In re Petition of GMPSolar-Richmond, LLC (Allco Renewable Energy Limited)
In re Petition of GMPSolar-Richmond, LLC (Allco Renewable Energy Limited)
Opinion
¶ 1. Allco Renewable Energy Ltd. (Allco) appeals from the denial of its motion to intervene, and its renewed motion to intervene, in this certificate-of-public-good (CPG) proceeding for a solar electric generation facility. The applicant, GMPSolar-Richmond, LLC (GMPSR), is an affiliate of Green Mountain Power Corp. (GMP), an electricity utility. The applicant is owned by GMP and an investor. Allco is developing a number of solar electric generation facilities in Vermont. A hearing officer of the Public Service Board (PSB) denied Allco's request for intervention as of right and permissive intervention; the PSB on motion for reconsideration similarly denied the intervention request. Allco argues that the PSB used the wrong framework in reviewing its request and incorrectly applied the intervention criteria. We affirm.
¶ 2. We begin with a brief overview of law that governs a CPG proceeding. Applicant's project requires a CPG prior to "site preparation for or construction" because it will be an "electric generation facility." 30 V.S.A. § 248(a)(2)(A). The CPG is essentially a license to build and operate the facility. Before it can issue a CPG, the Board must find that a list of statutory requirements are met. See
id
. § 248(b). Allco relies on two of these requirements as the bases for its intervention: (1) that the facility "[w]ill result in an economic benefit to the State and its residents,"
id
. § 248(b)(4) ; and (2) because the facility is owned by a company conducting a public service business,
id
. § 201, its construction "is consistent with the principles for resource selection expressed in that company's approved least-cost integrated plan,"
id
. § 248(b)(6). In conducting its analysis under § 248, the Board engages in a "legislative, policy-making process," and "weigh[s] alternatives presented to it, utilizing its particular expertise and informed judgment."
In re UPC Vt. Wind, LLC
,
¶ 3. A brief overview of Allco's PURPA position is also helpful to understand the proceedings below. Allco argues that PURPA requires GMP to buy power for resale produced by Allco's solar facilities-termed "qualifying facilities" or QFs-if the cost of such power is below GMP's "avoided cost," that is, the cost of producing an equivalent amount of the power that it is currently selling to customers. It alleges *1234 that it offered such power to GMP, but GMP illegally declined to purchase it. It further alleges that if GMP purchased Allco's power, GMP's power needs would be met, and it would have no need to build its own facility. GMPSR responds that because of Vermont's unique method of implementing PURPA, GMP had no obligation to purchase power from Allco, and, in any event, Allco's PURPA compliance issue cannot be raised in a CPG proceeding. Again, these positions are explained in greater detail below.
¶ 4. With this framework in mind, we turn to the facts and proceedings in this case. In July 2015, GMPSR sought a CPG under 30 V.S.A. § 248 to install and operate a 2.0 megawatt (MW) solar electric generation facility in Richmond, Vermont. In late September 2015, Allco moved to intervene in opposition to the application under PSB Rule 2.209(A) and (B). That rule provides:
(A) Intervention as of right . Upon timely application, a person shall be permitted to intervene in any proceeding (1) when a statute confers an unconditional right to intervene; (2) when a statute confers a conditional right to intervene and the condition or conditions are satisfied; or (3) when the applicant demonstrates a substantial interest which may be adversely affected by the outcome of the proceeding, where the proceeding affords the exclusive means by which the applicant can protect that interest and where the applicant's interest is not adequately represented by existing parties.
(B) Permissive intervention . Upon timely application, a person may, in the discretion of the Board, be permitted to intervene in any proceeding when the applicant demonstrates a substantial interest which may be affected by the outcome of the proceeding. In exercising its discretion in this paragraph, the Board shall consider (1) whether the applicant's interest will be adequately protected by other parties; (2) whether alternative means exist by which the applicant's interest can be protected; and (3) whether intervention will unduly delay the proceeding or prejudice the interests of existing parties or of the public.
