20210511Notice of Appeal.pdf

Gregory M. Adams (ISB No. 7454)
Peter J. Richardson (ISB No. 3195)
Richardson Adams, PLLC
515 N. 27th Street
Boise,Idaho 83702
Telephone: [phone]
Fax: [phone]
[e-mail]
peter@richardsonadams. com
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Attorneys for Petitioner-Appellant Coleman Hydroelectric, LLC
IN THE PUBLIC UTILITIES COMMISSION OF THE STATE OF IDAHO
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
COLEMAN HYDROELECTRIC LLC, FOR
THE SALE AND PURCHASE OF ELECTRIC
ENERGY FROM THE COLEMAN HYDRO
PROJECT
CASE NO. IPC-E-20.27
NOTICE OF APPEAL
COLEMAN HYDROELECTRIC, LLC
Petitioner-Appellant
IDAHO PUBLIC UTILTIES COMMISSION
Respondent-Respondent on Appeal
THE ABOVE.NAMED RESPONDENT IDAHO PUBLIC UTILITIES
COMMISSION, THE PARTIES'ATTORNEYS, AND TTM CLERK OF TI{E
IDAHO PUBLIC UTILITIES COMMISSION
NOTICE IS HEREBY GTVEN THAT
l. The above-named appellant, Coleman Hydroelectric, LLC, appeals against the
above-narned respondent, Idaho Public Utilities Commission ("Commission"), to
the Idaho Supreme Court from the Commission's Final Order on Reconsideration
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TO:
No. 34991, entered in the above-entitled proceeding on the 5th day of April,202l,
Commission President Paul Kjellander presiding. A copy of the order being
appealed is attached to this notice.
2. Appellant Coleman Hydroelectric, LLC was an original party to the proceeding
below and has a right to appeal to the ldaho Supreme Court because it petitioned
for reconsideration of the Commission's Final Order No. 34870, and the
Commission denied such petition in its Final Order on Reconsideration No.
34991. Thus, the order described in paragraph 1 above is an appealable order
under and pursuant to Idaho Appellate Rules I 1(e) and 17, and Idaho Code
Section 6l-627.
3. Appellant Coleman Hydroelectric, LLC preliminarily intends to present the
following issues on appeal, each of which regards the Commission's Final Order
on Reconsideration No. 34991 and Final Order No. 34870 (collectively, the
'oCommission's Orders"):
i. Whether the Commission's Orders are not in conformity with, and
unlawfully applied, the Public Utility Regulatory Policies Act of 1978,16
U.S.C. $ 824a-3, and the applicable Federal Energy Regulatory
Commission regulations, l8 C.F.R. 5 292.304(d), by denying Appellant
Coleman Hydroelectric, LLC's entitlement to the avoided cost rates
included in the energy sales agreement executed by Appellant Coleman
Hydroelectric, LLC and Idaho Power Company on the basis that such rates
became unavailable before such agreement was fully executed?
1l Whether the Commission's Orders are arbitrary and capricious, and not in
conformity with state law, because the Orders ignored, and failed to
properly apply, the Commission's own precedent applying 18 C.F.R. $
292.304(d), wherein the Commission has approved entitlement to avoid
cost rates that had become unavailable before a written contract containing
such rates was fully executed?
Whether the record lacks sufficient evidence to support the Commission's
ultimate finding that Appellant Coleman Hydroelectric, LLC and Idaho
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Power Company intended for the effective date of their energy sales
agreement to override and invalidate the avoided cost rates that were
included in the agreement?
4. No order has been entered sealing all or any portion of the record.
5. Appellant Coleman Hydroelectric, LLC is aware of no proceedings in this case
(IPC-E-20-27) where a reporter was present because the case was processed by
modified procedure pursuant to IDAPA 3 I .0 1 .0 I .201 et seq, and accordingly does
not request preparation of a transcrip.
