Houlton Water Company v. Public Utilitites Commission
150 A.3d 1284
| Me. | 2016Background
- Bangor Hydro-Electric (BHE) and Maine Public Service (MPS) (later merged as Emera Maine) petitioned the Maine PUC to authorize Emera, their parent, to increase ownership in Algonquin Power & Utilities Corp. (APUC), a Maine generator, creating an affiliated interest subject to review under 35-A M.R.S. § 708 and potentially implicated by § 3204(5).
- The PUC initially approved the transactions (including a separate Emera wind joint venture) in 2012 but imposed extensive conditions (structural separation, codes of conduct, audits, access to books, divestiture powers, etc.).
- In Houlton I, the Law Court vacated that approval, holding § 3204(5) bars affiliations that create a financial interest likely to produce incentives for favoritism by a T&D utility even if the T&D will not control the generator.
- On remand the PUC again approved the APUC transaction (Oct. 2014) by imposing conditions under § 708 intended to eliminate the favoritism incentives; Emera later withdrew from the wind venture and the PUC modified its conditions (Aug. 2015).
- Intervenors (Houlton Water and Industrial Energy Consumer Group) appealed again, arguing the PUC lacked authority to (1) amend its order while the appeal was pending and (2) impose conditions that effectively regulate a generator beyond the limited oversight permitted by the Restructuring Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the PUC could amend its Oct. 2014 order while that order was on appeal | PUC modification during appeal is void because appellate rule (M.R. App. P. 3(b)) prohibits action affecting a case on appeal | PUC relied on a specific statutory grant, 35-A M.R.S. § 1321, allowing it to rescind/alter any order at any time | The court held § 1321 (specific) prevails over § 1320/Rule 3(b) (general); PUC could modify the order while appeal pending |
| Whether the PUC may use § 708 conditions to cure a § 3204(5) affiliation that creates favoritism incentives | Intervenors: once the PUC found the affiliation would create favoritism incentives, it could not rely on § 708 conditions to transform a statutory violation into an acceptable transaction | PUC/Emera: imposing conditions under § 708 to prevent favoritism is permissible and can render the transaction compliant with § 3204(5) | Court did not decide the broad question but held the PUC exceeded authority by imposing certain conditions that conflict with the Restructuring Act’s deregulatory goals for generators |
| Whether imposing conditions directly on APUC (an electricity generator) was within the PUC’s authority | Intervenors: conditions that subject APUC to decisionmaking restrictions, compelled participation in proceedings, divestiture orders, and similar controls unlawfully expand PUC authority over generators | PUC/Emera: such conditions are necessary to protect ratepayers and prevent favoritism; within § 708 power when approving reorganizations | Court held those conditions materially expanded PUC regulatory control over a generator contrary to § 3204 and the Act’s purpose; PUC acted outside its authority in imposing them |
| Remedy: whether the PUC order should be upheld, vacated, or remanded for revision | Intervenors: order must be vacated and petition denied because core conditions were unlawful | PUC/Emera: conditions could be relied on to make the transaction lawful; remand to reframe conditions was appropriate | Court vacated the PUC order and remanded with instructions to deny the reorganization petition because unlawful generator-directed conditions were integral to the PUC’s approval |
Key Cases Cited
- Houlton Water Co. v. Pub. Utils. Comm’n, 87 A.3d 749 (Me. 2014) (establishes that § 3204(5) bars T&D affiliations that create financial incentives likely to produce favoritism)
- Central Me. Power Co. v. Pub. Utils. Comm’n, 90 A.3d 451 (Me. 2014) (context on Restructuring Act goals separating generation from T&D)
- Taylor v. Pub. Utils. Comm’n, 138 A.3d 1214 (Me. 2016) (standard of review for PUC decisions)
- Fleet Nat’l Bank v. Liberty, 845 A.2d 1183 (Me. 2004) (statutory-construction principle: specific statutes prevail over general ones)
- Town of Eagle Lake v. Comm’r, Dep’t of Educ., 818 A.2d 1034 (Me. 2003) (statutory construction to effectuate legislative purpose)