Afton Energy, Inc. v. Idaho Power Co.
| Decision Date | 31 March 1992 |
| Docket Number | No. 18713,18713 |
| Citation | 122 Idaho 333,834 P.2d 850 |
| Parties | , Util. L. Rep. P 26,255 AFTON ENERGY, INC., a Corporation, Afton Generating Company, LP, a Delaware Limited Partnership, Pacific Star, Inc., a Corporation, Plaintiffs-Counterdefendants-Appellants-Cross-Respondents, v. IDAHO POWER COMPANY, Defendant-Counterclaimant-Respondent-Cross-Appellant. Boise, December 1991 Term |
| Court | Idaho Supreme Court |
Orndorff, Peterson & Hawley, Boise, for appellant. Owen H. Orndorff, argued.
Evans, Keane, Koontz, Boyd, Simko & Ripley, Boise, for respondents. Bruce C. Jones, argued.
This is a contract case involving the interpretation of portions of a Power Sales Agreement (the Agreement) between Afton Energy, Inc. (Afton) and Idaho Power Company (Idaho Power). We decline addressing whether res judicata or collateral estoppel is applicable to a decision of the Public Utilities Commission (PUC) interpreting the Agreement, but do address whether the trial court was correct in granting summary judgment against Afton on its claims for violation of this state's antitrust laws.
We conclude that the decision of the PUC did not foreclose the trial court's interpretation of the Agreement, but we interpret the portions of the Agreement that are at issue differently than the trial court did. We also hold that a violation of this state's antitrust laws cannot be predicated on an alleged conspiracy of a corporation, its officers, directors, and agents.
THE BACKGROUND AND PRIOR PROCEEDINGS.
The background of this case begins with three prior decisions of this Court. Afton Energy, Inc. v. Idaho Power Co., 107 Idaho 781, 693 P.2d 427 (1984) (Afton I/III ); Afton Energy, Inc. v. Idaho Power Co., 111 Idaho 925, 729 P.2d 400 (1986) (Afton IV ); and Afton Energy, Inc. v. Idaho Power Co., 114 Idaho 852, 761 P.2d 1204 (1988) (Afton V ).
In Afton I/III, the Court upheld the PUC's order directing Idaho Power to enter into the Agreement pursuant to the Public Utility Regulatory Policies Act of 1978 (PURPA). The Agreement was for a term of thirty-five years and required Afton to sell Idaho Power all "firm energy" and "dispatchable capacity" produced at Afton's wood-fired cogeneration facility. Firm energy is electricity and is measured in kilowatt-hours. Dispatchable capacity is the ability of a facility to deliver electricity and is measured in kilowatts.
By the Agreement, Afton agreed to provide Idaho Power not less than 50,471,239 kilowatt-hours of firm energy and 8,864 kilowatts of dispatchable capacity each year.
During the first year of Afton's operation under the Agreement--March 1, 1984, through February 28, 1985--Afton provided 19,440,000 kilowatt-hours of firm energy and 3,414 kilowatts of dispatchable capacity. This was approximately thirty-nine percent of the firm energy and dispatchable capacity called for by the Agreement. The Agreement required Idaho Power to pay Afton for the amount of firm energy Afton actually delivered to Idaho Power during the year. The Agreement also required Idaho Power to pay for the entire amount of dispatchable capacity--8,864 kilowatts--that Afton agreed, but failed to provide during the first year.
Appendix B to the Agreement provided:
APPENDIX "B"
ADJUSTMENT OF CAPACITY PAYMENTS IN THE
EVENT OF TERMINATION OR REDUCTION
(A) This Appendix shall be applicable in the event there is a Contract Termination or a Capacity Sale Reduction
(B) The parties agree that the amount of the payment which [Idaho Power] is to make to [Afton] for Capacity is based on the agreed value to [Idaho Power] of [Afton's] performance of its obligation to provide Dispatchable Capacity during the Term of the Agreement. The parties further agree that in the event [Idaho Power] does not receive such full performance by reason of a Contract Termination or a Capacity Sale Reduction, (1) [Idaho Power] shall be deemed damaged by reason thereof, (2) it would be impracticable or extremely difficult to fix the actual damages to [Idaho Power] resulting therefrom, (3) the reductions, offsets and refund payments as provided in this Appendix, as applicable, are in the nature of adjustments in Capacity prices and liquidated damages, and not a penalty, and are a reasonable endeavor by the parties to estimate a fair compensation for the reasonable losses that would result from such termination or reduction.
