20100429Answer, Affirmative Defenses.pdf

APR-29-2010(THU) 09: 15 P.002/0JO
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Mak C. Moench
Daniel E. Solander
Rocky Mounta Power
201 South Main Str, Suite 2300
Salt Lakc City, Uta 84111
Telephone: [phone]
¡"ax: [phone]
mark.moench(êpacifcorp.eom
dae1.soiand~acificorp.com
,
t f
~.. ¡
Jeffy S. Loviner
Keneth E. Kaufiann
Lovinger Kaufm LLP
825 NE Mu11nomah, Suite 925
Portland. Oregon 97232
Telephone: [phone]
Fax: [phone]
lovingerWklaw.com
kaufan(glkaw.eom
. Attrneys for Defendant PacifiCorp
BEFORE THE IDA.O PUBLIC UTILITS COMMSSION
WlLAND, INC.,
Complait,
v.
)
) Cae No. PAC-E-IO-05
)
) ANSWER
) AN AFFIRTIVE DEFENSES
)
)
PACIFICORP,
'" Defendat.
1 Puuant to lDAPA Rule 31.01.01.057, PacifiCorp, dba Roeky Mountain Powe?
2 ("Rock Mountan Power''), hereby anwers thc Complait filed by WincUand. Inc.
3 ("Windland'') in Case No. PAC-E-lO-05.
i In as much as PacilCorp engages in regulatory prceedings before this Commission as Rocky Mountain Power,
and includes resources such as the one in dispute here in rates set by this Commission for Rocky Mountan Power.
we wil thoughout this proceeding refer to PacifCorp as Rocky Mountain Power for consistecy with the utlity's
regulatory presence before the Commission.
Rocky Mounta Power's Aner and Affrmative Defenses OR/GIN
APR-29-2010(THU) 09: 15 P.003/010
1 ~ NATUE OF TH CASE
2 Tn its Complait, Windland eroneously alleges tht it crated a mutual, legally
3 enforceable 20-yea obligation with Rocky Mountain Power for two 21.6 MW wid project on
4 Mach 12, 2010 - ten business days afer it firt provided Rocky Mountan Power with basic
5 information about its proposed projects. Windland first submittd basic infonntion about each
6 of its two PURPA2 qualiiying facilty ("QF") wind projects located in Power County, Idao, on
7 Februar 26, 2010.3 On Marh 10, 2010., Rocky Mounta Power requested additional
8 inormation necess to penorm due diligence and to prepare two draft power purcha
9 agreements ("PPAs"). On Marh 12, 2010, WincUand responded with a 103-page packge of
10 materials it prear in response to Rock)' Mounta Power"s Marh 10 letter. While Rocky
1 1 Mounta Power was performg due dilgenee and preparing project-specitic PPAs basd on the
12 inbimation provided in Windlad's March 12 response, Wind1an, on March 29, 2010,
13 forwded to Ro.cky Mountan Power two PPAs prepad by Windland without Rocky Mounta
14' Power input and signed on the execution block by Windland Direcor of Marketing and
15 Development, Michael Heckler ("March 29 PPAs"). The March 29 PPAs contained avoided
16 cost prices in effect prior to the Commission's Order No. 31025 (which order revised avoided
17 cost rates downwa effective Marh 15,2010). The March 29 PPAs also omitted any relerce
18 to delay detàult secwity. Mr. Heckler stated in his March 29 cover let tht Windland would
19 ask the Commission to compel Rocky MOWltain Power to execute the Marh 29 PP As if Rock
20 Mowita Power did not execute them, or provide "suitable, executable substtute agrements. . .
21 by Apr 1, 2010 with the avoided cost rates in effect pror to March 12." Rocky Mounta
2 Public Utility Rcg~latry Policies Act of 1978,16 U.S.C. §§ 824a-3 1ft slfq.
3 Those two project are know as Power County Wind Park Nor. LLC. and Power County Wind Park South,
LLC, and ar reered to in this Answer as the "Power County QFs".
