20110328reconsideration_order_no_32212.pdf

Office ofthe Secreta
Service Date
March 28, 2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT )
PETITION OF IDAHO POWER COMPANY, ) CASE NO. GNR-E-I0-04
AVISTA CORPORATION, AND )
PACIFICORP DBA ROCKY MOUNTAIN )
POWER TO ADDRESS AVOIDED COST ) ORDER NO. 32212
ISSUES AND TO ADJUST THE PUBLISHED )
AVOIDED COST RATE ELIGIBILITY CAP. )
)
On Februar 7, 2011, the Commission issued final Order No. 32176 temporarily
reducing the eligibilty cap for published avoided cost rates from 10 average megawatts (aMW)
to 100 kilowatts (kW). On February 28, 2011, the Northwest and Intermountain Power
Producers Coalition (NIP PC or Coalition) fied a timely Petition for Reconsideration.
NIPPC requests that the Commission issue an order granting reconsideration of Order
No. 32176 by: (1) taking official notice of the documents and records cited by NIPPC during oral
argument and in its petition; (2) holding an evidentiar hearing on the issues addressed in Order
No. 32176; (3) requiring the utilties to immediately implement changes to the Integrated
Resource Planning (IRP) Methodology and calculate new avoided cost rates; and (4) reinstating
the 10 aMW eligibility cap for the published avoided cost rates for wind and solar qualifying
facilities (QFs).
Idaho Power Company, Avista Corporation, and PacifiCorp dba Rocky Mountain
Power all fied timely Answers urging the Commissirn to deny reconsideration on the latter three
issues. They did not address the official notice issue. Based upon our review of the Petition for
Reconsideration, the Answers and our record, we partially grant reconsideration and parially
deny reconsideration as set out in greater detail below.
BACKGROUND
On November 5, 2010, the three utilties fied a Joint Petition requesting that the
Commission initiate an investigation to address various avoided cost issues related to the
Commission's implementation of the Public Utilty Regulatory Policies Act of 1978 (PURP A).
While the investigation is under way, the Petitioners also moved the Commission to "lower the
published avoided cost rate eligibilty cap from 10 aMW to 100 kW (to) be effective
immediately. . .." Petition at 7.
ORDER NO. 32212 1
After reviewing the Joint Petition and the Answers, the Commission declined the
Motion to immediately reduce the eligibilty cap for the published avoided cost rates. Instead,
the Commission determined that it would expeditiously consider the Petitioners' request to
reduce the eligibilty cap through the use of "Modified Procedure" (written comments)) and oral
argument. The Notice established an intervention deadline of December 17, 2010; set deadlines
for initial comments and reply comments of December 22, 2010, and January 19, 2011,
respectively; and scheduled an oral argument for January 27,2011. Order No. 32131.
The Commission specifically requested written comments and oral argument
regarding three issues: (1) the advisability of reducing the published avoided cost eligibilty cap;
(2) if the eligibilty cap is reduced, the appropriateness of exempting non-wind qualifying facility
(QF) projects from the reduced eligibility cap; and (3) the consequences of dividing larger wind
projects into 10 aMW projects to utilze the published rate. The Commission also communicated
its intent to consider the other avoided cost issues identified by the Petitioners and other
interested parties in subsequent proceedings. ¡d. at 5.
Written comments and reply comments were submitted by numerous parties. Oral
argument was held on January 27, 2011. Based upon the record, the Commission found that a
convincing case had been made to temporarily reduce the eligibility cap for published avoided
cost rates from 10 aMW to 100 kW but only for wind and solar QFs. The Commission also
decided to open a new investigation into the implications of disaggregated QF projects. See Case
No. GNR-E-11-01; Order No. 32176 at 11. NIPPC requests reconsideration from final Order
No. 32176.
ISSUES ON RECONSIDERATION
A. Legal Standards
Reconsideration provides an opportunity for a pary to bring to the Commission's
attention any question previously determined and thereby affords the Commission with an
opportunity to rectify any mistake or omission. Washington Water Power Co. v. Kootenai
Environmental Allance, 99 Idaho 875, 879, 591 P.2d 122, 126 (1979). The Commission may
grant reconsideration by reviewing the existing record, by written briefs, or by evidentiary
hearing. IDAPA 31.01.01.332. Ifreconsideration is granted, the Commission must complete its
1 In instances where the public interest may not require a formal hearing to consider the presented issues, "the
proceeding may be processed under modified procedure, i.e., by written submissions rather than by hearing." Rule
201, IDAPA 31.01.01.201.
ORDER NO. 32212 2
reconsideration within 13 weeks after the deadline for fiing petitions for reconsideration. Idaho
Code § 61-626(2).
