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Home My WebLink About20110119Reply Comments.pdfMcDevitt & Miller LLP Lawyers (208) 343-7500 (208) 336-6912 (Fax) 420 W. Bannock Street P.O. Box 2564-8370ì8lì JAN l 9 PM l: 05 Boise, Idaho 83702 Chas. F. McDevitt Dean J. (Joe) Miler Januar 19,2011 Via Hand Delivery Jean Jewell, Secreta Idaho Public Utities Commssion 472 W. Washigton St. Boise, Idaho 83720 Re: Intermountain Wind LLC-GNR-E-l0-04 Dear Ms. Jewell: Enclosed for fig in the above matter, please fid an orial and seven copies of Reply Comments of Intermountai Wind LLC. Kidly retu a fie stamped copy to me. Very Truy Yours, McDevitt & Mier LL ~j¿tL DJM/hh Enclosures -Jc:z-(J-0:a Dean J. Miler (ISB No. 1968) Chas. F. McDevitt (ISB No. 835) McDEVITT & MILLER LLP 420 West Banock Street P.O. Box 2564-83701 Boise, il 83702 Tel: 208.343.7500 Fax: 208.336.6912 joe(gcdevitt-miller.com cha(gcdevitt -miller. com RE(~E.1 "PH tM'~ 19 PM l: 05lu" ~h" Attorney for Intermountain Wind LLC BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE JOINT PETITION OF IDAHO POWER COMPANY, AVISTA CORPORATION, AND ROCKY MOUNTAIN POWER TO ADDRESS AVOIDED COST ISSUES AND JOINT MOTION TO ADJUST THE PUBLISHED AVOIDED COST RATE ELIGIBILITY CAP. Case No. GNR-E-IO-04 REPLY COMMENTS OF INTERMOUNTAIN WIND COMES NOW Intermountan Wind LLC (Intermountan) and, in accordace with the procedural schedule previously established, submits the following Reply Comments. As noted in its initial Comments, Intermountain is a famly owned enterprise seeking to develop a single 10 AMw wind generation QF facilty upon lands owned by family members in Bonnevile County. The project is in the late stae of development- all interconnection study fees have been paid; the required studies have been completed; all necessar land use approvals have been obtaned. Intermountan is in the fina stages of contract negotiations with PacifiCorp for the execution of a power saes agreement. REPLY COMMENTS OF INTERMOUNTAIN WIND-l The Commission's solicitation of comments in ths proceeding has produced a large number of comments, touching on a wide varety of issues. Rather than attempt a comprehensive surey of all the comments and issues presented, in these Reply Comments, Intermountain will focus on only three topics, which are of critical concern to "tre-PURPA" projects: For Small PURP A Projects a Shift to IRP Methodology is Equivalent to a Complete Moratorium Of all the assertions contained in the Comments of the utility companes, the most faretched is the claim that afer the avoided cost eligibilty cap is lowered to 100Kw, renewable energy development will proceed ahead though the IR methodology. This assertion is not even semi-plausible for at least these reasons: First, as correctly noted in the Public Comments of Renewable Nortwest Project, the utilty companes have not made any commitment of additional personnel and resources necessar to manage the increased complexity of individually negotiated contracts. The utilty companies have not offered any commitment to act upon and present to the commission for consideration every request for negotiation withn a fixed time. As RNP notes, a mere claim that the companies' proposal is not a moratorium does not".. . demonstrate a meanngfu commitment to maintaning PURP A activity durg a workshop process." (RNP Comments, Pg. 5). Second, the avoided costs rates resulting from an IRP based methodology will never produce rates suffcient to make small scale PURP A projects viable. The Commission's surogated avoided cost methodology is a forward looking, incremental cost approach in which a new PURP A project, in effect, competes against