United States District Court, D. Connecticut
OMNIBUS RULING IN RELATED CASES ON MOTIONS TO DISMISS
COMPLAINTS AND FOR PRELIMINARY INJUNCTIVE RELIEF
CHARLES S. HAIGHT, JR. Senior United States District Judge
ruling concerns two cases, each entitled Allco v. Klee,
et al., which bear docket numbers 3:15-cv-608 and
3:16-cv-508. These two cases, related but not formally
consolidated, center on the State of Connecticut's
implementation of a 2013 state statute that empowered the
Commissioner of Connecticut's Department of Energy and
Environmental Protection to solicit proposals for renewable
energy, select winners of the solicitation, and direct
Connecticut's utilities to enter into wholesale energy
contracts with the chosen winners. Additionally, 3:15-cv-608
also concerns a statute which requires energy utilities to
buy renewable energy credits or produce renewable energy
themselves in order to sell energy in the State of
Allco Finance Limited ("Allco"), a generator of
renewable electrical energy, has filed two actions in this
Court against Connecticut State industry regulators.
Plaintiff Allco contends in each action that the state
statutory scheme is precluded by or violates federal energy
statutes, and that Connecticut's implementation of its
statute has damaged plaintiff. In each action, the same
Defendants, who are the Connecticut State regulators, move to
dismiss the complaint. Plaintiff opposes Defendants'
motions to dismiss, and for its part, moves for preliminary
injunctive relief in each case, which Defendants oppose.
consequence, these two cases, viewed together, currently
present for the Court's consideration two motions to
dismiss and two motions for preliminary injunctive relief.
The parties and the issues are largely the same. The motions
have been elaborately briefed by able counsel. The Court
heard oral argument. This Omnibus Ruling decides all four
discovery of fire was a significant event, creating for
mankind warmth against the cold and light in the darkness. We
do not know which man or woman first noticed that a burning
bundle of sticks produced those useful results of warmth and
light, which in modern times are the products of alternative
forms of energy. Electrical energy is one of these. The
concept of electricity was first deduced by William Gilbert,
a physician in the service of Elizabeth I of England
(1533–1603). In 1752, Benjamin Franklin demonstrated
the practical application of electricity by flying a kite
carrying a key into a lightening storm. Today, electricity is
a principal source of light and heat for the world and its
importance of electricity has increased exponentially in
human affairs, politicians and governments inevitably stepped
up regulation of the generation and marketing of electrical
energy. In the United States, responsibility for the
electrical energy industry is divided between the federal
Congress and the state legislatures. "In the early
20th century, state and local agencies oversaw
nearly all generation, transmission, and distribution of
electricity." FERC v. Electric Power Supply
Association, 136 S.Ct. 760, 767 (2016)
("EPSA""). When, in 1927, the Supreme
Court held that the Commerce Clause barred the States from
regulating interstate aspects of electricity transactions,
see Public Util. Comm'n of R.I. v. Attleboro
Steam & Elec. Co., 273 U.S. 83, 89–90
(1927), a void in the federal regulatory scheme was exposed,
which Congress filled in 1935 by enacting the Federal Power
Act, 16 U.S.C. § 791a et seq. ("FPA"
or "the Act"). The Act fashioned that
federal–state division of legislative regulatory
responsibility that underlies and gives rise to the cases at
in 1973, the Federal Energy Regulatory Commission
("FERC") has exclusive authority to regulate
"the sale of electric energy at wholesale in interstate
commerce." 16 U.S.C. § 824(b)(1). A wholesale sale
is defined as a "sale of electric energy to any person
for resale." 16 U.S.C. § 824(d). "But the law
places beyond FERC's power, and leaves to the States
alone, the regulation of 'any other sale' –
most notably, any retail sale – of electricity."
Hughes v. Talen Energy Marketing, LLC, 136 S.Ct.
1288, 1292 (2016) (quoting EPSA, 136 S.Ct. at 762).
