20120720Legal Brief.pdf

Williams • Bradbury
A T T 0 R N E Y S A T L A W RECEIVE D
20I2JUL20 PM 1"25
IDAHO IUBLiC
July 20, 2012 UTILITIES COMMISSI0r4
Ms. Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
Re: GNR-E-11-03
Dear Ms. Jewell:
Please find enclosed an original and seven copies of Memorandum of the Renewable
Energy Coalition and Dynamis Energy for filing in the above referenced case.
Thank you for your assistance in this matter. Please feel free to give me a call should
you have any questions.
Sincerely,
Ronald L. Williams
RLW/jr
Enclosures
1015 W. Hays Street - Boise, ID 83702
Phone: [phone] - Fax: [phone] - www.williamsbradbury.com
Ronald L Williams, ISB No 3034 RECEIV
Williams Bradbury, P.C. 2012 JUL 1015 W. Hays St. I 26
Boise ID, 83702 ID rUPJL Ilk- Telephone: [phone] U i ILJTIES COMj
Fax: [phone]
ronwilliamsbradbury.com
Attorneys for Renewable Energy Coalition and Dynamis Energy LLC
BEFORE THE IDAHO PUBLIC UTILITES COMMISSION
IN THE MATTER OF THE COMMISSION'S)
REVIEW OF PURPA QF COTRACT )
PROVISIONS INCLUDING THE )
SURROGATE AVOIDED RESOURCE (SAR))
AND INTEGRATED RESOURCE )
PLANNING (IRP) METHODOLOGIES FOR )
CALCULATING AVOIDED COST RATES ')
Case No. GNR-E-1 1-03
LEGAL MEMORANDUM OF THE
RENEWABLE ENERGY COALITION
AND DYNAMIS ENERGY
This legal memorandum is submitted on behalf of the Renewable Energy Coalition
("REC" or "the Coalition") and Dynamis Energy LLC ("Dynamis"). These parties adopt by
reference the briefing of the Twin Falls Canal Company and Northside Canal Company, and
those legal positions taken in the testimony of Donald W. Schoenbeck.
I
RENEWABLE ENERGY CREDITS AND ENVIRONMENTAL
ATTRIBUTES ARE PRIVATE PROPERTY RIGHTS OF
DEVELOPERS AND THE COMMISSION LACKS JURISDICITON
TO DETERMINE OTHERWISE
1. RECS as Separable. Intangible, Private Property. Renewable Energy
Credits and other environmental attributes associated with renewable energy power
production ("RECs") are "tradable environmental commodities that monetize the
environmental and social benefits of the non-energy attributes of renewable energy
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 1
generation." For each megawatt ("MW") of power generated from a renewable source, two
separate commodities are produced: (i) electric power, and (ii) RECs.2 A REC separated
from the underlying power "carries with it the value imbedded in the environmental
attributes of the generation along with all environmental claims."3
PURPA4 mandates the purchase by electric utilities of power produced by both
qualifying cogenerators and small power producers, but PURPA does not create RECs or
otherwise dictate ownership of RECs. PURPA only mandates the purchase of power by the
utility from the PURPA qualifying facility ("QF") that the utility would otherwise generate
itself.5 FERC has also clearly noted that the QF avoided cost rates established by a state
commission "are not intended to compensate the QF for more than the capacity and energy"
delivered by the QF to the utility.6 In short, PURPA is blind to whether the QF power is
"green" power, or whether it is fossil fueled cogenerated power.
The monetary value of a REC is wholly a creature of state law. Specifically, RECs
exist and are valuable because of the twenty-plus states that have legislatively mandated
renewable portfolio standards ("RPS") for utilities providing electric service in those states.7
Many western States, including Washington, Oregon and California, have legislatively
mandated RPS standards. Idaho has not. Conversely, for states like Idaho without a RPS
standard, RECs have no in-state regulatory compliance value to the utilities purchasing
1 Application, IPC-E-08-24, In the Matter of the Application of Idaho Power Company for an Order
Authorizing the retirement of its Green Tags, p. 2. See also IPUC Order No. 30868.
2
3
"The Public Utilities Regulatory Policy Act of 1978, 16 U.S.0 § 824a-3(a)(2).
5
"American Ref-Fuel Co., 107 FERC 161,016,1 15 (2004).
7 Holt, Who Owns Renewable Energy Certificates?, Ernest Orlando Lawrence Berkley National Laboratory,
April 2006.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 2
power from renewable energy facilities. Consequently, the dispute over REC ownership in
this case is a dispute over the ownership of intangible private property, and who has the right,
in interstate commerce, to monetize this private property value. Putting aside questions of
whether a regulatory transfer of RECs from a developer to a utility is a regulatory taking, or a
violation of the Commerce Clause of the U. S. Constitution 8, it is clear that the Commission
does not have the statutorily authority to determine the ownership of RECs.
2. The Idaho Commission Lacks the Necessary Statutory Authority to Determine
the Ownership of Renewable Energy Credits. A series of cases dating back to 1979 has
continued to define and restrict the extent of the Commission's jurisdiction to only those
matters expressly delineated in statute. That case, with facts analogous to this proceeding,
was Washington Water Power Co. V. Kootenai Environmental Alliance 9 ("WWP"). In
WWP, the Kootenai Environmental Alliance filed a complaint at the PUC alleging, among
other things, that WWP could not use its billing envelope to communicate political messages
to customers. On this point the Commission agreed and ordered WWP to cease including
political messages in customers' bills. WWP appealed to the Idaho Supreme Court on the
grounds that: (i) the Commission Order "violated the [free speech] constitutional rights of the
Company," and (ii) that the Order "constituted a rulemaking procedure beyond the authority
of the Conmiission."° In overturning the Commission's order, based on this second
argument, the Court noted that the powers expressly granted the Commission by Idaho Code
§ 61-501 et. seq. can be generally categorized as matters that "require the technical expertise
8 Dynamis and the Coalition are also of the opinion that a Commission ordered transfer of RECs from QFs to
utilities under the Commission's jurisdiction would likely be an unlawful taking of a QF's property rights
without just compensation, in violation of the takings clauses of the Idaho and U.S Constitutions. U S Const.
Amend. V. ci. 4; Idaho Cost. Art. 1 14, and a violation of the Commerce Clause of the U. S. Constitution, U S
Const., Art. I, § 8, ci 3.
99 Idaho 875, 591 P.2d 122 (1979)
'° 591 P. 2d. at 123.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 3
of a commission."11 The Court then found that "the subject matter of the Commission's order
at issue here does not deal with the subject matter traditional regulated by the public utilities
commissions and does not fall into a category of regulation which requires the technical
expertise of a commission as contrasted with a legislature." 12 The Court also noted that "[it]
will construe narrowly those powers delegated by the legislature to the Commission where it
is contended that a fundamental right, such as freedom of speech, is to be thereby curtailed or
diluted."3 (emphasis added) The court concluded its holding in WWP as follows: "In sum,
we do not accept the argument of the Commission that their authority. . . should be so
broadly construed as beyond the traditional and orthodox ratemaking function. If the
legislative branch desires the Public Utilities Commission to have such authority, it must be
provided by precise language."4 Because the Court invalidated the Commission Order on the
second point, it did not address the constitutional issue. 15
Two additional Idaho Supreme Court cases are instructive as to the Commission's
lack of jurisdiction outside statutorily authorized areas. In Alpert v. Boise Water
Corporation 16 the District Court was asked to determine the validity of franchise contracts
between the utilities and certain cities. Boise Water claimed that the matter was for the
Commission, not the court, to decide. In rejecting this argument, the Idaho Supreme Court
'1 Id. at p. 129.
12
' Id citing Kent v. Dulles, 357 U.S, 116, 78 S. Ct. 1113, 2 L. Ed. 2 nd (1958)
14 id.
15 1d See also footnote 8 above where Dynamis and the Coalition expressly reserve the right assert a
constitutional "takings" argument.
118 Idaho 136, 140,795 P. 2 nd 298,302(1990).
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 4
noted that the question presented (the validity of a franchise contract) "clearly rais[ed] legal
issues to be resolved by the courts rather than an administrative agency." 7
Much more recently, the Idaho Supreme Court, in Ada County Highway District v.
Idaho Public Utilities Commission 18, rejected an Order of the Commission holding that it had
the statutory authority to order relocation of utility facilities owned by third-party
beneficiaries, for the reason that facilities relocation was a "service" authorized by statute. 19
The Court noted that the Commission "certainly has the authority to determine the costs that
the Company [Idaho Power] can charge a private person who requests services from the
Company, 20 but that the Commission could "not point to any statute" authorizing the
Commission to "require a third party to pay for services that the third party did not
request."2' Without such express jurisdiction, the Court found that such an exercise of power
"exceed[ed] the authority of the IPUC."22
As a final point, it is worth noting that both the utilities in this case, as well as the
Commission, appear to agree that the Commission does not have statutory authority to
determine REC ownership. During the course of the 2012 Idaho Legislative Session the
utilities drafted and had printed Senate Bill 1364 ("SB 1364"), a copy of which is attached as
Exhibit No. 802 to this Memorandum. That bill, had it been enacted into law, would have
been a clear legislative determination that "environmental attributes" (RECs) associated with
17 Id. at p. 302, 303. The Court also generally summarized powers granted to regulatory commission, as
follows: "As a general rule, administrative authorities are tribunals of limited jurisdiction and their jurisdiction
is dependent entirely upon the statues reposing power in then and they cannot confer it upon themselves.
