Ashburnham Municipal Light Plant v. Maine Yankee Atomic Power Co.

1998 ME 270, 721 A.2d 651
CourtSupreme Judicial Court of Maine
DecidedDecember 18, 1998
StatusPublished
Cited by2 cases

This text of 1998 ME 270 (Ashburnham Municipal Light Plant v. Maine Yankee Atomic Power Co.) is published on Counsel Stack Legal Research, covering Supreme Judicial Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ashburnham Municipal Light Plant v. Maine Yankee Atomic Power Co., 1998 ME 270, 721 A.2d 651 (Me. 1998).

Opinion

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 Yan[653]*653kee 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 [654]*654arbitration 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.

[If 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) (1988). 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 States 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.

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1998 ME 270, 721 A.2d 651, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ashburnham-municipal-light-plant-v-maine-yankee-atomic-power-co-me-1998.