20200117Memorandum Decision and Order.pdf

Case 1:18-cv-00236-REB Document 62 Filed O1,lt7l20 Page 1 ol 37
UNITED STATES DISTRICT COURT
DISTRICT OF IDAIIO
FRANKLIN ENERGY STORAGE ONE, LLC,
FRANKLIN ENERGY STORAGE TWO, LLC,
FRANKLIN ENERGY STORAGE THREE
LLC, FRANKLIN ENERGY STORAGE
FOUR, LLC,
Case No.: l: l8-cv-00236-REB
Plaintiffs,
vs.
MEMORANDUM DECISION AND
ORIIER RE: MOTIONS TO DISMISS
AND CROSS-MOTIONS FOR
SUMMARYJUDGMENTPAUL KJELLANDER, KRISTINE RAPER, and
ERIC ANDERSON, in their official capacity as
Commissioners of the IDAHO PUBLIC
UTILITIES COMMISSION,
(DKTS. 24,39, 40, 42)
Defendants,
and,
IDAHO POWERCOMPANY,
Def'endant-lntervenor.
SUMMARY OF DECISION
The Plaintiffs propose to build small power production facilities utilizing batteries to
store power from renewable energy sources and then release such stored power to the power
grid. The Plaintiffs have certified in filings made with the Federal Energy Regulatory
Commission ("FERC") that their facilities are so-called "Qualiffing Facilities," specifically
"energy storage Qualifuing Facilities." Qualifuing Facilities, under provisions of the federal
Public Utility Regulatory Policies Act of 1978 (known as "PURPA"), are entitled to sell power
to an electric utility (here, Defendant-lntervenor Idaho Power Company) and electric utilities are
DECISION REGARDING DISPOSITIVE MOTIONS _ I
Case l-:18-cv-00236-REB Document 62 Filed 0llL7l2o Page 2 ol 37
required to buy such power on contract terms set by the state's public utility commission (here,
the Idaho Public Utilities Commission, or the "IPUC"). Plaintiffs allege that the orders of the
Defendant Commissioners of the IPUC exceeded their jurisdictional authority under PURPA by
acting to classiff PlaintifB' facilities; that is, to decide whether such facilities were Qualiffing
Facilities and in classiffing such facilities differently than the "energy storage Qualifiing
Facilities" classification described in Plaintiffs' FERC filings.
The Court agrees with the Plaintiffs that the IPUC Commissioners exceeded their
jurisdictional authority under PURPA and acted in violation of applicable federal law. The
Court enjoins any attempt by the Commissioners to enforce the Commissioners' orders in which
they acted in excess oftheir jurisdiction and the Court further orders the Commissioners to
comply with the rulings set out in this decision in any future proceedings of the IPUC involving
Plaintiffs' energy storage facilities.
I.reUD
The Court decides here the following:
l. Plaintiffs' Motion for Summary Judgment (Dkt. 24);
2. Defendant-Intervenor Idaho Power's Motion for Summary Judgment (Dkt. 39);
3. Defendant-Intervenor Idaho Power's Motion to Dismiss for Lack of Jurisdiction (Dkt.
40); and
4. Defendants' Motion to Dismiss or in the Altemative Cross-Motion for Summary
Judgment (Dkt. 42).
DECISION REGARDING DISPOSITIVE MOTIONS - 2
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Plaintiffs Franklin Energy Storage One, LLC, Franklin Energy Storage Two, LLC,
Franklin Energy Storage Three, LLC, and Franklin Energy Storage Four, LLC,r bring this civil
action to enforce federal statutes within the Federal Power Act C'FPA) and the Public Utility
Regulatory Policies Act of 1978 C'PURPA") and regulations implementing PURPA promulgated
by the Federal Energy Regulatory Commission ('FERC'). FAC tl 21 (Dkt. 2). Plaintiffs asked
FERC to bring an enforcement action against Defendants and filed this lawsuit after FERC
issued a notice that it would not do so. Id 'lJu l-3, 29 30. Because FERC declined to take up the
matter, Plaintiffs have standing to bring their own enforcement action directly. Id.1fi2,33; 16
u.s.C. $ 82aa-3(hX2XB).
Plaintiffs contend that the Idaho Public Utilities Commission (the *IPUC"), through its
Defendant Commissioners Paul Kjellander, Kristine Raper, and Eric Anderson,2 issued a series
of orders that overreach IPUC's authority under PURPA because the IPUC improperly classified
Plaintiffs' Qualifring Facilities ("QFs") in a manner that can only be done by FERC. FAC fl 6
(Dkt. 2). The dispute between the parties also touches upon long-standing prior orders of the
IPUC which give different treatment to QFs, for purposes of the IPUC's responsibilities under
PURPA, based upon whether their QF classification was that of (l) wind or solar; or (2) "other
QFs." Id. 'lJ 8. Solar and wind QFs are entitled to two-year contracts at negotiated rates, while
I After the motions resolved in this decision became at issue, Plaintiffs filed a "Notice of
Merger and Name Change and Supplemented Corporate Disclosure Statement Supplement"
(Dkt. 6l) indicating that "each of the Plaintiff LLCs were merged into a newly created LLC
known as the Franklin Solar LLC, an Idaho limited liability company." The Notice indicated
that the Plaintiffs' "change in colporate status does not alter any ofthe legal positions or
arguments presented to the court." This decision refers to Plaintiffs as they were constituted
prior to the merger.
2 The decision refers in some instances to the Defendant Commissioners and sometimes
to the "IPUC" for convenience and readability, even though it is only the commissioners ofthe
IPUC, but not the IPUC itselt, who are the Defendants in this action.
DECISION REGARDING DISPOSITIVE MOTIONS _ 3
Case 1:18-cv-00236-REB Document 62 Filed 0LlL7l2O Page 4 of 37
ever,,thing else - the "other QFs" - are entitled to twenty-year confiacts and more favorable
published nonnegotiable rates. Id.
As expressly allowed by PURPA, each Plaintiffpreviously self-certified its proposed
facility as a "small power production facility" by filing FERC Form 556, pursuant to l8 C.F.R.
5 292.207. To qualifu for such status, the entiry was required to certiry on Form 556 that the
proposed facility complied with FERC requirements for size and fuel use. l8 C.F.R. $$ 292.203,
292.204. Each Form 556 filed by Plaintiffs described in paragraph 6a that the primary energy
input is "Renewable resources (specify) - Other ranewable resource" and hrther specified in
paragraph 7h that the project is an "energy storage system" that will "receive 100% of its energy
input from a combination ofrenewable energy sources such as wind, solar, biogas, biomas [sic],
etc." FERC Forms 556 (Dkts. 4-8 through 4- l I ).
Plaintiffs proposed to sell the power output from their facilities to Defendant-Intervenor
Idaho Power under the terms available to "other QFs." FAC 11 9(Dkt.2). In response, Idaho
Power sought a declaratory judgment from the IPUC, asking the IPUC to treat the Plaintiffs'
facilities not as "other QFs" (entitled to twenty-year contracts and more favorable rates) but
instead as solar QFs (entitled only to two-year contracts at less favorable rates). Id. fl 10. The
IPUC agreed and granted Idaho Power's petition. Id.n12. In doing so, Plaintiffs contend, the
Commissioners acted outside of their proper authority.
Consistent with their Form 556 certifications, Plaintiffs describe their projects as energy
storage facilities that store energy power in batteries. Plaintiffs state that stored energy is
provided to the grid at a later time. Solar panels are identified as the initial source ofpower
going i-nto the batteries; however, Plaintiffs contend that the projects are nonetheless properly
classified as energy storage QFs, not as solar QFs . Id. n 9.
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The parties agree that PURPA vests FERC with exclusive authority to decide whether an
entity qualifies for QF status and the nature of such QF status. Plaintiffs contend the IPUC
overstepped its jurisdictional bounds by doing exactly what PURPA reserves to FERC and does
not allow the IPUC to do - i.e., classiffing Plaintiffs' energy storage systens differently (as
"solar QFs") despite Plaintiffs' prior self-certified status as "energy storage QFs." Plaintiffs
contend that their "energy storage QFs" are different than "solar and wind QFs" and thus are
properly characterized exactly as they were self-certified - as energy storage QFs and therefore
as "other QFs" under prior orders of the IPUC. Id nn 7 ,9. Defendants disagree, contending that
the IPUC never actually classificd Plaintiffs'QFs, but instead only compared them to solar
projects in deciding that the power contracts available to Plaintiffs' projects would be the same
as those for solar and wind projects rather than the contracts available to "other QFs" under prior
IPUC orders and practice. Answer fl 9 (Dkt. 4).
Defendants and Defendant-Intervenor separately move to dismiss this case. Defendants
argue alternatively that (l) this Court lacks subject matter jurisdiction; (2) Plaintiffs' First
Amended Complaint lacks facial plausibility; (3) Plaintiffs' claims are time-barred; and (4) the
First Amended Complaint is barred by the Eleventh Amendment. (Dkt. 42.) Defendant-
Intervenor argues alternatively that this Court lacks subject matter jurisdiction and that Plaintiffs
failed to timely exhaust their administrative remedies. (Dkt. 40.)
