Opinion ID: 2543420
Heading Depth: 2
Heading Rank: 1

Heading: public utility regulatory policies act

Text: ¶ 9 Utah Administrative Code Rule 746-210, whose interpretation and application is at the heart of this dispute, is derived from the federal Public Utility Regulatory Policies Act of 1978, 16 U.S.C. section 2601-2645 (2000) et seq. (PURPA). PURPA's aims include conservation of energy and optimization of the [electric utility] efficiency. 16 U.S.C. § 2611. PURPA's stance on master metering is unambiguous. It states, to the extent determined appropriate under section 2625(d) of this title, master metering of electric service in the case of new buildings shall be prohibited or restricted to the extent necessary to carry out the purposes of this chapter.  16 U.S.C. § 2623(b)(1)(2000) (emphasis added). Section 2625(d) states: separate metering shall be determined appropriate for any new building for purposes of section 2623(b)(1) of this title if (1) there is more than one unit in such building; (2) the occupant of each such unit has control over a portion of the electric energy used in such unit; and (3) with respect to such portion of electric energy used in such unit, the long-run benefits to the electric consumers in such building exceed the costs of purchasing and installing separate meters in such building. 16 U.S.C. § 2625(d). ¶ 10 In most instances, master metering of an entire building with multiple tenants through only one meter would be appropriate if a central boiler or chiller were servicing all the units. Utah Admin. Code Rule 746-210-2(A)(2). Otherwise, master metering is discouraged because an individual electric consumer is not billed exclusively for the consumer's own use of electricity. PURPA's purpose is to encourage conservation by, for instance, rewarding consumers who turn off unnecessary lights, purchase energy efficient appliances, or conserve heat or air conditioning. If consumers cannot track their use of electricity, as occurs with master metering, their motivation to conserve is greatly diminished. Additionally, even if users receive individual bills as a result of sub-metering, such metering is problematic because consumers in a master metered building are not customers of a regulated utility. If any dispute arises between the tenant and the landlord, neither the PSC nor the utility can offer assistance. Utah Admin. Code Rule 746-210-5. ¶ 11 In order to implement PURPA, in 1981 the PSC adopted the PURPA standards, and subsequently enacted Utah Administrative Code Rule 746-210.
¶ 12 Rule 746-210 prohibits master metering in new buildings. Utah Admin. Code Rule 746-210-1(A). Because the Broadway Lofts building was originally built in 1901, Westside has argued that it is not bound by the master metering prohibition. The term new building, however, is defined as: [1] those structures ... for which a building permit is obtained on or after August 1, 1984 or [2] if no permit is required, for which construction is commenced on or after August 1, 1984. [2] Rule 746-210 3(A) (emphasis added). According to the plain meaning of the definition provided in the rule, the Commission found that the Broadway Lofts was indeed a new building, inasmuch as Westside was required to obtain a building permit to convert the warehouse into a condominium, which it did on or about July 1, 1998. The PSC's interpretation of the rule, and its application of the facts found to the rule, was reasonable and rational. Westside's argument that the PSC incorrectly found that it was a new building under rule 746-210 fails.
