Title: ENGIE Gas & LNG LLC v. Dep’t of Pub. Utils.

State: massachusetts

Issuer: Massachusetts Supreme Court

Document:

NOTICE:  All slip opinions and orders are subject to formal 
revision and are superseded by the advance sheets and bound 
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error or other formal error, please notify the Reporter of 
Decisions, Supreme Judicial Court, John Adams Courthouse, 1 
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SJC-12051 
SJC-12052 
 
 
ENGIE GAS & LNG LLC1  vs.  DEPARTMENT OF PUBLIC UTILITIES 
(and another case2). 
 
 
 
Suffolk.     May 5, 2016. - August 17, 2016. 
 
Present:  Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, 
& Hines, JJ.3 
 
 
 
Department of Public Utilities.  Practice, Civil, Review of 
order of Department of Public Utilities.  Electric 
Company. Public Utilities, Electric company, Judicial 
review.  Gas. Administrative Law, Judicial review, 
Rulemaking, Agency's authority, Rate regulation.  Statute, 
Construction. 
 
 
 
 
Civil actions commenced in the Supreme Judicial Court for 
the county of Suffolk on October 26 and November 2, 2015.  
 
 
1 ENGIE Gas & LNG LLC (ENGIE) filed its petition under its 
previous name, GDF Suez Gas NA LLC. 
 
 
2 Conservation Law Foundation  vs.  Department of Public 
Utilities. 
 
 
3 Justice Cordy participated in the deliberation on this 
case and authored this opinion prior to his retirement.  
Justices Spina and Duffly participated in the deliberation on 
this case prior to their retirements. 
                                                          
 
2 
 
 
The cases were reported by Cordy, J.  
 
 
 
Thaddeus A. Heuer (Adam P. Kahn & Jesse Harlan Alderman 
with him) for ENGIE Gas & LNG LLC. 
 
David K. Ismay for Conservation Law Foundation. 
 
Seth Schofield, Assistant Attorney General, for the 
Attorney General. 
 
Thomas H. Hayman, Special Assistant Attorney General 
(Francis R. Powell, Special Assistant Attorney General, with 
him) for the Department of Public Utilities. 
 
Cheryl M. Kimball & Matthew A. Sanders, for NSTAR Electric 
Company & others, amici curae, submitted a brief. 
 
 
 
CORDY, J.  These consolidated appeals are before us on a 
single justice's reservation and report of challenges made to an 
order of the Department of Public Utilities (department).  Those 
challenges raise the question of the department's authority to 
review and approve ratepayer-backed, long-term contracts entered 
into by electric distribution companies for additional natural 
gas pipeline capacity in the Commonwealth pursuant to G. L. 
c. 164, § 94A, which requires gas and electric companies to 
receive departmental approval for any contract for the purchase 
of gas or electricity lasting longer than one year.   
 
The plaintiffs, ENGIE Gas & LNG LLC and Conservation Law 
Foundation, contend that the order amounted to improper 
rulemaking in violation of the Administrative Procedure Act, 
G. L. c. 30A.  They also argue that the department's 
determination that it has authority pursuant to G. L. c. 164, 
§ 94A, to approve such contracts constitutes an error of law 
3 
 
because it contravenes G. L. c. 164, § 94A, as amended through 
St. 1997, c. 164 (restructuring act).4   
 
We disagree that the order of the department is an 
improperly promulgated rule or regulation.  We nevertheless 
reach the statutory question presented by the plaintiffs, and 
conclude that the order is invalid in light of the statutory 
language and purpose of G. L. c. 164, § 94A, as amended by the 
restructuring act, because, among other things, it would 
undermine the main objectives of the act and reexpose ratepayers 
to the types of financial risks from which the Legislature 
sought to protect them.5,6 
 
4 Statute 1997, c. 164 (restructuring act), discussed infra, 
restructured the electric utility industry, transforming "it 
from a government-regulated monopoly, to 'a framework under 
which competitive producers [would] supply electric power and 
customers [would] gain the right to choose their electric power 
supplier.'"  Northeast Energy Partners, LLC v. Mahar Regional 
Sch. Dist., 462 Mass. 687, 695 (2012), quoting St. 1997, c. 164, 
§ 1 (c) (ii).  Importantly, the restructuring act separated the 
three utility services of generation, transmission, and 
distribution, and deregulated the generation component in the 
interests of competition.  Northeast Energy Partners, LLC, supra 
at 696.  Companies providing transmission and distribution 
services remain regulated by the State.  Id.    
 
 
5 Because we determine that the Department of Public 
Utilities (department) erred in interpreting its authority under 
G. L. c. 164, § 94A, we need not reach the question of Federal 
law presented by ENGIE. 
 
 
6 We acknowledge the amicus briefs submitted by the Attorney 
General and by NSTAR Electric Company and Western Massachusetts 
Electric Company, each doing business as Eversource Energy, and 
Massachusetts Electric Company and Nantucket Electric Company, 
each doing business as National Grid.  
                                                          
 
4 
 
 
1.  Background.  The department regulates the rates that 
both electric distribution companies7 and local distribution 
natural gas companies8 may charge their customers (ratepayers).  
G. L. c. 164, § 94A.  See Fitchburg Gas & Elec. Light Co. 
v. Department of Pub. Utils., 460 Mass. 800, 801 
(2011); Attorney Gen. v. Department of Pub. Utils., 453 Mass. 
191, 192 (2009).   
 
In 2015, the Department of Energy Resources (DOER) filed a 
petition asking the department to investigate the means by which 
new natural gas delivery capacity9 might be added to the New 
 
 
7 An electric distribution company is the "arm of a utility 
responsible for transmitting electricity from a generation 
facility or power grid to the end consumer."  Franklin W. Olin 
College Of Eng'g v. Department of Telecomm. & Energy, 439 Mass. 
857, 860 n.6 (2003).  See G. L. c. 164, § 1 (defining 
"[d]istribution company").  Electric distribution companies  
provide two types of services:  supply services and distribution 
services.  See NSTAR Elec. Co. v. Department of Pub. Utils., 462 
Mass. 381, 381 (2012). 
 
 
8 Local gas distribution companies "mak[e] and sell[] or 
distribut[e] and sell[]  . . .  gas within the commonwealth."  
See G. L. c. 164, § 1 (defining "[g]as company"). 
 
