Watson Cogeneration Co. v. Southern Cal. Edison Co. CA2/1

Filed 9/30/14 Watson Cogeneration Co. v. Southern Cal. Edison Co. CA2/1 Opinion follwing rehearing NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

WATSON COGENERATION B251746 COMPANY, (Los Angeles County Plaintiff and Appellant, Super. Ct. No. BC473092)

v.

SOUTHERN CALIFORNIA EDISON COMPANY,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County. Gregory W. Alarcon, Judge. Affirmed. Rovens Lamb and Steven A. Lamb for Plaintiff and Appellant Carlsmith Ball, James Polish; Southern California Edison Company, Leon Bass, Jr., and Michael J. Barrett for Defendant and Respondent.

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This is an action for breach of contract and unjust enrichment by an energy producer, Watson Cogeneration Company (Watson), against an energy buyer, Southern California Edison Company (SCE). The parties do not dispute that SCE agreed to purchase energy from Watson at a specified price for a 20-year period. They disagree whether that 20-year period terminated on December 31, 2007, as SCE contends, or on April 5, 2008, as Watson contends. The trial court agreed with SCE’s interpretation of the agreement and entered judgment in its favor on both causes of action. We affirm. FACTS AND PROCEEDINGS BELOW The following facts are undisputed. Watson owns a cogeneration facility that produces energy for refining petroleum and running electricity-generating turbines. In 1984, Watson entered into a contract to sell the excess energy it produced to SCE at the agreed-on price for a period of 20 years. (The parties refer to this agreement as the Power Purchase Contract or PPC.) The PPC provided in section 1.8 that it “shall continue in effect for a period of 20 years beginning on the Firm Operation Date.” The “Firm Operation Date” was defined in section 2.15 of the contract as: “The date agreed on by the Parties on which each generating unit(s) of the Generating Facility is determined to be a reliable source of generation and on which such unit can be reasonably expected to operate continuously at its effective rating (expressed in kW).” The PPC further provided in section 1.7 that the “Firm Operation Date for the Generating Facility will be on or before December 31, 1988.” In 1986, SCE sent Watson some proposed modifications of the PPC including a modification of the definition of “Firm Operation Date” in section 2.15. (We show the proposed language in italics and the existing language in bracketed strikeout-type.) “Firm Operation Date: The date agreed on by the Parties on which [each generating unit(s)] all the generating units of the Generating Facility [is] are determined to be [a] reliable [source] sources of generation and on which such [unit] units can be reasonably