HomeMy WebLinkAbout20110629Petition for Reconsideration.pdfMcDevitt & Miller LLP
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RECEIVED
(208) 343-7500
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420 W. Bannock Street
P.O. Box 2564-83701
Boise, Idaho 83702
ion JUN 29 PM J¿~P'F. McDevitt
Dean J. (Joe) Miler
¡SSIUTIL
June 29, 2011
Via Hand Delivery
Jean Jewell, Secreta
Idaho Public Utities Commssion
472 W. Washigton St.
Boise, Idaho 83720
Re: In the Matter of the Application of Rainbow Ranch Wind LLC
Case No. IPC-E-l0-59 V'.
In the Matter of the Application of Rainbow West Wind LLC
Case No. IPC-E-l0-60
Dear Ms. Jewell:
Enclosed for fig, please fid an orial and seven (J) copies of Raibow Rach Wind, LLC and
Rabow West Wind, LLC's Petition for Reconsideration of Commssion Order No. 32256.
Kidly retu a fie staped copy to me.
Very Truy Yours,
McDevitt & Mier LLP~~Dean J. Mier
DJM/hh
End.
Dean J. Miler (lSB No. 1968)
Chas. F.McDevitt (ISB No. 835)
McDEVITT & MILLER LLP
420 West Banock Street
P.O. Box 2564-8370l
Boise, ID 83702
Tel: 208.343.7500
Fax: 208.336.6912
joeCfmcdevitt-miler.com
chasCfmcdevitt-miler.com
Attorneys for Rainbow Ranch Wind LLC
Attorneys for Rainbow West Wind LLC
ORIGINAL
RECEIVED
2011 JUN 29 PM I: 56
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPAN FOR DETERMINATION
REGARING A FIRM ENERGY
SALES AGREEMENT BETWEEN
IDAHO POWER AND RANBOW
RACH WIND, LLC
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR DETERMATION
REGARING A FIRM ENERGY
SALES AGREEMENT BETWEEN
IDAHO POWER RAINBOW WEST
WIND,LLC
Case No. IPC-E-IO-59
~/
PETITION FOR
RECONSIDERATION OF
COMMISSION ORDER NO. 32256
Case No. IPC-E-IO-60
PETITION FOR
RECONSIDERATION OF
COMMISSION ORDER NO. 32256
COME NOW Rainbow Rach Wind, LLC and Rainbow West Wind LLC
(collectively referred to as "Rainbow" or "Petitioner") and pursuat to IPUCRP 331 and
Idaho Code §61-626 respectfully Petition for Reconsideration of Commission Order No.
32256, service dated June 8, 2011("the Order") as more fuly set fort below.
PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-1
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Rabow requests reconsideration of the Order because those par of the Order
set fort below are uneasonable, unawf, erroneous, and not in conformance with the
law.
Because the essential facts pertining to ths matter are not in dispute, Petitioner
does not request reconsideration by re-hearg. Rather, Petitioner requests
reconsideration by wrtten briefs or comments. (See IPUCRP 331.02).
INTRODUCTION
In Order No. 3213l, (Case No. GNR-E-1O-4) the Commission anounced its
intent that a subsequent decision on whether to reduce the eligibilty cap for PURP A
published avoided costs would be effective, retroactively, to December 14, 2010.
Thereafer, on Febru 6, 2011, the Commssion issued Order No. 32176,
reducing "...the eligibility cap for published avoided cost rates from 10 aMW to 100 kW
for wind and solar QF's only, effective December 14,2010." (Order No. 32l76, Pgs. 11-
12).
On December 13,2010, the Ranbow project entities executed Fir Energy Sales
Agreements (FESAs) and physically delivered them to Idaho Power Company. The
FESAs contaned published avoided cost rates established in Commission Order No.
31025. But for the unavailabilty of a Company executive, the FESAs would have been
executed on December 13,2010. Rather, the FESAs were executed on December 14,
2010. (See Idaho Power Company Reply Comments, March 24,2011, Pg.7). Here,
Raibow does not mean to imply any impropriety or unair dealing by Idaho Power, and,
PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-2
in fact, appreciates Idao Power's prompt response in executing the FESAs after their
submittl by Rainbow.
