UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Alden T. Greenwood

d/b/a Alden Engineering Company,

Plaintiff

v. Civil No. 06-cv-270-SM

Opinion No. 2007 DNH 088

New Hampshire Public Utilities

Commission,

Defendant

O R D E R

Alden Greenwood brings this action against the New Hampshire

Public Utilities Commission (“PUC”) seeking declaratory and

injunctive relief. See generally 28 U.S.C. § 2201. Greenwood

claims that, in contravention of applicable federal law, the PUC

rescinded the final ten years of a 30-year rate schedule

applicable to three small hydroelectric facilities he owns and

operates. Specifically, he says federal law preempts the field

of rate regulation with respect to his generating facilities and

precludes the PUC from modifying the rates initially set. He

seeks a judicial declaration that the PUC’s purported rescission

order was invalid and that his original 30-year rate schedule

remains in full force. He also seeks an injunction preventing

the PUC from taking any action inconsistent with the original

order approving his 30-year rate schedule. 

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The parties appear to agree that there are no genuinely

disputed material facts and that the resolution of their dispute

turns exclusively on questions of law. Pending before the court

are the parties’ cross motions for summary judgment. For the

reasons set forth below, Greenwood’s motion for summary judgment

is granted and the PUC’s motion for summary judgment is denied. 

Standard of Review

When ruling on a party’s motion for summary judgment, the

court must “view the entire record in the light most hospitable

to the party opposing summary judgment, indulging all reasonable

inferences in that party’s favor.” Griggs-Ryan v. Smith, 904

F.2d 112, 115 (1st Cir. 1990). Summary judgment is appropriate

when the record reveals “no genuine issue as to any material fact

and . . . the moving party is entitled to a judgment as a matter

of law.” Fed. R. Civ. P. 56(c). In this context, “a fact is

‘material’ if it potentially affects the outcome of the suit and

a dispute over it is ‘genuine’ if the parties’ positions on the

issue are supported by conflicting evidence.” Int’l Ass’n of

Machinists and Aerospace Workers v. Winship Green Nursing Ctr.,

103 F.3d 196, 199-200 (1st Cir. 1996) (citations omitted). 

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Background

I. Federal Regulatory Scheme. 

In 1978, in an effort to encourage the development of

alternate energy sources and to reduce the nation’s dependance on

fossil fuels, Congress enacted the Public Utility Regulatory

Policies Act (“PURPA”). Section 210 of PURPA, 16 U.S.C. § 824a3, directs the Federal Energy Regulatory Commission (“FERC”) to

promulgate rules to encourage the development of small power

production facilities, including regulations requiring public

utilities to purchase electricity from qualifying small power

facilities (known as “qualifying facilities” or “QFs”). Among

other things, PURPA requires that those regulations insure that

the rates at which public utilities purchase electricity from

qualifying facilities “shall be just and reasonable to the

electric consumers of the electric utility and in the public

interest, and shall not discriminate against . . . qualifying

small power producers.” 16 U.S.C. § 824a-3(b).

A. Rates of Reimbursement. 

The FERC regulations require public utilities to purchase

electricity from qualifying facilities at a rate equal to the

utilities’ avoided cost, unless the state regulatory commission

(here, the PUC) determines that a lower rate is in the public

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interest, does not discriminate against qualifying facilities,

and is sufficient to encourage the construction of small power

producers. 18 C.F.R. § 292.304(b)(2). “Avoided cost” is the

“cost to the electric utility of the electric energy which, but

for the purchase from such cogenerator or small power producer,

such utility would generate or purchase from another source.” 16

U.S.C. § 824a-3(d). In short, it is the amount of money it would

have cost the public utility to generate (or purchase from

another source) the electricity produced by the small power

producer. 

The regulations promulgated by FERC also provide that the

qualifying facility may elect to have the rate at which it sells

electricity to the public utility based on either: (1) the

utility’s actual avoided costs, calculated at the time of

delivery; or (2) the utility’s predicted avoided costs at the

time of delivery, but calculated at the time the obligation is

incurred. 18 C.F.R. § 292.304(d)(2). The regulations go on to

provide that if the rates at which a utility must purchase

electricity from a qualifying facility are “based upon estimates

of avoided costs over the specific term of the contract or other

legally enforceable obligation, the rates for such purchases do

not violate this subpart if the rates for such purchases differ

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from [actual] avoided costs at the time of delivery.” 18 C.F.R.

