Alabama Power Co. v. Alabama Public Service Com'n

• Decision Date: 05 November 1982
• Citation: 421 So.2d 1260
• Parties: ALABAMA POWER COMPANY v. ALABAMA PUBLIC SERVICE COMMISSION. 80-892.
• Court: Alabama Supreme Court

Page 1260

421 So.2d 1260

ALABAMA POWER COMPANY v. ALABAMA PUBLIC SERVICE COMMISSION.

80-892.

Supreme Court of Alabama.

Nov. 5, 1982.

John Bingham and Steven G. McKinney, Balch, Bingham, Baker, Hawthorne, Williams & Ward, Birmingham, for appellant.

Euel A. Screws, Jr. and James M. Edwards of Copeland, Franco, Screws & Gill, Montgomery, for appellee.

SHORES, Justice.

This is an appeal by Alabama Power Company from a rate order of the Alabama Public Service Commission, entered on August 14, 1981. Alabama Power filed with the Commission on January 20, 1981, a revised rate schedule and a new rate schedule, with a proposed effective date of March 1, 1981, pursuant to Ala.Code 1975, § 37-1-81(a). The rate schedule: (1) increased the charge for collection services from $1.00 per call to $3.00 per call; (2) increased the charge for connection services from $3.00 per connection to $5.00 per connection; (3) increased the charge for reconnection services from $3.00 per reconnection to $9.00 per reconnection; and (4) incorporated the changes required by the Commission's order in APSC Docket No. 17752, which dealt with the service standards of the Public Utility Regulatory Policies Act of 1978 ("PURPA").

By order of February 2, 1981, the Commission ordered the schedules suspended through August 31, 1981, and ordered a public hearing.

At the hearing on March 6, 1981, five exhibits were accepted into evidence:

Exhibit 1: Alabama Power's filing letter with revised tariff Rule 20 and new tariff Rule 24 attached;

Exhibit 2: The prepared testimony and cost study of Alabama Power's witness, Ernest Glass, Jr.;

Exhibit 3: Recommendation 30 of the 1978 Price Waterhouse and Company audit of Alabama Power's entire operation, which states:

"The amount of fixed fee charges that can be identified and billed to customers does not cover the actual costs the Company incurs in providing special services such as (a) collection calls, (b) service connections, and (c) service reconnections. We estimate that last year the difference between actual costs of these three services and the fixed fees received for them was at least $1 million. We recommend that the Company and the Public Service Commission review these fixed fee charges on a periodic basis to determine whether they cover the actual costs incurred by the Company to provide such services. Periodic revision of the fixed fee charge would ensure that the cost of those services is borne by customers who use them."

Exhibit 3(a): 1980 Price Waterhouse and Company follow-up study comments upon Recommendation 30.

Exhibit 4: Tariff Rule 20 as it was before Alabama Power's filing.

The participants at the public hearing were members of the Commission staff (the Commission itself was not present), the Attorney General's office, and Alabama Power.

The position of Alabama Power, as summarized in the testimony of Ernest Glass, Jr., the assistant comptroller, is as follows:

"Well, briefly, the experience of the company has been that we are incurring increasing costs in the performance of certain specific work relating to the establishment of accounts, reconnection services and collection calls. It's been several years since these costs have been updated, and it is our view that the costs of these services to customers should be borne by those that cause them to be incurred as opposed to being subsidized by ratepayers generally."

Mr. Glass was questioned by both the Attorney General's office and the Commission's staff. No other witnesses testified and no evidence has been offered or accepted since the March 6, 1981, hearing.

The Commission voted to reject the rate schedules insofar as they increase the identified charges and entered an order to that effect on August 14, 1981. Alabama Power filed a motion requesting reconsideration or rehearing, upon which the Commission took no action.

This appeal followed. We affirm in part.

Alabama Power argues that the utility's experience of out-of-pocket losses on collection,...