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HomeMy WebLinkAbout20120227Reply Legal Brief.pdfRECEIVED .Jr~~r &:(llJ~"1 2Ui? FEB 27 PH~: 25ATTORNEYS AT I.AW Tel: 208-938-7900 Fax: ?O8-938-7904 1'.0. Box 7218 Boi,e, ID 83707 - 515 N. 27th St. Boise, ID 83702 27 Febru 2012 Ms. Jean Jewell Commssion Secreta Idaho Public Utilties Commission 472 W. Washington Boise, ID 83702 RE: SUPREME COURT DOCKET NO. 39151-2011 IPUC CASE NOS. IPC-E-I0-61 IPC-E-I0-62 Dear Ms. Jewell: Enclosed please find the REPLY LEGAL BRIEF for filing on behalf of the Grouse Creek Wind Park, LLC (10-61) and Grouse Creek Wind Park II, LLC (10-62) in the above-referenced docket. We have enclosed an original and eight (8) copies, as well as an additional copy for you to stap for our records. Please contact me with any questions. Sincerely,~~\ Nina M. Curs, Adminstative Assistat Richardson & O'Lear PLLC encL. Peter J. Richardson (ISB No. 3195) Gregory M. Adams (lSB No: 7454) Richardson & O'Lear, PLLC 515 N. 27th Street Boise, Idaho 83702 Telephone: (208) 938-7901 Fax: (208) 938-7904 peter~richardsonandolear.com greg~richardsonandolear.com Attorneys for Grouse Creek Wind Park, LLC and Grouse Creek Wind Park II, LLC 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 ELECTRIC ENERGY BETWEEN IDAHO POWER COMPANY AN GROUSE CREEK WID PARK, LLC (10-61) AND GROUSE CREEK WI PAR II, LLC (10-62) GROUSE CREEK WID PAR, LLC AND GROUSE CREEK WID PARK II, LLC, Petitioners/Appellants, v. IDAHO PUBLIC UTILITIES COMMISSION, Respondent, Respondent on Appeal, and IDAHO POWER COMPANY, Respondent- Intervenor/Respondent on Appeal ) SUPREME COURT DOCKET NO. ) 39151-2011 ) ) ) IPUC CASE NOS. IPC-E-I0-61) IPC-E-I0-62 ) ) ) REPLY LEGAL BRIEF OF GROUSE ) CREEK WID PAR, LLC AND ) GROUSE CREEK WID PAR II, ) LLC ) ) ) ) ) ) ) ) ) ) ) ) INTRODUCTION COMES 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 QF", the "Grouse Creek II QF," or collectively the "Grouse Creek QFs"), and pursuant to the Idaho Public Utilities Commssion's ("IPUC's" or "Commssion's") Notice of Scheduling and Notice of Oral Arguent (Order No. 32191), hereby files ths Legal Brief in the above-captioned matters.l Pursuant to the IPUC's implementation of the Public Utility Regulatory Policies Act of 1978, the Grouse Creek QFs attempted to secure executed firm energy sales agreements ("FESAs") with Idaho Power for several months prior to December 14, 2010. Each QF even filed a Complait against Idaho Power for its refusal to process the requests timely and in good faith. All material terms to which the Grouse Creek QFs obligated themselves were very well settled prior to December 14, 2010, despite the QFs' inabilty to obtain fuly executed documents with Idaho Power until December 28,2010. The Grouse Creek QFs therefore formed a legally enforceable obligation (or "LEO") prior to December 14, 2010, entitling them to the avoided cost rates contained in the FESAs submitted by Idaho Power on December 29,2010 in these cases. This conclusion results from any reasonable application of the IPUC's past precedent regardig formation of a LEO, and the Federal Energy Regulatory Commission's ("FERC's") recent declaratory order in a related matter. See Cedar Creek Wind LLC, 137 FERC ~ 61,006 (2011). The Grouse Creek QFs therefore respectflly request that the Commission exercise its authority Pursuat to IPUC Rule of Procedure 247, the Commission has determed to consolidate the above proceedigs. The Grouse Creek QFs have therefore filed a single Legal Brief. REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-1O-62 PAGE 2 under I.C. § 61-624 to modify its prior orders, and approve the FESAs for both projects. ISSUE PRESENTED Pursuat to the Commssion's Notice of Scheduling and Oral Arguent, the issue presented is "whether/when a 'legally enforceable obligation' arose" for the Grouse Creek QFs' FESAs? SHORT ANSWER FERC's regulations provide that a qualifying facilty ("QF") may enter into a long term contract or other legally enforceable obligation contang avoided cost rates for the term of obligation calculated on the date that the QF obligates itself. 18 C.F.R. 292.304(d)(2)(ii). The Grouse Creek QFs established a LEO prior to December 14,2010, under any reasonable application of the IPUC's precedent regarding formation ofa LEO, and FERC's recent declaratory order. See Cedar Creek Wind LLC, 137 FERC ~ 61,006 (2011). Pursuant to the IPUC's LEO precedent, a LEO arose no later than November 8, 2011. On that date, the Grouse Creek QFs' filed meritorious Complaits alleging that they obligated themselves to Idaho Power QF FESAs with stadard terms and published rates approved by the Commission, but Idaho Power had negotiated in bad faith and failed to execute FESAs. At that tie, the essential and material terms and conditions of the legally enforceable obligation were known, and the Grouse Creek QFs agreed to Commission resolution of the only unesolved term - the amount of delay default securty. Alternatively, the Grouse Creek QFs established a LEO, at the very latest on December 9, 2011. By that date, afer the filing of the Complaints, every word in the fmal, wrtten contracts was known and not subject to any dispute to be resolved by the Commission, or subject to any reasonable misunderstading regarding the contract terms or the projects' characteristics. REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-1O-62 PAGE 3 PROCEDURA BACKGROUN Idaho Power filed the executed FESAs for Commission determination on December 29, 2010. The Grouse Creek QFs filed extensive Comments, supported by the Affdavit and Exhibits of Chrstine Mikell, on March 24,2011. The Grouse Creek QFs' Comments requested approval of the agreements as wrtten, relying on 18 C.F.R. § 292.304(d)(2)(ii) and the Commssion's QF grandfathering precedent. Commssion Sta fied Comments on March 24, 2011, recommending disapproval of the FESAs on the ground they were not fuly executed prior to December 14,2010. Idao Power filed Reply Comments on March 31, 2011, which set fort several reasons Idaho Power believed the Commission could reject the FESAs. The Grouse Creek QFs fied a Motion to Set Time for Oral Arguent on April 7, 2011, in response to unsupported factu characterizations contaned in Idaho Power's Reply Comments. Commission Sta and Idaho Power separately filed an Answer and an Objection, respectively, each opposing Oral Arguent on April 21, 2011. The Commission issued an order on April 27, 2011 (Order No. 32236), determining not to hold Oral Arguent. The Commission entered its Final Order in ths matter on June 8, 2011 (Order No. 32257). In that order, the Commssion anounced a "bright line rue" that "a Fir 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. 