20210111Answer to Motion for Summary Judgment.pdf

trffi*.
An IDACORP CompanY
DONOVAN E. WALKER
Lead Counsel
[e-mail]
January 11,2021
VIA ELECTRONIC MAIL
Jan Noriyuki Secretary
ldaho Public Utilities Commission
11331West Chinden Blvd., Building g
Suite 201-A
Boise, ldaho 83714
Re: Case No. IPC-E-20-17
Black Mesa, LLC vs. ldaho power Company
Dear Ms. Noriyuki:
Attached for eleclronic filing is ldaho Power Company's Answer to Motion forSummary Judgment in the above entitled matter. lf you hare rny qu"itions about theattached documents, please do not hesitate to contacime.
Very truly yours,
ZkJdlQ_
Donovan E. Walker
DEW:cld
Enclosures
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power ComPanY
1221\Nest ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwa lker@ idahoPower.com
Attorney for ldaho Power ComPanY
BLACK MESA, LLC
ComPlainant,
V.
IDAHO POWER COMPANY,
ResPondent.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. IPC.E.20-17
IDAHO POWER COMPANY'S
ANSWER TO MOTION FOR
SUMMARY JUDGMENT
coMES NOW, ldaho Power cOmpany ("ldaho Powe/' or "company") pursuant
to the ldaho Public Utilities commission's ("IPUC" or "Commission") RP 56, 57, and 256
as well as the procedural schedule from order No. 34898, by and through its attorney of
record, and hereby submits its Answer to the Motion for Summary Judgment filed by
Black Mesa, LLC ("Black Mesa") on December 14,2020, as follows:
I. INTRODUCTION
On March 17, 2020, Black Mesa filed a Complaint against ldaho Power
requesting the commission find that it has established a legally enforceable obligation
(.LEO') commifting ldaho POwer and its customers to a purchase from its proposed
battery storage qualifying facilities ("QF") for a 20-year term and utilizing published
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 1
avoided cost rates applicable to "othe/' QFs. on April 20, 2o2o,ldaho power filed an
Answer and Motion to Dismiss with the Commission in response to Black Mesa,s
complaint stating that the Commission had previously determined that Black Mesa was
not entitled to published rates and a 2O-year contract term as an "othe/' eF, and that
the Federal Court in its final decisionl had specificatly declined to order the Commission
to grant 20-year contracts and published rates as "othef QFs to battery storage QFs.
ln addition, ldaho Power's Answer referenced the then pending proceeding initiated to
determine the proper avoided cost rate and contracting terms and conditions for battery
storage QFs initiated in response to, and consistent with, the Federal Court's decision.2
The Commission denied ldaho Power's Motion to Dismiss stating that,,the record
would benefit from further development." order No. 34715, p 5. ln denying the Motion
to Dismiss the Commission stated, "Doing so gives the parties full opportunity to
highlight pertinent facts and make arguments about how the facts apply to the legal
standard for creating a LEO." /d. The briefing schedule directed by the Commission in
Order No' 34715 was suspended at Black Mesa's request and with ldaho power,s
agreement to allow the parties to engage in negotiations and attempt resolution of the
dispute' On November 13, 2020, Black Mesa filed a Motion to reinstate the briefing
schedule stating that Black Mesa and ldaho Power were engaged in setlement
discussions that had concluded with no definitive resolution, and that the parties joinfly
request reinstatement of the briefing schedule.
I United States District Court for the District of ldaho, Memorandum Decision and Order, p 36-37, CaseNo. 1 :18-cv-00236-REB, Document 62, Jan. 17, 2020.2 IPC-E-20-02' The Commission subsequently issued final Order No. 34794 on October 2,2020,determining that battery storage QFs are entitied to published rates and 2o-year contracti up to 100 kWin size, and that battery storage QFs larger than 10d kW are entifled to lRp'fraetnoJ prtcin! ano 2-yearcontract terms.
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 2
Rather than filing a brief as contemplated by the Commission's Order, Black
Mesa filed a Motion for Summary Judgment on December 14, 2020, in which it again
claims that it is ,,entiled" to a ZO-year contract and published rates available to "othe/'
eFs. Black Mesa claims ldaho Power failed to properly respond to its request for
pricing and a contract under Schedule 73'
Black Mesa is not entifled to published rates and 20-year contracts as an "othe/'
eF. Black Mesa has not established a LEO to published rates and 20-year contracts as
an 'othe/, eF. Black Mesa is not entitled to judgment as a matter of law, its Motion for
Summary Judgment should be denied, and its Complaint should be dismissed.
