20030425Answer to US Geothermal by Idaho Power.pdf

BARTON L. KLINE ISB #1526
Idaho Power Company
O. Box 70
Boise , Idaho 83707
Phone: [phone]
FAX: [phone]
'VED . "- u
2003 APR 24 PM L,: 52
i i. i ,i ; ,; ;:: l; r!; ! UliLlTiES . CO~1r1YSSION
Attorneys for Idaho Power Company
Express Mail Address
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION
OF THE INDEPENDENT ENERGY
PRODUCERS OF IDAHO FOR AN
ORDER INCREASING THE SIZE AT
WHICH A OF IS ENTITLED TO
PUBLISHED AVOIDED COST RATES.
CASE NO. GNR-03-
ANSWER TO PETITION FOR
RECONSIDERATION OF
S. GEOTHERMAL INC.
Idaho Power Company, hereinafter referred to as "Idaho Power" or "the
Company" herein , pursuant to RP 331.05 and Idaho Code ~ 61-626, hereby answers the
petition for reconsideration filed by U.S. Geothermal Inc. ("USG"
As provided in RP 331., an Answer to a petition for reconsideration is
used to express disagreement with the petition for reconsideration without asking for
affirmative relief from the Commission s orders. Idaho Power s disagreement with USG'
petition arises out of USG's failure to present all of the facts relating to the negotiations
between Idaho Power and USG.
ANSWER TO PETITION FOR RECONSIDERATION OF U.S. GEOTHERMAL INC., Page
BACKGROUND
From the beginning of its implementation of PURPA in the state of Idaho
the Idaho Commission has drawn a distinction between small and large OF projects. The
Commission has established posted rates for small OF projects on the assumption that
the developers of smaller OF projects may not have the economic resources to negotiate
a project-specific power purchase contract with the utility. The Commission has stated
that the posted rates would be the starting point for negotiations with large OFs but the
individual characteristics of large OF projects necessitate negotiated contracts to address
reasonable variations in the rates , terms and conditions available to large OFs.
USG HAS NOT DISCUSSED A LARGE OF
PROJECT WITH IDAHO POWER
USG has contacted Idaho Power about developing a small OF project that
would be entitled to the posted rates. USG has not asked to negotiate a contract for a
large OF project with Idaho Power. Idaho Power does not know what other discussions
USG may have had with other electric utilities in Idaho.
In reading USG's petition there seems to be some confusion on USG's part
that the Commission s order precludes OF projects larger than 10 MW. In its
letter/petition USG states: "In short, we believe a larger OF size could increase the
development of new energy sources in the state of Idaho." Of course Order No. 29216
made it clear that large OF projects are not precluded but contracts for large OF projects
must be individually negotiated.
USG's petition goes on to state: "The Commission s aggressive changes to
its PURPA rules made last year were a step in the right direction, but it is clear that they
have not stimulated the desired effect"
ANSWER TO PETITION FOR RECONSIDERATION OF U.S. GEOTHERMAL INC., Page 2
Idaho Power believes it is disingenuous for USG to contend that the
Commission s prior order changing the dividing line between small and large OF projects
to 10 MW has not been successful when USG has not requested that Idaho Power
negotiate a contract for a large OF project It is unreasonable for USG to claim that the
Commission s long-standing policy of requiring large OF projects to negotiate project-
specific contracts is a failure when USG has made no effort to comply with the policy.
Negotiations between utilities and OFs may not ultimately lead to contracts. But that does
not necessarily indicate a failure of the policy of required negotiations. A OF developer
that claims to have the management capability and creditworthiness to raise the millions
of dollars of capital needed to build a generating facility larger than 10 MW is certainly
capable of negotiating on an equal basis with an electric utility. This is particularly true
where the electric utility is required by Commission order to negotiate in good faith based
on prices that are equal to the utility's avoided cost as determined by the Commission.
Respectfully submitted this 24th day of April, 2003.
BAR ON L. KLINE
Attorney for Idaho Power Company
ANSWER TO PETITION FOR RECONSIDERATION OF U.S. GEOTHERMAL INC., Page 3
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 24th day of April , 2003, I mailed a true
and correct copy of the above and foregoing ANSWER TO PETITION FOR
RECONSIDERATION OF U.S. GEOTHERMAL INC. to the following at the addresses
listed below:
Scott Woodbury, Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, Idaho 83720-0074
Peter J. Richardson
Richardson & O'Leary PLLC
O. Box 1849
Eagle, Idaho 83716
Doug Glaspey, CEO
S. Geothermal Inc.
1509 Tyrell Lane, Suite B
Boise, Idaho 83706
Steve Munson, CEO
Vulcan Power Company
1183 NW Wall Street , Suite G
Bend , Oregon 97701
~t;
BARTON L. KLINE
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CERTIFICATE OF MAILING