In re Programmatic Changes to Standard-Offer Program & Investigation into Establishment of Standard-Offer Prices (Allco Renewable Energy Limited and PLH LLC, Appellants)

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal
revision before publication in the Vermont Reports. Readers are requested to notify the Reporter
of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109
State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made
before this opinion goes to press.
2017 VT 77
No. 2016-399
In re Programmatic Changes to Standard-Offer Program & Supreme Court
Investigation into Establishment of Standard-Offer Prices
(Allco Renewable Energy Limited and PLH LLC, On Appeal from
Appellants) Public Service Board
April Term, 2017
James Volz, Chair
Thomas Melone, New York, New York, for Appellants.
Geoffrey Commons, Acting Director for Public Advocacy, and Jeanne Elias, Special Counsel,
Montpelier, for Appellee Department of Public Service.
PRESENT: Skoglund, Robinson, Eaton and Carroll, JJ., and Burgess, J. (Ret.),
Specially Assigned
¶ 1. SKOGLUND, J. Allco Renewable Energy Limited and PLH LLC (collectively
Allco) appeal the Public Service Board’s order denying their motion to reconsider. As in its motion
to reconsider, Allco argues on appeal that the Board was required to award standard-offer contracts
to several solar projects because they provided “sufficient benefits” to the operation of Vermont’s
electric grid, as set forth in 30 V.S.A. § 8005a(d)(2). Because Allco’s claims relating to the correct
application of § 8005a(d)(2) were neither raised nor decided below, we decline to address them on
appeal. Accordingly, we conclude that the Board did not err in denying Allco’s motion for
reconsideration, and affirm.
¶ 2. The standard-offer program is a component of Vermont’s Sustainably Priced
Energy Enterprise Development (SPEED) program, which promotes the development of
renewable energy in Vermont. See id. § 8001. The standard-offer program—codified in 30 V.S.A.
§ 8005a—provides the Public Service Board with the authority to offer power-purchase contracts
to new renewable-energy plants if the proposed plants satisfy certain requirements; for example,
the plant must be located in Vermont, have a capacity of 2.2 megawatts or less, and comply with
other restrictions. Id. § 8005a(b).
¶ 3. Allco’s appeal involves the interplay between two categories of standard-offer
contracts. The first type of contracts count against the annual cumulative capacity; the second type
do not count against the cumulative capacity. Id. § 8005a(c), (d). As described below, § 8005a
and the Board orders interpreting the statute set forth distinct qualification requirements for the
contract types.
¶ 4. Those contracts that count against the cumulative capacity are governed by
§ 8005a(c).1 That subsection requires the Board to issue standard offer contracts until a certain
cumulative plant capacity is reached; each year, the Board sets the available capacity for new
plants and then receives proposals to fill that capacity. Id. § 8005a(c). In a March 1, 2013 order,2
the Board established a request-for-proposals mechanism to determine which standard-offer
projects would fill the annual cumulative capacity. Establishment of Standard-Offer Prices &
Programmatic Changes to the Standard-Offer Program, Docket Nos. 7873 & 7874, at 22-26 (Vt.
1
The text of 30 V.S.A. § 8005a(c) reads: “In accordance with this subsection, the Board
shall issue standard offers to new standard offer plants until a cumulative plant capacity amount
of 127.5 MW is reached.” The subsection then sets forth procedures relating to the annual
amounts, reserved blocks, and other elements of the cumulative capacity program. Id.
§ 8005a(c)(1), (2).
2
This Board order was promulgated in response to Vermont Energy Act of 2012, which
made significant changes to the standard-offer program, including establishing a market-based
mechanism for standard offer prices. See 2011, No. 170 (Adj. Sess.), § 4.
2
Public Serv. Bd. Mar. 1, 2013) [hereinafter 2013 Board Order], available at
http://www.vermontstandardoffer.com/standard-offer-program-summary/
[https://perma.cc/LE86-S9VH].
¶ 5. The second type of standard-offer contract applies to plants that do not count
towards the cumulative capacity, including those that provide “sufficient benefits” to the electric
grid. See 30 V.S.A. § 8005a(d)(2).3 As set forth in the 2013 Board Order, to satisfy the “sufficient
benefits” standard, the plant must be “intended to mitigate transmission and distribution
constraints, as opposed to those that provide more generalized benefits.” 2013 Board Order at 44;
see also 30 V.S.A. § 8005a(d)(2). The 2013 Board Order also adopted a screening framework and
guidelines to award plants standard-offer contracts under § 8005a(d)(2), outside of the cumulative
capacity. See 2013 Board Order at 49-51.
