ments entered between CENTRAL MAINE, ... and [MMWEC] dated December 1, 1981, [8] commencing on the date the Point Lepreau Unit 1 is placed in commercial operation.

Central Maine argues that its 1981 Agreement with MMWEC has expired and that the New Brunswick Agreement does not extend the duration of the 1981 Agreement.9 Central Maine states that the 1981 Agreement was effective only until October 31, 1987, with MMWEC having the right of three one-year extensions, until no later than October 31, 1990. Central Maine states that MMWEC exercised its right to only the first of these extensions, so that the 1981 Agreement ended on October 31, 1988. Central Maine acknowledges that the New Brunswick Agreement requires it to offer transmission at "terms no less favourable” than the 1981 Agreement but argues that among those terms is the duration of the 1981 Agreement.

In short, Central Maine argues that its duty to offer transmission under the New Brunswick Agreement is limited to the express terms, including the duration, of the 1981 Agreement, and that the 1981 Agreement and Central Maine's duties under that agreement have thus expired.

We find, however, that the duration of Central Maine's duty to offer transmission under the New Brunswick Agreement is defined by the express terms of the New Brunswick Agreement. Section XII(C) of the New Brunswick Agreement states in pertinent part that:

CENTRAL MAINE'S undertakings and investigations under Sections XII. A. and B. above shall remain in effect unless approval of this Agreement is denied by the National Energy Board or the Maine Public Utilities Commission or has not been approved by the National Energy Board or the Maine Public Utilities Commission by November 1, 1983 or as otherwise may be agreed in writing by the Parties hereto. CENTRAL MAINE'S obligations under Sections XII A and B will terminate upon the termination of this Agreement.

The New Brunswick Agreement is effective until October 31, 1991, unless the parties agree

8 The cited agreement between Central Maine and MMWEC is the agreement referred to above as the 1981 Agreement.

9 Central Maine's request for rehearing at 7-14. 10 Section I of the New Brunswick Agreement states in pertinent part:

Except as otherwise provided herein, this Agreement will remain in effect for a term ending October 31, 1991, 11:59 P.M. Eastern Time, unless the Parties by mutual consent extend the Agreement

to an extension until October 31, 1995.10 Thus, the New Brunswick Agreement extends at least until October 31, 1991, a year longer than the 1981 Agreement, and is still in effect.

As Central Maine notes, the parties to the New Brunswick Agreement knew the terms of the 1981 Agreement and expressly referred to the 1981 Agreement in the New Brunswick Agreement. Thus, Central Maine's argument implies that the parties to the New Brunswick Agreement agreed that until at least 1991, and possibly 1995, Central Maine would offer transmission service for the duration of the 1981 Agreement, i.e., until no later than October 31, 1990. We do not think the parties meant for Central Maine in 1991 or possibly 1995 to offer to supply service until 1990. A more logical conclusion, a conclusion supported by the plain meaning of the New Brunswick Agreement, and the conclusion we reach, is that the New Brunswick Agreement requires Central Maine to offer transmission service at terms no less favorable than the 1981 Agreement for the duration of the New Brunswick Agreement, i.e., until October 31, 1991 or, if the parties agree, October 31, 1995.11

Central Maine next argues that the New Brunswick Agreement was intended to ensure transmission for other parties and not MMWEC.12 Central Maine argues that New Brunswick sought in section XII to facilitate the sale of Point Lepreau power by ensuring transmission for other utilities at the terms already contracted for by MMWEC in the 1981 Agreement. Since MMWEC had already secured its transmission rights, Central Maine argues, New Brunswick could not have intended to ensure transmission for MMWEC.

We disagree. Section XII of the New Brunswick Agreement requires Central Maine to make transmission service available to "various" unspecified utilities buying Point Lepreau power and does not expressly exclude MMWEC or any other utility. Since MMWEC's rights under the 1981 Agreement end at least one year, and possibly five years, earlier than do Central Maine's obligations under the New Brunswick Agreement, we construe New Brunswick's goal in section XII as seeking to ensure at least 270 MW of transmission for any buyers

for an additional period or periods provided that this Agreement shall terminate no later than October 31, 1995, 11:59 P.M. Eastern Time.

