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Home My WebLink About20050808Petition for reconsideration.pdfWilliam J. Batt John R. Hammond, Jr. BATT & FISHER, LLP U S Bank Plaza, 5th Floor 101 South Capitol Boulevard O. Box 1308 Boise, Idaho 83701 (208) 331-1000 (208) 331-2400 facsimile EC:EiVED ~. ; t~ E t71L...J "'" -'-'I Lw., .." 1UO5AUG - Pr" 4: 5 I to JIO PUBLIC Ii!I....., ..J U. I I Attorneys for Windland Incorporated 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- WIND LAND INCORPORATED'S PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 29839 Introduction Windland Incorporated ("Windland") hereby requests, pursuant to Idaho Code ~ 61-626 and RP 331 , that the Commission reconsider Order No. 29839 (the "Suspension Order ) issued in this case on August 4, 2005. The Commission issued the Suspension Order yesterday, and Windland is still considering the likely effects of the Order on future viability of wind energy in Idaho, including the major project that Wind I and has bid into the Idaho Power Wind RFP. Nevertheless, given the time-sensitivity of the issues in this case, and their importance to the direction of public energy policy in Idaho, Windland has immediately filed this Petition for Reconsideration. Windland intends to expeditiously file a brief in support of this Petition for Reconsideration, together with a request for stay of the Suspension Order pending a decision on Windland's Petition for Reconsideration, and entry or continued stay of the Suspension Order WINDLAND INCORPORATED'S PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 29839 OR' GIN A l during the pendency of Windland's request for review of the Suspension Order by the Idaho Supreme Court, should such a request be filed. Windland requests that the Commission reconsider the Suspension Order on the following grounds: The Order requires Idaho Power to enter into contracts at rates exceeding avoided cost, contrary to law. The Order sets criteria for "grandfathering" certain proposed QF projects that do not have established contractual rights to old, clearly outdated avoided cost rates contrary to law. 1. The rate established in Order No. 29646 does not accurately reflect cost of alternative energy The evidence introduced in the record demonstrates that the current avoided cost rate is too high, at least for wind powered QFs. Section 210 of the PURP A requires that the rates paid to QFs should not "exceed the incremental cost to the electric utility of alternative electric energy . 1 In its testimony and pleadings, Idaho Power asserted that the RFP produced an average price of $55 per MWh. This and other testimony shows that the incremental cost of wind-generated alternative electric energy in the Idaho Power service territory is well below the avoided costs of nearly $61 per MWh established in Order No. 29646.2 Indeed, Idaho Power witness, John R. Gale testified that the current avoided cost rate "deserves to be reexamined" because the Company thought it "would acquire wind resources closer to $43.00" in its RFP. Testimony of John R. Gale Tr. at p. 71 1. 25, p. 72, 11. 11-20. Additionally, the Company 1 Public Utilities Regulatory Policy Act of 1978 , 210(b)(2). 2 Indeed Windland's bid for selling the output of the Cotterrel wind farm is lower than both the avoided cost rate of $61 per MWh for PURP A projects and the Idaho Power claimed $55 per MWh price, fact which further demonstrates that using the current avoided cost rate for wind powered QFs is unjust and unreasonable. Heckler Testimony. WINDLAND INCORPORATED'S PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 29839, P. 2 believed that "integration issues" made applying the current avoided cost rate to wind QFs questionable. ld. Staff witness Rick Sterling agreed in his testimony that there were sufficient reasons to question whether the current avoided cost rates as applied to wind QFs were to high. See Testimony of Rick Sterling, Tr. at pp. 110, 111 & 117. Thus, the Commission correctly found that avoided cost rates are set to high for wind QFs: Based on the record established in this case the Commission finds reason to believe that wind generation presents operational integration costs to a utility different form other PURP A qualified resources. We find that the unique supply characteristics of wind generation and the related integration costs provide a basis for adiustment to the published avoided cost rates, a calculated figure that may be different for each regulated utility. Order No. 29839 at p. 8 (emphasis added). This being the case, the current avoided cost rate is unjust and unreasonable as applied to the parties and matters before the Commission in the instant case. The Commission correctly stated: "In moving forward with this case we do so in recognition that no utility is required to pay more than its avoided cost for QF purchases." Suspension Order, p. 9. Nevertheless, the effect of the Suspension Order is to require Idaho Power to enter into new contracts under PURP A at a rate that clearly exceeds the avoided cost rate for QF purchases. In so doing, the Commission erred. 