In re Green Mountain Power Corp., s. 17-062 & 17-166

• Decision Date: 07 September 2018
• Docket Number: Nos. 17-062 & 17-166,s. 17-062 & 17-166
• Citation: 198 A.3d 36
• Court: Vermont Supreme Court
• Parties: IN RE Petition of GREEN MOUNTAIN POWER CORPORATION for Approval to Invest in Hydroelectric Generation Facilities Located Outside Vermont (Allco Renewable Energy Limited, Appellant)

198 A.3d 36

IN RE Petition of GREEN MOUNTAIN POWER CORPORATION for Approval to Invest in Hydroelectric Generation Facilities Located Outside Vermont (Allco Renewable Energy Limited, Appellant)

Nos. 17-062 & 17-166

Supreme Court of Vermont.

May Term, 2018

September 7, 2018

Thomas Melone of Allco Renewable Energy Limited, New York, New York, for Appellant.

Owen J. McClain of Sheehey Furlong & Behm P.C., Burlington, for Appellee.

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

EATON, J.

¶ 1. Allco Renewable Energy Limited (Allco) appeals the Vermont Public Utility Commission's (PUC)¹ denial of Allco's motion to intervene as a party in proceedings concerning whether Green Mountain Power Corporation (GMP) could purchase power generation facilities outside of Vermont. Allco argues that it should have been allowed to intervene because it meets the criteria for intervention set out in the PUC's own rules. In particular, Allco argues that it has a substantial interest in the proceedings both as a ratepayer and as a competing supplier of power. Allco also appeals the PUC's eventual decision to allow the purchases. We affirm the PUC's denial of Allco's motion to intervene and accordingly dismiss Allco's second appeal.

I. Facts and Procedural History

¶ 2. In September of 2016, GMP petitioned the PUC for approval to purchase eight hydroelectric power facilities located outside of Vermont. Specifically, it sought a certificate of public good (CPG) under 30 V.S.A. § 248(a)(1)(A)-(B), which provides that utility companies may not "in any way purchase electric capacity or energy from outside the State" or "invest in an electric generation or transmission facility located outside this State unless the Public Utility Commission first finds that the same will promote the general good of the State and issues a certificate to that effect."

¶ 3. In deciding whether to grant a CPG, the PUC is directed by statute to consider various criteria. 30 V.S.A. § 248(b). With respect to the purchase of out-of-state hydroelectric facilities, there are seven relevant factors: (1) whether the purchase is required to meet the need for present and future demand for power service that could not be provided in a more cost-effective manner through conservation programs; (2) whether it will adversely affect system stability and reliability; (3) whether it will result in an economic benefit to the State and its residents; (4) whether it is consistent with the purchaser's own least-cost integrated plan; (5) whether it complies with the electric energy plan created by the Department of Public Service (DPS); (6) whether the facilities will affect any designated outstanding resource waters within Vermont; and (7) whether the facilities can be served by existing or planned transmission facilities.

¶ 4. In proceedings before the PUC, DPS is present as a party to represent the interests of the people of the State. 30 V.S.A. § 2(b). Allco, a developer of solar power generation facilities, sought to intervene as an additional party in the CPG proceedings related to the purchase by GMP.

¶ 5. Intervention in this context is governed by the PUC's own rules, specifically by Rules 2.209(A) ("intervention as of right") and 2.209(B) ("permissive intervention"). While Rule 2.209(A) is "analogous" to Rule 24(a) of the Vermont Rules of Civil Procedure (governing intervention of right in ordinary civil litigation), it is also by design "considerably stricter." Investigation of Appropriate Principles for Governing Affiliate Transactions, No. 5797, 1995 WL 881075 (Vt. Pub. Serv. Bd. May 19, 1995). Rule 2.209(A) sets out a three-pronged test for when an applicant has a right to intervene where, like here, there is an absence of any statutory right to do so:

Upon timely application, a person shall be permitted to intervene ... 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.

Board Rules: Rules of Practice § 2.209, Code of Vt. Rules 30 000 2000, http://www.lexisnexis.com/hottopics/michie/ [hereinafter Rule 2.000].

¶ 6. Rule 2.209(B) gives the PUC additional discretion to permit parties to intervene in proceedings. Rule 2.000 § 2.209(B). Permissive intervention under this rule requires only "a substantial interest which may be affected by the outcome of the proceeding." Id. In addition, in deciding whether to grant permissive intervention the PUC is directed to consider whether there are alternative means for protecting that interest, whether current parties to the proceeding will adequately protect it, and whether intervention would cause undue delay or prejudice to existing parties or the public. Id.

