*1 Filеd 2/5/25 Carson Hybrid Energy Storage v. Turlock Irrigation District CA5
Opinion following Rehearing
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
CARSON HYBRID ENERGY STORAGE, LLC., et al., F087073
Plaintiffs and Appellants, (Super. Ct. No. CV-23-001227) v.
OPINION TURLOCK IRRIGATION DISTRICT, et al.,
Defendants and Respondents.
APPEAL from an order of the Superior Court of Stanislaus County. Sonny S. Sandhu, Judge.
Duran and Cedillo and Manuel Duran for Plaintiffs and Appellants.
Duncan and Allen and Jon R. Stickman for Defendants and Respondents. -ooOoo-
Plaintiffs Carson Hybrid Energy Storage, LLC and CMD Carson, LLC (collectively “Carson”) appeal the trial court’s order dismissing Carson’s complaint with prejudice after the court sustained defendant Turlock Irrigation District’s (“Turlock”) demurrer. The court found that Carson’s complaint was preempted due to ongoing administrative proceedings before the Federal Energy Regulatory Commission (FERC) under the Federal Power Act (FPA). (See 16 U.S.C. §§ 824 et seq.)
We originally filed an opinion reversing the judgment. However, we granted Turlock’s petition for rehearing to consider the impact of new proceedings before FERC that occurred while this appeal was pending. We reaffirm our earlier decision and reverse the judgment.
BACKGROUND
Carson’s Complaint
On March 9, 2023, Carson filed a complaint in Stanislaus County alleging, in relevant part, the following:
Turlock operates as a public corporation that provides electricity services to ratepayers and other utilities. Relevant here, Turlock provides “non-discriminatory transmission access” to other utilities, meaning Turlock “awards interconnection requests and transmission services on a first come first serve equal basis, without regard to project owner.” Carson, a private company, needed to interconnect a future energy storage project with Turlock’s transmission system to sell enеrgy to the electrical grid.
On January 7, 2021, the parties entered into an Interconnection System Impact Study Agreement (ISISA). In return for Carson’s deposit and funding, Turlock would issue a report consistent with the ISISA’s parameters within six to nine months detailing the projected impact of Carson’s project on Turlock’s system, estimating Carson’s costs to upgrade any necessary equipment to secure interconnection, and projecting the time to complete interconnection. Beyond Carson’s deposit, Turlock would invoice Carson for any necessary work, provide those invoices to Carson, and reconcile any discrepancies upon the report’s completion.
Turlock also placed Carson’s project in its interconnection queue. Turlock informed Carson only one project preceded Carson’s project, but Carson later came to believe that Turlock impermissibly placed its own competing energy storage project ahead of Carson’s project in the queue.
Over the next two years, various disputes regarding the ISISA arose forming the basis for Carson’s allegations that Turlock breached the ISISA by: (1) failing to utilize the correct modeling parameters specified in the ISISA; (2) utilizing modeling parameters not provided in the ISISA; (3) failing to provide analysis and models required by the ISISA; (4) failing to provide information required by Section 5.0 of the ISISA; (5) impermissibly delaying the interconnection study for various improper reasons; (6) refusing to provide invoices; (7) refusing to permit Carson to arrange relationships with third-party vendors pursuant to Section 7.1 of the ISISA; (8) failing to communicate with the California Independent System Operator (CAISO) as required by Attachment A to the ISISA; and (9) threatening to withdraw Carson’s interconnection request unless Carson provided an additional $150,000 within 30 days for Turlock to proceed with the next study, the Interconnection Facilities Study (IFS), where Turlock has not, according to Carson, completed the first study under the ISISA.
Carson requested that the trial court award injunctive relief to prevent Turlock from (1) enforcing the deadline to fund the $150,000 for the IFS until Turlock completes the deficient ISISA report, (2) removing Carson’s project from the interconnection queue, and (3) considering its own competing project before Carson’s project. Carson also requested that the court order Turlock to specifically perform the obligations Carson contended Turlock failed to perform.
