That Time This Blog Went Entirely Off The Rails: A Quarantine-Influenced Dance Party

The virtual version

In re Investigation into Programmatic Adjustments to the Standard-Offer Program, 2018 VT 52

By Elizabeth Kruska

Warning: This post started one particular way and then sort of turned into . . . a lot of links to loosely related songs. Regular readers have likely noticed I know a song for just about every occasion. I’m writing this during the quarantine, which means you’re probably reading it during the quarantine. You can read the post for its content, or you can skip through to all the links and have a bit of a dance party in your socks. We here at SCOV Law Blog are not immune to the virus or to quarantine-onset boredom. We also recognize this may send you down a YouTube rabbit hole. We take no responsibility if you inadvertently end up watching classic SNL sketches, or learning how to fix a toaster. These are weird times. Maybe the end of the world, as we know it (and I feel fine).

Anyway, on to the case! Back in 2005 the Legislature created the standard-offer program, which is meant to promote the creation of energy through renewable sources. It allowed the Public Utility Commission (now known as the Public Service Board) to authorize long term power purchases at a set price. This guarantees a price for energy for the duration of the contract, regardless of fluctuations in market price. Utilities are then required to purchase energy at that set price. There are some different requirements for different types and sizes of energy producers. To get energy producers to participate, the Commission solicits bids from for qualifying projects, and sets a price cap. The goal is to keep the cost as low as feasible while still offering an appropriate price over the course of the project.

In 2016, the Commission noticed that about 75% of the participants were solar power-based. The Commission wanted to ensure a broad range of energy sources, and so it set aside a “technology diversity developer block” in order to encourage non-solar companies to participate. That way there’d be power generated by the sun, but there’d also be power generated by wind, or biomass, or good vibes or whatever. Companies that used those technologies could bid and try to get into the program that way. Everyone else would bid, and the contracts would be given solely on bid price.

Following this rule change, the Legislature created a pilot program for these standard-offer projects at “preferred locations.” These locations included existing parking lot canopies, landfills, brownfield sites, and existing buildings. This seems to make sense – if a building is already there, why not toss some solar panels or a wind turbine on the roof and make some energy? After all, the world made of energy, the world is electricity.

In October 2016 the Commission held a workshop about the pilot program, and many different stakeholders filed comments. The appellant here, Renewable Energy Vermont (REV) filed comments. REV is a trade organization committed to promoting renewable energy and energy efficiency in Vermont. It recommended the Commission ought to keep the technology diversity block that the Commission had created before the Legislature made the pilot program.

For 2017 the Commission ordered that 1/3 of projects would come from the preferred locations under the new legislative pilot program. The annual allocation was also broken down further so that different portions would come from different sources. The non-solar category got winnowed down. The Commission allocated that to small wind and food waste anaerobic digestion projects (I wish I had a song for anaerobic digestion. I just don’t know one.). The net effect was that there was no capacity to set aside bids for large wind, landfill gas, biomass, and hydroelectric power. Those companies could still bid but would be in the general bid pool, not a special pool that excluded solar.

REV was concerned about the lack of diversity of renewable energy sources under this bid structure and asked the Commission to reconsider its ruling. The Commission said no, they wouldn’t do that, because they believed the sources would be sufficiently diverse to generate power from various sources. REV filed another motion, arguing that the Commission’s ruling was the first time it ever gave any sort of rationale for excluding large wind producers from the technology diversity developer block, which means it was the first time it ever got to respond to that. Again, the Commission said no, and this time said it was because the motion was untimely.

So, REV appealed, seeking a ruling from SCOV to tell the Commission to set aside capacity for different kinds of renewable power. SCOV affirms the Commission, reasoning that REV essentially wanted an advisory opinion. Appellate courts almost always never issue advisory opinions, and this time is no different.

For a court to issue an opinion there has to be a case involving “actual controversies arising between adverse litigants.” That means there have to be parties, and at least one of the parties has to be “suffering the threat of injury to a protected legal interest,” and not just “speculating about the impact of some generalized grievance.” And there’s got to be more than just a chance or a probability that the party will suffer a harm; it’s got to be likely.

Here, REV’s argument is basically that without the set-aside and specific price caps for large wind, hydroelectric power, and biomass, that those industries would likely get squeezed out of the bid process and out of the contracts for the future.

SCOV says this is too speculative. First of all, when REV briefed the case, there wasn’t even a request for proposals. The Commission is required to review and set price caps for each technology category every year. It’s a little hard to say that a particular industry is going to get shut out of bids, when every year the whole system gets reviewed, and potentially adjusted, before a request for proposals even gets made. Also, the Legislature is able to alter the allocation.

Because REV only challenges future allocations – which don’t exist yet – this is far too speculative and amounts to seeking an advisory opinion. Courts generally can’t go for that. If it turns out there’s actual harm to an industry as a result of a decision made by the Commission in the future, the right move is for the aggrieved party to seek redress through the court at that point.

Well, friends, this has all been wonderful, but now I’m on my way. 

Wash your hands.