*1 affidavit creat- (holding nonmoving party’s material fact as to genuine issue of
ed relationship). employment an
existence of erred in the district court
Accordingly, summary judgment for
granting EMCC
$66,749.21. Disposition.
V. summary court’s affirm the district
We Haaften’s civil
judgment establishing Van dam-
liability for theft and for to .EMCC $10,000 preclusion. based on issue
ages of summary judgment in ex-
We reverse and remand for a trial
cess of that amount remaining damages sought by
on the are taxed appeal
EMCC. Costs of this
equally party. to each AND RE-
AFFIRMED IN PART PART; IN REMAND-
VERSED CASE
ED.
NEXTERA ENERGY RESOURCES
LLC, Appellant,
v. BOARD, Appellee,
IOWA UTILITIES Energy Company and
MidAmerican Advocate,
Office of Consumer
Intervenors-Appellees.
No. 10-2080.
Supreme Court of Iowa. 8, 2012.
June *5 Saggio
Bret A. Dublinske of Gonzalez & Moines, LLP, Harlan West Des Victoria J. Place, Moines, and Peter L. Gardon Des Bryan and K. Nowicki of Reinhart Boer- S.C., Madison, Wisconsin, ner Van Deuren appellant. for Lynch Gary Stump, D. David J. and Des Moines, appellee for Iowa Board. Utilities Brown, Davis, Steven L. Nelson of Koehn, Roberts, P.C., Shors & Des Moines, and Steven R. Weiss and Charles Urbandale, Montgomery, appellee R. for Energy MidAmerican Company. Polle, Schuling Mark R. and Ronald C. Moines, appellee Des for Office of Con- sumer Advocate.
WIGGINS, Justice. LLC, Resources, Energy ap-
NextEra peals Utility the Iowa Board’s decision ratemaking principles to advance Energy Company MidAmerican for the Project, proposed wind Wind VII facility. NextEra issues generation raises pertaining interpretation to the Board’s (2009), Iowa Code section 476.53 whether the Board’s supported filing substantial evidence Before its application, MidAmeri- findings, applicability of section 476.43 can entered into a stipulation agree- and ratemaking proceeding, and section ment with the Office of Consumer Advo- constitutionality applied to a 476.53’s agreement, cate. The accompanied which rate-regulated public utility may com- application, MidAmerican’s addressed Af- pete energy the wholesale market. twelve ratemaking principles. stip- It also ter the Board approved ap- MidAmerican’s ulated MidAmerican had met the condi- plication, sought judicial review precedent tions for receiving ratemaking of that decision. The district court af- principles. firmed the Board. MidAmerican stated numerous reasons (1) On we appeal, proper- find the Board pursuing In particular, Wind VII. Mi- ly interpreted applied dAmerican following stated the reasons (2) supported substantial evidence underlie its expand decision to its wind (3) findings, Board’s section 476.43 is not (1) power generating capacity: the State’s applicable ratemaking proceeding, to this encouragement of the generation of renew- (4) applied section 476.53 as to a rate- (2) energy; able positive experiences with regulated public utility may compete (3) existing projects; own wind timing in the wholesale market does not and economics that are advantageous for Equal violate the Protection Clauses customers; (4) MidAmerican’s soft market Iowa or States United Constitutions conditions, which allow MidAmerican to Commerce Clause of the United States turbines; obtain reasonably priced *6 a Accordingly, Constitution. we affirm the projection that essentially Wind VII will
judgment affirming of the district court for pay twenty-year itself over its depreci- judgment of the Board. life, able mitigating need to increase (6) future; rates in the an increased likeli- Background I. Facts and Proceed- Congress hood that will legis- enact carbon ings. lation, making power wind more valuable 25, 2009, On March MidAmerican filed (7) customers; to MidAmerican’s and application an with the Board for advance diversity. desire to further increase fuel VII, ratemaking principles pro- for Wind On April petition NextEra filed a ject involving generation upof to 1001 objected stipulation intervene and to the megawatts energy. of wind MidAmerican rate-regulated utility agreement, arguing is a and the Board should subject to the not award advance regulatory authority pursuant ratemaking principles Board’s to MidAmerican chapter 476 of the Iowa Code. MidAmeri- for Wind VII.1 NextEra is obligated independent can is to serve all retail an wholesale energy producer electric territory electricity customers in its exclusive service that sells in the wholesale mar- power and excess in largest produc- sells the wholesale ket. It North America’s is and, subject regulations. market to the Board’s er in energy August of wind Prior to its application ratemaking sixty-five for owned wind facilities in the Unit- VII, Canada, principles for Wind MidAmerican ed States and including facilities sought and received in ratemaking principles independent Iowa. Because it is an ener- generation gy producer, chapter for six wind projects ranging apply 476 does not NextEra, megawatts. from 50 to 540 regulate the Board does not Renewables, Inc., however, sought judicial Iberdrola and Interstate neither review of the intervened; Light Company Power and also Board’s decision. Constitutions; NextEra, an and whether and NextEra does not have Iowa sec- rate-regulated tion to a applied retail customers. as obligation to serve utility may compete that in the wholesale is believes MidAmerican NextEra market, violates Commerce solely a vehicle to pursuing Wind VII States Clause the United Constitution. in presence increase MidAmerican’s energy market and that wholesale Interpretation the “Need” III. Re- ratemaking principles would awarding quirement of 476.53. Section competitive advantage give MidAmerican rate-regulated public utility When a files market. be- wholesale NextEra application an a wind energy to construct ratemaking principles lieves the award generating facility, Iowa Code section impose would on Mi- for Wind VII risks 476.53 the Board to requires specify ratepayers in- dAmerican’s that should ratemaking principles advance the that will by its Fur- stead be borne shareholders. apply of the facility when the costs are ther, would like to NextEra sell renewable included rates. regulated electric MidAmerican, through a energy to either 476.53(4)(a)(1). § Before the Code purchase agreement power by develop- may applicable ratemaking determine the a wind farm ing selling to MidAmeri- 476.53(4) requires principles, section can. rate-regulated Board to find that “[t]he granted ratemaking The Board advance public utility demonstrated has principles for Wind VII to MidAmerican. board public that the has considered timely petition judicial filed a NextEra long-term other electric supply sources for court review. The district affirmed the facility and that ... reasonable Ad- appeals. Board’s decision. compared when to other feasible alterna- background ditional facts proceedings supply.” tive sources they will out below as each be set relate to 476.53(4)(c)(2). 476.53(4) Section then issue. contemplates utility may satisfy *7 requirement “through competitive this II. Issues. bidding process, adopted rules under the presents following issues board, facility the which demonstrate the (1) the for review: whether Board incor- ... is a to reasonable alternative meet its the “need” rectly applied requirement of electric supply needs.” NextEra ar- (2) 476.53; section whether the Board gues incorrectly applied the Board this require compare to MidAmerican to failed “need” requirement. Wind VII with other feasible alternatives 476.53(4)(c (3) )(2); by section required Scope as A. Review. Iowa 17A.19(10) judicial whether the Board’s decision governs to ad- Code section ratemaking principles agency vance to NextEra review administrative decisions. (4) Div., evidence; supported by was substantial Auen v. Beverages Alcoholic 679 2004). (Iowa 586, determining whether the Board erred in N.W.2d To 589 decide apply section 476.43 did not to this issue interpret MidAmeri- we must section 476.53. application ratemaking can’s advance To applicable determine the standard of VII; principles interpretation for Wind whether sec- review of an agency’s of a 476.53, statute, to a applied rate-regulated tion determine whether we must the may compete in legislature clearly agency the wholesale vested the with market, violates the the equal protec- authority interpret to the statute at guarantees Dep’t tion or issue. United States Doe v. Iowa Human
37
(Iowa 2010).