11 This conclusion is consistent with New Brunswick's understanding of the New Brunswick Agreement, as evidenced in two letters sent by New Brunswick to MMWEC. MMWEC's opposition to Central Maine's motion for a stay, Attachments 8 and

9.

12 Central Maine's request for rehearing at 10.

Central Maine next argues that, under general principles of contract law, the MobileSierra doctrine and Commission policy regarding the enforcement of contracts, the Commission should enforce the 1988 Letter Agreement executed by MMWEC.14 Central Maine argues that the 1988 Letter Agreement reflects the mutual assent of Central Maine and MMWEC to all of the essential terms of a contract, including the quantity, price and duration of service. Central Maine argues that any hearing on the Proposed MMWEC Agreement should be limited to the only disputed issue not resolved by the 1988 Letter Agreement, a liability limitation and indemnification provision.

We reject Central Maine's argument. The last sentence of the 1988 Letter Agreement states that "[t]his agreement is subject to the successful negotiation of the terms and conditions of a transmission services agreement." Central Maine and MMWEC did not merely "contemplate[] a more detailed agreement," as Central Maine argues, 15 but expressly conditioned their agreement upon "the successful negotiation of the terms and conditions of a transmission services agreement." No such transmission service agreement was reached. Moreover, Central Maine's continued provision of service to MMWEC does not negate the express language of the 1988 Letter Agreement, particularly since Central Maine will nonetheless be compensated for its service at rates the Commission finds just and reasonable. Thus, the 1988 Letter Agreement is unenforceable.

Finally, Central Maine argues that the rates set forth in the 1988 Letter Agreement should be evaluated based on "rolled-in" pricing of all of Central Maine's transmission facilities. On this basis, Central Maine argues that these rates should be accepted without suspension or hearing.

For the reasons stated above, we find the rates set forth in the 1988 Letter Agreement unenforceable and contrary to Central Maine's continuing obligations under the New Brunswick Agreement. Thus, Central Maine's argument about the proper pricing approach for evaluating these rates is irrelevant.

13 This conclusion is also consistent with New Brunswick's understanding of the New Brunswick Agreement. MMWEC's opposition to Central Maine's motion for a stay, Attachment 9.

14 Central Maine's request for rehearing at 14-18. 15 Id. at 15 n.**.

16 Maine Public's request for rehearing at 5-11. Maine Public uses the phrase "incremental form of

As noted above, Central Maine has also moved for a stay of the Commission's order that Central Maine file a revised submittal containing terms no less favorable than the 1981 Agreement. Central Maine seeks a stay of this requirement until 60 days after the issuance of the Commission's order on Central Maine's request for rehearing. Central Maine argues that the revised submittal ordered by the Commission would supplant the rejected filing at a substantially lower rate and would cause irreparable harm to Central Maine. Also, Central Maine argues that, because MMWEC can be protected financially through the Commission's suspension and refund power, a stay would not affect adversely either the public interest or MMWEC's financial interest.

We note that Central Maine was ordered to file a revised submittal by January 28, 1991, an obligation which Central Maine failed to meet. This obligation was not excused by Central Maine's filing, on January 28, 1991, of a motion for a stay of this requirement until 60 days after the issuance of this order. Moreover, we are not persuaded by Central Maine's allegations of irreparable harm. That Central Maine would have to provide transmission service at a rate that, while lower than what Central Maine would like to charge, is consistent with its prior contractual commitment, as discussed in our original order and infra, does not constitute irreparable harm. Central Maine's motion for a stay will therefore be denied. Central Maine shall comply with the Commission's directive no later than ten days from the date of this order.

