
Commlsslon's QF webslte at:&.EIG0!yI|QEand cllcklng the Fee Schedule llnk
You wlll be prompted to submit yout fillng {ee. if applicablg during the electronic filing procesr described on page 2.
Required Notice to Utilities and State Regulatory Authorities
Pursuant to l8 C.F.R S 292.207(aXll), you must provlde a copy of your self-certification or request for Commlssion certificelion
to the utilltles wlth whlch the faclllty wlll lnte.connect and/or tranract, ar well as to ths State regulatory authorltles of the
states ln whlch your faclllty and those utllltles reside. Llnks to lnformatlon about the regulatory authorltles ln varlour states
can be found by vlsltlng the Commlsslon's QF webslte at www.ficraoov/QE and cllcking the Notice fiequtrementr link.
What to Expect From the Commission After You File
An applicant liling a Form 556 elearonlcally will recelve an email message acknowledging receipt of the fillng and showing
the docket number aslgned to the fillng. Such emall lr typlcally *nt wlthln one buslness day, but may be delayed pending
confirmatlon by the Secre lary of the Commisrlon of the contents of the fillrq.
An appllcant submittlng a self-certilicatlon of QF stalur should cxpect to reteive no documents from the Commlrrlon, other
lhan the elertronlc acknowledgarn€nt of recelpt descdbed above. Conslsteat wlth lt5 name, a self-refilflcatton ls a
certlflcrtaon by lhe appllcant lrrerf that the frclllty meeB the relevant requlrernents for QF statur, and does not lnvolve a
determlnation by the Commlssion as to the statur of the facility. An acknowledgement of recelpt of a self'certlicatlon, ln
partlcular, does nol represBnt a determlnatlon by the Commisrion with regard to the QF rtatus of the faclllty. An applkant
self<ertifying may, however, recelve a reJectlon, revocatlon or deflclency letter lf tts appllcatlon ls found, dwlng perlodlc
compllance revlews, not to compty wlth the rclevant r€qulrcments.
An rppllcrnt submitting a request for Commlsslon certifkation wlll receive an order elther grantlng or denylng certlflcatlon of
QF statur, or a letter requertlng rdditional lnformatlon o. rejectlng the appllcatlon. PuEUant to '18 CF.R 5 292.207(b[3l, th€
Commi:slon must act on an application for Commlsslon certlficatlon withln 90 days oI the later of the filing date of the
Eppllcatlon or the flling date of a supplement amendment orother change to the appllcatlon.
Waiver Requests
l8 C.F.R. 5 292.20a(aX3) allows an appllcant to request a walvar lo modlry the method of calculatlon purruant to l8 C.f,R. 5
292.204(aX2) to determlne lf two facllltles are consldered to be located at the same site, for good cause. 18 C,F.R. I 292.205(c)
allows an appllcant to requelt waiver of th€ r€qulrements of 18 CF.R. 55 291.205(a) and (b) for operating and efliclency upon
a rhowlng that the frcillty wlll produce slgnlflcant energy savlngr. A reque:t for walver of there requlrements must be
submltted ai a pelltion for declaratory ordet, wlth the approprlate flllng fee for a petltlon for declaratory order. Appllcantr
requertlng Commlsslon recertlflcatlon a! part o, a request for walver of one of there rcqulrements should electronlcally
,ubmlt thelr completed Fom 556 along wlth thelr petltlon for declaratory order, rather than tillng thelr Form 556 as r
teparatc reguest for Comrnlsslon re ccrtlfication. Only the filing fee for the petitlon for de cloratory order must be pald to
cover both lhe walver request and the request for rece(ificatlo n lf such rcquutc are made dmultaneourly,
18 C.F,R. 5 292.203{dX2) allows an appllcant to request a walver of the Form 556 llllng requlrements, for good cause.
Appllcantr ffllng a petltlon for declaratory order requestlng a walver under'18 CF,B. S 292^203(dX2! do not need to complete
or rubmlt a Form 556 w{th their petitlon.
Case 1:l-B-cv-00236-REB Document 4-9 Filed 06/25118 Page 4 of 20
FEBC Form 555 Page 4 - lnstructlonr
Geograph ic Coordinates
lf a sreet addresr does not exist for your fac{ity, then llne 3c of the Form 556 requires you to report your faclllly's geographlc
coordlnates (latitude and longltude). Geographlc coordlnater may be obtalned from several dllferent sources. You qan lind
llnkr to onllne servkes that show latltude and longltude coordinates on onllne maps by vlsltlng the Commlsrlon's QF
webpage at www.ferc.govlol and cllcklng the Geographlc Coordlnates llnk You may also be able to obtaln your geographic
coordlnates lrom a GPS devlce, Google Earth (available free at ht]ol//errth,gooole.com], a property surey, varlous
englneerlng or constructlon drawlngt a property deed, or a munlclpal or county rnap showlng property llnes.
Filing Privileged Data or Critical Energy lnfrastructure lnformation in a Form 556
The Commlsslon's regulatlonr provlde procedures for appllcants to either (1) request thnt any lnformatlon submltted wlth a
Form 556 be glven privileged treatment because the lnformatlon ls exempt lrom the mandatory publlc disclosure
Iequlrements of the Freedom of lnformation Act, 5.U.5.C, 5 55?, and should be wlthheld from public disclosure; or (2I ldentlfy
ary documents contalnlng critical energy inka:tructure lnformatlon (CEll) as deflned ln 18 C.F.R. 5 388.113 that should not be
made publlc.
lf you are seeklng prlvlleged treatmcnt or CEli rtatur for any data in your Form 556, then you must follow the procedurer ln 18
C.F.R. S 388.1 12. See uouw.fslc{ov1helo1fi*m$ulde/lle-<ell-rsp. for more information.
Among other things (see l8 C.F.R. 5 38E.1 l2 lor other requlrements), appllcants secklng privileged treatment or CEll status for
data rubmltted in a Form 556 must prepare and file both (l) a complele version of the Form 556 (contalnlng the prlvlleged
and/or CEtl data), and (2I a public version of the Form 556 (wlth the privlleged and/or CEll data redrctedl. Applicantt
preparlng and flllng ther dlfferent verstons of thelr Form 555 must lndicate below the securlty deslgnation of this verslon of
thelr document. lf you are nol se€klng prlvileged treatment or CEll status for any of your Fonn 556 data. then you ghould not
respond to any ofthe ll€ms on thk page.
Non'Publlq Appllcant ls seellng prlvlleged treatment and/or Cfll status for data contaiaed ln the Form 556 llnes
I lndlcated belou Thb non-publlc verslon of the appltcant's Form 556 contalns all data, lncludlng the data that is redacted
ln $e (sepante) publlc verslon of the apphcanfs Form 556.
Puhllc {rcdacted): Appllcant ls reeklng privlhged treatment and/or Ctll rtatus for data conlalned in the Form 556 llnes
I tndicated below, This public verslon of the applicanls's Form 556 contalns all dala q;gegl for data from the liner
indkated below. whlch has been redacted.
Prlvfieged: lndlcate below whlch liner of your form contaln data for which you are reeklng prlvlleged treatmenl
Crldcal Encrgy lnfrutru(tur€ lnformadon lCEllli lndacate below whlch line: of your form contain data for which you are
seeklng CEll status
The eFlllng proceis described on page 2 will allow you to identify which verrionr of the etectronlc documentr you submit rre
publlc, privileged and/or CHl. Ihe lilenamer for s;ch documents should begln with "Public', 'Priv', or 'CEll', as apfllcable, to
clearlylndicatethasecurltyderlgnatlonolthefile. Eothverslonsof theform556shouldbeunalteredPDFcoplesoftheForm
556, as avallable for download from UaJ'+rr..ffr+{pviq[. To redact data from the publlc copy of the submittal simply omlt the
relevant data from the f orm. For numerical lields, leave the redacted flelds blank. For text flelds, complete as much of the
field as posslble, and replase the redacted portlonJ of the field w'th the word 'R€DACTEO' ln brackets, 8e sure to ldentlfy
above Al! fleds whlch contaln data for whlch you are seeklng non-publlc status.
The Commlsion ls not responsible for detecting or correctlng lller errort lncluding thore errors related to secudty
deslgnation. lf your documents contaln sensltlve informatloo make sure they are flled uslng the proper securlty derignation.
Case 1:18-cv-00236-REB Document 4-9 Filed 06/25118 Page 5 of 20
FEDERALENERGYREGULATORYCOMMISSION oMBconrrorr teo2.0o7s
WASHINGTON, DC &plntlon 06r30/20te
Fo rm 5 5 6 t:#Xs:::::H1l?:i#;::l-f" S'[atus fora sma* Power
o
o
a
o
a
o
la full nameofapplicant(legal entltyonwhorebehalfquallfylngfacllltystaturls$ughtforthlrfaclllty)
FranklLn Energy Storaga Two, LLC
I b Appllcant slreet address
515 N. Z?th StreeL
rc Chy
Bolse
ld State/provlnce
If)
le Postalcode
83?02
! f Country (lf not United States)1g Telephone number
(2001 938-7901
I h Has the Instanl faclllty ever prevlously been certified as a QF? Yes rf, No I -
ll lfyes,provldethrdocketnumberofthelastknownQFfillngpertalnlngtothlsfacllitp QFtz - SBA - 000
ll Under which certlflcatlon procesr ls the appllcant maklng thls llllng?
'o' Notlce o[ relf-cerliflcatlon .- Appllcatlon for Commlsslon cerdllcation irequlres lillng6 (see note belowl u fee; see 'Flllng Fee'sectlon on prge 3)
Note: a notke of relf-certlflcatlon ls a notice by the appllcant ltelf that its faclllty compller wlth the requkernents for
QF rtatus. A notlce of relf<ertlflcatlon doer not ertabllsh a proceedlng, and the Commlsrlon do*s not revlew a
notlce of lelftertlflcallon to vetlff compllance. See the 'What to Expecl Frorn the Comrnlsrlon After You Flle'
scctlon on page 3 for more lnformatlon.
1k Wh.t typ€(sl of QF strtus ls the appllcant seeklng for its faclllty? (check rll th:t apply)
rX Qua[rying small power productlon facllity status I Qualifying rogene(atlon faclllty status
1l What ls the purpote and expecttd effective date{s} of thlr Rllng?
i- | Orlglnal certlficatlon; faclllty experted to be lnstalled by and to begin opetrtion on
1- | Change(rlto a prevlourly certllled faclllty to be effectlve on
(identlfi type(s) of change(s) below, and descrlbe change{s) ln the Mlsceltaneous sectlon startlng on page 'l9l
;-l Name change and/or other adminislrative change(s1
' ; Change ln ownershlp
1 , Change{r} affecling plant equlprnenl, fuel ure, power productlon capadty andlor cogeneratlon therrnal output
$ Supplementorcorrectlon to r prevlursfiling submltted on t/26/ L1
(desolbe lhe rupplemcnt orcotrectlon ln the Mlscetlancous sectlon startlng on page l9)
co
({,
E
o
s
C
.9
G
.U
E.o.
lm lfanyofthefollowlngthreeetatementtirtrue,checkthebox(es! thatdescrlbeyoursltuatlonandcornpletethe
to the extent posslble, explalnlng any special circumJtancer ln the Mlscellaneou: section ttartlng on page 19.
n The lnrtant faclllty compller with the Commlsrlon's QF requlrement, by virtue of r walver of certaln reguhtlonlu prevlourly granled by the Commlsrion In an order dated (specff any other relevant waiver
orderr ln the Mircellaneous sertion startlng on page l9)
,- TheinstantfacilltywouldcomplywlththeCornmlssion'rQFrequlrementslfapetltlonforwaiverrubmlttedU concurrently wtth thls appllcation ls granted
fhe lnrtrnt facility compliet wlth th€ Commlsslon's regulotionr, but has special circumltances, :uch ar the
fl employment of unlque or lnnovatlve technologle: not contemplated by the rlructure of thls form, thit makc
the demonrtratlon of compllance vla lhls form dlfflcult or lmposslble (dercrlbe ln Misc. 5ectlon 5tarting on p. l9)
Case 1:L8-cv-00236-REB Document 4-9 Filed 06/25118 Page 6 of 20
FERC Forrn 556 6 - All Facllltles
o
a
o
o
o
o
2a Name of <ontact person
PeLer Richardson
Telephone number
t208) 930-?901
2< Whlch of the followlng descrlbes the contact personS relatbnshlp to the appkant? (check one)
fJ Applicant {self) [ Employeq owner or pirtner of appllcant authorlred to reprer€nt the rpplkant
I Employee ol a company afllllated wlth the appllcant authorlzed to repres€nt th€ appllcant on thls matter
[t Lawyer, conlultant, or other representatlve authorlzed to rsprer€nt the appllcant on thls nuttet
2d Company or organlzatlon name 0f rppllcant is an lndivldual check here and sklp to llne 2e] il
Eranklin Energy SLorage Tro, LLC
le Slrert addre ss (,f same rs Alrpl:cant. rhetk hlre ar:ci rk p to l,r'e 3a)ffi
Zg 5ta(r/pror,,1:e2f ( rty
c
.9
(o
E
or{-C
UItr+.coU
2i Ct:rrnlry 1i[not t]nited tt;ter]2h Po{tdl rode
ta Faclllty name
Eranklin Enq!gy Sturag* "l'wr
!b Stre€taddresr(ifa:treotlddres!doerrlr)lp)rr\llorth*(ac,lrly,clteckhereonrlskiptohne3c)fi1
3c Geographlccoordlnates: lfyoulndlcatedthatnostreetaddressexistsforyourfacllityby$ecklngtheboxlnllne3b,
then you must speclft the latltude and longltude coordlnates of the facllily ln d€grees (to three declmal placer). Use
the followlng formula to convert to declmal degrees Irom degrees, mlnutes and secondsl declmal degreer =
degrees + {rnlnutes/50} + (seconds/3600). See lhe 'Geographlc Coordlnates'section on page { for help, ll you
provlded a rtreet address for your faclllty ln llnc 3b, then rpeclfylng the geographlc coordlnate: below ls optlonal.
n East (+)
Lonsltude fi *Iriti l1'l ' 604 deerees Latitude EfII[' 42'.1e1 degre€r
3d Clty (lf unincorporaled. check hete and enter neare* clty) [l
Jackpot Nevada
5tatelprovlnce
39 Country iif not United Stater)
C,o
(EIJo
p
C.!
o
IE
L.,
.Eco,g
E
U(,lJ-3, County (or check here for lndependent clty)
Twln Fai ls
ldentlft the eleckls utllltler that are contemplated to transact wlth the frcility.
4a ldentlfy utlllty interconnectlng wtth the laclllty
Idaho Power Company
4b tlerrtiiy uti,rtiL'5 prnvidrr'r; lviteell,t4 lervtic ot.h{(k irer* ,l tttu'* E
4c ldenllfy utllltles purchaslng the urefuf ele{trlc power oulput or check here lf none
Idaho Power conpany
u!o
3
Olc
U(EutC.It
F 4d khillily utilities proviCirrq suplrlt:rnenl.ry []uvJrr. trarkup pourer, mnir]tflrrnce powi'1, :]ildlor inlr.r rrupl b[! pnr,vrr
scrvl(t: (), rh*rx lti.lt rf trnrte E
Case 1:18-cv-00236-REB Document 4-9 Filed 06/25118 Page 7 of 2Q
FIRC form 556 PageT-All rEciliti€,
s. Dir€ct ownership ar of effectlve date or opention date; ldentlfu all dlrect ownerc of the facility holding at least l0
per(ent equlty lntercsL For each ldenlifled owner, alro (Il lndlcate whether that owner is an electrlc utllity, as
detined ln sectlon 3(22) of the Federal Power Act {16 U.5.C. 796(22}}, or a holding company, as deflned ln sertlon
I 262(8) of the Public Utllity Holdlng Company Act of 2005 (42 U.s.C. 1645 t (8)), and (2) for owners which are electrlc
utllltles or holdlng companles, provide the percentage of equlty lnterert ln lhe tacility held by that owner. lf no
dlrect owners hold at least I0 percent equlty lnleresl ln the faclllty, then provlde the required lnformatlon for the
two dlrect ownen with the largest equlty lnterest ln the facllity.
Electrlc utl[ry or lf Yes,holdlng % equity
company _tntereg_
Yer[ No fit .-t
YerfJ Nofl _,.
Yes [-l No [-lU
Yes[ No fl .....-r
Yer[ No fl *-'
Yes[ No [ _,-*r
Yesfl No D __t'
Yes[ No [ _i
Yer[ No [ _'r
Yes [-l No l-]
I Check here and contlnue ln the Mlrcelhneour rectlon startlng on page l9 lf addltlonal rpace Is needed
f ullleqal names of direct owners
l) Mul I en InvqsLrncnt s, l.[,!'
2)
t)
4'
5)
6l
7'l
8)
e)
l0l
5b Upstream (1.e., lndlrect) ownershlp as of cffective date or operalion date: ldentify all upslrearn (ie- Indirectl ownerr
of the facility that both { I ) hold at least I 0 percent equlty lnterest ln lhe faclllty, and (2} are electric utllitles, ar
defined ln rection 3(22) of the federal Power Act (I6 U.S.C.796(22),, or holding companies, ar delined ln sectlon
'l 262(8) of the Publk Utllity Holdlrg Company Act of 2005 (42 U.s.C. I 6451(8)). Also provlde the percenttge of
equlty lnterest ln the faclllty held by such ownerr. {Note that, because upslream own€r5 may be rubsldlarles of one
another, total percent equlty lnterest reported may exceed I 00 percent.)
Check here lf no such upslream owners erlst. fi
Fulllegal namer of electric otllity or holding company upttreary ounert
t)
2t
3t
4t
s)
6)
7t
8'
e)
l0)
' Check here and contlnue ln the Mlscellanaour s€ction starting on page l9 lf addltlonal space b needed
96 equlty
lnlercrt
c
.9
.g
Uo-o!C|!
o-Eyl
oc3o
5( ldentlry the facility operrtor
Frankl.in Ene r"gy Storage 'l w$, L:(
a
Case 1:18-cv-00236-REB Document 4-9 Filed 06/25118 Page 8 of 20
FtiC Form 556 Page 8 - AllFacltitles
6a Oescribe the prlmary energy lnput (check one maln category and, if applkable, one rubcategory)
I Slomass (speclfy) ffl Renewable resourcer (spedff]
! tandfill gas fl Hydropower-river
fl Manure dlgarter 9as I Hydro power- tldal
p Munlclprlsolldwaste I Hydropower-wave
[ Sewagedlgestergas fl Solar-photovoltalc
fl Wood [ Solar-thermol
I Other biomars (describe on page 19) [ Wlnd
I waste{rpecifirypebelowintine6b) I ?fffi:::f#:1'rT"'
[ Geothermal
fl Foxllfuel (rpecify)
I Coel{notwaste}
I Fueloll/dtesel
fl Natural gar (not w.ste)
- Otherfossll fuelU (descrtbe on page l9l
I Other ldescrlbe on page t9)
lf you rpeclfled 'wa$e' lg the p{rnary energy lnput ln llne 6a lndlcrte the type ol waste fuEl used: (check one}
I Waste fuel listcd In l8 C.F.R. S 292.]02{b) tspecify one of the followingl
E Anthracite culm produced prlor to Juty 23. 1985
n Anthraclterefusethlthasanaverageheatcontentof6000BtuorlessperpoundandharanaverageLr ashcontentof45 p€tcentor mo,e
,- Bltuminour coal refuse that har an avenge heat content of 9,500 Btu per pound or lers and has anu average ash content of 25 percent or more
Top or bottom subbltumlnous coal produced on lederal Isndr or on lndian hnds thrt has been
,- determlned to be waste by the Unlted Stat$ Dcpartrne nt of the lnterlor's Bureau of [and Manrgeme ntu (Bt-tr,'t) or that ls located on non-Federalor non-lndlan lands outside of B[Mllurbdiction, provlded that
the applicant shows that the latter coal is an extenrlon ofthat determined by 8LM to be waste
Coal refuse produced on Fedenl lands or on lndlan lands that has been determlned to be waste by the
O BLM or that lr located on non- Federal or non-lndlan landr outside of BtM'sJurlrdlction, provlded that
applicant showr that the latter ll an extension of lhat determlned by 8LM to be waste
- Ugnlte produced ln associatlon wlth the productlon of montan wax and llgnlte that becorne* erposedI'J as a rerutt of ruch a mining operation
I Gaseous fuelr (except notural gas rrd synthetic Aal fiom coal] (descrlbe on page I 9]
Walle naturalgas fiom gas or oil wells (descrlbe on pasre '19 how the ga: meetr the requirements of l8
E C.F.n. I 2.400 for waste natural gar; lnclude wlth your flllng any materiak necetsary to demonttrate
cornpliance wlth '18 C.FA. I 2.400)
I Matarlalithatagovemm€ntagencyhascertlliedfordlrposal bycombustion{descrlbeonpage'l9l
E Heat fiorn exotherrnlc reactlons (dercriba on page t9l [ flesldual heat {describe on page l9}
I U*edrubbertlrer I Plastlcmaterlalr [ ftefineryoffgas f] Petroleumcoke
Other warte enwgy lnput that has llttle or no commerclal value and existr in the abrente ol the quallfylng
f] faclllty lndustry (descilbe ln the Mlscellaneour sectlon startlng on page I 9; lnclude a dlscussion of the fuel's
lack of commerclal value and exlstence in the absente of the quallfflng faclllty indurtry)
ga5 0 8tu/h {t jla
0 Btu/h f,96
i%8tu/h
o-qxtrIlL-(U
t-l,J
6c Provide the aversge energy Input, catculated on a calendar year ba:is, ln terms of Btu/h for the followlng fossll fuel
energy inputr, and provide the related percentage of the total average annual energy input lo the facility (18 (.F.ff. $
292.202(i)). For any oil or nrtoral ges fuel, use lower heating value (18 C.F.g. 6 792.202(m)),
Annual average energy Percentage oftotal
Fuel Ior fuel annual
6b
Case 1:18-cv-00236-REB Document 4-9 Filed 06/25118 Page 9 of 20
FERC Form 556 Page9-All Facilltl€t
q
lndicate the max:mum gross and maxlmum net clectric power production capaclty olthe facility at the point(s) oI
dellvery by cornpletlng the workheet below. Respond to all lterns. lf any of the pansltlc loads and/or loses ldentllled
lln€s 7b through 7e rre negllglble, enterzero for those llnes.
7a the maxlmum gross power productlon capacity at the lermlnals of the lndlvldualgenerator(:)
under the mort favprable antlclpated deslgn condltlons 'r?
Parasltlc siatlon power used at the faclllty to run equlpment \ryhlch ll necesrary and lntegral to
the power ptoductlon process {bolter feed pumpr, fans/blowers, offlce or malntenancc bulldlngr
dlrectly related to the opentlon of the power generatlng faclllty, etc.). lf this facllity lncludes non-
power productlon procesres (For lnrtance, pow€r consumed by r cogeneratlon faclllty's thermal
hort) , do not lnclude any power consumed by the non"power poductlon actlvltier ln your
reported par.rltlc rtition power.l0 kw
7c Electrical lorses ln lnterconnectlon transformers
434 kw
tlectrical lorrer ln A(7DC tonverrlon equipment, lf any
e20 kw
7e Other lnterconnection losser ln power llnes or facllltles (othcr than tranrformers and AODC
equipment) between the termlnalr of the generator(r) and the point of lnterconnectlon
with the 5 636 kw
7f Total deductlons fiom grosi power productlon capaclly = 7b + 7c + 7d + 7e
kt!
ikw79 Maxlrnum net power productlon capacity -Va-7f
co
|1,
E
o
;2
IJa,TLi;.gC-ctJUF
7h Descrlptlon of faclllty and prlmary componentr: Descrlbe the faclllty ard ll5 operatlon. ldentlfy all bollers, heat
recovery steam generatort prlme moverc (any mechanical equipment drlvlng an electrlc Aenerator), electrlcal
generatorr, photovoltaic :olar equlpment. fuel cell equlpment and/or other prlmary powe, generation equlpment
used ln rhe facility. Dercrlptlons of components rhould include (as applicable) specifications of the nomlnal
capacities for mechanlcal output. electrlcaloutput, or steam generatlon of lhe Hentlfled equiprnenl. For each plece
of equlpment ldentlfled, clearly lndlcate how many plecer of that type of equiprnent are lncluded in the plant. and
whlch component5 are normally operatlng or normally ln standby mode" Provlde a descriptlon of how the
componeflts operatr as a system. Applicants for cogeneration farllllles do not need to dercribe operatlons of
systems that are clearly dep cted on and earily understandable fiom a cogeneratlon facility's attached masr nnd
heat balance da.gram; however, such appllcants ilrould provlde any necessary dercrlption needed to understand
the sequentlal op$atlon of the faclllty deplcted ln lheir mas: and heat balrnce dlagram. lf addltlonal space ls
needed, contlnue ln the Mlscelianeous sectlon ilarling on page 19.
t'he projecr consistg of an energy sLorage sysLem Qualifying Facility provldlng
scheduled alrd dispatchable electriclly ln Iorxarc!-looktng fime blocks. The
enerEy sLordge sysrem rhat crmprises Lhe energy sloragc Quallfying Faclllty ts
designeci Lo, alrd will, racelvo l00t of iLs enerEy input from a comblnation of
renewatrle energy sources sush a* rLnd, solar, l:iogas, biornas, etc. Tltc currenl:
irrit iaI deslgn ut ilire,s solar pholovolta!c (t,Vl modulcs mounLed to si.ngle-axi.5
i:rackers 1:o provide che elecc.sic energy inpuL to che Qualtfylng Facillty's
batEery storage sysiem. fhe PV modulcs are planned Lo be connecr-ed in serj.es/
paral lel colsbinalions Eo solar invcrters, raLed approxlmately 2.5 l"lWac each,
(suLrjucu Lo change), Tho proposad elec!.rlc energy scorage Quallfying Facility
will consist of an elcctro-chemical haf.Lery and wj"ll have a maximunr pow€r outpuc
capacity of 25 Mllac for a sr.staj.n*d time per.tod oll 5 - 60 nlnutes. The Facility
r+i1,1 conslsL of an altornatlng currerll tAC) Lo di!e{":h. cu!:rent (DC) control
$ysLem. 'fho Qual rfyi.ng Fa*ilify rlll he rrt ilize<J Lo provlde Lha purchasing
utltlfy Hith pre-schecluled antl dispatrhable AC €nerEy wlthln pre-det€rmlned tIttreblocks. The sole sorrrre or e1€cLric power and enerqy provided to Lhe purchasing
utility wllL be Lhe electro-chernical rcacElon giving riso to the cjischrrge og
elect.ric power and energy by the battFry. [n rur:n, the,sole direct source of
energy Lnpuf, provided t.o che baltery FacilrLy r+iii be, as described.rbove,
renerrable gourccs,
,b
Case 1:18-cv-00236-REB Document 4-9 Filed 06i25/18 Page 10 of 20
FERC Form 556 Page 10 Small Power Producllon
Puriuant to I8 C.F.R. 5 292.204(a), the power productlon capaclty of any small power productlon faclllty, together
wlth the power productlon tapaclty of any other small power production facllities that use the r.me enerEy
rerource, are owned by the rame person(s) or lts alfiliates, and are located at the reme slte, mry not exceed 80
mega[/atti. To demonstrate rompliante wlth this sizc llmltatlon, or to dcmonstrrte that your fa.ility is exempt
from this size limilation under lhe Solar, Wind, Waste, and Geqlhermal Power Production lncentlvel Act of 1990
(Pub. L. 1 0l-575, 104 Stat.2834 (1990) ar rmended by Pub.l.102-46, '105 Stat, 249 (199I)), respond to liner 8a
through 8e below (as rpplicable).
8a ldentis any facilitles wlth electrlral generating equlpment located withln I mlle of the elxtrlcal generatlng
equlpment oFthe lnrtant facllity, and for which any of ths enlltles ldentifled in lines 5a or 5b, or their afliliates, holds
al least a 5 percent equity lnterett.
Check here lf no ruch faclllties erlrt. ffi
QF-kw
Qr-kw
i Check here and contlnue ln the Miscellaneour rectlon rtartlng on page 19 lf addilbnal rpace is needed
Commonowne(s)
QF
(city or county, ttate)
Facllity locatlon Root docket I
(ifany)
Maxlmum nrt pow€r
productlon capaclty
KWr)
2)
3)
8b The Solar, Wod, Waste, and Geothermal Power Productlon lncentlver Act of l99o (lncenttves Act) provlder
eremption fiom the size limitatlons in 18 C.F.R.5 292.20ata) for ccrtaln f.cllitles that wele certllied prior to 1995.
Are you seeklng exemptlon from the size llmltations ln l8 C.F.R. 5 292.204(a) by virtue o[the lncenthes Act?
I Yer (contlnue at line 8c below) EI No (stlp llnes 8c through 8e]
8r Wastheorlginal noticeofself-certlricatlonorapplcationforCommlssloncertlricatlonotthefactlltyllledonor
before December 3'1, 1994? Yer No
Sd Did construdlon of the faclllty commence on or before December 31, 1999? Yes I I No i
oUc(U2
a.oC{-L(Oo.=Utr\a- .=OJc(uO.NE(^(o.9t
E'=oU
8a lf you answered No ln llne 8d. lndlcEte whether reasonable dlllgence war excrclsed toward the completion of
the faclllly, trklng lnto account all lactors relevant to constructionl Ye: I I No I i lf you answered Yes, provide
a brlef narrative explanation in lhe Miscellaneoui iectlon rtartlng on page 19 of the conttructlon tlmeline (ln
partlcular. des(rlbe why conrlructlon started so long after the faclllty wal certlfled) and the dlllgcnce exerrlsed
toward completlon of lhe faclllty.
Pursuant to l8 C.F.R. 5 292.204(b), qualillng smrll power production hcllttler may use fossll fuels, ln minimal
amountJ. for only the following purpoeet: lgn;tion; start-up; tcstlng; flame stablliaatlon; contrd ure; allevlatlon or
preventlon sf unnntlclpated equlpment outages; and allevlation or preventlon of emergencles, directly afferting
thepublichealth,safety,orwelfare,whichwouldresultfiomelectrlcpoweroutag€r. Theamountoffossll fuek
used for these purposer may not exceed 25 percent ofthe lotal energy anput ofthe facllity durlng the lZ-month
perlod beglnnlng wllh the dale the faclllty flrst producer electrlc energy or any calendar year thereafter.
9a Certllication o{ compllance wlth I8 C.F,R, 5 292-204(b} wlth respect to uses of fossll [uel;
8 ApCicar,t certlfhs that the faclllty will uce fossll fuels excluslvely lor the purpores lirted above.
a,13tJ?hE
o-u
o*UU
:E.9 :)
rEUUf{& l.l-E-co.=u3
9b Certifl(atbn of compllance wlth 18 C.F,R. 5 292.204(b) with resp€ct to emount of fossil fuel used annually;
Applicant certifier that the amounl of fo::il fuel used at the faclllty wlll not, ln aggtegate, exceed 25
ffl percent of the total energy lnput of the tacility durlng the I2-month period beglnnirq with the date the
facilrty lirst producer electrlc en€rgy or eay calendar yeal lhereafter.
lnforrnation Required for Small Power Production Facility
lf you indicated ln line I k that you are seeklng quallfylng small power production facility statur for your faclllty, then you
must to the ltemr on lhl5 Otherwlse,r0.
w
g
Case 1:18-cv-00236-REB Document 4-9 Filed 06/25118 Page LL ol20
FERC Fonn 556 Page I I - Cogeneratlon Facllltles
Puruant to l8 C.F.R. 5 292.202(c), . cogeneratlon faclllty produces electrlc energy and forms of useful thermal
energy {such rs heat or sleami ured for lndustrlal. commerclal, hertlng, or cooling purpoler. through the sequential
use of cnergy. Pursuant to I8 C.F.R.5 292.202(s), 'requentlal ure* of energy meanr the followlng: ('l)for a topplng-
cycle cogeneratlon faclllty, the use of refect heat frorn a power productlon process ln sufllclent amounts ln a
thermal application or prcce55 to conrorm to the requlremenls of thc ope ratlng slandard contalned ln l8 C.f.R. g
292-205(a); or (2| for a boltoming-cycle cogeneratlon facility, the use of at least some reject heat from a thermal
appllcation or proce5s for power productlon.
t0e What type(slof cogeneratlon lechnology does the facility represent? (check all that apply)
i I Topping"cycle cogeneratlon i : 0oltomlng-cycle cogeneratlon
Eo
IEo5
uy(,'P,qE\-, O
Gt -?
a)c
a)u
t 0b To help demonrlrate the sequentlal operatlon of the cogeneratlon proc€'' and to rupport compliance with
other requlrements such as lhe operatlng and efflclency standardr, lnclude wlth your lllrrg a mars and heat
brlance diagram depicting avenge annuat operatlng condltlonr. Thls dlagram must lnclude certaln llems and
meet certaln requlremerts, as dercrlbed below. You must check next to the descrlption ol each requlremenl
below to certlf that you have complled wlth these requlrementr.
Check to cefilfy
compllance wlth
lndlrated requlrement Requlrernent
Dlagram must rhow orlentation withln 5y5tem plplng and/or ductr of all prlme movcrs,
heat recovery steam generatorg bollers, electrlc generators, and condensers (as
appllcable), ar well as any other primary equlprnent relevant to the cogeneratlon
proc€ss.
Anyoverageannual voluesrequlredtobcrcportedlnllnerlOb. l2a, l3a, I3b, 13d, l3t,
l4a, I 5b, 1 5d andlor ! 5f must be computed over the anticipated hours of operation.
Dlagrarn must speclry dl fuel lnputs by fue! type and average annual tate In 8tu/h. Fue!
for rupplementary llrlng rhould be specilled reparately and clearly labeled. All
speciflcatlons of fuel lnputs rhould ure lower heatlng valuer.
Dlagram must speclfy averagr gror electrlc output in kW or MW for eath generalol
Diagram murt rpecify average mechanical output (that is, any mechanlcal energy taken
off of the shaft of the prlme movers for purpores not dlrectly related to electrlc power
generatlon) ln horuepower, lf any. Typlcally, a cogeneratlon facility har no mechanlcal
outpul.
At each point for which working f,uid flowconditionr are requlred to be speclffed {see
below). such frow condltlon data must lnclude mass llow rate (ln lb/h or kgls),
temperature (ln "F, R, 'C or K). rbsolute presrure (ln p3la or kPa) and enthalpy (ln 8tu/lb
ot U/tg), Exteptlon: For systems where the worklng fluid ls llquidonly (no vapor at any
polnt in the cych) and where the type of liquld and speclflc heat of th.t llquld are clearly
lndlcated on the dlagram or ln the Mlscellaneous sectlon slartlng on page 19, only mass
flow rate and temperalure (not presrure .nd enthalpy) need be speclfled. For reference,
spedflc heat at rtandrrd condltlonl for pure llquld water ls rpproxlrnately 1.002 8tu/
(lbtg or 4.195 U/{lg'K).
Dlagrim must rpeclfy worklng fluld flow condltlons al lnput to and output from each
steam turbine or other erpansion turbine or back-pressure turblne.
Dlaqram must :pecify worklng fluld flow conditlont al dellvery to and return from each
thermal appllcatlon.
Dtagram must spcclfy worklng fluld llow conditlons at make-up water inputs.
I nform ation Req u ired for Cog en erati on Facil ity
lf you lndicated ln line I k that you are seeklng qualifylng cogen€ratlon facllhy status for your facllity, then you must respond
to the ltems on 1l 13. Otherwlse,'ll 13,
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Case L:l-8-cv-00236-REB Document 4-9 Filed 06/25118 Page 12 ol20
fERC Form 556 Page t 2 - Cogeneratlon Faclllties
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FPAct 200t cogener.tlon facllltles: fhe Fnergy Policy Act of 2005 {FPAct 2005) cstablidred a new section 210(n) of
the Publi< Utllity Regulatory Pollcler Act of t978 (PURPA), l6 U5C 824a-3(n), wlth additional requlrementl for any
quallfflng cogeneratlon faclllty that (l] ls seeklng to :ell electrlc energy pursuant to ssctlon 210 of PURPA and {2)
wai elther not a Gogenerctlon faclllty on August 8, 2005, or had not llled a self-certlflcallon or applicatlon for
Commlsslon canilkation of QF ttatus on or before Febtuary l, 2006, These requlrements were lmplemented by the
Commlsrlon ln I8 C.F.R. 5 292.205(dl, Complete the llnes below, carefully followlng the lnstructlons, to demonstrate
whether lhese addltlonal requlrement! apply to your cogeneration faclllty and, lf ro. whether your faclllty compller
with such requlrements.
I I a Was your facllity operatlng a: a qualiling cogeneratlon facility on or before August 8. 20051 Yes i I No, l
llb Wasthelnitlalflllngseeklngcertlflcationofyourfacllity($rhetheranotlceofself-certillcatlonoranappllcatlon
for Commlsslon certlficatlon) filed on or before February l, 2006? Yes No
lftheanswertoeitherllnellaorrlbasYer,thencontlnuoatllnellcbelow. Othenrvlse, lf thcanrwerstobothllnes
I la and ! tb are No, sklpto llne llebelow.
I lc With rerpect to thc deslgn and operatlon oFthe hcility, have anychanges been lmplemented on or after
February 2,2006 that affect general plant operatlon, affect use ofthennal output, end/or lncrease net power
productlon capaclty from thc planl'rcapaclty on february l, 2006i
'l Yes (continue at llne I ld below)
No. Your facllity ls not subject to the requlrernents of l8 C.F.R. I 292.205(d) at thls tlrne. However, it may be
I rubject to to these reqtrirementr ln the future lf changes are made to the faclllty. At such tlme, the appllcant
would nerd to recertlty the faclllty to determlne ellglblllty. Skip lines I I d through I 'lJ.
t td Does the appllcant (ontend that the changer ldentlfled ln llne I 1c are not :o rlgnilicant as to make the faclllty
a 'new' cogeneration faclllty that would be subJect to the l8 C-F.fi. I 292.205(d) coEene ration requirementr?
Yes. Provlde ln the Mlscellaneous sectlon rl.rtlng on page 19 a descdptlon of any relevant changes made to
I the facility (lncludlng the purposc of the changes) and a dlscutdon of why the faclllty rhould not be
consldered a 'new' cogeneratlon facllity ln llght of these changes. Skip liner I le through I lf.
No. Appllcant stlpulates lo the fact that it i5 a "new' cogensratlon facility (ror putpotes of datermlnlng the
r applicability of the requlrements of '18 C.F.R. 5 292.205(d)l by vlrtue of modllications to the faciltty that were
lnltiated on or after FEbtuary 2,7006. Contlnue below at llne l1e.
11e Wil! electrlr energy from the facllity be sold putsuant to sectlon 2'10 of PURPA?
, , Yer The facltity ls an EPAct 2005 cogpn€ntion facllity. You murt d€mooStrate compliance wllh l8 C.F"R. 5
t zgr-zos(axzl by cootlnulng rt line I 1 f below.
No. Appllcant cerllfles that energy wlll nof be rold puruant to sedlon 210 of PURPA Applicant also certlfle:
Its understandlng that lt must re(ertlry iti facllity In order to determlne conrpllance wlth the requirementr of
18C.F.R.S292.205(d) &eforeselllngen€rgypurruanttosectlon2l0ofPURPAinth€Future, Shiplinerllf
through 1lJ.
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E=+tuc(oo l,,t.ECrqoT' 'i;CIE.?0,
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I lf ls the net power productlon capaclty of your cogeneration hclllty, as lndlcated ln llne 79 above, lerr than or
lo 5,{X}0 kWl
Yes, the net powcr production capaclty ii lesr than or equal to 5,000 kW. 18 C.F.R. 5 292.205(dX4) provldes a
rebuttable presumptlon that (ogeneratlon facllltles of 5,000 kW and smaller capacity comply with the
reqdrements for fundamental ure ol the facilary's energy output h 18 C.F.R. 5 292.205(d)(2). Applicant
certllles lts understanding thnt, rhould the power productlon capaclty ofthe facillty increase above 5.000
kW, lhen the facility must be recefilffed to (among other thlngs) demonltrtle complianre wlth t I C.F.R. 5
292.205{dX2). Sklp llner I lg through 1lJ.
No, the nat power productlon caprcity ls greater than 5,0ff1 kW. Demonrtrate compliance wlth the
requlrements for fundamental use of the facility's energy output in t8 C.F.R. 5 292.205(dXZ) by continulng on
the next page at line t I g.
Case 1-:18-cv-00236-REB Document 4-9 Filed 06/25118 Page 13 ot 20
FEffC Form 556 Page 'l 3 - Cogeneration Facllltles
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I Lines t t 9 through 1 I k below gulde the applicant through the proces: of demonrtrating (ompllance with the
I requlrements for'fundamental use'of the facllity's energy output. l8 C.F.R, 5 292:05(dX2). Only respond to the
llnes on thls page lf the lnslructlons on the prevlous page dlrecl you to do so. Otherwlse, sklp thls page.
l8 C.F.R. 5 292,205(d)(2) requirei that the electrlcal, thermal, chemlcal and mechanlcal output of an EPAct 2005
cogeneration facility lr used fundamentally for lndurtrlal, commerclal, resldentlal or lnrtltutlonal purposes and ls
not lntended fundamentally for sale lo an electrl( utillty, laklng lnto account technologlcal, efflclency, econornlc,
and varlable thermal encrgy requlrementg as well as state laws appllcable to sales of electrlc energy from a
quallfylng faclllty to lts hoit faclllty. lf you were d'rected on the prevlour page to re$ond to the lterns on thls page,
then your faclllty ir rn EPAct 2005 cogenerathn faclllty thal ls subJect to thlr'fundamtntal ur€' requlrem€nl
The Cornmission'r rcgulatlons provlde a lwo"pronged approach to demon3tratlng compllrnce wlth lhe
requlrements for fundamental use of the faclllty's energy output. Flrst, the Commlsrlsn har establi:hed in l8 C.F.fi.
lS ZfZ.zostOttl) a 'fundamental use tert'thrt can be used to demonstrate compliance wlth 18 C.F.R. g 292-205(dX2).
I Under the fundamental use teil, a faclllty ls conrldered to comply wlrh l8 C.F.B. S 292.205(d)(2) if at least 50 percent
I of the faclllty's total annual ene.gy outpul {lncludlng electrlcal, thermal chemlcal and mechanlcal energy outputl ls
lused for lndustrlaL comrnerclal resldentlal or Inrtltutlonal purpores.
Second, an appllcant for a faclltty that does not pas: the fundamental use t€st may provide a narrative expl.natlon
of and support for lts contentlon that the facllity nonethelesr meets the requlre ment that the electrlcal, thermal,
chemlcal and mechanicaloutput of an EPAcr 2005 cogene,atlon hclllty ls used fundamentally for lndustrlal
commerclal, resldential or lnslltutlonal purporer and is not intended fundamentally for sale to an electrlc utltlty,
taklng lnto account technologlcal, elliclency, economlc, and varlable thermal energy requlrements, as well ai state
laws applicable to sales of electric energy from a quali$ing faclllty to lts host focillty.
Complete lanes 1 I g through I'lJ below to determine compliance with the fundamental use test ln 18 C.F.R. I
292.2O5(dX3). Complete llnes I I g through | 1l even lf you do not lntend to rcly upon lhe fundonentdl ute tett ao
demansfiote compllonce with l8 C.F.fr. 5 292.205(d)(2),
t 1E Amount of electrlcal, thermal, chemlcal and mechanlcalenergy output (net of lnlernal
gereratlon plant losses and parasttlc loadsl expected lo be ured annually for lndustrlal,
commerclal. rerldentlal or lnrtitutlonal purposes and not lold to .n electrlc utlllty \t!v, r
'l1h Total amountofelectrlcal, lhermal,chemlcal andmechanlcal enetgyexpectedtobe
sold to an electrlc utlllty lllt Vh
Ili Percentageoftotalannualenergyoutputexpectedtobeuredforlnduitrlal,
commerclal, resldentirl or lnfiltutlonrl purpo es and not sold io r utlllty
-l00rllg/(ll9+llh)
1 lf ls the response ln line I I I greater than or equal to 50 percent?
Yes. Your faclllty complles wlth 18 C.F.R, 5 292.205(d[l) by vlrtue of parsing the fundamental use tert
provlded ln 18 C.F.R. 5 292.205(dX3), Appllcant certlfles lts understandlng that, lf lt ls to rely upon passlng
r i the fundamental use tert ar a barlr for complying with 18 C.F.R. 5 292.205(d,{2), then the faclllty must
comply wlth the fundamental use test both ln the l2-month pedod beglnnlng wlth the date the facillty flrrt
produces electrlc energy, and ln all rubrequent cal€ndnr yean.
No. Your lacillty dcer not pass the fundamental use tert. Instead, you murt provlde ln the Mlsrellaneour
rectlon ltartlng on page I 9 a narratlve explanation of and support for why your farlllty meetr the
requlrement that the elaclrical, thermal, chemlcal and mechanlcal output of an EPAct 2005 cogeneratlon
factlity ls used fundamentally for lndustrlal, commercial, residential or in*itutlonal purposes and is not
lntended fundamentatly for sale to an electrlc utillty, taklng lnto account technologlcal, efllclency, economi<,
and varlable thermal energy reguirements, ar well as state laws appllcable to sales of electrlc energy from a
QF to itr host facillty. Applicants provldlng a narratlve explanatlon of why thek faclllty should be found to
comply wlth 18 C.a.R. 5 292"205(dX2) ln spite of non-compllance wlth the fundamental use tert may want to
revlew paragraph: 47 through 6l of Order No. 671 (accerslble from the Commlsrion'r QF webslte at
www.ferc.gov/QF), whtch prov;de discusslon of the facB and circumstances that rnay support thelr
explanatlrcn" Appllcant should also note thal the per(€nt.ge reported above will estrblirh the standard that
that faclllty must cornply wlth, both for the lz-month perlod beglnnlng with thc date the faclllty llrst
produces elertrlc energy. and ln all rubsequent calendar years. See Order No. 671 at paragraph 5 l. As su<h,
the appllcant srould make rure that it reports appropriate values on llner I tg and I I h ibove to serve as the
rclevant annual standard, taklng lnto account expecled varhtlons ln productlon conditions.
q
Case 1:18-cv-00236-REB Document 4-9 Filed 06i25/18 Page 1,4 ot 20
FERC Form 556 Page l4 - Iopping-Cycle Cogeneratlon Facllltl€t
I nform ati on Req uired fo r Toppin g-Cycl e Cogen eration Fa cility
lfyou lndlcated ln flne 10a thal your facUity represents topplng<yck cogeneratlon technotrogy, then you nrust respond to
the lterns on 14 and 15. Otherwls€,14and 15.
athermal energy outputof a topplng-cycle cogeneratlon faclllty ls the net energy made avallable to an lndustrlal
or commerclal process or ured ln r heatlng or rooling appllcatlon. Punuant to 5ectlons 292.202{c}, (d) and (h) of the
€ommls:lon's regulationr (t8 C.F.R. Sg 292.2o21c1, (dl and (h)), the thermal energyoutput of a quallfylng topplng-
cycle cogeneratlon faclllty musl be useful. ln connectlon wilh this requlrement, descrlbe thc thermal output of the
topplng-cycle cogeneratlon facility by rerponding to lines I 2a and 12b below,
12a ldentifranddescrlbeeaththermalhost,andrperiftthernnualaveager.teofthermaloutputmadcavallable
to exh hort for each use. For hosts wlth multlple ures ol thermal output provlde the data for each ure ,nseparulercws' Avetage annual rate of
thermal output
attrabutrble to use (net of
Name of entity (thermal host) Thermal host's relatlon:hip to faclllty; heat contalned ln procers
taklng thermal output Thermal host'r us* of thermal output retum or mak*up wat€r)
t tirernritl h0sl s re!.rt tofll
r.t tlrernrol host r uie of thernral o ,l
llrerrn*l lrrxl s rr'fu(ioriihiJr to I.rcrlrt
).t
€(l tnelfir!i hort'i rJr* o[l]rerrrrtl oul iirrr,f'r
Irc t tlt*rrn;rl host'r rllalrorr 1o faoi
itrt llterrttal lrrr5i s rrJe ol llrernrll rt Btulli
.r1 t,rernlal hort's relationthlp {o fac,l4)
tf r*rrnal lr0st'* ure ul tlrrrrrral r-ru I 8tu/h
tr:*lrnll lr0tl'5 r..!i,rt o to laci\i
tlr*rrrlll lrojl'r tise ot tl;crtrtal ou ilL
ro f.rct liruln,rl hr:qt I rll*trr;rr
6.l
! thgl;ils1 llojl 5 !i,ic of tlrerltrol rit
' I Check here and contlnue ln the Mlscellaneous secllon starllng on page 19 lf addltlonal space ir needed
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=l2b Dernonitratlon of usefulness of thermal output: At a mlnlmum, provlde a brlef dasc.lptlon of each use of the
thermal oulput ldentified above. ln some caset thls brief descrlptlon ls sufficlent to demonstrate usefulness.