Servs.,
858,
786
857
independent
legal
N.W.2d
definition that
is not
legislature clearly
agency
If the
vested the
uniquely within
subject
the
matter exper-
authority
interpret
specific
with the
to
agency,
tise of the
we generally conclude
statute,
terms of a
then we defer to the
agency
the
has not been vested with in-
agency’s interpretation of the statute and
sum,
terpretative authority.”
Id. In
may only
interpretation
if the
reverse
is order for us to
legislature
find the
clearly
“irrational,
illogical,
wholly unjustifia-
vested the
authority
Board with
to inter-
Id.;
ble.”
accord Renda v. Iowa Civil pret
we
(Iowa
Comm’n,
8,
Rights
10
must have a firm conviction from re-
17A.19(10)(£).
2010);
§
see also
Code
viewing the precise language of the
If, however,
legislature
the
clearly
did not
statute,
context,
purpose
the
the
agency
authority
vest the
with the
to inter-
statute,
practical
and the
considerations
statute,
the
then
pret
our review is for
involved, that the legislature actually in-
Doe,
correction of errors at
law.
786
(or
tended
would have intended had it
857;
N.W.2d at
see also Iowa Code
thought
question)
about the
delegate
to
17A.19(10)(c).
§
to
agency interpretive
power with
binding
force of law over the elabo-
determination,
making
When
this
provision
ration of the
in question.
carefully
specific language
we look
“at the
agency
interpreted
Doe,
(citation
has
as well as the
Certain have are hereinafter set forth. help to us determine whether the legisla authority The board shall have to issue ture clearly interpretative authority vested the subpoenas pay and to same fees and in the agency, two of which are relevant are mileage payable to witnesses in First, here. Id. statutory provi general jurisdic- “when the the courts of record of needful, being interpreted sion just substantive tion and shall establish all rules, term special expertise within the and reasonable not inconsistent law, ... agency, agency the been govern has vested with to the exercise of its duties, authority with the to interpret provi powers practice pro- the and the and Second, it, form, sions.” a term an govern Id. has cedure before and to the “[w]hen fore, ambiguous definition because of the reports, documents filing of contents and express reference to “govern” in of and the this papers provided and other 17A, Renda we conclude under chapter rules. In the in the board’s chapter or amendment, delegate establishment, assembly did not general alteration that the rules, with the interpretive power the board to the Board repeal any of such Accordingly, we will provisions binding force of law. subject shall be interpretation of sec- examine the Board’s chapter 17A. 476.53(4)(c)(2) for correction of errors tion However, general simply because 17A.19(10)(c). §Id. at law. general broad assembly granted the Board purposes chap- carry out powers Interpretation B. of Section rulemaking authori- granted and it ter 476 sup the “electric 476.53. NextEra claims necessarily legisla- indicate ty does not section language needs” ply authority the Board clearly ture vested 476.53(4)(c)(2) the Board to de requires chapter all of 476. interpret the electri ratepayers termine Iowa need rulemaking au- granting In proposed project gener will supply cal assembly the fol- thority, general used specifying an order ate before it can ... “The Board shall lowing language: After con ratemaking principles. advance needful, just all and reasonable establish an im ceding MidAmerican did not have ... the exercise of its govern rules wind mediate need for additional 476.2(1). §Id. While powers and duties.” interpreted the Board capacity, means, arbitrarily or “govern” “to exercise 476.53(4)(c)(2)’s requirement “need” to be sovereign rules continuous by established The alleged by than NextEra. broader over,” it also means “to rule authority requirement the “need” Board concluded sovereign power.” Webster’s without capacity, but that present includes Dictionary New International Third compliance needs based on it also includes (unabr. ed.2002). This second definition is and future environmental present with implementing or admin- synonymous regulations, diversity, supply fuel means “the istering. See id. “Exercise” consumers, to its expensive energy less profes- an official function or discharge of promotion develop of economic occupation.” Id. at 795. sional energy policy. The ment and Iowa’s definitions, can From these we draw two of these needs Board stated consideration general assem- possible conclusions. compliance MidAmerican’s demonstrated bly may have intended that the Board obligation plan pru statutory with its authority discharging sovereign exercise adequate reasonable and dently provide effecting pur- its official function of just retail customers at service to its However, chapter gen- poses reasonable rates. assembly may eral also have intended that provided in rele- In section 476.53 merely implement the Board or administer part: vant *9 476 without chapter the laws contained in Furthermore, general the as- 1. It is the intent of sovereign authority. the development the of general assembly expressly subjected sembly the to attract 17A, and transmis- power generating electric chapter Board to the Iowa Adminis- Act, the state in suffi- sion facilities within specifically trative Procedure which to ensure reliable electric oversight pow- quantity of cient provides “legislative provide consumers and to administrative service to Iowa delegated ers and duties 17A.1(3). to the state. § There- economic benefits agencies.” Iowa Code
39
general
assembly’s
bly’s
2. The
intent
intent. See State v. McCoy, 618
(Iowa 2000).
