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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 v. Chugach Electric Association, Inc. (02/16/2007) sp-6100

Matanuska Electric Association v. Chugach Electric Association, Inc. (02/16/2007) sp-6100, 152 P3d 460

     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,


) Supreme Court Nos. S- 12146/12165
Appellant/ )
Cross-Appellee, ) Superior Court No.
) 3AN-99-08152 CI
v. )
) O P I N I O N
) No. 6100 - February 16, 2007
Appellee/ )
Cross-Appellant. )

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

          Appearances:   Kyle  W.  Parker,  Rebecca  S.
          Copeland, and David J. Mayberry, Patton Boggs
          LLP,  Anchorage,  for  Appellant  and  Cross-
          Appellee.  James E. Torgerson, Heller  Ehrman
          LLP,  and  Carol  Johnson,  Chugach  Electric
          Association,  Inc., Anchorage,  for  Appellee
          and Cross-Appellant.

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

          FABE, Justice.

          Matanuska  Electric  Association, Inc.  (MEA)  filed  a
complaint with the superior court alleging that Chugach  Electric
Association, Inc. breached its duties under the parties agreement
to act in good faith and conform to prudent utility practice when
it  entered  into  a rate lock with respect to certain  long-term
debt.   In connection with an assessment of whether Chugach could
amortize  its expenses relating to the rate lock, the  Regulatory
Commission  of Alaska made a determination that Chugachs  actions
with  respect  to the rate lock were reasonable.   Following  the
Commissions decision, Chugach moved for summary judgment on  MEAs
breach  of  contract claim.  The superior court  granted  summary
judgment  under the doctrines of primary agency jurisdiction  and
res  judicata, concluding that the Commission had considered  and
ruled on the issue whether Chugach conformed with prudent utility
practice  under  the agreement.  MEA appeals,  arguing  that  the
primary  agency  jurisdiction  doctrine  and  res  judicata  were
erroneously   applied  because  the  Commission  did   not   have
jurisdiction  to  hear  MEAs breach of contract  claim.   Chugach
cross-appeals, arguing that collateral estoppel should also  have
been  applied to prevent MEA from relitigating the issue  whether
Chugachs  use  of the rate lock conformed to the prudent  utility
practice  standard.   We  affirm the  superior  courts  grant  of
summary judgment to Chugach on collateral estoppel grounds.
          MEA and Chugach are electric utility corporations.   In
1989  they  entered into a modified agreement for  the  sale  and
purchase  of electric power and energy (the Agreement).   Section
17  of  the  Agreement  provides: Each party  to  this  Agreement
covenants  and  agrees to act in good faith under this  Agreement
and the terms cited herein, including the obligation . . . to act
and perform in a manner consistent with Prudent Utility Practice.
          The  facts giving rise to MEAs breach of contract claim
are summarized as follows:
          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  defease  or  otherwise  refinance  this
          debt, Chugach hedged against future rises  in
          interest  rates by entering into  a  treasury
          rate   lock  agreement.   According  to  MEA,
          Chugachs failure to refinance required MEA to
          pay  higher  prices  on  the  electricity  it
          bought from Chugach.[1]
          MEA  filed a complaint against Chugach alleging  breach
of contract, stating:
          By  failing  to  timely address  the  adverse
          financial  consequences associated  with  the
          Series A Bonds, at a time when the Bonds  are
          priced  significantly  above  current  market
          rates, [Chugach] has breached the covenant of
          good faith as well as the covenant to conform
          to  Prudent  Utility Practice  set  forth  in
          Section 17 of the [Agreement].
          This  is the second time MEAs breach of contract  claim
has  come before us.  In Matanuska Electric Assn, Inc. v. Chugach
Electric  Assn, Inc. (MEA 2004),2 we reversed a determination  by
the  superior court that the Agreements prudent utility  practice
provisions  did not apply to Chugachs debt management  practices,
and  remanded to the superior court for consideration of  whether
Chugach breached the prudent utility practice provisions  of  the
contract by entering into the rate lock transaction.
          In  MEA 2004, we also considered whether MEAs breach of
contract  claim should be stayed or dismissed under the  doctrine
of  primary agency jurisdiction.3  On the facts before us in  MEA
2004,  the  Commission  had not yet considered  whether  Chugachs
actions  with  respect  to the rate lock  were  reasonable.4   We
          [T]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.[5]
          We  also  concluded that the doctrines of res  judicata
and   collateral  estoppel  were  not  applicable   because   the
Commission did not adjudicate the merits of MEAs claim.6
          While  MEA 2004 was on appeal, the Commission exercised
its  jurisdiction to assess the impact of the rate lock on  rates
charged  by Chugach, and reached a decision that Chugachs actions
with  respect to the rate lock were reasonable.  The  Commissions
decision, issued on January 31, 2003 (Order 26), is set forth  in
relevant part below:
          The  parties  agreed  that  a  utility  could
          manage its debt with either a bond defeasance
          or  a rate lock agreement.  A bond defeasance
          is   the   purchase   of   a   portfolio   of
          creditworthy  government bonds  in  a  manner
          that allows the cash flow from those bonds to
          fund   the   debt  service  requirements   of
          existing higher interest bonds.  The treasury
          rate  lock  is a financing tool that  Chugach
          used   in   conjunction  with  a   redemption
          strategy  to protect itself against the  cost
          of  interest  rates increasing between  early
          1999,  when they were at historic  lows,  and
          March 2002, when it could first refinance its
          high  interest long-term debt.  The rate lock
          agreement  is a simple contract  under  which
          Chugach traded the possible benefits it might
          capture from lower interest rates in 2002  in
          exchange  for protection against the possible
          expense that it would incur if interest rates
          rose   instead.    The  hedge   against   the
          potential  rise  in  interest  rates  Chugach
          selected  was  a treasury rate lock  contract
          with Lehman Brothers Financial Products.
          In  determining the proper treatment  of  the
          expense  associated with the  rate  lock,  we
