20050718Opening brief.pdf

Dean 1. Miller ISB #1968
McDEVITT & MILLER LLP
420 West Bannock Street
O. Box 2564-83701
Boise, ill 83702
Tel: [phone]
Fax: [phone]
oe mcdevitt-miller.com
r- Ll~~ ~
"( :
F~'W
L..;LED
~! L.
' .
,onr 1\)1 \5 Pr'! \1' ,
!-uuv VI
,- "-
'co t\ Pl!8LtC
. _
-r,t \~!r:(/ CO~1fl\SStON;j\\L!litJ
Attorneys for Magic Wind, LLC, Cassia
Wind Farm LLC and Cassia Gulch
Wind Park LLC (Magic and Cassia)
ORIGINAL
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 GENERA TED BY WIND-
POWERED SMALL POWER PRODUCTION
FACILITIES.
Case No. IPC-O5-
BRIEF OF MAGIC WIND LLC,
CASSIA WIND FARM LLC AND
CASSIA GULCH WIND PARK LLC
COME NOW Magic Wind LLC, Cassia Wind Farm LLC and Cassia Gulch Wind Park
LLC (referred to collectively as "Magic and Cassia ) and submit the following Brief in response
to the Commission s Notice of Petition dated July 1 2005.
INTRODUCTION AND SUMMARY OF ARGUMENT
Magic Wind LLC, Cassia Wind Farm LLC and Cassia Gulch Wind Park LLC are limited
purpose companies formed by two owners of agricultural lands located in Twin Falls County,
Mr. Armand Eckert and Mr. Jared Grover. In light of the declining fortunes of the agricultural
sector, Mr. Eckert and Mr. Grover hope to convert their lands to a potentially productive use-
wind generation. (See Direct Testimony of Armand Eckert, Jared Grover).
BRIEF OF MAGIC WIND LLC, CASSIA WIND FARM LLC AND CASSIA GULCH WIND PARK LLC - 1
Magic and Cassia do not object to an investigation to examine the issues raised in Idaho
Power Company s (IPCo) Petition and would participate to the extent their resources permit.
this Brief, however, Magic and Cassia advance two contentions:
1. Idaho Power Company has not made a record showing sufficient to warrant a suspension
of its PURP A obligations.
2. If the Commission nonetheless orders a suspension, the suspension should not apply to
projects that were filed with IPCo, on or before June 17, 2005 an Interconnection
Application for Small Generators.
ARGUMENT
SUSPENSION OF PURP A OBLIGATIONS IS AN EXTRAORDINARY AND
POTENTIALL Y ILLEGAL REMEMDY WHICH SHOUD BE GRANTED ONLY IN AN
EXTREME CIRCUMSTANCE
A. A Puported suspension ofPURP A obligations is of doubtful legality.
As Exergy Development Group correctly points out in its June 27 2005 Answer to
Petition the utility obligation to purchase arises sections 201 and 210 of the federal Public
Utility Regulatory Act of 1978. While a state commission can adopt reasonable policies and
procedures to implement the federal scheme (See A. W. Brown v. Idaho Power 121 Idaho 812
(1992)), it is not clear that a state commission can suspend, even temporarily, a federally
created obligation. A totally chaotic circumstance would arise, for example, if the Idaho
State Tax Commission could temporarily suspend IPCo s obligation to pay taxes required by
the federal Internal Revenue Code or if the Idaho Department of Environmental Quality
could temporarily suspend IPCo s obligation to comply with the Federal Clean Air Act. For
this reason, it has always been the law that state legislative and judicial decision makers must
BRIEF OF MAGIC WIND LLC, CASSIA WIND FARM LLC AND CASSIA GULCH WIND PARK LLC - 2
give preclusive effect to federal enactments no matter what the strength of the competing
local interests. Every first year law
student knows this. See, Martin v. Hunter s Lessee
S. 304 (1816).
It is also a requirement of section 201 and 210
, as well as state law (See Idaho Code 61-
325) that rates and practices between qualifying facilities must be non-
discriminatory.
IPCo s proposal to suspend its obligation with respect to some quality facilities-
wind
generators-while not suspending its obligations for others is, without doubt, discriminatory
on its face. When a proposal is discriminatory on its face, the burden is upon the proponent
to show that the discrimination is not "undue or unreasonable." The Commission is required
to make record based, evidentiary findings justifying a different in treatment.
Agricultural Products v. Utah Power 98 Idaho 23 (1976).
When faced with the prospect that a proposed course of action is legally infirm
, a
reasoned decision making approach is to weigh the prospect of illegality against the
magnitude of harm that would result from inaction. For example, if great and immediate
injury (such as loss of life, financial collapse or the like) would undoubtedly result from
inaction, the risk of illegality fades in significant. If, on the other hand, the risk of real harm
is slight and the risk of illegality is measurable, the balance tips in favor of inaction.