However, lf your facllityt urc of thermal output ls not common, and/or lf the urefulne ss of :uch thermal output is
not reasonably clear, then you must provade additional detaili is necessary lo demonstratc usefulnerr, Your
appllcatlon may be reJected and/or additlonal lntormatlon may be requlred lf an lnsufflclent showlng of usefulnecr
is made. {Exceptlon: lf you have prevaously retelved a Commlssron certification approving a specillc use of thermal
output ,elated to lhe lnstant facility, then you need only provlde a brlel descrlptlon of that ure and a reference by
date and docket number to the order certifylng your faclllty wlth the lndlcated ure. Such exemptlon may not be
used lf any change creates a material devlatlon lrom the prevlourly authorlzed use.) lf addltional rpace ls needed,
contlnue ln the Mlscellaneous section startlng on page 19.
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Case L:18-cv-00236-REB Document 4-9 Filed 06/25118 Page !5 ot 20
FIRC Form 556 l5 - Topplng-Cycle Cogeneration Facilitles
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lAppllcants for facllitles reprerentlng topping-cple technology rnust demonrtrate compliance wlth the topplng-
lwde operatlng rtand.rd and, lf appllcable, efficlency$andard. Section 292.205(aXl) of the Commlslon's
lregulatlons ( l8 C.F.R. 5 292.205(aXl )) establlshes the operatlng standard for topplng-cycle cogeneratlon facilltles:
theusefulthermalenergyoutputmustbenolessthan5percentofthetotrlenergyoutput. Se€tlon292.2o5(al(2)
(.l8 C.F.R. 5 292.205(aX2)) efiabllshes the efflclency strndard for topplng<ycle cogeneratlon frcllitles for whlch
lnstallatlon cornmenced on or after March 13, 1 9E0: tlw usr{ul power output of the f:clllty plus one-half the useful
thermal energy output murt (A) be no less than 42.5 per(ent of the total energy lnput ol natunl gas and oll to the
faclllty; and (Bl lf the useful thermal energy output b less than 15 percent of the totalenergy output oFlhe faclllty,
benolessthan4Sp€rcenlof thetotal energylnputof natural gasEndotltothefaclllty. Iodemonstrate
compllance wlth the topplng-cycle operallng and/or effklency ttandardr, or to demonstrate that your facllity ls
exempt from the cfficiency rtandard bared on the date that installation commenccd. re:pond lo llnes l3a through
131 below.
lf you Indlcated inline l0athatyourfacllityrepresentsbotfttopplng-cycleand bottomlng-cyrle cogeneration
technology, then respond to llnes 1 3a thrcugh l3l below conslderlng only the energy lnputs and outputs
attrlbutable to the topplng-cycle portlon of your facillty. Your ma15 and heat balance dlagram murt make clear
whlch mass and energy llow valoes and syslem componentr are for whlch portlon (topplng or bottonrlngf ol the
cogeneration system.
l3a lndlcate the annual average rate of useful thermal energy outpul made avallable
to the host(s), net of any h€at conlalned ln condenrate return or make-up water Bl uIh
1 3b lndlcatc the annual average rate of net electrlcal energy output
KW
., Bt.r/h
I 3c Multlply line I 3b by 3,4I ? to convert from kW to Btulh
l3d lndlcate the annual average rate of mechanlcal energy output taken dlrectly off
of the shaft of a prlme mover for purposet not dlrectly related lo power produdlon
(thls value lr usually zero)hp
,: Btu,'lr
I 3c Muhlply llne I 3d by 3,544 to convert from hp to Btu/h
8tu/l"r
I 3f lndicate the annual average rate ofenergy input from natural gar and oll
t3g Topplng.cycle opentlng value * 100 ' l3a / {t3a + I3c * I3e}
l3h Topplng<ycle efflclencyvalue * 100 r (0.5'l3a t 13c + 13e) / l3f
t 3l Compllance wlth opcr.tlng standard: lr the opentlng value shown ln llne t 39 greater than or equal to 596?
I Yes (<ompl.er wlth operatlng standard) ;- , No (doer not comply wllh operatlng standard)
r 3, Dld lnstallatlon of the faclllty ln lts current form commence on or aft€r March '13, 1980?
, Yes, Your facllity ls subject to the efflclency requirerfient$ of 18 C.F.R. 5 292.205{a}(2}. Dernonttrate
compliance with the ctflcicncy rcqulrcment by responding to line l3k ol 1 31, ar applicable. below
- ' No. Your faclllty ls exempt from the efliclency standard. Skip llnes l3k and I 31,
1!k Compllance with efficlency rtandard (for low operatlng valuel: ll the operating value shown ln line l39 is less
than I 5%, then lndlcate behw whether lhe efficiency value shown in llne l3h greater than or equal to 45%:
Yer (complles wlth efficiency standard) No (doer not comply wlth efflclency standardl
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131 Compl'ance wlth efficiency rtandard (for high oper.ting vrlue): lf the operatlng value shown in line 139 is
greater than or equal to I 5%, then lndlcate below whethEr the e fflclency value shown in llne 13h i: greater thrn or
equal to 42.5%t
'Yes (complles wlth ef{idency rtandard} No {does not comply with efflclency rtandard)
Case 1:18-cv-00236-REB Document 4-9 Filed 06/25118 Page 16 of 20
FERC Form 556 Page I6 - SonomhE-Cycle Cogeneratlon Facilitie5
lnformation Required for Bottorning-Cycle Cogeneration Facility
lf 1ou lndlcated ln llne I 0a that your fadllty representr bottomlng<ycle qogeneratlon technology, then you must respond
to th€ items on t6 and 1 7"t6and 17.
Qthermal energy output of a bottomlng-c}lcle cogeneration hclllty Ir the energy relate d to the proceis(es) from
whlch at least some of the re.lect heal ls then ured for power production. Pursuant to sectlonr 292.?02(c) and {e) of
the Commission'r rcgulations (18 C.F,B. 5 292.202(c) and (e)) , the thermal energy oulput of a quallfflng bottomlng-
cycle cogeneratlon faclllly must be useful. ln connection with thls requirement, de:cribe the proces:(esl from which
at least rome of the refect heat ls used for power productlon by responding to lines l4a and l4b below,
I4a ldentlry and descrlbe each thermal hort and each bottomlng<ycle cogenentlon proces! engaged ln by each
host. For horts wlth multlple bottomlng-cycle cogen€ratlon process€t provlde the data for each procers ,nteporaterows' Hasthe energy lnput to
Nameof entlty(thermal host) the thermal host been
perfomlng lhe process from augmented for purpores
which at least some of the ol lncteoslng power
rerect heat is used for powcr Thermal host'r relationshlp to faclllty production capacitylproductlon Thermal host'c procesr type {lf Yes, descdbe on p. 19)
Inarm,ll horl'r relattorr to larr)
th(rlnd! hort':
Yes No
(herrrral horl'r lo farl)t
tlrcrrrral hosl s
Yes ' No
(hermlrl hos( s relationr to faci Yes No
therrrral holl'i
;Check here and contlnue ln the Mlicellaneous rettlon starting on page '19 if additlonal rpace lr needed
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lilb Demonstrationofurefulnes3ofthermal outpulr Atamlnirnum,provldeabrlefdescrlptlonofeachprocess
ldentilied above. ln some cares, thlr brlef de:crlptlon ls rufflclent to demonslrate usefulness. However, lf your
fNilltls pro€$$ l, not rommon , andlor lf the usefulners of such lhermal output ls not reasonably clear, then you
must provide addltlonal detallr ar neces*ry to demonstrete usefulnesr. Your appllcation may be rejected and/or
additional lnformation may be requlred lf an ln:ufficient rhowlng of usefulness ls made. (Exceptlon: lf you have
prevlou{y recelved a Comml:slon certlficatlon approvlng a specific bottomlng<ycle process related lo thc lnstant
hcillty, then you need only provlde a brlef descrlptlon of lhat process and a reference by date and docket number
to the order certlllng your facility with the indicated procesi. Such cxemption mry not be used lf rny material
changes to the procers have been made.) lf addltlonal space ls needed, contlnue ln the Mi3cellaneour tectlon
starting on page '19.
t)
Case 1:18-cv-00236-REB Document 4-9 Filed 06/2511-8 Page t7 oI20
FE8C Form 556 Pagr 17'n Facllltles
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Appllcants for facilltles representlng bottomlngcycle technology and for which inrtallation commenced on or after
I March I 3, 1990 must demonslrate <amplirnce wlth the bottoming<ycle ef{lclency standardr Sectlon 292J05(b) of
Ithe Commlsslon's regulatlons ('18 CF.R, S 292.205{b}) ertabllshe: the efflclency standard for bottomlng<yde
icogeneratlonfaciltths: theuseful powero{rtptrtofthefacllltyrnustbenolessthan45percentoftheenergytnput
of natural gas and oll for supplementary fldng. Io demonstrate compllance wlth the bottomlng-cycle efllclency
standard {if appltcable}, or to demonstrate that your facillty lr exempt from thlr stande,d bated on the dite that
lnltrllatlon of the faclllty began, respond to llnes l5a through l5h behw.
lf you lndlcated ln llne I0a that your facllity reprcsents 6otfi topplngcycle and bottomirig.(ycle cog€neration
technology, then respondtolines lSathrough l5hbelowconslderlngonlythe energy lnputs and outputs
attrlbutable to the bottomlng-cycle portlon of your faclllty. Your mass and heat balance dlagrrm murt make clear
whlch mars and energy llow valuet and lyttem cofiponent, are for which portlon of the cogeneratlon syrtern
(topplng or bottomlng).
1 3a Dld lnstalletlon of the faclllty ln hs cunent form commence on or after March 13. I 9EO7
Yer. Your faclllty ls subJedto the efflclency requlremcnt of lS C.F"n. $ 29?J05(b). Detranctrate compllance' whh lhe efflclency requlrement by resporrdlng to liner 15b through t 5h below.
I I No. Yourfacilltylsexemptfiomtheefficlencystandard.5kiptherettof page'17.
t 5b lndlcate the Nnnuel average rate of net electrlcal energy output
kw
I 5c 'Multiply line l5b by 1,412 to convert fiom kW to Btu/h
Btu/ t
15d lndicatetheannualaveragerateofmechanicalenergyoutputtakendlrectlyoif
of the shaft of a prlme mover for purposes not dlrectly related to power production
(thls value h usually zero)hp
l5c Muldpty llne | 5d by 2,544 to convert lrom hp to Btu/h
, 0luilt
Brulh
t 5l lndlcale lhe annual avcrage rate of supplementary energy input from natural gas
or oil
159 Bottomlng-cycle effichncy value - l(E t (l 5c + I 5eJ / I 5f
ii,,
ioc
SE
.=GP=sdqEJ*ULJ o)(Uj
FTcnuCtr'=oL. tJO(E
EUJco
t 5h Compllance wlth efflclency rtandard; Indlcate below whether the efllclency value rhown ln llne l59 ls greater
than or equal to 45%:
- I Yes {compl'es wilh efliciency rtandardl i- I No (doer not conrply with efflclerrcy standard}
Case 1:18-cv-00236-REB Document 4-9 Filed 06/25118 Page 18 of 20
F[8C Fom 556 Page I8'All Farllltles
Certificate of Completeness, Accuracy and Authority
Applkant must certify compllance wlth and understandlng of flling requlrements by checklng next to each item below and
slgnlng at the bottom of thls sectlon. Forms with lncomplete Certificates of Completeners, Accuracy and Authorlty wlll be
reJected by the Secretary ol the Commlrslon"
5igner identlfled below cerllfles the followlng: {check all ltems and applicable subltems}
He or she has read the llling, lncludlng any informallon contalned ln any attoched documentr, such as cogeneration
ffi mars and heat balance dlagramr, and any lnformatlon contalned ln the Mlscellaneous rectlon rtartlng on page l g, and
knowr its contents.
a
He or rhe has provlded all of the requlred information for certlflcatlon, and lhe provlded lnfolrnatlon lJ true as $tited,
to the best of hls or her knowledge and bellef.
He or rhe porsess full powef ild authorlty to $gn tha fillng; as required by Sule 2005(aX3) of the Commisslon! Rules of
Practlce and Procedure tl8 C.F,fr. I 385.2005(a)(3)1, he or she i: one ofthe followlng:{check one}
I The perron on whose behalf the fillng ls made
! An offlcer of the corporatlon, trust, asso(latlon, or other organlzed group on behalf of which the {iling ls made
- Anofficcr.ag€ntor€mployeo[thegovernmentalaulhority,agencporinrtrumentalltyonbehalfofwhichtheu lillng ls made
-, ArcpresentatlvequalllledtopractlcebeforetheCommlsrlonunderRule2l0loftheComrnlsslon'sRulesof6 Practlce and Procedure (18 C.F.R. E 385-2101) and who potsesses authorlty to rign
x
B
lle or she ha: revlewcd alt automatl( silculatlons and agrees with thdr results, unless otberwite noted ln the
Mllcellaneous s€ctlon rtartlng on page 19.
He or she ht' provlded a copy of thls Form 556 and all atta(hmentr to the utllltles wlth whlch th€ faclllty wlll
interconnect and tnnsact {ree llner 4a lhrough 4d), ar well as to the regulatory authorltles o, the states ln whlch the
faclllty and those utllltles resldc. 5ee the Requlred Notice to Publlc Utllities and State Regulatory Authoritles rectlon on
page 3 for more information.
Provlde your rlgnrture, address and signature date below. Rule 2005(c) of the Cornmlsslon's Rules of Practice and
Procedure (18 C,F.R. 5 385:005(c)| provldes thal petsons 0llng lheir documentr electronicatly rnay use typed characterr
representing hls or her narne to sign the filed documentr. A person flllng thls document electronlcally should slgn (by
typlng hls or her name) ln the space provlded below,
Your Slgnatute
Ft f {,r .I . ftichartlson
Your address
515 N.27t-h Slreet.
0r.risc, I0 83 /02
Date
Audit Notes
Commirsion Staff Use Onlyr D
Case 1:1-8-cv-00236-REB Document 4-9 Filed 06/25118 Page L9 ot 2O
FIRC Form 556 Page 19 - All Facllltles
Miscellaneous
Use thls space to provlde any lnformatlon br whlch there wrs not sufflclent rpace In the prcvious sectlons of thE form to
provlde. For exh such ltem of lnforma tlcrr cleorly klcntily the llne number that lhe lnfonmtlon belongs to. You may rlrc ure
thls spece to provlde any addl{onal lnforrnrtlon you b€lleve ls relevant to the certlflcatlon of your faclllty.
Your response betow ls not llmlted to one page, Addhlonal page(s) wlll automatlcally br lnserted lnto thls form lf the
length of your rerponse exceeds the space on thlc page, Use as many pagel as you requlre.
?he orlglnal rorm 556 incorrectly listed the lalitude,rnd l.ongi.tuda coortlinatcs rn
Paraqraph 3c as West 11,1.600 North 42.206, Thc correcc lallcude and longttude
coordinatos are l.lcat, I l4 ,604 Nnrlh {2. 191 ,
Case 1:18-cv-00236-REB Document 4-9 Filed 06/25118 Page 20 oI20
case 1:18-cv-00236-REB Document 4-10 Filed 06/2511g page 1 of 19
FEDERAL ENERGY REGUTATORY COMMISSION
WASHINGTON, DC
OMBControl# 1902-0075
Expiration 06/30/2019
Fo r m 5 5 6 F,::ffi,:::::ft:X?j:,';';::ill;, S'[atus for a sma' Power
General
Questions about completlng thls form should be sent to Fprrrlg5_6u1l-qrq.gpl. lnformation about the Commlsslon's QF
program, answers to frequently asked questions about QF requlrements or cornpleting this form, and contact lnforrnation for
QF program staffare avallable at the Commission's QF website, vrri1lyr.fe,r_q.g1,o,r,,1,Q[. The Commlsslon's QF website also
provides llnks to the Commisslon's QF regulations (18 C.F.R. 5 131.80 and Part 292), ar well as other statutes and orders
pertainang to the Commlssion's QF program.
Who Must File
Any applicant seeking QF status or recertification of QF status for a generatlng facility with a net power production capacity
(as determined ln llnes 7a through 79 below) greater than l0(10 kW must file a self-certification or an application for
Commlsslon certification of QF status, which includes a properly completed Form 556, Any applicant seeling QF status for a
generaling facility with a net power production capacity 1000 kW or less ls exempt from the certiflcation requlrement, and is
therefore not required to complete or file a Form 556. 5ee l8 C.F.R. $ 292.203.
How to Complete the Form 556
This form is lntended to be completed by responding to the items ln the order they are presented, according to the
lnstructions given. lf you need to back-track, you may need to clear certaln responses before you will be allowed to change
other responses made previously in the form. lf you experience problems, clkk on the nearest help button ( &i ) for
assistance, or contact Commission staff at IOip!5lifr;f$q,Sqy,
Certain lines in this form will be automatically calculated based on responses to previous lines, with the relevant formulas
shown. You must respond to all of the previous lines within a section before the results of an automatically calculated fleld
will be displayed. lf you disagree with the results of any autornatic calculation on this form, contact Commission staff at
[q1tt-.i..16<lfe-rr-0rr,v to discuss the dlscrepancy before fillng.
You must complete all lines in this form unless instructed otherwlse. Do not alter thi: form or save this form in a different
format. lncomplete or altered forms, or forms saved in formats other than PDF, wlll be reJected.
How to File a Completed Form 556
Appllcants are required to flle their Form 556 electronically through the Commission's eFiling website (see lnstructions on
page 2). By filing elertronically, you wlll reduce your flling burden, save paper resources, save postage or courler charges,
help keep Commission expenses to a minimum, and recelve a much faster confirmation (via an email contalning the docket
number asslgned to your faclllty) that the Commission has recelved your filing.
lf you are simultaneously filing both a waiver request and a Form 556 as part of an application for Commission certiflcation,
see the "Waiver Requests" sectlon on page 3 for more lnformatlon on how to file.
Paperwork Reduction Act Notice
This form ls approved by the Office of Management and Budget. Compllance with the lnformatlon requlrements establlshed
by the FERC Form No. 556 ls requlred to obtain or maintaln status as a QF. See '18 C,F.R. S 131.80 and Part 292. An agency may
not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a curently
valid OMB control number. The estimated burden for completing the FERC Form No. 556, lncluding gathering and reporting
information, is as follows: 3 hours for self-certification of a small power ptoduction facility, 8 hours for self-certifications of a
cogeneration facility, 6 hours for an application for Commlssion certification of a small power production facillty, and 50 hours
for an appllcation for Commission certification of a cogeneration facillty,Send comments regarding this burden estimate ot
any aspect of this collection of information, including suggestions for reducing this burden, to the following: lnformation
Clearance Officer, Office of the Executive Dlrector (ED-32), Federal Energy Regulatory Commlssion, 888 First Street N.E.,
Washington, DC2C/.26 (Ua1i1C_lgrr;61-ql3fc..1c.gr.1'1-1; and Desk Officer for FERC, Office of lnformation and Regulatory Affafrs,
Office of Management and Budget Washington, DC 20503 {oir,r- sr11:rrir,r,io_rlgprqit-cri,p.guy}. lnclude the Control No.
1 902-0075 ln any correspondence.
case 1:18-cv-00236-REB Document 4-10 Filed 06/2511g page 2 ot Lg
FERC Form 556 Page 2 - lnstructions
Electron ic Filing (eFiling)
To electronically flle your Form 556, visit the Commlssion's QF website at y-y_yt[L]tercgo:4tQf and click the eFiling link,
lf you are eFiling your first document, you will need to register with your name, emall address, malllng address, and phone
number, lf you are registerlng on behalf of an employer, then you wlll also need to provide the employer name, alternate
contafi name, alternate contact phone numbel and and alternate contact emaiJ.
Once you are registered, log in to eFiling with your registered email address and the password that you created at
registration. Follow the lnstructions. When prompted, select one of the following QF-related fillng types, as approprlate,
fiom the Electric or General filing category.
Filing calegory Flling Type as listed in eFillng Description
Electrlc
(Fee) Application for Commission Cert. as Cogeneration QF
Use to submit an appllcation for
Commission certification or
Commlsrlon recertification of a
cogeneration facility as a QF.
(Fee) Application for Commission Cert. as Small Power QF
Use to submlt an applicatlon for
Commission certlfl catlon or
Commlssion recertlflcation of a
small power productlon faclllty as a
QF.
Self-Certiflcation Notice (QF, EG, FC)
Use to submit a notlce of self-
certification of your facillty
(cogeneration or small power
productlon) as a QF,
Self-Recertification of Qualifuing Facility (QF)
Use to submit a notlce of self-
recertification of your facility
(cogeneration or small power
production) as a QF.
Supplemental lnformation or Request
Use to correct or supplenrent a
Form 556 that was submltted with
errors or omissions, or for whlch
Commission staff has requested
additional information. Do not use
this flling type to report new
changes to a facility or its
ownership; rather, use a self-
recertification or Commlssion
recertlflcation to report such
changes.
General (Fee) Petition for Declaratory Order (not under FPA Part I )
Use to submit a petition for
declaratory order grantlng a waiver
of Commission QF regulations
pursuant to l8 C.F.R.55 292.2M{al
(3) and/or 292.205(c). A Form 556 is
not required for a petition for
declaratory order u nless
Commission recertiflcatlon ls being
requested as part of the petition.
You will be prompted to submit your flllng fee, if appllcable, during the electronlc subrnlssion process. Flllng fees can be paid
vla electronic bank account debit or credlt card.
Durlng the eFiling process, you wlll be prompted to select your flle(s) for upload from your computer.
case 1:18-cv-00236-REB Document 4-10 Filed 06/2511g page 3 of 19
FERC Form 556 Page 3 - lnstructions
Filing Fee
No filing fee is required if you are submitting a self-certiflcation or self-recertlflcation of your facllity as a QF pursuant to t 8
C.F.R. S 292.207(a).
A flllng fee ts required if you are filing either of the following:
(l ) an application for Commlssion certilication or recertlficatlon of your facllity as a QF pursuant to I 8 C.F.R. S 292.207(b), or
(2) a petltion for declaratory order granting walver pursuant to 1 I C.F.R. 55 292.204(aX3) and/or 292.205(c).
The current fees for applications for Commission certiflcations and petitions for declaratory order can be found by vlslting the
Commission's QF website at w:rvw,fete .gqvlQt- and clicking the Fee Schedule link.
You will be prompted to submit your filing fee, if appllcable, during the electronic filing process described on page 2.
Required Notice to Utilities and State Regulatory Authorities
Pursuant to 18 C.f.R. 5 292,207(aXii), you must provi<le a copy of your self-certification or request for Commission certification
to the utilities with which the facility will interconnect and/or lrarrsaqt, as well a5 to the stale r€gulatory authorities of the
rtates ln which your lacility and thos€ utilities reside. Linkr to information about the regulatory authorities in various states
can be found by vlsiting the Commission's QF website at wg4&.&1ggo-dQf. and clicking the Notlce Requirernents linlc
What to Expect From the Cornmission After You File
An applicant filing a Form 556 electronlcally will receive an email message acknowledging recelpt of the Iiling and :howlng
the docket number assigned to the filing. Such email is typically sent within one business day, but may be detayed pending
confirmation by the 5ecretary of the Commission of the contents of the filing.
An applicant submltting a self-certlfication of QF status should expect to receive no documents from the Commisrion. other
than the electronlc acknowledgement of receipt descrlbed above. Conristent with itt name, a solf-cenificatlon is a
certlfication by the opplicont rtce/f that the faclllty meets the relevant requlrements for Qf status, and does not lnvolve a
determination by the Commission at to the :tatus of the facillty. An acknowledgement of receipt of a self-certification, in
particular, does not represent a determlnation by the Commlssion with regard to the QF status of the facllity. An applicant
self-certifying may, however, receive a rejection, revo(ation or deficiency lette,r lf lts application is found, during periodic
compliance reviews, not to comply with the relevant requirements.
An appllcant submitting a request for Commission ce(ificatlon will receive an order either granting or denying cefiificatlon of
QF status, or a letter requesting additional information or rejecting the application. Pursuant to 1B C.f.R. 5 292.207(b)(3), the
Commlssion must act on an appllcation for Commission cer(ificatlon within 90 days of the later of the flling date of the
application or the fUing date of a supplemenl, amendment or other change to the application.
Waiver Requests
I I C,F.R. 5 292.20a(aX3) allows an applicant to request a waiver to modifi the method of calculation pur5uant to I I C.F.R. 5
292.2A4b)12) to determine if two facilities are considered to be located at the :ame site, for good cause, l8 C"F.R S ?92,205(c)
allows an applicant to request waiver of the requirement, of l8 C.F.R. SS 292"205(a) and (b) for operating and efficlency upon
a showing that the facility will produc,l significant energy savings, A request for waiver of these requiremeiltt must be
submitted a! a petition for declaratory order, with the appropriate filing fee for a petitlon for declaratory order. Appllcants
requesting Cortnrission recertlfication as part of a reqrrert for waiver of one of these requirernents should electronlcally
submit their completed Form 556 along wlth their petition for declaratory order, rather than filing their Form 556 ar a
separate recluest for (ommisslon recertification, Only the fillng fee for the petitton for declaratory order must be pald to
cover both the waiver request and the request for recertiflcation il such requests are made sirtwltoneously.
1S C.F.R. S 292.203(dX2) allows an applicant to request a walver of the Form 556 flling requirernents, for good cause.
Applicants flllng a petition for declaratory order requesting a waiver under l8 C.F.R. $ 292.203(dX2) do not need to (omplete
or submit a Form 556 with their petition.
case 1:18-cv-00236-REB Document 4-10 Filed 06/25lr.8 page 4 ot L9
FERC form 556 Page 4 - lnstructlons
Geog raphic Coordinates
lf a street address does not exist for your facillty, then line 3c of the Fornr 556 requires you to report your facility's geographic
coordlnates (lotitude and longltude). Geograpiric coordinates may be obtained from several dlfferent sources, You can find
links to onllne servlces that show latitude and longltude coordinates on onllne mapr by vlsitlng the Commission's QF
wetrpage at lvrq,w.furc.ltov/Ql and cllcking the Geographic Coordlnates llnk. You rnay also be able to obtain your geographic
coordinates fronr a 6P5 devlce, Google tarth (available free at [upi/lea_rth.qo,o_!l.tferrr), a property survey, various
engineering or constructlon drawings, a property deed, or a munlcipal or county map fiowing property lines.
Filing Privileged Data or Critical Energy lnfrastructure lnformation in a Form 556
The Commission's regulations provide procedures for applican$ to either (l ) request that any lnfornration submltted with a
Form 556 be given privileged treatment because the infornration is exempt from the rnandato,y public dlsclosure
requirements of the Freedom of lnformation Act, 5 U.S.C. $ 552, and rhould be withheld frorn public dlsclosure; or (2) ldentlfy
any docurnents containing critical energy infrastructure lnformatlon (Ce ll) as defined in l8 C.F.R, I 388.1 I 3 that should not be
made public.
lf you are seeking privlleged treatment or Cfll status for arry data in your Form 556, then you must follow the procedures in 18
C.F.R. 5 388.1 I2, See wyrw.[e_rc.q1ov/lrclplfiling"grritlcl{ilc-ceir,aspfor more information,
Among other things (see l8 C.F.R, $ 388.1 l2 for other requlrements), appllcantl seeking pilvileged treatment or CEll etatus for
data submitled in a Form 556 must prepare and file both (l) a complete version of the Form 556 (containing the prtvileged
and/or CEll data), and (2) a public verslon of the Form 556 (wlth the privlleged and/or CEll data redactedl. Appllcants
preparing and filing thete dlfferent verslons of their Form 556 murt lndicate below the $ecurlty designation of thls verslon of
thelr document. lf you are not seeking privileged treatment or Ctll status for any of your Form 556 data then you should not
respond to any of the items on this page.
Non-Public Applicant ls seeklng privileged treatment and/or CEll status for data contained in the Form 556 lines
f lndicated below. This non-public version of the applicant's Form 556 contains all data, lncluding the data that is redacted
in the (separate) publlc version of the applicant's Form 556.
Publlc (rcdactcd): Applicant is seeking privileged treatment and/or CEll status for data contained ln the Form 556 lines
I lndlcated below. Thls public verslon of the applicants's Form 556 contains all data exceJrt for data from the lines
indicated below which has been redacted.
PrlvllcA:d: lndicate below which lines of your form contaln data for whlch you are seehng privlleged tr€atment
Crltical Energy lnfrastructure lnformation ((Ell): lndicate below which llnes of your fotm contain data for which you are
seeklng CEll status
The eFiling process described on page 2 will allow you to identify which versions of the electronic doruments you:ubmit are
public, privileged and/or CEll. Tho filenames for such documents should begin wltlr 'Public', "Priv', or'CEll", as appllcable, to
clearly lndicate the security designation of the file. Both versions of the Form 596 should be unaltEre d PDF copies of the Form
556, as available for download from rvww,frirc.Urlv/d)F. To redact data from the public copy of the submittal, simply omit the
relevant data from the Form. For numerlcal fields, leave the redacted fieltls blank, for text fields, complete ar much of the
fleld as possible, and replace the redacted portions of the fleld with the word "fiEDACfEO" in hrackets. Be sure to identlfi
above {l fields which contain data for which you are seeking non-public status.
The Commisslon is not responsible for detecting or corredlng fller errors, including those errors related to security
designation. lf your documents contain sensitive information, make sure they are flled using the proper security designation.
Form 556
case 1:18-cv-00236-REB Document 4-10 Fired 06/25118 page 5 of 19
FEDERAL ENERGY REGULATORY COMMISSION oMB control# te02-007s
WASHINGTON, DC Expiration 06/30/20te
Certification of Qualifying Facility (QF) Status for a Small Power
Production or Cogeneration Facillty
w
s
0
s
s
0
t a Full name of applicant (legal entlty on whose behalf quallfrlng facility status is sought for this facility)
Franklin Energy Storage Three, LLC
1b Applicant rtreet address
515 N. 27th Street
tc City
Bo i- se
ld State/province
ID
1f Country (lf not United States)lg Telephone number
(208 ) 938-7901
lc Postalcode
831 02
t h Has the instant facility ever prevlously been certlfled as a QF? Yes ff1 No I
1
1l lfyes,providethedocketnumberofthelastknownQFfilingpertainingtothisfacllityr QFrr - 582 - 000
lJ Under which certification process ls the applicant making this filing?
- Notice of self-certification ,- Application for Commisslon certification (requires flllng6 (see note below) u fee; see "Filing Fee'section on page 3)
Note: a notice of self-certification is a notice by the applicant itself that its faclllty cornplies with the requirements for
QF status. A notice of self-certlflcation does not establlsh a proceedlng, and the Commission does not review a
notice of self-certification to verifo compllance. See the "What to Expect From the Commlsslon After You File'
section on page 3 for more informatlon.
1k What type(r) of QF status ls the applicant seeklng for lts facility? (check all that apply)
'! QualifiTing small power production facillty status f Qualifying cogeneration hcility status
tl What is the purpose and expected effective date(s) of this filing?
__ Origlnal certiflcation; facility expected to be installed by and to begin operation on _.
I I Change(s) to a previ<lusly certified facility to be effectlve on
(ldentl0 type(s) of change(s) below, and describe change(s) in the Miscellaneous section starting on page 19)
I I Name change and/or other admlnistratlve change(s)
i- Change in ownership
r_ Change(s) affecting plant equipment, fuel use, power production capacity and/or cogeneration thermal output
,ft Supplement or conection to a previous flling submitted on | / 26 / l'l
(describe the supplement or corre€tion in the Miscellaneous section rtarting on page 19f
Co
o
E
o
C
co
o.9
E.o-
t m lf any of the following three statements Is true, check the box(es) that describe your situation and complete the
to the extent possible, explaining any speclalcircumstances in the Miscellaneous section starting on page 19.
,--, The instant facility complies with the Commisslon's QF requirements by vlrtue of a waiver of certaln regulatlonsU previously granted by the Commlsslon In an order dated (specifi any other relevant waiver
orders in the Miscellaneous section starting on page 19)
--, The instant facility would comply wlth the Commission's QF requlrements if a petition for waiver submittedU concurrently with thls application is granted
The instant facility complies with the Commisslon's regulations, but has special circumstances, such as the
f] employment of unique or innovative technologies not contemplated by the structure of this form, that make
the demonstration of compliance via thls form difficult or lmposslble (descrlbe in Misc. section starting on p. 1 9)
FERC Form 556
case 1:18-cv-00236-REB Document 4-10 Filed 06/2511g page 6 of 19
Page6-All Facilities
Y,'
w
w
*
c
.9
o
E
o
s
U(o
co\J
2a Name ofcontactperson
Peter Richardson
2b Telephone number
(208 ) 938-7901
2c Whlch of the followlng describes the contact person's relationship to the appllcant? (check one)
I Applicant (self) f, Employee, owner or partner of applicant authorized to represent the applicant
f Employee of a cornpany afflliated wlth the applicant authorized to representthe applicant on this matter
ffi Lawyer, consultant, or other representative authorized to represent the appllcant on this matter
2d Company or organizatlon name (lf applicant ls an individual, check here and sklp to line 2e) I -l
!'ranklin Energy Storag'e Three. LLC
le Street address (if same as Appiicant, check here and skip to iine 3a)ffi
zl ri;,29 State/province
2h Postal code 2i Cor-rnlry (if not United States)
co
(oUo
'rJcfi,co
.1,\J
{:
o3
=\J
|Uu-
3b Street address (il a street address does not exist for the facility. check here and sk;p to line 3c)[l
3c Geographlc coordlnates: lf you indicated that no street address exlsts for your facillty by checking the box ln llne 3b,
then you must specifo the latitude and longitude coordlnates of the facllity ln degrees (to three decimal places), Use
the following formula to convert to declmal degrees from degrees, minutes and seconds: declmal degrees =
degrees + (minutes/60) + (seconds/3600), See the "Geographlc Coordinates' section on page 4 for help. lf you
provided a street address for your facility in line 3b, then specifrlng the geographic coordlnates below ls optional.
Lonsrtude H;;:Ji 114.603 dssrsg5 Larrtude E}|II[' 4:.ie2 dqslss5
3d Clty (lf unincorporated, check here and enter nearest city) ffi
Jackpot
3e State./province
Nevada
3f County (or check here for independent €ity) ;_;
Twin t'aIls
39 Country (if not United States)
lno
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tdentlff the electrlc utilities that are contemplat€d to rransact wlth the faclllty
4a ldenti$ utility interconnecting wlth the facility
fdaho Power Company
4b ldentify utilities providing wheeling service or check here rf none [l
4c ldentify utllities purchasing the useful electric power output or check here lf none
Idaho Power Company
4d ldentify utllilies prorriding supplementary power, backup power, rnaintendnce povver, and/or interruptible por,ver
senzice or check here rI none [l
3a Facility name
Franklin Energy Storage Three
case 1:18-cv-00236-REB Document 4-10 Filed 06/25i1g page 7 of Lg
FERC Form 556 PageT-All Facilities
5a Directownershipasofeffectivedateoroperatlondate: ldentiffall dlrectownersof thefacilityholdingatleastl0
percent equity interest. For each identlfied owner, also (l ) lndicate whether that owner is an electrlc utility, as
defined ln section 3(22) of the Federal Power Act (16 U.S,C.796(22)), or a holding (ompany, as deflned ln section
1 262(8) of the Publlc Utllity Holdlng Company Act of 2005 (42 U.S.C. 1645 t (8)), and (2) for owners which are electrlc
utilities or holding companies, provide the percentage of equity lnterest ln the facllity held by that owner. lf no
direct owners hold at least 10 percent equlty lnterest in the facitity, then provide the required lnformatlon for the
two direct owners with the largest equity interest in the facility.
Electrlc utility or lf Yes,holding oi equity
YesI
YesfJ
Yes f
Yes I
Yes fl
Yes fJ
Yes f,
Yesfl
YesfJ
Yes f,
NoE
Non
No fl
NoD
NoI
NoD
NoD
Nof,
Non
NoD
6
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I Check here and continue in the Mlscellaneous sectlon starting on page 19 if additional space is needed
Full legal names of direct owners interest
2t
3)
4)
s)
6)
7\
8)
e)
10)
l) Peter J. Richardson
company
5b Upstream (i.e., indirect) ownership as of effective date or operation date: ldentify all upstream (i.e., indirect) owners
of the facility that both (1) hold at least l0 percent equity Intereit in the facillty, and (2) are electric utilitiet as
defined in section 3(22) of the Federal Power Act (16 U.S.C.796(22)), or holding companies, as defined in section
1262(8t of the Public Utility Holding Company Act of 2005 (42 U.S.c. 164.51(8)). Also provide the percentage of
equity interest in the facility held by such owners, (Note that, because upstream owners may be subsidiaries of one
another, total percent equity interest reported may exceed 100 percent.)
Check here if no such upstream owners exist. fi
% equity
Full legal names of electric utility or holding company upstream owners interest
'l)
2\
3)
4')
s)
6)
7l
8)
e)
10)
Check here and continue in the Miscellaneous section starting on page 1 9 if additional space is needed
*
?
b
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5c ldentlfi the facllity operator
Franklin Energy SLorage Three, LLC
{e
Case 1:18-cv-00236-REB Document 4-l-0 Filed 06/25118 Page 8 of 19
FERC Form 556 PageS-All Faclllties
6r Describe the primary energy input (check one main category and, if applicable, one subcategory)
I Biomass (specify) [t Renewable resources (speclfy) [ Geothermal
! Landfill gas fJ Hydro power - river fl Fossll fuel (specify)
! Manure dlgester gas I Hydro power - tidal E Coal (not waste)
I Municlpal solid waste f] Hydro power - wave I Fuel otl/diesel
I Sewagedigestergas ! Solar-photovoltaic D Naturalgas(notwaste)
I Wood f] Solar-thermal ,.-.,, Otherfossil fuel
I other biomass (descrlbe on page 1 9) E wind u (describe on page 19]
I waste (speciry type betow in line 6b) I ?dt:fl,[:::fa;J:'r]"'" I other (describe on pase 1e)
6b lf you specifled "waste" as the prlmary energy lnput in llne 6a, indicate the type of waste fuel used: (check one)
! Waste fuel listed in l8 C.F.R. 5 292.202(b) (specifu one of the followlng)
I Anthracite culm produced prior to July 23, I985
,.- Anthraclte refuse that has an average heat content of 6000 Btu or less per pound and has an average! ash content of 45 percent or more
.- Bituminous coal refuse that has an average heat content of 9.500 Btu per pound or less and has anu average ash content of 25 percent or more
Top or bottom subbituminous coal produced on Federal lands or on lndian lands that has been
,- determined to be waste by the Unlted States Department of the lnterior's Bureau of Land Managementu (BLM) or that is located on non-Federal or non-lndian lands outside of BLM's jurisdiction, provided that
the applicant shows that the latter coal is an extension of that determined by BLM to be waste
Coal refuse produced on Federal lands or on lndian lands that has been determined to be waste by the
D BLMorthatislocatedonnon-Federal ornon{ndianlandsoutsldeofBLM'sjurisdlction,providedthat
applicant shows that the latter is an extension of that determined by BLM to be waste
- Llgnite produced ln associatlon wlth the productlon of montan wax and lignite that becomes exposedU at a result of such a mining operation
I Gaseous fuels (except natural gas and synthetic gas from coal) (describe on page 1 9]
Waste natural gas from gas or oil wells (dessibe on page l9 how the gas meets the requirements of 1 I
fl C.F.R. 5 2.400 for waste natural gas; include with yorrr filing any materials necessary to demonstrate
compliance with l8 C.F.R. S 2,400)
fl Materials that a government agency has certified for disposal by combustion (describe on page 19)
I Heat from exothermic reactions (describe on page 1 9) [ Residual heat (descrlbe on page l9)
I Usedrubbertlres I Plastlcmaterlals ! Reflneryoff-gas I Petroleumcoke
Other waste energy lnput that has llttle or no commerclal value and exlsts in the absence of the quallfylng
f facllity industry (describe in the Miscellaneous section starting on page l9; include a dlscussion of the fuel's
lack of commercial value and existence ln the absence of the qualifying facllity industry)
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6c Provide the average energy input, calculated on a calendar year basis, in terms of Btu/h for the following fossilfuel
energy inputs, and provide the related percentage ofthe total average annual energy input to the facility {l 8 C.F.R. 5
292.202(il. For any oil or natural gas fuel. use lower heatlng value (18 C.F.R. 5 292.202(m)).
Annual average energy Percentage oftotal
Natural gas 0 Btu/h 0%
Oitbased fuels o Btu/h 0%
Coal 0 8tu/h 0 o/b
Fuel for fuel annual
case 1:18-cv-00236-REB Document 4-10 Filed 06/25i1g page g of 19
FERC Form 556 Page9-AllFacilities
lndicate the maximum gross and maximum net electric power production capacity of the facility at the point{s) of
delivery by completlng the worksheet below. Respond to all items. lf any of the parasitic loads and/or losses identified in
lines 7b through 7e are negligible, enter zero for those lines.
7a The maxlmum gross power productlon capaclty at the terminals of the indlvldual generato(s)
under the most favorable anticipated design conditions 000 kw
7b Parasltlc station power used at the facility to run equipment which is necessary and lntegral to
the power productlon process (boiler feed pumps, fans/blowers, office or malntenance buildings
direaly related to the operation of the power generating facilit, etc.). lf thllfacllity lncludes non-
power production processes (for lnstance, power consumed by a cogeneration facility's therrnal
host), do not include any power consumed by the non-power productlon activities in your
reported parasitic station power.IU
7c Electrical losses in interconnection transformers
434
7d Electrical losses in AC/DC conversion equipment, if any
920
7e Other interconnectlon losses in power lines or facilities (other than ttansformers and AC/DC
conversion equipment) between the terminals of the generator(s) and the point of interconnection
with 6365
00i) .0
7f Total deductions from gross power production capacity = 7b + 7c + 7d +7e
79 Maxlmum net powerproductlon capacity =7a-7f
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7h Description of facility and primary componentsl Describe the facillty and its operatlon. ldentify all bollers, heat
recovery steam generators, prime movers (any mechanical equlpment drlvlng an electric Aenerator), electrical
generators, photovoltalc solar equipment, fuel cell equlpment and/or other ptimary power generatlon equipment
used in the facility. Descrlptions of components should include (as appllcable) specifications of the nominal
capacities for mechanical output, electrlcal output, or steam generation of the ldentlfied equipment. For each piece
of equlpment ldentifled, clearly indicate how many pieces of that type of equlpment are lncluded ln the plant, and
which components are normally operating or normally ln standby mode, Provide a descrlption of how the
components operate as a system. Applicants for cogeneration facilities do not need to describe operations of
systems that are clearly depicted on and easily understandable from a cogeneration facility's attached mass and
heat balance diagram; however, such applicants should provide any necessaly description needed to understand
the sequential operation of the facility depicted in their mass and heat balance diagram. lf additional space is
needed, continue in the Mlscellaneous section starting on page 19.
The projecL consisLs oI an energy sLorage rrysLeri Quaiifying l"aciliLy provitling
scheduled and dispacchable eleclrici[y in forwa:d-Lcoking ri.me b.loc](s. The
crlergy $[orage sysLem that conprises fne ener!]y sLorage Qualifyi.ng F:ciIiLy i"s
rlesiqned t.o, and wiLl, receive lC0* of jss enerqy input from a combirrati-on of
renewab}e enerqy sources sucli as wind, solar, bj,ogas, b-i-omas, eic, The current
iniLial design utilizes soJ..rr: piro:ovolt"aic (PV) modulcs mounted to si$gie-axis
l-rac-kcr.s to provide thc el.ectric energy inpui- ro the 0ualifyi.ng Eacilityrs
i)dit.t.L\/ stst"age sysaern. The 9V mlduies are planne,J lo bp r:onnectcd in series/
para.l1el conbinaii"ons Lo solar inverteis, ratecl approximateLy 2.5 MWac each,
(sub-j eci: l-o change). T'he proposei eiect-ric energy :jLorage Qual.i.fying Facrlrr-y
will consrst oa an elecLro-chenric.rL b.rtt.ery anti r'riII hive e ('.lxrmum powcr oulplrl
capaciL.y r-rt- ?-5 MWac Ior a sustainecl tino perio<1 of 5 - 60 n:inut-os, ?he FaciIi-ty
r,rii.L r:onsi.st of an alternating currenl (Arj) lo CirecL current {DC} conirol
$y$Lcm. The QuaI;-fyinq Faci 1r[y wi Li. be uLili'Led t.o provide lhe purchasing
ulil-it1r wi r.h pre-scheriul-ed en,l clispalchabj.e AC energy ,./it.hin pre-cieterrnined time
i->locks. The:iole sourca of electric pr:wer and energy provided to r.he purchasi-ng
utility wj. ll he the el.eclro-chemi.cal- reacLion qivinq rise io the discharge of
elect^r'ic power and energy by the baLtery. In:urn, the sole dj"r:ect source of
energy input provided t-o the bal-tcry iacility will be, a.s described above,
rcnewah.rie sou races .
case 1:18-cv-00236-REB Document 4-10 Filed 06/25118 page 10 of 19
FERC Form 556 Page 10 - Small Power Production
Pursuant to l8 C.F.R. I 292.204(a), the power productlon capacity of any small power productlon facllity, together
wlth the power production capacity of any other small power production facilities that use the same energy
resource. are owned by the same person(s) or its affiliates, and are lo(ated at the same slte, may not exceed 80
megawatts. To demonstrate compliance with this size llmitation, or to demonstrate that your facility is exempt
from this size limitation under the Solar, Wind, Waste, and Geothermal Power Production lncentives Act of 1990
(Pub. L. l0l-575,'104 stat.2834 (1990) asamended by Pub. L.102-46, 105 stat.249 (199'llj, respond to llnes8a
through 8e below (as applicable).
lea ldentifu any facilities wlth electrical generating equipment located wlthln 1 mlle of the electrical generating
lequipment of the instant facility, and for which any of the entities identified in lines 5a or 5b, or their affiliates, holds
I
at least a 5 p€rcent equity interest.
lCheck here if no such facilities exlst. ffi
Facility location Root docket * Maximum net power
(city or county, state) (if any) Common owner(s) production capacity
t-l Check here and continue in the Miscellaneous section starting on page 19 if additional space is needed
KW
KW
KW
r)
2)
3)QT
8b The Solar, Wind, Waste, and Geothermal Power Production lncentives Act of 1990 (lncentlves Act) provldes
exemptlon from the size limitations in I 8 C.F.R. I 292.204(al for certain facilities that were certified prior to 1995.
Are you seeking exemptlon from the slze llmitations in t 8 C.F.R. 5 292.204(a) by virtue of the lncentives Act?
! Yes (continue at line 8c below) [t No Gkip lines 8c through 8e)
8c Was the orlglnal notice of self-certiflcation or appllcation for Commisslon certiflcatlon of the facility filed on or
beforeDecember3l, 1994? Yes[-] lto :-_
8d Did construction of the facllity commence on or before December 31, 1999? Yes i No : ,
oUEe4.9C {-'Ltuo.=TJtrrts .=O-lcoo.N,Fq
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8r lf you answered No in line 8d, lndicate whether reasonable diligence was exerclsed toward the completlon of
the faclllty, taklng lnto account all factors relevant to constructlon? Yes No lf you answered Yes, provide
a brief nairative explanatlon ln the Miscellaneous sectlon starting on page l9 of the construction timeline (in
particular. describe why construction started so long after the facility was certified) and the dillgence exerclsed
toward completion of the facility.
