20170201-5295 FERC PDF (Unofficial) 2/1/2017 4:50:31 PM

UNITED STATES OF AMERICA

BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION

Sustainable Power Group, LLC ) Docket Nos. EL17-35-000

sPower Development Company, LLC )
)
sPower Development Company, LLC ) QF17-502-001

MOTION FOR LEAVE TO REPLY AND REPLY OF

XCEL ENERGY SERVICES INC. TO THE ANSWER OF SUSTAINABLE POWER
GROUP, LLC AND SPOWER DEVELOPMENT COMPANY, LLC

Pursuant to Rules 212 and 213 of the Rules of Practice and Procedure of the Federal

Energy Regulatory Commission (FERC or Commission), 18 C.F.R. 385.212, 385.213,

Xcel Energy Services Inc. (XES), on behalf of its utility operating company affiliate Public

Service Company of Colorado (PSCo), hereby moves for leave to reply, and files this Reply, to

the January 30, 2017 Request for Leave to Answer and Answer of Sustainable Power Group,

LLC (sPower) and sPower Development Company, LLC (collectively sPower) (the sPower

Answer). The sPower Answer was filed partially in response to the January 23, 2017 Motion to

Intervene and Protest of XES (XES Protest), which in turn responded to the December 30,

2017 Petition filed by sPower (Petition).

I. MOTION FOR LEAVE TO REPLY

Pursuant to Rules 212 and 213 of the Commissions Rules of Practice and Procedure,

XES moves for leave to answer the sPower Answer. 1 The Commission has permitted answers

that clarify the record, contribute to an understanding of the issues, or assist with the decision-

1
18 C.F.R. 385.212, 385.213 (2016).

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making process. 2 The sPower Answer responds jointly to both the XES Protest and the Colorado

Public Utilities Commission (Colorado Commission or CPUC) answer to the Petition. As

described herein, the sPower Answer does not accurately state the issues in the proceeding and

contains factual inaccuracies. Good cause exists to accept the instant Reply, as it will clarify the

record and aid the Commission in its decision-making process. XES respectfully requests that to

the extent the Commission accepts sPowers Answer, it also accept XESs instant Reply to

complete the record.

II. REPLY TO THE SPOWER ANSWER

sPower argues that, on behalf of PSCo, XES is seeking an exemption from, or

termination of, its obligation to purchase from QFs. 3 XES seeks nothing of the kind. To the

contrary, it is sPower that seeks to sidestep the PURPA implementation process.

As XES noted in its Protest, PSCo in accordance with the Colorado Commissions

integrated resource planning rules (referred to in Colorado as the Electric Resource Plan or

ERP), has in the past routinely acquired purchased power resources, including a substantial

level of renewable resources (both QF and non-QF). Moreover, PSCo is presently engaged in an

ERP proceeding at the Colorado Commission where PSCo has indicated that it has a generation

resource need that it will acquire through a competitive bid. sPower will obtain a right to sell

energy and capacity to PSCo if sPower participates and is selected in Phase II of that ERP, which

will involve an all-source competitive solicitation conducted in accordance with the Colorado

Commissions requirements, including the use of an independent evaluator, and with the

Colorado Commissions oversight. Some or all of sPowers proposed projects may be selected if

2
See, e.g., Pepco Holdings, Inc., 125 FERC 61,130 at P 24 (2008) (accepted answer because it provided
information to assist in the decision-making process).
3
sPower Answer at 2.

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it is determined that sPower offers resources of such cost and quality that it will allow PSCo to

avoid purchasing or building comparable resources. PSCo is not exempted under the Colorado

Commissions ERP rules from buying from QFs. It may also be determined that based on the

types of resources available to meet PSCos needs, sPowers proposed facilities, taking into

account among other things, price, their planned technology and locations in Colorado, as well as

state policy preferences, should or should not be selected to meet PSCos resource needs. There

is no question that the Colorado Commission has the authority to consider such factors under the

Commissions regulations implementing PURPA. 4 sPower simply seeks to halt the Colorado

Commissions integrated resource planning process altogether so that the merits and usefulness

of its capacity to PSCo are not measured in light of supply alternatives to PSCo.

