I AM, YOUR HONOR. MAY IT PLEASE THE COURT. MY NAME IS CHRIS COUTROULIS, AND I REPRESENT FLORIDA POWER CORPORATION. THAT IS FPC, IN THE CASE INVOLVING DADE COUNTY. FPC HAS AUTHORIZED ME TO REPRESENT THAT IT IS ADOPTING MY ARGUMENT IN THE CONSOLIDATED CASE, INVOLVING LAKE COGEN AS WELL. THE DOCTRINE OF DECISION ALPHINALITY PRECLUDED IT FROM TAKING OVER IN THE DECLARATORY STATEMENT. THAT PETITION ASKED THE PSC TO INTERPRET ITS 1981 ORDER REGARDING CERTAIN CONTRACTS AND THE PSC'S RULES INCORPORATED UNDER THEM. UNDER ITS APPROVED CONTRACTS, FLORIDA POWER PURCHASES ELECTRICITY FROM DADE, LAKE AND OTHER COGENERATORS AND THE PAYMENTS IT MAKES ARE RATE PAYERS. IT HAS BEEN BANDIED FROM PILLAR TO POST --

TELL US HOW FAR THINGS HAVE GONE IN THE TRIAL COURT IN THE CIRCUIT COURT. IN OTHER WORDS HOW FAR ALONG DID THE PROCEEDINGS GET THERE, IN TERMS OF TRIAL COURT RULINGS ON ISSUES?

YOUR HONOR, I AM NOT COUNSEL FOR FLORIDA POWER AND LIGHT BUT MY UNDERSTANDING IS THAT CASE WAS TRIED TO A JUDGMENT AND APPEALS HAVE BEEN FILED IN THAT CASE. WITH RESPECT TO THE DADE CASE, WHERE I REPRESENT THE FLORIDA POWER, THE PARTIES, AS THE BRIEFS SHOW, HAVE BEEN ENGAGED IN SETTLEMENT DISCUSSIONS. THEY HAVE REACHED A SETTLEMENT, TENTATIVELY. IT IS CONDITIONED ON THE DADE COUNTY COMMISSION APPROVING IT. THAT HAS NOT YET OCCURRED. THERE IS A HEARING TOMORROW, AND IT IS CONDITIONED, AS WELL, ON THE PUBLIC SERVICE COMMISSION APPROVING IT. IT CAN'T BE SUBMITTED, UNTIL ALL PARTIES HAVE SIGNED OFF ON IT.

BUT THE OTHER CASE IS PENDING ON APPEAL AT THE SAME TIME?

I BELIEVE THAT IS CORRECT. LET ME BE SPECIFIC. WHEN DISPUTES AROSE IN 1994, CONCERNING THE LEVEL OF ENERGY PAYMENTS TO BE MADE BY FPC UNDER THESE CONTRACTS, FPC SOUGHT GUIDANCE BY THE PSC BY FILING A PETITION FOR DECLARATORY STATEMENT. IN ITS '95 ORDER, THE PSC EXPLICITLY CONSTRUED THE PROVISION IN REFERENCE TO THE DISPUTED CONTRACTS. IT DISMISSED THE PETITION, EXPLAINING THAT IT HAD NO PETITION TO DO. THAT THE MERITS WERE NEVER REACHED THE LITIGATION PROCEEDED.

IS THERE AN APPEAL FROM THAT ORDER?

NO. THERE WASN'T AN APPEAL FROM THAT ORDER, JUSTICE PARIENTE, BECAUSE ONCE THE COMMISSION CONSTRUED THAT ORDER AS ASKING FOR A CONTRACT INTERPRETATION RATHER THAN A CLARIFICATION OF WHAT THE PSC HAD APPROVED IN '91, THERE WAS NO REASON TO APPEAL THAT. THE LAW, AT THAT POINT IN TIME, HAD NOT YET DRAWN THE FINE BUT IMPORTANT DISTINCTION IT NOW DRAWS BETWEEN PSC JURISDICTION TO INTERPRET A CONTRACT AND PSC JURISDICTION TO CLARIFY THE BASIS ON WHICH IT APPROVED THESE CONTRACTS, AS CONSISTENT WITH THE VOIDED COSTS, BACK IN '91, GIVEN THE WAY THE PSC CONSTRUED THE PETITION AS A CONTRACT INTERPRETATION. THERE WAS NO AN APPEAL FROM THAT. LITIGATION, THEN, PROCEEDED, AND IN '97, FPC AND LAKE REACHED A SILTHS PRESIDENT OF THEIR MULTI-MILLION DOLLAR AGREEMENT, TO THE PSC FOR APPROVAL. THIS TIME IT HAD ITS DECISION. IN A 1997 ORDER, IT EXPLAINED HOW IT COULD EVALUATE THE TREATMENT OF THE ENERGY PAYMENTISH YOUR, -- TO THE ENERGY PAYMENT ISSUE, COMPARED TO WHAT IT RELIED ON IN 1991. RELYING ON AUTHORITY SINCE 1995, THE PSC DREW A VERY CAREFUL BUT IMPORTANT DISTINCTION BETWEEN INTERPRETING A CONTRACT AS TO WHICH IT LACKED JURISDICTION AS IT HELD IN ITS '95 ORDER, AND CLARIFYING AND EXPLAINING THE BASIS ON WHICH THE PSC HAD APPROVED THE CONTRACTS, AS TO WHICH IT NOW HELD IT HAD JURISDICTION.

NOW, THIS IS THE ORDER THAT WAS VOIDED AT A LATER DATE.

THAT'S CORRECT, JUSTICE LEWIS.

NOW, OF WHAT IMPORTANCE SHOULD WE PLACE UPON THE REASONING OR THE ANALYSIS AND AN ORDER THAT IS REALLY A NULLITY?

WELL, JUSTICE LEWIS, BEFORE IT BECAME A NULLITY, IT GOT DISAPPROVAL. WHILE THE ORDER BECAME A NULLITY, SINCE THE UNDERLYING PROCEEDING BECAME MOOT, ONCE IT WAS GONE, THERE WAS NOTHING TO SUGGEST THAT IT WAS DRAWING THE REASONING OR THE DISTINCTION IT HAD DRAWN AS TO ITS JURISDICTION. IT WAS WITHDRAWING THE ORDER AS A TECHNICAL NULITY FOR THE REASON THAT THE UNDERLYING DISPUTE HAD TERMINATED, PLUS THEY DREW DISTINCTION ON THE LAKE ORDER. THAT WAS CONSISTENT WITH WHAT THIS COURT SAID IN ITS PANDA DECISION, CONSISTENT WITH WHAT THE THIRD DISTRICT SAID IN ITS CROSSROADS DECISION, SO IT IS NOT A QUESTION OF RELYING ON THE ORDER BUT A QUESTION OF RELYING REASONABLY ON THAT ORDER TO DO WHAT THE PSC, IN THAT ORDER, SAID IT HAD JURISDICTION TO DO.

HELP ME JUST A LITTLE BIT. HERE WE KNOW THAT THE PSC HAS DECLINED INVOLVEMENT ON THE THEORY OF REAS JUDY CAD A. THEY DIDN'T -- JUDICA. THEY DIDN'T REACHED ESSENTIALS OF WHAT THIS ORDER WE ARE READING TODAY, ISN'T THAT --

IT PREVENTED.

FROM EVEN CONSIDERING THE JURISDICTIONAL ISSUE ANY FURTHER.

AS THEY HAD IN THE LAKE.

