Petition of Twenty-Four Vermont Utilities

• Decision Date: 25 November 1992
• Docket Number: No. 91-269,TWENTY-FOUR,91-269
• Court: Vermont Supreme Court
• Parties: , Util. L. Rep. P 26,284 In re Petition ofVERMONT UTILITIES, Pursuant to 30 V.S.A. § 248, for a Certificate of Public Good Authorizing Execution and Performance of a Firm Power and Energy Contract with Hydro-Quebec and a Hydro-Quebec Participation Agreement (New England Coalition for Energy Efficiency and the Environment and the Grand Council of the Cree (Quebec), Appellants).

Page 1309

618 A.2d 1309

159 Vt. 363, Util. L. Rep. P 26,284

In re Petition of TWENTY-FOUR VERMONT UTILITIES, Pursuant to

30 V.S.A. § 248, for a Certificate of Public Good

Authorizing Execution and Performance of a Firm Power and

Energy Contract with Hydro-Quebec and a Hydro-Quebec

Participation Agreement (New England Coalition for Energy

Efficiency and the Environment and the Grand Council of the

Cree (Quebec), Appellants).

No. 91-269.

Supreme Court of Vermont.

Nov. 25, 1992.

Richard H. Cowart, Chair.

John H. Marshall and Holly Ernst Groschner of Downs Rachlin & Martin, St. Johnsbury, for petitioners-appellees.

Bonnie Barnes, William K. Sessions, III, James Allen Dumont, and Chris McAnany, Law Clerk (on the brief), of Sessions, Keiner, Dumont, Barnes & Everitt, Middlebury, for intervenors-appellants.

James Volz, Director for Public Advocacy, and Robert V. Simpson, Jr. and John L. Hodge, Sp. Counsel, Montpelier, for appellee Dept. of Public Service.

Before ALLEN, C.J., GIBSON, DOOLEY and MORSE, JJ., and BRYAN, Superior Judge, Specially Assigned.

DOOLEY, Justice.

Following the Public Service Board approval of the contract by twenty-four Vermont utilities to purchase electricity from Hydro-Quebec (HQ), the lead Vermont utilities agreed, subject to any necessary regulatory approval, to waive the right to collect damages in the event that HQ terminated the contract before December 1, 1991. The PSB concluded that the waiver and release required its approval, and after an expedited review, granted it. Some of the intervenors, the New England Coalition for Energy Efficiency and the Environment (NECEE), the Grand Council of the Cree (the Cree) and the National Audubon Society appeal the approval, arguing that the board erred in (1) refusing to reevaluate the merits of the overall purchase contract and admit evidence related to that reevaluation; (2) failing to give adequate notice of the hearings on the waiver and release; and (3) approving the waiver and release, which was not signed by all the Vermont utilities. We affirm. ¹

Many of the facts underlying this appeal are set forth in our decision of October 2, 1992, affirming the Board's approval of the overall purchase contract, In re Twenty-Four Vermont Utilities, --- Vt. ----, 618 A.2d 1295 (1992) [hereinafter Hydro-Quebec I ]. As discussed in that opinion, a license for the export of power pursuant to the underlying sale contract was required from the National Energy Board of Canada (NEB). See id. at ----, 618 A.2d at 1304-05. The license came in an NEB decision issued after the Vermont PSB had closed the evidence in its review of the purchase contract, but the license was conditioned on Canadian environmental review of any facilities required to supply the power to the Vermont utilities under the contract. In order to ensure that circumstances had not changed because of the NEB decision, the Board requested the utilities to file an affidavit from an HQ official stating, in part, that the damage and compensation provisions of the contract were applicable if the NEB export license was voided because of HQ's failure to obtain needed environmental approvals. The utilities filed the affidavit, and the Board relied upon it in refusing to reopen the evidence to consider the NEB decision. We affirmed that ruling. See id. at ----, 618 A.2d at 1306.

On April 3, 1991, while the underlying case was on appeal in this Court, the utilities and HQ proposed an amendment to the purchase contract. The critical provision of the amendment extended by one year, from April 30, 1991 to April 30, 1992, the date by which a party could terminate the contract without penalty or payment of damages if regulatory approvals were "withheld or tendered upon terms unsatisfactory to it." The amendment was negotiated at the insistence of HQ, and the utilities indicated that HQ was likely to terminate the contract by April 30th if the amendment did not extend the date for HQ to act. At a hearing on April 17th, the Board concluded that the amendment required its approval because it affected the value of the overall purchase contract, but that it could not review the amendment as long as the case was pending in this Court. It sought a remand from this Court to consider the amendment. The intervenors opposed the remand, and added that they had new evidence relating to the Board's approval decision and would seek a general reopening of the case.

