20120308Answer and Motion to Dismiss.pdf

JASON B. WILLIAMS
Corporate Counsel
iwilliamsRìidahopower.com
RECElV ?(IDA~POR~
An 10ACORP Company
March 8, 2012
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilties Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-12-10
INTERCONNECT SOLAR DEVELOPMENT, LLC V. IDAHO POWER
COMPANY
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Idaho Power
Company's Answer and Motion to Dismiss in the above matter.
JBW:csb
Enclosures
1221 W. Idaho St. (83702) (
P.O. Box 70
Boise, 10 83707
JASON B. WILLIAMS (ISB No. 8718)
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
jwilliamscaidahopower.com
dwalkercaidahopower.com
RECEIVED
iOti MAR -8 PM~: 31
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
INTERCONNECT SOLAR
DEVELOPMENT, LLC
Complainant,
)
) CASE NO. IPC-E-12-10
)
) IDAHO POWER COMPANY'S
) ANSWER AND MOTION TO
) DISMISS
)
)
)
)
v.
IDAHO POWER COMPANY,
Respondent.
COMES NOW, Idaho Power Company ("Idaho Power" or "Company") and
pursuant to Rule 57 hereby answers the Complaint of Interconnect Solar Development,
LLC ("Interconnect Solar") as follows:
i. ANSWER
1. Idaho Power admits that it terminated the Firm Energy Sales Agreement
("FESA") with Interconnect Solar. Idaho Power admits that it sent Interconnect Solar a
Termination Notice dated February 9, 2012. Idaho Power filed this Notice with the
Idaho Public Utilities Commission ("Commission") on February 23, 2012. Please see
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 1
Attachment NO.1. Idaho Power denies that it "mishandled" Interconnect Solar's
Generator Interconnection Agreement ("GIA") or its Facilty Study.
2. Idaho Power admits that it provided a Draft Facilty Study Report ("FSR")
to Interconnect Solar on December 23, 2010. The FSR speaks for itself and requires no
additional response from Idaho Power. Idaho Power admits that the FSR provides a
good faith estimate to construct the interconnection facilities for the Interconnect Solar
project of $1,245,000 in 2010 dollars. Idaho Power admits that the FSR contained
project milestone estimates for construction of the interconnection, including a milestone
estimate indicating that construction could be complete 18 months after funds were
received from Interconnect Solar. Idaho Power further asserts that the FSR stated that
"BLM permitting issues are outside the immediate control of Idaho Power and can
influence the Commercial Operation Date." Idaho Power denies any allegation that it
guaranteed a date certain by which Interconnect Solar's interconnection would be
complete.
3. Idaho Power admits that it negotiated and entered into a FESA with
Interconnect Solar. Idaho Power has insufficient information or knowledge to admit or
deny the truth as to the basis of why Interconnect Solar insisted upon a shorter
construction timeline than what was proposed by Idaho Power and therefore denies
such allegations.
4. Idaho Power admits that Interconnect Solar agreed to the Delay Security
provision of the FESA. Idaho Power affirmatively asserts that Section 5.8 of the FESA
states, in part, "Failure to post this Delay Security in the time specified above wil be a
Material Breach of this Agreement and Idaho Power may terminate this Agreement."
Interconnect Solar has failed to post the required security. Idaho Power denies any
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 2
allegation that Interconnect Solar posted the Delay Security as required by the FESA.
Idaho Power admits that Interconnect Solar signed a waiver and release assuming all
risk and all loss, including forfeiture of the Delay Security, if interconnection was not
completed when required. Provided as Attachment NO.2 to this Answer is a true and
correct copy of the wavier and release executed by Interconnect Solar and Idaho
Power. This waiver and release was also filed with the Commission with the Application
and FESA in Case No. IPC-E-11-10.
5. Idaho Power has insuffcient information or knowledge to admit or deny
the truth as to the allegations that Interconnect Solar had discussions with the U.S.
Bureau of Land Management ("BLM") and/or Kelly Moore and therefore denies those
allegations.
6. Idaho Power admits that it had representatives present on October 28,
2011, at a meeting at the BLM offces in Boise but does not agree with the
characterization of the discussions that took place and therefore denies those
allegations.
7. Idaho Power admits that an alternative interconnection path exists for the
Interconnect Solar project, and that this alternative interconnection path would require
the design, permitting, and studies that the Company performs for all other
interconnection paths, as well as BLM permitting for its construction/modification.
8. Idaho Power admits that it assessed Interconnect Solar its standard fee to
complete facility studies for its project. Idaho Power denies any allegation that it
guaranteed completion of construction of the interconnection path for the Interconnect
Solar project within 18 months of the date it received funding from Interconnect Solar.
