Court Opinion

ID: 3182833
Source: CourtListenerOpinion
Date Created: 2016-03-04 18:14:54.619834+00
Date Added: 2024-06-11T14:28:51.741892
License: Public Domain

Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
    Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
    303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
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             THE SUPREME COURT OF THE STATE OF ALASKA

ALPINE ENERGY, LLC,                              )
                                                 )    Supreme Court No. S-15696
                    Appellant,                   )
                                                 )    Superior Court No. 3AN-13-06239 CI
    v.                                           )
                                                 )    OPINION
MATANUSKA ELECTRIC                               )
ASSOCIATION and the                              )    No. 7085 – March 4, 2016
REGULATORY COMMISSION OF                         )
ALASKA,                                          )
                                                 )
                    Appellees.                   )
                                                 )

            Appeal from the Superior Court of the State of Alaska, Third
            Judicial District, Anchorage, Michael Spaan, Judge.

            Appearances: Robert K. Reiman, Law Offices of Robert K.
            Reiman, Anchorage, for Appellant. David J. Mayberry,
            Crowell & Moring, LLP, Anchorage, for Appellee
            Matanuska Electric Association, Stuart W. Goering and
            Emma K. Pokon, Assistant Attorneys General, Anchorage,
            and Craig W. Richards, Attorney General, Juneau, for
            Appellee Regulatory Commission of Alaska.

            Before: Stowers, Chief Justice, Fabe, and Bolger, Justices.
            [Winfree and Maassen, Justices, not participating.]

            BOLGER, Justice.
I.     INTRODUCTION
              Federal law requires electric utilities to purchase power generated by
cogeneration facilities that meet certain standards and provides a method of calculating
the purchase rate that the utilities must pay. To qualify for this treatment, a facility must
be certified that it meets the standards. It may self-certify, by filing a form describing
the project and asserting that it believes it meets the standards, or it may request a formal
determination that it meets the standards. The Regulatory Commission of Alaska
implements this certification scheme on the state level, but the determination whether a
facility qualifies falls within exclusive federal jurisdiction.
              The main issue presented in this appeal is whether a self-certification
constitutes a federal determination that a facility meets the standards and whether the
Commission must defer to this self-certification. We conclude that a self-certification
does not constitute a federal determination and that the Commission’s broad discretion
to implement the federal scheme means it has the power to require a developer to
formally certify its projects.
II.    FACTS AND PROCEEDINGS
       A.     Regulatory Background
              Congress enacted the Public Utility Regulatory Policies Act (PURPA) in
1978 to increase conservation of energy, make electric utilities more efficient, and
encourage equitable rates for electric customers.1 Section 210 of PURPA2 seeks to
accomplish this by “encourag[ing] the development of cogeneration and small power

       1
              See Public Utility Regulatory Policies Act of 1978 (PURPA), Pub. L. No.
95-617, § 2, 92 Stat. 3117 (1978) (codified at 16 U.S.C. § 2601 (2012)); FERC v.
Mississippi, 456 U.S. 742, 746 (1982).
       2
              PURPA § 210 (codified as amended at 16 U.S.C. § 824a-3).

                                             -2-                                       7085

production facilities.”3 Cogeneration facilities produce electric energy along with some
other types of useful energy, such as heat.4 PURPA encourages development of these
facilities by requiring electric utilities to purchase electric energy from and sell electric
energy to “qualifying” cogeneration and small power production facilities,5 and by
exempting these qualifying facilities from state and federal regulation as utilities.6
                 PURPA charges the Federal Energy Regulatory Commission (FERC) with
implementation,7 and directs state regulatory authorities to implement FERC’s rules in
turn.8       In Alaska, this task falls to the Regulatory Commission of Alaska (the
Commission).9
                 Under FERC’s regulations implementing PURPA, “qualifying facilities”
are facilities that both meet certain efficiency, operating, and use standards, and are
certified.10 Facilities can become certified in two different ways: They may file a notice
of self-certification with FERC, asserting that they meet the relevant standards, or they

         3
                 FERC, 456 U.S. at 750.
         4
                 16 U.S.C. § 796(18)(A).
         5
                 Id. § 824a-3(a).
         6
                 Id. § 824a-3(e).
         7
                 Id. § 824a-3(a).
         8
                 See id. § 824a-3(f).
         9
              16 U.S.C. § 796(15), (21) (defining “[s]tate regulatory authority” as the
regulatory body with jurisdiction over “rates and charges for the sale of electric energy
to consumers”); AS 42.05.141 (granting the Regulatory Commission of Alaska authority
to regulate public utilities and their rates and charges).
         10
                 18 C.F.R. § 292.203(b) (2015).

                                            -3-                                        7085

may apply to FERC for certification.11 If a certified facility is “substantial[ly] alter[ed]
or modifi[ed],” it must recertify.12 Self-certification is free,13 while formal certification
carries a filing fee of $24,070 for cogeneration facilities.14 Other parties may challenge
a self-certified or formally certified facility’s qualifying-facility status;15 a challenge
carries a filing fee of $24,370.16
              FERC’s regulations implementing PURPA also control the rates that
utilities must pay qualifying facilities for energy. Purchase rates must not exceed the
utility’s “avoided costs,”17 which are “the incremental costs to an electric utility of
electric energy or capacity or both which, but for the purchase from the qualifying
facility . . . , such utility would generate itself or purchase from another source.”18 In
other words, the utility is obligated to purchase a qualifying facility’s energy, but it is not
obligated to pay any more for that energy than it would have paid if it obtained the
energy from a different source.

