20110629Petition for Reconsideration.pdf

r
~("0Ji:;m!4Y
ATTORNEYS AT LAW
Tel: [phone] Fax: [phone]
P.O. Box n18 Boise, ID 83707 - 515 N. 27th St. Boise. 1D 83702
June 29, 2011
Ms. Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
RE: IPC-E-IO-54
Dear Ms. Jewell:
r¡
iUt I JUN 29 AM 10: 58
We are enclosing for filing in the above-referenced docket an original and seven (7)
copies of the PETITION FOR RECONSIDERATION OF DELTA WIND LLC.
An additional copy is enclosed for you to stamp for our records.
Sincerely,
&~
Richardson & O'Lear PLLC
encL.
Peter J. Richardson (ISB # 3195)
Gregory M. Adams (ISB # 7454)
RICHARSON & O'LEARY, PLLC
515 N. 27th Street
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter(qrichardsonandoleary.com
greg(qrichardsonandolearv.com
ECEI t\
~._)
l01f JUN 29 AM 10: 58
tJTIL
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 WIN, LLC
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN IDAHO
POWER AND BRAVO 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 CHARLIE WID, 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 WIND LLC
)
)
)
) CASE NO. IPC-E-IO-53
)
)
) PETITION FOR RECONSIDERATION
) OF CHARIE WIND LLC
)
JOINT PETITION FOR RECONSIDERATION
IPC-E-lO-5l, IPC-E-1O-52, IPC-E-lO-53, IPC-E-lO-54, IPC-E-1O-55
PAGEl
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN IDAHO
POWER AND DELTA WIN, 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 v
)
)
) PETITION FOR RECONSIDERATION
) OF DELTA WID 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 Utilities Commission's Rules of Procedure ("IPUCRP"), hereby fie this Joint
Petition for Reconsideration of the Commission's Order No. 32254. For the reasons set forth
below, the Cotterel WindEnergy Center LLCs respectfully 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 Commssion.
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 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 Affdavit of Kevin
Simmons, which were timely filed with the Commission on March 18,2011 followed by an
Errata Filng on March 22, 2011. Commission Staff fied Comments on Mach 17, 2011 and
Idaho Power Company ("Applicant") fied Reply Comments on March 25,2011.
The Commission entered its Final Order in ths matter on June 8,2011 (Order No.
32254). i In that order, the Commission anounced a "bright line rule", to wit: "a Firm Energy
Sales Agreement/ower 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.
Pursuat to IPUCRP 331, Petitioners hereby timely fie ths Joint Petition for
Reconsideration.
II.
PETITION
A. Grounds for Reconsideration
This Joint Petition for Reconsideration is based upon the following grounds:
1. Pursuant to 18 CFR Section 292.304(d)(2)(ii), a quaifying facilty ("QF") is entitled
The relevant facts for each of these five projects are substantially 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-IO-53, IPC-E-IO-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 èonformity with controllng federal law;
2. The Commission's "bright line rue" in Order No. 32254 that a FE SA is not
enforceable until it is executed by both paries is not in conformity with controllng
Idaho case law regarding 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 ruemakng 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 wil fuly brief controlling federal statutes, implementing rules and related
case law regarding when a qualifying facilty is deemed to have incured a legally enforceable
obligation to provide energy pursuant to a FESA or other denominated power purchase
agreement. The Commssion'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 calculating avoided cost rates. Order No.
32254, at p. 9 (citing West Penn Power Co., 71 FERC ~ 61,153 (1995)).
Petitioners will fuly brief federal law establishing that, despite West Penn Power, Co., a
state commission is not free to ignore the requiements of the Public Utilty Regulatory 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-1O-51, IPC-E-IO-52, IPC-E-1O-53, IPC-E-IO-54, IPC-E-1O-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 utility to buy from the QF. The
Commssion's order violates 18 CFR Section 292.304(d)(2)(ii) because, by requiring the QF to
obta 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 utility.
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 fuly 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 fort the rue 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
eligibilty cap reduction, despite the lack of Idaho Power's signatue.
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, "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-1O-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 will fuly brief their position that the Commission's Order No. 32254 is
arbitrar and capricious for its failure to apply prior Commission precedent establishing
grandfather tests. The Commission's Order No. 32254 erroneously purorts to create a new
bright line test for changes in the "eligibilty 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 eligibility 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 afer Commission reduced the eligibilty cap
based on maturty of development ofproject).3 Petitioners will demonstrate with briefing and
evidentiar proceedings that they satisfied the requirements of the Commission's prior precedent
before the effective date of the eligibilty cap reduction, despite the lack of Idaho Power's
signature.
See also A. W Brown Co., Inc. v. Idaho Power Co., 121 Idao 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 contrct 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. 2723 i (1997) (fidig utilty delayed
negotiations and therefore QF was entitled to grandfathered rate).
JOINT PETITION FOR RECONSIDERATION
IPC-E-IO-51, IPC-E-lO-52, IPC-E-IO-53, IPC-E-1O-54, IPC-E-IO-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 fully brief the ruemaking requirements under the Idaho Administrative
Procedures Act ("lAP A") as those requirements apply to the Commssion and to the facts of ths
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 rule. 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 Commssion 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-1O-54, IPC-E-IO-55
PAGE 7
RESPECTFULLY SUBMITTED this 29th day of June, 2011.
RICHASON AND O'LEARY, PLLC
(lg&~
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-1O-54, IPC-E-IO-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 Utiities Commssion
POBox 83720
Boise, ID 83720-0074
Jean.jewell(quc.idao.gov
X Hand Delivery
~ U.S. Mail, postage pre-paid
Facsimile
-X Electronic Mail
Lisa D Nordstrom
Donovan E Walker
Idaho Power Company
POBox 70
Boise, Idaho 83707-0070
lnordstrom(qidahopower .com
dwalker(qidahopower.com
_ Hand Delivery
lL U.S. Mail, postage pre-paid
Facsimile
i Electronic Mail
Krstine Sasser
Idao Public Utilities Commssion
POBox83720
Boise, ID 83720-0074
krs.saser(quc.idao.gov
_ Hand Delivery
lL U.S. Mail, postage pre-paid
Facsimile
i Electronic Mail
tg)~Peter J. Richardson
..
JOINT PETITION FOR RECONSIDERATION
IPC-E-IO-51, IPC-E-IO-52, IPC-E-IO-53, IPC-E-1O-54, IPC-E-IO-55
PAGE 9