20110309Reply to XRG, Motion for Summary Judgment.pdf

LOVIGER I KAUF LL
825 NE Multnomah . Suite 925
Portand, OR 97232-2150
office [phone]
fa [phone]
_ . J~s._Lo~.co
March 8, 2011
VI HA DELIVRY AN ELCTRONIC MAL
Jean D. Jewell, Secretar
Idaho Public Utilties Commission
472 W Washington Street
POBox 83720
Boise,ID 83720-0074
r.i:-~
Re: Case No. PAC-E-I0-08
XRG, Complainant, vs.
PACIFICORP dba ROCKY MOUNTAIN POWER, Defendant
::~::
ico rr~
-0:i
Dear Ms. Jewell:
.i...:N
Enclosed for filing in the above-captioned docket are an original and seven (7) copies of
Rocky Mountain Power's Reply to XRG's Answer in Oppositon to Rocky Mountain Power's
Motion for Protective Order to Stay Discovery and Motion for Summary Judgment and an
original and seven (7) copies of Affdavit of Bruce Griswold in Support of Rocky Mountain
Power's Motion for Summary Judgment.
An extra copy of ths cover letter is enclosed. Please date stamp the extra copy and retu it to
me in the envelope provided.
Than you in advance for your assistance.
Sincere0/
;¿i;
cc: PAC-E-I0-08 Service List
Enclosures
Mark C. Moench
Daniel E. Solander
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
Fax: [phone]
mark.moench~pacificorp.com
daniel. solander~pacificorp.com
F~ECE!
l1111 lf ÊR _1",/,." v poe" L* f-3.ii " q
Jeffrey S. Lovinger
Kenneth E. Kaufmann
Lovinger Kaufmann LLP
825 NE Multnomah, Suite 925
Portland, Oregon 97232
Telephone: [phone]
Fax: [phone]
10vinger~lklaw .com
kaufmann~lklaw.com
Attorneys for Defendant
Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
XRG-DP-7, XRG-DP-8, XRG-DP-9, XRG-DP-
10, LLCs,
Case No. PAC-E-lO-08
Complainant,
ROCKY MOUNTAIN POWER'S
REPLY TO XRG'S ANSWER IN
OPPOSITION TO ROCKY
MOUNTAIN POWER'S MOTION
FOR PROTECTIVE ORDER TO
STAY DISCOVERY AND
MOTION FOR SUMMARY
JUDGMENT
v.
PACIFICORP, DBA ROCKY MOUNTAIN
POWER,
Defendant.
PacifiCorp, dba Rocky Mountain Power ("Company"), respectfully submits this
reply to XRG's answer to Rocky Mountain Power's motions for protective order and
summary judgment.!
i The Commission's procedural rules do not provide for or prohibit the submission of a reply to an answer
fied in opposition to a dispositive motion. LR.C.P. 7.3(b)(3)(E) provides for both responses and replies to
motions. XRG's answer raises a number of points not addressed by the Company's motion for summary
ROCKY MOUNTAIN POWER'S REPLY 1
I. INTRODUCTION
More than four months after the Commission modified published avoided cost
rates in Order NO.3 1025, XRG fied a complaint seeking grandfathered rate treatment.
The Company has moved for summary judgment on three grounds.
First, contrary to Commission grandfathering criteria and the doctrie of laches,
XRG failed to fie a complaint before (or even shortly after) rates changed. This alone
justifies denial of grandfathered rates.
Second, when rates changed, XRG's proposal was not matue enough to form the
basis of a legally enforceable PURPA obligation. Specifically, XRG proposed to deliver
off-system output the Company at the to Brady Substation, but XRG did not have
interconnection agreements or transmission service agreements with the transmission
providers and XRG could not articulate a technically or financially viable strategy for
delivering output to the Company at Brady. The Company has no obligation to purchase
off-system power before a QF establishes a viable method of delivery to the Company's
system. XRG's conceptual proposal is not matue enough to establish a right to
grandfathered rates.
Third, the Commission has repeatedly recognized that a QF must actively
negotiate before it is entitled to a power purchase agreement (PP A) at published rates.
On the undisputed facts of this case, XRG failed to actively negotiate. XRG obtained
draft PP As from the Company in May and October 2009 but never provided any
judgment and includes: (1) a motion to stay resolution of the motion for summar judgment pending
completion of discovery (Answer at 16); and (2) a motion to amend the complaint (Answer at 18 n. 9).
Rocky Mountain Power submits this reply in the belief that it wil aid the Commission in resolving the
pending motion for summar judgment. This reply has been fied within fourteen days ofXRG's answer
and associated motions. In the event the Commission deems it necessary, the Company respectful1y
requests that this reply be considered alternatively as an answer to XRG's motions.
ROCKY MOUNTAIN POWER'S REPLY 2
comment, redline mark-up, or other feedback on the drafts. Because XRG did not even
respond to the Company's draft PPAs, the Commssion may conclude that XRG failed to
actively negotiate as a matter of law.
