20180703IPC Memo Supporting Motion to Intervene.pdf

case L:18-cv-00236-REB Document 7-1 Filed 07/03/j.g page 1of 19
Steven B. Andersen (ISB 2618)
sba(d.swb!-aw.com
Wade L. Woodard 0SB 6312)
[e-mail]*
ANDERSEN SCHWARTZMAN
wooDARD BRATLSFORD, PLLC
101 South Capitol Boulevard, Suite 1600
Boise,lD 83702-7720
Telephone : 208.342.441 |
Facsimile: 208.342.4455
Attorneys for Defendant-Interttenor ldaho P ow er
Company
FRANKLIN ENERGY STORAGE ONE,
LLC, FRANKLIN ENERGY STORAGE
TWO, LLC, FRANKLIN ENERGY
STORAGE THREE, LLC, FRANKLIN
ENERGY STORAGE FOUR, LLC,
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
Case No.: 1: l8-cv-00236-REB
DEFENDANT.INTERVENOR IDAHO
POWER COMPADIY'S MEMORANDUM
IN SUPPORT OF ITS MOTION TO
INTXRVENEPlaintiffs,
vs
PAUL KJELLANDER, KRISTINE RAPER
and ERIC ANDERSON, in their offrcial
capacity as Commissioners of the IDAHO
PUBLTC UTILITIES COMMISSION,
Defendants,
md,
IDAHO POWER COMPANY,
Defendant-Intervenor.
Defendant-[ntervenor Idaho Power Company ("Idaho Power"), by and through its counsel
of record, Andersen Schwartzman Woodard Brailsford, PLLC, hereby respectfully submits this
Memorandum in Support of its Motion to Inte'rrvene.
DEFENDANT.INTERVENOR IDAHO POWER COMPANY'S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE. 1
Case L:18-cv-00236-REB Document 7-l_ Filed 07/03/l-8 page 2 ot t9
INTRODUCTION
Under Federal Rule of Civil Procedwe 24 ("Rule 24"), there are certain circumstances
under which a party can intervene in a matter, either as of right or with the Court's permission.
The instant case presents those very circumstances. Specifically, Plaintiffs, through the instant
lawsuit, ask this Court to grant them injunctive and/or declaratory relief that, if granted, would
substantially affect critical terms of specific contracts into which Plaintiffs seek to obligate Idaho
Power to enter. Consequently, because Idaho Power has a significant protectable interest relating
to the transactions at issue in this lawsuit that may be impaired by its disposition, Idaho Power's
motion should be granted, as a matter of right, so that it can adequately protect its interests.
FACTUAL AND PROCEDURAL BACKGROUND
1. Facts Regarding PURPA
The Federal Energy Regulatory Commission ("FERC") is required under the Public Utility
Regulatory Policies Act of 1978 ('PURPA")I to encourage cogeneration and small power
production. 16 U.S.C. $ 824a-3(a), (b). The states are required by PURPA to implement the rules
adopted by FERC. Id. $ 82aa4$). A state commission may comply with its obligations to
implement by resolving disputes on a case-by-oase basis, or taking other actions reasonably
designed to give effect to FERC's rules. Fed. Energt Regulatory Comm'nv. Mississippi,456U.S.
742,751(1982). Among other aspects of implementation, states establish standard PURPA rates
and contracts, under which utilities such as tdaho Power must purchase power from Qualifing
Facilities ("QFs"). These rates may "differentiate among qualiffing facilities using various
technologies on the basis of the supply characteristics of the different technologies." l8 C.F.R. S
292.304(c)(3Xii); see also Cal. Pub. Utils. Comm'n,133 FERC u 61,059, atP 23 (2010), reh'g
I Pub. L. No. 95-617,92 Stat. 3117 (codified in relevant part at l6 U.S.C. $ 82aa-3).
DEFENDANT-INTERVENOR IDAHO POWER COMPANY' S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE.2
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denied, 134 FERC n il,A44 Q0ll); S. Cal. Edison Co.,70 FERC n 61,215, at 61,676 n. 15,
clarified,7l FERC n61,269 (1995).
FERC has only considered battery storage QFs in one decision, and there found that:
[T]he 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 Bnergy 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.
Luz Dev. & Fin. Corp.,s1 FERC fl 61,078, at6l,17l (1990).
FERC has enforcement authority under PURPA Section 210(hX2) when a state
commission's implementation of PURPA is inconsistent with or contrary to FERC regulations.
