20181026Memo in Support of Mtn 40-1.pdf

DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT
Steven B. Andersen (ISB 2618) [e-mail]
Wade L. Woodard (ISB 6312)
[e-mail] ANDERSEN SCHWARTZMAN WOODARD BRAILSFORD, PLLC 101 South Capitol Boulevard, Suite 1600
Boise, ID 83702-7720
Telephone: [phone] Facsimile: 208.342.4455 Donovan E. Walker (ISB 5921)
[e-mail] IDAHO POWER COMPANY 1221 West Idaho Street (83702) P. O. Box 70 Boise, ID 83707
Telephone: [phone]
Facsimile: 208.388.6936
Attorneys for Defendant-Intervenor Idaho Power Company
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO
FRANKLIN ENERGY STORAGE ONE, LLC, FRANKLIN ENERGY STORAGE
TWO, LLC, FRANKLIN ENERGY
STORAGE THREE, LLC, FRANKLIN ENERGY STORAGE FOUR, LLC, Plaintiffs,
vs.
PAUL KJELLANDER, KRISTINE RAPER and ERIC ANDERSON, in their official capacity as Commissioners of the IDAHO
PUBLIC UTILITIES COMMISSION,
Defendants, and,
IDAHO POWER COMPANY,
Defendant-Intervenor.
Case No.: 1:18-cv-00236-REB
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 1 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - i
TABLE OF CONTENTS
I. INTRODUCTION ........................................................................................................... 1
II. FACTUAL AND PROCERDURAL BACKGROUND .................................................. 1
A. Facts Regarding PURPA, FERC’s Regulations and the IPUC’s Implementation
Thereof ...................................................................................................................... 1
B. Facts Regarding Idaho Power ................................................................................... 5
C. Facts Regarding Plaintiffs’ QF Applications ............................................................ 5
D. Facts Regarding the Underlying Administrative Actions and Orders ...................... 6
III. ARGUMENT ................................................................................................................... 8
A. Standard Applicable to Rule 12(b)(1) Motions ........................................................ 8
B. Plaintiffs’ First Amended Complaint Must Be Dismissed Because it Constitutes
an “As-Applied” Challenge Over Which This Court Lacks Subject Matter
Jurisdiction .............................................................................................................. 10
C. Plaintiffs’ First Amended Complaint Must be Dismissed Because Plaintiffs Failed
to Timely Exhaust Their Administrative Remedies, Thereby Depriving This Court
of Jurisdiction.......................................................................................................... 13
IV. CONCLUSION .............................................................................................................. 15

Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 2 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - ii
TABLE OF AUTHORITIES
Cases
A.W. Brown Co., Inc. v. Idaho Power Co., 121 Idaho 812 (1992) ................................................. 3
Afton Energy, Inc. v. Idaho Power Co., 107 Idaho 781 (1984) ...................................................... 3
Allco Renewable Energy Ltd. v. Mass. Elec. Co., 875 F.3d 64 (1st Cir. 2017) .................... 1, 2, 10
Cal. Pub. Utils. Comm’n, 133 FERC ¶ 61,059 (2010) ............................................................... 2, 3
Empire Lumber Co. v. Wash. Water Power Co., 114 Idaho 191 (1987) ........................................ 3
Exelon Wind 1, L.L.C. v. Nelson, 766 F.3d 380 (5th Cir. 2014) ..................................... 1, 2, 10, 11
FERC v. Mississippi, 456 U.S. 742 (1982) ................................................................................. 1, 2
Greensboro Lumber Co. v. Georgia Power Co., 643 F.Supp. 1345 (N.D. Ga. 1986) ..... 11, 12, 13
Idaho Power Co. v. Idaho Pub. Utils. Comm’n, 155 Idaho 780 (2013) ..................................... 2, 3
Luz Dev. & Fin. Corp., 51 FERC ¶ 61,078 (1990) ......................................................................... 3
Makarova v. U.S., 201 F.3d 110 (2d Cir. 2000) ............................................................................. 8
Mass. Inst. of Tech. v. Mass. Dept. of Pub. Utils., 941 F.Supp. 233 (D. Mass. 1996) ........... 12, 13
Morrison v. Amway Corp., 323 F.3d 920 (11th Cir. 2003)............................................................. 9
N.Y. State Elec. & Gas Corp. v. Saranac Power Partners, LP, 117 F.Supp.2d 211 (N.D.N.Y.
