Court Opinion

ID: 4099077
Source: CourtListenerOpinion
Date Created: 2016-11-17 16:09:11.476431+00
Date Added: 2024-06-11T07:45:37.993071
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                       Reporter	of	Decisions	
Decision:	 2016 ME 168 
Docket:	   PUC-14-470	
Argued:	   March	2,	2016	
Decided:	  November	17,	2016	
	
Panel:	    SAUFLEY,	C.J.,	and	MEAD,	GORMAN,	JABAR,	HJELM,	and	HUMPHREY,	JJ.	
	
	
                        HOULTON	WATER	COMPANY	et	al.	
                                        	
                                       v.	
                                        	
                       PUBLIC	UTILITIES	COMMISSION	et	al.	
	
	
HJELM,	J.		

      [¶1]		We	are	called	on	for	the	second	time	to	consider	a	decision	of	the	

Maine	 Public	 Utilities	 Commission	 approving	 a	 petition	 for	 reorganization	

filed	 by	 Bangor	 Hydro-Electric	 (BHE)	 and	 Maine	 Public	 Service	 Company	

(MPS),	 which	 were	 regulated	 utilities	 engaged	 in	 the	 transmission	 and	

distribution	 of	 electricity,	 and,	 during	 the	 pendency	 of	 this	 proceeding,	

merged	to	become	Emera	Maine.		Under	the	proposed	reorganization,	Emera	

Maine’s	parent	company,	Emera,	Inc.,	would	increase	its	ownership	interest	in	

Algonquin	 Power	 &	 Utilities	 Corporation	 (APUC),	 which	 is	 a	 publicly-traded	

company	 that	 is	 in	 the	 electricity	 generation	 business	 with	 generation	

facilities	 located	 in	 Maine.	 	 Because	 of	 the	 relationship	 that	 would	 result	
2	

between	Emera	Maine,	as	a	transmission	and	distribution	entity,	and	APUC,	a	

generator,	the	petition	is	subject	to	approval	by	the	Commission.			

         [¶2]		In	the	first	appeal,	we	vacated	the	Commission’s	order	approving	

the	 petition1	 because	 the	 Commission	 misconstrued	 the	 governing	 statute	 in	

the	Electric	Industry	Restructuring	Act,	35-A	M.R.S.	§§	3201-3217	(2015).		See	

Houlton	 Water	 Co.	 v.	 Pub.	 Utils.	 Comm’n	 (Houlton	 I),	 2014 ME 38,	 ¶¶	 35-38,	

87 A.3d 749.	 	 On	 remand,	 the	 Commission	 again	 approved	 the	 petition.	 	 On	

this	second	appeal,	filed	by	Houlton	Water	Company	and	the	Industrial	Energy	

Consumer	 Group	 (collectively,	 the	 intervenors),	 we	 conclude	 that	 the	

Commission	 acted	 outside	 of	 its	 authority	 when,	 in	 an	 effort	 to	 control	 the	

statutorily	harmful	effects	of	the	transaction,	it	imposed	conditions	that	would	

regulate	 APUC	 beyond	 what	 the	 Restructuring	 Act	 allows.	 	 We	 therefore	

vacate	 the	 Commission’s	 order	 and	 remand	 with	 instructions	 to	 deny	 the	

petition.	

                      I.		STATUTORY	OVERVIEW	AND	BACKGROUND	

         [¶3]	 	 As	 we	 discussed	 in	 Houlton	 I,	 when	 the	 Legislature	 enacted	 the	

Restructuring	 Act,	 one	 of	 its	 objectives	 was	 to	 encourage	 “competition	 and	

     1		Also	at	issue	in	the	first	appeal	was	a	separate	reorganization	petition	that	would	have	allowed	

Emera	 to	 become	 involved	 in	 a	 wind	 power	 venture.	 	 Houlton	 Water	 Co.	 v.	 Pub.	 Utils.	 Comm’n	
(Houlton	 I),	 2014 ME 38,	 ¶	 1,	 87 A.3d 749.	 	 As	 we	 discuss	 in	 this	 opinion,	 Emera	 has	 withdrawn	
from	that	venture,	and	it	is	no	longer	at	issue.	
                                                                                     3	

innovation	in	the	generation	of	electrical	power.”		Id.	¶	3;	35-A	M.R.S.	§	3204;	

see	 also	 Cent.	 Me.	 Power	 Co.	 v.	 Pub.	 Utils.	 Comm’n,	 2014 ME 56,	 ¶	 2,	

90 A.3d 451.		To	promote	that	goal,	the	Legislature	separated	the	generation	

of	electricity	from	the	transmission	and	distribution	of	electricity	(T&D);	and	

“greatly	reduced”	the	Commission’s	regulatory	authority	over	producers	and	

generators	of	electricity	to	the	extent	that	the	parties	to	this	proceeding	“refer	

to	 power	 generation	 as	 ‘unregulated’	 in	 Maine”;	 but	 preserved	 the	

Commission’s	 authority	 to	 highly	 regulate	 T&D	 entities.	 	 Houlton	 I,	 2014 ME
38,	¶¶	4-5,	87 A.3d 749.			