6. Appellant requests an electronic record containing the documents automatically
included under Idaho Appellate Rule 28 and the following additional documents:
Date Description
7/t612020 Notice of Application Order No.34726
8t6t2020 Comments of Commission Staff
8t1312020 Comments of Coleman Hydroelectri c, LLC
81t312020 Reply Comments of Idaho Power Company
812U2020 Supplemental Comments of Coleman Hydroelectric, LLC and
Declaration and Exhibits of Jordan Whittaker
121t712020 Final OrderNo. 34870
U412020 Petition for Reconsideration of Coleman Hydroelectric. LLC
U412020 Supplemental Declaration of Jordan Whittaker in Support of
Petition for Reconsideration of Coleman Hydroelectric, LLC
l/412020 Declaration and Exhibits of Gregory M. Adams in Support of
Petition for Reconsideration of Coleman Hydroelectric, LLC
2t21202t Reconsideration Order No. 34909
4lsl202r Final Reconsideration Order No. 34991
7. I certiff:
(a) Service on each reporter of whom a transcript has been requested: N/A
(b) Payment to agency for estimated fee for preparation of transcript N/A
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(c) That the estimated fee for preparation of the agency's record of $100.00
has been paid.
(d) That the appellate filing fee of $94.00 has been paid.
(e) That service has been made upon all parties required to be served pursuant
to Idaho Appellate Rule 20 (and the attorney general of Idaho pursuant to
Section 67-1401 (1), Idaho Code).
DATED THIS ofMay,202l
M. Adams (ISB No. 7454)
Peter J. Richardson (ISB No. 3195)
Richardson Adams, PLLC
515 N. 27tr Street
Boise,Idaho 83702
Telephone: [phone]
Fax: [phone]
greg@richardsonadams. com
peter@ichardsonadams. com
Attorneys for Petitioner-Appellant Coleman Hydroelectric, LLC
4
CERTIFICATE OF SERVICE
I HEREBY certit/ that I have on this d%y of May z[zl,served the foregoing
Notice of Appeal of Coleman Hydroelectric,LLC, by First Class US Mail, and email
where listed, to the following:
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, tD 83720-0074
j [e-mail]. gov
John R. Hammond
Deputy Attomey General
Idaho Public Utilities Commission
P.O. Box 83720
Boise,ID 83720-0074
j [e-mail]. gov
Honorable Lawrence Wasden
Idaho Attorney General
700 West Jefferson Street
P.O. Box 83720
Boise,ID 83720-0010
Donovan Walker
Idaho Power Company, Senior Counsel
P.O. Box 70
Boise,ID 83707-0070
dwalker@idahopower. com
[e-mail]
Energy Contracts
Idaho Power Company
P.O. Box 70
Boise,ID 83707-0070
energycontracts@idahopower. com
M. Adams (ISB No. 7454)
By
5
Office ofthe Secretary
Service Date
Apil 5,2021
BEFORE THE' IDAIIO PTIBLIC UTILITIES COMI\ISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPAIIY T'OR
APPROVAL OR REJECTION OF AIY
ENERGY SALES AGREEMENT WITII
COLEMAN I{YDROELECTRIC, LLC FOR
THE SALE AI\[D PURCHASE OF ELECTRIC
ENERGY FROM THE COLEMAN I{YDRO
PROJECT
CASE NO. IPC-E-20-27
ORDER NO. 3499I
The Commission has before it Coleman Hydroelectric, LLC's ("Seller") Petition for
Reconsideration of Commission Order No. 34780 ("Petition"), in which the Commission
conditionally approved Seller's Energy Sales Agreement ("ESA") with Idaho Power Company
("Company"). Having reviewed the record, the Commission denies Seller's Petition.
THE AGREEMENT
On June 25,2A20, the Company applied for approval or rejection of a proposed ESA
with the Seller for energy generated by the Coleman Hydro Project (the "Facility"). Application
at l. The Facility, near Leadore, ldaho, is a qualifring facility (*QF") under the Public Utility
Regulatory Policies Act of 1978 ("PURPA") and has an 800-kW nameplate capacity. Id. In its
opening paragraph, the ESA states the Seller and Company "entered into [the ESA] on this 19ft
day of June 2020.. . .' ESA at l. Thus, the ESA's "Effective Date" was June 19,2020. See ESA
at p. 3, $ l.l I (the ESA's "Effective Date" is "[t]he date stated in the opening paragraph of this
[ESA] representing the date upon which this [ESA] was fully executed by both Parties."); see also
ESA at p. 13, $ 5.1 ("[s]ubject to the provisions of paragraph 5.2 below, this Agreement shall
become effective on the Effective Date").
