Mass. Inst. of Tech. v. Mass. Dept. of Pub. Util.

• Decision Date: 27 August 1996
• Docket Number: Civil Action No. 96-11044-RCL.
• Citation: 941 F.Supp. 233
• Parties: MASSACHUSETTS INSTITUTE OF TECHNOLOGY, Plaintiff, v. MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES, Mary C. Webster, Janet G. Besser, John Howe, Timothy Shevlin, Jr., and Cambridge Electric Light Company, Defendants.
• Court: U.S. District Court — District of Massachusetts

Page 233

941 F.Supp. 233

MASSACHUSETTS INSTITUTE OF TECHNOLOGY, Plaintiff, v. MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES, Mary C. Webster, Janet G. Besser, John Howe, Timothy Shevlin, Jr., and Cambridge Electric Light Company, Defendants.

Civil Action No. 96-11044-RCL.

United States District Court, D. Massachusetts.

August 27, 1996.

Alan K. Posner, Rubin & Rudman, Boston, MA, Sara D. Schotland, Cleary, Gottlieb, Steen & Hamilton, Washington, DC, for Plaintiff.

H. Reed Witherby, Boston, MA, for Defendants.

Paul F. Denver, Rossman, Rossman & Eschelbacher, Boston, MA, for the American Forest & Paper Institute ("AF & PA").

Paul F. Denver, Rossman, Rossman & Eschelbacher, Boston, MA, for Industrial Consumers, "AMOCO", Atlantic Richfield, Co., Chevron Corporation, Electricity Consumers Resource Council ("ELCON"), American Iron and Steel Institute ("AISI"), Ch mical Manufacturers Association ("CMA"), Council of Industrial Boiler Owners ("CIBO"), the American Forest & Paper Institute ("AF & PA"), Amici.

David S. Rosenzweig, Stephen H. August, Keohane & Keegan, Boston, MA, Joseph M. Oliver, Jr., Amy J. Mauser, Crowell & Moring, Washington, DC, for Cambridge Electric Light Co.

OPINION

LINDSAY, District Judge.

The plaintiff, Massachusetts Institute of Technology ("MIT") brings this claim against the Massachusetts Department of Public Utilities and certain of its officials (collectively referred to hereinafter as "MDPU") and Cambridge Electric Light Company ("Cambridge Electric"), alleging that the MDPU's approval of Cambridge Electric's stranded cost recovery charges to MIT violates the Public Utility Regulatory Policies Act of 1978 ("PURPA"). MDPU moves to dismiss the complaint on the ground that this court lacks subject matter jurisdiction or, in the alternative, that the Eleventh Amendment precludes this action. Cambridge Electric moves to dismiss the complaint on the ground that this court lacks subject matter jurisdiction. All of the defendants contend, as an alternative to their jurisdictional arguments, that if the court concludes that it has jurisdiction, it should nevertheless abstain under either the Younger or Burford doctrine. (MDPU also argues that abstention is appropriate under the Colorado River abstention doctrine.) The defendants also contend that the amended complaint fails to state a claim upon which relief can be granted.

For the reasons set forth below, the court concludes that there is no subject-matter jurisdiction over MIT's claim. Therefore, the defendants' motions to dismiss are GRANTED.

I. Facts

The following statement of facts, extracted from the various papers filed by the parties, does not appear to be in dispute.

Cambridge Electric is a public utility, regulated by MDPU and engaged in the production, distribution and sale of electricity in Cambridge, Massachusetts.

MIT historically has been one of Cambridge Electric's largest all-requirements retail customers for electric service. In September, 1995, MIT completed construction of its own electricity-generating plant and began producing sufficient electricity to meet most of its requirements. With construction of this facility, known as a cogeneration plant, MIT was designated a "qualifying facility" ("QF") under PURPA.¹

In May, 1994, before construction had been completed on the plant, MIT petitioned MDPU to establish rates for services that MIT would still require from Cambridge Electric, namely standby, maintenance, and supplemental service. For its part, Cambridge Electric proposed a new "Customer Transition Charge" ("CTC") which it proposed to apply to all former all-requirements customers that turned to alternate sources for their power needs. The CTC was designed to cover Cambridge Electric's "stranded costs" — that is, the investment in existing facilities which may be unrecovered when a customer discontinues all-requirement purchases of power. As proposed, the CTC applied to any customer above a specified demand level that ceased to be an all-requirements customer. Although there are seven customers of Cambridge Electric that conceivably could fall into the category defined for the CTC, only MIT currently is affected by the charge.