Pursuant to l8 C.F.R.5 292.204(b), qualif,ing small power production facilities may use fossil fuels, in minimal
amounts, for only the following purposes: ignltion; start-up; testing; flame stabllization; control use; alleviation or
prevention of unantlcipated equipment outages; and alleviation or prevention of emergencles, directly affectirtg
the public health, safety, or welfare, which would result from electric power outages. The amount of fossil fuels
used for these purposes may not exceed 25 percent of the total energy input of the facility during the I 2-month
period beglnning wlth the date the faclllty flrst produces electrlc energy or any calendar year thereafter.
9a Certification of compliance wlth l8 C.F.R.5 292.204(b) with respect to uses of fossil fuel:
ffi Applicant certifles that the facility will use fossil tuels exclusNely for the purposes listed above.
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9b CertlficationofcornpliancewlthlSC.f.R.S292.204(b) wlthrespecttoamountoffosril fuel usedannually:
Applicant certifies that the arnount of fossil fuel used at the facility will not, in aggregate, exceed 25
ffi percent of the total energy input of the facility during the I 2-month period beginning with the date the
facility first produces electric energy or any calendar year thereafter,
lnformation Required for Small Power Production Facility
lf you indicated ln line 1 k that you are seeking quallfylng small power production facility status for your facility, then you
must to the items on this Otherwlse,10.
s
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case 1:1-8-cv-00236-REB Document 4-10 Filed 06/2511g page 11 of j.9
FERC Form 556 Page 'l I - Cogeneration Facillties
Pursuant to 18 C.F.R. $ 292.2A2k1, a cogeneratlon faclllty produces electric energy and forms of useful thermal
energy (such as heat or steam) used for industrlal, commerclal, heating, or cooling purposeq through the sequential
use of energy. Pursuant to I I C.F.R. 5 292.202(s), "sequential use" of energy means the following: ( l ) for a topping-
cycle cogeneration facility, the use of reject heat from a power production process in sufficient amounts in a
thermal application or process to conform to the requirements of the operatlng standard contained in l8 C.F.R. 5
292.205(o\ or (2) for a bottoming-cycle cogeneration facility, the use of at least some reject heat frorn a thermal
application or process for power production.
1Or What type(s) of cogeneration technology does the facility represent? (check all that apply)
;- I Topping-cycle cogeneratlon l-'] Bottoming-cycle cogeneration
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10b To help demonstrate the sequential operation of the cogeneration process, and to support compliance with
other reguirements such as the operatlng and efflclency standards, lnclude with your flling a mass and heat
balance diagram depicting average annual operatlng condltlons. This dlagnm must lnclude certain iterns and
meet certain requirements, as described below, You must check next to the description of each requirement
below to certify that you have complled with these requirements,
Check to certify
compliance wlth
indicated requirement ent
Diagram must show orientatlon within system piplng and/or ducts of all prime rnovers,
heat recovery steam generators, boilers, electric Aeneratots, and condensers (as
applicable), as wellas any other primary equlpment relevant to the cogeneration
process.
Any average annual values required to be reported in liner '10b, 1 2a, I fa, 1 3b, I 3d, l 3i
14a, 15b, t 5d and/or 15f must be computed over the anticipated hours of operation.
Diagram must specl$ all fuel inputs by fuel type and average annual rate in Btu/h. Fuel
for supplementary flring should be specified separately and clearly labeled, All
speclfications offuel lnputs should use lower heatlng values.
Diagram must speclfy average grois electric output in kW or MW for each generator.
Diagram must specifu average mechanicaloutput (that is. any mechanlcal energy taken
off of the shaft of the prime movers for purposes not dlrectly related to electrlc power
generation) in horsepower, if any. Typlcally, a cogeneration facillty has no mechanical
output.
At each point for which working fluid flow conditions are required to be speclfled (see
below), such flow condition data must include nrass flow rate (ln lb/h or kg/s),
temperature (in "F, R,'C or K), absolute pressur€ (in psia cr kPa) and enthalpy (ln Btuilb
or U/kg), Exception: For systems where the working lluldls llqutd only (no vapor at any
point ln the cycle) arrd where the type of llqulC and speciiic heat of that liquld are clearly
indicated on thc dlagram or in the Miscellaneous se(tion ltarting on pa$e 19, only mass
flow rate and temperature (not pressute and enthalpy) need be specified. For reference,
specific heat at standard condltions for pure liquid water ls approxlmately 1.002 8tu/
(lb*R) or 4.1 95 kJl(kg*K).
Diagram must specify working fluid flow conditions at input to and output from each
steam turbine or other expansion turbine or back-pressure turbine.
Diagram must specify working fluid flow conditions at delivery to and return from each
thermal application.
Diagram must specify working fluid flow conditions at make-up water inputs.
lnformation Required for Cogeneration Facility
lf you indicated in llne 1 k that you are seeking qualifylng cogeneration faclllty status for your facllity, then you must respond
to the items on 11 13. Otherwise,1't 'r 3.
case l-:18-cv-00236-REB Document 4-10 Filed 06/25lj.g page !2 oI L9
FERC Form 556 Page 12 - Cogeneration Facllities
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EPAct 2005 cogeneration facilities: The Energy Policy Act of 2005 (EPAct 2005) established a new section 2 t 0(n) of
the Publlc utlllty Regulatory Policies Act of I978 (PURPA), r 6 USC 824a-3(n), with additionalrequirements for any
qualiffing cogeneration facility that (l ) is seeking to sell electric energy pursuant to section 210 of PURPA and (2)
was either not a cogeneration facility on August 8,2005, or had not filed a self-certlfication or application for
Commisslon certificatlon of QF status on or before February 1, 2006. These requirements were lmplemented by the
Commisslon in 18 C.F.R, 5 292.205(d). Complete the lines below, carelully following the instructiont to demonstrate
whether these additional requirements apply to your cogeneration facillty and, if so, whether your faclllty complies
with such requlrements,
I 1a Was your facllity operating as a quallfuing cogeneration facility on or before August 8, 2005? Yes, 1 No i i
l lb Was the initialfiling seeking certification of yourfacllity (whether a notice of self-certificatlon or an application
for Commission ceftification) flled on or before February 1,20067 Yes No
lf the answer to either line I 'l a or I I b is Yes, then contlnue at line I lc below, Otherulse, lf the answers to both llnes
1 1a and I I b are No, skip to line 1 1e below,
llc Withrespecttothedesignandoperationofthefacillty,haveanychangesbeenimplementedonorafter
February 2, 2006 that affect general plant operation, affect use ofthermal output, and/or lncrease net power
production capacity from the plant's capacity on February 1,20067
i- 1 Yes (continue at line I I d below)
No, Your facility is not 5ubJect to the requirements of l8 C.F,R. $ 292.205(d) at this tlme. However, it may be
I i subJect to to these requlrements in the future if changes are made to the facillty. At such time, the applicant
would need to recertiry the facllity to determine eflgiblllty. Skip lines 1 1d through 1 lj.
Ild Doestheappllcantcontendthatthechangesidentifiedinlinellcarenotsoslgnificantastomakethefacllity
a 'new" cogeneration facility that would be subject to the l8 C.F.R, S 292.205(d) cogeneration requlrements?
Yes. Provlde in the Miscellaneous section starting on page 19 a description of any relevant changes made to
i* I the faclllty (lncluding the purpose of the changes) and a discussion of why the facility should not be
consldered a "new" cogeneration facility in light of these changes. Sklp lines 1 1e through I lj.
No. Applicant stipulates to the fact that it is a "new" cogeneratlon facility (for purposes of determlning the,-l applicabllityoftherequirementsof 18C.F.R.5292,205(d)) byvlrtueofmodlficationstothefacilitythatwere
initiated on or after Feb ruaty 2,2006. Continue below at line I 1 e^
tle Will electricenergyfromthefacilitybesoldpursuanttosection2l0ofPURPA?
, , Yes. The facility is an EPAct 2005 cogeneration facility. You must demonstrate compliance with 18 C.F.R. 5: I 292.zos(d,{2) bycontinuingat line llf below,
No. Applicant certifies that energy will not be sold pursuant to section 210 of PURPA. Applicant also certifles
its understanding that it must recertifr lts facllity ln order to detennine compliance wlth the requlrements of
l8 C.F.B. S 292.205(dl before selling energy pursuant to sectlon 21 0 of PURPA in the future. Skip lines 1 1 f
through l1J,
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1 lf ls the net power production capacity of your cogeneration facility, as indicated in line 79 above, less than or
equal to 5,000 kW?
Yes, the net power production capacity is less than or equal to 5,000 kw. 18 c.F.R. 5 292.205(dx4) provides a
rebuttable presumption that cogeneration facilitles of 5,000 kW a nd smaller capacity comply with the
requirements for fundamental use of the facility's energy output in I 8 C.F.R. S 292.205(dX2). Applicant
certifies lts understandlng that, shoutd the power production capacity of the facility increase above 5,000
kW, then the facllity must be recertlfled to (among other thlngs) demonstrate compliance wlth 18 C.F.R. 5
292.205(dX2). Skip llnes I 1g through I I j,
No, the net pow€, production capacity is greater than 5,000 kW, Dernonstrate compliance with the
requirements for fundamental use of the facility's energy output in l8 C.F.R. 5 292.205(dX2) by continuing on
the next page at line I 1 g.
case 1:1-8-cv-00236-REB Document 4-10 Filed 06/25118 page 13 of 19
FERC Form 556 Page l3 - Cogeneration Facilities
Lines 1 I g through t 1k below guide the applicant through the process of demonstrating compliance with the
requlrements for "fundamental use" of the facllity's energy output. 18 C.f.R. I 292.205(dX2). Only respond to the
lines on thls page if the lnstructions on the previous page direct you to do so. Otherwise, skip this page.
18 C.F.R. S 292.205(d)(2) requires that the electrical, thermal. chemlcal and mechaniral output of an fPAct 2005
cogeneratiotr facility is used fundamentally for industrial, conrmercial, residentlal or institutional purposes and is
not lntended fundamentally for sale to an electric utility, taking into accounttechnological, efficiency, economic,
and variable thermal energy requirements, as well as state laws appllcable to sales of electric energy from a
quallfylng facillty to lts hort facility. lf you were directed on the prevlous page to respond to the items on this page,
then your facility is an EPAct 2005 cogeneration facility that is subject to this "fundamental use'requirement,
The Commlsslon's regulations provide a two-pronged approach to demonstrating compliance with the
requirements for fundamental ure of the facility's energy output, First, the Commission has established in 18 C.F.R.
I 292.205(dX3) a "fundamental use test' that can be used to demonstrate compliance with 18 C.F,R. S 292.205(dX2).
Under the fundamental use test, a facility is considered to comply with I S C.F.R, S 292,205(dX2) lf at least 50 percent
of the facillty's total annual energy output (including electrical. thermal, chemical and mechanical energy output) is
used for industrial, commercial, residential or institutlonal purposes.
Second, an appllcant for a facility that does not pass the fundamental use test may provlde a narrative explanation
of and support for its contentlon that the facility nonetheless meets the requlrement that the electrical, thermal,
chemical arrd mechanical output of an EPAct 2005 cogeneration facility is used fundamentally for lndustrlal,
commercial, residential or instltutional purposes and is not intended fundarnentally for sale to an electric utillty,
taking into account technological, efficiency, economic, and variable thermal energy requlrements, as well as state
laws appllcable to sales of electric energy from a qualifying facility to its host faclllty,
Complete lines 119 lhrough 11j below to determlne csmpliance with the fundamental use test in l8 C.F.R. $
?92.205(dX3). Completelinesl'lgthroughlljevenifyoudonotintendtorelyuponthefundamentalusetestto
demonstrote compliance with I I C.F.R. 5 292.205(d)(2).
I lg Amount of electrical, thermal, chemical and mechanical energy output (net of
generation plant losses and parasitic loads) expected to be used annually for lndustrlal,
commercial. residentlal or institutlonal and not sold to an electric
energy expected to beandlIh Totalamountof
sold to an electrlc NI
I I i Percentage of total annual energy output expected to be used for lndustrlal,
comrnerclal, residential or instltutional purposes and not sold to a utility
= ,l00 * I I /(1t + 11h)o/o
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1 lf ls the response in line I l i greater than or equal to 50 percent?
Yes. Yourfacilitycomplieswith 18C.F.R,$292.205(d)(2) byvirtueof passingthefundamental usetest
provided ln l8 C.F.R. S 292,205(dX3), Applicant certifies its understanding that, if it ir to rely upon passing
i -1 the fundamental use test as a basis for complying with 1B C.f .R. 5 292.205(dX2), then the facility must
cornply wlth the fundamental use test both in the 12-month period beginning vlith the date the fucility first
produces electric energy, and in all subsequent ciilendar years.
No. Your hcility does not pass the fundamental use test. lnstead, you must provide in the Miscellaneous
section starting on page I9 a narrative explanation of and support for why your facility meets the
requlrement that the electrical, thermal, chemical and mechanlcaloutput of an EPAct 2005 cogeneratlon
facility is used fundamentally for industrial, commercial, residentlal or lnstitutlonal purposes and is not
intended fundamentally for sale to an electric utility, taking lnto ac<ount technological, efficiency, economic,
and variable thermal energy requirements, as well as state laws applicable to sales of electric energy from a
QF to its host facility, Applicants providing a narrative explanation of why their facility should be found to
comply with 18 C.F.R. 5 292.205(dX2) in spite of non-compliance with the fundamental use test may want to
review paragraphs 47 through 6'l of Order No. 671 (accesslble from the Commlssion's QF website at
www.ferc.gov/QF), whlch provide discussion of the facts and circurnstances that may support their
explanation. Applicant should also note that the percentage reported above wlll establish the standard that
that facllity mu:t comply with, both for the lz-month perlod beglnnlng with the date the facillty flrst
produces electric energy, and ln all subsequent calendar years, See Order No. 67 I at paragraph 5 l. As such,
the applicant should make sure that it reports approprlate valuel on llnes 1 I g and 1 I h above to serve as the
relevant annual standard, taking into account expected variations in production conditlons,
Case 1:18-cv-00236-REB Document 4-10 Filed 06/251L8 Page 14 of 19
FERC Form 556 Page l4 - Topping-Cycle Cogeneration tacilities
lnformation Required for Topping-Cycle Cogeneration Facility
lf you indicated ln llne 10a that your facility represents topping-cycle cogeneration technology, then you must respond to
the items on I4and 15.t4 and '15.
The thermal energy output of a topping-cycle cogeneration facility is the net energy made available to an industrial
or commercial process or used in a heatlng or cooling appllcatlon. Pursuant to sections 292.2021c1, (d) and (h) of the
Commission's regulations (18 C.F.R. 95 292.202(c), (d) and (h)), the thermal energy output of a quallling topping-
cycle cogeneration facllity must be useful. ln connection with this requirement, descrlbe the thermal output of the
topping-cycle cogeneration facility by responding to lines 1 2a and l2b below.
l2a ldentlfy and describe each thermal host, and specify the annual average rate of thermal output made available
to each host for each use. For hosts wlth multiple uses of thermal output, provide the data for each use rn
seporate rows' Average annual rate of
thermal output
attributable to use (net of
Name of entity fthermal host) Thermal host's relationshlp to faclllty; heat contalned ln process
taking thermal output Thermal host's use of thermal output return or make-up water)
therrnal host's relat IOr)
Selecr thermal host's r.rse of tlrernral Btu/h
thermal host's relationsh to
2t
thermal host's use of thennal Btu/h
thermal host's relatlonshi t0
therrnal Irost's use of thernral Btu/h
3)
thermal host's to
thelnal host's use of thernral ou t Btu/h
thermal host's relationshi to
thermal hosi's ttse of rhermal Btu/h
)
thermai host's relationshr6, to facil
lect thermal host's use o[ thenr'ai ou
r)
;.-J Check here and continue in the Miscellaneous section starting on page 19 lf additional space Is needed
o
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a.a:)12b Demonstration of usefulness of thermal outputl At a minimum, provlde a brlef description of each use of the
thermal output identlfied above. ln :ome cases, thls brlef descrlption is sufficient to demonstrate usefulness.
However, if your facility's use of thermal output is not common, and/or if the usefulness of such thermaloutput is
not reasonably clear, then you must provide additional details as necessary to demonstrate usefulness. Your
application may be rejected and/or additional information may be required if an insufficient showing of usefulness
is made. (Exception: lf you have previously received a Commisslon certification approving a specific use of thermal
output related to the instant facility, then you need only provide a brlefdescription ofthat use and a reference by
date and docket number to the order certifying your facility with the indlcated use. Such exemption may not be
used if any change creates a material deviation from the prevlously authorized use.) lf additlonal space is needed,
continue in the Miscellaneous sectlon starting on page 19.
case 1:18-cv-00236-REB Document 4-10 Filed 06/2511g page 15 of 19
FERC Form 556 Page l5-Toppl Cogeneratlon Facilities
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Applicants for facilities representing topping-cycle technology must demonstrate compliance with the topping-
cycle operating standard and, lf appllcable, efflclency standard. Sectlon 292,205(aX1) of the Commlssion's
regulations (18 C,F.R, S 292.205(aX1)) establishes the operatlng standard for topplng-cycle cogeneration faclllties:
the useful thermal energy output must be no less than 5 percent of the total energy output. Section 292.205(aX2)
(18 C.F.R. $ 292.205(aX2)) establishes the efficlency rtandard for topping"cycle cogeneration facilitles for which
installation commenced on or after March 13, 19801 the useful power output of the faclllty plus one-half the useful
therrnal energy output must (A) be no less than 42.5 percent ofthe total energy input of natural gas and oil to the
facility; and (8) lf the useful thermal energy output ls less than I5 percent of the total energy output of the facility,
be no less than 45 percent of the total energy input of natural gas and oil to the faclllty. To demonstrate
compllance wlth the topping-cycle operating and/or efflclency standards, or to demonstrate that your facility lt
exempt from the efficiency standard based on the date that lnstallation commenced, respond to lines l3a through
l ll below.
lf you indicated in line l0a that your facility represents both topping-cycle and bottoming-cycle cogeneration
technology, then respond to lines I 3a through 1 3l below consldering only the energy inputs and outputs
attrlbutable to the topping-cycle portion of your facllity. Your mass and heat balance diagram must make clear
which mass and energy flow values and sy5tem components are for which portion (topping or bottoming) of the
Iatlon
t3a lndicatetheannual averagerateofuseful thermal energyoutputmadeavailable
heat contalned in condensate return ornet ofto the water
t3b lndicate the annual average rate ofnet electrical energy output
kil/
13c Multiply line l3b by 3,41 2 to convert from kW to Btu/h
0 Blulh
1 3d lndicate the annual average rate
of the shaft of a prlme mover for purposes not directly related to power production
offnical energy output
zero)(this value is
'l3d by 2,544 to convert from hp to Btulh13e Multiply
I 3f lndicate the annual average rate energy lnput from natural gas
Btu/h
l3E Topplng-cycleoperating value= 100r 13a/(13a+ 13c+ 13e)
C9o
t3h Topplng-cycleefficiencyvalue= 100i(0.5rt3a+ l3c+ 13e) / 13{
0 o/a
l3l Compllance with operating standard: ls the operating value shown ln llne 139 greater than or equal to 5%?
i_- lYes (complies wlth operating standard) !- l No (does not comply with operatlng standard)
t 3i Did installatlon of the facllity ln lts current form commence on or after March t 3, 1980?
. Yes. Your facility is subject to the efficiency requlrements of l8 C.F.R. $ 292.205(aX2). Demonstrate| ' compliance with the efflciency requirement by responding to line l3k or I3l. as applicable, below.
r , No. Yourfacilitylsexemptfromtheefficiencystandard. Skiplines l3kand l3l.
t3k Compliancewithefficiencystandard(forlowoperatingvalue): lftheoperatingvalueshowninlinel39isless
than 1 570, then indlcate below whether the efflciency value shown in line l3h greater than or equal to 45%:
Yes (complies with efficiency standard) No (doel not comply with efficiency standard)
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! 3l Compllance with efficiency standard (for high operating value): lf the operating value shown in line 1 39 is
greater than or equal to l5%, then indicate below whether the efficiency value shown in line I lh is greater than or
equal to 42.5Y0:
Yes (complies with efflcienry standard) No (does not comply with efficiency standard)
case 1:19-cv-00236-REB Document 4-10 Fired 06/2511g page 16 0f 1g
FERC Form 555 Page 16 - Bottoming{ycle Cogeneratlon Facilities
I nformation Req u i red for Bottom i n g-cycle co gene rati o n Facil ity
ln llne 1 0a that your facillty represents bottomlng-<ycle cogeneration technology, then you must respond
l6and l7 l6and 17,
lf you indicated
to the ltems on
tpThe thermal energy output of a bottoming-cycle cogeneration facillty ls the energy related to the process(es) from
which at least some of the reJect heat ls then used for power production. Pursuant to sections 292.202(c) and (e) of
the Commission's regulations ( l8 C.F.R, I292.202(cl and (e)) , the thermal energy output of a qualifying bottoming-
cycle cogeneration facility must be useful. ln connection with this requirement, describe the process(es) from which
at least some of the reject heat is used for power productlon by responding to lines l4a and l4b below.
I4a ldentifiianddescribeeachthermalhostandeachbottoming-cyclecogeneratlonprocessengagedinbyeach
host. For hosts wlth multlple bottoming-cych cogeneration procelset provlde the data for each process in
seporate rows'
Has the energy lnputto
Name of entlty (thermal host) the thermal host been
performing the process from augrnented for purposes
whlch at least some of the of lncreasing power
reJect heat is used for power Thermal host's relationship to facllity; production capacity?production Thermal host's process type (if Yet describe on p. I 9)
therrnal host's relatron to far)
thermal host's
Yes;* i No L j
I thermal host's relationsh to facility2\
thermal host's
Yesl'' No'- I
thernral host's to facilil)
thermal host's prxe s:
Yesl; No:1
,' -l €heck here and continue in the Miscellaneous sectlon starting on page 1 9 lf additlonal space is needed
C,
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l4b Denronstrationofusefulnessofthermal output: Ataminimum,provldeabriefdescriptionofeachprocers
identlfied above. ln some caset this brlef description is sufflclent to demonstrate usefulness. However, if your
facllity's process is not common, and/or if the usefulness of such thermal output ls not reasonably clear, then you
must provide addltlonal details as necessary to demonstrate usefulness. Your appllcation may be rejected and/or
additional informatlon may be required lf an insufficient showing of usefulness is made. (Exceptlon: lf you have
prevlously recelved a Commlssion certification approvlng a specific bottomlng-cycle process related to the instant
facilitn then you need only provlde a brlefdescriptlon ofthat process and a reference by date and docket number
to the order certlfuing your facility with the indicated process. Such exemption may not be used if any materlal
changes to the process have been made.) lf additional space ls needed, continue in the Miscellaneous section
starting on page 19.
case 1:18-cv-00236-REB Document 4-10 Filed 06/2511g page L7 ot tg
FERC Form 556 Page 17 - Bottoming-Cycle Cogeneration Facllities
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Applicants for facilities representing bottoming-cycle technology and for which installation comrnenced on or after
March I 3, 1990 must demonstrate compliance with the bottoming-cycle efficiency standards. Section 292,205(b) of
the Commlssion's regulations (18 C.F.R. S 292,205(b)) establishes the efficiency standard for bottoming-cycle
cogeneration facilities: the useful power output of the facility must be no less than 45 percent of the energy input
of natural gas and oil for supplementary firing. To demonstrate compliance with the bottomlng-cycle efflciency
standard (if applicable), or to demonstrate that your facility is exempt from thl5 standard based on the date that
lnstallation of the facility began, respond to lines I 5a through 15h below.
lf you lndicated in line 10a that yout larillly represents bofh topplng<ycle ancl bottomlng-cycle cogeneration
technology, then respond to lines l5a through I 5h below con:iderlng only the energy inputr and outputs
attributable to the bottoming-cycle portion of your facility, Your mass and heat balance diagram must rnake clear
which mass and energy flow values and system components are for which portion of the cogeneration system
(topping or bottoming).
l5a DldlnstallationofthefacilitylnitscurrentformcommenceonorafterMarchl3, 1980?
, , Yes. Your facility is subject to the efficlency requirement of 18 C.F.fl. S 292.205(b). Demonstrate compliance
' - with the efflciency requlrement by responding to llnes 15b through 15h below.
i- 'l No. Your facility is exempt from the efficiency standard. Skip the rest of page 17,
1 5b lndicate the annual average rate of net electrical energy output
k\ /
l5c Multlply line l5b by 3,412 to convert from kW to Btu/tr t 8tu/h
I 5d lndlcate the annual average rate of mechanical energy output taken directly off
of the shaft of a prime moverfor purposes not directly related to power production
(this value is usually zero)hp
15e Multiplyline 15d by2,544to convertfrom hptoBtu/h t Btu/h
t 5f lndicate the annual average rate of supplementary energy input from natural gas
or oil 8ru/h
159 Bottornlng"cycle efflciency value = 100 * (l5c + 15e) / t5f
AVo
15h Compliance with efficiency standard: lndicate below whether the efflclency value shown in line 1 59 is greater
than or equal to 45%:
ir-- Yes (complies with efflclency standard) [_i No (does not comply wlth efficiency standard)
case 1:1-8-cv-00236-REB Document 4-10 Filed 06/25lj.8 page j-g of 19
FERC Form 556 Page 18 - All Facilities
Certificate of Completeness, Accuracy and Authority
Applicant must certlff compliance with and understanding of flllng requirements by checking next to each item below and
signingatthebottomofthissection. FormswithlncompleteCertlflcatesofCompleteness,AccuracyandAuthoritywtll be
rejected by the Secretary of the Commission.
Signer identifled below certifles the following: (check all items and applicable subltems)
He or she has read the flling, including any information contained in any attached documents, such as cogeneration
[l mass and heat balance dlagraml and any information contained in the Miscellaneous section starting on page 19, and
knows its contents.
m He or she has provlded all of the required inforrnation for certiflcation, and the provlded lnformation ls true as stated,
to the best of hls or her knowledge and bellef.
He or she possess full power and authorlty to sign the flling; as required by Rule 2005(aX3) of the Commission's Rules of
Practice and Procedure (18 C.F.R.5 385.2005(aX3)), he or she is one of the following: (check one)
I The person on whose behalf the filing is rnade
I Anofficerofthecorporation,trust,assoclatlon,orotherorganlzedgrouponbehalfofwhichthelllingismade
- An officer, agent, or employe of the governmental authority, agency, or instrumentality on behalf of which theu filing is made
^, A representative quallfied to practice before the Commission under Rule 2101 of the Commlssion's Rules of6 PractlceandProcedure(1SC.F,R,5385.2101)andwhopossessesauthorltytosign
a He or she has revlewed all automatic calculations and agrees with their results, unless otherwise noted ln the
Miscellaneous section starting on page 19.
He or she has provided a copy of this Form 556 and all attachments to the utllltles wlth which the facllity wlll
interconne(t and transact (see lines 4a through 4d), as well as to the regulatory authorities of the rtates in which the
facility and those utillties reride. See the Required Notice to Public Utilitles and State Regulatory Authorities section on
page 3 for more information.
x
Provideyoursignature,addressandsignaturedatebelow. Rule2005(c) oftheCommission'sRulesofPracticeand
Procedure (18 C.f.R. 5 385.2005(c)) provides that per$ons flling thelr documents electronically may use typed characters
representing hls or her name to sign the filed documents. A person filing thls document electronically should slgn (by
typlng his or her name) in the space provided below.
Your Signature Your address
515 N. 27th Street
Boise, ID 837C2
Date
Audit Notes
Commission Staff Use Only:n
case 1:18-cv-00236-REB Document 4-10 Filed 06/25119 page 19 of j-9
FERC Form 556 Page l9 - All Facilitles
Miscellaneous
Use thls space to provlde any information for which there war not sufflclent space in the previous sectlons of the form to
provide. For each such item of lnformatlon clearly ldentlfy the llne number thot the lnformotion belongs to. You may also use
this space to provlde any addltlonal lnformation you believe is relevant to the certiflcation of your facility.
Your response below ls not limited to one page. Additlonal page(s) wlll autornatically be inserted into thls form lf the
length of your response exceeds the space on this page. Use as many pages as you require.
the original Form 556 incorrectly listed the latitude and longitude coordirtates in
Par-'agraph 3c as West 114,500 North 42.206. The correct latitude and longitude
coordinates are West 114 .6C3 North 42.192.
case 1:18-cv-00236-REB Document 4-11 Filed 06/25119 page 1 of 19
FEDERAL ENERGY REGULAIORY COMMISSION oMB contror r re02-007s
WASH|NGroN,DcExpiration06ls0/2a19
Fo rm 5 5 6 ;:Jl[],::i::H:X]:,?#illil,fo"statusfora sma'Power
General
Questions about completing thls form should be sentto l:otnrir_5(rg,furrgov. lnformation about the Commission's QF
plogram, answers to frequently asked questlons about QF requlrements or completing this form, and contact lnformation for
QF program staffare avallable at the €ommlssion's QF website, ryvyw.{efi.ge.V{)|. The Commirslon's QF website also
provides links to the Commission's QF regulations (1 I C.F.R. 5 1 31.80 and Paft2921, as well as other statutes and orders
pertaining to the Cornmlssion's QF program.
Who Must File
Any applicant seeking QF status or recertlflcatlon of QF status for a generating facility wlth a net power production capacity
(as determined in lines 7a through 79 below) greater than 1000 kW must flle a self-ceftlficatlon or an appllcation for
Commission certificatlon of QF status, whlch lncludes a properly completed Form 556, Any appllcant seeking QF status for a
generatlng facillty with a net power production capacity 1000 kW or less is exempt from the certlflcatlon requlrement, and is
therefore not requlred to complete or lile a Fo.m 556. See l8 C.F.R. 5 292.203.
How to Complete the Form 556
This form is intended to be completed by responding to the ltems in the order they are presented. accordlng to the
instructions given. lf you need to back-track you may need to clear certain responser before you will be allowed to change
other responses made previously in the form. lf you experlence problems, click on the nearest help button ($ ) for
assistance, or contact Commisslon staff at f ffI0.lr6sl{sl<.g{)J..
Certain lines in thls form will be automatically calculated based on responses to previous lines, with the relevant formulas
shown. Youmustrespondtoall ofthepreviouslineswithlnasectionbeforetheresultsofanautomaticallycalculatedfield
will be displayed. lf you dlsagree with the results of any automatic calculation on this form, contact Commission staff at
Lirrrrl556l(Jlf.et!".iyov to discuss the discrepancy before filing.
You must complete all lines in this form unless lnstructed otherwlse. Do not alter this form or save this form in a different
format. lncomplete or altered form$ or forms sayed ln formats other than PDF, will be rejected.
How to File a Completed Form 556
Applicants are requlred to file their Form 556 electronically through the Commlssion's eFlling website (see lnstructions on
page 2). By filing electronically, you wlll reduce your flling burden, save paper resources, save postage or courier charges,
help keep Commisslon expenses to a mlnlmum, and recelve a much faster conflrmatlon (via an emall contalnlng the docket
number assigned to your facllity) that the Commission has received your filing.
lf you are simultaneously llllng both a waiver request and a Form 556 as part of an appllcation for Commission certlflcation,
see the "Waiver Requests" sectlon on page 3 for more informatlon on how to flle.
Paperwork Reduction Act Notice
Thls form ls approved by the Offlce of Management and Budget. Compliance wlth the information requirements establlshed
by the FERC Form No. 556 is required to obtain or malntain status as a QF. See l8 C.F,R. E 131.80 and Part 292. An agency may
not conduct or sponsor, and a person ls not required to respond to, a collection of information unless it dlsplays a currently
valid OM8 control number. The estimated burden for completing the FERC Form No. 556, including gathering and reporting
lnformation, is as follows: 3 hours for self-certiflcatlon of a small power production facility, 8 hours for self-certiflcations of a
cogeneration facility,6 hours for an application for Commission certification of a small power production facility, and 50 hours
for an application for Commission certification of a cogeneration facility, Send commentr regarding this burden estimate or
any aspect of this collection of information, including suggestions for reducing this burden, to the following: lnformation
Clearance Officer, Office of the Executive Director (ED-32), Federal Energy Regulatory Commlsslon, 888 First Street N,E,,
Washlngton. OC20426 (l);rl,,r( l,lir;rrlrBferc,tqry); and DeskOfficer for FERC. Office of lnformation and Regulatory Affalrs,
Office of Management and Budget, Washlngton, DC 20503 (oir,r,..subntir-i91qs-o-r1h.eop.gov), lnclude the Control No.
I 902-0075 ln any correspondence.
Case 1:L8-cv-00236-REB Document 4-11 Filed 06/25li.8 page 2 ot Lg
FERC Form 556 Page 2 - lnstructions
Electronic Filing (eFiling)
Io electronically file your Form 556, vlslt the Comrnission's QF webslte at www.fer<.gov/QF and click the eFiling link.
lf you are eFiling your first document you will need to register with your name, emall address, maillng address, and phone
number, lf you are registering on behalf of an employer, then you wlll also need to provide the employer name, alternate
contact name, alt€rnate contact phone number and and alternate contact email.
Once you are registered, log in to eFlllng wlth your reglstered emall address and the password that you created at
registratlon. Follow the lnstructions. When prompted, select one of the following QF-related flllng types, as appropriate,
from the Electrlc or General filing category,
Filing category Fillng Type as listed in eFiling Descrlption
Electrlc
(Fee) Application for Commlssion Cert, as Cogeneration QF
Use to submlt an appllcatlon for
Commission certifi catlon or
Comrnission recertiffcation of a
cogeneratlon facilig as a QF.
(Fee) Application for Commission Cert. as 5mall Power QF
Use to submit an application for
Commlssion certlfl catlon or
Commission recertlflcation of a
small power production facillty as a
QF.
Self-Certification Notlce (QF, EG, FC)
Use to submlt a notlce of self-
certification of your facllity
(cogeneratlon or small power
productlon) as a QF.
5elf-Recertification of Qualifyin g Facility (QF)
Use to submlt a notlce of self-
recertlfi cation of your facility
(cogeneration or small power
production) as a QF.
Supplemental lnformation or Request
Use to correct or supplement a
Form 556 that was submitted with
errors or omlssiont or for which
Com mission staff has requested
additlonal information, Do not use
this filing type to report new
changes to a facility or its
ownership; rather, use a self-
recertlfl catlon or Commission
recertification to report such
changes.
General (Fee) Petition for Declaratory Order (not under FPA Part I )
Use to subrnit a petition for
declaratory order granting a waiver
of Commission QF regulations
pursuant to 18 C.F.R. SS 292.204(a)
(3) andlor 292.205(c). A Form 556 is
not required for a petition for
declaratory order unless
Commission recertlfl catlon ls being
requested as part of the petition.
You will be prompted to submit your flllng fee, if applicable, during the electronic submission process. Fillng fees can be paid
via electronic bank account debit or credit card,
During the eFiling process, you will be prompted to select your file(s) for upload from your computer.
case 1:18-cv-00236-REB Document 4-11 Filed 06/25ii-g page 3 of 19
FERC Form 556 Page 3 - lnstructions
Filing Fee
No filing fee is required if you are submitting a selFcertification or self-recertlflcation of your facility as a QF pursuant to I 8
C.F.R. $ 292.207(a),
A flling fee ls requlred if you are flllng either of the followlng:
(l ) an application for Commission certification or recertification of your facility as a QF pursuant to 18 C,F.R. $ 292.207(b), or
(2) a petition for declaratory order grantlng waiver pursuant to 18 C.F.R. 55 292.20a(aX3) and/or 292.205(c).
The current fees for applications for Commission certiflcations and petltlons for declaratory order can be found by visiting the
Commisslon's QF website at Ur_ryrryler_L.SS-y/_Q[ and clicking the Fee Schedule link.
You will be prompted to submit your flling fee, if applicable, during the electronic filing process described on page 2.
Required Notice to Utilities and State Regulatory Authorities
Pursuant to 1 8 C.F.R. 5 292.207(aXii), you must provlde a copy of your self-certification or request for Commlssion certlfication
to the utllities with which the facility will interconnect and/or transact, as well as to the State regulatory authorlties of the
states in which your facility and those utilities reside. Link to informatlon about the regulatory authorities in various states
can be found by vislting the Commlssion's QF website at WlgwJerc,SqdQf and clicking the Notice Requirements link.
What to Expect From the Commission After You File
An applicant filing a Form 556 electronically will receive an email message acknowledging recelpt of the flllng and showing
the docket number assigned to the filing. Such email is typlcally sent within one business day, but may be delayed pending
confirmation by the Secretary of the Commission of the contents of the filing.
An appllcant submittlng a self-certification of QF status should expect to recelve no documents from the Commisslon, other
than the electronic acknowledgement of recelpt described above. Consistent with its name, a self-ce(lficatlon ls a
certification by the applicant itse//that the facllity meets the relevant requlrements for QF status, and does not involve a
determination by the Commission as to the status of the facility. An acknowledgement of receipt of a self-certificatlon, in
paftlculal, does not represent a determination by the Commission with regard to the QF status of the facility. An appllcant
self-certlfylng may, however, receive a rdection, revocatlon or deficiency letter if its appllcation is found, during periodic
compliance reviews, not to comply with the relevant requlrements.
An applicant submitting a request for Commlssion certiflcation will recelve an order either granting or denying certlficatlon of
QF status, or a letter requesting additional information or rejecting the application. Pursuant to 18 C.F.R. 5 292.207(bX3), the
Commlsslon must act on an application for Commisslon ceftlfication within 90 days of the later of the filing date of the
application or the filing date of a supplement, amendment or other change to the application.
Waiver Requests
18 C.F.R. S 292.20a(aX3) allows an applicant to request a waiver to modliT the method of calculation pursuant to 'lS C.F.R. S
292.204(al2'ltodetermineiftwofacilitiesareconsideredtobelocatedatthesamesite,forgoodcause, 18C.F.R,S292.205(c)
allows an applicant to request waiver of the requlrements of I8 C.F.R, SS 292.205(a)and (b) for operatlng and ef{iciency upon
a showing that the facility wlll produce slgnificant energy ravings. A request for walver of these requirements must be
submitted as a petition for declaratory order, with the approprlate flllng fee for a petitlon for declaratory order. Applicants
requesting Commission recertlfication as part of a request for waiver of one of these requirements should electronically
submit thelr completed Form 556 along with their petition for declaratory order, rathel than filing thelr Form 556 as a
separate request for Commission recertiflcation. Only the filing fee for the petition for declaratory order must be paid to
cover both the waiver request and the request for recertification if such requestsore mode simultaneously.
18 C,F.R. g 292.201(dX2) allows an appllcant to request a waiver of the Folm 556 filing reguirements, for good cause.
Applicants filing a petltion for declaratory order requestlng a walver under 18 C.F.R, 5 292.203{dX2) do not need to complete
or submit a Form 556 with their petition.
Case 1-:18-cv-00236-REB Document 4-11 Filed 06i25/18 Page 4 ol L9
FERC Form 556 Page 4 - lnitructlons
Geog ra phic Coord inates
lf a street address does not exist for your facility, then line 3c of the Form 556 requires you to report your faclllty's geographic
coordlnates (latitude and longitude). Geographic coordlnates may be obtained from several dlfferent sources. You can flnd
links to online servlces that show latltude and longitude coordlnates on online maps by visitlng the Commlsslon's QF
webpage at w'*.,w.furr.!1o,;/Qi and clicking the Geoglaphic Coordinates llnk. You may also be able to obtain your geographlc
coordinates from a GPS device, Google Earth (available free at l-rrtp:11cl.y,tlt.gitogl-q t-otti,l, a property survey, various
engineering or constructlon drawlngs, a property deed, or a municlpal or county map showlng property lines.
Filing Privileged Data or Critical Energy lnfrastructure lnformation in a Form 556
The Cornmission's regulatlons provlde procedures for applicants to either (l ) request that any information submltted with a
Form 556 be glven privileged treatment because the information ls exempt from the mandatory public disclosure
requlrements of the Freedom of lnformatlon Act, 5 U.S.C, $ 552, and should be wlthheld from public disclosure; or (2) ldentlfy
any documents containing critical energy infrastructure information (CEll) as defined ln l8 C.F,R. 5 388.113 that should not be
made public.
lf you are seeking privileged treatment or CEll status for any data in your Form 556, then you must follow the procedures in 18
C.F.R^ 5 388.1 I2. See ryritw,lCl.c,g,clyil"r.clprl{ili1ig,:!uit!,:/frh,';r:*iiaspformore information.
Among other things (see l8 C.F.R. 5 388.1 I2 for other requirements), applicants seeking privileged treatment or CEll status for
data submitted in a Form 556 must prepare and file both (l ) a complete version of the Form 556 (containing the privileged
and/or CEll data), and (2) a publlc verslon of lhe Form 556 (with the privlleged and/or CEil data redacted). Appllcants
preparing and fillng these different verslons of their Form 555 must lndicate below the security designatlon of this version of
their document. lf you are not seeking privileged treatment or CEll status for any of your Form 556 data, then you should not
respond to any of the items on this page.
Non-Public Appllcant ls seeklng privileged treatment and/or CEll status for data contained ln the Form 556 lines
fJ lndlcated below. Thls non-public version of the applicant's Form 556 contains all data. including the data that is redacted
in the (separate) public verslon of the appllcant's Form 556.
Public (redactcd): Applicant is seeklng prlvlleged treatment and/or CEll status for data contained in the Form 556 lines
fl lndlcated below. Thls publlc version of the appllcants's Form 556 contains alldata exceot for data from the lines
indicated below, which has been redacted.
Prlvihgedl lndicate below which llnes of your form contaln data for which you are seeking prlvlleged treatment
Critical Energy lnfrartructure lnlormatlon (CElll: lndicate below which lines of your form contain data for which you are
seeking CEll status
The eFiling process described on page 2 will allow you to identify whlch versions of the electronic documents you submit are
publlc, privileged and/or CEll. The filenames for such documents should begin with 'Public",'Priv", or "CEll", as applicable, to
clearly indicate the security designation of the file. Both versions of the Form 556 should be unaltered PDF copies of the Form
556, as available for download from r,.,ww,tcr,1,gnvlQi1. To redact data from the public copy of the submittal, simply omlt the
relevant data from the Form. For numerical flelds, leave the redacted fields blank. For text flelds, complete ar much of the
fleld as possible, and replace the redacted portions of the field with the word 'REDACTED' in brackets. Be sure to ldentify
above g[ fields which contain data for which you are seeking non-publlc status.
The Commlsslon is not responsible for detectlng or correcting filer errors, including those errors related to security
designation. lf your documents contain sensltive information, make sure they are filed using the proper recurity designation.
case 1:18-cv-00236-REB Document 4-11- Filed 06i25/18 page 5 of 19
FEDERALENERGYREGULATORYCOMMISSION oMBControrrre02-007s
WASHINGTON,DCExplration06/10/)o1e
F o r m 5 5 6 ;,H[l,::::::;:[?J:,'#i:il,f'', ""u'for
a sma, Power
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tr Full nameofapplicant(legal entityonwhosebehalfqualltyingfacllltystatusissoughtforthisfacllity)
Pranklin Energy Storage Eour, LLC
I b Appllcant street addtess
515 N. 27th Street
I c City
Boise
1d State/province
ID
le Postal code
83702
1f Country (if not United States)lg Telephone number
(208 ) 938-7901
th Has the lnstant facility ever previously been certified as a QF? Yes fi llo [ ]
li lfyes,providethedocketnumberofthelastknownQFlllingpertainingtothisfacility: QFrr - 592 - 000
tJ Under whlch certlflcatlon process ls the applicant making this filing?
- Notlce of self<ertification ,- Applicatlon for Comrnission certification (requires fllinglal (see note belowl Ll fee; see "Filing Fee'section on page 3)
Note: a notice of self-certification is a notice by the applicant ltself that its facility compller wlth the requirements for
QF status. A notice of self-certlflcatlon does not establish a proceeding, and the Cornmlssion does not review a
noticeofself-certlficationtoverifucompliance.Seethe'WhattoExpectFrorntheCommissionAfterYouFile"
section on page 3 for more lnformation.
t k What type(s) of QF status ls the appllcant seeklng for lts faclllty? (check all that apply)
r! Qualifying small power production facillty status I Qualifying cogeneration facility status
1l What is the purpose and expected effectlve date(s) of thls flling?
l- | Original certiflcation; facility expected to be installed by and to begin operation on
| " J Change(s) to a previously certifled facility to be effective on
(ldentlfi type(s) of change(s) below, and descrlbe change(s] in the Mixellaneous section starting on page 19)
r'_1 Name change and/or other administrative change(s)
i .l Change in ownershiP
r-.1 Change(s) affecting plant equipment, fuel use, power production capacity and/or cogeneratlon thermal output
,x Supplement orcorrection to a previousfiling submltted on I /26/ L1
(describe the supplement or corre<tion in the Miscellaneous section starting on page 19)
l rn lf any of the followlng thtee statements ls true, check the box(es) that describe your situation and complete the forrn
to the extent posslble, explalnlng any special clrcurnstances in the Miscellaneous section startlng on page 19.
,- Tlre instant facility complies with the Commission's QF requlrements by virtue of a waiver of certaln regulationsu previously granted by the Commission in an order dated (specify any othcr relevant waiver
orders in the Miscellaneous section starting on page l9)
,.-"., The instant facility would comply with the Commission's QF requlrements lf a petitlon for waiver iubmiftedu concurrently with this application is granted
The instant facility complies with the Commission's regulations, but has special circumstancei, such as the
fl employment of unlque or lnnovatlve technologies not contemplated by the structure of thls form, that make
the demonstratlon of compllance vla this form difficult or impossible (descrlbe In Mlsc. section starting on p. l9)
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2a Name ofcontactperson
Peter Richardson
2b Telephone number
(208 ) 938-7 901
2c Which of the followlng descrlbes the contact person's relatlonshlp to the applicanl? (check one)
! Applicant (self) [ Emptoyee, owner or partner of applicant authorized to represent the applicant
! Employee of a company affiliated with the applicant authorlzed to represent the applicant on this matter
ffi Lawyer, consultant, or other representative authorized to represent the appllcant on thls matter
2d Company or organization name {lf applicant is an individual, check here and sklp to llne 2e) l.- I
Frankl-in Energy Storage Eour, LLC
le Street address (if same as Applir:anl, rher k lrere and skip to lirre 3a)ffi
2f City 2g State/piovince
2h Postal code 2l Country (if not l,lnited States)
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la Facility name
Erank.l-i-n Energy Storage Eour
3b Strcetaddress(ifastreetaddressdoesnotexistfortheiacility,checkhereandskiptoliire3c)ffi
3c 6eographlc coordinatei: lf you lndlcated that no street address exists for your facility by checking the box in line 3b,
thenyoumustspecifothelatitudeandlongltudecoordlnatesofthefacilityindegrees(tothreedecimal places). Use
the following formula to conveft to decimal degrees from degrees, rnlnutes and seconds: decimal degrees =
degrees + (minutes/60) + (seconds/3600). See the "Geographlc Coordinates" section on page 4 fot help, lf you
provlded a rtreet address for your facillty in line 3b, then speclfying the geographic coordinates below is optional,
[-l East (+)
Lonsitude E ;;;;(; 114 ' 602 dgsvqs5 Lartude E XIlll' 42. r.e2 dsslgs5
3d Clty (if unlncorporated, check here and enter nearest city) ffi
Jackpot
3c State/provlnce
Nevada
3f County(orcheck here forindependentcity),--]
Twin Falls
39 Country (if not Unlted Slates)
oo
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l-
ldenti[, the electrlc utllities that are contemplated to transact wlth the facllity
4r ldentifu utility interconnecting with the facility
Idaho Power Company
4b ldencify utilities providing wheelinq setvice or cher:k here if rrone [l
4c ldentifu utilities purchasing the useful electric power output oI check here if none '--
Idaho Power Company
4d ldentiiy utilities providing rupplemerrlary power, backup por,ver, mainlenance power, and/or intertttptible power
service or check here if none ffi
Case 1:18-cv-00236-REB Document 4-11 Filed 06/25118 Page 6 of 19
FERC Form 556 Page6-All Facltltles
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case 1:18-cv-00236-REB Document 4-11 Filed 06/2511g page 7 of 19
FERC Form 556 PageT-All Facilities
5a Direct ownership as of effective date or operation datel ldentify all direct owners of the facility holding at least 10
percent equity interest. For each identified owner, also (1) indicate whether that owner ls an electric utility, as
defined in section 3(22) of the Federal Power Act (16 U.S,C. 796t2211, ora holdlng company, as defined in section
'I 262(8) of the Public utility Holding company Act of 2005 (42 u.s.c. r 645 I (8)), and (2) for owners whlch are electric
utilities or holding companies, provide the percentage of equity lnterest ln the facility held by that owner, lf no
direct owners hold at least I0 percent equity Interest in the facility, then provlde the required lnformation for the
two direct owners with the largest equity interest in the facllity,
Electric utility or lf Yes.holding % equity
YesI
YesI
Yes I
Yes fl
YesI
Yes !
