Plаintiff Massachusetts Municipal Wholesale Electric Company (MMWEC) appeals from a summary judgment order declaring valid its Stony Brook Power Project contracts with defendant Vermont utilities. MMWEC contends that the contracts are void ab initio under
Vermont Department of Public Service v. Massachusetts Municipal Wholesale Electric Co.,
MMWEC is a public corporation and political subdivision of the Commonwealth of Massachusetts that acts as a joint planning and action agency through which suppliers of electricity develop electric power supply programs for municipal utilities. It is governed by a board of nine directors, two appointed by the Governor and seven elected by member municipalities. Only Massachusetts municipalities having electric departments may be members. Vermont electric suppliers that contract with MMWEC are not represented on the Board.
Since 1976, MMWEC has been developing a bulk power supply system by obtaining ownership interests in electric power facilities through planning and acquisition vehicles called “projects.” MMWEC finances a project by issuing long-term revenue bonds, which are secured by payments made by project participants under power sales agreements (PSAs). Project participants are both member and nonmember municipal electric suppliers who contraсt with MMWEC to purchase a share of “project capability,” that is, “the amount of electric capacity and energy, if any, which the Project is capable of producing at any particular time . . „ In exchange, project participants agree to pay monthly pro rata shares of the costs MMWEC incurs in acquiring, constructing, financing and operating the project. MMWEC retains all ownership interest in the project.
Under the terms of the PSAs, MMWEC establishes the amount of monthly payments to provide sufficient revenues to meet its full obligations, and project participants must set electric rates sufficient to pay their shares of MMWEC’s project cоsts, including debt service. The PSAs are subject to MMWEC’s General Bond Resolution, which vests in the MMWEC board of directors sole discretion to issue bonds for each project. The PSAs also restrict the participants’ ability to issue nonproject debt and require project participants to make payments to MMWEC whether or not the project is completed or operating, thus shifting all risks of the project to participants.
One of MMWEC’s projects is the Stony Brook Intermediate Unit, an oil-and-gas-fueled generating facility that MMWEC began building in 1977 in Ludlow, Massachusetts. In October 1977, defendants, the Villages of Ludlow, Hardwick, Morrisville, Stowe and Swanton, and GMP executed PSAs to purchase shares оf project capability of MMWEC’s Stony Brook
project. The facility
The enforceability of MMWEC PSAs was previously adjudicated in MMWEC I. In 1979, MMWEC executed PSAs with five Vermont municipalities and two Vermont electric cooperatives to sell shares of project capability of MMWEC’s ownership interest in two proposed nuclear generating units known as Sea-brook Units Nos. 1 аnd 2. The parties’ rights and obligations under the Stony Brook PSAs are almost identical to those under the Seabrook PSAs. Seabrook was under construction but had not begun producing electricity in October 1985, when the Vermont Department of Public Service filed a complaint against MMWEC in superior court seeking a declaration that the Sea-brook PSAs were invalid. Because the Stony Brook PSAs are virtually identical to the Seabrook PSAs, MMWEC filed this action in July 1986, initially requesting a declaration that the Stony Brook PSAs are valid. The parties stipulated to postponing those proceedings until this Court reached a decision regarding the Seabrook PSAs.
In
MMWEC I,
we held that the Seabrook PSAs were void ab initio because provisions assigning to MMWEC all decision-making power with respect to incurring debt and making expenditures constituted an impermissible delegation of legislative authority by the municipalities and electric cooperatives.
In response to MMWEC I, the Vermont Legislature enacted Act 112, § 1, which purports to ratify certain energy contracts for electric capacity or energy from plants in operation by January 1, 1989. Subsequently, the parties to this action entered into a stipulation under which MMWEC amended its complaint to request a declaration that the Stony Brook PSAs are void on the ground that they are virtually identical to the Seabrook PSAs.
On cross-motions for summary judgment, the trial court held that this case is factually distinguishable from MMWEC I and thus the Stony Brook PSAs are not void ab initio under the reasoning of that case. Further, it held that by enacting Act 112, § 1, the Vermont Legislature had ratified the Stony Brook PSAs. Finally, it concluded that applying Act 112 to the Stony Brook PSAs does not violate MMWEC’s constitutional rights. MMWEC appeals from these trial court rulings.
I.