"The States' reserved authority includes control
over in-state 'facilities used for the generation of
electrical energy.'" Id. (quoting
16 U.S.C. § 824(b)). "Alongside those grants of
power, however, the Act also limits FERC's regulatory
reach, and thereby maintains a zone of exclusive state
jurisdiction. . . . Accordingly, the Commission may not
regulate either within-state wholesale sales, or more
important here, retail sales of electricity (i.e.,
sales directly to users). State utility commissions continue
to oversee those transactions." EPSA, 136 S.Ct.
at 767–768 (citation omitted).
the FPA, FERC "has authority to regulate 'the
transmission of electric energy in interstate commerce'
and 'the sale of electric energy at wholesale in
interstate commerce.'" Id. at 767
(quoting 16 U.S.C. § 824(b)(1)). The FPA
obligates FERC "to oversee all prices for those
interstate transactions and all rules and practices affecting
such prices, " and further provides that "all rates
and charges made, demanded or received by any public utility
for or in connection with" interstate transmissions or
wholesale sales must be "just and reasonable."
Id. (quoting 16 U.S.C. § 824d(a)). If
"any rate for charge, " or "any rule,
regulation, practice or contract affecting such rate [or]
charge" falls short of that standard, FERC "must
rectify the problem: It shall then determine what is
'just and reasonable' and impose 'the same by
order.'" Id. (quoting 16 U.S.C.
within the electricity market there are three general
categories of actors: generators (or other entities that buy
energy through bilateral contracts), transmitters, and load
serving entities (LSEs). See Hughes v. Talen Energy
Marketing, LLC, 136 S.Ct. 1288, 1292 (Apr. 29, 2016).
Generators include power plants and other sources of energy
production. Id. LSEs distribute power to the end
user. Division of Energy Market Oversight office of
Enforcement, Federal Energy Regulatory Commission, Energy
Primer: A Handbook of Energy Market Basics,
57–63 (2015) (available at
Transmitters historically were private entities, but
currently are nonprofit “Regional Transmission
Organizations” ("RTOs") or “Independent
System Operators” ("ISOs"). Id.
There are seven RTOs in the United States. Id. The
New England ISO ("ISO-NE"), which is of interest in
this case, operates in New England, including in Connecticut.
1978, Congress enacted the Public Utility Regulatory
Practices Act ("PURPA"). "Technically, PURPA
is one of several amendments to the Federal Power Act, "
whose provisions are codified in part in the FPA, 16 U.S.C.
§ 824a-3. See Allco Finance Limited v. Klee,
805 F.3d 89, 91 n. 1 (2015) (hereinafter "Allco
II"). Given that the Federal Power Act gives FERC
"exclusive authority to regulate sales of electricity at
wholesale in interstate commerce, " Allco II,
805 F.3d at 91 (citing 16 U.S.C. § 824(b)(1)),
"States may not act in this area unless Congress creates
an exception." Id. (citing 16 U.S.C.
§ 824(b)). "PURPA contains one such exception that
permits states to foster electric generation by certain power
production facilities ('qualifying facilities') that
have no more than 80 megawatts of capacity and use renewable
generation technology." Id. at 91–92.
That particular aspect of the statutory scheme plays a part
in the cases at bar.
engrafting of PURPA upon the FPA reflects the fact that
FERC's role in ensuring that a public utility's rates
or charges for electricity are just and reasonable has
evolved over the years as the industry has changed.
"Decades ago, state or local utilities controlled their
own power plants, transmission lines, and delivery systems,
operating as vertically integrated monopolies in confined
geographic areas." EPSA, 136 S.Ct. at 768.
Since the FPA's passage, electricity has increasingly
become a competitive interstate business, in which
independent power plants abound, and electricity flows
"not through the local power networks of the past, but
instead through an interconnected 'grid' of
near-nationwide scope." Id. (citation omitted).
In that new world, FERC
often forgoes the cost-based rate-setting traditionally used
to prevent monopolistic pricing. The Commission instead
undertakes to ensure "just and reasonable"
wholesale rates by enhancing competition – attempting,
as we recently explained, "to break down regulatory and
economic barriers that hinder a free market in wholesale
136 S.Ct. at 768 (quoting Morgan Stanley Capital Group
Inc. v. Public Util. Dist. No. 1 of Snohomish Cty., 554
U.S. 527, 536 (2008)).
are two ways in which FERC achieves its regulatory aims.
