20100415Knothe Direct.pdf

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Dean 1. Miler (ISB No. 1968)
Chas. F. McDevitt (ISB No. 835)
McDEVITT & MILLER LLP
420 West Banock Street
P.O. Box 2564-83701
Boise, ID 83702
Tel: [phone]
Fax: [phone]
joe(imcdevitt -miler. com
chas(imcdevitt -miler. com
ZOHI ~.PR t 5 AH 10: 05
Attorneys for The New Energy Company LLC
and Western States Equipment Company, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
The New Energy Company LLC,
An Idaho Limited Liability Company, and
Western States Equipment Company, Inc.,
An Idaho Corporation,
Case No. IPC-E-IO-13
Complainants
v.
Idaho Power Company,
A Regulated Public Utility,
Respondent.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
DIRECT TESTIMONY OF LAURA KNOTHE
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Please state your name.
My name is Laura Knothe.
What is your occupation?
I am one of the two co-owners of The New Energy Company LLC.
Please descrbe your educational and professional background.
I have a degree in Civil Engineering. I have 18 years of experience in the
constrction industry providing design and construction management for
commercial and public construction projects. I am a licensed professional
engineer, a licensed constrction manager and a LEED(ß Accredited ProfessionaL.
What is the New Energy Company?
We are a women-owned company specializing in energy efficiency solutions for
businesses and renewable energy development.
What is the purpose of your testimony?
I wil describe the efforts New Energy has undertaken to obtain a power purchase
agreement and electrcal interconnection from Idaho Power Company.
When did you first commence discussions with Idaho Power Company?
On July 23, 2009, I made initial contact with Mr. Randy Allphin ofIdaho Power
Company regarding obtaining power purchase agreements for the Projects. This
was followed by email correspondence from me on July 27,2009, to Mr. Allphin
requesting draft purchase power agreements.
On August 24, 2009, Mr. Allphin transmitted a draft purchase power agreement to
me for the Swager Project.
Knothe, L 1
The New Energy Company
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On September 4, 2009, I requested, bye-mail, that Mr. Allphin provide draft
purchase power agreements for the Double B and Rock Creek projects. At this
time, Mr. Allphin suggested to me that New Energy begin work on the
interconnection process before devoting fuher effort to purchase power
agreements.
Did you then begin discussions with Idaho Power's Delivery Business Unit?
Yes. I began discussions (via email) with Rowena Bishop on September 23,
2009. Leslie and I met with Rowena Bishop on October 12, 2009, when we
submitted our interconnect applications with the required deposits in the amount
of$ 1,000 on October 12,2009 for the Swager and Double B Projects and on
October 13,2009 for the Rock Creek Project. On October 19, 2009, New Energy
received from Idaho Power Company acknowledgement that the Interconnection
Requests were complete and Idaho Power Company included the projects in the
Idaho Power Generation Interconnection Queue as project numbers 307 (Swager),
308 (Double B) and 309 (Rock Creek).
What were the intended nameplate capacities. for the projects at the time of the
Interconnection Requests?
The nameplate capacities for the Swager Fars and Double B projects were 1.2
MW. The nameplate capacity for Rock Creek was 2.4 MW. We have
subsequently deterined that Rock Creek may be capable of an additional 1.6
MW of capacity. We have communicated the possibility of additional capacity to
Idaho Power and this is being taken into account for the Facilities Study for the
Rock Creek project.
Knothe, L 2
The New Energy Company
1 Q.Did you then communicate again with Mr. Allphin?
2 A.Yes. Having commenced the interconnection process, I again, on October 23,
3 2009, inquired of Mr. Allphin about receiving draft purchase power agreements.
4 In reply, Mr. Allphin by email, indicated that the interconnection process should
5 be moved further forward before a power purchase agreement could be signed.
6 Q.Durng this time were you also pursuing efforts on the interconnection process?
7 A.Yes. Between October 19, 2009 and October 27,2009, I communicated with
8 Idaho Power Company personnel regarding setting a Scoping Meeting for
9 Feasibility Studies for the Projects. A Scoping Meeting was with Idaho Power
10 Company personnel and attended by New Energy and Western States on October
11 27,2009.
12 Q.What occured next regarding purchase power agreements?
13 A,On October 29,2009, Mr. Allphin provided a draft purchase power agreement to
14 me. Between October 29,2009 and November 6,2009, I and Mr. Allphin
15 exchanged correspondence regarding information necessary for completion of
16 purchase power agreements. On November 6, 2009, I transmitted to Mr. Allphin
17 completed draft purchase power agreements for the Projects. In my opinion, the
18 power purchase agreements were complete and ready for execution. In response,
19 Mr. Allphin, by email on November 12,2009, advised that the purchase power
20 agreements could not be executed until the interconnection Feasibility Study was
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22 Q.How did your respond?
Knothe, L 3
The New Energy Company
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I, by email, responded that the Feasibility Studies were due to be completed on
December 10, 2009, and that New Energy would be prepared to sign the purchase
power agreements on that date.
What occurred next regarding the purchase power agreements?
On November 14,2009, Mr. Allphin returned the draft purchase power
agreements making minor edits and calling to my attention an issue regarding
maximum capacity amounts.
When did you receive from Idaho Power Company completed Feasibility Studies
for the projects?
On December 21,2009, I received from Idaho Power Company, draft Feasibility
Studies for all three projects. Receipt of the studies was approximately two weeks
later than Idaho Power's commitment date for completion of the studies.
