20111215Stipulation.pdf

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BEFORE THE IDAHO PUJlUCr\J'l,lLlTIES COMMISSION
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IN THE MATTER OF THE APPLICATION OF )
PACIFICORP DBA ROCKY MOUNTAIN )
POWER FOR A DETERMINATION )
REGARDING A FIRM ENERGY SALES )
AGREEMENT BETWEEN ROCKY MOUNTAIN )
POWER AND CEDAR CREEK WIND, LLC )
(RATTLESNAKE CANYON PROJECT) )
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IN THE MATTER OF THE APPLICATION OF
PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY MOUNTAIN
POWER AND CEDAR CREEK WIND, LLC
(COYOTE HILL PROJECT)
IN THE MATTER OF THE APPLICATION OF
PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY MOUNTAIN
POWER AND CEDAR CREEK WIND, LLC
(NORTH POINT PROJECT)
IN THE MATTER OF THE APPLICATION OF
PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINA nON
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY MOUNTAIN
POWER AND CEDAR CREEK WIND, LLC
(STEEP RIDGE PROJECT)
IN THE MATTER OF THE APPLICATION OF
PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR A DETERMINATION
REGARDING A FIRM ENERGY SALES
AGREEMENT BETWEEN ROCKY MOUNTAIN
POWER AND CEDAR CREEK WIND, LLC
(FIVE PINE PROJECT)
CASE NO. PAC-E-ll -01
CASE NO. PAC-E-l1-02
CASE NO. PAC-E-ll-03
CASE NO. PAC-E-11-04
CASE NO. PAC-E-ll-0S
DSMDB.2989964vI3D
STIPULATION OF SETTLEMENT AND REQUEST FOR
APPROV AI. OF POWER PURCHASE AGREEMENTS
This Stipulation of Settlement ànd Request for Approval of Power Purchase Agreements
("Stipulation and Request for Approval") is entered into by and among Cedar Creek Wind, LLC
("Cedar Creek"), Staff for the Idaho Public Utilities Commission ("Staff'), PacifiCorp dba
Rocky Mountain Power, a division ofPacifiCorp ("Rocky Mountain Power" and which may be
referred to herein individually as a "Pary" and collectively with Cedar Creek and Staff, the
"Parties") in order to resolve all disputes between or among the Parties in, and related to, the
above-captioned dockets and, in light of such resolution, and the agreements herein, to hereby
request that the Idaho Public Utilties Commission ("Commission") modify its July 27, 2011
Order on Reconsideration (the "July 27 Order") and approve three of the five Firm Energy Sales
Agreements as amended by this Stipulation and Request for Approval, namely, the North Point
Project (Case No. PAC-E-11-03), the Five Pine Project (Case No. PAC-E-11-05) and the Coyote
Hil Project (Case No. PAC-E-II-02) (together, the "Agreements"). The Agreements are
attached hereto, and incorporated herein by reference, respectively as Exhibit A (North Point
Project), Exhibit B (Five Pine Project) and Exhibit C (Coyote Hil Project). Rocky Mountain
Power, with Cedar Creek's suppoit, hereby withdraws the Applications requesting approval of
the Firm Energy Sale Agreements for the Steep Ridge Project (Case No. PAC-E-11-04) and the
Rattlesnae Canyon Project (Case No. PAC':E-11-0 1) (together, the "Withdrawn Agreements")
pursuant to Rui~ 68, IDAPA 31.01.01.068.
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SUMMARY
1. The Parties agree that this Stipulation and Request for Approval represents a fair,
just and reasonable resolution of the issues in this proceeding, is in the public interest, and is in
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accordance with law and applicable regulatory policies. As further delineated herein, the Parties
agree that as of at least December 13,2010, Cedar Creek had a "legally enforceable obligation"
with Rocky Mountain Power. Accordingly, the Parties respectfully request that the Commission,
puruant to its authority, approve the Stipulation and Request for Approval and all of its teims
and conditions, amend such orders and make such additional findings or take such notice as it
deems necessar and appropriate, and approve the Agreements. See IDAPA 31.01.01.326, 352-
354.