FERC Proceedings
On February 10, 2023, plaintiff CMD Carson, LLC (CMD) filed an application with the FERC under sections 210 and 211 (16 U.S.C. §§ 824i, 824j) of the FPA for an order directing Turlock to provide interconnection and transmission services for Carson’s project. The factual allegations in CMD’s application were substantially the same as *4 those in its complaint. 1 However, CMD did not request that FERC issue the relief requested in Carson’s complaint.
Turlоck filed, in relevant part, a protest and motion to hold the FERC proceedings in abeyance pending the completion of the study process, upgrades, and new facilities. Turlock argued that ordering interconnection prior to the completion of the above would not meet the “requirements of sections 210, 211, 212, and 213 of the FPA and section 2.20 of the Commission’s Regulations.” Turlock further argued a premature order would “jeopardize [the] reliability of Turlock’s system and compel ratepayers to subsidize provision of service to [CMD] because Turlock would have to pay for upgrades to avoid exposing its system to reliability risks.” Finally, Turlock contended that, absent the agreements required for the full study and interconnection process, Turlock could not ensure the project would conform to Turlock’s operating criteria, and, without an IRS Private Letter Ruling, “would jeopardize the tax-exempt status of the bonds that Turlock used to finance its transmission system.”
With respect to Turlock’s request for abeyance, CMD argued that all issues need not be resolved prior to a preliminary order requiring interconnection. CMD admitted it was “willing to agree to and pay for further studies, but Carson would like those agreements to be made under the Commission’s oversight.” Otherwise, Carson opposed Turlock’s protest and request for abeyance.
On May 22, 2023, FERC granted Turlock’s request to hold the proceedings in abeyance “pending the necessary interconnection and transmission studies.” Specifically, it found “that an abeyance is warranted because Turlock has stated that it is ready and willing to provide service and that it will require a section 211 order to protect the tax- exempt status of its bonds. An abeyance will provide the parties time to continue moving 1 Absent from our record, among other things, is CMD’s application and Turlock’s protest and motion. However, FERC’s May 22, 2023, order summarizes both. *5 through Turlock’s procedures by completing the necessary studies and identifying needed upgrades. Turlock has indicated that an [IFS], a Transmission System Impact Study, and a Transmission Facilities Study still need to be completed.” (Fn. omitted.)
FERC indicated that it “require[d] additional information” to issue a final order. To obtain that information, “Carson must sign the study agreements and pay for further studies and Turlock must complete those studies to understand the impacts of the Project on its electric system and to identify any needed system upgrades to ensure that the operation of the Project will not result in any violations of the applicable reliability criteria. We find that this information is necessary before we can issue a proposed order in this case. Without this information, we cannot determine whether the reliability of Turlock’s system will be unreasonably impaired by an order directing Turlock to provide transmission service to Carson.” (Fn. omitted.)
In other words, FERC required the “completion of and payment for interconnection and transmission studies, including interconnection-related system impact studies and facilities studies as well as transmissions related studies” before it could issue a proposed interconnection order.
FERC also ordered the parties to “submit an informational status report (either jointly or independently) regarding these study agreements and the related progress on study completion to the Commission within 60 days of the date of this order, explaining whether they have successfully entered the necessary agreements and the estimated timeline for completion of the remaining interconnection and transmission studies. At that time, the Commission may take further action.”
While this appeal was pending, FERC issued another order in the administrative
proceedings involving the parties. (See
CMD Carson, LLC
(August 15, 2024) 188 FERC
*6
¶ 61127 [
On January 15, 2025, prior to oral argument, FERC issued another order
dismissing Carson’s rehearing request as to the above order and granting clarifiсation,
(See
CMF Carson, LLC
(January 16, 2025)
Federal Proceedings
Turlock removed Carson’s state court complaint to the United States District Court, Eastern District of California, claiming that Carson’s suit was “ ‘nominally posited on state law breach of contract claims’ ” but is actually “ ‘dependent on whether 2 Unfortunately, counsel for the parties did not inform the court about this order until the petition for rehearing was filed.
