Opinion ID: 2337474
Heading Depth: 1
Heading Rank: 4

Heading: effect of contract between utilities

Text: Since in our view the Commission has dealt adequately and accurately with this issue, we quote what we deem to be the more significant and dispositive portions of the decree: Another issue which was raised before the Commission, and which was common to all the cases, was the effect of a contract between Farm-Home Electric Cooperative, Inc., a predecessor to Eastern Maine Electric Cooperative, Incorporated, and Maine Public Service Company. This contract was dated June 14, 1940, and we find that Eastern Maine Electric Cooperative, Incorporated, is the successor under this contract to all of the rights of Farm-Home Electric Cooperative, Inc. The pertinent provisions of the contract which would apply to these cases are as follows: `17. Neither party, unless ordered so to do by a lawful order issued by a properly constituted authority, shall distribute or furnish electric energy to anyone who, at the time of the proposed service, is receiving electric service from the other, or whose premises are capable of being served by the existing facilities of the other without extension of its distribution system other than by the construction of lines not exceeding three hundred feet in length. `18. Neither party, unless ordered so to do by a lawful order issued by a properly constituted authority, shall duplicate the other's facilities, except insofar as such duplication shall be necessary in order to transmit electric energy between unconnected points on its lines, but no services shall be rendered from such interconnecting facilities in competition with the other party. `20. This Agreement shall become effective on the date of connection of the system of the Company to the system of the consumer and shall remain in effect for a period of three years from the date of connection and thereafter, from year to year, unless and until at least one year prior to the expiration of the then effective contract year or any subsequent year, either party shall notify the other in writing of its desire to terminate the Agreement at the expiration of the said year.' The testimony was clear that neither party had terminated this contract.       Assuming for the purposes of this decision that this contract is valid, and expressly reserving the right at any subsequent time to question the validity of the Agreement, either as of the date of the execution of same, or as of this date, the Commission finds that this contract is not a bar to the action contemplated in this proceeding. In fact, Maine Public Service Company's position is consistent with the contract and its denial of service to Petitioners is based upon it. This contract at the time of its execution was a contract between a fully regulated utility, Maine Public Service Company, and a prospective customer, an electric cooperative. The purpose of the contract, as we understand it, was to define certain rights between the respective contracting parties, but always reserving as we interpret the contract, to this Commission and any other body properly constituted and authorized, the authority to change or alter the understanding between the parties as the public interest and demands shall require with specific reference to the right to serve certain customers. The key terms of the contract in both paragraphs 17 and 18 are the words, `unless ordered so to do by a lawful order issued by a properly constituted authority.' We find, and so rule, that this Commission is a properly constituted authority within the meaning of the contract to order Maine Public Service Company to furnish electric service to the Petitioners, if we find it economically feasible, notwithstanding the contract of June 14, 1940. As we find the parties today, Maine Public Service Company is fully regulated and Eastern Maine Electric Cooperative (successor to Farm-Home Electric Cooperative, Inc.) is a nonregulated utility. The reservation in the contract clearly vests in this Commission the authority to act in this proceeding. The Commission, therefore, will proceed to make the determination required under Heath with regard to economic feasibility. It has been suggested that Maine Public Service Company cannot be ordered to serve the Petitioners in this case because Maine Public Service Company breached the contract by offering service to the Cooperative's customers.       We point out that the contract does not by its express terms or by necessary implication bar Maine Public Service Company from soliciting members of the Cooperative to become a customer. We were asked to take judicial notice in U#2648 of whether or not this contract was on file with the Commission and our action or inaction with regard to same. We have found that a copy of the contract in question is on file with the Commission but we find that the Commission has neither approved nor disapproved the contract. There is no problem of abandonment of the right to serve the Petitioners by Maine Public Service Company arising out of the consent of Maine Public Service Company that the Cooperative serve the Petitioners or their predecessors in title. Under similar circumstances, the Law Court held that such consent was not to be considered an abandonment. Heath v. Maine Public Service Company, 161 Me. 217, 224; 210 A.2d 701, 706; 59 P.U.R.3d 321, 325 (1965). In view of the Commission's decision not to let the contract stand in the way of its ordering the requested service where economically feasible, we need not here determine whether or not the contract contravened public policy as being in restraint of trade, especially where it never received the express approval of the Commission. But see Montana-Dakota Utilities Co. v. Williams Electric Coop. (1959), 8 Cir., 263 F.2d 431 and Ohio Midland Light & Power Co. v. Columbus & South. Ohio E. Co. (1954), Ohio Com.Pl., 123 N.E.2d 675.