20181026Exhibit 11 Part 2 40-7.pdf

Because the ldaho Commission has no jurisdiction to adjudicate the Franklin energy storage
facilities' "eligibility under PURPA," the Commission's decision is unlawful as it is not in
conformity with federal law granting to FERC the exclusive jurisdiction to determine a QF's
"eligibility under PURPA."
In sum, having determined, illegally, that the Franklin energy storage QFs are not eligible
energy storage PURPA resources, the Idaho Commission then made the determination (also
illegally) that they are actually solar QFs. According to the Idaho Commission, because solar
QFs are not entitled to established Idaho Commission rates and contract terms that are available
for non-solar and non-wind QFs, Idaho Power's Petition for Declaratory Rule must be granted.
However, the ldaho Commission has no authority to make such determinations - it therefore
should deny Idaho Power's Petition in its order on reconsideration.
III
THE IDAHO COMMISSION'S ANALYSIS, [N ADDITION
TO BEING ILLEGAL, IS SERIOUSLY FLAWED
Not deterred by federal preemption of its refusal to'presume'that energy storage QFs are
legitimate QFs in their own right, but only QFs based on the source of the energy input to a
storage facility, the Idaho Commission attempted to reconcile its analysis with FERC precedent
dealing with storage facility QFs:
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 Power'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
Franklin Energy Storage Projects'
Petition for Reconsideration
IPC-E-17-01
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Case 1:18-cv-00236-REB Document 40-7 Filed 10/26/18 Page 1 of 5
energy storage facilities are not per se renewable resources/small power production
facilities under PURPA. r2
Of course, it is axiomatic that there is no such thing as "per se renewable resources/small power
production facilities under PURPA." By definition, all QFs must, to varying degrees, meet
specific standards in order to achieve QF status. Those standards include specific requirments as
to fuel efficiency restrictions, fossil fuel use restrictions, ownership limitations, and size
limitations. No resource is privileged enough to claim to be a per se QF under PURPA and the
Franklin energy storage facilities made no such claim - which highlights significant confusion in
the Idaho Commission's order.
Perhaps the Idaho Commission's confusion stems from its fundamental misreading of
FERC's Luz decision.13 In LuzFERC determined that an energy storage QF must, like all other
small power production QFs, comply with the fuel use standards under PURPA.14 Because the
Luz energy storage project was being energized with undifferentiated electricity purchased from
the 'grid' it was unable to show that its use of fossil fuels was in compliance with FERC fossil
fuel use restrictions. Hence FERC declared that although energy storage facilities are distinct
QFs they:
Are subject to the same fuel use limitations as all other small power production facilities.
Fossil fuel used to produce 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 the 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.ls
12 Order No. 33785 at p. I 1.
t3 Luz Development and Finance Corporation 5l FERC fl61,078.la Fossil fuel use is limited for small power production facilities to only those minimum amounts
required for "ignition, startup, testing, flame stabilization and control uses.. ." Id. atp.6.
ts Id.
Franklin Energy Storage Projects'
Petition for Reconsideration
rPC-E-17-01
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Case 1:18-cv-00236-REB Document 40-7 Filed 10/26/18 Page 2 of 5
The Idaho Commission appropriately observed that, according to FERC's Luz decision that:
FERC confirmed that energy storage facilities are not renewable resources/small power
production facilities per se. Id. Electric input is required to produce electric output from
a storage facility.16 For this reason, in order to qualify as a PURPA resource, the
primary energy source behind the battery storage must be considered.
Significantly, FERC did not rule that electric input to an energy storage QF is prohibited. Nor
did it rule that such electric input casts a cloud as to the distinct QF status of such a facility.
Rather, FERC looks to the primary energy source behind the energy storage system to determine
if the energy storage system meets the fuel use criteria of a Qualifying Facility. Critically
overlooked by the Idaho Commission is the fact that FERC does NOT consider the "primary
energy source behind the battery" to be the QF. FERC only looks at the primary energy source
behind the energy storagte system to confirm that the energy storage system is, itself, a QF. This
is because FERC unequivocally and explicitly ruled that energy storage facilities are, despite the
Idaho Commission's conclusion, QFs in their own right:
In sum, enerqy storage facilities such as the proposed Luz battery svstem are a renewable
resource for purposes of OF 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.lT
Here, of course, the Franklin energy storage facilities are also a renewable resource for purposes
of QF certification. The significant difference between the Franklin energy storage facilities and
the energy storage facilities at issue in Luz is that the Franklin energy storage facilities have, in
fact, demonstrated their compliance with FERC's energy input requirements by using no 'grid'
l6 Of course, FERC made no such finding regarding energy storage facilities, not all of which
require electrical input.
t7 Luz supra at p. 10.
Franklin Energy Storage Projects'
Petition for Reconsideration
IPC-E-17-01
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Case 1:18-cv-00236-REB Document 40-7 Filed 10/26/18 Page 3 of 5
power and no fossil fuel input. However, because the Idaho Commission is bound by the
certified status of the Franklin energy storage QFs, it is beyond the jurisdictional reach of the
Idaho Commission to even make such an inquiry. As the Ninth Circuit Court of Appeals
instructed:
The state's authority to implement section 210 [PURPA] is admittedly broad, but nothing
in the language of this section indicates that such authority includes the authority to make
QF determinations.l8
Idaho Power's Petition for Declaratory Order asked the Idaho Commission to do just that. And
the Idaho Commission obliged Idaho Power by illegally finding that energy storage facilities that
use solar power to charge the underlying storage devices are not energy storage QFs, but are
instead solar QFs. This distinction is, of course, convenient to Idaho Power in that such a
determination allows Idaho Power to avoid its Idaho Commission imposed obligation to non-
solar and non-wind QFs to offer twenty-year contracts at fixed rates.
IV
PRAYER FOR RELIEF
For the reasons stated above, and pursuant to the Idaho Commission's statutory
obligation to correct legal and factual errors in its final orders, the Franklin Energy Storage
Projects respectfully request the Commission issue its order on reconsideration reversing its final
order in this matter and denying Idaho Power's petition for declaratory relief.
WHEREFORE, the Franklin Energy Storage Projects respectfully request this
Commission issue its order on reconsideration as prayed for above.
tB Independent Energt Producers Ass'n, supra at p. 856.
Franklin Energy Storage Projects'
Petition for Reconsideration
IPC-E-17-01
l0
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t(,
RESPECTFULLY SUBMITTED this \) of Aupust 2017.
J ISB # 3195
Attorney for Franklin Energy Storage Projects
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have this 3'd day of August 2017, served the foregoing Petition for
Reconsideration in Docket No. IPC-E- I 7-01 upon all parties of record in this proceeding by
emailing a copy thereof and delivering a copy thereof in person:
Donovan Walker
Idaho Power Company
1221 West Idaho Street
Boise,Idaho
dwalker@ idahopower. com
dqckets (@ idaho po wer. co m
Commission Secretary
Idaho Public Utilities Commission
47 2 W est Washington Street
Boise, Idaho
D ianc.ho lt@,p uc. idaho-gav
By emailing a copy thereof:
Brian Lynch
Black Mesa Energy LLC
[e-mail]
David Bender
Earthjustice
dbender@art[i ustice. org
Ben Otto
Idaho Conservation League
botto ation.org
Franklin Energy Storage Projects'
Petition for Reconsideration
IPC-E-17-01
11
Daphne Haung
Idaho Public Utilities Commission
47 2 W est Washington Street
Boise, Idaho
daphne.hauns@ puc. idaho. eov
Case 1:18-cv-00236-REB Document 40-7 Filed 10/26/18 Page 5 of 5