Court Opinion

ID: 4274461
Source: CourtListenerOpinion
Date Created: 2018-05-11 14:51:47.451783+00
Date Added: 2024-06-11T07:49:17.647866
License: Public Domain

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal
revision before publication in the Vermont Reports. Readers are requested to notify the Reporter
of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109
State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made
before this opinion goes to press.

                                           2018 VT 52

                                          No. 2017-165

In re Investigation into Programmatic                          Supreme Court
Adjustments to the Standard-Offer Program
(Renewable Energy Vermont, Appellant)                          On Appeal from
                                                               Public Utility Commission

                                                               October Term, 2017

James Volz, Chair

Kimberly K. Hayden of Paul Frank + Collins P.C., Burlington, for Appellant.

Jeanne Elias, Special Counsel, Montpelier, for Appellee Department of Public Service.

PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll, JJ.

       ¶ 1.    REIBER, C.J. Appellant Renewable Energy Vermont (REV) asks this Court to

reverse and remand an order of the Vermont Public Utility Commission1 that altered technology

allocations in the standard-offer program for renewable energy projects. We conclude that REV

seeks an advisory opinion and therefore dismiss the appeal for lack of jurisdiction.

       ¶ 2.    The standard-offer program was established by the Legislature in 2005 as part of

an effort to promote development of renewable energy in Vermont. See 30 V.S.A. §§ 8001, 8005,

8005a. The standard-offer statute directs the Commission to authorize “long-term power-purchase

       1
         Prior to July 1, 2017, the Public Utility Commission was known as the Public Service
Board. See 2017, No. 53, § 9. For clarity, we will refer to it as the Commission throughout this
opinion.
contracts with electrical providers in Vermont for renewable energy projects that have a nameplate

capacity of 2.2 megawatts (MW) or less and meet certain other criteria.” In re Programmatic

Changes to the Standard-Offer Program, 2014 VT 29, ¶ 2, 196 Vt. 175, 95 A.3d 999 (citing 30

V.S.A. § 8005a(b)). “Once a plant owner executes a standard-offer contract, the [Commission]

guarantees a set price for that plant’s energy for the duration of the contract regardless of whether

the market price changes.” Id. (citing 30 V.S.A. § 8005a(f)(4)). Vermont electric utilities are then

required to purchase the electricity generated by these projects at that price.          30 V.S.A.

§ 8005a(k)(2).

       ¶ 3.      The standard-offer program has a cumulative plant capacity of 127.5 MW, a portion

of which is made available to new projects each year. Id. § 8005a(c). For 2017, the available new

capacity was 7.5 MW. Id. § 8005a(c)(1)(A). This was increased to 8.625 MW due to unsubscribed

capacity from 2016. A portion of each year’s capacity, known as the “provider block,” is reserved

for new plants proposed by Vermont retail electricity providers. Id. § 8005a(c)(1)(B). The

remaining capacity—the “developer block”—is reserved for independent developers. Id. The

Commission is required to allocate the cumulative 127.5 MW capacity among the following

designated categories of renewable energy technologies: solar power; wind power with a plant

capacity of 100 kW or less (referred to by the Commission as “small wind”); wind power with a

plant capacity greater than 100 kW (referred to as “large wind”); landfill methane; hydroelectric

power; and biomass power. Id. § 8005a(c)(2). This requirement furthers the stated legislative goal

of “[p]romoting the inclusion, in Vermont’s electric supply portfolio, of renewable energy plants

that are diverse in plant capacity and type of renewable energy technology.” Id. § 8001(a)(8).

       ¶ 4.      The Commission solicits bids for qualifying projects through an annual request-for-

proposal (RFP) process.      Prior to issuing the annual RFP, the Commission determines the

maximum price that utilities will be required to pay for electricity generated by new projects in

                                                  2
each category of renewable technology, “with a goal of ensuring timely development at the lowest

feasible cost.” Id. § 8005a(f). These price caps operate as a ceiling for bids. Id.

       ¶ 5.    In 2016, the Department of Public Service observed that solar projects were on

track to fill three-quarters or more of the cumulative capacity if the RFP process was not modified.

To address this disparity, the Commission issued an order in February 2016 that set aside a

“technology diversity developer block” that would be allocated on an equal basis to each of the

non-solar technology categories.      Only projects using the designated technology would be

permitted to bid for the set-aside capacity for that technology. The remaining capacity in the

developer block would be available to projects in any technology category and would be awarded

based solely on bid price. This was called the “price-competitive developer block.” The

Commission ordered that the new allocation arrangement was to remain in effect for the remainder

of the standard-offer program, unless changed by a subsequent order.

