Court Opinion

ID: 9750998
Source: CourtListenerOpinion
Date Created: 2023-08-28 15:56:08.622293+00
Date Added: 2024-06-11T09:13:34.986038
License: Public Domain

ALEXANDER, J.,
with whom LEVY, J., joins,
dissenting.
[¶ 20] In this appeal, the Court vacates the decision of the Public Utilities Commission (the Commission) by characteriz*966ing descriptive findings of fact as conclusions of law and applying a clarification of law that took effect after this appeal was argued to hold that the Commission erred, as a matter of law, in making its findings of fact based on the record and the law as it existed in 2010. From the Court’s abandonment of sound principles of deferential appellate review, I respectfully dissent.
[¶ 21] On this appeal, Covanta bears the burden of persuasion. See Bizier v. Town of Turner, 2011 ME 116, ¶ 8, 32 A.3d 1048; Anderson v. Me. Pub. Emps. Ret. Sys., 2009 ME 134, ¶3, 985 A.2d 501. Further, as the applicant before the Commission, Covanta bore the burden of proof to demonstrate that each of its facilities qualified for designation as a new renewable capacity resource facility pursuant to 35-A M.R.S. § 3210 (2010). See 35-A M.R.S. § 1314 (2010). Pursuant to that law, which governed the Commission action, a new renewable capacity resource facility could include a “refurbished” facility as that term appeared in 35-A M.R.S. § 3210(2)(B-4)(4) prior to the 2011 amendment.
[¶ 22] In support of its application, Co-vanta stated the total cost of improvements it alleged it had made to refurbish its facilities. Further, Covanta provided a list, divided by year and by facility, of what it characterized as the refurbishments at each facility over the past five years. It appears that these lists were also used as the basis for Covanta’s estimates of improvements that had been capitalized rather than expensed for tax purposes in 2009 and 2010, because no other lists of projects appear in the record submitted to this Court.
[¶ 23] A total of 102 refurbishment projects that each had a cost of at least $10,000 appear on these lists. As the Court’s opinion notes, the total cost for the Jonesboro claimed refurbishments was $6,097,522.49; the total cost for the West Enfield claimed refurbishments was $3,969,515.10. However, a cursory review of these lists apparently led the Commission to conclude that many of these projects, claimed as refurbishments, were more in the nature of regular maintenance than long-term capital improvements.
[¶ 24] Of these 102 refurbishment projects, Covanta identified twenty-six as having a useful life, when new, of ten years or less. Many were identified as having a useful life, when new, of five years or less. These short-life projects, on regular replacement schedules, included over $2,469,000 for U-beams, which individually were identified as having useful lives, when new, of three, four, or five years. The U-beams were the largest cost items on Co-vanta’s list. Many other items that the Commission reasonably could have concluded were maintenance items appear on this list, but the items and their costs were not addressed in the Commission’s findings and are not listed here because the list is subject to a confidentiality order.
[¶ 25] In a separate letter supporting its application, Covanta asserted that, on its tax returns for 2009 and 2010, it had treated the majority of its expenditures for plant improvements as capital improvements rather than expenses. Covanta did not provide copies of its tax returns, or portions thereof, that could have confirmed these claims. Instead, it provided “estimates” of how it had treated those expenditures for tax purposes, with reference to lists of expenditures that were apparently the same or similar to the refurbishments lists discussed above.5
*967[¶ 26] After the Commission found that Covanta had failed to prove that its facilities qualified as new renewable resource facilities, Covanta filed the motion for reconsideration referenced in the Court’s opinion. In support of that motion, Covan-ta submitted an affidavit by its local plant manager conceding that the affidavit’s characterization of items as “refurbishments” differed from previous characterizations that had been submitted before the Commission reached its decision.
[¶ 27] The Commission was not bound to accept these after-the-fact revisions of the list of claimed refurbishments as true and correct, and it did not do so. It denied the motion for reconsideration. The motion is mentioned here only to highlight Covanta’s apparent concession that alleged defects in Covanta’s evidence in the original proceeding could have led the Commission to conclude, as it did, that many of the listed projects were maintenance, not capital improvement items.
[¶ 28] Presented with conflicting evidence as to whether expenditures were properly viewed as regular maintenance or capital improvements and vague estimates relating to tax treatment of expenditures for refurbishments for only two of the five years at issue, the Commission determined that Covanta had failed to meet its burden of proof to demonstrate that its facilities were sufficiently refurbished to qualify as new renewable capacity resource facilities, pursuant to 85-A M.R.S. § 3210. As Covanta had the burden of proof, and the Commission found that Co-vanta had failed to meet its burden of proof, Covanta can prevail on appeal only if it can demonstrate that the record before the Commission compelled the conclusion that Covanta’s vague and confusing evidence of improvements qualified its facilities as new renewable resource facilities. See Handrahan v. Malenko, 2011 ME 15, ¶ 13, 12 A.3d 79; Kelley v. Me. Pub. Emps. Ret. Sys., 2009 ME 27, ¶ 16, 967 A.2d 676. Because Covanta cannot demonstrate that the record before the Commission, when it found that Covanta had failed to meet its burden of proof, compelled a finding in Covanta’s favor, the Court’s analysis should go no further.