Rocky Mounta Power's Anwer and Afative Dcfenes 2
APR-29-2010(THU) 09: 15 P.OOll/OIO
1 Power did not execute the Mach 29 PPAs, but responded in writig on April 110 Windland's
2 March 12 letr and its Marh 29 litigation threat. Rocky Mountan Power stted in its Apri 1
3 lettr tht it would forward two complete dr PPAs to Wind1and on April 2, 2010. It also asked
4 Wind1d to affnn its wìlliígÌess to post dc1ay default security. Rocky Mountain Powe made
5 this request in respons to Wind1ands statement, in its Mah 12, 2010 materials, th the
6 Commssion docs not require QFs to post securty for contracts based on non-Ievelizd rates. On
1 April 2, 2010, Rocky Mountan Power set Windlad two draft PPAs t"Apri 2 PPAs") and
8 asked WincUand for its comments. The Apr 2 PPAs contaed the new avoided cost prices and
9 provisions requirg Windland to post delay default security. On Aprl 6, WincUand fied th
10 Complait seekig as relief two PPAs, with avoided cost prices in effect on Marh 12,2010, and
11 with no delay default secuty requiment. Rocky Mountan Power denes that Windlan~ is
12 entitled to the prices in effcct on or before Marh 12,2010 because Windland did not estblish a
13 legaly enorceable C?bligation with Rocky Mountai Power on or be:tore that date, under PURPA
14 and related Idao law and reguation. Rocky Mountain Power denies, fucr, tht Oie
15 Commission does not allow Rocky Mountan Power to require delay detàu1t security as a
16 condition to a stadard QF power purchase agrement based on non-Icvelized raes.
17 B. PRELIMARY MATTERS
18 Copies of all pleadings and oth corspondence in this matter should be sered upn
19 counsel for Rocky Mounta Power at:
Jeffrey S. Lovinger
Keneth E. Kaufmam
Loviger Kaufmann LLP
825 NE Mu1tno~ Suite 925
Portlan~ Oregon 97232
Telephone: [phone]
Fax: [phone]
10vinger§1w.com
kaufan~lklaw.com
Mark C. Moench
Danel E. Solander
Rocky Motmtain Power
201 Sout Mai Strt, Suite 2300
Salt Lae City. UT 84111
Telephone: [phone]
Fax: [phone]
mark.moench.pacifcorp.com
danc1.so1ander(?acificorp.com
Rocky Mountain Power's Answer and Aftivc Defenses 3
APR-29-2010(THU) 09: 15 P.005/010
1 c. ANSWER
2 Rocky Mountain Power hereby anwers Windlands Complaint in the above-captioned
3 proceeding and states as fbllows:
4 1. Rocky Mountain Power admits the alegations ofpargrapli 1.4
5 2. Having insuffcient inormtion or knowledge regarding the trth or fality
6 of the allegations of paragrph 2, Rocky Mountain Power denies the
7 allegations contaed therin and leaves Windland to the prooftherot
8 3. The allegations of pargraph 3 are conclusions oflaw reuiin no reonse.
9 4. The allegations of pargraph 4 are conclusions oflaw requiing no reponsc.
10 5. Rocky Mounta Power adits the allegations of paraph 5.
11 6. Rock Mowitain Power admits the alegations in pargrph 6.
.12 7. Rocky Mountan Power admits tht Windland, as par of the 2007'
13 discussions bctween the parties, grted consent tòr PacifiCorp
14 Traission Serces to communcate with PacitìCoip Commercial and
15 Traing and that, in Febniai 2005, PaciCorp Transmission Services
16 conducted interonnccton studies for Windlards proposa to inteconnect a
17 wid project of up to 150 MW. Rocky Mounta Power otherse denies
18 the allegations of pargrph 7.
19 . 8. Rocky Mounta Powe admits the allegation of parph 8.