PSB Rule 2.209(A)(3), (B), http://puc.vermont.gov/sites/psbnew/files/doc_library/2200procedures-generally-applicable.pdf [https://perma.cc/HBB2-SVJP]. 1
¶ 5. In support of its intervention request, Allco stated that it had offered to enter into a long-term power-purchase agreement (PPA) with GMP but GMP rejected its offer. It argued that: (1) had GMP accepted its offer, Allco's QFs would have displaced the Project here; (2) the Project, if built, would adversely affect the calculation of GMP's avoided costs and cause Allco and other QFs to earn a lower profit from future energy sales under a future PURPA contract; and (3) the levelized cost of 12.9 cents per kilowatt hour (kWh), the estimated cost of power produced by GMPSR, was by definition GMP's avoided costs, which GMP should have agreed to pay Allco's QFs under PURPA. Allco argued that this CPG proceeding was the exclusive means by which the Board would consider the approval of this Project; its interest was not adequately represented by existing parties; and its participation would not unduly delay the proceedings or cause any prejudice. Allco further argued that its participation would be useful because it would raise federal tax *1235 issues implicated by "a partnership flip transaction when one of the parties is an electric utility that must normalize." GMPSR opposed the petition.
¶ 6. A hearing officer denied Allco's request in October 2015. She found that Allco failed to demonstrate a substantial interest that might be adversely affected by the outcome of this proceeding. This proceeding, she explained, involved the siting review of a solar project under 30 V.S.A. § 248, and § 248 did not contemplate review of avoided-cost calculations or the potential competitive effects of proposed energy generation projects within the state electricity market. Additionally, the hearing officer found that this CPG proceeding was not the exclusive means by which Allco could protect its stated interests. She cited the various avenues available to Allco under Public Service Board Rule 4.104(A)
2
with respect to pursuing PPAs through the designated purchasing agent for Vermont utilities, and under 30 V.S.A. § 208 to the extent Allco suggested that GMP had violated a rule or statute or otherwise infringed on Allco's rights under PURPA. The hearing officer also noted Allco's own suggestion that it might have alternative recourse under
¶ 7. Allco moved for reconsideration, adding several new arguments in support of its intervention request. In addition to the reasons stated above, Allco asserted that no project could promote the general good unless Allco's interpretation of PURPA was followed; it also claimed a substantial interest in pursuing its corporate mission to combat climate change by seeking to enforce rights of QFs.
¶ 8. The PSB upheld the hearing officer's decision in a December 2015 order. The Board agreed that Allco failed to demonstrate a substantial interest that might be adversely affected by the outcome of this proceeding. It found that Allco's arguments revealed a flawed understanding of how PURPA was implemented in Vermont. The Board described the regulatory framework set forth below, and explained that in Vermont, if Allco wanted to sell its QF output under PURPA, it must offer its QF output to Vermont utilities through the designated purchasing agent. It concluded GMP had no contracting obligation under PURPA, although it could voluntarily enter a bilateral contract for power with a QF. As a result, the Board explained, a contract through the purchasing agent was the appropriate means for Allco to pursue its stated interest in selling the output of its QFs in the Vermont market under PURPA.
*1236 ¶ 9. The Board found nothing to show that Allco had pursued a contract through Vermont's PURPA purchasing agent. Indeed, Allco's initial filing suggested that it sought to intervene primarily because it had approached GMP directly for a contract under PURPA and GMP declined to pursue the proposed contract. Where Allco had not exercised its rights under PSB Rule 4.102(A), the Board explained, it could not now claim that the instant proceeding was the sole means by which to protect its interests as an owner and developer of QFs.
¶ 10. The Board further found that GMP's avoided cost was not at issue here because the rates available to QFs in Vermont were based on a statewide composite pricing system determined under Rule 4.100. The statewide composite rates were based on projections of the energy and capacity prices in the wholesale electricity market administered by ISO-New England, a market representing approximately 31,000 GW in capacity. The Board found that the construction of a 2.0 MW solar facility within the broader, regional market would have virtually no effect upon these rate projections.
¶ 11. The Board also rejected Allco's argument that the Department of Public Service could not adequately represent Allco's interests or those of other QFs in Vermont. It explained that the Department did not "represent" the designated purchasing agent under Rule 4.104, as Allco argued. Instead, the Department was tasked with proposing to the PSB the avoided capacity and energy costs of the Vermont composite electric utility system under PURPA. The Board established the rate schedules under Rule 4.100 after reviewing the Department's proposal. Thus, the Board found that the Department was well-positioned to adequately represent the policy interests that Allco sought to advance in this proceeding to the extent that Allco's arguments were relevant to scrutiny of the Project under 30 V.S.A. § 248. The Board further found that Allco's intervention would unduly delay the proceeding and prejudice the Department and GMP because the issues that Allco sought to litigate fell beyond the scope of § 248 review. Allco appealed to this Court from this order in January 2016.
