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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Chugach Electric Assoc., Inc. v. Regulatory Commission of Alaska (6/21/2002) sp-5585

Chugach Electric Assoc., Inc. v. Regulatory Commission of Alaska (6/21/2002) sp-5585

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878.



            THE SUPREME COURT OF THE STATE OF ALASKA


CHUGACH ELECTRIC                        )
ASSOCIATION., INC.,                     )
                              )    Supreme Court No. S-9692
             Appellant,                 )
                              )    Superior Court No.
     v.                       )    3AN-98-11584 CI
                              )
REGULATORY COMMISSION OF           )    O P I N I O N
ALASKA and MUNICIPALITY OF    )
ANCHORAGE d/b/a MUNICIPAL          )     [No.  5585  -  June  21,
                                   2002]
LIGHT & POWER,                          )
                              )
             Appellees.                 )
________________________________)


          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Sen K. Tan, Judge.

          Appearances:    Andrew  F.  Behrend,   Heller
          Ehrman  White & McAuliffe, Anchorage; Michael
          C.  Dotten,  Heller Ehrman White & McAuliffe,
          Portland;  and  Donald  W.  Edwards,  Chugach
          Electric    Association,    Anchorage,    for
          Appellant.   Ron  Zobel,  Assistant  Attorney
          General,  Clyde  E. Sniffen,  Jr.,  Assistant
          Attorney  General, Anchorage,  and  Bruce  M.
          Botelho,   Attorney  General,   Juneau,   for
          Appellee  Regulatory  Commission  of  Alaska.
          Paul  J. Jones, Assistant Municipal Attorney,
          and  William  A. Greene, Municipal  Attorney,
          Anchorage,   for  Appellee  Municipality   of
          Anchorage d/b/a Municipal Light & Power.

          Before:     Fabe,  Chief  Justice,  Matthews,
          Eastaugh, Bryner, and Carpeneti, Justices.
          CARPENETI, Justice.

I.   INTRODUCTION

          This  case requires us to determine whether an electric

utility   that  supplies  electric  service  within  a   specific

geographic  area pursuant to a certificate of public  convenience

and  necessity must obtain regulatory commission approval  before

selling  power outside its assigned geographic area.  Because  AS

42.05.221(a)   requires  a  utility  to  obtain   an   additional

certificate  for  each type of utility service  it  provides  and

because  the  appellant  in  this case  did  not  obtain  such  a

certificate, we affirm the decision of the  Regulatory Commission

of Alaska.

II.  FACTS AND PROCEEDINGS

          Chugach  Electric  Association, Inc.  (Chugach)  is  an

electric  utility  that  has received  a  certificate  of  public

convenience  and  necessity  from the  Regulatory  Commission  of

Alaska1  (commission)  to supply electric  service  to  consumers

within a specific geographic area.  Anchorage Municipal Light and

Power  (ML&P)  is  also  a public utility authorized  to  provide

electric  service  to  consumers under a  certificate  of  public

convenience and necessity.

          In   the   fall  of  1997,  Chugach  offered  to   sell

electricity  directly  to  two  commercial  customers  who   were

requesting it from Chugach.  Because these customers were located

in  the  service  area designated for ML&P,  Chugach  offered  to

compensate  ML&P  for  distributing the electricity  as  well  as

metering and related services2 at a rate to be determined by  the

commission.

          ML&P  responded to Chugachs offer by filing a complaint

with  the  commission alleging that Chugach was violating  Alaska

law by attempting to serve customers outside its geographic area.

ML&P  asked  the  commission  to enjoin  Chugach  from  providing

electricity  outside that area.  Chugach, allowed  to  intervene,

maintained  that  although  ML&P  had  a  lawful  monopoly   over

distribution  services3 in the area, it did not have  a  monopoly

over  the  electricity itself as a commodity and therefore  could

          not prevent consumers from purchasing electric power as a

commodity  from  other  suppliers.  Chugach additionally  claimed

that  ML&P  violated federal antitrust law by preventing  Chugach

from  selling electricity over ML&Ps lines.  Chugach  then  asked

the  commission  for a declaratory judgment  that  ML&P  was  not

entitled  to monopolize sales of electric power to customers  who

receive   transmission  and  distribution  services  from   ML&P.