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 3
9. Idaho Power denies that it made any "error" related to the Interconnect
Solar project.
10. Idaho Power admits that a meeting occurred between representatives of
Idaho Power and Interconnect Solar on December 2, 2012, and that a variety of issues
related to the project were discussed, including Interconnect Solar's failure to post the
Delay Security as required by the FESA. Idaho Power denies that it agreed to "move
the 'In service Date' in the PPA."
11. Idaho Power admits that it sent Interconnect Solar a Revised Facilty
Study Report on January 4, 2012. Such Revised Facilty Study speaks for itself and
requires no further response by Idaho Power. Idaho Power has insufficient information
or knowledge to admit or deny the truth as to the project's "Treasury cash grant, as well
as the 'IN PLACE' financing. . ." and therefore denies those allegations. Further, Idaho
Power denies any allegation that it is at fault or liable for Interconnect Solar's failure to
receive any state or federal grants or financing.
12. Idaho Powe~ denies the allegation that it ever "asked and it was agreed
not to go to the Idaho Public Utilties commission to resolve these issues." Idaho Power
denies any allegation that an agreement was made whereby Idaho Power waived its
right to have the Commission decide any disputes between the parties. Idaho Power
denies that it made any "mistake" and denies any allegation that it dealt with
Interconnect Solar in bad faith. Idaho Power has insufficient information or knowledge
to admit or deny the truth as to Interconnect Solar's "beliefs" and therefore denies any
such allegations.
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 4
13. Idaho Power has insufficient information or knowledge to admit or deny
the truth as to why Interconnect Solar was unable to post the required Delay Security
and therefore denies those allegations.
14. Idaho Power admits that a February 9, 2012, e-mail was sent to
Interconnect Solar regarding the potential timelines for the interconnection related work.
That communication is provided as Attachment NO.3. This communication speaks for
itself and requires no further response from Idaho Power. Idaho Power denies the
characterization of, and any other allegations in the Complaint related to, this
communication.
15. Idaho Power denies the allegation that a revised GIA was not sent to
Interconnect as indicated in the February 9, 2012, communication referenced above.
The revised GIA was sent to Randy Hemmer and Bil Piske on February 14, 2012, at
2:53 p.m.
16. Idaho Power has insuffcient information or knowledge to admit or deny
the truth of Interconnect Solar's "concerns" listed as questions on the bottom of page 4
and continuing to the top of page 5 of the Complaint and therefore denies those
allegations.
17. Idaho Power denies that it has manipulated the required documents for
Interconnect Solar or any other qualifying facilty project
18. Idaho Power denies that it must provide a revised "IN SERVICE date on
the PPA that lines up with the ever moving GIA schedule-72."
19. Idaho Power denies that it must provide "the corrected GIA which lines up
with the BLM meeting and schedules set forth and agreed upon by all Parties."
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 5
20. Idaho Power denies that it must provide "BLM with a timely EA and spring
Botanical study so the BLM can expedite the ROW GRANT."
21. Idaho Power denies all allegations that it delayed the project or caused
damage to Interconnect Solar.
22. Idaho Power denies that it provided an incorrect FSR and GIA and further
denies that any action of Idaho Power caused Interconnect Solar's failure to meet
Interconnect Solar's contractual obligations under the FESA. Idaho Power denies that it
made an error that damaged Interconnect Solar. Idaho Power has insuffcient
information or knowledge to admit or deny the truth as to Interconnect Solar's funding
arrangements and whether Wiliam Piske may have defrauded his lenders and therefore
denies that allegation.
23. Idaho Power denies the allegation that "cancellng" of the FESA is a
"tragedy." Idaho Power denies the allegation that the Delay Security provisions of the
FESA are not enforceable or legaL.
24. Idaho Power admits that it received a December 21, 2011, letter from
counsel for Interconnect Solar alleging a Force Majeure claim. Idaho Power disputes
this claim of Force Majeure.
25. For each allegation made in the Complaint not specifically addressed
above, Idaho Power hereby denies each such allegation.
II. AFFIRMATIVE DEFENSES
26. Interconnect Solar signed a June 7, 2011, agreement whereby it
specifically was advised of and affirmatively accepted and assumed any and all risk
associated with the contingency that the interconnection/transmission facilities would
not be constructed by the Scheduled Operation Date that Interconnect Solar insisted
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 6
upon moving forward with. A copy of this agreement is provided as Attachment No. 2
and incorporated herein by this reference. Accordingly, Interconnect Solar's Complaint
and claims therein are barred by the doctrines of waiver and/or estoppel. Interconnect
Solar's claims are further barred by the doctrine of assumption of the risk and/or
assumption of loss.
