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Home My WebLink About20120314Response to Idaho Power Motion.pdfPeter J. Richardson ISB # 3195 Gregory Adams ISB # 7454 RICHARSON & O'LEARY PLLC 515 N. 27th Street Boise, Idaho 83702 Telephone: (208) 938-7901 Fax: (208) 938-7904 greg(ßrichardsonandolear.com peter(ßrichardsonandolear .com RECEIVED 2012 MAR 14 PH 4: 46 Attorneys for Exergy Development Group of Idaho, LLC BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE ) COMMISSION'S REVIEW OF PURP A QF ) CONTRACT PROVISIONS INCLUDING ) THE SURROGATE AVOIDED ) RESOURCE (SAR) AND INTEGRATED ) RESOURCE PLANING (IRP) ) METHODOLOGIES FOR CALCULATING ) PUBLISHED AVOIDED COST RATES CASE NO. GNR-E-ll-03 EXERGY'S RESPONSE TO IDAHO POWER'S MOTION FOR TEMPORARY STAY OF ITS OBLIGATION TO ENTER INTO NEW POWER PURCHASE AGREEMENTS WITH QUALIFYING FACILITIES COMES NOW, Exergy Development Group ofIdaho, LLC ("Exergy") in response to Idaho Power Company's ("Idaho Power") Motion for Temporar Stay of its Obligation to Enter into New Power Purchase Agreements with Qualifying Facilties ("Motion"); Memorandum in Support of Idao Power Company's Motion ("Memorandum") and Affdavit of Randy C. Allphin in Support of Idaho Power Company's Motion ("Affdavit") and urges the Idaho Public Utilties Commission ("Commission") to deny Idaho Power's Motion in its entirety and to maintain the schedule currently in place for prosecuting this docket. 1 ~ EXERGY'S RESPONSE TO IDAHO POWER'S MOTION FOR A STAY THE IDAHO PUBLIC UTILITIES COMMISSION DOES NOT HAVE THE AUTHORITY TO ALLOW IDAHO POWER TO OPT OUT OF ITS OBLIGATIONS UNDERPURPA One would expect that Idaho Power would have opened its legal memorandum in support of its extraordinar request to suspend its obligation to purchase QF power with a detailed and cogent exposition ofthe jursdictional basis for such an action. Idao Power, however, does not get to the jurisdictional question until page 17 of its Memorandum. No citation is made to a FERC regulation or federal statute granting the Idaho Commssion the authority to impose a moratorium on Idao Power's PURPA obligations under federal law. That is because no such authority exists. Idaho Power cites thee other states that it asserts have imposed moratoria on PURPA. Of course, PUC decisions from other states do not and canot repeal PURP A and are not precedent controllng this Commission's actions. Idaho Power cites to a Colorado PUC order imposing a moratorium on new PURP A projects as support for its contention that the Commission has the authority to impose a moratorium. 1 Of course, Colorado PUC decisions are not controllng law in Idaho and the fact that the Colorado Commission engaged in extra jursdictional acts does not give the Idaho PUC the legal authority to do the same. That decision was apparently not appealed on jursdictional grounds -- probably because four broad categories of PURP A developers were grandfathered if they merely "had contacted Public Service prior to the filing of this application."i Idaho Power also cites to a California Public Utilties Commission docket (RO 1-10-024), which likewise does not control Idaho Commission actions. Oregon is the final state Idaho Power refers this Commission. It cites an order only issued two weeks ago which is not final and may yet be subject to a motion for reconsideration and/or appealed from. The only federal citation is to a FERC enforcement docket initiated by two Californa utilities seeking protection from being forced to execute contracts that they alleged violated 1 Application of the Pub. Servo Co. of Colo for a Moratorium Regarding Indep. Power Prod. Faciliies, Colo. PUC Dec. No. C87-1690 (Dec. 16, 1987) 2,d. at,- 37. 