20210525Exhibit 7.pdf

Exhibit 7

December 10, 2019
Letter from Greg Adams
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December 10,2019
Via First Class Mail and Electronic Mail
Jacob A. McDermott
Senior Counsel
Rocky Mountain Power
1407 W. North Temple, Suite 320
Salt Lake City, Utah 841l6
j acob.mcdermott@pacificorp. com
Fall River Rural Electric Cooperative, Inc.'s Request for Power Purchase Agreement for
Chester Diversion Hydroelectric
Dear Mr. McDermott:
I write on behalf of my client, Fall River Rural Electric Cooperative, Inc., ("Fall River")
to request that PacifiCorp, dba Rocky Mountain Power, supply a draft power purchase agreement
("PPA") for sale of the output of the Chester Diversion Hydroelectric project to Rocky Mountain
Power as a qualifying facility ("QF") under the ldaho Public Utilities Commission's ("[PUC")
implementation of the Public Utility Regulatory Policies Act of 1978 ("PURPA").
Unfortunately, Rocky Mountain Power is currently in violation of its obligations to negotiate for
the purchase of the output of this facility in good faith, and therefore this letter states Fall River's
position to ensure there is no confusion and to attempt to facilitate an amicable path forward.
The Chester facility is currently in operation, and Fall River wishes to enter into a PPA to
sell the output to Rocky Mountain Power at the avoided cost rates under PURPA. The Chester
facility is a QF, and therefore the proposed transaction falls under the IPUC's implementation of
PURPA. On September 12,2019, Fall River submitted a complete application to receive
indicative pricing and a draft PPA. The application followed the format of Rocky Mountain
Power's Schedule 38 on file with the IPUC, and Rocky Mountain Power did not notify Fall
River that the submittal was incomplete within the 7-day period allotted for Rocky Mountain
Power to do so in Schedule 38. Therefore, Rocky Mountain Power should have supplied a draft
PPA to Fall River within 30 days - no later than October 12,2019. However, instead of doing
so, Rocky Mountain Power's representative, Kyle Moore, communicated via e-mail dated
October 2,2019, that "[p]rior to providing a draft PPA we will need to see a completed
Exhibit 7 Page 1
Rocky Mountain Power
December 10,2019
Page 2
interconnection study from PacifiCorp transmission demonstrating that the project can be
interconnected to our system in the timeframe you have proposed for pricing."
As you know due to our previous discussion on October 8, 2019, Fall River disagrees that
Rocky Mountain Power can withhold a draft PPA until such time as Rocky Mountain Power
furnishes an interconnection study. As Rocky Mountain Power is also aware, any such
requirement would be a violation of the applicable PURPA rules, which preclude a purchasing
utility from delaying the creation of a legally enforceable obligation to sell power from a QF by
conditioning such obligations on the QF first overcoming delays in the interconnection process
created by the purchasing utility. To be more specific, in FLS Energ,,, Inc., 157 FERC n 6I,2ll
(Dec. 15, 2016), the Federal Energy Regulatory Commission held that it was unlawful to
condition the QF's right to commit to a PPA on completing steps in the interconnection process
because the purchasing utility controls the interconnection process: "Such a requirement allows
the utility to control whether and when a legally enforceable obligation exists - e.g., by delaying
the facilities study or by delaying the tendering by the utility to the QF of an executable
interconnection agreement." Id. atP 24. Thus, Rocky Mountain Power's determination that it
will withhold a draft PPA until after Rocky Mountain Power supplies interconnection studies is
unlawful, and Rocky Mountain Power is now over two months late in supplying the draft PPA to
Fall River.
Furthermore, Fall River requested that Rocky Mountain Power supply a pro forma PPA
for review on October 8,2019, pending the delays imposed by Rocky Mountain Power's refusal
to supply a draft PPA specific for its facility. But Rocky Mountain Power never supplied that
document, even though Schedule 38 requires it to be supplied within 7 days, by October 15,
2019.
In addition to being in non-compliance with the requirements the rules for negotiating a
PPA, Rocky Mountain Power, through its transmission group, is also in noncompliance with the
applicable rules governing interconnection of QFs. This should be a simple interconnection
because it is a very small facility with maximum capacity of only 2.4|y''W proposing connect to
a 12.5 kV distribution line. On October 4,2019, Fall River submitted an interconnection request
for Chester and was assigned queue number 1182. After further discussion, on November 12,
2019, Fall River entered into the system impact study agreement and submitted the $10,000
deposit. However, instead of supplying that study - which Rocky Mountain Power asserts is a
precondition for obtaining a draft PPA - PacifiCorp's transmission group communicated via
letter dated November 25 , 2019 , that no such study would be supplied. PacifiCorp transmission
asserts that "[d]ue to a significant number of Interconnection Requests proposing to interconnect
in the same geographical area of PacifiCorp's electrical system as the Interconnection Request
submitted by Fall River Rural Electric Cooperative, Inc. ('Interconnection Customer'),
PacifiCorp will be unable to provide the Interconnection Customer's System Impact Study
('Study') within the timelines outlined in PacifiCorp's Small Generation Interconnection
Procedures." However, there is no lawful basis for this delay.
The applicable regulations require PacifiCorp to interconnect to the QF on non-
discriminatory terms and provide clear deadlines to move the study process along. There is no
Exhibit 7 Page 2
Rocky Mountain Power
December 10,2019
Page 3
lawful basis for PacifiCorp transmission to completely refuse to process interconnection requests
under the applicable interconnection rules and the parties' own System Impact Study Agreement,
which affirmatively states "Transmission Provider shall cause to be performed a system impact
study(s) consistent with the standard Small Generator lnterconnection Procedures in accordance
with the Open Access Transmission Tariff." The SIS Agreement further requires PacifiCorp
transmission to supply the study within 30 days, by Decemb er 12, 2019, in the case of a
distribution study and within 45 days, by Decemb er 27 , 2019, in the case of a transmission study.
Additionally, regardless of the status of the interconnection process, Fall River has
already progressed far beyond what should be required under the plain words of the IPUC-
approved Schedule 38 to obtain a draft PPA. Fall River has already progressed to the stage of
the interconnection process of a System Impact Study Agreement, which is not a requirement
under Schedule 38 until 120 days after the Commission order approving the executed PPA. See
Sheet 38.9 at $ I I (b). The only actions holding up the commencement of sales to PacifiCorp
under the proposed PPA are actions that PacifiCorp transmission must take to connect the facility
to PacifiCorp's system. There is no basis to delay discussion of the draft PPA in that
circumstance.
In sum, we make three requests:
L Please supply the pro forma PPA that was requested on October 7,2019.
2. Please supply the draft PPA that was requested on September 12,2019.
3. Please supply the System Impact Study that PacifiCorp agreed to supply when it
entered into the System Impact Study Agreement on November 12,2019.
We look forward to receiving confirmation that Rocky Mountain Power and PacifiCorp
transmission group will process these requests for a PPA and interconnection. tf you have any
questions regarding this matter, please contact me.
S ly
Gregory M.Adams
Attomey for Fall River Rural Electric Cooperative, Inc.
cc Bryan Case, Fall River Rural Electric Cooperative, Inc. (e-mail only)
Exhibit 7 Page 3