All parties move for summary judgment. Plaintiffs seek declaratory and injunctive relief
directing Defendants to recognize the QF status of Plaintiffs' projects and requiring Defendant-
Intervenor to tender twenty-year contracts at published rates, consistent with all "other QF '
projects. (Dkt.24.) Defendants'and Defendant-Intervenor's summary judgment motions echo
the arguments presented in their respective motions to dismiss. (Dkts. 39, 42.)
DECISION REGARDING DISPOSITIVE MOTIONS _ 5
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II. LEGALSTANDARDS
A. Standard for Lack of Subject Matter Jurisdiction under F.R.C.P. l2(bxl).
A motion to dismiss under Federal Rule of Civil Procedure l2(bXl) challenges the
Court's subject matter jurisdiction. The party bringing the case in federal court must
demonstrate that jurisdiction is proper in that cowl. See Kok*onen v. Guardian Life Ins. Co. of
Am.,5ll U.S.375,377 (1994). Thus, the plaintiffbears the burden ofproof onaRule 12(b)(1)
motion to dismiss for lack of subject matter jurisdiction. Sopcak v. Northern Mountain
Helicopter Sert,., 52 F.3d 817, 818 (9th Cir. 1995). Ifthere is no subject matter jurisdiction, the
claim must be dismissed. FED. R. CIv. P. l2(hX3).
B. Standard for Failure to State a Claim under F.R.C.P. l2OX6).
A motion to dismiss under Federal Rule of Civil Procedure 12(bX6) is granted if the
complaint fails to allege "enough facts to state a claim to relief that is plausible on its face." Bel/
Atl. Corp. v. Twombly,550 U.S. 544,570 (2007). "A claim has facial plausibility when the
plaintiffpleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged. The plausibility standard is not akin to a
'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted
unlawfully." Ashcroft v. Iqbal,556 U.S. 662,678 (2009). The court "must take all ofthe factual
allegations in the complaint as true," but it is "not bound to accept as true a legal conclusion
couched as a factual allegation." Id. at 6'18; see also Manzarek v. St. Paul Fire & Marine Ins.
Co.,5l9 F.3d 1025, l03l (9th Cir. 2008). Therefore, "conclusory allegations of law and
unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim."
Caviness v. Horizon Comm. Learning Ctr., htc.,590 F.3d 806, 812 (9th Cir. 2010) (citation
omitted).
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C. Summary Judgment Standard.
Summary judgment requires a showing that, as to any claim or defense, "there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law." FBo. R. Crv. P. 56(a). A principal purpose of summary judgment "is to isolate and dispose
of factually unsupported claims . . . ." Celotex Corp. v. Catrett, 477 U .5. 317 , 323 ( 1986). It is
"not a disfavored procedural shortcut"; rather, it is the "principal tool[ ] by which factually
insufficient claims or defenses [can] be isolated and prevented from going to trial with the
attendant unwarranted consumption ofpublic and private resources." Id. at 327. "[T]he mere
existence of some alleged factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment." Anderson v. Liberty Lobbl:, lnc.,477 U.S.
242,247-48 (1986). There must be a genuine dispute as to any material fact - a fact "that may
affect the outcome ofthe case." Id. at248.
The evidence must be viewed in the light most favorable to tle non-moving party, and
the court must not make credibility findings. Seeid.at255. Direct testimony of the non-
movant, however implausible, must be believed. See Leslie v. Grupo ICA,l98 F.3d I152, I159
(9th Cir. I 999). However, the court is not required to adopt unreasonable inferences from
circumstantial evidence. See Mclaughlin v. Liu,849 F.2d 1205, 1208 (9th Cir. 1988).
In deciding cross-motions for summary judgment, the court considers each party's
evidence. See Las Vegas Sands, LLC v. Nehme, 632 F .3d 526,532 (9th Cir. 2011); see also Fair
Hous. Council of Riverside Cnty., Inc. v. Riverside Two,249 F.3d I I 32, I I 34 (9th Cir. 2001 )
("[W]hen simultaneous cross-motions for summary judgment on tlre same claim are before the
court, the court must consider the appropriate evidentiary material identified, and submitted in
support of both motions, and in opposition to both motions, before ruling on each of them.").
DECISION Rf,GARDING DISPOSITIVE MOTIONS _ 7
Case L:LB-cv-00236-REB Document 62 Filed 01lL7l2O Page 8 of 37
The court must independently search the record for thctual disputes. See Fair Hous. Council of
Riverside Cnty., Inc. v. Riverside Two,249 F.3d 1132, I134 (gth Cir.200l). Even though the
filing of cross-motions for summary judgment means that both partics essentially assert that
there are no material factual disputes, the Court nonetheless must decide whether disputes as to
material fact are present. .See ld.
The moving party bears the initial burden of demonstrating the absence of a genuine
dispute as to material fact. See Deverearr v. Abbey,263 F.3d 1070, 1076 (9th Cir. 2001).
Affirmative evidence (such as affidavits or deposition excerpts) is not required to mcet this
burden, as the movant may simply point out the absencc of evidence supporting the non-moving
party's case. See Fairbankv. Ilunderman Cato Johnson,zl2 F.3d 528,532 (9th Cir. 2000).
Doing so shifts the burden to the non-movant to produce evidence sufficient to support a
favorable jury verdict. .See Devereaux,263 F.3dat 1076. The non-movant must go beyond the
pleadings and show "by Ihis] own affidavits, or by the depositions, answers to interrogatories, or
admissions on file" that a genuine dispute of material fact exists. Celotex,4T'l U.S. at324.
Where reasonable minds could differ on the material facts at issue, summary judgment should
not be granted. See Anderson,477 U.S.at25l.
III. ANALYSIS AND DECISION
There is considerable overlap in the motions before the Court and in the written filings of
the parties in support of their own motions and in response to opposing motions. Therefore, the
Court addresses common issues collectively in this decision. and the Court's analysis ofthe law
and the facts (as necessary) is woven throughout. Jurisdictional issues are, appropriately,
considered first.
DECISION REGARDING DISPOSITIVE MOTIONS - 8
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A. The Parties' Stipulation Regarding Facts and Legal Issues.
Early on, the Court suggested that the parties submit their dispute on stipulated facts with
a common agreement on the legal issues to be decided. That goal of titrating the facts and the
legal issues was not entirely successful. However, on October 18,2018, tle parties stipulated to
certain facts and legal issues pertinent to this case. (Dkt. 37.) The stipulated facts are
summarized here:
Each of the Plaintiffs - Fmnklin Energy Storage One, LLC, Franklin Energy Storage
Two, LLC, Franklin Energy Storage Three, LLC and Franklin Energy Storage Four, LLC - is a
battery storage fhcility. The primary energy source of each such facility is solar power. Each
has a nameplate design capacity of32,000 kilowatts, all ofthe facilities are to be located on the
same site, and all are being developed by Altemative Power Development, LLC.
Defendants Paul Kjellander, Kristine Raper, and Eric Anderson are the Comrnissioners of
the IPUC. Defendanllntervenor ldaho Power is an electric utility company. Idaho Power is
regulated by the IPUC and the Public Utility Commission of Oregon, and its operations are
subject to the provisions of PURPA, the federal Public Utility Regulatory Policies Act of 1978.3
In January 2017, Plaintiffs each filed a Form 556 document with the Federal Energy
Regulatory Commission C.FERC'). Form 556 is entitled "Certification of Quali$ing Facility
(QF) Status for a Small Power Production or Cogeneration Facility." In the Form 556, each
Plaintiff self-certified that it was a battery storage Qualifuing Facility. Following that filing,
each Plaintiff submitted to Idaho Power a "Qualifying Facility Energy Sales Agreement
Request" (known as a "Schedule 73"), along with a copy of the Form 556 and an energy
I PURPA encourages the development of altemative energy sources, in part by requiring
that public utilities purchase power from altemative energy sources under conditions prescribed
by PURPA and implemented by FERC and state utility commissions.
DECISION REGARDING DISPOSITIVE MOTIONS _ 9
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generation output profile. In the Schedule 73 application, each Plaintiff requested that ldaho
Power enter into a 2o-year contract to puchase power fiom its QF at published avoided cost
rates - specifically, Rate Option No. 4, Non-Levelized Non-Fueled Rates.
