CITY OF SIDNEY v. MUNICIPAL ENERGY AGENCY OF NEB.
No. S-17-471.
Nebraska Supreme Court
September 28, 2018
301 Neb. 147
___ N.W.2d ___
Filed September 28, 2018. No. S-17-471.
- Nebraska Power Review Board: Arbitration and Award: Appeal and Error. On an appeal from the decision of an arbitration board convened under
Neb. Rev. Stat. § 70-1301 et seq. (Reissue 2009), trial in the appellate court is de novo on the record. - Nebraska Power Review Board: Arbitration and Award: Evidence: Appeal and Error. Despite de novo review, when credible evidence is in conflict on material issues of fact, the appellate court will consider and may give weight to the fact that the arbitration board observed the witnesses and accepted one version of the facts over another.
- Nebraska Power Review Board: Arbitration and Award: Contracts. Where contractual issues are intertwined with a rate dispute, such contractual issues are within the jurisdiction of an arbitration board convened under
Neb. Rev. Stat. § 70-1301 et seq. (Reissue 2009). - Nebraska Power Review Board: Arbitration and Award: Notice. Under
Neb. Rev. Stat. § 70-1306 (Reissue 2009), an arbitration board is authorized to permit amendments to a notice, substantive or not, at any time in the arbitrative proceedings. - Public Utilities: Proof. The purchaser of energy has the burden of proving that the transmission rate it is being charged is unfair, unreasonable, or discriminatory.
- Contracts. In interpreting a contract, a court must first determine, as a matter of law, whether the contract is ambiguous.
- ____. A contract written in clear and unambiguous language is not subject to interpretation or construction and must be enforced according to its terms.
- Contracts: Substantial Performance. To establish substantial performance under a contract, any deviations from the contract must be relatively minor and unimportant.
____: ____. Substantial performance is shown when the following circumstances are established by the evidence: (1) The party made an honest endeavor in good faith to perform its part of the contract, (2) the results of the endeavor are beneficial to the other party, and (3) such benefits are retained by the other party. - ____: ____. Substantial performance is a relative term, and whether it exists is a question to be determined in each case with reference to the existing facts and circumstances.
- Appeal and Error. An appellate court is not obligated to engage in an analysis which is not needed to adjudicate the controversy before it.
Appeal from the Public Power Review Board. Reversed.
John M. Guthery, Derek A. Aldridge, and Richard D. Sievers, of Perry, Guthery, Haase & Gessford, P.C., L.L.O., for appellant.
Stephen M. Bruckner and Alexander D. Boyd, of Fraser Stryker, P.C., L.L.O., for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, and Funke, JJ.
Funke, J.
This is an appeal from an arbitration board’s decision under
On our de novo review, we conclude that the increased monthly transmission rate charges were not incurred arbitrarily
I. BACKGROUND
1. Relevant Entities
Sidney is a political subdivision and the operator of the retail electric system within its municipality and Fort Sidney, which serves approximately 3,900 customers. Sidney’s peak energy need ranges from 12 megawatts (MW) in the winter to 18.5 MW in the summer.
MEAN is a Nebraska political subdivision and a not-for-profit wholesale energy provider, created under Nebraska’s Municipal Cooperative Financing Act.1 It is composed of over 60 member communities—in Nebraska, Iowa, Colorado, and Wyoming—who have signed an Electrical Resources Pooling Agreement, which is the master agreement that governs all supplemental contracts between the parties. MEAN supplies its members’ wholesale energy by contracting for generation rights, with other members and third-party energy providers, and transmission rights, with third-party transmission service providers. MEAN is governed by a board of directors and a management committee, both of which consist of appointed representatives from each member community.
MEAN has served as Sidney’s primary wholesale energy supplier since 1982. At all relevant times, MEAN has served Sidney’s energy needs through the Sidney West switchyard (Sidney West). Sidney West is composed of several substations
Because the arbitration board had the authority to allow Sidney to amend its notice and did allow the amendment, this assignment of error is without merit.