 
9 Prior to the Federal restructuring of interstate pipeline 
service by the Federal Energy Regulatory Commission (FERC) (see 
FERC Order No. 639, 18 C.F.R. Part 284 [Apr. 8, 1992]), gas and 
the pipeline space, or "capacity," necessary to deliver it were 
"bundled," or sold together.  Once "unbundled," the department 
recognized the distinction between the two elements of 
interstate gas services as "blurred, at best" and established 
that contracts for both would be similarly approved as 
"contract[s] for the purchase of gas" pursuant to G. L. c. 164, 
§ 94A, under the same "public interest standard."  D.P.U. 94-
                                                                                                                                                                                           
5 
 
England market in order to mitigate price volatility experienced 
by ratepayers in the Commonwealth, especially in the winter 
months.  See D.P.U. 15-37 (Oct. 2, 2015).  The DOER specifically 
asked whether the department, pursuant to its authority under 
G. L. c. 164, § 94A, could approve long-term contracts10 by 
Massachusetts electric distribution companies for the purchase 
and resale of interstate natural gas pipeline capacity.  The 
DOER stated that the ultimate goal of such purchases would be to 
lower "gas constraint-driven high prices" for electricity in New 
England by lowering the prices, particularly in the wintertime, 
of wholesale electricity across the region.   
 
In support of its request, the DOER asserted that gas 
pipeline constraints have caused unreasonably high winter 
electric prices in New England.  Unlike local natural gas 
distribution companies, which regularly contract for gas 
capacity, electric generators that use natural gas to produce 
electricity11 are generally unwilling or unable to enter into 
long-term contracts to secure firm gas capacity.  For these 
generators, there is added risk for such contracting because 
174-A, at 22-26 (Mar. 15, 1994). We therefore use the terms 
"gas" and "gas capacity" interchangeably.   
 
 
10 By the terms of G. L. c. 164, § 94A, any contract in 
excess of one year constitutes a long-term contract. 
 
 
11 Generation is "the act or process of transforming other 
forms of energy into electric energy or the amount of electric 
energy so produced."  G. L. c. 164, § 1. 
                                                                                                                                                                                           
6 
 
there is no means by which they can be reasonably assured of 
receiving enough revenue to cover the cost of securing the gas 
capacity over the course of each year.  Pipeline companies, on 
the other hand, are not willing to build new pipeline capacity 
without having long-term contracts in place.  Thus, pipeline 
companies do not have sufficient assurances such that they are 
willing to build additional pipeline capacity for natural gas-
fired electric generators, despite the increasing natural gas 
demand for heating and as a source of supply for electric power.  
The DOER characterized this situation as a "mismatch" of needs 
and incentives that requires a "solution."   
 
Under the DOER's proposal, (1) the department would 
authorize, pursuant to G. L. c. 164, § 94A, electric 
distribution companies to enter into contracts to purchase gas 
pipeline transportation capacity to be funded by the 
Commonwealth's ratepayers through rates set and approved by the 
department; (2) the pipeline owners (which in this case will 
include affiliates of electric distribution companies) will use 
those transportation contracts to help finance the construction 
of new gas pipeline capacity in the region; (3) after the 
pipelines are expanded, the electric distribution companies will 
release (resell) their contracted-for capacity to electric 
7 
 
generators or "into the market";12 and (4) the release of that 
capacity will increase gas supply and thus lower the wholesale 
price of gas and electricity.  
 
 
Noting that the question was one of first impression, the 
DOER asked the department to determine whether "(1) there is an 
innovative mechanism for electric distribution companies . . . 
or other suitable parties to secure new, incremental gas 
delivery capacity into the region to the benefit of electric 
ratepayers; (2) review for cost-recovery of [electric 
distribution company] contracts for natural gas capacity by the 
[d]epartment under G. L. c. 164, § 94A . . . is appropriate; and 
(3) the standard of review the [d]epartment would apply to 
contracts submitted for approval under that section should be 
different."  The DOER stated that ratepayer-funded gas capacity 
contracts entered into by electric distribution companies would 
solve the "mismatch" problem by providing sufficient financial 
assurance to pipeline companies to build new pipelines and 
infrastructure in order to provide gas to natural gas-fired 
electric generators.   
 
12 Citing to Order Accepting and Suspending Tariff Record 
and Establishing a Technical Conference, 154 FERC, ¶ 61,269 
(Mar. 31, 2016), the Attorney General, in her brief, points out 
that in order to release the contracted-for capacity to the 
electric generation companies, the electric distribution 
companies would first need to obtain a waiver from FERC, because 
Federal law otherwise prohibits resellers from directing their 
contracted capacity rights to a particular party unless FERC 
grants a waiver.  See also 18 C.F.R. § 284.8 (2015).   
                                                          
 
8 
 
 
In response to the petition of the DOER, the department 
opened an investigation into the means by which new natural gas 
capacity might be added to the New England market, including 
measures that electric distribution companies might pursue.  
After considering input from stakeholders, including written 
comments submitted by the plaintiffs, the department issued 
D.P.U. 15-37, entitled, "Order Determining Department Authority 
Under G. L. c. 164, § 94A" (order).  The department determined 
that the plain language of § 94A provides the department with 
the statutory authority to approve gas capacity contracts 
entered into by electric distribution companies, so long as the 
department first determines that such long-term contracts are in 
the public interest.  D.P.U. 15-37, at 19, 43.  The department 
further concluded that it could properly allow cost recovery for 
the contracts, including the cost of building the necessary 
pipeline infrastructure, through electric distribution 
rates.  Id. at 12, 46.  The department additionally determined 
that its findings were consistent with the restructuring act 
because the contracts entered into by the electric distribution 
companies would not result in the companies' reentry to 
producing, manufacturing, or generating electricity at 
wholesale, as contemplated by the restructuring act.  Id. at 26-
27. 
9 
 
  
The order further outlined the filing requirements and 
standard of review applicable to future proceedings seeking 
approval of ratepayer-backed contracts for gas capacity entered 
into by electric distribution companies.  Id. at 36, 44-45.  
Since issuing the order, the department has docketed three 
petitions by electric distribution companies for the approval of 
such contracts; however, none has been approved at this time.  
The contemplated contracts are for a term of twenty years.   
 
