September 7, 2018 Ms. Kavita Kale Michigan Public Service Commission 7109 W. Saginaw Hwy. P. O. Box 30221 Lansing, MI 48909 Via E-filing RE: MPSC Case No. U-18090 Dear Ms. Kale: The following is attached for paperless electronic filing: spower Development Company, LLC s Application for Leave to Appeal the Administrative Law Judge s Decision to Deny Its Petition to Intervene Out of Time Proof of Service Sincerely, Christopher M. Bzdok Chris@envlaw.com xc: Parties to Case No. U-18090 Mak Nagel, spower Hans Isern, spower
STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own motion, establishing the method and avoided cost calculation for CONSUMERS ENERGY COMPANY to fully comply with the Public Utilities Regulatory Policy Act of 1978, 16 USC 2601 et seq. ) ) ) Case No. U-18090 ) ) ALJ Sharon L. Feldman ) spower DEVELOPMENT COMPANY, LLC S APPLICATION FOR LEAVE TO APPEAL THE ADMINISTRATIVE LAW JUDGE S DECISION TO DENY ITS PETITION TO INTERVENE OUT OF TIME Pursuant to Rule 433 of the Michigan Public Service Commission s Rules of Practice and Procedure, R 792.10433, spower Development Company, LLC ( spower ), by and through its counsel Olson, Bzdok & Howard, P.C, hereby submits this Application for Leave to Appeal the August 27, 2018 decision of Administrative Law Judge ( ALJ ) Sharon L. Feldman denying spower s Petition for Leave to Intervene Out of Time ( Petition to Intervene ). In support of this application, spower submits the following brief: BRIEF IN SUPPORT Introduction This docket was opened by the Commission when it issued its May 3, 2016 order directing Consumers Energy Company s ( Consumers ) to file avoided cost information necessary to establish a method and avoided cost calculation pursuant to the Public Utility Regulatory Policies Act of 1978, 16 USC 2601 et seq. ( PURPA ). spower, an independent power producer with
projects in Consumers territory, petitioned to intervene in this proceeding in order to urge a prompt decision on motions for rehearing that have been pending for several months a situation which is harming spower (and others) by delaying projects and creating an uncertain investment climate for independently-developed renewable energy in Michigan. While neither Consumers nor Staff opposed spower s petition, 1 the ALJ denied it anyway citing the late stage of the proceeding. spower respectfully submits that the ALJ s decision was in error. Because spower s intervention will not prejudice any party if the proceeding is concluded expeditiously on the existing record, and because spower s intervention is vital to protecting its interests if the proceeding is not so concluded, the Commission should reverse the ALJ s decision and grant spower s petition. Statement of Facts and Proceedings As stated in its Petition to Intervene and verified by affidavit, spower is a leading independent power producer ( IPP ) that owns and/or operates more than 1,400 MW of utility and distributed electrical generation systems across the US. spower focuses on utility-scale renewable energy projects, including solar, wind, and other technologies, including qualifying facilities ( QFs ) under PURPA. With more than 13 gigawatts between operating, construction, and pipeline, spower s portfolio continues to expand as it strives to meet growing sustainable energy needs across North America. spower is focused on generating high performance, sustainable power at a low cost with minimal disruption to existing utility partners operations. Utilities trust in spower s proven track record of responsible development, interconnection, permitting, 1 The Biomass Merchant Plants or BMPs (Cadillac Renewable Energy, Genesee Power Station Limited Partnership, Grayling Generating Station Limited Partnership, and T.E.S. Filer City Station Limited Partnership) filed the only response that directly opposed spower s intervention though the ALJ did not cite any of the BMPs arguments in her decision. The Independent Power Producers Coalition ( IPPC ) filed a response that only opposed spower s intervention if some other party used it to justify further delay in this proceeding, while acknowledging spower s commitment not to delay it. 2
construction, and O&M to help them meet their sustainable energy requirements. spower, through affiliates, has approximately 60 MW of solar facilities under development in Consumers interconnection queue and going through the Interconnect Agreement process. On February 22, 2018, the Commission issued an order in this proceeding addressing several motions and petitions for rehearing ( February 22 Order ). Among the Commission s decision points, the Commission found it appropriate to limit payment of the full avoided capacity cost to the first 150 MWs of new QF capacity in the queue. 