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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Matanuska Electric Association, Inc. v. Chugach Electric Association, Inc. (10/08/2004) sp-5838

Matanuska Electric Association, Inc. v. Chugach Electric Association, Inc. (10/08/2004) sp-5838

     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,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

MATANUSKA ELECTRIC                 )
ASSOCIATION, INC.,                      )
                              )       Supreme   Court   No.    S-
10598/10618
           Appellant/Cross-Appellee,    )
                              )    Superior Court No.
     v.                       )    3AN-99-8152 CI
                              )
CHUGACH ELECTRIC                        )
ASSOCIATION, INC.,                      )    O P I N I O N
                              )
            Appellee/Cross-Appellant.    )    [No. 5838 - October
8, 2004]
_______________________________    )

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Peter A. Michalski, Judge.

          Appearances:   Kyle W. Parker  and  David  J.
          Mayberry,  Patton Boggs LLP,  Anchorage,  for
          Appellant/Cross-Appellee.       James      E.
          Torgerson,  Jonathan B. Ealy,  and  Aaron  M.
          Schutt, Heller Ehrman White & McAuliffe  LLP,
          Anchorage,  and  Donald W.  Edwards,  General
          Counsel, Chugach Electric Association,  Inc.,
          Anchorage, for Appellee/Cross-Apellant.

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

          CARPENETI, Justice.

I.   INTRODUCTION

          Matanuska  Electric  Association  (MEA)  sued   Chugach

Electric  Association  (Chugach) for  breach  of  contract.   The

superior court denied Chugachs motion to dismiss, but granted its

motion  for  summary  judgment.  MEA appeals and  Chugach  cross-

appeals.   We  affirm  the courts grant of  summary  judgment  to

Chugach  on MEAs ninth cause of action, but reverse its grant  of

summary  judgment to Chugach on MEAs fifth cause of  action.   We

accordingly reverse and remand on the amount of attorneys fees as

well.

II.  FACTS AND PROCEEDINGS

     A.   Facts

          MEA  and  Chugach  are electric utility  corporations.1

MEA  does  not produce the electricity it sells to its customers;

it  buys electricity from Chugach pursuant to a purchase and sale

agreement  (the Agreement).2  The Agreement became  effective  in

1989 and runs through 2014.

          Section  17 of the Agreement provides that the  parties

must  act  in good faith and in conformance with prudent  utility

practice.  Section 34(o) defines prudent utility practice for the

purposes of the Agreement.  Section 9 governs ratemaking  between

Chugach  and  MEA,  though  Chugachs  rates  must  ultimately  be

approved by the Regulatory Commission of Alaska (the Commission).3

Section  9(d)  of the Agreement requires Chugach  to  submit  any

proposed  rate  changes  to a Joint Committee,  composed  of  two

members  of  the  Chugach  board of  directors  and  one  member,

appointed  by the AEG&T board of directors, who is  a  member  of

both  the AEG&T and MEA boards of directors.  The Agreement calls

for Chugach to submit its proposed rate changes to the Commission

after a Joint Committee review process, during which MEA has  the

right  to  submit  evidence  and  address  the  Joint  Committee.

Section 9(h) of the Agreement provides Chugach with the right  to

bypass the Joint Committee process to develop interim rates.

          In  order to raise capital, Chugach issued two sets  of

bonds  in  1991.  As of December 31, 1998 Chugach had $23,205,000

in  outstanding bonds due in 2002 and $217,705,000 in outstanding

bonds  due in 2022.  These bonds had a blended interest  rate  of

9.04%,  which  Chugach noted was higher than the  interest  rates

that  would  accrue  on debt of the same maturity  originated  in

todays market.  Rather than defease4 or otherwise refinance  this

debt,  Chugach hedged against future rises in interest  rates  by

          entering into a treasury rate lock agreement.5  According to MEA,

Chugachs  failure to refinance required MEA to pay higher  prices

on the electricity it bought from Chugach.

          In  October 1999 the Commission ordered Chugach to file

a  general rate case by June 30, 2000 based on the test year 1999

so  that  it could better evaluate the reasonableness of Chugachs

rates.   Before  this  deadline, MEA twice wrote  to  Chugach  to

remind it that the Agreement required it to submit its rate  case

to  the Joint Committee before filing it with the Commission.  In

March  2000  Chugach responded to these letters with  an  outline

indicating that it would begin the Joint Committee process on May

15,  2000.  MEA rejected this proposal and filed a motion  for  a

preliminary injunction ordering Chugach to submit the  rate  case

to  the  Joint  Committee  eleven  weeks  before  the  Commission

deadline.   The parties settled this dispute in March  2000,  and

Chugach agreed to begin the Joint Committee process no later than

eleven weeks before the Commission deadline.

