20170810Answer to Petition.pdf

SEffi*.
An IDACORP Company
DONOVAN E. WALKER
Lead Counsel
[e-mail]
August 10,2017
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-17-01
Contract Terms, Conditions, and Avoided Cost Pricing for Battery StorageFacilities ldaho Power Company's Answer to Petition for
Reconsideration
Dear Ms. Hanian
Enclosed for filing in the above matter please find an original and seven (7)
copies of ldaho Power Company's Answer to Petition for Reconsideration.
yours,
Donovan E. Walker
DEW:csb
Enclosures
P.O. Box 70 (83707)
1221 W. ldaho 5t.
Boise, lD 83702
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwa I ker@ id a h opowereom
IN THE MATTER OF THE PETITION OF
IDAHO POWER COMPANY FOR A
DECLARATORY ORDER REGARDI NG
PROPER CONTRACT TERMS,
CONDITIONS, AND AVOIDED COST
PRICING FOR BATTERY STORAGE
FACIL!TIES
CASE NO. IPC-E-17-01
IDAHO POWER COMPANY'S
ANSWER TO PETITION FOR
RECONSIDERATION
Attorney for ldaho Power Company
BEFORE THE !DAHO PUBLIC UTIL!T!ES COMMISSION
)
)
)
)
)
)
)
)
I. INTRODUCTION
ldaho Power Company ("ldaho Power" or "Company"), in accordance with ldaho
Code S 61-626 and RP 331.05, hereby submits this Answer to the Petition for
Reconsideration of final Order No. 33785 ("Petition") issued July 13, 2017, filed by
Franklin Energy Storage One, LLC (32 megawatts ("MW")); Franklin Energy Storage
Two, LLC (32 MW); Franklin Energy Storage Three, LLC (32 MW); and Franklin Energy
Storage Four, LLC (32 MW) (collectively referred to herein as "Franklin Energy Storage"
or "Franklin.")
Franklin Energy Storage fails to demonstrate that the ldaho Public Utilities
Commission's ("Commission") Order No. 33785 is unreasonable, unlaMul, erroneous,
IDAHO POWER COMPANY'S ANSWER TO PETITION FOR RECONSIDERATION . 1
or not in conformity with the law. RP 331.01. The Commission's Order No. 33785 is
based upon substantial and competent evidence in the record. The Commission
regularly pursued its authority and acted within its discretion. Consequently,
reconsideration should be denied.
II. ANSWER
Franklin Energy Storage's sole basis of error alleged in its Petition is based upon
the allegation that the Commission improperly made a determination as to the
Qualifying Facility ("QF") status of the Franklin Energy Storage projects. This is
incorrect, as demonstrated by the issue presented for declaratory ruling by ldaho
Power, as well as the express language to the contrary of Franklin's allegation from
Order No. 33785.
The Commission's determination in Order No. 33785 was what the proper
avoided cost rate and contract term is for the proposed battery storage facilities. Both
the Commission and ldaho Power recognized that the issue as to the validity of the
proposed battery storage facilities' QF status was an issue properly before the Federal
Energy Regulatory Commission ("FERC"), and not the Commission. ldaho Power
asked the Commission to determine the avoided cost rate eligibility and proper contract
term for the proposed battery storage facilities assuming the validity of the proposed
facilities' QF self-certifications, without waiving a challenge of the same before the
proper authority, FERC. ldaho Power's Petition for Declaratory Order states:
ldaho Power does not agree with the Proposed Battery
Storage Facilities' claims as to their QF status independent
of a cognizable associated generation resource, and this
Petition is without prejudice to ldaho Power's position before
FERC on the validity of the self-certifications. However, QF
status is within the exclusive jurisdiction and properly before
FERC, not this Commission, for determination. ldaho Power
does not seek from this Commission a determination as to
IDAHO POWER COMPANY'S ANSWER TO PETITION FOR RECONSIDERATION - 2
QF status with regard to the Proposed Battery Storage
Facilities. ldaho Power seeks a determination from the
Commission as to the proper avoided cost rates, as well as
the proper contractual terms and conditions applicable to the
Proposed Battery Storage Facilities Schedule 73 requests
for PURPA pricing and contracts. Although not conceding
any argument and advocacy to the contrary at FERC, for
purposes of the determination as to the rate eligibility
and contract term length for the Proposed Battery
Storage Facilities as reguested in this Petition, ldaho
Power does not dispute that the facilities are self-
certified QFs without respect to the validiU of fhose
self-certifications. The legal controversy or question for
the Commission is, under the facts presented by the
requests of the Proposed Battery Storage Facilities, whether
they are entitled to published avoided cost rates and 20-year
contract terms-or are instead entitled to the negotiated rate
and contracting procedures and two-year contract terms.
This is a determination that is within the exclusive jurisdiction
of this Commission.
Petition for Declaratory Order, pp. 6-7 (emphasis added).