new generating resources the utilty would have constrcted but for the addition of the PURP A resource. REPLY COMMENTS OF INTERMOUNTAIN WIND-2 Ths is consistent with the statutory definition of avoided costs. In contrast, an IRP-based methodology, based on utilty power supply models, is a backward looking embedded cost approach in which the new PURPA project, in effect, competes agaist the utility's embedded generating resource base, which likely includes heavily depreciated coal plants or seasoned hydro electrc facilties. Rates produced under this methodology will always be lower than forward looking rates, and while IRP based rates may be adequate for large scale projects with economies of scale, they will always be inadequate for small, tre PURP A projects, lacking economies of scale or scope. The Commission's Announced Intention to Make any Decision in this Matter Effective December 14, 2010, is Subject to Substantial Legal Doubt In Order No. 31231, the Commission purorts to make its decision to reduce the eligibilty cap effective December 14,2010, even though a decision on the merits of eligibilty reduction wil likely not occur until Febru of201 1. As noted above, Intermountain is in the final stage of contract negotiation for a power sales agreement and hopes to execute such an agreement within a matter of days. Should the Commission, against logic and good policy, decide to reduce the eligibilty cap effective December 14,2010, Intermountain fears PacifiCorp will not submit the contract for approval, in reliance of the purorted December 14 effective date of eligibilty reduction. Accordingly, Intermountain concurs in the Comments of the Nortwest and Intermountain Power Producers Coalition, which raise legal doubt about the Commission's proposal. (NIPCC Comments, Pg. 11). REPLY COMMENTS OF INTERMOUNTAIN WIND-3 The NIPCC Comments point to the regulatory doctrines of the prohibition against retroactive rate making and the fied rate doctrne. Intermountain agrees those doctrnes are applicable here. In addition, in Intermountan's view, these doctrnes are sub-sets of the more general proposition that as a legislative agency, the Commission may only act prospectively. The Commission does not have authority to look back in time and rearange legal rights that existed on a certn day in the past. Retrospective readjustment of legal rights is purely a judicial fuction, and, as been said many times, the Commission is not a cour. In light of this, Intermountain urges the Commission to think carefuly about its proposed retroactive effective date. As many paries have argued, reduction of the eligibilty cap would be bad public policy. The last thng the Commission should do is to compound policy error with legal error. If Any Reduction in Eligibilty is Thought Necessary, it Should be Narrowly Drawn As many paries have correctly observed, the only curent problem in PUR A implementation, which might possibly justify a reduction in rate eligibilty, is that of commercial scale wind projects being disaggregated into multiple legal entities each of which then quaifies for published avoided costs. In Intermounta's opinon all other issues raised by the Joint Petition are ones that can be discussed and resolved without the necessity of the proposed, across-the-board reduction of rate eligibilty, regardless of motive power or actu project size. As noted above, the offer of the utilty companies to implement IRP based contracting, in place of published avoided costs, is ilusory. It is not a solution to the problem of a moratorium that sweeps broader than necessar. REPLY COMMENTS OF INTERMOUNTAIN WIND-4 Other paries have suggested