eighteen minutes of our may please the court i'm eric kristensen for winding creek solar i'd like to start with the lower courts air and refusing to provide an effective remedy in this case the pla language of the statute says that in excuse me in an implementation challenge like this one the court has the authority to provide such injunctive or other relief as may be appropriate the court simply ignored that language here jumped to the descriptions of implementation versus supply challenges and said we had to go to an as applied challenge to get an effective remedy that simply ignores the plain language of the statute further as applied challenges simply doesn't apply here this is plainly a implementation challenge because an implementation challenge is a challenge to the implementation of purpose by the state commission that's clearly what this is here there's no not even a u district court had jurisdiction to decide the question yes your client is arguing that you had a right retroactively to accept an illegal plan so what you're arguing you wanted the higher price under a plan you argue is illegal no the plan the plan is not illegal per se the problem is that if we had gotten the eighty nine dollar and twenty three cent contract at the time that the plant was ready to serve me that would have been proper eighty nine when i  i understand just what you want but that plan is improper for among other reasons that plan has a cap on it so that and that if the cap was taken away the client would have gotten the eighty nine having us reform the contract it's not reform in the contract the contract would have it's the contract that the client that winding creek would have gotten but for the illegal cap but one but that but that's the contract right and this standard remedy is to the standard cases of agency error like this is to restore the wrong party to the position they would have been in but for the illegal conduct the illegal conduct in this case is the five the five megawatt cap that was improperly applied so in the absence of starting point for calculating the price was not illegal that's the eighty nine twenty three so you're claiming if we do have jurisdiction of the district or did have jurisdiction you had a right to accept a price under a contract that was illegal in two grounds so th again the illegal part of the program is the cap and the arbitrary four dollars downward adjustment to the price we agree that the initial price was a proper avoid a cost rate because it was based on a bidding process in which all eligible parties participated that's not the case with the downward adjustment in which only qualifying facilities participate that doesn't measure the avoid cost rate of the utility which is required under the statute under this court's case an independent energy producers it measures the willingness of qualifying facilities to keep reducing their prices until they can get a contract and that's just not what  statute requires if if we were to disagree with you and say that the district court's ultimate determination not to affect the remedy you want but we were to agree with you with respect to the plan or the contract and the plan being not compliant with purpose then where would that leave us as a possible down th contract of only three years not twenty years and at some rate likely to be much lower than the eighty nine twenty three so we would not be restored to the position we would have been in had the c p c not committed this error and do you agree that we should be reeling in the district court denial of your injunctive relief that you request for an abuse of discretion no this is legal this is legal air this court simply improperly applied the plain language at the statute unlike the stand of part of the case where there was a trial a bench trial that this one is fact there are it's a clear standard but th the statute section to ten g in this case because these these are this involves a wholesale rate that's clearly subject to for jurisdiction under part two of the federal power act and under section two ten h one of  says that that subsection apply to the operations of an electric utility or a qualifying facility that are subject to the jurisdiction of the commission under part two of the federal power act so the it would not be possible for the state court proceeding under section two ten g to address this question let me see i think finally the state argues that the eleventh amendment bars the  although the court didn't address this the eleventh amendment bars the request for relief in this case that's simply incorrect the horizon supreme court's decision in price in maryland is directly on point it says that because th possibility for the relief to be taken from the state treasury the past liability of private parties doesn't isn't barred by does it make the relief barred by the eleventh amendment the same is true of the first circuits decision involves area trace money money to us forgive me for my schoolboy spanish pronunciation but that case is directly on point the court concluded that because relief would come from private parties not from the government purse even though the relief would be for violations dating back six years before the decision of the court just like in this case that did not implicate the eleventh amendment finally that there was no long term rate that had been established by the state commission that is not the case here we know the long term rate that that winding creek would have gotten but for the error eighty nine dollars and twenty three cents so there's no possibility of interfering with the jurisdiction of the state commission here they've already done their job it simply a matter of the court exercising its discretion to restore winding creek to the position they would have been but for the legal error that the court found  turning to the substance of the case and again i emphasize that there is a bench trial here there are findings of fact that are subject to the clear air standard there's plenty of evidence in the record to support there's simply no clear applied by the judge here all of his findings of fact were fully supported by the record evidence particularly the testimony of our expert dr lesser with respect to the specifics that the district court found the five cap is a plain violation of purpose that is clear from hydrodynamics decision which is directly on point here and it plainly violates the requirement that a qualifying facility be permitted to sell its output to the electric utility and avoid a cost rates at the time that it's ready to sell the market adjustment mechanism violates purpose