832 September 10, 2026 No. 862
This is a nonprecedential memorandum opinion pursuant to ORAP 10.30 and may not be cited except as provided in ORAP 10.30(1).
IN THE COURT OF APPEALS OF THE STATE OF OREGON
NEWSUN ENERGY LLC,
Petitioner,
v.
PUBLIC UTILITY COMMISSION OF OREGON;
Portland General Electric; PacifiCorp, dba Pacific Power; and Idaho Power Company, Respondents.
Public Utility Commission of Oregon UM2032; A184078
Argued and submitted April 22, 2026. Jonathan Harlan argued the cause for petitioner. On the briefs were Richard G. Lorenz, Casey M. Nokes, Tyler R. Whitney, and Cable Huston LLP.
Jordan Silk, Assistant Attorney General, argued the cause for respondent Public Utility Commission of Oregon. Also on the brief were Dan Rayfield, Attorney General, and Benjamin Gutman, Interim Deputy Attorney General.
Jordan R. Schoonover argued the cause for respondents Portland General Electric Company, PacifiCorp, dba Pacific Power, and Idaho Power Company. Also on the brief were Adam Lowney and McDowell Rackner Gibson PC.
Before Aoyagi, Presiding Judge, Lagesen, Chief Judge, and Egan, Judge.* AOYAGI, P. J. Reversed and remanded.
______________
* Lagesen, Chief Judge, vice Pagán, Judge.
Nonprecedential Memo Op: 352 Or App 832 (2026) 833
AOYAGI, P. J. Petitioner NewSun Energy, Inc. (NewSun)
seeks judicial review of a final order of the Public Utility Commission of Oregon (PUC) approving compliance filings by Idaho Power, PacifiCorp, and Portland General Electric (collectively, Joint Utilities). In Order No. 23-005, the PUC decided to experiment with allowing qualifying facilities (QFs) under the Public Utility Regulatory Policies Act of 1978 (PURPA) and its state counterpart to utilize energy resource interconnection service (ERIS) under certain circumstances , whereas they have historically been required to use network resource interconnection service (NRIS) to connect to utility transmission systems. The order contemplated the possibility of later compliance filings, and the Joint Utilities subsequently made compliance filings. The PUC approved those filings with two modifications. NewSun appeals, raising five assignments of error. As explained below, we conclude that the order on review lacks substantial reason in one regard. We therefore reverse and remand.
Background. The PUC has authority to conduct an investigation that it “believes * * * should be made” into “any matter relating to any public utility or telecommunications utility or other person.” ORS 756.515(1). In this case, the PUC opened a docket to investigate “the treatment of network upgrade costs for QFs,” and it decided to use a contested case proceeding, rather than rulemaking. The initial issue addressed was the scope of the investigation. An administrative law judge (ALJ) ultimately settled on two questions to be addressed. The first was who would be required to pay for network upgrades necessary to interconnect a QF with a host utility. The second was: “Should on-system QFs be 0F1
required to interconnect to the host utility with [NRIS] or should QFs have the option to interconnect with [ERIS] or an interconnection service like ERIS?”
The ALJ conducted extensive proceedings on those two questions. The PUC then issued Order No. 23-005. Its answer to the first question is not relevant to this appeal. As 1 The process adopted contemplated a potential “second phase” of the docket, depending on how the first question was answered. The first question was ultimately answered in such a manner that a second phase did not occur.
834 NewSun Energy LLC v. Public Utility Comm.
to the second question, the PUC took a middle path. The Joint Utilities opposed allowing ERIS connection, and PUC staff recommended against it, while NewSun and other parties advocated for it. The PUC concluded that “QFs should interconnect with NRIS with a limited exception.” Essentially, the PUC felt that it did “not yet have sufficient information to determine that every on-system QF should have a right to choose ERIS without other changes to our construct for administering PURPA,” but it also recognized “the value of more efficiently optimizing the existing transmission system ” and therefore wanted to experiment with allowing “QFs to utilize ERIS under certain circumstances” so as to gain “some experience.” The PUC described its approach as an “experiment” with “voluntary arrangements between QFs and utilities that allow for more efficient use of the existing transmission system at a time of increasing constraints.”
