Telephone Users Ass'n v. Public Service Com'n of D. C.

Decision Date06 April 1973
Docket NumberNo. 6819.,No. 6846.,6819.,6846.
Citation304 A.2d 293
PartiesTELEPHONE USERS ASSOCIATION, Petitioner, v. PUBLIC SERVICE COMMISSION OF the DISTRICT OF COLUMBIA, Respondent. The Chesapeake and Potomac Telephone Company, Intervenor. The CHESAPEAKE AND POTOMAC TELEPHONE COMPANY, Petitioner, v. PUBLIC SERVICE COMMISSION OF the DISTRICT OF COLUMBIA, Respondent.
CourtD.C. Court of Appeals

Robert A. Levetown, Washington, D. C., with whom Alfred Winchell Whittaker and John P. Barnes, Washington, D. C., were on the brief, for the petitioner and the intervenor, The Chesapeake and Potomac Telephone Co.

Arthur S. Curtis, Washington, D. C., for petitioner Tel. Users Ass'n.

C. Belden White, II, and Linus H. Deeny, Assistant Corp. Counsels, Washington, D. C., with whom C. Francis Murphy, Corp. Counsel, Washington, D. C., was on the brief, for respondent.

Before FICKLING, KERN and YEAGLEY, Associate Judges.

KERN, Associate Judge:

Telephone Users Association, Inc. (TUA) and the Chesapeake and Potomac Telephone Company (C&P) each filed a petition of appeal from an order entered by the Public Service Commission of the District of Columbia (Commission) authorizing C&P to increase the rates it charged for telephone service rendered within the District of Columbia. We consolidated these appeals for argument and decision.

In essence, TUA contends that there were certain deficiencies in the Commission's proceedings serious enough to invalidate its order and that this order was not supported by the evidence. C&P argues in its appeal that the Commission erroneously determined the dollar amounts of C&P's (a) investment and (b) operating expenses with the result that the increase in telephone rates authorized by the Commission is insufficient to afford the company a reasonable opportunity to earn a fair rate of return on its investment.

I.

We may entertain TUA's appeal and consider its contentions under the applicable statute1 only if it is a "person or corporation affected by" the Commission's order in this case. See United States v. Public Utilities Commission, 80 U.S.App. D.C. 227, 151 F.2d 609 (1945). Since the business of courts is to decide concrete controversies rather than render advisory opinions, one who seeks judicial review of agency action must show the impact of such action on himself. See Davis, Standing: Taxpayers and Others, 35 U.Chi.L.

Rev. 601, 617 (1968). ("[T]he federal courts have consistently adhered to one major proposition without exception: One who has no interest of his own at stake always lacks standing.") In the instant case, TUA's petition of appeal to this court neither alleges nor recites facts to show that it will be directly affected by the Commission's order. See Interstate Electric v. Federal Power Commission, 164 F. 2d 485, 486 (9th Cir. 1947).

The record of the proceedings before the Commission contains a petition by TUA for leave to intervene alleging that it (1) is a District of Columbia non-profit association, (2) is "itself a telephone user and will be affected by any order as to local rates" and (3) "represents others similarly situated."

The administrative record also contains an answer by C&P to TUA's intervention.

(1) alleging that, according to its records (a) TUA does not itself subscribe to telephone service, and (b) TUA's attorney in this proceeding has subscribed for and is billed for that telephone number under which TUA is listed in the telephone directory;

(2) citing a comment by the Federal Communications Commission in a Bell System rate case that "[I]t appears that the association [TUA] is, for all intents and purposes, the alter ego of its attorney," 31 Fed.Reg. 9888 (1966), and,

(3) pointing to a statement by TUA's attorney on the record to the Commission during a prior telephone rate case (Formal Case No. 538, June 7, 1971) that, "We [TUA] don't function on a membership basis." (Tr. at 3725.)

We note that despite the Commission's Rule 5.3(e) requiring that "every petition . . . shall contain . . . . [v]erification and signature of petitioner . . . and the signature and address of the attorney," [emphasis added], only TUA's attorney signed TUA's petition to intervene.2

We note also that the Commission denied TUA leave to intervene in a 1965 telephone rate case (Formal Case No. 506, Order No. 4938, June 4, 1965) and commented in a 1969 rate case that "there is almost no information in the record" about TUA. (Formal Case No. 538, Order No. 5460, Mar. 19, 1971.) We find ourselves in much the same predicament because (1) TUA presented no testimony or exhibits in this case and (2) the Commission's order (Formal Case No. 570, Order No. 5483, Nov. 27, 1971, p. 3) granting TUA leave to intervene contains no explanation for its decision except to refer to TUA as "a telephone user."

