20200917Enel Green Power Motion to Dismiss.pdf

Gregory M. Adams (ISB No. 7454)
Peter J. Richardson (ISB No. 3195)
Richardson Adams, PLLC
515 N. 27ft Street
Boise,Idaho 83702
Telephone: [phone]
Fax: [phone]
gre g@richardsonadams. com
peter@richardsonadams. com
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Attorneys for Enel Green PowerNorth America, Inc
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
WOOD HYDRO, LLC,)
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COMPLAINANT,CASE NO, IPC-E.20-28
vs.
CROSS-RESPONDENT ENEL GRBEN
POWER NORTH AMERICA, INC.'S
MOTION TO DISMISS
IDAHO POWER COMPANY,
RESPONDENT/CROSS-
COMPLAINANT,
vs.
ENEL GREEN POWERNORTH AMERICA,
INC.,
CROSS-RESPONDENT,
vs
CENTRAL RTVERS POWER US, LLC,
CROSS-RESPONDENT.
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
IPC-E-20-28 _ PAGE I
In response to the Summons and Cross-Complaint served by the Idaho Public Utilities
Commission ("IPUC" or "Commission"), Enel Green Power North America, Inc. ("Enel") hereby
files its Motion to Dismiss Idaho Power Company's ("Idaho Power") Cross Complaint pursuant
to IDAPA 31.01.01.056.1 For the reasons explained below, Enel respectfully requests that the
Commission issue an order finding it lacks subject matter jurisdiction to require Enel to pay Idaho
Power the damages it requests in its Cross Complaint, and that it further lacks jurisdiction to
adjudicate the contract dispute at issue in this case. ln the alternative, even if the Commission
concludes it may have jurisdiction, the Commission should decline to exercise jurisdiction over
this contract dispute, which would more properly be adjudicated in court.
I. FACTS
This case involves contractual disputes between Idaho Power and three separately owned
and operated hydroelectric qualiffing facilities ("QFs") under the Public Utility Regulatory
Policies Act of 1978 ("PURPA"), each with its own 35-year Firm Energy Sales Agreement
("FESA") and unique facts related to its dispute. In each case, [daho Power takes the position that
the QF has "permanently" curtailed deliveries of energy in the latter years of its levelized-rate
FESA, even though two of the QFs have already recorrmenced deliveries of energy to Idaho Power
and the third has stated it intends to do so soon. Nevertheless, Idaho Power asserts that certain
provisions of the FESAs entitle it to substantial liquidated damages as though the QFs each
I The Summons directs Enel to "file a written answer or written motion in defense of the Cross-
Complaint within twenty-one (21) days of the service date of this Summons . . . ." Summons at p. I
(emphasisadded); seealsoIDAPA31.01.0l.057.02(statingananswertoacomplaintisduewithin2ldays
"unless . . . a motion to dismiss is made within twenty-one (21) days"). Enel reserves the right to file an
answer and affirmative defenses should the Commission deny this Motion to Dismiss.
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
IPC-E-20-28 _ PAGE 2
committed an economic walk-away from its contract, and it asks this Commission to issue it the
equivalent of a judgment for damages totaling over seven million dollars.
A. Wood Hydro, LLC ("Mi1e28,,)
Wood Hydro, LLC ("Wood Hydro") initiated this proceeding by filing a formal complaint
against Idaho Power on June 25,2020, regarding its QF referred to as "Mile 28." Wood Hydro,s
complaint alleges that Idaho Power has wrongly asserted that Wood Hydro permanently curtailed
the Mile 28 facility's output and thus owes a large liquidated damages payment to Idaho power,
even though Wood Hydro has already recoflrmenced deliveries of energy. Wood Hydro Complaint
atpp.4-5. Wood Hydro's complaint asks the Commission to provide the following relief: (1) a
declaration that Wood Hydro has not "permanently curtailed the Annual Net Energy Amounf'; (2)
a declaration that the "liquidated damages clause in the Agreement is not enforceable"; and (3) a
"directive to Idaho Power to refund" withheld payments for delivered energy and to "reimburse
Wood for the costs of a letter of credit wrongfully required by Idaho Power to continue to accept
deliveries of energy from the Project." Id. atp.6.
In response to Wood Hydro's complaint, Idaho Power's answer and cross complaint asserts
that Wood Hydro's curtailment triggers a requirement to pay liquidated damages equal to
$1,163,125. Idoho Power's Answer and Cross Complaint at !J!f 1-4. However, because Wood
Hydro recommenced deliveries within a year of such curtailment, ldaho Power "forwent its
entitlement" to full payment of $1,163,125 and reduced the amount owing to $116,312. Id. atll
15. Through the cross complaint, Idaho Power requests affrmative relief against Wood Hydro,
including that the Commission direct Wood Hydro to "pay the amounts assessed by Idaho power
as Lump Sum Repayment amounts due[,]" - i.e., $l 16,312. Id. atpp.l, LB.
