Ellis-Hall Consultants v. Public Service Commission ( 2016 )

This opinion is subject to revision before final
publication in the Pacific Reporter
2016 UT 34IN THE
SUPREME COURT OF THE STATE OF UTAH
ELLIS-HALL CONSULTANTS,
Petitioner,
v.
PUBLIC SERVICE COMMISSION OF UTAH,
Respondent.
No. 20140616
Filed July 28, 2016
On Petition for Review of an Administrative Order
Docket No. 14-035-24
Attorneys:
Mary Anne Q. Wood, Stephen Q. Wood, Salt Lake City,
for petitioner
Sean D. Reyes, Att’y Gen., Nancy L. Kemp, Justin C. Jetter,
Asst. Att’ys Gen., Salt Lake City, for respondent
ASSOCIATE CHIEF JUSTICE LEE authored the opinion of the Court, in
which CHIEF JUSTICE DURRANT, JUSTICE DURHAM, JUSTICE HIMONAS,
and JUSTICE PEARCE joined.
ASSOCIATE CHIEF JUSTICE LEE, opinion of the Court:
¶1 Ellis-Hall Consultants is involved in the development of
wind power projects in Southeastern Utah. The aim of these projects
is to sell power to PacifiCorp through its Rocky Mountain Power
division. To qualify to do so, Ellis-Hall is required to enter into and
secure agency approval of a power purchase agreement. But first
Rocky Mountain Power is required by governing regulations to
provide “indicative pricing” to a producer seeking to pursue a
power purchase agreement. Indicative pricing is to be “tailored to
the individual characteristics of the proposed project.” Rocky
Mountain Power, Electric Service Schedule No. 38 I.B(4) (2014). And it is
aimed at allowing the producer to “make determinations regarding
project planning, financing, and feasibility.” Id.ELLIS-HALL v. PUBLIC SERVICE COMMISSION
Opinion of the Court
¶2 Ellis-Hall received an indicative pricing proposal in 2012.
Yet Rocky Mountain Power later rescinded that proposal and
refused to proceed with negotiations on a power purchase
agreement under its earlier indicative pricing. It did so on the
ground that the Utah Public Service Commission had since issued an
order adopting a new pricing methodology. Ellis-Hall challenged
that decision in a proceeding before the Commission. Ellis-Hall
asserted a right to rely on the old indicative pricing proposal in
negotiating a power purchase agreement. The Commission
disagreed. We reverse.
I
¶3 To encourage the development of alternative energy
resources, federal law requires a utility to purchase wind energy and
other forms of alternative power from qualifying facilities 1 at its
avoided cost—what it would have cost the utility to generate the
power itself or purchase it from another source. 16 U.S.C. § 824a-3;
18 C.F.R. § 292.101. The Commission establishes the methodology for
determining avoided cost. It also promulgates regulatory tariffs
establishing the rules for the negotiation and approval of power
purchase agreements.
¶4 The tariff in question here is called Electric Service Schedule
38. Schedule 38 was adopted by the Commission in 2003. It governs
negotiations between a qualifying facility and Rocky Mountain
Power.
¶5 Under Schedule 38, Rocky Mountain Power is required to
provide a qualifying facility with an indicative pricing proposal once
the facility submits certain information regarding a proposed project.
The pricing proposal must be “tailored to the individual
characteristics of the proposed project.” Schedule 38 I.B(3). And it is
aimed at allowing the owner of the qualifying facility to “make
determinations regarding project planning, financing, and
feasibility.” Id.¶6 Schedule 38 also notes that indicative “prices are merely
indicative and not final and binding” until the parties negotiate and
execute a power purchase agreement that is approved by the
Commission. Id. And it identifies specific subsequent steps that a
1 The federal standards for qualifying facility status are set forth
in 18 C.F.R. § 292.203. We are not asked here to decide whether Ellis-
Hall’s project is a qualifying facility.
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qualifying facility should take to be entitled to receive a draft power
purchase agreement and to proceed toward final negotiation.
¶7 Rocky Mountain Power may “update its pricing proposals”
in response to “changes to the Company’s avoided-cost
calculations.” Id. at I.B(6)(c). But it may “not unreasonably delay
negotiations” and must “respond in good faith.” Id. at I.B(6)(2).
