United States District Court, D. Colorado
sPOWER DEVELOPMENT COMPANY, LLC, a Delaware limited liability company, Plaintiff,
v.
COLORADO PUBLIC UTILITIES COMMISSION, an agency of the State of Colorado, JEFFREY P. ACKERMANN, in his official capacity as Commissioner and Chairman of the Colorado Public Utilities Commission, FRANCES A. KONCILJA, in her official capacity as Commission of the Colorado Public Utilities Commission, WENDY M. MOSER, in her official capacity as Commissioner of the Colorado Public Utilities Commission, PUBLIC SERVICE COMPANY OF COLORADO, and BLACK HILLS COLORADO ELECTRIC, INC., Defendants.
ORDER GRANTING DEFENDANTS' JOINT REQUEST FOR
ADMINISTRATIVE CLOSURE
CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE.
This
matter is before the Court on all Defendants' Joint
Motion Requesting Administrative Closure. (Doc. # 86.) For
the following reasons, the Court grants Defendants'
request for administrative closure.
I.
BACKGROUND
The
Court's June 18, 2018 Order (Doc. # 69) recites the
applicable factual and procedural background of this case and
is incorporated herein by reference. Additional factual
background will be reiterated only to the extent necessary to
address the instant motion.
A.
CONTROLLING LAW AND REGULATIONS
In
Section 210 of the Public Utility Regulatory Policies Act of
1978 (“PURPA”), Congress directed the Federal
Energy Regulatory Commission (“FERC”) to
prescribe rules requiring electric utilities to sell
electricity to, and purchase electricity from, qualifying
facilities (“QF”).[1] 16 U.S.C. § 824a-3(a);
F.E.R.C. v. Mississippi, 456 U.S. 742, 751 (1982).
Relevant here is FERC's rule that provides QFs with two
mechanisms to sell their electrical output to a utility: (1)
on an “as available” basis, with the purchasing
utility's avoided costs[2] calculated at the time of
delivery; or (2) pursuant to a contract or “legally
enforceable obligation” for a specified term, with the
purchasing utility's avoided costs calculated at the time
of delivery or at the time the obligation is incurred. 18
C.F.R. § 292.304(d).
PURPA
requires state regulatory agencies to implement FERC's
regulations. 16 U.S.C. § 824a-3(f). Defendant Colorado
Public Utilities Commission (“PUC”), the
state's regulatory agency, instituted “the use of
competitive bidding in an electric utility resource
acquisition process to establish the avoided cost for
capacity purchased from [QFs].” In the Matter of the
Application of Pub. Serv. Co. of Colo. For Approval of Its
2016 Elec. Res. Plan., 16A-0396E, 2016 WL 7430542, at *1 n.4
(Dec. 19, 2016) (collecting PUC decisions). At issue in this
case is Defendant PUC's Rule 3902(c):
A utility shall use a bid or an auction or a combination
procedure to establish its avoided costs for facilities with
a design capacity of greater than 100 KW. The utility is
obligated to purchase capacity or energy from a qualifying
facility only if the qualifying facility is awarded a
contract under the bid or auction or combination procedure.
4 C.C.R. § 723-3:3902(c) (emphasis added); In the Matter
of the Application of Pub. Serv. Co. of Colo. For
Approval of Its 2016 Elec. Res. Plan., 2016 WL 7430542,
at *2.
B.
FACTUAL BACKGROUND
Plaintiff
sPower Development Company, LLC (“sPower”)
develops and builds electric generation facilities powered by
renewable energy sources-including QFs. (Doc. # 62 at 3.)
sPower is a certified “qualifying small power
producer” and currently owns and is developing eleven
QFs in Colorado. (Id.)
In
April and May of 2016, sPower contacted Defendant Public
Service Company of Colorado (“Public Service”), a
public electric utility, “regarding proposed renewable
power generation projects and requested information from
Public Service regarding QF pricing for these
projects.” (Id. at 11.) Public Service
informed sPower of the competitive solicitation process
established by Defendant PUC's Rule 3902(c).
(Id. at 12; Doc. # 46-6 at 8.) sPower then
unsuccessfully attempted to enforce PURPA's must-buy
provision, 16 U.S.C. § 824a-3(a), against Public Service
by citing the provision in a written request to Public
Service for “long-term contracts . . . for the purchase
of energy and capacity from [sPower's] QFs.” (Doc.