32257 at 10. Notably, the Commission issued several orders in the same time frame, rejectig several other QF contracts on the same basis, including five contracts entered into between the Cedar Creek QFs and Rocky Mountain Power. See, generally, Re Determination Regarding Cedar Creek REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-1O-62 PAGE 4 LLCs Power Purchase Agreements, IPUC Case Nos. PAC-E-II-0l to -05. The Grouse Creek QFs fied a Joint Petition for Reconsideration on June 29, 2011, relying again primarily on 18 C.F.R. § 292.304(d)(2)(ii) and the Commission's grandfathering precedent. The Commission issued a Final Order on Reconsideration on July 27,2011 (Order No. 32299), again concluding that FESAs were ineffective prior to December 14,2010 because they were not fuly executed prior to that date. On September 7,2011, the Grouse Creek QFs fied a Notice of Appeal to the Idaho Supreme Cour, raising the same issues as in their Petition for Reconsideration. Concurent with these proceedigs, the Cedar Creek Wind QFs filed a Petition for Enforcement at FERC, pursuat to 16 U.S.C. § 824a-3(h), challenging the Commission's use of the "bright line rule," requiring fuly executed contracts for QFs to form a legally enforceable obligation. See FERC Docket No. ELll-59-000. On October 4,2011, FERC issued a declaratory order declining to itself intiate enforcement against the IPUC, but determined tht the IPUC's order and the "bright line rue" were inconsistent with PURPA and FERC's implementing reguations. Cedar Creek Wind LLC, 137 FERC ~ 61,006. FERC concluded that the IPUC did not recognze that "a legally enforceable obligation may be incured before the formal memorialization of a contract to a writing." fd. at ~ 36. On November 4,2011, the Grouse Creek QFs, the Commission, and Idaho Power fied a Stipulated Motion to Suspend Appeal and Remand to the Administrative Agency. That Motion stated: "Given FERC's recent Order, the Pares believe that it is appropriate for the appeal in ths case to be suspended: (1) to allow the PUC to reconsider its Order in ths case in light of the REPL Y LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-I0-62 PAGE 5 FERC Order; and (2) to provide Pares with an opportty to discuss the possibilty of setting the appeal." The Supreme Cour remanded the matter to the Commission. The Commission entered its Notice of Scheduling and Notice of Oral Arguent (Order No. 32191), settng a briefing schedule in the event that settement could not be reached. The pares were unable to reach settement, and the matter is now before the Commission for resolution. MATERIAL FACTUAL BACKGROUND A. General Background on the Projects and Development Wasatch Wind began wind monitoring in December 2007, and, on Febru 4, 2008, finalized wid project leases for the private land encompassing the rights necessar for the wind project sites at issue in these contract approval dockets. Affdavit of Christine Mikell, at ~~ 4,6, 11.2 Although it had initially considered developing a larger project which would include federal lands, in sumer of 2010, Wasatch Wind scaled the initial project down to the two smaller 10 average monthy MW ("aMW") QFs on privately owned land separated by at least one mile. fd. at~~ 43-44. B. Interconnection and Transmission Rights Wasatch Wind began interconnection studies and processes in May 2008, and signed an Interconnection Agreement with Raf River Rural Electrc Cooperative on March 31, 2010, for interconnection to a 138 kilovolt line leased to BPA by Raft River Rural Electrc Cooperative. fd. at ~~ 16-20. Although the initial Interconnection Agreement called for interconnection of the 2 The Affdavit of Christine Mikell and its Exhibits, filed March 24,2011 in these dockets, provide a detaled narative of the Grouse Creek QFs development and contracting efforts, and are incorporated herein by reference to the extent that those facts ar not reiterated. REPL Y LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-1O-62 PAGE 6 initially planed, single project, Raf River Rural Electrc Cooperative and BPA have subsequently agreed to amend the Interconnection Agreement to accommodate the two smaller projects each sized 21 MW. Id. at ~~ 22-23. With regard to point to point ("PTP") transmission, BP A stated durng the interconnection studies in 2009 that the amount of capacity Wasatch Wind could interconnect (93 MW) was the. same as the amount they could deliver to Idaho Power's Minidoka substation because the applicable transmission line is stranded and not connected to any other par of BP A's system. See id. at Exhibit D, pp. 1-2. Entering into a PTP service agreement requies submission of a substantial non-refudable deposit and requires obligatig the Grouse Creek QFs to ongoing fees for transmission for the entie 20-year term. Id. at ~ 33. Thus, the Grouse Creek QFs initiated ths process afer the interconnection process to limit irretrevable fiancial expenditues prior to knowing the QFs would obtain FESAs. On June 30, 2010, the Projects submitted the necessar applications for BPA's 2010 Network Open Season ("NOS") to achieve the initially projected online date of June 2012, for a 30 MW and a 21 MW project. Id. at ~ 27. Due to confsion in the contracting process with Idaho Power at that time, Wasatch Wind backed out of the BPA NOS, which would have required a Performance Assurance $794,376 by August 18, 2010. Id. at ~ 28. As a result, Wasatch Wind was unable to achieve the initially projected online date of June 2012. On August 19, 2010, Wasatch Wind made a traditional transmission service request ("TSR") on BPA's OASIS website with a delayed sta date of June 1,2013. Id. at ~ 29. All of the other parameters of the projects remaied the same. Id. As expected all along, ths process REPL Y LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-I0-62 PAGE 7 proceeded well in advance of the projected online date, and BP A provided two Fir PTP agreements in March 2011 for the 21 MW Grouse Creek QF and the 21 MW Grouse Creek II QF. Id. at ~ 31. The Grouse Creek QFs are still awaiting fial approval of their FESAs by the IPUC prior to executing the BP A transmission agreement. c. Firm Energy Sales Agreement Negotiations with Idaho Power Wasatch Wind has been engaged in formal power sales contract discussions with Idaho Power since at least Febru 26,2010, when it emailed Randy Allphin, ofIdao Power. Id.at ~ 34 and Exhibit A. Wasatch Wind described the project, progress though the interconnection process with BPA, and that it appeared from Idaho Power's OASIS website that adequate transmission was available on Idaho Power's system from the Mindoka substation to its Treasure Valley load center. Id. Mr. Allphin stated on March 2,2010, that prior to execution of a power sales contract, Wasatch Wind must complete execution of an interconnection agreement and reserve firm transmission on both the BP A and the Idao Power transmission systems to get the energy from the project to Idaho Power customer loads. Id. As described above, Wasatch Wind had long since commenced the processes necessar to interconnect and deliver the output to Idaho Power's system. But under the FERC's approved Open Access Transmission Tarff ("OATT"), the TSR on Idàho Power's system to its own load center would be a request by Idaho Power's merchat ar to Idaho Power's transmission ar to designate generating facilties as network resources. See id. at Exhbit C, pp. 4-5 (describing the process). As such, Wasatch Wind had no power to lodge ths request internally with Idaho Power, and once lodged Wasatch Wind would have no direct access to the Idaho Power's REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-I0-62 PAGE 8 transmission personneL. Unlike its interconnection and PTP transmission requests with BP A for which Wasatch Wind had direct access to the BPA transmission personnel, Idaho Power's PURP A contracts admnistrators would handle the TSR on Idaho Power's system. Wasatch Wind requested that Idaho Power provide it with a PURPA contract for a project up to 65 MW in April 2010. fd. at ~~ 35-36 and Exhbit B. On June 17,2010, Wasatch Wind signed a letter or understandig provided by Idaho Power, which stated Idaho Power would not execute a power sales contract prior to when the Project received confrmation that the results of the intial Idaho Power transmission capacity application for transmission to its load center are known and the Project accepts the results. fd. at ~ 37 and Exhbit C, p. 3. The only other requirements to obtain a power purchase agreement involved interconnection, and Wasatch Wind had already met those interconnection requirements. fd. Wasatch Wind was under the impression that Mr. Allphin was working with his team to make the necessar TSR on Idao Power's system. fd. at ~ 39. On June 25, 2010, Wasatch Wind again responded to Mr. Allphin that based on studies and conversations with BP A, there were 93 MW available on the necessar BP A line to the Minidoka substation, and therefore interconnection and transmission of 65 MW to Idaho Power would not be a problem. fd. at ~~ 40,42. In the June 25, 2010 email, Wasatch Wind also indicated that due to federal permittng issues, Wasatch Wind intended to reduce its overall footprint and wished to discuss power sales contracts for two single 10 aMW projects, instead of the larger 65 MW project it had initially discussed. fd. at ~ 43. On July 14, 2010, Wasatch Wind submitted a formal request for two 10 REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-I0-62 PAGE 9 aMW PURPA contracts to Mr. Allphin. fd. at ~~ 44-45 and Exhbit D. Wasatch Wind explained the matuty of the Projects in detal, including the Interconnection Agreement which already had progressed to the Facilties Study stage for constrction, two years of wind data supportng output projections, final land leases, and explained in detal that BPA had stated transmission would be available to Idaho Power's Minidoka substation. fd. at Exhbit D. Wasatch Wind informed Mr. Allphin that on June 30, 2010, Wasatch Wind submitted into BPA's NOS and that by August 18, 2010, BPA would require Wasatch Wind to post the security of approximately $800,000 for ths NOS transmission process. fd. at Exhbit D, p. 2. Ths July 14, 2010 letter also requested tht Idao Power investigate availabilty of transmission on its system to its load center and provided completed Transmission Capacity Application Questionnaires for each project. fd. at Exhbit D, pp. 2-13. But the letter also explained, "Per your suggestion, (Wasatch Wind) went ahead and confed on OASIS to the best of our abilty that there is capacity form Minidoka Substtion to Treasure Valley for Idaho Power to obtan Network Service on behalf of our Quaifyng Facilties." fd. at Exhbit D, p. 2. Randy Allphin stated on July 21, 2010 in an e-mail, "I have not been able to submit the TSR. Been gettng buy in from varous people, looks like I will probably be filing the TSR sometime next week." fd. at ~ 46 and Exhbit E, p. 1; see also id. at Exhbit E, p. 2 (M. Allphi's June 29, 2010 email stating his routine process was to ''not develop a draf agreement for a parcular project until the interconnection and transmission is pinned down"). Afer some more unsuccessfu communcations, Wasatch Wind became frstated with the lack of progress, and decided to retai attorneys to assist in the negotiations. fd. at ~~ 47-48. REPL Y LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-1O-62 PAGE 10 Wasatch Wind sent Idaho Power an email on August 17, 2010, in which it clarfied that it was formally requesting two power sales contracts for PURP A projects, and explained that each of the Projects would be physically limited such that each would generate no more th 10 average megawatts in a single month. fd. at ~~ 49-50 and Exhbit F. The email also included, yet again, the two completed Transmission Capacity Application Questionnaires for the two separate projects. fd. at Exhibit F, pp. 5-16. Ths August 17th email also stated that Wasatch Wind did "not believe the study process