20110629Petition for Reconsideration.pdf

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ATTORNEYS AT LAW
Tel: [phone] Fax: [phone]
P.O. Box 7218 Boise, ID 83707 - 515 N. 27th St. Boise, ID 83702
iaii JUN 29 Ar4' I: 02
June 29,2011
Ms. Jean Jewell
Commission Secretar
Idaho Public Utilties Commission
472 W. Washington
Boise, ID 83702
RE: IPC-E-IO-62
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 GROUSE CREEK WIND
PARK II, LLC.
An additional copy is enclosed for you to stap for our records.
Sincerely,~~
Gregory M. Adams
Richardson & O'Lear PLLC
encL.
Peter J. Richardson (ISB No. 3195)
Gregory M. Adams (ISB No: 7454)
Richardson & O'Lear, PLLC
515 N. 27th Street
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter(frichardsonandolear .com
greg(frichardsonandoleary.com
Attorneys for Grouse Creek Wind Park, LLC
and Grouse Creek Wind Park II, LLC
RECf=/llr~..' ~.= f t( l,'~
2011 JUN 29
- Afflf:02
urn
BEFORE THE IDAHO
PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINATION
REGARING THE FIRM ENERGY
SALES AGREEMENT FOR THE SALE
AND PURCHASE OF ELECTIDC
ENERGY BETWEEN IDAHO POWER
COMPANY AND GROUSE CREEK
WIND PAR, LLC
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR A DETERMINATION
REGARING THE FIRM ENERGY
SALES AGREEMENT FOR THE SALE
AND PURCHASE OF ELECTIDC
ENERGY BETWEEN IDAHO POWER
COMPANY AN GROUSE CREEK
WIN PAR II, LLC
) CASE NO. IPC-E-IO-61
)
) PETITION FOR RECONSIDERATION
) OF GROUSE CREEK WIND PAR,
) LLC
)
)
)
) CASE NO. IPC-E-IO-62/'
)
) PETITION FOR RECONSIDERATION
) OF GROUSE CREEK WIND PARK II,
) LLC
)
)
)
COME NOW, Grouse Creek Wind Park, LLC and Grouse Creek Wind Park II, LLC,
each of which is managed by Wasatch Wind Intermountan (the "Grouse Creek LLCs" or the
"Petitioners"), and pursuat to Rile 331 of the Idaho Public Utilties Commssion's Riles of
Procedure ("IPUCRP"), hereby file this Joint Petition for Reconsideration of the Commission's
Order No. 32257. For the reasns set fort below, the Grouse Creek LLCs respectfully request
that the Idaho Public Utilties 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 two projects as submitted to the Commission.
I.
PROCEDURA AND FACTUAL BACKGROUND
The procedural background and relevant facts, up to the filing of the Petitioners'
Comments in the above-captioned matters, are contained in Petitioners' Comments, supported by
the Affidavit of Chrstine Mikell, timely fied with the Commssion on March 24,2011, and the
Petitioners' Motion to Set Time for Oral Arguent, promptly filed with the Commission in
response to Idaho Power Company's Reply Comments on April 7, 2011. Commission Staf
fied Comments on Mach 24,2011, and an Answer to Request for Oral Argument on April 21,
2011. Idaho Power Company filed Reply Comments on March 31, 2011, and an Objection to
Oral Arguent on April 21, 2011.
The Commission entered its Final Order in ths matter on June 8, 2011 (Order No.
32257).1 In that order, the Commission anounced a "bright line rie", to wit: "a Fir Energy
Sales AgreementIower Purchase Agreement must be executed, i.e., signed by both paries to the
The relevant facts for each of these two 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. 32257 in each of the above captioned
cases.
JOINT PETITION FOR RECONSIDERATION
IPC- E-1O-61, IPC- E-1O-62
PAGE 2
agreement, prior to the effective date of the change in eligibility criteria." Order No. 32257, at p.
10.
Pursuat 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. Pursuant to 18 CFR Section 292.304( d)(2)(ii), a qualifying facility ("QF") is entitled
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 conformity with controlling federal law;
2. The Commission's "bright line rule" in Order No. 32257 that a FESA 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 ruemaking 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 rules and related
case law regarding when a qualifying facilty is deemed to have incured a legally enforceable
JOINT PETITION FOR RECONSIDERATION
IPC- E-l 0-61, IPC- E-l 0-62
PAGE 3
obligation to provide energy pursuant to a FESA or other denominated power purchase
agreement. The Commission's Order No. 32257 asserts that the Federal Energy Reguatory
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.
