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Ashburnham Light v. Maine Yankee
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MAINE SUPREME JUDICIAL COURT				Reporter of Decisions
Decision:1998 ME 270
Docket:Cum-98-216
Argued:	October 5, 1998
Decided:	December 18, 1998


Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, SAUFLEY, and ALEXANDER, JJ.





ASHBURNHAM MUNICIPAL LIGHT PLANT, et al.{1} v. MAINE YANKEE ATOMIC POWER COMPANY, et al.{2}


	
WATHEN, C.J.

	[¶1]  Plaintiffs, Ashburnham Municipal Light Plant and twenty-six
other retail electric service companies ("the secondary purchasers"), appeal
from the order of the Superior Court (Cumberland County, Calkins, J.)
denying without prejudice their motion to compel arbitration in their
dispute with defendants Maine Yankee Atomic Power Company ("Maine
Yankee") and its ten shareholders ("the primary owners").{3}  The Superior
Court denied the motion without prejudice on the ground that the Federal
Energy Regulatory Commission ("FERC") should first determine whether it
would exercise jurisdiction over the dispute.  On appeal, the secondary
purchasers contend that the court erred as a matter of law in denying the
motion because the Maine Uniform Arbitration Act requires the court to
order arbitration upon the showing that a valid written agreement to
arbitrate exists.  We find that the court did not abuse its discretion, and
affirm the order.
	[¶2]  In 1971, each secondary purchaser entered into a thirty-year
contract with the primary owners to purchase a small portion of the energy
generated by the Maine Yankee plant and to pay a fixed percentage on a
monthly basis, whether or not any power was generated.  In return, the
primary owners agreed to exercise their best efforts to operate the plant.{4} 
In total, the secondary purchasers contracted for 5.8% of the power
produced by  the Maine Yankee power plant.
	[¶3]  The secondary purchase contracts contained an arbitration
clause that stated: 
In case any dispute shall arise as to the interpretation or
performance of this Contract which cannot be settled by mutual
agreement and which may be finally determined by arbitration
under the law of the State of Maine then in effect, such dispute
shall be submitted to arbitration, and arbitration of such dispute
shall be a condition precedent to any action at law or suit in
equity that can be brought.  (Emphasis added).
	
