In re Application of Derby GLC Solar, LLC
No. 2019-078
Supreme Court of Vermont
September Term, 2019
2019 VT 77
Anthony Z. Roisman, Chair
PRESENT: Robinson, Eaton and Carroll, JJ., and Dooley, J. (Ret.), and Pearson, Supr. J. (Ret.), Specially Assigned
NOTICE: This opinion is subject to motions for reargument under
David G. Carpenter of Facey Goss & McPhee P.C., Rutland, for Appellant.
Alexander W. Wing, Special Counsel, Department of Public Service, Montpelier, for Appellee State.
Owen J. McClain of Sheehey Furlong & Behm P.C., Burlington, for Appellee Green Mountain Power Corporation.
Joslyn L. Wilschek of Wilschek Iarrapino Law Office, PLLC, Montpelier, for Appellee Vermont Electric Cooperative, Inc.
Ronald A. Shems of Tarrant, Gillies & Richardson, Montpelier, for Amicus Curiae Washington Electric Cooperative, Inc.
¶ 2. A developer of a new electric-generation facility in Vermont may not begin construction until the PUC determines that the proposed project “will promote the general good of the State and issues a certificate to that effect.”
(4) Will result in an economic benefit to the State and its residents.
. . .
(7) [I]s in compliance with the electric energy plan approved by the Department under section 202 of this title, or that there exists good cause to permit the proposed action.
. . .
(10) [C]an be served economically by existing or planned transmission facilities without undue adverse effect on Vermont utilities or customers.
¶ 3. In March 2017, applicant applied for a CPG to construct and operate a 500-kilowatt (kW) group net-metered solar photovoltaic electric-generation facility on a reclaimed portion of a sand and gravel pit in Derby, Vermont. Applicant provided notice to all required entities, including the Department of Public Service, Vermont Electric Cooperative, Inc. (VEC), and Green Mountain Power Corporation (GMP). The project would be located in VEC‘s service territory and was expected to operate for twenty-five years.
¶ 4. VEC and the Department filed comments raising concerns about the project and requested a hearing. In September 2017, the hearing officer granted the requests for a hearing and rescinded the conditional waivers for
¶ 5. The PUC made the following findings in its decision. The proposed project would be within the Sheffield-Highgate Export Interface (SHEI). The SHEI is a largely rural area along the Canadian border in northern Vermont where the electrical transmission system is frequently constrained. Output from existing energy generators often exceeds local demand for electricity, and the transmission lines leading out of the area lack sufficient capacity to transport the excess power without jeopardizing the reliable operation of the electrical grid.
¶ 6. In 2013, ISO New England, the entity that serves as the independent system operator for New England‘s bulk electric power generation and transmission system, demarcated the SHEI and established generator operation limits to ensure that the transmission system continued to function reliably. When these limits are reached, large energy generators in northern Vermont that sell power in the regional energy markets are required to reduce, or “curtail,” their output because the transmission system lacks capacity to export the power. In addition, they receive lower prices for the energy they do produce. “Large” generators have a capacity of five megawatts (MW) or more.
¶ 7. In 2016, ISO New England amended its rules to apply these limits to renewable energy generators. As a result, during times when the SHEI is export-constrained, large renewable energy generators in northern Vermont receive lower prices for the electricity they produce and, at the same time, are directed to curtail their output. This rule is known as the “Do-Not-Exceed” dispatch rule.
¶ 8. The SHEI includes several large renewable energy generators, including the 63-MW Kingdom Community Wind project, the 40-MW Sheffield Wind project, and the 27-MW Sheldon Springs hydroelectric project. These generators sell their energy output in the ISO New England regional electricity market. Kingdom Community Wind—– an array of twenty-one wind turbines sited on Lowell Mountain and adjacent ridgetops in Lowell—is owned by GMP, which retains 55 MW of the project‘s output and sells the remaining 8 MW to VEC. Kingdom Community Wind has been subject to price reductions and often receives directions from ISO New England to curtail output. When this occurs, GMP loses the market value of the energy that could have been produced as
¶ 9. From March 2017 to February 2018, VEC‘s net power costs increased by $587,750 due to lower price revenues as the result of existing SHEI constraints. These increased costs resulted in upward pressure on retail electric prices paid by Vermont customers.
¶ 10. The SHEI also includes multiple small (i.e., less than 5 MW) hydroelectric, solar, and farm methane generators. These generators do not sell their output in the regional electricity market, but instead operate as load reducers, reducing VEC‘s obligation to purchase electricity to match its customers’ use.