      [T]he	Act	mandated	that	companies	holding	both	generation	and	
      T&D	 assets	 divest	 themselves	 of	 the	 generation	 assets	 and	
      generation-related	 activities	 .	 .	 .	 .	 	 Following	 divestiture,	 the	
      Commission	 continues	 to	 regulate	 and	 oversee	 T&D	 utilities,	
      which	 hold	 monopolistic	 rights	 to	 the	 limited	 T&D	 resources	 in	
      Maine.	 	 Because	 the	 Restructuring	 Act	 allowed	 the	
      investor-owned	 electric	 utilities	 to	 keep	 their	 transmission	 and	
      distribution	 assets,	 the	 former	 electricity	 providers	 were	
      transformed	 into	 transmission	 and	 distribution	 utilities	 fully	
      regulated	by	the	Commission.	
	
Id.	 ¶	 4	 (citation	 and	 quotation	 marks	 omitted).	 	 As	 an	 element	 of	 the	

Commission’s	extensive	regulation	of	T&D	utilities,	proposed	reorganizations	

of	T&D	utilities	are	subject	to	the	Commission’s	approval.		Id.	¶	6;	35-A	M.R.S.	

§§	708(2),	3204(5)	(2015).	
4	

         [¶4]		In	April	2011,	BHE	and	MPS	petitioned	the	Commission	pursuant	

to	 35-A	 M.R.S.	 §	 708(2),2	 which	 applies	 to	 the	 reorganization	 of	 utilities,	 to	

authorize	their	parent	company,	Emera,	to	increase	its	ownership	position	in	

APUC	 to	 25%	 from	 roughly	 8%.3	 	 As	 we	 described	 the	 proposed	 affiliate	

structure	 in	 Houlton	 I,	 “the	 proposed	 transactions	 would	 allow	 Maine’s	

regulated	 T&D	 utilities—Bangor	 Hydro	 and	 MPS	 [now	 Emera	 Maine]—to	 be	

held	in	common	ownership	with	companies	engaged	in	electricity	generation	

in	Maine.”		2014 ME 38,	¶	9,	87 A.3d 749.		The	parties	agree	that	this	would	

result	 in	 an	 “affiliated	 interest”	 between	 Emera	 Maine	 and	 APUC	 within	 the	

meaning	of	35-A	M.R.S.	§	707(1)(A)	(2015).		See	Houlton	I,	2014 ME 38,	¶¶	9,	

25,	87 A.3d 749.			

         [¶5]		Additionally,	in	a	separate	petition,	Northeast	Wind	Holdings,	LLC,	

which	 was	 owned	 by	 Emera,	 filed	 a	 reorganization	 petition	 that	 would	

   2	 	 Title	 35-A	 M.R.S.	 §	 708	 has	 been	 amended,	 see	 P.L.	 2011,	 ch.	 623,	 §§	 A-13,	 A-14	 (effective	

Aug.	30,	 2012)	 (codified	 at	 35-A	 M.R.S.	 §	 708	 (2015)),	 but	 the	 amended	 subsection	 is	 not	 the	
subsection	under	which	BHE	and	MPS	petitioned	the	Commission.	
     3		The	term	reorganization	encompasses		

         any	 creation,	 organization,	 extension,	 consolidation,	 merger,	 transfer	 of	 ownership	
         or	control,	liquidation,	dissolution	or	termination,	direct	or	indirect,	in	whole	or	in	
         part,	 of	 an	 affiliated	 interest	 as	 defined	 in	 section	 707	 accomplished	 by	 the	 issue,	
         sale,	 acquisition,	 lease,	 exchange,	 distribution	 or	 transfer	 of	 voting	 securities	 or	
         property.			
                  	
35-A	M.R.S.	§	708(1)(A).		Here,	the	APUC	transaction	would	create	an	“affiliated	interest”	as	defined	
in	 section	 707,	 see	 infra	 ¶	 6	 n.4,	 and	 is	 thus	 subject	 to	 the	 Commission’s	 oversight	 under	 section	
708.
                                                                                                            5	

authorize	Emera	to	engage	in	a	joint	venture	with	a	wind	energy	development	

company	to	create	a	new	wind	power	generation	company.		The	Commission	

consolidated	the	two	petitions	and	held	a	hearing	in	late	2011	and	early	2012.			

        [¶6]	 	 After	 the	 hearing	 was	 completed,	 in	 April	 2012	 the	 Commission	

issued	 an	 order	 approving	 the	 two	 proposed	 transactions,4	 concluding,	 as	 to	

the	 APUC	 transaction,	 that	 Emera	 Maine	 had	 met	 its	 burden	 of	 showing	 that	

ratepayers	 would	 not	 suffer	 a	 net	 harm	 pursuant	 to	 section	 708,	 which	

provides	 in	 part	 that	 the	 Commission	 may	 approve	 utility	 reorganizations,	

including	the	creation	of	affiliates,	if	the	reorganization	“is	consistent	with	the	

interests	of	the	utility’s	ratepayers	and	investors.”		35-A	M.R.S.	§	708(2)(A).			

