20201214Lynch Declaration.pdf

Demo of StampPDF by Appligent, Inc. http://www.appligent.comDemo of StampPDF by Appligent, Inc. http://www.appligent.com
Peter J. Richardson (lSB No. 3 195)
Gregory M. Adams (lSB No. 7454)
Richardson Adams, PLLC
515 N. 27th Street
Boise, Idaho 83702
Telephone: [phone]
[e-mail]
gr e g@richardonadam s. co m
Attorneys for Complainant Black Mesa Energy, LLC
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
BLACK MESA ENERGY, LLC,
Complainant,Case No. IPC-E-20-17
DECLARATION OF BRIAN LYNCH
IN SUPPORT OF BLACK MESA
ENERGY, LLC'S MOTION FOR
SUMMARY JUDGMENT
VS
IDAHO POWER COMPANY,
Defendant.
)
)
)
)
)
)
)
)
I
[, Brian Lynch, declare under the penalty of perjury as follows:
l. This declaration is based on my personal knowledge and, if called to testify to the
following facts, I could and would competently do so.
INTRODUCTION
2. I submit this declaration in support of Black Mesa Energy, LLC's ("Black Mesa")
Motion for Summary Judgment before the Idaho Public Utilit¡es Commission ("IPUC" or
"Commission"). That Motion requests that the Commission find that Black Mesa has formed
two legally enforceable obligations: (l) committing ldaho Power Company ("ldaho Power") to
purchase the net output of the Black Mesa Energy I storage qualifying facility ("QF") for a20-
year term of power sales utilizing the Commission's published avoided cost rates for "Other"
facilities in effect on the date of the complaint in this matter; and (2) committing Idaho Power to
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-2O- I7 - PACE I
RECEIVED
2020December 14, PM 1:12
IDAHO PUBLIC
UTILITIES COMMISSION
purchase the net output of the Black Mesa Energy 2 storage QF for a20-yeu term of power sales
utilizing the Commission's published avoided cost rates for "Other" facilities in effect on the
date of the complaint.
PROFESSIONAL BACKGROUND AND EXPERIENCE
3. I am an energy professional with 30 years of experience in the United States
energy market. I have a BA degree from University of California Los Angeles and an MBA
from Pepperdine University. I started in the solar industry in 2006 as an executive at Honeywell
and subsequently founded and worked at several firms in the solar industry. In 2012, I founded
Redwood Energy, an advisory firm in the solar development industry and supported numerous
firms on solar project development and finance. I have personally developed and structured over
300 megawatts ("MW") of solar development in the US and have performed financial modeling
and underwriting on over $l billion of projects easily exceeding 300 distinct solar project
opportunities. I have handled the purchase and sale of multiple utitity scale projects in the
United States totaling almost 2 gigawatts with a speciflrc project size ranging from 100 kilowatts
("kW") to 170 MW. In addition to my work experience, I am also a frequent speaker and panel
participant at solar industry conferences as well as an expert witness in cases involving the solar
market.
4. In January 2017,1 founded MB MezzDev LLC to develop utility scale solar and
solar plus storage projects in the United States. In February 2017 , Black Mesa Energy LLC was
developed as a wholly owned asset of MB MezzDev LLC, with the intent of developing
renewable energy storage facilities in ldaho that are the subject of this case. The Black Mesa
development team also includes other individuals with experience developing and financing
renewable energy storage facilities, but I have overseen or been directly involved in all of Black
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-2O-I7 - PAGE 2
Mesa's development efforts for the Black Mesa Energy I facility and the Black Mesa Energy 2
facility, and I have personal knowledge of such development efforts discussed in this declaration
BLACK MESA STORAGE PROJECTS OVERVIEW
5. Black Mesa Energy LLC is developing proposed energy storage facilities known
as the Black Mesa Energy I facility and the Black Mesa Energy 2 facility, each of which have a
net output of 20 MW-AC and will be designed to generate less than l0 average monthly MW.