AS THEY HAD IN ANY OTHER JUDICIAL PROCESS. CONCERNING YOUR POSSESSION, IS IT ONE THAT WE WOULD, THEN, ADDRESS THE SUBSTANTIVE JURISDICTIONAL ISSUES, OR WOULD WE RETURN IT TO THE PSC, SO THAT THEY WOULD CONSIDER THOSE JURISDICTIONAL ISSUES?

I THINK ALL THIS COURT NEED DO IS AS A MATTER OF LAW DETERMINE THAT THE LEGAL DOCTRINE OF DECISION ALPHIN ALPHINALITY, HOLDS THAT IT HAD NO JURISDICTION, WAS ERROR, AND YOU SHOULD REMAND TO THE PSC. ON THIS RECORD I WOULD SUBMIT THAT, IF THIS COURT WOULD SO INCLINED, IT COULD DO MORE. IT COULD SAY IT WAS ERROR, AND IT COULD REMAND TO THE PSC, WITH DIRECTIONS IT TO TAKE JURISDICTION, BUT I DON'T BELIEVE THE COURT MUST DO THAT, BASED ON THE QUESTION PRESENTED. IN THE '98 PETITION, FLORIDA POWER WAS VERY CAVE IN HOW IT ASKED FOR RELIEF, BASED ON WHAT THE PSC HAD SAID IN ITS LAKE ORDER. THE PETITION WAS VERY IMPORTANT FOR FLORIDA POWER, FOR THE REASON THAT YOU INDICATED, JUSTICE LEWIS, THE INNING HAD -- THE INK HAD DISAPPEARED FROM THE LAKE ORDER AND IT WAS NECESSARY TO ASK THE PSC TO DO WHAT IT HAD JUST DONE IN LAKE: CLARIFY THE BASIS ON WHICH IT HAD ISSUED A BASIS FOR COST RECOVERY FOR THE RATE PAYERS BACK IN 1991 AND TO CLARIFY THE RULES THAT ARE INCORPORATED IN THESE CONTRACTS AND WERE MATERIAL TO THAT APPROVAL.

HELP US JUST A LITTLE BIT. LET'S PLACE THESE POSITIONS THAT WERE ASSERTED IN THE '98 PETITION INTO THE CONTEXT, AND INTO JUST REGULAR LANGUAGE, AND IT SEEMS, AND PLEASE CORRECT ME IF WE ARE INCORRECT, BUT THAT IT WAS A REQUEST FOR DECLARATORY STATEMENT.

CORRECT.

THAT YOU WOULD PAY FOR ELECTRICAL OR THE POWER, STRICTLY AS IN THE CONTRACT. WOULD THAT BE A FAIR STATEMENT?

I WOULDN'T AGREE ENTIRELY WITH THAT JUSTICE LEWIS. THE PETITION ASKED THE PSC TO CLARIFY THAT ITS UNDERSTANDING OF THE CONTRACTS IT APPROVED CALLED FOR PAYMENTS TO BE MADE IN THAT FASHION.

AND CALLED FOR THAT YOU WOULD UTILIZE THE AVOIDED UNITS AS SET FORTH IN THE CONTRACT.

THAT'S CORRECT.

AND THEN THIRDLY, THAT YOU WOULD USE THE PRICE OF COOL TO THE -- THE PRICE OF COAL TO THE CRYSTAL RIVER OPERATION, NUMBERS ONE AND TWO. IS THAT A FAIR STATEMENT?

IT IS FAIR STATEMENT, BUT THE IMPORTANT CAVEAT THAT IT ASKED WAS FOR THE PSC TO CLARIFY THAT ITS UNDERSTANDING, WHEN IT APPROVED THESE CONTRACTS IN '91, WITH COST RECOVERY FROM THE RATE PAYERS, IS THAT THAT IS THE WAY IT WOULD OPERATE. IT DID NOT ASK THE PSC TO RESOLVE DISPUTES BETWEEN FLORIDA POWER AND CO-GENERAL RATEORS. IF THE PSC HAD ISSUED A DECLARATORY STATEMENT, IT WOULD NOT INTERFERE WITH ANY LITGATION. THE LITIGATION WOULD GO FORWARD IN THE COURTS TO DETERMINE THE RIGHTS OF THE PARTIES AMONG THEM. WHAT THE COMMISSION WOULD HAVE DONE IS TO SAY, WHEN WE APPROVE THESE, THIS IS WHAT WE CONTEMPLATED IN 19916789 WHAT IMPACT, IF ANY, THAT WOULD HAVE ON THE LITIGATION, WOULD HAVE BEEN FOR THE COURTS TO DECIDE, BUT IT WOULD HAVE GIVEN FLORIDA POWER AND THE CO-GENERAL RATEORS AND RATE PAYERS OF THIS STATE SOME INDICATION OF WHAT THE PSC BELIEVES THE COST RECOVERY FROM THE RATE PAYERS WAS BACK IN 1991 WHEN IT ESTABLISHED.

HELP US TO DISTINGUISH, YOU ARE ASKING US TO INTERPRET WHAT THE CONTRACT SAID IN 1991, AND HOW THAT DIFFERS FROM ASKING WHAT AN INTERPRETATION OF THE CONTRACT IS.

WHAT I WOULD SAY, IN ANSWER TO THAT, IS FOR THE SAME REASON, A, THE COMMISSION SAID THAT IT WAS A VERY DIFFERENT QUESTION IN ITS LAKE ORDER, BEFORE IT WITHDREW THAT AS A TECHNICAL NULLITY, FOR THIS VERY REASON THAT THE COURT IN PANDA HAD JURISDICTION BUT ALSO THE RESPONSIBILITY TO INTERPRET ITS ORDER AND ITS RULES RELATING TO CO-GENERAL CO-GENERALRATION CONTRACTS AND THAT IT WOULD BE CONTRARY TO BOTH FEDERAL AND STATE AUTHORITY TO DENY THAT POWER TO THE COMMISSION, AND FOR THE SAME REASON THAT THE CROSSROADS DECISION, BOTH IN THE NEW YORK COMMISSION AND, AGAIN, IN THE THIRD CIRCUIT COURT OF APPEALS, THE SAME COURT THAT DECIDED THE FREEHOLD CASE, WHICH THE CO-GENERAL RATEORS RELY ON, MADE THIS A DISTINCTION.

ISN'T THAT A VERY DIFFERENT KIND OF CONTRACT THAN PANDA?

THIS WAS A NEGOTIATED CONTRACT AND PANDA WAS A STANDARD OFFER.

DOES THAT MAKE A DIFFERENCE IN THE ANALYSIS?

I DON'T BELIEVE IT DOES, JUSTICE WILSON.

WHY NOT?