Yes I
Yes I
Yes fl
Yes I
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No
No
No
No
No
No
No
No
No
No
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I Check here and continue in the Miscellaneous section starting on page 1 9 if additional space is needed
Full legal names of direct owners interest
2)
3)
4l
s)
6)
7)
8)
e)
!0)
l) Robert A. Paul
5b Upstream (i.e., indirect) ownership as of effective date or operation date: ldentify all upstream (1.e., indirect) owners
of the facility that both (1 ) hold at least 10 percent equity interest in the facility, and (2) are electric utilities, as
defined in section l(22) of the Federal Power Act (16 U.S.C, 796(22ll, or holding companies, as defined in section
1262(8)ofthePublicUtilityHoldingCompanyActof2005(42U.S.C. 16451(8)). Alsoprovidethepercentageof
equity interest in the facility held by such owners. (Note that, because upstream owners may be subsldlaries of one
another, total percent equlty lnterest reported may exceed 1 00 percent.)
Check here if no such upstteam owners exist, ffi
Full legal names of electrlc utllity or holding company uprtream ownert
l)
2t
3)
4)
s)
6)
7t
8)
e)
't0)
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--i Check here and continue ln the Miscellaneous section starting on page 1 9 if additional rpace is needed
% equity
interest
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5c ldentify the facility operator
Franklin Ener:gy SLorage Eour, LLC
case 1:18-cv-00236-REB Document 4-11 Filed 06/2511g page g of 19
FERC Form 556 PageS-AllFacilities
6a Describe the primary energy lnput: (check one rnain category and. if appllcablq one su bcategory)
fJ Biomass (specify) fi Renewable resources (specifu)
I Landflll gas I Hydro power- rlver
I Manuredigestergas I Hydropower-tidal
! Municipal solld warte fl Hydro power - wave
! Sewagedigestergas I Solar-photovoltatc
fl Wood I Solar-thermal
n Other blomass (describe on page 19) E Wind
f] waste (specif type below ln line 6b) * other renewable resource
(descilbe on page 19)
I Geothermal
fl Fossil fuel(specifu)
D Coal(notwaste)
I Fueloll/diesel
fJ Natural gas (not waste)
-, Orher fossll fuelu (describe on page l9)
f] Other (describe on page l9)
6b lf you specified 'waste" as the prlmary energy input in line 6a, indlcate the type of waste fuel used: (check one)
E waste fuel listed in l8 c.F.R 5 292.202(b) (specify one of the followtng)
fl Anthracite culm produced priorto July 23, 1985
,- Anthraciterefusethathasanaverageheatcontentof6000Btuorlessperpoundandhasanaverageu ash content of 45 percent or more
.-, Bitunrinous coal refuse that has an average heat content of 9,500 Btu per pound or less and has anu average ash content of 25 percent or more
Top or bottom subbitumlnous coal produced on Federal lands or on lndlan lands that has been
,--, determined to be waste by the United States Department of the lnterior's Eureau of Land Management" {BUttit; or that is located on non-Federal or non-lndian lands outside of BLM's jurisdiction, provided that
the appllcant shows that the latter coal is an extension of that determlned by 8LM to be waste
Coal refuse ptoduced on Federal lands or on lndian lands that has been determlned to be waste by then BLMorthatislocatedonnon-Federal ornon-lndianlandsoutsideofBLM'sjurisdictlon,provldedthat
applicant shows that the latter is an extension of that determined by BLM to be waste
- Lignite produced in assoclation with the production of rnontan wax and lignlte that becomes exposedU as a result of such a mining operation
I Gaseous fuels (except natural gas and synthetic Aas from coal) (descrlbe on page I 9)
Waste natural gas from gas or oil wells (describe on page 19 how the gas meets the requirements of 18
n C.F.R. 5 2.400 for waste natural gas; include with your fillng any materials necessary to demonstrate
compliance wlth l8 C.F.R.5 2.400)
I Materialsthatagovernmentagencyhascertifiedfordisposalbycombustion(describeonpagelgl
fl Heat from exothermic reactions (descrlbe on page 19) [] Residual heat (describe on page 19)
! Usedrubbertlres I Plasticmaterials fl Refineryoff-gas ! Petroleumcoke
Other waste energy input that has little or no commercial value and exists in the absence of the quallfulng
I facllity industry (describe ln the Miscellaneous section startlng on page 19; include a discussion of the fuel's
lack of commerclal value and existence in the absence of the qualifying facility industry)
=o-s
U)
(,c
IJJ
6< Provide the average energy input, calculated on a calendar year basis. in terms of Btulh for the following fossil fuel
energy inputs, and provlde the related percentage of the total average annual energy input to the facility (18 C.F.R. S
292.202(t)1. For any oil or natural gas fuel, use lower heating value (18 C.F.R. 5 292.202(m)).
Annual average energy Percentage oftotal
Natural gas 0 Btu/h 0 o/o
Oil-based fuels o 8tu/h AVo
Coal 0 Btu/h QVc
Fuel for fuel annual
Case 1:18-cv-00236-REB Document 4-11 Filed 06/25118 Page 9 of 1_9
FERC Form 556 Page9-AllFacilities
lndicate the maximum gross and maximum net electric power production capacity of the facility at the point(s) of
dellvery by completing the worksheet below. Respond to all items, lf any of the parasitic loads and/or losses ldentified in
lines 7b through 7e are negligible, enter zero for those lines.
7r The maximum gross power productlon capacity at the terminals of the lndividual generator(s)
under the most favorable anticlpated deslgn conditions 32 000 kw
7b Parasitic station powel used at the facility to run equipment which ls necessary and integral to
the power production procers (boiler feed pumps, fans/blowert office or maintenance buildings
directly related to the operation of the power generatlng facility, etc,). lf this facility includes non-
power production processes (for lnstance, power consumed by a cogeneration facllity's thermal
host) , do not include any power consumed by the non-power production activities in your
reported parasiti€ station power.10 kw
7< Electrical losses in interconnection transforrnefs
434 kw
7d Electrical losses in AC/DC conversion equipmenl, if any
920 kw
7e Other interconncction losses in power lines or facilities {other than transformers and AC/DC
conversion equipment) between the terminals of the generator{s) and the point of interconnection
with the 636
7f Total deductions from gross power production capacity = 7b + 7 c + 7d + 7e :,000 .0
79 Maximum net power production capacity =7a-7f cOi. i kw
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7h Description of facility and primary components: Describe the facility and its operation. ldentiff all boilers, heat
recovery steam generators, prime movers (any mechanical equipment drlving an electric aenerator), electrical
generators, photovoltalc solar equipment, fuel cell equipment and/or other primary power generatlon equipment
used in the facility. Descriptions of components should include (as applicable) specifications of the nomlnal
capacities for mechanical output, electrical output, or steam generatlon of the identlfled equipment. For each piece
of equipment ldentified, clearly indicate how many pieces of that type of equipment are included in the plant, and
which components are normally operating or normally in standby mode. Provide a description of how the
components operate as a system, Applicants for cogeneration facilities do not need tn describe operatlons of
systems that are clearly depicted on and easily understandable from a cogeneration facility's attached mass and
heat balance diagram; however, such applicants should provide any necessary description needed to understand
the sequential operatlon of the facility depicted in their mass and heatbalance dlagram. lf additional space is
needed, contlnue in the Mlscellaneous section starting on page 19.
The projocl consists of an energy storage sVstem Qualifying Eacilily providing
scheduled and dispatchable el"ectricity in forward-looking tj.me blocks, The
energy storage system that comprises the energy stcrage Quali.fying FaciIit.y is
designed to, and will, r:ccci.ve 100t of its energy input from a combination of
renewable energy sources such as wind, sofar, biogas, biomas, etc. The currentinitial design utilizes solar photovoltaic (PV) modules rnounted to single-axis
trackers to provide the electric enerqy input Lo the Qualifying Faci.li.tyrsbattery storage system. The PV modrrle6 are planneci to be connected in series/parallel com!:inations to solar rnr,/ertersr rated apprcxinate -11, 2.5 MIalac each,(subject to change) , The proposed elect-ric encrgy storage Qualifying facility
w-ill consisl of an efect.ro-chemical bat-tery and r,ril..l.. have a maximum power output
capacity of 25 MWac for a susbained L-ime period of 5 - 50 minutes. The Facility
will consist of an alternating currenL {AC) to di.rect current.(DC) cont.rol
system. The Qualifying E'acility will be utilized bo provide Ehe purchasing
utility with pre-scheduled and dispatchable AC energy wi.thj.rr pre-deternrined time
blocks, The sole source of elecLric power and energy prov,ided to the purchasi.ng
utiliLy wilL be the el€ctro-cheuiical reaction giving rise to the discharge ofelectric power and energy by the battery. In turn, the sofe direct source of
energy input provlded to the battcry [acility will be, as riescribecl above,
rene lsable souraces.
Case L:18-cv-00236-REB Document 4-l-L Filed 06/2511-8 Page 10 of 1_9
FERC Form 556 Page 10 - Small Power Production
Pursuant to I8 C.F.R.5 292.204(a), the power productlon capacity of any small power production facllity, together
wlth the power productlon capacity of any other small power production facllitles that use the same energy
resource, are owned by the same person(s) or its afflliates, and are located at the same slte, may not exceed 80
megawatts. To demonstrate compliance with this size limitation, or to demonstrate that your facility ls exempt
from this size limitation under the Solar, Wind, Waste, and Geothermal Power Production lncentlves Act of l99O
(Pub. L. 101-575, l04Stat.2834 (1990) asamendedby Pub. L,102-46, 105 Stat.249(1991|), respondto linesSa
through 8e below (as applicable).
8e ldentifoanyfacilitieswithelectrical generatlngequlpmentlocatedwithin I mileof theelectrical generating
equipment of the instant facility, and for which any of the entities identified in lines 5a or 5b, or their affiliates, holds
at least a 5 percent equity interest.
[--l Check here andcontinue in the Miscellaneous section starting on page I9 if additional space is needed
Common owner(s)
QF
(if
KW
KW
KW
Root docket #
QF
Maximum netpower
production capacity
1)
2l
3)"QF
here lf no such facilities exlst- fi
Facllity location
(city or county, state)
8b The Solar, Wind, Waste, and Geothermal Power Production lncentives Act of 1990 (lncentives Act) provides
exemption from the size limitations in 18 C.F.R. 5 292.204(a) for certain facilities that were certified ptior to 1995,
Are you seeking exemption from the size limitations in 18 C.F.R. 5 292.204(a) by virtue of the lncentives Act?
f] Yes (continue at line 8c below) ffi No (skip lines 8c through 8e)
8c Was the original notice of self-certiflcation or appllcatlon for Commission certiflcatlon of the facllity filed on or
before December 31, 1994? Yes,- I No il
8d DidconstructionofthefacllitycommenceonorbeforeDecember3l,lggg? YesI I No I,j
oUEe
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8e lf you answered No ln line 8d, lndicate whether reasonable diligence was exercised toward the completion of
thefacllity,takinglntoaccountall factorsrelevanttoconstruction? Yes l_'j No [] lf youansweredYes,provlde
a brlef narative explanatlon in the Mlscellaneous sectlon startlng on page l9 of the constructlon timeline (in
particular, describe why construction started so long after the facility was certifled) and the dlllgence exerclsed
toward completion of the facility.
Pursuant to l8 C,F.R. 5 292.204(b), qualifoing small power production facilitles may use fossil fuels, in minimal
amounts, for only the following purposes: lgnition; start-up; testlng; flarne stabllization; control use; alleviation or
prevention of unanticipated equipment outages; and alleviation or preventlon of emergencies, directly affucting
the public health, safety, or welfare, which would resuh from electric power outages. The amount of fossil fuels
used for these purposes may not exceed 25 percent ofthe total energy input ofthe facility during the 1 2-month
period beginning with the date the facility first produces electric energy or any calendar yearthereafter.
9a Certificationof compliancewlth 18C.F,R.5292.204(b) wlthrespecttousesoffossll fuel:
ffi Applicant certifies that the facility will use fossll fuels exclusively tor the purposes listed above.
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9b Certiflcatlon of compliance with 18 C.F.R. S 292.204(b) with respectto amount of fossll fuel used annually:
Applicant certifles that the amount of fossil fuel used at the facility will not, in aggregate, exceed 25
ffi percent of the total energy input of the facility durlng the I 2-month period beginnlng with the date the
facility first produces electric energy or any calendar year thereafter.
lnformation Required for Small Power Production Facility
lf you lndlcated in llne I k that you are seeking qualifying small power production facility status for your facillty, then you
must to the ltems on thir 10,
q,*
case 1:18-cv-00236-REB Document 4-11 Filed 06/25li_8 page 1i_ of 19
FERC Form 556 Page 11 - Cogeneration Facilities
Pursuant to l8 C.F.R.5 292.2021c),, a cogeneration faclllty produces electrlc energy and forms of usefulthermal
energy (such as heat or steam) used for lndustrial, commerclal, heating, or cooling purposes, through the sequential
useof energy. Pursuantto l8C.F,R.$ 292.202(s),'sequential use'of energymeansthefollowing:(llforatopplng-
cycle cogeneration facility, the use of reject heat from a power production process in sufficient amounts ln a
thermal application or process to conform to the requirements of the operating standard contained in I8 C.F.R. 5
292.2O5(a); or (2) for a bottomlng-cycle cogeneration facllity, the use of at least some reject heat from a thermal
application or process for power production,
Io. What type(s) of cogeneration technology does the facillty represent? (check all that apply)
I ] Topping-cycle cogeneration l-] Bottomlng-cycle cogeneratlon
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10b To help demonstrate the sequential operation of the cogeneration process, and to support compliance with
other requlrements such as the operating and efficiency standards, lnclude wlth your filing a mass and heat
balance dlagram deplcting avelage annual operating conditions. fhis diagram must include certain items and
meet certaln requirements, ar described below. You must check next to the description of each requirement
below to certifo that you have complled with these requirements.
Check to certify
compliance with
indicated requirement Bequirement
Diagram must show orientation withln system piping and/or ducts of all prime movers,
heat recovery steam generators, boilers, electrlc Aenerators, and condensers (a5
applicable), as well as any other prlmary equiprnent relevant to the cogeneration
process.
Any avcrage annual values required to be reported in linec 10b, 1 2a, 13a, 13b, l3d, lll
14a, I5b, 15d and/or l5fmust be computed overtheanticipated hoursofoperation.
Diagram must :peclly all fuel inputs by fuel type and average annual rate in Btu/h. Fuel
for supplementary firing should be specified separately and clearly labeled. All
specifications of fuel lnputs should use lower heating values.
Diagram must speciff average gross electric output ln kW or MW for each generator,
Diagram must specify average mechanical output (that is, any nrechanical energy taken
off of the shaft of the prime movers for purpoies not dlrectly related to electric power
generatlon) in horsepower, lf any. Typically, a cogenerallon facllity has no mechanical
output.
At each point for which working fluid flow conditions are required to be specifled (see
below), such {low condltion data must lnclude mars flow rate (in lb/h or kg/sf,
ternperature (in "F, R,'C or K), absolute pressure (ln psia or kPa) and enthalpy (in Btullb
rrr kl/kg). [xception: For rystems where the worklng fluid ls llquid only lno vapor at any
polnt ln the cycle) and where the type of llquld and speclflc heat of that liquid are clearfy
lndlcated on the diagrarn or in the Mlscellaneous section startlng on page 19, only mass
llow rate and temperature (not presrure and enthalpy) need be specifled. For reference,
specific heat at rtandard conditions for purc liquid water is approxirnately L00? Btu/
(lb'R) or 4.i 95 kj(kg*K),
Diagram must specify working fluid flow conditions at input to artd output from each
steam turblne or other expanslon turblne or back-pressure turblne.
Diagram must specifu working fluid flow conditions at delivery to and return from each
thermal application.
Diagram must specify worklng fluid flow conditlons at make-up water lnputs,
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lnformation Required for Cogeneration Facility
lf you Indicated in line I k that you are seeking quallfrlng cogeneration facility status for your facllity, then you must re:pond
to the ltems on 1l 13. Othawise, ski;I 1 through 13.
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EPAct 2005 cogeneration facilities: The Energy Policy Act of 2005 (EPAct 2005) established a new section 2 I 0(n) of
the Publlc Utility Regulatory Policies Act of 1978 (PURPA), t 6 USC s24a-3(n), with addltional requirements for any
quallfying cogeneration facllitythat (1) ls seeklng to sell electric energy pursuant to sectlon 210 of PURPA and (2)
was either not a cogeneration facility on August 8, 2005, or had not flled a self-certification or application for
Commission certiflcatlon of QF status on or before February 1, 2006. These requlrements were implemented by the
Commission ln 1 I C.F.R. 5 292.205(d). Complete the llnes below, carefully followlng the instructlons, to demonstrate
whether these addltional requlrements apply to your cogeneration facility and, lf so, whether your facility complles
wlth such requirements.
ttr WasyourfacllltyoperatlngasaqualllingcogenerationfacllityonorbeforeAugustS,2005? Yes;..j No,,l
llb Wastheinltial filingseekingcertificationofyourfacllity(whetheranoticeofself-ce(ificationoranapplication
for Commission certification) filed on or before February 1, 2006? Yes No
lf the answer to either line 1 1 a or I t b is Yes, then contlnue at llne 'l 1c below. Otherwise, if the anrwers to both lines
llaandllbareNo,to line 1'le below,
I lc With respect to the design and operation of the facility, have any changes been implemented on or after
February 2,2006 that affect general plant operation, affect u5e ofthermal output, andlor increase net power
production capacity from the plant's capacity on February 1,2006?
i_] Yes (continue at line 11d below)
No. Your facility is not subJect to the requirements of 18 C.F.R. 5 292.205(d) at thls time, However, it may be
r-*l subject to to these requirements in the future if changes are made lo the facility. At such time, the appllcant
would need to recedfy the facllity to determine ellgibility. Sklp llnes 1 I d through 1 I j.
I !d Does the applicant contend that the changes identlfled in line I I c are not so slgnlflcant as to make the facllity
a 'new" cogeneration facility that would be subject to the 18 C,F.R. S 292.205(d) cogeneration requirementsT
Yes. Provide in the Miscellaneous sectlon starting on page l9 a descrlptlon of any relevant changes made to
I ] the facility (including the purpose of the changes) and a dlscussion of why the facility should not be
considered a 'new' cogeneration facllity ln llght of these changes. Skip llnes I I e through I I j.
No. Applicant stlpulates to the fact that lt is a "new" cogeneration facllity (for purposes of determlnlng the
'
'-r applicability of the requlrements of l8 C.F.R. 5 292,205(d)) by virtue of modifications to the facility that were
initiated on orafter February 2, 2006. Continue belowat line 1 1e.
r le Will electrlc energy from the facility be sold pursuant to rection 210 of PURPAI
, , Yes. The facility is an EPAet 2005 cogeneration facility. You must demonstrate compliance with 18 C.F.fl. S| | 292.205(d)(2) by continuing at line I I f below.
No. Applicant certlfies that energy wlll not be sold pursuant to sectlon 2t 0 of PURPA. Applicant also certifies
its understandlng that it must rece(ifr its faclllty ln order to determine cornpllance with the requirements of
18C.F.R.$292.205(dlbeforesellingenergypursuanttosection2l0ofPURPAinthefuture.5kipllnesllf
through 1 lj.
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l lf ls the net power production capacity of your cogeneration facility, as indicated ln line 79 above, less than or
equal to 5,000 kW?
Yes,thenetpowerproductioncapacityislessthanorequal to5,00CkW. 18C.F.R,S292.205(d)(4)providesa
rebuttable presumption that cogeneratlon facilitles of 5,000 kW and smaller capacity comply wlth the
requirements for fundamental use of the facility's energy output in 18 C.F.R. S 292.205(dX2). Applicant
certlfies its understandlng that, should the power production capacity of the facility increase above 5,000
kW, then the facility must be recertlfled to (among other things) demonstrate compliance wlth 18 C.F.R.5
292.20s(dx2). Sklp llnes 119 through lIj.
No, the net power production capacity is greater than 5,000 kW, Demonstrate compliance with the- requirements for fundamental use of the facility's energy output in l8 C.F.R. S 292.205(dX2) by continuing on
the next page at llne 1 1 g.
case 1:1-8-cv-00236-REB Document 4-11 Filed 06/2511g page LZ ot L9
FERC Form 556 Page l2 - Cogeneration Facllitles
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case 1:18-cv-00236-REB Document 4-11 Filed 06/2511g page 13 of 19
FERC Form 555 Page I3 - Cogeneration Faclllties
Lines 1 I g through I 1 k below guide the applicant through the process of demonstrating compliance with the
requirements for 'fundamental use" of the facllity's energy output, I 8 (.F.R. S 292.205(dX2). Only respond to the
lines on this page if the instructions 0n the previous page dlrect you to do so, Otherwlse, sklp this page.
l8 C.F,R. 5 292.205(dX2) requires that the electrlcal, thermal, chemlcal and mechanical output of an EPAct 2005
cogeneratlon facllity ls used fundamentally for industrial, commerclal, resldentlal or lnstltutional purposes and ls
not intended fundamentally for sale to an electric utility, taking into account technological, efficiency, economic,
and variable thermal energy requirements, as well as state laws applicable to sales of electric energy from a
qualifring facillty to its host facility. lf you were directed on the previous page to respond to the items on this page,
then your facility ls an EPAct 2005 cogeneratlon facility that is subject to this "fundamental use" requirement.
The Commission's regulations provide a two-pronged approach to demonstrating compliance with the
requirements for fundamental use of the facllity's energy output. First, the Commission has established in 18 C.F.R.
S 292,205(dX3) a "fundamental use test" that can be used to demonstrate compliance with 18 C.F.R. 5 292.205(dX2).
Under the fundamental use test, a facility is considered to comply with I 8 C.F.R. 5 292,205(dX2) if at least 50 percent
of the faclllty's total annual energy output (including electrical, thermal, chemlcal and mechanlcal energy output) is
used for industrlal, commercial, residential or institutional purposes.
Second, an applicant for a facility that does not pass the fundamental use test may provide a narratlve explanatlon
of and support for its contention that the facility nonetheless meets the requirement that the electrical, thermal,
chemical and mechanical output of an EPAct 2005 cogeneration facility is used fundamentally for lndustrlal,
commercial, residential or institutional purposes and is not lntended fundamentally for sale to an electric utility,
taking into account technologlcal, efficlency, economic, and variable thermal energy requirements, as well as state
laws applicable to sales of electrlc energy from a qualifiTing facility to its host facllity.
Complete lines I I g through I lj below to determine compliance wlth the fundamental use test in 18 C.F.R. S
292.205(dX3). Completellnesllgthroughlljevenlfyoudanotintendtorelyuponthefvndamentol usetestto
demonstrote camplionce with l8 C.F.R. I 292.205(d)(2).
tIg Amountofelectrlcal,thermal,chemicalandmechanical energyoutput(netofl
generation plant losses and parasltic loads) expected to be used annually for industrlal,
commercial, residential or lnstitutional purposes and not sold to an electrlc utility MWh
I I h Total amount of electrlcal, therm and mechanlcal energy expected to be
sold to an electric MWh
lti Percentageoftotal annual energyoutputexpectedtobeusedforindustrial,
commercial, residentlal or lnstitutional purposes and not sold to a utility
= 100*119/(11g+ llh)%
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rlf ls the response in llne 1 li greaterthan orequal to 50 percent?
Yes, Your facility complies wlth 18 C-F.R. S 292,205(dX2) by virtue of passing the fundamental use test
provided in 1 8 C,F.R. S 292.205(dX3). Applicant certifies lts understanding that, if it ls to rely upon passlng
i- -i the fundamental use test as a basis for complylng with l8 C.F.R, 5 292,205(d)(2), then the facility rnust
comply with the fundamental use test both in the l2-month period beginning with the date the faclllty flrst
produces electric energy, and in all subsequent calendar years.
No. Your facility does not pass the fundamental use test. lnstead, you must provide ln the Miscellaneous
section starting on page l9 a narratlve explanation of and support for why your facility meets the
requirement that the electrlcal, thermal, chemical and mechanlcal output of an EPAct 2005 cogeneration
facillty is used fundamentally for industrlal, commercial, residential or institutional purposes and is not
intended fundarnentally for sale to an electric utilit, taking lnto account technological, efficiency, economic,
and variable thermal energy requirements, as well as state laws applicable to sales of electric energy from a
QF to its host facility. Applicants ptoviding a narrative explanation of why their facility should be found to
. comply with I 8 C.F.R. S 292.205(dX2) in spite of non-compliance with the fundamental use test may want to
revlew paragraphs 47 through 61 of Order No.67l (accessible from the Commission's QF website at
www.ferc.govlQF), which provide discussion of the facts and circumstances that may support their
explanation. Applicant should also note that the percentage reported above will establish the standard that
that faclllty must comply with, both for the 12-month period beginning with the date the facility first
produces electrlc energy, and ln all subsequent calendar years. See Order No. 671 at paragraph 51. As such,
the applicant should make sure that it reports appropriate values on lines 1 lg and I I h above to serve as the
relevant annual standard, taking into account expected variations ln production conditions.
case 1-:18-cv-00236-REB Document 4-lL Filed 06/25118 page 14 of 19
FERC Form 556 Page l4 - Topping-Cycle Cogeneration Facilltles
I nformation Req uired for Toppin g-Cycl e Cogenerati on Facil ity
lf you indicated in line 10a that your facility represents topplng-cycle cogeneration technology, then you must respond to
the items on '14 and 'l 5.l4and 15.
The thermalenergy output of a topping-cycle cogeneration facility ls the net energy made avallable to an lndustrial
or commerclal process or used in a heating or coollng appllcation. Pursuant to sections 292.202(c), (d) and (h) of the
Commission's regulatlons (.l8 C.F.R. 55 292.202(c), (d) and (h)), the thermal energy output of a qualifulng topping-
cycle cogeneration facility must be useful. ln connection with thls requlrement, describe the thermal output of the
topping-cycle cogeneration facility by responding to lines l2a and 12b below.
I2a ldentifyanddescribeeachtherrnalhost,andspeclfytheannualaveragerateofthermaloutputmadeavallable
to each host for each use, For hosts with multiple uses of thermaloutput, provlde the data for each use rn
seporate rcwL Average annual late of
thermal outpul
attributable to use (net of
Name of entity (thermal host) Thermal host's relatlonship to facillty; heat contained ln process
taking thermal output fhermal host's use of thermal output return or make-up water)
thermal host's relationshi to
1)
thermal host's use of thern':al 8tu/h
tliermal host's to)l
thermal host'! use o[thermal
thermal host's rel to facili2\
t thermal host's use of thernral t Btu/h
lect thermal host's relation to facili
therrnal host's use of thernral ou Btr,r/h
I thermat host's relati,to5)
therrnai hosr's r.ise of thelnral ot-r t 8tu/h
ro faciliSelect thermal hosr's relat6)
thermal host's use of thermal o Ut Btu/h
i""l Check here and contlnue in the Miscellaneous section starting on page l9 lf additional space is needed
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otl)12b Demonstrationof usefulnessof thermal outputr Ataminimum,providea brief descrlptionof eachuseof the
thermal output identified above. ln some cases. this brief description is sufficient to demonstrate usefulness.
However, if your facility's use of thermal output is not common, and/or if the usefulness of such thermal output is
not reasonably clear, then you must provide additional details as necessary to demonstrate usefulness. Your
applicatlon may be rejected and/or additlonal lnformation may be required if an insufficient showlng of usefulness
is made, (Exception: lf you have previously received a Commission certification approving a specific use of thermal
output related to the instant facility. then you need only provide a brlef descrlptlon ofthat use and a reference by
date and docket number to the order certirying your facjllty with the indicated use. Such exemption may not be
used if any change creates a material deviation from the previously authorized use.) lf additional space is needed,
continue in the Miscellaneous section starting on page 19.
case 1:1-8-cv-00236-REB Document 4-lL Filed 06/25li-8 page 15 of 19
FERC Form 556 Page l5 -Topplng-Cycle Cogeneratlon Facilities
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Appllcants for facilities representing topping-cycle technology must demonstrate compliance with the topping-
cycle operating standard and, lf applicablg efliciency standard. Section 292,205{aX'l}of the Commission's
regulations (18 C.F.R. S 292.205(aXl )) establishes the operatlng standard fortopplng-cycle cogeneration facllities:
the useful thermal energy output must be no less than 5 percent of the total energy output. Section 292.205(aX2)
(18 C.F.R. 5 292,205(axz)) establlshes the efficlency standard for topplng-cycle cogeneration facilities for which
installationcommencedonorafterMarchl3, 1980r theuseful poweroutputofthefacilityplusone-halftheuseful
thermal energy output rnust (A) be no less than 42,5 percent ofthe total energy lnput of natural gas and oll to the
facillty; and (B) lfthe useful thermal energy output is less than 1 5 percent of the total energy output ofthe facility,
be no less than 45 percent of the total energy input of natural gas and oll to the facllity. To demonstrate
compliance with the topping-cycle operating and/or efflciency standards, or to demonstrate that your facility ls
exempt from the efficiency standard based on the date that installation commenced, respond to lines 13a through
131 below.
lf you indicated in line I0a that your facllity represents both topping-cycle and bottoming-cycle cogeneratlon
technology, then respond to llnes I 3a through 1 3l below considerlng only the energy inputs and outputs
attributabletothetopping-cycleportionofyourfacility. Yourmassandheatbalancedlagrammustmakeclear
which mass and enetgy flow values and system components are for which portion (topplng or bottoming) of the
13e lndicatetheannual averagerateofuseful thermal energyoutputmadeavailable
heat contalned in condensate return or make-unet of waterto the
1!b lndlcate the annual average rate of net electrical energy output
KW
13< Multiply line 13b by 3,412 to convert from kW to Btu/h
13d lndlcatetheannual averagerateof mechanical energyoutputtakendlrectlyoff
of the shaft of a prime mover for purposes not directly related to power production
(this value ls zero)h
I 3e Multiply line t 3d by 2,544 to convert from hp to Btu/h
Brulh
Btu/h
1 3f Indicate the annual average rate of energy input from natural gas and oil
t39 Topping-cycleoperating value= 100 * l3a / (13a + 13c + t3e)
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efficiencyvalue= .l00*(0,5*l3a+ l3c+ l3e) /13f1Toppi
l3i Compliance with operating standard: ls the operatlng value shown ln line I 39 greater than or equal to 5Yo?
, I Yes (compltes with operating standard) 1_ | No (does not comply wlth operating standard)
l3i Did installation of the facllity ln lts current form commence on or after March 1 3, 1 980?
,. , Yes. Your facility is subject to the efllclency requirements of 18 C.F.R. 5 292.205(aX2). Demonstrate
'- J compliance with the efficiency reguirement by responding to line 13k or 131, as applicable, below.
r--.j No. Your facility is exempt from the efflciency standard. Skip lines l3k and 131.
t3k Compliancewithefficiencystandard(forlowoperatingvalue): lftheoperatingvalueshowninlinel39isless
than 15%, then indicate below whether the efflciency value shown in line 13h greater than or equal to 45%:
Yes (complles with efficiency standard) No (does not comply with efficiency standard)
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t3l Compliancewithefficiencystandard(forhighoperatingvalue): lftheoperatingvalueshowninlinel39is
greater than or equal to 15%, then indicate below whether the efficiency value shown in line 1 3h is greater than or
equal to 42.5%:
i Yes (complies wlth efficlency standard) , -l No (does not comply with efficiency standard)
case 1:18-cv-00236-REB Document 4-11 Filed 06/25li-8 page j_6 of 19
FERC Form 556 Page 16 - Bottomlng-Cycle Cogeneration Facillties
lnformation Required for Bottoming-Cycle Cogeneration Facility
lf you indicated in line 10a that your facility reprerents bottomlng-cycle cogeneratlon technology, then you must respond
to the items on 16 and 17. Otherwlse,l6 and 17.
The thermal energy output of a bottoming-cycle cogeneration facillty is the energy related to the process{es) from
whlch at least some of the reject heat is then used for power production. Pursuant to sectlons 292.202(c) and (e) of
the Commission's regulations (18 C.F.R. 5 292.202(c) and (e)) , the thermal energy output of a qualiffing bottoming-
cycle cogeneratlon facility must be useful. ln connection with this requirement, describe the process(es) from which
at least some of the reJect heat is used for power production by responding to lines 14a and l4b below.
l tla ldentify and dercribe each thermal host and each bottoming<ycle cogeneration process engaged in by each
host. For hosts with multlple bottomlng-cycle cogeneration processes, provide the data for each process rn
teparute rows'
Has the energy input to
Name of entity (thermal host) the thermal host been
performing the process from augmented for purposes
which at least some of the of increasing power
reject heat is used for power Thermal host's relationship to facality; production capacity?production Thermal host's process type (if Yes, describe on p. 19)
thernral host's to facilil)
thermal host's
therrnal host's relationship to2)
thermal host's
Yes,-I Nol-;
thermal host's to3)
thermal host's
Yes r_') No f i
I lCheck here and continue in the Miscellaneous section starting on page 19 if additional space is needed
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l lb Demonstration of usefulness of thermal output At a minimum, provlde a brlef descrlptlon of each process
ldentlfled above. ln some cases, thls brief description ls sufflclent to demonstrate usefulness. However, if your
facillty's proces5 is not common, and/or if the usefulness of such thermal output ls not reasonably clear, then you
must provide additional details as necessary to demonstrate usefulness. Your application may be rejected and/or
additional informatlon may be requlred lf an insufflclent showing of usefulness is made, (Exception: lf you have
prevlously recelved a Commlsslon certlficatlon approving a specific bottomlng-cycle process related to the instant
facility, then you need only provide a brief descrlption ofthat process and a reference by date and docket number
totheordercertifringyourfacilltywiththeindicatedprocess.Suchexemptionmaynotbeusedifanymaterial
changes to the process have been made.) lf additional space is needed, continue in the Miscellaneous section
starting on page 19.
Yes i- .j No i. j
Case 1-:18-cv-00236-REB Document 4-11 Filed 06/25118 Page 17 of 19
FERC Form 556 Page l7 - Bottoming-Cycle Cogeneration Facllitles
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Applicants for facilities representlng bottorning-cycle technology and for which installation commenced on or after
March 1 3, 1990 must demonstrate compliance with the bottoming-cycle efficiency standards. Section 292.205(b) of
the Commission's regulations (18 C.F.R, S 292.205(bl) establishes the efficiency standard for bottoming-cycle
cogenerationfacilities: theusefulpoweroutputofthefacllltymustbenolessthan45percentoftheenergyinput
of natural gas and oil fot supplementary firing. To demonstrate compliance with the bottoming-cycle efficiency
standard (if appticable), or to demonstrate that your facility is exempt from this standard based on the date that
installation of the facillty began, respond to llnes 'l5a through I 5h below,
lf you lndlcated in llne 'l0a that your facility represents both topping-cycle and bottoming-cycle cogeneratlon
technology, then respond to lines I 5a through t 5h below consldering only the energy inputs and outputs
attributable to the bottoming-cycle portion of your facility. Your mass and heat balance diagram must make clear
whlch mass and energy flow values and system components are for which portlon of the cogeneratlon system
(topping or bottoming).
t5a DidinstallationofthefacllltylnitscurrentformcommenceonorafterMarchl3, 1980?
, , Yes. Your facility ls subject to the efficiency requlrement of 18 C.F,R. 5 292.205{b). Demonstrate compliance' ' with the efliciency requirement by responding to lines 15b through 15h below.
I I No. Your facility is exempt from the efficiency standard. Skip the rest of page 17.
t 5b lndicate the annual averaqe rate of net electrlcal energy output
KW
I5c Multlply line l5b by 3,41 2 to convert from kW to Btu/h
0 Btu/h
l5d lndicatetheannualaveragerateofmechanicalenergyoutputtakendirectlyoff
of the shaft of a prime mover for purposes not directly related to power production
(thls value is usually zero)hp
15e Multlply line 1 5d by 2,544 to convert from hp to Btu/h
C Btu/h
1 5f lndicate the annual average rate of supplementary energy input {rom natural gas
or oil Btu/h
t59 Eottoming<ycleefficlencyvalue= 100*(l5c+ l5e) / l5f
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l5h Compllance with efficiency standard: tndlcate below whether the efficlency value shown in line 159 is greater
than or equal to 45%:
1l Yes (complies with efficiency standard) [ tto {does not comply with efflciency standard)
case 1:18-cv-00236-REB Document 4-11- Filed 06/25lj.g page 1g of 19
FERC Form 556 Page 18 - All Facilities
Certificate of Completeness, Accuracy and Authority
Appllcant must certiff compliance wlth and understanding of filing requlrements by checking next to each item below and
signingatthebottomofthlssection. FormswlthlncompleteCertificatesofCompleteness,AccuracyandAuthorltywill be
relected by the Secretary of the Comrnission.
Signer identified below certlfles the followlng: (check all items and appllcable subltems)
He or she has read the filing, lncludlng any information contained ln any attached documents, such as cogeneration
ffi mass and heat balance diagramt and any information contained in the Miscellaneous section startlng on page 19, and
knows lts contents.
a
He or she has provided all of the requlred information for certiflcation, and the provided lnformation ls true as stated,
to the best of his or her knowledge and belief.
He or she possess full power and authority to slgn the filing; as required by Rule 2005(aX3) of the Commisslon's Rules of
Practice and Procedure {18 C.F.R. S 385.2005(aX3)), he or she is one of the following: (check one)
! The person on whose behalf the filing is made
I An officer of the corporation, trust, association, oI other organlzed group on behalf of which the filtng ls made
- An officer, agent, or employe of the governmental authority, agency, or instrumentality on behalf of which theu filing is made
- A representative quallfied to practice before the Commission under Rule 2101 of the Commission's Rules ofE PracticeandProcedure(18C.F.R.S385.2101)andwhopossessesauthorltytosign
a He or she has reviewed allautomatic calculations and agrees with their results, unless otherwise noted in the
Mlscellaneous section startlng on page 19.
He or she has provided a copy of this Form 556 and all attachments to the utilitles wlth which the facility wlll
lnterconnect and transact (see lines 4a through ad), as well as to the regulatory authorlties of the states in whlch the
faclllty and those utilltles reside. See the Required Notlce to Public Utilities and State Begulatory Authorltles sectlon on
page 3 for more information.
x
Provide your signature, address and slgnature date below. Rule 2005(c) of the Commisslon's Rules of Practice and
Procedure (18 C.f.B. 5 385.2005(c)) provldes that persons filing thelr documents electronlcally may use typed characters
representing hls or her name to sign the filed documents. A person filing this document electronically should slgn (by
typing hls or her name) in the space provlded below.
Yout Signature Your address
515 N, 27th Street
Boise, ID 83102
Date
Audit Notes
Commisslon Staff Use Only:n
Case 1:18-cv-00236-REB Document 4-lL Filed 06/25118 Page 19 of 19
FERC Form 556 Paqe l9-AllFacllities
Miscellaneous
Use this space to provlde any informatlon for which there was not sufffcient space in the previous sections of the form to
provlde. Foreachsuchltemof lnformation clearlytdentlfythelinenumberthattheinformotlonbelongsto. Youmayalsouse
thls space to provlde any addltional inforrnation you believe is relevant to the certlflcatlon of your facllity.
Your response below ls not llmlted to one page. Addltlonal page(s) wlll automatlcally be lnserted into this form lf the
length of your response exceeds the space on thls page. Use as many pages as you require.
The origi-nal Form 556 incorrectly listed the latitude and Longitude coordinales in
Paragrapi) 3c as Wesi i14,600 Nr:rth 42.206. The correct latitude and longirude
coordi.nat.es ar:o West 114.602 Nc::Lh 42.1-92.
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5r FERC P 6to78 (F.E.R.C.), r99o WL 3r7o7g
FEDERAL ENERGY REGULATORY COMMISSION**1 Commission Opinions, Orders and Notices
Luz Development and Finance Corporation
Docket No. QF90-3-000 #
Order Denying Application for Certification as a Qualifying Small
Power Production Facility and Denying Request for Waiver
(Issued April 26, r99o)
*61168 Before Commissioners: Martin L. Allday, Chairman; Charles A. Trabandt, Elizabeth Anne Moler and Jerry
J. Langdon.
On October 3, 1989, as completed on December 14, 1989, Luz Development and Finance Corporation (Luz or Applicant)
submitted for filing an application for certification, as a qualifying small power production facility, of a proposed electro-
chemical storage facility to be located near Kramer Junction, California. Notice of the application was published in the
Fecleral Register,withcomments, protests, or motions to intervene due on or before November 22, 1989. I No comments,
protests or motions to intervene have been filed.
The proposed electric energy storage facility will consist primarily of an electro-chemical battery, and will have a
maximum net electric power output capacity of 30 megawatts. The facility will consist of alternating current (AC)
to direct current (DC) and DC to AC converters, an electro-chemical battery and a control system. According to
the Applicant, the facility will be utilized solely for the time shifting of electric energy utilization, with the Applicant
purchasing electric energy from the local grid during off-peak periods, storing that energy and making it available for
distribution during peak periods.
The Applicant states that the primary energy source of the facility is the electro-chemical reaction giving rise to the
discharge of electric energy by the battery. The Applicant therefore contends that the facility comes within the Federal
Power Act (FPA) definition of a small power production facility as a facility which "produces electric energy solely by the
use, as a primary energy source, of . . . renewable resources In the alternative, should the Commission find that
the electric power input to the facility from the grid is a primary energy source to the facility and that such energy source
exceeds the 25 percent fossil fuel limitation in section 2g2.204(b)(2) of the Commission's regulations,3 the Applicant
requests a Commission waiver of the application of that regulation.
The Applicant argues that the legislative history of the Public Utility Regulatory Policies Act of 1978 (PURPA)4
indicates that Congress expressly included electric energy storage facilities within the class of facilities defined as
*61169 small power production facilities. The Applicant quotes the following passage from the statement of managers
accompanying the PURPA Conference Report:
The definition of small power production facility includes solar electric systems, wind electric
systems . . . and electric energy storagefacilities.
x*2 Lttz Application al4, quoting S, Conf. Rep. No. 1292,95th Cong. 2d Sess. 89 (1978) (emphasis supplied in
application).5
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By letter dated November 14, 1989, the Director of the Division of Qualifying Facilities and Interconnections of the
Commission's Office of Electric Power Regulation (Director) requested that Luz e xplain how use of electric power from
the grid will be limited to 25 percent of the total annual energy input of the facility. The request was based upon the
Commission's holding in McKee Products Incorporated6 that use of electric power during motorized start-up and shut-
down of a small power production facility is "analogous to direct firing of fossil fuels in conventional small power
production facilities. . . .- 43 FERC at p. 62,327 .7 The Director also asked Luz if renewable resources would be utilized
solely to provide the energy input into the storage facility and, if not, to explain why such a requirement is not the intent
of the above quoted language in the NOPR.
In its December 14, 1989 response to the Director's letter, Luz argues that strict application of McKee would undermine
the basic purpose and benefits of making energy storage technology eligible for qualifying facility (QF) status by drawing
a rigid and inappropriate analogy between energy storage facilities and conventional small power production facilities.
Luz first points to the Commission's statement in the NOPR that storage facilities are considered to be renewable
resources. In particular, Luz refers to the qualifying language in the statement, that the named storage facilities would
qualify "so long as a they do not involve the primary use of fossil fuels as a direct input to the storage cycle." 8 According
to Luz, this means that it is unnecessary to inquire into the indirect (fossil fuel) source ofthe energy used to generate the
AC current, as it is that AC current which is the direct input into the battery. In that regard, Luz also responds to the
Director's second question by stating that the Commission has expressly indicated a position with regard to facilities like
the storage battery; that is, as long as fossil fuels are not used as direct inputs, the facility is per se a renewable resource
facility which meets the fuel use requirements for QFs. As the battery will involve no such direct input of fossil fuel, Luz
concludes that the facility will therefore meet the asserted fuel use criterion applicable to such facilities.
Luz also contends that, in any event, the use ofelectric power to charge an electric storage facility like its proposed battery
system is not, as in McKee, analogous to the direct firing of fossil fuels in conventional small power production facilities.
Luz states that by distinguishing energy storage facilities (from conventional small power production facilities) the
Commission has recognized the unique nature of energy storage facilities. In elaborating, Luz compares the operational
characteristics and purposes ofthe two types offacilities. In conventional facilities, the input and output are essentially
simultaneous, while in a battery a direct energy input from the grid is stored for later use, with generation resulting from
an electro-chemical reaction that discharges the stored power. With respect to application of the direct firing analogy in
McKee, Luz argues that that facility was designed to operate much as a conventional small power production facility,
utilizing electric energy input "in conjunction with operation of the facility" during start-up and shut-down, as opposed
to input for storage.
**3 Luz argues further that this fundamental difference in technologies is recognized in the *61 170 (asserted) different
fuel use standards to be applied to storage versus conventional small power production facilities. Luz states that
application of the 25 percent rule to the battery's AC input as if it were equivalent to direct fossil fuel use would eliminate
the opportunity for all of the storage technologies listed in the NOPR - electro-chemical systems, flywheels and pumped
storage hydroelectric facilities - to become QFs, since these technologies can only be practical and economical by
storing off-peak electricity from the grid and releasing electricity during peak periods. To accomplish the PURPA policy
objectives of avoiding the need for additional on-peak generation and relieving transmission constraints, Luz maintains
that the 25 percent fossil fuel limitation should only be applied to direct use of fossil fuel that may occur a/ storage QFs;
for example, in a storage facility designed to use auxiliary equipment like fossil fuel-fired boilers to generate electricity
utilized as a direct input into the facility.
In response to the Director's request for provision of a narrative of the proposed facility's operation, Luz states that the
facility will be operated solely for the time shifting of energy purchased during off-peak periods for use in peak periods.
Luz contends that the time shifting function, as a clearly articulated objective at the time PURPA was enacted, can only
make sense and be implemented if energy storage facilities like the proposed battery system are allowed to operate as
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QFs and to use electric energy without an inquiry as to the source of energy used to generate that electricity. According
to Luz, part of the concern reflected in PURPA, and the House and Senate committee reports that make up the statute's
legislative history, was a recognition that the excessive cost of new generation was contributing to the national energy
crisis, and thus a reduction in peak demand (and the related need for costly new generating additions), would help reduce
the need to consume fossil fuels and the cost to the consumers of electricity. Moreover, Luz notes, the problems associated
with storing energy were among the reasons for the difficulties facing Congress in its attempts to address these issues.9
According to Luz, the ability ofa storage technology like the battery system to shift inexpensive off-peak energy for later
use to meet peak demands will meet the above-described public policy goals of PURPA. To that end, Luz states that
its project will reduce the need for typically fuel-intensive peaking units by using capital intensive baseload capacity and
freeing up capital otherwise needed to construct peaking facilities for other purposes, such as replacing older facilities. l0
Further, Luz maintains that the time shifting ability of energy storage facilities is critical in light of utilities' present load
demands, and that batteries are a particularly attractive storage option.