as well as we discussed it doesn't measure the avoided cost of the utilities in in addition it uses this arbitrary four megawatt adjustment mechanism there is no market in the world that adjusts information for make a four dollar increment there's certainly no more to the point no utility in the world whose avoid it costs just buy in for dollar increment finally the standard contract which is really the crux here because the c p u sees attempts to save its program is to say the standard contract complies with  that is not the case the standard contract contains at least three variables that cannot be calculated at the time that the winding creek was willing to to undertake the obligation to sell to to p g any the time that the obligation is incurred not at the time that the power is actually delivered the standard contract does not provide that option and that's why it doesn't comply with purpose you categorize your implement which you're arguing here as an implementation claim yes and one bought against the state agency like c p yes but is that really what's an implementation claim because the very remedy that you seek is directed squarely at p g and e so there's no direct it the remedy would be to order the state commission to do what it should have done in the first place then p g and  would be required to enter into the contract if p g and e refused to enter into the contract then we would have it as applied challenge against p g and e to be brought in state court under section two ten g until that happens this is a straight forward implementation challenge the language of section two ten age two providing the court with discretion to provide any any appropriate remedy is what applies here the court heard in failing to even acknowledge that neither does or doesn't and then you have your as applied challenge well if p g and e was a party to this case i suppose that would be no i wouldn't bet the after the case and the so i mean we're working within a minute strait of law framework here where you see is the primary entity carrying out the i understand the purpose in the state and so the i think that the remedy has to be directed to the c p you see in the first instance p g and e is all to me the party to the contract yes you want is subject to the jurisdiction of the commissioner of the california commission if the court orders the remedy that we're requesting through the california commission p g e presumably has to apply and if it has to comply and if it doesn't then again we would have the option to see them under section two ten g for such an as applied challenge the refusal of a utility to comply with lawful  satisfies the requirements for its regulations winding creek argues that the standard contract does not satisfy one of the key provisions of the current regulations and that is eighteen c f r three zero four regulations under eighteen c f r two nine two three zero one as for found litigated in the case below the standard contract determines one of what it cost price now that single price paid to every q of whether it offers capacity whether it even if it offers only energy is comprised of two components there's a capacity portion which is fixed that number is known at the time of signing the contract it can go only go up from the time of signing the contract it never goes down there's also an energy portion that's what we refer to as the short run avoided cost that portion of the rate is a formula with the component parts of that formula known at the outset and signing the contract some of the inputs of that formula are things like monthly market gas price indices and monthly  isn't then the standard contract moch not compliant under purpose based on that admission a lot because the standard contract complies with the first regulations pursu to section three of one as for it determined in the winding creek orders when winding before winding creek filed the federal action below it sought enforcement at that for and it challenged the standard contract as not mean the requirements of the two two first responded by saying the standard contract is the c p c is primary purpose program and it satisfies the first regulation and is a  in order for it to be valid exercise of power of authority has to be to prices offered one is at the time of delivery of the energy and the other one is at the time of entering into the contract the judge says you did only one of those two things and i don't i don't see how you can get around that that's just in the statute that is that is in the regulations your honor what is also in the regulations is section three a one that sets out the scope of part two hundred two of the regulations and part to enter into includes the two to section three a one says only three things that governs the contracts between q us and utilities it says that q s and utilities can negotiate prices terms and conditions that are different from those otherwise required by other provisions of the regulations including  agency conclusions that are determined plainly erroneous or inconsistent with regulations don't require the deference be given under our deference and it seems like here never commented on the bill of the availability of the avoided cost options under the standard contract and so i'm just trying to figure out how does the standard ferg when it referred to section three a one in the whining creek orders also referred to in a footnote the the the q comprehensive q at settlement of which the standard contract is a part that  settlement was an agreement between the utilities in california and the vast majority of q s in california at the time as well as some consumer groups that was a settlement agreement that the commission adopted as a rule as its primary purpose program now if you look at the language in section three a one together with the reference to the q s settlement the only logical conclusion that you can reach is that first recognize the settlement and the standard contract as an agreement between the utilities and the q ups in california with rates terms and conditions that are different from those otherwise required by the remainder of the regulations including g two to the let me ask kind of cut to the chase to assure a more contracts and different programs but you need one compliant program is that baseline that is a baseline every state is required to require to comply with perks regulations what this court has stated is that states should implement the first rules and regulations by implementing its own rule by resolving disputes on a case by case basis or by any means reasonably designed to give effect for the and that's its