20120619Answer to XRG Petition.pdf

LOVINGER I KAUFMANN hAP
825 NE Multnomah • Suite 925 office [phone]
Portland, OR 97232-2150 fax [phone]
Jeff Loviziga
LUUwn
June 15, 2012
r3 VIA PRIORITY MAIL r..JLJ
•• L...
Jean D. Jewell, Secretary m
Idaho Public Utilities Commission
472 W Washington Street
P0 Box 83720
co Boise ID 83720-0074 3i
C) c Re: Case No. PAC-E-10-08 Z
XRG-DP-7, XRG-DP-8, XRG-DP-9, XRG-DP-10, LLCs, Complainant, v.
PACIFICORP, dba ROCKY MOUNTAIN POWER, Defendant
Dear Ms. Jewell:
Enclosed for filing in the above-captioned dockets are an original and seven (7) copies of
ROCKYMOUNTAINPOWER 'S ANSWER TO XRG 'S PETITIONFOR RECONSIDERATION
OF COMMISSION ORDER NO. 32553.
An extra copy of this cover letter is enclosed. Please date stamp the extra copy and return it to
me in the envelope provided.
Thank you in advance for your assistance.
cc: PAC-E-10-08 Service List
Enclosures
RECE WED
Mark C. Moench
Daniel E. Solander
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
Fax: [phone]
[e-mail]
danie1.solanderpacificorp.com
Jeffrey S. Lovinger
Kenneth E. Kaufmann
Lovinger Kaufmann LLP
825 NE Multnomah, Suite 925
Portland, Oregon 97232
Telephone: [phone]
Fax: [phone]
[e-mail]
[e-mail]
Attorneys for Defendant
Rocky Mountain Power
11JUHl8 Ali 833
UT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
XRG-DP-7, XRG-DP-8, XRG-DP-9, XRG-DP-
10, LLCs,
Complainant,
V.
PACIFICORP, DBA ROCKY MOUNTAIN
POWER,
Defendant.
Case No. PAC-E-10-08
ROCKY MOUNTAIN POWER'S
ANSWER TO XRG'S PETITION
FOR RECONSIDERATION OF
COMMISSION ORDER NO. 32553
Pursuant to IDAPA Rule 31.01.01.331, PacifiCorp, dba Rocky Mountain Power
(the "Company"), respectfully submits this answer to XRG's Petition for Reconsideration
of Commission Order No. 32553 ("XRG's Petition").
ROCKY MOUNTAIN POWER'S ANSWER 1
I. PROCEDURAL BACKGROUND'
XRG filed a formal complaint with the Idaho Public Utilities Commission
("Commission") on July 29, 2010. The Company timely answered and the parties
completed two rounds of discovery. The Company then moved to stay further discovery
and for summary judgment. XRG opposed summary judgment and moved to continue
discovery. The Commission heard oral argument. On May 18, 2012, the Commission
issued Order No. 32553.2
In Order No. 32553, the Commission concluded that the case involved disputed
issues of material fact. Accordingly, the Commission denied the Company's motion for
summary judgment.3 But the Commission also found that ample evidence existed to
allow the Commission to decide the case on its merits .4 The Commission carefully
considered the record and concluded that XRG failed to take steps sufficient to establish a
legally enforceable obligation to sell output from its four qualifying facilities ("QFs")
prior to the change in rates. Specifically, the Commission found that by failing to return
even a single draft PPA to the Company after repeatedly indicating that it would do so,
1 The Company has provided the Commission with a detailed statement of facts on pages four through nine
of its motion for summary judgment. The Company has also provided the Commission with copies of the
entire written correspondence between the parties from the date XRG first requested power purchase
agreements through the date XRG filed its complaint. The Commission has accurately summarized the
principle facts in Order No. 32553. In the interest of space, this answer does not reiterate the factual
history of the case. The Company does not necessarily agree with the characterization of facts contained in
XRG's petition for reconsideration.