          look  at  Chugachs situation at the  time  of
          refinancing.  In 1991, Chugach refinanced its
          long-term  debt  at  9.14  percent  and   was
          actively   looking   for   opportunities   to
          refinance  and  lower its cost  of  long-term
          debt   and  provide  less  restrictive   debt
          covenants.    From  1995  to  2002,   Chugach
          repurchased over $113 million of its original
          $262  million long-term bonds.   During  this
          time,  in  compliance  with  Docket  U-87-35,
          Chugach  was  increasing  its  equity  ratio,
          raising  it from 20 percent in 1992  to  29.2
          percent in 2000.
          During  1998  and 1999, interest  rates  were
          lower than they had been for many years.   In
          order  to  take  advantage  of  these  rates,
          Chugach  explored options to ensure  that  it
          would  be able to take advantage of the lower
          interest  rates  when  the  1991  bonds  were
          callable  in  2002.  During this  same  time,
          relations  between Chugach and its  Wholesale
          Customers   were   very   contentious.    MEA
          proposed  that Chugach enter into  a  classic
          defeasance of its long-term debt.   MEA  then
          went so far as to initiate an acquisition  of
          Chugach for Chugachs failure to defease debt.
          MEA   also   requested  that  we  conduct   a
          management  audit into why  Chugach  did  not
          defease  its  debt.   As  a  result  of  this
          uncertainty,   Standard  and   Poors   placed
          Chugach  on credit watch, potentially leaving
          Chugach  in a less favorable environment  for
          hedging  what  were, at that time,  very  low
          interest   rates.   Working  with   financial
          advisors,  Chugach chose to  enter  into  the
          rate lock.
          We  now  have a divergence of expert  witness
          opinions advocating for and against the  rate
          lock.   MEA argued that Chugach was imprudent
          for  entering into the rate lock and that  it
          should  have  used the defeasance  mechanism.
          Chugach  stated that it studied and  compared
          the   rate   lock  against  other   available
          alternatives,  including defeasance  and  was
          not   taking  action  until  2002.   Chugachs
          decision  to  hedge against  rising  interest
          rates was supported by the assessment done by
          Seagraves  and  Hein and utilizing  the  rate
          lock  provided the most advantageous  hedging
          mechanism.   Chugach opined  that  it  was  a
          prudent  decision to hedge and that the  rate
          lock  was reasonable.  In retrospect,  taking
          no  action  may  have been a  viable  option.
          However,   hedging  against   interest   rate
          movement  up or down must be viewed from  the
          perspective  of the time the transaction  was
          entered   into  rather  than  from   critical
          AEG&T/HEA  and  HEA  and MEA  criticized  the
          strategy and methods that Chugach employed in
          this endeavor.  MEA believes that Chugach has
          imprudently   managed  its  debt   and   that
          entering  into  rate  lock  transactions  was
          unnecessary.   MEA opined that Chugach  acted
          imprudently  in  1991 when it refinanced  its
          RUS  debt and placed nearly all of its  total
          indebtedness  in  two large  fixed-rate  bond
          offerings.  MEA criticized Chugach for  again
          failing  to diversify its debt when the  1991
          bonds became callable in March 2002 and  were
          refinanced.  MEA alleged that if Chugach  had
          properly  diversified its debt  in  1991,  or
          subsequently  when the opportunity  presented
          itself,  a  rate  lock would  not  have  been
          The  reasonableness  of  the  rate  lock   is
          contingent  on  whether Chugach  should  have
          been  concerned  that the low interest  rates
          available  in  1998 and 1999  were  going  to
          remain  at  those levels or  would  rise  and
          Chugach  would  lose a significant  advantage
          for  refinancing the 1991 bonds.  We find  it
          was  reasonable for Chugach to  be  concerned
          about the stability of the low interest rates
          available  in  1999.  Chugach  was  aware  of
          forecasts that interest rates would  rise  by
          the  2002  window  for refinancing  the  1991
          bonds.   The  risk of rising  interest  rates
          warranted a conservative approach and the use
          of a hedging mechanism that would protect its
          ability to refinance.  Chugach did not  reach
          this  conclusion in isolation.  Goldman Sachs
          worked  with  them to find an  approach  that
          took advantage of the low interest rates  and
          determined    the   best   time    to    act.
          Subsequently,  Chugach retained  Seagraves  &
          Hein   as  advisors  who  assisted  them   in
          selecting from various options.  We are  also
          reassured that the Chugach Board of Directors
          was   actively  involved  in  this  decision,
          including  having  an independent  consultant
          advise them.
          We  are persuaded by Chugachs assertion  that
          there  are few perfect hedges against  rising
          or falling interest rates.  The purpose of  a
          hedge  is  to reduce risk, which was Chugachs
          stated  intent.   The rate lock  executed  by
          Chugach accomplished the hedge by requiring a
          payment  from  Lehman Brothers  if  borrowing
          rates rose between the executions of the rate
          lock  in  March 1999 and February  2002  when
          Chugach could refinance their 1991 bonds.  If
          interest rates declined after March 1999, the
          amount  of money Chugach would need to borrow
          in  2002  to refinance would be increased  to
          include  the amount of the settlement payment
          with  the higher principal payments resulting
          from  the increase in total principal  offset
          by the lower interest payments.
          We  reject the additional argument  that  the
          costs associated with the rate lock should be
          disallowed  because the refinancing  occurred
          outside  the  test  period.   Synchronization
          issues  are  addressed in a later portion  of
          this order.
          We   allow  Chugach  to  recover  rate   lock
          expenses   by   amortizing  these   expenses,
          $5,713,060  over the life of  the  refinanced
          The Commission also stated:

