MAINE	SUPREME	JUDICIAL	COURT Reporter	of	Decisions

Decision: 2016 ME	168

Docket: PUC-14-470

Argued: March	2,	2016

Decided: November	17,	2016

Panel: SAUFLEY,	C.J.,	and	MEAD,	GORMAN,	JABAR,	HJELM,	and	HUMPHREY,	JJ.

HOULTON	WATER	COMPANY	et	al.

v.

PUBLIC	UTILITIES	COMMISSION et	al.

HJELM,	J.

[¶1]		We	are	called on for	the	second	time	to	consider	a	decision	of	the	

Maine	 Public	 Utilities	 Commission	 approving a	 petition for	 reorganization	

filed	 by	 Bangor	 Hydro-Electric	 (BHE)	 and	 Maine	 Public	 Service	 Company	

(MPS),	 which	 were	 regulated	 utilities engaged	 in	 the	 transmission	 and	

distribution	 of	 electricity,	 and,	 during	 the	 pendency	 of	 this	 proceeding,	

merged	to	become	Emera Maine. Under	the	proposed	reorganization,	Emera	

Maine’s	parent	company,	Emera,	Inc.,	would	increase	its	ownership	interest	in	

Algonquin	 Power	 &	 Utilities	 Corporation (APUC),	which	 is a	 publicly-traded	

company	 that	 is in	 the	 electricity	 generation	 business with	 generation	

facilities located in	 Maine. Because	 of	 the	 relationship	 that	 would	 result	
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between	Emera	Maine,	as	a	transmission	and	distribution	entity,	and	APUC, a	

generator,	the	petition	is	subject	to	approval	by	the	Commission.		

[¶2]		In	the	 first appeal,	we	vacated the	Commission’s	order	approving	

the	petition1 because	 the	Commission misconstrued	 the	governing statute in	

the	Electric	Industry	Restructuring	Act, 35-A	M.R.S.	§§	3201-3217	(2015).		See	

Houlton	Water	 Co.	 v.	 Pub.	 Utils. Comm’n (Houlton	 I),	 2014	 ME	 38,	 ¶¶	 35-38,	

87 A.3d	 749.	 On	 remand,	 the	 Commission again	 approved	 the	 petition.	 	On	

this	second	appeal, filed	by	Houlton	Water	Company	and	the	Industrial	Energy	

Consumer	 Group	 (collectively,	 the	 intervenors), we	 conclude	 that	 the	

Commission	 acted	 outside	 of	 its	 authority	 when,	 in	 an	 effort	 to	 control	 the	

statutorily	harmful	effects	of	the	transaction, it	imposed	conditions	that	would	

regulate APUC beyond	 what	 the	 Restructuring Act	 allows.	 	 We	 therefore	

vacate	 the	 Commission’s order and	 remand	 with	 instructions	 to	 deny	 the	

petition.

I.		STATUTORY	OVERVIEW AND	BACKGROUND

[¶3]	 	 As	 we	 discussed	 in	Houlton	 I,	 when	 the	 Legislature	 enacted the	

Restructuring	 Act,	 one	 of	 its objectives	 was	 to	 encourage	“competition	 and	

 1 Also	at	issue	in	the	first	appeal	was	a	separate	reorganization	petition	that	would	have	allowed	

Emera	 to	 become	 involved	 in	 a	 wind	 power	 venture.	 	 Houlton	 Water	 Co.	 v.	 Pub.	 Utils.	 Comm’n	

(Houlton	 I),	 2014	ME	 38,	¶	 1,	 87 A.3d	 749.	 	As	we	 discuss	in	 this	 opinion,	 Emera	 has	withdrawn	

from	that	venture,	and	it	is	no	longer	at	issue.
3

innovation	in	the	generation	of	electrical	power.”		Id. ¶	3;	35-A	M.R.S.	§	3204;	

see	 also	 Cent.	 Me.	 Power	 Co.	 v.	 Pub.	 Utils.	 Comm’n,	 2014	 ME	 56,	 ¶	 2,	

90 A.3d 451.		To	promote	 that goal,	 the	Legislature	separated	 the	generation	

of	electricity from the transmission	and	distribution	of	electricity	(T&D);	and	

“greatly	reduced” the	Commission’s	regulatory	authority	over	producers	and	

generators	of	electricity to	the	extent	that	the	parties	to	this	proceeding	“refer	

to	 power	 generation	 as	 ‘unregulated’	 in	 Maine”;	 but	 preserved	 the

Commission’s	authority	 to	highly	 regulate	T&D	entities.	 	Houlton	 I,	2014	ME	

38,	¶¶	4-5,	87	A.3d	749.		