Docket No. ER90-539-001

On rehearing, Maine Public first contends that, as a joint owner in Wyman 4, it should receive an incremental form of transmission rate, as is charged to the other Wyman participants. 16 Maine Public argues that, based on a principle of joint economies, the generation and transmission of its Wyman entitlement has historically been based on incremental costs. Maine Public contends that, under Central Maine's proposed rates, Maine Public would be the only Wyman 4 owner denied the benefit of an incremental transmission rate. As further evidence of undue discrimination, Maine Public states that Central Maine offers joint, dis

transmission rate" to refer to a rate based on the cost of only certain Central Maine transmission facilities, as opposed to a rolled-in rate based on the cost of all of Central Maine's transmission facilities. Maine Public argues that this incremental form of transmission rate should include the cost of only those path-specific facilities used to provide its service or specified by its

contract.

counted transmission rates to other parties under other agreements.

The Commission rejects these arguments and finds that Maine Public's joint ownership in Wyman 4 does not require that it receive an incremental form of transmission rate. Maine Public is the only joint owner of Wyman 4 that has not joined NEPOOL. The Wyman 4 transmission agreement, which was agreed to by Maine Public, expressly anticipates different transmission rates for NEPOOL members and nonmembers. Section 3 of the agreement states

that:

(c) Charges to Owners for PTF deliveries [17] shall be in accordance with the NEPOOL Agreement, and charges for nonPTF deliveries, if any, by Central Maine over its facilities shall be in accordance with Central Maine's applicable rate from time to time in effect.

(d) If no NEPOOL Agreement is in effect, charges to any Owner whose system is contiguous to that of Central Maine for all deliveries over Central Maine's facilities for the transmission of the Owner's entitlements to its system shall be in accordance with the provisions of Central Maine's applicable rate from time to time in effect, and any Owner whose system is not contiguous to Central Maine's system will be responsible for negotiating transmission arrangements over any intervening systems, but the charge for transmission over Central Maine's facilities will be in accordance with the provisions of Central Maine's applicable rate from time to time in effect.

Thus, Maine Public entered into an agreement allowing different rates for NEPOOL members

17 "PTF" is defined as "pool transmission facilities as defined in the NEPOOL agreement."

18 Public Service Company of New Hampshire, 49 FERC 61,030, at pp. 61,117-18 (1989), reconsideration denied and clarification granted in part, 50 FERC 61,107 (1990), remanded on other grounds, Bangor Hydro Electric Co. v. FERC, Nos. 89-1742 and 90-1109 (D.C. Cir. February 15, 1991); Boston Edison Company, Opinion No. 310, 44 FERC 161,199, at p. 61,708, reh'g denied, Opinion No. 310-A, 45 FERC 61,455 (1988), aff'd on other grounds, Town of Norwood v. FERC, 906 F.2d 772 (1990). These obligations include, for example, a duty to have a specified amount of reserve generating capacity (or incur charges for a deficiency), and a duty to schedule maintenance of generation facilities in coordination with other NEPOOL members. More importantly for the purpose of this order, NEPOOL members must provide other NEPOOL members with, and are entitled to receive, transmission service for power from "pool planned units" at a specified rate. Because it is not a NEPOOL member, Maine Public is not required to provide, or entitled to

and nonmembers. The Commission has approved such a distinction between NEPOOL members and nonmembers because participation in NEPOOL entails certain benefits but also imposes many obligations. 18 Moreover, Maine Public had, and declined, the option to join NEPOOL. Maine Public's joint ownership in Wyman 4 does not entitle it to a lower rate than it bargained for, and does not preclude Central Maine from charging different rates to non-NEPOOL members such as Maine Public compared to NEPOOL members such as the other joint owners. Moreover, the rate discounts in certain Central Maine agreements do not preclude the rates proposed by Central Maine here. As the Commission has noted, New England utilities are routinely eliminating discounts from transmission rates applicable to non-NEPOOL services. 19 The fact that certain preexisting contracts still retain such discounts does not constitute discrimination.20

Maine Public next argues that the Commission has used incremental pricing, instead of rolled-in pricing, for transmission investment when "the transaction prescribes the use of specific facilities or the path over which power must flow."21 In support, Maine Public cites Minnesota Power & Light Company,22 Idaho Power Company,23 and Public Service Company of New Hampshire 24 Maine Public argues that its service is path-specific and thus should be based on incremental pricing.