20 9. Rocky Mounta Power admits the allegaon of parph 9.
21 10. Rocky Mountan Power admits that counsel for Windland filed notices of
22 self-cerfication of Power County Wind Park Nort LLC and Power
4 Tn this section, "pargmph" refer to the com:pondingly numbered pmirah in WindJand's Complant.
Rock Mounta Power's Answer and Aftive Dcfcncs 4
APR-29-20i O(THU) 09: 15 P.005/010
1 County Wind Park South~ LLC as QFs afer 5:00 pm MPT on Ma:h 2,
2 2010. Rocky Mounta Power adts that eah of the Powe County QFs
3 proposes a nameplate capacity of2L.6 MW. Rocky Mounta Powe admits
4 tht QFs arc entitlcd to sell power to any elecic utilities including Rocky
5 Mounta Power, unde PURA. Rocky Mountan Power otherwse denies
6 the allegations of pagraph 10.
7 11. Rocky Mounta Power denes the allegations of pagraph i 1.
8 12. Rocky Mountan Power admits that it is not required under Idaho law and
9 has not filed with the Commssion a lit of infonnaton Idao QFs must
10 provide for Rocky Mounta Power to complet a stdad PURP A PPA.
11 Rocky Mounta Power otherse denies the alegations in pargraph i 2.
12 13. Rocky Mountain Powe adts that Windlands respnse to Rocky
13 Mountain Power~s March 10 additiona inormation request wa prompt.
14 Rocky Mounta Powcr othcise denies the allegatons of paragrph 13.
15 14. Rocky Mounta Powcr dcnics that any of its acons have uneasnably
16 delayed the process for ncgotiating and executing a PUR A cont for
17 Idaho QFs under 10 aM.
18 15. Rocky Mounta Power denies that it delayed the PPA negotiation process
19 by inistg on iibrmtion regarding Windlands creditwortnes. Rocky
20 Mountain Power further denies that inormation regarding Windlands
21 creditwortess is irelevant to Rocky Mountain Power's prepaation of
22 Windlands requested PUR A contracs. As Rocky Mountain Power
23 explained to Windland in its April 1, 2010 leter, Rocky Mountain Power
Rocky Mounta Power~s Anwer and Affirative Defense 5
APR-29-2010(THU) 09: 17 P 0071010
1 uses creditwortiness informtion to consider downward adjustment to a
2 QF's delay default securty. When Windland refused to providc such
3 inormation, Rocky Mountan Power wa reuired to detcne t.he delay
4 default securty requirement without input frm Windland.
5 16. Rocky Mountan Power denies tht it insists On delay default security in
6 order to dclay a QF's PUR A contrct negotiation. Rocky Mounta Power
7 denies tht it would incur no daages in the event of a delay defuult at one
8 or both ofWindlands projects.
9 17. Rocky Mountain Power admts tht the paies have not executed a PPA for
10 either Power County QF as of April 29, 2010, but othrwse denies the
11 allegations of pargrph 17.
12 18. The alegations of pargraph 18 have bcen previously addressed, above.
13 19. Whéthcr Windland ha attempted to negotiate in good, fath is a conclusion
i 4 of law requig no response. Rocky Mountan Power otherse deies the
15 allegations in paragrph 19.
16 20. Rocky Mounta Powe denies the allegations orparagrph 20.
17 21. Rocky Mounta Powe denies th allegation of pargrd.ph 21.
18 22. Rocky Mounta Power dcnies the allegations of pargrph 22.
19 Rocky Mounta Power denes any allegation not specifically admittd above. Rocky
20 Mounta. Power reseres the right to supplement th Answer or fie a new Answer in the event
21 Windland amends or otherwise modifcs its Complaint. Rocky Mountai Power reseres the
22 right to asser and file any afirtive or special defense that may beme known by discovery
23 proceedings or other means.