        [¶7]	 	 In	 approving	 the	 petitions,	 the	 Commission	 interpreted	 section	

3204(5)5	 as	 foreclosing	 a	 T&D	 utility	 from	 having	 a	 financial	 interest	 in	 a	

generation	asset	only	if	the	T&D	utility	controlled	the	generator.		With	respect	

to	 the	 APUC	 transaction,	 the	 Commission	 determined	 that	 pursuant	 to	 that	

test,	 the	 proposed	 transaction	 did	 not	 violate	 the	 Restructuring	 Act	 because	

   4	 	 Because	 of	 changes	 in	 collateral	 transactions	 involving	 APUC	 while	 the	 matter	 was	 pending	

before	 the	 Commission,	 Emera’s	 ownership	 share	 of	 APUC	 as	 approved	 by	 the	 Commission	 was	
reduced	to	20%	from	the	originally	proposed	25%.		Because	an	affiliated	interest	is	defined	as	one	
of	at	least	10%,	see	35-A	M.R.S.	§	707(1)(A)	(2015),	the	reduction	in	Emera’s	position	in	APUC	did	
not	affect	the	statutory	analysis.	
   5	 	 Section	 3204(5)	 provides,	 “[e]xcept	 as	 otherwise	 permitted	 under	 this	 chapter,	 on	 or	 after	

March	 1,	 2000,	 an	 investor-owned	 transmission	 and	 distribution	 utility	 may	 not	 own,	 have	 a	
financial	 interest	 in	 or	 otherwise	 control	 generation	 or	 generation-related	 assets.”	 	 35-A	 M.R.S.	
§	3204(5)	(2015).	
6	

Emera	Maine,	as	the	T&D	entity,	would	not	have	an	equity	interest	or	voting	

position	 in	 APUC—in	 other	 words,	 because	 Emera	 Maine	 would	 not	 control	

APUC.			

      [¶8]		The	Commission	also	considered	whether	the	transactions	would	

compromise	competition	in	the	energy	market.		The	Commission	found,	

     These	affiliations	raise	significant	concerns	regarding	the	possible	
     exercise	 of	 preferential	 treatment	 by	 a	 utility	 to	 its	 competitive	
     affiliates.	 	 This	 preferential	 treatment	 could	 include	 allowing	 an	
     affiliated	 generator	 .	 .	 .	 to	 gain	 access	 to	 non-public,	 strategically	
     important	information	or	through	favorable	treatment	in	terms	of	
     construction	 of	 or	 access	 to	 transmission	 facilities	 or	 services.		
     The	 consequences	 could	 appear	 in	 two	 somewhat	 different	
     respects:	 (1)	 harm	 to	 ratepayers	 of	 BHE	 and	 MPS	 in	 the	 form	 of	
     higher	 T&D	 rates;	 and	 (2)	 harm	 to	 the	 [competitiveness]	 of	 the	
     market	 (and	 competitors	 in	 the	 market)	 from	 preferential	
     treatment	 of	 affiliates	 which	 lead	 ultimately	 to	 higher	 electricity	
     supply	prices	for	consumers.	
            	
Although	 the	 Commission	 found	 these	 risks	 of	 preferential	 treatment	 arising	

from	 the	 wind	 power	 venture	 to	 be	 “both	 real	 and	 significant,”	 it	 also	

determined	 that	 those	 concerns	 were	 of	 “lesser	 importance”	 in	 the	 APUC	

transaction	but	that	the	financial	risks	generated	by	that	reorganization	would	

be	eliminated	if	conditions	were	imposed.			

      [¶9]	 	 The	 Commission	 conditioned	 its	 approval	 of	 both	 petitions	 on	

compliance	 by	 the	 parties	 and	 other	 affected	 entities	 with	 more	 than	 fifty	

conditions.	 	 Some	 of	 those	 conditions	 relate	 exclusively	 to	 the	 APUC	
                                                                                     7	

transaction,	others	to	the	wind	power	transaction,	and	the	remainder	to	both.		

The	 conditions	 address	 issues	 such	 as	 structural	 separation,	 financial	 risk,	

codes	 of	 conduct,	 and	 divestiture;	 and	 the	 conditions	 contain	 extensive	

requirements	 of	 external	 audits,	 service	 restrictions,	 and	 the	 maintenance	 of	

separate	credit	facilities,	among	other	things.			

      [¶10]	 	 Significant	 for	 purposes	 of	 this	 appeal,	 in	 approving	 the	

reorganization	 petition,	 the	 Commission	 imposed	 conditions	 on	 electricity	

generators,	 including	 APUC	 itself.	 	 As	 the	 conditions	 apply	 to	 APUC,	 they	

include	 a	 requirement	 that	 APUC	 not	 permit	 Emera	 to	 participate	 in	

decision-making	regarding	APUC’s	generation	of	power	in	Maine;	that,	to	the	

extent	that	the	Commission	determines	that	APUC’s	operations	relate	to	BHE	

and	MPS	operations	in	Maine,	APUC	provide	the	Commission	with	access	to	its	

books	 and	 records,	 respond	 to	 discovery	 requests	 and	 participate	 in	

Commission	proceedings	without	being	allowed	to	object	on	the	basis	that	the	

Commission	 does	 not	 have	 jurisdiction;	 and	 that	 the	 Commission	 have	

authority	to	order	APUC	to	divest	itself	of	certain	power	generation	units.		The	

Commission	 also	 required,	 as	 a	 condition	 to	 approval	 of	 the	 petitions,	 that	

APUC	 submit	 a	 letter	 accepting	 the	 Commission’s	 authority	 to	 enforce	 the	

order	against	it.			
8	

      [¶11]	 	 Houlton	 Water,	 the	 Office	 of	 the	 Public	 Advocate,	 and	 the	

Industrial	 Energy	 Consumer	 Group	 appealed	 the	 Commission’s	 order	 as	

intervenors.	 	 We	 concluded	 that	 the	 Commission’s	 interpretation	 of	 section	