27. Interconnect Solar's Complaint, and all allegations and requests for relief
therein, fail to state a claim upon which relief can be granted.
28. Some or all of Complainant's claims are barred by the doctrine of unclean
hands.
29. Some or all of Complainant's claims are barred by the doctrine of judicial
estoppel.
30. Any recovery on Complainant's Complaint, or any purported allegations
and requests for relief therein, is barred in whole or in part by Claimant's failure to
mitigate its damages. By alleging this affirmative defense, Idaho Power does not admit
that Claimant was damaged in any manner, or is entitled to any form of relief.
31. Complainant has brought its Complaint against Idaho Power for the
purposes of harassment, to cause unnecessary delay and needless increase in the cost
of the parties' outstanding litigation, and without evidentiary support for its factual
contentions.
32. Complainant may not be the real party in interest and/or have the right to
bring a cause of action for some or all of the claims it alleges due to its sale or
assignment of rights, if any, under the FESA to a third party.
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 7
33. Some or all of Complainant's claims are barred, in whole or in part,
because Claimant has suffered no damages as a result of the matters alleged in its
Complaint.
34. Complainant's claims are barred, in whole or in part, because any alleged
damages suffered by it were caused by and were the result of its own conduct, fault or
responsibilty, or the intervening or superseding conduct of third parties.
35. Some or all of Complainant's claims are barred, in whole or in part, by the
defense of laches.
36. Some or all of Complainant's claims are barred, in whole or in part, by the
defense of unconscionabilty arising from Complainant's conduct.
37. Idaho Power hereby reserves the right to assert any and all additional
defenses, ascertained during the course of discovery, by amendment to this pleading as
the Commission's rules may allow and/or withdraw or amend the above affirmative
defenses.
II. MOTION TO DISMISS
38. Idaho Power entered into a FESA dated May 11, 2011, with Interconnect
Solar. Idaho Power submitted the FESA for Commission approval on June 17, 2011, in
Case No. IPC-E-11-10. The Commission ordered the parties to make certain
modifications to the FESA. Order Nos. 32361 and 32364. On October 11, 2011, Idaho
Power submitted to the Commission a revised FESA dated October 4, 2011. The
Commission approved the revised FESA on October 20, 2011. Order No. 32384.
39. The law firm of Willams Bradbury, P.C., were the attorneys of record
throughout Case No. IPC-E-11-10.
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 8
40. After the Commission approved the revised FESA, Idaho Power and
Interconnect Solar continued to negotiate various implementation issues related to the
revised FESA and the Interconnect Solar project. The law firm of Wiliams Bradbury,
P.C., represented Interconnect Solar during those subsequent negotiations.
41. On December 16,2011, Idaho Power sent Interconnect Solar a Notice of
Material Breach of Firm Energy Sales Agreement ("Notice") advising Interconnect Solar
that it was in material breach of the revised FESA. The Notice further provided that
Idaho Power would terminate the revised FESA if Interconnect Solar refused to remedy
the material breach. The Notice was sent to Wiliam Piske (one of Interconnect Solar's
developers), Randy Hemmer (one of Interconnect Solar's developers), and counsel for
Interconnect Solar (Ron Wiliams at Wiliams Bradbury, P.C.). Interconnect Solar failed
to remedy the material breach.
42. On February 9, 2012, Idaho Power sent Interconnect Solar a Termination
Notice advising that Idaho Power would terminate the revised FESA if Interconnect
Solar failed to cure the material breach by February 17, 2012. The Termination Notice
was sent to Messrs. Piske, Hemmer, and Wiliams. Interconnect Solar failed to remedy
the material breach, and Idaho Power terminated the revised FESA.
43. On February 14, 2012, Mr. Piske, acting pro se, filed a "Complaint and
request to intervene" against Idaho Power for the "Cancellation of the FESA (PPA) and
Posting of Liquidated Damages." The Commission designated the Complaint IPC-E-12-
10.
44. On February 15, 2012, Mr. Willams, along with Mr. Hemmer, advised
Idaho Power that Mr. Piske had filed the Complaint on his own, and was acting without
the authority of Interconnect Solar to make that Complaint on behalf of Interconnect
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 9
Solar. Mr. Wiliams also advised Idaho Power that either himself or other authorized
representatives of Interconnect Solar would be withdrawing the Complaint.
45. The Commission issued a Summons for the Complaint and it was served
on Idaho Power on February 16, 2012. Pursuant to RP 057, Idaho Power must answer
the Complaint by March 8, 2012.
