20120608reconsideration_order_no_32571.pdf

Office of the Secretary
Service Date
June 8, 2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
INTERCONNECT SOLAR
DEVELOPMENT, LLC,
COMPLAINANT,
V.
IDAHO POWER COMPANY,
RESPONDENT
CASE NO. IPC-E-12-10
ORDER NO. 32571
On May 11, 2012, Interconnect Solar Development, LLC (Interconnect Solar,
Project) filed a Motion for Reconsideration of Commission Order No. 32531. In its Motion,
Interconnect Solar asks the Commission to reinstate its Firm Energy Sales Agreement (FESA)
with Idaho Power and "order Idaho Power, as unwilling as they are, to fix their mistake, and
perform their requirements without error. . . ." Motion at 6. Idaho Power filed an answer to
Interconnection Solar's Motion on May 18, 2012. Based upon our review of the evidence and
arguments of the parties, we deny Interconnect Solar's request for reconsideration, as set out in
greater detail below.
BACKGROUND
On June 17, 2011, Idaho Power Company filed an Application with the Commission
requesting acceptance or rejection of a 25-year Firm Energy Sales Agreement (Agreement)
between Idaho Power and Interconnect Solar. Interconnect Solar would sell and Idaho Power
would purchase electric energy generated by the Murphy Flats Solar Power Project located near
Murphy, Idaho.
Following the submission of comments by the parties and the public the case was
fully submitted for the Commission's consideration. On September 20, 2011, the Commission
issued Order No. 32361. The Commission noted that all parties had acknowledged a
computational error that was made in the escalation rate that was applied to the CCCT capital
cost component from the 2009 IRP that was carried through and used in the IRP pricing model
for the Interconnect Solar project. In an effort to permit the parties an opportunity to correct the
mathematical error without creating undue delay, the Commission allowed Idaho Power and
ORDER NO. 32571 1
Interconnect Solar additional time to resubmit their Firm Energy Sales Agreement with accurate
calculations prior to the Commission making a final determination regarding the Agreement.
Order Nos. 32361 and 32364.
On October 11, 2011, pursuant to Commission Order Nos. 32361 and 32364, Idaho
Power resubmitted the parties' Firm Energy Sales Agreement. The adjustments resulted in a
levelized price of $97.47 per MWh. In the modified Agreement, Interconnect Solar selected
September 1, 2012, as its commercial operation date (COD). The Project had been advised by
Idaho Power that its COD was prior to such time that interconnection/transmission facilities were
scheduled to be constructed and complete. Interconnect Solar acknowledged and expressly
agreed to accept the risk associated with not meeting its COD. On October 20, 2011, the
Commission approved the replacement Agreement signed by Idaho Power and Interconnect
Solar on October 4, 2011, for the sale and purchase of electric energy. Order No. 32384.
COMPLAINT AND ANSWER
On February 14, 2012, Interconnect Solar Development, LLC (Interconnect Solar,
Project) filed a Complaint and Request to Intervene with the Commission. Interconnect Solar
maintained that Idaho Power improperly cancelled its Firm Energy Sales Agreement (FESA) and
mishandled its Generator Interconnection Agreement (GIA) and facility study. Interconnect
Solar requested that the Commission (1) require Idaho Power to provide a revised in-service date
in its FESA to comport with "the ever moving GIA schedule-72"; (2) require Idaho Power to
provide a corrected GIA "which lines up with the BLM meeting and schedules set forth and
agreed upon by all Parties"; (3) require Idaho Power to provide the BLM with "a timely EA
[Environmental Assessment] and spring Botanical study so the BLM can expedite the ROW
GRANT"; and (4) direct Idaho Power "to stop delaying the project and damaging Interconnect
Solar." Complaint at 5.
In its Answer, Idaho Power asserted that Interconnect Solar was put on notice that
BLM permitting issues were outside of its control and could influence the Project's commercial
operation date. Answer at 2. Idaho Power argued that Interconnect Solar "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. . . ." Id. Idaho Power maintained that any alleged damages suffered by Interconnect Solar
were caused by and the result of Interconnect Solar's own conduct. Id. at 8. Interconnect Solar
ORDER NO. 32571 2
agreed to the delay security provisions in its FESA. The Project failed to post the security
pursuant to the terms of the Agreement. As a result, Idaho Power terminated the Agreement.
For these reasons, Idaho Power requested that the Commission dismiss the Complaint with
prejudice.
FINAL ORDER NO. 32531
After a thorough review of the evidence, we dismissed the complaint filed by
Interconnect Solar. Interconnect Solar's delay security was due no later than December 11,
2011. On December 16, 2011, Idaho Power notified Interconnect Solar that it was in material
breach of its Agreement because of the Project's failure to post its required delay security.
Answer, Atch. 1. On February 23, 2012, Idaho Power notified Interconnect Solar that its FESA
had been terminated after it failed to cure the material breach by posting the required delay
security deposit. Interconnect Solar does not dispute that it has not posted the delay security
pursuant to Section 5.8 of the Agreement. Interconnect Solar asserted that it would be unable to
obtain a loan to post the required delay security with an obsolete GIA and unworkable
commercial operation date.
