Utah Supreme Court rejects deference to agency interpretations of statutes or rules.

Ellis-Hall Consultants v Public Utilities Commission of Utah

Ellis-Hall petitioned for review of Commission’s order applying a new pricing methodology to Ellis-Hall’s negotiation of a price for wind power electricity. The Court granted the petition and remanded for further proceedings. It first held that the standard of review in the case should be de novo as modern case law holds courts, not agencies, determine what law means and the methodology order relied upon by Ellis-Hall is law. Court repudiated any case law that called for deference to an agency’s interpretation of its rules or the statute relied upon to promulgate rules. It held that the new methodology does not apply here as Commission only ruled that a new methodology may be needed, declared the new methodology to be prospective only and Ellis-Hall has a vested right under the order in effect when Ellis-Hall started their efforts to secure a purchase agreement for its wind generated. The Court declined to rule on whether the utility had discretion to refuse to enter a purchase agreement with Ellis-Hall or whether Commission would inevitably reject a purchase agreement s neither has occurred and thus the issues were not ripe.