The Commission noted this above stipulation in its Order stating, "ldaho Power
acknowledged that 'QF status is within the exclusive jurisdiction [of] and properly before
FERC'; thus for purposes of its Petition, the Company did not challenge the QF status of
Franklin and Black Mesa." Order No. 33785, p. 3 (citation omitted). Further, in the
Commission Findings and Decision section of Order No. 33785 the Commission stated:
Consequently, our ruling on the narrow declaratory issue
before us should not be read to presume that this
Commission deems battery storage to be a legitimate
qualifying facility eligible for the benefits of PURPA and
subject to the Act's implementing regulations under FERC.
The battery storage facilities' QF sfafus is a matter
within FERC'S jurisdiction and is not af r.ssue in this
case.
ld., p. 10-11 (emphasis added).
Additionally, the Commission has the exclusive jurisdiction and authority to
determine the proper avoided cost rates and contractual terms and conditions as
IDAHO POWER COMPANY'S ANSWER TO PETITION FOR RECONSIDERATION - 3
applied to the proposed battery storage facilities, and properly did so in Order No.
33785. The Commission stated, "Accordingly, we find it appropriate to base Franklin's
and Black Mesa's eligibility under PURPA on its primary energy source - solar. . .
We find that, as storage facilities with design capacities that will exceed 100 kW each
and with solar as their primary energy source, the projects are eligible for two-year,
negotiated (lRP methodology) contracts." ld., pp. 12-13. The Commission made no
determination as to Franklin Energy Storage's QF status. The Commission made a
determination as to what avoided cost rate and what contract term Franklin Energy
Storage is entitled to under the Public Utility Regulatory Policies Act of 1978 ("PURPA").
This determination, rather than making a determination as to their QF status as Franklin
now alleges on reconsideration, actually assumes they are validly self-certified QFs and
goes on to determine, assuming they are PURPA QFs, what the proper avoided cost
rate and contract term is for the proposed battery storage facilities.
III. CONCLUSION
ldaho Power requested that the Commission issue a declaratory order, without
prejudice to ldaho Power's position on the validity of the underlying self-certifications,
finding that the proposed battery storage facilities are subject to the same 100 kilowatt
("kW') published avoided cost rate eligibility cap applicable to wind and solar facilities.
More specifically, that the proper authorized avoided cost rate for battery storage
facilities, such as those proposed by Franklin Energy Storage One through Four and
Black Mesa Energy, as projects that exceed 100 kW nameplate capacity, is the
incremental cost lntegrated Resource Plan methodology with a maximum contract term
of two years.
The Commission expressly stated that it was not making a determination as to
the QF status of the proposed battery storage facilities, as that determination was within
IDAHO POWER COMPANY'S ANSWER TO PETITION FOR RECONSIDERATION - 4
the jurisdiction of FERC and was not at issue in this matter. Order No. 33785,p. 11.
The Commission has the exclusive jurisdiction and authority over the avoided cost rate
and contract term eligibility as applied to the proposed battery storage facilities under
PURPA for the state of ldaho. The Commission did not make any determination as to
the QF status, or as to the self-certification of QF status, of the proposed battery storage
facilities. The Commission's determination in Order No. 33785 was limited to the proper
avoided cost rate and contract term for Franklin Energy Storage and Black Mesa
Energy arising out of contract negotiations between ldaho Power and the proposed
battery storage facilities. Order No. 33785, p. 12.
Franklin Energy Storage has failed to demonstrate that the Commission's Order
No. 33785 is unreasonable, unlavvful, erroneous, or not in conformity with the law. RP
331.01. The Commission's Order No. 33785 is based upon substantial and competent
evidence in the record. The Commission regularly pursued its authority and acted
within its discretion. Consequently, ldaho Power respectfully requests that the
Commission deny Franklin Energy Storage's Petition for Reconsideration.
Respectfulty submitted this lOth day of August 2017.
DONOVAN E. WALKER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S ANSWER TO PETITION FOR RECONSIDERATION - 5
CERTIFICATE OF SERVICE
! HEREBY CERTIFY that on this l0th day of August 2017 I served a true and
correct copy of IDAHO POWER COMPANY'S ANSWER TO PETITION FOR
RECONSIDERATION upon the following named parties by the method indicated below,
and addressed to the following:
Commission Staff
Camille Christen
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
Franklin Energy Storage One through
Four, LLC
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
BIack Mesa Energy, LLC
Brian Lynch
Black Mesa Energy, LLC
P.O. Box2731
Palos Verdes, California 90274
ldaho Conseruation League
Benjamin J. Otto
ldaho Conservation League
710 North Sixth Street
P.O. Box 844
Boise, ldaho 83701
Sierra Glub
David Bender
Earthjustice
3916 Nakoma Road
Madison, Wisconsin 537 1 1
X Hand Detivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
IDAHO POWER COMPANY'S ANSWER TO PETITION FOR RECONSIDERATION - 6
Avista Corporation
Michael G. Andrea, Senior Counsel
Avista Corporation
1411 East Mission Avenue, MSC-33
Spokane, Washington 99202
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
, Legal AssC
IDAHO POWER COMPANY'S ANSWER TO PETITION FOR RECONSIDERATION - 7