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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Regulatory Commission of Alaska v. Matanuska Electric Association, Inc. (2/22/2019) sp-7338

Regulatory Commission of Alaska v. Matanuska Electric Association, Inc. (2/22/2019) sp-7338

        Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  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, email  

                                                                                                  

         corrections@akcourts.us.  



                  THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  



REGULATORY  COMMISSION  OF                          )  

ALASKA,                                             )                               

                                                        Supreme Court Nos. S-15944/15973  

                                                    )   (Consolidated)  

                          Appellant,                )  

                                                    )                                                  

                                                        Superior Court No. 3AN-14-08890 CI  

         v.                                         )  

                                                    )                    

                                                        O P I N I O N  

MATANUSKA  ELECTRIC                                 )  

ASSOCIATION,  INC.;  CHUGACH                        )                                    

                                                        No. 7338 - February 22, 2019  

ELECTRIC  ASSOCIATION,  INC.;                       )  

GOLDEN  VALLEY  ELECTRIC                            )  

ASSOCIATION,  INC.;                                 )  

MUNICIPALITY  OF  ANCHORAGE   )  

d/b/a  MUNICIPAL  LIGHT  &                          )  

POWER;  HOMER  ELECTRIC                             )  

ASSOCIATION,  INC.;  ALASKA                         )  

ENERGY  AUTHORITY;  and  STATE  )  

OF  ALASKA  ATTORNEY                                )  

GENERAL'S  OFFICE,                                  )  

REGULATORY  AFFAIRS  AND                            )  

PUBLIC  ADVOCACY  SECTION,                          )  

                                                    )  

                          Appellees.                )  

                                                    )  

HOMER  ELECTRIC  ASSOCIATION, )  

INC.,                                               )  

                                                    )  

                          Appellant,                )  

                                                    )  

         v.                                         )  

                                                    )  

REGULATORY  COMMISSION  OF                          )  

ALASKA;  CHUGACH  ELECTRIC                          )  


----------------------- Page 2-----------------------

ASSOCIATION, INC.; GOLDEN                                      )
  

VALLEY ELECTRIC                                                )
  

ASSOCIATION, INC.;                                             )
  

MATANUSKA ELECTRIC                                             )
  

ASSOCIATION, INC.;                                             )
  

MUNICIPALITY OF ANCHORAGE                                      )
  

d/b/a MUNICIPAL LIGHT &                                        )
  

POWER; and ALASKA ENERGY                                       )
  

AUTHORITY,                                                     )
  

                                                               )
  

                               Appellees.                      )
  

                                                               )
  



                                                                                                           

                     Appeal from the Superior Court of the State of Alaska, Third  

                                                                                                  

                     Judicial District, Anchorage, Michael D. Corey, Judge.  



                                                                                                      

                     Appearances:   Stuart W. Goering and Megyn A. Greider,  

                                                                                                        

                     Assistant         Attorneys          General,         Anchorage,            and      Jahna  

                                                                                                  

                     Lindemuth,           Attorney          General,        Juneau,         for    Appellant  

                                                                                                  

                     Regulatory Commission of Alaska.  Michael E. Kreger and  

                                                                                                              

                     Sarah  C.  Gillstrom,  Perkins  Coie  LLP,  Anchorage,  for  

                                                                                                                     

                     Appellant  and  Appellee  Homer  Electric  Association,  Inc.  

                                                                                                              

                     Robin  O.  Brena,  Matthew  C.  Clarkson,  and  Kelly  M.  

                                                                                                               

                     Moghadam, Brena, Bell & Clarkson, P.C., Anchorage, for  

                                                                                                      

                     Appellees Matanuska Electric Association, Inc. and Chugach  

                                                                                                         

                     Electric  Association,  Inc.                 John  J.  Burns,  Golden  Valley  

                                                                                                     

                     Electric Association, Inc., Fairbanks, Alaska, for Appellee  

                                                                                                   

                     Golden Valley Electric Association, Inc. Dean D. Thompson  

                                                                                                            

                     and Jonathon D. Green, Kemppel, Huffman and Ellis, P.C.,  

                                                                                                           

                     Anchorage, for Appellee Municipality of Anchorage d/b/a  

                                                                                                             

                     Municipal Light and Power. Notice of nonparticipation filed  

                                                                                                     

                     by  Brian  Bjorkquist,  Senior  Assistant  Attorney  General,  

                                                                                                     

                     Anchorage,  and  Craig  W.  Richards,  Attorney  General,  

                                                                                                               

                     Juneau,  for  Appellee  Alaska  Energy  Authority;  and  by  

                                                                                                 

                     Jeffrey J. Waller, Assistant Attorney General, Anchorage,  

                                                                                                              

                     and  Craig  W.  Richards,  Attorney  General,  Juneau,  for  

                                                                                                       

                     Appellee   State   of   Alaska   Attorney   General's   Office,  

                                                                                       

                     Regulatory Affairs and Public Advocacy Section.  



                                                                  -22--                                                         7338
  

                                                                  - 


----------------------- Page 3-----------------------

                                                                                                                                                                                                                             

                                              Before:  Stowers, Chief Justice, Winfree, Maassen, Bolger,  

                                                                                        

                                              and Carney, Justices.  



                                                                                                                       

                                              MAASSEN, Justice.  



 I.                    INTRODUCTION  



                                              Electricalutilitiesenteredintoagreementsfor thepurchaseandtransmission                                                                                                                                     



 of energy from a hydroelectric project to utilities in distant service areas.                                                                                                                                                                            Legislation  



 exempted the agreements from the review or approval of the Regulatory Commission of  

                                                                                                                                                                                                                                                                                            



 Alaska (RCA); any disputes were to be resolved instead by a contractually established  

                                                                                                                                                                                                                                                             



 committee.    



                                             Along the                         transmission pathway was a substation leased by Homer Electric                                                                                                                            



 Association (HEA) to Chugach Electric Association (Chugach) and used by Chugach                                                                                                                                                                                                         for  



 the transmission of the distant utilities' electricity.                                                                                                                   When the lease expired, HEA filed                                                                        



 tariff applications with the RCA, seeking approval of rates for its own transmission of   



 the other utilities' energy.                                                            The other utilities objected to the RCA's jurisdiction, citing                                                                                                                         



 their agreements and the legislation exempting the agreements from regulatory review.                                                                                                                                                                                                                



                                              The   RCA   determined   that   it   had   the   authority   to   consider   the   tariff  



 applications.   The affected utilities appealed to the superior court, which held that the                                                                                                                                                                                             



 RCA   did   not   have   that   authority.     HEA   and   the   RCA   petitioned   for  our   review,  



 challenging both the superior court's appellate jurisdiction and the merits of its decision                                                                                                                                                                           



 regarding the RCA's authority.                                                                             



                                             We   granted   review.     We   reject   the   challenges   to   the   superior  court's  



jurisdiction.   Furthermore, like the superior court, we conclude that the intent of the                                                                                                                                                                                                



 original agreements and of the governing statute was to exclude disputes like this one                                                                                                                                                                                               



                                                                                                                                             -33--                                                                                                                                 7338
  

                                                                                                                                             - 


----------------------- Page 4-----------------------

from the RCA's jurisdiction.                        We therefore affirm the decision of the superior court                              



reversing the RCA's order.                        



II.        FACTS AND PROCEEDINGS     



           A.         Facts  



                                                                                                           

                       1.        The Bradley Lake Hydroelectric Project  



                                                                                                                                   

                      The        Bradley          Lake        Hydroelectric             Project         (the      Project),          located  



                                                                                                                                          1  

                                                                                                                                              It  

approximately 27 miles northeast of Homer, began commercial operation in 1991. 



                                                                                                                                  

"consists of a 125-foot high concrete-faced, rock-filled dam structure, three diversion  



                                                                                                                                     

structures, a 3.5-mile long power tunnel and vertical shaft, generating plant, interior  



                                                                                                     2  

                                                                                                                                         

substation,  20  miles of transmission  line,  and  substation."                                          The transmission  lines  



                                                                                                                                         

connect the power plant to the switching station at Bradley Junction, where Bradley Lake  



                                                                                                                                          

energy is transferred to transmission lines owned by HEA.  HEA's lines include "the  



                                                                                                                                  

Soldotna Segment," a 46.8-mile segment from Bradley Junction north to the Soldotna  



                                                                                                                    

Substation, owned by HEA and - until 2014 - leased to Chugach.  



                                                                      

                      2.         The HEA/Chugach lease  



                                                                                                                                         

                      Chugach entered into the lease with HEA to "operate and maintain" some  



                                                                                                                                         

of HEA's transmission facilities in September 1985, six years before the Bradley Lake  



                                                                                                                                  

Project  began  commercial  operation.                               The  leased  facilities  included  the  Soldotna  



                                                                                                                                      

Substation and two transmission lines connecting that substation with one near Quartz  



                                                                                                                                        

Creek, owned by Chugach.  The lines from the Soldotna Substation to the Quartz Creek  



                                                                                                                                           

Substation  are  called  the  S/Q  Line;  they  provide  the  only  physical  path  for  the  



                                                                                              

transmission of electricity to utilities other than HEA.  



           1          ALASKA    ENERGY    AUTH.,                      BRADLEY    LAKE    HYDRO    PROJECT    (2018),  



http://www.akenergyauthority.org/Portals/0/programs/factsheets/Documents/PFS-Bra  

dleyHydro.pdf.  



           2          Id.  



                                                                      - 

                                                                      -44--                                                             7338
  


----------------------- Page 5-----------------------

                                                                                The HEA/Chugach lease expired in January 2014, when HEA removed                                                                                                                                                                                                                                                                                                                               



 Chugach's metering equipment at Soldotna Substation and took over operation of the                                                                                                                                                                                                                                                                                                                                                                                                                             



 S/Q Line.   