18151 Idaho 2, 253 P. 3d675 (2011)
19253 P. 3d. at 682; referencing power granted pursuant to I.C. §61-502, 61-503 and 61-507.
20 1d
21 Id.
22 Id. at p. 683.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 5
QF power sales to the utility are "attributes of the power purchased by the utility." SB 1364
was not, however, enacted into law. In fact, there were no hearings on it.
As SB 1364 was languishing in the Legislature, a second attempt to clarify REC
ownership, or more accurately - the Commission's authority to determine REC ownership
- appeared. This draft legislation would have granted the Commission explicit statutory
authority "to determine the ownership of the environmental attributes generated by or
associated with PURPA qualifying facilities." A copy of that draft legislation, which never
received a bill number, is attached as Exhibit No. 803 to this Memorandum.
It is a reasonable assumption to make that both pieces of legislation were drafted and
presented, based on a recognition by the utilities and the Commission, that without such
legislation, the Commission lacks authority to otherwise determine ownership of RECs and
other environmental attributes. That assumption remains the correct assumption.
The Court's admonition in WWP, that it will narrowly construe the Commission's
authority on constitution matters such as "freedom of speech," is equally applicable to REC
"private property rights." Without direct, specific legislation authorizing the Commission to
adjudicate or regulate REC ownership, the Commission is simply barred from otherwise
making such a determination.
II
IDAHO POWER PROPOSED SCHEDULE 741S A VIOLATION OF
PURPA, AN ADMINISTRATIVE ABROGATION OF EXISTING
CONTRACTS, AND RESTS ON THE FAULTY CLASSIFICATION
OF THE VAST MAJORITY OF IDAHO POWER'S GENERATION
AS "MUST RUN" AND "BASE LOAD"
Idaho Power proposes a new Schedule 74 which would allow it to curtail QF
generators when the company determined that "operational circumstances" would require the
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 6
company to dispatch "higher cost, less efficient resources to serve system load, ,23 or that
certain "Base Load Resources [all run of river plants, the Hells Canyon hydro complex, Jim
Bridger (coal), Valmy (coal), Boardman (coal) and Langley Gulch (natural gas)]" would be
"unavailable for serving the next anticipated load. ,24
1. Proposed Schedule 74 Violates PURPA: On its face, PURPA Rule 304(f)
says a utility "will not be required to purchase electric energy or capacity during any period
during which, due to operational circumstances, purchases from qualifying facilities will
result in costs greater than those which the utility would incur if it did not make such
purchases, but instead generated an equivalent amount of energy itself. ,25 As to this point -
both Idaho Power witness Park and Staff witness Sterling misinterpret FERC's regulations
under PURPA, as evidenced by FERC's own words to the contrary.
FERC's own interpretation of this Rule is that it involves a very limited exception to
a utility's obligation to purchase QF Power. As FERC said in Order No. 69, it "does not
intend that this paragraph [304(f)] override contractual or other legally enforceable
obligations incurred by the utility to purchase from a qualifying facility" where the avoided
cost rates contained in a contract represent the "average value of the purchase over the
duration of the obligation." 26
For decades, this Commission has set avoided costs rates, based on "average values."
That "averaging" has occurred in multiple ways, including but not limited to (i) adoption of a
surrogate avoided resource ("SAR") with capital costs projected over a 20 year basis, (ii)
23 This is curtailment for "higher cost, less efficient resources would be a curtailment for "economic" purposes,
and not for "operational circumstances," as represented by Ms. Park.
24 Park, DI, Exhibit No. 5, P. 2.
25 18 C.F.R292.304(t)(1).
26 Order No. 69,45 Fed. Reg. 112,214, 12,228 (1980).
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 7
avoided energy costs based on AURORA computer modeling of long-term regional average
energy costs; (iii) seasonalization (i.e., 'averaging') of avoided costs above and below the
mean, (iv) rate adjustments above and below the 'average' for light and heavy load hours,
and (v) avoided cost discounts for energy delivered by intermittent resources, such as wind
and solar.
In Entergy Servs. Inc., FERC recently reaffirmed that Rule 69 provides a very rare
opportunity to curtail QFs, when it stated: "[I]n such circumstances [where avoided cost rates
are calculated on an average or composite basis and already reflect variations in value], the
utility is already compensated, through the lower rate it generally pays for unscheduled QF
energy, for periods during which that energy's value is lower than the true avoided cost." 27
In this completely analogous case FERC held that Entergy was not authorized to curtail QF
purchases on a unilateral basis. in effect, FERC said that a Rule 304(f) curtailment can only
occur where a QF has elected an avoided cost calculated as of the time of delivery 28, but not
where avoided costs are instead calculated "over a specified term" and "at the time the
[legally enforceable] obligation is incurred. ,29 It is a very simple and direct concept— where
a QF elects avoided cost rates calculated (i) over a specific time frame [e.g., 20 years], and
(ii) at the time of establishing a LEO, then the ability of a utility to curtail a OF simply does
not legally exist.
As mentioned above, Idaho Power witness Park also asserts that Rule 304(f) allows
Idaho Power to interrupt QF generators based on economic reasons .
30 FERC again disagrees
27 EntergJI Servs., Inc., 137 FERC ¶61,199 at PP 52-58 (201 l(("Entergy")
28 18 C.F.R292.304(d)(1)
29 18 C.F.R. 292.304(d)(2)
30 Park, DI pp 14, 15.
Memorandum of the Renewable Energy Coalition and Dynamis Energy -- Page 8
with Ms. Park. In Sweacker v. FERC held to the contrary, that: "Section
292.304(f) of the Commission's regulations, when read in conjunction with the relevant
explanation in Order No. 69, applies only to such low loading scenarios, and cannot be relied
Won to curtail purchase of unscheduled OF energy for general economic reasons."32 Neither
should Idaho Power be authorized to unilaterally curtail QF purchases, pursuant to proposed
Schedule No. 74.
2. Idaho Power Overreaches in Categorizing Almost All of its Generation,
Except its Gas Peaking Plants, as "Must Run" Facilities. Idaho Power presents a very
unique view of how electrical generating assets actually work, in the context of an integrated
supply system. In essence, Idaho Power now insists that virtually all of its generating
resources, other than gas-fired peaking plants, are essentially unable to respond to load
changes in light or low load conditions, when the company is also purchasing QF generation.
To the contrary, there is ample and overwhelming testimony by multiple intervenors
that much or most of the company-owned resources which it classifies as "must run" are, in
fact, not. That testimony will not be summarized and argued here; with one exception.
Langley Gulch.
It is duplicitous for Idaho Power to advocate for the approval, construction and rate-
basing of Langley Gulch as a mid-peak or intermediate-class generating asset with flexible
response capability, only to now insist that Langley is a base-load asset that "must run,"
while interrupting PURPA generators. The very words used by Idaho Power on its own web
site to describe Langley Gulch are:
In addition to providing electricity for Idaho Power's customers, Langley
31137 FERC 161200; 2011 WL 6523727, p. 5.
32
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 9
Gulch will also help to integrate the large amount of wind and other
renewable resources Idaho Power expects to have on its system in the near
term.
The new plant will be able to increase or decrease generation quickly to
respond to the variable and intermittent nature of renewable resources.33
FERC's own definition of "must run" would not include Langley Gulch, for the
reason that Langley is "able to increase [its] output levels rapidly."34 Siemens own
description of its generating equipment installed at Langley, is that Langley is a "flex plant"
configuration and the "best solution for peaking to intermediate duty dispatch. ,31 Clearly, the
designation of Langley in this case as "must run," for the purpose of then allowing Idaho
Power to Curtail QF generation, lacks any semblance of legitimacy and credibility.
3. Not all OF's that would be Subject to Schedule 74 have PPAs with avoided
cost rates based on the SAR Methodology. Staff Witness Sterling supports proposed
Schedule 74 because he believes that the SAR methodology employed by the Commission
for the past several decades did not accurately or adequately get the long-term avoided cost
averaging process right. The Commission may, or may not have, correctly average hourly
avoided cost rates into long term average rates. However, the fact that the Commission did
so, by adopting a SAR methodology, and then by massaging (i.e., "averaging") the flat, long-
term SAR rate to account for seasons, hours and intermittency, cannot be obscured by an
argument that because it may have been done poorly, that it was not done at all.