In October and November, 2015, the plaintiffs filed 
separate petitions in the Supreme Judicial Court for Suffolk 
County pursuant to G. L. c. 25, § 5, asking that the order be 
set aside on the ground that it is based on an erroneous 
interpretation of law.  A consolidated hearing was held before 
the single justice, who denied the motions for judgment of 
default and reserved and reported the matters to the full 
court.13    
 
2.  Propriety of appeal.  We first consider whether this 
appeal is properly before us.  The plaintiffs ask the court to 
review the department's order pursuant to G. L. c. 25, § 5, 
which authorizes "an appeal as to matters of law from any final 
decision, order or ruling."  The department argues, however, 
 
13 The plaintiffs also filed motions to stay the 
department's order, D.P.U. 15-37 (Oct. 2, 2015) (order), which 
would have halted the contract review process.  The motions were 
denied without prejudice.   
                                                          
 
10 
 
that the order is not the product of an adjudicatory proceeding, 
nor did it adjudicate the rights of the plaintiffs; therefore, 
it is not appealable under § 5.  See Providence & Worcester R.R. 
v. Energy Facilities Siting Bd., 453 Mass. 135, 140 (2009) ("A 
decision is 'final' for purposes of taking an immediate appeal 
if it completely adjudicates the rights of the parties, leaving 
nothing further to be decided").  
 
We previously have held that where, as here, an agency 
determines that it has statutory authority to act, but has not 
yet exercised that authority, "such a decision is not 'final' 
for the purposes of judicial review under G. L. c. 25, 
§ 5."  Id.  Nevertheless, we reach the merits of the question of 
law submitted to us by the parties because "the case has been 
fully briefed on the merits, . . . there is a public interest in 
obtaining a prompt answer to the question, and . . . the answer 
. . . is reasonably clear."  Id., quoting Brown v. Guerrier, 390 
Mass. 631, 632 (1983).14 
 
3.  Discussion.  General Laws c. 164, § 94A, provides in 
relevant part that "[n]o gas or electric company shall hereafter 
enter into a contract for the purchase of gas or electricity 
covering a period in excess of one year without the approval of 
the department, unless such contract contains a provision 
 
14 In light of this conclusion, we do not reach the 
plaintiffs' argument that the order was issued in violation of 
the Administrative Procedure Act, G. L. c. 30A.   
                                                          
 
11 
 
subjecting the price to be paid thereunder for gas or 
electricity to review and determination by the department in any 
proceeding brought under [§ 93 or 94]."    
 
In its order, the department concluded that the plain 
language of § 94A provides it with the authority to review and 
approve "the purchase of gas or electricity" by "gas or electric 
companies."  D.P.U. 15-37, at 19.  It reasoned that the word 
"'or' . . . is used to list the entities (gas and electric 
companies) and the products (gas and electric purchases) and 
does not limit one type of company or one type of product."  Id.  
Rather, the department ruled that the provision grants it broad 
"authority over both electric and gas distribution companies, 
without direct limiting language."  Id.  The department further 
concluded that because the meaning of the statute could be 
discerned from the plain language, the department need not 
"consider legislative history or doctrines of statutory 
construction."  Id.  Moreover, the department found that the 
restructuring act did not present an impediment to electric 
distribution companies contracting for natural gas capacity 
subject to department review and approval because the framework 
established by the department would not result in the electric 
distribution companies' reentry to producing, manufacturing, or 
generating electricity for sale at wholesale, as contemplated by 
the restructuring act.  Id. at 27.  See St. 1997, c. 164, § 193.  
12 
 
 
The plaintiffs counter that this interpretation of § 94A 
misapprehends the rules of statutory construction and is 
inconsistent with the larger statutory context of c. 164, as 
well as legislative policymaking embodied in the restructuring 
act.   
 
a.  Standard of review.  We review the validity of a policy 
adopted by an agency charged with implementing and enforcing 
State statutes under the same two-part framework used to 
determine whether regulations promulgated by an agency are 
valid.  Franklin Office Park Realty Corp. v. Commissioner of the 
Dep't of Envtl. Protection, 466 Mass. 454, 459-460 (2013).  
First, we employ "the conventional tools of statutory 
interpretation" to determine "whether the Legislature has spoken 
with certainty on the topic in question."  Goldberg v. Board of 
Health of Granby, 444 Mass. 627, 632–633 (2005).  Where the 
court determines that a statute is unambiguous, we will reject 
any agency interpretation that does not give effect to the 
Legislative intent.  Franklin Office Park Realty Corp., supra at 
460.   
 
If we conclude that "the Legislature has not directly 
addressed the issue and the statute is capable of more than one 
rational interpretation, we proceed to determine whether the 
agency's interpretation may be reconciled with the governing 
legislation" (quotation and citation omitted).  Biogen IDEC MA, 
13 
 
Inc. v. Treasurer & Receiver Gen., 454 Mass. 174, 187 (2009).  
We defer to the agency's interpretation insofar as it is 
reasonable.  Franklin Office Park Realty Corp., 466 Mass. at 
460.  Statutory interpretation, however, is ultimately the duty 
of the courts, and the "principle of according weight to an 
agency's discretion . . . is one of deference, not abdication, 
and this court will not hesitate to overrule agency 
interpretations of statutes or rules when those interpretations 
are arbitrary or unreasonable" (quotations and citation 
omitted).  Moot v. Department of Envtl. Protection, 448 Mass. 
340, 346 (2007), S.C., 456 Mass. 309 (2010).   
 
Our interpretation is not limited only to determining a 
statute's "simple, literal or strict verbal meaning" but also 
considers a statute's "development, [its] progression through 
the legislative body, the history of the times, prior 
legislation, contemporary customs and conditions and the system 
of positive law of which they are part . . ."  Kain 
v. Department of Envtl. Protection, 474 Mass. 278, 286 (2016), 
quoting Oxford v. Oxford Water Co., 391 Mass. 581, 588 (1984).   
 
Applying these rules to the statutory language at issue, we 
conclude that the department erred in determining that § 94A, as 
amended by the restructuring act, authorizes the department to 
review and approve ratepayer-backed, long-term contracts for gas 
capacity entered into by electric distribution companies. 
14 
 
 
b.  Section 94A.  The parties do not dispute that § 94A has 
traditionally been construed by the department to apply to gas 
company purchases of gas and electric company purchases of 
electricity.  Nonetheless, the department argues, nothing in the 
plain language of the provision prohibits the department from 
approving long-term contracts by electric distribution companies 
for gas.15  Moreover, the department insists that because the 
language is unambiguous, the court need not employ the usual 
canons of statutory construction.   
 