In response to the Company's motion for sumary judgment, XRG raises a
number of technical objections, each of which is addressed below. In its principle
substantive objection, XRG asserts that the Company's position on transmission
constraints at Brady was a bad faith attempt to avoid PURP A obligations. XRG asserts
that the Company's refusal to take more than 23 MW of output at Brady prevented XRG
from actively negotiating PP As and from developing solid transmission or
interconnection plans. This objection is unpersuasive.
The Company denies that it acted improperly in raising concerns about
transmission constraints at Brady or that it sought to avoid its obligations under PURP A.
But even if the Commission accepts for the sake of argument that Rocky Mountain Power
was wrong about transmission constraints at Brady, such a conclusion does not prevent
the Commission from granting summary judgment and denying grandfathered rates.
The Company's position on transmission constraints does not excuse the fatal
flaws in XRG's claim. The Company informed XRG in March 2009 that it could not
accept more than 23 MW of output at Brady. XRG could have fied a complaint seeking
a Commission ruling on that question at any time thereafter. The Company's position
certainly did not prevent XRG from fiing a timely complaint for grandfathered rates
prior to or shortly after the rate change. Nor did the Company's position prevent XRG
from responding to the draft PP As provided by the Company in May and October 2009.
Finally, the Company's position on transmission constraints at Brady did not prevent
ROCKY MOUNTAIN POWER'S REPLY 3
XRG from obtaining interconnection and transmission service agreements with
transmission providers or from otherwise establishing a technically and financially viable
proposal for delivering output to the Company at Brady. Whether XRG seeks to compel
the Company to purchase 23 MW or 70 MW of off-system power, XRG must establish a
viable delivery proposal before the Company has any PURP A obligation.
In sum, the undisputed facts show that XRG failed to fie a timely complaint for
grandfathered rates, failed to respond to a draft PP A or otherwse actively negotiate, and
failed to establish a viable plan to deliver power to the Company's system-under these
circumstances the Commission can and should deny grandfathered rates as a matter of
law.
II. MATERIAL FACTS2
XRG has failed to show any genuine issue regarding the following material facts:
A. The Company consistently told XRG, from March 2009 through March 15,
2010, that it would only accept 23 MW at Brady.
The Company told XRG it would accept only 23 MW at Brady, on March 23,
May 11, October 2,2009, and April 13,2010.3 XRG does not dispute this; in its answer,
XRG asserts "Rocky Mountain Power consistently and unequivocally relied on the
perceived transmission problem to reject XRG's request for 4 PPAs.',4
2 With its motion for summary judgment, the Company filed: (i) Exhibit A, a bound catalog of al1 written
communications between XRG and the Company concerning the XRG Projects from the date of XRG's
initial request for power purchase agreements (January 29, 2009) through the date it fied its complaint
(July 29, 2010); and (ii) Exhibit B, excerpts from XRG's responses to the Company's discovery requests.
3 Exhibit A at 111 (March 23, 2009), 139 (May 11,2009),209 (October 2,2009),299 (April 13,2010). Al1
references herein to "Exhibit A" refer to Exhibit A to the Company's motion for summar judgment.
4 Answer at 7.
ROCKY MOUNTAIN POWER'S REPLY 4
B. XRG never commented on the draft power purchase agreements provided by
the Company, or otherwise provided feedback regarding the terms of a power
purchase agreement.
On May 11, 2009, the Company sent XRG a draft PPA attached to an email
requesting that XRG "(p Jlease provide a redline to this document with your proposed
changes for discussion."s XRG responded the next day that it would review the draft
PPA and get back to the Company shortly.6 XRG reiterated, on July 6, 2010, that "(wJe
shall provide a redline to this contract and the other 3 identical contracts proposed for
XRG-DP 7, 3, 9, and 10.,,7 On October 2,2009, the Company sent XRG a revised draft
PPA, again asking XRG to "(pJlease provide comments on this draft for your XRG-DP-
10, LLC project including any updated project information."s On March 11, 201O--nly
days before the rate change-XRG again indicated that it would provide a redline mark-
up of the draft PP A.9 XRG does not dispute that it never provided comments, via redline
or otherwise, regarding the substance of either draft PP A. i 0
5 Exhibit A. at 117.
6 ¡d. at 197.
7 ¡d. at 201.
8 Id at 209.
9 Id at 289.
10 In its answer, XRG asserts, presumably as a rationale for why it never commented on either draft PPA,
that the Company "has provided no evidence that any terms were in dispute." Answer at 20. It is
fundamental that non-communication is not a valid basis of formation of a PP A between the Company and
XRG. As detailed in the Company's motion for summary judgment, the Commission requires that the QF
developer actively negotiate a PP A and provide the utility with an opportnity to conduct due diligence on
the proposed terms of any purchase agreement. At minimum, active negotiation requires that a QF
developer provide comments and proposed revisions on a draft PP A especial1y when the developer
repeatedly indicates that it intends to provide revisions and comments (suggesting to any reasonable
counter-party that the developer has revisions to propose and that the terms of the draft agreement remain
unresolved). If, as XRG appears to suggest in its answer, there where no disputed terms, then XRG should
have communicated to the Company that it had no comments or revisions on the draft PP A and that it was
prepared to execute PPAs for al1 four proposed projects on the terms contained in the Company's draft
PP A. It is undisputed that XRG never provided the Company with comments, revisions, or unconditional
approval of the draft PPAs.