The Black Mesa Energy I facility and the Black Mesa Energy 2 facility will utilize a common
interconnection to Idaho Power's electrical system, but the electric generating equipment of the
two facilities willbe separated by a distance of at least one mile.
6. Black Mesa has filed self-certification Form 556s with the Federal Energy
Regulatory Commission for the Black Mesa Energy I and Black Mesa Energy 2 facilities as
storage qualifying facilities ("QF") under the Public Utility Regulatory Policies Act of 1978
("PURPA"). On or about February 23,2017, Black Mesa first completed and duly filed a Form
556 certifying its first configuration for its energy storage development project as a single
storage QF (at that time referred to as the Black Mesa Energy facility) utilizing renewable
resources in FERC Docket No. QF l7-705-000. Subsequently, on January 21,2020, Black Mesa
recertified the initial storage QF in FERC Docket No. QF l7-705-001 and changed the name of
the facility to "Black Mesa Energy I ", and Black Mesa also filed a Form 556 certifying its
second storage QF as "Black Mesa Energy 2" in FERC Docket No. QF20-535-000. In these
certification forms, Black Mesa certif,red the Black Mesa Energy I and Black Mesa Energy 2
facilities as "Other renewable resource" - specifically as an "energy storage system Qualifying
Facility," not as a wind or solar QF resource type, and explained each facility would utilize
energy storage. FERC accepted the Form 556s.
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-20-I7 - PAGE 3
7 . Black Mesa's complaint in this proceeding alleges each of its energy storage
facilities is entitled to 'oother" published avoided cost rates and contract term by virtue of its
FERC certilìcation status as an "other" facility.
8. However, Black Mesa's complaint further alleges that its storage facilities are
further entitled to the "other" rates because each facility's generating characteristics, including
daily generation profile, are distinct from those of solar or wind generation. Because a storage
facility has stored energy, a cloud or momentary drop in wind does not cause an immediate drop
in output. [n contrast to as-available renewable energy output, the Black Mesa facilities will
deliver firm energy commitments of energy and capacity throughout the day to ldaho Power and
will continue supplying energy and capacity during critical peak times after the sun goes down in
summer evenings. Such output profiles may resemble the "Battery Output to Grid" curves in the
following graphic representation, which was prepared by the Black Mesa engineering team and
demonstrates a possible output profile of a battery storage QF that is energized with an
intermittent renewable resource :
20
l,JIt
dr¡l
t
I
,
I
II
I
I
I
I
I
I
I
I
I
l¡
tt
lt
tl
lt
lti
I
tl II
Itll15É'
ItI
)I
¡l
¡l(i
¡
rh
B>10
ll
ll
lt
tfItIttJ
llìr
llt,t'
"l
5
¡I
I
I
¡
I
---- SolarGeneration
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-2O-I7 - PAGE 4
0
tl
Battery Output to Grid
Furthermore, on account of the stored energy, a storage QF can provide frequency response, an
important grid service that helps maintain stability of the grid in the event of unexpected
generation or transmission outages. Standalone solar and wind generation facilities are unable to
provide this service.
BLACK MESA CONTRACTING EFFORTS
9. Black Mesa attempted to initiate discussions with ldaho Power regarding sale of
the power in20l7. On or about February I I ,2017, on behalf of Black Mesa, I submitted to
Idaho Power the information required by Schedule 73 to receive a power purchase agreement
("PPA") (also referred to by Idaho Power as an Energy Sales Agreement or "ESA") and
requested that ldaho Power, comply with the contracting procedures contained in its Schedule 73
for the purpose of executing a PURPA PPA for a storage QF.
I 0. Black Mesa's submittal on or about February I1,2017, provided ldaho Power
with a completed Schedule 73 application and all required supporting documents for its first
energy storage QF (at that time referred to as the Black Mesa Energy facility) utilizing the non-
levelized, non-fueled, published avoided cost rates for "Other" facilities for a2}-year power sale
term. A copy of Black Mesa's email request is attached as Exhibit I to Black Mesa's Complaint.
ll. On February 23,2017, on behalf of Black Mesa, I followed up with the initial
request for a PPA by asking, via email, that ldaho Power to confirm receipt of the request. A
copy of this email is attached as Exhibit 2 to Black Mesa's Complaint. Idaho Power responded
via email from Michael Darrington, also on February 23,2017, reassuring me that it (ldaho
Power) "will respond in accordance with Schedule 73." A copy of ldaho Power's email dated
February 23,2017 is attached as Exhibit 3 to Black Mesa's Complaint.