interpretation of of all these various things but if for example this remap program is not a compliant program then that would force you into the situation of determining the standard contract a compliant is that correct that's that is correct that is the threshold question and for so if we determine that the remit is not compliant then we're forced over to this contract situation and now we're in the standard contract situation and i know they've indicated they white amend it later which almost seemed to me like an acknowledgement that there were some deficiencies but that's not the contract we're dealing with the what what might be contract we're dealing with the what is of act so if we look at the what is contract the current standard contract we go back to the question is my colleagues are asking is where is this alternate pricing in that contract such that we can then say ok well maybe remap doesn't get you where you need to go but this contract us so if the court doesn't except for a reference to section three a one and known with certainty at the outset of signing the contract the other portion is is what we call the short of what it cost that can vary over time but in order to be reasonably designed to give effect to first regulations there is a fixed in no component it's generally referred to as the capacity portion which generally covers investment costs so if an investor needs to know with some reasonable certainty whether or not to invest  explaining that there is a portion that gives them a degree of certainty it's not a fixed number it can vary but there is this capacity portion which is known with certainty so we would urge that that cost to the person or entity generating the energy seeking to sell it to you to work right but the cost required by the right by the calculation required by the regulation has nothing to do with the cost of the generator of the electricity rather that cost is what is the avoided cost the you would have paid to somebody else so this just the literal of the same calculations sure well the standard contract one and whining creek was never a party to the selmer agreement that resulted in the standard contract so it seems like any argument that winding creek california any q f that disagrees with the standard contract can come in to petition the c p c to modify that rule but under the remit program binding creek was in the queue and had been offered a contract beginning in march two thousand and fourteen for three and a half years under the remap program it was offered a contract and it declined that contract i'm going to move your honour's to to our appeal and that is addressing some of the district court's findings regarding the the remap program and would you also make sure you leave time to talk about the remedy issue of course thank you very quickly the remount program found that the district court found that the remote program violated purpose mandat  we've explained in the briefs that the existence of the remit program with the statutory cap can only be affected through purpose we need to target these renewables and to offer higher prices it's only with the existence of the standard contract as as the groundwork for the c p c is compliance with purpose that we can even have the ring that program i think your honour's have  appreciate that point and is that it all gets back to the contract in your view yes yes so i just understood you to concede that the remote program standing on its own is not compliant that's correct and that is based on for its clarification order  burkes winding creek orders so then we're really back to the first part of your argument about compliance with the standard contract correct that's right and in your view the district court point it these this was it was thinly argued but i have discussed how the only logical conclusion is that the reference to section three a one refers to the agreement between q s and utilities in the that it's declaratory orders are entitled to presidential effect now if this court doesn't accept that like the district court that these declaratory orders are not entitled to deference i will refer to the c circuit in xcel energy services that's identified in the briefs where the for where the d c circuit was reluctant to give deference to furt in its declaratory order interpreting purpose and it but it did order where the first referred to the standard contract and found that it that that it's that the remit program just comply the remit program and the standard contract to comply with preferred purple regulations yes but it was to seem like an odd situation to me that you'd have of course it easy circuits only looking at district courts within its  circuit there which is a single district court but it seems odd to me you could say one of the central district of california found x and therefore that would bind the district court here is that basically what you're saying that is what i'm saying and the district court here did not it took a different opinion right and so i am just having some trouble given this set up in the line up in the d c circuit that you how you would apply it in the ninth circuit so  it's like the first first to file so to speak now the first district court to come out with an opinion then your suggestion is that every district court in the circuit would be bound by that opinion c's newly proposed stop standard contract for q of stony more walk or less it's still a valid contracting option some not many at all q s are still accepting the standard contracts it there's no cap on procurement and there's no there's no expiration date there's no end date for the availability of that contract just to point out that we had filed a request for judicial notice concurrent with our fourth brief and to identify for the court that the c p c has a current real making in place in light of the winding creek order to remove any doubt or ambiguity as to whether or not there are contracts that provide a part number calculated at the time of signing a contract to resume to remove any question if it was that we could take judicial notice that there is a rule making but that we don't have a rule is that right not yet ok so i'm not sure where it would get you and we got to go to the remedy issue though i think it does hit on the remedies yes so with respect to the remedy of course mr christianson says you can go through all this and determine that we have the standard contract is not compliant but unless there's a order by the california commission ordering entry into the appropriate contract they're left with no remedy is true at the current time and that is be in the