20150814IIPA Comments.pdf

Eric L. Olsen #481I
Echo llawk & Olsen, PLLC
505 Pershing, Suite 100
P.O. Box 6119
Pocatello, Idaho 83205-61 l9
Telephone : (208) 47 I -1624
Facsimile: (208) 47 8-l 67 0
[e-mail]
Attorneys for Idaho Irrigation Pumpers Association, Inc.
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITTON TO DETERMINE
PURPA CONTRACT ELIGIBILITY FOR
TEN DISAGGREGATED lOO KW SOLAR
PROJECTS
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BEFORE THE IDAIIO PUBLIC UTILITIES COMMISSION
)) CASE NO. IPC-E- l s- l 8
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COMMENTS OF THE IDAHO IRRIGATION
PUMPERS ASSOCIATION. INC.
COMES NOW the Idaho h'rigation Pumpers Association, Inc., by and through counsel,
Eric L. Olsen of Echo Hawk & Olsen, PLLC, and hereby respectfully makes a written comment
in support of Idaho Power Company's Petition for an order determining that the ten 100 kilowatt
("kW') projects, proposed by Site Based Energy as WRCE 1 tlu'ough WRCE 10, be subject to
the Commission's interim relief approving maximum contract terms of five years as directed in
Order Nos. 33222 and 33253,and that such projects should also be subject to the Commission's
ultimate determination regarding maximum contract term in Case No. IPC-E-15-01.
BACKGROIiND
The Public Utility Regulatory Policies Act ("PURPA") was passed as part of the National
Energy Act of 1978. PURPA requires electric utilities to purchase electric energy from
quali$ing facilities (*QF") at rates approved by the state regulatory agency, which in this state is
the Idaho Public Utilities Commission ("Commission"). 16 U.S.C. $ 824a-3; Idaho Power v.
Idaho PUC, 155 Idaho 780,789,316 P.3d 1278, 1287 (2013). PURPA and its implementing
IDAHO IRRIGATION PUMPERS ASSOCIATION, INC.'S COMMENTS IN SUPPORT - I
regulations requhe that standard avoided cost rates be established and made available to QFs
with a design capacity of 100 kW or less. 18 C.F.R, $ 292.304(c). The purchase or "avoided
cost" rate is not to exceed the "increnrental cost" to the utility, defined as the cost of energy
which, "but for the purchase from [the QF], such utility would generate or purchase from another
solrl'ce." 16 U.S.C. $ 82aa-3(d); l8 C.F.R. $ 292.101(6) defining "avoided cost").
The Cornmission has established two methods for calculating avoided cost depending on
the size of the QF project: (l) the surrogate avoided resource (SAR) methodology (used to
calculate "published rates'), and (2) the Integrated Resource Plan (IRP) rnethodology. The SAR
methodology is applied to solar QFs with a design capacity of up to 100 kW. The IRP
methodology applies to any QIr with a design capacity above the eligibilrty cap for published
rates. The IRP methodology recognizes the individual generation characteristics o1'each project
by assessing when the QF is capable of delivering its resources against when the utility is most in
need of such resources. T'he resultant pricing is reflective of the value of QF enelgy to the utility.
Order No. 33262.
The l.'ederal tsnergy Regulatory Commission prcscribes rules for PURPA's
implementation, but the Idaho Public Utilities Cornmission has discretion in determining how the
rules will be implemented, 16 U.S.C. $ 824a-3, Idaho Pou,er Company y, Idaho PUC, 155 Idaho
780,782,316 P.3d 1278, L280 (2013). PURPA, and the regulations implernenting it, are silent as
to contract length; consequently, the issue is iri the Commission's discretion. Afton Energt v.
Idaho Power,107 Idaho 781,785-86,693 P.2d 427,431-32 (1984); Idqho Power v. Idaho Public
Utilities Commission, 155 Idaho 780,782,316 P,3d 1278,1280 (2013).
The issue of disaggregation has previously been before the Comrnission. In Case No.
GNR"E-10-04, Idaho Power Company, Avista Corporation, and PacifiCorp dba Rocky Mountain
IDAHO IRRIGATION PUMPERS ASSOCIATION, INC.'S COMMENTS IN SUPPORT.2
Power filed a Joint Petition requesting that the Commission initiate an investigation to address
various avoided cost issues, including disaggregation ofplojects, to qnalify for published ratcs.