2 - EXERGY'S RESPONSE TO IDAHO POWER'S MOTION FOR A STAY PURP A. According to FERC, "we find that the California Commission's process of determining avoided costs did not comply with PURPA.,,3 FERC went on to explain: Because the California Commission's procedure was unawfl under PURPA, Edison and San Diego canot lawflly be compelled to enter into contracts resulting from that procedure. At this junctue, there are no executed contracts. However, in order to avoid paries spending fuer time and resources in pursuing contracts that would be unlawfl under PURP A, we believe it would be appropriate for the Californa Commission to stay its requirements directing Edison and San Diego to purchase pending the outcome of fuher administrative procedures in accordance with PURP A,,4 Here, unlike in SoCal and Edison, the issue of whether the Idaho PUC's implementation of PURP A creates rates in excess of avoided costs has not been adjudicated. The IRP methodology has been in place for many years. Indeed, Idaho Power only recently asked the Commission to use that very methodology for wind and solar projects going forward, which this Commission adopted less than nine months ago. Order No. 32262, Case No. GNR-E-I1-0L. Idaho Power may not like the results of the process it advocated for, but it may not complain about the process or procedure. The importance of denying Idaho Power' Motion outright and swiftly is underscored by fact that the other two investor owned utilties are surely going to fie 'me too' pleadings effectively makng Idaho Power's Motion for a stay a state-wide problem which will broaden the legal and factual issues that will have to be dealt. IDAHO LAW DOES NOT AUTHORIZE A STAY Idaho Power notes that Idaho Code § 61-623 gives the Commission the authority to suspend rates up to six months while it investigates proposed rate changes. Memorandum at 20. It also points to the Federal Power Act ("FPA") which permits FERC to suspend rates for up to five months while it investigates proposed rate changes. fd.. Of course this assertion is meanngless in the PURP A context, because the Idaho Code and FP A sections cited only allow the Commissions to suspend proposed changes in the rates charged by utilties to ratepayers. In addition, Idaho Code § 61-623 only applies to rate increases. Here, of course, Idaho Power is 3 Southern California Edison Company, San Diego Gas & Electric Company, Docket Nos. EL95-16-000 and EL95-19-000, respectively. 70 FERC 4f61,215 at p. 26, emphasis provided (1995).4 Id. at pp 26 - 27. 3 - EXERGY'S RESPONSE TO IDAHO POWER'S MOTION FOR A STAY seeking a rate decrease and not a rate increase. These laws simply do not apply to the rates paid by utilties to QF developers pursuant to PURPA. Indeed, tang the utilty's argument to its absurd conclusion, if all rates are suspended pending a rate change, then it would seem reasonable that retail ratepayers would be exempt from paying any rates pending the resolution of a rate case by a utility. THE SKY is NOT FALLING Idaho Power's doomsday predictions are overblown and not supported by what few facts there are in ths case. The only evidence to date in this docket is the unexamined direct testimony of the utilties and the short Affidavit by Mr. Allphin in which he lists several PURP A projects that "have moved beyond just a phone call and onto more serious inquiries within the last six months." A "serious" inquiry as opposed to "just a phone call" is a weak stadard upon which to base a far reaching decision that will, in all likelihood destroy the economic viabilty of each and every project on Mr. Allphin's list. This is especially tre in light of the soon-to-be expired federal tax credits. Certainly, it is not Idaho Power's goal to prevent PURPA projects from being encouraged to be developed as is required of this Commission under federal law. Finally it is well known in the development industry that the mortity rate associated with "projects" is extremely high. Certainly not even Mr. Allphin seriously believes that all of the listed projects will, in fact, be developed. The listed projects would, if all were built, add about 500 MW of new capacity on Idaho Power's system. Why this