(C) [Afton] shall be invoiced by [Idaho Power] for all refund payments due under this Appendix and shall pay such amounts to [Idaho Power] within thirty (30) days after the invoice date.
(D) [Idaho Power] shall have the right to offset any amount due it against any present or future payments due [Afton].
Except in the event of Force Majeure as defined in Article VIII of this Agreement, if [Afton] fails to provide the amount of energy and Capacity specified in Article III, such failure shall be grounds for Contract Termination or a Capacity Sale Reduction in accordance with the following:
(A) [Idaho Power] may immediately suspend or reduce the Capacity payments to [Afton] for a probationary period not to exceed twelve (12) months. Such reduction or suspension of payments will be calculated so that [Idaho Power] will recover the total amount of the overpayments made to [Afton] in equal monthly amounts over the term of the probationary period. All such amounts recovered by reduction or suspension will be retained by [Idaho Power].
(1) If, during the probationary period [Afton] meets or satisfies [Idaho Power] that it can meet its obligation to supply Capacity, [Idaho Power] shall, following the probationary period, reinstate the Capacity payment.
(2) If [Afton] fails to satisfy its obligation to supply Capacity during the probationary period, [Idaho Power] may permanently derate the Capacity appropriately or terminate the Capacity purchases if no Capacity is supplied during the probationary period.
(B) In the event of a Capacity Termination [Afton] shall refund to [Idaho Power] an amount equal to seventy-five percent (75%) of the difference between the Capacity payments already paid by [Idaho Power] (based on the original term of the Agreement) and the total Capacity payments which would have been paid if the Capacity Price had been based on the period from the Operation Date to the actual date of termination.
(C) If at any time, based on appropriate tests, studies or prior performance, [Idaho Power] determines that [Afton] will be unable to provide the agreed-upon Capacity, [Idaho Power] may immediately reduce the Capacity or terminate Capacity purchases.
(D) REPLACEMENT POWER
If, as a result of any of the events specifically defined as exceptions to Force Majeure in Article VIII [], [Afton] will be unable to meet its obligation to provide the Capacity, [Afton] will notify [Idaho Power] and [Idaho Power] may purchase power from another source to replace the power [Afton] had agreed to provide. Such replacement power will, for purposes of satisfying [Afton's] Capacity obligation, be deemed to have been delivered by [Afton]. [Afton] will reimburse [Idaho Power] for the difference, if any, between the amount which [Idaho Power] would have paid to [Afton] and the actual cost of the replacement power, including losses, wheeling and load factoring. [Idaho Power] will bill [Afton] monthly for the reimbursement amount. Unless otherwise agreed, [Idaho Power] will not be obligated to attempt to procure replacement power for a period longer than six months. In no event will [Idaho Power] pay [Afton] for Capacity not actually provided by [Afton].
(E) The foregoing remedies are not exclusive and [Idaho Power] reserves all rights it may have against [Afton] as a result of [Afton's] failure to perform this Agreement.
On February 1, 1985, one month before the end of the first year of Afton's performance under the Agreement, Idaho Power sent Afton a letter, which included the following statements:
Based on the facility's performance to date, it is now clear that Afton will not provide the energy and capacity it agreed to provide. Therefore, pursuant to the terms of the Agreement, it is [Idaho Power's] intention to reduce the monthly payments to be made Afton.
This adjustment to the payment will be in accordance with paragraph B-2(A) of Appendix B to the Agreement. Under that section, [Idaho Power] is electing to place Afton on probation for a twelve-month period commencing March 1, 1985. During this probationary period, payments to Afton will be reduced to correspond to the average kilowatts actually provided during the March 1, 1984 to March 1, 1985 period and to recover, in twelve equal monthly deductions, the total amount of overpayments made to Afton during the March 1, 1984 to March 1, 1985 period.
Afton and Idaho Power tried unsuccessfully for several weeks to resolve how to deal with Afton's failure to provide all the firm energy and dispatchable capacity required by the Agreement during the first year of Afton's operation. Finally, on May 6, 1985, Idaho Power paid Afton for the first month of Afton's operation during the second year. Idaho Power paid Afton for the firm energy Afton delivered in March 1985, plus a reduced payment for dispatchable capacity as specified in Appendix B-2(A) of the Agreement, compensating Afton for the average monthly amount of dispatchable capacity Afton provided during the first year. From the total of these amounts, Idaho Power deducted one-twelfth of the overpayment Idaho Power made to Afton for dispatchable capacity during the first year. Idaho Power explained the calculation of this payment in a schedule that accompanied the letter transmitting the payment:
Calculation of March 1985 payment including reduced capacity payment and prior
period overpayment recoveries.
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