                                                                                3.                                      The Bradley Lake Agreements                                                                                          



                                                                                Before the Bradley Lake Project was completed, certain Alaska utilities                                                                                                                                                                                                                                                                                                                               



 executed agreements for the sale, purchase, and transmission of Bradley Lake energy.                                                                                                                                                                                                                                                                                                                                                                                                                                                  



 Other than HEA, the utilities were what is known as "railbelt" utilities:                                                                                                                                                                                                                                                                                                                                                                         their service   



 areas lay along the route of the Alaska Railroad from Seward to Fairbanks.                                                                                                                                                                                                                                                                                                                                                                                                 None of   



them owned transmission lines that would provide direct access to Bradley Lake energy.                                                                                                                                                                                                                                                                                                                                                                                                                                                 



                                                                                The primary purpose of the Bradley Lake Agreements, therefore, was the                                                                                                                                                                                                                                                                                                                                                           



 creation of a transmission route for Bradley Lake energy for the utilities that operated to                                                                                                                                                                                                                                                                                                                                                                                                                            



the north.                                                  Pursuant to the agreements, HEA transmitted railbelt utilities' energy from                                                                                                                                                                                                                                                                                                                                                               



Bradley Lake via its Soldotna Segment, at the end of which -at the Soldotna Substation                                                                                                                                                                                                                                                                                                                                                                               



-  Chugach accepted delivery.                                                                                                                                                            It was Chugach's responsibility to transmit the Bradley                                                                                                                                                                                                                                    



Lake energy farther on, first along the S/Q Line to the Quartz Creek Substation and then                                                                                                                                                                                                                                                                                                                                                                                                                  



to more distant delivery points as designated by the other utilities.                                                                                                                                                                                                                                                                                                                                                 The sections that                                                                     



 follow describe the Bradley Lake Agreements in more detail.                                                                                                                                                                                                                                                                           



                                                                                                                        a.                                      The Power Sales Agreement                                                                                  



                                                                                The Agreement for the Sale and Purchase of Electric Power (Power Sales                                                                                                                                                                                                                                                                                                                                              



Agreement) had eight signatories:                                                                                                                                                                            the Alaska Power Authority (Power Authority), the                                                                                                                                                                                                                                                   



                                                                                                                                                                                                                                                                                                                                                                                                                           3  

Alaska Electric Generation & Transmission Cooperative (AEG&T),                                                                                                                                                                                                                                                                                                                                                                   Chugach, HEA,  



                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

 Golden Valley Electric Association (GVEA), Matanuska Electric Association (MEA),  



                                        3                                       AEG&T is the prior iteration of the Alaska Electric & Energy Cooperative,                                                                                                                                                                                                                                                                                              



 Inc. (AEEC), which identified itself in pleadings as an "electrical utility cooperative                                                                                                                                                                                                                                                                                                                           

providing transmission (115kV) and related ancillary services over                                                                                                                                                                                                                                                                                                                                                                   its transmission   

 facilities to electric utility companies in Alaska, including to its sole member, [HEA]."                                                                                                                                                                                                                                                                                                                                                                                                                                             



                                                                                                                                                                                                                                                           -55--                                                                                                                                                                                                                                        7338
  

                                                                                                                                                                                                                                                           - 


----------------------- Page 6-----------------------

                                                 

the Municipality of Anchorage d/b/a Municipal Light & Power (ML&P), and the City  



                                                                                                                          

of Seward d/b/a Seward Electric System. Under the Power Sales Agreement, the Power  



                                                                                                                              

Authority - the predecessor to today's Alaska Energy Authority - agrees to sell, and  



                                                                                                                         

the other parties agree to purchase, certain shares of the Bradley Lake Project's energy  



                                                                                                                               

capacity.   The Power Sales Agreement designates the physical point "at which the  



                                                                                                                        

Purchasers accept delivery" of their Project energy:  the switching station at Bradley  



                                         

Junction.  The Agreement further provides that absent mutually-agreed termination or  



                                                                                                                   

renewal, it remains in effect either for "50 years after the Date of Commercial Operation"  



                                                                                                                              

or  until  all  bonds  issued  to  fund  the  Project  have  been  "satisfied  or  provided  for,  



                                        

whichever occurs later."  



                                                                                                                     

                    The Power Sales Agreement also establishes a committee - generally  



                                                                                                                               

referred to as the Project Management Committee or BPMC - "responsible for the  



                                                                                                                               

management, operation, maintenance, and improvement of the Project," including the  



                                                                                                                        

"scheduling,  production  and  dispatch"  of  Bradley  Lake   energy.                                           The  Project  



                                                                                                                        

Management Committee, composed of the Power Authority and the purchasing utilities,  



                                                                                                                       

is required among other things to "[a]dopt procedures . . . for the resolution of disputes  



                                                                                                            

that may arise between or among the Purchasers and the Authority concerning  the  



                                                                                                                               

interpretation  of this  Agreement,  the obligations  created  by  this Agreement,  or  the  



                                                      

performance of such obligations."  



                                                               

                              b.        The Services Agreement  



                                                                                                                              

                    Chugach and the other energy-purchasing utilities, including HEA and  



                                                                       

AEG&T, contemporaneously entered into the Agreement for the Wheeling of Electric  



                                                                                                                 

Power and for Related Services (Services Agreement), which governs the transmission  



                                                                                                                

of  Bradley  Lake energy  from the Project to  the railbelt utilities' own transmission  



                                                                                                                         

systems.  The Services Agreement contemplates that purchasing utilities will deliver  



                                                                                                                               

Bradley Lake energy to Chugach at the Soldotna Substation, which is defined in the  



                                                               -66--                                                       7338
  

                                                               - 


----------------------- Page 7-----------------------

Agreement   as   "[t]he   Soldotna   Substation   owned   and   operated   by   [HEA],   or   any  



 successor facility at which Bradley Lake Energy can be and is delivered to Chugach at                                                                                                                            



 Chugach's metering point by a Wheeling Utility for services under this Agreement."                                                                                                                                      



The utility may then request that Chugach provide "wheeling services" (meaning a                                                                                                                                   

                                                                                                                                                                             4      A request for  

utility's use of its facilities to transmit another utility's electricity).                                                                                                                                   



wheeling  services requires Chugach  to  wheel the energy  to the requesting  utility's  

                                                                                                                                                                                                  



 "Delivery Point" designated in the Agreement.  The "applicable wheeling rates" are to  

                                                                                                                                                                                                                  



be established and modified "only in accordance with . . . Appendix A" attached to the  

                                                                                                                                                                                                               



Agreement.  

                               



                                 Alternatively,  the  utility  may  ask  Chugach  to  store  or  purchase  the  

                                                                                                                                                                                                             



 electricity delivered to the Soldotna Substation, and Chugach is required to comply;  

                                                                                                                                                                                                  



 compensation for these services is also set out in the Agreement. The Agreement further  

                                                                                                                                                                                                      



 obligates  Chugach  to  "operate,  maintain,  and  repair  the  electrical  facilities  used  to  

                                                                                                                                                                                                                 



perform the  services  provided  hereunder,"  subject  to  "the  capability  of  Chugach's  

                                                                                                                                                                                           



generation and transmission system" as it then existed and to Chugach's priority to first  

                                                                                                                                                                                                             



meet "the safety, efficiency, and economic needs of [its] own system."  

                                                                                                                                                                                 



                                 The Services Agreement requires the parties to meet at least quarterly to  

                                                                                                                                                                                                                  



 discuss any "difficulties encountered" or alleged failures to perform; and the parties  

                                                                                                                                                                                                      



 agree that "any further procedures for dispute resolution under [the Services Agreement]  

                                                                                                                                                                                         



 shall be entrusted (if the Authority concurs) to good faith negotiation and adoption by  

                                                                                                                                                                              



                 4               See Puget Sound Energy v. State, Dep't of Revenue                                                                              , 248 P.3d 1043, 1046                     



n.6  (Wash. App. 2010) (noting regulatory definition of "wheeling" as "the activity of                                                                                                                           

 delivering or distributing electricity owned by others using power lines and equipment                                                                                                     

 of the person doing the wheeling");  see also Matanuska Elec. Ass'n v. Municipality of                                                                                    

Anchorage ,   184   P.3d   19,   21   n.4   (Alaska   2008)   (defining   "wheeling   rates"   as   "the  

 compensation [a utility] receives for the joint use                                                                   and interconnection of [its transmission                         

line]").  



                                                                                                        -77--                                                                                             7338
  

                                                                                                        - 


----------------------- Page 8-----------------------

the   Project   Management   Committee,   with   Chugach's   affirmative   vote   required   for  



adoption   of   such   procedures."     Finally,   the   Services   Agreement   provides  that   the  



"Agreement in its entirety reflects the meeting of the minds among the Parties" and that                                                                                                                                                  



"there exists no                                agreement among                                       the Parties that services will be provided                                                                                  to   the  



Wheeling Utilities for Bradley Lake Energy . . . on terms or conditions other than as set                                                                                                                                                   



forth in this Agreement."                                                 



                                                         c.                The Capability Agreement                       



                                      A third Bradley Lake Agreement is the Amendment to Agreement for Sale                                                                                                                             



of Transmission Capability (the Capability Agreement), executed by HEA, AEG&T,                                                                                                                                           



                                                                                       5  

Chugach, GVEA, and ML&P.                                                                                                                                                                                                                      

                                                                                              The Capability Agreement confirms HEA's intent to  



                                                                                                                                                                                                                          

construct two transmission lines from Bradley Junction, one of them "the Soldotna  



                                                                                                                                                                                                                                         

Segment" between Bradley Junction and the Soldotna Substation. HEA commits to sell,  



                                                                                                                                                                                                                          

and the other parties commit to buy, shares of the carrying capacity of the Soldotna  



                                                                                                                                                                                                                                            

Segment equal to their shares in the Bradley Lake Project. HEA assumes the duty to "in  



                                                                                                                                                                                                                                              

good faith and at all times operate, maintain and repair the electrical facilities used to  



                                                                                                                                                                                                                                    

perform the services provided" under the Capability Agreement.   The parties again  



                                                                                                                                                              

"agree that any procedures for dispute resolution under [the Capability Agreement] be  



                                                                                                                                                                                                            

entrusted  to  good  faith  negotiations  and  adoption  by  the  Project  Management  



                                                                                                                                                                                                                                      

Committee," this  time  "with HEA's affirmative vote required for adoption of such  



                                        

procedures."  



                                                                                                                                                                                                                      

                                      In  sum,  thus,  the  Bradley  Lake  Agreements  describe  the  following  



                                                                                                                                                                                                                                                       

transmission pathway for Bradley Lake energy purchased by utilities other than HEA:  



                                                                                                                                                                                                                   

(1) pursuant to the Power Sales Agreement, the utilities accept the Power Authority's  



                   5                  TheCapabilityAgreementisactuallyanamendmenttoanearlier                                                                                                                          agreement  



among the same parties, preexisting completion of the Bradley Lake Project, for "the sale                                                                                                                                                 

and purchase of a portion of the transmission capability of the Soldotna Segment."                                                                                                                                                         



                                                                                                                      -88--                                                                                                           7338
  

                                                                                                                      - 


----------------------- Page 9-----------------------

delivery   of   energy   at   the   Bradley   Lake   Substation;   (2)   pursuant   to   the   Capability  



Agreement,   HEA   transmits   the   other   utilities'   energy   from   there   to   the   Soldotna  



Substation via the Soldotna                                        Segment; and (3) pursuant to the Services Agreement,                                                    



Chugach wheels the energy from there to the Quartz Creek Substation via the S/Q Line                                                                                                        



before wheeling the energy farther north along its own transmission lines to delivery                                                                                              



points designated by the railbelt utilities.                                                   



                               4.             Legislative action   



                               Bradley Lake's energy potential was studied for decades before the Project                                                                             



                                       6  

became a reality.                                                                                                                                                                                  

                                            In 1982 the Power Authority assumed responsibility for moving it  



                    7  

                                                                                                                                                                                              

forward.                   At  that  time  the  Alaska  Public  Utilities  Commission  (APUC)  -  the  



                                                      8  

                                                                                                                                                                                           

                                                        - "did not have review and approval authority for power sales  

predecessor of the RCA 

                                                                                                                         9   That changed in 1986, when the  

                                                                                                                                                                                               

                                                                                                        

contracts" such as those contemplated by the Project. 



legislature amended AS 42.05.431 to require that wholesale power agreements receive  

                                                                                                                                                                                      



               6              See  ALASKA ENERGY  AUTH.,  supra  note1 ("Thepowergeneration                                                                                       potential  



of Bradley Lake was first studied by the U.S. Corps of Engineers in 1955. The project                                                                        

was authorized by Congress in 1962.");                                                      see also           Ch. 90,  1, SLA 1981 (appropriating                  

funds); Ch. 92,  69, SLA 1981 (amending appropriation).                                             



               7              See Ch. 133,  20, SLA 1982 ("Subject to review of the feasibility study  

                                                                                                                                                                                          

and the plan of finance by the division of budget and management in the Office of the  

                                                                                                                                                                                               

Governor under AS 44.83.384(c)(2), the Bradley Lake hydroelectric project is approved  

                                                                                                                                                                                 

as a project of the Alaska Power Authority under AS 44.83.384(c)(1).").  

