20050829Petition for reconsideration.pdf

Glenn Ikemoto
Energy Vision LLC
672 Blair Avenue
Piedmont, California 94611
Tel: 510-65S-7600
Fax: [phone]
glenni~pacbell. net
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
IDAHO POWER COMPANY FOR AN
ORDER TEMPORARIL Y SUSPENDING
IDAHO POWER'S PURP A OBLIGATION
TO ENTER INTO CONTRACTS TO
PURCHASE ENERGY GENERATED BY
WIND-POWERED SMALL POWER
PRODUCTION F ACILITIE
PETITION FOR
RECONSIDERATION BY
ENERGY VISION LLC
CASE NO. IPC-E-GS-
Energy Vision LLC (EnVision) hereby respectfully petitions for
reconsideration of the Commission s Order 29839 in the subject case. Specifically,
EnVision believes the July 1 , 2005 cut-off date established for grandfathering
inconsistent with prior Commission policy. In the matter of Earth Power Resources, Inc
vs. The Washington Water Power Company (Case WWP...96-6) the Commission
established the standard for grandfathering contracts which are in negotiation at the time
of a major change in circumstances. In its Order 27231 (Page 6), the Commission
states, "Earth Power must demonstrate that "but for" the actions of Water Power, Earth
Power was otherwise entitled to a power purchase contract."
Idaho Power was required to enter into PURPA wind contracts by Order
29632 issued on November 22, 2004. That requirement was in full force and effect until
modified by the Commission s Order 29839, dated August 4 2005. EnVision requested
its power contract applications on June 24, 2005 and that request was confirmed by
Idaho Power on June 30, 2005, both prior to the Commission s cut-off date. Energy
Vision (through its affiliates Bennett Creek Windfarm, LLC and Hot Springs Windfarm
LLC) submitted two signed contracts to Idaho Power on July 14, 2005. Those contracts
Petition of Energy Vision, LLC .. 1 -
were identical to previously approved wind contracts, other than project specific
information related to the locations, start dates and energy delivery patterns. Therefore
EnVision believes it was entitled to the power contracts "but for" the actions of Idaho
Power.
COMMUNICATION WITH STAFF
After Idaho Power filed its Petition to Suspend its PURPA Wind Obligations,
EnVision contacted Rick Sterling of the IPUC staff to help it understand the issues it now
faced. The following is an excerpt from his reply of June 22,2005:
I must correct one serious apparent misunderstanding. Idaho
Power s petition is simply a REQUEST for a temporary moratorium.
To date, the Commission has not taken any action whatsoever on
the petition, so a moratorium HAS NOT been approved. Even if the
Commission decides to consider the petition, a moratorium could
not be im lemented without a Commission order. The Commission
could approve a moratorium based just on what Idaho Power has
filed, but the likelihood is that the Commission would either open a
public comment period or require Idaho Power to make a prima
facie showing before considering whether to approve a moratorium.
Until and unless the Commission roves a moratorium Idaho
Power continues to have all its bli ations for PURPA contracts.
Furthermore, even if the Commission does approve a temporary
moratorium, it is probable that proposed projects that have
progressed beyond some specified stage in the contracting process
will be allowed to continue to negotiate contrads within a
reasonable time period. I think the chances of the Commission
closing the door on projects that have already been seriously
negotiating is extremely remote and most likely difficult from a legal
standpoint. Determining which projects get in and which get left out
would be the difficult part if a moratorium is approved.(underscores
added)
Based on this guidance, EnVision believed that it should follow the normal
process for requesting power contracts instead of rushing in with unilaterally signed
agreements, which it could have done prior to the Commission s cut..off date. However,
after realizing that no contracts would be sent by Idaho Power, EnVision prepared and
sent unilateral contracts on July 14, 2005. We believe Idaho Power still had an
obligation to sign such contracts on that date.
Petition of Energy Vision, LLC - 2-
BACKGROUND
EnVision is a small wind energy developer. It's three main partners have
over 50 years of combined wind energy experience and have successfully developed
and financed hundreds of MWs of wind projects. It has invested hundreds of thousands
of dollars in internal and external costs on developing wind projects in Idaho in reliance
on Order 29632. EnVision has primarily focused on developing two 20 MW projects in
the Mountain Home area. The project assets are held by Bennett Creek Windfarm, LLC
and Hot Springs Windfarm, LLC; both Idaho limited liability companies. Two projects
were necessary to economically connect the projects to the 138 kV transmission line on
the site. Substantial development progress has been made in the following areas:
Land Rights. A master Easement with the landowners was signed on
4/20/2005 covering approximately 4 200 acres.
Wind Resource. The site was selected because it is adjacent to a state
anemometer site with publicly available data. The site has been continuously
monitored since 11/26/02. A meteorologist was hired to support all of
EnVision s work in Idaho on 1/26/05. As the projects near financing, a wind
report will be prepared, but EnVision does not require written wind reports
before that time. Instead EnVision continuously integrates detailed input
from its meteorologist throughout the development process.
The base case meteorological assumptions were established by EnVision
before 2/15/2005. This estimate was later confirmed by EnVision s consulting
meteorologist on 6/9/2005. The meteorologist visited the site on 4/14/05.