       11
              Id. § 292.207. The parties and the superior court all refer to this process as
“formal certification.” We adopt this terminology.
       12
              Id. § 292.207(d)(2).
       13
              Id. § 292.207(a).
       14
              Id. § 381.505(a).
       15
              Id. § 292.207(d).
       16
               Revisions to Form, Procedures and Criteria for Certification of Qualifying
Facility Status, 75 Fed. Reg. 15,950, 15,951 n.15 (Mar. 30, 2010) (“A motion seeking
revocation requires a filing fee as a declaratory order.”); 18 C.F.R. § 381.302(a) (listing
the fee for filing declaratory order to challenge the certification).
       17
              18 C.F.R. § 292.304(a)-(b); see also 16 U.S.C. § 824a-3(b) (2012).
       18
              18 C.F.R. § 292.101(b)(6).

                                             -4-                                         7085

              Because potential qualifying facilities and investors need to predict
purchase rates to be able to estimate the return on a potential investment, FERC’s
regulations require utilities to “make available data from which avoided costs may be
derived.”19 These data are not the same as a purchase rate; rather, they are “the first step
in the determination of such a rate.”20
       B.     Facts
              In May 2008, Alpine Energy self-certified five proposed cogeneration
facilities. Only two of these facilities are at issue in this case: Pioneer Energy #1, later
renamed “Goose Creek Energy Project,” and Pioneer Energy #4, later renamed “Pioneer
Energy Project.” Alpine anticipated selling the thermal energy from Pioneer Energy #1
to local businesses, residences, and greenhouses for the purpose of space heating. It
intended to sell the thermal energy from Pioneer Energy #4 to the Alaska State Fair and
to various commercial customers and greenhouses, again for the purpose of space
heating.
              Shortly after filing the notices of self-certification, Alpine requested the
local electric utility, Matanuska Energy Association (MEA), to interconnect with its
facilities — that is, to physically connect the cogeneration facilities with MEA’s utility
network to facilitate the purchase of electric energy.21 Alpine also requested MEA to
provide certain avoided-cost information required by the Commission’s regulations, and
to open good-faith negotiations for the purchase of power from Alpine’s facilities.

       19
              Id. § 292.302(b).
       20
           Small Power Production and Cogeneration Facilities; Regulations
Implementing Section 210 of PURPA, 45 Fed. Reg. 12,214, 12,218 (Feb. 25, 1980).
       21
               See 18 C.F.R. § 292.101(b)(7) (defining “[i]nterconnection costs” as “the
reasonable costs . . . directly related to the installation and maintenance of the physical
facilities necessary to permit interconnected operations with a qualifying facility”).
                                            -5-                                       7085

              Under Alaska regulations, a qualifying facility’s request for interconnection
triggers a 60-day period within which the utility must provide the qualifying facility with
a tariff setting out rates for interconnection, purchases, and sales.22 Accordingly, in its
reply to Alpine, MEA requested certain engineering information from Alpine that it
stated was necessary to determine the costs of interconnection. MEA also stated that the
avoided-cost information Alpine had requested was available in its then-effective tariff,
on file with the Commission.
              Alpine did not provide the requested engineering information in its
response. Instead, Alpine reiterated its request to enter negotiations for the purchase of
energy. As a result, MEA filed a petition with the Commission requesting a waiver of
the 60-day period. Alpine did not oppose the petition, and the Commission granted the
waiver, suspending MEA’s obligations under 3 AAC 50.790(b) “until at such time as it
voluntarily provides the interconnection to [Alpine] or until in a future order, in response
to a filing by [Alpine] or otherwise, we revoke the waiver, whichever first occurs.”
              Alpine and MEA continued to correspond about negotiating power
purchase agreements. The discussions focused on two of the projects that Alpine had
initially proposed: Pioneer Energy #4, to be sited at the Alaska State Fair, and the Goose
Creek Energy Project (formerly Pioneer Energy #1), intended to provide heat and electric
energy for the Goose Creek Correctional Facility.23
              At the outset, MEA expressed doubts about the qualifying-facility status of
Alpine’s projects and about Alpine’s ability to successfully develop them. MEA
specifically mentioned Alpine’s history of proposing cogeneration projects without

       22
              3 Alaska Administrative Code (AAC) 50.790(b) (2015).
       23
              The record does not show when Alpine began planning a project at Goose
Creek. None of its initial self-certifications describe such a project. From this point on,
though, this project is clearly a subject of negotiations with MEA.
                                            -6-                                       7085

commitments for the purchase of thermal energy. The parties disputed the projects’
qualifying-facility status for several months. In May 2009, however, Alpine provided
MEA with letters of interest from two potential thermal energy customers, or thermal
hosts — the Alaska State Fair and the Department of Corrections. MEA subsequently
agreed to begin negotiations with Alpine for the purchase of electric energy.
             Alpine sent MEA a draft power purchase agreement for the Goose Creek
project in June 2010, but the parties did not negotiate the terms of the agreement.
Instead, in August 2010, Alpine and MEA entered into “Precedent Agreements” for the
projects at issue here. Under these agreements, negotiations were halted, and Alpine was
required to meet certain conditions before negotiations would resume. The agreements
required Alpine to obtain binding contractual commitments for the sale of the thermal
energy that its proposed projects would produce, receive commitments for all financing
necessary to construct and operate the projects, and obtain all permits, authorizations,
and rights needed to construct and operate the projects. If Alpine met the conditions by
December 31, 2011, the parties agreed to negotiate power purchase agreements. If
Alpine did not meet the conditions by that date, the agreements would terminate.
             While it was communicating with Alpine, MEA was also planning its own
power generation project, the Eklutna Generation Station. It put out a Request for
Proposals in October 2009, seeking contractors for the project. And in March 2011,
MEA signed a contract committing to the first stage of the project.
             In December 2011, Alpine self-recertified the Pioneer and Goose Creek
projects, and again requested interconnection from MEA. The recertifications stated that
both projects would sell the bulk of their thermal energy to Mat-Su Produce. According

                                          -7-                                      7085

to Alpine, Mat-Su Produce was to be an Alpine subsidiary that operated greenhouses.24
The Pioneer project would sell the remainder of its thermal energy to the Alaska State
Fair, the City of Palmer, Matanuska-Susitna Borough Schools, and other commercial
customers, and the Goose Creek project would sell the remainder of its energy to Valley
Utilities and other commercial customers.
             At the same time that it self-recertified, Alpine also informed MEA that the
conditions of the precedent agreements had been met and requested to begin negotiating
power purchase agreements. Along with its request, Alpine provided MEA with copies
of agreements with potential thermal hosts and with copies of agreements with broker-
dealer FirstSouthwest for debt placement services. MEA responded that it did not
believe the conditions were met; in particular, it noted that Alpine had obtained no
financing commitments and had not obtained Commission authorization for either
project. On January 9, 2012, MEA informed Alpine that it considered the precedent
agreements terminated because Alpine had failed to meet the conditions precedent by the
deadline.