2000) ............................................................................................................................. 13, 14, 15
Neal v. Harris, 100 Idaho 348 (1979) ........................................................................................... 14
Niagara Mohawk Power Corp. v. FERC, 306 F.3d 1264 (2d Cir. 2002) ..................................... 15
Portland Gen. Elec. Co. v. FERC, 854 F.3d 692 (D.C. Cir. 2017)................................................. 3
Power Res. Grp. v. Pub. Util. Comm’n of Tex., 422 F.3d 231 (5th Cir. 2005) ..................... 2, 3, 11
Power Res. Grp., Inc. v. Pub. Util. Comm’n, 73 S.W.3d 354 (Tex.App.-Austin 2002) ............... 11
Power Resource II, No. 1:03-CV-762-HLH, Dkt. No. 44 ............................................................ 11
Roche Prods., Inc., et al., 29 FERC ¶ 61,098 (1984) ................................................................... 11
Rosebud Enters., Inc. v. Idaho Pub. Utils. Comm’n, 128 Idaho 609 (1996) .................................. 4
Safe Air for Everyone v. Meyer, 373 F.3d 1035 (9th Cir. 2004) ................................................. 8, 9
Snow Mountain Pine Co. v. CP Nat’l Corp., 30 FERC ¶ 61,293 (1985) ..................................... 11
St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989) ......................................................... 9
Thompson v. McCombe, 99 F.3d 352 (9th Cir. 1996)..................................................................... 9
Thornhill Pub. Co., Inc. v. General Tel. & Electronics Corp., 594 F.2d 730 (9th Cir. 1979) ........ 9
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 3 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - iii
Wolfe v. Strankman, 392 F.3d 358 (9th Cir. 2004) ......................................................................... 9
Statutes
16 U.S.C. § 824a ........................................................................................................................... 13
16 U.S.C. § 824a-3(a)(1)................................................................................................................. 2
16 U.S.C. § 824a-3(a)(2)................................................................................................................. 2
16 U.S.C. § 824a-3(a) .......................................................................................................................
16 U.S.C. § 824a-3(b) ..................................................................................................................... 1
16 U.S.C. § 824a-3(b). .................................................................................................................... 2
16 U.S.C. § 824a-3(d) ..................................................................................................................... 2
16 U.S.C. § 824a-3(f) ................................................................................................................ 2, 10
16 U.S.C. § 824a-3(g) ................................................................................................................... 10
16 U.S.C. § 824a-3(g)(2) .............................................................................................................. 11
16 U.S.C. § 824a-3(h) ................................................................................................................... 10
16 U.S.C. § 824a-3(h)(2)(A) ......................................................................................................... 10
16 U.S.C. § 824a-3(h)(2)(B) ................................................................................................... 10, 15
18 C.F.R. § 292.101 ...................................................................................................................... 13
18 C.F.R. § 292.304(b)(2) ............................................................................................................... 2
18 C.F.R. § 292.304(c)(1) ........................................................................................................... 3, 4
18 C.F.R. § 292.304(c)(2) ........................................................................................................... 3, 4
18 C.F.R. § 292.304(c)(3)(ii) ...................................................................................................... 3, 4
18 C.F.R. § 292.304(e)(2)(iii) ......................................................................................................... 3
I.C. § 61-502 ................................................................................................................................... 3
I.C. § 61-503 ................................................................................................................................... 3
I.C. § 61-627 ................................................................................................................................... 7
Idaho Public Utilities Commission Orders
Order No. 32262 (2011) .................................................................................................................. 4
Order No. 32697 (2012) .................................................................................................................. 4
Order No. 33357 (2015) .................................................................................................................. 4

Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 4 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - iv

Rules
Fed. R. Civ. P. 12(b)(1)................................................................................................................... 8
I.A.R. 14(b). ........................................................................................................................ 7, 14, 15
I.A.R. 21 ........................................................................................................................................ 15

Other
Policy Statement Regarding the Commission's Enforcement Role Under Section 210 of the
Public Utility Regulatory Policies Act of 1978, 23 FERC § 61,304 (1983) ...................... 10, 12

Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 5 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 1
Defendant-Intervenor Idaho Power Company (“Idaho Power”), by and through its counsel
of record, hereby respectfully submits this Memorandum in Support of Motion to Dismiss
Plaintiffs’ First Amended Complaint.
I. INTRODUCTION
Plaintiffs’ entire case must be dismissed because this Court unequivocally lacks subject
matter jurisdiction. In particular, not only did Plaintiffs fail to timely exhaust their administrative
remedies as required prior to filing the instant lawsuit, but the claim they assert in their First
Amended Complaint with respect to the allegedly erroneous orders of the Idaho Public Utilities
Commission (“IPUC”) constitute an “as-applied” challenge over which state courts have exclusive
jurisdiction. Therefore, for the reasons discussed more fully below, Idaho Power’s motion must
be granted and Plaintiffs’ entire case must be dismissed.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. Facts Regarding PURPA, FERC’s Regulations and the IPUC’s Implementation Thereof
Congress enacted the Public Utility Regulatory Policies Act of 1978 (“PURPA”) “to reduce
the dependence of electric utilities on foreign oil and natural gas and to control consumer costs.”