Policy Statement Regarding the Commtssion's Enforcement Role Under Section 210 of the Public
Uttlities Act of 1978, 23 FERC fl 61,304, at 61,644-45 ("1983 Policy Statement"). Section
210(hX2XB) of PURPA permits a QF to petition FERC to act under Section 210(h)(2)(A) of
PURPA to enforce in a federal district court the requirement that a state commission implement
FERC's regulations. FERC's enforcement authority under Section 210(hX2XA) of PURPA is
discretionary. If FERC declines to act, the QF can then initiate litigation against the state
commission in federal district court. 1983 Policy Statement at 61,645. FERC ensures states'
compliance with the implementation of Section 210 of PURPA and FERC's own regulations, with
state judicial forums available "to ensure that electric utilities and qualifying facilities are dealing
in good faith and in a manner consistent with locally-established regulation." Id. at 61,646.
Federal courts have sole jurisdiction over implementation challenges, while state venues alone
hear "as-applied" challenges. See Exelon Wind l, L.L.C. v. Nelson,766F.3d 380, 388 (5th Cir.
2014) (noting that "[a]n implementation claim involves a contention that the state agency...has
DEFENDANT-INTERVENOR IDAHO POWER COMPANY'S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE- 3
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failed to implement a lawful implementation plan under $ 824a-3(f1 of PURPA, whereas an 'as-
applied' claim involves a contention that the state agency's...implementation plan is unlawful, as
it applies to or affects an individual petitioner").
Idaho has implemented PURPA consistent with federal and state law. The Idaho Public
Utilities Commission ("IPUC") is the appropriate state forum to establish avoided cost rates, set
standard/published rate eligibility caps that exceed the 100 kilowatt ("kW") minimum, review
contracts and resolve disputes between QFs and electric utilities. I.C. $$ 6l-502,61-503; A.W.
Brown Co., Inc. v. Idaho Power Co.,828 P.2d 841, 845 (Idaho 1992); Empire Lumber Co. v. Wash.
Water Power Co.,755 P.zd 1229,1230 (Idaho 1987). The IPUC has implemented PURPA by
issuing general procedures and engaging in case-by-case analysis. Power Res. Group, Inc. v. Pub.
Util. Comm'n of Tex.,422F.3d231,237 (5th Cir. 2005) (citing 1983 Policy Statement); Rosebud
Enters., Inc. v. Idaho Pub. Utils. Comm'n,917 P.zd 766,772 (Idaho 1996); Re Rule-making
Proceeding for Consideration of Cogeneration And Small Power Production Intervenors, IPUC
Order No. 15746, 38 PUR 4th352 (1980). The IPUC has the authority to establish avoided cost
rates, to set eligibility standards/caps for published avoided cost rates and to resolve disputes
between QFs and electric utilities. A.W. Brown,828 P.Zd at 845; Afton Energy, Inc. v. Idaho
Power Co.,693 P.2d 427,431 (Idaho 1984); Rosebud Enters.,9l7 P.2d at 784-85; 18 C.F.R. $
2e2A}t@) (1980).
Under PURPA, state utility commissions are responsible for calculating the avoided cost
rates for utilities subject to their jurisdiction, which they may "accomplish[ by issu[ing]
regulations, [by addressing particular issues] on a case-by-case basis, or by...[taking] any other
action designed to give effect to the Commission's rules." Portland Gen. Elec. Co. v. Fed. Energt
Regulatory Comm'n, 85 4 F .3 d 692, 695 (D.C. Cir. 2017) (citation omitted).
DEFENDANT-INTERVENOR TDAHO POWER COMPANY'S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE.4
Case 1:18-cv-00236-REB Document 7-1 Filed 07/03/L8 Page 5 of 19
States are granted substantial latitude in implementing PURPA, and FERC is "reluctant to
second guess the state commission's determinations." Cal. Pub. Utils. Comm'n,I33 FERC fl
61,059 atP 24; see also Stgnal Shasta Energt Co., Inc.,41 FERC 1[ 61,120, at 61,295 (1987);
Portland Gen. Elec.,854 F.3d at 698 ("State-based adjudication serves as the mainstay for
enforcing PURPA rights.").
Z. Facts Regarding Idaho Power
Idaho Power is a vertically integrated electric utility engaged in the business of generating,
purchasing, transmitting and distributing elechical energy. Idaho Power uses an interconnected
grid to provide wholesale and retail electric service throughout approximately 24,00A square miles
of service territory with approximately 525,000 retail customers in southem Idaho and eastem
Oregon. As a public utility providing retail electric distribution and supply service, Idaho Power
is regulated by the IPUC and the Public Utility Commission of Oregon. As a public utility under
Part II of the Federal Power Act, Idaho Power has market-based rate authority for wholesale energy
sales under its FERC tariff and provides transmission services under its FERC-approved Open
Access Transmi ssion Tariff.