should delay the submission of execution ready power purchase agreements. With the substatial delay securty being required in recent Idaho Power PPAs, the risk of our project's failing to come on line due to transmission constraits is completely mitigated." fd. at Exhbit F, p. 1; see also id. at Exhbit A, P 1 (M. Allphin's March 2010 email describing the delay securty clause). From emails and a telephone conversation in late August, Wasatch Wind understood there to be a question as to whether Idaho Power would agree to submit a request to its transmission personnel for both Grouse Creek QFs at the same time. fd. at ~ 51. On October 1, 2010, counsel for Wasatch Wind sent a letter to Idaho Power for each Grouse Creek QF, expressing Wasatch Wind's intent to obligate the QFs to two power sales agreements for the two QF projects. fd. at ~ 52-57 and Exhbit G. These letters listed several stadard terms applicable though Commission orders, including the daly and seasonaity load shape price adjustents (Order No. 30415), as well as the wid integrtion charge, mechancal availabilty guantee, and wid forecasng and cost sharg provisions (Order No. 30488). fd. at Exhbit G. The October 18t letters objected to any fuer delay in submittng both TSRs on REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-1O-62 PAGE 11 Idaho Power's system. fd. The October 1st letters expressed Wasatch Wind's concer also with the legality of the high $45/k delay liquidated damages securty provision Idao Power had begu requig, and stted the QFs would agree "to any amount deemed reasonable by the Commission if Idaho Power insists on a provision requiring Wasatch to post a delay default liquidated damages securty." fd. at Exhbit G, pp. 3, 11. The October 1st letters provided very detailed project information for each of the Grouse Creek QFs, and stated that both projects would now be sized at 21 MW of maximum capacity and again stated they would generate under 10 aMW. fd. at Exhbit G. Idaho Power did not respond by October 27, 2010, and counsel for Wasatch Wind sent a follow up letter to Idaho Power on that same date, remiding Idaho Power that it had stil not even provided draf contracts. fd. at ~ 58 and Exhibit H. On November 1, 2010, Idaho Power responded with a letter from Mr. Allphin, statig that he had not yet submitted the TSRs to Idao Power's transmission personneL. fd. at ~~ 59-60 and Exhibit I. Mr. Allphin stated Idaho Power would file TSRs for Grouse Creek Wind Park I for nameplate ratig of21 MWand Grouse Creek Wind Park II for nameplate ratig of21 MW. fd. at ~ 61 and Exhibit 1.3 fd. Mr. Allphin's November 1 st letter also expressed Idaho Power's position that the Projects must agree to a $45/k delay securty amount, and for the first tie provided a draf stadard FESA for the Projects. fd. Ths FESA contaed the $45/k delay securty clause. fd. It also required in Section 5.7, that prior to execution of the FESA, with regard to the TSR for Idaho Power's system, "Results of the initial transmission capacity request Although Mr. Allphin's November 1, 2010 leter seemed to imply that he had witheld the TSRs on account of changes in the project sizes, the same changes did not compromise Wasatch Wind's abilty to proceed though the interconnection and PTP trsmission processes with Raft River Rur Electc Cooperative and BP A. See id at W 22, 23, 30. REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-1O-62 PAGE 12 are known and acceptable to the Seller," and that "Seller must provide evidence that the Seller has acquied fi transmission capacity from all requied transmittg entities to deliver the Facilty's energy to an acceptable point of delivery on the Idaho Power electrcal system." fd. at Exhbit I, pp. 16-17. The QFs had not met these transmission requirements. In the case of the TSR on Idaho Power's system, Mr. Allphin had not yet even intiated that process despite repeated requests to do so since at least June 2010. In the case of BPA, compliance with Idaho Power's requirement would have required the QFs to obligate themselves to long-term PTP wheeling agreements prior to any assurance they could secure executed power sales contracts with the published rates. Then, on November 5, 2010, Idaho Power, along with Avista Utilities and Rocky Mountan Power, filed the Joint Motion to Reduce the Published Rate Eligibilty Cap. See Case No. GNR-E-I0-04. The Grouse Creek Wind Park, LLC and the Grouse Creek Wind Park II, LLC each fied complaints against Idaho Power on November 8, 2010.4 The Complaits alleged the QFs had "expressed a willngness to agree to a delay securty damages clause reasonably calculated by the Commission to approximate Idaho Power's damages in the event of a delay default, and (that each QFJ remain(edJ commtted to such a provision deemed reasonable by the Commission." Complaints, Case Nos. IPC-E-1O-29 and -30, at ~ 9. Furer, the QFs alleged that with the "commitment to such a provision, Idaho Power's insistence on completion of the 4 Because the Complaints were fied in separate dockets (IPC-E-I0-29 and -30) from the instant contract approval dockets (IPC-E-I0-61 and -62), the Complaits were not previously a par of the record in these contract approval dockets. Therefore, the Grouse Creek QFs are includig the Complaints as attachments to the Affdavit of Gregory M. Adas, fied contemporaeously with this brief for the convenence of the Commssion. Ths brief will cite to the Complaits themselves. REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-1O-62 PAGE 13 protracted interconnection and transmission processes prior to executig a PPA is uneasonable." fd. Afer the Commission did not grant the imediate reduction in the published rate eligibilty cap, on November 19, 2010, Idaho Power and the QFs agreed to stay the complaint proceeding and execute stadard QF wind contracts contang the published rates. fd. at ~ 70. Idaho Power sent a letter dated November 24,2010, acknowledging Wasatch Wind's agreement to accept the $45/k securty clause, and highighting some provisions of the November 1 st FESA, including those regarding curlment for system reliabilty puroses. fd. at ~ 71 and Exhbit J. Idaho Power's November 24th letter requested that the QFs fill in project-specific information in the