46. On March 5, 2012, Idaho Power received an e-mail from Mr. Hemmer
wherein Mr. Hemmer attempted to retract his previous statement that Mr. Piske did not
have authority to file the Complaint.
47. Based on the facts and what was communicated to it by counsel for
Interconnect Solar, Idaho Power has a good faith belief that Mr. Piske does not have the
authority to act on behalf of Interconnect Solar and, thus, had no authority to file the
Complaint. Accordingly, the Commission should dismiss the Complaint.
NOW, THEREFORE, Idaho Power respectfully requests that the Commission
dismiss the Complaint as it was not filed by an authorized representative of Interconnect
Solar.
ADDITIONALLY, having fully answered, Idaho Power prays:
1. That Interconnect Solar's Complaint be dismissed with prejudice
and that it go hence without cost or delay; and
2. For such other relief as the Commission deems just and
reasonable.
Respectfully submitted this 8th day of March 2012.,,-
~cJ '") ~__-=
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 10
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 8th day of March 2012 I served a true and
correct copy of IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS
upon the following named parties by the method indicated below, and addressed to the
following:
Commission Staff
Kristine A. Sasser
Deputy Attorney General
Idaho Public Utilties Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
-l Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-l Email Kristine.Sassercapuc.idaho.gov
Interconnect Solar Development LLC
Bil Piske, Manager
Interconnect Solar Development, LLC
1303 East Carter
Boise, Idaho 83706
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
-l Email bilpiskecacableone.net
Randy Hemmer, Manager
Interconnect Solar Development LLC
3777 Twilight Drive
Boise, Idaho 83703
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
-l Email randyhemmercaclearwire.net
Ronald L. Willams
WILLIAMS BRADBURY, P.C.
1015 West Hays Street
Boise, Idaho 83702
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
-l Email roncawiliamsbradburv.com
'\~2.~J Sõlliams
IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISMISS - 11
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-12-10
IDAHO POWER COMPANY
ATTACHMENT NO.1
ø_.
An 10ACORP Coinp~ny
JASON B. WILLIAMS
Corporate Coon..'jwilliamsldahopor.çom
February 23,2012
VIA HAND DELIVERY
Jean D. Jewell. Secretary
Idaho Public Utilties Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPG-E-11-10
IN THE MA ITER OF THE APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINA nON REGARDING THE FIRM ENERGY
SALES AGREEMENT WITH INTERCONNECT SOLAR DEVELOPMENT,
LLC FOR THE SALE AND PURCHASE OF ELECTRIC ENERGY
Case No. IPC-E-12-10
INTERCONNECT SOLAR DEVELOPMENT, LLC V. IDAHO POWER
COMPANY
Dear Ms. Jewell:
Please be advised that Idaho Power Company ("Idaho Powet') has terminated
the Firm Energy Sales Agreement ("FESAn) with Interconnect Solar Development, LLC
("Interconnect Solat') that was approved by the Idaho Public Utilties Commission
("Commission") in Final Order No. 32384.
Enclosed please Jind the December 16. 2011, Notice of Material Breach of Firm
Energy Sales Agreement sent by Idaho Power to Interconnect Solar. This Notice
advised Interconnect Sólar that it was in material breach of the FESA for failure to post
the required delay security deposit. The Notice further advised that Idaho Power would
terminate the FESA if Interconnect Solar failed to cure this matérial breach as
expeditiously a.s possible, as is required by the Firm Energy Sales Agreement.
Also enclosed please find the February 9,2012, Termination Notice from Idaho
Power to Interconnect Solar advising that Idaho Power would terminate the FE SA if
Interconnect Solar failed to cure the material breach of the FESA and post the required
delay security deposit by February 17, 2012, at 5:00 p.m.
1221 W. Idaho St. (83702)
P.o. Box 70
Boise. ID 83707
Jean D. Jewell
February 23, 2012
Page 20f2
Intercnnect Solar failed to post the required delay security deposit by the
February 17 deadline and, thus, failed to cure the material breach of the FESA.
Accordingly, the FESA between Idaho Power and Interconnect Solar is now terminated.
This leter and its attachments are being sent to the Commission for inclusicm as
part of the Commission's file and record. evidencing the Notice of Material Breach and
Termination of this Commission-approved Firm Energy Sales Agreement.
Sincerely,
cZ B. Wiliams
"
JBW:csb
Enclosures
cc: Kristine A. Sasser (w/encls.)
Randy Lobb (w/encls.)
Rick Sterling (w/encls.)
Ronald L. Wiliams (w/encls.)
Randy Hemmer (w/encls.)
Bil Piske (w/encls.)
ø_.