Exelon Wind 1, L.L.C. v. Nelson, 766 F.3d 380, 384 (5th Cir. 2014); also FERC v. Mississippi, 456
U.S. 742, 745 (1982) (“Mississippi”). To accomplish these goals, PURPA directs the Federal
Energy Regulatory Commission (“FERC”) to promulgate rules mandating that electric utilities
purchase energy from cogeneration and small power production facilities, which are known as
QFs. Id.; also Allco Renewable Energy Ltd. v. Mass. Elec. Co., 875 F.3d 64, 67 (1st Cir. 2017);
16 U.S.C. § 824a-3(a), (b). Despite seeking to promote energy generation by QFs, Congress did
not intend to do so at the expense of American consumers and, as such, PURPA strikes a balance
between these two interests. Exelon, 766 F.3d at 384. For example, “PURPA requires utilities to
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 6 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 2
purchase power generated by [QFs], but also mandates that the rates that utilities pay for such
power ‘shall be just and reasonable to the electric consumers of the electric utility and in the public
interest.’” Id. (citing 16 U.S.C. § 824a-3(a)(2), (b)(1)). Additionally, the rates utilities are to pay
QFs for their power cannot exceed the “incremental cost to the electric utility of alternative electric
energy.” Allco, 875 F.3d at 67; 16 U.S.C. § 824a-3(b). PURPA defines “incremental cost” as “the
cost to the electric utility of the electric energy which, but for the purchase from such cogenerator
or small power producer, such utility would generate or purchase from another source.” 16 U.S.C.
§ 824a-3(d). In accordance with PURPA’s directive, “FERC promulgated regulations requiring
utilities to purchase electricity from QFs ‘at a rate equal to the utility’s full avoided cost.’” Allco,
875 F.3d at 67; 18 C.F.R. § 292.304(b)(2).
PURPA also requires state regulatory authorities to implement FERC’s rules. Mississippi,
456 U.S. at 751; also 16 U.S.C. § 824a-3(f). A state commission such as the IPUC can comply
with its implementation obligations by “issuing regulations, by resolving disputes on a case-by-
case basis, or by taking any other action reasonably designed to give effect to FERC’s rules.” Id.
FERC provides state agencies “great latitude in determining the manner of implementation of
[FERC’s] rules, provided that the manner chosen is reasonably designed to implement the
requirements” of FERC’s regulations. Exelon, 766 F.3d at 385. Given this substantial latitude,
FERC is “reluctant to second guess the state commission’s determinations.” Cal. Pub. Utils.
Comm’n, 133 FERC ¶ 61,059, at P 24 (2010) (“CPUC”).
Under PURPA and FERC’s regulations, states are responsible for regulating and
authorizing agreements under which a utility purchases energy from a QF, including
“determin[ing] the specific parameters” of any such agreement. Power Res. Grp. v. Pub. Util.
Comm’n of Tex., 422 F.3d 231, 238 (5th Cir. 2005); also Idaho Power Co. v. Idaho Pub. Utils.
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 7 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 3
Comm’n, 155 Idaho 780, 786-89 (2013). As part of this responsibility, states calculate the avoided
cost rates, determine if and when a legally enforceable obligation is established and determine the
length and terms of any agreement. Id.; also Portland Gen. Elec. Co. v. FERC, 854 F.3d 692, 695
(D.C. Cir. 2017); Afton Energy, Inc. v. Idaho Power Co., 107 Idaho 781, 785-86 (1984); 18 C.F.R.
§ 292.304(c)(1), (2). With respect to determining avoided cost rates, one factor to be considered
is “the terms of any contract including the duration of the obligation.” CPUC, 133 FERC ¶ 61,059,
at P 23; also 18 C.F.R. § 292.304(e)(2)(iii). Also, avoided cost rates may “differentiate among
qualifying facilities using various technologies on the basis of the supply characteristics of the
different technologies.” Id.; also 18 C.F.R. § 292.304(c)(3)(ii).
To date, FERC has only considered battery storage QFs in one decision, finding 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 energy is the primary energy source of the facility, it is necessary to look to the source of this energy as the ultimate primary energy source of the facility.

Luz Dev. & Fin. Corp., 51 FERC ¶ 61,078, at 61,171 (1990).
Idaho has implemented PURPA consistent with federal and state law. The IPUC has the
authority and is the appropriate state forum to establish avoided cost rates, to set
standard/published rate eligibility caps that exceed the 100 kilowatt (“kW”) minimum, to review
and approve contracts and to resolve disputes between QFs and electric utilities. I.C. §§ 61-502,
61-503; Idaho Power Co., 155 Idaho at 786-89; A.W. Brown Co., Inc. v. Idaho Power Co., 121
Idaho 812, 816 (1992); Empire Lumber Co. v. Wash. Water Power Co., 114 Idaho 191, 192 (1987);
Afton Energy, 107 Idaho at 785-86. The IPUC has implemented PURPA by issuing general
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 8 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 4
procedures and engaging in case-by-case analysis. Rosebud Enters., Inc. v. Idaho Pub. Utils.