Despite the fact that the FESAs became effective between the paries on the same
date as the effective date of the cap reduction, in Order No. 32256, the Commission
adopted a "Bright Line Rule", holding that agreements must be signed by both paries
prior to the effective date of the change in eligibilty criteria. Accordingly, the
Commission disapproved the agreements.
ARGUMENT
I.
Application of the "Bright Line Rule" to the Rainbow FESAs is Unreasonable and
Should Be Reconsidered
In subsequent sections of ths Petition, Rainbow questions whether adoption of
the Bright Line Rule is withi the Commssion's legal and policy authority generally.
Here, however, Rainbow argues that, putting aside for the moment the broader legal and
policy concerns, the Bright Line Rule should not be applied to the Rainbow projects.
A. The FESAs became legally binding between the parties on
December 14,2010.
By their express terms, the FESAs define the date upon which they become a
binding contract between the paries. Section 1.10 of the FESAs defines the effective
date as:
"The date stated in the opening paragraph of this Firm Energy Sales Agreement
representing the date upon which ths Fir Energy Sales Agreement was fuly
executed by both Paries". (See Copies of the FESAs, accompanying Application of
Idaho Power Company, December 16,2010).
PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-3
As noted above, the date stated in the openig paragraph of the FESAs is
December 14,2010.
In its Reply Comments, Idao Power acknowledges that the FESAs were binding
legal obligations as of December 14,2010. There, the Company argues that the
Commission may modify an otherwse valid contract, but the Company does not argue
that the FESAs wereineffective or not binding between the paries. (See Idaho Power
Company's Reply Comments, Pg. 9).
B. A reasonable person could believe that FESAs effective December 14,
2010, qualifed for published avoided cost rates.
The anounced intent in Order No. 32131, to make the decision effective
December 14,2010, is, it must be aditted, vaguely wrtten. The Order provides, "IT IS
FURTHER ORDERED tht the Commssion's decision regarding whether to reduce the
published avoided cost eligibilty cap become effective on December 14 2010".
It seems clear enough that FESA's execute afer December 14,2010, would be
subject to the lower eligibilty cap, but the Order is silent regarding contracts effective on
December 14,2010.
Staf Comments interpret the Order to mean FESAs must be fully executed before
December 14, 2010, to be eligible for the higher cap, but the Staf Comments offer no
real legal or policy analysis to support that conclusion, other than to say it is Staff s
"belief'. (See Staff Comments Dated March 17, 2011, Pg. 5).
However, an equally reasonable interpretation of Order No. 32131 is that FESAs
executed on or before December 14,2010, are eligible for the higher cap. Order No.
32131 is susceptible to two reasonable interpretations. It could mean FESAs executed on
or after December 14, 2010, are not eligible for the higher cap, or it could mean FESAs
PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-4
executed on or before December 14,2010 are eligible. For the reasons set fort below,
the ambiguity should be resolved in favor of Rainbow.
C. Rainbow almost certainly would have been eligible for "grandfatherig"
under traditional criteria.
The Commission's long history of grappling with claims eligibilty for higher
rates followig a reduction in rates or change in methodology is well known and will not
be repeated here. Raibow does note, however, that the Commission has adopted
eligibilty criteria in circumstaces where the eligibilty cap has changed; adoption of
eligibilty criteria has not been limited to circumstaces only where rates have changed.
(See Order No. 29389, Case No. IPC-E-05-22, Order No. 29954, Petition to Suspend
PURPA Obligation Case No. IPC-E-05-35; In the Matter of Cassia Wind; Order No.
30109, Case No. IPC-E-05-34, In the Matter of Magic Wind).
In the most recent case, In the Matter of Yellowstone Power, Order No. 32104,
Case No. IPC-E-1O-22, the Commission applied a "materially complete" test. There,the
Commssion found that contract negotiations were materially complete, even though the
pares had not exchanged a draft FESA on the effective date of a rate change.