BECAUSE IN THE PANDA DECISION, THE RATIONALE THAT THIS COURT USED DID NOT TURN ON THE NEGOTIATED CONTRACT. WHAT IT TURNED ON WAS THE COMMISSION, ALONE, HAS RESPONSIBILITY TO INTERPRET ITS OWN RULES AND ITS OWN ORDERS. WHEN THIS CONTRACT WAS SUBMITTED TO THE COMMISSION IN '91, THE COMMISSION HAD TO DETERMINE THAT IT PAID NO MORE THAN AVOIDED COST, IN ORDER TO APPROVE IT FOR RECOVERY FROM THE RATE PAYERS, WHICH IT DID. UNDER THE COMMISSION'S EXPLICIT RULES, IN CONSIDERING A VOIDED COST, THE TEST IS THE RULE THAT APPLIES TO STANDARD OFFER CONTRACTS. THAT RULE, ALTHOUGH IT IS NOT AUTOMATICALLY PART OF A NEGOTIATED CONTRACT, PROVIDES THE LITMUS TEST UNDER WHICH THE COMMISSION MUST DETERMINE THAT THESE CONTRACTS ARE COST EFFECTIVE. IF THEY CALL FOR PAYING MORE FOR ENERGY, THEN THE STANDARD OFFER CONTRACT ENERGY PRICING RULE WOULD AUTHORIZE. THEY CAN'T BE APPROVED FOR COST RECOVERY, SO EVEN THOUGH THIS IS A NEGOTIATED CONTRACT, IT IS GOVERNED BY AVOIDED COST, AS THIS COURT RECOGNIZED IN THE PANDA DECISION, AND THE RULES REQUIRE IT TO COUNTERTHE STANDARD OFFER CONTRACT RULES. ALL WE ASKED WAS YOU HAD TO DETERMINE THAT THIS CONTRACT DID NOT EXCEED AVOIDED COSTS. YOU MUST HAVE AN UNDERSTANDING, AND THEY TOLD US THEY DID IN THE LAKE ORDER, OF HOW THIS CONTRACT WAS GOING TO PAY FOR ENERGY. PLEASE TELL US AND CLARIFY WHAT IT IS YOU UNDERSTOOD IN '91, WHEN YOU APPROVED THIS NEGOTIATED CONTRACT, AND FOR THAT IT MAKES FOR DIFFERENCE THAT IT IS A NEGOTIATED CONTRACT VERSUS A STANDARD OFFER CONTRACT. WHILE I REALIZE THE DECISIONS AND CROSSROADS ARE NOT BINDING AUTHORITY, THAT DID INVOLVE NEGOTIATED CONTRACTS, AND THE COURT MADE CLEAR THE DISTINCTION IS NOT NEGOTIATED VERSUS STANDARD OFFER. THE DISTINCTION, THE PROPER DISTINCTION, IS NO JURISDICTION TO INTERPRET A CONTRACT DISPUTE BETWEEN THE PARTIES.

NOW, IN PANDA, WE UPHELD THE POSITION OF THE PSC THAT IT HAD JURISDICTION.

THAT'S CORRECT.

NOW, IS IT YOUR ASSERTION THAT THE COMMISSION'S POSITION ON ITS OWN JURISDICTION IN THIS CASE IS INCONSISTENT WITH THE POSITION THAT IT TOOK IN PANDA?

I BELIEVE IT WOULD BE INCONSISTENT, AND IT IS OUR MINGS IN THIS CASE THAT -- AND IT IS OUR POSITION IN THIS CASE THAT, WHAT THE COMMISSION DID WAS TO FIND, AS A MATTER OF LAW, THAT IT WAS PREVENTED FROM ASSERTING JURISDICTION BECAUSE OF THE FINALITY STEMMING FROM THE '95 ORDER, EVEN THOUGH THE JURISDICTIONAL QUESTION RAISED BY THE '95 ORDER WAS VERY DIFFERENT FROM THE ONE RAISED BY THIS PETITION, FOR THE VERY SAME REASON THAT THIS COMMISSION HAD NOTED THERE WAS A DIFFERENCE IN THE LAKE ORDER, AND FOR THE VERY SAME REASON THAT CROSSROADS NOTED THERE IS A DIFFERENCE, AND, I BELIEVE, CONSISTENT WITH THE REASONING OF THIS COURT IN THE PABD A DECISION -- IN THE PANDA DECISION, EVEN THOUGH THAT DIDN'T INVOLVE A NEGOTIATED CONTRACT. NEGOTIATED VERSUS STANDARD OFFER, I SUBMIT, WAS NOT IMPORTANT TO THIS COURT IN REACHING ITS DECISION IN PANDA.

SO YOU DON'T SEE ANY -- THAT THE PSC EXERCISED ANY DISCRETION IN TERMS OF DECIDING THAT IT SHOULD NOT EXERCISE JURISDICTION OVER THIS NEW DISPUTE?

JUSTICE PARIENTE, WHAT I WOULD SAY IS THAT WAS NOT THE BASIS FOR THEIR DECISION. I UNDERSTAND THAT IS THE ARGUMENT, NOW, THAT IS MADE IN THE BRIEFS FILED BY THE COMMISSION AND FILED BY APPELLEES, BUT WHEN ONE CAREFULLY LOOKS AT THE DECISION, ITSELF, THE DECISION GOES OFF ON THE DOCTRINE OF DECISION ALPHINALITY AND, PERHAPS, RAES JUDICADA, AND PERHAPS THAT PREVENTED THEM FROM TAKING JURISDICTION. THE NARROW QUESTION FOR THIS COURT IS WAS THAT WRONG, AS MATTER OF LAW? THE QUESTION OF WHETHER, IF THEY ARE TOLD YOU ARE NOT PREVENTED FROM TAKING JURISDICTION, THEY COULD NONETHELESS DECIDE, AS A DISCRETIONARY MATTER, TO DELAY THE PETITION OR NOT TAKE JURISDICTION, IS A DIFFERENT QUESTION. I WOULD SUBMIT ON THIS RECORD YOU COULD TELL THEM YOU ARE NOT BARRED FROM TAKING JURISDICTION, AND GIVEN THE INCONSISTENCY OF THE RULINGS, YOU MUST TAKE JURISDICTION, BUT YOU NEED NOT DO THAT. YOU COULD JUST DETERMINE THEY WEREN'T BARRED, AS MATTER OF LAW, FROM TAKING JURISDICTION, SEND IT BACK TO THE COMMISSION, AND THEY COULD DETERMINE, GIVEN ALL THE FACTS AND CIRCUMSTANCES, WHETHER THEY OUGHT TO TAKE JURISDICTION.

WOULD YOU SHARE, WITH US, WHAT YOU BELIEVE TO BE YOUR BEST AUTHORITY FOR THE PROPOSITION THAT THERE IS NO DECISION ALPHINALITY WITH REGARD TO THE DETERMINATION OF JURISDICTION IN '94, IN THE '95 ORDER.

YES.

EVEN THOUGH YOU MAY ASSERT THAT THAT IS ERRONEOUS.

WELL, YOUR HONOR, I WOULD LOOK, FIRST, TO THE CONCEPT OF RAES JUDI KRMENT A AND ESTOPPEL -- JUDICADA, ANDES TOP HE WILL -- AND ESTOPPEL. IT REQUIRES THAT THERE BE A JUDGMENT ON THE MERITS.

YOU ARE SUGGESTING THAT THERE IS NO, AS FAR AS JUDICIAL CONCERN, RAES JUDICA, AS FAR AS JURISDICTIONAL DECISIONS. IS THAT YOUR POSITION?

NO. THAT IS NOT MY POSITION, JUDGE. IF THERE HAD BEEN A JUDGMENT ON THE MERITS, THEN THE POSITION ON THE DECISION COULD BE RAES JUDICADA AS WELL AS OTHER THINGS, BUT ALL THEY DID WAS REACH THE MERITS.

I AM ASKING AS TO THE JURISDICTIONAL ISSUE, THERE MUST BE SOME MERIT TO THE JURISDICTIONAL ISSUE, NOT THE MERITS OF THE DISPUTE. WE UNDERSTAND THAT.