First, Generators and LSEs can enter private, bilateral
contracts called “Power Purchase Agreements”
(PPAs). See Hughes, 136 S.Ct. at 1292. If these
bilateral contracts are made in good faith and are the result
of arms-length negotiation, then they are presumed reasonable
by FERC. Id. (citing Morgan Stanley, 554
U.S. at 546–48). Second, RTOs can buy from and sell to
generators and LSEs through a FERC-approved auction process.
Id. RTOs transmit the energy sold by generators to
LSEs, but also run several markets under the supervision of
FERC, including a same-day auction, a next-day auction, and a
capacity auction. Division of Energy Market Oversight office
of Enforcement, Federal Energy Regulatory Commission, Energy
Primer: A Handbook of Energy Market Basics,
57–63 (2015) (available at
The“capacity auction” is designed to ensure
enough generation is available to meet future power demands.
Id. For ISO-NE, a is conducted by state regulators
three years prior to when the capacity is needed.
Id. The RTOs determine how much capacity will be
needed in three years’ time, then generators, and
utilities that have acquired capacity from generators under
bilateral contracts, commit to sell (and the RTOs commit to
purchase) the amount of capacity selected in the auction for
resale to the LSE in three years’ time. Id.
mechanism FERC employs for that salutary purpose, the Court
noted in EPSA, is to
encourage the creation of nonprofit entities to manage
wholesale markets on a regional basis. Seven such wholesale
market operators now serve areas with roughly two-thirds of
the country's electricity load (an industry term for the
amount of electricity used). Each administers a portion of
the grid, providing generators with access to transmission
lines and ensuring that the network conducts electricity
reliably. And still more important for present purposes, each
operator conducts a competitive auction to set wholesale
prices for electricity.
These wholesale auctions serve to balance supply and demand
on a continuous basis, producing prices for electricity that
reflect its value at given locations and times throughout
each day. Such a real-time mechanism is needed because,
unlike most products, electricity cannot be stored
136 S.Ct. at 768.
Supreme Court filed its opinion in EPSA on January
28, 2016 and filed Hughes almost three months later,
on April 19, 2016. EPSA upheld an FERC order which
required wholesale electricity market operators to compensate
electricity users, or demand response providers, at the same
rate as electricity generators, for users' commitment to
reduce their electricity use during peak periods.
Hughes rejected a state commission order directing
state utilities to enter into a contract for differences with
new power companies to incentivize the construction of the
plant. Hughes gives a detailed explanation of a
competitive wholesale auction, of the sort to which
EPSA referred more or less en passant.
auction in Hughes was conducted by PJM
Interconnection, a RTO that "oversees the electricity
grid in all or parts of 13 mid-Atlantic and Midwestern States
and the District of Columbia." 136 S.Ct. at 1293. PJM,
functioning as an RTO, predicted regional electricity demand
three years ahead of time, and initiated a capacity auction
to account for the demand. Justice Ginsburg's opinion in
Hughes describes what happened next:
Owners of capacity to produce electricity in three years'
time bid to sell that capacity to PJM [the RTO] at proposed
rates. PJM accepts bids until it has purchased enough
capacity to satisfy anticipated demand. All accepted capacity
sellers receive the highest accepted rate, called the
"clearing price." LSEs must purchase, from PJM,
enough electricity to satisfy their assigned share of overall
136 S.Ct. at 1293. Justice Ginsburg said approvingly that a
capacity auction "serves to identify need for the new
generation, " is "designed to accommodate long-term
bilateral contracts for capacity, " and "FERC
extensively regulates the structure of the PJM capacity
auction to ensure that it efficiently balances supply and
demand, producing a just and reasonable clearing price."