12. Despite its reassurance, ldaho Power never did respond to Black Mesa's request
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-2O-I7 - PAGE 5
in accordance with Schedule 73. Instead of complying with the contracting procedures in
Schedule 73, on February 27,2017,ldaho Power informed Black Mesa via email from ldaho
Power's legal department that it had "filed an application to the Idaho Public Utilities
Commission requesting a declaratory order that determines the contract term and avoided cost
pricing methodology for which your proposed project may be eligible." Copies of ldaho
Power's letter and transm¡ttal email are attached as Exhibit 4 to Black Mesa's Complaint.
I 3. Idaho Power's application triggered almost two years of delay to resolve the
litigation it had commenced. [n the interim, Idaho Power was not willing to discuss Black
Mesa's contract request, even though Black Mesa remained ready, willing, and able to commit to
sell energy and capacity to ldaho Power under the proposed PPA. First, the Commission issued
two orders that I understand to have initially declared that all battery energy storage projects
energized with solar energy are to be treated as though they are solar QFs without storage and
thus not entitled to 2Ù-year published avoided cost rates for facilities that produce l0 average
monthly MW or less, as would be the case for "Other" QFs. However, on January 17,2020, the
United States District Court for the District of ldaho issued a decision that I understand to have
ruled that the Commission's orders violated PURPA.
14. Once the United States District Court rendered its decision, Black Mesa
immediately reiterated its request for a flrxed-rate Z}-year power sale term utilizing the published,
non-levelized, non-fueled avoided cost rates for "Other" facilities for Black Mesa Energy I
storage QF and submitted a request for its Black Mesa Energy 2 storage QF. Specifically, on or
about January 18,2020, on behalf of Black Mesa, I sent an email to ldaho Power representatives
wherein Black Mesa "reiterate[d] its previous request for an Energy Sales Agreement pursuant to
Schedule 73 as finitially] requestedon2ll0llT" with respect to the Black Mesa Energy I storage
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK ME,SA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-20- I7 - PAGE 6
QF. Additionally, on or about January 18,2020, on behalf of Black Mesa, I submitted to ldaho
Power a completed Schedule 73 application with all supporting documents for the Black Mesa
Energy 2 storage QF, requesting a PPA for a2}-year power sale term utilizing the non-levelized,
non-fueled, published avoided cost rates for "Other" facilities. The PPA requests submitted on
or about January 18,2020 are contained in Exhibit 5 to Black Mesa's Complaint.
15. ldaho Power responded with an email from its attorney, Donovan Walker, dated
January 21,2020, stating that it had filed another petition with the Commission to establish
avoided cost rates applicable to PURPA storage qualifying facilities.
16. Given ldaho Power's refusalto supply a PPA to Black Mesa, we determined that
Black Mesa was able to commit itself to the terms and conditions commonly included in Idaho
Power's PURPA PPAs approved by the Commission, and we would produce such PPAs on our
own based on publicly available versions of the ldaho Power PURPA PPA. Black Mesa's
development team inserted the project-specifrc information for the Black Mesa Energy I storage
QF and the Black Mesa Energy 2 storage QF into a PPA containing what I understood to be
common terms and conditions for such PURPA PPAs. On behalf of Black Mesa, I executed and
submitted such a PPA for the Black Mesa Energy I storage QF and the Black Mesa Energy 2
storage QF to ldaho Power on or about January 24,2020. The relevant contents of the PPA
submittal on or about January 24,2020 are contained in Exhibit 6 to Black Mesa's Complaint.
l7 . To the best of my knowledge and recollection, Idaho Power has not identified any
non-rate terms or conditions to which ldaho Power objects in the proposed PPAs for the Black
Mesa Energy I storage QF and the Black Mesa Energy 2 storage QF submitted by Black Mesa to
Idaho Power on or about January 24,2020.