Idaho Power is subject to the provisions of PURPA, as implemented by the rules and
regulations of the IPUC and FERC. Pursuant to its PURPA obligations, Idaho Power has entered
DEFENDANT.TNTERVENOR IDAHO POWER COMPANY'S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE. 5
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into IPUC-approved power purohase agreements with numerous QFs2 for the output from those
projects at avoided cost rates.3
3. Facts Regarding Plaintiffs' QF Applications
Over an approximately two-week period in late January and early February All7,Idaho
Power received five applications from proposed battery storage QFs seeking PURPA Energy Sales
Agreements ("ESAs"), for a total of 148 MW.4 (Walker Decl., Exs. 1-4.5) Each proposed battery
storage facility submitted a FERC Form 556 self-certification of QF status to Idaho Power,
purporting to be a QF, independent of its generation source. (See id.) As part of the required
Schedule 73 applications,6 each proposed battery facility also submitted a generation output
profile, on an hourly basis, for all 8,760 hours in a year. (/d ) Each generation profile is nearly
identical, and generally matches the shape, timing and output of a solar generation profile. (/d.)
The four battery storage facilities proposed by Plaintiffs are located at the same site and, while
listed under separate shell companies, were submitted by a single developer - the same developer
that had previously submitted Schedule 73 applications and requests for ESAs for the four
2 As of December 3l,2A17,Idaho Power had t32 active contracts with PURPA QFs that provide
approximately 1,143 megawatts ("MW') of generation to Idatro Power's system - consisting of
approximately 627 MW of wind, 147 MW of hydro,34 MW of biomass,2l MW of cogeneration
and 314 MW of solar. Idaho Power's minimum total system load is approximately 1,100 MW,
and a record peak load for the entire service territory is approximately 3,400 MW. PURPA
generation has typically represented approximately I 9 percent of Idaho Power's generation and32
percent of generation cost.
3 Idaho Power customers have made over $1.9 billion of historical payments to PURPA QFs under
contract, and Idaho Power's current contractual obligations for future payments on existing
contracts is approximately an additional $3.4 billion.
a Four of these five proposed battery storage projects are from Plaintiffs, which total 128 MW.
s Citations to the "Walker Decl." are to the Declaration of Donovan E. \Malker filed concurrently
herewith.
6 Idaho Power's IPUC Tariffschedule 73, Cogeneration and Small Power Production Schedule -
Idaho, sets forth the application and contracting process and procedures by which QFs are required
to request PURPA contracts with Idaho Power. Schedule 73 is attached to the Walker Decl. as
Exhibit 6.
DEFENDANT-INTERVENOR IDAHO POWER COMPANY' S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE- 6
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proposed 20 MW Jackpot Solar facilities which were the subject of the IPUC's final Order No.
33667 in Case No. IPC-E-16-21. (Id., Exs. 1-5.) Plaintiffs' proposed projects identifu the
substation for the Jackpot Solar interconnection adjacent to their project location on the location
map they submitted with their applications. (/d,, Ex. 5.) In their individual Schedule 73
applications, each ofthe proposed battery storage facilities requested published avoided cost rates,
Rate Option 4, Non-Levelized Non-Fueled Rates, and a 20-year contract, (/d., Exs. 1-4.)
Idaho Power responded to Plaintiffs' four proposed facilities within Schedule 73's required
lO-business day response time with a letter dated February 9,2A17. (1d., Ex. 7.) Idaho Power
notified Plaintiffs' counsel that the applications were not completeo identified several deficiencies
in the Schedule 73 applications and stated that "it does not appear that your proposed projects
qualifu for Rate 4 Option - Non-Legalized Non-Fueled Rates and a twenty (20) year contract
term." (1d.) Plaintiffs' counsel responded by letter dated February 10, 2017, purporting to address
the deficiencies in Plaintiffs' applications and demanding that Idaho Power proffer 2D-year,
published avoided cost rates for the proposed battery storage projects. (1d.,8x.8.) By letter dated
February 27, 2017, ldaho Power responded as to all four of Plaintiffs' proposed battery storage
facilities, stating that it did not agree that they were eligible for published rates and 20-year
contracts and notiffing Plaintiffs' counsel that it had filed a Petition for Declaratory Order
("Petition") with the IPUC that same day. (1d., Ex. 9.)