[T]he	Act	mandated	 that	companies	holding	both	generation	and	

T&D	 assets	 divest	 themselves	 of	 the	 generation	 assets	 and	

generation-related	 activities	 .	 .	 . . Following	 divestiture,	 the	

Commission	 continues	 to	 regulate	 and	 oversee	 T&D	 utilities,	

which	 hold	 monopolistic	 rights	 to	 the	 limited	 T&D	 resources	 in	

Maine.	 	 Because	 the	 Restructuring	 Act	 allowed	 the	

investor-owned	 electric	 utilities	 to	 keep	 their	 transmission	 and	

distribution	 assets,	 the	 former	 electricity	 providers	 were	

transformed	 into	 transmission	 and	 distribution	 utilities	 fully	

regulated	by	the	Commission.

Id. ¶	 4 (citation and	 quotation	 marks	 omitted).	 	 As	 an	 element of	 the	

Commission’s extensive	regulation	of	T&D	utilities,	proposed	reorganizations	

of	T&D	utilities	are	subject	to	the	Commission’s approval.		Id. ¶	6;	35-A	M.R.S.	

§§	708(2),	3204(5) (2015).
4

[¶4]		In	April 2011,	BHE	and	MPS	petitioned	the	Commission	pursuant	

to	 35-A	 M.R.S.	 §	 708(2),

2 which	 applies	 to the reorganization of	 utilities, to	

authorize	their	parent	company,	Emera,	to	increase	its	ownership	position	in

APUC	 to	 25%	 from	 roughly	 8%.3	 	 As	 we	 described	 the	 proposed	 affiliate	

structure	 in	 Houlton	 I,	 “the	 proposed	 transactions would	 allow	 Maine’s	

regulated	T&D	 utilities—Bangor	Hydro	and	MPS	 [now	Emera	Maine]—to	 be	

held	in	common	ownership	with	companies	engaged	in	electricity	generation	

in	Maine.”		2014	ME	38,	¶	9,	87	A.3d	749.		The	parties	agree	 that this	would	

result	in	 an	“affiliated	interest” between	Emera Maine and	 APUC within	 the	

meaning	of	35-A	M.R.S.	§	707(1)(A)	(2015).	 See Houlton	I,	2014	ME	38,	¶¶ 9,	

25,	87	A.3d	749.		

[¶5]		Additionally,	in	a	separate	petition,	Northeast	Wind	Holdings,	LLC,	

which	 was	 owned	 by	 Emera, filed	 a	 reorganization	 petition	 that	 would	

 2 Title	 35-A	 M.R.S.	 §	 708	 has	 been	 amended,	see P.L.	 2011,	 ch.	 623,	 §§	 A-13,	 A-14	 (effective	

Aug. 30,	 2012)	 (codified	 at	 35-A	 M.R.S.	 §	 708	 (2015)),	 but the	 amended	 subsection	 is	 not	 the	

subsection	under	which	BHE	and	MPS	petitioned	the	Commission.

3		The	term	reorganization	encompasses	

any	creation,	organization,	extension,	consolidation,	merger,	 transfer	of	ownership	

or	control,	liquidation,	dissolution	or	 termination,	direct	or	indirect,	in	whole	or	in	

part,	 of	 an	 affiliated	interest	 as	 defined	in	 section	 707	 accomplished	 by	 the	issue,

sale,	 acquisition,	 lease,	 exchange,	 distribution	 or	 transfer	 of	 voting	 securities	 or	

property.		

35-A	M.R.S.	§	708(1)(A).		Here,	the	APUC	transaction	would	create	an	“affiliated	interest”	as	defined	

in	 section	 707,	see	infra ¶	 6 n.4,	and	is	 thus	 subject	to	 the	 Commission’s	 oversight	 under	 section	

708.
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authorize	Emera	to	engage	in	a	joint	venture	with	a	wind	energy	development	

company	to	create	a	new	wind	power	generation company.		The	Commission	

consolidated	the	two	petitions	and	held	a	hearing	in	late	2011	and early	2012.		

[¶6]	 	After	 the	 hearing	 was	 completed,	 in	 April 2012 the	 Commission	

issued	an order	approving	 the two proposed	 transactions,

4 concluding,	as	 to	

the	APUC	 transaction, that	Emera	Maine	had	met	its	burden	of	showing	 that	

ratepayers	 would	 not	 suffer	 a	 net	 harm	 pursuant	 to	 section 708,	 which	

provides	 in	 part	 that	 the	 Commission	 may	 approve	 utility	 reorganizations,	

including the	creation of	affiliates,	if	the	reorganization “is	consistent	with	the	

interests	of	the	utility’s	ratepayers	and	investors.” 35-A	M.R.S.	§	708(2)(A).		

[¶7]	 	 In	 approving	 the	 petitions,	 the	 Commission	 interpreted	 section	

3204(5)5 as	 foreclosing	 a	 T&D	 utility	 from	 having	 a	 financial	 interest	 in	 a	

generation	asset	only	if	the	T&D	utility	controlled the	generator. With	respect	

to	 the	 APUC	 transaction,	 the	 Commission	 determined	 that pursuant	 to	 that	

test, the	 proposed	 transaction	 did	 not	 violate	 the	 Restructuring	 Act	 because	

 4 Because	 of	 changes	in	 collateral	 transactions	involving	APUC	while	 the	matter	was	 pending	

before	 the	 Commission,	 Emera’s	 ownership	 share	 of	 APUC	 as	 approved	 by	 the	 Commission	 was	

reduced	to	20%	from	the	originally	proposed 25%.		Because	an	affiliated	interest	is	defined	as	one	

of	at	least	10%,	see	35-A	M.R.S.	§	707(1)(A) (2015),	the	reduction	in	Emera’s	position	in	APUC	did	

not	affect	the	statutory	analysis.