November 1 st FE SA and "retu the draf to Idao Power so that the Company can then initiate the Sarbanes-Oxley contract approval process and generate an executable draf for signatues." fd. On December 2, 2010, Wasatch Wind sent a letter and versions of the Idaho Power's November 1 st contract for each project, contaning all project specifics. fd. at ~ 72 and Exhbit K.5 Wasatch Wind's December 2nd letter confrmed the pares' agreement tht the FESAs would not contan the onerous transmission requirements in Section 5.7, but would contan the $45/k delay securty clauses. fd. at Exhbit K, p. 1. The letter also confed the QFs understood the provisions of the November 1st FE SA highighted in Idaho Power's November 24th letter. fd. No dispute remained regarding the terms and provisions of the FESAs. Idaho Power confirmed receipt on December 7, 2010. fd. at ~ 74. On December 9,2010, 5 The Affdavit of Christine Mikell contas a tyo refering to Idaho Power's draft FESA provided November 1 st as "Idaho Power's November 30th contract." See id at, 72. REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-1O-62 PAGE 14 counsel for Wasatch Wind requested though email to Idaho Power tht the FESAs conta online dates of a First Energy Date of June 2013 and a Commercial Online Date of December 2013, rather than the dates filled in by the QFs in contracts provided on December 2nd, which were First Energy in December 2012 and Commercial Online Date June 2013. fd. at ~ 75. This change was consistent with the delay necessar in the wheeling arangements over BP A's system caused when Wasatch Wind decided not to submit the $794,396 for the 2010 NOS, and instead proceeded though the traditional TSR on BPA's OASIS in August 2010. See id. at ~~ 27-29. Idaho Power next contacted the QFs on December 14, 2010, but it only responded to ask for clarification for the carographic sections with which the QFs were located and for the identity of the transmittng entity, which items had inadvertently been omitted from blan spaces in the contracts Wasatch Wind provided on December 2,2010. fd. at ~ 76. However, the Grouse Creek QFs previously provided the precise carographic sections in the October 1 st letters. See id. at Exhbit G, pp. 5, 13. And Wasatch Wind had stated tht BPA would be the transmittng entity on multiple occasions. See id. at Exhbit A, p. 2 (Febru 26,2010), Exhibit C, p. 9 (June 17, 2010); Exhibit D, pp. 1-2, 5, 7, 11, 13 (July 14,2010); Exhbit F, p. 1, 7, 9, 13, 15 (August 17,2010); Exhbit G, pp. 1,6,9, 15 (October 1,2010); Complaints, Case Nos. IPC-E-1O-29 and -30, at ~ 7 (November 8, 2010). On December 15, 2010, Idaho Power stated that the online dates provided December 9th would be included in the contracts, and later that day counsel for the QFs provided the same information regarding the transmitting entity and the same carographic sections previously provided. Affdavit of Christine Mikell, at ~ 77. On December 16,.2010, Idaho Power provided REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-I0-62 PAGE 15 the executable FESAs, which counsel for Wasatch Wind sent by overnght delivery to Wasatch Wind, which is not located in Boise. Id. at ~ 78. These versions of the FESAs were consistent with the pares' agreement, well in advance of December 14,2010, to remove the requirements in section 5.7 for completion of transmission processes. Id. On December 20,2010, the Grouse Creek QF and the Grouse Creek II QF executed the FESAs, and sent them by overnght delivery to Idaho Power. Id. at ~ 79. Idaho Power executed the FESAs on December 28,2010. LEGAL BACKGROUND A. The Public Utilty Regulatory Policies Act of 1978's Mandatory Purchase Provisions Ths case involves the Commission's implementation of the mandatory purchase obligation of PURP A, which requies electrc utilties to purchase power produced by cogenerators or small power producers that obtan status as a QF. 16 U.S.C. § 824a-3(a)(2). Congress's intent "was to encourage the promotion and development of renewable energy technologies as alternatives to fossil fuels and the constrction of new generatig facilties by electrc utilties." Rosebud Enterprises, Inc. v. Idaho Pub. Util. Commn., 128 Idao 609, 613, 917 P.2d 766, 780 (1996); see also FERC v. Mississippi, 456 U.S. 742, 750, 102 S.Ct. 2126, 2132-2133 (1982). The price PURPA section 210(b) requires the utilties to pay to QFs in exchange for a QF's electrcal output is termed the avoided cost rate, which is the cost to the utility of producing the energy itself or purchasing it from an alternative source. 16 U.S.C. § 824a-3(b), (d). FERC's reguations entitle QFs to long term contract rates set at the purchasing utility's ful avoided costs at the time the QF commts itself to a legally enforceable obligation to deliver its REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-1O-62 PAGE 16 project's output over a specified term. 18 C.F.R. § 292.304(a), (b), (d)(2)(ii); Cedar Creek Wind LLC, 137 FERC ~ 61,006 at ~~ 30-37; JD Wind 1, LLC, 130 FERC ~ 61,127, ~ 23 (2010); see also American Paper Institute, Inc. v. FERC, 461 U.S. 402, 417-18, 103 S.Ct. 1911, 1930 (1983). FERC's regulations require utilities to publish "stadard rates" available for long term contracts available to QFs below a state-implemented maximum generating capacity. 18 C.F.R. § 292.304( c)(1 )-(3). The IPUC has traditionally set the eligibilty cap for published avoided cost rates at 10 average monthly MW. But on Febru 7, 2011, the IPUC reduced the eligibilty cap to 100 kw nameplate capacity for wind and solar QFs and stated the effective date of ths reduction would be December 14, 2010. See Order No. 32176, at 11-12. B. The IPUC's PURP A Grandfathering Precedent Regarding Formation of a Legally Enforceable obligation. When the published rates change, or become otherse unvailable to a QF before the QF can obta a wrtten contrct, the QF is entitled to grandfathered rates if the QF formed a "legally enforceable obligation" prior to the date the rates became unavailable. 