The plaintiffs ask the court to read § 94A distributively 
in accordance with the canon reddenda singula singulis, also 
known as the rule of the last antecedent, see Ross, A Rule of 
Last Resort:  A History of the Doctrine of the Last Antecedent 
in the United States Supreme Court, 39 Sw. L. Rev. 325, 325 
 
15 In its order, the department provided a single basis for 
its authority to approve long-term gas contracts by electric 
distribution companies:  the language of G. L. c. 164, § 94A.  
See D.P.U. 15-37, at 14, 17-21.  See id. at 15 n.16 (expressly 
rejecting declining to address other potential bases for 
authority).  On appeal, however, the department provides several 
other potential bases of statutory authority for its conclusion, 
including G. L. c. 164, §§  69I, 76, 93, and 94.  We do not 
specifically consider these statutory bases, as they were not 
relied on in the department's order, and the court will not 
otherwise "supply a reasoned basis for the [department’s] action 
that the agency itself has not given" (citation omitted), NSTAR 
Elec. Co. v. Department of Pub. Utils., 462 Mass. at 387.  We 
nonetheless reject the department's arguments with respect to 
these provisions insofar as we determine that the over-all 
statutory scheme of G. L. c. 164 supports the plaintiffs' 
interpretation of § 94A as prohibiting the type of contracts 
contemplated by the department's order.  
                                                          
 
15 
 
(2009), which states that "[w]here a sentence contains several 
antecedents and several consequents, courts read them 
distributively and apply the words to the subjects which, by 
context, they seem most properly to relate."  2A N.J. Singer & 
S. Shambie, Statutes and Statutory Construction § 47:26 (7th ed. 
2014).  Applying this canon to the text, the plaintiffs argue 
that the parallel uses of the word "or" in the first sentence of 
§ 94A can be read only in a manner that authorizes the 
department to approve electric company contracts for the 
purchase of electricity, and gas company contracts for the 
purchase of gas.  
 
The department argues, however, that we must disregard this 
maxim because the court uses aids of statutory construction only 
where the words of the statute are ambiguous.  This argument 
misapprehends the task of statutory interpretation.  The court 
does not determine the plain meaning of a statute in isolation, 
but rather concludes that a statute is unambiguous only after 
"consider[ing] the specific language of a statute in connection 
with the statute as a whole and in consideration of the 
surrounding text, structure, and purpose of the Massachusetts 
act," Custody of Victoria, 473 Mass. 64, 73 (2015), in light of 
the "standard rules of statutory construction and grammar" 
(citation omitted).  Rowley v. Massachusetts Elec. Co., 438 
Mass. 798, 802 (2003).   
16 
 
 
Whether the rule of the last antecedent is characterized as 
a rule of construction or one of grammar, it is the type of 
intrinsic aid we regularly use to discern the meaning of a 
statute.  Although application of the rule here supports the 
plaintiffs' reading of the statute as prohibiting the 
department's review and approval of gas capacity contracts by 
electric distribution companies, it is not dispositive, because 
the rule "is not an absolute and can assuredly be overcome by 
other indicia of meaning."  Barnhart v. Thomas, 540 U.S. 20, 26  
(2003). 
 
It is true, as the department points out, that the language 
of § 94A does not expressly forbid it from reviewing and 
approving contracts by electric distribution companies for gas.  
Nor, however, does the language clearly permit such activity.  
See Entergy Nuclear Generation Co. v. Department of Envtl. 
Protection, 459 Mass. 319, 331 (2011) ("Where . . . the scope of 
agency authority is at issue, we must determine whether the 
agency is acting within the powers and duties expressly 
conferred upon it by statute and such as are reasonably 
necessary to carry out its mission" [quotation and citation 
omitted]).  Thus, to the extent that "the language is not 
conclusive as to the Legislature's intent, we may seek guidance 
from the legislative history."  Commonwealth v. Garrett, 473 
Mass. 257, 260 (2015).  Moreover, taking this history together 
17 
 
with the development of § 94A and its place with the larger 
statutory framework of G. L. c. 164, we conclude that the 
Legislature did not intend to authorize the department to 
approve the contracts contemplated in its order, but rather 
intended, with limited exceptions, to regulate the gas and 
electric utilities differently.    
 
We begin by describing G. L. c. 164, § 94A, as it was 
originally enacted in 1926.  The provision stated:  "No electric 
company shall hereafter enter into a contract for the purchase 
of electricity covering a period in excess of three years 
without the approval of the department . . . ."  St. 1926, 
c. 298.  Section 94A was enacted to address concerns that newly 
consolidated "interlocking companies" would enter into contracts 
"for the interchange of electricity," and that the department 
might have to accept those non-arms' length transactions in 
later-filed electricity rate cases.  See 1926 House Doc. No. 
153, at 2.   
 
Concerns remained, however, about how the expansion of 
holding companies and the consolidation of electric utilities 
under them would impact ratepayers.  In light of these concerns, 
the Legislature created a special commission to investigate the 
control and conduct of public utilities in the Commonwealth.  
See Report of the Special Commission on Control and Conduct of 
Public Utilities (commission), 1930 House Doc. No. 1200, at 7 
18 
 
(1930 special report).  Unlike a similar report prepared in 1925 
that recommended the enactment of § 94A, but did not reference 
gas companies in the relevant discussion, see 1926 House Doc. 
No. 153, at 2, the commission was instructed to investigate both 
electric and gas companies.  1930 special report, supra at 7-9.   
The special report reflects apprehensions about the 
consolidation of independent operating companies, and how those 
consolidations might unjustly increase ratepayer cost for gas 
and electricity.  Id. at 15-16, 34, 46-47, 52-53, 68-69, 240-
241.  
 