                                                                                                                           



               8              See Amerada Hess Pipeline Corp. v. Regulatory Comm'n of Alaska, 176  

                                                                                                                                                                                             

P.3d 667, 670 (Alaska 2008).  

                                                     



               9               Hearing on H.B. 356 Before the Sen. Res. Comm., 15th Leg., 2d Sess.  

                                                                                                                                                                                          

(Feb. 29, 1988) (testimony of Rob LeResche, Exec. Dir., Alaska Power Auth.).  

                                                                                                                                                                      



                                                                                                -99--                                                                                     7338
  

                                                                                                - 


----------------------- Page 10-----------------------

                                   10  

the APUC's          approval.          



                                                                                                                                     11  

                                                                                                                      

                     A bill introduced the following year, supported by the Power Authority, 



was intended in part to remove the APUC's jurisdiction to review wholesale power  

                                                                                                                              

                   12                                                           13 but vetoed by Governor Cowper,14  

                       The bill was passed by the legislature                                                            

agreements.                                                     

and  his  veto  was  sustained.15                   The  governor's  veto  message  focused  on  the  bill's  

                                                                                                                                



deregulatory  effect  on  dozens  of  "small  public  utilities  in  the  state";  the  governor  

                                                                                                                          



specifically "did not reach the question of whether the exemption of Bradley Lake from  

                                                                                                                                 



[APUC] review is in the public interest at this time," saying he "hope[d] to have an  

                                                                                                                                     

opportunity to review that question in the interim."16  

                                                                   



                     Meanwhile, interested utilities were waiting to execute the Power Sales  

                                                                                                                                



Agreement  pending  the  outcome  of  legislative  action  on  proposed  electric  energy  

                                                                                                                             

                                                     17  By the end of the 1987 legislative session, however,  

interties fromHomer to Fairbanks.                                                                                         

                                      



           10         See   Ch. 104,  5, SLA 1986;                   see also      AS 42.05.431(b) ("A wholesale        



power   agreement   between   public   utilities   is   subject   to   advance   approval   of   the  

commission.").  



           11        Senate Bill (S.B.) 22, 15th Leg., 1st Sess. (1987); Hearing on H.B. 356  

                                                                                                                                  

Before  the  Sen.  Res.  Comm.,  15th  Leg.,  2d  Sess.  (Feb.  29,  1988)  (testimony  of  

                                                                                                                                     

Bob LeResche, Exec. Dir., Alaska Power Auth.).  

                                                                   



           12        House  Committee  Substitute  for  Committee  Substitute  for  Sponsor  

                                                                                                                          

Substitute for Senate Bill (H.C.S.C.S.S.S.S.B.) 22, 15th Leg., 1st Sess. (1987).  

                                                                                                                 



           13        1987 Senate Journal 1610-11.  

                                                       



           14        1987 Senate Journal 1731.  

                                                       



           15        1987 Senate Journal 1756-57.  

                                                       



           16        1987 Senate Journal 1731.  

                                                       



           17        Hearing on H.B. 356 Before the Sen. Res. Comm., 15th Leg., 2d Sess.  

                                                                                                                                

                                                                                                                   (continued...)  



                                                                 - 1100--                                                       7338
  

                                                                 - 


----------------------- Page 11-----------------------

the legislature had not authorized the interties or appropriated funds for them, and there                                                        



                                                                                          18  

was "not a lot of hope" for such action in the                                future.                                                     

                                                                                              At that point, the Power Authority  



                                                                                                                                                      

refused to proceed with the Bradley Lake Project until it had binding agreements for the  

                                                                     19   In later testimony to the legislature, the Power  

                                                                                                                                                

                                                          

sale of Bradley Lake energy "in hand." 



Authority's executivedirector, Bob LeResche, described thenegotiationsresulting in the  

                                                                                                                                                      



"paper  intertie"  laid  out  in  the  Services  and  Capability  Agreements,  by  which  the  

                                                                                                                                                     



interested  utilities  "concocted  a  way  in  which  they  could  get  the  Bradley  power  

                                                                                                                                               



distributed to each of the buyers on existing interties with people paying certain amounts  

                                                                                                                                            

under certain principles."20  

                                                   



                        The Bradley Lake Agreements, however, would only become effective  

                                                                                                                                           

upon receipt of "all necessary approvals."21  And as LeResche explained, there were only  

                                                                                                                                                    



two ways to get the necessary approvals:  "One is to run them through the [APUC] and  

                                                                                                                                                     



through the courts thereafter if someone appeals the [APUC's] decision . . . [a]nd the  

                                                                                                                                                      



second way is by passing [a] bill which eliminates the necessity for those [APUC]  

                                                                                                                                            



                       22  

agreements."                



                                                                                                                                        

                        To address these concerns the House Rules Committee, at the governor's  



                                                                                                                                                        

request, introduced a bill in January 1988 that again sought to amend AS 42.05.431 to  



            17          (...continued)
  



(Feb.  29,   1988)  (testimony  of  Bob  LeResche,  Exec.  Dir.,  Alaska  Power  Auth.).
  



            18          Id.  



            19          Id.  



            20          Id.  



            21          Id.  



            22          Id.  



                                                                          - 

                                                                          - 111-1-                                                                7338
  


----------------------- Page 12-----------------------

                                                                                                                                 23  

limit   regulatory   oversight   of   Bradley   Lake   power.                                                                           During  a   House   Judiciary  



Committee   hearing   on   the   bill,   H.B.   356,   the   committee   chair   described   the   bill's  



threefold purpose:                           (1) "to ensure the completion of Bradley Lake in a timely manner                                                                              



without any potential delays caused by intervenors in [APUC] hearings"; (2) to ensure                                                                                                        



that Project bondholders "areadequately secured"; and                                                                           (3) to       "minimize the deregulation         



of the railbelt utility" (ostensibly addressing the concern of Governor Cowper's 1987                                                                                                            

              24    During a later hearing of the Senate Resources Committee, LeResche stressed  

veto).                                                                                                                                                                                    



the importance of avoiding the costs of further delay, which he estimated to be "10 to 12  

                                                                                                                                                                                                       



million dollars a year as we sit on this project"; he also testified that "the bond buying  

                                                                                                                                                                   



community puts a significant premium on revenue bonds . . . secured by contracts" that  

                                                                                                                                                                                                    



are subject to regulatory review, meaning that "the rate payers who are going to pay off  

                                                                                                                                                                                                      



these bonds . . . would have to pay significantly higher interest on the bonds if the  

                                                                                                                                                                                                     

contract were under [APUC] review now and in the future."25  

                                                                                                                            



                23              See  H.B. 356, 15th Leg., 2d Sess. (1988) ("An Act relating to the authority                                                                            



of the Alaska Public Utilities Commission in connection with certain activities of the                                                                                                               

Alaska Power Authority . . . .").                                            



                24              Hearing on H.B. 356 Before the House Judiciary Comm., 15th Leg., 2d  

                                                                                                                                                                                                       

Sess. (Jan. 28, 1988) (statement of Representative John Sund, Chair, House Judiciary  

                                                                                                                                                                                       

Comm.).  In the order here under review, the RCA found that the legislative history of  

                                                                                                                                                                                                        

AS 42.05.431(c) "shows that this exception was intended to 'minimize the deregulation  

                                                                                                                                                                                

of railbelt utilities.' " This appears to be incorrect. Chairman Sund's comments logically  

                                                                                                                                                                                         

refer to the fact that H.B. 356 omitted that aspect of S.B. 22 that would have removed  

                                                                                                                                                                                        

APUC "regulation over . . . 67 small public utilities in the state"; it was this deregulatory  

                                                                                                                                                                               

effect that had prompted Governor Cowper's veto of S.B. 22. 1987 Senate Journal 1731.  

                                                                                                                                                                                                               

The perception that H.B. 356 minimized deregulation was due to what the bill omitted,  

                                                                                                                                                                                         

not what it contained.  

                                                     



                25              Hearing on H.B. 356 Before the Sen. Res. Comm., 15th Leg., 2d Sess.  

                                                                                                                                                                                                 

(Feb. 29, 1988) (testimony of Bob LeResche, Exec. Dir., Alaska Power Auth.).  

                                                                                                                                                                           



                                                                                                  - 1122--                                                                                       7338
  

                                                                                                  - 


----------------------- Page 13-----------------------

                     LeReschealso          describedthenegotiating process that resultedin                          theBradley   



                            26  

Lake  Agreements.                                                                                                               

                                He explained the Agreements' interdependency and why H.B. 356  



                                                                                                                          

should be viewed as excluding all of them from regulatory oversight:  "[T]he bargain  



                                                                                                                                 

between the State and the utilities isn't just the power sales agreement, nor just the  



                                                                                                                                 

wheeling agreements, but it's the intertwined sum of those three agreements. That's the  

                                      27   Because of this contractual interdependency, he testified,  

                                                                                                                        

bargain they've struck." 



"[t]here is no logic and no good sense to trying to excise some of those agreements out  

                                                                                                                                 

for special regulatory treatment from the others."28  

                                                                

                     House Bill 356 was passed into law in 1988.29                              As enacted, it amended  

                                                                                                                        



AS 42.05.431 by adding the following subsection:  

                                                             



                     (c)  Notwithstanding  (b)  of  this  section  [requiring  APUC  

                                                                                                      

                    review of wholesale power agreements],  

                                                                



                     (1)  a  wholesale  agreement  for  the  sale  of  power  from  a  

                                                                                                               

                    project       licensed        by      the     Federal        Energy        Regulatory  

                                                                                              

                     Commission  on  or  before  January  1,  1987,  and  related  

                                                                                                      

                     contracts   for         the   wheeling,   storage,               regeneration,          or  

                                                                                                            

                    wholesale   repurchase   of   power   purchased   under   the  

                                                                                                           

                     agreement, entered into between the Alaska Power Authority  

                                                                                                   

                     and one or more other public utilities or among the utilities  

                                                                                                      

                     after  October  31,  1987,  and  before  January  1,  1988,  and  

                                                                                                 

                     amendments to the wholesale agreement or related contract,  

                                                                                                    

                     are not subject to review or approval by the commission until  

                                                                                                          

                     all long-term debt incurred for the project is retired; and  

                                                                                                      



          26         Hearing  on  H.B.  356  Before  the  House  Judiciary  Comm.,   15th  Leg.,  2d  



Sess.  (Jan.  27,   1988)  (testimony  of  Bob  LeResche,  Exec.  Dir.,  Alaska  Power  Auth.).  