      24
             Mat-Su Produce was not registered to do business in Alaska by the time of
the administrative proceedings, and still is not. Search Business License Database,
DEP’T OF COMMERCE, CMTY., & ECON. DEV., https://www.commerce.alaska.gov
/cbp/MAIN/CBPLSearch.aspx?mode=Bl (showing no search results when searching
“Business Name” for “Mat-Su Produce” and “Mat Su Produce”) (last visited Feb. 16,
2016).

                                          -8-                                      7085

       C.     Proceedings
              1.     Administrative proceedings
              On February 13, 2012, Alpine filed a formal complaint with the
Commission,25 asserting that MEA had failed to comply with its obligations under
PURPA and its implementing regulations. Alpine requested relief in the form of (1) an
order for MEA to provide the avoided-cost information required by 3 AAC 50.790(d),
including the data and methodology used to derive those costs; (2) a declaratory order
that MEA may not refuse to negotiate with Alpine based on doubts as to the validity of
its projects’ qualifying-facility status; (3) an order for MEA to enter into negotiations to
purchase power from Alpine’s facilities; (4) an order for MEA to set the rates for those
purchases based on its avoided costs at the time Alpine initially requested
interconnection; and (5) an order that those avoided costs should include the costs of the
Eklutna Generation Station, or in the alternative an order enjoining MEA from incurring
any additional expenses to add capacity.
              MEA denied the allegations in the formal complaint and moved to dismiss.
It challenged Alpine’s claim that it had met the terms of the precedent agreements,
pointing out that Alpine’s agreements with thermal hosts were expressly contingent on
the negotiation of a power purchase agreement, and were therefore not binding as
required by the precedent agreements. It also highlighted the highly speculative nature
of both projects’ primary thermal host, Mat-Su Produce. And it pointed out that
FirstSouthwest had not agreed to finance Alpine’s projects; instead, it had agreed to act
as a placement agent for any bonds issued by Alpine or its projects, but left it up to
Alpine to actually issue such bonds or obtain other financing.

       25
              See 3 AAC 48.130 (listing the Commission’s procedures for filing and
investigating formal complaints).

                                            -9-                                       7085
              Accordingly, MEA argued, the Commission should require Alpine to
formally certify its projects as qualifying facilities before enforcing rights dependent on
their qualifying-facility status. MEA asserted that Alpine’s failure to meet the precedent
agreements, and the facts underlying its failure, raised legitimate questions about its
projects’ qualifying-facility status, which should be resolved by FERC in the formal
certification process. MEA also claimed it had already provided Alpine with the
required avoided-cost information, and that the Commission’s waiver of its obligation
to provide the information required by 3 AAC 50.790(b) was still valid.
              The Commission dismissed Alpine’s claim in part on July 20, 2012. It
found no good cause to investigate26 Alpine’s claim of entitlement to a tariff under
3 AAC 50.790(b) because its earlier waiver of that requirement had not been rescinded.
The Commission also determined that it did have the authority to require Alpine to
obtain formal certification if there was a legitimate claim that the merits of a qualifying
facility’s self-certification were questionable. It decided that MEA asserted such a
legitimate claim here, and dismissed without prejudice Alpine’s claims that depended on
its projects’ qualifying-facility status, instructing Alpine that it could refile its claims
after obtaining formal certification.
              The Commission did, however, find good cause to investigate whether
MEA was in compliance with the information-publication requirements of
3 AAC 50.790(d). MEA had provided only an average of its avoided costs over the next
five years, instead of a year-by-year projection as required. The Commission also
expressed concern that MEA’s avoided-cost calculations did not consider any part of its
recent Eklutna Generation Station project avoidable, although MEA had committed to

       26
            See 3 AAC 48.130(f) (“A formal investigation will not be instituted on
complaint, except for good cause shown to the [C]ommission’s satisfaction by the
complainant.”).
                                           -10-                                       7085

the project only after its communications with Alpine. Finally, the Commission noted
that it was unclear whether MEA actually “maintained” the information as required, or
simply generated it upon request.
              On August 23, 2012, MEA filed a Notice of Compliance, informing the
Commission that it had made publicly available all information required by
3 AAC 50.790(d).
              The parties both moved for summary judgment on this remaining issue.
Alpine argued that it was entitled to the avoided-cost information as of May 2008, the
time of its initial request for interconnection. In particular, Alpine focused on the cost
of the Eklutna Generation Station, which MEA had not yet committed to build when
Alpine originally requested interconnection. If MEA had agreed to purchase energy
from Alpine at that time, Alpine argued, MEA would not have had to build as much
additional capacity. Alpine claimed that the costs incurred to build that additional
capacity were therefore avoidable, and should be included in the purchase rates for
Alpine’s electric energy. Alpine also argued that 3 AAC 50.790(d) required MEA to
provide the data and methodology underlying its avoided-cost information, and that
MEA had not done so.
              In MEA’s motion for summary judgment, it directed the Commission to the
information it had made available in August 2012, in accordance with its Notice of
Compliance.      MEA claimed that this information was in compliance with
3 AAC 50.790(d), and that the regulation did not require it to make public the underlying
data and methodology. It acknowledged, however, that it had not published this
information prior to August 23, 2012, instead providing it only upon request. It denied
that the Eklutna Generation Station was an avoidable cost, or that Alpine was entitled to
a purchase rate based on historic avoided costs. It also pointed out that the Commission
had already decided that Alpine must obtain formal certification for its projects before

