20201214Motion for Summary Judgment.pdf

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Peter J. Richardson (lSB No. 3195)
Gregory M. Adams (ISB No. 7454)
Richardson Adams, PLLC
515 N. 27th Street
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter@richardsonadams. com
greg@richardsonadams. com
Attorneys for Black Mesa Energy, LLC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
BLACK MESA ENERGY, LLC
Complainant,
Vs
IDAHO POWER COMPANY,
Defendant.
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)
)
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)
)
)
Case No. IPC-E-20-17
BLACK MESA ENERGY, LLC'S
MOTION FOR SUMMARY
JUDGMENT
I. INTRODUCTION
COMES NOW, Black Mesa Energy, LLC ("Black Mesa") and respectfully moves the
Idaho Public Utilities Commission ("IPUC" or "Commission"), pursuant to Administrative Rule
31.01.01.56 and the Idaho Rules of Civil Procedure 56(a) and (c) and the Commission's Notice
of Briefing Schedule Order No. 34849, to grant summary judgment in Black Mesa's favor.
Black Mesa lodged its formal Complaint with this Commission on March 17,2020,
alleging that Idaho Power Company ("ldaho Power" or the "Power Company") has failed to
comply with the Commission's established contracting procedures contained in Schedule 73 for
the creation of a legally enforceable obligation ("LEO") between it and the two Black Mesa
qualifying facilities ("QF") that are the subject of this complaint proceeding. Through this
Motion, Black Mesa now requests that this Commission issue an order granting summary
judgment in Black Mesa's favor and declaring that Black Mesa has formed two legally
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E.20-07 - PAGE I
RECEIVED
2020December 14, PM 1:12
IDAHO PUBLIC
UTILITIES COMMISSION
enforceable obligations: (1) committing Idaho Power to purchase the net output of the Black
Mesa Energy I storage QF for a2O-year term of power sales utilizing the Commission's
published avoided cost rates for "other" facilities in effect on the date of the Complaint; and(2)
committing Idaho Power to purchase the net output of the Black Mesa Energy 2 storage QF for a
20-year term of power sales utilizing the Commission's published avoided cost rates for o'other"
facilities in effect on the date of the Complaint.
In support of its Motion for Summary Judgment, Black Mesa submits the follow legal
brief and the accompanying Declaration of Brian Lynch. Black Mesa stands ready to present
oral argument on this Motion should the Commission determine to schedule such argument, or to
present evidence at a hearing to the extent that the Commission may f,rnd any material facts
remain unresolvable through summary judgment.
II. FACTUAL AND PROCEDURAL BACKGROUND
Black Mesa Energy LLC is developing proposed energy storage facilities known as the
Black Mesa Energy I facility and the Black Mesa Energy 2 facllity, each of which have a net
output of 20 MW-AC and will be designed to generate less than l0 average monthly megawatts
("aMVy'").r 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 will be separated by a distance of at least one mile.2
Black Mesa has filed self-certification Form 556 with the Federal Energy Regulatory
Commission ("FERC") for the Black Mesa Energy I and Black Mesa Energy 2 facilities as
storage qualifying facilities under the Public Utility Regulatory Policies Act of 1978
I Declaration of Brian Lynch In Support of Black Mesa Energy, LLC's Motion for
Summary Judgment at fl 5.2 Id.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20.07 -PAGE2
("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. QFlT-705-000. Subsequently, on January 21,2020, Black Mesa
recertiflred the initial storage QF in FERC Docket No. QFlT-705-001 and changed the name of
the facility to "Black Mesa Energy 1", and Black Mesa also filed a Form 556 certifying its
second storage QF as "Black Mesa Energy 2" in FERC Docket No. QF20-535-000.4 In these
certif,rcation forms, Black Mesa certified 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.s
Black Mesa began its attempts to engage in discussions with Idaho Power regarding sale
of power beginning in February 2017.6 At that time, Black Mesa first 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 Idaho
Power comply with the contracting procedures contained in its Schedule 73 for the purpose of
executing a PURPA PPA for a storage QF utilizing the published avoided cost rates for "other"
facilities.T Instead of complying with Schedule 73, onFebruary 27,2017,Idaho Power filed an
application to the Commission requesting a declaratory order that Black Mesa's proposed energy
storage QF, and those of the similarly situated Franklin energy storage QFs, should be treated as
atll9-2t
atll9-21
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE 3
-t
4
5
6
7
atfl6rd.
Id.
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Id.
rd.
solar QFs, and thus not entitled to published avoided cost rates for "other" facilities or a 2O-year
contract term.8 ldaho Power's application triggered years of delay to resolve the litigation it had
commenced, during which period Idaho Power refused to supply the requested PPA to Black
Mesa.e
First, in response to Idaho Power's application, the Commission issued two orders
declaring that all energy storage projects energized with solar energy are to be treated as though
they are solar QFs without storage.l0 Under the Commission's determination, energy storage
QFs with an energy input of solar energy are only entitled to a PURPA PPA term of two years of
fixed prices that are available to solar QFs and not 20-year power sale terms with hxed prices
that are available to all projects other than solar or wind QFs. Thus, the Commission determined
that Black Mesa's energy storage facility was only entitled to a two-year contract based on the
Commission's classification of the proposed facility as a solar facility.
