Connecticut Light & Power Co. v. NRG Power Marketing Inc.

497 F. Supp. 2d 352, 2007 U.S. Dist. LEXIS 52308, 2007 WL 2070238
CourtDistrict Court, D. Connecticut
DecidedJuly 20, 2007
Docket3:01CV02373(AWT)
StatusPublished

This text of 497 F. Supp. 2d 352 (Connecticut Light & Power Co. v. NRG Power Marketing Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Connecticut Light & Power Co. v. NRG Power Marketing Inc., 497 F. Supp. 2d 352, 2007 U.S. Dist. LEXIS 52308, 2007 WL 2070238 (D. Conn. 2007).

Opinion

RULING ON MOTION FOR SUMMARY JUDGMENT

THOMPSON, District Judge.

Plaintiff Connecticut Light & Power Company (“CL & P”) brings this action in a two-count complaint against NRG Power Marketing Inc. (“NRG”) asserting a claim for breach of contract and a claim for a declaratory judgment. NRG asserts four counterclaims: Count I, breach of contract for failure by CL & P to refund amounts paid by NRG for congestion charges; Count II, breach of contract for CL & P’s failure to pay amounts due and unilaterally *354 deducting those amounts from the amounts due under monthly invoices; Count III, breach of the implied covenant of good faith and fair dealing; and Count IV, unjust enrichment. The plaintiff has moved for summary judgment on all counts of the complaint and NRG’s counterclaims, and its motion is being granted.

I. Factual Background

The New England Power Pool (“NE-POOL”) “was created as a voluntary association of electric utilities in New England which established a single regional network to direct the operations of the major generating and transmission facilities in the region.” (Frederick W. Morris Aff. (Doc. No. 39), at Ex. A). The Independent System Operator for New England (“ISONE”) “was created to ensure competition in the generation and sale of electricity within NEPOOL.” Id. ISONE administers the NEPOOL Open Access Transmission Tariff (“NEPOOL OATT”), which contains regulations and rates, including a provision for congestion charges, and is approved by the Federal Energy Regulatory Commission (“FERC”). At all times pertinent to the complaint, congestion charges were socialized under the NEPOOL OATT, meaning that “[rjegardless of where the transmission congestion was occurring, those costs were assigned to transmission providers and customers on a pro rata basis depending on their share of total network load.” (Michael Pavo Aff. (Doc. No. 38), at ¶ 6). Section 24 of the NEPOOL OATT provides:

If limitations in available transmission capacity over any interface within the NEPOOL Control Area in any hour require that the System Operator dispatch resources out-of-merit, the System Operator shall determine for the affected area or areas the aggregate of the Congestion Costs for all such out-of-merit resources for the hour. The Congestion Costs for each hour in any month shall be paid as a transmission charge.... * * * * *
[T]he “Congestion Cost” of an out-of-merit resource for an hour means the product of (i) the difference between its Dispatch Price and the Energy Clearing Price for the hour, times (ii) the number of megawatt hours of out-of-merit generation produced by the resource for the hour.

(Robert A. Baumann Aff. (Doc. No. 40), at Ex. 1).

CL & P sought to enter into supply contracts to enable it to meet 50% of the total Standard Offer Service (“SOS”) Requirements of CL & P’s customers during the period from January 1, 2000 to December 31, 2003. 1 The Department of Public Utility Control (“DPUC”), in a decision dated July 9, 1999, approved CL & P’s “proposal to conduct a competitive solicitation process to procure 50% of the electricity supply required to serve the standard offer.” (Shields Aff., at Ex. 4).

J.P. Morgan & Co. (“J.P.Morgan”) conducted the bidding process as DPUC’s exclusive agent on behalf of CL & P. J.P. Morgan issued a Descriptive Memorandum and Request for Proposals which provided:

Winner(s) will be responsible for all requirements and costs associated with meeting the contracted-for portion of *355 CL & P’s Standard Offer Service Requirements and Back-Up Services, including energy, Installed Capability, Operable Capability, Operating Reserves, Automatic Generation Control, VAR support, tie benefit payments, losses, any congestion charges, any other future requirements of NEPOOL and the Independent System Operator (“ISO”) and any other future or current ISO administration charges as may apply to a load servicing entity[.]

(Shields Aff., at Ex. 5, Section IV.l). J.P. Morgan also held a conference with potential bidders on August 12, 1999. A request for proposals dated July 16, 1999 stated:

The selected Standard Offer Service Requirements eontractor(s), will be responsible for all requirements and costs associated with meeting the contrácted-for portion of CL & P’s Standard Offer Service Requirements and Back-up Services, including energy, Installed Capability, Operable Capability, Operating Reserves, Automatic Generation Control, VAR support, tie benefit payments, losses, any congestion charges and any other future requirements of NEPOOL and the Independent System Operator (“ISO”).

(Morris Aff., at Ex. G). Craig Ganter, NRG’s Rule 30(b)(6) witness, testified that, after the presentation, J.P. Morgan provided additional information concerning the congestion charges. “The clarification came from J.P. Morgan and in some subsequent e-mails or faxes or however they transmitted the answers to the questions that were raised at this technical conference, or they could have been raised subsequent to it because I believe they gave you an opportunity to ask them questions.” (Ganter Dep. (Morris Aff., at Ex. L), at 34). When asked, “[a]nd by ‘clarification’ you mean that NRG would not be responsible for congestion charges?”, Ganter responded, “[r]ight.” Id. at 33-34. The clarification Ganter was referring to is a communication from J.P. Morgan dated August 25, 1999, where the following question and answer appeared:

Question:
Section IV of the RFP transmission is addressed, what does it mean in the Descriptive Memorandum that CL & P will assist the bidders? What will CL & P actually do and be responsible for in making transmission arrangements? What charges will CL & P as a transmission provider actually be responsible for and what charges will the winning bidder be responsible for? Connecticut requires as part of the electric industry restructuring that a customer receives a bill that clearly identifies costs associated with Transmission and Distribution charges and charges that are associated with the price of energy at the meter[,] it is unclear from the RFP which entity will be responsible with the various charges associated Transmission, Distribution, etc. Please provide a complete list of all transmission components that CL & P will be responsible to pay and those that a bidder will have responsibility for.
Response:
The bidder is not responsible for obtaining transmission service over the CL & P transmission system. CL & P will be responsible for Regional Network Service (RNS) and associated Schedule 1 and 2 charges through the NEPOOL Tariff and Local Network Service (LNS) and associated Schedule 1 charges through the NU System Companies’ Open Access Transmission Service Tariff No. 9. In addition CL & P will be responsible for all ISO related charges assigned to transmission providers only. The bidder will be responsible for transmission charges to get power to the PTF

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497 F. Supp. 2d 352, 2007 U.S. Dist. LEXIS 52308, 2007 WL 2070238, Counsel Stack Legal Research, https://law.counselstack.com/opinion/connecticut-light-power-co-v-nrg-power-marketing-inc-ctd-2007.