# 46-5 at 2.) On August 8, 2016, Public Service informed
sPower that it could not enter into a long-term contract to
purchase energy and capacity from sPower's QFs because
sPower had not engaged any competitive bidding process, as
required by Rule 3902(c). (Doc. # 46-6 at 2.)
sPower
subsequently filed a motion with PUC, requesting that it find
that Rule 3902(c) does not comport with PURPA, that it waive
Rule 3902(c) until it is compliant with PURPA, and that it
“require [Public Service] to purchase [QF] energy and
capacity at Public Service's avoided cost . . . .”
(Doc. # 46-7.) PUC denied sPower's motion on December 14,
2016, stating that the motion was “procedurally
improper and beyond the limited scope of [the]
proceeding.” In the Matter of the Application of
Pub. Serv. Co of Colo. For Approval of its 2016 Elec. Res.
Plan., 2016 WL 7430542, at *3. PUC concluded that the
“[u]se of competitive bidding is an appropriate means
by which [PUC] establishes avoided costs for purchases of
QFs.” Id.
On
December 30, 2016, sPower unsuccessfully petitioned FERC to
initiate “an enforcement action against [PUC] for its
failure to implement PURPA consistent with federal
law.” (Doc. # 46-4.) FERC has not taken any action on
sPower's petition for enforcement because it currently
lacks the quorum necessary to act. (Doc. # 62 at 15.)
Finally,
sPower filed the instant action against PUC and its
commissioners[3]pursuant to Section
210(h)(2)(B)[4] on March 16, 2017. (Doc. # 1.) Defendant
Intervenors Public Service and Black Hills Colorado Electric,
Inc. (“Black Hills”) joined this action shortly
thereafter. (Doc. ## 58-60.)
On July
25, 2018, PUC issued a Notice of Proposed Rulemaking
(“NOPR”), proposing to strike the sentence at
issue in Rule 3902(c)-“[t]he utility is obligated to
purchase capacity or energy from a qualifying facility only
if the qualifying facility is awarded a contract under the
bid or auction or combination process.” 7 C.C.R. §
723-3:3902(c); (Doc. # 74.)
On July
27, 2018, sPower filed an unopposed Motion to Vacate and
reset the scheduling conference in this matter set for August
8, 2018, because the NOPR proceeding “may resolve this
litigation” by striking the very sentence sPower
asserts does not comply with PURPA. (Doc. # 74 at 2.) sPower
requested that the scheduling conference be reset on or after
November 19, 2018, so that “the parties [can] focus on
the NOPR proceeding . . . .” (Doc. # 74-4 at 2.) On
that same day, the Court granted the Motion to Vacate and
converted the scheduling conference into a status conference.
(Doc. # 76.)
sPower
and Defendants met with United States Magistrate Judge Nina
Wang for the status conference on August 8, 2018. (Doc. #
81.) sPower advocated for a scheduling conference in November
on the grounds that by November, the status of Rule 3902(c)
and the status of sPower's applications requesting the
adjudication and enforcement of a legally enforceable
obligation under PURPA would be finalized. This would result
in the parties being able to clarify the current ambiguous
state of this litigation. (Doc. # 86-1 at 4.) sPower also
expressed concern that, although its current issue with Rule
3902(c) could be remedied by striking the sentence in
dispute, the PUC could potentially set up “other
roadblocks” such as “taking any other action
that's contrary to PURPA or FERC's
regulations.” (Id. at 5-6.) Although PUC
maintained that its rules are compliant with PURPA, it
supported the request for a scheduling or status conference
for the same clarification reasons sPower articulated.
(Id. at 4.) After inquiring about the relationship
between the NOPR and the instant case, such as the
possibility that the NOPR would moot sPower's claim,
Magistrate Judge Wang suggested administratively closing this
case and wait to see if any new issues would arise after the
NOPR hearing. (Id. at 7-9.) Magistrate Judge Wang
reasoned that “all we know [right now] is that we
don't know exactly what the [NOPR] decision is going to
be, when it's going to come, and how long it's going
to take [all of the parties] to . . . regroup and figure out
how to go forward unless a certain set of actions
happen.” (Id. at 7.) In order to allow the
parties ample time to confer with each other and their
clients about her suggestion, Magistrate Judge Wang suggested
the parties file a motion to administratively close the case
by August 22, 2018. (Id. at 15.)
On
August 22, 2018, Defendants filed their Joint Motion
Requesting Administrative Closure on the grounds that the
NOPR would directly address sPower's concern with Rule
3902(c) and its compliance with PURPA. (Doc. # 86.) sPower
filed its Response on September 12, 2018, opposing
administrative closure ...