18 C.F.R. 292.304(d)(2)(ii). Under the IPUC's implementation of PURA, a QF obtans grandfathered rates if it can "demonstrate that 'but for' the actions of (the utility, the QF) was otherwse entitled to a power purchase contract." Earth Power Resources, Inc. v. Washington Water Power Company, Case No. WWP-E-96-6, Order No. 27231 (1997) (fmding utility delayed negotiations and therefore QF was entitled to grandfathered rate); see also Blind Canyon Aquaranch v. Idaho Power Company, Case No. IPC-E-94-1, Order No. 25802 (1994). Prior to the "bright line rue" discussed above, the most onerous test the IPUC has ever used for determining grandfather eligibilty is the pre-fied complait test. Ths test requires, REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-I0-62 PAGE 17 prior to the effective date of the rate change, the QF must have obtaed an executed contract, or have fied a meritorious complaint at the Commssion alleging it is entitled to a contract. See A. W Brown Co., Inc. v. Idaho Power Co., 121 Idaho 812, 816-18,828 P.2d 841,845-47 (1992). The Commission has not applied ths onerous pre-filed complaint test consistently. The Commission has employed much less onerous tests in the past. See, e.g., Blind Canyon Aquaranch, Order No. 25802; Earth Power Resources, Inc., Order No. 27231. Indeed, the Commssion has approved grandfathered rates where no formal writig was even exchanged prior to the date the previous rates became unavailable. See Re Approval of a Firm Energy Sales Agreement with Yellowstone Power Company, Order 32104, at 12 (2010) (approvig 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)" in par because QF had "familarty with PURPA projects and the stadard terms of Idao Power's power purchase agreements"). C. FERC held that the IPUC's "bright line rule," requiring a signature of both parties prior to formation of a legally enforceable obligation was inconsistent with 18 C.F.R. 292.304(d)(2)(n), and noted that a legall enforceable obligation can arise prior to memorialization of a contract to a writing. In Cedar Creek Wind, FERC held that requiring a fuly executed, wrtten contract to establish a LEO is inconsistent with 18 C.F.R. § 292.304( d)(2) (ii). FERC explained: Thus, under our reguations, a QF has the option to commt itself to sell all or par of its electrc output to an electrc utility. Whle ths may be done though a contract, if the electrc utility refuses to sign a contract, the QF may seek state reguatory authority assistace to enforce the PURP A-imposed obligation on the electrc utility to purchase from the QF, and a non-contractu, but still legally enforceable, obligation will be created pursuat to the state's implementation of PURA. Accordingly, a QF, by commttng itself to sell to an electrc utility, also REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-1O-62 PAGE 18 commts the electrc utilty to buy from the QF; these commtments result either in contracts or in non-contractu, but binding, legally enforceable obligations. Cedar Creek Wind LLC, 137 FERC ~ 61,006 at ~ 32. FERC explained that "a legally enforceable obligation may be incured before the formal memorialization of a contract to wrting." Id. at ~ 36. FERC noted: Cours have recognzed that negotiations regardig terms that paries to the negotiations intend to become a finalized or wrtten contract, may in some circumstaces result in legally enforceable obligations on those paries notwthstading the absence of a wrting. See generally Burbach Broadcasting Company of Delaware v. Elkins Radio Corp., 278 F.3d 401,407-09 (4th Cir. 2002); Adjustrite Systems, Inc. v. GAB Business Services, Inc., 145 F.3d 543,547- 50 (2d Cir. 1998); Miler Construction Co. v. Stresstek, 697 P.2d 1201, 1202-04 (Idaho 1985). Id. at ~ 36 n.62. ARGUMENT A. The Grouse Creek QFs each satisfy the Commission's prior grandfather tests for forming a legally enforceable obligation on November 8, 2010 by filing meritorious Complaints, or alternatively, no later than December 9, 2010 when all terms were agreed to by the Grouse Creek QFs and Idaho Power. The Grouse Creek QFs each entitled themselves to long term contracts with rates set at the published avoided costs in Order No. 31025 because each QF satisfied the Commission's grandfathering tests before December 14, 2010. Each QF satisfies even the most strngent grandfather test ever used by the Commission because each had a meritorious complaint on fie at the Commssion on November 8,2010. See A. W Brown Co., Inc., 121 Idaho at 816-18,828 P.2d at 845-47. Although it may seem out of the ordiar for a par to form a binding contract by fiing a complaint against its contracting counter par, ths is adittedly and necessarly a unque contractig sitution. In the words of REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-1O-62 PAGE 19 one cour finding a LEO had arsen: "We are not afer all, dealing with completely free enterprise. We are, rather, dealing with the twlight world of reguated monopolies." Pub. Service Co. of Oklahoma v. State ex rel. Oklahoma Corp. Commn., 115 P.3d 861, 873 (Okla. 2005) (internal quotation omitted).6 In Idaho, a QF can form a LEO by attemptig to negotiate, providig the utility with the necessar project information, and filing a complait afer the utilty refuses to process the request timely and in good faith. Each Grouse Creek QF's Complait alleged that it attempted to negotiate and committed itself to Idaho Power's standard QF terms. Complaint at ~ 8. Each also alleged that Idaho Power's insistence on completion of the protracted transmission processes prior to executig a PP A was uneasonable because the QFs had expressed willngness to agree to a delay default liquidated damages securty provision reasonably calculated to offset Idaho Power's actu damages in the event of a delay default. Id. at ~~ 9, 16. The allegations in the Complaints were meritorious because the facts asserted therein are now supported by the record discussed above. Despite dilgent efforts for many months prior to filing the Complaints, the QFs did not even obtan a draf contract until November 1, 2010, apparently due to Idaho Power's position that it does not even provide draf contracts until afer interconnection and transmission are "pinned down." Affdait of Christine Mikell, Exhbit E, p. 2. Even then, the draf contract contaned the onerous requiements that the QFs secure fi transmission to Idaho Power and proceed though Idaho Power's internal TSR process prior to execution. The QFs had no trouble progressing though