Beyond that Schedule 38 says little about the relationship between
avoided cost methodologies and indicative pricing. It does not speak
specifically to the effect of a change in avoided cost methodology on
existing indicative pricing proposals.
¶8 The Commission adopted a “market proxy” methodology
for determining the avoided cost for wind power projects in 2005.
Under that method, avoided cost was determined by reference to
Rocky Mountain Power’s most recent request for a proposal to
supply wind energy. So this method pegged avoided cost at the level
of the most recent market-based wind contract—executed in 2009—
rather than looking at the current cost to generate energy. At the
time this methodology was adopted, it was considered fair because
Rocky Mountain Power anticipated sending out a request for a
proposal and negotiating a new price each year.
¶9 Ellis-Hall requested indicative pricing for its wind power
project in 2012. At that time the “market proxy” methodology was
still in place. Soon thereafter, however, Rocky Mountain Power
sought the Commission’s approval for a change in methodology.
Because Rocky Mountain Power had not issued a proposal in several
years and the cost of producing wind energy had decreased, it
argued that it was overpaying under the market proxy methodology.
It also sought a stay—an order allowing it to refuse to issue new
indicative pricing proposals until the Commission could decide
whether to adopt a new methodology.
¶10 Ellis-Hall moved to intervene. It sought to challenge the
requested change in methodology and to block the issuance of a stay.
The Commission granted Ellis-Hall’s motion to intervene. It also
bifurcated the proceedings into two phases.
¶11 In the first phase the Commission considered—and
denied—Rocky Mountain Power’s request for a stay. In so doing, the
Commission explained that the request “ignore[d] the practical
realities of bringing a large wind [qualifying facility] project from
inception to conclusion, in assuming all five projects in the queue
[including Ellis-Hall] would be able to negotiate power purchase
agreements before our order in Phase Two.” Id. at 17. Yet the
Commission also noted the possibility that “the outcome of the
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ELLIS-HALL v. PUBLIC SERVICE COMMISSION
Opinion of the Court
Phase Two hearings and the interests of ratepayers may require the
application of new avoided cost calculations for . . . projects not in
possession of executed power purchase agreements when the Phase
Two order is issued.” Id.
¶12 After the Commission’s “Phase One” order was issued,
Rocky Mountain Power provided Ellis-Hall with an indicative
pricing proposal based on the market proxy methodology. Before
Ellis-Hall was able to negotiate a power purchase agreement with
Rocky Mountain Power, however, the Commission issued its “Phase
Two” order. This order “discontinue[d]” use of the market proxy
methodology “for determining indicative prices for Schedule 38
wind [facilities] going forward.” Order on Phase Two Issues at 18. It
also adopted a new avoided cost methodology—the Proxy/PDDRR
(partial displacement differential revenue requirement) method,
which allowed Rocky Mountain Power to determine its avoided cost
based on current energy production cost rather than the cost of the
most recently executed proposal. This new methodology was
expected to lower Rocky Mountain Power’s avoided costs. 2 Id.
Finally, the Phase Two order provided that the market proxy
method was discontinued “going forward.” Id. It accordingly
concluded that “future requests for indicative pricing” would be
governed by the new methodology, thus “ensur[ing]” that “future
indicative prices . . . will reflect” market costs “appropriately.” Id.
¶13 In reliance on the Phase Two order, Rocky Mountain Power
sent Ellis-Hall a letter stating that “the previously provided
indicative pricing [was] no longer valid.” Order Dismissing Ellis-Hall
Complaint at 5. It also asked Ellis-Hall to submit a request for
“updated indicative pricing” under Schedule 38 if it wished to
proceed toward a power purchase agreement. Id. Ellis-Hall refused
to submit such a new request. Instead it filed a complaint with the
Commission, asserting that Rocky Mountain Power was required to
honor its prior indicative pricing proposal and to negotiate a power
purchase agreement using the market proxy methodology. In Ellis-
Hall’s view there was no need for a request for new indicative
pricing, as it already had an indicative pricing proposal and was
entitled to rely on it in negotiating a power purchase agreement.
