20100413Answer to Windland, AgPower Petition.pdf

APR-13-2010(TUE) 12:44 P.002/015
""crp ~~ j,.~ '\,-
Jeffn: S. Lovinger
Keneth E. Kaufm
Lovier Kaufan LLP
825 NE Multnoniah Suite 925
Portland, Oregon 97232
Telephone: [phone]
Fax: [phone]
lovinger($lklaw.com
kaufiannæJlklaw.eom
~ Pr~ \..: 3u
LnW ~PR \..~Vi U t\
Danel E. Solander
Rocky MOWltain Power
201 South Mai Stret, Suite 2300
Sat Lake City, UT 84111
Telephone: [phone]
Fax: [phone]
daieLsolandertßacificoi:.com
Attorneys tor PacifCorp dba Rocky Mounta Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IÑ THE MATTER OF THE
ADJUSTMENT OF AVOIDED COST
RATES FOR NEW PURPA
CONTRCTS FOR A VISTA
CORPORATION DBA A VISTA
UTILITIES, IDAHO POWER
COMPAN, AN PACIFICORP DBA
ROCKY MOUNTAI POWER
CASE NO. GNR-E-io-i
PACIFICORP'S ANSWER TO
PETITION OF WINDLAND, INC.,
AND AGPOWER .JEROME, LLC,
FOR RECONSIDERTION OF
ORDER NO. 31025
INTRODUCTION
PacifCorp d/b/a Rocky Mowita Power submits 'tis Answer to the Pettion for
Reconsidertion of Orer No. 31025 ("Petition'') fied April 6, 2010, by Wind lad, Inc.
("Windland") and AgPower Jerome. LLC e'AgPower") (collectively, "Petitioners")
before thc Idaho Public Utilities Commssion ("Commission") pursnt to Idao
Admiistrtive Riles 31.01.01.331. PacifiCorp respcty requests tht thc
PacîfCorp's Anwer to Petition for Reconsdertion ORIGINAL 1
~
APR-13-2010(TUE) 12:44 P.003/015
Commission deny the Pettion because the Commission's Order No. 31025 violates
neither Idaho Code secton 61-307 nor the prcedural due process clauss of the Idaho or
United States Constitutions. In the event the Commission does grt Petitioners a
hearng, PacifiCorp respectfully request that the avoided cost rates adopted in Order No.
31025 rema in effect uness and unti such ras are found to be unjust or unrasonable.
DESIGNATION OF REPRESENTATIS
Copies of all pleadings and other corrspondence in this mattr should be sered
upon the followig counsel for PacifiCorp:
Jeffey S. Loviger
Kenneth E. Kaufmann
Loviger Kauf LLP
825 NE MuItnomah, Suite 925
Portlnn~ OR 97232
Telephone: [phone]
Fax: [phone]
loynger(âlklaw.eom .
kaufian(ßaw.com
Danel E. Solander
Rocky Mountai Power
201 South Main Strt, Suite 2300
Salt Lae City, liT 84111
Telephone: [phone]
Fax: (SOL) 220-3299
daniel.solandcrpacificotp.com
BACKGROUN
The Commssion estblishes avoided cost rates payable by Avista Idaho Power
Company, and PacifCorp to quaing failties ("QFs") in Idao baed upon the
estimted cost ($IM) of meetig the utility's next increment of need frm a
hypothetical new reource C~Surogate Avoided Resourte'" or "SAR"). "The Commssion
adopted the metodology cuntly usd to estiate the cost of the Surogate Avoided
Resource in Order No. 29124. Under tht SAR methodology, the Commission uses the
medium natural ga prce forecat published by the Northwest Power and Conseration
PacifCorp's Anwer to Petition for Reconsideration 2
APR-13-2010(TUE) 12:44 P,004/015
Council ("Councilj.l The estimated future price of gas is an importnt input afecting
the avoided cost rate calculaton. When the price forecas goes up, the avoided cost raes
go up; when price forecast go down so do avoided cost rates.