Maine Public misunderstands the precedent. The Commission's policy is to use rolled-in pricing whenever a transmission system is integrated, except for specific radial transmission

receive, such transmission service at the NEPOOL rate.

19 Northeast Utilities Service Company, 52 FERC 61,097, at p. 61,486 (1990); Public Service Company of New Hampshire, 50 FERC ¶ 61,107, at ་ p. 61,351 (1990), remanded on other grounds, Bangor Hydro Electric Co. v. FERC, Nos. 89-1742 and 90-1109 (D.C. Cir. February 15, 1991).

20 52 FERC at p. 61,486.

21 Maine Public's request for rehearing at 12,

16-17.

22 16 FERC 63,012, at pp. 65,070-71 (1981), aff'd, Opinion No. 155, 21 FERC 61,233 (1982), aff'd sub nom. Cities of Aitkin v. FERC, 704 F.2d 1254, 1257 (D.C. Cir. 1982).

23 Opinion No. 13, 3 FERC 61,108, at pp. 61,295-96, reh'g denied and clarified on other grounds, Opinion No. 13-A, 5 FERC ¶ 61,009 (1978).

24 22 FERC 63,083, at p. 65,269, aff'd and modified, 24 FERC ¶ 61,007, reh'g denied, 24 FERC ¶ 61,255 (1983).

lines that provide no system-wide benefit.25 Rolled-in pricing was not applicable in Minnesota because certain portions of the utility's transmission system in that case were not integrated.26 In Idaho Power, rolled-in pricing was not applicable because the transmission lines at issue were radial lines built especially for the customer and extending "considerably beyond ,,27 In the company's high density service areas.' Public Service Company of New Hampshire, the transmission facilities were integrated and were charged to customers based on rolled-in pricing, thus negating any precedential support from this decision for incremental pricing. Accordingly, Maine Public's argument that its service is path-specific, even if accepted, offers no basis for using incremental pricing instead of rolled-in pricing. The relevant issue is whether Central Maine's transmission system is integrated. Maine Public has made no assertion, and submitted no factual evidence to demonstrate, that Central Maine's transmission facilities are not integrated. Thus, no evidentiary hearing is warranted on this issue.

Maine Public next argues that the Commission overlooked the "subordinate and inferior" nature of its service compared to Central Maine's native, on-system load service.28 Maine Public notes that, under the Proposed Maine Public Agreement, the availability of its service is restricted as follows:

It is understood and agreed that the obligation of [Central Maine] to transmit and deliver BUYER'S purchase shall be subject to there being adequate capacity on CMP's system consistent with the operation of its system under normal, System Emergency, or System Pre-emergency conditions for its own purposes, and that CMP shall not be required to transmit and deliver BUYER'S purchase if doing so would in any way impair the reliability of the CMP system or impair the ability of CMP to provide adequate, reliable and economical service to its customers. Maine Public argues that this level of reliability warrants a lower rate than is charged to firm, on-system native load customers. Maine Public also cites testimony by a Commission trial staff witness endorsing incremental pricing when "the transmission service is allowed

25 E.g., Sierra Pacific Power Co. v. FERC, 793 F.2d 1086, 1088 (9th Cir. 1986); Otter Tail Power Co., Opinion No. 93, 12 FERC ¶ 61,169, at pp. 61,420-21 (1980).

26 793 F.2d at 1090.

27 3 FERC at pp. 61,295-96. See 12 FERC at p. 61,422 (Idaho Power does not apply when radial lines provide service to other customers and are integral to the bulk power system).

28 Maine Public's request for rehearing at 13-16. "

The Commission agrees with the principle that non-firm transmission service warrants a lower rate than firm transmission service.30 For non-firm service, the Commission has implemented this principle by dividing the seller's transmission costs by the seller's system capability (the amount of power the system is capable of supplying), instead of by the seller's system load (the amount of power actually supplied), as is used for firm service.31 This approach essentially excludes the cost of transmission reserves from the rates of the non-firm customers. Using this approach for Central Maine's proposed rates (and estimating Central Maine's system capability as 120 percent of its system load),32 we do not find that Central Maine's proposed rates would produce excess revenues. As to the cited trial staff testimony, Maine Public has not pointed us to, and we are not aware of, any Commission decision approving incremental pricing in the circumstances described in the testimony. Policies endorsed in trial staff testimony do not constitute Commission policy unless and until approved by the Commission, and we are not prepared to adopt such a policy at this time in this proceeding based upon an excerpt from trial staff testimony in a different proceeding involving a different utility.

