*1 ******************************************************
The ‘‘officially released’’ date that appears near the beginning of each opinion is the date the opinion will be published in the Connecticut Law Journal or the date it was released as a slip opinion. The operative date for the beginning of all time periods for filing postopinion motions and petitions for certification is the ‘‘officially released’’ date appearing in the opinion. In no event will any such motions be accepted before the ‘‘officially released’’ date.
All opinions are subject to modification and technical correction prior to official publication in the Connecti- cut Reports and Connecticut Appellate Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the Connecticut Law Journal and subsequently in the Con- necticut Reports or Connecticut Appellate Reports, the latest print version is to be considered authoritative.
The syllabus and procedural history accompanying the opinion as it appears on the Commission on Official Legal Publications Electronic Bulletin Board Service and in the Connecticut Law Journal and bound volumes of official reports are copyrighted by the Secretary of the State, State of Connecticut, and may not be repro- duced and distributed without the express written per- mission of the Commission on Official Legal Publications, Judicial Branch, State of Connecticut. ****************************************************** *2 KLEEN ENERGY SYSTEMS, LLC COMMISSIONER
OF ENERGY AND ENVIRONMENTAL PROTECTION (SC 19362) Palmer, Zarella, Eveleigh, Espinosa and Robinson, Js. Argued April 21—officially released November 3, 2015 Michael A. Kurs , with whom were Lee D. Hoffman and, on the brief, Megan Youngling Carannante , for *3 the appellant (plaintiff).
Seth A. Hollander , assistant attorney general, with whom were Clare E. Kindall , assistant attorney general, and, on the brief, George Jepsen , attorney general, and Gregory D’Auria , solicitor general, for the appellee (defendant).
Vincent P. Pace , for the appellee (intervening defen- dant Connecticut Light and Power Company).
Joseph A. Rosenthal , for the appellee (intervening defendant Office of Consumer Counsel).
Opinion ESPINOSA, J. The issue in this appeal is whether the defendant, the Commissioner of Energy and Environ- mental Protection, acting through the Public Utilities Regulatory Authority (authority), [1] had jurisdiction to resolve a dispute between the parties to a contract relating to the provision of electrical capacity. Pursuant to General Statutes § 16-243m, the authority conducted a proceeding to develop a form contract between elec- tric distribution companies and generators of electrical capacity for the purpose of reducing certain federally mandated charges to consumers. The plaintiff, Kleen Energy Systems, LLC, an electric generating facility, entered into such a contract with Connecticut Light and Power Company (power company), an electric dis- tribution company. Thereafter, a dispute arose concern- ing the proper interpretation of the contract’s pricing provision. Pursuant to the request of Waterside Power, LLC (Waterside), which had entered into a similar con- tract with the power company, the authority conducted proceedings to resolve the dispute. The plaintiff was a participant in, but not a party to, those proceedings. After the authority issued a decision resolving the dis- pute, Waterside filed a petition for a declaratory ruling in which it challenged the decision. The authority issued a declaratory ruling denying the relief sought by Water- side. The plaintiff then filed an administrative appeal from the authority’s ruling in which it claimed, among other things, that it had a contractual right to submit the dispute to arbitration and that the authority lacked jurisdiction to issue a declaratory ruling to resolve the dispute. After a remand to the authority and an addi- tional administrative appeal from the decision on remand, the trial court ultimately concluded that the authority had jurisdiction to issue a declaratory ruling to resolve the dispute and that the plaintiff had waived its contractual right to arbitration. The trial court also determined that the authority had properly resolved the dispute and dismissed the plaintiff’s appeals. This appeal followed. We conclude that the trial court improperly determined that the authority had jurisdic- tion to resolve the pricing dispute. Accordingly, we reverse the judgment of the trial court on that issue. Because this conclusion renders the plaintiff’s appeal from the authority’s decision on remand moot, we affirm the judgment of the trial court dismissing this appeal on this alternative ground.