[Turlock’s] conduct conformed to the requirements of FPA Sections 210 and 212
(16 U.S.C. § 824i, 824k) and FERC orders and regulations issued under these
provisions.’ ” (
Carson Hybrid Energy Storage, LLC v. Turlock Irrigation District
(E.D.
Cal. June 21, 2023, No. 23-CV-460-JLT-EPG)
The district court explained that Carson’s “FERC petition does not allege that
[Turlock] violated the FPA; it merely asks FERC to issue an interconnection order
pursuant to its power under FPA Sections 210 and 211 because Carson’s negotiations
with [Turlock] were not ultimately fruitful.” (
Carson
,
supra
,
The court further determined that application of federal law was not necessary to
the resolution of Carson’s complaint because some of Carson’s theories did not depend
on any construction of federal law, nor was an adjudication of what constitutes “Good
Utility Practice” a substantial question in this case. (
Carson
,
Turlock’s Demurrer
On July 13, 2023, Turlock demurred to Carson’s complaint on the grounds that it failed to state facts sufficient to support any cause of action. (Code Civ. Proc., § 430.10, subd. (e).) Specifically, Turlock argued the injunctive relief sought by Carson conflicted with the FERC’s May 22, 2023, order, which Turlock interpreted as directing Carson to *8 pay for, and proceed with, the remaining studies, including the IFS. Turlock also argued that Carson’s request for specific performance conflicted with FERC’s purported directive that the parties continue the study process and report to FERC.
Carson filed an оpposition arguing that (1) the May 22, 2023, order could not preempt its state lawsuit because it was not a federal law or federal regulation, (2) FERC’s jurisdiction under the FPA does not include Carson’s lawsuit, (3) there was no conflict between FERC’s order and the relief Carson requested in its complaint, and (4) that 16 U.S.C. section 825i does not govern Carson’s breach of contract claim. Carson did not request leave to amend.
On August 23, 2023, the trial court sustained Turlock’s demurrer without leave to amend. The court held that Carson’s breach of contract claim was “pre-empted by [FERC’s] federal statutory jurisdiction over transmission of electrical energy and over interconnectional agreements emanating from the [FPA].” Further, it held that Carson’s complaint was “specifically preempted” by its conflict with FERC’s May 22, 2023, order.
On August 28, 2023, the trial court issued an order, upon the parties’ stipulation, dismissing the case with prejudice. 3 Carson timely appealed on October 27, 2023.
DISCUSSION
I. Standard of Review
“We review de novo an order sustaining a demurrer. [Citation.] Likewise,
whether state law is federally preempted is a ‘pure question of law’ that we independently
review. [Citation.] In deciding whether a demurrer was properly sustained, “[w]e are not
bound by the trial court’s stated reasons, if any, supporting its ruling; we review the
3
Though there appears to be no judgment issued in this case, and an order
sustaining a demurrer without leave to amend is interlocutory and not appealable
(
Forsyth v. Jones
(1997)
II. Applicable Legal Principles
We conclude that the relief sought by Carson’s complaint in the trial court is not preempted by FERC’s exclusive jurisdiction under the FPA. First, we examine relevant preemption principles and FPA provisions. Second, we conclude that the scope of the FPA’s delegation to FERC of the authority to order interconnection does not, with one exception, presently preempt the relief sought by Carson. We reverse the judgment.
A.
Preemption Principles
“The Supremacy Clause provides that ‘the Laws of the United States’ (as well as
treaties and the Constitution itself) ‘shall be the supreme Law of the Land ... any Thing in
the Constitution or Laws of any state to the Contrary notwithstanding.’ [U.S. Const.]