Since adoptig thc cuent 8AR methodology in 2002, the Commission has
recalculated avoided cost rates each time the Council update its published natu gas
price forecat. Mo~t recently~ the Council updted its natu gas price forecast in
conjunction with its Sixth Power Plan, whieh the Counci adopted and posted on its
website on Febr 10,2010.2 The verion of the Plan posted Februa 10 included a
note that Appendix A, the Councils nntural gas Fuel Prce Forecas "hard) been adopted
and will be posted witlun the next few days.',3 The Council posted Appcndi A on the
Council website on Marh 8, 2010.4 The Commssion promptly generated new avoided
cost rates based upon the Council's updated Fuel Price Forcast. The Commission then
set Avista Idaho Power, and PacifiCoip a copy of its recalculnted avoided cost rates on
March 9, 2010. and asked the utilities to confi by March 12 that its calculations we
"accurte." PacifCorp forwded the Commssion's March 9 1ctt to Petitioners'
attrney on Mach 10,2010. On Mar 16, 2010, afer the utilities confinned that its
calculations wer cOn'ct, 'te Comniission issued Orde No. 31025 declarg that the
i Order No. 29124 refers to the "Nortest Power Planning CounciL." Sometime afer 2002, ilat
orgaizion chaged its name to the "Northwest Power and Conservation Council."
2 This is before Petitioner Windland made a written request for a QF power purcase ageemcnt (Febr
26,2010), filcd its applÎc:on for self-certification as a QF (Marh 2. 2010), or applied for a generation
intercnnecion agreement (Mh 3,2010).
3 http://w.nwcouncil.orglenerg/powerplan/6/defali.htm (prior to April 13, 2010).
4 ¡d. The Council also posted a draft veion of its Sixtll Power Plan (therby giving notice of a pending
update to its natural gas price forcat) in Septeber 2009. Jd
PacfiCorp's Answer to Petition for Reconsidertion 3
APR-13-2010(TUE) 12:46 P,005/015
revised avoided cost rates shall apply to power purchas agreements betwcen an invesor
owned utilty and a QF executed on or afer March 15,2010.
On April 6, 2010, Pettioners filed thc Petition, alleging that Order No. 31025
violatd Idao Code setion 61-307 as well as Petitioner' constitutional due process
rights to notice and an opportunity to be hea regarding the new avoided cost ratcs.
DISCUSSION
I. Order No. 31025 did Dot violate Idaho Code seetion 6)-307.
A. Idaho Code secton 61-307 does not apply to Order NQ.
31025 becuse the utilties did Dot request the rate
change.
Idaho Code section 61-3075 ("section 61-30T") prohibits the Commssion from
alowig a rate chage proposed by a utlity to take efect without 30 days prior notice to
tiie Commission and the public. on its fae, that sttu applies to chages initiated by
the utilty. Neither Avista nor Idao Power nor PacifiCorp intiated Order No. 31025
modifying avoided cost rates. Furterore, applying section 61-307 to a Commission-
intiatcd chge would requie contorton of the statue's notice provisions: The sttute
, Idaho Code setion 61-307 (2010) states:
Unles the commission otherwise orders, no change shall be made by any public utility in
any ratc, far, ioll, retal, charge or cJa.~sifi;tion, or in any role, regulation or cotrct
relating to or afecting iiy rate, fa, tol~ retal, chae, classification or seice. or in
any privilege or facility except after thirt (30) day' IKtice to the commission and to the
public as herein provided. Such notice shall be given by filing with the commission and
keeing open for public inspection new schedules stag plaly the change or changes
to be made in the schedule or schedules thlm in force, and the time when the change or
changes wíl go into effct The commision, for good cause shown may allow chirges
wi!hout reuirig !he thir (30) days' notice herein provided for, by an order speciiying
the changes so to be made and the tie when they shall tae effect, ii the manner in
which they shall be lïled and publíshed. When an change is proposed in any rate, fa,
toll, renta. charge or clasificatíon, or in any form of contrct or agreeent or in any
rule, regulation or contract relating to or affctng any rate. fare. toll. rental. chae,
cliiiñcation or serice. or in iiy privilege or ficilty. atttion shall be directed to such
change on Ihc schedule filed with the commission by some charaer to be designate by
the commission, immediately preceding or following the itct.
PacifCorp's Answer to Petition tor Reconsidertion 4
APR-13-20iO(TUf) 12:46 P, 006/015
prescribes 30-day notice to~ not from, the Commission; it maes no provision for notice
from the Commission to the public. There is no support in the languge of setion 61-
307 for Petitioners' uncritical asmption tht section 61-307 applies to the Commssion. 6
Because section 61-307 applies only to rate changes proposed by a utlity, it does not
apply to the Commission's actons in Order No. 31025.