We have no doubt that one who alleges that he uses and pays for telephone service would be affected by any order increasing telephone rates. See Telephone

Users Association v. FCC, 126 U.S.App. D.C. 178, 375 F.2d 923 (1967). However, this record does not contain any allegation or evidence that TUA, as contrasted with its attorney, is itself paying for the telephone it uses or otherwise has a "direct stake in the outcome" of this proceeding. Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972).3 See Winston v. Zoning Board of Appeals, 407 Ill. 588, 95 N.E.2d 864, 868-869 (1950). We conclude that TUA has failed to show it will be "affected by" the Commission's order to a legally cognizable extent. Accordingly, we are precluded from reviewing TUA's appeal and its petition must be dismissed.

II.

In considering C&P's appeal we are obliged to keep in mind that Congress has vested rate-making authority in the Commission and that the scope of our review of its final rate orders is limited.4 The United States Court of Appeals for this Circuit, formerly vested with jurisdiction over Public Service Commission orders, described what it deemed to be the proper scope of judicial review:

Our role as a reviewing court is not to make an independent determination as to whether fares fixed by the Commission are just and reasonable, but rather to insure that the Commission, in exercising its rate-making power, has acted rationally and lawfully. Our function is normally exhausted when we have determined that the Commission has respected procedural requirements, has made findings based on substantial evidence, and has applied the correct legal standards to its substantive deliberations. . . . [Williams v. Washington Metropolitan Area Transit Commission, 134 U.S.App.D.C. 342, 362, 415 F.2d 922, 942-943 (1968), cert. denied, 393 U.S. 1081, 89 S.Ct. 860, 21 L.Ed.2d 773 (1969).] (Footnote omitted.)

The Supreme Court has recently summarized the responsibilities of a reviewing court:

First, it must determine whether the Commission's order, viewed in light of the relevant facts and of the Commission's broad regulatory duties, abused or exceeded its authority. Second, the court must examine the manner in which the Commission has employed the methods of regulation which it has itself selected, and must decide whether each of the order's essential elements is supported by substantial evidence. Third, the court must determine whether the order may reasonably be expected to maintain financial integrity, attract necessary capital, and fairly compensate investors for the risks they have assumed, and yet provide appropriate protection to the relevant public interests, both existing and foreseeable. . . . (Emphasis added.) [Permian Basin Area Rate Cases, 390 U.S. 747, 791-792, 88 S.Ct. 1344, 1373, 20 L.Ed.2d 312 (1968), aff'd in part and rev'd in part sub nom. Skelly Oil Co. v. Federal Power Commission, 375 F.2d 6 (10th Cir. 1967).

Basically, C&P claims that the Commission's order is confiscatory because the rates it is now authorized to charge for services rendered are still insufficient to afford it even a reasonable opportunity to earn the return on its investment which the Commission approved. See Re PEPCO, 83 P.U.R.3d 113, 127 (D.C. PSC 1970).5 We now describe briefly the Commission's rate-making calculation in this case so as to place C&P's argument in perspective.

Rate-making for a particular utility is in essence making a forecast of its future financial status upon the basis of its known performance during a span of time in the immediate past, viz., a "test period". Re C&P Co., 57 P.U.R.3d 1, 26 (1964). Michigan Wisconsin Pipe Line Co. v. Federal Power Commission, 263 F.2d 553, 555-556 (6th Cir. 1959). Using 1971 as the test year, the Commission first determined C&P's weighted average rate base6 to be about 224 million dollars and a fair and reasonable rate of return on such investment to be 81/2%.7 It then multiplied the rate base of 224 million dollars by the 81/2% rate of return to obtain C&P's revenue requirement,8 which amounts to about 19 million dollars. Since the revenue requirement is the result of the rate base times the rate of return, its determination will be dependent upon the value of each of these two components.

The Commission also determined C&P's net revenue for the 1971 test year to be about 13 million dollars. The Commission then found that C&P's actual net revenue fell 6 million dolars short of the 19 million dollar revenue requirement it had previously determined to be a fair and reasonable return on C&P's investment. Therefore, the Commission authorized C&P to make up this difference, adjusted for certain tax factors, by increasing the rates it charged its customers. (Formal Case No 570, Order No. 5518, July 6, 1972, at 20-23.)

It may be seen that the Commission's determination as to the rates C&P may charge its customers to meet its revenue requirement is directly affected by the Commission's findings of the amount of (1) C&P's rate base and (2) C&P's net revenues, the latter derived by subtracting appropriate expenses from total...

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