Great Divide Wind Farm 2 LLC v. Aguilar

• Citation: 414 F.Supp.3d 1369
• Decision Date: 07 November 2019
• Docket Number: No. CIV 19-0099 JB\CG,CIV 19-0099 JB\CG
• Parties: GREAT DIVIDE WIND FARM 2 LLC, a Delaware Corporation, and Great Divide Wind Farm 3 LLC, a Delaware Corporation, Plaintiffs, v. Theresa Becenti AGUILAR, Cynthia Hall, Jefferson Byrd, Valerie Espinoza, and Stephen Fischmann, in their Official Capacities as the Commissioners of the New Mexico Public Regulation Commission, and El Paso Electric Company, Defendants, and Southwestern Public Service Company, Intervenor.
• Court: U.S. District Court — District of New Mexico

414 F.Supp.3d 1369

GREAT DIVIDE WIND FARM 2 LLC, a Delaware Corporation, and Great Divide Wind Farm 3 LLC, a Delaware Corporation, Plaintiffs,

v. Theresa Becenti AGUILAR, Cynthia Hall, Jefferson Byrd, Valerie Espinoza, and Stephen Fischmann, in their Official Capacities as the Commissioners of the New Mexico Public Regulation Commission, and El Paso Electric Company, Defendants,andSouthwestern Public Service Company, Intervenor.

No. CIV 19-0099 JB\CG

United States District Court, D. New Mexico.

Filed November 7, 2019

Jason A. Marks, Jason Marks Law, LLC, Albuquerque, New Mexico and Adam Wenner, Cory Lankford, Jonathon Guy, Orrick, Herrington & Sutcliff, LLP, Washington, D.C., Attorneys for the Plaintiffs.

Judith E. Amer, New Mexico Public Regulation Commission, Santa Fe, New Mexico, Attorney for the Defendants Theresa Becenti Aguilar, Cynthia Hall, Jefferson Byrd, Valerie Espinoza, and Stephen Fischmann.

Ron Moss, Winstead PC, Austin, Texas and Carol A. Clifford, Jerry Todd Wertheim, Jones, Snead, Wertheim & Clifford, P.A., Santa Fe, New Mexico, Attorneys for the Defendant El Paso Electric Company.

Will DuBois, Zoe Elizabeth Lees, Xcel Energy Services, Inc., Austin, Texas, Attorneys for the Intervenor Southwestern Public Service Company.

MEMORANDUM OPINION AND ORDER

James O. Browning, UNITED STATES DISTRICT JUDGE THIS MATTER comes before the Court on Plaintiff's Motion for Summary Judgment and Memorandum in Support of Motion for Summary Judgment, filed June 6, 2019 (Doc. 57)("MSJ"). The primary issue is whether the current commissioners of the New Mexico Public Regulation Commission ("NMPRC"), Defendants Theresa Becenti Aguilar, Jefferson Byrd, Valeria Espinoza, Stephen Fischmann, and Cynthia Hall (collectively, "the Commissioners"), implemented the Public Regulatory Policies Act of 1978, 1 U.S.C. § 824a-3 ("PURPA"), and its Federal Energy Regulatory Commission ("FERC") regulations in a manner that violates PURPA and its FERC regulations by requiring qualifying facilities ("QFs") to be ready to interconnect before they can establish a legally enforceable obligation with a utility. See MSJ at 20. The Court concludes that NMPRC's implementation plan, consisting of rule 570 of the New Mexico Administrative Code ("rule 570") and NMPRC's case-by-case adjudication interpreting rule 570, does not violate PURPA or the FERC's regulations promulgating PURPA, and denies the motion.