§ 292.304(b)(5). 

A plain English translation of those regulations is this: 

a qualifying facility has the right to receive the benefit of its

long term rate schedule even if, due to changed circumstances or

even faulty predictions of the utility’s future avoided costs,

the price at which the utility is obligated to purchase

electricity at the time of delivery is unfavorable to the utility

(i.e., greater than its actual avoided cost). Moreover, the

regulatory and statutory requirement that the rates of

reimbursement to qualifying facilities be reasonable, nondiscriminatory, and in the public interest, are not violated even

if the estimates of the public utility’s future avoided costs

prove wholly inaccurate. Viewed from a slightly different

perspective, neither PURPA nor the FERC regulations provide any

basis to rescind or restructure a qualifying facility’s existing

rate structure simply because the public utility’s predicted

future avoided costs (which were estimated when the QF obtained

its long-term rate schedule) prove to be less than its actual

avoided costs over the pertinent time period. 

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B. Exemption from Certain State and Federal

Utility Regulation.

In a further effort to encourage the development of small

power producers, PURPA directs FERC to implement regulations

exempting qualifying facilities from certain state and federal

laws and regulations governing public utilities, including those

governing the rates charged by electric utilities. 16 U.S.C. §

824a-3(e). Accordingly, FERC’s regulations provide that a

“qualifying facility shall be exempted . . . from State laws or

regulations respecting . . . the rates of electric utilities.” 

18 C.F.R. § 292.602(c)(I). Consequently, once a state regulatory

authority implements FERC’s rules governing the purchase of

electricity from small power producers, and establishes the rates

at which qualifying facilities shall be reimbursed, any

subsequent efforts to modify those rates (at least as they apply

to qualifying facilities already producing power under

established reimbursement schedules) are preempted. See Smith

Cogeneration Mngt. v. Corporation Comm’n & Pub. Serv. Co., 863

P.2d 1227, 1240 (Okla. 1993) (“Reconsideration of long-term

contracts with established estimated avoided costs imposes

utility-type regulation over QFs. PURPA and FERC regulations

seek to prevent reconsideration of such contracts.”); Freehold

Cogeneration Assocs. v. Bd. of Regulatory Comm’rs, 44 F.3d 1178,

1192 (3rd Cir. 1995) (“The present attempt to either modify the

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[power purchase agreement between the utility and the QF] or

revoke [state regulatory] approval is ‘utility-type’ regulation -

exactly the type of regulation from which [the QF] is immune

under [16 U.S.C. § 824a-3(e)].”). 

In other words, once the state regulatory commission

establishes a reimbursement rate schedule for qualifying

facilities, and once a qualifying facility enters into a contract

with the public utility to provide electricity pursuant to that

rate schedule, state regulatory commission authority to revisit,

amend, or rescind that rate schedule no longer exists. As the

New Hampshire Supreme Court recognized, in some cases this might

mean that, over time, a utility will become obligated to purchase

electricity from a qualifying facility at rates higher than its

actual avoided cost. In effect, then, the utility will be

subsidizing the qualifying facility at the expense of its

ratepayers. Nevertheless, the court correctly noted that FERC

had specifically addressed that concern: 

The Commission recognizes this possibility, but is

cognizant that in other cases, the required rate will

turn out to be lower than the avoided cost at the time

of purchase. The Commission does not believe that the

reference in the statute to the incremental cost of

alternative energy was intended to require a minute-byminute evaluation of costs which would be checked

against rates established in long-term contracts

between qualifying facilities and electric utilities.

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Appeal of Pub. Serv. Co., 130 N.H. 285, 292-93 (1988) (quoting 45

Fed. Reg. 12,224 (1980)). Moreover, as the United States Supreme

Court observed, while utilities (and their ratepayers) might, in

some circumstances, be forced to pay qualifying utilities more

than their actual avoided cost for electricity, the “ratepayers

and the nation as a whole will benefit from the decreased

reliance on scarce fossil fuels, such as oil and gas, and the

more efficient use of energy.” American Paper Institute v.

American Elec. Power Serv. Corp., 461 U.S. 402, 406 (1983)

(quoting 45 Fed. Reg. 12,214 (1980)). 

It may seem odd that rates for electric power paid by

regulated utilities to small power producers are not themselves

subject to ongoing review by state regulatory commissions. But

Congress had good reasons to exempt qualifying facilities from

state utility-type rate regulation.