However, the other QFs affected by the Commission's orders (the Franklin Storage QFs)
brought suit against the Commission in the United States District Court for the District of Idaho,
and the District Court ruled that the Commission's orders violated PURPA.'r Among other
findings, the court determined that, "By 'looking behind' Plaintifß' QF status to examine the
proposed input power generation profile of the facilities, the Commissioners violated PURPA by
questioning Plaintiffs' qualifications or eligibility under PURPA, and by then deciding, for all
substantive purposes, that each is a solar QF rather than an energy storage QF entitled to
8 td. atlflg-2r.e Id. atflflg-2l.r0
^See IPUC Case No. IPC-E-17-01, Order No. 33785 & Reconsideration Order No. 338581r Franklin Energlt Storage One, LLC v. Kjellander, Case No.: l:18-cv-00236-REB, 2020
U.S. Dist. LEXIS 8892 (Jan. 17,2020).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 _ PAGE 4
treatment as an 'other QF."'12 Because the court found that PURPA's'Jurisdictional divide"
prohibits federal courts from applying the state's rules to a particular QF in an implementation
challenge, the court decided not to order the contract terms and rates that must be afforded to the
Franklin energy storage QFr.'t The court explained "additional issues may be taken up in further
proceedings fbefore the IPUC], subject to the rulings and constraints of this decisionf.]"ra
Promptly after the United States District Court rendered its decision, Black Mesa
immediately reiterated its request for a PPA containing a fixed-rate 20-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 similar request for its Black Mesa Energy 2
storage QF.'t Idaho Power again refused to discuss the request pursuant to the provisions of
Schedule 73, and instead it initiated a new proceeding to revise the Commission's PURPA
implementation plan for o'other" QFs, which was docketed as Case No. IPC-E-20-02.16 Left with
no other options, Black Mesa inserted the project-specif,rc information for the Black Mesa
Energy I storage QF and the Black Mesa Energy 2 storage QF into a PPA containing what it
understood to be commonly approved terms and conditions for such PURPA PPAs, and it
executed and submitted such a PPA for the Black Mesa Energy I storage QF and the Black Mesa
Energy 2 storage QF to Idaho Power on or about January 24,2020.t7 Idaho Power has not
communicated any disagreement with the non-rate terms and conditions supplied in those
t2 Id. at*44.13 Id. at**52-53.t4 Id. at*53.ls Declaration of Brian Lynch In Support of Black Mesa Energy, LLC's Motion for
Summary Judgment at flfl 14-21.16 Id.t7 Id.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE 5
executed PPAs, aside from entitlement to a 2}-year contract term.ls
Due to Idaho Power's clear expression of its refusal to engage with Black Mesa, Black
Mesa filed a complaint against Idaho Power at the Commission on March 17,2020. The
complaint alleged two separate claims. The first claim seeks a determination that Black Mesa
has formed a LEO committing Idaho Power to purchase the net output of the Black Mesa Energy
I 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 this complaint. Likewise, the second claim
seeks a determination that Black Mesa has formed a LEO committing ldaho Power Company to
purchase the net output of the Black Mesa Energy 2 storage QF for a2O-year term of power sales
utilizing the Commission's published avoided cost rates for "other" facilities in effect on the date
of this complaint. On each clam, Black Mesa requests that the Commission require Idaho Power
to execute a standard PURPA power purchase agreement for the applicable Black Mesa storage
QF containing: (a) the non-levelized, non-fueled, published avoided cost rates for "other"
facilities in effect on the date of this complaint; (b) a 20-year power sale term containing fixed
prices; and (c) the non-rate terms and non-term-length contract provisions proposed in the PPA
unilaterally executed by Black Mesa for the applicable energy storage QF or such other non-rate
and non-term-length provisions as the Commission determines, within the bounds of its lawful
discretion, to be just and reasonable.le
Idaho Power responded to Black Mesa's Complaint by filing a Motion to Dismiss, which
the Commission denied on July 10,2020.20 In doing so, the Commission has made it clear that
both parties now have the opportunity to "highlight pertinent facts and make arguments about
t8
l9
20
rd.
Black Mesa's Complaint at pp. 13-15
Order No. 34715.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 _ PAGE 6
how the facts apply to the legal standard for creating aLEO."2l
III. APPLICABLE LEGAL STANDARI)
The Commission employs the same standard on summary judgment as that contained in
the Idaho Rules of Civil Procedure.22 Under that standard, the Commission "must grant
summary judgment if the movant shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law."23 "[A]ll reasonable inferences that
can be drawn from the record are to be drawn in favor of the nonmoving party, and disputed
facts are liberally construed in the nonmoving party's favoÍ."24 However, a"party asserting that
a fact. . . is genuinely disputed must support the assertion by . . . citing to particular parts of
materials in the record, . . . or [by] showing that the materials cited do not establish the absence .
. . of a genuine dispute
IV. ARGUMENT
There is no material dispute of fact that the Black Mesa QFs each created a LEO to sell
energy and capacity to Idaho Power pursuant to the Commission's implementation of PURPA
for "other" QFs entitled to published rates no later than the date of the complaint, March 17,
2t Id. at 5. Black Mesa notes that the Commission's order denying Idaho Power's Motion
to Dismiss contains an apparently inadvertent misstatement of the procedural history where it
states: "In IPC-E-17-01, the Commission denied Black Mesa's claim that it had established a
LEO at that point in time[.]" Id. at3. While the Franklin QFs had asserted the creation of a LEO
in the Case No. IPC-E-17-01, Black Mesa did not make an assertion of a LEO at that time which
could have been addressed by the Commission. Rather, Black Mesa's filings in the docket were
limited to a one-page comment on April 7 ,2017 , which did not allege formation of a LEO for
what was at that time a single proposed QF.22 Grand View PV Solar Two, LLC v. Idaho Power Co., IPUC Case No. IPC-E- 1 1- 1 5, Order
No. 32580, at 6-7 (June 21, 2012).23 Greenwøldv. W. Surety Co.,164Idaho 929,937,436P.3d1278,1286(2019) (quoting
I.R.C.P. s6(a)).24 Id., 164Idaho at942,436 P.3d at l29l (internal quotation omitted).2s Id (quoting I.R.C.P. 56(cXl)).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE 7
2020. On that date, and indeed up until Order No. 34794 was issued on October 2,2020,the
Commission's implementation of PURPA entitled such energy storage QFs to the published rates
for o'other" facilities, such as the Black Mesa QFs, sized up to l0 aMW. As explained below, the
Black Mesa QFs are entitled LEOs under any reasonable application of the applicable legal
standards, and the Commission should therefore grant summary judgment in Black Mesa's favor.
A.The Commission's Implementation of PURPA Entitled Energy Storage QFs up to
10 aMW to the Published Avoided Cost Rates for "Other" Facilities Until October
2,2020
This case concerns the application of the Commission's implementation of the federal
statute and regulations requiring public utilities to purchase energy generated by a select class of
generators. Congress enacted PURPA to reduce the dependence of electric utilities on non-
renewable energy inputs, in part, by encouraging the development of alternative energy sources
such as cogeneration and small power production facilities called "Qualiffing Facilities" or
"QFr."tu PURPA directs FERC to promulgate regulations encouraging the purchase by utilities
of energy produced by QFs.27 State regulatory commissions, such as this Commission, must
implement PURPA by either adopting rules or by resolving disputes in a manner which complies
with FERC's regulations.2s This Commission implements PURPA via ad hoc orders with
general applicability and has not promulgated any administrative rules specihcally implementing
PURPA's must-purchase provisions.
Until October 2,2020, and during all times relevant to the creation of the Black Mesa
QFs' LEOs, this Commission had no distinct treatment or resoLtrce-specffic implementation plan
for energy storage QFs. The Commission summarized the PURPA implementation scheme that
FERC v. Mississíppi, 456 U.S. I 42, 7 45-46 (1982).
