20150814Comments.pdf

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John Reuter
Site Based Energy Comments
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Site Based Energy submits these comments on behalf of the individua! Projects
affects by ldaho Power's Petition to the ldaho Public Utilities Commission
("Commission"). The common comments are not intended to infer the projects
are one common project, but rather have been prepared together in the interest
of time and to better respond to the petition, which aggregated the Projects.
Further, these comments were not prepared or reviewed by legal council and as
such are not intended to be a legal analysis or based on expert testimony.
Facts:
Site Based Energy is a residential and commercial building energy efficiency and
renewable energy design and installation company based in Ketchum, lD. We
assist individual clients with energy reduction measures and renewable energy
projects to reduce their energy costs. We provide design, permitting,
procurement, and installation services to our clients and advise them on the
options available for them with their local utility. Our geographic territory
includes Southern ldaho, Northern Utah, and Eastern Oregon. Our annual
revenues and employee count qualify us for the very small business designation
by the US Small Business Administration.
Site Based Energy submitted complete applications on behalf of 10 solar PV
projects with nameplate capacities of 100kW on June t5,'2Ot5. The names of the
individual projects are:
WRCE 1, WRCE 2, WRCE 3, WRCE 4, WRCE 5, WRCE 6, WRCE 7, WRCE 8, WRCE 9,
and WRCE 10 ("Projects").
Each project application included all required documentation per the published
tariff and ldaho Power application and have been included as part of ldaho
Power's initial filing in the IPC-E-15-18 petition.
On June 26,20L5, Site Based Energy received a l-page response from ldaho
Power acknowledging our application submittal on June 15th, 2015 and indicating
they were required to notify the applicant of any deficiency or indicative pricing
by June 29,20t5. The letter also indicated ldaho Power filed a petition with the
Commission on the same date, June 26th, 20L5. The letter did not include
indicative pricing and did notify Site Based Energy of any deficiencies in their
applications. The letter was attached as Exhibit 12 in ldaho Power's Petition.
As of the date of these comments, August t4,2Ot5,ldaho Power still has not
provided indicative pricing and still has not notified Site Based Energy or the
individual projects that they deem the applications to be deficient. lt has been 33
days from the date ldaho Power is required to provide indicative pricing or notify
the project owner of application deficiencies and 43 days since ldaho Power
received the project applications.
Each project application specifically stated they would meet FERC requirements to
be a Qualifying Facility (QF), have completely separate ownership, and would not
be located within 1 mile of another project owned by the same owner.
Per Site Based Energy's Response to Staff's First Request, each project will be
individually owned by completely separate owners that are individuals and
businesses with ties to the Wood River Valley in Blaine County, lD.
Site Based Energy has performed several early stage project related functions as a
consultant for the Projects, including site analysis, preliminary design and
engineering, land lease negotiations, and preparation of 100kW solar PV
applications submitted to ldaho Power.
The projects meet the requirements for Schedule 73 and provided a complete
application with the requirements outlined in Order 33197.
The Commission recently issued order 33253 as part of IPC-E-15-01 that finds "it
just and reasonable that the temporary five-year term limit not apply to new
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PURPA contracts eligible for published rates." ldaho Power's response "conceded
that its requested interim relief is limited to transactions with proposed QF
projects that exceed the published rate eligibility cap."
On July 2,20t5,ldaho Power filed IPC-E-15-20 to modify the first capacity deficit
for avoided cost calculations from July 2027 to June 2024.
The Projects have not changed materially since the
submitted.
application was
Proiect Historv:
Site Based Energy is a small ldaho business serving small and medium sized clients
primarily in ldaho to help them reduce their energy costs through cost effective
implementation of energy efficiency measures and renewable energy generation.
We are very active in the Wood River Valley with many renewable energy
installations currently in operation and several more under signed contract.
Recently, several of our clients have indicated they would like to own a system
that may not fit the requirements for on-site generation on their existing
properties or net metering. Reasons we have received vary, but commonly
include aesthetics, available non-shaded roof or ground space, homeowner
association requirements, financia! viability, and low energy consumption limiting
net metering size capacity.
Site Based Energy has familiarity with the options available for small-scale
renewable energy generation to receive payments for power produced in ldaho
Power's territory, net metering and Schedule 73. SBE proposed to these clients
that we could meet their goals by building several projects at the same time in the
same location and using ldaho Power Schedule 73 published rates as the ldaho
Power program that best met their needs. To keep costs low for each project
owner, we co-located the projects on a harvested gravel pit to utilize land with
low remaining value and enjoy economies of scale by building at the same time.
