Renewable Energy Plants Can’t Block Newcomers

(CN) - A group of renewable energy plants in New England can't challenge a Massachusetts agency's decision to let new companies into a biofuels program, the state Supreme Court ruled.

The Massachusetts Supreme Court backed the superior court's dismissal of a complaint brought by Indeck Maine Energy, Ridgewood Providence Power Partners and Ridgewood Rhode Island Generation against the state's Commissioner of Energy Resources.

The companies operate biomass energy plants throughout New England and have done so for more than decade. They were the first wave of renewable energy providers to receive a "statement of qualification" from the Department of Energy Resources, allowing them to sell renewable energy credits to retail power suppliers, which, in turn, sell electricity to Massachusetts residents.

The companies sued the agency in 2006, challenging its decision to qualify two new biomass energy providers. They said it "threatened their competitive position," because the new companies use wood debris as fuel, which is "contrary to the regulation defining eligible biomass fuel."

The department moved to dismiss, saying the companies lack standing because they're not part of a regulated industry. The superior court judge agreed and dismissed the case, calling the department a "gatekeeper" rather than a regulator.

An appeals court revived the case, ruling that there is no clear standard in Massachusetts for determining if an industry is regulated, and that the biofuels program "embodies a scheme to promote and to control competition in the renewable energy marketplace."

Though he called the appellate court's opinion "well-reasoned," Associate Justice Robert J. Cordy, writing for the seven-justice panel, found that the companies lack standing, because the alternative fuels program doesn't qualify as a regulated industry.

The alleged threat to competition for the existing participants "does not fall within the area of concern sought to be protected or furthered by the statute," Justice Cordy wrote.

The court pointed out that the legislation behind the biomass energy program was meant to foster competition, not limit it.

"[W]e are persuaded that ... the Legislature intended to induce the promotion and expansion of the renewable energy generating market," Cordy wrote, "and did not seek to protect and thereby confer standing to sue on existing competitors, thereby creating a barrier to market entry" (emphasis in original).

The state Supreme Court backed the superior's court's dismissal of the case.

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