3. Sidney’s Claims
The board did not consider Sidney’s implied covеnant of good faith and fair dealing claim. In addition, Sidney did not file a motion for rehearing or a cross-appeal on this issue, so we do not consider it.
Sidney’s breach of contract claims, in the limited context of this dispute, depend on showing that MEAN’s breach resulted in an unfair, unreasonable, or discriminatory rate. The board determined that there was no gap in the transmission path serving Sidney, so it ruled that MEAN’s unilateral and unnecessary change to the transmission path, in breach of exhibit A, was unfair to Sidney to the extent that it increased Sidney’s transmission rate. The board also found that the rate increase to Sidney was unfair because the SSM required MEAN to bear that expense and discriminatory because MEAN inconsistently socialized transmission costs. Upon our de novo review, we find that the arbitration board erred in its ultimate conclusions on the breach of contract claims and certain underlying factual findings.
(a) MEAN’s Change to Transmission Path Substantially Complied With Exhibit A
(i) MEAN Could Not Transmit Energy Across WAPA’s Facilities Without Contractual Rights
The crux of this claim is whether WAPA’s 115 kV bus constituted a gap in the transmission path serving Sidney. As the
MEAN contends that the arbitration board erred in determining WAPA’s facilities did not constitute a gap in the transmission path. It contends that Vojdani testified to telling MEAN that MEAN could not transmit energy across WAPA’s 115 kV bus without contractual rights to do so and that the Tri-State Agreement did not provide such rights. Further, it argues that the fact that WAPA had not charged for the usage of its facilities in the past did not preclude it from penalizing for that unreserved use or charging for any future use.
Sidney contends that there was no gap in the transmission path. It argues that MEAN staff admitted that a complete transmission path could be created with the LAPT SCSW>SCSW e-tag, which proved that the Tri-State Agreement itself provided MEAN the right to use WAPA’s facilities and that no charge was necessary—based on both experts’ testimony. Sidney also argues that the board found Vojdani’s testimony was not entitled to weight, because it was based on the incorrect information about the Tri-State Agreement provided to him by Cutsor.
We disagree with Sidney and the arbitration board that Vojdani’s testimony was not entitled to weight. Vojdani testified there were two independent bases for placing Sidney on LAP NITS: (1) MEAN had insufficient firm capacity on the MBPP line and insufficient total capacity on the Tri-State facilities to serve Sidney, and (2) MEAN had no right to transmit energy across WAPA’s 115 kV bus. Vojdani’s testimony regarding insufficient capacity on the Tri-State facilities was clearly based on erroneous information from Cutsor. However, as Cutsor acknowledged, that incorrect information had no relevance to Vojdani’s determination that MEAN lacked any right to transmit energy across WAPA’s bus. Accordingly, we find that Vojdani’s testimony regarding
The communications between MEAN, Tri-State, and WAPA while troubleshooting the transmission issue and the testimony of MEAN staff also support a conclusion that the WAPA bus constituted a gap in the transmission path. Vojdani and MEAN staff testified that they were unaware of any contractual insufficiency in the transmission path to Sidney before the grandfathered e-tag was discontinued. After grandfathered e-tags were discontinued, however, the evidence shows MEAN was unable to complete a transmission path without relying on PtP or the LAPT SCSW>SCSW e-tag.
While MEAN initially believed the gap was caused by Tri-State’s transformer, its understanding evolved as a result of Tri-State’s being unable to offer any solution to the gap other than recommending MEAN use the LAPT SCSW>SCSW e-tag, which Vojdani confirmed would exprеss a contractual right to use WAPA’s bus. On a conference call to discuss the issue further, Vojdani informed MEAN that it could not schedule a complete transmission path to Sidney without using WAPA’s 115 kV bus and that MEAN had no contractual right to do so. MEAN staff testified that they obtained LAP NITS for Sidney to acquire the right to transmit energy to Sidney across WAPA’s 115 kV bus.
