20120104Comments.pdf

REGEl
JØ.~~r.0J.tE~JI;'Y 2012 JAN -4 PM 4: 15
ATTORNEYS AT LAW
Tel: [phone] Fax: [phone]
P.O. Box 7218 Boise, ID 83707 - 515 N. 27th St. Boise, ID
Janua 4,2012
Ms. Jean Jewell
Commssion Secreta
Idaho Public Utilties Commission
472 W. Washington
Boise, ID 83702
RE: IPC-E-1l-23 - Kootenai Electric Cooperative, Inc.'s Comments in
Opposition to Idaho Power's Petition for Declaratory Order
Dear Ms. Jewell:
Enclosed please fid Kootenai Electric Cooperative, Inc.'s Comments in Opposition
to Idaho Power's Petition for Declaratory Order submitted for filing in the above-
referenced docket. We have enclosed seven (7) copies, as well as an additional copy for
you to stap for our records.
Sincerely,
i~Gregory M. Adams
Richardson & O'Lear PLLC
encl
Peter J. Richardson (ISB # 3195)
Gregory M. Adams (ISB # 7454)
Richardson & O'Lear, PLLC
515 N. 27th Street
P.O. Box 7218
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter~chardsonandolear.com
greg~chardsonandolear.com
Attorneys for Kootenai Electrc Cooperative, Inc.
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-1l-23
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITION FOR
DECLARTORY ORDER REGARING
PURP A JURISDICTION.
) KOOTENAI ELECTRIC
) COOPERATIVE, INC.'S
)
) COMMENTS IN OPPOSITION TO
~ IDAHO POWER'S PETITION FOR
) DECLARTORY ORDER
)
)
)
I
INTRODUCTION
Kootenai Electrc Cooperative, Inc. ("Kootenai") hereby respectfuly submits its
Comments in Opposition to Idao Power's Petition for Declaratory Order in response to
Idaho Public Utility Commission's ("IPUC") Order No. 32410. As set for the in detal in
Kootenai's Anwer and Motion to Dismiss filed on November 25,2011, Kootenai's
electrcity will not be made available for Idaho Power's use until after Kootenai pays
Avista Corporation ("Avista") to transmit the electrcity to Idaho Power's electrcal
COMMENTS IN OPPOSITION TO PETITION FOR DECLARTORY ORDER
PAGE-l
system in the State of Oregon. Therefore, the IPUC has no jursdiction to intervene in
Kootenai's attempt to avail itself of rues implemented by the Federal Energy Reguatory
Commission and Public Utility Commssion of Orgon ("OPUC"), which permit
Kootenai's proposed transaction, and Kootenai respectflly requests that the IPUC
dismiss Idaho Power's Petition. Kootenai stads by the factu and legal assertions in its
Answer and Motion to Dismiss, and incorporates that pleading herein by reference. The
purose of these Comments is to provide the IPUC with additional factu developments
since the date Kootenai filed its Answer and Motion to Dismiss.
COMMENTS
Since the filing of Kootenai's Answer and Motion to Dismiss, Kootenai has
dilgently continued its efforts to bring its quaifying facilty ("QF") online on schedule
and to enter into all necessar agreements, including a long-term PP A with Idaho Power
under its OPUC Schedule 85. On December 5, 2011, Kootenai and Avista executed a
Letter Agreement regarding constrction of the interconnection facilties that set a goal of
completing constrction by December 30, 2011. Constrction of the generation and
interconnection facilties has progressed, and Kootenai expects the QF to be ready for
star-up testig and operations in Janua 2012. By early December 2011, Kootenai had
stil received no communications from Idaho Power other than its initial response letter
and Petition for Declaratory Order, sent withn minutes of each other on November 4,
2011.
Kootenai again contacted Idaho Power, though counsel, with a letter dated
December 6, 2011. Kootenai's December 6, 2011 letter stated that Kootenai assumed
Idaho Power had no comments on the draf PPA sent November 17,2011, other than
COMMENTS IN OPPOSITION TO PETITION FOR DECLARATORY ORDER
PAGE-2
Idaho Power's objection to use of the OPUC Schedule 85 PPA. Kootenai's December 6,
2011 letter included the same Schedule 85 PPA previously sent for the Fighting Creek
QF on November 17, 2011, with the addition of the signatue page executed by Kootenai.