Consistent with the purpose of reconsideration, the Commission's Procedural Rules
require that petitions for reconsideration "set forth specifically the ground or grounds why the
petitioner contends that the order or any issue decided in the order is unreasonable, unlawful,
erroneous or not in conformity with the law." Rule 331.01, IDAPA 31.01.01.331.01. Rule 331
further requires that the petitioner provide a "statement of the nature and quantity of evidence or
argument the petitioner wil offer if reconsideration is granted." Id.
B. Taking Official Notice
At oral argument, NIPPC distributed a document entitled "Request for Official
Notice" and asked the Commission to take official notice of a host of documents listed in the
"Request" including approximately 14 PUC Orders, several FERC orders and notices, and the
"Filings, Testimony, Exhibits and Orders" in 24 different PUC dockets. The case caption or title
(i.e., the case description) of each PUC Order and PUC case was not provided. In addition,
NIPPC orally asked the Commission to take offcial notice of "three documents related to coal
costs that support our comments." Tr. at 7. NIPPC's counsel described the three documents as
follows:
One is the settlement agreement that the Environmental Protection Agency
reached with the parties in the final rulemaking. The other is the Oregon
Senate Natural Resources Committee report on greenhouse gas emissions, and
the final is Rocky Mountain Power's parent corporation's the MidAmerIcan
Holdings Company, comments in the Coal Combustion Residual Rulemaking,
all of which support our comments related to the ability of renewable energy
projects to allow the utilties to reduce generation from coal-fired power
plants allowing them to - actually, it impacts the avoided cost rate and the
cost of renewable energy.
Tr. at 7-8 (emphasis added). In response, the Chairperson of the hearing then asked:
Commissioner Smith: Well, Mr. Richardson, I'm getting confused because
this is not a proceeding today to argue about the cost. I mean, the
Commission clearly outlined in its Order that we wanted comments on three
things: the advisabilty of reducing the eligibilty cap; if the eligibilty cap is
reduced, the appropriateness of exempting non-wind QF projects from that
reduced eligibilty cap; and the consequences of dividing larger wind projects
into 10 average megawatt projects in order to take advantage of the published
avoided cost rate.
ORDER NO. 32212 3
Mr. Richardson: ... As pointed out in our comments, the advisabilty of
reducing the eligibility cap is crucial to understanding what happens when the
eligibility cap is reduced, meaning the integrated resource procedure, process
is used by all three utilties and that process does not calculate an accurate or
even nearly accurate avoided cost rate. . . .
Commissioner Smith: On your motion for the Commission to take offcial
notice, I wil note that I believe, . .. We can take official notice after giving
paries appropriate opportunity to respond, so I think your passing this
(Request) out gives people notice of what you want us to take notice of and
certainly we can take notice of ((1)) our own orders and those of any other
regulatory agency, state or federal, ((2)) matters of common knowledge,
technical, financial or scientific facts, matters judicially noticeable and(, (3))
data contained in periodic reports of regulated utilities fied with the
Commission or federal agencies. So as long as they fall within one of those
categories, there's no problem with us taking notice.
Mr. Richardson: Than you, Madam Chairman, and I believe all of the points
that have been cited in our motion fall into those categories.
Tr. at 8-10 (scattered, emphasis added). No pary voiced objection to NIPPC's request.i
In final Order No. 32176, the Commission acknowledged taking offcial notice of its
own Notices and Orders, but the Commission denied "NIPPC's request to take official notice of
the remainder of its listed documents, including the three additional documents regarding coal
costs." Order No. 32176 at 5.i The Commission noted that its Rule 263 (IDAPA 31.01.01.263)
distinguishes between when it takes official notice on its own motion, and when paries request
that the Commission take offcial notice. Rule 263.02. The Commission explained that when
paries seek official notice they "must submit those documents to the Commission in the maner
prescribed for documents in Rule 262.,,3 The Commission declined to take judicial notice of the
requested documents (other than the Commission's own Notices and Orders) primarily for two
reasons. First, NIPPC did not actually provide copies of the requested documents to the
Commission or parties as required by Rule 263.02. Order No. 32176 at 5. Second, the
2 The presiding officer's ruling on motions presented at hearing "may be reviewed by the full Commission in
determining the matter on its merits." Rule 253, IDAPA 31.01.01.253.
3 Rule 262 generally provides that documentary evidence is to be submitted in the form of copies or excerpts.
"When a par offers in evidence any portion of a transcript, exhibit, or other record from any other proceeding
before the Commission, the portion offered must be specifically described. . . ." IDAPA 31.01.0 1.262.