The board discounted Cutsor’s testimony that the WAPA bus was the gap in transmission service, because he also testified that the gap was the Tri-State transformer. This statement, however, stood in contradiction to his identification of the WAPA bus as the gap during at least two other portions of his testimony and his description of the development of his understanding regarding the gap.
Sidney argues that Tri-State’s suggestion that MEAN use the LAPT SCSW>SCSW e-tag was either an aсknowledgment that the Tri-State Agreement assigned MEAN a license to use WAPA’s facilities or that the suggestion itself assigned MEAN the right to do so. The Tri-State Agreement, however,
Both MEAN’s and Sidney’s experts testified that transmitting energy across a bus at the same voltage level is generally not charged for as a professional courtesy in the “west” region of the country. However, neither expert claimed to do any work оr to have specific knowledge of the customs in the Rocky Mountain region, where the parties and the relevant division of WAPA are located. Accordingly, regardless of the accuracy of these statements, they provide no insight regarding WAPA’s policies, as a tariff administrator, concerning the use of facilities at the same voltage level or WAPA’s practices, as a transmission service provider, in charging for the use of its own facilities. In addition, Vojdani explicitly testified that the transmission across its facilities to serve Sidney at Sidney West would require a contractual right and compensation to do so. This testimony was uncontested and more persuasive than the experts’ generalities.
Sidney also argues that WAPA’s 115 kV bus is not an asset that WAPA can charge for the use of, because the bus was not a posted path on OASIS. The arbitration board agreed that the failure to list the bus as a posted path was inconsistent with the claim that WAPA could charge for the use of the bus. However, MEAN’s expert qualified his testimony on this subject by stating that registering the available transfer capability is applicable only to line segments. We also find the limited testimony on this issue contradicted by the undisputed testimony that WAPA had registered the LAPT SCSW>SCSW e-tag.
Based on the preceding evidence, we conclude, on our de novo review, that there was a gap in the transmission path
We reject Sidney’s attempt to fault MEAN for acting in compliance with federal regulations that prohibit the unreserved use of transmission facilities. While it is undisputed that MEAN alerted WAPA to its unreserved use of WAPA’s facilities, MEAN did so in a good faith attempt to obtain a valid transmission path to serve Sidney. The actions of MEAN staff were also motivated by the directive of MEAN’s board of directors, which Sidney is represented upon, implementing a culture of compliance. The evidence shows that MEAN could have incurred an unreserved-use penalty of approximately $1.16 million annually for scheduling transmission on WAPA’s bus.
Further, although WAPA had not charged MEAN for using its bus for 18 years, Sidney provides no support for its contention that WAPA would have been precluded from charging MEAN for that unreserved use or any future use. Vojdani testified that he considered penalizing MEAN for its use of the bus, but did not because of MEAN’s active and immediate action to correct the issue once it discovered it, but that any future use of WAPA facilities required compensation. Additionally, the evidence shows Sidney was fully informed of the unreserved-use issue before being placed on LAP NITS.
(ii) LAP NITS Was Lowest Cost Transmission Path
MEAN argues that LAP NITS was the most cost-effective solution to create a complete transmission path to Sidney. It asserts that it diligently considered alternate options but that each would have cost more and been unable to provide Sidney with all of its energy at firm capacity.
WAPA’s 115 kV bus constituted a gap in the transmission service to Sidney, and Sidney’s facilities conneсted only to WAPA’s bus, so a solution had to be implemented in order for
[5] MEAN admitted that it did not consider using Sidney’s existing generators as an option to serve Sidney’s energy needs. However, Sidney admitted the energy rate from its generators was substantially higher than under the rate schedule, there would have bеen substantial costs to fix and make its generators compliant with federal regulations, and at full capacity, the generators could produce only 8 MW of energy. The evidence does not suggest the cost of fixing the existing generators or acquiring sufficient additional generators and facilities to produce the other 8 MW of energy Sidney needs. There was also no evidence about the costs or ability of Sidney to build facilities that could connect directly to those owned by Tri-State or another entity. Sidney had the burden of proving that the transmission rate charged by MEAN was unfair, unreasonable, or discriminatory.9 Thus, Sidney failed to prove these to be viable alternatives to LAP NITS.
