Professional Documents
Culture Documents
Electronically Filed
Supreme Court
SCOT-17-0000630
10-MAY-2019
08:02 AM
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SCOT-17-0000630
proposed biomass facility. The PUC denied LOL full party status,
and Order approving the Amended PPA (2017 D&O), to this court.
the Amended PPA, as required by state law; (2) denied LOL due
and (3) abused its discretion and violated due process by denying
and that the PUC denied LOL due process with respect to the
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I. BACKGROUND
A. PUC Proceedings
1. 2012 Docket
to purchase energy from the facility over the Original PPA’s 20-
year term.
1
We note that HAR title 6, chapter 61 - Rules of Practice and
Procedure Before the Public Utilities Commission (effective 1992-2018) - was
repealed on January 1, 2019. It was replaced by HAR title 16, chapter 601
(effective Jan. 1, 2019). All of the repealed administrative rules referenced
in this opinion have been replaced by identical rules that remain in effect.
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general public,” and assured the PUC that its intent was “not to
process.”
projects on the Big Island, and the supply and pricing analysis
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reflect the cost of biomass fuel supply; and (2) whether HELCO’s
2. 2017 Docket
seeking approval of the Amended PPA. The PUC entered Order No.
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production.
2
It appears Curtis was referring to the Big Island’s Hāmākua Coast,
of which Pepeekeo is a part.
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(Emphasis added).
that the PUC had already “grant[ed] LOL participant status based
3
Tawhiri Power, LLC (Tawhiri) and Hamakua Energy Partners (HEP)
were granted participant status in the 2017 Docket only with regard to Issue
2.b. LOL, Tawhiri, and HEP all filed motions to intervene in the 2012 Docket,
which were denied. They were instead granted limited participant status.
4
Although LOL did not cite HAR § 6-61-55 as the relevant authority
for its Motion to Upgrade Status, the motion nevertheless touches upon each of
the nine requirements for motions for intervention under HAR § 6-61-55(b)
(effective 1992 to 2018). HAR § 16-601-55(b) (effective Jan. 1, 2019)
contains the same nine requirements. See infra, note 22.
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5
Pursuant to Hawaii Revised Statutes (HRS) § 269–51 (Supp. 2018)
and HAR § 16–601–62 (effective Jan. 1, 2019), the Consumer Advocate represents
the consumer and may participate as an ex officio party in Commission
proceedings.
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6
HAR § 6-61-55(d) (effective 1992-2018) provided that “Intervention
shall not be granted except on allegations which are reasonably pertinent to
and do not unreasonably broaden the issues already presented.” HAR § 16-601-
55(d) (effective Jan. 1, 2019) contains identical language. See infra note
22.
7
HAR § 6-61-56 provided:
(continued...)
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b. Information Requests
7
(...continued)
(2) The applicant's position regarding the
matter in controversy;
(Emphasis added). Other than the HAR section numbers it references, HAR 16-
601-56 (effective Jan. 1, 2019) is identical to HAR 6-61-56 (effective 1992-
2018).
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participation[.]”
Nos. 2.a.i or 2.b, which [were] the only issues for which the
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c. Statements of Position
over the life of the PPA, and avoid the emission of hundreds of
“biomass plants, like wind and solar plants, are renewable and
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State’s RPS goals, the fact that the contract price for the
329,000 barrels of fuel oil saved.” The PUC also noted the
following:
. . . .
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. . . .
(Emphases added).
its firm capacity and contribution to the State’s RPS goals. For
the island of Hawaii, with the Project, the RPS goal levels
conclusions:
. . . .
. . . .
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(Emphases added).
Amended PPA properly reflect the cost of biomass fuel supply; and
Amended PPA are prudent and in the public interest. The PUC
arrangements under the Amended PPA were prudent and in the public
concluding that:
(Emphases added).
B. Direct Appeal
Motion to Upgrade Status and the 2017 D&O to this court. See HRS
§ 269-15.51 (Supp. 2018) and HRS § 91-14 (2012 & Supp. 2018).
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LOL presents three points of error:8 (1) the PUC was required,
were reasonable, but failed to do so; (2) the PUC denied LOL due
“intervenor.”
A. Jurisdiction
Res., 113 Hawaii 184, 192, 150 P.3d 833, 841 (2006) (internal
B. Direct Appeal
follows:
8
LOL did not specifically challenge any findings of fact contained
in the PUC’s 2017 D&O in its Opening Brief. “Findings of fact . . . that are
not challenged on appeal are binding on the appellate court.” Bremer v.
