Cambridge Elec. Light Co. v. Department of Public Utilities

• Citation: 295 N.E.2d 876,363 Mass. 474
• Parties: CAMBRIDGE ELECTRIC LIGHT COMPANY et al. v. DEPARTMENT OF PUBLIC UTILITIES (and a companion case 1 ).
• Decision Date: 23 April 1973
• Court: United States State Supreme Judicial Court of Massachusetts

Page 876

295 N.E.2d 876

363 Mass. 474

CAMBRIDGE ELECTRIC LIGHT COMPANY et al. v. DEPARTMENT OF PUBLIC UTILITIES (and a companion case

¹

).

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Dec. 4, 1972.

Decided April 23, 1973.

Edwin J. Carr, Boston (Marshall S. Davis and William C. Hardy, Boston, with him) for Cambridge Electric Light Co. and others; Richard L. Morningstar, Boston, for Western Massachusetts Electric Co., also with him.

Philip H. R. Cahill, Boston, for Massachusetts Electric Co. and others.

Andrew M. Wolfe, Asst. Atty. Gen., for the Dept. of Public Utilities.

John E. Bowman, Jr., Boston, for Massachusetts Law Reform Institute and another, interveners.

John J. Desmond, III, Boston, for Bostion Edison Co., Joseph P. Rooney, and Robert D. Canty, Boston, for Brockton Edison Co. and another, joined in a brief.

Before TAURO, C.J., and REARDON, HENNESSEY and KAPLAN, JJ.

KAPLAN, Justice.

The petitioners, eighteen gas or electric utility corporations within the jurisdiction of the respondent Department of Public Utilities (department), seek to annul certain regulations dealting with billing of customers and termination of service approved and promulgated by the department after public hearings. The petitioners have made their challenge in the form of several petitions for appeal in the county court under the provisions of G.L. c. 25, § 5. Because of uncertainty about whether appeal under that statute is the correct avenue for judicial review of the department's action, nine of the petitioners have, in addition, lodged in the county court a bill for declaratory relief against the department under G.L. c. 31A, § 7, and G.L. c. 231A, § 2, seeking a declaration fo invalidity of the regulations. The single justice on motion consolidated the appeals and reserved and reported that case without decision to the full court. He similarly reserved and reported the case for declaratory relief, and finally consolidated the two cases for hearing. By order of the single justice, the Massachusetts Law Reform Institute (MLRI) ² and Massachusetts Welfare Rights Organization (MWRO) ³ were permitted to intervene and they have participated in argument before this court. Operation of the regulations was stayed pending disposition of the suits.

A. Proceedings before the department. We first describe the departmental proceedings as they appear from the record made there and incorporated in the reservation and report.

On November 18, 1969, the department commenced its proceeding numbered D.P.U. 16386 by issuing a proposal under § 2 of the Administrative Procedure Act (G.L. c. 30A, § 2) to adopt a regulation to fix the rate of interest to be paid by gas, water, electric, telephone and telegraph companies upon deposits made by their customers. On the same date the department instituted its proceeding numbered D.P.U. 16386A by issuing a further proposal under § 2 to adopt regulations, originally drafted by the intervener MLRI, applicable to the same classes of companies, regarding deposits by customers and meter reading, billing, and termination and restoration of service. A public hearing in the two proceedings was set for December 11, 1969, and any interested persons were invited to present 'data, views or arguments' ⁴ orally or in writing. Notice was published in newspapers and sent to a list including the utility corporations of the classes mentioned in the proposals.

At the hearing appearances were entered for various companies including the petitioners, as well as for MLRI. The chairman of the Commission, ⁵ presiding, stated near the outset that these were rule making as distinguished from adjudicatory proceedings within the meaning of the Administrative Procedure Act. A number of public officials made statements; the speakers included members of the General Court, a Boston city councillor, the Commissioner of Administration of the Commonwealth, and representatives of the Consumer Protection Division of the Attorney General's office. Counsel for MLRI made an opening statement concerning its study and appraisal of the situation, and then presented testimony about the experiences of low income customers with the utility services. This came largely from attorneys in legal services offices knowledgeable in problems of the poor. Some of the testimony was illustrated by affidavits of the customers involved, and there was some direct testimony by customers. Also introduced were the written replies made by a few companies to a set of questions put to them by MLRI.