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
IPC-E-20-28 _ PAGE 3
B. Enel (Rock Creek #2)
Idaho Power's cross complaint also joined and brought a claim for damages against Enel
related to the Rock Creek #2 hydroelectric QF. Idaho Power appears to allege that the Rock Creek
#2 QF is "owned" by Enel, and that the Rock Creek #2permanently curtailed its deliveries. Id. at
pp. 1, 10-13.2 Idaho Power alleges, "On June 2,zlz},Idaho Power sent Enel a letter notiffing it
that Rock Creek #2hadnot generated at all during Contract Year 31, and informed Rock Creek#2
of the Lump Sum Repayment amount due under its PURPA contract of $4,059,472." Id. at fl 16.
According to Idaho Power, the $4,059,472 indamages is due under Article 21.3.1and Appendix
D of the FESA, which Idaho Power characterizes as a liquidated damages provision purportedly
designed to repay Idaho Power for alleged overpayments for deliveries made in the early years of
the contract . Id. atll l7-18. However, Idaho Power calculates the $4,059,472liqidated damages
for "overpayment" based on the estimated Annual Net Firm Energy amount made at the time of
contracting in 1987, not based on the lesser amount of Net Firm Energy actually delivered each
yearsince 1987. Id. atflfl 18-20.
Despite characterizing Rock Creek #2's curtailment as o'permanent" and thus triggering
overpayment damages based on a theory of economic walk-away, Idaho Power acknowledges the
temporary outage at Rock Creek #2 endedbefore Idaho Power even filed its cross complaint' See
id. atfl|9. As the letter from Enel affached to tdaho Power's answer and cross complaint explains,
"seller never intended for, nor conveyed to Idaho Power that the shut-down of the Facility was
going to be permanent . . . The Facility is now back in service as of June 18,2020." Id. at
, By filing this Motion, Enel Green Power North America, lnc. does not concede that it, as opposed
to one of its subsidiaries, is the proper party to this proceeding. Such matters can be resolved if the case
proceeds.
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
IPC-8.20-28 _ PAGE 4
Attachment 12.3 Furthernore, Enel's letter explains that Idaho Power failed to object to the outage
of the Rock Creek #2 plant for almost a year before claiming $4,059,472 in damages for the first
time in the days before the plant was brought back online, calling into question Idaho Power's
good faith and compliance with basic equity principles. Id. at Attachment 12.
Idaho Power's cross complaint requests that the Commission direct Enel to "pay the
amounts assessed by tdaho Power as Lump Sum Repayment amounts due[.]" Id. atp.18. In other
words, Idaho Power asks the Commission to enter the equivalent of a judgment against Enel for
$4,059,472 in damages for an alleged breach of contract.
C. Central Rivers Power US, LLC (Lowline #2)
Idaho Power also joins and brings a claim for damages against Central Rivers Power US,
LLC ("Central Rivers") related to an outage at the Lowline #2 hydroelectric QF. Idaho Power
alleges that "[b]ecause Lowline #2 failed to deliver its Annual Net Energy amount from Section
6.3 during Conffact Year 32, and permanently curtailed its annual delivery for that year, the lump
sum repayment amount specified for Contract Year 32 from Appendix D is applied to the
difference in Net Energy delivered and the Annual Net Energy amount - which in this case is
$3,616,983 . . . ." Id. atl26. According to a letter from Central Rivers attached to Idaho Power's
answer and cross complaint, the Lowline #2 facility is planned to be placed back online in the near
future. Id. at Attachment 14. Yet Idaho Power asks the Commission to order Central Rivers to
pay Idaho Power $3,616,983 in damages under the purported liquidated damages provision in the
FESA. Id. atp.18.
' Idaho Power's pleading does not dispute the quoted facts from Enel's letter, which are incorporated
into Idaho Power's pleading by reference. Id. atl2l.
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
IPC-E-20-28 _ PAGE 5
In sum, Idaho Power seeks a cumulative damages awards from the Commission against the
three QFs of $7,792,767.4
II. ARGUMENT
A. The Commission Lacks Subject Matter Jurisdiction Over this Dispute
The Commission possesses no jurisdiction over this contractual dispute for payment of
damages. Both the Idaho Supreme Court and this Commission's precedent confi.rm the lack of
jurisdiction over Idaho Power's contractual damages claim.
As an administrative agency, the Commission's jurisdiction is limited. "The Public
Utilities Commission has no inherent power; its powers and jurisdiction derive in entirety from the
enabling statutes, and nothing is presumed in favor of its jurisdiction." Lemhi TeL Co. v. Mountain
States Tel. & Tel. Co.,98 Idaho 692, 696, 57 I P .2d 7 53 , 7 57 (1977) (internal quotation omitted).
"As a general rule, agencies have only such adjudicatory jurisdiction as is conferred on thern by
statute . . . and they cannot confer jurisdiction upon themselves." 2 Am. Jur. 2d, Administrative
Law $ 282. Just last year, the Idaho Supreme Court confirmed that an agency "has no jurisdiction
outside of what the Legislature specifically grants it[,]" and therefore the "Court must void an
order by the [agency] that determines issues outside of its statutory jurisdiction." Idaho Retired
FireJighters Ass'n v. Pub. Employee. Ret. Bd., 443 P.3d 207 ,210 (2019).