The record shows that MEAN considered several alternative options to LAP NITS for serving Sidney. MEAN staff testified that WAPA would not offer any service less than full tariff service, that full tariff service with Tri-State would still require LAP NITS, and that PtP service over WAPA’s bus would have cost more than LAP NITS and been less reliable. MEAN’s expert also testified that he examined whether other entities could have served Sidney’s energy needs and concluded that
Based on the evidence presented, we conclude that LAP NITS was the lowest cost solution for transmitting energy to Sidney.
(iii) Sidney Is Responsible for Costs of Transmission Rights at Sidney West
MEAN contends that the arbitration board erred in finding thе POD was located on the MBPP transmission line at the fence of Tri-State’s facilities and not on Tri-State’s 230 kV bus. MEAN argues that the language of the SSM defines a POD as the “outlet of the interconnected transmission system,” which cannot logically be located on a transmission line, and that based on its nature, energy cannot be forced on a specific transmission line. It also argues that the SSM does not require it to transmit Sidney’s energy along any specific path. Instead, it asserts that the POD is relevant only because it represents the change in the possession of energy and that the SSM makes Sidney responsible for all transmission costs after the POD.
Sidney argues that exhibit A depicts the POD at the MBPP and Tri-State interconnect on the MBPP line, which testimony established was at the fence around Tri-State’s substation. It argues that exhibit A ensured MEAN would transmit Sidney’s energy on the MBPP line at 230 kV and across the Tri-State transformer. Sidney also argues that the contract requires MEAN to contract, at its own expense, for all transmission rights necessary to reach Sidney’s facilities.
[6,7] In interpreting a contract, a court must first determine, as a matter of law, whether the contract is ambiguous.10
The SSM definеs the POD as that point “at the outlet of the interconnected transmission system . . . at which MEAN is obligated to deliver, and [Sidney] is obligated to accept delivery of, [energy].” Exhibit A places the symbol indicated as the POD on the MBPP line prior to a place identified as Tri-State’s 230 kV/115 kV transformer. The POD is identified as the “MBPP/Tri-State 230 kV Interconnection.”
The clear and unambiguous meaning of the SSM’s definition of the POD is that it is the point where the MBPP line ends—the outlet—and connects to the facilities owned by Tri-State. Sidney argues that the contract would have specified the 230 kV bus if it had intended for the bus to be the POD, as opposed to the interconnect which was actually listed. In fact, there is no 230 kV bus depicted on exhibit A.
The contract is ambiguous regarding where the interсonnect between MBPP and Tri-State is located. While Sidney’s expert testified that the interconnect is generally located at the fence line of the substation being entered, he acknowledged that there was no change of possession depicted on the diagram in evidence. Nevertheless, it is not necessary to determine the exact location of the POD, whether it is on the transmission line or the specific breaker of Tri-State’s 230 kV bus that the MBPP line connects to, because the contract makes the POD relevant only regarding the change of ownership of energy. Therefore, it is sufficient to conclude that the contract places all of Tri-State’s facilities on Sidney’s side of the point of delivery.
Sidney argues, and the arbitratiоn board decided, that the SSM requires MEAN to contract for all facilities necessary to connect to Sidney’s facilities at its own expense.
Section 5.01 of the SSM states: “MEAN shall furnish, install, lease, contract for and maintain, at its own expense, all equipment and facilities necessary for connecting electric lines and facilities to [Sidney’s] facilities at the [POD], including stepdown transformers where service is supplied at [Sidney’s] distribution voltage, unless [Sidney] otherwise provides such facilities.”