An IOACORP comp¡ny
December 16, 2011
Rady C. AUphin
Senor Energy Contrct Coordinator
Interconnec Solar Development Ltc
3777 Twiliglt Drve
Boise, ID 83703
Origial: Cerfied U.S. Mai
E-mail Copy: Bil Piske
Ray Hemer
Ron Willams
biiipìsk~cableone.net
radyhemer§gmai.co
ron§wUiambradbur.com
RE: Inteconnect Solar Development LLC
Project Name: Murhy Flats Solar Power Project
Projec Numbe - 12616650
Notice ofMateal Breach of the Finn Energy Sales Agreement - Delay Security Depsit
Idaho Power and Interconnect Solar Development LLC are pares to the Firm Energy Sales
Agrement ("FESN') betwee Interconnect Solar Development LLC an Idao Power Company
dated October 4th, 2011 ("Agreeent") which was approved by the Idaho Public Utilities
Cornssion ("Commission") on October 20,2011, by COiníllsion Orer 32384.. .,
¡ Paragaph 5.8 of this Agreeent states:
"With th (30) days of the date of a fi non-appeaable Commissio Orer as
specified in Article XX aproving ths Agreement, the Sener shl post liquid
secty ("Delay Securty") in a form as descrbed in Appendí D equal to or
exceecñng the amount caculated in paragraph 5.8.1. Failur to post this Delay
Secty in the time specfied above will be a Materal Breach of ths Agrement
and Idaho Power may terinate this Agreement."
Pag 1 of2
Idaho Power calculaes the amount of ths required Delay Securty as specfied in pargraph
5.8.1 to be; $45 ties the Maxum Capacty of 20,000 kW equas $900,000.
COmmission Ort 32384 apving th Agreeent was dated October 20,2011, the fial
non appeaable order date being November 10,2011 (21 day rensdeation perod past the date
the Cornssion Order was issued) and 30 days pat that date (due dae for postig of Delay
Secty) caculates to be December 10, 2011. As Decber 10, 2011 was a Satuay, Idao
Power consde the due date to post the Delay Secty to be Monday December 12, 2011.
As of the date of ths letter, December 16,2011, Inteect Sola Development LLC ha
failed to post the Delay Securty as required by ths Agrent. Consequetly, pleas be advised
that Idaho Power is providing this wntten Notice to Iitennect Solar Development LLC, that it is
noW ín Materal Breac of the PESA. Puuant to Paragraph 19.2.2 of the FESA, Intecoec
Solar Development LLC must cue ths Materal Brech "as expeditîously as possible following
oCCUce of the brech." Idaho Power wi ternate this FESA if ths Materal Breach is not
cured as expeditiously as possible.
Please contact me with any questions you may have.
Sincørly,
Ae.~,
Randy C Allphin
Idaho Power Company
Cc: Donva Wal (iCQ)
BiUPisk
1303 E. Car
Boise, ID 83706
Paste 2 of2
-_.
An IDACORPtOpanv
Febrary 9, 2012
Randy C. Alphi
Senor Energy Contract Coordor
Intercoec Solar Development LLC
3717 TwiUght Drve
Boise, ID 83703
Orginal: Cerified U.S. Mal
E-mail Copy: Bil Piske
Raidy Heier
Ron Wiliams
bilpise(cableone.net
radyheier(Bgiail.com
roti(Bwillambradbury.co
RE: Interconnect Solar Developent LLC
Proect Nam: Murhy Flats Solar Power Project
Projec Number - 12616650
My record indicte that the project was prvided a rese Facilty Study on January 4iJ,
2012. The project has idettified ths revised Facilty Study in varous meegs and cospondence
as a k~ element the project requied in order to cu the cuih Materal Brech of the Finn
Energy ¡Sales Agreement (UFESA"). )
Mr. Wiliams' letter dated Deceber 21, 2011 states that the prect will reuie two to four
weeks aft presentation of the reised Facilty Study to cu ths Materal Brech.
Notification of the Materal Breach was issued on Decber 16, 2011. It has now been over
five weeks since the projec received the revised Faclity Study, and eight weeks since notification
of the Materal Breach.
Page 1 of2
Plcl pivide Idao Power aeblelecty as reui in the FEA to cu ths Ma
Br no la th clse of ~ Friday Fèb 171; 2012; 5:00 p.t. Moun Sfaat
Tiø tQ avid teton of ths FHA. If t1 resèC is not so pote by the deadline
menonabovc, th FESA wi be teat IS ottht date and 1:
SinYl
11~~.R.y C Al1p
I&d Power Cøy
Ce: .~ Wal(1
Bill".IJ a Cit
Ø..ID 83106
Page2of2
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-12-10
IDAHO POWER COMPANY
ATTACHMENT NO.2
HIDA~PO~
An 10ACORP company
DONOVAN E. WALKER
Lead Counsel
dwalkerliidahopower.com
June 7,2011
VIA ELECTRONIC MAIL & U.S. MAIL
Ronald L. Wiliams
WILLIAMS BRADBURY, P.C.