II. BACKGROUND AND FACTS
Black Mesa initially submitted a Schedule 73 application requesting a PURPA
Energy Sales Agreement ("ESA") for a single,20 MW proposed battery storage facility
on February 13, 2017. See, Attachment5to ldaho Power's Petition, Case No. IPC-E-
17-0L ln its request, Black Mesa demanded a 2}-year contract at published avoided
cost rates. td. ldaho power responded to this initial request, within the 10-day
response time required by Schedule 73, by informing the proiect that the Company did
not agree that it was entifled to a 2o-year contract or published avoided cost rates.
Attachment 1 to ldaho power's Answer and Motion to Dismiss, February 27,2017, letter
from ldaho power.3 On February 27,2017,ldaho Power initiated a proceeding at the
Commission, asking the Commission to issue a Declaratory Order regarding the proper
contract terms, conditions, and avoided cost pricing for five battery storage facilities
requesting contracts under PURPA, including Black Mesa's proposed project as well as
3 ldaho power,s February 27,2017 ,letter was also provided in Attachment 6 to ldaho Power's Petition in
Case No. IPC-E-17-01
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT.3
four additional proposed battery storage projects from Franklin Battery Storage.a Case
No. IPC-E-17-01
On July 13, 2017, the Commission issued Order No. 33785 granting ldaho
Power's Petition for declaratory relief stating, "we find that, as storage facilities with
design capacities that will exceed 100 kW each and with sotar as their primary energy
source, the projects are eligible for two-year, negotiated (lRP methodology) contracts."
order No. 33785, p 12'13. Subsequently, the Franklin Energy Storage projects
("Franklin") petitioned the IPUC for reconsideration alleging that the Commission had
improperly considered Franklin's QF status in its determination.s On August29,2o1T,
the Commission denied Franklin's Petition for Reconsideration. Order No. 33g5g.
Franklin then filed a Petition for Declaratory Order and petition for Enforcement
action against the IPUC at the Federal Energy Regulatory Commission (,,FERC,,) to
which FERC declined to act. FERC Docket EL-1g-50-000. on May 30,2O1g, Franklin
filed a Complaint for Violation of the Federal Power Act, pURpA, and FERC
Regulations with the United States District Court for the District of ldaho (,,Federal
Court'1.0 The Federal Court heard argument on the IPUC's and ldaho power,s Motions
to Dismiss, as well as cross-motions for summary judgment on February l, 2019. on
January 17,2020, the Federal Court issued its Memorandum Decision and Order,
a on January 26,2017' tdaho Power received four separate Schedule 73 applications from proposedbaftery-storagelrojects requesting published avoided cost rate indicative pricing and 2o-year contractsfrom: Franktin Energv stqgo^e p1e, llc (32 MW); r13nr<rl en"rgv storage Til; LLC (g, ,w), FrankrinEnergy Storage Three, _LLC (3? MW),'and Fiinktin energy"ltorag; forr,'f_f_C'iiZ rr4Wl. SeeAttachments 1-4 to the Petition for Declaratory Order, case-'l.lo tpc--e-tz-Or. nlipioposed FranklinEnergy Storage projects.were sub.mitted by the same O"u"top"r. On February lS,fOit,ldaho powerreceived another Schedule 73 application riom a separate proposed battery ad"g;'prolect from anotherdeveloper: Black Mesa Energy, LLc (20 MW). seb nttac'nmEni s to the Fetitio,iroi oLctaratory order,Case No IPC-E-17-01.
5 Franklin Energy Storage Projects' Petition for Reconsideration, Aug. 3, 2011, Case No. lpC-E-.l7-01 .6 Case No. 1:18-cv-00236-REB.
