20220721Petition to Intervene.pdf

-- i,' ,,:
Randall C. Budge, ISB No. 1949
Thomas J. Budge, ISB No. 7465
RACINE OLSON, PLLP
P.O. Box l39l;201E. Center
Pocatello, Idaho 83204-1391
Telephone: [phone]l
Fax: [phone]
r andy @r acineo I son. com
[e-mail]
Attorneys for Georgetown lrrigotion Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN
POWER'S APPLICATION FOR APPROVAL
OR REJECTION OF THE POWER PURCHASE
AGREEMENT BETWEEN PACIFICORP AND
GEORGETOWN IRRIGATION
CASE NO. PAC-E-22-06
lr'.j 4. 10'.,- L'J)
PETITION TO INTERVENE AND
TO ALLOW COMMENTS OF
GEORGETOWN IRRIGATION
COMPANY
Georgetown Irrigation Company, by and through its attorneys, submit the following
Petition to Intervene and to Allow Comments of Georgetown Irrigation Company.
BACKGROUND
l. Georgetown Irrigation Company ("Seller") is a non-profit corporation incorporated in
Idaho on March 31,1894, and located in the City of Georgetown, County of Bear Lake.
Seller owns irrigation water right no. ll-290 for 70 cfs of water in Georgetown Creek
with a priority date of May l, 1881. Seller provides irrigation water through a closed
gravity flow pipeline system to I l5 shareholders are small farmers that in total irrigate up
to 3,500 acres of farmland in and around Georgetown. Seller also owns licensed water
right no. ll-7219 with a priority date of January 12, l98l for 30 cfs of water in
Georgetown Creek for power production purposes year-round.
2. Seller owns, operates, and maintains a small hydroelectric power plant with a name plate
capacity rating of 480 kw (the "Facility"). Seller operates the Facility as a Qualifying
Facility ("QF") under applicable provisions of PURPA. The facility generates energy
PETITION TO INTERVENE AND TO ALLOW COMMENTS OF GEORGETOWN
IRRIGATION COMPANY I
year-round, except during times in the summer when all water is taken for inigation,
during periods of maintenance and when the Company directs shut off.
3. Seller's original Power Purchase Agreement ("PPA") was entered into with Rocky
Mountain Power, a division of PacifiCorp (the "Company") on July 2,1984. The PPA
included provisions that addressed both energy sales and interconnection requirements.
Seller's original PPA expired March 3I,2021.
4. More than a year prior Seller expressed to the Company a desire to renew the contract
and continue to make energy sales from the Facility to the Company in the same manner
as under the original contract.
5. Indications received back from the Company lead Seller to believe that there would be no
problem extending the PPA an additional 20 years which would be a relatively simple
and standard process. The Company provided the support and expertise with respect to
the contract renewal and approval process which Seller'relied upon. At all times Seller
found the Company's representatives good to work with, helpful, cooperative and
effective communicators. Seller understood that the rates would be updated and would
continue to include payment for both capacity and energy.
6. During the year 2020 there were several communications between Seller and the
Company regarding a Transmission Interconnection Application requested by the
Company. Initially Seller was confused and questioned the need for this as no
transmission interconnection application had been previously required and the Facility
was already connected to the Company system. After the Company indicated that the
Transmission Interconnection Agreement would have to be entered into before the PPA
could be renewed and approved, Seller sought to engage an electrical engineer to
complete the application. Much of the information required in the application was not
readily availble and seemed to better to better relate to a new facility rather than an
existing one. Because of Covid related problems Seller had a difficult time and
experienced unusual delays locating an engineer who could timely do the work and in
timely pursuing the things the Company required as part of the PPA renewal process.
7. As stated in its Application the Company recognized that Seller would not be able to
complete the necessary requirements to get a Transmission Interconnection Application
completed and an agreement entered into before the original PPA expired March 31,
PETITION TO INTERVENE AND TO ALLOW COMMENTS OF GEORGETOWN
IRRIGATION COMPANY 2
2021. Accordingly, the Company filed an Extension Agreement with the Idaho Public
Utilities Commission (the "Commission'o) on April 8, 2021 which was approved on
August 2,2021by Order No. 35123 extending the PPA through March 31,2022.
(Application of Roclcy Mountatn Power paragraphs 13, 14.)