Following Idaho Power's receipt of the Schedule 73 applications and related materials, a
series of letters were exchanged between Michael Darrington, an attomey for Idaho Power, and
Peter Richardson, an attomey fbr Plaintiffs.a The letters addressed Idaho Power's position that
Plaintit'fs' facilities were not entitled to the power purchase contract they sought, and Plaintiffs'
rcsponse to the same. On February 27, 2017, shortly after sending the last of such lefters, Idaho
Power filed a Petition for Declaratory Order with the IPUC pertaining to Plaintiffs' four
Schedule 73 applications. The petition was assigned Case No. IPCE-17-01. OnJuly 13,2017,
the IPUC issued Order No. 33785 in that case, ruling on Idaho Power's Petition for Declaratory
Order. (Dkt. 4-6.) On Augusl3,2017 , Plaintiffs sought reconsideration of that decision, and on
August 29, 2017 , the IPUC issued Order No. 33858 denying Plaintiffs' Motion for
Reconsideration. (Dkt. 4-7.)
After the IPUC orders were issued, Plaintiffs filed a case before FERC. Specifically, on
December 14,2017, Plaintiffs filed a Petition for Declaratory Order and Petition for
Enforcement Pursuant to Section 210(h) ofthe Public Utility Regulatory Policies Act of 19?8
with FERC (assigned Docket No. EL l8-50-000). On February 15, 2018, FERC issued a Notice
of Intent Not to Act. On May 30, 2018, Plaintiffs filed their "Complaint for Violation of the
Federal Power Act, the Public Utilities Regulatory Policies Act of 1978, and Federal Energy
Regulatory Commission Regulations" in this Court (Dkt. l). They amended their Complaint the
a On February 9,201'7,Mt. Danington sent Mr. Richardson a letter discussing Plaintiffs'
four Schedule 73 applications. On February 10,201'7, Mr. Richardson sent Mr. Darrington a
letter in response. On February 27 ,2017 , Mr. Darringlon responded to that letter.
DECISION REGARDING DISPOSITIVE MOTIONS _ IO
Case 1:18-cv-00236-REB Document 62 Filed O1,l17l2O Page 11 of 37
next day to name as Defendants the individual IPUC commissioners in their official capacities
rather than the IPUC itself (Dkt. 2).
The October 18, 2018 stipulation also describes, but does not contain full agreement as
to, five legal issues. Four such issues are raised by the Defendant and Defendants/Intervenors:
(l) whether this Court has subject mafter jurisdiction to decide the case; (2) whether Plaintiffs'
claims are time-barred; (3) whether the IPUC's orders have preclusive effect; and (4) whether the
IPUC, in ruling upon Idaho Power's Petition for Declaratory Order through Order Nos. 33785
and 33858, improperly determined Plaintiffs' QF status, thereby intruding upon FERC's
exclusive jurisdiction in violation of PURPA. Plaintiffs agree that the fourth issue is before the
Court and they add a fifth issue: whether the IPUC and Idaho Power may properly deny 20-year
"other QF ' energy sales and purchase agreement rights to the four Plaintiffs despite their status
as self-certified energy storage QFs, a status which they contend entitles them to power contracts
on the terms available to "other QFs."
Defendants and Idaho Power offer similar arguments, with only a few exceptions, across
their various dispositive motions. Plaintiffs address similar issues in their motion for summary
judgment. Accordingly, for efficiency and clarity (and as discussed supra), this decision
sequentially addresses the parties' arguments on each ofthe legal issues the parties identified,
rather than separately considering each party's individual motions. Ancillary legal issues and
argumenls are addressed passirz.
B. Subject Matter Jurisdiction is Proper in this Court.
Subject matter jurisdiction in this Court tums upon whether Plaintiffs are bringing what is
known as an "implementation" challenge or what is known as an "as-applied" challenge. Defs.'
DECISION REGARDING DISPOSITIVE MOTIONS _ I1
Mem. ISO MTDD(MSJ 12 (Dkt.42-1'); Def.-Intervenor's Mem. ISO MTD l0 (Dkt. 40-l); Plfs.'
Resp. to Def.-Intervenor's MTD 2 (Dkt. 48).
Defendants frame the as-applied claims as "[c]hallenges to a state regulatory
commission's application of its PURPA implementation rules made pursuant to PURPA section
210(g)" to be pursued "through the state appellate processes generally available for review of
that regulatory commission's determinations." Id. at 12. They contend the only venue to
challenge a state's implementation of PURPA is the state's own court system. Id. at l2-13. In
summary, they describe federal courts as having "exclusive jurisdiction over implementation
challenges, while state courts have exclusive jurisdiction over as-applied challenges." Id. at 13
(quoting Exelon llind I, LLC v. Nelson,766 F.3d 380, 388 (5th CL. 2014)).
Defendants assert that Plaintiffs' position is based on the particular circumstances of the
primary generation source and design capacity of their projects, and it is therefore an "as-
applied" challenge. Id. at 13*14. They fu(her contend that FERC's PURPA regulations grant
"absolute discretion" to the IPUC "to determine whether to establish and how to apply standard
rates for QFs with a design capacity of more than 100 kilowatts" as well as discretion to
"differentiate among qualiffing facilities using various technologies on the basis ofthe supply
characteristics ofthe different technologies." Id. at 14 (citing l8 C.F.R. $ 292.304(c)(2) and
quoting l8 C.F.R. $ 292.30a(cX3)(ii)).
Idaho Powerjoins in the argument that this case involves "as-applied" challenges that
must be brought in state court.s Def.-Intervenor's Mem. ISO MTD 10-13 (Dkt. 40-l). Drawing
5 However, Defendants argue that dismissal is warranted under Federal Rule of Civil
Procedure l2(b)(6) for failure to state a claim, while Idaho Power argues that dismissal is
appropriate under Federal Rule of Civil Procedure l2(b)(l) for lack of subject matter
jurisdiction.
DECISION REGARDING DISPOSITIVE MOTIONS - 12
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upon case law, Idaho Power argues that implementation challenges pertain to whether the state
agency has failed to implement a lawful implementation plan under PURPA, while "as-applied"
challenges involve contentions the state agency's implemcntation is unlawful as it applies to or
affects an individual petitioner. Id. at 10. Stated differently, according to ldaho Power, an
implementation challenge addresses an alleged "fail[ure] . . . to devise an implementation plan . .
. that is consistent on its face with FERC's regulations" while an "as-applied" challenge
addresses a state agency's alleged "fail[ure] to adhere to its own implementation plan in its
dealings with a particular qualiffing facility." Id. at ll. Idaho Power says that because Plaintiffs
challenge an order rather than a rule or a promulgated regulation, the challenge is as-applied.
Plaintiffs disagree. There is no comprehensive IPUC "implementation plan," Plaintiffs
contend, because the Commissioners have "never promulgated any rules or regulations
implementing PURPA." Instead, the IPUC has implemented PURPA "on an ad hoc order-by-
order and case-by-case basis." Plfs.' Resp. to Def.-lntervenor's MTD l-2 (Dkt.48). At issue
here, they say, is the creation of a new implementation plan in the form ofthe challenged IPUC
orders [IPUC Order Nos. 33785 and 33858] that supplants what has been done previously. /d. at
2-6. Prior to issuing the two orders implicated in this case, the IPUC's implementation plan
consisted of the creation of two categories, with each different type ofQF (as determined by
FERC) being placed into one of the two categories. The first category consisted of wind and
solar QFs larger than 100 kW. The second category consisted of"all other" QFs (other, that is,
than wind and solar) smaller than 10,000 kW.
Plaintiffs do not challenge that earlier implementation plan. Instead, they "would have
been satisfied had the Idaho Commission merely applied this implementation plan in response to
Idaho Power's Petition for Declaratory Order." Id. at34. Stated simply, they do not assert that
DECISION REGARDING DISPOSITIVE MOTIONS - 13
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the IPUC's application of a prior PURPA implementation plan is flawed; rather, they contend
that the challenged orders implement a new plan that is itself flawed because the IPUC invaded
FERC's sole authoriry to classiff QFs. Plfs.'Reply Mem. to Def.-lntervenor's MSJ 10 (Dkt.
46); Plfs.' Resp. to Def.-Intervenor's MTD 5 (Dkt.48). According to Plaintiffs, Idaho Power
purposefully "sought ,,o, to apply the Idaho Commission's original implementation plan .. . but
to fundamentally change that plan for the purpose of preventing Franklin from securing twenty-
year contracts at published avoided cost rates as would have occurred under the original
implementation plan;' ld. Plaintiffs further contend that if the Commission had applied the pre-
existing implementation plan their projects would have been classified - as they sought - in the
"all other QFs" category because they are like every "other" "other QF" in that they are neither
wind nor solar.6 In other words, they challenge what they describe as the IPUC's creation of a
new implementation plan that "is facially unlawful in that it vests with the IPUC the alleged
authority to make eligibility determinations under PURPA." Id. at 54.
The Court agrees that PURPA creates a framework that tends to filter cases into either
federal court or state court based on the nature ofthe challenge brought, but the IPUC's approach
to implementing PURPA by order rather than by rule erodes the binary simplicity of that
jurisdictional fiame. Hence, the Court is left to analyze what has occurred, from the starting
point ofldaho Power's petition to the issuance ofthe challenged IPUC orders, as the means of
identifuing the salient positions and decisions of the parties, especially when the Commissioners'
orders characterize their actions in a manner that is unmoored fiom the route by which they
6 Significantly, the underlying record as to what power contracts the Franklin facilities
ultimately might receive does not extend beyond the bow ofthe IPUC orders that are at the heart
of this case. The dispute before this Court may be the fulcrum of that question or it may be only
one of multiple parts; the denouement of what such contracts might look like is yet to come.
