20220216Answer to Petition for Reconsideration.pdf

Y ROCKY MOUNTAIN
POWER
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, i f[:i l6 Fii 3: h9 1407 W. North Temple, Suite 330
Salt Lake City, Utah 84116: .. ,;--i i:ii-t v
February 16,2022
VA ELECTROMC FILING
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
11331 W. ChindenBlvd
Building 8 Suite 20lA
Boise,lD 83714
Re: CASE NO. PAC-E-21-05
IN THE MATTER OF TIIE APPLICATION OF PACIUCORP FOR APPROVAL
OR REJECTION OT'THE PT'RCHASE POWER AGREEMENT WITH
COMMERCIAL ENERGY MANAGEMENT, INC.
Dear Ms. Noriyuki:
Please find attached Rocky Mountain Power's answer to Commercial Energy Management's
petition for reconsideration in the above-referenced matter.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
Joelle R.
Vice-President of Regulation
Enclosures
"^..D
Emily Wegener (lSB #ll614)
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake city, utah 841l6
Telephone: [phone]
FAx: [phone]
Email: emil)r.wegener@nacifi corp.com
Attorneyfor Rocly Mountain Power
BEFORE TIIE IDAHO PUBLIC UTILITIES COMMISSION
rN THE MATTER OFTHE APPLICATION OF ) CASE NO. PAC-E-21-05
PACTFTCORP FORAPPROVAL OR )
REJECTTON OF THE PURCHASE POWER ) AIISWER TO PETITION
AGREEMENT WITH COMMERCIAL ) TOR RECONSIDERATION
ENERGY MANAGEMENT,INC. )
Pursuantto Rule 331.05 ofthe Rules of Procedure ofthe Idaho Public Utilities Commission
("Commission"), Rocky Mountain Power a division of PacifiCorp (the "Company") hereby
submits its Answer to the Petition for Reconsideration filed by Commercial Energy Management,
Inc. ("CEM") in the above-referenced matter.
On March 3,2021, the Company submitted itsApplication forApproval or Rejection of
the Purchase Power Agreement with Commercial Energy Management, Inc. ("CEM"). The
Agreement at issue is a Power Purchase Agreement ("PPA") executed February 26, 2021
("Agreement"), under which CEM agrees to use its existing facility, a qualifying facility under the
Public Utility Regulatory Policies Act of 1978 ("QF"), to provide power to the Company.
On January 25,2022, the Commission conditionally approved the Agreement so long as
the Company and CEM agreed to trvo minor modifications.lAs indicated in its comments, the
I In the Matter of RoclE Mountain Powerb Applicationfor Approval or Rejection of the Power Purchase Agreement
with Commercial Energt Management, Inc., Case No. PAC-E-21-05, Order No. 35303 (January 25,2022) ("Order
35303").
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Company is willing to make the recommended modifications. However, it has not been able to
obtain agreement for the modifications from CEM. The Company is currently purchasing
electricity from CEM under the terms of the Agreement, pending signature for the modifications
and final Commission approval.
CEM filed a Petition for Reconsideration of Order 35303 ("Petition") on February 9,2022,
relating to the inclusion of the *901110" provision. Specifically, CEM claims that the Commission
should reconsider its conditional approval because the 90/ll0 provision was not included in
CEM's original PPA with the Company and because the Commission did not "provide any
independent analysis of the 90/ll0 Provision" in Order 35303. The Company recommends that
the Commission deny this Petition for reconsideration. Order 35303 complies with longstanding
Commission precedent.
The Commission should not grant CEM's request to reconsider Order 35303 because the
Commission is not required to provide an independent analysis of the 90/ll0 provision in
Order 35303. "The Commission has authority under PURPA and the implementing regulations of
the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric utilities
to enter into fixed term obligations for the purchase of energy from qualified facilities and to
implement FERC rules."2 The now well-established 90/ll0 provision was first upheld by the
Commissionin2004 in an Order dismissing a complaint against Idaho Power3 and has become a
standard provision in Idaho QF contracts, including a number of hydro contracts recently approved
2 Id.; see also Rosebud Enterprises, Inc. v. Idaho Public Utililies Comm'n,917 P.zd766,772 (Idaho 1996).
3 Il.S. Geothermal, Inc. v. Idqho Power Co., Case No. IPC-E-03-8, Order 29632 at 20 (November 22,2004).
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by the Commission,a without regard to the type of generation facility used by the QF or its
appl icable operating constraints.
CEM argues that the 90/l l0 provision shouldn't be applicable because it first entered into
a PPA with the Company in 1991, before the 90/l l0 provision was put in place, which somehow
justifies not including the provision in the new Agreement. However, this Agreement was not
entered into until February 26,2021, and the fact that the parties had a previous PPA does not
entitle CEM to the same terms as the earlier agreement. Therefore, the Commission rightly
concluded that the 90/l l0 provision should be included in the Agreement.
Finally, CEM has no grounds for reconsideration because it agreed to the 90/l l0 provision
when it signed the Agreement, and it has not yet signed the amended Agreement. It was not
appropriate for CEM to challenge the Agreement that it signed, particularly when it sold power to
the Company under that Agreement pending approval. Now that the Agreement has been
conditionally approved, there is no operative contract forthe Commission to consider unless CEM
signs the amended Agreement. The Commission approved the Agreement subject to the Company
and CEM executing and submitting an amendment to the Commission that modifies the definition
of Expected Net Output and to correct an inconsistency. CEM has not challenged these
requirements. Without a signed amendment, the Agreement has not been approved and, there is
nothing for the Commission to reconsider.
For these reasons, the Company respectfully requests that the Commission reject the
Petition.
a See, e.g., In the Matter of the Application of ldaho Power Companyfor Approval or Rejection of an Energt Sales
Agreement with Big Wood Cqnal Company, Order No. 34956 (March 17,2021) (including the 90/l l0 provision in a
QF between Idaho Power and a 575 kW hydroelectric facility).
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Dated this l6m day of Febnrary 2022.
Respeetftrlly eubmitted by,
ROCKYMOI'NTAIN POWER
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ErltyGetier z
Rocky tvlountain Power
1407 WestNorttr Te,mple, Suite 320
Salt Lake Ciry, Uratr 84116
Telophone: ($AD 2204526
Email: emil)[e-mail]
Attorneyfor Rocky Momtaln Fower
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