¶ 13 Westside next argues that the PSC erred concluding, first at the evidentiary hearing and a second time in its response to the PSC's Order Granting Review, that Westside did not qualify for an exemption under rule 746-210-3's specific benefit-to-cost exemptions. Such exemptions are contemplated when the goals of PURPA would not be served. Utah Admin. Code Rule 746-210-2, -3. ¶ 14 To qualify for a case-specific exemption from the master metering prohibition, a party must engage in a two-step procedure: (1) it must make a request in writing to the utility using a benefit-to-cost ratio analysis showing that master metering costs are less than separate metering costs, and (2) in employing the methodology specified in the rule, which requires a showing that the benefit-to-cost ratio is less than one with respect to separate metering using the cost effectiveness test guidelines, it must demonstrate that the long-run benefits of individual metering to the electric consumer are less than the costs of purchasing and installing separate meters. Utah Admin. Code Rule 746-210-3. In the event that a utility denies the exemption request, the PSC is empowered to initiate ... proceedings ... arising out of an informal complaint. Utah Admin. Code Rule 746-210-4. The PSC is reminded that not only must the benefit-to-cost determination be made, but that the customer must also show that a granted exemption status will be consistent with the stated purposes of Title I of PURPA; i.e., conservation, efficiency and equity. Id. ¶ 15 The PSC found that Westside failed to meet its burden on both of the rule's requirements. First, Westside did not [make] a written request to PacifiCorp for permission to master meter or sub-meter the condominiums. Second, Westside did not satisfy the burden of proof placed upon it by the rule to demonstrate that the long-run benefits of individual metering to the electric consumer are less than the costs of purchasing and installing separate meters. Utah Admin. Code Rule 746-210-3. At the evidentiary hearing, the PSC determined that Westside made no attempt to apply the rule's formula, and after reviewing additional information submitted by Westside after the grant of review, the PSC concluded that Westside has failed to submit a study meeting the requirements of Rule 746-210-3. ¶ 16 Review of the record reveals that Westside failed: (1) to show that a difference in energy consumption at the Broadway Lofts would result if the condominiums were master metered rather than separately metered, as required by Rule 746-210-3(B); (2) to quantify the difference in installed cost between master and individual metering, as required by Rule 746-210-3(D); or (3) to present a cost-to-benefit ratio equal to the present worth of benefits described in section (B) divided by the present worth costs described in section (D). see rule 746-210-3(E). Contrary to the PSC's directive, Westside utilized an inapplicable rate schedule in its attempt to satisfy the cost-to-benefit analysis required by the rule and entirely failed to establish an evidentiary basis for an exemption. ¶ 17 Finally, the PSC found as a matter of law that Westside could not meet its burden to establish an exemption, because Westside itself installed individual meters. The rule requires that the customer demonstrate that the long-run benefits of individual metering to the electric consumer are less than the costs of purchasing and installing separate meters .... The benefits ... shall reflect the difference in electricity use which results when separate metering is utilized rather than master-metering. Utah Admin. Code Rule 746-210-3 and 3(B). Westside cannot fulfill the requirements of the rule because it cannot show that the benefits of its metering system are less than the costs of sub-metering because the Broadway Lofts already have sub-meters in place. ¶ 18 The record demonstrates that the PSC was reasonable in its finding that Westside failed to make the necessary showing under the rule to qualify for an exemption to the master metering prohibition, and that its ruling was supported by substantial evidence.
¶ 19 Westside next argues that it submitted electrical plans to PacifiCorp in February 1998, which PacifiCorp accepted, showing master metering/sub metering and PacifiCorp waived any objection to master metering at the Broadway Lofts. We disagree. ¶ 20 Utah law is clear on the elements needed to find waiver: (1) A waiver is the intentional relinquishment of a known right . . . . [T]here must be an existing right, benefit or advantage, a knowledge of its existence, and an intention to relinquish it. Geisdorf v. Doughty, 972 P.2d 67, 72 (Utah 1998) (emphasis added) (quoting Soter's Inc. v. Deseret Fed. Sav. & Loan Ass'n., 857 P.2d 935, 942 (Utah 1993) (other citation omitted)). PacifiCorp had no right to waive regarding Westside's purported request to master meter the Broadway Lofts. The PSC is the only body empowered, pursuant to rule 746-210, to ultimately find and grant an exemption to the master metering prohibition, not PacifiCorp. The utility has no discretion in granting an exemption. Utah Admin. Code Rule 746-210-1. ¶ 21 Furthermore, the record provides no factual support for establishing waiver on PacifiCorp's part. While Westside asserts that it submitted plans that PacifiCorp accepted that showed master metering the condominiums, there is no evidence of this. These plans were not presented at the evidentiary hearing and Westside's only witness testified he did not submit any such plans to PacifiCorp and had no knowledge of anyone else doing so. The documents Westside did submit at the hearing, one dated February 3, 1998, and the other apparently undated, were titled Requests for Electrical Service and do not refer to master metering. The logical inference from both documents, which state For each unit and In addition to the 101 units and the house panels, we have to provide 2 x 800 Amp [illegible] services for the future restaurants[,] respectively, is that individual metering, not master metering, was contemplated. ¶ 22 Thus, as a matter of both law and fact, Westside's waiver argument fails.