The Comments of Rabow, fied herein on March 17, detal the efforts expended
by Ranbow to bring the projects to the contract execution stage. It is apparent from those
Comments that Rainbow would satisfy any interpretation of a "material completeness"
test.
D. Application 01 the Bright Line Rule to the Rainbow FESAs may
constitute and improper governmental intenerence with contractual
rights.
As noted above, in its Reply Comments, Idaho Power acknowleç:ges, correctly,
that FESAs are contracts shielded from governental intederenceby Ar. I Sec. 16 by
PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-5
the Idaho Constitution. "No bil of attder, ex post facto law, or law impaing the
obligation of contracts shall ever be passed."
The constitutional provision applies to contracts within the jurisdiction of the
Commission:
"In determining the status of public utilty contracts, and the abilty of the
Public Utilties Commission to alter the terms of such contracts, it is
importt to remember the special protected status given any contract by
the constitution." Agricultural Products v. Utah Power 98 Idaho 23, 29,
557 P.2d 617 (1976).
In Agricultural Products and subsequent cases, the question before the
Commission and Supreme Cour was the quatity of proof necessar to justify altering a
rate fixed by contract. In contrast, in the present case, application of the Bright Line Rule
to the Rainbow FESAs does more than adjust a rate-it renders the contracts a nullity.
(See also, Morgan Stanley v. Public Util. Dist. NO.1 of Snohomish City., 128 S.Ct. 2733
(2008) andNRG Power Marketingv. Maine Public Utilties Commission, 130 S.Ct. 694
(2009 for a discussion of permissible alteration of contracts by reguatory bodies).
E. Application of the Bright Line Rule to the Rainbow FESAs results in
manifest injustice.
The preceding arguents can be sumarzed in a more genera way, which is
this: as a result of the Order, a hyper-techncality-whether the FESAs were signed on
December 13 or December 14, 2010-erases Raibow's substative rights under valid
legal agreements and in so doing offends fudamental conceptions of justice.
PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-6
II.
The Bright Line Rule Suffers From Other, More General, Infirmities.
For the reasons set forth above, Rainbow hopes that, upon reconsideration, the
Commission will come to the conclusion that application of the Bright Line Rule to the
Rainbow projects is wrong. Rainbow, however, is aware that other paries in companon
cases intend to assert more general objections to the Bright Line Rule.
Those objections include:
. The Bright Line Rule is inconsistent with federal law;
. The Order is the adoption of a Rule within the meanng of the
Admnistrative Procedures Act, without observing the requiements of that
Act;
. The retroactivity featue of the Order is suspect;
. Adoption of the Bright Line Rule is an unexplained depare from past
precedent.
In the event the Commission is unable to reach the result herein requested,
Rainbow will, of necessity, join in the assertion of those other, more general objections i .
CONCLUSION
Based on the reasons and authorities cited herein, Petitioner respectfuly requests
that the Commission reconsider the Order, as applied to Raibow, and enter its order
approving the FESAs.
i Rainbow identifies these objections so as to preserve its record. (See, Eagle Water Company v. Idaho
Public Utilties Commission, 130 Idaho 314,940 P.2d 1133 (1997).
PETITION FOR RECONSIDERA nON OF COMMISSION ORDER NO. 32256-7
DATED ths .2 ~ day of June, 2011
MCDEVITT & MILLER, LLP
Bt~lJ~
Dean. iller
Attorney for Rainbow Ranch Wind LLC
and Ranbow West Wind LLC
PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-8
CERTIFICATE OF SERVICE
I hereby certify that on the ~y of June, 2011, I caused to be served, via the
methodes) indicated below, true and correct copies of the foregoing document, upon:
Jean Jewell, Secretar
Idaho Public Utilties Commission
472 West Washington Street
P.o. Box 83720
Boise,ID 83720-0074
jj ewell(fpuc.state.id. us
Krstine Sasser
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise,ID 83720-0074
Krs. Sasser(fpuc.idaho. gov
Donovan E. Walker
Idaho Power Company
1221 W. Idaho Street
P.O. Box 70
Boise, ID 83707
dwalker(fidahopower.com
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McDEVITT & MILLER LLP
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PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-9