3204(5)	was	erroneously	narrow	and	held	that	even	if	a	T&D	entity	would	not	

ultimately	 obtain	 actual	 control	 of	 the	 electricity	 generator,	 that	 statute	

nonetheless	 prohibits	 the	 T&D	 from	 becoming	 affiliated	 with	 an	 electricity	

generator	 if	 the	 affiliation	 will	 become	 “likely	 to	 produce	 [in	 the	 T&D]	

incentives	 for	 favoritism	 that	 would	 undermine	 the	 purpose	 of	 the	

[Restructuring]	 Act.”	 	 Houlton	 I,	 2014 ME 38,	 ¶¶	 35,	 37,	 87 A.3d 749.	 	 We	

vacated	the	Commission’s	order	and	remanded	the	matter	for	the	Commission	

to	reconsider	the	petition	under	the	clarified	statutory	standard.		Id.	¶¶	2,	38.			

      [¶12]	 	 On	 remand,	 choosing	 to	 proceed	 on	 the	 existing	 record,	 the	

Commission	 entered	 an	 order	 in	 October	 2014	 approving	 the	 petitions	 by	 a	

two-to-one	vote.		As	to	the	APUC	transaction,	the	Commission	concluded	that	

“the	reorganization[]	result[s]	in	Emera	Maine	having	a	‘financial	interest’	in	

generation	 merely	 as	 a	 result	 of	 its	 affiliation	 with	 Northeast	 Wind	

Partners	.	.	.	and	[APUC]	through	common	ownership	by	the	parent	company,	

Emera.”	 	 The	 Commission	 determined,	 however,	 “that	 the	 [p]roposed	

[t]ransactions,	when	subject	to	the	substantial	conditions	imposed	pursuant	to	
                                                                                                        9	

our	 35-A	 M.R.S.	 §	 708	 authority	 .	 .	 .	 do	 not	 violate	 the	 provisions	 of	

[section]	3204(5)	as	interpreted	by	the	Law	Court	[in	Houlton	I].”		(Emphasis	

added.)		In	other	words,	the	Commission	took	the	view	that	although	Emera	

Maine	 would	 have	 a	 financial	 interest	 in	 generation	 that	 would	 be	 likely	 to	

create	favoritism,	that	interest	would	be	“adequately	addressed	through	§	708	

conditions,”	 thus	 falling	 short	 of	 creating	 any	 unlawful	 incentives.	 	 The	

Commission	imposed	the	same	conditions	contained	in	its	April	2012	order	in	

which	 it	 had	 originally	 approved	 the	 petitions.	 	 The	 intervenors	 again	

appealed.6		See	35-A	M.R.S.	§	1320	(2015).			

        [¶13]	 	 While	 the	 appeal	 was	 pending,	 Emera	 Maine	 notified	 the	

Commission	 that	 Emera	 had	 agreed	 to	 sell	 its	 interest	 in	 the	 wind	 power	

venture	 to	 its	 partner	 in	 that	 proposed	 transaction.	 	 In	 January	 2015,	 the	

Commission	 issued	 an	 order	 determining	 that	 its	 approval	 was	 not	 required	

for	Emera	to	withdraw	from	the	joint	venture.		Within	several	days	after	that	

order	 was	 issued,	 Emera	 formally	 withdrew	 from	 the	 venture.	 	 The	

Commission	 then	 moved	 that	 we	 stay	 this	 appeal	 so	 that	 the	 Commission	

could	 consider	 the	 effect	 of	 that	 development	 on	 the	 October	 2014	

consolidated	 order	 in	 which	 it	 had	 approved	 both	 the	 Northeast	 Wind	 and	

   6		 The	 Office	 of	 the	 Public	 Advocate,	 which	 previously	 appeared	 as	 an	 intervenor,	 has	 not	
participated	in	this	appeal.	
10	

APUC	 transactions.	 	 We	 denied	 the	 motion	 and	 ordered	 that	 the	 appeal	

proceed	in	the	normal	course.			

      [¶14]		Following	the	issuance	of	our	order,	the	Commission	allowed	the	

parties	an	opportunity	to	be	heard	on	the	effect	of	the	rescinded	wind	power	

transaction	 on	 the	 October	 2014	 order,	 part	 of	 which	 addressed	 Emera’s	

now-withdrawn	 involvement	 in	 the	 wind	 energy	 project.	 	 Rejecting	 the	

intervenors’	 argument	 to	 the	 contrary,	 the	 Commission	 determined	 that	 the	

pendency	 of	 this	 appeal	 did	 not	 deprive	 the	 Commission	 of	 authority	 to	

proceed.	 	 The	 Commission	 then	 issued	 an	 order	 in	 August	2015,	 which	

addressed	the	effect	of	Emera’s	withdrawal	from	the	wind	power	venture	on	

the	October	2014	order	by	eliminating	thirteen	of	the	conditions	attached	to	

the	earlier	order	authorizing	the	reorganizations,	and	modifying	eight	others.		

The	 conditions	 applicable	 to	 APUC	 noted	 above,	 see	 supra	 ¶	 10,	 remained	

unchanged.			

