Franklin Energy Storage One, LLC v. Kjellander

CourtDistrict Court, D. Idaho
DecidedJanuary 17, 2020
Docket1:18-cv-00236
StatusUnknown

This text of Franklin Energy Storage One, LLC v. Kjellander (Franklin Energy Storage One, LLC v. Kjellander) is published on Counsel Stack Legal Research, covering District Court, D. Idaho primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Franklin Energy Storage One, LLC v. Kjellander, (D. Idaho 2020).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF IDAHO

FRANKLIN ENERGY STORAGE ONE, LLC, Case No.: 1:18-cv-00236-REB FRANKLIN ENERGY STORAGE TWO, LLC, FRANKLIN ENERGY STORAGE THREE LLC, FRANKLIN ENERGY STORAGE FOUR, LLC,

Plaintiffs, MEMORANDUM DECISION AND vs. ORDER RE: MOTIONS TO DISMISS AND CROSS-MOTIONS FOR PAUL KJELLANDER, KRISTINE RAPER, and SUMMARY JUDGMENT ERIC ANDERSON, in their official capacity as Commissioners of the IDAHO PUBLIC (DKTS. 24, 39, 40, 42) UTILITIES COMMISSION,

Defendants,

and,

IDAHO POWER COMPANY,

Defendant-Intervenor.

SUMMARY OF DECISION The Plaintiffs propose to build small power production facilities utilizing batteries to store power from renewable energy sources and then release such stored power to the power grid. The Plaintiffs have certified in filings made with the Federal Energy Regulatory Commission (“FERC”) that their facilities are so-called “Qualifying Facilities,” specifically “energy storage Qualifying Facilities.” Qualifying Facilities, under provisions of the federal Public Utility Regulatory Policies Act of 1978 (known as “PURPA”), are entitled to sell power to an electric utility (here, Defendant-Intervenor Idaho Power Company) and electric utilities are required to buy such power on contract terms set by the state’s public utility commission (here, the Idaho Public Utilities Commission, or the “IPUC”). Plaintiffs allege that the orders of the Defendant Commissioners of the IPUC exceeded their jurisdictional authority under PURPA by acting to classify Plaintiffs’ facilities; that is, to decide whether such facilities were Qualifying Facilities and in classifying such facilities differently than the “energy storage Qualifying

Facilities” classification described in Plaintiffs’ FERC filings. The Court agrees with the Plaintiffs that the IPUC Commissioners exceeded their jurisdictional authority under PURPA and acted in violation of applicable federal law. The Court enjoins any attempt by the Commissioners to enforce the Commissioners’ orders in which they acted in excess of their jurisdiction and the Court further orders the Commissioners to comply with the rulings set out in this decision in any future proceedings of the IPUC involving Plaintiffs’ energy storage facilities. I. BACKGROUND The Court decides here the following:

1. Plaintiffs’ Motion for Summary Judgment (Dkt. 24); 2. Defendant-Intervenor Idaho Power’s Motion for Summary Judgment (Dkt. 39); 3. Defendant-Intervenor Idaho Power’s Motion to Dismiss for Lack of Jurisdiction (Dkt. 40); and 4. Defendants’ Motion to Dismiss or in the Alternative Cross-Motion for Summary Judgment (Dkt. 42). Plaintiffs Franklin Energy Storage One, LLC, Franklin Energy Storage Two, LLC, Franklin Energy Storage Three, LLC, and Franklin Energy Storage Four, LLC,1 bring this civil action to enforce federal statutes within the Federal Power Act (“FPA”) and the Public Utility Regulatory Policies Act of 1978 (“PURPA”) and regulations implementing PURPA promulgated by the Federal Energy Regulatory Commission (“FERC”). FAC ¶ 21 (Dkt. 2). Plaintiffs asked