324,
elec-
regard
development
with
of
N.W.2d
325
“may
We
generating
extend,
tric
and transmission
power
enlarge
or
change
otherwise
facilities,
1,
in
provided
as
subsection
the meaning of a statute” under the guise
in a manner that is
implemented
shall be
Auen,
of construction.
(2011)). assembly The general added the original Where the law was subject to (1): following language intent to subsection doubt, very serious permitting subse- “It is also the intent the general of assem- quent amendments to control the former bly to encourage rate-regulated public util- meaning great uncertainty deal of in to altering existing ities consider electric the law legislature is removed. And the facilities, reasonable, generating where to probably in the position best to ascer- manage in intensity carbon emission order tain the most desirable construction. In to facilitate the transition to a carbon- just probable addition it is as that the constrained environment.” Id. legislature intended to clear up uncer- Further, tainties, the general assembly amended as it to change existing did law (2) by adding following subsection lan- changed where former law is guage: minor details. Thus it has been assert- general assembly’s
b. The intent ed that recognized “one well indication regard reliability of electric legislative clarify, intent rather consumers, provided service to Iowa as change, existing than law is doubt implemented by subsection shall be ambiguity surrounding a statute.” The considering diversity of the types of New York court has established the fol- fuel used to generate electricity, lowing test: “The force which be should availability reliability sup- fuel given subsequent, affecting prior plies, and the impact volatility legislation, depends largely cir- upon the fuel costs. place. cumstances under which it takes Id. The provi- bill also deleted outdated immediately If it follows and after con- regarding cogen- sions section 476.53 upon troversies the use of doubtful eration pilot program general that the as- phraseology therein have arisen as to sembly repealed in 2007 and amended the the true prior construction of the law it statute to apply significant alterations of great weight.... is entitled to If it takes existing generating facilities. The gen- Id. place after a considerable lapse of time assembly thought eral this bill was of such and the intervention of other sessions of importance that it amended bill take legislature, change a radical upon immediate effect enactment. phraseology would indicate an intention *10 supply
In to some interpreting provisions we not embraced attempt general to determine the assem- in the former statute.” Dist., guage requiring the consideration of “the v. Sch.
Orr Lewis Cent.
1980) (citation
(Iowa
diversity
types
of the
of fuel used to
internal
and
n
omitted).
electricity,
availability
the
generate
and
marks
quotation
reliability
supplies,
impact
of fuel
and the
the
principles,
these
we find
Applying
volatility
of the
of fuel costs.” See id.
intend the
general assembly did
476.53(2)© (2011). Moreover,
§
while
of section 476.53 to
requirement
“need”
(1)
previous
of the
version in-
subsection
present capacity, but rather
include
legislative
encourage
dicated
intent to
the
it
general assembly
the
also intended
to
development
generating
of electric
facili-
on other
include needs based
consider-
to
reliable service to con-
provide
ties
diversity,
supply
ations such as fuel
the
sumers,
general assembly
amended
consumers,
expensive energy and
less
(1) by simply adding language
subsection
future environmental
compliance
reg-
with
indicating
encourage
its intent to
utilities
energy.
clean
We reach
requiring
ulations
facilities,
adapt
their
for a carbon-con-
this conclusion for a number of reasons.
Compare
strained
environment.
id.
First,
amendments,
prior to the 2010
n §
476.53(1)
476.53(1)
(2009),
§
with id.
general
statute
it was the
assem-
stated
(2011). The amendment to the statute to
bly’s
compatible
intent that the
be
statute
permit
application
significant
alter-
policies
of the
with
environmental
existing
ations of
facilities furthers this
state,
Code,
expressed
Title XI of the
Therefore,
general
intent.
assem-
part.
section 476.53 is a
See Iowa
which
bly’s
intent
lan-
inclusion
additional
476.53(2) (2009).
§
XI
Code
Title
deals
statute,
guage
making
without
issues,
myriad
with a
of environmental
in-
than
changes
deleting
other
outdated
initiatives,
cluding
independence
provisions, leads us to
conclude
addi-
greenhouse gas
such as
that reduce
those
language
origi-
tional intent
clarified the
See,
sequestration.
and carbon
emissions
adding
nal intent rather
than
a new in-
469.9(4)(6)(3).
e.g.,
Compliance
id.
tent.
regulations, present
environmental
or fu-
Finally,
general
at the time the
assem-
ture, requiring
energy, diversifying
clean
bly
language,
added the intent
the issue of
sources,
accounting
impact
fuel
and
for the
whether the Board could consider these
volatility
prices
of fuel
are the types
being litigated in the
factors was
courts.
of issues that would be consistent with
timing
of the amendment confirms
They
Title XI.
are also consistent with a
general assembly
trying
was
legislative
plan pru-
intent
that utilities
Barnett,
clarify the law in
area.