          27        Id.  



          28        Id.  



          29         Ch.   11,     1,  2,  SLA   1988.  



                                                               - 

                                                               - 113-3-                                                      7338
  


----------------------- Page 14-----------------------

                            (2)  a wholesale agreement or related contract described in (1)                                                           

                            of   this   subsection   may   contain   a   covenant   for   the   public  

                            utility to establish, charge, and collect rates sufficient to meet                                                    

                            its obligations under the contract; the rate covenant is valid                                                       

                            and enforceable.                   [30]  



The bill also amended AS 42.05.511 - subsequently renumbered to AS 42.05.431(e)31  

                                                                                                                                                         



- by adding the following subsection:  

                                                           



                            (d) Validated costs incurred by a utility in connection with  

                                                                                                                                                  

                            the related contracts described in AS 42.05.431(c)(1) must be  

                                                                                                                                                       

                            allowed in the rates charged by the utility. In this subsection,  

                                                                                                                                    

                            "validated costs" are the actual costs that a utility uses, under  

                                                                                                                                               

                            the   formula   set   out   in   related   contracts   described   in  

                                                                                                                                                     

                            AS 42.05.431(c), to establish rates, charges for services and  

                                                                                                                                                    

                            rights, and the payment of charges for services and rights.  

                                                                                                                                             

                            This subsection does not grant the commission jurisdiction to  

                                                                                                                                                        

                            alter   or   amend   the   formula   set   out   in   those   related  

                                                                                                                                           

                            contracts.[32]  



              B.	           Proceedings  



                             1.           The RCA proceedings  

                                                                  



                            In November 2013, in anticipation of the expiration of the HEA/Chugach  

                                                                                                                                                        



lease,  HEA  filed  two  tariff  letters  with  the  RCA.                                                           One  -  the  transmission  tariff  

                                                                                                                                                                            



application -sought "approval of transmission and related ancillary services tariffs" for  

                                                                                                                                                                                  



HEA's contemplated assumption of the S/Q Line's operation. The other - the line loss  

                                                                                                                                                                                



tariff  application  -  sought  compensation  for  "transmission  line  losses  due  to  

                                                                                                                                                                                 



transmitting energy from the [Project]." A number of utilities objected to HEA's choice  

                                                                                                                                                                          



of forum:  Chugach, GVEA, MEA, and ML&P (the Protesting Utilities).  They argued  

                                                                                                                                                                         



              30            Id.   1.   



              31            See  AS 42.05.431.   



              32            Ch. 11,  2, SLA 1988.                



                                                                                       - 

                                                                                       - 1144--	                                                                             7338
  


----------------------- Page 15-----------------------

                                                                                            

that the RCA should reject the tariff filings because they sought to "fundamentally  



                                                                                                                           

change the rights, obligations, and rates associated with wheeling Project power across  



                                                                                                                              

the S/Q line." According to the Protesting Utilities, "[t]hose rights, obligations, and rates  



                                                                                                     

are defined in the Bradley Lake Agreements," which, along with "any amendments to  



                                                                                                                          

those   agreements,             are   exempt          from   Commission                review   or         approval        under  



       

AS 42.05.431(c)."  



                                                                                                                 

                    In June 2014 the RCA issued Order 10, entered in both the transmission  



                                                                                                                           

tariff docket and the line loss docket. Order 10 addressed the RCA's authority to decide  



                                                                                                                                      

HEA's tariffapplications,theapplications' substance, and anumber ofprocedural issues.  



                                                                                                                              

The RCA prefaced the summary of its findings and conclusions by stating that they were  



                                                                                                                                 

"[b]ased on the record developed so far in these dockets, and only for the purpose of  



                                                                                                                             

setting interim and refundable inception rates for wheeling Bradley Lake energy from  



                                                                                                                       

Soldotna  Substation  to  Quartz  Creek  Substation  and  for  the  purpose  of  denying  



                                                       

implementation of HEA's line loss tariff."  



                                                                                                                               

                    The RCA acknowledged that the Bradley Lake Agreements, "and any  



                                                                                                                                 

amendments to them, including future amendments, [were] not to be submitted to us for  



                                                                                                                                

review or approval before going into effect."  But it concluded that the Agreements did  



                                                                                    

not specifically address the effect of the expiration of the HEA/Chugach lease and did  



                                                                                                                       

not preclude the RCA from setting rates for HEA's subsequent provision of wheeling  



                                                                                                                    

services from the Soldotna to Quartz Creek Substations over the S/Q Line.  



                                                                                                                               

                    Turning to the substance of the tariff applications, the RCA denied the line  



                                                                                                                               

loss tariff application on the understanding that the parties had "reached tacit, if not  



                                                                                                                                

explicit, agreement regarding compensation for Bradley Lake related line losses on the  



                                                                                                                              

HEA system."  It denied HEA's transmission tariff application on grounds that the rates  



                                                                                                                       

sought were unjust and unreasonable.  It further noted, however, that "HEA is currently  



                                                                                                                        

providing  wheeling  services  for  Bradley  Lake  energy  over  the  SQ  Line  without  



                                                               - 1155--                                                     7338
  

                                                               - 


----------------------- Page 16-----------------------

                                                                                                                      

compensation," and it approved an "interim and refundable inception rate for wheeling  



                                                                                                                            

Bradley Lake energy over the SQ Line" retroactive to January 1, 2014.   The RCA  



                                                                                                                           

conditioned  its  approval  of  interim  rates  on  HEA's  compliance  with  certain  filing  



                                                                                                                         

requirements and stated that "[f]urther  proceedings [were] necessary . . . to finally  



                                                                                                                   

determine whether the rates and rules contained in [the transmission tariff application  



                                                                                                                   

were] just and reasonable."  The RCA concluded that "[n]o substantive or procedural  



                                                                                                                          

matters remain[ed] in [the line loss docket]," closed that docket, and advised the parties  



                                                                                                                

of their rights to appeal it as "the final decision in [the line loss docket]."  



                                                                                                                       

                    TheProtestingUtilities -Chugach, GVEA, MEA,and ML&P -appealed  



                                                 

Order 10 to the superior court.  



                                                                                            

                    2.        The Project Management Committee proceedings  



                                                                                                                               

                    In the meantime the same issues were being considered by the BPMC, the  



                                                                                                                                

Project Management Committee established under the Bradley Lake Agreements.  In  



                                                                                                                               

December 2013 the BPMC issued a resolution noting the upcoming expiration of the  



                                                                                                                          

HEA/Chugach lease and HEA's November 2013 tarifffilings with the RCA. The BPMC  



                                                                                                                        

asserted that it had the "primary jurisdiction and authority . . . to resolve" the dispute,  



                                                                                                                 

urged  the  interested  parties  to  mediate,  and  formed  a  committee  to  recommend  



                    

resolutions.  



                                                                                                                             

                    In a May 2014 order the BPMC affirmed its authority over the dispute both  



                                                                                                                              

because  of  the  dispute-resolution  provisions  of  the  Bradley  Lake  Agreements  and  



                                                                                                                   

because  of  "the  exemption  of  the  Bradley  Lake  Agreements  from  any  regulatory  



                                                                                                                             

oversight  under  AS  42.05.431(c),"  which  allowed  the  participants'  "rights  and  



                                                                                                                                

responsibilities . . . over electrical facilities and rates . . . to be addressed and resolved by  



                                                                                                                          

the industry through the specialized experience and expertise of the BPMC." The BPMC  



                                                                                                                                 

then concluded that the Bradley Lake Agreements were not affected by the expiration of  



                                                                                                                             

the HEA/Chugach Lease and that Chugach was still entitled to wheel Project energy over  



                                                              - 1166--                                                     7338
  

                                                              - 


----------------------- Page 17-----------------------

the S/Q Line.   The BPMC further concluded, however, that while "HEA is adequately                                                                                                       



compensated under the Bradley Lake Agreements for the use of HEA's system and is                                                                                                                               



entitled to no additional compensation," "in the interest of reaching a resolution . . . ,                                                                                                                    



HEA   is   to   receive   additional   payments   from   the   other   Project   Participants   for   the  



continuing use of HEA's facilities north of the Soldotna Substation throughout the term                                                                                                                 



of   the   Services   Agreement."     The   BPMC   set   the   payments   to   include   a   "fixed  



component" of $300,000 a year and a "variable component" reflecting HEA's costs of                                                                                                                            



performing the maintenance and repair that the Services Agreement had contractually                                                                                                



delegated to Chugach.                                   



                                 3.              The superior court proceedings                     



                                 The judicial process was first invoked in April 2014, when AEEC, HEA's                                                                                            

                                                    33  filed a complaint seeking restitution from Chugach, GVEA, and  

transmission affiliate,                                                                                                                                                                                    



ML&P for unjust enrichment based on its wheeling of their electricity along the S/Q Line  

                                                                                                                                                                                                        



following the lapse of the HEA/Chugach lease.  MEA intervened.  AEEC amended its  

                                                                                                                                                                    



complaint to seek not only restitution for unjust enrichment but also declaratory relief,  

                                                                                                                                                                                                     



including a declaration that the RCA, "not the BPMC, has jurisdiction to determine just  

                                                                                                                                                                                                           



and reasonable rates for the transmission of electric energy across AEEC's transmission  

                                                                                                                                                                                     



system."  



                                 With their answer the Protesting Utilities filed a third-party complaint  

                                                                                                                                                                                          



naming HEA and a counterclaim seeking, among other things, a declaration that "the  

                                                                                                                                                                                                         



Bradley Lake Agreements and any amendments to those agreements are exempt fromthe  

                                                                                                                                                                                                            



RCA's jurisdiction."  They also sought a permanent injunction prohibiting AEEC and  



HEA from "seeking approval from the RCA of their Tariff Filings as they relate to  

                                                                                                                                                                                                              



matters governed by the Bradley Lake Agreements."  AEEC and HEA then moved to  

                                                                                                                                                                                                               



                33  

                                                                       

                                 See supra note 3.  



                                                                                                     - 1177--                                                                                                   7338  

                                                                                                     - 


----------------------- Page 18-----------------------

                                                                                                                             

stay their suit "pending final resolution of the matters presently pending before the RCA  



                                                                                                                                

or the granting of a petition for review," noting that "[t]he RCA ha[d] interpreted the  



                                                                                                

scope of its authority and taken jurisdiction over this matter."  



