JEFFERSON SOLAR, LLC v. DEPARTMENT OF ENERGY AND ENVIRONMENTAL PROTECTION ET AL.
(AC 45630)
Connecticut Appellate Court
Argued October 19, 2023—officially released April 16, 2024
Bright, C. J., and Cradle and Harper, Js.
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Syllabus
Pursuant to statute (
Pursuant further to statute (
The plaintiff, a renewable energy developer, brought an action for a declaratory judgment pursuant to statute (
Procedural History
Action for, inter alia, a declaratory judgment as to the applicability of a certain provision of the named defendant‘s shared clean energy program requirements with respect to a certain request for proposals seeking bids for shared clean energy facility projects, and for other relief, brought to the Superior Court in the judicial district of New Britain and transferred to the judicial district of Stamford-Norwalk, Complex Litigation Docket, where the court, Ozalis, J., granted the motion to dismiss filed by the named defendant and rendered judgment thereon, from which the plaintiff appealed to this court. Affirmed.
Thomas Melone, for the appellant (plaintiff).
Jill Lacedonia, assistant attorney general, with whom, on the brief, was William Tong, attorney general, for the appellee (named defendant).
Erick M. Sandler, with whom, on the brief, were Johanna S. Lerner and Lauren G. Moscato, for the appellee (defendant FuelCell Energy, Inc., et al.).
Opinion
BRIGHT, C. J. The plaintiff, Jefferson Solar, LLC, appeals from the judgment of the Superior Court dismissing its action for a declaratory judgment pursuant to the
The trial court set forth the following undisputed facts and procedural history in its memorandum of decision.
The Public Utilities Regulatory Authority (PURA), [the department], and the state‘s two major electric distribution companies ([electric companies]), The Connecticut Light and Power Company doing business as Eversource Energy (Eversource) and The United Illuminating Company ([United Illuminating]). PURA is the state agency responsible for regulating Connecticut‘s [electric companies]. . . . Through its energy arm, [the department] is a state agency that has many responsibilities for developing and implementing energy policies and programs. See
“Pursuant to that statutory obligation, [the department] prepared new . . . program requirements and submitted them for PURA‘s review on July 1, 2019. . . . PURA responded to [the department‘s] filing of the proposed . . . program requirements by initiating an uncontested administrative proceeding for review and approval purposes. Through this proceeding, PURA modified and approved [the department‘s] proposed . . . program requirements in a final decision issued on December 18, 2019. . . . These program requirements delineate program elements, including the [program‘s] procurement process, the [program‘s] structure, the bid evaluation and selection process, project eligibility, and bidder eligibility. . . . The selection of contracts was made pursuant to the bidding process administered by
“On April 30, 2020, pursuant to [the department‘s] program requirements, the [electric companies] issued a joint request for proposals ([request]) seeking bids for [shared clean energy facility] projects in their service territories. . . . The program requirements, tariff, and [the request] required the bidders to demonstrate that they have ‘control of the generation site, or an unconditional right, granted by the property owner, to acquire such control.’ . . . According to the terms of the [request], an unconditional option to lease agreement was sufficient to satisfy the requisite site control requirement. . . . The program requirements gave [the electric companies] broad discretion and decision-making authority over the evaluation and initial selection of bids submitted in response to the [request]. . . . The program requirements permitted [the department] to audit any selected bidder to ensure compliance with the program. . . . The program requirements also stated that ‘[the department] shall review and approve the [electric companies‘] final selection before the [electric companies] submit them to PURA . . . .’ Moreover, pursuant to the program requirements, all selected bids must be approved by PURA. . . .
“At a June 9, 2020, city of Derby Board of [Aldermen/Alderwomen] public meeting, the board approved an option to lease agreement between the city of Derby mayor and FuelCell Energy, Inc., and SCEF1 Fuel Cell, LLC (collectively, FuelCell), for a fuel cell power generating facility on Coon Hollow Road in Derby, Connecticut ([property]). . . . On July 1, 2020, the city of Derby entered into an option to lease agreement with FuelCell for the property. . . .
