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HomeMy WebLinkAbout20050830Answer to Windland petition for stay.pdfBARTON L. KLINE, ISB # 1526 MONICA B. MOEN , ISB # 5734 Idaho Power Company 1221 West Idaho Street O. Box 70 Boise , Idaho 83707 Telephone: (208) 388-2682FAX: (208) 388-6936 E-mail: BKline ~ idahopower.com MMoen ~ idahopower.com Attorneys for Idaho Power Company ' F~~- L t:, j 'r t" "'-! y, L':, r-' ,.' .,- ., .., ,., ';.. : ".. 1.,.) 2uGS f\UG 30 Pr"i 4: 15 1T \L. \ : E~j (~1.i~~l~s !OH BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE PETITION OF IDAHO POWER COMPANY FOR AN ORDER TEMPORARILY SUSPENDING IDAHO POWER'S PURPA OBLIGATION TO ENTER INTO CONTRACTS TO PURCHASE ENERGY GENERATED BY WIND-POWERED SMALL POWER PRODUCTION FACILITIES. CASE NO. IPC-05- IDAHO POWER COMPANY ANSWER TO WINDLAND INCORPORATED'S PETITION FOR STAY OF COMMISSION ORDER NO. 29839 Idaho Power Company (hereinafter referred to as "Idaho Power" or "the Company ) pursuant to RP 057, hereby answers Wind land Incorporated's ("Windland" Petition for Stay of Commission Order No. 29839. In response to Windland's Petition Idaho Power states as follows: Wind land Correctly Concludes That The Rates In Grandfathered QF Wind Contracts Will Exceed Avoided Costs Idaho Power agrees that Wind land is correct in its conclusion that any PURPA qualifying facilities ' (" QF") wind contracts Idaho Power enters into in accordance with the "grandfathering" provisions of Order No. 29839 will result in Idaho Power purchasing energy for twenty years at rates that IDAHO POWER ANSWER TO WINDLAND'S PETITION FOR STAY, Page exceed the Company s current avoided costs. The Commission s finding in Order No. 29839 that "the unique supply characteristics of wind generation and related integration costs provide a basis for adjustment to the published avoided cost rates." (Order No. 29839, p. 8) confirm the Company s expectation that any "grandfathered" QF wind contracts will contain rates that exceed Idaho Power s avoided cost. In light of the Commission s determination that the published avoided cost rates for wind generation should be adjusted , when considering Windland's Petition For Stay, Idaho Power believes that the Commission should also consider two FERC decisions, both issued in 1995. In Connecticut Light Power 70 FERC 61 012 (1995); and Southern California Edison Co., San Diego Gas & Electric Co.70 FERC 61 215 (1995), the FERC noted that if utilities are required by state law or policy to sign contracts that reflect rates for QF sales at wholesale that are in excess of avoided costs those contracts will be considered to be void ab initio (Connecticut Light Power FERC 61 012 , 61 030 (1995). Idaho Law Provides SuQPort For Grandfathering Of QF Contracts In Very Limited Circumstances.The question of "grandfathering" QF contracts arises only when a utility presents a case to the Commission in which it seeks a downward adjustment to its published avoided cost rates. At such times, QF developers that are in various stages of development of individual QF projects ask the Commission to retain the higher QF rates. They urge that the Commission deny the utility s request or alternatively, that their particular project be "grandfathered" to the higher rates based primarily on equity arguments that their projects are beneficial, that they need the higher prices to make their projects economically feasible and/or that the utility s actions IDAHO POWER ANSWER TO WINDLAND'S PETITION FOR STAY, Page 2 precluded them from obtaining a contract earlier. In considering the issues associated with "grandfathering" of QF projects, we are able to consult a body of Idaho law on this issue. See Empire Lumber v. Washington Water Power 114 Idaho 191 , 755 P.2d 1229 (1988); W. Brown Co., Inc. v. Idaho Power Co.121 Idaho 812 828 P.2d 841 (1992); Rosebud Enter. v. Idaho Pub. Uti/. Com 131 Idaho 1 951 P.2d 521 (1998); Rosebud Enter. v. Idaho Pub. Util. Com 128 Idaho 609 917 P.2d 766 (1996). In the above-cited cases , the Idaho Supreme Court upheld the Commission s establishment of criteria based on contract commitment by the QF, to guide its determination as to whether or not a particular QF project was grandfathered to the prior rates. In A. W. Brown CO. VS. Idaho Power Company, 121 Idaho 812 828 2d 841 817 (1992), the Idaho Supreme Court quoted the Commission s description of the criteria adopted by the Commission: The QF must be able to exhibit that it has laid a