¶ 6. With that background in mind, here are the facts leading to Allco’s appeal. On
April 1, 2016, the standard-offer facilitator issued a request for proposals to meet the annual
requirements of 30 V.S.A. § 8005a(c)—that is, the subsection governing cumulative capacity
3
30 V.S.A. § 8005a(d) states in part:
The following categories of plants shall not count toward the
cumulative capacity amount of subsection (c) of this section, and the
Board shall make standard offers available to them provided that
they are otherwise eligible for such offers under this section:
....
(2) New standard offer plants that the Board determines will have
sufficient benefits to the operation and management of the electric
grid or a provider’s portion thereof because of their design,
characteristics, location, or any other discernible benefit. To
enhance the ability of new standard offer plants to mitigate
transmission and distribution constraints, the Board shall require
Vermont retail electricity providers and companies that own or
operate electric transmission facilities within the State to make
sufficient information concerning these constraints available to
developers who propose new standard offer plants.
3
standard-offer contracts described above. In defining eligibility for the award group, the request
for proposals specifically cited to 30 V.S.A. § 8005a(c) and stated that the available annual
capacity in 2016 was approximately 6.375 megawatts. The facilitator received twenty-four
proposals. After allocating technology specific set-asides for four small wind projects and one
large wind project, approximately 3.875 megawatts of plant capacity remained for solar projects.
Of the eighteen solar projects submitted, Allco submitted eleven. The combined megawatt
capacity of the eighteen proposed solar projects was 37.23 megawatts, well over the remaining
annual capacity. Following its normal procedures, the Board ranked the solar projects from lowest
price to highest price per kilowatt hour and selected the projects based on the price offered. Once
the Board filled the remaining 3.875 megawatts with the lowest priced projects, no additional
cumulative capacity projects were authorized. Only two solar projects received standard-offer
contracts, one of which was an Allco project. On May 27, 2016, the Board awarded standard-offer
contracts to the two solar projects as well as to the five wind projects and established a reserve
with two additional solar projects.
¶ 7. Allco filed a motion to reconsider the Board’s determination. In the motion, Allco
moved for “the Board to award standard offer contracts to all the remaining eligible proposals
submitted” and cited 30 V.S.A. § 8005a(d) as support for its contention that the contracts should
be awarded outside of the cumulative capacity. Allco argued that § 8005a(d) required the Board
to award standard-offer contracts to renewable-energy plants that provide “sufficient benefits” to
the operation and management of the electric grid. Because each of the remaining proposals
satisfied this “sufficient benefits” test, Allco claimed that the Board was required to grant standard-
offer contracts to the remaining projects outside of the cumulative capacity.
¶ 8. The Board denied Allco’s motion to reconsider. In doing so, the Board noted that
the purpose of the request for proposals was for standard-offer projects that met the annual capacity
requirements set forth in 30 V.S.A. § 8005a(c). Because the facilitator’s request for proposals and
4
the Board’s subsequent order did not invoke the “sufficient benefits” test set forth in 30 V.S.A.
§ 8005a(d), the Board concluded that Allco’s motion for reconsideration was outside the scope of
the request for proposals. The Board further noted that Allco could pursue a standard-offer
contract outside of the cumulative capacity by following the procedures in the 2013 Board Order.
Allco appealed.
¶ 9. On appeal, Allco again focuses on the application of § 8005a(d)(2).4 Allco argues
that the Board used the wrong framework for determining whether its proposed projects should be
awarded standard-offer contracts as plants outside the cumulative capacity under § 8005a(d)(2).
Allco emphasizes § 8005a(d)(2)’s language and claims that the Board’s interpretation of this
language erroneously limits the “sufficient benefits” test to those energy plants that “mitigate
transmission and distribution constraints.” 2013 Board Order at 44. Allco further argues that
§ 8005a(d)(2) is not limited in this manner and that the language relating to mitigation is
illustrative, not exclusive. Based on this interpretation, Allco argues that it was not necessary to
prove that its proposed projects mitigate transmission and distribution constraints and that, as a
result, the projects should have been awarded standard-offer contracts under § 8005a(d)(2). Thus,
according to Allco, the Board should not have held that the plants “were not plants eligible for
contracts outside the cap.”