                                          -11-                                      7085

they were entitled to any purchase rate, and that the historic avoided-costs issue was
therefore outside of the scope of the proceedings.
               The Commission agreed with MEA that the only remaining issue was
whether MEA’s publicly available information was currently in compliance with
3 AAC 50.790(d). It found that MEA was fully in compliance, and that it did not need
to supply the data and methodology underlying its avoided-cost calculations.
Accordingly, the Commission denied Alpine’s motion for summary judgment, granted
MEA’s cross-motion for summary judgment, and closed the docket.
               2.     Superior court proceedings
               Alpine appealed the Commission’s decision to the superior court. Alpine
argued that the Commission lacked the power to require it to formally certify its projects
before requiring MEA to treat the projects as qualifying facilities. Instead, Alpine
claimed, the Commission should have required MEA to provide a specific tariff for each
of Alpine’s projects, and to purchase electric energy from these projects at a rate based
on the avoided costs at the time it filed the Formal Complaint.27 Even if the Commission
was authorized to require formal certification, Alpine argued, it should have held an
evidentiary hearing before doing so. Alpine also reiterated its arguments that the
Commission’s regulations require utilities to publish a general qualifying facility tariff
and to provide the data and methodology underlying their publicly available avoided-cost
information.
               The superior court affirmed the Commission in full. It found that the
Commission interpreted its own regulations reasonably in finding it had the authority to

       27
             Alpine had argued before the Commission that it was entitled to a rate based
on the avoided costs as of May 2008, when it first requested interconnection. In the
superior court, and in the present appeal, it argues instead that it is entitled to a rate based
on the avoided costs “no later than the filing of the Formal Complaint.”

                                             -12-                                         7085

require formal certification, and that it properly exercised such authority here. It found
that no evidentiary hearing was necessary because the Commission simply determined,
based on the facts alleged by Alpine, that no good cause existed to open an investigation.
And it found that the Commission reasonably interpreted its regulations to contain no
general tariff or data-and-methodology requirement. Alpine now appeals.
III.   STANDARD OF REVIEW
             “In an administrative appeal we independently review the merits of the
agency’s decision.”28 We apply the “reasonable basis” test to the Commission’s decision
not to conduct an investigation.29 Under the deferential “reasonable basis” test, we
consider whether the agency’s decision was “arbitrary, capricious, or unreasonable,”30
and whether the agency “[took] a hard look at the salient problems and . . . genuinely
engaged in reasoned decision making.”31
             “We review an agency’s interpretation of its own regulations under the
reasonable and not arbitrary standard”32 when the agency’s interpretation “implicate[s]
special agency expertise or the determination of fundamental policies within the scope

       28
             Luper v. City of Wasilla, 215 P.3d 342, 345 (Alaska 2009) (citing Griswold
v. City of Homer, 55 P.3d 64, 68 (Alaska 2002); Balough v. Fairbanks N. Star Borough,
995 P.2d 245, 254 (Alaska 2000)).
       29
             Jager v. State, 537 P.2d 1100, 1107 (Alaska 1975).
       30
             Denali Citizens Council v. State, Dep’t of Nat. Res., 318 P.3d 380, 385
(Alaska 2014) (quoting Ninilchik Traditional Council v. Noah, 928 P.2d 1206, 1213
(Alaska 1996)).
       31
             Id. (quoting Kachemak Bay Conservation Soc’y v. State, Dep’t of Nat. Res.,
6 P.3d 270, 275 (Alaska 2000)).
       32
             Stosh’s I/M v. Fairbanks N. Star Borough, 12 P.3d 1180, 1183 (Alaska
2000) (citing Handley v. State, 838 P.2d 1231, 1233 (Alaska 1992)).

                                          -13-                                      7085

of the agency’s statutory function.”33 This “deferential standard of review properly
recognizes that the agency is best able to discern its intent in promulgating the regulation
at issue.”34 “We will affirm the agency’s interpretation under this deferential standard
if the agency’s interpretation is a reasonable one.”35
                 However, “[t]he ‘substitution of judgment’ test is the appropriate standard
for interpreting regulations . . . when the agency interpretation does not concern
administrative expertise as to either complex subject matter or fundamental policy.”36
Questions of statutory interpretation are also reviewed under the “substitution of
judgment” test unless the agency’s “interpretation of law turns on its technical expertise
or ‘the determination of fundamental policies within the scope of [its] statutory
function.’ ”37
IV.	   DISCUSSION
       A.	       The Commission May Require Alpine To Formally Certify Its
                 Projects.
                 1.	   Federal law does not prohibit the Commission from requiring
                       formal certification.

       33
            Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896, 903
(Alaska 1987).
       34
           Stosh’s I/M, 12 P.3d at 1183 (quoting Rose v. Commercial Fisheries Entry
Comm’n, 647 P.2d 154, 161 (Alaska 1982)).
       35
             Anderson v. State, Dep’t of Revenue, 26 P.3d 1106, 1109 (Alaska 2001)
(citing Handley, 838 P.2d at 1233).
       36
                 Borkowski v. Snowden, 665 P.2d 22, 25 (Alaska 1983) (citing Rose, 647
P.2d at 161).
       37
            W. States Fire Protection Co. v. Municipality of Anchorage, 146 P.3d 986,
989 (Alaska 2006) (quoting Tesoro, 746 P.2d at 903).