¶ 11. As a net-metered system, applicant‘s proposed project would be a load reducer. The project would reduce the effective amount of demand for electricity within the SHEI area that is available to absorb local generation. During times of high local generation or low local electricity demand, the project would cause ISO New England to curtail some amount of output from existing renewable energy generators in the SHEI.
¶ 12. If the project had operated during March 2017 to February 2018, it would have resulted in additional curtailments of Kingdom Community Wind totaling 57 megawatt hours. That energy instead would be generated by applicant‘s project at the net-metering rate of $0.16919 per kilowatt hour, resulting in an additional annual cost to Vermont ratepayers of $9,692. In addition, Kingdom Community Wind would have lost approximately $612 in annual revenue, for a total annual cost to ratepayers of $10,304. Over the life of the project, the project would result in additional costs to ratepayers of more than $250,000. This estimate does not account for the utilities’ loss of revenue from tax credits or impacts to other generation sources in the region, or for system upgrades that VEC may need to install to handle the additional power generated by the project.
¶ 13. There are currently no existing or planned transmission facilities that would resolve all of the existing SHEI constraints or the incremental constraints caused by the project. Fully resolving the congestion in the SHEI area would require an investment of several hundred million dollars to upgrade the major transmission lines.
¶ 14. Based on these findings, the PUC concluded that applicant‘s project could not be served economically by existing or planned transmission facilities without undue adverse effect on Vermont utilities or customers. See
¶ 15. The PUC also found that the project failed to satisfy
¶ 16. Because the PUC concluded that
¶ 17. On appeal, applicant argues that the PUC violated the Administrative Procedure Act by not making findings regarding the economic benefits of the project, either as part of an analysis of
¶ 18. When the PUC evaluates a CPG petition under
I. Whether PUC Erred in Declining to Consider Overall Economic Benefit of Project
¶ 19. Applicant first argues that the PUC violated
¶ 20. Applicant argues that the project‘s alleged overall economic benefits are directly germane to
¶ 21. For the same reason, we reject applicant‘s claim that the PUC erred by failing to consider whether the project would promote the general good of the state and therefore violated
II. Whether the PUC‘s Consideration of GMP Expert Testimony Requires Reversal
¶ 22. Applicant next claims that the PUC erred in considering certain testimony of a GMP expert in its decision. At the hearing, the chairman of the PUC asked the GMP expert about the project‘s potential adverse impacts on energy prices paid to Vermont generators. In response, the expert provided a general explanation of the impacts on GMP and estimated that between June 2016 and late 2017, SHEI constraints had cost GMP ratepayers “several million dollars.” The PUC made a similar finding to this effect in its decision and mentioned the finding as part of its discussion of
¶ 23. Commission Rule 2.213 requires parties to prefile testimony and exhibits of witnesses they intend to call. See
¶ 24. Applicant also has not shown that it either requested the disputed information
¶ 25. Even assuming that it was improper for the PUC to consider the expert testimony, applicant has not demonstrated that the alleged error was prejudicial. See
III. Whether the PUC Improperly Interpreted § 248(b)(10)
¶ 26. Applicant contends that the PUC improperly interpreted
¶ 27. The PUC has not defined a standard for determining when the adverse effects of a project are “undue” under
¶ 28. We defer to the PUC‘s interpretation of
¶ 29. Applicant also argues that the PUC should have considered the imprudent business decisions made by the utilities that allegedly created the curtailment situation in the SHEI. We disagree.
IV. Whether the PUC Misinterpreted § 248(b)(7)
¶ 30. Next, applicant argues that the PUC‘s interpretation of
¶ 31. Applicant has not identified any previous PUC decisions to support this contention.7 Applicant therefore has failed to meet its burden of showing that the PUC has inconsistently applied
V. Whether the PUC Engaged in Improper Burden Shifting
¶ 32. Finally, applicant argues that it provided credible evidence to satisfy each of the
¶ 33. We find no error. The record shows that the other parties presented evidence to support their position that the project would not advance the goals of the Comprehensive Energy Plan and would cause undue adverse impacts on Vermont utilities and ratepayers. Applicant essentially is arguing that the PUC should have accepted its version of the facts instead. The PUC acted within its discretion in weighing the evidence, assessing the credibility of the witnesses, and determining that applicant had not met its burden of positive persuasion that criteria
Affirmed.
FOR THE COURT:
Associate Justice