2 The Commission also ordered, The company shall notify each QF in the queue of its queue position relative to the first 150 MWs and file its queue list with the Staff under seal. 3 spower has at least one project within the first 150 MW of the interconnection queue. Subsequent to the February 22 Order, several parties filed various petitions for rehearing regarding the Commission s directive to Consumers to begin contracting with the first 150 MW of QFs in Consumers queue. The petitions for rehearing largely focused on how Consumers should determine which QFs were within the first 150 MW that should be given contracts. As of the date spower filed its Petition to Intervene and as of the date of this filing, the Commission has not yet issued an order addressing these petitions for rehearing. Consumers also has not notified QFs of their queue positions relative to the first 150 MW of QFs as of the date of this filing, presumably because Consumers prefers to wait for guidance from the Commission regarding how to determine which QFs are within the first 150 MW of the queue. In its Integrated Resource Plan, Consumers confirmed that it is awaiting further Commission guidance on this issue, stating that 2 February 22 Order, p. 13. 3 Id. 3
its resource plan includes 150 MW of new PURPA Qualifying Facility generation at the avoided cost rate determined in Case No. U-18090 that is yet to be fully resolved. 4 Growing increasingly concerned about the impact of the delay in a decision on the motions for rehearing, spower filed its Petition to Intervene in this docket on August 16, 2018. As stated in the petition, it is spower s position that the Commission does not need to reopen this proceeding in order to provide guidance to Consumers regarding how to determine the QFs that are in the first 150 MW of its queue and that must be given avoided cost contracts at the full avoided capacity and avoided energy rates pursuant to the February 22 Order. spower concurs with the Environmental Law and Policy Center ( ELPC ), the Ecology Center, the Solar Energy Industries Association, and Vote Solar ( ELPC et. al. ), which stated in their April 2, 2018 consolidated response to the petitions for rehearing ( ELPC s Consolidated Response ), the Commission s [February 22 Order] clearly referred to the Company s interconnection queue (not the PURPA database). 5 spower further concurs with ELPC that the Commission should clarify February 22 Order by confirming that the order referred to Consumers interconnection queue and does not need to take further evidence on this issue. spower is also aware that the Commission has undertaken, in Case No. U-20095, to investigate various issues concerning its PURPA implementation, including determining when a legally enforceable obligation ( LEO ) has been created. spower filed comments in Case No. U- 20095 on March 19, 2018. The Commission does not need to conclude its investigation into how a LEO is formed in order to clarify its February 22 Order in this proceeding. As ELPC s Consolidated Response explained, the February 22 Order clearly referred to Consumers interconnection queue. spower supports a further exploration of the criteria by which a LEO queue 4 Case No. U-20165, Consumers Energy Integrated Resource Plan, Exhibit A-2 (RTB-2), p. 89. 5 ELPC s Consolidated Response, p. 5. 4
should be established in the future through Case No. U-20095, but the Commission can and should clarify now that its February 22 Order referred to Consumers interconnection queue. ALJ ruled: The ALJ denied spower s petition to intervene at a hearing held on August 27, 2018. The I understand that spower has interests in this proceeding, but I m going to deny your petition without prejudice to spower s right to renew its petition if the Commission were to reopen the record in this case. At this point of the proceeding, there s no obvious procedure available for spower to advance its interests in the development of a factual record or in presenting legal argument. I think your petition itself may accomplish the purpose of bringing to the Commission s attention your client s interest in the issuance of a decision in this matter, and there may be other opportunities available to your client as well. But at the end of the day, I just feel that it s too late in this proceeding as the posture currently stands for me to grant the petition. 6 spower is filing this application for leave to appeal within 14 days of the ALJ s ruling, as required by R 792.10433(1). Legal Argument The Commission should reverse the ALJ s decision and grant spower s petition to intervene out of time. It is undisputed on this record that spower is suffering an injury-in-fact as a result of the lack of resolution on the motions for rehearing. Further, spower made a showing that the current situation creates good cause for spower to seek intervention now, and there is no evidence in the record showing that spower s intervention would delay the proceeding or prejudice any party. 6 Motion hearing, 6 TR 480-481. 5