MMWEC first argues that the court erred in determining that MMWEC I does not control this case because the PSAs at issue here are indistinguishable from the PSAs in MMWEC I. We agree that MMWEC I controls as to the Vermont municipalities. MMWEC I, however, considered the validity of PSAs executed by municipalities and electric cooperatives only. It did not decide whether an investor-owned corporation was acting beyond its power by entering a similar PSA. Thus, we address the validity of the Stony Brook PSA executed by GMP separately.
In
MMWEC I,
we declared the Sеabrook PSAs void because the Vermont municipalities impermissibly attempted to redelegate their legislative authority to incur debt and to make expenditures on other projects or purchases.
Id.
at 86,
Nonetheless, defendant municipalities proffer two bases for distinguishing the Stony Brook Project from the Seabrook Project. First, they argue that Stony Brook involved less risk than Seabrook because it concerned a gas-and-oil-fueled facility rather than a nuclear facility. Defendants maintain that the risk in undertaking a conventional gas-and-oil power plant is minimal. They equate MMWEC’s authority under the Stony Brook PSAs to that of a general contractor, who supervises construction and acquires the materials. Because thе risk was minimal, defendants maintain that the delegation of authority under the Stony Brook PSAs was permissible.
MMWEC disputes defendants’ risk assessment, maintaining that Stony Brook may have been considered more risky at the time the PSAs were executed due to the oil embargoes of the late 1970s. This dispute need not be resolved here, however. As MMWEC contends, an evaluation of the risks of the two projects is irrelevant to our decision because we are not judging the projects; rather, we are determining the validity of the contracts.
Second, defendants emphasize that Stony Brook has been in operation for eleven years and that they have been receiving powеr and making payments throughout this period. Thus, they distinguish the Seabrook Project because neither Seabrook unit had ever been in operation at the time of the decision in MMWEC I. According to defendants, the decision in MMWEC I turned in part on the fact that defendants were required to make monthly payments to MMWEC but had never received any power. They maintain that, in contrast to the Seabrook PSAs, which were for “project capability,” the Stony Brook PSAs became contracts for electric capacity and energy when defendants began receiving power from the Stony Brook Unit.
Defendants’ characterization of the Stony Brook PSAs as contracts for electric capacity and energy, as opposed to project capability, is incorrect. Under the terms of the PSAs, defendants purchased project capability, and if Stony Brook stopped operating today, the PSAs require that defendants continue to make payments to MMWEC. Further, our decision in
MMWEC I
was not influenced by the fact that the Seabrook Units had not produced any power. See
id.
at 90,
Defendant Village of Stowe also argues that when the Stony Brook facility was completed in 1981 and defendants began receiving powеr in return for payments, the PSAs executed in 1977 were “confirmed.” It contends essentially that, because the party that acted ultra vires has received benefits under the contract for eleven years, the contract is somehow ratified. The other municipalities contend that they have ratified the PSAs by continuing to perform pursuant to them for eleven years. Defendants cite no authority to support either contention, nor do we find any. On the contrary, it is generally held that an ultra vires contract cannot be ratified by any action of the corporation that acted outside its authority.
Metropolitan Stock Exch. v. Lyndonville Nat’l Bank,
Defendants also argue that they have not impermissibly re-delegated their authority because they have retained a voice in decisionmaking concerning Stony Brook through their participation in the New England Power Pool (NEPOOL). The Stony Brook unit is subject to central dispatch by NEPOOL. Defendant municipalities may influence NEPOOL as shareholders of the Vermont Electric Power Company (VELCO) because VELCO is a charter member of NEPOOL.
Initially, we note that the same provisions regarding NEPOOL were present in the Seabrook PSAs. Thus, we cannot distinguish this case from
MMWEC I
on the ground that the municipalities retained a voice in decisionmaking through NEPOOL. Moreover, even if defendants can influence MMWEC’s operation of Stony Brook through NEPOOL, this does not affect the PSA restrictions upon defendants’ ability to incur other debts. These restrictions are also impermissible delegations of authority. See
MMWEC
I,
Because the pertinent contractual provisions in the Stony Brooks PSAs are virtually identical to those in the Seabrook PSAs, we find no basis to distinguish the redelegation of legislative power in the Stony Brook PSAs. Therefore, we hold, under MMWEC I, that the Stony Brook PSAs executed by the five Vermont municipalities violate the nondelegation doctrine and would be void had they not been ratified by the Legislature. 1
II.