The ESA is a new QF contract providing the Seller would sell the electric energy
generated by the Facility to the Company at the published, non-levelized, seasonal hydroelectric
avoided cost rates set by Order No. 34350 (this Order is operative for contracts entered into
between June l, 2019 and May 31, 2020), for a 2O-year term. Id. at2 wrd 4.
The Company represented the ESA complies with past Commission orders. Id. at2.
The Company asked the Commission to issue an order approving or rejecting the ESA and, if
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IORDER NO. 34991
approved, declaring all payments for the purchases of energy under the proposed ESA to be
allowed as prudently incurred expenses for ratemaking purposes.t Id. at5.
FINAL ORDER 34870
On December 17,2020, the Commission issued Order No. 34870 approving the ESA
on condition that the Company and Seller update the ESA's published avoided cost rates to include
the new rates from Order No. 34683 that took effect on June 1,2020 instead of the old rates from
Order No. 34350 that expired on May 31,2020, before the ESA took effect.
Each year the Commission updates the published avoided cost rates available to QFs
who wish to enter ESAs with electric utilities. This annual update is effective each year on June
l. On May 29,2020, the Commission issued Order No. 34683, which updated the published
avoided cost rates by setting new rates that took effect on June 1,2020. In the order that the Seller
asks the Commission to reconsider--{rder No. 3487G-the Commission observed that the parties
explicitly agreed to the ESA's "Effective Date" within the terms of their negotiated ESA.
Notwithstanding the Seller's arguments to the contrary, the Commission accepted "the parties'
representations in their contract - that they intended the 'Effective Date' to be when the ESA was
fully executed by both parties on June 19,2020.* Id. Consequently, the Commission found it
reasonable and just to approve published avoided cost rates that took effect on June 1,2020.
The Commission also found that a legally enforceable obligation ("LEO') did not occur
before the old rates from Order No. 34350 expired on June 1,2020:
[T]he panies entered negotiations that, ultimately, resulted in an agreement.
Neither party asserts that the other caused undue delay. [The Federal Energy
Regulatory Commission ("FERC")] LEO standards, prior to the issuance of Order
No. 872 and after it, are intended to prevent intransigence and undue delay by a
utility in negotiating with a QF. None of those circumstances apply here.
Id. The Commission noted if the Company and Seller had intended for the ESA to have a different
effective date, they should have negotiated one. Id. citing A.W. Brown Co., v. Idaho Public
Utilities Commission,l2l Idaho 812, 816-818, 828 P.2d841,845-847 (1992). As a result, and
based on the plain language of the contract, the ESA became effective on June 19, 2020 which
t By the ESA's terms, it shall not become finally effective until the Commission has approved all the terms and
declares that all payments to be made by the Company to Seller will be allowed as prudently incurred expenses for
ratemaking purposes. ESA at p. 30, $ 21.1.
2oRDER NO. 34991
made the Seller eligible for the published avoided cost rates approved by Order No. 34683 (rates
that took effect on June 1,2020). Id.
The Commission also found that the Company's payments for purchases of energy
under the ESA would be prudently incurred expenses for ratemaking purposes. Id.
PETITION FOR RECONSIDERATION
On January 4, 2021, the Seller petitioned the Commission to reconsider Order No.
34870 and issue a new order approving the ESA with the old rates from Order No. 34350 even
though the ESA '\vas not finally executed before June 1, 2020- when the old rates expired. See
Petition at 2. On February 2, 2021, the Commission granted the Seller's Petition, finding it
appropriate to consider the additional issues raised. Order No. 34909 at2. The Commission also
found that the existing record was sufficient to enable it to consider these issues. Id. The Seller's
Petition asserted four grounds for reconsideration, which are set forth below.