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 4
denying the IPUC's and ldaho Power's motions to dismiss and for summary judgment'
and granting in part Franklin's motion for summary judgmentT stating as follows:
3. Plaintiffs, [Franklin,s] Motion for Summary Judgment (Dkt.
24) is GRANTED lN PART:
a. The court finds that the Defendant IPUC Commissioners
violated the Public Utility Regulatory Policies Act of 1978, 16
U.S.c.ss260letseq.,whentheyissuedfinalorder
numners-537gs on July 1 3,2017 and 33858 on August 29,
2017. such orders established an implementation plan that
impermissibly classified the QF status of Plaintiffs' energy
storage facil'rties that are certified under such Act as energy
storaie facilities. Classifying such facilities as "solar QFs"
is ou[side the Commissloners' authority as state regulators
and therefore in violation of federal law'
b. Defendants are permanently enjoined from enforcing or
applying either of such IPUC final orders to Plaintiffs'
taciliteJ as if such facilities are classified as something other
than energy storage QFs, to include but not be limited to
classifyini Pl"lntifr.' facilities as if they are "solar QFs" under
tne lpfiCis prior implementation plan. Defendants are further
permanentlyenjoinedfromconsideringtheenergySource
input into ilaintiffs' energy storage QFs for the purpose of
classifyingtheQFsinanywayotherthanasenergystorage
QFs.
Memorandum Decision and order, p 36-37, Case No. 1:18-cv-00236-REB, Document
62, Jan. 17,2O2O.
However, the Federal Court also stated that it will not order the IPUC to place
any specific terms upon any power supply contract ldaho Power must enter with energy
storage QFss stating:
4. Plaintiffs, Motion for Summary Judgment (Dkt. 24) .is
otherwise DENIED. The Court specifically declines to order
Defendants [IPUC] to require utilities under their jurisdiction
to afford "n"tgy
- storage QFs all rights and privileges
7 Case No. 1:18-cv-00236-REB, Document 62'
s Case No. 1:18-cv-00236-REB, Document 62, at p 35'
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 5
afforded to "other eFs"
implementation plan.
under the IPUC's pURpA
ld., at p 37.
Following the District Court's Friday, January 17, 2020, Order, on Tuesday,
January 21,2020, ldaho Power received two Schedule 73 applications that were e-
mailed over the holiday weekend for two, 20 MW each, battery storage eFs from Black
Mesa Energy 1 and Black Mesa Energy 2. Attachment 2 to ldaho power,s Answer and
Motion to Dismiss. These applications state, "Black Mesa Energy LLC, reiterates its
previous request for an Energy Sales Agreement pursuant to Schedule 73 as requested
on 211012017 .-- The project is an energy storage QF and qualifies for the ,,other
projects" avoided costs as found in 1:18-cv-00236-REB (Franklin Energy Storage v.
ldaho PUC & ldaho Power)." /d.
lmmediately following the Federal District Court's Friday, January 12, 2020,
Order, ldaho Power filed a Petition with the Commission on the next business day,
Tuesday, January 21,2020. Case No. IPC-E-20-02. ln light of the Federal Court,s
Order as well as Black Mesa's ensuing request for PURpA contracts, ldaho power
requested that the IPUC initiate a proceeding to determine the proper avoided cost
rates as well as contract terms and conditions applicable to, and to be included in, the
PURPA contracts requested by energy storage QFs, as contemplated in the Federal
court's decision. ldaho poweds petition, case No. lpc-E-20-02.
ldaho Power responded to Black Mesa on February 3,2020, within the required
10 business days of Schedule 73, informing Black Mesa that tdaho power did not agree
that Black Mesa's projects were entitled to published rates and 2O-year contracts as
well as informing Black Mesa of ldaho Power's January 21, 2020, petition requesting
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT. 6
that the lpuc initiate a proceeding to determine the proper avoided cost rates as well as
contract terms and conditions applicable to, and to be included in the PURPA contracts
requested by energy storage QFs. Attachment 1 to ldaho Power',s Answer and Motion
to Dismiss, February S,2O2O,letterfrom ldaho Power'
The Commission subsequently issued Order No. 34552 providing Notice of ldaho
power,s petition and establishing a February 28,2020, deadline for interested persons
to intervene as parties to the proceeding. There were no petitions to lntervene filed.
Black Mesa did not intervene nor participate despite being served with the initial
Petition, continuing to seek published rate, 2O-year contracts, and filing its complaint in
the interim. comments were filed by commission staff, the ldaho conservation
League, Renewable Northwest, and clenera. The commission issued its final order
No. 34794, Case No. IPC-E -20-02, on october 2,2020, determining that battery storage
QFs are entitled to published rates and 2o-year contracts up to 100 kw in size, and that
battery storage QFs larger than 100 kw are entitled to IRP Method pricing and 2-year
contract terms.