          In  June  2000 the Commission changed the test year  to

2000 and extended Chugachs filing deadline to June 30, 2001.   In

February  2001 MEA again reminded Chugach of the Joint  Committee

requirement, but Chugach responded by stating that it  would  not

be  able  to  submit the rate case to the Joint Committee  eleven

weeks  before the Commission deadline.  Instead, Chugach proposed

that  it submit the rate case to the Joint Committee at the  same

time  as it submitted the rate case to the Commission, and  noted

that  it  might  seek to establish interim rates outside  of  the

Joint  Committee  process.  MEA rejected this  proposal,  stating

that  Section 9(d) of the Agreement was intended to  provide  MEA

with  an  opportunity to participate in developing the rate  case

before  its  submission  to  the Commission.   In  May  2001  the

Commission  again extended the deadline, to early November  2001.

Finally,  in July 2001 Chugach filed its 2000 rate case with  the

Commission, requesting both interim and permanent rates,  without

submitting the rate case to the Joint Committee process.

     B.   Proceedings

          In  December 1998 MEA filed a complaint against Chugach

with   the   Commission.   MEAs  complaint  requested  that   the

Commission   investigate  whether  Chugach  .  .  .  engaged   in

unreasonable  management practices by refusing to  refinance  its

long-term  bonded  indebtedness.  The Commission  dismissed  MEAs

regulatory  complaint  in June 2000 by declining  to  initiate  a

formal  investigation into the reasonableness  of  Chugachs  debt

management practices.

          While  its  complaint against Chugach  was  before  the

Commission, MEA alleged similar claims in a complaint it filed in

the  superior  court in February 2000.  In part,  this  complaint

alleged (in MEAs fifth cause of action) that Chugachs failure  to

refinance  its  bond  debt violated the good  faith  and  prudent

utility  practice provisions of section 17 of the Agreement,  and

sought damages for the alleged breach.  The superior court denied

Chugachs  motion  to dismiss this claim, but it granted  Chugachs

motion  for  summary judgment, holding that Chugach owed  MEA  no

duty  under  the  Agreement to conduct  its  debt  management  in

accordance  with prudent utility practice.  MEA also  sought  (in

its  ninth  cause  of  action)  a  declaratory  judgment  and  an

injunction  ordering Chugach to comply with Section 9(d)  of  the

Agreement  by  submitting its permanent rate case  to  the  Joint

Committee  before submitting it to the Commission.  The  superior

court granted summary judgment in favor of Chugach on this issue.

Having  separately disposed of MEAs other causes of action,  none

which  are  at  issue  here,  the superior  court  entered  final

judgment  in favor of Chugach.  Chugach then moved for  attorneys

fees,  which  the  superior  court  awarded  in  the  amount   of

$84,557.67.

          MEA  appeals  the  superior  courts  grant  of  summary

judgment  in  favor of Chugach on both claims and  the  award  of

attorneys  fees.  Chugach cross-appeals the denial of its  motion

to  dismiss  MEAs  claim that Chugachs debt management  practices

were unreasonable (the fifth cause of action).

III. STANDARD OF REVIEW

          We  review questions concerning the application of  the

doctrines  of  primary  agency  jurisdiction  and  exhaustion  of

administrative  remedies de novo, as they  present  questions  of

law.6  Whether res judicata or collateral estoppel apply are also

questions of law, and are therefore reviewed de novo as well.7

          We also review a trial courts grant of summary judgment

de  novo,  drawing all reasonable factual inferences in favor  of

the  non-movant,  and  affirming where  the  record  presents  no

genuine  dispute of material fact and the movant is  entitled  to

judgment  as a matter of law.8  We may affirm a grant of  summary

judgment on any basis appearing in the record.9

          If  a trial courts interpretation of a written contract

was  based  exclusively on documentary evidence,  we  review  its

interpretation de novo as a question of law.10  In conducting such

a  review  we  adopt the rule of law that is most  persuasive  in

light of precedent, reason, and policy.11

IV.  DISCUSSION

     A.   Whether Chugachs Debt Management Practices Comply  with

          Prudent Utility Practice Cannot Be Resolved on Summary Judgment.

          1.   The  superior  court properly refused  to  dismiss

               MEAs debt management claim (fifth cause of action)

               based   on   the   doctrines  of  primary   agency

               jurisdiction,   comity,   failure    to    exhaust

               administrative   remedies,   res   judicata,    or

               collateral estoppel.

          Even  though Chugach prevailed on summary judgment,  it

argues  that  the superior court erred by denying its  motion  to

dismiss  MEAs  claim  related to its debt  management  practices.

Chugach  argues that dismissal was appropriate on the grounds  of

primary  agency jurisdiction, comity and abstention,  failure  to

exhaust  administrative  remedies, res judicata,  and  collateral

estoppel.12  Chugachs arguments on these issues are based on  its

          mistaken belief that the Commission dismissed MEAs regulatory

complaint  because it reached the substantive merits of  Chugachs

debt management practices, and found them reasonable.13  But  the

Commission did not reach any such conclusion; it simply exercised

its  discretion  to dismiss MEAs complaint without  reaching  its

merits.   The  Commission  stated  that  it  was  convinced  that

although  there  is  ample room for argument  on  the  merits  of

competing  financial management strategies,  it  is  not  in  the

public interest at this time to devote the resources required  on

the part of the Commission or the competing utilities to initiate

an  investigation.  Because the Commission declined  to  exercise

its  jurisdiction  to  hear this complaint,  the  superior  court

properly declined to dismiss the suit on these grounds.

               a.   The  Commission  waived  its  primary  agency

                    jurisdiction.