This Court does not reach that ultimate question.
DECISION REGARDING DISPOSITIVE NTOTIONS - T4
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reached their decisions. By way of example, several portions of IPUC Order No. 33785, Docket
No. 4-6, describe a process and result that can only have been taken and reached by remodeling
the Commission's prior implanentation of PURPA, accomplished by the Commissioners'
decision to classi$ Plaintiffs' facilities. The Order states that Idaho Power's petition seeks
declaratory reliefto "extend the 100 kW published rate eligibility cap to battery storage
projects." Order 4 (Dkt.4-7). Significantly, this "extending" an eligibility cap necessarily
involves changing an implementation plan, because the Commissioners did not "extend"
anything. lnstead, the Commissioners chose to classiff Plaintiffs' battery storage facilities not as
"other facilities," under the then-existing implementation template (because they are battery
storage facilities and not wind or solar facilities), but rather as "solar facilities," so as to make
them into solar facilities for the purpose of placing the 100 kW published rate eligibility cap
upon them.
Moreover, as described in the Order, the IPUC statf had recommended that the
Commission initiate a general investigation into the appropriate contract terms for battery storage
QFs. /d. at 7. Such a recommendation obviously was made for purposes of addressing
implementation issues relating to a particular type of"other QF," as there would be no need for
such an investigation if the QF involved was a wind or solar QF - which the Plaintiffs' QFs were
not. In other words, such an investigation - regardless of whether it was done - is also clearly an
implementation step. This is even more evident from the related recommendation made at the
same time by the IPUC staff, that the Commission "temporarily set a 100 kW threshold for
battery storage facilities to be eligible for published avoided cost rates." 1d at 9. This
recommendation likewise implies that the Commission was revising its prior implementation of
PURPA rather than applying the already existing implementation plan. After all, a
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recommendation that the IPUC "temporarily set" a different threshold for battery storage
facilities makes clear that the IPUC staff recognized the existing implementation plan called for
something different for battery storage QFs.
These "tells" of what is afoot are echoed in the rationale put forward by the
Commissioners to justify their Order. "The Commission has authority under PURPA and
FERC's implementing regulations," said the IPUC, "to set avoided costs, order electric utilities
to enter into fixed+erm obligations for the purchase of energy from QFs, and implement FERC
rules." Id. Although not particularly significant in the context of applying an existing
implementation plan, such language is of central significance in establishing or amending an
implementation plan. Additionally, the Order states that "based on the above findings regarding
the characteristics of battery storage and the compulsory consideration of its underlying primary
energy source, we find a generic investigation unnecessary." Id. at12. This statement
demonstrates IPUC's position that the Order establishes how battery storage facilities are to be
treated going forward - which further shows that the Order implemented PURPA in a manner
adding to or revising a prior implementation plan.7
Two other statements in the Order highlight that it establishes an implementation plan.
The Order states that "... in order to qualify as a PURPA resource, the primary energy source
behind the battery storage must be considered. We must, then, look to [Plaintiffs'] .. . primary
energy sources in order to determine their eligibility under PURPA." Id. at l1 (emphases
added). In the first sentence, the IPUC is implementing PURPA by proclaiming, for the first
7 Ofcourse, the Commissioners' decision that a generic investigation was unnecessary
suggests the Commissioners intended or believed that their Order was not a new implementation
plan. But this Court must independently decide the significance of such Order in the context of
Plaintiffs' claims fbr relief in this case.
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time, how it intends to treat energy storage facilities.s In the second sentence, the IPUC is
applying that new implementation plan to Plaintiffs.
Because challengcs to an implementation plan undcr PURPA are properly heard in
federal court, this Court has subject matter jurisdiction over Plaintiffs' claims.
C. Plaintiffs' Claims Are Timely.
The Commissioners and Idaho Power argue that Plaintiffs' claims are time-barred. Defs.'
Mem. ISO MTD/XMSJ l7-18 (Dkt.42-l); Def.Jntervenor's Mem. ISO MTD l3-15 (Dkt.40-
l). Idaho Power also frames this argument as a failure to exhaust administrative remedies.
Idaho Power points out that neither PURPA nor FERC regulation establishes an
applicable limitations period for a QF to challenge the order of a state utility commission. In
such circumstances, Idaho Power references what it describes as a "well-seftled" rule that "if
Congress fails to include a statute of limitations in a statute, courts should - with few exceptions
- impose a state limitations [period] 'most closely analogous' to the federal act in need." Def.-
Intervenor's Mem. ISO MSJ 9 l2 (Dkt. 39-l) (quoting N.y. State Elec. & Gas Corp. v. Saranac
Power Partners, ZP, I l7 F.Supp.zd 211,246 (N.D.N.Y. 2000)). There is an exception to that
general rule, Idaho Power acknowledges, where applying a state limitations period would
"frustrate or interfere with the implementation of national policies or be at odds with the purpose
or operation of federal substantive law." Id.
From there, both Idaho Power and the Defendants contend that the most closely
analogous limitations period for this case is the 42-day appeal period provided under ldaho state
8 The fact that the sentence stating "the primary energy source behind the battery storage
must be considered" appears after several paragraphs ofanalysis also illustrates that this is a new
implementation plan rather than mere application of a previously-published plan. The details of
the IPUC's analysis on this point are discussed fixlher infra.
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court rules of procedure (ldaho Appellate Rule 14(b)) to appeal an IPUC decision. Defendants
issued their final order denying reconsideration on August 29,2017. The cited rule, ifapplied as
a statute of limitations, would bar Plaintiffs' claims because the $ 210(h) enforcement action was
filed with FERC on December 14,2017 , more than 42 days later.
Plaintiffs respond that the 42-day agency appeal deadline has nothing to do with lhis case
because the Defendants lacked jurisdiction to issue the challenged orders, so no limitation period
ever began to run. Plfs.' Resp. Mem. to Idaho Power's MSJ l0 (Dkt. 47). Moreover, Plaintiffs
argue, even if some limitations period does apply, the 42-day period from Idaho Appellate Rule
14(b) is not the most analogous statute of limitation. Id. at 10-14. First, Plaintiffs contend Idaho
Appellate Rule l4(b) is not a srarule of limitation. Instead, Idaho law contains a catch-all statute
of limitations for all claims not covered by a more specific statute of limitations. That statute -
l.C. S 5-224 - is four years. Further, Plaintiffs point out that an appeal from an adverse agency
decision, as under Idaho Appellate Rule l4(b), "is not the commencement of a civil action that
tolls the statute of limitations." Plfs.' Resp. Mem. to Idaho Power's MSJ l2 (Dkt. 47) (citing
McCoy v. State Dep't of Health & Il'elfare,90'l P.2d 110 (1995),Johnson v. Idaho Cent. Credit
Union,908 P.2d 560 (1995'1, Univ. of Utah Hosp. v. Board of Comm'rs of Ada Cnty.,9l5P.2d
l3 87 ( 1996)). An administrative appeal does not begin a "civil action," Plaintiffs argue, and
therefore the deadline for an appeal cannot be analogous to a statute of limitations.
Finally, Plaintiffs contend that a 42-day deadline is incompatible with PURPA timelines
for FERC review of a petition challenging the actions of a state regulatory authority. When a
party petitions FERC to initiate an enforcement action, FERC has 60 days in which to initiate its
own enforcement action before the petitioner may do so in its own name. Id. al 13;16 U.S.C.
$ 824a-3(h). Idaho Power contends Plaintiffs had 42 days to appeal the IPUC's orders or
DECISION REGARDING DISPOSITIVE MOTIONS - IE
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petition FERC (or both), regardless of when they ultimately filed suit in this court. Further,
Idaho Power argues that the 60-day period for FERC to review a petition is irrelevant because
that period begins after a petitioner has filed a grievance with FERC.e
The Court concludes that the 42-day appeal period is not the most analogous period of
limitations. Of significance, Plaintiffs seek relief wholly distinct lrom state-coud review of the
IPUC's orders. The availability ofa state appellate challenge did not limit them from pursuing
the course which led to this Court. Consistent with their rights, they chose to pursue this case in
federal court, after first petitioning FERC to get involved. That is, the Plaintiffs' federal case is
not targeted at the correctness of the IPUC's orders, if the Commissioners had the authority to
issue the rulings they did. Rather, Plaintiffs challenge whether the Commissioners had the
authority in the tirst instance to issue the orders they did.l0
Further, the gravamen of this case was inchoate until the IPUC issued its orders that are
the subject of Plaintiffs' claims. It was in those orders that the Commissioners took action that
e This decision presumes that Plaintiffs would not be facing Idaho Power's timeliness
challenge ifthey had petitioned FERC within 42 days of IPUC's tinal order denying
reconsideration.
r0 Notably, elsewhere in its legal arguments Idaho Power emphasized the separate nature
ofthe question oftle specific QF status ofPlaintiffs' facilities. In its response to Plaintiffs'
Motion for Summary Judgment, Idaho Power said that it did not dispute Plaintiffs' QF self-
certification and asked the IPUC to assume the validity of the self-certifications, but "without
prejudice to Idaho Power's ability to separately challenge them before FERC, the proper
authority to determine QF status." Def.-Intervenor's Resp. to Plfs.' MSJ l2 (Dkt. 38). Similarly,
the Commissioners said in Order No. 33785 that'the battery storage facilities'QF status is a
mafter within FERC's jurisdiction and is not at issue in this case." There is an obvious
incongruity between those statements and the argument to impose a timeliness deadline upon
Plaintiffs' filing a FERC action drawn from an appeal period applicable to the IPUC decisions.