III. SUMMARY JUDGMENT
The Commission's Rules of Procedure do not specifically address motions for
summary judgment. Order No. 32580, p 6. However, in the past the Commission has
adopted the standards for summary judgment as set out in the ldaho Rules of civil
Procedure (IRCP). /d. (citing order No. 28888; 28832; 32246;29687). summary
judgment may be granted only if "the pleadings, depositions, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any material
fact and that the moving pafi is entitled to judgment as a matter of law'" /d' (quoting
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 7
IRCP 56(c))' "Where the evidentiary facts are undisputed and the [Commission] will be
the trier of fact, 'summary judgment is appropriate, despite the possibility of conflicting
inferenc'es because the [Commission] alone will be responsible for resolving the conflict
between those inferences."' ld., p 6-7 (citing McKoon v. Hathaway,146 ldaho 106, 10g,
190 P'3d 925, 928 (2008) quoting Drew v. Sorensen, 133 ldaho S34, 537, ggg p.2d
276,279 (1999); Riverside Development Co. v. Ritchie,103 ldaho s1s, s1g,650 p.2d
657,661 (1982)).
IV. ARGUMENT
Black Mesa's Motion for Summary Judgment should be denied in its entirety, and
its Complaint dismissed' Black Mesa is not entitled to published rates and 2g-year
contracts, has not established a legally enforceable obligation to published rates and
20-year contracts, and is not entitled to judgment as a matter of law. ln fact, the
Commission has now on two occasions determined that proposed battery storage eFs
are not entitled to published rates and 2O-year contracts as "othef eFs. Add1ionally,
the Commission has found in a case that Black Mesa participated in, that the proposed
Franklin battery storage QFs had not established a legally enforceable obligation to
published rates and 2O-year contracts as "othe/' QFs under facts identical to Black
Mesa's' Furthermore, the Federal District court specifically declined to order the lpuc
to grant the proposed Franklin battery storage QFs published rates and 2O-year
contracts as "othe/' QFs, instead referencing the 'Jurisdictional divide,, between state
and federal authorities and deferring to the Commission's determination as to proper
avoided cost rates and purchasing terms and conditions for proposed battery storage
QFs.
IDAHO POWER COMPANY'S ANS\A/ER
TO MOTION FOR SUMMARY JUDGMENT - 8
ldaho Power did not refuse to contract with Black Mesa' On both occasions
alleged by Black Mesa (2017 and 2o2o) ldaho Power followed the procedure set forth in
schedule 73. ldaho Power in good faith disputed Black Mesa',s demands of entitlement
to pubrished rates and 2o-year contracts as an "othe/' eF, communicated this to Black
Mesa within the required 1o-day response time, and additionally on both occasions filed
a proceeding with the commission to determine the proper avoided cost rate and
contract terms and conditions for proposed battery storage eFs - also within the initial
10-day response time of Schedule 73. On both occasions the commission ruled that
proposed battery storage QFs are not entitled to published rates and 2o-year contracts
aS "other" QFs. Black Mesa is not entitled to judgment as a matter of law' and its
Motion for summary Judgment should be denied and its complaint should be
dismissed.
A. Thereis IVo Legally Enforceable obligation Granting Blag\Mesa Eligibility
to pubtishea niteja nd 21-Year Contracfs as an "Other" QF
The ldaho Supreme Court has affirmed that the "IPUC has authority, under state
and federal law, to require that before a developer can lock in a certain rate. there must
a!jlj!y." tdaho Power co., v. tdaho Pubtic utitities comm'n, 155 ldaho 780,787,316
P.3d 1278, 1285 (2013)("Grouse creed',)(quoting Rosebud Enterpnses, lnc' v' ldaho
Public lJtilities Comm'n.,131 ldaho 1 , 6, 951 P.2d 521 , 526 (1997)(emphasis added))'
,,states must provide for legally enforceable obligations as distinct from contractual
obligations, but'[i]t is up to the States, not [FERC], to determine the specific parameters
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 9
of individual QF power purchase agreements, including the date at which a legally
enforceable obligation is incurred under state law."' td. at 7g6, 316 p.3d at 12g4
(quoting Power Resource Group, lnc. v. Public lJtility Comm'n of Texas,422 F.gd 231,
238 (sthCir.2005).