The record reveals the following facts that were found by the trial court or that are undisputed, and procedural history. The authority is required pursuant to § 16-243m (a) to ‘‘identify those measures that can reduce federally mandated congestion charges, as defined in section 16-1, and that can be implemented, in whole or in part, on or before January 1, 2006.’’ (Footnote added.) As a general matter, federally man- *5 dated congestion charges arise when there is insuffi- cient electrical capacity to meet demand in a particular area, and they are borne by consumers. Measures to reduce such charges include ‘‘contracts between an electric distribution company . . . and an owner of generation resources for the capacity of such resources.’’ General Statutes § 16-243m (a). For pur- poses of § 16-243m, ‘‘capacity’’ is not electricity itself, but is the ability to produce electricity when required.
Pursuant to the procedures set forth in § 16-243m, the authority was required: (1) to conduct a contested case in order to establish the principles and standards to be used in developing and issuing a request for pro- posals to potential electrical capacity generation resources (capacity resources); General Statutes § 16- 243m (b); (2) to conduct a proceeding to develop and issue a request for proposals; General Statutes § 16- 243m (c); and (3) to evaluate the proposals it received. General Statutes § 16-243m (g). The authority carried out this multistep process in several proceedings, two of which are relevant to this appeal. In the first proceeding, Docket No. 05-07-14PH02, which was an uncontested case for purposes of the Uniform Administrative Proce- dure Act (UAPA); General Statutes § 4-166 et seq.; the authority approved the final form of the contract to be used between capacity resources and electric distribu- tion companies, known as the master agreement (mas- ter agreement proceeding). The master agreement contained a dispute resolution provision that provided for three levels of dispute resolution, culminating in binding arbitration. In the second proceeding, Docket No. 07-04-24, which was a contested case for purposes of the UAPA, the authority evaluated and approved four nearly identical specific capacity contracts, including the master agreement between the plaintiff and the power company (Kleen Energy master agreement) and the master agreement between Waterbury Generation, LLC (Waterbury Generation), and The United Illuminat- ing Company (capacity contract proceeding). In addi- tion to the plaintiff and Waterbury Generation, Waterside and Ameresco CT, LLC, also entered into master agreements.
The master agreement approved by the authority in the master agreement proceeding contained a financial mechanism known as a ‘‘contract for differences’’ by which the amounts to be paid to or, in some cases, by capacity resources were to be determined. In 2010, a dispute arose over the manner in which the contract for differences provision should operate under certain circumstances (capacity clearing price dispute). [8] Accordingly, notwithstanding the contractual dispute resolution provision, Waterside submitted a motion to the authority requesting that it open the master agreement proceeding and resolve the dispute in its favor. In the alternative, Waterside requested that the authority amend the master agreement to reflect the *6 original intent of the parties. [9]
The authority granted Waterside’s motion to open the master agreement proceeding to resolve the capacity clearing price dispute, and, in Docket No. 05-07-14RE02, it combined the dispute with five other disputes that had arisen from other master agreements (combined proceeding). The authority identified the plaintiff as a participant in the combined proceeding. The authority issued a draft decision on May 4, 2011, in which it rejected the capacity resources’ interpretation of the master agreement with respect to the capacity clearing price dispute. The plaintiff submitted written excep- tions to this portion of the draft decision, stating that it had ‘‘an interest in this proceeding to the extent that the [authority’s] ruling affects [the Kleen Energy] [m]as- ter [a]greement . . . .’’ On May 18, 2011, the authority issued its final decision in the combined proceeding, in which it again rejected the capacity resources’ inter- pretation of the master agreement.
Thereafter, Waterside submitted to the authority a petition for a declaratory ruling, Docket No. 11-08-09, in which it challenged the authority’s decision in the combined proceeding. Although Waterside had asked the authority to amend the master agreement to reflect the intent of the parties in its motion to open, Waterside now argued in its petition for a declaratory ruling that the authority was barred by § 16-243m from modifying the master agreement after its effective date. It further claimed that the decision constituted an unconstitu- tional taking. The plaintiff filed a motion in support of Waterside’s petition in which it requested that the authority make it a party to the proceedings on the petition. The authority issued a draft ruling on Water- side’s petition in which it concluded that its resolution of the capacity clearing price dispute was a clarification based on the plain language of the master agreement and did not modify the terms and conditions of the agreement. Accordingly, it affirmed its decision in the combined proceeding. The plaintiff submitted a letter to the authority in lieu of written exceptions to the draft ruling in which it stated that it adopted Waterside’s written exceptions in full. Thereafter, the authority issued a final decision on Waterside’s petition for a declaratory ruling that was substantially similar to its draft decision.
