20161108Comments.pdf

Peter J. Richardson (ISB No. 3195)
515 N. 2ih Street
P.O. Box 7218
Boise, Idaho 83 702
Telephone: [phone] I
Fax: [phone]
[e-mail]
Attorney for Jackpot Solar1
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BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITION FOR
DECLARATORY ORDER REGARDING
PROPER A VOIDED COST PRICING FOR
JACKPOT SOLAR.
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CASE NO. IPC-E-16-21
JACKPOT SOLAR'S ANSWER AND
STATEMENT OF POSITION IN
OPPOSITION
COMES NOW, Jackpot Solar and, pursuant to this Commission's Order No. 33619,
issued on October 4, 2016, and pursuant to IPUC Rule of Procedure No. 57(02), and hereby
lodges its Answer and Statement of Position in Opposition to Idaho Power Company's ("Idaho
Power" or the "Company") Petition for Declaratory Order ("Petition").
BACKGROUND
Idaho Power has provided the Commission with copies of relevant correspondence
between Jackpot Solar and the Company. Jackpot Solar consists of four twenty-megawatt solar
Small Power Production Facilities that are Qualified Facilities pursuant to the Public Utility
1 Jackpot Solar refers collectively to Jackpot Solar West, LLC; Jackpot Solar East, LLC; Jackpot
Solar North LLC; and Jackpot Solar South, LLC, all of which are Nevada limited liability
companies duly qualified to do business in the State of Idaho.
Regulatory Policies Act of 1978, ("PURPA").2 All four projects have fully complied with the
Commission's recent orders dealing with various PURP A contract terms and conditions.3
Jackpot Solar has made several good faith attempts, in compliance with this Commission's
orders, to obtain two year contracts with appropriate deficit year/pricing from Idaho Power.
Unfortunately, Idaho Power has not made a good faith response. Idaho Power has deliberately
misconstrued the plain language in the Commission's orders as to the first deficit year rate
calculation.
Stated simply, Jackpot seeks to fully comply with the Commission's orders -including on
the issues of contract term and first deficit year and capacity rate calculation. Idaho Power, on
the other hand, seeks to rewrite the Commission's orders on these critical topics and thereby
dodge its obligations under PURP A. The Commission went to great lengths to craft orders that
accommodate both regulated electric utilities' concerns with PURPA and this Commission's
concurrent obligation, under federal law, to implement PURP A so as to actually encourage the
development of cogeneration and small power production facilities.
Congress enacted PURP A in 1978 to encourage states to develop alternative energy
sources, such as cogeneration and small power production facilities, in an effort to reduce this
country's dependence on traditional fossil fuels. See Federal Energy Regulatory Comm'm v.
Mississippi, 456 U.S. 742, 72 L. Ed. 2d 532, 102 S. Ct. 2126 (1982); New York v. United States,
505 U.S. 144, 161, 120 L. Ed. 2d 120, 141, 112 S. Ct. 2408, 2420 (1992); Independent Energy
Producers Ass'n, Inc. v. California Public Utilities Comm'n, 36 F.3d 848, 850 (9th Cir. 1994).
2 Jackpot Solar East, LLC -FERC Docket No. QFl 6-726; Jackpot Solar West, LLC -FERC
Docket No. QF16-727; Jackpot Solar South, LLC -FERC Docket No. QF15-604; and Jackpot
Solar North, LLC -FERC Docket No. 15-605.
3 Idaho Public Utilities Commission Docket Nos. IPC-E-15-01, AVU-E-15-01 and PAC-E-15-
03. Order Nos. 33357 and 33419 (on Reconsideration).
JACKPOT SOLAR'S ANSWER AND STATEMENT OF POSITION IN OPPOSITION - 2
The Federal Energy Regulatory Commission (FERC) exercises exclusive authority over
QF status determinations under PURP A. See Independent Energy Producers Ass'n, 36 F.3d at
853-54. In an effort to encourage development of alternative energy sources and to overcome the
reluctance of traditional utilities to buy from and sell to these alternative producers, Congress
granted QFs certain benefits. Under PURP A, QFs are exempt from certain regulatory controls
and are assured a market by being given the right to interconnect with local public utilities and to
receive favorable rates, prescribed by FERC, up to the full "avoided cost" of the utility. See
American Paper Institute, Inc. v. American Electric Power Service Corp., 461 U.S. 402, 404-06,