Unlike regulated public utilities, small power producers are

not guaranteed a reasonable rate of return on their investment. 

A regulated utility, like Public Service Company of New

Hampshire, is entitled to have included in its rate base not only

all legitimate costs incurred in producing (or, as here, in

acquiring) the power it delivers, but also a reasonable profit on

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its investment. Small power producers, however, must build

generating plants based upon anticipated revenue streams that are

not subject to adjustment to guarantee recovery of actual costs,

as they may change over time, and a reasonable profit.

Congress thought it important to encourage investment in

small power producing projects, like hydroelectric generation,

and one way to do so was to set firm rates to be paid for power

generated by the small producer over the life of typical

financing arrangements. Doing so permits an assessment of the

economic viability of such projects at the front end, which, in

turn, facilitates investment in and construction of such plants.

With fixed, long-term rate schedules, those considering

construction of small power production facilities are in a much

better position to accurately determine whether they can be

operated profitably and, therefore, are more likely to obtain the

financing from banks and/or investors necessary to create those

desirable facilities. 

The conferees recognize that cogenerators and small

power producers are different from electric utilities,

not being guaranteed a rate of return on their

activities generally or on the activities vis-a-vis the

sale of power to the utility and whose risk in

proceeding forward in the cogeneration or small power

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production enterprise is not guaranteed to be

recoverable. 

* * * 

[C]ogeneration is to be encouraged under this section

and therefore the examination of the level of rates

which should apply to the purchase by the utility of

the cogenerator’s or small power producer’s power

should not be burdened by the same examination as are

utility rate applications, but rather in a less

burdensome manner. The establishment of utility type

regulation over them would act as a significant

disincentive to firms interested in cogeneration and

small power production. 

American Paper Institute, 461 U.S. 402, 414 (1983) (quoting H.R.

Conf. Rep. No. 95-1750, 95th Cong., 2d Sess. 97-98, U.S.C.C.A.N.

1978, at 7831-7832). 

II. The PUC’s Rate Orders and Greenwood’s Hydroelectric Plants.

PURPA requires each state regulatory authority to implement

FERC’s avoided cost rules. 16 U.S.C. § 824a-3(f). Accordingly,

after conducting public hearings on the matter, the PUC entered

an order “updating and establishing the short term and long term

rates to be paid by Public Service of New Hampshire to small

power producers and cogenerators.” Re Small Energy Producers and

Cogenerators (Order no. 17,104), 69 N.H.P.U.C. 352, 353 (July 5,

1984) (the “Generic Rate Order”). Among other things, the

Generic Rate Order permits qualifying facilities to enter into

long-term contracts of five to 30 years. Id. at 365. It also

Case 1:06-cv-00270-SM Document 18 Filed 07/19/07 Page 10 of 29
1 That table represents the PUC’s best prediction of the

avoided cost to produce electricity for each year between 1984

and 2015. A qualifying facility could elect to receive

“levelized” rates for the duration of its contract - that is, a

fixed rate each year (i.e., the contract price would be “frontloaded” to help the QFs recover initial construction and

financing expenses). Alternatively, a QF could elect simply to

receive the public utility’s predicted avoided cost for each year

of its contract, as set forth in the table - rates that would

start relatively low in the early years of the contract and

escalate as the predicted avoided cost of the utility increased

over time. 

11

authorizes qualifying facilities to “select as their rates the

values shown [in the included table], levelized values for the

years of their obligation, or some rate in between, so long as

the cumulative net present values, discounted appropriately, do

not exceed the values shown in [the table].”1 

The Generic Rate Order goes on to provide that once a

qualifying facility has made a choice of rate plan and has

obtained approval for its particular rate schedule, the rate

schedule is not subject to change: 

The procedures and the new rates adopted herein will be

implemented with the effective date of this Order. 

. . . It is intended that avoided cost data will be

updated annually by the [public utility] and reviewed

by the Commission to determine the extent, if any, to

which the rates should be revised. With respect to

long-term arrangements, any such changes will be

applied prospectively only; those [qualifying

facilities] with existing long-term arrangements will

continue to be governed by those arrangements.

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Id. at 367 (emphasis supplied). So, just as FERC’s regulations

recognize that a utility’s actual avoided costs might well differ

from its predicted avoided costs, particularly over a long term,

the Generic Rate Order contemplates that possibility as well. 