Also to be considered in this balancing is the harm caused to the legitimate interests of
third parties. In particular, as established by the testimony of Mr. Eckert and Mr. Grover, the
requested "temporary suspension " from their perspective, is not a simply a temporary hiatus
in the development process, but is more in the nature of a death sentence for their projects.
As will be discussed in more in testimony to be filed herewith and by others, the risk of
irreversible harm to IPCo or its customers is slight. As discussed above, the risk of illegality
BRIEF OF MAGIC WIND LLC, CASSIA WIND FARM LLC AND CASSIA GULCH WIND PARK LLC - 3
is significant and the risk of harm to legitimate interests of third parties is great. Accordingly,
the requested suspension should be denied pending a full investigation of the issues raised by
the IPCo petition.
B. Commission precedent in the area of interim rate increases establishes a standard for
deciding whether to change course prior to a full hearing.
Idaho Power s request for a suspension of its PURP A obligations is analogous to a request
for an interim rate increase in connection with a general rate increase. It asks the Commission to
depart from the status quo based on untested allegations, before interested parties have been
accorded a full opportunity for investigation and analysis. Most recently, in Case No. IPC-03-
, the Commission explained the standard for interim relief as follows: "Interim rate relief is an
extraordinary remedy to be granted only in an emergency or where there is danger that the utility
will not be able to render adequate service if relief is withheld.Order No. 29403, pg 96.
The logic behind the rule in interim rate increase cases is obvious: the Commission will
not authorize sudden changes in rates or policy, with potentially harmful consequences to the
legitimate interests of third parties, prior to a full hearing in which all matters can be fully
explored unless there is an emergency or some other immediate need. As will be discussed
below, and at oral argument, IPCo has not established the existence of anything resembling an
emergency or immediate need of relief. Nor has IPCo alleged any facts establishing that its
ratepayers would be materially harmed in the absence of a suspension.
C. Matters alleged in IPCo' s Petition and suIDJorting testimony do not establish the
existence an emergency or a need for immediate relief in the form of a suspension of its
PURP A obligations.
In its Notice of Petition dated July 1 , 2005 found
, "
... the Company s Petition alone
provides insufficient basis to grant the temporary suspension request." (Notice at pg 6). The
BRIEF OF MAGIC WIND LLC, CASSIA WIND FARM LLC AND CASSIA GULCH WIND PARK LLC - 4
subsequently filed testimony of John R. Gale adds little in the way of substantive detail and
consists, largely, of are-packaging of the Company s Petition.
At the conclusion of the hearing schedule for July 22, 2005, after considering additional
evidence and argument of other parties, Magic and Cassia believe the Commission will be
left with an abiding conviction that the Company has not made a case for suspension.
II.
IF THE COMMISSION ENTERS AN ORDER GRANTING A SUSPENSION OF IPCO'PURP A OBLIGATIONS, DEVELOPERS WHO, ON OR BEFORE JUNE 17 2005SUBMITTED TO IPCo AN "INTERCONNECTION APPLICATION FOR SMALL
GENERA TORS" SHOULD BE EXEMPT THEREFROM.
If the Commission determines, despite the foregoing, to order a suspension of some
nature, it must then face the question of to whom the suspension should apply and to whom it
should not apply. Idaho Power itself recognizes that the suspension should not apply to projects
that are in some sense mature. (See Testimony of John R. Gale, pg 18).
Magic and Cassia respectfully suggest that the suspension should not apply to developers
who have submitted to Idaho Power Company an "Interconnection Application for Small
Generators." Examples of these Applications are Exhibits 600 and 602 to the testimony of Mr.
Eckert and Mr. Grover. The following reasons support this recommendation.
First, it is based on publicly available information. On its internet website, IPCo
maintains a public list of developers who have submitted the Application, a true copy of which is
attached hereto as Exhibit A. (The list appears to include all small power producers, not just
wind generators. Magic and Wind have asked, through a discovery request, for IPCo to provide
a revised list eliminating non-wind projects, which, it is hoped will be available by the time of
the July 22od hearing). Idaho Power obviously views submission of an Interconnection
Application as a significant milestone by its public publication of the list of applicants.
BRIEF OF MAGIC WIND LLC, CASSIA WIND FARM LLC AND CASSIA GULCH WIND PARK LLC - 5
Second, filing the Application, and payment of the associated fee of $1 0 000 is
reasonable evidence of a serious intent to complete the proposed project. The Application
requires submission of detailed engineering and other information. (See Exhibit Nos. 600 and
602, Testimony of Armand Eckert and Jared Grover). Only a developer who seriously intends
pursue the project would have assembled the detailed information necessary to complete the
Application.
