Court Opinion

ID: 9665086
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:39:11.535064+00
Date Added: 2024-06-11T18:15:12.794589
License: Public Domain

LARSON, J.
(dissenting).
It is true, as the majority notes, that PURPA does not require net metering. It is certainly not true, however, that PURPA prohibits it as the special concurrence contends. The latter is obvious from the fact that both FERC and the Iowa Utilities Board (IUB) require net metering by all utilities under their jurisdiction. In fact, FERC has expressly ruled that net metering does not violate PURPA. MidAmerican Energy Co., Docket No. EL99-3-000, 94 F.E.R.C. ¶ 61,340 (Mar. 28, 2001).
Under 16 U.S.C. § 824a-3(a), state regulatory agencies are required to implement cogeneration rules' for all utilities for which they have “ratemaking authority.” Unfortunately for these plaintiffs, they live in an area served by an electric cooperative, and electric cooperatives are not subject to rate regulation by the IUB. A wind generator in an area served by a private utility could economically operate because the utility would be required to net meter. In those areas, net metering would make alternative generation economically feasible, while those in areas served by Midland would not.
The main purpose of PURPA was to encourage alternative sources, of energy and to reduce our dependence on fossil fuels. See Fed. Energy Regulatory Comm’n v. Mississippi, 456 U.S. 742, 745-51, 102 S.Ct. 2126, 2130-33, 72 L.Ed.2d 532, 537-42 (1982). Midland could, in keeping with the spirit of PURPA, use net metering to encourage alternative electric generation, but it has consistently .thwarted cogeneration development. As noted in a September 21, 2004 order (provided to this court by Midland after oral argument to support its rehearing petition), FERC noted it had previously initiated enforcement proceedings against Midland. It said that
initiating such a proceeding was appropriate because for over five years Midland has abused its role as a “nonregu-lated electric utility” under PURPA to frustrate Mr. Swecker’s attempts to exercise his rights as [an alternative generator].
As a practical matter, if Midland was to allow alternative generation, this would have a negligible impact on its income. Of its 6800 customers, only a small handful of cogenerators are proposed.
PURPA provides leverage on public utilities to accommodate alternative energy producers. 16 U.S.C. § 824a-3(a) provides:
Not later than 1 year after November 9, 1978, the Commission shall prescribe ... such rules as it determines necessary to encourage cogeneration and small power production ... which rules require electric utilities to offer to—
(1) sell electric energy to qualifying cogeneration facilities and qualifying small power production facilities and
*311(2) purchase electric energy from such facilities.
Under § 824a-3(b),
[t]he rules prescribed under subsection (a) of this section shall insure that, in requiring any electric utility to offer to purchase electric energy from any qualifying cogeneration facility or qualifying small power production facility, the rates for such purchase—
(1) shall be just and reasonable to the electric consumers of the electric utility and in the public interest, and
(2) shall not discriminate against qualifying cogenerators or qualifying small power producers.
No such rule prescribed under subsection (a) of this section shall provide for a rate which exceeds the incremental cost to the electric utility of alternative electric energy.
(Emphasis added.)
It should appear obvious that Midland’s charging a cogenerator such as the Sweck-ers three times what Midland pays the Sweckers for the same commodity is not “just and reasonable.” Further, Midland’s obstructiveness in encouraging alternative generation frustrates the purpose of PURPA and surely cannot be considered to be “in the public interest.”
Midland thumbs its nose at fairness and the goals of PURPA and claims, in effect, that no one can do anything about it. It has successfully dodged the bullet in federal court by claiming that court has no subject matter jurisdiction. See Windway Techs., Inc. v. Midland Power Coop., No. C00-3089MWB, 2001 WL 1248741 (N.D.Iowa Mar.5, 2001). Midland has further been immunized from any control by the IUB, which, if it had rate-making authority, would require net billing, as it does for its regulated utilities. Midland contends, in effect, that this court cannot grant relief to the plaintiffs without acting as a super utility regulator. However, when a federal court rejects a claim such as this one based on subject matter jurisdiction, that does not mean a utility is free from any judicial enforcement of the rules requiring compliance with PURPA. When a federal district court rejects a case on subject matter jurisdiction grounds, the case is properly heard in state court. See Greensboro Lumber Co. v. Ga. Power Co., 643 F.Supp. 1345, 1374 (N.D.Ga.1986) (“Any subsequent claim that a nonregulat-ed utility has failed to adhere to its own implementation plan in its dealings with a particular qualifying facility must be brought in state court, which has exclusive jurisdiction ⅛ enforce any requirement’ of a nonregulated utility’s implementation plan. That this is FERC’s interpretation of PURPA’s enforcement mechanism is clear.” (Citations omitted.)); see also Snow Mountain Pine Co. v. C.P. Nat’l Corp., Docket No. EL84-25-000, 30 F.E.R.C. ¶ 61,293 (Mar. 19, 1985) (“As the Commission has previously noted, complaints regarding an alleged refusal to purchase power from a qualifying facility and the rates for such purchases are matters properly brought in a State forum.’’ (Emphasis added.)); Roche Prods., Inc., 29 F.E.R.C. ¶ 61,098 (Oct. 26, 1984) (“Matters of application of [a utility’s] rules ... are properly brought' before State judicial forums.”); Policy.. Statement Regarding the Commission’s Enforcement Role Under Section 210 of the Public Utility Regulatory Policies Act, of 1978, 48 Fed.Reg. 29475, 29476, 23 F.E.R.C. ¶ 61,304, 61,645 (June 27,1983).
In this case, the plaintiffs do not ask that they be compensated for all electricity generated at the full market rate. That would clearly be contrary to PURPA and the regulations promulgated under it. However, they do ask for the right to make in-kind exchanges of electricity and *312to pay to Midland the full market rate only for the excess power used by the plaintiffs. Contrary to Midland’s assertion," and the majority’s holding, this-is a matter properly before an Iowa district court;
This is an interlocutory appeal, and the matter will have to be remanded to the district court on the remaining issues. I believe the district court should be permitted to make an assessment of. the evidence in this case regarding whether the rate structure imposed by Midland is just and reasonable under the circumstances and properly serves the public’s interests in light of PURPA and FERC rules. I would modify the district court judgment and remand for further proceedings.