       ¶ 6.    After the Commission issued its 2016 order, the Legislature passed Act 174, which

created a temporary pilot program for standard-offer projects located at “preferred locations.”2

2015, No. 174 (Adj. Sess.), § 12a (effective July 1, 2016) (codified at 30 V.S.A. § 8005a(c)(1)(D)).

Act 174 required that for one year beginning on January 1, 2017, the Commission was to allocate

one-third of the annual capacity increase to these projects. Id. In September 2016, the Commission

announced that due to Act 174, it planned to revisit the allocations set forth in its February 2016

order as part of its annual price review.

       ¶ 7.    The Commission convened a workshop in October 2016 to discuss the preferred

location pilot program, price caps, and technology allocations.         Following the workshop,

comments were filed by various utilities, developers, and other stakeholders, including REV.

       2
          “Preferred locations” include existing buildings, parking lot canopies, landfills, and
brownfield sites. 30 V.S.A. § 8005a(c)(1)(D)(iv).

                                                 3
REV, which is a trade organization made up of businesses, nonprofits, and utilities committed to

promoting renewable energy and energy efficiency in Vermont, recommended that the

Commission maintain the technology diversity developer block established in the February 2016

order.

         ¶ 8.   In an order entered on March 2, 2017, the Board set technology allocations and

price caps for the 2017 RFP. The Board ordered that one-third of the 8.625 MW capacity for 2017

be allocated to projects located at preferred locations under the pilot program, as required by Act

174. Fifteen percent of the annual capacity was allocated to the provider block pursuant to 30

V.S.A. § 8005a(c)(1)(B)(i). The Commission ordered that 2.2 MW be made available to the price-

competitive developer block for projects of any technology category. The remaining 2.69 MW in

developer block capacity was allocated equally to “each non-solar technology category with an

avoided-cost price cap greater than the solar price cap.” For 2017, this meant the capacity was

allocated to small wind and food waste anaerobic digestion projects. The order stated that this

arrangement would continue in 2018 and succeeding years.3 In effect, the order eliminated the

capacity set-asides for large wind, landfill gas, biomass, and hydroelectric power for 2017, and

instead required projects using those technologies to bid in the price-competitive developer block

along with solar projects in the 2017 RFP process.

         ¶ 9.   On March 16, 2017, REV moved to alter or amend the order. REV argued that the

elimination of capacity set-asides for all technology categories other than small wind and food

waste anaerobic digestion violated the Commission’s prior orders and 30 V.S.A. § 8005a. It

asserted that the order would exacerbate the existing lack of technology diversity in the standard-

         3
         The order also set the price caps for each category of technology for the 2017 RFP and
determined the avoided costs that serve as prices caps for farm methane projects. These
determinations are not at issue in this appeal.

                                                4
offer program. REV asked the Commission to revert to the technology allocations set forth in the

February 2016 order.

       ¶ 10.    In an order entered on March 29, 2017, the Commission denied REV’s motion to

retain the 2016 technology allocations, stating:

                We are persuaded that technologies with a price cap lower than or
                equal to the solar price cap can compete with other technologies
                such as solar. In particular, biomass and large wind price caps are
                significantly lower than the solar price cap, enabling these
                technologies to compete in the Price-Competitive Developer Block.
                We conclude that the allocation methodology represents a
                reasonable approach that will promote technology diversity while at
                the same time ensuring the timely development of projects at the
                lowest feasible cost. We will continue to review the allocation
                methodology annually to ensure that reasonable diversity is
                achieved under the standard-offer program.

       ¶ 11.    REV filed a second motion to alter or amend the order on April 7, 2017, arguing

that the March 29 order was the first time the Commission explained its rationale for eliminating

large wind from the technology diversity developer block and therefore its first opportunity to

respond. REV argued that the Commission failed to give notice to the parties that it was going to

exclude large wind from the block or to make findings to support its order. It further argued that

the order was clearly erroneous because the evidence showed that large wind and other

technologies were not able to compete on price with solar technology projects. The Commission

denied REV’s motion as untimely because it was filed more than ten days after the March 2, 2017

order. It also rejected REV’s argument that the Commission had provided insufficient notice of

the proposed changes.4

       ¶ 12.    On appeal, REV argues that the Commission’s decision arbitrarily abandons the

technology allocations adopted in 2016, conflicts with the intent of the standard-offer statute, and

is clearly erroneous because it will discourage technology diversity. REV further argues that the

       4
           REV does not renew this argument on appeal.

                                                   5
Commission’s order is unsupported by findings and fails to take into account relevant information

from the Department’s 2017 Standard-Offer Report. REV asks this Court to remand the matter to

the Commission for it to set aside capacity for large wind, hydroelectric power, and biomass,

starting with the 2018 RFP. We conclude that because REV seeks an advisory opinion, we lack

jurisdiction to consider the merits of REV’s arguments.

