Contractual interpretation of "fuel" in a power purchase agreement excluded RLNG and was limited to natural gas.

The SC held that a commercial contract must be construed according to its language, context, surrounding correspondence, and course of dealing, and not by importing an external statutory definition. On that approach, the expression "fuel" in the amended power purchase agreement was confined to natural gas in its natural form; RLNG was not treated as synonymous with natural gas, and occasional permissive use in exceptional circumstances did not expand the contractual meaning or amount to waiver. The appellate tribunal's contrary view was set aside and the commission's interpretation of the contract was restored.

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Issues: Whether the expression "fuel" in the power purchase agreement, as amended, included regasified liquefied natural gas or was confined to natural gas in its natural form.

Analysis: The contractual language, read in its commercial and contextual setting, showed that the parties repeatedly structured the arrangement around reasonably priced fuel for power generation. The original and amended agreements, the surrounding correspondence, and the conduct of the parties indicated that only natural gas in its natural form was contemplated. Sporadic permissive use of RLNG in exceptional circumstances did not alter the contractual meaning or create a waiver. The definition of natural gas under another regulatory statute was held to be irrelevant to construing the private contract. Applying ordinary contractual principles, business efficacy, and commercial understanding, RLNG was not synonymous with natural gas for the purpose of the agreement.

Conclusion: The term "fuel" did not include RLNG and was confined to natural gas in its natural form; the appeal succeeded.

Final Conclusion: The appellate tribunal's view was set aside, and the commission's interpretation of the contract was restored.

Ratio Decidendi: A commercial contract must be construed according to its language, context, and the parties' intended commercial bargain, and an implied wider meaning cannot be read in where the contract, surrounding circumstances, and course of dealing show a narrower intended scope.

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