We then submitted complete applications on behalf of each project to ldaho
Power on June t5,20L5.
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On June 26rh,20L5, L business day before the projects were supposed to receive
indicative pricing, we received an email from ldaho Power that did not include
indicative pricing and did not indicate the Project's applications had deficiencies.
lnstead, it indicated ldaho Power was considering the 10 individua! projects to be
one single larger project with several inaccurate and incorrect assumptions. This
was the first and only response or contact SBE received from ldaho Power in
regards to the Projects.
Site Based Energy reached out to legal counsel to determine their options to
move forward, retained Joe Miller of McDevitt-Miller, and requested a meeting
with ldaho Power to provide additional information on the projects and answer
questions. We would note that ldaho Power still hadn't requested additional
information, noted the applications were deficient, or provided indicative pricing.
ln particular, we completely disagreed with ldaho Power's assumption and claim
that the projects were a disaggregated larger project. Our understanding of
disaggregation is having one large project owned by one entity disaggregating the
project into smaller projects to qualify for published rates. The key component is
having one owner breaking a project up to beat rules that govern larger projects.
During our meeting with ldaho Power, we explained that these were, in fact,
individual projects owned by completely separate owners that were co-building
with other project owners. Further, we indicated each project application should
be considered independently on its merits and if each project application were
considered on its own, it would meet the rules published by the PUC. I don't want
to divulge the details of that meeting due to the confidential nature of the
meeting, but our clients' primary goal was to get ldaho Power to pull their
petition since they had incorrect assumptions and conclusions regarding the
nature of the individual applications. ldaho Power declined that request and
indicated they wanted the Commission to provide a decision on their Petition.
As of the date of this filing, ldaho Power has not pulled their petition and still
hasn't provided any evidence to each project that they have deficiencies in their
application, or that they do not meet program requirements, and has not
provided indicative pricing.
Response to ldaho Power's Petition:
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ldaho Power's petition was based solely on the applications submitted to !daho
Power on June !5,2015 without any request for additional information sent to
the Projects.
It is outside of our experience to comment on their claims regarding contract
length, so we have limited our comments to refuting ldaho Power claims,
correcting incorrect assumptions, and pointing out inconsistencies.
On page 3 of the ldaho Power Petition:
"Contemporaneous with the filing of this Petition, ldaho Power sent its
response letter to Site Based Energy, as required within ten business days
of receipt of the Schedule 73 application, informing Site Based Energy of
this filing. See Attachment No. L2, attached hereto and incorporated herein
by this reference."
The language of thetariff does not require a response letter. !t requires indicative
pricing or a notice of deficiency. ldaho Power noted those required items but
provided neither.
On Page 3 of the Petition, ldaho Power's main argument for consideration of a
single larger project is the assumption that a single larger project has been
disaggregation into smaller projects. This is patently false and is not reflective of
the applications submitted. Each application is for an individual project, owned by
individual and separate owners. A similar scenario would be 10 homeowners with
homes adjacent to each other, or in the same neighborhood, that contracted with
a single solar installer to each install a solar PV array at the same time to get
better installation pricing from their installer.
On Page 3 of the ldaho Power Petition:
"Here, Site Based Energy has specifically designed and proposed its project-
disaggregated into 100 kW increments-in an attempt to avoid application of
the Commission's interim order limiting the maximum contract term to five
years."
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ldaho Power has made an incorrect and wild accusation in regards to the projects
intent without reaching out to the project owners to ascertain their intent. We've
shared with ldaho Power the project owner's intent during our in person meeting
and have also spoken to the project owners' intent in the Project History of these
comments. A similarly wild accusation Site Based Energy could make is that ldaho
Power does not want to comply with the Commission rules and orders and has
filed this petition to delay and obstruct Projects that they know comply with the
current commission approved tariffs and issued orders with the intent of killing
the projects and setting precedent that ldaho Power will not act in good faith in
the future as a means of hindering future project applications by other parties.
On Page 4, ldaho Power notes the projects are located on contiguous property.
This is irrelevant to the petition's request for judgment as each project will be on
it's own property and each owner will not own more than one project at the same
site. Site Based Energy is not aware of any FERC or Commission rules regarding
the proximity of separately owned projects as long as different parties separately
own each projects.
On Page 4, ldaho Power notes they have not been provided with evidence of
separate ownership for the Projects. As noted, ldaho Power did not and has not
requested this information. ln addition, evidence of ownership is not required in
Schedule 73 or the application. lf ldaho Power had asked, we would have supplied
information on ownership and during our meeting we indicated that each project
would have a separate owner listed on the ESA at the time of execution.
