Opinion ID: 1119449
Heading Depth: 1
Heading Rank: 2

Heading: cogeneration is entitled to litigate force majeure

Text: Cogeneration asserts that it is entitled to litigate whether force majeure protected it from default of its obligation to post the second security installment. We agree. The dispositive issue in this appeal is the validity and effect of IPUC's order that Cogeneration post the second security installment. Idaho Power contends that Cogeneration cannot sustain a force majeure defense in the face of IPUC's order to post the security for the public interest. We disagree. In making its decision on Idaho Power's motion for partial summary judgment, the trial court was presented with the following undisputed facts: a January 1, 1994 breach by Cogeneration of its obligation to post the second installment of the security; notice of the January 1st default; a claim of force majeure; and an IPUC order declining to address the issue of force majeure, but nonetheless giving Cogeneration until May 1, 1995a seventeen month extensionto post the security as otherwise provided in the agreement. At Idaho Power's urging, the trial court focused exclusively on the IPUC requirement that Cogeneration post the second installment of the security by May 1, 1995. The trial court concluded that Cogeneration's violation of the IPUC order was a material breach of the agreement which could prevail over an event of force majeure under the agreement. We conclude that the trial court should not have given the IPUC order the weight and significance it did. While there is no dispute concerning IPUC's authority to approve PURPA contracts, the subsequent interpretation and enforcement of contracts does not generally fall within its powers. Afton Energy, Inc. v. Idaho Power Co., 111 Idaho 925, 928, 729 P.2d 400, 403 (1986) ( Afton IV ) (declaring district court rather than IPUC the appropriate forum for contract disputes between utilities and QFs); see also Lemhi Tel. Co. v. Mountain States Tel. & Tel. Co., 98 Idaho 692, 696, 571 P.2d 753, 757 (1977). It is true that we have said IPUC can modify a utility contract when it is adverse to the public interest, but here IPUC neither created nor eliminated a contract obligation based on the public interest. Lemhi, 98 Idaho at 697, 571 P.2d at 758; Agric. Prod. Corp. v. Utah Power & Light Co., 98 Idaho 23, 29, 557 P.2d 617, 623 (1976). Even if IPUC can modify PURPA contracts in the public interest, there is no evidence that it was in the public interest for IPUC to grant Cogeneration a seventeen month extension on posting the security. As IPUC itself recognizes, district court is the appropriate forum for utility contract disputes. Accordingly, IPUC's attempted enforcement of the agreement is of no consequence. We focus on Cogeneration's failure to post the second security installment in January 1994, Idaho Power's subsequent notice of default, and Cogeneration's defense of force majeure. Although the agreement required Cogeneration to the post the security, it also provides for the suspension of both parties' performance of their obligations under this Agreement for the duration of an event of force majeure. Therefore, the posting of the security is suspended for the duration of an event of force majeure. For these reasons, the trial court should not have granted partial summary judgment but should have allowed Cogeneration to litigate whether an event of force majeure protected it from default in posting the second security installment on January 1, 1994.