But, consistent with FERC’s regulations, the Generic Rate Order

provides that qualifying facilities with existing contracts will

not have their rates altered simply because of such changes. See

generally 18 C.F.R. § 292.304(b)(5) (“the rates for such

purchases do not violate this subpart if the rates for such

purchases differ from avoided costs at the time of delivery.”). 

On August 13, 1985, the PUC approved Greenwood’s petition

for a non-levelized 30-year rate schedule (September 13, 1985

through September 13, 2015) for three hydroelectric plants:

Waterloom Falls, Otis Falls, and Chamberlain Falls. PUC Order

no. 17,814. Subsequently, Greenwood entered into Interconnection

Agreements with PSNH, pursuant to which PSNH became obligated to

compensate Greenwood for electricity produced by those three

plants at the rate provided in the PUC Generic Rate Order and

Greenwood’s approval order (order no. 17,814). In practice, that

meant PSNH would pay Greenwood approximately $0.06 per kilowatt

hour of electricity generated by each of his three hydroelectric

plants in the first year and that rate would increase each year,

Case 1:06-cv-00270-SM Document 18 Filed 07/19/07 Page 12 of 29
2 PSNH is not a party to this litigation. It

understandably and readily agreed to be bound by any order

relating to the rate at which it is obligated to compensate

Greenwood for electricity produced at his three hydroelectric

plants, since that cost will simply be included in its own rate

base. 

13

culminating in a rate of $0.71 per kilowatt hour in the thirtieth

year.2 

Three years later, however, the PUC had second thoughts

about offering small power producers the option to elect

unlevelized rates during the final ten years of 30-year

contracts. It seems the PUC realized that its projections about

PSNH’s long-term avoided costs were likely overstated. Sarah

Voll, the PUC’s Chief Economist, wrote a memo to the Commission

in which she made the following observations and recommendations:

One of the areas that the Economics Department would

like to clear up . . . is the problem of four projects

that have unlevelized rates for the last 10 years of a

30 year rate order. The Commission denied this type of

rate design once we realized the implications (71 cents

per KWH by 2015) but never reconsidered those rate

orders that had [already] been approved. 

We recommend making the adjustment now, when 2006 is

still 18 years away and in the context that [small

power producers] with long term rate orders of any type

are receiving benefits no longer available to [other

small power producers]. Action now would also reemphasize in a somewhat non-controversial way, the

Commission’s view that we retain authority over rate

orders. 

Case 1:06-cv-00270-SM Document 18 Filed 07/19/07 Page 13 of 29
3 Ms. Voll’s suggestion that the PUC “re-emphasize in a

somewhat non-controversial way, the Commission’s view that we

retain authority over rate orders,” appears to have anticipated

one of the issues presented in this case: whether the PUC does

retain ongoing authority to modify pre-existing long-term rate

orders applicable to qualifying facilities or whether (as

Greenwood suggests) such authority is pre-empted by PURPA and the

implementing FERC regulations. 

14

Administrative Record (“Admin. Rec.”) at 82.3 In response, in

May of 1988, the PUC rescinded the final ten years of the rate

order applicable to Greenwood’s three plants (order no. 17,814). 

Re Alden T. Greenwood (Order no. 19,095), 73 N.H.P.U.C. 228 (May

19, 1988). The PUC reasoned that: 

a rate design incorporating unlevelized 1985 estimates

of avoided costs for the last ten years of the orders

was not just and reasonable to the electric consumers

of the electric utility nor in the public interest as

required by the rules of the Federal Energy Regulatory

Commission and by the Public Regulatory Policies Act of

1978. 

Id. at 228. 

It appears the PUC failed to provide Greenwood with notice

of its intention to revisit his previously approved 30-year rate

schedule. But, when Greenwood eventually learned of the PUC’s

rescission order, he moved for reconsideration. The PUC

scheduled a hearing, at which Greenwood appeared, pro se. At

that hearing, Greenwood did not challenge the PUC’s exercise of

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authority to rescind the last ten years of the rate schedule

applicable to his qualifying facilities; in fact, despite federal

law to the contrary, he seemed to acquiesce in the PUC’s exercise

of that claimed authority. See Testimony of Mr. Greenwood,

Admin. Rec. at 139-40. See also Mr. Greenwood’s written

submission to the PUC, Admin. Rec. at 102 (“No argument exists to

the fact the Commission is within its power to change the rate. 

