20140228Movants Request and Reply.pdf

Peter J. Richardson (ISB No. 3195) : =
Richardson Adams, PLLCs;N.2/ i;;;", ,, i' r,, ,. I j i,:: t?: tj i
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter@richardsonadams. com
Attorney for Cold Springs Windfarm, LLC; Desert Meadow Windfarm, LLC;
Hammett Hill Windfarm,LLC; Mainline Windfarm, LLC;
Ryegrass Windfarm, LLC; and Two Ponds Windfarm, LLC
Gregory M. Adams (ISB No. 7454)
Richardson Adams, PLLC
515 N.27th Street
Boise,Idaho 83702
Telephone: [phone]
Fax: [phone]
sre g@richardsonadams. com
Attorney for Cassia Wind Farm LLC; Hot Springs Windfarm,LLC;
Bennett Creek Windfarm, LLC; Cassia Gulch Wind Park LLC;
Tuana Springs Energy, LLC; and High Mesa Energy, LLC
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF APPLICATION OF ) IPC.P,-TI.ZZ
IDAHO POWER COMPANY TO UPDATE ITS )
wrND TNTEGRATTON RATES AND I rvrOVnNTS REQUEST FOR LEAVECHARGES i TO F'ILE REPLY AND MOVANTS', REPLY IN SUPPORT OF MOTION
TO DISMISS
I. INTRODUCTION
Cold Springs Windfarm,LLc, Desert Meadow Windfarm, LLC, Hammett Hill
Windfarm, LLC, Mainline Windfarm,LLc, Ryegrass Windfarm, LLC, Two Ponds Windfarm,
LLC, Cassia Wind Farm LLC, Hot Springs Windfarm,LLc, Bennett Creek Windfarm, LLC,
REPLY IN SUPPORT OF MOTION TO DTSMISS
rPC-E-13-22
PAGE I
Cassia Gulch Wind Park LLC, Tuana Springs Energy, LLC, and High Mesa Energy, LLC
(collectively "Movants") hereby request that the ldaho Public Utilities Commission ("IPUC" or
"Commission") accept and consider this Reply to Idaho Power Company's ("Idaho Power" or
the "Company") Answer to Movants' Motion to Dismiss. As explained below, Idaho Power has
pointed to no credible reason or legal basis why the Commission should consider its request to
unilaterally modify the terms in Movants' contractual legally enforceable obligations, and the
applicable procedural rules therefore support dismissal at this time. In fact, any action short of
that requested by Movants would endorse Idaho Power's ongoing efforts to subject the rates in
Movants' fixed-price Firm Energy Sales Agreements ("FESA") to utility-type regulation barred
by the Public Utility Regulatory Policies Act of 1978 ("PURPA").
II. REQUEST FORLEAVE TO REPLY
The applicable rules do not expressly provide for, or prohibit, a reply to an answer to a
motion to dismiss. See IPUC Rules of Procedure ("RP") 56,256. However, the Commission has
recently accepted a responsive pleading to an answer to a motion to dismiss. See In re Petition
of J.R. Simplot Co. for a Determination of Price Regarding the Purchase and Acquisition of
Certain Assets Owned by ldaho Power Co., IPUC Case No. IPC-E-13-17, Order No. 32970 at 4
(2013) (discussing Idaho Power's "supplemental" filing made in response to an answer to Idaho
Power's motion to dismiss). Movants respectfully request that the Commission accept and
consider this Reply made within a week of Idaho Power's Answer because it will clarify the
issues before the Commission and not unduly delay a decision. Further, without an opportunity
to reply, Movants would be left without the opportunity to address new arguments in ldaho
Power's Answer.
REPLY IN SUPPORT OF MOTION TO DISMISS
rPC-E-13-22
PAGE 2
III. REPLY ARGUMENT
A. PURPA Bars ldaho Power's Attempt to Subject the Rates in Movants' Contractual
Legally Enforceable Obligations to Routine Commission Proceedings.