The plaintiff then appealed from the authority’s declaratory ruling to the trial court. General Statutes § 4-183. The Office of Consumer Counsel and the power company filed motions to intervene as party defendants in the plaintiff’s appeal, which the trial court granted. [11] The plaintiff claimed, among other things, that the authority had ‘‘exceeded and abused its authority by failing to require the parties to submit to the dispute resolution provisions of [§ 12.10] of the [m]aster [a]greement.’’ During a status conference on the *7 administrative appeal, the trial court requested that the parties submit briefs on the question of whether the matter ‘‘might need to be remanded to the [authority] for further action’’ to determine whether the parties were required to proceed under the dispute resolution procedures set forth in § 12.10 of the Kleen Energy master agreement. Thereafter, the trial court ordered that the matter be remanded to the authority for consid- eration of that issue.
The plaintiff then filed a motion to stay the pending administrative appeal pursuant to General Statutes § 52- 409 and to compel arbitration of the capacity clearing price dispute pursuant to General Statutes § 52-410 (a). [14] The trial court denied the motion on the ground that, acting in its capacity as an appellate tribunal in an administrative appeal, it did not have the authority to rule on the motion. The trial court also indicated, how- ever, that it would be willing to continue the appellate proceedings in order to provide the plaintiff with an opportunity to file an application pursuant to § 52-410 in a separate proceeding.
On November 15, 2012, the authority issued its deci- sion pursuant to the remand order of the trial court in the administrative appeal on the question of whether the parties were required to proceed pursuant to the dispute resolution procedures of the Kleen Energy mas- ter agreement. The authority concluded that the plain- tiff had waived its rights under that provision by failing to raise them in a timely manner, by participating in the combined proceeding and the proceeding on the declaratory ruling, and by failing to object to the propri- ety of those proceedings. Thereafter, on December 28, 2012, the plaintiff appealed from that decision to the trial court, and that appeal was consolidated with the plaintiff’s initial appeal from the authority’s declaratory ruling on the capacity clearing price dispute. The Office of Consumer Counsel and the power company also intervened as party defendants in this second appeal.
On December 28, 2012, the plaintiff also filed an appli- cation to compel arbitration in the Superior Court for the judicial district of Middlesex (action to compel arbi- tration). The trial court in the action to compel arbitra- tion ultimately stayed the action, however, pending resolution of the administrative appeal. The court rea- soned that allowing the action to compel arbitration to proceed while the administrative appeal was pending would potentially give rise to ‘‘ ‘forum shopping’ ’’ or to inconsistent judgments. The court further reasoned that it was likely that the issues to be raised in the arbitration proceedings would be resolved in the admin- istrative appeal, thereby resulting in administrative res judicata.
Thereafter, the trial court in the administrative appeals concluded that the authority had jurisdiction both to determine whether the plaintiff had waived its *8 contractual right to arbitrate the capacity clearing price dispute and to resolve the merits of that dispute in proceedings on a petition for a declaratory ruling pursu- ant to General Statutes § 4-176 (a). The court further concluded that the authority properly had determined that the plaintiff had waived its contractual right to arbitration and that the authority properly had resolved the capacity clearing price dispute. Accordingly, it dis- missed the plaintiff’s appeals. This appeal followed.
The plaintiff contends on appeal that the trial court improperly determined that: (1) the authority did not violate the plaintiff’s contractual right to arbitrate the capacity clearing price dispute; (2) the plaintiff waived its contractual right to arbitrate the dispute; (3) the authority had jurisdiction to rule on the arbitrability of the dispute; (4) the authority had jurisdiction pursuant to § 4-176 (a) to issue a declaratory ruling resolving the dispute; and (5) the authority did not violate the plaintiff’s constitutional due process rights. We con- clude that the authority lacked jurisdiction to resolve the capacity clearing price dispute. Because this conclu- sion is dispositive, we need not address the plaintiff’s other claims.