FACTUAL BACKGROUND

The Court takes these facts from the parties' undisputed material facts in their summary judgment motion papers. See MSJ; Defendant's Response to Plaintiff's Motion for Summary Judgment, filed August 1, 2019 (Doc. 73)("Commissioners' Response"); Southwestern Public Service Company's Response to Great Divide Wind Farm 2's Motion for Summary Judgment, filed August 1, 2019 (Doc. 71)("SPS' Response");¹ Defendant El Paso Electric Company's Response to Plaintiff's Motion for Summary Judgment, filed August 1, 2019 (Doc. 72)("El Paso Electric's Response"); and Plaintiff's Reply to Defendants' and Intervenors' Oppositions to Plaintiffs' Motion for Summary Judgment, filed August 15, 2019 (Doc. 77)("Great Divide's Reply"). No genuine issue exists as to these facts. The Court provides these facts for background.

Great Divide Wind Farm 2 LLC and Great Divide Wind Farm 3, LLC, (collectively, "Great Divide") have two QFs under the Federal Power Act, as amended by PURPA. MSJ ¶ 1, at 1 (asserting this fact); Commissioners' Response ¶ 1, at 1-2 (asserting this fact). Great Divide states that these QFs ("Projects") will be operational in 2020.² See Commissioners' Response ¶ 2, at 2 (asserting this fact).³ El Paso Electric Company is an investor-owned electric utility. See Commissioners' Response ¶ 4, at 2 (asserting this fact).⁴

The FERC promulgated rules implementing PURPA at 18 C.F.R. § 292. See MSJ ¶ 3, at 1-2 (asserting this fact); Commissioners' Response ¶ 5, at 32 (asserting this fact). The NMPRC implemented regulations in accordance with the FERC's rules regulating PURPA in New Mexico Administrative Code 17.9.570 ("rule 570"). See MSJ ¶ 4, at 2 (asserting this fact); Commissioners' Response ¶ 6, at 2 (asserting this fact). Western Water and Power Production, Limited, LLC ("WWPP") filed a complaint with the NMPRC about an alleged legally enforceable obligation created with the Public Service Company of New Mexico ("PNM").⁵ MSJ ¶ 5, at 2 (citing Western Water Power Prod. Ltd., LLC v. Pub. Serv. Co. of N.M., No. 11-00466-UT, 2016 WL 4160265 (NMPRC Aug. 3, 2016) (" WWPP"))(asserting this fact). In the final order, the NMPRC concluded that rule 570.9 establishes a legally enforceable obligation on a utility "only if the QF is ready to interconnect to the utility's system" to deliver energy.⁶ MSJ ¶ 5, at 2 (asserting this fact). The NMPRC, accordingly, dismissed the complaint.⁷ See MSJ ¶ 5, at 2 (asserting this fact).

On August 27, 2018, Great Divide filed a complaint asking the NMPRC to "declare the terms of a legally enforceable obligation" with El Paso Electric. See Commissioners' Response ¶ 9 at 2 (asserting this fact). The NMPRC dismissed the complaint without prejudice, citing its WWPP decision and rule 570's plain text.⁸ See MSJ ¶¶ 10-11, at 3-4 (asserting this fact). In the dismissal, the NMPRC also cited the FERC's decision not to declare the NMPRC's ruling in WWPP "contrary to PURPA and FERC regulations."⁹ See MSJ ¶ 12, at 4 (asserting this fact). On December 6, 2018, Great Divide petitioned the FERC "to bring an enforcement action against the NMPRC for its failure to implement PURPA consistent with PURPA and FERC's regulations," but the FERC instead issued a Notice of Intent Not to Act¹⁰ and Declaratory Order in that case on February 4, 2019. See MSJ ¶¶ 13-14, at 4 (asserting this fact).¹¹

PROCEDURAL BACKGROUND

Great Divide filed its motion for summary judgment after the Court granted in part and denied in part the Commissioner's motion to dismiss. See MSJ at 5. Great Divide states that the issue in the present case is "whether NMPRC's PURPA implementation plan, specifically Rule 570 and NMPRC's interpretation of that Rule, violates PURPA and FERC's PURPA regulations." MSJ at 15. Great Divide asks the Court to "(i) declare that NMPRC's implementation plan regarding the creation of legally enforceable obligations for QFs is invalid under PURPA and FERC's PURPA regulations, and (ii) enjoin Defendants, in their official capacities as Commissioners of the NMPRC, to adopt an implementation plan consistent with federal law." MSJ at 19-20.