In other words, if the Commissioners had ruled upon Idaho Power's petition in a manner that
ldaho Power contended was outside of the Commission's PURPA authority, presumably Idaho
Power would be relying upon "its ability to separately challenge ... before FERC, the proper
authority to determine QF status."
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Plaintiffs contend was outside of the Commissioners' authority to acl- i.e., to act in a manner
that served to classift Plaintiffs' QF facilities when that authority belonged solely to FERC. At
that point in time, Plaintiffs had the right to ask FERC to become involved and they exercised
such right. When FERC chose not to become involved, Plaintiffs had the right to bring their own
action to address the issues of federal law created by the IPUC's orders, and they did so. Each of
those steps was taken in a timely manner. The state appellate rule that govems appeals from the
IPUC over matters properly within the Commission's authority is not the most analogous statute
of limitation to this case, even if ldaho Appellate Rule l4b could be considered a statute of
limitation, because this case challenges whether thc Commissioners acted in a way not permitted
by federal law. As to Idaho law, the most closely analogous statute of limitation, and one that
would not "frustrate or interfbre with the implementation of national policies or be at odds with
the purpose or operation of federal substantive law," is the four-year limitations period contained
in the catch-all statute, LC. S 5-224.
Thus, Plaintiffs' instant claims are timely. Moreover, Plaintiffs' claims are not subject to
dismissal for failure to exhaust administrative remedies, as nothing in $ 210(h) of PURPA
requires Plaintiffs to seek relief in state court prior to petitioning FERC to enforce PURPA.
D. Plaintiffs' Claims Are Not an Improper Collateral Attack.
Idaho Power argues that Plaintiffs' claims are an improper collateral attack on final IPUC
orders that have preclusive effect. Def.-Intervenor's Mem. ISO MSJ I l-13 (Dkt. 39-l). Idaho
Power relies upon ldaho Code $ 6l-625, which states that "[a]ll orders and decisions ofthe
commission which have become final and conclusive shall not be attacked collaterally," and on
case law identifoing a public policy interest in finality . Utah-ldaho Sugar Co. y. Intermountain
Gas Co., 597 P.2d 1058 (Idaho 1979). Further, Idaho Power contends that the orders are entitled
DECISION REGARDING DISPOSITIVE MOTIONS _ 20
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to preclusive effect because Plaintiffs had a full and fair opportunity to litigate the issue of the
Commissioners' treatment of their QF status before a final order was issued. Def.-Intervenor's
Mem. ISO MSJ 13 (Dkt. 39-l) (citing Ticor Title Co., v. Stanion, 157 P.3d 613 (ldaho 2007)).
Plaintiffs' response mirrors their argument on the timeliness issue, i.e., because the
Commissioners lacked the authority to enter the orders, collateral estoppel cannot apply.
Relying upon the Restatement (2d) ofConflict ofLaws, $ 97(d), Plaintiffs contend that concepts
ofresjudicata and collateral estoppel are inapplicable when they would "conflict with an
important federal policy." PURPA, Plaintiffs argue, contains exactly such a policy. Moreover,
they argue that a challenge to the subject matter jurisdiction of the court "is never waived and
purported judgments entered by that court, acting without subject matter jurisdiction, are void
and subject to collateral attack." State v. Heyrend,929 P.2d744,747 (Idaho App. 1996).
The Court agrees with Plaintiffs. Plaintiffs' claims directly implicate the division of
responsibilities between FERC, on the one hand, and a state public utility commission, on the
other, as prescribed in PURPA. As such, this lawsuit brought in federal court and seeking a
ruling on an issue of federal law in a process expressly outlined in PURPA is not a collateral
attack on the IPUC's orders. This lawsuit is Plaintiffs' attempt to enforce Defendants'
compliance with PURPA, and Plaintiffs raise a credible claim that the IPUC lacked authority to
issue the challenged orders. For those reasons, there is no improper collateral attack upon the
Commissioners' orders.l I
ll The disconnect between Defendants' statements in the IPUC proceeding and now,
described in fn.9, supra, is equally apparent here.
DECISION REGARDING DISPOSITIVE MOTIONS - 21
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E. Despite their Disavowal of Any Intention to Do So, Defendant Commissioners
Inquired into and Decided Plaintiffs' QF Status, in Violation of PURPA.
a. The parties' positions.
In Order No. 33785, the Defendant Commissioners discussed the basic framework in
which PURPA, FERC, and the IPUC operate before tuming to Idaho Power's request for an
order declaring that battery storage facilities such as Plaintiffs' are subject to the same power
contract treatrnent as wind and solar QFs rather than treatment as all "other QFs." IPUC Order
No.33785 (July 13,2017) (Dkt.4-6). The Commissioners noted that "for purposes of its
Petition, [Idaho Power] did not challenge the QF status" of Plaintiffs' projects. /d at 3.
In their Order, the Commissioners rejected the argument that Idaho Power's petition
should be construed as seeking modification of prior IPUC orders. Id. at 10. They stated that
neither PURPA nor FERC's regulations expressly identifu battery storage as a renewable
resource eligible for QF status and the benefits provided under PURPA. 1d However, the
Commissioners then said that "[t]he battery storage facilities' QF status is a matter within
FERC's jurisdiction and is not at issue in this case." Id. at ll .
For their part, Plaintiffs opposed Idaho Power's petition, asserting there was no legal
controversy because the salient provision of the existing IPUC implementation ofPURPA called
for "access to published avoided cost rates for resources other than wind and solar." Id. at 4
(quoting Plaintiffs' submitted comments and quoting IPUC Order No. 32697). That is,
Plaintiffs' position before the IPUC, which is the same position they argue here, was that their
facilities are not solar QFs. Plaintiffs' facilities are self-certified with FERC as "energy storage
QFs," pursuant to their submission of FERC Form 556 for each facility. FAC lffl 51, 52 (Dkt. 2);
DECISION REGARDING DISPOSITIVE MOTIONS -22
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Defs.'Answer Exhs. 8-l I (Dkts. 4-8 through 4-l l).12 Further, Plainfiffs argue that their QFs
cannot be deemed solar QFs merely because solar energy will be used to energize batteries
which store the power. Among other things, Plaintiffs point out that their facilities can time-shift
power transmission, so that power can be supplied to the grid even when it is dark or cloudy.13
Stated differently, Plaintiffs' projects could vary their power output profiles as compared to those
of solar QFs.
Moreover, Plaintiffs emphasize that the QF certifications filed with FERC set out that
each "energy storage Qualifuing Facility is designed to, and will, receive 1007o of its energy
input from a combination of renewable energy sources such as wind, solar, biogas, biomas [sic],
etc. The current initial design utilizes solar photovoltaic (PV) modules ... to provide the electric
energy input to the Qualifying Facility's battery storage system." FERC Form 556 (Dkts. 4-8
through 4- l 1). Additionally, the certifications required Franklin to "describe the primary energy
input: (check one main category and, ifapplicable, one subcategory;."14 Plaintiffs checked
"Renewable resources (speci!)" as the main category and "Other renewable resource . .." rather
than "Solar - photovoltaic" or "Solar - thermal" as the subcategory. 1d
The heart of Plaintiffs' federal claims is their argument that the IPUC "impermissibly
intnrded into an area exclusively reserved by PURPA to [FERC] by its inquiry into the energy
source(s) proposed to be utilized by" the Franklin QFs. Plfs.' Mem. ISO MSJ 2 (Dkt.29-1).
Under PURPA, a QF is a small power production facility that FERC "delermines, by rule, meets
12 The filings in this matter variously refer to the facilities as "battery storage" or "energy
storage" facilities. Such a distinction is not signiticant for purposes of this decision.
13 The same would be tme, one can presume, when the wind is not blowing, if wind
power were the renewable resource used to energize a battery storage system.
ra Paragraph 6a of the Form 556.