ROCKY MOUNTAIN POWER'S REPLY 5
C. When it knew rates were about to change, XRG did not attempt to obligate itself
to one or more PP As.
On March 10, 2010, XRG's counsel received notice that the Commission would
soon revise the published avoided cost rates. i i On March 11, 2010, XRG sent an email to
the Company stating that XRG intended to take the draft PPA provided by the Company,
replicate it for all four proposed projects, and provide a redline mark-up of all four
PPAs.1i On March 12,2010, XRG's attorney wrote the Company because XRG heard
that published avoided cost rates were about to change. The letter asked the Company to
"either; (1) confirm our understanding that we are entitled to the curent rates and follow
up with a contract containing the same; or (2) please tender an execution ready agreement
containing the current rates by retu mail.,,13 Tellngly, neither of these XRG
communications stated that XRG was obligating itself to deliver and sell 70 MW of
output to the Company at Brady Substation.
D. At the time the rates changed, XRG had not established the feasibilty of
transmitting its output to Brady.
In its answer, XRG cites to its responses to the Company's discovery requests 31
and 32 as evidence of its progress in verifying the availability of transmission.14 Those
responses state that XRG first submitted interconnection requests to Bonnevile Power
Administration (BPA) for all four XRG Projects on November 1, 2006, but that BPA
ii In The Matter of the Atlustment of Avoided Cost Rates for New PURPA Contracts for Avista
Corporation DBA Avista Utilities, Idaho Power Company, and PacifCorp DBA Rocky Mountain Power,
IPUC Case No. GNR-E-IO-Ol, Order NO.3 1092, 11 (2010) (statig that Peter Richardson "concede(s he)
received a copy of Staffs (March 9,2010) letter the next day (March 10,2010)").
12 Exhibit A at 289.
13 Id. at 296.
14 Answer, Exhibit 1 at 49-50.
ROCKY MOUNTAIN POWER'S REPLY 6
deemed those requests withdrawn for nonpayment in March 2009.15 XRG fied new BPA
interconnection requests for XRG-DP7 and XRG-DP8 (but not XRG-DP9 or XRG-
DP1O) on December 2, 2009, and November 23, 2009, respectively.16 Those were the
only requests for interconnection pending on March 15, 2010.17 No requests to
interconnect XRG-DP9 or XRG-DP1O were pending on the date of the rate change. No
requests for transmission service for any of the projects were pending on the date of the
rate change. To date, XRG does not have interconnection agreements or transmission
service agreements for any of its proposed projects.
XRG does not deny any of the following assertions in PacifiCorp's motion for
summary judgment based on documents in the record: (a) that XRG did not request
transmission to Brady from BPA until December 9, 2010;18 (b) that XRG decided, on
October 7, 2010, to interconnect XRG DP-7 to Raft River Electric Co-op instead of
BPA;19 (c) that, on December 16, 2010, BPA told XRG that there is no interconnection
capacity on BPA's system for XRG DP7 until BPA re-rates the 138 kV transmission
path;20 (d) that, until January 5, 2011, XRG was unaware that BPA does not deliver to
15 Idat 49.
16 ¡d.
17 XRG attempted to submit new BPA interconnection requests for XRG-DP9 and XRG-DP1O on March
12,2010; however BPA rejected the requests. Exhibit Bat 2 (al1 references herein to "Exhibit B" refer to
Exhibit B to the Company's motion for summary judgment). On December 6,2010, BPA deemed XRG's
interconnection request for XRG-DP9 complete as of November 24, 2010. As of Januar 12,201 i, BPA
had not acknowledged XRG's interconnection request for XRG-DP1O. ¡d.
is Exhibit Bat 13.
19 ¡d. at 12. DP-7 is identified as 00388 in communications regarding interconnection between BPA and
XRG.
20 ¡d. at 22.
ROCKY MOUNTAIN POWER'S REPLY 7
Brady;21 and (e) that, on January 6, 2011, XRG received an email in which BPA
instructed XRG to expect that completion of generator-requested BP A transmission
upgrades to take three to five years.22
III. DISCUSSION
The Company is entitled to sumary judgment for thee reasons:
A. XRG failed the bright line rule.
XRG did not fie a complaint or execute a PP A with the Company before
published avoided cost rates changed March 16,2010. Under the Commission's holding
in A. W. Brown, approved by the Idaho Supreme Cour, these facts alone justify granting
the motion for sumary judgment.23 XRG's arguments to the contrary in its answer are
unpersuasive.