this
See
dently
provide
adequate
reasonable and
reasons. In subsection (c)(2). assembly left intact the language indicat- 476.53(4)(e)(2) ing its intent that section 476.53 be com- requires Section patible rate-regulated with Title XI and added the lan- the Board to find that “the *11 (Iowa 2009). public utility has demonstrated to the is the past “Considered” “consider,” board that has considered other [it] tense of which means “to re- long-term supply” sources for electric and flect on: think degree about with a proposed facility “is reasonable caution.” Webster’s Third New Interna- compared when to other alterna- Dictionary tional 483. “Other” is defined feasible supply.” tive sources Iowa Code “being the ones distinct from the one or 476.5S(4)(c)(2) (2009) added). § (emphasis understood,” i.e., those first or mentioned an alternative. “Compared” Scope A. of Review. The resolution ’ past is the tense of “compare,” which of this issue also involves the in- Board’s means “to examine the quali- character or 476.53(4)(c)(2). terpretation of section Ac- (as ties of two or more ... things) esp. for cordingly, we will review the inter- Board’s purpose of discovering resemblances pretation of “other alternative feasible or differences.” Id. at 462. “Feasible” )(2) 476.53(4)(c supply” sources of under “capable being means ... utilized ... for correction of at law pursuant errors to successfully.” Id. at 831. Finally, “alter- 17A.19(10)(e). plural “alternative,” natives” is the form of Analysis. B. NextEra sets forth two which “offering means a choice of or two reasons for its contention the Board failed more things wherein if one thing is chosen require MidAmerican to compare Wind rejected.” the other is Id. at 63. VII with “other feasible alternatives.” First, it argues Taking that “other feasible alter- together these definitions with 476.53(4)(c necessarily requires comparison natives” language )(2), of section we to other generating using facilities requires conclude this section utility a source, power same which in this case is do no more than proposed demonstrate its Second, argues wind. it im- facility is reasonable in light of the fact the properly permitted MidAmerican to at- utility cautiously thought about the charac- tempt a perform postapplication com- qualities ter or of alternative sources for parison with a wind alternative during the long-term electric supply it could success- proceeding, Wind VII instead of a preap- fully utilize. The statute require does not plication comparison. argues It MidAmer- facility compare only to engage ican did not in commercial negotia- generation alternatives of the same source. tions, but compared instead Wind VII addition, In the intent of this Code sec- sample purchase power agree- to, power tion refers “electric generating through discovery. ment obtained Next- and transmission facilities.” Iowa Code argues Era misapplication Board’s 476.53(1). Therefore, this section of the comparison requirement opens the solely Code is not limited to wind door for utilities to competition, avoid energy. other sources of Fi- renewable which denies their customers the benefits nally, primary goals of section 476.53 that competition brings in contravention of are to reliable “ensure electric service to public policy. provide Iowa consumers and economic
When the general assembly fails benefits state.” Id. There are provide statutory long-term supply definition or a word sources of electric be- does not have an established meaning goals. sides wind that meet these In addi- law, sources, we give ordinary the words their generation and tion to conventional fuels, common meaning by considering the con recognizes such as fossil Iowa law text in which the general assembly generation used renewable other than sources Stone, wind, solar, biomass, them. including hydro- State v. *12 42 476.42(l)(a.), Scope must § A. of Review. We id. energies. See
electric “reverse, modify, appropri other energy production “alternate (defining that is “not agency ate relief from action” facility”). hydro and “small facility” in the supported by substantial evidence analysis, general as- on this Based a record ... when that record is viewed as feasible alter- sembly did not intend “other 17A.19(10)CO. § The Iowa whole.” Id. of the only include alternatives natives” to Procedure Act defines Administrative achieve the generation type. To same “substantial evidence” as follows: considering and general assembly’s goals of evidence quantity quality and [T]he statute, only plain language by a that would be deemed sufficient 476.53(4)(c)(2) reading of section practical neutral, detached, per- and reasonable alterna- comparison that it permits is son, the fact at when to establish issue types. There- generation tives of different consequences resulting from the es- fore, allowing not err in the Board did tablishment of that fact are understood to al- compare MidAmerican to Wind VII great importance. to be serious energy. other than wind ternatives reviewing § a (10)(f)(l). When 17A.19 evidence, we finding of fact for substantial second contention is NextEra’s adjudicate finding light “in of all the per to permitted the Board MidAmerican relevant evidence in the record cited with a postapplication comparison form a finding that any party that detracts from during pro wind alternative the Wind VII supports ... it.” Id. 17A.19 [or] ceeding requires the statute MidAm- )(3). (10)(f agency’s “The decision does perform comparison prior erican to this merely lack substantial evidence because submitting application ratemaking its is interpretation open of the evidence However, plain language principles. opinion.” a fair difference of ABC Dis- 476.58(4)(c)(2) not require does Res., Sys., Inc. v. Natural posal Dep’t of performed it utility to demonstrate has (Iowa 2004). 603 filing application. its comparison prior Requirement. B. The “Need” Similarly, require the section does not a determining In whether MidAmerican sat facility with compare proposed its requirement isfied the “need” of section other facilities. The re proposed 476.53(4)(c)(2), 476.53(4)(c)(2) the Board could consider quirement under section compliance reg with future environmental utility compares proposed that the facil requiring energy, ulations clean fuel diver ity prior to other feasible sources supply sity, en supply expensive and the less receiving ratemaking principles. ergy to The record reveals consumers. inter- Accordingly, properly the Board MidAmerican demonstrated Wind VII preted the other feasible alternatives lan- deficiency capacity would defer a from 476.53(4)(c)(2). guage contained in section Furthermore, 2019 to 2020. because VII, the benefits of Wind MidAmerican is Substantial Evidence V. Claims. deficiency of a project capacity able to megawatts mere The next we issue must consider is Further, supported whether substantial evidence record contains substantial findings satisfy the Board’s that MidAmerican evidence would a need Wind VII emissions, met requirement supply the “need” and consid- for an electric with lower especially light potential ered other feasible alternatives of section future car- 476.53(4)(c)(2). sup- electric legislation; bon a need for an Thus, produces energy; principles. low-cost need ply substantial evidence *13 that enhances fuel supply supports for an electric finding Board’s that MidAm- a need for MidAmerican to diversity; complied erican with the requirements of prices maintain reasonable for its custom- 476.53(4)(c)(2) section by demonstrating ers; promote develop- a need to economic “to the board public utility has Iowa; promote ment in and a need to considered long-term other sources for energy. use of renewable electric and that supply facility ... reasonable when compared to other feasi- Therefore, supports substantial evidence ble alternative sources of supply.” finding require- the Board’s of the “need” 476.53(4)(c)(2). ment under section Applicability VI. of Iowa Code Sec- C. Other Feasible Alternatives. tion 476.43.
