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Cec Energy Co. v. Public Service Commission of

filed: December 20, 1989.

CEC ENERGY CO., INC.
v.
PUBLIC SERVICE COMMISSION OF THE VIRGIN ISLANDS, APPELLANT



On Appeal from the District Court for the Virgin Islands (St. Croix), D.C. Civil Action No. 88-322.

Higginbotham, Stapleton and Scirica, Circuit Judges.

Author: Scirica

Opinion OF THE COURT

Scirica, Circuit Judge.

This is an appeal from a grant of summary judgment in favor of CEC Energy Co., Inc. ("CEC"). CEC had petitioned the district court to review an order of the Public Services Commission of the Virgin Islands ("PSC"), in which PSC claimed jurisdiction to investigate a contract between CEC and the Virgin Islands Water & Power Authority ("WAPA"). The district court held that PSC lacked authority to review the contract. CEC Energy Co. v. Public Services Commission, Civil No. 88-322 (D.V.I. May 2, 1989). We decline to decide whether the district court correctly construed the power of PSC because we find that the PSC order is not ripe for judicial review.

I.

WAPA is a public corporation and autonomous government instrumentality, created in 1964 to develop systems that would alleviate the acute and chronic water and electric supply problems affecting the Virgin Islands. V.I.Code Ann. tit. 30, §§ 101, 103, 105 (1975 & Supp. 1989). By the mid-1980's, the energy problems of the islands remained unresolved, however, as WAPA faced mounting financial and technical impediments to its operation. On May 23, 1985, WAPA and CEC entered into a twenty-year contract under which CEC agreed to construct and maintain a cogeneration facility and to sell electricity and steam to WAPA.*fn1 In exchange, WAPA agreed to purchase 140,000,000 kilowatt hours of electricity and 630,000,000 pounds of steam per year, which represented sixty percent of the energy needs of St. Croix and twenty-five per cent of the energy needs of the entire territory. WAPA agreed to pay 4.5 cents per kilowatt hour of electricity and two dollars per thousand pounds of steam, the price to be adjusted each year in accordance with a designated index.

PSC is the agency charged with ensuring that public utilities operating in the Virgin Islands provide safe and adequate services at rates that are just and reasonable. V.I.Code Ann. tit. 30, §§ 2, 20 (1975).*fn2 According to PSC, it had reason to believe that implementation of the WAPA/CEC contract would result in higher costs for WAPA, which could threaten WAPA's financial viability and result in rate increases for consumers. Therefore, in July 1985, PSC established Docket No. 288 to determine its authority to investigate the terms of the contract, and ordered WAPA to submit a brief on the issue.*fn3 WAPA requested and received several extensions of time in which to respond to PSC's request. CEC was informed of, but did not object to, the extensions. Finally, on October 1, 1987, WAPA submitted its brief.*fn4 Counsel for PSC and CEC responded in writing to the issues raised by WAPA.

On June 3, 1988, PSC issued Order No. 14/1988, which stated its finding that PSC "has jurisdiction to investigate the contract . . ." between CEC and WAPA. CEC filed a petition requesting reconsideration of the order. Because PSC did not respond within the thirty-day period provided by statute, the petition was deemed denied. See V.I. Code Ann. tit. 30, § 33 (1975).

CEC appealed the PSC order to the United States District Court for the Virgin Islands before PSC began its investigation. In granting CEC's motion for summary judgment, the district court held that at the time the parties entered the contract, PSC's authority over WAPA was limited to the power to fix rates. The district court did not address the question whether the PSC order was ripe for judicial review.

II.

Under Title 30 of the Virgin Islands Code, the district court has jurisdiction to hear appeals filed by any public utility, person, or corporation affected by a final order of PSC. V.I.Code tit. 30, § 34 (1975). The term "final order" is not defined in Title 30. However, the Supreme Court has considered the meaning of the term on a number of occasions involving various statutes that provide for judicial review of "final" agency actions. See, e.g., Bell v. New Jersey, 461 U.S. 773, 76 L. Ed. 2d 312, 103 S. Ct. 2187 (1983) ("final action" under § 195 of Elementary and Secondary Education Act); FTC v. Standard Oil Co., 449 U.S. 232, 66 L. Ed. 2d 416, 101 S. Ct. 488 (1980) ("final action" under § 10(c) of Administrative Procedure Act). Moreover, the Court's treatment of the finality issue has involved an inquiry into the broader question of whether a given action is ripe for judicial review. See Solar Turbines Inc. v. Seif, 879 F.2d 1073, 1080 (3d Cir. 1989) (Supreme Court's finality standard incorporates ripeness standard) (citing FTC v. Standard Oil, 449 U.S. 232, 66 L. Ed. 2d 416, 101 S. Ct. 488 (1980)); C. Wright, A. Miller, E. Cooper, E. Gressman, 16 Federal Practice and Procedure § 3942 at 314-15 (1977 & Supp. 1989) (finality requirement rests on same foundation as ripeness doctrine). Although the Supreme Court's decisions interpreting federal statutes do not bind us when we are called upon to construe Virgin Islands law, we find their reasoning convincing and, in the absence of evidence that a contrary legislative intent underlies Title 30, we adopt that reasoning. Virgin Islands Conservation Society, Inc. v. Virgin Islands Board of Land Use Appeals, 881 F.2d 28, 35 (3d Cir. 1989); cf. West Penn Power Co. v. United States Environmental Protection Agency, 860 F.2d 581, 584 (3d Cir. 1988) (it makes sense to define finality under Clean Air Act as it is defined in administrative law generally).

Application of the ripeness doctrine prevents the entanglement of the courts in administrative policy disagreements and protects the agencies from judicial interference until decisions are formalized and their effects felt in a concrete way. Abbott Laboratories v. Gardner, 387 U.S. 136, 148, 87 S. Ct. 1507, 18 L. Ed. 2d 681 (1967). Awaiting the termination of agency proceedings may obviate all need for judicial review. Standard Oil, 449 U.S. at 244 n. 11 The doctrine of ripeness requires an evaluation of the fitness of the challenged issue for review and the hardship to the parties of withholding judicial consideration. Abbott Laboratories, 387 U.S. at 148.

Final agency actions involving purely legal questions satisfy the fitness requirement. Id. at 149. However, not all decisions that represent an agency's last word on an issue are final for purposes of review. Texas v. United States Department of Energy, 764 F.2d 278, 282 (5th Cir.), cert. denied, 474 U.S. 1008, 88 L. Ed. 2d 463, 106 S. Ct. 531 (1985). Rather, finality is to be interpreted in a pragmatic way. Abbott Laboratories, 387 U.S. at 149. A number of factors must be considered in assessing finality: 1) whether the decision represents the agency's definitive position on the question; 2) whether the decision has the status of law with the expectation of immediate compliance; 3) whether the decision has immediate impact on the day-to-day operations of the party seeking review; 4) whether the decision involves a pure question of law ...


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