20200813Reply Comments.pdf

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?ilifi iiiG l3 Pt{ 2: OtiDONOVAN E. WALKER (!SB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwa lker@ida hopower. com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILIT]ES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
COLEMAN HYDROELECTRIC LLC, FOR
THE SALE AND PURCHASE OF ELECTRIC
ENERGY FROM THE COLEMAN HYDRO
PROJECT
CASE NO. IPC-E-20-27
REPLY COMMENTS OF
IDAHO POWER COMPANY
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ldaho Power Company ("ldaho Powe/' or "Company"), in accordance with the
ldaho Public Utilities Commission's ("Commission") Notice of Modified Procedure, Order
No. 34726, hereby submits the following Reply Comments to the Comments filed by
Commission Staff.
I. REPLY COMMENTS
Commission Staff ("Staff') recommends in its comments that the Commission
approve the submitted Energy Sales Agreement ('ESA") "on condition that the parties
update the ESA's published avoided cost rates to those authorized by Order No. 34683."
Staff Comments, p 4. The ESA was signed by Coleman Hydroelectric, LLC ("Coleman
REPLY COMMENTS OF IDAHO POWER COMPANY - 1
Hydro" or "Project") on June 8,2020 and signed by ldaho Power on June 19, 2020. The
annual published avoided cost rate update was effective on June 1 ,2020. Order No.
34683. Consequently, Staff re@mmends that the ESA be approved, but with the new,
2020, rates. ldaho Power contacted Coleman Hydro to inquire about amending the ESA
pursuant to Staffs comments, and the Project stated that it wished for the matter to be
submitted to the Commission for decision.
Coleman Hydro completed the Schedule 73 contracting process and was sent an
executable version of the submitted ESA from ldaho Power on May 27 ,2020. The Project
had been engaged in the Schedule 73, PURPA contracting process with ldaho Power
since May 8, 2019. The following is a summary timeline of Coleman Hydro's movement
through the tariffed process:
51812019 Coleman Hydro sends first Schedule 73 Application, requesting 51112020
Operation Date
61112019 IPUC publishes new 2019 avoided cost rates
61712019 ldaho Power sends indicative pricing containing 2019 non-seasonal
published rates
10t9t2019 Coleman Hydro informs ldaho Power that it wants to pursue an ESA
containinq seasonal hydro avoided cost rates
1011012019 ldaho Power contacts Coleman Hydro to verify monthly production will
qualify for seasonal hydro rates
1011012019 Coleman Hydro provides monthly energy schedules that validate
seasona! hvdro rates
1012212019 ldaho Power sends a draft ESA to Coleman Hydro with 61112019 avoided
cost rates and a 51112020 Operation Date
112312020 ldaho Power notifies Coleman Hydro that its Schedule 73 Application is
about to expire due to 90 days of inactivity
112412020 Coleman Hydro submits second Schedule 73 Application, requesting
51 1 12020 Operation Date
112712020 fdaho Power sends Coleman Hydro a new draft ESA containing 61112019
seasonal hydro rates and inquires about the 51112020 Operation Date
211012020 Coleman Hydro revises the Operation Date to 51112021
511912020 Coleman Hydro sends to ldaho Power revisions and comments on the
draft ESA
512212020 ldaho Power routes the draft ESA for intemal Sarbanes Oxley (SOX)
compliance review
REPLY COMMENTS OF IDAHO POWER COMPANY - 2
5127t2020 ldaho Power sends executable version of ESA to Coleman Hydro
61112020 IPUC publishes new 2020 avoided cost rates
61812020 Coleman Hydro signs the ESA
611912020 ldaho Power siqns the ESA
612512020 Idaho Power files the ESA for Commission review
Entitlement to a previously effective avoided cost rate in a contract, or pursuant to
a non-contractual legally enforceable obligation under PURPA, is a determination left to
the exclusive authority, discretion, and jurisdiction of the state commission. "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 of individual QF
power purchase agreements, including the date at which a legally enforceable obligation
is incurred under State law."' ldaho Power Company v. ldaho Public Utilities Commission,
155 ldaho 780, 786, 316 P.3d 1278, 1284 (2013)(Grouse Creek Wind) quoting, Power
Resource Group, lnc. v. Public Utility Comm'n of Texas, 422 F.3d 231, 238 (5th Cir.
200S)(additional citations omitted). Staff correctly cites to precedent requiring a signed
contract or a meritorious complaint alleging the project is mature and the QF has
attempted and failed to negotiate a contract with the utility, prior to locking in a previously
effective avoided cost rate pursuant to a legally enforceable obligation. See A.W. Brown
Co., lnc. v. ldaho Public Utilities Commission, 121 ldaho 812,815, 828 P.2d 841,844
(1992); Rosebud Enterprises /nc. v. ldaho Public Utilities Commission, 131 ldaho 1, 951
P.2d 521 (1997); ldaho Power Company v. ldaho Public Utilities Commission, 155 ldaho
780, 316 P.3d 1278 (2013).
ln this instance the Project had completed all required process to obtain an ESA
pursuant to Schedule 73. ldaho Power tendered the final, executable version of the ESA
on May 27 , 2020, prior to the change in avoided cost rates on June 1 ,2O2O. ldaho Power
REPLY COMMENTS OF IDAHO POWER COMPANY.3
did not refuse to contract, nor delay the process. The only element absent at the time of
the June 1 rate change was the actua! signatures on the ESA, which occurred on June 8,
and June 19,2020. The project had been pursuing an ESA since May of 2018 and there
were no material terms in dispute. Under these facts, and under PURPA's mandatory
purchase obligation, ldaho Power did not believe it could refuse to sign the contract.
However, ldaho Power acknowledges that the contract was not signed by the parties until
after the June 1 ,2020 effective date of the updated avoided cost rates. ldaho Power also
acknowledges that such determinations as to eligibility for previously effective rates are
the sole province and within the discretion of the Commission to determine.
Respectfully submifted this 13th day of August 2020.
h,*Zdat4-
DONOVAN E. WALKER
Attorney for ldaho Power Company
REPLY COMMENTS OF IDAHO POWER COMPANY - 4
CERTIFICATE OF SERVICE
! HEREBY CERTIFY that on this 13th day of August 2020, I served a true and
correct copy of the within and foregoing REPLY COMMENTS OF IDAHO POWER
COMPANY upon the following named parties by the method indicated below, and
addressed to the following:
Jordan Whittaker
Coleman Hydro
P.O. Box 177
Leadore, ldaho 83464
208-3030-0001
ldaho Public Utilities Commission Staff
John R. Hammond
P.O. Box 83720
Boise, ldaho 83702-007 4
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John.ham mond@puc. idaho.qov
Christy Davenport, Legal Assistant
REPLY COMMENTS OF IDAHO POWER COMPANY - 5