The report informs our understanding of the history of 
§ 94A, as it reveals why the Legislature sought to extend St. 
1926, c. 298, to gas companies:  the commission predicted that 
the same concerns about electric companies would arise with 
respect to gas companies as well.  Id. at 41-42.  Finding that 
St. 1926, c. 298, provided "valuable protection against 
excessive charges for electricity," the report recommended 
extending the existing statute to cover gas company contracts 
for the purchase of gas.  See id. at 67-68.  Importantly, the 
special report did not appear to contemplate gas company 
purchases of electricity or electric company purchases of gas.  
To the contrary, the text of the special report supports the 
plaintiffs' position that the electric and gas industries were 
regulated separately.  See, e.g., id. at 74 ("There is no 
19 
 
necessary connection between the two kinds of business"); id. at 
15 n.2, citing G. L. c. 164, §§ 22, 23 ("An electric company 
could not deal in gas under any circumstances").  The 
recommended bill was enacted in May, 1930, and appears in 
substantially the same form today.  Compare St. 1930, c. 342, 
with G. L. c. 164, § 94A.  Following the 1930 amendment, § 94A 
provided:  "No gas or electric company shall hereafter enter 
into a contract for the purchase of gas or electricity covering 
a period in excess of two years without the approval of the 
department . . ." (emphasis supplied).  St. 1930, c. 342.16  
 
The department and the plaintiffs offer competing 
interpretations of this history.  The department argues that 
this history does not support any finding of legislative intent 
to restrict the commodities to be purchased by utilities, or the 
types of contracts that would be subject to department review, 
but rather only to limit the power of the holding companies that 
had come to dominate the gas and electric industries.  Thus, in 
the department's view, the concerns that prompted the amendment 
arose from a desire to protect ratepayers from excessive rates, 
with no indication that the department should be limited in its 
 
16 The statute was further amended in 1941 to change the 
contract period from two years to one year.  St. 1941, c. 400.  
At the time of the 1930 amendment, the Legislature had already 
used the "gas or electric company" or "gas or electricity" 
construction numerous times elsewhere in G. L. c. 164.  G. L. 
(Ter. Ed.) c. 164 (1932), §§ 5, 11, 15-18, 30, 34, 42-43, 45-46, 
55-56, 58, 60-69, 78-79, 81-84, 89, 92-96, 116-117, 124-125.   
                                                          
 
20 
 
ability to review any type of commodity contract by any type of 
utility company.   
 
The plaintiffs disagree, and argue that the introduction of 
the new language in the 1930 amendment did not alter or expand 
the meaning of existing and unchanged statutory language because 
the Legislature did not express any intent to do so.  See Foster 
v. Group Health Inc., 444 Mass. 668, 674 (2005) ("provisions of 
[an] amendatory act [are] to be considered together with 
provisions of [the] original act").  Thus, they argue, the 1930 
amendment was not made with the intent to expand electric 
company contracting authority to include the purchase of gas, 
but rather to expand the department authority to regulate gas 
company contracts for gas in addition to electric company 
contracts for electricity.   
 
We agree, and conclude that the history and development of 
the statute supports the plaintiffs' distributive reading of the 
terms "gas or electric."  In light of the history, as well as 
the different regulatory treatment of gas and electric 
utilities, it is apparent that the addition of the term "gas" to 
§ 94A was not meant to expand the department's authority to 
review any type of commodity contract by any type of utility, 
but rather to ensure that gas companies were not free to engage 
in the types of transactions that might harm ratepayers when 
electric companies were prohibited from doing so.   
 
21 
 
 
Moreover, our conclusion that the Legislature intended to 
regulate gas and electric utilities differently is supported by 
other language in the statute, including the express, non-
overlapping definitions of "gas company" and "electric company," 
even if the corporate entity engaging in one of those defined, 
regulated businesses is "subsequently authorized" to also 
perform the other function.  See G. L. c. 164, §§ 1, 8A.17  
 
17 General Laws c. 164, § 1, defines an electric company as 
follows: 
 
"a corporation organized under the laws of the commonwealth 
for the purpose of making by means of water power, steam 
power or otherwise and for selling, transmitting, 
distributing, transmitting and selling, or distributing and 
selling, electricity within the commonwealth, or authorized 
by special act so to do, even though subsequently 
authorized to make or sell gas; provided, however, that 
electric company shall not mean an alternative energy 
producer; provided further, that a distribution company 
shall not include an entity which owns or operates a plant 
or equipment used to produce electricity, steam and chilled 
water, or an affiliate engaged solely in the provision of 
such electricity, steam and chilled water, where the 
electricity produced by such entity or its affiliate is 
primarily for the benefit of hospitals and nonprofit 
educational institutions, and where such plant or equipment 
was in operation before January 1, 1986; and provided 
further, that electric company shall not mean a corporation 
only transmitting and selling, or only transmitting, 
electricity unless such corporation is affiliated with an 
electric company organized under the laws of the 
commonwealth for the purpose of distributing and selling, 
or distributing only, electricity within the commonwealth." 
 
 
A gas company is defined as "a corporation organized for 
the purpose of making and selling or distributing and selling, 
gas within the commonwealth, even though subsequently authorized 
to make or sell electricity; provided, however, that gas company 
shall not mean an alternative energy producer."  Id.   
                                                          
 
22 
 
Indeed, the department's own order acknowledges the "different 
regulatory treatment of a [local distribution gas company] and 
[electric distribution companies]."  D.P.U. 15-37, at 43.   
 
 The larger statutory context in which the term "gas or 
electric" is used extensively in G. L. c. 164 is also 
instructive.  For example, G. L. c. 164, § 116, gives a duly 
authorized officer or employee of "a gas or electric company 
. . . [the right to] enter any premises supplied with gas or 
electricity by such company for the purpose of examining or 
removing the meters, pipes, wires, fittings and works for 
supplying or regulating the supply of gas or electricity and of 
ascertaining the quantity of gas or electricity consumed or 
supplied" (emphasis added).  In an emergency, fire and police 
officers must allow such an authorized representative "of a gas 
or electric company . . . to enter any area or building in order 
to shut off the gas or electricity, which is or may become a 
source of danger to the public" (emphasis added).  G. L. c. 164, 
§ 116A.  See G. L. c. 164, § 93 (granting department authority, 
on notice and investigation following written complaint "either 
as to the quality or price of the gas or electricity sold and 
delivered, . . . [to] order any reduction or change in the price 
or prices of gas or electricity or an improvement in the quality 
thereof" [emphasis added]); G. L. c. 164, § 76A (department has 
authority to supervise affiliate of both gas and electric 
23 
 
companies with respect to extent of their activities that 
"affect the operations of" any gas or electric company they are 
affiliated with, directing that "[s]uch relations, transactions 
and dealings, including any payments by a gas or electric 
company to such an affiliated company for services or materials 
and supplies which enter into the manufacture, distribution or 
sale of gas or electricity, shall be subject to review and 
investigation by the department in any proceeding brought under 
[G. L. c. 164, §§ 93-94]" [emphasis added]).   
 