5	 	 Section	 3204(5)	 provides,	 “[e]xcept	 as	 otherwise	 permitted	 under	 this	 chapter,	 on	 or	 after	

March	 1,	 2000,	 an	 investor-owned	 transmission	 and	 distribution	 utility	 may	 not	 own,	 have	 a	

financial	 interest	 in	 or	 otherwise	 control	 generation	 or	 generation-related	 assets.”	 	 35-A	 M.R.S.	

§ 3204(5) (2015).
6

Emera	Maine,	as	 the	T&D	entity,	would	not	have	an	equity	interest	or	voting	

position	in	 APUC—in	 other	 words,	 because	 Emera	 Maine	 would	 not	 control	

APUC.		

[¶8]		The	Commission	also	considered	whether	the	transactions	would	

compromise competition	in	the	energy	market.		The	Commission	found,

These	affiliations	raise	significant	concerns	regarding	the	possible	

exercise	 of	 preferential	 treatment	 by	 a	 utility	 to	 its	 competitive	

affiliates.	 	 This	 preferential	 treatment	 could	 include	 allowing	 an	

affiliated	generator	 .	 .	 .	 to	gain	access	 to	 non-public,	 strategically	

important	information	or	through	favorable	treatment	in	terms	of	

construction	 of	 or	 access	 to	 transmission	 facilities	 or	 services.		

The	 consequences	 could	 appear	 in	 two	 somewhat	 different	

respects:	 (1)	 harm	 to	 ratepayers	 of	BHE	and	MPS	in	 the	 form	 of	

higher	 T&D	 rates;	 and	 (2)	 harm	 to	 the	[competitiveness]	 of	 the	

market	 (and	 competitors	 in	 the	 market)	 from	 preferential	

treatment	 of	 affiliates	 which	lead	 ultimately	 to	 higher	 electricity	

supply	prices	for	consumers.

Although	 the	Commission	 found	 these	risks	of	preferential	 treatment	arising	

from	 the	 wind	 power	 venture	 to	 be	 “both	 real	 and	 significant,” it	 also	

determined	 that	 those	 concerns	 were	 of	 “lesser	 importance”	 in	 the	 APUC	

transaction	but that	the	financial	risks	generated	by	that	reorganization	would	

be	eliminated	if	conditions	were imposed.		

[¶9]	 	 The	 Commission conditioned	 its approval of	 both	 petitions on	

compliance by	 the	 parties	 and	 other	 affected	 entities with	 more	 than fifty	

conditions.	 	 Some	 of	 those	 conditions	 relate exclusively	 to	 the	 APUC	
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transaction,	others	to	the	wind	power	transaction,	and	the	remainder	to	both.		

The	 conditions	 address issues	 such	 as	 structural	 separation,	 financial	 risk,	

codes	 of	 conduct,	 and	 divestiture;	 and	 the	 conditions	 contain	 extensive	

requirements	of	external	audits,	service	restrictions,	and	 the	maintenance	of	

separate	credit	facilities,	among	other	things.		

[¶10]	 	 Significant	 for	 purposes	 of	 this	 appeal,	 in	 approving	 the	

reorganization	 petition,	 the	 Commission	 imposed conditions on	 electricity	

generators,	 including	 APUC itself. As	 the	 conditions	 apply	 to	 APUC,	 they	

include	 a	 requirement	 that	 APUC	 not	 permit	 Emera	 to	 participate	 in	

decision-making	regarding	APUC’s	generation	of	power	in	Maine;	that,	to	the	

extent	that	the	Commission	determines	that	APUC’s	operations	relate	to	BHE	

and	MPS	operations	in	Maine,	APUC	provide	the	Commission	with	access	to	its	

books	 and	 records,	 respond	 to	 discovery	 requests	 and	 participate	 in	

Commission	proceedings	without	being	allowed	to	object	on	the	basis	that	the	

Commission	 does	 not	 have	 jurisdiction;	 and	 that	 the	 Commission	 have	

authority	to	order	APUC	to	divest	itself	of	certain	power	generation	units. The	

Commission	 also	 required,	 as	 a	 condition	 to	 approval	 of	 the	 petitions,	 that	

APUC	 submit	 a	 letter	 accepting the	 Commission’s	 authority to	 enforce	 the	

order	against	it.		
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[¶11]	 Houlton Water,	 the	 Office	 of	 the	 Public	 Advocate,	 and	 the	

Industrial	 Energy	 Consumer	 Group appealed	 the	 Commission’s	 order as	

intervenors.	 	 We	 concluded that	 the	 Commission’s	 interpretation	 of	 section	