32257, 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 requirements of the Public Utility Regulatory Policies
Act of 1978 or FERC's regulations providing QFs the right to choose to sell pursuant to a legally
enforceable obligation, and the right to choose to have rates calcu1ated at the time that obligation
is incured.2 The obligation to purchae a QF's output is created by the QF committing itself to
sell to an electric utilty, which also commts the electrc utility to buy from the QF. The
Commission's order violates 18 CFR Section 292.304(d)(2)(ii) because, by requiring the QF to
obtain a bilaterally executed contract 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 ofthe
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 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 ir 61,148, irir 25-26, 29 (2009); JD Wind 1, LLC, "Order Denying 'Requests for Rehearing,
Reconsideration, or Clarifcation, '" 130 FERC ir 61,127, irir 23-24 (2010).
JOINT PETITION FOR RECONSIDERATION
IPC-E-1O-61,IPC-E-1O-62
PAGE 4
2. The Commission's "bright line rule" in Order No. 32257 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 wil fully brief Idaho case law regarding the law of contract formation in
Idaho and the enforceabilty of contracts regardless of whether signed by either par. See, e.g.,
Evco Sound & Electronics, Inc. v. Seaboard Surety Company, 148 Idaho 357, 365, 223 P.3d 740,
748 (2009) (setting forth the rule that a contract is formed by a meeting of minds manifested 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 bilaterally executed contracts.
3. The Commission's Order is arbitrary and capricious because the Commission
failed to applygrandfather rights to the Petitioners' FESAs consistent with the Commission's
prior precedent.
Petitioners will fully brief their position that the Commssion's Order No. 32257 is
arbitrar and capricious for its failure to apply prior Commssion precedent establishing
grandfather tests. The Commission's Order No. 32257 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. 32257, 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
JOINT PETITION FOR RECONSIDERATION
IPC- E-1O-61, IPC- E-l 0-62
PAGE 5
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 matuty 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 bilaterally executed
contracts.
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 ruemakg requirements under the Idaho Administrative
Procedures Act ("lAP A") as those requirements apply to the Commission and to the facts of ths
proceeding. See, e.g., I.C. § 67-5201 et seq.; Asarco Inc. v. State, 138 Idao 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. 32257 stated that it did not implement a rate change.
Order No. 32257, at p. 10. Thus, the IAPA is applicable to the Commssion's non-rate making
act establishing a new rue. 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
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-1O-22, Order 32104, p. 12 (2010)
(approving of grandfathered rates despite ''te 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-l 0-61, IPC- E-l 0-62
PAGE 6
proceedings that the Commission's Order No. 32257 violated the 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. 32257 in the above-captioned matters. Pursuant to
Rule 331.03, Petitioners fuher request that the Commission reconsider its decision based on
wrtten briefig submitted by the paries, and evidentiar proceedings.
RESPECTFULLY SUBMITTED ths 29th day of June, 2011.
ll9&~LC
Peter J. Richards¿n
Attorney for Grouse Creek Wind Park, LLC
and Grouse Creek Wind Park II, LLC
JOINT PETITION FOR RECONSIDERATION
IPC- E-l 0-61, IPC- E-l 0-62
PAGE 7
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 29th day of June, 2011, a tre and correct copy of the withn
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, il 83720-0074
Jean. jewell(fuc.idaho.gov
X Hand Delivery
_ U.S. Mail, postage pre-paid
Facsimile
-. Electronic Mail
Lisa D Nordstrom
Donovan E Walker
Idaho Power Company
POBox 70
Boise, Idaho 83707-0070
Inordstrom(fidahopower .com
dwalker(fidahopower.com
_ Hand Delivery
.L U.S. Mail, postage pre-paid
Facsimile
-- Electronic Mail
Kristine Sasser
Idao Public Utilities Commssion
POBox83720
Boise, il 83720-0074
krs.sasser(fuc.idao.gov
_ Hand Delivery
.L U.S. Mail, postage pre-paid
Facsimile
-- Electronic Mail
(?Af~
Peter J. Richardson
JOINT PETITION FOR RECONSIDERATION
IPC- E-l 0-61, IPC- E-1O-62
PAGE 8