          Chugach  argues  that the superior  court  should  have

dismissed  or  stayed  MEAs claim that Chugachs  debt  management

practices  violated  the  Agreements  prudent  utility  practices

requirement because the Commission has primary jurisdiction  over

the claim.  We disagree.

          In    Greater  Anchorage  Area  Borough  v.   City   of

Anchorage,14  we  stated  that the  doctrine  of  primary  agency

jurisdiction  provides  that a court may, in  appropriate  cases,

stay  or  dismiss  pending litigation so as to  enable  a  proper

agency  to initially pass upon an aspect of the case calling  for

administrative expertise.15  This generally occurs [w]hen a  case

raises  questions of fact not within the ordinary  experience  of

courts,  or  if  the case requires the exercise of administrative

discretion.16  This doctrine is based on the need for an  orderly

and reasonable coordination of the work of agencies and courts,17

which is generally best achieved when courts decline to rule on a

subject  peculiarly within the agencys specialized field  without

first  taking  into account what the agency has to offer.18   The

reasonableness  of  Chugachs financial  management  practices  is

          clearly an issue within the Commissions area of expertise.19

          However, as the language of Greater Anchorage suggests,

and   as   numerous  courts  have  stated,  the  primary   agency

jurisdiction  doctrine is one of prudence, and  not  an  absolute

jurisdictional limitation.20  And when an agency has discretion to

deny  proceedings requested by the plaintiff and  elects  not  to

exercise  this  discretion, the court may decline  to  apply  the

doctrine.21

          The  terms  of  the  Agreement itself  provide  further

support  for the non-exclusivity of the Commissions jurisdiction.

Part   9(f)  states:  The  unavailability  of  relief  from   the

Commission  shall  not  act to deprive  the  reviewing  court  of

authority  to  order  any  form of  equitable  remedy  the  court

considers appropriate.

          In  this case, the questions of whether Chugach  failed

to  abide  by  prudent utility practices in its  debt  management

practices, and the amount of damages caused by this failure, were

initially  presented to the Commission.  The Commission  declined

to  resolve these questions.  Accordingly, although the  doctrine

of  primary agency jurisdiction would normally apply  to  a  case

such  as  this  one, we find that the Commission has  waived  its

primary jurisdiction.

               b.   The principle of comity is inapplicable.

          The  Commissions  refusal to exercise its  jurisdiction

over  MEAs  claim  also renders moot Chugachs argument  that  the

superior court erred by not deferring to the Commission under the

principle of comity.22  The doctrine of comity is one of deference

and  respect  among  tribunals of overlapping jurisdiction.23   A

question  of  comity arises when there is tension . .  .  between

courts  and/or agencies having concurrent jurisdiction  over  the

same  matter. 24  In such cases, [t]he doctrine of comity teaches

that one court should defer action on causes properly within  its

jurisdiction  until  the  courts  of  another  sovereignty   with

concurrent powers, and already cognizant of litigation, have  had

          an opportunity to pass upon the matter.25

          While  it might have been proper for the superior court

to  refrain  from adjudicating this claim between the filing  (on

February  8,  2000)  and  dismissal (on June  6,  2000)  of  MEAs

similarly  worded regulatory complaint, the principle  of  comity

was  not implicated, because the Commission subsequently declined

to   exercise  its  jurisdiction.   The  Commission   had   ample

opportunity  to  pass upon the matter, and  declined  to  do  so.

Following  its  dismissal of MEAs complaint,  the  Commission  no

longer  had concurrent jurisdiction with the superior court,  and

the principle of comity was no longer relevant.

               c.   MEA    is   excused   from   exhausting   its

                    administrative remedies.

          Chugach also argues that the superior court should have

dismissed   this  claim  because  MEA  failed  to   exhaust   its

administrative   remedies.   A  party  must   generally   exhaust

administrative remedies before bringing an action challenging  an

agency  decision; this allows the agency to apply  its  expertise

and correct its own errors.26  But this requirement may be excused

where the attempt to exhaust administrative remedies is futile or

severely   impractical.27    We  have   held   the   pursuit   of

administrative  relief to be futile where an administrative  body

refuses  to address a legal claim brought by a petitioner.28   In

this  case,  MEA  brought its claim before the Commission,  which

dismissed   the  claim  without  adjudication.   The   exhaustion

requirement is thus excused in this case.

               d.   Res  judicata  and  collateral  estoppel  are

                    inapplicable.

          Finally,  Chugach  alleges that the  doctrines  of  res

judicata  and  collateral estoppel preclude the  relitigation  of

MEAs claim.  Only where another tribunal has resolved a claim  or

issue  on  its substantive merits will the claim be precluded  by

res judicata29 or the issue by collateral estoppel.30  Because the

Commission  declined  to  exercise  its  discretionary  power  to

          investigate Chugachs debt management practices, and did not

adjudicate  the  merits  of   MEAs  regulatory  complaint,  these

doctrines cannot bar the superior court from hearing this claim.