ORDER NO. 32212 4
Commission found that the majority of the "fiings, testimonies and exhibits" in the PUC cases
listed in NIPPC's Request were not "documents or information subject to official notice per Rule
263." Id.
In its Petition for Reconsideration, NIPPC requests that the Commission take official
notice of all the items listed in its request as well as the "three documents related to coal costs."
Tr. at 7; Petition at 5-6. Citing Idaho Rule of Evidence 201, NIPPC asserts that "filings in the
Commission dockets are judicially noticeable, and therefore fall within the confines of Rule
263." NIPPC maintains that because a cour may take judicial notice of records in cases before
the trial cour, "there is no reason the Commission may not do the same for records in its own
proceedings." Id. at 6; citing Larson v. State, 91 Idaho 908, 909, 435 P.2d 248, 249 (1967). The
Coalition also argues that failing to take official notice of the requested documents is particularly
unfair in this case because NIPPC was precluded from callng a witness to introduce these
documents. "At a minimum, therefore, the Commission should reconsider its decision, and take
offcial notice of the FERC orders." Petition at 5.
Commission Findings: After reviewing NIPPC's Petition and our record, we grant
reconsideration in part and deny reconsideration in par. We grant the Coalition's request to take
offcial notice of those FERC filings, rules, and orders listed in its "Request" that was handed out
at the oral argument. Although NIPPC did not comply with that provision of Rule 263 that
requires the pary requesting official notice to supply copies of the documents to the Commission
and other paries, we note that most of the FERC documents were cited in NIPPC's comments.
Taking offcial notice of documents in our proceedings is an exercise of discretion.
When reviewing an exercise of discretion, our Supreme Cour considers whether the
Commission: (1) correctly perceived the issue as one of discretion; (2) acted within the
boundaries of such discretion and consistently with applicable legal stadards; and (3) reached
its decision by an exercise of reason. Sun Valley Shopping Ctr. v. Idaho Power Co., 119 Idaho
87,94, 803 P.2d 993, 1000 (1991); Newman v. State, 149 Idaho 225, 233 P.3d 156 (Ct.App.
2010).
We deny reconsideration regarding the request to take official notice of the "Filings,
Testimony, (and) Exhibits" that pertain to the 24 PUC cases identified only by case number.
Despite NIPPC's declaration to the contrar, all the "Filings, Testimony, and Exhibits" of the 24
PUC cases are not admissible for two reasons. First, all filings, testimony and exhibits in the
ORDER NO. 32212 5
PUC cases are not the types of facts that are subject to offcial or judicial notice. Our Rule 263 is
similar to Idaho Rule of Evidence 201 ("Judicial Notice of Adjudicatory Facts"). Although the
Idaho Rules of Evidence do not apply to Commission proceedings, Idaho Code § 61-601, the
concepts of taking notice are similar. LR.E. 201 provides that a "judicially noticed fact must be
(1) not subject to reasonable dispute in that it is either (1) generally known within the territorial
jurisdiction of the trial cour or (2) capable of accurate and ready determination by resort to
sources whose accuracy canot reasonably be questioned." LR.E. 201 (b) (emphasis added).
Similar to our Procedural Rule 263.02, LR.E. 201(d) provides that the party seeking the court to
take judicial notice of "records, exhibits or transcripts from the court fie in the same or a
separate case, . . . shall identify the specific document or item . . . and serve on all paries copies
of such documents or items." We find the purpose behind the requirement of providing copies of
the documents for which a party seeks official notice is to provide the Commission with all
relevant information of the documents. This includes the actual documents themselves.
In examining NIPPC's reconsideration request, we need look no fuher to determine
whether it was appropriate to take official notice of the filings, testimony and exhibits in the
PUC cases, than the recent Rocky Mountain rate case No. PAC-E-10-07. This case contains
nearly 3,000 pages of transcript from 47 technical witnesses and approximately 100 public
witnesses. There were about 240 public comments ("filings") in the case. The subject of these
documents and the testimony range from: simple opposition to the proposed rate increase to
keeping Monsanto's rates low; from the weatherization program for low-income customers to the
appropriate retu on equity; and from a conservation program for irrigators to calculating the
value of "interrptibility" for Monsanto.
After reviewing the fiings, testimony and exhibits of the PacifiCorp rate case, we
find the one thing that these documents and testimony have in common is that they are disputed
facts. We find that many of the documents and testimony are subject to reasonable dispute and
do not contain the types of facts that are undisputed matters of common knowledge or facts
capable of accurate and ready determination by resort to sources whose accuracy canot
reasonably be questioned. Rule 263.01(b) and LR.E. 201(b); Martin v. Camas County, _
Idaho _' _ P.3d _,2011 WL 538750 (Idaho 2011); Santa Monica Food Not Bombs v. City
of Santa Monica, 450 F .3d 1022, 1025 n.2 (9th Cir. 2006).