Idaho Power's Answer fundamentally misunderstands PURPA. Idaho Power suggests
that proceedings to revaluate the rates in fixed-price PURPA contracts are "expected and
routine." See Answer at 6. Movants disagree. PURPA unquestionably conflicts with, and
therefore preempts, such ongoing utility-type proceedings to reexamine the fixed prices in
Movants' FESAs. See, e.g., l6 U.S.C. $ 82aa-3(b) and (e)(l); l8 C.F.R. $$ 292.304(b)(5),
(d)(2xii), -292.602; Ind. Energt Prod. Ass'n, Inc. v. Cal. Pub. Util. Comm'n,36F.3d 848, 857-
58 (9th Cir. 1994); Freehold Cogeneration Assoc., L.P. v. Bd. of Reg. Com'rs of State of N.J.,44
F.3d 1178, 1194 (3rd Cir. 1995). Idaho Power has not even cited, let alone attempted to
distinguish, these controlling authorities.
The Commission itself ruled that fixed-price PURPA contracts are not subject to revision
long before the leading federal authorities even reached the issue. In 1985, the Commission
declared, "Notrvithstanding ldaho Power's arguments, it has been this Commission's consistent
position that federal law requires that [cogeneration and small power production facilities] are
entitled to fixed-term, fixed-rate agreements." See In re Complaint of Bonneville Pacific Corp.
et al., IPUC Case Nos. U-1006-249, U-1006-256, U-I006-259,U-1006-260, U-1006-261,U-
1006-262,U-1006-263, Order No. 19837 (1985). The Commission further rejected Idaho
Power's reliance on ldaho Supreme Court's then-recent Afton line of decisions, explaining,
"There was nothing therein that ruled that the Commission has jurisdiction to revise these
agreements." Id. This Commission precedent has remained unchanged for three decades, and
there is no basis to depart from it.
REPLY TN SUPPORT OF MOTION TO DISMTSS
IPC-E-13-22
PAGE 3
Despite Idatro Power's contention, Movants' accurately cited the holdings from multiple
federal courts that have enjoined state administrative proceedings that conflicted with, and were
thus preempted by, federal statutes. In the cases cited by Movants, federal courts determined that
a challenge to a state proceeding was ripe to be enjoined by the federal courts prior to the time
that it had progressed to its conclusion. See Pub. Util. Comm'n v. United Fuel Gas Co., 317 U.S.
456,465,470(1943);FreeholdCogenerationAssoc., L.P.,44 F.3dat 1189; Sayles HydroAssoc.
v. Maughan, 985 F.2d 451,454 (9th Cir.1993); Middle South Energl, Inc. v. Ark. Pub. Serv.
Comm'n, 772 F .2d, 404, 412-13 ,41 8 (8th Cir. 1 985). Idaho Power is wrong to claim these cases
were not based in preemption. See Answer at 5. Each cited case held that a state proceeding was
preempted or otherwise barred by federal law. That the courts also ruled that an injunction could
issue from a federal court prior to the conclusion of a state proceeding does not nulliff the
underlying holding of preemption. In this case, just as in Freehold Cogeneration Assoc., L.P.,
the immediate harm is that denial of the Motion to Dismiss will subject Movants' FESAs to a
utility+ype re-examination of the avoided cost rates contained therein. PURPA bars such utility-
type regulation.
Idaho Power's attempts to explain away its request as legitimate are wholly unavailing.
Although ldaho Power argues that its request to adjust the rates in Movants' FESAs is only one
of three recommendations ldaho Power's Application sets forth, Idaho Power has not withdrawn
the request to unilaterally modifu the rates in existing FESAs. Moreover, Idaho Power explicitly
requested "two specific changes." See Answer at 8 ("Change One: abandon the use of
percentage of avoided cost rate allocation and instead allocate a fixed amount based upon
penetration level; Change Two: decouple the wind integration charge from the avoided cost rate
REPLY IN SUPPORT OF MOTION TO DISMISS
rPC-E-t3-22
PAGE 4
contained in the power sales agreement and instead have wind integration costs assessed as a
stand-alone tariff charge."). Idaho Power has provided no assurance its requests will leave
Movants unaffected. Movants cannot simply ignore tdaho Power's request to modiff their
FESAs, and instead would need to participate in a preempted proceeding if the Motion to
Dismiss is not granted, at a considerable cost. Idaho Power also contends that granting the
Motion to Dismiss would cause undue delays. However, any delay would result purely from
Idaho Power's decision to force Movants into this docket by recommending the Commission
should approve Idatro Power's request to unilaterally modifr Movants' FESAs.