          2.   The  superior  court  erred  in  granting  summary

               judgment to Chugach on MEAs fifth cause of action.

          After  refusing  to dismiss MEAs debt management  claim

outright, the superior court granted Chugachs motion for  summary

judgment on this issue.  The court found that as a matter of  law

Chugach  owed  MEA  no contractual duty under  the  Agreement  to

manage  its  debt in accordance with prudent utility  practice.31

Because we find as a matter of law that the Agreement did  impose

such a duty, we reverse.

          Our resolution of this issue centers on the meaning and

scope  of several provisions of the Agreement.  Section 17 states

that   [e]ach  party  to  this  Agreement  covenants  and  agrees

to  .  .  .  act and perform in a manner consistent with  Prudent

Utility  Practice.  Section 34(o) later defines  Prudent  Utility

Practice in the following way:

          At  a  particular time any of the  practices,

          methods and acts engaged in or approved by  a

          significant  portion of the electric  utility

          industry  at  such  time,  or  which  in  the

          exercise  of reasonable judgment in light  of

          facts  known  at such time, could  have  been

          expected to accomplish the desired results at

          the  lowest  reasonable cost consistent  with

          good  business practices, reliability, safety

          and  reasonable expedition.  Prudent  Utility

          Practice  is  not required to be the  optimum

          practice,  method or act to the exclusion  of

          all  others,  but rather to be a spectrum  of

          possible  practices, methods  or  acts  which

          could  have  been expected to accomplish  the

          desired result at the lowest reasonable  cost

          consistent   with  reliability,  safety   and

          expedition.

Section    34(o)    further   notes    that    Prudent    Utility

Practice  . . . shall apply not only to functional parts  of  the

parties  generation,  transmission, and distribution  facilities,

but also to appropriate structures, landscaping, painting, signs,

lighting and other facilities.

          In  granting summary judgment to Chugach, the  superior

court focused on the latter portion of Section 34(o), and what it

characterized  as  the extreme difference between  the  class  of

items  mentioned  and  long-term debt management.   The  superior

court also noted that, although the Agreement is over fifty pages

in  length,  and  effective for over twenty years,  it  does  not

mention  long-term debt management.  Accordingly, the court  held

that  both  the  language  of the contract  and  a  common  sense

analysis of the expectations of the parties indicate that,  under

the Agreement, the prudent utility practice standard only applies

to  the  maintenance  and  operation of Chugachs  facilities  and

equipment.   We  believe  that this  standard  also  governs  the

utilitys investment practices.

          The  goal of contract interpretation is to give  effect

to  the  parties reasonable expectations,32 which  we  assess  by

examining  the language of the disputed provisions, the  language

of  other  provisions, relevant extrinsic evidence, and case  law

interpreting  similar  provisions.33  In  reaching  a  reasonable

interpretation of a contract, we attempt to give effect to all of

its  terms, if possible.34   We consider disputed language within

the  context  of  the whole contract and its  purposes,  and  the

circumstances  surrounding  its  formation.35      While  it  was

understandable to focus only on section 34(o), by  doing  so  the

superior  court did not consider several of the Agreements  other

provisions,  and  their implications in light of  the  Agreements

overall purpose.

          The   overarching  language  of  section  17,   stating

          generally that both parties agree to act and perform in a manner

consistent with Prudent Utility Practice, must apply to the  core

aims  of  the  Agreement,  which  include  ensuring  a  fair  and

reasonable  rate  scheme.   Chugach  suggests  that  because  the

Agreement  does  not include any specific price terms,  its  only

purpose  is  to  assure  that MEA receives adequate  supplies  of

power.36  But even though the Agreement does not include specific

prices  or  rates  for  this power, it  does  set  forth  various

substantive  ratemaking principles and ratemaking  procedures  in

section  9.  The prudence standard therefore must also  apply  to

Chugachs  ratemaking scheme, as this is a key  component  of  its

supply of power.

          A  utilitys pricing or rate scheme must inherently take

all  of the utilitys costs into account.  And these costs include

the  costs to the utility of managing its debt.37  It thus stands

to  reason  that  if  the Agreement applies the  prudent  utility

standard  to  Chugachs power supply policies in general,  and  if

these policies include ratemaking principles and procedures, then

the  Agreement  also  applies  the prudent  utility  standard  to

Chugachs debt management practices.

          This  conclusion finds support in the  cases  that  MEA

cites to support its contention that the Prudent Utility Practice

Standard has a long-established and accepted usage in the utility

industry  .  .  .  [that]  plainly includes  application  of  the

standard  to a utilitys financial management decisions.   Chugach

responds that these cases only show that the Commission, as  well

as similar bodies in other states, has jurisdiction to review and

act  to  ensure  that  utilities  exercise  reasonable  financial

management  practices.  Along similar lines, the  superior  court

dismissed  these  cases  as simply stat[ing]  that  a  regulatory

commission  can  force a public utility to manage  its  long-term

debt  in accordance with Prudent Utility Practices.  But we  read

these cases more broadly than Chugach and the lower court.