Weeks, 104 Hawaii 43, 63, 85 P.3d 150, 170 (2004) (citations omitted).
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HRS § 91-14(g).
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C. Constitutional Law
Ins. Co., 116 Hawaii 159, 164–65, 172 P.3d 471, 476–77 (2007)
(quoting Onaka v. Onaka, 112 Hawaii 374, 378, 146 P.3d 89, 93
III. DISCUSSION
A. Jurisdiction
64, 67, 881 P.2d 1210, 1213 (1994)). Hu Honua and HELCO argue
PUC’s 2012 D&O. Additionally, Hu Honua, HELCO, and the PUC argue
that this court lacks jurisdiction because LOL’s appeal does not
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arise from a contested case and LOL failed to comply with the
hearing.
attack on the PUC’s 2012 D&O. LOL has appealed the PUC’s 2017
1. Collateral Attack
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v. City and Cty. of Honolulu, 118 Hawaii 139, 150, 185 P.3d 887,
Revocable Tr., 138 Hawaii 158, 169 n.5, 378 P.3d 874, 885 n.5
the PUC’s 2017 D&O, not a collateral attack on the PUC’s 2012
D&O.
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deny the force and effect of the prior final judgment, order, or
validity of the PUC’s 2012 D&O, LOL’s appeal was instituted for
the express purpose of denying the force and effect the PUC’s
2017 D&O. Thus, the first Smallwood element is not satisfied and
consideration of GHGs was not within the scope of the PUC’s final
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and HELCO, the 2017 Docket only involved increasing the term of
and timely challenge the 2012 D&O, Hu Honua and HELCO argue that
Application of Maui Elec. Co. (MECO), 141 Hawaii 249, 263, 408
appeal the PUC’s 2017 D&O due to the PUC’s alleged failure to
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2. Contested Case
Haleakala v. Bd. of Land & Nat. Res., 131 Hawaii 193, 200, 317
9
HRS § 91-14(a) provides, in relevant part:
Any person aggrieved by a final decision and order in
a contested case or by a preliminary ruling of the
nature that deferral of review pending entry of a
subsequent final decision would deprive appellant of
adequate relief is entitled to judicial review thereof
under this chapter; but nothing in this section shall
be deemed to prevent resort to other means of review,
redress, relief, or trial de novo, including the right
of trial by jury, provided by law.
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agency rules. Id. Hu Honua, HELCO, and the PUC argue that this
does not arise from a contested case and LOL failed to comply
case hearing.10
at 200, 317 P.3d at 34). As set forth below, the PUC’s 2017
i. “Required by Law”
317 P.3d at 34). LOL contends that a contested case hearing was
10
The parties do not dispute that the PUC’s 2017 D&O was a final
decision or order for the purpose of satisfying the requirements for judicial
review of an agency appeal. Accordingly, that requirement is not addressed
further.
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required under HRS §§ 269-16 (Supp. 2018) and 269-27.2 (2007 &
11
HRS § 269-16(b) provides, in relevant part:
. . . .
. . . .
(Emphases added).
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hearing.
(PPAC). According to the 2017 D&O, HELCO’s ECAC and PPAC are
12
The utility’s rate schedules may include automatic rate
adjustment clauses, only for those clauses previously
approved by the commission. Upon effective date of
this Chapter, any fuel adjustment clause submitted for
commission approval shall comply with the following
standards:
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13
(...continued)
conformance with [HAR] § 6-60-6 whereby the base
electric energy rates charged to retail customers are
adjusted to account for fluctuations in the costs of
fuel and purchased energy or such successor provision
that may be established from time to time.
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Id.
charges for purchased power through its existing ECAC and PPAC.
previously approved and were not revised by the PUC’s 2017 D&O.
clauses would cover anything other than changes in the unit cost
clauses previously approved by the PUC, the PUC was not required
14
HRS § 269–27.2(d) provides, in pertinent part:
Upon application of a public utility that supplies
electricity to the public, and notification of its
customers, the commission, after an evidentiary
(continued...)
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extent that such costs were not included in its base rates.
§ 269-27.2(d).
Id.
14
(...continued)
hearing, may allow payments made by the public utility
to nonfossil fuel producers for firm capacity and
related revenue taxes to be recovered by the public
utility through an interim increase in rates[.]
(Emphases added).
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Amended PPA.
70 Haw. 361, 376, 773 P.2d 250, 260 (1989) (citing Aguiar v. Haw.
Hous. Auth., 55 Haw. 478, 495, 522 P.2d 1255, 1266 (1974)).