At its regularly scheduled Decision Meeting on March 9,2021,the Commission closed
the record in this case.
A. Ground I of the Petition. The Commission's Order unlawfully applied
federal law under PURPA and 18 C.F.R. S 292.304(d)(2)(ii).
The Seller argued it is entitled to the old rates that expired on June 1,2020 because it
had incurred a LEO by committing to sell electricity to the Company before the old rates expired.
Id. at7 . The Seller thus asserted Order No. 34870 violates PURPA, 18 C.F.R. 5 292.304(dx2xii),
and FERC decisions allowing a QF to form a LEO. The LEO entitles the QF to long-term avoided
cost rates in effect when the QF commits to selling power to the utility, even if a confract has not
yet been executed.2 Petition for Reconsideration at 7-71, citing Cedar Creek Wind, LLC, 137
FERC fl 61,005 (2011), Grouse Creek Wind Park, LLC,142 FERC fl 61,187 (2013), Murphy Flat
Power, LLC, l4l FERC fl 61,145 (2012) and Roinbow Ranch Wind, LLC, 139 FERC 1{ 61,077
(2012).
The Seller asserted that the cases cited by the Commission to deny QFs the right to
LEOs based on effective dates contained in the written contracts has been rejected by FERC. /d.
at 8 citing Grouse CreekWind Park, LLC,l42 FERC fl 61,187 (2013); Murphy Flat Power, LLC,
l4l FERC fl 61,145 (2012); Rainbow Ranch Wind, LLC,l39 FERC n61,077 (2012); Cedar Creek
2 'fhe Seller also claimed that in a stipulaGd dismissal of a dispute in federal court the Commission acknowledged that
a LEO may be formed before a contract has been executed. Petition at 9-10.
JoRDER NO. 34991
Wind, LLC, 137 FERC !f 61,006; see olso citing Qualifying Facility Rates and Requirements;
Implementation Issues Under the Public Utility Regulatory Policies Act of 1978, Order No. 872,
172 FERC 1[61,041, at P. 685 (July 16, 202q.3 The Seller further asserted the Commission erred
in finding that a LEO may be used only where a QF proves the utility caused a delay in the
execution of a written agreement. Petition at 9. The Seller argued that FERC rejected this
reasoning. Petition at 9 citing Grouse CreekWind Parh LLC,l42 FERC 'll6l,187 atP.40 (2013).
B. Ground II of the Petition. The Commission's Order fails to properly apply
state law because it ignores past Commission cases.
The Seller argued Order No. 34870 ignores Commission precedent that approved a
QF's right to rates in effect before the effective date of the QF's ESA. Id. at 14-18. The Seller
cited 20 prior orders where the Seller alleges that the Commission approved rates in effect before
the effective date ofthe subsequently executed ESA.
C. Ground III of the Petition. The Commission's Order rests on an erroneous
finding of fact and is not supported by sufficient evidence.
The Seller asserted that the Commission had insuffrcient evidence to find that the Seller
and the Company intended their ESA's effective date to override the Order No. 34350 rates
specified in the ESA. Id. at19-22.
D. Ground IV of the Petition. The Commission's Order results in an
unreasonable and unjust result for the Seller.
Last, the Seller argued Order No. 34870 is unreasonable and unjust because Seller
invested substantial sums expecting it would be paid the old rates through the ESA. Id. at 23-25.
The Seller asserted the equities favor the Commission approving the ESA using the old rates. .Id.
at23. The Seller asserted it would not have committed to such a large investment in the Facility
had it been aware the old rates were unavailable. Id. at23. The Seller also stated it was
unrepresented by counsel when it negotiated and executed the ESA and was unaware that the
Commission would not approve the ESA with the old rates. Id. at24. The Seller also noted that
the ESA was finalized during a global pandemic in the face of various government restrictions on
business activities. 1d.