This Commission admonished that Interconnect Solar was repeatedly warned about
choosing a commercial operation date that preceded Idaho Power's estimated time for
completion of the Project's interconnection. Interconnect Solar argued that its failure to post a
delay security stemmed from issues with its GIA. However, its Agreement with Idaho Power
states that "[d]elays in the interconnection and transmission network upgrade study, design and
construction process that are not Force Majeure events accepted by both Parties, shall not
prevent Delay Liquidated Damages from being due and owing as calculated in accordance with
this Agreement." Agreement, ¶ 5.3 (emphasis in original).
We stated that "[t]he concerns of Idaho Power, Staff and this Commission have been
realized. Setbacks with regard to Interconnect Solar's GIA have affected the Project's ability to
post its required delay security deposit." Order No. 32531 at 5. Because Interconnect Solar was
in material breach of its FESA and failed to cure the defect, we found that Idaho Power
terminated the FESA consistent with the terms of the Agreement. Accordingly, we dismissed the
complaint filed by Interconnect Solar.
1 The record in the underlying complaint case closed on April 9, 2012, when the case was fully submitted to the
Commission for deliberations. On April 16, 2012, Interconnect Solar filed a request for oral argument. Interconnect
Solar's request was untimely and, therefore, not considered.
ORDER NO. 32571 3
FINDINGS AND CONCLUSIONS
In its request for reconsideration, Interconnect Solar restates the position asserted in
its complaint. Interconnect Solar argues that Idaho Power knew the originally proposed
interconnection path was not viable and Idaho Power's error caused Interconnect Solar's
inability to comply with the FESA' s required delay security deposit provisions. Interconnect
Solar requests that the Commission order Idaho Power to fix the mistake and allow the project to
proceed.
In its answer, Idaho Power states that Interconnect Solar's request for reconsideration
does not explain why Order No. 32531 is unreasonable, unlawful, erroneous, or not in
conformity with the law. Idaho Power further maintains that Interconnect Solar fails to offer any
new statements, evidence or arguments that would cause the Commission to reconsider its
original decision. Idaho Power argues that the Motion should, therefore, be denied.
Reconsideration provides an opportunity for a party to bring to the Commission's
attention any question previously determined and thereby affords the Commission with an
opportunity to rectify any mistake or omission. Washington Water Power Co. v. Kootenai
Environmental Alliance, 99 Idaho 875, 879, 591 P.2d 122, 126 (1979). The Commission may
grant reconsideration by rehearing if it intends to take additional argument. If reconsideration is
granted, the Commission must complete its reconsideration within 13 weeks after the deadline
for filing petitions for reconsideration. Idaho Code § 61-626(2). The Commission must issue its
order upon reconsideration within 28 days after the matter is finally submitted. Id.
Interconnect Solar's request for reconsideration does little more than reiterate the
arguments made in its underlying complaint. The Project blames its inability to post the delay
security deposit on Idaho Power's "error in choosing and suggesting [an interconnection] path
that was never viable. .. ." Motion at 4. Interconnect Solar's arguments were considered by this
Commission when we issued our initial decision dismissing the Project's complaint. Setbacks
with regard to Interconnect Solar's GIA made terms in its FESA unworkable. However, as we
previously stated, "Interconnect Solar was repeatedly warned about choosing a commercial
operation date that preceded Idaho Power's estimated time for completion of the Project's
interconnection." Order No. 32531 at 4. The Project cannot now blame Idaho Power for not
being able to meet its target dates that Interconnect Solar chose despite repeated warnings.
ORDER NO. 32571 4
Moreover, the Agreement negotiated and signed by both parties states that "[d]elays
in the interconnection and transmission network upgrade study, design and construction process
that are not Force Majeure events accepted by both Parties, shall not prevent Delay Liquidated
Damages from being due and owing as calculated in accordance with this Agreement."
Agreement, ¶ 5.3 (emphasis in original). We find that Idaho Power complied with the terms of
the Agreement between the parties and terminated the Agreement consistent with its terms.
Interconnect Solar has failed to set forth grounds why Order No. 32531 is
unreasonable, unlawful, erroneous or not in conformity with the law pursuant to Rule 331.01 of
the Commission's Rules of Procedure. IDAPA 31.01.01.331.01. Therefore, Interconnect Solar's
Motion for Reconsideration is denied.
ORDER
IT IS HEREBY ORDERED that the May 11, 2012, Motion for Reconsideration filed
by Interconnect Solar is denied.
THIS IS A FINAL ORDER ON RECONSIDERATION. Any party aggrieved by
this Order or other final or interlocutory Order previously issued in this Case No. IPC-E-12-10
may appeal to the Supreme Court of Idaho pursuant to the Public Utilities Law and the Idaho
Appellate Rules. See Idaho Code § 61-627.
ORDER NO. 32571 5
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of June 2012.
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MARSHA H. SMITH, COMMISSIONER
ATTEST:
Jtn D. Jew
C'ommission Secretary
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ORDER NO. 32571 6