1015 West Hays Street
Boise, Idaho 83702
Re: Interconnect Solar Development, LLC
Ron:
Thank you for your letter of May 31, 2011, to Mr. Allphin and the accompanying
Firm Energy Sales Agreements ("FESA") signed by your client, Interconnect Solar
Development, LLC ("Interconnect Solar"). This letter is in response to your above-
referenced letter, as well as a memorial of our several phone conversations over the
past week.
Your letter expressed a great deal of urgency in requesting Idaho Power
Company ("Idaho Power" or "Company") to finish its required reviews of the final
execution copy of the FESA and to file the FESA with the Idaho Public Utilties
Commission ("Commission") prior to the Commission issuing its order in Case No.
GNR-E-11-01. Your letter also states that your understanding of Mr. Allphin's previous
communication was that should the Commission issue an order in Case No. GNR-E-11-
01 reinstating a ten average megawatt standard rate eligibility cap for solar projects,
that the Company would not execute the FESA with Interconnect Solar that is based
upon the Integrated Resource Plan ("IRP") pricing model. As clarified in our phone
conversation, although the Company cannot guarantee that no matter what the
Commission's pending order may say that the Company would sign the FESA, if the
order comes out and simply reinstates the ten average megawatt published rate
eligibility cap for solar projects that the Company would sign Interconnect Solar's FESA
based upon the IRP pricing methodology and submit the same for the Commission's
approval or rejection. Consequently, the inference that Idaho Power was somehow
creating the urgency by which you and your clients needed to sign the contract based
upon Mr. Allphin's statements in unfounded.
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, 10 83707
Ronald L. Wiliams
June 7,2011
Page 2 of 3
We have had several discussions and communications with regard to the
project's selection of the Scheduled Operation Date in the FESA in relation to the time
that Idaho Power Delivery requires to design, permit, and construct the required
interconnection/transmission facilties for this project. This was the subject of my April
12, 2011, e-mail to you. For your convenience, I have attached that e~mail to this
correspondence so that I do not have to repeat those details here.
As we discussed, the FESA that your client has signed and submitted to Idaho
Power, and that you have requested that Idaho Power execute and file with the
Commission, contains your client's selection of a Scheduled First Energy Date of June
1, 2012, and a Scheduled Operation Date of July 1, 2012. Additionally, your client wil
be required by the terms of the FESA to post Delay Security in the amount of $45 per
kilowatt of nameplate capacity to secure Delay Liquidated Damages that wil be incurred
should the project not come on-line by the Scheduled Operation Date of July 1, 2012,
that it has selected. You and your client have been informed that Idaho Power's current
best estimation of its construction completion for the facilities is 18 months from the time
in which the project pays the required fees set forth in the Generator Interconnection
Agreement ("GIA") which have to this date not yet been paid. To be clear, Idaho Power
is not legally obligated to complete the interconnection/transmission related work by
your selected July 1, 2012, Scheduled Operation Date. Idaho Power is obligated to
abide by the GIA for the construction and completion of those facilities. Additionally,
should your project be unable to come on-line by July 1, 2012, even if the only reason
that it cannot do so is the fact that the interconnection/transmission facilties are not
completed at that time, that this wil not excuse your required performance under the
FESA, nor the forfeiture of the Delay Security that you wil be required to post.
Idaho Power has advised that your selection of a Scheduled Operation Date prior
to such time that the interconnection/transmission facilities are scheduled to be
completed puts your Delay Security at substantial risk of forfeiture, and could result in
your contract being terminated subsequent to such forfeiture. By insisting we move
forward with execution and filing of the FESA containing your selected July 1, 2012,
Scheduled Operation Date, you hereby accept and assume any and all risk associated
with the contingency that the interconnection/transmission facilities wil not be
constructed by your selected Scheduled Operation Date.
Being so advised, it is your desire that Idaho Power execute the FESA draft that
you signed and delivered to Idaho Power with your May 31, 2011, letter referenced
above. You hereby confirm and acknowledge that you wish to move forward with the
FESA, including the Idaho Public Utilities Commission approved $45 per kilowatt of
project capacity delay security, knowing that your selected Scheduled Operation Date ismuch sooner than Idaho Power is obligated to construct the
interconnection/transmission facilities. In addition, your client has been advised, and
accepts the risk, that delays in the interconnection/transmission process do not
constitute excusable delays in achieving the Scheduled Operation Date, and if the
Ronald L. Wiliams
June 7, 2011
Page 30f3
project fails to achieve the Scheduled Operation Date at the time specified in the FESA,
delay damages wil be assessed and delay security applied.