the interconnection and transmission 6 See also Snow Mountain Pine v. Maudlin, 84 Or. App. 590,600, 734 P.2d 1366, 1371 (1987). REPL Y LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-1O-62 PAGE 20 processes on BPA's system. But the QFs had no power to begin Idao Power's internal TSR process, and Idaho Power did not begin that process until November 4, 2010, despite repeated requests that it do so many months earlier. That Wasatch Wind reduced the capacity of the QFs caused no problem in the interconnection and transmission processes with Raf River Rural Electrc Cooperative and BPA, and should not have been a problem for Idaho Power's transmission personnel's processing either, if Idaho Power had initiated its TSR process when initially requested. See Affdavit of Christine Mikell at ~~ 22-23,30. Idaho Power ultimately agred to execute standard PURP A contracts without regard to the sttus of the transmission processes that had delayed exchange of wrtten contracts for several months. Furer, the QFs' position on the liquidated daages provision was entirely consistent with Idaho law and Commission orders. See Magic Valley Truck Brokers, Inc. v. Meyer, 133 Idao 110, 117,982 P.2d 945,952 (Ct. App. 1999); Order No. 30608. That wrtten contracts were executed shorty afer filing of the Complaints fuer underscores the merit to the allegations that the QFs had done everyng in their power to obligate themselves prior to filing the Complaints. Additionally, the large sums of money and tie spent on developing the projects and the advanced stge of their matuty evidences their intent to obligate themselves to the FESAs. See In the Matter of Cassia Wind to Determine Exemption Status, Case No. IPC-E-05-35, Order No. 29954, 2-4 (2006) (finding wind QF entitled to grandfathered rates based on matuty of development of project when it had merely submitted a completed application for interconnection study, including the applicable fee, and had performed wind studies, commenced REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-I0-62 PAGE 21 prelimina permittng and licensing activities, and made efforts to secure sites to place tubines); Affdavit of Christine Mikell at ~~ 12,25. Prior to filing Complaints, the Grouse Creek QFs had entered into an Interconnection Agreement, had obtaned all necessar real propert rights for the sites, collected over two years of wind data, conducted extensive wildlife and vegetation studies, and attempted to negotiate various aspects of the projects with Idaho Power for almost a year. Finaly, even if the filing of the Complaints did not create a LEO in ths case, the QFs' demonstated knowledge and agrement to all of the fina contract terms evidences the intent of the QFs in ths case to obligate themselves no later than December 9, 2010, under IPUC grandfather precedent. See Re Approval of a Firm 'Energy Sales Agreement with Yellowstone Power Company, Order 32104, at 12. The Grouse Creek QFs had obtaned and reviewed a draf PUR A FESA from Idaho Power on November 1, 2010, a month and a half prior to the rate chage date, and letters exchanged between the pares on November 24,2010, and December 2, 2010, conf the mutu understding of the terms in the final FESAs. No terms or project specifics changed afer December 9, 2010. All material terms and project specifics were well settled and agreed to by the Grouse Creek QFs and Idaho Power by December 9, 2010, and a LEO arose on or before that date. B. FERC's Cedar Creek Wind declaratory order compels the Commission to apply its customary grandfatherig criteria, and determine that the Grouse Creek QFs formed a legall enforceable obligation prior to December 14,2010. The remand from the Supreme Cour in ths matter provides the Commssion with the opportty to apply its prior grandfather criteria to the Grouse Creek QFs FESAs to determine REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-1O-62 PAGE 22 when a legally enforceable obligation arose, and modify its prior orders pursuat to I.C. § 61- 624. In its prior orders, the Commssion did not apply its existig grandfather precedent. Rather, the Commssion anounced a "bright line rule" that "a Firm Energy Sales Agreement/ower Puchase Agreement must be executed, i.e., signed by both pares to the agreement, prior to the effective date of the change in eligibilty criteria." Order No. 32257 at 10. The Commssion stated as follows: The primar issue to be determed in these cases is whether the Agreements. which utilize the published avoided cost rate were executed before the eligibilty cap for published rates was lowered to 100 kW on December 14,2010, for wind and solar projects. "According to the FERC, 'it is up to the States, not (FERC) to determine the specific parameters of individua QF power purchase agreements, including the date at which a legally enforceable obligation is incured under State law.'" (Rosebud Enterprises, Inc., v. Idaho Public Utilties Commission, 128 Idaho 609, 623-24, 917 P.2d 766, 780-81 (1996)), citig West Penn Power Co., 71 FERC ~ 61, 153 (1995). We find that the Agreements were not fuly executed (signed by both pares) prior to December 14,2010. More specifically, each Firm Energy Sales Agreement states that the "Effective Date" of the Agreement is "The date stated in the openig paragraph of ths Agreement representig the date upon which ths (Agreement) was fuly executed by both Pares." Agreements ~ 1.11. The opening paragraph is dated "this 28 day of December, 2010." Agreements at 1. It is clear tht the Projects signed the Agreements on December 20, and Idaho Power signed on December 28,2010. Id. at 29. Thus, on the date the two Agreements became effective, published avoided cost rates were available only to wind and solar projects with a design capacity of 100 kW or less. Order No. 32257 at 9. The Commission acknowledged tht "(t)he Projects also argue tht '(w)hen the published rates change or become otherwse unavailable to a QF before the QF can obtan a contract, the QF is entitled to grandfathered rates if it can 'demonstrate that but for the actions of (the utility, the QF) was otherwse entitled to a power purchase contract.' Comments at 7." Id. Notably, the REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-1O-62 PAGE 23 Commission