At that point, the parties to the contract changed their approach, apparently in the hope of avoiding a remand. They withdrew the contract amendment and negotiated a waiver and release which provided:

[I]f one of the parties exercises such termination right between April 30th, 1991 and December 1st, 1991, the other party will waive any right to claim the payment of all costs, damages and expenses specified under Article 1.4 of the said Contract and will release the obligation for such payment.

The Board persisted in its request for a remand, and on the morning of April 26th, a Friday, this Court granted a remand until May 1, 1991 "for the limited purpose of considering the effect of the waiver and release and issues related thereto." The Board had oral argument that afternoon (the 26th) on the effect of the waiver and release and took testimony on the following Monday. The next day, April 30th, it issued its decision approving the waiver and release. The Board analyzed the waiver and release under each of the criteria in 30 V.S.A. § 248 and concluded that it would not change its earlier findings and conclusions with respect to each of these criteria.

Intervenors' first argument is that the Board erred in refusing to allow evidence that showed that the overall contract does not meet the requirements of § 248, contrary to the Board's decision of October 12, 1990 and its post-judgment decision of January 7, 1991. Specifically, intervenors argue that the Board refused to consider evidence that demand-side management (DSM) could have a greater impact than the Board found, that HQ would cancel irrespective of the waiver and release because of political tensions and legal battles in Canada, that the Board's findings on the ability to sell excess HQ power and the cost of alternatives to HQ proved to be wrong, and that the HQ contract would cause environmental damage. In reviewing this and other arguments of the intervenors, we shall assume that the Board was correct that it was required to review the waiver and release under § 248, although that conclusion is vigorously contested by the utilities.

For three reasons, we find intervenors' claim to lack merit. First, intervenors ground their claim on case law which holds that it is error for the Board to refuse to admit relevant evidence in support of a party's theory of its case. See In re Central Vermont Public Service Corp., 141 Vt. 284, 292-93, 449 A.2d 904, 909 (1982). In fact, the Board admitted the evidence in issue, but did not accept it as a basis for its decision. There was no violation of the rule in CVPS.

Further, the scope of the remand from this Court was very narrow, and the Board was bound by the remand instructions. See Coty v. Ramsey Associates, 154 Vt. 168, 171, 573 A.2d 694, 696 (1990). The remand allowed the Board to consider the effect of the waiver and release and issues related thereto. It did not encompass a general reopening of the contract approval.

The final reason is related to the second. Intervenors characterize the utilities' filing for approval of their waiver as a motion to amend a judgment governed by V.R.C.P. 60(b), as adopted by Rule 2.221 of the Board. See Hydro-Quebec I, --- Vt. at ----, 618 A.2d at 1305-06 (Vermont Rules of Civil Procedure apply to Board cases absent a specific rule to the contrary). This is not a proper characterization of the proceedings. Section 248 of Title 30 requires the Board, in certain circumstances, to review a purchase agreement for electric capacity or energy from outside the state. The Board's earlier findings and conclusions on the underlying sale contract had utilized the § 248 criteria. Upon receiving the utilities' waiver filing, the Board decided that the waiver and release was a significant modification of the purchase agreement and could alter its previous conclusions, drawn under the § 248 standards, regarding the contract. Thus, the Board reviewed the incremental effect of the waiver and release on its earlier conclusions. Nothing in that process required the Board to amend its prior approval, which was based on the pre-modification contract, or to reopen the evidence related to the prior approval. Assuming it was allowed by the remand order from this Court, such a reopening would be discretionary. See id., at ----, 618 A.2d at 1305. There was no abuse of discretion in failing to do so here.

Intervenors' second claim is that the hearings in this case were held without allowing the statutory notice period set forth in 30 V.S.A. § 10(b) and, alternatively, without reasonable notice as required by 3 V.S.A. § 809 and 30 V.S.A. § 10(d). The main statute on which intervenors rely requires the Board to give twelve-day notice of all hearings unless certain exceptions apply. See 30 V.S.A. § 10(b). It is undisputed that notice for neither the April 26th nor the April 29th hearings complied, as it was given on April 26th. The Board found, however, that an exception applied. That exception provides that an "evidentiary hearing,...