The department, however, argues that reading the words "gas 
or electricity" distributively throughout G. L. c. 164 would 
lead to absurd results that could not have been intended by the 
Legislature.  The department notes that it may authorize an 
electric company to "engage in the business of a gas company" 
and a gas company "to engage in the business of an electric 
company" if it "deems the public convenience will be promoted 
thereby" pursuant to G. L. c. 164, § 8A.  Thus, the department 
argues, if the court were to adopt the distributive reading of 
c. 164 suggested by the plaintiffs, a gas company authorized to 
engage in the sale of electricity pursuant to G. L. c. 164, 
§ 8A, for example, would not be required to report accidents 
caused by electricity it supplied where someone was killed (see 
G. L. c. 164, § 95); would be unable to enter any area or 
building to shut off electricity which is or may become a source 
24 
 
of danger to the public (see G. L. c. 164, § 116A); and would be 
unable to stop service to a person who failed to pay his or her 
electricity bill (see G. L. c. 164, § 124).   
 
These arguments are not persuasive.  The "absurdities" 
identified by the department are easily resolved by consistently 
treating "gas companies" and "electric companies" separately 
throughout c. 164, as required by their statutory definitions.  
Moreover, if a gas company were to amend its corporate charter 
and obtain approval from the department under G. L. c. 164, 
§ 8A, to also engage in the business of an electric company, as 
the department hypothesizes, it would plainly also meet the 
statutory definition of "electric company" pursuant to G. L. 
c. 164, § 1, and so would expressly be subject to the statutory 
provisions cited to by the department. 
 
A final factor supports our conclusion that the Legislature 
did not intend to authorize the department to approve electric 
distribution company contracts for gas capacity and vice versa.  
Although we defer to an agency's reasonable interpretation of a 
statute it is charged with enforcing, "[t]he appropriate weight 
(of such interpretation), in a particular case, will depend on a 
variety of factors, including whether the agency participated in 
the drafting of the legislation . . . , whether the 
interpretation dates from the enactment of the legislation, and 
whether it has been consistently applied" (citations 
25 
 
omitted).  Board of Educ. v. Assessor of Worcester, 368 Mass. 
511, 515-516 (1975). 
 
 In this case, we have not located (nor has the department 
identified) any instance of the department approving, pursuant 
to § 94A, a contract for electricity by a gas company, or a 
contract for gas by an electric company in the eighty-six year 
period since the 1930 amendment.  Moreover, before issuing the 
order, the department had never interpreted § 94A to authorize 
its approval of such contracts; to the contrary, its prior 
orders suggest that the department also had adopted a 
distributive construction of the statute's language with the 
term gas relating to gas companies and the term electricity 
relating to electric companies.  See, e.g., D.P.U. 95-67, at 21 
(Oct. 10, 1995) ("G. L. c. 164, § 94A, requires gas and electric 
companies to file for [d]epartment approval all contracts for 
the purchase of gas or electricity of a duration greater than a 
year" [emphasis added]); D.T.E. 02-50, at 2 (Sept. 23, 2002) 
(same); D.P.U. 86-247, at 7 (Dec. 4, 1987) ("Under [§] 94A, any 
electric company who contracts for the purchase of electricity 
for a period in excess of one year must submit the contract for 
review").  The department's order here thus represents a 
significant departure from its own history of administering 
26 
 
§ 94A and its separate treatment of the gas and electric 
utilities.18   
 
In light of these considerations, we conclude that the 
department erred in interpreting § 94A as authorizing it to 
review and approve ratepayer-backed, long-term contracts by 
electric distribution companies for gas capacity (or contracts 
by gas companies).    
 
c.  Restructuring act of 1997.  We further conclude that 
the department's interpretation of § 94A is untenable in light 
of the 1997 restructuring act, which amended G. L. c. 164 ("An 
Act relative to restructuring the electric utility industry in 
the Commonwealth, regulating the provision of electricity and 
other services, and promoting enhanced consumer protections 
therein").  "Any judicial review of agency action embodies the 
principle that an agency has no inherent authority beyond its 
enabling act and therefore it may do nothing that contradicts 
such legislation."  Globe Newspaper Co. v. Beacon Hill 
Architectural Comm'n, 421 Mass. 570, 586 (1996).   For the 
 
18 See also 220 Code Mass. Regs. §§ 11.00 (2016) 
(department's rules governing restructuring of electric industry 
silent as to whether restructured electric distribution company 
being able to purchase gas or be compensated therefor); D.P.U. 
94-174-A, at 1-2 (Mar. 15, 1994) (in designing and establishing 
"single standard based on the public interest" to be applied to 
all gas commodity contracts -- for both the gas itself, and for 
the pipeline capacity necessary to transport it -- the 
department entertained comments only from, included analysis 
only regarding, and designed the standard only for, gas 
companies).   
                                                          
 
27 
 
reasons discussed herein, we determine that the department's 
approval of ratepayer-backed, long-term contracts by electric 
distribution companies for gas capacity contradicts the 
fundamental policy embodied in the restructuring act, namely the 
Legislature's decision to remove electric distribution companies 
from the business of electric generation.   
 
 Prior to the passage of the restructuring act, electric 
companies were vertically integrated monopolies, controlling the 
generation, transmission, and distribution of electricity.  
See Northeast Energy Partners, LLC v. Mahar Regional Sch. Dist., 
462 Mass. 687, 695 (2012).  Recognizing that "the interests of 
consumers [could] best be served by an expedient and orderly 
transition from regulation to competition in the generation 
sector consisting of the unbundling of prices and services and 
the functional separation of generation services from 
transmission and distribution services," St. 1997, c. 164, 
§ 1 (m), the Legislature enacted the act to separate these three 
utility services and open the supply of generation services to 
competition.  Northeast Energy Partners, LLC, supra at 696-697.  
This functional separation of services, which limited a 
"'company's ability to provide itself an undue advantage in 
buying or selling services in competitive markets,' was regarded 
as a necessary first step in moving toward 'a fully competitive 
28 
 
generation market based on customer choice.'"  Id. at 697, 
quoting D.P.U. 95–30, at 16 (Aug. 16, 1995). 
 
The restructuring act also removed "the business of 
producing, manufacturing, or generating electricity," from the 
department’s supervisory authority.  See St. 1997, c. 164, 
§§ 189, 193.  Following the transfer by Commonwealth utilities 
of all generation facilities to separate ownership, no portion 
of the business of a generating company could "be subject to 
regulation as a public utility or as an electric company."  St. 
1997, c. 164, § 193; G. L. c. 164, § 1A (e). 
 