3204(5)	was	erroneously	narrow	and	held	that even	if	a T&D	entity	would	not	

ultimately	 obtain actual	 control	 of	 the	 electricity	 generator,	 that statute

nonetheless prohibits	 the	 T&D	 from	 becoming	 affiliated	 with an	 electricity

generator if the affiliation	 will	 become “likely	 to	 produce [in	 the	 T&D]

incentives	 for	 favoritism	 that	 would	 undermine	 the	 purpose	 of	 the	

[Restructuring]	 Act.”	 	 Houlton	 I,	 2014	 ME	 38,	 ¶¶ 35,	 37,	 87	 A.3d	 749.	 	 We	

vacated	the	Commission’s	order	and	remanded	the	matter	for the	Commission	

to	reconsider	the	petition under	the	clarified	statutory standard.	 Id. ¶¶	2,	38.		

[¶12]	 	 On	 remand, choosing	 to	 proceed	 on	 the	 existing	 record,	 the	

Commission	 entered	 an	 order	in	October	 2014	 approving	 the	 petitions by	 a	

two-to-one	vote. As	to	the	APUC	transaction,	the	Commission	concluded	that	

“the	reorganization[] result[s] in	Emera	Maine	having	a	‘financial	interest’	in	

generation merely	 as	 a	 result	 of	 its	 affiliation	 with	 Northeast Wind	

Partners . . .	and [APUC]	through	common	ownership	by	the	parent	company,	

Emera.” The	 Commission	 determined,	 however,	 “that	 the	 [p]roposed	

[t]ransactions,	when	subject	 to	 the	substantial	conditions	imposed pursuant	 to	
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our	 35-A	 M.R.S.	 §	 708	 authority .	 .	 . do	 not	 violate	 the	 provisions	 of	

[section] 3204(5)	as	interpreted	by	the	Law	Court	[in	Houlton I].”		(Emphasis	

added.) In	other	words,	the	Commission	 took	 the	view	 that	although	Emera	

Maine	 would	 have	 a	 financial	 interest	 in	 generation that	 would	 be	 likely	 to	

create	favoritism,	that	interest	would	be	“adequately	addressed	through	§	708	

conditions,”	 thus	 falling	 short	 of	 creating	 any	 unlawful	 incentives. The	

Commission	imposed	the	same	conditions	contained	in	its	April	2012	order	in	

which	 it had	 originally	 approved the	 petitions. The	 intervenors again	

appealed.

6		See	35-A	M.R.S.	§ 1320	(2015).		

[¶13]	 	 While the	 appeal	 was	 pending,	 Emera	 Maine	 notified	 the	

Commission that	 Emera	 had	 agreed	 to	 sell	 its	 interest	 in the	 wind	 power	

venture	 to	 its	 partner	 in	 that	 proposed	 transaction. In	 January	 2015,	 the	

Commission	issued	an	 order	determining	 that	its	approval	was	not	 required	

for	Emera	to	withdraw	from	the	joint	venture.		Within	several	days	after	that	

order	 was	 issued,	 Emera	 formally withdrew	 from	 the	 venture.	 	 The	

Commission	 then	 moved	 that	 we stay	 this appeal so	 that	 the	 Commission

could consider	 the	 effect	 of	 that	 development	 on	 the	 October	 2014	

consolidated	 order	 in	 which	 it	 had approved	 both	 the	 Northeast	 Wind	 and	

 6	 	 The	 Office	 of	 the	 Public	 Advocate,	 which	 previously appeared	 as	 an	 intervenor,	 has	 not	

participated	in	this	appeal.
10

APUC	 transactions.	 	 We	 denied	 the motion	 and	 ordered	 that	 the appeal

proceed	in	the	normal	course.		

[¶14]		Following	the issuance	of	our order,	the	Commission	allowed	the	

parties	an	opportunity	to	be	heard	on	the	effect	of	the	rescinded	wind	power	

transaction	 on	 the	 October	 2014	 order,	 part	 of	 which addressed Emera’s	

now-withdrawn	 involvement	 in	 the	 wind energy	 project. Rejecting the	

intervenors’ argument	 to	 the	 contrary, the	 Commission	 determined	 that the	

pendency	 of	 this appeal	 did	 not	 deprive the	 Commission	 of authority	 to	

proceed.	 	 The	 Commission	 then issued an	 order in	 August 2015,	 which	

addressed	the	effect	of	Emera’s	withdrawal	 from	the	wind	power	venture	on	

the	October	2014	order	by	eliminating thirteen	of	 the	conditions	attached	 to	

the	earlier order	authorizing	the	reorganizations,	and	modifying eight	others.		

The	 conditions	 applicable	 to	 APUC	 noted	 above, see	 supra ¶	 10, remained	

unchanged.		