8. On September 1, 2021the Company and Seller entered into the new Transmission
Interconnection Agreement and continued to work to secure the required proof of
insurance to support the PPA renewal. On March 28,2022 Seller and the Company
entered into a new 20 year PPA that would enable Seller to continue to operate the
Facility as a QF and as a network resource, Exhibit I to the Application. As stated in the
Company's Application, paragraph 17, Seller has demonstrated to the Company's
reasonable satisfaction that: (l) the Facility's net energy will equal the energy delivery
schedules for the term of this PPA; and (2) the likelihood that the Facility, under average
design conditions will generate no more than 0.48 MW in any calendar month, with the
Facility's estimated net output over the first year estimated to be 1,856 megawatt hours.
9. As stated in the Company's Application at paragraph l8 under the new PPA effective
upon the Commission's approval, "the prices to be paid for energy and capacity are just
and reasonable, in the public interest, and that the costs incurred by PacifiCorp for
purchase of capacity and energy from Seller are legitimate expenses, all of which the
Company will allow PacifiCorp to recover in rates in Idaho."
10. On June l, 2022Comments of the Commission Staff were filed asserting, among other
things, that Seller's new PPA should not be heated as a renewal entitling capacity
payments, rather as a new PPA with capacity payments until2029, the Company's first
deficit year, because the project did not continuously generate energy between April l,
2022 andMay 12,2022. See StaffComments p.3. The StaffComments were not served
upon Seller.
I l. After the Company brought Staff s Comments to Seller's attention, Seller had several
communications with representatives of the Company concerning the same. Both Seller
and the Company were surprised by the position Staff was asserting under the
circumstances. Particularly, because the brief period the Facility did not operate was at
the request of the Company who instructed Seller to "shut off'until the Commission
approves the new PPA. Because the Commission's May 12,2022 Order No. 35401
PETITION TO INTERVENE AND TO ALLOW COMMENTS OF GEORGETOWN
IRRIGATION COMPANY 3
giving Notice of the Application and establishing Modified Procedure only allowed the
Company to file Reply Comments, Seller reasonably understood and expected that the
Company would respond to the StaffComments and support the PPA as filed with the
Application with respect to rates that included both capacity and energy payments. At
that time and even now Seller did not rcalize it had or should have an opportunity to file
its own comments with the Commission.
12. After realizing on or about July l5h, 202 thatthe Company would not be filing reply
comments, Seller promptly engaged an attorney to seek advice on the matter and to file
these comments to inform the Commission of its disagreeing with the Staff Comments
and relevant facts relating to the renewal of the PPA.
PETITION FOR INTERVENTION AI\[D EXTENSION OF TIME
The record establishes that the Commission's Notice of Application, Notice of Modified
Procedure, Order No. 35401 dated May 12,2022 (the "Order") was served upon the Company
but not the Seller. The Order gives notice that persons interested in submitting written comments
must do so by June 1,2022; and, that "the Company must file any reply comments by June 8,
2022." As such, it was reasonable for the Seller to believe that only the Company could file reply
comments by the deadline; further, that the Company would do so when the Staff filed comments
asserting that the new PPA should preclude capacity payments until2029, contary to what was
proposed with the Company's Application. Similarly, the comments of Staff were served upon
the Company, but not Seller. Seller first learned ofthe Staff Comments was from Company's
representatives Irene Heng who emailed them to the Seller's Secretary Lynette Smith on June 7,
2022. Otherwise Seller would not have known of the Staff Comments. Regarding the Staff
Comments, Ms. Heng stated in her email "this is a very surprising set of comments, reply is due
June 8tr." At the time Seller assumed that the Company would file reply comments and later in
July learned that it didn't. Seller was working towards the new PPA only with the Company
representatives without understanding it needed to do anything further with the Staff or the
Commission.
At the time Seller lacked any knowledge or understanding of anything else it could or
should do to protect its interests and oppose the adverse Staff Comments. Accordingly, Seller
submits this Petition to Intervene to allow its comments to be considered, including modification
PETITION TO INTERVENE AND TO ALLOW COMMENTS OF GEORGETOWN
IRRIGATION COMPANY 4
of the Order as necessary to allow the same. This petition seeks to allow Seller to participate in
this proceeding and submit comments as allowed by Rule 53 which authorizes Petitions to
modify, amend, or clarify existing orders.
Discussion of the Rules of Procedure of the Idaho Public Utilities Commission, IDAPA
3 I .0 I .01 ("Rules") is appropriate. Rule I 3 provides that the Rules are to be "liberally construed"
to secure determination and provide that the Commission may permit deviation from the Rules
when it finds compliance with them is "impractical, unnecessary, or not in the public interest."