2 XRG.DP.7 XRG-DP-8, XRG-DP-9, XRG-DP-1O v. PacifiCorp, dba Rocky Mountain Power, IPUC Case
No. PAC-E-10-08, Order No. 32553 (2012)
Id. at 7 ("We find there are genuine issues of material fact related to the underlying complaint that do not
permit a determination of this case through use of summary judgment.").
Id. ("... we find that the record provided through pleadings and at oral argument presents ample evidence
for the Commission to decide the underlying, disputed matters alleged in XRG's original complaint.")
ROCKY MOUNTAIN POWER'S ANSWER 2
"XRG failed to take sufficient action to create an obligation on its part."5 And the
Commission found that XRG's failure to create an obligation "cannot be attributed to a
failure to negotiate by Rocky Mountain Power."6 In conclusion the Commission stated:
A legally enforceable obligation cannot exist until a QF takes sufficient
steps to show it has obligated itself to provide energy to the utility. We
find that an assertion that XRG intends to enter into a contract with Rocky
Mountain Power, without actions in furtherance of its intent, is not
sufficient to establish entitlement to pre-March 2010 published avoided
cost rates. Consequently, we dismiss XRG's complaint.7
On June 8, 2012, XRG filed its petition for reconsideration. XRG argued that the
Commission's decision to dismiss the complaint was an error resulting from "a
completely arbitrary application of some hybrid form of summary judgment where only
one party is provided with the opportunity to obtain and present evidence necessary for
summary judgment."8 XRG stated it is "unclear what legal standard the Commission
applied to conclude there were material issues of fact that would preclude summary
judgment, yet the extensive record nevertheless supported dismissal."9 XRG asserted
that "[t]he Commission erred by applying an arbitrary and unreasonable legal standard."°
XRG also complained that the Commission has not ruled on its motion to complete
discovery and on its request for leave to amend its complaint."
5 Id. at9.
6
7 Idat 10.
8 XRG's Petition at 15.
9 Id.
Id. at 17.
' Id. at 17, 19. In fact, the Commission did rule on the XRG's motion to continue discovery. The second
Ordering paragraph on page 10 of Order No. 32553 states: "Consequently, XRG's Motion to Compel
Discovery is denied."
ROCKY MOUNTAIN POWER'S ANSWER 3
II. DISCUSSION
A. The Commission's holdings in Order No. 32553 are proper.
1. The Commission's decision to dismiss the complaint is
supported by substantial evidence.
XRG's assertion that the Commission has resorted to "a completely arbitrary
application of some hybrid form of summary judgment" is unfounded. In Order No.
32553, the Commission expressly denies the Company's motion for summary judgment.
The Commission states that it is denying summary judgment because "there are genuine
issues of material fact ... that do not permit determination of this case through use of
summary judgment."2 The Commission then states that the evidence on the record is
sufficient to allow it to decide all disputed issues of material fact and dispose of the case
on its merits.13 And that is what the Commission proceeds to do.
The Idaho Supreme Court, when reviewing the Commission's determinations of
fact, will apply a substantial evidence standard. 14 The evidence before the Commission
includes the entire written record of correspondence between the Company and XRG.'5
12 Id. at 7.
13 Id. ("... we find that the record provided through the pleadings and at oral argument presents ample
evidence for the Commission to decide the underlying, disputed matters alleged in XRG's original
complaint.").
14 The Idaho Supreme Court has held that "where the Commission's findings [of fact] are supported by
substantial, competent evidence, this Court must affirm those findings." A. W Brown, Inc. v. Idaho Power
Co., 121 Idaho 812, 815-816, 828 P.2d 841 (1992) (quoting Empire Lumber Co. v. Washington Water
Power, 114 Idaho 191, 193, 755 P.2d 1229, 1231 (1988)). The Court has further held that "[i]n reviewing
findings of fact we will sustain a Commission's determination unless it appears that the clear weight of the
evidence is against its conclusion or that the evidence is strong and persuasive that the Commission abused
its discretion." Rosebud Enters. v. State PUC, 128 Idaho 624, 917 P.2d 781, 788 (1996) (quoting Utah-
Idaho Sugar Co. v. Intermountain Gas Co., 100 Idaho 368, 376, 597 P.2d 1058, 1066 (1979)).