          In each case, the relevant utility commission sought to

          ensure that the utility would provide service to its customers at

the  fairest rate, and to further this aim, reviewed the utilitys

financial practices.38  Thus the Federal Power Commission stated:

It  is  common  knowledge that when a utility is not  in  a  good

financial  condition, service is inclined to  suffer  and  proper

rate   adjustments  are  resisted.   Accordingly,   directly   or

indirectly,  the  consumer  will be affected.39   The  Commission

further stated that [a] competitive enterprise must seek in every

legitimate  way  to cut its costs and to operate  economically.40

The  Commission subsequently stated that at least since 1956,  it

has  been  clear  that utility managements are under  a  duty  to

refinance  their  debt  in order to take  advantage  of  changing

interest  rates and provide the consumer with the lowest embedded

debt costs.41

          There  can  be  no  doubt that MEA  is  a  customer  or

consumer  of  Chugachs power; even Chugach admits as  much.   And

there  is no reason that the rates that Chugach charges  MEA  for

this  power  should  not be based on the same  considerations  of

fairness and reasonableness that govern utility rates for  retail

customers.  Section 9(e)(4) of the Agreement states both that, in

order  to  give effect to the fairness principles  set  forth  in

Section 9(b), any Power Supply Costs that the Commission (or  the

court)  allows  Chugach to include in rates for  Chugachs  retail

ratepayers  should  also be included in rates  charged  to  [MEA]

under   this   Agreement,   and  that,   to   the   extent   that

reasonableness, prudency, and similar standards  may  by  law  be

invoked  and  applied  to deny recovery of  particular  costs  in

rates,  the applicability of such standards shall not be affected

by this Agreement.  The precedents cited by MEA have even greater

persuasion  power when considered in conjunction with the  entire

Agreements  purpose  and terms.  Chugach should  have  reasonably

expected  that the prudent utility standard would  apply  to  its

debt management.

          Because   we  conclude  that  the  Agreement  impliedly

          required Chugach to manage its long-term debt in accordance with

prudent  utility  practice, and because  it  is  unclear  whether

Chugach  in fact did so, we reverse the grant of summary judgment

and remand this issue to the superior court for further findings.

     B.   The Superior Court Properly Granted Summary Judgment to
          Chugach on MEAs Ninth Cause of Action.
          
          1.   Chugach submitted its permanent rate request to the
               Commission at the same time as its interim rate request; under
               Section 9(h) of the Agreement both rate requests were exempt from
               the Joint Committee process.
               
          MEAs ninth cause of action sought to compel Chugach  to

complete  the  process  for seeking a rate  change  specified  in

section 9(d) of the Agreement before submitting its rate case  to

the  Commission.  MEA contends that the superior court  erred  in

granting  summary  judgment to Chugach on  this  claim.   Section

9(d)(1) of the Agreement mandates that

          [b]efore  Chugach implements  any  change  in
          rates,  charges,  or other tariff  provisions
          applicable to power sold under this Agreement
          (other  than  interim  tariff  changes  under
          Section  9(h) below), the Chugach staff  will
          submit  the  proposed change,  together  with
          such  explanatory materials  as  the  Chugach
          staff has prepared . . . to a Joint Committee
          for review.
          
MEA  contends that Chugach violated section 9(d) by attaching its

2000  permanent  rate  case  to its  interim  rate  42  case  and

submitting  both  to  the  Commission  four  months  before   the

Commissions deadline for filing the permanent rate case,  without

first  submitting it to the Joint Committee.  The superior  court

rejected  this argument and granted summary judgment  to  Chugach

because it found that by attaching the permanent rate case to the

interim case, both were exempted from the Joint Committee process

by  the terms of section 9(h), which excludes interim rate  cases

from review.43

          Chugach contends that interim rate relief was necessary

because it faced a situation where, if certain conditions came to

pass, it could have failed to collect enough under existing rates

to  cover  its  financial obligations.  Chugach argues  that  the

          Commission requires a utility to file its entire rate case with

its interim rate request, because it requires the same supporting

information  for an interim rate request as for a permanent  rate

request.   Chugach argues that this requirement  was  in  harmony

with  the Agreement because Section 9(h) specifically states that

interim  rate requests are subject to such regulatory  restraints

as  may  exist  at  the  time and because  it  had  a  reasonable

expectation that the contract would be interpreted to allow it to

follow  the  industry practice of making both  filings  together.

MEA   responds   that  allowing  Joint  Committee  review   after

submission  to  the  Commission would  completely  frustrate  the

purpose  of section 9(d) because MEA bargained for the  provision

to  ensure that it would have a right to participate before  firm

positions were taken.

          We  are  troubled by Chugachs avoidance  of  the  Joint

Committee  process.   Section  9(d)  of  the  Agreement   clearly

envisions the submission of permanent rate requests to the  Joint

Committee  process prior to their submission to  the  Commission.