                                             -14-	                                    7085

              Alpine argues that FERC has exclusive jurisdiction to determine qualifying­
facility status, and that it has done so here by accepting the self-certifications. It claims
that the Commission must therefore defer to this determination and accept Alpine’s self-
certifications as conclusive evidence of the projects’ qualifying-facility status.
              Neither Congress nor FERC has directly addressed this issue. PURPA itself
simply sets standards for qualifying facilities38 and delegates implementation to FERC.39
FERC’s regulations set up the certification system, but do not specify whether state
regulators and others must treat self-certification as conclusive evidence of qualifying-
facility status, or if they must give any deference at all to a self-certification.40 FERC has
suggested in its orders that state regulators may require formal certification, but it has
never expressly ruled on this point.41
              It is clear, however, that FERC granted states significant discretion in
implementing and enforcing its regulations. FERC’s regulations implementing section
210 of PURPA “afford the State regulatory authorities . . . great latitude in determining
the manner of implementation of [FERC’s] rules, provided that the manner chosen is

       38
              16 U.S.C. § 796(18)(B) (2012).
       39
              Id. § 824a-3(n).
       40
              18 C.F.R. §§ 292.203, .205, .207 (2015).
       41
              See Chugach Elec. Ass’n, 121 FERC 61,287 ¶ 21 (2007) (“[T]here [are]
reasons that a [qualifying facility] may want or need [formal] certification (including the
requirement of some lenders, utilities, or state regulators that a generator seeking
[qualifying facility] status and the benefits of PURPA be [formally] certified) . . . .”);
Revisions to Form, Procedures, and Criteria for Certification of Qualifying Facility
Status, 75 Fed. Reg. 15,950, 15,951 (Mar. 30, 2010).
                                            -15-                                        7085

reasonably designed to implement the requirements of Subpart C.”42 Subpart C regulates
sales and purchases between qualifying facilities and utilities,43 and includes the
obligation for utilities to purchase energy from qualifying facilities.44 FERC specifically
contemplates state implementation by regulation as well as by case-by-case dispute
resolution.45
                It is also clear that FERC has exclusive jurisdiction over determinations of
qualifying-facility status and that states may not make such determinations.             In
Independent Energy Producers Ass’n v. California Public Utilities Commission, the
Court of Appeals for the Ninth Circuit invalidated a California regulatory scheme that
permitted utilities to unilaterally decide that qualifying facilities with whom they
contracted, including formally certified qualifying facilities, no longer met the federal
operating and efficiency standards.46 The state regulations permitted utilities to reduce
the purchase rates for those facilities by 20% instead of paying the full avoided-cost rate
to which they would otherwise be entitled.47 The court invalidated the scheme, holding

       42
           Small Power Production and Cogeneration Facilities; Regulations
Implementing Section 210 of PURPA, 45 Fed. Reg. 12,214, 12,230-31 (Feb. 25, 1980).
       43
                18 C.F.R. § 292.301(a).
       44
                Id. § 292.303(a).
       45
            Small Power Production and Cogeneration Facilities; Regulations
Implementing Section 210 of PURPA, 45 Fed. Reg. at 12,231; FERC v. Mississippi,
456 U.S. 742, 751 (1982).
       46
                36 F.3d 848, 858 (9th Cir. 1994).
       47
                Id. at 852.
                                            -16-                                      7085

that PURPA required a federal decision maker applying uniform standards for all
determinations of qualifying-facility status.48
               Alpine claims that its self-certifications mean that FERC has already
determined its projects’ qualifying-facility status and that the Commission impermissibly
disregarded that determination and made a determination of its own. We must therefore
decide whether self-certifications constitute determinations of qualifying-facility status
by FERC, or whether the Commission’s decision not to enforce Alpine’s asserted
PURPA rights at this time is itself an impermissible determination of qualifying-facility
status.
               Self-certification alone does not create a qualifying facility; under FERC’s
regulations, a cogeneration facility is a qualifying facility only if it meets certain
standards and is certified, either by self-certification or formal certification.49 FERC
does not formally review self-certifications; rather it examines the filing “to determine
that the self-certifier has provided the information required by the regulations,” but it
does not check the accuracy of that information or determine whether the information
provided, if accurate, demonstrates qualifying-facility status.50 And when FERC accepts
notices of self-certification from project owners, it specifically informs the owner that
“[a]cceptance for filing does not constitute approval of any application or self-certifying
notice.”
               Alpine’s assertion that FERC determined that “its projects as described [in
its self-certifications] were valid [q]ualifying [f]acilities” is therefore incorrect. Alpine

          48
               Id. at 854.
          49
               18 C.F.R. § 292.203(b).
          50
              Revisions to Form, Procedures, and Criteria for Certification of Qualifying
Facility Status, 75 Fed. Reg. 15,950, 15,951 (Mar. 30, 2010).

                                            -17-                                       7085

made that determination; FERC simply verified that Alpine filled out the self-
certification form correctly. FERC has also made clear in a different context that “no
[FERC] determination or approval attaches to a self-certification” because “no [FERC]
action is required or even contemplated.”51
              Self-certifications are therefore not determinations of qualifying-facility
status within the meaning of Independent Energy Producers. The court in that case
relied on PURPA’s definition of a qualifying facility as a facility that “[FERC]
determines, by rule, meets such requirements . . . as [FERC] may, by rule, prescribe.”52
It also highlighted a passage from PURPA’s legislative history stating that qualifying
facilities were to be “identified through [FERC] action.”53 But as FERC has expressly
stated, it takes no action on self-certifications, and it does not determine whether a self-
certified facility meets the substantive requirements.
              Nor did the Commission make any determination of its own here. Instead,
it recognized that no determination has yet been made and that a determination from
FERC will likely be needed to settle the dispute between the parties. The Commission
did refer to the standards for qualifying-facility status, but it did not determine whether
Alpine’s projects met those standards; instead, it assessed the likelihood that FERC

       51
              Chugach Elec. Ass’n, 121 FERC 61,287 ¶ ¶ 53-54 (2007) (explaining why
no filing fees attach to a self-certification); see also id. at ¶ 31 (“[FERC] staff’s not
issuing a deficiency letter to a self-certified facility does not constitute a finding as to any
matter contained in such a self-certification.”).
       52
             Indep. Energy Producers, 36 F.3d at 854 (omission in original) (quoting
16 U.S.C. § 796(18)(B)(I) (2012) (emphasis added)).
       53
           Id. (quoting H.R. Conf. Rep. No. 1750 at 89, reprinted in 1978
U.S.C.C.A.N. 7659, 7797, 7823 (1978) (emphasis added)).