**4 Luz also points out that, like batteries, pumped storage hydroelectric (PSH) projects offer a solution to the growing
demand for peaking power and should therefore be subject to the same fuel use standard. However, pointing out that
PSH facilities have apparently not been proposed for QF status because it is not economic to build a PSH facility of 30
megawatts or less, Luz states that, on the other hand, battery systems offer a smaller scale way of achieving the same time
shifting benefits, along with greater flexibility to meet peak demands. For example,Luz notes that: (l) batteries require
much smaller sites and are more flexible in terms of location, meaning faster, less expensive construction; (2) batteries can
displace fossil fuel generation during daytime peaking hours when photo-chemical smog formation is most serious and
when air pollution emergencies may result in curtailment of fossil fuel burning while still allowing utilities to meet peak
demands; (3) batteries can be dispatched more quickly than PSH facilities and conventional small power production
facilities; and (4) batteries can offer greater flexibility in addressing transmission capacity constraints through location
near a utility's load, effectively freeing up capacity that might otherwise be required to meet peak demands.
Discussion
For the reasons stated below, we find that energy storage facilities are subject to the same fuel use limitations as all other
small power production facilities. Fossil fuel used to produce *6117l electric energy which is utilized to initiate the
storage process, whether it comes from a utility grid or on-site generating facilities, must be counted in determining the
total energy input of such a facility. Since the Applicant has not demonstrated that utilization of electrical input from
the grid in this instance will not result in a violation of the fossil fuel input limitation, we must deny the application. We
will also deny the requested waiver, as the Applicant has presented no facts or arguments to support that request.
Section 3(l7XA) of the FPA defines a small power production facility as one which "produces electric energy solely by
the use, as a primary energy source, of biomass, waste, renewable resources, geothermal resources or any combination
thereof." l6 U.S.C. $796 (17)(A)(i) (1988). Primary energy source is defined as the
fuel or fuels used for the generation of electric energy, except that such term does not include, as determined under rules
prescribed by the Commission, . . . .
(i) the minimum amounts of the fuel required for ignition, startup, testing, flame stabilization and control uses
16 U.S.C. $i96(lTXBXi) (1988). Section 292.204(b) of the Commission's regulations implements those provisions by
requiring, on the one hand, that the above-described fuel sources must constitute 75 percent or more of the total energy
input of a small power production facility and, on the other hand, by requiring that the use of oil, natural gas or coal by
such a facility may not constitute more than 25oh of the total energy input. Neither the statute nor the hnal rule refers
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Luz DeveropnGramol+1€-,cud033€rBFBr rhgpnnonl ftg!?l Filed 06/25118 Page 4 of 6
specifically to energy storage systems. Accordingly, we cannot see how they may be singled out for any different sort of
treatment with respect to their primary energy source.
**5 Luz appears to argue that the language of the Conference Report and the NOPR modify this view to suggest that
energy storage facilities are renewable resource (small power production) facilities per se, thus ruling out the need to
inquire into their primary energy source.
It is true that the quoted sections of the Conference Report and the NOPR contemplate electric energy storage systems
as renewable resource small power production facilities. However, the very nature of storage facility operation, viewed
in light of other Conference Report language, makes it clear that the primary energy source requirements must be
applied to energy storage facilities in the same manner they are applied to conventional small power production facilities.
Specifically, the Conference Report also states, immediately prior to the above-quoted statement, supra at p.2, that:
[t]he conferees added the term "primary energy source" to this definition [of small power production
facility] in recognition of the fact that a facility using waste, biomass, or renewable resources, or any
combination thereof as the primary fuel might nevertheless require the use of oil or natural gas or
other nonrenewable fuels in emergencies or in outages or to start the unit, test it, . . . or control the
operation ofthe unit or for other uses.
S. Rep. No. 1292, 95 Cong., 2d Sess. 89 (1978). This language makes no distinction between energy storage facilities and
conventional small power production facilities with regard to the application of the definition of a primary energy source.
Contrary to Luz's assertion, the primary energy source of the battery system is not the electro-chemical reaction. Rather,
it is the electric energy which is utilized to initiate that reaction, for without that energy, the storage facility could not
store or produce the electric energy which is to be delivered at some later time. Since this energy is the primary energy
source of the facility, it is necessary to look to the source of this energy as the ultimate primary energy source of the
facility. As the Conference Report makes no distinction with regard to the primary energy source of a storage facility as
opposed to a conventional small power production facility, then in order for a storage facility to be a QF the primary
energy source for generation of this energy must be one of those contemplated by the statute for conventional small
power production facilities, e.g., biomass, waste, renewable resources, geothermal resources or any combination thereof.
Likewise, the use of oil, natural gas or coal must be limited as required by the statute and our regulation, including the
type (emergencies, starting, testing, etc.) and amount of usage (no more than25 percent).
As noted, our regulations implementing the statute establish the limit on the use of oil, gas or coal fuels at 25 percent of
total annual input. Having chosen to argue that this limit is inapplicable to its proposed facility, Luz has provided no
demonstration that the primary energy source behind the electric energy input to the facility is biomass, waste, renewable
resources, geothermal resources or any combination thereof, or that the use of oil, natural gas or coal contribute no
more than 25 percent as a source of that energy and that such use, if any, is for an appropriate purpose. Accordingly,
we must deny the application.
**6 Luz also contends that in the NOPR the Commission, in suggesting the inclusion of storage *61172 facilities as
renewable resources, stated that these facilities may qualify so long as they do not involve the primary use of fossil fuels as
direct inputs to the storage cycle. Luz reads this language to distinguish energy storage facilities from conventional small
power production facilitier. ll In particular, Luz argues that this distinction makes application of the McKee analogy
inappropriate as it is the AC current itself which constitutes the direct input to its proposed storage facility and thus
inquiry into the source of that energy is unnecessary.
The limitation on the primary use of fossil fuels as direct inputs described in the NOPR has been embodied in the
final rule. As described above, we have found no reason to distinguish between the application of that requirement to
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conventional small power production facilities and energy storage facilities. In fact, consistent with that reasoning, we
held in McKee that an electric power input to a small power production facility consisting of power from a utility grid
that is a product of fossil fuel-fired generation is analogous to direct fossil fuel firing in a conventional small power
production facility and that an applicant proposing certification of such a facility must demonstrate such usage will
comprise no more than 25 percent of the total energy input to the facility.
Likewise, if, instead of using power from the grid, an electric storage facility were utilizing on-site generation to produce
the power to be stored, then the fossil fuel utilized to generate that power must be counted toward the 25 percent limitation
on the use of such fuels in the production of electric energy by a small power production facility, assuming this input is
one of the acceptable uses of such fuels. We do not find that storage facilities are so unique as to justify distinguishing on-
site fossil fuel-generated input as being any more direc't than the provision of power from a utility grid. Simply stated, it is
a distinction without a difference, for in either situation, direct electrical input and the fossil fuel consumption necessary
to create that input is required to produce electric output from the storage facility just as electrical power was required
in McKee for the facility to overcome the friction of the conveyor belt upon start-up. Thus, contrary to Luz's assertion,
we do not believe the NOPR, and particularly the final rule, can be read to create a separate fossil fuel use standard
for energy storage facilities.
In sum, energy storage facilities such as the proposed Luz battery system are a renewable resource for purposes of QF
certification. However, such facilities are subject to the requirement that the energy input to the facility is itself biomass,
waste, a renewable resource, a geothermal resource, or any combination thereof or a demonstration that any fossil fuel-
fired input constitutes no more than 25 percent of the total energy input to the facility and such uses are consistent with
those enumerated in section 3(17)(B) of the FPA. Luz has not attempted to show that the proposed facility will meet any
of these requirements as Luz has based its claim to certification on an argument that the fuel standard, as we interpret
it, is inapplicable. For these reasons, we will deny the application.
The Commission orders'.
**7 The application for certification of qualifying status filed on October 3, 1989, and supplemented on December
14, 1989 by Luz Development and Finance Corporation pursuant to section 292.207 of the Commission's regulations
and section 3(17)(C) of the Federal Power Act, as amended by the Public Utility Regulatory Policies Act of 1978, is
hereby denied.
Footnotes
54 Fed. Ree.43,197 (1989).
l6 u.s.c. $7e6(lTXAXD (1e88).
18 C.F.R. $292.204(bX2) (le8e).
l6 U.S.C. g2601 et se4. (1988). Section 201 olthat act amended section 3 of the FPA to include, inter alia, the definition ol
a small power production facility.
The Applicant also notes that the Commission listed energy storage facilities among renewable resource small power
production facilities in the preamble to the Notice of Proposed Rulemaking (NOPR) for regulations to implement section
201 of PURPA.
The term "renewable resource" means any application of solar, wind, or geothermal energy . . . . Electric energy storage
facilities such as electro-chemical storage systems, flywheels, or pumped storage units qualify so long as they do not involve
the primary use ollossil fuels as direct inputs to the storage cycle.
Proposed Regulations Providing for Qualification of Small Power Production and Cogeneration Facilities Under section
201 of the Public Utility Regulatory Policies Act of 1978, Docket No. RM79-54, FERC Statutes and Regulations, Proposed
Regulations 1977-1981 P 32,028 at p. 32,330; 44 Fed. Reg. 38,872 at 38,873 (1979).
43 FERC P 61,534 (1988).
I
2
J
4
5
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7 ln McKee, the Applicant proposed a small power production facility utilizing kinetic energy lrom a descending conveyor
belt system used to move crushed rock. Though no direct fossil fuel use was evident, some fossil fuels were used indirectly in
the form ofelectric power generated by the local utility and used by Mckee lor start-up and shut-down ofthe conveyor belt
system. McKee was able to demonstrate satisfactorily that the fossil fuel usage was below 25 percent. 43 FERC at p. 63,237.
FERC Statutes and Regulations, Proposed Regularions 1977-1981 P 32,028, at p. 32,330 (1979).
Luz December 14, 1989 response at 8, citing The National Energy Plan, Executive Olfice of the President, Energy Policy and
Planning, at 46 (April 29,1977); S. Rep. M2,95th Cong. 1st Sess. 2l-22 (1977); H.R. Rep. 496, 95th Cong. lst Sess., pt 4
at 166 (1977).
According to Luz, an inquiry into the sources used to charge the battery system is unnecessary because market mechanisms
effectively require a battery to substitute the use oflow-cost fuels for high-cost fuels, i.e., the economics ofa battery storage
project will work only if power is purchased during periods when the value of energy and capacity reflected in charges for
power is low and power is sold during periods when the value of energy and capacity reflected in the price paid for power is
high. Since oil and gas are typically the highest cost fuels, Luz maintains that batteries will necessarily back out such costly
fuels, thereby furthering the goals of PURPA. Luz December 14, 1989 response at 9, n.8.
As a general matter, Luz's reference to statements in the NOPR is unconvincing. As we recently explained in Midland
Cogeneration Venture, L.P. et a1.,50 FERC P 61,259, at p. 61,807 (1990), a NOPR is not a final rule and the Commission
does not reach final conclusions in NOPRs.
Sl FERC P 6ro78 (F.E.R.C.), 1990 WL BLZ,79
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Case 1:L8-cv-00236-REB Document 4-13 Filed 06/25118 Page l ot $*""of&e Secrerary
Service Date
February 7,2011
BEFORE THE IDAHO PTIBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT
PETrrroN oF IDAHO POWER COMPANY,
AVISTA CORPORATION, AND
PACIFICORP DBA ROCKY MOUNTAIN
POWER TO N)DRESS AVOIDED COST
ISSUES AND TO ADJUST THE PUBLISHED
AVOIDED COST RATE ELIGIBILITY CAP.
CASE NO. GNR.E.1O-04
)
)
)
)
)
)
)
0RDER NO. 32176
On November 5, 2010,Idatro Power Company, Avista Corporation, and PacifiCorp
dba Rocky Mountain Power filed a Joint Petition requesting that the Commission initiate an
investigation to addrsss various avoided cost issues related to the Commission's implementation
of the Public Utility Regulatory Policies Act of 1978 (PURPA). PURPA was intended to
encourage the development of renewable energy technologies as altematives to the use of fossil
fuels and the construction of new generating facilities by electric utilities. Section 210 of
PURPA generally requires electric utilities to purchase power produced by qualiffing facilities
(QFs) at "avoided cost" rates set by the Commission. "Avoided costs" are those costs which a
public utility would otherwise incur for electric power, whether that power was purchased from
another source or generated by the utility itself. l8 C.F.R. $ 292.101(bX6).
While ihe investigation is underway, the Petitioners also moved the Commission to
"lower the pubtished avoided cost rate eligibility cap from l0 aMW to 100 kW [to] be effective
immediately. . . ." Petition at 7. Pursuant to PURPA regulations issued by the Federal Energy
Regulatory Commission (FERC), this Commission must publish avoided cost rates for small QFs
with a design capacity of 100 kW or less. However, the Commission has the discretion to set the
published avoided cost rate at a higher capacity amount - commonly referred to as the
"eligibility cap." l8 C.F.R. $ 292.304(cXl) and (2). When this case was initiated, the eligibility
cap for the published avoided cost rate was set at l0 aMW. Order No. 30488. The avoided cost
rates for purchases from QFs larger than the eligibility cap (10 aMW) must be individually
negotiated by the QF and the public utility. [n a negotiated contract, the utility's avoided cost is
the starting point for rate negotiations.
As set out in greater detail below, the Commission grants in part and denies in part
the Petitioners' Motion to reduce the eligibility cap. The Commission temporarily reduces the
IoRDER NO. 32176
Case 1:18-cv-00236-REB Document 4-l_3 Filed 06/25118 page 2 ot L2
eligibility cap for published avoided cost rates from l0 aMW to 100 kW for wind and solar QFs
only.
BACKGROUND
A. The Joint Petilion
The Petition states that ldaho Power currently has more than 208 MW of wind
generation and an additional 264 MW of Commission-approved QF wind contracts (many of
which are scheduled to be online by December 31,2010). The Petition asserts that Idaho Power
could have 1,100 MW of wind-powered generation on its system in the near terrn that would
exceed the minimum loads experienced on ldaho Power's system this year. "Cumulatively, this
amount of generation would exceed any other single source of generation - hydro, coal, natural
gas, or renewables - that exists on Idaho Power's system." Id. al4.
Rocky Mountain asserts that it is in a similar situation. The Petition declares that in
2005, Rocky Mountain had a single 20 MW wind QF contract and less than 50 MW of wind QF
requests in ldaho. "As of today, [Rocky Mountainl has 64 MW of wind QF contracts executed;
however, none have achieved commercial operation, and another 358 MW of standard wind QF
contracts are proposed," Rocky Mountain maintains that the majority of these proposed standard
wind QF contracts are configured to interconnect with the utility's Goshen substation okhere
integration of the QF resource as a Network Resource for serving load could be impacted by
transmission constraints across Path C if the wind powcr is exported to RMP's northern Utah
load." Id. at 4.
The Petition states that many current QF projects are "large, utility-scale wind farms
that are broken up into l0 aMW increments in order to qualify for the published [avoided cost]
rates." Id. at 5. 'I"he Petition maintains that the typical wind developer is no longer
"unsophisticated" about the QF process and small projects (0.5-1.5 MW)'oare no longer the
norm." Id. The Petitioners assert that it is "commonplace" lor wind developers seeking QF
contracts with ldaho Power and Rocky Mountain to aggregate "six or more 'projects' totaling
100 to 150 MW of nameplate rating, and the multiple projects to all share interconnection
facilities to one common utility delivery point." /d
B, Procedural History
After the liling of the Joint Petition, the Commission received several Petitions to
Intervene. The following parties requested, and were granted, intervenor status: Cedar Creek
2ORDER NO. 32176
Case 1:18-cv-00236-REB Document 4-l-3 Filed 06/2511-8 Page 3 oI L2
Wind, LLC; Exergy Development Group of ldaho; Grandview Solar Il; Idaho Windfarms, LLC;
Interconnect Solar Development, LLC; the Norlhwest and Intermountain Power Producers
Coalition (NIPPC); Renewable Energy Coalition (Coalition);' Intermountain Wind, LLC; J.R.
Simplot Company; Board of Commissioners of Adams County (Adams County); Birch Power
Company; Dynamis Energy, LLC; North Side and Twin Falls Canal Companies (Canal
Companies); and Blue Ribbon Energy, LLC.
In addition to the Petitions to lntervene, the Commission also received four answers
to the Joint Petition. Answers were tiled by NIPPC, the Coalition, Simplot, and the Milk
Producers of ldaho.2 The answers raise both procedural and substantive objections to the
Petitioners' request to lower the eligibility cap for the published avoided cost rate to 100 kW
nameplate capacity. 'I'he Milk Producers, Simplot and the Coalition also argue in their answers
that the lowering of the eligibility cap should not apply to non-wind QFs. Simplot asserts that
the Joint Petition does not ret'er to any "problems associated with biomass, cogeneration, solar,
small hydro, waste-to-energy pro.iects or any other type of PURPA eligible QF resource. These
other types of [Qf] resources have very different generating characteristics from wind and
should therefore not be caught in the overly broad sweep of thc Joint Motion." Simplot Answer
at 3.
C. The Commission's Notice of Petition
On December 3, 2010, the Commission issued an Order and Notice of Joint Petition.
After reviewing the Joint Petition and the answers, the Commission declined the Motion to
immediately reduce the eligibility cap. Instead, the Commission determined that it would
expeditiously consider the Petitioners' request to reduce the eligibility cap through the use of
Modified Procedure (written comments) and oral arguments. The Notice established an
intervention deadline of December 17, 2010; set deadlines for initial comments and reply
comments of December 22, 2A10, and January 19, 2011, respectively; and scheduled an oral
argument for January 27 ,201I . Order No. 321 3 1 .
The Commission specifically requested comment and argument regarding: (l) the
advisability of reducing the published avoided cost eligibility cap; (2\ if the eligibility cap is
rThe Coalition is an Oregon-based consortium <lfexisting base load hydroelectric and biomass QFs located in the
Northwest
2 The Milk Producers did not file a Petition to lntervene and its "Answer" was a "letter in opposition." The Milk
Producers letter, therelbre, will been treated as a comment.
3ORDERNO.32176
Case L:18-cv-00236-REB Document 4-l-3 Filed 06/25118 Page 4 of L2
reduced, the appropriateness of exempting non-wind Qf projects from the reduced eligibility
cap; and (3) the consequences of dividing larger wind projects into 10 aMW projects to utilize
the published rate.3 The Commission also determined that its decision regarding the Joint
Petitioners' Motion to reduce the published avoided cost eligibility cap would become effective
on December 14,2010.
PROCEDURAL AND SUBSTANTIVE MOTIONS
Before and at the January 27, 2011 oral argument, several parties made various
motions. The motions are addressed in greater detail below.
A. Motion to Strike
With its reply comments filed on January 19,2011, Rocky Mountain Power prefiled
the direct testimony of Bruce Griswold. On January 21,2011, NIPPC filed a Motion to Strike
Griswold's testimony. NIPPC renewed its Motion to Strike at oral argument. Given NIPPC's
Motion, Rocky Mountain Power withdrew Mr. Griswold's testimony. Tr. at 11.
B. Motionfor a Technicol Hearing
In their initial comments and reply comments, both NIPPC and Adams County
requested that the Commission conduct a technical hearing in order to allow the parties to
present witnesses. Several times during oral argument NIPPC and Adams County referenced the
need for a technical hearing, but did not renew their Motion.
The Commission finds that the parties' positions have been adequately presented
through initial comments, reply comments and oral argument, and that a technical hearing is not
necessary to resolve the question of whether the eligibility cap should be reduced. We also find
that conducting a technical hearing would unnecessarily delay the decision making process.
Consequently, the Commission denies the parties' requests for a technical hearing. We find that
the comments and oral argument provide sufficient information to resolve the policy question of
temporarily reducing the eligibility cap.
C. Request to Take Ollicial Notbe
At oral argumenl NIPPC distributed a document entitled "Request for Official
Notice" and asked the Commission to take offrcial notice of a host of documents listed in the
"Request" including approximately 14 PUC Orders, several FERC orders, and the "Filings,
3 The Commission intends to consider the other avoided cost issues identified by the Petitioners and other interested
parties in subsequent proceedings.
ORDERNO.32176 4
Case 1:18-cv-00236-REB Document 4-13 Filed 06/25118 Page 5 ot L2
Testimony, Exhibits and Orders" in 24 different PUC dockets. In addition, NIPPC orally asked
that the Commission take oftrcial notice of "three documents related to coal costs that support
our comments": a setllement agreement of the Environmental Protection Agency; an Oregon
State Senate Natural Resources Committee report on greenhouse gas emissions; and
MidAmerican Holdings Company's comments from a coal combustion residual rulemaking. Tr.
at7-8. The Commission acknowledged official notice of its own notices and orders. Id. at9.
Pursuant to our Procedure Rule 263.01, the Commission may take oftrcial notice at
hearing and in its Orders of:
a. (l) Its own orders, notices. rules, certificates and permits, and (2) those of
any other regulatory agency, state or lederal;
b. (l) matters of common knowledge, (2) technical, financial, or scientific
facts established and published in accepted authorities or in the
Commission's specialized knowledge, and (3) matters judicially
noticeable; and
c. Data contained in periodic reports of regulated utilities filed with the
Commission or federal regulatory agencies,
However, "[u.lnless otherwise agreed to by the parties and approved by the presiding officer,
parties requesting .the C.ommission to take offlcial notice of documenls. {nust submit those
documents to the Commission in the manner prescribed for documents in Rule 262." Rule
2$.A2 (emphasis added). Although NIPPC presented the Commission with a list of citations to
documents, it did not actually provide copies of the requested documents to the Commission or
to the pa(ies. NIPPC also advised the Commission that all of its requested documents met the
par.Imeters of Rule 263.01, 'l'r. at 10. However. Rule 263.01 pertains to matters that the
Commission may oflicially note. Parties requesting oftlcial notice must comply with Rule
263.02 and provide copies of the documents for which it seeks official notice. The purpose of
providing copies to parties is to afford the parties an opportunity to review, and if necessary,
contest the offered material. Id. Moreover, the majority o1' the "filings, testimonies and
exhibits" from the 24 PUC dockets are not documents or infurmation subject to official notice
per Rule 263. Notwithstanding the Commission's acknowledgement of taking offrcial notice of
its own notices and orders, the Commission denies NIPPC's request to take official notice of the
remainder of its listed documents, including the three additional documents regarding coal costs.
5ORDERNO.32176
Case L:18-cv-00236-REB Document 4-l-3 Filed 06/2511_8 Page 6 oI L2
D. Motion to Dbmiss
During oral argument, Blue Ribbon Energy asked the Commission to dismiss the
utilities' Joint Petition. Blue Ribbon articulated three bases upon which the Commission should
dismiss the Petition: (l ) the utilities' failed to file the Petition in good fhith; (2) the utilities have
not presented a basis upon which relief can be granted; and (3) the utilities' Joint Petition
constitutes an effort by the utilities to terminate their obligations to enter into PURPA contracts.
Tr. at 74. The utilities responded that their Joint Petition was made in good faith and based on
verifiable evidence that large QF projects are receiving an avoided cost rate in excess of the
utility's true avoided cost. ld. at 82. Rocky Mountain Power specifically pointed out that the
costs of QF contracts are borne by ratepayers and that the utilities were acting in the ratepayers'
interest. Id. at 83.
The Commission denied Blue Ribbon's request for dismissal of the Petition. The
Commission stated that the utilities' Petition was based on the Commission's authority to set the
eligibility cap for QF projects . Iel. at 87. We reject Blue Ribbon's argument that a reduction in
the eligibility cap relieves utilities of their obligation to purchase QF'power. Tr. at 76-77,81.
Finally, Blue Ribbon's argument regarding the 80 MW maximum size of a QF is not relevant to
the cap size of the standard published rate. Cf. 18 C.F.R. $$ 292.204(a) and 29230a(c).
COMMENTS AND ORAL ARGUMENT
Comments and arguments were presented by developers of QF I'acilities, Sta[ each
of the Petitioners, and other interested persons. Idaho Power, Avista, and Rocky Mountain
Power all propose lowering the threshold for PURPA published avoided cost rates from l0 aMW
to 100 kW for all QF resources. 'Ihe utilities argue that the number of QFs currently requesting
contracts under the published I0 aMW avoided cost rate is excessive and the utilities' ability to
continue to accept the QF energy without negatively impacting the electric system and the
utilities' customers is at risk. Specifically, the utilities cite large wind QF-s as the source of their
current predicament.
Idaho Power stated that "the current application of the [published rate] methodology,
including the l0 average megawatt cap, has several problems associated with it that have
potentially huge ramifications or implications for our customers. ." Tr. at 13. Avista
maintained that reducing the eligibility cap to 100 kW "is the most practical, simplest, most
easily implemented and enforced solution to the issues" that the utilities are facing. ld. al3l.
6ORDER NO. 32176
Case 1:18-cv-00236-REB Document 4-l-3 Filed 06/2511-8 Page 7 of L2
When addressing the disaggregation issue raised by the Petition, Roclry Mountain
Power argued that a disaggregated wind project "looks a lot like a large wind QF project. Except
for additional [electric] meters, the differences are almost purely legal." Id. at 33. Rocky
Mountain Power explained that'"the large QFs have an option and this option is valuable and that
value comes at the expense of ratepayers." Id. at 36. The Petitioners also maintain that it is
important that any change in the eligibility cap be applied equally for all three utilities in order to
prevent a utility not granted a reduction from disproportionately attracting a greater number of
QF project proposals.
Without exception, the Intervenors oppose reduction of the published avoided cost
rate eligibility cap. 'fhe Intervenors generally contend that lowering the threshold is an
imposition on legally permissible QF projects that cannot absorb the costs of negotiating with a
utility and the increased difficulty of obtaining financing created by the uncertainty of the
payments they will receive under PUPJA contracts negotiated through use of the Integrated
Resource Plan (IRP) Methodology.
Dynamis, Adams County, Birch Power, Interconnect Solar, the Canal Companies, the
Coalition and Commission Staff urge the Commission to narrowly apply any reduction in
eligibility cap to the resource identified by the utilities as causing the immediate problem: wind
QFs. Interconnect Solar distinguishes its resource from wind by arguing that "[s]olar power is
not 'intermittent' and instead has a firm nature to its production that directly matches a utility's
need for energy and capacity during heavy load hours." Interconnect Solar Comments at 2.
Even lntermountain Wind, a self-professed family operation, maintains that "[a]n overly broad
eligibility reduction would harm projects that are legitimately entitled access to PURPA
published avoided cost rates and would adversely affect the development of renewable energy in
Idaho." Intermountain Wind Comments at 5. lntermountain Wind also argues that, "[w]hether
PURPA published rates should be availablc to commercial scale projects may be fairly
debatable. Whether &ose rates should be available to parties such as Intermountain is not." .Id.
at 4.
NIPPC maintains that a reduction in the published avoided cost rate eligibility cap is
not warranted for any resource because the utilities have not demonstrated that the published
avoided cost rate is too high. NIPPC fuither argues that, although the utilities have identified
large wind projects as the immediate source of the problem, the utilities do not claim that they
7oRDER NO. 32176
Case 1:l-8-cv-00236-REB Document 4-13 Filed 06/25118 Page 8 ot L2
would be unable to integrate the amount of wind currently in the queue. NIPPC and Adams
County claim thal disaggregation "is irrelevant and a non-issue, because if the avoided cost rates
are accurately set, the rates for an IRP methodology avoided cost project would be essentially the
same as the rates fbr a non-lRP methodology avoided cost project." Tr. at 49. They go on to
assert that "[nJo developer is going to go in lbr the IRP methodology knowing that it sets the
avoided cost rate under actual avoided cost rates if they're able to take advantage of the true
avoided cost rate. . . ." Id. at 51.
NIPPC and lntermountain Wind also oppose the Commission's decision to implement
a December 14, 2010, effective date. Intermountain Wind argues that the Commission "does not
have authority to look back in time and rearange legal rights that existed on a certain day in the
past." Intermountain Wind Rcply at 4. NIPPC contends that a December 14 effective date
"violates the filed ratc doctrine and the prohibition against retroactiye ratemaking," NIPPC
Comments at 8.
Commission Staff asserts that, although large wind projects are not inherently
undesirable, the disaggrcgation of multiple, aft'iliated QFs seeking to qualifu for published rate
contracts raises concerns. Staff contends that "considering each l0 aMW QF individually for
purposes of eligibility for [published] avoided cost rates creates an artificial mismatch between
the method used to establish a project's avoided cost rates and the collective size of the project."
Staff Comments at 4. Staff emphasizes that, "[w]hen large QFs are added to a utility's
renewable portfolio, but the QFs disaggregate in order to qualify for the published rate, the
avoided cost paid to the QF becomes inaccurate, because under the published rate methodology,
there's no n:echanism to reflect the utility's reduced avoided cost." Tr. at 88. Staff further
maintains that obligating utilities to accept generation that lhey do not need unnecessarily
increases the rates paid by the utilities' customers. Stalf Comments at 5. Staf} insists that the
problem described by the utilities is real and requires imrnediate attention.
DISCUSSION AND FINDINGS
The ldaho Public Utilities Commission has jurisdictir:n over this matter pursuant to
the authority and power granted it under Title 6l of the ldaho Cocle and the Public Utility
Regulatory Policies Act of 1978 (PURPA). The Commission has authority under PURPA and its
implementing regulations of FERC to set avoided costs, to establish standard published avoided
IoRDER NO. 32 r76
Case 1:18-cv-00236-REB Document 4-13 Filed 06/2511-8 Page 9 ot L2
cost rates, to order electric utilities to enter into fixed-term obligations for the purchase of energy
from QFs, and to implement FIiRC regulations.
Based upon the record, the Commission finds that a convincing case has been made
to temporarily reduce the eligibility cap for published avoidetl cost rates from l0 aMW to I00
kW for wind and solar only while the Commission further investigates the implications of
disaggregated QF projects,a We maintain the eligibility cap at l0 aMW for QF projects other
than wind and solar (including but not limited to biomass, small hydro, cogeneration,
geothermal, and waste-to-energy). The Petitioners have not convinced us that lowering the
eligibility cap for these other QF technologies is necessary or in the public interest.
Wind and solar resources present unique characteristics that differentiate them from
other PURPA QFs. Wind and solar generation, integration, capacity and ability to disaggregate
provide a basis for distinguishing the eligibility cap tbr wind and solar from other resources.
Furthermore, these intermittent resources must be "firmed" by ancillary services to assure system
reliability. Temporarily reducing the eligibility cap for wind and solar while we continue our
investigation, will still allow wind and solar projects larger than 100 kW to negotiate avoided
cost rates using the IRP Methodology.
Lowering the cap to 100 kW does not change the published avoided cost rates
established in Order No. 31025 (March 16,2010). The published rate for wind and solar QFs
will still be available for projects 100 kW or smaller and as we have stated previously, will be
the starting point for negotiating an avoided cost rate fbr larger wind and solar QF projects.
At a minimum, FERC regulations require that standard or published rates be set for
purchases from QFs with a design capacity of 100 kW or less. These regulations also grant the
Commission the discretion to set the published rate eligibility cap at a higher level. l8 C.F.R. $
292.304(c). Whether it is a published rate or a rate for a larger QF', FERC requires that the
avoided cost rates for all QF purchases be just and reasonable to utility customers and in the
public interest; and not discriminate against qualifying cogeneralion and small power production
facilities. l8 C.F.R. $ 292.30a(aXl). In establishing a published rate, the Commission may
differentiate among QFs using various technologies on the basis of supply characteristics of the
different technologies; the availability of capacity and cnergy during daily and seasonal peaks;
n Other avoided cost issues identified in thc Joint Petition, including utiliz"ation and/or modification of the IRP
Methodology, will be considered after a determination regarding disaggregation.
9oRDER NO. 32175
Case 1:18-cv-00236-REB Document 4-13 Filed 06/25ll_8 Page I0 ot L2
dispatchability; reliability; and other factors. 18 C.F.R. S 292.304(cX3); In re California PUC,
Order Granting Clarification and Dismissing Rehearing,l33 FERC 1[61,059 (October 21,2010)
at !i 23. Contrary to NIPPC's assertions, trERC rules insist that rates fbr purchases from QFs be
just and reasonable to ratepayers and in the public interest * not in the interest of the QFs.
This Commission established a clear and reasoned distinction between small and
Iarge QFs in 1995 when it adopted the use of the IRP methodology fbr larger QFs. Order Nos.
25882,25883, 25884. The Commission explained that requiring larger QF projects "to prove
their viability by market standards ensures that utilities will not be required to acquire resources
priced higher than would result from a least cost planning [RfP] process. Ralepayers will not be
disadvantaged and QIrs will be treated fairly and consistently with the requirements and goals of
PURPA." Id. at 6. T'he purpose, then and now, of distinguishing between small and large QFs
with the application of the IRP methodology for large QF projects is to more precisely value the
energy being delivered * not encourage or discourage QF resources.
We note that parties have challenged the accuracy of the IRP Methodology. We
believe that the IRP Methodology appropriately assesses when the QF'is capable of delivering its
resources against when the utility is most in need of such resources. The resultant pricing is
reflective of the value of QIr energy to the utility. Unfortunately, the IRP Methodology is being
under-utilizrd because our Orders do not currently prevent QF developers from breaking up what
is truly a single, large project into several small QF projects in order to avail themselves of what
may sometimes be more favorable, published avoided cost rates.
Based on the foregoing, the Commission temporarily reduces the eligibility cap for
published avoided cost rates from l0 aMW to I00 kW for wind and solar resources only,
effective December 14, 2010. Arguments that the Commission is without authority to implement
its eligibility cap reduction on December l4 are unpersuasive fbr several reasons. First, the filed
rate doctrine and rule against retroactive ratemaking do not extend "to cases in which [parties]
are on adequate notice that resolution of some specific issue may cause a later adjustment to the
rate being collected at the time of service." Natural Gas Clearinghouse v. FERC,965 F,Zd
1066, 1075 (D.C.Cir.1992). "The goals of equity and predictability are not undermined when the
Commission warns all parties involved that a change in rates is only tentative and might be
disallowed." OXY USA, Inc. v. F'ERC,64 l'.3d 679, 699 (D.C.Cir.1995). The Commission
provided notice on December 3, 2010. that its decision regarding the published avoided cost rate
ORDER NO. 32176 l0
Case 1:18-cv-00236-REB Document 4-13 Filed 06/25118 Page tL of L2
eligibility cap would become effective December 14, 2010. One need look no further than the
abundance of firm energy sales agreements filed with the Commission within that time frame to
realize that the parties took the Commission's notice of its effective date seriously.
Consequently, adequate notice was provided to all parties that the eligibility cap was subject to
change.
Second, as previously mentioned, the published avoided cost rates established in
Order No. 31025 have not changed. What has temporarily changed is the availability of
published rates to wind and solar QFs. Wind and solar projects larger than 100 kW are still
entitled to PUITPA contracts and avoided cost rates that reflect the unique characteristics of their
resource
This Commission is supportive of all small power producers contemplated by
PURPA, including wind and solar, and it is not the Commission's intent to push small wind and
solar QF projects out of the market. With this goal in mind, the Commission is initiating
additional proceedings to investigate and determine in a finite timeframe requirements by which
wind and solar QFs can obtain a published avoided cost rate without allowing large QFs to
obtain a rate that is not an accurate reflection of a utility's avoided cost for such projects. It is
just and reasonable and in compliance with the intent and mandate of PURPA that large QF
projects avail themselves of economies of scale. Such an approach will assist the Commission in
fulfilling its obligations under PURPA.
The Commission directs the parties to meet informally within l0 days of the issuance
of this Order to establish an expedited schedule, including dates for discovery, prefiled direct
testimony and rebuttal that will accommodate a technisal hearing during the week of May 9,
2}ll. Specifically, the Commission solicits information and investigation of a published
avoided cost rate eligibility cap skucture that: (l) allows small wind and solar QFs to avail
themselves of published rates for projects producing l0 aIvIW or less; and (2) prevents large QFs
from disaggregating in order to obtain a published avoided cost rate that exceeds a utility's
avoided cost.
ORDER
IT IS HEREBY ORDERED that the Petitioners' Motion to reduce the eligibilif cap
for published avoided cost rates is granted in part and denied in part. The Commission
temporarily reduces the eligibility cap for published avoided cost rates from l0 aMW to 100 kW
ORDER NO . 32176 lt
Case 1:18-cv-00236-REB Document 4-l-3 Filed 06/25118 Page t2 of L2
for wind and solar QFs only, effective December 14,2010. The Petitioners' Motion to reduce
the published eligibility cap for other QFs is denied.
IT IS FURTHER ORDERED that NIPPC's request for the Commission to take
oflicial notice of our Notices and Orders is granted and the request regarding the other
documents is denied as set out above.
IT IS FURTHER ORDERED that the parties meet informally within l0 days of the
issuance of this Order to establish a schedule consistent with a technical hearing to occur during
the week of May 9,201l. The Commission directs the parties to address disaggregation, as more
fully described above.
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 ldaho Code $ 6l-626.
DONE by Order of the ldaho Public Utilities Commission at Boise, Idaho this '7+4
day of February 2011.
KEMPTON,
MARSHA H. SMITH, COMMISSIONER
MACK A.
ATTEST:
/)r*fi rL-r"Ni6I D. i;*e{/
C6mmission Secretary
O:GNR-E- | O-M_ks_Final
ORDER NO. 32176 t2
Case 1:l-8-cv-00236-REB Document 4-14 Filed 06/2511-8 Page 1- of 6|9*ooftheSecretary
Service Date
December 18,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN TIIE MATTER OF THE COMMISSION'S
REVIEW OF PURPA QF CONTRACT
PROVISIONS INCLUDING THE
STTRRoGATE AVOTDf,D RESOURCE (SAR)
AND INTEGRATED RESOURCE PLANNING
(rRP) METHODOLOGIES FOR
CALCULATING AVOIDED COST RATES.
CASE NO. GNR.E.Il-03
ORDER NO. 32697
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This case began on November 5, 2010, upon a filing by Idaho Power Company,
Avista Corporation, and PacifiCorp dba Rocky Mountain Power requesting that the Commission
investigate various avoided cost rate issues under the Public Utility Regulatory Policies Act of
1978 (PURPA). Phase I considered eligibility to published avoided cost rate contracts. In
February 2011, Phase II undertook an investigation of disaggregation and its effect on published
avoided cost rates.
On September l, 201l, the Commission issued a Notice of Review that initiated this
most recent proceeding to investigate the standard terms of PURPA power purchase agreements.
Order No. 32352; Idaho Code $ 61-503. This investigation (Phase III) was not limited to the
surrogate avoided resource (SAR) and Integrated Resource Planning (IRP) methodologies for
calculating published avoided cost rates. Topics such as the dispatchability of varying resources,
curtailment options, integration costs, renewable energy credits, delay security and liquidated
damages, timing and schedule of negotiations, and contract milestones wers also at issue.
The Commission set an intervention deadline of September 8,2011. Order No.
32352. All parties of record from the Commission's Phase II PURPA investigation (GNR-E-l1-
01) were automatically granted party status. On September 21,2011,a Notice of Parties was
issued. On November 2, 2011, the Commission issued the procedural schedule for this case
proposed and ageed to by the parties. Order No. 32388. Direct and rebuttal testimony was
filed, legal briefs were submitted and a three-day technical hearing commenced on August 7,
201'2. Subsequent settlement discussions were held at the directive of the Commission. Order
No. 32617. On October 16,2012, a partial settlement among some of the parties was submitted
to the Commission for approval.
I0RDERNO. 32697
Case 1:1.8-cv-00236-REB Document 4-14 Filed 06/2511-8 Page 2 of 69
By this Order, and as set out in greater detail below, the Commission sets published
and negotiated avoided cost rate parameters. The Commission further establishes and defines
numerous contract terms for standard power purchase agreements entered into between regulated
utilities and qualiffing facilities (QFs).
BACKGROUND
A. The foint Petition
GNR-E-10-01(Phase I)
On November 5, 2010, Idaho Power Company, Avista Corporation, and PacifiCorp
dba Rocky Mountain Power filed a Joint Petition requesting that the Commission initiate an
investigation to address various avoided cost issues related to the Commission's implementation
of PURPA. While the Commission pursued its investigation, the utilities also moved the
Commission to "lower the published avoided cost rate eligibility cap from l0 aMW to 100 kW
[to] be effective immediately. . ." Id, citing Joint Petition at 7. When a QF project is larger
than the eligibility cap set for access to published avoided cost rates, the avoided cost rates for
the project must be individually negotiated by the QF and the utility using the Integrated
Resource Planning (IRP) Methodology.r Order No. 32176.
On December 3,2010, the Commission issued Order No.32l3l declining the
utilities' motion to immediately reduce the published avoided cost rate eligibility cap from l0
aMW to 100 kW. Order No.32l3l at 5. However, the Order did notifu pa(ies that the
Commission's decision regarding the motion to reduce the published avoided cost eligibility cap
would become efflective on December 14, 2010. Id. at 5-6,9.
Based upon the record in the GNR-E-10'04 case, the Commission subsequently found
that a "convincing case has been made to temporarily reduce the eligibility cap for published
avoided cost rates from l0 aMW to 100 kW fpr wind and solar only while the Commission
further investigates" other avoided cost issues. Order No. 32176 at 9 (emphasis in original). The
Commission also announced its intent to initiate additional proceedings to investigate and
address the disaggregation oflarge projects. Id. at ll.
' The purpose of utilizing the IRP Methodology for Iarge QF projects is to more precisely value the energy being
delivered. Id. at 10. The IRP Methodology recognizes the individual generation characteristics of each project by
assessing when the QF is capable of delivering its resources against when the utility is most in need of such
resources. Utilization of the IRP Methodology does not negate the requirement under PURPA that the utility
purchase the QF energy.
2oRDER NO. 32697
Case 1:18-cv-00236-REB Document 4-l-4 Filed 06/25118 Page 3 of 69
On reconsideration, the Commission affrrmed its decision to temporarily reduce the
eligibility cap for published avoided cost rates from l0 aMW to 100 kW for wind and solar
projects. Order No.32212. Thus, the eligibility cap for published avoided cost rates for wind
and solar QF projects was set at 100 kW effective December 14,2010. No party appealed the
decision to reduce the eligibility cap.
B. Disaggregation
GNR-E-II-0| (Phase II)
On February 25, 2011, consistent with its stated intent to investigate the issue of
disaggregation, the Commission issued a combined Notice of Inquiry, Notice of Intervention
Deadline, Notice of Scheduling, and Notice of Technical Hearing. Order No. 32195.
Specifically, the Commission solicited information and initiated an investigation of a published
avoided cost rate eligibility cap structure that: (l) would allow small wind and solar QFs to avail
themselves of published rates for projects producing l0 aMW or less; and (2) would prevent
large wind and solar QFs from disaggregating into small projects in order to obtain published
avoided cost rates that exceed a utility's actual avoided cost. /d.
In initiating Phase II, we stated that "[t]his Commission is supportive of all small
power producers contemplated by PURPA, including wind and solar, and it is not the
Commission's intent to push small wind and solar QF projects out of the market." Order No.
32176 at 11. The Commission was concemed that large QF projects were disaggregating into
smaller QF projects in order to be eligible for published avoided cost rates that may not be just
and reasonable to the utility customers nor in the public interest. Order No. 32195 at 3. The
purpose of distinguishing between small and large QFs with the application of the IRP
Methodology for large QF projects is to more precisely value the energy being delivered to the
utility. Id. at l.
After careful consideration, the Commission ultimately determined that it was
appropriate to maintain the 100 kW eligibility cap for published avoided cost rates for wind and
solar QFs. Order No.32262. Wind and solar projects larger than 100 kW are still entitled to
PURPA contracts with avoided cost rates calculated through use of the IRP Methodology. The
Commission found that any attempt to implement criteria in an effort to prevent disaggregation
"would be met by attempts to circumvent such criteria." Id. at 8. The Commission emphasized
that PURPA and this State's published rate structure were never intended to promote large scale
3oRDERNO. 32697
Case 1:18-cv-00236-REB Document 4-l-4 Filed 06/25118 Page 4 of 69
wind and solar development to the detriment of utility customers. We further found that a 100
kW threshold for wind and solar QFs would provide a certainty to the parties in negotiations that
disaggregation criteria would not. Id. "While we recognize the impact that this decision will
have on small wind and solar projects, it would be erroneous, and illegal pursuant to PURPA, for
this Commission to allow large projects to obtain a rate that is not an acsurate reflection of the
utility's avoided cost for the purchase of the QF generation." /d. , citing Rosebud Enterprises v.
Idaho PUC, 128 Idaho 609, 623,917 P.2d 766,780 (1996), ciring Connecticut Light & Power
Co.,70 FERC 61,012 (1995), reconsid. denied, Tl FERC 61,035 (1995).
At the conclusion of the Phase II case the Commission stated its intent to initiate
additional proceedings to allow the parties to investigate and analyze both the SAR Methodology
and the IRP Methodology (GNR-E-I l-03, Phase III). On September l, 2011, the Commission
issued a Notice of Review to investigate the standard terms of PURPA power purchase
agreements.
C. GNR-E-|1-03 (Phase III) Procedural History
The Commission initiated Phase III to investigate various PURPA topics including,
but not limited to: the surrogate avoided resource (SAR) methodology, the Integrated Resource
Planning (lRP) Methodology, the dispatchability of varying resourses, curtailment options,
integration costs, renewable energy credits, delay security and liquidated damages, timing and
schedule of negotiations, and consideration of contract milestones. Order No. 32352.
The Commission set an intervention deadline of September 8,2011. All parties of
record from the Phase II investigation (GNR-E-I l-01) were &utomatically granted party status in
Phase IlI. Id. at 5. On September 21,2011, a Notice of Parties was issued.2 On November 2,
2011, the Commission issued a procedural schedule proposed and agreed to by the parties.
Order No. 32388. In accordance with the schedule, the utilities filed their individual direct
testimonies on January 21,2012.
On March 12,20lZ (prior to the filing of direct testimony by Commission Staff and
Intervenors), Idaho Power filed a Motion for Temporary Stay of Its Obligation to Enter into New
Power Purchase Agreements with Qualifoing Facilities. Idaho Power argued that its prefiled
testimony established prima facie proof that Idaho Power's current avoided cost rates were not
accurate; and that without adequate interim relief from its obligation to purchase, Idaho Power
2 Several parties were also granted intervenor status aftor the deadlins for intervention had passed.
4oRDERNO. 32697
Case 1:18-cv-00236-REB Document 4-14 Filed 06/2511-8 Page 5 of 69
customers were likely to suffer substantial harm. The Company asserted that the balance of
harms favored granting interim relief and that good cause existed to grant immediate relief on an
interim basis. Idaho Power filed affidavits in support of its Motion.
On March 14,2012, Rocky Mountain Power filed a Request to Join and Response to
Idaho Power's Motion. The Idaho Conservation League, Snake River Alliance, Exergy, and J.R.
Simplot Company each filed responses opposing Idaho Power's Motion and asked that the
request for a stay be dismissed in its entirety. In order to give all parties an adequate opportunity
to respond to the assertions made by Idaho Power, but in consideration of the expedited nature of
ldaho Power's request, the Commission convened an oral argument on March21,2A12. Order
No. 32495.
On March 22,2012, the Commission issued Order No. 32498 denying Idaho Power's
Motion for a Temporary Stay of its mandatory purchase obligation. However, the Commission
found that the avoided cost rate methodologies "as utilized and applied by Idaho Power, do not
currently produce rates that reflect Idaho Power's avoided costs and are notjust and reasonable,
nor in the public interest." Order No. 32498 at 2. Therefore, the Commission ordered that,
effective March 21,2012, and continuing until the Commission issues its final Order in Phase
III, "contracts for all projects over 100 kW entered into by ldaho Power and presented to this
Commission for approval will be individually evaluated with regard to all terms contained
therein." /d,
Thereafter, direct testimony was filed by Commission Staff and numerous
intervenors. On July 6, 2012, rebuttal testimony was simultaneously filed by all parties and
subsequent legal briefs were also submitted. A three-day technical hearing convened on August
7, 2012. The following parties appeared by and through their respective counsel or
representative:
Avista Corporation
Idaho Power Company
PacifiCorp dba Rocky Mountain Power
Commission Staff
Michael G. Andre4 Esq
Donovan Walker, Esq.
Jason Williams, Esq.
Daniel Solander, Esq.
Kristine Sasser, Esq.