The record demonstrates MidAmerican compared generation generally wind to We must next determine whether the generation conventional and renewable al Board in determining erred section 476.43 prior submitting applica ternatives its did apply to MidAmerican’s application and, decision, prior tion to the Board’s ratemaking principles. advance Sec- compared MidAmerican Wind VII with tion requires, 476.43 under certain condi- purchase power agreement. NextEra’s tions, that electric utilities not discriminate application MidAmerican’s for advance against energy alternate producers. ratemaking generally compares principles Scope A. of Review. The resolution power wind energy to renewable alterna of this issue involves the Board’s interpre- tives, including energy, hydroelec biomass tation of sections 476.43 and 476.44. Ac- energy, energy, geothermal tric solar and cordingly, interpretation we will review the availability, based on economic of sections 476.43 and 476.44 for correction practicality, maturity. and It also com of errors pursuant law to section pares power to coal- gas-fired wind 17A.19(10)(c). power cost, plants terms of cost robust ness, reasonableness, sys environmental Analysis. B. argues reliability, tem economic value to the local require Board failed to MidAmerican to area, political uncertainty, flexibility, and comply with Iowa Code section 476.43. diversity. Section 476.43 provides, part: relevant testimony manag- of MidAmerican’s kld.jk, Subject to section er of market assessment further details board shall require electric utilities to do comparison MidAmerican’s of Wind VII to following both of the under terms and generation conventional and renewable al- just conditions that the finds are board ternatives. The record contains evidence economically reasonable for as to six-stage MidAmerican’s resource customers, electric utilities’ are nondis- planning process, analytical the different criminatory to energy produc- alternate during process, models used and other hydro ers and producers, small and will criteria MidAmerican uses to further eval- further policy stated uate the generation attractiveness of other 476.41: sources. following: a. At least one of the
Accordingly, the record supports find- (1) ing compared energy production that MidAmerican Own alternate pro- posed facility hydro supply to other feasible facilities or small facilities located prior receiving ratemaking sources in this state. Equal contracts to VII. Protection Claim. long-term Enter into electricity from alter-
purchase or wheel whether We must next determine facilities or small energy production nate the Board’s decision to MidAmerican utility’s in the hydro facilities located ratemaking principles advance for Wind area. service Equal Protection VII violates Clauses of the United States or Iowa Constitutions. availability sup- Provide for the b. alternate plemental backup power Scope A. Review. We *14 hy- energy production facilities or small if the agency can relief from action nondiscriminatory on a ba- dro facilities “[ujnconstitutional on its face or action is just at and reasonable rates. sis and upon provision or is a of applied as based law on its face or that is unconstitutional added). § (emphasis Iowa 476.43 Code 17A.19(10)(a). applied.” § as Id. We do The found section 476.43 did not Board any give agency deference to excep- because of an apply to this situation respect constitutionality of a statute partic- in 476.44. In tion contained entirely or rule because it is administrative ular, following on the the Board relied judiciary within the of the province de exception: constitutionality legislation termine the utility subject An electric a. by government. enacted other branches of division, utility a that except this elects 605; Sys., at Disposal ABC 681 N.W.2d regulation pursuant 17A.19(ll)(h). rate to section § see also Iowa Code Ac 476.1A, required not be to own or shall cordingly, we review constitutional issues time, purchase, any one more than its agency proceedings de novo. Swanson megawatts hundred of v. share one Civil Commitment Unit Sex five Offend (Iowa 2007). ers, 300, energy produc- from alternative 737 N.W.2d 306 power hydro facilities at tion small facilities Analysis. B. contends the to section pursuant rates established application Board’s of section 476.43. a market applied to subsidize wholesale endeavor, Equal violates the Protection 476.44(2)(a) added). (emphasis Clause of the Fourteenth Amendment of language The of sections 476.43 and the United States Constitution and the clearly unambiguously provide 476.44 equal protection provision in article found purchases, that a that owns or “at I, By section 6 of the Iowa Constitution. time, any one more than its share of one terms, only applies its section 476.53 megawatts power hundred five from rate-regulated utilities. MidAmerican is energy production alternative facilities” is rate-regulated public utility obligated to exempt requirements from the of section serve all retail electric customers its 476.43. The record establishes even territory. an exclusive service NextEra is VII, without Wind MidAmerican owns independent energy producer. wholesale 1,284.3 megawatts wind-powered gener- Therefore, ineligible NextEra is for rate- purchases mega- ation and another 109.1 making principles treatment under section power. Accordingly, watts of wind rate-regulated 476.53 because it is not a correctly found that MidAmerican is public utility. proper determination is exempt requirements urged by from the of section broader than that NextEra. The already 476.43 because it whether the applica- meets statu- issue is not Board’s torily minimum required mega- of 105 tion of section 476.53 to MidAmerican in unconstitutional, rather, watts. this case was but See, any application whether of section 476.53 party. e.g., id. at 6. Even in rate-regulated utility may engage to a cases where party suggested has not competition in the wholesale that our approach under the Iowa Consti- market is unconstitutional because it vio- tution should be different from that under guarantees equal lates the constitutional Constitution, the Federal we reserve the protection. right apply in a standard fashion at variance with federal cases under the Iowa The Equal Protection Clause of See, Pals, e.g., Constitution. State v. the Fourteenth Amendment of the United (Iowa 767, 2011); 771-72 Varnum provides States Constitution that “[n]o Brien, (Iowa v. 763 N.W.2d 896 n. 23 deny any person State shall ... within 2009); RACI, 6; 675 N.W.2d at State v. jurisdiction equal protection Cline, (Iowa 2000), Const, XIV, § laws.” U.S. amend. 1. The part overruled in on grounds by other counterpart Constitution’s to the fed *15 Turner, 601, State v. 630 2 N.W.2d 606 n. provides eral clause that of a laws “[a]ll (Iowa 2001); Bierkamp v. Rogers, 293 general nature shall have a uniform opera (Iowa 1980). 577, case, N.W.2d 579 In this tion; general assembly shall not NextEra urged has not that we apply citizen, citizens, any privi or class of equal protection principles the Iowa under immunities, which, leges upon the same depart Constitution that from established equally belong terms shall not to all citi Therefore, federal principles. proceed Const, we I, § Corpora zens.” art. 6. to consider this case under the established persons purposes equal tions are for the equal protection federal principles, recog- protection. Ry. See & v. Chi N.W. Fach however, nizing, that may apply we them man, 989, 995, 210, 255 Iowa 125 N.W.2d differently under Iowa Constitution. (1963); Chi, Q. 213 McGuire v. B. & R. Co., 350, 340, 902, 131 Iowa 108 N.W. 905 Essentially, Equal Pro “[t]he (1906); Wheeling Corp. see also Steel v. tection requires similarly-situ Clause Glander, 562, 571-72, 337 U.S. 69 S.Ct. persons ated be treated alike.” Bowers v. 1291, 1296, 1544, 93 L.Ed. 1551 Polk Cnty. Supervisors, Bd. 638 N.W.2d that, (finding where a state has chosen (Iowa 2002). 682, Therefore, 689 there is a foreign corporations, domesticate threshold determination in all equal pro adopted corporations equal are entitled to challenges persons tection as to whether protection corporate with the state’s own “ similarly are people situated. ‘If are not progeny). situated, similarly their treat dissimilar ” party When a an raises issue equal protection.’ ment does not violate involving parallel provisions of the State Morrow, (quoting Id. In re 616 N.W.2d Constitutions, and Federal a number of (Iowa 544, 2000)). 547 First, principles emerge from our cases. jealously we right develop persons reserve the Once it is are determined situated, independent an framework under similarly apply the Iowa we one of three Racing Constitution. Ass’n of scrutiny depending Cent. Iowa different levels on (RACI), 1, Fitzgerald v. 675 type legislative N.W.2d 5 the classification under (Iowa 2004). Second, party Corp., when a attack. v. does Sherman Pella 576 (Iowa 1998). 312, urge that we adopt apply standard under N.W.2d 317 We scrutiny Iowa Constitution from that strict on different “classifications based Constitution, race, under the Federal gener alienage, origin we or national and those Varnum, ally proceed under the proposed affecting rights.” standard fundamental Mann, 602 apply (quoting at intermedi- State v. 880. We (Iowa 1999)). Furthermore, based on scrutiny “[a] to classifications ate or sexual orientation. gender, illegitimacy, deny equal protec- classification ‘does not Finally, apply we a ration- practice Id. it results in simply tion because classifications. analysis al to all other problems basis inequality; practical some Id. at 879. accommoda- government permit rough ....’” tions parties disagree as to
Although the
NextEra are
MidAmerican and
whether
The threshold determination is
situated,
they correctly agree
similarly
whether MidAmerican and NextEra are
classification at issue is
legislative
that the
similarly
argues they
situated.