The ldaho Supreme Court, in the most recent case regarding the principle of
legally enforceable obligations in the State of ldaho, discusses the evolution of this
principle, citing favorably to A.W. Brown Co., lnc. v. ldaho power Co., 121ldaho g12,
828 P.2, 841 (1992) and Rosebud, supra.
ln its order issued in the proceeding involving A.w. BrownCo., lpyg correcfly noted: .Th; Concept of ,legaily
enforceable obligation'does not appear in puiRpn. nairreiit arises from_the imprementing regurations promrig"i;J ;;the Federar Energy Reguratory commission.', rptrc the;quotg!. FERC's expranation for adopting that concept in itsregulations. "Use of the term ,legally enforceable obiigation-,is intended to prevent a utility from circumventrij tnerequirement that provides capacity credit for an eigiblequalifying facility merely by refusing to enter into a coniractwith the qualifying facility.,,
Grouse Creek,155 ldaho at787,316 P.3d at 1285. "FERC has given to each state the
authority to decide when a LEO [tegally enforceable obligation] arises in that state.,, /d.
(quoting Power Resource Group, 422 F.Ad at 23g).
ldaho Power did not refuse to contract with Black Mesa. ldaho power is, and has
been, keenly aware of its legal obligation to purchase generation from a eF under
PURPA, and never refused to do so with Black Mesa. However, ldaho power has no
obligation to blindly accept and acquiesce to any demand for rates and purchase terms
that a potential QF brings to ldaho Power. The rates and purchase terms are the
exclusive province of the IPUC to establish. Despite the many inflammatory allegations
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 1O
to the contrary from Black Mesa, ldaho Power followed its schedule 73 process' ldaho
Power, after receiving Black Mesa's schedule 73 applications and requests for
published rates and 2O-year contracts as an "othe/' QF, responded in writing within the
10-day timeframe as required by schedule 73, informing Black Mesa that it did not
believe that its proposed battery storage QFs were eligible for published rates and 20-
year contracts as an "othe/' QFs.
Additionally, ldaho Power, both in 2017 and tn 2020 after the federal court
decision regarding Franklin storage, initiated proceedings with the IPUC seeking a
determination as to the proper price and contract term that the proposed battery storage
eFs were eligible for. ldaho power initiated these proceedings also within the initial 10-
day response time set forth in Schedule 73. These proceedings were necessary so that
the lpUC could determine and establish the proper avoided cost rate and purchase
terms for battery storage within its existing PURPA implementation framework' ldaho
Power did not seek, and the commission did not impose, a "new PURPA
implementation plan." ldaho Power sought and the Commission determined where the
new resource type, battery storage, fits and what it is eligible for within ldaho's existing
pURpA implementation. Such proceedings were necessary for the IPUC to exercise its
exclusive authority to determine and establish a just, fair, and lawful avoided cost rate
for battery storage QFs that not only complies with the mandatory purchase provisions
of pURpA, but also protects the retail customers of ldaho Power by assuring they only
pay the proper utility avoided cost for purchases from battery storage QFs'
Bringing a good-faith dispute to the Commission, as the decision maker that
possesses the exclusive authority to resolve such disputes, is by no means a refusal to
IDAHO POWER COMPANY'S ANSWER
TO MOTTON FOR SUMMARY JUDGMENT - 11
contract, and does not require the utility to proceed with a contracting process that
meets the demands of the QF' lt is not an unreasonable delay. lt is not intransigence
on the part of the utility' And it does not entitle the eF to lock in a rate and contract
term that the IPUC determines is not a proper avoided cost rate and contract term for
that QF' when a QF brings a demand to the utility under schedule 73 that it is not
entitled to, the utility is not obligated to move fonrvard by offering incorrect rates and
contracts to that QF. The commission expects and demands that the utility not take
actions that would be harmful to its customers and expects the utility to bring questions
regarding the lawful rates and purchase terms of PURPA purchases to it for resolution.
This is exactly what ldaho Power did in response to Black Mesa,s demands. As soon a
practically feasible, and within Schedule 73's initial 1o-day response time, tdaho power
responded to Black Mesa in writing that it did not agree that Black Mesa was eligibte for
the rates and terms its had requested - and - that ldaho Power had additionally initiated
proceedings at the lPUc seeking its determination as to the proper rates and terms for
the QF's proposed purchase.