3FERCamendedlSC.F.R. g292.304byOrder872-A,l73FERClJ6l,l58,85Fed.Reg.86656(December30,
2020), which became effective on February 16,2021.
oRDER NO.34991 4
LEGAL STAIYDARDS
A. Reconsideration
Reconsideration provides an opportunity for a party to bring to the Commission's
attention any question previously determined and thereby affords the Commission an opportunity
to rectiff any mistake or omission. Washington Water Power Co. v. Kootenai Erwironmental
Alliance, 99 ldatro 875, 879, 591 P.zd 122, 126 (1979). The Commission may grcnt
reconsideration by reviewing the existing record, by written briefs, or by evidentiary hearing.
IDAPA 3 I .01 .01.31 1.03. Consistent with the purpose of reconsideration, the Commission's Rules
of Procedure require that petitions for reconsideration "set forth specifically the ground or grounds
why the petitioner contends that the order or any issue decided in the order is unreasonable,
unlawful, eroneous or not in conformity with the law." Rule 331.01, IDAPA 31.01.01.331.01.
Rule 331 further requires that the petitionerprovide a "statement of the nature and quantity of
evidence or argument the petitioner will offer if reconsideration is granted." Id. A petition must
state whether reconsideration should be conducted by "evidentiary hearing, written briefs,
comments,orinterrogatories."IDAPA3l.0l.0l.33l.03. Groundsforreconsiderationorissueson
reconsideration that are not supported by specific explanations may be dismissed. IDAPA
3 r.01.01.332.
B. PT]RPA
The Commission has been granted authority to implement PURPA and is the
appropriate state forum to review contracts between QFs and electric utilities. Idaho Code $ 6l-
502, 6l-503; A.W. Brown v. Idaho Power Co., l2l Idaho 812, 816, 828 P.2d 841, 845 (1992);
Empire Lumber Co. v. Washington Water Power Co., ll4 Idaho 191,755 P.zd 1229 (1987).
Moreover, the Commission has the authority to engage in case-by-case analysis in setting its
standards and requirements for implementation of PURPA. Power Resources Group v. PUC of
Texas, 422 F.3d 231, 237 (5th Cir. 2005) citing Policy Statement Regarding the Commission's
Enftrcement Role Under Section 210 of [PURPAJ,23 FERC']161,304, 1983 WL 39627 (May 31,
1983); Rosebud Enterprises v. Idaho PUC, 128 Idaho 609,917 P.zd 766 (1996). It is up to the
States, not FERC, to determine the specific parameters of individual QF power purchase
agreements, including the date at which a LEO is incurred under state law. Idaho Power Company
v. Idaho Public Utilities Commission, 155 Idaho 780,316 P.3d 1278 quoting Power Resource
Group, 422 F .3d at 238; accord Rosebud, 128 Idaho at 623-24, 917 P .2d at 780-8 I . "FERC has
5ORDER NO. 34991
given each state the authority to decide when a LEO flegally enforceable obligation] arises in that
state." Power Resource Group,422F.3d at239. Similarly, whether the particular facts applicable
to an individual QF necessitate modifications of other terms and conditions of the QF's contract
with the purchasing utility is a matter for the States to determine. West Penn Power Co.,7l FERC
fl 61 153 at 61495 (1995), Accord: Jersey Central Power & Light Co., 73 FERC n 6rc92 at 61297 -
61298 (1995); Metropolitan Edison Co.,72 FERC tl61015 at 61050 (1995). FERC is not a forum
for adjudicating the specific provisions of each QF contract. Id. The exercise of a state
commission's discretion in applying PURPA standards to contracts has long been recognized as
outside the scope of FERC's enforcement authority.a
COMMISSION FIITDINGS AND DECISION ON RECONSIDERATION
Based on a review ofthe record and applicable authorities, the Commission reaffirms
its findings in Order No. 34870 and denies the Seller's Petition as discussed below.
A. Ground I of the Petition. The Commission's Order complies with Idaho case
law and PURPA.