2. The Commission has ordered grandfathering of QFs contrary to law In the Suspension Order the Commission stated: (TJhis Commission finds it reasonable to establish the following criteria to determine the eligibility of PURP A 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., 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) submittal 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 WINDLAND INCORPORATED'S PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 29839, P. 3 criteria, the QF must also be able to demonstrate other indicia of substantial progress and project maturity, e., (l) 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. Suspension Order, pp. 9-10. In so doing, the Commission requires Idaho Power to enter into contracts with which it has no legal obligation under contract law. Idaho law provides otherwise. Thus the Supreme Court has stated: In A.W. Brown Co., this Court ruled that IPUC has authority, under state and federal law, to require that before a developer can lock in a certain rate, there must be either a signed contract to sell at that rate or a meritorious complaint alleging that the project is mature and that the developer has attempted and failed to negotiate a contract with the utility; that is, there would be a contract but for the conduct of the utility. 121 Idaho at 816 828 2d at 845 Rosebud Enterprises, Inc., v. Idaho Public Utilities Commission, and Idaho Power Company, 131 Idaho at , 951 2d 521 (1997) (emphasis added). Other than the wind QF projects which the Commission has previously approved and the Arrow Rock project, Idaho Power Company has not entered into any further contracts. As such, the "grandfathering" criteria that is provided for in the Commission Suspension Order is in error. Conclusion For the foregoing reasons, Windland requests that the Commission reconsider its decision regarding "grandfathering" in Order No. 29839. After such reconsideration, Windland respectfully 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 because such rate is unjust and unreasonable. WINDLAND INCORPORATED'S PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 29839, P. 4 DATED this 5th day of August, 2005. Respectfully Submitted Jo R. ammond, Jr. Wi ia J. Batt BA T FISHER, LLP 101 South Capital Blvd., Suite 500 O. Box 1308 Boise, ID 83701 (208) 331-1000 WINDLAND INCORPORATED'S PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 29839 , P. 5 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 5th day of August, 2005, I served the foregoing upon all parties of record in this proceeding as indicated below. Barton L. Kline Monica B. Moen IDAHO POWER COMPANY O. Box 70 Boise, ID 83707-0070 bk 1 ine(~jdahopower. com mmoen~idahopower. COIn J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Peter J. Richardson RICHARDSON & O'LEARY PLLC 515 N. 2ih Street Boise, ID 83702 peter~ri chrdsonando eary. com J Certified Mail J First Class Mail J Hand Delivery J F acsimil e ( x J Electronic Mail Richard L. Storro Director, Power Supply A VISTA CORPORATION 1411 E. Mission Ave O. Box 3727, MSC- 7 Spokane, WA 99220-3727 di ck. storro~a vistacorp. com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail R. Blair Strong PAINE, HAMBLEN, COFFIN BROOKE & MILLER LLP 717 West Sprague Avenue, Suite 1200 Spokane, W A 99201-3505 r. blair. strong~painehamb len. com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Scott Woodbury Deputy Attorney General IDAHO PUBLIC UTILITIES COMMISSION 424 W. Washington Street O. Box 83720 Boise, ID 83720-0074 scott. woodbury~puc. idaho. gov J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail WINDLAND INCORPORATED'S PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 29839, P. 6 Michael Heckler Director of Marketing and Development WIND LAND INCORPORATED 7669 West Riverside Drive, Suite 102 Boise, ID 83714 Telephone: (208) 377-7777 Facsimile: (208) 375-2894 mheckler~windland. com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Dean J. Miller McDEVITT & MILLER LLP 420 W. Bannock Boise, ID 83702 oe~mcdevitt -miller .com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Jared Grover CASSIA WIND LLC CASSIA GULCH WIND PARK LLC 3635 Kingswood Drive Boise, ID 83701 J Certified Mail ( x J First Class Mail J Hand Delivery J Facsimile J Electronic Mail Armand Ecker MAGIC WIND LLC 716- BEast 4900 North Buhl, ID 83316 J Certified Mail ( x J First Class Mail J Hand Delivery J Facsimile J Electronic Mail Glenn Ikemoto Principal ENERGY VISION LLC 672 Blain Avenue Piedmont, CA 94611 glenni~pacbell.net J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Bob Lively P ACIFICORP One Utah Center, 23rd Floor 201 S. Main Street Salt Lake City, UT 84140 bob .li vel y~pacifi corp. com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail WIND LAND INCORPORATED'S PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 29839, P. 7 Lisa Nordstrom P ACIFICORP 825 NE Multnomah, Suite 1800 Portland, OR 97232 lisa. nordstrom~pacifi corp. com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail David Hawk Director, Energy Natural Resources J .R. SIMPLOT COMPANY 999 Main Street O. Box 27 Boise, ID 83707-0027 dhawk~simplot. com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail R. Scott Pasley Assistant General Counsel J .R. SIMPLOT COMPANY 999 Main Street O. Box 27 Boise, ID 83707-0027 spasley~simplot.com J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail William M. Eddie ADVOCATES FOR THE WEST 1320 W. Franklin Street O. Box 1612 Boise, ID 83701 billeddie~rmci.net J Certified Mail J First Class Mail J Hand Delivery J Facsimile ( x J Electronic Mail Troy Gagliano 917 SW Oak Street, Suite 303 Portland, OR 97205 J Certified Mail ( x J First Class Mail J Hand Delivery J Facsimile J Electronic Mail WINDLAND INCORPORATED'S PETITION FOR RECO SIDERATION OF COMMISSION ORDER NO. 29839, P. 8