The battle heats up: CEC tells WRCOG to withdraw its lawsuit by 9am Friday, or else…

This is turning out to be one heck of a story. This afternoon the CEC came across what it feels are damning documents and at 6pm tonight demanded that WRCOG withdraw its lawsuit by 9am Friday morning.   I think we need to see the WRCOG complaint to understand what’s really going on here (any legal scholars out there want to help us read between the lines? it’s Case No. RIC 10005849), but here’s what I can surmise from from a quick read:

-WRCOG’s complaint rests on the notion that it would not have suspended its own PACE program in light of the FHFA ruling, as the CEC did with its funds allocated to PACE in PON 400-09-401

-Under this logic, WRCOG’s original injunction holding the CEC back from spending money on PACE still stands, regardless of whether they cancel PON 400-09-401 or not

-The development here is that the CEC has come across documents that suggest that WRCOG Council recently discussed the FHFA issue and that the conversation indicates that they would have canceled their own program anyway

-The CEC has demanded that WRCOG withdraw its lawsuit by 9am Friday morning, and provide evidence that it has done so by 12pm, or else…(presumably, they will sue back in appeals court).

I don’t know enough about the legal case here to have an opinion. If someone who has some expertise in the area does, please let me know and I’ll share it with the community. My sense is that there are some bigger, behind-the-scenes political struggles going on between more conservative southern California and more liberal northern California, and in particular with northern California regulators. There have long been big north/south divides in energy politics in California, and this case seems to be no different. I doubt WRCOG thinks they have a chance of recovering any of the $33m, they seem to be doing this to make a point. Anyone have a view on what that is?

Here are the documents of discussion.

And here’s the full press release from the CEC:

For Immediate Release: October 14, 2010 – 6 PM

Media Contact: 916-654-4989
Adam Gottlieb agottlie@energy.state.ca.us
Susanne Garfield sgarfield@energy.state.ca.us

California Energy Commission Demands Withdrawal of Lawsuit
by Western Riverside Council of Governments

SACRAMENTO – On behalf of their clients, the Western Riverside Council
of Governments, the law firm of Best, Best and Krieger argued to Judge
John Molloy in Riverside Superior Court that the Energy Commission
should be held in contempt of court for failing to hear a Western
Riverside’s protest that the Energy Commission had improperly
disqualified them from the solicitation. Western Riverside had applied
for $20 million in funding for their Property Assessed Clean Energy
(PACE) program.

The Energy Commission has just learned that Western Riverside
acknowledged that its own PACE program was suspended, expressly due to
the PACE ruling of the Federal Housing Finance Agency, and that Western
Riverside entertained a resolution supporting federal legislation to
restore PACE at its Executive Committee meeting of September 13, 2010.
In fact, FHFAs action triggered local governments throughout the state
to suspend their PACE programs, and forced the Energy Commission to
cancel its PACE solicitation.

For Western Riverside to represent to the court that the Energy
Commission invented a pretext to cancel the solicitation to evade Judge
Molloy’s court order is disingenuous at best and a frivolous abuse of
the legal process at worst.

It is absurd for Western Riverside to argue that the Energy Commission
should have set aside its obligation to expeditiously allocate Recovery
Act funding to create jobs and stimulate the economy to have another
state agency to hear a protest challenging the scoring of a solicitation
that was canceled for a program that has been suspended. At the same
time to argue to the judge that he should not consider the harm to the
State of California, is reprehensible.

Based on this new information, the Energy Commission has demanded that
Western Riverside withdraw its restraining order and dismiss its lawsuit.

To view the letter from the Energy Commission to Best, Best and Krieger:
http://www.energy.ca.gov/releases/2010_releases/2010-10-14_Letter_re_WRCOG_v_CEC.pdf
(If link above doesn’t work, please copy entire link into your web browser’s URL)

PREVIOUS NEWS RELEASE -
$33 Million to California in Jeopardy
http://www.energy.ca.gov/releases/2010_releases/2010-10-14_stimulus_funds.html

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