20170515Reply Comments.pdf

DAPHNE HUANG
CAMILLE CHRISTEN
DEPUTY ATTORNEYS GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 3 34-03 t 8 I 334-03 1 4
IDAHO BAR NO. 8370110177
IN THE MATTER OF THE PETITION OF
IDAHO POWER COMPANY FOR A
DECLARATORY ORDER REGARDING
PROPER CONTRACT TERMS,
CONDITIONS, AND AVOIDED COST
PRICING FOR BATTERY STORAGE
F'ACILITIES
,ri - C i: i'/E Il
.:i, I ;;' ',' I S pil 3: 53
i ,-
l': l'a: i
Street Address for Express Mail:
472W. WASHINGTON
BOISE, IDAHO 83702-5918
Attomeys for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
)
)
)
)
)
)
)
CASE NO. IPC.E-17.01
REPLY COMMENTS OF
THE COMMISSION STAFF
On February 27,2017,Idaho Power Company filed a petition asking the Commission
to issue a declaratory order regarding proper contract terms, conditions, and avoided cost pricing
for five battery storage facilities that requested contracts under the Public Utility Regulatory
Policies Act of 1978 (PURPA). Consistent with its scheduling order, the Commission received
comments from the battery storage facilities, and then from Avista Corporation, Idaho Power,
Staff, and joint-intervenors Sierra Club and Idaho Conservation League (ICL). OrderNo. 33729;
see Order No. 33743 (granting intervention to Sierra Club and ICL). Commission Staff now
submit reply comments.
Staff Reply Comments
In its initial comments, Staff included a background section about PURPA, and a
summary of Idaho Power's petition in this matter, that are not repeated here.
ISTAFF REPLY COMMENTS MAY t5,20t7
l. Idaho Power's Comments
Idaho Power provided comments responding to those by Franklin and Black Mesa. In the
Company's comments, it states that a "Declaratory Judgment is within the Commission's
jurisdiction and authority and is necessary and proper in this case to resolve a real and substantial
controversy between the parties as to the proper avoided cost rate and contract terms and
conditions for the Proposed Battery Storage Facilities." Idaho Power Comments at 8. Staff s
comments are consistent with Idaho Power's position. The Company's other comments in
support of its requested relief reflect the arguments in its petition.
2. Avista's Comments
Avista Corporation supports Idaho Power's petition. In its comments, Avista states that
battery storage facilities "should be classified, and treated, in the same manner as the facilities
that provide the primary energy source for such battery storage facilities." Avista Comments at
5,3-4 (discussing Luz Development and Finance Corporatior,5l FERC P 61,078 (1990)). In
other words, battery storage facilities using wind or solar facilities as their primary energy source
should be treated as wind or solar QFs. Staff s comments, which recommended that the
published rate eligibility cap for the Franklin and Black Mesa facilities be determined based on
their energy sources, align with Avista's analysis.
If the Commission rejects the proposal to treat battery storage facilities in the same
manner as their primary energy source, then Avista recommends that the Commission "initiate a
generic proceeding to determine the appropriate treatment of such facilities." Id. at 5. Likewise,
given the broader implications of issues raised in this case, Staff recommended that the
Commission initiate a general investigation into the appropriate contract terms for other battery
storage QFs. Staff Comments at 11.
Finally, Avista recommends that the Commission put a "moratorium on energy storage
QFs with nameplate capacities above 100 kW to protect utility customers during [a generic]
proceeding." Avista Comments at 5-6. Staff would instead recommend that the Commission
allow energy storage QFs larger than 100 kW to enter PURPA contracts, but that it temporarily
set the threshold for published avoided cost rates for battery storage facilities at 100 kW, pending
the outcome of the generic proceeding. This would ensure that Idaho Power complies with its
2STAFF REPLY COMMENTS MAY 15,2017
obligation to purchase under PURPA while also protecting ratepayers by ensuring accurate
avoided cost rates.
3. Sierra Club's and ICL's Comments
Sierra Club and ICL oppose Idaho Power's petition, arguing that the Company is asking
to modifu prior Commission Order Nos. 32262 and33357, and that a petition for declaratory
order is therefore not the appropriate process. Sierra Club/ICL Comments at l-2. This latter
argument - that a petition for declaratory order is improper - relies entirely on the first argument
being true - that the Company's requested relief is actually modification of Commission orders.
Staff disagrees with this underlying assertion. Idaho Power's petition is a proper request to
resolve a legal dispute, and Sierra Club and ICL have not shown that the petition must instead be
construed as a request to modiff the Commission's orders.
The Idaho Supreme Court has recognized the Commission's authority to resolve legal
disputes with declaratory orders under the Uniform Declaratory Judgments Act,Idaho Code $$
10-1201 et seq. Utah Power & Light v. Idaho Pub. Util. Comm'n,ll2ldaho 10,12,730P.2d
930,932 (1986). The Company's petition here seeks relief under the Idaho Uniform Declaratory
Judgments Act,Idaho Code $$ 10-1201 et seq. Petition at 5. As discussed in Staff s comments,
the elements for a declaratory order are satisfied here: there is an o'acfual or justiciable," "real
and substantial," "definite and concrete" legal controversy between Idaho Power and the
Franklin and Black Mesa QFs regarding the terms that should apply to their PURPA contracts.
See Staff Comments at3,7.