                                             -18-                                         7085

would consider the projects qualifying facilities, and on that basis, allocated the cost of
obtaining a FERC determination to Alpine.
              Neither FERC nor the Commission has determined the qualifying-facility
status of Alpine’s projects, and federal law does not otherwise prohibit the Commission
from requiring self-certified qualifying facilities to formally certify. This authority falls
well within the Commission’s “great latitude” to implement PURPA’s power purchase
requirements.54 As a result, the Commission need not defer to Alpine’s self-certifications
and has the authority to require Alpine to obtain formal certification of its projects from
FERC before requiring MEA to treat them as qualifying facilities.55
              2.	    It was reasonable for the Commission to require formal
                     certification here.
              The Commission determined that “legitimate concerns” about Alpine’s
projects’ qualifying-facility status exist and that therefore no good cause existed to open
an investigation, based on three factors: (1) the lack of commitments from thermal hosts
and the conditional nature of agreements with potential thermal hosts; (2) the lack of
infrastructure to deliver thermal energy; and (3) “the speculative nature of Alpine[’s] . . .
largest host, Mat-Su Produce.”
              Alpine argues that the Commission’s conclusion was unreasonable, but it
does not actually address any of the bases for the Commission’s decision. Instead, it
argues that these circumstances came to pass only because of MEA’s failure to provide
avoided-cost information, which made it impossible to “firm up the financing and

       54
           Small Power Production and Cogeneration Facilities; Regulations
Implementing Section 210 of PURPA, 45 Fed. Reg. 12,214, 12,230. (Feb. 25, 1980).
       55
              Alpine argued before the superior court that the Commission incorrectly
interpreted its own regulations to permit requiring formal certification. It did not raise
this argument in this appeal, so we treat it as waived and do not address it.
                                            -19-	                                      7085

contractual commitments necessary to proceed” with developing the projects. Alpine
also argues that the standard applied by the Commission — “legitimate concerns”
regarding qualifying-facility status — was unreasonable.
               Alpine first argues that MEA thwarted the development of its projects by
failing to provide the required avoided-cost information and that, as a remedy, MEA
should be compelled to treat Alpine’s projects as qualifying facilities. Instead, the
Commission decided to enforce the avoided-cost disclosure requirement only
prospectively.56 Although the Commission did not explain why it made this choice,
Alpine does not argue that its proposed remedy was the Commission’s only option. The
Commission could reasonably have decided that the potential cost to ratepayers of
forcing MEA to contract with Alpine before it received formal certification outweighed
any benefit.
               Whatever the reasons for the speculative nature of Alpine’s projects, the
Commission’s actual concerns about the projects were reasonable. Alpine produced
agreements with two thermal hosts, but those agreements were conditioned on Alpine
contracting with MEA for the sale of electric energy. There is no evidence that Alpine
had obtained any commitments, even conditional ones, from its other potential thermal
hosts, and many of these hosts were the same as or similar to proposed hosts for prior
decertified projects. In addition, there was no existing infrastructure to deliver thermal
energy to customers. And there is no evidence that the largest proposed thermal host,
Mat-Su Produce, had any plans to do business in Alaska.

      56
             FERC does impose penalties on utilities for failure to provide the avoided-
cost information required by 18 C.F.R. § 292.302, which 3 AAC 50.790(d) mirrors. See
18 C.F.R. §§ 292.302, 292.401 (2015). Alpine did not seek this remedy in the
proceedings before the Commission.

                                          -20-                                      7085

              In 2007, FERC decertified two proposed projects very similar to those that
Alpine now proposes.57 In its order, FERC found that the project developer “simply
ha[d] not provided sufficient basis for [FERC] to conclude that the thermal uses . . . will
materialize.”58 It declined to “assume that [the developer’s] optimistic projections will
come true,”59 and noted that the proposed thermal hosts, as well as the infrastructure
required to actually provide thermal energy, did not exist in Southcentral Alaska.60 As
a result, it could not conclude that the thermal energy would be put to a “productive and
beneficial purpose,”61 or that the projects had any purpose other than selling electric
energy to a utility.62
              Alpine’s projects share these characteristics.        There was still no
infrastructure in place in the region to provide thermal energy, its projects had no firm
thermal hosts, and the largest proposed thermal host — Mat-Su Produce — did not yet
exist.63 Although there are differences — for example, most of the decertified projects’

       57
              Chugach Elec. Ass’n, 121 FERC 61,287 (2007).
       58
              Id. at ¶ 39.
       59
              Id. at ¶ 40.
       60
              Id. at ¶ 39.
       61
              Id. at ¶ 40.
       62
              Id. at ¶ 46.
       63
             See Search Business License Database, DEP’T OF COMMERCE, CMTY., &
ECON. DEV., https://www.commerce.alaska.gov/cbp/MAIN/CBPLSearch.aspx?mode=Bl
(showing no search results when searching “Business Name” for “Mat-Su Produce” and
“Mat Su Produce”) (last visited Feb. 16, 2016).
                                           -21-                                      7085