I THINK I UNDERSTAND YOUR QUESTION, AND I THINK THE IMPORTANT DISTINCTION THERE IS THERE COULD BE ISSUE PRECOLLUSION OR COLLATERAL ESTOPPEL ON THAT POSITION, BUT FOR COLLATERAL ESTOPPEL TO APPLY, THE SAME JURISDICTIONAL ISSUE HAS TO BE PRESENTED IN THE SECOND PROCEEDING AS WAS IN THE FIRST. THE NOTICE THAT THE FIRST PROCEEDING PRECLUDED EVERYTHING LITIGATED OR COULD HAVE BEEN LITIGATED IS RAES JUDICADA ISSUE ON THE MERITS. THE POLITICAL -- THE ISSUE THAT WE ARE ADVANCING HERE IS THAT THE '98 POSITION WAS DIFFERENT FROM WHAT THE COURT ADJUDICATED IN 1995.

LET'S GO BACK TO MY QUESTION. YOU ARE SAYING THAT A DETERMINATION ON JURISDICTION, IF THE CASE DOES NOT REACH THE MERITS, CANNOT BE CONSIDERED RAES JUDICADA AS TO THE JURISDICTIONAL ISSUE?

I AM SAYING IT COULD BE PREINCLUDES I HAVE OR COLLATERAL -- PRECLUSIVE OR COLLATERAL ESTOPPEL.

WOULD YOU GIVE ME THE AUTHORITY THAT YOU BELIEVE IS YOUR BEST AUTHORITY FOR THAT PROPOSITION.

YOUR HONOR, WE HAVE CITED A NUMBER OF AUTHORITIES IN OUR BRIEF, WHICH I CAN GET YOU ON REBUTTAL, THAT STAND FOR THE PROPOSITION THAT, UNDER FLORIDA LAW, FOR THERE TO BE RAES JUDICADA, IN THE STRICT SENSE, THERE HAS TO BE JUDGMENT ON THE MERITS, BUT I AM NOT SAYING THAT THE JURISDICTIONAL DECISION IS NOT BINDING ON THE PARTIES AS COLLATERAL ESTOPPEL, IF THE SAME JURISDICTIONAL ISSUE IS PRESENTED THE NEXT TIME AROUND, BUT IT IS NOT HERE. THANK YOU. I WOULD LIKE TO PRESERVE THE REST OF MY TIME FOR REBUTTAL.

THANK YOU. MR. BELLAK. MR. BELLAK, I UNDERSTAND YOU AND MR. BERANEK ARE GOING TO SPLIT YOUR TIME 12 AND 8?

THAT'S CORRECT, YOUR HONOR. MAY IT PLEASE THE COURT. I AM RICHARD BELLAK, REPRESENTING THE FLORIDA PUBLIC SERVICE COMMISSION, AND WITH ME AT THE TABLE ARE JOHN BERANEK AND SCHEFFEL WRIGHT, REPRESENTING THE CO-APPELLEES. THE DIFFERENCE BETWEEN THE 1994 DECLARATORY STATEMENT AND THE 1998 DECLARATORY STATEMENT IS ILLUSIVE TO THE -- ELUSIVE TO THE COMMISSION, AND WE BELIEVE IT WILL BE ELUSIVE TO THE COURT AS WELL. IN THEIR FIRST VERSION OF THE PETITION, THEY ASKED THE COMMISSION TO DECLARE THAT THEIR INTERPRETATION OF THE CONTRACT WAS CONSISTENT WITH THE COMMISSION'S RULE AND ORDER. IN THE SECOND VERSION OF THEIR PETITION, THEY ASKED THE COMMISSION TO DECLARE THAT THE COMMISSION'S RULE AND ORDER REQUIRED THEM TO DO WHAT THEY DESCRIBED AS THEIR INTERPRETATION OF THE CONTRACT. IF THERE IS A DIFFERENCE THERE, IT ELUDES THE COMMISSION, AND IN FACT, THE DISMISSAL WAS NEVER APPEALED, SO RAES JUDICADA IS PERFECTLY PERMISSIBLE IN THIS CASE. IT WOULD BE APPLICABLE, IF THEIR OPPONENTS IN THE CIRCUIT COURT CLAIMED THAT THEY COULDN'T PRESENT THEIR MERITS IN THE CIRCUIT COURT BECAUSE THEY HAD BEEN DISMISSED BY THE COMMISSION IN 1994. THOSE CASES WOULD SAY THEY COULD GO AHEAD AND PRESENT THEIR MERITS CASE, BECAUSE THEY WERE NOW IN THE TRIBUNAL THAT HAD JURISDICTION. BUT NONE OF THOSE CASES SAY THAT THEY COULD COME BACK TO THE FLORIDA PUBLIC SERVICE COMMISSION WITH THE SAME PETITION, HAVING SUFFERED PARTIAL SUMMARY JUDGMENT AGAINST THEM, AND THEREFORE EVEN MORE DESPERATE TO GET A PIECE OF PAPER WITH THE COMMISSION'S SIGNATURE ON IT THAT THEY COULD USE TO GAIN AN ADVANTAGE AGAINST THEIR ADVERSARY IN COURT. NONE OF THOSE CASES SAY THAT.

ARE YOU SAYING THAT IS THE POSTURE THAT THEY CAME BACK TO THE PSC? I MEAN, THAT WAS THE POSTURE OF THE LITIGATION? IT HAD PROCEEDED FOR SOME PERIOD OF TIME?

THAT IS WHY THEY NEEDED THE PIECE OF PAPER, AND THAT IS WHY THEY TOOK A SECOND BITE AT THE APPLE, EVEN THOUGH THEY DIDN'T APPEAL THE FIRST DISMISSAL, AND THAT BRINGS UP THE SUN TIED CONDOMINIUM CASE. -- THE SUN TIDE CONDOMINIUM CASE, WHERE JUDGE SMITH, IN THAT CASE, SAID, IF I CAN FIND IT, IT DETERMINED THE DIVISION SHOULD NOT HAVE ISSUED THE DECLARATORY STATEMENT, ONCE THE SAME CONTROVERSY WAS PENNEDING IN CIRCUIT COURT. AND -- WAS PENDING IN CIRCUIT COURT, AND THEY HAVE COME UP WITH ANY EXCUSE FOR WHY THE COMMISSION, AS AN AGENCY, COULD ISSUE DECLARATORY STATEMENTS ABOUT A CONTROVERSY THAT HAD BEEN GOING ON FOR YEARS IN THE CIRCUIT COURT, AND THE THEORY BEHIND SUN TIDE IS THAT THE STATE AGENCY SHOULD NOT BE ARMING ONE LITIGANT TO HAVE AN ADVANTAGE AGAINST THE OTHER LITIGANT.

MAY I ASK YOU A QUESTION? IN THIS CASE, IF THE CIRCUIT COURT WOULD END UP REACHING A DETERMINATION AS TO THE INTERPRETATION OF THE CONTRACT, WOULD THAT BE, THEN, BINDING ON THE PSC?

WELL, THERE ARE A NUMBER OF THINGS THAT ARE GOING TO HAPPEN DOWN THE ROAD, AND IT IS SPECULATIVE.

BUT ISN'T THAT THE POLICY PROBLEMS THAT WE ARE DEALING WITH HERE, WITH THE FACT THAT THERE IS SOMETHING GOING ON IN THE CIRCUIT COURT, THEN, IF THEY GO INTO THE PSC TO GET APPROVAL. THE PSC SAYS, AS IT SAID PREVIOUSLY, THAT IS NOT A PROPER SETTLEMENT, BECAUSE IT IS NOT IN ACCORDANCE WITH OUR INTERPRETATION?