Prior to the expiration of the contracts in 1997, the primary owners
permanently retired Maine Yankee based on considerations of cost
effectiveness after a shutdown caused by an equipment failure.  At this point,
a dispute arose between the parties.  The secondary purchasers alleged that
the primary owners' decision to retire Maine Yankee constituted a breach of
the secondary purchase contracts and they refused to make any further
payments despite continued billing from the primary owners.  The primary
owners, in turn, alleged that the secondary purchasers were in breach of the
contracts because they did not make the monthly payments required by the
contracts and the filed rate schedule rules.  In November of 1997, the
secondary purchasers served the primary owners with a written notice of
the initiation of arbitration regarding the dispute.  The primary owners
refused to arbitrate, contending that FERC had primary, if not exclusive,
jurisdiction over the dispute.  
	[¶4]  In December of 1997, the primary owners filed a complaint with
FERC requesting that it investigate the refusal of the secondary purchasers
to make payments under the terms of the contract and extend the length of
the contract until decommissioning is completed.  In January of 1998, the
secondary purchasers filed a motion to compel arbitration in the Superior
Court, pursuant to the Maine Uniform Arbitration Act, 14 M.R.S.A. §§ 5927-
5949 (1980). 
	[¶5]  The Maine Uniform Arbitration Act states:  "A written agreement
to submit any existing controversy to arbitration or a provision in a written
contract to submit to arbitration any controversy thereafter arising between
the parties is valid, enforceable and irrevocable, save upon such grounds as
exist at law or in equity for the revocation of any contract."  14 M.R.S.A. §
5927 (1980).  The secondary purchasers argue that the Act requires the
court to compel arbitration upon the demonstration by the movant that
there is a valid written agreement to arbitrate.  The court, in denying the
motion without prejudice, effectively stayed the proceedings.  The court
noted the uniqueness of the situation and the possible futility of ordering
arbitration at this time, and explained that "[i]f FERC concludes that it does
not have jurisdiction or decides not to exercise jurisdiction, and [Maine
Yankee and the primary owners] do not agree to arbitration, [the secondary
purchasers] may return to this court to seek an order to compel arbitration." 
	[¶6]  We have often declined to decide an issue that an administrative
agency with jurisdiction has not yet considered.  See Levesque v. Town of
Eliot, 448 A.2d 876, 878 (Me. 1982).  Such deference is particularly
appropriate when faced with the possibility that exclusive or primary
jurisdiction rests in the administrative agency.  With these concerns in
mind, the court in this case deferred to FERC to allow it to determine its
jurisdiction over the dispute.
	[¶7]  Under the "filed rate" doctrine, FERC has exclusive jurisdiction
over the reasonableness of interstate wholesale rates for electricity.  See 16
U.S.C. § 824(a) (1983).  FERC has the power to review rates and modify
them if they are unjust or unreasonable.  See Gulf States Utils. Co. v. Alabama
Power Co., 824 F.2d 1465, 1470 (5th Cir. 1987), rev'd. 831 F.2d 557 (5th
Cir. 1987) (revising one sentence of original opinion).  State courts are
completely preempted from acting within areas of FERC's exclusive
jurisdiction.  See id.
	[¶8]  Even if FERC's jurisdiction is not exclusive here, FERC may have
primary jurisdiction.  The doctrine of primary jurisdiction provides that "an
administrative agency, such as the FERC, should be able to participate in
decisions affecting a regulated industry, even when the agency does not have
exclusive jurisdiction."  Gulf State Utils. Co., 824 F.2d at 1472.  Whether
FERC has primary jurisdiction over a contract dispute that would otherwise
be subject to state court jurisdiction depends upon: 1. whether FERC
possesses special expertise making the case particularly appropriate for it to
decide; 2. whether there is a need for uniformity of interpretation of the
type of question raised in the dispute; and 3. whether the case is distant
from the regulatory responsibilities of FERC.  See Portland General Elec. Co.,
72 F.E.R.C. ¶ 61,009, p. 61,021 (1995).
	[¶9]  The primary owners' complaint before FERC alleges that the
decision to shut down Maine Yankee was made in accordance with good
utility practice, and that as such, the secondary purchasers' refusal to make
payments violates the filed rate doctrine.  The complaint asserts that FERC
has exclusive jurisdiction over the dispute because the secondary purchasers
are in breach of the filed rate doctrine.  FERC has not yet determined
whether it will exercise jurisdiction over the complaint.
	[¶10]  FERC has, however, accepted jurisdiction in two closely related
cases and scheduled consolidated hearings for April of 1999.  In Maine
Yankee Atomic Power Co., 82 F.E.R.C. ¶ 61.010 (1998), FERC will review
Maine Yankee's proposed amendments to its contracts with the primary
owners.  See id. at p. 61,035.  The proposed amendments would implement
the shutdown and impose decommissioning charges on the primary owners. 
See id.  The secondary purchasers have intervened in that case.  See id. 
Since the decision of the court in this case, FERC consolidated Maine
Yankee Atomic Power Co. with Maine Public Advocate v. Maine Yankee
Atomic Power Co.  See Maine Public Advocate v. Maine Yankee Atomic Power
Co., 83 F.E.R.C. ¶ 61,122, p. 61,561 (1998).  In that consolidated case,
FERC will review not only the prudency of Maine Yankee's management and
operation, but also the reasonableness of the resultant charges and the
decision to terminate the operation of the plant.  See id. at p. 61,560.
	[¶11]  In their motion to compel arbitration, the secondary purchasers
stated: "[r]esolution of the dispute will require an examination of the facts
that led to the shut down decision, an interpretation of relevant provisions
of the Secondary Purchase Contracts and a determination of whether the
parties have met or failed to perform their obligations under the Secondary
Purchase Contracts."  Their notice of initiation of arbitration claims that the
primary owners and Maine Yankee shut down the plant prematurely in
violation of their obligation to utilize good utility practice and in
contravention of the secondary purchase contracts.
	[¶12]  The dispute between the parties centers on a determination of
whether the decision to terminate the operation of the plant was prudent
and in accord with good utility practice.  The need for a uniform
interpretation is evident.  FERC has both the expertise and regulatory
responsibility to make this important decision.  Moreover, FERC has already
undertaken a   determination of these issues.  Based on the peculiar facts
before it, the serious question as to the extent of FERC's jurisdiction, and
the need for uniformity of interpretation of the type of question raised in the
dispute, the court did not exceed the limited bounds of its discretion in
concluding that the interests of the parties and the public would be best
served by awaiting FERC's jurisdictional determination with reference to
this complaint.  It is in the exercise of its equitable powers that the court
acted in this matter.
	The entry is:
				Judgment affirmed.
                 
