Attorney General v. Department of Public Utilities

Decision Date23 September 1983
Citation390 Mass. 208,455 N.E.2d 414
PartiesATTORNEY GENERAL v. DEPARTMENT OF PUBLIC UTILITIES et al. (and five companion cases). 1
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

Sarah E. Wald, Asst. Atty. Gen., for Attorney General.

Nicholas J. Scobbo, Jr., Boston (John R. Devereaux, Asst. Corp. Counsel, Boston, with him), for the city of Boston.

Charlie Donaldson, New York, for Massachusetts Public Interest Research Group.

Stanley U. Robinson, III, pro se.

Harold J. Keohane and John A. Detore, Sp. Asst. Attys. Gen., for Dept. of Public Utilities.

R.K. Gad, III, Boston (Douglas S. Horan and Roscoe Trimmier, Jr., Boston, with him), for Boston Edison Co.

Charles Harak, Boston, for South Middlesex Opportunity Council, submitted a brief.

Before HENNESSEY, C.J., and WILKINS, LIACOS, ABRAMS and O'CONNOR, JJ.

WILKINS, Justice.

On September 23, 1981, the board of directors of the Boston Edison Company (Edison) voted to cancel the construction in Plymouth of a second nuclear power plant, called Pilgrim II. 2 On October 16, 1981, Edison filed with the Department of Public Utilities (department) revised electric rate schedules providing for a general rate increase, effective November 1, 1981. Edison proposed to recover, as a cost of service reflected in its rates, its investment in Pilgrim II, that is, its share of the net costs of the project, estimated (after salvage) to exceed $278,000,000. 3 Pursuant to its authority under G.L. c. 25, § 18, the department suspended the proposed rates until the earlier of May 1, 1982, or its further order. The department then undertook what it characterized in its decision of April 30, 1982, as "probably the lengthiest and most complex rate case to have come before the Department in recent years."

All the appeals are from the department's April 30, 1982, decision (G.L. c. 25, § 5) and are before us on a reservation and report by a single justice. In large measure, these various appeals are challenges to the department's determination to permit Edison through its rates to amortize a portion of its investment in Pilgrim II. The department said in its decision that "the question presented by the demise of the Pilgrim II project is one of the most serious and the most controversial regulatory issues that the Department has ever confronted." There are collateral issues concerning (a) the department's treatment of tax benefits resulting from the abandonment of the project and (b) the department's approval of carrying charges on a portion of the amortized recovery. The city of Boston presents an entirely separate challenge to its street lighting rates. Before we discuss these substantive issues, we shall deal with procedural questions related to certain of the appeals. We shall then consider the principal issue presented in these appeals. We conclude that the department committed no error of law in its decision to permit Edison to recover as a cost of service a portion of its investment in Pilgrim II and to collect certain carrying charges. Finally, we shall discuss and reject the city of Boston's challenge to the street lighting rates.

Procedural Issues

The department and Edison argue that the appeal of Massachusetts Public Interest Research Group (MASSPIRG) was not seasonably filed and that it must be dismissed. We need not pass on this question to the extent the issues MASSPIRG raises are also raised by appellants whose appeals were timely. We could, in such a situation, simply treat MASSPIRG's brief as one filed by an amicus curiae. 4 There is, however, one issue raised by MASSPIRG not advanced by any other party in these appeals and, because of that issue, we must consider the timeliness of MASSPIRG's appeal.

Following the department's April 30, 1982, decision, various motions for reconsideration were filed. On May 20, pursuant to its authority under G.L. c. 25, § 5, the department granted an extension of time for the filing of any appeal from its April 30 decision until ten days after its final order on the motions for reconsideration. Among the motions filed was a motion of MASSPIRG that Commissioner Edward L. Selgrade (Commissioner Selgrade) recuse himself from further participation on the question of Edison's recovery of the cost of Pilgrim II. The department issued an order on July 20, 1982, concerning the various pending motions, including MASSPIRG's motion that Commissioner Selgrade recuse himself. Commissioner Selgrade declined to recuse himself from any portion of the proceeding, and the other two commissioners concurred in his decision. MASSPIRG states that the order was mailed on July 21, 1982.

