Ellis-Hall Consultants v. Public Service Commission
2016 UT 34
Utah2016Background
- Ellis‑Hall, a developer of wind projects, received an indicative pricing proposal from Rocky Mountain Power in 2012 under Utah Public Service Commission Schedule 38 (which requires indicative pricing tailored to a project to aid planning/financing).
- After Ellis‑Hall received indicative pricing but before a power purchase agreement (PPA) was executed, the Commission conducted Phase One and Phase Two proceedings to revise avoided‑cost methodology for wind projects.
- Phase One denied Rocky Mountain Power’s request for a stay and recognized that Phase Two might require new avoided‑cost calculations for projects without executed PPAs.
- Phase Two discontinued the prior “market proxy” method and adopted the Proxy/PDDRR avoided‑cost methodology for determining future indicative prices, stating changes apply “going forward” and to “future requests for indicative pricing.”
- Rocky Mountain Power rescinded the 2012 indicative pricing and demanded Ellis‑Hall request updated indicative pricing under the new method; Ellis‑Hall sued, claiming a right to rely on the existing indicative pricing and not to be forced to request a new one.
- The Commission held Ellis‑Hall must accept updated pricing under the new methodology; the Utah Supreme Court reviewed the legal issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard of review for agency interpretation of its own orders/tariffs | Agency legal conclusions should receive de novo correctness review | Commission urged deference (interpretations reasonable if within limits of rationality) | Court held correctness (non‑deferential) review applies; agency not entitled to deference on pure legal questions |
| Whether Phase One/Phase Two orders and Schedule 38 permit the Commission to replace prior indicative pricing methodology for projects with outstanding indicative proposals | Ellis‑Hall: Phase Two applies only to future requests; prior indicative proposals vest the right to rely on their methodology | Commission: Phase Two discontinued market proxy “going forward” and, together with Schedule 38, requires updating indicative pricing for projects without executed PPAs | Court held Phase Two/Schedule 38 do not strip a recipient’s right to rely on the methodology in an already‑issued indicative pricing proposal; they govern future requests |
| Whether Schedule 38 allows unlimited retroactive methodological changes to issued indicative pricing | Ellis‑Hall: Schedule 38 permits updates but an issued indicative pricing gives the developer a right to rely on the methodology shown | Rocky Mountain Power/Commission: Schedule 38 authorizes updates to reflect changes in avoided cost, so prior indicative pricing may be superseded before a PPA is executed | Court held Schedule 38 permits updates for new information but does not authorize fundamental methodological displacement of an already‑issued indicative proposal; reliance right exists for methodology in issued proposal |
| Whether Ellis‑Hall must submit a new request for indicative pricing before negotiating a PPA | Ellis‑Hall: No — it may proceed relying on the issued indicative pricing methodology | Rocky Mountain Power: Yes — it can require a new request and then apply the new Proxy/PDDRR method; alternatively, it can decline to enter a PPA | Court held Ellis‑Hall is not required now to submit a new request and may rely on its issued indicative pricing while negotiations proceed; court declined to decide whether a PPA must ultimately be entered or approved |
Key Cases Cited
- Murray v. Utah Labor Comm’n, 308 P.3d 461 (Utah 2013) (agency conclusions of law reviewed for correctness; standard depends on type of question)
- Hughes Gen. Contractors v. Utah Labor Comm’n, 322 P.3d 712 (Utah 2014) (rejecting broad deference; courts retain de novo interpretation of law)
- McCune & McCune v. Mountain Bell Tel., 758 P.2d 914 (Utah 1988) (prior recognition of deference to agency interpretations of technical provisions)
- Reaveley v. Pub. Serv. Comm’n, 436 P.2d 797 (Utah 1968) (earlier statement that agency is best suited to interpret its orders)
- Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945) (federal doctrine favoring deference to agency interpretation of its own regulations)
- Auer v. Robbins, 519 U.S. 452 (1997) (federal precedent on agency deference for interpretations of its own rules)
- Marbury v. Madison, 5 U.S. (1 Cranch) 137 (U.S. 1803) (judicial duty to say what the law is)