20131028Complaint.pdf

GrvBNs PunsLEY,""
LAW OFFICES
601 W. Bannock Street
PO Box2720, Boisa, ldaho 83701
TELEPHONE: 20E 388-1200
FACSIMILE: 208 388-1300
WEBSITE: w r.givonspur8ley.com
Oeborah E. Nelson
[e-mail]
[phone]
DEN/kml
Enclosures
1908864 l
Gary G. Allen
Pstsr G. Barton
Christopher J. Beeson
Clint R. Bolinder
Erik J. Bolinder
Preston N. Carter
Jsremy C. Chou
Wlliam C. Cole
Michasl C. Creamer
Amb3r N. Dina
Elizabth M. Donick
Thomas E. Dvorak
Jeffroy C. Fereday
Martin C. Hendrickson
Steven J. Hippler
Don E. Knickehm
Neal A. Koskella
Debora K. KisteNsn
Micha6l P. Lawronco
Franklin G. Ls6
David R. Lombardi
Emily L. Mcclure
Ksnnsth R. Mcclwe
Kelly Grffie Mcconnell
Alex P. McLaughlin
Molodis A McQuado'
Christoph6r H. Meyar
L. Edward Miller
Patrick J. Mill6r
Judson B. Monlgomery
Deborah E. Nelson
W. Hugh O'Riordan, LLM.
Angela M. Reed
Malt G. Smith
Jeffrey A. Wan
Robarl B. Vvhito
Of Counsel
Kimb€rly D. Maloney
'Lic€nsed in Virginia
Retirgd:
K6nn6th L. Pursley
Jam6s A. Mcclurs (1524-2011')
Raymond D. Givgns (1917-2008)
October 25,2013
VIA HAND DELIVERY
Jean Jewell,
Commission Secretary
Idaho Public Utilities Commission
472W. Washington
Boise, ID 83702
RE: Idaho LVind Partners vs. Idaho Power Company
Dear Jean:
Enclosed are an original and eight (8) copies of a Complaint in the above matter. Please
conform a copy and return it to our courier.
Please do not hesitate to contact me if you have questions or concerns.
Sincerely,fuW
Deborah E. Nelson
lf a- 8,13-14
Deborah E. Nelson, ISB # 5711
Preston N. Carter, ISB # 8462
GIVENS PURSLEY LLP
601 W. Bannock St.
Post Office Box2720
Boise, Idaho 83701-2720
Telephone: [phone]
Facsimile: 208-388-l 300
r r067-18_t885436_ls
Attorneys for Idaho Wind Partners I, LLC
IDAHO WIND PARTNERS I, LLC,
Complainant and Petitioner,
vs.
IDAHO POWER COMPANY,
Respondent.
r : 1.. ql,
case No. I P t-- E'13-Lq
IDAHO WIND PARTNERS I, LLC'S
COMPLAINT AND PETITION FOR
DECLARATORY ORDER
i' i
f-f,lu
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
INrRooucuox
IDAHO WIND PARTNERS I, LLC ("IWP"), on behalf of its solely-owned subsidiary
project companies,l files this Complaint and Petition for Declaratory Order ("Complaint and
Petition") against Idaho Power Company ("Idaho Power") with the Idaho Public Utilities
Commission (the "Commission") pursuant to Idaho Administrative Rules 31.01.01.054 and
31.01.01.101. This Complaint and Petition seeks interpretation and enforcement of certain 2005-
era Firm Energy Sales Agreements ("FESAs") between Idaho Power and projects owned by
IWP.
' Tuana Gulch Wind Park, LLC; Golden Valley Wind Park, LLC; Milner Dam Wind Park, LLC; Oregon Trail Wind
Park, LLC; Salmon Falls Wind Park, LLC; Thousand Springs Wind Park, LLC; Burley Butte Wind Park, LLC; and
Pilgrim Stage Station Wind Park, LLC.
IDAHO WIND PARTNERS I, LLC,S COMPLAINT AND PETITION FOR DECLARATORY ORDER - Page I
Under the FESAs, in specific circumstances, Idaho Power must purchase Surplus Energy
at the current month's "Market Energy Cost." 'oMarket Energy Cost" is defined as "Eighty-five
percent (85%) of the weighted average of the daily on-peak and off-peak Dow Jones Mid-
Columbia Index (Dow Jones Mid-C Index) prices for non-firm energy."