18. Idaho Power did not tender indicative pricing within l0 days and contract terms
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-20-I7 - PAGE 7
within the l5 business-day period in Schedule 73 after the submittals for the Black Mesa Energy
1 storage QF and the Black Mesa Energy 2 storage QF made in January 2020. Instead, Idaho
Power asserted through a letter dated February 3,2020,that it objects to the proposed PPAs on
the ground that it had asked the Commission to eliminate the right of energy storage QFs to sell
power under published avoided cost rates for a 2O-year term of fixed-price power sales. Idaho
Power also asserted that Schedule 73 submissions were deficient for failure to supply an
estimated 8,760 electrical output profile for the proposed facilities. A copy of ldaho Power's
letter dated February 3,2020, is included in Attachment I to ldaho Power's Answer and Motion
to Dismiss in this case.
I 9. On behalf of Black Mesa, I responded to ldaho Power via letter dated February 4,
2020,to clarify for ldaho Power that the Schedule 73 requests for the Black Mesa Energy I
storage QF and the Black Mesa Energy 2 storage QF did in fact contain 8,760 electrical output
profìle estimates for the proposed facilities, and that such hourly generation profiles are
consistent with the capability of the proposed battery storage facilities as described in the FERC
Form 556s for such facilities. I also explained that Black Mesa did not agree with ldaho Power's
legalassertions made in Idaho Power's letter. My letter dated February 4,2020, is attached
hereto as Exhibit I to this Declaration.
20. Idaho Power next responded via emailto me from Michael Darrington dated
February 18,2020, wherein he acknowledged receipt of my letter dated February 4,2020, and
the clarification made regarding the generation profiles, but did not further discuss that subject or
attempt to engage in any further discussion of the estimated generation proflrles. Instead, Mr.
Darrington again identified Idaho Power's pending application before the IPUC to establish new
terms and conditions for energy storage QFs as the basis for Idaho Power's continued refusal to
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-2O- I7 - PAGE 8
offer PPAs, or engage in any way with, the Black Mesa Energy I storage QF and the Black Mesa
Energy 2 storage QF. A copy of Mr. Darrington's emaildated February 18,2020,is contained in
Attachment I to ldaho Power's Answer and Motion to Dismiss in this case.
21. Due to Idaho Power's clear expression of its refusal to engage with Black Mesa,
Black Mesa filed a complaint against ldaho Power at the Commission on March 17,2020, asking
the Commission to direct ldaho Power to enter into PPAs to purchase the net output of the Black
Mesa Energy I storage QF and the Black Mesa Energy 2 storage QF for a2Ù-year term of power
sales utilizing the Commission's published avoided cost rates for "Other" facilities in effect on
the date of the complaint.
BLACK MESA'S DEVELOPMENT BFFORTS
22. Despite ldaho Power's refusalto cooperate with Black Mesa's PPA requests and
the extensive delays due to Idaho Power-initiated litigation, Black Mesa has engaged in
substantial development efforts for the Black Mesa Energy I storage QF and the Black Mesa
Energy 2 storage facilities.
23. On May 17,2019, Black Mesa secured exclusive right to negotiate with Black
Mesa Farms for long-term site control on 300 acres for the Black Mesa Energy I storage QF and
the Black Mesa Energy 2 storage facilities. Long-term site control negotiations have proceeded
as expected and the lease arrangements should be finalized well in advance of planned
construction. The site will provide direct access to ldaho Power's existing Black Mesa
Substation for the interconnection. No third-party easements or rights-of-way are required for
construction of the facilities.
