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Home My WebLink About20050907Answer to staff's reconsideration petition.pdf;:E'CEIVED Dean J. Miller ISB #1968 McDEVITT & MILLER LLP 420 West Bannock Street O. Box 2564-83701 Boise, ill 83702 Tel: 208.343.7500 Fax: 208.336.6912 ioe(8)mcdmtt - mi ller .com fL. D L~l ZO05 SEP - 7 PM 2: 36 i Ii ,; u P u fi L ; r;JTJL1TIES COi"ff1lSS10N Attorneys for Magic Wind, LLC, Cassia Wind Park LLC and Cassia Wind LLC OR\G\NAL BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE PETITION OF IDAHO POWER COMPANY FOR AN ORDER TEMPORARILY SUSPENDING IDAHO POWER'S PURP A OBLIGATION TO ENTER INTO CONTRACTS TO PURCHASE ENERGY GENERATED BY WIND- POWERED SMALL POWER PRODUCTION FACILITIES. Case No. IPC-O5- ANSWER TO STAFF'S PETITION FOR RECONSIDERATION COME NOW Magic Wind LLC, Cassia Wind Park LLC, Cassia Wind LLC (collectively Magic and Cassia ) and, pursuant to IPUCRP 331., Answer the Commission Staffs Petition for Reconsideration dated August 31 , 2005 ("Staff Petition ) as follows, to wit: Magic and Cassia concur, in part, in Staff s critique of the Windland Petition for Reconsideration in so far as Windland contends current avoided costs are too high. Staff correctly observes "that current rates are presumed just and reasonable, and remain the effective avoided cost rates until determined otherwise by the Commission." (Staff Petition, pg. 3). Windland's "self-serving belief' to the contrary does not make the current rates unreasonable. (Staff Petition, pg. 2). ANSWER TO STAFF'S PETITION FOR RECONSIDERATION - Magic and Cassia disagree, however, with Staffs contention that the A. W Brown policy regarding grandfathering should apply in this case. The policy adopted in A. W Brown and similar cases having to do with changes to published PURP A rates was that there must either be a signed contract or a meritorious complaint at the time of the proposed change in rates. See A. W Brown v. Idaho Power 121 Idaho 812 828 P.2d 841 (1992). In contrast, in the present case, the Commission adopted threshold criteria of either submittal of a signed contract or submittal of an Application for Interconnection Study, coupled with other evidence of project maturity. See Order No. 29839. As discussed in Magic and Cassia s Answer to Windland's Petition for Reconsideration the A. W Brown policy was a permissible, but not legally mandated policy for determining which projects were entitled to older, higher PURP A rates and which projects would have to be content with newer, lower rates. The Staff Petition correctly observes that the policy adopted in Order No. 29839 is different from the A. W Brown standard, but the Staff Petition does not make a case that the A. W Brown standard is legally required. The present circumstance is different from the circumstance in A. W Brown and similar cases, justifying a different exemption policy. In A. W Brown and similar cases the only matter at issues was rates. Even if a project was only entitled to the newer lower rates, it was still entitled to a contract and the other features of the PURP A regulatory structure remained in place. Here, the circumstance is much different. By lowering the published rate eligibility cap to 100 kW from 10 mW the Commission has turned the regulatory structure on its head. Projects that were currently in progress do not have a new, lower rate that they can accept if desired. Instead they are not entitled to a published contract rate unless they reduce their size by 99% to qualify ANSWER TO STAFF'S PETITION FOR RECONSIDERATION - 2 under the 100kW sized project. A different, broader, exemption policy is justified by this different circumstance. At the July 22, 2005 hearing in this matter, Staff itself recognized there were substantial policy reasons favoring an exemption policy different from A. W Brown. Staff supported a policy not identical to but similar that ultimately adopted by the Commission. The following questions and answers of the Staff policy witness occurred: First, Mr. Sterling, I take it that it's the Staffs view that starting in very general terms that projects that have expended measurable or somewhat considerable time, effort and money, in reliance on the Commission current rules should be exempt from any suspension or modification of the eligibility criterias; is that a generally true statement? Yes, I generally would agree with that. Have you had the opportunity to review the brief that was filed by Magic and Cassia on July 15th Yes, I have. And in that brief, Magic and Cassia set forth a proposal to specifically implement the general proposition we have just discussed, which is that developers who have filed an interconnection application should be exempt from any suspension or modification of the eligibility rules. wanted to ask, what is Staff s reaction to that proposal? I think it's a reasonable proposal. Staff made its proposal and Magic s is also a reasonable proposal and Cassia. ANSWER TO STAFF'S PETITION FOR RECONSIDERATION - 3 What would happen in your view if implementation of that proposal somehow came into conflict with the Company s 200 megawatt RFP desires? Well, I think it's unfortunate that we have this conflict with the RFP; however, I think we are where we are today and I think the fact that people have relied on the existing rules and progressed with their contracts or their interconnection applications, it may ultimately destroy Idaho Power RFP and I think that's