405 F.Supp.3d 1071
D.N.M.2019Background
- Great Divide Wind Farm 2 LLC and Great Divide Wind Farm 3 LLC (Great Divide) developed two wind projects in New Mexico that qualify under PURPA and sought determinations that El Paso Electric (EPE) has a legally enforceable obligation to purchase their output for 30 years at avoided-cost rates.
- New Mexico Public Regulation Commission (NMPRC) has adopted Rule 570 implementing PURPA; NMPRC dismissed Great Divide’s state complaint, concluding a legally enforceable obligation cannot arise until a QF is ready to interconnect and deliver energy (N.M. Order Nov. 7, 2018).
- Great Divide filed an enforcement request with FERC; FERC declined to act but stated Great Divide may bring suit in federal court if appropriate.
- Great Divide then filed this federal suit seeking a declaration that the N.M. Order violates PURPA/FERC rules and injunctive relief directing NMPRC to issue an order allowing pre-construction legally enforceable obligations and a methodology for avoided-cost calculations.
- Defendants moved to dismiss for lack of subject-matter jurisdiction, arguing Great Divide brought an as-applied challenge (state-court jurisdiction) rather than an as-implemented facial/implementation challenge (federal jurisdiction under PURPA), and federal courts have jurisdiction only over as-implemented claims after FERC decline to act.
- The Court concluded Great Divide’s complaint challenges the NMPRC’s application of its law to Great Divide (an as-applied claim), not the facial lawfulness of Rule 570 or NMPRC’s statewide implementation, and therefore dismissed for lack of jurisdiction but allowed amendment to plead an as-implemented challenge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court has jurisdiction under PURPA over Great Divide’s complaint | Great Divide contends it brings an as-implemented challenge to NMPRC’s implementation of PURPA/Rule 570 and thus may proceed in federal court after FERC declined enforcement | Defendants argue the Complaint is an as-applied challenge (seeking relief only as to Great Divide and EPE) and PURPA gives exclusive initial/state-court jurisdiction for as-applied claims; federal courts lack jurisdiction | Court held Complaint alleges only as-applied claims; federal jurisdiction lacking; case dismissed without prejudice unless amended to plead an as-implemented claim |
| Whether the Complaint challenges Rule 570 on its face or NMPRC’s interpretation of Rule 570 | Great Divide argued at hearing it challenges NMPRC’s interpretation and Rule 570’s implementation | Defendants noted the Complaint focuses on the NMPRC order and its effects on Great Divide, not a facial attack on Rule 570 | Court found Complaint does not sufficiently challenge Rule 570 or its interpretation as a general implementation; it targets application to Great Divide (as-applied) |
| Whether FERC’s declination to act establishes federal jurisdiction | Great Divide cited FERC’s statement that it may sue in federal court; argued this supports federal forum | Defendants argued FERC’s declination and statements do not bind the court’s independent jurisdictional analysis | Court gave no binding weight to FERC’s Order on jurisdictional question; jurisdiction analysis is for the court itself |
| Whether amendment could cure jurisdictional defect | Great Divide sought leave to proceed quickly and could replead to frame an as-implemented claim | Defendants warned repleading might force rulemaking and delay, but did not contest right to amend | Court permitted amendment as of right to allege an as-implemented challenge (to Rule 570 or NMPRC’s interpretive practice); otherwise dismissal without prejudice |
Key Cases Cited
- Exelon Wind 1, L.L.C. v. Nelson, 766 F.3d 380 (5th Cir. 2014) (distinguishes as-applied challenges from as-implemented facial/implementation challenges under PURPA)
- Power Res. Grp., Inc. v. Pub. Util. Comm’n of Tex., 422 F.3d 231 (5th Cir. 2005) (describes the implementation/as-applied dichotomy and federal jurisdiction over as-implemented claims)
- FERC v. Mississippi, 456 U.S. 742 (1982) (explains Congress’s scheme delegating PURPA implementation to states subject to federal standards)
- Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) (plaintiff bears burden to establish federal subject-matter jurisdiction)
- N.Y. State Elec. & Gas Corp. v. F.E.R.C., 117 F.3d 1473 (D.C. Cir. 1997) (holding failure of state commission to ensure rates reflect avoided cost is an implementation failure under PURPA)