Please acknowledge your receipt, acceptance, and agreement by signing a copy
of this letter in the space indicated below and retuning the same to me. Upon receipt of
your acknowledgment, the executed FESA wil be filed with the Commission for its
review.
t-vUCL
Donovan E. Walker
DEW:csb
cc: Randy Allphin (via e-mail)
Lisa Loomis (via e-mail)
Agreed to and Accepted on behalf of Interconnect Solar Development, LLC:
Bil Piske/Randy Hemmer
On behalf of and for Interconnect
Solar Development, LLC
Ronald L. Wiliams
Legal Counsel for Interconnect Solar
Development, LLC
Ronald L. Willams
June 7,2011
Page 30f 3
project fails to achieve the Scheduled Operation Date at the time speifed in the FESA.
delay damages will be assessed and delay security applied.
Please acknedge your reipt, accptanc, and agrement by signing a copy
of this letter In the space indicated below and retuning the same to me. Upon reipt of
your acknowledgment. the execed FESA will be filed with the Commission for its
review.
Sinæly.
l~/. \ .tc1t:'.1 _..-- -~..e"" . '"/' -(_._,..
Donovan E. Walker
DEW:csb
cc: Randy Allphin (vla e-mail)
Lisa loomis (vla e-mail)
Agreed to and Accpted on behalf of Intercnnect Solar Development, LLC:
" )v't,4¡t l'Allt~
Bil Pis eJ y Hemmer
On behalf of and for Internnect
Solar Development, LLC
.
RJ/ L IJIJ
Ronald L Williams
Legal Counsel for Intercnnect Solar
Development. LLC
Walker, Donovan
From:
Sent:
To:
Cc:
Subject:
Attchments:
Walker, Donovan
Tuesday, April 12, 2011 11 :45 AM
Ron Willams
Allphin. Randy; Loomis, Lisa; Bishop, Rowena
Murphy Solar Scheduled Opeation Date
Murphy Solar Draft GIA (00057481).DOC; FW: E&P Agreement Murphy Flats
Ron,
i left you a voice message today, and your legal assistant said that you are out of the offce until Friday so I thought I
would also send you this e-mail. i am reviewing the final execution draft of the Murphy Solar PURPA contract, and
wanted to call your attention to the projects selected First Energ Date of February 10, 2012, and the projects selected
Scheduled Operation Date of April 1, 2012.
My understanding from Lisa Loomis, the project manager for the interconnection of this project, is that Idaho Power
Delivery wil require at least 18 months from the time that funds are paid by the project pursuant to the final Facility
Study Report that the project has accepted, as well as the draft GIA, that stil needs to be finalized, in order to permit
and construct the required interconnection facilities for this project. The First Energ, and more importantly the
Scheduled Operation Date selected by the project is much sooner than those facilties can be constructed. Even if the
required fees were paid today, the April 1, 2012, date is less than one year away, and not likely to be met with Deliverys
projected construction time line. As we have discussed, the project is required to post delay security that wil be subject
to forfeiture if the Scheduled Operation date is not met.
A couple of other things to keep in mind: Because the interconnection work requires BLM permitting, environmental
surveys must be conducted where the route(s) cross/impact BLM lands. These environmental surveys can only be done
during the Spring survey season, which is upon us now. If the required surveys are not completed during this Spring's
survey season, then they wil not be able to be completed until the next Spring survey season, in the Spring of 2012,
essentially adding an additional year to the 18 month timeline required for the construction of the interconnection
facilties. Lisa Loomis forwarded an Engineering and Procurement Agreement to Mr. Piske on April 6 for this Spring
Survey work, which requires execution by the project and initial payment of the estimated cost of $50,000 by April 25,
2011, in order to be included in this yeats Spring survey season. Like I said, if this is missed, it will result in an additional
one-year before the required survey work for the required BLM permits can even begin.
For your convenience, i have attached to this e-mail both the E&P Agreement for the spring survey work, as well as the
draft GIA which sets forth the required timeline. To be clear: (1) the E&P Agreement must be in place, with payment, by
April 25, 2011, in order to meet this yeats spring environmental survey season; (2) the GIA must be executed and in
place, and the 18 month estimated construction time starts from the time that payment is made pursuant to the GIA.
The GIA requires payment of the $1,245,000 cost estimate up front in order for the required work - and timeline - to
start.