We begin our analysis with the standard of review.
‘‘Administrative agencies are tribunals of limited juris-
diction and their jurisdiction is dependent entirely [on]
the validity of statutes vesting them with power and
they cannot confer jurisdiction [on] themselves. . . .
We have recognized that [i]t is clear that an administra-
tive body must act strictly within its statutory authority,
within constitutional limitations and in a lawful manner.
. . . It cannot modify, abridge or otherwise change the
statutory provisions, under which it acquires authority
unless the statutes expressly grant it that power.’’ (Inter-
nal quotation marks omitted.)
Wheelabrator Lisbon,
Inc. Dept. of Public Utility Control
,
‘‘[A] subject matter jurisdictional defect may not be waived . . . [or jurisdiction] conferred by the parties, explicitly or implicitly. . . . [T]he question of subject matter jurisdiction is a question of law . . . and, once raised, either by a party or by the court itself, the ques- tion must be answered before the court may decide the case. . . . We have long held that because [a] determi- nation regarding . . . subject matter jurisdiction is a question of law, our review is plenary.’’ (Internal quota- tion marks omitted.) Id.
Section 4-176 (a) provides: ‘‘Any person may petition an agency, or an agency may on its own motion initiate a proceeding, for a declaratory ruling as to the validity of any regulation, or the applicability to specified cir- cumstances of a provision of the general statutes, a regulation, or a final decision on a matter within the jurisdiction of the agency.’’ The defendants contend that the authority had jurisdiction to issue a declaratory *9 ruling on the capacity clearing price dispute pursuant to § 4-176 because: (1) the ruling required the authority to apply its decision in the master agreement proceed- ing to the specific circumstances of the capacity clear- ing price dispute; and (2) the ruling required the authority to apply § 16-243m to those circumstances. We disagree.
We first address the defendants’ claim that the author- ity had jurisdiction to issue the declaratory ruling because it was applying its decision in the master agreement proceeding, in which the authority approved the form of the master agreement, to the specific cir- cumstances involved in the capacity clearing price dis- pute. As we have indicated, § 4-176 (a) provides that an agency may issue a declaratory ruling on the ‘‘appli- cability to specified circumstances of . . . a final deci- sion on a matter within the jurisdiction of the agency.’’ (Emphasis added.) Section 4-166 (5) defines in relevant part a ‘‘ ‘[f]inal decision’ ’’ for purposes of the UAPA as ‘‘(A) the agency determination in a contested case, (B) a declaratory ruling issued by an agency pursuant to section 4-176, or (C) an agency decision made after reconsideration. . . .’’ See also General Statutes § 16- 9 (‘‘[a]ny final decision, order or authorization of the [authority] in a contested case shall constitute a final decision for the purposes of [the UAPA]’’). Because the master agreement proceeding did not involve a con- tested case, a declaratory ruling or an agency decision made after reconsideration, it did not result in a ‘‘final decision’’ for purposes of § 4-176 (a). Accordingly, we conclude that the authority did not have statutory authority to issue a declaratory ruling applying its deci- sion in the master agreement proceeding to the capacity clearing price dispute.
The authority further contends that, because it approved the Kleen Energy master agreement in a con- tested case, the capacity contract proceeding, the deci- sion was a ‘‘final decision’’ for purposes of § 4-176 (a) and, therefore, it had jurisdiction to apply that decision in the proceeding on the petition for a declaratory rul- ing. The authority’s initial decision on the capacity clearing price dispute was issued, however, in the com- bined proceeding, the proceeding in which the authority had opened the master agreement proceeding, which was not a contested case. Presumably, Waterside had requested the authority to open that specific proceeding to resolve the capacity clearing price dispute because the dispute required the authority to interpret and apply the form master agreement, which was the subject of the master agreement proceeding, not to evaluate whether specific capacity resources were qualified to execute the master agreement, which was the subject of the capacity contract proceeding. In turn, the authority’s declaratory ruling related solely to the issues that had been decided in the combined proceeding, and the authority expressly reaffirmed its decision in the *10 combined proceeding in its declaratory ruling. Because the authority did not apply its decision in the capacity contract proceeding to the circumstances of the capac- ity clearing price dispute when it issued its declaratory ruling, we reject this claim.