Chugach also asked the commission for a ruling compelling ML&P to

deliver,  under  appropriate  tariffs  to  be  approved  by   the

commission,  Chugachs  electricity to  willing  buyers  in  ML&Ps

distribution area.

          Both   parties   moved  for  summary   judgment.    The

commission held that [t]he Legislatures charge in AS 42.05.221(d)

to  the  Commission to eliminate competition that the  Commission

finds  is  not  in the public interest impliedly  authorizes  the

Commission  to grant monopolies when competition is  not  in  the

public interest.  The commission also held that the provision  of

electric power constituted a service and therefore was subject to

AS  42.05.221(a).  It further held that AS 42.05.221(d) does  not

restrict   the  commissions  authority  to  regulate  competition

between electric facilities to only those areas where duplication

of  facilities  and  competition already  exists.   Finally,  the

commission ruled that federal antitrust principles did not apply,

but  that if they did apply, ML&P would be immune under the state

action  doctrine.   Accordingly, the commission  ruled  in  ML&Ps

favor.

          On appeal, Superior Court Judge Sen K. Tan affirmed the

commissions order and final judgment.  In his decision, Judge Tan

ruled  that  AS  42.05.221(a) requires Chugach  to  obtain  prior

approval  from the commission before selling electricity  outside

of  its  allotted  geographical area.  The  superior  court  also

concluded  that the commissions interpretation of state  law  did

not   implicate   any  federal  antitrust  legal   doctrines   or

principles,  and that the state action immunity doctrine  applied

and was satisfied.

          Chugach now appeals to this court.

III. STANDARD OF REVIEW

          In  an  administrative appeal where the superior  court

acts  as an intermediate appellate court, we directly review  the

agency action in question.4

          Chugach and the commission agree that the issues before

this  court  are  not matters that fall within [the  commissions]

unique  expertise5  as this issue presents  a  matter  of  strict

statutory   construction.6   Because  no  agency   expertise   is

involved, we review the commissions statutory construction  under

an   independent  judgment  standard.7   As  we  substitute   our

judgment,  it is our duty to adopt the rule of law that  is  most

persuasive in light of precedent, reason, and policy. 8

          We  review  the commissions findings of fact for  clear

error  and  reverse only if there is not substantial evidence  to

support  the  findings.9   However, even  under  the  independent

judgment  standard  [we have] noted that the  court  should  give

weight  to what the agency has done, especially where the  agency

interpretation is longstanding.10

IV.  DISCUSSION

     Chugach   Must   First  Obtain  a  Certificate   of   Public
     Convenience  and  Necessity Before Attempting  To  Sell  Its
     Electricity.
     
          Chugach maintains that the commission does not have the

authority  to restrain competition between electric utilities  by

prohibiting  Chugach  from  selling  electricity  without   first

obtaining   a  second  certificate  of  public  convenience   and

necessity  to  serve  power in a particular geographic  location.

Instead,   Chugach  argues,  the  commission   may   only   limit

competition for a commodity such as the sale of electricity  once

it  has  determined the utilities are already competing and  that

such  competition is not in the public interest.11  ML&P and  the

commission  argue that the statutory language is  clear  that  an

additional certificate is needed for each new use and  that  only

          in instances where a certificate has been previously obtained

does AS 42.05.221(d) apply.

          Alaska Statute 42.05.221(a) provides:

          A  public utility may not operate and receive

          compensation  for providing  a  commodity  or

          service  without first having  obtained  from

          the   commission   under   this   chapter   a

          certificate declaring that public convenience

          and  necessity  require or will  require  the

          service.   Where  a  public utility  provides

          more  than  one  type of utility  service,  a

          separate   certificate  of  convenience   and

          necessity  is  required  for  each  type.   A

          certificate  must  describe  the  nature  and

          extent of authority granted in it, including,

          as  appropriate for the services involved,  a

          description of the authorized area and  scope

          of operations of the public utility.