Harm to the Proiects:
Based Energy feels the burden placed on Projects through ldaho Power actions
should be part of the record, even if they do not directly address the petition. The
reason for this is the continued ldaho Power practice of failing to negotiate or
work with counterparties for PURPA related issues prior to filing Petitions with
the Commission. Recent examples include net metering, PURPA term limits (ldaho
Power did let parties know their were filing a Petition but did not negotiate or
release details beforehand), and this Petition. lt is our hope that we can continue
to comply with existing rules and regulations without having to expect every
action wi!! result in unilateral ldaho Power actions at the Commission requiring
capital constrained private companies to participate in a lengthily, costly process
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with no chance for recovery of the funds we expend to participate. This is
especially true when the counterparty, ldaho Power, is one of the largest private
companies in the state of !daho with in-house legal, in house experts, lobbyists,
and the ability to cost recover from rate payers for expenses related to cases such
as this. lf there ever were a David vs. Goliath moment, it would be 10 individual
project owners with relatively small individual Projects facing off against a publicly
traded, entrenched utility with relatively unlimited resources.
Significant harm to the Projects have resulted from the ldaho Power petition,
both in short term monetary terms, time to completion terms, internal man-
hours, and long term project economics. The harm to the projects can be broken
down into three categories: Contract Delay, Burden on the Projects to respond to
the Petition, and long term financia! harm to the Projects
The Petition has caused a delay in the Project's ability to receive indicative pricing
and execute a contract. This has cause the Projects to suspend the
interconnection process, design and permitting efforts, and has caused the
Project completion deadline to be extended by at least 2 months. The funds and
man-hours spent to date are considered sunk costs and the ability to meet Project
deadlines has been severely challenged.
The Petition has unduly burdened the Projects by requiring a response to ensure
the record is complete and accurate. The burden has primarily been financial;
both in external costs and internal costs that we estimate will total approximately
St5,000 by the time the Petition process is complete, which we can not recover,
even in the event the Commission orders the projects qualify for 20 year terms.
Further, the Petition has burdened Site Based Energy by forcing Site Based Energy
to expose components of our business model and operations that our
competitors will likely use to their advantage.
The long term financial harm to the project is due to the impact on the rates the
Projects could have received if indicative pricing were given on June 29,20t5 and
the potentia! that these projects may not get built due to the delay until after
federa! tax credits expire at the end of 20\6.ldaho Power filed their petition to
change the capacity deficient deficit from July 2O2t to June 2024 on July 2,2015.
This will result in projects seeking SAR or IRP methodology to not receive payment
for capacity for an additional 2 years and 11 months. This will reduce the long-
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term financials for the Projects by approximately 30%in payments for the 35
months since it is extremely unlikely this case will be resolved before the capacity
period deficit petition is resolved and ldaho Power publishes new avoided costs
rate schedules. However, if ldaho Power had provided indicative pricing and
standard contracts were used, the Projects would have had executed contracts
before the capacity deficit changed. The second potential harm is the loss of
federal tax credits if the projects aren't completed by the end of 2016. Every
delay to a project causes the Projects to potentially miss the cut off and has a
direct burden of 30% to the projects.
Conclusion and Requests:
WRCE 1-10 have complied with all required rules required per Schedule 73 and
have submitted complete applications. Each project is a standalone project, is
completely separately owned, and is seeking a PURPA contract via Schedule 73
and requested non-levelized, non-fuel rate methodology with 20-year terms.
Further, WRCE 1-10 have not received either indicative pricing or a notice of
deficiency per the procedures outlined in Schedule 73 and have waited 43
business days from the date of application to the time of comment submittal.
ldaho Power has not provided any evidence that indicates any of the Projects
have not complied with current rules and procedures or that the applications
were incomplete. Further, they have refused to comply with the rules and
procedures and instead have filed a Petition with the Commission that unduly
burdens both the Projects as well as a very small ldaho based business, Site Based
Energy through delay.
The Projects request the Commission direct ldaho Power to immediately provide
indicative pricing with 20-year terms and to direct ldaho Power to act in good
faith and without further delay during contract negotiations.
Further, Site Based Energy request the Commission direct ldaho Power to
negotiate in good faith for projects that submit applications and seek clarification
for deficiencies or other misunderstandings before filing for relief with the
Commission in the future.
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Finally, both the Projects and Site Based Energy request an expedited decision
with clear order on these Projects so they may continue the contract negotiation
process.
8lt4lt5
John Reuter, Solar Director
Site Based Energy
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www. sitebasedenergv. comP.O. Box 3432 Hailey, lD 83333 208.928.7583