yes ok thank you my name is dan blake and i represent the plaintiff appellant smoky hills wind farm here the only issue on smokey hill's appeal is whether the court below was correct and excluding us damages invoices for curtailed energy submitted more than fifteen days after the end of the month in which occurred i will address that issue first and then time permitting i will briefly address independence's arguments that the court in correctly interpreted the definition of emergency curtail and the court incorrectly denied their counter claim related to the negative l and p now this situation is undisputed that the only provision in the contract which is a power purchase agreement that sets any specific deadline for invoicing a section nine point one and the court below found correctly that nine point one only applies to energy that was actually generated and delivered and that issue is now undisputed it was not appeal so that time limit does not appl these invoices that are issue in our appeal today therefore the question for this court is whether the district court was correct in implying a reasonable time requirement when the contract did not end when independence did not raise that issue below setting a reasonable time as fifteen days after the end of the month of the same time that was contractually stated for generated an energy invoicing for generated energy and then using that interpretation to deny payment on six of the twelve invoices submitted by plaintiff to defendant invoices for which liability was found but they were relieved of their obligation to pay the invoices due to this implied time limit that we have three points in our brief all of which we believe your attention but due to our limited time today i will focus on only two of those points that we believe are dispositive first even assuming for a time for submittal was to be implied smokey hill's substantially performed under the contract and isn't titled the compensation second that the court erred in disregarding the lack of prejudice to appeal east city of independence a lack of prejudice the court found in its other findings but ignored on the issue of these invoices that with regards  performance did you raise that to the district court we did not raise it neither side raised that issue to the district court it like validity of the contract like the validity of the signatures it was not a contested fact the only issue with regard invoices that was raised there were two was the strict application of nine point one which is for generated energy invoices to these invoices an issue on which the court correctly found that that provision does not apply and then arguably the latches argument would have potentially touched on these but latches of course assumes that the contract was complied with it's not an element of the contract issue it's an unreasonable delay issue and on that one the court also found that there had been no unreasonable delay and there was no injury to independence so specifically this issue was not raised by either side so to get but to get to a reversal which you might see you'd have to show plain error when y issue because it's a noble review of a contract interpretation question we don't believe the plane our standard applies here there's no disputed fact issues it was a sue a sponsor a raise of a legal question by the judge without opportunity to be heard on it fact finding that would be relevant to substantial performance that might not have one thing to say there's no factual disputes in the record it's another to say the facts weren't even developed on a particular legal issue well there's two issues there first relevant facts the substantial performance are undisputed the what the contract says when the invoices were submitted the steps taken in fact when we attempted below to put on additional evidence just to kind of give context around these invoices and what happened with them independents objected to that evidence and stated that they were not disputing the n voices the accuracy the calculation the amounts of them so that issue even to attempt to try to put more on was interrupted by independents at in the in the court below but not there are no disputed facts that that are relevant to this that are relevant to this issue the specific issues with regard to timing the specific issues with regard to what the contract requires before an invoice for curtailed energy can even be submitted are all undisputed frankly a lot of them are just straight contract questions so it was a smoky hills prospective that that there was no time limit whatsoever in th at any future point that you got a notion you could submit an invoice he really never got to that issue i mean there was i think a hypothetical posited in the end the order that that that decade later could we come back for an invoice and that really never became an issue it really wasn't a relevant question and it's really in our position not a relevant question here because we're not talking about invoices that were that were that far out from the time of thing which which is why we think the substantial performant is the contract contemplated he didn't give a a time period for those the contract did not specifically apologize or in the contract did not specifically contemplate the time it had a procedure for the parties working together to analyze the curtailed energy collecting the data determine a process for submitting the invoices it did not it did not contemplate a specific time period it certainly could your honor and and and that's what the court did we believe what the court implied was far too short given the circumstances in the contract but i guess part of our point today is that even if there is a time implied they still have to get to the question of substantial performance and prejudice both of which we believe are dispositive so so yes the court certainly could have and did in this instance imply a reasonable time we don't believe that the court properly went through the necessary elements to do that in fact prejudice is one of the elements one of the considerations that should have been should have happened and to the extent the court consider prejudice the court actually specifically found independence was not prejudice and yet the court implied the fifteen day time so we do believe it was error to pick the fifteen days were you prejudiced are we prejudice yes well we're prejudiced and that we been denied payment under invoices that the court found were absolutely we were entitled to payment appeal on the interpretation of nine point one but isn't that something that can frame the discussion as to what's a reasonable time to perform i guess i hear you saying that you would agree that is a general principle of kansas contract law no time is stated for performance the time for performance is a reasonable time and why isn't it a relevant consideration to look at what the parties consider generally was a reasonable time under the contract that is monthly in i guess it's a matter of gradient there because assuming the court is going to under kansas law apply reasonable time and i think there's a