“In response to [the request], the plaintiff submitted a bid for a 4.0 megawatt solar energy project located in North Branford. . . . FuelCell submitted a bid for a 2.8 megawatt natural gas-powered fuel cell located on the property. . . . The option to lease agreement that FuelCell submitted with its bid was signed by the Mayor of Derby and provided FuelCell with the ‘sole and exclusive right, privilege and option to lease [the property] from [Derby], for good and valuable consideration and upon terms and conditions to be negotiated upon exercise of [the] Option . . . .’ The option to lease provides in relevant part: ‘Within ninety (90) days after the date of the Notice, the City and [FuelCell] shall enter into a lease agreement upon the terms and conditions set forth in Exhibit B attached hereto and made a part hereof, and such other terms and conditions as the City and [FuelCell] shall negotiate in good faith ([lease]).’ . . . Section 4 of Exhibit B to the option to lease provides a specific dollar amount that the annual rent (including the amount of any agreement for payment in lieu of taxes) shall not exceed. . . . [United Illuminating] selected FuelCell‘s bid as the winning bid for a 2.8 megawatt natural gas-powered fuel cell on the property. . . . Additionally, [United Illuminating] selected a 1.5 megawatt solar project in Milford. . . . [United Illuminating] also selected the plaintiff‘s bid, but limited the award to a 700 kilowatt facility. . . . On January 22, 2021, PURA approved [United Illuminating‘s] selections in PURA Docket No. 19-07-01 Ruling to Motion No. 46. . . . On May 13, 2021, the city of Derby Board of [Aldermen/Alderwomen] voted in favor of granting FuelCell the lease in connection with the 2.8 megawatt [shared clean energy facility] project. . . . On August 31, 2021, the city of Derby and FuelCell executed a final lease for the property.
“The plaintiff avers that FuelCell did not satisfy the program requirements’ site
“On February 1, 2021, pursuant to
the site control requirements of the [request], and . . . [the department‘s] failure to remove it from the rankings was clearly erroneous and arbitrary and capricious.’ . . . On April 1, 2021, [the commissioner] declined to issue a declaratory ruling.” (Citations omitted; footnotes added.)
In the written decision declining to issue the requested declaratory ruling pursuant to
In response, the plaintiff initiated the underlying declaratory judgment action in the Superior Court pursuant to
as to the applicability of the provision of [the department‘s] regulation (i.e., its [shared clean energy] program requirements, as described herein) as to the specified circumstances of the 2020 [request] . . . .”7
The department moved to dismiss the underlying action, claiming that the plaintiff could not seek a declaratory judgment pursuant to
The court agreed with the department, concluding that the department‘s “mid-level review” of FuelCell‘s bid was not a final decision and because the program requirements are neither General Statutes nor regulations. The court reasoned that “the plain language of
“Additionally, these program requirements were not promulgated pursuant to the UAPA formalities for enacting regulations. . . . The conclusion that the . . . program requirements are not regulations is further supported by the nature of the program that these requirements govern. The . . . program requirements are not generally applicable because this is a highly specialized clean energy program, and the requirements apply to a very limited [number] of potential bidders. . . .
On appeal, the plaintiff claims that the court improperly dismissed its declaratory judgment action under
“Administrative agencies are tribunals of limited jurisdiction and their jurisdiction is dependent entirely [on] the validity of statutes vesting them with power and they cannot confer jurisdiction [on] themselves. . . . [A]n administrative body must act strictly within its statutory authority, within constitutional limitations and in a lawful manner. . . . It cannot modify, abridge or otherwise change the statutory provisions, under which it acquires authority unless the statutes expressly grant it that power. . . .
“[T]he question of subject matter jurisdiction is a question of law . . . and, once raised, either by a party or by the court itself, the question must be answered before the court may decide the case. . . . [B]ecause [a] determination regarding . . . subject matter jurisdiction is a question of law, our review is plenary.” (Citation omitted; internal quotation marks omitted.) Kleen Energy Systems, LLC v. Commissioner of Energy & Environmental Protection, 319 Conn. 367, 380–81, 125 A.3d 905 (2015).