2 This seems to be undisputed. None of the parties suggest that
an avoided cost determined under the new methodology would
result in Ellis-Hall being paid more for its energy production. And
Ellis-Hall asserts that it is no longer economically feasible for it to
proceed under the new methodology.
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And Ellis-Hall claimed that the Phase Two order had no application
to existing indicative pricing proposals, but only to future requests
for such proposals.
¶14 The Commission rejected Ellis-Hall’s position. It concluded
that the “plain language of Schedule 38, the Phase [One] Order and
the Phase [Two] Order” require Rocky Mountain Power to utilize the
new methodology. Order Dismissing Ellis-Hall Complaint at 21. First,
the Commission noted that the market proxy method was
“discontinued pursuant to the [Phase Two order].” Second, the
Commission stated that the Phase One order “fully anticipated the
possibility that a change in its avoided cost method would result in
the application of new avoided cost calculations for all large wind
. . . projects not in possession of executed power purchase
agreements when the Phase [Two] order was issued.” Id. at 21.
¶15 For these reasons, the Commission concluded that its orders
did not “vest [Ellis-Hall] with indicative pricing” calculated using an
outdated method. Id. at 22. It also held that Rocky Mountain Power
was required “to update pricing to reflect changes to avoided cost
calculations” under Schedule 38 and the “underlying mandates of
federal and Utah state law.” Id. at 20–21. And because prices are not
“final and binding” until a power purchase agreement is negotiated,
the Commission held that Ellis-Hall was not entitled to continue to
rely on the methodology used in Rocky Mountain Power’s indicative
pricing proposal. Id. at 23.
¶16 Ellis-Hall filed a petition for review or rehearing with the
Commission, which was denied. It subsequently filed a timely
petition for review with this court.
II
¶17 Ellis-Hall raises pure questions of law in its petition
challenging the Commission’s decision. It claims error in the
Commission’s interpretation of both Schedule 38 and the Phase One
and Phase Two orders.
¶18 A threshold question presented concerns the governing
standard of review. We first conclude that we owe no deference to
the Commission’s legal conclusions. We then proceed to consider the
Commission’s interpretation of Schedule 38 and of the two orders in
question. And we conclude that the Commission erred determining
Ellis-Hall did not have a right to rely on the indicative pricing
provided by Rocky Mountain Power under the market proxy
method and was required to submit a request for new indicative
pricing.
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ELLIS-HALL v. PUBLIC SERVICE COMMISSION
Opinion of the Court
A
¶19 We have sometimes said that “we give considerable weight”
to the [Public Service Commission’s] interpretations of technical
provisions such as tariffs.” McCune & McCune v. Mountain Bell Tel.,
758 P.2d 914, 917 (Utah 1988). And we have justified such deference
on the basis of an inference of “legislative intent to delegate” to the
“responsible agency” the discretionary power to interpret its
regulations. Utah Dep’t of Admin. Servs. v. Pub. Serv. Comm’n, 658 P.2d
601, 610 (Utah 1983).
¶20 The Commission asks us to apply that standard here. It
seeks affirmance on the ground that its interpretation of Schedule 38
and the Phase One and Phase Two orders falls “within the limits of
reasonableness or rationality.” McCune & McCune, 758 P.2d at 917;
see also Bradshaw v. Wilkinson Water Co., 2004 UT 38, ¶ 11, 94 P.3d 242.
¶21 We acknowledge the apparent basis for the Commission’s
position under the cited cases. But we conclude that the deferential
standard of review set forth above has been overtaken by more
recent authority. And we conclude that the appropriate standard is a
non-deferential one that reviews the Commission’s conclusions of
law—its interpretations of its prior orders and regulatory provisions
like Schedule 38—for correctness.