In short, Idaho Power has presented no credible support for its claim that updates to wind
integration rates or any other aspect of Movants' fixed avoided cost rates should be "expected
and routine." To the contrary, the administrative process itself imposes an illegal burden on
Movants, and the Commission should therefore grant the Motion to Dismiss.
B. Dismissal of ldaho Power's Application Is Procedurally Proper.
Instead of meaningfully addressing the Movants' right under PURPA to be relieved of
this proceeding, Idaho Power focuses heavily on procedural arguments. According to Idaho
Power, Movants must bear the burden of adjudicating the remainder of this "routine" proceeding
to re-examine the fixed prices in Movants' FESAs, even though the Commission has no
authority to adjust Movants' fixed-price FESAs. Movants disagree. The applicable procedural
rules support, and indeed compel, dismissal at this time.
1. The Commission's Rules of Procedure support dismissal at this time.
Idaho Power relies heavily on its contention that the court rules prohibit the Commission
from granting the Motion to Dismiss. In doing so, Idaho Power overlooks that Movants have
REPLY IN SUPPORT OF MOTION TO DTSMISS
TPC-E-T3-22
PAGE 5
properly cited and relied upon IPUC RP 56 and256, which plainly support dismissal. See
Motion to Dismiss at 1,9 n.4. The court rules, upon which Idaho Power bases its position, do
notbindthe Commission. See McNeal v. Idaho Pub. Util. Comm'n,l42ldaho 685,690,I32
P.3d 442" 477 (2006), abrogated on other grounds by Verska v. Saint Alphonsus Regional
MedicalCenter,151Idaho889,895,265P.3d502,508(2011). InMcNeal,theappellantfroma
Commission proceeding argued that the Commission had erred by failing to adhere to the Idaho
Rules of Civil Procedure. The Idaho Supreme Court held that the Commission has its own rules
and therefore rejected this argument. Id. In the words of the Court, the "claim for application of
the Rules of Civil Procedure in the Commission is without meit." Id.
ln this case, in addition to citing ldaho R. Civ. Pro. 12(c), Movants filed their motion to
dismiss under IPUC RP 56 and256. Those Commission rules plainly provide for dismissal. For
example, in a recent decision, the Commission considered a customer's application to determine
the appropriate price at which Idaho Power should sell utility property to the customer. See In re
Petition of J.R. Simplot Co. for a Determination of Price Regarding the Purchase and
Acquisition of Certain Assets Owned by ldaho Power Co., IPUC Case No. IPC-E-13-17, Order
No. 32970 at 6 (2013). Without mentioning the Idaho Rules of Civil Procedure, the Commission
granted Idatro Power's motion to dismiss, stating "we grant Idaho Power's Motion to Dismiss
based on the Commission's lack ofjurisdiction to compel the Company to sell its property." 1d
at 6. The Commission reasoned, "A valuation of the property by the Commission is meaningless
if the Company is unwilling to sell at anything less than its stated pnce." Id.
The same result flows from application of the Commission's rules in this case. Idaho
Power has provided no credible basis for the Commission's authority to alter the terms or rates in
REPLY IN SUPPORT OF MOTION TO DISMISS
rPC-E-13-22
PAGE 6
Movants' FESAs. Nor has tdaho Power pointed to any further factual or evidentiary dispute that
might lead to a conclusion the Commission possesses such authority. Movants do not challenge
the right of ldaho Power or the Commission to update its system analysis, the costs on the system
or how it allocates such costs to new projects, provided such analysis complies with legally
enforceable contractual obligations and the law. However, engaging in a valuation of the current
wind integration charge which ldaho Power proposes to apply to Movants' FESAs would be a
meaningless waste of resources for the Commission and Movants because Movants have not
consented to changing the terms of their FESAs or to sell their output at anything less than the
price stated therein. The Commission should grant the Motion to Dismiss by applying its own
procedural rules and recent precedent.