Financing. EnVision was concerned about its ability to finance a wind power
contract with the 90/110 performance band. Because of this complexity,
EnVision decided to retain a specialist London based investment banking
firm. They are one of the premier financial arrangers in the wind energy
industry. Glenn Ikemoto (an EnVision principal) traveled to London on 3/1/05
to discuss the financing with the bankers. After discussing structural
approaches and months of structuring, analyses and due diligence, EnVision
and its bankers agreed on a detailed Term Sheet The final Term Sheet
provided for turbine deposits and project financing for all of EnVision
projects in Idaho.
Permits EnVision has had ongoing permit discussions with the relevant
officials in Elmore County. These are demonstrated by EnVision
appearance at a County Commissioner's Meeting on 7/27/05. The
appearance was scheduled before Idaho Power's susPension filing.
Interconnection Initial contact with Idaho Power's transmission group was
made on 4/29/05. The issue was whether the transmission request should be
Petition of Energy Vision , LLC - 3-
for a 40 MW substation or two 20 MW projects. Each option has a different
path and financial requirements under FERC rules.
Chronology:
11/22/04
12/13/04
01/10/05
01/26/05
02/15/05
03/01/05
04/14/05
04/20/05
04/29/05
05/09/05
06/09/05
06/17/05
06/21/05
06/22/05
06/24/05
06/27/05
06/30/05
07/01/05
07/14/05
08104105
IPUC Order 29632 - U.s. Geothermal Complaint
Petition For Reconsideration (90/110 Performance Band)
Reconsideration Order
Consulting Meteorologist Hired
Base Case Energy Production and Economics Established
Meeting in London with Investment Bankers
Site Visit by Consulting Meteorologist
Land Easement Signed
Discussions with IPC Regarding Transmission Application
Project Companies Formed
Confirmation of 80 Meter Wind Speed Assumptions by Consultant
IPC Petition to Suspend PURP A Wind Projects Flied
Financial Term Sheet Sent to Bankers
IPUC Staff Guidance on Suspension Issues
Request for Power Contract Application from IPC
Initial Permit Presentation to Elmore County Commissioners
IPC Confirmation of Power Contract Request
IPUC Notice to Parties
Unilateral Signed Contracts Mailed (USPS Priority) to IPC
IPUC Order 29839
Petition of Energy Vision, LLC .. 4 -
CONCLUSION
EnVision began its development activities in Idaho as a result of the
Commission s Order 29632. In reliance on that Order, EnVision has made substantial
investments in Idaho wind projects. EnVision has complied with all rules and proceeded
in good faith. EnVision believed that the power contract execution was ministerial, as
the Commission noted in its Earth Power Resources Order 27231 (Page 6), "The
significance of the posted rates is that they require no negotiation... " EnVision had not
previously requested contracts because of the expected continuing availability of such
contracts, and in that respect believed that contracts should be requested after
transmission feasibility studies are completed. In effect, EnVision is being punished for
conducting itself professionally.
The Commission established the standard for grandfathering transitional
projects in the Earth Power Resources case. A utility's obligation to enter into PURPA
contracts under existing prices and terms continues until those prices or terms are
changed by subsequent Commission order, not by Commission notice. EnVision has
met that standard. Therefore, EnVision respectfully requests the Commission to
reconsider its order in the above docket by changing the power contract cut...off date
August 4, 2005, the effective date of Order 29839. In compliance with its Rule 331.03,
requiring Petitions for Reconsideration to state "whether the petitioner or cross-petitioner
requests reconsideration by evidentiary hearing, written brief, comments or
interrogatories" I EnVision asks the Commission to initiate written briefs to consider the
appropriate cut-off date for grandfathered projects.
Submitted this 25th day of August 2005:
Petition of Energy Vision, LLC - 5-
CERTIFICATE OF SERVICE
I hereby certify that on the 25th day of August, 2005, true and correct copies of
the PETITION FOR RECONSIDERATION OF ENERGY VISION LLC were delivered to
the persons on the attached Service List via the method of service noted.
SERVICE LIST
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
427 W. Washington St.
Boise, ID 83702-5983
Via Fax (and courtesy email where possible)
Bart Kii ne
Monica Moen
Idaho Power Company
[phone]
mm oencmidahopower. com
Richard L. Storro
Director, Power Supply
Avista Corp.
[phone]
dick. storro(g)avistacorp. com
R. Blair Strong
Paine, Hamblen et al
[phone]
r. blair. strong~painehamblen.com
Dean J. Miller
McDevitt and Miller
[phone]
joe~mcdevitt-m iller. com
Peter Richardson
[phone]
peterCQ) richardsonandoleary. com
William J. Batt
John R. Hammond
Batt & Fisher
[phone]
wjb~battfisher.com and jrh~battfisher.com
Jared Grover
Cassia Wind LLC
3635 Kingswood Dr.
Boise, ID 83704-4322
Mike Heckler
Windland
[phone]
m heckler~wi nd land. com
Lisa Nordstrom
Pacificorp
[phone]
Usa. nordstromCQ)pacificorp. com
Bob Lively
Pacificorp
[phone]
bob.lively~pacificorp. com
William Eddie
Advocates for the West
[phone]
billeddie(Q) rmci. net
David Hawk
R. Simplot
[phone]
dhawkcmsim plot. com
R. Scott Pasley
R. Simplot
[phone]
spasleycmsim plot com
Troy Gagliano
Renewable Northwest Project
503-223-4554
renewables~ rnp. org
Armand Eckert
Magic Wind LLC
716-B East 4900 North
Buhl, 10 83316