FERC to bring an enforcement action against Defendants and filed this lawsuit after FERC issued a notice that it would not do so. Id. ¶¶ 1–3, 29–30. Because FERC declined to take up the matter, Plaintiffs have standing to bring their own enforcement action directly. Id. ¶¶ 2, 33; 16 U.S.C. § 824a-3(h)(2)(B). Plaintiffs contend that the Idaho Public Utilities Commission (the “IPUC”), through its Defendant Commissioners Paul Kjellander, Kristine Raper, and Eric Anderson,2 issued a series of orders that overreach IPUC’s authority under PURPA because the IPUC improperly classified Plaintiffs’ Qualifying Facilities (“QFs”) in a manner that can only be done by FERC. FAC ¶ 6 (Dkt. 2). The dispute between the parties also touches upon long-standing prior orders of the

IPUC which give different treatment to QFs, for purposes of the IPUC’s responsibilities under PURPA, based upon whether their QF classification was that of (1) wind or solar; or (2) “other QFs.” Id. ¶ 8. Solar and wind QFs are entitled to two-year contracts at negotiated rates, while

1 After the motions resolved in this decision became at issue, Plaintiffs filed a “Notice of Merger and Name Change and Supplemented Corporate Disclosure Statement Supplement” (Dkt. 61) indicating that “each of the Plaintiff LLCs were merged into a newly created LLC known as the Franklin Solar LLC, an Idaho limited liability company.” The Notice indicated that the Plaintiffs’ “change in corporate status does not alter any of the legal positions or arguments presented to the court.” This decision refers to Plaintiffs as they were constituted prior to the merger. 2 The decision refers in some instances to the Defendant Commissioners and sometimes to the “IPUC” for convenience and readability, even though it is only the commissioners of the IPUC, but not the IPUC itself, who are the Defendants in this action. everything else – the “other QFs” – are entitled to twenty-year contracts and more favorable published nonnegotiable rates. Id. As expressly allowed by PURPA, each Plaintiff previously self-certified its proposed facility as a “small power production facility” by filing FERC Form 556, pursuant to 18 C.F.R. § 292.207. To qualify for such status, the entity was required to certify on Form 556 that the

proposed facility complied with FERC requirements for size and fuel use. 18 C.F.R. §§ 292.203, 292.204. Each Form 556 filed by Plaintiffs described in paragraph 6a that the primary energy input is “Renewable resources (specify) – Other renewable resource” and further specified in paragraph 7h that the project is an “energy storage system” that will “receive 100% of its energy input from a combination of renewable energy sources such as wind, solar, biogas, biomas [sic], etc.” FERC Forms 556 (Dkts. 4-8 through 4-11). Plaintiffs proposed to sell the power output from their facilities to Defendant-Intervenor Idaho Power under the terms available to “other QFs.” FAC ¶ 9 (Dkt. 2). In response, Idaho Power sought a declaratory judgment from the IPUC, asking the IPUC to treat the Plaintiffs’

facilities not as “other QFs” (entitled to twenty-year contracts and more favorable rates) but instead as solar QFs (entitled only to two-year contracts at less favorable rates). Id. ¶ 10. The IPUC agreed and granted Idaho Power’s petition. Id. ¶ 12. In doing so, Plaintiffs contend, the Commissioners acted outside of their proper authority. Consistent with their Form 556 certifications, Plaintiffs describe their projects as energy storage facilities that store energy power in batteries. Plaintiffs state that stored energy is provided to the grid at a later time. Solar panels are identified as the initial source of power going into the batteries; however, Plaintiffs contend that the projects are nonetheless properly classified as energy storage QFs, not as solar QFs. Id. ¶ 9. The parties agree that PURPA vests FERC with exclusive authority to decide whether an entity qualifies for QF status and the nature of such QF status. Plaintiffs contend the IPUC overstepped its jurisdictional bounds by doing exactly what PURPA reserves to FERC and does not allow the IPUC to do – i.e., classifying Plaintiffs’ energy storage systems differently (as “solar QFs”) despite Plaintiffs’ prior self-certified status as “energy storage QFs.” Plaintiffs

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Franklin Energy Storage One, LLC v. Kjellander, Counsel Stack Legal Research, https://law.counselstack.com/opinion/franklin-energy-storage-one-llc-v-kjellander-idd-2020.