DECISION REGARDING DISPOSITIVE MOTIONS - 23
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such requirements (including requirements respecting fuel use, fuel efficiency, and reliability) as
[FERC] may, by rule, prescribe." l6 U.S.C. $ 796(l7XC). All parties agree that "Plaintiffs' QF
status is a matter cxclusively within FERC's jurisdiction." Stipulated Statement of Facts and
Legal Issues fl Al8 (Dkt. 37). Indeed, "[t]he structure ofPURPA and [FERC's] regulations,
reflect Congress's express intent that [FERC] exercise exclusive authori4r over QF status
determinations." Indep. Energt Producers Ass'n v. Cal. Pub. Utils. Comm'n,36 F.3d 848, 856
(9th Cir. 1994) (emphasis added).
b. The Commissioners' treatment of the Luz c se.
The dispute, then, is whether thc Commissioners' orders included a determination of
Plaintiffs' QF status. If the Commissioners did so, then Plaintiffs are entitled to sunrmary
judgment. If not, Defendants are entitled to summary judgment. Because the parties do not
dispute the material facts and the Court finds no dispute as to the material facts, the question is
appropriately decided on summary judgment.
The answer to the question turns upon an examination into what the Commissioners did
in their orders, as distinct from what they said they were doing (or more precisely here, what
they said they were not doing). Agency staff advised the Commissioners that "it is appropriate
to look to the [Plaintiffs'] QFs' energy sources in determining their eligibility for published
rates" based on FERC's decision in Luz Development and Finance Corporation,5l FERC P
61,078(1990). 1d. The Order characterized the decision in Luz as standing for FERC's rejection
ofan argument that "a battery storage facility independently meets the definition ofa primary
energy source because it generates energy when an electro-chemical reaction discharges the
stored power from the battery." Id. (citing Luz at 6 I , I 69.) The Commissioners then quoted Zrz:
Contrary to Luz's assertion, the primary energy source ofthe battery system is not
the electro-chemical reaction. Rather, it is the electric energy which is utilized to
DECISION REGARDING DISPOSITIVE MOTIONS - 24
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initiate that reaction, for without that energy, the storage facility could not store or
produce the elecfic energy which is to be delivered at some later time. Since this
energy is the primary energy source of the facility, it is necessary to look to the
soutce of this energy as the ultimate primary energy source of the facility.
Id. (quonrg Luz at 61,171).
Applying this reasoning, the Commissioners ruled that "in order to qualiff as a PURPA
resource, the primary energy source behind the battery storage must be considered. We must,
then, look to [Plaintiffs'] . .. primary energy sources in order to determine their eligibility under
PURPA. The primary energy source for [Plaintiffs] ... is solar generation." Id. The Order
rejected Plaintiffs' position that their energy storage facilities are entitled to published rates
rather than negotiated rates. According to the Commissioners, such an argument contradicted
"FERC's pronouncement that energy storage facilities are n,ot per se renewable resources/small
power production facilities under PURPA." Id. at 12.
The Commissioners granted Idaho Power's petition for a declaratory ruling and ordered
that Plaintiffs were not entitled to access "published avoided cost rates for resources other than
wind and solar" but rather were subject to negotiated rates as a "wind or solar" QF because the
projects utilize "solar as their primary energy source." Id. at 12-13. In a subsequent order, the
Commissioners framed Plaintiffs' argument as contending that "while the Commission conceded
that battery storage facilities' qualifuing facility (QF) status is a mafter within .. . FERC's .. .
jurisdiction," the Commission "nevertheless determined that'energy storage QF facilities that
use solar power as a primary energy input are, in fact, [s]olar QFs and not energy storage QFs,'
[thus] intruding on FERC's jurisdiction." IPUC Order No. 33858 at I 2 (Aug. 29,2017) (Dkt.
4-7).
The IPUC denied the petition for reconsideration on August 29,2017 in Ordet No. 33858
(Dkt. 4-7), and in doing so acknowledged Idaho Power's support for the initial order and Idaho
DECISION REGARDING DISPOSITIVE MOTIONS - 25
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Power's argument that PlaintifTs' petition for reconsideration should be denied. The
Commissioners reiterated their position that the prior order did not decide the "QF status of
battery storage facilities." Id at 3. Rather, the IPUC said it had "looked to the primary energy
source of Franklin's battery storage QFs to determine the projects' eligibility to particular
avoided cost rates and contract terms." ,Id.
c. The Court's anilysis oftheZaz case.
Plaintiffs contend that the Commissioners misread (and therefore misapplied) FERC's
Zuz decision. The Court agrees.
In Zrrz, FERC was considering an application for QF certification as a facility consisting
primarily of an electro-chemical battery. Luz would be "purchasing electric energy from the
local grid during off-peak period, storing that energy and making it available for distribution
during peak periods." Zze,5l FERC P 61,078,61,168 (1990). FERC hadto decide whether
Luz's facility qualified for certification as a QF when more than 25yo of the total energy input to
the facility resulted from direct fossil fuel firing, based on the characteristics ofthe local grid
from which the energy would be purchased. If FERC included fossil fuel energy generation at
other facilities that supplied power to the local grid in calculating Luz's total energy input, Luz
could not qualifo for certification. To avoid this, Luz described the "primary energy source of
the facility" as the "electro-chemical reaction giving rise to the discharge ofelectric energy by
the battery." 1d. That is, Luz asked FERC to disregard, for purposes of QF certification, the fact
that the energy received by the facility from the local grid (and then stored) was generated by
fossil fuel firing.
Thus, the question facing FERC in Luz was how PURPA's fuel use requirements applied
to a battery storage facility's application for QF certification. Luz argued that "the time shifting
DECISION REGARDING DISPOSITIVE MOTIONS _ 26
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function, as a clearly articulated objective at the time PURPA was enacted, can only make sense
and be implemented if energy storage facilities like the proposed battery system are allowed to
operate as QFs and to use electric energy without an inquiry as to the source of energy used to
generate that electricity." Id. at 6l,l'70. Luz also "appear[ed] to argue that ... energy storage
facilities are renewable resource (small power production) facllities per se, thus ruling out the
need to inquire into their primary energy source." Id. at 61,171.
FERC denied Luz's certification application. It held that "energy storage facilities are
subject to the same fuel use limitations as all other small power production facilities." Id. at
6l ,170. Even though there was no specific reference to energy storage systems in the applicable
statutes and rules, FERC ruled that such systems cannot "be singled out for any different sort of
treatment with respect to their primary energy source." Id. at 61,171. Significantly, however,
FERC summarized its ruling in this manner:
ln sldlm, energt storage JAcihties such as the proposed Luz baltery system are a
renewable resource for purposes of QF certiJication. However, such facilities are subject
to the requirement that the energy input to the facility is itself biomass, waste, a
renewable resource, a geothermal resource, or any combination thereof or a
demonstration that any fossil fuel-fired input constitutes no more than 25 percent ofthe
total energy input to the facility. . ..
Id, at 61,172 (emphasis added).
Luz, then, concemed the requirements an energy storage facility must satisff to qualiff
for FERC certification as a QF. In such a setting, per Zaz, FERC considers whether the energy
input to the facility meets PURPA requirements but does so from the foundational starting point
that energy storage facilities are a renewable resource for purposes of QF certification. Plaintiffs
say they pointed out to the Commissioners that Lw did not examine the energy input of the
proposed battery storage qualifuing facility for any reason other than to confirm that "the energy
input to the facility is itself biomass, waste. a renewable resource, a geothermal resource, or any
DECISION REGARDING DISPOSITIVE MOTIONS _ 27
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combination thereof or a demonstration that any fossil fuel-fired input constitutes no more than
25 percent ofthe total energy input to the facility."
Plaintiffs frame the Zue decision as establishing energy storage facilities as a distinct
class of QF. FAC fl 58 (Dkt. 2); Plfs.' Mem. ISO MSJ I I (Dh. 29-l). There are many types of
small power production facilities. Of those, some types - because of their renewable resource
and energy input design - are entitled to be deemed "Quali$ring Facilities" under PURPA.
Battery storage facilities are one such type, and the Court agrees that FERC has not disputed -
and the holding in Luz certanly states directly - that FERC recogrizes that battery storage
facilities can be QF facilities, albeit "subject to the same fuel use linritations as all other small
power production facilities." Id. al61,170. Additionally, even though PURPA and its rules do
not refer specifically to energy storage systems, FERC specified that energy storage facilities
cannot "be singled out for any different sort of treatment with respect to their primary energy
source." Id. at 61,1'11. Thus, there can be no question after Luz that, so long as a facility meets
the fuel use limitations and other applicable requirements, an energy storage facility is entitled to
QF status and the rights and entitlements that attach to such a status.
Hence, the Court agrees with Plaintiffs that battery (energy) storage facilities are
recognized by FERC and can meet QF certification requirements. Significantly, the Court also
agees that the holding in Luz means that a battery storage facility is not precluded from QF
certification even if the energy input into the battery storage facility originates from a renewable
power source that, on its own, could be a differently classified QF facility such as a solar QF.
