20181206Plaintiff Reply to Defendant Response 49.pdf

Peter J. Richardson, ISB# 3195
515 N. 27th Street
Boise, Idaho 83702
Telephone [phone] I
Facsimile: [phone]
Attorney for Plaintiffs
I. Introduction.
Robert C. Huntley, ISB# 2188
R. HUNTLEY LAW, PLLC
815 West Washington Street
Boise, ID 8701
Telephone [phone]
Facsimile: [phone]
Attorney for Plaintiffs
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
VS
and,
FRANKLIN ENERGY STORAGE ONE, LLC,
FRANKLIN ENERGY STORAGE T'WO, LLC
FRANKLIN ENERGY STORAGE THREE,
LLC, FRANKLTN ENERGY STORAGE
FOUR, LLC
Plaintiffs,
PAUL KJELLANDER, KRISTINE RAPER
ERIC ANDERSON, in their official capacity as
Commissioners of the IDAHO PUBLIC
UTILITIES COMMISSION,
Defendants,
IDAHO POWER COMPANY,
Defendant-Intervenor
Case No.: I : I 8-cv-00236-REB
FRANKLINS' REPLY BRIEF TO
DEFENDANTS RESPONSE TO
FRANKLIN'S MOTION FOR SUMMARY
JUDGMENT
TABLE OF CONTENTS
1
II. Erroneous Factual Assertion I
Franklins' Reply Brief to Defendant's Response to Franklins' Motion for Summary Judgment. i
Case 1:18-cv-00236-REB Document 49 Filed 11/30/18 Page 1 of 9
III.
IV.
V.
VI.
The Johnson Act is not Applicable to PURPA Complaints
The Eleventh Amendment and Cooperative Federalism....
Battery Storage Facilities are QFs.
Conclusion
TABLE OF AUTHORITIES
CASES
Aluminum Co. of Am. V. Utits. Comm'n, 713 F.3d 1024 (4th Cir. 1933).
Luz Development qnd Finance Corporation, 51 FERC 1161,078 (1990).
Int'l Bd. Of Elec. Workers v. Pub. Serv. Comm'n,614F.2d206 (9'h Cir. 1980).
.2
.4
5
6
Ark. Power & Light Co. v. Mo. Pub. Serv. Comm'n,829F.2d144418th Cir. 1987). .......4
Ex Parte Young,209 U.S. 123,28 S.Ct. 441 ,52L.Bd.714 (1908) .......5
Freehold Cogeneration Assocs. v. Bd. Of Regulatory Comm'rs of N.J., 44F.3d I178, (3'd
Cir. 1995).......
.4
....4
1,5,6
.4
North Am. Natural Res., Inc. v. Michigan Pub. Serv. Comm'n 4l F. Supp2d 736 (WD
Mich 1998)......
Nucor v. Nebraskq Pub. Power Dist.,89l F.2d 1343 (8th Cir 1989).
Occidental Chem. Corp. v. La PSC,494 F.Supp .2d 401 (MD LA 2007)...3
Pub. Serv. Co. v. Patch, 167 F.3d 15 (l't Cir. 1998).
Seminole Tribe v. Floridia, 5 I 7 U.S. 44, I 16 S.Ct. I I 14, 134 L.Ed. 252 (1996)
US West v. Nelson,146 F.3d 718 (9th Cir. 1998)...
US West v. Tristani, 182 F.3d 1202 00rh Cir. 1999)
5
,.2
,4
.5
aJ
J
Franklins' Reply Brief to Defendant's Response to Franklins' Motion for Summary Judgment.
ii
Case 1:18-cv-00236-REB Document 49 Filed 11/30/18 Page 2 of 9
I
INTRODUCTION
Plaintiffs' hereby respectfully submit their Reply Brief to Defendants' Response to
Plaintiffs' Motion for Summary Judgment. Defendants' opening argument asserts the Court does
not have jurisdiction over Plaintiffs' Complaint because, they assert, the Commission's order is an
"as-applied" claim. Because this "as-applied" vs. implementation' issue is fully briefed in
Plaintiffs' Response Brief to Idaho Power's Motion to Dismiss, and Plaintiffs' Response Brief to
Idaho Power Motion for Summary Judgement and Plaintiffs' Reply Brief to Idaho Power's
Response to Franklins' Motion for Summary Judgment, Plaintiffs' arguments there will not be
repeated here.