Additionally, by deregulating the generation component of 
the electric utility industry, electric distribution companies 
were discharged from their duties to plan for, build, and 
operate or profit from the making and selling of electricity.  
Instead, the business of electric distribution companies is to 
plan for, build, and operate distribution infrastructure (e.g., 
poles, wires, and substations); deliver electricity; and be 
compensated for doing so.  See, e.g, G. L. c. 164, § 1, inserted 
by St. 1997, c. 164, § 187 (defining "[d]istribution company," 
"[d]istribution service," and "[d]istribution facility").   
 
Recognizing the circumscribed role of electric distribution 
companies after the restructuring act, the department exempted 
them from their prerestructuring act business obligations 
relating to fuel management and power planning.  First, in 1998, 
29 
 
the department acknowledged that the electric distribution 
companies would no longer be buying fuel for power plants or 
recovering from ratepayers the cost of fuel.  Accordingly, the 
department exempted electric distribution companies from the 
previous fuel procurement and cost recovery program under G. L. 
c. 164, § 94G.  D.T.E. 98-13, at 4 (Feb. 20, 1998).19 
 
The department also exempted electric distribution 
companies from G. L. c. 164, § 69I, which had imposed a power 
planning requirement on the electric utilities, and instead 
directed distribution companies to focus exclusively on 
distribution.  D.T.E. 98-84, at 1-2 (Aug. 10, 1998).  Section 
69I had required electric companies to assess expected customer 
electricity demand over a ten-year period and ensure that they 
would have the right fuel and infrastructure mixture to serve 
that expected demand.20  In exempting electric distribution 
 
19 As relevant here, G. L. c. 164, § 94G, required companies 
to demonstrate to the department that their plans to procure 
fuel for their power plants would "maintain sufficient reserves 
of power for purposes of reliability and efficiency."  G. L. 
c. 164, § 94G (a).  Section 94G (a) also allowed electric 
companies to recover their fuel costs from customers and adjust 
the rate based on fluctuations in fuel prices.  See generally 
Consumers Organization for Fair Energy Equality, Inc. v. 
Department of Pub. Utils., 368 Mass. 599, 601-602 (1975). 
 
 
20 In relevant part, G. L. c. 164, § 69I, required that 
electric companies file biennial forecasts of the electric power 
needs and requirements of its market area for the ensuing ten-
year period.  D.T.E. 98-84/EFSB 98-5, at 1 (Aug. 8, 2003).  
Prior to the restructuring act, the department used this device 
to regulate electric companies' "procurement of and cost 
                                                          
 
30 
 
companies from § 69I, the department recognized that the 
restructuring act relieved such companies from their obligation 
to "forecast[], plan[], solicit[] and procur[e] long-term 
electricity supplies for their customers."  D.T.E. 98-84, at 1 
(Aug. 10, 1998).   
 
Thus, the department's exemption of electric distribution 
companies from both §§ 94G and 69I signaled its recognition that 
electric distribution companies were leaving all aspects of the 
generation business, including not only power plant 
construction, but also the planning and fuel management aspects 
of generation.   
 
Moreover, in restructuring the electric industry by 
removing electric distribution companies from the business of 
electric generation, the Legislature "shifted the risks of 
generation development from consumers to generators" to 
"insulate[] [consumers] from construction, operational, and 
price risks . . . inherent in commodity rate regulation."  
D.P.U. 12-77, at 28 (Mar. 15, 2013).  See D.T.E. 98-84, at 2 
(Aug. 10, 1998) ("A market framework based on competition . . . 
will mean that the economic consequences of building too many 
power plants will be borne directly by investors, rather than 
ratepayers").  Through the restructuring act, the Legislature 
recovery associated with . . . resources to meet [their 
customers' electricity needs."  Id. 
                                                                                                                                                                                           
31 
 
sought to shift such risk away from ratepayers, who had been 
forced to pay higher rates for electricity as a result of 
"excessive investments" in expensive and poorly managed long-
lived infrastructure projects.  Black & Pierce, The Choice 
Between Markets and Central Planning in Regulating the U.S. 
Electricity Industry, 93 Colum. L. Rev. 1339, 1344-1345, 1386 
(1993).21   
 
In this case, the department's interpretation of § 94A not 
only would permit electric distribution companies to purchase 
resources related to supply of electric generation (in this 
case, natural gas capacity), but also would allow the department 
to regulate such activity and to shift the associated costs to 
ratepayers.  We agree with the plaintiffs that such activity 
would undermine the main object to be accomplished by the 
restructuring act, i.e., to move from a regulated electricity 
supply market to an open and competitive market for power.  See 
St. 1997, c. 164, § 1 (f).  Further, an interpretation of § 94A 
 
21 See, e.g., Attorney Gen. v. Department of Pub. Utils., 
390 Mass. 208, 219, 222, 228-229 (1983) (affirming department 
decision that authorized electric company to recover, through 
increased rates, costs it incurred in later abandoned Pilgrim II 
nuclear power plant).  See also Norwood v. Federal Energy 
Regulatory Comm'n, 80 F.3d 526, 530-531 (D.C. Cir. 1996) 
(affirming, in part, FERC decision to allow nuclear plant 
operator to recover costs for prematurely closed nuclear plant 
based in Rowe, Massachusetts); Cost of Seabrook Plant Begins to 
Hit Customers, N.Y. Times, Feb. 1, 1987  
(describing Massachusetts ratepayer costs associated with 
construction of Seabrook nuclear power plant).  
                                                          
 
32 
 
that includes approval of pipeline capacity contracts by 
electric distribution companies would contradict the specific 
statutory provisions put in place under G. L. c. 164 to account 
for the divestiture of all generation assets by electric 
distribution companies.  See, e.g., G. L. c. 164, § 1G. 
Accordingly, this interpretation would give rise to an 
inconsistent body of regulatory law.  See D.T.E. 98-84/EFSB 98-5 
(exempting electric distribution companies from G. L. c. 164, 
§ 69I, and rescinding 220 Code Mass. Regs. §§ 10.00); D.T.E. 98-
13 (exempting electric distribution companies from G. L. c. 164, 
§ 94G).   
 