than rational
requiring any more
not one
similarly
respect
are
situated with
Therefore,
scrutiny.
apply
we will
basis
to a wholesale
application of section 476.53
analysis.
rational basis
assume,
will
without
market venture. We
deciding, that NextEra and MidAmerican
The rational basis test
is a
similarly
are
situated because NextEra
“very
standard.”
Id. Under
deferential
there is not a
prove
has failed to
scrutiny,
plaintiff
this lowest level of
“[t]he
section 476.53 and a
rational basis between
heavy
showing
burden of
the stat
has the
interest.
legitimate state
every
negate
ute unconstitutional and must
which the classifica
upon
reasonable basis
*16
The Board found that even if NextEra
may
Bierkamp,
tion
be sustained.”
298
situated,
similarly
and MidAmerican were
A
satisfies the
N.W.2d at 579-80.
statute
NextEra did not meet its burden of show-
protection
long
as
requirements
equal
ing
by
that the statute is unconstitutional
as
negating every
upon
reasonable basis
plausible policy reason for
“there is a
may
which the classification
be sustained.
classification,
legislative
facts on The Board found:
apparently
which the
classification
Assembly
that
the General
determined
rationally may have been consid-
based
for the differ-
there were valid reasons
by
governmental
be true
ered to
treatment, including
ent
the General As-
decisionmaker,
relationship
rate-
sembly’s conclusion that traditional
goal
the classification to its
is not so
making provided inadequate incentives
attenuated as to render the distinction
rate-regulated
for
utilities to build new
arbitrary or irrational.”
generation.
Ratemaking
principles
Varnum,
(quoting
at 879
rate-regulated
were
to
utilities
limited
7).
RACI,
at We have stated
only companies
because those are the
succinctly
requiring
this test
as
that
more
subject
jurisdiction
to the Board’s rate
“ ‘classifications drawn in a statute are rea-
only
that
companies
and therefore the
” RACI,
light
purpose.’
sonable in
of its
reasonably
by
could be
influenced
McLaughlin v.
(quoting
NextEra’s contentions are a violation of the equal protection clause of primary purpose public of a electric the Iowa Constitution applying the fed- electricity is to furnish to the pub- framework), analytical eral Fitzgerald *17 lic. legislative intent of section Iowa, Racing v. Ass’n Cent. 539 U.S. public 476.53 is clear that utilities are to of 103, 110, 2156, 2161, 123 S.Ct. 156 L.Ed.2d efficient, electricity furnish in an reliable 97, (finding 105 no violation of §§ manner. Iowa Code 476.53. Equal Protection Clause of the Federal implies public utility This a should strive applying Constitution when decrease the cost at which it the traditional supplies framework), electricity analytical to consumers federal while at the same ensuring time reliable service. To further has failed to demonstrate a lack of factual goal, this rate-regu- 476.53 allows for the legitimate purposes. basis asserted lated utilities to receive advance Thus, ratemak- the granting ratemaking of advance ing principles. The record establishes principles to MidAmerican does not violate selling energy in the wholesale market al- guarantee equal protection of under lows MidAmerican to reduce rates at the State or Federal even if Constitution it which its retail purchase customers ener- compete seeks to in the wholesale Furthermore, gy. Wind VII allows Mi- market.
dAmerican to meet the needs of its retail customers, which maintaining include a di- VIII. Commerce Clause Claim. verse fuel supply acting compliance Next, we must decide if the Commerce regulations. environmental These considerations aid in keeping price of Clause the United States Constitution electricity prohibits granting low for MidAmerican’s retail the Board from MidAm- customers. application. erican’s
48 clearly exceeds the review interstate commerce Scope Review. We
A.
local benefits.”
agency pro
issues raised
constitutional
Clause
ceedings regarding
Commerce
Distillers
Brown-Forman
(quoting
Dep’t
v. Iowa
Corp.
Auth.,
de novo. KFC
476
Corp.
Liquor
v. N.Y. State
U.S.
(Iowa
308,
2010),
Revenue,
2080, 2084,
792 N.W.2d
573, 579, 106 S.Ct.
90 L.Ed.2d
— U.S.-,-,
denied,
(1986) (citations omitted)).
