CEC Granted Stay – Energy Upgrade California Moves Forward

This just out from the CEC – Energy Upgrade California is moving forward…

For Immediate Release: October 21, 2010
Media Contact: Susanne Garfield – 916-654-4989

Energy Commission Granted Stay by Court of Appeal

$33 million in federal funds to move forward

SACRAMENTO – The California Court of Appeal Fourth District today lifted
a restraining order that would have prevented California’s Energy
Commission from distributing $33 million in federal energy funds. The
Court of Appeal order also canceled the November 4 hearing on the
contempt charge.

On October 18, the Energy Commission filed a petition in the Court of
Appeal asking the court to throw out a temporary restraining order and
the contempt charge issued last week by a Riverside Superior Court judge
for the Western Riverside Council of Governments.

With this stay the Energy Commission is now free to execute a planned
contract for the $33 million Energy Upgrade California Program, a
comprehensive, statewide energy efficiency and renewable energy building
improvement program sponsored by the Energy Commission, the Public
Utilities Commission, utilities and local governments. In response to
the restraining order, the Energy Commission continued the business
meeting from yesterday until today in hopes it would be able to encumber
these funds in time to meet federal deadlines. In view of the Court of
Appeal’s order, the Energy Commission will reconvene at 2 p.m. today, to
consider contract(s) that implement the Energy Upgrade California program.

Western Riverside has until November 1, 2010, to oppose the Energy
Commission’s petition filed with the California Court of Appeal.

The October 14 temporary restraining order issued by the judge on
Western Riverside’s behalf blocked the Energy Commission from spending
the remaining $33 million in federal stimulus funds for any purpose
including other programs. The judge also issued a possible contempt
charge for canceling a solicitation that was rendered obsolete by
changes in federal banking regulations. Western Riverside has continued
its legal actions against the Commission despite having indefinitely
suspended its own residential PACE (Property Assessed Clean Energy)
program due to these federal regulatory changes.

To view the Court of Appeal Stay:
http://www.energy.ca.gov/releases/2010_releases/2010-10-20_WRCOG_Order.pdf

To view the October 18 petition to the Court of Appeal:
http://www.energy.ca.gov/releases/2010_releases/2010-10-18_Petition_Filed_with_Court_of_Appeal.pdf

To view the October 20 supplement to the petition:
http://www.energy.ca.gov/releases/2010_releases/2010-10-20_Supplement+Errata_to_Petition_for_Writ_of_Prohibition.pdf
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Additional News Releases:
http://www.energy.ca.gov/releases/index.html
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Additional docs from the CEC

Update on previous post

Two documents that might be helpful, courtesy of the CEC:

1. Basic Chronology Fact Sheet RE Western Riverside Litigation
2. Petition filed with Court of Appeal 10.18.10

CEC given more time

Today the CEC announced that the Department of Energy had given it verbal assurance that the October 21st deadline to spend the stimulus funds or lose them wouldn’t be enforced.  This takes some of the pressure off the unfolding Energy Upgrade California saga, but for the time being the lawsuit still stands. The CEC filed a motion to dismiss the lawsuit in Appeals Court earlier this week. No update on that yet but will post as soon as I hear something…

**CEC Press Release**

SACRAMENTO – The Energy Commission received a nod from the Department of
Energy (DOE) to extend an October 21 deadline for encumbering federal
stimulus funds. The Energy Commission explained this new information in
a supplement filed today to the California Court of Appeal.

Concerned with the looming federal deadline to encumber the funds,
Energy Commission Chairman Karen Douglas spoke with Department of Energy
(DOE) officials and received a verbal assurance from them that they are
not contemplating any immediate action to rescind the $33 million.

“I’m extremely grateful that the Department of Energy is giving us
additional time to resolve this legal issue that is impeding our efforts
to move these federal stimulus funds forward and launch a statewide
energy efficiency program,” said Karen Douglas, Chairman, Energy
Commission. “Although DOE has indicated that they will give California
more time, we don’t know how much additional time we have. We must
resolve this situation quickly to put this money to work for California.”

On October 18, the Energy Commission filed a petition in the Court of
Appeal asking the court to throw out a temporary restraining order and
the contempt charge issued last week by a Riverside Superior Court judge
for the Western Riverside Council of Governments.

The federally mandated April 30, 2012 deadline to spend the monies
awarded under the Recovery Act cannot be modified and each passing day
increases the likelihood that all the contractor and subcontractors will
not be able to timely perform all of the tasks required under the Energy
Upgrade California contract.

The October 13 temporary restraining order issued by the judge on
Western Riverside’s behalf blocked the Energy Commission from spending
the remaining $33 million in federal stimulus funds for any purpose
including other programs. The judge also issued a possible contempt
charge for canceling a solicitation that was rendered obsolete by
changes in federal banking regulations. Western Riverside has continued
its legal actions against the Commission despite having indefinitely
suspended its own residential PACE (Property Assessed Clean Energy)
program due to these federal regulatory changes.