4. Facts Regarding the Underlying Administrative Actions and Orders
On February 27,2017,Idaho Power filed its Petition with the IPUC in which it asked the
IPUC for a determination of Plaintiffs' proposed battery storage projects' eligibility for published
avoided cost rates and the associated contractual terms and conditions. (Id.,Ex. 10.) In its Petition,
Idaho Power argued that Plaintiffs' proposed facilities' eligibility for standard/published rates
DEFENDANT-INTERVENOR IDAHO POWER COMPANY' S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE- 7
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should be limited to the l00kW available to solar QFs, based upon the facilities' fuel source. (/d.)
Idaho Power did not dispute Plaintiffs' QF self-certification of the proposed battery storage
facilities and asked the IPUC to assume the QF self-certifications to be valid, without prejudice to
Idaho Power's ability to separately challenge such self-certifications before FERC, the proper
jurisdictional authority to determine QF status. Qd. at6.)
On March 23,20t7, the IPUC issued Notice of Idaho Power's Petition and established
comment deadlines for the developers, IPUC Staff, utilities and any other interested person. On
July 13, 2017, the IPUC issued Order No. 33785, in which it found Plaintiffs' proposed projects
to be eligible for published avoided cost rates up to the 100 kW maximum capacity size. (ld.,Ex.
11, at pp. 12-13.) The IPUC found that because the proposed battery storage facilities' ultimate
primary energy source was solar, the proposed battery storage facilities larger than 100 kW were
not eligible for standard/published avoided cost rates, and were instead entitled to negotiate two-
year PURPA contracts that use Idaho's Integrated Resource Plan ("IRP")-based avoided cost
methodology, identical to wind and solar QFs. (/d atp.12.)
On August 3,2017, Plaintiffs filed a Petition for Reconsideration of the IPUC's Order No.
33785. The only basis for error that Plaintiffs argued in their Petition for Reconsideration was that
the IPUC improperly ruled upon and determined the QF status of the proposed battery storage
facilities. On August 29,2077,the IPUC issued OrderNo. 33858, denying Plaintiffs' Petition for
Reconsideration. (1d., Ex. 12.) In OrderNo. 33858, the IPUC stated in pertinent part as follows:
[Plaintiffs] assert[] that, contrary to Indep. Energt Producers, we
determined the QF status of battery storage facilities in the Final
Order. We did not. [Plaintiffs'] mischaracterization of our Final
Order is a frivolous effort to contrive a legal basis for
reconsideration.
(Id. atp.3.)
DEFENDANT.INTERVENOR IDAHO POWER COMPANY' S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE- 8
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Plaintiffs had42 days from the date of the IPUC's OrderNo.33858 to file aNotice of
Appeal with the Idaho Supreme Court under Idaho Code $ 6l-627 and Idaho Appellate Rule 14(b).
Plaintiffs failed to timely file an appeal and, as such, the IPUC's decision became final and
conclusive. Thereafter, on December 14, 2017, nearly four months after the time within which
Plaintiffs were perrnitted to file an appeal of the IPUC's decision, they filed a Petition for
Declaratory Order and Petition for Enforcement Pursuant to Section 210(h) of the Public Utility
Regulatory Policies Act of 1978 with FERC. On February 15, 2018, FERC issued a Notice of
Intent Not to Act, in which it declined to initiate an enforcement action pursuant to Section
210(hX2XA) of PURPA as requested by Plaintiffs.
In light of FERC's refusal to act, on May 30, 2018, Plaintiffs commenced the instant
lawsuit against the IPUC by filing their Complaint for Violation of the Federal Power Act, the
Public Utilities Regulatory Policies Act of 1978, and Federal Energy Regulatory Commission
Regulations. (Dkt. l.) Two days later, on June 1,2018, Plaintiffs filed their First Amended
Complaint in which they substituted three Commissions of the IPUC in as party defendants. (Dkt.
2.) In their operative complaint, Plaintiffs identiff their action as one "seeking ir{unctive and other
appropriate relief against the Defendants for usurping the exclusive authority of [FERC] to classiff
[QFs] under [PURPA]." (ld. at !f 6.) Thus, as they did before the IPUC and FERC, Plaintiffs
continue to argue that, in making its ruling as to the rates and contract terms that Plaintiffs are
eligible for with respect to their proposed battery storage facilities, the IPUC improperly
determined whether Plaintiffs' facilities qualify as QFs. To address this allegedly erroneous action
by the IPUC, Plaintifls ask this Court for, among other things, declaratory and injunctive relief
directing the IPUC to (l) "implement PURPA in a lawful manner by recognizing the QF status of
energy storage QFs as distinct from their energy input (source);" and (2) "require the utilities under
DEFENDANT-INTERVENOR TDAHO POWER COMPANY' S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE.9
Case l-:18-cv-00236-REB Document 7-1 Filed 07/03/L8 Page 10 of 19
their jurisdiction to afford energy storage QFs all rights and privileges afforded to 'all other' QFs
- other than wind and solar QFs." (Dkt. 2, tl'!|60, 61.) In effect, Plaintiffs ask this Court to find
that the IPUC's orders and/or decisions that it rendered in response to Idaho Power's Petition are
eroneous and that, instead of being limited to two-year contracts that use Idaho's IRP-based
avoided cost methodology, they are entitled to the published avoided cost rates and 20-year
contracts that they sought in their January 2017 applications to Idaho Power.