          Alaska Statute 42.05.221(d) provides:

          In  an  area  where the commission determines
          that   two  or  more  public  utilities   are
          competing   to   furnish  identical   utility
          service and that this competition is  not  in
          the  public  interest, the  commission  shall
          take  appropriate  action  to  eliminate  the
          competition  and any undesirable  duplication
          of  facilities.  This appropriate action  may
          include, but is not limited to, ordering  the
          competing utilities to enter into a  contract
          that, among other things, would:
               (1)    delineate   the   service    area
          boundaries   of  each  in  those   areas   of
          competition;
               (2)  eliminate existing duplication  and
          paralleling to the fullest reasonable extent;
               (3)    preclude   future   duplication    and
     paralleling;
               (4)   provide   for  the   exchange   of
          customers and facilities for the purposes  of
          providing  better  public  service   and   of
          eliminating duplication and paralleling; and
               (5)    provide   such   other   mutually

          equitable  arrangements as would  be  in  the

          public interest.

Chugach argues that by not making findings under AS 42.05.221(d),

the  commission  placed a prior restraint on the competition  for

utilities authorized to provide a particular type of service.  It

argues  that the correct interpretation of the two provisions  of

AS 42.05.221 is that a public injury and a finding of competition

must first be made before the commission can restrict competition

between  electric  utilities that already  have  certificates  to

provide electric service to the public.  It claims that any other

interpretation would render AS 42.05.221(d) meaningless.

          1.   Whether Chugach has the right to provide electric service
               within ML&Ps area is not precluded by collateral estoppel.
               
          ML&P argues that the commission has already applied  AS

42.05.221(d) to eliminate competition between Chugach  and  ML&P.

Therefore, it argues that consideration of this issue  is  barred

by the doctrine of collateral estoppel.

          Collateral estoppel bars the relitigation by parties of

an issue when:

          (1) the party against whom the preclusion  is

          employed was a party to or in privity with  a

          party  to  the  first action; (2)  the  issue

          precluded  from relitigation is identical  to

          the  issue  decided in the first action;  (3)

          the  issue was resolved by final judgment  on

          the  merits; and (4) the determination of the

          issue was essential to the final judgment.[12]

          Chugach  and ML&P have long been parties in  litigation

against  each other resulting in an AS 42.05.221(d) determination

establishing  specific geographical areas in which  each  utility

could provide its service.13  In that earlier case, the commission

recognized situations might arise where it would become necessary

for  one  of  the utilities to engage in work within  the  others

service   area.    Thus,   the  commission  established   certain

procedures  to  address this concern, including a waiver  by  the

          incumbent utility or commission approval.

          The  commission also noted that there may be times when

the  utilities  might need to run transmission or intertie  lines

through  the  others service area.  The commission chose  not  to

limit these activities, provided that service is not extended  to

new  customers within that certified service area unless  allowed

under another provision.  We upheld the service areas established

by  the  commission, although we vacated those  portions  of  the

order dealing with the transferring of facilities between the two

parties.14

          After   remand,  Chugach,  ML&P,  and  the   commission

resolved  the issue regarding the transferring of the facilities.

But  the  issue at hand is distinct from the previous litigation.

Here,  instead  of  arguing that it has a  territorial  right  to

proceed, Chugach raises a matter of statutory interpretation.  It

questions  how  AS 42.05.221(a) and (d) should be applied.   ML&P

contends that the commissions prior order precluded Chugach  from

retaining or acquiring customers within ML&Ps area.  But this  is

separate from the issue of whether a determination must  be  made

under  subsection  (a) or under subsection  (d)  before  allowing

Chugach  to  procure customers.  Chugach also distinguishes  this

claim  in  that  the previous order was specific to  distribution

only,  making  no determination about providing the commodity  of

electricity  itself outside of Chugachs service  area.   Finally,

all  of  the  commissions decisions are predicated on the  public

interest.   But the public interest might have changed since  the

commissions  previous  orders.   Because  the  issues  previously

resolved  and  the  one now before the court are  not  identical,

Chugach is not estopped from litigating the present case.

          In short, although Chugach and ML&P have a long history

of  court  battles  and many previous orders  have  been  entered

regarding  their allocated areas, the instant action is  distinct

from   these  cases  and  therefore  not  precluded  by  previous

decisions.