16 U.S.C. $ 824a-3(a).
l6 U.S.C. $ 82aa-3(f).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE 8
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27
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it had in place at all relevant times to the creation of the two Black Mesa LEOs as follows
This Commission [PUC] has established two methods of calculating avoided cost,
depending on the size of the QF project: (l) the surrogate avoided resource (SAR)
methodology, and (2) the integrated resource plan (IRP) methodology. fcitation omitted]
The Commission uses the SAR methodology to establish standard or "published" avoided
cost rates. fcitation omitted] Currently, the eligibility cap for wind and solar QFs to
access published avoided cost rates is set at 100 kilowatts (kW). QF projects other than
wind and solar are subject to a published rate eligibility cap of I0 average megawatts
(aMW).
In 2015, this Commission reduced the term for individually-negotiated PURPA contracts
(those not subject to published rates) in Idaho from 20 years to 2 years. The contract
term for published rates remains at 20 years.2e
More specifically, the historical antecedent to the Commission's current implementation
of PURPA provided a single rate schedule of published rates for any QF of any non-fueled
resource type up to l0 average monthly MW, and it provided a contract term length of 2O-years
regardless of facility capacity.30 In Case Nos. GNR-E-10-03 and GNR-E-11-03, the
Commission reduced the eligibility cap for published rates to 100 kW for wind and solar QFs,
and it developed resource-specific capacity prices for certain categories of resources, including
wind, solar, canal drop hydropower, and hydropower.3l But the Commission has left in place the
traditional published rates without such specially designed capacity calculations for all "other"
facilities up to 10 aMW. In doing so, the Commission explained "changing eligibility from 10
2e IPUC Case No. IPC-E- l7-01, Order No. 3378 5 at 2-3 (July 13, 2017) (emphasis added;
citations omitted).30 See IPUC Case Nos. IPC-E-04-08 & IPC-E-O4-10, Order No. 29632 at l2-14 (Nov. 22,
2004).3r IPUC Case No. GNR-E-11-03, Order No. 32697 at l5 (Dec. 18,2012) ("we find it
reasonable to assign a value to a QF resource's ability to provide such capacity. A QF resource
with a high capacity factor is not only providing the utility with energy, but also capacity that
will allow the utility to avoid having to construct new generation to serve its customers during
peak load hours").
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-8.20-07 - PAGE 9
aMW for resources other than wind and solar is unnecessary atthis time."3z Later, in August
2015, the Commission determined that all QF that were not eligible for published avoided cost
rates - which included wind and solar QFs over 100 kW and any other resource type exceeding
10 aMW - would only be entitled to two-year contracts with rates calculated under the Integrated
Resource Plan ("IRP") methodology."
Thus, under this Commission's implementation plan that was in effect at the time Black
Mesa created its two LEOs, the lay of the land was that wind and solar QFs that are 100 kW or
smaller are entitled to published rates and a 2)-year contract. On the other hand, wind and solar
QFs larger than 100 kW have their rates set using the IRP methodology and are only entitled to
two-year contracts. At the same time, the Commission's implementation scheme provided that
any other QF, which it defined as QF projects "other than wind or solar" that are l0 aMV/ or
smaller,3a were entitled to published avoided cost rates and a2}-year contract. If a QF "other
than wind or solar" is larger than l0 aMW, its rates were to be calculated using the IPR
methodology, and it is only entitled to a two-year contract. It is not disputed that each of the
Black Mesa energy storage QFs is proposed to be 10 aMW or less.
In implementing its policy for determining entitlement to either 2D-year contracts or two-
year contracts, the Commission established a simple dichotomy between either: (1) solar/wind,
or (2) all other QFs (that is, all QFs other than wind or solar). Indeed, prior to its rulings in the
Franklin docket (IPC-E- I 7-01), the Commission had never mentioned the phrase energy storage
32 IPUC Case No. GNR-E-11-03, Order No. 32697 at 14 (Dec. 18,2012) (stating that
"fm]aintaining a l0 aMW eligibility cap is also consistent with our long history of encouraging
PURPA projects and renewable energy generation in ldaho.").33 IPUC Case Nos. IPC-E-15-01, AVU-E-15-01, & PAC-E-15-03, Order No. 33357 at2l-
26 (Aug. 20,2015).34 IPUC Case No. GNR-E-l l-03, Order No. 32697 at l4 (Dec. 18,2012)
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE IO
QFs in any of its orders implementing PURPA and thus had no specific treatment for such QFs
different from the catch-all treatment for "other" QFs. The Commission made this point clear in
its FERC filing in connection with the Franklin litigation. The Commission explained, in its
FERC filing, that:
Until Idaho Power petitioned the Idaho PUC for declaratory relief regarding Franklin's
requested PURPA contracts, the Idaho PUC had not yet considered the eligibility cap for
abattery storage QF to receive standard avoided cost rates and associated terms and
conditions in a PURPA contract.
In deciding which QF resource types should have a lower eligibility cap, the Idaho PUC
specifically considered biomass, small hydro, cogeneration, geothermal, and waste-to-
energy... The Idaho Commission did not address battery storage.35
Thus, back in 2017, when faced for the first time with the question of how such QFs
(including Black Mesa's initial Project) fit into its two-pronged dichotomy, this Commission had
just two legitimate choices. The first legitimate, and probably the most obvious choice, would
have been to declare that the Commission meant what it said when it identified the first class of
QF as being, "other than wind and solar" - i.e., all QFs other than wind or solar are entitled to
published avoided cost rates and2}-year contracts, which would naturally encompass energy
storage QFs such as the Black Mesa project. A second legitimate option, which is technically
just a subset of the first option, would have entailed the Commission initiating a process through
which it would adopt a new implementation plan and an avoided cost methodology with relevant
contract terms applicable to new (i.e., not retroactively applied) energy storage QFs who
subsequently request contracts. Instead, the Commission attempted to re-classify the Black Mesa
and Franklin energy storage QFs as solar QFs rather than applying its original implementation
scheme which would have properly classified those projects as "other" QFs.
35 Noüce of Intervention and Protest of the Idqho Public Utilities Commissíoz, FERC
Docket No. ELl8-50, at pp. 8-9 (Jan. 16, 2018).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07-PAGE II
The result of the Commission's attempted classification of energy storage QFs as solar
QFs was the United States District Court's ruling that the Commission exceeded its jurisdictional
authority under PURPA and violated applicable federal law (PURPA¡.36 The court went on to
enjoin any attempt by the Commissioners to enforce the Commission's orders which purport to
re-classify the Franklin energy storage QFs as solar QFs.37 Although Black Mesa did not
intervene or participate in the federal court litigation with the Franklin QFs, the Black Mesa
project was identically situated with the Franklin QFs and was so identified by Idaho Power it its
initial petition for declaratory ruling in2017, as well as by the Commission's orders in that
docket (IPC-E-17-01), which ultimately resulted in the court's injunction against the Idaho
Commissioners. It would be a violation of the intent, if not the letter, of the court's injunction
for this Commission to attempt to re-classify the Black Mesa projects as solar QFs that are not
entitled to 2O-year fixed-rate contracts at this point in time because such a re-classification of the
Black Mesa projects would once again, as the court ruled, exceed the Commission's authority
and constitute a renewed violation of PURPA.