Section 5.04 of the SSM, “[Sidney’s] Lines and Equipment,” states that “[a]ll lines, substations and other electrical facilities . . . located on [Sidney’s] side of the [POD] shall be furnished, installed and maintained by [Sidney].”
The SSM also requires Sidney to pay MEAN for energy in accordance with the provisions of the rate schedule and states that any additional charges for supplying energy through an intervening agency’s system, incurred beyond the service included in the rate schedule, will be paid by MEAN and billed to Sidney. The rate schedule specifies that “[t]ransmission service charges . . . for delivery of [Sidney’s entire energy needs in excess of its WAPA allocation] shall be billed at the transmission service provider’s then-current transmission rates.”
However, a complete reading of § 5.01 provides that MEAN is only responsible for contracting facilities connecting “to [Sidney’s] facilities at the [POD].” While the SSM only discusses requirements for Sidney to provide and maintain facilities on its side of the POD, the contract also clearly envisions circumstances where Sidney will be responsible for reimbursing MEAN for transmission charges incurred to deliver its energy. The arbitration board’s reading of the contract ignores both the qualifying language regarding MEAN’s responsibility to bear the expense for acquiring transmission rights and renders all language regarding Sidney’s responsibility to pay for transmission cost superfluous.
The SSM discusses the POD only as a mechanism for shifting ownership of the energy, which also shifts the responsibility for the transmission. Accordingly, we find that the plain language of the SSM allows MEAN to contract for transmission rights on Sidney’s side of the POD and pass those expenses on to Sidney. Therefore, the SSM allowed MEAN to contract for transmissions right within Sidney West and pass those expenses to Sidney.
MEAN argues that its delivery of energy to Sidney through LAP NITS is in substantial compliance with the SSM. It asserts that LAP NITS was required to complete a transmission path to Sidney and that once Sidney was on LAP NITS, the Tri-State Agreement was an unnecessary additional expense. Further, it asserts that the SSM does not require it to deliver energy on any specific path, so its delivery through a new path at a higher capacity level and without unnecessary expenses complies with the SSM.
Sidney argues that exhibit A required MEAN to deliver its energy through the MBPP line and the Tri-State facilities, because that path was highly favorable to Sidney, and that MEAN’s change to the POD caused it to incur the additional transmission charges. However, its argument is prefaced on its cоnclusion that there was no gap in the transmission path.
[8-10] To establish substantial performance under a contract, any deviations from the contract must be relatively minor and unimportant.13 Substantial performance is shown when the following circumstances are established by the evidence: (1) The party made an honest endeavor in good faith to perform its part of the contract, (2) the results of the endeavor are beneficial to the other party, and (3) such benefits are retained by the other party.14 Substantial performance is a relative term, and whether it exists is a question to be determined in each case with reference to the existing facts and circumstances.15
Based on the facts of this case, wе conclude that the specific transmission line the POD was placed on is irrelevant
Sidney elicited extensive testimony regarding the extremely low transmission rate enabled by the transmission path memorialized in exhibit A and Sidney’s belief that exhibit A was an agreement with MEAN that ensured a continuation of this low rate. However, the SSM does not protect Sidney from any сhanges to its transmission path from the third parties who own facilities in Sidney West. Instead, unlike the “Service Schedule J,” a previous supplemental agreement which placed all facilities in Sidney West on MEAN’s side of the POD and required MEAN to maintain the Tri-State Agreement, the SSM placed the Tri-State facility on Sidney’s side of the POD. This change required Sidney to accept all financial risks for changes with the Tri-State Agreement.
Before the SSM was executed, Cutsor specifically informed Sidney that the Tri-State Agreement was terminable at will and that the consequence of termination by Tri-State would be a $300,000 increase in transmission costs. While aware of this issue, Sidney chose to not continue with the previous arrangement which placed all facilities in Sidney West on MEAN’s side of the POD and required MEAN to maintain the Tri-State Agreement. By executing the SSM, Sidney accepted the full financial burden of the ever-looming possibility that Tri-State could terminate its favorable transmission path. While the expense for transmitting energy across WAPA facilities was unforeseen, it was another risk for which Sidney accepted financial responsibility.