that the reduction of rate eligibilty apply only to projects with wind as the motive force, leaving the curent eligibilty cap in place for other generation technologies. Intermountain believes this approach is il-advised, for two reasons: First, it overlooks the meritorious claims of community-scale wind projects, such as Intermountain, to obtain published avoided costs. Second, it would have market-skewing effects. As the Commission has repeatedly said, good policy requires that the regulator not attempt to handicap generation technologies, choosing one over the other. Rather, generation technologies should compete with each other, based on their respective economics and other attibutes in a market-based way. An eligibilty cap applied to community scale wind projects, but not to similarly sized projects with other motive force, would do exactly what the Commission has said should not be done. Because neither the utilties IRP based proposal nor the suggestion to distinguish by generation type are reasonable solutions to the bad effects of a blanet moratorium, Intermountain endorses the concept advanced by Renewable Nortwest Project that "a better interim measure than lower the published rate threshold may be to prospectively adopt common ownership and control criteria designed to limit PURP A published rates to tre-communty scale projects." (RN Comments, Pg. 7). The Comments of the Idao Conservation League tae RNP's general concept a step fuer and propose more specific criteria: (1) whether the projects have common ownership and control; (2) whether the projects can operate in a coordinated maner; REPLY COMMENTS OF INTERMOUNTAIN WIND-5 (3) whether the projects share the same point of interconnection; and (4) whether the projects will be built within 12 months of each other. In light of ths Intermountan suggests the Commission encourage the paries to consider, discuss and potentially propose a suspension regime along these lines. In ths regard, Intermountan understands that Reply Comments to be fied by the Idaho Conservation League and Renewable Nortwest Project will conta a more specific proposal that fuher elaborates a common ownership test. Intermountain endorses the ICLIR proposal as a workable draf for discussion by interested paries. DATED this \~ day of Janua, 2011. TERMO,'lif WIN. D LLCBy: \J~ Dean . Miler Attorney for Intermountain. Wind LLC REPLY COMMENTS OF INTERMOUNTAIN WIND-6 CERTIFICATE OF SERVICE I hereby certify that on the Jú1fday of Januar, 2011, I caused to be served, via the methodes) indicated below, tre and correct copies of the foregoing document, upon: Jean Jewell, Secretar Idaho Public Utilties Commission 472 West Washington Street P.O. Box 83720 Boise, il 83720-0074 j jewellalpuc .state.id. us Hand Delivered U.S. Mail Fax Fed. Express Email Donovan Walker Lisa Nordstrom Idaho Public Utilties Commission 472 West Washington Street P.O. Box 83720 Boise, il 83720-0074 dwa1kercæidahopower.com 1nordstromalidahopower.com Hand Delivered U.S. Mail Fax Fed. Express Email Donald L. Howell, II Kristine A. Sasser Deputy Attorneys General Idaho Public Utilties Commission 472 W. Washington (83702) POBox 83720 Boise, il 83720-0074 don.howell~puc.idaho.gov krs.sasser~puc.idaho. gov Hand Delivered U.S. Mail Fax Fed. Express Email Michael C. Andrea A visita Utilties P.O. Box 3727 1411 E. Mission Ave Spokane, WA 99220-3727 Michae1.andreaalavistacorp.com uu.'-.'-X u.'- U.'-Ji .'-.'- U ~ Hand Delivered .'- U.S. Mail .'- Fax .'- Fed. Express .'- Email )( Hand Delivered .'- U.S. Mail .'- Fax .'- Fed. Express .'