Carson Hybrid Energy Storage v. Turlock Irrigation District CA5
F087073A
Cal. Ct. App.Feb 5, 2025Background
- Carson Hybrid Energy Storage ("Carson") entered an Interconnection System Impact Study Agreement (ISISA) with Turlock Irrigation District ("Turlock") to facilitate connecting their energy storage project to Turlock’s electric transmission system.
- Carson alleged Turlock breached the ISISA: not following agreed modeling parameters, delaying required studies, refusing to provide invoices, and improperly prioritizing Turlock’s own project over Carson’s.
- Carson filed both a state court breach of contract suit and an application with the Federal Energy Regulatory Commission (FERC) seeking an order requiring interconnection and transmission services.
- FERC put its proceedings on hold pending further studies, indicating it required more information before issuing any orders; it clarified Carson could challenge study results later.
- Turlock demurred in state court on the basis of federal preemption, arguing FERC’s authority preempted Carson’s contract claims; the trial court agreed and dismissed Carson’s suit with prejudice.
- The California Court of Appeal reversed, holding most of Carson’s claims were not preempted and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does FERC’s authority under the FPA preempt state breach of contract claims regarding interconnection agreements with non-public utilities? | Contract enforcement is a state law matter; FERC's authority is not exclusive. | FERC’s exclusive jurisdiction under the FPA preempts any state law claim. | Not preempted; FERC and state courts have concurrent jurisdiction. |
| Did Carson’s requested relief directly conflict with any existing FERC order? | No direct conflict exists; FERC hasn't adjudicated contract breach. | Carson’s state suit would interfere with the FERC process and orders. | No current conflict preemption; hypothetical conflicts insufficient. |
| Does FERC’s ongoing abeyance and study requirement bar state court claims? | FERC is still gathering facts; state breach of contract claims remain open. | FERC’s abeyance order implies exclusive jurisdiction until studies are done. | Abeyance does not bar contract enforcement claims; no final adjudication. |
| Are all forms of injunctive relief sought by Carson preempted? | Not all injunctive relief overlaps with FERC’s authority, e.g., invoices. | Any relief interfering with interconnection/study process is preempted. | Certain relief (re: transmission request) is preempted, but much is not. |
Key Cases Cited
- Southern Cal. Edison Co. v. Public Utilities Com., 121 Cal.App.4th 1303 (Cal. Ct. App. 2004) (preemption where state regulation contravenes FERC-issued orders on interconnection agreements)
- Central Iowa Power Co-op. v. Midwest Independent Transmission System Operator, Inc., 561 F.3d 904 (8th Cir. 2009) (concurrent jurisdiction over interpreting FERC-approved contracts)
- City of Osceola, Ark. v. Entergy Arkansas, Inc., 791 F.3d 904 (8th Cir. 2015) (courts and FERC share jurisdiction in interpreting energy contracts)
- Gulf States Utilities Co. v. Alabama Power Co., 824 F.2d 1465 (5th Cir. 1987) (federal preemption may be partial, not total, for contract claims relating to energy regulation)