Maine Public next argues that the Commission ignored the displacement character of its service. 33 Maine Public argues that its Wyman power is delivered north, counter to the southbound flow of Canadian power on Central Maine's transmission lines. Maine Public argues that the relative benefits of this displacement service warrant an incremental rate.

The Commission fails to see a logical connection between the supposed "displacement" nature of Maine Public's service and the use of an incremental rate. Since Maine Public seeks transmission of its Wyman entitlement, its rates should reflect the cost of that service. In pricing transmission service, the Commission uses rolled-in pricing, except in the limited circumstances described above. "Displace

ment" transmission is not one of those limited circumstances and does not justify an incremental rate. 34 If a transmission system is integrated, a customer using that system can rightly be charged a rate that reflects a contribution to the cost of all facilities in the system, regardless of the particular power flows from time to time.

Maine Public next objects particularly to the rolling in of "subtransmission" costs.35 In support, Maine Public notes the statement in the Proposed Maine Public Agreement that transmission service under the agreement is "available only over [Central Maine's] 345 kV and 115 kV facilities."

The Commission's policy is to roll in transmission costs for all voltage levels unless the higher and lower voltage transmission facilities are not integrated.36 Maine Public makes no allegation, and presents no facts indicating, that Central Maine's higher and lower voltage transmission facilities are not integrated. Thus, no hearing is warranted on this issue and no exception from the Commission's policy is appropriate.

Finally, Maine Public challenges the Commission's finding that its service is provided under Central Maine's Rate Schedule 54 and reiterates its argument that its service is governed by a fixed-rate contract embodied in the 1978 letter.37 Maine Public raises several points in support of its argument.

First, Maine Public asserts that Central Maine did not "rely, even in part, on Rate Schedule No. 54 for its purported contractual authority to increase" Maine Public's rates.38 However, to our understanding, Central Maine's position is that: the service is provided under Central Maine's Rate Schedule 60; the rate allowed under Rate Schedule 60 is "Central Maine's applicable rate from time to time in effect;" and, the present "applicable rate" is the rate set forth in Rate Schedule 54. Thus, Central Maine does rely, in substance if not form, on Rate Schedule 54. In any event, even if Central Maine's argument implies a lack of

34 In a sense, Maine Public's "displacement" theory contradicts its "path-specific" argument. The displacement argument assumes that Maine Public receives its Wyman power by diverting power southbound from Canada to Central Maine's transmission system. The path-specific argument rests on the contrary premise that Maine Public receives its Wyman power by direct transmission north on Central Maine's transmission lines connected to Wyman 4.

35 Maine Public's request for rehearing at 22-23.

We remain convinced that the 1978 letter is not a fixed-rate contract. The 1978 letter is a one-page letter on Central Maine letterhead, not executed by Maine Public, and addressing virtually none of the terms involved in such service, including duration and reliability. Moreover, the text of the 1978 letter contains no indication that the letter represents Central Maine's acceptance of an offer by Maine Public. While these factors are not necessary to the formation of a contract, they are indicia that no fixed-rate contract was intended by the parties. In this case, with no countervailing indicia that a fixed-rate contract was intended, the conclusion that best fits the evidence is that no fixed-rate contract was intended. We particularly are unpersuaded by Maine Public's apparent assertion that Central Maine intended by this brief letter to waive its right to have proposed rate changes reviewed under the just-and-reasonable standard and instead intended to charge the specified rate in perpetuity absent a showing that the rate would adversely affect the public interest. A waiver must be clearly established and will not be inferred from doubtful or equivocal acts or language. This requirement is particularly important in cases involving an alleged waiver of a party's right to have proposed rate changes reviewed under the just-and-reasonable standard, since the Mobile-Sierra public interest standard is "almost insurmounta