Id. at 1293–1294.
contracts, a separate and secondary feature of the market,
are an integral part of the energy market. These contracts
are subject to review by FERC. See Morgan Stanley Capital
Group Inc. v. Public Utility District No. 1 of Snohomish
County, 554 US. 527 (2008) ("[T]he FPA also permits
utilities to set rates with individual electricity through
bilateral contracts. . . [which] must be filed with the
Commission before they go into effect."). While
generally these contracts are between private parties, at
issue in this case is a Connecticut State program to solicit
proposals for bilateral contracts with renewable energy
generators. In Allco II, the Second Circuit said of
Connecticut's pertinent statute that it "empowered
the Commissioner of Connecticut's Department of Energy
and Environmental Protection to solicit proposals for
renewable energy, select winners of the solicitation, and
direct Connecticut's utilities to enter into wholesale
energy contracts with the chosen winners." 805 F.3d at
cases at bar arise out of Allco's allegations that the
State's implementation of the Connecticut statutory
scheme violated provisions of the FPA and PURPA.
2013, Connecticut enacted Connecticut Public Act 13-303.
Section 6 of that Act empowers the Commissioner of the
Connecticut Department of Energy and Environmental Protection
("DEEP") to solicit proposals for renewable energy
and thereafter direct the Connecticut Power and Light Company
and United Illuminating, the principal Connecticut utility
companies, to enter into wholesale power purchase agreements
for a term of up to twenty years, serving up to four percent
of Connecticut's electricity needs. Section 6 provides in
pertinent part that the Commissioner "may . . . solicit
proposals . . . from providers of Class 1 renewable energy
sources" and "if the commissioner finds such
proposals to be in the interest of ratepayers . . . [he or
she] may select proposals from such resources to meet up to
four per cent of the load distributed by the state's
electric distribution companies." Conn. Public Act
13-303, Section 6.
2013, the Commissioner solicited proposals from providers of
renewable energy, pursuant to Section 6 ("the 2013
RFP"). Allco submitted proposals for five solar
projects. The Commissioner did not select them. Instead, he
selected a wind project located in Maine, Number Nine Wind,
and a different solar project located in Connecticut, Fusion
Solar, and directed the Connecticut utilities to execute
power purchase agreements at fixed wholesale prices with the
entities whose proposals had been selected.
by this result, Allco reacted by suing the DEEP Commissioner.
The complaint, filed on December 18, 2013, was given docket
number 3:13-cv-1874 and assigned to District Judge Arterton.
Allco charged that the Commissioner's implementation of
Section 6 and attendant selection of energy providers
violated federal law. Its theory of the case was that under
the FPA, FERC had exclusive jurisdiction over wholesale
energy prices; any exceptions to the rule prohibiting states
from setting wholesale prices existed only in PURPA. Thus,
the Commissioner's implementation of Section 6 by means
of the 2013 RFP had the effect of fixing wholesale energy
prices, a power reserved to FERC under the FPA; the resulting
proposals would be permissible only if they complied with
PURPA; and, Allco contends, they failed to do so.
opinion reported at 2014 WL 7004024 (D.Conn. Dec.10, 2014),
Judge Arterton granted the Commissioner's motion to
dismiss Allco's complaint ("Allco I").
She held that Allco lacked standing, and its claim also
failed on the merits. Id. at *10. The Second Circuit
affirmed the dismissal of Allco's complaint, on somewhat
different grounds. Allco Finance Ltd. v. Klee, 805
F.3d 89 (2d Cir. 2015) ("Allco II").
Certiorari does not appear to have been sought.
Second Circuit's decision in Allco II seemingly
brought to an end litigation between Allco and the State
Defendants arising out of the 2013 RFP. However, under the
circumstances described infra, Allco contends that
its 2013 FRP claims have been revived, they are risen, and
Allco asserts them again in Allco IV, as a ground
for equitable relief.
Second Circuit filed its opinion in Allco II on
December 1, 2015. On April 26, 2015, while that appeal was
pending, Allco filed another complaint [docket number
3:15-cv-608] which was assigned to the undersigned. I will
refer to that case as "Allco III." Allco
is the Plaintiff. The DEEP Commissioner and the individual
Commissioners of the Connecticut Public Utilities Regulations
Authority ("PURA") are the same Defendants as those
in the earlier case before Judge Arterton, which I will call
"the 2013 RFP case." Allco's complaint in
Allco III alleges at § 29 that on February 26,
2015, DEEP issued a draft request for proposals under Section
6 of the Connecticut Public Act. The State intends to proceed
in the same manner as it did in connection with the 2013 RFP.