To view the October 18 petition to the Court of Appeal:

http://www.energy.ca.gov/releases/2010_releases/2010-10-18_Petition_Filed_with_Court_of_Appeal.pdf

To view the October 20 supplement to the petition:

http://www.energy.ca.gov/releases/2010_releases/2010-10-20_Supplement+Errata_to_Petition_for_Writ_of_Prohibition.pdf

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

Meet the new bad guy in town: WRCOG (pronounced, ironically, as WAR-cog)

Looks like the Energy Upgrade California program might not happen after all, in any shape or form. Riverside County (or, more accurately, the Western Riverside Council of Governments) was successful in getting a restraining order that prevents the CEC from spending the $33m it had earmarked for Energy Upgrade California. Riverside County had already brought a lawsuit against the CEC back when these funds were meant to be spent on PACE (see related posts) and was awarded an injunction.  But since the CEC canceled the PACE spending plan in late July, the hope was that the Riverside County lawsuit would be null and void. Not so, said a Riverside County Superior Court Judge…

Full press release from the CEC below:

For Immediate Release: October 14, 2010

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

$33 Million to California in Jeopardy
Court Freezes Stimulus Funds for Energy Efficiency Program Days Before
Deadline

SACRAMENTO – A $33 million statewide energy efficiency jobs program has
been forced to stop after a Riverside County judge issued a temporary
restraining order against the California Energy Commission. The judge,
disregarding a looming federal deadline, also blocked the Energy
Commission from spending the funding for any other purpose, including
energy upgrades to residential, commercial or state buildings. The
federal requirement for the state to encumber the funds is October 21.

In a hearing this morning instigated by Western Riverside Council of
Governments, a Riverside County Superior Court judge set a November 4,
2010 hearing date to consider if the Energy Commission is in contempt of
court for canceling a solicitation that was rendered obsolete by changes
in federal banking regulations. The Department of Energy awarded the
Recovery Act money to the Energy Commission and encouraged the
Commission to use it to set up financing systems that would make it
cost-effective for homeowners to upgrade their homes so they use less
electricity.

“There is absolutely no basis for this order – this litigation centers
on a solicitation that the Energy Commission has canceled,” said Karen
Douglas, California Energy Commission Chairman. “Western Riverside’s
lawsuit threatens to derail a comprehensive statewide jobs program by
holding up $33 million in stimulus funds – funds that would benefit the
entire state, including citizens of Riverside County.”

Late last year, the Energy Commission released a $30 million federal
stimulus funded solicitation calling for proposals to create a Property
Assessed Clean Energy or PACE program which would have financed energy
efficiency and renewable energy systems for California residential and
commercial consumers. Western Riverside submitted a $20 million PACE
proposal but was disqualified because they ignored energy efficiency
requirements in the guidelines and insisted that the funds should be
spent only on installing solar panels.

Western Riverside protested but was too late in filing their complaint
to the Department of General Services (DGS). When DGS dismissed their
complaint, Western Riverside sued DGS in Riverside County and a judge
ordered DGS to hear their late protest. In addition, the judge also
ordered the Energy Commission not to go forward with the winning
contracts.

On July 6, 2010, however, the Federal Housing Finance Authority
effectively pulled the plug on all PACE programs nationwide (including
Western Riverside) making the Energy Commission’s $30 million financing
award obsolete and soon afterward the financing solicitation and its
five awards were canceled.

The Energy Commission has the discretion and authority to cancel
solicitations that will no longer achieve their intended objectives. In
addition, the Energy Commission has the discretion and authority to
determine how to best use the federal funds that it administers to meet
state policy goals and the objectives of the Recovery Act.

Racing against the federal time clock so the remaining $33 million in
federal funds were not forfeited, the Energy Commission created Energy
Upgrade California, a new comprehensive, statewide energy efficiency and
renewable energy building improvement program sponsored by the PUC,
utilities and local governments. Western Riverside returned to the
Riverside court, filed a motion for a restraining order to stop Energy
Upgrade California, claiming the Energy Commission should be held in
contempt for violating the order that DGS should hold a protest hearing
on the now-canceled PACE solicitation.

“Western Riverside deliberately refused to engage the Energy Commission
in a public forum and ambushed us with a baseless, last-minute contempt
charge,” said Douglas. “This court order places us squarely in conflict
with federal deadlines, at the expense of local governments across the
state.”

Energy Upgrade California would provide energy efficiency, renewable
energy generation and water efficiency information on rebates and
incentives, outreach and marketing, and financing opportunities to all
California’s fifty-eight counties through an integrated web portal and a
one-stop clearinghouse for financing options.

“The misguided actions by Western Riverside will likely result in these
Recovery Act dollars reverting to the federal government, thereby
preventing the Energy Commission from launching a statewide, job
creating energy efficiency program,” said California Task Force Director
Rick Rice. “Instead of working to put these Recovery Act dollars to good
use, Western Riverside is choosing to put tens of millions of dollars at
risk for local governments throughout the state that would otherwise be
able to participate in this program.”

Additional News Releases:
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