                                                                                                                                

                    When the Protesting Utilities filed their superior court appeal from the  



                                                                                                                               

RCA's Order 10, the RCA moved to dismiss the appeal on grounds of untimeliness and  



                                                                                                                                

the lack of an appealable final order. Ultimately the superior court, without ruling on the  



                                                                                                                 

RCA's motion to dismiss the appeal and over its objection, exercised its discretionary  



                                                                                                                                

authority under Alaska Civil Rule 42(a) to consolidate the administrative appeal with the  



                                                                                                                                

AEEC lawsuit for the purpose of litigating "a common question of law":  "whether the  



                                                                                                                                  

[RCA] had the authority (i.e., subject matter jurisdiction) to address the issues raised in  



                                                                                                                  

[the transmission tariff and line loss tariff dockets]." The court stayed other proceedings  



                                                                                                                              

in both cases pending its decision of the jurisdictional issue. It invited the parties in both  



                                                                                                                         

cases, including the RCA, to address the jurisdictional issue, and all of the parties,  



                                             

including the RCA, did so.  



                                                                                                                                      

                    The superior court issued its order in the consolidated cases in May 2015.  



                                                                                                                          

It concluded that the "RCA did not have the authority to review or determine the interim  



                                                                                                                          

rates for wheeling Bradley Lake energy from the Soldotna Substation to the Quartz  



                                                                                                 

Creek Substation or to review or determine line loss related to wheeling Bradley Lake  



                                                                                                                             

energy over HEA's transmission system."  The court observed that the Bradley Lake  



                                                                                                                     

Agreements were signed after the HEA/Chugach lease was already in effect, ostensibly  



                                                                                                                             

"with [the parties'] full knowledge of the possessory status of the S/Q Line."  The court  



                                                                                                                                

reasoned that unless otherwise agreed, "the termination of a lease does not change the  



                                                                                                                             

rights and obligations of parties to a separate and unrelated contractual agreement, much  



                                                                                                                                      

less terminate that agreement."  It cited the Services Agreement's integration clause:  



                                                                                                                                    

"This Agreement in its entirety reflects the meeting of the minds among the Parties . . .  



                                                                                                                                

and there exists no agreement among the Parties that services will be provided to the  



                                                               - 1188--                                                     7338
  

                                                               - 


----------------------- Page 19-----------------------

Wheeling Utilities for Bradley Lake Energy . . . on terms or conditions other than as set                                                                                                                                                                                                                                   



forth in this Agreement." The court concluded, "Because the Bradley Lake Agreements                                                                                                                                                                                                      



are not affected by the lease agreement, RCA is statutorily exempted from resolving                                                                                                                                                                                                               



disputes that arise from the Bradley Lake energy running across the S/Q Line."                                                                                                                                                                                                                                      The  



court therefore vacated Order 10, remanded the administrative appeal to the RCA "for                                                                                                                                                                                                                                   



clarification consistent with this order," and lifted the stay on further proceedings on                                                                                                                                                                                                                                    



AEEC's lawsuit.                                                   



                                                   The   RCA   and   HEA   filed   petitions   for   review,   which   we   granted   and  



converted to appeals because the superior court's order effectively resolved all issues in                                                                                                                                                                                                                                     



the administrative appeal.                                                                           Their challenges center on whether Order 10 was a final,                                                                                                                                                



appealable order; whether the superior court properly decided the administrative appeal                                                                                                                                                                                                                      



in   the   absence   of   an   agency   record;   and   whether   the   RCA   had   authority  to   issue  



Order 10.   



III.                      STANDARD OF REVIEW                                                   



                                                   "When the superior court acts as an intermediate court of appeal in an                                                                                                                                                                                                   



administrative matter, we 'independently review and directly scrutinize the merits of the                                                                                                                                                                                                                                  

                                                                                          34             "We  exercise  our  independent  judgment  on  [any]  issue  

 [agency]'s   decision.'   "                                                                                                                                                                                                                                                                                     



concerning the scope of an agency's authority since it involves statutory interpretation,  

                                                                                                                                                                                                                                                                                 



or analysis of legal relationships, about which courts have specialized knowledge and  

                                                                                                                                                                                                                                                                                                                        

expertise."35  



                         34                       Nw. Med. Imaging, Inc. v. State, Dep't of Revenue                                                                                                                                                      , 151 P.3d 434, 438                                           



(Alaska 2006) (alteration in original) (quoting                                                                                                                                 Alyeska Pipeline Serv. Co. v. DeShong                                                                                                               ,  

77 P.3d 1227, 1231 (Alaska 2003)).                                                                          



                         35                       Far N. Sanitation, Inc. v. Alaska Pub. Utils. Comm'n, 825 P.2d 867, 871  



n.6 (Alaska 1992); see also Nw. Med. Imaging, 151 P.3d at 438 ("Whether an agency  

                                                                                                                                                                                                                                                                                                           

acting in a judicial capacity or the superior court has subject matter jurisdiction is a  

                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                    (continued...)  



                                                                                                                                                            - 1199--                                                                                                                                                7338
  

                                                                                                                                                            - 


----------------------- Page 20-----------------------

                                                                                                  36  

                      Issues of ripeness are subject to de novo                       review.         "Whether an appeal is             



                                            37  

timely is a question of law,"                                                                                                      

                                               but a superior court's decision to relax the timeliness rules  



                                                        38  

                                                              

                                         

is reviewed for abuse of discretion. 



                                                                                                                                     

                      "Questions ofcontract interpretationaregenerallyquestions oflawthatwill  



                                    39  

                          

be reviewed de novo." 



IV.        DISCUSSION  



                      TheRCAand HEAraiseseveral challengesto thesuperior court'sappellate  

                                                                                                                             



jurisdiction: that Order 10 was not a final, appealable order; that to the extent it was final  

                                                                                                                                   



and appealable the Protesting Utilities' appeal was late; that the superior court erred by  

                                                                                                                                       



ruling on the RCA's jurisdiction without the benefit of the agency record, which had not  

                                                                                                                                      



yet been filed; and that the superior court erred by allowing the Protesting Utilities to  

                                                                                                                                       



 submit evidence in support of their jurisdictional arguments that had not been considered  

                                                                                                                          



by the RCA.  We reject these arguments and conclude that the superior court properly  

                                                 



exercised its appellate jurisdiction.  

                                     



                      On the merits, we also agree with the superior court's conclusion:  that the  

                                                                                                                                      



RCA lacked the regulatory authority to issue Order 10.  

                                                                                    



           35         (...continued)
  



question  of  law,  subject  to  de  novo  review  by  this  court.").
  



           36        State  v. Am. Civil Liberties   Union,  204  P.3d  364,  367-68  (Alaska 2009).    



           37         Griswold  v.  City  of  Homer,  252  P.3d   1020,   1025  (Alaska  2011).  



           38        See  Anderson   v.   State,   Commercial  Fisheries  Entry   Comm'n,   654   P.2d  



 1320,   1322  (Alaska   1982).  



           39        Norville v. Carr-Gottstein  Foods  Co., 84 P.3d 996, 1000  n.1 (Alaska 2004).  



                                                                  - 

                                                                  -220-0-                                                         7338
  


----------------------- Page 21-----------------------

                 A.	              The   Superior   Court   Had   Jurisdiction   To   Determine   The   RCA's  

                                  Authority To Issue Order 10.                                           



                                  The superior court has appellate jurisdiction over "final orders" of the                                                                                                        



               40  

RCA.                                                                                                                                                                                                               

                     Order 10 contained a paragraph designating it as a "Final Order" and setting out  



                                                                                                                                                                                                              

the  parties'  appeal  rights,  with  this  qualification:                                                                            "This  order  constitutes  the  final  



                                                                                                                                                                                                                   

decision in Docket U-13-204," the line loss docket.  The order did not purport to be the  



                                                                                                                                                                                            

final decision in the transmission docket, and in fact, as explained above, it specifically  



                                                                                                                                                                                                 

contemplated further proceedings on HEA's transmission tariff application.  



                                                                                                                                                                               

                                  The RCA and HEA accordingly contend that Order 10 was interlocutory  



                                                                                                                                                                                                            

and not appealable as to the transmission docket because it did not dispose of the entire  



             41  

                                                                                                                                                                                                          

case.              They further contend that although Order 10 was final as to the line loss docket  



                                                                                                                                                                                                          

- denying HEA's line loss tariff application without prejudice and closing that docket  



                                                                                                                                                                                                          

on grounds that the parties appeared to have reached agreement - the line loss docket  



                                                                                                                                       

cannot serve as the vehicle for judicial review of the jurisdictional issue because there  



                                                                                                                                                                                                                 

was no losing party with a reason to appeal, and, in addition, a finding of jurisdiction was  



                                                                                                                                                                                

not necessary to that part of the order since all it did was deny relief.  



                                                                                                                                                                                      

                                  In  response,  the  Protesting  Utilities  point  out  that  their  administrative  



appeal was consolidated with AEEC's lawsuit, in which both sides sought declaratory  



                                                                                                                                                                                                       

relief addressing the issue of the RCA's authority to approve rates for wheeling Bradley  



                 40               See  AS 22.10.020(d) ("The superior court has jurisdiction in all matters                                                                                             



appealed to it from . . . [an] administrative agency when appeal is provided by law. . . .");                                                                                                                    

AS 42.05.161(a) (providing "that final administrative determinations by the commission                                                                                                       

are subject to judicial review under [the Administrative Procedure Act, AS 44.62] as                                                                                                                                 

provided in AS42.05.551(a)"); AS 42.05.551(a) ("All finalorders ofthecommission are                                                                                                                                

subject to judicial review in accordance with AS 44.62.560 -                                                                                             44.62.570.").    



                 41               See Ostman v. State, Commercial Fisheries Entry Comm'n, 678 P.2d 1323,  

                                                                                                                                                                                                             

 1327 (Alaska 1984).  

                                    



                                                                                                        -22 11--	                                                                                             7338
  

                                                                                                        - 


----------------------- Page 22-----------------------

                                                                                                                                

 Lake  energy  over  the  S/Q  Line.                     The  superior  court's  order  was  entered  in  the  



                                                                                                                              

 consolidated cases, and the RCA, though not a party to the AEEC lawsuit, was a party  



                                                                                                                    

to the consolidated cases by virtue of the appeal and had the same right and opportunity  



                                                                                                                                       

 as every other party to brief and argue the essential issue of its regulatory jurisdiction.  



                                                                                                                

But the RCA counters that despite consolidation it was a party only to the administrative  



                                                                                                                                  

 appeal; that the appeal was invalid for a number of reasons; and that the RCA cannot be  



                                                                                                                                    

bound by a decision that was lawfully entered only in the lawsuit to which it was not a  



party.  