5oRDER NO. 32697
Case 1:18-cv-00236-REB Document 4-l-4 Filed 06/25118 Page 6 of 69
Northwest and [ntermountain Power
Producers Coalition (NIPPC); Clearwater
Paper Corp; J.R. Simplot Co.; Exergy
Development Group of ldaho, LLC; Grand
View Solar II; Board of County
Commissioners of Adams County
Dynamis Energy, LLC;
Renewable Energy Coalition
lntermountain Wind, LLC; Idaho
Windfarms, LLC; Renewable Northwest
Project; Ridgeline Energy, LLC
North Side Canal Company; Twin Falls
Canal Company; Big Wood Canal
Company; American Falls Reservoir
District No. 2
Idatro Conservation League
Snake River Alliance
Idaho Wind Partners [, LLC
Mountain Air Projects, LLC
Interconnect Solar Development
Blue Ribbon Energy
Birch Power Company
Energy Integrity Project
Peter J. Richardson, Esq.
Gregory M. Adams, Esq.
Ronald L. Williams, Esq.
Dean J. Miller, Esq.
Tom Arkoosh, Esq.
Benjamin J, Otto, Esq.
Ken Miller
Deborah E. Nelson, Esq
Michael J. Uda, Esq.
Pro hac vice
Bill Piske
Aaron Jepson, Esq.
Ted Sorenson
Tauna Christensen
Following the technical hearing, settlement discussions were held at the directive of
the Commission. Order No. 32617. A partial settlement was negotiated and submitted to the
Commission for consideration. On October 16,2012, the Commission issued a Notice of Partial
Settlement and Request for Comment. Order No. 32665. Parties and the public were given until
October 25, 2012, to submit comments regarding the terms of the Settlement Stipulation.
Requests for intervenor funding were submitted by Big Wood Canal and American Falls
Reservoir; ICL; and North Side and Twin Falls Canal Companies.
6oRDERNO. 32697
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By this Order, and as set out in greater detail below, the Commission modifies
published (SAR) and negotiated (IRP) avoided cost rate methodologies. The Commission
further establishes and adopts numerous contract terms for power purchase agreements entered
into between regulated utilities and QFs consistent with PURPA and FERC regulations.
D. PURPA and Avoided Cost Rules
Congress enacted PURPA in 1978 in response to a national energy crisis. "[ts
purpose was to lessen the country's dependence on foreign oil and to encourage the promotion
and development of renewable energy technologies as altematives to fossil fuels." Order No.
32580 at 3, citing FERC v. Mississippt, 456 U.S. 742, 745-46 (1982). To encourage the
development of renewable facilities, PURPA requires that electric utilities purchase the power
produced by designated qualifoing facilities (QF$. "This mandatory purchase requirement is
often referred to as the 'must purchase' provision of PURPA." Id.,l6 U.S.C. $ 824a-3(b); l8
C.F.R. $ 292.303(a).3
Under the must purchase provision, the rate a utility must buy the power produced by
the QF is generally referred to as the "avoided cost" rate. "The avoided cost rate represents the
'incremental cost' to the purchasing utility of power which, but for the purchase of power from
the QF, such utility would either generate itself or purchase from another source." Order No.
32580 at3 citing Rosebud Enterprises v. Idaho PUC,l2S ldaho 624,917 P.Zd 781 (1996); l8
C.F.R. 5 292,101(bX6). The ldaho Supreme Court has held that the Commission has the
authority to implement PURPA and set the avoided cost rates. Rosebud, 128 Idaho at 612,917
P.2d at 769; A.W, Brown v. Idaho Power Company, l2l Idaho 812, 814, 828 P.2d 841, 843
(1992). In other words, PURPA requires that utilities buy the power output from QFs under a
federal rate mechanism (i.e., avoided costs) that is determined and implemented by state utility
commissions.
DISPUTED ISSUES
A, Surrogate Avoided Resource (SAR) Methodologt
PURPA and its implementing regulations require that published/standard avoided
cost rates be established and made available to QFs with a design capacity of 100 kW or less. l8
C.F.R. $ 292.30a(c). This Commission has utilized the SAR Methodology for computing
published avoided cost rates since the State began implementing PURPA. The SAR
3 There are exceptions to the must purchase provision but they are not applicable in this case.
7ORDER NO. 32697
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25118 Page 8 of 69
Methodology estimates a utility's avoided costs to be applied to QF generation by calculating the
cost of a surrogate avoided resource - currently the surrogate used is a natural gas-fired
combined-cycle combustion turbine (CCCT). Modifications to the methodology have occurred
over time. Input variables and price assumptions have been updated and modified in order to
enswe that the published avoided cost rates are an accurate reflection of a utility's avoided cost.
A QF's eligibility to published rates has ranged from the minimum requirement of a project
producing 100 kW or less to projects as large as l0 MW obtaining a published rate contract.
Currently, for Avista and Rocky Mountain Power, published avoided cost rates are
available for wind and solar projects producing 100 kW or less. All other resource types in
Avista and Rocky Mountain Power's service territories must generate 10 aMW or less to be
eligible for published rates. As of MarchZl,2012, all QFs contracting with ldaho Power for the
sale and purchase of energy under PURPA, regardless of resource type, must generate 100 kW or
less to be eligible for published rates. Order No. 32498. All QF projects generating more energy
than what is permitted for a published avoided cost rate contract are eligible under the IRP
Methodology to avoided cost rates based on the specific characteristics of each project.
l. Utilities. Avista and Rocky Mountain Power urge the Commission to maintain the
100 kW published rate eligibility threshold for wind and solar resources. These utilities reason
that using the SAR Methodology for small projects provides a simple and transparent means of
pricing and negotiation that minimizes transaction costs and allows small QFs to build projects.
Tr. at 187. Conversely, the utilities argue that, as the size and capacity of a project grows, the
appropriateness of the SAR Methodology diminishes. Rocky Mountain Power explains that this
is because a small project does not materially impact a utility's load and resource plan. Id. al
189. The valuation of energy from a larger project must take into consideration the utility's need
for the energy at the times when the resource is able to produce it because of the substantial
impact that a large project has on a utility's load and resource balance.
Avista and Rocky Mountain Power further contend that resources other than wind and
solar with a nameplate capacity of l0 MW or less be eligible for published avoided cost rates.
These utilities argue that a l0 aMW tlueshold, as is currently used, can be manipulated by
"ueative developers" to obtain eligibility to published rate contracts * as evidenced by
disaggregation. Id. al 9l-92. The utilities maintain that limiting published rates to smaller
projects with a nameplate capacity of l0 MW or less would limit arbitrage opportunities without
8ORDER NO. 32697
Case L:18-cv-00236-REB Document 4-14 Filed 06/2511-8 Page 9 of 69
compromising the intent of PURPA. Id. In addition, Avista supports annual updates of the fuel
price forecast utilized within the SAR model using the DOE EIA Annual Energy Outlook. /d. at
92.
Avista also supports separating energy and capacity payments and only paying a QF
for capacity when the energy is needed to serve a utility's load. Avista argues that making
capacity payments to a QF when the energy is not needed is a violation of the avoided cost
principle that the utility only pay what costs it avoids by purchasing the QF generation instead of
producing the energy itself. Tr. at 59. Avista reasons that if a QF cannot be relied upon to
generate energy during the utility's peak load hours, then the utility will be forced to build or
otherwise procure a resource that can be utilized to serve customers during those peak load
hours. Id. at 75, Thus, a utility's capacity needs are not avoided by purchase of such QF
generation. Resources must still be built to meet the utility's capacity needs. If capacity needs
are not being met by the QF resource then, Avista argues, the QF should not be compensated
with capacity payments.
Avista supports use of load and resource balances as reported in each utility's IRP in
order to determine when the utility becomes capacity deficient. Id. at 68. Capacity payments
would be included in payment of avoided costs in the year in which a utility's load and resource
balance shows that the utility is capacity deficient. Avista also suggests that load changes
between IRP filings (i.e., a new load forecast, new contract obligations, deliveries incurred since
the publication of the tRP), should be considered when determining a utility's capacity needs.
Id. Rocky Mountain Power proposes that capacity payments be included in avoided costs
coincident with the timing of its next deferrable resource. Id. at207.
Idaho Power maintains that the IRP Methodology should be used to set both
published and negotiated avoided cost rates. Id. at 483. Idaho Power argues that the SAR
Methodology does not correctly model the actual PURPA resource because the SAR utilizes a
CCCT in its calculation and assumes a very high annual capacity factor. Idaho Power further
states that the SAR does not properly value the energy at the times it is delivered to the utility.
Idaho Power contends that different types of generating resources have different operating
characteristics that offer different value to the utility and should be considered when setting an
avoided cost rate. Finally, Idaho Power asserts that the current published rates are not updated
on a regularly scheduled basis and, therefore, do not take into account changes in resources as
9oRDER NO. 32697
Case l-:18-cv-00236-REB Document 4-14 Filed 06/25118 Page 10 of 69
they are added to a utility's portfolio. For these reasons, Idaho Power does not support continued
used of the SAR Methodology in establishing published avoided cost rates.
Idaho Power recommends that the published rates be derived from the IRP
Methodology based on resource type and updated every two years as each IRP is compiled and
presented for Commission review. Idaho Power states that this is a more accuate method for
calculating avoided cost rates because it allows the utility to assign pricing within smaller time
frames which provides a better estimate of the actual value of the energy being delivered. Tr. at
484, Idaho Power continues to maintain that published rates be available to only projects
producing 100 kW or less. Idaho Power states that, because the published rates would be
updated only every two years, making published rates available to only truly small QF projects
reduces the risk to the utility's customers that they would be paying too much for the energy
produced.
Idaho Power maintains that an annual update of fuel price forecasts, through use of
the federal Energy Information Administration (EIA) Annual Energy Outlook, is an
improvement over the method currently used, but the utility suggests that the Commission go a
step further to also adopt the EIA's short-term forecast. Idaho Power contends that the EIA
annual forecast can become rapidly outdated in a quickly shifting natural gas market. Id. at 493.
Idaho Power supports payment of a capacity component at the time in which each utility's IRP
shows a capacity deficiency. Idaho Power maintains that this treatrnent is consistent with the
utility's requirement that it show resources are otsed and useful" in order to seek recovery from
customers. Idaho Power also argues that it "is an appropriate way to account for the ability of a
QF to come on-line at any time irrespective of a utility's need." Id. al5l3.
2. Commission Staff. Commission Staff maintains that the current SAR
Methodology, with some modifications, should continue to be used to set the published avoided
cost rates for PURPA contracts. Staffcontends that eligibility to published rates be set at 100
kW for wind and solar to address the unique characteristics of these resources that allows them to
disaggregate and receive higher, less accurate avoided cost rates for their energy, Staff argues
that, for rssources other than wind and solar, a l0 aMW threshold has been utilized successfully
for many years and should be maintained.
Staff proposes that the Commission update the fuel price forecast used in the SAR
model annually using the EIA Annual Energy Outlook instead of the current process utilizing
oRDERNO. 32697 l0
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25i1-8 Page 11 of 69
updates issued by the Northwest Power and Conservation Council. Staff contends that updating
fuel prices on a regularly scheduled, annual basis will produce a more accurate SAR calculation.
Staff further argues that the SAR model should be modified to account for a utility's surplus
energy periods in order to produce more accurate avoided cost rates. Staff proposes that the
SAR model identify when a utility is deficient in energy, in capacity, or both. Tr. at 1061. If a
utility is not deficient in energy when a QF delivers then the QF's energy payment should be
reduced by the cost of transmission and losses.
Staff also proposes that capacity payments vary based on resource type. By allowing
capacity payments to differ based on resource type, QF development would be encouraged or
discouraged based on when the energy is deliverable to the utility. Id. at 1062. QFs that provide
generation during peak hours (when the utility is most in need to serve its customers) would be
compensated based on their ability to deliver energy when it is most needed. Under this method
ofvaluing capacity, canal drop hydro rates are considerably higher than other resources because
canal drop projects provide capacity during peak summer hours and their capacity payment is
spread over relatively few total hours. Id. at 1064. Wind projects receive the lowest rates
because of wind's low on-peak capacity factor. Id. at 1065.
Staff maintains that, by using a QF's nameplate capacity in the SAR calculation,
capacity payments can be determined based on a project's ability to incrementally contribute to a
utility's capacity deficiency. Tr. at 1067-68. Through use of this method, a QF would be paid
earlier, but at an incremental rate, for its capacity contribution to the utility. This method also
recognizes that there are times when capacity provided in only one season does, in fact, translate
into capacity avoided by the utility. Id. at 1068. Under StafPs approach, capacity deficiency
would be identified based on load and resource balances found in each utility's IRP plan.
3. Intervenors. Northside Canal Company, Twin Falls Canal Company and
Renewable Energy Coalition ("the Canal Companies") filed joint testimony in this proceeding,
The Canal Companies propose that all projects with a nameplate capacity of l0 MW or less be
eligible for published avoided cost rate contracts. The Canal Companies maintain that a 100 kW
threshold for eligibility to published rates for all resoruce types would force virtually every
project to be negotiated through use of the IRP Methodology which could ultimately impact a
project's viability. Tr. at 843-44. Based on this reasoning, the Canal Companies contend that a
l0 MW nameplate eligibility cap for published avoided cost rates would reasonably allow
ORDER NO. 32697 1l
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25118 Page 12 of 69
smaller QF projects to develop without the adminishative and transactional complications of
negotiations through the IRP Methodology. Id. The Canal Companies further maintain that a l0
MW nameplate eligibility threshold for published rates is consistent with this Commission's past
practice.
The Canal Companies argue that positions advocating a 100 kW eligibility cap really
amount to a pricing issue under the SAR Methodology that can be fixed by modiffing the
manner in which the SAR prices are determined. Tr. at 845. Consequently, the Canal
Companies oppose the changes to avoided cost calculations proposed by Idaho Power. The
Canal Companies maintain that, as long as consistent assumptions are used under both
methodologies, the SAR and IRP methodologies should result in similar avoided cost
calculations. ld, at 852. They believe that either method is appropriate, when applied
consistently, and would result in reasonable avoided cost prices. Id. at 853.
The Canal Companies also support annual updates, using the EIA Annual Energy
Outlook, for the fuel price forecast used in the SAR model. Id. at 886. The Canal Companies
further support Staffs proposal regarding use of a QF's nameplate capacity in the SAR
calculation in order to derive capacity payments that can be determined based on a project's
ability to incrementally contribute to a utility's capacity deficiency. Id. at 890. They "find
StafPs revised model a simple, transparent and straightforward approach to determine capacity
need, allocation and p''i,cing," Id-
Clearwater Paper, Exergy Development Group, and J.R. Simplot ("C/E/S") filed joint
testimony in this proceeding. C/E/S maintains that the SAR Methodology "has been a
successful, transparent and effective method for estimating a utility's avoided cost rates." Tr. at
925-27. These companies support the continued use of the SAR Methodology for calculating
published avoided cost rates. In addition, C/E/S contends that all projects producing l0 aMW or
less should be eligible to published avoided cost rates regardless of the QF resource. Id. at957.
C/E/S maintains that a CCCT is more appropriate than a SCCT in setting a proxy
under the SAR Methodology. The companies argue that combined-cycle units are the "resource
of choice" for utilities adding base load plants and, therefore, a CCCT remains the reasonable
choice in calculating values with the SAR Methodology. C/E/S also agrees with use of the EIA
Annual Energy Outlook for annual updates of the fuel price forecast used in the SAR model.
They agree that arurual updates to the fuel price forecast provide predictability for all parties and
oRDERNO. 32697 12
Case 1:18-cv-00236-REB Document 4-14 Filed 06/2511-8 Page 1_3 of 69
parity in the timing of potential rate increases and decreases. Id. at 941. CiElS further contends
that QF projects should be eligible for capacity payments through the entire term of their
contracts with no consideration of when a utilify becomes capacity deficient. Tr. at 958. C/E/S
argues that "denial of capacity payments during a period of claimed surplus does not put a QF
facility and a company owned generating plant on an equal footing." Id. at936.
Finally, C/E/S maintains that IRP submissions by the utilities "are becoming
increasingly relied upon for a wide number of important regulatory issues." Id. at 939. For this
reason, C/E/S argues that IRPs should be subject to greater scrutiny and an adjudicated hearing
process, with ultimate approval by the Commission before the IRP conclusions are utilized for
the calculation of the avoided cost calculation rates.
Commtssion Findings
L The Eligibility Cap for Published Rates. Wind and solar are intermittent energy
resources with unique characteristics. A 100 MW wind farm or solar project can be broken up
into l0 aMW pieces in order to obtain multiple published rate contracts, i.e., disaggregation.
When a 100 MW wind or solar project is disaggregated, we find the SAR Methodology no
longer produces a rate that accurately reflects the value of the energy to the utility. A 100 MW
project is not even eligible under PURPA nor is a utility bound to purchase power from a 100
MW facility under PURPA's "must purchase" provision. l8 C.F.R. $ 292.204(a). Therefore, to
prevent large projects from disaggregating in order to not only become eligible under PURPA
but also obtain published avoided rates, and based on the unique characteristics of wind and solar
resources to disaggregate, we find that the eligibility cap for published avoided cost rate
contracts for wind and solar projects shall be set at 100 kW or less. Congress intended to allow
PURPA cogeneration and small renewable projects to produce and sell power without the burden
of being regulated as an electric utility. Congress did not intend for multi-national corporations
to fund large wind farms for the benefit of their shareholders and the detriment of the utilities'
ratepayers. l8 C.F.R. $ 292.304(a). Indeed, PURPA transactions are intended to hold ratepayers
harmless. This finding is just and reasonable and consistent with PURPA and FERC regulations.
A QF project producing no more than l0 aMW meets the definition of a small project
that does not materially impact a utility's load and resource balance as long as it is, in fact, a
single small QF project and not a large project disaggregated to obtain a higher avoided cost rate.
The l0 aMW eligibility cap for published rate avoided costs for resources other than wind and
oRDER NO. 32697 l3
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25118 Page 14 of 69
solar has proven to be beneficial by allowing for small projects to be developed without unduly
or inappropriately burdening ratepayers. This Commission's use of a 10 aMW eligibility cap for
published rate contracts has encouraged PURPA projects, promoted renewable energy
development in Idaho and, when used as it was intended, kept ratepayers indifferent. Utilizing a
10 MW nameplate eligibility cap for published avoided cost rate contracts, as proposed by
Avista and Rocky Mountain Power, is a more restrictive approach and would limit the
availability of published avoided cost rates to only very small projects, This Commission is
confident that, with other changes to the avoided cost methodologies incorporated in this Order,
changing eligibility from l0 aMW for resources other than wind and solar is unnecessary at this
time. We find that a l0 aMW eligibility cap for access to published avoided cost rates for
resources other than wind and solar is appropriate to continue to encourage renewable
development while maintaining ratepayer indifference. Maintaining a l0 aMW eligibility cap is
also consistent with our long history of encouraging PURPA projects and renewable energy
generation in Idaho.
We acknowledge Idaho Power's efforts to devise an alternative wholly different than
the SAR method cunently used to obtain published avoided cost rates. However, we are not
prepared to abandon the SAR method entirely. As is evident from this Commission's history
with PURPA, avoided cost methodologies, inputs and calculations need to be reviewed and
refreshed periodically. The genesis of this case in November 2010 came from ldaho Power
being overwhelmed with requests by QFs for published avoided cost rate contracts. The vast
majority of those projects were large wind farms that were disaggregating in order to take
advantage of the then 10 aMW published rates. Under PURPA's must purchase obligation,
Idaho Power was forced to accept hundreds of megawatts of electricity at rates intended for
small projects producing 10 aMW or less. These large projects had the potential to drastically
affect the utility's load and resource balance and raise customer rates contrary to the mandate in
PURPA that they be held harmless. The valuation of energy from these large projects must take
into consideration the QF's ability to generate energy at a time when the utility most needs the
energy to serve its load. This valuation can be accurately accomplished through application of
the tRP Methodology. We find that, by maintaining an eligibility cap of 100 kW or less for wind
and solar projects, Idaho Power's concerns regarding disaggregation are mitigated.
oRDER NO. 32697 t4
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25118 Page 15 of 69
2. Separate Capacitv and Energ), Rates. A Qf that provides generation during peak
hours when the utility is most in need of power to serve its customers should be compensated
based on the QF's ability to deliver during peak hours. This structure comports with the purpose
and intent of PURPA that a utility pay a QF the costs it avoids by not having to build or procure
alternative energy. l8 C.F.R. 292.304(b)(2). Payments for both energy and capacity must be
part of this consideration. Although the current SAR model merges energy and capacity
payments into a single avoided cost rate, this Commission has previously approved separate
energy and capacity payments as consistent with the intent and objectives of PURPA. PURPA
requires that the utility purchase the energy produced by a QF. Paying for a resource's ability to
provide the utility with capacity that the utility needs to reliably serve its customers encourages
development of resources that truly allow the utility to avoid the costs of building new
generation.
The utilities, Commission Stafl and several intervenors support the use of a separate
capacity payment to appropriately value the power being produced and delivered by a QF, We
find that implementation of a separate resource-specific capacity factor is an appropriate way to
value when a QF is able to generate and deliver energy to a utility. The value of all renewable
resources is not equal. If a QF is primarily allowing a utility to avoid energy generation during
non'peak hours, but not providing capacity during peak hours, then the utility is not avoiding the
cost of building new plant. Generation will ultimately have to be built to provide the capacity
necessary to reliably serve customers during peak load hows. Consequently, we find it
reasonable to assign a value to a QF resource's ability to provide such capacity. A QF resource
with a high capacity factor is not only providing the utility with energy, but also capacity that
will allow the utility to avoid having to construct new generation to serve its customers during
peak load hours.
Intervenors to this case have selectively used the term "equal footing" to refer to the
way utilities are treated versus the way QFs are treated. Intervenors suggest that denial of
capacity payments does not put a QF on "equal footing" with a utility. To the contrary, a
consideration of utility need and potential surplus energy doqs heat a QF much like a utility-
owned resource. A utility cannot be compensated by its customers for energy produced from a
generating facility until the utility establishes the need for such new generation. Idaho Code $$
oRDERNO. 32697 l5
Case 1:18-cv-00236-REB Document 4-l-4 Filed 06/2511-8 Page 16 of 69
6l-526,61-528, and 6l-541 . See also Case No. U-1006-265, Order No. 20610; Case No. IPC-E-
12-74, Order No. 32585; and Case No. PAC-E-ll-12, Order No. 32432.
Moreover, "equal footing" is not a legal standard required by PURPA nor applied by
this Commission. The legal standard for an appropriate determination of avoided cost rates is
clearly defined by PURPA. Rates for purchases from a QF shall "(i) be just and reasonable to
the electric consumer of the electric utility and in the public interest; and (ii) not discriminate
against qualiffing cogeneration and small power production facilities." 18 C.F.R. $
29230a@)(l). "Nothing in this subpart requires any electric utility to pay more than the avoided
costs for purchases." Id, at $ 292.304(a)(2). Avoided costs are those costs which a public utility
would otherwise incur for electric power, whether that power was purchased from another source
or generated by the utility itself. l8 C.F.R. $ 292.101(bX6). PURPA allows QFs to obtain a rate
equivalent to the utility's avoided cost, a rate that holds utility customers harmless - not a rate
that puts QFs on "equal footing" with the utility. PURPA requires public utilities to purchase
generation from QFs without regard for whether the utility needs the energy. If a QF resouce
provides energy but not capacify, then the utility is not avoiding a portion of costs that will be
required to build generation that provides capacity. For this reason, we find it reasonable,
appropriate and in the public interest to compensate QFs separately based on a calculation of not
only the energy they produce, but the capacity that they can provide to the purchasing utility.
We find that utilizing a QF's nameplate capacity in the SAR calculation is a
reasonable approach that provides payment to QFs for capacity based on a project's ability to
incrementally contribute to a utility's capacity deficiency. We further find it appropriate to
identify each utility's capacity deficiency based on load and resource balances found in each
utility's IRP.
3. Line Loss. We decline proposals to discount QF energy payments for
transmission and line loss when a utility is energy surplus. These costs are difficult to quantify
and may not exist in all cases. Therefore, we find that, without more certainty, it would be
inappropriate to discount QF energy payments for such costs.
4. Annual SAR Updates. We further find that, in order to remain flexible and
responsive to the fluctuations in gas prices, it is appropriate to annually update the SAR model
with the most recent gas forecasts provided by EIA's Annual Energy Outlook. Based on the
oRDER NO. 32697 l6
Case 1:1-8-cv-00236-REB Document 4-14 Filed 06/251L8 Page 17 of 69
timing of the release of EIA's annual report, and as proposed by Dr. Reading, we find it
appropriate to update rates with EIA's most recent gas forecasts on June I of each year.4
5. SAR Type. We further find it reasonable to continue to utilize a combined-cycle
combustion turbine (CCCT) surrogate as the basis for all calculations in the SAR model. The
SAR Methodology is intended to represent a surrogate base load natural gas resource. Simple-
cycle combustion turbines (SCCT) are primarily utilized for meeting a utility's peak loads;
CCCTs provide base load energy. The proposals of some of the parties to use an SCCT for
calculating capacity value and a CCCT to compute energy value would create a very awkward
and not representative surrogate resource. Consequently, we decline to utilize a SCCT.
B. Integrated Resource Plan (IRP) Methodology
The IRP Methodology had its inception in 1995 (Case No. IPC-E-95-9) but has
seldom been utilized - even by large QF projects - because the avoided cost rate produced
through use of the IRP Methodology for certain types of resources has not, historically, been as
favorable as the published avoided cost rates. Consequently, large wind QF projects were being
broken into smaller pieces in order to meet the eligibility cap requirement for access to published
avoided cost rate contracts, i.e., disaggregation. ,See PAC-E-I0-01 through 10-05; IPC-E-I0-51
through l0-55; IPC-E-10-56through l0-58; IPC-E-10-59 and 10-60; and IPC-E-10-61 and l0-
62. When this case was initiated by the utilities in November 2010, only two IRP-based rate QF
power purchase agreements had been presented and approved by this Commission. Therefore,
the IRP Methodology has not had the benefit of adjustments over time to ensure that the
calculation produces an accurate representation of the utility's avoided cost. The rates produced
pursuant to the IRP Methodology were not called into question until eligibility to published rate
contracts was restricted.
The IRP Methodology takes into account many different variables and produces a
result based on each individual utility's need for energy. More specifically, the IRP method
assesses the value of each QF project in terms of its capability to deliver resources in relation to
the timing and magnitude of the utility's need of such resources.
l. Utilities. Avista proposes that, under the IRP Methodology, the QF only receive
capacity payments after the utility becomes capacity deficient. Avista maintains that, when the
a Calculations for resources under the SAR Methodology - utitizing EIA's most recent Annual Energy Outlook - are
attached.
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utility is in surplus, it does not avoid any capacity by purchasing output from the QF. Because
the utility does not need the capacity, the capacity value of QF power during surplus periods
should be zero. Tr. at 80. In addition, Avista argues that a QF's energy payments should be
discounted during times of utility surplus to account for the costs of transmitting surplus power
and selling it in the market. "[T]ransmission has value to customers as it can be resold by
Avista's transmission group to third parties. Reserving transmission for the purpose of moving
QF power to market would reduce those ffansmission revenues." .Id.
Rocky Mountain Power maintains that the IRP Methodology, "as established in IPC-
E-95-09, is an appropriate method to assess the value of a QF project in terms of its capability to
deliver its resource when the Company is in need of such a resource, and is reflective of the
value of the QF to the Company and its customers." Tr. at 188. Rocky Mountain Power argues
that, with a 100 kW eligibility cap in place for wind and solar resources, the previously adopted
SAR and IRP methodologies continue to provide an accurate means of calculating avoided cost
prices for QFs.
Rocky Mountain Power proposes that modeling inputs for the IRP Methodology be
updated contemporaneously at the time of each pricing request in order to ensure the most up-to-
date modeling assumptions. Rocky Mountain Power asserts that its IRP process already
accounts for the incremental need and cost of capacity on its system. Its capacity payments are
determined based on the timing of the next deferrable resource in its IRP prefened portfolio. /d.
at 199.
Idaho Power maintains that the IRP Methodology should be used for setting both
published and negotiated avoided cost rates. Tr. at 477. Idaho Power contends that the IRP
Methodology is appropriate to use for all PURPA contracts because it sets a more accurate value
on the energy that a QF delivers to the utility based on the time that the energy is delivered.
Idaho Power argues that the IRP Methodology is flexible and can be updated more frequently as
conditions and assumptions change. Id, at 484. The Company explains that the IRP model can
be updated as each incremental resource is added to a utility's generation portfolio. /d.
Idaho Power explains that a resource that is able to deliver energy during heavy load
hours when the utility is most in need of the energy would receive a higher overall price than a
resource that is primarily able to deliver energy during light load hours when the utility is already
surplus and least in need of the energy to serve its customers. As it is currently applied, Idaho
oRDER NO. 32697 18
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Power's IRP Methodology does not include an avoided cost for capacity until the first month that
its load and resowce balance shows a peak-hour deficit based on existing and committed
resources as identified in its IRP. Id. at 474.
2. Commission Staff. Staff maintains that the IRP Methodology can produce more
accurate avoided cost rates with a few modifications. Staff argues that the IRP rates should not
include any value for QF capacity in years when the utility has surplus capacity. Tr. at 1079.
"The proper mechanism for accounting for utility need is not to relieve utilities of their
obligation to purchase, but instead to establish prices for capacity and energy that properly
recognize the utilities' need, or lack of need, for capacity and energy. By not paying for capacity
during surplus periods, utilities would be paying what amounts to a more accluate reflection of a
true avoided cost." Tr. at 1090. Staff further maintains that energy rates be reduced by the cost
of transmission and losses during surplus periods. /d. at 1085. Staff notes that, as it is presently
applied, each utility's IRP model accounts for whether the utility is in need of capacity. "In the
methods used by each utility, none assign capacity value to QFs in years when the utility is in a
surplus condition." Id. at 1091.
Finally, Staffproposes that a simple-cycle combustion turbine (SCCT) be used as the
basis for computing capacity value under the IRP Methodology for all resource types. Staff
argues that "the proper resource to use as the basis for computing capacity value is the lowest
cost resource that could be added to provide capacity equivalent to what would otherwise be
provided by the QF." Id. at 1093. Because Staff proposes to compute energy and capacity
separately, using a SCCT is most appropriate because it represents the lowest cost, nearly
capacity-only resource. /d.
In order to produce a more accurate avoided cost rate, Staff recommended that
utilities be permitted to update fuel price forecasts and load forecasts annually - between IRP
filings. Staff further recornmended that long-term contract commitments (including QF
contracts) be incorporated once a contract has been signed by the QF and submitted to the utility
for signature. Id. at 1099. *PURPA contracts that are terminated, expire, or that have approved
modifications of their online dates should also be immediately considered in the load resource
balance." /d at 1100.
3. Intervenors. The Canal Companies support use of the IRP Methodology as long as
consistent assumptions are used in both the SAR and IRP methods. Tr. at 852. The Canal
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Companies admit that while "the integrated resource method may not be as transparent as the
surrogate resource method, it can do a better job of taking into account a utility's needs by
incorporating all the expected loads and resources over the contracting planning horizon." Id. at
852-53. They support two updates to the model between IRP filings: annual updates for natural
gas prices and updates for new, executed QF agreements. Id. at 859-60.
The Canal Companies maintain that it is reasonable for a utility to include only the
cost of energy in its avoided cost payment to new QFs until the utility shows a need for capacity.
Tr. at 867. However, they argue that existing QFs entering into contract extensions or renewals
should be paid full capacity value for the entire term of an extension or renewal. "These
resources have not caused the projected short-term surplus and should not be penalized in the
form of reduced capacity value payments in a subsequent follow-on PPA." Id. at 869. The
Canal Companies further maintain that utilizing a SCCT to determine a QF's capacity value is
appropriate for Idaho Power.s Id. at866.
C/E/S only supports use of the IRP Methodology after o'each utility's IRP is fully
considered and approved through the hearing process." Id. at957. C/E/S proposes that changes
to variable inputs only be allowed with each approved IRP - with the exception of natural gas
prices which should be updated annually. Id. at 958. C/E/S further proposes that capacity
payments be included for the full term of the contract with no consideration of utility surplus or
deficit.
Commission Findings
The IRP Methodology recognizes the individual generation characteristics of each
project by assessing when the QF is capable of delivering its resources against when the utility is
most in need of such resources. We find that the resultant pricing is reflective of the value of the
QF energy being delivered to the utility. We are not convinced, nor has sufficient evidence been
presented, that the utilities' use of different models to derive lRP-based rates (i.e., AURORA vs.
GRID) produces substantially different rates. To the contrary, the evidence shows that energy
rates calculated by the utilities for different resources are substantially similar between the
utilities. Therefore, we find that the IRP models used by each individual utility produce
reasonable avoided cost rates consistent with PURPA and FERC regulations.
5 The Canal Companies are not recommending changes to Avista's or Rocky Mountain Power's avoided capacity
resource. Tr. at 867.
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Idaho Power proposed revisions to the IRP Methodology that focus on identiffing the
increlnental costs that its system would incur, i,e., a single-run simulation, rather than its current
methodology that is primarily predicated on making surplus sales at the future market prices
developed within the AURORA model, i.e., a two-run simulation. In order to do this, Idaho
Power proposes to use the AURORA model to determine the highest displaceable incrernental
cost being incurred during each hour of the QF's proposed contract term. The Company claims
that its proposed modified methodology better aligns with the definition of avoided cost from
federal regulations, and results in a much better estimation of the costs the utility is capable of
avoiding.
The Commission finds Idaho Power's proposed modifications to the IRP
Methodology reasonable. We agree that the Company's revisions properly focus the
determination of avoided costs on incremental costs, not solely on the value of potential market
sales. The result, we find, is a more accurate avoided cost. Moreover, we find that the modified
methodology comports with the definition of avoided cost contained in FERC regulations.
Therefore, we direct Idaho Power, Avista and Rocky Mountain Power to utilize displaceable
incremental costs in calculating avoided cost rates under the IRP Methodology.
l. Capacity Deficiency. In computing avoided cost rates under the IRP
Methodology, each of the three utilities already employs a two-step approach in which energy
and capacity values are computed separately. In calculating a QF's ability to contribute to a
utility's need for capacity, we find it reasonable for the utilities to only begin payments for
capacity at such time that the utility becomes capacity deficient. If a utility is capacity surplus,
then capacity is not being avoided by the purchase of QF power. By including a capacity
payment only when the utility becomes capacity deficient, the utilities are paying rates that are a
more accurate reflection of a tnre avoided cost for the QF power. However, we find merit in the
argument made by the Canal Companies that contract extensions and/or renewals present an
exception to the capacity deficit rule that we adopt today. It is logical that, if a QF project is
being paid for capacity at the end of the contract term and the parties are seeking
renewaUextension of the conffact, the renewal/extension would include immediate payment of
capacity, An existing QF's capacity would have already been included in the utility's load and
resource balance and could not be considered surplus power. Therefore, we find it reasonable to
allow QFs entering into contract extensions or renewals to be paid capacity for the full term of
oRDERNO. 32697 2t
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the extension or renewal. Consistent with our findings under the SAR Methodology, we decline
proposals to discount QF energy payments for transmission and line loss when a utility is energy
surplus. At this time, it would be inappropriate to discount QF energy payments for such costs.
We further find that a simple-cycle combustion turbine (SCCT) is the most
appropriate basis for computing capacity value for all resource types. SCCT's are added to a
utility's resource portfolio to satisff capacity needs. Because energy and capacity are being
calculated separately, it is reasonable to use a SCCT because it represents the lowest cost, nearly
capacity only resource.
2' Updates, We find that, in order to maintain the most accurate and up-to-date
reflection of a utility's true avoided cost, utilities must update fuel price forecasts and load
forecasts annually - between IRP filings. For the sake of consistency, these annual updates
should occur simultaneously with SAR updates - on June I of each year. In addition, it is
appropriate to consider long-term contract commitments because of the potential effect that such
commitments have on a utility's load and resource balance. We find it reasonable to include
long-term contract considerations in an IRP Methodology calculation at such time as the QF and
utility have entered into a signed contract for the sale and purchase of QF power. We further
find it appropriate to consider PURPA contracts that have terminated or expired in each utility's
load and resource balance. We find it reasonable that all other variables and assumptions utilized
within the IRP Methodology remain fixed between IRP filings (every two years).
C. The IRP Planning Process
The IRP Methodology utilizes inputs determined through the utilities' IRP planning
process. Each utility submits an Integrated Resource Plan every two years that details what the
utility anticipates its resource needs will be over the next 20 years. A utility's IRP is a flexible
document meant to assess the needs of the utility so it can safely and reliably serve its customers.
When it became apparent that the IRP Methodology would be utilized for a growing
number of QF projects, the IRP planning process came under attack by opponents of the IRP
Methodology. They argue that the IRP planning process is not a collaborative effort and factors
used within the IRP Methodology can be manipulated by the utility compiling the Plan. The
utilities maintain that the IRP plaruring process is independently conducted without regard to the
impact that particular determinations will have on the IRP Methodology.
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Commission Findings
At the outset it is important to note that IRPs submitted by each utility are not
"approved" by this Commission. An IRP assesses a utility's long-term energy needs. However,
it is axiomatic that a utility's energy needs change over time based on customer growth,
availability and cost of resources, environmental considerations and requirements, and other
factors. It would not be reasonable, nor to the benefit of customers, to hold a utility to a fixed
20-year projection of its anticipated resource needs. Approval of IRPs by this Commission
might imply that we agree with all of the utility's assessments regarding how it will respond to
growth over the next 20 years and that we intend to hold the utility to its projections and plans,
Such an approach would run counter to the Commission's position that a utility's long-term plan
should remain just that - a plan that is flexible and responsive to its customers' needs over time.
Hence, the requirement of submitting a Z}-year plan to this Commission for review every two
years.
The IRP process is a beneficial and worthwhile endeavor by the utilities to
objectively and critically evaluate their growing needs for power into the future. We decline to
assert more control and regulation over a process that functions well for its intended pulpose,
i.e., assessment of the utility's long-term needs. However, we acknowledge that some
determinations made within the IRP process have an impact on calculations under the SAR and
IRP methodologies. Specifically, the IRP process determines when the utility will experience a
need for new capacity.
In an effort to address the concems of QF developers who maintain that a utility
could manipulate variables within the IRP planning process in a way that would negatively
impact the pricing of capacity paid to a QF, we find it reasonable and fair to subject each utility's
determination of capacity deficiency to fi.fiher scrutiny. Therefore, when a utility submits its
Integrated Resource Plan to the Commission, a case shall be initiated to determine the capacity
deficiency to be utilized in the SAR Methodology. The capacity deficiency determined through
the IRP planning process will be the starting point, and will be presumed to be correct subject to
the outcome of the proceeding.
D. Contract Length
Over the years, this Commission has approved QF contracts of varying lengths. The
current standard contract length of 20 years was approved by this Commission in 2002 when we
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found that a 20-yew contract would better coincide with the amortization period or planned
resource life of the renewable/cogeneration resources being constructed and ensures a revenue
stream sufficient to facilitate the financing of QF projects. See Order No. 29029.
l. Utilities. Idaho Power proposed that the Commission adopt a maximum contract
lenglh of five years. Id. at 487. Idaho Power maintains that a Z}-year frxed-rate contract
unfairly shifts market price risk from the QF developer entirely onto the utility's ratepayers.
2. Conlmission Staff. Staff supports Idaho Power's proposed five-year contract
length for IRP-based contracts. Staff reasoned that long-term contracts have historically been
used by this Commission to encourage and boost the development of PURPA projects. Tr. at
I 105. However, utilities are not currently in need of the power produced by PURPA QFs and,
with present economic conditions, utilities' customers are already struggling to pay their bills.
ld. Staff argues that it is not this Commission's responsibility to ensure that contract length is
long enough for the QF to be able to obtain financing, Further, Staff maintains that it is good
public policy for the Commission to utilize tools, such as limiting ma:<imum contract length, in
order to control the pace of PURPA development. .Id.
3. lntervenors. The Canal Companies oppose the implementation of five-year
contracts. The Canal Companies characterize five-year contracts as unfair, inequitable, and
insufficient for cost recovery. Id, at 845. They maintain that the contract term should more
closely align with the usable life of the resource. Id. C/E/S argues that the current Z0-year
contract length should be maintained. Id. at 958. CIEIS urges the Commission to reject ldaho
Power's five-year proposal as contrary to the intent of FERC and detrimental to QF
development. Id. at 969.
Commisston Findings
We find that a 20-year contract length, along with other factors, has been benefisial in
encouraging PURPA development in ldaho. We continue to believe that 20-year confracts better
coincide with the useful life of the renewable/cogeneration resources. While it is not this
Commission's responsibility to ensure a contract length that allows a QF to obtain financing, we
find that reducing maximum contract lenglh to five years would unduly hinder PURPA
development. That is not the Commission's objective. We believe that, by utilizing other tools
to ensure an accurate and up-to-date avoided cost valuation, we can continue to encourage the
types of projects that wers envisioned by PURPA while maintaining the transparency for
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ratepayers as PURPA requires. Therefore, we find that a maximum contract lenglh of 20 years is
appropriate. The parties to a power purchase agreement are free to negotiate a shorter contract if
that would be most suitable for the project. As in the past, this Commission will consider
contracts of more than 20 years on a case-by-case basis.
E. Security Deposit/Liquidoted Damages
l. Utilities. Avista and ldaho Power urge the Commission to continue allowing
utilities to require security deposits in the amount of $45 per kW of nameplate capacity. Avisk's
witness Clint Kalich testifred that adequate delay security is "one of two key protections a utility
must have with any [PURPA] developer" to ensure that developer performs under an executed
PPA. Tr. at 84. The security deposit provides an incentive to the QF developer to bring the
project on-line. If a PURPA developer is not able to meet the commercial operation date
specified in its PPA, then '1he utility ends up at the last moment having to procure other
resources, potentially at higher costs. In the absence of meaningful liquidated damages, the QF
developer has a free option to either honor its contractual commitment . . ., or simply cease
development where market conditions have changed." Id. at 84-85.
Mr. Kalich explained that the second key protection for utilities is the need for
"meaningful termination rights if the QF fails to achieve commercial operation within the
timeframe established in the PURPA contact." Id. at 85. He recommended that each PURPA
contract have a standard termination clause which enables the utility to terminate the PPA 180
days after a developer's project has failed to achieve to achieve commercial operation as
scheduled in the PPA. He concluded by recommending that the developer be required to post the
$45 per kW "liquidated damages defosit at the time that the legally enforceable obligation arises
- i.e., when the . . . QF developer executes and retums the tendered contract obligating the utility
to purchase" the output from the QF. Id. at 86.
Idaho Power also supported a requirement that PURPA developers post delay damage
security in the amount of $45 per kW of nameplate capacity. Idaho Power witness Mark Stokes
testified that the Commission has addressed the issue of security on numerous occasions when it
has been called upon to approve various PPAs. Mr. Stokes argued that the difference between
acquiring replacement power and the cost of power in a PPA is not the only measure of damage
suffered by a utility when a QF does not bring its facility on-line as scheduled. He noted that
there are system operations and planning problems that arise when a QF fails to bring its
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facilities on-line as scheduled. Tr. at 536. If a QF is allowed to default under the PPA by not
bringing its project on-line as scheduled, "then customers are left in a financially disadvantaged
position and uncompensated for the price lock and option they extend to the QF project." .Id.
In its prehearing legal brief, Idaho Power asserted that when a QF resource fails to
come on-line as scheduled
Idaho Power must replace this energy by making a market purchase, assuming
transmission capacity is available to get the energy to ldaho Power's system.
Because the transaction is done closer to real time, market prices can be
higher than they would have been had Idaho Power been able to execute the
transaction earlier in time. There is also the possibility that market prices will
be lower than the QF contract, which typically the current situation if Idaho
Power is able to buy energy from the Mid-C market. If transmission capacity
is not available from the Pacific Northwest, the energy musl be bought from
the east side of [our] system where market liquidity is an issue and prices are
almost always higher.
Brief at 29. Thus, damages may be difficult to quantifu with precision, but are nevertheless
"very real to the utility and its customers." Id, at 31. Consequently, Idaho Power asked the
Commission to continue allowing utilities to collect delay liquidated damage security.
2. Cqmmission Staff. Staff witness Rick Sterling testified that it was reasonable for
utilities to require a security deposit for liquidated damages. Although he stated the Commission
has never specihed in any of its Orders the timing of when such a security deposit should be due,
he found merit in Avista's proposal that the deposit be due when a legally enforceable obligation
arises. Tr. at 1l I l. "lt seems fair that if a QF can unilaterally impose a legally enforceabls
obligation on a utility, the QF should contemporaneously incur a corresponding obligation to
perform backed by a posting of required security for liquidated damages." Id. at llll-12.
Although he recommended continued use of the liquidated damages provision, he also
acknowledged on cross-examination that he was not necessarily opposed to using an o'actual
damages type of an approach if it could be done practically and fairly." Tr. at I 178.
3. Intervenors. CIEIS witness Dr. Don Reading testified that rather than basing
liquidated damages on a $45 per kW amount, liquidated damages should be based on an actual
estimate of the likely damages that the utility would incur if the QF is not operational as
scheduled in the contract. In the event of a QF developer's default, the "intent should be to keep
the utility and its customer[s] whole in the event of a default." Tr. at 960. In calculating delay
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damages, Dr. Reading recommended th'ree factors in setting liquidated damages, First, in the
event of a QF default, the estimate of damages should be calculated as the difference between the
rates in the PPA "and the actual cost for replacement power during the period the QF's delay
default forces the utility to secure replacement power." Tr. at 961. The replacement price would
include the cost at the relevant market hub plus the necessary transmission and administrative
costs to secure that replacement power. Id. Second, although he recognized that PURPA
contracts typically have 20-year terms, he suggested that paying damages should be limited to a
period of time "for the utility to make alternative long-term arangements to secure that amount
of power." .Id Third, he recommended that if a security deposit is required, that such deposit
not be required until "after the PPA is signed and approved by the Commission." Tr. a|962.
The Canal Companies and Renewable Energy Coalition sponsored the testimony of
Donald Schoenbeck. He recommended that when QF developers execute a PPA, the QF could
post either "a fixed $/kW amount or an amount based upon the diflerence between the contract
revenue payments and forward power prices for a period of three years starting at the expected
commercial operation date." Tr. at 881. Using this forward mark-to-market option, Mr.
Schoenbeck suggested that the deposit be adjusted every calendar quarter "to ensure adequate
security has been posted by the QF ttroughout the licensing and construction period." Id. at882.
With these adjustments, he indicated that his clients would accept the inclusion of liquidated
damage provisions in all PPAs. /d.
E(1). The Partial Settlement
After the close of the technical hearing on August 9,2012, the Commission scheduled
a settlement conference to allow the parties to informally discuss standard PPA terms related to
delay security and liquidated damages. Order No. 32617. The participating parties met in
settlement conferences on August 23 and September 7, 2012. On October 2, 2012, a "Partial
Settlement Stipulation" was filed on behalf of 13 of the 25 parties that participated in the
settlement conference.6 On October 16, 2012, the Commission issued a Notice of Partial
Settlement and invited the parties and other interested persons to submit written comments
regarding the partial settlement no later than October 25,2012. Supporting comments were filed
by Avista, Staff and one public witness. Idaho Power and C/E/S filed opposing comments.
6 The signing parties included: Rocky Mountain Power; Staff; Renewabte Energy Coalitionl Dynamis; North Side
Canal; Twin Falls Canal; Birch Power, ICL; SRA; Idaho Wind Partners; Ridgeline; Big Wood Canal; and American
Falls Reservoir Disrict.
ORDER NO. 32697 27
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The signing parties agreed that existing PPAs that have been approved by the
Commission shall not be affected by the settlement and that all new PPAs after the date of the
Partial Settlement Stipulation conform to the terms contained in the settlement. Settlement at J[![
9, 12. They also agreed that the settlement represents a compromise of the parties' position.
They further assert that the settlement "is reasonable and in the public interest. They urged the
Commission to adopt the Settlement Stipulation without condition or modification." Order No.
32665 at l-2. The specific terms of the settlement are set out below:
1. Calculation of the Security Deposit. The parties agree that a security deposit or
performance bond ("the Security Deposit") will be required for each new PURPA agreement
(PPA) entered into after the date upon which the Commission adopts and approves this
Settlement Stipulation. The purpose of the Security Deposit is to provide security for: (l) Delay
Damages during the Cure Period if the QF is not in commercial operation by the Scheduled
Commercial Operation Date set out in the PPA; and (2) Termination Damages if the QF cannot
cure a failure to achieve commercial operation and a party seeks termination of the PPA. The
Security Deposit shall be set at $45 per kilowatt (kW) of nameplate capacity for each new PPA.