little debate but but assuming that that is the that's what the court believes that the case law in kansas says it certainly the court could consider that but the court house to also have to consider the other things that found for example eight point two which speaks directly to curtail the energy putting aside the fact that nine point one clearly only speaks to what's been generated and has been measured as it goes out the door and can be calculated quickly eight point two is that if there has been a curtailment then here's these things the parties have to collectively do they have to have  wind monitoring measuring devices and there's ninety nine turbines here this isn't just a single turbine where you just measuring what comes in so is a giant field of these turbines just a matter that when this contract was entered into the  field had not yet been developed and so there's a period of development of the wind field while it's being constructed and why you go through that process that a reasonable and prudent party would have anticipated the potential for curtailment given the fact that they're common in the industry and that those devices would have been designed into the plan and is it reasonable to say it took a year and a half to come up with a protocol there and when during the entire construction process that protocol could have been developed discussed and otherwise put in place well it's possible that there could have been a protocol put in place at the time but remember the contract specifically addresses that and speaks to in the future this will happen keep in mind two of the evidence in the record shows that this particular wind farm was a bit unusual and that usually one power company buys the entire output and in this situation we have multiple multiple off takers they're called taking the power off of them so at that time they anticipated that the curtailments could occur of different types which gets of course into the city of it penates as appeal they had all of these issues and had to address and  contemplated that they were going to have to calculate they certainly did not say in the contract that you should have a method to calculate this at the time of contract they said in the future when it happens you'll have a method well if that's the way the contract views then the reasonable time has to include time to develop that in addition i'm sorry didn't the district court make some findings on that though in terms of well i just don't find the reasons for the delay on these particular invoices that went beyond fifteen days to be credible the the findings on that are are a bit unclear because at the same time the court below found that the calculation was reasonable and that the steps we took were reasonable and that there was no harm to independents now the court does make comments about not sure that she believes the credibility of a witness who testified on some of these issues but it also kind of mixed together two concepts one is the initial time period to develop a sensually from scratch the very technical mathematical calculation to come up with this number and then there was a question of did the court make the finding on that one and then you can get your second one but on the first part in your view make a finding on whether a smoky had in good faith or reasonably move forward to reach that goal in our view the court found that the process in the first instance was reasonable because there are places in the record or in the order where she's talked about the methodology being reasonable and there being no harm from how we went about doing that there was also a question because the two biggest invoices are for the two thousand and twelve or early two thousand and thirteen time period when they're needing to figure out how to calculate this there were a couple of later invoices that took longer than that  took longer than fifteen days because the person who who was actually the one doing the math in the in the calculation was unavailable and so they didn't get out right away and the court did specifically talk about not being sure that made sense but it was a little unclear exactly what the court was not believing about mr grail testimony and based upon other rulings in the court's decision she certainly seemed to believe that the reason for the international time made sense it just did not fit within her fifteen day implied a reasonable time though so there's one one distinction here between the the the if i'm hearing you  right between the voices that were delayed because of the lack of methodology and voices that were delayed because the one fellow who could do it was out that certainly is a there is a distinction between those that you're but you think all you but you're you're appealing the denial of all of those well because i believe that that substantial performance and prejudice apply equally to both you and i think i interrupted you you were saying you had to hand her up to you half way through so the power was received it talks about an interruption of the purchase of power which is curtailment which is not is an ancillary issue to the contract not an essential purpose it's a potential contingency and then even beyond that it talks about how to invoice for that contingent possibility which we believe takes that squarely out of the essential purpose therefore if we substantially performed regardless of what might in the abstract be a reasonable time for performance we believe it would be it would be we are entitled to that compensation under the doctrine substantial performance and then independent shouldn't get the windfall even though they were not harmed by any of this they should not get the windfall in that situation greatly on the second point the lack of prejudice a similar i touched on this very briefly there has been in fact the specific findings of the court that there was no prejudice or harm to independents as a result of how we invoice for this and if you're going to set a reasonable time that is a consideration we believe because of the status it and because it's not really a contested issue that that's really at the nova question and that you should we should be entitled to those invoices payments for that reason there and so and there's other issues in the brief  some time to come back up here in a moment so i with if there's no further questions right now i will i will stop for  i'll start by addressing some of the points of mr blake and just address with the court first of all they did ever raise with they argument of substantial performances being raised the first time on appeal therefore we had no they argued only that there's no time limit in the contract they made that tactical decision a tactical decision in order for them and now they're trying another tack the first time before this court there's nothing in the contract that suggests that the money paid for energy produced is greener than the money paid for energy not produced anchor tale there's just no credibility to the argument that it doesn't matter to them when they get paid for curtailed energy and it only matters for produce energy plainly