          MEA  requested that we initiate a  management
          audit   to   investigate  Chugachs  financial
          management . . . .  We reject MEAs  proposal.
          We   find   no   evidence  that  Chugach   is
          mismanaged      and     warrants      further
          investigation.  Chugach has operated  without
          significant   base   rate  modification   for
          approximately  15  years.  During  that  same
          period, Chugachs bond rating was upgraded.
          On  remand  from  MEA 2004, Chugach moved  for  summary
judgment  based on the Commissions 2003 decision.  On August  22,
2005,  Superior  Court Judge Peter A. Michalski  granted  summary
judgment  in favor of Chugach based on the doctrines  of  primary
agency  jurisdiction  and  res  judicata.   The  superior   court
reasoned  that  since  the Commission had exercised  its  primary
jurisdiction  and  determined that the rate was  reasonable,  the
Commissions findings would preclude a contrary determination that
Chugachs  use of the rate lock violated prudent utility practice.
The  superior  court also recognize[d] that the Commissions  rate
decision  of  January 31, 2005 adjudicated  the  merits  of  MEAs
complaint  regarding the debt lock and Chugachs  debt  management
          MEA  appeals.  Chugach cross-appeals, arguing that  the
Commissions  decision  also  prevents  MEA  from  litigating  its
mismanagement claim under the doctrine of collateral estoppel.
     A.   Standard of Review
          We  review questions concerning the application of  the
doctrine of primary agency jurisdiction de novo, as they  present
questions  of law.7  Whether res judicata or collateral  estoppel
apply  are questions of law, and are therefore reviewed de novo.8
We  also  review a superior 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.9
     B.   MEAs  Financial Mismanagement Breach of Contract  Claim
          Was Not Barred by Res Judicata.
          Under the doctrine of res judicata, 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.10  The superior  court
granted summary judgment to Chugach in part based on the doctrine
of  res  judicata when concluding that the Commissions 2005  rate
decision  addressed the merits of MEAs complaints about the  debt
lock  and  Chugachs  debt management.  MEA appeals  the  superior
courts  ruling,  arguing that the Commission could  neither  hear
MEAs  breach  of  contract claim nor award MEA  the  compensatory
damages  it  seeks.  Therefore, MEA maintains the Commission  was
not  a court of competent jurisdiction to hear the contract claim
and the application of res judicata was erroneous.
          According to the Restatement (Second) of Judgments, res
judicata  does  not  apply  to  extinguish  the  claim  when  the
plaintiff is unable to annex all of its claims of relief or  seek
all  desired  remedies  before  the  first  tribunal.11   Section
26(1)(c) of the Restatement excepts from the application  of  res
judicata cases where
          [t]he  plaintiff  was unable  to  rely  on  a
          certain  theory  of the case  or  to  seek  a
          certain remedy or form of relief in the first
          action  because  of  the limitations  on  the
          subject matter jurisdiction of the courts  or
          restrictions on their authority to  entertain
          multiple  theories  or demands  for  multiple
          remedies  or  forms  of relief  in  a  single
          action,  and  the plaintiff  desires  in  the
          second  action to rely on that theory  or  to
          seek that remedy or form of relief.[12]
          With  respect to agency determinations, the Restatement
(Second)  of Judgments, section 83(1) provides that a  valid  and
final  adjudicative  determination by an administrative  tribunal
has the same effects under the rules of res judicata, subject  to
the same exceptions and qualifications, as a judgment of a court.
In particular, the Restatement notes that
          [a]n adjudicative determination of a claim by
          an  administrative tribunal does not preclude
          relitigation in another tribunal of the  same
          or   a   related  claim  based  on  the  same
          transaction if the scheme of remedies permits
          assertion of the second claim notwithstanding
          the adjudication of the first claim.[13]
          The   comments  to  section  83  further  explain  that
administrative tribunals often have limited jurisdiction and thus
claim  preclusion should not apply if a plaintiff could not raise
a   specific   claim   or  seek  certain  remedies   before   the