[¶ 29] Instead of focusing on Covanta’s failure of proof, much attention in this appeal has focused on apparent confusion in interpretation of the term “refurbished.” Neither the then-applicable legislation, nor its legislative history, assist us in determining the meaning of the word “refurbished,” or whether the identified repairs and replacements to the generating units in this case are refurbishment and renewal or just regular maintenance. As the manager’s affidavit in support of the motion for reconsideration demonstrates, even Covan-ta itself and the prior owner could not determine what is a repair expense and what is a refurbishment expense.
[¶ 30] Because, when the Commission had this matter under consideration, those questions could not be resolved by looking at the text of the statute alone, the statute and definition of the term “refurbished” is ambiguous. When a statute is ambiguous, we apply rules of construction and look to agency interpretation to determine the meaning of an ambiguous statute. Cobb v. Bd. of Counseling Prof'ls Licensure, 2006 ME 48, ¶ 13, 896 A.2d 271.
[¶ 31] In attempting to determine the meaning of an ambiguous statute, an agency’s interpretation of the statute is not conclusive. See Dep’t of Corr. v. Pub. Utils. Comm’n, 2009 ME 40, ¶ 8, 968 A.2d 1047. However, we have stated that we will review an agency’s interpretation of a statute *968that the agency is charged with administering with “great deference” and will uphold the agency’s interpretation unless contrary to the plain meaning of the statute. Id.; S.D. Warren Co. v. Bd. of Envtl. Prot., 2005 ME 27, ¶¶ 4-5, 868 A.2d 210, aff'd, 547 U.S. 370, 126 S.Ct. 1843, 164 L.Ed.2d 625 (2006); see also Kane v. Comm’r of Dep’t of Health and Human Servs., 2008 ME 185, ¶ 12, 960 A.2d 1196 (Court will defer to the agency interpretation of statute the agency administers “when the meaning of the statute is unclear and is not within our expertise and only if the agency’s interpretation is both reasonable and within the agency’s expertise”).
[¶ 32] In this case, the agency’s interpretation and application of the term “refurbished” was both reasonable and within the Commission’s expertise, not our expertise. The Commission could have construed many of the repairs and replacements that were identified in this case as akin to a homeowner’s replacing an old inefficient wood furnace with a new, more efficient wood furnace. Such an improvement might extend the life of the home, and would be a valuable upgrade to the heating efficiency of the home,6 but it would not renew the home and make the home like new for its occupants.7
[¶ 33] The Commission’s interpretation is supported by an important finding by the Commission. Covanta claimed in its filings that they had “estimates” that a majority of their repair expenses for each facility were “capitalized” rather than treated as expenses on Covanta’s tax returns for two of the five years at issue. If correct, this information would have supported Covanta’s claim that the improvements were capital improvements indicating refurbishment, rather than expenses indicating repairs. However, after examination of the record, the Commission determined that Covanta’s “estimates” were not credible and that “a number of the projects included in the list of expenditures for 2009 and 2010 were expensed, rather than capitalized.” This credibility determination helped to lead the Commission to decide that Covanta’s improvements were more in the nature of repairs than refurbishments.
[¶ 34] The Court holds that, as a matter of law, the Commission erred because, when making its findings, it considered the relative value of Covanta’s claimed refurbishment expenditures compared to the overall value of the facilities. However, fairly reading the Commission’s decision, it is evident that the discussion of relative percentages of claimed refurbishment costs to overall value was offered to support the Commission’s finding that Covan-ta had failed to meet its burden of proof. This discussion, as quoted in the Court’s opinion, emphasized that even if one counted the many maintenance items included in Covanta’s cost estimates, the total of the claimed items was only a small percentage of the overall value of the facility. This descriptive observation could be removed from the Commission’s decision without changing the overall result. Certainly the Court is not saying, as a matter of law, that replacing a $25 valve that allows a cooling system to operate properly and effectively extends the useful life of a $50 million facility would render the whole fa*969cility a new facility for purposes of the law. The Commission’s descriptive observation was offered in support of its findings. Even if inaccurate, it was not an error of law and did not affect the overall result of the Commission’s decision.
[¶ 35] Certainly the repairs and replacements that occurred here, even though their costs were treated as expenses, could be viewed differently, as the Court’s opinion indicates. Those facility improvements, even the many with a new useful life of five years or less, might, with some stretch of imagination, be viewed as more of a renewal and making the entire biomass plant like new, but that interpretation is for the Commission, not this Court, to decide. The Commission adopted and applied an interpretation of the ambiguous term “refurbished” that was not unreasonable or contrary to the plain meaning of the then applicable statute. Because the Commission’s interpretation of “refurbished” is not unreasonable, and because, in any event, the evidence that Covanta presented could be disbelieved and does not compel a finding that Covan-ta’s facilities have become new renewable resource facilities, I would affirm the decision of the Commission.

. Covanta provided no estimates or evidence of how the prior owners of the facilities had treated the improvements for tax purposes on *967the tax returns prepared by the prior owners for 2006, 2007, and 2008.

. In its decision, the Commission observed that "Covanta has not asserted that its expenditures have increased the efficiency of the generation process.”

. In fact, a wood furnace or boiler may in some circumstances be viewed as a noncapi-tal item that is neither a fixture nor a permanent part of the real estate. See Thayer Corp. v. Me. Sch. Admin. Dist. 61, 2012 ME 37, ¶ 8, 38 A.3d 1263.