BACKGROUND
2. This proceeding concerns the Commission's review of five qualifying facilties
("QFs") power purchase agreements between PacifiCorp and Cedar Creek fied with the
Commission in the above captioned cases on January 10,2011 (the "Original Agreements").
Under the Original Agreements, Cedar Creek committed to sell, and Rocky Mountain Power
committed to buy, all ofthe energy and capacity from each of Cedar Creek's five wind
generating facilites (the "Pr~iects"). The Original Agreements were the result of months of
negotiation between Cedar Creek and Rocky Mountain Power.
3. With a view toward resolving the issues raised in the pending Commission cases
(PAC-E-l 1-01 through PAC-E-l 1-05), in FERC Docket No. ELI 1-59-000, and in Idaho
Supreme Court Docket No. 39134-2011, representatives of the Parties met on October 20 and 27,
November 16, and December 1,2011, pursuant to IDAPA 31.01.01.352, to engage in settlement
discussions. On the basis of these settlement discussions, the Parties stipulate and agree to the
following:
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TERMS OF THE STIPULATION AND REQUEST FOR APPROVAL
4. The evidence in the administrative record of the above-captioned Commission
dockets establishes that no later than December 13, 2010, Cedar Creek had committed itself to
sell to Rocky Mountain Power the output of the Projects, and Cedar Creek had demonstrated to
the satisfaction of Rocky Mountain Power its abilty to deliver on its commitment. By such date,
then, Cedar Creek had created a legally enforceable obligation under the Public Utility
Regulatory Policies Act of 1978 C'PURPA") and Federal Energy Regulatory Commission
("FERC") regulations implementing PURPA, thereby committing itself to sell, and Rocky.
Mountain Power to buy, the output of each of Cedar Creek's five Projects.
5. Because Cedar Creek had established a legally enforceable obligation no later
than December 13,2010, the Paries hereby respectfully request that the Commission modify its
July 27 Order to find that Cedar Creek was at the time entitled under PURPA to have the
Original Agreements approved by the Commission at the published rates available to 10 aMW
QFs as were in effect as of December 13,2010. The Paries agree and request that the
Agreements as contained in Exhibits A, B, and C be substituted for the Original Agreements, and
such substituted Agreements be approved by the Commission at the avoided cost rates contained
in the Original Agreements.
6. The Pares affirm their support for such approval together with a request thatthe
Commission find that the payments and terms set foi1h under the Agreements are just and
reasonable, in the public interest, and prudently incurred expenses of Rocky Mountain Power for
ratemaking purposes. In addition, the Parties request that the Commission determine that the
payments made under the Agreements are subject to the inter-jurisdictional cost allocation
agreements in effect between PacifiCorp and its retail state jurisdictions (including this
Commission, i.e., the "2010 Protocol") or a successor agreement. As identified in the 20 i 0
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Protocol, costs associated with the Agreements which exceed the costs PacifiCorp would have
otherwise incurred acquiring Comparable Resóurces, wil be assigned on a situs basis to the State
approving such contract. The Commission wil allow Rocky Mountain Power to recover the
costs associated with the Agreements in this proceeding in rates in Idaho in the event other
jurisdictions deny recovery of their proportionate share of said net expenses.
7. Cedar Creek and Rocky Mountain Power agree to modify the Original
Agreements as set forth in Exhibits A, B, and C. The Parties agre to support such modifications
and Commission approval of the Agreements. For the avoidance of doubt, in no event (including
upon any assignment or transfer of the Agreements) shall the combined Facilty Nameplate
Capacity of the Agreements exceed 133.4 MW. Further, in no event shall the sum ofthe net
output from the Agreements in any given calendar year exceed a cumulative 438,000 megawatt
hours (MWh). In the event the sum of the net output from the Agreements exceeds 438,000
MWh in any given calendar year, PacifiCorp shall determine the number of megawatt hours that
exceeded the 438,000 MWh calendar year cap by taking the sum of the net output of the
Agreements for the pai1icular calendar year and subtracting 438,000 MWh. That amount shall
be known as "Cap Inadvertent Energy". The Cap Inadvertent Energy shall be subtracted from
the net output of the Coyote Hil Project, if any such net output exists, prior to calculating
payment for the Coyote Hil Project for the December biling period of the particular calendar
year. In the event the Cap Inadvertent Energy exceeds the net output of the Coyote Hil Project
for the December biling period, the net output for the Coyote Hil project for biling purposes
for December shall be zero, and the remaining Cap Inadvertent Energy shall carryover to
subsequent months. A similar calculation wil then be performed in however many subsequent
months are required until such time as the Cap Inadvertent Energy equals zero.