Under Rule 17 time is computed whenever the order or notice requires an act. In this case the
Order did not establish any specific timeline within which Seller must intervene, comment or
otherwise act. Moreover, the June 8 deadline to file reply comments applied only to the
Company. Seller's Comments should be accepted because Staff Comments eliminating capacity
payment vntil2029 (if accepted) would have a direct, substantial, and adverse financial impact
upon Seller. As such, Seller should be given a reasonable opportunity to file comments upon
realizingthe Company chose not to and for the reason that Order did not allow reply comments
from others. Seller feels blindsided by Staff Comments and deprived of due process and an
opportunity to protect its interests unless these comments are accepted.
Under Rule 3l Seller is not a listed party to the proceeding, reasonably relying upon the
Company as the Applicant to carry the ball. Seller had no reason to petition to intervene or to
file comments until after it learned of the adverse Staffcomments in June and later in mid-July
that the Company would act by fling reply comments to protect PPA as filed in the Application
as necessary to protect Seller's interests in the proposed contract.
Under a strict reading of Rule 39 Seller does not fall within the definition of "lnterested
Persons," even though its interests alone are adversely affected by Staff s proposal to eliminate
capacity payments. tf Seller qualifies to be treated as an "lnterested Person" under Rule 39, then
Rule 202 requires that the Order establishing the modified procedure "be provided to all
interested persons. . . located within the territorial scope of the application who. . . may be
affected by the proceedings and to all parties." The failure to serve Seller with the Order and
with Staff Comments does not comport with this rule. Allowing Seller to submit these comments
will eliminate serious due process of law problems and will not prejudice the parties, burden the
Commission or delay the entry of a final order.
PETITION TO INTERVENE AND TO ALLOW COMMENTS OF GEORGETOWN
IRRIGATION COMPANY 5
Under the unusual circumstances presented as above-described and since this matter is
being handled pursuant to modified procedure in a summary fashion, in the interest ofjustice and
fairness it is appropriate for the Commission to extend any deadlines that may exist and modiff
the previous Order as may be appropriate to allow these comments to be filed by Seller and
considered by the Commission.
COMMENTS
Pursuant to its original 1984 contract, coupled with the one-year extension approved by
the Commission on August 2,2021in Case No. PAC-E-21-ll, the Seller has continuously
delivered energy to the Company from 1984 through March 31,2022. During that entire period
36 year period Seller was treated as a capacity resource and received capacity as well as energy
payments. Seller's new PPA with the Company was signed on March 31,2022, at which time
Seller was ready, willing, and fully able to continue to deliver energy to the Company. The only
reason Seller did not deliver energy to the Company during the period starting April1,2022
and ending May 12,2022 is because it was instructed by Company representative Irene Heng on
April l, 2022to "shut down" and stop delivering energy until the new PPA was approved by the
Commission. Seller complied with this directive. On May 12,2022 Ms. Heng instructed Seller
that it could "turn on" and resume generation. Seller immediately did so. This 42 day period of
non-generation occurred when Seller otherwise would have been fully generating as this was the
period of high spring runoffbefore irrigation demand begins.
This short 42 day period of non-generation became the basis of StafPs belief that the
Facility is not eligible for capacity payments. On page 3 of its Comments, the Staff stated as
follows:
*Staffbelieves that the Facility is not eligible for capacity payments until 2029,
the Company's first deficit year, because the project did not continuously generate
energ between April1.2022. andMay 12.2022.
A QF only receives compensation for capacity when the utility is capacity
deficient, unless it is a renewal or extension project that was paid for caBacitv at
the end of the original contract (see Order No. 32697) or has contributed to
meeting the utility's capacity needs during the original contract term (see e.g.,
Case Nos. IPC-E-19-04, IPC-E-19-30, and IPC-E-19-35). In addition, capacity
payments depend on a facility's continuous operation."
Staff acknowledges that Seller would have been eligible for capacity payments as a
renewal contract had it continuously generated energy stating on page 3 of its Comments:
PETITION TO INTERVENE AND TO ALLOW COMMENTS OF GEORGETOWN
IRRIGATION COMPANY 6
"However, the project has contributed to meeting the Company's need for
capacity during the term of the original 1984 contract, and should have been
eligible for capacity payments in the proposed PPA for any hourly generation up
to 330 kWh from the Facility, had it continuously generated energy."