“To facilitate further assessment about how on-system QF interconnection with ERIS would work and what efficiencies may be gained, but with lower risks,” the PUC “adopt[ed] NewSun’s suggestion to allow any on-system QF to choose to be studied for both ERIS and NRIS, at the QF’s expense.” Order No. 23-005 ends with two “orders” regarding the ERIS experiment. First, the PUC directed the Joint Utilities “to develop and make filings, as necessary, to facilitate a QF’s ability to pay for both ERIS and NRIS analysis.” Second, the PUC directed the Joint Utilities “to negotiate a non-standard contract implementing a QF’s decision, after review of both ERIS and NRIS reports, to interconnect with a host utility using ERIS, so long as the QF voluntarily commits to allow curtailment at a level that obviates the need for the Network Upgrades identified in a NRIS report.” A third order regarding the ERIS experiment appears in the “Summary” of Order No. 23-005: The PUC directed the Joint Utilities “to make any filings necessary to allow this process to go forth as described in this order” and “invite[d] petitions to modify any tariffs or contracts, as necessary, if not brought forward by a utility within a reasonable timeframe following this order.”
We affirmed Order No. 23-005 in NewSun Energy LLC v. Public Utility Comm., 337 Or App 79 (2024)
Nonprecedential Memo Op: 352 Or App 832 (2026) 835
(nonprecedential memorandum opinion), rev den, 373 Or 736 (2025). 1F 2
Meanwhile, in the same docket, the Joint Utilities made compliance filings, in which, among other things, they proposed a process for the non-standard contract negotiation contemplated by Order No. 23-005. Under that process, a QF who reviews the ERIS and NRIS reports and decides to use ERIS must negotiate and enter into a power purchase agreement (PPA) with the utility before signing an interconnection agreement. We will refer to that herein as the early-PPA requirement. As we understand it, the early-PPA requirement substantially changes the normal sequence of events, in which interconnection agreement negotiations and PPA negotiations proceed on separate tracks and different commercial readiness milestones govern their timing.
In its comments on the compliance filings, NewSun objected to the early-PPA requirement, largely raising the same points now argued on review. NewSun argued that such a requirement was unnecessary, that it would violate PURPA, that the PUC should open a separate docket to address the issue, that stakeholders had not had the opportunity to fully present arguments or evidence on the issue, and that the requirement would unduly burden QFs by making them agree to the sale of power on particular terms before having knowledge of the complete terms of interconnection.
The PUC issued a Staff Report on January 3, 2024, in which staff recommended approving the compliance filings with two modifications, only one of which is relevant here. The Staff Report describes the filings as “largely compliant with Order 23-005.” As to the early-PPA requirement , the Staff Report acknowledges the concerns raised by NewSun and others, including concerns that the early-PPA requirement would give the utilities too much leverage in negotiations and that QFs would be forced to start negotiating a PPA with inadequate information. The Staff Report discusses those concerns, along with the countervailing 2 Several parties sought clarification from the PUC as to certain aspects of Order No. 23-005, which led to the PUC issuing Order No. 23-164. That order is not relevant to our discussion.
836 NewSun Energy LLC v. Public Utility Comm.
concerns driving the proposed requirement, and describes 2F3
staff as having “considered both compliance with the letter of the Commission order and whether the proposal appears workable enough to be put to the test.” Ultimately, staff recommended extending the timeline to execute an interconnection agreement by 60 days, with optional additional 30-day extensions, so as to “relieve timeline pressure for the PPAs and help ensure sufficient information for QF decisions to proceed.” Staff explained that, although “a timeline extension will impact other generators with delay and uncertainty,” that was true of other solutions as well, so staff chose to focus “on increasing the likelihood that viable PPAs and [interconnection agreements] will be executed.” The only other “solution” expressly considered was a PPA grace period, which staff had initially favored but ultimately rejected.
The PUC approved the Joint Utilities’ compliance filings with, as relevant here, a modification that the utilities would allow a minimum of 120 days to negotiate a non- standard PPA after receiving a QF’s draft interconnection agreement, with optional additional 30-day extensions upon agreement of both parties. NewSun appeals, raising five assignments of error.
Standard of review. We review PUC orders in the same way as orders of other administrative agencies in contested cases. ORS 756.610(1)(a). We review for legal error and whether the order is “supported by substantial evidence in the record.” ORS 183.482(8)(a), (c); Calpine Energy Solutions LLC v. PUC, 298 Or App 143, 156, 445 P3d 308 (2019) (Calpine). “[O]ur review is ‘confined to the record,’ and we will ‘not substitute [our] judgment for that of the [PUC] as to any issue of fact or agency discretion.’ ” Calpine, 298 Or App at 156 (quoting ORS 183.482(7)).
“As part of our substantial evidence review, we also review the PUC’s order for substantial reason.” Id. Doing so is consistent with ORS 756.558(2), which requires the PUC 3 According to the Joint Utilities, the early-PPA requirement is necessary because the utility cannot break an interconnection agreement once entered. NewSun appears to challenge the legitimacy of that concern and related concerns about congestion in the interconnection queue and interconnection studies, at least in part based on the lack of an evidentiary record related to the compliance filings.