The MDPU held hearings on MIT's petition and Cambridge Electric's proposed rates and charges and, in an order issued September 29, 1995, approved the CTC with a slight variation. In re Cambridge Electric Light Co., 164 PUR 4th 69, 1995 WL 634599 (Mass. D.P.U.1995). MIT appealed the MDPU order to the Supreme Judicial Court of Massachusetts in October, 1995. The appeal challenges, among other things, the propriety of the CTC. As of this writing, the appeal is still pending before the Supreme Judicial Court.

Section 210(a) (16 U.S.C. § 824a-3(a)) of PURPA requires the Federal Energy Regulatory Commission ("FERC") to prescribe rules for the encouragement of cogeneration and small power production. Section 210(f) of the Act (16 U.S.C. § 824a-3(f)) requires state regulatory authorities and nonregulated electric utilities to implement the rules prescribed by FERC. Section 210(h) of the Act (16 U.S.C. § 824a-3(h)) provides that, if a state regulatory authority or a nonregulated electric utility fails to implement FERC's rules, FERC may institute an enforcement action. Section 210(h) also permits a QF to petition FERC to initiate an enforcement action; and if FERC fails to do so within sixty days of the filing of the petition, the section provides that the QF may bring an action in a federal district court to require the recalcitrant state authority or nonregulated electric utility to comply with Section 210(f)'s requirement that FERC's rules be implemented. In this case, the particular FERC rule that MIT claims MDPU has failed to implement is set forth at 18 C.F.R. § 292.305. It requires that rates established for QFs "(i) [s]hall be just and reasonable and in the public interest; and (ii) [s]hall not discriminate against any qualifying facility in comparison to rates for sales to other customers served by the electric utility." 18 C.F.R. § 292.305(a)(1).

As a QF, therefore, MIT has a statutory right to request enforcement of § 210(f) by FERC and to petition a federal district court for such enforcement if FERC declines to bring an enforcement action. This is what MIT has done in this case.

On January 5, 1996, MIT petitioned FERC to enforce § 210(f) against MDPU. MIT argued in its petition that the MDPU order approving the CTC, among other things, is inconsistent with PURPA's goal of encouraging non-utility electric generation. FERC disagreed and refused to bring an enforcement action. Massachusetts Institute of Technology, 74 FERC 61,221 (February 29, 1996). MIT now asks this court to require MDPU to implement FERC's rules by prohibiting the collection of the CTC.

II. Applicable Statutes

16 U.S.C. § 824a-3(a):

Not later than 1 year after November 9, 1978, the [Federal Energy Regulatory] Commission shall prescribe, and from time to time thereafter revise, such rules as it determines necessary to encourage cogeneration and small power production, ... which rules require electric utilities to offer to —

(1) sell electric energy to qualifying cogeneration facilities ...

(2) purchase electric energy from such facilities.

Such rules shall be prescribed, after consultation with representatives of Federal and State regulatory agencies having rate-making authority for electric utilities, and after public notice and a reasonable opportunity for interested persons ... to submit oral as well as written data, views, and arguments....

16 U.S.C. § 824a-3(f):

(1) Beginning on or before the date one year after any rule is prescribed by the Commission under subsection (a) of this section or revised under such subsection, each State regulatory authority shall, after notice and opportunity for public hearing, implement such rule (or revised rule) for each electric utility for which it has ratemaking authority.

16 U.S.C. § 824a-3(h):

(2)(A) The Commission may enforce the requirements of subsection (f) of this section against any State regulatory authority or nonregulated electric utility....

(B) Any electric utility, qualifying cogenerator, or qualifying small power producer may petition the Commission to enforce the requirements of subsection (f) of this section as provided in subparagraph (A) of this paragraph. If the Commission does not initiate an enforcement action under subparagraph (A) against a State regulatory authority or nonregulated electric utility within 60 days following the date on which a petition is filed under this subparagraph with respect to such authority, the petitioner may bring an action in the appropriate United States district court to require such State regulatory authority or nonregulated electric utility to comply with such requirements, and such court may issue such injunctive or other relief as may be appropriate....

III. Analysis: Jurisdiction under § 210(h) of PURPA

As is clear from reading the statutory excerpts above, the United States district courts have limited jurisdiction over plaintiffs' claims to enforce the requirements of rules promulgated by FERC under PURPA. Specifically, a district court, upon petition of an "electric utility, qualifying cogenerator, or qualifying small power producer," may "require [a] State regulatory authority or nonregulated electric utility to comply with" the requirements of subsection (f) of § 210 of PURPA. 16 U.S.C. § 824a-3(h). The district court is vested with this enforcement authority only if, after sixty days, FERC declines to bring an enforcement action against a noncomplying state regulatory authority or nonregulated utility. Id. In this case, this particular jurisdictional requirement has been met: MIT petitioned FERC to bring an enforcement action against MDPU and FERC declined to do so. Massachusetts Institute of Technology, 74 FERC 61,221 (February 29, 1996).

At oral argument, MIT identified the regulation...