Determination of a legally enforceable obligation is not some game of ,,gotcha,,
where the QF can unilaterally bind utility customers to rates and terms that the eF is not
entitled to and that could be harmful to utility customers. The lpuc is the exclusive
authority that determines the proper rate and purchase terms for the eF. The binding
precedent for the determination of a legalty enforceable obligation in the State of ldaho
in the absence of signed contract requires a commission determination that the QF has
a meritorious complaint that the utility refused to contract, refused to negotiate, and that
establishment of legally enforceable obligation is required to prevent the utility from
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 12
circumventing the requirement to contract with a QF' Grouse Creek' supra' A good-
faith dispute regarding the proper rates and purchase terms does not meet this
standard.
The commission has previously ruled under nearly identical facfs that the
proposed Franklin battery storage QFs did not establish a legally enforceable obligation
to published rates and 2o-year contracts as an "othe/' QF in 2017 ' order No' 33785' p
12, case No. lpc-E -17-0L Although Black Mesa was a party to that case, just like the
Franklin projects, it now states that it did not make a claim to a legally enforceable
obligation as part of the 2017 case. However, Black Mesa is making such a claim now'
and there are no material differences in the facts considered by the commission in its
determination that the proposed Franklin battery storage projects did not establish a
legally enforceable obligation, and the facts that exist for Black Mesa',s proposed battery
storage projects. Just like the commission's determination rejecting Franklin's claim of
LEO entitlement to published rates and 2O-year contracts as "othe/' QFs' Black Mesa
has no valid claim to a LEO, nor entitlement to published rates and 20-year contracts
available to "other" QFs.
Further,therearenomaterialdifferencesinthefactsfromlhe2olTclaims
compared to the present LEO claims, or Black Mesa'S second round of contract
requests in 2o2o following the federal court's decision in the Franklin battery case' ln
both instances the proposed battery storage eF fired initiar contract requests with the
utility demanding published rates and 20-year contracts as "other" QFs' ln both
instances ldaho Power responded to the proposed baftery storage QF that it did not
believe it to be eligible for published rates and a 2}-year contract as an "othe!'' QF and
TDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 13
initiated proceedings, within the required ten-day response time required by Schedule
73, with the Commission to determine the proper avoided cost rates and purchase
terms and conditions for battery storage QFs. The Commission has ruled that a
reasonable dispute between the parties regarding contract terms and conditions in this
same context where the utility files the dispute with the Commission for resolution, does
not constitute intransigence or a failure to negotiate on the part of the utility, and DoES
Nortrigger the creation of a LEo. order No. 337g5 , p 12, case No. lpc-E- 1T-01.
Additionally, the Federal Court ruled that the Franklin battery storage eFs, which
are nearly exactly situated, factually, as Black Mesa's proposed projects, were not
entitled to rates and terms as "othed' QFs in ldaho. The Federal Court instead
references the 'Jurisdictional divide" between the state and federal authorities and
deferred to the IPUC to make its determination as to the proper rates and purchase
terms for battery storage QFs consistent with its decision. lmmediately after the Federal
court's decision, ldaho Power initiated an action consistent with that order, lpc-E-2o-
02, for the Commission to determine the proper avoided cost rates and contract terms
and conditions for battery storage QFs. Black Mesa was notified in writing and served
with the Petition for that matter. The Commission issued its final Order No. 34794,
Case No. IPC-E'20-02, on October 2,2020, determining that battery storage eFs are
entitled to published rates and 20-year contracts up to 1OO kW in size, and that battery
storage QFs larger than 100 kW are entitled to IRP Method pricing and 2-year contract
terms.