76 L. Ed. 2d 22, 27-29, 103 S. Ct. 1921, 1923-25 (1983).
Section 210(a) of PURPA (16 U.S.C. § 824a-3(a) (2000)) directs FERC to promulgate
rules requiring electric utilities such as Idaho Power Company to offer to sell and purchase
electric energy to and from QFs. Pursuant to section 210(a) of PURPA, a utility in need of
energy or capacity must offer to purchase from a cogenerator or small power producer that is a
QF. In tum, the QF may demand a price that is equal to, but not greater than, the utility's full
"avoided cost." See 16 U.S.C. §824a-3(b) (2000); 18 C.F.R. §292.304(b)(2) (2000). The
"avoided cost" is the incremental cost the utility would have incurred by either generating the
power itself or purchasing it from an alternative source other than a QF. 18 C.F.R. §
292.101(b)(6) (2000).
In short, this Commission has a continuing and undiminished obligation, pursuant to
federal law, to actively encourage the development of small power production facilities such as
the Jackpot Solar projects. In Order Nos. 33357 (the Commission's "initial" order) and 33419
(the Commission's order on reconsideration) the Commission established a process by which
QFs may obtain certainty as to the utility's first deficit year and the capacity rate associated with
JACKPOT SOLAR'S ANSWER AND STATEMENT OF POSITION IN OPPOSITION -3
that first deficit year. Idaho Power now seeks to erode the critical foundation in those orders by
restricting QFs to just the identity of the first deficit year without also identifying the capacity
rate associated with that first deficit year. It may not do so under Idaho law providing for
declaratory rulings.
IDAHO POWER'S PETITION FOR DECLARATORY RULING IS AN
IMPERMISSIBLE COLLATERAL ATTACK ON A FINAL COMMISSION ORDER
A. Final Commission Orders Are Not Subject to Collateral Attack
Idaho Code § 61-625 prohibits collateral attacks on prior Commission Orders. The
Commission Order on Reconsideration (Order No. 33419) was a final decision appealable to the
Supreme Court. See Order No. 33419 at p. 27.4 Idaho Power's remedy from the findings in this
Order was to seek judicial review. But the Company has not appealed. In Utah-Idaho Sugar v.
lntermountain Gas Company, the Idaho Supreme Court noted that final Orders on
Reconsideration should be challenged by appeal. 100 Idaho 368 , 597 P.2d 1058 (1979). "A
different rule would lead to endless consideration of matters previously presented to the
Commission and confusion about the effectiveness of Commission orders." Id. at 3 73-597 P .2d
at 1063-64. The Commission should not permit Idaho Power to collaterally attack the prior final
Order on Reconsideration in violation of Idaho Code §61-625 (final and conclusive decisions
shall not be attacked collaterally).
II
II
II
4 "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 Cout of Idaho Pursuant to the Public Utilities Law and Idaho
Appellate Rules ... "
JACKPOT SOLAR'S ANSWER AND STATEMENT OF POSITION IN OPPOSITION - 4
IDAHO POWER HAS NOT MET THE LEGAL ST AND ARD FOR A
DECLARATORY ORDER
A. There is No Uncertainty as to the Legal Rights of the Parties Under the
Commission's Final Order
Assuming, for the sake of argument, that Idaho Power's Petition is not a collateral attack
on a final Commission order, it nonetheless does not meet the standard for a declaratory order.