Kootenai's signatue on the PP A sent December 6, 2011 was made contingent upon the
availabilty of transmission service under Par II of Idao Power's Open Access
Tranmission Tarff ("OATT").
Kootenai's December 6, 2011 letter explaied that Kootenai intended to obligate
itself so long as Idaho Power could accept deliveres at the proposed point of delivery
without the need for transmssion upgrades to Idao Power's system that may be assigned to
the QF. Kootena had requested that Idaho Power investigate Network Tramission
availabilty in its letters dated October 19,2011, and November 17,2011. As of December
6,2011, however, Idao Power had not yet communcated to Kootena regardig whether
Idao Power Trasmission could integrate deliveries at Kootenai's proposed point of
delivery.
Kootenai's December 6, 2011 letter included the executed Interconnection
Agreement with A vista and included a Short Term Firm Point to Point Transmission
Service Agreement Kootenai executed with A vista. The Short Term Firm Point to Point
Transmission Service Agreement will allow Kootenai to make short term transmission
deliveries to Idaho Power over the 230 kilovolt ("kv") Lolo-Oxbow line discussed in
detal in Kootenai's Answer and Motion to Dismiss. Kootenai's December 6, 2011 letter
stated that Kootenai would execute a Long Term Fir Transmission Service Agreement
with A vista once Idaho Power confirms it will accept and pay for deliveries under the
OPUC Schedule 85 PP A.
COMMENTS IN OPPOSITION TO PETITION FOR DECLARATORY ORDER
PAGE - 3
On December 22, 2011, Idao Power sent counsel for Kootenai a letter in
response to Kootenai's letters dated November 17, 2011, and December 6,2011. Idaho
Power's December 22,2011 letter agai stated Idao Power's position that Kootenai's
"project is subject to the Idaho Public Utilities Commssion's ('Idaho PUC') Public
Utility Reguatory Policies Act of 1978 ('PURP A') rates, rues, and regulations - not
those of Oregon." Idaho Power's December 22, 2011 letter stated that Idaho Power
Transmission had confed that transmission capacity is available for Network Resource
designation of the QF.
Kootenai again contacted Idaho Power, though counsel, with a letter dated
December 27,2011. Kootenai's December 27,2011 letter stated: "(YJou have provided
us with no evidence that Idaho Power owns the Lolo substation or takes title to electrical
deliveries at any point along the applicable interconnection to A vista prior to the
electricity reaching Idaho Power's engineer station at Imaha, Oregon. Kootenai
respectfly disagrees that the Idaho QF taffs would apply for ths delivery to Idao
Power's electrical system in the State of Oregon."
Kootenai's December 27, 2011 letter included the same Schedule 85 PPA
previously sent for the Fighting Creek QF, with the addition of the signatue page
executed by Kootenai not made contingent upon transmission availabilty. Kootenai's
December 27, 2011 letter stated "Kootenai is fully committed to commence deliveries
under ths contract once Idao Power agrees to accept and pay for such deliveries
according to the rates and terms in the Schedule 85 contract."
Kootenai's December 27,2011 letter informed Idaho Power that Kootenai may
need to secure a substitute power sale contract with A vista terminable on short notice to
COMMENTS IN OPPOSITION TO PETITION FOR DECLARTORY ORDER
PAGE-4
allow for sta-up testing in early 2012, should Idaho Power continue to reject Kootenai's
attempts to enter into an OPUC Schedule 85 PPA. Kootenai's December 27,2011 letter
also stated that Kootenai would need to initiate a complaint at the OPUC the followig
week to protect Kootenai's rights to the OPUC Schedule 85 PPA ifIdaho Power did not
agree to the enclosed OPUC Schedule 85 PP A.
