Electric Company Requesting Approval of the Termination of the Power Purchase Docket No. P-2014-2400828 Agreement With Scrubgrass Generating Company, L.P., (Order entered February 20, 2014) (Scrubgrass As described in that Order: III). Penelec further states that the changing economics of the Scrubgrass facility, and the wholesale power markets generally, have made it necessary for Penelec and Scrubgrass to terminate the current contractual arrangement under the PPA. According to Penelec, the parties have engaged in negotiations regarding the extensive, good faith, arm’s-length terms under which a termination of the PPA would be mutually beneficial and have executed a Settlement and Termination Agreement (Termination Agreement) dated December 9, 2013. Slip Opinion at 3-4. As Penelec acknowledged, the benefits that Scrubgrass III, “unlike will be derived from this Termination Agreement, alternative remedies for any party under the contractual terms of the PPA may only be realized, if at all, following protracted and potentially costly legal at 5. Further, Scrubgrass Id. proceedings.” “wholly Petition as being in the public interest and critical to the viability of support[ed] Penelec’s the at 6. Id. facility.” In other words, we approved the voluntarily-filed agreement achieved between the parties to incorporate a better result achieved between them under current wholesale market conditions; we neither coerced nor compelled either party to act as a result of those changing wholesale market conditions. Under the long-standing principle enunciated in we may neither unilaterally abrogate pricing terms nor impel Freehold, negotiations for a new PPA price under our state ratemaking authority or because market conditions have changed. The dismissal of on the basis of our actions Scrubgrass I ALJ’s in relies on an erroneous interpretation of our actions. Scrubgrass II
Electric Company Requesting Approval of the Termination of the Power Purchase Agreement With Scrubgrass Generating Company, L.P., Docket No. P-2014-2400828 (Order entered February 20, 2014) (Scrubgrass III). As described in that Order: Penelec further states that the changing economics of the Scrubgrass facility, and the wholesale power markets generally, have made it necessary for Penelec and Scrubgrass to terminate the current contractual arrangement under the PPA. According to Penelec, the parties have engaged in extensive, good faith, arm’s-length negotiations regarding the terms under which a termination of the PPA would be mutually beneficial and have executed a Settlement and Termination Agreement (Termination Agreement) dated December 9, 2013. Scrubgrass III, Slip Opinion at 3-4. As Penelec acknowledged, “unlike the benefits that will be derived from this Termination Agreement, alternative remedies for any party under the contractual terms of the PPA may only be realized, if at all, following protracted and potentially costly legal proceedings.” Id. at 5. Further, Scrubgrass “wholly support[ed] Penelec’s Petition as being in the public interest and critical to the viability of the facility.” Id. at 6. In other words, we approved the voluntarily-filed agreement achieved between the parties to incorporate a better result achieved between them under current wholesale market conditions; we neither coerced nor compelled either party to act as a result of those changing wholesale market conditions. Under the long-standing principle enunciated in Freehold, we may neither unilaterally abrogate pricing terms nor impel negotiations for a new PPA price under our state ratemaking authority or because market conditions have changed. The ALJ’s dismissal of Scrubgrass I on the basis of our actions in Scrubgrass II relies on an erroneous interpretation of our actions.
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