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8. Any assignment or trnsfer of the Agreements following the approval of this
Stipulation and Request for Approval shall be made subject to the provisions of this Stipulation
and Request for Approval.
9. Cedar Creek and Rocky Mountain Power hereby withdraw the request for
approval of the Withdrawn Agreements. The Paries agree to support such withdrawals.
10. The Paries further request that the Commission (1) approve this Stipulation and
Request for Approval, (2) modify its July 27 Order to approve the Agreements, and (3) issue
such approvals as soon as possible but no later than 14 days after this Stipulation and Request for
Approval is submitted to the Commission for its review.
11. Upon issuance of an amended Order by the Commission approving the
Agreements and this Stipulation and Request for Approval, Cedar Creek agrees to withdraw its
Idaho Supreme Court appeal in Docket No. 39134-2011, and the Paries agree to waive any right
to file any action authorized by or in connection with the amended Order or the order issued by
FERC in Docket No. El 1-59-000 or any appeal concerning the matters expressed herein.
GENERAL PROVISIONS
12. The Paries agree that this Stipulation and Request for Approval represents a fàir,
just and reasonable resolution of the disputed claims and positions of the Parties on all issues in
this proceeding, and that this Stipulation and Request for Approval, and all of its terms and
conditions, are fair, just and reasonable, and are consistent with law and applicable regulatory
policies. Other than the above referenced positions and any comments or testimony required by
the Commission to be fied in support of the approval of this Stipulation and Request for
Approval, and except to the extent necessary for a Party to explain before the Commission its
own statements -and positions with respect to the Stipulation and Request for Approval, all
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negotiations relating to this Stipulation and Request for Approval shall not be admissible as
evidence in this or any other proceeding regarding the subject matters of this Stipulation and
Request for Approval. Rule 352, IDAPA 31.01.01.352.
13. The Paries submit this Stipulation and Request for Approval to the Commission
and recommend that the Commission approve the Stipulation and Request for Approval in its
entirety pursuant to Commission Rules 354 and 355, IDAPA 31.01.01. 354-355. If requested by
the Commission, the Paries shall support ths Stipulation and Request for Approval before the
Commission, and no Par shall appeal any portion of this Stipulation and Request for Approval
or any Order approving the same or approving the Agreements, except as expressly provided in
Paragraph 14 of this Stipulation and Request for Approval. If this Stipulation and Request for
Approval is challenged by any person not a pary to the Stipulation and Request for Approval,
each Pary reserves the right to cross-examine witnesses and put on such case as it deems
appropriate to respond fully to the issues presented, including the right to raise issues that are
incorporated in this Stipulation and Request for Approval. Notwithstanding this reservation of
rights, the Parties agree that they wil continue to support the Commission's adoption ofthe
terms of this Stipulation and Request for Approval and the Commission's approval of the
Agreements.