[¶15]	 	 The	 intervenors	 appealed	 from	 that	 order	 and	 moved	 to	

consolidate	 their	appeals	and	permit	supplemental	briefing.		We	granted	 the	

motion,	and	the	parties	filed	supplemental	briefs	to	address	the	issues	raised

by	the new	appeal.		
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II.		DISCUSSION

[¶16]	 	We	 first	 consider	whether	 the	 pendency	 of	 this	 appeal	 affected	

the	 Commission’s authority	 to	modify	 the	October	 2014	 order	 as	 a	 result	 of

Emera’s	 decision	 not	 to	 proceed	 with	 the	 joint	 wind	 power	 venture.	 	 After	

identifying	 the	 operative	 Commission	 decision,	 we	 address	 the	 intervenors’	

challenges	to	that	decision.

A. The	Commission’s	Authority	to	Modify	the	October	2014	Decision

[¶17]	 	 The intervenors	 argue	 that	 because	 the	 appeal	 of	 the	

Commission’s	 October	 2014	 decision	 was	 pending	 when	 the	 Commission	

modified	that	decision	in	August	2015,	the	modification	is	void.	

[¶18]		This	issue	reveals	a	conflict	between	two	statutes	governing	the	

procedure	 for	 appeals	 from	 Commission	 decisions.	 	 One	 of	 the	 statutes,	

35-A M.R.S.	 §	 1320(3)	 (2015),	 is	 framed	 in	 broad	 terms and	 provides	

generally	 that	 the	 rules	 of	 appellate	 process	 apply	 to	 appeals	 from

Commission decisions: where	rules	regulating	civil	appeals	from	the	Superior	

Court	 “use[]	 the	 term[]	 ‘the	 court,’	 . . . they	 shall	 for	 purposes	 of	 an	 appeal	

from	the	commission	mean	‘the	commission.’”		See	also 35-A	M.R.S.	§	1320(1)	

(2015) (“An	appeal	 from	a	 final	decision	of	 the	commission	may	be	 taken	 to	

the	 Law	 Court	 on	 questions	 of	 law	 in	 the	 same	 manner	 as	 an	 appeal	 taken	
12

from	 a	 judgment	 of	 the	 Superior	 Court	 in	 a	 civil	 action.”); M.R.	 App.	 P.	 22	

(effectively	implementing	section	1320).		

[¶19]		As	one	ostensible	effect	of	section	1320, Maine	Rule	of	Appellate	

Procedure	 3(b) would	 apply here.	 	 That	 rule,	 subject	 to	 specific	 exceptions	

that	 are	 inapplicable	 in	 this	 case, prohibits	 a	 trial	 court—and	 therefore,	

pursuant	to	section	1320, the	Commission—from	taking	any	action	affecting	a	

case	 that	 is	 on	 appeal. Viewed	 in	 isolation, Rule	 3(b) therefore	 would

preclude the	 Commission	 from	 revising	 its	 October	 2014	 order	 while	 an	

appeal from	that	order was	pending.	

[¶20]	 	 In	 contrast,	 a	 different	 statute,	 35-A	 M.R.S.	 §	 1321	 (2015),

provides that “[t]he commission	may	at	any	time rescind,	alter	or	amend any	

order	it	has	made.”	 (Emphasis	added).		As	applied	here,	section 1321	affects	a	

narrow aspect	 of	 appellate	 procedure	 by	 preserving	 the	 Commission’s	

authority	 to	alter	or	amend	any	order,	at	any	 time—even	while	an	appeal	is	

pending.	 In	 this	 way,	 section	 1321 is	 inconsistent	 with the	 broadly	 framed	

provisions	of	section	1320	that	subject	appeals	from	Commission	decisions to	

the	constraints	of	Rule	3(b).	

[¶21]		As a	familiar	principle	of	statutory	construction, specific	statutes	

prevail over	general	ones when	 the	 two	are	inconsistent.		Fleet	Nat'l	Bank	v.	
13

Liberty,	 2004	 ME	 36,	 ¶	 10,	 845	 A.2d	 1183;	 see	 also 2B	 Singer	 &	 Singer,	

Sutherland	 Statutory	 Construction §	 51:2 at	 215 (7th	 ed. 2012)	 (“If	 an	

irreconcilable	 conflict	 does	 exist	 between	 two	 statutes,	 the	 more	 specific	

statute	controls	over	 the	more	general	one	.	.	.	.”).		Applying	 this	principle	 to	

resolve	 the	 conflict	 between	 sections	 1320	 and	 1321,	 we	 conclude	 that	 the	

more	 general	 provisions	 of	 section	 1320,	 which	 covers	 many	 aspects	 of	

appellate	 procedure in	 an	 undifferentiated	 way,	 yield	 to	 the	 more	 specific	

terms	 of	 section	 1321.	 	As	a	 result, notwithstanding	Rule	 3(b),	 section	 1321	

preserved	 to	 the	 Commission	 the	 authority	 to	 issue the amended	 order	 in	

August	 2015,	 even	 though	 that	 administrative	 action revised	 an	 order	 that	

was	the	subject	of	a	pending	appeal.		

[¶22]	 	 We	 now	 consider	 the merits	 of intervenors’	 challenges	 to	 that	

order.