Contrary to the plain language of the FESAs, Idaho Power's calculation of Market
Energy Cost does not consider all "daily on-peak and off-peak ... prices for non firm energy"
published in the Dow Jones Mid-C Index but, rather, considers only a subset of those prices.
Idaho Power's failure to purchase Surplus Energy at Market Energy Cost in accordance with the
FESAs has resulted in significant damages to IWP.
Through this proceeding, IWP seeks interpretation and enforcement of the Market Energy
Cost component of the FESAs. In support of this Complaint, IWP alleges as follows.
PnBr,r rvr r N.lny MlrrrRs
1. IWP's representatives for the purpose of service of pleadings and other written
materials are:
Deborah E. Nelson
Preston N. Carter
GIVENS PURSLEY LLP
601 W. Bannock Street
P.O.Box2720
Boise, ID 83701-2720
Telephone No. [phone]
Fax No. [phone]
Email address: den@ givenspursle)r.com
prestoncarter@ givenspursley. com
Ionxrrry oF THE Pantrcs
2. IWP's address is:
Idaho Wind Partners I,
c/o RP Wind ID, LLC,
82 Elm Street
PO Box 2049
LLC
its Managing Member
IDAHO WIND PARTNERS I, LLC'S COMPLAINT AND PETITION FOR DECLARATORY ORDER -Page2
Manchester Center, VT 05255
3. Through its subsidiary companies, IWP owns eleven wind power generation
facilities in Idaho. In 2005, the following eight projects entered into FESAs with Idaho Power:
Tuana Gulch, Golden Valley, Milner Dam, Oregon Trail, Salmon Falls, Thousand Springs,
Burley Butte, and Pilgrim Stage Station (collectively, "Projects" or "IWP Projects"). The
Market Energy Cost component of these FESAs forms the basis of this Complaint and Petition.
4. The Projects are Qualifying Facilities ("QFs") pursuant to the Public Utility
Regulatory Policies Act of 1978 ("PURPA").
5. Idaho Power is an Idaho corporation with its principal place of business at 1221
West Idaho Street, Boise, Idaho 83702. Idaho Power is an electric company and public utility
subject to the jurisdiction and regulation of the Commission under Title 61 of the Idaho Code,
including Idaho Code $ 6l-129.
Junrsorcuox
6. This proceeding involves FESAs approved by the Commission. The Commission
has jurisdiction to interpret and enforce the FESAs. See Idaho Code $$ 6l-129,61-501 through
6l-503, and 6l-612; Wash. Water Power Co. v. Kootenai Envtl. Alliance,99 Idaho 875, 880, 591
P.2d 122, 127 (1979) ("The statutes reflect the legislative grant of authority to the Commission
to deal broadly with . . . contracts affecting rates."); Order 32744, Case No. IPC-E-12-25
(concluding the Commission has jurisdiction over complaint alleging breach of FESA).2
7. The parties agreed to submit to the Commission all disputes "related to or arising
under" the FESAs, including "the interpretation of the terms and conditions" of the FESAs.
FESAs n22.1; see Bunker Hill Co. v. Wash. Water Power Co.,98Idaho 249,252 561P.2d391,
2 An appeal of this Order is pending before the Idaho Supreme Court.
IDAHO WIND PARTNERS I, LLC,S COMPLAINT AND PETITION FOR DECLARATORY ORDER- Page 3
394 (L977) (affirming the Commission's jurisdiction when "the parties agreed to let the P.U.C.
settle th[e] dispute").
8. The Commission has jurisdiction to issue declaratory orders under ldaho Code
$ l0-1203. Utah Power & Light Co. v. Idaho Pub. Utils. Comm'n,712Idaho 10,12,730P.2d
920,932 (1986) (holding Commission has jurisdiction to issue declaratory judgments under
Idaho Code $ 10-1203).
AppI,rc.c,nl,E LAws AND REGULATToNS
9. Section 210 of PURPA requires Idaho Power to purchase power produced by
QFs. 16 U.S.C. 5 82aa4@)(2).
10. The FESAs constitute a "legally enforceable obligation" under which Idaho
Power must purchase electricity at the contractual rate. l8 CFR 5 292.304(dX2).
