Title: Barnet Hydro Co. v. Public Service Board

State: vermont

Issuer: Vermont Supreme Court

Document:

Barnet Hydro Co. v. Public Service Board (2001-083); 174 Vt. 464;
807 A.2d 347

[Filed 22-Apr-2002]
[Motion for Reargument Denied 03-Jul-2002]

                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2001-083

                            SEPTEMBER TERM, 2001


Barnet Hydro Company, et al.	       }	APPEALED FROM:
                                       }
                                       }
     v.	                               }	Washington Superior Court
                                       }
Public Service Board	               }
                                       }	DOCKET NO. 714-12-99 Wncv

                                                Trial Judge: Matthew I. Katz

             In the above-entitled cause, the Clerk will enter:


       Plaintiffs, small power producers, appeal from the Washington Superior
  Court's dismissal of  their declaratory judgment action, which seeks to
  prohibit the Public Service Board (PSB) from  taking any action against
  small power producers in connection with PSB Rule 4.104(G).  On appeal, 
  plaintiffs claim that the superior court's refusal to exercise jurisdiction
  is error because the court, and  not the PSB, has exclusive jurisdiction to
  determine the validity of administrative rules.  We affirm.

       Small power producers own hydroelectric and biomass electric
  generation facilities in  Vermont.  The producers sell, in aggregate, the
  electricity they produce to Vermont retail electric  utilities by means of
  a single central purchasing agent, who acts as an intermediary between the 
  small power producers and the retail electric utilities.  This scheme was
  created pursuant to 30  V.S.A. § 209(a)(8) and PSB Rule 4.100, 8 Code of
  Vermont Rules 30 000 015-1 through 24, which  implement the Public Utility
  Regulatory Policies Act of 1978 (PURPA), 16 U.S.C. § 824a-3.  See 
  generally In re Vermont Power Exchange, 159 Vt. 168, 171-73, 617 A.2d 418,
  419-20 (1992).   Under Rule 4.100, each of the small power producers has a
  contract with the purchasing agent which  requires each retail utility to
  purchase a portion of the small power producers' electricity based on  each
  utility's share of kilowatt-hour sales in the previous year.

       Until 1985, no authority existed to change the terms of the contract
  between the small power  producers and the purchasing agent.  In 1985,
  however, the purchasing scheme was altered when the  PSB adopted Rule
  4.104(G), (FN1) 8 Code of Vermont Rules 30 000 015-16 through 17.  This new 
  rule authorized the PSB to alter the power contracts for good cause so long
  as any change would not  materially affect the substantial rights or
  obligations of either the small power producers, the retail 

 

  utilities, or the rate paying public.  Id.  In 1989, the PSB adopted
  additional amendments to Rule  4.104(G).  As it reads following those
  amendments, the PSB can alter the duration or terms and  conditions of the
  contracts "for good cause," but unless the contracts allow a particular
  alteration, it  cannot be imposed over the objection of a utility or a
  producer "if it would materially affect the  substantial rights or
  obligations of either the utility or of the rate paying public."  The rule
  no longer  requires consideration of the rights or obligations of the small
  power producers.  The parties disagree  whether this amendment to Rule
  4.104(G) was adopted properly - that is, in compliance with the  rulemaking
  procedures imposed by the Vermont Administrative Procedure Act (APA), 3
  V.S.A.  §§ 801-849.

       In August 1999 the retail electric utilities filed a petition with the
  PSB seeking to alter,  modify, and construe certain power sales contracts
  between small power producers and the state's  purchasing agent.  The
  retail utilities requested relief under both Rule 4.104(G) and under the
  terms  of the contracts themselves.  A month later, the PSB opened an
  investigation into the merits of the  utilities' claims, opening a docket
  for that purpose.

       Thereafter, the small power producers brought an action against the
  PSB in Washington  Superior Court, seeking a declaratory judgment that Rule
  4.104(G) is invalid, either because of a  scrivener's error or because the
  rule was not promulgated in accordance with the procedures required  under
  the APA.  The retail electric utilities then intervened in the superior
  court action.  In August  2000, the small power producers filed a motion
  for an injunction to prohibit the PSB from  conducting any further
  investigation pending resolution of the declaratory judgment action in the 
  superior court.  The superior court declined to enjoin the PSB, concluding
  essentially that the small  power producers were forum shopping and that
  the issue of the validity of Rule 4.104(G) could be  fairly adjudicated
  before the PSB, which first asserted jurisdiction over the controversy. 
  The court  later entered a final judgment against plaintiffs, thus enabling
  the small power producers to file this  appeal.

       On appeal, the small power producers contend that the court erred in
  dismissing the action and  deferring to the PSB because the Washington
  Superior Court has exclusive jurisdiction under 3  V.S.A. § 807, a section
  of the APA, to determine the validity of administrative rules.  Section 807 
  provides, in relevant part:

    The validity or applicability of a rule may be determined in an
    action for  declaratory judgment in the Washington superior court
    . . . .  A declaratory  judgment may be rendered whether or not
    the plaintiff has requested the  agency to pass upon the validity
    or applicability of the rule in question.

  3 V.S.A. § 807.  Also relevant is § 808 which provides, in relevant part:

    Each agency shall provide for the filing and prompt disposition of 
    petitions for declaratory rulings as to the applicability of any .
    . . rule or  order of the agency, and may so provide by procedure
    or rule.  Rulings 

 

    disposing of petitions have the same status as agency decisions or
    orders in  contested cases.

  3 V.S.A. § 808.

       In construing a statute, we attempt to discern the intent of the
  Legislature.  See T. Copeland &  Sons, Inc. v. Kansa General Ins. Co., 171
  Vt. 189, 193,