       ¶ 13.   This Court only has subject matter jurisdiction over “actual controversies arising

between adverse litigants.” In re Constitutionality of House Bill 88, 115 Vt. 524, 529, 64 A.2d
169, 172 (1949) (quotation omitted); see also Brod v. Agency of Nat. Res., 2007 VT 87, ¶ 8, 182
Vt. 234, 936 A.2d 1286. “The existence of an actual controversy turns on whether the plaintiff is

suffering the threat of actual injury to a protected legal interest, or is merely speculating about the

impact of some generalized grievance.” In re Bennington Sch., Inc., 2004 VT 6, ¶ 19, 176 Vt. 584,

845 A.2d 332 (mem.) (quotation omitted). “[T]he consequences of the dispute must be so set forth

that the court can see that they are not based upon fear or anticipation but are reasonably to be

expected.” Anderson v. State, 168 Vt. 641, 644, 723 A.2d 1147, 1149 (1998) (mem.) (quotation

omitted). In assessing whether an actual controversy sufficient to confer jurisdiction exists, we

must “distinguish the ‘probable’ from that which is merely ‘possible.’ ” Id. (quoting Vill. of

Bennington v. Hawks, 100 Vt. 37, 40, 134 A. 638, 639 (1926)).

       ¶ 14.   Here, REV argues that the Commission erred by eliminating the technology set-

asides for large wind, hydroelectric power, and biomass power in the March 2017 standard-offer

program RFP order. REV seeks no relief from that order, however. It does not challenge the

contracts issued under the 2017 RFP or argue that it or its constituent members were harmed by

the 2017 order. Cf. In re Programmatic Changes, 2014 VT 29, ¶¶ 1, 16 (reversing order that

erroneously determined developer’s proposed project did not qualify for standard-offer contract).

                                                  6
Instead, it asks the Court to remand the matter to the Commission with a direction to set aside

capacity for large wind, biomass, and hydroelectric projects for 2018 and future years.

       ¶ 15.   REV’s argument is based on the assumption that the price caps for large wind,

hydroelectric power, and biomass will continue to be lower than the price cap for solar, such that

there will be no capacity set aside for these technologies in 2018 and future years under the March

2017 order. The outcome feared by REV is speculative. At the time this case was briefed, the

2018 RFP docket had not even been opened. The Commission is required by statute to annually

review and set the price caps for each technology category. 30 V.S.A. § 8005a(f)(3). The price

caps are based on numerous factors, including land costs, tax incentives, financing costs, and other

market forces, and therefore they can and do change from year to year.

       ¶ 16.   Furthermore, the history of this case demonstrates that the technology allocation

arrangement itself may be altered by the Legislature or the Commission from year to year. The

Commission stated in its March 29 order that it “will continue to review the allocation

methodology annually to ensure that reasonable diversity is achieved under the standard-offer

program.” Although it is possible that the 2017 arrangement will be continued in 2018 and beyond,

thereby adversely affecting REV or its members, we cannot say under these circumstances that it

is probable.

       ¶ 17.   REV does not seek relief from the Commission’s technology allocation for 2017,

but only challenges the allocations anticipated in 2018 and beyond. In essence, REV asks us to

direct the outcome of proceedings that have not yet occurred. “It is the tradition of constitutional

common law that the establishment of legal doctrine derives from the decision of actual disputes,

not from the giving of solicited legal advice in anticipation of issues.” Wood v. Wood, 135 Vt.
119, 121, 370 A.2d 191, 192 (1977). In other words, “ ‘courts are not instituted to render advisory

opinions.’ ” Baker v. Town of Goshen, 169 Vt. 145, 151, 730 A.2d 592, 596 (1999) (quoting In

                                                 7
re Constitutionality of House Bill 88, 115 Vt. at 529, 64 A.2d at 172). The issues raised by REV

are premature, and we therefore lack jurisdiction to consider them. See id. at 152, 730 A.2d at 597

(dismissing appeal that sought impermissible advisory opinion).5

       The appeal is dismissed.

                                               FOR THE COURT:

                                               Chief Justice

       5
          The Legislature has directed that the cumulative capacity of the standard-offer program
include a variety of technologies, including large wind, biomass, and hydroelectric power, but has
not required that the Commission bring these respective technologies into the standard-offer
program within any particular time frame or even in specified amounts. If, as the standard-offer
program approaches its statutory maximum capacity, some technologies still remain virtually
unrepresented in the program’s portfolio, it may result in a failure to comply with the statutory
mandate in the cumulative allocations. In ruling that REV’s challenge to the 2017 allocation of
new capacity, in which REV seeks relief by way of an order regulating the 2018 RFP, is non-
justiciable, we do not address the question of whether a challenge to the Commission’s cumulative
capacity may become justiciable in other contexts.

                                                8