Nonprecedential Memo Op: 352 Or App 832 (2026) 837
to “prepare and enter findings of fact and conclusions of law upon the evidence received in the matter” and to “make and enter the order of the commission thereon.” To meet that statutory obligation, “[t]he recitation of findings must be sufficiently specific in order that the reviewing court does not have to delve into the record to discern the inferences the commission[ ] may have drawn in arriving at [its] conclusion.” Calpine, 298 Or App at 258 (internal quotation marks omitted ); see also Utility Reform Project v. PUC, 215 Or App 360, 372, 170 P3d 1074 (2007) (“The order, however, must contain sufficient findings and conclusions to enable us to determine that the reasoning is rational and that [the] PUC acted within its grant of power.” (Internal quotation marks omitted.)).
First assignment of error. NewSun challenges the PUC’s use of a contested case proceeding, instead of rulemaking, as procedurally improper. Because that issue was not raised below, we decline to address it. See Wolff v. Board of Psychologist Examiners, 284 Or App 792, 802, 395 P3d 44 (2017) (preservation requirements apply on judicial review of agency actions); ORAP 5.45(1) (setting out preservation requirement).
Second, third, and fourth assignments of error.
NewSun argues that the PUC “erred by allowing the Joint Utilities to unilaterally impose conditions exceeding the scope of the contested case briefing in UM 2032 in violation of ORS 183.482(8)(b),” by not making findings to support its conclusion as required by ORS 758.558(2), and by issuing an order not supported by substantial evidence and reason. To the extent that the Joint Utilities challenge preservation, we have considered their arguments and conclude that the issues are adequately preserved for judicial review.
On NewSun’s second and fourth assignments, we agree that the order on review is not supported by substantial reason in that it fails to address NewSun’s procedural objections. A variety of provisions may apply to full-fledged investigations like the one here, including, inter alia, ORS 756.500 to 756.558; the contested-case provisions of the Administrative Procedures Act, ORS 183.310 to 183.750; the PUC’s procedural rules, OAR 860-001-0000 to 860-001-0720; and the PUC’s Internal Operating Procedures adopted in 838 NewSun Energy LLC v. Public Utility Comm.
Order No. 20-386. Those sources of law require particular procedures to be followed. As stated in the Internal Operating Procedures, “The Commission acts in a quasi-judicial capacity * * * where the Commission has determined to use trial -like procedures to investigate a particular matter. In these cases the Commission must base its decisions exclusively on an evidentiary record developed in a trial-like proceeding.” PUC Order No. 20-386, Appendix A, at 15 (footnote omitted).
Here, NewSun argued, among other things, that the early-PPA condition proposed in the compliance filings exceeded the scope of the investigation and was raised after the evidentiary record had closed. The PUC did not address any of NewSun’s procedural objections in the order on review. The order therefore lacks substantial reason in that regard. 3F4
See Genova v. Veterinary Medicine Examining Board, 282 Or App 234, 240, 386 P3d 40 (2016) (reversing for lack of substantial reason where “the board failed to adequately address why it rejected petitioner’s argument”); Sachdev v. Oregon Medical Board, 312 Or App 392, 405, 494 P3d 1018, rev den, 368 Or 637 (2021) (in reviewing for substantial reason, we “must ensure that the agency gave responsible attention to its application of the governing statute,” even when the agency is exercising discretion (internal quotation marks and brackets omitted)). We reverse and remand so that the PUC may address those issues. Given that disposition , we do not address the third assignment, regarding the alleged inadequacy of the existing factual findings.
Fifth assignment of error. In its final assignment of error, NewSun argues that the order on review “violates the substantive provisions of PURPA and Oregon’s ‘mini- PURPA’ statute.” We express no opinion on that issue at this time. It is possible that the remand could result in additional proceedings, including the taking of more evidence. Even if it does not, at a minimum, the remand will result 4 In their briefing on appeal, the Joint Utilities suggest that the part of the docket addressing the compliance filings was not limited to the issues identified as the subject of the proceeding at the start; they seem to argue that the PUC was free to address any issue, not just “the two initial questions posed for the docket.” Similarly, they contend that, in considering the compliance filings, the PUC was free to consider and make findings based on additional information, notwithstanding the lack of any procedure for taking evidence. They do not tie their arguments to the applicable procedural laws.
Nonprecedential Memo Op: 352 Or App 832 (2026) 839
in an order containing additional reasoning that we would want to take into account.
Reversed and remanded.