Idaho Power has incorrectly suggested that by declining to affirmatively order use of the
o'other" rates for the Franklin QFs, the United States District Court left the Commission to refuse
to provide the extant "other" rates to the Franklin QFs and other similarly situated energy storage
QFs, such as the Black Mesa QFs. The only reason the court declined to issue further relief was
its finding that "there is a jurisdictional divide" in a PURPA implementation challenge which
precluded the court from ordering further specif,rc relief.38 In so ruling, the Court noted that the
36 Franklin Energy Storage One, LLC,2020 U.S. Dist. LEXIS 8892 at*54 ("Classifying
such facilities as 'solar QFs' is outside the Commissioners' authority as state regulators and
therefore in violation of federal law").37 Id.38 Id. at *52.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 -PAGE 12
relief it was authori zed to grant was limited in an implementation claim under Section 2 l0(h) of
PURPA - "a QF may bring judicial actions before FERC and in federal court against state
regulatory commissions to require implementation of PURPA's rules but not their application."3e
Instead, the court directed that "additional issues may be taken up in further proceedings [before
the IPUC], subject to the rulings and constraints of this decision, if Plaintiffs choose to pursue
such fuither proceedings."4O However, the court left open the possibility that "if Plaintiffs are
denied contracts on the terms they desire and they perceive such denial is grounded in a violation
of PURPA jurisdictional lines, they may be able to again seek recourse using the avenues
PURPA affords."ar
More recently, after the creation of the LEOs alleged in Black Mesa's complaint in this
proceeding, the Commission has now adopted a new implementation plan with resource-specific
treatment for energy storage QFs to be applied prospectively to future LEOs with energy storage
QFs. That plan, which was adopted on October 2,2020, in Order No. 34794, implemented a
two-year contract term for energy storage QFs with a design capacity in excess of 100 kW -
implementing PURPA for energy storage QFs similarly as for wind and solar QFs but with a
significant distinction.a2 Specifically, Order No. 34794 adopted the "Duke Energy" method of
calculating capacity rates for energy storage QFs under the IRP methodology, which allocates all
capacity payments to ldaho Power's peak hours as opposed to averaging the capacity payments
over all hours of the year.a3 Additionally, despite Staff s recommendation to limit the new
category to battery storage QFs, the Commission's order made the separate category applicable
Id. at*53.
rd.
Id. at*52 n.20.
IPUC Case No. IPC-E-20-02.
IPUC Case No. IPC-E-20-02,Order No. 34794, at 10 (Oct.2,2020).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE I3
39
40
4l
42
43
to all types of energy storage QFr.oo
This new implementation action removed energy storage QFs from the "other" category
of published rate availability, and created a "separate" energy storage rate category.as The
Commission's decision adopted on October 2,2020, in Order No. 34794, unambiguously
confirms the creation of the new plan for energy storage QFs, as opposed to a mere clarification
of the previously effective implementation plan, stating as follows:
We find it is reasonable to establish an energy storage QF category. There are a diversity
of technologies, configurations, and operational guidelines that will cause the output
generation profiles of energy storage QFs to vary greatly even within their own category,
further justifying the distinction. Energy storage QFs have the ability to provide less
intermittent, less variable, and more predictable energy than wind and solar QFs, but the
output duration from energy storage QFs is more limited than the baseload-type resources
that make up the 'other' category. As energy storage technologies evolve and additional
projects are developed, further distinction between energy storage technologies may be
warranted.a6
The Order - which contains an effective date of Oct ober 2, 2020 - orders as follows: "lT IS
HEREBY ORDERED that a separate energy storage QF category is established."4T Indeed, the
final characteristics of this separate energy storage QF category differed from the proposals of
both Idaho Power and Staff during the proceeding, and therefore could not have been accurately
predicted by any party prior to October 2,2020.
Significantly for the Black Mesa LEO determination, this long-in-the-making
implementation plan was not adopted, or even formally proposed, until after the Black Mesa QFs
created LEOs with ldaho Power and filed a complaint on March 17,2020. Energy storage
44 Id. at 6 n.2 & lo-l l.4s See, e.g., íd. at 6 ("Staff recommended the Commission establish ø separate category for
battery storage QFs because battery storage QFs have output characteristics reasonably distinct
from wind or solar QFs and reasonably distinct from QFs in the 'other' category" (emphasis
added).)46 Id. at lo-ll.47 Id. at 15.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE I4
qualifying facilities existed before the Commission initiated (at Idaho Power's behest) a docket
to adopt a new policy to set rates that are specific and unique to those types of qualifying
facilities under the catch-all category of "all other QFs." Energy storage QFs have existed at
least since FERC recognized their existence in 1990 in Luz Development and Finance
Corporation, 5 I FERC f[ 6l ,078 ( 1990). In the absence of a storage-specific rate or policy in
Idaho prior to October 2,2020, Black Mesa was within its rights to form a LEO to the "other"
rates. Any other conclusion would mean there was (and remained until October 2,2020) no rates
or contract terms available at all for storage QFs. Thus, Black Mesa was entitled to create a LEO
to the published rates for "other" facilities and a 2}-year contract term up until October 2,2020.
B.Black Mesa Formed a LEO for Each of lts Two Energy Storage QFs UtÍlizing the
Published Rates for "Other" QFs Up to 10 aMW Prior to the Commission's
Creation of a Separate Rate Category for Energy Storage QFs
At all relevant times to Black Mesa's complaint, Black Mesa's proposed energy storage
QFs fell under the Commission's implementation plan for "all other" QFs and hence are entitled
to 2}-year contracts at published avoided cost rates in effect at the time of their LEO creation.
The Commission's relevant PURPA implementation orders provide that all QFs "other than wind
and solar" QFs up to 10 aMV/ are entitled to published rates and2}-year contracts.a8 On the
other hand, at the time of Black Mesa's LEO creation, only solar and wind QFs that were larger
than 100 kW were restricted to a two-year contracts. As discussed below, Black Mesa's LEO
creation efforts occurred in two stages, but the end result is that as of the date it filed its
Complaint Black Mesa formed a LEO for each QF to the published avoided cost rates and20-
year contract terms available to'oother" QFs at that time.
