Heard: May 5, 2016.
actions commenced in the Supreme Judicial Court for the
county of Suffolk on October 26 and November 2, 2015.
cases were reported by Cordy, J.
Thaddeus A. Heuer (Adam P. Kahn & Jesse Harlan Alderman
with him) for ENGIE Gas & LNG LLC.
K. Ismay for Conservation Law Foundation. Seth Schofield,
Assistant Attorney General, for the Attorney General.
H. Hayman, Special Assistant Attorney General (Francis R.
Powell, Special Assistant Attorney General, with him) for the
Department of Public Utilities.
M. Kimball & Matthew A. Sanders, for NSTAR Electric
Company & others, amici curae, submitted a brief.
Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk,
& Hines, JJ. 
consolidated appeals are before us on a single justice's
reservation and report of challenges made to an order of the
Department of Public Utilities (department). Those challenges
raise the question of the department's authority to
review and approve ratepayer-backed, long-term contracts
entered into by electric distribution companies for
additional natural gas pipeline capacity in the Commonwealth
pursuant to G. L. c. 164, § 94A, which requires gas and
electric companies to receive departmental approval for any
contract for the purchase of gas or electricity lasting
longer than one year.
plaintiffs, ENGIE Gas & LNG LLC and Conservation Law
Foundation, contend that the order amounted to improper
rulemaking in violation of the Administrative Procedure Act,
G. L. c. 30A. They also argue that the department's
determination that it has authority pursuant to G. L. c. 164,
§ 94A, to approve such contracts constitutes an error of
law because it contravenes G. L. c. 164, § 94A, as
amended through St. 1997, c. 164 (restructuring
disagree that the order of the department is an improperly
promulgated rule or regulation. We nevertheless reach the
statutory question presented by the plaintiffs, and conclude
that the order is invalid in light of the statutory language
and purpose of G. L. c. 164, § 94A, as amended by the
restructuring act, because, among other things, it would
undermine the main objectives of the act and reexpose
ratepayers to the types of financial risks from which the
Legislature sought to protect them., 
department regulates the rates that both electric
distribution companies and local distribution natural gas
may charge their customers (ratepayers). G. L. c. 164, §
94A. See Fitchburg Gas & Elec. Light Co.
v. Department of Pub. Utils., 460 Mass.
800, 801 (2011); Attorney Gen, v.
Department of Pub. Utils., 453 Mass. 191, 192
2015, the Department of Energy Resources (DOER) filed a
petition asking the department to investigate the means by
which new natural gas delivery capacity might be added to
the New England market in order to mitigate price volatility
experienced by ratepayers in the Commonwealth, especially in
the winter months. See D.P.U. 15-37 (Oct. 2, 2015) . The DOER
specifically asked whether the department, pursuant to its
authority under G. L. c. 164, § 94A, could approve
long-term contracts by Massachusetts electric
distribution companies for the purchase and resale of
interstate natural gas pipeline capacity. The DOER stated
that the ultimate goal of such purchases would be to lower
"gas constraint-driven high prices" for electricity
in New England by lowering the prices, particularly in the
wintertime, of wholesale electricity across the region.
support of its request, the DOER asserted that gas pipeline
constraints have caused unreasonably high winter electric
prices in New England. Unlike local natural gas distribution
companies, which regularly contract for gas capacity,
electric generators that use natural gas to produce
electricity are generally unwilling or unable to
enter into long-term contracts to secure firm gas capacity.
For these generators, there is added risk for such
contracting because there is no means by which they can be
reasonably assured of receiving enough revenue to cover the
cost of securing the gas capacity over the course of each
year. Pipeline companies, on the other hand, are not willing
to build new pipeline capacity without having long-term
contracts in place. Thus, pipeline companies do not have
sufficient assurances such that they are willing to build
additional pipeline capacity for natural gas-fired electric
generators, despite the increasing natural gas demand for
heating and as a source of supply for electric power. The
DOER characterized this situation as a "mismatch"
of needs and incentives that requires a "solution."
the DOER's proposal, (1) the department would authorize,
pursuant to G. L. c. 164, § 94A, electric distribution
companies to enter into contracts to purchase gas pipeline
transportation capacity to be funded by the
Commonwealth's ratepayers through rates set and approved
by the department; (2) the pipeline owners (which in this
case will include affiliates of electric distribution
companies) will use those transportation contracts to help
finance the construction of new gas pipeline capacity in the
region; (3) after the pipelines are expanded, the electric
distribution companies will release (resell) their
contracted-for capacity to electric generators or "into
the market"; and (4) the release of that capacity
will increase gas supply and thus lower the wholesale price
of gas and electricity.
that the question was one of first impression, the DOER asked
the department to determine whether "(1) there is an
innovative mechanism for electric distribution companies . .
. or other suitable parties to secure new, incremental gas
delivery capacity into the region to the benefit of electric
ratepayers; (2) review for cost-recovery of [electric
distribution company] contracts for natural gas capacity by
the [d]epartment under G. L. c. 164, § 94A ... is
appropriate; and (3) the standard of review the [d]epartment
would apply to contracts submitted for approval under that
section should be different." The DOER stated that
ratepayer-funded gas capacity contracts entered into by
electric distribution companies would solve the
"mismatch" problem by providing sufficient
financial assurance to pipeline companies to build new
pipelines and infrastructure in order to provide gas to
natural gas-fired electric generators.
response to the petition of the DOER, the department opened
an investigation into the means by which new natural gas
capacity might be added to the New England market, including
measures that electric distribution companies might pursue.