15 XRG and the Company conducted nearly all of their discussions in writing. All of their written
communications were submitted as evidence with the Company's motion for summary judgment.
Exhibit A to the motion for summary judgment is a 301-page, bound catalog of all written communications
between XRG and the Company concerning the XRG projects from the date of XRG's initial request for
power purchase agreements (January 21, 2009) through the date it filed its complaint (July 29, 2010). In
response to the Company's discovery requests, XRG has acknowledged that it either sent or received each
ROCKY MOUNTAIN POWER'S ANSWER 4
The Commission discussed this record at length on pages seven through ten of Order No.
32553, and made specific findings of fact, including:
(1)that XRG allowed its interconnection requests with BPA to lapse in March
2009 for reasons unrelated to the Company's actions;16
(2)that XRG stated to the Company, on July 6, 2009, that it would "provide a
redline to this contract and the other 3 identical contracts proposed" but never
did so; 17
(3)that XRG never returned a draft PPA even after inquiry by the Company just
prior to the March 16, 2010 rate change; 18 and
(4)that no terms of any PPA were ever negotiated or discussed. 19
The Commission ultimately found that XRG's actions were not sufficient to establish that
it committed itself to sell energy and capacity to the Company prior to March 16, 2010.20
The Commission reasoned: "[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."21
This requirement arises from Section 292.304(d) of the Federal Energy Regulatory
Commission's ("FERC") Public Utility Regulatory Policies Act ("PURPA") rules, which
of the correspondences contained in Exhibit A and that it is aware of no additional written correspondences
between the parties.
16 Order No. 32553, at 7 ("We find no evidence in the record that Rocky Mountain Power was refusing to
negotiate in March 2009. Therefore, we find that XRG's assertion that its interconnection requests with
BPA lapsed because of Rocky Mountain Power's intransigent conduct is without merit.").
17 Id. at 8.
18 Id. at 9 ("XRG never returned a draft PPA—even after inquiry by Rocky Mountain Power.").
19 Id. ("A legally enforceable obligation for utility purchase of QF power can be incurred prior to
memorialization of terms in a contract between the parties, but, under the circumstances and facts presented
in this case, no terms of any PPA were ever negotiated or discussed.").
20 1d. at 10.
21 Id
ROCKY MOUNTAIN POWER'S ANSWER
entitles a QF to provide energy or capacity pursuant to a "legally enforceable
obligation."22
FERC has explained that this provision gives a QF "the option to commit itselfto
sell all or part of its electric output to an electric utility" and thereby create a non-
contractual, but still legally enforceable, obligation pursuant to the state's implementation
of PURPA.23 FERC has analogized the formation of a legally enforceable obligation to
instances where parties may form a bilateral obligation before the formal memorialization
of a contract in writing.24
In its recent Cedar Creek decision, FERC discussed this legal framework in the
context of an actual dispute. 25 In that case, FERC noted that—(a) six months of contract
negotiations, (b) the utility's delivery of a final, fully negotiated and mutually agreed
upon unexecuted version of the contract to the QF, and (c) the QF's execution and
delivery of that contract to the utility prior to the rate change—combined to provide
persuasive evidence of a QF's commitment to sell to the utility. On the basis of these
facts, FERC noted:
[T]hese extensive negotiations between the parties are persuasive and
point to the reasonable conclusion that [the QF] did commit itself to sell
electricity to [the utility]. Such commitment to sell to an electric utility,
[FERC] has found, "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."26
2218 C.F.R. § 292.304(d) (2011).
23 Cedar Creek Wind, LLC, 137 FERC 161,006, P 32 (2011) (emphasis added).
Id. atP36,n. 62.