¶ 7. Allco offered two theories under which it had a substantial interest that would be adversely affected if GMP were permitted to purchase the out-of-state power facilities. First, Allco claimed that it would be adversely affected as one of GMP's ratepayers, because of the risk that the out-of-state projects would lead to higher rates in the long run and because the projects would not contribute to the economic development of Vermont. Second, Allco argued that it would suffer economic harm as a competitor of GMP, because the purchase of out-of-state generation capacity would diminish GMP's demand for Allco's in-state generation facilities. Allco did not make an argument related to the second prong of the test in Rule 2.209(A) (exclusive means). With respect to the third prong (no adequate representation), Allco argued that DPS was not qualified to represent its interests at the hearing because there was "at least the potential for a conflict [of] interest."

¶ 8. The PUC's hearing officer denied Allco's motion to intervene, both as of right and on a permissive basis. In his view, Allco lacked a "substantial, particularized interest" in the decision, as required by the first prong of the Rule 2.209(A) test, because its stated interests were not related to the issues to be reviewed at the hearing, that is, those factors listed in 30 V.S.A. § 248(b) as the ones which the PUC must consider in approving the purchase of out-of-state facilities. With respect to the second prong of the Rule 2.209(A) test, he held that Allco could pursue its interests through the State's net-metering program, its standard-offer program, Rule 4.100 (Vermont's implementation of the federal Public Utility Regulatory Policies Act), or bilateral contracts with power companies. With respect to the third prong, the hearing officer found that to the extent that Allco had an interest as a ratepayer, its interest was no different from that of any other ratepayer and could be adequately represented by DPS at a future proceeding that would consider electricity rates. The absence of a substantial interest by Allco in the proceedings was also fatal to its request for permissive intervention.

¶ 9. Allco moved for reconsideration of the denial of its petition to intervene. In its motion Allco made a wide array of arguments, in particular challenging the hearing officer's determination that it had no substantial, particularized interest in the proceeding, and arguing that the officer's decision effectively banned all ratepayers and competitors from intervening as such in proceedings under 30 V.S.A. § 248. The full PUC denied the motion for reconsideration, agreeing on all points with the hearing officer.

¶ 10. After denying Allco's request to intervene, the PUC granted the CPG to GMP for the purchase of the out-of-state facilities. Two cases are now consolidated for our review. The first is Allco's appeal of the PUC's denial of its request to intervene in the CPG proceedings as a party. In the second case, Allco appeals the grant of the CPG itself.

¶ 11. On appeal, Allco again argues that it has a substantial interest as both a ratepayer and a competitor of GMP. It again suggests that the decisions below have effectively banned ratepayers and competitors from ever intervening in any proceeding under 30 V.S.A. § 248. With respect to the second prong of the Rule 2.209(A) test, Allco argues that the CPG proceeding is the exclusive means to protect its interests and that the test itself violates due process and Chapter I, Article 4 of the Vermont Constitution. With the respect to the third prong, Allco argues that DPS will not adequately represent its interests: DPS does not represent the interests of developers of power facilities at all, and its role as default representative of ratepayers should not block participation by ratepayers who wish to appear independently. Additionally, Allco argues that the denial of its right to intervene is contrary to the public interest because it prevents the development of a complete record in the proceeding.

¶ 12. The above relates to Allco's request that it be allowed to intervene as of right under Rule 2.209(A). Although the hearing officer and the PUC both acknowledged Allco's additional request that it should be allowed to intervene at the Board's discretion under Rule 2.209(B), neither gave the request separate and explicit consideration, apparently taking the absence of any substantial interest by Allco to be dispositive. With respect to the final factor to be considered under Rule 2.209(B), the PUC did also find, without any further discussion, that intervention by Allco would cause undue delay and prejudice the existing parties. On appeal, Allco's briefing on the issue of permissive intervention was minimal, and GMP suggests that the issue was in fact waived. While we agree the briefing on this issue was minimal, we will nonetheless consider the issue on the assumption that it was not waived by Allco.

II. Standard of Review

¶ 13. A decision to deny intervention as a matter of right is reviewed de novo. In re GMPSolar-Richmond...