The April 2011 and the July 2011 Petitions

First, we consider the Joint Petitioners' request to modify D.11-07-010 by making the requested deletions. The Joint Petitioners claim that the sections they seek to be deleted address "a single, hypothetical concern - that the dates included in the [April 2011] Petition establish time limits for recovery of certain costs from MDL customers, and therefore there is a potential for future costs to be recovered from MDL customers."⁶ The Joint Petitioners make references to the dates referenced in the April 2011 Petition and cited in D.11-07-010, specifically July 1, 2022 and July 1, 2027. The Joint Petitioners state that "[b]ased presumably on the mere existence of dates in the [April 2011] Petition, D.11-07-010 mistakenly concludes that there is a `possibility that MDL customers would not be responsible for some portion of the costs related to generation resources procured on their behalf.'"⁷ The Joint Petitioners claim that this statement in D.11-07-010 is "factually flawed" based on the inclusion of the dates referenced in the April 2011 Petition: "The [April 2011] Petition includes carefully chosen dates for cost recovery to prevent any cost shifting. Simply stated, the dates included in the [April 2011] Petition correspond to dates in the QF/CHP Settlement and are simply reflective of timelines clearly established in the QF/CHP Settlement"⁸ as adopted in D.10-12-035. The July 2011 Petition also provides explanation of how the dates specified in the April 2011 Petition correspond to the cost-allocation relevant sections of the QF/CHP program adopted in D.10-12-035. The dates correspond to the contract term lengths of seven years for an existing CHP facility and twelve years for a new CHP facility. After this explanation, the Joint Petitioners state "[t]hese specified dates ensure that no cost shifting occurs as a result of the [April 2011] Petition. The concern in D.11-07-010 regarding the potential for time limitations to result in cost shifting is therefore unfounded."

In response to the July 2011 Petition, the Joint Respondents state "[o]ne can only wonder why the Settling Parties argue so strenuously against language in [D.11-07-010] that says they must pay for any cost shifting, if indeed, as they claim, there is no cost shifting to be worried about."⁹ The Joint Respondents also state that "it seems curious that [the Joint Petitioners] could not come to some agreement to avoid this [July 2011] Petition, and to avoid compromising the effectiveness of the CHP Settlement. This inability for them to reach agreement on how to share such costs seems to fly in the face of their contention that there will be no cost shifting at all."¹⁰ In essence, the Joint Respondents state that if the language does not have any impact, then they see no harm in denying the request to delete the language as requested.

The Joint Petitioners, in their reply, counter this by stating "as is evident from [the Joint Respondents'] repeated protests to the QF/CHP Settlement...any lack of clarity in the Commission's decisions will likely result in further arguments and litigation down the road."¹¹ They state "[i]t is entirely likely that in Future Energy Revenue Recovery Account (`ERRA') proceedings, the [Joint Respondents] will argue that cost shifting has occurred, based on their flawed interpretation of D.11-07-010, and will seek to shift certain costs to the Settling Parties. This will result in further time-consuming litigation. The Joint [Petitioners] filed the [July 2011] Petition in order to prevent future litigation regarding alleged cost shifting. As is evident from the procedural history, clarity and finality are critical to prevent future disputes and unnecessary litigation."¹²

In response to the proposed decision, the settling parties assert the following: "In the event that there are unrecovered costs associated with the QF/CHP Program attributable to Municipal Departing Load as a result of the limitation of time periods for cost recovery in the April 2011 Petition, as adopted in D.11-07-010, such costs will not be allocated to DA and CCA customers."¹³

D.11-07-010 states that "unrecovered costs attributable to MDL Customers shall be the responsibility of the Settling Parties."¹⁴ The Settling Parties, as defined above, include: the Investor-Owned Utilities (IOUs), CHP Parties and Consumers Groups. The July 2011 Petition states that "the additions to D.11-07-010 endeavor to impose costs from the QF/CHP Settlement on non-jurisdictional entities, i.e., CHP projects and developers. CHP projects and developers are not lawfully subject to Commission jurisdiction on cost allocation as reflected."¹⁵ In their Response, the Joint Respondents state: "If the settling parties agree among themselves that all of the costs should be paid by the IOUs rather than the CHP projects or developers, they are free to bring that agreement before the Commission for approval."¹⁶ In their reply, the Joint Petitioners state that "this suggestion ignores the delicate balance of benefits and burdens that all of the Settling Parties recognize that the QF/CHP Settlement achieves, which is the same balance that the [July 2011] Petition seeks to preserve."¹⁷

⁶ July 2011 Petition at 4.

⁷ July 2011 Petition at 5.

⁸ Id.

⁹ Response of Joint Respondents at 4.

¹⁰ Id.

¹¹ Reply of Joint Petitioners at 4.

¹² Id.

¹³ Opening Comments of Joint Parties on Proposed Decision and Alternated Proposed Decision at 2-3.

¹⁴ D.11-07-010 at 7.

¹⁵ July 2011 Petition at 7.

¹⁶ Response of Joint Respondents at 5.

¹⁷ Reply of Joint Petitioners at 5.