XRG's assertion that the bright line rule of A. W. Brown should not apply because
it had "almost no notice" of the rate change misapprehends Idaho law. XRG does not
have a due process right to any advance notice of a change in published avoided cost
rates.24 Furhermore, the Commission already has determined, in Order No. 31092, that
21 Id. at 14 (Email from BPA to XRG stating, "Once the output of your proposed project leaves the BPA
138kV Point to Point loop at Minidoka or Adelaide you wil1 be doing transmission business with Idaho
Power. They own and operate the 138 kV line that runs from Adelaide to American Falls near Brady in the
Idaho Power Balancing Area Authority. BPA is not a Balancing Area Authority in this region").
22Id.at16.
23 See Motion for Summar Judgment at 18.
24 The Idaho Supreme Court has held that a QF developer's due process rights do not attach to a particular
avoided cost rate until the developer has established a legal1y enforceable obligation to sel1 its output to a
utility at the rate in question. Rosebud Enterprises, Inc. v. Idaho Pub. Uti/s. Comm 'n, 13 1 Idaho 1,
12 (1997).
ROCKY MOUNTAIN POWER'S REPLY 8
QFs received suffcient notice of the rate change established by Order No. 31025.25 In
any event, XRG's attorney received actual notice on March 10, 2010, that rates might
change soon. The Commission may conclude that XRG had ample time to fie a
complaint as a matter of law. The amount of effort for a sophisticated part like XRG to
fie a complaint with the Commission is comparable to the effort XRG expended in
drafting its March 11, 2010 email to the Company and expended in drafting the March
12,2010 letter to the Company from XRG's legal counsel. XRG's election to complain
to the Company rather than the Commission should not preclude application of the bright
line rule.
XRG's requests for Commission lenienc~6 are also undeserving. XRG did not
fail the bright line test by a little; it failed by a lot. XRGoffers no credible excuse for
waiting more than four months after rates changed to fie its complaint. Such delay was
either cavalier or calculated. XRG may have delayed because it thought the bright line
test was irrelevant (just like it claims it didn't need to comment on the Company's draft
PPAs) or perhaps it delayed because it wanted to make sure it had a viable project before
it fied a complaint. In either case, XRG's circumstances bear no resemblance to other
instances where the Commission has excused a failure to comply with its bright line rule.
XRG's delay in asserting its rights is detrimental to the administration of QF
contracts in Idaho, generally, and to the Company in particular. XRG waited more than
16 months after learning that the Company would buy only 23 MW at Brady before fiing
25 In the Matter of the Adjustment of Avoided Cost Rates for New PURPA Contracts for Avista Corp. dba
Avista Utilities, Idaho Power Co., and PacifCorp dba Rocky Mountain Power, IPUC Case No. GNR-E-1O-
01, Order No. 31092 (2010).
26 Answer at 28 (arguing that the Commission should not apply the bright line rule because it was not
compel1ed to do so and because it has not always done so in the past).
ROCKY MOUNTAIN POWER'S REPLY 9
a complaint and now XRG seeks a contract rate that is much greater than the Company's
curent avoided cost. XRG easily could have avoided this prejudice to PacifiCorp and its
customers (who wil pay for the power the Company purchases from XRG) if it had fied
its complaint before avoided cost rates changed. In addition to failing the Commission's
bright line rule, XRG's complaint should fail under the doctrine of laches because XRG
sat on its claim and the Company was prejudiced as a result.27
B. XRG failed to negotiate, as a matter of law.
It is undisputed that, after the Company sent XRG one PPA in May 2009, XRG
repeatedly said it would send comments, but never did. XRG's failure to either negotiate
the single PPA or else fie a complaint with the Commission prior to Order No. 31025
constitutes failure to negotiate as a matter oflaw, as explained in PacifiCorp's motion for
summary judgment, at 11-14. None ofXRG's arguments, in its answer, excuse its failure
to negotiate.
XRG cites Earth Power Resources, Inc. for the principle that when a QF attempts
to negotiate and does everyhing in its power to commit itself but is prevented by a
utility's knowing or negligent conduct the QF is entitled to the rates in existence at the
time it attempted to obligate itself.28 There is no evidence, however, that XRG attempted
substantive negotiation of the terms of the PP As it sought or that it ever attempted to
obligate itself to sell power to PacifiCorp. As the Commission stated, in Island Power
Co. v. Utah Power & Light Co., "(aJn expressed desire to sell does not equate to a
27 See Motion for Summary Judgment at 20.
28 Answer at 1 9.
ROCKY MOUNTAIN POWER'S REPLY 10
commitment to seii.,,29 XRG asserts in its answer that "XRG attempted to obligate itself'
to four PPAs?O However, such a naked assertion does not constitute evidence.3!