We next address the defendants’ claim that the authority had jurisdiction to issue a declaratory ruling on the capacity clearing price dispute because it was applying the provisions of a statute within its jurisdic- tion to the circumstances of the dispute. See General Statutes § 4-176 (a) (agency is authorized to issue ‘‘declaratory ruling as to . . . the applicability to speci- fied circumstances of a provision of the general stat- utes’’). Specifically, the Office of Consumer Counsel points out in its brief to this court that, pursuant to § 16-243m (e), the master agreement was required to transfer ‘‘all the rights to the installed capacity . . . locational forward reserve capacity and similar rights’’ from capacity resources to electrical distribution com- panies and, pursuant to § 16-243m (f), ‘‘[e]ach person submitting a proposal pursuant to this section shall agree to forgo or credit reliability must run payments, locational installed capacity payments or payments for similar purposes . . . .’’ In addition, the power com- pany points out in its brief that § 16-243m (i) provides in relevant part that the master agreement must ‘‘(1) result in the lowest reasonable cost of such . . . ser- vices, (2) increase reliability, and (3) minimize federally mandated congestion charges to the state over the life of the contract. . . .’’ The authority did not rely on or even refer to these provisions, however, either in its decision in the combined proceeding or in its declara- tory ruling. Rather, the authority relied exclusively on the plain language of the master agreement’s pricing provision, the form of which was not dictated by § 16-243m. [17]
The defendants further rely on this court’s decision
in
Wheelabrator Lisbon, Inc.
v.
Dept. of Public Utility
Control
, supra,
Minnesota Methane, LLC
v.
Dept. of Public Utility
Control
, supra, Superior Court, Docket No. CV-04-
0527217-S, involved the same issue as
Wheelabrator
Lisbon, Inc.
The trial court in that case concluded
broadly that that the department had jurisdiction under
§ 4-176 to resolve any disputes arising under a contract
that the department had approved in a ‘‘decision . . . .’’
Id. On appeal to this court, however, we affirmed the
judgment of the trial court on the basis of the same
reasoning that we had applied in
Wheelabrator Lisbon,
Inc.
v.
Dept. of Public Utility Control
, supra, 283 Conn.
688–89, namely, that the department had jurisdiction
to issue a declaratory ruling pursuant to § 4-176 because
it was required to construe and apply General Statutes
(Rev. to 2003) § 16-243a and General Statutes (Rev.
to 2003) § 16-245a to resolve the dispute
. Minnesota
Methane, LLC Dept. of Public Utility Control
, 283
Conn. 700, 712,
Finally, the defendants claim that, even if the author-
ity did not have jurisdiction to issue a declaratory ruling
to resolve the capacity clearing price dispute pursuant
to § 4-176, it had jurisdiction to determine whether the
master agreement should be modified to reflect the
original intent of the parties pursuant to § 16-9. See
General Statutes § 16-9 (‘‘authority may, at any time,
for cause shown, upon hearing had after notice to all
parties in interest, rescind, reverse or alter any decision,
order or authorization by it made’’). We cannot con-
clude, however, that § 16-9 was intended to confer juris-
diction on the authority to unilaterally alter a ‘‘decision’’
approving the form of a contract
after
private parties
have agreed to its terms, at least not in the absence of
any express statutory provision mandating the form of
the contract or conferring continuing jurisdiction on
the authority to modify it. Such an interpretation would
potentially allow the authority to impair vested contrac-
tual rights and, accordingly, must be rejected as consti-
tutionally suspect. See U.S. Const., art. I, § 10 (‘‘[n]o
State shall . . . pass any . . . Law impairing the Obli-
gation of Contracts’’);
Columbia Air Services, Inc.
v.