B. Alterntiely, if Idaho Code section 61-307 doc: apply, good
cause exists to wnive its notiee requireent
Under section 61-307, the Commission may allow a rae chage without a 30-day
waiting perod if: (1) good cause is shown, (2) the order specifcs the changes to be made~
(3) the order specifies when the changes wil go into cfièct, and (4) the ordr specifes the
maer in which they wi be ficd and published. Here, all four criteria ar clealy
satified. The latter thee crtera are explicitly satisfied by Order No. 31025. The order
specifies the new rates. Order No. 31025 at Atthment 2-4. Th order spcifies tht the
changes will go into effect on the date of the order (Mach 15,2010). ld. at p. 3. The
order itslf publishes the new rates. ld at Attchment 2-4.
Whle the Commssion chose not to use tiie phrase "good caus'" the ordcr maes
abundatly clear that the '4good cause" for foregoing the notice peod is tht th change
is merely misteral and is necessar to update avoided cost rates. The Commission
found tht the chage wa a "simple arthetic caculation" following the metodology
(, It is also questionable whether avoided cost rates approved by the Commission pursuat to PURPA ar
"ra" lI t1ia.tenn is used in section 61~307 and other sections ofihc Idaho Code. TIie term "raes" in the
Idao staute applies to product and servíces sold by the utilty; avoided cost rates in contrt, apply to
utilty purchases. Utilities lack authonty to deviate from ''ttes" (I.C. § 61-310); however. a utility and a
QF may agree not to use the published avoided cost rate. Finaly, the Commission's authori to estlish
avoided cost rates comes from redernJ law (PURPA), not slate law. Orner No. 22948. at p. 2. Th
impornt ditTiiccs call into question whether the Idaho legislatre ever intended for section 61-307 to
apply to nvoided cost rate establised puruant to PURPA. Bu.t see Order No. 22948. at pp. 2.3 (statig
that the 30-da perod in seon 61-307 applies wher a utilty propose n revised varable energy ra for
power deliverd under certin exting QF Power Purchae Agm..rrents).
PacfiCorp's Answer to Pettion for Reconsideration 5
APR-13-20iO(TUE) 12:47 P,007/015
for calculation of avoided cost rates established in Orer No. 29124. Ordcr No. 31025, at
p. 2. The Commission also found tht the new rates accurtely incorporated the
Nortwest Power Conseration Council's reviscd natu gas price and were consistent
with thc Comm5Îon-appved SAR methodology. ld.
In Orde No. 29124t upon which Order No. 31025 relies, the Commission
esblished the Council's medium gas price foret as a component of avoided cost and
explaicd why promptly updatig avoidcd cost to reflect actual gas prce forecas is
necessa to protect ratepayers. Orer No. 29124, at pp. 4, 10. The Commssion
explained the need to keep the gas pnce component curnt in order to protect ratepayer:
QF contr signed now cacuated with abnormally high gas rates
...could result in umasonable and unair costs borne by the reguated
utility, which ultiately will be paid by its ratepayer. The Commission
cannot exse raepayer to avoided cost rate that rely too heaviy on
uncharcterstically high gas prices.. .
Id. at p. 4. In prompty updatig the avoidcd cost rate in Order' No. 31025, the
Commission was siply fuerg the cause of ratepayer protection as explaid in
Order No. 29124. In short, Order No. 31025 satisfies the critera for foregoing thc 30-
day notce period, especially when considerd in conjuncton with Ordcr No. 29124.
C. Alternatiely, ü Idaho Code section 61-307 did rcquin;
notice under the circustances, Petitioners had aetual
notice.
Petitioners had actual notice and ample tie to object to the Commsson's'
calculation of the new avoided cost rates, but did not object. Petitioner' attorney
received a copy of the Commssion's March 9,2010 lettr (askig Avi, Idao Power,
and PacifCo to ver thc accurcy of its caculation of new avoided co~1s basd on the
Council's most recent gas forecat) on Marh 10, 201 O. Petition, at p. 5. With that letter,
Pettioners knew as much as the utilties about the Commssion's calculated change to
PacifiCorp's Answer to Petition for Reconsideration 6
APR-13-2010(TUE) 12:47 P,008/015
avoided cost rates and received this information at esstially the same time as the
utlities. Pettioners had all the information they needed to venfy the Commission's
caculation of reised avoided cost rats. If Pettioners believed the new avoided eost
rates were caculated incorrctly, Petitioners should have objected by the Marh 12
dealine established in the Comniission's March 9 letter.