ARGUMENT
l. Idaho Power Should Be Permitted to Intervene as of Right
Under Rule 24(a)(2), "[o]n timely motion, the court must permit anyone to intervene
who...claims an interest relating to the property or transaction that is the subject of the action, and
is so situated that disposing of the action may as a practical matter impair or impede the movant's
ability to protect its interest, unless existing parties adequately represent that interest." Fed. R.
Civ. P. 2a@)Q). An applicant seeking to intervene as of right under Rule 24(a)(2) must satisfu the
following four requirements: (1) the motion to intervene is timely; (2) the applicant has a
significant protectable interest relating to the property or transaction that is the subject of the
action; (3) the disposition of the action may, as a practical matter, impair or impede the applicant's
ability to protect its interest; and (4) the existing parties may not adequately represent the
applicant's interest. Citizensfor Balanced Use v, Montana lVilderness Ass'n,647 F.3d893,897
(9th Cir. 201 l). In evaluating whether intervention is appropriats, "courts are guided primarily by
practical and equitable considerations, and the requirements for intervention are broadly
interpreted in favor of intervention." US. v. Alisal lYater Corp.,370 F.3d 915,919 (9th Cir. 2004).
As discussed below, Idaho Power can satis$ each of these four requirements and, as such,
it should be permitted to intervene in this matter as of right.
DEFENDANT-INTERVENOR TDAHO POWER COMPANY'S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE- 10
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A. Idaho Power's Motion is Timely
Whether a motion to intervene is timely is determined by the totality of the circumstances
facing the potential intervenor, with a focus on the following three factors: (l) the stage of the
proceeding at which the applicant seeks to intervene; (2) the prejudice to other parties; and (3) the
reason for and lenglh of the delay. Smithv. Los AnSells UntJied School Dtst.,830 F.3d 843,854
(9th Cir. 2016). With respect to the prejudice element, which is the most important consideration
in determining whether a motion is timely, the only prejudice that is relevant is that which flows
from aprospective intervenor's delay in seeking intervention. Id. at857-58.
Here, Idaho Power's motion is undeniably timely as it was filed in the very early and
beginning stages of this litigation, before anything of substance has yet taken place, including any
discovery, law and motion work or substantive rulings. E.g., Citizens for Balanced Use,647 F.3d
at 897 (motion to intervene was timely when it was filed less than three months after the complaint
was filed and less than two weeks after the defendant filed its answer); Nw. Forest Res. Council v.
Gliclonan, 32 F.3d 825,836-37 (9th Cir. 1996) (motion to intervene timely when filed before any
proceedings had taken place or any substantive rulings had been made). Specifically, Idaho
Power's motion was filed a mere thirty-rwo (32) days after Plaintiffs filed their operative First
Amended Complaint and only eight (8) days after the IPUC filed its Answer thereto. In light of
Idaho Power's prompt filing of its motion, none of the parties in this matter will suffer any
prejudice from granting Idaho Power's requested intervention, nor would its intervention cause
any disruption or delay in the proceedings. Eg., id. As such, ldaho Power's motion is timely.
B. Idaho Power Has a Significant Protectable Interest Relating to the
Transaction That is the Subject of the Lawsuit
A prospective intervenor has a "significant protectable interest" in an action "if ( I ) it asserls
an interest that is protected under some law, and (2) there is a 'relationship' between its legally
DEFENDANT.INTERVENOR IDAHO POWER COMPANY' S MEMORANDUM IN
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protected interest and the plaintiff s claims." Donnelly v. Gliclonan, 159 F.3d 405, 409 (9th Cir.
1 998); also Citizens for Balanced Use, 647 F ,3d at 897; Nw. Forest Res. Council, 82 P .3d at 837 .