Rocky Mowita Power's Answer and Affnnative Defens 6
APR-29-20 10 (THU) 09: 17 P.OOB/OIO
1 D. AFIRATI DEFENSES
2 For its i"lRST AFFIRMTI DEFENSE, Rocky Mounta Power states Windland is
3 not entitled to thc relief sought in its Complait bccause Winand and Rocky Mounta Power
4 did not execute any PPA for the Power County QFs prior to Mach 15,2010.
5 For its SECOND AFFIRMTIVE DEFENSE. Rock Mounta Power states Windland
6 is not entitlcd to the relief sought in its Complait beause Wind1an denies that it is requied to
7 post delay default security in order to exccute a small QF PP A with non-levelized avoided cost
8 prces.
9 For its THI AFFIRMTIVE DEFENSE, Rocky Mounta Power states Windland is
10 not cntitlcd to the relief sought in its Complait beause, cvcn if Windland did first provide all
11 essetial information to Rocky Mounta Power on Marh 12, 2010. Windla.d canot create a
12 . legally enforceable obligation on tht sae date as a matter of law.
13 For its FOURTI AFIRATI DEFENSE, Rocky Mounta Power states Windland
14 is not entitled to the relief sougt in its Complait beause the :1àcts alleged do not show tht
15 Rocky Mountain Power acted in bad fath as a matter of law.
16 For its Fll"'TH AFFIRMTIVE DEFESE, Rocky Mounta Powcr sttes tht Windland
17 is not entitled to the relief sought in' its Complait becausc Winand's Power County QF
18 projects were not suffciently mature to form a 1cga11y enforceable obligation on or beforc Mah
19 12,2010, as amatt oflaw.
20 WHEREFORE, Rocky Mounta Power herby respetfly requcst that the
21 Commision declare tht Windlands Power County QFs are not entitled to Idaho's avoided cost
22 rates in effect prior to Marh 15,2010.
Rocky Mountan Power's Answer and Afve Dcfcnses 7
APR-29-2010(THU) 09: 17
Dated ths 21 til Day of Aprl 2010.
Respctfully submitted,
gtiark C. Mo USB 2284
Danel E. Solander USB 11467
Rocky Mounta Power
Kenneth E. Kaufian, OSB 982672
Jeffy S. Lovier, OSB 960147
Lovier Kaufn LLP
Allorneys for Rocky Mountain Power
Rocky Mountain Power's Aner and Afative Dcfcncs
P. 009/010
8
APR-29-2010(THU) 09: 18 P.010/010
CERTIICATE OF SERVICE
I HEREBY CERTIFY that, on th 29th day of Aprl, 2010, T served a tre and correc
copy of the foregoing Rocky Mounta Power's Answer and Affrmatíve Deftnses in
Case No. PAC-E-10-05 on 1he following named persons/entities by bad deliver or
U.S. Mail as specified below, properly addrssed with postage prepaid, and by
electrnic mail:
Jean Jewell
Commssion Sccr
Idaho Public Utilities Commssion
472 W Washington
Boise, ID 83702
jea. jewel i (Quc.daho. gov
(Hand Deliver)
Grgory M. Adams
Richardson & O'Lear PLLC
POBox 7218
Boise, il 83707
grg§nchardsnardolear.com
(Firt Class U.s. Mail)
Mark C. Moench
Rocky Momita Power
201 Sout Main Street, Suite 2300
Salt Lae City, UT 84111
mak.mocnch((n.acificom.com
(First Class U.S. Mai)
Peter J. Richadson
Richardson & O'Lea PLLC
POBox 7218
Bois,ID 83707
peter(Iricharsonandolcm.com
(Firt Clas U.S. Mall)
Danel E. Solandcr
Rocky Mounta Power
201 South Main Street, Suite 2300
Salt Lae City, U1' 84111
dani el .so landeiÚJ)acificorp.com
(Fir Class U.S. Mail)
"-DATED tls~ day of April, 2010.
LOVINGßR KAUFMA LLP
~&tKennet E. Kaufman
Attoniey for PacifiCorp