¶22 For years our caselaw was riddled with tension on the
question of the standard of review that applies to judicial review of
agency action. See Murray v. Utah Labor Comm’n, 2013 UT 38, ¶ 11,
308 P.2d 461 (noting “our inconsistent precedent on . . . standards of
review” under the Utah Administrative Procedures Act). On one
hand, we had held that an agency’s legal conclusions could be
subject to a deferential standard of review where the legislature “has
either explicitly or implicitly delegated discretion to an agency to
interpret or apply the law.” Id. ¶ 12 (citing Morton Int’l, Inc. v. Tax
Comm’n, 814 P.2d 581, 588 (Utah 1991)). On the other hand, in some
cases we had applied traditional standards of review to agency
decisions—standards that turned on whether an agency’s decision
turned on a question of law, a question of fact, or a mixed question.
Id. ¶ 13 (citing Drake v. Indus. Comm’n, 939 P.2d 177, 179–81 (Utah
1997)).
¶23 Murray overruled the first line of cases in favor of the latter.
It held that “the appropriate standard of review of final agency
actions will depend on the type of action in question”—on “whether
it can be characterized as” turning on “a question of law, a question
of fact, or a mixed question of law and fact.” Id. ¶ 22. And it
repudiated the notion that an agency’s “authority” to apply a
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statutory framework sustained an inference of “discretion” leading
to deference to its decisions. See id. ¶ 28 (noting that the inquiry into
whether the legislature had made a “delegation[] of discretion” to an
agency had “proved difficult to apply” and holding that a “grant of
authority” to an agency “does not turn an agency’s application or
interpretation of the law” into a discretionary decision warranting
deference).
¶24 Murray thus calls for non-deferential “correctness” review of
agency conclusions of law. See id. ¶¶ 9, 12. That is the traditional
standard that applies on review of pure legal questions. See
Manzanares v. Byington (In re Adoption of Baby B.), 2012 UT 35, ¶ 41,
308 P.3d 382. And it is thus the standard that applies under Murray.
¶25 We reinforced that conclusion in Hughes General Contractors
v. Utah Labor Commission, 2014 UT 3, 322 P.3d 712. There we
indicated that we have “openly repudiated” a standard of deference
to administrative agencies like that which applies in federal court
under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
467 U.S. 837 (1984). Id. ¶ 25. And we clarified that “we have retained
for the courts the de novo prerogative of interpreting the law,
unencumbered by any standard of agency deference.” Id.
¶26 Hughes also clarifies a point made in Murray. It notes that
deference to agencies is limited to circumstances prescribed by
statute or required by our caselaw—“as when an agency makes a
factual determination, or ‘whenever the Legislature directs an
agency to engage in [discretionary] decisionmaking.’” Id. ¶ 25 n.4
(alteration in original). But Hughes also highlights the limited nature
of the kind of discretionary judgments that qualify for deference: “A
‘discretionary decision involves a question with a range of
‘acceptable’ answers, some better than others, and the agency . . . is
free to choose from among this range without regard to what an
appellate court thinks is the ‘best’ answer.’” Id. (alteration in
original) (quoting Murray, 2013 UT 38, ¶ 30). And Hughes
emphasizes that “[s]tatutory interpretation does not present such a
discretionary decision,” and thus is not subject to deferential review.
Id.¶27 We now reinforce our holdings in Murray and Hughes. We
reiterate that agency decisions premised on pure questions of law are
subject to non-deferential review for correctness.
¶28 In so holding, we repudiate our prior decisions calling for
deference to an agency’s interpretation of its own orders or
regulatory enactments. And we hold that the Commission is not
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Opinion of the Court
entitled to deference as to its interpretation of Schedule 38 or its
Phase One and Phase Two orders.
¶29 As the Commission notes, we have sometimes called for
deference to an agency’s interpretation of its own regulations on the
ground that the agency “is best suited to say what its orders mean.”
Reaveley v. Pub. Serv. Comm’n, 436 P.2d 797, 799 (Utah 1968). And
there is a parallel principle of deference in federal law. See Bowles v.
Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945) (providing for
deference to agency interpretation of its own regulations unless it is
“plainly erroneous or inconsistent with the regulation”); Auer v.
Robbins, 519 U.S. 452, 461 (1997) (same).
¶30 We are in no way bound by the federal standard, however.
And the underlying premises of this principle of deference are
irreconcilable with our decisions in Murray and Hughes.