          2.   The  commission may use its general  powers  as  a
               means to limit competition.
               
          The  commission has implied powers.15  An  organization

like the commission is an administrative agency that has whatever

powers  are  expressly  granted  to  it  by  the  legislature  or

conferred upon it by implication as necessarily incident  to  the

exercise of powers expressly granted.16

          Chugach   reads  the  commissions  order  to  say   the

commissions power to limit competition is solely a result of some

general  inference.  Chugach argues that because  the  commission

lacked specific authority, the commission and the superior  court

were  forced to infer that the commission had general  powers  to

control  competition within the framework of AS 42.05.221 instead

of  properly  utilizing AS 42.05.221(d) for this purpose.   This,

however,  is  not what the commission held.  Instead,  it  stated

that  its power to control competition derived from three places:

AS  42.05.141,17  AS 42.05.221(a), and AS 42.05.221(d).   No  one

contests  Chugachs proposition that the statutory  scheme  allows

for  some competition.  Chugach simply fails to acknowledge  that

that  competition results only from the commissions  issuance  of

certificates and can be curtailed only by the commission under AS

42.05.221(d)  after  it makes the requisite findings.   Moreover,

Chugachs  reading of the statute contravenes the well-established

interpretation of AS 42.05.221(a) to require public utilities  to

obtain   approval  from  the  commission  prior  to  offering   a

competitive service in a particular market.18

          3.   The commissions and superior courts interpretation of AS

               42.05.221(a) and (d) does not render subsection (d) meaningless.

          1.   In Alaska, a certificate of public convenience and necessity

does not confer a grant of monopoly power.19  Thus, Chugach claims

that  any  previously  certified  utility  is  allowed  to  begin

competing  for  consumers without additional  advance  notice  or

approval   from   the  commission.   The  only  check   on   this

competition,  according  to Chugach, is  AS  42.05.221(d),  which

allows  competition  to  be  limited only  after  the  commission

          determines that competition between two or more utilities is

taking  place  and  that such competition is not  in  the  public

interest.   Chugach thus asks:  If ML&P does not have a  monopoly

by  virtue of its certificate, how can it deny its customers  the

ability  to  buy  electricity from a competing seller?   Chugachs

argument  is  unpersuasive.  As ML&P correctly notes,  monopolies

exist  not  because [they are] inherent in the  issuance  of  [a]

certificate,  but because the Commission has not  authorized  any

other utility to provide competing services within the area . . .

.

          The  plain  language  of  AS 42.05.221(a)  requires  an

additional   certificate  prior  to  any  utility  providing   an

additional  type of service.20  Chugach presents  no  legislative

history  to  contest this plain meaning, nor does it present  any

case  law  to support its interpretation.21  Chugach argues  that

because  AS  42.05.221(d)  is  the  only  subsection  to  mention

competition,  it is therefore the only part of the  statute  that

regulates competition.  But the commission has other statutes  it

may utilize to limit competition.  Alaska Statute 42.05.221(a) is

one  of  these.   Under AS 42.05.241, a certificate  may  not  be

issued  unless  the commission finds that the applicant  is  fit,

willing, and able to provide the utility services applied for and

that  the services are required for the convenience and necessity

of  the  public.22  The commission can grant the  certificate  in

whole  or  in part and may add conditions that it deems necessary

to  protect  and promote the public interest, including  ordering

the  applicant to serve an area not applied for.  The  commission

may  also deny any applicant for good cause.  Under AS 42.05.271,

these  certificates can be revoked or suspended by the commission

on  complaint or on its own motion after good cause is shown.   A

necessary  consequence of these provisions regarding certificates

is  that  a utility is usually prohibited from providing  service

outside  of the area granted in the certificate until the utility

applies  for a new certificate.  This is not in conflict with  AS

          42.05.221(d).  Alaska Statute 42.05.221(a) allows the commission

to   prevent  utilities  from  duplicating  service   until   the

commission finds it is in the public interest and AS 42.05.221(d)

authorizes  the  commission to eliminate or  limit  any  existing

competition if it is found to be harmful to the public interest.

          The  proper application of AS 42.05.221(a)  in  no  way

conflicts with the application of AS 42.05.221(d).  One situation

involving the proper use of subsection (d) arose when municipally-

owned  utilities came within the purview of AS 42.05.221.   These

utilities  were not previously required to obtain a  certificate.

When  the  municipally-owned utilities came under  this  statute,

both  Chugach  and ML&P were operating within the same  district.