ORDER NO. 32212 6
The second reason to deny reconsideration is that NIPPC failed to show how the
"filings, testimony and exhibits" of the 24 PUC cases were relevant to our inquiry in this case.
Although the Commission may officially notice a variety of documents and adjudicatory facts,
only relevant material may be noticed and admitted into evidence. In other words, for us to take
offcial notice of documents and other facts, the evidence must be relevant to be admissible.
State v. Van Sickle, 120 Idaho 99, 103, 813 P.2d 910, 914 (Ct.App. 1991); LR.E. 401. Even "if
taking judicial notice of the (documents) is otherwise proper, the question remains whether the
(documents) noticed were relevant" to the inquiries before the Commission. California v.
Superior Court of California, 482 U.S. 400, 408, 107 S.Ct. 2433, 2439 (1987); see Cuellar v.
Joyce, 596 F.3d 505, 512 (9th Cir. 2010); Santa Monica, 450 F.3d at 1025 n.2; Flick v. Liberty
Mut. Ins. Co., 205 F.3d 386,393 (9th Cir. 2000).
Again exaiining the fiing, testimony and exhibits in the Rocky Mountain rate case,
we find many if not ~n of the requested documents and testimony have no bearing or relevancy
to the avoided cost issues in this proceeding. Consequently, we find that NIPPC has failed to
meet its burden of demonstrating that the filings, testimony and exhibits of the 24 PUC cases are
noticed facts appropriate for official notice and relevant to the matters in this case. Our findings
are consistent with the applicable legal standards for admission of judicially noticeable facts
under Idaho law. Newman, 149 Idaho at 227,233 P.3d at 158; LR.E. 201(b).4
We next tur to the three coal cost documents. Even though these documents may
properly be the subject of offcial notice,5 they are not relevant to the three questions posed by
the Commission in this proceeding. As Commissioner Smith noted at the hearing, "This is not a
proceeding today to argue about the (avoided) cost. I mean, the Commission clearly outlined in
its order that we wanted comments on three things: the advisabilty of reducing the eligibilty
cap; . . . the appropriateness of exempting non-wind QF projects from the reduced eligibility cap;
and the consequences of dividing larger wind projects into 10 average megawatt projects. . . ."
4 In its offcial notice request, NIPPC lists 16 PUC cases that are Firm Energy Sales Agreements between Idaho
Power and various QFs. NIPPC references the 16 PUC cases in a footnote in its reply comments. Reply at 17, n.9.
The footnote pertains to NIPPC comments regarding the calculation or comparison of avoided cost rates. While we
take offcial notice of the Orders and Notices in these cases, we find that the Coalition failed to demonstrate the
relevancy of the "fies, testimony and exhibits" in these cases. Moreover, the footnote containing the reference to
these cases relates to avoided costs - an issue we find that is beyond the scope of this docket.
5 Two were issued by regulatory agencies and the "Settlement" was entered into by a regulatory agency (EPA) and
various States.
ORDER NO. 32212 7
Tr. at 8. Mr. Richardson described them as "three documents related to coal costs that support
our comments." Tr. at 7.
In NIPPC's reply comments, the Coalition links the coal documents to alleged
shortcomings of the IRP Methodology in accurately reflecting avoided costs. Reply Comments
at 8, 21-25. However, the alleged impact of coal costs on the use of the IRP Methodology in
calculating avoided costs was not par of the GNR-E-10-04 case. In Order No. 32176, we stated
that we are not changing the avoided cost rates: lowering the eligibility cap "does not change the
published avoided cost rates established in Order No. 31025 (March 16, 2010)." Order No.
32176 at 9. To put it simply, we find that the issues of coal costs and their relationship to the
IRP Methodology is beyond the subject matter of this case. Our final Order No. 32176 states the
issues concerning "the IRP Methodology wil be considered after a determination regarding
disaggregation" in the GNR-E-11-01 case. Order No. 32176 at n.4 (emphasis added); see also
n.3.
In the disaggregation case (GNR-E-11-01) we recently issued a Bench Order
regarding a pary's discovery dispute with NIPPC. In our Bench Order we found that the issue
of using the IRP Methodology to calculate avoided costs "is specifically reserved for a
subsequent proceeding." "Thus, we find that evidence regarding the IRP Methodology is beyond
the scope of the (GNR-E-11-01) case and thus not relevant. . . ." Bench Order at 1-2 (March 23,
2011). As explained more fully below, the issues of the IRP Methodology wil be examined in a
subsequent case.