2. Even if court rules applied to the Motion to Dismiss, dismissal is still proper.
Idaho Power claims that Movants improperly cited Idaho R. Civ. Pro. l2(c), as the most
analogous court rule the Commission could apply to a preemption argument. However, to the
extent that the Commission looks to court rules, Rule l2(c) is the proper rule that governs a
motion to dismiss relying upon preemption. See Helman v. Alcoa Global Fasteners, lnc.,637
F.3d 986, g8S-9219ft Cir. 2011) (affirming dismissal under Fed. R. Civ. Pro. l2(c) on
preemption grounds); Fisher v. Halliburton, 667 F .3d 602,609 (5th Cir.2012) ("a defendant
should ordinarily raise preemption in a Rule 12(c) motion for judgment on the pleadings or a
Rule 56 motion for summary judgment").I
Idaho Power also argues that the summary judgment rule controls. While Movants agree
I Movants titled their Motion a o'motion to dismiss" instead of a "motion for judgment on the
pleadings" because, as noted above, a motion to dismiss is proper under the Commission's rules and
precedent, which do not specifu motions forjudgment on the pleadings.
REPLY IN SUPPORT OF MOTION TO DISMISS
IPC-E-L3-22
PAGE 7
that courts generally treat a Rule 12(c) motion similarly to a motion for summary judgment, the
result is the same in this case. Under the summary judgment rule, the nonmoving party cannot
rest upon mere speculation and must submit more than just conclusory assertions that an issue of
material fact exists to withstand summary judgment. See Cantwell v. City of Boise, 146 Idaho
127,133,191 P.3d 205,21I (2008). Here, Idaho Power has pointed to no factual disputes that
preclude dismissal at this time. The question is purely legal. Thus, even if the Commission
chooses to apply the summary judgment rule, there is no genuine issue of material fact that
PURPA bars Idaho Power's proposed re-examination of Movants' fixed-price avoided cost rates.
ry. CONCLUSION
Idaho Power mis-states Movants' motivation for intervening and filing a Motion to
Dismiss, by asserting:
The intervenors in this proceeding are unabashedly concemed with only two
things: (l) promoting the unlimited development of additional wind generation
and (2) maximizing the potential revenue to their own individual projects -
regardless of the effects upon the rest of the bulk system or the many other
customers of the utility.
Answer at 1 l. Movants have no current interest in the development of additional wind
generation in Idaho. Nevertheless, Idaho Power's proposals, including the Application, which
target wind QFs in order to unilaterally amend signed and approved contracts, have a chilling
effect on long-term investment by prominent and reputable investors, which does not serve the
long-term interests of electricity consumers in ldaho. Secondly, the Movants will support
initiatives to improve system reliability and customer satisfaction, provided such initiatives
comply with contractual legally enforceable obligations and consider the interests of all
stakeholders. The terms of Movants' FESAs were determined by tdaho Power and approved by
REPLY IN SUPPORT OF MOTION TO DISMISS
LPC-E-I3-22
PAGE 8
the Commission, and Movants are simply complying with the terms set forth therein. Movants'
primary motivation is to preserve the terms and economic balance of the FESAs over the full
term, as they were stipulated to and agreed to by Idaho Power and approved by the Commission
- which established the basis for substantial investments in the State of ldaho. Furthermore,
Movants would like the Commission to discourage Idaho Power from engaging in what is
becoming a pattern of repeated attempts to directly or indirectly oomove the goal posts" as this has
substantial direct and indirect costs to Movants and the sector.
For the reasons set forth herein and in the Motion to Dismiss, Movants respectfully
maintain that the Commission should issue the following relief:
The Commission should dismiss Idaho Power's Application in its entirety and allow the
Company to re-file an Application that does not recommend applying a new or updated
wind integration charge to existing contractual legally enforceable obligations.
Alternatively, at the bare minimum, the Commission should dismiss and strike from the
record the portions of Idaho Power's Application and testimony that recofllmend that the
Commission alter the rates and terms in existing contractual legally enforceable
obligations. Attachment I to the Motion to Dismiss is a copy of the Application that
demonstrates in strike-out the portions that should be stricken from the record.
Additionally, the following portions of the direct testimony should be stricken:
Youngblood, DI at p. 8 lns. 8-13, p. l1 lns. 5-9 and 15,p. 12lns. 8-13 and 19-22,p.19
ln.4 throughp.23ln. 10, Ex, Nos. 2,4;DeYol, DI at p.22lns.l-4.