On August 13, 1982, MASSPIRG filed its petition for appeal with the secretary of the department. That petition was not filed within ten days of the department's final order concerning the motions filed following the April 30 decision. In the circumstances, the April 30 decision was probably the final order from which, under G.L. c. 25, an appeal had to be taken within twenty days but for the ten day extension granted by the department. See Plymouth County Nuclear Information Comm., Inc. v. Energy Facilities Siting Council, 374 Mass. 236, 244-245, 372 N.E.2d 229 (1978). But we need not decide that point because the motion seeking Commissioner Selgrade's recusal was a new matter decided on July 20, 1982, and as to that matter MASSPIRG had twenty days from the date of service in which to appeal. G.L. c. 25, § 5.

MASSPIRG's petition for appeal, however, was not filed with the department's secretary within twenty days of service (on July 21) of notice of the July 20 denial of its motion to recuse, but rather it was filed on August 13. MASSPIRG seeks to bridge the three day gap (from August 10 to August 13) by reliance on Mass.R.Civ.P. 6(d), 365 Mass. 747 (1974), which adds three days to any prescribed period within which action must be taken when notice is served by mail. To apply the rule to this situation would contradict the provisions of G.L. c. 25, § 5, specifically governing the timing of appeals. Moreover, rules of court do not govern procedures in the Executive Department. They apply to proceedings in courts. See Mass.R.Civ.P. 1, as amended, Mass. (1982); Mass.R.A.P. 1, as amended, 378 Mass. 925 (1979). The late filing of MASSPIRG's notice of appeal with the department's secretary is an error of a type that calls for dismissal of MASSPIRG's appeal. Schulte v. Director of the Div. of Employment Sec., 369 Mass. 74, 79, 337 N.E.2d 677 (1975).

Although we conclude that MASSPIRG's appeal must be dismissed, we think it appropriate to comment on the underlying claim that Commissioner Selgrade should have disqualified himself in this proceeding because he appeared in the prior, related proceeding (D.P.U. 19494) on behalf of the Massachusetts Executive Office of Energy Resources (MEOER) of which he was the Director of Resource Development. Although his involvement was not extensive, he did participate in writing and in filing a brief in D.P.U. 19494 on behalf of MEOER in support of a determination that the Pilgrim II project was reasonable. The brief expressed unenthusiastic approval of the project. 5 Commissioner Selgrade was appointed a commissioner of the department on September 15, 1981, while D.P.U. 19494 was pending. He recused himself from that matter, which was decided by the other two commissioners one week later.

The earlier proceeding (D.P.U. 19494) was an investigation by the department of future demand for electricity in Edison's service territory, the appropriate level of Edison's reserve capacity, and alternatives to Edison's program for the construction of Pilgrim II. The hearings in D.P.U. 19494 concluded on September 28, 1979, after 121 days of hearings. Almost two years later the department concluded, on September 22, 1981, that oil as a source of electric generation was not an acceptable option and "that nuclear power, despite its recent problems [was] most likely to be the least expensive generation alternative available to the Company." The department concluded that Edison's generation construction program was reasonable. The decision in D.P.U. 19494 did not determine whether Edison could recover costs associated with Pilgrim II, whether Edison reasonably could finance the project, and, of course, whether Edison acted prudently in continuing with the project based on events occurring after the record closed in D.P.U. 19494.

On March 16, 1982, responding to Commissioner Selgrade's request, the State Ethics Commission advised Commissioner Selgrade that, on the facts presented by him he would not violate the conflict of interest law (G.L. c. 268A) by participating in deciding Edison's pending rate proceeding. The Ethics Commission declined to pass on whether Commissioner Selgrade's participation would warrant the conclusion that, on common law principles, he should disqualify himself for bias. The Ethics Commission noted that Commissioner Selgrade's "previous participation, although advocating a position favorable to the Company was, in fact, a part of [his] role as a state employee."

MASSPIRG was a party to the earlier proceeding (D.P.U. 19494) and had notice, therefore, of Commissioner Selgrade's involvement in the earlier proceeding. One of MASSPIRG's current counsel filed an affidavit with the motion to recuse stating that he did not know of the commissioner's involvement in the earlier proceeding until May 28, 1982. We do not know when other representatives of MASSPIRG learned of the commissioner's participation in the earlier proceeding, but the inference is unavoidable that some representatives of MASSPIRG knew or should have known of that involvement at the time of Commissioner Selgrade's participation.

We comment on this issue because it presents the question whether the proceeding was essentially unfair because of Commissioner Selgrade's involvement in it, a circumstance which, if...

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