The Seller argued it was entitled to the expired, Order No. 34350 rates, because it had
formed a LEO with the Company before June l, 2020. The Seller cites FERC decisions that it
claims require this Commission to modi$ its final order and approve an ESA with expired
published avoided cost rates.
To begin, the FERC cases cited by the Seller are declaratory orders and do not bind this
Commission. A declaratory order "does no more than announce the [FERC's] interpretation of
the PURPA or one of the agency's implementing regulations." Niagara Mohawk Power Corp., v.
FERC,ll7F.3d 1485, 1488,326U.S.App.D.C. 135, 138 (1997).Itis"ofnolegalmomentunless
and until a district court adopts that interpretation when called upon to enforce the PURPA." 1d.
Furthermore, the ldaho Supreme Court has aflirmed Commission orders that addressed
similar facts and applied the same legal authorities as in Order No. 34870. See A.W. Brown Co.,
v. Idaho Power Co., l2l Idaho 812, 828 P.2d 841 (1992); Rosebud Enterprises, Inc. v. Idaho
a Policy Statement Regarding the Commission's Enforcement Role Under Section 210 of the Public Utility Regulatory
Policies Act of 1978,23 FERC 1[61,304 at61,645 (1983) C'. . .the Commission's role is limited regarding questions
of the proper application of these rules on a case-by-case basis"). See Power Resource Group, Inc. v. Pub. Utils.
Comm'nof Texas,422F.3d231,238 (5th Cir. 2005);Mass. Inst. Tech. v. Mass. Dept. of Pub. Utils.94l F. Supp.233,
236-237 @. Mass. 1996).
oRDER NO .34991 6
Public Utilities Commission,l3l Idaho l, 951 P.2d 521 (1997); Idaho Power Company v. Idaho
Public Utilities Commission,l55ldaho 780,316 P.3d 1278 (2013).
ln A.W. Brown the ldaho Supreme Court reviewed whether the Commission could
require a QF either to have: (l) a signed contract with a utility; or (2) filed a meritorious complaint
alleging that the project was mature, and that the developer had attempted, and failed, to negotiate
a contract with the utility before locking in an avoided cost rate. A.W. Brown Co., l2l Idaho at
815, 828 P.2d at 844. ln that case, A.W. Brown asked the Commission to order the Company to
buy electricity from it at a higher, superseded avoided cost rate. Id. at 814,843 P.2d at 843. The
Commission found that A.W. Brown was not entitled to the higher, superseded rate because A.W.
Brown had not negotiated or contracted with the Company before the April 29, 1985 cutoff date
on which the higher rates were superseded by new ones. Id. The Commission also found that
A.l(. Brown had not filed a meritorious complaint against the Company before the cutoff date. Id.
at 8 15, 843 P.2d at 844. The Idaho Supreme Court affirmed the Commission's decision and ruled
the Commission had the authority to require that, before a rate can be locked in, the developer QF
either must have a signed contract or have filed a meritorious complaint alleging the project was
mature and that the developer had attempted, and failed, to negotiate a contract with the utility.
A.W. Brown, l2l Idaho at 845-847 , 828 P.2d at 826-8 I 8.
ln Rosebud Enterprises, Inc., v. Idaho Public Utilities Commission,l3l Idaho l, 951
P.2d52l (1997), the Idaho Supreme Court aflirmed the holding in A.W. Brown and found the case
followed state and federal law:
ln A.W. Brown Co., this Court ruled that [the Commission] has authority, under
state and federal law, to require that before a developer can lock in a certain rate,
there must be either a signed contract to sell at that rate or a meritorious complaint
alleging that the project is mature and that the developer has attempted and failed
to negotiate a contract with the utility; that is, there would be a contract but for the
conduct of the utility. Rosebud has neither signed a contract nor established that
Idaho Power will not negotiate with it.
Rosebud, 13 I Idaho at 6, 951 P.2d at 526.
