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Federal Energy Regulatory Commission v. Idaho Public Utilities Commission

United States District Court, Ninth Circuit

December 2, 2013



RONALD E. BUSH, Magistrate Judge.

Pending before the Court are: (1) Idaho Power's Motion to Intervene (Docket No. 19); (2) FERC's Motion for Leave to Submit Amended Complaint (Docket No. 36); and (3) IPUC's Motion for Partial Stay of Proceedings (Docket No. 42). Having carefully considered the record and otherwise being fully advised, the undersigned enters the following Memorandum Decision and Order:


Plaintiff, the Federal Energy Regulatory Commission ("FERC"), brings this civil action to enforce a federal statute - the Public Utility Regulatory Polices Act of 1978 ("PURPA") - and FERC's regulations implementing PURPA. See Compl., ¶ 1 (Docket No. 1). Generally speaking, FERC alleges that Defendant Idaho Public Utilities Commission ("IPUC") issued a series of orders that improperly rejected power purchase agreements between certain electric utilities regulated by IPUC and certain "qualifying" wind power production facilities afforded particular rights under PURPA. See id. at ¶ 2. IPUC disagrees, contending that it appropriately declined to approve the power purchase agreements because they contained rates inconsistent with IPUC's PURPA regulations. See Answer, ¶¶ 5-6 (Docket No. 25) (citing Order Nos. 32664, 32299, & 32635, attached as Exs. 1-3 to Answer (Docket No. 25, Att. 1)).[1]


A. Idaho Power's Motion to Intervene (Docket No. 19)

1. Intervention as of Right and Permissive Intervention: The Standards

FRCP 24 allows intervention by right or by permission. Intervention by right under FRCP 24(a)(2) requires that: (1) "the applicant must timely move to intervene"; (2) "the applicant must have a significantly protectable interest related to the property or transaction that is the subject of the action"; (3) the applicant must prove that "the disposition of the action may impair or impede" the applicant's ability to protect that interest; and (4) "the applicant's interest must not be adequately represented by existing parties." Arakaki v. Cayetano, 324 F.3d 1078, 1083 (9th Cir. 2003); see also Fed.R.Civ.P. 24(a)(2). In general, courts construe FRCP 24(a) liberally in favor of intervention. See Southwest Center for Biological Diversity v. Berg, 268 F.3d 810, 818 (9th Cir. 2001). Moreover, the court's evaluation is "guided primarily by practical considerations, " not technical distinctions. See id. Nonetheless, the "[f]ailure to satisfy any one of the requirements is fatal to the application." Perry v. Prop. 8 Official Proponents, 587 F.3d 947, 950 (9th Cir. 2009).

Where intervention as of right in unavailable, a party may still seek permissive intervention. Under FRCP 24(b), "the court may permit anyone to intervene who... has a claim or defense that shares with the main action a common question of law or fact." Fed.R.Civ.P. 24(b)(1)(B). The Rule also indicates that the court must consider "whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights." Fed.R.Civ.P. 24(b)(3). As with FRCP 24(a) intervention, the court should interpret the requirements broadly in favor of intervention. See United States v. Aerojet, 606 F.3d 1142 (9th Cir. 2010) (quoting United States v. Alisal Water Corp., 370 F.3d 915, 919 (9th Cir. 2004)).

2. Analysis: Idaho Power is Permitted to Intervene

Relevant here, IPUC disapproved of specific power purchase agreements between Idaho Power and certain wind power production facilities. See Mem. in Supp. of Mot. to Intervene, p. 2, n.1 (Docket No. 19, Att. 1). In filing this action, FERC asks this Court to "direct[ ] IPUC to issue such orders as are necessary and appropriate to give effect to the legally enforceable obligations otherwise rejected in IPUC's... orders." See Compl., p. 20, ¶ 3 (Docket No. 1). According to Idaho Power, such a mandate "would explicitly and directly impact Idaho Power's rights by potentially requiring Idaho Power to purchase energy at standard, or published, avoided cost rates from projects in excess of the 100kW eligibility cap" - in essence, paying more for power from those projects than Idaho Power believes it is properly obligated to pay. See Mem. in Supp. of Mot. to Intervene, pp. 3-4 (Docket No. 19, Att. 1) ("FERC's current action seeks to... forc[e] Idaho Power and its customers to pay wind developers previously effective standard, or published, avoided cost rates that have been deemed unjust, unreasonable, and contrary to PURPA by IPUC."). No party disputes this contention; likewise, no party opposes Idaho Power's attempted intervention.