administrative tribunal:
          [T]he jurisdiction of administrative agencies
          is  usually  defined  in terms  of  specified
          substantive  legal provisions,  for  example,
          workers    compensation,   tax   obligations,
          regulation    of   a   specified    business,
          discrimination in employment, etc. Since  the
          tribunals    authority   is   delimited    in
          substantive   legal   terms,   the   tribunal
          ordinarily   lacks  authority  to  adjudicate
          claims  arising  out  of the  transaction  in
          question  but  based upon  other  substantive
          legal premises.  Thus, a workers compensation
          commission   usually   lacks   authority   to
          consider  claims  for  punitive  damages  for
          injuries   intentionally  inflicted   on   an
          employee  in  the  course of  employment;  an
          employment  discrimination  agency  may  lack
          authority to consider claims based on  breach
          of  contract.  These limitations on authority
          of  the  tribunal should carry  corresponding
          limitations  on  the  scope  of   claim   for
          purposes of the rule of claim preclusion.[14]
The comments to section 83 also note that the exception stated in
section  26(1)(c) is particularly important in considering  claim
preclusion    with   respect   to   an   administrative    agency
          As  MEA  argues, the jurisdiction of the Commission  is
limited,  for  while the Commission has the power to investigate,
          upon  complaint  or  upon its own  motion,  the  rates,
classifications,  rules,  regulations, practices,  services,  and
facilities of a public utility and hold hearings on them[,]16 its
ability  to  provide  remedies  is limited  to  setting  rates.17
Moreover,  the  Commission acknowledged the  limitations  of  its
jurisdiction, based on the provisions of the Agreement,  when  it
remarked in Order 26:
          The  contractual commitment . . . has a clear
          dispute  resolution mechanism.  Specifically,
          Section  27(c)  provides  that  a  party   is
          entitled    to   seek   immediate    judicial
          enforcement of this Agreement in the Superior
          Court  for  the State of Alaska.   Thus,  MEA
          presented  its  argument in an  inappropriate
          forum;  MEA  must  seek redress  in  Superior
          Court.   After  approval of  wholesale  power
          contracts,  our jurisdiction becomes  limited
          to issues relating to rates.
          Chugach  argues that our decision in Matanuska Electric
Assn,  Inc. v. Chugach Electric Assn, Inc., (MEA 2002),18  was  a
pronouncement that the Commission has jurisdiction  to  interpret
the  Agreement in all respects.  But our holding in MEA 2002  was
limited  to  resolution of disputes under  section  9(d)  of  the
Agreement, which governs the process Chugach is to follow  before
implementing a rate change.19  This case, by contrast, involves a
challenge  arising under section 17, which addresses  good  faith
and prudent utility practice.  We concluded in MEA 2002:
          Because   9(d)  of  the  [purchase  and  sale
          agreement] expressly deals with issues  lying
          within   the   commissions   core   area   of
          jurisdiction   changes in rates,  charges  or
          other tariff provisions  and because  9(e)(3)
          evinces the parties intent to submit  to  the
          commission any rate-related disputes  arising
          under  the [purchase and sale agreement],  we
          conclude  that interpretation  of   9(d)  was
          within the jurisdiction of the commission.[20]
The  parties  did  not submit any rate-related  disputes  arising
under  section 17 to the jurisdiction of the Commission, and  the
issue  of  good  faith  does  not  appear  to  fall  within   the
Commissions  core  area  of  jurisdiction   changes   in   rates.
Therefore,  MEA  2002 is not binding as to the  question  of  the
Commissions ability to interpret section 17 of the Agreement.
          Here, MEA sought remedies in the superior court for the
alleged breach of contract, including financial mismanagement  on
the  part  of Chugach.  Because the Commission did not  have  the
jurisdiction  to  provide all of the remedies  in  this  contract
dispute except for those relating to rates, res judicata did  not
     C.   Collateral Estoppel Provides an Independent  Basis  for
          Affirming the Judgment.