Finally, this recommendation offers an administratively simple "bright line" test for
determining the scope of any suspension. It avoids the necessity of a case by case determination
of which projects meet some ill-defined definition of "maturity.
Specifically, Magic and Cassia recommend that any Commission order establishing a
suspension contain the following language:
It is further Ordered that the suspension established by this Order shall not
apply to projects that on or before June 17 2005 submitted to Idaho PowerCompany a completed Interconnection Application for Small Generators and it is
further Ordered that Idaho Power Company shall continue the project
development process, in accordance with policies procedures and rates in effect
on July 17, 2005, with respect to those projects as if this suspension did not exist
and in good faith." 1
Of course, adoption of this exemption standard would not preclude other individual
projects from making a case for an individual exemption based on facts peculiar to their projects.
CONCLUSION
Based on the foregoing, Magic and Cassia respectfully request that the Commission enter its
order denying the requested suspension of the Company s PURP A obligations. If, however
1 Because Magic and Cassia are interested in contracting with Idaho Power Company, they have not examined the
contracting process for A vista and Pacificorp. Presumably, similar Applications are required by those Companies.
BRIEF OF MAGIC WIND LLC, CASSIA WIND FARM LLC AND CASSIA GULCH WIND PARK LLC - 6
a suspension of some nature is ordered, the Commission should create an exemption to the
suspension as suggested herein.
Dated this day of July, 2005
Respectfull y submitted
McDEVITT & MILLER LLP
u~~
ean . Miller
McDevitt & Miller LLP
420 W. Bannock
Boise, ID 83702
Phone: [phone]Fax: [phone]
Counsel for Magic Wind LLC, Cassia Wind
Farm LLC and Cassia Gulch Wind Park LLC
BRIEF OF MAGIC WIND LLC, CASSIA WIND FARM LLC AND CASSIA GULCH WIND PARK LLC - 7
CERTIFICATE OF SERVICE
I hereby certify that on the ay of July, 2005, I caused to be served, via the method(s)
indicated below, true and correct copies of the foregoing document, upon:
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
o. Box 83720
Boise, ID 83720-0074
i iewell~puc.state.id. us
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Barton L. Kline
Monica B. Moen
Idaho Power Company
1221 West Idaho Street
O. Box 70
Boise, ID 83707
BKline~idahopower. com
MMoen~idahopower.com
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Linda Nordstrom
Pacifi Corp
825 NE Multnomah, Suite 1800
Portland, OR 97232
I isa.nordstrom~pacificorp. com
Fax: [phone]
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Bob Lively
Pacificorp
One Utah Center, 23rd Floor
201 S. Main Street
Salt Lake City, UT 84140
bob.Ii vel y~pacificorp. com
Fax: [phone]
Hand Delivered
S. Mail
Fax
Fed. Express
Email
William J. Batt
John R. Hammond, Jr.
Batt & Fisher, LLP
U S Bank Plaza, 5th Floor
101 South Capital Boulevard
O. Box 1308
Boise, ID 83701
Fax: [phone]
Hand Delivered
S. Mail
Fax
Fed. Express
Email
ij/
BRIEF OF MAGIC WIND LLC, CASSIA WIND FARM LLC AND CASSIA GULCH WIND PARK LLC - 8
Michael Heckler Hand Delivered
Director of Marketing & Development S. Mail
W indland Incorporated Fax
7669 West Riverside Drive, Suite 102 Fed. Express
Boise, ID 83714 Email
mheckler~windland. com
Fax: [phone]
Peter J. Richardson Hand Delivered
James T. Carkulis S. Mail
Richardson & O'Leary PLLC Fax
99 East State Street Fed. Express
O. Box 1849 Email
Eagle, ID 83616
peter~richardsonandoleary. com
Fax: [phone]
Glenn Ikemoto Hand Delivered
Principal S. Mail
Energy Vision, LLC Fax
672 Blair Avenue Fed. Express
Piedmont, CA 94611 Email
lenni acbell.net
Fax: [phone]
Richard L. Storro Hand Delivered
Director, Power Supply S. Mail
1411 E. Mission Ave.Fax
O. Box 3727, MSC-Fed. Express
Spokane, WA 99220-3727 Email
dick. storro~avistacorp. com
Fax: [phone]
R. Blair Strong Hand Delivered
Paine, Hamblen, Coffin, Brooke &S. Mail
Miller LLP Fax
717 West Sprague Ave., Suite 1200 Fed. Express
Spokane, W A 99201-3505 Email
r. blair .stron
g~p
ainehamblen.com
Fax: [phone]
BRIEF OF MAGIC WIND LLC, CASSIA WIND FARM LLC AND CASSIA GULCH WIND PARK LLC - 9