The  commission then utilized AS 42.05.221(d) to separate the two

operations and provide them with distinct territories.23

          Alaska   Statute  42.05.221(a)  requires   a   separate

certificate  where  a  utility provides more  than  one  type  of

service.   Chugachs interpretation of AS 42.05.221  would  render

subsection  (a)  meaningless.   The  commission  would  have   no

authority  to  require a utility to acquire  a  new  or  modified

certificate  before it began to provide services outside  of  its

designated  area as AS 42.05.221(a) does not distinguish  between

services, commodities, uses, or facilities.

          Despite Chugachs claims, the commissions interpretation

of  AS  42.05.221(a)  does  not render  subsection  (d)  of  that

provision meaningless.  In addition, interpreting the statute  as

Chugach suggests would have precisely that effect.

          4.   Chugach incorrectly construes other statutes to show the

               State of Alaskas preference for competition.

          Chugach  argues that other relevant statutes  show  the

State   of   Alaskas  preference  for  competition   over   state

regulation.  Chugach relies on AS 42.05.311, which states that  a

public  utility  having any type of distribution or  transmission

facilities  shall, for a reasonable compensation, permit  another

public  utility  to  use  them when the  public  convenience  and

          necessity require this use and the use will not result in

substantial  injury to the owner, or in substantial detriment  to

the  service  to  the  customers of  the  owners.   According  to

Chugach,  an  electric utility cannot use  the  facilities  of  a

second utility for any purpose other than competition, evidencing

the preference for competitive over anticompetitive conduct.

          Chugach fails to note the conditional language  of  the

statute,  which   warrants  shared  use  only  when  the   public

convenience and necessity require it.  Joint use is not  required

by statute.  Instead, if utilities fail to agree on whether joint

use  is  appropriate, a party may apply to the commission for  an

order mandating it.24  Thus, even if the legislature intended  AS

42.05.311 to engender competition, the commission may do so  only

after it finds that such competition is in fact appropriate.

          5.   There is no distinction between services and commodities
               under Alaskas public utilities law.
               
          In  the  proceedings  before  the  commission  and  the

superior  court,  Chugach attempted to avoid  the  effect  of  AS

42.05.221(a)  by arguing that the sale of electricity  by  itself

was  the  sale  of  a commodity rather than the  provision  of  a

service.25   Chugach  argued that its certificate  establishes  a

description  of the authorized area for services  only,  not  for

commodities.   Chugach  thus  contended  that  the  service  area

description in its certificate applied only to services  and  not

to  the retail sale of the commodity of electricity itself.  Both

the  commission  and Judge Tan correctly rejected  this  argument

based  on  the  broad statutory definition of the  word  service,

which includes commodities.26

V.   CONCLUSION

          A.   The commission correctly held that AS 42.05.221(a) required
Chugach to obtain an additional certificate of public convenience
and  necessity  prior  to  engaging  in  contact  with  consumers
regarding  electricity  sales outside its  allotted  area.   This
interpretation  of  the statute does not render  AS  42.05.221(d)
meaningless  and is in accordance with other similar  provisions.
Accordingly,  we AFFIRM the decision of the superior  court  that
affirmed the commissions decision.
_______________________________
     1     In  1999  the  name  of  the Alaska  Public  Utilities
Commission was changed to the Regulatory Commission of Alaska  in
accordance with ch. 25,   30(a), SLA 1999.

     2     ML&P  had  already established its  right  to  provide
distribution  service  in the geographic area  involved  in  this
case.   Alaska Pub. Utils. Commn v. Chugach Elec. Assn, 580  P.2d
687  (Alaska  1978), revd on other grounds by City &  Borough  of
Juneau  v. Thibodeau, 595 P.2d 626 (Alaska 1979).  Thus,  Chugach
in  this case sought to provide only the commodity of electricity
over   ML&Ps  lines  to  customers  requesting  electricity  from
Chugach.