At the core of Mr. Sterling criticism of the SAR methodology as not involving
[correct] averaging, is his assertion that this methodology fails to properly assign energy
values for light or low load hours. In his words:
Looper, DI, P. 5 (emphasis added)
Schoenbeck, DI, P. 42
Id.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 10
Under the SAR methodology for computing published avoided cost rates,
the method is based solely on the estimated cost of building and operating
a CCCT, the surrogate avoided resource. There is clearly no attempt to
model low loading scenarios, or for that matter, any other load scenarios.
* ****
Quite simply, the SAR methodology considers only the CCCT surrogate,
independent of any other resources and system conditions, and assumes
that it will be operated during all hours when it is available.36
What Mr. Sterling fails to recognize, as does Idaho Power, is that not all QF PPAs
have avoided cost rates based on the SAR, and some QFs, such as Dynamis, have
contractually agreed not to operate in light load hours. Yet, they would still be subject to
Schedule 74 interruptions. As Idaho Power's Application for approval of the Dynamis PPA
said: "The energy prices in the FESA are derived from Idaho Power's AURORA economic
dispatch model for this Facility's estimated energy shape."37 The Dynamis Application at the
PUC, drafted by Idaho Power, went on to note: "Seller only plans to deliver energy during
Heavy Load and Holiday Standard Energy hours and does not intend to produce and deliver
M Light Load energy to Idaho Power."38
In fact, the Dynamis PPA with Idaho Power has rigorous contract provisions
prohibiting light load hours' generation. Furthermore, the energy rates contained in the
Dynamis PPA were calculated by Idaho Power's AURORA model to simulate the project's
cost to Idaho Power, for each hour of the 20 year contract period. This includes an
assumption that Dynamis is not generating in light load hours, when prohibited from doing
so. Attached as Exhibit 804 are excerpts from the Dynamis IPUC Application, Appendix E
36 Sterling, Reb, P. 6.
37 Application, P. 4,5. IPC Case No. E-1 1-25, In the matter of the Application ofIdaho Power Company for a
Determination Regarding the Firm Energy Sales Agreement for the Sale and Purchase of Electric Energy
Between Idaho Power Company and Dynamis Energy, LLC
38 id.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 11
from the Dynamis contract showing monthly energy deliveries, by the hour, and Appendix F
showing the IRP derived monthly heavy load avoided cost prices, for 20 years.
Considering the complex IRP modeling of avoided cost prices contained in the
Dynamis PPA (as Exhibit 804 shows), as well as the contract restriction prohibiting light
load hours delivery, it is impossible to categorize Dynamis PPA as one where "there is
clearly no attempt to model low-load scenarios. "39 And, as Mr. Sterling suggests, if
Schedule 74 is justified in order to correct for pricing deficiencies because all Schedule 74
QFs are "assume[d] that it will be operated during all hours when it is available," then
Schedule 74 should have no application to any QF with IRP derived avoided cost rates. Yet,
Idaho Power insists that Schedule 74 should apply to Dynamis, because it is not dispatchable.
Such disregard, and disrespect, for the complex, innovative terms and conditions contained in
the Dynamis PPA, can be categorized as nothing other than an attempt to unilaterally "re-
open" the Dynamis PPA, in order for Idaho Power to gain additional revenue concessions
that it was otherwise not willing to give in arm's length negotiations.
III
PURPA MANDATES A BASE LEVEL OF PARITY AS BETWEEN
UTILITIES AND QF DEVELOPERS FOR THE NEXT GENERATING
RESOURCE
1. OF Contract Rates, Terms and Conditions are to be Fair, Just and Reasonable:
Discrimination as between OF Generation and Utility Generation is Prohibited. PURPA
mandates that rules enacted by FERC, to "encourage cogeneration and small power
production," shall insure that the avoided cost rates for the purchase and sale of QF energy:
"(1) shall be just and reasonable to the electric consumers and in the public interest" and "(2)
shall not discriminate against the qualifying cogenerators or qualifying small power
Sterling, Reb, P. 6.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 12
producers."4° FERC regulations implementing PURPA contain the same requirement.4' State
regulatory authorities are to implement FERC's PURPA Rules "for each electric utility for
which it has ratemaking authority." 42 Idaho Code requires that the "practices or contracts" of
a utility "may not be unjust, unreasonable, discriminatory or preferential, or in any wise in
violation of any provision of law."43
Several of Idaho Power's proposals in this case violate these state and federal law
prohibitions against discrimination and preferential treatment. Chief among the offending
proposals is that all QFs above a 100 Kw cap be limited to no more than 5 year contracts. Mr.
Stokes justifies a 5 year contract term proposal because it "would minimize the risk to
customers of paying higher than avoided cost rates due to unforeseen circumstances or
events."44
One only has to look at Langley Gulch to again see duplicity in Idaho Power's
'spare the ratepayer from risk' proposals. For Langley, Idaho Power sought and received a
certificate from the Commission authorizing, before construction ever began, "binding [long
—term] ratemaking treatment". 45 In 2009, three years before Langley began operation, the
Commission essentially gave Idaho Power a 30 year contract 46 at a fixed price .47 At the core
of Idaho Power's argument seeking "binding ratemaking treatment" for Langley was an
assertion that the pre-commitment of the core elements of Langley's rate recovery was
16 U.S.C. §824a-3(b)
4118 C.F.R § 292.304(a)(i) and (ii).
42 16 U.S.C. §824a-3(f)
' Idaho code § 61-502,
Stokes, DI, P.4.
' Idaho Code § 61-541
46 Langley was originally given a 30 year depreciation life; later changed to 35 years.
47 "IT IS FURTHER ORDERED THAT THE Commission. . . provides Idaho Power with authorization and
binding commitment to provide rate base treatment for the Company's capital investment in the Langley Gulch
Power Plant and related facilities in the amount of $396,618,473, at such time as the plant is placed in
commercial operation." Order No. 30892.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 13
"necessary to facility the financing for Langley. 48 The same can be said for the independent
power industry, QF based, or not.
The Commission indeed found that pre-approval of Langley "was necessary to
facility the Company's financing of the Langley Plant.,, 49 The Commission also noted that in
2009, Langley was accused of likely becoming Idaho Power's highest-cost operating
resource, while in 2012, the same accusers argued Langley was one of the Company's lowest
cost resources. This change, resulting from the precipitous fall in natural gas prices - an
"unforeseen circumstance" (quoting Mr. Stokes) - benefited, not harmed ratepayers.
Likewise, using the same much-reduced gas prices for calculating PURPA rates, and then
locking in long-term QF contracts based on such rates, would also inure to the benefit of the
ratepayers.
Providing QF developers the same non-discriminatory, non-preferential access to
project financing, through the use of long-term contracts, at fixed rates, would simply put
independent power developers on the same footing as the utilities. Conversely, it is doubtful
Idaho Power would have been willing to finance and build Langley, if it was only assured
rate recovery for Langley's capital costs, for just five years, with no assurance of follow-on
rate recovery periods.
Idaho Power's reasoning for proposing a 100 Kw cap and a five year contract term -
so that it can always apply the latest and best available pricing information in an IRP model
- is really just a pricing issue. Alternatively, it is a poison pill disguised as a pricing issue.
In either case, there are many solid recommendations in this docket as to how to set and
48 Application, Case No. IPC-E-09-03
49 IPUC Order No. 32582,P. 16.Case No. IPC-E-12-14, In the Matter of the Application ofIdaho Power
Company for Authority to Increase its Rates and Its Ratebase to Recover Its Investment in the Langley Gulch
Power Plant.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 14
adjust avoided cost pricing, without making QF financing impossible. Those tools are the
better, the fairer, and the non-discriminatory way to mitigate pricing risk, while at the same
time, respecting the law, by providing QF developers a realistic opportunity to be the 'but-
for' 50 generating resource alternative to the utility. To instead limit QFs to no more than five
year contracts would be unjust, unreasonable, discriminatory and preferential.
2. The Eligibility Cap and Transparency in Pricing. Idaho Power proposes an
eligibility cap5 ' of 100 Kw for all PURPA projects .52 Staff, Avista and PacifiCorp support a
cap of 10 average MW for all QFs other than wind and solar. The Canal Companies and the
Coalition propose a cap down to 10 MW nameplate for all QFs, regardless of fuel source.
Clearwater/Simplot/Exergy recommend retaining the current 10 average MW cap, for all
QFs. All parties are in general agreement that for PURPA projects sized above the eligibility
cap, avoided cost rates will be established by an IRP methodology, while below the cap, QFs
should be entitled to standardized QF contract rates, terms and conditions.
As Mr. Schoenbeck testifies, it makes little difference in the end as to whether
avoided cost rates are calculated pursuant to an IRP methodology, or a SAR methodology,
provided that "consistent assumptions are used in both methods (such as fuel costs and
market price forecasts). ,53 What is, or can be different between the two methods, however, is
transparency, or lack thereof.
Surrogate resource calculations can be done on a Microsoft Excel spreadsheet,
whereas IRP based rates rely on complex production simulation models that are either
° 18 C.F.R., § 292.10 1(b)(6).