Art. VI, cl. 2. Congress may consequently pre-empt, i.e., invalidate, a state law through
federal legislation. It may do so through express language in a statute. But even where ...
a statute does not refer expressly to pre-emption, Congress may implicitly pre-empt a
state law, rule, or other state action.” (
Oneok, Inc. v. Learjet, Inc
. (2015)
Some decisions identify four species of federal preemption— express, conflict,
obstacle, and field. (
Viva! Internat. Voice for Animals v. Adidas Promotional Retail
Operations, Inc
. (2007)
Preliminarily, we conclude that no “presumption against preemption” exists in this
case. (See
Wholesale Electricity Antitrust Cases I & II
(2007)
Among the versions of implied preemption, conflict preemption primarily occurs
in two situations: (1) “where it is impossible for a private party to comply with both state
and federal law” and (2) “where ‘under the circumstances of [a] particular case, [the
challenged state law] stands as an obstacle to the accomplishment and execution of the
full purposes and objectives of Congress.’ ” (
Crosby v. National Foreign Trade Council
(2000)
“ ‘[T]he threshold for establishing’ such an obstacle ‘is demanding: “It requires
proof Congress had pаrticular purposes and objectives in mind [and] a demonstration that
leaving state law in place would compromise those objectives ….” ’ [Citation]; see
Chamber of Commerce of the United States of America v. Whiting
(2011)
Field preemption applies where federal law is so comprehensive that we may
reasonably infer that Congress excluded state regulation, even if there is an “ ‘absence of
express pre-emptive language.’ ” (
McKenney v. Purepac Pharmaceutical Co
. (2008)
Thus, even where a federal law or regulation expressly preempts state law, a court
must still inquire about the “ ‘substance and scope of Congress’ displacement of state
law[.]’ ” (
Espinoza v. Hepta Run, Inc
. (2022)
B. Federal Power Act and FERC’s Authority 1. The Federal Power Act
The FPA empowers FERC to govern the interstate sale and transmission of
electricity and any facility for such transmission or sale of electric energy. (16 U.S.C.
*12
§ 824(a), (b)(1).) FERC’s jurisdiction is greatest over “public utilities,” which are, in
fact, private sellers of electricity. (
In re Electric Refund Cases
(2010) 184 Cal.App.4th
1490, 1496.) They must file with FERC a “tariff” that lays out, in relevant part, the
procedures and
agreements
, including an ISISA, similar in terms to the one in this case,
necessary for an applicant to interconnect with that public utility. (18 C.F.R. §§ 35.1(a),
35.10a(a); Standardization of Generator Interconnection Agreements and Procedures
(July 24, 2003)
Once approved by FERC, an agreement like the ISISA “is part of a FERC-filed tariff,” taking on “the same legal force as a federal regulation.” ( Central Iowa Power Co- op v. Midwest Independent Transmission System Operator, Inc. (8th Cir. 2009) 561 F.3d 904, 913; see 18 C.F.R. § 35.2(c)(1) [defining “tariff” in part as “all classifications, practices, rules, or regulations which in any manner affect or relate to” electric service].)
However, “non-public” utilities, including governmental entities like Turlock, are
largely exempt from FERC’s jurisdiction (16 U.S.C. § 824(f);
In re Electric Refund
Cases
,
The parties debate the scope of FERC’s interconnection authority. That authority is governed by 16 U.S.C. section 824i titled “Interconnection authority.” It vests FERC with authority to, as relevant here, order “physical connection” of an electric utility like Turlock and a utility applicant like Carson. (16 U.S.C. § 824i(a)(1)(A).) FERC may also order other actions necessary for interconnection, e.g., (1) any “action as may be necessary to make effective any physical connectiоn described in subparagraph (A)” *13 (16 U.S.C. § 824i(a)(1)(B)), and (2) “such increase in transmission capacity as may be necessary to carry out the purposes of any order under subparagraph (A) or (B).” 4 (16 U.S.C. § 824i(a)(1)(D).)
To make any of these orders, FERC must determine an order (1) “is in the public interest,” (2) would “encourage overall conservation of energy or capital,” “optimize the efficiency of use of facilities and resources,” or “improve the reliability of any electric utility system or Federal power marketing agency to which the order applies,” and (3) meet “the requirements of [16 U.S.C.] section 824k[.]” (16 U.S.C. § 824i(c).) FERC must engage in a similar analysis where a utility applies for transmission service. (See 16 U.S.C. §§ 824j, 824k.)