25 137 FERC 161,006.
26 1d at P 39 (quoting JD Wind 1, LLC, 129 FERC 161,148, P 25 (2009)).
ROCKY MOUNTAIN POWER'S ANSWER 6
While FERC was careful to note that states, not FERC, determine whether a QF created a
legally enforceable obligation (consistent with FERC regulations), its application of
Section 292.304(d) to the factual record in Cedar Creek is useful guidance regarding what
FERC believes a QF must do to create a legally enforceable obligation.27
In the Cedar Creek decision, FERC stated that the extensive negotiations and
objective actions between the QF and the utility point to the reasonable conclusion that
the QF committed itself to sell energy to the utility under terms and conditions agreed to
by the utility. The facts in the XRG case could hardly be more different. Here, there was
essentially no negotiation, no exchange of draft contracts, and no attempt to deliver a
contract or otherwise make an express indication of intent to create an enforceable
obligation to sell to the utility. The Commission's determination that XRG's actions
were insufficient to create a legally enforceable obligation is based on substantial
evidence in the record and reasonably applies the applicable legal principles to that
evidence. 28
27 The Idaho Commission—not FERC—must ultimately establish when a legally enforceable obligation is
formed in Idaho. It is worth noting, however, that the Commission's reasoning in Order No. 32553 does
not conflict with FERC's holding in the Cedar Creek decision.
28 It may be that XRG did not objectively manifest an intent to be bound because it preferred a mere option
to sell to the Company. During discovery, the Company learned that XRG was still working with BPA in
December 2010 to establish a transmission path from the XRG projects to the Company's system. At that
time XRG was told by BPA that it would have to obtain multiple wheels across non-PacifiCorp
transmission, requiring system upgrades and a 3-5 year construction window. Given the patent uncertainty
in XRG's ability to deliver output to the Company's system at Brady by a given date and at a reasonable
cost, XRG had a strong motive not to commit itself to sell energy to the Company prior to March 15, 2010.
ROCKY MOUNTAIN POWER'S ANSWER 7
2. Evidentiary hearings are not required if the issues, even
disputed issues, may be adequately resolved on the written
record.
XRG appears to assume that the Commission cannot decide disputed material
facts and dispose of this case without an evidentiary hearing. 29 However, the
Commission has regularly resolved formal complaint proceedings on the basis of written
evidence and without an evidentiary hearing. 30 FERC also resolves appropriate cases
based on a written record and without evidentiary hearing. 31 As FERC and reviewing
courts have explained, issues of disputed fact are amenable to resolution on a written
record without the need for an evidentiary hearing unless the disputed facts involve
motive, intent, or credibility. 32 Moreover, the Commission's June 9, 2011 oral argument
in this case provided the parties with a form of hearing. The parties submitted significant
evidence prior to the oral argument and had the opportunity to argue their case to the
Commission and answer the Commissioner's questions.
29 See XRG's Petition at 14-17 (emphasizing that the question before the Commission is whether to grant
summary judgment and noting that the only other "obvious alternative[s] to summary judgment" are a
motion for judgment on the pleadings or a motion to dismiss; by attempting to limit the Commission's
options in this way, XRG appears to assume that the Commission must hold an evidentiary hearing before
it can decide disputed material facts and dispose of the case on its merits).
° See e.g., South Elmore Irrigation Co. v. Idaho Power Co., IPUC Case No. IPC-E-07-1 6, Order No. 30507
(2008) (The Commission, after finding no need for an evidentiary hearing, dismissed a formal complaint
involving a billing dispute of $916,702 based on examination of the written record.); see also Idaho Public
Util. Comm'n Staff v. PacifiCorp, IPUC Case No. PAC-E-12-01, Order No. 32506 (2012) (The
Commission ordered the relief requested in a formal complaint filed by Commission staff based on written
submissions of the parties and without a hearing citing IDAPA 31.01.01.201 for authority to proceed by
modified procedure.).