Comm’n, 128 Idaho 609, 615 (1996).
Of relevance, FERC’s regulations require state commissions to set “standard rates for
purchases from [QFs] with a design capacity of 100 kilowatts or less,” and permit them to set
“standard rates for purchases from [QFs] with a design capacity of more than 100 kilowatts.” 18
C.F.R. § 292.304(c)(1), (2). Consistent with these regulations, the IPUC has established two
methods for calculating avoided cost rates that depend upon the QF’s size: (1) the surrogate
avoided resource (“SAR”) method; and (2) the integrated resource plan (“IRP”) method. See IPUC
Order No. 32697, pp. 7-8 (2012). Similarly consistent with FERC’s regulation that standard rates
“[m]ay differentiate among [QFs] using various technologies…,” 18 C.F.R. § 292.304(c)(3)(ii),
the IPUC has set the eligibility cap for wind and solar QFs to access published avoided cost rates
at 100 kilowatts (kW). IPUC Order No. 32697, p. 13 (2012). Published avoided cost rates are
available for QFs of all other resource types with a design capacity of up to 10 average megawatts
(aMW). Id. at pp. 7-8. The IPUC established these eligibility caps while investigating
“disaggregation” – the breaking up of one large project “into smaller projects ‘in order to obtain
published avoided cost rates that exceed a utility’s actual avoided cost’” – by solar and wind QFs.
IPUC Order No. 32262, p. 3 (2011).
As for the length of PURPA contracts, the IPUC has established 20-year terms for standard
published rate contracts. See IPUC Order No. 33357, pp. 1, 7 (2015). For non-standard, IRP-
based contracts, the IPUC found that a two-year term was reasonable, consistent with PURPA’s
intent and FERC’s regulations and appropriately balanced the competing interests of protecting
ratepayers and developing QF power generation. Id. at p. 25.

Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 9 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 5
B. Facts Regarding Idaho Power
Idaho Power is a vertically integrated electric utility engaged in the business of generating,
purchasing, transmitting and distributing electrical energy. Idaho Power is subject to the
provisions of PURPA, as implemented by the rules and regulations of the IPUC and FERC.
C. Facts Regarding Plaintiffs’ QF Applications
In January 2017, Plaintiffs each filed a Form 556, entitled “Certification of Qualifying
Facility (QF) Status for a Small Power Production or Cogeneration Facility” (“Form 556”), with
FERC, in which they each self-certified themselves to be battery storage QFs. (Dkt. 37, Stipulated
Fact [“SF”] 4; Exs. 1-4.) Pursuant to the Form 556s, each of Plaintiffs’ battery storage facilities
has a nameplate design capacity of 32,000 kW, is located on the same site and is being developed
by Alternative Power Development, LLC. (Dkt. 37, SF 1; Exs. 1-5.) Additionally, the primary
energy source for each battery storage facility is solar. (Id.) Specifically, not only does each QF’s
hourly generation output profile generally match the shape, timing and output of a solar generation
profile, (Walker Decl., ¶ 17; Exs. 1-4, Generation Profile), but Plaintiffs’ respective Form 556s
describe each facility’s power source as follows:
The energy storage system that comprises the energy storage Qualifying Facility is designed to, and will, receive 100% of its
energy input from a combination of renewable energy sources such
as wind, solar, biogas, biomas, etc. The current initial design utilizes solar photovoltaic (PV) modules mounted to single-axis trackers to provide the electric energy input to the Qualifying Facility’s battery storage system. The PV modules are planned to
be connected in series/parallel combinations to solar inverters,
rated approximately 2.5 MWac each, (subject to change). (Exs. 1-4, Form 556, p. 9, emphasis added.)
In late January 2017, Plaintiffs submitted to Idaho Power their respective Schedule 73
Qualifying Facility Energy Sales Agreement Request (“Schedule 73”), along with their Form 556
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 10 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 6
and a generation output profile. (Dkt. 37, SF 5; Exs. 1-4.) In their Schedule 73 applications,
Plaintiffs each requested published avoided cost rates and a 20-year contract from Idaho Power.
(Id.) Idaho Power responded to Plaintiffs’ applications with a letter dated February 9, 2017. (Dkt.
37, SF 6; Ex. 6.) In that letter, Idaho Power notified Plaintiffs’ counsel that the applications were
incomplete, identified several deficiencies and stated that “it does not appear that your proposed
projects qualify for Rate 4 Option – Non-Levelized Non-Fueled Rates and a twenty (20) year
contract term.” (Ex. 6.) Plaintiffs’ counsel responded by letter dated February 10, 2017,
purporting to address the deficiencies in Plaintiffs’ applications and demanding that Idaho Power
proffer 20-year, published avoided cost rates for each facility. (Dkt. 37, SF 7; Ex. 7.) By letter
dated February 27, 2017, Idaho Power responded, stating that it did not agree that Plaintiffs were
eligible for published rates and 20-year contracts and notifying Plaintiffs’ counsel that it had filed
its Petition with the IPUC that same day. (Dkt. 37, SF 8; Ex. 8.)