¶ 12. The Board held a technical hearing on the merits of the Project in mid-January 2016. In mid-February 2016, Allco submitted a second motion to intervene. Allco asserted that it was entitled to intervene as of right because it had a substantial interest in not having the rates charged to its QFs and other ratepayers increase if the Project's proposed partnership-flip financing structure did not achieve the favorable federal tax consequences it sought. Allco also claimed a substantial interest in the determination of whether the Project promoted the general good of the state with respect to several specific factors under § 248. It maintained that its request was timely because it was not until it read the transcript from the technical hearing "that the third prong of as-of-right intervention-inadequate representation-was satisfied." GMPSR opposed the motion. In a March 2016 order, the hearing officer denied Allco's second intervention request. She explained that Allco already had been denied intervention and it did not raise any new issues that had not been raised in its prior filings. Allco did not appeal the hearing officer's decision to the Board. 3 Allco appealed the hearing officer's decision to this Court, and Allco's two appeals were consolidated.
*1237
¶ 13. We address several initial matters relating to the scope of the appeal issues before turning to the merits. First, no party challenges Allco's right to appeal from the Board's denial of its first intervention request. We held in
In re Vermont Public Power Supply Authority
that "it is now thoroughly settled that a would-be intervenor may appeal a denial of intervention and the appellate court will reverse if it concludes that he was entitled to intervene of right."
¶ 14. The intervenor prevailed in the case cited above, and we have not explicitly addressed how to dispose of
unsuccessful
intervention appeals. Traditionally, after reviewing and rejecting an intervention appeal on the merits, courts have
dismissed
the appeal for lack of jurisdiction. See 7C C. Wright, A. Miller & M. Kane, Fed. Prac. & Procedure § 1923 (3d ed.). This means that "appealability" turns on the merits of the appeal. The modern trend-and the more simple approach endorsed by Wright and Miller-appears to be simply affirming, rather than dismissing, unsuccessful intervention appeals. See
¶ 15. Second, we do not address any challenges to the merits of the CPG decision. Allco has no right to challenge the final CPG order because it was not a party below. See 30 V.S.A. § 12 ("A
party to a cause
who feels aggrieved by the final order, judgment, or decree of the Board may appeal to the Supreme Court.") (emphasis added); see also
In re Beach Props., Inc.
,
¶ 16. We reject Allco's argument that it has a right to appeal under 30 V.S.A. § 234. Section 234 simply states that "[a] person, partnership, or unincorporated association aggrieved by any act or order of the Public Service Board may transfer such cause to the Supreme Court under the provisions of section 12 of this title." Section 12 provides that only parties may appeal.
¶ 17. Finally, we do not address Allco's arguments regarding the hearing officer's denial of its second motion to intervene. We agree with appellee that Allco's second motion to intervene was procedurally improper. We are not persuaded by any of Allco's arguments to the contrary, which attempt to recharacterize the filing below and rely heavily on out-of-state case law without directly addressing the clear holding of relevant Vermont case law. Having appealed the Board's intervention order to this Court in January 2016, jurisdiction over the intervention issue was transferred from the Board to this Court. See
Kotz v. Kotz
,
¶ 18. Even if the Board had jurisdiction over the second motion to intervene, we would not consider it. Putting aside that Allco never sought Board review of the second decision, the second intervention request, filed more than four months after the intervention deadline set by the hearing officer and a month after the technical hearing in this case, was repetitive and untimely. Notwithstanding
*1239
Allco's claim that it needed to review the Department's actions before it could satisfy the "inadequate representation" requirement, Allco's position continued to essentially rest on the same argument as to how PURPA should be implemented in Vermont. As one court has explained, when a motion to intervene is denied, "the proper procedure is to pursue an immediate appeal, and not to file repetitive motions pestering the [trial] court. This is true regardless of how the motions are labeled where the substance of the motions and purported justification for intervention remain unchanged."
Plain v. Murphy Family Farms
,
¶ 19. We turn now to the merits of the issues that are properly before us: (1) whether Allco established the right to intervene in its first motion under PSB Rule 2.209(A); and (2) whether the PSB erred in denying Allco permissive intervention under Rule 2.209(B). Although we have not clearly explained the standard of review for an appeal of a decision to deny intervention as a matter of right, our decision in
In re Vermont Public Power Supply Authority
,
¶ 20. Rule 2.209(A) contains three circumstances under which intervention is authorized. Because there is no statutory right to intervene, Allco claims a right to intervene only under the third circumstance: "when the applicant demonstrates a substantial interest which may be adversely affected by the outcome of the *1240 proceeding, where the proceeding affords the exclusive means by which the applicant can protect that interest and where the applicant's interest is not adequately represented by existing parties." Rule 2.209(A)(3). This third test has three elements, and Allco must meet all of them to establish a right to intervene.