I The LEO Rule Allows a QF to Unilaterally Create a LEO and Prevents
Idaho Power from Delaying the Date on Which the QF Creates Its LEO
48 IPUC Case No. GNR-E-11-03, Order No. 32697 at 14-15 (Dec. 18,2012).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC.E.2O-07 - PAGE I5
Under FERC's regulations, which this Commission implements, a QF is entitled to form
a LEO to the rates, terms and conditions in effect at the time that it commits itself to sell power
to the utility.4e Since 1980, FERC has consistently maintained that under the LEO rule each QF
"has the right to choose to sell pursuant to a legally enforceable obligation, and, in turn, has the
right to choose to have rates calculated at avoided costs calculated at the time that obligation is
incurred."sO Under the LEO rule, "a QF, by committing itself to sell to an electric utility, also
commits the electric utility to buy from the QF; these commitments result either in contracts or in
non-contractual, but binding, legally enforceable obligations."5r "¡T1he phrase legally
enforceable obligation is broader than simply a contract between an electric utility and a QF and
that the phrase is used to prevent an electric utility from avoiding its PURPA obligations by
refusing to sign a contract, or . . . delaying the signing of a contract, so that a later and lower
avoided cost is applicable."t' Any contrary rule would allow the reluctant utility to delay the
date on which the rates are calculated - or as in this case, attempt to delay until the only option
offered to the QF is a two-year contract term specifically designed to be unfinanceable and
unviable for all QFs.
Further, Black Mesa's complaint follows the process set forth in FERC's regulations and
orders to establish a LEO. Specihcally, under the LEO rule, "if the electric utility refuses to sign
4e See 18 C.F.R. 5292.304(dX2Xii); FERC v. Idaho P\JC, Case l:13-cv-00141-EJL-REB,
Doc. No. 49-l (D. Ct. Id., Dec.24,2013) (memorandum of understanding agreeing that a LEO
may predate the execution of a contract); Blind Canyon Aquaranch v. Idaho Power Company,
Case No. IPC-E-94-1, Order No. 25802 (Nov. 1994) (finding that "but for the actions of Idaho
Power, which actions we generously characterize as non-facilitating, fthe QF] would have
otherwise had a signed contract containing the average non-levelized avoided cost rates in effect
prior to January 14,1994 [and] [i]t is those rates that Blind Canyon is entitled to receive[.]").s0 JD wind t, LLC,l29 FERC lT6l,l48, atp 29 (2009).51 Virginia Electric and Power Co.,15l FERC'1T61,038, P 25 (2015).s2 Cedar Creek Wind, LLC, 137 FERC 1T 61,006, at P 36 (201 I ).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE I6
a contract, the QF may seek state regulatory authority assistance to enforce the PURPA-imposed
obligation on the electric utility to purchase from the QF, and a noncontractual, but still legally
enforceable, obligation will be created pursuant to the state's implementation of PURPA."53
2. Black Mesa First Attempted to Negotiate with ldaho Power in February 2017
As discussed above, Black Mesa initially sought a PURPA contract from Idaho Power on
or about February 11,2017, by submitting a fully completed Idaho Power Schedule 73
Application for a2}-year non-levelized, non-fueled, published avoided cost rate contract
available to "other" facilities. That initial request was for a single 20 MV/ energy storage QF.
Idaho Power admits that it received the Schedule 73 request for a contract from Black Mesa on
or about February 13,2017.s4
In its Complaint, Black Mesa alleged: "Idaho Power never did respond to Black Mesa's
request in accordance with Schedule 73" and instead it "filed an application ... requesting a
declaratory order that determines the contract term and avoided cost pricing methodology" for
the Black Mesa energy storage QF.tt Having been accused of not responding to the Schedule 73
request, Idaho Power's Answer stated: "Idaho Power admits that it responded to Black Mesa,
within the required time and pursuant to Schedule 73, that it had f,rled a case with the
Commission to determine the proper avoided cost rate and contract terms for Black Mesa's
proposed projects."s6
However, it is not possible to square Idaho Power's response to the allegation that it did
not respond in accordance with the terms of Schedule 73 with its answer claiming that "it
s3 Grouse Creek Wind Park, LLC,l42 FERC I 61,187, at P 40 (2013) (internal quotation
omitted).s4 ldaho Power's Answer and Motion to Dismiss at fl I l.55 Black Mesa's Complaint at fl 16.s6 Idaho Power's Answer and Motion to Dismiss at fl l6 (emphasis added).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 _ PAGE I7
responded to Black Mesa . . . pursuant to Schedule 73."s7 This inconsistency is highlighted by
Idaho Power's allegedly responsive communication, reproduced in its entirety as follows:
Idaho Power received your Schedule 73 Qualifying Facility Energy Sales Agreement
Application ("Application") effective February 13, 2017, in which you have requested an
indicative pricing proposal for the proposed 20 MW Black Mesa Energy battery storage
project. In your Application you request a proposed contracting term of 20 years and
published avoided cost Rate Option 4, Non-Levelized and Non-Fueled Rates.
Idaho Power does not agree that your proposed project is eligible for published avoided
cost Rate Option 4, Non-Levelized Non-Fueled Rates with a 2O-year contract term. On
February 27,2017, Idaho Power 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. See IPUC
Case No. IPC-E-17-01.
If you have any questions, please do not hesitate to contact me.
Sincerely
Isigned]
Michael Darrington
Energy Contractsss
Although Idaho Power provided a communication, Idaho Power did not respond to Black
Mesa's Schedule 73 request "pursuant" to the requirements of that Schedule. The Schedule
specifically and unambiguously requires that Idaho Power:
[S]hall, within l0 business days, notify the Customer [Black Mesa] in writing of any
deficiencies fin the application]
Iand]
Following satisfactory receipt of all information required in Section 1.a. the Company
shall, within 20 business days, provide the Customer with an indicative pricing proposal
... however, that for Qualifying Facilities eligible for Published Rates pursuant to the
Commission's eligibility requirements, the Company will provide such indicative pricing
Id.
Black Mesa's Complaint atBx.4
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE I8
57
58
proposal within l0 business days.5e
Idaho Power did not respond within l0 business days in writing of any deficiencies in
Black Mesa's Application. Idaho Power did not, within l0 business days, provide Black Mesa
with an indicative pricing proposal with eligible published rates. Idaho Power's "response" was
to simply treat Schedule 73 as if it did not exist. Instead of responding as required, Idaho Power
embarked on its three-year-long quest to convince the Commission to change its implementation
scheme for "other" QFs to, for the first time, create a new rate category and contract term limit
for energy storage QFs. For a response to have been properly made "pursuant to Schedule 73,"
Idaho Power would actually have had to comply with, and not completely ignore, the
unambiguous instructions contained in that Schedule.