                                                                                                                               

                     We  conclude,  however,  that  the  issue  of  the  RCA's  jurisdiction  was  



                                                                                                                             

properly decided in both the administrative appeal and the AEEC lawsuit. Even if Order  



                                                                                                                              

 10 was not a final, appealable order with regard to the transmission docket - an issue  



                                                                                                                                 

we need not decide - it was expressly made a final, appealable order with regard to the  



                                                                                                               

 line loss docket. The Protesting Utilities appealed fromOrder 10 without differentiation;  



                                                                        

their appeal encompassed both dockets.  And Order 10 in its entirety was premised on  



                                                   

the RCA's authority to issue it.  



                                                                                                                    

                     The RCA began its discussion by stating that its findings and conclusions  



                                                                                                                       

were "for the purpose of setting interim and refundable inception rates for wheeling  



                                                                                                                                 

Bradley Lake energy from Soldotna Substation to Quartz Creek Substation and for the  



                                                                                                                                  

purpose of denying implementation of HEA's line loss tariff ."  (Emphasis added.)  Its  



                                                                                                                                   

 subsequent discussion of its authority repeatedly referenced the line loss tariff as well as  



                                                                                                                                 

the transmission tariff, finding that HEA's filing of the line loss tariff did not violate the  



                                                                                                                     

Power Sales Agreement but did conflict with requirements of the Capability Agreement  



                                                                                                                       

 and therefore was outside the RCA's authority. Thoughrecognizing thelikely resolution  



                                                                                                                            

 of the line loss dispute by "a tacit agreement . . . which appears satisfactory to the parties  



                                                                                                                 

 for linelosscompensation toHEA, making [thelineloss tariffapplication]unnecessary,"  



                                                                -2222--                                                      7338
  

                                                                - 


----------------------- Page 23-----------------------

the RCA nonetheless found that the application "proposed rates which are unjust and                                                                                                                                                                                    



unreasonable in their entirety" and denied interim implementation.                                                                                                                                                    



                                           The RCA and HEA contend that the Protesting Utilities cannot properly                                                                                                                                        



appeal from an order that gave them "the relief (the denial of the line loss tariff) which                                                                                                                                                                      



they sought below"; they contend that any appeal from Order 10 as it related to the line                                                                                                                                                                               



loss docket was moot.                                                       But in Alaska the mootness doctrine "is a matter of judicial                                                                                                                   

                                                                                                                                                                                                                                                              42       The  

policy" and, unlike its federal counterpart, does not act as a limit on                                                                                                                                                jurisdiction.                                  



court had the jurisdiction  to hear an appeal from the line loss docket even if that appeal  

                                                                                                                                                                                                                                                               



could have been properly dismissed as moot. We therefore consider the superior court's  

                                                                                                                                                                                                                                                             



decision to rule on the issue of the RCA's authority in the consolidated cases not as an  

                                                                                                                                                                                                                                                                            



assertion of appellate jurisdiction but as a prudential decision, implicating issues of  

                                                                                                                                                                                                                                                                            

ripeness and mootness that we review de novo.43  

                                                                                                                                    



                                           It is not reasonably disputed that the issue of the RCA's authority was  

                                                                                                                                                                                                                                                                      



central  to  both  the  AEEC  lawsuit  and  the  administrative  appeal,  that  it  remained  

                                                                                                                                                                                                                                                    



genuinely at issue, and that it was implicated in all proceedings going forward.  Nor is  

                                                                                                                                                                                                                                                                              



it reasonably disputed that all interested parties were before the court in the consolidated  

                                                                                                                                                                                                                                           



cases, and all had the opportunity to be heard on the issue of the RCA's authority. It was  

                                                                                                                                                                                                                                                                       



                     42                   Bowers Office Prods., Inc. v. Univ. of Alaska                                                                                                         , 755 P.2d 1095, 1096-97                                



(Alaska 1988);                                   see also Falcon v. Alaska Pub. Offices Comm'n                                                                                                            , 570 P.2d 469, 474-75                            

(Alaska 1977) ("Since the requirement of adversity is neither federally mandated nor                                                                                                                                                                                    

required by the Alaska Constitution, the court's requirement of adversity as a component                                                                                                                                                      

of standing is essentially a judicial rule of self-restraint.").                                                                       



                     43                   See Alaska Cmty. Action on Toxics v. Hartig, 321 P.3d 360, 366 (Alaska  

                                                                                                                                                                                                                            

2014); see also State v. Am. Civil Liberties Union, 204 P.3d 364, 367-68 (Alaska 2009)  

                                                                                                                                                                                                                                                                 

("[T]his court is the ultimate arbiter of . . . issues [of standing, mootness, and ripeness]  

                                                                                                                                                                                                                                                       

and we review de novo a superior court's ripeness determination.").  

                                                                                                                                                                  



                                                                                                                                    -2233--                                                                                                                         7338
  

                                                                                                                                   - 


----------------------- Page 24-----------------------

certainly efficient to decide the issue only once at the superior court level.                                                                                             We thus   

conclude that the issue was ripe and not moot.                                                        44  



                              The RCA and HEA contend, however, that the issue should not have been  

                                                                                                                                                                                     



decided yet , because the RCA's own decision-making process wasongoingat theagency  

                                                                                                                                                                                



level; any mistake in its assertion of jurisdiction could "be remedied in the further agency  

                                                                                                                                                                                

proceedings or on appeal from a final order."45   HEA points out that the RCA approved  

                                                                                                                                                                           



only rates that were interim and fully refundable, and its assertion of jurisdiction, if  

                                                                                                                                                                                           



mistaken, could be easily remedied following an appeal in the usual course from a final,  

                                                                                                                                                                                    



appealable order.  

                                        



                             But while Order 10's approval of rates was expressly interim, its decision  

                                                                                                                                                                             



of the RCA's jurisdiction to set those rates was not.  The order's relevant conclusions  

                                                                                                                                                                     



include both (1) that the RCA has authority to establish wheeling rates for the S/Q Line  

                                                                                                                                                                                     



upon  expiration of the  HEA/Chugach  lease and (2)  that "[f]urther  proceedings are  

                                                                                                                                                                                        



necessary in [the transmission tariff docket] to finally determine whether the rates and  



rules contained in [HEA's tariff application] are just and reasonable."   The Order's  

                                                                                                                                                                              



discussion  of the first issue,  the  RCA's authority,  closely examines AS 42.05.431,  

                                                                                                                                                                       



               44             "The   requirement   of   'ripeness'   means   there   must   be   'a   substantial  



controversy, between parties having adverse legal interests, of sufficient immediacy and                                                                                                

reality to warrant the issuance of a declaratory judgment.' "                                                                       Lowell v. Hayes                      , 117 P.3d     

745, 757 n.61 (Alaska 2005) (quoting                                               Brause v. State, Dep't of Health &Soc. Servs.                                                       , 21   

P.3d 357, 359 (Alaska 2001)). "A claim is moot if there is no 'present, live controversy'                                                                          

or if it is impossible to provide the relief sought."                                                          Alaska Cmty. Action on Toxics                                        , 321   

P.3d at 366 (quoting                         Ulmer v. Alaska Rest. &Beverage Ass'n                                                   , 33 P.3d 773, 776 (Alaska               

2001)).    



               45             The RCA's and HEA's challenge  to  finality  is in  the context of their  

                                                                                                                                                                                    

argument that Order 10 was not a final, appealable order with regard to the jurisdictional  

                                                                                                                                                                  

issue. We consider the challenge in what we believe is its proper context: as a challenge  

                                                                                                                                                                         

to the superior court's prudential decision to consider an issue that may have been moot  

                                                                                                                                                                                    

or not ripe for review.  

                                                     



                                                                                           -2244--                                                                                  7338
  

                                                                                           - 


----------------------- Page 25-----------------------

including its legislative history, as well as the terms of the Bradley Lake Agreements to                                                                                                                                                                                          



determine what effect, if any, they may have on the issue.                                                                                                                                   The Order distinguishes the                                                       



RCA's regulatory authority from the BPMC's contractual dispute-resolution authority.                                                                                                                                                                                                        



The Order concludes "that wheeling of Bradley Lake energy over the SQ Line is no                                                                                                                                                                                                



longer governed by the Bradley Lake Agreements" and that the RCA therefore has                                                                                                                                                                                               



"authority to regulate both the terms and rates under which HEA provides this wheeling                                                                                                                                                                     



service."     This conclusion - a necessary first step to the next, in which the RCA                                                                                                                                                                                   



addresses the merits of HEA's tariff applications - appears final; there is nothing about                                                                                                                                                                              



the discussion that invites or anticipates further proceedings on the issue of the RCA's                                                                                                                                                                          



authority.  



                                            In   Alaska   Consumer   Advocacy   Program   v.   Alaska   Public   Utilities  



 Commission   (ACAP),   we   reviewed   an   order  allowing   a   telephone   utility   to   begin  



collecting    "charges    for    operator    assistance    with    intrastate    calls"    pending    the  



commission's   consideration   of   a   new   "rate   design"   for   the   utility's   intrastate   and  

                                                  46        We held that the order - Order 37 - was "final and appealable  

interstate  rates.                                                                                                                                                                                                                                   

because it [was] fully effective and [had] practical consequences."47                                                                                                                                                         We explained that  

                                                                                                                                                                                                                                                                             



the order's "effects [were] felt by Alaska consumers" to the extent that consumers were  

                                                                                                                                                                                                                                                                         

paying "operator assistance charges because of it."48   We further explained that "[s]ince  

                                                                                                                                                                                                                                                               



the challenges [to Order 37 were] procedural and not substantive challenges to the design  

                                                                                                                                                                                                                                                                     



of the rate, these challenges were as ripe for review on the day the order was entered as  

                                                                                                                                                                                                                                                                                   



they  will  ever  be";  "[s]ubsequent  notice  and  production  of  evidence  in  ongoing  

                                                                                                                                                                                                                                                            



                      46                    793 P.2d 1028, 1031 (Alaska 1990).                                                               



                      47                   Id.  at 1032.   



                      48                   Id.  



                                                                                                                                      - 

                                                                                                                                      -2255--                                                                                                                            7338
  


----------------------- Page 26-----------------------

proceedings   could   not   possibly   remedy   procedural   defects   in   the   promulgation   of  

Order 37."         49  



                       We conclude that the same rationale applies here.  The challenge to the  

                                                                                                                                                



RCA's assertion of jurisdiction for purposes of Order 10 was not a challenge to the  

                                                                                                                                           



interimrates per se, which were subject to modification as the proceedings continued and  

                                                                                                                                                



were refundable if not ultimately sustained.  The challenge, rather, was to the RCA's  

                                                                                                                                         



authority to address that subject at all. "Jurisdictional defects deprive the agency of [the]  

                                                                                                                                              

power  to  adjudicate  or  regulate  the  subject  matter."50                                        Further  proceedings  in  the  

                                                                                                                                               



transmission docket could not possibly remedy the claimed jurisdictional defect; they  

                                                                                                                                              



could only perpetuate it.  Thus, the challenge is "as ripe for review" now as it "will ever  

                                                                                                                                              



be."  