Please contact me at your earliest convenience to discuss the projects selection of its First Energy and Scheduled
Operation Date in the PURPA contract. As always, you may contact me with any other questions, comments, or
concerns as well.
Regards,
Donovan E. Walker
Lead Counsel
Idaho Power Company
208-38-5317
1
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-12-10
IDAHO POWER COMPANY
ATTACHMENT NO.3
Walker, Donovan
From:
Sent:
To:
Cc:
Subject:
Attachments:
Walker, Donovan
Thursday, February 09,20124:11 PM
Randy Hemmer; BILL PISKE; 'Ron Willams'
Bauer, Rich; Bishop, Rowena; Allphin, Randy; Loomis, Lisa; Sloan, Aubrae
FW: Draft GIA Murphy Solar
CoverDGIA345.pdf; DGIA345.pdf
Gentlemen,
PLEASE BE ADVISED:
The Milestone dates set forth in Attachment 3 of the enclosed Draft Generator Interconnection
Agreement #345 ("GIA") that was forwarded to you on February 2, 2012, are not correct. Those
dates start with Construction Funding by the project on March 1, 2012, and end with a
Customer's In-Service Date of October 30, 2013.
Our most recent information from Idaho Power's Environmental Permitting personnel is that the
BLM permitting process for this project, in and of itself, can be much longer than the entire
timeline set forth above and in the draft GIA forwarded to you on February 2, 2012. Idaho
Power's current best estimate for the time required to conduct the required environmental and
cultural study work, for BLM to conduct the required Environmental Assessment, and for BLM to
ul timately issue a Record of Decision and possible ROW Grant is 24 months. In addition,
there will be at least six months of required construction time subsequent to a BLM ROW
Grant.
Also, as we have discussed on several occasions, there is no guarantee as to the timing of
the BLM permitting process. It could be shorter - or it could be longer - than what Idaho
Power's best estimate is . Additionally, there is no guarantee that BLM will grant the ROW
request at all, and it could ultimately be rejected or denied.
I apologize for any inconvenience that inclusion of the incorrect Milestone dates in this
Draft GIA may have. Idaho Power will revise the Milestone dates contained in Attachment 3 to
the Draft GIA, and send you a new draft as soon as possible.
Sincerely,
Donovan E. Walker
Lead Counsel
Idaho Power Company
208-388-5317
- - - - -Original Mes sage - - - - -
From: Bishop, Rowena
Sent: Thursday, February 02, 2012 2: 16 PM
To: Randy Hemmer
Cc: Ronald Williams; Walker, Donovan; 'BILL PISKE'; Bauer, Rich; Loomis, Lisa; Sloan, Aubrae
Subject: Draft GIA Murphy Solar
Hi Randy,
1
The attached is being mailed today. Please provide the contact information for Section 9,
and items listed in the cover letter to me and advise if we are ready to issue a final. I
look forward to hearing from you soon.
Rowena Bishop
Operations Analyst
Interchange Operations - chq 4
Ext. 388-2658
- - - - -Original Message- - - --
From: Bishop, Rowena
Sent: Thursday, February 02, 2012 8: 08 AM
To: Randy Hemmer
Cc: Ronald Williams; Walker, Donovan; 'BILL PISKE'; Bauer, Rich; Loomis, Lisa
Subject: RE: GIA Murphy Solar
Randy,
I will get this to you today or tomorrow. Please call me if you have any questions at all
about the GIA. Thank you.
Rowena Bishop
Operations Analyst
Interchange Operations - chq 4
Ext. 388-2658
- - - - -Original Message- - - --
From: Loomis, Lisa
Sent: Wednesday, February 01, 2012 3: 39 PM
To: Bishop, Rowena
Cc: Randy Hemmer; Ronald Williams; Walker, Donovan; 'BILL PISKE'; Bauer, Rich
Subject: RE: GIA
Hi Rowena,
Please see the email below regarding the GIA for Murphy Flats.
Thanks,
Lisa.
- - - - -Original Message- - - --
From: BILL PISKE (mailto:billpiske~cableone.net)
Sent: Wednesday, February 01, 2012 3: 28 PM
To: Loomis, Lisa
Cc: Randy Hemmer; Ronald Williams
Subject: GIA
Lisa, Interconnect Solar received the cost increase of the Murphy flats path on Jan 4, 2012.
Interconnect solar has asked for the new GIA relating to the cost increase, 3 weeks ago, so
we may move forward on the funding of the project. Can you send this document out Thursday-
Friday 2/02=2/03/2012 as it has been quite a while fixing this mistake of the BLM path across
the no go zone.?
Bill Piske~cableone.net 1-208-941-7458
Interconnect Solar Development LLC.
2