Rather, the QF designation requires that renewable power be used for the power that goes into
the battery storage system. Luz held that "energy storage facilities are subject to the same fuel
use limitations as all other small power production facilities" and that such facilities should not
DECISION REGARDING DISPOSITIVE MOTIONS _ 28
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"be singled out for any different sort of treatment with respect to their primary energy source."
Luz,at6l,l70,6l,17l. Additionally, the decision holds that "energy storage facilities ... are a
renewable resource for purposes ofQF certification," so long as they meet the fuel use
requirements for other renewable resource facilities. Id. at 6l,l'72.
d. The Commissioners' PURPA violation.
Regardless of whether the Commissioners leapfrogged the "distinct class ofQF" status of
Plaintiffs' projects, their orders nonetheless exceeded their authority under PURPA. Despite
acknowledging on one hand that only FERC can certify a QF and stating that no one had
challenged Plaintiffs' self-certified energy storage QF status, the Commissioners then used a
misplaced reliance on the holding in Znz as a means of claiming the right to make their own
determination of Plaintiffs' QF status, which they then did. Specifically, their Order stated that
"to qualiff as a PURPA resource, the primary energy source behind the battery storage must be
considered. We must, then, look to [Plaintiffs'] ... primary energy sources in order to determine
their eligibility under PURPA."r5 IPUC Order No. 33785 at I I (July 13, 2017) (Dkt. 4-6). But
by virtue ofPlaintiffs' FERC Forms 556, which self-certified their projects as QFs (and energy
storage QFs, not solar QFs), Plaintiffs' eligibility had already been decided under PURPA. The
Commissioners had no authority to evaluate whether plaintiffs' facilities "qualiff as a PURPA
resource" or "to determine their eligibility under PURPA." Rather, the role of the IPUC is to
implement a plan that complies with PURPA and then apply such implementation plan. By
ls These statements were made in the context of Idaho Power's petition for a declaration
of the contract terms for which Plaintiff's' ptojects were eligible. However, as discussed supra,
because the Orden addressed for the first time how the IPUC would treat battery storage
facilities, they constitute an implementation plan subject to federal challenge.
DECISION REGARDING DISPOSITIVE MOTIONS - 29
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"looking behind" Plaintiffs' QF status to examine the proposedr6 input power generation profile
of the facil'ities, the Commissioners violated PURPA by questioning Plaintiffs' qualifications or
eligibility under PURPA, and by then deciding, for all substantive purposes, that each is a solar
QF rather than an energy storage QF entitled to treatment as an "other QF."
More broadly, the Commissioners implemented a plan purporting to allow or require the
IPUC to consider the primary source of energy for a battery storage system in order to classiff it
for contracting purposes under Idaho law. But when doing so ignores or looks behind a facility's
QF status with FERC - in this case, self-certification as an energy storage QF and not a solar QF
- such an implementation plan violates PURPA. In other words, each time the Commissioners
purport to say that the Plaintiffs' QF status was neither put at issue by ldaho Power's petition,
nor did they make any decision upon Plaintiffs'QF status, the fact ofthe matter is that the relief
sought by Idaho Power and the decision ofthe Commissioners granting such relief could not
have been reached wilhout making a decision upon Plaintiffs' QF stat s.tl
The IPUC staff, as discussed in Order 33785, described the Plaintiffs' analysis as "overly
simplistic." IPUC Order No. 33785 at 6 (July 13,2017) (Dkt.4-6). However, it is the IPUC's
analysis that does not go far enough. Idaho Power, in its original petition before the IPUC,
16 As described in the Plaintiffs' FERC Forms 556, they reserve the right to change their
power input fiom solar to other renewable sources, consistent with PURPA. Indeed, they state in
such forms that "the sole direct source ofenergy input provided to the battery facility will be, as
described above, renewable sources." FERCForms 556atp.9,{l 7h (Dkts.4-8 through 4-l l).
17 This is further illustrated by extending the scenario. Consider if the Commissioners, in
"look[ing] to [Plaintiffs'] . .. primary energy sources in order to determine their eligibility under
PURPA" [IPUC Order No. 33785 at 1l (July 13,2017) (Dkt. 4-6)] had, instead, concluded that
the facilities were aol eligible under PURPA. Such a result would starkly violate the
jurisdictional boundaries of PURPA. So also does the scenario here, where the Commissioners
have done the very same thing - that is, decided "[the Plaintiffs' facilities] eligibility under
PURPA."
DECISION REGARDING DISPOSITIVE MOTIONS _ 30
Case 1:18-cv-00236-REB Document 62 Filed 01.17712O Page 31 of 37
sought an order "determining the proper contract terms, conditions, and avoided cost pricing to
be included in ... PURPA ... contracts requested by several battery storage facilities," including
Plaintiffs'. Walker Decl. Ex. 9 p. I (Dkt. 39-5 p. 14). The petition acknowledged that FERC
has exclusive jurisdiction to evaluate QF status and it said Idaho Power was not asking the IPUC
for "a determination as to QF status." Id. al6(Dkt.39-5 p. l9). Idaho Power said that it sought
only a declaratory order "clarifying" contract terms for battery storage facilities. Indeed, it
pointed out that "[t]he status of and applicability of the Commission's implementation of
PURPA with regard to proposed battery storage facilities was not considered and/or addressed in
the Commission's determinations as to published rate eligibility cap, differentiation of applicable
avoided cost rates to different generation technologies, or its determinations regarding other
contractual terms and conditions, such as contract term."r8 Id. at 7 (Dkt. 39-5 p. 20).
Perhaps there are other actions or additional proceedings that could have been, or may yet
be, undertaken to decide what contract terms apply to any PURPA contract relationship between
Plaintiffs and Idaho Power. There is a myriad of responsibilities upon such matters that is
properly the province ofthe Commissioners.re However, even though the IPUC had never
before considered energy storage facilities, the Commissioners took none ofthe steps available
to them to make a considered decision upon the details ofa PURPA contract for energy storage
facilities, such as eligibility caps or the applicability of standard avoided cost rates. Instead, the
Commissioners "classified" Plaintiffs' energy storage facilities as solar facilities. The words that
DECISION REGARDING DISPOSITIVE MOTIONS _31
18 This representation by Idaho Power further supports the Court's conclusion, srpra, that
the instant case brings an implementation challenge rather than an as-applied challenge.
le This decision does not speak to whether or when Plaintiffs may have become entitled
to particular contract terms under the prior implementation plan, before the Commissioners
issued the orders challenged in this case.
Case 1:l-B-cv-00236-REB Document 62 Filed O1-lL7l20 Page 32 of 37
were used by Idaho Power and the Commissioners to describe what was requested or what was
done as something other than the act of classifoing Plaintiffs' energy storage facilities as solar
facilities - words such as "extending," "temporarily setting," or "clarifuing" - are no more than
synonyms for "classification" in the context of what occurred. They do not change the import of
what was improperly done.
Thus, the Court concludes as a matter of law that the Commissioners improperly invaded
FERC's domain by determining Plaintiffs' QF status.
F. The Eleventh Amendment Does Not Shield Defendants from Plaintiffs' Claims.
Plaintiffs seek "[d]eclaratory and injunctive relief directing Defendants to implement
PURPA in a lawful manner by recognizing the QF status of energy storage QFs as distinct from
their energy input (source)." FAC fl 60 (Dkt. 2). They also seek "[d]eclaratory and injunctive
relief directing Defendants to require the utilities under their jurisdiction to afford energy storage
QFs all rights and privileges afforded to 'all other' QFs - other than wind and solar QFs." Id. fl
61. In moving for summary judgment, they seek an order "declaring and requiring the
Defendants honor Plaintiffs' 'QF' status and requir[ing] Idaho Power to tender twenty (20) year
contracts at published rates consistent with their status as 'other QF' pursuant to established
IPUC requirements." Plfs.'Mem. ISO MSJ l9-20 (Dkt.29-l).
Defendants challenge such claims based upon the immunity from suit generally
applicable to State defendants in federal court under the Eleventh Amendment to the federal
Constitution. Because the Eleventh Amendment bars a federal court fiom directing a state
agency how to conform its conduct to state law, Pennhurst State Sch. & Hosp. v. Halderman,
465 U.S. 89, 105-106 (1984), Defendants argue this Court may not hear and decide Plaintiffs'
claims, as described in their briefing:
DECISION REGARDING DISPOSITIVE MOTIONS _ 32
Case L:18-cv-00236-REB Document 62 Filed 0tlt7l20 Page 33 of 37
Contrary to what Plaintill's' imply, Defendants did not make a QF status
determination. Rather, Def'endants exercised their discretionary authority in
determining the applicable terms of a QF contract. And the terms of QF contracts
are a matter ofstate, not federal, law.
Nothing in PURPA or FERC's regulations restrict the PUC fiom defining
contract terms, including looking to the primary source ofQF generation. In other
words, federal law does not control. Rather, the PUC determination ofat issue is an
application of the PUC's permitted discretion on the allowance ofstandard rates for
projects having a design capacity over 100 kW ( l8 C.F.R. $ 29230aG)QD.