D. Facts Regarding the Underlying Administrative Actions and Orders
On February 27, 2017, Idaho Power filed its Petition, in which it asked the IPUC for a
determination of Plaintiffs’ proposed battery storage projects’ eligibility for published avoided
cost rates and 20-year contract terms. (Dkt. 37, SF 9; Ex. 9.) In its Petition, Idaho Power argued
that Plaintiffs’ proposed facilities’ eligibility for published rates should be limited to the 100kW
available to solar QFs based upon the facilities’ fuel source. (Ex. 9.) Idaho Power did not dispute
Plaintiffs’ QF self-certification as battery storage facilities and, in fact, it asked the IPUC to assume
the validity of these self-certifications without prejudice to Idaho Power’s ability to separately
challenge them before FERC, the proper authority to determine QF status. (Id. at p. 6.)
On July 13, 2017, the IPUC issued Order No. 33785, in which it issued its ruling on Idaho
Power’s Petition. (Dkt. 37, SF 10; Ex. 10.) In this Order, the IPUC acknowledged that Idaho
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 11 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 7
Power had not and was not challenging Plaintiffs’ asserted QF status and confirmed that “[t]he
battery storage facilities’ QF status is a matter within FERC’s jurisdiction and is not at issue in this
case.” (Ex. 10, pp. 3, 11.) In this Order, the IPUC also determined that, because the primary
energy source of Plaintiffs’ battery storage facilities is solar and their design capacities exceed 100
kW, Plaintiffs are not entitled to published avoided cost rates and 20-year contracts and, instead,
are entitled to negotiate two-year contracts that use Idaho’s IRP-based avoided cost methodology,
identical to solar and wind QFs. (Id. at pp. 12-13.)
On August 3, 2017, Plaintiffs filed a Petition for Reconsideration of Order No. 33785.
(Dkt. 37, SF 11; Ex. 11.) Plaintiffs’ only basis for error was that the IPUC improperly determined
Plaintiffs’ QF status. (Ex. 11.) On August 29, 2017, the IPUC issued Order No. 33858, in which
it denied Plaintiffs’ Petition for Reconsideration and stated in pertinent part as follows:
[Plaintiffs] assert[] that, contrary to Indep. Energy 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.

(Dkt. 37, SF 12; Ex. 12, p. 3.)
Plaintiffs had 42 days from the date of Order No. 33858 to file a Notice of Appeal to the
Idaho Supreme Court under Idaho Code § 61-627 and Idaho Appellate Rule 14(b). See I.C. § 61-
627; I.A.R. 14(b). Plaintiffs, however, never filed any such appeal and, in fact, to date they have
not appealed either IPUC Order No. 33785 or 33858 to any state court in Idaho. (Dkt. 37, SF 13.)
Instead, on December 14, 2017, two months after the time within which Plaintiffs had to file an
appeal of the IPUC’s decision had expired, 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 (“FERC Petition”). (Dkt. 37, SF 14; Ex. 13.) On February 15, 2018, FERC issued a
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 12 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 8
Notice of Intent Not to Act, in which it declined to initiate an enforcement action pursuant to
Section 210(h)(2)(A) of PURPA as requested by Plaintiffs. (Dkt. 37, SF 15, Ex. 14.)
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. 1.) Two days later, on June 1, 2018, Plaintiffs filed their First Amended
Complaint in which they substituted three IPUC’s Commissioners in as party defendants. (Dkt.
2.) In their operative complaint, Plaintiffs again allege, as they did before the IPUC and FERC,
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 Plaintiffs’ QF
status, thereby depriving them of specific rates and contract terms to which they claim they are
entitled. (Exs. 11, 13; Dkts. 1, 2.) To rectify this allegedly improper action by the IPUC, Plaintiffs
ask this Court to find that IPUC Order Nos. 33785 and 33858 are erroneous and that, instead of
being limited to two-year contracts that use Idaho’s IRP-based avoided cost methodology, they are
entitled to published avoided cost rates and 20-year contracts.
III. ARGUMENT
A. Standard Applicable to Rule 12(b)(1) Motions A case should be “dismissed for lack of subject matter jurisdiction under Rule 12(b)(1)
when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v.
