20130329Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DON HOWELL
DEPUTY ATTORNEY GENERAL
DATE:MARCH 29,2013
SUBJECT:NEW ENERGY TWO AND NEW ENERGY THREE’S MOTION FOR
PERMISSION TO FILE A PERMISSIVE APPEAL,CASE NOS.IPC-E-12-
25 AND IPC-E-12-26
On March 18,2013,New Energy Two and New Energy Three (collectively “New
Energy”)filed a Motion generally seeking the Commission’s permission for leave to file a
permissive appeal pursuant Idaho Appellate Rule (I.A.R.)12.In Interlocutory Order No.32755
issued March 5,2013,the Commission denied New Energy’s “Motion to Dismiss”for lack of
subject matter jurisdiction.In that Order,the Commission found that it did have jurisdiction to
resolve the complaints filed by Idaho Power against New Energy for the alleged breach of two
separate Power Purchase Agreements (PPAs).The Commission found that it had jurisdiction to
resolve the contract dispute because New Energy and Idaho Power had expressly agreed in their
PPAs to submit disputes arising under their respective PPAs to the Commission for resolution.
Order No.32755 at 10 citing PPA §19.1.
Appellate Rule 12(c)requires that the Commission rule upon a motion for permission
to appeal within 21 days from the date that the motion is filed.New Energy did not request a
hearing on its Motion.Pursuant to Rule 12(c)(1),the Commission must issue its Order
approving or disapproving the Motion no later than April 8,2013.
NEW ENERGY’S MOTION FOR PERMISSIVE APPEAL
New Energy’s Motion for leave to file a permissive appeal has four parts.First,it
requests that the Commission designate its two Interlocutory Orders (Nos.32692 and 32755)as
DECISION MEMORANDUM 1
final Orders pursuant to Commission Rule 323.[03],’IDAPA 31.01.01.323.03.Motion at 2.
Second,New Energy seeks a Commission Order approving New Energy’s Motion for a
Permissive Appeal under I.A.R.12.Id.Third,New Energy seeks a stay of the current
proceeding pursuant to Commission Rule “324 until the appeal to the Supreme Court is
resolved.”Id.Finally,and in alternative,New Energy seeks reconsideration of Order Nos.
32692 and 32755 pursuant to Commission Rule 331,IDAPA 31.01.01.331.New Energy’s
Motion is attached for your review and consideration.
COMMISSION DECISION
1.Does the Commission wish to designate its two interlocutory Order Nos.32692
(Notice of Complaint)and 32755 (denying Motion to Dismiss)as final Orders pursuant to Rule
323.03?
2.Does the Commission wish to approve or disapprove New Energy’s request for
permission to appeal from the two interlocutory Orders pursuant to Appellate Rule 12?
3.Does the Commission wish to grant reconsideration of Order Nos.32692 and
32755?
4.Does the Commission wish to grant a stay of the current proceeding “until the
appeal to the Supreme Court is resolved”?
Don Howell
Deputy Attorney General
bls/M:IPC-E-I 2-25_IPC-E-I 2-26_dh3
‘New Energy actually cites to Rule 323.04 but quotes Rule 323.03.Motion at 2-3.
DECISION MEMORANDUM 2
RECEVED
Angelo L.Rosa (ISB No.7546)
1168E.1700 S.
Salt Lake City,Utah 84105
Telephone:[phone]
[phone]
PETER J.RJCAHRDSON (ISB No.3195)
GREGORY M.ADAMS (ISB No.7454)
Richardson &O’Leary,PLLC
515 North 27th Street
P.O.Box 7218
Boise,Idaho 83707
Telephone [phone]
Fax [phone]
[e-mail]
[e-mail]
Attorney for:
New Energy Two,LLC
New Energy Three,LLC
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMPLAINT AND
PETITION OF IDAHO POWER COMPANY
FOR A DECLARATORY ORDER
REGARDING THE FIRM ENERGY SALES
AGREEMENT AND GENERATOR
INTERCONNECTION AGREEMENT WITH
NEW ENERGY TWO,LLC.
IN THE MATTER OF THE COMPLAINT AND
PETITION OF IDAHO POWER COMPANY
FOR A DECLARATORY ORDER
REGARDING THE FIRM ENERGY SALES
AGREEMENT AND GENERATOR )INTERCONNECTION AGREEMENT WITH )
NEW ENERGY THREE,LLC.))