51 Below the eligibility cap, a QF developer would be entitled to fixed, published avoided cost rates. In essence,
the developer would have a good idea, in advance, of the potential sale price for QF energy. Above the cap
however, a developer would have the 'pleasure' of having to negotiate with the utility, to find out the sales
price. Price negotiations, based on complex modeling and relying on experts, is quite expensive.
52 Stokes, DI, P.4.
Schoenbeck, DI, PP 14— 16.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 15
internally developed, or costs tens or hundreds of thousands of dollars to purchase, and use
hundreds, if not thousands, of input variables.54 Ms. Brown, for Rocky Mountain Power
stated it so well when she said: "The SAR 55 methodology used for calculating published
avoided cost rates for smaller QFs continues to provide a simple and transparent means of
pricing that minimizes transaction costs a very small QF might incur to negotiate a power
purchase agreement."56
In the past, for QF contracts above the cap, Idaho Power has used AURORA to model
energy prices, and Staff has been able and willing to check and confirm the proper/improper
use of AURORA and other tools used to calculate these energy and capacity prices. For
projects below the cap, the SAR standard published price avoided the need for independent
price verification. If that cap was dropped to 100 Kw, and with the utility calculating each
QF's unique energy and capacity values, small developers would be disadvantaged in price
negotiations, unless they were to hire an AURORA expert, or risk the possibility that the
model run by the utility was either biased, or contained errors. For PacifiCorp, this problem
is exacerbated by the fact that its GRID model is an internally developed model which lacks
the ability for third-party verification.
Even if an both an IRP and SAR methodology are theoretically supposed to lead to
similar avoide cost results, Idaho Power's vision of how the IRP based system would work
would continue to remain a 'black-box' exercise. First, Idaho Power proposes post
AURORA adjustments to the AURORA energy outputs to remove market sales revenues
generated from QF projects, and to assign to QF power an avoided energy cost of zero during
54
Surrogate Avoided Resource
56 Brown, DI. P. 4.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 16
minimum load conditions. These two adjustments are in conflict with PURPA's definition of
avoided costs, found in Section 292.101 As several parties have recommended, the better
method to determine the "but for" avoided energy cost is to run AURORA twice; once
without, and then with, the QF resource. The difference in cost would then represent the
energy costs that would have been incurred by the utility "but for' the QF.58
A second transparency concern exists regarding Idaho Power's proposal to allow
unilateral continuous updating of IRP prices, "upon [a] receipt of a written request from a QF
for contract pricing." (the "Price Requesting QF") Other Non-Price Requesting QFs would
have zero ability to test or challenge the validity, credibility or ability of the Price Requesting
QF to develop its project, without having the ability to review what the utility and the Price
Requesting QF would assuredly claim was confidential, proprietary trade secret information.
The only thing more irresponsible that counting a Price Requesting QF in the IRP
pricing model for avoided cost purposes, would be for the Company to also count the same
Price Requesting QF resource in its actual IRP, as being available to meet system peak and
serve load. Conversely, only using such a speculative resource for avoided cost calculating
purposes, but not planning purposes, injects a significant downward bias in avoided cost
prices, because only some fraction of the Price Requesting QFs would likely ever get built.
Developers that are "sniffing around" for favorable pricing, by making a price request, are no
more qualified to be a PURPA 'but for' resource for purposes of calculating avoided costs,
than they are at being the next preferred resource option in the utility's IRP itself.
18 C.F.R., § 292.101 (b)(6). "Avoided costs mean the incremental cost to an electric utility of electric energy
or capacity or both which, but for the purchase from the qualing facility,... such utility would generate
itself or purchasefrom another source."
58 Schoenbeck, DI, P. 19.
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 17
Iv
PROCESS
This case, GNR-E- 11-03, primarily focuses on setting avoided cost prices. There are,
however, process questions mixed in. Those process questions, or issues, would be better
addressed in a follow-on docket, after the difficult pricing issues are addressed by the
Commission in this case. Many of the process issues could also be better addressed with
workshops and negotiations between Staff, QF developers and utilities. Three large process
issues remain outstanding and ripe for such workshops.
1. Standardized Tariffs: Both RMP and Idaho Power have proposed tariffs or
schedules to govern the QF contracting process. Idaho Power's tariff was submitted with the
rebuttal testimony of Mark Stokes, but Staff or Intervenors have had no pre-filed opportunity
to respond. While there are a number of provisions of both Idaho Power's and RMP's
proposed PURPA schedules that need discussion and revision, there are two legal problems
regarding the proposed schedules that will be highlighted here.
a. Proposed Schedule 73 and 38 violated PURPA: Both Idaho
Power's Schedule 73 and RIVIP's proposed Schedule 38 require "QFs who desire to make
sales to the [companies] at avoided costs rates... enter into written power purchase and
interconnection agreements" pursuant to the respective Schedules 59 Both Schedules also
provide that "Prices and other terms and conditions in the power purchase agreement shall
not be final and binding until the power purchase agreement has been executed by both
parties and the Commission approves the agreement."60 These provisions are in violation of
PURPA, which provides that at the option of the OF, energy may be provided "as available,"
or alternative, energy and capacity may be provided pursuant to a "legally enforceable
59 Exhibit No. 10, P. 1, Exhibit No. 11, P. 1, Stokes, Reb.
60 Id., P. 4.
Memorandum of the Renewable Energy Coalition and Dynamis Energy - Page 18
obligation" ("LEO") setting forth the delivery term, with rates established at the time the
LEO is established .61 FREC has also been clear in the Cedar Creek decision that a LEO can
be established before, or without, a utility's counter signature. 62
b. Proposed Schedules 73 and 38 Violate Idaho Law. The last provision
of both proposed schedules would require a QF developer to first give notice to the utility of
its intent to file a complaint at the Commission, and then wait 60 days before filing the
complaint. Such a 'freeze-out' waiting period is contrary to Idaho Code § 61-612 et. sec. 63
that gives everyone and anyone the right to immediately file a complaint against a utility,
and seek redress of their grievance before the Commission.
2. OF Interconnection: Utility System Upgrades.
a. PPAs and Interconnection: The current version of most Idaho
jurisdictional PPAs require a QF to meet a hard or fixed operation date, or else be in breach
of contract, with forfeiture of liquidated damages. One potential cause of just such a breach is
failure for the QF to achieve electrical interconnection. Both proposed schedules continue
this irrational scheme that the left-hand of the utility (Generation) is held harmless from the
faults of the right-hand (Delivery). While that irrational separation may be required in the
FERC world of transmission open access and non-discrimination, there clearly needs to be a
more thoughtful solution to the problem of interconnecting a QF. Workshops can help bring
a better sense of symmetry between PPAs and GIAs.64
6118 C.F.R. 202.304(d)(1) and (2)
62 Cedar Creek Wind, LLC, 137 FERC ¶ 61,006(2011).
63 "Complaint may be made by. . . any person. . . by petition or complaint in writing, setting forth any act or
thing done [by a public utility]. . . in violation of any provision or law."
64 Generator Interconnection Agreements
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 19
b. Network Upgrades: The current system for interconnecting QFs to
the utility transmission system is in compliance with the mandates of PURPA, that a QF pay
the full cost of interconnection. However, the additional practice in Idaho of a QF also
having to pay for transmission network upgrades is in conflict with federal law.
Idaho Power argues that because the network upgrade is caused by the QF generation,
the QF should pay for the system upgrade.65 Under PURPA, the only instance where a QF
may be required to pay for transmission services is where it is transmitting power to another
utility over a host utility's system .66 FERC Order Nos. 200367 and 200668 establish clear
federal jurisdiction, to the exclusion of the states, over the terms of interconnection between
generators and transmission providers, even where the transmission facility also engages in
local distribution, insofar as the interconnections are "for the purpose of making sales of
electrical energy for resale in interstate commerce." 69 By establishing standard agreements
for electrical interconnection FERC has exercised its jurisdiction over the terms of those
relationships. 70 A host utility may not require a QF, exercising its PURPA rights and selling
its output to the host utility (which QF is therefore only taking interconnection service) to
fund additional transmission system upgrades, as a condition for the QF exercising its
65 See Park, Reb. P. 12
66 18 C.F.R. §292.303(d).
67 Standardization of Generator Interconnection Agreement and Procedures, Order No. 2003, FERC Stat. &
Regs. ¶ 31,146 at P 778 (2003) ("Order No. 2003"), order on reh 'g, Order No. 2003-A, FERC Stats. & Regs.
¶ 31,160, order on reh 'g, Order No. 2003-B, FERC Stats. & Regs. 1 31,171 (2004), order on reh 'g, Order
No. 2003-C, FERC Stats. & Regs. ¶ 31,190 (2005) 68 Standardization of Small Generator Interconnection Agreements and Procedures, Order No. 2006, FERC
Stats. & Regs. ¶ 31,180 ("Order No. 2006"), order on reh 'g, Order No. 2006-A, FERC Stats. & Regs. 1 31,196
(2005), order on clar?f , Order No. 2006-B, FERC Stats. & Regs. 1 31,221 (2006).