Pettioner's arguent that it should be given notice and opportty to dispute the
rate adjustent is a pretene inteded prar to delay the effectve dat of the new
rates such that Petitioner may quaiíy for a power purchae agrement at th old rates.
Pettioner make no assertion in their Petition that the Commission er in its
calcuations of avoided cost Rather, Pettioners argue they should have the opportty
to arue for a chage in the Commssion's seted metodology for calculatig avoided
costs. Petition, p. 9. The Commssion's penodie revision of avoided cost rates to reflect
changes in the gas forecast does not trigger an entitlement for qualifYng facilties to
challenge the Commission's seted avoided cost methodology. Nor should such
chenges delay the Commission's implementation of an updated rate based upon a long-
estalished mcthodology. Thc Commsson ha a peding prceedig invesgatig the
methodology for calculating avoided cost rates. See In the Matter of a Review of the
Surrogate Avoidable Resource Methodology for Calculating Published Avoided Cost
Rates, lPUC Case No. GNR-E-09-03. lfPettioners have evdence why the avoided cost
metodology is no longer prer, they can and should rase those concern in Case No.
GNR-E-09-03. Petitioners did not do this, however, because what they really seek is a
postpnement of the effecve date of the ne rates? Pettioners are not entitled to such a
, The earlies each Petitíorier could possibly have esblíshed an entitlement to a rate under Idaho law ís the
date it filed its complat: April 6, 2010 for Windland (Cae No. PAC-£'10.05) and April 9, 2010 ror
PacifiCorp's Anwer to Petition for Reconsdertion 7
APR-l 3-201 O(TUE) 12: 47 P,009/015
postponemnt and any postpocmcnt tht would allow Petil.oners to quaify for the old
avoidcd cost rates would be uneaonable and Wlfair to Idao ratepayers.
TI. IPUC Order No. 31.025 did not violate procedural due process of
Petitioners.
A. Petitioners lack an interest protected by due pro~es.
The Pettioners asser that QF developers pursuin a publised avoided cost rate
have an entitlement to tht rae and tht ths entitlement is protected by the due process
clauses of the Idaho and United States Constitutions. Petition. at pp. 11-12. Pettioner
also assert they 4'each relied on the published raes in Order No. 30744 when they
incued fiancial expenses in perfctng eligibilty for contracts at the published rates
and interconnection for their respectve QFs." Id at p. 12. Finaly, Petitioners asert that
the "Commssion's complete lack of notice to QFs pror to settng the new rates in Order
No. 31025 deprived Petitioners of procedural due prcess." ld.
Petitioner are mb1aken in concludng that Order No. 31025 violated thir due
process rights. A QF devC10per is not entitled to a publishd avoided cost rate merly
because the developer relics on the rate. Order No. 19745, at p. 3.8 Indeed, the Idao
AgPower (Cas No. We-E. I 0-11). Sec discussion infra Section ITA (Idaho Supree Court upholding
Commssion rule requirig signed contrct or a meritorious complaint to lock in a rae).
8 1n Order No. 19745 the Commission denied Ð petition for reconsideration of Order No. 19673 which
revised avoided cost rates. Order No. 19673 also esblished tlat only those QF developer who had
entered into a contract before the new rate tok effect, or who ha filed a meritrioU5 claim with the
Commission for the old rates before the new raes took efec, were entitled to the old rates. A niibcr of
petitioner objecicd and argued tht they had mertorious claims to the old rates evn though they had not
fied a complaint before tle rats cbanged. Thes peítíoners ared tht they should also be èItitlcd to the
old rate The Commission rejectd this arument and observed:
The Petitioner had no indefinite right to the rates established by Order No. 18190 in
Cae No. U.L 006.200. While that Orde anticipate in 1983 that the rates established in
that ca would be in effec for four yenr, there ar no legally ciforeablc rights
associatd with such an exection. Informed invess in cogeneration and smal power
production projec know or should know tht this Commission ha nO authority under
stat or federal law to freze entitlement to a given rae four yea into the future.
PacifiCorp's Anwer to Pettion for Reconsideration 8
APR-13-2010(TUE) 12:48 P,010/015
Supreme Cour has held tht a QF developer's due proces rights do not atth to a
parcular avoided cost rate until the develope has estblished a legaly enforceable
obligation to sell its output to a utlity at the rate in queston. Rosebud Enterprises, Inc. v.