As the Idaho Supreme Court has explained, the public utilities law "establishes a
comprehensive scheme for the regulation of investor-owned public utilities by the Idaho Public
Utilities Commission." Alpertv. Boise Water Corp.,1l8 Idaho L36,140,795P.2d298,302 (1990)
(citing Idaho Code, title 61, ch. 5). Yet that authority primarily regards the regulation of public
4 $ I 1 6,3 1 2 + 54,059,47 2 + $3,616,983 : 57,7 92,7 67
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
IPC-E-20-28 _ PAGE 6
utilities and their relationship with their own customers in provision of regulated utility services.
See id. (holding that Commission lacked jurisdiction to determine the validity of the franchise
contracts between utilities and cities). lnAlpert, the Court has summarizedthatthe Commission's
statutory jurisdiction includes the power to investigate and fix rates and regulations, I.C. $ 61-503;
to determine the reasonableness of rates, I.C. $ 6l-502; to investigate proposed interstate rates,
I.C. $ 6l-506; to determine rules and regulations affecting the performance of public utilities, I.C.
$ 61-507; to order improvements to utility facilities, LC. $ 6l-508; to investigate accidents
occurring on public utility property arising from its maintenance or operation, I.C. $ 6l-517; to
determine standards and practices for the measurement of quantity, qualrty or other conditions
pertaining to the supply of a public utility product or service, I.C. $ 6l-520; to ascertain the value
of public utility property, I.C. $ 6l-523; and to issue certificates of convenience and necessity, I.C.
$ 61-526. Id.,llS Idaho at 140.
However, QFs are not public utilities and are not subject to such rate regulation and
oversight by the Commission. Instead, when selling power a utility, QFs are third-party suppliers
of energy to the utility. Indeed, PURPA and the Federal Energy Regulatory Commission's
("FERC") rules exempt QFs from utility-type rate regulation by state utility commissions. 16
U.S.C. $ 824a-3(e)(l); l8 C.F.R. $ 292.602(c)(l); see also Crossroads Cogeneration Corp. v.
Orange & Rockland Utils., 159 F.3d 129, 139 (3d Cir. 1998) ("although a PURPA-governed
agreement is unenforceable prior to approval by the relevant state agency, the rights of the parties,
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
IPC-E-20-28 _ PAGE 7
once their agreement receives such approval, are to be determined by applying normal principles
o f contract interpretation. ").5
Thus, the question is whether the Commission possesses jurisdiction to adjudicate a
contract dispute between a regulated utility and a QF acting as a supplier of energy at wholesale
to the utility. In Idaho, the starting premise is that contract interpretation and enforcement is
generally a maffer for the courts. As the Idaho Supreme Court has explained:
Generally, construction and enforcement of contract rights is a matter which lies in
the jurisdiction of the courts and not the Public Utilities Commission. This is true
notwithstanding that the parties are public utilities or that the subject matter of the
contact coincides generally with the expertise of the commission. If the matter is
a contactual dispute, it should be heard by the courts.
Lemhi Tel. Co.,98 Idaho at696. Thus,inlemhi,the Court "set aside" the order of the Commission
construing and enforcing a contract with a utility. Id. at 698; see also Bunker Hill Co. v. Wash.
Water Power Co., l0l Idaho 493, 494, 616 P.2d 272, 273 (1980) (setting aside another order and
explaining, "While one of the parties is apublic utility, and while the general area of power supply
may be one in which the Commission is presumed to have expertise, nevertheless, the matter
remains a contractual dispute involving the legal interpretation of a contract which historically lies
within the jurisdiction of the courts.").
The Idaho Supreme Court has traditionally held that the Commission lacks jurisdiction to
interpret and enforce contracts between utilities and QFs. See ldaho Power Co. v. Cogeneration,
t 5"" also See also Independent Energy Producers Association, Inc. v. Califurnia Public Utilities
Commission, 36 F.3d 848, 858 (9th Cir. 1994) (state utility commission had no authority "unilaterally to
modifu the terms of the standard offer contract"); Oregon Trail Electric Consumers Cooperative, Inc. v.
Co-Gen Company, 168 Or. App. 466, 482,7 P.3d 594 (2000) ("[c]ourts uniformly have held that state
regulators cannot intervene in the public interest and modifr the prices fixed by a cogeneration contract
because PURPA does not provide for such authority . . . , and to imply that authority would undermine the
long-term cogeneration contracts that Congress sought to encourage.").
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
TPC-E-20-28 - PAGE 8
Inc. ("cogeneration r'), 129 Idaho 46, 49,921 P.2d 746,749 (1996). ln Cogeneration, I, the
Commission asserted jurisdiction over a dispute regarding whether a force majeure event excused
a QF of a requirement to submit a performance assurance under its FESA with Idaho Power. See
id. In its own orders, the Commission acknowledged that its jurisdiction over contract disputes is
limited in general and further that the Commission's "regulatory authority over QFs . . . is limited
by PURPA and the implementing FERC regulations," which protect QFs against utility-type
regulation. Idaho Power Co. v. Cogeneration, fnc.,IPUC Case No. IPC-E-94-24, Order No.