Also it most certainly will be to the benefit of future rate

payers.”). Greenwood sought only to let the PUC know the

substantial economic hardship he would bear if it rescinded the

last ten years of his rate order and, if he could not persuade

the PUC to revisit that decision, he hoped to find a way to

negotiate a new rate for those ten years. Id. at 140-41. 

Following that hearing, the PUC issued order number 19,257,

in which it concluded that “Greenwood has presented no fact or

argument to cause us to disturb our findings, and that order no.

19,095 is lawful, reasonable and in the public good.” Admin.

Rec. at 157. Accordingly, the PUC let stand its order rescinding

the last ten year’s of Greenwood’s rate order. Greenwood did not

appeal that decision to the New Hampshire Supreme Court. See

N.H. Rev. Stat. Ann. (“RSA”) ch. 541:6. 

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Nearly 17 years later, as the first 20 years of his rate

schedule were about to expire (and his plants were about to move

into the purportedly rescinded years 21 through 30 of his

original rate order), Greenwood filed a petition with the PUC

seeking a declaratory ruling that: (1) the PUC’s rescission order

(number 19,095) violated the provisions of PURPA and the

pertinent FERC regulations; and (2) the PUC’s original approval

of his rate schedule (order number 17,814) remains in full force

and effect for its entire 30-year term. The PUC denied

Greenwood’s petition, concluding that the doctrine of res

judicata prevented him from revisiting the issues the PUC

resolved against him nearly 17 years earlier. Specifically, the

PUC concluded: 

In the [prior] order, the Commissioner ruled that, upon

reconsideration of 30-year rate orders issued as to

both the three [Greenwood] facilities as well as the

Lakeport Dam project owned by a different party, the

public interest required the Commission to limit the

effective period of the previously approved rates to 20

years. 

* * *

[Greenwood] appeared at the November 28, 1998 hearing

[on his motion for reconsideration] and conceded that

the Commission had acted within its authority in

issuing the rescission order and did not contest the

merits of the order as set forth in Commission staff

testimony and the order itself. The Commission

therefore ruled that, notwithstanding the arguments in

[Greenwood’s] reconsideration motion, the [rescission

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order] of the preceding June was lawful, reasonable and

in the public good. 

The relief now requested by [Greenwood] is accordingly

barred by the doctrine of res judicata. 

Admin rec. at 183, 184-85, Re Alden T. Greenwood (Order no.

24,613), DE 05-150 (April 13, 2006). 

Greenwood moved for reconsideration, asserting that PURPA

and pertinent FERC regulations divested the PUC of authority to

rescind the Generic Rate Order and, therefore, the PUC lacked

jurisdiction to act as it did. Consequently, said Greenwood, the

PUC’s prior decisions were not entitled to any preclusive effect. 

The PUC rejected that argument, concluding that Greenwood waived

his right to pursue his claim in federal court and voluntarily

submitted himself to the jurisdiction of the PUC. 

Although, as Freehold subsequently made clear,

[Greenwood] could have withheld his acquiescence and

likely argued with success that he had a right to a

federal forum, he also had the right under both state

and federal law to let the Commission proceeding

advance to binding final judgment. Accordingly,

[Greenwood’s] present argument that the Commission

lacked subject matter jurisdiction, rendering its 1988

ruling ineffective, is without merit. 

Admin. Rec. at 203, Re Alden T. Greenwood (Order No. 24,638), DE

05-150 (June 22, 2006). In response, Greenwood filed this

petition for declaratory and injunctive relief. 

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Discussion

The New Hampshire Public Utilities Commission’s order

rescinding the final ten years of Greenwood’s previously-approved

rate schedule was, for several reasons, issued in error. First,

as the Commission itself established in the Generic Rate Order,

any “changes [to the rate schedule approved in that order] will

be applied prospectively only; those [qualifying facilities] with

existing long-term arrangements will continue to be governed by

those arrangements.” Generic Rate Order, 69 N.H.P.U.C. at 367.