)
IPC-E-12-25/26
MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEEDINGS OR,IN THE ALTERNATIVE,MOTION FOR
RECONSIDERATION
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Fax:
E-mail:arosa(exergydevelopment.com
2OI3MAR 18 PM 2:56
lDAO P..irni rri’-c iir’ii’LI I IL.I I ..1’LI,)I4.dI
CASE NO.IPC-E-12-25
CASE NO.IPC-E-12-26
MOTION FOR CERTIFICATION
OF ORDERS AS FINAL/FOR
PERMISSIVE APPEAL/FOR STAY
01?PROCEEDINGS OR,IN THE
ALTERNATIVE,MOTION FOR
RECONSIDERATION
)
))
)))))))
I.
INTRODUCTION
COMES NOW New Energy Two,LLC and New Energy Three,LLC,by and through
their counsel of record,Peter Richardson and Angelo L.Rosa,and hereby petitions the
Commission for the following relief:
1.For an order (a)designating the Commission’s Orders 32692 and 32755 as final
orders pursuant to IPUC Rule of Procedure 323(04);(b)granting permission to
appeal the Commission’s Orders 32692 and 32755 to the Idaho Supreme Court
pursuant to Idaho Appellate Rule 12(a);and (c)staying the above-captioned
proceedings pursuant to IPUC Rule of Procedure 324 until the appeal to the
Supreme Court is resolved;and
2.In the alternative,for reconsideration of Orders 32692 and 32755 pursuant to
IPUC Rule of Procedure 331,et al.
Good cause exists to grant Exergy the reliefrequested on the followings grounds:
1.Exergy intends to appeal the Orders in question and designation of those Orders
as final is appropriate.The Commission’s Orders may be certified as final for the
purposes of seeking appellate review of those orders.The Orders in question
concern the Commission’s subject-matter jurisdiction over the issues presented by
Idaho Power Company in its Petition and Complaints in these matters.As such,
they embrace a controlling issue of law and are appealable pursuant to the
applicable provisions of the IPUC Rules of Procedure and the Idaho Code.
2.Permissive appeal to the Idaho Supreme Court is appropriate under the
circumstances given that the issues on appeal are threshold matters that will
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MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEEDINGS OR,IN THE ALTERNATIVE,MOTION FOR
RECONSIDERATION
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determine whether these proceedings may be adjudicated before the Commission
or in another forum.As such,these are controlling issues of Law reviewable by an
appellate court preparatory to an adjudication of the merits.
3.Until the issue of subject-matter jurisdiction is resolved,it would be premature
and inappropriate for Exergy to answer the Petition and Complaint in the above-
captioned matters as directed by Orders 32692 and 32755.No prejudice or
hardship will inure to Idaho Power by a stay of these proceedings,whereas
substantial prejudice and irreparabLe harm (in the form of deprival of the
opportunity to be heard in what the New Energy entities allege to be the correct
forum for this dispute)will result if these proceedings are not stayed pending the
resolution of an appeal.
In the alternative,Exergy respectfully petitions the Commission pursuant to IPUC Rule
of Procedure 331 for reconsideration of Orders 32692 and 32755 on the grounds that the
Commission has not applied the statutory and appellate guidance on this issue correctly,as set
forth herein.
H.
STATEMENT OF APPLICABLE LAW
A.Legal Standard for Designation of Orders as Final
IPUC Rule of Procedure 323 empowers the Commission to designate orders as final.
That Rule states,in pertinent part:
“Whenever a party believes that an order not designated as a final order according
to the terms of these rules should be a final order,the party may petition the
Commission to designate the order as final,If an order is designated as final after
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MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEEDINGS OR,IN ThE ALTERNATIVE,MOTION FOR
RECONSIDERATION
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its release,its effective date for purposes of reconsideration or appeal is the date
of the order of designation.”
IPUC Rule ofProcedure 323(04),at IDAPA 31.01.01.
B.Legal Standard for Permissive Appeal
Idaho Appellate Rule 12(a)authorizes appeals by permission from the administrative level to
the Supreme Court for review.That Rule states,in pertinent part:
“Criteria for permission to appeal.Permission may be granted by the Supreme
Court to appeal from an interlocutory order or judgment of a district court in a
civil or criminal action,or from an interlocutory order of an administrative
agency,which is not otherwise appealable under these rules,but which involves a
controlling question of law as to which there is substantial grounds for difference
of opinion and in which an immediate appeal from the order or decree may
materially advance the orderly resolution of the litigation.”
1.A.R.12(a).