                       HEA contends that our decision on this issue should be governed not by  

                                                                                                                                                 



                                                                                                                                                  51  

ACAP but rather by Far North Sanitation, Inc. v. Alaska Public Utilities Commission .  

                                                                                                                                                       



In  that  case,  a  garbage  collection  company  filed  an  appeal  following  a  final  rate  

                                                                                                                                              



determination, challenging not the final order but only an interim order that had been  

                                                                                                                                             



issued 21 months earlier, which the company alleged "was unauthorized and illegal as  

                                                                                                                                                  

retroactive ratemaking."52  The APUCargued that the company waived its right to appeal  

                                                                                                                                          



the interim order because that order had itself been final and thus appealable within 30  

                                                                                                                                                 



            49         Id.
  



            50
        Far N. Sanitation, Inc. v. Alaska Public Utils. Comm'n                                       , 825 P.2d 867, 870         



(Alaska 1992).              



            51         Id.
  



            52
        Id. at 868-69.  

                                  



                                                                       - 

                                                                       -2266--                                                              7338
  


----------------------- Page 27-----------------------

                                 53  

days of its        issuance.          We observed that "[w]e employ a 'practical' test to determine                        



whether   or   not   an   order   is   a   final   order,"   by   which   we look                       to   whether  the   order  

                                                                                                                               54    We  

"completely   and   finally   disposes   of   the   contested   claims   on   their   merits."                                       



concluded  that  the  interim  order  was  not  a  final,  appealable  order  because  the  

                                                                                                                                     



commission had given the company "time to submit a tariff advice letter and a revenue  

                                                                                                                               

requirements study in support of its rates."55  

                                                           



                      This case is fundamentally different from Far North Sanitation in that here  

                                                                                                                                     



there indisputably  was  a final, appealable order, though limited to one docket.   The  

                                                                                                                                     



question is whether the judicial policies of ripeness or mootness should have prevented  

                                                                                                                            



the superior court from deciding the issue of the RCA's jurisdiction in the context of that  

                                                                                                                                      



appeal, when properly consolidated with an original lawsuit seeking an answer to the  

                                                                                                                                       



same question.  We conclude that under the unique circumstances of this case it was  

                                                                                                                                     



proper for the superior court to decide the jurisdictional issue when it did.  

                                                                                                                         



           B.	        Other  Alleged  Procedural  Deficiencies  Do  Not  Affect  The  

                                                                                                                         

                     Validity Of The Superior Court Appeal.  

                                                                              



                      The RCA and HEA also contend that the superior court erred by deciding  

                                                                                                                              



the appeal before the agency record had been prepared and by allowing the parties to  

                                                                                                                                        



submit affidavits and other materials in support of their jurisdictional arguments that had  

                                                                                                                                      



not first been presented to the RCA. They rely on AS 22.10.020(d), which provides that  

                                                                                                                                      



"hearings on appeal from a final order or judgment of [an] . . . administrative agency . . .  

                                                                                                                                           



shall be on the record unless the superior court, in its discretion, grants a trial de novo,  

                                                                                                                                  



           53        Id.  at 869.       



           54        Id.  at  869-70  (quoting  Mukluk  Freight  Lines,  Inc.  v.  Nabors  Alaska  

                                                                                                                                

Drilling, Inc., 516 P.2d 408, 411 (Alaska 1973)).  

                                                                    



           55        Id. at 870.  

                                



                                                                  - 

                                                                  -2277--	                                                         7338
  


----------------------- Page 28-----------------------

in whole or in part," and on the Appellate Rules, which define the record on appeal as  

"the original papers and exhibits filed with the administrative agency."56  

                                                                                                                                                                                       HEA identifies   



"five affidavits with 486 pages of sworn statements and exhibits" that the Protesting                                                                                                              



Utilities submitted "in support of their jurisdictional brief," only part of which had been                                                                                                                       



submitted to the RCA.                                      



                                  But   the   parties   to   the   AEEC   lawsuit,   an   original   action,   were   not  



constrained by the rules relating to an agency record on appeal.                                                                                                           The superior court                   



allowed themto submit documentary evidence regardless of whether it was in the agency                                                                                                                       



record; presumably it would have allowed the RCA and HEA to do the same.                                                                                                                                         And  



neither the RCA nor HEA points to any relevant evidence in the agency record that they                                                                                                                             



lacked   the   opportunity  to  present   in   support   of   their   own   jurisdictional   briefing.   



Furthermore, even if the superior court had erred in its consideration of evidence, it                                                                                                                                   



                                                                                                                                                                                                57  

would not affect our review, which considers the agency decision de novo.                                                                                                                             



                                  HEA also argues that the Protesting Utilities' appeal from Order 10 was  

                                                                                                                                                                                                           



untimely because it was filed more than 30 days after the order was distributed.  The  

                                                                                                                                                                                                                  



Protesting Utilities counter that the petition for reconsideration HEA filed with the RCA  

                                                                                                                                                                                                                 

tolled  the  time  for  appeal,58                                                  but  HEA  contends  that  because  the  petition  for  

                                                                                                                                                                                                                    



reconsideration addressed only Order 10's discussion of the transmission tariff docket,  

                                                                                                                                                                                                           



                 56               Alaska R. App. P. 604(b)(1)(A).                 



                 57  

                                                                                                                                                                                                                   

                                  Nw. Med. Imaging, Inc. v. State, Dep't of Revenue, 151 P.3d 434, 438  

                                                                                                                                                                                                          

(Alaska 2006).  We note that our own analysis of the jurisdictional issue, infra Section  

                                                                                                                                                     

C, cites no evidence presented only in the superior court.  



                 58               "If a request for agency reconsideration is timely filed before the agency,  

                                                                                                                                                                                                          

the  notice  of  appeal  must  be  filed  within  30  days  after  the  date  the  agency's  

                                                                                                                                                                                                     

reconsideration decision is mailed or otherwise distributed to the appellant, or after the  

                                                                                                                                                                                                                      

date  the  request  for  reconsideration  is  deemed  denied  under  agency  regulations[,]  

                                                                                                                                                                                          

whichever is earlier."  Alaska R. App. P. 602(a)(2).  

                                                                                                                                        



                                                                                                          -2288--                                                                                                7338
  

                                                                                                          - 


----------------------- Page 29-----------------------

it failed to toll the time for appealing Order 10 as it related to the line loss tariff docket.                                                                                                                                                                                               



We reject HEA's contention that Order 10 was two orders for purposes of calculating the                                                                                                                                                                                           

                                                                                                                                                       59  But even if we accepted that argument,  

effect of reconsideration on the time for                                                                                       appeal.                                                                                                                   



we would not conclude that the superior court abused its discretion by relaxing the 30- 

                                                                                                                                                                                                                                                                                



day deadline, given the case's unusual procedural posture and HEA's failure to allege,  

                                                                                                                                                                                                                                                                     



let alone demonstrate, that it suffered any prejudice from an appeal it claims was filed  

                                                                                                                                                                                                                                      

23 days late.60  

                                                  



                      C.	                   By Contract And Statute, The RCA Lacks Authority To Regulate                                                                                                                                                   

                                            Wheeling Rates For Bradley Lake Energy Over The S/Q Line.                                                                                                                                              



                                           No   party   disputes   that   until   January   1,   2014,   the   rates   for   Chugach's  



wheeling services of Bradley Lake energy over the S/Q Line were set by the Services                                                                                                                                                                            



Agreement.    The substantive jurisdictional question before us is whether,                                                                                                                                                                                  upon the   



expiration of the HEA/Chugach lease for the Soldotna Substation, authority to set those                                                                                                                                                                                   



wheeling rates reverted to the RCA.                                                                                       We conclude that such a reading of the Bradley                                                                                         



                                                                                                                                                                                                                                                                                              

Lake Agreements, and of the legislation insulating them from regulatory overview,  



                                                                                                                                                                                                                            

would be contrary to the obvious intent of the Agreements and the statute.  



                      59                    See Richter v. Richter                                                    , 330 P.3d 934, 937 n.2 (Alaska 2014) (rejecting                                                                                     



argument that motions for reconsideration and new trial "did not affect the time for                                                                                                                                                                                             

appealing the jurisdiction issue because they did not address it," because "Rule 204(a)(3)                                                                                                                                                                  

does not extend the time for appealing only those issues that are addressed in post-trial                                                                                                                                                                    

motions; such a rule would needlessly foster piecemeal appeals").                                                                                                                      



                      60                    See Anderson v. State, Commercial Fisheries Entry Comm'n, 654 P.2d  

                                                                                                                                                                                                                                                                           

 1320, 1322 (Alaska 1982) (finding abuse of discretion in superior court's failure to relax  

                                                                                                                                                                                                                                                                           

30-day time limit for appeal when appellant had "far from untenable" position that he  

                                                                                                                                                                                                                                       

was entitled to move for reconsideration before appealing, "[t]he agency ha[d] made no  

                                                                                                                                                                                                                                                                                   

showing that the minimal (seventeen day) delay worked to its disadvantage," and the  

                                                                                                                                                                                                                                                                                 

consequences of denying an appeal were "severe").  

                                                                                                                                        



                                                                                                                                       -2299--	                                                                                                                            7338
  

                                                                                                                                       - 


----------------------- Page 30-----------------------

                                                                                                                             

                     1.	       The parties intended the Services Agreement to govern the rates  

                                                                                                             

                               for wheeling Bradley Lake energy over the S/Q Line.  



                                                                                                                         

                     The  Agreements  are  clear  about  their  intent.                         The  "whereas"  clauses  



                                                                                                                               

 prefacing the Services Agreement lay out the parties' expectation that the State will  



                                                                                                                             

 someday finance construction of an intertie allowing transmission of Bradley Lake  



                                                                                                                                

 energy to the railbelt utilities; meanwhile, they need "some alternative solution to the  



                                                                                                                  

 problem  of  transmitting  or  otherwise  utilizing  Project  power."                                   That  "alternative  



                                                                                                                    

 solution," they agree, is contained in the Services Agreement.  The Services Agreement  



                                                                                                                       

 contemplates that Chugach will wheel the other utilities' energy north from the Soldotna  



                                                                                                                    

 Substation, and it provides that "[t]he applicable wheeling rates shall be established  



                                                                                                                     

 initially, and shall be changed from time to time, only in accordance with the provisions  



                                                                                                                         

 of Appendix A attached hereto."  (Emphasis added.)  The Agreement makes no mention  



                                                                                                                             

 of the HEA/Chugach lease, nor does it contemplate an alternative plan in case the lease  



                                                                                                                               

 is terminated. Indeed, in the Services Agreement the parties (including HEA) agree that  



                                                                                                                                     

 "[t]his Agreement in its entirety reflects the meeting of the minds among the Parties, . . .  