Of course, Idaho Power does not get to pick and choose which of its tariffs it will obey
and which ones it will ignore, as it has done here. In addition to its obligations under PURPA
and the QF's right to unilaterally create a LEO, Idaho Power must abide by the rates and
schedules approved for use until such are lawfully changed. The foundational utility law precept
known as the "filed rate doctrine" prohibits Idaho Power from ignoring its tariffs.60 This
doctrine is embodied in Idaho Code $$ 6l-313 and 6l-315, which provide that no public utility
shall provide any service rendered to the public other than pursuant to the rates and charges
applicable to such service as specified in its tariffs that are on file with the Commission and in
effect at the time. Idaho Code $ 62-313 specifically provides that:
[N]o public utility shall . . . extend . . . to any corporation or person and form of contract
or agreement or any rule or regulation of any facility of privilege except such as are
specified in such schedule and as are regularly and uniformly extended to all
corporations and persons...
se Idaho Power's Schedule 73 Original Sheet 73-5 at Section 1.b, available at:
https://docs.idahopower.com/pdfs/aboutus/ratesregulatoryltariffsl306.pdf.60 See Louisville & N(tshville R. Co. v. Maxwell,237IJ.S.94 (1915).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE I9
The filed rate doctrine is a touchstone of utility regulation and is uniformly applied throughout
the country, including ldaho.6l No Commission order stayed application of Schedule 73 for
energy storage QFs pending the proceeding Idaho Power had commenced.
Had tdaho Power complied with its tariff in response to Black Mesa's PURPA contract
request in February 20ll,ldaho Power would have given Black Mesa indicative pricing and
allowed the Project to proceed to executing a20-year contract containing published avoided cost
rates. It certainly cannot be disputed, therefore, that but for Idaho Power's willful refusal to
comply with the terms of its Schedule 73, that Black Mesa would have been provided indicative
pricing PURPA contract terms and conditions.
Instead, Idaho Power sought a declaratory ruling from the IPUC that:
[T[he Commission issue a declaratory order, without prejudice to Idaho Power's position
on the validity of the underlying self-certifications, finding that, under the facts
presented, the Proposed Battery Storage Facilities are subject to the same 100 kW
published avoided cost rate eligibility cap applicable to wind and solar facilities.62
Although that ill-fated request ultimately resulted in a federal injunction against the
Commissioners, it also failed in its entirety to respond to the Schedule 73 request for a standard
offer 2O-year PURPA contract. While Idaho Power's petition for declaratory ruling was winding
its way through the courts and commissions, the Black Mesa PURPA contract was essentially
put on ice by Idaho Power.
Nevertheless, Black Mesa continued to actively pursue development of its proposed
project, and indeed was able to expand the development potential of the area by adding a second
10 aMW QF to its portfolio in the Black Mesa area and advance both facilities through the
6r AT&T v. Central O.ffice Telephone,524 U.S. 214,222-2a (1998); Brian Emerickv. Idaho
Power Co., IPUC Case No. IPC-E-00-03, Order No. 28329, at 4-5 (2000).62 Idaho Power's Petition for Declaratory Order, IPUC Case No. IPC-E-17-01, at p.13.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 _ PAGE 20
interconnection and development process.63 Indeed, during this time, Black Mesa received a
Feasibility Study from Idaho Power for a 40 MW-AC joint interconnection proposed for use by
the Black Mesa Energy I and Black Mesa Energy 2 facllities, which has now advanced to
Facilities Study phase.6a ln2019, Black Mesa also secured exclusive rights to finalize site
control with Black Mesa Farms and initiated procurement strategies to ensure the facilities will
still be able to qualify for expiring tax credits upon execution of PPAs.6s As the Declaration of
Brian Lynch demonstrates, the Black Mesa development team have taken all of the steps that
could reasonably be required prior to having the necessary assurance of fully executed PPAs for
the Black Mesa QFs.
Black Mesa Continued lts Attempts to Negotiate with ldaho Power Prior to
Filing the Complaint in 2020
On January 18,2020, the very day after the federal injunction prohibiting the
Commission from re-classifying energy storage QFs as solar QFs was issued, Black Mesa
"reiteratefd] its previous request for an Energy Sales Agreement pursuant to Schedule 73 as
finitially] proposed on2ll0l17 with respect to Black Mesa Energy 1 storage QF."00 Also on
January 18,2020, Black Mesa submitted to Idaho Power a completed Schedule 73 application
with all supporting documents for the Black Mesa Energy 2 storage QF.ót For this second QF
project, Black Mesa also requested a PPA utilizing the non-levelized, non-fueled, published
avoided cost rates for "other" facilities and a 2}-year contract term.
63 Declaration of Brian Lynch In Support of Black Mesa Energy, LLC's Motion for
Summary Judgment atll22-28 (discussing development efforts in 2019).64 Id.65 Id.66 Id. at\ 14; Black Mesa's Complaint at Ex. 5.67 Id.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20.07 -PAGE 2I
3
Ten days later, on February 3,2}2},ldaho Power responded to Black Mesa.68 This time
around, Idaho Power alleged a dehciency in Black Mesa's Schedule 73 Applications by asserting
that Black Mesa failed to supply an adequate estimated 8,760 electrical output profile for the
proposed facilities.6e However, the very next day, on February 4,2020, Black Mesa directly
addressed Idaho Power's alleged deficiency by clarifying for Idaho 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 profile estimates for the proposed facilities, and that such
hourly generation prof,rles are consistent with the capability of the proposed battery storage
facilities as described in the FERC Form 556s for such facilities.T0 Moreover, Idaho Power can
easily supply published avoided cost rates and a draft PPA to a QF without an 8,760 electrical
output estimate, which is used only to calculate non-standard rates through the IRP methodology.
Thus, Black Mesa effectively put the "ball back into Idaho Power's sourt" to either recognize
that the deficiency had been addressed or to again allege another (or continuing) deficiency in
the Black Mesa Schedule 73 Application. This it did not do.
Exhibiting what now appears to be a pattern of willful refusals to abide by its tariffs,
ldaho Power never did respond (directly or indirectly) to Black Mesa's deficiency-addressed
requests for standard offer 2}-year QF contracts. Instead, Idaho Power again ignored the
requirements of its Schedule 73 which requires that it respond to Black Mesa's request for
indicative pricing and tender of a power purchase agreement.