MMWEC argues that, by its terms, Act 112, § 1 does not validate the Stony Brook PSAs executed by the municipalities. Act 112, § 1 provides in part: “All contracts for the purchase, sale, generation, manufacture, acquisition or transmission of electric car pacity or energy entered into pursuant to chapters 14,79,81,83 or 84 of Title 30... are hereby validated, ratified, and confirmed----” 1989, No. 112, § 1 (emphasis added). MMWEC contends that the Act does not apply to the Stony Brook PSAs becаuse they are contracts to purchase “project capability,” not “electric capacity or energy.” We agree that MMWEC I makes this distinction but nonetheless hold that the legislative history unequivocally shows that the Legislature intended Act 112 to ratify the Stony Brook PSAs.
In
MMWEC
/, the Court distinguished “project capability” from “electric capacity and energy.” “Project capability” is defined in the PSAs as “the amount of electrical capacity and energy, if any, which the Project is capable of producing at any particular time ....” Thus, by contracting to purchase project capability, the utilities agreed to make payments to MMWEC whether or not they received any power in return.
MMWEC
I,
Defendants contend, however, that “[t]he legislative history of [Act] 112 demonstrates the Vermont Legislature’s clear intent to validate the Stony Brook PSAs.” In construing a statute, our primary objective is to give effect to the Legislature’s intent.
Burlington Elec. Dep’t v. Vermont Dep’t of Taxes,
We cannot ignore the substantial, well-documented, legislative history of Act 112, § 1. Act 112, § 1 was introduced with the express purpose of validating contracts put in jeopardy by MMWEC I. Throughout several days of testimony by more than a dozen witnesses, the need to save PSAs similar to Sеa-brook was thoroughly discussed, and the Stony Brook PSAs were specifically named as being among the endangered contracts to be saved. See, e.g., Hearings on H. 270 before House Commerce Committee, Mar. 3, 1989, at 12-19 (testimony of Stephen Walke, General Counsel for Vermont Public Power Supply Authority (VPPSA) and Village of Swanton) (bill’s purpose is to validate contracts that had come into question as result of MMWEC I); id. at 50-51 (testimony of Richard Saudek, former Commissioner of the Department of Public Service) (bill reverses most of MMWEC I, except for specific ruling on Sea- brook PSAs, and validates “all existing agreements”); id. at 56 (using Stony Brook as example of MMWEC contract that should bе saved); see also Hearings on H. 270 before House Commerce Committee, Mar. 16,1989, at 4-5,10-11 (testimony of Jack Collins, chairman of VPPSA and employee of Village of Ludlow Electric Light Department) (explaining problem of power contracts whose validity has been questioned as result of MMWEC I, using Stony Brook PSA as example); Hearings on H. 270 before Senate Finance Committee, Apr. 25,1989, at 31-35 (testimony of Fred Hutchins, Stowe Electric Company) (speaking in support of bill because it would save Stony Brook PSA); id. at 55 (testimony of Richard Saudek) (purpose of bill as amended is “essentially approving contracts that are now producing power, that are now in place and trying to remove any cloud from them”); id. at 81-83 (testimony of Stephen Walke) (assuring committee that MMWEC will continue to honor Stony Brook contract if Legislature ratifies it but that, without legislative ratification, it was “as dead as the Seabrook contract was”). In addition, the Stony Brook PSAs were included on a list, requested by the Senate Finance Committee, of contracts to be ratified. See Hearings on H. 270 before Senate Finance Committee, Apr. 27,1989, at 24-25 (testimony of Stephen Walke) (presenting list of existing PSAs in effect before January 1,1989, that were to be validated by Legislature); see also Attachment A to Affidavit of Shirley Adams, administrative secretary for Legislative Council for Vermont General Assembly (May 26,1992) (copy of list of PSAs to be validated) and id. at 1-2 (authenticating the list).