Second, as justification for its rescission order, the

Commission concluded that, because it’s projections for the

public utility’s avoided costs were likely inaccurate,

Greenwood’s rate schedule was “not just and reasonable to the

electric consumers of the electric utility nor in the public

interest as required by the rules of the Federal Energy

Regulatory Commission and by the Public Regulatory Policies Act

of 1978.” Order no. 19,095, 73 N.H.P.U.C. at 228 (emphasis

supplied). But, as previously noted, the FERC regulations

specifically provide that:

In the case in which the rates for purchases are based

upon estimates of avoided costs over the specific term

of the contract or other legally enforceable

obligation, the rates for such purchases do not violate

this subpart [which requires reimbursement rates to be

Case 1:06-cv-00270-SM Document 18 Filed 07/19/07 Page 18 of 29
4 The PUC acknowledges that, “In the Freehold case, the

U.S. Court of Appeals for the Third Circuit determined in 1995

that a state utility regulatory agency could not revisit a

previously approved long term rate determination under PURPA to

reflect changed circumstances. As noted by Plaintiff in its

19

reasonable, in the public interest, and nondiscriminatory toward qualifying facilities] if the

rates for such purchases differ from avoided costs at

the time of delivery. 

18 C.F.R. § 292.304(b)(5) (emphasis supplied). In other words,

even if estimates about future avoided costs prove inaccurate,

resulting in higher (or lower) reimbursement rates for QFs than

would otherwise be the case, that discrepancy does not render the

rates paid to the QFs unreasonable, contrary to the public

interest, discriminatory, or violative of PURPA or the

implementing FERC regulations. 

Finally, and perhaps most importantly, PURPA and its

implementing regulations plainly divest the PUC of authority to

amend or rescind a qualifying facility’s rate order once it is

approved and in place. 16 U.S.C. § 824a-3(e); 18 C.F.R. §

292.602(c)(I). See also Freehold, 44 F.3d at 1194; Smith

Cogeneration, 863 P.2d at 1240. As the PUC itself seems to

concede, it was without legal authority to issue (and enforce)

its order rescinding the last ten years of the rate schedule set

forth in the Generic Rate Order.4 

Case 1:06-cv-00270-SM Document 18 Filed 07/19/07 Page 19 of 29
original request to the PUC for a declaratory order, the PUC has

acknowledged [in prior orders] the persuasive effect of the

Freehold case.” Defendant’s memorandum (document no. 12-2) at 6

n.3. 

20

Nevertheless, a significant question remains: Whether

Greenwood is precluded from challenging that rescission order

now. He is not. 

I. Res Judicata. 

The PUC asserts that Greenwood’s action is barred by the

doctrine of res judicata. The federal full faith and credit

statute, 28 U.S.C. § 1738, commands federal courts to employ

state res judicata rules when determining the preclusive effect,

if any, to be given to a state court determination. In Marrese

v. American Academy of Orthopaedic Surgeons, 470 U.S. 373 (1985),

the Supreme Court held:

The preclusive effect of a state court judgment in a

subsequent federal lawsuit generally is determined by

the full faith and credit statute, which provides that

state judicial proceedings “shall have the same full

faith and credit in every court within the United

States . . . as they have by law or usage in the courts

of such State . . . from which they are taken.” 28

U.S.C. § 1738. This statute directs a federal court to

refer to the preclusion law of the state in which

judgment was rendered. It has long been established

that § 1738 does not allow federal courts to employ

their own rules of res judicata in determining the

effect of state judgments. Rather, it goes beyond the

common law and commands a federal court to accept the

Case 1:06-cv-00270-SM Document 18 Filed 07/19/07 Page 20 of 29
21

rules chosen by the State from which the judgment is

taken. 

Id. at 380 (citations and internal punctuation omitted). In New

Hampshire, “[t]he essence of the doctrine of res judicata is that

a final judgment by a court of competent jurisdiction is

conclusive upon the parties in a subsequent litigation involving

the same cause of action.” Berthiaume v. McCormack, 153 N.H.

239, 253 (2006) (citing Eastern Marine Constr. Corp. v. First

Southern Leasing, 129 N.H. 270, 273 (1987)). Here, the essential

element that is plainly lacking is a “court of competent

jurisdiction.” 

To be sure, both the court of appeals for this circuit and

the New Hampshire Supreme Court have recognized that the

decisions of administrative agencies are normally entitled to res

judicata effect when the agency acted in a judicial capacity. 

See Aunyx Corp. v. Canon U.S.A., Inc., 978 F.2d 3, 7 (1st Cir.