“There is no absolute right of appeal to the courts from a decision of an administrative agency. . . . Appeals to the courts from administrative [agencies] exist only under statutory authority . . . . Appellate jurisdiction is derived from the . . . statutory provisions by which it is created, and can be acquired and exercised only in the manner prescribed. . . . In the absence of statutory authority, therefore, there is no right of appeal from [an agency‘s] decision . . . .” (Internal quotation marks omitted.) Trinity Christian School v. Commission on Human Rights & Opportunities, 329 Conn. 684, 692–93, 189 A.3d 79 (2018). In the present case, the relevant statutory authority is
Pursuant to
Whether the plaintiff has a statutory right to seek a declaratory judgment under
On appeal, the plaintiff notes that the dispositive issue in the present case is “whether [the department‘s] program requirements under the [shared clean energy facility] program are a ‘regulation’ (i.e., a statement of general applicability that implements, interprets, or prescribes law or policy), such that a declaratory ruling can be requested under [§] 4-176.”8 It argues that the program requirements are regulations under the UAPA because they “are a statement of general applicability implementing law or policy that apply to an entire industry—energy generators that wish to compete under the [shared clean energy facility] program—and thus constitute an agency statement of general applicability, and thus a regulation, under
We begin with the relevant statutory language. First,
Specifically, the legislature directed the department to develop the program requirements for PURA‘s approval, which implicates
It is axiomatic that “the legislature, rather than the agencies, has the primary and continuing role in deciding which class of proceedings should enjoy the full panoply of procedural protections afforded by the [act] to contested cases, including the right to appellate review by the judiciary. Deciding which class of cases qualif[ies] for contested case status reflects an important matter of public policy and the primary responsibility for formulating public policy must remain with the legislature.” (Internal quotation marks omitted.) Middlebury v. Dept. of Environmental Protection, supra, 283 Conn. 170. Thus, given that the legislature has stated expressly its intent that there be no right to judicial review in PURA initiated procurement proceedings broadly and that it directed the department to develop “program requirements“—not regulations—to be approved by PURA, we cannot agree with the plaintiff that the program requirements constitute regulations that are subject to a declaratory judgment action under
In light of that statutory scheme, the plaintiff‘s reliance on Walker v. Commissioner, Dept. of Income Maintenance, 187 Conn. 458, 446 A.2d 822 (1982), is misplaced. In Walker, the plaintiff, a recipient of public assistance benefits under a program administered by the defendant agency, sought payment for expenses she had incurred when she moved her residence. Id., 459. The defendant denied the request because “the plaintiff had failed to obtain approval of the expenses prior to moving.” Id. Although the regulation under which the plaintiff sought payment did not require prior approval, it was the defendant‘s policy “not generally available to the public . . . [that] expressly include[d] moving expenses among those special items requiring prior approval . . . .” Id., 460. In determining whether the unstated policy had “a sufficiently substantial effect upon the rights of a party as to constitute a regulation” under the UAPA; id.; our Supreme Court explained that “[i]t is not conclusive that an agency has, or has not, denominated its action a regulation or that it has, or has not, promulgated it procedurally in the fashion that would be required of a regulation. . . . The test is, rather, whether a rule has a substantial impact on the rights and obligations of parties who may appear before the agency in the future.” (Citations omitted; internal quotation marks omitted.) Id., 462.
Applying that test, the court reasoned that “[t]he prior approval policy is a statement of general applicability because it applies to all [assistance] recipients seeking help with their moving expenses. . . . The policy also affects the substantial rights of potential recipients in ways in
In the present case, the plaintiff argues that, “[a]s in Walker, here [the department‘s] rules concern more than the department‘s internal management; [they] affect the substantial rights of the potential [bidders].” According to the plaintiff, “just like a typical regulation, the agency (here, [the department]) administers it and is in charge of implementing it and applying it to specified circumstances. . . . The decision of whether a bidder satisfies [the department‘s site control rules] resides with [the department]. PURA does not second-guess [the department]. . . . Here, [the department‘s] rules apply to an entire industry . . . and regulate billions of dollars worth of contracts. Here, as in the normal situation with rules, the [department‘s] site control rules provide the law that determines who is entitled to the public benefit of the contracts.” (Citations omitted.)