69 Order No. 2003 at 30,54546.
70 Transmission Access Policy Study Group v. FERC, 225 F.3d 667, 682-83 (D.C.Cir. 2000).
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 20
PURPA rights. 71 In broad terms, FERC looks at system benefits, for determining who pays
for network upgrades. If a QF is the sole beneficiary, it is the sole payor. On the other hand,
if the network upgrades extend beyond the QF, the QF is refunded some portion of its initial
charge for system improvements, in relatively short order. In any case, FERC mandates a
case-by-case analysis of system betterments. The QF interconnection process in Idaho, and
its method of assigning network upgrade costs solely to QFs, is in conflict with FERCs
interconnection rules, and is ripe for additional investigation by this Commission.
V
CONCLUSION
For the reasons outlined above, the Commission should:
a.Acknowledge that it does not have the statutory jurisdiction to determine the
ownership of Renewable Energy Credits and other environmental attributes, and affirm that
they remain the separate property of the renewable QF developer;
b.Reject Idaho Power's proposed Schedule 74 as being: (i) a violation of
PURPA, an abrogation of existing contracts, and resting on the faulty assumption that many
of Idaho Power's alleged "must run" generation facilities are, in fact, not;
C. Declare that QFs are entitled to long-term, 20 year contracts, in order that they
are not discriminated against and have a reasonable opportunity to finance and build power
generating facilities as do the utilities,
d. Establish an eligibility cap for standard contracts and fixed rates for all QF
developers at 10 MW (nameplate),
'lAss 'n of Regulatory Util. Comm 'rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007), cert. denied, 552
U.S. 1230 (2008).
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 21
e. Order a subsequent proceeding, to begin with workshops, to address process
issues involving: (i) fair and reasonable QF tariffs, (ii) standard contracts, and (iii) QF
interconnections procedures that are FERC compliant.
RESPECFULLY SUBMITTED this 0 day of July, 2012.
WILLIAMS BRADBURY, P.C.
Ronald L. Williams
Attorneys for the Renewable Energy Coalition
and Dynamis Energy, LLC
Memorandum of the Renewable Energy Coalition and Dynamis Energy Page 22
IW4 291111111I
LEGISLATURE OF THE STATE OF IDAHO
Sixty-first Legislature Second Regular Session - 2012
IN THE SENATE
SENATE BILL NO. 1364
BY STATE AFFAIRS COMMITTEE
I AN ACT
2 RELATING TO THE PUBLIC UTILITIES COMMISSION; AMENDING CHAPTER 5, TITLE 61,
3 IDAHO CODE, BY THE ADDITION OF A NEW SECTION 61-542, IDAHO CODE, TO
4 DEFINE THE AUTHORITY OF THE PUBLIC UTILITIES COMMISSION AND ITS JURIS-
5 DICTION OVER THE ENVIRONMENTAL ATTRIBUTES OF PUBLIC UTILITY REGULATORY
6 POLICIES ACT QUALIFYING FACILITIES AND TO PROVIDE FOR USE AND IMPLEMEN-
7 TATION OF ENVIRONMENTAL ATTRIBUTES; AND DECLARING AN EMERGENCY.
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. That Chapter 5, Title 61, Idaho Code, be, and the same is
10 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
11 ignated as Section 61-542, Idaho Code, and to read as follows:
12 61-542. ENVIRONMENTAL ATTRIBUTES OF PURPA QUALIFYING FACILITIES. (1)
13 Definitions:
14 (a) "Environmental attributes" means any and all claims, credits,
15 benefits, emissions reductions, offsets and allowances, howsoever
16 entitled, resulting from the avoidance of the emission of any gas,
17 chemical or other substance into the air, soil or water. Environmen-
18 tal attributes shall include, but are not limited to: (i) green tags,
19 green and/or clean energy credits, renewable energy credits or renew-
20 able energy certificates; (ii) any avoided emissions of pollutants to
21 the air, soil or water such as sulfur oxides, nitrogen oxides, carbon
22 monoxide and other pollutants; (iii) any avoided emissions of carbon
23 dioxide, methane and other greenhouse gases. Environmental attributes
24 do not include: (i) tax credits or other tax incentives existing now
25 or in the future associated with construction, ownership or operation
26 of the qualifying facility; or (ii) adverse wildlife or environmental
27 impacts.
28 (b) "PURPA" means the public utility regulatory policies act of 1978,
29 16 U.S.C. section 824a-3.
30 (c) "Qualifying facility" means a qualifying small power or cogenera-
31 tion facility as defined in 18 CFR 292.101(b) (1) as that section may be
32 amended or superseded.
33 (d) "Public utility" means an electrical corporation as defined in sec-
34 tions 61-119 and 61-129, Idaho Code.
35 (2) Ownership. The legislature hereby finds that, to the extent that
36 environmental attributes are generated by or associated with qualifying
37 facilities, such environmental attributes are attributes of the power pur-
38 chased by the public utility from such qualifying facilities at avoided cost
39 rates. All environmental attributes generated by or associated with such
40 qualifying facilities shall be owned by the public utility purchaser of the
41 power from the qualifying facilities, unless, with regard to any specific
42 qualifying facility, such ownership is expressly assigned to the qualify-
EXHIBIT 802
Legal Memorandum
of REC and Dynamis
Page 1
VA
I ing facility by specific agreement with the public utility purchaser of the
2 power, and such agreement is approved by the commission.
3 (3) Use. Environmental attributes owned by a public utility pursuant
4 to this section may be used for any, or all, of the following purposes:
5 (a) Environmental attributes may be used by a public utility to satisfy
6 the requirements of any state or federal renewable portfolio standards
7 or requirements applicable to such public utility;
8 (b) Environmental attributes may be sold, and the proceeds of such sale
9 utilized to offset, or partially offset, the power supply expense paid
10 by customers of the public utility as determined by the commission;
11 (c) Environmental attributes may be assigned to a qualifying facility,
12 as referenced in subsection (2) of this section, by specific agreement
13 approved by the commission. Should the owner of a qualifying facility
14 desire to enter into such specific agreement assigning ownership of the
15 environmental attributes to the qualifying facility, the public util-
16 ity owner of the environmental attributes shall negotiate in good faith
17 with the owner of such qualifying facility.
18 (4) Implementation. The legislature hereby directs the commission
19 to implement this requirement for all qualifying facility power purchase
20 agreements entered into by public utilities subsequent to the date of enact-
21 ment of this section.
22 SECTION 2. An emergency existing therefor, which emergency is hereby
23 declared to exist, this act shall be in full force and effect on and after its
24 passage and approval.
EXHIBIT 802
Legal Memorandum
of REC and Dynamis
Page 2
STATEMENT OF PURPOSE
RS21243C1
This legislation will require any benefits derived from RECs associated with the sale of renewable
energy to investor owned utilities to flow to the benefit of the utilities' customers.
FISCAL NOTE
There is no impact to the General Fund.
Contact:
Name: Rich Hahn
Office: Idaho Power Company
Phone: [phone]
Neil Colwell
Avista Corporation
[phone]
Russ Westerberg
Rocky Mountain Power
[phone]
Statement of Purpose / Fiscal Note S1364
EXHIBIT 802
Legal Memorandum
of REC and Dynamis
Page 3
EXHIBIT 803
LEGISLATURE OF THE STATE OF IDAHO
Sixty-first Legislature Second Regular Session —2012
IN ThE________
- BILL NO.________
BY COMMITTEE
RELATING TO THE PUBLIC UTILITIES COMMISSION; AMENDING CHAPTER 5, TITLE 61, IDAHO CODE, BY
THE ADDITION OF A NEW SECTION 61-542, IDAHO CODE, TO DEFINE THE AUTHORITY OF THE
PUBLIC UTILITIES COMMISSION AND ITS JURISDICTION OVER THE ENVIRONMENTAL ATTRIBUTES
IN THE PURCHASE OF POWER BY PUBLIC UTILITIES FROM PURPA QUALIFYING FACILITIES; AND
DECLARING AN EMERGENCY
Be it Enacted by the Legislature of the State of Idaho:
SECTION 1. That Chapters, Title 61, Idaho Coft be, and the same Is hereby amended by the addition
thereto of a NEWSECTION. to be known and designated as Section 61-542, Idaho Code, and to read as
follows:
61-542. ENVIRONMENTAL ATTRIBUTES FROM PURPA QUALIFYING FACILITIES. (1) Definitions.
(a)'Environmental Attributes' means any and all claims, credits, benefits, emissions reductions,
offsets, and allowances, howsoever entitled resulting from the avoidance of the emission of any
gas, chemical, or other substance to the air, sal or water.
(b)PURPA" means the public utility regulatory policies Act of 1978,16 U.S.C. § 8240.
(c)"Qualifying Facility' means a qualifying small power or cogeneration facility as defined In 18
C.F.R. 292.101(b)(1) as that section may be amended or superseded.
(d)"Public UtilIty" means an electrical corporation as defined by sections 61-119 and 61-129,
Idaho Code.
