Twenty-Four Elec. Utilities, In re
| Citation | 627 A.2d 355,160 Vt. 227 |
| Decision Date | 07 May 1993 |
| Docket Number | No. 92-325,TWENTY-FOUR,92-325 |
| Parties | , Util. L. Rep. P 26,318 In reELECTRIC UTILITIES. |
| Court | Vermont Supreme Court |
John H. Marshall and Holly Ernst Groschner of Downs Rachlin & Martin, St. Johnsbury, for petitioners-appellees.
James A. Dumont and Bonnie Barnes of Sessions Keiner Dumont Barnes & Everitt, P.C., Middlebury, for intervenors-appellants.
Christopher L. Dutton, Burlington, for appellee Green Mountain Power Corp.
Robert V. Simpson, Jr., Sp. Counsel, Montpelier, for appellee Dept. of Public Service.
Before ALLEN, C.J., and GIBSON, DOOLEY and MORSE, JJ., and PECK, J. (Ret.), Specially Assigned.
This is the third appeal involving the contract to import electricity from Hydro-Quebec (HQ), a Canadian producer of electricity. In the first appeal, we affirmed the decision of the Vermont Public Service Board approving the contract with HQ. In re Twenty-Four Vermont Utilities, 159 Vt. 339, ----, 618 A.2d 1295, 1309 (1992) [Hydro-Quebec I]. In the second, we affirmed a Board decision approving a waiver and release that effectively extended the time for HQ to terminate the purchase requirement. In re Twenty-Four Vermont Utilities, 159 Vt. 363, ----, 618 A.2d 1309, 1314 (1992) [Hydro-Quebec II ]. The present appeal concerns the Board's approval of the participation agreement that distributed the shares of the HQ purchase to the participating Vermont utilities. The Board's decision is challenged by the New England Coalition for Energy Efficiency and the Environment (NECEE). We affirm.
In the original proceeding, the Vermont utilities sought approval for both the purchase contract with HQ and for the participation agreement that determined how much electricity each utility would receive. The Board concluded that the requirements for approval specified in 30 V.S.A. § 248 were shown for the state as a whole. See Hydro-Quebec I, 159 Vt. at ----, 618 A.2d at 1307. It also concluded that the showings in support of each utility's share were inadequate, except as to Central Vermont Public Service and Burlington Electric Department. Id. It made the certificate of public good conditional on the approval of the individual allocations to each utility and required filings in support of the allocations within sixty days after its decision. The Board opened this docket, 1 specifying that each utility file a statement of position, including "prefiled testimony and exhibits demonstrating that the preferred allocations promote the general good of Vermont in accordance with ... section 248." It stated further that:
In such proceedings, each participant (except Burlington Electric Department and Central Vermont Public Service Corporation) shall submit additional justification on how their respective allocations of Contract power under the Participation Agreement meet the present and future need for service that could not otherwise be met more cost-effectively through energy conservation, energy efficiency and load management measures. If the Board determines that any such Participant is entitled under the Participation Agreement to power that exceeds such demand for service such Participant shall offer to sell to Hydro-Quebec or other parties an amount of power (and associated energy) equal to such excess.
Pursuant to this order, each utility filed evidence supporting its allocation. The Department of Public Service analyzed this evidence, and in almost all cases supported the proposed allocations.
The Board held three days of evidentiary hearings and on February 12, 1992, approved the allocations for nineteen utilities. 2 2 The allocations for three utilities--Swanton Village, Inc. Electric Department; Village of Jacksonville Electric Company; Town of Readsboro, Electric Light Department--were not approved. 3 Post-judgment motions of NECEE were denied on May 21, 1992, and this appeal followed.
In the original appeal, NECEE first attacked the Board's decision to bifurcate the proceedings, characterizing it as unlawfully segmenting the § 248 approval process and thereby avoiding a utility-by-utility analysis under each of the factors bearing on the public good. That position was largely addressed in Hydro-Quebec I, 159 Vt. at ----, 618 A.2d at 1307. There, we approved the certificate of public good, subject to later approval of the allocations, reasoning that:
The Board determined that the energy supplied in the HQ contract was needed in the state; the only open question was the allocation among the participating utilities. There was no reason to delay the contract with HQ while the allocation was being determined. The Board's power to order reallocation or resale meant that there could be no prejudice to any ratepayer or to the intervenors.