B. Commission	Approval	of	APUC	Transaction

[¶23]	 The	central	issue	raised	by	the	intervenors	on	this	appeal	focuses	

on	the	limitations	of	the	Commission’s	authority	to	impose	certain	conditions	

as a	predicate	to its	approval	of	the	APUC	transaction.		

[¶24]	 	 Pursuant	 to section	 3204(5),	 a	 T&D	 entity is	 prohibited from	

“own[ing],	 hav[ing]	 a	 financial	 interest	 in	 or	 otherwise	 control[ling]	
14

generation	 or	 generation-related	 assets,”	 subject	 to	 certain	 exceptions	 not	

applicable	here.		35-A	M.R.S.	§	3204(5).		In	Houlton	I,	we	addressed	the	nature	

of	 the	 “financial	 interest”	 that	 is	 barred	 when a	 reorganization results	 in a	

regulated	 affiliate	 interest: “if	 the	 relationship	 among	 the	 entities	 results	 in	

the	T&D	utility	having	a	 financial	interest	that	would	provide	an	incentive	to	

favor	certain	generators	over	others,	the	proposed	corporate	restructuring	is	

prohibited	pursuant	to	section	3204(5).”	 2014	ME	38,	¶	36,	87	A.3d	749.	

[¶25]	 	 In	 this	 proceeding,	 the	 Commission	 determined	 that the	

proposed	 affiliation	 would	 give	 Emera—an	 owner	 of a company	 possessing	

T&D	assets—a	financial	interest	in	APUC’s	electricity	generation	assets,	which,	

without	intervention, would	be	likely	to	create	an	incentive	for	Emera	to	favor	

APUC	 over	 other	 generators. Seeking to	 eliminate	 this	 consequence	 of	 the	

proposed	 transaction,	 the	 Commission	 invoked	 its	 authority	 pursuant	 to	

section	 708,	 which	 requires	 the	 Commission,	 when	 approving	 a	

reorganization	 of	 public	 utilities	 such	 as	 is	 proposed	 here,	 to	“impose	 such	

terms,	conditions	or	requirements	as,	in	its	judgment,	are	necessary	to	protect	

the	interests	of	ratepayers.”		35-A	M.R.S.	§	708(2)(A).		

[¶26]	 	 In	 its	 October 2014	 order,	 the	 Commission	 determined	 that	

imposition	of	many	specific	conditions pursuant	to	section	708 would	negate	
15

an	 “incentive	 for	 favoritism	 .	 .	 .	 that	 would	 require	 [the	 Commission]	 to	

disallow	 those	 transactions	 under	 [s]ection	 3204(5).”	 	 The	 intervenors	

contend that	 once the	 Commission made	 the	 initial finding that	 the	

reorganization	 would	 give	 Emera	 incentives	 of	 favoritism toward	 some	

generators,	 the	 Commission	 erred	 by	 resorting	 to	 section	 708	 and	imposing	

conditions	 in	 an	 effort to	 ameliorate	 that resulting favoritism.	 	 The	

intervenors	 go	 on	 to	 argue	 that	 because	 the	 Commission	 may	 not	 use	 its	

authority	 under	 section	 708	 to	 transform	 a	 reorganization	 that	 violates	

section	 3204(5)	 into	 one	 that	 satisfies	 the	 requirements	 of	 that	 statute,	 the	

Commission	erred	by	approving	the	APUC	transaction.		Emera	Maine	and	the	

Commission	 argue,	 on	 the	 other	 hand, that	 the	 Commission acted	 properly	

when	 it	 took	 those conditions	 into	 account	 before finally	 determining that	

Emera’s	 financial	interest	would	not likely	 create	an	incentive	 for	 favoritism	

toward	APUC.	

[¶27]	 	 “We	 review	 decisions	 of	 the	 Commission	 with	 great	

deference[,] . . . disturb[ing]	a	decision only	when	the	Commission	abuses the	

discretion	entrusted	to	it,	or	fails	to	follow	the	mandate	of	the	legislature,	or	to	

be	bound	by	the	prohibitions	of	the	constitution.”		Taylor	v.	Pub.	Utils.	Comm’n,	

2016	ME	71,	¶	5,	138 A.3d 1214 (citation	and	quotation	marks	omitted).		
16

[¶28]	 	 The	 procedural	 history	 of	 this	 case	 demonstrates	 that	 the	

conditions	set	out	in	the	most	recent	order,	issued	in	August	2015, relate	only	

to	 the	 proposed	 APUC	 transaction	 and	 are	 intended	 to	 satisfy	 the	

requirements	of	section	3204(5).		The	Commission	first	formulated	conditions	

applicable	 to	 both	the	 APUC	 and	 wind	 power	 transactions in	 its	 April	 2012	

order,	 where	 the	 Commission	 concluded	 that	 the	 transactions	 “raise	

significant	concerns	regarding	the	possible	exercise	of	preferential	treatment	

by	 a	 utility	 to	 its	 competitive	 affiliates”—precisely	 the	 type	 of	 “financial	

interest”	 that	 we	 later	 determined	 in	 Houlton	 I is	 prohibited	 by section	