Dept. of Transportation
,
Indeed, in an attachment to its decision in the master
agreement proceeding approving the form of the master
*13
agreement, the authority stated that, ‘‘in response to
bidder calls for having an objective third party serve
as an arbiter of these
commercial,
[
nonregulated con-
tracts
], [the authority] has removed itself as much as
possible from serving .
.
.
in a dispute resolution
role.’’ (Emphasis added.) Although the term nonregu-
lated is not defined, it is reasonable to conclude that
the authority was acknowledging that, after it approved
the form of the master agreement and specific parties
executed specific master agreements, the authority
would no longer have any regulatory authority to set
the terms of the master agreement. Cf.
Freehold
Cogeneration Associates, L.P.
v.
Board of Regulatory
Commissioners
,
In addition, the defendants again rely on this court’s
decision in
Wheelabrator Lisbon, Inc. Dept. of Public
Utility Control
, supra,
Because we have concluded that the authority lacked jurisdiction to issue a declaratory ruling to resolve the capacity clearing price dispute pursuant to § 4-176 or to resolve the dispute pursuant to § 16-9, there is no need to address the plaintiff’s other claims on appeal. Even if we were to assume that the plaintiff’s conduct would have constituted a waiver of its right to arbitrate the capacity clearing price dispute if the authority had had jurisdiction to resolve the dispute, the plaintiff’s conduct could not confer jurisdiction on the authority that it otherwise would lack. Thus, the plaintiff’s claims that the trial court improperly remanded the case to the authority to resolve the waiver issue and that the authority improperly determined that the plaintiff had waived its right to arbitration are moot. [25] Finally, because our decision effectively nullifies the authority’s decision in the combined proceeding and its declaratory ruling, we need not address the question of whether those rulings violated the plaintiff’s constitutional right to due process.
The judgment is reversed and the case is remanded to the trial court with direction to render judgment sustaining the plaintiff’s appeal from the authority’s declaratory ruling; the judgment dismissing the plain- tiff’s appeal from the authority’s order on remand is affirmed.
In this opinion the other justices concurred. [1] The Commissioner of Energy and Environmental Protection oversees the Department of Energy and Environmental Protection, which was estab- lished by the legislature while the administrative proceedings that culmi- nated in this appeal were pending. The Department of Energy and Environmental Protection was the successor agency to the Department of Environmental Protection and the Department of Public Utility Control. See Public Acts 2011, No. 11-80, § 1 (a). The legislature also designated the authority as the replacement for the Department of Public Utility Control, effective July 1, 2011. Public Act 11-80, § 1 (e). Although § 16-243m has been amended by the legislature several times since the events underlying the present case; see, e.g., Public Acts 2014, No. 14-94, § 48; those amendments have no bearing on the merits of this appeal. In the interest of simplicity, we refer to the current revision of the statute. Court, and we transferred the appeal to this court pursuant to General The plaintiff appealed from the judgment of the trial court to the Appellate Statutes § 51-199 (c) and Practice Book § 65-1. General Statutes § 16-1 (a) (35) defines ‘‘ ‘[f]ederally mandated conges- tion charges’ ’’ as ‘‘any cost approved by the Federal Energy Regulatory Commission as part of New England Standard Market Design including, but not limited to, locational marginal pricing, locational installed capacity payments, any cost approved by the Public Utilities Regulatory Authority to reduce federally mandated congestion charges in accordance with section *15 . . . 16-245m . . . .’’ Although § 16-1 (a) has been amended by the legislature since the events
underlying the present case; see, e.g., Public Acts 2014, No. 14-134, § 1; those
amendments have no bearing on the merits of this appeal. For convenience,
we refer to the current revision of the statute.
[5]
General Statutes § 4-166 (4) defines ‘‘ ‘[c]ontested case’ ’’ as ‘‘a proceed-
ing, including but not restricted to rate-making, price fixing and licensing,
in which the legal rights, duties or privileges of a party are required by state
statute or regulation to be determined by an agency after an opportunity
for hearing or in which a hearing is in fact held, but does not include
proceedings on a petition for a declaratory ruling under section 4-176, hear-
ings referred to in section 4-168 or hearings conducted by the Department
of Correction or the Board of Pardons and Paroles . . . .’’