(2)Ownership. The legislature hereby delegates the specific authority and directs the
commission to determine the ownership of the environmental attributes generated by or associated
with PURPA qualifying facilities that sell their generation to public utilities. Such determination Is to be
made so as to assure that the public Interest of the citizens of the state of Idaho Is upheld.
(3)Implementation. The legislature hereby directs the commission to Implement this
requirement for all qualifying facility power purchase agreements entered Into by public utilities
subsequent to the date of enactment of this section.
EXHIBIT 803
Legal Memorandum
of REC and Dynamis
Page 1
4 ir
SECTION 2. An emergency existing therefore, which emergency Is hereby declared to e3dst, thIs
act shall be In full force and effect an and after Its passage and approval.
EXHIBIT 803
Legal Memorandum
of REC and Dynamis
Page 2
EXHIBIT 804
R EC £ \' ED
DONOVAN E. WALKER (ISB No. 5921)
JASON B. WILLIAMS (ISB No. 8718) 2 I ?OV 22 PM 4
Idaho Power Company 1221 West Idaho Street (83702)
P.O. Box 70 -
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
d000wer corn
med000werm
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-1 1-25
A DETERMINATION REGARDING THE )
FIRM ENERGY SALES AGREEMENT FOR ) APPLICATION
THE SALE AND PURCHASE OF ELECTRIC )
ENERGY BETWEEN IDAHO POWER )
COMPANY AND DYNAMIS ENERGY, LLC. )
Idaho Power Company ("Idaho Power" or "Company'), in accordance with RP 52
and the applicable provisions of the Public Utility Regulatory Policies Act of 1978
("PURPA"), hereby respectfully applies to the Idaho Public Utilities Commission
("Commission") for an Order accepting or rejecting the Firm Energy Sales Agreement
("FESA") between Idaho Power and Dynamis Energy, LLC ("Dynamis" or "Seller') under
which Dynamis would sell and Idaho Power would purchase electric energy generated
by the Dynamis Ada County Landfill project ("Facility") located near Boise, Idaho.
In support of this Application, Idaho Power represents as follows:
APPLICATION -1 EXHIBIT 804
Legal Memorandum
of REC and Dynamis
Page 1
I- BACKGROUND
1.Sections 201 and 210 of PIJRPA, and pertinent regulations of the Federal
Energy Regulatory Commission (FERC), require that regulated electric utilities
purchase power produced by cogenerators or small power producers that obtain
Qualifying Facility ('OF*) status. The rate a OF receives for the sale of Its power is
generally referred to as the *avoided cost" rate and Is to reflect the Incremental cost to
an electric utility of electric energy or capacity or both which, but for the purchase from
the OF, such utility would generate itself or purchase from another source. The
Commission has authority under PLJRPA Sections 201 and 210 and the Implementing
regulations of the FERC, 18 C.F.R. § 292, to set avoided costs, to order electric utilities
to enter into fixed-term obligations for the purchase of energy from QFs, and to
implement FERC rules.
II. THE FIRM ENERGY SALES AGREEMENT
2.Dynamis proposes to own, operate, and maintain a 22 megawatt
(Maximum Capacity Amount) landfill waste to energy generating facility to be located in
Idaho Power's service territory near Boise, Idaho. The Facility will be a OF under the
applicable provisions of PURPA. Idaho Power and Dynamis entered Into a FESA for
the sale and purchase of the energy generated by the Facility on November 16, 2011.
The FESA for this Facility was executed by C. Lloyd Mahaffey, Chairman and Chief
Executive Officer for Dynamis Energy, LLC, on November 14, 2011. It was
subsequently executed by Idaho Power on November 16, 2011, and now filed for the
Commission's review on November 22, 2011. A copy of the FESA is attached to this
Application as Attachment No. 1. This FESA is the result of negotiations between Idaho
APPLICATION -2 EXHIBIT 804
Legal Memorandum
of REC and Dynamis
Page 2
APPENDIX E
HOURLY ENERGY PRODUCTION
This table is a list of hourly energy amounts (measwd in MWs) for each hour of a twenty-four (24) hour period
in each month that will be applied to all days of the month.
li2r jo
Wffi
o
fib am
0
mar
ME
0
&
WM
0
HE mm
0
iMi am
0
iM am
0
AM
(MW)
0
am am
0
9d
Wffl
0
no
(MW)
0
am
(Mt)
0
o 0 0 0 0 0 0 0 0 0 0 0
o 0 0 0 0 0 0 0 0 0 0 0
o 0 0 0 0 0 0 0 0 0 0 0
o 0 0 0 0 0 0 0 0 0 0 0
o 0 0 0 0 0 0 0 0 0 0 0
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 1 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 1 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20 20 20 20 20
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0
Daily 320 320 320 320 320 320 320 320 320 320 320 320
-45-
EXHIBIT 804
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
MONTHLY PURCHASE PRICES
MIIrb p.r kwh
- Jan-12 $84.27 $81.06
Feb-12 $85.76 $81.03
Mar-12 $81.15 $76.88
Apr-12 $76.70 $73.32
May-12 $69.70 $63.39
Jun-12 $71.77 $6429
Jul-12 $8355 $7770
Aug-12 $87.83 $81.28
Sep-12 $90.25 $82.51
Oct-12 $84.52 $81.19
Nov-12 $87.90 $84.82
Dec-12 $86.69 $82.30
Jan-13 $86.11 $82.01
Feb-13 $87.75 $83.51
Mar-13 $83.19 $79.45
Apr-13 $7868 $7402
May-13 $71.21 $84.51
Jun-13 $7383 $6788
Jul-13 $85.47 $79.40
Au-I3 $89.91 - $83.36
Sep-13 $91.58 $82.47
Oct-13 $83.94 $80.29
Nov-13 $88.88 $84.40
Dec-13 $88.88 $86.14
Jan-14 $87.76 $82.96
Feb-14 $89.40 $84.87
Mar-14 $8560 $81.15
Apr-14 $80.92 $75.56
May-14 $72.80 $66.01
Jun-14 $76.15 $69.27
Jul-14 $87.08 $81.11
Auo-14 $91.69 $84.96
Sep-14 $94.41 $86.47
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EXHIBIT 804
Legal Memorandum
of REC and Dynamis
Page 4
'I
Oct-14 $85.99 $82.10
Nov-14 $89.81 $84.92
Dec-14 $90.21 $86.23
Jan-IS $88.57 $85.04
Feb-15 $91.06 $85.94
Mar-15 $87.03 $80.82
Apr-15 $80.13 $77.64
May615 $72.89 $66.21
Jun-15 $76.86 $69.27
Jul-15 $87.78 $81.41
Aug-IS $92.43 $85.55
Sep-IS $98.86 $87.90
Oct-IS $8954 $8220
Nov-15 $92.80 $88.08
Dec-15 $9074 $8731
Jan-16 $88.32 $84.47
Feb-16 $90.76 $85.18
Mar-16 $86.80 $81.29
Apr616 $80.79 $77.26
May-16 $73.73 $67.06
Jun-16 $77.05 $69.25
Jul-16 $87.64 $82.32
Aug-16 $93.84 $86.71
8e06 $9925 $8729
Oct-16 $87.85 $82.35
Nov-16 $92.94 $88.45
Dec-16 $91.13 $87.56
Jan-17 $90.91 $86.04
Feb-17 $93.08 $88.84
Mar-17 $88.74 $84.13
Apr-17 $83.46 $77.18
Ma y-Il $7657 $6802
Jun-17 $7911 $7167
Jul-17 $90.60 $82.94
Aug-17 $95.91 $87.95
Sep-Il $98.70 $87.74
Oct-17 $89.78 $84.34
Nov-17 $95.34 $91.13
Dec-17 $92.68 $89.41
Jan-18 $91.93 $87.84
Feb-18 $94.07 $88.83
Mar-18 $89.49 $85.99
Apr-18 $83.54 $78.11
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EXHIBIT 804
Legal Memorandum
of EEC and Dynamis
Page 5
May18 $76.11 $70.26
Jun-18 $79.39 $71.99