MLRI emphasized that utility services--especially gas and electric supply--are, as one witness put it, 'essential to ordinary living,' and that any inequities or ambiguities in the provision of such services would fall most heavily on the poor.

With respect to the companies' handling of customers' security deposits, ⁶ the proponents of regulation urged that the hardships imposed by capricious or arbitrary demands for these deposits should be eliminated by adoption of general rules with rational criteria. ⁷

MLRI submitted that there was also a regrettable disuniformity and indefiniteness and more than occasional arbitrariness in the companies' handling of termination of service for customers' nonpayment of bills. Companies had shut off service on their own mistaken belief as to the facts, or in the face of honest protests by customers that they were not in arrears. (The Commissioner of Administration observed that '(t)he companies have a highly effective weapon to bring to bear in the event of disagreement. Faced with the threat of elimination of vital services such as electricity, gas or telephone service, even the hardiest customer frequently decides that it is easier to go along rather than to argue.') Certain billing practices were singled out as especially harsh. Thus a company might bill a customer on an estimated basis for a period of time, and then, after an actual reading of the meter, submit a very large bill adjusting for prior underestimates. The customer, caught unaware, might not be in a position to pay, yet he would be subject to discontinuance of service. So also a company might state in a series of bills showing amounts in arrears that it proposed to cut off service, but refrain from actually terminating, thus lulling the customer into the belief that he was being 'carried'; then the company would suddenly make good the threat.

MLRI proposed a standardization of the period after billing and nonpayment before service could be discontinued, as well as correction of the injustice (as MLRI saw it) of having a company decide unilaterally that the customer was in fact delinquent when he was maintaining the contrary; there should be a final impartial arbiter, which might be the department itself. Related meter reading and billing practices should be reformed and better regularized.

During the hearing a question arose as to the affidavits received. The chairman said the Commission had procedural leeway; the companies could not insist upon exclusion of the affidavits in case the affiants were not produced for cross-examination, but the Commission would than take that factor into account in ascribing weight to the affidavits. Counsel who had produced the affidavits indicated they would do their best to produce the affiants at a later date.

A further hearing in D.P.U. 16386 and 16386A was scheduled for January 6, 1970, but it was not held. The Commission decided to sever and deal separately with the whole matter of security deposits. Accordingly, a proceeding D.P.U. 16696 was commenced on July 31, 1970, with due publication and notice, calling for a public hearing on August 25, 1970, on regulations proposed under § 2 of the Administrative Procedure Act applicable to gas, electric, and telephone companies on the subjects of billings, meter readings, estimated bills, termination of service, opportunities to contest termination of service, and use of multiple meters. This proceeding superseded D.P.U. 16386A and absorbed and carried forward the relevant parts of the record made at the December hearing.

The proposed regulations representing the target of the August hearing were a revision of the earlier draft with security deposit provisions eliminated. The August hearing ⁸ was devoted almost entirely to oral statements on behalf of companies, supplemented by a number of written statements, ⁹ the whole elucidating company attitudes and practices and presenting criticisms of the proposed regulations, accompanied in some instances by suggested specific changes of the text.

Conceding the possibility of sporadic mistakes or injustices, the companies ¹⁰ nevertheless expressed confidence in the general fairness of the billing and termination procedures they had worked out for themselves. The procedures varied among the companies. Indeed it was suggested that differences in market and other conditions among the companies made a uniform procedure inadvisable; perhaps each company should submit its own procedure for separate approval by the department. As a rule the companies allowed about two months between billing and actual termination, which gave a realistic opportunity for protest by a customer who disputed the meter reading or the rate or his responsibility for the particular bill. The department evidently helped on occasion by informal mediation of disputes. But the companies were not prepared to give up their claimed right to discontinue service unilaterally and abruptly ¹¹ if circumstances warranted. Regulations laying down a fixed minimum interval between billing and termination were therefore objected to, as was the idea of a moratorium on discontinuance of service pending resolution of disputes. The general tendency of such proposals, according to the companies, would be to delay payment of bills, slowing 'cash flow' and ultimately increasing costs to the companies which in the long run would be borne disproportionately by...