Section 12.10 of the master agreement provides in relevant part that
‘‘[e]xcept as otherwise expressly set forth herein, for any and all disputed
issues, the [p]arties shall refer to this [§] 12.10 . . . .’’ Under § 12.10 (a) of
the master agreement, the first step of dispute resolution is negotiation
between the executives of the respective parties to the agreement. Section
12.10 (a) also requires the parties to give notice to the authority of ‘‘any
dispute not resolved in the normal course of business . . . .’’ If these negoti-
ations are unsuccessful, § 12.10 (b) requires the parties to enter into media-
tion. If this step is also unsuccessful, § 12.10 (c) requires the parties to
submit the dispute to binding arbitration.
Although a full understanding of its operation is not required for purposes
The contract for differences is a highly complex financial arrangement.
of this opinion, we offer the following brief summary. ISO New England,
Inc. (ISO New England), is an ‘‘independent, not-for-profit corporation
responsible for keeping electricity flowing across the six New England states
and ensuring that the region has reliable, competitively priced wholesale
electricity today and into the future.’’ ISO New England, Inc., ‘‘About Us,’’
available at http://www.iso-ne.com/about (last visited October 9, 2015). To
further its mission, ISO New England operates a forward capacity market
and conducts annual forward capacity auctions in which capacity resources
compete ‘‘to obtain a commitment to supply capacity in exchange for a
market-priced capacity payment.’’ ISO New England, Inc., ‘‘Forward Capac-
ity Market,’’ available at http://www.iso-ne.com/markets-operations/
markets/forward-capacity-market (last visited October 9, 2015). The author-
ity’s decision approving the Kleen Energy master agreement states that,
under the contract for differences financial arrangement, ‘‘the contract will
have a variable payment structure incorporating the [forward capacity mar-
ket] and [locational forward reserve market] payments already in place.
Bidders will submit a [f]inancial [b]id in [dollar per kilowatt] per annum
terms, referred to as the [a]nnual [c]ontract [p]rice. This price, along with
market clearing prices in the [forward capacity market] and the [locational
forward reserve market] (at the option of the [b]idder), will be used to settle
the monthly payments between the contract counterparties. If the [a]nnual
[c]ontract [p]rice is above the actual market clearing price in the [forward
capacity market] and, if elected, the [locational forward reserve market],
the [b]uyer will true up the [s]upplier, by paying the difference between
the [a]nnual [c]ontract [p]rice and market clearing prices in the [f]orward
[c]apacity [a]uction . . . and the [f]orward [r]eserve [a]uction . . . with
some adjustments, thus ensuring a stable stream of revenue to the [s]upplier.
If the [a]nnual [c]ontract [p]rice is lower than actual market clearing prices,
the [s]upplier will make payments to the [b]uyer, based on the difference
between the [a]nnual [c]ontract [p]rice and the market clearing prices, sub-
ject to certain adjustments.’’
Because the details of this dispute have no bearing on the claims that
we are required to resolve in this appeal, a full understanding of the dispute
is not required. Briefly stated, the dispute concerned what should happen
when the annual forward capacity auction conducted by ISO New England,
Inc. (ISO New England); see footnote 7 of this opinion; clears at the floor
price. In the 2010–2011 auction, the capacity clearing price reached the floor
price of $4.50 per kilowatt with excess capacity still remaining. In other
words, there were more capacity resources supplying bids than ISO New
England wished to accept. Accordingly, pursuant to its rules governing
forward capacity auctions, ISO New England adjusted the floor clearing price
by ‘‘clearing’’ all available capacity and prorating payment to all capacity
resources that had cleared at the price, thereby reducing the actual price
paid to capacity resources to $4.25 per kilowatt. The capacity resources
complained that, ‘‘if the non-prorated [c]apacity [c]learing [p]rice is utilized
*16
to determine the capacity portion of the [m]onthly [p]ayment [a]mount
instead of the [p]ayment [r]ate, there will be a disconnect between a [s]uppli-
er’s actual revenues from [ISO New England] for capacity and the [forward
capacity auction] [m]arket [p]rice. Specifically, the [s]upplier will be credited
with sums that it never received, thereby causing the [s]upplier to pay too
much or receive too little in the contractually mandated true-up process.’’