      [¶15]	 	 The	 intervenors	 appealed	 from	 that	 order	 and	 moved	 to	

consolidate	their	appeals	and	permit	supplemental	briefing.		We	granted	the	

motion,	and	the	parties	filed	supplemental	briefs	to	address	the	issues	raised	

by	the	new	appeal.			
                                                                                         11	

                                     II.		DISCUSSION	

       [¶16]	 	 We	 first	 consider	 whether	 the	 pendency	 of	 this	 appeal	 affected	

the	 Commission’s	 authority	 to	 modify	 the	 October	 2014	 order	 as	 a	 result	 of	

Emera’s	 decision	 not	 to	 proceed	 with	 the	 joint	 wind	 power	 venture.	 	 After	

identifying	 the	 operative	 Commission	 decision,	 we	 address	 the	 intervenors’	

challenges	to	that	decision.			

A.	    The	Commission’s	Authority	to	Modify	the	October	2014	Decision	

       [¶17]	 	 The	 intervenors	 argue	 that	 because	 the	 appeal	 of	 the	

Commission’s	 October	 2014	 decision	 was	 pending	 when	 the	 Commission	

modified	that	decision	in	August	2015,	the	modification	is	void.			

       [¶18]		This	issue	reveals	a	conflict	between	two	statutes	governing	the	

procedure	 for	 appeals	 from	 Commission	 decisions.	 	 One	 of	 the	 statutes,	

35-A	M.R.S.	 §	 1320(3)	 (2015),	 is	 framed	 in	 broad	 terms	 and	 provides	

generally	 that	 the	 rules	 of	 appellate	 process	 apply	 to	 appeals	 from	

Commission	decisions:	where	rules	regulating	civil	appeals	from	the	Superior	

Court	 “use[]	 the	 term[]	 ‘the	 court,’	 .	.	.	 they	 shall	 for	 purposes	 of	 an	 appeal	

from	the	commission	mean	‘the	commission.’”		See	also	35-A	M.R.S.	§	1320(1)	

(2015)	 (“An	 appeal	 from	 a	 final	 decision	 of	 the	 commission	 may	 be	 taken	 to	

the	 Law	 Court	 on	 questions	 of	 law	 in	 the	 same	 manner	 as	 an	 appeal	 taken	
12	

from	 a	 judgment	 of	 the	 Superior	 Court	 in	 a	 civil	 action.”);	 M.R.	 App.	 P.	 22	

(effectively	implementing	section	1320).			

      [¶19]		As	one	ostensible	effect	of	section	1320,	Maine	Rule	of	Appellate	

Procedure	 3(b)	 would	 apply	 here.	 	 That	 rule,	 subject	 to	 specific	 exceptions	

that	 are	 inapplicable	 in	 this	 case,	 prohibits	 a	 trial	 court—and	 therefore,	

pursuant	to	section	1320,	the	Commission—from	taking	any	action	affecting	a	

case	 that	 is	 on	 appeal.	 	 Viewed	 in	 isolation,	 Rule	 3(b)	 therefore	 would	

preclude	 the	 Commission	 from	 revising	 its	 October	 2014	 order	 while	 an	

appeal	from	that	order	was	pending.		

      [¶20]	 	 In	 contrast,	 a	 different	 statute,	 35-A	 M.R.S.	 §	 1321	 (2015),	

provides	that	“[t]he	commission	may	at	any	time	rescind,	alter	or	amend	any	

order	it	has	made.”		(Emphasis	added).		As	applied	here,	section	1321	affects	a	

narrow	 aspect	 of	 appellate	 procedure	 by	 preserving	 the	 Commission’s	

authority	 to	 alter	 or	 amend	 any	 order,	 at	 any	 time—even	 while	 an	 appeal	 is	

pending.	 	 In	 this	 way,	 section	 1321	 is	 inconsistent	 with	 the	 broadly	 framed	

provisions	of	section	1320	that	subject	appeals	from	Commission	decisions	to	

the	constraints	of	Rule	3(b).		

      [¶21]		As	a	familiar	principle	of	statutory	construction,	specific	statutes	

prevail	 over	 general	 ones	 when	 the	 two	 are	 inconsistent.	 	 Fleet	 Nat'l	 Bank	 v.	
                                                                                     13	

Liberty,	 2004 ME 36,	 ¶	 10,	 845 A.2d 1183;	 see	 also	 2B	 Singer	 &	 Singer,	

Sutherland	 Statutory	 Construction	 §	 51:2	 at	 215	 (7th	 ed.	 2012)	 (“If	 an	

irreconcilable	 conflict	 does	 exist	 between	 two	 statutes,	 the	 more	 specific	

statute	controls	over	the	more	general	one	.	.	.	.”).		Applying	this	principle	to	

resolve	 the	 conflict	 between	 sections	 1320	 and	 1321,	 we	 conclude	 that	 the	

more	 general	 provisions	 of	 section	 1320,	 which	 covers	 many	 aspects	 of	

appellate	 procedure	 in	 an	 undifferentiated	 way,	 yield	 to	 the	 more	 specific	

terms	 of	 section	 1321.	 	 As	 a	 result,	 notwithstanding	 Rule	 3(b),	 section	 1321	

preserved	 to	 the	 Commission	 the	 authority	 to	 issue	 the	 amended	 order	 in	

August	 2015,	 even	 though	 that	 administrative	 action	 revised	 an	 order	 that	

was	the	subject	of	a	pending	appeal.			