Idaho Pub. Utiis: Comm '71, 131 Idaho 1, 12 (1997) ("Rosebud 11,).9 The Commission has
thc autorty to detenne whcn a legally enorceable obligation has been esblished.
Rosebud Enterpr;,ves v. Idaho Pub. Uti/so Comm'nJ 128 Idaho 609, 623-24 (1996)
("Rosebud l) ("accordg to the FERC, it is up to the State, not (pERC), to dcterne the
specifc par of individual (qualed facilty) power purha.~ agementsJ
includg the date at which a legally enorceable obligation is incurd under State law.'')
The Commission has detenined~ and the Idao Supreme Cour ha afed, tht
a QF developer must satisf one of tw conditions to estblish a legaly entbreable
obligation to sell QF output at a parcul published avoided cost rate. The QF developer
must execute a power sales contract with a utility at the rate in question before a
succeor rate becomes effective. Alteratively, a QF developer must file a meritorious
complait with tle Commission before the sucessor rate becomes effectve alegig that
the utity improperly refued to execute a contrct for the old rate. A. w: Brown Co. v.
OrdcrNo. 19745, at p. 3.
9 in most relevant par the Rosebud 11 Coun sta:
Rosebud contends that WUC's 1994 ordrs gave it a proper interet in the ronn of a
legally enforceble obligation it was required to have to be entitled to the 1994 rates.
Because Roebud never made a legally enforceable obligation, I1 discusse above, it
never had a reasonable expecttion tht IPUC could not change the methodology for
deiennining avoided cost rates. Cl Smilh v. Meridian Joint Sch. Dist. No.2, 128 Idaho
714, 722-723, 918 P.2d 583, 591-92 (1996) (requirig more than a mer hope or
expectation of continued employent to consttue a propert inteest). Therfore, it
never had a proper interest in the i 994 rates, lind due process mivcr attched to lPUe's
consideron of the chiige of the 1994 rate.
RosebildJI, 131 Idaho at 12.
PacifiCorp's Aner to Petition for Rensidertion 9
APR-13-2010(TUE) 12:48 P,Oll/Ol5
Idaho Power CO'f 121 Idao 812f 816 (1992); Rosebud II, 131 Idaho at 6 C"In A.W.
Brown Co., ths Court ruled that IPUC has authority, under stte and feder law, to
requirc that before a developer can lock in a cer ratc, ther must be either a signed
contrct to sell at ihat rate or a mertorous complaint alleginglhat the projec is mat
and that the developer has attempted and failed to negotiate a contr with the utity;
that is, there would be a contrac but for the conduct of the utity.").
In sum, a QF developer does not have sufcient entitlement to a published
avoided cost rate to give rise to due proce protectons unless prior to the da a
sucessor rate becomes effectve, the QF developer has either entered into a contrct at
th rate or fied a meritorious complait with th Commssion seekg tht rate.
Petitioners did not enter into a contract to sell thei QF output to a utility before the new
rates implemented by Order No. 31025 became effective on March 15,2010. Nor did
Petitioner file a meritorious complaint before that dae. As a resut, the Petitioners havc
neither a propert right nor an entitlement to the Order No. 30744 rates suffcient to give
rise to duc process protection. In adopti ncw rates without prior notice or a heang,
the Commssion did not violate Petitioners' due process rights.
B. Alternatiely, any legitimate interest Petitioners may have
could be protected by a later heaing.
Even if the Commssion asmed tht Pettioners have a protected interest, the
Commssion is not obligated to grant Petitioner a heag pror to updating avoided cost
rates. "Due process is flexible and cans for such prcedural protections as the situation
demds." Morrissey v. ßrewer, 408 U.S. 471, 481, 92 S.Ct 2593, 2600 (1972). What
process is duc is a fuction of the private inteest at stae, the value of additional
procedural safeguards, and the goverments interest in proceeding without such
PacifiCorp's Answer to Petition for Reconsideration 10
APR-13-2010(TUE) 12:48 P,012/015
procedure. Matthews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893 (1976). Becaus the
Commssion raised rates without a prior hearng to protect an importt government
interst (ratepayer costs)~ and because the risk of erroneously recalcuatig rates wa
small, due process does not entitle Petitioners to a hearg prior to thc chage in avoidcd
cost rates esblished by Order No. 29124.