For the reasons stated in XESs Protest, sPower is incorrect in asserting that competitive

bidding processes are inconsistent with PURPA and that Hydrodynamics and Windham Solar

dictate the outcome of this proceeding. 5 In addition, sPowers argument that Southern

California Edison Company is irrelevant because it did not address whether bidding is an

acceptable method of implementing PURPAs must-buy requirement, is wrong. 6 sPower

overlooks the important facts that this case involved a state bidding procedure that required QFs

to compete against each other in order to win the right to sell to the utility, that losing QFs did

not obtain this right, and that the Commissions concern with this process from the perspective of

PURPA was that the bidding was open only to QFs.

4
18 C.F.R. 292.304(e)(1)-(3) (2016); California Public Utilities Commission, 134 FERC 61,044 at PP 32-33
(2011); North Little Rock Cogeneration, L.P., 72 FERC 61,263 (1995).
5
XES Protest at 12-19.
6
sPower Answer at 6.

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Further, sPowers contention that a quadrennial ERP process is not held frequently

enough, which could create practical difficulties for QF developers, 7 is a red herring. The ERP

is currently ongoing and sPower, which seeks to sell to PSCo now, is free to participate in the

ERP now. This situation is in stark contrast to those addressed by the Commission in

Hydrodynamics and Windham Solar where QFs were effectively precluded from ever being able

to be selected in the competitive bidding processes because the processes were rarely

conducted. 8

sPowers Answer also does not accurately state its own earlier position. sPower claims

that it has never alleged that using a competitive solicitation to set an avoided cost rate is

unacceptable or inconsistent with PURPA. 9 In its motion to the Colorado Commission,

however, which sPower included as Attachment 3 to its Petition, sPower requested that, in order

to comply with PURPA, Phase II of the ERP (the competitive solicitation phase) must be

deferred until after PSCo had entered into arrangements to purchase all of the energy and

capacity of sPowers projects at an administratively-set avoided cost. 10 sPower plainly did not

advocate in that motion that the planned ERP competitive bid be used to set avoided cost rates. 11

7
Id. at 3.
8
Hydrodynamics Inc., 146 FERC 61,193 (2014); Windham Solar LLC, 156 FERC 61,042 (2016).
9
sPower Answer at 6.
10
See sPowers Motion for Waiver (attached to the Petition for Enforcement as Attachment 3) at 18 (arguing that the
Colorado Commission must come into compliance with PURPA by, among other things, requiring [PSCo] to
purchase energy and capacity at its avoided costs from QFs prior to the beginning of a competitive solicitation
process in Phase II of this proceeding),
11
Petition, Attachment 3 at 14-15.

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III. CONCLUSION

For the foregoing reasons, XES respectfully requests that if the Commission elects to

accept the unauthorized sPower Answer, XES requests that it also accept the instant Reply as

clarifying misstatements and inaccuracies in the sPower Answer.

Respectfully submitted,

/s/ William M. Dudley

William M. Dudley
Assistant General Counsel - Lead
XCEL ENERGY SERVICES INC.
1800 Larimer Street, 11th Floor
Denver, CO 80202
(303) 294-2842
bill.dudley@xcelenergy.com

Joseph W. Lowell James P. Johnson

Arjun P. Ramadevanahalli
MORGAN, LEWIS & BOCKIUS LLP
1111 Pennsylvania Ave, NW
Washington, DC 20004
(202) 739-3000
joseph.lowell@morganlewis.com
arjun.ramadevanahalli@morganlewis.com
Assistant General Counsel
XCEL ENERGY SERVICES INC.
401 Nicollet Mall, 8th Floor
Minneapolis, MN 55401
(612) 215-4592
james.p.johnson@xcelenergy.com

Counsel for
Xcel Energy Services Inc.

February 1, 2017

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CERTIFICATE OF SERVICE

I hereby certify that I have this day served the foregoing document upon each person

designated on the official service list compiled by the Secretary in this proceeding.

Dated this 1st day of February, 2017.

/s/ Arjun P. Ramadevanahalli

Arjun P. Ramadevanahalli
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Ave., NW
Washington, DC 20004
(202) 739-5913
arjun.ramadevanahalli@morganlewis.com

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Document Content(s)

XES reply to sPower (2-1-2017).PDF....................................1-6