ldaho Power did not refuse to contract with Black Mesa. ldaho power complied
with the requirements of Schedule 73 and responded to Black Mesa within Schedule
IDAHO POWER COMPANY'S ANS\A/ER
TO MOTION FOR SUMMARY JUDGMENT. 14
73,s required 10-day response time that Black Mesa was not eligible for the rates and
terms it requested, and filed proceedings with the Commission within the same required
10-day response time in good faith seeking resolution of the dispute' on both
occasions the commission found that battery storage QFs are nof eligible for published
rates and 2g-year contracts as "othe/' QFs. There is no refusal to contract, no utility
delay, no utility intransigence, and no meritorious complaint that Black Mesa was
entiiled to what it was demanding. There is no legally enforceable obligation granting
Black Mesa eligibility to published rates and 20-Year contracts as an "othe/' QF'
B. Black Mesa is not Entitled, nor Eligible for, Standard Rates Published for
"Other" QFs and 20'Year Contract Terms
Almost the entirety of Black Mesa's claims rely upon a gross mischaracterization
of the lpUC's pURpA implementation in the state of ldaho. Black Mesa uses this
mischaracterization in an attempt to bolster a strained argument that they are "entitled"
to avoided cost rates and contract terms other than those determined appropriate for a
proposed battery storage QF by the IPUC. Black Mesa attempts to perpetuate a myth
which it calls a ,,dichotomy" of pURPA implementation in ldaho that consists of (1) wind
and solar QFs and (2) all other QFs. Black Mesa Motion for summary Judgment, p 10,
and pp g-15, for example. This is not the "dichotomy" of PURPA implementation in
ldaho. lf anything approaches a "dichotomy" it would be the distinction the IPUC makes
between two different pricing methodologies: (1) the surrogate avoided resource
methodology ("SAR") reserved for smaller, unsophisticated QF projects and utilized for
off-the-shelf, published rates - and (2) the much more accurate incremental cost
integrated resource plan ("lclRP" or',lRP") methodology reserved for larger and more
sophisticated QF projects. The sAR methodology is based upon the avoided cost of a
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 15
fictional, combined-cycle, natural gas, combustion turbine. The lClRp methodology is
based upon the specific hourly generation profile of the proposed eF generator, and
assigns an avoided cost based upon the highest cost, displaceable utility resource that
is also generating during any hour that the proposed QF delivers its generation. A eF,s
eligibility for SAR-based, or ICIRP-based avoided cost rates is determined by the eF,s
size' ln the past all QFs 10 aMW and under were eligible for SAR rates, while all eFs
over 10 aMW were only eligible for ICIRP rates. Because of the manipulative practice
of large wind and solar QF projects disaggregating themselves into smaller units in an
attempt to gain access to higher SAR-based rates, the Commission lowered the
published rate eligibility cap for wind an solar to 100 kw, which is the federally required
minimum size under which standard rates must be offered. Later, and in separate
proceedings, the Commission determined that all QF contracts - for all resource types -
that exceeded the published rate eligibility cap were limited to a maximum contract term
of 2 years - not just for wind and solar. Additionally, within these methodologies
avoided cost rates are tailored to individual generation types; for instance, all lClRp-
based prices are priced for that resource type's specific peak hour capacity factor. For
published rates, the commission publishes (publicly available on the commission,s
webpage and updated annually) avoided cost rate tables for wind, solar, non-seasonal
hydro, seasonal hydro, and other projects. There is not a pURpA implementation
dichotomy consisting of wind/solar and other. There are two different rate
methodologies differentiated by size and generation type.
Black Mesa, as a proposed battery storage QF, is not "entitted,,to off-the-shelf,
published rates and 2o'year contracts simply because it is a newly developed eF
IDAHO POWER COMPANY'S ANS\A/ER
TO MOTION FOR SUMMARY JUDGMENT - 16
technology that the commission had not previously specifically addressed' Black Mesa
is entiiled to the avoided cost rates and contract terms and conditions that the IPUC
approves for use for battery storage QFs. As stated several times in ldaho Power',s
Answer to Brack Mesa,s compraint: rdaho power did not refuse to contract with Black
Mesa at an avoided cost rate and a contract term approved by the Commission, and
has asked the commission to set and approve the same. Black Mesa dedicates a
section of its Motion for summary Judgment to misconstruing this statement into what it
inflames as a "fatally inconsistent argument" and "attempt to thwart QFs', rights'" Black
Mesa Motion for Summary Judgment, p 27'29. There is nothing inconsistent in that
statement, and no marfeasance on the part of rdaho power to thwart anyone's "rights."