Last, in ldoho Power Company v. Idaho Public Utilities Commission,l55ldaho 780,
316 P.3d 1278 (2013), the Court considered whetherthe Commission had properly determined
that two wind farms did not have LEOs to sell their power.s The Court found:
5 By way of background, on December 3, 2010, the Commission declined several electric utilities' joint motion to
immediately reduce the published avoided cost rate eligibility cap for QFs from l0 average megawatts ("aMW') to
ORDER NO. 34991 7
Considering FERC's declared purpose for adopting the concept of a pEOl and the
broad discretion that [the Commission] has in implementing FERC's rules and in
determining the requirements for a pEO], we again affirm [the Commission's]
requirement that a finding of a [LEO] requires a showing that there would have
been a contract but for the actions of the utility.
Id.at787,3l6P.3datl285. TheCourtupheldtheCommission'sfindingsoffactthattheCompany
was not at fault for failing to have a written contract before December 14,2010, the date when the
100-kW eligibility cap took effect. Id. The Court further reasoned that because the parties
voluntarily negotiated their power purchase agreements, which provided that the effective dates
were December 28, 2010, whether there could have been a LEO before entering those agreements
was irrelevant under the rule adopted by the Commission. Id.
The facts ofthe case now before this Commission are strikingly similar. The Company
and Seller have entered into an agreement that declares an effective date for the contract. Neither
party has asserted undue delay in this matter. Order No. 34870 at 7. Therefore, there is no basis
or need to determine whether or when a LEO might have attached because the parties entered into
a written agreement that defines the operative terms.
The Seller also cites the Commission's and the FERC's settlement stipulation in FERC
v. Idaho PUC, Case l:13-cv-0014I-EJL-REB, Doc. No. 49-l (D. Ct. Id., Dec. 24,2013) for the
proposition that the Commission has formally agreed that a LEO may be formed before the
execution of a written agreement. The Seller further argues that FERC Order No. 872 supports its
position that a QF may be entitled to previously effective avoided cost rates before finalizing an
executed written agreement. The Seller's arguments are misplaced. This Commission has always
acknowledged and applied FERC's basis for a LEO. As has been well established, a LEO may be
formed on the filing of a meritorious complaint with the Commission alleging that the project was
mature and that the developer had attempted, and failed, to negotiate a contract due to the actions
of the utility. Because there was no undue delay and, in fact, the parties negotiated terms that
culminated in an agreement, there was no reason to determine a date upon which a LEO would
have attached. Based on the terms of the ESA, the Seller was entitled to a contract with published
avoided cost rates that became effective on June 1,2020.
100 kilowatts ('kW'). See Order No.32131at 5. However, the Commission ordered that the reduced eligibility
cap of 100 kW would take effect on December 14,2010. Id. at 5-6. The wind farms, larger than 100 kW, lacked
signed contracts with the Company and had not filed a meritorious complaint before December 14, 2010. Idaho
P ower C ompany, I 5 5 Idaho at 7 87, 3 I 6 P.3d at 12E5.
ORDERNO.34991 8
Based on the foregoing, we reject Ground I ofthe Seller's Petition. Federal and State
law support the Commission's decision in Order No. 34870 to approve the ESA with new rates
from Order No. 34683 that took effect on June 1,2020.
B. Ground II. Seller's attempts to equate prior 'grandfathering"
treatment by this Commission is not compelling.
The Seller argued that Order No. 34870 ignores Commission precedent where it
allegedly approved a QF's right to rates in effect before the effective date of a written energy sales
agreement under similar circumstances. [n support of this argument, the Seller cites numerous
cases wherein the Commission reviewed contracts between QFs and electric utilities. We find the
Seller' s arguments unpersuasive.
We applaud the Seller's meticulous efforts to enumerate the various "grandfathering"
cases decided by this Commission. However, those cases are clearly distinguishable from the facts
of this case. This case does not present a sudden or unanticipated change or departure from
Commission precedent such that "grandfathering" should even be considered. Quite the opposite.
The change to published avoided cost rates, relevant to this case, occurs each year on June 1. [t is
a well-documented, established annual adjushnent and should have been anticipated by the parties.
