20161122Reply Comments.pdf

DONOVAN E. WALKER
Lead Counsel
[e-mail]
November 22, 2016
VIA HAND DELIVERY
RECEI VED
ZOluNO\' 22 PM Li: 39
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-16-21
An IDACORP company
Jackpot Solar -Reply Comments of Idaho Power Company
Dear Ms. Jewell:
Enclosed for filing in the above matter please find an original and seven (7)
copies of the Reply Comments of Idaho Power Company.
DEW:csb
Enclosures
Donovan E. Walker
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorney for Idaho Power Company
RECEIVED
2016 rw i: 22 PM 4: 39
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF )
IDAHO POWER COMPANY FOR A ) CASE NO. IPC-E-16-21
DECLARATORY ORDER REGARDING )
PROPER AVOIDED COST PRICING ) REPLY COMMENTS OF IDAHO
FOR JACKPOT SOLAR ) POWER COMPANY _______________ )
Idaho Power Company ("Idaho Power" or "Company") hereby submits the
following Reply Comments pursuant to the Idaho Public Utilities Commission's
("Commission") Notice of Petition and Notice of Modified Procedure, Order No. 33619.
Jackpot Solar completely misconstrues not only the relevant Commission orders,
Order No. 33357 and Order No. 33419 on reconsideration, but also misconstrues its
own actions, which are contrary to the direct, express, and on-point findings of the
Commission. Both Rocky Mountain Power and Commission Staff ("Staff'') recognize in
their respective Comments Jackpot Solar's attempt to attack the plain language of the
Commission's orders, and the parties oppose the same-as does Idaho Power-as an
REPLY COMMENTS OF IDAHO POWER COMPANY - 1
impermissible collateral attack on a final, non-appealable Commission order.
Amazingly, Jackpot Solar attempts in its Comments to mislead the Commission by
claiming it is Idaho Power that is attempting to collaterally attack the Commission's final
orders, and additionally claims that a declaratory ruling is not appropriate. Idaho Power
filed the exchange of communications between Jackpot Solar and Idaho Power with its
Petition. Attachments 1-11. These communications speak for themselves and clearly
show that Idaho Power acted at all times in compliance with the Commission's orders
and its required Schedule 73 contracting process. The communications also clearly
show Jackpot Solar's aggressive insistence on its own wrongful interpretation of the
Commission's orders, ultimately threatening legal action against the Company.
Attachment 11 at 2-3.
As referenced and quoted by Idaho Power, Rocky Mountain Power, and Staff,
the Commission has directly addressed the arguments put forth by Jackpot Solar in a
dedicated subsection of its order on reconsideration. Order No. 33419 at 22-23
(Subsection C.2). The same argument insisted upon now by Jackpot Solar was put
forth in the Petition for Reconsideration of Order No. 33357 by counsel for Jackpot
Solar, who was at that time counsel for Clearwater Paper Corporation and J. R. Simplot
Company. That argument was directly and expressly rejected by the Commission. The
Commission's orders are clear. The utility's capacity deficiency is established at the
time of the Qualifying Facility's ("QF") initial contract. Order No. 33357 at 25-26
(assuming continuous operation and subsequent two-year contracts). The proper
avoided cost capacity rate is established at the start of each two-year contract term.
Order No. 33419 at 23. "A capacity rate calculated at the start of each specified term
REPLY COMMENTS OF IDAHO POWER COMPANY - 2
rather than upon a QF's initial contract, is a truer reflection of the utility's avoided cost
for capacity." Id.
Contrary to the confusing and misleading averments of Jackpot Solar, Idaho
Power does not seek any change, modification, or interpretation of the Commission's
orders. Idaho Power seeks a declaratory ruling as to the proper avoided cost pricing
applicable to Jackpot Solar's requests for Public Utility Regulatory Policies Act of 1978
("PURPA") QF contracts. As is clear from the communications contained in
Attachments 1-11, Idaho Power provided two-year indicative pricing in response to
Jackpot Solar's requests in compliance with the Commission's orders and Schedule 73.
Idaho Power also acknowledges the current first capacity deficit of July 2024.
Attachments 7 and 10. Jackpot Solar did not like such pricing and argued that it was
entitled to lock in avoided cost pricing beyond the two-year maximum term of the
contract. The Commission has addressed this issue directly in its order on
reconsideration, Order No. 33419: "A capacity rate calculated at the start of each
specified term rather than upon a QF's initial contract, is a truer reflection of the utility's
avoided cost for capacity." Order No. 33419 at 23.