PURPA section 210(gXl), l6 U.S.C. $ 82aa-3(gXl), entrusts the review of this
determination to the Idaho Supreme Court, not to the federal courts. The Eleventh
Amendment thus bars Plaintiffs' claims.
Defs.'Mem. ISO MTDD(MSJ l8-19 (Dkt.42-l) (citation omitted).
The Eleventh Amendment provides that the "[i]udicial power of the United Statcs shall
not be construed to extend to any suit in law or equity, commenced or prosecuted against one of
the United States by Citizens ofanother State, or by Citizens or Subjects ofany Foreign State."
U.S. CoNST. amend. XI. The Eleventh Amendment applies with the same force and e{Ibct to
immunize a State from suits brought by its own citizens. Hans v. Lousiana, 134 U.S. 1 (1890).
The immunity extends to a State and to "an arm or instrumentality of the State." Lewis v.
Clarke,l37 S.Ct. 1285, 1290 (2017). The IPUC is an arm or instrumentality of the State of
Idaho; therefore, the Eleventh Amendment bars any suit against the IPUC itself.
However, the Eleventh Amendment does not prohibit suit in federal court against
individual commissioners in their official capacities if the "complaint alleges an ongoing
violation of federal law and seeks reliefproperly characterized as prospective." Verizon Md.,
htc- v. Pub. Serv. Comm'n of Md.,535 U.S. 635, 645 (2002\. "An allegation of an ongoing
violation of federal law . .. is ordinarily sufficient." Id. at 646 (quoting ldaho v. Coeur d'Alene
Tribe of ldaho,52 I U.S. 261,281 ( 1997)).
DECISION REGARDING DISPOSITIVE MOTIONS _33
Case 1:18-cv-00236-REB Document 62 Filed 071L7120 Page 34 of 37
Here, Plaintiffs' original Complaint named the IPUC as the only Defendant. (Dkt. l.)
However, Plaintiffs filed their First Amended Complaint wo days later, substituting the
individual commissioners in their oflicial capacities for the IPUC as an entity. (Dkt. 2.) Thus,
the Eleventh Amendment does not bar Plaintiffs' claims against the Commissioners so long as
they allege an ongoing violation of federal law and prospective relief.
Plaintiffs allege that the IPUC's current implementation plan violates PURPA by
improperly classiffing the QF status of battery storage facilities. Although Defendants deny the
claims, they do acknowledge that "[t]he Complaint alleges ... that Defendants' actions violate
PURPA by usurping FERC's jurisdiction to make determinations of QF status of particular
PURPA projects." Defs.' Mem. ISO MTDD(MSJ l8 (Dkt. 42-1). Thus, Plaintiffs contend that
the current implementation plan, which has been in effect since the IPUC issued the orders
challenged in this action, violates PURPA. This suffices as an allegation of an ongoing violation
of federal law.
The Court is also satisfied that Ptaintiffs' requested reliefis "properly characterized as
prospective." Plaintiffs request "[d]eclaratory and injunctive relief directing Defendants to
implement PURPA in a lawful manner .. ." and "to require the utilities under their jurisdiction to
afford energy storage QFs all rights and privileges afforded to'all other' QFs ..." FACufl60,6l
(Dkt. 2). Plaintiffs' motion for summary judgment asks this Court to "requir[e] the Defendants
honor Plaintiffs' 'QF' status and require Idaho Power to tender twenty (20) year contracts at
published rates ..." Plfs.' Mem. ISO MSJ l5 (Dkt. 29-l).
Such claims include requests for relief properly characterized as prospective. Among the
relief sought, Plaintiffs seek to enjoin Defendants from enforcing against them a PURPA
implementation plan they allege is unlawful. This suffices as a request for prospective relief.
DECISION REGARDING DISPOSITIVE MOTIONS _ 34
Case 1:18-cv-00236-REB Document 62 Filed 01,1L7120 Page 35 of 37
Further, because Plaintiffs' claims are levied against the individual IPUC Commissioners in their
official capacities, they allege an ongoing violation of federal law, and they seek prospective
relief, Defendants are not irmune from liability under the Eleventh Amendment.
G. Plaintiffs Are Entitled to Some, But Not All, of Their Requested Relief.
The Court next turns to the relief to which Plaintiffs are entitled. As described supra, the
Court has concluded that Defendants violated PURPA by improperly classiffing Plaintiffs' QF
status. The Court will issue a declaratory ruling holding that the IPUC's orders at issue here are
unlawful. The Court will also enjoin the Commissioners from applying such orders to Plaintiffs'
facilities as if such facilities are "solar QFs" under the IPUC's prior PURPA implementation
plan that distinguished "wind and solar QFs" from "other QFs." The Court will further enjoin
the Commissioners from considering the energy solrce input into Plaintiffs' energy storage QFs
for the purpose of classiling the QFs in any way other than as energy storage QFs.
Such a ruling is a predicate to the question of whether prospective relief is justified.
Accordingly, the Court also will order Defendants to implement PURPA in a lawful manner in
any future actions they take in their official capacities as IPUC commissioners as to Plaintiffs'
facilities that are the subject of this case, to include but not be limited to the classification of
Plaintiffs' facilities as energy storage QFs.
However, this Court will not order Defendants to place specific terms upon any power
supply contract Idaho Power must enter with Plaintiffs under PURPA. First, there is the
jurisdictional divide. Second, the Court is not persuaded on the closed record in this case that
Plaintiffs are entitled as a matter of law to the particular contract terms they ask the court to
impose. To the extent Plaintiffs seek an order requiring the tender of specific contract terms,
such a request involves the application of a state regulatory agency's rules to Plaintifls as
DECISION REGARDING DISPOSITIVE MOTIONS _ 35
Case 1:18-cv-00236-REB Document 62 Filed 01lL7l2O Page 36 ol 37
individual petitioners. Such relief is properly pursued before the IPUC. 20 lYinding Creek Solar
LLC, v. Peevey,293 F.Supp.3d 980, 993-994 (N.D. Cal. Dec. 6, 2017). Under PURPA, a QF
may bring judicial actions before FERC and in federal court against state regulatory
commissions to require the implementation of PURPA's rules but not their application. 16
U.S.C. $ 824a-3(f1, (hX2XB). Thus, this Court will stop short of granting the full relief Plaintiffs
seek. Instead, those additional issues may be taken up in further proceedings, subject to the
rulings and constraints ofthis decision, ifPlaintiffs choose to pursue such further proceedings.
ORDER
Based on the foregoing, IT IS HEREBY ORDERED as follows:
l. Defendant-Intervenor Idaho Power's Motion for Summary Judgment (Dkt. 39) and
Motion to Dismiss for Lack of Jurisdiction (Dkt. 40) are DENIED.
2. Defendants' Motion to Dismiss or in the Altemative Cross-Motion for Summary
Judgment (Dkt.42) is DENIED.
3. Plaintiffs' Motion for Summary Judgment (Dkt. 24) is GRANTED IN PART:
a. The Court finds that the Defendant IPUC Commissioners violated the Public
Utility Regulatory Policies Act of 1978, l6 U.S.C. $$ 2601 et seq., when they
issued final order numbers 33785 on July 13,201'l and 33858 on August 29,
2017. Such orders established an implementation plan that impermissibly
classified the QF status of Plaintiffs' energy storage facilities that are certified
under such Act as energy storage facilities. Classifuing such facilities as "solar
20 Ofcourse, if Plaintiffs are denied contracts on the terms they desire and they perceive
such denial is grounded in a violation of PURPA jurisdictional lines, they may be able to again
seek recourse using the avenues PURPA atTords.
DECISION REGARDING DISPOSITIVE MOTIONS _ 36
4
QFs" is outside the Commissioners' authority as state regulators and therefore in
violation of federal law.
b. Defendants are permanently enjoined from enforcing or applying either of such
IPUC final orders to Plaintiffs' facilities as if such facilities are classified as
something other than energy storage QFs, to include but not be limited to
classifying Plaintiffs' facilities as if they are "solar QFs" under the IPUC's prior
implementation plan. Defendants are further permanently enjoined from
considering the energy source input into Plaintiffs' energy storage QFs for the
purpose of classiffing the QFs in any way other than as energy storage QFs.
Plaintiffs' Motion for Summary Judgment (Dkt. 24) is otherwise DENIED. The Court
specifically declines to order Defendants to require utilities under their jurisdiction to
afford energy storage QFs all rights and privileges afforded to "other QFs" under the
IPUC's PURPA implementation plan.
Defendants are directed to take such action as is necessary and appropriate to give full
force and effect to the rulings set forth herein.
This memorandum decision and order resolves all outstanding claims in this case. A
5
judgment will lollow.
ffi DATED: January 17,2020.
ll,*il',*
Honorable Ronald E. Bush
Chief U. S. Magistrate Judge
DECISION REGARI}ING DISPOSITIVE MOTIONS - 37
Case 1:18-cv-00236-REB Document 62 Filed 0Lll7l2l Page 37 of 37