24. Black Mesa applied to Idaho Power for interconnection in April 2019 and
maintains that request in ldaho Power's interconnection queue, as queue no. 557. The request
DE,CLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-2O-I7 _ PAGE 9
was initially for a 200-MW interconnection, but was amended to be an interconnection request is
for an interconnection output of 40 MW-AC, which willenable the joint interconnection
proposed for use for the Black Mesa Energy I and Black Mesa Energy 2 storage facilities. Idaho
Power issued a Feasibility Re-Study on 10, February 2020,for the 40-MW interconnection, and
it issued a System Impact Study in June 2020. Both studies concluded the interconnection is
feasible, and Black Mesa's development team has concluded the forecasted costs therein are
financially feasible in the case where the QFs receive the 2O-year PPAs with the published
avoided cost rates requested in the complaint. The Black Mesa development team has posted the
$100,000 deposit to proceed to the Facility Study phase, which is the final study that will frnalize
the construction schedule. Based on the deadlines in ldaho Power's interconnection tariff, Black
Mesa expects to have the results of the Facilities Study by the end of 2020. The Generator
Interconnection Agreement would be executed after that study is supplied.
25. The purchase orders for equipment and final engineering of the facility would be
normally be completed in the development process only after execution of the PPAs to support
such financial commitments. However, Black Mesa's development team has completed
financial analyses beginning in 201 7 , and has also conducted preliminary engineering and design
of the facility and site, including selection and modeling of the initial design set such as modules,
racking, inverters, and battery energy storage.
26. ln2019, Black Mesa initiated a procurement strategy for achieving safe harbor
status for the Investment Tax Credit, which began to diminish incrementally in each year after
2019 without such safe harbor status. Based on the efforts to date, Black Mesa's development
team expects to achieve a safe harbor status that will enable the flrnancial viability of the two
facilities under the 2O-year PPAs with published avoided cost rates requested in the complaint.
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-2O- I7 - PAGE IO
27. The primary permitting requirement for the Black Mesa Energy I storage QF and
the Black Mesa Energy 2 storage facilities will be a conditional use permit from Elmore County.
The conditional use permit typically requires construction to commence within a limited
timeframe, and therefore in the development process is not typically sought untilthe schedule is
reasonably certain, which is not yet the case due to Idaho Power's refusal to execute PPAs.
Applications for the conditional use permit with Elmore County is currently being prepared.
Based on the Black Mesa development team's past experience with other renewable energy
projects in Elmore County, we anticipate the permit could be issued within 6 months of applying.
The development site is located on previously disturbed private farmland, and it is not expected
to raise issues of environmental impacts and any delays typically involved with projects using or
crossing federal land.
28. Black Mesa alleged in its complaint that consistent with the lPUC-approved
Schedule 73 and to the extent required by the Commission and ldaho Power in this case, Black
Mesa will be able to commit to delivering the electrical output of the Black Mesa Energy I
storage QF and the Black Mesa Energy 2 storage QF within 365 days of a flrnal non-appealable
determination by the Commission finding that Black Mesa created a legally enforceable
obligation for each facility. Based on the forgoing discussion of the development status and my
experience in industry, I continue to conclude that Black Mesa would be able to achieve this
objective if required by the Commission in its final order provided that ldaho Power promptly
executes PPAs upon the issuance of such order and cooperates to timely complete
interconnection construction within such a timeframe.
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-20-I7-PAGE II
NON-FINANCAEABILITY OF
TWO-YBAR PO\ryER PURCHASE AGREEMENTS
29. My understanding of Idaho Power's legal position is that Black Mesa Energy I
storage QF and the Black Mesa Energy 2 storage QF are only entitled to two-year power sale
terms in a power purchase agreement under the IPUC's implementation of PURPA for QFs that
are not entitled to published rates and2}-year fixed-price power sale terms. Without addressing
the legal dispute over that assertion which will be addressed in legal briefing, I will provide my
expert opinion that a two-year contract term is not financeable for renewable energy facilities
such as the proposed Black, Mesa Energy I storage QF and the Black Mesa Energy 2 storage QF.