REPLY IN SUPPORT OF MOTION TO DISMISS
IPC-E-T3-22
PAGE 9
o Finally, the Commission should instruct Idaho Power that efforts to unilaterally modift
existing contractual relationships with QFs are preempted and inconsistent with this
Commission's orders, and will not be entertained in this docket or any future dockets.
REPLY IN SUPPORT OF MOTION TO DISMISS
LPC-E-I3-22
PAGE IO
Respectfully submitted on February 28,2014.
REPLY IN SUPPORT OF MOTION TO DISMISS
rPC-E-t3-22
PAGE I I
RICHARDSON ADAMS, PLLC
Attorney for Cold Springs Windfarm, LLC;
Desert Meadow Windfarm, LLC; Hammett
Hill Windfarm, LLC; Mainline Windfarm,
LLC; Ryegrass Windfarm,LLC; and Two
Ponds Windfarm, LLC
Gregory M. Adams
Attorney for Cassia Wind Farm LLC; Hot
Springs Windfarm, LLC; Bennett Creek
Windfarm, LLC; Cassia Gulch Wind Park
LLC; Tuana Springs Energy, LLC; and High
Mesa Energy, LLC
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 28ft day of February , 2014, a true
and correct copy of the within and foregoing REPLY IN SUPPORT OF
MOTION TO DISMISS was served as shown to:
Jean Jewell X Hand Delivery
Commission Secretar5r
-
U.S. Mail, postage pre-paid
Idaho Public Utilities Commission - Facsimile
472 W Washington _ Electronic Mail
Boise lD 83702
i ean. i ewell@puc. id. sov
Kris Sasser X Hand Delivery
Deputy Attorney General
-
U.S. Mail, postage pre-paid
Idaho hrblic Utilities Commission - Facsimile
472 W Washington _ Electronic Mail
Boise ID 83702
kris. sasser@Fuc. idaho. eov
Donovan E Walker _ Hand Delivery
Idaho Power Company X U.S. Mail, postage pre-paid
PO Box 70 - Facsimile
Boise lD 83707-0070 Electronic Mail
dwalker@idahopower. com
dockets@idahopower. com
Michael J Youngblood _ Hand Delivery
Greg Said X U.S. Mail, postage pre-paid
Idaho Power Company - Facsimile
PO Box 7O Electronic Mail
Boise ID 83707-0070
myouneblood@idahopower. com
[e-mail]
Dean J Miller _ Hand Delivery
McDevitt & Miller LLP X U.S. Mail, postage pre-paid
42lO W Bannock Street - Facsimile
Boise lD 83702 Electronic Mail
Rick Koebbe, President
-
Hand Delivery
Idaho Winds LLC X U.S. Mail, postage pre-paid
5420 W Wicher Rd - Facsimile
Glenns Ferry ID 83623
-
Electronic Mail
[e-mail]
Ken Miller
Clean Enerry Program Director
Snake River Alliance
Box 1731
Boise ID 83701
kmiller@snakeriveralliance. orq
Benjamin G Huang
c/o Mountain Air Projects
6000 N Foxtail Way
Glenns Ferry ID 83623
Teresa A Hill
K&L Gates LLP
One SW Columbia St Ste 1900
Portland OR
teresa. hill@klsates. com
Dina M Dubson
Renewable Northwest Project
421 SW 6tr Ave Ste 1 125
Portland OR 97204
[e-mail]
Paul Ackerman
Exelon Business Services Corp
100 Constellation Way
Baltimore MD 21202
paul. ackerman@constellation. com
Deborah E Nelson
Preston N Carter
Givens Pursley LLP
PO Box 2720
Boise ID 83701
den@qivenspurslelr. com
prestoncarter@qivenpurslev. com
_ Hand DeliveryX U.S. Mail, postage pre-paid
_ Facsimile
_ Electronic Mail
_ Hand DeliveryX U.S. Mail, postage pre-paid
_ Facsimile
_ Electronic Mail
_ Hand DeliveryX U.S. Mail, postage pre-paid
_ Facsimile
_ Electronic Mail
_ Hand Delivery
X U.S. Mail, postage pre-paid
_ Facsimile
_ Electronic Mail
_ Hand DeliveryX U.S. Mail, postage pre-paid
_ Facsimile
_ Electronic Mail
_ Hand Delivery
X U.S. Mail, postage pre-paid
_ Facsimile
Electronic Mail
By:
Gregory M Adams