20120831Answer to Motion to Dismiss.pdf

RECEIVED
tf ) ' fl bL! LL AUGJQU 111
ft. :
Stephen R. Thomas, ISB No. 2326
MOFFATT, THOMAS, BARRETT, ROCK &
FIELDS, CHARTERED
101 S. Capitol Blvd., 10th Floor
Post Office Box 829
Boise, Idaho 83701
Telephone [phone]
Facsimile [phone]
[e-mail]
252 14.0000
Attorneys for Complainant
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
HIDDEN HOLLOW ENERGY 2 LLC,
Complainant,
VS.
IDAHO POWER COMPANY,
Respondent.
1&-.d -0 AS
ANSWER TO MOTION TO DISMISS
COMES NOW Complainant Hidden Hollow Energy 2, LLC and, pursuant to
Rule 57, hereby responds to the Motion to Dismiss filed by Respondent Idaho Power Company
dated August 16, 2012, which Motion was embedded in its Answer.
The Motion should be denied for numerous reasons of fact and law, including the
following:
ORIGINAL
ANSWER TO MOTION TO DISMISS - 1 CIient:2534366.3
a
. .
1.As a matter of procedure, the "Motion" is no more than a tag line on the
title of Respondent's Answer, and fails to identify facts or legal authority to justify immediate
dismissal. Accordingly, it is impossible for Complainant to admit or deny specific allegations, as
none was made in support of the so-called Motion to Dismiss. However, out of abundance of
caution, Complainant denies each and every allegation that Respondent may claim to support
dismissal.
2.As a matter of procedure, Respondent ignores the special dispute
resolution clause contained in Section 19.1 of the FESA, granting the Commission authority to
resolve the dispute of the parties. This docket has only just been opened, so the Commission has
not yet had an opportunity to investigate the dispute, let alone resolve it.
3.As a matter of procedure, Respondent should have foreseen incoming
discovery from Complainant, which discovery will be served in the near term and which will
focus on subjects raised in the Formal Complaint and this Answer.
4.As a matter of substance, Complainant invokes the following defenses to
the Motion:
A. Respondent cites FESA § 14.1 as its main defense to the Formal
Complaint, which section provides that "the force majeure clause did not apply to 'short-term
disruptions or curtailment of the Facility's fuel supply' or other similar events that are known or
anticipated events in the operation of a landfill gas-supplied generation facility." Answer at 5
¶ 13 and 8 ¶ 29. However, the disruption identified in the Formal Complaint is hardly "short
term," but may last the life of the project. Moreover, the FESA was drafted substantially by
Respondent, and the contra proferentem rule of construction applies against Respondent, and
thus against the instant Motion.
ANSWER TO MOTION TO DISMISS - 2 CIient:2534366.3
.
B.Complainant cited in its Formal Complaint legal authority from the
Idaho Supreme Court regarding the force majeure doctrine in a similar context, which authority
was substantially on point, but which the Answer and Motion ignore.' Moreover, unlike the facts
of the Cogeneration case, here Complainant did post security, which Respondent has
"collected." Similar to the Cogeneration case, here the air quality permit issued to Complainant
was put in jeopardy through no fault of Complainant. See Exhibit B to the Formal Complaint.
C.Complainant posted security with Respondent in the amount of
$144,000 under the rubric of "Delay Liquidated Damages," which Respondent admits to having
now "collected." Answer at 7 ¶ 21. However, the amount and rationale of said security is
unenforceable and, upon information and belief, Respondent has recently conceded as much by
returning or refunding same to other PURPA qualified facility owners. Nonetheless,
Complainant is not now seeking return of its security but the reinstatement of its contract,
including its security deposit.
D.One basis of Complainant's allegedforce majeure is the contract
between Ada County and Dynamis Energy LLC. See Exhibit C to Formal Complaint. Said
contract formed the basis of a power purchase agreement between Dynamis Energy LLC and
Respondent, dated November 16, 2011, which the Commission approved by Final Order 32470,
entered February 24, 2012 in Case No. IPC-E-1 1-25. Accordingly, upon information and belief,
'Formal Complaint alleges at page 4:
7. On July 13, 2000, the Idaho Supreme Court held
that a civil authority's revoking or suspending of a required
environment permit in the context of a PURPA project could
constitute an event offorce majeure, which would not excuse
posting of security but would excuse other obligations for
construction and operation. Idaho Power Co. vs. Cogeneration,
Inc., 134 Idaho 738, 9 P.3d 1204 (2000).
ANSWER TO MOTION TO DISMISS -3 Client: 2534366.3
.
Respondent may be complicit in creating Complainant's expected future shortfall of landfill
methane, which may rise to tortious interference with contract and/or tortious interference with
prospective economic advantage.
E. Respondent raises in its Answer a number of equitable defenses,
e.g., estoppel, judicial estoppel and unclean hands. Answer at 8 IM 30-32. However, it takes
equity to receive equity. Therefore, Respondent's having raised equitable defense subjects its
conduct to the same scrutiny applying rules of equity, including without limitation clean hands
on the part of Respondent.
5. WHEREFORE, the Motion to Dismiss added by Respondent to its
Answer—in name but not in substance—ought to be denied in all respects.
DATED this 30th day of August, 2012.
MOFFATT, THOMAS, BARRETT, ROCK &
FIELDS, CHARTERED
By 1-
Step" R. Thomas - Of the Firm
Attorhéys for Complainant
ANSWER TO MOTION TO DISMISS -4 Client:2534366.3
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 30th day of August, 2012, I caused a true and
correct copy of the foregoing ANSWER TO MOTION TO DISMISS to be served by the
method indicated below, and addressed to the following:
( ) U.S. Mail, Postage Prepaid
(.)4Iand Delivered
( ) Overnight Mail
( ) Facsimile
( ) Email
Jean Jewell
Commission Secretary
IDAHO PUBLIC UTILITIES COMMISSION
472 W. Washington St.
Boise, ID 83702
Facsimile: [phone]
[e-mail]
Donovan E. Walker
Julia A. Hilton
IDAHO POWER COMPANY
1221 W. Idaho St.
P0 Box 70
Boise, ID 83707
Facsimile: [phone]
[e-mail]
[e-mail]
Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
( ) Email
Stephen R' -/f
ANSWER TO MOTION TO DISMISS - 5 Ctient:2534366.3