          We  next  turn to Chugachs cross-appeal of the superior
          courts decision that collateral estoppel did not apply to the
Commissions  decision.   On  cross-appeal,  Chugach  argues  that
Chugachs  2000 Rate Case  which included extensive  discovery,  a
multi-week hearing with direct and cross-examination and  a  long
written decision by a three-commissioner panel  was more than  an
adequate   substitute  for  a  judicial  procedure.    Collateral
estoppel precludes the relitigation of MEAs Mismanagement  Claim.
MEA  argues  that there is no identity of the issues between  the
Commissions  decision  that the costs of the  rate  lock  are  an
allowable  cost and a determination whether Chugach violated  its
contractual  duties to MEA under good faith and  prudent  utility
practices  and that therefore collateral estoppel does not  apply
in this case.
          The  doctrine  of  collateral  estoppel  is  applicable
          (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.[21]
We  have  recognized that [p]rinciples of finality may be applied
to   the   decisions   of  administrative  agencies   if,   after
case-specific  review,  a  court finds  that  the  administrative
decision  resulted  from  a  procedure  that  seems  an  adequate
substitute  for judicial procedure and that it would be  fair  to
accord  preclusive  effect to the administrative  decision.22   A
comparison  of  the  issues  reveals  that  precisely  the   same
questions  that  would  be considered by the  superior  court  in
adjudicating MEAs breach of contract claim were resolved  through
the Commissions Order 26.
          MEA  filed  a  statement of issues with the  Commission
asking  it  to  consider the following with respect  to  Chugachs
financial management:
                 Whether   the  expenses   related   to
          [Chugachs]  acquisition  of  the  speculative
          hedging  instruments known as the  rate  lock
          were prudently and necessarily incurred.
                Whether [Chugach] acted contrary to the
          prudent   utility   practices   standard   by
          consolidating  nearly  all   of   its   total
          indebtedness  in  two large, fixed-rate  bond
                Whether [Chugach] acted contrary to the
          prudent utility practices standard by failing
          to  diversify its debt consistent with  sound
          financial management principles.
                Whether [Chugach] acted contrary to the
          prudent utility practices standard by failing
          to refinance high cost debt to take advantage
          of  changing  interest rates and provide  its
          consumers with the lowest debt costs.
                Whether [Chugach] acted contrary to the
          prudent  utility practices standard  when  it
          purchased   speculative  hedging  instruments
          known as the rate lock.
                Whether [Chugach] violated the  prudent
          utility  practices  standard  by  failing  to
          manage  the  rate lock instruments consistent
          with sound financial management practices.
          MEA  thus  squarely  placed before the  Commission  the
question  whether Chugachs actions were consistent  with  prudent
utility practices.  Chugach also filed a statement of issues with
the Commission on November 5, 2002.  Chugach argued that its debt
management practices with respect to the rate lock were  prudent.
And  the Commission decided the issue of the prudence of Chugachs
actions  in its decision.  The Commission noted Chugachs  use  of
financial   advisors  and  the  Boards  use  of  an   independent
consultant  before entering into the rate lock.   The  Commission
found  it  was reasonable for Chugach to be concerned  about  the
risk of rising interest rates, and this warranted the use of  the
hedging  mechanism.  The Commissions determination that  Chugachs
actions  were reasonable was essential to its decision  to  allow
Chugach  to  recover  rate  lock  expenses  by  amortizing  them.
Because   the  issues  were  vigorously  contested   before   the
Commission,  it  is  fair  to apply the  doctrine  of  collateral
estoppel  to  the question whether Chugach complied with  prudent
utility  practice.23  Therefore, we conclude that  the  grant  of
summary  judgment to Chugach was appropriate based on  collateral
estoppel grounds.24
          We AFFIRM the superior courts grant of summary judgment
to Chugach on collateral estoppel grounds.
     1    Matanuska Elec. Assn, Inc. v. Chugach Elec. Assn, Inc.,
99  P.3d 553, 557 (Alaska 2004) (internal footnotes omitted) (MEA