      [¶22]	 	 We	 now	 consider	 the	 merits	 of	 intervenors’	 challenges	 to	 that	

order.	

B.	   Commission	Approval	of	APUC	Transaction	

      [¶23]		The	central	issue	raised	by	the	intervenors	on	this	appeal	focuses	

on	the	limitations	of	the	Commission’s	authority	to	impose	certain	conditions	

as	a	predicate	to	its	approval	of	the	APUC	transaction.			

      [¶24]	 	 Pursuant	 to	 section	 3204(5),	 a	 T&D	 entity	 is	 prohibited	 from	

“own[ing],	 hav[ing]	 a	 financial	 interest	 in	 or	 otherwise	 control[ling]	
14	

generation	 or	 generation-related	 assets,”	 subject	 to	 certain	 exceptions	 not	

applicable	here.		35-A	M.R.S.	§	3204(5).		In	Houlton	I,	we	addressed	the	nature	

of	 the	 “financial	 interest”	 that	 is	 barred	 when	 a	 reorganization	 results	 in	 a	

regulated	 affiliate	 interest:	 “if	 the	 relationship	 among	 the	 entities	 results	 in	

the	T&D	utility	having	a	financial	interest	that	would	provide	an	incentive	to	

favor	certain	generators	over	others,	the	proposed	corporate	restructuring	is	

prohibited	pursuant	to	section	3204(5).”		2014 ME 38,	¶	36,	87 A.3d 749.		

      [¶25]	 	 In	 this	 proceeding,	 the	 Commission	 determined	 that	 the	

proposed	 affiliation	 would	 give	 Emera—an	 owner	 of	 a	 company	 possessing	

T&D	assets—a	financial	interest	in	APUC’s	electricity	generation	assets,	which,	

without	intervention,	would	be	likely	to	create	an	incentive	for	Emera	to	favor	

APUC	 over	 other	 generators.	 	 Seeking	 to	 eliminate	 this	 consequence	 of	 the	

proposed	 transaction,	 the	 Commission	 invoked	 its	 authority	 pursuant	 to	

section	 708,	 which	 requires	 the	 Commission,	 when	 approving	 a	

reorganization	 of	 public	 utilities	 such	 as	 is	 proposed	 here,	 to	 “impose	 such	

terms,	conditions	or	requirements	as,	in	its	judgment,	are	necessary	to	protect	

the	interests	of	ratepayers.”		35-A	M.R.S.	§	708(2)(A).			

      [¶26]	 	 In	 its	 October	2014	 order,	 the	 Commission	 determined	 that	

imposition	of	many	specific	conditions	pursuant	to	section	708	would	negate	
                                                                                     15	

an	 “incentive	 for	 favoritism	 .	 .	 .	 that	 would	 require	 [the	 Commission]	 to	

disallow	 those	 transactions	 under	 [s]ection	 3204(5).”	 	 The	 intervenors	

contend	 that	 once	 the	 Commission	 made	 the	 initial	 finding	 that	 the	

reorganization	 would	 give	 Emera	 incentives	 of	 favoritism	 toward	 some	

generators,	 the	 Commission	 erred	 by	 resorting	 to	 section	 708	 and	 imposing	

conditions	 in	 an	 effort	 to	 ameliorate	 that	 resulting	 favoritism.	 	 The	

intervenors	 go	 on	 to	 argue	 that	 because	 the	 Commission	 may	 not	 use	 its	

authority	 under	 section	 708	 to	 transform	 a	 reorganization	 that	 violates	

section	 3204(5)	 into	 one	 that	 satisfies	 the	 requirements	 of	 that	 statute,	 the	

Commission	erred	by	approving	the	APUC	transaction.		Emera	Maine	and	the	

Commission	 argue,	 on	 the	 other	 hand,	 that	 the	 Commission	 acted	 properly	

when	 it	 took	 those	 conditions	 into	 account	 before	 finally	 determining	 that	

Emera’s	 financial	 interest	 would	 not	 likely	 create	 an	 incentive	 for	 favoritism	

toward	APUC.			

      [¶27]	 	 “We	 review	 decisions	 of	 the	 Commission	 with	 great	

deference[,]	.	.	.	disturb[ing]	a	decision	only	when	the	Commission	abuses	the	

discretion	entrusted	to	it,	or	fails	to	follow	the	mandate	of	the	legislature,	or	to	

be	bound	by	the	prohibitions	of	the	constitution.”		Taylor	v.	Pub.	Utils.	Comm’n,	

2016 ME 71,	¶	5,	138 A.3d 1214 (citation	and	quotation	marks	omitted).			
16	

	     [¶28]	 	 The	 procedural	 history	 of	 this	 case	 demonstrates	 that	 the	

conditions	set	out	in	the	most	recent	order,	issued	in	August	2015,	relate	only	

to	 the	 proposed	 APUC	 transaction	 and	 are	 intended	 to	 satisfy	 the	

requirements	of	section	3204(5).		The	Commission	first	formulated	conditions	

applicable	 to	 both	 the	 APUC	 and	 wind	 power	 transactions	 in	 its	 April	 2012	

order,	 where	 the	 Commission	 concluded	 that	 the	 transactions	 “raise	

significant	concerns	regarding	the	possible	exercise	of	preferential	treatment	

by	 a	 utility	 to	 its	 competitive	 affiliates”—precisely	 the	 type	 of	 “financial	

interest”	 that	 we	 later	 determined	 in	 Houlton	 I	 is	 prohibited	 by	 section	