49 completely within Iowa or outside Iowa does not have the effect favoring Iowa rate-regulated economic because NextEra is not interests over non-Iowa econom- Similarly, utility. the Board’s deci- ic interests. sion does not affect the sale of NextEra’s However, possible because it is that en- products they based on whether are sold in ergy produced by Wind up VII will end Iowa. market, the wholesale it possible striking
NextEra contends there are the Board’s decision to ratemaking principles pursuant similarities between Board’s decision to section 476.53 will Miller, and Alliance v. 44 indirectly Clean Coal affect interstate commerce. As for (7th Cir.1995). out, 591 NextEra’s reli- correctly points F.3d NextEra this burden ance on Alliance is mis- potential presence Clean Coal would be the of state- for Coal, placed. In Alliance electricity Clean coal subsidized in the wholesale mar- for suppliers from western states sued the ket. It competition would be in direct Illinois Commerce Commission and chal- electricity, non-state-subsidized produced lenged encouraged an Illinois statute that by companies like NextEra. NextEra is Illinois electric utilities to continue to burn also correct that advance ratemaking prin- despite coal mined in the availabili- ciples Illinois allow MidAmerican to shift risk to cleaner, ty of out-of-state coal. 44 at by F.3d its retail customers guaranteeing re- 593-94. The Act encouraged equity Illinois Coal turns on even if the demand for the use of coal allowing electricity Illinois Illinois and the price attached fail to pass along utilities to costs of projections. added meet MidAmerican’s ratepayers. such coal to Illinois Id. This We find the burden on the wholesale effectively made out-of-state coal a more market, any, if be would minimal. Once expensive option for Illinois utilities. The completed, Wind VII will be able to pro- Seventh of Appeals Circuit Court conclud- up duce megawatts electricity. ed the statute violated the Commerce MidAmerican’s director of environmental Clause it had “the because same effect as programs, compliance, permitting ” duty’ placed ‘tariff or customs out-of- on 130,000 testified “there are over state coal that would burden the flow of megawatts of generation capacity electric commerce across state lines. currently footprint the market of the (quoting Lynn Creamery, W. Inc. v. Mea Independent Sys- MidWest Transmission 186, 194, 2205, 2212, ly, 512 U.S. S.Ct. (MISO).” Operator, tem Inc. MISO is 157, 167(1994)). 129 L.Ed.2d market in which MidAmerican ignores key be- competes. testimony difference revealed there 165,000 tween the statute at issue in Alliance are an megawatts additional generating Clean Coal and section 476.53. The Illi- capacity footprint Interconnection, effectively L.L.C., nois statute discriminated PJM Inc. which *19 against producers by creating out-of-state operates as a common market with a tariff on testimony out-of-state coal. This tariff MISO. The further revealed “ ‘neutralizing had the effect of growth requirements the advan- MISO’s annual far tage possessed by lower cost exceeded out-of-state the size of Wind VII. This ” VII, most, producers.’ Id. Section not a 476.53 is means Wind would account tariff, nor would it treat NextEra or percent for 0.76 of MISO. If'we add the PJM, products differently 165,000-megawatt capacity based on whether of the wholly only was located or out- inside then Wind VII accounts for 0.34 Therefore, Therefore, side of Iowa. percent section 476.53 of the market. it n MANSFIELD, (concurring spe- Justice might VII have any seems burden Wind cially). interstate markets would large on these slight. be only. pro- I in the result This concur VII, of Wind on the The local benefits by an MidAmerican ceeding involves effort hand, considerable. As the other would be Energy ratepayers to have Iowa’s shoulder out, “Wind VII pointed district court energy project the costs of a new wind retail cus- provide would MidAmeriean’s though MidAmerican does not fore- even clean, power renewable tomers with a capacity cast a need for additional until costs, inherent fuel and source with no majority 2019. The comments at several from insulate its retail customers help desirability of the points project. on' the costs.” It is also rea- spikes fossil fuel Generally speaking, qualified I feel less to re- believe that MidAmerican’s sonable to reach these conclusions but more confident electricity pro- tail customers will use the authority about the Iowa Utilities Board’s because the wind farm duced Wind VII project. approve
will located in Iowa. be Therefore, 476.58 does not di- section I. Deference to the Iowa Utilities in- rectly against or discriminate regulate Board. commerce, terstate and it does not have question first before us is the defer- favoring in-state the effect of economic give we are to the Board’s required ence economic inter- interests over out-of-state interpretations of section 476.53 of the though may indirectly Even it affect ests. majority’s Iowa I believe the refusal Code. commerce, any burden section interstate contrary deference is flawed and commerce places 476.53 on interstate does precedent. not exceed the local benefits. Historically, we have deferred to the Disposition. IX. interpretation Iowa Board’s Utilities judgment affirm the of the district We complex and technical laws that it adminis- judgment of the affirming so, court Board doing upon In we relied ters. have (1) appeal because in this we find grants authori- legislature’s rulemaking properly interpreted applied See, ty e.g., Board. Code (2) 476.103(1) (2009). Thus, evidence 476.2(1), §§ substantial (3) supported findings, Board, the Board’s section City Coralville v. Iowa Utilities applicable ratemaking 476.43 is not to this clearly we said that the Board “has been ap- proceeding, and section 476.53 as authority interpret vested with plied rate-regulated public utility to a provision ‘rates and services’ of section may compete in the wholesale mar- 1, may we overturn its therefore Equal ket not violate the Protection ‘irrational, does illogi- if it is interpretation ” cal, of the Iowa or States Clauses United Con- wholly unjustifiable.’ 750 N.W.2d (Iowa 2008) stitutions or the Commerce Clause of the (quoting Iowa Code States 17A.19(10)(()); United Constitution. Sys., see also Evercom Bd., Inc. v. Iowa Utils. AFFIRMED. (Iowa 2011) (stating 762-63 that the justices provision All of a except interpretation concur board’s *20 MANSFIELD, J., specially, chapter only who concurs 476 should be reversed if it is ZAGER, JJ„ “irrational, unjustifia- illogical, wholly and WATERMAN and who or ble”); part. take no Advocate v. Consumer Office of
51
Bd.,
640,
744 N.W.2d
643-44 While this command from legislature
Utils.
2008)
(Iowa
(same);
explicit grant
AT&T Commc’ns
is not an
authority
of the
of
Midwest,
Bd.,
interpret
Inc. v. Iowa Utils.
687
the term “unauthorized
(Iowa 2004) (same);
554,
change
service,”
561
N.W.2d
telecommunications
Of-
Renda,
13,
Advocate v. Iowa Utils.
see
Consumer
784 N.W.2d at
we have
fice of
(Iowa 2003) (stat-
Bd,
873,
663 N.W.2d
876
held that the rule making requirement
of the
ing
interpretation
appli-
“the board’s
contained in section 476.103 “evidences a
‘appropriate
legislative
cable statutes is entitled to
clear
intent
to vest
in the
” (citation omitted)).
interpretation
deference’
Board the
of the unautho-
rized-change-in-service provisions in sec-
True, we held in Renda v. Iowa Civil
tion 476.103.”