¶ 10. This was not the Board’s holding; instead, the Board awarded five standard-offer
contracts pursuant to § 8005a(c). After Allco’s motion for reconsideration first raised the
applicability of § 8005a(d)(2), the Board denied the motion as outside the scope of the 2016 request
for proposals relating to the annual cumulative capacity. Because the Board’s process did not
involve § 8005a(d)(2) and because Allco failed to properly raise its claims relating to
4
Allco does not challenge the Board’s decision to award standard-offer contracts to five
projects under 30 V.S.A. § 8005a(c).
5
§ 8005a(d)(2), we decline to address them on appeal.5 In re Proposed Sale of Vt. Yankee Nuclear
Power Station, 2003 VT 53, ¶ 13, 175 Vt. 368, 829 A.2d 1284 (“We decline to address this claim
because it was neither raised nor decided below.”).
¶ 11. As described above, the request for proposals proceeded under the statutory
framework of 30 V.S.A. § 8005a(c), as implemented by the request-for-proposal mechanism
described in the 2013 Board Order. As part of this process, the facilitator requested proposals
pursuant to § 8005a(c) and the facilitator further specified that the available annual capacity in
2016 was approximately 6.375 megawatts. The Board’s May 27, 2016 order reiterated that the
request for proposals was used “to solicit standard-offer projects to meet the requirements of
30 V.S.A. § 8005a(c).” This order then described the cumulative capacity available for 2016 and
detailed the process for arriving at the standard-offer contracts for 2016 before ordering the award
of five standard-offer contracts, including contracts for two solar projects. Plainly, the entire
process was conducted under the authority of § 8005a(c), not § 8005a(d). Moreover, at no time
during this process—from the initial request for proposals to the award of standard-offer
contracts—did Allco ask the Board to rule on the applicability of 30 V.S.A. § 8005a(d) and the
“sufficient benefits” test. Cf. In re Yankee Nuclear Power Station, 2003 VT 53, ¶ 13 (declining to
address issue not raised below).
¶ 12. Instead, Allco first raised the argument that its projects qualified under the
“sufficient benefits” test in its motion for reconsideration. On appeal, Allco argues that this motion
“could be viewed as an independent request for the Board to award contracts to Allco under
30 V.S.A. § 8005a(d)(2).” As we noted in In re Entergy Nuclear Vermont Yankee, LLC, we have
held that post-judgment motions may sufficiently preserve issues if the “asserted error did not arise
5
We similarly do not address the Board’s alternative arguments that Allco was collaterally
estopped from challenging the 2013 Board Order and that Allco did not comply with Vermont
Rule of Civil Procedure 59(e).
6
prior to the judgment.” 2007 VT 103, ¶ 14, 182 Vt. 340, 939 A.2d 504. In this matter, by contrast,
Allco’s motion was filed after the 2016 request for proposals under § 8005a(c) and after the Board
awarded contracts pursuant to the 2016 cumulative capacity; thus, Allco had the opportunity and
means to raise its argument regarding § 8005a(d)(2) during the initial request for proposals.
Although it is true that “in certain circumstances litigants may preserve issues in post-judgment
motions, they may not do so when those issues should have been raised in earlier proceedings
before the Board.” 6 In re Entergy Nuclear, 2007 VT 103, ¶ 15.
¶ 13. Moreover, even if we concluded Allco’s motion for reconsideration sufficiently
raised the issue, Allco fails to address the Board’s argument on appeal that Allco’s § 8005a(d)(2)
argument required further factual development. One purpose of the preservation rule is to ensure
that the Board can give all parties the opportunity to present evidence, to submit arguments, and
to rebut those arguments if necessary. In re Cent. Vt. Pub. Serv. Corp., 2006 VT 70, ¶ 11, 180 Vt.
563, 905 A.2d 616 (mem.) (upholding Board’s ruling that post-hearing motion “deprived the Board
of important evidence necessary to test it in the crucible of an adversary hearing”). In this case,
not only did Allco not raise the issue at the proper time, but also Allco failed to provide an adequate
factual basis for the Board to determine that the solar projects qualified under the “sufficient
benefits” test. Yankee Nuclear Power Station, 2003 VT 53, ¶ 13 (“The issue must be presented
with sufficient specificity and clarity to give the tribunal below a fair opportunity to rule on it.”).
Affirmed.
FOR THE COURT:
Associate Justice
6
For example, in In re Entergy Nuclear, we distinguished post-judgment motions that
involved the alleged misuse of evidence that became apparent only after the agency issued its final
decision. 2007 VT 103, ¶ 14. Because these asserted evidentiary errors did not arise prior to the
judgment, “opposition to the use of the evidence in these cases had to be raised in a post-judgment
motion.” Id.
7