XRG alleges in its answer that it was precluded from negotiating by the
Company's erroneous determination of a transmission constraint.32 As discussed in
PacifiCorp's motion for summary judgment, a QF is not entitled to cease negotiations
merely because the paries disagree on a key term. Furhermore, XRG gives no evidence
how the Company prevented it from responding to the draft PP As the Company sent to
XRG on May 11, 2009 and on October 2, 2009. Even if the Commission assumed, for
the sake of this motion only, that the Company was wrong to conclude that it could only
take 23 MW of output at Brady, nothing prevented XRG from actively negotiating by
responding to the draft PPAs provided by the Company in May and October 2010. XRG
told the Company on multiple occasions that it would take the single PP A provided and
send the Company a redline draft for each of the four Projects.33 The Company assumed
that XRG would do so, and waited for XRG comments that never came. In sum, XRG
had an obligation to actively negotiate notwithstanding any dispute over the number of
PP As it would receive; at the very least, XRG should have responded to the draft PP A
29 Island Power Co. v. Utah Power & Light Co., IPUC Case No. UPL-E-93-4, Order No. 25647 at 17,
1994 Ida. PUC LEXIS 92.
30 Answer at 20.
31 See Nanney v. Linella, Inc., 130 Idaho 477, 480-81 (Idaho Ct. App. 1997) (upholding a grant of summary
judgment where appel1ants assertions of factual issues material to the summary judgment were
unsupported by the record and were generally inconsistent with the testimony of appel1ants own
personnel).
32 Answer at 21. Although PacifiCorp vigorously denies that its determination was erroneous, it need not
do so in this motion.
33 Exhibit A at 201,289 (July 6, 2009 and March 11,2010 respectively).
ROCKY MOUNTAIN POWER'S REPLY 11
provided by the Company and should have indicated what changes XRG sought or
indicated that the draft PP A was acceptable without revision.
,C. XRG's Projects were not suffciently mature to be entitled to a PURPA contract.
On March 15, 2010, XRG had not yet applied to BPA, or any other utility, for
transmission services to Brady. In January 2011, XRG sought to interconnect at least one
of its four Projects to Raft River Electric Co-op, and learned, for the first time, that Idaho
Power Company, not BPA, delivers to Brady. The Commission may hold, as has the
Public Utility Commission of Oregon, that an off-system QF must obtain wheeling
agreements from its project to the purchasing utility's system before it may create a
legally enforceable PURP A obligation.34 The Oregon PUC noted that many utilities
(such as Raft River Electric Co-op) are not subject to FERC's mandatory wheeling
requirements.35 There are good reasons why a utility that is not required to wheel QF
output would choose not to do so.36 If the Commission adopts such a rule, XRG's
request for grandfathered rates must be denied.
If the Commission does not embrace the strict rule, above, it may nevertheless
grant sumary judgment because XRG was not ready, wiling and able to obligate itself
to deliver power. The Commission has previously stated that an eligible project must be
34 See Motion for Summary Judgment at 15.
35 Portland General Electric Co. v. Oregon Energy, OPUC Docket No. UC315, Order No. 98-055, 1998
Ore. PUC LEXIS 13 1, *20, recons denied, Order No. 98-238, 1998 Ore. PUC LEXIS 204 (noting that
FERC lacks authority to require nonpublic utilities to file open access tariffs).
36 By electing to interconnect with a QF and wheel power a utility becomes a "transmitting utility" under
the Federal Power Act (FPA). 16 U.S.C. §§ 791-828e. A transmitting utility is subject to significant
additional regulation including reliability regulations and potential1y compulsory wheeling under Sections
211,21 lA, 215, 220, and 221 of the FPA. 16 U.S.C. §§ 824j, 824j-l, 8240, 824t, 824u.
ROCKY MOUNTAIN POWER'S REPLY 12
more than conceptual.3? As of March 15, 2010, the XRG Projects' transmission plans
were merely conceptual. XRG defaulted on its original BP A interconnection requests in
February 2009, and only two of the four Projects had interconnection queue positions
with BPA on March 15,2010. If the Commission draws all inferences in favor ofXRG,
it can conclude that XRG only knew the feasibility of interconnecting two of its four
projects as of March 15,2010, and that XRG did not know the feasibility of transmitting
the output of any of its proposed projects to Brady. When XRG contacted the Company
on March 11 and March 12, 2010, it made no attempt to bind itself to an obligation to
deliver to the Company-probably because XRG did not know the feasibility, cost, or
timeline of delivering its output to Brady. As of January 2011, XRG stil has not
demonstrated the technical, legal, or economic feasibility of transmitting its output to
Brady. This demonstrates a lack of adequate maturity of the XRG Projects as a matter of
law.38
XRG's arguents to the contrary are unpersuasive. The fact that XRG must pay
several large deposits to study interconnection and transmission to confirm its conceptual
transmission plans39 results from XRG's decision to disaggregate a large project into four
small projects and wheel them across three systems to Brady. XRG's attorney's
37 Forest Fuel Power, Inc. v. Washington Water Power Company, IPUC Case No. U-I008-246, Order No.
20486, I 1 (1986) ("The Commission views the project as being only conceptual at this time. Serious
negotiations have not taken place. The fiing of a complaint was premature.").