3204(5).	 	 The	 nature	 of	 the	 preferential	 treatment	 that	 concerned	 the	

Commission	 included	 the	 potential	 for	 sharing	 of	 “non-public,	 strategically	

important	information,”	and	“favorable	treatment	in	terms	of	construction	of	

or	access	 to	 transmission	 facilities	or	services.”		On	remand,	the	Commission

framed	 its	 analysis based	 on	 the	 construction	 of	 section	 3204(5)	 that	 we	

prescribed	in	Houlton	 I and	made	clear	 that	 the	purpose	 of	the	 conditions it	

formulated was	 still	 to	 prevent	 any	 “incentive	 for	 favoritism . . . that	 would	

require	us	to	disallow	those	transactions	under	Section	3204(5).”		Although	in	

its	 August	 2015	 order	 the	 Commission	modified	 the	 set	 of	 conditions	it	 had	
17

previously	imposed	to	account	 for	Emera’s	withdrawal	 from the	wind	power	

venture,	the	purpose	of	those	conditions	did	not	change.		

[¶29]		Given	this	history,	we	must	view	the	entire	body	of	the conditions

contained	in	its	most	recent	order to	represent	the	Commission’s	view	of	what	

is necessary	for	the	APUC	transaction	to	meet,	in	the	least	restrictive	way, the	

requirements	of	section	3204(5)—that	a	T&D	entity	may	not	have	a	financial	

interest	 in	 an	 electricity	 generator	 that	 is	 likely	 to	 produce	 incentives	 for	

favoritism—and	 not	 for	 some	 reason	 unrelated	 to	 the requirements	 of	 that	

statute.		

[¶30]	 	 As	 discussed	 above,	 the	 Restructuring	 Act	 is	 “intended	 to	

effectuate	the	Legislature’s	goal	of	encouraging	competition	and	innovation	in	

the	generation	of	electrical	power.”		Houlton	I,	2014	ME	38,	¶	3,	87	A.3d	749.		

An	 essential	 ingredient to	 achieve	 that	 result	 is	 to	 largely	 deregulate	

electricity	 generation.	 	 Indeed,	 as	 we	 pointed	 out	 in	 Houlton	 I,	 the	 parties	

themselves	

refer	to	power	generation	as	“unregulated” in	Maine,	although	the	

generators	are	subject	to	some	restrictions	and	must	be	licensed.	

See	 generally	 35-A	 M.R.S.	 §	 3202	 (deregulating	 retail	 access	 to	

generation	 services);	 id. §	 3203	 (authorizing	 the	 Commission	 to	

license	competitive	electricity	providers).		

Id.	¶	5.
18

[¶31]		Here,	the	conditions	crafted	by	the	Commission	that	are	directed	

toward APUC	 constitute	 forms	 of	 agency	 oversight	 and	 control	 that	 are	

contrary	 to	 both	 the	 letter	 and	 purpose of	 the	 Restructuring	 Act.	 	 That	 the	

Commission	even	saw	the	need	to	explicitly	articulate	particular	controls	over	

APUC as	a	condition	 to approving	an	increase	in	Emera’s	stock	ownership	of	

APUC	is	itself	a	demonstration	that	most	or all	of	those	conditions do not	exist

by	operation	of	statute or	otherwise.

7

[¶32]	 	 Beyond	 this,	 the	 Legislature	 has	 conferred	 general	 grants	 of	

authority	to the	Commission	in several statutes.		In	35-A	M.R.S.	§	104 (2015),	

for	 example,	 the	 Commission	 is	 deemed	 to	 have	 “all	 implied	 and	 inherent	

powers	.	.	.	necessary	and	proper	to	execute	faithfully	its	express	powers	and	

functions	specified	in	this	Title	[35-A].” Additionally pursuant	to	section 708,	

the	 Commission,	 when	 approving	 a	 reorganization,	 has	 the	 authority	 to	

“impose	 such	 terms,	 conditions	 or	 requirements	 as,	 in	 its	 judgment,	 are	

necessary	to	protect	the	interests	of	ratepayers.”		35-A	M.R.S.	§	708(2)(A).

[¶33]	 	 The	 extent	 of	 the	 Commission’s	 authority	 as	 created	 by	 these	

statutes	is	circumscribed	by	the	principle	that	the	agency’s	action	must	not	be	

 7 One	of	the	conditions	that	the	Commission	imposed	on	APUC	would	require	APUC	to	allow	the	

Commission	access	 to	its	books	and	records.		In	contrast	 to	 the	other	conditions	addressed	in	 the	

text,	 this	 form	 of	 agency	 intervention	 into	 matters	 of	 an	 affiliated	 generator	 appears	 to	 be	