A non-speculative, economic interest is sufficient to support a right of intervention if it is concrete
and related to the underlying subject matter of the action. Alisal Water Corp.,370 F.3d at919-
As for the "relationship" requirement, this is satisfied if the resolution of the plaintiffs claims will
actually afflect the applicant. Donnelly, 159 F.3d at 410. Stated differently, an applicant "has a
suffrcient interest for intervention purposes if it will suffer a practical impairment of its interests
as a result of the pending litigation." California ex rel. Loclryer v. U.S., 450 F.3d 436, 441 (gth
Cir. 2006). In cases involving requested injunctive relief, a third party intervenor demonstrates a
"significantly protectable interest" when "the injunctive relief sought by the plaintiffs will have
direct, immediate, and harmful effects upon a third party's tegally protectable interests." Sw. Ctr.
for Biological Diversity v. Berg,268 F.3d 810, 818 (9th Cir. 2001).
In this case, Idaho Power has the requisite "significant protectable interest." As discussed
above in Sections 3 and 4 of the Factual and Procedural Background, the IPUC's orders that are at
issue in this lawsuit revolve around contracts that Plaintiffs seek to enter into with ldaho Power.
More specifically, Plaintiffs applied for and argue that, under PURPA, they are entifled to 20-year
contracts with Idaho Power using published avoided cost rates. (See e.g., Walker Decl., Exs. 1-4,
7-12;Dkt.2.) The IPUC disagreed and determined that Plaintiffs are limited to two-year contracts
that use Idaho's lRP-based avoided cost methodology. (/d )
If this Court agrees with Plaintiffs and issues the requested declaratory relief and/or
injunction, the terms under which Idaho Power must contract with Plaintiffs will be significantly
altered. Under PURPA and FERC's regulations, ldaho Power must purchase "any energy and
capacity which is made available [directly or indirectly] from a [QF]" at rates that comply with
DEFENDANT-INTERVENOR IDAHO POWER COMPANY'S MEMORANDUM IN
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FERC's regulations. 18 C.F.R. $ 292.303(a); 16 U.S.C. $ 824a-3(a)(2). The rates and contract
terms that the IPUC determined applied to Plaintiffs' proposed battery storage facilities are,
according to Plaintiffs, "less favorable" and "uneconomic" to them. (Dkt. 2, flf 10, I l.) Thus, on
the flip side, if the Court agrees with Plaintiffs, the contracts that Idaho Power is required by.law
to enter into with Plaintiffs will be much less favorable to Idaho Power, both in terms of the
duration of the subject contracts and in terms of the rates applicable thereto. Consequently, ldaho
Power has a "significant protectable interest." See e.g., Sierra Club v. U.S. Envtl. Prot. Agency,
995 F.2d 1478, 1485-86 (9th Cir. 1993) (the City of Phoenix had significant protectable interest in
a case brought by the Sierra Club against the EPA under the Clean Water Act because, if the Siena
Club received the declaratory and iqjunctive relief sought, the EPA would have to change the terms
of permits it issued to the City of Phoenix for two of its wastewater treatment plants).
C. The Disposition of the Lawsuit May, as a Practical Matter, Impair or
Impede Idaho Power's Ability to Protect Its Interest
"If an absentee would be substantially affected in a practical sense by the determination
made in an action, he should, as a general rule, be entitled to intervene...," Cttizensfor Balanced
Use,647 F.3d at 898 (quoting Rule 24 advisory committee note to 1966 amendment); see also Sw.
Ctr. for Biological Diverstty,268 F.3d at 822 ("We follow the guidance of Rule 24 advisory
committee notes...."). As discussed above, the outcome of this lawsuit, whether it be to grant or
deny Plaintiffs' requested relief, will both legally and practically affect Idaho Power because that
disposition will affect the terms of the contracts that Idaho Power must enter into with Plaintiffs
for the provision of energy. As such, this element is satisfied.
DEFENDANT.INTERVENOR IDAHO POWER COMPANY' S MEMORANDUM TN
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D.The Existing Parties May Not Adequately Represent Idaho Power's
lnterest
Courts consider three factors in determining whether a prospective intervenor's interests
will be adequately protected by an existing party, including (1) whether the interest of a present
party is such that it will undoubtedly make all of the intervenor's arguments; (2) whether the
present party is capable and willing to make such arguments; and (3) whether the prospective
intervenor would offer any necessary elements to the proceedings that other parties would neglect.
Sw. Ctr. for Biological Diversity,268 F3d at 822. "[T]he burden of showing inadequacy is
ominimal,' and the applicant need only show that representation of its interests by existing parties
'may be' inadequate." Id. at 823; also Citizens for Balanced Use, 647 F.3d at 900 (noting that
"intervention of right does not require an absolute certainty that a party's interests will be impaired
or that existing parties will not adequately represent its interests," only that "the existing parties
may not adequately protect their interests"). In assessing this element, "the focus should be on
the 'subject of the action,' not just the particular issues before the court at the time of the motion."
