20110629Petition for Reconsideration.pdf

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RECEIVED
261 l JUN 29 PM J¿~P'F. McDevitt
. Dean J. (Joe) Miler
j""
!SS!OhJUTlt
June 29, 2011
Vìa Hand Delivery
Jean J ewell, 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
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 origial and seven (J copies of Rabow 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
Encl.
Dean J. Miler (ISB No. 1968)
Chas. F. McDevitt (ISB No. 835)
McDEVITT & MILER LLP
420 West Banock Street
P.O. Box 2564-83701
Boise, il 83702
Tel: [phone]
Fax: [phone]
joerqmcdevitt -miller.com
chasrqmcdevitt -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 DETERMATION
REGARING A FIR ENERGY
SALES AGREEMENT BETWEEN
IDAHO POWER AN RANBOW
RACH WIND, LLC
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPAN FOR DETERMATION
REGARING A FIRM ENERGY
SALES AGREEMENT BETWEEN
IDAHO POWER RABOW WEST
WID,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 Raibow West Wind LLC
(collectively referred to as "Rabow" or "Petitioner") and pursuat to IPUCRP 331 and
Idaho Code §61-626 respectfuly Petition for Reconsideration of Commssion Order No.
32256, service dated June 8, 201 1 ("the Order") as more fuly set fort below.
PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-1
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Raibow requests reconsideration of the Order because those pars of the Order
set fort below are uneasonable, unawf, erroneous, and not in conformance with the
law.
Because the essential facts pertg 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. 3213 1, (Case No. GNR-E-1O-4) the Commssion anounced its
intent that a subsequent decision on whether to reduce the eligibilty cap for PUR A
published avoided costs would be effective, retroactively, to December 14,2010.
Thereafer, on Februy 6, 2011, the Commission issued Order No. 32176,
reducing "...the eligibilty 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. 32176, Pgs. 11-
12).
On December 13,2010, the Raibow project entities executed Firm Energy Sales
Agreements (FESAs) and physically delivered them to Idaho Power Company. The
FESAs contaned published avoided cost rates established in Commssion 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,
Rainbow 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 Idaho Power's prompt response in executing the FESAs after their
submittal 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 pares
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, Raibow questions whether adoption of
the Bright Line Rule is with the Commssion's legal and policy authority generally.
Here, however, Ranbow 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 partes 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 ths Fir Energy Sales Agreement
representing the date upon which ths Fir Energy Sales Agreement was fuly
executed by both Paries". (See Copies of the FESAs, accoinpanying 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
Commssion may modify an otherwse vald contract, but the Company does not argue
that the FESAs were ineffective or not bindig between the pares. (See Idaho Power
Company's Reply Comments, Pg. 9).
B. A reasonable person could believe that FESAs effective December 14,
2010, qualified for published avoided cost rates.
The anounced intent in Order No. 32131, to make the decision effective
December 14, 2010, is, it must be adtted, vagly 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 142010".
It seems clear enough that FESA's executed afer December 14,2010, would be
subject to the lower eligibility cap, but the Order is silent regarding contracts effective on
December 14,2010.
Staf Comments interpret the Order to mean FESAs must be fuly 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 Stafs
"belief'. (See Staf 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.
3213 1 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 COMM;ISSION ORDER NO. 32256-4
executed on or before December 14,2010 are eligible. For the reasons set forth below,
the ambiguty should be resolved in favor of Rainbow.
C. Rainbow almost certainly would have been eligible for "grandfathering"
under traditional criteria.
The Commission's long history of grappling with claims eligibilty for higher
rates following a reduction in rates or change in methodology is well known and will not
be repeated here. Rabow does note, however, that the Commission has adopted
eligibility criteria in circumstaces where the eligibilty cap has changed; adoption of
eligibilty criteria has not been limited to circumstances 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 Commssion applied a "materially complete" test. There, the
Commssion found that contract negotiations were materially complete, even though the
pares had not exchanged a draf FESA on the effective date of a rate change.
The Comments of Raibow, filed herein on March 17, detail 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 of the Bright Line Rule to the Rainbow FESAs may
constitute and improper governmental interference with contractual
rights.
As noted above, in its Reply Comments, Idaho Power acknowledges, correctly,
tht FESAs are contracts shielded from governental interference by 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 withn the jursdiction of the
Commission:
"In determining the status of public utilty contracts, and the abilty of the
Public Utilities Commssion 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 alterig a
rate fixed by contract. In contrast, in the present case, application of the Bright Line Rule
to the Raibow FESAs does more th adjust a rate-it renders the contracts a nullity.
(See also, MorganStanleyv. Public Uti!. Dist. NO.1 of Snohomish City., 128 S.Ct. 2733
(2008) and NRG Power Marketing v. Maine Public Utilties Commission, 130 S.Ct. 694
(2009 for a discussion of permssible 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 general way, which is
ths: as a result of the Order, a hyper-techncality-whether the FESAs were signed on
December 13 or December 14, 2010--rases Rainbow's substative rights under valid
legal agreements and in so doing offends fudamenta 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 fort above, Raibow 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 with the meanng of the
Administrative Procedures Act, without observg the requiements of that
Act;
· The retroactivity featue of the Order is suspect;
. Adoption of the Bnght Line Rule is an unexplained depare from past
precedent.
In the event the Commission is unable to reach the result herein requested,
Ranbow will, of necessity, join in the asserton of those other, more general objections!.
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
approvig the FESAs.
i Rainbow identifies these objections so as to preserve its record. (See, Eagle Water Company v. Idaho
Public Utilties Commission, 130 Idao 314,940 P.2d 1133 (1997).
PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-7
DATED ths '2 Ci day of June, 2011
MCDEVITT & MILER, LLP
B~~\¿Q
Attorney for Ranbow Ranch Wind LLC
and Rainbow West Wind LLC
PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-8
CERTIFICATE OF SERVICE
I hereby certify that on the ~ay of June, 2011, I caused to be served, via the
method(s) indicated below, tre and correct copies of the foregoing document, upon:
Jean Jewell, Secretar
Idaho Public Utilties Commssion
472 West Washington Street
P.O. Box 83720
Boise,ID 83720-0074
j jewell rqpuc. statejd. us
Krstie Sasser
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise,ID 83720-0074
Krs. Sasserrqpuc. idaho. gov
Donovan E. Walker
Idaho Power Company
1221 W. Idaho Street
P.O. Box 70
Boise, ID 83707
dwalkerrqidahopower.com
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,BY:~ +6ul¿)
McDEVITT & MILLER LLP
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PETITION FOR RECONSIDERATION OF COMMISSION ORDER NO. 32256-9