Protest vs CUC’s award of solar power contract dismissed

A court action filed by a California-based solar energy company that protested the Commonwealth Utilities Corp.’s decision to award the development of a solar power system on Saipan and Rota to another company has been dismissed.

Superior Court Associate Judge David A. Wiseman ruled yesterday that CUC met its burden to show that the Legislature intended to exclude from judicial review a proceeding under the statute pertaining to bid protest.

Wiseman said CUC made a showing by “clear and convincing” evidence that, under the Rules of Procedure for Administrative Appeals, petitioner Coldwell Solar International Inc. must allege that the disputed matter arises from an “agency final order or decision in a contested case.”

“Here, petitioner [Coldwell Solar] did not do so,” said the judge in granting CUC’s motion to dismiss without prejudice Coldwell Solar’s petition for judicial review. Dismissed without prejudice means the energy firm is allowed to re-file the court action.

In its petition, Coldwell Solar asked the court to reverse the Office of the Public Auditor’s decision that dismissed its protest over CUC’s decision to proceed with a power purchase agreement with American Capital Energy Inc.

Coldwell Solar also requested in its petition to remand the matter for decision on the merits of the appeal.

Coldwell Solar chief executive Dave Hood stated that the contract award is based on 2011 pricing for the project, but the solar costs have dropped dramatically since then, up to 60 percent in most cases.

Hood asserted that if CUC were to bid out this project now, at today’s pricing, CUC could have saved $20 million in 20 years.

According to court records, CUC solicited proposals from independent power producers in March 2011 to enter into a power purchase agreement with CUC for electric power generated by means of a solar photovoltaic system.

Coldwell Solar alleged that CUC issued a notice of intent to enter into a power purchase agreement with American Capital Energy Inc.

Coldwell Solar also alleged that by the time CUC and American Capital Energy entered into a contract, the cost of solar power generation had dropped so low that it was no longer reasonable for CUC and American Capital Energy to execute the contract.

In July 2014, Coldwell Solar filed a protest with CUC for its decision to proceed with the American Capital Energy contract. CUC denied Coldwell Solar’s protest.

Coldwell appealed CUC’s denial to OPA. In September 2014, OPA dismissed Coldwell’s appeal on the ground that it lacked jurisdiction to decide the appeal.

This prompted Coldwell Solar to file the petition for a judicial review of the OPA’s decision.

CUC argues that the text of the Rules of Procedure for Administrative Appeals shows legislative intent that judicial review of an agency action are limited to contested cases, those that require an agency hearing.

CUC argues that because there was no agency hearing involved in the course of the original litigation, the Commonwealth Administrative Procedure Act does not authorize the court to adjudicate the “contested case” petition for judicial review as it is currently pleaded.

In his order, Wiseman said the Rules of Procedure for Administrative Appeals provide that “an appeal from an agency final order or decision in a contested case is commenced by filing a petition for judicial review in the office of the clerk of the Superior Court.”

Wiseman said the Rules define a contested case as a “proceeding before an agency in which the legal rights, duties, interests or privileges of specific parties are required by law or constitutional right to be determined after an agency hearing…”

The judge said a bid protest falls somewhere along the middle in the “contested case” spectrum.

Wiseman said a bid protest allows a prospective bidder such as Coldwell Solar to file a written protest to the CUC executive director in a non-administrative hearing proceeding.

If the executive director does not grant the requested relief, then the petitioner may appeal the director’s decision to OPA, Wiseman said.

He said the bid protest appeal proceeding does not require a formal administrative hearing, but a conference may be scheduled by the parties at OPA’s discretion.

Thus, Wiseman pointed out, while the court finds that the underlying bid protest proceeding determines the legal rights and duties of specific parties, these legal rights and duties are not determined after an agency hearing.

“At the same time, the court does not find that a bid protest proceeding falls into the category of cases that are exclusively removed from the definition of a contested case: it does not involve the issuance of a license, permit, or certificate after a written examination,” the judge said.

Even so, Wiseman noted, the court does not find that a bid protest proceeding is a “contested case” under the Rules—a necessary component for the court to adjudicate Coldwell Solar’s petition.

Wiseman said because the court finds that a bid protest proceeding is not a “contested case,” Coldwell Solar cannot maintain its petition for judicial review as it currently stands as a matter of law.

Wiseman said to be eligible for relief, Coldwell Solar must conform its pleading to “any applicable form of legal action” as contemplated by the statute pertaining to judicial review.