Opinion ID: 2038160
Heading Depth: 1
Heading Rank: 5

Heading: estoppel and related concepts.

Text: We now turn to the argument by the investor-owned utilities that because they acted in reliance on prior department decisions the department is estopped from denying financing for expenditures incurred prior to issuance of the generic order, and to MMWEC's similar contention that, because it relied on prior department approval in entering into contracts which created ownership obligations, issuance of the MMWEC bonds must be authorized as reasonably necessary. First of all, we do not consider the department's reasonable exercise of its authority under G.L.c. 164, § 14, or St. 1975, c. 775, § 17, to be subject to amendment through contract by those it is intended to govern. In addition, if ever we were inclined to apply principles of estoppel to public utilities, we should certainly not do so in a case such as this where application of those principles would tend to negate requirements of law intended to protect the public interest. Phipps Prods. Corp. v. Massachusetts Bay Transp. Auth., 387 Mass. 687, 693 (1982), and cases cited. Cf. Selectmen of Topsfield v. Department of Pub. Utils., 267 Mass. 343, 349-350 (1929). MMWEC also asserts that it is entitled to but has not had the benefit of reasoned consistency in the department's decisions. It asserts that the department did not adhere to certain guidelines which have limited its inquiry in the past. The department acknowledged that its level of review must be more detailed where extraordinary circumstances raise serious questions regarding the efficacy of the purpose for the financing or the adequacy of management's decision-making process. It then recited what it considered to be those extraordinary circumstances, which include the substantial cost increases and the delays in the completion dates, as well as the large proportion of the Companies' capitalization associated with one ... project and the magnitude of MMWEC's financing request. We believe that the department exercised its authority appropriately and met its responsibility. Fitchburg charges the department with having been unwilling to address in the order the consequences of Fitchburg's nonpayment of its JOA obligations, with ordering Fitchburg out of Seabrook I, and with making it illegal for Fitchburg to continue payments to the project. It predicted that, as a consequence, it may by now be engaged in litigation which would threaten its financial integrity. Fitchburg assumes, as we are unwilling to do, that the department knew in advance that the utility would reject the offered conditions, that Fitchburg would not use other means of making its payments, that it would not return to the department with a more persuasive case, that non-payment would prove to be a default under the JOA, and that the order would be the sole cause. The department sought to ameliorate the impact of its order. It did not order Fitchburg out and did not make it illegal for Fitchburg to make future payments. The department fulfilled its duty under G.L.c. 164, § 14. Fitchburg Gas & Elec. Light Co. v. Department of Pub. Utils., supra at 678. Moreover, as we noted, A proceeding pursuant to G.L.c. 164, § 14, is meant to serve as a screening mechanism `to shield the public from the effects of management's unchecked discretion in the limited realm of capital spending projects that are so large in relation to the company's internal funds as not to be sustainable without external financing.' Id. at 678-679, quoting Pennsylvania Pub. Util. Comm'n v. Philadelphia Elec. Co., 501 Pa. 153, 161 (1983). Moreover, the department correctly indicates that neither the language of the JOA nor the reasonableness of future participation by the investor-owned utilities in Seabrook I were questions directly presented by the parties or addressed by the department. The department also had to weigh the competing harm to ratepayers. We do not hold the department, under these circumstances, to the level of clairvoyance suggested. We briefly respond to Fitchburg's assertions that the department ignored the effect of a loss of any rights to Seabrook I on its ability to find and finance alternative power sources and that the court should not defer to the department because it did not review or make findings about Fitchburg's financial condition. The department, with input from Fitchburg, defined the scope of the proceeding now under review and, as discussed earlier, fulfilled its responsibility. The petitioners did not meet their burden of proof.