Given we accord “substantial deference” to an agency’s reasonable interpretation
of its regulatory authority under the statutory scheme it administers (
Espinoza
,
2. Relevant FERC Cases
FERC has determined that its jurisdiction is not unlimited even if a breach of
contract dispute concerns a FERC-jurisdictional agreement. In
Cottonwood Wind
Project, LLC v. Nebraska Public Power District, Inc
. (June 17, 2016)
FERC agreed. It determined that simply because a dispute arises under the “
pro
forma
terms of a GIA
5
does not compel [FERC] to assert jurisdiction over allegations of
breach of contract.” (
Cottonwood
,
supra
,
In
Kentucky Utilities Company
(March 15, 2005)
and duties of’ Owensboro and ‘Kentucky under the contract’ ” and order Kentucky to pay damages. ( Id ., at ¶ 2.) The agreement at issue was “a longstanding wholesale electricity contract that includes rates, terms, and conditions of service for certain wholesale sales of electric energy in interstate commerce.” ( Id ., at ¶ 3.) Kentucky requested FERC exercise its exclusive jurisdiction ovеr the breach of contract dispute because the interpretation of the contract in the lawsuit “could change wholesale electricity rates charged under the contract” and “reviewing such rates is at the core of [FERC]’s responsibility under the [FPA].” ( Id ., at ¶ 10.) FERC disagreed, reasoning as follows:
“Owensboro’s complaint filed in the [trial court] asks the court to ‘declare the
rights and duties of’ the parties ‘under the Contract’ and award damages to the
extent that Kentucky has failed to comply with the contract. Owensboro requests,
inter alia
, that the court determine how to apply the definition of ‘incremental
energy cost.’ Owensboro argues in its complaint that its contract with Kentucky
requires Kentucky to exclude from such incremental energy cost any demand
charge, whether separately stated or not.
Owensboro does not ask the court to find
any provisions of the contract unreasonable or unenforceable
. In short,
Owensboro seeks an intеrpretation and enforcement of the contract’s existing
provisions,
not a change in the contract
.” (
Kentucky
,
Turlock refers us to the
East Kentucky Power Cooperative
series of cases. (See
East Kentucky Power Cooperative, Inc
. (April 14, 2005)
We find the
E. Ky. Power Coop
. cases inapplicable here. No doubt FERC has
jurisdiction to direct the terms of interconnection within the scope of its regulatory duties
under the FPA: ensuring system reliability, quality, etc. (See 16 U.S.C. §§ 824i, 824j,
824k.) But these cases do not involve an alleged breach of a contract, only a dispute over
which parameters to apply to a base case study. (See
East Kentucky Power Cooperative,
Inc., supra,
Here, Carson is not requesting the trial court to determine which of two competing methodologies to apply to a base case study. Rather, Carson requests the court, in part, to enforce the agreed-upon terms of the ISISA. At this point, interpreting Carson’s complaint under the standards applicable tо a demurrer, Carson is not requesting the court to determine the reasonableness of the study’s findings, their implications for the system’s reliability, or any other areas subject to FERC’s regulatory duties under the FPA. Even if Carson succeeds in court, and Turlock must redo the study, FERC could still reject the results or order it redone under different parameters.
3. Relevant Federal Authorities
Consistent with FERC’s own analysis of its jurisdiction, federal courts have
concluded the same. For example, the mere fact that a breach of contract dispute
concerns a FERC-filed tariff does not “convert[ ] every legal dispute implicating the
[FERC-filed agreement] into one over which the FERC exercises exclusive jurisdiction.”
(
Central Iowa Power Co-op. v. Midwest Independent Transmission System Operator, Inc
.
