In re Programmatic Changes to Standard-Offer Program & Investigation into Establishment of Standard-Offer Prices (Allco Renewable Energy Limited and PLH LLC, Appellants)
On
Appeal from Public Service Board 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
SKOGLUND, J.
¶
1. 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. 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 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 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 ...