Allco Renewable Energy Ltd. v. Massachusetts Electric Co.

875 F.3d 64
CourtCourt of Appeals for the First Circuit
DecidedNovember 13, 2017
Docket17-1296P
StatusPublished
Cited by20 cases

This text of 875 F.3d 64 (Allco Renewable Energy Ltd. v. Massachusetts Electric Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allco Renewable Energy Ltd. v. Massachusetts Electric Co., 875 F.3d 64 (1st Cir. 2017).

Opinion

TORRUELLA, Circuit Judge.

This case arises from the efforts of Allco Renewable Energy Limited (“Allco”) to enforce section 210 of the Public Utility Regulatory Policies Act (“PURPA”), 16 U.S.C. § 824a-3, against Massachusetts Electric Company d/b/a National Grid (“National Grid”). The district court dismissed Allco’s claim against National Grid because section 210 does not provide a private right.of action against utility companies (such as National Grid). The district court was correct, so we affirm that dismissal. Allco also appeals the district court’s denial of its motion for additional relief against various Massachusetts Department of Public Utilities (MDPU) officials (collectively, the “state defendants”) after the district court invalidated certain MDPU regulations as inconsistent with PURPA. The district court did not abuse its discretion in doing so, so we affirm that decision as well.

I. BACKGROUND

A.

We begin with an overview of the statutory scheme at the heart of this case. Congress passed PURPA. in 1978 in response to the ongoing energy crisis that plagued the nation. FERC v. Mississippi, 456 U.S. 742, 745, 102 S.Ct. 2126, 72 L.Ed.2d 532 (1982). Section 210 of PURPA seeks to lessen the United States’ reliance on oil and natural gas by encouraging the development of energy-efficient cogeneration and small power production facilities. Id. at 750, 102 S.Ct. 2126. See 16 U.S.C. § 824a-3. “Cogeneration facilities capture otherwise-wasted heat and turn it into thermal energy; small power-production facilities produce energy (fewer than 80 megawatts) primarily by using ‘biomass, waste, renewable resources, geothermal resources, or any combination thereof.’” Portland Gen. Elec. Co. v. FERC, 854 F.3d 692, 695 (D.C. Cir, 2017) (quoting 16 U.S.C. § 796(17)). Both of these categories of facilities are known as “qualifying facilities” (“QFs”) under PURPA.

Congress found' that traditional electric utilities’ reluctance to transact with these nontraditional facilities posed an obstacle to facilitating their development.. FERC, 456 U.S. at 750, 102 S.Ct. 2126. It sought to address this by requiring utilities to do so. Thus, section 210(a) of PURPA directed the Federal Energy Regulatory Commission (“FERC”) to promulgate rules mandating that electric utilities purchase energy from QFs. 16 U.S.C. § 824a-3(a). Those rules, section 210(b) specified, were not to “provide for a rate which exceeds the incremental, cost to the electric utility of alternative electric energy.” Id § 824a-3(b). PURPA defines “incremental cost” as “the cost to the electric utility of the electric energy which, but for the purchase from such cogenerator or small power producer, such utility would generate or purchase from another source.” Id. § 824a-3(d). In accordance with this directive, FERC promulgated regulations requiring utilities to purchase electricity from QFs “at a rate equal to the utility’s full avoided cost.” Am. Paper Inst. v. Am. Elec. Power Serv. Corp. 461 U.S. 402, 405-06, 103 S.Ct. 1921, 76 L.Ed.2d 22 (1983) (citing 18 C.F.R. 292.304(b)(2)). Crucially, given section 210’s purpose, the avoided cost rate “usually exceeds' the market price for wholesale power.” Portland Gen., 854 F.3d at 695. Additionally, section 210(f) of PURPA instructs state regulatory authorities to implement these FERC rules. 16 U.S.C. § 824a-3(f); see also Portland Gen., 854 F.3d at 695 (“Under PURPA, state utility commissions are responsible for calculating the-avoided-cost rates for utilities subject to their jurisdiction”).

Key to this case is understanding PURPA’s framework for enforcing its requirement that states implement FERC’s PURPA-implementing rules. Sections 210(g)-(h) of PURPA create “an overlapping scheme of federal and state judicial review of state regulatory action taken pursuant to PURPA.” Greenwood ex rel. Estate of Greenwood v, N.H. Pub. Utils. Comm’n, 527 F.3d 8, 10 n.1 (1st Cir. 2008). First, PURPA allows a QF to petition FERC to bring an enforcement action against a state on the grounds that the state has failed to properly implement PURPA. 16 U.S.C. § 824a-3(h). With respect to private enforcement, PURPA’s enforcement scheme contemplates two types of private actions against a state utility regulatory agency: “implementation” challenges and “as-applied” challenges. Exelon Wind 1, L.L.C. v. Nelson, 766 F.3d 380, 388 (5th Cir. 2014); Power Res. Grp., Inc., v. Pub. Util. Comm’n of Tex., 422 F.3d 231, 234-35 (5th Cir. 2005).

Implementation challenges involve claims that a state agency has failed to properly implement FERC’s regulations governing the purchase of energy from QFs. Power Res. Grp., 422 F.3d at 235. As-applied challenges, meanwhile, involve claims that a utility has failed to abide by a state’s regulations implementing PURPA. See Portland Gen., 854 F.3d at 698 (citing 16 U.S.C. § 824a-3(g)(2)). While federal district courts have exclusive jurisdiction over implementation challenges, only state courts may hear as-applied challenges. Id. Additionally, an individual seeking to bring an implementation challenge may only do so after having petitioned FERC to bring an implementation enforcement action, and only if FERC has not initiated an action within sixty days of receiving the petition. 16 U.S.C. § 824a-3(h)(2)(B).

Finally, and crucially, PURPA’s text does not make any reference to the possibility of a QF bringing any sort of action against a utility in federal court.

B.

On March 28, 2011, Allco offered to sell National Grid the entire generation output from eleven of its solar energy generating QFs located in Massachusetts. These QFs all have a production capacity between one and thirty megawatts. Consistent with Mass. Code Regs. § 8.03(l)(b)(2), Allco offered to negotiate a purchase agreement with National Grid. On April 18, 2011, National Grid declined to negotiate a contract with Allco, but offered instead to purchase Allco’s energy under its standard power purchase contract.

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875 F.3d 64, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allco-renewable-energy-ltd-v-massachusetts-electric-co-ca1-2017.