3204(5).	 	 The	 nature	 of	 the	 preferential	 treatment	 that	 concerned	 the	

Commission	 included	 the	 potential	 for	 sharing	 of	 “non-public,	 strategically	

important	information,”	and	“favorable	treatment	in	terms	of	construction	of	

or	access	to	transmission	facilities	or	services.”		On	remand,	the	Commission	

framed	 its	 analysis	 based	 on	 the	 construction	 of	 section	 3204(5)	 that	 we	

prescribed	 in	 Houlton	 I	 and	 made	 clear	 that	 the	 purpose	 of	 the	 conditions	 it	

formulated	 was	 still	 to	 prevent	 any	 “incentive	 for	 favoritism	.	.	.	that	 would	

require	us	to	disallow	those	transactions	under	Section	3204(5).”		Although	in	

its	 August	 2015	 order	 the	 Commission	 modified	 the	 set	 of	 conditions	 it	 had	
                                                                                     17	

previously	imposed	to	account	for	Emera’s	withdrawal	from	the	wind	power	

venture,	the	purpose	of	those	conditions	did	not	change.			

       [¶29]		Given	this	history,	we	must	view	the	entire	body	of	the	conditions	

contained	in	its	most	recent	order	to	represent	the	Commission’s	view	of	what	

is	necessary	for	the	APUC	transaction	to	meet,	in	the	least	restrictive	way,	the	

requirements	of	section	3204(5)—that	a	T&D	entity	may	not	have	a	financial	

interest	 in	 an	 electricity	 generator	 that	 is	 likely	 to	 produce	 incentives	 for	

favoritism—and	 not	 for	 some	 reason	 unrelated	 to	 the	 requirements	 of	 that	

statute.			

	      [¶30]	 	 As	 discussed	 above,	 the	 Restructuring	 Act	 is	 “intended	 to	

effectuate	the	Legislature’s	goal	of	encouraging	competition	and	innovation	in	

the	generation	of	electrical	power.”		Houlton	I,	2014 ME 38,	¶	3,	87 A.3d 749.		

An	 essential	 ingredient	 to	 achieve	 that	 result	 is	 to	 largely	 deregulate	

electricity	 generation.	 	 Indeed,	 as	 we	 pointed	 out	 in	 Houlton	 I,	 the	 parties	

themselves		

       refer	to	power	generation	as	“unregulated”	in	Maine,	although	the	
       generators	are	subject	to	some	restrictions	and	must	be	licensed.		
       See	 generally	 35-A	 M.R.S.	 §	 3202	 (deregulating	 retail	 access	 to	
       generation	 services);	 id.	 §	 3203	 (authorizing	 the	 Commission	 to	
       license	competitive	electricity	providers).			
       	
Id.	¶	5.		
18	

	       [¶31]		Here,	the	conditions	crafted	by	the	Commission	that	are	directed	

toward	 APUC	 constitute	 forms	 of	 agency	 oversight	 and	 control	 that	 are	

contrary	 to	 both	 the	 letter	 and	 purpose	 of	 the	 Restructuring	 Act.	 	 That	 the	

Commission	even	saw	the	need	to	explicitly	articulate	particular	controls	over	

APUC	as	a	condition	to	approving	an	increase	in	Emera’s	stock	ownership	of	

APUC	is	itself	a	demonstration	that	most	or	all	of	those	conditions	do	not	exist	

by	operation	of	statute	or	otherwise.7	

        [¶32]	 	 Beyond	 this,	 the	 Legislature	 has	 conferred	 general	 grants	 of	

authority	to	the	Commission	in	several	statutes.		In	35-A	M.R.S.	§	104	(2015),	

for	 example,	 the	 Commission	 is	 deemed	 to	 have	 “all	 implied	 and	 inherent	

powers	.	.	.	necessary	and	proper	to	execute	faithfully	its	express	powers	and	

functions	specified	in	this	Title	[35-A].”		Additionally	pursuant	to	section	708,	

the	 Commission,	 when	 approving	 a	 reorganization,	 has	 the	 authority	 to	

“impose	 such	 terms,	 conditions	 or	 requirements	 as,	 in	 its	 judgment,	 are	

necessary	to	protect	the	interests	of	ratepayers.”		35-A	M.R.S.	§	708(2)(A).	

	       [¶33]	 	 The	 extent	 of	 the	 Commission’s	 authority	 as	 created	 by	 these	

statutes	is	circumscribed	by	the	principle	that	the	agency’s	action	must	not	be	

    7		One	of	the	conditions	that	the	Commission	imposed	on	APUC	would	require	APUC	to	allow	the	

Commission	access	to	its	books	and	records.		In	contrast	to	the	other	conditions	addressed	in	the	
text,	 this	 form	 of	 agency	 intervention	 into	 matters	 of	 an	 affiliated	 generator	 appears	 to	 be	
statutorily	authorized.		See	35-A	M.R.S.	§	708(2)(A)(1).	
                                                                                                   19	

inconsistent	 with—in	 this	 case—the	 foundational	 legislative	 framework	 that	