Perhaps most importantly, however, the department's order 
would reexpose ratepayers to the very types of risks that the 
Legislature sought to protect them from when it enacted the 
restructuring act.  Both the DOER and the department noted that 
gas-fired generating businesses are unwilling to assume the 
risks associated with long-term gas pipeline capacity contracts 
because there "is no means by which they can" assure recovery of 
those contract costs.  Shifting that risk onto the electric 
ratepayers of the Commonwealth, however, is entirely contrary to 
the risk-allocation design of the restructuring act. 
 
Equally unavailing is the department's finding that the 
order does not contravene the policy embodied in the 
restructuring act because it does not allow the use of ratepayer 
33 
 
funds to construct a power plant.  D.P.U. 15-37, at 27.  As 
prior decisions by this court and the department make clear, 
power plant construction is only one aspect of the electric 
generation market, and in enacting the restructuring act, the 
Legislature sought to separate all aspects of generation from 
all aspects of distribution.  See, e.g., D.T.E. 98-13, at 4; 
D.T.E. 98-84, at 1.   
 
Moreover, the department itself has recognized that fuel 
procurement and planning is an integral component of the 
generation business, as evidenced by its exemption of electric 
distribution companies from § 69I.  Indeed, by some estimations, 
fuel-related costs constitute seventy-five per cent of a natural 
gas-fired plant's generation costs.  3 World Scientific Handbook 
of Energy 72 (G.M. Crawley ed., 2013).  Accordingly, prior to 
the enactment of the restructuring act, the department required 
electric companies to consider both the type and amount of fuel 
they would use to generate power when they calculated whether 
they could supply enough electricity to match expected demand.  
We agree with the plaintiffs that if the restructuring act does 
not allow electric distribution companies to finance investments 
in electric generation, it cannot be reasonably interpreted to 
permit those companies to invest in infrastructure unrelated to 
electric distribution service.  Accordingly, we reject the 
department's reasoning.  See Cardin v. Royal Ins. Co. of Am., 
34 
 
394 Mass. 450, 456-557 (1985) (agency's interpretation of 
statute "hardly persuasive where [it] violates the language and 
policy of the statute," [quotation and citation omitted]).  
 
The department's interpretation of the statute as 
permitting electric distribution companies to shift the entire 
risk of the investment to the ratepayers is unreasonable, as it 
is precisely this type of shift that the Legislature sought to 
preclude through the restructuring act.  Contrast D.P.U. 12-77, 
at 28 (Mar. 15, 2013) ("The legislation restructured the 
electric industry in the state by providing incentives to 
investor-owned electric distribution companies to divest their 
generating assets and by adopting a competitive market structure 
for the generation and purchase of electricity.  This 
restructuring shifted the risks of generation development from 
consumers to generators, who are better positioned to manage 
those risks").         
 
Our interpretation of the restructuring act is supported by 
the Legislature's own actions since the law's enactment.  That 
is, where the Legislature has sought to override the risk 
allocation policy of the act, it has done so expressly.  First, 
in 2008, through enactment of the Green Communities Act, St. 
2008, c. 169, the Legislature directed electric distribution 
companies to seek proposals from renewable energy developers, 
and, if they received reasonable proposals, to enter into 
35 
 
ratepayer-backed long-term contracts to buy the renewable power.  
See St. 2008, c. 169, § 83.  The Legislature concluded that such 
contracts were necessary to "facilitate the financing of 
renewable energy generation facilities."  Alliance to Protect 
Nantucket Sound, Inc. v. Department of Pub. Utils. (No. 1), 461 
Mass. 166, 168 (2011).  Importantly, in enacting the Green 
Communities Act, the Legislature explicitly provided the 
department with the authority to review and approve the 
ratepayer-backed renewable energy contracts.  St. 2008, c. 169, 
§ 83 ("[a]ll proposed contracts shall be subject to the review 
and approval of the department of public utilities").   
 
The Green Communities Act represents a legislatively 
created exception to the restructuring act's general prohibition 
on electric distribution companies owning generation assets.  To 
facilitate promotion of renewable energy in the Commonwealth, 
the Legislature allowed each distribution company to construct, 
own, and operate twenty-five megawatts of solar energy before 
January 1, 2009, and 50 megawatts after January 1, 2010.  
St. 2008, c. 169, § 58.  Section 58 further provided that an 
electric distribution company had to obtain prior approval for 
cost recovery from the department in order to recover 
construction costs of a solar generation facility.  Id.  
Although the statute has since been amended, it continues to 
36 
 
provide an express, limited exemption from the restructuring 
act.  See St. 2012, c. 209, § 17. 
 
Second, in 2012, the Legislature enacted "An Act relative 
to competitively priced electricity," in which it authorized the 
department to order electric distribution companies in the 
Northeastern Massachusetts/Boston load zone (NEMA) to solicit 
proposals for electricity generation, and if they received 
reasonable proposals, to enter into ratepayer-backed long-term 
contracts to buy the generation for use in the NEMA load zone. 
St. 2012, c. 209, § 40.  This provision explicitly permitted the 
department to review and approve any resulting contracts if the 
department determined that they were justified.  Id.   
 
These actions by the Legislature represent a clear decision 
to depart from the policy choice to remove electric distribution 
companies from the business of generation, as expressed in the 
restructuring act, in very specific circumstances.  Here, the 
department's stated motive in issuing the order is to correct a 
perceived failure of market-based incentives to encourage 
wholesale generators to contract for adequate pipeline capacity.  
However, its means of doing so, namely by reallocating risk onto 
the ratepayers, is clearly prohibited by legislative policy.  
Thus, no matter how salutary the department may claim its policy 
aims to be, its order contravenes the fundamental policy 
embodied in the restructuring act and cannot stand.  See Utility 
37 
 
Air Regulatory Group v. Environmental Protection Agency, 134 S. 
Ct. 2427, 2446 (2014) (agency authority to interpret ambiguities 
in enabling statute "does not include a power to rewrite clear 
statutory terms to suit its own sense of how the statute should 
operate"); Wakefield Teachers Ass'n v. School Comm. of 
Wakefield, 431 Mass. 792, 802 (2000) (fundamental policy 
decisions are province of Legislature, and not coordinate 
branches of government).   
 
4.  Conclusion.  We conclude that the department erred in 
interpreting G. L. c. 164, § 94A, as amended by the 1997 
restructuring act, as authorizing it to review and approve 
ratepayer-backed, long-term contracts by electric distribution 
companies for natural gas capacity.  Accordingly, the 
department's order is vacated.   
 
 
 
 
 
 
 
So ordered.