As we concluded above, Sidney’s facilities connect only to WAPA’s 115 kV bus, which created a gap in the transmission path to Sidney, and MEAN billed Sidney for the costs of the
Only after Sidney was scheduled to incur the costs to close the gap on its side of the POD with LAP NITS did MEAN decide to change the transmission path required in exhibit A. This change offered substantial benefits to Sidney, which it has since retained. First, Sidney saves the monthly costs of the Tri-State Agreement, which provided rights that were unnecessarily duplicative to transmission rights provided by LAP NITS. Second, Sidney receives all of its energy at firm capacity and has additional protection against curtailment, because WAPA has several lines connecting to Sidney West. Third, LAP NITS includes generation and transmission resources to Sidney, which allows MEAN to redirect LRS and MBPP resources to lower energy rates for all members.
Because Sidney’s increased transmission costs resulted solely from its agreement to bear the financial risk for transmission right changes in Sidney West and because MEAN’s decision to use a new transmission path only benefited Sidney and MEAN, we conclude its decision to change the transmission path was a good faith effort to perform its duty under the SSM. Thus, we hold that MEAN substantially complied with the SSM and actually provided Sidney benefits by changing the POD.
While Sidney argues, and the board concluded, that MEAN acted in bad faith by unilaterally changing the POD, the evidence presentеd shows that MEAN’s unilateral action to place Sidney on LAP NITS was required because of the use of the
Sidney staff responded that they would make their own independent investigations, but the record does not show that Sidney did so. Further, Sidney rеfused to accept the changes on the schedule WAPA required to avoid unreserved-use penalties, which MEAN complied with and seemingly convinced WAPA to accept. While Sidney staff testified that MEAN had provided them with no alternatives, the record does not support that testimony. Instead, MEAN exercised its right to incur additional transmission expenses on Sidney’s behalf only after Sidney had made no suggestions for alternative options and expressed an unwillingness to accept that a material change in circumstances had occurred.
We conclude that Sidney’s rate dispute based on its allegation that MEAN changed the POD in breach of the SSM is without merit. Thus, the arbitration board erred in finding that MEAN breached exhibit A of the SSM to Sidney’s detriment.
(b) MEAN Did Nоt Breach SSM by Charging Unfair, Unreasonable, or Discriminatory Transmission Rate
The arbitration board made two findings that supported a conclusion that MEAN breached the SSM by charging an unfair, unreasonable, or discriminatory transmission rate: (1) The contract required MEAN to acquire any transmission rights necessary to connect to Sidney’s facilities at its own expense, and (2) MEAN inconsistently passed through transmission
MEAN argues that it cannot socialize the transmission costs incurred solely to transmit energy to Sidney, because doing such would result in discriminatory charges to its other members. It argues that the charges passed through to Sidney were fair because they are incurred exclusively for Sidney’s benefit, reasonable because they are based on the number of MW transmitted to Sidney, and nondiscriminatory both because they are calculated the same by WAPA and MEAN as the charges for every member on LAP NITS and because they were consistent with the average transmission cost ratio for all MEAN members on LAP NITS.
Sidney argues that MEAN should have socialized the cost of its LAP NITS, because MEAN has socialized other communities’ transmission costs and MEAN is now benefiting from Sidney’s no longer using the LRS and MBPP resources. It also argues that the transmission costs MEAN charges it is discriminatory because its transmission cost ratio had been 1 percent but is now 10 percent of total energy costs.