(8th Cir. 2009)
C. Analysis
1. Concurrent Jurisdiction
Given these authorities, though there is a significant federal presence in the field
of interconnection agreements (
Southern Cal. Edison
,
Southern Cal. Edison concerned whether, to upgrade electrical grid infrastructure at the point of interconnection, a generator of energy or a public utility must pay the up- *18 front costs. ( Southern Cal. Edison , supra , 121 Cal.App.4th at pp. 1304-1305.) FERC issued an order requiring the former. But the California Public Utilities Commission’s (PUC) interpretation of California Public Utilities Code section 399.25 held the latter. ( Ibid .) The court held that, because the FPA accords FERC broad authority over the field of interconnection agreements, and FERC issued the Standard Interconnection Agreement Order promulgating the rule requiring generators of energy to pay, the PUC’s interpretation was preempted. ( Id ., at pp. 1311–1313.)
We do not read Southern Cal. Edison as a broad decision. First, unlike this case, it does not concern the breach of a non-approved agreement. This demarcates the preemption question in this case. In Southern Cal. Edison , that question concerned the PUC’s authority to issue a regulation on an issue already conclusively determined by FERC. Here, the question is whether FERC’s authority preempts a common law cause of action. As discussed, FERC has held that it shares concurrent jurisdiction in cases like these where a party, like Carson, seeks to enforce the terms of a contract.
We do not disagree with Southern Cal. Edison ’s implicit conclusion that FERC has exclusive jurisdiction to regulate interconnection. But Carson is not asking the trial court to regulate interconnection, but rather to enforce the terms of an agreement. That juridical act may impact the future terms of interconnection, but the mere fact that an action to enforce a contract may affect interconnection, or even filed rates, does not render the dispute within FERC’s exclusive jurisdiction. ( Kentucky , 2005 WL 591921, at ¶ 10.) Carson’s complaint does not ask the trial court to adjudicate the unreasonableness or unjustness of the study that will set the terms for interconnection and transmission, only to enforce the agreed to terms.
Certainly, other aspects of Carson’s requested relief do not fall squarely within
FERC’s jurisdiction. The requests in the complaint’s prayer— paragraphs four and five
(to provide invoices) and six (to permit Carson to arrange for payment of vendors)— аre
clearly not preempted. Even if other relief in Carson’s prayer is preempted, these are
*19
clearly state law contract issues. (See, e.g.,
Gulf States Utilities Co. v. Alabama Power
Co
. (5th Cir. 1987)
We also conclude that this case is materially distinguishable from other cases upon
which Turlock relies:
Transmission Agency of Northern California v. Sierra Pacific
Power Co.
(9th Cir. 2002)
In
TANC
, the Transmission Agency of Northern California (TANC) sued various
entities involved in the construction and interconnection of an electricity intertie called
the Alturas Intertie, which TANC alleged interfered with agreements for electric
transmission already in place. (
TANC
,
The Ninth Circuit Court of Appeals affirmed the district court’s order granting the
defendants’ motion to dismiss. The court concluded that “TANC cannot obtain state law
money damages allegedly resulting from the operation of an interstate electricity intertie
expressly approved by FERC, where the manner of operation was necessarily
contemplated at the time of approval.” (
TANC, supra
,
In our view, the TANC court’s reasoning is inapplicable here. For example, if FERC had already issued or approved an interconnection agreement, аnd Carson sought to modify or allege the breach of that agreement in state court, the action would likely be *20 preempted. However, FERC has yet to exercise jurisdiction over or determine the state law breach of contract issues present here. FERC’s prior decisions holding, in similar cases, that it has concurrent jurisdiction counsel us that, unlike in TANC , FERC has not yet issued a final decision that preempts this lawsuit.