- Email ~ Daniel Solander Rocky Mountain Power One Uta Center 201 S. Main Street, Suite 2300 Salt Lake City, UT 84111 danie1.so 1anderalpacificorp.com REPLY COMMENTS OF INTERMOUNTAIN WIND-7 Ted S. Sorenson, P.E.Hand Delivered ~.. Birch Power Company U.S. Mail ~.. 5203 South 11th East Fax ~.. Idaho Falls, il 83404 Fed. Express ~.. tedêtsoreson.net Email 9£ Ronald L. Wiliams Hand Delivered ~.. Wiliams Bradbury U.S. Mail ~.. 1015 W. Hays Street Fax ~.. Boise, il 83702 Fed. Express ~.. ronêwillamsbradbury.com Email J4 Glenn Ikemoto Hand Delivered ~.. Margaret Rueger U.S. Mail ~.. Idaho Wind Fars, LLC Fax ~.. 672 Blair Avenue Fed. Express ~.. Piedmont, California 94611 Email )(glenniêEnvision Wind.com margaretêEnvision Wind. com Greg Ferney Hand Delivered ~.. Mimura Law Offce U.S. Mail ~.. 2176 E. Fraklin Road Fax ~.. Meridian, il 83642 Fed. Express ~.. gregêmimuralaew.com Email )t Thomas H. Nelson Hand Delivered ~.. P.O. Box 1211 U.S. Mail ~.. Welches, OR 97067 Fax ~.. nelsonêthnelson.com Fed. Express ~.. Email Ji Shelly Davis Hand Delivered ~.. Barker Rosholt & Simpson LLP U.S. Mail ~.. 1010 W. Jefferson, Suite 102 Fax ~.. P.O. Box 2139 Fed. Express ~.. Boise, il 83701-2139 Email j(brsêidahowaters.com Robert D. Kahn Hand Delivered ~.. Executive Director U.S. Mail ~.. Northwest and Intermountain Power Fax ~.. Producers Coalition Fed. Express ~.. 1 17 Minor Ave., Suite 300 Email r-Seattle, WA 98101 rkah(inippc.org REPLY COMMENTS OF INTERMOUNTAIN WIND-8 Don Sturtevant Hand Delivered ... Energy Director U.S. Mail ... J.R. Simplot Company Fax ... PO Box 27 Fed. Express ... Boise, il 83707-0027 Email Xdon.sturevant(ßsimplot.com Robert A. Paul Hand Delivered ... Grand View Solar II U.S. Mail ... 15960 Vista Circle Fax ... Desert Hot Springs, CA Fed. Express ... robertpaul(ßgmail.com Email ~ James Carkulis Hand Delivered ... Managing Member U.S. Mail ... Exergy Development Group of Idaho, LLC Fax ... 802 W. Bannock St., Suite 1200 Fed. Express . XBoise, il 83702 Email jcarkulis(ßexergydevelopment.com Scott Montgomery Hand Delivered ... President U.S. Mail ... Cedar Creek Wind, LLC Fax ... 668 Rockwood Dr.Fed. Express ... Nort Salt Lake, UT 84054 Email )t E-mail: scott(ßwestemenergy.us Dana Zentz Hand Delivered ... Vice President U.S. Mail ... Summit Power Group, Inc.Fax ... 2006 E. Westminster Fed. Express ... Spokane, W A 99223 Email Xdzentz(ßsumitpower.com JohnR. Lowe Hand Delivered ... Consultant to Renewable Energy Coalition U.S. Mail ... 12050 SW Tremont St.Fax ... Portland, OR 97225 Fed. Express ... jravensanarcos(ßyahoo.com Email :x Bil Piske, Manager Hand Delivered ... Interconnect Solar Development, LLC U.S. Mail ... 1303 E. Carer Fax ... Boise, ID 83706 Fed. Express ... bilpiske(ßcableone.net Email ~ REPLY COMMENTS OF INTERMOUNTAIN WIND-9 Wade Thomas General Counsel Dynamis Energy, LLC 776 W. Riverside Dr., Suite 15 Eagle, il 836 16 wthomas~dynamisenerg.com Brian Olmstead General Manager Twin Falls Canal Company PO Box 326 Twin Falls, il 83303 olmstead~tfcanal.com Ted Diehl General Manager North Side Canal Company 921 N. Lincoln St. Jerome, il 83338 nscanal~cableone.net Peter J. Richardson Gregory M. Adams Richardson & O'Lear, PLLC PO Box 7218 Boise, ID 83702 peter~richardsonandolear.com greg~richardsonandolear.com Bil Brown, Chair Board of Commissioners of Adams County PO Box 48 Council, ID 83612 bdbrown(ifrontier .net Hand Delivered U.S. Mail Fax Fed. Express Email Hand Delivered U.S. Mail Fax Fed. Express Email Hand Delivered U.S. Mail Fax Fed. Express Email Hand Delivered U.S. Mail Fax Fed. Express Email Hand Delivered U.S. Mail Fax Fed. Express Email ........ )l ........... X .......... j( ........... ~ .........~ BY: ~Hé'Nrtiulo\\m! ~. McDEVITT & MILLER LLP - ~ REPLY COMMENTS OF INTERMOUNTAIN WIND -10