In support of its Petition, Idaho Power cites a single authority, a prior commission order (Order
No. 29580) that it claims discusses "its [the Commission's] role when considering a petition for
declaratory ruling." That order, however, does not address the question of the Commission's
role when considering a petition for declaratory orders; rather it simply speaks to an entirely
unrelated issue regarding a proposed agreement between two telecommunications providers. 5
That said, the Idaho Supreme Court has instructed that a state agency is limited in its ability to
issue a declaratory order to those situations where it is necessary to remove uncertainty as to
rights, status and legal relations. 6 Here there is no such necessity and no such uncertainty; the
Commission's orders are clear and conclusive. Thus, Idaho Power's Petition falls short of the
standard set by the Idaho Supreme Court relevant for the issuance of a declaratory order. The
Commission's decision on reconsideration in Order No. 33419 is res judicita and may not be
overturned in a declaratory order proceeding. Were the Commission to accept Idaho Power's
invitation to modify the order, such modification would violate the minimum due process rights
of all QFs and potential QFs who justifiably rely on the stability and integrity of the
Commission's orders.
5 In the Matter of the Joint Application of Qwest Corporation and MC/metro Access
Transmission Services LLC for Approval of an Wire line Interconnection Agreement Pursuant to
47 USC§ 252(e), Docket No . QWE-T-02-22.
6 Sweeney v. American National Bank 62 Idaho 544, 115 P.2d I 09 (1941)
JACKPOT SOLAR'S ANSWER AND STATEMENT OF POSITION IN OPPOSITION -5
Idaho Power asserts that "the Commission may clarify any order on its own motion." 7
While IPUC Rule of Procedure 325 does provide for "clarifications" of Commission orders, it
does not allow for substantive changes to fundamental rights to be made through mere
"clarifications." Indeed such wholesale changes can only be made through full evidentiary
hearings including rights to present testimony and cross-examine witness for all interested
persons. Such proceedings can only be had subject to advance notice and opportunity to be
heard. Additionally a Rule 325 Petition for Clarification "does not suspend or toll the time to
petition for reconsideration or appeal of a final order."
B. Idaho Power's Request for a Declaratory Ruling is Actually a Request to Modify
a Clear and Final Commission Order Issued on Reconsideration
In its initial order, the Commission clearly sought to harmonize the Company's desire to
limit PURP A contracts to two years with the Commission's obligation, under PURP A, to set
avoided cost rates such that QFs are compensated for both avoided energy and avoided capacity
costs. While a two year contract may arguably allow a QF to be compensated for avoided energy
costs, it clearly does not allow for compensation for avoided capacity costs when, as is the case
with all of Idaho's investor-owned regulated utilities, the utility is in a resource surplus position
which puts avoided capacity costs beyond the reach of the initial two-year contract term. In
response to those conflicting positions (two-year contract term vs. avoided capacity payments),
the Commission crafted the following solution:
We recognize that a new two-year contract would be unlikely to reach a capacity
deficiency date. Therefore, we find it reasonable for utilities to establish capacity
deficiency at the time the initial !RP-based contract is signed. As long as the QF renews
its contract and continuously sells power to the utility, the OF is entitled to capacity based
on the capacity deficiency date established at the time of its initial contract. 8
7 Petition at p. 8.
8 Order No. 33357 pp 25 -26, emphasis provided.
JACKPOT SOLAR'S ANSWER AND STATEMENT OF POSITION IN OPPOSITION - 6
Unfortunately, the language used by the Commission in its initial order is ambiguous. Of course,
QFs are not ·'entitled to capacity" because they are selling capacity to the utility and are not
receiving ('·entitled to") capacity. Rather, QFs are entitled to capacity rates or payments based
on the utility's avoided capacity costs. On reconsideration of this issue the Commission clarified
its meaning by modifying the operative language in its initial order to add the word ·'rates" in the
above underscored passage. The Commission's corrected order now reads as follows:
The Commission found it
reasonable for utilities to establish capacity deficiency at the time the initial IRP-based
contract is signed. As long as the QF renews its contract and continuously sells power to
the utility, the QF is entitled to capacity [rates] based on the capacity deficiency date
established at the time of its initial contract.9
Jackpot Solar merely asks Idaho Power to comply with the black letter of the Commission·s
order on reconsideration, to wit: provide '·capacity rates based on the capacity deficiency date
established at the time of its initial contract." The Commission's directive could not be more
explicit. Indeed, that the Commission was quoting its OWN order and making its OWN
correction to that order with the addition of the word ·'rates" speaks to the lack of ambiguity.