As noted in the prior section, the filed rate doctrine requires ldaho Power to abide by its
68 Id. atl l8; Idaho Power's Answer and Motion to Dismiss at Attach. l.6e Idaho Power's Answer and Motion to Dismiss at Attach. l.10 Declaration of Brian Lynch In Support of Black Mesa Energy, LLC's Motion for
Summary Judgment at fl 19 & Ex. 1.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 -PAGE 22
tariffs, but once again Idaho Power chose to ignore its obligations to respond to Black Mesa that
are contained in its Schedule 73. Idaho Power admits: "It informed Black Mesa that it did not
agree that Black Mesa was entitled to published rates and2}-year contracts, and that ldaho
Power had filed a case with the Commission to determine the proper avoided cost rates and
contract terms for energy storage projects."Tl But, at the time when Idaho Power filed this
second case (Case No. IPC-E-20-02) with the Commission to create a new rate category and
contract term limit specifically for energy storage QFs, the Commission already had a PURPA
compliant implementation plan for energy storage projects - which as discussed above provided
for Black Mesa's entitlement to published rates and2}-year contracts and the "other" published
rates. Furtherrnore, the United States District Court's decision precludes the Commission from
classifying the Black Mesa energy storage QFs as if they are something other than energy
storage QFs (e.g., solar or wind QFs).
ldaho Power did not ask for and the Commission did not grant a stay or moratorium on
approval of new PURPA contracts with energy storage QFs during the pendency of ldaho
Power's second application in Case No. IPC-E-20-02. Nor did Idaho Power seek, or the
Commission grant, any relief that even purported to have a retroactive effect. And as noted
above, the final Order No. 33794 was not issued and legally effective until October 2,2020.
4. Despite Idaho Power's Refusal to Execute PPAso Black Mesa Created LEOs
for Each of the Black Mesa QFs No Later than the Date it Filed the
Complaint on March 17,2020
As noted above, the LEO rule exists to allow a QF to create a LEO through its own
unilateral actions and to "prevent an electric utility from avoiding its PURPA obligations by
refusing to sign a contract, or. . . delaying the signing of a contract, so that alater and lower
7l Idaho Power's Answer and Motion to Dismiss atl2l
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 -PAGE23
avoided cost is applicable."T2 Additionally, the Commission has formerly recognized the right to
form a LEO under the Commission's existing implementation scheme while ongoing
proceedings are pending before the Commission to make generic changes to the Commission's
implementation of PURPA. In the Cedar Creek case, this Commission ultimately found that five
wind QFs created LEOs in December 2010, to published rates available for all QFs sized up to
l0 aMW, including wind QFs.73 It made no difference that the Commission had already
undertaken proceedings to adopt a new implementation plan that would eventually preclude wind
QFs up to 10 aMW from prospectively creating LEOs to such published rates. Indeed, at the
time the Cedar Creek LEOs were formed, proceedings had already been initiated by the utilities
to reduce the eligibility cap for wind QFs to 100 kW, and the Commission had even issued an
order lowering the eligibility cap prior to issuing its order finding LEOs for the Cedar Creek
QFr.to
The Commission has a relatively straightforward standard for determining when a QF has
unilaterally created a legally enforceable obligation on its part to deliver, and on the utility's part
to purchase, all of the output from a QF project. That standard provides:
The Commission found that a legally enforceable obligation cannot exist until a QF takes
sufficient steps to show that it has obligated itself to provide energy to the utility and
72 Cedar Creek íünd, LLC,I37 FERC '1161,006, at P 36 (2011).73 In Re Firm Energlt Sales Agreement Between Rocþ Mountain Power and Cedar Creek
Wind, LLC et al., Case Nos. PAC-E-11-01 et al., Order No. 32419, at p. 8 (Dec. 21, 2011). The
Commission's order explains:
Based upon the Parties' assertions in the Settlement Stipulation and our review of the
record, we find that the record reveals that Cedar Creek had perfected a legally
enforceable obligation no later than December 13, 2010. As such, Cedar Creek was
entitled to the published avoided cost rates available to l0 aMW QFs in effect as of
December 13,2010.
rd.
74 Id. at3
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 -PAGE 24
that, but for the utility's conduct, the parties would have entered into a contract.Ts
The Commission's standard can be subdivided into the following three distinct tests: (l) the QF
takes sufficient steps toward obligating itself to provide energy; (2) but for the utility's conduct a
contract would have been executed; and (3) the QF's action in furtherance of its intent to obligate
itself. Black Mesa has complied with each of these Steps.
It is hard to imagine more concrete evidence of having taken "sufficient steps" toward
obligating itself to sell the output from its two QFs to Idaho Power than by demonstrating that
Black Mesa completed and submitted Schedule 73 Applications asking Idaho Power to tender
power purchase agreements. The Schedule 73 applications were submitted in2017 (Black Mesa
l's predecessor only) and again in2020 (for Black Mesa I and Black Mesa 2). Furthermore, and
as explained in the prior section, when Idaho Power noted a possible deficiency inthe 2020
Application, Black Mesa responded with additional information in writing and within 24 hours
of having received notice of the alleged deficiency. Thus, Black Mesa fully complied with all of
Idaho Power's (and this Commission's) requirements for obtaining power purchase agreements
from Idaho Power. It would be an unfair trap and a violation of basic notions of due process to
assert that compliance with the only Commission established methodology (Schedule 73) for
obtaining a power purchase agreement is somehow an insufficient step toward obligating itself to
provide energy.
Step Two requires a showing that "but for" Idaho Power's acts the Black Mesa projects
would have proceeded to the contract execution phase of the process. Had Idaho Power
responded, as required in Schedule 73, the Projects would have been able to move forward to a
7s XRG-DP-7, LLC et al. v. PacifiCorp,IPUC Case No. PAC-E-10-08, Order No. 32657 at
7 (Oct. 5,2012).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE 25
mutually executed contractual anangement for each energy storage QF. However, Idaho Power
never responded after Black Mesa's prompt response to its alleged "deficiency" in the Schedule
73 Application.T6 The "but for" test is also therefore satisfied. Idaho Power's failure to respond
and to keep the give-and-take process moving forward as is required by Schedule 73 is the
foundational reason Black Mesa does not have executed power purchase agreements with Idaho
Power. Black Mesa placed the ball squarely in Idaho Power's court, and ldaho Power never
returned the service.
Finally, under Step Three, the "QF's action in furtherance of its intent to obligate itselfl'
has already been demonstrated through Black Mesa's Schedule 73 efforts noted above.
However, Black Mesa went well above and beyond the base requirements of that Schedule. In
addition to complying with both the letter and the spirit of the Commission's sole method
(Schedule 73) for seeking a power purchase agreement, Black Mesa took the additional step of
actually executing and tendering to Idaho Power two separate power purchase agreements for its
two QFs.77
Neither the Commission's implementation plan for PURPA nor Idaho Power's Schedule
73 require the QF to go so far as to actually tender a contract in order to demonstrate "intent to
obligate itself." Nevertheless, Black Mesa took this extraordinary step in order to quash any
post-hoc assertion that it was not serious in its intent to obligate itself to selling the output from
its two QFs to Idaho Power. In its letter transmitting the executed power purchase agreements,
Black Mesa reiterated and explicitly expressed its intent to obligate itself to the creation of a
LEO. That obligation took the form of unilaterally executed power purchase agreements that
76 Declaration of Brian Lynch In Support of Black Mesa Energy, LLC's Motion for
Summary Judgment atl20.77 Id. atl16; Black Mesa's Complaint at Ex. 6.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
TPC-E-20-07 -PAGE26
are based on ldaho Power's prior approved QF contracts. Black Mesa asserted, in its transmittal
letters, that:
Black Mesa herby enters into a legally enforceable obligation to provide such capacity
and energy to ldaho Power and is submitting executed Energy Sales Agreements for Each
Project for your counter signature.