In
Cty. of Stanislaus
, the Ninth Circuit Court of Appeals held that an antitrust
action regarding whether certain behavior by Pacific Gas and Electric Company leading
to FERC’s approval of natural gas importation, transportation, and sales was properly
dismissed as contravening the filed rate doctrine. (
Cty. of Stanislaus
,
supra
, 114 F.3d at
p. 860.) In essence, the filed rate doctrine is a deferential rule whereby an agency’s
approval of rates establishes those rates as “ ‘reasonable and nondiscriminatory.’ ” (
Id
.,
at p. 862; see also
Nantahala Power & Light Co. v. Thornburg
(1986)
But nothing in Cty. of Stanislaus or Nantahala affects this case. Turlock interprets Carson’s complaint as challenging “Turlock’s allocation of the costs to mitigate the reliability impacts caused by its proposed interconnection[.]” But Turlock is not FERC. Turlock presents no authority suggesting its decisions are protected by the filed rate doctrine or any analogous rule. Further, Carson’s complaint, at this point, requests the trial court to enforce the contract, not to determine the justness or reasonableness of Turlock’s conduct beyond the contract’s terms. FERC’s issuance of an order resolving the parties’ ISISA dispute may change this analysis, but FERC has not yet issued such an order. We therefore find these cаses inapplicable.
Further, we are unpersuaded that conflict, impossibility, objection, or any other species of preemption applies. Our review of the filings submitted to FERC to which the parties point us discloses no order by FERC that adjudicates the relief requested by *21 Carson’s state court complaint. 6 Turlock’s hypotheses about future conflicts are unpersuasive. The demanding threshold to establish conflict preemption is not met by threats of “ ‘a hypothetical or potential conflict[.]’ ” ( County of Butte , 13 Cal.5th at p. 629.) That FERC may yet take action that would conflict with Carson’s lawsuit is insufficient to establish conflict preemption. FERC has only indicated its need for additional information to complete its analyses under the FPA, but FERC has not, in our view, definitively stated that it has determined Carson’s claims about the ISISA are unmeritorious.
6
Turlock submitted two requests for judicial notice. The December 2, 2024
request for judicial notice requests that we judicially notice approximately 600 pages of
the parties’ filings in the adjacent FERC proceedings, most of which could have been
provided to this court prior to our initial determination in this case. Though we judicially
notice existence of these documents (
Adams v. Bank of America, N.A.
(2020)
Five days prior to oral argument, Carson requested judicial notice of five items: (1) an agreement between a third party and Turlock, (2) a California Department of Water Resources decision that a project not mentioned in Carson’s complaint is exempt from the California Environmental Quality Act, (3) a report by the Department of Water Resources about the Electricity Supply Reliability Reserve Fund, (4) Assembly Bill 205, and (5) Assembly Bill 209.
We deny Carson’s request as to items (1)–(3). The first appears to be a private
contract not properly subject to judicial notice. (Evid. Code, § 451, subd. (c).) Even if it
is, as Carson contends, an act of the Department of Water Resources, as are (2) and (3),
judicial notice of acts of a state legislative, executive, or judicial department is
discretionary. (Evid. Code, § 452, subd. (c);
Coastal Protection Alliance Inc. v. Airbnb,
Inc
. (2023)
Rather, in its January 15, 2025 order, FERC clarified that Carson “
will
have an
opportunity to chаllenge the study results, including how the studies were performed and
the system upgrade or other facilities that the study concludes must be built to facilitate
interconnection of the project and provide transmission service[.]” (
CMD Carson, LLC
(January 16, 2025)
Carson’s breach of contract claims and remedies regarding the ISISA are thus not рreempted by the FPA. FERC has, at most, concurrent jurisdiction over this dispute. Both parties may seek a more affirmative statement of FERC’s jurisdiction from FERC itself. If FERC renders a definitive statement regarding its jurisdiction over this dispute, the parties have avenues in state court to enforce FERC’s exercise of its jurisdiction.
We also disagree with Turlock that permitting this lawsuit to go forward would interfere with FERC’s jurisdiction to adjudicate the terms of the final interconnection agreement between the parties. We understand the ISISA report to fall prior to subsequent studies and the final approval of interconnection and transmission terms by FERC. We understand that FERC could adjust these terms, order new studies, or take other such action. But Carson is not asking, at this time, the trial court to fulfill that role, only to enforce the terms of the parties’ contract.
2. Injunctive Relief The FPA does not expressly grant FERC power to issue injunctive relief. Rather, the FPA permits FERC to “bring an action … to enjoin” conduct that may violate the FPA or “to enforce compliance with this chapter or any rule, regulation, or order thereunder[.]” (16 U.S.C. § 825m, subd. (a).)