Jul-18 $91.17 $8438
Aug-18 $98.23 $90.33
Sep-18 $100.60 $90.89
Oct-18 $93.85 $87.16
Nov-18 $96.44 $91.24
Dec-18 $93.60 $91.03
Jan-19 $93.80 $89.99
Feb-19 $96.27 $89.89
Mar-19 $90.44 $84.85
Apr619 $84.99 $80.00
May-la $77.50 $71.01
Jun-19 $80.42 $73.70
Jul-19 $92.47 $86.18
Aug-19 $98.85 $91.90
Sep-19 $102.82 $91.48
Oct-19 $92.49 $85.38
Nov-19 $96.50 $92.43
Dec-19 $95.86 $92.44
Jan-20 $95.88 $90.91
Feb-20 $97.88 $92.99
Mar-20 $91.93 $81.46
Apr-20 $86.60 $83.39
May-20 $79.04 $74.37
Jun-20 $83.23 $16.02
Jul-20 $94.24 $89.03
Aug-20 $99.84 $93.96
Sep-20 $104.15 $93.04
Oct-20 $92.93 $87.06
Nov-20 $98.42 $93.51
Dec-20 $97.19 $94.41
Jan-21 $95.99 $92.40
Feb-21 $97.44 $93.69
Mar-21 $92.51 $88.32
Apr-21 $86.60 $8305
May-21 $7903 $7393
Jun-21 $83.55 $77.86
Jul-21 $94.26 $89.12
Aug-21 $100.60 $9426
Sep-21 $104.59 $94.78
Oct-21 $97.45 $91.52
Nov-21 $100.69 $95.40
-48-
EXHIBIT 804
Legal Memorandum
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Page 6
Dec-21 $97.11 $94.10
Jan-22 $96.68 $94.74
Feb-22 $98.93 $95.11
Mar-22 $93.40 $90.33
Apr-22 $86.54 $82.96
May-22 $80.90 $75.87
Jun-22 $84.13 $78.08
Jul-fl $95.19 $88.32
Aug-22 $101.85 $96.03
Sep-22 $105.70 $95.02
Oct-22 $95.44 $87.01
Nov-22 $101.54 $97.38
Dec-22 $97.63 $95.98
Jan-23 $100.73 $99.00
Feb-23 $102.77 $98.49
Mar-23 $97.25 $92.52
Apr-23 $90.94 $88.51
May-23 $84.99 $77.49
Jun-23 $87.83 $82.99
Jul-23 $99.70 $95.09
Aug-23 $106.54 $99.46
Sep-23 $113.09 $99.75
Oct-23 $100.39 $91.86
Nov-23 $106.81 $101.81
Dec-23 $101.66 $98.66
Jan-24 $102.29 $99.61
Feb-24 $10492 $10043
Mar-24 $98.80 $95.16
8pr-24 $91.22 $86.96
May-24 $85.12 $79.41
Jun-24 $88.07 $82.00
Jul-24 $100.61 $95.21
Aug-24 $108.45 $99.79
Sep-24 $115.33 $100.84
Oct-24 $104.31 $97.40
Nov-24 $107.34 $101.78
Dec-24 $103.93 $100.20
Jan-25 $104.23 $102.18
Feb-25 $107.14 $102.26
Mar-25 $10019 $9550
Apr-25 $94.30 $89.13
May-25 $86.67 $82.45
Jun-25 $90.82 $84.52
-49-
EXHIBIT 804
Legal Memorandum
of REC and Dynamis
Page 7
Jul-25 $103.41 $97.10
Aug-25 $11038 $10383
Sep-25 $118.31 $103.33
Oct-25 $103.45 $96.55
Nov-25 $109.55 $103.13
Dec-25 $106.58 $102.87
Jan-26 $105.29 $103.81
Feb-26 $108.34 $102.91
Mar-26 $101.66 $96.42
Apr-26 $9516 $91.31
May-26 $88.51 $83.12
Jun-26 $92.95 $85.79
Jul-26 $10399 $9146
AWN $11099 $10338
Sep-26 $118.59 $104.40
Oct-26 $103.57 $98.25
Nov-26 $110.70 $103.57
Dec-26 $107.23 $104.86
Jan-27 $107.04 $104.13
Feb-27 $10884 $10616
Mar-27 $102.59 $96.42
Apr627 $9588 $9100
May-27 $88.75 $83.89
Jun-27 $93.73 $86.59
Jul-27 $104.02 $98.83
Auø-21 $112.65 $104.92
Sep-21 $120.17 $104.44
Oct-27 $108.53 $102.47
Nov-27 $115.07 $106.88
Dec-27 $108.05 $105.52
Jan-28 $108.72 $106.78
Feb-28 $110.62 $107.11
Mar-28 $103.93 $100.06
Apr-28 $9684 $91.57
May-28 $91.20 $85.09
Jun-28 $94.32 $90.04
Jul-28 $107.38 $101.22
Aug-28 $11764 $10754
Sep-28 $119.38 $105.96
Oct-28 $107.42 $100.50
Nov-28 $115.65 $109.11
Dec-28 $109.38 $106.42
Jan-29 $110.53 $109.27
-
50-EXHIBIT 804
Legal Memorandum
of REC and Dynamis
Page 8
'4 AA
Feb-29 $112.52 -- $107.38
Mar-29 $106.27 $101.09
Apr-29 $98.95 $92.44
May-29 $91.67 $87.86
Jun-29 $96.52 $90.47
Jul-29 $10894 $10162
Aug-29 $118.42 $109.67
Sep-29 $12114 $10668
Oct-29 $10691 $10153
Nov-29 $11455 $10674
Dec-29 $112.20 $109.32
Jan-30 $113.04 $111.74
Feb-30 $115.09 $109.79
Mar-30 $108.65 $103.31
Apr-30 $101.12 $94.41
May30 $93.61 $89.69
Jun-30 $98.61 $92.38
Jul-30 $111.40 $103.86
Aug-30 $121.17 $112.15
Sep-30 $123.97 $109.07
Oct-30 $10931 $10377
Nov-30 $117.18 $109.13
Dec-30 $114.76 $111.79
Jan-31 $11562 $11428
Feb-31 $117.73 $112.27
Mar-31 $111.10 $105.60
Apr-31 $10334 $9643
May-31 $95.61 $91.57
Jun-31 $100.76 $94.34
Jul-31 $113.93 $106.17
Aug-31 $124.00 $114.71
Sep41 $126.88 $111.54
Oct-31 $111.78 $106.07
Nov-31 $119.86 $111.60
Dec-31 $117.40 $114.34
Jan-32 $118.20 $116.82
Feb-32 $120.37 $114.75
Mar-32 $113.55 $107.88
-32 $105.55 $98.43
May-32 $97.59 $93.43
Jun-32 $102.89 $95.28
Jul-32 $116.46 $108.46
$12683 $117.26
-51-
EXHIBIT 804
Legal Memorandum
of REC and Dynamis
Page 9
Sep-32 $12979 $11399
Oct-32 $114.25 $108.36
Nov-32 $122.59 $114.05
Dec-32 $120.03 $116.88
Jan-33 $121.02 $119.60
Feb-33 $12326 $11747
Mar-33 $116.23 $110.39
Aiw-33 $107.99 $100.66
May-33 $9979 $9551
Jun-33 $10525 $9844
Jul-33 $11923 $110.99
Aug-33 $12990 $12005
Sep-33 $13296 $11669
Oct-33 $11695 $11089
Nov-33 $12554 $11675
Dec-33 $122.90 $119.66
Jan-34 $123.84 $122.38
Feb-34 $126.15 $120.18
Mar-34 $118.90 $112.89
Apr-34 $110.42 $102.87
May-34 $101.98 $97.56
Jun-34 $107.60 $100.58
Jul-34 $122.00 $113.51
Aug-34 $13299 $12284
Sep-34 $136.14 $119.38
Oct-34 $119.65 $113.41
Nov-34 $12850 $11944
Dec-34 $125.78 $122.44
Jan-35 $126.74 $125.24
Feb-35 $129.12 $122.98
Mar-35 $121.66 $115.47
Air-35 $112.92 $105.15
May-35 $10422 $9968
Jun-35 $110.02 $102.79
Jul-35 $124.85 $116.11
Aug-36 $136.17 $125.72
Se11h35 $139.41 $122.15
Oct-35 $122.43 $116.00
Nov-35 $131.54 $122.22
Dec-35 $128.74 $125.30
Jan-36 $129.65 $128.11
Feb-36 $132.10 $125.78
Mar-36 $124.42 $118.04
-52-
EXHIBIT 804
Legal Memorandum
of REC and Dynamis
Page 10
Apr736 $115.42 $107.41
May-36 $106.46 $101.78
Jun-36 $112.43 $104.98
Jul-36 $127.70 $118.70
AL-36 $139.36 $128.60
Sep.36 $142.70 $124.92
Oct-36 $125.21 $118.58
Nov-36 $134.60 $124.99
Dec-36 $131.71 $128.17
-53-
EXIHBIT 804
Legal Memorandum
of REC and Dynamis
Page 11
Ronald L. Williams, ISB No. 3034 RECEIVED
Williams Bradbury, P.C. 201 7 JUL 1015 W. Hays St. " 1.* 27
Boise ID, 83702
Telephone: [phone] t 1flLJ ES 09MMlS
Fax: [phone]
ronwilliamsbradbury.com
Attorneys for Renewable Energy Coalition and Dynamis Energy LLC
BEFORE THE IDAHO PUBLIC UTILITES COMMISSION
IN THE MATTER OF THE COMMISSION'S)
REVIEW OF PURPA QF COTRACT )
PROVISIONS INCLUDING THE )
SURROGATE AVOIDED RESOURCE (SAR))
AND INTEGRATED RESOURCE
)
PLANNING (IRP) METHODOLOGIES FOR )
CALCULATING AVOIDED COST RATES )
Case No. GNR-E-1 1-03
CERTIFICATE OF DELIVERY
I HEREBY CERTIFY that on this 20th day of July, 2012, I caused to be served a true and
correct copy of the Legal Memorandum of the Renewable Energy Coalition and Dynamis Energy
upon the following individuals in the manner indicated below:
Donovan E. Walker Li Hand Delivery Jason B. Williams
Idaho Power Company Li US Mail (postage prepaid)
P0 Box 70 Facsimile Transmission
Boise, ID 83707-0070 Federal Express
Electronic Transmission [e-mail]
[e-mail]
Hand Delivery
Li US Mail (postage prepaid)
Facsimile Transmission
Federal Express
Electronic Transmission
Michael G. Andrea
Avista Corporation
1411 E. Mission Avenue - MSC-23
Spokane, WA 99202
michael.andreaavistacorp.com
CERTIFICATE OF DELIVERY, Page 1
Daniel E. Sot ander Hand Delivery