25918, 1995 Ida. PUC LEXIS 3 1, *9- 1 1 (March 1, I 995). Yet the Commission stated it found that
"the public interesf' of the case required it to "assert and exercise what [it found] to be concurrent
jurisdiction" with the courts. Id. The Commission thus denied the QF's motion to dismiss the
case and subsequently issued an order stating that the QF must pay the performance assurance.
Id.; see also Idaho Power Co. v. Cogeneration, fnc.,IPUC Case No. IPC-E-94-24, Order No.
25971,1995 Ida. PUC LEXIS 47 (April 1, 1995) (order on merits after a hearing).
After the district court relied on the Commission's order as binding in resolving the dispute,
the Idaho Supreme Court reversed on the ground that the Commission lacked jurisdiction to issue
an order enforcing the contract. Cogeneration I, 129ldaho at 49. The Supreme Court explained:
"While there is no dispute concerning IPUC's authority to approve PURPA contracts, the
subsequent interpretation and enforcement of contracts does not generally fall within its powers."
Id. The Supreme Court citedAfton Energt, Inc. v. Idaho Power Co., 111 Idaho 925,928,729P.2d
400, 403 (1986) (Afton IV), for the general rule that the "district court rather than IPUC the
appropriate forum for contract disputes between utilities and QFs." Cogeneration I, l2g Idaho at
49. "Accordingly, IPUC's attempted enforcement of the agreement is of no consequence." Id.
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
TPC-E-20-28 - PAGE 9
Thus, the efforts and proceedings before the Commission were fruitless, and the parties were
subsequently left to litigate the matter on the merits in trial court. See ldaho Power Co. v.
Cogeneration, Inc. ("Cogeneration II'),134 Idaho 738,742,9 P.3d 1204, 1208 (2000) (appeal
after remand for trial).
lnAfton IV,the Court explained that in a jurisdictional challenge, "[i]t is important to note
whatrelief IdahoPowerisaskingfor." 111 Idaho at928. Inthiscase,therelief IdahoPower
requests is three contractual damages awards that total $7,792,767 . Indeed, in the case of Rock
Creek #2, the damages amount claimed by Idaho Power far exceeds a reasonable expectation of
likely payments to the QF under the remainder of its FESA. See Declaration of Randald Bartlett
In Support of Motion to Dismiss at fl 8.6 A high estimate of remaining payments for energy likely
to be delivered under the Rock Creek #2 FESA is only $1,780,205.60, whereas Idaho Power asks
the Commission to order Enel to pay Idaho Power $4,059,472. Id. Thus, it is impossible to
characterize Idaho Power's claim as anything other than a claim for damages, and the dispute
presented by Idaho Power involves far more than a mere interpretation of contract rights that could
be remedied with declaratory or injunctive relief alone.
Notably, the pleadings identiff no statutory provision providing the Commission with
jurisdiction to adjudicate contractual damages claims, let alone to award an enforceable judgment
for such damages to Idaho Power against a QF. Indeed, the utility statutes establish that even
6 Although the court rules do not strictly govern proceedings before the Commission, a motion to
dismiss on jurisdictional grounds that implicates factual matters can rely on evidence outside the pleadings
without converting the motion to a motion for summary judgment. I.R.C.P. 12(bXl); Owsley v. Idaho
Indus. Comm'n,l4l ldaho 129,133 n.l, 106 P.3d 455,459 n.1 (2005) (citing Osborn v. United States,9lS
F.2d724,729 n.6 (8th Cfu. 1990)). Accordingly, the Commission may consider the factual matters in the
Declaration of Randald Bartlett In Support of Motion to Dismiss without converting this motion to amotion
for summary judgment.
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
LPC-E-20-28-PAGE 10
where a regulated utility violates laws administered by the Commission, any damages are available
in the district courts, not the Commission. Idaho Code provides:
In case any public utility shall do, cause to be done or permit to be done, any act,
matter or thing prohibited, forbidden or declared to be unlawful, or shall omit to do
any act, matter or thing required to be done, either by the constitution, any law of
this state, or any order or decision of the commission, according to the terms of this
act, such public utility shall be liable to the persons or corporations affected thereby
for all loss, damages or injury caused thereby or resulting therefrom. An action to
recover such loss, damage or injury may be brought in any court of competent
jurisdiction by any corporation or person.
I.C. $ 61-702 (emphasis added). No provision provides for recovery of such damages before the
Commission.
The Commission's precedent unequivocally establishes that the Commission has no
jurisdiction to adjudicate damages claims. In a PURPA dispute, the Commission explained, "The
Commission, mindful of its statutory underpinnings, has never assumed the jurisdiction or
authority to assess or determine damages nor would it in this case attempt to do so." A.W. Brown
Co. v.Idaho Power Co.,IPUC CaseNo. IPC-E-88-9, OrderNo. 22453,1989lda. PUC LEXIS 77,
*5 (April 1, 1989) (emphasis added). In another case, the Commission approved of Idaho Power's
settlement agreement to prevent the need to litigate claims of overpayment liability damages in
levelized-rate FESAs similar to the claims at issue herc. In re Application of ldaho Power Co.