thermal hosts were unnamed,64 while Alpine did identify most of its projects’ hosts —
it was reasonable for the Commission to conclude that the similarities raised legitimate
concerns that Alpine’s projects would not meet the qualifying facility standards.
              Finally, Alpine contests the standard applied by the Commission — that if
“legitimate concerns” exist about the projects’ qualifying-facility status, there is no good
cause to open an investigation. It argues that this standard requires Alpine to “establish
that the presently recognized validity of its projects cannot later be challenged,” and that
“[t]he mere existence of legitimate concerns about the validity of the projects[’ self-
certifications] does not support the conclusion that [good] cause does not exist.” It also
asserts that the Commission’s “good cause” standard “must be read very broadly in an
action to enforce PURPA rights.”
              We addressed the Commission’s “good cause” standard in Jager v. State,
and held: “[T]he Commission is not compelled to act by the mere filing of a complaint
nor can the [C]ommission arbitrarily deny relief to a [party] who can demonstrate a
sufficient probability that his complaint is valid.”65 We did not define “sufficient
probability,” however; instead, we noted the Commission’s “discretionary authority to
consider complaints and undertake . . . investigations,”66 and we listed a number of
factors that the Commission may take into account when deciding whether to open an
investigation: “[T]he [C]ommission must be free to weigh the charges and data

       64
              Chugach Elec. Ass’n, 121 FERC 61,287 ¶ 33.
       65
              537 P.2d 1100, 1108 (Alaska 1975).
       66
              Id. at 1106.

                                           -22-                                       7085

presented and the costs to the public and the utility . . . to determine whether further
proceedings are in the public interest.”67
              The Commission first articulated the “legitimate concerns” standard in a
2009 proceeding.68 There, it found that the “legitimate questions” about a self-certified
project’s qualifying-facility status meant that “it [was not] in the public interest . . . to
proceed on this complaint until the validity of [the project’s] re-self-certification is
known.”69 It particularly noted that “the project owner, who possess[ed] al[l] the
pertinent information about [t]he project and [stood] to profit from the project,” was in
the best position to obtain a FERC ruling on the project’s status.70 In its brief, the
Commission reiterates this point and points out the potential cost to ratepayers if MEA
is required to assume the cost of challenging a project’s qualifying-facility status in every
instance.71
              The Commission’s interpretation of its “good cause” standard is entirely
reasonable. It could have come to a different conclusion — for example, by adopting
Alpine’s argument that the “strong public interest in seeing cogeneration projects
developed” dictates a more forgiving standard for questionable qualifying facilities. But

       67
              Id.
       68
            KAPP, LLC v. Municipal Light & Power, Docket U-09-067(1), Order No. 1
(Regulatory Comm’n of Alaska Aug. 19, 2009).
       69
              Id. at 6.
       70
              Id.
       71
            As the Commission points out, encouraging cogeneration projects is not the
only purpose of PURPA; it was also intended to ensure “equitable rates to electric
consumers.” 16 U.S.C. § 2611 (2012).
                                             -23-                                      7085

the Commission has significant discretion over whether to initiate an investigation,72 and
in this case it has determined that when legitimate concerns exist regarding a project’s
qualifying-facility status, the public interest is best served by allocating the costs of
obtaining a FERC ruling to the project owner, rather than to the utility. This decision
was reasonable and within the Commission’s discretion to make.73
              3.	    The Commission was not required to hold an evidentiary
                     hearing.
              Alpine argues that the Commission should have held an evidentiary hearing
before deciding, on the basis of the evidence before it, that no good cause existed to open
an investigation. Alpine cites no support for this position, but asserts that “[i]f the
Commission is going to weigh . . . evidence . . . , it must give Alpine an opportunity to
present evidence and challenge the statement[s] of the utility in an evidentiary hearing.”
But the Commission’s procedures do not provide any right to an evidentiary hearing on
whether good cause exists to open an investigation.74 Instead, the Commission must act
“when a complainant brings evidence before it amounting to probable cause . . . that [his
complaint is valid].”75 Here, the Commission simply determined that Alpine had not
presented evidence sufficient to justify opening an investigation. It was not required to
hold an evidentiary hearing before making this determination.

       72	
              Jager, 537 P.2d at 1106.
       73
              Because we affirm the Commission’s decision to dismiss without prejudice
all of Alpine’s claims that depend on the qualifying-facility status of its projects, we do
not address any of those claims here. Specifically, we do not address what should be
included in Alpine’s avoided-cost rates if its projects are qualifying facilities or whether
the Commission’s waiver of the specific tariff requirement is still valid.
       74
              See 3 AAC 48.130.
       75
              Jager, 537 P.2d at 1108.

                                           -24-	                                      7085

       B.	    MEA Is Not Required To File A General Qualifying Facility Tariff Or
              The Data And Methodology Underlying Its Avoided-Cost Information.
              1.	    These issues are partially moot.
              Alpine claims that the Commission’s regulations require utilities to provide
a general tariff for qualifying facilities and to provide the data and methodology
underlying their avoided-cost disclosures. It argues that the Commission erred by failing
to require MEA to do so. On November 20, 2015, however, the Commission amended
the regulations on which Alpine bases this argument.76 The new regulations are
unambiguous; they do not require a general tariff or data and methodology. Alpine’s
claims on these points are therefore moot.
              “[We] refrain from deciding questions where the facts have rendered the
legal issues moot.”77 This includes situations where “the party bringing the action would
not be entitled to any relief even if it prevails.”78 “If a regulation is amended, the case
may become moot if the specific relief that the parties seek is no longer available.”79
This is because “[i]ssuing a decision regarding regulations that are no longer in effect is

       76
            In re Alaska Envtl. Power, LLC, Order R-13-002(5) (Regulatory Comm’n
of Alaska Nov. 20, 2015).
       77
              Ulmer v. Alaska Rest. & Beverage Ass’n, 33 P.3d 773, 776 (Alaska 2001)
(alteration in original) (quoting O’Callaghan v. State, 920 P.2d 1387, 1388 (Alaska
1996)).
       78
            Ahtna Tene Nené v. State, Dep’t of Fish & Game, 288 P.3d 452, 457
(Alaska 2012) (quoting Ulmer, 33 P.3d at 776).
       79
              Id. at 458.