Staff apparently was unaware that the period of non-generation was at the Company's
request and not based on the inability or any act of Seller. Stafls position should be rejected
because the only reason Seller did not generate during this period was because it was instructed
by the Company not to generate. The contract gives the Company the right to stop delivery
which Seller must comply with. Under the circumstances it would be unreasonable, unjust and
an unconscionable penalty to Seller to deprive it of capacity payments it would otherwise be
entitled to as a renewal contract. For these reasons it is respectively requested that the
Commission reject Staff s recommendation and approve the new renewal PPA as proposed by
the Company.
Seller has no comments with respect to the other PPA modifications recommended by
Staff. These are technical in nature and best resolved between the Company and Staff.
Seller also wishes to comment on the delays that were experienced in the course of
securing a new renewal PPA with the Company which required the one-year extension. These
delays were primarily related to submitting a new Transmission Interconnection Application and
meeting new insurance requirements. Initially Seller did not understand why it was being
required to submit a Transmission Interconnection Application because its Facility was already
connected and had been delivering energy throughthese connections continuously since 1984.
After it was explained that the new Transmission Interconnection Application was being required
pursuant to FERC order, Seller realized it could not complete the long, complicated and detailed
application without securing expertise from an electrical engineer. Seller experienced difficulties
and delays in securing an engineer willing to tavel and inspect the Facility and to provide the
technical information to complete the application due to Covid.
Seller's normal business conduct was delayed and made difficult by applicable Covid
protocols during the time periods in question. Seller was particularly affected by Covid
difficulties because it lacks full+ime employees and is managed by a volunteer board of farmers.
During Covid regular meetings by Seller's board necessary to conduct business were prevented
or delayed. Remote meetings by Zoom were not an option because Seller and its board members
lack the necessary equipment and sophistication for remote meetings.
PETITION TO INTERVENE AND TO ALLOW COMMENTS OF GEORGETOWN
IRRIGATION COMPANY 7
The additional capacity payments are highly important to Seller and Seller and its
shareholders will placed in a position of final hardship if they are eliminated. The larger capacity
payments from the Facility have been relied upon to pay offthe debt associated with the
construction of the Facility, as well as the debt service on the closed pipeline delivery system
installed to provide irrigation efficiencies, including gravity irrigation by pressure eliminating
pumping costs. While the Facility is now paid off and debt free, because of its age increased
maintenance, repair and upgrade expenses are anticipated in the near future. Furthermore, the
pipeline irrigation system was financed over 50 years by reason of which debt service is ongoing.
Retaining the capacity payments will enable the Seller to continue to effectively and efficiently
operate the Facility and its irrigation system in the future as it has in the past.
RECOMMENDATIONS
Seller respectfully recommends the following:
l. That Seller's petition be granted to modify the Order and any appliable deadlines
imposed thereby to allow the filing and consideration of the Seller's comments.
2. That the Commission reject Staff s recommendation that capacity payments be delayed
until2029.
3. That the new PPA between the Company and Seller be approved with capacity payments
starting immediately.
4. That the Commission direct the Company and Staff to address and resolve the other
technical contract modifications recommended by Staff; alternatively, that the
Commission rule upon the other contract modifications recommended by Staff.
PETITION TO INTERVENE AND TO ALLOW COMMENTS OF GEORGETOWN
IRRIGATION COMPANY 8
Respectfrrlty submittsd this 2 ls day of July, 2W2.
By:
RACINE OLSON, PLLP
C.
TH0IyIAS J. BUD@
Attorneys fur Georgetatn Inigottan
Congty
PETITTON TO INTtsRVENE AND TO ALLOW COMDTENTS OF GEORGETOWN
INAIGAIION COMFANY 9
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on this 2lst day of July, 2022,1served a true, correct
and complete copy of the foregoing document by email to each of the following:
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise lD 83720-0074
secretarv@puc. idaho. gov
Ted Weston
Emily Wegener
Rocky Mountain Power
1407 West North Temple, Ste. 330
salt Lake city, uT 841l6
ted.weston@pacifi com.com
idahodockets@oacifi com.com
emily.com
DATA REQUEST RESPONSE CENTER
E.MAIL ONLY:
datarequest@oacifi corp.com
Dayn Hardie
Deputy Attorney General
Idaho Public Utilities Commission
PO Box 83720
Boise, lD 83720-0074
dayn.hardie@ouc. idaho. qov
c.
RANDALL C. BUDGE
PETITION TO INTERVENE AND TO ALLOW COMMENTS OF GEORGETOWN
IRRIGATION COMPANY l0