Regarding its Proposed Cancellation of Two Firm Energt Sales Agreements,IPuc Case No. IPC-
E-98-10, Order No. 27861, 1999lda. PUC LEXIS 1, *ll-13 (Jan. l, 1999). The Commission
expressly acknowledge that absent the settlement such damages claims must be litigated in court,
stating: "We find that the facts in this case are in dispute and we recognize that contract disputes
generally fall within the jurisdiction of the District Court, not this Commission." Id.; see also id.
at **7-8 (noting "Staff also agrees with Idaho Power that the expense associated with pursuing the
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, [NC.'S MOTION TO
DISMISS
TPC-E-20-28 _ PAGE 11
matter in court, and the small likelihood ofbeing able to collect on any judgment, makes settlement
a preferred alternative" (emphasis added)). Thus, in virtually the same circumstances as presented
here, the Commission acknowledged that jurisdiction to assess or determine damages for alleged
overpayment liability belongs in the courts, not the Commission.
This Commission has consistently recognized the limitations of its statutory jurisdiction
over damages claims. "Although the Commission is often described as a quasi-judicial agency, the
Commission is not a court." Eric Conrad v. Intermountain Gas Co.,IPUC Case No. INT-G-16-
01, OrderNo. 33524, 20l6lda. PUC LEXIS 55, *15-16 (May 17, 2016). "The Commission is not
authorized to award 'damages' to customers under the Public Utilities Laws[,]" and instead,'oany
person injured by the conduct of a public utility may file 'an action to recover such loss, damage
or injury . . . in any court of competent jurisdiction. . . ."' Id. (quoting I.C. $ 6l-702) (emphasis in
order); accord Pamela and Scott Bowers v. Idaho Power Co.,lPUC Case No. IPC-E-07-14, Order
No.30615,2008 Ida. PUC LEXIS 117, *16 (Aug. 7,2008) (stating, the "Commission is not
empowered to award damages for losses or injuries. Idaho Code $ 6l-702."). "The Commission's
regulatory responsibility is to ensure that rates and services offered by regulated utilities are just
and reasonable and that utilities are in compliance with Orders and regulations issued by this
Commission." In re Investigation into the Pay Telephone Practices of GTE Northwest, Inc.,IPUC
Case No. GTE-T-89-4, Order No., 22554, 1989 Ida. PUC LEXIS I09, *2-3 (May l, 1989). But
the Commission "is generally without jurisdiction to resolve issues of contractual obligations" and
"has no authority to award damages based upon allegations of unfair business practices." 1d.
Similarly, in addition to lacking jurisdiction to award damages, the Idaho Supreme Court
has also held that the Commission lacks jurisdiction to forbid a utility from pursuing collection of
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, [NC.'S MOTION TO
DISMISS
LPC-E-20-28 - PAGE 12
amounts owed to it. See In re Complaints of Strand, I 1 I Idaho 341 , 342-43, 723 P .2d 885, 886-
87 (1986) (holding that decision to pursue collections is committed to utility management's
discretion). The lack ofjurisdiction to direct Idaho Power to pursue (or forego pursuit of) such
damages further confirms the Commission's lack of jurisdiction over the subject matter of this
dispute, where Idaho Power appears to seek such direction from the Commission. See ldaho
Power's Answer and Cross Complaint, at p. 18, fl 5.
Moreover, in addition to a lack of jurisdiction to award damages, the Commission lacks
jurisdiction to adjudicate the numerous corlmon law affirmative defenses that are implicated by
Idaho Power's answer and cross complaint. As noted above, Idaho Power's cross complaint
demonstrates that Idaho Power delayed for almost ayear in asserting its objections regarding Rock
Creek #2's outage, despite having been promptly informed of the outage. Idaho Power's decision
to sit on its alleged rights for months and then claim millions of dollars in damages implicates
several common law affirmative defenses that will have to be resolved, including laches, estoppel,
waiver, failure to mitigate damages, and lack good faith and fair dealing, among others. Similarly,
the excessive nature of the damages alleged under the purported liquidated damages clause will
require adjudication of whether such provision - if even intended to be a liquidated damages clause
in the first place - is actually an unenforceable penalty provision under Idaho contract law. As the
Commission itself has repeatedly held, there is no basis for the Commission's adjudication of the
complex factual and legal issues that arise in such contractual matters.
In sum, therefore, the Commission should dismiss the case for lack of subject matter
jurisdiction.
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
TPC-E-20-28_PAGE 13
B. The FESA Does Not Confer Jurisdiction on the Commission
The FESA for Rock Creek #2 contains a clause stating disputes will be submitted to the
Commission, but such a provision cannot confer jurisdiction on the Commission because no
statutory basis for jurisdiction exists. Specifically, in the Rock Creek #2 FESA, Section 21.1
provides: "Disputes - All disputes related to or arising under this Agreement, including, but not
limited to, the interpretation of the terms and conditions of this Agreement, will be submitted to
the Commission for resolution." Idaho Power's Answer and Cross Complaint, at Attachment 2, $
2I.2. As explained below, this provision does not support jurisdiction over the contractual
damages dispute at issue.
