Ark. Gas Consumers v. Ark. Public Service

• Decision Date: 18 September 2003
• Docket Number: No. 02-1312.,02-1312.
• Citation: 354 Ark. 37,118 S.W.3d 109
• Parties: ARKANSAS GAS CONSUMERS, INC. v. ARKANSAS PUBLIC SERVICE COMMISSION.
• Court: Arkansas Supreme Court

118 S.W.3d 109

354 Ark. 37

ARKANSAS GAS CONSUMERS, INC. v. ARKANSAS PUBLIC SERVICE COMMISSION.

No. 02-1312.

Supreme Court of Arkansas.

September 18, 2003.

Rose Law Firm, by: Stephen N. Joiner and Charlene J. Kim, Little Rock, for appellant.

Charles J. Harder, Little Rock, and Jeffrey L. Dangeau, Fayetteville, for Reliant Energy Arkla and Arkansas Western Gas Company.

Mike Beebe, Atty. Gen., by: Eric B. Estes, Asst. Atty. Gen., for appellee.

Gregory Glisich, Little Rock, for appellee.

ROBERT L. BROWN, Justice.

The appellant, Arkansas Gas Consumers, Inc. (Gas Consumers), appeals from orders of the appellee, the Arkansas Public Service Commission (PSC), which implemented the Temporary Low Income Customer Gas Reconnection Policy (Policy). Gas Consumers' primary argument is that the PSC exceeded its authority in creating the program. We agree that the legislative authority is lacking, and we reverse the orders of the PSC relevant to the Policy and further reverse the decision of the Arkansas Court of Appeals in this same cause.

The facts are these. On October 25, 2001, the PSC published Order No. 1, in which it proposed the Policy. The PSC noted that because of the harsh 2000-2001 winter and the resulting record-high natural gas prices, over 30,000 Arkansas gas customers were disconnected for nonpayment of gas bills, with 29,500 still disconnected. The PSC stated that these customers owed past-due bills generally ranging from an average of $261 to $350, with some customers owing in excess of $1000. The PSC further observed that in order to be reconnected for the 2001-2002 winter under existing regulations, these customers would have to make arrangements to pay all past-due amounts. They would also have to pay a reconnection fee and possibly a new service deposit. The PSC recognized that many of these customers were low-income families and that without assistance, they would face another winter without heat, which could threaten their health and safety. The PSC stated that, because the public interest required it, it would immediately consider an extraordinary program to assist these customers. The PSC proposed the Policy, which had as its salient points the reconnection of disconnected gas customers who qualified and payment of their past-due debt and future debt which would be assessed against all ratepayers and then repaid by Policy participants. The PSC set a deadline for comments relating to the Policy and set a date for a hearing on the matter for November 9, 2001. All three of Arkansas' gas utilities, Arkansas Oklahoma Gas Corporation (AOG), Reliant Energy Arkla (Arkla), and Arkansas Western Gas Company (AWG), as well as the Arkansas Attorney General, Gas Consumers, and the PSC's staff filed initial comments and replies regarding the PSC's proposal.

On November 9, 2001, the PSC held a public hearing on its proposed Policy. At the hearing, testimony was presented from those who filed initial comments and replies as well as from community members and former gas utility customers. That same day, the PSC issued Order No. 2 in which it implemented the Policy. The Policy provided the following:

(1) Eligibility for the program covered those low-income customers disconnected from service for non-payment between January 1, 2001, and November 1, 2001, who remained disconnected as of the date of the order and whose familial income did not exceed 200% of the approved Federal Poverty Guidelines (2) Eligibility was to be determined by the gas utilities' customer service representatives based on information provided them by the low-income customers making requests to participate in the Policy; the final date for enrollment in the Policy was set for December 31, 2001;

(3) Debits and credits to be flowed through each Gas Companies' Purchased Gas Adjustment ("PGA") or Gas Supply Rate ("GSR") or by a bill line item were to be limited to the outstanding indebtedness of and payments received from those customers actually enrolled in the Policy.¹ Debits were to include not only a customer's then-existing past-due amount, but also any new unpaid debt incurred while participating in the Policy during the winter season (from November 1, 2001, to April 30, 2002);

(4) Credits were to include any payment received from Policy participants toward the outstanding debt debited to the PGA, GSR, or bill line item authorized by the Policy, whether incurred before admission to the program or during participation;

(5) Gas companies were permitted to recover the total bad-debt write-off for Policy participants against all ratepayers "over a single twelve (12) month amortization period[;]"

(6) After reconnection of a Policy participant, the PSC's General Service Rules regarding reconnection after cut-off and security deposits were once again to apply;

(7) All Policy participants were to remain in the levelized billing program at least for the term of the Delayed Payment Agreement;

(8) Each Policy Participant was to be mailed a copy of the Delayed Payment Agreement;

(9) Gas utilities were to cancel any contract for debt collection against any Policy participants upon enrollment in the Policy; and

(10) Gas utilities were to maintain all necessary records relating to the Policy for each participant in the program.