NO, YOUR HONOR, AND I DON'T THINK THAT WHAT HAPPENED IN LAKE IS RELEVANT AT ALL AS TO WHAT MAY HAPPEN DOWN THE ROAD, AND I JUST CAN'T SPECULATE ON WHAT IS GOING TO HAPPEN DOWN THE ROAD, BUT THIS COURT MUST BE ABSOLUTELY ASTOUNDED AT ALL OF THE THINGS THE PUBLIC SERVICE COMMISSION DID IN THE LAKE ORDER. IT RECONSTRUED ITS JURISDICTION. IT DECIDED TO CHANGE ITS POLICY. IT THOUGHT THAT MAYBE IT WOULD MORE CLOSELY CONSTRAIN THE CONTRACT ON AN ONGOING BASIS, AND IT DID ALL OF THESE THINGS WITHOUT ANY INPUT FROM THE PARTIES THAT WERE AFFECTED. HOW COULD THAT HAPPEN? AND THE ANSWER IS IT NEVER HAPPENED. THE COMMISSION NEVER PICKED UP A THIRD VOTE TO DO ANY OF THOSE THINGS. IT PROPOSED TO DO THEM, IF NO ONE OBJECTED, BUT IT ALREADY HAD TWO DISENTS TO THAT ORDER, SO IT WAS A VERY WEAK ORDER. ONE SETTLEMENT PARTY PROTESTED. ALL OF THOSE, UNDER THE RULES, ALL OF THOSE PROPOSALS VANISHED, AS IF THEY HAD NEVER BEEN SUGGESTED, AND THE COMMISSION WAS ALL SET TO START FRESH, WITH A HEARING TO ALLOW THE SETTLING PARTIES TO MAKE THEIR CASES AS TO WHY THE COMMISSION SHOULD ACCEPT THE SETTLEMENT. IT WAS THE SETTLING PARTIES THAT DECIDED TO TAKE THEIR SETTLEMENT AND GO HOME, BECAUSE THEY WEREN'T ALL THAT INTERESTED IN SETTLING AT THAT POINT. EACH OF THEM PROBABLY FOR DIFFERENT REASONS. SO IT HAD NOTHING TO DO WITH THE LAKE ORDER. AND WHEN FLORIDA POWER SAYS THEY HAVE BEEN KICKED FROM TOW TO POST AND THE -- FROM TOE TO POST AND THE COMMISSION WANTS IT BOTH WAYS, THE COMMISSION NEVER HAD ANYTHING IN THE LAKE ORDER DONE, BECAUSE THEY DIDN'T HAVE VOTES TO DO IT, AND THEY HAVE ONLY HAD IT ONE WAY. THEY SAID NO IN 1995, AND THEY SAID NO IN 1998. NOW, THE SAME --

EXCUSE ME. DO YOU DISAGREE, THEN, THAT THE SUBSEQUENT FEDERAL CASE LAW CHANGES THE JURISDICTION OF THE PUBLIC SERVICE COMMISSION?

NOT AT ALL, YOUR HONOR. THE -- FIRST OF ALL, THE -- YOU ARE TALKING ABOUT THE CROSSROADS THIRD CIRCUIT CASE. CROSSROADS THIRD CIRCUIT WAS DECIDED ON OCTOBER 27, 1998. THE COMMISSION REACHED ITS DECISION IN THIS CASE ON OCTOBER 6. SO THE COMMISSION VOTED BEFORE THAT CASE EVEN EXISTED, AND THAT CASE IS A COMPLETELY DISTINGUISHABLE CASE, IN EVERY RESPECT, AND IT PUTS, UNDER THE LIGHT, THE INACCURACIES OF THE APPELLANT'S ARGUMENT.

SO ARE YOU, ALSO, ARGUING THAT THE PANDA CASE, FROM THIS COURT, DOES NOT CHANGE THE JURISDICTION OF THE PSC?

PANDA CASE IS AN EXCEPTION TO THE GENERAL RULE, AND NO ONE DISPUTES THE GENERAL RULE THAT THE COMMISSION CANNOT ADJUDICATE A CONTRACT POST-APPROVAL, IF IT IS A NEGOTIATED CONTRACT. PANDA IS AN EXCEPTION LIMITED TO CONTRACT CLAUSES REQUIRED BY STATUTE OR REGULATION. BOTH CLAUSES IN PANDA WERE THOSE SPECIAL KIND OF CLAUSES. THE COMMISSION HAS AN ONGOING ENFORCEMENT RESPONSIBILITY, EVEN POST-APPROVAL. THAT IS WHY THE COMMISSION COULD SAY WE HAVE JURISDICTION TO EXPLAIN WHAT WE APPROVED IN THIS. THERE IS NO DANGER OF WRONGFUL WRONGFULLY ADJUDICATEDING A NEGOTIATED CONTRACT, POST-APPROVAL, BECAUSE THERE ARE NO PRECEDENTS THAT RUN TO THAT SPECIAL EXCEPTION. BUT THERE IS NO -- THAT IS DICTA AS TO THE ORDINARY CASE OF -- THAT IS DICTA AS TO THE ORDINARY CASE OF NEGOTIATED AGREEMENTS. NOW, YOU WERE TALKING ABOUT THE THIRD CIRCUIT CROSSROADS CASE. NOT ONLY WAS IT DECIDED, AFTER THE COMMISSION VOTED, AND NOT ONLY WAS THERE NO NOTICE OF SUPPLEMENTAL AUTHORITY BEFORE THE COMMISSION PROMULGATED ITS WRITTEN ORDER, BUT THERE IS A DIFFERENT SEQUENCE OF EVENTS. THE PARTIES WERE BEFORE THE NEW YORK COMMISSION FIRST, AND THEN THE COGENERATOR FILED ITS COURT CONTRACT CASE. IN THIS CASE THE PARTIES WERE IN LITIGATION BEFORE THE CIRCUIT COURT FOR YEARS, BEFORE FLORIDA POWER WENT BACK TO THE COMMISSION AND TRIED ITS REHEATED VERSION OF ITS PETITION FOR DECLARATORY STATEMENT. UNDER SUN TIDE, THERE WAS NO WAY THAT THE COMMISSION COULD ISSUE A DECLARATORY STATEMENT THAT WAS RELEVANT TO THE SAME ISSUE THEY WERE LITIGATING BEFORE THE CIRCUIT COURT.

WELL, THE PSC'S POSITION HERE, THOUGH, IS THAT WE SHOULD DECIDE THIS ON THE BASIS OF RAES JUDICAD A OR ADMINISTRATIVE FINALITY, NOT DETERMINE IF WHETHER, NEXT YEAR, THE SAME ISSUE ARISES, WHETHER THE PSC IS OR IS NOT GOING TO HAVE JURISDICTION TO INTERPRET A CONTRACT THAT WAS THE SUBJECT OF A PRIOR APPROVAL. IS -- IN OTHER WORDS WE SHOULD NOT REACH THE JURISDICTION. THE QUESTION AS TO THE SCOPE OF THE PSC'S JURISDICTION TENT. -- TENT.

WHICH IS THE -- AT THE PRESENT TIME.

WHICH IS THE SUBJECT OF PRIOR APPROVAL?

I AM ASKING WHETHER YOU WOULD URGE THIS COURT TO REACH OR NOT REACH THE GREATER JURISDICTIONAL QUESTION AS TO THE SCOPE OF THE PSC'S JURISDICTION IN THE FUTURE, TO INTERPRET NEGOTIATED CONTRACTS.