SeeOrderNos.32817,33041,33305,33538,33773,34062,34350,and34683. Nordoesthiscase
present a settlement between the parties wherein they agree to a particular rate and demonstrate
that the terms of the settlement are a reasonable compromise of the parties' original positions.
Furthermore, the Commission may depart from prior decisions if the Commission's
new decision is based on substantial and competent evidence in the record, and sufficient findings.
Rosebud Enterprises, Inc. v. Idaho Public Utilities Commission, l2S ldaho 609, 618, 917 P.2d
766,775 (1995) (regulatory bodies are not rigorously bound by the doctrine of stare decisis) citing
Intermountain Gas Co., v. Idaho Public Utilities Comm'n,97ldaho 113, I19, 540 P.2d775,781
(1975). The decision to employ grandfathering criteria is within the Commission's discretion.
Here, substantial and competent evidence demonstrates that the parties intended the effective date
to be when the agreement was fully executed by both parties on June 19,2020 - as plainly stated
in the ESA. Id. T"he only published avoided cost rates in effect then were the new rates from
Order No. 34683 that took effect on June 1,2020.
9oRDER NO. 34991
C. Ground III. The Commission's Order is based on sullicient findings which
are consistent with ldaho case law.
The Seller asserted the Commission lacked sufficient evidence to determine that the
parties intended the ESA's effective date to override the ESA's inclusion of the old rates from
Order No. 34350. This is a unique, if not circular, argument. It also ignores that the Commission
has long recognized a QF can lock in an existing avoided cost rate under PURPA in Idaho either
by: (l) contracting with the utility; or (2) filing a meritorious complaint alleging that a LEO has
arisen and, but for the conduct of the utility, there would be a contract . See A.W. Brown, l2l
Idaho at 816, 828 P.2d at 845. Contracting with the utility necessarily involves an agreement.
There must be a just and reasonable basis for determining the appropriate avoided cost rates in
the agreement. The agreement itself designates when it becomes effective. This ESA became
effective on June 19,2020. To allow a QF to decide which rates it wants despite language in the
ESA to the contrary would be the very definition of arbitrary and capricious, not to mention
contrary to the public interest.
D. Ground IV. The Commission's Order is dictated by ldaho case law.
Seller asserted that the Commission should reconsider Order No. 34870 because it is
an unreasonable and unjust result for the Seller that invested in the Facility expecting to be paid
the old rates from Order No. 34350. Petition at23-24. Further, Seller asserted that the ESA was
being negotiated and finalized during the Covid-I9 Pandemic where government restrictions on
in-person business activities were imposed. See id. at24. Last, Seller claimed to be unrepresented
by counsel while negotiating and executing the ESA and unaware the Commission might not allow
the expired rates from Order No. 34350 to be used. 1d.
As stated previously, the Commission updates its published avoided cost rates each
year on June l. The Seller's ignorance of this Commission's practices and procedures does not
transmogrifu the terms of the ESA as to when the agreement will take effect. Ultimately, the Seller
must be responsible for negotiating and completing the ESA in a manner which ensures that it
secured the terms, conditions, and rates that it desired. Furthermore, we reject the Seller's
argument that the COVID-I9 Pandemic impeded its ability to finalize an agreement. Other than
the unsupported assertion ofan impediment, there is no explanation ofhow this may have impacted
the Seller or hindered negotiations or finalization ofthe ESA.
0RDER NO. 34991 t0
ORDER
IT IS HEREBY ORDERED that, based on the reasoning and explanation as outlined
in the body of this Order, the Seller's Petition for Reconsideration is denied.
THIS IS A FINAL ORDER ON RECONSIDERATION. Any party aggneved by this
Order may appeal to the Supreme Court of Idaho pursuant to the Public Utilities Law and the Idaho
Appellate Rules. See Idaho Code $ 6l-627.
DONE by Order of the Idatro Public Utilities Commission at Boise, Idaho this 5ft day
ofApril 2021.
AUL PRESIDENT
ATTEST:
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ERIC ANDERSON, COMMISSIONER
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Commission Secretary
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oRDERNO.3499t ll