20181206Plaintiff Response to Memo 50.pdf

Peter J. Richardson, ISB# 3 195
5 l5 N. 27th Street
Boise, Idaho 83702
Telephone [phone] I
Facsimile: [phone]
Attorney for Plaintifß
Robert C. Huntley, ISB# 2188
R. HLINTLEY LAW, PLLC
815 West Washington Street
Boise, ID 8701
Telephone (208) 388- I 230
Facsimile: [phone]
Attomey for Plaintiffs
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
FRANKLTN ENERGY STORAGE ONE, LLC,
FRANKLIN ENERGY STORAGE TWO, LLC
FRANKLIN ENERGY STORAGE THREE,
LLC, FRANKLIN ENERGY STORAGE
FOUR, LLC
Plaintiffs,
Case No.: I : l8-cv-00236-REB
PLAINTIFFS' RESPONSE BRIEF TO
DEFENDANTS' MEMORANDUM IN
SUPPORT OF MOTION TO DISMISS OR TN
THE ALTERNATIVE, CROSS-MOTION
FOR SUMMARY JUDGMENTVS.
and,
PAUL KJELLANDER, KRISTTNE RAPER
ERIC ANDERSON, in their official capacity as
Commissioners of the IDAHO PUBLIC
UTILITIES COMMISSION,
Defendants
IDAHO POWER COMPANY,
Defendant-Intervenor
TABLE OF CONTENTS
I. Introduction
Franklins' Response Brief to Defendant's Motion to Dismiss or, in the Alternative, Cross-Motion
for Summary Judgment
i.
I
Case 1:18-cv-00236-REB Document 50 Filed 11/30/18 Page 1 of 9
II.The Lack of Subject Matter Jurisdiction has been well
Established
III. Johnson Act Equivocation.
"As-Applied" vs. Implementation
Luz Development and Finqnce Corporation 51 FERC T 61,078 atp.9, (1990)
STATUTES
Johnson Act,28 U.S.C. $ 1342.
I
v
V.
'.....,...2
CASES
Conclusion 5
TABLE OF AUTHORITIES
l(illiamson Cnty. Reg'l Planning Comm'n v. Hqmilton Bank of Johnson city, 473 U.S. 172, 105
s.ct.3108,87 L. Ed.2dl26. (1985). ....2,3
5
1,2
Franklins' Response Brief to Defendant's Motion to Dismiss or, in the Alternative, Cross-Motion
for Summary Judgment
ii.
Case 1:18-cv-00236-REB Document 50 Filed 11/30/18 Page 2 of 9
I
INTRODUCTION
Plaintiff s hereby respectfully submit their Response Brief to Defendant's Motion to
Dismiss or, in the Altemative, Cross-Motion for Summary Judgment. Defendants' assert
arguments in support of their MotiorVCross Motion, which have all been addressed in Plaintiff s
other Responses and Replies filed contemporaneously with this Response. In respect to the Court's
time, our Responses/Replies will not be repeated here. Rather, Plaintiffs will only address new or
revised arguments presented by the Defendants' MotiorVCross Motion.
il
THE COURT'S SUBJECT MATTER JURISDICTION HAS BEEN WELL
ESTABLISHED
Defendants' initial argument (beginning on page 12 of their Memorandum) asserts the
Court does not have jurisdiction over Plaintiffs' Complaint because the Commission's order is an
"as-applied" claim. This "'as-applied" vs. implementation' issue is fully briefed in Plaintiffs'
Response Brief to Idaho Power's Motion to Dismiss and Reply Brief to Idaho Power's Response
to Plaintiffs Motion to Dismiss. Plaintiffs' arguments there will not be repeated here. As
established therein, the lack of IPUC subject matter jurisdiction is also dispositive of statute of
limitations arguments.
Franklin's Response Brief to Defendant's Motion to Dismiss or, in the Alternative, Cross-Motion
for Summary Judgment. I
Case 1:18-cv-00236-REB Document 50 Filed 11/30/18 Page 3 of 9
III.
JOHNSON ACT EQUTVOCATTON
In their Motion/Cross Motion Defendants raise the Johnson Act, in a footnote, as a possible
defense.l They raised the same argument in their Response to our Motion for Summary Judgment.2
However, in the instant pleading, (Memorandum in Support of Motion/Cross Motion), the
Defendants equivocate as to the applicability of the Johnson Act. In their Response to our Motion
for Summary Judgment, Defendants boldly asserted that the Johnson Act is "merely one of many
fatal flaws infecting Plaintiffs" (sic) Amended Complaint."3 However, in the Memorandum at
issue here, they tentatively assert only that the Johnson Act "may bar this .. action" and that
"Defendants will reserve fully brief,rng the question of the Johnson Act's authority over this action"
to some future proceeding.a Despite taking a raincheck on "fully briefing the question,"
Defendants do cite the Court to some cases but, once again, they apparently take care to avoid
reference to the many, unanimous circuit court decisions that have unequivocally declared that the
Johnson Act is inapplicable to PURPA enforcement actions.s Forthe reasons set forth in Plaintiffs'
Reply to Defendants' Response (cited below) and because Defendants have decided not to "fully
brief'their position, the Court should disregard further consideration of the Johnson Act.