38 See also In the matter of the Application of Idaho Power Company for Approval of a Firm Energy Sales
Agreement with Yellowstone Power Inc, IPUC Case No. IPC-E-lO-22, Order No. 32104 (2010) (Factors the
Commission considers when determining whether a QF merits grandfathered rate treatment include:
(i) whether a QF developer is material1y down the path of facility interconnection with the utility;
(ii) whether the developer obtained QF status from FERC; (iii) whether the paries had exchanged contract
drafts and project specific information; and (iv) whether the parties reached a meeting of the minds as to
the material contract terms and conditions).
39 Answer at 25.
ROCKY MOUNTAIN POWER'S REPLY 13
statement, that XRG is "comfortable with (the feasibility of wheeling to Brady) from a
technical and cost perspective" is not evidence;4o the evidence in Exhibit B can only
demonstrate that XRG stil has no definite plan for delivering its output to Brady. XRG's
statement that it has "committed to a $45/kW delay default liquidated damages
provision,,4! is misleading at best. Neither of the PPAs tendered to XRG for comment
contained such a provision and there is no evidence that XRG ever proposed or agreed to
post any delay security prior to March 15,2010 (a fuher indication of XRG's failure to
actively negotiate a PP A).
Off-system QFs are different from on-system QFs and therefore merit distinct
legal treatment. For example, the Company should not have a duty to provide a PPA to a
QF located in Hawaii just because the QF requests one. There must be some obligation
on the part of the QF to demonstrate that delivery to the Company's system is legally and
financially feasible in a predictable time; XRG has made no such demonstration. XRG's
problems securing transmission to Brady show that the feasibility of wheeling QF output
to a utility cannot be assumed.
XRG alleges that the Company has entered into PPAs with off-system QFs
without inquiring into their interconnection statuS.42 The Company does not believe this
statement is tre, but even assuming it were tre, such a fact would not prevent the
Company's review of XRG's transmission plans when the Company reasonably believes
such plans may be inadequate. XRG insists that BPA's system interconnects to the
40 See Nanney, 130 Idaho at 480-81 (see n. 33, supra).
41 Answer at 26.
42 ¡d. at 24.
ROCKY MOUNTAIN POWER'S REPLY 14
Company at Bradl3; however, BPA and the Company's transmission maps say
otherwise. It would be imprudent for the Company to ignore such evidence. The
Company should not be required to purchase XRG output until XRG demonstrates the
technical and financial feasibility of transmitting its output to Brady.
D. The Company's motion for summary judgment is procedurally proper.
XRG's claim that sumary judgment is not the appropriate procedure for
resolving this case is unfounded. The Company's motion is neither improper44 nor
unprecedented.45 There is no need to stay the motion until after Rocky Mountain Power
responds to XRG's discovery request because the facts XRG seeks to discover are not
related to the issues raised in the Company's motion for sumary judgment.46
XRG fuher claims that it was prejudiced because it was required to answer a
"381-page dispositive fiing" in 14 days.47 This claim is also unfounded. First, the
motion for sumar judgment is 24 pages. The balance of the 381-page fiing was
comprised of Exhibit A, a catalog of emails between XRG and the Company that the
Company first served on XRG on September 10, 2010; and Exhibit B, excerpts from
XRG's responses to the Company's discovery requests. XRG has seen the contents of
Exhibit A and Exhibit B before; indeed, XRG was the author or supplier of much of that
43 Id. at 25, n. 15.
44 The Commission may consider and decide substantive prehearing motions such as a motion for summar
judgment. IDAPA 31.01.01.056; IDAPA 31.01.01.256.
45 See Forest Fuel Power, Inc. v. Washington Water Power Company, IPUC Case No. U-I008-246, Order
No. 20486 (1986) (Commission granted a motion for summary judgment against a QF that sought to lock
in avoided cost rates under a PPA because the QF failed to produce material facts demonstrating the QF
properly negotiated with the utility and was sufficiently mature).
46 See generally Rocky Mountain Power's Motion for Protective Order (February 7, 2011). See also
XRG's Third Production Request Nos. 24-63.
47 Answer at 17.
ROCKY MOUNTAIN POWER'S REPLY 15
content. Second, XRG raised no objection to the timeline when PacifiCorp consulted
XRG prior to fiing its motion. XRG, which has had more than six months since it fied
its complaint to develop its case, has not made a credible showing of prejudice.
E. Staying the motion would contribute to judicial ineffciency.
In its answer, XRG requests that the Commission "at least stay the motion until
after Rocky Mountain Power responds to XRG's discovery requests and XRG
supplements (its answer) with the additional discovery.',48 In its motion for protective
order to stay discovery, the Company has explained why the additional discovery sought
by XRG is irrelevant to the resolution of the pending motion for sumary judgment.
Continuing discovery while putting the motion for sumary judgment on hold would
urecessarily burden the Company and the Commission with furher discovery that is
immaterial to the expedient resolution of the motion and, potentially, this docket.
F. The evidence submitted with Rocky Mountain Power's motion for summary
judgment is admissible.