14. In the event the Commission rejects or materially modifies any par or all of this
Stipulation and Request for Approval or the Agreements, or imposes any additional material
conditions on approval of this Stipulation and Request for Approval or the Agreements, each
Pary reserves the right, upon written notice to the Commission and the other Paries to this
proceeding, within 3 business days of the date of such action by the Commission, to withdraw
from this Stipulation and Request for Approval (including the Agreements). In such case, no
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Pary shall be bound or pr~judiced by the terms of this Stipulation and Request for Approval, and
each Party shall be entitled to any available means of redress under law, including without
limitation an appeal to the Idaho Supreme Court of any order issued by the Commission in this
proceeding, or in further proceedings before the Commission, or in a court of competent
jurisdiction.
i 5. No Paity shall be bound, benefited, or prejudiced by any position asserted in the
negotiation of this Stipulation and Request for Approval, except to the extent expressly stated
herein. Nor shall this Stipulation and Request for Approval be construed as a waiver of the
rights of any Party unless such rights are expressly waived herein. No findings of fact or
conclusions of law other than those stated herein shall be deemed to be implicit in this
Stipulation and Request for Approval. This Stipulation and Request for Approval represents a
negotiated compromise between the Parties. No Party admits any fault or liabilty in connection
with the negotiations, proceedings or' other events associated with the Original Agreements, the
Agreements, the Withdrawn Agreements, or agreements between Cedar Creek and PacifiCorp
regarding transmission for the Projects. Nothing in this Stipulation and Request for Approval is
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intended to be precedent regarding any of the matters discussed herein in any other judicial or
Commission proceeding.
16. The obligations of the Parties under this Stipulation and Request for Approval are
subject to the Commission's approval of this Stipulation and Request for Approval in accordance
with its teiIDS and conditions.
17. Except as set forth in Paragraph 14, this Stipulation and Request for Approval
resolves aII issues raised by any Party in the captíoned dockets, in the FERC Proceeding, and in
Cedar Creek's appeal to the Idaho Supreme Court. Each Party, for good and valuable
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consideration received, waives, releases and discharges the other Parties from any and all causes
of action, suits, claims, demands, and liabilties whatsoever in law or equity, whether heretofore,
now or hereafter existing or arising, of every kind and nature, whether known or unknown with
respect to, or arising from, the allegations, facts, circumstances or contentions raised by, known
to or reasonably should have been known to any Pary in any proceeding or related activity
(including the negotiation and preparation of the Original Agreements, the Agreements, the
Withdrawn Agreements, this Stipulation and Request for Approval, or agreements between
Cedar Creek and PacifiCorp regarding transmission for the Projects) referred to in this paragraph
as of the execution date of this Stipulation and Request for Approval. Nothing in this Stipulation
and Request for Approval shall restrict the lights of any Paity to pursue any dispute or form of
relief necessary to enforce the terms of this Stipulation and Request for Approval or arising out
of conduct related to, or any events in connection with, the Parties' performance of the
Agreements which occurs after Commission approval of the Agreements.
18. The Parties shall remain free to participate in any existing proceeding, or to
initiate or paricipate in any future proceeding, addressing any matter not settled in this
Stipulation and Request for Approval, included, but not limited to generic issues concerning
QFs, the calculation of avoided costs, and any Integrated Resource Plan (lRP) proceedings.
19. This Stipulation and Request for Approval may be executed in counterparts.
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Respetfully subitte thi i~ day ofDembcr. 2011.
Rocy Me..... Power Cedar erOlk Wlt. LLC
B
ar C. Moedi
Senio VicPreid an Genera Counl '/ieePt.ei...~,,(,.~~lt.f&
ldabll Plibl1 Ullltie Commlion starr
By tii:....a. ~
K stine A. Siiso
Depuy Altorne)' Ocl
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PLEASE SEE EXHIBIT A
(NORTH POINT POWER PURCHASE AGREEMENT)
IN CASE NO. PAC-E-1I-03
PLEASE SEE EXHIBIT B
(FIVE PINE POWER PURCHASE AGREEMENT)
IN CASE NO. PAC-E-ll-05
PLEASE SEE EXHIBIT C
(COYOTE HILL POWER PURCHASE AGREEMENT)
IN CASE NO. PAC-E-ll-02
POWER PURCHASE AGREEMENTS IN
CASE NOS. PAC-E-ll-Ol (RATTLESNAKE CANYON)
AND PAC-E-ll-04 (STEEP RIDGE)
WERE WITHDRAWN PER STIPULATION