WELL, THE THING IS I IMAGINE THE COURT CAN REACH WHAT ISSUES IT FEELS THAT IT HAS BEFORE IT, BUT THE POINT IS THAT IT WOULD BE A RADICAL CHANGE IN THE COMMISSION'S APPROACH TO THESE NEGOTIATED CONTRACTS. I WOULD LIKE TO READ -- SO THE PSC'S POSITION, TODAY, IS THAT THEIR JURISDICTION, REALLY, IS LIMITED, AS THEY CLAIMED IT WAS IN 1994.

YEAH. IN THE AREA OF NEGOTIATED CONTRACTS.

OKAY.

WE ARE NOT TALKING ABOUT THOSE STANDARD OFFER EXCEPTIONAL CASES. BUT IN THE NEGOTIATED CONTRACTS, ONLY NEW YORK HAS TRIED THE IDEA OF EXPLAINING WHAT IT APPROVED, AND IF YOU LOOK AT SECTION 2 C OF THE THIRD CIRCUIT CASE, IT IS A SPECIAL UNIQUE CIRCUMSTANCE. THE NEW YORK COMMISSION HAD A MEMO FROM ITS STAFF THAT WAS CONTEMPORARY WITH WHEN THEY APPROVED THE CONTRACT, SO THEY COULD SAY, AND THEY COULD CONVINCE THE CIRCUIT COURT, WE REALLY DID PULL OFF THIS TRICK. WE REALLY DID FIND OUT WHAT WE APPROVED, JUST LIKE LOOKING AT THE MEMO. WE NEVER HAD TO LOOK AT THE CONTRACT. THAT IS THE OPPOSITE OF THIS CASE. COMMISSIONER CLARK NOTED THE ORDER SAYS NOTHING ABOUT THIS DISPUTED ISSUE. THEY NEVER DISCUSSED THIS DISPUTED ISSUE. THE COMMISSION PANEL HAS NO IDEA HOW THIS DISPUTED ISSUE MAY HAVE FACTORED INTO THE DECISION. IN OTHER WORDS THE COMMISSION WOULD HAVE TO SIT DOWN AND RE-ENGINEER WHAT IT APPROVED, AND IT WOULD BE DOING EXACTLY THE SAME THING AS THE CIRCUIT COURT IS DOING. AND WHILE IT IS TRUE THE COMMISSION EVENTUALLY HAS TO FIND OUT WHAT IT APPROVED, WHAT THEY ARE MISTAKEN ABOUT IS THAT THE COURT DOESN'T HAVE THE JURISDICTION TO FILL IN SOME OF THOSE BLANKS. THEY CAN'T GET ALL THE ANSWERS FROM THE COMMISSION, BECAUSE THE COMMISSION DOESN'T HAVE THE JURISDICTION TO SUPPLY THEM IF, IN DOING SO, AND I AM QUITEING -- QUOTING FROM COMMISSIONER CLARK, IF, IN THE GUISE OF EXPLAINING WHAT WE APPROVE, WE WILL BE ADJUDICATING THEIR CONTRACT DISPUTE, AND WE WILL BE SENDING AN ADVISORY OPINION TO THE CIRCUIT COURT, THREE YEARS AFTER WE SAID THAT WE WOULD DEFER THAT ISSUE TO THE CIRCUIT COURT.

LET ME ASK YOU FOR A LAST TIME, THE QUESTION ORIGINALLY ASKED YOU BY JUSTICE PARIENTE, AND THAT IS THAT, DOES THE COMMISSION SEE ANY DANGER WITH THE CIRCUIT COURT ACTING IN THIS PARTICULAR DISPUTE, WHERE THE PSC, DOWN THE ROAD HAS APPROVED OR ADOPTED A DIFFERENT POLICY INTERPRETATION, REFERENCE TO THESE CONTRACTS, AS THEY APPROVED IN A DIFFERENT SETTING, THAT WILL CONFLICT WITH THE HOLDING OF THE CIRCUIT COURT IN RESOLVING THE DISPUTE AND THAT IS POTENTIALLY, THEN, APPROVED ON APPEAL, SO THAT WE HAVE, PERHAPS, CONFLICTING RESOLUTIONS OF LAW ON AN IMPORTANT POLICY ISSUE THAT ORDINARILY THIS COURT, FOR INSTANCE, WOULD GIVE GREAT DEFERENCE TO THE POLICY OF THE COMMISSION, AND THAT IS SOMETHING THAT IS ALIVE HERE. AND I WOULD LIKE YOU TO TOUCH ON THAT.

RIGHT. YOUR HONOR, SERIOUSLY, I DON'T SEE THAT AS A PROBLEM. YOU HAVE TO REALIZE THAT, THE PERFECT LAW IS SET UP ANALOGOUS TO THE SUN TIDE CASE. THE WHOLE THRUST OF IT IS THE WHOLE CO-GENERALRATION THING CAN'T WORK, IF THERE IS A PERCEPTION OF THE STACKED DECK F IT LOOKS TO PEOPLE WHO WOULD INVEST IN THOSE PLANTS THAT, EVERY TIME THERE IS A DISPUTE, UNDER THE NEGOTIATED CONTRACT THE UTILITY GETS TO RUN BACK TO THE UTILITY THAT REGULATES IT AND GETS THE STATE AGENCY ON ITS SIDE OF THE DISPUTE. NOBODY IS GOING TO INVEST IN THOSE CO-GENERALRATION PLANTS. SO PERPA IS SET UP TO ELIMINATE THAT POSSIBILITY. THAT IS WHY THERE AN ABSOLUTE BAR AGAINST THE COMMISSION TO DO ANYTHING TANTAMOUNT TO INTERPRETING THAT CONTRACT, AND THE COMMISSION EXERCISES THE SAME KIND OF SELF-DISCIPLINE. THEY MAY HAVE AN IDEA HOW IT SHOULD BE RESOLVED, BUT THEY EXERCISE SELF-DISCIPLINE IN SUPPORT OF ENCOURAGING CO-GENERALRATION, BY DOING THE RIGHT THING. STAYING OUT OF IT, DEFERRING IT TO THE COURT. AND THEY ARE COMMITTED TO THAT.

I DON'T KNOW WHAT YOUR TIME IS, BUT YOU HAVE AGREED TO SHARE IT WITH MR. BERANEK.

THANK YOU.

COUNSEL, AS YOU GET STARTED, WOULD YOU JUST SHARE, WITH US, THE PROCEDURAL SETTING, AT THE TIME THE '98 PETITION WAS FILED WITH THE PSC. WHERE THE CIRCUIT COURT PROCEEDINGS WERE ON THE LIABILITY ISSUE, WITH REGARD TO BOTH DADE AND LAKE CO-GENERAL?

YES, SIR. -- AND LAKE C-GEN?