U.S., 201 F.3d 110, 113 (2d Cir. 2000); see also Fed. R. Civ. P. 12(b)(1). A jurisdictional challenge
under Rule 12(b)(1) can be facial or factual. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039
(9th Cir. 2004). “In a facial attack, the challenger asserts that the allegations contained in the
complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 13 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 9
attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise
invoke federal jurisdiction.” Id. Thus, factual attacks “rely on affidavits or any other evidence
properly before the court” to contest the truth of the complaint’s allegations. St. Clair v. City of
Chico, 880 F.2d 199, 201 (9th Cir. 1989); also Morrison v. Amway Corp., 323 F.3d 920, 924 n. 5
(11th Cir. 2003) (jurisdictional challenge was a factual attack where it “relied on extrinsic evidence
and did not assert lack of subject matter jurisdiction solely on the basis of the pleadings”). With
such factual attacks, the court is free to “review evidence beyond the complaint without converting
the motion to dismiss into a motion for summary judgment” and can even make factual
determinations. Safe Air for Everyone, 373 F.3d at 1039; St. Clair, 880 F.2d at 201.
While courts must presume the factual allegations of the complaint to be true and draw all
reasonable inferences in the plaintiff’s favor under a facial attack, when a factual attack is made
“[n]o presumptive truthfulness attaches to plaintiff’s allegations, and the existence of disputed
material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional
claims.” Thornhill Pub. Co., Inc. v. General Tel. & Electronics Corp., 594 F.2d 730, 733 (9th Cir.
1979); also Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004). The plaintiff bears the burden
of proving the existence of the court’s subject matter jurisdiction. Thompson v. McCombe, 99 F.3d
352, 353 (9th Cir. 1996). When a factual challenge to a court’s subject matter jurisdiction is made,
the plaintiff can satisfy this burden only by “present[ing] affidavits or any other evidence necessary
to…establish[] that the court, in fact, possesses subject matter jurisdiction.” St. Clair, 880 F.2d at
201; also Safe Air for Everyone, 373 F.3d at 1039.

Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 14 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 10
B. Plaintiffs’ First Amended Complaint Must Be Dismissed Because it Constitutes an “As-Applied” Challenge Over Which This Court Lacks Subject
Matter Jurisdiction Section 210 of PURPA creates “an overlapping scheme of federal and state judicial review
of state regulatory actions taken pursuant to PURPA.” Allco, 875 F.3d at 67. Specifically, Section
210 authorizes the following three types of enforcement actions through which a QF can challenge
the actions of a state regulatory agency such as the IPUC: (1) implementation challenges by FERC
against states in federal court, 16 U.S.C. § 824a-3(h)(2)(A); (2) implementation challenges by QFs
against states in federal court, 16 U.S.C. § 824a-3(h)(2)(B); and (3) as-applied challenges by QFs
against states or unregulated utilities in state court. 16 U.S.C. § 824a-3(g); also Allco, 875 F.3d at
67-69. While federal district courts have exclusive jurisdiction over implementation challenges,
state courts have exclusive jurisdiction over as-applied challenges. Exelon, 766 F.3d at 388.
“Implementation challenges involve claims that a state agency has failed to properly
implement FERC’s regulations governing the purchase of energy from QFs.” Allco, 875 F.3d at
68; also Exelon, 766 F.3d at 388 (“An implementation claim involves a contention that the state
agency…has failed to implement a lawful implementation plan under § 824a-3(f) of PURPA….”);
Policy Statement Regarding the Commission’s Enforcement Role Under Section 210 of the Public
Utility Regulatory Policies Act of 1978, 23 FERC ¶ 61,304, at 61,644 (1983) (“1983 Policy
Statement”) (implementation challenges under 16 U.S.C. § 824a-3(h) address claims that the state
agency has “promulgated regulations which are inconsistent with or contrary to [FERC’s]
regulations”). As-applied challenges, on the other hand, “involve claims that a utility has failed to
abide by a state’s regulations implementing PURPA.” Allco, 875 F.3d at 68; also Exelon, 766
F.3d at 388 (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”). Stated differently,
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 15 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 11
implementation challenges are limited to those involving claims that a state agency or nonregulated
utility “failed to comply with [its] obligation under § 210(f)(2) of PURPA to devise an
implementation plan…that is consistent on its face with FERC’s regulations,” while as-applied
challenges are those alleging that such an agency or utility “failed to adhere to its own
implementation plan in its dealings with a particular qualifying facility.” Greensboro Lumber Co.
v. Georgia Power Co., 643 F.Supp. 1345, 1374 (N.D. Ga. 1986). These latter, as applied claims,
“must be brought in state court, which has exclusive jurisdiction ‘to enforce any requirement’ of a
nonregulated utility’s [or State regulatory authority’s] implementation plan.” Id.; also 16 U.S.C.
§ 824a-3(g)(2). “That this is the FERC’s interpretation of PURPA’s enforcement mechanism is
clear.” Id.; see Snow Mountain Pine Co. v. CP Nat’l Corp., 30 FERC ¶ 61,293, at 61,589 (1985)
(“As the commission has previously noted, complaints regarding an alleged refusal to purchase
power from a qualifying facility and the rates for such purchases are matters properly brought in a
State forum”); Roche Prods., Inc., et al., 29 FERC ¶ 61,098, at 61,184 (1984) (“matters of
application of [a utility’s] rules…are properly brought before State judicial forums”).