¶31 Schedule 38 is law. So are the orders issued by the
Commission. See Salt Lake Citizens Cong. v. Mountain States Tel. & Tel.
Co., 846 P.2d 1245, 1253 (Utah 1992) (holding that “[r]ules of law
developed in the context of agency adjudication are as binding as
those promulgated by agency rule making”). They are accordingly
binding on interested parties like Ellis-Hall. And such parties have a
right to read and rely on the terms of these regulations. Because the
words in the Commission’s orders have the force of law, the
Commission has no right to revise them by a later “interpretation.”3 It
is the Commission’s orders and tariffs that have the force of law, not
its privately held intentions. So an agency has no authority to
override the terms of an issued order by vindicating the agency’s
“true” intent. Agencies make law by issuing orders or promulgating
regulations. Privately held intentions that contradict such rules are
not law.
¶32 We are in as good a position as the agency to interpret the
text of a regulation that carries the force of law. In fact, we may be in
a better position. The agency here is in the position of lawmaker; in
adopting Schedule 38 and issuing the two orders in question, the
Commission has exercised authority delegated to it by the
legislature. With that in mind, it makes little sense for us to defer to
3 An agency, of course, may have the authority in certain
circumstances to repeal a prior order and issue a new one. But such
power is distinct from the power to interpret an existing order. And
the Commission has not repealed Schedule 38 or either of its
operative orders.
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the agency’s interpretation of law of its own making. If we did so we
would place the power to write the law and the power to
authoritatively interpret it in the same hands. That would be
troubling, if not unconstitutional. 4 See UTAH. CONST. art. V, § 1
(forbidding any one branch of government from “excercis[ing] any
functions appertaining to either of the others”).
¶33 “It is emphatically the province and duty of the judicial
department to say what the law is.” Marbury v. Madison, 5 U.S. (1
Cranch) 137, 177 (1803). We accordingly review the Commission’s
interpretation of Schedule 38 and the Phase One and Phase Two
orders without affording any deference to the Commission.
B
¶34 The Commission’s Phase One order concludes that “the
outcome of the Phase Two hearings and the interests of ratepayers
may require the application of new avoided cost calculations” for
those “not in possession of executed power purchase agreements
when the Phase Two order is issued.” Order on Motion to Stay Agency
Action at 17–18 (emphasis added). And the Phase Two order in fact
adopts a new avoided cost methodology. It repudiates the market
proxy method “for determining indicative prices . . . going forward”
and concludes that the Proxy/PDDRR method “is a reasonable
method for determining wind resource indicative prices going
forward.” Order on Phase Two Issues at 18 (emphasis added).
¶35 The Commission interpreted these orders as repudiating the
terms of any indicative pricing for entities (like Ellis-Hall) not yet “in
possession of executed power purchase agreements when the Phase
Two order issued.” Order Dismissing Ellis-Hall Complaint at 21. It
sought to buttress that conclusion, moreover, by reference to the
terms of Schedule 38. Schedule 38 authorizes Rocky Mountain Power
to “update its pricing proposals at appropriate intervals to
accommodate any changes to the Company’s avoided-cost
4 The executive and legislative branches do interpret the law, of
course. And agencies interpret laws of their own making with some
regularity. But such interpretation—in the process of fulfilling
constitutionally assigned powers—is different from exercising
authoritative power to say what the law is. Only the judicial branch
does that. And when another branch interprets law in the course of
fulfilling its governmental functions, it is ultimately subject to
judicial review without deference by the courts. Such review
preserves the proper separation of powers.
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ELLIS-HALL v. PUBLIC SERVICE COMMISSION
Opinion of the Court
calculation.” Schedule 38 I.B(6)(c). And it provides that “[p]rices and
other terms and conditions in the power purchase agreement will
not be final and binding until the power purchase agreement has
been executed by both parties and approved by the Commission.” Id.
I.B(7).