It is well-known that the Commission recognizes two types of intervention. The first type is intervention by right, which requires that the party will suffer an injury-in-fact as a result of the outcome of the case, and that the party is within the zone of interests protected by the statute. See, e.g., Association of Data Processing Service Organizations, Inc v. Camp, 397 US 150; 90 S Ct 827; 250 L Ed 184 (1970). The second type of intervention is permissive, where the Commission has the discretion to permit a party to intervene in the case where that party can provide useful information to the Commission or a unique perspective on the issues in the case. spower qualifies for intervention under both standards. As outlined in the petition and supported by affidavit, spower has suffered and continues to suffer harm from Consumers refusal to begin negotiating and entering into contracts with QFs in the first 150 MW of its queue. These harms include development delays while keeping the monetary commitment as it progresses through interconnect process, which also result in direct economic impact to the local landowners who have offered to partner with spower by offering their land under lease agreements, regulatory uncertainty, and the risk of not qualifying for federal tax credits. As discussed above, it is spower s understanding that Consumers is waiting for the Commission to provide it with clear guidance on how to determine which QFs are in the first 150 MW of its queue. While spower believes the Commission s February 22 Order was clear, spower understands that, due to the unresolved petitions for rehearing on this issue, Consumers prefers to wait for the Commission to provide additional guidance. Accordingly, spower filed its Petition to Intervene to seek party status in this proceeding to protect its interests in the swift resolution of this issue. spower urges the Commission to clarify its February 22 Order and to order Consumers to begin entering into contracts with the first 150 MW of QFs in its interconnection queue at the full avoided capacity and avoided energy cost rates that the Commission has established. 6
Second, as a leading developer of PURPA projects in the United States, spower will provide a unique perspective on the issues in this case. spower staff have extensive knowledge and experience in the areas of PURPA development, interconnection, and contracting; and will bring this expertise to bear in this proceeding. In her ruling quoted above, the ALJ found that spower had an interest in the proceeding, which should have entitled spower to intervention of right. While spower s petition was admittedly filed late in the proceeding, Rule 410 of the Commission s Rules of Practice and Procedure expressly allows for a late Petition for Leave to Intervene to be granted upon a showing of good cause and a showing that a grant of the petition will not delay the proceeding or unduly prejudice any party to the proceeding. R 792.10410(1). Hence, the test for late intervention is not a subjective assessment of how late in the proceeding the request is filed, but rather whether there is good cause for the timing and whether the intervention will cause delay or prejudice. Here, spower established good cause and no party provided any evidence of delay or prejudice. Further, the ALJ did not directly address spower s evidence of good cause, and did not find that any delay or prejudice would result from spower s intervention. As stated in its Petition to Intervene, spower has good cause for seeking to intervene now. While spower has been monitoring this case for some time, the harm to spower described above only occurred as a result of the delay and uncertainty resulting from the lack of a decision on the motions filed after the February 22 Order. Until the situation ripened into its current procedural posture, spower had no reason to intervene in this case in an effort to advocate for resolution so that spower can proceed with its projects. Importantly, no party disputed these facts. 7 7 The BMPs argued inaptly that spower s intervention was spurred by the February 22 Order and so should have been filed closer in time to that order being issued. (Joint Objection of BMPs, p 3.) However, spower s petition clearly explained that the intervention was spurred by the delay in a decision on motions for rehearing of the February 22 Order, not the Order itself, and the ALJ recognized this fact. 7
Further, spower s presence in this case will not delay it or unduly prejudice any party. spower does not take a position at this time on other outstanding issues in this case; does not seek to establish a new schedule or commence additional proceedings; and does not seek to delay the resolution of the case. spower simply seeks a decision on the outstanding matter described above. As a condition of being granted leave to intervene and in accordance with the Commission s Rules, spower stated in its Petition to Intervene that it shall be bound by the record and procedural schedules developed before the granting of leave to intervene. No party provided any credible reason to question these commitments, and IPPC acknowledged them in its response. As noted above, during the hearing on spower s Petition to Intervene on August 27, 2018, the ALJ stated, I understand that spower has interests in this proceeding, 8 but ultimately denied spower s Petition. spower appreciates the ALJ s recognition