The cash or other liquid Security Deposit will be forwarded to the utility no later than thirty (30)
days after the Commission issues its final Order approving the PPA.
2. Refund of Security Deposit. If the QF has achieved commercial operation in
accordance with the Scheduled Commercial Operation Date set out in the PPA, the utility will
promptly refund or rebate the Security Deposit to the QF.
3. Failure to Achieve Commercial Operation - Delay Damages. In the event the QF
fails to achieve commercial operation by the Scheduled Commercial Operation Date contained in
the PPA, Delay Damages shall be calculated based upon the difference between market rates at
the time the QF fails to achieve its Scheduled Commercial Operation Date and the avoided cost
rates contained in the PPA during the Cure Period. Delay Damages, if any, during the Cure
Period will be drawn from the Security Deposit held by the utility. If the Security Deposit is
insufficient to defray all of the Delay Damages, then the QF will promptly pay the outstanding
Delay Damages. If the QF achieves commercial operation during the cure period, any remaining
Security Deposit beyond the amount of any Delay Damages shall be refunded to the QF.
4. Qure Period. The defaulting party shall have one hundred twenty (120) days from
the Scheduled Operation Date to cure its default,
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5. Failure to Que. In the event the QF fails to achieve commercial operation within
the Cure Period, then the non-defaulting party may, at its option, collect its Delay Damages as
calculated in Paragraph No. 3 above, terminate the Agreement, and calculate its Termination
Damages, if any. If the QF fails to achieve commercial operation within the cure period and the
non-defaulting party elects to terminate the Agreement, the Security Deposit may be used to: (a)
first pay the Delay Damages arising during the cure period, if any; and (b) second pay
Termination Damages, if any, arising after the Cure Period for the remaining term of the
Agreement.
6. Terminatio.n Damaees. The party claiming that the PPA is in default and seeking
termination of the Agreement shall communicate its nolice of default and claim for any
Termination Damages to the other party within a reasonable time. The other party shall respond
within fifteen (15) days. In the event of a dispute regarding the calculation of Termination
Damages, either party may resort to a court of competent jurisdiction.
7. Undisputed Damaees and Refunds. The utility may draw any undisputed Delay
Damages or Termination Damages from the Security Deposit. In the event that the Security
Deposit is insufficient to pay the undisputed damages, such undisputed damages will be paid
promptly by the defaulting party. If the Security Deposit exceeds the total amount claimed as
Delay Damages or Termination Damages, the utility shall promptly refund any portion of the
deposit that is in excess of the claimed Delay Damages or Termination Damages.
8. Security Deposit for Existing OF Projects. The parties agree that a Security
Deposit shall not be required in situations where the parties are entering into a new PPA for an
existing QF project already in commercial operation so long as the new PPA is between the same
parties and there are no material changes or modifications to the existing QF project.
E(2), Comments on the Partial Settlement
l. A,:f!sta. Although Avista did not sign the partial settlement, it supports the terms
of the settlement. Comments at 3. Consistent with the partial settlement, Avista recommends
that PPAs require "at a minimum, that QFs post a security equal to $45 per kilowatt based on
installed capacity. In the event the QF failed to achieve commercial operation by the scheduled
operation date, damages would be calculated based upon the difflerence between the market price
of replacement power and the PPA price during a reasonable crue period. . . ." Id. at2-3. Avista
proposes that if the QF fails to achieve commercial operation by the end of the cure period, then
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thg "QF would forfeit its security [deposit] as liquidated damages and the utility could terminate
the PPA." Id. at3, In particular, Avista supports adoption of standard terms such as: (l) posting
a security deposit of $45 per kW based on nameplate capacity; (2) a uniform cure period; and (3)
calculating delayed damages incurred by the utility during the cure period based upon the
difference between the PPA and market rates. Adopting the standard PPA terms will enhance
the PPA process "by resolving issues belween the utilities and QF developer[s1." Id.
2. Commission Staff. Staff also supports the partial settlement and urges the
Commission to adopt it without material iondition or modification. Staff Comments at 6. Staff
notes that security deposits have been included in nearly all PURPA agreements signed since
2009 and that the $45 per kW deposit amount for nameplate capacity has been included in
contracts since January 2010. Id. at 3. Staffstates that the security deposit "helps ensure that the
QF will perform and that funds will be available to cover damages should they arise. tllf
commercial operation is achieved per [the terms of] the PPA, the deposit is to be returned to the
QF.* Id. at 2. Staff explains that the security deposit can be used to either pay delay damages
during the standardized 120-day cure period if the QF is not commercial operation, or
termination damages if the QF cannot achieve commercial operation during the cure period and a
party seeks termination of the PPA. ld. Staff also observes that under the terms of the
settlement, the security deposit is to be forwarded to the utility no later than 30 days after the
Commission issues its final Order approving the PPA.
StaIf asserts that the security deposit is essential to adequately protect the utility and
its ratepayers from default by a QF. The $45 per kW is a reasonable deposit amount that would
likely cover most, if not all delay and/or termination damages. ld. at3. Staff also recommends
approval of the standardized term that requires the prompt refund of the security deposit to the
QF if it achieves commercial operation in accordance with the PPA. If o'there is a delay and a
cure within the [20-day] cure period, the undisputed portion of the deposit will be retumed to
the QF." ld. In other words, the security deposit is only maintained for as long as necessary. /d.
Staff recognizes that determination of the exact amount of delay damages has
frequently led to disputes between a QF and a utility. "The partial settlement will help to
alleviate disputes by speciffing [that] . . . delay damages shall be calculated based upon the
difference between market rates at the time the QF fails to achieve its scheduled commercial
operation date and the avoided cost rates contained in the PPA during the cure period." Id. at 3-
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4. Basing delay damages on the difference between the market rates and the contract rates
"fairly assesses the amount of the damages and holds the QF responsible for the full amount of
actual damages without imposing a penalty." Id. at 4. Staff also supports the settlement because
if the security deposit is insufficient to defray the delay damages, the QF will promptly pay the
outstanding delay damages. Conversely, if the QF achieves commercial operation during the
cure period, then any undisputed security deposit beyond the amount of any delay damages shall
be refunded to the QF. Id.
Staff observes that if the PPA is terminated because the QF fails to achieve its
commercial operation, then damages may extend beyond the cure period. Per the settlement,
then deposits may be used to: (a) first pay delay damages arising during the cure period, if any;
and (b) second pay termination damages, if any, arising after the cure period for the remaining
term of the PPA. Settlement at tf 5, In the event the parties are unable to agree to termination
damages, if any, then any party may bring suit in a court of competent jurisdiction. Because
termination damages "are exceedingly difficult to quantiff in advance, and because they depend
on the circumstances of each individual case, Staff believes it is appropriate to leave
determination of the [termination] damages to negotiation[s] betrveen the parties or to a court if
there is a dispute." Comments at 4.
Finally, Staff notes that calculating delay damages based on actual damages
eliminates an argument that the previous liquidated damages (now [the] security deposit) were
punitive and unreasonable." Id. at 5. Based on its review of the partial settlement, Staff
delermined that its terms are just and reasonable and in the public interest. Consequently, Staff
recommends that the Commission approve and adopt the partial settlement. Id. at 6.
3. Opposing Comments. Idaho Power indicates that there was "little to no value in
entering into some kind of compromise of its position[s] that it has set forth . . . in this
proceeding" without complete agreement from all the QF parties. Comments at l. It urges the
Commission to continue the current requirements of requiring QFs post delay damage security
calculated at $45 per kW of nameplate capacity. Id. at3,5. The utility argues that the damages
provisions of the partial settlement do not "adequately compensate customers for the risks
assumed by customers and the damages incurred by a QF breach." Id. al 2. Idaho Power
continues to argue that a QF may choose or not choose to bring its project into commercial
operation. Thus, o'a QF has the ability to eliminate its own downside [risk], to the direct and
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substantial harm and detriment of Idaho Power's customers, and take advantage of the upside" if
prices are more favorable to the QF. /d. at 5.
C/E/S filed joint comments opposing the partial settlement. They disclose that they
did not sign the partial sefilement o'because it simply codifies the status quo. The only true
settlement issue that was resolved was the unremarkable and obvious concession that existing
projects will not be required to post a delayed security deposit." Joint Comments at l. C/E/S
reiterates its position at the hearing by attaching Dr. Reading's testimony as comments.
Commission Findings
Based on our review of the underlying testimony, the partial settlement, and the
comments filed in response to the sefilement, we find that the partial settlement represents a fair,
just and reasonable resolution to the issue of liquidated damages. Contrary to the assertion made
by C/E/S, the partial settlement does not simply codify the status quo. In our view, the
settlement represents a reasoned approach to the issues of risks and damages in the event a QF
fails to perform under the terms of its PPA. We find that the requirement that a security deposit
be posted 30 days after the Commission approves the PPA is reasonable. We further find it
reasonable to base delay damages on the actual difference between the PPA rates and the market
rates. This is similar to the recommendation offered by Mr. Schoenbeck and is in agreement
with Dr. Reading's testimony that delay damages should be based on damages measuring the
"difference between the rate . . . in the QF contract and the actual cost for replacement power. . .
." Tr. at 961.
As we previously observed in Order No. 31034, posting adequate security "acts not
only as an incentive for PURPA project owners to complete their projects on time, but it can also
mitigate any additional costs which might arise when a utility is forced to purchase substitute
power on the open market." Order No. 31034 at 3; Exh. 519. However, we also noted that such
security "'should not be punitive' and 'should constitute a fair and reasonable offset of a
regulated utility's estimated increase in power supply costs attributable to the PURPA supplier's
failure to meet its contractually scheduled operation date.' Order No. 30608 ." Id. at 4.
Although C/E/S argued that the $45 per kW amount was unreasonable, we are not
persuaded for several reasons. First, as indicated in the partial settlement, a broad array of
parties agreed that $45 per kW is a reasonable amount for the security deposit. Second, a survey
conducted by Avista regarding the $45 kW amount showed that the utilities charged a
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comparable amount "and actually substantially higher in some cases." Tr. at 164; Exh. 519,
Order No. 31034 at 3 (in a survey of 10 utilities only I required "less than $25 per kW, while the
other 9 utilities required security of at least $50 per kW."). Third, the Commission has
previously found that an increase in the delay security amount to $45 was "reasonable and
necessary." Exh. 519, Order No. 31034 at 3. Fourth, it is reasonable to set a uniform amount so
that all parties to a PPA know how the security deposit is to be calculated and can calculate the
amount of the deposit before executing the contract. Finally, the $45 per kW deposit is balanced
with the fact that the deposit is returned if the QF meets its scheduled operation date or becomes
operational during the cure priod and the undisputed amount is retumed to the QF.
As set out in the partial settlement that we adopt, the security deposit is to be used as
a source of actual damages for both delay damages (the inability of the QF to bring its facility
on-line during the 120-day cure period) and also as a source of termination damages in the event
the PPA is terminated. If there is a dispute among the parties regarding the calculation of
termination damages, then either party may take their dispute to a court of competent
jurisdiction. Of course, in the event the QF comes on-line as scheduled, then "the utility will
promptly refund the Security Deposit to the QF" developer. Partial Settlement atl2.
Consequently, we find that the standard terms proposed in the partial settlement are
fair, just and reasonable, and in the public interest. Moreover, we find that the $45 per kW of
installed capacity is a reasonable amount to post as a security deposit/performance bond, Thus,
we approve and adopt the partial settlement for all new PPAs entered into after the date of this
Order.
F, Curtailment
Idaho Power proposed that the Commission approve a new tariff - Schedule 74
(Curtailment). Schedule 74 would allow Idaho Power, during low loading periods, "to meet its
energy needs by using its own lowest cost, base load resources instead of dispatching less
efficient, higher cost resources to accommodate PURPA generators on the Company's system."
Tr. at 615.
l. Utilities. Idaho Power argues that its proposed tariff is consistent with PURPA
and FERC rules. Id. The Company contends that 18 C.F.R. $ 292.304(0 allows a utility to
curtail higher cost QF energy if the utility would have to dispatch less efficient, higher cost units
to meet system load. Id. The Company maintains that intermittent PURPA generation
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frequently provides energy at night and during the spring and fall months. These times coincide
with Idaho Power's low load periods. Id. at 617. During these low loading periods, Idaho Power
generates and./or must accept more energy than its customers need and must sell excess power
back into the market - sometimes at a loss.
Idaho Power explains that the addition of large amounts of intermittent generation on
the system, coupled with the fact that intermittent generation often generates when the
Company's system load is at a low level,'oforces the Company to use the flexibility of the hydro
system that is normally used to meet load swings and to meet system balancing needs . . . of the
wind generators. Thus, the Company is forced to use base load generation resources to integrate
the intermittent QF generation which comes at an additional cost to customers." Tr. at 610.
Proposed Schedule 74 would allow Idaho Power to curtail its QF generation if, during low load
situations, Idaho Power would otherwise be forced to utilize less efficient, higher cost units to
meet impending load following a low loading period.
2. Commission SBff. Staff supports the approval of ldaho Power's proposed
Schedule 74. Staff maintains that existing Schedule 72 gives Idaho Power the authority to curtail
and the proposed Schedule 74 outlines the policies and procedures for curtailment, Id. at lll3,
Staff states that Schedule 74 would allow Idaho Power to curtail for system efficiency and
economics under limited circumstances - reasons not allowed under Schedule 72. Id. Staff
argues that ldaho Power's proposed Schedule 74 is consistent with PURPA and FERC
regulations,
3. Intervenors. The Canal Companies oppose Idaho Power's proposed Schedule 74.
Tt. at 874. The Canal Companies argue that Idaho Power's proposal unilaterally modifies
existing contracts. The Companies maintain that existing ldaho Power PPAs do not contain
language to allow for operational or economic curtailment. Thus, implementing Schedule 74
would unilaterally change existing contracts that were mutually negotiated by the parties. ^Id. at
876.
The Canal Companies further argue that ldaho Power presents a misleading pictwe of
FERC's rulings regarding operational curtailment rights. The Canal Companies assert that, "[b]y
employing production simulation models such as AURORA, the economic dispatch of the
system, including during light load hours, has already been taken into account in deriving the
avoided cost prices." Id. at 878. Therefore, the Canal Companies maintain that the utility has
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already accounted for light load periods and should not be permitted to also curtail a QFs
production.
Finally, the Canal Companies state that Langley Gulch is mischaracterized by Idaho
Power as a must-run base load resource. Tr. at 879. They argue that Langley Gulch's ramp rate
does not qualify it as a must-run base load resoruce. They further maintain that Idaho Power has
not shown that FERC's low load scenario exists on Idaho Power's system. Id. The Canal
Companies suggest other options for light-load conditions such as selling power to sunounding
service territories in order to avoid curtailment. The Canal Companies characterize Idaho
Power's proposed Schedule 74 as a "poorly disguised effort to impose economic curtailment on
QF deliveries." Id.
CIEIS also opposes Idaho Power's proposed Schedule 74. C/E/S maintains that
Schedule 74 amounts to economic curtailment not permitted by FERC's regulations. Tr. at 971.
C/E/S further asserts that Idaho Power already possesses the authority to curtail for operational
concems under its existing Schedule 72, CIE/S maintains that Idaho Power's proposal primarily
takes issue with the burden of intermittent resources, i.e., wind. C/E/S argues that the Idaho
Commission has already approved and implemented a wind integration charge in order to
address the intermittency of the resource and integration challenges that wind presents. Id. al
972. C/E/S argues that ldaho Power has not adequately demonstrated that its system
configuration is similar to that contemplated by FERC within 18 C.F.R. $292.304(t). Id. at975.
Idaho Wind Partners maintains that curtailment under Section 304(0 does not apply
to pre-determined, fixed price contracts. Id. at 815. Idaho Wind Partners argues that fixed price
contracts already take into account "the anticipated average or composite avoided costs for the
life of the contract, including the potential for negative avoided costs." Id. Therefore, Idaho
Wind Partners opposes the application of Idaho Power's proposed Schedule 74 to existing, fixed
price contracts.
Commbsion Findings
First, this Commission has thoroughly reviewed 18 C.F.R. $ 292.304(f1 and its
subsequent interpretations. We find that Section 292.304(t) clearly allows for curtailment of QF
power under specific circumstances when base load resources would be forced to cut back to a
point where they might not be able to increase their output rapidly enough to meet subsequent
system demand. 45 Fed.Reg. 12214 at 12227 (February 25, 1989) (FERC Order No.69).
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During certain low load conditions, a utility is permitted to curtail QF power so that base load
resources do not fall below a must-run level.
We further find that, while each power purchase agreement (PPA) that we have
reviewed contains a general reference to l8 C.F.R . f! ?9n}4(f), curtailment under this section
was not reasonably contemplated when the parties entered into their agreements. The apparent
need for such authority to curtail under these circumstances has only presented itself within the
last several years in Idaho - ffid, as evidenced by the testimony, seems to be a problem only on
Idaho Power's system.
We acknowledge that Idaho Power has had to accept what it considers a glut of QF
power. This Commission, through these proceedings, is attempting to provide Idaho Power and
the other Commission-regulated utilities with the tools necessary to manage QF power without
harming ratepayers. However, we find that Idaho Power has not provided sufficient information
or persuaded us about its must-run resources, the frequency of such conditions, and the
transparency of its proposed schedule for us to approve Schedule 74.
It became apparent at hearing that Idaho Power's proposed curtailment tariff lacks
sufficient definition and is void of solie provisions altogether, As proposed, Schedule 74 does
not provide for a penalty to Idaho Power or compensation to a QF if the QF is curtailed without
proper notice. Tr. at 670. The proposed tariff does not address sonsequences and/or
compensation to a QF if curtailment.by the utility would cause the QF not to meet its firming
provisions required by contract (i.e. 85% mechanical availability guarantee or 90Yo threshold in a
90/l l0 contract), Id. As proposed, the tariff has no limit on the number of hours or days that
could be declared must-run periods. Id. at 694. As written, Schedule 74 does not provide for
notice to the Commission or a QF that the utility has declared a must-run period or its expected
duration. Id. at 696. In addition, proposed Schedule 74 does not provide for an opportunity for
the Commission or a QF to contest the utility's declaration of a must-run period. /d, Finally, it
is unclear whether Schedule 74 would operate to curtail Idaho Power's own PURPA resources.
Id. at 677.
We find that, as proposed, Idaho Power's Schedule 74 is too vague and adoption of
such a tariff is not adequately supported by the evidence provided in this proceeding. If the
Company believes that the over-supply of QF power presents operational problems during light-
load periods then it should address this issue when it negotiates new PPAs.
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G. Ownership of Renewoble Energt Certtfrcates (REC{
We next turn to the dispute regarding renewable energy credits (RECs). Typically
RECs (also known as environmental attributes, green tags, or renewable trading certificates)
represent the environmental attributes associated with I MWh of electricity generated from an
eligible renewable energy source. Order No. 32580 at 4. The utilities and Staff generally assert
that RECs should belong to the utility. Conversely, the PURPA or QF developers argue that
RECs should belong to them. Before providing the position of the parties in greater detail, it is
helpful to review the history, legal background, and the interplay between RECs and PURPA. In
June 2012, the Commission addressed the history and interplay between RECs and PURPA. See
Order No. 32580.7
l. Backeround. A renewable portfolio standard (RPS) typically requires electric
utilities to generate or purchase a certain percentage of their annual generation (their "portfolio")
from designated renewable energy sources or meet their RPS obligation by the purchase of
unbundled RECs. Since about 1995, about 25 States and the District of Columbia have created
mandatory RPS programs. There is no federal RPS standard. Order No. 32580 at 3, citing
Sleven Ferrey, et al. "Fire and Ice: World Renewable Energy and Carbon Control Mechanisms
Confront Constitutional Barriers," 20 Duke Envtl. L. & Pol'y F. 125 at146 (2010) (hereinafter
" Fercey"\. The purpose of adopting RPS progrcms is to improve air and water quality, reduce
greenhouse emissions, broaden fuel diversity, enhance energy security, and hedge against the
price volatility of fossil fuels. Order No. 32580 citing American Ref-Fuel Company, 105 FERC
61,004 at\4 (Oct. 1,2003) rehr'g. denied,l0T FERC 61,016 (April 15,2004),dismissed sub
nom. for lack of jurisdiction, Xcel Energt Services v. FERC,407 F.3d 1242 (D.C.Cir. 2005).
RECs did not exist and were not contemplated when PURPA was enacted in 1978. American
Ref-Fuel, 105 FERC at fl 4; Order No, 29480 at 3. Indeed, PURPA and RPS programs were
created for different reasons.
"About half of the states that have adopted RPS programs allow utilities to use
[RECs] to meet their RPS requirements," Order No. 32580 at 4 citing Ferrey at 145. As the
Second Circuit explained in Wheelabrator Lisbon v. Connecticut Dept. Public Utility Control,
7 Several parties in this case have cited to Order No. 32580 in their legal briefs or testimony addressing RECs,
Parties addressing Order No. 32580 include: Idaho Power, C/E/S, ICL, Idaho Wind Partners, and Staff
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RECs are "tradable certificates . . . that conespond to a certain amount of
renewable energy generated by a third party." American Ref-Fuel,l05 FERC
at t[ 61,005. Generally speaking, RECs are inventions of state propert.y law
whereby the renewab_le energy attributes are "unbundled" from the energy
itself and sold separately. The credits can be purchased by companies and
individuals to offset use of energy generated from traditional fossil fuel
resources or . to satisfr certain requirements that [utilities] purchase a
certain percentage of their energy from renewable resources.
531 F.3d 183, I 86 (2d Cir. 2008) (emphasis added); Order No. 32580 at 4. FERC has declared
that RECs "exist outside the conlines of PURPA. PURPA thus does not address the ownership
of RECs. . . . States, in creating RECs, have the power to determine who owns the RECs in the
initial instance, and how they may be sold or ffaded; it is not an issue controlled by PURPA."
Order No. 32580 at 5 quoting American Ref-Fuel,l05 FERC atn23; Order No. 29480; ldaho
Wind Partners,136 FERC 61,174 at n.l0 (Sept. 15,20ll) ("the sale and trading of RECs are for
the states to decide"). Because "RECs are state-created, different states can treat RECs
differently." American Ref-Fuel,107 FERC 61,016 atn.4.
The parties in this case agree that the Idaho Legislature has not implemented an RPS
program nor has it enacted any statute which addresses the ownership of RECs. Moreover, this
Commission has noted on several occasions, the "State of Idaho has not created a REC program,
has not established a trading market for [RECs] nor does it require a renewable resource
portfolio standard." Order No, 32580 at9 citing Order Nos. 29480,29577,29630. With this
background, we now turn to the arguments of the parties.
2. Utilities. Rocky Mountain believes that RECs should belong to the utility
whenever the QF sells energy to the utility under PURPA. Tr. at 222. Company witness Paul
Clements explains but for PURPA's must purchase provision, utilities would not be required to
purchase the renewable energy.
Without these [renewable or efficiency] characteristics, the [QF] would not be
able to require the utility to purchase its energy at all. In other words, it is
only by virtue of the existence of the Environmental Attributes that facilities
are deemed OFs and utilities become obligated to purchase their power. In the
case of eligible renewable energy resource QFs, these Environrlrgntal
Attributes are the essence of the requirements to purchase the output, and is
therefore part of what the utility is buying with the payment of avoided costs.
If Rocky Mountain Power does not get the QF Environmental Attribute, it is
not receiving the very characteristic that enabled the facility to achieve its QF
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status, and which thereby triggers the utility's obligation to purchase the
output from the facility.
Tr. at 223-24 (emphasis added). If ownership of the RECs is not assigned to the utility, then
"Rocky Mountain Power and its customers would in effect be paying twice for that attribute . . .
." Tr. a1223.
Mr. Clements maintains that the subsequent unbundling between the PURPA power
and the RECs associated with that very same power does not justi$ separate compensation. Tr.
a|224. As originally envisioned by PURPA, a purchasing utility is not buying "undifferentiated
energy from the Grid; it is buying energy that . . . the utility is required by law to purchase." Tr.
at 225. The subsequent creation of RECs with their associated market value should not deprive
utilities of the attributes subsumed in the renewable power they are required to purchase under
PURPA. He recommended that any power purchase from a QF should assign the associated
environmental attributes to the purchasing utility.
In its brief, Avista first argues that the Commission has jurisdiction to determine the
ownership of RECs. Avista insists that FERC has expressly disclaimed jurisdiction over RECs
and has held that the states "have the power to determine who owns the RECs in the initial
instance, and how they may be sold or traded." American Ref-Fuel,l05 FERC 61,004 at\23.
Avista asserts that the Public Utilities Laws (61-501, 6l-503, 6l-507, etc.) give the Commission
subject matter jurisdiction over the determination of RECs. More specifically, Avista maintains
that a QF may be considered a "public utility" as defined by ldaho Code $ 6l-129. Although it
recognized that PURPA prohibits states from regulating QFs in the same manner as other public
utilities, Avista nevertheless argues that federal law 'odoes not prohibit all regulation of QFs by
states." Avista Brief at 4, n.15 citing l8 C.F.R. fi 292,602(c)(2); Independent Power Producers
of New York, 80 FERC 61,125 (1997)(affirming the requirement that QFs must comply with
certain state monitoring requirements was a legitimate exercise of the state's authority). Avista
also states that the avoided cost rate cannot be adjusted to compensate for RECs. Id. al6.
Avista asserts that other state commissions have addressed the ownership of RECs.
Brief at 5 citing In Re the Rtley Energt Corp,,2004 WL 3160409 (Conn. DPUC 2004). In
particular, Avista insists that the State Commissions of Connecticut, Nevada, New Jersey, North
Dakota, Oregon, Pennsylvania, Utah, and Colorado have all determined that REC ownership
should be vested in the utility. Id. at 5,n.16.
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Idaho Power asserts in its brief that it is "well established that the question of REC
ownership is properly decided by the states. PURPA does not govern the question [of RECs]."
Brief at 69, citing American Ref-Fuel, 105 FERC at !f 23, rehr'g denied, 107 FERC 61,016
(2004), appeal dismissed sub nom., Xcel Energt Services v. FERC,407 F.3d 1242 (D.C. Cir,
2005); Wheelabrator Lisbonv. Connecticut Dept. of Uttl. Control,53l F.3d 183, 190 (2d Cir.
2008); IPUC Order No. 32580. The Company further argues that the Commission has the
subject matter jurisdiction to decide the REC issue. Brief at 73-79. Like Avista, Idaho Power
maintains that the Commission's organic statutes ($$ 6l-502, 61-503, 6l-506, 6l-507 and
others) grant the Commission broad powerc to regulate the terms and conditions of PURPA
contracts. Id. at77-78,
Idaho Power points to decisions of other state commission (Connecticut, New Jersey,
Maine, Pennsylvania, Wyoming) that do not have REC or RPS statutes. Id. at 80. The utility
argues these other state cases represent a compelling argument why RECs should belong to the
purchasing utility. "Simply put, in the absence of an Idaho RPS [or REC] statute, there is no
reason to conclude that a QF selling to an Idaho utility has any right or ability to unbundle
energy and environmental afiributes." Id. at86.
Idaho Power also mentions a November 201I order issusd by the Wyoming Public
Service Commission. In Order No. 12750, the Wyoming Commission found that Rocky
Mountain Power's argument that the utility should retain the RECs was persuasive. Relying on
Mr. Clements testimony, the Wyoming Commission found that Rocky Mountain
should continue to retain the RECs since they represent tangible value for the
ratepayer, and they should not be routinely severed from the underlying green
power generated. The Commission had in the past made it clear that REC
revenues are a key component to mitigate, to an extent, the effects on
customers of the ongoing series of rate increases filed RMP. The Commission
is not inclined to approve the transfer of RECs to other entities and reiterates
its position that RECs should stay with the utility.
ldaho Power Brief at 86-87, citing Wyoming Order No. 12750 at fl 63 (Nov. 4,2011).
3. Commission Staff. Staff also insists that the Commission has the subject matter
jurisdiction to decide the REC issue. In particular, Staff notes that the Legislature has delegated
authority to the Commission "to deal broadly with existing and future rates, rate schedules and
contracts affecting rates." ll/ashington l4/ater Power Co. v. Kootenai Environmental Alliance,99
Idaho 875, 880, 951 P.2d 122,127 (1979); StaffBrief at 4. Staffmaintains that the Commission
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has the authority to decide the REC issue because the ownership of RECs and their value are
inextricably tied to power rates and contracts affecting rates. Id. Staff observed that the costs
associated with QF contracts are directly recovered from ratepayerc. Id. at 4.
Staff also asserts that but for the must purchase requirement of PURPA, the QF and
the associated REC, would not exist. Echoing a point raised by Rocky Mountain, Staff states in
its brief that if a
QF restricts the renewable attributes prior to conveying the energy to a utility,
then the bases for which the QF initially received its [qualiffing] status and
gained its authority to sell no longer exists. Said another way, if the utility is
being compelled to purchase based on the energy being [classified as]
renewable, then the renewable status should remain with the energy purchased
by the utility, Moreover, an environmental attd_bute is an intaneible
characteristic of the energy generated by a renew4ble qnergv facility, not a
characteristic of the facility itself.
Brief at 4 (emphasis added).
Staff notes that one of the purposes of PURPA was to reduce the country's
dependence on fossil fuels by encouraging renewable technologies and cogeneration. However,
one of the key underpinnings of PURPA was to make "ratepayers indifferent as to whether the
utility used more traditional sources of power or the newly-encouraged [QF] altematives." /d at
5 quoting Southern Cal Edison, San Diego Gas & Electric, Tl FERC 61,269,62,080 (1995).
Staff insists that Congress did not intend to create an environment in which renewable energy
producers thrive to the detriment of the utility's ratepayers.
In balancing the competing REC arguments, Staff recognizes the differences in
assigning RECs under the IRP and SAR methodologies. More specifically, "because the SAR is
a [natural] gas-fired resource that does not produce RECS," [such] "RECs would be a unique
attribute of the power provided by the QF." Tr. at 1122-23. Conversely, under the IRP
Methodology, a utility's 2O-year resource portfolio contains some renewable resources. In this
latter case, the utility would presumably be entitled to RECs. /d,
4. Intervenors, Although Renewable Northwest (RNW) recognizes that RECs are "a
creature of state law and exist outside of PURPA," it argues that assigning RECs to the utility
would nevertheless violate PURPA by: (l) discriminating against QFs; (2) discouraging future
QF development; and (3) represent a windfall to utilities. Brief at 5, l-4. RNW argues that
unbundled RECs are not part of the avoided cost methodology. Id. at 5-6. It also suggests that
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neither the SAR nor the IRP methodologies used to calculate avoided costs in Idaho include
compensation for RECs in any fashion. Id. al7. Providing the RECs to utilities would mean that
utilities would receive energy, capacity and RECs, but only pay for the energy and capacity, Id,
at 9. Such a hnding would run afoul of PURPA's anti-discrimination provision and undermine
PURPA's objective to encourage renewable generation. 1d.
The Canal Companies note that FERC recognizes that RECs, like the thermal output
from cogeneration QFs, may be sold separately (i.e., unbundled) from the capacity and energy
output of QFs. Brief at 9. FERC has emphatically stated that avoided cost rates are not intended
to compensate the QF for more than capacity and energy. Id. at 10. More recently, FERC
affirmed its holding in American Ref-Fuel that "the sale and trading of RECs are for the state to
determine, and that this is not an issue that PURPA controls." Idaho llrind Partners, 136 FERC
61,174 at IJ l0 (Sept. 15, 201l).
The Canal Companies and C/E/S both maintain that prior Order Nos. 29480 and
29577 of this Commission (in Case Nos. IPC-E-04-02 and IPC-E-04-16, respectively) declared
that RECs do not belong to the utilities. Canal Brief at l0-ll; C/EiS Brief at 29-30.
Consequently, CIE/S argues that these Orders may be interpreted to hold that "ldaho QFs are the
default owners of [RECs]." Brief at 30. Finally, if the Commission does assign RECs to
utilities, then utilities must compensate the QFs for the "taking" of RECs. "QFs' interest in the
transferable [and unbundled] RECs of QFs is a compensable property interest." Canal Brief at
16. Taking of a QF's REC property without just compensation would violate both the U.S. and
Idaho Constitutions. Id.;ClElS Brief at 32.
The Idaho Conservation League (ICL) maintains that the Commission has no
authority to resolve REC ownership. Brief at 3. ICL notes that the Commission in its prior REC
Order No. 32580 explained that "RECs are inventions of state property law whereby the
renewable energy attributes are'unbundled' from the energy itself and sold separately." Id. at3-
4, citing Order No. 32580 at 4. Absent a specific Idaho statute that addresses RECs, ICL
maintains that the legal status of RECs depends upon "traditional notions of common law, which
in Idaho vests those rights in the owner who expends the time and effort to create the property."
Id. at 4 citing King v. Chamberlain,20ldaho 504, I l8 P. 1099 (l9l l). "Because QF developers
expend their own time and resources to create an independent property right in RECs, . . . QF
developers inherently own RECs under Idaho law," Brief at 4.
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Dynamis and Renewable Energy Coalition (RE) also argue that the Commission has
no authority to determine the ownership of RECs. Relying upon the Kootenai Environmental
Alliance case, they assert there is no statute that gives the Commission the authority to adjudicate
the ownership of RECs. REC ownership does not fall into those subject matter areas that the
Commission traditionally regulates, nor does it require the application of the Commission's
technical expertise. Brief at 3-4,citing Kootenai,99 Idaho 875,882,591 P.2d 122,129 (1979).
They also note that the2012 Legislature did not pass Senate Bill No. 1364 which, if enacted into
Iaw, would have recognized that RECs associated with QF power sales are "atFibutes of the
power purchased by the utility." Brief at 6; Exh. No. 802. Although, no legislative hearings
were held on the bill, they infer that the printing of this bill reinforces the view that the
Commission does not have authority to adjudicate RECs. /d.
Commission Findings
l. Jurisdiction. We turn first to the issue of subject matter jurisdiction. Dynamis/RE
and ICL argue that the Commission does not have jurisdiction to decide the REC issue. First,
ICL argues that because there is no REC statute, the Commission cannot decide the matter.
Second, they argue that the Legislature "has considered but ultimately rejected two attempts at
addressing the ownership of RECs." ICL Brief at 2; see a/so Dynamis/RE Brief at 5-6; Exh.
802, 803. Dynamis/RE argue that the failure of the Legislature to pass a REC statute should be
construed as the Commission lacking authority to decide the REC issue. Conversely, Avista,
Idaho Power and Staff argue that the Commission does have the requisite subject matter
jurisdiction to decide the REC ownership dispute.
At the outset, we recognize that the Commission is a creature of statute and our
jurisdiction is dependent upon our statutory authority, The Commission exercises limited
jurisdiction based upon the authority given by the Legislature. Washington Water Power v,
Kootenai Environmental Alliance, 99 ldaho 875,879,591P.2d 122,126 (1979). Our Supreme
Court has noted that the Commission may determine whether we have jurisdiction over specific
issues. td. However, "once jurisdiction is clear, the Commission is allowed all power that is
either expressly granted by statute or which may be fairly implied" to effectuate its purpose.
ldaho State Homebuilders v. lflashington Water Power,l07 Idaho 415,418, 690 P.2d 350, 353
Q98$; Id. We do not agree with ICL and Dynamis/RE that the Commission does not have
authority to determine the REC question for several reasons.
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First, it is well settled that the Commission has been granted authority to review OF
contracts and resolve disputes between OFs and electric utilities. A. W. Brown v. Idaho Power,
121 Idaho 812, 816, 828 P.2d 841, 845 (1992); Empire Lumber Co. v. [Yashington Water Power,
114 Idaho 191,755 P,2d 1279 (1988); Afton Energt v. Idaho Power Company 107 Idaho 781,
693 P,2d 427 (1984); Idaho Code $ 6l-612. The disposition of RECs is now a term that is found
in most, if not all, PURPA contracts, Since 1980, the Commission's PURPA procedures have
required that all QF contracts be submitted to the Commission for its approval. Order No.
15746,38 P.U.R. 4th 352 (Idaho 1980); Order No. 29632, 2004 WL 2724113 (Idaho PUC); see
Rasebud Enterprises v. Idaho PUC,l2S Idaho 609,620, 917 P.2d766,778 (1996). Likewise,
Idaho Code $ 6l-502 authorizes the Commission to review contracts with utilities that affect
utility rates and charges. Moreover, Idaho Code $ 61-503 provides that the Commission shall
have the power to investigate the contracts of any public utility,
Second, in A.W. Brown, our Supreme Court rejected the QF's argument that the
Commission has no jurisdiction "to litigate the common law contract issues between [the QF]
and Idaho Power. , . ." l2l Idaho at 819, 828 P.2d at 848. The Court rejected that argument and
found "that the Commission 'has jurisdiction to hear complaints against utilities alleging
violation of any provision of law. . . ."' Id. Ln Empire Lumber, the Court found that the
Commission has been "granted authority by the Idaho statutes to, and is the appropriate forum to
resolve" PURPA contract issues. I 14 Idaho at 192,755 P.?d at 1230. In this proceeding, the
parties have argued about the ownership of RECs in standard PURPA contracts and this dispute
is ripe for decision.
Third, we find that the disposition of RECs directly affects rates. As noted above, the
sale of RECs directly offsets the rates that utilities must pay QFs for power. The cost of
purchasing QF power is initially recovered in the annual Power Cost Adjustment (PCA)
mechanisms for Idaho Power and Avista, and in the Energy Cost Adjustment Mechanism
(ECAM) for Rocky Mountain. Tr. at392,l107. Upon the utility's next general rate case filing,
QF costs become part of base rates. The sale of RECs by utilities is recorded in the PCA/ECAM
mechanisms of the utilities. Tr. at 573, 1192, ll93-94. Thus, the disposition of RECs directly
affects utility rates. And, as our Supreme Court noted in Kootenai, Idaho Code $$ 6l-502 and
6l-503 embody "the legislative grant of authority to the Commission to deal broadly with
existing and future rates, rate schedules and contracts affectins rates." 99 Idaho at 880, 591 ?.2d
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at 127. Consequently, we find that the Commission has subject matter jurisdiction to decide the
REC issue.
Finally, we find Dynamis/RE's argument that the Commission lacks authority to
decide the REC issue based on the introduction of a REC bill (SB 1364) in the last legislative
session to be unpersuasive. Dynamis/RE acknowledges there were no hearings on the bill. Brief
at 6. The fact that legislation was intoduced but no hearings were held, no committee votes
wete taken, and the Legislature as a whole did not vote on the bill is accorded lifile weight. See
Casey v. Com'er of Lqbor & Ind., 167 A.Zd 900 (N.J.Super. 196l). As any observer of the
Iegislative process recognizes, many more bills are introduced than enacted, and it is not unusual
for bills in Idaho to be "printed" (i.e., assigned a bill number), and receive no further legislative
consideration.s
2. RECs. We now tum to the merits of the REC issue. Despite the disagreement
among the parties regarding RECs, there are several facts which are not in dispute. First, all the
parties agree that PURPA does not control RECs - RECs are controlled by the state. RECs exist
outside the confines of PURPA. Second, there is no Idaho law that implements a renewable
portfolio standard (RPS) progftrm or addresses the ownership of RECs. Order No. 32580, 29480
at 9. Third, the parties agree that ldaho's avoided cost rates do not compensate QFs for RECs.
Moreover, this Commission has previously found, avoided cost rates "are not intended to
compensate the QF for [RECs]." Order No. 32580 at 8 quoting Morgantown Energt Associeles,
139 FERC 61,066 at\ 47 (April 24,2012). See qlso Califurnia PUC,133 FERC 61,059 at ![ 3l
n.62 (Oct. 21,2010).
As we noted in Order No. 32580, RECs resemble intangible assets. But for the "must
purchase" provision of PURPA, RECs would not exist or be created for a PURPA project. RECs
are non-physical assets which exist only in connection with something else, i.e., the purchase of
E DynamiVRE's reliance on two other Idaho Supreme Court cases is also misplaced. Brief at 3-5. ln Alpert v. Boise
llater Corp., I l8 ldaho 136, 795 P.zd 298 (1990) the issue before the Court was the validity of franchise
agreements between utilities and certain cities under ldqho Code $$ 50-329 and 50-329A. Here RECs are an
integral part of PURPA contracts. The Court has observed many times that it is well setlled that the Commission
has been granted authority to review QF contracts and resolve disputes between QFs and electric utilities. ln Ada
County Highwry District v. Idaho PUC, l5l ldaho 2, 253 P.3d 675 (2011), Dynamis/RE asserts that the
Commission in that case argued that it had "statutory authority to order relocation of utility facilities owned by third-
party beneficiaries." Brief at 5. That was neither the position of the Commission nor do third parties "own" utility
facilities.
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QF power under PURPA.e Order No. 32580 at 10, citing Black's Law Dictionary at 808 (6th ed.
1990). There is no REC without the QF generating power.
Having considered the positions advanced by the parties, we find that it is reasonable
to apportion RECs based upon the SAR or IRP methodologies applicable to each QF project.
The avoided cost rate paid to a QF under the SAR Methodology is based on a gas-fired surrogate
resource. If the utility were not o'avoiding" the cost by accepting the QF energy, it would build a
gas resource. Gas resources do not produce RECs. Because the SAR Methodology is based
upon a gas-fired surrogate and such a resource produces no RECs, we find that it is reasonable
and appropriate to assign the RECs for SAR-based QFs to the QFs. Conversely, IRP rates are
derived from the utility's actual resource portfolio. The IRP Methodology considers a utility's
resource stack that contains both renewable and non-renewable resources. The rates are based
on the actual generation characteristics of the renewable resource. Renewable resources,
whether utility or QF owned, produce RECs. In this case, absent an agreement between the
parties to do otherwise, we find it reasonable to equally apportion RECs between the utility and
the QF. Tr. at 1122-23. Because both the utility and the QF are contractually and inextricably
joined in the production, sale and purchase of QF power, we find that it is reasonable to
apportion the unbundled REC assets in this manner. Under the IRP Methodology, we find that
splitting RECs either 50%-50% each year over the life of the PPA, or equally in terms of years
over the length ofthe contract, is reasonable. Indeed, several recent Orders have approved the
splitting of RECs in this manner. See Order Nos. 32419 (Cedar Creek), 32451 (Riverside),
32384 (Intercomect Solar), 32294 (Clark Canyon), and 32125 (Rockland).
Assigning RECs to both the QFs and utilities (including their ratepayers) reasonably
allocates the benefits and burdens from these unbundled REC assets, Typically unbundled RECs
produced in Idaho are sold to produce revenue. From the utility's perspective, selling RECs
produces revenue which directly offsets the utility's (and ratepayers) costs of purchasing power
from QFs. Tr. at 573,1192,ll93-94; see Order No. 32002. Thus, another tangible ratemaking
element to RECs.
We further find that assigning RECs to the QFs under the SAR Methodology and
splitting RECs under the IRP Methodology is also in the public interest. From the QF's
perspective, revenues from the sale of RECs continue to provide a revenue stream to QF
e We recognize that RECs may exist in non-PURPA renewable projects. Order No. 32580 at n.5
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developers to encourage the development of renewable generation. This promotes the
underlying purpose of PURPA and specifically recognizes that the SAR Methodology is based
on a natural gas-fired surrogate. 8.9., Rosebud, 128 ldaho at 627,917 P.Zd at784. Splitting
RECs under the IRP Methodology for wind/solar QFs larger than 100 kW and other QFs larger
than l0 MW also mitigates those arguments that assigning RECs to either the QF or the utility in
their entirety represents a revenue windfall to the recipient. Under the IRP Methodology, both
the QF and the utility (including its ratepayers) share the benefits of selling RECs. Finally,
because the ownership of RECs is apportioned as set out above, there is no taking of the
intangible asset resulting from the QF-utility relationship. As the Connecticut Supreme Court
found in a similar case, the "[PUC's] decision [to award RECs to the utilityJ could not constitute
an unconstitutional taking under the State's Constitution because no property owned by the [QF]
has been taken." Wheelabrator Lisbon v. Dept, of Public Util. Control,zl3 Conn. 672,700,931
A.2d 159, 177 (2007); Weelabrutor Lisbon, 526 F.Supp.2d 295,307 (D.Conn . 2006), alf med,
531 F.3d 183 (2d Cir. 2008).
We are also not persuaded by the Canal Companies' and C/E/S's argument that two
prior Commission Orders (Nos. 29480 and29577) assigned RECs to the QF. As we found in our
Order No. 32580, the Commission in Order No. 29480 did not reach the issue of REC ownership
in Case No. IPC-E-04-02. We dismissed Idaho Poweros petition for a "right of first refusal"
because the petition did not "present an actual orjudiciable controversy in Idaho and is not ripe
for a declaratory judgment by this Commission." Order No. 29480. In the second Order relied
upon by the Canal Companies and C/E/S (No. 29577), Idaho Power waived any claim to
ownership associated with a PPA between Simplot and Idaho Power (Case No. IPC-E-O4-16). In
Order No. 32580, we stated "Given the agreement between the parties, the Commission did not
address the REC ownership issue." Order No, 32580 at 1l citing Order No.29577.
In summary, we find that the Commission has subject matter jurisdiction to decide the
REC issues for the reasons set out above. We further find that it is fair and reasonable to
apportion RECs equally between the QF and the utility when using IRP Methodology, and assign
all RECs to the QF when using SAR Methodology.
H. Contracting Procedures and Rules
Proposals were made by multiple parties regarding Commission approval of
conkacting procedures and rules. The parties supported terms for contract milestones, timing of
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pricing, conditions for delivery of power, and other various informational requirements. We find
that such procedures and rules would be beneficial to both the utilities and the QFs. We find that
a fair and consistent set of rules for the utilities and QFs would reduce confusion and provide
more certainty regarding the expectations of all contracting parties. We are optimistic that such
rules might also reduce the number of complaints filed with this Commission because of disputes
regarding contract terms. We direct the parties to participate in workshops with one another to
begin to form a structure for fair and reasonable contracting procedures and rules. We expect the
parties to submit to this Commission no later than December 13, 2013, aproposal for approval of
such terms.
INTERVENOR FUNDING
On August 14, 2012, the Idaho Conservation League filed a request for intervenor
funding in the amount of $8,100. The Canal Companies (Twin Falls Canal Company, North
Side Canal Company, Big Wood Canal Company, and American Falls Reservoir District No. 2)
filed a request for $55,445 in intervenor funds on August 21,2012. Both applications were
timely.
Intervenor funding is available pursuant to ldaho Cade $ 6l-6174' and Commission
Rules of Procedure 161 through 165. Section 6l'617,4.(l) declares that it is "the policy of
[daho] 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 any one case is $40,000. Idaho Code $ 6l-
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: (l) 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;
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(6) a statement showing how the intervenor's recommendation or position addressed issues of
concem to the general body of utility users or customers; and (7) a statement showing the class
of customer on whose behalf the intervenor appeared.
l. Idaho Conservation League (lCL). ICL is a non-profit organization supported
through charitable donations of members and foundations. ICL provided an itemized list of
expenses tokling $8,187.50. The organization "rounded down for ease of accounting" and
requests $8,100 in intervenor funding for attomey's fees incurred by participating in the case,
reviewing the testimony, and representing ICL at the hearing. Petition at 2.
ln its Petition, ICL states that it reviewed the case, opposed Idaho Power's Motion for
a Temporary Stay, filed direct testimony, and actively participated in the evidentiary hearing.
ICL further maintains that its position differed materially from that of Staff regarding ownership
of renewable energy credits. ICL argued in briefing and at hearing that RECs are an independent
property interest owned by the project developer. ICL also submitted testimony to rebut Idaho
Power regarding its legal obligations on dams pursuant to the Clean Water Act. Id. at 4.
ICL maintains that, as a non-proflrt organization, its charitable contributions are
inherently unstable. As such, the availability of intervenor funding is essential for ICL to
participate in proceedings in front of the Commission. Id. ICL states that they have no
pecuniary interest in the outcome, "rather we dedicated our time and resources to represent the
interests of our 20,000 supporters around the state who have a strong interest in a robust clean
energy industry in ldaho." /d.