Nonetheless,  because  the  permanent  rate  request  was   filed

simultaneously with the interim rate request, the permanent  rate

request  was  entitled  to  exemption from  the  Joint  Committee

process.  Chugach was authorized by law to file both requests  at

the  same time.  Indeed, the rate filing system appears  to  call

for  the  submission  of both rate requests  simultaneously;  the

interim rate request is simply an extension of the permanent rate

request,  as  both requests require identical information.44   In

describing rate (tariff) filings, the Alaska Administrative  Code

provides that [i]f interim approval of a tariff filing is sought,

that  request must also be set out in the tariff advice letter.45

That  Chugach was entitled to file its permanent and interim rate

requests  simultaneously was reinforced  at  the  July  10,  2001

prehearing  conference for Chugachs interim rate  request,  where

Hearing  Examiner  Clark  repeatedly  rejected  the  notion  that

separate  interim and permanent rate filings were  required.   At

          one point he stated that Chugach has the burden of proof on the

legal standards so I think we are looking at one filing, not  two

and  not really establishing two separate schedules to accomplish

the  tasks.   Because  Chugachs permanent  rate  request  was  an

extension  of its interim rate request, Chugach was  entitled  to

file its permanent and interim rate requests simultaneously under

section  9(h), which allows Chugach to bypass the Joint Committee

process  and  use  other  or abbreviated  procedures  to  develop

interim rates.

          2.   MEA did not properly raise the issue of whether Chugach
               acted in good faith in submitting its interim rate request to the
               Commission.
               
          MEA  argues that summary judgment was inappropriate  on

the  section  9(d)  issue because there is  a  genuine  issue  of

material  fact  as  to whether Chugach acted  in  good  faith  in

submitting  its permanent and interim rate requests.  MEA  argues

that there is ample evidence for a trier of fact to conclude that

Chugach  filed  the interim rate request in order  to  avoid  its

obligations under the agreement.  Chugachs response is  that  MEA

failed  to  properly raise this claim before the superior  court.

MEA does not respond to this argument in its reply brief.

          MEAs  Second Amended Complaint did not mention Chugachs

alleged bad faith in submitting its rate requests.  Additionally,

Chugach correctly points out that MEAs briefs before the superior

court  asserted that MEAs Ninth Cause of Action presents  a  pure

issue  of law concerning the proper construction of Section 9(d).

While  MEA  may be correct that it set forth evidence that  might

support a determination that Chugach acted in bad faith, this  is

irrelevant if MEA did not properly raise that claim.  As we  have

previously  held, [m]atters not made issues or tried  before  the

lower court will not be considered on appeal.46  Because MEA fails

to  demonstrate that it properly raised this issue below, we hold

that  the superior court did not err in granting summary judgment

in favor of Chugach on MEAs ninth cause of action.

     C.   We Must Vacate the Superior Courts Award of Attorneys Fees
          to Chugach.
          
          MEA  argues  that the superior court erred in  granting

Chugach  attorneys fees because Chugach failed to timely  request

fees  and failed to timely provide documentary support for  them.

We  do not reach this argument, however, because our reversal  of

summary  judgment on MEAs debt management claim requires that  we

vacate  the  fee  award.47  On remand, after determining  whether

Chugachs  debt management violated prudent utility practice,  the

superior  court  must determine anew whether and to  what  extent

either party is entitled to recover attorneys fees.

V.   CONCLUSION

          We AFFIRM the superior courts grant of summary judgment
to  Chugach on MEAs ninth cause of action, because the  Agreement
did not obligate Chugach to submit its permanent rate request  to
the  Joint  Committee process, and because MEA did  not  properly
raise  its  claim that Chugach combined its two rate requests  in
bad  faith.  But because the Agreements prudent utility  practice
provisions  apply  to  Chugachs  debt  management  practices,  we
REVERSE  the superior courts grant of summary judgment to Chugach
on  MEAs fifth cause of action and REMAND for further proceedings
consistent with this opinion.  We accordingly VACATE the award of
attorneys  fees  to  Chugach and REMAND this  issue  for  further
proceedings consistent with this opinion.
_______________________________
     1     Many  of  the  facts in this decision are  taken  from
Matanuska Elec. Assn, Inc. v. Chugach Elec. Assn, Inc.,  53  P.3d
578 (Alaska 2002) and Matanuska Elec. Assn, Inc. v. Chugach Elec.
Assn, Inc., 58 P.3d 491 (Alaska 2002).

     2      The   Alaska  Electric  Generation  and  Transmission
Cooperative (AEG&T) is also a party to the Agreement, but was not
a party to this case.

     3      The   name   Regulatory  Commission  of  Alaska   was
substituted  for Alaska Public Utilities Commission  in  1999  in
accordance with ch. 25,  30(a), SLA 1999.

     4     Defeasance  is sometimes used by public  utilities  to
refinance  or remove bonded indebtedness.  The utility  purchases
U.S.   Treasury  or  other  government-backed  securities.    The
interest  and principal payments from these securities  are  then
used  to  cover the debt-service requirements of the  outstanding
bonds.  The bond debts are thus removed from the utilitys balance
sheet for accounting and financial reporting purposes.  Depending
on  the method of defeasance used, the utility may also be  freed
from  any  indenture provisions related to the bonds.  See  James
Hempstead, Total Recall, 132 No. 4 Fort. 20, 22 (1994).