XRG argues, citing I.R.c.P. 56(c) and 56(e), that the Company's motion for
sumar judgment fails to include any admissible evidence because its exhibits are not
accompanied by sworn affdavit,49 At the outset, the Company fails to see the substantive
significance of an affdavit where the exhibits to the motion for summary judgment
consist entirely of admissions made by XRG and documents fied by XRG with the
48 ¡d. at 16.
49 !d. at 17.
ROCKY MOUNTAIN POWER'S REPLY 16
Commission during discovery in this proceeding.50 XRG's arguent also lacks technical
merit.
The Idaho Rules of Civil Procedure do not apply where, as here, the Commission
has its own, on-point, rule.5! While the Commission generally follows rules on
admissibility of evidence used by the district courts of Idaho in non-jur civil cases,
Commission Rule 261 provides "(nJo informality in any proceeding or in the manner of
taking testimony invalidates any order made ... by the Commission." Rule 261 fuher
provides that "(aJll other evidence may be aditted ifit is a tye generally relied upon by
prudent persons in the conduct of their affairs." XRG does not dispute that it had prior
access to the evidence. Nor does it dispute that the exhibits are what they purort to be.
52
Exhibit A and Exhibit B are therefore reliable and the Commission may weigh the
exhibits in ruling on the motion for sumary judgment.53
50 To be precise, Exhibit A to the Company's motion for summar judgment consists in part of a
compilation of correspondence that the Company, not XRG, fied with the Commission as par of
discovery, but the accuracy of which XRG has admitted, which admission XRG fied with the Commission
as part of discovery. See Exhibit A at 3.
51 Idaho Code § 61-601 ("Al1 hearings and investigations before the commission or any commissioner shal1
be governed by this act and by rules of practice and procedure to be adopted by the commission, and in the
conduct thereof neither the commission nor any commissioner shal1 be bound by the technical rules of
evidence"); see also McNeal v. Idaho PUC, 142 Idaho 685,690 (2006); In the Matter of the Application of
Idaho Power Company for Authority to Modif its Rule H Line Extension Tarif Related to New Service
Attachments and Distribution Line Installations, IPUC Order No. 30955 (2009) ("the law governing the
Commission contemplates a rule of liberality in the reception of evidence" quoting Application of Lewiston
Grain Growers, 69 Idaho 374, 380, 207 P.2d 1028, 1032 (1949)).
52 Under rules applicable to Idaho trial courts, "(tJhe requirement of authentication or identification as a
condition precedent to admissibility is satisfied by evidence suffcient to support a finding that the matter in
question is what its proponent claims." LR.E. Rule 901. XRG does not deny that Exhibit A and Exhibit B
are authentic excerpts of the discovery record.
53 Even ifIdaho trial court rules applied, Exhibit A and Exhibit B would be admissible. I.R.C.P. Rule 56(c)
provides that judgment shal1 be rendered on "pleadings, depositions, and admissions on fie, together with
the affdavits, if any." See e.g. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (holding that, under the
analogous Federal Civil Rules of Procedure, even in the absence of an affdavit, summary judgment may
properly be made in reliance solely on the pleadings, depositions, answers to interrogatories, and
admissions on fie). Because Exhibit A and Exhibit B were fied with the Commission during discovery
ROCKY MOUNTAIN POWER'S REPLY 17
Notwithstanding the Company's belief that an affdavit is not essential to the
admissibility of the exhibits, the Company now provides the attached affdavit of Bruce
Griswold certifying the accuracy of the exhibits to the motion for sumary judgment.
G. Evidence of settlement discussions is improper and non-probative.
In its answer, XRG discusses at length settlement negotiations with the
Company.54 XRG's disclosure violates the Commission's longstanding practice of
protecting the confidentiality of settlement negotiations.
55 In the Commission's words,
"( c )omments made and information, ideas, and opinions shared during the course of
settlement discussions must remain confidential to strengthen the policy of promoting
settlements.,,56 Furhermore, the purose for which XRG discusses the settlement
negotiations has no bearing on the Company's motion for sumary judgment or on
XRG's complaint. Settlement negotiations taking place in the fall of 2010 do not shed
light on XRG's entitlement to rates in March 2010.57
(and again with the Company's motion), and because Exhibit A consists of an admission by XRG and
Exhibit B consists of documents produced by XRG, an affdavit swearing to their authenticity is
unnecessary.
54 Answer at 2, 1 1,12,21 n. 11,32-33, and portions of exhibits.
55 Commission Rule 292 ("Settlement negotiations are confidential, unless al1 participants to the negotiation
agree to the contrar"); In the Matter of the Petitions Requesting Extended Area Service (EAS) between
Arbon and American Falls, Arbon and Pocatello, and between Rockland and American Falls, IPUC Case
No. GNR-T-96-5, Order No. 27450, 1998 Ida. PUC LEXIS 97, *7 ("Arbon") (adopting a stipulation
withdrawing an attorney's affdavit and certain references in a supporting memorandum to settlement
negotiations; affiring a long standing practice that the disclosure of settlement negotiations is prohibited
by the Commission's Rules).