¶36 In light of the above, the Commission concluded that the
Phase Two order “does not vest” qualifying facilities with a right to
rely on “indicative pricing calculated using an outdated method and
received under Schedule 38” prior to issuance of that order. Order
Dismissing Ellis-Hall Complaint at 22. “Rather,” the Commission held,
“indicative prices are required to be updated to reflect new avoided
costs calculations until a power purchase agreement is executed by
both parties.” Id. And because the indicative pricing issued to Ellis-
Hall had not been adopted in a power purchase agreement executed
by both parties and approved by the Commission, the Commission
held that Ellis-Hall was required to submit a request for new
indicative pricing before it could proceed with a power purchase
agreement.
¶37 We reverse. We construe the terms of the Phase Two order,
when read in light of the Phase One order and Schedule 38, to yield a
right to a wind power developer to rely on the methodology set forth
in the “indicative pricing proposal” it receives from Rocky Mountain
Power. The precise calculations in the indicative pricing proposal, of
course, are not set in stone; Schedule 38 makes clear that Rocky
Mountain Power may “update” its proposals to make changes to its
calculations. But the operative terms of the Commission’s orders and
of Schedule 38 give entities like Ellis-Hall a right to rely on the
methodology employed in an indicative pricing proposal once it is
given.
¶38 We reach that conclusion for several reasons. First, the Phase
One order nowhere mandates a new avoided cost methodology; it
simply says that the Phase Two proceedings “and the interests of
ratepayers may require” a new methodology. Phase One Order at 17
(emphasis added). Significantly, moreover, the Phase One order
declines to stay the market proxy methodology. And in so doing it
indicates that the request for a stay “ignores the practical realities of
bringing a large wind [qualifying facility] project from inception to
conclusion, in assuming all five projects in the queue [including
Ellis-Hall’s] would be able to negotiate power purchase agreements
before” the Phase Two order was entered. Id.
¶39 Second, the Phase Two order does not mandate retroactive
application of the new Proxy/PDDRR methodology; it deems that
methodology a “reasonable” one “for determining wind resource
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indicative prices going forward.” Phase Two Order at 18 (emphasis
added). The same formulation is used as to discontinuation of the
market proxy method—that method is discontinued “for
determining indicative prices . . . going forward.” Id. (emphasis
added). And, importantly, the new methodology is mandated only
as to “future requests for indicative pricing.” Id. (emphasis added).
This formulation is significant given that Ellis-Hall has not made a
new request for indicative pricing. It already has indicative pricing
and claims a right to use it in negotiating a power purchase
agreement.
¶40 Because Ellis-Hall already had an indicative pricing
proposal, it had no obligation under the Phase Two order to submit a
new request. Nothing in the Phase Two order requires or even
permits Rocky Mountain Power to issue a new indicative pricing
proposal. And that seems understandable in light of the “practical
realities of bringing a large wind [qualifying facility] project from
inception to conclusion” noted in the Phase One order.
¶41 Third, Schedule 38 gives a would-be qualifying facility a
right to receive “indicative” pricing and does so for the purpose of
allowing the wind power developer “to make determinations
regarding project planning, financing, and feasibility.” Schedule 38 at
I.B.3. An indicative pricing proposal is one that “show[s] the way to
or the direction of” the pricing that Rocky Mountain Power
ultimately has in mind for the power purchase agreement. AM.
HERITAGE DICTIONARY 894 (5th ed. 2011) (defining indicate as “[t]o
show the way to or the direction of”). 5 Thus, the precise terms of
Rocky Mountain Power’s indicative pricing could change as a result
of “updated information” or “changes to [Rocky Mountain Power’s]
avoided-cost calculations.” Schedule 38 at I.B(4), I.B(6)(c). But to be
indicative, the pricing proposal would have to “point[] out more or
less exactly” the methodology of Rocky Mountain Power’s pricing
proposal, or in other words would have to “reveal[]” it “fairly
clearly.” WEBSTER’S THIRD NEW INT’L DICTIONARY 1150 (2002). 6
5 The term “indicative pricing” is not defined in Schedule 38. Nor
is there any indication that it has acquired an established meaning in
the law or in the energy industry. So we construe the phrase as
conveying its ordinary meaning. See Barneck v. Utah Dep’t of Transp.,
2015 UT 50, ¶ 28, 353 P.3d 140.
6In light of the above we need not and do not reach the question
whether Schedule 38 should be construed “strictly” against Rocky
(continued…)
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Opinion of the Court
¶42 A prior pricing proposal ceases to be indicative if it is subject
not just to an “update[]” or to new “calculations” but to a
fundamental change in methodology. And if Rocky Mountain Power
retains the right to alter the methodology underlying a prior
indicative pricing proposal, the would-be qualifying facility is hardly
in a position to use it “to make determinations regarding project
planning, financing and feasibility.” Schedule 38 at I.B.(3).