The critical distinction between the present case and Walker, however, is that here, the department acted in accordance with an express legislative directive to develop “program requirements” to be adopted by PURA, whereas, in Walker, the agency developed its policy for administering its own regulation without an express legislative directive to act in a particular manner. Accordingly, the present case does not involve an agency‘s characterization of its own action, but, rather, it involves the legislature‘s express directive to the department to develop “program requirements“—not regulations. Moreover, those program requirements were adopted by PURA in an uncontested proceeding, as defined by
For the same reason, the out-of-state cases on which the plaintiff relies also are unpersuasive. Specifically, the plaintiff cites two cases, Academy Bus Tours, Inc. v. New Jersey Transit Corp., 263 N.J. Super 353, 622 A.2d 1335 (N.J. App. Div.) (Academy), cert. denied, 134 N.J. 485, 634 A.2d 531 (1993), and Sa-Ag, Inc. v. Minnesota Dept. of Transportation, 447 N.W.2d 1 (Minn. App. 1989) (Sa-Ag), in support of its contention that other state courts have found that bidding requirements constitute rules or regulations under the UAPA. Neither of those cases, however, involved a statutory scheme comparable to that at issue in the present case.
First, in Academy, the New Jersey Appellate Division held that the policy of the defendant, New Jersey Transit Corporation (NJ Transit), establishing criteria for contracting out for its bus routes was a rule under the New Jersey Administrative Procedure Act, because the policy was “an agency statement of general applicability and continuing effect that implements or interprets law or policy.” (Internal quotation marks omitted.) Academy Bus Tours, Inc. v. New Jersey Transit Corp., supra, 263 N.J. Super. 361. In that case, the relevant statutes simply provided that, “[i]n the provision of public transportation services, it is desirable to
Similarly, in Sa-Ag, “the Minnesota Department of Transportation issued a statement . . . (the addendum), to all bidders on state contracts. The addendum purported to explain which haulers of sand, gravel or stone to state highway construction projects would have to adhere to prevailing wage and hourly rates. Claiming that this addendum was an interpretation of [a Minnesota statute], [the] respondents asserted the addendum constituted a rule, the adoption of which is subject to the rulemaking procedures set forth in the Minnesota Administrative Procedure Act (MAPA) . . . . Determining that the addendum was a statement of general applicability and future effect, the trial court concluded the addendum was a rule and enjoined the state from enforcing its provisions unless and until it is adopted as a rule after notice and a hearing pursuant to MAPA.” (Citation omitted.) Sa-Ag, Inc. v. Minnesota Dept. of Transportation, supra, 447 N.W.2d 1-2. On appeal, the Court of Appeals of Minnesota explained that “[t]here is no dispute the addendum is in fact a statement of an agency of general applicability and future effect. . . . The parties agree that, if anything, the addendum would be an interpretive rule, which is one promulgated to make specific the law enforced or administered by the agency.” (Citations omitted; internal quotation marks omitted.) Id., 4. After considering the text of the relevant statute, the court concluded that it was “certainly subject to more than one interpretation and the Department of Transportation thus engaged in rulemaking by issuing the addendum which interprets [that statute]. Consequently, the trial court properly enjoined enforcement of the terms of the addendum unless and until the appropriate state agency adopts a rule pursuant to [MAPA].” Id., 5.
Again, just as with Walker v. Commissioner, Dept. of Income Maintenance, supra, 187 Conn. 458, the critical distinction between both Academy and Sa-Ag and the present case is that, unlike the clearly expressed legislative directives to the department and PURA in
In sum, mindful of the legislature‘s role, we reject the plaintiff‘s proffered interpretation of the program requirements in the present case, which plainly contradicts the legislature‘s clearly expressed policy decision. Cf. Kleen Energy Systems, LLC v. Commissioner of Energy & Environmental Protection, supra, 319 Conn. 388 (rejecting any interpretation of
The judgment is affirmed.
In this opinion the other judges concurred.