the contract does contemplate monthly billing the one provision in the not surprisingly is fifteen days after the month there's certainly no indication in the contract that anything different was contemplated for payments were curtailed energy when in that it makes sense that it might be different because of th doing it after fifteen days today when it happens they have in the record build within fifteen days the lower court did not wipe out every invoice for curtailed energy only those that w we have a table in our brief that shows how late they were we're not talking about a day or two these are very substantial periods of time nothing in the contract excuses their performance because they didn't know how to do it or they didn't step up to do it is then engage in discussions during whatever it might have brought to that the city never challenge the amount of the callee calculated amount of the energy that would have been produced we certainly challenge curtailments which i'm going to turn to in a moment and we certainly challenge the time with us for the building but they don't need the city to figure out how to build a city for this and in fact they have not involve the city in the development of that  trying to shift the blame over to the city again is really just a distraction technique and they continue to bill within the fifteen day period in other circumstances i would like with the court's permission to turn to the nature of the is that it confused the difference between conditions which is what the contract definition turns on and the different responses that s p p may take in response to those conditions how they deem to handle it as they operate and maintain the reliability of the system the conditions existed first of all the contract is clear every first only to the conditions there is no not available or not give them the relief that they needed but it was time sensitive and critical that they get quick response and that's why they issued the directives only under level six is curtailment of generation can curtail transmission or generation or some combination and by the way the notion argued by small details that really there's no difference between curtailing generation enter trailing transmission responding mentally not true transmission is redirecting the traffic a director saying as they receive here don't generate means you cannot inject any more energy into the system we're not going to take the procedure generally is a bigger picture and that this was a technical term that had to be defined for purposes of this industry yes the court said that and we think the court has an error in the court in our opinion is substituting its judgment for what a reasonable definition would be for that of the parties the parties could have invoked all of the taylor procedures they did not they specifically referenced the conditions under level s three form of relief they could have said that very easily they did not they talked about the conditions and then if even if you look at the rest of the s p p procedures again it is only under level six that redispatch work or chairman of generation is discussed levels one through five deal only with transmission not with generation repeatedly told it's emergency conditions what's going on while these were unusual times on the system a number of things happen at once in this part of kansas sunflower a lecture cooperative as  primary transmission on their system was d rated by new york the federal entity responsible for setting reliability standards in the industry so they are told you can carry as much as you thought you could much as you thought you did and so the capacity when they the electric pass three of the transmission system is d rated just as the needs are going up and then this requires can struct upgrade the system which means you have to take lines out of service from time to time which were other interrupts the transfer capability of the system these were not normal times this was why this was happening we're not including their own in house expert witness a transmission expert who they elected not to present a trial and who are the most of us are menaced any settlement whatsoever through the process here it seems you're not sure if the parties discussed any settlement of opposed to the real contract principals in law that govern it well it is a combination of both the city has had concern about the principals because it's a long term contract and they're worried about whether this is going to go on for out like the contract they have somewhat less concern and hopefully well placed because this was an aberrant period of time on the system things seem to have improved and so now it is about the money and quite honestly that's part of why we're just across the problem rather than national pellant the city the city is a not for proper electric system they're not here trying to take advantage of anybody or doing thing they have to maintain rates as low as possible for their customers that's your definition of the emergency versus economic let's say even even under your definition of what you think qualifies as an emergency is there what's in the record that would support that when this first started the intro memos of n l itself even the testimony of their expert a trial who admits that the circumstances are different from the stats that  say the testimony of our own expert who they thought the district court or honestly disregarded his testimony because he based his testimony on the terms of the contract whereas the  smoky witness who the court relied on said that she didn't even look at the contract as part of her analysis and instead she talks about the doomsday and cascading outages which are consequences of something like the extreme chill or a search order that was never issued it is not there's nothing in the contract there's nothing in the jail or procedures there's nothing in any of the other testimony there's nothing in the s p p testimony that says that in order to be an it's confirmed by every witness in the case frankly and much of that is simply not even discussed by the district court like to quickly touch on another issue and then if time permits i may come back to the us and that is the other point of our appeal the contract clearly allocates to the city ten point one percent free so i'm going to say ten percent but ten point one percent of the output of the project now one important thing to understand is the output the amount of energy actually delivered to the delivery point at any point in time it's not just ten percent of the potential capacity of the plant there is never never an opportunity under the contract under which the city should receive more than ten percent and never saw an opportunity or an obligation on the city's part to pay for more than ten percent yet in fact in smoke even admits it so an embrace that there are times where they have allocated more than ten percent if they ever allocate more than the fifteen that megawatts that total i believe there were a few i don't want to be inaccurate here i think there may have been one or two times where that happened but