The Commission is the appropriate authority to determine the proper avoided
cost pricing for Jackpot Solar's proposed QF contracts. It is Jackpot Solar that is
arguing for an application of avoided cost pricing contrary to the direct and express
findings of the Commission in directing the implementation of two-year maximum
contract terms. It is significant that Jackpot Solar is completely silent regarding the
Commission's direct findings related to this issue, and does not acknowledge, address,
or discuss Section C.2 from Order No. 33419 whatsoever. Contrary to the express,
decisive, and on-point Commission finding that a capacity rate is to be calculated at the
REPLY COMMENTS OF IDAHO POWER COMPANY - 3
start of each specified term rather than upon a QF's initial contract, Jackpot Solar's
entire argument and position is based upon an argument that one can interpret what the
Commission meant from the inclusion of the bracketed word "rates" into a quotation
from Order No. 33357 which appears in the "Background" section of the Commission's
order on reconsideration, Order No. 33419. Attachment 11 at 2; Jackpot Solar's
Comments at 7; Jackpot Solar's Reply at 2. As stated in Idaho Power's Petition, one
does not need to divine an interpretation of what the Commission meant from the
inclusion in a background recitation of "[rates]" into a quotation. The Commission
dedicated an entire subsection to directly addressing the issue raised, and in its
"Commission Findings" rejecting Jackpot Solar's interpretation, the Commission finds,
or rules, that capacity rates calculated at the start of each contract term, rather than
upon the QF's initial contract, is a truer reflection of the utility's avoided cost for
capacity. Order No. 33419 at 23. Jackpot Solar completely fails to acknowledge,
discuss, distinguish, or rebut these direct and express Commission Findings, which
negates its positions entirely. It is not only improper, but frivolous to argue for
interpretation of meaning by the inclusion of a bracketed word in the "Background"
section of an order when there is an entire section consisting of express language and
Commission Findings on-point and conclusive of the point at issue.
CONCLUSION
The Commission has directly addressed the issue raised by Jackpot Solar and
has made express, direct, and on-point Commission Findings that resolves the current
issue raised by Jackpot Solar regarding the proper avoided cost pricing for its proposed
projects. The Commission's orders are clear. The utility's capacity deficiency is
established at the time of the QF's initial contract, and the proper avoided cost capacity
REPLY COMMENTS OF IDAHO POWER COMPANY - 4
rate is established at the start of each two-year contract term. Order No. 33357 at
25-26; Order No. 33419 at 23. "A capacity rate calculated at the start of each specified
term rather than upon a QF's initial contract, is a truer reflection of the utility's avoided
cost for capacity." Id. The Commission is the proper authority to determine the correct
avoided cost rates for Jackpot Solar's proposed QF contracts. Unlike Jackpot Solar,
Idaho Power is not seeking any change, modification, or interpretation of Commission
orders. Idaho Power has acted in direct compliance with the express language of the
Commission's orders. Jackpot Solar has objected to the indicative pricing that Idaho
Power has provided pursuant to Order Nos. 33357 and 33419, and a declaratory order
determining the proper avoided cost pricing is appropriate.
Idaho Power respectfully requests that the Commission issue a declaratory order
finding that under the facts of Jackpot Solar's proposed PURPA QF transactions, the
proper avoided cost rate is determined at the start of each specified contract term rather
than upon a QF's initial contract. More specifically, Idaho Power seeks a declaratory
ruling from the Commission that the proper authorized avoided cost rate for a QF, such
as Jackpot Solar, when selecting rates determined at the time of contracting (as
opposed to rates determined at the time of delivery) is the avoided cost determined by
the incremental cost Integrated Resource Plan methodology at the beginning of each
two-year contractual term rather than upon a QF's initial contract and that the QF is not
entitled to lock in an avoided cost rate beyond the two-year maximum contractual term.
Respectfully submitted this 22"' day of£ c;_ ~
DONOVAN E. WALKER
Attorney for Idaho Power Company
REPLY COMMENTS OF IDAHO POWER COMPANY - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 22nd day of November 2016 I served a true and
correct copy of the within and foregoing REPLY COMMENTS OF IDAHO POWER
COMPANY upon the following named parties by the method indicated below, and
addressed to the following:
Commission Staff
Camille Christen
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-007 4
Jackpot Solar
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 2ih Street (83702)
P.O. Box 7218
Boise, Idaho 83707
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