Idaho Power responded by letter to counsel for Kootenai dated December 29,
2011, again assertng its position that OPUC Schedule 85 does not apply to Kootenai's
proposed QF sale. However, Idaho Power's December 29,2011 letter provided no
fuer information rebutting Kootenai's position that Idaho Power will not tae title to
the electricity delivered by A vista until it reaches Imnaha, Oregon. Indeed, to date, Idaho
Power has not provided information supportng a claim that Idaho Power takes title to
electrcity delivered to its electrcal system over the 230 kv Lolo-Oxbow line prior to the
point of change in ownership at Imaha, Oregon. Idaho Power's position still appears to
be that any QF located in Idaho with an initial point of interconnection withn Idao and
sellng to Idaho Power must use the IPUC's PURPA rues. For the reasons set fort in
Kootenai's Answer and Motion to Dismiss, Kootenai maintains that its QF may use the
transmission system of a thrd par to deliver its output to Idaho Power in the State of
Oregon. On Janua 3, 2012, Kootenai filed a complaint against Idaho Power at the
OPUC, requesting that the OPUC compel Idaho Power to enter into the OPUC Schedule
85 PPA for Kootenai's QF deliveries to Idaho Power's electrcal system in Oregon.
As noted above, Kootenai's project will be online in the very near futue.
Delayed constrction would result in paying the constrction company for time it planed
to be on site but canot complete constrction because an off-taer for the output is
COMMENTS IN OPPOSITION TO PETITION FOR DECLARATORY ORDER
PAGE-5
unavailable. To mitigate the impact of Idaho Power's refusal to accept and pay for
Kootenai's output under the Oregon Schedule 85 PP A, Kootenai has decided to secure a
separate power sale contract that will allow for sta-up testig without delaying
constrction. Kootenai has secured a contrct to sell the QF's electrcal output "as
available" to A vista at points of delivery in Idao durng sta-up testing and the period
until Idaho Power will agree to accept deliveries. See 18 C.F.R. 292.304(d)(l). Kootenai
executed this "as available" PPA on Januar 3, 2012, and expects Avista to fie it for
approval of the IPUC soon. This "as available" PPA with Avista requires Avista to pay
the lesser of A vista's avoided cost rates or 85% of a market index price. This "as
available" PP A with A vista allows for Kootenai to terminate its obligation to sell under
the "as available" PP A with a 30-day notice to A vista. Kootenai intends to terminate the
"as available" PP A with A vista as soon as Idaho Power agrees, or the OPUC compels
Idaho Power, to accept deliveries under the OPUC Schedule 85 PP A.
CONCLUSION
Kootenai remains committed to a PP A with Idaho Power under its OPUC
Schedule 85 for Kootenai's QF deliveries over Avista's transmission system to Idaho
Power's electrical system in Oregon. For the reasons set fort in detal in Kootenai's
Answer and Motion to Dismiss, Kootenai again respectfuly requests that the IPUC
dismiss Idaho Power's petition for lack of jursdiction.
COMMENTS IN OPPOSITION TO PETITION FOR DECLARTORY ORDER
PAGE - 6
Respectfuly submitted ths 4th day of Januar 2011.
RICHASON AND O'LEARY, PLLC~
Gregory M. Adams (ISB No. 7454)
Attorney for Kootenai Electric
Cooperative, Inc.
COMMENTS IN OPPOSITION TO PETITION FOR DECLARATORY ORDER
PAGE -7
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 4th day of Janua, 2012, a tre and correct
copy of the within and foregoing COMMENTS IN OPPOSITION TO PETITION
FOR DECLARTORY ORDER BY KOOTENAI ELECTRIC COOPERATIVE, INC.
was served by ELECTRONIC MAIL and HAD DELIVERY, to:
Donovan E. Waler
Jason Wiliams
Idaho Power Company
1221 WestIdao Street
Boise, Idaho 83707-0070
dwalker~idahopower.com
iwillams~idaopower.com
Jean Jewell
Commission Secreta
Idaho Public Utilities Commission
472 West Washington
Boise, Idaho 83702
Jean.iewell~puc.idaho.gov
GA
. Adams
COMMENTS IN OPPOSITION TO PETITION FOR DECLARATORY ORDER
PAGE - 8