See e.g., Midwestern Indep. Transmission Sys, Operator, 137 FERC 161,074, P 340 (2011) (FERC
denied requests for rehearing seeking evidentiary hearing and stated: "The courts have repeatedly
recognized that [FERC] has broad discretion in managing its proceedings. ... [FERCJ may properly deny
an evidentiary hearing if the issues, even disputed issues, may be adequately resolved on the written record,
at least where there are no issues of motive, intent, or credibility."); see also Southern California Edison
Co., 109 FERC ¶ 61,086, P 38 (2004).
32 See Louisiana Assoc. of Indep. Producers and Royalty Owners v. FERC, 958 F.2d 1101, 1113 (D.C. Cir.
1992). An evidentiary hearing may also be necessary where questions of memory are material. Id.
Memory is not a consideration here where the findings in Order No. 32553 rely on written correspondence.
ROCKY MOUNTAIN POWER'S ANSWER 8
3. The facts the Commission relied on to dismiss XRG's
Complaint do not implicate issues of motive, intent, or
credibility.
Order No. 32553 correctly based its analysis of XRG's actions on the record of
written correspondence between XRG and the Company because evidence of XRG's
subjective intent is irrelevant to the creation of a legally enforceable obligation. In the
Cedar Creek decision, FERC noted that the extensive negotiations and objective actions
between the QF and the utility point to the reasonable conclusion that the QF committed
itself to sell energy to the utility under terms and conditions agreed to by the utility and
that the QF manifest an objective intent to be bound by these mutually agreed terms by
returning an executed copy of the agreement to the utility. The touchstone in FERC's
analysis is whether the evidence demonstrates that the QF has objectively committed
itself to sell to the utility.33 Unless such commitment is manifest, there is no reciprocal
obligation on the utility to purchase.
In order to establish a legally enforceable obligation, XRG must take actions that
objectively manifest an obligation to sell to the Company. FERC focuses on actions
occurring between the parties—the extent of negotiations, the finality of agreement on
terms of a contract, and the definiteness of the QF's commitment to sell. The parties'
motive, subjective intent, and credibility are not material in FERC's analysis of whether a
QF has committed to sell to a utility. Nor are motive, subjective intent, and credibility
relevant in the traditional analysis of contract formation where it is the objective
manifestation of intent to be bound that controls. 34 In both cases, the issue is the
Supra nn. 22-25 and accompanying text (explaining FERC's weighing of evidence of commitment).
Inland Title Co. v. Comstock, 116 Idaho 701, 703, 779 P.2d 15, 17 (1989) ("Formation of a valid
contract requires that there be a meeting of the minds as evidenced by a manifestation of mutual intent to
ROCKY MOUNTAIN POWER'S ANSWER 9
significance of the offeror's objective acts or words, not the offeror's subjective intent or
motives. If the offeror' s objective actions constitute a binding offer or commitment, then
the offeror is bound to honor its offer, regardless of the offeror's subjective intent or
motive. 35
The legal question in this case is whether XRG took sufficient steps to to obligate
itself to provide energy to the Company. Resolution of that question depends upon
whether the actions between XRG and the Company manifest an objective intent to be
obligated. As a result, the Commission correctly limited its analysis to the parties'
outward manifestations to each other set forth in the correspondence record. As the
Commission correctly concluded, those objective actions in this case did not manifest an
intent on the part of XRG to be obligated to sell to the Company nor did the actions of the
parties indicate any agreement as to terms.
B. XRG's allegations of error are incorrect.
1. XRG had constructive notice that the Commission might deny
summary judgment and still reach a decision on the merits.