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70 Haw. at 377, 773 P.2d at 260). This court has explained that:
Water Use Permit Applications, 128 Hawaii 228, 241, 287 P.3d
provides:
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at 264, 408 P.3d at 16. This court held that Sierra Club’s
269. Id.
defined by HRS Chapter 269. LOL stated in the 2017 Docket that:
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by HRS Chapter 269, “we next consider what procedures due process
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Chapter 269.” MECO, 141 Hawaii at 265, 408 P.3d at 17. The
PPA was “consistent with HRS chapter 269” and was approved based
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project, LOL posits that the PUC’s approval of the Amended PPA
Club a hearing would not unduly burden the PUC in light of its
decisions).
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Honolulu, 118 Hawaii 320, 333, 189 P.3d 432, 445 (2008).
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the summit of Haleakalā on Maui. 131 Hawaii 193, 317 P.3d 27.
contested case hearing had been held. The ICA affirmed. Id. at
202, 317 P.3d at 36. We then stated the following regarding the
hearing:
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no formal contested case hearing was held before the PUC approved
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the PUC. Thus, had the PUC held a formal contested case hearing
HRS § 91-14.
and the PUC argue that LOL was not entitled to a contested case
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15
HAR § 6-61-74 provided:
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16
HAR § 13-1-29(a) provides:
(Emphasis added).
17
HAR § 13-1-29 has been amended slightly since this court decided
Hui Kakoo Aina Hoopulapula. When the case was decided, HAR § 13-1-29(a)
stated:
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Land & Nat. Res., 112 Hawaii 28, 40, 143 P.3d 1230, 1242 (2006),
17
(...continued)
petition of any government agency or any interested
person who then properly qualifies to be admitted as a
party. An oral or written request for a contested
case hearing must be made by the close of the public
hearing (if one is required) or the board meeting at
which the matter is scheduled for disposition (if no
public hearing is required). In either situation, the
person or agency requesting the contested case hearing
must file (or mail and postmark) a written petition
with the board not later than ten days after the close
of the public hearing or the board meeting, whichever
is applicable. The time for making an oral or written
request and submitting a written petition may be
waived by the board.
(Emphasis added).
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review of the kind LOL seeks.” The PUC cites MECO, 141 Hawaii
at 255, 408 P.3d at 7, Mauna Kea Anaina Hou v. Bd. of Land & Nat.
Res., 136 Hawaii 376, 380, 363 P.3d 224, 228 (2015), Kilakila,
Thielen, 124 Hawaii 1, 4, 237 P.3d 1067, 1070 (2010), and Pele
proposition that “at the very least, a party must have requested
such a hearing.” To the contrary, this court’s case law does not
cited by the PUC. In MECO, this court noted that, although the
MECO, 141 Hawaii at 255-57, 408 P.3d at 7-8. This court did
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Docket. Mauna Kea Anaina Hou, Kilakila, and Kaleikini are also
18
DOH rules also allow the DOH to hold a contested case hearing on
its own motion. See Pele Defense Fund, 77 Hawaii at 69 n.12, 881 P.2d 1215
n.12.
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B. Standing
1. “Person Aggrieved”
Haw. 3, 7, 594 P.2d 1079, 1082 (1979) (quoting East Diamond Head
Ass’n v. Zoning Board of Appeals, 52 Haw. 518, 523 n.5, 479 P.2d
of causes.” Id.
19
HRS § 91-14(a) provides, in pertinent part, “[a]ny person
aggrieved by a final decision and order in a contested case . . . is entitled
to judicial review thereof under this chapter[.]” Pursuant to HRS § 91-1, the
term “persons” includes individuals, associations, and public or private
organizations.
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141 Hawaii at 270-71, 408 P.3d at 22-23; see also Life of the
Land v. Land Use Comm’n, 63 Haw. 166, 176-77, 177 n.10, 623 P.2d
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Amended PPA. LOL has therefore satisfied the first prong of the
Bd. of Directors, 100 Hawaii 242, 271, 59 P.3d 877, 906 (2002)
20
The PUC impliedly recognized this potential injury when it
determined that, inter alia, “LOL’s concerns regarding the proposed project’s
impact on existing renewable projects on the Big Island” were sufficient to
satisfy the requirements of HAR § 6-61-56.