enforcement and remedies scheme that was envisioned by by congress when in acted purpose it restricted the remedies that federal courts can grant to q s and the proper remedy if a state is not properly implemented purpose would be to send the state back to implement purpose correctly it's not courts do not engage in rate making the fish and see rectified here the deficiency would be rectified by offering q absent clearing winding creek a contract option with a price calculated at the time of signing the contract now see has filed an appeal asking this court to affirm the component parts of the remap program that the district court found were illegal and i see my time as well just on that last point though i thought you had so let's start with the standard contract which we all agree is essential to any purpose client program in california miss hammond concedes that there's not a fixed number in those contracts that makes it not for compliant because forty years of her president says you have to have the option of a contract with a fixed price at the time that the q f agrees to start selling that doesn't exist under the standard contract the california program is therefore not per but let's discuss the winding creek orders for a second these are the first quarter that address why decrease complaint sort of initially the problem with the for recorders is that they don't address the key evidence in this case which is that there is no fixed number in the standard contract it just says there is a standard contract and that seems good enough it doesn't explain why it doesn't explain the departure from forty years of precedent it doesn't explain why it came back and reached the opposite conclusion after those orders in the in the wind and solar order and so the court goes no deference under any standard to the agency's failure to explain its departure from president its departure from the pla language of the rules and its failure to address the key evidence in the case and in addition it does all of that in a single footnote that just describes in general terms what the standard contract is without explaining why it's compliant  is this court set in idaho power versus for the lonely footnote is insufficient to support a departure from the agency's established rules and precedent there's no difference to those orders because they don't explain anything the district court was absolutely right that it didn't provide any guidance on the key questions in this case that let me see let me address the section three zero one argument section three one just says that she and utilities can voluntarily agree to a contract that departs from purpose it doesn't say that once a voluntary program is agreed to by some set of q have a combined all it can bind all other q after winding creek was not a party to those orders and therefore can't be bound under section three one it is entitle to a perp a compliant contract in this case that is lacking here in terms of let me see that the  contract offers that were declined the problem with those contract offers is they were at a board of cost rate they were subject to this arbitrary four dollar reduction which has nothing to do with the avoided cost of the utilities and therefore those contracts were not prepared compliant  in terms of the central districts conclusion that the court there did not conduct did not undertake fact finding as the court did in this case the deference the real deference that's due in this case is to the district court here who undertook a fact a fact finding a bench trial made conclusions of facts based on the evidence before it that did not exist in the central district case there's no reason to defer to the central district and in fact the it's not even clear that the same arguments were made to the court in the central district the in terms of the remedies question i mean the i think miss him and answers to your questions underscore the problem with this case the problem with the remedy that they offer which is no remedy at all really they say at some point maybe two or three years down the line winding creek will have a contract option the fact is the contract option will be a far cry from what it would have had in the absence of the legal errors committed by the c p u see in this case as i said at most a three year contract as opposed to the twenty year contract winding creek would have had and at some price well below what winding creek would have had back in two thousand and thirteen when it was ready to deliver the power in this case in any event let me ask you this ready to deliver the power has actually constructed or finished constructing the facility in winding creek  had to be in a position to be ready to deliver power within twenty four months of the time that committed to the rebbe remap program it's been waiting to have complete construction it's completely permitted and someone has been waiting to construction for the contract to go into  a side with the record requires me to know how far along in construction is winding green so my understand i don't know the exact answer to that question but my understanding is that permitting has been completed it's ready to put metal in the ground but done so and you can't i mean without a contract to pay for the output nobody's going to finance the project right i mean and that's that part of the problem with the lack of remedy here is we should have had this contract back in two thousand and thirteen here we are six six years later still waiting still waiting on the c p c to act in on a program that's likely doesn't comply with your in your practical cost practical problem is that the avoiding costs are coming down well that and that's true but the you know again if we had gotten the contract we were entitled to in two thousand and thirteen the avoided cost would have been eighty nine dollars and twenty three cents that's undisputable and that's the contract that we would have gotten but for the legal heir the problem with these argument on the remedy is that it ignores the plain language of the statute which says the district court had the discretion to order any appropriate remedy that certainly putting winding creek into the position it would it's you know a happenstance that we were denied but it's clearly because of the cap the cap is clearly illegal under the hydrodynamics program and the statute clearly authorizes the district court to restore us to the position we would have been in but for that legal error thank you thank both counsel for your very excellent argument this morning winding creek versus petter men is submitted and were adjourned for the morning