Commission Rule 327 gave XRG constructive notice that the Commission could
elect to resolve the complaint on grounds other than summary judgment. 36 Under Rule
contract. This manifestation takes the form of an offer and acceptance." (citations omitted)); Barnes v.
Yahoo!, Inc., 570 F.3d 1096, 1108 (9th Cir. 2009) ("The formation of a contract, indeed, requires a meeting
of the minds of the parties, a standard that is measured by the objective manifestations of intent by both
parties to bind themselves to an agreement." (internal citations and quotation marks omitted)).
Restatement (Second) of Contracts, § 24 ("An offer is the manifestation of willingness to enter into a
bargain, so made as to justify another person in understanding that his assent to that bargain is invited and
will conclude it.").
36 IDAPA 31.01.01.327, IPUC Rule 327, "Substance of Orders", reads:
Unless prohibited by statute, the substance of orders and the relief provided by orders may
differ from the relief requested or proposed by any party. The Commission's order may
provide for any result supported by the record before the Commission without regard to
whether each component of the order or any component of the order was specifically
recommended by a party to the proceeding.
ROCKY MOUNTAIN POWER'S ANSWER 10
327, the Commission is free to decide disputed material facts on the basis of substantial
evidence in the record and to dispose of the case without further proceedings.
Nevertheless, XRG argues that it was prejudiced because it did not expect the
Commission to resolve disputed facts and rule on the merits. 37 XRG's implication is that,
had it known the Commission would resolve disputed facts, it could have refuted the
conclusion reached by the Commission in Order No. 32553. However, as explained in
the following section, the evidence XRG contends it should have had the opportunity to
develop is immaterial to the Commission's reasoning in Order No. 32553.
2. Denial of additional discovery did not prejudice XRG.
XRG does not dispute the accuracy of the Commission's factual fmdings (e.g.,
that XRG never provided the Company with a response to the draft PPA). Rather it
insists that dismissal is inappropriate because XRG has not had an opportunity to conduct
discovery regarding its allegation that the Company unreasonably failed to investigate the
availability of transmission. 38 XRG's argument is unavailing because the Commission
correctly found that the Company's position on transmission constraints could not excuse
XRG's failure to take sufficient action to obligate itself:
XRG admitted to being delayed by other projects in July 2009. At that
time, XRG stated that it would redline the draft PPA provided by Rocky
Mountain Power and replicate it for the "other 3 identical contracts
proposed." We find that XRG's failure to return even a single draft PPA
in time to be eligible for the existing (now vintage) published avoided cost
rates cannot be attributed to a failure to negotiate by Rocky Mountain
Power. ... A legally enforceable obligation for utility purchase of QF
power can be incurred prior to memorialization of terms in a contract
between the parties, but, under the circumstances and facts presented in
37 XRG'S Petition, at 16-17.
38 XRG's Petition, at 17 ("Rocky Mountain Power's unreasonable conclusion that it lacked available
transmission capacity until months after XRG filed its complaint is the critical issue in this case.").
ROCKY MOUNTAIN POWER'S ANSWER 11
this case, no terms of any PPA were ever negotiated or discussed. A draft
PPA was provided to XRG by Rocky Mountain Power. XRG failed to
take sufficient action to create an obligation on its part. 39
XRG argues that the "Commission cannot dismiss XRG's complaint without allowing
XRG to fully explore [the Company's position on transmission constraints] in discovery,
unless Rocky Mountain Power's conduct is completely irrelevant to the legal conclusions
reached in Order No. 32553."0 XRG appears to construe Order No. 32553 to say that a
utility's conduct is never relevant to a finding on a legally enforceable obligation.
However, the Commission did not find that the conduct of the utility is irrelevant as a
general rule. The Commission did find that the Company's position on transmission
constraints could not reasonably be held to have prevented XRG from moving forward
with negotiations.