IV.
AS.APPLIED vs. IMPLEMENTATION
I Defendants' Memorandum in Support of MotiorVCross Motion atfnT,pp 12 -13. Dkt. no. 41-
1.
2 Defendants' Memorandum in Response to Plaintiff s Motion for Summary Judgment at pp. 3 -
4.
3 Id. atp.4.
4 Id.
s ,See Franklin's Reply Brief to Defendants' Response to Franklin's Motion for Summary
Judgment app.2 - 4.
Franklin's Response Brief to Defendant's Motion to Dismiss or, in the Alternative, Cross-Motion
for Summary Judgment. 2
Case 1:18-cv-00236-REB Document 50 Filed 11/30/18 Page 4 of 9
That the IPUC was implementing a new plan to deal with battery storage QFs is fully
briefed in Plaintiffs'Reply Brief to Idaho Power's Response to Plaintiffs' Motion for Summary
Judgement and in Plaintiffs' Response to Idaho Power's Motion for Summary Judgment. The
PUC Commissioners' Brief here, however asserts as part of its "as-applied" claim that:
It is well settled that before an as-applied challenge is ripe the appellant must have obtained
a final decision from the entity charged with implementing the regulation and must have
sought compensation through state remedies unless doing so would be futile. Ilillíamson
Cnty. Reg'l Planning Comm'n v. Hamilton Bank of Johnson city, 473 U.S. 172 at 194-95
(r98s)6
Plaintiffs' here are not seeking compensation. In addition, however, the Williamson decision deals
with the potential taking of property without just compensation due to restrictive planning and
zoning regulations - a decision and controversy totally unrelated to whether the Idaho Commission
may usurp FERC's exclusive jurisdiction in making QF eligibility determinations under PURPA.
Immediately following Defendants' unusual citation to lVilliamson, Defendants then build
a strained bridge from that planning-and-zoning-just-compensation-puzzlement by next making
this inaccurate assertion:
More particularly, Plaintiffs' Complaint attacks the PUC's regulation of standard rates
available to particular QFs larger than 100 kW. See Complaint, fl 46.
Plaintifß have never "attacked the PUC's regulation of standard rates available to particular QFs."
What Plaintifß do challenge is the PUC's improper classification of an entire class of QFs (energy
storage QFs) based on their primary energy input. By implementing PURPA in such a way as to
deny energy storage QFs their status as distinct QFs, the result is the application of a different set
of standard rates that were set by the Idaho Commission. Plaintiffs simply do not attack the Idaho
6 ros s.ct. 3108, 87 L.Ed.2d L26.
Franklin's Response Brief to Defendant's Motion to Dismiss or, in the Alternative, Cross-Motion
for Summary Judgment. 3
Case 1:18-cv-00236-REB Document 50 Filed 11/30/18 Page 5 of 9
Commissions "regulation of standard rates available to particular QFs." The paragraph from
Plaintiffls Complaint cited by the Defendants' (fl46) makes no such claim. It is, in fact, no more
than a simple abbreviated summary of the IPUC's PURPA implementation plan that was in
existence before the Commission adopted its new implementation plan dealing with energy storage
QFs:
46. The Idaho Commission has established standard-offer avoided cost rates,
with a contract term of up to twenty-years for all QFs (other than solar or wind QFs) if
those non-wind or non-solar QFs have an electrical generating capacity of ten average
monthly megawatts (l0aMW) or less. ,See IPUC Order Nos. 33357 and33419. For wind
and solar QFs, the Idaho Commission allows wind and solar QFs of up to 100 kW [footnote
omitted] similar twenty-year contracts at published rates. ffootnote omitted] However, it
limits the availability of its published rate 'standard offer' contracts to just two years for
solar and wind QFs that are larger than 100 kW. The Idaho Commission ruled that:
After careful consideration, the Commission [Idaho PUC] ultimately
determined that it was appropriate to maintain the 100 kW eligibility cap
for published avoided cost rate for wind and solar QFs.
See IPUC OrderNo. 32697,atp.3.