The Commission opened GNR-E-I1-01 to investigate the disaggregation issue, and all
parties of record fi'om Case No. GNR-E-I0-04 were automatically added as parties in the 201I
case. Order No. 32262 at 3. The Comrnission was concerned that QF projects were
disaggregating into smaller projects in order to meet eligibility requirements for published
avoided cost rates that may not be just and reasonable to the utility customers ol in the public
interest, Older No. 32262.
The Commission solicited information and investigation of a published avoided cost rate
eligibility cap structure that prevents wind and solar QFs from disaggregating into smaller
projects in order to obtain published avoidcd cost rates that exceed a utility's actual avoided cost.
Order No. 32262. Testimony was reccived by several witnesses, including Rick Sterling, the
Commission's Engineering Supervisot'l and Bruce W. Griswold, Itocky Mountain Power's
I)ircctor of Sliort-term Origination and QF Contracts.2
The purpose of Ml. Sterling's testimony was to present criteria to distinguish a single QF
for purposes of dctei'mining eligibility for published avoided cost ratc.s. Sterling Testimony at 2.
He proposed that the Commission identify a set of criteria to be considered in determining
wlrether a proposed project represents a "Single Project." Id. at 6. Under his recommendation,
the utility makes an initial dctcrmination and the Commission is only required to make a
determination in instances where there is uncertainty or disagreement between the project
developer zurd the utility. 1d.
' Case No. GNR-E-11-01
("Sterling Testimony").
2 Case No. GNR-E-l l-01
("Griswold Testimony").
Dilect Testimony of Rick Stcrling, Idaho Public Utilities Commission, March 25, 2011
Rebuttal Testimony of Bruce W. Griswold, Rocky Mountain Power, Apfi|22,2011
IDAHO IRRIGATION PUMPERS ASSOCIATION,INC.'S COMMENTS IN SUPPORT.3
Mr. Sterling's Single Projcot Criteria suggests that the Commission consider all relevant
factors in determining whether a project with multiple generation sources qualifies as a Single
Project, and allows the Commission the discretion to call a project a Single Project on the basis
of "knowing it when you see it," However, relevant factors include, but are not limited to
whether each generation source within the project:
a. uses the same motive force or fuel sowce;
b. is owned or controlled by the same person(s) or affiliated person(s);
c. is placcd in scrvice within 12 months of an affiliated Project's commercial operation
dates as specified in the power sales agreement;
d. shares a common point of interconnection or interconnection facilities;
c. shares common control, communications, and operation facilities;
f. shales a conunon transmission intelconnection agreement;
g. has a power sales agreement executed within 12 months of a similar facility in the
same general vicinity;
h. is operated and maintained by the sarne entity;
i. is constructed by the same entity within 12 months;
j. nses corrmon debt or equity financing;
k. is subject to a revenue sharing agreement;
l. obtains local, state and federal land use pelmits under a single application or as a single
entity;
m. shares engineering and/or procurement contracts;
n. shares common land leases; or
IDAI{O IRRIGATION PLMPERS ASSOCIATION,INC.'S COMMENTS IN SUPPORT.4
o, is in close proximity to other similar facilities.3
I\dr. Griswold submitted testimony, and then after reviewing the other witnesses'
testimony concerning the disaggregation proposals submitted rebuttal testimony. Griswold
Testimony at 1. Mr. Griswold's lebuttal testimony included looking at such factors as whether
the genetating project:
a. is located within five miles of any generator comprising the applicant's project;
b. is constructed within the same.24-month period as the applicant project; and
c, exhibits characteristics of being developed in common with the applicant's project,
including, but not limited to:
1. ownership by the same or affrliated entities,
2. an umbrella sales arrangement,
3. shared interconnection point, facilities and/or interconnection agreement,
4. shared transmission agreentents,
5. common control, communication or operations facilities,
6. permitted as a single application or entity,
7. shared land leases,
8. shared engineedng or procutement contracts,
9. revenue sharing ar::angements, and
10. common debt or equity financing.a
After concludirig its investigation, the Commission issued specific findings. It found that
"wind and solar are intermittent energy resources with unique characteristics." Order No. 32697
at 13. Wind and solar projects can be broken up in order to obtain rnultiple published rate
3Id. at Exhibit No, 301.4Id. at Exhibit No, 205.