1992) (citing University of Tennessee v. Elliott, 478 U.S. 788,

797-98 (1986)). See also Morin v. J.H. Valliere Co., 113 N.H.

431, 434 (1973) (“Res judicata has been applied to a decision of

an administrative agency, . . . which is rendered in a judicial

capacity and resolves disputed issues properly before it which

the parties have had an adequate opportunity to litigate.”). 

Case 1:06-cv-00270-SM Document 18 Filed 07/19/07 Page 21 of 29
22

But, for an administrative agency’s decision to have preclusive

effect, the agency must have had the legal authority to render

that decision. And, as Freehold and Smith Cogeneration make

clear, both PURPA and the FERC regulations divest state

regulatory authorities of the power to amend or rescind a

qualifying facility’s rate schedule once it has been approved. 

But, says the PUC, while it may have lacked the legal

authority to rescind the final ten years of Greenwood’s rate

schedule, the FERC regulations (18 C.F.R. § 292.301(b)(1)) permit

Greenwood to waive his federal statutory rights and consent to

have disputes heard in state court. The PUC argues that

Greenwood did precisely that - when a “dispute” arose concerning

the PUC’s (ultra vires) decision to rescind the final ten years

of the rate schedule, Greenwood voluntarily agreed to resolve it

before the PUC, thereby: (1) vesting the PUC with jurisdiction

over the dispute; and (2) waiving his right to challenge the

PUC’s rescission order in federal court. The court disagrees. 

First, nothing in the record suggests that Greenwood (who

was appearing pro se at the time) knowingly waived any rights

conferred upon him by PURPA and its implementing regulations. 

Nor would it be appropriate to conclude that he “consented” to

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have his “dispute” over the PUC’s unlawful order resolved by the

PUC itself. As the Supreme Court has observed, “consent [can]

not be established by showing no more than acquiescence to a

claim of lawful authority.” Schneckloth v. Bustamonte, 412 U.S.

218, 283 (1973) (citation and internal punctuation omitted). 

Interestingly, although the PUC gave Greenwood every reason

to believe that its authority to rescind the final ten years of

his rate schedule was beyond question, the record suggests that

the PUC understood that its authority in that realm was, at the

very most, questionable. See, e.g., Voll Memorandum, Admin. Rec.

at 82 (urging the PUC to assert, in “somewhat non-controversial

way,” its erroneous view that it retains rate-making authority

over qualified facilities). And, in an apparent effort to

exercise that questionable rate-making authority, the PUC never

advised Greenwood that he had the right to challenge the

rescission order in federal court. Given the circumstances, the

PUC’s assertion that Greenwood “waived” his right to pursue his

remedies in federal court and “consented” to the PUC’s

jurisdiction over those claims is unpersuasive. 

Moreover, even though Greenwood might well have had the

ability to waive any federal rights granted by PURPA, see

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Freehold, 44 F.3d at 1187, he could not thereby vest the PUC with

authority that was specifically withheld by Congress - that is,

the authority to engage in “utility-type” regulation of

qualifying facilities including, of course, the authority to

amend or rescind their rate schedules. See 16 U.S.C. § 824a3(e). See also 18 C.F.R. § 292.602(c)(I). Because the PUC was

completely without authority to rescind the final ten years of

Greenwood’s 30-year rate schedule, its decision in that regard is

a nullity, and not entitled to preclusive effect. Greenwood’s

current claims are not barred by the doctrine of res judicata. 

See generally Marrese, 470 U.S. at 382 (“If state preclusion law

includes [the] requirement of prior jurisdictional competency,

which is generally true, a state judgment will not have claim

preclusive effect on a cause of action within the exclusive

jurisdiction of the federal courts.”) (emphasis in original);

Wolf v. Gruntal & Co., 45 F.3d 524, 527 (1st Cir. 1995) (“Res

judicata is not implicated if the forum which rendered the prior

‘judgment’ lacked ‘jurisdiction’ over the putatively precluded

claim.”) (parentheticals omitted); Lightsey v. Harding, Dahm &

Co., 623 F.2d 1219, 1223 (7th Cir. 1980) (“Since the Commission

had no authority to decide the issue that was before the district

court, the order of the Commission has no collateral estoppel

effect.”).

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II. Statute of Limitations. 