that spower has interests in this proceeding. However, spower respectfully disagrees with the ALJ s conclusion that it is too late in the proceeding for the Commission to grant spower s Petition to Intervene. Currently, it is not clear if or when the Commission will issue an order in response to the various petitions for rehearing filed in response to the February 22 Order. Because there is no deadline or timeline for the Commission to issue an order on these petitions for rehearing, it is not too late for spower to intervene for the purpose of urging the Commission to issue such an order. Further, spower respectfully disagrees with the ALJ s determination that inviting spower to renew its petition to intervene if the Commission reopens this proceeding is sufficient. Since the ALJ (and IPPC) 9 acknowledged that spower would have a right to intervene in a reopening, the interests of administrative economy are best served by allowing that intervention now rather than 8 Case No. U-18090, Hearing Transcript Volume 6, p. 480, lines 22-23. 9 [I]f the case is reopened, then I would be the first to agree that [spower] and any other solar developer should come in to the proceeding, you know, as of right I would argue. Oral argument by counsel for IPPC, 6 TR 475. 8
requiring spower to repeat the process again later to achieve the same result. Further, no party has articulated any credible prejudice that would result from granting spower s intervention if the Commission clarifies the question of the 150 MW queue without requiring further proceedings. 10 If spower would be entitled to intervene if the Commission reopened the proceeding; and would not harm any party through its intervention if the Commission did not; then there is no reason not to grant spower s intervention at this time. Conclusion and Relief Requested With its Order of November 21, 2017 in this case, the Commission prompted substantial clean energy investment in Michigan. However, the delay in bringing this case to resolution has begun to create uncertainty that is affecting these investments. spower seeks intervention to bring these issues to the Commission s attention. As discussed above and as discussed in spower s Petition to Intervene, the Commission should promptly issue an order clarifying that its February 22 Order was referring to Consumers interconnection queue when it ordered Consumers to begin contracting with the first 150 MW of QFs in the queue. WHEREFORE, spower respectfully requests the Commission grant its Petition to Intervene and allow it to participate as a party in this proceeding. Respectfully submitted this 7 th day of September, 2018, By: /s/christopher M. Bzdok Christopter M. Bzdok (P53094) 10 Again, the BMPs were the only party to claim any prejudice; they provided no evidence to support their claims, and spower thoroughly rebutted their claims on the record of the hearing at 6 TR 465-469. To conserve space, those arguments are incorporated by reference here. 9
STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own motion, establishing the method and avoided Case No. U-18090 cost calculation for CONSUMERS ENERGY COMPANY to fully comply with Hon. Sharon L. Feldman the Public Utilities Regulatory Policy Act of 1978, 16 USC 2601 et seq. PROOF OF SERVICE On the date below, an electronic copy of spower Development Company LLC s Application for Leave to Appeal the Administrative Law Judge s Decision to Deny Its Petition to Intervene Out of Time was served on the following: Name/Party Administrative Law Judge Sharon L. Feldman Counsel for Consumers Energy Co. Robert W. Beach Anne M. Uitvlugt Michael C. Rampe Counsel for MPSC Staff Spencer A. Sattler Counsel for Cadillac Renewable Energy LLC Thomas J. Waters Counsel for Cypress Creek Renewables, LLC Jennifer Utter Heston Counsel for Independent Power Producers Coalition for Michigan Timothy Lundgren Laura A. Chappelle John W. Sturgis Counsel for Great Lakes Renewable Energy Association, Inc. Don L. Keskey Brian W. Coyer Counsel for Environmental Law & Policy Center Margrethe Kearney E-mail Address feldmans@michigan.gov mpscfilings@cmsenergy.com robert.beach@cmsenergy.com anne.uitvlugt@cmsenergy.com Michael.rampe@cmsenergy.com sattlers@michigan.gov twaters@fraserlawfirm.com jheston@fraserlawfirm.com tjlundgren@varnumlaw.com lachappelle@varnumlaw.com jwsturgis@varnumlaw.com donkeskey@publiclawresourcecenter.com bwcoyer@publiclawresourcecenter.com mkearney@elpc.org
Counsel for Michigan Power Limited Partnership David E.S. Marvin Counsel for Ranger Power, LLC Toni L. Newell Counsel for Geronimo Energy Justin Ooms dmarvin@fraserlawfirm.com tlnewell@varnumlaw.com jkooms@varnumlaw.com The statements above are true to the best of my knowledge, information and belief. OLSON, BZDOK & HOWARD, P.C. Counsel for spower Development Company, LLC Date: September 7, 2018 By: Kimberly Flynn, Legal Assistant Karla Gerds, Legal Assistant Breanna Thomas, Legal Assistant 420 E. Front St. Traverse City, MI 49686 Phone: 231/946-0044 Email:kimberly@envlaw.com karla@envlaw.com and breann@envlaw.com 2