                                                                                                                                

 and there exists no agreement among the Parties that services will be provided to the  



                                                                                                                                 

 Wheeling Utilities for Bradley Lake Energy . . . on terms or conditions other than as set  



                                                                                                                                 

forth in this Agreement ."  (Emphasis added.)  The parties' rights and obligations last for  



                                                                                                                   

 the Service Agreement's term:  50 years from the date the Project began commercial  



                                                                                                           

 operation, unless the Project itself is terminated or the parties invoke other contractual  



                                                                                

 processes, not relevant here, for early termination.  



                                                                                                                          

                     TheRCA's conclusion thatHEA'stariffapplications did not seek to modify  



                                                                                                                              

 the Services Agreement relied on its definition of "Soldotna Substation," which is: "The  



                                                                                                                               

 Soldotna Substation owned and operated by Homer Electric Association, Inc., or any  



                                                                                                                                  

 successor facility at which Bradley Lake Energy can be and is delivered to Chugach at  



                                                                                                                                      

 Chugach's metering point by a Wheeling Utility for services under this Agreement."  



                                                               -3300--	                                                     7338
  

                                                               - 


----------------------- Page 31-----------------------

                                                                                                                              

(Emphasis  added.)               The  RCA  noted  the  parties'  conflicting  interpretations  of  this  



                                                                                                                          

provision:  HEA relied on it "to argue that changing the delivery point from HEA's  



                                                                                                                                

Soldotna Substation to Chugach's Quartz Creek Substation is not a modification of the  



                                                                                                                    

Services  Agreement,"  whereas  the  Protesting  Utilities  asserted  "that  the  'successor  



                                                                                                                     

facility' language in the Services Agreement was meant only to incorporate movement  



                                                                                                                       

of the delivery point from Soldotna Substation to the southern terminus of the proposed  



                                                                                                                               

Southern Intertie." The RCA rejected the Protesting Utilities' argument, explaining that  



                                                                                                                               

when  the  Services  Agreement  was  being  negotiated,  the  prospects  for  funding  the  



                                                                                                                       

southern intertie in the near future were dim, and it was unlikely to have played  a  



                                                                                                                      

prominent part in the parties' expectations. The RCA therefore found "that the successor  



                                                                                                                          

facility  language  was  intended  to  cover  circumstances  where  a  Wheeling  Utility  



                                                                                                                             

delivered its share of Bradley Lake energy to Chugach at a Chugach metering point other  



                                                                                                                                  

than HEA's Soldotna Substation." Because Chugach could no longer accept delivery at  



                                                                                                                                  

the Soldotna Substation, the "successor facility" was necessarily "its metering point in  



                                                                                                                       

Quartz Creek  Substation."                   And  because moving  the  delivery  point from Soldotna  



                                                                                                                       

Substation  to  a  "successor  facility"  was  specifically  contemplated  by  the  Services  



                                                                                                                              

Agreement, HEA's tariff application for imposing new wheeling rates on the S/Q Line  



                                                                                                         

was consistent with the Agreement rather than an attempt to amend it.  



                                                                                                                            

                    We consider the RCA's conclusion to be somewhat beside the point, given  



                                                                                                                  

the obvious purpose of the Agreements and the legislation - to remove the transmission  



                                                                                                                       

pathway from the RCA's rate-setting authority.  Whether Chugach moved its metering  



                                                                                                                               

point for Bradley Lake deliveries to Quartz Creek or another point north would not  



                                                                                                                          

change the fact that the purchasing utilities needed to have their Bradley Lake energy  



                                                                                                                              

wheeled across the S/Q Line and had agreed to a formula for setting those wheeling rates  



                                           

in the Services Agreement.  



                                                               -33 11--                                                     7338
  

                                                               - 


----------------------- Page 32-----------------------

                    Moreover,  we  do  not  find  the  RCA's  interpretation  of  the  Services  

                                                                                                                       



Agreement persuasive.  The Agreement does not explain how a "successor facility" is  

                                             



designated, but there is nothing to suggest that the designation may occur without the  

                                                                                                                                



consent of the affected wheeling utility. Under the RCA's interpretation, Chugach could  

                                                                                                                             



next surrender its Quartz Creek Substation to another entity, moving its delivery point  

                                                                   



another step north and again prompting a change in rates as the new owner of Quartz  

                                                                                                                          



Creek Substation filed a tariff application for wheeling services - services that, under  

                                                                                                                            



the RCA's interpretation, might no longer be covered by the Services Agreement.  We  

                                                                                                                                



note also that the Services Agreement specifically allows the parties to renegotiate their  

                                                                                                                              



contract  five  years  after  the  start  of  commercial  production  and  "by  unanimous  

                                                                                                                   



agreement select an entity other than Chugach . . . to dispatch generation of the Project,"  

                                                                                                                       



(emphasis added) after which the terms and conditions for providing those services may  

                                                                                                                              



be  changed,  but  only  through  negotiation  and  amendment.                                        The  Bradley  Lake  

                                                                                                                            



Agreements evidence an intent throughout that significant changes to the status quo will  

                                                                                                                               



be agreed to by the affected participants or submitted to the BPMC for decision.  

                                                                                                                             



                    Like the superior court, we conclude that the Bradley Lake Agreements  

                                                                                                                  



clearly demonstrate the parties' intent to restrict the setting of wheeling rates along the  

                                                                                                                                



S/Q line to the schedule set in the Services Agreement and therefore to exclude it from  

                                                                                                                             



the  RCA's  jurisdiction.                There  is  nothing  in  the  Agreements  to  indicate  that  the  

                                                                                                                               



expiration of the HEA/Chugach lease would change this fundamental understanding.  

                                                                                                                                    



                    2.	        The  governing  statute  precludes  RCA  authority  over  rate- 

                                                                                                                            

                               setting for the wheeling of Bradley Lake energy over the S/Q  

                                                                                                                              

                               Line.  



                    Alaska Statute 42.05.431(a) undoubtedly grants authority to the RCA to  

                                                                                                                                  



establish "just and reasonable rate[s]" for services that are "subject to the jurisdiction of  

                                                                                                                                  



the commission." Subsection (b) of the same statute provides that "[a] wholesale power  

                                                                                                                           



                                                               -3322--	                                                     7338
  

                                                               - 


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                                                                                                                                          61  

agreement between public utilities is subject to advance approval of the commission."                                                          



                                                                                                                                    

Subsection  (c)  -  added  to  the  statute  specifically  to  address  the  Bradley  Lake  



                                                                                                                             

Agreements  -  begins,  "[n]otwithstanding  (b)  of  this  section,"  and  it  identifies  



                                                                                                                                   

agreements that are not subject to RCA review, at least for a time.  Wholesale power  



                                                                                                                                   

agreements "for the sale of power from a project licensed by [FERC] on or before  



                                                                                                                                  

January 1, 1987," as well as related energy contracts and amendments, "are not subject  



                                                                                                                                   

to review or approval by the commission until all long-term debt incurred for the project  



                 62  

     

is retired." 



                      The parties do not dispute that "all long-term debt incurred for the [Bradley  

                                                                                                                                



Lake Project]" has not yet been retired, nor do they argue that the Services Agreement  

                                                                                                                           



is not a "related contract" that falls within the statute's exclusion from RCA jurisdiction.  

                                                                                                                                               



The import of this express statutory language is reinforced by the legislative history  

                                                                                                                                  



described above. Because of its concerns with regulatory delay, satisfying bondholders,  

                                                                                                                         



and minimizing the cost to ratepayers, the legislature intended that rate-setting for the  

                                                                                                                                         



wheeling of Bradley Lake energy from the Project to the railbelt utilities - a path that  

                                                                                                                                       



necessarily includes the S/Q Line - was not subject to RCA review but rather entrusted  

                                                                                                                               



to the participants' contractual dispute-resolution process, primarily the BPMC.  

                                                                                                                                     



                      In Order 10, the RCA cited AS 42.05.431(e) in support of its jurisdiction,  

                                                                                                                          



concluding that thefinalsentence, "which prohibits [theRCA]fromaltering or amending  

                                                                                                                              



the cost of service formulas established in the Bradley Lake Agreements[,] . . . would not  

                                                                                                                                         



be  required  if  [the  RCA]  were  prohibited  by  AS  42.05.431(c)  from reviewing  the  

                                                                                                                                        



Bradley Lake Agreements for any purpose."   In  response MEA cites to legislative  

                                                                                                                            



testimony by Roger Kemppel, a utilities lawyer, who explained to the House Finance  

                                                                                                                                 



           61         AS  42.05.431(b).  



           62         AS  42.05.431(c)(1).  



                                                                   - 

                                                                   -333-3-                                                               7338  


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Committee that subsection (e) was intended to ensure that utilities in rate proceedings                                                                   



before the APUC would be allowed to include in those rates the "[v]alidated costs                                                                                       

                                                                                                                     63     As an example, Kemppel  

incurred . . . in connection with the related contracts."                                                                                                      



explained that if GVEA "is in on a rate hearing" and "[i]t's paying certain wheeling  

                                                                                                                                                               



cost[s] to Chugach," those costs "should be allowed in the [GVEA] rate case" without  

                                                                                                                                             

being subject to APUC approval.64                                            MEA's explanation is persuasive; the testimony  

                                                                                                                                                              



shows that subsection (e) was intended to emphasize rather than minimize the limitations  

                                                                                                                                                             



on regulatory review.  

                              



                           We conclude that AS 42.05.431(c) was intended to preclude the RCA from  

                                                                                                                                                                         



asserting jurisdiction over rates for services that were covered by the Bradley Lake  

                                                                                                                                                     



Agreements.                     Since  wheeling  services  over  the  S/Q  Line  are  governed  by  the  

                                                                                                                                                                           



Agreements, the RCA's assertion of jurisdiction over the tariff applications at issue on  

                                                                                                                                                                             



this appeal was contrary to the statute and therefore unlawful.  

                                                                                                            



V.            CONCLUSION  

                           We AFFIRMthe superior court's decision reversing the RCA's Order 10.65  

                                                                                                                                                                          



              63            Hearing on H.B. 356 Before the House Fin. Comm., 15th Leg., 2d Sess.                                                                        



(Feb. 5, 1988) (testimony of Roger Kemppel, Gen. Counsel, Alaska Rural Elec. Coop.                                                                                    

Ass'n).  



              64           Id.  



              65           We do not consider the RCA's authority over joint-use agreements under  

                                                                                                                                                                       

AS 42.05.321 as an alternative basis for jurisdiction because it was not raised in the  

                                                                                                                                                                            

superior court.  See Pebble Ltd. P'ship ex rel. Pebble Mines Corp. v. Parnell, 215 P.3d  

                                                                                                                                                                         

 1064, 1083 n.88 (Alaska 2009) ("Issues that are not raised in the superior court are  

                                                                                                                                                                            

waived and  cannot be asserted  on  appeal as grounds  for  overturning a judgment."  

                                                                                                                                                           

(quoting Still v. Cunningham, 94 P.3d 1104, 1111 (Alaska 2004))).  

                                                                                                                                             



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