20170829final_order_no_33858_reconsideration.pdf

Office of the Secretary
Service Date
August 29,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF )
IDAHO POWER COMPANY FOR A )CASE NO.IPC-E-17-O1
DECLARATORY ORDER REGARDING )
PROPER CONTRACT TERMS,)
CONDITIONS,AND AVOIDED COST )
PRICING FOR BATTERY STORAGE )ORDER NO.33858
FACILITIES )
On February 27,2017,Idaho Power Company asked the Commission for a
declaratory order regarding proper contract terms,conditions,and avoided cost pricing for five
battery storage facilities requesting contracts under the Public Utility Regulatory Policies Act of
1978 (PURPA).See Order No.33729.The Commission issued Final Order No.33785 that
granted Idaho Power’s request.Franklin Energy Storage Projects (Franklin)timely petitioned
the Commission to reconsider the Final Order,and Idaho Power timely answered Franklin’s
Petition.With this Order,we find that Franklin has failed to meet its burden of showing
reconsideration is warranted,and deny Franklin’s Petition.
PETITIONS FOR RECONSIDERATION
Reconsideration provides an opportunity for a party to bring to the Commission’s
attention any issue previously determined,and thereby affords the Commission an opportunity to
correct any mistake or omission.Washington Water Power Co.v.Kootenai Environmental
Alliance,99 Idaho 875,591 P.2d 122 (1979).Under Commission Rule 331.01,“Petitions for
reconsideration must set forth specifically the ground or grounds why the petitioner contends that
the order or any issue decided in the order is unreasonable,unlawful,erroneous or not in
conformity with the law....”IDAPA 31.01.01.331.01.
FRANKLIN’S PETITION FOR RECONSIDERATION
Franklin’s Petition asked the Commission to reverse the Final Order and deny Idaho
Power’s request for declaratory relief because parts of the Final Order are “mistaken,
unreasonable,unlawful,erroneous,and not in conformity with the law.”Franklin Petition at 1,
10.Franklin argued that,while the Commission conceded that battery storage facilities’
qualifying facility (QF)status is a matter within the Federal Energy Regulatory Commission’s
(FERC’s)jurisdiction,the Commission nevertheless determined that “energy storage QF
ORDER NO.33858 1
facilities that use solar power as a primary energy input are,in fact,[s]olar QFs and not energy
storage QFs,”intruding on FERC’s jurisdiction.Id.at 3,6.
According to Franklin,the Commission erred,in part due to its misreading of FERC’s
Luz decision.Id.at 8 (referring to Luz Development and Finance Corp.,51 FERC ¶61,078
(1990)).Franklin asserted that in Luz,FERC ruled that energy storage facilities are QFs,so long
as they meet the fuel-use criteria and other requirements for QF status.Id.at 9.Franklin further
asserted that in Luz,FERC looked to the primary energy source behind the storage system to
confirm that the storage system is a QF but did not consider the primary energy source to be the
QF.Id.Franklin claimed this Commission found that “an energy storage facility’s primary
source of energy is the QF and not the storage facility itself.”Id.at 6.
Franklin therefore argued that the Commission exceeded its jurisdiction under
PURPA by granting Idaho Power’s request for relief and “illegally finding that energy storage
facilities that use solar power to charge the underlying storage devices are not energy storage
QFs,but are instead solar QFs.”Id.at 10 (quoting Jndep.Energy Producers Ass ‘n v.California
Pub.Util.Comm ‘n,36 F.3d 848,856 (9th Cir.1994)).
IDAHO POWER’S ANSWER
Idaho Power asserted that Franklin’s “sole basis of error”was “that the Commission
improperly made a determination as to the [QFJ status of the Franklin”projects.Idaho Power
Answer to Petition for Reconsideration (Idaho Power Answer)at 2.Idaho Power contended
Franklin’s argument is incorrect.According to Idaho Power,the Commission (in Final Order
No.33785)determined the proposed battery storage facilities’proper avoided cost rate and
contract term,not their QF status,which the Commission expressly accepted as undisputed for
purposes of the case.Id.at 2-4.The Company also noted that the Commission has the exclusive
jurisdiction to determine proper avoided cost rates and contractual terms as applied to the battery
storage facilities,which is what the Commission did in the Final Order.Id.at 3-4.Because the
Final Order was based upon substantial and competent evidence in the record,and the
Commission regularly pursued its authority and acted within its discretion,Idaho Power asked
that the Commission deny Franklin’s Petition.Id.at 5.
COMMISSION DISCUSSION AND FINDINGS
Franklin argues that the Final Order is “unreasonable,unlawful,erroneous or not in
conformity with the law”and should be reconsidered because it infringed on FERC’s jurisdiction
ORDER NO,33858 2
to determine QF status.Franklin’s only legal authority for its argument is Indep.Energy
Producers.36 F.3d at 856.in which the Ninth Circuit Court of Appeals opined that the authority
to make QF status determinations belongs to FERC,not the states.Franklin asserts that,contrary
to Indep.Energy Producers,we determined the QF status of battery storage facilities in the Final
Order.We did not.Franklin’s mischaracterization of our Final Order is a frivolous effort to
contrive a legal basis for reconsideration.
Franklin contends we determined that the primary energy source behind a battery
storage QF is the QF,based on a misreading of FERC’s decision in Luz Development and
Finance Corporation,51 FERC 61,078.Franklin Petition at 9.This Commission did not find
that the primary energy source behind a battery is the QF,nor did we assert that Luz stands for
such a proposition.In the Final Order,we explicitly recognized that “battery storage facilities’
QF status is a matter within FERC’s jurisdiction”and we acknowledged the self-certifications of
Franklin’s QFs.Final Order No.33785 at 3,10-11.Consistent with FERC’s analysis in Luz,we
looked to the primary energy source of Franklin’s battery storage QFs to determine the projects’
eligibility to particular avoided cost rates and contract terms.
It is well-established that state commissions such as this Commission have broad
discretion and authority to establish and approve the terms and conditions of PURPA contracts,
in implementing FERC rules.16 U.S.C.§824a-3(f)(l)(“each State regulatory authority shall
implement such rule (or revised rule)for each electric utility for which it has ratemaking
authority”);Indep.Energy Producers,36 F.3d at 856 (noting state commissions’broad authority
to implement PURPA);see also Portland General Electric Co.v.FERC,854 F.3d 692,(D.C.
Cir.2017);Idaho Power Company v.Idaho Pub.Util.Comm.,155 Idaho 780,782,316 P.3d
1278,1280 (2013):FERC v.Mississippi,456 U.S.742,751 (1982).Pursuant to such authority,
and consistent with FERC’s reasoning in Luz,we concluded that Franklin was eligible for two-
year contracts at negotiated avoided cost rates.Final Order No.33785 at 12.Franklin failed to
show that Final Order No.33785,or any issue in it,is unreasonable,unlawful,erroneous or not
in conformity with the law.We thus deny Franklin’s Petition.
ORDER
IT IS HEREBY ORDERED that Franklin’s Petition for Reconsideration is denied.
THIS IS A FLNAL ORDER DENYfNG RECONSIDERATION.Any party
aggrieved by this Order or other final or interlocutory Orders previously issued in this Case No.
ORDER NO.33858
IPC-E-17-01 may appeal to the Supreme Court of Idaho pursuant to the Public Utilities Law and
the Idaho Appellate Rules.See Idaho Code §6 1-627.
/‘
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of August 2017.
ATTEST:
Diane M.Hanian
Commission Secretary
0:IPC-E-17-01 dh4 Reconsideration
;IONER
ERIC ANDERSON,COMMISSIONER
ORDER NO.33858 4