¶ 21. In ¶ 3 above, we set forth in summary form Allco's argument why it has a "substantial interest which may be adversely affected by the outcome of the [CPG] proceeding." We explain the argument in more detail here. Under the Federal Power Act (FPA), the Federal Energy Regulatory Commission (FERC) has "exclusive authority to regulate sales of electricity at wholesale in interstate commerce."
Allco Finance Ltd. v. Klee
,
¶ 22. Historically, Vermont has implemented PURPA in a "unique way."
In re Vt. Power Exch.
,
¶ 23. "Because no single utility is contracting to purchase power from a qualifying facility, Vermont's PURPA compliance system requires an intermediary to purchase the power, distribute it and pay the producer."
¶ 24. In light of this background, it is clear that Allco's main purpose for intervening in this CPG proceeding is to attack the Rule 4.100 implementation system and, if successful, to prevent GMP, as a competitor, from building its own source of renewable electrical energy. The Board reasoned that Allco met none of the three requirements of Rule 2.209(A)(3) because it had no substantial interest that would be adversely affected by the issuance of the CPG, it had alternative means to protect its interest, and its interest is adequately represented by the Department of Public Service. While we agree with the reasoning of the Board, we rest our decision on the conclusion that Allco had alternative ways to pursue its claim and advance its interests rather than intervening in a CPG proceeding.
¶ 25. The Board identified two alternatives: (1) to negotiate a PURPA contract with the designated purchasing agent under Rule 4.104, or (2) to bring a complaint directly against GMP under 30 V.S.A. § 208 alleging that the utility violated PURPA by not entering into a contact with Allco. Because Allco alleged that GMP violated federal law, the hearing officer concluded that Allco had available a suit directly against GMP under
¶ 26. Much of the Board's analysis also applies to whether permissive intervention should be allowed under Rule 2.209(B).
5
The Board also found that intervention to
*1242
raise the specified arguments "will unduly delay the proceeding or prejudice the interests of existing parties or of the public." We can reverse this decision only if we find that it was made for reasons that are clearly untenable, or there is a clear showing of error, and therefore there was an abuse of discretion.
In re Costco Stormwater Discharge Permit
,
Affirmed .
Effective July 1, 2017, the PSB is now called the Public Utility Commission. We continue to use the former name in this opinion because it was in effect during all proceedings below.
The Board adopted a new rule, effective September 15, 2016, that changes the way in which PURPA is implemented in Vermont. See PSB Rule 4.100, http://puc.vermont.gov/aboutus/statutes-and-rules/current-rules-and-general-orders [https://perma.cc/N4Z6-G4RF]. There is no longer a designated purchasing agent. The rule makes clear, however, that "[f]or contracts and obligations in existence prior to the effective date of this Rule, nothing herein shall cause them to be changed." PSB Rule 4.102(C). Additionally, "[a]ny previous designation of a Purchasing Agent pursuant to prior versions of Rule 4.100, as well as the rules and obligations attendant thereto, shall remain in full force and effect unless and until specifically modified by the Board on a prospective basis with respect to contracts and obligations formed prior to the effective date of this Rule."
Shortly after denying the second intervention motion, the hearing officer issued a decision granting the CPG, and the PSB issued the CPG.
We do not mean to suggest that the remedy for erroneously denying intervention of right or exceeding the bounds of discretion in denying permissive intervention cannot include vacating a decision on the merits. We clarify only that the issues presented on appeal of a denial of a motion to intervene are those directly germane to that motion.
Allco raised another issue that it sought to pursue if permissive intervention were allowed: whether GMPSR would receive the favorable federal income tax treatment on which its expected costs of production were based. It alleged in its motion to intervene that "Allco's participation would be useful for the Board ... to review the tax risks involved in a partnership flip transaction when one of the utilities is an electric utility that must normalize." The Board did not specifically address this issue, and it became a major part of Allco's second motion to intervene with a detailed argument why GMPSR would not receive the favorable tax treatment. As we held above, the second motion was untimely and improper because the appeal of the denial of the first motion was already before this Court. We do not read the first motion as stating the tax issue as a permissive ground for intervention; indeed, Allco dropped it from its motion for reconsideration after the hearing officer denied that motion. Moreover, the tax issue was clearly a side-show in the context of the CPG proceeding because a CPG did not guarantee that GMPSR would be able to charge any particular rate or that GMP could charge ratepayers any particular rate for GMPSR output.
Reference
- Full Case Name
- In RE PETITION OF GMPSOLAR-RICHMOND, LLC (Allco Renewable Energy Limited, Appellant)
- Cited By
- 7 cases
- Status
- Published