1 l. Idaho Code $ 28-22-104 provides for the payment of interest at arate of l2o/o on,
among other things, money due by express contract and on money after it becomes due. See In
re Ryder, 141 Idaho 918,927, 120 P.2d736,745 (2005) (requiring Commissionto award l2Yo
interest under Idaho Code $ 28-22-104 on money due).
F.q,cruAl, BacxcRouxo
Tun FESAS AND MARKET ENERGY COST
12. Idaho Power entered into FESAs with the Projects in February, May, and October
2005.
13. The relevant provisions of the FESAs are identical. The FESAs are attached as
Exhibits 1 through 8 to this Complaint and Petition.
14. Under the FESAs, "For all Surplus Energy, Idaho Power shall pay to the Seller
the current month's Market Energy Cost or the Net Energy Purchase Price specified in paragraph
7.1, whichever is lower." FESAs fl7.2.
IDAHO WIND PARTNERS I, LLC'S COMPLAINT AND PETITION FOR DECLARATORY ORDER _Page 4
15. "Market Energy Cost" is defined as "Eighty-five percent (85%) of the weighted
average of the daily on-peak and off-peak Dow Jones Mid-Columbia Index (Dow Jones Mid-C
Index) prices for non-firm energy. If the Dow Jones Mid-Columbia Index price is discontinued
by the reporting agency, both Parties will mutually agree upon a replacement index, which is
similar to the Dow Jones Mid-Columbia Index. The selected replacement index will be
consistent with other similar agreements and a commonly used index by the electrical industry."
rd. T.12.
16. The Dow Jones Mid-C Index is currently published by Platts, a division of
McGraw Hill Financial.
17. The Dow Jones Mid-C Index includes on-peak and off-peak prices for non-firm
energy for each day of the year, including weekends and holidays.
18. According to the Dow Jones Mid-C Index, on-peak hours are the sixteen hours
from 6:00 am to l0:00 pm, or two-thirds of each day. Off-peak hours are the eight hours from
10:00 pm to 6:00 am, or one-third of each day.
19. The current month's Market Energy Cost is 85% of the average of the month's
daily on-peak and off-peak prices, as published in the Dow Jones Mid-C Index for non-firm
energy, weighted by two-thirds for on-peak and one-third for off-peak.
Io,quo Powen FATLS To usE MrD-C lNodx o,uLy zNCES
20. Idaho Power's calculation of Market Energy Cost fails to consider the "daily on-
peak and off-peak . . . prices for non-firm energy" published in the Dow Jones Mid-C Index but,
rather, considers only a subset of those prices.
21. Specifically, Idaho Power's calculation of Market Energy Cost considers only
those on-peak and off-peak prices for which the Dow Jones Mid-C Index reports a volume.
IDAHO WIND PARTNERS I, LLC,S COMPLAINT AND PETITION FOR DECLARATORY ORDER_ Page 5
22. Idaho Power's use of this subset of Dow Jones Mid-C Index prices violates the
express agreement of the parties and the plain language of the FESAs to use the oodaily" prices
published in the Dow Jones Mid-C Index for non-firm energy.
23. By using a subset of data, Idaho Power distorts the price paid for Surplus Energy.
For example, in August 201l, none of the on-peak daily prices and only one of the off-peak daily
prices in the Dow Jones Mid-C Index for non-firm energy had a reported volume. Idaho Power
calculated the Market Energy Cost for the entire month of August 2011 using this single off-peak
price, disregarding the remaining sixty-one published on-peak and off-peak prices for the month.
24. It is possible there could be one or more months in which there are no reported
volumes for any on-peak or off-peak daily prices in the Dow Jones Mid-C Index.
25. Under Idaho Power's calculation of Market Energy Cost, if there were no
reported volumes in a given month, then there would be no data with which to determine the
value of Surplus Energy for that month.
26. The Dow Jones Mid-C Index publishes a daily on-peak price and a daily off-peak
price for non-firm energy, regardless of market liquidity.
27. The parties expressly agreed in the FESAs to use the Dow Jones Mid-C Index's
daily prices to calculate Market Energy Cost.
Io,luo Pownn FArLS To vETGHT DArLy oN-pEAK AND IFF-zEAK pRrcES
28. The definition of Market Energy Cost in the FESAs does not include any
reference to volume.
