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Northern Laramie Range Alliance v. Federal Energy Regulatory Commission

United States Court of Appeals, Tenth Circuit

October 22, 2013

NORTHERN LARAMIE RANGE ALLIANCE, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.

Page 1031

Kenneth G. Lay, Glenrock, Wyoming (Alyson Meyer Gould, Holsinger Law, Denver, CO, with him on the briefs) for Petitioner.

Karin L. Larson, Solicitor, Federal Energy Regulatory Commission, Office of General Counsel, Washington, D.C. (David L. Morenoff, Solicitor, Federal Energy Regulatory Commission, Office of General Counsel, Washington, D.C.; and Robert Harris Solomon, Solicitor, Federal Energy Regulatory Commission, Office of General Counsel, Washington, D.C., with her on the briefs) for Respondent.

Before BRISCOE, Chief Circuit Judge, SEYMOUR, and BACHARACH, Circuit Judges.

Page 1032

BACHARACH, Circuit Judge.

This action grew out of efforts by Wasatch Wind Intermountain, LLC to establish two wind energy projects. Wasatch was able to sell the wind energy by certifying both projects as qualifying facilities. These efforts drew the ire of the Northern Laramie Range Alliance, which objected to Wasatch's certification. The Federal Energy Regulatory Commission (FERC) rejected the objections, and the Alliance appeals FERC's decision.

We can entertain the appeal only if the Alliance has established standing, which requires traceability and redressability. For both, the Alliance relies on increases in electricity rates. But the wind projects have not been completed, Wasatch has not found a buyer for the anticipated wind power, and we do not know whether sales of wind energy would increase or decrease a utility's costs. Even beyond these uncertainties, electricity rates depend on the actions of third parties, those of the utility and the state regulatory commission. With the multitude of uncertainties surrounding the effect of Wasatch's certification or decertification on electricity rates, we conclude that the Alliance has not shown either traceability or redressability. We therefore dismiss the petition for lack of standing.

I. Background

The issues of traceability and redressability require us to examine:

• the relationship between the Alliance, Rocky Mountain Power, and Wasatch,
• the regulatory framework underlying Wasatch's certification,
• the regulatory concept of " avoided costs," and
• the administrative proceedings that resulted in the existing electricity rates.

A. The Relationship Between Alliance, Rocky Mountain Power, and Wasatch

Our analysis of standing begins with the relationship among the Alliance, Rocky Mountain Power, and Wasatch. Many Alliance members buy their electricity from Rocky Mountain Power, which had two contracts with Wasatch. One contract terminated before the appeal, and the other contract ended during the pendency of the appeal. Following termination of the contracts, Wasatch has yet to complete the facilities or find a buyer for the wind energy.

B. The Regulatory Framework

The relationship among the Alliance, Rocky Mountain Power, and Wasatch must be viewed against the backdrop of the regulatory framework. That framework is designed to encourage production of alternative sources of energy such as wind power.

The regulatory framework grew out of the Public Utilities Regulatory Policies Act (PURPA). See F.E.R.C. v. Mississippi, 456 U.S. 742, 746-47, 102 S.Ct. 2126, 72 L.Ed.2d 532 (1982). Through the Act, Congress attempted to promote renewable energy sources by requiring utilities to buy power from small facilities that met criteria established by the statute and FERC. See Am. Paper Inst., Inc. v. Am. Elec. Power Serv. Corp., 461 U.S. 402, 405-06, 103 S.Ct. 1921, 76 L.Ed.2d 22 (1983); 16 U.S.C. § 796(17)(A)-(E). If a producer of wind power believes it satisfies the statutory criteria, it can certify compliance. 18 C.F.R. § 292.207(a). Wasatch certified compliance, and that certification drew continued opposition by the Alliance.

The opposition stems from the statutory cap of 80 megawatts on the volume of wind power that a production facility can generate and still be considered small enough to

Page 1033

qualify for statutory benefits. 16 U.S.C. § 796(17)(A)(ii). Though Wasatch regards itself as the developer of two separately qualifying small-production facilities, the Alliance disagrees. This disagreement stems from a dispute over whether Wasatch plans to develop a single facility or two facilities. Wasatch plans to develop two turbine clusters, and they will be considered parts of the same facility if they are located within a mile of each other. 18 C.F.R. § 292.204(a)(2)(i)-(ii). But the clusters will be more than a mile apart.

Wasatch considered the planned clusters to be two separate facilities and certified their compliance with the required criteria. This certification triggered Rocky Mountain Power's obligation under PURPA to buy the output of wind energy produced by Wasatch at the two sites. 16 U.S.C. § 824a-3(a)(2); 18 C.F.R. § 292.303(a). In carrying out this obligation, Rocky Mountain Power entered into 20-year agreements for each wind project in 2010. But for Wasatch's self-certification, Rocky Mountain Power would not have signed these agreements with Wasatch.

C. Rocky Mountain Power's " Avoided Costs"

To determine the effect of Wasatch's certification on Alliance members, we must understand how the regulations affect rates. The effect stems from a statutory inducement for a small power-production facility: When the facility satisfies the statutory and regulatory criteria, it can force a utility to buy the energy for its " avoided cost." 16 U.S.C. § 824a-3(a)-(b), (d); 18 C.F.R. §§ 292.101(b)(6), 292.303(a), 292.304(a)(2). This cost is the incremental cost the utility would have paid to generate or purchase that electricity from another source. 18 C.F.R. § 292.101(b)(6); see 16 U.S.C. § 824a-3(d).

D. Administrative Proceedings in the Wyoming Commission and the Eventual Agreement

Ultimately, it was up to the Wyoming Public Service Commission to determine Rocky Mountain Power's avoided costs. See 16 U.S.C. § 824a-3(f). According to the Alliance, the Commission calculated these costs in a manner that required rate increases. This argument requires us to understand how the Wyoming Commission ultimately decided on the existing rates.

These rates were set as Rocky Mountain Power was experiencing increases in its own costs. Rocky Mountain Power tried to offset these cost increases by raising rates charged to consumers. But a rate increase required approval of the Wyoming Public Service Commission.

So, Rocky Mountain Power applied for a rate hike, listing its contracts and explaining its increase in costs. Some parties objected, and the regulatory proceedings ended in 2012 with a stipulation. In the eventual stipulation, Rocky Mountain Power agreed to reduce the amount of the rate increase by over $12,000,000. In re Rocky Mountain Power, 2012 WL 6700584, at * 1-*2 (Wyo.Pub.Serv.Comm'n Oct. 8, 2012) (unpublished). But that settlement does not supply any information about the ultimate effect of the Wasatch contracts on electricity rates.

II. Article III Standing Analysis

Some standing requirements are based on Article III of the constitution, and others are based on prudential considerations. We need not analyze prudential standing if the claimant lacks standing under Article III. See Wyoming v. U.S. Dep't of Interior, 674 F.3d 1220, 1231 (10th Cir.2012); Mount Evans Co. v. Madigan, 14 F.3d 1444, ...


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