proper foundation entitling it to contract consideration and the current avoided cost rates. There must be an indication that the QF pursued a power contract with some diligence.... Indeed , this Commission has stated a CSPP is not entitled to contract rates until it is ready, willing and able to sign a contract. It must show that but for the actions of the utility it was otherwise entitled to a contract. In most cases this will entail making a comprehensive binding offer showing with reasonable specificity, design and size characteristics and indicate a willingness to rely on proposed contract terms and proceed thereunder. (A. W. Brown 121 Idaho 812, 817 (1992)) Review of the above-referenced Empire, A. W. Brown and Rosebud cases demonstrates that the Commission has established QF contract commitment as the principal test to be applied to the individual facts that are unique to each QF project seeking grandfather status. It should be noted that the principal Idaho cases dealing with "grandfathering" were decided prior to the FERC's decision in Connecticut Light Power. IDAHO POWER ANSWER TO WINDLAND'S PETITION FOR STAY, Page 3 In Order No. 29839, the Commission identified several criteria for determining whether a particular wind QF project that was in the negotiation queue on July 1 , 2005, would be eligible for exemption from the 100 kW published rate cap. discussing the criteria to be applied , Order No. 29839 made the following findings of fact: At the beginning of the hearing on July 22, the Commission adjourned to allow the parties to explore whether any consensus could be reached regarding those PURPA projects that were in various stages of negotiation with Idaho Power. The parties were unable to reach consensus. Accordingly, this Commission finds it reasonable to establish the following criteria to determine the eligibility of PURPA qualifying wind generating facilities for contracts at the published avoided cost rates. For purposes of determining eligibility we find it reasonable to use the date of the Commission s Notice in this case , i.e., July 1 , 2005. For those QF projects in the negotiation queue on that date, the criteria that we will look at to determine project eligibility are: (1) submittal of a signed power purchase agreement to the utility, or (2) submitted to the utility of a completed Application for Interconnection Study and payment of fee. In addition to a finding of existence of one or both of the preceding threshold criteria, the QF must also be able to demonstrate other indicia of substantial progress and project maturity, e., (1) a wind study demonstrating a viable site for the project, (2) a signed contract for wind turbines , (3) arranged financing for the project, and/or (4) related progress on the facility permitting and licensing path. Idaho Power believes that the portion of Order No. 29839 that identifies submittal to the utility of a completed application for interconnection study and payment of fee" as primary criteria for eligibility for "grandfathered" status is not consistent with the Commission s prior orders requiring QF contract commitment as the basis for grandfathering. IDAHO POWER ANSWER TO WINDLAND'S PETITION FOR STAY, Page 4 The Commission Should Stay Idaho Power s Obliqation to Enter Into Twenty-Year Grandfathered Contracts In the conclusion of its Petition for Stay, Windland asks the Commission to stay its decision in Order No. 29839 regarding grandfathering" until Windland's Petition for reconsideration is resolved and/or until the time the Commission issues an order regarding the law governing grandfathering and the parties' relationships concerning wind power QF contracts. Windland requests that the Commission amend Order No. 29839 to prohibit the "grandfathering" of any wind QF projects into the avoided cost rate established by Order No. 29646. This will advise the Commission that Idaho Power also intends to file a Petition for Reconsideration asking that the Commission reconsider the portion of Order No. 29839 which establishes criteria to determine eligibility for published rates for QF wind generating facilities as of July 1 , 2005. Idaho Power will not be seeking the same relief sought by Windland , i.e., a complete ban of all "grandfathering," but instead will be requesting that the Commission revise its order to align the requirements for grandfathering with the existing body of law established in A. W. Brown and the other cases cited