20061113Joint surreply comments.pdf

RECEIVED
Peter J. Richardson
Mark R. Thompson
RICHARDSON & 0' LEARY PLLC
515 N. 27th Street
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter~richardsonando leary. com
200& NOV 13 At1 9: 25
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UTILITIES COMlviiSSIO!\ij
Attorneys for Exergy Development Group of Idaho LLC
Dean J. Miller
MCDEVITT & MILLER LLP
420 West Bannock Street
O. Box 2564-83701
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
joe~mcdevitt -miller .com
Attorneys for Cassia Gulch Wind Park LLC and Cassia Wind LLC
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASSIA GULCH WIND PARK LLC AND
CASSIA WIND FARM LLC Case No. IPC-O6-
Complainants JOINT SURREPL Y COMMENTS
OF EXERGY DEVELOPMENT
GROUP OF IDAHO AND CASSIA
WIND TO REPLY COMMENTS
OF COMMISSION STAFF
IDAHO POWER COMPANY
Respondent
INTRODUCTION
COMES NOW, Exergy Development Group of Idaho LLC ("Exergy ) and Cassia
Gulch Wind Park LLC and Cassia Wind Farm LLC (collectively "Cassia Wind") and
submit these Surreply Comments to the Reply Comments of the Commission Staff.
In the Commission s September 27 2006 Notice of Complaint and Notice of
Comment Deadlines, it set a deadline for written comments or protests of October 27
2006 and a deadline for filing reply comments of November 9, 2006.1 This schedule
gave all parties an opportunity to reply to the comments of all other parties.
November 9th, however, Commission Staff filed its only comments in this proceeding as
reply comments, leaving no opportunity under the schedule to respond to Staffs position
and assertions? Exergy and Cassia Wind therefore file these brief comments solely for
the purpose of responding to the Reply Comments of the Commission Staff, since they
otherwise have no opportunity to do so. Allowing Exergy and Cassia Wind to respond
solely to Staff s reply comments will not prejudice any other party to this proceeding.
Also, because these comments were filed on the next working day after receiving Staff s
reply comments, the Commission s consideration of these comments should not delay
these proceedings.
1. Staff's Position, if Adopted, Would Thwart Renewables Development in
Idaho
In their reply comments, Staff states that it is affirming its "continued support of
renewable generation by PURP A QFs in Idaho and the acquisition of same by our
regulated electric utilities at prices representative of the utility s avoided cost.3 Staff
then asserts, however, that by requesting interconnection, QFs incur "a responsibility to
Notice of Complaint and Notice of Comment Deadlines Order No. 30135 at p. 3, IPC-06-21.2 In its Notice of Complaint and Notice of Comment Deadlines, it appears that the Commission may have
anticipated that Staffs comments, if any, would be filed as comments, instead of solely as reply comments.
See p. 3 ("The deadline for filing written comments or protests. . . is Friday October 27, 2006. The
deadline for filing reply comments is Thursday November 9, 2006. Comments filed by Idaho Power
Rocky Mountain Power, A vista and Commission Staff should include a statement of argument and
memorandum of legal authorities.
Staff's Reply Comments p. 3.
JOINT SURREPL Y COMMENTS OF EXERGY AND CASSIA WIND
IPC-06-
pay the transmission upgrade costs necessitated by (their) interconnect request.,,4 Exergy
and Cassia Wind submit that Staff s position in this proceeding would, contrary to their
stated intent, stifle renewable QF development in Idaho and simply transfer to QFs a
responsibility that lies with Idaho Power s transmission customers to maintain an
adequate transmission system. As demonstrated in Cassia Wind's comments and the
affidavit of Jared Grover, the effect of requiring QFs to pay for transmission system
upgrades as part of their costs of interconnection will undermine the economics of
projects that would otherwise be viable. Especially in this instance, where transmission
upgrades will likely be required in any event by Idaho Power s Shoshone Falls capacity
increase and other generation projects requiring QFs to be the parties ultimately
responsible for transmission grid upgrade costs unfairly loads costs onto them of benefits
to the whole system.
2. Staff Inaccurately Characterizes Cassia Wind's Proposal as a Subsidy
In its reply comments, Staff states
, "
Cassia suggests that a subsidy to QFs
(waiving QF upgrade cost responsibility) is warranted by a public policy favoring
renewable energy.6 Exergy and Cassia Wind dispute the assertion that requiring
transmission customers to pay for transmission system upgrades is a subsidy. Exergyand
Cassia Wind also challenge Staff s characterization of their argument as being that Cassia
Wind's proposal is warranted simply because of the public policy favoring renewables.