I will call this renewed aspect of the litigation "the
2015 RFP case." The Allco III complaint further
alleges that in the 2015 RFP case, DEEP plans to issue its
final request for proposals "in the spring of 2015 and
compel wholesale energy transactions soon after it completes
its review of proposals." Allco III, Complaint,
¶ 30. Allco's theory in Allco III with
respect to the 2015 RFP is the same as it was in Allco
I with respect to the 2013 RFP: The actions of the State
DEEP, purportedly in accordance with Section 6 of the
Connecticut statute, violate provisions of the pertinent
federal statutes, the FPA and PURPA. Allco also moves for a
preliminary injunction in respect of the 2015 RFP. At that
time the Allco III complaint was filed, no claims by
Allco were pending in respect of the 2013 RFP, because Judge
Arterton had dismissed the complaint in Allco I and
Allco's appeal to the Second Circuit was pending. That
landscape changed when on December 1, 2015, the Second
Circuit decided Allco II, the appeal of Allco
I. It is necessary to consider that opinion carefully.
Allco I, which was assigned to Judge Arterton,
Allco's claims and theories against the State Defendants
with respect to the 2013 RFP mirror the claims and theories
Allco pleads against the same Defendants in Allco
III with respect to the 2015 RFP. Judge Arterton
dismissed Allco's complaint in Allco I, in an
opinion reported at 2014 WL 7004024 (D.Conn. Dec. 10, 2014).
She held that Allco lacked standing in the case because it
had not suffered a legally protected injury within the zone
of interests protected by the Federal Power Act.
Alternatively, Judge Arterton concluded that Allco's
claim failed on the merits because the State Defendants'
"implementation of Section 6 does not seek to regulate
wholesale energy sales but rather is a permissible regulation
of utilities under the State's jurisdiction."
Allco I, 2014 WL 7004024, at *10.
appealed the dismissal of Allco I. The Second
Circuit affirmed that dismissal, albeit on what Chief Judge
Katzmann's opinion characterized as "alternative
grounds." Allco II, 805 F.3d 89, 91 (2015)
("Allco II"). The Second Circuit held that
(1) PURPA's private right of action foreclosed
Allco's claims under 42 U.S.C. §§ 1983 and 1988
to vindicate any rights conferred by PURPA; "(2) Allco
failed to exhaust its administrative remedies, a prerequisite
for its equitable action seeking to vindicate specific rights
conferred by PURPA; and (3) Allco lacks standing to bring a
preemption action seeking solely to void the contracts
awarded to" the successful 2013 RFP bidders. Allco
II, 805 F.3d at 91.
Second Circuit's opinion in Allco II and Judge
Arterton's order of dismissal in Allco I, which
Alco II affirmed, dealt solely with the 2013 RFP.
Allco III, where the complaint was filed on April
26, 2015, and is pending before this Court, deals solely with
the 2015 RFP. Allco has filed yet another, more recent case
in this Court, which I will call "Allco
IV." The complaint in Allco IV was filed
on March 30, 2016. In Allco IV, Allco continues to
attack the validity of the State's 2015 RFP through its
motion for an order to show cause as to why a preliminary
injunction should not issue, but also revives its challenge
to the 2013 RFP in the complaint.
noted, the complaint in Allco I challenged the 2013
RFP, Judge Arterton dismissed that complaint, the Second
Circuit affirmed the dismissal, and the Supreme Court was not
asked to interfere. One would have thought that the Allco
I controversy over the 2013 RFP was dead, but Allco
purports to lift it up, like Lazarus, and makes that claim a
part of its complaint in Allco IV. Allco's
theory is that events subsequent to the Second Circuit's
opinion in Allco II have cured Allco's failure
to exhaust administrative remedies, one of the deficiencies
noted by the Court of Appeals in Allco II.