TIie Supree Cour of Pensylvania held that a stAte s1atute permittng electc
rate fuel cO,!"Í adjustments to take effect without prior notice and hea did not violate
the cutomers' due process rights where a year-end revew offcred custmer an
opportty to chalengc thc ratcs and, if successful, recive a full refund with interest
Allegheny Ludlum Steel CtJrp. lJ. Penn. Pub. Util. Comm 'n ("Allegheny Ludlum PI), 501
Pa. 71, 78-79; 459 A.2d 1218 (1983). In performing the balancing of interest required
by Matthews v. Eldridge, the Cour found that the plaiti had. a substtial intere at
stakc ($10,000 per day in incrcascd powe costs). It noted tht th stte commssion's
modification to rates was guded by a set fbnnula, leaving the commission limited
discreton. And it noted that a required yea-end proceeding for final dermnaon and
adjustment of rate increases requied advace public notice, alowed fu parcipation by
all interst parcs, and requird refus, with interes of any overyments. Finally,
the Court noted ile strong interest of the state in protecting the public servce provided by
the utility;
The need for a public utiity to receive a fai rae of return on its propcrt
to assure its continued finacial integrty ~ necesry to achievement of the
importt goal of preg moder effcient, and dependable public
servce, consonant with rights of cuomer, is not to be ignore.
Allegheny, 501 Pa. at 77. Takng all oftlie fa above into account, the Cour uphld the
Penlvana fucl cost adjusent sttute as not violatve of due prcess. Id at 79.
PacifiCor's Answcr to Petition for Reconsidertion 11
APR-13-20iO(TUE) lè:49 P,013/015
The Commssion's change to avoided cost rates, in Order No. 31025, is similar to
Allegheny Ludlum, because: (1) the Commssion bas only limited disction to implement
the fuel cost adjustment to avoided cost rates; and (2) it has an obligation to the entire
cusomer bas of the electc utility to ensu that the utility's rates pemit it to provide
effcient. depedable serice.1O As in Allegheny Ludlum, if the Petitioner have a
protected interst, the Commission may still hold a heang on whether its rate adjusent
comported with the methodology adopted in Order No. 29124 and thereby sasfY due
process. I 1 The Commssion could preserve its Order No. 31025 by holdin a heag,
with pror public noticc, on whether its fucl cost adjustent to avoided cost rates is just
and reasonable. If justified by the outcome of such a heang, the Commission could
order utilities to pay QFs make-up payments. Unless and until an intervenor estalihe
tht the new rat~s we unjust or unasnable, the rat implemented by Order No.
31025 can and should rema in effect. Such a proces would provide abundant
opportunty for QFs to be hear whie at the sae tie protectig utility rateayer by
lQ Indee, the Commision ha a duty, under PUA, to ensure tht the published rates to be paid for QF
outpt do not exceed the utilit's avoided cost See R03ebud I, 128 Idaho at 614.621 (citing 16 U.S.C. §
824a-3(b); 18 C.F.R § 292.304(a)(2); San Diego Gas & E/ec. Co., 70 F.E.RC. 1 61,215 (1995)
(concluding that, "as the electc utility indw: becomes incra...~ingly competitive, the need to ensure that
the States arc using prcedur which ensure tht QF raleS do nOl exed avoided costs becmes more
criticaL. 'lhis is because QF ras that exceed avoided cost wil, by definition, give QFs an unfair advatage
over other marke parcipants (non-QFs). ")).
II PacifiCorp noLcs that lhe Commission's Order No. 31025 is distinguishble frm the court's holding, in
Allegheny Ludlum. because the plaintiT in Allegheny Ludlum had a proectd inteest (raes for existng
serice). Petitioner who do not have a power purchas agreement or ii meriiorious compJani fied prior LO
the rate change, do not have a protected interest in avoided cost raes. See, supra, pp. 8-10. Therefore,
PacifiCor believes tht the Commission has disretion (but no legal obligation) to provide Petîtion~ with
a post rate-change hearing as discussed above.
PacifiCorp's Answer to Pettion for Reconsideration 12
APR-13-2010(TUE) 13:28 P,014/016
ensurg that 1Jie utity is not required to enter into long-ter power purchase obligations
at rates in excess of the utilty's avoided COSt.12
CONCLUSION
For all of 11e reaons stated above, PacifiCorp respectf1y requests that the
Commission deny Pettioners' request for reconsideration because Order No. 31025
violates neithcr Idaho Code section 61-307 nor the procedu1".il due process clauses of the
Idao or United Staies Constitutions. In the event the Commission does grant Petitioner
a hearng, PacifiCorp respectfly request that the avoide cost rates adopted in Order
No. 31 025 reain in effect unles and until found unjus or uneasonable.