Indeed, XRG's own statements at the time show that it was not deterred by the
Company's claim of a transmission constraint. Each time the Company repeated its
position that transmission was not available for more than one project, XRG repeated its
intent to mark up four draft power purchase agreements and send them back to the
Company. In short, XRG repeatedly indicated that it would move forward with
negotiations (by marking up the draft agreement) notwithstanding its disagreement with
the Company's position on transmission constraints. The Commission reasonably
concluded that XRG's failure to follow through and provide revisions to the draft power
purchase agreement was not caused by the Company's position on transmission
constraints.
Order No. 32253, at 9.
40 XRG's Petition, at 17-18.
ROCKY MOUNTAIN POWER'S ANSWER 12
Indeed, the Commission has previously held that a QF cannot use the existence of
a dispute to excuse its obligation to negotiate; rather, a QF must actively negotiate even if
there is disagreement on a fundamental element of the proposed transaction .41 Because
the Company's position on transmission availability is not a legitimate excuse for XRG's
failure to negotiate, the Commission was correct to conclude that XRG's failure to return
even a single draft PPA prior to the March 2010 rate change was not the result of a failure
to negotiate by the Company. 42
3. The Commission's finding that the Company did not act
unreasonably is not essential to the Commission's rationale
for dismissal.
The Commission also found that the Company did not act unreasonably in 2009,
when it determined a lack of sufficient transmission for four projects based upon
information in the PacifiCorp Transmission OASIS website:
We further find that, prior to the time the published rates changed in
March 2010, Rocky Mountain Power reasonably held its position that
transmission in the area of XRG's requested interconnection was
constrained. In early 2009, when XRG initially proposed its projects,
Rocky Mountain Power reviewed the publicly available information
regarding its available transmission (OASIS). The report showed that
there was then between 20 and 25 MW of unsubscribed capacity available
at the location requested by XRG... . Based on these facts, we cannot find
that Rocky Mountain Power was attempting to impede negotiations with
XRG by failing to acknowledge the Populus to Terminal transmission
upgrades.43
' Island Power Co. v. Utah Power & Light Co., IPUC Case No. UPL-E-93-4, Order No. 25647 (1994) ("To
cease negotiations for failure to reach agreement on the first issue discussed is not to reach agreement on
any issues. To initiate a complaint process at that time may resolve or clarify that particular issue but
certainly doesn't entitle one to a contract.") (quoting Empire Lumber Co. v. Washington Water Power Co.,
Case No. U-1008-241, Order No. 20693 (1986)). For a more complete discussion of this point, see pages
11 and 12 of the Company's motion for summary judgment. See also Order No. 32553, at 9.
42 Order No. 32553, at 7.
Id. at 9-10.
ROCKY MOUNTAIN POWER'S ANSWER 13
XRG protests that this determination was made without consideration of whatever
evidence XRG believes it will find if allowed to do discovery on this matter. However,
where XRG did not dispute the Company's contention that it relied on OASIS to
determine available transmission capacity, the Commission was entitled to find that the
Company's accurate reliance on OASIS is reasonable per Se, without allowing further
discovery. Furthermore, even if one assumes arguendo that the Commission erred in
reaching this conclusion without allowing additional discovery, such an error would be
harmless because—as the Commission found—XRG's failure to return even a single
draft PPA in time to qualify for pre-March 2010 rates cannot be fairly attributed to the
Company's position on transmission constraints. 44 XRG could have returned a draft PPA
and moved negotiations forward. It repeatedly said that it would. But it never did so.
Whether the Company rightly or wrongly relied on OASIS does not affect the
Commission's conclusion that XRG failed to take steps sufficient to obligate itself (and
therefore failed to create a legally enforceable obligation).