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has not been injured itself when: (1) its members would
2. Participation
aggrieved by the action of the PUC, and where they were involved
challenge the order of the PUC in this court.” Life of the Land,
of Hawaiian Electric Co., 56 Haw. 260, 265, 535 P.2d 1102, 1106
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[PUC’s] duties.” MECO, 141 Hawaii at 263, 408 P.3d at 15. That
does not absolve the PUC of this duty. Thus, in approving the
Chapter 269.
not show that the PUC expressly considered the reduction of GHG
emissions in reaching its decision. The PUC also denied LOL due
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(Emphases added).
21
Relatedly, we note that the State has committed to furthering the
goals of the Paris Climate Agreement. 2018 Haw. Sess. Laws. Act 15, § 1 at
46-47 (“The legislature notes that Hawaii, as part of the United States
Climate Alliance . . . committed to upholding the objectives of the 2015 Paris
Agreement.”). This commitment is advanced through HRS Chapter 225P, which
provides, in part:
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408 P.3d at 16. Thus, it is clear that the PUC was required to
of Cty. of Kauai, 133 Hawaii 141, 164, 324 P.3d 951, 974 (2014)
21
(...continued)
levels, temperatures, and other risk factors;
and
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Inc., 103 Hawaii 401, 432, 83 P.3d 664, 695 (2004) (explaining
Because the 2017 D&O does not reflect that the PUC
the Amended PPA, we conclude that the PUC failed to comply with
fuel resource.” The 2017 D&O does not provide responses to those
barrels of fuel per year and contribute to the State’s RPS goals,
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and noted that its decision to approve the Amended PPA was based
under HRS § 269-6(b). See MECO, 141 Hawaii at 264, 408 P.3d at
16.
whether its proposed PPA was prudent and in the public interest,
Id. at 265-66, 408 P.3d at 17-18. This court explained that when
reviewing the PPA, the PUC was required under HRS § 269-6(b) to
the PUC determine whether the energy charges under the Amended
PPA, the PUC found that the “purchased power costs and
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6(b)] was to require the [PUC] to consider the hidden and long-
allow the reviewing court to track the steps by which the [PUC]
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Tel. Co., 68 Haw. 316, 328, 713 P.2d 943, 953 (1986) (citing In
. . . .
of Hawaiian Tel. Co., 54 Haw. 663, 669, 513 P.2d 1376, 1379
Haw. at 185, 590 P.2d at 537 (remanding the case to the PUC for
conclusions”).
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comply with due process, this court observed that procedural due
court then stated that the PUC “has the authority to set
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a contested case hearing because the 2017 D&O, which approved the
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prudent and in the public interest. LOL argued that the proposed
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addressing the impact that approving the Amended PPA would have
must vacate the PUC’s 2017 D&O and remand this case to the PUC
approving the Amended PPA, whether the cost of energy under the
emissions, and whether the terms of the Amended PPA are prudent
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at 21.
that LOL’s appeal of Order No. 34651 is timely, but we need not
HELCO cites Kilakila, 131 Hawaii at 195, 317 P.3d at 29, for the
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limit under HRS § 91-14(b). Because Order No. 34651 was issued
days later on August 26, 2017, HELCO contends that LOL’s appeal
is untimely.
to appeal. Id.
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The order denied LOL party status and confirmed LOL’s limited
LOL’s appeal would have been unripe until the PUC issued the 2017
D&O, which represents the “final decision and order” of the PUC.
The PUC issued the 2017 D&O on July 28, 2017, which, along with
appeal twenty-nine days after the PUC’s 2017 D&O, its appeal is
timely.
22
HAR § 6-61-55 provided:
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(...continued)
motion in accordance with sections 6-61-15 to
6-61-24, section 6-61-41, and section 6-61-57,
stating the facts and reasons for the proposed
intervention and the position and interest of
the applicant.
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Hawaiian Elec. Co., Inc., 56 Haw. 260, 262, 535 P.2d 1102, 1104
the PUC misconstrued this aspect of its statutory duty, which was
of discretion.
(...continued)
(effective Jan. 1, 2019) is identical to HAR 6-61-55 (effective
1992-2018).
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LOL’s participation to Sub-issue Nos. 2.a.i and 2.b, but did not
have had greater access to documents had the PUC granted its
Chapter 269.
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IV. CONCLUSION
the costs associated with the Amended PPA were reasonable, and in
approving the Amended PPA. The PUC also failed to afford LOL an
Chapter 269.
opinion.
Joseph A. Stewart
(David M. Louie and
Aaron R. Mun with
him on the brief)
for appellees
HECO and HELCO
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