          Chugach   argues  that  defeasance  does   not   really
eliminate  bond debt, but only shifts it.  Chugach  also  asserts
that it would have had to borrow funds in larger amounts than its
outstanding  bond  principal  in  order  to  purchase  sufficient
government securities to cover its bond debts, because government
securities are low risk and thus pay low interest rates.  In sum,
Chugach  claims that defeasance did not make financial sense  and
was  the  most  expensive,  least attractive  refinancing  method
available.

     5    A rate-lock is a derivative or hedge agreement based on
interest  rates.   See  Mathew Urbina and  David  J.  Mangefrida,
Regulatory Monitor: Recent IRS (Mis)guidance?, Investment Lawyer,
April 2002, at 18.  In this case, the rate-lock was based on U.S.
Treasury  interest rates.  Chugach wanted to offset the  risk  of
potentially higher interest rates on its bonds.  Under the  rate-
lock  agreement,  if interest rates rose above a  certain  target
rate  as  of  March  17,  2002  Chugachs  hedge  partner  (Lehman
Brothers) would have to make a corresponding payment to  Chugach,
which  would  increase proportionately by the amount  the  actual
rate  exceeded the target rate.  Conversely, if rates fell  below
the  target  rate  on that date, Chugach would  have  to  make  a
corresponding  payment to Lehman.  As with any hedge,  the  point
was  to insure against losses resulting from a rise in the  price
of  the  underlying commodity (the interest rates).  The cost  to
Chugach  of  such  insurance  was the  payment  amount  if  rates
declined on March 17, 2002.

     6     State,  Dept  of Revenue v. Andrade, 23  P.3d  58,  65
(Alaska 2001).

     7    Alaska Contracting & Consulting, Inc. v. Alaska Dept of
Labor, 8 P.3d 340, 344 (Alaska 2000).

     8    Spindle v. Sisters of Providence in Washington, 61 P.3d
431, 436 (Alaska 2002).

     9    Id.

     10    Krossa v. All Alaskan Seafoods, Inc., 37 P.3d 411, 415
(Alaska 2001).

     11    Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).

     12     Chugach also argues that any award of damages to  MEA
would  constitute prohibited retroactive ratemaking.  Because  we
refer  the  issue  of damages to the Commission,  we  decline  to
address this issue.

     13    As noted in Part II.B., supra, before suing Chugach in
state  court  over  whether  Chugachs debt  management  practices
violated  the  Agreements prudent utility practices  requirement,
MEA brought a similar regulatory complaint before the Commission.

     14    504 P.2d 1027 (Alaska 1972) (overruled on other grounds
by  City  & Borough of Juneau v. Thibodeau, 595 P.2d 626  (Alaska
1979)).

     15    Id. at 1032 (emphasis added).

     16     Oil Heat Inst., Inc. v. Alaska Pub. Serv. Corp.,  515
P.2d 1229, 1233 (Alaska 1973).

     17     G  & A Contractors, Inc. v. Alaska Greenhouses, Inc.,
517 P.2d 1379, 1383 (Alaska 1974).

     18    Id.

     19    See AS 42.05.141(a) and AS 42.05.511(a) (Commission may
do  all  things necessary and proper to carry out its  authority,
including investigating reasonableness of rates, regulations, and
practices of public utilities, including investment policies  and
practices).

     20     See, e.g., United Parcel Serv., Inc. v. Chadwicks  of
Boston,  Ltd.,  900  F.  Supp. 557, 563 (D.  Mass.  1995)  ([T]he
doctrine  of  primary jurisdiction does not  involve  a  question
about   jurisdiction  in  an  ordinary,  bright-line  categorical
sense.  . . .  Rather, [it] is a flexible tool for the allocation
of  business  between  court and agency [and]  is  determined  by
prudential, rather than bright-line categorical, legal  grounds.)
(internal citations and quotations omitted).

     21     Mezines,  Basil  J.  et  al.,  5  Administrative  Law
47.03[1] (Matthew Bender, 1992).  See also Owner-Operator  Indep.
Drivers Assn, Inc. v. New Prime, Inc., 192 F.3d 778, 785-86  (8th
Cir.  1999)  (where agency with primary jurisdiction declines  to
provide  guidance or to commence a proceeding that might  obviate
the  need  for  judicial  action,  the  court  can  then  proceed
according to its own light.) (internal quotations omitted).

     22      Chugach  mentions  [t]he  Doctrines  of  Comity  and
Abstention,  but in fact has only briefed the comity  issue.   We
therefore  decline  to  consider whether  any  form  of  judicial
abstention ought to apply to this case.