It is a basic tenet of administrative law that the parties cannot confer jurisdiction upon an
administrative agency by consent. "An administrative agency cannot enlarge its own jurisdiction,
nor canjurisdiction be conferred upon the agency by parties before it; thus, deviations from an
agency's statutorily established sphere of action cannot be upheld based upon an agreement,
contract, or consent of the parties." 2 Am. Jlur.2dAdministrative Law $ 283 (2004). In short, "[n]o
action of the parties can confer subject-matter jurisdiction on an administrative tribunal." Id.;
accord ldaho Power Co. v. Idaho Pub. Utils. Comm'n,102 Idaho 744,750,639P.2d442,448
(1981) (holding that "'administrative authorities are tribunals of limited jurisdiction and
their jurisdiction is dependent entirely upon the statutes reposing power in them and they cannot
confer it upon themselves,"') (quoting Wash. Water Power Co. v. Kootenai Envtl. All.,99Idaho
875,879, 591P.2d 122, 126 (1979) (emphasis n ldaho Power Co.)); see also H & Y Engineers,
Inc. v. Idaho State Bd. Of Profl Eng'rs & Land Surveyors, 113 Idaho 646, 648,747 P.zd 55, 57
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, [NC.'S MOTION TO
DISMISS
LPC-E-20-28 - PAGE 14
(1987) (holding that "parties cannot confer jurisdiction upon the court by stipulation, agreement,
or estoppel").
The Commission itself acknowledged this rule of law in the order approving the FESA at
issue for Rock Creek #2. Ilapproving the Rock Creek #2 FESA, the Commission stated:
The Commission reminds the parties that jurisdiction may not be conferred on the
Commission by contractual stipulation. The authority and jurisdiction of the
Commission is restricted to that expressly and by necessary implication conferred
upon it by enabling statutes. (reference: Agreement P 2l.l Disputes.)
In Re Application of ldaho Power Co. for an Order Approving a Firm Energt Sales Agreement
with Bonneville Pac., Corp.,IPUC CaseNo. U-1006-297, OrderNo. 2136l,1987Ida. PUC LEXIS
l5l, *2 (July l, 198T.7 In other words, just because the parties might agree to submit the dispute
to the Commission for resolution, as Idaho Power has done here, the Commission appropriately
recognized that it generally will have no jurisdiction over such disputes and will decline to resolve
the dispute if such jurisdiction is lacking. Additionally, the Rock Creek #2 FESA also states it is
not final until approved by the Commission, and therefore the Commission's own order and
qualifications during such approval must be interpreted with the FESA. Idaho Power's Answer
and Cross Complaint, at Attachment 2,5 23.
Thus, by signing the FESA, no party waived any future objections to the Commission's
jurisdiction over any particular dispute. In accordance with the Commission's own order
' Notably, the Commission's order approving the FESA for Wood Hydro's Mile 28 QF contains the
same disclaimer as to the effect of the dispute resolution clause in Mile 28's FESA. In Re the Approval of
a Firm Energt Sales Agreernent Between ldaho Power Co. and Contractor's Power Group, Inc.,lPlJC
Case No. IPC-E-93-25, Order No. 25354, 1994 lda. PUC LEXIS 6, *2 (Jan. l, 1994). The FESA for the
third QF in this case, Lowline #2, does not appear to contain such a dispute resolution clause. Idaho
Power's Answer and Cross Complaint at Attachment No. 3.
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
TPC-E-20-28_PAGE 15
approving the Rock Creek#2 FESA, the dispute resolution clause adds nothing to the jurisdictional
analysis in this case, which instead turns solely on the Commission's enabling statutes.
Furthermore, the Idaho Supreme Court declined to frnd jurisdiction under the same type of
dispute resolution provision in the FESA in Cogeneration I. As Justice Silak noted in her
concrurence in that case, the FESA contained the same type of dispute resolution provision as
those at issue in this proceeding. Cogeneration I,l29Idaho at 50 (Silak, J., concurring). Yet the
Court nevertheless held the Commission improperly exercised jurisdiction over the contact
dispute. Cogeneration I, 129 Idaho at 49.
In sum, the FESA's dispute resolution clause does not establish the Commission's
jurisdiction to resolve this case.
C. The Decision in ldaho Power Co. v. New Energt Two ls Inapposite and Does
Not Apply llere
Although Idaho Power may argue otherwise, the Idaho Supreme Court's decision affirming
the Commission's assertion of jurisdiction in ldaho Power Co. v. New Energt Two, LLC, 156
Idaho 462,328P.3d 442 (2014), does not support a finding ofjurisdiction over the damages claim
at issue here. The finding ofjurisdiction over a QF contact dispute in that case is distinguishable.