YES, SIR. I REPRESENT LAKE. I AM HERE WITH BRIAN SCHEFFEL -- WITH ROBERT SCHEFFEL WRIGHT, WHO REPRESENTS DADE. IN THE 1999 CIRCUIT COURT, I HAVE RECENTLY FILED COPIES OF ALL OF THE PLEADINGS, NOT THE PLEADINGS BUT THE ORDERS OF THE JUDGE, AND THIS IS A SITUATION WHERE THE CIRCUIT JUDGE INCORPORATED, LIKE, FOUR DIFFERENT ORDERS, ALL INTO A SINGLE JUDGMENT. THAT JUDGMENT IS ON APPEAL TO THE FIFTH DISTRICT COURT OF APPEAL RIGHT NOW. THE JUDGMENT IS AWARDED OVER $4 MILLION TO LAKE. LAKE APPEALED. AND THE OTHER SIDE FILED ACROSS APPEAL. SO THE MATTER IS GOING TO BE BEFORE THE FIFTH DISTRICT COURT OF APPEAL. WE JUST GOT THE IN DICTION TO THE -- THE INDEX TO THE RECORD ON FRIDAY OF LAST WEEK. THE BRIEFS HAVEN'T BEEN DONE YET. LAKE THINKS IT IS ENTITLED TO MORE MONEY THAN WAS AWARDED. OBVIOUSLY THEY THINK SOMETHING ELSE.

TAKE US BACK TO THE TIME THE PETITION WAS FILED IN '98. WHAT WAS THE CIRCUIT COURT STATUS? WAS THAT AFTER A SUMMARY JUDGMENT?

THERE HAD BEEN A SUMMARY JUDGMENT ON LIABILITY ENTERED IN FAVOR OF LAKE AT THAT POINT.

HOW ABOUT THE DADE SITUATION? WHERE WERE THEY?

THE DADE SITUATION WAS INVOLVED IN LITIGATION, AND MR. WRIGHT, CAN YOU TELL US THE PRECISE STATUS OF THE DADE LITIGATION IN '98?

MAY IT PLEASE THE COURT, YOUR HONOR. THIS IS ROBERT SCHEFFEL WRIGHT, REPRESENTING DADE COUNTY. AT FEBRUARY OF 1998, WHEN FLORIDA POWER CORPORATION FILED ITS 1998 PETITION, WITH RESPECT TO THE DADE AND MONTENAY LITIGATION IN SOUTH FLORIDA, THAT LITIGATION WAS ONGOING. WE ARE IN DISCOVERY AND PREPARING FOR TRIAL.

AT THE TIME, WE HAD A CONTRACT. THEY WERE PAYING AT FIRM RATE, WHICH IS THE HIGHER RATE. THEN THEY WROTE US A LETTER AND SAID WE ARE GOING TO REDUCE IT. WE ARE GOING TO CUT THE PAYMENTS, AND THEY FILED A PETITION FOR DECLARATORY -- THIS IS BACK IN '94. THEN THEY FILED THE PETITION FOR DECLARATORY STATEMENT AND LAKE FILED A CIRCUIT COURT ACTION, SAYING YOU HAVE BREACHED YOUR CONTRACT. THIS IS A BREACH OF CONTRACT CASE. AND THAT IS WHAT WAS COMPELLING TO THE COMMISSION. THE COMMISSION DOESN'T DECIDE BREACH OF CONTRACT CASES, PARTICULARLY WHEN IT IS A NEGOTIATED CONTRACT. I MEAN PERPO PREEMENTS PUBLIC UTILITY REGULATION OF PRIVATE CO-GEN COMPANIES. THEY ARE NOT REGULATED AS PUBLIC UTILITY COMPANIES BECAUSE THEY ARE NOT. IN ANY EVENT, THE COMMISSION, THEN, BACK ON FEBRUARY 15, 1995, ENTERED AN ORDER, AND THAT ORDER SAID THIS IS A BREACH OF CONTRACT SAYSs CASE. THAT IS WHAT THIS DIS -- BREACH OF CONTRACT CASE. THAT IS WHAT THIS DISPUTE IS. THEY SAID FPC'S REQUEST IS REALLY A REQUEST TO INTERPRET THE MEANING OF THE CONTRACT TERM. FPC IS NOT ASKING US TO INTERPRET A RULE. THE RULE. THEY ARE ASKING US TO GET INVOLVED IN THEIR BREACH OF CONTRACT CASE, AND THEY GO DOWN AND SAY IN THIS CASE, WE WILL DEFER TO THE COURTS TO RESOLVE THAT DISPUTE. WE DEFER TO THE COURTS TO ANSWER THE QUESTION OF CONTRACT INTERPRETATION RAISED IN THIS CASE. THAT WAS ENTERED IN FEBRUARY OF 1995. AND 30 DAYS WENT BY. THERE WAS NO APPEAL. JURIES DWITION WAS LITIGATED IN THIS -- JURISDICTION WAS LITIGATED IN THIS CASE. EVERYTHING WAS LITIGATED IN THIS CASE. MOST EVERYTHING THEY SAY, HERE, TODAY, IS IN THIS ORDER, WHICH IS EIGHT PAGES LONG, RULING ON ALL THESE ISSUES, BACK IN 1995, AND THEY SAID WE DEFER TO THE COURTS. INCIDENTALLY THE PARTIES WERE ALREADY IN COURT, LITIGATING. THEY WERE IN COURT, LITIGATING. THEY LITIGATED ALL OF THESE ISSUES. FPC FILED A COUNTERCLAIM, ASSERTING IT SHOULD BE ABLE TO PAY AT THE LOWER RATE RATHER THAN THE HIGHER RATE. ALL OF THESE ISSUES WERE LITIGATED IN CIRCUIT COURT. THE PUBLIC SERVICE COMMISSION DOES NOT DO BREACH OF CONTRACT WORK. CIRCUIT COURTS DO THAT, AND NOW THE FIFTH DISTRICT COURT OF APPEAL IS GOING TO DO THAT.

BUT ISN'T THERE SOME LIMITATION, THOUGH, ON, WITH THIS CONTRACT DISPUTE, ISN'T THE LIMITATION THAT THE CONTRACT AMOUNTS CANNOT EXCEED THE AVOIDED COSTS, SO IN THE END I AM STILL CONCERNED AND GOING BACK TO WHAT JUSTICE ANSTEAD ASKED AND WHAT I ASKED ORIGINALLY ABOUT WHAT HAPPENS HERE, AND I GUESS WITH YOUR CLIENT, IT IS ON APPEAL WITH YOUR CO-APPELLEE. IT IS A SETTLEMENT. IF THE PSC DISAGREES WITH WHAT THE CIRCUIT COURT SAYS IS A PROPER AMOUNT, AND, I GUESS, IN EITHER CASE, AND ISN'T THAT A REAL CONCERN, AND HOW DOES THAT -- HOW DO THE TWO VENUES WORK? IF YOU COULD.

WELL, IN THIS CASE, THERE IS A VERY PRACTICAL ANSWER TO THAT, JUST DISPARIENTE. THE COMMISSION DEFERRED TO THE COURT. THEY CHOSE TO ALLOW THIS LITIGATION TO GO FORWARD IN THE CIRCUIT COURT. AND THAT ORDER, AND I CERTAINLY DON'T SUGGEST THAT ORDER WAS WRONG, BUT EVEN IF IT WAS WRONG, THEY COULD HAVE APPEALED IT, AND THEY DID NOT. THAT IS RAES JUDICADA. THAT IS ADMINISTRATIVE FINALITY. IN 1998, THEY FILED THE SAME THING, AND THE COMMISSION SAYS WE WILL STICK WITH HOW WE DECIDED IT BEFORE. THAT IS ALL THAT HAS HAPPENED IN THIS CASE, SO THE OVERALL QUESTION OF, WELL, WHAT HAPPENS WITH AVOIDED COSTS AND WHAT ABOUT THAT LIMITATION? WHEN THE COMMISSION APPROVED THIS CONTRACT AS THEY DO WITH ANY NEGOTIATED CONTRACT WITH A SMALL COGENERATION COMPANY, THEY HAVE TO DECIDE WHAT THE REASONABLE POSSIBILITIES OR WHAT THE REASONABLE PROBABILITIES ARE IN THE FUTURE, OVER 20 YEARS. A LOT OF THINGS COULD CHANGE. BUT THAT DOESN'T MEAN THEY GET TO GO BACK AND CHANGE THE CONTRACT. THE CONTRACT STAYS THE SAME. OTHERWISE PRIVATE PEOPLE WOULD NEVER INVEST MONEY IN THOSE CONTRACTS. THAT IS WHY THESE CONTRACTS CAN'T BE CHANGED.