As-applied claims include questions on whether a specific state agency’s order, as opposed
to a particular state rule, properly implement FERC’s regulations and whether a state agency
properly interpreted its own rules. See Exelon, 766 F.3d at 389-91 (discussing Power Res. Grp.,
422 F.3d 231; Power Resource II, No. 1:03-CV-762-HLH, Dkt. No. 44, at 17-18; Power Res. Grp.,
Inc. v. Pub. Util. Comm’n, 73 S.W.3d 354, 356-57 (Tex.App.-Austin 2002)). As-applied claims
also include questions on whether the rates established under a state’s implementation plan are
“non-discriminatory, just and reasonable” as required by FERC’s regulations and whether a state
agency’s adoption of a certain charge to be levied on a particular class of customers complies with
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 16 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 12
FERC’s regulations. See Greensboro Lumber, 643 F.Supp. at 1374-75; Mass. Inst. of Tech. v.
Mass. Dept. of Pub. Utils., 941 F.Supp. 233, 236-38 (D. Mass. 1996) (“MIT”).
In this case, the gravamen of Plaintiffs’ challenge is that the IPUC improperly applied its
own PURPA implementation plan when it determined that Plaintiffs are not entitled to 20-year
contracts with standard/published avoided cost rates and, instead, are only entitled to negotiate
two-year contracts using Idaho’s IRP-based avoided cost methodology. For example, in their First
Amended Complaint, Plaintiffs allege that “Defendants’ ruling deprives [Plaintiffs] of their right
to the Idaho Commission’s more favorable contract terms and rates available to all ‘other’ QFs
and instead restricts them to the less favorable contract terms and rates that are available, under
the Idaho Commission’s implementation of PURPA, to just solar and wind QFs.” (Dkt. 2, ¶ 13,
emphasis added; also Dkt. 2, ¶¶ 44-58.) Similarly, in their Motion for Summary Judgment
Plaintiffs ask this Court to enter summary judgment in their favor “declaring and requiring the
Defendants honor Plaintiff’s ‘other QF’ status and require Idaho Power Company to tender twenty
(20) year contracts at published rates consistent with their status as ‘other QFs’ pursuant to
established IPUC requirements….” (Dkt. 29, pp. 1-2, emphasis added.) As these documents
show, Plaintiffs’ argument is that, because they are not self-certified solar or wind QFs and,
instead, are “other” QFs under Idaho’s PURPA implementation scheme, they are not subject to
the limitations imposed upon such solar and wind QFs and, therefore, are entitled to the more
favorable rates and contract terms previously established by the IPUC. (Dkt. 2, ¶¶ 13, 44-58; Dkt.
29, pp. 1-2; Dkt. 29-1.)
Based upon these documents, it is beyond reproach that Plaintiffs’ challenge is not an
implementation challenge because they are not arguing that the IPUC “promulgated regulations
which are inconsistent with or contrary to [FERC’s] regulations.” 1983 Policy Statement, at
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 17 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 13
61,644. For example, Plaintiffs do not claim that the IPUC’s two methods for calculating avoided
costs are unlawful, or that the IPUC’s eligibility caps for solar and wind QFs, on the one hand, and
all “other” QFs, on the other hand, are unlawful. (See e.g., Dkt. 2, ¶ 13; Dkt. 29, pp. 1-2; Dkt. 29-
1.) Instead, Plaintiffs claim that the IPUC, in ruling upon Idaho Power’s Petition, failed to adhere
to its own implementation plan in its dealings with Plaintiffs by refusing to grant them the contract
rate and terms applicable to “other” QFs. (See id.) Thus, as in Greensboro Lumber, Plaintiffs’
challenge is “properly regarded as a challenge to the application of an implemented plan, and not
a challenge to the implementation of the plan itself” and, as such, jurisdiction lies with the state
court. MIT, 941 F.Supp. at 237-38 (citing Greensboro Lumber, 643 F.Supp. at 1374-75).
Consequently, because Plaintiffs’ claim is an as-applied challenge over which this Court lacks
subject matter jurisdiction, Plaintiffs’ First Amended Complaint must be dismissed in its entirety.
C. Plaintiffs’ First Amended Complaint Must Be Dismissed Because Plaintiffs Failed to Timely Exhaust Their Administrative Remedies, Thereby Depriving This Court of Jurisdiction As with any other claim, Plaintiffs’ instant challenge to the IPUC’s orders must be brought
within the applicable limitations period. Neither PURPA nor FERC’s regulations contain any such
period. See 16 U.S.C. § 824a et seq.; 18 C.F.R. § 292.101 et seq. As a result, and because there
is no federal limitations period directly applicable to PURPA enforcement actions under Section
210(h), courts addressing this issue have applied the “well-settled” rule that “if Congress fails to
include a statute of limitations in a statute, courts should – with few exceptions – impose a state
limitations ‘most closely analogous’ to the federal act in need.” N.Y. State Elec. & Gas Corp. v.