ICL asserts that it addressed issues of concem for customers of all three utilities. "All
customers, regardless of class, share a strong interest in ensuring Idaho utilities acquire power
pursuant to rules that are fair, accurate, and conform to applicable laws." Id. Therefore, the
organization suggests that the Commission allocate the responsibility for any intervenor funding
award equally between the thrree utilities. Id. at l. ICL maintains that both its hourly rate and
hours expended are reasonable based on the complexity of this case. Petiti on at 2. ICL further
states that its rates are "in line with the cunent range for other intervening parties." Id.
2. The Canal Companigs. The Canal Companies provided an itemized list of partial
expenses incurred during this proceeding. The Canal Companies assert that they seek an
intervenor funding award only based on $55,445 in fees associated with retaining the expert
oRDERNO. 32697 49
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consulting services of Mr. Don Schoenbeck. Petition at 3. They do not request an award for the
recovery of fees associated with legal counsel. Id. at2.
In its Petition, the Canal Companies state that through the testimony of its witnesses,
cross-examination of utility witnesses and in closing arguments, they advocated for 2O-year
contract length, l0 MW nameplate eligibility for published rates, and two-run simulations for
IRP-based modeling. The Canal Companies also advocated an altemative for capacity payments
and maintained that actual damages for breach of contract by a QF be determined through a
"mark to market" approach. The Companies opposed Idaho Power's proposed curtailment tariff
and advocated for QF ownership of RECs. The Canal Companies maintain that their various
positions were materially different from Staff s.
The Canal Companies state that their members/owners are ratepayers of Idaho Power.
Id. at3. The Companies state that their funding for participation in this case is gained through a
membership assessment fee. Id. The Canal Companies maintain that they addressed issues of
concern for Idaho Power customers and in the public interest. "All customers, regardless of
class, share a strong interest in ensuring Idaho utilities acquire power pursuant to rules that are
fair, and accurate, and conform to applicable laws. . . . In addition, the involvement of Idaho's
canal systern in the production of inexpensive renewable energy provides a multiplier effect into
the local economy. . . .* Id. at 5. The Canal Companies maintain that the customer classes they
represent are residential and small commercial customers of Idaho Power and Rocky Mountain
Power, "as well as QFs falling within the purview of Section 210 of PURPA allowing for sale
and purchase of energy from investor-owned utilities." /d
Commission Findings
The Commission has reviewed the Petitions for Intervenor Funding filed by ICL and
the Canal Companies. We find that ICL contributed to discussions, debate and testimony and
presented important perspectives that materially contributed to the Commission's decision-
making in this case. Specifically, ICL presented testimony and cross-examination regarding
Idaho Power's dams and must-run requirements that prompted meaningful discussion regarding
the breadth of Idaho Power's proposed curtailment tariff.
The Commission finds that ICL's participation contributed to our deliberations in this
matter and presented positions different from that of Staff and other utility and intervenor
witnesses. We further find that $8,100 is a reasonable amount in costs and fees based on ICL's
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I
I
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level of participation at all phases of this proceeding and that these costs would otherwise
amount to a financial hardship for the organization. Therefore, we find that it is just and
reasonable to grant ICL intervenor funding in the amount of $8,100. Pursuant to ldaho Code $
6l-617A(3), the amount awarded to ICL shall be recovered from Avista, Idaho Power and Rocky
Mountain Power based on a proportional share of the total number of Idaho customers served by
each utility
We find that the Canal Companies participation also contributed to the positions
advanced by the parties to this case. Mr. Schoenbeck's testimony advanced a reasonable
approach on several issues that otherwise divided the utilities and the QFs. However, in
considering the reasonableness of the request for intervenor funding made by the Canal
Companies, the Commission is required to consider whether the payment of the amount
requested by the intervenors would constitute a "significant financial hardship." Idaho Code $
6l-617A(2)(b); IDAPA 31.01.01 .16?.04. The Canal Companies made no mention of whether
and to what extent their participation and commensurate expenses would amount to a significant
financial hardship for their members. We find that a showing of financial hardship is critical for
an award of intervenor funds. Therefore, we deny any award of intervenor funding to the Canal
Companies based on their failure to comply with the requirements of ldaho Code $ 6l-617A(2).
ULTIMATE FINDINGS AND CONCLUSIONS
The Commission has jurisdiction over this matter pursuant to the authority and power
granted it under Title 61 of the Idaho Code and the Public Utility Regulatory Policies Act of
1978 (PURPA), The Commission has authority under PURPA and its implementing regulations
to set avoided costs, to establish standard published avoided cost rates, to order electric utilities
to enter into fixed-term obligations for the purchase of energy from QFs, and to implement
FERC regulations. The Commission is also empowered to resolve complaints between QFs and
utilities and approve QF contracts.
Under PURPA, utilities are required to purchase QF generation at a rate equal to the
utility's avoided cost. l8 C.F.R. $ 292.304(b)(2). "Avoided costs" are the incremental costs to
the electric utility of power which, but for the purchase from the QF, such utility would generate
itself or purchase from another source. 18 C.F.R. $ 292.101(bX6). PURPA and FERC
regulations direct not only that rates for purchases shall not discriminate against QFs, but also
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that avoided cost rates be just and reasonable to the utility's ratepayers and in the public interest.
18 C.F.R. $ 292.30a(aXl).
Although FERC promulgated the general scheme and rules, it left the actual
implementation of PURPA to the state regulatory authorities. Rosebud Enterprises, Inc. v. Idaho
Public Utilities Commission, 128 Idaho 609,614,917 P.2d766,771(1996). FERC regulations
grant the states latitude in implementing the regulation of sales and purchases between QFs and
electric utilities. See Federal Energt Regulatory Commission v. Mississippi,456 U.5.742, rcz
S.Ct. 2126, 72L.Ed.zd 532 (1982).
As we have stated previously in this docket and other PURPA related matters, this
Commission has a long history of encouraging PURPA development. With the changes adopted
herein, we believe that PURPA development can continue to thrive in a way that holds
ratepayers harmless. QF projects will be compensated according to their ability to provide a
utility with needed energy and capacity at a rate that reflects the costs that the utility avoids by
purchasing QF generation. Our findings regarding calculation of avoided costs, eligibility to
published rates, RECs and performance security, terms and conditions within contracts, and
length of contracts are entirely consistent with PURPA and FERC regulations.
ORDER
IT IS HEREBY ORDERED that published avoided cost rates are available for wind
and solar projects producing up to 100 kW. Published rates for all other resources are available
for projects producing up to l0 aMW.
IT IS FURTHER ORDERED that qualifying facilities not receive compensation for
capacity until the utility is capacity deficient.
IT IS FURTHER ORDERED that natural gas prices utilized in the SAR
Methodology be updated annually, on June 1 of each year, with the most recent natural gas
forecasts provided by EIA's Annual Energy Outlook.
IT IS FURTHER ORDERED that fuel price forecasts and load forecasts utilized in
the tRP Methodology be updated annually, on June I of each year. In addition, long-term
contracts shall be considered in IRP Methodology calculations at such time as the utility and QF
have entered into a signed contract for the sale and purchase of QF power.
IT IS FURTHER ORDERED that a utility's determination of capacity deficiency
through its IRP planning process shall be subject to additional scrutiny for use within the SAR
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Methodology. We continue the remainder of the IRP planning process as it is currently
constituted.
IT IS FURTHER ORDERED that we adopt and approve the Partial Settlement
Stipulation regarding security deposits, delay damages, refunds, and termination damages in its
entirety.
IT IS FURTHER ORDERED that RECs for SAR based projects will be owned by
the QF. RECs produced by projects utilizing the IRP Methodology will be equally apportioned
between the utility and QF in the manner of their choosing.
IT IS FURTHER ORDERED that Idaho Power's proposed Schedule 74 is not
approved.
IT IS FURTHER ORDERED that additional pricing calculations, contract
provisions, terms and conditions shall comply with the findings of this Commission as set out in
grcater detail in the body of this Order.
IT IS FURTHER ORDERED that ICL's Petition for Intervenor Funding is granted in
the amount of $8,100. The utilities are directed to remit this amount to ICL within 28 days from
the date of this Order and as more specifically described herein. IDAPA 31.01.01.165.02.
IT IS FURTHER ORDERED that the Canal Companies Petition for Intervenor
Funding is denied.
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 ldaho Code $ 61-626.
oRDER NO. 32697 53
Case 1:18-cv-00236-REB Document 4-14 Filed 06/2511-8 Page 54 of 69
DONE by Order of the Idaho Public Utilities Commission at Boise, Idatro this I g *h
day of December 2012
PAUL KJEL
MACK A.
H. SMITH,
ATTEST:
O:CNR-E- I I -03_ks_dh_Final Ordcr
ORDER NO, 32697 54
/L^D n,--1-(
J-ddn D. Jewelill
CVmmission SYcretary
IDAHO POWERCOMPANY
AVOIDEO COST RATES FOR WIND PROJECTS
December 13, 2012
S/Mlil'tt
Ellgibility for these rates is limited to wlnd and solar projecta 100 kW or smaller, and to non-wlnd and non.
solar projects smaller than 10 aMW.
CONTRACT
LENGTH
ON.LINE YEAR
CONTRACT NON-LEVELIZED
1
2
3
4
5
6
7
8I
10
11
12
13
14
15
16
17
18
19
20
22.04
21.89
22.65
23.66
24.41
26.32
27.43
29.11
30.1 8
31.27
32.36
33.{2
34.39
35.28
36.1 2
36.95
37.74
38.48
39.1 I
39.89
21,73
22,99
24.29
25.13
27.39
29.08
30.47
31.6'l
32.75
33.92
35.03
36.(N
36.97
37.U
38.71
39.53
40.30
41.05
41.77
42.47
24.35
25.72
26.45
29.11
30.93
32.38
3?.52
34.69
35.88
37.02
38.6
39.01
39,90
40.79
41.63
42.42
43.1 9
43.93
44.55
45.35
27.21
27.63
30.97
32.93
3,(..10
35.52
36.68
37.90
39.07
40.1 3
41.08
41.99
42.89
43.75
iU.56
45.34
46.1 1
46.E5
47.57
48.30
28,09
33.08
35.16
36.58
37.81
38.75
39,97
41.15
42.21
43.16
44.08
44.99
45.A7
46.69
47.49
48.27
49.03
49.77
50.52
51,29
38.48
39.1 3
39.88
40.49
41.43
42.55
43.67
44.68
45.60
46.48
47.38
48.25
49.06
49.86
50.65
51.42
52.17
52.94
53.73
54.48
2012
2013
2014
2015
201 6
2017
201 I
201 I
2020
2021
2022
2023
2024
2025
2028
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
22.04
21.73
24.35
27.21
28.09
38.48
39.84
41.56
42.64
46.00
45.71
52.58
54.52
56.1 I
58.48
61.63
64.00
66.03
68.69
71.49
74.37
77 lA
81.63
86.29
88.46
92.22
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25118 Page 55 of 69
Note: The rates shown in this table have been computod using the U.S. Ensrgy lnformation Administratioo (ElA)'s Annual Energy
Outlook2o12releasedJun625,20l2. Soo'AnnualEnergyOutlook20l2,AllTables,EnergyPricosbySectorandSource,Mountain,
ATTACHMENT A
ORDER NO. 32697
CASE NO. GNR.E.11,O3
Referenca case" at httpj l Ar{,.6ia.gov/oiaf/secr'tablebroueser/
IDAHO POYT'ER COMPANY
AVOIDED COST RATES FOR SOLAR PROJECTS
Decembor 13,2012
i/Mwh
Ellglblllty for these rates ls llmlted to wind and rolar prciecb 100 kW or smaller, and to non-wlnd and non-
solar prolects smaller than l0 aMW.
CONTRACT
LENGTH
ON.LINE YEAR
CONTRACT NON.LEVELIZED
2012
1
2
4
5
6
7
a
o
10
11
12
13
14
15
16
17
18
19
20
I 8.70
1 8.52
20.93
27.47
31.58
35.26
39.78
42.60
4r1.89
46.97
48.S0
50.66
32.24
53.66
54.98
55.23
57.40
58.49
59.52
60.50
18.32
22.19
30.88
35.48
40.68
44.35
47.21
49.48
51.53
53.43
55.1 7
56.73
58.1 3
59.12
60.66
61.82
62.90
63.93
64.91
65.85
26.37
37,94
12.16
47.45
50.91
53.50
55.50
57.34
59.09
60.71
62.16
63.46
64.68
65.8s
66.96
68.00
68.99
69.94
70.86
71.74
50.46
51.04
55.66
58.35
60.32
61.84
63.33
64.83
66.25
67.53
68.70
69.81
70.90
71.94
72.91
73.86
74.78
75.65
76.52
77.39
51.66
5S.58
61.43
63.31
64.70
66.1 3
67.60
69,01
70.29
71.44
72.54
73.64
74.68
75.07
76.62
77.55
78.46
79.34
80.23
81 .13
66.06
66.91
67.85
68.65
69.77
71 07
72.37
73,55
74.63
75.66
76.71
77.76
78.73
79.68
80.61
81.52
82.41
83.32
u.24
85.1 I
2012
2013
2014
201 5
2016
2017
201 8
2019
2020
202'.i.
2022
2023
2024
2025
20%
2027
2028
202s
2030
2031
2032
2033
2034
2035
2036
2037
18.70
18.32
26.37
50.46
51.66
66.06
67.83
69.96
71.46
75.24
79.38
82.67
85.06
87.'16
89.91
93^53
96.37
98.86
'102.01
'105.30
108.67
1 1 1.99
1 16.94
122.12
't24.82
129.11
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25118 Page 56 of 69
Notet Th6 rat6s sho\,\,n in this table have b€en computed using the U.S. Energy lntormatbn Administration (ElA)'s Annual Energy
Outlook20l2releasedJun€25,2012. Se6'AnnualEnergyOuuook20l2,AllTables,EnergyPricesbySectotandSource,Mountain,
Relerence case" al http:i,/ww.eia.gov/oiat/a€o/tablebrortrser/.I
IDAHO POTYER COITIPANY
AVOIDED COST RATES FOR HYDRO PROJECTS
December 1t,2012
llM\'\/}l
Eligibility for these rates is limlted to wind and aolar proiects 100 kW or smaller, and to non-wind and non-
solar projects smaller than 10 aMW.
CONTRACT
LENGTH
ON.LINE YEAR
CONTRACT NON.LEVELIZEO
1
2
3
4
5
6
7
I
9
10
11
12
13
14
15
16
17
18
19
20
23.31
23.18
21.52
27.42
29.33
31.84
33.79
35.42
36.77
38.08
39.37
40.59
41.70
42.72
43.68
44.62
45.50
46.33
47.13
47.89
23.03
25.1 9
29.O2
31.16
33.99
36.07
37.75
39.1 2
40.46
41.78
43.03
44.17
45.20
46.1 I
47.13
48.04
48.88
49.70
50.49
51.25
27.53
32.39
u.32
37.31
39.35
40,98
42.23
43.51
44.80
46.03
47.15
48.17
49.14
50.09
50.99
51.84
52.66
53.45
54.22
54,97
37.64
38.14
41.12
42.93
44.U
45.43
116.60
47.83
49.O2
50.10
51.09
52.03
52.97
53.86
54.71
5s.53
s6.33
57.1 1
57.86
58.63
38.68
43.07
45.00
6.37
47.39
48.55
49.80
51.01
52.11
53.1 1
54.06
s5.02
55.94
56.80
57.64
58.47
59.27
50.05
60.84
61.65
47.83
48.55
49.36
50.03
51.03
52.22
53.30
54.47
55.44
56.37
57.33
58.25
59.12
59.97
60.80
61.62
62.42
63.24
u.o7
64.86
2012
201 3
2014
2015
2016
2017
201 8
2019
?020
202'l
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2031
2035
2036
2037
23.31
23.03
27.53
37.64
38.68
47.83
49.33
51. I9
52.41
55.91
59.77
62.78
64.87
66.68
69.1 3
72.44
74.97
77.15
79.9E
82.95
86.00
E6.98
93.59
9E.43
1m.78
1U.72
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25118 Page 57 of 69
Not6: Tho rales sho,,r,n in this table havo b6en computed using tho U.S. Energy lnbrmation Administration (ElA)'s Annual Ensrgy
Outlook20l2releEsedJun€25,2012. See"AnnualEnorgyOutlook20l2,AllTsblos,EnergyPricesbySec{orandSource,Mountain,
Reterenc€ casd' at http:fiwww.eia.gov/oiat/a6oitablebrowsor/.
I
I
]DAHO POWER COMPANY
AVOIOED COST RATES FOR CANAL DROP HYDRO PROJEGTS
December 13,2012
UMVUh
Eliglbility for these rateE ls llmlted to urlnd and colar protecta t00 kW or smaller, and to non-wlnd and non-
solar projects emaller than 10 aMW.
CONTRACT
LENGTH
ON.LINE YEAR
CONTRACT
YEAR
NON.LEVELIZED
RATES
I
2
4
5
6
7II
10
11
12
13
14
15
16
17
18
19
20
23.31
23.18
24.52
35.3E
42.14
47.93
52.28
55.73
58.54
61.05
63.34
45.42
a7.28
68.95
70.49
71.94
73.25
74.35
75.74
76.87
23.03
25.1 9
40.08
47.85
54.13
5E.58
62.00
64.72
67.1 3
69.35
71.37
73.1 6
74.78
76.27
77.6A
79_01
80.24
81.40
82.51
83.57
27.33
49.66
57.51
63.56
67.52
70.48
12.77
74.86
76.83
78.63
80.2s
81.71
83.07
84.38
85.62
e6.77
87.88
88.94
89.90
90.94
73.60
74.!6
77.54
79.U
81.28
82.O1
84.01
85.,15
86.87
88.17
89.36
90.51
91.65
92.74
93.77
94.78
95.75
96.71
97.63
98.56
75.17
79.82
8t.99
83.61
84.88
6.27
87.75
89.19
90.52
91.73
92.90
94.06
95.1 I
96.24
s7.28
96.28
99.27
100.22
101.19
102.16
84.85
85"83
86.90
87.82
89.07
90.49
91.90
93.21
94.40
95.56
96.73
97.86
98.94
99.99
10 t.02
102.O2
103.00
104.00
't05.01
105.96
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2031
2035
2036
2037
23.31
23.03
27.53
73.60
75.11
84.85
86.89
89.30
91.08
95.1 4
99.57
r03.17
105.85
108.26
111.32
1 15.25
116.40
121.22
124.69
124.32
132.03
135.68
140.99
146.52
149.58
154.23
Case 1:1-8-cv-00236-REB Document 4-14 Filed 06/25118 Page 58 of 69
Note: A "csnal drop hydro projec{' is defined as a generation facility which produces lhe majqity of ils generation during lhe inigation
season and is located on a man-made watorway that conveys wat6r primarily intended for inigation or lhat primarily conroys irrigation
return llows.
Note: The rates shown in this table have be€n computed using lh6 U.S. Energy lnfumatbn Adminbtration (EliA)'s Annual En€rgy
Outlook 201 2 reloased June 25, 201 2. See "Annual Energy Oullook 201 2, All Tabl6s, Energy Prices by Sec{or and Source, Mountain,
Reference case" at http:/Aiwnr.eia.gov/oiaflaec/tablebrorvser/.
i
I
l
IDAHO POWER COMPANY
AVOIDEO COST RATES FOR OTHER PROJECTS
December 13,2012
$IMYltr
Eligibility for these rates ls limited to wlnd and solar proJects 100 kW or smallor, and to non-wind and non-
solar projects smaller than 10 aMW.
CONTRACT
LENGTH
TYEARS)
ON.LINE YEAR
CONTRACT
YEAR
NON.LEVELIZED
RATES20122013201420152012017
1
2
J
4
5
6
7
8
9
10
11
12
13
14
15
I6
17
18
19
20
26.49
26.38
26.98
32.43
35.89
38.99
41.37
43,34
r14.96
46.50
47.99
49.38
50,64
51.80
52.88
53.92
54 91
5s.E3
56.71
57.56
26.26
27.26
u.74
38.75
42.14
u.61
46.59
48,20
49.73
51.22
52.61
53.88
55.03
56.1 I
57.1 6
58.1 5
59.09
59.98
60.84
61.67
28.33
39.50
43.60
46.95
49.23
51.02
52.44
53.84
55,24
56.57
s7.7E
58.88
59.93
60.95
61.92
62.84
63.72
64.58
65.40
66.20
51.58
52.1 I
54.20
55.56
56.72
57.68
58.77
59.96
61.13
62.21
63.20
64.1 6
65.12
66.04
66.91
67.76
68.50
69.41
70.20
71.00
52.85
55.67
67.11
58.2E
59.22
60.33
61 58
62.80
63.92
64.95
65.93
66.98
67.89
68.79
69.68
70.54
71.39
72 21
73.04
73.89
58.72
59.51
60.40
61.1s
62.22
63.47
64.72
65.86
66.90
67.90
68.92
69.90
70.83
71.74
72.63
73.50
74.fi
75.23
76.1 I
76.95
2012
2013
2014
2015
2016
2017
20'tE
201 9
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
26.49
26.26
28.33
51.58
52.85
58.72
60.38
62.40
63.78
67.45
71.4E
74.6
76.92
78.91
81.54
65.03
87.75
90.12
93.13
96.29
99.54
102.71
107.53
112.57
1 15.13
'119.28
Case 1:1-8-cv-00236-REB Document 4-14 Filed 06/2511-8 Page 59 of 69
Note: 'Other proie{ts" refers to projocts oth€r thsn wind, solar, hydro, and canal drop hydm projocts. Those "Other proi€cts" may
include (but are not limited to): cogeneration, biomass, bbgas, lsndfill gas, or g€oth€rmal pnfects.
Note: Tho ratgs shown in this table have becn comput€d using the U.S. Energy lnformation Adminblration (El,A)'s Annual Ensrgy
Outlook 2012 relEased June 25, 2012. See 'Annual En€rgy Outtook 2O12, Atl Tabl$, Energy Prbas by S€ctor atd Sourcs, Mountain,
Reference case' at http:/ww!y.eia.gov/oiaf/aoo/tablskowssr/.
AVISTA
AVOIDED COST RATES FORWND PROJECTS
December 13, 2012
$/i,tVlh
Eligibility for these rates is llmfted to wlnd and sol.r prorects 100 kW or smalter, and to non-wind and non-
solar prolects 3maller than l0 aMW.
CONTRACT
LENGTH
ON.LINE YEAR
CONTRACT NON.LEVELIZED
1
2
3
4
5
6
7
o
9
10
'11
12
13
14
15
16
17
18
19
20
21.31
21.'t5
21.O1
21.57
22.U
22.47
22.90
23.35
24.96
26.29
27.66
28.93
30.08
31.12
32.08
33.02
33.89
u.71
35.48
36.22
20.98
20.85
21.67
22.26
22.77
23.25
23.75
25.49
27.10
28.63
30.03
31.28
32.40
33.43
u.43
35.36
36.23
37.05
37.84
38.59
20.71
22.06
22.77
23.31
23.E3
24.36
26.38
28.19
29.88
31 .41
32.76
33.96
35.06
36.1 1
37.1 0
38.01
38.88
39.70
40.50
11.25
23.53
23.93
24.34
24.78
25.29
27.63
29.66
31.51
33.16
34.60
35.86
37.0?
38.'t2
39.1 5
40.1 0
41.00
41.86
42.69
43.48
44.26
24.36
24.75
23.27
25.82
28.87
31.00
33.07
34.87
36.41
37.74
38.96
40.12
41 .19
42.18
43.1 1
44.01
44.87
45.69
45.51
47.32
23.25
25.78
m.40
29.S8
32.69
34.98
36.93
38.55
39.94
41.'t9
42.38
43.49
44.54
45.&
46.38
47.26
48.1 |
48.*i
49.81
50.61
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
20m
2027
2028
2029
2030
2031
2032
2033
203/
203s
2036
2037
?1.31
20.96
20.71
23.53
24.%.
25.25
26.35
27.79
42.69
46.04
49.76
52.62
54.55
56.22
58.52
61.68
64.05
66.07
6E.74
71.54
74.42
77.23
81.68
86.34
88.51
92.27
Case 1:1-8-cv-00236-REB Document 4-14 Filed 06/25118 Page 60 of 69
Not€: The rates shown in this tabls have been computed using the U.S. Energy lnformation Administration (ElA)'s Annual Energy
OutJook2012rpleasedJuno25,2012. See"AnnualEnergyOutlook20l2,AllTables,EnergyPricesbySeclorandSource,Mountain,
Ratorenca cas6" at http:/ /vww.eia. gov/oiaf/aeo/tablebrors€r/.
ATTACHMENT B
oRDER NO. 32697
CASE NO. GNR.E.IT.O3
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25118 Page 61 of 69
Note: The rates shown in this table have been computed using th€ U.S. Energy lnformation Administration (ElA)'s Annual Energy
Outlook2012releas€dJune25,2012. See"AnnualEnergyOutlook2012,AllTable6,EnergyPricesbySeclorandSourc€,Mountain,
Reference case" at http://www.eia.gov/oial/aoor'bblrbrows€r/.
AVISTA
AVOIDED COST RATES FOR SOLAR PROJECTS
December 13,2012
E/MWtr
Eliglblllty for these rates ls limlted to wlnd and aolar prolects 100 kW or smaller, and to non-wind and non-
solar projects smaller than l0 aMW.
ON.LINE YEAR
LENGTH CONTRACT
YEAR
NON.LEVELIZED
1
2
t
4
5
6
7
8I
't0
11
12
13
14
l5
16
'17
18
19
20
17.49
17.29
17.12
17.64
1 8.08
18.47
I 8.87
19.29
23.40
26.92
30.00
31.23
33.36
34.30
35.22
36.08
36.68
37.64
38.37
17.08
16.91
17.70
18.25
18.72
19.17
19.64
24.4s
28.46
31.91
33.21
34.38
35.43
36.41
37.36
38.25
39.08
39.87
40.63
41.36
16.73
18.05
1A.72
19.23
't9.70
20.20
25.S0
30.48u.u
35.67
36.87
37.93
38. S3
3S.90
40.E1
41.65
42.46
43.24
43.99
44.71
19.48
19.84
20.20
20.61
21.08
27.91
33.1 7
37.47
38.78
39.94
40.98
41.96
42.92
43.82
44.66
45.47
46.26
47.01
47.74
48.48
20.23
20.61
21.05
21.57
30.05
36.19
40.99
12.21
43.29
44.27
45.1 I
16.12
46.99
17.82
48.61
49.39
50.14
50.87
51.62
32.37
21.U
21.52
22.10
33.06
40.21
45.56
46.51
47.39
4A.21
49.01
49.64
50.65
5'1.41
52.17
52.91
53.64
54.36
55.10
55.E5
56.5€
2012
m13
2014
201 5
2016
?o17
201 8
2019
2020
2021
2422
2423
2024
2025
?026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
17.49
17.08
16.73
19.48
20.23
21.U
22.O5
23.40
71.88
75.67
79.81
54.14
56.1 1
57.79
60.1 1
63.29
65.69
67.73
70.42
73.25
76.1 6
78.99
83.46
88.1 5
90.35
94.13
AVISTA
AVOIDED COST RATES FOR HYDRO PROJECTS
December 13,2012
UM\ATI
Eligibility for these rates is limlted to wlnd and solar projects 100 kW or gmaller, and to non-wlnd and non-
solar prolecb smaller than 10 aMW.
ON.LINE YEAR
LENGTH CONTRACT
YEAR
NON-LEVELIZED
2015
1
2
t
4
E
6
7I
o
10
11
12
13
14
15
16
'17
18
19
20
22.76
22.62
22.49
23.06
23.55
23.99
24.43
24.50
27.06
29.01
30.82
33.1 5
35.21
37.O2
38.66
40.19
41.59
42.87
44.06
45.1 E
22.46
22.34
23.18
23.75
24.30
24.80
25.31
27-83
30,04
32.05
34.65
36.90
38.88
40.65
42.29
43.79
45.1 5
16.42
47.61
16.72
22.22
23.59
24.31
24.87
25.39
25.94
28.88
31.38
33.62
36.51
38.98
41.12
43.02
44.77
45.36
47.81
49.1 5
50.39
51.56
52.66
25.08
25.49
25.91
26.37
26.89
30.34
33.18
35.64
38.85
41.U
43.M
45.86
47.71
49.39
50.90
52.30
53.60
54.82
55.96
57.06
25.93
26.38
26.87
27.44
31.68
34.96
37.71
41.30
44.24
46.70
48.86
50.80
52.56
54.'13
55.58
56.93
58.20
59.38
60.53
61.65
26.86
27.40
28.03
33.41
37.2s
40.30
44.30
47.49
50.1 1
52.36
54.38
56.1 9
57.81
59.30
60.68
61.97
63.1 I
64.36
65.51
6€.58
2012
2013
2014
2015
2016
2017
2018
201 I
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
20s4
2035
2036
2037
22.76
22.46
22.22
25.08
25.93
26.86
27.99
29.46
52.58
56.08
59.94
76.60
78.89
80.91
83.57
87.09
89.83
92.23
95.28
98.47
10'1.75
1(N.96
109.81
1 t4.88
'117.46
121.66
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25i18 Page 62 of 69
Note: The rates shown in this tablo hav€ b€€n compuled using the U.S. Energy lnformation Administration (ElA)'s Annual Enargy
Outlook2O12releasodJune25,20l2. See"AnnualEnergyOutlook20l2,AllTablee,EnergyPric€sbySectorandSource,Mountain,
Reference case" at hftp:/ rv\r',w.eia.govloiaf/a6o/tablsbrcn ser/.
AVISTA
AVOIDED COST RATES FOR CANAL DROP HYDRO PROJECTS
December 13, 2012
srrwn
Eligibility for these rates ls limited to wlnd and solar projocts 100 kW or smaller, and to non-wind and non-
solar proJects smaller than 10 aMW.
ON.LINE YEAR
LENGTH CONTRACT NON.LEVELIZED
20 2017
I)
3
4
5
6
7I
o
10
11
12
13
14
15
16
17
't8
19
20
22.76
22.62
22.49
23.06
23.55
23.99
24.43
24.90
30.13
34.55
38.38
38.34
39.49
40.o2
40.55
41.11
41.65
42.18
42.70
43.22
22.46u.u
23.18
2i.79
24.30
24.O0
25.31
31.44
36.48
40.77
41.27
41.77
42.27
42.7E
43.32
43.86
44.39
44.91
45.43
45.95
22.22
23.59
24.31
24.87
25.39
25.94
33.1 I
38.97
43.77
14.14
44.55
11.97
45.43
45.93
46.45
46.95
47.46
47.98
48.49
49.01
25.08
25.49
25.91
26.37
26.89
35.81
42.25
47.59
47.73
47.96
48,25
48.59
49.02
49.4E
49.94
fi.41
50.90
51.40
5 t.91
52.44
25.93
26.38
26.87
27.44
38.29
46.02
52.00
51.75
51 .71
51.79
51.96
52.29
52.66
53.05
53.47
53.93
54.40
54.88
55.40
55.96
26.86
27.40
28.03
42.0A
51.13
57.74
56 81
56.29
56.02
55.96
56.08
56.31
56.59
56.92
57.31
57.73
58.1 7
58.67
59.21
59.73
2412
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
22.76
22.46
22.22
25.08
25.93
26.86
27.99
29.46
91.77
95.84
100.28
49.31
51.2',1
52.82
55.07
58.1 7
60.50
62.46
65.07
57.83
70.65
73.41
77.80
E2.40
84.52
88.22
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25/L8 Page 63 of 69
Note: A "canal drop hydro pnjectr is defned as a genorslbn tacility wtrich produoes the majority of its generation during the inigation
season and is located on a man+nade waterway that conveys wetor primerily intsnded for inilstim or that primarily conveys inigation
retum llows.
Note: The rates shown in this tablo havs been cofiiputed using lhe U.S. Energy lnbrmauon Administration (ElA)'s Annual Energy
Outlook 20'12 released June 25, 2012. See 'Annual Eneryy Outlook 2012, A,l Tables, Energy Prices by S€clor and Source, Mountain,
Refurence case" at http:l/www.eia.gov/oiaf/aeo^ablebroileor/.
AVISTA
AVOIDEO COST RATES FOR OTHER PROJECTS
December 13,2412
$lMtMr
Eligibility for theso rates ir llmlted to wlnd and rotar proJectE t00 kW or smaller, and to non-wind and non-
solar proJects emaller than l0 alllW.
ON.LINE YEAR
LENGTH CONTRACT NON.LEVELIZED
201?
1
2
3
4
5
6
7I
9
10
1t
12
13
14
15
16
17
18
19
20
26.39
26.28
26.1 9
26.79
27.31
27.79
28.26
28.75
31.52
33.96
36.1 7
38.1 5
39.90
41.46
42.89
44,23
45.46
46.60
47.67
48.68
26.1 6
26.08
26.95
27.59
28.14
28.67
29.22
32.43
35.20
37.66
39,84
41.75
43.43
44.96
46.38
47.70
48.90
50.03
51.09
52.10
25.99
27.40
28.15
28.75
29.31
29.89
33.66
36.80
39.54
41_93
43.99
45,79
47.41
48.91
50.30
51.56
52.74
53.86
54.S1
55.90
28.92
29.37
29.83
30.32
30.88
35.35
38.92
41.95
,14.54
16.74
48.63
50.33
51.90
53.34
54.65
55.87
57.02
58.1 1
59.1 3
60.14
29.86
30.34
30,87
3't.48
36.98
41.12
44.50
47.31
49.65
51.64
53.41
55.04
56.52
57.87
59.1 3
60.31
61.43
62.48
63.52
64.53
30.88
t1.44
32.11
39.15
43.98
47.72
50.73
53,'t7
55.21
57.01
58.66
60.16
61.52
62.79
63.99
65.1 2
66.1 I
67.25
68.29
69.26
2012
2013
2014
2015
2016
2017
2018
2019
2020
2421
2022
2023
2024
2025
2026
m27
2028
2029
2030
2031
2A32
2033
203/
2035
20fi
2037
m.39
26.'t6
25.99
28.92
29.E6
30.06
32.0'l
33.62
64.1 1
67.78
71.81
74.99
77.26
79.25
81.89
85.39
88.1 1
90.48
93.50
96.67
s9.92
't 03.10
107.92
112.97
1 15.54
119.69
Case 1:18-cv-00236-REB Document 4-14 Filed 06/2511-8 Page 64 of 69
Note: "Oth€r projects' rafers to projocts oltl€r than wind, solar, hydro, and canal drop hydro projec{s. fhese 'Other proiocts' may
include (bul ar€ not limited to): clgeneration, bbmass, bio0as, landfill gas, or geothermal prolrcts.
Note: The rates shown in this table hav6 b€6fl computed using tha U.S. Energy lnformation Administration (ElA)'s Annual Energy
Outlook 2012 releas€d Jun6 25, 2012. 56€ ?nnual Energy Oullook 2012, A,l Tables, Energy Prices by S€ctor and Source, Mountain,
Reference case" at http:/ ,r r
^r.eia.gov/oiaf/aocltablebrorvsor/.
Case 1:18-cv-00236-REB Document 4-14 Filed 06/2511-8 Page 65 of 69
Note: The rates shown in this table have boen computGd using tho U.S. Energry lnformation Administration (ElA)'s Annual Energy
Outlook 20'12 r8leased June 25,2012. See "Annual Energy Outook 2012, All Tables, Enorgy Prices by Sector and Sourca, Mountain,
Reforonca case" at http://w\M^,.eia. gov/oiat/aeo/tablebrowser,/.
ATTACHMENT C
ORIIER NO.32697
CASE NO. GNR-E-1I.03
PAC!FICORP
AVOIDED COSTRATES FORWND PROJECTS
Elecember 11,2012
$/M!t'tt
Eliglbility for these rates ls limlted to wind and solar projects 100 kW or smaller, and to non-wind and non-
solar projects smaller than l0 aMW.
CONTFJ.CT
LENGTH
ON-LINE YEAR
CONTRACT NON.LEVELIZED
RATES
1
2
4
5
6
7
I
I
10
11
12
13
14
15
16
17
18
19
20
18.62
18.45
19. 15
20.12
20.83
21.43
23.48
25.18
26.57
27.91
29.22
30.45
31.56
32.58
33.53
34.46
35.33
36.1 5
36.94
37.69
18.25
19.45
20.70
21.50
22.13
24.54
26.44
27.96
?9.40
30.80
32.1 0
33.28
34.34
35.34
36.31
37.22
38.07
38.89
39.67
40.43
20.74
22.07
22.76
23.30
26.11
28.21
29.82
31.33
32.60
34.16
35.38
36.48
37.50
38.49
39.43
40.31
41.15
41.96
42.74
43.49
23,51
23.89
24.29
27.73
30.08
31.78
33.37
34.90
36.31
37.56
38.68
39.72
44.74
41.70
212.59
43.45
44.28
45.08
45.86
46.54
24.31
24.73
29.36
32.06
33.85
35.50
37.09
38.54
39.81
40.94
41.99
43.02
43.99
44.90
45.78
48,62
47.44
48.24
49.04
49.86
25.18
32.20
35.06
36.73
38.30
39.85
4'.t.27
42.51
43.60
44.62
45.64
46.60
47.50
48.38
49.23
50.05
50.86
5.t.68
52.51
53.30
2012
2013
2014
2015
20't6
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
20u
2435
2036
2037
18.62
18.25
20.74
23.51
24.31
25.18
39.78
4',t.49
4?.58
45.93
49.64
52.51
54.45
56.1 0
5E.40
61.56
63.93
65.95
68.61
71.41
74.29
77.10
81.54
86.20
88.38
92.13
PACIFICORP
AVOIDED COST RATES FOR SOI-AR PRO.'ECTS
December 13,2012
$/MYl'tt
Ellgibility for these rates is limlted to wlnd and solar prolects 100 kW or rmaller, and to non-wind and non-
solar projects smaller than {0 aMtU.
CONTRACT
LENGTH
ON.LINE YEAR
CONTRACT NON.LEVELIZED
1
2
3
4
E
6
8
9
10
11
'12
13
'14
15
16
17
18
't9
20
13.85
13.62
22.25
27.22
30.38
32.63
36.51
39.59
42.09
44.33
46.39
48.27
49.95
51.46
52.85
54.17
55.40
56.54
s7.62
58.65
't3.38
26.96
32.41
35.37
37.34
41.40
44.53
47.00
49.20
51.24
53.09
54.74
56.21
57.57
58.87
60.09
61.21
62.28
63.30
64.28
4'1.62
43.08
43.90
44.56
48.42
51.26
53.45
55.43
57.30
59.00
60.52
61.89
63.1 6
64.38
65.54
66.61
67.U
68.62
69.57
70.48
44.66
45.1 I
45.71
50.47
53.68
56.01
58.ff)
60.02
61.78
53.34
64.73
56.02
67.26
68.43
69.53
70.57
71.58
72.55
73.48
74.42
45.74
46.30
52.73
56.40
58.85
60.99
62.97
64.76
66.33
67.71
69.00
70.26
71.44
72.54
73.60
74.62
75.60
76.56
77.51
78.47
46.90
56.64
60.53
62.81
64.81
66.70
68.41
69.90
71.23
72.47
73 69
74.U
75.93
76.97
77.99
78.97
79.93
80.90
81.87
82.79
2012
2013
2014
2015
2016
2017
201 I
2019
2020
2021
2022
2023
2024
2025
7025
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
13.85
13.38
41.62
44.66
45.74
46.90
67.1 6
69.28
70.77
74.54
78.67
81.95
81.32
85.42
89.16
92.77
95.60
98.08
101.21
104.49
107.86
1 1 1.16
1 16.10
121.2"1
'123.96
128.23
Case 1:l-8-cv-00236-REB Document 4-l-4 Filed 06/25118 Page 66 of 69
Note: The rates shown in this table have b€€n compuled using lhe U.S. Energy lnformation Administrstion (ElA)'s Annual Energy
Outlook20l2rel€as€dJune25,2012. Se€'AnnualEnorgyOutlook20l2,AllTables,EnergyPricaabySeclorandSource,Mountain,
Reference case" at http:/lwww.eia. gov/oisf/aeo/tablebrorvsarl.
PACIFICORP
AVOIDED COST RATES FOR HYDRO PROJECTS
December 13,2012
vMvvr
Eligibllity for these rates Is limited to wlnd and solar prcJects 100 kW or gmaller, and to non-wlnd and non-
solar proJects smaller tfian 10 aMYV.
CONTRACT
LENGTH
ON.LINE YEAR
CONTRACT NON.LEVELIZED
2012 2013
1)
4
5
b
7
8
o
10
11
12
13
14
15
16
17
18
19
20
20.u
20.28
23.70
26,06
27.63
28.82
3r.09
32.95
34.49
35.95
37.37
38.69
39.90
40.99
42.02
43.O1
43.95
/t4.83
45.68
46.48
20.1 0
25.53
28.24
29.80
30.92
33.39
35.36
36.93
38.43
39.89
41.25
42.48
43.5S
44.83
45.65
46.61
47.50
48.36
49.19
49.99
3'1.39
32.80
33.57
34.1 I
36.72
38.65
40.1 6
41.62
43.05
44.39
45.61
46.70
47.73
48.74
49.70
50.60
51.46
52.29
53.'10
53.88
u.32
34.79
35.26
38.32
40"47
42.06
43.5E
45.08
46.47
47.72
48.85
49.90
50.94
51.92
52.84
53.72
54.58
55.41
fi.22
57.03
35.29
35.79
39.88
42.33
44.00
45.58
47.14
48.59
49.87
51.01
52,08
53. t4
54. t4
55.08
55.99
56.87
57.72
58.55
59.39
60.23
36.33
42.45
45.06
46.63
48.16
49.71
51.14
52.40
53.52
54.58
55.64
56.64
57.58
58.49
59.38
60.25
61.09
01.95
62.03
63.65
2012
2013
2014
201 s
2016
2017
2018
201 9
2020
2021
2022
2023
2024
2025
2026
2027
2028
202s
2030
2031
2032
2033
203r'.
2035
2038
2037
20.44
20.10
31.39
u.32
35.29
36.33
49.06
50.91
52.1 3
55.63
59.48
62.49
64.57
66.38
68.83
72.13
74.66
76.84
79.66
82.62
85.67
88.64
93.25
98.08
100.44
104.36
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25ll-8 Page 67 of 69
Note: The rates shown in this table hEve b€en comput€d using lh6 U.S. Enorgy lntormation Administralion (ElA)'s Annual Energy
Outlook2012releasedJune25,2012. Se€"AnnualEnergyOuumk20l2,AllTables,EnergyPdcssbyS€ctorandSource,Mountain,
Reference case" at http:/A^,ww.oia.gov/oiat/aeo/tabl€broia€r/.
PACIFICORP
AVOIDED COST RATES FOR CANAL DROP HYDRO PROJECTS
December 13,2012
8nnv$
Eligibility for thess ratoc Is limlted to wlnd and colar prcjects 100 kW or smaller, and to non-wind and non-
solar projects smaller than 10 aMW.
ON-LINE YEAR
LENGTH CONTRACT
YEAR
NON.LEVELIZED
2014 2015 2016
1
2
3
4
5
o
7
8
I
10
11
12
13
14
15
16
17
18
19
20
20.44
20.28
34.39
42.18
47.09
50.57
54.52
57.69
60.27
62.61
64.76
66.72
68.49
70.09
71.56
72.97
74.28
75.50
76.66
77.76
20."t0
42.20
50.62
55.14
58.1 1
61.89
64.84
67.20
69.35
71.36
73.20
74.86
76.36
n.76
79.09
80.35
81.53
82.65
83.72
u.75
66.07
67.72
68.73
69,58
72.34
74.51
76 24
77.91
79.56
81. 11
82.52
83.82
85.04
E6.24
87.38
88.46
89.50
90.50
91.47
92.41
69.50
70.22
70.94
74.24
76.82
78.44
80.1 I
8't.90
83.51
84.97
86.30
87.56
88.79
89.96
91.07
92.14
93.1 7
94.1 I
95.1 5
96.1 2
70.99
71.74
76.O7
78,77
80.68
82.49
u.28
85,95
87.45
88.80
90.09
9 t.35
92.55
93.68
94.78
95.85
98,88
97.88
98.89
99.90
72.55
7A.92
81.78
83.60
85-37
87.15
E8.82
90-31
91.65
92.93
94.20
95.41
96.55
97.66
98.75
99.80
100.83
101.86
102.91
103.90
2012
201 3
2014
2015
2016
2017
2014
201 9
2020
2,21
m22
2023
2024
2f25
m26
2f.27
2028
2029
2030
2031
2032
2033
203/.
2035
2036
2037
20.44
20.10
66.07
69_50
70.99
72.55
85.81
88.20
89.96
94.01
98.43
102.00
104.67
107.05
'l 10.1 1
114.O2
1 17.16
119.96
123.41
127.02
130.71
134.35
139.63
145.14
148. r I
152.81
Case 1:18-cv-00236-REB Document 4-14 Filed 06/25118 Page 68 of 69
Note: A "canal drop hydro proloct" is dellned 8s e genemtion facility which producs3 th6 majority of i13 generation during the irrigation
s€ason and is locsted on a man-made waterway that convsys watar primarily intended for irigation or thal primarily conv€ys irrigation
return flc fls.
Note: The rates shown in this table hav€ been computed using the U.S. Energy lnbrmation Administration (ElA)'s Annual Energy
Outlook 2012 released Juno 25, 2012. See "Annual Energy Outlmk 2012, All Tables, Energy Prices by Soclor and Sourca, Mountain,
Reference case' at htp:/wuirr.eia.gov/oiaf/aeo/tablebrowser/.
Case 1:18-cv-00236-REB Document 4-14 Filed 06/2511-8 Page 69 of 69
Note: "Other proj€cts" refors lo prc{€cts other than wind, sdar, hydro, and canal drop hydro proj€ds. Thes6 "Other projects" may
include (but are not limited to): cogeneration, biomass, biogas, landfill gas, orgeothermal proi€cts.
Note: The rates shown in this table have bo6n computod using the U.S. Energy lnbrmation Administration (ElA)'s Annual Energy
Outfook 2012 rsleased June 25, n12. See 'Annual Energy Outlook 2012, All Tables, Energy Prices by Seclor and Source, Mountain,
Referenca cese" at htlp://www.oia.gov/oie{/aoo/lablebrowser/.
PACIFICORP
AVOIDED COST RATES FOR OTHER PROJECTS
December 13,201.2
UMVlh
Eliglbillty for these rates ls limited to wind and solar projects 100 klY or smaller, and to non-wind and non-
solar prolects smaller than l0 aMlT.
ON.LINE YFAR
LENGTH CONTRACT NON-LEVELIZED
1
2
3
4
5
6
7
8
9
10
'11
12
13
14
15
16
17
18
19
20
24.97
24.05
31.46
35.46
38.06
39.96
42.19
44.04
45.58
47.0A
48.49
49.85
51.08
52.21
53.27
54.30
s5,27
56.1 I
57.07
57,92
24.73
35.1 0
39.53
42.01
43.71
45.91
47.71
49.17
50.59
52.00
53.33
54.54
55.65
56.70
57.72
58.69
59.61
60.49
81.34
62.1 I
46.31
47.83
48.71
49.44
51.22
52.67
53.86
55.09
56.36
57.58
58.71
59.75
60.74
61.72
62.66
63.54
64.40
65.24
66.06
66.84
49.48
50.06
50.66
52.70
54.27
55.49
fi.77
58.1 I
59.39
60.56
61.63
62.65
63.67
64.64
65.56
66.45
67.31
68.1 6
68.9E
69.81
50.70
51.32
53.95
55.7'l
57.00
58.35
59.76
61.'11
62.33
63.44
64.49
65.55
66.55
67.50
68.43
69.33
70.21
71.06
71.92
72.80
51.99
55.78
57.66
58.90
60.27
61.72
63.1 1
44.36
65.48
66.55
67.63
68.66
69.63
70.5E
71.50
72.11
73.29
74.19
75.1 0
75.96
2012
2013
2014
201 5
2016
2017
201 8
201 9
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
24.97
24.73
45,31
49.48
50.70
51.99
59.86
61.88
63.26
66.92
70.94
74.11
76.37
78.34
80.97
84.45
87.1 6
89.52
92.53
95,68
98.92
102.08
106.89
111.92
114.48
118.61