Second Circuit's opinion in Allco II, the Court
of Appeals considered two of Allco's requested forms of
relief that are relevant to this Court's analysis of the
cases at bar. First, the Second Circuit dealt with
Allco's request to enjoin the Commissioner from
conducting future procurement that violated the Federal Power
Act or PURPA. Allco's theory behind its preemption claim
relied, as it does here, on PURPA. Allco claimed that
"the only way in which the Commissioner can issue a
Section 6 contract that is not preempted by the Federal Power
Act is if that contract meets the requirements of the PURPA
exception." Allco II, 805 F.3d. at 96. The
Second Circuit held that Allco could not avoid the
administrative exhaustion requirement of PURPA by
"characterizing an otherwise covered PURPA-related
equitable claim as a Supremacy Clause claim."
Id. (citing Niagara Mohawk Power Corp. v.
FERC, 306 F.3d 1264, 1270 (2d Cir. 2000)).
the court analyzed Allco's request to void the Section 6
contracts already awarded to two power producers under the
2013 RFP. The court said "[t]o the extent that these
claims seek only to invalidate the results of the prior
procurement . . . Allco lacks standing because that requested
relief does not redress its injury, i.e., its not
being selected for a Section 6 contract." Allco
II, 805 F.3d. at 98. Furthermore, voiding the contracts
awarded to the two power producers "fail[s] to redress
Allco's injuries, as they do not make it 'likely, as
opposed to merely speculative, ' that Allco will
eventually receive a Section 6 contract." Id.
(citing Friends of the Earth, Inc. v. Laidlaw
Environmental Services (TOC), Inc., 528 U.S. 167, 181
(2000)). This remedy, the court noted, "would simply
deny Allco's competitors a contractual benefit without
redressing Allco's injury-its not being selected for a
Section 6 contract." Allco II, 805 F.3d. at 98.
these adverse appellate rulings, Allco purports to find in
the Second Circuit's Allco II opinion
significant support for its cause. Allco acknowledges that
the Second Circuit dismissed on standing grounds its request
to void the Section 6 contracts awarded to two other power
producers as the result of a prior RFP which had been fully
executed and the contracts awarded at the end of process.
Allco distinguishes that circumstance from its claim in the
instant cases that the State Defendants are proposing to
violate PURPA in connection with future RFP. As to that
aspect of the case, Allco reads Allco II as holding
only Allco that had not exhausted its administrative remedies
with respect to future RFPs' compliance with PURPA. Allco
interprets that particular holding as an implied decision by
the Second Circuit that Allco has standing, as a qualifying
facility under PURPA, to seek declaratory and injunctive
relief against future contemplated or presently promulgated
and outstanding RFPs, so long as Allco has exhausted the
administrative remedies available to address the grievances
argument has surface appeal, but it does not penetrate below
the surface. True enough, the Second Circuit dismissed this
aspect of the case in Allco II on the basis that
Allco had not exhausted its administrative remedies; but the
Court of Appeals said nothing about whether Allco would
acquire standing if it thereafter exhausted those
administrative remedies. The Second Circuit's opinion
added that "[a]s Allco acknowledges, its 'status as
a small power producer' under PURPA 'is relevant to
[its] Article III standing and to explain[ing] why [its]
injury is redressable.'  As such, any equitable relief
relating to future contracts awarded under Section 6
necessarily implicates PURPA; otherwise, such relief would
provide no path by which Allco could eventually obtain a
non-preempted Section 6 contract." Allco II,
805 F.3d at 96. The Second Circuit did make clear that Allco
was not challenging the statute as a "disappointed
bidder" but instead is bringing its case to enforce
changes in the circumstances of the case have occurred since
December 1, 2015, when the Second Circuit filed its amended
opinion in Allco II. Following the Court of
Appeals' dismissal of its complaint. Allco petitioned
FERC to initiate enforcement proceedings pursuant to PURPA
against DEEP and PURA. In a Notice of Intent Not To Act
issued on January 8, 2016 [Doc. 33-1], FERC advised:
Notice is hereby given that the Commission declines to
initiate an enforcement action under section 210(h)(2) of
PURPA. Our decision not to initiate an enforcement action
means that Allco may themselves bring an enforcement action
against the Connecticut Commission and DEEP in the
submitted this Notice from FERC to the Court's attention
as an attachment to "Defendants' Third Notice of
Additional Authority" [Doc. 33] in Allco III.
That submission is in effect a mini-brief in which the
Defendants undertake to explain the effect of FERC's
declining to bring enforcement actions against DEEP and PURA
upon Allco's right to bring the instant action.