Thus, we find that the three coal documents are not relevant to our inquiry in this
case. In addition, we further find that NIPPC has failed to meet its burden of showing that
MidAmerican's comments (the holding company of PacifiCorp) is not subject to, reasonable
dispute. Martin, 201 WL 538750; LR.E. 201(b); Santa Monica, 450 F.3d at 1025 n.2.
In summary, we grant reconsideration and take official notice of those FERC filings,
rulings and orders set out in NIPPC's request. We deny reconsideration regarding the "Filngs,
Testimony, (and) Exhibits" for the 24 PUC cases cited in the request. Finally, we deny
reconsideration to take official notice of the three coal cost documents as not relevant and
beyond the scope of this proceeding.
ORDER NO. 32212 8
C. The Requestfor a Technical Hearing
NIPPC next contends that, by denying its request for a "technical" hearing to present
witnesses, the Commission did not allow NIPPC to establish an evidentiar record. NIPPC
fuher argues that, because the Commission's decision was based on factual findings, "the
Commission must hold an evidentiary hearing." Petition at 7. NIPPC alleges that due process
would require the Commission to conduct an evidentiar hearing and that "the Commission's
order is indefensible without at least some evidence supporting the relief granted to the Utilties."
¡d. at 8-9.
Utilties' Answers
Idaho Power argues that NIPPC received notice and had an opportunity to be heard.
Idaho Power further states that a technical hearing is not required for the Commission to make
factual findings. Rule of Procedure 201, IDAPA 31.01.01.201. Idaho Power argues that "(t)he
standard of review as to whether the Commission has made valid findings of fact is not whether
a technical/evidentiary hearing was held. The standard of review is whether those findings of
fact are supported by substantial and competent evidence in the record." Answer at 5. The
utility observed that discovery was available to all paries and that NIPPC propounded extensive
discovery of the Joint Petitioners. Answer at 3. All paries were able to fie direct and rebuttal
comments and participate at oral argument. Ultimately, Idaho Power argues that the
Commission's decision was a proper exercise of its discretion in its implementation of PURP A.
Id. at 19.
Avista maintains that NIPPC's request for an evidentiary hearing should be denied as
moot. Avista notes that Case No. GNR-E-11-01, the subsequent (or second) phase of the
Commission's avoided cost investigation, provides for a technical hearing. Because,
presumably, the GNR-E-11-01 technical hearing wil provide an opportunity for NIPPC to
present witnesses and testimony, its request for a technical hearing during reconsideration of the
first phase is moot. Answer at 4.
Rocky Mountain Power asserts that the Commission was not required to conduct a
technical hearing prior to reducing the eligibilty cap for published avoided cost rates. Rocky
Mountain further notes that in a similar case the California PUC supports the Idaho
Commission's decision to reduce the eligibilty cap without an evidentiar hearing. Answer at 4
citing 1996 CaL. PUC LEXIS 1016* 44-45.
ORDER NO. 32212 9
Commission Findings: NIPPC cites Intermountain Gas Co. v. Idaho PUC, 97 Idaho
113, 540 P.2d 775, for its proposition that a hearing is required. However, the Intermountain
Gas case expressly approved the use of written comments (i.e., submissions) in gathering
evidence. The Court states, "(t)he procedure chosen by the Commission must of course give the
paries fair notice of exactly what the Commission proposes to do, together with an opportunity
to comment, to object, and to make written submissions; and the final order of the Commission
must be based upon substantial evidence." Intermountain Gas, 97 Idaho at 129, 540 P.2d at 791
(1975) (emphasis added), citing, American Public Gas Asso. v. Federal Power Comm., 162
U.S.App.D.C. 176,498 F.2d 718, 722 (1974).
In American Public Gas the D.C. Circuit held that the Federal Power Commission
(FPC)6 is not required to process all cases coming before it with formal hearings, to include
witnesses and cross examination. "Evidentiar submissions in written form may be suffcient."
498 F.2d at 180. The Circuit Court fuher explained that:
The abilty (of the FPC) to choose with relative freedom the procedure it
wil use to acquire relevant information gives the Commission power to
realistically tailor the proceedings to fit the issues before it, the information.it
needs to iluminate those issues and the manner of presentation which, in its
judgment, wil bring before it the relevant information in the most effcient
manner.
The procedure chosen by the Commission must of course give the paries
fair notice of exactly what the Commission proposes to do, together with an
opportunity to comment, to object, and to make written submissions; and the
final order of the Commission must be based upon substantial evidence.
Id. at 723 (emphasis added), citng City of Chicago v. FPC, 458 F.2d 731, 743-44 (D.C. Cir.
