20110629Petition for Reconsideration.pdf

CE ri1.~r.QJlLE~YATTORNEYS AT LAW
Tel: [phone] Fax: [phone]
P.O. Box 7218 Boise, ID 83707 - 515 N. 27th St. Boise, ID 83702
zai ì JUN 29 AM 10= 56
June 29, 2011
Ms. Jean Jewell
Commission Secretar
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
RE: IPC-E-IO-52
Dear Ms. Jewell:
We are enclosing for filing in the above-referenced docket an original and seven (7)
copies of the PETITION FOR RECONSIDERATION OF BRAVO WIND LLC.
An additional copy is enclosed for you to stamp for our records.
Sincerely,~~Gregory M. Adams
Richardson & O'Lear PLLC
encL.
Peter J. Richardson (lSB # 3195)
Gregory M. Adams (ISB # 7454)
RICHARSON & O'LEARY, PLLC
515 N. 27th Street
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter(Ðrichardsonandolear.com
greg(Ðrichardsonandoleary.com
REGEl
lOll Juri 29 AM 10: 56
Attorneys for Alpha Wind LLC, Bravo Wind LLC,
Charlie Wind LLC, Delta Wind LLC, and Echo Wind LLC
BEFORE THE IDAHO
PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINATION
REGARING A FIRM ENERGY SALES
AGREEMENT BETWEEN IDAHO
POWER AND ALPHA WIND, LLC
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINATION
REGARING A FIRM ENERGY SALES
AGREEMENT BETWEEN IDAHO
POWER AND BRAVO WIN, LLC
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINATION
REGARING A FIRM ENERGY SALES
AGREEMENT BETWEEN IDAHO
POWER AND CHARLIE WIND, LLC
) CASE NO. IPC-E-IO-51
)
)
) PETITION FOR RECONSIDERATION
) OF ALPHA WIND LLC
)
)
)
) CASE NO. IPC-E-IO-52 ¡//
)
)
) PETITION FOR RECONSIDERATION
) OF BRAVO WID LLC
)
)
)
) CASE NO. IPC-E-IO-53
)
)
) PETITION FOR RECONSIDERATION
) OF CHAIE WIND LLC
)
JOINT PETITION FOR RECONSIDERATION
IPC-E-I0-51, IPC-E-IO-52, IPC-E-IO-53, IPC-E-IO-54, IPC-E-IO-55
PAGE 1
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN IDAHO
POWER AND DELTA WIND, LLC
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN IDAHO
POWER AND ECHO WID, LLC
)
)
) CASE NO. IPC-E-IO-54
)
)
) PETITION FOR RECONSIDERATION
) OF DELTA WIND LLC
)
)
)
) CASE NO. IPC-E-IO-55
)
)
) PETITION FOR RECONSIDERATION
) OF ECHO WIND LLC
)
)
)
COME NOW, Alpha Wind LLC, Bravo Wind LLC, Charlie Wind LLC, Delta Wind
LLC, and Echo Wind LLC, each of which is managed by Cotterel WindEnergy Center LLC
(collectively "Cotterel Wind Energy LLCs" or "Petitioners"), and pursuat to Rule 331 of the
Idaho Public Utilties Commission's Riles of Procedure ("IPUCRP"), hereby fie this Joint
Petition for Reconsideration of the Commission's Order No. 32254. For the reasons set fort
below, the Cotterel WindEnergy Center LLCs respectfuly request that the Idaho Public Utilities
Commission ("Commission") withdraw its previous Order and issue a new order approving the
Firm Energy Sales Agreements ("FESAs") entered into between Petitioners and Idaho Power for
each of the five projects as submitted to the Commission.
JOINT PETITION FOR RECONSIDERATION
IPC-E-IO-51, IPC-E-IO-52, IPC-E-IO-53, IPC-E-IO-54, IPC-E-IO-55
PAGE 2
I.