Consumer Ad-
Office of
Rights
grant
Commission that a
of rule-
vocate,
lieve that III. supports substantial evidence Protection. factual finding Board’s that “MidAmer- The equal protection issues here are ican has established the need for the facili- quite simple. ty and its benefits to retail customers.” (Mi- permits Iowa law a regulated utility I agree do not with the Board or the dAmerican) to build a facility wind however, majority, “promoting] that eco- include the costs of that facility in its rate nomic development” can be here as a cited though unregulated base even an justification granting for the order ad- (NextEra) erecting facility the same would ratemaking principles vance VII. Wind have privilege. the same See id. my colleagues The Board and do not ex- § appears 476.53. Yet NextEra to concede plain promotes how Wind VII economic equal it would not be an protection development by other than the fact that violation if MidAmerican used Wind VII making MidAmerican will be a capital ex- only supply its local retail customers. standard, penditure. By virtually this any Rather, urges it violates (with capital expenditure by utility made a equal protection if MidAmerican can also borne utility’s costs retail cus- compete in the wholesale market with tomers) would require- meet “need” sense, NextEra. In that NextEra is com- 476.53(3)(c)(2). Notably, ment of section i.e., plaining equal about treatment — neither MidAmerican itself nor the Office may fact that both entities sell wholesale of Consumer Advocate cites the economic power unequal than treatment. —rather development justification in briefing. Notably briefing absent from NextEra’s any indication that it wishes to become a Turning to the feasible alternatives is- regulated utility in Iowa. sue, majority appears to conclude that event, imposes any 476.53 re- In MidAmerican procedural has obli- is, quirement only. gations That MidAmerican that NextEra not have. Mi- does perform comparison has dAmerican must serve customers within sources, regardless area, other what subject its service and its rates are 476.3, 476.20, comparison may §§ I disagree. regulation. show. See id. agree majority statutorily required I with the and the Board that MidAmerican has met the apply megawatts. section 476.43 does not here because minimum of 105 *23 Clause. Commerce has also indicated IV. The 476.22-.26. from Wind sales revenue wholesale discus- majority’s The Commerce Clause sharing in revenue included will be
VII and, part, in complicated unduly is sion ratemaking purposes for calculations States do follow the United incorrect. We thereafter, 2018, the Board and through approach two-tiered Supreme Court’s of how the question has reserved cases: Clause Commerce will be treated sales revenue wholesale directly regu- statute When a state Thus, though even ratemaking purposes. against interstate lates or discriminates in the wholesale may compete both entities commerce, is to favor when its effect rationally market, could still legislature interests over out-of- economic in-state being regu- a benefits of that the conclude interests, struck generally we have state by the draw- compensated utility lated are inqui- without further down the statute Functionally, the constitutional backs. When, however, a has ry. statute in to what it was here is similar question interstate commerce indirect on effects case, argu- In that City Coralville. evenhandedly, we have ex- regulates resi- Coralville ment was made that some interest whether the State’s amined of Mi- receive the benefits dents would burden on and whether the legitimate undergrounding power dAmerican’s clearly exceeds the commerce interstate because bearing the costs lines without local benefits. ser- they not within MidAmerican’s were Iowa State Auto. Dealers Ass’n v. Iow a Coralville, City 750 N.W.2d
vice area.
(Iowa
Bd.,
460, 462
Appeal
equal
be an
alleged
was
at 530. That
1988)
Brown-Forman Distillers
(quoting
much diffi-
protection violation. Without
Auth., 476 U.S.
Corp.
Liquor
v. N.Y. State
it was not. See id.
culty, we concluded
2084,
573, 579,
L.Ed.2d
106 S.Ct.
arguably
an
presents
This case
530-81.
(1986)).
552, 559
wholesale custom-
situation
similar
the first threshold
passes
Section 476.53
may receive the benefits
ers of
VII
Wind
against
it
not discriminate
because
does
having to bear its
of the
without
project
interests. MidAmerican
out-of-state
rate base.
capital costs in their
differently not be-
NextEra are treated
company and the
cause one is an in-state
granting
My colleagues conclude that
(indeed, MidAmerican’s ulti-
other is not
for Wind
ratemaking principles
advance
Omaha), but be-
parent
mate
is based
of elec-
keeping
price
VII will “aid
regulated
and the
cause one is a
retail cus-
tricity
for MidAmerican’s
low
far,
agree
I
other is not. So
necessary or
I do not think it is
tomers.”
majority.
us to
this conclusion.
appropriate for
draw
economist,
on fi-
expert
I
an
an
am not
However,
majority misap-
I believe
nance,
But I am
regulator
or a
of utilities.
analysis,
which
plies the second tier
basis exists for
confident that a rational
unduly burdens
the statute
asks whether
that Mi-
legislature’s
determination
majority
con-
commerce.
interstate
receive advance ratemak-
dAmerican can
sales
interstate
cludes that MidAmerican’s
though
even
project
for this
ing principles
by
would be
power generated
Wind VII
on the
power
will be sold
commerce but
some of
“burden” on interstate
a
State,
one,
by the
King
outweighed
v.
818 only
“slight”
market. See
wholesale
2012)
(Iowa
consumers
to local
hesitate to that Wind VII will be
boon for Iowans served MidAmerican. ques-
But I think we need not reach that majority’s premise
tion because the is mis- How are sales in inter-
taken. increased
state commerce “burden” on interstate at all?
commerce
V. Conclusion. reasons, foregoing
For the I concur in only.
the result Miller, General, Thomas J. Attorney Iowa, Plaintiff-Appellant, STATE of Hall, Attorney Sharon K. Assistant Gener- v. al, Petig, County Rebecca L. Attorney, for appellant. THOMPSON, John Paul
Defendant-Appellee. Rehkemper Gourley, Robert G. Reh- Lindholm, P.L.C., kemper Moines, & Des
No. 11-0860. appellee. Appeals Court of of Iowa. VOGEL, P.J., Heard
April 2012. DOYLE, POTTERFIELD and JJ. VOGEL, P.J.
The discretionary State seeks review of ruling granting Thompson’s Mark motion suppress evidence of chemical test re- Although sults for intoxication. the cali- preliminary bration record for the breath (PBT) expla- test device did not contain an nation of type the “value and of standard used,” screening the PBT’s use as a device was in compliance ap- substantial with the plicable statutes and administrative rules. such, As subsequent the evidence from the test, showing Thompson’s DataMaster1 machine, Thompson performed test administered to on actual was a "DataMaster”