II
ERRONEOUS FACTUAL ASSERTION
While a little poetic license may be excusable as the Defendants attempt to vigorously
defend their position -- bold misstatements of fact are not. Defendants begin their argument on
page 7 of their Brief by asserting that:
Plaintiffs' Motion relies on a misconstruction of the roles of the PUC under PURPA.
Plaintiffs' erroneously contend that Defendants' ruled that its battery storage facilities were
not QFs. See Plaintif.fs ' Motion at 5 , 7 ,9 - 1 5.
Then, the Defendants identify what they term a "false conflict" between this misstatement and the
recognition (by all parties, Franklin included) that FERC has exclusive jurisdiction over QF status
determinations. Perhaps, Plaintiffs' Complaint was too subtle for the Defendants. While Franklin
has never asserted the IPUC ruled their projects were not QFs, Franklin has asserted the IPUC
ruled their projects are not battery storage QFs which is a QF status recognized by FERC in Luz.t
I Luz Development and Finance Corporation 5l FERC T 6 1 ,078 ( I 990)
Franklin's Reply Brief to Defendants' Response to Franklins' Motion for Summary Judgment. I
Case 1:18-cv-00236-REB Document 49 Filed 11/30/18 Page 3 of 9
Franklin has asserted that the IPUC
[E]stablished a policy of denying qualifying power production facilities (Qualifying
Facilities or QFs) see 16. U.S.C. 82aa-3(a)(l), that are energy storage qualif,red power
production facilities their rights under PURPA.2
ID]enied Plaintiffs their right to the Idaho Commission's established avoided cost rates and
contract terms that the Idaho Commission has made available for all QFs other than wind
or solar.3
fF]ound that [because] the Franklin Energy Storage batteries are energized with solar
ensrgy, they concluded that the franklin Energy Storage QF projects are only entitled to
the solar or wind avoided cost rate and contract terms and conditions.a
What the IPUC has denied is the Franklin projects' status as battery storage facilities in a new
implementation plan in which the Idaho Commission addresses for the very first time (and without
jurisdiction to do so) the eligibility of energy storage QFs to the benefits of PURPA.5
III
THE JOHNSON ACT IS NOT APPLICABLE TO PURPA COMPLAINTS
Plaintiff assert that the Johnson Act unambiguously imposes a jurisdictional bar to this
Court's ability to hear this matter. Although, "the burden of showing that the conditions have been
met is on the party invoking the Johnson Act,"6 the Defendants' entire argument consists of a
single conclusory paragraph with no analysis or discussion (e.g. no "showing") of how each of the
conditions in the Johnson Act applies in this matter. Although those conditions are accurately
2 Complaintatl22. Dkt. no.2.
3 M. atn27.
a H. atn 57.
s The lack of the IPUC's jurisdiction to adjudicate a QF's "eligibility" for the benefits of PURPA
are addressed in detail in the Plaintiffs' Reply to Idaho Power's Response to Plaintiffs' Motion
for Summary Judgment and the Plaintiffs' Response to Idaho Power's Motion for Summary
Judgment.
6 Nucor v. Nebraska Pub. Power Dist.,891 F.2d 1343,1346 (8th Cir 1989).
Franklin's Reply Brief to Defendants' Response to Franklins' Motion for Summary Judgment. 2
Case 1:18-cv-00236-REB Document 49 Filed 11/30/18 Page 4 of 9
quoted by the Defendants, they provide no analysis of how, or even whether, they are applicable
to this Commission's jurisdiction in the context of a state commission's implementation of
PURPA.
The Johnson Act does prohibit this Court's jurisdiction when a state utility commission
issues a ratemaking decision that meets a four-part test. The four parts of the test include, (1)
jurisdiction is based solely on repugnance of the order to the Federal Constitution, (2) the order
does not interfere with interstate commerce, (3) the order has been made with notice and hearing,
and (4) a plain and speedy remedy may be had in state court.