is a bad thing is never explained, except for identifying the expense to ratepayers over the lives of these projects and an assertion that ifIdaho Power gets its way, the new avoided cost rates wil reduce that amount. Whle somewhat interesting, the bare numbers have no context and canot support a moratorium against PURP A. The utilties have made their filings and their assertions in this docket but those fiing and assertions have not yet been 4 - EXERGY'S RESPONSE TO IDAHO POWER'S MOTION FOR A STAY challenged or placed under the scrutiny of a contested hearng. In short, only one side of the storey has been told. There are factors that suggest the IRP methodology under states the avoided cost rates which will surely be presented to the Commission for its consideration. Due process obviously requires affording both sides the opportunty to present their case prior to curailing one side's rights - "Trial ofan issue of fact necessitates opportunty to present evidence and not by only one side to the controversy." Lawrence Warehouse Co. v. Rudio Lumber Co. 89 Idao 389, 396, 405 P.2d 634 (1965), internal quotation omitted. The addition of 500 MW of new PURPA projects is less 'distubing' in light of Idao Power's recent application to place the 300 MW Langley Gulch gas plant in rates. If successful, that single plant will increase retail rates by seven percent. In addition, ratepayers pay for that plant regardless of its actual usage. Quite the opposite is tre for PURP A projects, which do not get paid if they do not produce. Perhaps these new QF projects will be suffcient such that the Langley Gulch plant will prove to be unecessar. At a minimum, the uncertinty and cost of the natural gas supply for this new plant will be obviated by the addition of these new QF projects. Idaho Power's failure to consider PURPA potential in its Integrated Resource Plan may result in its constrction of uneeded plant such as Langley Gulch. INTERIM 'RELIEF' IS FICTIONAL Idaho Power proposes four interim "relief' options should the Commission not grant a stay or moratorium beginng on page 25 of its Memorandum. None of the interim relief options are valid as they all effectively create the stay Idaho Power seeks in the first place. Making the rates contained in power purchase agreement subject to ths Commission's final determination in this case would cause such uncertainty in the markets such the developers would not be able to move forward on their projects. Using Idaho Power's proposed rates for interim contracts is likewise unacceptable because those rates will surely not be the final rate. 5 - EXERGY'S RESPONSE TO IDAHO POWER'S MOTION FOR A STAY The low rate coupled with the uncertainty of what the final rate may be wil effectively freeze the market. Limiting contracts to one year would make it impossible to finance and build such a project. Finally, forcing all QF projects to use Schedule 86 is effectively a backhanded moratorium because PURP A explicit allows the QF to enter into a fixed term obligation and not just an as available sale, which is essentially what Schedule 86 is. 18 C.F.R. iì 292.304(d)(2)(ii). IDAHO POWER'S MOTION SHOULD BE DENIED For all of the forgoing reasons, Idaho Power's Motion should be denied DATED this 14th day of March, 2012. RICHARDSON & O'LEARY PLLC By: Peter J. Rich dson, ISB #3195 RICHASON & O'LEARY, PLLC 6 - EXERGY'S RESPONSE TO IDAHO POWER'S MOTION FOR A STAY CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 14th day of March, 2012, a tre and correct copy of the with and foregoing RESPONSE TO IDAHO POWER'S MOTION FOR A STAY was served as shown to: Jean D. Jewell, Secretar Idaho Public Utilties Commission 472 West Washington Boise, Idaho 83702 j ean.jewell(ßpuc.idaho. gov lL Hand Delivery _U.S. Mail, postage pre-paid Facsimile X Electronic Mail Donald Howell Kris Sasser Idaho Public Utilities Commission 472 West Washington Boise, Idaho 83702 donald.howell(ßpuc.idaho. gov