Because Idaho Power is a party to the at-issue power purchase agreements rejected by IPUC, Idaho Power is not now obligated to purchase power from the qualifying wind power production facilities. If FERC prevails here, that would change. Therefore, Idaho Power has a significantly protectable interest at stake in this litigation - an interest that could be impaired if Idaho Power is not allowed to intervene. See id. at pp. 15-17 ("FERC's claims and its success or failure could affect Idaho Power's obligations under the contracts at issue in this proceeding This suit clearly threatens the important interests of Idaho Power that only Idaho Power can adequately represent Idaho Power not only has an interest as a party to the prior agreements, it has an interest as a utility that would [be] subject to potential changes in policy.").

Moreover, no existing party currently speaks comprehensively to Idaho Power's interests. FERC clearly doesn't; and IPUC, while more closely aligned with Idaho Power's position, is nonetheless a state regulatory agency with understandably different interests, different insights, and a different mission that, together, may uniquely impact the way it defends FERC's claims against it in particular. See id. at p. 17 ("IPUC does not have a specific interest in the contractual terms of the power purchase agreements. Further, Idaho Power provides unique insight as a regulated utility. Indeed, neither IPUC nor FERC can provide the perspective of an electric utility that maintains the obligation to provide reliable and safe power."). Again, no other party contests such arguments.

Finding no reason to disagree with these undisputed arguments in favor of Idaho Power's intervention in this proceeding, and recognizing Idaho Power's timely motion to do so and the absence of any prejudice to the parties, the undersigned finds that Idaho Power's unopposed Motion to Intervene (Docket No. 19) is properly granted under either FRCP 24(a)(2) or 24(b)(1)(B).

B. FERC's Motion for Leave to Submit Amended Complaint (Docket No. 36)

1. Amending Pleadings: The Standard

FRCP 15(a)(2) provides that amendments to pleadings should be liberally granted in the interests of justice. The Rule States: "[A] party may amend its pleading only with the opposing party's written consent or the court's leave" and "[t]he court should freely give leave when justice so requires." See Fed.R.Civ.P. 15(a)(2). However, the right to amend is not absolute. When determining whether amendments should be granted, the Court should consider "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of amendment, futility of amendment, etc" Foman v. Davis, 371 U.S. 178, 182 (1962). Prejudice to the opposing party is the most important factor for consideration. See Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990) (citing Zenith Radio Corp. v. Hazeltine Research Inc., 401 U.S. 321, 330-31 (1971)).

2. Analysis: FERC is Permitted to Amend its Complaint

FERC contends that IPUC violated PURPA in rejecting certain power purchase agreements executed by (1) Murphy Flat Power, LLC, Murphy Flat Energy, LLC, Murphy Flat Mesa, LLC, and Murphy Flat Wind, LLC (collectively "Murphy Flat"); and (2) Grouse Creek Wind Park, LLC and Grouse Creek Wind Park II, LLC (collectively "Grouse Creek"). See Mem. in Supp. of Mot. to Am., p. 2 (Docket No. 36, Att. 1) (citing Compl., ¶¶ 31, 58, & 74 (Docket No. 1)). Now, through its proposed Amended Complaint, FERC "seeks to add factual allegations that IPUC engaged in the same reasoning, resulting in the same alleged violations, when rejecting power purchase agreements executed by wind power production facility developers Rainbow Ranch Wind, LLC and Rainbow West Wind, LLC ([collectively] "Rainbow")." See id. In essence, owing to ...

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