These energy storage facilities have the capability to provide additional value to Idaho
Power's system via limited dispatchability. While our commitment, evidenced by the
enclosed executed contracts, is binding and enforceable, we are willing to discuss
possible amendments to these obligations to accommodate Idaho power's load following
and ancillary service needs.78
It is difficult to imagine a more explicit demonstration of a QF's intent to obligate itself.
Furthermore, Black Mesa's efforts to advance the development of the two facilities
further evidences its actions in furtherance of its intent to obligate itself. Black Mesa has
incurred substantial financial expense and reasonably advanced the development despite the lack
of fully executed PPAs, and even attests to its ability to bring the facilities online within one year
of a final non-appealable order granting the LEOs should the Commission deem that necessary
and Idaho Power cooperate with such efforts.Te
In sum, the summary judgment record compels a conclusion that there is no material
dispute of fact and Black Mesa has satisfied the applicable legal requirements for the creation of
a LEO to the published avoided cost rates for "other" QFs and 2}-year contract terms for each of
its QFs.
Idaho Power Relies on a Fatally Inconsistent Argument in lts Attempt to
Thwart QFs'Rights to Utilize this Commission's Established
Implementation of PURPA
The Commission should reject Idaho Power's argument in opposition to Black Mesa's
78 Black Mesa's Complaint at Ex. 6.7e Declaration of Brian Lynch In Support of Black Mesa Energy, LLC's Motion for
Summary Judgment at ll 22-28.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC.E-20-07 -PAGF.27
5.
LEOs, which amounts to an argument that Idaho Power can unilaterally stall creation of a LEO
for over three years while it attempts to change the extant PURPA implementation plan
applicable to prospective QFs.
The foundational issue facing the Commission is summarized at Paragraph 28 of the
Black Mesa Complaint:
28. Idaho Power has illegally refused to abide by its own lPUC-approved process for
executing power purchase agteements with QFs.
Idaho Power, of course, mechanically denied the allegation contained in the Complaint's
Paragraph 28. However, beyond its rote denial, the Power Company went on to explain in its
Answer to Paragraph2S that
Idaho Power is not refusing to purchase from Black Mesa at the avoided cost rate and
contract term and conditions required and approved by the Commission, and has asked
the Commission to set and approve the same.8O
Idaho Power repeated this same defense throughout its Answer. At Paragraphs 30 and 3l
of the Complaint, Black Mesa asserted that
30. Black Mesa committed itself to sell energy and capacity from its Black Mesa Energy
Storage 1 to Idaho Power.
31. Consequently, Black Mesa has committed Idaho Power to buy from its Black Mesa
Energy I Storage QF.8r
Again, Idaho Power asserts in response that:
Idaho Power is not refusing to purchase from Black Mesa at the avoided cost rate and
contract term and conditions required and approved by the Commission, and has asked
the Commission to set and approve the same.82
80 Idaho Power's Answer and Motion to Dismiss at fl 28.8r Black Mesa's Complaint at flfl 30-31. Mirror image allegations on behalf of Black Mesa
Energy 2 energy storage QF are made at Paragraphs 39 and 40.82 ldaho Power's Answer and Motion to Dismiss at'lJ 31 ; accord id. a|137,40.
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 _ PAGE 28
The fatal inconsistency of Idaho Power's defense is obvious. In the first phrase of the
sentence, Idaho Power admits to the existence of,"the avoided cost rate and contract terms and
conditions required and approved by the Commission "83 Then in the second phrase of the
sentence, Idaho Power directly contradicts itself by admitting that it "has asked the Commission
to set and qpprove the same."84 Of course, it is impossible to refuse to offer to purchase at
rates/contract terms that are in existence while at the same time the approval of those
rates/contract terms is still pending approval by the Commission.
This inconsistency is fatal to ldaho Power's claim that Black Mesa has not created a
LEO. It highlights Idaho Power's bad faith attempt to sabotage the QFs' attempts to secure
power purchase agreements under the unambiguous process set forth in Schedule 73. On the one
hand, the ldaho Power admits (as it must) to the existence of Commission-approved
rates/contract terms, while on the other hand, Idaho Power refuses to honor those existing
rates/contract terms because it asked the Commission to approve completely different rates and
contract terms. But, as discussed previously, Idaho Power never requested, and the Commission
never purported to grant, any moratorium on its previously effective implementation scheme for
"other" QFs, or any retroactive applicability of the new implementation scheme that creates a
new rate category and term limitation for energy storage QFs. Thus, for all of the reasons set
forth above, the Black Mesa QFs lawfully created 2D-year LEOs to the published rates available
for "other" QFs in effect on the date of the Complaint.
V. CONCLUSION
Black Mesa respectfully requests that this Commission issue an order granting summary
Eg., Idaho Power's Answer and Motion to Dismiss atl28 (emphasis added).
Id. (emphasis added).
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 _PAGE29
83
84
judgment in Black Mesa's favor and declaring that Black Mesa has formed two legally
enforceable obligations: (l) committing Idaho Power to purchase the net output of the Black
Mesa Energy I storage QF for a2}-year term of power sales utilizing the Commission's
published avoided cost rates for o'Other" facilities in effect on the date of the Complaint; and (2)
committing Idaho Power Company to purchase the net output of the Black Mesa Energy 2
storage 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.
DATED this l4th day of December 2020.
RICHARDSON ADAMS, PLLC
Peter J. Richardson (ISB No. 3195)
Gregory M. Adams (ISB No. 7454)
Richardson Adams, PLLC
515 N. 27th Street
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter@richardsonadams. com
gre g@richardsonadams. com
Attorneys for Black Mesa Energy, LLC
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE 30
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the l4th of December 2020, a true and correct copy of the within
and foregoing BLACK MESA ENERGY'S 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
j an.noriyuki@f uc. idaho. gov
Edward. i ewell@puc. idaho. gov
Idaho Power Company
Donovan Walker, Attorney for Idaho Power Company
dockets@idahopower. com
dwalker@idahopower. com
By:
Peter J. Richardson (ISB No. 3195)
BLACK MESA ENERGY, LLC'S MOTION FOR SUMMARY JUDGMENT
IPC-E-20-07 - PAGE 31
F