[9]
Section 12.8 (b) of the master agreement provides in relevant part that,
‘‘[e]xcept to the extent herein provided for, no amendment or modification
to this [a]greement shall be enforceable unless reduced to writing, approved
by the [authority], and executed by both [p]arties.’’
plaintiff’s request to be made a party to the proceeding on Waterside’s
[10]
It is unclear from the record whether the authority ever ruled on the
petition for a declaratory ruling. It appears, however, that the authority
consistently treated the plaintiff as a participant in the proceeding.
[11]
References hereinafter to the defendants, collectively, are to the author-
ity, acting on behalf of the defendant, the Commissioner of Energy and
Environmental Protection, and the intervening defendants, the Office of
Consumer Counsel and the power company.
Waterbury Generation intervened as a party plaintiff only in the plaintiff’s
administrative appeal to the trial court from the authority’s declaratory
ruling, but has not participated in this appeal from the judgment of the trial
court and, unless otherwise indicated, all references to the plaintiff in this
opinion are to Kleen Energy Systems, LLC.
Waterside filed a separate appeal from the authority’s declaratory ruling.
The trial court in that appeal concluded that the authority had reasonably
resolved the capacity clearing price dispute and, accordingly, it dismissed
Waterside’s appeal.
authority stating that, pursuant to § 12.10 of the Kleen Energy master
[12]
While the appeal was pending, the plaintiff submitted a letter to the
agreement, it was providing initial notice that it disputed the power com-
pany’s interpretation of the Kleen Energy master agreement with respect
to the capacity clearing price dispute. See footnote 6 of this opinion. In
response, the power company wrote a letter to the plaintiff in which it
stated that no dispute between the parties existed because the authority
had already resolved the capacity clearing price dispute in the proceedings
on Waterside’s request for a declaratory ruling. The power company also
stated that the issue of whether the authority had authority to resolve the
dispute or, instead, it should have been submitted to alternative dispute
resolution was currently pending before the trial court in the plaintiff’s
administrative appeal. Accordingly, the power company asked the plaintiff
to withdraw its request for alternative dispute resolution pending the trial
court’s decision.
General Statutes § 52-409 provides: ‘‘If any action for legal or equitable
relief or other proceeding is brought by any party to a written agreement
to arbitrate, the court in which the action or proceeding is pending, upon
being satisfied that any issue involved in the action or proceeding is referable
to arbitration under the agreement, shall, on motion of any party to the
arbitration agreement, stay the action or proceeding until an arbitration has
been had in compliance with the agreement, provided the person making
application for the stay shall be ready and willing to proceed with the arbi-
tration.’’
for arbitration claiming the neglect or refusal of another to proceed with
General Statutes § 52-410 (a) provides: ‘‘A party to a written agreement
an arbitration thereunder may make application to the superior court for
the judicial district in which one of the parties resides or, in a controversy
concerning land, for the judicial district in which the land is situated or,
when the court is not in session, to any judge thereof, for an order directing
the parties to proceed with the arbitration in compliance with their
agreement. The application shall be by writ of summons and complaint,
served in the manner provided by law.’’
The authority relies on
Albright-Lazzari Freedom of Information
Commission
,
tiff’s initial appeal, the authority concluded that it was not constrained from
modifying the master agreement because it was not a contract ‘‘for the sale
of energy or capacity in which title or property rights to energy or capacity
are transferred to an electric distribution company.’’ Rather, it was a ‘‘finan-
cial [contract] in which [the plaintiff] is obligated to perform by making
itself available to perform as a capacity resource in the ISO New England
[Inc.] [f]orward [c]apacity [m]arket.’’ See footnote 7 of this opinion. Accord-
ingly, the authority concluded, the modification of the master agreement
did not ‘‘fall within [the Federal Energy Regulatory Commission’s] exclusive
wholesale electric energy ratemaking jurisdiction.’’ See
Wheelabrator Lis-
bon, Inc.
v.
Dept. of Public Utility Control
,