C.Legal Standard for Stay of Commission Proceedings
IPUC Rule of Procedure 324 empowers the Commission to stay proceedings before it
during the pendency of an appeal.That Rule states,in pertinent part:
“Any person may petition the Commission to stay any order,whether
interlocutory or final.Orders may be stayed by the judiciary according to statute.
The Commission may stay any order on its own motion.”
TUC Rule of Procedure 324,at IDAPA 31.01.01.
D.Legal Standard for Reconsideration
IPUC Rule of Procedure 331 and Idaho Code Section 61-626 set forth the standard,and
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MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEEDINGS OR.IN THE ALTERNATIVE,MOTION FOR
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procedure,by which reconsideration is sought.Rule of Procedure 331 states,in pertinent part:
“Within twenty-one (21)days after the service date of issuance of any final order,
any person interested in a final order or any issue decided in a final order of the
Commission may petition for reconsideration.Petitions for reconsideration must
set forth specifically the ground or grounds why the petitioner contends that the
order or any issue decided in the order is unreasonable,unlawful,erroneous or not
in conformity with the law,and a statement of the nature and quantity of evidence
or argument the petitioner will offer if reconsideration is granted.”
IUC Rule of Procedure 324,at IDAPA 31.01.01.Further,Idaho Code Section 61-626 states,in
pertinent part:
“After an order has been made by the commission,any corporation,public utility
or person interested therein shall have the right,within twenty-one (21)days after
the date of said order,to petition for reconsideration in respect to any matter
determined therein.”
I.C.§61-626(1).
III.
ARGUMENT
A.An Order on Jurisdiction is Sufficiently Final to be Certified by the
Commission as Such.
The Orders of the Commission ruling on subject-matter jurisdiction are fundamental
orders that affect the rights of the parties.Accordingly,they are final orders for the purposes of
the issue adjudicated.“As a general rule,a final judgment is an order orjudgment that ends the
lawsuit,adjudicates the subject matter of the controversy,and represents a final determination of
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MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEEDINGS OR,IN ThE ALTERNATIVE,MOTION FOR
RECONSIDERATION
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the rights ofthe parties.”Camp v.East Fork Ditch Co.,Ltd.,137 Idaho 850,867,55 P.3d 304,
321(2002).As such,the Orders are final orders for the purposes of appeal,notwithstanding any
lack of verbiage denoting their finality.Further,it is well established that “[t]he real character of
a written instrument is to be judged by its contents and substance,not by its title.”Swinehart V.
Turner,36 Idaho 450,452,211 P.558,559 (1922).The Commission is empowered by the IPUC
Rules of Procedure to define an Order as final for the purposes of an appeal,notwithstanding the
pendency of other issues before it.Such a characterization is appropriate here given the nature
of the Orders and the effect they have on the rights of the parties.
B.Appeal by Permission is Overwhelmingly Warranted Given the Issue of
Jurisdiction is a Controlling Issue of Law and a Resolution Thereof Will
Materially Affect the Pending Proceedings.
Permissive appeal is very necessary under the present circumstances.The standard set
forth in Idaho Appellate Rule 12(a)(see supra)is met given that (a)the issue in dispute involves
a controlling question of law as to which there is substantial grounds for difference of opinion
and (b)an immediate appeal from the Orders in question will materially advance the orderly
resolution of this litigation.The issue of subject-matter jurisdiction is a controlling question of
law in that the appropriate forum for this matter as a whole is in dispute and there must be
clarification of that issue given the disagreement between the parties and the Commission as to
which adjudicatory body has jurisdiction to hear that dispute.Issues
of subject matter jurisdiction present questions of law over which appellate courts exercise free
review.State v.Barros,131 Idaho 379,380,957 P.2d 1095,1096 (1998);State v.Doyle,121
Idaho 911,913,828 P.2d 1316,1318 (1992).Furthermore,it would be duplicitous and wasteful
for the parties and the Commission to continue forward with these proceedings until the
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MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEEDINGS OR,IN ThE ALTERNATIVE,MOTION FOR
RECONSIDERATION
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aforementioned question ofjurisdiction is resolved.Therefore,permissive appeal is necessary to
materially advance the orderly resolution of this dispute.The New Energy parties therefore
respectfully submit that the Commission grant permission to appeal this issue to the Idaho
Supreme Court.
C.A Stay of Commission Proceedings is Essential Given the Need for Appellate
Review on a Threshold Issue of Whether the Commission Indeed Has
Subject-Matter Jurisdiction Under the Present Facts.