In accordance with the original proposal of the Policy, each low-income participant was to be reconnected, subject to the following conditions:

(1) Customers had to enter into a Delayed Payment Agreement (DPA) with the gas utility and agree to pay "a small amount" each month towards any past-due bill;

(2) The monthly DPA amount was to be determined based upon each participant's ability to pay; however, no DPA was to extend beyond a term of thirty-six months;

(3) Participants had to pay the utility's reconnection fee in full prior to service being restored; participants could not be billed for the reconnection fee;

(4) No new deposits were to be required by the utilities of any participant in the Policy;

(5) Participants had to agree to participate in the utility's levelized billing program.

On November 13, 2001, Gas Consumers filed a petition for rehearing alleging that the PSC exceeded its legislative authority by mandating the Policy. Gas Consumers also requested a stay and an expedited ruling. The next day, on November 14, 2001, the PSC issued Order No. 3, amending its Order No. 2 and expanding eligibility in the Policy to cover low-income customers disconnected for nonpayment between January 1, 2001, and December 31, 2001, and who also remained disconnected as of the date of the order or who were scheduled for disconnection on or before December 31, 2001.

Following a letter request for clarification by AOG, the PSC issued Order No. 4 on November 19, 2001, which read:

By Order No. 2, as amended by Errata Order No. 3, it was and remains the Commission's intent to provide a program that will enable low income residential customers disconnected from the natural gas utility system to be reconnected before the onset of cold weather. The TLICGRP is intended to assist certain low income customers [i.e., those whose total family income does not exceed 200% of the currently approved Federal Poverty Guidelines] who are either currently disconnected or are scheduled to be disconnected by December 31, 2001, due to their default on payment for gas usage during the winter heating season of 2000-2001.

On December 12, 2001, Gas Consumers filed a second petition for rehearing and requested that the PSC reconsider Order Nos. 3 and 4. The next day, on December 13, 2001, the PSC issued Order No. 5 in which it granted Gas Consumers' initial petition for rehearing solely for the purpose of consolidating both of Gas Consumers' petitions for rehearing. Finally, on January 9, 2002, the PSC issued Order No. 6 in which it denied both of Gas Consumers' petitions for rehearing and found that its previous Order Nos. 2, 3, and 4 were supported by the public record and were in the public interest.

Gas Consumers appealed the PSC's decision to our court of appeals which affirmed the PSC. See Arkansas Gas Consumers, Inc., v. Arkansas Pub. Serv. Comm'n, 80 Ark.App. 1, 91 S.W.3d 75 (2002). Gas Consumers then petitioned this court for review, which we granted on January 30, 2003. When this court grants a petition for review from a decision by the court of appeals, it reviews the appeal as if it were originally filed in this court. See Laird v. Shelnut, 348 Ark. 632, 74 S.W.3d 206 (2002).

I. Mootness

We first address whether the issue of Gas Consumers' appeal is moot. The Attorney General maintains that it is and points to Gas Consumers' own petition for a writ of prohibition and stay of order before this court in Arkansas Gas Consumers, Inc. v. Arkansas Pub. Serv. Comm'n, No. 01-1274. In that petition, Gas Consumers stated that Policy-eligible customers were already enrolling in the Policy and that absent a stay, "any further contracts [would be] binding, and the utilities [would] not be required to make refunds of sums charged to the PGA or GSR mechanisms, even if the TLICGRP [the Policy] is revoked or found unlawful." The Attorney General contends that the finality of the Policy's implementation, as attested to by Gas Consumers, supports his mootness argument. In addition, the Attorney General maintains that there is no applicable remedy. He asserts that it is unlikely that any refund would be just and reasonable as the PSC affirmatively required the utilities to enter into long-term binding contracts with the Policy customers in this case.

Gas Consumers replies that this is a case capable of repetition and of evading review and further observes that it involves the public interest. Thus, Gas Consumers concludes, it falls within the exceptions to the mootness doctrine.

Gas Consumers correctly states the law. This court has held as follows regarding mootness:

A case is moot when any judgment rendered would have no practical legal...