     23     Yaracs v. Summit Acad., 845 A.2d 203, 208 (Pa. Commw.
Ct. 2004).

     24     Id.  (quoting Pa. State Troopers Assn  v.  Pa.  Labor
Relations Bd., 617 A.2d 1183, 1187 (Pa. Commw. Ct. 1996)).

     25     Id. (quoting Lambert v. Blackwell, 134 F.3d 506,  514
n.18 (3d Cir. 1997)).

     26    Hyning v. Univ. of Alaska, 621 P.2d 1354, 1355 (Alaska
1981).

     27     Sprucewood Inv. Corp. v. Alaska Hous. Fin. Corp.,  33
P.3d 1156, 1164 (Alaska 2001).

     28     State,  Dept of Revenue v. Andrade, 23  P.3d  58,  67
(Alaska 2001).

     29    Plumber v. Univ. of Alaska Anchorage, 936 P.2d 163, 166
(Alaska  1997) (providing that [t]he doctrine of res judicata  as
adopted  in  Alaska  provides that a final judgment  in  a  prior
action bars a subsequent action if the prior judgment was  (1)  a
final  judgment  on  the merits, (2) from a  court  of  competent
jurisdiction, (3) in a dispute between the same parties (or their
privies) about the same cause of action.).

     30    Universal Motors, Inc. v. Neary, 984 P.2d 515, 518 n.11
(Alaska  1999) (providing that collateral estoppel may be invoked
where (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  in  the
first  action  by  a final judgment on the merits;  and  (4)  the
determination of the issue was essential to the final judgment.).

     31     MEA also argues that Chugachs practices violated  the
Agreements express and implied good faith requirements.   Because
we  resolve this issue based on prudent utility practice grounds,
we do not reach this contention.

     32     Stepanov v. Homer Elec. Assn, Inc., 814 P.2d 731, 734
(Alaska 1991).

     33     Mitford  v.  de Lasala, 666 P.2d 1000,  1005  (Alaska
1983).

     34    Id.

     35     Casey v. Semco Energy, Inc., 92 P.3d 379, 383 (Alaska
2004).

     36     MEA  disputes the notion that the Agreements  purpose
pertains only to the supply of electric power, suggesting instead
that  it  governs the relationship generally between the parties.
This contention is dubious, and because we conclude that Chugachs
debt  management  practices  are  implicated  by  the  Agreements
provisions regarding the sale of power, we need not consider it.

     37    See King County Water Dist. No. 75 v. City of Seattle,
577  P.2d 567, 570 (Wash. 1978) (utilitys rates based in part  on
the cost of capital, which includes interest payments on debt and
equity capital).

     38    See the Alaska Public Utilities Commissions decision in
In  re Homer Elec. Assn, Inc., No. U-83-35, 6 A.P.U.C. 59 (Alaska
Pub.  Util.  Commn  Nov. 4, 1983) (abstract only)  (full  opinion
available  by  request from Regulatory Commn of Alaska);   In  re
Pac. Bell, 23 C.P.U.C. 316 (Cal. Pub. Util. Commn Dec. 22, 1986),
in  which  the California Public Utilities Commission  determined
that  a utility should refinance high-cost debt rather than  pass
along unnecessarily high interest costs to customers in the  form
of higher prices.  See also In re Okla. Gas & Elec. Co., 5 F.P.C.
52,  in  which  the  Federal Power Commission denied  in  part  a
utilitys request for an exemption from preferred stock redemption
regulations, 5 F.P.C. at 59, after determining that the  utilitys
plan  to redeem certain stocks and issue new stock would mortgage
the  future for a present temporary benefit to the parent company
and certain stockholders, and that its likely effect on consumers
was not wholesome. Id. at 57-58; In re Mfrs. Light & Heat Co., 44
F.P.C. 314 (1970), in which, examining proposed rate increases by
six   utilities,   the  Federal  Power  Commission   specifically
addressed a decision by the utilitys parent company to repurchase
its outstanding debt at a discount.  Id. at 319-25.

     39    In re Okla. Gas & Elec. Co., 5 F.P.C. at 58.

     40    Id.

     41    Pa. Gas & Water Co., 44 F.P.C. at 323-24.

     42     Interim  rate relief is granted only when a  utilitys
financial  situation clearly is so critical   and  so  precarious
that   rate   relief   cannot   await   the   normal   regulatory
process. . . .  In re RCA Alaska Communications, Inc., 2 A.P.U.C.
173, 185 (Alaska Pub. Util. Commn. Nov. 22, 1977).

     43    Section 9(h) of the Agreement provides:

          Nothing  in  this  Agreement  shall  preclude
          Chugachs   use   of  other   or   abbreviated
          procedures  to  develop  interim  rates   for
          immediate  effectiveness  (subject  to   such
          regulatory  constraints as may exist  at  the
          time).   All  such  interim  rates  shall  be
          subject  to  refunds  if  the  rates  finally
          adopted  and  approved for the period  during
          which  the  interim rates were in effect  are
          lower than the interim rates.
          
     44     3  Alaska Administrative Code (AAC) 48.275(a)  (2000)
provides  that each filing with the commission of a permanent  or
interim  tariff revision that involves a change in rates  to  the
customers  of  a utility or shippers of a pipeline  carrier  must
include identical information.

     45    3 AAC 48.220(a) (2000).

     46    B.B. v. D.D., 18 P.3d 1210, 1214 (Alaska 2001).

     47    See, e.g., Tenala, Ltd. v. Fowler, 993 P.2d 447, 449 &
n.7  (Alaska  1999) (reconsideration of attorneys fees  warranted
after partial reversal and remand).