Cassia Wind and Exergy have presented numerous arguments as to why the Commission
should not allow utilities to charge system upgrade costs to QFs. While one of the
Commission s considerations may be the public policy favoring renewables, that is not
Staff's Reply Comments p. 3.
See Idaho Power s Comments p. 5.
Staff's Reply Comments p. 2.
JOINT SURREPL Y COMMENTS OF EXERGY AND CASSIA WIND
IPC-06-
the thrust of Cassia Wind's or Exergy s arguments in this proceeding, as is demonstrated
by their filed comments. Cassia Wind and Exergy are not requesting a rate payer
subsidy. Cassia Wind's proposal is aimed only at eliminating the unfair barrier to entry
inherent in Idaho Power s proposal.
Exergy and Cassia Wind point out, again, that under both Idaho Power and Cassia
Wind's proposals for financing transmission system upgrades, the costs of those upgrades
will ultimately be put into Idaho Power s base rates. Staff appears to be departing from
both ofthose proposals when it argues that QFs should be the entities ultimately
responsible for those costs.? For the reasons stated in Exergy s and Cassia Wind's filed
comments, such an outcome would be improper.
3. Cassia Wind's Proposal Does Not Result in Power Costs that Exceed
Established Avoided Costs
Staff also makes the argument that passing costs of transmission system upgrades
on to customers results in a price for QF generation in excess of a utility s avoided cost.
Because similar arguments were made by the utilities in this proceeding and addressed in
Exergy s and Cassia Wind's filed comments, we simply restate here that the costs of
upgrades necessary to maintain an adequate Idaho Power transmission system should not
be confused with QF generation rates. Costs of upgrades are not recovered through QF
generation rates and Cassia Wind's proposal will not result in generation rates in excess
of avoided cost. Transmission system upgrades benefit all users of Idaho Power
system, and the rates paid for QF generation will remain at the established avoided cost
rates.
See Staff's Reply Comments p. 3 ("To allow a QF to avoid such transmission upgrade costs and to thereby
pass such costs along to utility customers is to provide a QF a subsidy.
Id.
JOINT SURREPL Y COMMENTS OF EXERGY AND CASSIA WIND
IPC-06-
CONCLUSION
For all ofthe reasons stated herein, Exergy and Cassia Wind urge the Commission
to find that QFs are not required to finance utilities' network upgrade costs in addition to
paying for the costs of interconnecting their proj ects to the utility s system.
Respectfully submitted this 13th day of November, 2006.
RICHARDSON & O'LEARY PLLC
fJ~o
Peter J. Richardson
Of Attorneys for Exergy Development Group
of Idaho
McDEVITT & MILLER LLP
Dean J. Miller
McDevitt & Miller LLP
420 W. Bannock
Boise, ID 83702
Phone: [phone]
Fax: [phone]
Counsel for
Cassia Wind Gulch Park LLC
and Cassia Wind LLC
JOINT SURREPL Y COMMENTS OF EXERGY AND CASSIA WIND
IPC-06-
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 13th day of November, 2006 a true and correct
copy ofthe within and foregoing SURREPL Y COMMENTS OF EXERGY
DEVELOPMENT GROUP OF IDAHO TO REPLY COMMENTS OF COMMISSION
STAFF, was served by U.S. Mail, postage prepaid, to:
Dean J. Miller
McDevitt & Miller LLP
O. Box 2564
Boise, Idaho 83701
Barton L. Kline
Monica B. Moen
Idaho Power Company
O. Box 70
Boise, Idaho 83707-0070
David J. Meyer
Senior Vice President
A vista Utilities
O. Box 3727
Spokane, W A 99220
Ronald K. Arrington
Assoc. Chief Counsel
John Deere Credit
6400 NW 86th Street
Johnston, IA 50131
David Sikes
Idaho Power company
O. Box 70
Boise Idaho 83707-0070
Brian Dickman
Dean S. Brockbank
Rocky Mountain Power
201 S. Main Street, Suite 2300
Salt Lake City, UT 84111
Lawrence R. Lieb
Exergy Development Group of Idaho LLC
910 W. Main St., Suite 310
Boise, ID 83702
Scott Woodbury
Deputy Attorney General
Idaho Public Utilities Commission
O. Box 83720
Boise, Idaho 83720-0074
And hand-delivered to:
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 West Washington
Boise, Idaho 83702
Peter J. Richardson
JOINT SURREPL Y COMMENTS OF EXERGY AND CASSIA WIND
IPC-06-