1971), certdenied, 405 U.S. 1074,92 S.Ct. 1495 (1972).
In this case, the Commission provided notice to NIPPC and other interested persons
by publishing its Notice of Joint Petition and by personally serving NIPPC with the Notice.
NIPPC submitted both initial comments and reply comments in this case. NIPPC also actively
participated at oral argument. NIPPC's comments and exhibits, along with those of the
numerous other parties to the case, make up the evidentiary record considered by the
Commission prior to issuing its final Order.
6 The FPC is now the Federal Energy Regulatory Commission (FERC).
ORDER NO. 32212 10
A Ninth Circuit case reviewing a decision by the Interstate Commerce Commission
(ICC) is also instructive. In Amador Stage Lines, Inc. v. United States and Interstate Commerce
Comm., 685 F .2d 333 (9th Cir. 1982), the iCC utilized modified procedure to consider an
application fied by Quality Coach Lines, to operate as a carier of passengers within the United
States. Amador and other carriers opposed Quality's application and requested oral hearing on
their objections. Amador argued that "where material facts are in dispute principles of
administrative due process and fundamental fairness require that the Commission hold a
hearing." 685 F.2d at 335. The Ninth Circuit reasoned that the Commission "in its discretion
may deny an oral hearing even where material facts are disputed so long as the disputes may be
adequately resolved by the written submissions." Id. (emphasis added).
The Commission's Rules of Procedure allow for the use of Modified Procedure, i.e.,
the consideration of issues based on written submissions (i.e., comments) rather than by hearing.
Rule 201, IDAPA 31.01.01.201. Even if a hearing is requested, the Commission "may decide
the matter and issue its order on the basis of the written positions before it." Rule 204, IDAPA
31.01.0 1.204 (emphasis added). Here the Commission acted within its discretion when it
determined to gather evidence by written submissions.
The Commission did not issue its decision regarding QF eligibility to published
avoided cost rates without a thorough review of the evidentiary record established in this case
through the use of Modified Procedure. All paries had an opportunity to submit comments,
reply to comments, and assert and defend a position at oral argument. Based upon the
evidentiary record provided by the parties, the Commission determined "that a convincing case
has been made to temporarily reduce the eligibilty cap for published avoided cost rates from 10
aMW to 100 kW for wind and solar only while the Commission fuher investigates the
implications of disaggregated QF projects." Order No. 32176 at 9; American Public Gas.
Sufficient notice of exactly what the Commission was considering was provided to
allow all interested parties an opportunity to paricipate. Ample opportunity was given for the
paries to provide evidence in support of their positions. The Commission utilzes Modified
Procedure for the majority of cases that it considers. Modified Procedure has proven to be an
effective means for obtaining public input and paricipation in cases. NIPPC has failed to
demonstrate that the Commission's decision to process the issues presented in GNR-E-10-04
through the use of Modified Procedure was unreasonable or unlawfuL. There is substantial and
ORDER NO. 32212 11
competent evidence in the record to support the Commission's findings. In re Ryder, 141 Idaho
918, 120 P.3d 736 (2005). Moreover, NIPPC has not proven that its position could not be
adequately presented in writing. Consequently, we deny reconsideration on this issue.
D. The Issue of the IRP Methodology
NIPPC argues that federal law requires that the utilties contract with each QF at the
"full avoided cost rates." Petition at 13. NIPPC states that the IRP Methodology violates federal
law by dramatically understating actual avoided costs and producing "wildly inaccurate results."
Id. at 11. NIPPC maintains that the Commission's failure to address NIPPC's assertions "is
nothing short of arbitrary. . . ." Id. NIPPC furher argues that the utilties "have not provided
enough data for QFs to properly vet the individually provided (IRP Methodology) results, and
are hence in violation of the 18 C.F.R. 292.302(b) by failing to provide for public inspection of
basic system cost data listed in the regulation." Id. at 12. Finally, NIPPC claims that "(i)f the
rates for the IRP Methodology were accurate and verifiable to the QFs, there would be no need
to disaggregate an otherwse larger project into smaller projects to obtain the fair rate at which
the project would be financially viable." Id. at 13.
Utilities' Answers
Idaho Power maintains that NIPPC's assertions regarding the flaws of the IRP
Methodology are erroneous. IRP calculations do take into account both capacity and energy.
Idaho Power also asserts that NIPPC's representations regarding "full avoided costs" are
ilusory. PURP A and FERC make no reference to a QF's entitlement to "full" avoided costs.
Moreover, Idaho Power argues there is "nothing in the regulations to suggest that the IRP
methodology does not comport with FERC rules." Answer at 16.