above. Because the Commission issued its Order making the grandfathering criteria portion of Order No. 29839 a final Order on August 23, 2005 , Idaho Power has not had sufficient time to prepare and file its Petition for Reconsideration. When it makes that filing, Idaho Power will also request that the Commission stay Idaho Power obligation to enter into grandfathered QF contracts until such time as the Commission can fully consider the issues raised in Idaho Power s petition for reconsideration. IDAHO POWER ANSWER TO WINDLAND'S PETITION FOR STAY, Page 5 Conclusion Based on the foregoing, Idaho Power respectfully requests that the Commission , pursuant to RP 234, issue its Order granting the relief requested by Windland to stay Idaho Power s obligation to enter into QF wind contracts containing the QF purchase rates established by Order No. 29646 until a final , non-appealable order is issued by this Commission addressing the grandfathering criteria described in Order No. 29839. Respectfully submitted this 30th day of August , 2005. ~~(j BARTON L. KLINE Attorney for Idaho Power Company IDAHO POWER ANSWER TOWINDLAND'S PETITION FOR STAY, Page 6 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 30th day of August, 2005 , I served a true and correct copy of IDAHO POWER COMPANY'S ANSWER TO WINDLAND INCORPORATED'S PETITION FOR STAY OF COMMISSION ORDER NO. 29839 upon the following named parties by the method indicated below, and addressed to the following: Scott Woodbury Deputy Attorney General Idaho Public Utilities Commission 472 W. Washington Street O. Box 83720 Boise, ID 83720-0074 swoodbu ~ puc.state.id. Peter J. Richardson Richardson & O'Leary PLLC 515 N. 27th Street O. Box 7218 Boise, I D 83707 peter~ richardsonandoleary.com James T. Carkulis Exergy Development Group of Idaho LLC 1424 Dodge Avenue O. Box 5212 Helena, MT 59604 Richard L. Storro Director, Power Supply A vista Corporation 1411 E. Mission Avenue O. Box 3727, MSC- Spokane , W A 99220-3727 dick.storro ~ avistacorp.com R. Blair Strong Paine , Hamblen, Coffin, Brooke & Miller 717 West Sprague Avenue , Suite 1200 Spokane, WA 99201-3505 r. blai r. stron~ainehamblen .com CERTIFICATE OF SERVICE , Page Hand Delivered S. Mail Overnight Mail FAX (208) 334-3762 E-mail Hand Delivered S. Mail Overnight Mail FAX (208) 938-7904 E-mail Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX (509) 495-4272 E-mail Hand Delivered S. Mail Overnight Mail FAX (509) 838-0007 E-mail Dean J. Miller McDevitt & Miller LLP 420 W. Bannock Street O. Box 2564 Boise, ID 83701 joe ~ mcdevitt-miller.com Jared Grover Cassia Wind LLC and Cassia Gulch Wind Park LLC 3635 Kingswood Drive Boise, ID 83704 Armand Eckert Magic Wind LLC 716-B East 4900 North Buhl , ID 83316 Glenn Ikemoto Energy Vision LLC 672 Blair Avenue Piedmont , CA 94611 glenni ~ pacbelLnet Bob Lively PacifiCorp One Utah Center, 23rd Floor 201 S. Main Street Salt Lake City, UT 84140 bob.livelv ~ pacificorp.com Lisa Nordstrom PacifiCorp 825 N.E. Multnomah, Suite 1800 Portland, OR 97232 lisa.nordstrom ~ pacificorp.com William M. Eddie Advocates For the West 1320 W. Franklin Street O. Box 1612 Boise, ID 83701 billeddie~ rmcLnet CERTIFICATE OF SERVICE, Page 2 Hand Delivered S. Mail Overnight Mail FAX (208) 336-691 2 E-mail Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX (510) 217-2239 E-mail Hand Delivered S. Mail Overnight Mail FAX (801) 220-2798 E-mail Hand Delivered S. Mail Overnight Mail FAX (503) 813-7252 E-mail Hand Delivered S. Mail Overnight Mail FAX (208) 342-8286 E-mail Troy Gagliano 917 S.W. Oak Street, Suite 303 Portland, OR 97205 David Hawk , Director Energy Natural Resources J. R. Simplot Company 999 Main Street O. Box 27 Boise, I D 83702 dhawk ~ simplot.com R. Scott Pasley Assistant General Counsel R. Simplot Company 999 Main Street O. Box 27 Boise, I D 83702 ~aslev~ simplot.com William J. Batt John R. Hammond, Jr. Batt & Fisher, LLP 101 S. Capitol Blvd., Suite 500 O. Box 1308 Boise , ID 83701 ~b ~ battfisher.com jrh ~ battfisher.com Michael Heckler Director of Marketing & Development Wind land Incorporated 7669 W. Riverside Drive, Suite 102 Boise, ID 83714 mheckler~windland.com Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX (208) 389-7333 E-mail Hand Delivered S. Mail Overnight Mail FAX (208) 389-7464 E-mail Hand Delivered S. Mail Overnight Mail FAX (208) 331-2400 E-mail Hand Delivered S. Mail Overnight Mail FAX (208) 375-2894 E-mail ~RTON L. KLI N E CERTI FICA TE OF SERVICE, Page 3 ........