Did you then undertake efforts toward completion of final Feasibility Studies?
Yes. Between December 21,2009 and Februar 9,2010, I and Idaho Power
Company personnel exchanged correspondence regarding final details for the
Feasibility Studies. Durng these exchanges it was confirmed that because of the
project sizes and minimal impacts on the Idaho Power Company electrical system,
System Impact Studies would not be required.
Did you meet with Idaho Power Company representatives on Februar 9, 2010?
Yes. Along with Leslie White and Jay Kesting of Wester States, I met with Mr.
Marc Peterson ofIdaho Power Company to discuss the final Feasibility Study and
a draft Facility Study Agreement. In this meeting, Mr. Peterson advised that
Idaho Power Company was becoming aware of new procedural requirements of
Knothe, L 4
The New Energy Company
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the Federal Energy Regulatory Commission (FERC) relating to purchase power
agreements and required studies. He advised me to contact Mr. Allphin for fuher
information.
Did you then communicate with Mr. Allphin?
Yes. On February 10, 2010, I communicated with Mr. Allphin by email inquiring
about the new requirements. In response, on Februar 11, 2010, Mr. Allphin
advised by email that there were new FERC guidelines requiring Idaho Power
Company, Power Supply Business Unit, to file a Network Resource Designation
with the Idaho Power Delivery Business Unit. Because the guidelines were only
then being implemented Mr. Allphin advised that some time would be required to
determine the effect on the New Energy Projects.
Durng this time did you continue efforts to finalize interconnection
arangements?
Yes. Between Februar 9,2010 and Februar 22, 2010, I continued to exchange
correspondence with Ms. Rowena Bishop of Idaho Power Company regarding
finalizing a Facilities Study Agreement.
Did you also continue with efforts to obtain final purchase power agreements?
Yes. On Februar 27, 2010, in response to another inquiry from me, Mr. Allphin
advised by email that Idaho Power Company was stil in the process of
interpreting the new Network Resource Designation requirements. He fuher
advised that durng the first week of March he would meet with company
attorneys in an attempt to get the process finalized.
Knothe, L 5
The New Energy Company
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Did you ultimately receive from Idaho Power Company an explanation of the new
Network Resource Designation Requirements?
Yes, on March 3, 2010, I received from Mr. Allphin a letter containing the new
Network Resource Designation requirements. I responded on the same day with
additional questions raised by the new Network Resource Designation process.
Were you also continuing interconnection efforts during this time?
Yes. In the mean time, on March 1,2010, I submitted to Ms. Rowena Bishop a
completed Facility Study Agreement and the required deposit of$17,760 for the
Rock Creek Project. On March 3, 2010, I submitted to Ms. Rowena Bishop a
request for extensions for Facility Study Agreements for the Swager and Double
B projects. These requests were granted on the same day by Idaho Power
Company.
What occurred between March 3, 2010 and March 16, 201O?
New Energy undertook efforts to understand and gather information necessar to
comply with the new Network Resource Designation process. Durng this time
New Energy engaged regulatory counsel to assist in that process.
Prior to March 16,2010, did you have any indication that a change in avoided
cost rates was about to occur?
No. Shortly after Order No. 30774 was issued, we received correspondence from
our attorney advising us that the Order had been issued. It was a complete surrise
to us.
Based on the foregoing chronology, do you have any opinions regarding the
significance of these facts?
Knothe, L 6
The New Energy Company
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Yes I do. First, in my opinion, New Energy was diligent in pursuing both
electrcal interconnection and purchase power agreements with Idaho power
Company.
Second, almost all the delay in obtaining executed purchase power agreements is
not attrbutable to New Energy. Draft purchase power agreements were in near
final form by the end of December, 2009. For the first three months of2010
further work on purchase power agreements was put on hold while Feasibility
Studies were completed and while Idaho Power Company attempted to devise
procedures for implementing the Network Resource Designation process. In my
opinion, it can be said, with near certainty, that were it not for this hiatus,
purchase power agreements would have been executed far in advance of March
16,2010.
After March 16,2010 did you continue with efforts toward obtaining a purchase
power agreement?
Yes. On April 1, 2010, I signed and retued to Mr. Allphin the letter referenced
above agreeing to the new Network Resources Designation procedures.
After March 16, 2010, did you continue efforts to obtain interconnection with
Idaho Power Company?
Yes. On April 2, 2010, I transmitted signed Facility Study Agreements for the
Double B and Swager Farms projects to Ms. Rowena Bishop. At the same time, I
transmitted deposits of$11,740 and $11,250 for these projects, although we
agreed with Idaho Power Company that the Company could defer commencement
Knothe, L 7
The New Energy Company
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of the studies, pending resolution of regulatory uncertainty created by Order No.
31025.
Why did you continue to expend effort to obtain purchase power agreements and
electrical interconnection after the issuance of Order No. 31 025?
New Energy desires to demonstrate that it is serious about pursuing the projects, if
it is determined the projects are entitled to avoided cost rates existing prior to
March 16,2010.
Is it important for New Energy to obtain a speedy resolution of this matter?
Yes it is. A certain amount of physical constrction of the Projects must be
completed by the end of the year 2010 in order to be eligible for certain federal
income tax benefits.
Does this conclude your testimony?
Yes it does.
Knothe, L 8
The New Energy Company