PacifiCorp dba Rocky Mountain Power [Il US Mail (postage prepaid)
201 South Main, Suite 2300 Facsimile Transmission
Salt Lake City, UT 84111 fl Federal Express
[e-mail] Z Electronic Transmission
Kristine A. Sasser Eli Hand Delivery Idaho Public Utilities Commission 0 US Mail (postage prepaid) 472 W. Washington (zip: 83702) 0 Facsimile Transmission P0 Box 83720
Boise, ID 83720-0074 0 Federal Express
[e-mail] Electronic Transmission
Peter J. Richardson [1 Hand Delivery Gregory M. Adams
Richardson & O'Leary, PLLC El US Mail (postage prepaid)
P0 Box 7218 Facsimile Transmission
Boise, ID 83702 fl Federal Express
Electronic Transmission [e-mail]
[e-mail]
Attorneys for NIPPC, J.R. Simplot Co.,
Grand View, Exergy Development Group,
Board of County Commissioners of
Adams County, Idaho and Clearwater
Paper Corporation
Robert D. Kahn El Hand Delivery NIPPC, Executive Director fl US Mail (postage prepaid) 1 117 Minor Ave., Suite 300 0 Facsimile Transmission Seattle, WA 98101 Eli Federal Express rkahn nippc.org Electronic Transmission
Don Sturtevant El Hand Delivery Energy Director
J.R. Simplot Company El US Mail (postage prepaid)
P.O. Box 27 0 Facsimile Transmission
Boise, ID 83707-0027 fl Federal Express
Electronic Transmission [e-mail]
Robert A. Paul 9 Hand Delivery Grand View Solar II 0 US Mail (postage prepaid) 15690 Vista Circle 0 Facsimile Transmission Desert Hot Springs, CA 92241 9 Federal Express robertapau108gmail.com Electronic Transmission
CERTIFICATE OF DELIVERY, Page 2
James Carkulis
Managing Member
Exergy Development Group of Idaho, LLC
802 West Bannock Street, Suite 1200
Boise, ID 83702
[e-mail]
O Hand Delivery
El US Mail (postage prepaid)
El Facsimile Transmission
El Federal Express
Electronic Transmission
Dr. Don Reading El Hand Delivery Exergy Development Group of Idaho, LLC El US Mail (postage prepaid) 6070 Hill Road El Facsimile Transmission Boise, ID 83703 El Federal Express dreadingmindspring.com Electronic Transmission
Bill Brown, Chair El Hand Delivery Board of Commissioners of Adams County El US Mail (postage prepaid) P0 Box 48 El Facsimile Transmission Council, ID 83612 El Federal Express [e-mail] Electronic Transmission
Mary Lewallen
Clearwater Paper Corporation
601 W. Riverside Ave., Suite 1100
Spokane, WA 99201
Marv.lewallenclearwaterpaper.com
El Hand Delivery
El US Mail (postage prepaid)
El Facsimile Transmission
El Federal Express
Electronic Transmission
John R. Lowe
Consultant to El Hand Delivery
Renewable Energy Coalition El US Mail (postage prepaid)
12050 SW Tremont Street El Facsimile Transmission
Portland, OR 97225 El Federal Express
jravenesanmarcosyahoo.com Electronic Transmission
R. Greg Ferney El Hand Delivery Mimura Law Offices, PLLC El US Mail (postage prepaid) 2176 E. Franklin Road, Suite 120 0 Facsimile Transmission Meridian, ID 83642 0 Federal Express [e-mail] Electronic Transmission Attorneys for Interconnect Solar
Bill Piske, Manager El Hand Delivery Interconnect Solar Development, LLC El US Mail (postage prepaid) 1303 E. Carter
Boise, ID 83706 El Facsimile Transmission
[e-mail] El Federal Express
Electronic Transmission
CERTIFICATE OF DELIVERY, Page 3
Wade Thomas
General Counsel Hand Delivery
US Mail (postage prepaid) Dynamis Energy, LLC
776 E. Riverside Drive, Suite 150 Facsimile Transmission
Eagle, ID 83616 Federal Express
[e-mail] Electronic Transmission
C. Thomas Arkoosh
Capitol Law Group, PLLC L Hand Delivery
205 N. 10th St., 4th Floor 0 US Mail (postage prepaid)
P0 Box 2598 0 Facsimile Transmission
Boise, ID 83701 Federal Express
[e-mail] Electronic Transmission
Attorneys for Twin Falls Canal Company
And North Side Canal Company
Brian Olmstead ELECTRONIC SERVICE ONLY: General Manager Electronic Transmission Twin Falls Canal Company
[e-mail]
Ted Diehl ELECTRONIC SERVICE ONLY: General Manager
North Side Canal Company Electronic Transmission
[e-mail]
Don Schoenbeck ELECTRONIC SERVICE ONLY: RCS
[e-mail] Electronic Transmission
Lori Thomas ELECTRONIC SERVICE ONLY: Capitol Law Group, PLLC
lthomascapitollawgroup.com Z Electronic Transmission
Ted S. Sorenson 0 Hand Delivery Birch Power Company
5203 South 1 Ph East 0 US Mail (postage prepaid)
Idaho Falls, ID 83404 0
0
Facsimile Transmission
[e-mail] Federal Express
Electronic Transmission
CERTIFICATE OF DELIVERY, Page 4
Dean J. Miller
Chas. F. McDevitt El Hand Delivery
McDevitt & Miller, LLP El
US Mail (postage prepaid)
Facsimile Transmission 420 W. Bannock Street (zip: 83702) El P0 Box 2564 Federal Express
Electronic Transmission Boise, ID 83701
joemcdevitt-miller.com
[e-mail]
Attorneys for Idaho Windfarms, LLC,
Renewable Northwest Project and
Ridgeline Energy LLC
Glenn Ikemoto El Hand Delivery Margaret Rueger El US Mail (postage prepaid) Idaho Windfarms, LLC El Facsimile Transmission 672 Blair Avenue El Federal Express Piedmont, CA 94611
[e-mail] Electronic Transmission
[e-mail]
Megan Walseth Decker El Hand Delivery Senior Staff Counsel
Renewable Northwest Project El US Mail (postage prepaid)
421 SW 6th Avenue, Suite 1125 El
El
Facsimile Transmission
Portland, OR 97204 Federal Express
Electronic Transmission [e-mail]
M. J. Humphries El Hand Delivery Blue Ribbon Energy LLC El US Mail (postage prepaid) 4515 S. Ammon Road LI Facsimile Transmission Ammon, ID 83406 El Federal Express blueribbonenergygmail.com Electronic Transmission
Arron F. Jepson El Hand Delivery Blue Ribbon Energy LLC El US Mail (postage prepaid) 10660 South 540 East El Facsimile Transmission Sandy, UT 84070 El Federal Express arronesqaol.com Electronic Transmission
Benjamin J. Otto El Hand Delivery Idaho Conservation League El US Mail (postage prepaid) 710 N. Sixth Street (zip: 83702) El Facsimile Transmission P0 Box 844
Boise, ID 83701 El Federal Express
bottoidahoconservation.org Electronic Transmission
CERTIFICATE OF DELIVERY, Page 5
O Hand Delivery
LI US Mail (postage prepaid)
LI Facsimile Transmission
O Federal Express
Electronic Transmission
El Hand Delivery
LI US Mail (postage prepaid)
LI Facsimile Transmission
LI Federal Express
Electronic Transmission
LI Hand Delivery
LI US Mail (postage prepaid)
LI Facsimile Transmission
LI Federal Express
Electronic Transmission
,
-
4 Z Alo~"
Ronald L. Williams
Liz Woodruff
Ken Miller
Snake River Alliance
P0 Box 1731
Boise, ID 83701
[e-mail]
[e-mail]
Tauna Christensen
Energy Integrity Project
769N. 1100E.
Shelley, ID 83274
[e-mail]
Deborah E. Nelson
Kelsey J. Nunez
Givens Pursley LLP
601 W. Bannock Street (83702)
P0 Box 2720
Boise, ID 83701-2720
[e-mail]
[e-mail]
Attorneys for Idaho Wind Partners I, LLC
CERTIFICATE OF DELIVERY, Page 6