statutorily	authorized.		See 35-A	M.R.S.	§	708(2)(A)(1).
19

inconsistent	with—in	 this	 case—the	foundational	legislative	framework	that	

gives electricity	 generators the	 freedom to	 operate	 with	 only	 minimal	

regulatory	constraint.		See	Houlton	I,	2014	ME	38,	¶	5,	87	A.3d	749.		Here,	as	

an	integral	part	of	its	approval	of	 the	APUC	 transaction,	the	Commission	has	

attempted	 to	materially	expand the	scope	of	its	regulatory	authority	over	an	

electricity	 generator beyond	 what	 the	 Restructuring	 Act	 will	 allow—for	

example, by requiring	APUC	to	exclude	Emera,	which	would	own	a	significant	

ownership	 stake	 in	 APUC,	 from	 participating	 in	 certain	 decisions	 regarding	

power	generation;	 by	 requiring	APUC	 to	authorize	 the	Commission	 to	direct

that	 it	 divest	 itself	 of	 power	 generation facilities;	 and	 by	 requiring	 APUC to	

participate	 in	 Commission	 proceedings	 without	 the	 right	 to	 object	 on	 the	

ground	 that	 the	Commission	is	without	jurisdiction.	 The	scope	and	depth	of	

the	 Commission’s	 regulatory	 weight	 affecting	 APUC	 as	 a	 generator	 is	

contravened	by	the	Restructuring	Act.8		Cf.	Town	of	Eagle	Lake	v.	Comm’r,	Dep’t	

of	 Educ.,	 2003	 ME	 37,	 ¶	 7,	 818	 A.2d	 1034	 (stating	 that	 statutes	 are	 to	 be	

construed to	achieve	legislative	purpose).	

 8 In	its	April	2012	and	October	2014	orders,	the	Commission	also	imposed	regulatory	conditions	

on	First	Wind,	which	is	the	wind	power	producer that	was	associated	with	the	joint	venture	 from	

which	 Emera	 withdrew.	 	 The	 Commission	 abrogated	 the	 conditions	 specific	 to	 the	 wind	 power	

venture	in	its	August	2015	order	and,	for	the	reasons	discussed	supra at	¶¶	14-16,	those	conditions	

are	no	longer	at	issue.
20

[¶34]	 	 In	Houlton	 I,	 we did	 not	 hold that	 section	 3204(5)	 prohibits a	

T&D	 entity	 from	 acquiring	 any financial	 interest	 in	 an	 electricity	 generator.		

Rather,	 we	 concluded	 that	 section	 3204(5)	 bars	 the	 creation	 of	 a	 financial	

interest	 that	 would	 likely	 produce	 incentives	 for	 favoritism	 that	 would	

undermine	the	purpose	of	the	Restructuring	Act.		Houlton	I, 2014	ME	38,	¶	36,	

87	A.3d	749.		To	adjudicate	 the	issue	presented	on	 this	appeal,	we	need	not	

decide	whether as	a	general	matter section	708	authorizes	the	Commission	to	

impose	 conditions	 that	 would	 negate an	 otherwise	 proscribed	 financial	

interest	when	T&D	and	generation	entities	become	affiliated.		Rather,	we need

hold only that the	Commission	acted	outside	of	its	authority	when	it	imposed

conditions	on	an	electricity	generator	such	as	APUC,	where	 those	conditions

contravene the	legislative	 framework	of	allowing	generators	to	operate	with	

very	 little	 regulatory	 governance.	 	 Because	 those	 conditions constitute	 a	

material portion	of	the	underlying framework	that	the	Commission	viewed	as	

necessary	to	approve	the	APUC	transaction,	we	must	vacate	the Commission’s	

decision	and	remand	with	instructions to	deny	the	reorganization	petition.

The	entry	is:

Order	 of	 the	 Public	 Utilities	 Commission

vacated.	 	 Remanded	 to	 the	 Commission	 with	

instructions	to	deny	the	petition.
21

On	the	briefs:

Alan	 G.	 Stone,	 Esq.,	 and	 Benjamin	 J.	 Smith,	 Esq.,	 Skelton,	

Taintor	 &	 Abbott,	 Auburn,	 for	 appellant	 Houlton	 Water	

Company	

Anthony	 Buxton,	 Esq.,	 Andrew	 Landry,	 Esq.,	 and	 Robert	

Borowski,	Esq.,	Preti,	Flaherty,	Beliveau	&	Pachios,	Augusta,	

for	appellant	Industrial	Energy	Consumer	Group

William	S.	Harwood,	Esq.,	and	Rachel	M.	Wertheimer,	Esq.,	

Verrill	Dana	LLP,	Portland,	for	appellee	Emera	Maine

Charles	 Cohen,	 Esq.,	 and	 Leslie	 Raber,	 Esq.,	 Maine	 Public	

Utilities	 Commission,	 Augusta,	 for appellee Maine	 Public	

Utilities	Commission

At	oral	argument:

Benjamin	 J.	 Smith,	 Esq.,	 for	 appellant	 Houlton	 Water	

Company

Charles	 Cohen,	 Esq.,	 for	 appellee	 Maine	 Public	 Utilities	

Commission

William	S.	Harwood,	Esq.,	for	appellee	Emera	Maine

Public	Utilities	Commission	docket	number	2011-170

FOR	CLERK	REFERENCE	ONLY