     3      [D]istribution services . . .  refers to delivery  or
distribution  unbundled from the sale of the commodity   in  this
case  the  sale of electric power.  Harvey L. Reiter, Competition
Between  Public and Private Distributors In a Restructured  Power
Industry,  19  Energy  L.J., 333, 334 n.3 (1998).   Chugach  thus
attempted to engage in retail wheeling with ML&P,  the process by
which  utilities  deliver electric power sold by  a  third  party
directly  to  retail  customers  allowing  an  individual  retail
customer  to  choose his or her electricity supplier,  but  still
receive  delivery  using the power lines of  the  local  utility.
Scott  B.  Finlinson, The Pains Of Extinction: Stranded Costs  In
The Deregulation Of The Utah Electric Industry, 1998 Utah L. Rev.
173, 187 n.109.

     4     See  N.  Alaska Envtl. Ctr. v. State, Dept of  Natural
Res., 2 P.3d 629, 633 (Alaska 2000).

     5     Tlingit-Haida Regl Elec. Auth. v. State, 15 P.3d  754,
761 (Alaska 2001).

     6    Natl Bank of Alaska v. State, Dept of Revenue, 642 P.2d
811, 815 (Alaska 1982).

     7    Id.

     8     Cook  Inlet Pipe Line Co. v. Alaska Pub. Utils. Commn,
836  P.2d  343, 348 (Alaska 1992) (citing Guin v.  Ha,  581  P.2d
1281, 1284 n.6 (Alaska 1979)).

     9    Tlingit-Haida Regl Elec. Auth., 15 P.3d at 761.

     10     Natl  Bank of Alaska, 642 P.2d at 815 (citing  State,
Dept of Revenue v. Debenham Elec. Supply Co., 612 P.2d 1001, 1003
n.6 (Alaska 1980)).

     11    AS 42.05.221(d).

     12    Alaska Contracting & Consulting, Inc. v. State, Dept of
Labor,  8  P.3d  340,  344-45 (Alaska 2000) (quoting  Renwick  v.
State, Bd. of Marine Pilots, 971 P.2d 631, 634 (Alaska 1999)).

     13     Alaska  Pub. Utils. Commn v. Chugach Elec. Assn,  580
P.2d  687 (Alaska 1978), revd on other grounds by City &  Borough
of Juneau v. Thibodeau, 595 P.2d 626 (Alaska 1979).

     14    Id. at 696.

     15    Alaska Pub. Utils. Commn v. Municipality of Anchorage,
902  P.2d 783, 788 (Alaska 1995) (citing Far N. Sanitation,  Inc.
v. Alaska Pub. Utils. Commn, 825 P.2d 867 (Alaska 1992)).

     16     Id.  (quoting Glacier State Tel. Co. v.  Alaska  Pub.
Utils. Commn, 724 P.2d 1187, 1190 (Alaska 1986)).

     17    AS 42.05.141 provides in part:

               (a)  The Regulatory Commission of Alaska
          may  do  all  things necessary or  proper  to
          carry  out  the  purposes  and  exercise  the
          powers   expressly  granted   or   reasonably
          implied in this chapter . . . .
          
     18    Chugach suggests that federal antitrust law provides an
overlay to state law that bars the commission from exercising its
general  powers and precludes its longstanding interpretation  of
AS  42.05.221.   But we disagree.  In the Sherman Act,  Congress,
exercising the full extent of its constitutional power, sought to
establish  a  regime of competition as the fundamental  principle
governing  commerce  in  this  country.   City  of  Lafayette  v.
Louisiana  Power & Light Co., 435 U.S. 389, 398 (1978)  (internal
citations omitted).