Avista argues that NIPPC's request for immediate changes to the IRP Methodology is
beyond the scope of this proceeding. A vista notes that NIPPC claims "the record in this docket
contains no evidence whatsoever" but then goes on to claim that it has proven that the IRP
Methodology produces wildly inaccurate results. Answer at 5. "Simply stated, NIPPC canot
have it both ways." Id.
Rocky Mountain Power states that NIPPC's request to review the IRP Methodology
should be denied as beyond the scope of these proceedings. Answer at 5. "If NIPPC wishes to
challenge the adequacy of the IRP Methodology, the proper avenue for doing so is to fie a
separate petition with the Commission. Such action is not necessary here, however, because the
ORDER NO. 32212 12
Commission has already stated that it wil address concerns over the IRP Methodology after the
Commission has an opportunity to investigate and make a determination regarding
disaggregation." Id.
Commission Findings: Use of an IRP methodology was first proposed by the
utilties for QF projects in excess of the Commission's stated eligibility for published rates in
1995. As originally proposed,
the utility would determine through its least cost planing model (IRP
process) the cost of meeting load over the next 20 years. Whenever a
proposed QF project were (sic) offered to the utilty, it would insert the
generation and capacity of that project into the model and determine what
costs would be avoided over the 20 year period. That avoided cost would be
the rate available to the developer.
Order No. 25882 at 6. The intervenors to the 1995 case opposed the IRP Methodology for
calculation of QF avoided cost rates "contending that it places too much control over the avoided
cost process into the hands of the utilities." Id. Nevertheless, the Commission determined that
adoption of the (IRP Methodology) is consistent with our goal of maintaining
a regulatory climate that allows our electric utilties to retain their
advantageous posture in a marketplace that is likely to become increasingly
competitive. This will ultimately work to the advantage of ratepayers in the
form of rates lower than they would otherwise be in effect. By treating QFs in
the same manner as utilty acquired resources, we are further removing the
shelter that has been constructed around the QF industry. Requiring those
projects to prove their viability by market standards ensures that utilties wil
not be required to acquire resources priced higher than would result from a
least cost planing (IRP) process. Ratepayers wil not be disadvantaged and
QFs wil be treated fairly and consistently with the requirements and goals of
PURPA.
Id. at 7. The Commission concluded that the least cost planing (IRP) process wil provide the
most logical, consistent and frequent review of the avoided cost rates and the issues that are
raised in setting those rates~" Id.
This GNR -E-1Q-04 docket began with the utilities' request that the Commission
reduce QF eligibility to the published rates. From the outset, NIPPC has argued that the IRP
Methodology is flawed and in violation of federal law. NIPPC asserts on reconsideration that
that the Commission must recalculate the avoided costs rates in this case. However, as
mentioned previously, the Commission has expressly stated that other avoided cost issues,
"including utilization and/or modification of the IRP Methodology wil be considered after a
ORDER NO. 32212 13
determination regarding disaggregation." Order No. 32176 n.4 (emphasis added). The GNR-E-
10-04 docket was limited to the three issues set out in the initial Notice: (1) the advisabilty of
reducing the published avoided cost eligibility cap; (2) if the eligibility cap is reduced, the
appropriateness of exempting non-wind qualifying facilty (QF) projects from the reduced
eligibilty cap; and (3) the consequences of dividing larger wind projects into 10 aMW projects
to utilize the published rate. Order No. 32131 at 5.
While the IRP Methodology is one of many avoided cost issues raised by the paries,
it is not at issue in the present docket. Attacking the IRP Methodology approved by the
Commission in 1995 and utilzed for the past 16 years in an effort to stop the Commission from
reducing the eligibilty cap for wind and solar QFs represents a collateral attack of the
Commission's final Order adopting the IRP Methodology. See Order No. 25882; Idaho Code §
61-625. If NIPPC desired to challenge the viability of the IRP Methodology, it could have
petitioned the Commission to open an investigation to evaluate the presently approved IRP
Methodology. Idaho Code § 61-612; Asso. Pacifc Movers, Housemovers, Inc. v. Rowley, 97
Idaho 663, 664, 551 P.2d 618, 620 (1976) (an application requesting that the Commission
rescind, alter or amend an order pursuat to Idaho Code § 61-624 does not constitute a collateral
attack of a Commission order). While the Commission acknowledged NIPPC's challenge to the
IRP Methodology, we specifically stated that "the IRP Methodology appropriately assesses when
the QF is capable of delivering its resources against when the utilty is most in need of such
resources." Order No. 32176 at 10. Moreover, the Commission intends to examine and address
NIPPC's concerns in a subsequent case. Id. at 9. The Commission's decision to examine the
various avoided cost issues raised by the paries in an orderly maner and on a case-by-case basis
is reasonable and within the Commission's discretion.