Sw. Ctr. for Biological Diversity,268 F.3d at 823. Inadequate representation is found where the
prospective intervenor and an existing party do not have sufficiently congruent interests. ^Id Thus,
where an existing party cannot be expected to successfully safeguard or represent an applicant's
interests, where the priorities of the existing party and applicant diverge or where the applicant is
likely to offer important elements to the proceedings that the existing parties would likely neglect,
"sufficient doubt about the adequacy of representation" is established, thereby waranting
intervention. Id. at 823-24.
Here, the IPUC may not adequately represent Idaho Power's interests. For example, as the
pleadings and orders from the underlying IPUC matter show, the argument and/or analysis
engaged in by the IPUC and Idaho Power differ quite signif,rcantly. (See e.g., Walker Decl., Exs.
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10-12.) Idaho Power's Petition, on the one hand, provides and focuses on an in-depth factual
analysis of Plaintiffs' applications and how, based upon historical evidence that tends to show
Plaintiffs' attempts to improperly circumvent the IPUC's rules implementing PURPA "to the
direct detriment of ldaho Power customers," Plaintiffs are not entitled to Z}-year contracts and
published avoided cost rates for their proposed battery storage facilities. (Id.,Ex. 10.) In contrast,
with the exception of one factual issue, i.e., the primary energy source behind the battery storage
facilities, the analysis of the IPUC in its two orders focuses entirely on the legal interpretation of
certain statutes and cases. (See id., Exs. 11, 12.) Thus, at least for purposes of its decision, the
IPUC appears to have not addressed the additional factual arguments that Idaho Power made in
rendering its decision. As a result, it is reasonable to assume that, in the instant lawsuit, the IPUC
will again focus on legal precedent to support its position that the orders at issue are consistent
with applicable law and will not pursue or advance any of the factual underpinnings or arguments
that Idaho Power believes are highly relevant.
Additionally, unlike Idaho Power, the IPUC does not have an economic interest in this
matter and is primarily focused on ensuring a utility's compliance with the applicable regulations.
See http://www.Ituc,tdaho.sol,/about/about.html ("The Commission regulates investor-owned or
privately-owned utilities that provide gas, water, electricity or some telephone services for profit.")
Idaho Power, on the other hand, is a pub[c[y traded, for profit business, that, while concerned with
legal compliance, is also necessarily concerned with successfully running a business and protecting
the interests of its customers and shareholders. See httns://www.idahopower.com/abgut-
us/companlt-information/company--facts/ ("Idaho Power is the chief operating subsidiary of
holding company IDACORP [nc., traded on the New York Stock Exchange under the ticker
symbol IDA.") These significantly different interests will unequivocally affect the arguments the
DEFENDANT-INTERVENOR IDAHO POWER COMPANY'S MEMORANDUM IN
SUPPORT OF ITS MOTION TO TNTERVENE- 15
Case 1:18-cv-00236-REB Document 7-1 Filed 07/03/L8 Page 16 of L9
parties make and the stakes at issue for each of them. Consequently, because Idaho Power will
offer important elements and arguments to this lawsuit that the IPUC will likely not advance, and
the IPUC cannot be expected to successfully represent ldaho Power's interests, there is a doubt
under this standard for intervention about the IPUC's adequacy of representation for ldaho Power.
For this reason and because Idaho Power can satisff the other requirements for intervention as of
right, its motion should be granted.
2. Idaho Power Should Be Granted Permission to Intervene
A court may grant permissive intervention where the movant shows (l) independent
grounds for jurisdiction; (2) the motion is timely; and (3) the movant's claim or defense, and the
main action, have a question of law or a question of fact in common . Nw. Forest Resource Council,
82 F.3d at839. Even if a prospective intervenor satisfies these requirements, the district court has
discretion to deny permissive intervention and, in exercising that discretion, the district court "must
consider whether intervention will unduly delay the main action or will unfairly prejudice the
existing parties.'o Donnelly,159 F.3d at412. Not only can Idaho Power satisfu all of the elements
it must satisfr for permissive intervention, but granting its requested intervention will not result in
any undue delay or unfair prejudice to the existing parties.
A. Idaho Power Does Not Need an Independent Grounds for Jurisdiction
The independent grounds for jurisdiction requirement stems from the ooconcern that
intervention might be used to enlarge inappropriately the jurisdiction of the district courts."