As the hearings became bogged down with other issues, the legislators became increasingly dependent on experts to explain utility terms of art. But there is no discussion in the legislative record about the difference between contracts for “project capability,” and contracts for “electric capacity or energy.” The Stony Brook PSAs, like the Seabrook PSAs, are written for “project capability” as that term is defined in MMWEC I. We cannot account for why the Legislature, which had both MMWEC I and the Stony Brook PSAs before it, did not recognize the distinction. Perhaps the drafters reasoned that, because Stony Brook, unlike Seabrook, was actually producing energy and had done so since 1981, it was more accurately described as a contract for electric capacity or energy. Certainly, the common meaning of the words, if not the utility term of art, conveys this thought. But whatever the explanation for this anomaly, we cannot use it to defeat the overriding purpose of the legislative act. Throughout the confusing and protracted legislative process, the Legislature’s intent to save the PSAs endangered by MMWEC I, including the Stony Brook PSAs, was unwavering and unmistakable.
In using this approach, we emphasize that we are not relying on a few statements sprinkled throughout hundreds of transcript
III.
MMWEC contends that the Legislature cannot ratify the Stony Brook PSAs because they are void ab initio, see
MMWEC I,
provided it had the power to authorize the making of the contract in the first instance, the legislature of the state has power to legalize or ratify an ultra vires contract entered into by a municipal corporation for a public purpose, and when thus ratified the contract will be valid and binding.
10A E. McQuillin,
supra,
§ 29.109, at 88 (footnote omitted); see, e.g.,
New Haven Water Co.,
MMWEC next contends that, because the Legislature can only validate contracts that it might have originally authorized, it cannot validate the PSAs because it cannot delegate its spending power. The Legislature cannot delegate functions that are ‘“purely and strictly legislative.’”
Village of Waterbury v. Melendy,
MMWEC I
presents no obstacle to legislative delegation of the spending power. Rather, the decision condemns only municipal redelegation of such power without specific legislative authority to do so. See
MMWEC argues that because the declaratory judgment action was filed prior to the passage of Act 112, Act 112 cannot apply in this case. Its argument is based on 1 V.S.A. § 213, which states that acts of the general assembly “shall not affect a suit begun or pending at the time of their passage.”
3
Section 213 is a rule of statutory construction, not a grant of substantive rights or a bar on retrospective application of statutes. As a rule of construction, § 213 does not apply if it contradicts “the manifеst intent of the general assembly.” 1 V.S.A. § 101. Thus, if the Legislature chooses to make legislation retroactive and makes that intent clear, as it specifically has done here, § 213 is not a bar. See
Burlington Fire Fighters’ Ass’n v. City of Burlington,
IV.
Although we hold that the Legislature successfully validated the Stony Brook PSA, constitutional bars may, nevertheless, render Act 112 void. MMWEC argues that validating legislation violates its rights under the Due Process, Contract, and Commerce Clauses of the federal constitution. We disagree.
MMWEC first argues that it has a vested right in the power generated at the Stony Brook facility — that is, the right to sell it to whom it chooses under the terms it desirеs — which cannot be destroyed without due process. The federal Due Process Clause only prohibits retrospective civil legislation if its consequences are particularly “‘harsh and oppressive.’”
United States Trust Co. of New York v. New Jersey,
Here, the Legislature did not act arbitrarily or irrationally by validating the Stony Brook PSAs. Although the agreements were entered into by municipalities acting ultra vires, there is no indication that they were not otherwise properly bargained for. The parties relied on the contracts for eleven years. Power was produced and used as the contracting parties intended. Act 112 is curative legislation, attempting to normalize contractual relationships that had been called into question by MMWEC I. The Legislature did not pick and choose between the PSAs, validating some and not others; it simply validated all аgreements endangered by MMWEC I. Retroactive application of the validating legislation was necessary so that the operation of the PSAs was uninterrupted.
The first inquiry under this test is “whether the state law has, in fact, operated as a substantial impairment of a contractual relationship.”
Id.
at 244. MMWEC cannot cross this threshold. Not every legislative act affecting contractual relationships is an impairment. The Contract Clause has traditionally focused on legislation “designed to repudiate or adjust pre-existing debtor-creditor relationships that obligors were unable to satisfy,”
Keystone Bituminous Coal Ass’n v. DeBenedictis,
Finally, MMWEC argues that Act 112 violates the Commerce Clause because it is a “protectionist measure” designed to benefit Vermonters at the expense of MMWEC’s other customers. Validating the Stony Brook PSAs gives Vermonters no advantage over other MMWEC customers; it simply means that Vermonters will have the same benefits as out-of-staters contracting with MMWEC for Stony Brook power. Act 112 neither discriminates against interstate commerce nor favors instate economic interests over out-of-state ones, directly or indirectly. See
Brown-Forman Distillers Corp. v. New York State Liquor Auth.,
V.