Id. We also noted that the alternative of twenty-four separate proceedings "would be oppressive and could lead to inconsistent results," and the Board had the power to make the proceedings "manageable while protecting fully the rights of the parties." Id.
In its reply brief, NECEE acknowledges that Hydro-Quebec I answered many of the issues raised in this appeal. Certain of its remaining contentions are also foreclosed by Hydro-Quebec I. Specifically, NECEE argues that the Board erred in failing to consider the economic benefits in increased jobs and tax revenues from demand-side management (DSM) investments, as well as the conflict between the HQ purchase and in-state generation sources. These arguments were made in Hydro-Quebec I and rejected. Id. We found no error in the failure to consider the job creation and tax revenue consequences of DSM because there was no conflict between intensified demand-side management (IDSM) and the HQ purchase. Id. We refused to consider conflicts between in-state generation sources and the HQ purchase because NECEE failed to raise the issue before the Board. Id. NECEE cannot raise these issues anew in this follow-up proceeding. 4 See In re Vermont Power Exch., 159 Vt. 168, ----, 617 A.2d 418, 425 (1992).
We also believe that the resolution of Hydro-Quebec I precludes revisiting the Board's treatment of DSM. In this case, NECEE argues that the extent to which DSM will reduce the need for other sources of electricity varies from utility to utility, depending in part on the extent to which the utility has already implemented DSM. It claims that the Board was required to determine the DSM potential of each utility as part of its consideration of the proposed allocation. Instead, based on expert testimony, the Board assumed the average DSM effect. See Hydro-Quebec I, 159 Vt. at ----, 618 A.2d at 1299 (). 5 Because the overall purchase decision was based on IDSM, it was reasonable to base the allocation on the same demand-reduction assumptions. Without applying similar methodology, it is likely that the allocation decision would be inconsistent with the purchase decision.
A part of NECEE's appeal challenges the manner in which the Board conducted the follow-up proceeding, and we agree that this issue is not foreclosed by Hydro-Quebec I. Specifically, NECEE argues that the Board restricted the proceeding to an analysis of utility-by-utility need, and then improperly relied upon nonneed factors when it discovered that some utilities did not need all the electricity allocated to them. NECEE bases this argument on showings by Green Mountain Power Corporation (GMP) and Citizens Utilities Company (Citizens) as to the optimum electricity purchase from HQ.
Most of the utilities showed that their HQ allocations would reduce supply costs in the future and not interfere with the need to pursue IDSM. Most of them did not show, however, whether their allocations were optimum, in the sense that the allocations maximized the cost savings over other available sources of supply. The evidence provided by GMP and Citizens showed that savings for these utilities would be maximized by a smaller allocation than that provided in the participation agreement. For GMP, the Board found that a five megawatt reduction under one of the purchase schedules would optimize savings, but the savings did not "differ significantly" between the allocated amount and the optimum amount. For Citizens, the Board found that a 10% decrease in its allocation would increase savings by 7%. In both cases, the Board approved the allocation in the participation agreement because of uncertainty associated with other sources of supply. For example, the main alternative for GMP, a cogeneration plant, was not permitted at the time of the analysis. NECEE characterizes the consideration of risk as a "non-need" factor, and argues that it was improper for the Board to rely on such factors.
We emphasize that "[i]n a § 248 proceeding, the Board 'is engaged in a legislative, policy-making process.' " Hydro-Quebec I, 159 Vt. at ----, 618 A.2d at 1306 (quoting Auclair v. Vermont Elec. Power Co., 133 Vt. 22, 26, 329 A.2d 641, 644 (1974)). It must use its "particular expertise and informed judgment" to weigh the alternatives presented to it. Id. We give deference to this expertise and informed judgment, and accord a strong presumption of validity to orders of the Board. In re East Georgia Cogeneration Ltd. Partnership, 158 Vt. 525, ----, 614 A.2d 799, 803 (1992).
The essence of the Board's view is contained in its conclusion that " 'optimization' must both be dynamic over time and must recognize that the goal is a 'best fit' rather than unattainably absolute perfection." In view of the broad § 248 criteria involved, see 30 V.S.A. §§ 248(a) (), 248(b)(4) (), allowing an allocation above the optimum was within the Board's discretion. 6 The amounts involved here are relatively small, and the Board could rely on the resale requirement in its initial order. W...
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