56 Arbon, 1998 Ida. PUC LEXIS 97, *7.
57 Finding no exception to confidentiality in the Commission's rules, XRG attempts to justify its disclosure
under an exception from the Idaho Rules of Evidence. Answer at 21 n. 1 1. As discussed in Section HLF,
supra, the Commission is not bound by the Idaho Rules of Evidence. Even if the Commission adopts
exceptions from the Idaho Rules of Evidence, settlement negotiations would not fit any exception due to
their complete lack of relevance.
ROCKY MOUNTAIN POWER'S REPLY 18
H. XRG's complaint does not include a prayer for Order No. 31025 rates and XRG
should not be granted leave to amend its complaint.
In the prayer for relief found in its complaint, XRG asks the Commssion to:
(l) declare PacifiCorp in violation of PURP A, FERC regulations, and Commission
orders; (2) require PacifiCorp to execute standard PP As at the rates on file prior to March
12,2010; and (3) grant any other relief the Commssion deems necessary. In its answer,
XRG asserts for the first time that its request for "any other relief the Commission deems
necessary" should be read to include a request for four PP As at the published avoided
cost rates established by Order No. 31025.58 In the alternative (and in a footnote), XRG
seeks leave to amend its complaint.59 The Company opposes both XRG's radical re-
interpretation of the complaint and XRG's apparent attempt to bootstrap a new complaint
into its original July 29, 2010 fiing date.6o
Formal complaints fied before the Commission must "(fJully state the facts
constituting the acts or omissions of the utility ... and the dates when the acts or
omissions occurred" and must "( s Jtate what action or outcome should be taken to resolve
the complaint.,,6! The Idaho Supreme Cour recently found that a complaint failed to
apprise the defendant of a particular claim where the claim was not explicitly mentioned
58 Answer at 18.
59 !d. 18 n. 9.
60 XRG does not make clear that, if the Commission grants leave to amend, it seeks to have such amended
complaint relate back to the date of the original complaint. The Company opposes any such attempt to
relate back. In Idaho courts, an amended complaint does not relate back to the date of the original
complaint if it al1eges wrongful conduct arising at a different time and with regard to a different set of facts.
Hayward v. Valley Vista Care Corp., 136 Idaho 342, 347 (Idaho 2001); see also LR.C.P. 15(c) (an
amended complaint relates back only where it shares the same "conduct, transaction, or occurrence" as the
original complaint). Here, any claim by XRG for rates in Order NO.3 1025 would necessarily be dependent
on events occurring after March 16, 20 i 0 and therefore would be beyond the scope of the original
complaint.
61 IDAPA 31.01.01.054.
ROCKY MOUNTAIN POWER'S REPLY 19
in the complaint and an essential element of the claim was not plead.62 The court held
that the unplead claim could not be considered on its merits.63 XRG's complaint does
not request rates in effect after March 16, 2010 or even mention events occurring after
March 16, 2010. Under the standards for pleading, XRG's complaint cannot be
construed to request Order No. 31025 rates.
This is a complaint about whether XRG is entitled to grandfathered treatment
regarding rates in effect prior to March 16, 2010. The Company had no notice that
XRG's complaint sought grandfathered treatment for Order No. 31025 rates, the
Company has not sought discovery related to this new claim, and would be prejudiced if
XRG's complaint were construed in such a fashion.64 If XRG wishes to seek
grandfathered treatment regarding rates in effect just prior to December 14, 2010, it must
fie a new complaint.
iv. CONCLUSION
For the reasons discussed above, the Company's motion for sumary judgment
should be granted and XRG's motions to stay sumary judgment and to amend the
complaint should be denied. If the motion for sumar judgment is granted, the
Company's motion for a protective order staying discovery is moot.
62 Mortensen v. Stewart Title Guar. Co., 235 P.3d 387,393-95 (Idaho 2010).
63 ¡d. ("Pleading is necessar to put the opposing part on notice of the claims it is facing and thereby
insure that a just result is accomplished." (internal quotations omitted)).
64 Due to the lack of relevance to the complaint, PacifiCorp did not seek to admit evidence that Company
sent XRG a written offer to negotiate four PPAs at the Order NO.3 1025 prices on September 21,2010; that
the offer asked XRG to contact Company "as soon as possible" if XRG wanted to negotiate, and that XRG
did not respond until December 13,2010. XRG fied Company's September 21,2010 letter with its answer
(See Answer, Exhibit 3 at 2-10), however Company did not use this information in its motion for summary
judgment, nor did it investigate through discovery why XRG failed to respond sooner.
ROCKY MOUNTAIN POWER'S REPLY 20
Dated this 8th day of March 2011.
ROCKY MOUNAI POWER'S REPLY
Respectfly submitted,
Mar' ench USB 2284
Daniel E. Solander USB 11467
Rocky Mountain Power
Jeffey S. Lovinger, OSB 960147
Kenneth E. Kaufman OSB 982672
Lovinger Kauf LLP
Attorneys for Rocky Mountain Power
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