III
¶43 For these reasons we conclude that Ellis-Hall is not required
to submit a request for new indicating pricing from Rocky Mountain
Power. It is entitled to proceed in reliance on the methodology set
forth in the indicative pricing proposal it received from Rocky
Mountain Power.
¶44 That does not mean that Ellis-Hall has a right to require
Rocky Mountain Power to enter into a power purchase agreement,
or to require the Commission to approve such an agreement. Those
questions are not properly presented for our review. And we
accordingly decline to reach them.
¶45 Rocky Mountain Power has urged us to affirm on the basis
of its purported right not to enter into a power purchase agreement
with Ellis-Hall. Because it claims the discretion not to enter into a
power purchase agreement, Rocky Mountain Power says that it can
require Ellis-Hall to start over by submitting a new request for
indicative pricing. And once that request is submitted, Rocky
Mountain Power claims an unquestioned right to rely on the new
Proxy/PDDRR methodology. With that in mind, Rocky Mountain
Power asserts that Ellis-Hall’s position will fail in the long run even
if it prevails on the issues presented for our review here.
¶46 These questions are not properly presented here, however.
The question of Rocky Mountain Power’s discretion not to enter into
a power purchase agreement—and of the effect on any such
discretion on Ellis-Hall’s rights under the Commission’s orders—is
simply unripe at this juncture. Rocky Mountain Power has not yet
Mountain Power, as Ellis-Hall urges. See Josephson v. Mountain Bell,
576 P.2d 850, 852 (Utah 1978) (calling for strict construction of tariff
issued by telephone utility); but see Jex v. Utah Labor Comm’n, 2013 UT
40, ¶ 56, 306 P.3d 799 (repudiating substantive canon of construction
of Workers Compensation Act; clarifying that liberal canon of
construction was at most a “tie-breaker” after the court first seeks to
yield a reasonable construction of the statutory text).
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sought to exercise such discretion and the Commission has yet to
rule upon these issues. And for that reason our views on these issues
would be premature and advisory.7
¶47 The same goes for an alternative ground for affirmance
advanced by the Commission. The Commission says that a decision
requiring Ellis-Hall and Rocky Mountain Power to proceed with
negotiations on a now-outdated indicative pricing proposal will
ultimately be thwarted by an inevitable decision by the Commission
to decline to approve a power purchase agreement based on such
methodology. To support that view, the Commission points to
provisions of state and federal law that purportedly would foreclose
the power purchase agreement that Ellis-Hall wishes to secure. See
16 U.S.C. § 824a-3 (mandating that rates charged for the purchase of
energy not “exceed[] the incremental cost to the electric utility of
alternative electric energy”). But again we view this issue as
premature. The Commission has not as yet declined to approve a
power purchase agreement sought by Ellis-Hall. And we
accordingly are not in a position to offer an advisory opinion on a
matter that is not yet ripe for our review.
¶48 For these reasons we are in no position to decide whether
Ellis-Hall has an ultimate right to enter into a power purchase
agreement with Rocky Mountain Power or to secure approval from
the Commission. But we do conclude that it is entitled, for now, to
rely on the indicative pricing proposal it was provided in the past,
and it has no obligation to submit a request for new indicative
pricing as it moves forward in negotiations over a power purchase
agreement with Rocky Mountain Power.
7 The point is not that Ellis-Hall has no stake in the outcome of
this case. Our holding implies a duty for Rocky Mountain Power to
move forward with further negotiations in good faith. See Schedule 38
I.B.(6)(a). But the outcome of those negotiations is by no means
guaranteed. Thus, our holding is that Ellis-Hall has won a short-term
battle. It remains to be seen whether it will prevail in the larger war.
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