Defendants' cite two cases in support of its assertion that the Johnson Act, "mandates
dismissal."T Neither case cited by Defendants deals with the Johnson Act's applicability (or non-
applicability) in the PURPA implementation context. Had the Defendants' researched this issue
prior to making the bold assertion that the Johnson Act "mandates dismissal" they would have
realizedthat their assertion is completely off point. Federal courts are unanimous in their rejection
of the Johnson Act as a bar to their review of PURPA implementation complaints/claims.
A cogent summary of the extant case law rejecting Defendants' claim that the Johnson
Act "mandates dismissal" in the PURPA enforcement context is provided in Occidental Chem.
Corp. v. La PSC, 494 F . Supp. 2d 401, 412 (MD L^ 2007). The Occidental Court rejected the
very first condition of the Johnson test, observing that, "PURPA claims . . . are based on alleged
violation of federal statutes. The claims are not solely constitutional in nature." The Eighth
Circuit went into more detail in its rejection of the Johnson Act as a bar to federal court jurisdiction
in the PURPA context:
7 (JS West v. Nelson, 146 F.3d 7l 8 (9th Cir. 1998) and US ï4/est v. Tristani, I 82 F.3d 1202 00th
Cir. 1999).
Franklin's Reply Brief to Defendants' Response to Franklins' Motion for Summary Judgment. 3
Case 1:18-cv-00236-REB Document 49 Filed 11/30/18 Page 5 of 9
Jurisdiction is not based "solely" either on diversity or on "repugnance" of the ... order to
the Federal Constitution. It is based, in part at least, on the theory, not at all insubstantial,
that the [rate order] was in conflict with and preempted by the Federal Power Act. It is
true, of course, that a federal statute overrides conflicting state law only because of the
Supremacy Clause of the Federal Constitution. In a sense, therefore, a preemption claim
always asserts repugnance of state law to the Federal Constitution. But such a claim does
not usually require that the Constitution itself be interpreted.s
The First Circuit Court of Appeals has also weighed in on this issue, declaring that the Johnson
Act "does not apply to claims based upon congressional statute or federal administrative rulings,
even though these commands are ultimately backed up by the Supremacy Clause (and are therefore
arguably 'constitutional' claims). The case law on this point is so clear that no fuither discussion
of the point is required."e The Fourth and Ninth Circuits are in accord.l0 The Third Circuit,
likewise, has held that preemption claims based on PURPA do "not rely solely on constitutional
grounds," and thus the Johnson Act does not apply.rr It is thus perplexing that the Defendants'
would have bothered to cite to the Johnson Act in light of the overwhelming and uniform
agreement among the Circuits that it simply does not apply in PURPA enforcement proceedings.
IV.
THE llth AMENDMENT AND COOPERATIVE FEDERALISM
The remaining issue raised in the Defendants' Response that is not addressed elsewhere
by the Plaintiffs in this Docket's pleadings is its Eleventh Amendment and cooperative federalism
arguments. However, these arguments are based on the out-of-left-field assertion that Plaintiffs
are asking the Court to "direct... a state agency to conform its conduct to state law.l2 Plaintiffs
8 Ark. Power & Light Co. v. Mo. Pub. Serv. Comm'n,829 F.2d 1444, 1449 (ïth Cir. 1987).
e Pub. Serv. Co. v. Patch,167 F.3d 15,25 (l't Cir. 1998).
t0 Aluminum Co. of Am. V. Utits. Comm'n, 713 F .3d 1024,1028 (4th Cir. 1983) and Int't Bd. Of
Elec. Workers v. Pub. Serv. Comm'n,614F.2d206,209-2ll (9th Cir. 1980).tt Freehold Cogeneration Assocs. v. Bd. Of Regutatory Comm'rs of N.J., 44 F .3d I 178, I 186-
1187 (3',d Cir. 1995).
l2 Defendants' Response Brief at P. 5.