C. XRG's request to amend its Complaint should be denied.
XRG asks the Commission to grant leave to amend its complaint to allege a claim
for the rates that came into effect when the Commission issued Order No. 31025 on
March 16, 2010. Alternatively, XRG asks the Commission to hold that such a claim was
an implicit part of XRG's original complaint. 45 The Company remains opposed to these
requests for the reasons detailed in Section III (H) on pages 19 and 20 of its reply to
XRG's answer opposing the motion for summary judgment. XRG's complaint is about
' Supra, § 1I.B.2, pp. 11-13 ("Denial of additional discovery did not prejudice XRG.").
XRG's Petition at 19-20.
ROCKY MOUNTAIN POWER'S ANSWER 14
whether XRG is entitled to grandfathered treatment regarding rates in effect prior to
March 16, 2010. At the time it moved for summary judgment in this case, the Company
had no notice that XRG sought grandfathered treatment for the rates established by Order
No. 31025. The motion to amend is also procedurally deficient because it was made in a
footnote on page 17 of XRG's answer in opposition to the Company's motion for
summary judgment and it was not mentioned in the caption of the filing. Granting leave
to amend at this late date would clearly prejudice the Company. If XRG wishes to seek
grandfathered treatment regarding the rates in effect just before December 14, 2010, it
should be required to file a new complaint.
D. Minor Clarifications to Order No. 32553 would remove any doubt
that the Commission's determination was proper.
The Commission can take advantage of its order on XRG's petition for
reconsideration to clarify the facts and reasons supporting its decision to dismiss XRG's
complaint.46 The Company respectfully recommends that the Commission make the
following clarifications in any order on reconsideration:
(1)Clarify that the Commission found there are disputed issues of material fact that
prevented it from granting summary judgment but that the Commission has
determined there is ample evidence in the record to allow it to decide all
material disputed facts, that the Commission has decided the disputed material
facts, and that the Commission has concluded that XRG failed to obligate itself
before the March 2010 rate change.
(2)Clarify that no further hearing is necessary because the Commission has
substantial evidence upon which to base its decision and the material
determinations of fact the Commission was required to make do not involve
questions of credibility, subjective intent, or motive.
46 In denying a petition for reconsideration, the Commission frequently explains or clarifies its reasoning in
the challenged order. See e.g. In The Matter Of The Investigation Of Time-Of-Use Pricing for Idaho
Power Residential Customers, IPUC Case No. IPC-E-02-12; Order No. 29226 (2003) (simultaneously
denying reconsideration and amending order to clarify). Moreover, the Commission is always free to
clarify any order on its own motion. IDAPA 31.01.01.325.
ROCKY MOUNTAIN POWER'S ANSWER 15
(3) Clarify that, while the Commission finds the Company was reasonable in early
2009 to conclude there was a transmission constraint at the proposed point of
delivery, such finding is not essential to the holding that XRG failed to obligate
itself to sell power prior to the March 2010 rate change.
III. CONCLUSION
XRG's request to reinstate its original claims should be denied because the
Commission properly found on the merits that XRG did not take sufficient steps to create
a legally enforceable obligation. XRG's request to amend its original complaint should
be denied because it would result in unfair prejudice to the Company. XRG's remaining
requests should be denied as moot. The Company respectfully requests that the
Commission clarify Order No. 32553 as discussed above.
Dated this 15th day of June 2012.
Respectfully submitted,
,MZbYander
hUSB 2284
USB 11467
Mountain Power
Jeffrey S. Lovinger, OSB 960147
Kenneth E. Kauflnann, OSB 982672
Lovinger Kaufmann LLP
Attorneys for Rocky Mountain Power
ROCKY MOUNTAIN POWER'S ANSWER 16
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that, on the 15th day of June, 2012, a true and correct copy of the
foregoing ROCKY MOUNTAIN POWER S ANSWER TO XRG S PETITION FOR
RECONSIDERATION OF COMMISSION ORDER NO 32553 in Case No PAC-E- 10-08
was served in the manner shown to
DATED this 15th day of June, 2012
LOVINGER KAUFMANN LLP
Jeff
Lor)tr,
SB 960147
Rcky Mountain Power