gives	 electricity	 generators	 the	 freedom	 to	 operate	 with	 only	 minimal	

regulatory	constraint.		See	Houlton	I,	2014 ME 38,	¶	5,	87 A.3d 749.		Here,	as	

an	integral	part	of	its	approval	of	the	APUC	transaction,	the	Commission	has	

attempted	to	materially	expand	the	scope	of	its	regulatory	authority	over	an	

electricity	 generator	 beyond	 what	 the	 Restructuring	 Act	 will	 allow—for	

example,	by	requiring	APUC	to	exclude	Emera,	which	would	own	a	significant	

ownership	 stake	 in	 APUC,	 from	 participating	 in	 certain	 decisions	 regarding	

power	 generation;	 by	 requiring	 APUC	 to	 authorize	 the	 Commission	 to	 direct	

that	 it	 divest	 itself	 of	 power	 generation	 facilities;	 and	 by	 requiring	 APUC	 to	

participate	 in	 Commission	 proceedings	 without	 the	 right	 to	 object	 on	 the	

ground	that	the	Commission	is	without	jurisdiction.	 	The	scope	and	depth	of	

the	 Commission’s	 regulatory	 weight	 affecting	 APUC	 as	 a	 generator	 is	

contravened	by	the	Restructuring	Act.8		Cf.	Town	of	Eagle	Lake	v.	Comm’r,	Dep’t	

of	 Educ.,	 2003 ME 37,	 ¶	 7,	 818 A.2d 1034  (stating	 that	 statutes	 are	 to	 be	

construed	to	achieve	legislative	purpose).			

   8		In	its	April	2012	and	October	2014	orders,	the	Commission	also	imposed	regulatory	conditions	

on	First	Wind,	which	is	the	wind	power	producer	that	was	associated	with	the	joint	venture	from	
which	 Emera	 withdrew.	 	 The	 Commission	 abrogated	 the	 conditions	 specific	 to	 the	 wind	 power	
venture	in	its	August	2015	order	and,	for	the	reasons	discussed	supra	at	¶¶	14-16,	those	conditions	
are	no	longer	at	issue.	
20	

      [¶34]	 	 In	 Houlton	 I,	 we	 did	 not	 hold	 that	 section	 3204(5)	 prohibits	 a	

T&D	 entity	 from	 acquiring	 any	 financial	 interest	 in	 an	 electricity	 generator.		

Rather,	 we	 concluded	 that	 section	 3204(5)	 bars	 the	 creation	 of	 a	 financial	

interest	 that	 would	 likely	 produce	 incentives	 for	 favoritism	 that	 would	

undermine	the	purpose	of	the	Restructuring	Act.		Houlton	I,	2014 ME 38,	¶	36,	

87 A.3d 749.	 	 To	 adjudicate	 the	 issue	 presented	 on	 this	 appeal,	 we	 need	 not	

decide	whether	as	a	general	matter	section	708	authorizes	the	Commission	to	

impose	 conditions	 that	 would	 negate	 an	 otherwise	 proscribed	 financial	

interest	when	T&D	and	generation	entities	become	affiliated.		Rather,	we	need	

hold	only	that	the	Commission	acted	outside	of	its	authority	when	it	imposed	

conditions	 on	 an	 electricity	 generator	 such	 as	 APUC,	 where	 those	 conditions	

contravene	 the	 legislative	 framework	 of	 allowing	 generators	 to	 operate	 with	

very	 little	 regulatory	 governance.	 	 Because	 those	 conditions	 constitute	 a	

material	portion	of	the	underlying	framework	that	the	Commission	viewed	as	

necessary	to	approve	the	APUC	transaction,	we	must	vacate	the	Commission’s	

decision	and	remand	with	instructions	to	deny	the	reorganization	petition.	

      The	entry	is:	

                    Order	 of	 the	 Public	 Utilities	 Commission	
                    vacated.	 	 Remanded	 to	 the	 Commission	 with	
                    instructions	to	deny	the	petition.		
	
                                                                             21	

	     	      	      	     	      	
	
On	the	briefs:	
	
      Alan	 G.	 Stone,	 Esq.,	 and	 Benjamin	 J.	 Smith,	 Esq.,	 Skelton,	
      Taintor	 &	 Abbott,	 Auburn,	 for	 appellant	 Houlton	 Water	
      Company		
      	
      Anthony	 Buxton,	 Esq.,	 Andrew	 Landry,	 Esq.,	 and	 Robert	
      Borowski,	Esq.,	Preti,	Flaherty,	Beliveau	&	Pachios,	Augusta,	
      for	appellant	Industrial	Energy	Consumer	Group	
      	
      William	 S.	 Harwood,	 Esq.,	 and	 Rachel	 M.	 Wertheimer,	 Esq.,	
      Verrill	Dana	LLP,	Portland,	for	appellee	Emera	Maine	
      	
      Charles	 Cohen,	 Esq.,	 and	 Leslie	 Raber,	 Esq.,	 Maine	 Public	
      Utilities	 Commission,	 Augusta,	 for	 appellee	 Maine	 Public	
      Utilities	Commission	
      	
	
At	oral	argument:	
	
      Benjamin	 J.	 Smith,	 Esq.,	 for	 appellant	 Houlton	 Water	
      Company	
      	
      Charles	 Cohen,	 Esq.,	 for	 appellee	 Maine	 Public	 Utilities	
      Commission	
      	
      William	S.	Harwood,	Esq.,	for	appellee	Emera	Maine	
	
	
	
	
Public	Utilities	Commission	docket	number	2011-170	
FOR	CLERK	REFERENCE	ONLY