In In re Erving Industries, Inc. et al
., the Court held that the supply of electricity constituted the sale of goods so that the electric supplier was entitled to assert a 503(b)(9) administrative expense claim. The Court’s opinion is very well-reasoned and its opinion along with a substantial appendix on the electric industry can be found here
In short, Erving Industries, Inc., along with certain of its affiliates, filed for Chapter 11 on April 20, 2009. Constellation NewEnergy, Inc. filed an administrative expense claim under 503(b)(9) in the amount of $281,667.88 (the “Claim”). The Debtors and NewEnergy agreed that the amount sought in the Claim accurately represented the charges for electricity supplied to the Debtors during the relevant 20 day period, but the Debtors objected to the Claim on the grounds that electricity is not a good within the meaning of 503(b)(9). The Debtors also contended that NewEnergy was a utility provider.
NewEnergy maintained that it did not perform the traditional service functions commonly associated with electric utilities. It argued that while regulated utilities are responsible for the ultimate delivery of electricity to customers, NewEnergy says it has no role in the delivery and is involved solely in the sale of electricity as a “competitive supplier.”