          In  California  Retail Liquor Dealers  Assn  v.  Midcal
Aluminum,  Inc.,  445 U.S. 97, 105 (1980), the  Court  found  two
standards for antitrust immunity stemming from the Courts earlier
decision  in  Parker v. Brown, 317 U.S. 341 (1943):   First,  the
challenged   restraint  must  be  one  clearly  articulated   and
affirmatively expressed as state policy; [and] second, the policy
must  be  actively supervised by the State itself.   Id.  at  105
(internal quotation marks and citations omitted).  Alaskas policy
of  anticompetitive conduct for utilities that have a certificate
of  public  convenience and necessity is not only  permitted  but
compelled.  AS 45.50.572(d) immunizes public utilities that  have
been  issued  a  certificate of public convenience and  necessity
from  state antitrust law.  AS 42.05.221(a) requires certificates
of   public  convenience  before  a  utility  can  operate.    AS
42.05.221(d)  then  allows  the commission  to  take  appropriate
action to control competition if it finds that competition not in
the   public  interest.   These  statutes,  read  separately   or
together, evidence a stronger case for meeting the first prong of
Midcal  than was seen in S. Motor Carriers Rate Conference,  Inc.
v.  United  States, 471 U.S. 48, 64 (1985).  In  that  case,  the
Court  upheld a practice allowing a rate bureau to submit a joint
rate  proposal  for  rates  on  behalf  of  its  members  to  the
applicable   state   agency  in  each  state  for   consideration
regardless  of  the  fact  none of these states  had  legislation
compelling  collective ratemaking, noting that, [i]f more  detail
than a clear intent to displace competition were required of  the
legislature, States would find it difficult to implement  through
regulatory agencies their anticompetitive policies.  Id.  at  64.
The  purpose  of the agency is to deal with problems outside  the
realm  of  the  legislatures knowledge.  Id.   Thus,  to  require
express authorization for every action that an agency might  find
necessary  to  effectuate state policy  would  diminish,  if  not
destroy, its usefulness.  Id.  Chugach does not argue whether the
State  of Alaskas policy to regulate public utilities is actively
supervised  by  the state in its brief, relying  instead  on  its
arguments regarding the first prong of the Midcal test.   Despite
the  fact  Chugach did not argue against it, it seems  relatively
clear that the issuance of certificates of public convenience  as
well  as other policies relating to public utilities are actively
supervised  by  the state.  Unlike the situation in  Snake  River
Valley  Elec. Assn v. PacifiCorp, 238 F.3d 1189 (9th Cir.  2001),
where  the utility with the distribution facilities had the power
to withhold its consent from other utilities wishing to serve its
customers,  ML&P has no such power.  Therefore, the second  prong
of Midcal is easily met.

     19    Chugach Elec. Assn, Inc. v. City of Anchorage, 426 P.2d
1001, 1003 (Alaska 1967).

     20     We  apply  a  sliding scale approach  in  matters  of
statutory   interpretation,  and  have  rejected   a   mechanical
application of the plain meaning rule.  Moody-Herrera  v.  State,
Dept  of Natural Res., 967 P.2d 79, 84 (Alaska 1998).  Thus,  the
plainer  the language of the statute is, the more convincing  the
evidence contrary to that language must be.  Anchorage Sch. Dist.
v.  Hale, 857 P.2d 1186, 1189 (Alaska 1993).  Basic principles of
statutory construction militate against interpreting a statute in
a    manner    that   renders   other   provisions   meaningless.
Contradictions should be harmonized.  Rollins v. State,  Dept  of
Revenue,  Alcoholic  Beverage Control  Bd.,  991  P.2d  202,  208
(Alaska  1999) (quoting M.R.S. v. State, 897 P.2d 63, 66  (Alaska
1995));  Homer Elec. Assn v. Towsley, 841 P.2d 1042, 1045 (Alaska
1992) (stating [a]s a general rule, a statute should be construed
so  that  effect is given to all its provisions, so that no  part
will  be  inoperative  or  superfluous,  void  or  insignificant.
(internal quotation marks omitted)).

     21     See Homer Elec. Assn, 841 P.2d at 1043-44 (noting the
most  reliable guide to a statutes meaning is the statutes  words
in  conjunction with their common usage. Legislative history  and
context  are  still  considered; however,  they  must  present  a
compelling case that the literal meaning of the language  of  the
statute is not what the legislature intended.).

     22     See,  e.g.,  Alaska Fedn for Cmty.  Self-Reliance  v.
Alaska Pub. Utils. Commn, 879 P.2d 1015, 1020 (Alaska 1994).

     23     Alaska Pub. Utils. Commn v. Chugach Elec. Assn, Inc.,
580 P.2d 687, 696 (Alaska 1978), revd on other grounds by City  &
Borough of Juneau v. Thibodeau, 595 P.2d 626 (Alaska 1979).

     24    AS 42.05.321(a).

     25    Chugach has now apparently abandoned the argument.

     26     AS 42.05.990(6) provides:   service means, unless the
context  indicates  otherwise,  every  commodity,  product,  use,
facility,  convenience, or other form of service that is  offered
for  and  provided  by a public utility for the  convenience  and
necessity of the public.