1. The Complaint.

Great Divide filed its Complaint for Declaratory and Injunctive Relief on February 6, 2019 with the FERC's consent to file a claim in federal court. See Complaint for Declaratory and Injunctive Relief, filed February 6, 2019 (Doc. 1)("Complaint"); First MTD at 4 (citing FERC Order ¶ 18, at 7). Great Divide asks the court to

[d]eclar[e] that the NM Order violates PURPA and FERC regulations insofar as it places improper obligations on Plaintiffs before EPE is obligated to enter into a contract or other legally enforceable obligation to purchase the output of [the Projects] for the specified term, and for injunctive relief requiring that the NMPRC issue an order that complies with federal law.

Complaint ¶ a, at 13. Great Divide further asks that the Court enjoin

Defendants to issue a new order implementing FERC's rules under PURPA in a manner consistent with federal law, ruling that Plaintiffs need not construct their Projects and obtain signed interconnection agreements as a prerequisite to the creation of a legally enforceable obligation, and implementing a methodology for determining avoided energy costs calculated at the time the obligation is incurred or offering to resolve disputes between Plaintiffs and EPE regarding the calculation of an avoided cost rate.

Complaint ¶ b, at 13.

2. The Defendants' First MTD.

The Commission filed a Motion to Dismiss on March 1, 2019. See Defendants' Joint Motion to Dismiss and Memorandum of Law in Support Thereof, filed March 1, 2019 (Doc. 22)("First MTD"¹² ). The Commissioners state that PURPA provides plaintiffs with two mechanisms for challenging state regulatory actions: "(i) as-applied challenges that ‘involve[ ] a contention that the agency's implementation plan is unlawful as it applies to or affects an individual petitioner’; and (ii) as-implemented challenges that ‘allege[ ] that the state agency has failed to comply with its obligation under Section 210(f)(2) of PURPA to devise a plan that implements PURPA and FERC's PURPA-related regulations.’ " Great Divide Wind Farm 2 LLC v. Becenti Aguilar, No. CV 19-0099 JB\CG, 405 F.Supp.3d 1071, 1079, 2019 WL 2144829, at 10 (D.N.M. May 16, 2019) (" MOO")(quoting First MTD at 4 (citing 16 U.S.C. § 824a-3(g) - (h) ; Power Res. Grp. v. Pub. Util. Comm'n of Tex, 422 F.3d 231, 233, 235 (5th Cir. 2005) ; Mass. Inst. of Tech. v. Mass. Dep't of Pub. Utils., 941 F. Supp. 233, 237 (D. Mass. 1996) (Lindsay, J.); Greensboro Lumber Co. v. Ga. Power Co., 643 F. Supp. 1345, 1374 (N.D. Ga. 1986) (Moye, J.))). The Commissioners contend that Great Divide brings an as-applied challenge because the relief that Great Divide seeks would benefit only itself. See MTD at 5. The Commissioners argue, therefore, that because Great Divide brings an as-applied challenge, and federal courts have jurisdiction over only as-implemented challenges, the Court does not have jurisdiction over Great Divide's Complaint. See First MTD at 4-5.

3. The First Response.

Great Divide responds. See Plaintiffs' Response in Opposition to Defendants' Joint Motion to Dismiss, filed March 15, 2019 (Doc. 29)("Response"). While Great Divide agrees that PURPA has different routes for as-applied challenges and as-implemented challenges, it contends that its Complaint raises an as-implemented challenge. See Response at 2-3. It states that rule 570 violates PURPA and its FERC regulations with its ready-to-interconnect requirement, and that this rule is the basis of...