THANK YOU VERY MUCH, MR. BERANEK.

MAY IT PLEASE THE COURT. I AGREE THAT THE PSC DOES NOT HAVE JURISDICTION TO INTERPRET CONTRACTS. THAT IS BEFORE THE CIRCUIT COURT. NOR IS IT PROPER FOR THE PSC TO CHANGE THE BASIS ON WHICH IT APPROVED THE CONTRACT IN '91, BECAUSE SOMETHING HAPPENED TO LOWER AVOIDED COSTS. BUT ONLY THE PSC, ONLY THE PSC AND NOT ANY COURT, HAS THE JURISDICTION TO CLARIFY AND SAY WHAT IT APPROVED AS CONSISTENT WITH AVOIDED COST IN '91. THAT IS EXACTLY WHAT THIS COURT SAID IN PANDA, AND SO IN ANSWER TO SOME OF THE QUESTIONS, ULTIMATELY THE PSC IS THE ASHTER OF WHAT IS GOING TO GET -- THE ARE A BIT OR AS TO WHAT IS -- IS THE ARBITOR AS TO WHAT IS GOING TO GET PASSED THROUGH TO THE RATE PAYERS. THERE IS NO QUESTION ABOUT THAT. IF YOU READ THIS DECLARATORY STATEMENT, ALL FIFTH COMMISSIONERS, NOT ONLY THE TWO IN MINORITY BUT THE THREE IN MAJORITY ALL SAID THIS COMES BACK TO US FOR COST RECOVERY, BECAUSE IF SOME CIRCUIT COURT OR SOME SETTLEMENT, AS THEY SAID, PAYS MORE THAN THE BASIS ON WHICH WE APPROVED THESE CONTRACTS IN '91 AND OUR RULES PERMIT, WE DON'T PASS IT THROUGH FOR COST RECOVERY. WE DON'T PERMIT THAT TO BE PASSED THROUGH, SO SOONER OR LATER THE PSC HAS GOT TO DETERMINE THAT THE PAYMENTS HERE UNDER ARE CONSISTENT WITH OR NOT CONSISTENT WITH WHAT THEY APPROVED IN '91. FLORIDA POWER IS ENTITLED TO KNOW, AND EVERYBODY IS ENTITLED TO KNOW WHAT THEIR UNDERSTANDING IS OF WHAT THEY APPROVED IN '91. NOW, BECAUSE WE HAVE TO LIVE WITH THESE CONTRACTS, BECAUSE WE HAVE TO ADMINISTER THESE CONTRACTS, WE HAVE TO EVALUATE SETTLEMENT UNDER THESE CONTRACTS. WE ARE INVOLVED IN LITIGATION WHERE IT WOULD BE HELPFUL TO KNOW NOT THE ANSWER TO THE BREACH OF CONTRACT QUESTION BUT WHAT IT IS THE COMMISSION HAS IN MIND THAT IT APPROVED IN '91 THAT IS GOING TO PROVIDE THE BASIS UNDER WHICH IT PERMITS THE PASS-THROUGH OF THESE COSTS TO THE RATE PAYERS OR NOT. THAT IS EXACTLY WHAT IT DID IN LAKE. THEY SAY THE COMMISSION DOESN'T HAVE JURISDICTION TO DO THAT. THE COMMISSION AFFECTED VERY SUBSTANTIAL LEGAL RIGHTS, WHEN IT DENIED APPROVAL OF THE LAKE SETTLEMENT. $30 MILLION SETTLEMENT. IT WENT AWAY BECAUSE THE COMMISSION TURNED IT DOWN, AND THE COMMISSION TURNED IT DOWN PRECISELY BECAUSE IT SAID IT PAYS MORE THAN WE APPROVED.

LET ME ASK YOU A QUESTION HERE. WHAT WOULD BE THE PRACTICAL EFFECT OF, IF THIS COURT DECIDED THAT THE COMMISSION SHOULD HAVE, IN FACT, ENTERTAINED YOUR DECLARATORY JUDGMENT PETITION? AS I UNDERSTAND IT, THE CIRCUIT COURT ACTION HAS COME TO A CONCLUSION?

WELL, THE LAKE --

THE LAKE.

IT HAS BEEN TRIED. IT IS ON APPEAL. THE DADE IS IN --

WHAT WOULD BE THE PRACTICAL EFFECT OF US DOING THAT? WHAT WOULD HAPPEN TO WHAT THE CIRCUIT COURT DID?

IF YOU REVERSED AND THE PSC ADJUDICATED THE PETITION ON THE MERITS, WE WOULD FINALLY HAVE A GUIDE POST AS TO WHAT IT IS THE PSC THOUGHT IT APPROVED AND WHAT IT IS GOING TO PASS THROUGH TO THE RATE PAYERS FOR COST RECOVERY, AND THAT IS ALL WE WOULD HAVE. WHAT IMPACT THAT HAS ON THE CIRCUIT COURT LITIGATION, IF ANY, IS FOR THE COURT TO DECIDE. THAT IS THE POINT THAT THE THIRD CIRCUIT MADE IN CROSSROADS. IT MAY HAVE AN IMPACT. IT MAY NOT HAVE AN IMPACT. THE PARTIES MAY DISAGREE ON AN IMPACT, BUT AT LEAST WE WILL KNOW THAT THE FINAL ARBITOR OF THE PASS-THROUGH TO THE RATE PAYERS, THE PSC, HAS TOLD US WHAT IT UNDERSTOOD IT APPROVED IN '91 AND WHAT IS GOING TO BE THE GUIDE POST FOR WHAT IT APPROVED FOR PASS-THROUGH. I WOULD LIKE TO RESPOND, JUSTICE LEWIS, FOR THE CASES WE RELY ON FOR THE RAES JUDICADA POSITION. THAT REQUIRES ON THE MERITS, I CITE A SUPREME COURT CASE IN OUR BRIEF, THE TURKEY CREEK CASE, AS DECIDED BY THE PUBLIC SERVICE COMMISSION, APPLYING FLORIDA LAW. ALSO THE DECISION THAT THE DECISION ALPHINALITY SHOULD NOT BE APPLIED IN TOO DOCTRINE OF A FASHION. THAT IS WHAT THE COURT DECIDED HERE. McCAUSE COMMUNICATIONS -- HUH CAUSE COMMUNICATIONS -- McCAW COMMUNICATIONS AND ALSO THAT IT DOES NOT TRANSLATE PRECISELY FROM THE JUDICIAL. TO THE DECISION-MAKING. THE FIRST DISTRICT'S DECISION IN PSC IN SULLIVAN CASE AND ALSO THE ENVIRONMENTAL REGULATION CASE DECIDED BY THIS COURT IN 1987.

THANK YOU VERY MUCH, COUNSEL.

THANK YOU.

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