Sierra Club and ICL assert that the Commission's "inherent, derivative" authority under
the Idaho Uniform Judgments Act "must yield to" the statutory process for "rescinding, altering
or amending prior orders" under ldaho Code $ 61,-624, because otherwise the procedures set
forth in ldaho Code $ 6l-624 "become superfluous." Sierra Club/ICL Comments at 3. Section
6I-624 provides that "The commission may at any time, upon notice to the public utility
affected, and after opportunity to be heard . . . rescind, alter or amend any order or decision made
by it." Idaho Code $ 6l-624. It is unclear how Idaho Power's petition for a declaratory order to
resolve its contractual dispute with QFs renders superfluous the Commission's power to modify
an order under Section 6l-624. Sierra Club and ICL offer no cogent explanation for their
argument.
JSTAFF REPLY COMMENTS MAY t5,2017
As discussed in Staff s Comments (and thus not repeated here), Idaho Power's legal
dispute with Franklin and Black Mesa can be resolved, consistent withFERC's analysis in Luz,
and with the Commission's OrderNos. 32262 and32176.r See Staff Comments at7-11. Thus
there is no reason - as Sierra Club and ICL contend - for Idaho Power to seek modification of
Order No.32262. More perplexing is Siena Club's and ICL's contention that Idaho Power's
petition seeks to modify Order No. 33357 regarding PURPA contract length. Sierra Club/ICL
Comments at l-2.
Order No. 33357 is the final order from consolidated proceedings before the Commission
on petitions by Idaho Power, Avista, and PacifiCorp, to shorten PURPA contract lengths for
projects with IRP-based avoided cost rates.2 Under the Commission's Order No. 33357, the
contract term for projects with IRP-based avoided cost rates is two years. The contract term for
projects eligible for published rates remains at twenty years. Order No. 33253.
If Franklin and Black Mesa are eligible for published rates under Order No. 32262, then
they would getZ}-year terms under Order No. 33357. If Franklin and Black Mesa are not
eligible for published rates under Order No.32262, then they would get two-year terms under
Order No. 33357. The parties may disagree about which published avoided cost rate eligibility
cap - 100 kW or l0 aMW - should apply under Order No.32262, but there is no dispute that,
under Order No. 33357, projects that are ineligible for published rates get two-year contract
terms. The issue of "whether to limit the length of contracts for battery storage facilities" is not
before the Commission in this case, thus there is no need for a hearing to address it, as
conditionally requested by Sierra Club and ICL. Siena Club/ICL Comments at 2.
Sierra Club's and ICL's remaining arguments challenge thevalidity of OrderNo. 33357.
Id, at 4-I9. Their challenge is plainly outside the issues raised by Idaho Power's petition -
which concern the proper published rate eligibility cap for the battery storage QFs - and is thus
beyond the scope of this case. In addition to exceeding the scope of this proceeding, Sierra
Club's and ICL's request to modifu Order No. 33357 is baned by ldaho Code $ 6l-625 which
precludes collateral attack on a Commission order that is final and conclusive.
I Order Nos. 32262 and 3217 6 addressed disaggregation of solar and wind projects by lowering the published
avoided cost rate eligibility caps for solar and wind projects.
2 Following a petition to reconsider Final Order No.33357, the Commission issued Order No. 33419.
4STAFF REPLY COMMENTS MAY I5,2OT7
The Commission's Order No. 33357 provided:
THIS IS A FINAL ORDER. Any party interested in this Order (or in issues
finally decided by this Order) or in interlocutory Orders previously issued in [this
case] may petition for reconsideration within twenty-one (21) days of the service
date of this Order with regard to any matter decided in this Order or in
interlocutory Orders previously issued in [this case].
OrderNo. 33357 at33. In OrderNo. 33419, the Commission provided:
THIS IS A FINAL ORDER ON RECONSIDERATION. Any party aggrieved by
this final Order on Reconsideration or other final or interlocutory Orders
previously issued in this Case . . . may appeal to the Supreme Court of Idaho
pursuant to the Public Utilities Law and the Idaho Appellate Rules.
Order No. 33419 at27. The time for reconsideration, appeal, or other challenge to either order,
entered August 20,2015 and November 5, 2015, respectively, has passed. Idaho Code
$$ 6l-626, 6l-627. The attempt by Sierra Club and ICL to bootstrap an otherwise
impermissible, late challenge to Order No. 33357 through Idaho Power's petition in this case
must be rejected.
Respecttully submiued this if O^rof May 2017.
Huang
Camille Christen
Deputy Attomeys General
Umisc/ReplyComments/ipce I 7. I djh
5STAFF REPLY COMMENTS MAY T5,2OI7
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 15TH DAY OF MAY 2017,
SERVED THE FOREGOING REPLY COMMENTS OF THE COMMISSION STAFF,
IN CASE NO. IPC.E.I7.OI, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
DONOVAN WALKER
LEAD COTJNSEL
IDAHO POWER COMPANY
PO BOX 70
BOrSE ID 83707-0070
E-mail : [e-mail]
dockets@id4hopower. com
BRIAN LYNCH
BLACK MESA ENERGY LLC
PO BOX 2731
PALOS VERDES CA9O274
E-mail: [e-mail]
DAVID BENDER
EARTHJUSTICE
3916 NAKOMA ROAD
MADISON WI 5371I
E-mail : [e-mail]
PETER J RICHARDSON
RICHARDSON ADAMS PLLC
5I5 N 27TH STREET
BOISE ID 83702
E-mail : peter@richardsonad?ms.com
BEN OTTO
ENERGY ASSOCIATE
ID CONSERVATION LEAGUE
PO BOX 844
BOISE ID 8370I
E-mail : [e-mail]
CERTIFICATE OF SERVICE