The relevant IPUC Rules of Procedure authorize the issuance of a stay while a matter is
pending reconsideration and/or appeal.As alluded to in Section 111(B),supra,if this matter was
heard at the Commission level before the threshold issue ofjurisdiction is resolved,there will be
prejudice to the New Energy parties’rights given their objection to the Commission’s
jurisdiction on this issue.It is established at the appellate level that issues ofjurisdiction must be
resolved prior to the determination of matters on their merits:“A question
of subject matter jurisdiction is fundamental and a matter of law;it cannot be ignored when
brought to our attention and should be addressed prior to considering the merits of an appeal.”
See State v.Kavajecz,139 Idaho 482,483,80 P.3d 1083,1084 (2003);State v.Savage,145
Idaho 756,758,185 P.3d 268,270 (Ct.App.2008).Additionally,not staying these proceedings
would also result in a significant waste of time,money and resources committed to what would
be a premature adjudication before New Energy’s rights vis-à-vis subject-matter jurisdiction are
resolved.A stay is therefore appropriate and warranted,both to preserve the rights of the parties
as well as to conserve resources.
D.In the Alternative,Reconsideration of the Court’s Order Denying New
Energy’s Motions to Dismiss is Appropriate to Conform the Court’s Rulings
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MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEEDINGS OR.,IN THE ALTERNATIVE,MOTION FOR
RECONSIDERATION
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to the Prevailing Law.
In the event that the Commission is not inclined to grant the aforementioned three
components of relief,it is appropriate for the Commission to reconsider its ruling on the Orders
in question.
The Commission lacks subject-matter jurisdiction for the reasons set forth in the New
Energy parties’motion to dismiss and reply brief.The appellate guidance on point (notably
Afton and its progeny)are clear in that contract interpretation issues are reserved for the District
Court system in the State of Idaho.See Motions to Dismiss and Reply to Opposition to Motions
to Dismiss,on file herewith.Furthermore,the fact that the New Energy parties agreed to
boilerplate language proffered by Idaho Power as to forum for dispute resolution is not outcome
determinative because,as set forth in detail in the New Energy parties’Motions to Dismiss.The
New Energy parties respectfully submit that the Commission should revisit the analysis laid out
in detail in the Motions to Dismiss for the purposes of reassessing whether it truly has subject-
matter jurisdiction in light of the appellate guidance on the issue.
VI.
CONCLUSION
For the foregoing reasons,New Energy Two and New Energy Three respectfully submit
that the Commission is legally empowered to grant the relief requested herein,that the applicable
law supports a grant of the relief requested,and the Commission will be making a sound ruling
in its discretion if it grants said relief.
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MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEEDiNGS OR,IN THE ALTERNATIVE,MOTION FOR
RECONSIDERATION
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DATED THIS 18th day of March,2013.
RICHARDSON &O’LEARY,PLLC
P er J.Richardson (ISB No:3195)
Gregory M.Adams (ISB No.7454)
Attorneys for Respondents
ANGELO L.ROSA
‘1/I
Angelo L.Rosa (ISB No.7546)
Attorney for New Energy Two,LLC and
New Energy Three,LLC
IPC-E-1 2-25/26
MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEED[NGS OR,[N THE ALTERNATIVE,MOTION FOR
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 18th day of March,2013,1 caused a true and correct
copy of the MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEEDiNGS OR,IN THE ALTERNATIVE,MOTION FOR
RECONSIDERATION to be served by the method indicated below,and addressed to the
following:
Jean Jewell
Secretary
Idaho Public Utilities Commission
472 W Washington Street
Boise,Idaho 83702
Peter Richardson
Richardson &O’Leary,PLLC
515 N.27th Street
Boise,Idaho 83702
Donovan Walker
Jason Williams
Idaho Power Company
1221 West Idaho Street
Boise,Idaho 83702
()U.S.Mail,Postage Prepaid
()Hand Delivered
()Overnight Mail
(X)Facsimile
(X)Electronic Mail
()U.S.Mail,Postage Prepaid
()Hand Delivered
()Overnight Mail
()Facsimile
(X)Electronic Mall
()U.S.Mail,Postage Prepaid
()Hand Delivered
()Overnight Mail
(X)Facsimile
(X)Electronic Mail
,1’1
Signed
Angelo L.Rosa
IPC-E-12-25/26
MOTION FOR CERTIFICATION OF ORDERS AS FINAL/FOR PERMISSIVE
APPEAL/FOR STAY OF PROCEEDINGS OR.,IN THE ALTERNATIVE,MOTION FOR
RECONSIDERATION
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