30. As I understand the policy Idaho Power proposes to apply to the Black Mesa
Energy I storage QF and the Black Mesa Energy 2 storage QF, the energy and capacity rates
would be locked in for only a two-year power sale term in the PPA. Given that ldaho Power has
a capacity deficiency until after that two-year term, there would be no capacity rates paid during
this PPA term. However, if the facility were able to somehow continually execute successive
two-year PPAs, the capacity deficiency date existing at the time of execution of the first PPA
would be used. For example, in the avoided cost rates in effect at the time of the filing of Black
Mesa's complaint, the capacity deficiency date was 2026, and therefore the capacity rates would
not apply until a successively executed PPA reached into the year 2026. ln any case, the
applicable rates would only be locked in for two-year periods. Thus, the financiers of the
facility would take on the risk that the facility would be unable to obtain all of the requisite two-
year PPAs necessary to achieve the full power sale term needed to support financing.
3 I . Investors in energy infrastructure use a number of financial tests to determine
viability for new projects. Among them, investors require a return of capital during the period of
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-2O-I7_PAGE I2
contracted revenue. Typically, at fixed prices for energy and capacity offered today's market
conditions, the necessary period is between l5 and 20 years. However, with higher fixed-price
rates paid for energy and capacity, the necessary period may be as short as l2 years. Higher rates
allow for shorter terms, while lower rates require longer terms. I am unaware of any new
projects financed with a two-year term.
32. In the case of the proposed two-year contract policy ldaho Power would prefer to
use, the risk of unknown fluctuations in the energy component of the rates every two years
would, in my experience, be unacceptable to potential investors. It is hypothetically possible that
in the case of a storage facility a predicable capacity component of the rate may justify such
investment if it were sufficiently high, predictable or fixed at the time of the initial investment,
and of sufficient duration to support such investment. I stress that this is a very remote
possibility, and it does not appear these factors would all necessarily apply under the two-year
contract policy ldaho Power proposes to use. However, even if we were to assume that a 2l-year
fixed capacity price and floating energy price could ever support such financing, the two-year
contract policy proposed for use by ldaho Power would expose the project's financiers to the risk
that the full 20-year power sale term of such expected capacity payments would not be realized
due to the inability to secure l0 successive two-year power purchase agreements. The potential
investors would reasonably be concerned that a change in policy, law, other changed
circumstances, or an inability to execute such agreements for any other reason could prevent
successful renewal of l0 successive agreements with ldaho Power and approval of the same by
the Commission, which would prevent realization of the full 2O-year power sale term with such
fixed capacity rates. In my opinion based on many years of experience, even if the capacity rates
were quite high, the risks inherent with this two-year contract option are unacceptable for
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-2O- I7 _ PAGE I 3
investors in renewable energy facilities, including the Black Mesa Energy I storage QF and the
Black Mesa Energy 2 storage QF.
33. As the Commission Staff s review of surrounding states contract length's in Case
No. IPC-E-20-02 has shown, the industry norm for power purchase agreements that support
successful financing and development is much longer than two years, and is typically at least l5-
20 years. As I stated above, that is owning to the fact that at two years financiers will not
allocate funds to the projects, which is borne out by the fact that no developers of renewable
energy facilities have executed a two-year power purchase agreement under the Commission's
policy for qualifying facilities not entitled to ZÙ-year published rates since that policy was
adopted in 201 5.
I declare under penalty of perjury pursuant to the law of the State of Idaho that the
foregoing is true and correct.
DATED this 11 day of December 2020
By
Brian Lynch
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-20- I7 - PAGE I4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the l4th of December 2020, a true and correct copy of the within
and foregoing DECLARATION OF BRIAN LYNCH IN SUPPORT OF MOTION FOR
SUMMARY JUDGMENT in Docket No. IPC-E-20-07 was served, pursuant to Commission
Order No. 34602, exclusively via electronic mail to:
Idaho Public Utilities Commission
Jan Nuriyuki, Secretary
Edward Jewell, Deputy Attorney General
i an.noriyuki@Jruc. idaho. gov
Edward. i ewell@puc. idaho. sov
Idaho Power Company
Donovan Walker, Attomey for Idaho Power Company
[e-mail]
dwalker@idahopower. com
Peter J. Richardson (ISB No. 3195)
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 _ PAGE I5
Peter J. Richardson (ISB No. 3195)
Gregory M. Adams (ISB No. 7454)
Richardson Adams, PLLC
515 N. 27th Street
Boise,Idaho 83702
Telephone: [phone]
peter@richardsonadams. com
gr e g@nchardonadam s. c om
Attorneys for Complainant Black Mesa Energy, LLC
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
BLACK MESA ENERGY, LLC,
Complainant,
VS.