PROCEDURA AND FACTUAL BACKGROUND
The procedural background and relevant facts, up to the filing of Comments in the above-
captioned matters, are contained in Petitioners' Comments, supported by the Affidavit of Kevin
Simmons, which were timely fied with the Commission on March 18,2011 followed by an
Errata Filng on March 22, 2011. Commssion Staf filed Comments on Mach 17, 2011 and
Idaho Power Company ("Applicant") fied Reply Comments on March 25,2011.
The Commission entered its Final Order in this matter on June 8, 2011 (Order No.
32254).1 In that order, the Commission anounced a "bright line rule", to wit: "a Firm Energy
Sales AgreementIower Purchase Agreement must be executed, i.e., signed by both paries to the
agreement, prior to the effective date of the change in eligibilty criteria." Order No. 32254, at p.
10.
Pursuant to IPUCRP 331, Petitioners hereby timely fie this Joint Petition for
Reconsideration.
II.
PETITION
A. Grounds for Reconsideration
This Joint Petition for Reconsideration is based upon the following grounds:
1. Pursuat to 18 CFR Section 292.304(d)(2)(ii), a qualifying facility ("QF") is entitled
The relevant facts for each of these five projects are substatially similar. Pursuant to IPUCRP
247, the Commission has determined to consolidate the above proceedings for hearing. Petitioners have
therefore fied a Joint Petition for Reconsideration of Order No. 32254 in each of the above captioned
cases.
JOINT PETITION FOR RECONSIDERATION
IPC-E-IO-51, IPC-E-IO-52, IPC-E-1O-53, IPC-E-1O-54, IPC-E-IO-55
PAGE 3
to the rates that are in effect on the date the QF incured a legally enforceable
obligation to provide energy, and therefore, the Commission's order is arbitrar and
capricious and not in conformty with controlling federal law;
2. The Commssion's "bright line rie" in Order No. 32254 that a FESA is not
enforceable until it is executed by both paries is not in conformity with controllng
Idaho case law regardig contract formation;
3. The Commission's Order is arbitrar and capricious because the Commission failed
to apply grandfather rights to the Petitioners' FESAs consistent with the
Commission's prior precedent; and
4. The Commission's "bright line rule" is in violation of the rulemaking requirements of
the Idaho Administrative Procedures Act and is therefore void.
B. Nature and Quantity of Evidence or Argument Petitioners Wil Offer in Support of
Their Petition for Reconsideration
1. Pursuant to 18 CFR Section 292.304(d)(2)(ii), a QF is entitled to the rates that
are in effect on the date the QF incurred a legally enforceable obligation to provide energy, and,
therefore, the Commission's order is arbitrary and capricious and not in conformity with
controllng federal law.
Petitioners will fully brief controllng federal statutes, implementing ries and related
case law regarding when a qualifyng facility is deemed to have incured a legally enforceable
obligation to provide energy pursuat to a FESA or other denominated power purchase
agreement. The Commission's Order No. 32254 asserts that the Federal Energy Regulatory
Commission ("FERC") has generally left it to states to determine when and how a legally
enforceable obligation is created for puroses of calcu1ating avoided cost rates. Order No.
32254, at p. 9 (citing West Penn Power Co., 71 FERC i'61,153 (1995)).
Petitioners will fully brief federal law establishing that, despite West Penn Power, Co., a
state commission is not free to ignore the requirements of the Public Utility Reguatory Policies
Act of 1978 or FERC's regulations providing QFs the right to choose to sell pursuant to a legally
JOINT PETITION FOR RECONSIDERATION
IPC-E-IO-51, IPC-E-IO-52, IPC-E-1O-53, IPC-E-1O-54, IPC-E-IO-55
PAGE 4
enforceable obligation, and the right to choose to have rates calculated at the time that obligation
is incured.2 The obligation to purchase a QF's output is created by the QF committing itself to
sell to an electrc utilty, which also commits the electrc utilty to buy from the QF. The
Commssion's order violates 18 CFR Section 292.304(d)(2)(ii) because, by requiring the QF to
obtain the utilty's signature to incur a legally enforceable obligation, the Commission's order
vests all power to determine the date on which a QF obligates itself in the hands of the utilty.