In New Energt Two, a dispute between Idaho Power and trvo dairy digester QFs arose
related to the interconnection process and the force majeure provisions of the FESAs. See In re
Complaint and Petition of ldaho Power Co.for a Declaratory Order Regarding Firm Energt Sales
Agreement and Generator Interconnection Agreement with New Energt Two, LLC et. al,IPUC
CaseNos. IPC-E-12-25, IPC-E-12-26,Order No.32755, at2-4 (March 5,2013). At the time of
the complaint at the Commission in New Energt Two, the QFs had still not even obtained
interconnection agreements, and thus the dispute arose from the interconnection process itself,
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
LPC-E-20-28-PAGE 16
which is unquestionably a matter within the Commission's PURPA regulatory purview. Id. at2-
5; 18 C.F.R. 5 292.303(c), $ 292.306. In conhast here, the contactual disputes are limited to
contactual damages for alleged breaches under the FESAs and have nothing to do with the
Commission's authority to regulate the interconnection process.
Additionally, the QF's claim of force majeure inNew Energt Twowasbased on the impact
caused by other ongoing PURPA proceedings before the Commission. Order No. 32755 at2-5.
The Commission ultimately concluded: "Because New Energy's force majeure allegation arises
from Commission proceedings, we find that the Commission is well-suited to review these
allegations." Id. at 12. In contast here, there is no ongoing proceeding before the Commission
that overlaps with the facts in dispute.
On appeal in New Energt Two, the ldaho Supreme Court affirmed the Commission's
exercise ofjurisdiction under the facts and arguments presented, relying primarily on the dispute
resolution clause in Section 19.1 of the FESAs, which similar to the clause here stated that all
disputes would be submitted to the Commission. See New Energt Two, 156 Idaho at 465.
However, the Court explained: 'New Energy does not even address section 19.1 in its briefing,
nor does it dispute that the language of the provision would include determining whether the
claimed force majeure was within the scope of the force majeure clause in the agreements." Id. at
464. Given that New Energy presented no argument or authority on the point on appeal, the Court
logically held "the Commission did not err in holding that the interpretation of the agreements was
within the scope of section l9.l ." Id.8 Thatvery limited decision hardly stands for the proposition
8 Alttrough not stated in the New Energt Zwo decision, it is well established that a party waives an
argument on appeal if it fails to present argument and authority in support of its position. Bach v. Bagley,
148 Idaho 784,790,229 P.3d,1146,1152 (2010) (citing Idaho App. R. 35(a)(6)).
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
[PC-E-20-28 -PAGE 17
that such dispute resolution clauses will always be found to confer jurisdiction on the Commission
over every contractual dispute, let alone to award damages. In any event, Enel specifically disputes
the applicability of the dispute resolution clause in this case with both argument and authority.
Although the Supreme Court's New Energt Zwo decision also quoted the Commission's
alternative determination that it had statutory jurisdiction in that case, the discussion of statutory
jurisdiction was dicta and ancillary to reliance on the dispute resolution clause. New Energt Two,
LLC, 156 Idaho at 465 . Even if not dicta, the discussion of statutory jurisdiction held, at most, that
the Commission has jurisdiction "to determine whether a regulated utility has an obligation under
PURPA to purchase power from an applicant." 1d. (quoting Empire Lumber Co. v. Washington
WaterPowerCo.,ll4ldahot9l,192,755P.2d1229,1230(1987)(emphasisremoved)). Because
that was the "central issue" in New Energt Two - where the two proposed QFs had not yet even
achieved commercial operation or even completed the interconnection process overseen by the
Commission - the Court analogized to Empire Lumber, which regarded a dispute over whether a
QF developer had "perfected its entitlement" to a contract to sell power. Empire Lumber, ll4
Idaho atl93. However, that analogy does not fit here where the dispute regards interpretation and
enforcement of FESAs arising from a damages claim occurring decades after the QFs began
operating under their contracts.
Simply put, the New Energt Zwo decision's limited reliance on the dispute resolution
clause in that case - which was apparently uncontested on appeal - does not apply here. Nothing
in New Energt Zwo holds that the Commission has jurisdiction over a purely contractual dispute
regarding the legality of liquidated damages or applicability of contractual and equitable
affirmative defenses, much less any authority to issue the equivalent of a judgment requiring QFs
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
TPC-8.20-28-PAGE 18
to pay a regulated utility over seven million dollars in damages. The New Energt Zwo decision is
therefore inapposite to the circumstances here.
D. In the Alternativeo if the Commission Determines It Could Exercise
Jurisdictionn the Commission Should Defer Any Exercise of Jurisdiction
Finally, in the alternative, Enel respectfully requests that the Commission decline to
exercise whatever jurisdiction it concludes it might have over this dispute.
