Cent. Lincoln People's Util. Dist. v. Or. Dep't of Energy
| Decision Date | 07 October 2020 |
| Docket Number | A165881 |
| Citation | 307 Or.App. 163,478 P.3d 993 |
| Parties | CENTRAL LINCOLN PEOPLE'S UTILITY DISTRICT, a municipal corporation; City of Hermiston, dba Hermiston Energy Services, a municipal corporation; Clatskanie People's Utility District, a municipal corporation; Columbia River People's Utility District, a municipal corporation; Consumers Power, Inc., an Oregon cooperative corporation ; Emerald People's Utility District, a municipal corporation; Eugene Water & Electric Board, a municipal corporation; Northern Wasco People's Utility District, a municipal corporation; Tillamook People's Utility District, a municipal corporation; and Umatilla Electric Cooperative, an Oregon cooperative corporation, Plaintiffs-Respondents, v. OREGON DEPARTMENT OF ENERGY, an agency of the State of Oregon; and Janine Benner, in her official capacity as the Director of the Oregon Department of Energy, Defendants-Appellants. |
| Court | Oregon Court of Appeals |
Michael A. Casper, Assistant Attorney General, argued the cause for appellants. Also on the briefs were Ellen F. Rosenblum, Attorney General, Benjamin Gutman, Solicitor General, and Chris Perdue, Assistant Attorney General.
Brad S. Daniels, Salem, argued the cause for respondents. Also on the brief were Eric J. Kodesch, Samantha K. Sondag, and Stoel Rives LLP.
Before DeHoog, Presiding Judge, and Aoyagi, Judge, and Hadlock, Judge pro tempore.
HADLOCK, J. pro tempore This appeal relates to challenges that petitioners filed in the trial court, pursuant to ORS 183.484, against orders that the director of the Oregon Department of Energy (ODOE) issued in 2016. Each of the challenged orders required one of the petitioners to pay an energy supplier assessment (ESA) to help fund programs of ODOE and the Energy Facility Siting Council (council). On cross-motions for summary judgment, the trial court agreed with petitioners that the ESA is a tax, and the court entered a judgment including a declaration to that effect.
The court also agreed with petitioners that, during the process leading up to the enactment of the 2015 legislation that required issuance of the challenged 2016 ESA orders, ODOE1 had not complied with certain process requirements set out in ORS 469.421 (8)(b). As a remedy for that violation, the court set aside the 2016 ESA orders. The court also awarded petitioners attorney fees pursuant to ORS 183.497(1)(b) based on its determination that ODOE had acted without a reasonable basis in fact or in law. ODOE appeals.
As explained below, we conclude that—even assuming, without deciding, that ODOE did not meet the requirements of ORS 469.421(8)(b) —the trial court erred when it set aside the 2016 ESA orders. We also conclude that the question of whether the ESA is a tax is moot on appeal, and, under the circumstances presented by this case, we decline to exercise any discretion we may have to address that moot point. Finally, we reverse the trial court's award of attorney fees.
For many years, energy resource suppliers in Oregon (including electric and natural-gas utilities) have been subject to annual assessments—the ESAs—that help fund programs and activities of ODOE and the council. See ORS 469.421(8)(c) (describing assessments); ORS 469.421 (8)(i)(A) (defining "energy resource supplier"); see generally ORS 469.421(4) (1983) ().2 Each biennium, the ODOE director must issue orders assessing ESAs to energy resource suppliers after the legislature has approved budgets for ODOE and the council. ORS 469.421(8)(c). The director issues two sets of ESA orders, one for each fiscal year in the biennium. Id . Those orders are final agency orders in other than a contested case, subject to challenge under ORS 183.484. ORS 469.421(8)(k).
According to a joint stipulation of facts submitted in conjunction with the parties’ cross-motions for summary judgment (and consistent with the legislative history we have been provided), "[b]efore and during the 2013 legislative session, legislators, energy resource suppliers, and other stakeholders became concerned about the budgeting process for the ESA, and wanted more transparency and stakeholder involvement in the process." Responsive legislation included the addition of a provision to ORS 469.421(8) requiring the ODOE director—with respect to each future biennium—to project the aggregate amount of ESAs that would be needed in the upcoming biennium and to "convene a public meeting with representatives of energy resource suppliers and other interested parties for the purpose of providing energy resource suppliers with a full accounting of" the "projected revenue needed to fund each [ODOE] program or activity" and the "projected allocation of moneys derived from [the ESAs] to each [ODOE] program or activity." ORS 469.421 (8)(b)(A), (B). The added provision requires the director to make those determinations before ODOE files its agency request budget for the upcoming biennium. ORS 469.421(8)(b).