Black Mesa itself admits and makes a point about how the commission had not yet
established a proper rate or contract term for a battery storage QF' Black Mesa Motion
for summary Judgment, p 10-11. This in and of itself does not mean there is any
"entitlement" for a battery storage QF, or Some Other new and unaddressed QF
technology, to automatically be included and eligible for a pre-existing published rate
crassification for ,,othe/, eFs that was specificaily designed for biomass, small hydro,
cogeneration, geothermal, and waste-to-energy QFs, all of which have different
generation output characteristics than battery storage. Additionally, to this day there
has never been a battery storage QF contract in ldaho Power's ldaho or oregon
jurisdiction, which is not surprising as it is a new and emerging technology that has only
cursorily been addressed by FERC and not addressed at all by many states under
PURPA.
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 17
Black Mesa could have had no expectation that it was "entitted" to rates as an
"othe/'QF. There had, and has, never before been a proposed QF contract in the state
of ldaho for a battery storage QF. The Commission did not address or consider battery
storage QFs when establishing avoided cost rates and contracting terms and conditions
for "othe/' QFs' ln the two instances in which the Commission has considered and
determined battery storage QF eligibility for the existing avoided cost rates in the state
of ldaho, the first of which was initiated with Black Mesa and Franklin's 2017 initial
requests, the Commission has determined published rate eligibility, as welt as 20-year
contracts to be capped at 100 kW, the federally required minimum. And las1y, Black
Mesa could have no expectation of "entitlement" to rates and contract terms as an
"othe/' QF in its 2020 contract requests, as such requests were made immediately
following the Federal Court's decision in Franklin, where the court specifically refused to
require the IPUC to give battery storage QFs avoided cost rates and purchase terms as
"othe/'QFs.e
It is the IPUC's exclusive jurisdiction, authority, and province to set a proper and
laMul avoided cost rate and terms of purchase for eligible QFs in the mandatory
purchase obligation of PURPA. Black Mesa spends a lot of time and effort arguing
about what it believes it is "entitled" to under PURPA, but it always teaves out an
important part of the equation under PURPA - the protection of the utility,s retail
customers who ultimately pay the bill for devetopment and acquisition of eF generation.
To be laMul, the acquisition of QF generation at avoided cost rates must not harm the
utility's retail customers, who pay the cost of PURPA generation. Customers are
s Black Mesa was aware of the Federal Court's decision as, surprisingly, it cites to that decision in itsdemards for prices and terms as an "other" QF, even though tnb reoeiat court decision states that it isspecifically nof directing or requiring the IPUC to grant such status to battery storageeFs-.
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 18
entiled to not have their power rates increased unnecessarily for generation that is not
needed to serve load on the utility's system and increases the cost at which the utility
could otherwise provide customers' service. The IPUC in its exclusive authority must
determine the proper avoided cost rate that is not harmful to utility customers and
represents what the utility would pay to otherwise generate or purchase that energy but
for the proposed eF generation. The Federal Court in Franklin recognized this
,jurisdictional divide" in its refusal to direct the IPUC to grant battery storage the same
avoided cost rates and contract terms and conditions as "othe/' QFs'
Black Mesa is not "entitled" to avoided cost rates as an "othe/' QF. This is true
for several reasons, but one need look no further than the Federal Court ruling in
Franklin where the federal court agreed and recognized that such determination was
within the exclusive jurisdiction and authority of the IPUC to decide'
VI. CONCLUSION
Black Mesa is not entifled to published rates and 2O-year contracts as an "othel''
eF. Black Mesa has not established a legally enforceable obligation to published rates
and 2g-year contracts as an "othef' QF. Black Mesa is not entitled to judgment as a
matter of law. Black Mesa's Motion for Summary Judgment should be denied in its
entirety, and its Complaint dismissed.
Respectfully submitted this 11th day of January 2021'
Mril*L
DONOVAN E. WALKER
Attorney for ldaho Power ComPanY
I DAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT - 19
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 11th day of January 2021,1 served a true and
COTTECT COPY Of IDAHO POWER COMPANY'S ANSWER AND MOTION TO DISM]SSupon the following named parties by the method indicated below, and addressed to thefollowing:
Black Mesa Energy, LLC
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 n.27th Street
Boise, ldaho 83702
_Hand Delivered
U.S. Mail
_Overnight Mail_FAXX Email richardsonada ms.com
ldaho Public Utilities Commission Staff
Edward Jewell
Deputy Attomey General
X Email [e-mail]
Christy Davenport, Legal Secretary
IDAHO POWER COMPANY'S ANSWER
TO MOTION FOR SUMMARY JUDGMENT.20