MMWEC contends that GMP’s Stony Brook PSA is also governed by the holding of
MMWEC I
because in that case the Court also recognized limitations on the authority of private corporations to delegate their powers and duties to others. See
MMWEC
I,
MMWEC contends that the VBCA provides no specific grant of authority permitting GMP to delegate GMP’s spending power or to restrict GMP’s future incursion of debt. Consequently, MMWEC maintains, because GMP’s board of directors has unlawfully abdicated its management functions in the PSA, GMP’s PSA is ultra vires and void. We do not decide whether GMP had the authority to enter the PSA because we conclude that HA V.S.A. § 3.04 precludes dеclaring the PSA ultra vires.
Section 3.04(a) provides that, with certain enumerated exceptions, “the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.” This statute was adopted from § 3.04 of the Model Business Corporation Act, and, like the model act, eliminates the doctrine of inherent incapacity, except in actions (1) by a shareholder against the corporation, (2) by the corporation against an incumbent or former director, officer, employee, or agent of
the corporation, or (3) by the attorney general.
4
See Comment to Model Business Corporation Act § 3.04 (1984). Because none of the three exceptions applies here, MMWEC is precluded from asserting GMP’s lack of capacity in this declaratory action. See
Ohio Cent. Credit Union, Inc. v. Wagner,
VI.
Finally, MMWEC asserts the trial court erred by failing to declare that the Stony Brook PSAs do not constitute unauthorized “debt” under 24 V.S.A. § 1822 (municipality must obtain voter approval before exercising bonding power in connection with public utility project). It requests a remand so the trial court can make such a declaration.
The trial court correctly refrained from dеciding the issue. For a court to make a declaratory judgment, it must have before it an actual or justiciable controversy.
Doria v. University of Vermont,
In its amended complaint, MMWEC asked for a declaration that § 1822 had not been violated, asserting that, in MMWEC /, defendants Village of Stowe and State of Vermont had argued that the Seabrook PSAs violated § 1822. In MMWEC I, however, the trial court held that the Seabrook PSAs were not debts under § 1822. That part of the decision was not appealed by any party.
In their answers to MMWEC’s amended complaint, all defendants denied that the Stony Brook PSAs violated § 1822. No party, at any time, took the position that the Stony Brook PSAs were unauthorized debts. MMWEC did not pursue the issue at the summary judgment hearing. On appeal, the Village of Stowe, which was the only party to brief the issue, argues in favor of MMWEC’s position. MMWEC has failed to establish that an actual controversy existed for the trial court to resolve.
Affirmed.
Notes
Defendant municipalities raise a number of defenses to MMWEC’s claim that the PSAs are invalid. Because we hold that the Legislature successfully ratified the PSAs, we do not reach these issues.
MMWEC puts forth a single statement of Sen. Vincent Illuzzi to show that the legislative history “equally supports MMWEC’s position that the Legislature did not intend to ratify the Stony Brook PSA.” This statement, made before the Senate Finance Committee (April 25,1989, at 83), was: “In fairness to MMWEC, though maybe that contract [the Stony Brook PSA] should be opened up. Right? I mean they got screwed on the other one [Seabrook].” The response of other participants, however, undercuts MMWEC’s position:
Sen. Webster: You’re just kidding, right?
Mr. Walke: I hope he’s just kidding. I hope you’re representing Vermont ratepayers and not Massachusetts ratepayers.
Sen. Ready: You never know.
Sen. Illuzzi: Fair is fair.
At that point, the discussion ended and Sen. Illuzzi’s point was not pursued.
MMWEC argues in the alternative that Act 112 is rendered inoperative by 1 V.S.A. § 214(b)(2) and (4), which respectively define the effect of statutory amendments on preexisting rights and pending court proceedings. MMWEC then concedes, however, that Act 112 does not amend or repeal any existing statute, and that therefore § 214 does not apply. We agree and do not reach this issue.
11A V.S.A. § 3.04 went into effect on January 1,1994. It replaces, but retains the essential elements of, its predecessor statute, 11 V.S.A. § 1854. While § 3.04 is based on the 1984 version of the Model Business Corporation Act, § 1854 was based on the 1972 version of the same model act.