29. The definition of Market Energy Cost in the FESAs calls for the weighted average
of the daily on-peak and off-peak Dow Jones Mid-C Index prices.
30. On-peak prices represent two-thirds of each day and oflpeak prices represent
one-third of each day.
IDAHO WIND PARTNERS I, LLC,S COMPLAINT AND PETITION FOR DECLARATORY ORDER _ Page 6
31. Idaho Power's failure to calculate the weighted average of the daily on-peak and
off-peak prices fails to account for the different proportion ofeach day the prices represent.
Io,quo Powoa HAS uNDERp,uo IWP FoR SURqLUS ENnncv
32. From January 201I through September 2013,Idaho Power's failure to pay IWP
the Market Energy Cost as defined in the FESAs resulted in underpayment for Surplus Energy in
all but two months (May 2011 and September 2013). In May 201I and September 2013,Idaho
Power's calculation resulted in overpayment for Surplus Energy.
33. Idaho Power's failure to purchase Surplus Energy at Market Energy Cost in
accordance with the FESAs has resulted in significant damages to IWP. For the period of
January 201 1 through September 2013,Idaho Power has underpaid IWP for Surplus Energy by
$852,1 16.
34. IWP has attempted to resolve this dispute through negotiations with Idaho Power
over the course of many months. IWP has also pursued informal proceedings with Commission
staff and Idaho Power.
35. IWP has incurred and is continuing to incur significant fees and costs as a result
of the underpayment, efforts to resolve the dispute, and this proceeding.
36.
37.
Projects.
38.
39.
and to pay
LBco, CL,q,rrvr
IWP incorporates by reference the allegations in the preceding paragraphs.
The FESAs are valid and enforceable contracts between Idaho Power and the IWP
The FESAs are subject to interpretation and enforcement by the Commission.
Idaho Power has breached the FESAs by failing to calculate Market Energy Cost
Surplus Energy in accordance with fll.12 and\7.2 of the FESAs.
IDAHO WIND PARTNERS I, LLC'S COMPLAINT AND PETITION FOR DECLARATORY ORDER _Page 7
40. Idaho Power has underpaid IWP for Surplus Energy by $852,116 for the period of
January 2011 through September 2013. The amount of damages will continue to change until
Idaho Power's miscalculation is corrected.
PnlvrR FoR RELTEF
IWP respectfully requests the Commission to issue an order:
A. Declaring that Idaho Power has breached the FESAs by failing to calculate
Market Energy Cost, and thus failing to pay IWP Surplus Energy, in accordance with fll.12 and
fl7.2;
B. Requiring Idaho Power to calculate Market Energy Cost and to pay IWP Surplus
Energy in accordance with t|l.12 and\7.2 of the FESAs;
C. Requiring Idaho Power to pay IWP the amount of underpayment of Market
Energy Cost, as required by the FESAs, for Surplus Energy it previously purchased and as
ongoing;
D. Requiring Idaho Power to pay IWP interest, pursuant to Idaho Code $ 28-22-104,
on the amount it has underpaid and continues to underpay for Surplus Energy;
E. Requiring Idaho Power to pay IWP reasonable attorney and expert fees and costs
incurred as a result of the underpayment and this proceeding; and
F. Granting any other relief the Commission deems proper.
DATED this 25th day of October 2013.
GIVENS PURSLEY LLP,M.W- ljab""rf, EJ\l"lr*
Attorneys for ldaho Wind Partners I, LLC
IDAHO WIND PARTNERS I, LLC,S COMPLAINT AND PETITION FOR DECLARATORY ORDER - Page 8
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have on this 25th day of October,2013, served the foregoing
DAHO WIND PARTNERS I, LLC'S COMPLAINT AND PETITION FOR DECLARATORY
ORDER upon all parties of record in this proceeding, by delivering an original and seven copies
upon:
Jean Jewell,
Commission Secretary
Idaho Public Utilities Commission
472W. Washinglon
Boise, ID 83702
And by mailing a copy thereof, properly addressed with postage prepaid, to:
Donovon E. Walker
dwalker@idahopower. com
Idaho Power Company
l22l W.Idaho St.
P.O. Box 70
Boise, ID 83702 , QW
Deborah E. Nelson
IDAHO WIND PARTNERS I, LLC'S COMPLAINT AND PETITION FOR DECLARATORY ORDER _ Page 9