krisine.sasser(ßpuc.idaho. gov lL Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail Donovan E. Walker Lisa D. Nordstrom Idaho Powe Company POBox 70 Boise, ID 83707-0070 dwalker(ßidahopower.com lnordstrom(ßidahopower.com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail Michael G. Andrea Avista Corporation P.O. Box 3727 Spokane, W A 99220 michael.andreaCiavistacorp.com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail Electronic Copies Only: Ken Kaufman Lovinger Kaufman LLP 825 NE Multnomah Ste 925 Portland, OR 97232 Kaufman(ßlklaw.com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail Daniel Solander PacifiCorp/dba Rocky Mountain Power 201 S Main St Ste 2300 Salt Lake City, UT 84111 danel.solanderCipacificorp.com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile -X Electronic Mail Dean J. Miler McDevitt & Miler, LLP 420 W. Banock St. Boise, ID 83702 j oe(ßmcdevitt-miler .com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail Thomas H. Nelson Renewable Energy Coalition PO Box 1211 Welches, OR 97067-1211 nelson(ßthnelson.com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail JohnR. Lowe Consultant Renewable Energy Coalition 12050 SW Tremont St Portland, OR 97225 jravenesanarcos(ßyahoo.com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail R. Greg Ferney Mimura Law Offces PLLC Interconnect Solar Development, LLC 2176 E Franlin Rd Ste 120 Meridian, ID 83642 gregCimimuralaw.com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail Bil Piske, Manager Interconnect Solar Development, LLC 1303 E. Carer Boise, ID 83706 bilpiskeCicableone.net _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail Ronald L. Wiliams Wiliams Bradbur, PC 1015 W. Hays Street Boise, ID 83702 ron(ßwiliamsbradbur.com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail Wade Thomas General Counsel Dynamis Energy, LLC 776 W. Riverside Dr., Ste 15 Eagle,ID 83616 wthomas(ßdynamisenergy.com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail . . Shelley M. Davis Barker Rosholt & Simpson LLP 1010 W. Jefferson St (83702) PO Box 2139 Boise,ID 83701 smd(ßidahowaters.com Brian Olmstead General Manager Twin Falls Canal Company PO Box 326 Twin Falls, ID 83303 olmstead(ßtfcanal.com Robert A. Paul Grand View Solar II 15690 Vista Circle Desert Hot Springs, CA 92241 robertapaul08(ßgmail.com James Carkulis Exergy Development Group of Idaho, LLC 802 W. Banock, Ste 1200 Boise, ID 83702 j carkulis(ßexergydevelopment.com Aron F. Jepson Blue Ribbon Energy, LLC 10660 South 540 East Sandy, UT 84070 aronesg(ßaol.com M.J. Humphres Blue Ribbon Energy, LLC 4515 S. Amon Rd. Amon, ID 83406 blueribbonenergyCigmail.com Ted Diehl General Manager North Side Canal Company 921 N. Lincoln St. Jerome, ID 83338 nscanal(ßcableone.net _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail . . Bil Brown Adams County Board of Commissioners PO Box 48 Council, IT 83612 bdbrown(ßfrontiernet.net Ted S. Sorenson, PE Birch Poer Company 5203 South 11 th East Idaho Falls, ID 83404 ted(ßtsorenson.net Glenn Ikemoto Margaret Rueger Idaho Windfars, LLC 6762 Blair Avenue Piedmont, CA 94611 glenni(ßenvisionwind.com margaret(ßenvisionwind.com Megan Walseth Decker Senior Staf Counsel Renewable Northwest Project 917 SW Oak Street Ste 303 Portland, OR 97205 meganCirnp.org Benjamin J. Otto Idaho Conservation League 710 N. Sixth Street (83702) POBox 844 Boise, ID 83701 botto(ßidahoconservation.org Ken Miler Snake River Allance PO Box 1731 Boise, ID 83701 kmilerCisnakeriverallance.org _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail ~ ~ Robert D. Kah Executive Director Northwest & Intermountain Power Producers Coalition 1117 Minor Ave., Ste 300 Seattle, W A 98101 rkahCinippc.org Don Sturevant Energy Director J.R. Simplot Company PO Box 27 Boise, ID 83707-0027 don.stuevant(ßsimplot.com _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail _ Hand Delivery _U.S. Mail, postage pre-paid Facsimile .. Electronic Mail (J~~ Peter J. Richardson