IDAHO IRzuGATION PUMPERS ASSOCIATION,INC.'S COMMENTS IN SUPPORT- 5
contracts. When a wind or solar project is disaggregated, "the SAR Methodology no longer
produces a rate that accurately reflects the value of the energy to the utility." ,Id. Therefore, to
prevent projects florn disaggregating in order to obtain published avoided rates, the Cornmission
found that the eligibility cap for published avoided cost rate contracts for wind and solar projects
shall be set at 100 kW or less. /r/-
The Commission determined that a 100 kW eligibility cap fot published avoided cost
rates for wind and solar QFs was appropdate, and that any attempt to implement criteria in an
effort to prevent disaggregation would be met by attempts to circumvent such criteria. Ordel No.
32262.'I'he Commission emphasized that I'URPA and published rate structures were nevel
intended to promote large scale wind and solar development to the detriment of utility customers.
rd.
Now, once again, QFs, such as those proposed by Site Based Energy, are attempting to
circumvent the cap irnposed by this Commission in a disaggregation scheme in order to obtain
more favorable published rates to the detliment of utility customers.
RECOMMENDATION
The Commission should determine that Site Based Energy's disaggregation of a project
into ten 100 kW projects is a wrongful attempt to sidestep the Commission's prcvious Orders.
The Commission should grant Idaho Power Company's Petition and issue an order finding that
the ten 100 kW projects identihed as WRCE 1 tluough 10 proposed by Site Based Energy should
be subject to the Commission's interim relief approving maximum contract terms of five years as
directed in Order Nos. 33222 and 33253, and such projects should be subject to the
Commission's ultimate determination regarding maximum contract term in Case No. IPC-I1-15-
0t.
IDAHO IRRIGATION PUMPERS ASSOCIATION, INC.'S COMMENTS IN SUPPORT - 6
STATEMENT OF REASONS IN SUPPORT
There are several reasons for this recommendation:
(A) PURPA and its regulations use a one mile radius test to determine whethet a facility
meets the 80 megawatt size restriction of a qualifuing small power production facility, and
thereby restricts any aftempts to disaggregate facilities. 18 CFR $ 292.20a@)(l)-(2) (The power
ploduction capacity of a facility for which qualification is sought, together with the power
production capacity of any other srnall power ploduction facilities within one mile may not
exceed 80 mcgawatts). Site Based Energy's WRCE 1 through 10 usc the samc solar cnergy and
are located within one mile of each other.
(B) the Commission has already showri its disapproval in disaggregation tactics. Order
Nos. 32697;32262.
(C) Allowing Site Based Energy to disaggregate in order to obtain a rate that is not an
accurate reflection of the utility's avoided cost fbr the purchase of the QF generation would be
erroneous and illegal. Rosebud Enterprises, Inc. v. Idaho Publi.c Utilities Commision, 128 Idaho
609, 623, I 17 P.2d 7 66, 7 8A (1 995).
(D) The testimony received in prior cases on criteria for a "single project" fi'om Mr.
Sterling and Mr. Griswold show that this is a "single project." Specifically the projects appear to
be owned or controlled by the salne or an affiliated person-Site Ilased Energy; all of the
projccts idcntify the same ariticipated commencement datc of cnclgy dcliveries to Idaho Power
as Malch 37,2016; and the projects ate located within a close proximity that does not exceed
five miles. This is a classic'oknowing it when you see it" case of disaggregation.
]DAHO IRRIGATION PUMPERS ASSOCIATION, INC.'S COMMENTS IN SUPPORT - 7
DATED this 13th day of August,2015.
Idaho h'rigation Pumpers Association, Inc.
CERTIFICATE OF SERVICE
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I{and Delivered
ECHO HAWK & OLSEN, PLLC
I hereby certify that on this [$day of August,20l5,I caused to be served a true, comect,
and complete copy of the foregoing document by the method indicated below, and addressed to
the following:
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
P.O. Box 83720
472 W . Washirrgton Street
Boise, lD 83720-0074
Email : flcWct t,elpUc State. id U
Donovan E, Walker
Idaho Power Company
l22l W.Idaho St.
P.O. Box 70
Boise,ID 83707-0070
Ernai[: tlu,alker/0idahopolver.com
John Reuter
Site Based Energy
2l Comet Lane
P.O. Box 3432
Hailey,ID 83333
h,mail : J ohnrTi)si tebasede ners\'.cont
ll :\WDOX\CLl ENTS\ I 343\000 | $00-s88 l8.DOC
tr .rU.S. Mail/PostagePaid:-/W E-Mail
tr Telecopy (F-ax)
tr Overnight Mail
IDAHO IRRIGATION PUMPERS ASSOCIATION, INC.'S COMMENTS IN SUPPORT - 8