Petitioners will demonstrate with briefing and evidentiar proceedings that they have
clearly entered into a legally enforceable obligation prior to the effective date of the eligibilty
cap reduction.
2. The Commission's "bright line rule" in Order No. 32254 that a FESA is not
enforceable until it is executed by both parties is erroneous because it is not in conformity with
controllng Idaho case law regarding contract formation.
Petitioners will fully brief Idaho case law regarding the law of contract formation in
Idaho and the enforceabilty of contracts regardless of whether signed by either pary. See, e.g.,
Evco Sound & Electronics, Inc. v. Seaboard Surety Company, 148 Idaho 357, 365, 223 P.3d 740,
748 (2009) (setting forth the rie that a contract is formed by a meeting of minds manfested by
offer and acceptace). Petitioners will demonstrate with briefing and evidentiar proceedings
that they satisfied the requirements of contract formation before the effective date of the
eligibility cap reduction, despite the lack of Idaho Power's signature.
2 See, e.g., 16 U.S.C. § 824a-3(a)(2); JD Wind 1, LLC, "Notice of Intent Not to Act and Declaratory Order, "
129 FERC' 61,148, m¡25-26, 29 (2009); JD Wind 1, LLC, "Order Denying 'Requests for Rehearing,
Reconsideration, or Clarifcation, '" 130 FERC' 61,127," 23-24 (2010).
JOINT PETITION FOR RECONSIDERATION
IPC-E-IO-51, IPC-E-IO-52, IPC-E-IO-53, IPC-E-IO-54, IPC-E-IO-55
PAGE 5
3. The Commission's Order is arbitrary and capricious because the Commission
failed to apply grandfather rights to the Petitioners' FESAs consistent with the Commission's
prior precedent.
Petitioners wil fuly brief their position that the Commission's Order No. 32254 is
arbitrar and capricious for its failure to apply prior Commssion precedent establishing
grandfather tests. The Commssion's Order No. 32254 erroneously purorts to create a new
bright line test for changes in the "eligibility cap," as opposed to tests used for changes in
"rates." See Order No. 32254, at p. 10.
As discussed in the Petitioners' Comments, the Petitioners have satisfied all of the
Commission's prior tests for establishing grandfathered rights to previously available avoided
cost rates, including a prior test used the other time rates became unavailable because the
Commission reduced the eligibilty cap for published rates. See In the Matter of Petition of
Cassia Wind to Determine Exemption Status, Case No. IPC-E-05-35, Order No. 29954, pp. 1-4
(2006) (finding wind QF entitled to published rates after Commission reduced the eligibilty cap
based on matuty of development ofproject).3 Petitioners wil demonstrate with briefing and
evidentiar proceedings that they satisfied the requirements of the Commission's prior precedent
before the effective date of the eligibility cap reduction, despite the lack of Idaho Power's
signature.
See also A. W Brown Co., Inc. v. Idaho Power Co., 121 Idaho 812, 816-18,828 P.2d 841,845-47 (1992)
(approving of Commission test that the QF may establish grandfather rights by filing a meritorious complaint at the
Commission alleging it is entitled to a contract prior to date rates become unavailable); In the Matter of the
Application of Idaho Power Company for Approval of a Firm Energy Sales Agreement with Yellowstone Power
Company for the Sale and Purchase of Electric Energy, Case No. IPC-E-I0-22, Order 32104, p. 12 (2010)
(approving of grandfathered rates despite "the apparent lack of any written documentation . . . evidencing that the
terms of a power purchase agreement were materially complete (before the rate change)"); Earth Power Resources,
Inc. v. Washington Water Power Company, Case No. WW-E-96-6, Order No. 27231 (1997) (finding utilty delayed
negotiations and therefore QF was entitled to grdfathered rate).