The Commission has recognized the need to exercise restraint even where it might arguably
have some jurisdiction over a contractual dispute. In Cogeneration I, the Commission explained:
"Determining when to exercise our jurisdiction is often predicated on an attitude of self-restraint
and a determination of the most appropriate forum." Cogeneration,Inc., OrderNo. 25918, 1995
Ida. PUC LEXIS 31, *9. In another QF dispute where the claim was premised 'oon the basis of
either estoppel or some other contractual or quasi-contractual remedy," the Commission
determined "the decision will involve ruling on contractual law which is ordinarily a matter of
judicial determination." Faullcner Land and Livestock Co., Inc. v. Idaho Power Co., IPUC Case
No. U-1006-274, Order No. 20362, 1986 Ida. PUC LEXIS 63, *15-16 (April 1, 1986). The
Commission confirmed, o'A long line of cases suggests to the Public Utilities Commission that
when there is, at best, concurrent jurisdiction in the Public Utilities Commission of a matter that
is normally handled in the courts, the fact that it is tangentially related to public utility commission
law does not give us primary jurisdiction; that jurisdiction should still lie in the courts." .Id.
Similarly, in the Commission's proceeding to develop the security provisions for levelized
payment liability which are at issue in this very case, the Commission confirmed that contract
disputes should be resolved in the courts. See In Re Investigation on the Commission's Own
Motion of Reasonable Terms for Security in Agreements Between ldaho Power Co. and
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
LPC-E-20-28 - PAGE 19
Cogenerators and Small Power Producers,IPUC Case No. U-1006-292,Order No. 21800, 1988
Ida PUC LEXIS 6 (March 1, 1988). On rehearing, PacifiCorp asked the Commission to clarifu:
"[w]ho will decide disputes regarding the escrow funds" used for security purposes. Id. at*4. The
Commission responded, "Contract disputes and interpretation in the event of alleged default or
breach are normally appropriate for judicial determination, not Commission determination." Id.
(emphasis added).
Moreover, the Commission's assertion ofjurisdiction over any part of this dispute would
almost certainly lead to piecemeal litigation because the courts would have to resolve aspects of
the case beyond whatever concurrentjurisdiction the Commission might have. The Idaho Supreme
Court has "emphasized the desirability of avoiding piecemeal litigation," which does "a disservice
to the litigants and the trial courts of this state." Losser v. Bradstreet,l45Idaho 670,674-75, 183
P.3d 758, 762-63 (2008). As the Commission's own prior orders demonstrate, there is no question
the Commission lacks jurisdiction to adjudicate the equitable defenses that will arise in this
proceeding or to assess or award damages, and therefore the Commission's assertion ofjurisdiction
over some aspects of this case would almost certainly result in the added expense and burden of
piecemeal litigation.
Accordingly, even if the Commission may determine it might have jurisdiction over some
aspect of this dispute, it should defer taking up the matter because the factual and legal issues in
dispute would be best resolved in a judicial forum. There is no question the courts have jurisdiction
to adjudicate the entire dispute in the case of a claims of liquidated damages for levelized-rate
overpayment. See Idaho Power Co. v. Glenns Ferry Cogeneration Partners, LTD, U.S. District
Court No. I : 1 I -cv-00565-CWD, Doc. I , fl 4 (Nov. 15,201I ) (Idaho Power's complaint for breach
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
LPC-E-20-28 - PAGE 20
of contract and damages for levelized-rate overpayment against a QF, which asserts the district
court has jurisdiction). As the Commission has repeatedly held, matters of this type should be
deferred for resolution in the courts.
TV. CONCLUSION
For the reasons set forth above, the Commission should dismiss this case for lack of
jurisdiction, or in the alternative, decline to exercise jurisdiction it may determine it has over the
dispute.
DATED this l7th day of September 2020.
RICHARDSON ADAMS, PLLC
lsl Gregory M. Adams
Gregory M. Adams (ISB No. 7454)
Peter J. Richardson (ISB No. 3195)
515 N. 27ft Street
Boise,Idaho 83702
Telephone: [phone]
Fax [phone]
[e-mail]
peter@richardsonadams. com
Attorneys for Cross-Respondent Enel Green Energy
North America, Inc.
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
LPC-E-20-28 - PAGE 2l
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 176 day of September 2O2O,I delivered true and
correct copies of the foregoing Motion to Dismiss and Declaration in Support of Motion to
Dismiss to the following parties via electronic mail:
JanNoriyuki
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise,ID 83720-0074
j an.noriyuki@puc. idaho. gov
Edward Jewell
Deputy Attorney General
Idaho Public Utilities Commission
P.O. Box 83720
Boise,ID 83720-0074
edward j [e-mail]. gov
Tom Arkoosh
Stacie Foor
Arkoosh Law Offices
802 W. Bannock Street, Ste. LP 103
P.O. Box 2900
Boise,ID 83701
tom. arkoosh@arkoosh. com
stacie. foor@arkoosh. com
Preston Carter
Givens Pursley LLP
P.O.Box2720
Boise,ID 83701
preston. carter@givenspursley. com
Donovan Walker
Lead Counsel
Idaho Power Company
P.O. Box 70
Boise,ID 83707
dwalker@idahopower. com
Dated: September 17, 2020
By: lsl Greqorv M. Adam.s
Gregory M. Adams
CROSS-RESPONDENT ENEL GREEN POWER NORTH AMERICA, INC.'S MOTION TO
DISMISS
IPC-E-20-28 _PAGE 22