And:
This Commission fldaho PUC] is confident that, with other changes to the
avoided cost methodologies incorporated in the Order, changing eligibility
from l0 aMW for resources other then wind and Solar is unnecessary at this
time. We find that a l0 aMW eligibility cap for access to published avoided
cost rates for resources other than wind and solar is appropriate...
,See IPUC Order No. 32697, at p. l5
Finally:
We maintain the eligibility cap at l0 aMW for QF projects other than wind
and solar (including but not limited to biomass, small hydro, cogeneration,
geothermal and waste-to-energy.
See IPUC Order No. 321 7 6 at p. 9, (parenthetical in original.)
Apparently, the Defendants have confused the concepts of QF status and the IPUC's avoided cost
rate setting function under PURPA. The former is exclusively FERC's domain while the latter is
a function delegated to the states under PURPA
Franklin's Response Brief to Defendant's Motion to Dismiss or, in the Altemative, Cross-Motion
for Summary Judgment. 4
Case 1:18-cv-00236-REB Document 50 Filed 11/30/18 Page 6 of 9
The Idaho Commission's original implementation plan depended on the classification
FERC gives to different classes of QF (solar/wind or "all other" classes of QF). The PUC does
not have the authority to determine who is, or in not, in each class of QF - that role is FERC's
exclusive duty. Here, of course, the IPUC has intruded into that prohibited arena by denying the
very existence of the energy storage class of QF. They do so despite the fact that FERC has
explicitly recognized that energy storage QFs constitute a distinct class of QFs that is separate and
apart from the energy input to the storage system. This fact is highlighted by the selective quote
from Luz employed by the Defendants. Omitted from all quotes from Luz by the Defendants and
the Intervenor (Idaho Power) is the operative finding of that decision, to wit:
In sum, energy storage facilities such as the proposedLuz battery system are a renewable
resource for purposes of QF certification.T
It is noteworthy for this analysis that FERC did not rule that energy storage facilities are
QFs based on the primary energy input to the storage system. In fact, FERC's ruling is agnostic
as to the energy input to the storage system -- as long as the energy input is from a renewable
energy source.8 This, of course? is in direct conflict with the Idaho Commission's determination
that the dominant energy input to the storage system determines the facility's eligibility forbenefits
conferred by PURPA, e.g. for purposes of QF certification. Thus, according to the Idaho
Commission, a battery storage system that uses solar as its dominant energy input is not an energy
storage QF for purposes of QF certification, but rather it is a solar QF. This conflation of the
primary energy input with the nature of the QF, in addition to being preempted by PURPA, raises
7 Luz Development and Finance Corporatíon 5l FERC 1[61,078 atp.9,(1990)
8 ,See Plaintiff s Response Brief to Idaho Power's Motion for Summary Judgment and Plaintiff s
Reply Brief to Idaho Power's Response to Franklin's Motion for Summary Judgment.
Franklin's Response Brief to Defendant's Motion to Dismiss or, in the Alternative, Cross-Motion
for Summary Judgment. 5
Case 1:18-cv-00236-REB Document 50 Filed 11/30/18 Page 7 of 9
impossibility concerns, both legal and physical. It is physícalþ impossible to reconcile the IPUC's
determination of the primary energy input with the fact that primary energy inputs have the very
real potential to vary over time and in magnitude for this class of QF. For example, one day (or
even hour or minute) the primary renewable input may be solar but the next daylhour/minute it
may be wind or geothermal or biomass or waste. And, of course, it is legally impossible to
reconcile because the Idaho Commission's order is in direct conflict with FERC's Luz decision
quoted above.
v.
CONCLUSION
For the reasons stated herein and for the reasons stated in Plaintiffs' other Responses and
Replies filed contemporaneously herewith, the Court is respectfully requested to deny the
Plaintiffs' Motion to Dismiss or in the Alternative Motion for Summary Judgment.
/s/ Robert C. Huntlev, Esq.
/s/ Peter J. Richardson Esq.
Attorneys for the Plaintiffs
Dated this 30th, day of November 2018.
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
S cott Zanzi g s c ott. zanz i gC¿ùAgJdahg.Srj{
Franklin's Response Brief to Defendant's Motion to Dismiss or, in the Altemative, Cross-Motion
for Summary Judgment. 6
Case 1:18-cv-00236-REB Document 50 Filed 11/30/18 Page 8 of 9
Steven B. Anderson sba@,aswblaw.com
V/ade L. Woodard wlw@.aswblaw.com
Donovan E. Walker [e-mail]
Franklin's Response Brief to Defendant's Motion to Dismiss or, in the Alternative, Cross-Motion
for Summary Judgment. 7
Case 1:18-cv-00236-REB Document 50 Filed 11/30/18 Page 9 of 9