JOINT PETITION FOR RECONSIDERATION
IPC-E-IO-51, IPC-E-IO-52, IPC-E-IO-53, IPC-E-IO-54, IPC-E-1O-55
PAGE 6
4. The Commission's "bright line rule" is in violation of the rulemaking
requirements of the Idaho Administrative Procedures Act and is therefore void
Petitioners will fuly brief the rulemaking requirements under the Idaho Administrative
Procedures Act ("lAP A") as those requirements apply to the Commission and to the facts of this
proceeding. See, e.g., I.C. § 67-5201 et seq.; Asarco Inc. v. State, 138 Idaho 719, 69 P.3d 139
(2003); Tomorrow's Hope, Inc. v. Idaho Dep't of Health and Welfare, 124 Idaho 843, 864 P.2d
1130 (1993). The Commission's Order No. 32254 stated that it did not implement a rate change.
Order No. 32254, at p. 10. Thus, the IAPA is applicable to the Commission's non-rate makng
act establishig a new rie. See A. W Brown Co., Inc. v. Idaho Power Co., 121 Idaho 812, 818-
19,828 P.2d 841,847-48 (1992). Petitioners will demonstrate with briefing and evidentiar
proceedings that the Commission's Order No. 32254 violated Idaho Administrative Procedures
Act by creating a new rule without following the proper rule-making proceedings.
III.
PRAYER FOR RELIEF
For the foregoing reasons, Petitioners respectfully request the Commission to grant their
petition for reconsideration of its Order No. 32254 in the above-captioned matters. Pursuant to
Rule 331.03, Petitioners fuer request that the Commission reconsider its decision based on
wrtten briefing submitted by the paries, and evidentiar proceedings.
JOINT PETITION FOR RECONSIDERATION
IPC-E-IO-51, IPC-E-IO-52, IPC-E-IO-53, IPC-E-IO-54, IPC-E-IO-55
PAGE 7
RESPECTFULLY SUBMITTED this 29th day of June, 2011.
RICHASON AND O'LEARY, PLLC
fi~Q~. ~
Peter J. Richardson
Attorney for Alpha Wind LLC, Bravo Wind LLC,
Charlie Wind LLC, Delta Wind LLC, and
Echo Wind LLC
JOINT PETITION FOR RECONSIDERATION
IPC-E-IO-51, IPC-E-IO-52, IPC-E-IO-53, IPC-E-IO-54, IPC-E-1O-55
PAGE 8
CERTIFICATE OF SERVICE
i HEREBY CERTIFY that on the 29th day of June, 2011, a tre and correct copy of the within
and foregoing JOINT PETITION FOR RECONSIDERATION was served in the maner shown
to:
Ms. Jean Jewell
Commssion Secreta
Idao Public Utilities Commssion
POBox83720
Boise, il 83720-0074
Jean.jewell(Ðuc.idao.gov
X Hand Delivery
~ U.S. Mail, postage pre-paid
Facsimile
g Electronic Mail
Lisa D Nordstrom
Donovan E Walker
Idaho Power Company
POBox 70
Boise, Idaho 83707-0070
lnordstrom(Ðidahopower.com
dwalker(Ðidahopower.com
_ Hand Delivery
lL U.S. Mail, postage pre-paid
Facsimile
i Electronic Mail
Kristine Sasser
Idao Public Utilties Commssion
POBox 83720
Boise, il 83720-0074
krs.sasser(Ðuc.idao.gOV
_ Hand Delivery
lL U.S. Mail, postage pre-paid
Facsimile
i Electronic Mail
£lr~~~
JOINT PETITION FOR RECONSIDERATION
IPC-E-IO-51, IPC-E-IO-52, IPC-E-IO-53, IPC-E-IO-54, IPC-E-IO-55
PAGE 9