Saranac Power Partners, LP, 117 F.Supp.2d 211, 246 (N.D.N.Y. 2000) (“NYSEG”). An exception
to this rule is when applying a state limitations period would “frustrate or interfere with the
implementation of national policies or be at odds with the purpose or operation of federal
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 18 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 14
substantive law.” Id. PURPA enforcement actions, however, “fall[] squarely inside the rule, not
the exception.” Id. at 247.
In NYSEG, when the Northern District of New York addressed this issue, it determined that
the most closely analogous state limitations period was the one applicable to the appeal of final
agency actions. See id. at 246-47. It further held that, because the plaintiff failed to commence its
PURPA enforcement proceeding within this limitations period, the claim was time-barred. Id.
Under Idaho law, any IPUC decision must be appealed within 42 days of the date any
application for rehearing is denied. I.A.R. 14(b); see Neal v. Harris, 100 Idaho 348, 350 (1979)
(noting that Idaho Appellate Rule 14 limits the time to appeal IPUC decisions). Specifically, Idaho
Appellate Rule 14(b) provides in pertinent part as follows:
(b) Appeals From an Administrative Agency. An appeal as a matter of right from an administrative agency may be made only by
physically filing a notice of appeal with the Public Utilities
Commission…within 42 days from the date evidenced by the filing stamp of the clerk or secretary of the administrative agency on any decision, order or award appealable as a matter of right. … The time for an appeal from such decision, order or award of the public
utilities commission begins to run when an application for rehearing
is denied, or, if the application is granted, after the date evidenced by the filing stamp on the decision on rehearing. Here, the IPUC issued Order No. 33858 denying Plaintiffs’ Motion for Reconsideration on
August 29, 2017. (Dkt. 37, SF 12; Ex. 12.) Pursuant to Idaho Appellate Rule 14(b), Plaintiffs had
42 days therefrom – until October 10, 2017 – to appeal that order and, in turn, the IPUC’s Order
No. 33785 that was the subject of Plaintiffs’ Motion for Reconsideration. I.A.R. 14(b). Plaintiffs
failed to comply with this limitations period and, in fact, to date they have not appealed either of
the IPUC’s orders to any state court in Idaho. (Dkt. 37, SF 13.) Instead, the first attempt Plaintiffs
made to challenge the orders was when they filed their FERC Petition on December 14, 2017, over
two months after the limitations period had already expired. (Dkt. 37, SF 13, 14.)
Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 19 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 15
The timely filing of a petition with FERC is a jurisdictional prerequisite to Plaintiffs’
current attempt to seek relief from this Court. See NYSEG, 117 F.Supp.2d at 246-47 (PURPA
enforcement actions not filed within the state limitations period for appealing agency orders are
time-barred); Niagara Mohawk Power Corp. v. FERC, 306 F.3d 1264, 1269-70 (2d Cir. 2002) (a
district court lacks subject matter jurisdiction if a plaintiff fails to exhaust its administrative remedy
by petitioning FERC to bring an enforcement action prior to suing in federal court); I.A.R. 21 (the
failure to file a timely notice of appeal is jurisdictional and requires automatic dismissal of the
appeal); see also 16 U.S.C. § 824a-3(h)(2)(B). Therefore, because Plaintiffs failed to challenge
the IPUC’s orders until after the applicable limitations period set forth in Idaho Appellate Rule
14(b) had expired, their claims are time-barred and this Court lacks subject matter jurisdiction over
them. As a result, Plaintiffs’ First Amended Complaint must be dismissed in its entirety.
IV. CONCLUSION
Based upon the foregoing, Idaho Power respectfully requests that this Court dismiss
Plaintiffs’ First Amended Complaint in its entirety.
DATED this 26th day of October, 2018.
ANDERSEN SCHWARTZMAN WOODARD BRAILSFORD, PLLC

/s/ Steven B. Andersen Steven B. Andersen Attorneys for Defendant-Intervenor Idaho Power Company

Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 20 of 21
DEFENDANT-INTERVENOR’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT - 16
CERTIFICATE OF SERVICE
I hereby certify that on this 26th day of October, 2018, I caused a true and correct copy of
the foregoing document to be electronically filed with the Clerk of the Court using the CM/ECF
system, which sent a Notice of Electronic Filing to the following persons:
Peter J. Richardson [e-mail] Robert C. Huntley [e-mail] Brandon Karpen [e-mail] Scott Zanzig [e-mail]

/s/ Steven B. Andersen
Steven B. Andersen

Case 1:18-cv-00236-REB Document 40-1 Filed 10/26/18 Page 21 of 21