Next, the PUC asserts that Greenwood’s petition for

declaratory relief is untimely. Because the Declaratory Judgment

Act sets no limitations period for actions brought pursuant to

its provisions, and because PURPA is equally silent on that

issue, the PUC points out that this court must adopt the most

analogous state limitations period. And, says the PUC, even

employing the most liberal of the arguably applicable state

limitations periods - the three year period provided for personal

actions under RSA 508:4 - Greenwood’s current challenge to the

rescission order of 1988 was filed nearly 15 years too late. 

Again, the court disagrees. 

In 1988, the PUC issued order no. 19,095 rescinding the

final ten years of Greenwood’s previously approved 30-year rate

schedule. That order did not, however, alter Greenwood’s rate

schedule for the first 20 years. Greenwood was, then, presented

with a choice. As the PUC has previously acknowledged, he could

have immediately challenged the rescission order in federal

court. See Re Alden T. Greenwood (Order no. 24,638), (June 22,

2006) (“as Freehold . . . made clear, Alden [Greenwood] could

have withheld his acquiescence and likely argued with success

that he had a right to a federal forum.”). In other words,

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although he would not feel the effect of the PUC’s efforts to

rescind a portion of his rate schedule for another 17 years,

Greenwood could have treated the PUC’s rescission order as a sort

of anticipatory repudiation of its obligations to him, and

brought suit challenging that decision immediately. 

But, on the other hand, because he would not be affected by

the PUC’s invalid attempt to rescind the rate order until

September of 2006, Greenwood could have elected to wait until

then to bring suit. See, e.g., State Employees’ Ass’n v. Belknap

County, 122 N.H. 614, 622 (1982) (noting that, consistent with

the doctrine of anticipatory breach, a plaintiff may elect to

bring suit at any time between the other party’s repudiation of

its future obligations under the contract and the date on which

that other party actually becomes obligated to perform a specific

duty under the contract). Because he filed his federal petition

for declaratory and injunctive relief on July 21, 2006 (i.e.,

before the date on which the final ten years of his rate schedule

were to begin) Greenwood’s petition is timely, regardless of

which state limitations period applies to this action. 

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III. Equitable Principles. 

Finally, the PUC asserts that the doctrine of laches

precludes Greenwood from pursuing his current action. But, when 

a claim is brought within the pertinent limitations period,

laches imposes a bar only when the plaintiff’s delay in bringing

suit was unreasonable and the defendant suffered some prejudice. 

For the reasons set forth above, Greenwood did not act

unreasonably in waiting to bring suit until shortly before the

PUC’s partial rescission order (no. 19,095) would have adversely

affected him. Nor has the PUC demonstrated that it relied to its

detriment on the validity of that order or that it has been

prejudiced in any way by Greenwood’s election to bring suit only

recently. Moreover, for the reasons discussed above, the PUC

hardly appears before this court with “clean hands” - a necessary

prerequisite to obtaining the type of equitable relief it seeks. 

IV. Greenwood’s Requested Relief.

In light of the foregoing, the court concludes that

Greenwood’s petition for declaratory judgment and injunctive

relief is not barred by res judicata, the statute of limitations,

or laches. Consistent with the holdings in Freehold and Smith

Cogeneration, supra, the court also concludes that the PUC was

without authority to partially rescind Greenwood’s 30-year rate

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schedule. Once that rate schedule was approved, both PURPA and

the enabling regulations enacted by FERC precluded the PUC from

exercising that sort of “utility-type regulation” over

Greenwood’s qualifying facilities. 

Conclusion

The PUC’s rescission order of June 30, 1988 (order no.

19,095) was a nullity and had no effect on Greenwood’s 30-year

rate schedule and the PUC’s original approval of his rate

schedule (order no. 17,814) remains in full force and effect for

its entire 30-year term. Plaintiff’s motion for summary judgment

(document no. 11) is, therefore, granted. Defendant’s motion for

summary judgment (document no. 12) is denied. 

The PUC is hereby enjoined from taking any action that is

contrary to the original approval of Greenwood’s rate schedule

(order no. 17,814) including, but not limited to, attempts to

directly or indirectly enforce provisions of the preempted orders

(orders no. 19,095; 24,613; and 24,638). 

The Clerk of Court shall enter judgment in favor of

plaintiff and close the case. 

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SO ORDERED.

____________________________

Steven J. McAuliffe

Chief Judge

July 19, 2007

cc: Thomas J. Donovan, Esq.

Mary E. Maloney, Esq.

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