12 The Commission may tae notice tht the Public Utilities Commission of Oregon ("OPUC") adopi.d Ii
sImilar approach, in 2009, when PacîtïCorp filed a. required update to ilS Oregon avoided cost rate
calculatcd using the methodology approved by the OPUC and proposíng lower avoided cot rate due to
very low market price forecasis tor wholesale electricity. Several QFs protcsted implcmentaion of the
reviscd ratcs, but did not allege PacifiCorp applied the methodolob'Y incorrely. See OPUC Advice 09-
012. OPUC stalTrecommcrdcd that the effctive date of the new rate not bc delayed because (1) no part
argued that PacitiCorp had not followed the Commis-~ion's instructions for calculations, (2) leavÎng the
highar ratcs in efect would potentially ham customer, and (3) staff did not believe it would be good
policy to allow new avoidcd cost ras to be delayed simply lIpon request despite lack of just cause. See
OPUC Docket No. UM 1442, Sta1T Report (August 20. 2009) at pp. 3-4. Rather than delay the efecive
daLe ortha ncw rates. the OPUC (after hearing input on whether the new rates should be elTective pending
resolution of the QFs' concern) allowcd the raes to take effect, provisionally, and convened a new docket
to investigatc the QFs' concerns. See ldo; OPUC Advice No. 09.012 (making new rates ",ofbctive
Septcmber 9. 2009). Notably. as soon as the OPUC made clear that the investigation would be Iímìted to
whether the utiJties correctly applíed the approved meiJodology (and would not reinvestignte the
adequacy or thc metodology itself), the QFs effectivcly withdrew any objectin Lo the new rates and the
OPUC concluded that the new rates would remain unchanged. See Docket Nçi. UM 1442, OPUC Order
No. 09.506, at 4-" (December 28, 2009).
PacifiCorp's Answer to Petition for Reconsideration 13
APR-13-2010(TUE) 13:28
lI
Dated ths /3 day of Apríl2010.
Respectflly submitted,
if~ãñ, OSB 982672
Jeffey S. Lovinger, OSB 960147
Lovinger Kaufman LLP
Danel Solander, Utah Bar 11467
Attornevs for PacifCorp
Jol R. Kormanik, ISB #5850
rmik Halla & Sneed LLP
1099 S. Wells Street Ste. 120
Meridian, TO 83642
PacifCorp's Answe to Petition lor Reconsderation
P,015/016
14
APR-13-2010(TUE) 13:28 P.016/016
CERTICATE OF SERVICE
I HEREBY CER'flF tht, on the 13th day of Apnl, 2010, I served a tne and correct
copy otthe foregoing PACIFICORP'S ANSWER TO PETrrlON OF WINDLAD,
INC., AND AGPOWER JEROME LLe, FOR RECONSiDERTION OF ORDER NO. ,
31025 in Case No. GNR-E-10-Ol on the followig naedpersonslentitîcs by typ of
u.s. Mai specified below, properly addressed with postage preaid, and electtonic
mail:
Jean Jewell JefTre K. Larsen
Commssion Secre PacifCorp
Idaho Public Utilities Coinssion 201 S Mai Sui~ 2300
472 W Washington Salt La City, UT 8411 i
Bois,ID 83702 jefflarcntmaci ficorp.com
jean.jewelIipuc.idaho.gov (First Class U.S. Mail)
(Hand Deliver)
Cl int Kaich Barton L. Klin
Avist Coipmtion Idah Power Company
PO Box 3727 POBox 70
Spokane. WA 99220-3727 Boise, TO 83707 '
, clint.kalichrBvistcorlkcom bklinciiJdaopower.com
(First Class U.S. 'Mail)(FiTSt Class U.S. Mail)
Gregory M. Adams Petr J. Richadson
,.Richardson & O'Lea PLLC Richardson & O'Lea PLLC
POBox 7218 POBox 7218
Boise, il 83707 Boise, ID 83707
greg¡grichardsonandoleary.com petercIrie hardsonandolcaO!.com
(Firt Clas U.S. Mail)(First Clas u.s. Mail)
flDATE th I. cly of Aprj. 2010.
LOVINGER KAUFNN LLP
%~ .
KeDIet~Û1ìnann
Attorney for PacifCorp