IDAHO POWER COMPANY,
Defendant.
)
)
)
)
)
)
)
)
)
Case No. IPC-E-2O-17
DECLARATION OF BRIAN LYNCH
IN SUPPORT OF BLACK MESA
ENERGY, LLC'S MOTION FOR
SUMMARY JUDGMENT
EXHIBIT 1
DECLARATION OF BRIAN LYNCH IN SUPPORT OF BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY JUDGMENT
IPC-E-2O-I7 - EXHIBIT I, COVER PAGE
BLACK MESA ENERGY, LLC
MB MEZZDEV, LLC
PO BOX 2731
PALOS VERDES, CA90274
b l y r r c i(4r c ilp q çlclç Lrç lg):. ç e r_n
February 4,2020
Re Black Mesa Energy l, LLC
Black Mesa Energy, 2, LLC
Frederic Energy, l, LLC
Frederic Energy 2,LLC
Michael Darrington:
This is in response to your letter of February 3,2020, in which you state that the
Schedule 73 Applications for the above referenced QFs are deficient.
As you know, Idaho Power is obligated, pursuant to Schedule 73, to provide indicative
pricing and proposed contract terms and conditions within ten business days from the date on
which the QF has provided all of the information requested in section La of Schedule 73.
Conversely, if ldaho Power determines that the QF has not "provided sufficient information as
required in Section 1.a," then the Company is obligated to provide written notice of said
deficiency - also within a ten-business day timeframe.
According to your letter, the above referenced QFs submitted "defìcient" Schedule 73
requests. The first paragraph in your letter under the heading "Applications' Dehciency"
concluded with this sentence: "The schedule of estimated deliveries provided with your
application appear to have the same output shape as that of a solar project." Although your
observation in this regard may be accurate, it does not allege (nor even infer) a defìciency.
Therefore, we have no choice but to treat this observation for what it is, a mere observation and
not an assertion ofa deficiency.
The second (and only other) paragraph under the heading of "Applications' Deficiency" points
out several minor discrepancies between the output spreadsheet provided to ldaho Power
pursuant to Schedule 73 and the output described in the projects' Form 556. You conclude this
second paragraph with the request that the projects "provide an hourly generation prohle
consistent with the capability of your proposed battery storage facility that represents the
generation output you intend to deliver." Your request suggests that you have rejected (or at
best, ignored) our submission of the 8,760 hourly spreadsheets submitted with our Schedule 73
applications. Those spreadsheets do contain our "hourly generation profiles that are consistent
with the capability of our proposed battery storage facilities that we intend to deliver."l Your
I It may be helpful for ldaho Power to understand that Schedule 73 only requests an "estimate" of the hourly output,
and that FERC Form 556 only requests a "nominal" description of the electrical output of the proposed facility.
classification of our estimated hourly deliveries as a deficiency in the Schedule 73 Applications
is therefore misplaced.
Because you have not, in fact, even alleged a deficiency in our Schedule 73 Applications,
we expect the Company to promptly acknowledge its intent to comply with the letter, as well as
the intent, of Schedule 73 and to tender terms, conditions and rates for our four proposed
contracts within hve business days from today.
Your letter also discusses various court orders and alleged legal precedents that appear to
be well beyond the immediate scope of our interaction with ldaho Power - which of course has
to do with the Company's failure to comply with its Schedule 73 requirement to tender terms,
conditions and contract rates within ten business days of receipt of our competed application.
With regard to these other issues you raise, we are confident the ldaho PUC will abide by both
its federal and state legal obligations with respect to its duties under PURPA.
Sincerely
/,('
Érian Lynch
Managing Member