Defendants' accompanying submission says of FERC's
Notice of Intent Not to Act:
The Notice demonstrates the statutory procedure plaintiff
Allco failed to follow in an earlier lawsuit challenging a
renewable energy procurement conducted by DEEP in 2013.
See Allco Fin. Ltd. v. Klee, 805 F.3d 89 (2d Cir.
Nov. 6, 2015). Allco's lawsuit arising out of the 2013
procurement was dismissed by the United States Court of
Appeals for the Second circuit for failure to exhaust
administrative remedies. Allco v. Klee, 805 F.3d at
97. Specifically, Allco failed to follow 16 U.S.C. §
824a-3(h)(2)(B) which permits FERC the opportunity
[sic] to either initiate enforcement against the
state regulatory authority, or decline to do so, thereby
enabling Allco to bring suit against the state regulatory
authority in District court. After dismissal by the Second
Circuit Court of Appeals, Allco petitioned FERC to initiate
enforcement proceedings against DEP and PURA. In the attached
Notice of Intent Not To Act, FERC declined to do so.
Consequently, Allco may now bring action against the state
regulatory authority regarding the 2013 procurement in
District Court, providing all jurisdictional prerequisites
Count I of the instant case relates to a future procurement
to be conducted by DEEP, and potential future action by PURA
(providing DEEP finds projects acceptable under the terms of
the RFP and an application is filed at PURA). The attached
Notice demonstrates the statutory procedure Allco should have
followed to bring the instant action, but failed to pursue.
Doc. 33 at 1–2.
Notice, and the accompanying discussion intended to explain
it, are not models of clarity. FERC's Notice of Intent
Not to Act does not identify the target or subject matter of
Allco's "petition for enforcement." As of
January 8, 2016, the date FERC issued its Notice, two
requests for proposals by the state regulatory authorities
were subjects of concern: the 2013 RFP (which had been
distributed to the industry and fully implemented) and the
2015 RFP (which was contemplated for the future). The State
Defendants' quoted discussion appears to view Allco's
petition for enforcement as relating solely to the 2013 RFP.
I do not know how else to construe the Defendants'
statement that as the result of FERC's issuing its Notice
of Intent Not to Act, "Allco may now bring action
[sic] against the state regulatory authority
regarding the 2013 procurement in District Court, provided
all jurisdictional prerequisites are met" (a qualifying
phrase Defendants do not bother to define). As for the 2015
RFP, which is the subject matter of Allco III,
Defendants say only that FERC's Notice "demonstrates
the statutory procedure Allco should have followed to bring
the instant action, but failed to pursue." I do not know
how to construe that statement other than as an
assertion by Defendants (or their counsel) that FERC Notice
had nothing to do with the 2015 RFP.
would seem that Thomas Melone, the CEO of Allco who is also
admitted to the Connecticut Bar and appears as counsel of
record for Allco, has a different view. On March 30, 2016,
Allco filed its complaint in Allco IV, which asserts
claims with respect to both RFP 2015 and RFP 2013. Allco
IV echoes Allco III's request for a
preliminary injunction against the 2015 RFP. On April 27,
2016 the Court heard oral argument on Allco's motions for
preliminary injunctive relief. During the hearing on the
present motions, Mr. Melone was asked to comment on the
Second Circuit's opinion in Allco II, and said
[S]ince the Second Circuit went out of its way to say what we
didn't have standing with regard to, they were saying
that we had standing with respect to everything else once we
went through the petiition at FERC from a jurisdictional
perspective, which we now have. . . . [W]hat the Second
Circuit did say is that our case – we had to go to FERC
first from a jurisdictional perspective because that –
because we were trying to enforce PURPA, and trying to
enforce the specific part of PURPA which says that a state
has to implement the FERC's rules, and what the Second
Circuit did say explicitly is that what thet meant was that
the State couldn't act contrary to the Federal Power Act
So that's why we're here today, because we went to
the FERC, we are prosecuting this case based on an
enforcement action under PURPA, which the Second Circuit said
we had to do it that way, and that means, I think by
definition, we have statutory standing, as well as a