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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.  

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         303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  


                  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.;                                 )  


d/b/a  MUNICIPAL  LIGHT  &                          )  

POWER;  HOMER  ELECTRIC                             )  

ASSOCIATION,  INC.;  ALASKA                         )  


OF  ALASKA  ATTORNEY                                )  

GENERAL'S  OFFICE,                                  )  

REGULATORY  AFFAIRS  AND                            )  

PUBLIC  ADVOCACY  SECTION,                          )  


                          Appellees.                )  



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  



                                             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.                        


           A.         Facts  


                       1.        The Bradley Lake Hydroelectric Project  


                      The        Bradley          Lake        Hydroelectric             Project         (the      Project),          located  



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  



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),  


           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                                                                                                                                                                                                                                                   


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  




                                 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                         


                                                                                                        -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,                                                                                                                                           


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  




                                      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                                                                             


became a reality.                                                                                                                                                                                  

                                            In 1982 the Power Authority assumed responsibility for moving it  



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



                                                        - "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-----------------------


the APUC's          approval.          



                     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                                                            


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  


           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.  



                                                                 - 1100--                                                       7338


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

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


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]  





                        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-----------------------


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  


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   


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  



              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  




                    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  



                                 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  




                                 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  



                         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  



                                                                                                                                                            - 1199--                                                                                                                                                7338


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


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


timely is a question of law,"                                                                                                      

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




is reviewed for abuse of discretion. 


                      "Questions ofcontract interpretationaregenerallyquestions oflawthatwill  



be reviewed de novo." 


                      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                                                                                                        



                     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  



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  



                     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               


               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                                                                                                                                                                          


                                            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  



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



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.

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

(Alaska 1992).              

            51         Id.

        Id. at 868-69.  



                                                                       -2266--                                                              7338

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


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                                                                                                                                   


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).                 



                                  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  



                    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


----------------------- Page 33-----------------------


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  



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  

----------------------- Page 34-----------------------

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.                                                                                    


              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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