In re NE OPCO, Inc.

In re NE OPCO, Inc.

Opinion

 [*236] Related D.I. 273

OPINION¹

Date: November 1, 2013

Sontchi, J.

INTRODUCTION

Before the Court is a request for an administrative expense claim under section 503(b)(9) of the Bankruptcy Code. The movant, Westfield Gas & Electric Light Department ("Westfield"), a utility provider, seeks an administrative expense for the electricity and natural gas it provided to the debtors (the "Debtors") in the 20-days prior to the Debtors' bankruptcy.

Section 503(b)(9) claims are only available to vendors of "goods" and not to [*237]  service providers. While this Court has previously adopted the definition of goods in the Uniform Commercial Code ("U.C.C."), it has not addressed whether electricity is  [**2] a good. Indeed, courts are not in agreement on the issue. Here the Court weighs into the debate on whether electricity is considered a good — and finds that it is not.

However, it is undisputed that natural gas is a good. As such, the Court is called upon to determine whether all of the costs associated with the sale and delivery of natural gas are entitled to administrative priority. In making that determination, the Court must apply either (i) the "predominate purpose" test in which the Court looks to the "primary" purpose of the transaction to decide whether the utility provided goods or services — if the primary purpose of the transaction is to provide goods then Westfield would have an administrative priority claim for all of the billed items; and if the primary purpose was to provide services, Westfield would not have an administrative claim; or (ii) the "apportionment" test in which the amount attributable to the goods is provided administrative priority status and the amount attributable to services is not. This Court adopts the apportionment test. As such, the Court will examine each portion of the bill to determine whether the line item was for a good or a service. The Court  [**3] will then consider whether Westfield has provided sufficient evidence of the value of its claim and whether the Court, in its discretion, should order the immediate payment of the claim.

At the end of the day, the Court will grant Westfield an administrative expense claim, pursuant to section 503(b)(9), in the amount of $78.08 for the value of the natural gas (with sufficient detail) supplied to the Debtors in the 20-days prior to the Petition Date. However, the Court will not require immediate payment of the claim.

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