Freedom from Religion Found. v. Geithner, 644 F.3d 836, 843 (9th Cir. 20ll). As stated by the
Ninth Circuit:
This concem manifests itself most concretely in diversity cases
where proposed intervenors seek to use permissive intervention to
gain a federal forum for state-law claims over which the district
court would not, otherwise, have jurisdiction. (Citation omitted.)
DEFENDANT-INTERVENOR IDAHO POWER COMPANY' S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE- I6
Case L:18-cv-00236-REB Document 7-1 Filed 07/03/1-8 Page 1-7 of 19
The j urisdictional requirement also prevents permissive intervention
from being used to destroy complete diversity in state-law actions.
Id. These concerns, however, are not present in federal question cases, unless the prospective
intervenor seeks to bring new state law claims. Id. at 844. Consequently, "the independent
jurisdictional grounds requirement does not apply to proposed intervenors in federal-question
cases when the proposed intervenor is not raising new claims." Id
The instant case is not a diversity case; instead, it is a federal question case t}tat arises under
Section 210(hX2XB) of PURPA, l6 U.S.C. $ 82aa-3(h)(2xB). (Dkt.2,112,4.) Moreover,Idaho
Power seeks permission to intervene only as a defendant and does not intend to raise any new
claims. As such, Idaho Power does not need to establish an independent ground for jurisdiction.
B. Idaho Power's Motion is Timely
The timeliness element of permissive intervention is based upon the identical three factors
used to determine timeliness under intervention as of right. League of Unrted Latin Am. Citizens
v. Wilson, 13 I F.3d 1297, 1308 (9th Cir. 1997). Thus, for the reasons discussed above in Section
l.A, supra,Idaho Power has satisfied the timeliness element for permissive intervention.
C. Idaho Power's Claim or Defense and the Main Action Have Questions
of Law and Fact in Common
As discussed above in Sections l.B and 1.C, supra,Idaho Power's claims or defenses
revolve around the facts and law already at issue in the instant case. Specifically, in the instant
action Plaintiffs argue that, contrary to the IPUC's orders, they are entitled to published avoided
cost rates and 20-year contracts with ldaho Power with respect to their four proposed battery
storage projects. (.9ee Dkt. 2.) Idaho Power, in tum, seeks to intervene to address and counter
these very allegations. Thus, Idaho Power's claims and/or defenses and those in the instant action
have questions of law and fact in common.
DEFENDANT-INTERVENOR IDAHO POWER COMPANY' S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE' 17
Case l-:18-cv-00236-REB Document 7-1 Filed 07/03/18 Page 18 of 1-9
D. Idaho Power's Intervention Wilt Not Result in Any Undue Delay or
Unfair Prejudice
As already noted, Idaho Power does not seek to add any claims or issues to those already
in this case and, instead, merely seeks to contest the claims already asserted by Plaintiffs. As such,
Idaho Power's intervention will not complicate or unduly delay resolution of this matter, nor will
it cause any unfair prejudice to any of the existing parties. See Employee Stffing Seryices, Inc. v.
Aubry,20 F.3d 1038, 1042 (9th Cir. 1994) (court did not commit error by granting permissive
intervention when the intervenor "added no claims or issues to those already in the case, and did
not complicate or delay resolution beyond the need ofplaintiffs to respond to additional briefing").
Therefore, because Idaho Power can satisfy all of the requirements for permissive intervention, its
motion should be granted.
CONCTUSION
Based upon the foregoing, Idaho Power respectfully requests that this Court grant its
motion and allow it to intervene, either as a matter of right or with this Court's permission.
DATED this 3rd day of July,2018.
ANDERSEN SCHWARTZMAN
WOODARD BRAILSFORD, PLLC
lsl Steven B. Andersen
Steven B. Andersen
Attorneys for Defendant-Intervenor ldaho Power Company
DEFENDANT-INTERVENOR IDAHO POWER COMPANY'S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE- 18
Case 1:18-cv-00236-REB Document 7-1 Filed 07/03/18 Page 19 of 19
CERTIT'ICATE O[' SERVICE
I hereby certiff that on this 3rd day of July,2018, I caused a true and correct copy of the
foregoing document to be electronically filed with the Clerk of the Court using the CMIECF
system, which sent aNotice of Electronic Filing to the following persons:
Peter J. Richardson
Robert C. Huntley
Brandon Karpen
ScottZ,anzig
peter@richardsonadams. com
rhuntely@hunll eylaw.com
brandon.karpen@,puc. idaho. gov
scott.zanzi g@ag. idaho. gov
lsl Steven B. A
Steven B. Andersen
DEFENDANT-INTERVENOR IDAHO POWER COMPANY'S MEMORANDUM IN
SUPPORT OF ITS MOTION TO INTERVENE- 19