                                           -25-	                                     7085

merely an academic exercise; it provides no explanation of a party’s rights under the
existing law.”80
              Even if Alpine’s interpretation of the former regulations is correct, the relief
it seeks is no longer available under the new regulations. The section on which Alpine
relied for its general tariff argument, 3 AAC 50.790(a), now reads: “Not later than
60 days after receipt of a written request for interconnection from a qualifying facility,
an electric utility shall file with the [C]ommission for its consideration a tariff for . . . the
requesting qualifying facility . . . .”81 The new regulation makes abundantly clear that,
contrary to Alpine’s argument, no tariff filing is required until a qualifying facility
requests interconnection. And 3 AAC 50.790(e) now contains a complete list of the
information that electric utilities are required to “compile and maintain for public
inspection.” The data and methodology underlying that information is not an item on
that list.82 Accordingly, even if the information Alpine seeks was once required, it is not
now. Alpine is not entitled to any relief on these claims even if it prevails, and these
claims are therefore moot.83

       80
              Id. at 457.
       81
              In re Alaska Envtl. Power, LLC, Order R-13-002(5) app. at 9 (emphasis
added).
       82
              See id. app. at 10.
       83
               It is unclear whether Alpine is requesting only a current general tariff and
data and methodology, or historic information as well. But the historic information
would only be relevant if Alpine’s projects are in fact entitled to an avoided-cost rate
calculated as of some prior date, which is only the case if its projects are qualifying
facilities. The Commission dismissed without prejudice all of Alpine’s claims whose
resolution depends on the qualifying-facility status of its projects. Because we approve
of this procedure and therefore do not reach the dismissed claims, we do not address
whether Alpine’s claims to historic information are also moot.

                                              -26-                                         7085

               We nevertheless retain the discretion to address moot issues, and will do
so if the public interest exception applies.84 We must therefore address “(1) whether the
disputed issues are capable of repetition, (2) whether the mootness doctrine, if applied,
may cause review of the issues to be repeatedly circumvented, and (3) whether the issues
presented are so important to the public interest as to justify overriding the mootness
doctrine.”85
               None of these factors are present here. “[W]e have refused to apply the
public interest exception to . . . situations where the applicable statute or regulation was
no longer in force.”86 Because 3 AAC 50.790 has been amended, there is no reason to
believe that MEA’s alleged violations of the former regulation will recur.87 In the
unlikely event that the Commission restores the former regulation, Alpine may raise its
claims again in the same manner it raised them here. And the public interest is not
served by “an advisory opinion on facts and law that are now largely irrelevant,”88 such
as a regulation that no longer exists.
               For these reasons, Alpine’s claims that the Commission’s regulations
require MEA to provide a general qualifying facility tariff and the data and methodology

       84
               Ahtna Tene Nené, 288 P.3d at 459.
       85
            Id. (quoting Ulmer v. Alaska Rest. & Beverage Ass’n, 33 P.3d 773, 777-78
(Alaska 2001)).
       86
             Alaska Cmty. Action on Toxics v. Hartig, 321 P.3d 360, 367 (Alaska 2014)
(quoting Ahtna Tene Nené, 288 P.3d at 459).
       87
               See Ahtna Tene Nené, 288 P.3d at 459 (“These issues are not capable of
repetition as this regulation is no longer in force and the subsequent amended versions
are substantially different from the disputed [prior] version.”).
       88
               Alaska Cmty. Action, 321 P.3d at 369.

                                           -27-                                       7085

underlying its avoided-cost information are moot. Because the public interest exception
does not apply, we decline to address these claims.
               2.	    Federal law does not require utilities to publish their data and
                      methodology.
               Alpine also argues that FERC’s regulations require utilities to provide the
data and methodology underlying their avoided-cost information. Alpine points to
18 C.F.R. § 292.302(e), which provides: “(1) Any data submitted by an electric
utility . . . shall be subject to review by the State regulatory authority . . . . (2) In any such
review, the electric utility has the burden of coming forward with justification for its
data.”89 The justification requirement, Alpine claims, imposes a general obligation on
utilities.
               Alpine’s interpretation of FERC’s regulations is incorrect. It reads
18 C.F.R. § 292.302(e) to require Commission review of all avoided-cost information
submitted by utilities, and to require utilities to justify all such information. But the
regulation only provides that such information will be “subject to review.”90 This is not
mandatory language. The plain text provides only that states may review the avoided-
cost information provided by a utility and, that if the state does so, the utility must justify
that information.
               FERC added 18 C.F.R. § 292.302(e) to the rule at the end of the rulemaking
process, in response to comments that “the proposed rule did not address the issue of
validation of the data to be provided.”91 The initial proposed rule did not provide for any

        89
               18 C.F.R. § 292.302(e) (2015).
        90
               Id. § 292.302(e)(1) (emphasis added).
        91
           Small Power Production and Cogeneration Facilities; Regulations
Implementing Section 210 of PURPA, 45 Fed. Reg. 12,214, 12,219 (Feb. 25, 1980).

                                              -28-	                                         7085

state review of such data.92 It would be odd for FERC to impose such a heavy reporting
burden on utilities (and an onerous review requirement on states) as a last-minute
alteration to the rule, and accordingly we believe that FERC simply intended to clarify
that states may review the avoided-cost information provided by utilities as they deem
necessary.
V.    CONCLUSION
             We DISMISS as moot the appeal regarding Alpine’s claims to a general
qualifying-facility tariff and to avoided-cost data and methodology. We otherwise
AFFIRM the decision of the superior court.

      92
             Small Power Production and Cogeneration — Rates and Exemptions,
44 Fed. Reg. 61,190, 61,203 (Oct. 24, 1979).

                                         -29-                                    7085