Final Orders of the Commission are final and conclusive and not subject to collateral
attack. Idaho Code § 61-625. "A different rule would lead to endless consideration of matters
previously presented to the Commission and confusion about the effectiveness of Commission
orders." Utah-Idaho Sugar Co. v. Intermountain Gas Co., 100 Idaho 368, 373, 597 P.2d 1028,
1063 (1979).
NIPPC's arguents regarding the IRP Methodology are outside the scope of this
docket and amount to an impermissible collateral attack of Commission Order No. 25882. Until
such time as we initiate a proceeding to investigate the IRP Methodology and possibly set new
ORDER NO. 32212 14
avoided cost rates, the curent methodologies and the rates are in effect. Idaho Code § 61-502.
Based on the foregoing, NIPPC's request for reconsideration of a determination regarding the
IRP Methodology is denied.
E. Reinstate the 10 aMW Published Avoided Cost Rate
NIPPC argues that "(b)ecause the IRP Methodology, as curently implemented,
produces rates below the full avoided cost rates, the Commission should reconsider its decision
and raise the eligibilty cap to 10 aMW so that it wil be properly implementing PURP A for at
least some larger wind and solar QFs." Id. at 14. The utilities generally oppose NIPPC's request
on reconsideration to reinstate the 10 aMW published avoided cost rate for wind and solar.
Commission Findings: The Commission denies NIPPC's request to reconsider the
Commission's decision to temporarily reduce the eligibility cap for published avoided cost rates
from 10 aMW to 100 kW for wind and solar QFs. NIPPC's request is based entirely on the
proposition that the IRP Methodology is unworkable and unreasonable. As noted above, the
Commission finds that the use ofIRP Methodology is: (1) beyond the scope of this docket; (2) a
subject for a subsequent avoided cost proceeding after disaggregation; and (3) represents a
collateral attack on the Commission's prior Order approving the use of the IRP Methodology in
setting avoided cost rates.
In final Order No. 32176, the Commission clearly conveyed its intent that the reduced
eligibility cap be temporary, until issues regarding disaggregation could be resolved. We
directed parties to establish an expedited schedule for subsequent proceedings, culminating with
a technical hearing to be held the week of May 9, 2011. Order No. 32176 at 11. The
Commission specifically noted that other avoided cost issues, "including utilzation and/or
modification of the IRP Methodology, wil be considered after a determination regarding
disaggregation." Id. at 9 (emphasis added).
In addition, the Commission recently issued a Bench Order on March 23, 2011, in
Case No. GNR-E-I1-01 (the second phase of the avoided cost investigation) reiterating that
"evidence regarding the IRP Methodology is beyond the scope of the present case and thus is not
relevant to the subject matter of the pending case." The Commission ordered that discovery
regarding the IRP Methodology be stayed, "but may be renewed in a subsequent case when the
Commission investigates the challenges to the IRP Methodology." Bench Order at 2. There is
ORDER NO. 32212 15
substantial and competent evidence to support the Commission's decision to temporarily reduce
the eligibility cap for the published avoided cost rates.
ORDER
IT is HEREBY ORDERED that Northwest and Intermountain Power Producers
Coalition's Petition for Reconsideration is granted in par and denied in par. The Commission
parially grants reconsideration on the issue of offcial notice. We take offcial notice of FERC
fiings, rules and orders as more fully set out in the body of this Order. We deny reconsideration
on the issue of taking offcial notice of the three coal documents and the filings, testimony, and
exhibits of the 24 PUC cases.
IT is FURTHER ORDERED that Order No. 32176 is amended to reflect that the
Commission takes official notice of the FERC documents pursuant to Idaho Code § 61-624.
IT is FURTHER ORDERED that reconsideration regarding NIPPC's remaining
issues of a request for a technical hearing, the IRP Methodology issue, and reinstatement of the
10 aMW published avoided cost rate eligibility cap for wind and solar are denied.
THIS is A FINAL ORDER ON RECONSIDERATION. Any party aggrieved by this
Order or other final or interlocutory Order previously issued in this Case No. GNR~E-1 0-04 may
appeal to the Supreme Cour of Idaho pursuant to the Public Utilities Law and the Idaho
Appellate Rules. See Idaho Code § 61-627.
ORDER NO. 32212 16
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this è2g+"
day of March 2011.
~¡J~
MARSHA H. SMITH, COMMISSIONER
~~
MACK A. REnF ~ MMSSIONER
ATTEST:
(j~;e~Commission Secretary
O:GNR-E-IO-04 ks Reconsideration
ORDER NO. 32212 17