unfortunate, but I think that's where we are today. I don t think that it would be fair to preserve Idaho Power s RFP at the expense of people that have in good faith relied on the existing rules. Having said that, though, I think that illustrates the very problem that has caused this proceeding to happen in the first place and that is that Idaho Power will be obligated or could be obligated, depending on how the Commission decides this case, to purchase from PURP A projects at prices that are considerably higher than they otherwise would purchase comparable resources if they could proceed under an RFP, but again, I don t think we can undo what's already happened. (T. pgs. 135-136). In its Order, the Commission correctly noted that several projects relied on the written instructions of the IPCo Interconnection Application for pursuing a Purchase Power Agreement. The Commission wisely chose to include submission of Interconnection Application and 1 As demonstrated in Magic and Cassia s Reply to Windland's Petition for Reconsideration a true comparison shows that PURPA rates are not greatly, if at all, in excess of anticipated RFP prices. (See Magic and Cassia s Answer to Petition for Reconsideration, August, 30 2005). Staffs concern on this point is not well founded. But, even if it was, Staff s position at hearing was that fairness to those who relied on the Commission s policies outweighed concerns about paying too much. ANSWER TO STAFF'S PETITION FOR RECONSIDERATION - 4 payment of fees, as one of the two main criteria in determining which projects were sincerely pursuing completion of the project. Projects that were willing to follow the directions of IPCo and pay thousands of dollars for interconnection applications are just as sincere and committed as those companies signing and submitting a Purchase Power Agreement. Thus, the exemption policy established in Order No. 29839 strikes an appropriate balance of competing interests in the circumstances of this case and should be retained. CONCLUSION Based on the reasons and authorities cited herein the Staff Petition should be denied. DATED this day of September, 2005. Respectfully submitted CDEVITT & MILLER LLP Dean J. Miller McDevitt & Miller LLP 420 W. Bannock Boise, ID 83702 Phone: (208) 343-7500Fax: (208) 336-6912 Counsel for Magic Wind LLC, Cassia Wind Park LLC and Cassia Wind LLC ANSWER TO STAFF'S PETITION FOR RECONSIDERATION - 5 CERTIFICATE OF SERVICE I hereby certify that on the 1J11-day of September, 2005, I caused to be served, via the methodes) 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 iiewell~puc.state.id. us Hand Delivered S. Mail I....A Fax I....A Fed. Express I....A Email Scott Woodbury Idaho Public Utilities Commission 472 West Washington Street O. Box 83720 Boise, ID 83720-0074 swoodbu(fYpuc. state. id 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(fYidahopower .com MMoen(fYidahopower. com Hand Delivered S. Mail Fax Fed. Express Email Linda Nordstrom Pacifi Corp 825 NE Multnomah, Suite 1800 Portland, OR 97232 Fax: 503.813.7252 lisa.nordstrom~pacifi corp. com 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 Fax: 801.220.2798 bo b.Ii vel y~pacificorp. com Hand Delivered S. Mail Fax Fed. Express Email ANSWER TO STAFF'S PETITION FOR RECONSIDERATION - 6 I....A I....A I....A I....A I....A I....A I....A 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: 208.331.2400 i rh(fY battfisher. com wi b(fYbattfi sher .com Hand Delivered S. Mail Fax Fed. Express Email Michael Heckler Director of Marketing & Development Windland Incorporated 7669 West Riverside Drive, Suite 102 Boise, ID 83714 Fax: 208.375.2894 mheckler(fYwindland. com Hand Delivered S. Mail Fax Fed. Express Email Peter J. Richardson James T. Carkulis Richardson & 0' Leary PLLC 99 East State Street O. Box 1849 Eagle, ID 83616 Fax: 208.938.7904 peter(fYrichardsonandoleary.com Hand Delivered S. Mail Fax Fed. Express Email Glenn Ikemoto Principal Energy Vision, LLC 672 Blair Avenue Piedmont, CA 94611 Fax: 510.217.2239 glenni~pacbell.net Hand Delivered S. Mail Fax Fed. Express Email ANSWER TO STAFF'S PETITION FOR RECONSIDERATION - 7 I....A I....A I....A I....A I....A I....A I....A I....A I....A I....A I....A Richard L. Storro Director, Power Supply and David Meyer 1411 E. Mission Ave. O. Box 3727, MSC- 7 Spokane, W A 99220-3727 Fax: 509.495.4272 dick. storro(fYavistacorp. com davi d .meyer(fYavistacorp. com Hand Delivered S. Mail Fax Fed. Express Email R. Blair Strong Paine, Hamblen, Coffin, Brooke & Miller LLP 717 West Sprague Ave., Suite 1200 Spokane, WA 99201-3505 Fax: 509.838.0007 r. blair .strong(fYpainehamblen.com Hand Delivered S. Mail Fax Fed. Express Email J. R. Simp lot Company Attn: David Hawk Director, Energy Natural Resources 999 Main Street P. O. Box 27 Boise, Idaho 83702 (208) 389-7306 Fax: (208) 389-7333 dhawk(fYsimplotcom I....A I....A I....A I...:A I....A I....A Hand Delivered I....A S. Mail I....A Fax I....A Fed. Express I....A Email R. Scott Pasley Assistant General Counsel J. R. Simp lot Company 999 Main Street P. O. Box 27 Boise, Idaho 83702 (208) 389-7321 (208) 389-7464 telefax ~asley(fYsimplot.com Hand Delivered I....A S. Mail I....A Fax I....A Fed. Express I....A Email ANSWER TO STAFF'S PETITION FOR RECONSIDERATION - 8 William M. Eddie Advocates for the West O. Box 1612 Boise, ID 83701 billeddie(fYrmci.net Hand Delivered S. Mail Fax Fed. Express Email I....A I....A I....A ANSWER TO STAFF'S PETITION FOR RECONSIDERATION - 9