Franklin's Reply Brief to Defendants' Response to Franklins' Motion for Summary Judgment. 4
Case 1:18-cv-00236-REB Document 49 Filed 11/30/18 Page 6 of 9
here are, of course, not asking the state to "conform its conduct to state law," but are asking the
Court to require the state to conform its conduct to a federal law - PURPA. Such a request is in
harmony with the Eleventh Amendment.
The Defendants' tired Eleventh Amendment argument has long been put to rest. For
example, in North Am. Natural Res., Inc. v. Michigan Pub. Serv. Comm'n 4l F. Supp. 2d736,741
(WD Mich 1998) the Court held that the Eleventh Amendment does not bar claims against a state
public service commission for allegedly violating PURPA. Where a state officer's actions are
violating or will violate federal law, those actions are outside the state's authority and "the state
has no power to impart to him any immunity from responsibility to the supreme authority of the
United States." Id (Quoting from Ex Parte Young, 209 U.S. 123,28 S.Ct. 441 , 52 L.Ed. 714
(1908)). Under this exemption to immunity, jurisdiction exists for prospective injunctive relief to
enjoin ongoing violations by state officials of federal law. Seminole Tribe v. Florida, 517 U.5.44,
73, tt6 S.Ct. 1 lt4, 1132, 134 L.8d.252 (1996).
V.
BATTERY STORAGE FACILITIES ARE QFs
Defendants' observe that the IPUC ruled that "neither PURPA nor FERC's implementing
regulations identifies battery storage as a renewable resource eligible for QF status and the
benefits provided by the act. (sic) IPURPA]."r3 This conclusion is, of course, wrong. While it is
true that neither the Act nor FERC's regulations specifically identify battery storage projects as
QFs, FERC has, in fact, ruled that battery storage facilities are QFs that are eligible for the
benefits of PURPA. Perplexingly, the IPUC must have been aware of this fact when it issued its
l3 Response Brief at p. 8.
Franklin's Reply Brief to Defendants' Response to Franklins' Motion for Summary Judgment. 5
Case 1:18-cv-00236-REB Document 49 Filed 11/30/18 Page 7 of 9
order because it actually cited to the very case in which FERC issued its ruling that battery
storage facilities are renewable QFs - Luz.la Specifically FERC declared that:
In sum, energy storagefacilities such as the proposed Luz battery system are a
renewable resource for purposes of QF certification. 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...l5
The fact that the IPUC actually believed (incorrectly) that energy storage facilities are not stand
alone QFs independent of the source of renewable energy inputs belies any assertion on the part
of the Defendants that they were merely exercising their "discretion under PURPA" in their
denial of the energy storage QF status of the Franklin projects.
VI.
CONCLUSTON
For the reasons stated herein and for the reasons stated in Plaintifß' Motion for Summary
Judgment, the Court is respectfully requested to grant their Motion for Summary Judgment.
/s/ Robert C. Huntlev. Esq.
/s/ Peter.I. Richardson Esq.
Attorneys for the Plaintiffs
Dated this 30th, day of November 2018
ta Luz Development and Finance Corporatior¿, 5 I FERC I 61 ,078 ( 1990). Pagination citations
are to original FERC order.
15 Id. at pp 9 - 10. Emphasis provided.
Franklin's Reply Brief to Defendants' Response to Franklins' Motion for Summary Judgment. 6
Case 1:18-cv-00236-REB Document 49 Filed 11/30/18 Page 8 of 9
CERTIFICATE OF SERVICE
I hereby certify that on this 30th day of November 2018, I caused a true and correct copy
of the foregoing document to be electronically filed with the Clerk of the Court using the
CM/ECF system, which sent a Notice of Electronic Filing to the following persons;
Brandon Karpen ¡tu4¡þ¡.karÞen @puc. idaho. sov
Scott Zanzig scott.zarrzig(@ag. idaho. gov
Steven B. Anderson sba@.aswblaw.com
Wade L. Woodard wlwØas wblaw.com
Donovan E. Walker dwalker@idahopower,com
Franklin's Reply Brief to Defendants' Response to Franklins' Motion for Summary Judgment. 7
Case 1:18-cv-00236-REB Document 49 Filed 11/30/18 Page 9 of 9