i'm not positive that your honor that theoretically should even be able to happen because the plan itself was at one hundred fifty megawatts capacity so that it shouldn't that should happen but at lower levels they got more than what they're trying percent would have been now one of these arguments is well it's impossible to do what the city says should be done and they lay out in their brain hypothetical about well let's start at one fifty in which case the city gets fifteen and then if and how they used to springfield curtailing all come back to that moment but a springfield purchase her tail down fifty megawatts and they reduced the plant then get power to its citizens its customers why wouldn't the city just want to maintain the fifteen were guard less of whether it be k was ten percent or fifteen percent or twenty percent the main reason there generally agreement reached among the other off takers before the city sign and that's what the court refers to is that first of all let me also point out no operating agreement can amend the contract in the contract itself states that the operating committee has no authority to amend the contract so even if this not never produced agreement existed it doesn't command the contract but it's never been produced by smoke either just alluded to now early on yes one would think ok i want fifteen give me my fifteen don't make me get less of somebody else besides i don't want except there are economic considerations and the big one that changed is at certain times now under the is structured today the market is structured today which is different than when the contract was entered into there's such a thing as negative l n p you sell into the market locational marginal pricing basically when you deliver energy into the market you get paid the market right sometimes there's too much and that market rate becomes a negative and that actually means that if you inject energy into the market when the alan piece negative but then if they brought the production down to strength they because they're lowering the production lower the city's stake say from fifteen to ten well now they're only going to get paid ten by the city and because they curtailed it would be a curtailment by the city so we don't pay the production tax credit and they don't earn that production tax credit because they didn't produce it the city could get tale right yes but then we owe them the contract of negative on pay now it's interesting they use the city of springfield as an example there is no dispute there's never been one of these circumstances resulting from the city of springfield softer trailing it is only occurred when smokey itself or now curtailed as the owner operator they don't have the same contract with themselves that they have with the city or with the city of springfield and so they are they are furthering their own economic interests at the thank you for our first just briefly on our initial our appeal to respond to one thing mr robinson said keep in mind that they also never raised an issue of a defense of unreasonable delay other than latches they never raised any of these issues in fact argued that we shouldn't be allowed to put on more evidence of the circumstances of these invoicing but i want to move now to the independence his appeal and first off to make clear because i believe  counsel kind of reverse these things the contract very clearly says they're all economic curtailments unless they're in emergency curtailment it doesn't say they're all emergency unless they're economic so emergency curtailment is the exception that  two point one point one which talks about circumstances well those circumstances apply to most of the or many of the different levels they just essentially describe what s p p does which is to constantly monitor the system and do what they call an end minus one analysis so there's something about six that is different and so the court correctly looked at the entirety of the six definition and not the tiny pieces that independents argued particular point nine point two are independents wants to pull out the generation question and completely ignore the the discussion of critical status and that's what the court relied upon so the court correctly interpreted using the entire definition does the contract expressly say look to i don't think it does look to all of the procedures what what language should we look to to support what you're saying here about the scope of the district court's world of information to define that sure sure and one point three definitions as t and you are the two definitions that apply here it specifically says that an emergency is defined as a curtailment ordered by s b p interconnection provider a transmission owner that includes the entirety of that definition so they clearly incorporated the entire definition in not just two point nine point one and and obviously circumstances the contract conditions and there's an argument those are equivalent well why would you use two different words why not just use circumstances when drafting the contract it clearly is incorporating the entirety of the definition that is what the court did and that was correct same thing too on the generation versus transmission just briefly on their seven point three b n makes clear that if the s t p curtails generation it is economic unless it's an emergency so to argue that all generation her tail nets are necessarily emergency under the contract is entirely inconsistent with the plain language of the contract so they're asking you to essentially ignore one section of the contract ignore the court's interpretation of another section of the contract just so they can be in a situation where they never have to pay talmud because that is the outcome that they see briefly on the l and p on that issue first off it is not false to say that it's a it's a race of zero the minute one off taker curtail the math works out that way the only way it doesn't work out that way is if and now the n l off taker takes on itself energy that independence is not getting under that math the only way you stop it  hundred under their calculation is if their extra five megawatts goes somewhere their argument is now which isn't smokey by the way it's an owner of smokey but it's a separate entity that now has to take their power that's what they're asking for and it was made late clear by council what they really want is a get out of jail free card they don't want to pass to monitor the market they don't want to have to consider l m p they don't want to have to pay either for the negative or for the curtailment they bear the entire burden of the system they're wanting to reform the contract tear it up and start over in a situation that they believe is advantageous to them that is absolutely not appropriate and the court was correct in its findings on that issue and i'm out of time senator thank you very much thank you counsel wishes to thank the attorneys for both parties for your presence here this morning the arguments you provided the court the briefing that you submitted will take your case hund render decision in due course thank you