Citations
- 84 F.3d 91
Full opinion text
OAKES, Senior Circuit Judge:
Niagara Mohawk Power Corporation (“Niagara”) appeals from a summary judgment entered by the United States District Court for the Northern District of New York, Frederick J. Scullin, Jr., Judge, in favor of Fulton Cogeneration Associates (“Fulton”) on its claim against Niagara for breach of contract. The district court held that Niagara was obligated under the contract to purchase all electricity generated by an electric generating facility operated by Fulton in the Town of Fulton, New York, so long as such quantities were not unreasonably disproportionate to the stated estimates within the contract, and that, as a matter of law, Fulton never produced an amount of electricity that exceeded commercially reasonable expectations. Niagara argues on appeal that the district court should have dismissed or stayed the action until the New York Public Service Commission (“PSC”) ruled on the matter, that the district court erred in granting Fulton summary judgment because several genuine issues of material fact exist, and that the district court erred in not granting summary judgment to Niagara because Niagara acted properly under the Agreement and PSC rules. We find that this case presents material issues that must be determined by a trier of fact, and we therefore reverse and vacate in part the summary judgment in favor of Fulton and remand. In all other respects, we affirm the district court.
BACKGROUND
In 1978, Congress passed the Public Utility Regulatory Policies Act (“PURPA”), 16 U.S.C. § 824, et seq., in an effort to reduce United States dependence on foreign oil by encouraging the development of alternative energy sources. To further this goal, PURPA requires electric utilities to purchase all electricity produced by independent power producers operating so-called Qualifying Facilities (“QF”). See 16 U.S.C. § 824a-3(b); 18 C.F.R. § 292.304. State agencies such as the PSC are empowered to regulate the facilities and approve the contracts covered by PURPA. See 16 U.S.C. § 824a-3; N.Y.Pub. Serv.Law § 66-c(l) (McKinney Sup.1995).
In December 1987, Turner Power Group, Inc., Fulton’s predecessor-in-interest and an independent power producer operating a QF (the “Plant”), entered into a power purchasing agreement (the “Agreement”) with Niagara pursuant to the provisions of PURPA. The first ‘WHEREAS” clause of the Agreement describes the size of Fulton’s Plant:
SELLER will own and operate an electric generating plant ... with a capacity of approximately 47.0 megawatts, and with expected annual production of approximately 392,000 Megawatt-hours (individually and together referred to as “ELECTRICITY”)
Under the terms of the Agreement, Fulton agreed to deliver and Niagara agreed to accept all of the “electricity” produced by the Plant, net of any amounts used by Fulton itself. The Agreement further provides that Niagara must pay for the electricity “on the basis of energy, or kwh, delivered” to Niagara at the rate established in Niagara’s tariff, which- is 6