After considering input from stakeholders, including written
comments submitted by the plaintiffs, the department issued
D.P.U. 15-37, entitled, "Order Determining Department
Authority Under G. L. c. 164, § 94A" (order). The
department determined that the plain language of § 94A
provides the department with the statutory authority to
approve gas capacity contracts entered into by electric
distribution companies, so long as the department first
determines that such long-term contracts are in the public
interest. D.P.U. 15-37, at 19, 43. The department further
concluded that it could properly allow cost recovery for the
contracts, including the cost of building the necessary
pipeline infrastructure, through electric distribution rates.
Id. at 12, 46. The department additionally
determined that its findings were consistent with the
restructuring act because the contracts entered into by the
electric distribution companies would not result in the
companies' reentry to producing, manufacturing, or
generating electricity at wholesale, as contemplated by the
restructuring act. Id. at 26-27.
order further outlined the filing requirements and standard
of review applicable to future proceedings seeking approval
of ratepayer-backed contracts for gas capacity entered into
by electric distribution companies. Id. at 36,
44-45. Since issuing the order, the department has docketed
three petitions by electric distribution companies for the
approval of such contracts; however, none has been approved
at this time. The contemplated contracts are for a term of
October and November, 2015, the plaintiffs filed separate
petitions in the Supreme Judicial Court for Suffolk County
pursuant to G. L. c. 25, § 5, asking that the order be
set aside on the ground that it is based on an erroneous
interpretation of law. A consolidated hearing was held before
the single justice, who denied the motions for judgment of
default and reserved and reported the matters to the full
Propriety of appeal.
first consider whether this appeal is properly before us. The
plaintiffs ask the court to review the department's order
pursuant to G. L. c. 25, § 5, which authorizes "an
appeal as to matters of law from any final decision, order or
ruling." The department argues, however, that the order
is not the product of an adjudicatory proceeding, nor did it
adjudicate the rights of the plaintiffs; therefore, it is not
appealable under § 5. See Providence & Worcester
R.R. v. Energy Facilities Siting Bd.,
453 Mass. 135, 140 (2009) ("A decision is
'final' for purposes of taking an immediate appeal if
it completely adjudicates the rights of the parties, leaving
nothing further to be decided").
previously have held that where, as here, an agency
determines that it has statutory authority to act, but has
not yet exercised that authority, "such a decision is
not 'final' for the purposes of judicial review under
G. L. c. 25, § 5." Id. Nevertheless, we
reach the merits of the question of law submitted to us by
the parties because "the case has been fully briefed on
the merits, . . . there is a public interest in obtaining a
prompt answer to the question, and . . . the answer . . . is
reasonably clear." Id., quoting Brown
v. Guerrier, 390 Mass. 631, 632 (1983) .
Laws c. 164, § 94A, provides in relevant part that
"[n]o gas or electric company shall hereafter enter into
a contract for the purchase of gas or electricity covering a
period in excess of one year without the approval of the
department, unless such contract contains a provision
subjecting the price to be paid thereunder for gas or
electricity to review and determination by the department in
any proceeding brought under [§ 93 or 94] ."
order, the department concluded that the plain language of
§ 94A provides it with the authority to review and
approve "the purchase of gas or electricity" by
"gas or electric companies." D.P.U. 15-37, at 19.
It reasoned that the word "'or' ... is used to
list the entities (gas and electric companies) and the
products (gas and electric purchases) and does not limit one
type of company or one type of product." Id.
Rather, the department ruled that the provision grants it
broad "authority over both electric and gas distribution
companies, without direct limiting language."
Id. The department further concluded that because
the meaning of the statute could be discerned from the plain
language, the department need not "consider legislative
history or doctrines of statutory construction."
Id. Moreover, the department found that the
restructuring act did not present an impediment to electric
distribution companies contracting for natural gas capacity
subject to department review and approval because the
framework established by the department would not result in
the electric distribution companies' reentry to
producing, manufacturing, or generating electricity for sale
at wholesale, as contemplated by the restructuring act.
Id. at 27. See St. 1997, c. 164, § 193.
plaintiffs counter that this interpretation of § 94A
misapprehends the rules of statutory construction and is
inconsistent with the larger statutory context of c. 164, as
well as legislative policymaking embodied in the
Standard of review.
review the validity of a policy adopted by an agency charged
with implementing and enforcing State statutes under the same
two-part framework used to determine whether regulations
promulgated by an agency are valid. Franklin Office Park
Realty Corp. v.Commissioner of the
Dep't of Envtl. Protection, 466 Mass. 454, 459-460
(2013) . First, we employ "the conventional tools of
statutory interpretation" to determine "whether the
Legislature has spoken with certainty on the topic in
question." Goldbergv.Board of
Health of Granby, 444 Mass. 627, 632-633 (2005). Where
the court determines that a statute is ...