KLEEN ENERGY SYSTEMS, LLC, et al. v. COMMISSIONER OF ENERGY AND ENVIRONMENTAL PROTECTION et al., SC 19362

Judicial District of New Britain

 

      Utilities; Administrative Agencies; Whether PURA has Jurisdiction Over Contract Dispute Between Generator of Electricity and Electric Distribution Company; Whether Generator Waived its Arbitration Rights.  Kleen Energy Systems, LLC (Kleen), is a power plant owner (generator) and The Connecticut Light & Power Company (CL&P) is an electric distribution company.  Kleen and CL&P are parties to a contract known as the Master Agreement.  The Master Agreement came about as a result of the Energy Independence Act, General Statutes § 16-243m, which was enacted in an effort to reduce certain federally mandated charges that the state’s electricity consumers must pay.  The statute directs the Public Utilities Regulatory Authority (PURA) to identify and order implementation of measures that will reduce the federal charges.  In response, PURA drafted the Master Agreement to serve as a template for a contract between generators and CL&P.  PURA also requested project proposals from generators and ordered CL&P to enter into a contract with each of the generators, including Kleen, whose proposals were accepted.  PURA then approved the executed contracts.  When a dispute arose over the interpretation of a provision in the contract concerning payment calculations, another generator sought a declaratory ruling on the issue from PURA.  Kleen was a party to that proceeding and it appealed PURA’s ensuing declaratory ruling to Superior Court, arguing that PURA had no authority to rule on the matter because the contract requires that all disputed issues be submitted to arbitration.  The trial court remanded the case to PURA for clarification of the parties’ arbitration rights.  PURA ruled that it had authority over the contract dispute under General Statutes § 16-9, which gives it continuing jurisdiction to rescind, reverse or alter its own decisions, and General Statutes § 4-176, which authorizes an agency to issue a declaratory ruling as to the applicability to specified circumstances of a statutory provision, a regulation or a final decision on a matter within the agency’s jurisdiction.  PURA also ruled that Kleen had waived its arbitration right by failing to timely assert it and by participating in administrative proceedings concerning contractual disputes without claiming that the arbitration provision was a bar to PURA’s jurisdiction.  Kleen then filed a second appeal to the Superior Court from PURA’s decision on remand.  The trial court affirmed PURA’s rulings and dismissed the consolidated appeals.  Kleen now appeals to the Supreme Court, arguing that PURA (1) violated its contractual right to have the payment calculation dispute resolved by arbitration, (2) lacked statutory authority to issue the declaratory rulings on the payment calculation dispute and on remand, and (3) exceeded its authority in ruling on the arbitrability of future contractual disputes.  Kleen also challenges the finding that it waived its right to arbitration either by undue delay or by acting inconsistently with that right.