The arbitration board cited MEAN’s socialization of the LRS and MBPP resource costs, the Southwestern Power Pool settlement costs, and the PtP costs for serving Sidney’s transmission needs after the 2013 e-tag changes to conclude that MEAN could have socialized the increased transmission costs to Sidney. However, we find that each of these circumstances is distinguishable from the LAP NITS expenses incurred to solely benefit Sidney.
First, the LRS and MBPP resources were obtained for the benefit of all MEAN members, not just Sidney. MEAN obtained about 28 MW of energy from LRS in the early 1980’s. The Electrical Resources Pooling Agreement explicitly authorizes MEAN to purchase generatiоn capacity, upon
Second, the costs of the Southwestern Power Pool settlement and PtP used to serve Sidney for 10 months represent expenses incurred because of the actions of MEAN staff, so it is reasonable to socialize them as an organizational expense. While Sidney might not have directly benefited from the unreserved use that led to the Southwestern Power Pool settlement, MEAN staff were responsible for the scheduling of that unreserved use. Accordingly, this expense may be traced to the actions of MEAN as an organization, just as an unreserved-use penalty for the use of WAPA’s 115 kV bus for Sidney could have been. In recognition of this organizational risk, the board of directors passed the culture-of-compliance directive to help ensure that the organization would not again incur such expenses.
Additionally, the PtP costs were seemingly incurred because MEAN staff did not act timely in addressing the issue with Sidney’s transmission path. MEAN was unable to e-tag a complete path to Sidney for nearly 20 months. It took MEAN staff almost 11 months to even determine what the problem was and another almost 5 months to start working with Sidney on a solution. The record does not establish how MEAN’s transmitting energy to Sidney for 10 of the 20 months but the costs of the PtP for the other 10 months, while serving Sidney exclusively, is attributable to an organization expense of MEAN’s insufficient response to the problem. Despite the arbitration board’s findings, the evidence shows that the PtP was acquired to sell excess organizational energy to lower
The evidence also shows that the costs of LAP NITS was fair, reasonable, and nondiscriminatory. Sidney is paying for transmission service that solely benefits Sidney and is necessary to transmit Sidney’s energy. As MEAN argues, the fact that Sidney had benefited from low transmission costs because of its location historically does not entitle it to such benefit in perpetuity. The evidence shows that WAPA charges all customers based on MW used, not distance traveled. Accordingly, the charges were reasonably based on MEAN’s usage of LAP NITS and nondiscriminatory because all LAP NITS customers are charged under the same formula.
4. We Do Not Consider MEAN’s Remaining Assignments of Error
The arbitration boаrd and the parties considered exhibit 100 relevant to establishing whether (1) Tri-State had a right to use WAPA’s 115 kV bus and (2) WAPA had a right to use Tri-State’s transformer to transmit energy to serve Sidney. Regardless of whether or not Tri-State had a right to use WAPA’s bus, there was no evidence that it ever assigned such a right to MEAN for transmitting Sidney’s energy. Further, we concluded that MEAN has substantially complied with the SSM even if it transmits Sidney’s energy from the Archer switchyard to WAPA’s 115 kV bus directly without going through Tri-State’s facilities. Accordingly, even if exhibit 100 was inadmissible, it had no relevance to our decision.
MEAN’s remaining assignments of error concern the remedy ordered by the arbitration board. Because we hold that the arbitration board erred by ruling in favor of Sidney, we need not address the remaining assignments of error.
V. CONCLUSION
We conclude that Sidney’s increased transmission rate was incurred due to its unauthorized use of WAPA’s facilities. Sidney’s current transmission costs are approximately 10 percent of Sidney’s total energy costs, which is the same average transmission cost ratio for all of MEAN’s members. We further conclude that MEAN’s actions to gain authorized access to WAPA’s facilities, in order to ensure stable energy to Sidney, substantially complied with the requirements of the SSM and that MEAN properly passed the increased transmission rate to Sidney, pursuant to the terms of the SSM. Therefore, we reverse the decision of the arbitration board.
Reversed.
Wright and Kelch, JJ., not participating.