The Idaho Supreme Court has provided that, "The criteria must always be whether a
declaratory judgment will clarify and settle the legal relations in issue, and whether such
declaration will afford relief from the uncertainty and controversy which gave rise to the
proceeding." Sweeney v. American National Bank, 62 Idaho 544,550, 115 P.2d 109 (1941). A
declaratory judgment in the present case is unnecessary. The Order is clear that Idaho Power has
a legal obligation to provide .. capacity rates based on the capacity deficiency date established at
the time of its [the QFs] initial contract." Here there are simply no legal relations at issue that
must be settled. The Commission·s order regarding which Idaho Power seeks a declaratory
9 Order No. 33419 at p. 9, brackets in original, underscoring provided.
JACKPOT SOLAR'S ANSWER AND STATEMENT OF POSITION IN OPPOSITION -7
judgment is clear. Rates and year of deficit are established at the time of the initial contract term.
Idaho Power does not seek clarification of a legal uncertainty or controversy; it seeks to overturn
a prior valid order of the Commi ss ion that, on reconsideration prov ides an abundance of clarity
and certainty. There are no .. legal relations in issue."
C. It is improper to Challenge by Declaratory Petition a Final Agency Order from
Which no Appeal was Taken
Idaho Power was not without a remedy for its asserted claim that the Commission's order
is flawed. But it chose not to perfect an appeal to the Idaho Supreme Court. It thereby waived
any right it may have had to challenge this final , conclusive and unambiguous Order establishing
Jackpot's right to a capacity rate as of the date of its initial contract. The Idaho Supreme Court
has made it clear that it is improper to challenge, by declaratory petition, a final agency decision
for which no appeal has been taken.
By failure to exhaust the legal remedies enacted for their use and benefit, plaintiffs are,
under the above decision, precluded from maintaining this action, and the motion by the
director in the trial court to dismiss, should have been sustained and the action dismissed.
By permitting the time for seeking a review: first, by the director, and second, by the
district court on certiorari, to elapse, the assessment has long since become final and
conclusive, and the decision of the director ofrevenue res judicata."
Palmer v. Perkins, 119 Colo. 533, 537-538, 205 P.2d 785, 787, (Colo. 1949) Cited with
approval by V-1 Oil Co. v. County of Bannock 97 Idaho 807, 810, 554 P.2d 1304, 1307 (1976).
CONCLUSION
Idaho Power's Petition for Declaratory Order should be denied. The legal standard for
declaratory orders precludes their use as a surrogate for a late filed petition for reconsideration or
a failure to appeal to the Idaho Supreme Court. The Commission's final Order No. 33419 has
not been stayed and its unambiguous terms retain the full force of law upon which Jackpot Solar
may rely to insist that Idaho Power provide it with both its capacity deficit year and rates, to wit:
JACKPOT SOLAR'S ANSWER AND STATEMENT OF POSITION IN OPPOSITION - 8
"capacity rates based on the capacity deficiency date established at the time of its initial
contract." Substantive changes to the Commission's final and non-appealable order may only be
made through the initiation of a new proceeding with notice to all affected parties and full due
process rights inherent in any contested PUC proceeding.
DATED this 8th day of November, 2016.
By ?)(},~
Peter J. Richardson, ISB #3195
Attorney for Jackpot Solar
JACKPOT SOLAR'S ANSWER AND STATEMENT OF POSITION IN OPPOSITION - 9
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 8th day of November, 2016, a true and correct copy of
the within and foregoing JACKPOT SOLAR'S ANSWER AND STATEMENT OF POSITION
OPPOSITION was served by United States Mail postage prepaid and electronic mail to:
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
4 72 West Washington
Boise, Idaho 83 702
[e-mail]
Yvonne R. Hogle
Attorney for Rocky Mountain Power
1407 W. North Temple, Ste. 310
Salt Lake City, UT 84116
[e-mail]
Kandi Walters
Administrative Assistant
Donovan Walker
Attorney for Idaho Power Company
1221 West Idaho Street
PO Box 70
Boise, Idaho 83 707
[e-mail]
JACKPOT SOLAR'S ANSWER AND STATEMENT OF POSITION IN OPPOSITION -10