did not expressly disagree with the Grouse Creek QFs that they had met all past grandfathering criteria utilzed by Idaho's implementation of 18 C.F.R. § 292.304(d)(2)(ii). Rather, the Commission stated, "Because published avoided cost rates remain unchanged and only the eligibilty size has changed, grandfathering criteria applied to rate changes are not applicable here." Id. Nothng precludes the Commission from applying its grandfather precedent at this tie. As noted above, a formal, final wrting is clearly not required for a QF to form a LEO. Consistent with the IPUC's existig grandfather precedent implementing FERC's LEO rue and Idaho contract law, FERC declared that a final written agreement is not necessar to establish a legally enforceable obligation. Cedar Creek Wind LLC, 137 FERC ~ 61,006 at ~ 36 & n.62; see also Evco Sound & Electronics, Inc. v. Seaboard Surety Company, 148 Idaho 357, 365, 223 P.3d 740, 748 (2009); Miler Construction Co. v. Stresstek, 108 Idaho 187, 188-89; 697 P.2d 1201, 1202-04 (1985); Re Approval of a Firm Energy Sales Agreement with Yellowstone Power Company, Order 32104, at 12. Pursuat to the IPUC's LEO criteria, a LEO arose on November 8,2011, on which date the Grouse Creek QFs' fied meritorious complaits alleging that they commtted themselves to Idaho Power QF FESAs with standad terms and published rates approved by the IPUC. Alternatively, the Grouse Creek QFs established a LEO, at the very latest on December 9, 2011, by which time every word in the final contracts was known and not subject to any dispute or reasonable misunderstading whatsoever. Idaho Power's contrar position rests on one faulty legal premise and one faulty factual premise. Legally, Idaho Power's arguent fails because Idaho Power incorrectly concludes, REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-1O-62 PAGE 24 despite Cedar Creek Wind and the IPUC's past precedent, that a LEO canot be formed until a formal wrting is signed. See Idaho Power's Legal Briefat 6-7 (asserting "Grouse Creek did not obligate itselfto sell its electrcity to Idaho Power until well afer December 14,2010, when it signed the PPA on December 21,2010"). That is simply incorrect because a legally enforceable obligation may be formed before memorialization of a contract to a formal wrting. Factuly, Idaho Power's arguent fails because it rests on the mistaen position that Idaho Power did not know the projects' transmission provider or their precise locations until December 15, 2010. See Idaho Power's Legal Brief at 11-12; Affdavit of Randy Allphin at ~ 17-19 and Exhbits 13-15. Idaho Power states these items. were unown because they were inadvertently omitted from the completed wrtten contract sent to Idaho Power from the Grouse Creek QFs on December 2,2010. Agai, Idao Power's characterization is simply incorrect because Idaho Power possessed both of these items far in advance of December 2010. The Grouse Creek QFs previously provided the carographic sections in the October 1, 2010 letters. See Affdait of Christine Mikell at Exhbit G, pp. 5, 13. The sections in Exhbit B of the executed FESAs before the Commssion are no different from those in the October 1 st letters. And Wasatch Wind had stated that BP A would be the transmittng entity on multiple occasions. See id. at Exhbit A, p. 2 (Febru 26,2010), Exhbit C, p. 9 (June 17,2010); Exhbit D, pp. 1-2,5, 7, 11, 13 (July 14, 2010); Exhbit F, p. 1, 7,9, 13, 15 (August 17,2010); Exhbit G, pp. 1,6,9, 15 (October 1, 2010); Complaints, Case Nos. IPC-E-1O-29 and -30, at ~ 7 (November 8, 2010). Idao Power attempts to create confsion regarding whether BP A or PacifiCorp would be the transmittng REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-1O-62 PAGE 25 entity. See Affdavit of Randy Allphin at ~ 17. But Idaho Power's alleged confsion is misleadig, at best. Idaho Power points to no evidence - other than Mr. Allphi's allegation of his own confsion - to support the assertion that the Grouse Creek QFs ever envisioned using PacifiCorp's trsmission system. Doing so would require building a 70 mile interconnection line from the projects to the nearest PacifiCorp line. PacifiCorp has no transmission or distrbution lines anywhere near the projects. The record compels a conclusion that Idaho Power did understad BPA to be the transmitting entity, and no reasonable confsion existed on or afer December 14,2010. A LEO therefore existed before December 14,2010. CONCLUSION For the reasons set fort above, a legally enforceable obligation arose on November 8, 2010 with the filing of the meritorious Complaints, or alternatively, no later than December 9, 2010 when every word in the fmal wrtten contrcts was known and agreed to by the Grouse Creek QFs and Idaho Power. Therefore, the Grouse Creek QFs respectfuly request that the Commission exercise its authority under I.C. § 61-624, and modify its prior orders to approve the Fir Energy Sales Agreements. Respectfly submitted this 27th day of Febru 2012. RICHASON & O'LEARY, PLLC~ te J. Richardson Gregory M. Adams Attorneys for Grouse Creek Wind Park, LLC and Grouse Creek Wind Park II, LLC REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-I0-61, IPC-E-1O-62 PAGE 26 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 27th day of Febru, 2012, a tre and correct copy of the within and foregoing REPLY LEGAL BRIEF OF THE GROUSE CREEK WIND PAR LLC, GROUSE CREEK WIND PARK II, LLC was served as shown to the followig paries: Commission Sta Kristine Sasser Deputy Attorney General Idaho Public Utilties Commission 472 W. Washington Street Boise, Idaho 83702 Kris. Sasser~puc.idaho. gov ( ) U.S. Mail, Postage Prepaid (x) Hand Delivered ( ) Overnight Mail ( ) Facsimile (x) Electronic Mail Lisa Nordstrom Jason Wiliams Donovan Walker Idaho Power Company POBox 70 Boise, Idaho 83707 dwa1er~idaopower.com jwillams~idaopower.com Inordstrom~idahopower.com ( ) U.S. Mail, Postage Prepaid (x) Hand Delivered ( ) Overnight Mail ( ) Facsimile (x) Electronic Mail Randy Allphin Idaho Power Company POBox 70 Boise, ID 83707 rallphin~idahopower.com ( ) U.S. Mail, Postage Prepaid (x) Hand Delivered ( ) Overnight Mail ( ) Facsimile (x) Electronic Mail Signed C1 REPLY LEGAL BRIEF OF GROUSE CREEK QFs CASE NOS. IPC-E-1O-61, IPC-E-1O-62 PAGE 27