The FPA provides the requirements for a good faith request for transmission services. (See 18 C.F.R. § 2.20.) Only if a good faith transmission request is made in accordance with 18 C.F.R. section 2.20’s provisions can FERC “issue an order requiring a transmitting utility to provide transmission services[.]” (18 C.F.R. § 2.20(a)(2).) FERC applies the policies outlined in 18 C.F.R. section 2.20 “when determining whether and when a ‘good faith’ request for service was made.” (18 C.F.R. § 2.20(a)(3).) However, the parties do not point us to, nor can we find, any parallel provision for requests for interconnection.
Here, FERC determined that Carson’s good faith request “was properly submitted
and that it was inappropriate for Turlock to unilaterally deem Carson’s good faith request
withdrawn.” (
CMD Carson, LLC
,
Given the dearth of information on this issue, we decline to hold that FERC’s decision that Turlock cannot yet withdraw Carson’s good faith transmission request *24 implicitly prohibits Turlock from withdrawing Carson’s interconnection request. Insofar as Carson’s request for injunctive relief in the trial court pertains to its transmission request, it is preempted because FERC has already exercised its authority under 18 C.F.R. section 2.20.
However, insofar as Carson’s request pertains to its interconnection request, we do not find that, at this time, it is preempted. If FERC declines to exercise primary jurisdiction over the breach of contract dispute, it makes little sense that the trial court could then adjudicate the breach of contract dispute but have no authority to maintain the status quo pending that resolution. Again, the parties have procedural options available. For example, the parties could seek a declaration from FERC clarifying the scope of its authority, and over what issues FERC will, or will not, exercise authority.
3.
Primary Jurisdiction
For this reason, we decline Turlock’s request to decide whether primary
jurisdiction exists. “ ‘The doctrine of primary jurisdiction … is concerned with
promoting proper relationships between the courts and administrative agencies charged
with particular regulatory duties.’ ” (
Fairless Energy, LLC v. Federal Energy Regulatory
Commission
(D.C. Cir. 2023)
No fixed formula exists for primary jurisdiction, but as noted, FERC considers
three factors: (1) whether it has special expertise rendering the case appropriate for its
decision; (2) whether uniformity of interpretation for the type of issue in dispute is
necessary; and (3) whether the case is important to FERC’s regulatory responsibilities.
(
Fairless
,
“Pursuant to the doctrine of primary jurisdiction, a district court may, under
narrow circumstances, elect in its discretion to refrain from exercise of jurisdiction in
favor of permitting a federal agency with applicable regulatory authority to decide
threshold matters relevant to the dispute.” (
Portland General Elec. Co. v. City of
Glendale
(D.Ct. Org. June 1, 2007, No. 05-1321-PK)
Even if an issue “does not fall within FERC’s exclusive jurisdiction,” a question
may be referred to FERC under the primary jurisdiction doctrine where, in the court’s
discretion, the issue would be best addressed by the agency’s expertise. (
Michigan Elec.
Transmission Co. v. Midland Cogeneration Venture, Ltd. Partnership
(E.D. Mich. 2010)
California courts are also empowered to stay a case to await an administrative
decision under the primary jurisdiction doctrine. (See
Farmers Ins. Exchange v. Superior
Court
(1992)
We decline Turlock’s request to apply the doctrine of primary jurisdiction at this
time. Our record contains no request by any party that the trial court stay the case to
afford the parties reasonable time to seek clarification from FERC of its jurisdiction over
this dispute. Commensurate with the primary jurisdiction doctrine, courts have
*26
“ ‘inherent powers … to insure the orderly administration of justice.’ ” (
Walker v.
Superior Court
(1991)
DISPOSITION
The judgment is reversed. We remand the case to the trial court for further proceedings consistent with this opinion. Carson shall recover its costs on appeal.
SNAUFFER, J. WE CONCUR:
PEÑA, Acting P. J.
SMITH, J.