     2    Id.

     3    Id. at 559-60.

     4    Id. at 558-59.

     5    Id. at 560.

     6    Id. at 561.

     7    Id. at 558.

     8    Id.

     9    Id. (citations omitted).

     10     Id.  at 561 n.29 (quoting Plumber v. Univ. of  Alaska
Anchorage, 936 P.2d 163, 166 (Alaska 1997)).
     11    restatement (second) of judgments  26(1)(c) (1982).

     12    Id.

     13    Id. at  83(3).

     14    Id. at  83 cmt. g.

     15    Id.

     16    AS 42.05.141(a)(2).  The statute provides:

               (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, including:
               (1)    regulate  every  public   utility
          engaged  or proposing to engage in a  utility
          business  inside  the state,  except  to  the
          extent exempted by AS 42.05.711;
               (2)  investigate, upon complaint or upon
          its  own  motion, the rates, classifications,
          rules, regulations, practices, services,  and
          facilities  of  a  public  utility  and  hold
          hearings on them;
               (3)   make  or require just,  fair,  and
          reasonable       rates,      classifications,
          regulations,    practices,   services,    and
          facilities for a public utility;
               (4)   prescribe the system  of  accounts
          and  regulate  the  service  and  safety   of
          operations of a public utility;
               (5)   require a public utility  to  file
          reports and other information and data.
     17     AS 42.05.431(a) clarifies the power of the Commission
to set rates:

          When  the  commission, after an investigation
          and  hearing,  finds that  a  rate  demanded,
          observed, charged, or collected by  a  public
          utility   for  a  service  subject   to   the
          jurisdiction  of the commission,  or  that  a
          classification,  rule, regulation,  practice,
          or  contract affecting the rate,  is  unjust,
          unreasonable,   unduly   discriminatory    or
          preferential, the commission shall  determine
          a  just  and reasonable rate, classification,
          rule, regulation, practice, or contract to be
          observed or allowed and shall establish it by
     18    58 P.3d 491 (Alaska 2002).

     19    Id. at 493-95.

     20    Id. at 494.

     21     MEA  2004,  99  P.3d at 561 n.30  (quoting  Universal
Motors, Inc. v. Neary, 984 P.2d 515, 518 n.11 (Alaska 1999)).

     22     State, Child Support Enforcement Div. v. Bromley, 987
P.2d  183,  192 (Alaska 1999) (internal citations and  quotations

     23    Chugach argued in its summary judgment motion that MEA
could  have appealed the Commissions 2003 decision but  did  not.
An  administrative appeal would have been the correct  method  to
seek  superior  court  review of the  Commissions  decision.   AS
42.05.551.  The record does not reveal why MEA chose not to  file
an  appeal,  and  MEA has not claimed equitable  tolling  in  its
briefing before us.

     24    Because we conclude that collateral estoppel applies to
this case, it is not necessary to reach the question whether  the
superior  court  properly resolved the issue  of  primary  agency

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