Attorneys for plainitffs: Gary Newell, Esq., (orally) Margaret A. McGoldrick, Esq. Spiegel & McDiarmid 1350 New York Avenue, NW, Suite 1100 Washington, DC 20005-4798 David Plimpton, Esq. Mary T. Esposito, Esq. Plimpton & Esposito 120 Exchange Street, Suite120 Portland, ME 04101 Brenda M. Buchanan, Esq. Warren, Currier & Buchanan 57 Exchange Street Portland, ME 04101 Attorneys for defendants: Catherine R. Connors, Esq., (orally) Peter W. Culley, Esq. Christopher T. Roach, Esq. Pierce Atwood One Monument Square Portland, ME 04101-1110
FOOTNOTES******************************** {1} Plaintiffs are: Ashburnham Municipal Light Plant, Boylston Municipal Light Department, Braintree Electric Light Department, City of Chicopee Municipal Lighting Plant, Danvers Electric Division, Georgetown Municipal Light Department, Hingham Municipal Light Plant, City of Holyoke Gas and Electric Department, Houlton Water Company, Hudson Light & Power Department, Hull Municipal Lighting Plant, Ipswich Municipal Light Department, Littleton Electric Light & Water Department, Marblehead Municipal Light Department, Middleborough Gas and Electric Department, Middleton Municipal Light Department, New Hampshire Electric Cooperative, Inc., North Attleborough Electric Department, Paxton Municipal Light Department, Peabody Municipal Light Plant, Shrewsbury's Electric Light Plant, Sterling Municipal Light Department, Taunton Municipal Lighting Plant, Templeton Municipal Light Plant, Wakefield Municipal Light Department, West Boylston Municipal Lighting Plant, and Westfield Gas & Electric Light Department. {2} Defendants are: Maine Yankee Atomic Power Company, (in its role as agent for the primary owners of the Maine Yankee Atomic Power Station), Central Maine Power Company, Bangor Hydro-Electric Company, Maine Public Service Company, New England Power Company, The Connecticut Light and Power Company, Western Massachusetts Electric Company, Public Service Company of New Hampshire, Cambridge Electric Light Company, Montaup Electric Company, and Central Vermont Public Service Corporation. {3} The primary owners are the ten defendant utility companies. Together they own all of the shares in Maine Yankee. {4} The relevant provisions of the contracts are as follows: 1. Sale of Power: Sellers hereby agree to sell to Buyer and Buyer agrees to purchase from Sellers, during the term of this Contract, ___ percent of the capacity and net electrical output of the Unit ("Buyer's Percentage"), the portion of the Buyer's Percentage being sold by each Seller being the percentage thereof set forth opposite its name below. Buyer will, throughout the term of this Contract, be entitled and obligated to take Buyer's Percentage of the capacity and net electrical output of the Unit, at whatever level the Unit is operated or operable, whether more or less than 800,000 kilowatts electric. . . . . 3. Payment: Buyer shall pay to Sellers with respect to each calendar month commencing at the beginning of the term hereof and continuing during the term hereof, whether or not any power is generated by the Unit, an amount equal to Buyer's Percentage of the payment due with respect to such calendar month from all of the Sponsors to Maine Yankee pursuant to Section 7 of the Power Contracts as said Power Contracts may be amended from time to time by the parties thereto. If the 9.8% per annum rate of return on equity presently specified in the Power Contracts or any other portion of the Sponsors' payments due under the Power Contracts increases or decreases, the amounts paid hereunder will increase or decrease correspondingly. In the event Sellers, or any of them, are required to pay a sales tax on or with respect to the sale hereunder or a gross receipts tax on the receipts derived from the sale hereunder. Buyer shall reimburse Seller or Sellers required to pay the same. . . . . . . . 5. Operation and Maintenance of the Unit: Sellers will use their best efforts to cause Maine Yankee to operate and maintain the Unit in accordance with good utility practice under the circumstances and all applicable law, including the applicable provisions of the Atomic Energy Act of 1954, as amended, and of any licenses issued thereunder to Maine Yankee. Within the limits imposed by good utility practice under the circumstances and applicable law the Unit will be operated at its maximum capability and on a long hour use basis. Outages for inspection, maintenance, refueling and repairs and replacements will be scheduled in accordance with good utility practice. In the event of an outage, Sellers will cause Maine Yankee to use its best efforts to restore the Unit to service as promptly as practicable. . . . . 10. Interpretation: The interpretation and performance of this Contract shall be in accordance with and controlled by the law of the State of Maine.