In 2014, ODOE held four meetings in which it provided certain budget information to interested parties. At one of those meetings, an August 7, 2014, meeting of the Energy Advisory Work Group, ODOE personnel gave an overview of the department's agency request budget for 2015-2017. With respect to the ESA, ODOE projected expenditures of approximately $13.1 million for the 2015-2017 biennium. ODOE showed how those funds would be allocated between budgeting categories like "personal services" and "services and supplies." However, ODOE did not indicate how the ESA funds would be allocated to specific programs, such as "Cool Schools" or "Resource Planning & Economics." Some additional information about the ESA budget was provided at that meeting and the other 2014 meetings, including how ESA funds had been spent on specific ODOE programs during the 2013-2015 biennium. ODOE asserts that the documentation it provided in conjunction with the 2014 meetings provided the "full accounting" that ORS 469.421 (8)(b) required. Petitioners disagree. In their view, because the documentation did not show how ESA funds would be spent during the 2015-2017 biennium, it did not provide the mandatory "full accounting."3
After ODOE submitted its agency request budget, the legislative process resulted in Senate Bill (SB) 5510 (2015), which approved ODOE's budget for the 2015-2017 biennium. That legislation specified the amount of "other funds" available to ODOE, including ESA funds, which a budget note indicated would be limited to $13.1 million—the amount that ODOE had specified in its agency request budget. In compliance with ORS 469.421(8)(c), ODOE subsequently issued the 2016 ESA orders that petitioners have challenged in this judicial review proceeding.4 In aggregate, the 2016 ESA orders issued by ODOE total approximately half of the $13.1 million in ESA funds approved by SB 5510 for the 2015-2017 biennium.
Petitioners challenged the 2016 ESA orders issued to them by jointly filing a petition for judicial review in the trial court pursuant to ORS 183.484, a provision of the Administrative Procedures Act (APA). As pertinent here, petitioners asked the court to set aside the 2016 ESA orders because ODOE had not complied with the "full accounting" requirement of ORS 469.421(8)(b). Petitioners also sought "a declaration that the ESA is a ‘tax’ and accordingly must meet all constitutional requirements in order to be imposed," and they requested attorney fees under ORS 183.497.
The parties filed cross-motions for summary judgment and, in conjunction with those motions, a joint stipulation of facts describing the history of the 2013 amendments to ORS 469.421(8)(b), the information provided at the 2014 meetings described above, and the process by which ODOE's budget was developed for the 2015-2017 biennium. Petitioners’ summary judgment motion provided arguments in favor of the positions asserted in their petition for judicial review. They requested, among other things, that the court enter an order "setting aside the Orders imposing the 2016 ESA and requiring ODOE to refund the ESA amounts" that petitioners had paid. In response, ODOE argued, among other things, that it had complied with the requirements of ORS 469.421(8)(b), that the petitioners were not entitled to have the 2016 ESA orders set aside even if ODOE had not complied with ORS 469.421(8)(b), that the ESA is a fee (not a tax), and that it would not matter if the ESA were a tax because the statute creating the ESA originated as a bill in the House of Representatives—House Bill (HB) 2259 (1981)—and complied with all pertinent constitutional requirements.
After hearing argument, the trial court issued a letter opinion in which it granted petitioners’ summary judgment motion in part and denied ODOE's cross-motion. The court agreed with petitioners that ODOE had not provided a "full accounting" of how ESA funds would be allocated to ODOE programs and activities, as ORS 469.421 (8)(b) requires. The court stated that ODOE's failure to comply with that requirement "deprived the representatives of energy resource suppliers and other interested parties of information the legislature intended them to have so that they could fully and effectively engage in the legislative process." Based on its view that no other remedy "would adequately address ODOE's failure," the court set aside the 2016 ESA orders, as petitioners had requested.
The letter opinion also expressed the trial court's agreement with petitioners that the ESA imposed by ORS 496.421(8) is a tax. In that regard, the court relied heavily on Northwest Natural Gas Co. v. Frank , 293 Or. 374, 381-82, 648 P.2d 1284 (1982), which held that the then-extant version of the ESA imposed a tax that was dedicated at least in part to the...
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