In re Gmpsolar-Richmond, LLC

• Decision Date: 22 November 2017
• Docket Number: Nos. 16–034,16–148,s. 16–034
• Citation: 179 A.3d 1232
• Court: Vermont Supreme Court
• Parties: IN RE PETITION OF GMPSOLAR–RICHMOND, LLC (Allco Renewable Energy Limited, Appellant)

179 A.3d 1232

IN RE PETITION OF GMPSOLAR–RICHMOND, LLC (Allco Renewable Energy Limited, Appellant)

Nos. 16–034

16–148

Supreme Court of Vermont.

October Term, 2016

November 22, 2017

Thomas Melone, New York, New York, for Appellant.

Geoffrey H. Hand and Victoria M. Westgate of Dunkiel Saunders Elliott Raubvogel & Hand, PLLC, Burlington, for Appellee GMPSolar–Richmond, LLC.

Geoffrey Commons, Montpelier, for Appellee Public Service Department.

PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton, JJ.

DOOLEY, J.

¶ 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, 2009 VT 19, ¶ 2, 185 Vt. 296, 969 A.2d 144 (quotation omitted). As explained in more detail below, Allco's position is that the CPG should be denied for noncompliance with these requirements because GMP is a retail electricity utility governed by the federal Public Utilities Regulatory Policies Act (PURPA).

¶ 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 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 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 42 U.S.C. § 1983, which further undermined Allco's argument that it lacked alternative means to protect its stated interests. The hearing officer determined that the Department of Public Service could adequately represent Allco's interest in the potential impact that GMP's project might have on the public good. She thus denied Allco's motion to intervene.

¶ 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.

¶ 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...